Best Sectors Stocks Motilal Oswal

June 2014
Highlights of this edition

India delivers 8%return in
month of May; re-emerges as
top performer in CY14YTD
Real Estate, Utilities and
Metals are top performing
sectors for May 2014
About the product
As the tagline suggests,
BULLS & BEARSis a
handbook on valuations in
India. Every month it will
cover:
Valuations of Indian
markets vis--vis global
markets
Current valuation of
companies in various
sectors
Sectors which are
currently valued at
premium/discount to
their historical long-
period averages
2
Summary
Research & Database Teams ([email protected])
BULLS & BEARS | June 2014
q Indian Equities: CY14YTD returns of 15%; re-emerges as top performer
Nifty hit life-time high of 7,367 in May-14; however closed at 7,230 with 8%return during the
month and 15%return in CY14 YTD.
Real Estate, Utilities and Metals were the top performing sector on MoM basis with 28%, 20%
and 15%returns relative to Nifty.
Dollar beneficiaries (Healthcare and Technology) were top underperformers in May.
q Stock performance: 4 out of top 6 performers in month of May are PSUs
Sesa Sterlite was the top performing stock with 51%return, followed by NTPC (38%), BHEL
(34%), Tata Power (33%), Coal India (27%) and SBI (22%) in Sensex for month of May.
Dr Reddys (-10%) was the worst performer followed by Infosys (-7%), Sun Pharma (-4%), Cipla
(-3%) and Wipro (-3%).
q Sector valuations: Cyclicalsstill at a discount (P/B) despite outperformance
Despite the recent outperformance, Cyclicals still trade at a discount to its historical average on
P/B basis. PSU Banks is at 15%discount to its historic average P/B, while Capital Goods is at
24%and Metals are at 36%discount.
Oil & Gas and Utilities outperformed Nifty during May-14 on anticipation of policy reform
actions post a strong majority government.
q Nifty-50 highlights: Cairn India, NMDC and IDFC trades at huge discounts
19 Stocks in Nifty trades at discount to its historic average and 31 stocks at premium.
Companies with significant discount to their averages are: Cairn India (-54%), NMDC (-36%),
IDFC (-35%), Tata Steel (-23%), Infosys (-23%) and Tata Motors (-22%).
NOTES:
Prices as on 30 May 2014
BULL icon:
Sectors trading
at premium to historic
averages
BEAR icon:
Sectors trading
at discount to historic
averages
Valuations are on
12-month forward basis
unless otherwise
mentioned
Sector valuations are
based on MOSL coverage
companies
Global equities data
sourced from Bloomberg.
Sensex valuations based
on MOSL estimates
3
Contents
q Global Equities: Performance and valuation snapshot
q Indian Equities: Key valuation metrics
q Nifty and Sector performance
q Nifty companies valuations
q Sector highlights: Overview and specific sector valuations
AUTO
BANKS / FINANCIALS
CAPITAL GOODS
CEMENT
CONSUMER
HEALTHCARE
MEDIA
METALS
OIL & GAS
REAL ESTATE
RETAIL
TECHNOLOGY
TELECOM
UTILITIES
Mkt Cap
(USD T)
YTD Chg
(%)
CY13 /
FY14
CY14 /
FY15
CY13 /
FY14
CY14 /
FY15
CY13 /
FY14
CY14 /
FY15
CY13 /
FY14
CY14 /
FY15
Japan 4.4 -10 19.1 16.5 6 5 1.5 1.4 7.8 8.7
US 23.0 4 17.7 16.3 -2 3 2.7 2.5 15.2 15.5
Indonesia 0.4 14 20.8 15.5 15 -2 2.5 2.8 11.9 17.9
Taiwan 1.0 5 19.1 15.1 6 -5 1.9 1.7 9.7 11.6
UK 4.1 1 19.8 14.1 10 -11 2.0 1.9 10.0 13.2
MSCI EM 7.8 2 12.7 11.1 -30 -30 1.5 1.4 11.8 12.4
Brazil 1.0 -1 15.7 10.6 -13 -33 1.3 1.2 8.3 11.7
Korea 1.3 -1 21.4 10.5 18 -33 1.2 1.1 5.5 10.0
China 3.2 -4 10.0 8.0 -45 -49 1.3 1.1 13.0 14.0
Russia 0.7 -3 5.3 4.9 -71 -69 0.7 0.6 12.6 11.8
India 1.4 14 18.1 15.8 2.9 2.5 15.9 16.1
PE (x) PB (x) RoE (%)
Prem / Disc to India
PE (%)
4
Global equities:India up 15% CY14YTD; re-emerges as top performer
Sensex v/s Other Markets
Indianequitiesaretradingat 15.8xFY15Eearnings; at apremiumtomost other EMs.
JapanandUSareonlytwocountrieswhichareat premiumtoIndia.
IndiasRoEremainssuperior tomost EMs(except Indonesia) - animportant differentiator for valuationpremium.
Source: Bloomberg/MOSL
5
Global equities: Indias contribution to world mktcap inches above averages
Source: Bloomberg, 12 month forward valuation.
Mkt cap appreciation since Dec 2003 (x)
Indiasmarket capappreciated5.1xinlast ~10years. IndonesiaandChinaarethebest growingequitymarket inthe
last 10years.
Indias contribution to WorldMarket cap has climbedupto 2.2%, marginallyaboveits longperiodaveragefor the
first timesinceJan-13.
Indianmarketsnowtradeat itshistoriclongperiodaverage; Developedeconomiesof UKandUStradeat premium.
Developed economies trading at premium to LPA
India's Contribution to World Market cap (%)
Country Current LPA Prem/Disc (%)
UK 14.0 11.5 22.0
Indonesia 16.0 13.8 16.0
US 15.9 14.8 7.0
India 15.4 15.4 -0.2
MSCI EM 11.2 11.3 -1.1
Taiwan 14.7 14.9 -1.1
Korea 10.2 10.8 -5.3
Brazil 11.1 13.6 -18.8
Japan 16.1 22.4 -27.9
Russia 4.7 6.5 -28.6
China 8.0 16.0 -50.3
PE (x)
7.6
6.3
5.1
4.6
3.9
3.4
2.4
1.7 1.7
1.4
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India's Contribution to World Mcap (%)
Averageof 2.1%
6
Indian Equities: Markets at new highs; Valuations still at historic average
BSESensexPEat 15.4xisnowat itshistoricaverages; PBat 2.5xisat 7%discount toitsaverages.
SensexRoEat 16.4%isbelowthelongperiodaverageof 19.1%.
