Dalal Street Investment Journal - August 07 2018 PDF

CONTENTS Vol. 33 No.
18 • AUG 06 - 19, 2018
Recommendations
10 Choice Scrip
12 Low Priced Scrip
14 Hot Chips
Regulars
06 Editor’s Keyboard
07 Company Index
08 Market View
16 Technicals
62 Query Board
64 Reviews
65 Kerbside
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the complete databank
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3500 companies on our
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company & carried on “as is” basis.
4 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

Markets At All-Time Highs –
But No Reason To Worry !
W
e said it in the issue no 10, volume 33, dated April 16-29 2018, even when everyone
else was bearish on the markets that Sensex will reach 38000 by year end. Now, here
we are at a kissing distance of the magic figure with almost five months to go for the
markets to conclude the year. The journey has been comparatively more volatile for
Sensex this year when compared with Sensex movement in 2017. The story of the
broader markets has been a total contrast. Almost 80 per cent of the stocks that trade on the bourses
have underperformed the key benchmark index, thus making it difficult for majority of the investors to
generate positive returns.
The current bull run is not broad-based and only the select large-caps are showing outperformance.
Also, note that the delivery volume is at five-month low in the month of July, suggesting lower
participation from investors.
It is only logical to remain cautious about the markets

with so many visible headwinds ahead for the markets.
However, it is not advisable to exit equities and remain
in cash at this juncture. We believe markets can scale
new heights owing to consistent improvement in
earnings QoQ over the next few years, improvement in
GDP growth rate by 0.4 to 0.5 per cent every year in the
next 3 to 5 years and stable macroeconomic
environment.
The way to invest in this market is to avoid short term

focus and select quality stocks that are either reporting
quality earnings or are expected to do so in future. It is
tempting to say that mid-caps and small-caps are bottoming out, however one should always be more
cautious when it comes to investing in these stocks.
The current issue is a special CFO edition where we have provided an opportunity for investors to get to
know directly from the strategists themselves about the company’s future plans and goals. I am sure the
long-term investors would benefit from the specific comments made by the finance captains of
Corporate India on various issues facing Indian economy and various sectors. It is interesting to see that
majority of the CFOs do not see the trade war as a major factor that may dampen the investment
sentiment at the corporate level. To find many more such interesting aspects from the insiders, please go
though our special edition on CFOs in India. Do give us your feedback on the special edition and
whether you agree with the views of the CFOs on a variety of topics.
We are expecting some good set of results from NBFCs this season. We have hinted where the investors
should focus in the NBFC space in our cover story. For sure, NBFCs should occupy good amount of
space in your long-term equity portfolio.
Going forward, focus on bottom-up investing opportunities. Before you make investment, study if the
balance sheet is intact and that it is not stretched, cash flows are consistently positive and analyse if the
business in which you are investing will survive for the next 10 years. Markets are expected to remain
robust owing to liquidity and improvement in quality of earnings. Markets at all-time highs should not
worry you. If markets at all-time highs were bad for equity prices, they would have never moved up
from previous all-time highs. So don’t be scared of investing at all-time highs!!
Invest smartly, invest regularly.
V B PADODE
Editor-in-Chief

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Vol. 33. No. 18 • AUG 06 - 19, 2018
Mid-caps Carnage
Founder & Editor-In-Chief
V B Padode
Editors
Compliances and Internal Audit
Arvind Manor I am really appreciative of the DSIJ team for very appropriately taking up
Cover Story “Underperforming Stocks: What Should You Do with
them?” It has been very correctly brought out that holding the
Prakash Patil - Chief Copy Editor Marketing & Sales
Farid Khan - AVP underperformers is a cascading risk which can wipe out the invested
Gayathri Udyawar - Copy Editor capital altogether. As indicated by the learned authors and very relevantly,
Deputy Editors Mumbai:
Anand Chinchole - Manager investors find it a tough decision to sell a stock at a loss under the
Yogesh Supekar, Shashikant Singh
Delhi: sentiment and belief of an eventual pick-up.
Research
Neerja Agarwal - VP Lokesh Sharma - Sr. Manager
Karan Bhojwani - Sr. Manager Kolkata : One issue on which I would like to see coverage relates to the buyback
Bhagyashree V - Sr. Analyst-CRU Soutrik Ghosh - Sr. Manager and subsequent announcement of bonus issue by Infosys. The company
Apurva Joshi - Analyst Chennai: undertook buyback in Dec 2017, which reduced the equity and has now
Tanay Loya - Sr. Associate P V Bhaskar - Sr. Manager announced a 1:1 bonus to celebrate 25 years of listing, which may not be
Graphics
Domain Experts
value accretive and would reduce the EPS. The matter appears perplexing
Vipin Bendale as the object of buyback and thereby improving earnings gets nullified by
Hemant Rustagi
Subscription & Customer Service Jayesh Dadia bloating equity through bonus shares. Can the attention of SEBI be
Utkarsh Sawale, Mayank Dubey invited to put time limits/ restriction on such acts in a span of even less
than a year? - Ajay Gupta
Editor Responds: Thank you for your great feedback on our previous issue.
DSIJ Private Limited As far as corporate actions go, we would be studying your observations on
Infosys and shall cover the topic in one of our coming issues. Yes, investors
Managing Director can highlight pertinent issues to SEBI by sending them a query. You can
Rajesh V Padode surely do so in your capacity as an investor. Keep writing to us and hope you
For Customer Service would also enjoy the current issue.
020-49072626 OR [email protected]
Mumbai Office
419-A, 4th Floor, Arun Chambers, Tardeo, Next to AC Market Recommendations
Mumbai - 400034 022-43476012/16/17 Company/Scheme Reco. Price (`) Column Page No
Pune Office
Adlabs Entertainment zExit 34.85 QueryBoard 63
C-305, 3rd Floor, Trade Center, North Main Road, Near Axis Bank,
Opposite Lane no. 6, Koregaon Park, Pune - 411001 BBTC LTD zBuy 1567.15 Technicals 18
020-49072600
Bharat Forge zBuy 641.00 Kerbside 65
Chennai 9445546165
Capri Global Capital zBuy 82.25 Low Priced Scrip 12
Kolkata 7003118028 Cholamandalam Investment zHold 1432.40 QueryBoard 62
Delhi 8076878278
Deep industries zExit 106.80 QueryBoard 62
Delta Corp zBuy 256.25 Hot Chips 14
To advertise, mail us on [email protected] Havells zBuy 634.25 Kerbside 65
Printer and Publisher: Nitin Sawant, Editor: V B Padode for DSIJ Pvt Ltd. IDFC Bank zHold 40.00 QueryBoard 63
on behalf of Achievements Merchandise Pvt Ltd. Printed at Kala Jyothi
Process Pvt. Ltd. Plot No.: W-17&18, M.I.D.C. Industrial Area, Taloja, IFB Industries zHold 1095.25 Reviews 64
Dist. Raigad, Navi Mmbai. - 410 206. and published from 419-A, 4th
Floor, Arun Chambers, Tardeo, Next to AC Market, Mumbai - 400034 INDIAN BANK zBuy 358.20 Technicals 18
All rights reserved. While all efforts are made to ensure that the
information published is correct and up-to-date, Dalal Street Investment Lemon Tree Hotels zBuy 78.25 Kerbside 65
Journal holds no responsibility for any errors that might occur. All
material contained herein is based on fundamental and technical analysis MCX zBuy 881.70 Kerbside 65
and other in-house methods, which though reliable, are not infallible. The PVR Ltd. zHold 1127.40 Analysis 20
information given in the magazine is of an advisory nature. Readers are
advised to consult experts before taking any investment decision and Dalal Sanwaria Consumer zHold 12.75 Reviews 64
Street Journal holds no responsibility for any losses that may arise due to
investment decisions made on the basis of information given within the Sun Pharma zBuy 566.65 Hot Chips 14
magazine. No reproduction is permitted in whole or part without written
consent from Dalal Street Journal All disputes are subject to the Take Solutions zBuy 208.00 Choice Scrip 10
exclusive jurisdiction of competent courts and forums in Mumbai only.
Dalal Street Investment Journal is a member of INS/ABCs. BP - Book Profit • BPP - Book Partial Profits • BL - Book Loss
DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 7

Market Watch Blue chip index stocks are
fuelling the market rally,
Q1FY18 Results Give Direction To The Market whereas companies with
lacklustre, flat and
I
t was time to cut the celebration broader markets participated in the rally, disappointing earnings are
cake at the BSE as the Sensex soared with the BSE Mid-cap and Small-cap
past the 37,000 mark, gaining indices registering 3.12% and 1.57% gains, being dumped by investors.
positive momentum from good respectively, during the fortnight. Among Despite the rally, the market is
quarterly earnings. The fortnight the sectoral indices, the FMCG and Banks
had it all, all-time highs, record closings, outshined the market, while Auto was the reevaluating a large number of
and the usual swings with Sensex and only sector that dipped as Q1 results of stocks that were earlier peaking
Nifty testing new highs. The PSU banks auto majors Maruti, Hero Motocorp and
as well as private banks fuelled the Bajaj Auto disappointed on the margin on the back of mere sentiments.
market’s upward trajectory as they front. In the two-week period, the BSE
reported better asset quality for the Bankex gained 3.20%, FMCG was up by global markets, put pressure on
quarter. The markets also took support 3.55%, while Auto dipped by 1.21%. Power domestic gold prices. The crude oil
from macro developments, including index grew by 2.11%, followed by IT prices still lingered around the US$75
easing of trade war between the US and which was up 0.91%, Realty up by 0.35% per barrel mark, even as the Trump
the European Union. Also, the fact that and Metal up 0.35%. administration continued to threaten
the US economy posted a GDP growth of Iran with sanctions.
4.1% in Q2 eased some fears of recession. In a reversal of the trend, albeit
marginally, the FIIs have turned net With the earnings season turning out
The global markets were upbeat during buyers during the fortnight. The FIIs have be a success, investors are indulging
the fortnight with only Nasdaq down by bought equities to the tune of Rs 45.52 in cherry-picking to update and
1.13% on the back of disappointing crore; whereas the domestic institutional rebalance their portfolios. The Reserve
earnings by tech gaints Facebook and investors (DIIs) have bought equities of Bank of India at its August policy
Twitter. In the last two weeks, Dow Jones Rs 598.38 crore, during the fortnight. meet maintained the GDP growth
gained by 1.71%, while S&P 500 was up forecast for FY19 at 7.4% and increased
by 0.63%. In Europe, UK’s FTSE 100 As concerns over the trade war between the repo rate by 25 bps to 6.5 per cent.
gained 0.51%, whereas the German index the US and the EU eased, gold turned Going ahead, banking and auto
DAX posted a surge of 2.55% and the bearish. A dip in demand from local stocks are expected to give direction to
French CAC40 registered a growth of jewellers, coupled with weakness in the the markets. DS
13th July 27th July Gain/Loss

Indices
2018 2018 (%)
Dow Jones Ind 25,022.00 25,451.06 1.71
S&P 500 2,801.31 2,818.82 0.63
NASDAQ 7,825.98 7,737.42 -1.13
FTSE 100 7,661.87 7,701.31 0.51
DAX 12,540.73 12,860.40 2.55
CAC 40 5,429.20 5511.76 1.52
Hang Seng 28,524.44 28,804.28 0.98
Nikkei 22,597.35 22,712.75 0.51
Shanghai 2,831.13 2,873.59 1.50
1.52%. During the fortnight, the Asian Performance Of Indices Net Investment In Equity Markets (`/Cr)
markets Hang Seng, Nikkei and Shanghai 13th July 27th July Gain/Loss Date FIIs DIIs
exchange, gained by 0.98%, 0.51% and Indices
2018 2018 (%) 27-Jul-18 738.05 406.12
1.50%, respectively. SENSEX 36,501.61 37,336.85 2.29 26-Jul-18 2,453.57 -2,716.04
Nifty 11,018.90 11,278.35 2.35 25-Jul-18 -1,195.75 97.64
Far ahead of its global peers, the Indian Mid-Cap 15,431.47 15,912.62 3.12 24-Jul-18 104.34 513.78
benchmark indices registered impressive Small-Cap 16,196.33 16,450.20 1.57 23-Jul-18 259.37 124.82
gains of above 2% during the fortnight Auto 24,567.12 24,269.32 -1.21 20-Jul-18 310.27 -50.73
studded by new all-time highs. As the bulls Bankex 29,788.45 30,743.13 3.20 19-Jul-18 -315.69 470.02
took over the Indian equity markets, FMCG 11,485.10 11,892.60 3.55 18-Jul-18 95.68 111.01
Sensex and Nifty scaled new highs gaining IT 14,385.70 14,516.97 0.91 17-Jul-18 -673.99 840.06
2.29% and 2.35%, respectively. Sensex Metal 12,470.90 12,511.06 0.32 16-Jul-18 -625.68 -70.3
breached the 37,500 mark, while Nifty was Power 1,910.79 1,951.17 2.11 13-Jul-18 -1,104.65 872
trading above the 11,300 mark. Even the Realty 2,061.04 2,068.32 0.35 Total 45.52 598.38

Trackpad
Bajaj Auto Reports Stellar July Sales Numbers
T
wo and three-wheeler giant, Bajaj Auto Limited reported its best
July sales growth since 2010.
The company sold 4 lakh units during the month, registering a growth of
30 per cent over the same period last year.
The company in its filing to the exchanges also said that the Domestic
sales during the month grew by 27 per cent YoY to 2.37 lakh units and
exports increased 34 per cent to 1.63 lakh units.
The company’s motorcycle segment reported a 25 per cent growth in

sales to 3.32 lakh units whereas its three-wheeler division posted its
highest ever monthly sales of 67,663 units, registering a growth of 59 per
cent YoY.
RBI Surprises With 25 bps Repo Rate Hike

T
he central bank has increased the repo rate by 25 bps to 6.5
per cent in its third bi-monthly RBI policy review meeting
for 2018-19. However, RBI has maintained a neutral stance
on the economy.
This is the first time the RBI has raised the benchmark interest rate
by 25 basis points in two consecutive policy meets. RBI also hiked
reverse repo rate by 25 bps to 6.25 per cent.
RBI’s monetary policy committee (MPC) cited impressive

corporate earnings, increase in investment activity as a basis for
this raise.The central bank has forecast GDP growth for the
current fiscal at 7.4 per cent and expected it at 7.5 to 7.6 per cent
for the second half of the fiscal.
BSE Investments Limited Acquires 24% Stake In

CDSL Commodity Repository Limited
B
SE Investments Limited (BSEIL), a 100% subsidiary of BSE acquired 24 per cent stake in
CDSL Commodity Repository Limited (CCRL). Regulated by the Warehouse Development
and Regulatory Authority (WDRA), CCRL will record the storage and transfers of
commodities including warehouse receipt transfers, although deliveries are in physical form. It is
similar to the way depositories function for equities and other financial securities. A trade
repository is another important step forward in improving regulatory transparency in the
commodity derivatives markets in India.
CCRL will enable electronic accounting of commodities, thereby ensuring ease of use, higher
accuracy and lower costs for document transmission. The commodity repository will also provide
the legal and regulatory environment for inventory financing and warehouse receipt lending.
Shri Ashishkumar Chauhan, MD & CEO, BSE said, “We are delighted to partner with CCRL to
provide a repository for commodities that will support regulatory reporting requirements for
development of the commodities derivatives in India. We believe this partnership will further
strengthen our quest of developing and strengthening Commodity markets in India”.

Recommendations Equity
currently available at reasonable
Take Solutions valuation of 19.3x P/E on TTM earnings.
In terms of return ratios, the company’s
TAKE THIS SOLUTION TO MAKE PROFIT!

ROE and RoCE stands at 14.3 per cent
and 15 per cent, respectively.
On an annual basis, the operating

revenue of Take Solutions surged almost
18 per cent to `1587.2 crore in FY18
HERE IS WHY from `1344.5 crore in FY17. In dollar
Operates in niche segment terms, its revenue rose almost 23 per cent
YoY in FY18. The operating profit
Strong order book (EBITDA) also rose 17 per cent YoY to
Robust industry outlook `306.4 crore. The EBITDA margin for
FY18 stood at 19.3 per cent. The net
profit for the full year increased 9.4 per
T
ake Solutions operates in a cent YoY to `159.8 crore in FY18.
niche technology-led
segment and offer services to The company’s order book for life
the life sciences industry sciences, as on FY18, stood at USD 179.5
which accounts for almost million, which is likely to be executed in
91 per cent of the total revenue. The 7-9 months, which provides strong
company provides IP-based solutions in revenue visibility for the near term.
clinical, regulatory, safety and consulting Notably, the company’s management
processes to global life science Best of LAST ONE Year expects life sciences business to grow at
companies across multiple therapeutic Name of Reco Exit/CMP Absolute Annual 30 per cent for FY19. Overall, the
areas. Company Price Price (`) Gains Returns management has indicated that the
(`) (%) (%) company is likely to witness growth of
Balkrishna Ind. 1079.8 1317.85 22.05 417.79
The company also operates in the supply almost 22-24 per cent. Furthermore, in
chain management segment, where it Tata Metaliks 667.8 826.2 37.93 89.89 biosimilars, the company is witnessing
focuses on high-margin niches in Colgate-Palmolive (I) 1051.65 1231 17.5 77.78 traction in orders in monoclonal
engineering services, and supply chain PFC 122.6 147.6 20.39 64.96 antibodies space, which is used to treat
collaboration. The company’s IP-led Symphony Ltd. 1429.8 1672 16.94 64.19 rare indications like rheumatoid arthritis,
approach enables its clients to automate spot psoriasis and some rare indications
supply chain processes, track, trace and quarter of FY18, the operating revenue of cancer. The company’s addressable
control at item level, mandate supplier rose 11.3 per cent on a QoQ basis to market Clinical Research Organisation
compliance, and streamline material and `453.9 crore. In dollar terms, the revenue (CRO) is expected to grow from USD 32
shipment movement, and thus optimise during the same period rose 11.7 per billion in the year 2016 to USD 44 billion
their processes. The company has its cent. The operating profit (EBITDA) in the year 2021 (representing 7 per cent
presence in North America, Europe, during the period increased almost 13.4 CAGR) driven by R&D spend and
Asia, and South America, etc. The per cent to `90.5 crore from `79.8 crore increasing level of clinical development
company’s majority of the revenue come in the previous quarter. In terms of outsourcing. Above all, the strengthening
from the United States (~80 per cent), bottomline, the company witnessed of USD as against INR gives further
followed by APAC (13 per cent) and growth of almost 10 per cent QoQ to boost to the company as majority of its
Europe (7 per cent). `45 crore. revenue comes from the US. Owing to all
these, we urge our reader-investors to
On financial front, looking at the last On the valuation front, the company is BUY the stock. DS
CMP
Monthly Stock Market Returns Shareholding Pattern Last Five Quarters (`/Cr)
(`) Particulars Mar '18 Dec '17 Sep '17 Jun '17 Mar '17
BSE Code: 532890 June 2018
CMP: `208 FV: `1 Total Income 453.92 408.02 370.93 354.37 355.51
BSE Volume: 29865 Promoters 66.80
Date: 30/07/2018 Other Income 2.87 1.37 1.10 1.08 0.50
Public 33.20 Operating Profit 93.38 81.18 71.06 67.27 69.54
Interest 5.51 5.03 5.52 4.70 5.33
Others 0
Net Profit 45.49 41.96 36.69 35.72 41.81
Total 100 Equity 14.59 13.12 13.11 13.10 13.10

Capri Global Capital profitability from its existing operations
NURTURING MSMES FOR FAST-PACED GROWTH

in this segment.
On the financial front, the company

posted a 66.76 per cent increase in its net
sales to `101.84 crore in the fourth
quarter of FY18 as against `61.07 crore
HERE IS WHY in the same quarter of the previous fiscal.
Rural growth driving demand The PBDT of the company increased by

Robust financials 69.33 per cent to `38.59 crore in the
fourth quarter of FY18 as against
Higher consumption by nuclear families `22.79 crore in the same quarter of the
previous fiscal. The net profit of the
C
apri Global Capital Limited company also increased by over
(CGCL) is a RBI registered 114 per cent to `25.5 crore in the
non-deposit taking, fourth quarter of FY18 as compared to
non-banking finance `11.91 crore in the same quarter of the
company (NBFC). It PRICED SCRIP previous fiscal.
focuses on the financing of micro, small
and medium enterprises (MSME), Best of LAST ONE Year
On the annual front, the net sales of the
construction finance and housing Name of Reco Exit/CMP Absolute Annual
company increased by 57.76 per cent to
finance segments. Product portfolio of Company Price Price (`) Gains Returns `336.45 crore in FY18 as against
MSME finance include business loan (`) (%) (%) `213.27 crore in FY17. The PBDT of the
against residential/ commercial/ National Fert. 61.30 78.00 27.24 350.22 company increased by 39.46 per cent to
industrial properties and financing for Gufic BioSci. 78.70 95.10 20.84 288.55 `138.61 crore in FY18 as against `99.39
purchase of commercial/ industrial Jamna Auto Ind. 77.15 96.75 25.41 254.10 crore in the previous fiscal. The net profit
properties. Virinchi Ltd. 88.00 110.00 25.00 225.00 of the company increased by over 62 per
Amines & Plasti. 68.00 81.00 19.12 167.88 cent to `94 crore in FY18 as compared to
In the MSME finance segment in FY18, `57.79 crore in the previous year.
CGCL increased its presence to 66
locations from 38 in FY17, adding affordable housing like Telangana and On the valuation front, the company is
new branches in tier 2/3 cities. Its Rajasthan. trading at a PE ratio of 13.16x. The
MSME book size increased 28.46 per company’s return on equity (RoE) and
cent to `1,55,923.35 lakh on a YoY basis. Further, FY18 was the first full year of return on capital employed (RoCE)
In the coming years, CGCL plans to operation of the company’s housing stood at 8.61 per cent and 62.46 per cent,
reduce reliance on intermediaries and finance subsidiary. The loan book at the respectively. The company has a
focus on direct sourcing via its branch end of the year was `24,633 lakh with an debt-to-equity ratio of 1.25x.
network. average ticket size of `11 lakh and average
tenure of over 207 months. The stock is trading at 1.09 times its
Its construction finance segment book book value and is expected to give a
size stood at `1,05,404 lakh at the The housing finance business is expected good quarter. Further, considering the
end of the year, registering an increase to blossom on the back of incremental drive in consumption due to higher per
of 74.86 per cent from a year-ago business from smaller towns. CGCL capita income and growth in rural
period. The company plans to reach plans to consolidate its presence in North demand, we recommend our reader-
further into high potential states for and West India and drive higher investors to BUY the stock. DS
CMP
Monthly Stock Market Returns Last Five Quarters (`/Cr)
Shareholding Pattern
(`) Particulars Mar'18 Dec'17 Sep'17 Jun'17 Mar'17
BSE Code: 531595
June 2018
CMP: `82.25 FV: `2 Total Income 108.42 95.1 82.89 84.01 62.03
BSE Volume: 9,018 Promoters 74.94
Date: 30/07/2018 Other Income 13.88 6.81 3.57 0.04 6.48
Public 25.06 Operating Profit 73.59 66.42 57.48 54.92 38.18
Others 0 Interest 33.31 26.42 21.61 20.71 16.02

Net Profit 24.75 28.3 27.65 23.38 11.46
Total 100
Equity 35.03 35.03 35.03 35.03 35.03

DELTA CORP CMP - `256.25
BSE CODE Volume Face Value Target Stoploss

532848 635301 `1 `282 `229
T he owner of casinos (88.7% revenue)

and hotels (11.3%) in Goa is the only
listed company in this segment. The
company owns three casinos, viz; Deltin
Royle, Deltin JAQK, Deltin Carvel and two
Scrip’s Movement
hotels viz; Deltin Suites and Deltin Palms in

Goa. The fundamentals show that the
company’s TTM topline and bottomline have
grown considerably by 46.7% and 138.4%,
respectively. Even the conventionally 2018
lacklustre Q1 was surprisingly good as