12-month forward Sensex P/E (x) 12-month forward Sensex P/B (x)
12-month forward Sensex RoE (%)
Indias market cap to GDP (%)
24.6
10.7
15.4
7
12
17
22
27
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10 Year Avg: 15.4x
4.2
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2.5
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2.8
3.5
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10 Year Avg: 19.1%
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E
Average of 72% for
the period
CY14 YTD CY14 YTD
Sector Jan-14 Feb-14 Mar-14 Apr-14 May-14 Chg(%) Jan-14 Feb-14 Mar-14 Apr-14 May-14 Chg(%)
Real Estate -15 -1 22 -5 36 32 -12 -4 15 -5 28 17
Utilities -10 0 13 -2 28 27 -7 -3 6 -2 20 13
Metal -8 -5 16 -1 23 23 -5 -8 9 -1 15 9
Banks - PSU -14 4 28 8 22 50 -10 1 21 9 14 36
Capital Goods -8 9 16 1 21 43 -4 6 9 1 13 29
Retail -3 8 8 2 19 37 1 5 1 2 11 23
Mid-Cap (BSE) -6 3 9 3 16 26 -3 0 2 4 8 12
Cement -7 5 19 -6 15 26 -3 2 13 -6 7 12
Oil -4 0 13 1 14 23 -1 -3 6 1 6 8
Banks - Pvt -9 7 15 -1 13 26 -5 4 8 0 5 11
NBFC -7 3 12 0 13 22 -3 0 6 0 5 8
Auto -6 9 5 1 8 18 -2 6 -1 1 0 4
Media -5 2 5 -4 7 5 -1 -1 -2 -4 -1 -10
Telecom -7 -9 10 1 5 -1 -4 -12 4 1 -3 -16
Consumer -1 -1 8 -3 1 5 3 -4 1 -3 -6 -10
Technology 4 3 -10 0 -3 -7 8 0 -17 0 -11 -22
Health Care 1 7 -7 7 -4 4 5 4 -14 7 -12 -11
Nifty Abs Chg(%) -3 3 7 0 8 15
MoM Abs. Performance (%) Relative to Nifty MoM Performance (%)
7
Indian Equities: Real Estate, Utilities, Metals outperform in May
Sectoral performance absolute and relative to Nifty (%)
Niftyhit life-timehighof 7,367inMay-14; however closedat 7,230with 8%returnduringthemonth and 15%returnin
CY14YTD.
Real Estate, UtilitiesandMetalswerethetopperformingsector onMoMbasiswith28%, 20%and15%returnsrelativeto
Nifty.
Mid-capscontinueditsoutperformancefor thethirdconsecutivemonthoutperforming Niftyby8%.
Dollar beneficiaries(HealthcareandTechnology) weretopunderperformersinMay.
8
Stock performance: 4 out of top 6 performers in month of May are PSUs
Sesa Sterlite was the top
performing stock with 51%
return, followed by NTPC(38%),
BHEL (34%), Tata Power (33%),
Coal India(27%) andSBI (22%) in
Sensexfor monthof May.
4of top6performersduringthe
monthwerePSUcompanies.
Dr Reddys (-10%) was the worst
performer followed by Infosys (-
7%), Sun Pharma (-4%), Cipla (-
3%) and Wipro (-3%).
Best & worst performers in Sensex CY14YTD (%)
Only dollar beneficiaries stocks
were under performers for
CY14YTD.
L&T (+45%), SBI (+44%), Axis
Bank (+41%), Sesa Sterlite
(+38%) and BHEL (+37%) were
best performersfor CY14YTD.
Infosys (-16%), Wipro (-10%),
Cipla(-4%), Dr Reddys(-3%) and
TCS(-1%) wereworst performers
for CY14YTD.
Best & worst performers in Sensex MoM May-14 (%)
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9
Indian Equities: Domestic recovery key to earnings growth
Corporate sector earnings are expected to grow at 16%CAGRover FY14-16. This will bringthe growth rates
aroundlongtermaverages, after growingat 8%for thelast sixyears.
However, thepositiveelectionoutcomecoupledwithastrongmajoritygovernment canleadtoamorebusiness
friendlyenvironment andrevival indomesticdemand. Thiswill driveearningsupgradesfor CorporateIndiaover
thenext fewyears.
Capital Goods, Auto, TelecomandMetalshavehealthyPATgrowthfor FY16intheSensexuniverse.
Consumer towitnessmoderategrowthover FY15-16duetoslowdowninvolumes.
MetalstoseeacceleratedearningsgrowthduringFY15, after 2yearsof decline.
Oil &GasandUtilitiesPATgrowthfor FY16tobeinsingledigits.
SENSEX GROWTH & VALUATIONS
Weight Mcap
Sector (%) (USD b) FY14E FY15E FY16E FY14EFY15E FY16E FY14EFY15E FY16E FY14E FY15E FY16E
Auto 10.5 65 26.3 6.6 31.5 14.0 13.1 10.0 3.2 2.7 2.2 23.0 20.6 22.3
Banking & Financial 28.3 127 2.6 26.7 21.6 17.0 13.4 11.1 2.4 2.1 1.9 14.3 15.9 17.1
Capital Goods 7.2 34 -33.7 -8.2 43.0 26.6 29.0 20.3 3.1 2.8 2.5 11.5 9.7 12.6
Consumer 11.0 68 13.7 14.4 14.5 32.8 28.7 25.1 14.1 12.7 11.5 43.0 44.2 46.0
Healthcare 4.8 34 50.7 4.7 17.3 23.6 22.6 19.2 5.2 4.3 3.6 22.1 19.1 18.6
Metals 4.2 27 1.4 22.3 22.1 14.4 11.7 9.6 1.0 1.0 0.9 7.3 8.2 9.3
Oil & Gas 13.6 121 6.7 11.1 9.9 13.6 12.3 11.2 1.8 1.6 1.5 13.3 13.4 13.3
Technology 14.4 121 28.1 10.4 13.2 18.9 17.1 15.1 5.2 4.5 3.8 27.5 26.1 24.9
Telecom 1.9 23 21.8 88.5 26.2 49.6 26.3 20.9 2.3 2.1 2.0 4.6 8.1 9.4
Utilties 4.1 67 -3.9 11.6 9.7 14.9 13.3 12.2 2.8 2.5 2.3 18.8 19.0 19.0
Sensex 100 686 13.1 13.8 18.8 18.1 15.9 13.4 2.9 2.5 2.3 15.8 16.0 16.9
#for Sensex we have taken EPS Growth; Sensex numbers are free float adjusted.
PAT Growth (%) # PE (x) PB (x) ROE (%)
10
Nifty: Cairn India, NMDC and IDFC trades at huge discounts
19StocksinNiftytradesat discount toitshistoricaverageand31stocksat premium.
Companieswithsignificant discount totheir averagesare: CairnIndia(-54%), NMDC(-36%), IDFC(-35%), TataSteel (-23%),
Infosys(-23%) andTataMotors(-22%).
Companies with significant premiumto their averages are: Ultratech (+74%), ACC(+49%), Hindalco (+48%), DLF (+48%),
Grasim(+44%) andAsianPaints(+36%).
Name Sector Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Bajaj Auto Auto 15.4 12.8 21 0 -17 4.8 5.5 -12 94 105
Hero MotoCorp Auto 15.8 14.7 7 3 -4 6.6 6.8 -2 165 152
Mahindra & Mahind Auto 15.1 11.4 32 -2 -26 3.6 3.1 18 46 15
Maruti Suzuki Auto 18.5 14.9 25 21 -3 2.8 2.5 12 12 -7
Tata Motors Auto 8.7 11.2 -22 -43 -27 1.6 2.7 -41 -36 2
Axis Bank Banks - Private 11.9 12.4 -4 -23 -19 1.9 2.0 -7 -24 -24
HDFC Bank Banks - Private 17.3 20.8 -17 12 35 3.6 3.4 7 43 25
ICICI Bank Banks - Private 14.2 16.9 -16 -8 10 2.0 1.8 14 -19 -34
IndusInd Bank Banks - Private 15.5 17.4 -11 1 13 2.7 1.9 37 6 -28
Kotak Mahindra BanBanks - Private 21.7 18.1 20 41 17 3.1 2.6 17 24 -2
Bank of Baroda Banks - PSU 6.7 6.5 2 -57 -57 0.9 1.0 -8 -62 -62
Punjab National Ban Banks - PSU 7.4 6.9 8 -52 -55 0.9 1.2 -27 -65 -56
State Bank Banks - PSU 8.8 8.8 1 -42 -43 1.2 1.2 -4 -53 -54
HDFC Banks - NBFC 20.8 22.2 -6 35 44 4.3 4.6 -5 74 70
IDFC Banks - NBFC 9.9 15.2 -35 -36 -1 1.1 2.0 -43 -54 -25
BHEL Capital Goods 22.7 17.6 29 48 14 1.7 4.2 -59 -32 55
Larsen & Toubro Capital Goods 27.0 20.6 31 76 34 3.8 4.2 -10 53 58
ACC Cement 22.8 15.3 49 48 -1 3.2 2.9 11 29 9
Ambuja Cements Cement 19.6 15.2 29 28 -1 2.9 3.0 0 18 10
GrasimIndustries Cement 11.4 7.9 44 -26 -48 1.2 1.4 -16 -52 -47
Ultratech Cement Cement 24.1 13.8 74 57 -10 3.3 2.9 13 32 9
Asian Paints Consumer 31.8 23.3 36 107 52 10.3 8.3 23 313 212
Hind. Unilever Consumer 32.6 26.6 23 113 73 18.7 20.4 -9 648 663
ITC Consumer 25.9 22.0 18 68 43 10.6 6.7 58 325 151
United Spirits Consumer 62.9 50.0 26 310 225 4.7 3.4 38 89 27
PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%)
11
Nifty: Cairn India, NMDC and IDFC trades at huge discounts
Name Sector Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Cipla Healthcare 19.4 21.3 -9 26 39 2.7 3.8 -29 6 40
Dr Reddy s Labs Healthcare 18.4 26.4 -30 20 72 3.7 3.3 13 48 22
Lupin Healthcare 20.5 17.6 16 34 15 4.7 4.1 14 87 53
Sun Pharma Healthcare 24.3 20.5 19 58 33 5.1 4.4 16 104 63
Hindalco Metals 12.8 8.7 48 -16 -44 1.2 1.7 -30 -53 -37
JSPL Metals 10.3 10.0 2 -33 -35 1.1 3.2 -65 -55 19
NMDC Metals 9.6 15.0 -36 -38 -3 2.1 4.8 -57 -17 80
Sesa Sterlite Metals 13.4 6.9 94 -13 -55 1.9 2.2 -17 -26 -17
Tata Steel Metals 8.3 10.8 -23 -46 -30 1.6 2.3 -33 -38 -13
BPCL Oil & Gas 12.6 12.5 1 -18 -19 1.8 1.3 39 -30 -53
Cairn India Oil & Gas 6.3 13.8 -54 -59 -10 1.0 1.2 -19 -61 -55
GAIL Oil & Gas 12.0 11.4 5 -22 -26 1.6 2.1 -23 -37 -23
ONGC Oil & Gas 10.6 9.7 9 -31 -37 1.7 2.0 -17 -33 -25
Reliance Inds. Oil & Gas 12.6 12.5 1 -18 -19 1.4 1.7 -15 -44 -38
DLF Real Estate 55.7 37.6 48 262 144 1.3 2.3 -42 -47 -16
HCL Technologies Technology 14.4 14.4 0 -6 -6 4.0 3.1 30 60 15
Infosys Technology 15.0 19.4 -23 -2 26 3.1 5.6 -45 22 109
TCS Technology 18.8 18.2 3 22 18 6.2 6.3 -1 149 134
Tech Mahindra Technology 12.8 16.1 -21 -17 5 3.2 4.4 -26 30 62
Wipro Technology 13.7 16.7 -18 -11 8 2.9 4.0 -26 18 50
Bharti Airtel Telecom 25.2 25.8 -2 64 68 2.0 3.6 -45 -21 33
Coal India Utilities 12.8 12.3 4 -17 -20 4.6 4.6 0 84 72
NTPC Utilities 13.2 16.3 -19 -14 6 1.4 2.1 -30 -43 -23
Power Grid Corp. Utilities 12.5 14.5 -14 -19 -6 1.7 2.0 -15 -33 -27
Tata Power Utilities 15.8 18.8 -16 3 22 1.8 2.1 -12 -27 -23
Sensex 15.4 15.4 0 2.5 2.7 -7
PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%)
Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg MoM YTD
Gujarat Pipavav 20.4 27.6 -26 33 79 3.6 2.3 58 44 -15 53 99
India Cements 21.9 14.8 48 43 -4 0.8 1.2 -37 -69 -54 46 66
Indbull.RealEst. 8.0 19.9 -60 -48 29 0.5 0.8 -37 -79 -70 38 25
Oriental Bank 7.2 6.4 12 -53 -58 0.7 0.9 -20 -71 -66 37 48
TVS Motor Co. 12.4 11.7 6 -19 -24 3.3 1.5 127 32 -46 37 71
PTC India 8.9 17.4 -49 -42 13 1.0 1.5 -36 -61 -43 29 30
Federal Bank 11.0 7.5 48 -28 -51 1.3 0.9 37 -49 -65 28 38
Birla Corpn. 9.7 7.2 34 -37 -53 1.0 1.6 -38 -59 -39 27 45
CESC 10.0 9.1 10 -35 -41 1.1 1.1 -3 -56 -58 27 24
South Ind.Bank 6.6 5.9 12 -57 -62 1.0 0.8 20 -59 -68 23 40
Thermax 28.9 18.9 53 88 23 4.5 4.6 -3 79 71 21 25
Sobha Developers 15.8 18.2 -13 3 18 1.8 2.2 -22 -30 -16 21 44
PVR 30.5 45.7 -33 99 197 5.0 2.4 109 101 -10 17 -11
Phoenix Mills 28.0 43.1 -35 83 180 2.3 3.1 -27 -9 16 17 29
Symphony 24.1 7.9 206 57 -49 9.1 2.9 211 264 9 12 116
Crompton Greaves 19.5 20.9 -7 27 36 3.1 4.4 -29 25 65 11 42
Bajaj Finance 11.8 16.4 -28 -23 7 2.1 1.1 89 -16 -59 8 28
Petronet LNG 14.5 10.8 34 -6 -30 2.0 2.6 -24 -19 -2 7 27
Torrent Pharma. 15.7 12.7 23 2 -17 4.1 3.2 25 63 21 6 29
Monsanto India 16.6 18.9 -12 8 23 4.7 3.7 27 88 38 5 122
Bajaj Electricals 15.6 10.6 47 2 -31 3.4 2.3 48 38 -14 3 35
Britannia Inds. 22.2 21.6 3 44 40 9.3 6.7 39 272 150 2 -4
Atul Auto 11.4 9.2 23 -26 -40 3.3 1.4 142 31 -50 0 32
Kaveri Seed 13.8 9.3 49 -10 -40 5.1 2.6 99 106 -3 0 71
Ipca Labs. 14.9 12.3 21 -3 -20 3.8 2.6 44 52 -1 -6 9
Alembic Pharma 13.8 8.7 58 -10 -43 4.8 3.0 59 91 12 -17 17
PE (x) Relative to Sensex P/E (%) PB (x) Relative to Sensex P/B (%) Price Chg (%)
12
Midcap: Outperformance continues for third consecutive month
DuringMay-14, Mid-capsdelivered16%returnsagainst 8%returnsof Nifty.