Last Seven Days’ Volume Table
revenue rose 46% YoY driven by exuberant
rise of 53% YoY in casino gaming. Casino (No. of Shares)
revenue grew with revival in footfalls and Days Volume
spillover from other casinos shutting down 23-Jul-18 5,33,000
and pricing. The EBITDA margin too stood 24-Jul-18 10,38,500
flat instead of de-growing, despite huge hike 25-Jul-18 4,29,070
in licence fee. The online gaming section's 26-Jul-18 2,72,074
margin contracted due to higher promo- 27-Jul-18 3,14,793
tional expenses along with one-time expense 30-Jul-18 5,20,938
on Fantasy sports, but going forward, it is 31-Jul-18 6,35,301
expected to fetch better returns with rise in be shifted to an entertainment zone near
The scrips in this number of active users. Further, with a new soon-to-be-built airport. We
column have been government’s initiative, Delta’s casinos would recommend a BUY.
recommended CMP - `566.65
SUN PHARMA
with a 15-day investment
horizon in mind and BSE CODE Volume Face Value Target Stoploss
524715 297926 `1 `609 `525
carry high risk. Therefore,
investors are advised to
take into account their risk
appetite before investing,
Scrip’s Movement
D ilip Sanghvi-promoted pharma company

Sun Pharma holds highest weightage in
pharma index, being the largest pharma
company in India. The company is engaged in
global consumer healthcare business and
as fundamentals may manufacture of active pharmaceutical ingredients.
or may not back the The company generates revenue from exports,
recommendations. namely, US-46% and emerging markets-16.2%,
while domestic sales contribute 26.6%. Consider-
ing the financials, its consolidated Q1FY18 topline
2018
and bottomline posted a growth of nearly 5% and
282%, respectively. Though the company’s TTM
PAT show a de-growth on a consolidated basis, its
standalone PAT showed loss recovery. The Halol
Last Seven Days’ Volume Table plant resolution followed by the first-ever USFDA
(No. of Shares) approval in the last five years from this plant
Days Volume assures business growth with base business
23-Jul-18 2,15,056 moving to 120 million USD from 80 million USD
24-Jul-18 1,53,696 per quarter starting Q2. Further, the company’s
25-Jul-18 1,59,830 base generic business loss is likely to get counter-
26-Jul-18 1,76,172 balanced with innovative launches in the pipeline
27-Jul-18 1,59,573 viz; Odomzo, Siscera, Tiltra and Illya. With
30-Jul-18 2,03,852 expected 10% and 4% CAGR in Indian pharma
31-Jul-18 2,97,926 and global pharma market, we recommend
(Closing price as of July 31, 2018) a BUY. DS

Technicals Equity
NIFTY Index Chart Analysis
Q1 earnings act as catalyst as benchmarks peak and broader indices bottom out
I
ndian benchmark indices breached Roadmap for the next 15 trading sessions
their major resistances and are Ideas Nifty Levels Action to be Initiated Probable Targets
hitting all-time high levels. Sensex Close above 11375 on the daily chart on closing
had hit its first all-time high after Resistance for the medium term 11375 11117-11171
basis would give further momentum to the bulls.
January on July 12, while Nifty did it for Close below 11260 on the weekly chart would
the first time on July 26. Currently, the Support for the medium term 11260 11200-11145
change the trend and trigger a retreat.
indices are trading at their peaks, making
higher highs on a daily basis. The broader of USD 72.45/barrel and thereby the range target at 11235-11250 level. In case
markets too witnessed bottom fishing and Indian rupee went off its all-time low, Nifty continues with the upside rally
have succeeded in breaking their prior which further buoyed the markets. even above 11375, we hold 11450 as the
major resistances, depicting trend reversal However, the markets did not react much immediate resistance. Above this, the
in Mid-cap and Small-cap indices. to the bounce-back in the oil prices level of 11550, followed by 11750, will act
above USD 75/barrel. as the major resistance, which is 80% of
The FIIs have turned net buyers for the the symmetric triangle pattern target in
first time after March 2018, reporting net Further, the RBI is expected to keep the the medium term.
equity investment of `2408.5 crore in the rates unchanged in its upcoming policy, Nifty has been making higher highs in
month of July. The DIIs continued to buy, despite higher CPI and WPI amid high daily trading sessions, except for a
but their buying remained modest in July fuel prices. We are at the doorstep of the one-day breather in-between.
2018 at `4503 crore, its lowest since release of macros and the core
February 2018. infrastructure output and PMI numbers However, the upside in the prices is
are likely to direct the markets followed accompanied with relatively falling
The revival in the domestic by auto sales numbers for July. volumes and the 14-period RSI hitting
macroeconomic numbers, followed by above 75. In case Nifty turns back from
robust corporate earnings for Q1FY19, Technically speaking, our benchmark the current levels, we hold 11260-11200
have acted as the catalysts for this index Nifty broke its major resistance at as the immediate supports, followed by
northward movement. Further, the Brent 11080, where it also breached its range of 11145-11095. The level of 10925 will act
oil had slipped below its crucial support 10925-11080. Nifty also surpassed its as the trend reversal in this case.

Technicals Equity
STOCK RECOMMENDATIONS
BBTC LTD ............................ BUY ............................ CMP `1567.15

BSE Code : 501425 Target 1 .. `1657 | Target 2 ..... `1714 | Stoploss....`1460(CLS)
The stock of BBTC is currently trading at `1567.15. Its
52-week high and low stand at `1820/`847 made on
January 10, 2018 and August 4, 2017, respectively.
Considering the weekly time frame, the stock fell nearly
40% up to `1082 on March-end and hit a bullish
piercing pattern, which indicated a bounce-back.
Accordingly, the stock rose above 61.8% retracement till
`1654-1657 levels. It also gave correction in-between
38.2% and 50% retracement of the bounce, where it
witnessed a double bottom at `1382 level, which was just
above its 200-day EMA support level. Considering the
daily time frame, the stock is currently trailing at
`1575-1545 resistance zone. Moreover, it has given a
kind of symmetric triangle pattern breakout at `1512 on
a closing basis. The volumes are justifiable and the
14-period RSI is quoting at 59, which suggests
momentum going forward. The stock is trading above its
Bollinger band average and is heading the upper band,
which is placed at `1581. We recommend a BUY.
INDIAN BANK .......................... BUY ........................ CMP `358.20

BSE Code : 532814 Target 1 ..... `385 | Target 2 ..... `398 | Stoploss....`329 (CLS)
The stock of Indian Bank is currently trading at
`358.20. Its 52-week high/low stand at `428/`254,
which were made as on November 17, 2017 and
September 28, 2017, respectively. Considering the
monthly time frame, the stock had given a sharp rise
of 67% in October and November 2017, and a sharp
fall of 37% from November to March 2018. The stock
has bounced back and is trailing at 61.8% of the fall
since last two months. Considering the weekly time
frame, the stock has been taking support at multiple
point upward trendline since November 2016. It
recently took a support at `305 level in the July 27
week and bounced back sharply. With this bounce, the
stock also gave rounding base and a downward sloping
trendline breakout at `353 on a closing basis.
Considering the daily time frame, the stock has given
a kind of cup and handle pattern breakout at `364 and
is trailing near the levels. The volumes are reasonable
and the 14-period RSI is quoting at 59, suggesting
DS
momentum. We recommend a BUY.
*LEGEND: EMA - Exponential Moving Average. MACD - Moving Average Convergence Divergence RMI - Relative Momentum Index
ROC - Rate of Change RSI - Relative Strength Index (Closing price as of July 31, 2018)
Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.

Analysis Equity
PVR Ltd.
SHOWCASING BLOCKBUSTER PERFORMANCE

S
ince its inception in the year 1997, State Cinemas Screens various other premium services such as
PVR has transformed itself into Punjab 7 39 Gold Class, Director’s Cut, IMAX, 4DX,
India’s largest and premium film Chandigarh 3 15 P[XL] and Playhouse which at present
exhibition company. PVR Ltd, Haryana 8 29 contribute around 9 per cent of total
the integrated film and retail brand, has Delhi 15 50 premium screen formats. Going forward,
PVR Cinemas as its major subsidiary. Rajasthan 2 7 the company is looking to substantial
Post-acquisition of Cinemax in 2012 and Gujarat 13 60 expansion in this space and aims to take
DT Cinemas in 2016, the company Madhya Pradesh 3 11 premium screen share from current 9
serves 76 million consumers annually. In Maharashtra 37 157 per cent to 20 per cent over the next
June 2018, the company opened 5 Karnataka 11 85 three years.
multiplexes, taking its total multiplex Kerala 2 13
network to 630 screens at 135 properties Uttarakhand 1 5 Likewise, the company has also started
in 52 cities (19 states and 1 Union Uttar Pradesh 12 58 innovative initiative Vkaao, where
territory), thereby emerging as the Jharkhand 2 7 patrons can watch cinemas of their
largest multiplex operator in India. Assam 1 2 choice on demand and at a theatre of
West Bengal 3 13 their choice with a minimum booking
PVR also operates as distributor of Chhattisgarh 4 17 for 50 seats. Patrons can choose movies
non-studio/independent international Telangana 6 36 from PVR Pictures library of 500 titles
films in India through its subsidiary PVR Andhra Pradesh 1 4 which the company eventually targets to
Pictures. Since 2002, the company has Tamil Nadu 3 17 take it to more than 1,000 titles. Another
released more than 350 Hollywood, 175 Date as on Q4FY18. innovative initiative of PVR is that
Hindi, 75 regional films across genres during summer holidays, the company
under its banner. PVR Pictures has the crore as against `350 crore in the has started showing movies from the
highest box office share of independent previous fiscal. This capex is expected to kids’ genre. All these initiatives would
foreign language films in the India. be funded majorly through internal help the company drive footfalls during
Likewise, with its another subsidiary, accruals, which will help the company to leaner periods for movies.
PVR Leisure, the company offers in-mall avoid strain on its balance sheet.
entertainment, gaming, food, etc. However, it had passed resolution to Low screen penetration provides
raise `1000 crore through debt, which is headroom for multiplexes to grow
Screen expansion to showcase expected to be used for encashment of Increasing urbanisation is expected to
blockbuster performance opportunities in the future. result in 35 per cent population living in
With 630 screens, PVR is already the urban areas by 2020. Further, the average
largest film exhibition company in the PVR has not just pioneered the multiplex household income is expected to grow by
country. The company is determined to industry in India but has been 1.5x to reach USD 10,100 by 2020.
maintain its leadership position and to instrumental in driving innovation and
scale up its business, the company is providing premium movie watching Besides, with an increasing population
expanding its screens across the country experience. PVR’s premium formats and a majority of this population (61
and focusing on tier-I and tier-II cities to includes Gold Class, Director’s Cut, per cent) expected to be below the age of
capitalise on the untapped opportunities. IMAX, 4DX, P[XL] and Playhouse. 35 bodes well for the overall
The company has given an indication Currently,PVR has 59 screens or 9.4% of entertainment industry. When
that it will open almost 90 screens total screens across the premium compared with nations such as China,
organically in FY19. Accordingly, 23 formats. PVR is targeting aggressive Brazil, South Korea, US and UK, India
screens are ready and awaiting licences, growth and has targeted premium is an under-screen market as seen in the
53 screens are under fit-out and are screens to reach ~20% of its screen exhibit below. Thus, the company's
expected to be completed in the next 5-8 portfolio in the next three years. screen expansion plan majorly in the
months. Also, the company is expecting tier-I and tier-II cities would be fruitful
mall development across the country, New offering to bring incremental for PVR in years to come.
which in turn would lead to further revenue for PVR
organic growth. For FY19, the company Apart from its conventional film Factors that may lead to flop show
has given capex guidance of `400-450 exhibition the company also offers From August 1, 2018, the multiplexes in

Analysis Equity
PVR Ltd.
Maharashtra may not be able to restrict Financials BSE Code : 532689 CMP: `1127.40
patrons from bringing in outside food. Looking at the last quarter of FY18's Particulars Amount (`Crore)
Also, food stalls are not allowed to performance, PVR’s consolidated
Net Sales 2334.11
charge prices higher than the MRP. The revenue for the quarter rose almost 21
government is working on the same and per cent to `584.9 crore over the % Change 10.13%
it is likely to come with resolution of the corresponding quarter of last year. This Operating Profit 428.61
issue in the next few weeks. This is a robust revenue growth was led by growth % Change 14.03%
serious issue for multiplex owners such of 18 per cent YoY in net box office Net Profit 124.74
as PVR as it has almost 25 per cent of its collections, which contributed almost 55
total screens in Maharashtra. PVR per cent of the total revenue. Also, the % Change 30.17%
generates almost 28 per cent of its total segments such as food & beverages (28 Equity 46.74
EPS (`) 26.51
FV (`) 10.00
P/E (x) 39.80
Dividend Yield (%) 0.18
Book Value (`) 230.08
(Trailing Four Quarter Data) CMP as on 30-July-2018
of almost 10 per cent each YoY. The

EBITDA for the full year rose 28 per cent
YoY to `402 crore, with corresponding
margin expansion of 240 bps. The net
profit for the period also jumped 30 per
cent to `125 crore.
Source: Inox Leisure
Valuation
revenue from the high margins in food per cent of revenue) and advertising (13 In terms of price-to-earning (P/E)
and beverages segment. However, to per cent of revenue) contributed in the multiple, the stock is currently available
mitigate this risk, the multiplex owners overall revenue growth with an increase at reasonable valuation of 43.3x on TTM
are likely to go for price hike for movie of 22 per cent and 37 per cent earnings, as against five years median
tickets. YoY,respectively. P/E of 55.87. The company’s RoCE also
stands at the comfortable level of 13.31x
Another threat that the multiplex The company’s EBITDA for the quarter as against 8.56x of its close peer Inox
owners may face is the increasing doubled from Q4FY17 to `94.4 crore Leisure.
penetration of digital or OTT platforms. with a corresponding margin expansion
In recent years, digital or over-the-top of 645 bps. Its EBITDA margin for the Conclusion
(OTT) platforms are emerging as a quarter stood at 16.1 per cent. Notably, The increasing urbanisation and
strong competitor to conventional the company witnessed turnaround in its disposable incomes in the country,
multiplexes as these platforms have bottomline to `26.2 crore from a loss of coupled with the low penetration of
created a space for watching movies. `0.05 crore in Q4FY17. screens, gives a huge headroom for the
Earlier, movies were available on theses multiplex operators to grow faster in the
digital platforms on or even before four On the annual front, the company’s coming years. We believe being a market
weeks post the movie release. However, revenue for FY18 rose 10 per cent to leader, PVR is well placed to encash this
one big relief for multiplexes is that in `2334 crore over the last fiscal. In terms opportunity. Besides, increasing revenue
the second half of FY18, the industry has of full year, the advertising segment from non-ticket revenue provides
aligned itself to 8 weeks' exclusive registered growth of 20 per cent YoY. sustainability for the foreseeable future.
window for multiplexes and single Other segments such as net box office However, the recent developments in
screens from the date of the release. and food & beverages recorded growth Maharashtra (allowing outside food into
multiplex, sale of foods on MRP, etc.)
Peer Comparison: may restrict incremental revenue from
Stocks Market Cap P/E Returns (%) Dividend the F&B segment. Going forward, we
(` Cr) Yield (%) would like to see how the company the
YTD 1 Year 3 Years 5 Years
responds to this development. Thus, we
PVR 5,269.31 39.8 -20.5 -15.73 10.25 26.9 0.18 recommend our reader-investors to
Inox Leisure 1,888.64 15.8 -32.94 -21.83 -5.48 28.54 9.38 HOLD the stock. DS

Communication Feature Bharat Agri Fert & Realty
The Dark Knight Rises!

B
harat Agri Fert & Realty, a additional subsidy of `500 per tonne and Anchaviyo Resort
Mumbai-based company engaged `300 per tonne respectively under NBS The 150 acre resort is just 80 kms away
in the manufacture of fertilisers policy. This is highly positive for the from Mumbai and a perfect getaway
(single super phosphate) has three other industry. from the tussle of day to day life. The
divisions – realty, resorts, and resort has 20 rooms with average ticket
pharmaceuticals. The company has been Realty Business size per room is around `22,000 per
a Single Super Phosphate (SSP) Bharat Agri as it owns a freehold of night for a couple. The occupancy rate is
manufacturer since inception. The around 106 acre of surplus land at Wada currently around 60%. With the current
manufacturing factory with installed district, Palghar is valued at around inventory in hand, the company can
capacity of 132,000 MT is located in `106 crore on conservative basis generate total revenue of around `10
Wada, Palghar on company's owned land calculated @ `1 crore/acre. This is crore in FY19. The management has
parcel of 18.36 acres. This business excluding its 18.3 acre land on which it plans to increase its room strength from
contributed around 60 per cent of the has its fertiliser factory operating and 8 20 to 80 in order to accommodate more
revenue last year financial year ended acre land on which it has its resort. This people as it is considering introducing
March 31, 2018, that is around `20.1 surplus land is categorised under 'Destination Wedding' at the Resort.
crore. 'Agricultural land.' However, the
company has already applied for it to be Attractive Valuation
Owing to normalcy in business post GST changed to 'Non-Agricultural land.' The With a net worth of `75.6 crore, the
and good monsoon in Maharashtra so company plans to expand its resort stock trades at 1x P/BV at current market
far, the capacity utilisation has improved business once they have the approval that price of `145. The company is at an
drastically to 60%. The management could be a game changer. inflection point with all its business
expects this momentum to continue and verticals are at the cusp of massive
pickup in demand by next year. Bharat The company also owns 6.25 acre growth. The fertiliser business is set to do
Agri's fertiliser business is expected to freehold land at Majiwada, Thane. Of well with better capacity utilisation and
grow at a CAGR of 36 per cent for next which Phase I project on 3 acre land is improved working capital cycle will lead
three years to `50 crore in FY21 with a already completed. The total saleable to higher profitability. This business is set
positive operating margin of 7%. area has been around 3.65 lakh sq.ft to touch revenue of `50 crore by FY21.
and has sold 348 flats. Unsold stock of The surplus land parcel of 106 acre that
Favourable Policy changes will enhance OC received flats will be sold in current the company owns at Wada is valued
the production of SSP. The SSP is one of financial year. The company has sold 3 conservatively at `106 cr. The unsold
the important fertilisers manufactured in flats in the first quarter and expects to inventory of 11 flats of Phase I Majiwada
India. SSP is a traditional product for sell the remaining 8 flats by end of this project will cash in `15 crore for the
supplying phosphorus and sulphur to financial year. Average ticket size for company in this year. Phase II Project of
pastures, the main two nutrients each flat is around `1.30 crore for Majiwada is valued conservatively at 1x
required for pasture production. SSP is saleable area of 1111 sq. ft. Since the cost sales of `360 cr. Overall, the realty
generally mixed with sulphate of has already been recognized in previous business is valued at `481 crore.
ammonia and muriate of potash, but can years, the entire cash collected from sale
be blended with other fertilisers. The of 11 flats will flow directly to the Coming to the resort business, with hotel
company imports raw materials from bottom-line in this year. Analyst `13-15 industry facing tailwinds, the company is
Egypt at a much reasonable price, which crore cash coming from unsold well set to do a business of `10 crore this
has led to improvement in its raw inventory. year and `13 crore next year. The value of
material cost. the resort business is valued at 2x FY20
Phase II- The company plans to launch sales to `26 crore that is well within the
Implementation of Nutrient Based its phase II project soon at Majivada on average industry valuation of 3x sales.
Subsidy (NBS) policy, inclusion of the balance 3.25 acre land. The company The company has no long term
sulphur under NBS, encouragement of is eligible for stilt +30 floors which is borrowings and `17.5 crore as short term
micro-nutrients fortified with zinc and pending with TMC & MOEF and will borrowings for working capital
boron etc. has led to enhancement in complete both buildings in next few requirements. As on March 31, 2018, the
production of SSP, which can be seen years with 3,00,000 sq. ft. saleable area. It company had `5.8 crore of liquid assets.
from higher capacity utilisation of 60 per will have a mix of 1BHK and 2BHK and The combined intrinsic value of all the
cent in the current financial year project itself will generate about business net of debt comes to `570 crore
(FY18-19). Subsidised fertilisers fortified `360-400 crore of revenue for the while the market cap for the company
with zinc and boron is eligible for company. today is just `79 crore.

Communication Feature Cerebra Integrated Technologies
Cerebra Becomes India’s Largest

E-Waste Player, Commences New
Facility To Handle E-Waste For
White Goods
promoters are still looking at increasing lakh square feet of modern facilities to
the shareholding. According to another handle the complete gamut of waste
market source, it appears that the electronic electrical equipments, thereby
company may also plan a share buyback making the company a leader in this
of 50 lakh shares, with price of upto `100 segment. With the commissioning of the
per share. new facility, there will be a major boost
V. Ranganathan With the government support and the
to the turnover and profits of the
company, thus making it the largest
MD, Cerebra new e-waste policy, the entire market will player in this country.
be handled by organised players only,
B
SE 532413/NSE listed Cerebra whereby Cerebra will make substantial The investment for this ultra modern
Integrated Technologies Ltd has gains in turnover and profits. Cerebra plant will be done from internal accruals
India’s largest e-waste recycling Middle East FZCO is a niche IT and it will be a major revenue earner by
facility currently with a capacity of distribution house offering data centre, the end of this financial year. Cerebra has
96000 MT per annum. This facility is security surveillance and IT started processing large quantities of
fully automated and pollution free .
According to a report by the International Telecommunication Union (ITU), a
Cerebra has informed the stock UN agency working in the field of information and communication
exchanges that it has commenced technologies, India discarded about 2 million tonnes, i.e. 2,000,000,000 kg,
construction of its second factory of electronic waste (e-waste) in 2016. And, the number is increasing steadily
building measuring 50,000 sq ft to house every year.
state-of-the-art, fully automated, ultra
modern, pollution-free, e-waste In its first phase, Cerebra has setup the e-waste recycling facility, and in the
recycling facility to handle white goods near future, it will be adding catalytic converters, tubelight and battery
specifically. The facility will be ready and recycling facilities other than the gold extraction facility. Cerebra is
fully operational by December 2018. The currently having offices across the country and has the infrastructure to
total facility now stands at 1,00,000 sq ft. collect e-waste pan-India.
Very soon with government support, which will encourage entire market
Cerebra was recently awarded 'CRISIL being handled by organised players only, Cerebra will gain with turnover
MSE 2' rating which indicates high and profits increasing substantially.
financial strength, high operating
performance and also high credit- infrastructure management solutions to e-waste and has now established
worthiness in relation to other SMEs. the Middle East and North Africa country-wide collection centres and will
The company has been performing well (MENA) regions. be expanding this further by identifying
with excellent results for FY2017-18. and establishing around 3000-plus third
During this period, the company This new facility will be an ultra modern party collection centres.
reported total revenue of `316.13 crore, facility capable of handling all white
EBITDA of `43.91 crore and EPS of goods, including refrigerators, washing The Government of India has brought
`2.75. machines, air-conditioners and ensure out a detailed set of rules under the
that it is safely disposed off without E-waste Handling Rules 2017 and it is
It is heard from market sources that the causing any pollution, without letting out working towards strengthening this law,
promoters of the company have been anything into the atmosphere, land or which ensures that the electronic waste
acquiring the shares through creeping water. This will be a state-of-the-art will not be handled by the informal
acquisition at regular intervals from the automated plant. With this new facility, sector and, thereby, ensuring that India
market and are now holding about 1.35 Cerebra will be having an unparalleled has pollution-free society and helps in
crore shares of the company. The infrastructure in the country of over one saving our planet from pollution.

Cover Story C F O
S P E C I A L
CFOs' Top Priorities:

Growth , Corporate
Governance, Risk
Management And
Enhancing Market Share
CFOs are often the most trusted
management resource for the
investors. Leading CFOs of Corporate
India interact with the DSIJ TEAM
and share their company’s vision and
strategies in this CFO special edition
When major indices are trading at record valuations and are technology for efficiency is a priority, growth financing comes
touching all-time highs in line with the US indices, the first in the priority list of majority of CFOs.
million-dollar question facing the investors is where are we
headed from here and what are the industry captains thinking We find that the Indian CFOs are optimistic on the economy
about India'a growth story? and in principle do not believe that the trade war is going to
impact the Indian companies too much. In fact, few of the
Investors definitely must be asking themselves - financial masterminds believe that India will emerge victorious
Are we going to get stronger from here on or weaker in in the trade war game, going forward. This sentiment is in
terms of corporate balance sheets and economy? sharp contrast with what the CFOs of major global
Are the corporate balance sheets immune from the risks conglomerates believe as per the latest Deloitte survey of global
of global trade war and where is the Indian currency CFOs.
headed vis-à-vis USD?
Majority of the CFOs we spoke to are planning for expansion,
While these questions are important for investors, there are thus reflecting their confidence in the economy and positive
many things an investor would want to know from a corporate sectoral outlook. CFOs of consumer-facing companies are
insider, including capex plans, organic or inorganic expansion bullish on the consumption story in India even as the CFO of
plans, future growth outlook, etc. In this special edition, we the NBFC company is betting on increasing financialisation of
have the insiders in the form of CFOs of major corporations in savings in India. While the CFO of a leading graphite player in
India being candid with us, sharing their optimism and outlook India is bullish on the prospects for the industry owing to the
for the economy and their vision for their own company. structural changes in the demand and supply, the outlook is
positive for the automotive industry in India as per the CFO of
CFOs are mastermind behind the growth strategy adopted by the leading automotive brand in India.
any company. The tightrope that a CFO has to walk to balance
growth with risk management without ignoring the corporate Overall, the India growth story is intact as per the financial
governance makes him a highly valuable player in the effort of captains of Corporate India. The focus areas for almost all of
wealth maximisation for the shareholders. As a master the CFOs is growth, corporate governance, keeping margins
strategist, a CFO has to be future ready and needs to own intact and continuously concentrating on improving market
analytics that improves predictive powers. While investing in share.

Interview C F O
S P E C I A L
The IT landscape is on a digital

transformation journeya
As a CFO of Tech Mahindra, equally global and digital, well-equipped
what are your top three to adapt and leverage both global and
strategic priorities? local presence. While there may be
Tech Mahindra has been on a short-term dips and gains in some
transformation journey over the last few pockets, overall at the company level, we
quarters, using a multi-pronged are on an improving bottom-line
approach of digital and service trajectory and continuously working
modernisation, embracing new age towards expanding it. Automation and
delivery and improving operational AIOps through our proprietary
efficiencies while reskilling our talent platforms is key margin lever to achieve
pool. Providing strategic inputs on this. In addition, enhancing synergies
investing in high yield, high growth with our portfolio companies and
businesses, while driving performance embracing new age delivery are key areas
Manoj Bhat management and enhancement is key.
The other strategic priority is to make
of focus.
CFO, Tech Mahindra sure our processes and systems are in line What are the key growth
with the changing needs and demands of drivers for your company
the marketplace, and incorporating going forward?
technology changes like automation and
AI, and data analytics to help steer agile For Tech Mahindra, FY19 will be a year
decision-making. Last, but not the least, of digital transformation and growth.
Manoj Bhat has been associated with driving operating efficiencies and helping Our endeavour is to clock 40 per cent of
Tech Mahindra since 2006. He brings Tech Mahindra drive value creation for the overall revenue from digital over
with him a rich experience of more investors, customers and employees is a time. As part of our TechMNxt charter,
than 20 years in the IT and ITES priority area. we are betting big on the next gen
industry -- across various roles in technologies like Blockchain,
Finance, Corporate Planning & As a company, we have started this Cybersecurity, Artificial Intelligence
Development, Merger & journey well, but believe that we have to (AI), Machine Learning (ML), Internet
Acquisitions, and Strategy, and has keep the momentum and achieve a lot of Things (IoT), Robotics and Analytics.
played a key role in Tech Mahindra’s more.
organic and non-organic growth Our enterprise vertical has been
initiatives. Due to rationalisation of delivering growth over the last few years
onsite and offshore, what and our vertical presence and our service
He has been the Deputy CFO of Tech offerings across IT, BPS and engineering
Mahindra from 2013, with global impact do you think it will
services has enabled us to maintain this
responsibilities for Business Finance, have on your company mar- momentum. The communication vertical
Investor Relations and Corporate gins going forward? is also showing signs of growth after a
Planning. He is also handling the role Tech Mahindra is a global digital period of consolidation and investments
of ‘Head of Mergers and Acquisitions’ transformation provider with operations in digital and networks of the future.
for Tech Mahindra from 2011 and is in 90 countries serving over 926
responsible for the acquisition customers - this, apart from the partner Due to 5G implementation,
strategy of the company. and alliance ecosystem that we work what kind of opportunities do
with. Also, co-innovation with clients, you see for your company’s
Mr. Bhat has a Bachelors in
academia, industry as well as
Technology degree from IIT Mumbai
collaborating with start-ups form an
telecom vertical?
and a postgraduate diploma in integral part of our TECHMNxt charter. If we look at 5G , the key benefits of the
management (PGDM) from IIM 5G technology will be increased data
Bangalore. Our delivery models, therefore, are capacity and more flexible and agile

networks. 5G will enable the customers What will be the impact of All this will be enabled by one or a
or the network service providers to ongoing trade war on Indian combination of many technologies be it
choose their own strategy, whether to be IT sector in your view? Do you Cloud, IoT, Analytics, Blockchain and
equipment-based, software-based or to the application of these technologies will
work with players who create an entire
intend to diversify your be for modernising the traditional and
ecosystem of services. Tech Mahindra is revenues further? creating new systems.
geared up to leverage all the three Trade wars or protectionism is not a new
segments. We are betting big on 5G – the phenomenon. In the current global We don’t give a view on our growth
network of the future, and making socio-political and economic backdrop, numbers, but our goal would be to
investments in capabilities and it has certainly garnered more attention. maintain the momentum we have in our
ecosystem creation. Protectionism will exist, but there will be enterprise segment and increase growth
enough windows of business in our communications segment.
Networks will also become more opportunities as well.
software-defined, which will enable For the Indian IT sector, this is an issue How do you manage the
multiple-use cases across segments. The of importance, but my view is that, given currency volatility at Tech
first opportunity is to be part of an the strong demand cycle for technology Mahindra? Where do you see
ecosystem of players that will deliver 5G and the scarcity of talent globally, there
outcomes to the customers, be it to retail will not be a long-term impact.
INR headed versus USD?
consumers or enterprise customers. The long term trend of the INR is that it
We continue to partner with What is your outlook on the IT has depreciated against the USD, with
communication services providers, industry going forward? What short term periods where it appreciates
equipment manufacturers and software are the internal growth tar- against the USD. To insulate against this,
players like Altiostar to benefit from we follow a hedging policy consistently.
this growth in capital expenditure due
gets you are working on? Our hedging policy, which has delivered
to 5G. The IT landscape is on a digital us good results, takes a longer view of
transformation journey. We have seen a two years while we decide our approach
At the second level, we have an phase of rapid evolution of technology to covering our exposures in foreign
opportunity in the whole IoT solution and this has disrupted many traditional currency. We cover multiple currencies
layer, which will enable effective business models. However, post the since we are present in most of the major
utilisation of the capabilities of the 5G initial phase of this change, we are seeing markets globally.
network. This could involve creation, many of our customers having clear Our view is that we cannot foresee the
implementation and managing these roadmaps and approaches to digital. This short term movements of the INR, hence
solutions to achieve the objectives of the augurs well for the industry since this we have institutionalised this policy.
enterprise customers. could potentially speed up decision-
making and increase revenue velocity for What is the best part of being
We have also historically seen network the industry. a CFO of a leading IT company
spend leading a revival in IT spends in from the fastest growing
our customer base and we could see We have laid a clear goal on how we as a
some benefits in our IT business with company can add value, and this model
nation in the world?
communication service providers as we is called RUN, CHANGE and GROW. First and foremost, the global nature of
move further into the 5G cycle. business and our exposure to multiple
a.) RUN is about enabling customers to business verticals, economies, currencies
We have already set up a lab in do their existing business more and regulations, makes it a challenging
Bengaluru in association with the US efficiently. and satisfying task to assess risks,
chipmaker Intel as part of our b.) CHANGE enables our customers to manage performance and figure out the
preparedness for 5G services. Further, change their service offerings/ right strategy from both financial and
our VNF (Virtual Network Function) portfolio to their customers so that business perspectives.
exchange programme is geared towards they are ready for today, tomorrow
collaborating and co-creating solutions and the future. The other advantage of being in an IT
for the future, with more than 40 c.) GROW is built around constructing company is the exposure to various
partners on-board from across the globe. new revenue-generating companies doing path-breaking work in
I must add that like any network change, partnerships with customers by new technology areas, some of whom we
5G is a journey and we expect benefits on taking a leadership position in the partner with and others whom we invest
revenues may start flowing in by FY20 new connected world propelled by in. This keeps me abreast of the latest in
and pick up steam later. next gen technologies an ever-changing environment.

Interview C F O
S P E C I A L
A K Sharma
Director (Finance), Indian Oil Corporation
As a CFO of Indian Oil Corporation, what are your top three

strategic priorities?
Our biggest strategic priority would be sustaining leadership in core business
verticals. In the deregulated market scenario, where domestic and foreign players are
In future, investing jostling to garner a bigger share of the market, it would be necessary to remain ahead
of the competition. This would call for capacity expansion of existing refineries,
across gas value increasing pipeline networks and augmenting marketing touch points with
appropriate product/service differentiators.
chain will kick-start The second priority would be to further entrench our integration and diversification
new phase of drive along with furthering the global reach to have a natural hedge against our core
business of refining and marketing. Petrochemicals would be an important growth
growtha area, raising equity oil and gas production from international and domestic assets
through future acquisitions as a part of diversification of business risk, will also form
part of the integration drive. In future, the demand for cleaner fuels will be the
hallmark for a cleaner environment, wherein investing across the gas value chain will
Mr. A. K. Sharma is a Commerce & kick-start a new phase of growth.
Law graduate and a Chartered
Accountant. Mr. Sharma has rich and Further, disruption is the new buzzword in every sphere of business and oil and gas is
not an exception. Therefore, from a long term perspective, we would have to intensify
varied experience in Petroleum
our foray into alternate energy sources, while also establishing presence in waste-to-
Industry. He joined IndianOil in 1983
energy, bio-CNG, EV battery manufacturing and the like.
and has handled various assignments
in Finance function both in In all the above endeavours, technological advances would be harnessed to the hilt to
Marketing as well as the Refinery achieve speedier results. Of course, it has to be ensured that capital is available at the
Division of Indian Oil. As the Head of right cost for the above choices to be profitable, at the same time, the bigger challenge
Treasury, he was credited for issuing would be to prioritise the capital allocation to support such growth.
the first ever Foreign Currency Bonds
($500 million bonds REG-S) of What kind of technical changes you will have to make to
IndianOil in the International refineries to produce BS-VI fuel?
Markets in 2010. Mr. Sharma brings
with him the vast experience of You would be aware that for migration from BS-IV to BS-VI fuel, sulphur content of
Project appraisal, Project Finance and MS and HSD has to be reduced from 50 PPMW max (BS-IV) to 10 PPMW max
Treasury Operations. Mr. Sharma is (BS-VI). In the refineries, the sulphur from fuels, that is, from high speed diesel
also the Chairman of IndianOil (HSD) and motor spirit (MS) is removed through hydro-treating utilising hydrogen.
Mauritius Ltd., a subsidiary of The sulphur content in HSD is removed through units like diesel-hydro treating unit
IndianOil in Mauritius. (DHDT) and with respect to MS FCC gasoline (high sulphur component of MS) is

removed through gasoline hydro-treater unit (e.g. Prime-G). you tell us about your strategy for inorganic
To take care of additional hydrogen requirement, new growth?
hydrogen generation unit may be required depending on With the average yearly crude prices hovering around $ 46 in
availability of hydrogen. Further, to supply utility requirements 2015-16, $ 47 in 2016-17 and $ 56 in 2017-18, we could achieve
like steam, power for above units, new gas turbines and steam a gross refinery margin (GRM) of $ 5.06 per barrel in the first
generators would be required depending on the characteristics year, which rose to $ 7.77 during the year 2016-17 and
of each refinery. continued its upward trend by clocking $ 8.49 per barrel in
2017-18. Notably, during the last two years, we have bettered
The work on the above changes is already in full swing and the the Singapore GRMs, considered as benchmark for refineries in
company is geared up to make available the BS VI compliant South Asian geography. Though the spreads in 2018-19, which
auto fuels well before the designated date. is beyond our control, would certainly be instrumental in
determining the level of GRMs that we would be able to achieve
Can you tell us how much amount are you in 2018-19, yet I would like to place on record there are many
investing for refinery upgradation and new steps that we have taken to ensure a healthy and robust GRM.
The commissioning of Paradip refinery and its stabilisation,
expansion? improving crude slate, reduction in crude procurement cost
To meet the Government of India guidelines for production of and tendering time lags and improvement in distillate yields
100% BS-VI compliant fuel (MS and HSD) in the entire and energy efficiency have been some measures that has helped
country w.e.f. April1, 2020, BS VI projects worth about in realising better GRMs.
`16,000 crore have been approved. BS-VI programme envisages
revamps/installation of new units at Panipat, Mathura, Gujarat, As far as inorganic growth is concerned, with a view to diversify
Haldia, Bongaigaon, Digboi Refinery, Paradip and Guwahati. our business risk, we have been making concerted efforts to
acquire producing/near producing/under development/
At Haldia refinery, about `4,200 crore is being invested for discovered upstream assets, either alone or in consortium with
improvement of distillate yield. This project, which envisages other companies. Regular efforts are also being made to
installation of Delayed Coking Unit, is on the verge of identify and evaluate possible acquisition opportunities in
completion and the benefits should start accruing from the other business-related areas.
current year itself.
What impact does deregulation of oil prices
To improve production of LPG and gasoline at Bongaigaon have on your company’s profitability?
refinery, we are adding a secondary processing unit known as
INDMAX unit at cost of about `2600 crore. This unit is based The most significant impact of deregulation has been on our
on technology developed in-house by IOC’s Research & working capital requirement. Before deregulation we were
Development wing. selling most commonly used fuels, i.e. petrol and diesel, at
below market prices and the difference was being reimbursed
We are also planning a project at Mathura refinery worth in the form of subsidy. Due to time lag in the receipt of subsidy,
`6000 crore with the twin objective of improving the distillate there was no other alternative but to borrow from the market to
yield through a residue upgradation unit and also enhancing meet working capital requirement. This impacted the
the capacity of the refinery by about 1.2 MMTPA. profitability in terms of finance cost. On the other hand,
deregulation has attracted private players in the market. The
As far as capacity expansion of our refineries are considered, we entry of new players generally puts pressure on the market
are looking to increase refining capacity at Gujarat refinery by share as well as margins. However, we have reviewed our
about 4 MMTPA at an estimated investment of about `15,000 business processes to make them more robust to keep abreast
crore. This would also include major revamp of some of the with time and increased focus on automation and upgradation
existing units. We are also planning to add 3 MMTPA of of our retail outlets to retain market share.
refining capacity at Barauni refinery at a cost of about `6200
crore. In addition to the above, enhancing capacity of Panipat As the CFO of India’s largest fuel retailer, what
refinery by about 10 MMTPA is also on the anvil. challenges do you face?
Further, a mega refinery on the west coast christened as In the face of competition from private players, sustaining
Ratnagiri Refinery and Petrochemical Project is envisaged and leadership in core areas is a challenge. In a competitive
a JV has been formed by the three oil PSUs for implementation scenario, the marketing margins will be under pressure and,
of the same. therefore, ensuring high levels of revenue is a challenge.
A fallout of the above would be fierce competition among the
Over the past few years, your operating oil marketing companies to retain market share. The challenge
margins are heading northward. Can you tell would be to maintain investor confidence as well as augment
us your view on the same for FY19E? Also, can shareholder’s wealth.

Interview C F O
S P E C I A L
P B Balaji
Group CFO, Tata Motors
Can investors expect financial performance of Tata Motors to

improve in the coming quarters?
With Turnaround 2.0, we will continue to enhance the organisation’s effectiveness,
enabling greater speed, simplicity and agility in our efforts. Our plan is to focus on
sustaining the momentum for the CV business and to further increase our market share
in the PV segment
We want to take the We plan to manage transition through more personalised and calibrated change in CVs,
lead in shaping while delivering elevation through more individualised experiences in PV. We have
started the year with a bang, with an 86% growth in our domestic sales in April 2018
Indian CV industry and we can only go higher from here
with path-breaking With regards to JLR, the contribution margins are healthy. We are keen to step up on
the operating leverage. Our portfolio is starting to fill up with plug-in hybrids and
technologies and electrics. That means that all the products which are there with electric options are
starting to sell exceedingly well. Range Rover, Range Rover Sport get their full model
innovationsa year impact as well this year. We are quite excited and expect to see both demand and
profitability improve in FY19 compared to last year
How is the company planning to bolster up its topline? What are

the cost reduction initiatives undertaken by the company under
your leadership?
Balaji is a global finance professional
with over two decades of experience As mentioned earlier , under Turnaround 2.0, we will continue to enhance the
in the corporate sector. He started his organization’s effectiveness enabling greater speed, simplicity and agility in our efforts.
career with Unilever in 1995 and Our goal is to continue sustaining the momentum for CV Business and further increase
worked in different corporate finance our market share in the PV segment. We will manage transition through a more
personalized and calibrated change in CVs, while delivering elevation through more
roles across Asian markets,
individualized experiences in PV
Switzerland, UK and India. Since
2014, he has been heading the finance We plan to do this by enhancing our presence in emerging countries, with a focus on
function as the Chief Financial Officer APAC, Africa and Middle-East markets, on the back of new range of world-class
of Hindustan Unilever, a $6 billion products like the Xenon, Super Ace, Prima and Ultra range of trucks. For PVs, we will
enterprise. Prior to that, he was the focus on filling in product gaps and tapping the white spaces that will emerge
Chief Accountant of the Unilever Our portfolio of gaps have also been filled. Due to supply chain challenges, we have not
Group in London. supplied the full number of vehicles that we would want to supply. Therefore, this year

those things are getting fixed. We have grown too fast compared take the lead in shaping the Indian CV industry with the
to what our capabilities were and we have picked up shares. introduction of path-breaking technologies and innovations. We
Therefore, it is important that we build the capability to meet the are working towards enhancing the value proposition and the
demand total cost of ownership for customers, while bolstering revenue
potential. We are now the sixth largest CV player and the fourth
We have already taken tough decisions for streamlining and largest truck manufacturer globally
consolidating the businesses through the sale of defence business
to TASL and shelving the Racemo project to improve cash flow. In PVs, Turnaround 2.0 strategy will focus on filling in product
We have also had a significant ramp-up of production by nearly gaps and tapping the white spaces that will emerge – sporting a
22%, thanks to the structural debottlenecking of the supply robust product pipeline with its current and future products. The
chain. The exceptional contribution to the bottomline by cost focus will be on driving volumes and increasing market share.
reduction efforts is enabling us to build a robust cost structure TML will leverage its architecture strategy through the OMEGA
and competitive advantage as we go ahead and the ALFA architectures and the plan is to deliver 7-8
products/variants from these two platforms
How is the company planning to cope with
sector-defining challenges, namely, the advent We also plan to enhance our presence in emerging countries,
of electric vehicles and stricter emission norms? with a focus on APAC, Africa and Middle-East market on the
back of new range of world-class products like the Xenon, Super
We at Tata Motors have identified sustainable transportation as Ace, Prima and Ultra range of trucks
one of the core elements of our company strategy, in line with the
Sustainable Mobility Vision outlined by the Indian government. The company has recently unveiled several EVs
Over the last one decade or so, we have been continuously in the CV and PV segments. What proportion of
innovating in the electric mobility space across our passenger the company’s total investment is likely to be
and commercial vehicle portfolio. Over the years, we have run
several projects and demonstrated EV concepts like Vista, Zest,
dedicated to the EV segment? How do you view
Bolt, Tiago, Tata Ace, Tata Ace Magic and the Iris. With our the EV revolution in the Indian auto industry?
understanding of the technology and customer requirements, we We believe that the EV space will emerge gradually, as the
have bagged the order for Tigor EV, which we are supplying to customers start experiencing EV products and, more importantly,
EESL currently. In the commercial vehicle category, we their inherent benefits of zero emission and lower operating costs.
successfully participated in the EV bus tendering process and As far as Tata Motors is concerned, we will continue to scout for
have won orders from six out of the 10 cities (62% of the total opportunities to fulfil our e-mobility aspirations
tender order)
Under the FAME Scheme, Tata Motors has won tenders in six
There are primarily two concerns when it comes to electric cities (out of 10 cities, which is about 62% of the share of the total
vehicles in India. Firstly, EV battery cost continues to be a tender orders); that amounts to a total order of 190 electric buses.
dominant aspect of vehicle electrification. As the conventional We are also actively engaging with a number of potential
IC powertrains are replaced by Li-ion battery, motor and customers - from city transport authorities, cab aggregators,
reduction drive, the cost of the propulsion system goes up private fleet owners and, of course, early enthusiasts. As part of
significantly. This means, despite FAME incentives, the on-road our tender with EESL, we have already completed the
price of a typical B segment car is well beyond the expectations production of 250 cars and initiated the execution of phase-2
for a retail customer, eventually limiting its penetration. orders. We are committed to the government’s mission of
Optimising the costs of the electrical drive systems and e-mobility by 2030 and continue to work in a collaborative
providing a commensurate payback in terms of reduced manner to facilitate faster adoption of electric vehicles and to
operational costs are the major challenges for OEMs, including build a sustainable future for India
Tata Motors
India's power generation trend is dominated by
Another challenge is the absence of electric charging conventional energy resources like thermal and
infrastructure. Customers are reluctant to take on an EV with the renewable sources are less as compared to other
uncertainty of being able to recharge the batteries
countries. Don't you think the shift to EVs will
How is the company’s restructuring plan helping burden the conventional power generation and
it improve its market share across various negate the effect of shift to EVs?
segments? Diesel buses consume 30 times more fuel than average-sized cars
and, hence, their impact on energy use so far has become much
The company has been streamlining and consolidating the greater. It is estimated that for every 1,000 battery-powered buses
businesses. The new modular platform strategy across CV on the road, about 500 barrels a day of diesel fuel will be
segments will enable more variety to the customers. We want to displaced from the market