Topmid-capperformersinMay-14wereGujarat Pipavav(53%), IndiaCements(46%), IBREL(38%), OBC(37%), TVSMotors
(37%), PTCIndia(29%) andFederal Bank(28%).
Underperformers in May-14 were Alembic Pharma (-17%) and Ipca Labs (-6%). Both these companies trade at huge
premiumtolongperiodaverages.
13
Sector valuations: Cyclicalsstill at a discount to P/B despite recent outperformance
Despite the recent outperformance, Cyclicals still trade at adiscount to its historical average on P/Bbasis. PSUBanks is at
15%discount toitshistoricaverageP/B, whileCapital Goodsisat 24%andMetalsareat 36%discount.
Oil & Gas and Utilities outperformed Nifty duringMay-14 on anticipation of policy reformactions post a strongmajority
government. Accordingly, onPEbasis, Oil &Gas nowtrades at marginal premiumof 3%to averagewhileUtilities trades at
10%discount toaverage. However, onPBbasis, boththesesectorstradeat discount toaverage.
Autosnowtradeat 10%premiumtoitsaverage, drivenby2Wcompaniesandsignsof CVgrowthbottomingout.
Telecomtrades at 26%discount to EV/EBITDA average. Post passive consolidation and RPMs improving, strong growth is
expectedinthesector inFY15.
Export-oriented sectors of Technology and Healthcare with their recent underperformance now trade at/below their
historical PEaverages.
Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Auto 13.2 11.9 10.3 -14 -23 2.7 2.9 -7.7 7 8
Banks - Private 14.7 15.1 -2.6 -4 -3 2.6 2.3 13.9 4 -15
Banks - PSU 7.9 6.9 13.8 -49 -54 1.0 1.1 -15.2 -62 -58
NBFC 11.0 11.3 -2.4 -28 -28 2.2 2.2 2.9 -11 -19
Capital Goods 27.6 20.2 36.6 80 29 3.3 4.4 -24.3 34 60
Cement 20.4 13.5 51.2 33 -11 2.3 2.4 -3.9 -9 -13
Consumer 29.8 24.2 22.8 94 61 10.4 8.3 25.5 318 219
Healthcare 21.7 21.9 -0.8 42 46 4.3 4.2 3.3 74 61
Media 21.0 21.5 -2.4 37 37 4.8 3.7 27.5 91 39
Metals 10.6 9.4 12.7 -31 -40 1.1 1.8 -35.5 -55 -36
Oil & Gas 11.3 11.0 3.2 -26 -29 1.5 1.7 -14.7 -41 -35
Real Estate 31.4 21.0 49.5 104 33 1.2 1.4 -11.4 -51 -52
Retail 25.0 28.8 -13.3 63 84 4.9 4.3 14.2 96 60
Technology 16.1 17.0 -5.6 5 13 4.1 5.1 -19.1 66 91
Telecom 22.2 22.5 -1.5 44 48 1.9 2.5 -24.7 -25 -9
Utilities 13.0 14.4 -9.7 -15 -8 1.4 1.7 -18.3 -44 -36
PB (x)
Sector
Relative to Sensex
P/E (%)
Relative to Sensex
P/B (%)
PE (x)
-14
-23
-50
-25
0
25
50
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Relative to Sensex PE (%)
14
Auto: Trades at premium of 10%, 2W recovery accelerates, CV bottomed-out
Auto sector PEtrades at premiumof 10%
to its average PE. Expect recovery to
accelerate in 2Ws, demand revival in PVs
on positive consumer sentiments,
bottoming-out of CVs.
Bajaj Autoistradingat 21%premiumtoits
average, downgradeinearningsby~5%.
TVS Motor saw a significant upgrade in
earnings and is attractively placed on
valuations.
Tata Motors is only stock trading at
discount tohistoricaverages.
Sector Performance CY14 YTD
Auto +18%
13.2
11.9
3
10
17
24
31
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Auto Sector P/E (x) 10 Yr Avg (x)
2.7
2.9
1.0
2.0
3.0
4.0
5.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Auto Sector P/B (x) 10 Yr Avg (x)
7
8
-20
-5
10
25
40
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Relative to Sensex PB (%)
Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Ashok Leyland - 13.0 - - -15 2.0 3.0 -35 -21 13
Bajaj Auto 15.4 12.8 21 0 -17 4.8 5.5 -12 94 105
Eicher Motors 24.4 12.5 95 59 -19 6.4 2.1 200 157 -20
Exide Inds. 20.2 16.6 22 31 8 2.8 3.1 -10 14 17
Hero Motocorp 15.8 14.7 7 3 -4 6.6 6.8 -2 165 152
M & M 15.1 11.4 32 -2 -26 3.6 3.1 18 46 15
Maruti Suzuki 18.5 14.9 25 21 -3 2.8 2.5 12 12 -7
Tata Motors 8.7 11.2 -22 -43 -27 1.6 2.7 -41 -36 2
TVS Motor Co. 12.4 11.7 6 -19 -24 3.3 1.5 127 32 -46
Relative to Sensex P/E (%) Relative to Sensex P/B (%) PE (x) PB (x)
-4
-3
-40
-20
0
20
40
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
15
Banks Private: Healthy NII growth, strong ROAs; valuations attractive
Private banks are trading at 14%
premium to their historical average PB
andjust 4%premiumtomarket PB.