Interview C F O
S P E C I A L
Ensuring sustainable and profitable

growth is both a challenge and
opportunity for CFOa
Lalit Malik
CFO, Dabur India Ltd
Mr. Lalit Malik is the CFO at Dabur As CFO of Dabur, what are your top three strategic priorities?
India Ltd. A Finance professional CFO's responsibility covers the 5 's of the business: Cost Control, Compliance,
with over three decades of experience Consistency, Continuous Improvement and Effective Communication. In a highly
in India and abroad, Lalit oversees the volatile environment where strong external headwinds and regulatory changes are the
Accounting, Business Support, order of the day, a CFO has to be forward thinking to not just manage the emerging
Financial Planning and Analysis, challenges but also ensure sustainable growth for his organisation.
Mergers & Acquisitions, Internal For me, the top three priorities will be:
audit and Tax functions at Dabur a. Being a partner in ensuring sustainable, profitable growth for Dabur
globally. He is a strong proponent of b. Ensuring complete statutory compliance and corporate governance
good Corporate Governance c. Ensuring control and cost savings
Practices and believes that
transparency is the key ingredient for
success of any organisation. What are the growth drivers for your company? Which product
segment are you expecting to show maximum growth?
Lalit is part of the core strategic group
at Dabur. As Dabur’s Joint Chief Risk There are three key pillars to Dabur’s growth strategy:
Officer, he has helped the company a. New product development
successfully navigate the emerging b. Expansion into new geographies
risks and the several structural c. Acquisition
changes in India’s Regulatory
Environment. Dabur has been witnessing a highly secular growth across all its key categories, which
has been reflected in the performance in Q1 of FY2018-19. Despite an increase in the
level of competitive intensity, our brands reported a robust performance during the
Lalit has been conferred with several
quarter, growing ahead of the market and delivering strong double-digit growth
prestigious awards like:
across all our key categories like health supplements, hair care, oral care, skin care,
Most Influential CFO’s of India – home care and foods. Our business has performed well on all operating parameters.
from CIMA. This strong performance reflects the robustness of our business model and our ability
to efficiently manage the emerging challenges. We have put in place a prudent growth
CFO Award for Excellence in strategy and continued to invest heavily behind our brands to successfully tap the
Contribution to the World of Finance emerging opportunities.
from – CFO India in 2016 and 2017.
Ranked among the Top 3 Best CFO’s The recent years have seen a marked increase in demand for Ayurveda and natural
by Business World Magazine in the products. This trend has been gaining momentum with the growing awareness about
consistent Liquidity Management the benefits of Ayurveda and Ayurvedic products. To tap these opportunities, Dabur
Category. strengthened its healthcare portfolio by introducing several time-tested Ayurvedic
remedies in modern day formats to cater to the new generation. In a market that

continues to grow and expand and is seeing increasing to introduce a range of products that will be value-added and in
consumer awareness and government support, companies like the premium category, which will help us improve our market
Dabur -- with its traditional herbal positioning and strong share.
R&D -- are likely to benefit disproportionately from this trend.
Dabur maintains its edge over competitors with its herbal and
Ayurvedic heritage of over a century. We remain true to our
Can you throw some light on the outlook of heritage and are continuously working to update our portfolio
your international business amid trade war in line with changing consumer demands and aspirations.
situation?
Dabur India also has a strong in-house research wing that
The international markets have been witnessing high volatility follows a ‘bush-to-brand’ approach. We have our in-house
in recent years due to geopolitical disturbances and currency nursery, which grows several rare herbs that go into various
fluctuations in some of our key geographies. Even in these products. We have been growing quality rare medicinal herbs
challenging times, we identified opportunities ahead of that are used in our products. Today, we grow rare herbs in over
competition, which is reflected in the strong constant currency 5,000 acres of land across India. This in-depth knowledge about
growth that our international business has been reporting. nature and natural ingredients is one of our big strengths in the
market.
Your operating margins over the last few
quarters have grown. Can you tell us which It has been one year since GST implementa-
factors have contributed to margin improve- tion. How has GST impacted Dabur?
ment? Going forward, what kind of operating The introduction of GST is, by far, the most important
margin are you looking for? transformational tax reform introduced in India in recent years.
Our margin improvement has primarily been on account of Given the fact that GST has subsumed all other taxes, it not
cost-saving initiatives and synergies. Despite the growing only improved the ease of doing business, but it also ushered in
inflationary pressures, our intent is to maintain margins a degree of convenience and numerous benefits for consumers.
through proactive measures. The subsequent introduction of E-Way Bill further helped the
supply chain.
Dabur is one of the pioneers in the Ayurvedic
segment. How do you plan to leverage this While there were some disruptions in the initial period and a
steep learning curve, we were fully geared up for the GST. We
position amid rising awareness for Ayurvedic had engaged an external consultant and have been working on
products? GST for over a year before its actual roll-out. We had completed
The recent years have seen a marked increase in demand for all the groundwork regarding amendments in our IT
Ayurveda and natural products. The consumers today, infrastructure much ahead of the actual announcement to
particularly the youth, are increasingly shifting to natural and ensure a seamless transition. We had also supported our
Ayurvedic products for both their healthcare and personal care channel partners to help them become GST-ready.
needs. This is also reflected in the sudden increase in the
number of players entering this category and the general The introduction of GST led to a downward revision in prices
increase in natural and Ayurvedic products offerings from of several products across key consumer categories, which
mainstream players too. helped improve consumer sentiments. In the subsequent
months since the roll-out of GST, we have seen consumer
Dabur has been pioneer in the Ayurveda and natural space in confidence improving, which has resulted in higher growth
India. We are today the leading Ayurveda and natural with consumer demand shifting from unorganised players to
healthcare company with a portfolio of products that are based organised players.
on nature and natural ingredients. Dabur has always believed in
the benefit of Ayurveda and has been spreading the goodness What is the best part of being a CFO of Dabur?
among our consumers in India with a range of Ayurvedic
products. We have been, for the past 134 years, developing and As I mentioned earlier, we are living in a highly volatile
successfully introducing products based on Ayurveda to cater environment today, marked by regulatory changes and
to the ever-changing needs of the consumer. We continue to geopolitical disturbances. Ensuring sustainable and profitable
introduce new products, invest in enhancing our distribution growth in these times of high volatility and complexity is both a
network and effective communication with our consumers to challenge and an opportunity for any CFO. Being part of a team
spread awareness about the high quality of our products as also taking proactive measures and timely decisions while managing
the benefits that they offer. Going forward too, we will continue a complex portfolio would be the best part of being a CFO.

Interview C F O
S P E C I A L
When growth is priority, challenge

is the growth drivera
Naresh H. Bhansali
CEO – Finance, Strategy and Business Development and CFO
Emami Limited
As a CFO of Emami, what are your top three strategic priorities?

For any business, nowadays, the CFOs do not look only after finance. They are the
Mr. Naresh Bhansali, CEO - Finance, enablers for the business, and in fact, they participate very actively in the growth and
Strategy and Business Development strategy of the business. So, the strategic priorities for the business becomes the priority
and CFO, Emami Limited is a FCA for the CFO as well. The number one priority for any organisation and for us also is the
with more than 2 decades of rich growth, how to grow the business, and then if you are to grow the business, what are the
experience in the field of Finance & building blocks challenging that growth and how the CFO and other top management
Accounting. team can help build that kind of ecosystem that facilitates growth. First, is the overall
growth from the existing business, and second, is the inorganic growth from any JV or
Currently, he is in – charge of the acquisition, etc. While growing the business faster than peers is the number one
overall responsibility of Strategy & priority, growing profitability is another priority. CFOs play a vital role in balancing
Business Development, Mergers & between growth and profitability. The world is changing around you, and using
Acquisitions, Finance and Accounts, technology optimally for digitalization, efficiency enhancement and to reduce the cost
Legal & Taxation, Internal Audit and of the business is yet another priority.
Information Technology verticals
among others for Emami Limited.
How has FY18 been for your company and what are your expec-
Mr. Naresh H. Bhansali has been tation in terms of volumes and profitability in FY19 & FY20?
awarded the Best CFO in the ‘Healthy The last two years FY17 and FY18 were impacted by the structural changes which have
Balance Sheet Management – Mid happened in the Indian economy in terms of demonetisation and GST. Though one can
Size Corporate’ category by YES say that the primaries were impacted while the secondaries remained intact, there had
BANK-BW BusinessWorld for the been lot of challenges during this period because these changes demanded realignment
year 2018. For three years in a row of the ways of doing business, as the new business rules evolved. For instance, the
since 2015-16, Mr Bhansali has been wholesale channel, one of the important channels of the business, got impacted and that
adjudged the BEST CFO by YES disruption lasted a little longer than expected. But, during this period, we actively
BANK-BW BusinessWorld, which is engaged in increasing our network of direct retail distribution to smaller towns and
indeed a commendable achievement. villages and brought down our percentage of wholesale dependence. This helped us to
He has also been awarded in the hold on to the field and we could grow despite the disruption. To that extent, our
category of ‘Winning Edge’ in Cost performance has been satisfactory. Almost all our power brands have strengthened
Management – Revenue above `1000 their respective market shares, new launches have also performed satisfactorily and
cr in 2013 for his exceptional international business has also started growing consistently. With the stabilisation of the
contribution to corporate finance by above mentioned structural changes, normal monsoons, growing rural incomes and the
CFO India Magazine. Back in 2012, he increasing government outlays on infrastructure, among others, would help the
had also been chosen as the winner of consumer sector grow rapidly. Emami is poised to take benefit of this growing
ICAI Awards in the category CA CFO opportunity. We expect to return to our aggressive growth trajectory with double digit
– FMCG. volume growth across all segments.

What are the key growth challenges faced by probability of raw material price hike. But we try to do that
your company in the current market scenario? without impacting the consumers very hard. So, we always take
When growth is the priority, then challenge is also the growth around a 3-4 per cent kind of an annual price increase. We,
driver. We have grown very aggressively compared to the peers therefore, expect that despite such cost increase, there would not
in the past and we still have an edge. But we would like to be a significant material erosion in the gross margin.
continue to grow further. In terms of the business model, the
penetration of our products in all the categories is still very low,
so the scope of growth is quite high. To achieve the desired Can you throw some light on your capex plan
result, we are ramping up our distribution, our marketing and for the next two to three years?
our overall ecosystem to support that kind of an aggressive If you look at the past, we have built up a lot of capacities across
growth trajectory. Our brands enjoy handsome market shares all our units, including our overseas units in Bangladesh and in
with leadership positions in many categories. We now need to North-East India, where we have built our largest plant last year.
strategise on how to increase the market itself through further The plant is at Pacharia in Assam, which is a state-of-the-art,
penetration and retain our leadership position. Increasing the highly modern unit commissioned at an investment of around
relevance of the brand, increasing its usage, communicating it `300 crore. So, almost all the capacity expansion has happened
very clearly to the consumers, which will help increase and now there would be only some kind of regular and/or some
penetration and the per person usage are the action areas for us. upgradation capex. We, therefore, do not expect a lot of capex in
These are the things that drive the growth in the existing the next two years in terms of the capacity expansion, but more
business and existing categories. To further this growth, brand towards investing in the technology and upgradation, which may
extensions are good levers to drive it ahead. For example, we first not cost more than `100 crore of investment Y-o-Y in the next
came up with Navratna oil, and when it succeeded, we two years.
introduced Navratna cool talc on the same cooling proposition.
Similarly, in Fair and Handsome, first we came up with the
cream, followed by a facewash extension. Again, BoroPlus What kind of EBITDA margin are you looking for
initially started with an antiseptic cream, which was later FY19?
extended to body lotions, prickly heat powder, face washes, etc. As our EBIDTA margins are at the peak and we intend to
This strategy has helped us deliver sustainable profitable growth capitalise on the evolving business opportunity by investing
while taking leadership positions in the niche categories. behind the brands and processes and also on introducing new
products to the consumers, our margins may reduce by 100/200
bps, but that would be more than offset by growth in the business.
What are the challenges you are facing?
Having made the right products, the challenge is to In your view, how will the ongoing trade war
communicate to consumers and then make the products end and what will be its impact on the Indian
available, when and where the consumers want. All our products economy?
are made on the basis of the science of Ayurveda using modern
laboratory practices. We then market them aggressively through While the world has become so unpredictable and things are
ATL/BTL campaigns with celebrity endorsements for top of the changing on a daily basis, some day you may find that the things
mind recall. Our sales team then ensures that products are made are changing for the better, but sometime one may feel that the
available to every consumer through our well-entrenched things are becoming so negative. On an overall level, I don't
distribution in general trade, modern trade, rural market, think that there would be something which would impact us
e-commerce and even defence supplies. We work relentlessly to adversely. In-between, for a month or so, there could be some
improve on each of the areas to deliver superior results, better price increases for the crude, there could be import embargo or
than the past and better than the peers. something else, but that should not last for long. Though I am
not an expert, but that's my view.
Raw material prices are heading northward.
How do you plan to mitigate this rise in input Any message you would want to convey to your
cost? company's shareholders?
In the past years, the costs had been relatively benign, We are working relentlessly and the whole team is very excited to
particularly the agri-products were at a lower level and the crude take up the opportunity of this evolving Indian economy.
was also low, so that had an impact on the overall cost. However, Consumerism is expected to increase substantially and we are
despite the present rise in the cost of key materials like menthol placed very favourably to take advantage of this situation. We are
and crude, we have been able to sustain the improved margins. an Ayurveda company, which is very relevant in present times,
We strategise our procurement plans through long term duly supported with most modern technology. We sell the
purchase contracts; use hedging mechanisms, develop new products across all channels and markets. Our products have a
sources of procurement, and so on. Besides, we also take some very strong value-for-money proposition. So, I think we are very
moderate price increases Y-o-Y wherever we feel that there is a rightly placed with an optimistic business outlook.

Interview S P E C I A L
C F O
Basis historical trend, we may maintain 24-25
per cent margin for FY19 and beyond that.a
As a CFO of Sterlite Technolo- synergy of this acquisition?
gies, what are your top three Also, can you tell us about
strategic priorities? your plans for inorganic
growth?
Our objective is to increase the
shareholder value for all our stakeholders We are a large global network solutions
– suppliers, customers, employers, provider. On the optical fibre and fibre
governments, authorities in India and cables side, we hold about 6 to 7 per cent
outside, where we impact digital global market share. From a technology
experiences. On No.1 priority is the perspective, we are uniquely positioned.
growth that we have committed to the In India, we are the only company having
Anupam Jindal market up to FY20. Beyond that, we need the capability of making fibre right from
to create sustainable growth silica, the basic raw material. Globally, we
CFO, Sterlite Technologies opportunities for the company. The are among the only 10 companies which
entire executive management is working manufacture preforms and are currently
towards it. We have charted out a addressing fibre demands of 8 among the
programme so that some of us focus on top 10 global telecom operators.
Anupam Jindal has been associated long term growth, while the team is
with the Vedanta Group since 1998 in focused on delivering the ‘here and now’ From an international perspective, we have
various business verticals, including happening on the ground. been able to secure a good market in
Europe and China. Last year, our
its aluminium and copper businesses.
The No. 2 priority is all about maintaining international revenue was nearly half of
Having set up a large finance team for
and improving our corporate governance our total revenue. Of which, 27 per cent of
one of the aluminium entities in standards. We have set quite high revenue was from Europe and 18 per cent
2001-03 for a US$ 1 billion greenfield parameters to meet corporate governance from China. With this large market in
project, he moved to Australia in standards, disclosure, transparency and Europe, which has also grown over the last
2003 as head of finance for Vedanta communication. How do we further 2-3 years, we didn’t have manufacturing
Group’s two copper mines, before elevate this as we grow, remains a priority. base there until now. So, to serve the
returning to India in 2006 as CFO, We are driving this through systems, team European markets better, we were looking
Sterlite Technologies. building and culture building. at something closer which are not
Anupam has been heading a team of high-cost markets like France and
more than 100 people in his current The No. 3 priority is beyond the Germany, but good hubs. We were looking
role that drives the complete finance company. How can we look at for such opportunities for some time now,
function of Sterlite Tech, along with positioning the country in the overall and found it in Metallurgica Bresciana.
global market as a thought and industry
multiple subsidiaries in India and
leader? There are overseas players like The company is based in Italy and has
overseas. As part of the senior-most
Cisco, Ericsson, Nokia, among other the potential to ramp up significantly.
leadership team at Sterlite Tech, companies ruling the entire network and Currently, this company is serving Italy
Anupam has been instrumental in telecommunication industry. How can and customers around the country. They
enabling the company’s foray into Sterlite Tech become a large company have some Chinese customers as well.
various new business initiatives, like those while driving the technology This company has fibre cable
investor relations, capex planning, revolution in this space. We see a huge manufacturing capacity of 3 million and
financing and refinancing of its large opportunity here and have started to some copper communication cable,
telecom business with more than think along these lines. It is a long and which serves new industry verticals that
`10,000 crore portfolio of tough journey, but it’s a job I’m driving we didn’t have access to. This opportunity
transmission assets. He has also along with my team. was aligned to our existing offerings and
played a crucial role in the acquisition is of value from day 1.
of Elitecore Technologies in 2015. Recently, you have acquired
Being a Chartered Accountant from Metallurgica Bresciana. Can It also provides an opportunity to scale
ICAI, his focus areas have been you through some light on the up, thereby getting better utilisation of
finance, treasury, accounts and MIS. the 3 million capacity, which is currently

utilised up to 60 per cent. We may ramp consumed on a sustainable basis with We have maintained EBIDTA margin of
it up to 5 million over the next 6 months rising 5G penetration. It will be at least 5 about 20-21 per cent on a long-term
or so by balancing and debottlenecking. to 7-year demand cycle, if not more. average basis. Essentially, we are a very
Then we may look at expanding capacity cost-focused company. At the same time,
further to help increase the market. As far as our market share is concerned, we ensure that the customer is serviced
we have consistently increased it in the with the best solutions at par with the
We have a clearly defined and articulated global industry from less than 1 per cent global players. This creates the best
inorganic growth policy, which we have to currently about 6 to 7 per cent. We are profitability in the industry. The margins
communicated to investors also from time increasing our capacity from 30 million are already at a high level. While the long
to time. We would continue to look at out of this 500 million market to 50 term average is 21-22 per cent on
inorganic opportunities which fits very well million, and I am sure by the time this 50 EBIDTA, in Q1FY19 we have delivered
with our strategy of growing the company million capacity comes up by June 2019, EBIDTA margin of 29 per cent. I won’t
in all three industry verticals – telecom the market will also have shifted from 500 say that 29 per cent would continue as it’s
products, system integration and software million to about 550-600 million mark. a function of how our services and
solutions. There are certain financial We may increase to 8-9 per cent market software businesses pick up. Within
parameters which we would continue to share, depending on the market dynamics products business, it is a play of optical
look at. Size does not really matter, but it and will look at our own capability to fibre, which is a high margin business,
definitely has to be within our reach and increase capacity on the ground. versus optical cable, which is a relatively
capability. The geography has to be closer to lower margin business. EBITDA margin
our customers, where we have market Currently, we are looking from the is a combination of all these three
access, primarily Europe and China. We are product segment, which is fibre and fibre businesses of telecom products, services
also trying to enter the US where we see a cables, which together contributes 75 per and software. Basis historical trend, we
huge opportunity for growth. cent of the revenue. This segment may maintain 24-25 per cent margin for
currently serves the needs of 3G, 4G. FY19 and beyond that.
You have also forayed into 5G When the market moves to 5G and
enabling front haul and fibre- last-mile connectivity through fibre to What is your view on ongoing
the home (FTTH), the movement will trade war?
to-home network technolo- not happen simultaneously in all the
gies. What kind of growth do This trade war between two of the largest
countries. Some countries move faster; economies of the world is unfortunate. We
you see from this segment? some may move slower. For example, don’t see an immediate threat to the
Over the next five years, what India lagged behind in terms of company, but it’s quite complicated.
kind of revenue share do you changeover to new network. India Fortunately, fibre is not a commodity or
expect from this segment? moved towards 4G with Reliance Jio product that is exported from China to US.
pursuing it aggressively over the last 3-4 China itself is consuming huge amount of
The 5G is a very recent growth driver that years. All existing players have been fibre. But in retaliation to the US measure of
is emerging. So far, the fibre industry was lagging behind in rolling out network curbing or imposing high duty on Chinese
driven by the transition towards 4G, which because of many constraints. Fortunately, products, there is a possibility of China
was happening around the world. In India, to grow, we aggressively looked at global imposing huge duty on imports from US or
we are still witnessing this transition. Large opportunities in time. the US players setting up shop in China.
telecom operators in developed countries This may have some impact on the
have started talking about 5G, taking up While products business will have its own industry, but presently, I don't see that as a
trials. The commercial launch will start as growth, we also have system integration significant challenge.
early as end of 2018, early 2019 globally. and software businesses which are growing.
This will be a huge transformation in We started services and software businesses
telecom and digital communication 3-5 years back and these are getting good India does not export much of
industry, where the network will get more traction. The software business serves engineering products to China, apart
and more dense with fibre. revenue monetisation and OSS/BSS from companies such as ours. As per my
requirements of telecom companies and has knowledge, India generally exports more
Fibre demand in India is very small as huge growth opportunity. Currently, it is of raw materials and natural resources
compared to what will be seeing going about 20-25 per cent of our revenue profile than actually importing. The impact on
forward. Today, the global industry is and we see this growing in terms of absolute the Indian economy may be seen if
about 500 million km of fibre value, in our overall profile. aggressive imports from China could be
consumption per annum. With new fibre coming into India because of the gates to
deployment, this 500 million may go up Your EBITDA margin over the the US getting closed or getting higher.
to 700-800 million km on a short-term past years is on an upward That may result in some dumping and
basis. Post that, about 900 million - 1 that’s where the government has to act to
billion km fibre will be globally
trend. What kind of margin protect local industries.
are you looking for FY19E?
Interview C F O
S P E C I A L
Kumar Subbiah
CFO, CEAT
As a CFO of CEAT, what are your top three strategic priorities?

My priorities will be aligned to the organisations priorities. So, our priority number one
is growth, and to grow profitably. So, my priority as a CFO is how do I help business to
grow and to grow profitably? Priority no. 2, we have large capex plans and so my
priority is how do I help the business to manage that capex in terms of funding,
managing the overall cash flows, ensuring that capex is well spent, etc. The third priority
is, in the tyre industry, the commodity or the raw material cost is 60 per cent of the
turnover and any volatility in the raw material prices will certainly impact the margins.
Therefore, how do we manage that commodity to ensure that the business gets enough
We have to ensure time whenever there is upward movement in the raw materials prices or the commodity
prices, and how do I give protection or cover even the exposure arising out of forex? So,
that we increase the these are the top three priorities for me.
size of the market Can you throw some light on your capex plan?
In terms of capex plan, we have already stated that we would be spending about `4000
piea crore over the next 3-5 years. So that is our capex plan. It is a large amount of capex and
currently CEAT's balance sheet is reasonably healthy, particularly with respect to
leverage ratios, whether debt/equity, debt/EBIDTA, etc, so CEAT's consolidated basis
debt-equity ratio is 0.28 and standalone is 0.2 as on.June 30. So we have enough balance
sheet strength to fund capex, but considering that the capex amount is large, we are
planning to fund one-third of it from internal accruals and two-third through debt.
Kumar Subbiah joined CEAT in Feb However, it depends on the cash flow. We have already started expanding our capacity.
The first one is for truck and bus radial tyres at our existing location in Halol and we are
2015 after spending little over 20 years
going to set up one large modern passenger car radial plant in the southern part of India
with Unilever and Hindustan
near Chennai. So, we have clearly drawn out a plan in terms of where would be
Unilever, where he handled various investing that capex and how much for each of the categories is being worked out and
finance and commercial roles in India broadly shared also.
and outside India. Kumar is a B.Com
graduate from Loyola College,
In FY18, 61 per cent of your revenue was from replacement
Chennai. He is also a Chartered
Accountant and a Cost Accountant market. What is your strategy to ramp-up revenue from the OEM
with professional interests both in segment?
finance and supply chain.He is fond of Our original equipment share is very close to about 28-30 per cent. If you really look at
macroeconomics and information sales of tyres in India also, it would be a similar ratio between replacement and OEM.
technology. But when you really want to grow, we have to ensure is that we increase the size of the

pie and not necessarily change the ratio significantly. So when we How do you plan to sustain your margins amid
increase the size of the pie, then it means we have to sell more rising crude oil prices?
tyres to original equipment manufacturers even to maintain the This is a very big challenge. To be honest, I don't think anybody
same ratio.Hence, we are doing a lot of work with the OEMs to can influence crude oil prices, and it is also very difficult to
get our products approved well in advance, so that when we add predict crude oil prices. You can understand the trend, you can
capacities we are able to supply tyres to them. understand the macroeconomic reasons for the prices in case of
any movement in prices, but it is difficult to sustain. What we do
Presently, you are a leader in Sri Lankan market. is that, we have a good procurement cover policy. What happens
What is your strategy to grow in other interna- is when the raw materials prices increase, it increases for
tional markets? everyone, so we are not in a disadvantageous position compared
to any of our competitors. Therefore, what is important is that
In Sri Lanka, we have a manufacturing presence. In Bangladesh business needs adequate time to react in the market. Therefore, it
also, we have some plans to set up a factory because these are is important for us to ensure that we give that much time for the
neighbouring countries. For all other markets, we export out of business to react in the market whenever the raw material prices
India. Therefore, we have not thought of manufacturing presence move up significantly.
in other locations, however, we certainly have plans to grow in
the international market. So step number one, we have set up a We are in a competitive market and CEAT is not a market leader,
specialty tyre manufacturing plant at Ambernath, which therefore, sometimes we have to ensure that we remain
commenced operations in October last year. This is an export- competitive in a market because we are not a leader for us to take
oriented unit, so whatever is produced there will be any initiative. So what we try to do is, we try to have good control
predominantly exported. Its export market is large. Secondly, we over costs, efficiency and overheads and try to minimise
are also adding capacity and some portion of that capacity is also discretionary costs whenever raw material prices increase, if we
for meeting exports of both passenger car tyres as well as truck are not able to support it with price increase, etc. So, we take
and bus tyres, in addition to specialty tyres. Therefore, currently these actions in addition to ensuring that we buy well and we
once we expand our capacity, we'll have that much additional give enough time for the business to change or react to the
volumes for us to export. market whenever the raw material prices increase