Private banks reported healthy NII
growth during4QFY14, driven byin-line/
better than expected NIMs and loan
growth.
Axis Bank and Yes Bank are only two
stocks which are trading at discounts of
7%/3% respectively to its PB averages;
IndusInd Bank trade at premiumof 37%
(highest inthesector).
Private Banks +26%
14.7 15.1
5
12
19
26
33
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Private Banks P/E (x) 10 Yr Avg (x)
2.6
2.3
1.0
1.8
2.5
3.3
4.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Private Banks P/B (x) 10 Yr Avg (x)
4
-15
-40
-26
-12
2
16
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Axis Bank 11.9 12.4 -4 -23 -19 1.9 2.0 -7 -24 -24
Federal Bank 11.0 7.5 48 -28 -51 1.3 0.9 37 -49 -65
HDFC Bank 17.3 20.8 -17 12 35 3.6 3.4 7 43 25
ICICI Bank 14.2 16.9 -16 -8 10 2.0 1.8 14 -19 -34
IndusInd Bank 15.5 17.4 -11 1 13 2.7 1.9 37 6 -28
ING Vysya Bank 15.0 13.0 16 -2 -15 1.5 1.3 16 -38 -51
J & K Bank 5.8 6.4 -10 -63 -58 1.1 1.0 7 -57 -63
Kotak Mah. Bank 21.7 18.1 20 41 17 3.1 2.6 17 24 -2
South Ind.Bank 6.6 5.9 12 -57 -62 1.0 0.8 20 -59 -68
Yes Bank 10.8 13.9 -22 -29 -10 2.3 2.4 -3 -7 -11
-49
-54
-75
-65
-55
-45
-35
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
16
Banks PSU: Valuations marginally below historic averages at 1.0x
PSU banks now trade at 1.0x which is at
15%discount to its historic averages and
62%discount to market PB. It is the best
performing sector of CY14YTD.
PSU Banks are under pressure but signs
of bottoming out; PSB earnings declined
12%YoY in 4QFY14 (though better than
expected) led by higher credit cost. NIMs
continued to remain under pressure.
All PSU banks are at discount , except SBI
and BOB, which are at single digit
discount to historical average PB.
PSU Banks +50%
7.9
6.9
3
5
7
9
11
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
PSU Banks P/E (x) 10 Yr Avg (x)
1.0
1.1
0.3
0.8
1.3
1.8
2.3
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
PSU Banks P/B (x) 10 Yr Avg (x)
-62
-58
-80
-70
-60
-50
-40
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Andhra Bank 11.1 6.5 71 -28 -58 0.6 1.0 -37 -75 -63
Bank of Baroda 6.7 6.5 2 -57 -57 0.9 1.0 -8 -62 -62
Bank of India 5.4 6.6 -19 -65 -57 0.7 1.1 -35 -72 -61
Canara Bank 6.7 5.8 17 -56 -62 0.7 1.0 -26 -71 -64
Corporation Bank 7.3 6.6 11 -52 -57 0.5 0.9 -43 -78 -65
Dena Bank 5.5 5.0 12 -64 -68 0.5 0.7 -29 -80 -74
IDBI Bank 17.3 9.8 76 13 -36 0.7 0.9 -22 -73 -68
Indian Bank 5.5 5.0 10 -64 -68 0.6 0.9 -31 -75 -66
Oriental Bank 7.2 6.4 12 -53 -58 0.7 0.9 -20 -71 -66
Punjab Natl.Bank 7.4 6.9 8 -52 -55 0.9 1.2 -27 -65 -56
St Bk of India 8.8 8.8 1 -42 -43 1.2 1.2 -4 -53 -54
Union Bank (I) 6.3 6.2 0 -59 -59 0.7 1.1 -36 -72 -60
-28
-28
-70
-50
-30
-10
10
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
17
NBFC: Infrastructure finance companies IDFC and PFC trade at discounts
NBFCstradeat itshistoricaverageof 2.2x
PB; and11%discount toSensexPB.
Bajaj Financecontinuestoridehighonits
diversification strategy and is the only
stock tradingat a huge premiumof 89%
tohistorical average.
InfrastructureFinancecompaniesof IDFC,
PFCtradesat 43%and17%discount toits
averagePB.
HDFC and M&M Financial are only two
stocks which are trading at premiumto
market PB.
NBFC +22%
11.0
11.3
3
8
13
18
23
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
NBFC P/E (x) 10 Yr Avg (x)
2.2
2.2
0.0
1.0
2.0
3.0
4.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
NBFC P/B (x) 10 Yr Avg (x)
-11
-19
-75
-50
-25
0
25
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Bajaj Finance 11.8 16.4 -28 -23 7 2.1 1.1 89 -16 -59
H D F C 20.8 22.2 -6 35 44 4.3 4.6 -5 74 70
I D F C 9.9 15.2 -35 -36 -1 1.1 2.0 -43 -54 -25
LIC Housing Fin. 10.3 7.8 33 -33 -49 1.8 1.4 26 -29 -47
M & M Financial 16.6 11.2 48 8 -27 2.9 1.9 47 14 -27
Power Fin.Corpn. 5.6 8.5 -34 -63 -45 1.1 1.4 -17 -55 -49
Rural Elec.Corp. 5.5 6.4 -13 -64 -58 1.2 1.3 -4 -50 -51
ShriramTrans. 13.0 9.2 42 -15 -40 2.1 1.9 10 -16 -29
80
29
-30
0
30
60
90
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
18
Capital Goods: Trades above PE avg; expect order inflows to pick up in 2HFY15
Capital Goods trades at 24%discount to
itshistorical PBaverage, however it trades
at 37% premium to its historical PE
average. It is second best performing
sector of CY14YTD.
For 4QFY14, performance for the capital
goods sector continued to remain
impactedas thepaceof project execution
/ order finalizationfailedtopickup.
L&Tnowtrades at 27xPE; whichis above
its long period historical average. ABB
trade at 18% discount to historical PE
average.
Capital Goods +43%
27.6
20.2
7
17
27
37
47
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Capital Goods P/E (x) 10 Yr Avg (x)
3.3
4.4
0.0
3.0
6.0
9.0
12.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Capital Goods P/B (x) 10 Yr Avg (x)
34
60
-50
15
80
145
210
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
A B B 54.0 66.1 -18 251 330 6.5 6.8 -5 161 155
B H E L 22.7 17.6 29 48 14 1.7 4.2 -59 -32 55
Crompton Greaves 19.5 20.9 -7 27 36 3.1 4.4 -29 25 65
Cummins India 24.4 17.8 38 59 16 6.1 4.7 29 145 77
Havells India 20.7 17.9 15 35 17 5.8 4.3 36 132 59
Larsen & Toubro 27.0 20.6 31 76 34 3.8 4.2 -10 53 58
Siemens 67.6 45.2 50 340 194 7.0 8.4 -17 180 213
Thermax 28.9 18.9 53 88 23 4.5 4.6 -3 79 71
33
-11
-75
-40
-5
30
65
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
19
Cement: EV/EBITDA premium rises to 27% to average; demand recovery key
Cement EV/EBITDA valuations is at 27%
premium to its historical average.