Interview C F O
S P E C I A L
Sanjay Upadhyay
Director - Finance & CFO, Deepak Nitrite
How has the role of CFO evolved over several years? How is CFO
in general influencing the strategy adopted by the company?
It is a fact that the role of CFO has changed over the past decade and it is still evolving
towards managing, growing and diversifying business. The number of CFOs has rapidly
grown due to the growing intellectual needs of the businesses. The evolution started
with presenting correct numbers, smart reporting, paving the way towards new
regulations for a healthy commercial world, installing of cost management and cost
leadership in an integrated ERP environment, managing working capital and capital
expenditure, enhancing return on capital and adhering to regulatory compliances etc.
CFO’s role has Gradually, the role did spread towards a greater involvement in the decision-making of
the business and came with an expectation towards providing deep and precise insights.
evolved from The commercial and financial considerations of all management decisions are vital to
enable the collective leadership to steer an organisation forward and this is where the
reporting numbers to CFO started having increasing strategic relevance.
managing businessa Today’s CFO fraternity is very different from what it used to be.
« They are able to partner their CEOs in creating a resilient but flexible business model
«They are analytical about data, regulations, business environment, competition;
which helps in effective facilitation of business needs
«CFOs now analyse their business model and ascertain how the model is amenable
towards adapting constant change
«CFOs are now very cautious about various known and unknown risks (e.g country-
specific risk, product/sector risk, product technology obsolescence risk, cyber risk,
Sanjay Upadhyay is an Associate etc) and they continuously find out ways to mitigate such risks
Member of the Institute of Cost «In recent times, lot of socio-economic-political changes have had severe impact on
Accountants of India. He is also a business and CFOs are now constantly striving towards establishing their business
Fellow Member of the Institute of in such a new regime
Company Secretaries of India. He has «Grasping future technological developments and application of AI in business
also completed Advanced «Developing, managing and retaining a focused team
Management Program from Wharton,
USA. He has vast experience in the What are the top three key challenges faced by you as a CFO?
areas of finance, accounts, commercial Kindly mention your top three priorities as a CFO in
and secretarial functions. He is implementing the business strategy and technology?
associated with the company since
The key challenges are:
1994. 1) Monitoring complexity and putting all the assets of the company into maximum

and best possible use for return maximisation chemicals offering low costs achieved with the support of low
2) Internationally, chemical industry is going through a funding cost, inadequate environmental norms and also
major change in terms of its geographical and regional government support by way of export/import incentives,
presence, catering to the world market from its region and whereas countries like India had to maintain sustainability
enhancing return to all stakeholders. In our country, our standards at higher costs. Now that the Chinese government has
positioning is such that we are endeavouring towards become stricter with respect to environmental norms, such cost
converting such a changing climate into a sustainable advantage disappeared, resulting in level playing field for the
opportunity. Indian chemical industry.
3) i) To grow our presence into petrochemical intermediates,
which we have embarked into now, through organic/ What kind of investment do you envisage for
inorganic route and thus creating a sustainable business FY19? What will be the company's focus areas
model. for the fiscal?
ii) To assess potential acquisition target and consummate
transaction with best possible funding option, wherever As you may be aware, we have entailed a capex of `1,400 crore
feasible. towards greenfield project for manufacturing phenol and
acetone. The project is expected to be commissioned shortly, in
The top priorities are: about couple of months. The greenfield project is now into final
«The organisation is in the threshold of a quantum jump, round of pre-commissioning activities. In view of the impending
which needs a very effective team with some of the finest commissioning, DPL’s leadership team is already in place and the
operating managers. I am concentrating on that currently. marketing team has commenced customer outreach
«Removing some of the potential limiting factors which have a programme. There is complete focus on operational readiness
tendency towards becoming impediments on growth plans, and flawless start-up, for which technology provider's team is
which we are currently working on. This includes application engaged at the project site.
of technology and innovation with the focus of creating and
sustaining a competitive advantage Apart from this, we are implementing brownfield expansion
«Making the organisation ready, in terms of financial projects across all business segments, incurring capital
flexibility, towards funding upcoming projects, which are expenditure of around `60–70 crore to take advantage of strong
going to bring in the planned quantum jump. demand, both globally as well as in the domestic market.
Please share with us your outlook on chemical Kindly highlight growth drivers for your com-
Intermediate space in which you operate? pany and the future prospects on the backdrop
of commissioning of phenol business?
India is the third largest producer of chemicals in Asia and
seventh largest in the world. As revealed by the National The commissioning of the greenfield project for manufacture of
Accounts Statistics 2017, the chemical industry constitutes 2.4% phenol and acetone is one of the foremost growth drivers in the
of India’s Gross Value Added (GVA). The chemical industry is a coming years. This project is set to commence commercial
critical component of the Index of Industrial Production (IIP) operations soon. This will make Deepak Phenolics Ltd the
and has 7.9% weight in the index. Its expansive portfolio of more company’s wholly-owned subsidiary as a market leader for
than 80,000 products makes Indian chemical industry one of the phenol and acetone in the country and also open up new
most diversified chemical industries in the world. According to a frontiers of growth for DNL. The outlook remains favourable as
report jointly published by FICCI and Tata Strategic phenol is finding new applications, resulting in increased local
Management Group, India ranks 14th in exports and 8th in demand, which has now crossed 320,000 tonnes per annum. As
imports of chemicals. the local supply is limited, the wide demand-supply gap is met by
increase in imports. Further, the availability of raw materials in
Based on properties and applications, India’s chemical industry the local market has eased considerably, while margins are
can be classified into seven major segments — bulk chemicals, improving. The combination of these factors is contributing to a
speciality chemicals, petrochemicals, pharmaceuticals, fertilisers, strong tailwind ahead of the commissioning.
agrochemicals and biotechnology. India’s chemical industry is
projected to double in size to $300 billion by 2025, growing at We are currently working on few downstream products of
nearly 10% annually, with specialty and agrochemical sectors phenol and acetone, and once we establish basic operations, we
leading the pace, thereby outgrowing the pace of growth of other shall bring in those products.
industries across the world. There are several other softer sides which have remained and
expected to remain strong growth drivers for our company:
We are witnessing encouraging opportunities across the «Sound corporate governance
chemicals and specialty chemicals landscape. China had been «Product portfolio to suit sustainable growth
the largest supplier of bulk chemicals for about last three «Sound environmental compliance leading to lapels like
decades, while it used to dominate intermediates and fine Responsible Care

Interview C F O
S P E C I A L
The environment is quite good for
financial services companies like usa
cyclicality of earnings in all businesses. is indicative of the growth. IIFL Wealth’s
The third is diversifying revenue sources PAT grew at 37% YoY to `103 crore. Our
with focus on financial services. assets under advice management and
distribution have grown 3% on Q-o-Q
Looking forward, which and 39% Y-o-Y to reach `1.32 trillion.
business segment in your
view will grow the fastest? We hired 14 bankers during the quarter,
taking the total number of bankers to
All three businesses have been doing 330, to further drive the growth
well. The environment is quite good for momentum. IIFL Wealth offers a broad
financial services companies like us. The range of product and services to
credit demand is good for the segment of participate in a larger share of the client
customers we are catering and the same wallet. This includes financial products
Prabodh Agarwal shows in our results every quarter. Our
wealth management business has shown
distribution, advisory, brokerage, asset
management, credit solutions and estate
Group CFO, IIFL fantastic growth and has achieved planning. We raised net new money of
leadership position in a short span of `25053 crore in FY18 versus `22535
time. I believe all businesses have crore last year.
tremendous future and should growth at
As a CFO of IIFL Holdings, a fast pace. During the quarter, the team garnered
what are your top three AUMs or commitments in excess of
strategic visions in the next Please give more details `4000 crore in wide-ranging products.
few years? about your company’s plan AIF assets grew 52% Y-o-Y to `11736
for demerger of three key crore. The total commitment in our
IIFL is one of the largest financial ‘Special Opportunities Fund’, which
services firms in India. We primarily
businesses? invests in pre-IPO and IPO situations, is
have three businesses – IIF Finance, IIFL We have announced the demerger of our now close to `8700 crore.
Wealth & IIFL Securities. IIFL Finance three key businesses earlier this year. The
has loan AUMs of `311.3 billion, which businesses are IIFL Finance, IIFL Wealth A new Affordable Housing Fund was
is retail-focused and diversified. and IIFL Securities. We believe each of launched during last quarter, which also
the businesses have achieved a certain received an outstanding response with
The products we offer are home loan, scale and size in terms of the total AUMs the commitment of more than `1360
loan against property, SME and micro or profit and, therefore, it is in a position crore. IIFL Wealth Finance, which offers
finance loans. IIFL Wealth is a leader in to stand on its own. loan against securities and margin
the wealth management industry with funding to high networth individuals,
assets under advise and management We believe that by separating them we grew its loan book 15% Q-o-Q and 85%
exceeding `1,40,000 crore. will allow them to grow to their full Y-o-Y to `6701 crore. Average lending
potential. We have filed the scheme with rate for this book is around 10.3%. This
IIFL Securities is India’s leading the stock exchanges and regulators. The kind of business growth is likely to
securities trading company. Marquee process would require approvals of the continue.
global investors like Fairfax, General regulators, shareholders and creditors.
Atlantic and CDC Group have invested After the approval, the scheme will be What is the most challenging
in IIFL Holdings, IIFL Wealth and IIFL filed with the ROC and then they are thing you faced in your cur-
Finance, respectively. We serve over four ready for listing. rent role?
million customers across the length and
breadth of India. Our three-pronged IIFL Wealth is amongst the top three Understanding intricacies of different
Vision 2020 is doubling, durability and wealth management companies in India. product lines (we have nearly ten
derisking. The first vision is doubling of Please share the growth outlook of the products in the NBFC and several
revenue between FY16 and FY20 and IIFL Wealth division. While I can’t give more in other businesses) was both
profit by 2.5X during the same period. you a future outlook, here is a glimpse to challenging as well as enjoyable. It was
The second is reducing volatility and wealth performance in Q4 FY18, which great learning.

The structural changes in graphite
electrode industry have led to shortage of
electrodes worldwidea
R Rustogi
Chief Operating Officer & Chief Financial Officer
HEG Ltd
As a CFO of HEG, what are your maintaining it going forward? influencing factor to increase the
top three strategic priorities? The industry has witnessed positive demand for graphite electrode globally
Invest for growth, enhance shareholders' development relating to trend in order including China has been the conscious
value and align finance and operational bookings. Earlier, the bookings would be effort to replace the highly polluting
decisions based on data for 12 months, which has come down to induction furnaces and small blast
3-6 months. This has led to reasonable furnaces since early 2017. We have
Currently there is surge in level of certainty on maintaining margins witnessed the continuity of the drive in
demand for your product safely for the next couple of quarters and 2018 and anticipate the same going
we do believe we will be able to maintain forward. This has resulted in large-scale
(graphite electrodes) and you these margins. There is a structural closing down of steel capacities in China,
are operating at more than 80 change in the supply scenario of the thereby reducing the export of steel to
per cent capacity utilisation. industry as a whole, thereby leading to the rest of the world by 40% to 50%.
Can you share your capacity healthy margins that will continue in the
expansion plan? near foreseeable future. Also, as the rest of the world is producing
approximately 50% of its total steel
The entire graphite electrodes industry is What are your plans to miti- (approx. 825 MMT) through the EAF
globally facing a tremendous shortage of gate the rising raw material route, wherein our products are used,
needle coke - one of the critical raw cost (needle coke)? the production of steel has suddenly
materials. We fully import this raw jumped up by 30 to 50 MMT in the last
material which is supplied by only three As mentioned earlier, the production 12 to 18 months. This has resulted in an
companies worldwide. Due to the raw and availability of single largest raw increase in demand of graphite
material dependency, the entire graphite material – needle coke is with three electrodes at a time when the graphite
industry is constrained in achieving its major suppliers only. Hence, we believe electrode capacities have been shut down
full utilisation. However, we are looking that that the prices would be mainly by around 25% globally.
at the possibilities to debottleneck governed by overall demand and supply
around 20,000 MT capacity at our scenario of graphite electrodes. Our On the supply side, there have been
existing plant and take it to 100,000 analysis of the industry dynamics in the permanent closure of nearly 200,000
MTPA. We are rigorously working on near future gives us comfort that we shall MTs of graphite electrode facilities in the
this project and should be able to take a be able to pass on the impact of increase past 3-4 years and most of them have
decision on this in the next few months. in prices of needle coke to the electric arc been dismantled/razed to ground. Also,
furnace (EAF) steel industry customer with the alternate use of needle coke into
We are also looking at opportunities in base. lithium batteries, none of the electrode
carbon adjacencies in the area of carbon producer is able to get their full
and carbon-related material, which is Please share your outlook on requirement of coke, thereby restricting
currently under evaluation. graphite industry for next operations between 80-90%.
two years?
Your operating margins in the These structural changes have resulted in
recent quarters were quite There is a structural change in the the demand growth exceeding supply
high. Are you confident of graphite electrode industry, both on the and hence shortage of electrodes
demand as well as supply side. The major worldwide.

Interview C F O
S P E C I A L
R K Chandiok
As a Director (Finance) of Director (Finance), National Fertilizers Ltd.
National Fertilizers Ltd, can
you please elaborate on
your top three priorities
during the next three years?
As a Director (Finance), my priority
area shall be to arrange funds for both
short term working capital requirements
for daily operations and long term loan
requirements for various energy
reduction schemes and other ongoing
capex schemes for upgradation of
electrical and instrumentation systems,
information technology, i.e.,
implementation of ERP, etc.. It will be
my endeavor to arrange funds by
negotiating better terms and lower
interest rate. For management of
working capital requirement and
associated costs, the focus shall be to
strengthen the system for timely
submission of subsidy claims with
Government of India (GoI), earliest
realisation of subsidy claims, reduction
in mismatch of cash flow and reduction
in avoidable expenses. As the fertiliser CFOs go beyond their role and bring
industry is highly controlled industry
and with the introduction of Direct strategic thinking into playa
Benefit Transfer (DBT), the timely
release of subsidy by GoI will play an
important factor in day-to-day working shareholders,recently a decision was taken instruments. A strategic position was
capital management. It shall be my to arrange funds for energy reduction taken to raise maximum funds through
priority and focus to arrange funds for schemes from a single large bank without Commercial Papers (CPs) at a cheaper
the working capital requirement at hiring agency for undertaking debt rate for three months and discharge/
cheaper rates so as to achieve cost arrangement and advisory services. It has repay them before the expiry the quarter.
reduction and cost savings through saved the initial processing cost by `5 Generally, it is seen that the CPs cost
effective utilisation of resources to crore and the negotiations with the bank higher if these are dated after the expiry
enhance the profitability and value of has resulted in getting rupee term loan of the quarter. The borrowing through
the company. sanctioned (more than `1000 crore) at a the CPs was 30% in FY 2013-14 and
pricing almost at par with AAA rated increased to 94% in 2017-18. As a result,
Can you highlight the strate- companies. Previously, strategic decision interest savings equivalent to 60 bps was
gic initiative which paid off taken was to restructure the existing achieved in FY18. It requires very
well for your company external commercial borrowings (ECBs) efficient and close monitoring. NFL
with new ECB with reduced all-in cost sparingly borrows short term loans/cash
during your tenure as a and restructured repayment by back credit from banks limits which attract
Director (Finance)? How did loading to match with the cash flow higher rate of interest. The bank limits
it help the company and also requirement/projections of the company are used for few days, i.e. till the old CPs
investors who have parked leading to saving in the interest cost. are replaced with new CPs in the next
their money in your com- quarter. The credit rating of the company
pany’s stocks? A strategic decision was taken to review was got reviewed and upgraded to reduce
and change the composition of short overall finance cost. The utilisation mix
For increasing the wealth of term borrowings through various of cash credit facility, commercial papers

and short terms loans, etc., was aligned As a CFO what are the key “Winner - CA Distinguished Achiever
to expected cash flows to reduce the challenges faced by you in – Public Sector Undertaking Award”by
overall cost of funding. achieving the company’s Institute of Chartered Accountants of
objectives? How did you India in January 2018.
A strategic decision has been taken and really overcome it?
implemented to introduce Dealer What are the long terms plans
Financing Scheme (e-DFS) to make The fertiliser industry is highly regulated to maximise the wealth of the
available cheaper loan at interest rate of and controlled industry and as such the shareholders?
8.80% p.a. to dealers as against their objectives of the company can be
general borrowing rate of around 10% to achieved through timely availability of the In the long term, action has been initiated
14% p.a. and will enable NFL to target finance for meeting the short term as well during the last two/three years to increase
saving of around `3-4 crore. as long term requirements of the the production and sale of industrial
company. In the scenario of budget products such as nitric acid (54% and 60%
Similarly through SBI, NFL introduced constraints with GoI for release of subsidy concentration), ammonium nitrate,
Vendor Financing Scheme (e-VFS) to and challenges of recently introduced sodium nitrate/nitrite, etc., to increase the
enable vendors to get realised their DBT system, the full year subsidy is not trading volumes of imported fertilisers
invoice value before due date presently at released in time leading to resorting of (DAP, MOP and AS etc.) multifold and
8.05% p.a. from SBI. It will result in working capital arrangement to meet the leverage the strengths of vast marketing set
lowering interest cost to NFL as credit day-to-day requirement for sustained up, dealers’ network and experienced
period of vendors has been increased operations of the manufacturing highly motivated marketing team. In other
and expected to save interest cost of company. The challenge is to arrange words, the share of non-urea business
`1.50 crore to `2.00 crore on per annum rupee funding for higher import of DAP/ which is having better potential for profits,
basis. MOP/NPK etc. as against buyers/ is being increased. As a result of constant
suppliers credit. In addition, arranging efforts, the urea versus non-urea business
Inter Corporate Deposit (ICD) Scheme timely funds for capex (equity portion) ratio has been changed from 99:1 to 88:12.
was developed after pursuing with many will require excellent management of
PSUs for availing short term funds at a liquidity. Thus, in a controlled industry CMD Manoj Mishra and board of
lower rate of interest as compared to STL/ where the profit margins are fixed and are directors have played key role in making
CC etc. At times, ICDs were raised at per/ eaten up by under-recoveries under the NFL a multi-product company under the
lower rate than overall CP cost. subsidy regime, cost control and cost Kisanbrand, implementation of the
savings are essentially required to various energy reduction schemes at all
In addition, various steps taken to reduce maintain healthy profitability levels. the units and diversification in trading
interest cost such as increasing credit activities. Thus, with implementation of
period of gas suppliers (expected to lower The timely availability of finance and at a energy reduction schemes and focus on
interest cost by `8 crore), payment of lower cost improves the profitability of the reducing the finance cost, NFL is
invoices only on due dates and company and as such holistic approach expected to achieve better results leading
introduction of Tripartite Facilitation was adopted to achieve reduction in the to increase in the wealth of shareholders.
Arrangement between bank, supplier and finance cost. The change in the mix of
NFL for timely payment of dues on due instruments by using higher volume of CFOs are believed to be
date in lieu of stand by LC arrangement at cheaper CPs, availing higher credit period people who only understand
very competitive bank charges as against from suppliers, used MIBOR/CD-linked numbers. What needs to be
costlier LC charges saving of `50 lakhs. In loans as against MCLR-linked loans,
addition, to improve profitability, NFL is negotiated lower rate with existing banks,
done to ensure CFOs in India
also taking action to monetise various idle adding new banks with lower rates, get their dues?
assets of the company and unlocking the insisted terms for repayment of loan CEOs are the face of the company and
potential income. In this regard, leasing of without prepayment premium/penalty providing leadership for growth of the
school buildings, land for gas station, yielded saving in finance cost to NFL. company, whereas DFs understand the
piped gas, petrol pumps, etc. have been Most importantly, after lot of persuasion numbers as well as the meaning and
undertaken. with DOF and DEA, Special Banking requirement of the overall corporate
Facility (short term loan) was got objectives as well. For this purpose, they
The policy for investment of surplus implemented for all urea manufacturers at go beyond their role and bring strategic
funds was also reviewed and revised for a cheaper interest cost of 1.75% p.a to the thinking into play by understanding the
optimising the return by investing company, pending release of subsidy for dynamics of products market and
strategically in FDs with public and want of budget by GoI. financial market so as to increase overall
private sector banks and mutual funds market share of the company without
within the guidelines. In appreciation of achievements, I bagged losing the margins.

Interview C F O
S P E C I A L
Kailash B Gupta
CFO, INOX Leisure Ltd
As a CFO, can you please elaborate on your top three key

priorities during next three years?
With the introduction of a wide array of alternative content, the exhibition business is
all set for a major disruption. The aim is to strike a balance between the growth levers of
the business and the core of the existing business. In the evolving regulatory landscape,
it becomes imperative to measure the political impact and its effects on the industry as a
whole. Accordingly, it is important that we have the overall controls in place, so that the
company is compliant with all the laws and regulations. Further, as an industry
representative, it also becomes necessary to put forward the industry-wide issues by
liaising with various government departments in a timely manner. As a CFO of a
company with such a high growth rate, it becomes important to manage the debt of the
company. The challenge is to strike a balance between the high growth and also the level
of debt the company can accommodate. The strategy would be to device an appropriate
finance structure which is most optimal to the organisation.
Can you highlight the strategic initiatives that paid off well for
your company during your tenure as a CFO with the present
company? How did these help the company and investors who
have parked their money in your company's stocks?
Today's CFO is a The following key initiatives were undertaken:
« We entered into a fresh deal with a few ticket aggregators which in turn led to an
financial strategist additional revenue of approx. `100 crore over a period of three years.
« We formed centralised procurement cell to take advantage of bulk buying, better
and business adviser rates and to maintain integrity issues
« We introduced multiple banking arrangement in the company and optimised the
to the CEOa loan mix from Indian and foreign banks, leading to substantial savings in the form
of lower interest rates
As a CFO what are the key challenges faced by you in achieving

the company's objectives? How did you really overcome these
challenges?
Businesses are constantly facing changes due to the technological progress and
unstable economic and political situations. The role of today´s CFO is fundamentally
changing. Their work does not end with passive control of numbers, revenues and

expenditures as CEOs/board of directors and other
stakeholders have a lot more expectations from their
performance. As a CFO the key challenges are:
Supporting growth while managing risk: In the current

scenario, growth is the main objective of the company. The
company has already signed 700-plus new screens which are to For me leadership is… all about managing the people,
be operational in the next few years. The company is also resources and time to translate vision into reality
looking at the growth by the way of acquisitions. The company For me competition is… to bring out the best version of me
relies on the CFO to help it drive the growth strategy from
mergers and acquisitions to geographic expansion and organic For me success is…a science. If you have the conditions, you
growth. I, as a CFO, interact closely with the business team and get the result
design various strategies for the growth of the business, while
managing the risk profile of the company. For me my team is…my strength and my support. Can’t
walk without team
Regulatory compliance: The critical need is to keep abreast of
potential new laws that will have an effect on the firm’s financial For me growth is…the result of constant effort and smart
bottom line as it remains a key challenge for any CFO. As a work
CFO, I see the same as an opportunity wherein the new
strategies can be put in place and the same can be used for the
competitive advantage for the firm.
Technology and innovation: With the advancement of new

technologies, the CFOs are expected to look for new ways of the organisation through my expertise and skills. For me, this is
working that could involve overhauling business models and the best publicity and I am absolutely satisfied with it.
operations in order to harness the opportunities that emerging
technologies offer. As a CFO, I closely co-ordinate with the CFOs are now recognised as business partners and are carrying
business team in general, and the chief information officer, in the business, regulatory and investor relations. They are
particular, to be able to adapt the latest technologies available. carrying greater responsibilities when it comes to creating value
We see the new technological advancement as enabler and aim for the shareholders. They will be seen as caretaker of the
to be the next technological disruptor in the sector. wealth of the shareholders in good and bad times.
Retaining and nurturing talent: Finding and retaining the

talent needed to drive finance teams is one of the most Numbers are the primary things that you play
important challenges for the organisation. Identifying the right with at work. People in the outside world
person for the job is one of the most critical aspect of people have a feeling that CFOs are the set of people
management. As a CFO, I have to ensure that the team has who only understand numbers and they are
right tools, skills and capabilities to arm the management with kind of far away from other aspects of life.
cutting-edge insights and analysis which can be used for taking How much is this true? What further needs to
informed business decisions. be done to ensure CFOs in India get their
Cost control: Controlling the costs will always be a priority for dues?
chief financial officers. I believe that the above statement was true a few years back.
With the ever evolving business landscape, the role of the CFO
has also undergone a drastic change. Today's CFO can be seen
as a financial strategist and business adviser to the CEO. It is no
We keep hearing about CEOs more through longer enough for CFOs to be reporting numbers and
media and other such modes of communica- managing financial function. In the current scenario, I see the
tion. CFOs apparently live behind the curtain CFO as a business person who also has a finance background.
but play a very crucial role when it comes to
wealth creation of the individual investors. Do I believe that the CFO in India must adapt to the changing
you feel deprived of limelight at times? How environment. While it is vital for the head of finance to have a
about CFOs being faces of the companies in deep understanding of the numbers, the CFO now has a much
more central role in deciding strategy and communicating with
India in future? internal teams and external stakeholders. This is the age of
As a professional, the only ‘limelight’, according to me, is being business partnering. By adoption of the new role, I believe
recognised by stakeholders and delivering immense value to CFOs will get their dues.