Demand recovery holds key for pricing,
profitabilityandstockperformance.
Cement +26%
20.4
13.5
3
9
15
21
27
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Cement P/E (x) 10 Yr Avg (x)
2.3 2.4
0.5
1.8
3.0
4.3
5.5
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Cement P/B (x) 10 Yr Avg (x)
-9 -13
-50
-25
0
25
50
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
10.2
8.0
3.0
5.5
8.0
10.5
13.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Cement EV/EBDITA (x) 10 Yr Avg (x)
ACC 22.8 15.3 49 48 -1 3.2 2.9 11 29 9
Ambuja Cem. 19.6 15.2 29 28 -1 2.9 3.0 0 18 10
Birla Corpn. 9.7 7.2 34 -37 -53 1.0 1.6 -38 -59 -39
GrasimInds 11.4 7.9 44 -26 -48 1.2 1.4 -16 -52 -47
India Cements 21.9 14.8 48 43 -4 0.8 1.2 -37 -69 -54
JP Associates 35.1 34.1 3 128 122 1.1 1.8 -37 -54 -32
Shree Cement 19.8 13.9 43 29 -10 4.3 3.4 28 73 25
UltraTech Cem. 24.1 13.8 74 57 -10 3.3 2.9 13 32 9
94
61
-10
28
66
104
142
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
20
Consumer: Trades at 30x, down from peak of 34x; however still above avg
Consumer sector PE multiples have
declinedfromapeakof 34xinMay-13to
30x in May-14; however it continues to
tradeaboveitshistorical averageof 24x.
We expect the sector earnings to
moderate in FY15 given the challenging
terrain of low volume growth and
continued moderation in overall
consumptionspending.
Everycompany(except RadicoKhaitan) is
at a big premium; Glaxo at 49%, Pidilite
at 43%, AsianPaintsat 36%.
Consumer +5%
29.7 24.2
10
17
24
31
38
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Consumer P/E (x) 10 Yr Avg (x)
10.4
8.3
4.0
6.0
8.0
10.0
12.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Consumer P/B (x) 10 Yr Avg (x)
318
219
80
170
260
350
440
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Asian Paints 31.8 23.3 36 107 52 10.3 8.3 23 313 212
Britannia Inds. 22.2 21.6 3 44 40 9.3 6.7 39 272 150
Colgate-Palm. 30.9 25.1 23 101 63 28.2 23.6 19 1031 782
Dabur India 28.4 24.1 18 85 57 9.8 8.9 10 293 232
GlaxoSmith C H L 29.9 20.0 49 95 30 9.1 5.7 59 265 114
Godrej Consumer 27.5 22.4 23 79 46 6.3 13.8 -54 154 416
Hind. Unilever 32.6 26.6 23 113 73 18.7 20.4 -9 648 663
ITC 25.9 22.0 18 68 43 10.6 6.7 58 325 151
Marico 28.1 22.5 25 83 46 7.0 7.7 -8 181 186
Nestle India 35.8 29.3 22 133 91 17.9 22.8 -21 617 750
Pidilite Inds. 27.1 18.9 43 77 23 6.3 4.7 34 153 76
Radico Khaitan 12.7 26.9 -53 -17 75 1.5 3.4 -58 -41 29
United Spirits 62.9 50.0 26 310 225 4.7 3.4 38 89 27
Relative to Sensex P/E(%) Relative to Sensex P/B (%) PE(x) PB (x)
21
Healthcare: Trades at averages; US generics to drive earnings
Healthcaresector istradingat PEof 21.7x
inlinewithitshistorical averages.
GSK, IPCA and Torrent trade at a
premium of +20% to its historical PE
averages.
After many quarters of robust growth,
operational performance for the
healthcare sector for 4QFY14 was below
estimates. Unfavorable product mix and
base effect are the reasons for a weak
operational performance.
Healthcare +4%
4.3
4.2
2.0
3.0
4.0
5.0
6.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Healthcare P/B (x) 10 Yr Avg (x)
74
61
-20
20
60
100
140
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
21.7
21.9
14
18
22
26
30
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Healthcare P/E (x) 10 Yr Avg (x)
42
46
0
30
60
90
120
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Biocon 18.9 16.1 17 23 5 2.6 2.3 9 3 -12
Cadila Health. 18.8 17.5 7 22 14 4.4 4.3 3 78 61
Cipla 19.4 21.3 -9 26 39 2.7 3.8 -29 6 40
Divi's Lab. 18.8 17.1 10 22 12 4.8 4.7 2 92 75
Dr Reddy's Labs 18.4 26.4 -30 20 72 3.7 3.3 13 48 22
Glaxosmit Pharma 34.1 26.5 29 122 73 10.2 7.8 31 308 191
Glenmark Pharma. 17.9 35.7 -50 17 132 3.9 4.7 -17 56 75
Ipca Labs. 14.9 12.3 21 -3 -20 3.8 2.6 44 52 -1
Lupin 20.5 17.6 16 34 15 4.7 4.1 14 87 53
Ranbaxy Labs. 35.7 43.2 -17 132 181 4.3 5.2 -17 74 94
Sanofi India 23.5 20.5 15 53 33 4.8 4.1 16 92 54
Sun Pharma.Inds. 24.3 20.5 19 58 33 5.1 4.4 16 104 63
Torrent Pharma. 15.7 12.7 23 2 -17 4.1 3.2 25 63 21
Relative to Sensex P/E(%) Relative to Sensex P/B (%) PE(x) PB (x)
37 37
-50
0
50
100
150
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
22
Media: Trades marginally below avg; economic recovery to drive ad growth
Media trades at a marginal discount of
2%toitshistorical averagePE.
For 4QFY14, advertising growth shows
mixedtrend. WhileZeeposted strongad
growth of 22% YoY led by sports
segment, Sun TV posted flat advertising
andbroadcast revenue.
Zeeis theonlystocktradingat premium
of 14%to itshistoricaverageand62%to
itsmarket PE.
PVRisat 29%discount toitshistorical PE
average, but at premium to its PB
average.