Interview C F O
S P E C I A L
As a CFO, can you please elaborate on your top three key

priorities during next three years?
The top three key priorities are to maximize capital efficiency, optimize cost and
ensure business is adequately funded with a right mix of debt and equity.
Can you highlight a strategic initiative which paid off well for your company during
your tenure as a CFO with the present company? How did it help the company and
investors who have parked their money in your company's stocks?
The company framed a strategy to allocate more resources and focus on the K-12
content segment in FY2011-12 and embarked on an inorganic path to increase its
presence in this vertical. This strategy has played out largely as per plans and
resultedin the company growing at above 30% CAGR in the last six years.
Our initial investor Everstone Capital backed us on this strategy right from the start
Saurabh Mittal and made healthy returns with a part exit from our IPO in 2017.
CFO, S Chand & Company As a CFO what are the key challenges faced by you in achieving
the company’s objectives? How did you overcome them?
The key challenges include balancing allocation of capital and other resources to new
ventures which will pave the path for future growth without impacting the existing
business and ensuring margins are not diluted. The company must be disciplined
enough to allocate resources knowing that some venture would work and some may
not. The company has over the years invested into digital and service businesses, both
inhouse and outside, after understanding internal capabilities to spread the risk and
improve the probability of success in each of the ventures.
We keep hearing about CEOs more through media and other

such modes of communication. CFOs apparently live behind
the curtain but play a very crucial role when it comes to wealth
creation of the individual investors. Do you feel deprived of
limelight at times? How about CFOs being faces of the compa-
nies in India in future?
CFOs are not deprived This is no longer true, at least not for S Chand. The CFO is the face of the company at
of any limelight and various places including banks, financial institutions, credit rating agencies, taxation
authorities, other regulatory authorities, investors and even large customers and
are already the face vendors. All of these correspond first with the CFO and then with the CEO. As far as
public listed companies and companies where there is private equity or a foreign
of companies in partner, the CFOsare not deprived of any limelight and they are already the face of
companies in India.
Indiaa Numbers are the primary things that you play with at work.
People in the outside world have a feel that CFOs are a set of
people who only understand numbers and kind of away from
other aspects of life. How much is this true? What further
needs to be done to ensure CFOs in India get their dues?
With the changing regulatory environment, corporate governance and information
technology available today, the role of the CFO is much more than numbers. The CFO
has to be an integral part of any decision-making process, be it new product
development, new line of business, marketing strategies, new production units, hiring
of talent, mergers and acquisitions etc. Every aspect of the business has a financial
impact and there must be a buy in with the CFO for the same.

Restrictions on use of plastic should benefit BOPP
industry due to better recyclabilitya
The Government of India has recently Indigo machine. It provides excellent ink
issued revised guidelines in which adhesion and high quality printing results
provisions related to restriction on on finished products like wrap around
multilayer packaging has been broadly label applications.
taken out and substituted by provisions • Solid white PSA label films- It is a solid
related to further utilisation, collection and white film with high opacity and excellent
recyclability of plastic. In the new stiffness properties.
Neeraj Jain guidelines, the focus is on alternate usage of Further, BOPP films margins are also
plastic rather restricting production or expected to move towards normal level.
CFO, Cosmo Films consumption. Some state governments These factors, along with better internal
As CFO of Cosmo Films, what are your indicated restriction on specific plastic efficiencies, should facilitate better margins
top three strategic priorities? products (such as PET based bottles, and ROCE in coming years.
The top three priorities are: polythene based carry bags). None of these
• To facilitate company’s medium to long products uses BOPP, hence from Cosmo In FY18, you were running on 90 per
term strategy by enhancing share of Films perspective, it will not have any cent-plus capacity utilisation. Can you
specialised films, i.e., working towards impact. The provisions around restricted share your capex guidance for FY19E?
de-commoditising the business model. use of plastic in the long term should benefit
• Working towards close to zero net working BOPP industry as the same is better placed The company will focus on improving
capital deployment in the business (i.e. from recyclability perspective compared to financials in FY19, hence it would be
shorten the working capital cycle). other options. conservative in capital expenditure during the
• To facilitate company’s growth by ensuring year. Besides the already committed capex for
cost effective finance is available at all times. How would be the coming fiscal buying adjoining factory land and building,
different from the previous one? the company will enhance capacity in
Your EBITDA margin over the past few The company continues to focus on speciality vertical which is running close to
fiscals has been deteriorating. Can improving speciality films sale. In this full capacity utilisation. However, the overall
you tell us what factors caused this direction, the company is increasing capex size would not be high in this fiscal.
capacity of speciality products and has also
margin deterioration? Your view on What is your outlook on packaging
recently launched several speciality products
the same for FY19E? such as - industry for the next 2-3 years and
During FY18, sales volume grew by 25% with • Cosmo Synthetic Papers (CSP)- what will be Cosmo Films’ strategy
20% growth in speciality films. While BOPP Enhanced features such as quick drying to grow faster than the industry?
film margin continues to be volatile and has (labels, tags, maps, ID cards, tickets for
wiped out gains of volume increase and adventure parks, etc.) India as well as global flexible packaging
better product mix, our continuous focus on • Metalised label film- Mirror finish glossy industry is expected to grow close to the
improving operational efficiencies helped in film which can be printed with high twice the respective GDP growth rate as has
maintaining EBIDTA level in absolute value. speed flexo printing machine. been the trend during the last one decade.
BOPP film margin has been running low due • BOPP films for soap wrapping- Enhances As BOPP flexible packaging industry’s
to temporary demand and supply gap in the moisture barrier which helps to maintain growth is largely linked with India’s
domestic industry. As very minimal new consistent soap weight for longer time. consumption, which is running at low
capacity is expected in domestic industry in • Metalised velvet films- It is engineered to penetration (particularly packaged food
the next two years, we expect BOPP margins provide brilliant metallic look with velvet with low penetration in India), the industry
to improve towards normal level sooner touch to the laminated paper/paperboard should witness consumption-based growth,
rather than later. Further, the company is or package. particularly for food packaging. The
working towards expanding speciality and • Conduction sealing films- These are one consumer sector will be looking more for
improving internal efficiencies, which will side corona treated and other side heat product differentiation and value-addition.
de-commoditise and strengthen the business sealable, clear, laminated films for
model in the medium to long term. retortable lidding applications. The major We will be working towards twin strategic
application segments for these films objectives of enhanced focus on speciality
What kind of opportunities or risk do include dairy products, medicine and films and lower production cost for BOPP
you see due to plastic ban in many pharmaceutical industry. commodity products. These twin strategic
states? • Digital printable label films- These films goals shall always differentiate Cosmo Films
are designed for digital printing on HP from the competition.

Interview C F O
S P E C I A L
A healthier and leaner balance sheet

ranks high on management’s agendaa
exercise initiated two years back, we had How do you plan to encash
identified some non-core assets which we opportunities arising from
had planned to monetize. While we have various government initiatives
sold some such assets in the previous such as doubling the farmer's
financial year, we plan to dispose off some income and push for affordable
more assets in the current year. At this
moment, we don’t intend diluting equity
housing for all by 2022?
anymore. The ‘Kisan’ brand enjoys a strong recall
Amit Sudhakar Can you throw some light on
with its target audience in agri pipes
segment. That said, we have undertaken
CFO, Kisan Moulding your strategy to revive your several activities to improve our market
company’s bottomline perfor- share in the non-agri pipes and fittings
business. While our regular distributor/
mance? dealer meets help us stay updated with
Recently your company has «While we always had a reasonable customer demands, our internal R&D
raised around `59 crore. Can strong brand and good products, team work towards bettering our
you tell us how you will be aggressive capacity expansion during customer experience by developing
deploying these funds? Also, the economic downturn weighed products accordingly. For instance, we
do you think your company upon our performance. Over the last have recently developed self-locking
couple of years, the management has column pipes (patent pending), which
would be in need for addition- drawn up strategic turnaround plans could prove to be a game changer in the
al funds? and successfully implemented several agri pipes segment. Roping Amitabh
We raised ~ `59 crore via a preferential of them, as listed below: Bachchan as our brand ambassador
allotment of 5 million shares last year. « We have streamlined our business by would help drastically improve our brand
These funds were raised to meet our changing our product mix to focus on recall in all the segments and act as a
working capital requirements and selling high margin products. catalyst in widening our customer
and administration expenses. We have «High margin, niche products connect. We also hope to increase our
sufficient capacities to meet incremental (solvents, fittings, etc) were identified distributor/dealer network (currently
demand envisaged over the next couple and seasoned professionals were 500+ distributors and 30,000+ dealers
of years and hence we don’t expect to inducted in the organisation with the pan-India).
raise any funds for capex purposes. sole focus on growing those segments.
«We increased the number of SKUs You have reduced your debt
However, based on our expectations, and currently are amongst the largest, recently. Can you tell us what
growing sales would necessitate in terms of SKUs (+2800 SKUs) proportion of debt you are
increasing working capital requirements, domestically.
at the least. We have been constantly «We have addressed areas like working
targeting in your overall capital
working towards improving our balance capital, which needed immediate structure in the coming fiscals?
sheet and achieving a profitable growth. attention by raising funds via equity Reduction of debt was one of the strategic
This implies that some of the dilution. calls taken by the management.
incremental working capital needs «Non-core assets were identified and Accordingly, our term loan repayments
would/could be met by some easing up some (worth ~`14 cr.) have been have started from beginning of 2017, with
of debtors on our books. already disposed off in the previous a reduction of `20 crore every year. While
financial year with more in the sale it is relatively early to put a finger on the
Do you have any other plan to pipeline in the current year. exact debt number or gearing ratio that
raise funds other than fresh «We successfully automated our the company would be comfortable with
equity infusion? mother plant at Tarapur to improve going forward, a healthier and leaner
productivity and quality, while balance sheet ranks high on the
As a part of our corporate restructuring reducing our labour costs. management’s agenda.

We expect consumer durables
industry to grow in double digits over
the next 4-5 yearsa
interest cost, a one-time golden PAT margin to 4%-5% and we would
handshake with employees have continue to maintain the same going
substantially saved the cost, discontinued forward. The quarters consisting of Diwali
loss-making products like mobiles, grown and summer vacations would be bulky
in new segments like washing machines because of television sales during Diwali
and the pie of air-conditioners has been and air-conditioner sales during summer.
increasing. All these steps have resulted in
`23 crore profit for FY18 as compared to Due to rising disposable in-
Subrat Nayak the loss in FY17. We are the only large
Indian player in the consumer durables
comes and availability of credit
facility, the demand for elec-
CFO, Mirc Electronics Limited segment growing at good growth rates.
tronic is expected to rise. How
We are confident of growing at 20%
during the current financial year. do you plan to encash this
As a CFO of Mirc Electronics, opportunity?
what are your top three strate- You have reduced your bor- The rise in urbanisation and disposable
gic priorities? rowing significantly in FY18, incomes in rural and semi-urban areas
what kind of debt proportion has been very important factors for us to
Close involvement in strategy, fund- increase our sales. Moreover, given the
raising and investor relations have
are you targeting in total growing electrification across India,
become three major strategic priorities capital? availability of credit facility, demand for
for CFO in the current dynamic Our total gross debt has come down electronic goods and effective roll-out of
corporate world. The CFO plays a major considerably to about `50 crore in FY18 GST/E-way bills, we expect the
role in validating the many new strategic from `165 crore in FY17 on account of consumer durables industry to grow in
initiatives like expansions, diversification improved cash flows during the year and double digits over the next 4-5 years. The
and mergers and acquisitions by the fund infusion from Lucky Securities to penetration level in washing machines
company on the financial front. He needs the tune of `90 crore. We would be and air-conditioners is well below 5% in
to communicate effectively at regular debt-free company during FY19 once the India, and as compared to China and
intervals with investors. The cash flow warrants issued to Lucky Securities get other developed markets, penetration the
management at regular intervals and converted. Besides, we are in the process level is way below. This is the major
assessing the requirement for raising of divesting our non-core assets to the driver for increase in demand for
funds by way of debt or equity and tune of `100 crore, which will further consumer durables in the country. With
implementing the same to ensure smooth improve our cash flow situation in the increasing population of ‘double income,
functioning of the organisation. company. no kids’ in the country, the need for
consumer durables is increasing
Your company has witnessed Your operating margins have day-by-day.
turnaround in net profit for remained quite volatile in the
FY18. We would like to know last few quarters. What is your Can you tell us about your
what strategy helped you to view on the same for FY19E? divestment plan and how you
register this performance? will be utilising these funds?
The operating margins have improved in
Over the last 2-3 years, we have the last couple of quarters during FY18. We are in the process of divesting our
undergone a turnaround by having good We have reached EBIDTA margin of 8%, non-core assets across India worth `100
controls on our costing and revamping which is the industry norm and we would crore. We have identified these assets and
our operations by bringing in lots of comfortably maintain these margins. As have initiated the process for selling these
automation at the plant and working on consumer durables business is seasonal, assets. We will use these funds for our
expanding our distribution network. we have to look at year-on-year margins working capital purpose, which will
We have adhered to strict bottomline rather than quarter-on-quarter margins. reduce the debt even on our increased
approach, reduced debt and saved on At the upper level, we have reached our revenues in the coming years.

Interview C F O
S P E C I A L
With our enhanced business
model, we expect significant
improvement in earningsa
Leather in synthetic leather products expansion and modernisation. Thus,
looking at the demand potential from
Can you tell us about your these sectors, we are very positive on the
expansion plan to serve the US domestic market for PVC products. We
are currently present in 35 cities across the
and European market? How country and have the largest network of
Rishabh Agarwal will you fund this expansion? over 75 active distributors, which would
We are setting up a Luxury Vinyl Tile help us to capitalise on this huge
MD & CFO, Responsive Industries (LVT) plant in UAE. LVT is the fastest opportunity.
growing segment in flooring space. Its
As a CFO of Responsive Indus- market size is about $7 billion globally What kind of topline and
tries, what are your top three with USA and Europe being the key end bottomline growth are you
strategic priorities? markets. We are exploring UAE to set up targeting for FY19E?
our plant which would serve these
As a CFO, my top three strategic developed markets. We have enhanced our business model by
priorities are transparency, optimal use of discontinuing low margin segment of
free cash flow and communicating with What is your view on the economical vinyl flooring post Q1FY18
shareholders at large. Out of these three, domestic market for PVC and increased the share of high margin
optimal use of free cash flow is the top products that your company value-added products. We are expecting
priority as it is the only matter which can good growth rates in our new products
make or break any organisation. We have
offers? like Luxury Vinyl Tiles and R Leather,
enhanced our business model recently India is an emerging market for vinyl which is very close to real leather.
and are expecting a significant flooring and it constitutes only 2-3% of
improvement in earnings going ahead. So global demand. However, it is highly We would see significant improvement in
it’s very important for us to effectively use fragmented. The main demand drivers for EBIDA from the current 12% to 24% in
the funds for future growth for delivering contract sheet vinyl are healthcare, the next one year. At PAT level also, we are
return to shareholders. The third priority education, and sports infrastructure, going to report good numbers, as our
for me is to communicate with which are rapidly adopting this as depreciation is coming down and also our
shareholders on how the company is de-facto solution. In the healthcare space, interest cost from long term borrowings
growing and other aspects of the we are seeing large-scale adoption of vinyl would be zero after September 2108.
business. We have taken conscious flooring in both private sector and public
decision of discontinuing printed sector hospitals. In the education sector Your current debt-to-equity
flooring division which is a low margin too, as there is a huge demand for school ratio is at a comfortable level.
business in our portfolio of products. infrastructure in India, we are seeing this What is your target on the
This has really freed up lots of bandwidth as a big opportunity in public sector
and cash flows to concentrate on our schools. We also see a huge demand for
same in foreseeable years?
company’s growth. We are coming out vinyl flooring in transportation segment We will be long term debt-free company
with advanced and high value-added as the Indian railways and large number by September 2108 and from there
products like Luxury Vinyl Tile and R of bus body builders are in urgent need of onwards, we will be having small amount
of working capital to the tune of `160
crore and the utilisation of these limits
` We will be long term debt-free company would be in the range of `90 to `100 crore
at any given point of time. Considering
by September 2108 and from there onwards, the increase in profitability of the
company on account of increased focus
we will be having small amount of working on introducing high margin high
capital to the tune of `160 crore. a value-added products, the working capital
requirement also would be marginal.

Farokh P. Gandhi
Chief Financial Officer, Eros International Media Ltd
As a CFO of Eros International, what are your top three strate-

gic priorities?
Our top three strategies include having a strong topline growth, margin expansion
and continued efforts to maintain a conservative balance sheet while funding
company’s growth plan.
What is your outlook on media industry in India?

I think that the media landscape has evolved rapidly over the past few years. Changing
technology, increased bandwidths and internet affordability has changed the industry
immensely. People now have different viewing habits and are not just consuming
content from cinema and television, but also via other media like digital and social
media.
What are your key growth drivers?

We are redefining our portfolio mix and expanding margins by investing in content
driven films with higher return on investment potential and lower risk, in turn
making Eros less dependent on box office numbers. While we continue to believe that
box office will be important, monetising traditional revenues and making content for
our OTT platform competitive is an essential growth driver for us.
Changing technology, What kind of impact do you see on debt due to investment in
content-driven film? Do you have any internal target ratio for
increased debt-to-equity?
bandwidths and The investments in premium content and distribution networks we have made over
the past few years are now clearly showing in our financials. We believe in
internet affordability maintaining a conservative balance sheet and our debt-to-equity ratio as on March 31
was 0.25, which is below the industry norms.
has changed media What is the toughest aspect of being a CFO?

CFOs have to keep up with the changing dynamics of every industry which directly or
industry indirectly affect the business. The change in consumer preferences, behaviour,
viewership and pricing, to change in government regulations, everything has an
immenselya impact on the business and financial metrics. There are times when all the above
situations arise at the same time, so one needs to be patient and handle all matters
diligently.

Cover Story
NBFC STOCKS:
Should You NBFC
Add Them Housing Corporate
To Your Finance Loan
Retail
Portfolio? Loan Gold Loan
NBFCs have corrected sharply in CY18 MSME Transport

after outperforming in the previous 3 to
5 years. Yogesh Supekar along with Finance
Amir Shaikh analyse the prospects of
investing in NBFCs
N
on-banking finance companies (NBFCs) have uncertainty in the financial markets. NBFCs, along with the
been on the radar of investors over the past few broader markets, have taken a beating in CY18.
years. Indeed, many of the leading NBFC players
have turned out to be multi-baggers, viz., Bajaj NBFCs, apart from being an integral part of the Indian financial
Finserv and Bajaj Finance. While the sector has system, play an important role in nation-building by
been riding on decent growth trajectory over the past 3 to 5 complementing the banking sector in reaching out to the
years, it is worth looking at the sector afresh amidst increasing unbanked segments of the populace in the country.
Advances of the NBFC sector Banks’ funding to NBFCs

increased by 21.2 per cent increased 27 per cent during
and investments increased FY2018, while the banking
by 13.4 per cent. The PAT system’s credit growth remained
increased by 30.8 per cent in muted at 8 per cent for the
2017-18. period.
INTERVIEW
Prasanna Pathak Às of now, Mr. Market is happy to pay
Fund Manager - Equity premium for NBFC stocka
Taurus Mutual Fund
What is your outlook on NBFC stocks? Are you happy with Q1FY19 results so far?
Currently, NBFCs are witnessing cyclical pressures with respect Only two large ones have reported numbers till now. Both Bajaj
to their liability resources/profile. This time, however, the Finance and L&T Finance have reported satisfactory numbers.
situation is peculiar in the fact that the demand pipeline Both are highly diversified and their loan growth continues to
remains strong for majority of them and most of the NBFCs show healthy traction on a consolidated basis. The asset quality
have diversified businesses, competing against other financial remains stable and margins are stable. So, overall, it’s a healthy
institutions. For example, LAP is a product offered by banks, start for the results season.
HFCs as well as other NBFCs. So, the segments with demand
limits their ability to increase their yields. The availability of One important regulatory change that has happened this
information about the basic credit profiles is also quite quarter is the implementation of IND-AS accounting standard.
uniformly available. The better ones have developed good This has led to some volatility. With IND-AS implementation,
processes to assess the risk and mitigate it. So, to that extent, the probable losses have been upfronted and steady-state return
the entry barrier is low and the demand visibility is high. So, we ratios will be reflected from the current fiscal.
feel it will be a “survival of the fittest” market.
How do you expect Q1FY19 results for NBFC
The resilience of NBFCs has been proved again recently. stocks?
Catering to the more informal part of the economy, GST and On the growth side, most NBFCs will be a mark ahead of the
demonetisation had a larger impact on the NBFCs. But they banking system average growth. The margins could stagnate
have come out strongly. So, we tend to believe that despite the and may show pressure going ahead as the system rates rise.
regulatory and market challenges, most NBFCs have been Companies with more diverse liability profile will be better
nimble/agile and have sustained through the challenges. equipped to withstand the margin pressure. The asset quality is
expected to behave generally well for most of them. So, while
How are valuations for NBFC stocks? the Q1FY19 results should be strong fundamentally across, but
Most of them have not recovered yet from the fall seen headline could be volatile on account of IND-AS. For the
post-GST and demonetisation. So, it’s a mixed bag. The housing finance companies specifically, the competition is
valuations look high for the better performing NBFCs, which heated and the pricing power is very limited. The real estate is
have demonstrated a very high level of consistency and agility. also yet to pick up pace and hence we remain cautious.
But, as of now, Mr. Market is happy to pay the premium. Valuations are, however, not heated.
INTERVIEW
Nitasha Shankar `NBFC valuations are stretched at the
Sr. Vice President and Head of Research current levelsa
Yes Securities
Will NBFCs surprise on the earnings front in stocks from PSU bank stocks?
Q1FY19? We have been underweight on PSU banks for a while owing to
Non-food credit has grown at a healthy pace, albeit owing to a the concerns related to asset quality, recapitalisation woes and
favourable base effect on account of demonetisation. In weak business models. On the other hand, investors could
addition to this, favourable trends in consumer finance, auto certainly consider NBFCs in the affordable housing and
numbers, as well as positive traction in affordable housing consumer financing segments.
segment would help drive the topline for most of the NBFCs
lending to these segments. However, the rising cost of How are valuations looking for NBFC stocks?
borrowings can pose a threat to the NIMs. We believe that Valuations are stretched at the current levels. However, we
housing finance and consumer finance companies could yield believe that the capital markets would see volatility in the
positive surprises in the ongoing earnings season. months leading up to the state and general elections. Therefore,
any dips could provide a good opportunity to accumulate
Should an individual investor shift to NBFC quality stocks in the NBFC segment.

Cover Story
NBFC Stocks : 52-Week High–Low
While there were nearly 493 stocks that touched their respective
52-week lows in June 2018, the increasing number of stocks that
touched 52-week lows suggested that the broader markets are
Indian Accounting Standards (Ind-AS) is the new set of
nearing their bottoms. Similarly, in the list of NBFCs having accounting standards notified by the Ministry of
market capitalisation greater than `500 crore, we find that the Corporate Affairs (MCA) in 2015. The standard was
number of stocks touching their 52-week lows has increased applicable from FY17 to companies having net worth
manifold in the first half of July 2018. (refer table below). of `500 crore or more.
While most NBFCs touched their 52-week highs in January, However, NBFCs have been directed to prepare their
many NBFCs touched their 52-week lows in the first half of July books of account according to new Indian Accounting
alone. This indicates the massive correction that has taken place Standards (Ind-AS) from FY19.
in the NBFC stocks. The increasing number of stocks touching
their 52-week lows in July also indicates that the prices of many of Due to convergence of Ind-AS to IFRS, the companies
the NBFC stocks are bottoming out. which are having zero coupon bonds, structured debt,
preference shares on their balance sheet and a higher
Month-Wise 52-Week Low Data share of unstable fees and higher ESOP cost are likely
No. of Stocks to have adverse impact.
Month 52-week High 52-week Low
July 3 14 This convergence is also likely to change the way
June 6 8 companies do their business related to liabilities,
May 6 2 employee compensation, structuring their loans and
April 5 0 securitisation/assignment etc.
March 0 7
February 2 4 Housing finance companies (HFCs) are well-poised for
January 13 0 the changeover to new Ind-AS. On the other hand,
corporate lenders are likely to face challenges.
NBFC Stocks Hitting 52-Week Low In First-Half Of July
Company 52-week Low date
Indostar Capital Finance 13-Jul-18
Capital First 13-Jul-18
Greencrest Financial Services
Can Fin Homes
13-Jul-18
13-Jul-18 Maket outlook
PTC India Financial Services 11-Jul-18
The Investment Trust of India 09-Jul-18
Oswal Greentech
IDFC
06-Jul-18
05-Jul-18
Rishi Kohli
Vardhman Holdings 05-Jul-18 Chief Investment Officer & MD
Shriram City Union Finance 04-Jul-18
Reliance Capital 04-Jul-18
ProAlpha Capital
`Nifty has been climbing new highs and
LIC Housing Finance 04-Jul-18
Housing & Urban Development Corporation 04-Jul-18
SREI Infrastructure Finance 03-Jul-18
is expecting to touch a record benchmark of
NBFC Stocks Touching 52-Week Lows In July After Trading At 12500. If the trend persists, exhibiting a
52-High In January 2018 continuous upward trend, Nifty can cross
Name of the stock 52-week high date 52-week low date
Vardhman Holdings 05-Jan-18 05-Jul-18 the mark in the coming 6 months.
Motilal Oswal Financial Services 09-Jan-18 28-Jun-18 Meanwhile, the Midcaps have bounced back
IDFC 15-Jan-18 05-Jul-18
Capital First 15-Jan-18 13-Jul-18
and seem to have been corrected and
Reliance Nippon Life Asset Mgmt. 16-Jan-18 01-Jun-18 reinitiated brisk movements. In the present
Paisalo Digital 18-Jan-18 14-Jul-17 scenario, considering aspects from both the
HDFC 29-Jan-18 26-Jul-17
angles, Indian markets are on the way of
NBFC Stocks Hitting 52-Week High In First-Half Of July finding its luster and a bounce is clearly on
Company 52-week High date
the cards
Bajaj Finance Ltd.
Bajaj Finserv Ltd.
13-Jul-18
13-Jul-18
a
Where to focus in the NBFC space? Conclusion
We find that the RoEs for the consumer finance companies are NBFCs are expected to gain market share owing to the stress on
higher than the RoEs for HFCs. HFCs on an average are public sector banks. The digital disruption among the micro,
reflecting a couple of percentage points higher RoEs when small and medium enterprises is on the rise and NBFCs
compared to transport finance companies. Investors can hunt adopting advanced analytics solutions and technology may do
for opportunities in HFCs and consumer finance companies. well in terms of improving their market share.
Housing Finance Companies
ROE (%) The NBFCs are expected to perform in line with estimates in
Indiabulls Housing Finance Ltd. 25.5 Q1FY19. The results for the likes of Bajaj Finance and Shriram
LIC Housing Finance Ltd. 19.07 Transport, which are consumer-facing lenders, have been
Housing Development Finance Corporation Ltd. 18.57
better-than-expected.
Repco Home Finance Ltd. 17.27
Dewan Housing Finance Corporation Ltd. 14.17
Looking at the prospects for the NBFC sector going forward,
PNB Housing Finance Ltd. 13.15
Housing & Urban Development Corporation Ltd. 9.56
there is a good case for investors to include NBFC stocks in the
diversified portfolio.
Average RoEs 16.75
Transport Finance Companies Investors can focus on HFCs that are witnessing growth owing
ROE(%) to affordable homes and also identify opportunities in
Cholamandalam Investment & Finance Company 20.58 consumer-facing lending businesses. With heavy bouts of
Mahindra & Mahindra Financial Services 12.5 selling in mid-caps and small-caps in H1CY18, several NBFC
Shriram Transport Finance Company 13 stocks have shed their gains accumulated in 2017.
Average RoEs 15.36
Investors should scout for those stocks where the growth and
Consumer Finance Companies fundamentals are intact, while the stock prices have fallen more
RoE (%) than warranted.
Capital First 24.6
Bajaj Finserv 15
Definitely, there is potential for growth in the NBFC space, but
Average RoE 19.8 the valuations should not be ignored by long term investors. DS

Investment Horizon
QueryBoard Query-Specific
CHOLAMANDALAM INVESTMENT DEEP INDUSTRIES

I hold some shares of Cholamandalam Investment
bought at `1645. Should I hold or exit from a I have 100 shares of Deep Industries bought at
6-month time frame. `180. Kindly advice on this stock.
- Vinay Mestry - S. Kumar
HOLD EXIT
BSE/NSE Code 511243 / CHOLAFIN BSE Code 532760 / DEEPIND
Face Value `10 Face Value `10
CMP `1432.40 CMP `106.80
52-Week High `1,760.75 / Low `1,052.95 52-Week High `269.70 / Low `79.10
Your Current (12.64 per cent) Your Current (41.11 per cent)
Profit/(Loss) Profit/(Loss)
C D
holamandalam Investment & Finance Corporation is eep Industries Ltd caters to oil and gas industry. Its
part of Murugappa Group having interest in CV segment includes exploration and production (E&P) of
financing and loan against property (LAP) financing. oil and gas. In service business, the company is involved
As on March 31, 2018, the company’s AUM stood at `43,830 in workover and drilling rigs, natural gas compression and
crore, which has witnessed a growth of 20 per cent CAGR over natural gas dehydration.On the financial front, the company’s
the last 10 years. The company has transformed itself from net sales for Q4FY18 was at `79.1 crore, representing marginal
financing LCVs to financing of two-wheelers, tractors, increase of 5.6 per cent from Q4FY17. However, the net profit
construction equipments, cars, etc. Besides, the company also during the quarter dipped almost 20 per cent YoY to `18.6
started financing used and new vehicles. The NII for the crore. Looking at the company’s full year performance, net sales
quarter rose by 34 per cent YoY to `891 crore in Q4FY18 for FY18 rose almost 12 per cent YoY to `312.7 crore. The net
versus `665 crore in the corresponding quarter previous year. profit for the full year grew marginally by 4.7 per cent YoY to
The interest income for the company grew by 24.6 per cent `77.5 crore. The company is in the process of separating its
YoY to `1511 crore in Q4FY18. The provisions for the quarter services business and E&P business in two separate listed
rose by 40.6 per cent YoY to `73.6 crore in Q4FY18 as against entities. This will result in own management expertise and
`52.3 crore in Q4FY1. As a result, the net profit for the quarter financial and operational resources. However, Central Bureau
rose to `291 crore in Q4FY18 as compared with `219.6 crore in of Investigation (CBI) has filed a case against 13 officials of
the corresponding quarter previous year. Strong traction in ONGC and Deep Industries after complaint filed by ONGC’s
infrastructure and construction activity is expected to give vigilance department regarding contract worth `312 crore
boost to commercial vehicle cycle, which in turn would benefit awarded to Deep Industries in 2014 by ONGC for supply of gas
commercial vehicle financing. Being one of the largest dehydration units. In this case, Deep Industries has filed
commercial vehicle financing company, Cholamandalam is petitions with the high court in Hyderabad. we will have to wait
likely to benefit from this development. Thus, we recommend till the court gives its verdict. Thus, we recommend our
our reader-investors to HOLD this stock. reader-investors to EXIT this stock.
Readers are requested to send only one query at a time so that more readers get a chance. For complaints regarding non-receipt of
dividend, bonus, rights and other matters, investors may write to www.investor.sebi.gov.in
Company Name: DEMOCRATIZING WEALTH CREATION
Vol.
Vol.No.
No.31
33 No.18
No. 17
Query:
Send in your queries:
DSIJ Pvt. Ltd.
C-305, 3rd Floor, Trade Center,
Name: North Main Road, Near Axis Bank,
Opp. Lane No. 6, Koregaon Park,
Address:
Pune - 411001
E-mail: Email:[email protected]

IDFC BANK ADLABS ENTERTAINMENT
I have bought 1000 shares of IDFC Bank at `50 per
share. As long term investor, should I hold or Should I invest in the equity shares of Adlabs
sell ? Entertainment Ltd? Kindly advice me.
-Anil - Nilotpal Saha
HOLD EXIT
BSE/NSE Code 539437 / IDFCBANK BSE/NSE Code 539056 / ADLABS
Face Value `10 Face Value `10
CMP `40.00 CMP `34.85
52-Week High `70.35 / Low `35.85 52-Week High `88.50 /Low `31.75
Your Current (19.40 per cent) Your Current --
Profit/(Loss) Profit/(Loss)
I A
DFC Bank, a part of Infrastructure Development Finance dlabs Entertainment Ltd is engaged in the business of
Corporation Ltd (IDFC Ltd), is a private sector bank. IDFC development and operations of theme-based
Ltd received a universal banking licence from RBI in July entertainment destinations in India, including theme
2015 and started operations in October 2015. The bank serves parks, water parks and associated activities, including retail
corporate and private customers in India, including the merchandising and food and beverages. Its segments include
infrastructure sector that IDFC Ltd specialised in since its tickets, restaurants, merchandise, hotel and other operations.
inception in 1997. The bank offers fixed deposits, debit cards,
savings account, cash management and other services. IDFC Adlabs also owns and operates an integrated entertainment
Bank plans to build a network of more than one lakh points-of- holiday destination, Imagica, which includes a theme park, a
presence in the coming months to enable people across the water park, a snow park, a hotel and other associated activities
country to transact digitally. The private lender plans to set up like retail and merchandise, and food and beverages (F&B). Its
about 30,000 micro ATMs and about 75,000 Aadhaar Pay project is branded as Adlabs Imagica for the theme park
merchant points. While the micro ATMs function as a bank-in- component and Adlabs Aquamagica for the water park
a-box, most of the Aadhaar Pay merchants will be converted into component. The company also owns and operates Novotel
business correspondents and will deliver basic financial services. Imagica, Khopoli, a theme park-based hotel. It also owns and
operates a range of F&B outlets at Imagica, which include
IDFC reported a 76 per cent plunge in its quarterly profit due to Roberto’s Food Court, Red Bonnet, Imagica Capital, Zeze Bar
jump in provisions to cover bad loans. Its net profit stood at and Grill themed on an African Zulu village.
`41.93 crore ($6.3 million) for the quarter ended March 2018 as
compared with `176 crore a year ago. Gross bad loans as a On the financial front, the company posted net sales of `50.83
percentage of total loans stood at 3.31 per cent in Q4FY18 as crore in Q4FY18 as compared to `55.67 crore in Q4FY17. The
compared with 5.62 per cent in the preceding quarter and 2.99 company’s reported a negative PBDT of `17.47 crore in Q4FY18
per cent a year ago period. Provisions and contingencies surged as compared to a negative PBDT of `18.05 crore in FY17. Also,
to `242 crore in the March quarter from `4.8 crore in the same the company reported a loss of `40.07 crore in Q4FY18 as
quarter previous year. compared to a loss of `31.18 crore in Q4FY17.
On an annual basis, the company posted net sales of `236.29
On an annual basis, its operating income stood at `3056 crore crore in FY18 as compared to `238.29 crore in FY17. The
from `3030 crore in FY17. The company’s PAT declined to company’s PBDT loss widened to `62.75 crore in FY18 as
`859 crore in FY18 from `1020 crore in FY17. The bank’s EPS against `58.53 crore in FY17. The company’s net loss widened to
declined from `3 in FY17 to `2.5 in FY18. `155.17 crore in FY18 from a loss of `117.14 crore in FY17.
With the merger of Capital First, IDFC may finally be able to The company has a debt-to-equity of 2.73x. The company has
shed its image as an infrastructure finance company. The low interest coverage ratio. Further, the company has a negative
merger could be a way for the bank to build its retail book, return on equity of -22.98 per cent for the last three years. Also,
something it has been unable to do since becoming a bank. If the promoters have pledged over 63 per cent of their holdings.
an investor can wait for 5 years, then we recommend a HOLD on We don’t recommend a fresh entry in the stock. We recommend
the stock. our reader-investors to EXIT the stock.
(Closing price as on July 31, 2018)

Reviews
In this edition, we have reviewed Sanwaria Consumer and IFB Industries. We suggest our reader-investors to
HOLD Sanwaria Consumer and IFB Industries.
Change Scrip’s Movement

SANWARIA CONSUMER HOLD 39.91 Per Cent
CMP - `12.75
BSE CODE Reco. Price Face Value

519260 `21.25 `1
S
anwariya Consumer Ltd (SCL) was maida, besan, daliya, and soya meal etc.
recommended in volume 33, No.
10, dated April 16-29, 2018, under On the financial front, the company
the ‘Low Priced Scrip’ when the stock posted 4 per cent growth in net sales to
was trading at `21.25. The `1,200 crore in Q1FY19 as against
recommendation was backed by the `1,152 crore in Q1FY18. The PBDT of
company’s product diversification, the company for Q1FY19 has grown
robust financials and its tie-up with significantly by 78 per cent to `41 crore
Patanjali. versus `23 crore in Q1FY18. The net company has shown a steep growth as
profit of the company has jumped 77 per well, increasing by 117 per cent to `124
Sanwaria Consumer Limited is an cent to `32 crore in Q1FY19 as against crore in FY18 from `57 crore in FY17.
India-based fast-moving consumer `18 crore in Q1FY18. The company posted net profit of `84
goods (FMCG) food processing crore in FY18 as against `43 crore in
company. The company manufactures On an annual basis, the company’s FY17, a growth of 95 per cent.
and sells rice, edible oil and staple food revenue has grown by 43 per cent to
products, such as pulses, sugar, soya `5054 crore in FY 2018 as against We recommend a HOLD considering the
chunks, wheat flour, rice flour, salt, suji, `3,512 crore in FY17. The PBDT of the good performance of the company.
Change Scrip’s Movement

IFB INDUSTRIES HOLD 25 Per Cent
CMP - `1095.25
BSE CODE Reco. Price Face Value

505726 `1460.1 `10
W
e had recommended IFB components and tools to related
Industries in volume 33, issue machines, such as straighteners,
no 4 dated Jan 22 – Feb 4, decoilers and strip loaders.
2018 under Choice Scrip section when
the stock was trading at `1460.10. Our On the financial front, looking at the
recommendation was based on strong recently concluded quarter Q1FY19, the
fundamentals (virtually debt-free sales increased by 22.2 per cent YoY to
company), new product launches and `614.6 crore as against `503.1 crore in
IFB Industries’ focus on domestic the corresponding quarter previous year. Currently, the company has 422 IFB
production. The EBITDA grew by 56.2 per cent YoY exclusive stores and targets to achieve
to `32 crore during the quarter from 475 to 500 over the next three months.
IFB Industries’ operates in engineering `20.5 crore in the corresponding quarter Notably, with recent cut in GST rate from
and home appliances business. It has two last year. 28 per cent to 18 per cent, the company is
divisions: fine blanking and home planning to cut the price of the
appliances. The home appliances division The EBITDA margin improved by ~113 appliances by 8-9 per cent. This would
includes washing machines, clothes bps to 5.2 per cent in the quarter. The net result in further boost in demand for the
dryers, dishwashers, microwave ovens, profit during the quarter increased by electronic appliances. Considering all the
air-conditioners, chimneys, refrigerators, 104.6 per cent YoY to `14.2 crore as aspects, we recommend our reader-
modular kitchens, built-in ovens and against `7 crore in the corresponding investors to HOLD this stock. DS
built-in hobs. The fine blanking division’s quarter last year.

products range from fine blanked (Closing price as on July 30, 2018)

The recommendations provided in this column are taken from various market
Kerbside sources such as brokers, analysts, dealers and investment strategists, etc. These
recommendations may not be backed by strong fundamentals. Therefore we advise
readers to use their own discretion before investing in these recommendation
INDEX BASED TRADING

The Multi-Commodity Exchange of
MCX India (MCX), the country’s largest
BSE Code: 534091 commodity bourse, reported PAT
CMP: `881.70 below market expectations, which
was largely impacted by change in
valuation method of bond portfolio and lower other income.
MCX launched four more options in Q1FY19 on crude oil,
copper, silver and zinc. Among all options, the transactions in
crude oil are the strongest considering recent volatility.
Moreover, gold option turnover increased more than five-fold.
As per our sources, discussion with the regulators has started
for index-based trading in commodities and it is expected to
launch in this financial year. A big positive for the company.
BOUNCE BACK Bharat Forge, the

ROBUST RESULTS
Havells
Bharat Forge flagship company of
BSE Code: 517354
BSE Code: 500493 the Kalyani Group, is a CMP: `634.25
true world leader
CMP: `641 when it comes to
delivering innovative Havells reported robust
auto component solutions. The stock price of Q1FY19 results with
the company has seen correction on the back strong growth across
of worries about potential tariff actions. product categories
However, the stock is expected to bounce coupled with margin
back amid its positive FY18 performance expansion. If technical
with 37.5% and 20.8% topline and observations are to be
bottomlline growth. Q1FY19 too is expected believed, the stock could
to post 20% plus YoY PAT growth with robust witness further upmove
June sales growth, despite being a typically from the current levels as
weak month. Rating agency Credit Suisse too the stock has witnessed a breakout of a long consolidation
has upgraded the rating to ‘Outperform’ along with robust volumes. Hence, this stock could be looked at
forecasting FY19 to be very strong with for short term gains.
major engines likely to be firing.
AND FINALLY..
Lemon Tree Hotels
BSE Code: 541233
CMP: `78.25
This stock from the hotel sector has been buzzing this year as the occupancy
rate recorded highest growth over a decade as per a report. Moreover,
factors such as increasing disposable income has presented a rosy picture
for this sector. Among all the hotel stocks, the stock of Lemon Tree Hotels
looks attractive as it has presence in NCR, Bengaluru, Hyderabad and
Chennai, as well as tier-I and tier-II cities of Pune, Ahmedabad and
Chandigarh. It plans to enter new markets like Mumbai, Kolkata and Patna
and has a development pipeline of 3,000 rooms across 28 new hotels in 21
new cities. Along with this, the company focuses on ‘Value for Money’ and
offers attractive room rates for middle income domestic travellers. This hotel
stock could light up the fortune of your portfolio. DS
(Closing price as on July 31, 2018)

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Pvt MFs Have Excelled In 25 Innovative Story

Years, But Still A Long Way To Go The last issue of your magazine was very innovative as you
analyzed the mutual funds using technical analysis
methodology. Though I am not a pro in technical, I loved the
T
he mutual fund industry has come a long way since idea. I suggest you give an insight on some investment
1993, when the first private sector players entered the opportunities which can be used in down markets. I would like
space. In July 1993, Kothari Pioneer, a joint venture to read more innovative stories on mutual fund investments.
between Chennai-based Kothari Group and
US-based Pioneer Mutual Fund, was the first private sector - Nikhil Kulkarni
asset management company to get licence to launch MF
products. Prior to that, the MF space in India was largely Editor Responds: Thank you for appreciating our stories. It is the
dominated by government-owned institutions and banks. But endeavour of our editorial team to keep you updated on innovative
contrary to the general expectation that entry of private players ways of understanding mutual funds. We assure you that we will
would take the industry growth to the next level, the MF space continue to publish out of box MF stories for our readers.
remained a non-starter even after the entry of foreign firms
such as Morgan Stanley. For the next ten years, AUMs of the
industry grew at a laggardly rate of 10.5 per cent per year.
However, the next 15 years (2003-2018) saw a remarkable

increase in the AUM growth rate, growing at a rate of 21.5%.
Now, the mutual funds have emerged as the dominant vehicle
for the retail investors to channelise their savings. It is a result of
Content
all-round efforts by the regulator Securities & Exchange Board
of India (SEBI), which enacted the right kind of pro-investor
policies, and the industry body Association of Mutual Funds in
India (AMFI), which left no stone unturned to increase
Cover Story MF Page
2
awareness about the product among the masses. Not to Building A Winning Portfolio
mention that the emergence of technology has been a primary
enabler for better execution of transactions and growth of
investments. Going ahead, the industry AUM is expected to
grow by around 20% CAGR over the next five years to reach
`50 lakh crore. Technology will definitely play an important
Special Report MF Page
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role in supporting such growth, however, a right incentive Are International Funds
structure for distributors will play a prominent role in
achieving this growth rate. Being Good For Current Market
Environment?
One of the most important lessons learned in the last 25 years is
that there is no all-weather fund that will perform in every
economic cycle. Nevertheless, there are all-weather portfolios
that can help you to achieve your financial goals. Our cover
story this time goes deep into how to create a winning portfolio.
Goal Planning MF Page
8
You do not need exotic products to create your portfolio—it
can be done simply with equity and debt funds, along with the
right amount of cash.
Special Report MF Page
10
Robo-Advisory,
SHASHIKANT The Way Forward
DSIJ.in DEC 26, 2016 - JAN 8, 2017 I DALAL STREET INVESTMENT JOURNAL 1
MF page - 2
Cover Story
Building A
Winning
Portfolio
F
inancial independence, though desired by many, is among retail investors. These funds are categorised on various
achieved by very few. Making a winning and parameters. For example, in terms of size, these are categorised
sustainable portfolio will help you to achieve it. There as small-cap, mid-cap and large-cap funds, and in terms of
is no secret mantra or rocket science to attain your sectors, some of the categories include healthcare, information
financial independence early and securely. The technology, banking, real estate, etc. There are also funds that
formula is well researched, documented and open to all. The invest in equities of other countries known as international
only problem is, however, it is followed by very few. It requires a funds.
well-planned strategy and a disciplined approach. Garry
Kasparov, a Russian chess grandmaster, famously said, "If you According to SEBI’s rule, there are 10 types of equity schemes.
change your strategy frequently, you don't really have one." Depending upon the category, these funds invest in a given set of
Hence, you need to stick to the strategy to attain your financial stocks. For example, a large-cap fund needs to invest a minimum
goals. This story will illustrate the assets you need to invest in, of 80% of its total assets in equity and equity-related instruments
the ideal proportion of assets and how the proportion should of large-cap companies. Every category has its own risk-return
change with times. profile, which helps investors to select the right category of
equity funds that suits their own risk-return profiles.
Before going into the details, it is important to know the various
components that form the basic building blocks of your Debt Funds
portfolio. If you are a mutual fund investor, there are various This is probably lesser explored instrument by retail investors.
products available for you to choose from, primary among them Mutual funds that invests in fixed income securities are known
being equity and debt. Although direct investment in these as debt funds. Every individual debt is issued with a fixed
underlyings might help you, however, investment through maturity date, that is, the date when investors are repaid the
mutual funds is recommended as it requires lesser supervision principal amount of the bond. A typical debt fund, depending
and time on your part. Maybe we are biased and believe that upon its category, keeps on buying new funds to replace the
investing via mutual funds is the best route for most of the bonds that are maturing. Therefore, at any given point of time,
investors in most of the situations. Before we embark on the a debt fund might be holding some long-term bonds, some
journey of making a sustainable portfolio, we need to know intermediate-term bonds and some short-term bonds that are
about these two primary investment avenues available to us. nearing maturity. The weighted average term to maturity of the
cash flows from these funds also called duration determines
Equity Funds their category. For example, for a short duration fund, the
This is probably the most known category of mutual funds weighted average term should be between one year and 3 years.
68 DALAL STREET INVESTMENT JOURNAL I DEC