21.0
21.5
7
17
27
37
47
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Media P/E (x) 10 Yr Avg (x)
91 39
-60
0
60
120
180
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
4.8
3.7
1.2
2.7
4.2
5.7
7.2
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Media P/B (x) 10 Yr Avg (x)
H T Media 12.5 27.6 -55 -19 80 1.2 2.6 -54 -52 -3
Jagran Prakashan 14.5 19.4 -25 -6 26 3.4 4.0 -15 37 51
PVR 33.1 46.8 -29 115 205 5.1 2.4 112 104 -10
Sun TV Network 19.1 24.3 -21 24 58 4.7 5.8 -19 88 116
Zee Entertainmen 24.9 21.8 14 62 42 7.0 3.8 83 181 43
Media +5%
-31
-40
-80
-60
-40
-20
0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
23
Metals: At discount to PB average; however bounce back in margins drives PE
Metals trade at 1.1x PB which is 36%
discount to its historical PB average.
However, the sector is at 13%premium
toitsPEaveragereflectingexpectationof
reboundinearnings.
Indian steel producers posted strong
resultshelpedbygrowthinQoQvolumes
andbetter pricerealization.
EV/EBIDTA valuations is at 5.8x, which is
at itslongperiodaverage.
All stocks except JSWSteel tradeat huge
discount toPBaverages.
Metals +23%
10.6
9.4
0
5
10
15
20
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Metals P/E (x) 10 Yr Avg (x)
1.1
1.8
0.0
1.3
2.5
3.8
5.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Metals P/B (x) 10 Yr Avg (x)
-55
-36
-80
-55
-30
-5
20
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Hind.Zinc 9.0 7.1 27 -41 -54 1.5 1.9 -19 -40 -31
Hindalco Inds. 12.8 8.7 48 -16 -44 1.2 1.7 -30 -53 -37
Jindal Steel 10.3 10.0 2 -33 -35 1.1 3.2 -65 -55 19
JSW Steel 10.7 10.9 -2 -30 -29 1.2 1.2 -1 -53 -55
Natl. Aluminium 15.6 16.3 -4 2 6 1.0 1.7 -42 -60 -36
NMDC 9.6 15.0 -36 -38 -3 2.1 4.8 -57 -17 80
S A I L 12.0 10.6 14 -22 -31 0.8 1.6 -52 -69 -39
Sesa Sterlite 13.4 6.9 94 -13 -55 1.9 2.2 -17 -26 -17
Tata Steel 8.3 10.8 -23 -46 -30 1.6 2.3 -33 -38 -13
-26
-29
-45
-37
-29
-21
-13
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
24
Oil & Gas: Trades at historic average (PE); 23% return in CY14YTD
Oil &Gassector tradesat PBof 1.5xat 15%
discount to its historic average. PE
valuations stands at 11.3x, which is now
abovehistoricaverageof 11x.
Subsidy, forexgainsboostedOMCs4QFY14
PAT and with no diesel under-recoveries
just afewmonthsaway, all OMCsarenow
tradingat premiumtohistoricPEaverage.
ONGC, GAIL and Petronet LNGare trading
above their historic PEaverages. All others
tradeat discount.
Oil & Gas +23%
11.3
11.0
5
9
13
17
21
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Oil & Gas P/E (x) 10 Yr Avg (x)
1.5
1.7
1.0
1.5
2.0
2.5
3.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Oil & Gas P/B (x) 10 Yr Avg (x)
-41
-35
-55
-45
-35
-25
-15
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
B P C L 12.6 12.5 1 -18 -19 1.8 1.3 39 -30 -53
C P C L 3.6 6.1 -41 -77 -60 0.7 1.0 -35 -73 -62
Cairn India 6.3 13.8 -54 -59 -10 1.0 1.2 -19 -61 -55
GAIL(India) 12.0 11.4 5 -22 -26 1.6 2.1 -23 -37 -23
Guj.St.Petronet 8.6 14.1 -39 -44 -8 1.1 2.0 -46 -56 -25
H P C L 13.7 11.1 24 -10 -28 0.9 0.9 -4 -65 -66
I O C L 11.7 9.6 22 -24 -38 1.2 1.3 -6 -52 -53
Indraprastha Gas 11.3 11.4 -1 -26 -26 2.1 2.9 -27 -15 9
M R P L 10.8 12.6 -14 -30 -18 1.5 2.2 -32 -41 -19
O N G C 10.6 9.7 9 -31 -37 1.7 2.0 -17 -33 -25
Petronet LNG 14.5 10.8 34 -6 -30 2.0 2.6 -24 -19 -2
Reliance Inds. 12.6 12.5 1 -18 -19 1.4 1.7 -15 -44 -38
104
33
-100
0
100
200
300
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
25
Real Estate: Trades at 1.2x BV
Real estate trades at 51% discount to
market PB. The sector trades at 1.2xPB.
It is the best performing sector for the
monthof May.
Thoughlackof newlaunchesdentedpre-
sales, operations are near trough. Also,
with improvement in consumer
sentimentspre-salesshouldseeuptick.
DLF trades at 1.3x PB which is at 42%
discount toaverage, whilePhoenixtrades
at 2.3x PB, 27%discount to its historical
averageand9%discount tomarket PB.
31.4
21.0
0
13
26
39
52
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Real Estate P/E (x) 10 Yr Avg (x)
1.2 1.4
0.0
2.0
4.0
6.0
8.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Real Estate P/B (x) 10 Yr Avg (x)
-51
-52
-100
-50
0
50
100
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Real Estate +32%
DLF 55.7 37.6 48 262 144 1.3 2.3 -42 -47 -16
Indbull.RealEst. 8.0 19.9 -60 -48 29 0.5 0.8 -37 -79 -70
Mahindra Life. 16.5 26.2 -37 7 71 1.3 1.8 -28 -49 -34
Sobha Developers 15.8 18.2 -13 3 18 1.8 2.2 -22 -30 -16
Phoenix Mills 28.0 43.1 -35 83 180 2.3 3.1 -27 -9 16
63
85
-50
25
100
175
250
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
26
Retail: Titan at 32% premium, RBI eases gold-on-lease norms
Retail sector tradesat 13%discount toits
historical PE average. However is at
premiumonPBbasisof 14%.
Titans 4QFY14 performance was above
expectations with Watches recovery
being the highlight of the quarter.
Subsequently, RBI has lifted the ban on
gold-on-lease, major relief inour view.
With improvement in consumer
sentiments, urban consumption will
increasedrivingthesector growth.
Retail +37%
25.0
28.8
0
17
34
51
68
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Retail P/E (x) 10 Yr Avg (x)
4.9
4.3
1.0
3.0
5.0
7.0
9.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Retail P/B (x) 10 Yr Avg (x)
96
60
-50
0
50
100
150
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Future Retail 9.2 23.0 -60 -40 50 0.8 1.5 -49 -69 -43
Titan Inds. 30.5 23.2 32 99 51 8.6 8.6 1 246 219
5
13
-40
-5
30
65
100
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
27
Technology: Valuations slips below avg; top underperformer in CY14YTD
Technology sector now trades at 16.1x,
which is at 6% discount to its historic
averages. The sector continues to
underperformfor 3rdconsecutivemonth.
InMar 2014, marginupgradeswereseen
across tier-I. Discretionary spending was
volatile. Deal pipeline continues to be
healthy for all the companies keeping
FY15growthoutlookintact.
All stocks are trading at discount to its
historic average, except HCL which is at
its historic average and TCSwhich is the
onlystockat premiumof 3%onPEbasis.
Infosys trades at 2%discount relative to
SensexPE.
Technology -7%
16.1
17.0
7
12
17
22
27
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Technology P/E (x) 10 Yr Avg (x)
4.1
5.1
2.0
4.0
6.0
8.0
10.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Technology P/B (x) 10 Yr Avg (x)
66
91
0
60
120
180
240
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
HCL Technologies 14.4 14.4 0 -6 -6 4.0 3.1 30 60 15
Infosys 15.0 19.4 -23 -2 26 3.1 5.6 -45 22 109
MphasiS 9.7 16.4 -41 -37 7 1.9 3.8 -49 -24 40
TCS 18.8 18.2 3 22 18 6.2 6.3 -1 149 134
Tech Mahindra 12.8 16.1 -21 -17 5 3.2 4.4 -26 30 62
Wipro 13.7 16.7 -18 -11 8 2.9 4.0 -26 18 50
44
48
-100
0
100
200
300
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
28
Telecom: Valuations moving up from its low
On EV/EBITDA basis, the sector trades at
6.4x moving up fromits all-time low of
5.9x and is at 26% discount to its
historical average. Telecom PE now
tradesat itshistorical averages.
Post passive consolidation and RPMs
improving, strong growth is expected in
thesector inFY15.
Telecom -1%
22.2
22.5
0
14
28
42
56
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
TelecomP/E (x) 10 Yr Avg (x)
1.9
2.5
0.5
2.0
3.5
5.0
6.5
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
TelecomP/B (x) 10 Yr Avg (x)
-25
-9
-50
-15
20
55
90
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
6.4
8.6
5.0
8.0
11.0
14.0
17.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
TelecomSector EV/EBDITA (x)
Bharti Airtel 25.2 25.8 -2 64 68 2.0 3.6 -45 -21 33
Idea Cellular 15.6 25.9 -40 2 68 2.3 2.4 -4 -7 -10
Rel. Comm. 24.5 23.8 3 59 55 1.0 1.6 -38 -61 -42
-15
-8
-100
-60
-20
20
60
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
29
Utilities: Valuations inches up; now trading at 18% discount on PBs
Utilities trade at 1.4x PB, which is 18%
discount to its historic average and 44%
discount to market. It is second best
performingsector duringMay.
4QFY14performancewasbelowestimate
across companies. However NTPC and
PGCILreportedbetter performance.
NTPCis at 30%discount on PBbasis; we
expect FY16profit growthtobeindouble
digits.
Coal India is the only stock tradingat its
average and is at premium to Sensex,
bothonPEandPBbasis.
13.0
14.4
0
8
16
24
32
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Utilities P/E (x) 10 Yr Avg (x)
1.4
1.7
0.0
1.0
2.0
3.0
4.0
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Utilities P/B (x) 10 Yr Avg (x)
-44
-36
-100
-65
-30
5
40
M
a
y
-
0
4
M
a
y
-
0
5
M
a
y
-
0
6
M
a
y
-
0
7
M
a
y
-
0
8
M
a
y
-
0
9
M
a
y
-
1
0
M
a
y
-
1
1
M
a
y
-
1
2
M
a
y
-
1
3
M
a
y
-
1
4
Utilities +27%
Coal India 12.8 12.3 4 -17 -20 4.6 4.6 0 84 72
CESC 10.0 9.1 10 -35 -41 1.1 1.1 -3 -56 -58
NTPC 13.2 16.3 -19 -14 6 1.4 2.1 -30 -43 -23
Power Grid Corpn 12.5 14.5 -14 -19 -6 1.7 2.0 -15 -33 -27
PTC India 8.9 17.4 -49 -42 13 1.0 1.5 -36 -61 -43
Reliance Infra. 12.5 17.5 -29 -19 14 0.8 1.4 -41 -68 -49
Tata Power Co. 15.8 18.8 -16 3 22 1.8 2.1 -12 -27 -23
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Motilal Oswal Capital Markets Singapore Pte Limited is actingas an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with
regulation17(1)(d) of theFinancial AdvisorsRegulationsandisasubsidiaryof Motilal Oswal SecuritiesLimitedinIndia. ThisresearchisdistributedinSingaporeby
Motilal Oswal Capital Markets SingaporePte Limitedand it is onlydirected inSingaporeto accreditedinvestors, as defined inthe Financial Advisers Regulations
andtheSecuritiesandFuturesAct (Chapter 289), asamendedfromtimetotime.
Inrespect of anymatter arisingfromor inconnectionwiththeresearchyoucouldcontact thefollowingrepresentativesof Motilal Oswal Capital MarketsSingapore
PteLimited:
AnoshKoppikar Kadambari Balachandran
Email : [email protected] Email : [email protected]
Contact: (+65) 68189232 Contact: (+65) 68189233/ 65249115
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ForU.S.
Motilal Oswal SecuritiesLimited(MOSL) isnot aregisteredbroker - dealer under theU.S. SecuritiesExchangeAct of 1934, asamended(the"1934act") andunder
applicablestatelawsintheUnitedStates. InadditionMOSLisnot aregisteredinvestment adviser under theU.S. Investment AdvisersAct of 1940, asamended(the
"AdvisersAct" andtogether withthe1934Act, the"Acts), andunder applicablestatelawsintheUnitedStates. Accordingly, intheabsenceof specificexemption
under theActs, anybrokerageandinvestment servicesprovidedbyMOSL, includingtheproductsandservicesdescribedhereinarenot availabletoor intendedfor
U.S. persons.
Thisreport isintendedfor distributiononlyto"Major Institutional Investors" asdefinedbyRule15a-6(b)(4) of theExchangeAct andinterpretationsthereof bySEC
(henceforthreferredto as"major institutional investors"). Thisdocument must not beactedonor reliedonbypersonswhoarenot major institutional investors.
Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major
institutional investors. In reliance on the exemption fromregistration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
"ExchangeAct") andinterpretationsthereof bytheU.S. SecuritiesandExchangeCommission("SEC") inorder toconduct businesswithInstitutional Investorsbased
in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited.
("MOSIPL"). Anybusinessinteractionpursuant tothisreport will havetobeexecutedwithintheprovisionsof thischaperoningagreement.
The Research Analysts contributingto the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated
personsof theU.S. registeredbroker-dealer, MOSIPL, andtherefore, maynot besubject toNASDrule2711andNYSERule472restrictionsoncommunicationwith
asubject company, publicappearancesandtradingsecuritiesheldbyaresearchanalyst account.
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June 2014

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