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Cover Story
Similarly, for a long duration fund, it should be greater than 7 It is easier said than done to invest in bond funds, as there are
years. The importance of the maturity period is that it is used as more varieties in bond funds than equity funds. The simple rule
a measure by bond fund investors to determine if a particular is to select a bond fund having duration (explained earlier) that
bond is appropriate for them, considering their time horizon matches your investment time horizon. For example, if you
and risk tolerance levels. The higher the duration of maturity, need money in the next three years, then you can invest in short
the more sensitive the fund would be to changes in the interest duration bonds that have duration of 1-3 years. You should
rate. Taking an example of fund with duration of 4 years, a avoid investing in bond funds that have a duration longer than
bond fund investor should expect a decline in their investment your investment time horizon. Also, do not try to time your
value by 4 per cent for every single percentage increase in the purchase/sale with interest rate hike/cut. Keep your investments
interest rate. Similarly, its value increases by the same in bond funds simple.
percentage in case the rate declines.
The next obvious question that may come to your mind is how
Why To Invest In Bond Funds much of your total portfolio should go into bond funds.
Having understood the bond funds, you might question why Although, a popular rule of thumb is to own your age in bond
should you be investing in them? The reason is that bond and funds. This means that if you are 30-year-old, you should invest
bond funds have a low correlation to stocks or equity funds and 30% in bond funds and 70% in equity funds. Nevertheless, this
hence they act as a stabilising force for your portfolio. For approach will not give you optimum results and you should
example, during 2008, when equity funds were down by consider factors such as your financial background, financial
anywhere between 35 per cent to 75 per cent, depending upon goals, risk tolerance and returns expectations to arrive at
the categories, bond funds during the same period on an amount you need to allocate to bond funds.
average gave positive return and the best medium-term debt
funds generated return of more than 20 per cent. Asset Allocation: The Cornerstone Of Successful Investing
Top 5 Funds based on one-year returns (2008) The most fundamental decision you will ever make in investing
is the allocation of your assets. How much should you own in
Equity Diversified Debt – Medium Term
stock, bonds and cash. Some of you might be thinking there are
1 Year 1 Year
Fund Name
Return (%)
Fund Name
Return (%) other investment avenues too like commodity, bullion, etc.
Birla Sun Life Asset Allocation Aggre. -35.68 Canara Robeco Income 28.62 Nonetheless, research shows that investments in stocks, bonds,
FT India Life Stage FoF 20s -40.7 IDFC Dynamic Bond Plan A 26.35 and cash have proven to be a successful combination of
IDFC Imperial Equity -43.03 IDFC SSI Inv Plan A 24.25 securities for portfolio construction and is a primary
UTI MNC -43.1 ICICI Prudential Income 23.56 determinant of your portfolio returns.
Sahara Growth -43.22 Birla Sun Life Income Plus 21.58
Some of the research shows more than 90% of the portfolio
The below diagram clearly shows why you need to invest in debt return is determined by allocating right amount of funds in
funds. The table summarises what would have been your returns these asset classes. In the year 2003, the Vanguard Group did a
(%) in year 2008, had you invested in equity and debt both in study using 40 years of data of 420 balanced mutual funds
different proportion. Although, an event like 2008 is rare, the which invests in both equity and debt. It found that 77 per cent
only problem is that such events do not come with warning and of the variability in return was determined by the asset
can pop out from nowhere and catch you off guard. Hence, a allocation policy of the fund rather than selection of individual
portion of your fund should always be invested in bond funds. securities.
Equity Holding (The number in boxes represents return (%) by holding equity and debt in various proportion.)
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
50% -8.14 -6.08 -4.02 -1.97 0.09 2.15 4.21 6.26 8.32 10.38 12.44
55% -4.84 -2.78 -0.72 1.34 3.39 5.45 7.51 9.57 11.62 13.68
60% -1.54 0.52 2.58 4.64 6.69 8.75 10.81 12.87 14.92
65% 1.77 3.82 5.88 7.94 9.99 12.05 14.11 16.17
Debt 70% 5.07 7.12 9.18 11.24 13.30 15.35 17.41
Holding 75% 8.37 10.42 12.48 14.54 16.60 18.65
80% 11.67 13.73 15.78 17.84 19.90
85% 14.97 17.03 19.08 21.14
90% 18.27 20.33 22.38
95% 21.57 23.63
100% 24.87
Numbers in green colour reflect 100% of your money is invested in a combination of debt and equity with varying percentages. Returns by debt and
equity are the average returns generated by these categories during 2008
4 DALAL STREET INVESTMENT JOURNAL I DEC 26, 2016 - JAN 8, 2017 DSIJ.in
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How To Design Your Wining Portfolio A middle-aged investor's portfolio (30’s to 40’s)
'One size does not fit all' so goes the adage, which is aptly Funds Dedicated to % of Assets
applicable in the case of designing a portfolio. Therefore, before Cash 5%
you build your portfolio, there are few basic questions you need Domestic Large Cap Equity 30%
to answer. First, you should know your goals, whether it is to Domestic mid/small cap Equity 15%
finance your home, child’s education or a vacation at one of the International Funds 10%
exotic locations abroad. The second question that need to be Intermediate-term bond 20%
answered is about your investment horizon. Short-term bond 20%
Depending upon the horizon, a right mix of assets is An investor nearing retirement (in early 50s)
determined. Stocks are usually unsuitable for short time frames. An Investor nearing retirement
Besides, you should know your risk tolerance as it imposes a Funds Dedicated to % of Assets
discipline in your investment and helps you resist performance Cash 10%
chasing. Diversified domestic Equity 20%
Diversified international equity 10%
Equity Portfolio Intermediate-term bond 30%
To get the maximum benefit of diversification, the stock Short term bond 30%
allocation should be further divided between various sub-
categories. This is because different type of stocks performs An investor in late retirement (late 50s and 60s)
differently at different points of time. Therefore, it is advisable Funds Dedicated to % of Assets
to have as many different types of stocks as is reasonable Cash 20%
practical. For example, the mid-cap and small-cap stocks, and Diversified domestic Equity 30%
hence the funds dedicated to these categories, are down by Intermediate-term bond 30%
10-15% in the last six months. In the year 2017, these stocks Short term bond 20%
were the darlings of the investors and some of the funds were
even up by 50%. Besides, cap-wise category, international stocks Track your progress and rebalance whenever necessary
are also another option that helps you to diversify your equity Making a portfolio is your first step towards achieving your
portfolio. In the last one year, the international funds have financial goal. The next step is to keep track of your progress and
generated return of 12 per cent. This return is better than many keep on rebalancing whenever necessary. Rebalancing is simply
other categories. the act of bringing your portfolio back to your target asset
allocation after it has drifted from the required or desired level
Bond Portfolio due to various factors including change in your financial goal or
The bond part of your portfolio should remain simple. A single age. For example, you are in 20s and 45% of your portfolio
low-cost short or intermediate-term good quality fund should comprises of equity diversified funds, but after a year, equity
be adequate in most of the cases. The only thing that you should prices have surged, and your equity portion reaches 55% of your
take care of is the duration of the bond should not be greater portfolio, so you need to sell 10% of equity portion to bring back
than your expected investment time frame to meet your goal. If to the desired asset allocation. Rebalancing forces you to follow
the duration of your bond fund is lower than your investment the classical investment rule, that is, 'sell high and buy low'. You
horizon, it reduces the chance of a negative return. sell your outperforming assets and buy underperforming assets.
This helps you to improve your portfolio returns as returns from
Finally, Your Portfolio any asset class tends to revert to the mean over time. This means
It is not only difficult, but also impossible to recommend a outperforming assets may underperform going forward, and
specific portfolio that suits everyone, as each investor is unique vice-versa. There are various methods of rebalancing your
and has unique needs and requirements. They may be different portfolio, which you can chose based on their suitability to you.
in terms of their goals, time frames, risk tolerance and their There are only two considerations you need to consider while
financial background. Nevertheless, the following portfolio rebalancing. The first is cost and the second is tax. You need to
may act as a guide to make a winning portfolio for you. You check the impact of these two to make your re-balancing fruitful.
may tweak it little bit here and there to make a portfolio that
suits you. It is assumed that you have emergency cash savings Making a winning portfolio is incredibly simple if you follow the
to the tune of 3-12 months of income. above rules. Create a diversified portfolio based on your goals and
A Young Investor's Portfolio (In his 20’s) age. Keep track of your investments and rebalance them whenever
Funds Dedicated to % of Assets necessary to stay on course. A simple thumb rule of your portfolio
Cash 5%
is it should pass ‘sleep test’. If you sleep soundly without worrying
Domestic Large Cap Equity 45%
too much about your investment, you have struck the right cord.
Domestic mid/small cap Equity 30%
There is no investment worth worrying about and losing sleep
Intermediate-term bonds 20%
over. The volatility in the market is its inherent nature—it should
not worry you too much, but you should live with it comfortably. DS
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Special Report
Are International Funds Being Good

For Current Market Environment?
The Indian equity markets have turned volatile in the last few months. In the same period, the Indian rupee has also depreciated
against the US dollar. DSIJ explains how you can use International funds to diversify your portfolio and gain from the falling rupee.
T
he recent market correction was just like a horrible What are international funds?
dream for the investors which has snatched their An international fund is a type of mutual fund which invests in
peace and offered a worry to the investors firms in countries other than the ones they reside, so these
regarding the returns they earn through the mutual funds are also called overseas or foreign funds. These funds are
fund investing and stock market investing. bit riskier as these funds invest in the foreign securities, but
these are poised to garner higher returns in the longer run.
In the recent months the major equity benchmark indices
Sensex and Nifty have recovered but still the mutual fund Categories to invest in International Mutual funds
schemes are facing challenges to perform. Then where should International mutual funds invest in three ways geographically,
investor invest, what are the potential opportunities for the thematic and direct.
investor. As of now if we see the equity funds from large cap,
mid cap and small cap space are been underperforming the By Geography - The international funds invest across the
benchmarks and even the stretched valuations of the stocks geography differently. For instance, Kotak US Equity Fund -
won’t allow them to give better returns in near terms. So, Direct (G) and icici prudential us blue-chip equity fund invests
investor need to curtail down their returns expectation from dominantly in companies/securities that are listed on the stock
the Indian equity markets. exchanges of in the UNITED STATES OF AMERICA. In the
same way Edelweiss Greater China Equity fund invest in the
But the question remains that how one can cope up with the securities from China. So, investors should always look where
situation how they can meet their financial goals for this to invest before investing in these funds.
instead investing more into the Indian markets one should look
into the investing opportunities in the developed markets. Sectoral or Thematic - Some of the International funds invest
in companies which are from a sector or theme which is
For this international fund are the great option for investors expected to perform well. For instance, Gold fund, Real estate
which allows them to take exposure in the foreign equities. fund, Agriculture Fund, pharma fund etc.
These funds are great options for diversification, but investors
should know how these funds work. Fund of Funds or direct investment - Some of the
MF page - 8
Special Report
international funds are fund of funds that is these funds invest will benefit with this. That is, he can gain even in just the
directly in the funds instead of the companies. In this case currency movements. Investor investing in the international
Indian fund manager just collect or pool of investment from fund invest in its local currency which is INR for Indian
investors and invest in their parent fund which is managed by investor which is further changed to other currency, so he earns
fund manager who is managing fund in the country where the returns on every increase the international currency where he
money is invested. So, these funds are the good options as the has invested.
fund manager who is managing the parent fund have a keen
knowledge of fundamental attributes. So current rupee depreciation also accounts for the wealth of
the investors if they invest in international funds. So instead of
So, now the question is does these funds are the good options redeeming existing equity investment one can invest in the
for now? Are these funds being beneficial of reaping returns in international funds with a moderate exposure of 10%-15% to
the current market situation. For this we need to understand just safeguard returns and push the performance of the
the current market situation and rupee depreciation and then portfolio. US focussed equity funds can be one of the best bets
we can conclude does these funds are good in current situation among the international funds to negate the impact of rupee
or not. depreciation.
First one need to understand what is a rupee depreciation and

what the reasons behind it? If we see the Indian rupee has So, with above analysis we can conclude that for now investing
declined almost by 8% since January to June 2018. This was in the international fund can be a good game for an investor
mainly due to the rise in crude oil prices, trade war between US but over exposure can be much risky, so investor should
and china etc. With this equity market have also tumbled in the allocate the assets as per the risk appetite. At the same time if
last 6 months. we see the performance level the category wont offer great
returns in the very long term so investors should remember
The Indian markets have a close relation with the Indian rupee that once the current downtrends turns positive one can look
and US Dollar. To analyse this relation we have gone through into investment avenues in the Indian markets. Below is the
the last 10 year movement of Nifty 50, US dollar and Indian performance of the various categories over the period of time.
rupee. And we have analysed that Indian markets follow and
negative correlation with the US dollar and positive correlation Fund Category 1 year 3 year 5 year 10 year
with the Indian rupee. And at the same time, we have also Equity: Large Cap 10.68 9.72 15.04 10.7
analysed the movement of the S&P 500 which is a major Equity: Large & MidCap 4.99 10.36 20.15 13.12
benchmark of US markets, it has a negative correlation with the Equity: Multi Cap 7.39 10.2 19.11 13.7
Indian rupee and positive correlation with the US dollar.
Equity: Mid Cap 3.57 10 25.01 16.01
Equity: Small Cap 0.52 12.21 26.79 15.73
Equity: Value Oriented 6.17 11.06 21.13 15.58
Equity: ELSS 6.54 10.04 18.94 12.8
Equity: Sectoral-Banking 3.43 10.78 16.58 13.01
Equity: Sectoral-Infrastructure -2.02 6.17 17.78 7.3
Equity: Sectoral-Pharma -3 -3.49 11.55 16.03
Equity: Sectoral-Technology 39.24 12.02 18.13 14.77
Equity: International 13.05 7.85 6.21 4.28
1-Year Net
Expense
Fund Category Return Assets
Ratio (%)
(%) (Cr)
Franklin India Feeder Franklin
Equity-
US Opportunities Fund - Direct 0.82 30.86 597.05
With this correlation if we consider the current market International
Plan
condition, with all the macro traps rupee has been depreciated DSP BlackRock US Flexible Equity-
2.03 25.2 190.82
which statistically indicates the good performance of the S&P Equity Fund - Direct Plan International
500 in the near terms. So, investing in the international funds Reliance US Equity Opportunities Equity-
1.75 24.06 16.59
could be a high return game for the investors. Fund - Direct Plan International
DSP BlackRock World Energy Equity-
2.53 23.67 21.67
Fund - Direct Plan International
The risks these funds have currency risk, but in the current DSP BlackRock World Mining Equity-
situation where INR is depreciated against US dollar, investors 2.14 21.82 35.92D
Fund - Direct Plan International S
MF Page - 9
MF Select
DSP BlackRock Tiger Fund - Direct Plan
Equity: Sectoral-Infrastructure 23%
Scheme Category *Expected Return In Next One Year
`1313 Cr 93.12 1.72% 1% for redemption

within 365 day
Expense Ratio (%)
AUM (`Cr) : 30 June, 2018 NAV (`) 27 July, 2018 30 June, 2018 Exit Load
Nifty 100 TRI Rohit Singhania, Jay Kothari

Benchmark Fund Manager
Reason for recommendation
Top 10 Holdings
This is an open-ended equity scheme, which seeks to invest in a
Company Name % of Net Assets
diversified manner by allocating funds to the stocks of
companies that can benefit from the ongoing structural changes ICICI Bank 7.55
and economic reforms in the country. HDFC Bank 7.43
Larsen & Toubro 6.94
The portfolio of the fund shows that the scheme invests across State Bank of India 4.61
various sectors, market capitalization and within the private Tata Steel 3.91
and PSU space. The scheme has invested 53% of its corpus in Yes Bank 3.24
large-cap stocks and around 47% in mid and small-cap stocks Ashoka Buildcon 2.74
with proper exposures to finance, construction and energy KNR Constructions 2.26
sectors. Sadbhav Engineering 2.08
Edelweiss Financial Services 2.04
The major holdings of the fund are in ICICI Bank, HDFC Bank,
Larsen & Toubro. With steady improvement in the asset quality of Larsen & Toubro is expected to benefit more in the coming
ICICI Bank, the stock is expected to perform well in the near-term periods. Moreover, the presence of stocks like SBI, Tata Steel, Yes
post management issues in the recent past. HDFC Bank with its Bank makes the fund attractive as these stocks are expected to reap
dominant position in the private banking sector is expected to better returns in the longer term. Therefore, we see this fund as a
benefit in the coming years. Going ahead, with the rural reforms, potential BUY opportunity for our valued investors.
Monthly Returns
Returns (%)
This might not be top ranked fund, however, looking at risk-reward opportunity we recommend this fund. * Expected one year return is based on the assumption that current holdings remain constant.
DSIJ.in DEC 26, 2016

AUG 06
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- 19,
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2017 I DALAL STREET INVESTMENT JOURNAL 75
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Goal Planning
Abhishek Agarwal
Director, Eastern Financiers Ltd
Simple Asset Allocation

Strategies For Varying
Risk Profiles
A
sset allocation is the single most important factor in MLP will differ from investor to investor as their risk capacities
ensuring financial success. In the broader sense, asset and risk attitudes can differ. For some investors, it can be 10%,
allocation includes a variety of asset classes like equity, while for others it can be 50% or even higher.
fixed income, gold and real estate. Of this,equity, fixed income The formula of equity allocation in terms of MLP is as follows
and cash/cash equivalents form the financial assets, while gold
and real estate form physical assets. For the purpose of simple Maximum Loss % + Risk Free Return
explanation, we will restrict to equity and debt. Equity Allocation (%) =
Maximum Market Loss % + Risk Free Return
Please note that your asset allocation should be specific to your
long and short term financial goals and your current financial What is the Maximum Market Loss? This is the worst case
situation. For example, if you are on a sabbatical from work for scenario for the market. For most investors, 2008 was the worst
a certain period of time, your asset allocation should be on the bear market in India. The Sensex fell by 60% from January to
conservative side with more of fixed income assets. November 2008. The asset allocation based on a 2008 like
scenario will prepare us for the worst.
On the other hand, if you are an entrepreneur and your income
is irregular, then significant cash equivalents like money in Let us walk through an example to see how the formula works -
savings bank account or liquid mutual fund investments is Let us assume that your maximum loss percentage is 20%, i.e.,
required to sustain during lean periods. However, equity you are ready to suffer 20% reduction in your total portfolio
emerges as the best asset class for long term financial goals. value without panicking even in a situation like 2008. Assume
Likewise, if you are nearing to achieve a goal timeline, then you the risk free rate (fixed deposit rate) is 8%. Your equity
should shift to fixed income assets so that your goal is not allocation based on Maximum Loss Percentage will be (20% +
compromised because of market volatility. 8%) divided by (60% + 8%) or 41%. This is the maximum
equity exposure you will have. Let us examine a scenario where
Let us now discuss few simple asset allocation strategies for the market falls by, say, 35%. Your asset allocation, as discussed
some generic risk profiles. earlier, is 59% fixed income and 41% equity. Your portfolio loss
will be (59% X 8%) – (41% X 35%) or -9.6%, well within your
Asset allocation based on Maximum Loss Percentage tolerable limit. Even if the market falls by 50%, your loss will
The concept of Maximum Loss Percentage brings some -15.8%, which is still within tolerable limit.
quantitative objectivity to evaluation of risk appetites.
Maximum Loss Percentage(MLP),as the name suggests, is the If you are young and have stable income, you can have a high
maximum portfolio (which includes both equity and fixed maximum loss percentage(50% or more), depending on your
income) loss than you can suffer, without causing any financial financial situation as you can afford to wait longer for market to
distress to you. Emotional or financial distress can cause you to recover and recoup losses. On the other hand, if you are nearing
trigger panic selling, which can cause financial loss. However, retirement or an important goal, you cannot wait for long and
MF Page - 11
hence you will have lower maximum loss tolerance. Asset Age-Based Asset Allocation Strategies
allocation based on MLP is quite practical as it is based on how The Rule of 100 is a popular asset allocation thumb rule. Simply
investors react in adverse situations and protects their interest put, you subtract the investor’s age from 100, and the result
in such situations. suggests the maximum percentage of equity investment. So, for
a 30 year old investor, this rule suggests that 70% of his/her
Good old strategy - 50/50 Asset Allocation portfolio should be invested in equities and so on. This model is
Some financial planners suggest this strategy of having equal ideally suited for a passive investor.
exposure to both the assets – equity and debt. It makes intuitive
sense, especially for new investors. In fact, hybrid aggressive Some financial planners may suggest that Rule of 100 can result
funds (earlier known as Balanced Funds) are supposed to work in sub-optimal allocation to equities in retirement years. They
on the same principle, even though in India the asset allocation may argue, age expectancy and longer retired lives and rising
of hybrid aggressive funds is around 65/35 for availing equity inflation require us to have higher allocation to equities.
taxation. Therefore, instead of Rule of 100, some suggest the Rule of 120
to take care of post retirement income needs. Let us see the
A 50/50 asset allocation strategy with asset rebalancing from asset allocation guidance for different age groups, according to
time-to-time can work well for investors with moderate to Rule of 120.
moderately high risk profiles. Age Equity Fixed Income
25 95% 5%
“Ration for the Worst Case” - Asset Allocation strategy for
30 90% 10%
senior citizens
Popular US finance author, Darrow Kirkpatrick, shared in his 35 85% 15%
blog an asset allocation strategy for senior citizens. He called it 40 80% 20%
“Ration for the Worst Case”. Though Kirkpatrick’s strategy is a 45 75% 25%
little too conservative, the beauty of this strategy is its simplicity. 50 70% 30%
Let us understand it through an example - 55 65% 35%
60 60% 40%
Suppose you are nearing retirement or just retired (at the age of 65 55% 45%
60), assume your retired life will be 30 years long and annual
70 50% 50%
expenses are `8 lakh. In this strategy, you will invest an amount
75+ 45% 55%
equal to 15 years (half of your retired life), i.e.
`1.20 crore in total (`8 lakh X 15) in low risk fixed income To conclude, you can choose a strategy or even try to mix
products, e.g. short duration debt fund. Let us assume that the various strategies and form a hybrid one that works best for
post-tax debt fund returns will at least match inflation rates, say you. At the end of the day, the best strategy is the one which
6-6.5%. Using this strategy, you can make annual/quarterly/ works for you.
monthly withdrawals from your debt fund investment to meet
your expenses for the next 15 years. So, irrespective of what
happens in equity market, you can comfortably carry on with
your inflation adjusted expenses for at least first 15 years.
The question is how will you meet your expenses for the next 15
years? This is where the equity allocation comes into play. The
beauty of this strategy is that there is no reliance on income
from equities for the first 15 years, thereby allowing it to
compound and create substantial wealth which can help meet
your income needs, for the rest of your life.
Why is this strategy effective? Because, this strategy not only
takes care of first 15 years of your retired life, but also creates
sufficient wealth for the next 15 years.
The writer is Director, Eastern Financiers Ltd., http://www.easternfin.com
MF Page - 12
Special Report
Robo-Advisory,
The Way Forward
F
ew years back, a lot of fintech companies appeared Then, sometime in the year 2012-13 came the fintech
on the Indian financial landscape. Many of them companies, who promised panacea from all these drawbacks by
were robo-advisory firms that wanted to automate offering robo-advisory services. The robo-advisors primarily
the entire investing process for an investor. The capture the basic details of the customers, and based on that
promotions of these firms were common in both information, determine an appropriate asset allocation along
electronic as well as print media. There were expectations that with suitable MF schemes, and then automate the entire
new investors, especially those who are internet-savvy and have rebalancing, tax harvesting, billing and reporting functions. It
higher earnings and savings, would flock to these firms, was supposed to democratise the investment management
attracted by low fees and the promise of solid returns and market. The services that were accessible only to those with
customised portfolio. These companies would automate their deep pockets was now available to everyone interested in
client’s investment process of selecting right fund, rebalancing financial planning.
of portfolio and tax-loss harvesting process to keep an investor’s
portfolio on track. Five years down the line, things have not shaped the way they
were expected to. Many of the start-ups in the field found their
Before these robo-advisors came into the picture, the financial enthusiasm misplaced and pressing the reset button was not
advisory was largely manual. Financial advisors use to assess easier. Hence, many of them are changing their strategy to
the risk profile of the investors, and based on that, they would survive and thrive.
recommend a portfolio. After that, advisors would also help the
investors with their transactions. Although everything was This can easily be seen from the latest report released by the
smooth, it had all the drawback that a manual system could AMFI on commission distributed by fund houses to mutual
possibly have. It was painfully slow process, there were fund distributors. The list is dominated by banks and few
inconsistencies in advice and, most importantly, it was not other corporates that have human interface rather than only
scalable. Hence, only a select few could afford the services. digital.
MF Page - 13
Name of the ARN Holder Gross Amount Paid (` Cr)

NJ lndiainvest Pvt 786.77
HDFC Bank 641.39
State Bank ofIndia 557.90
Axis Bank 537.71
ICICIBank 470.28
ICICI Securities 316.53
Kotak Mahindra Bank
Citibank N.A
274.29
248.96
Should
Prudent Corp. Advisory Services
Standard Chartered Bank
217.82
185.42
You Go
What went wrong? For It?
The reason for failure of these earlier robo-advisory firms may
be attributed to idiosyncratic nature of the financial planning
service. Earlier, the start-ups thought that technology alone can
be used to fulfil every need of the investor. But algorithm do
have their own limitations and cannot completely fulfil the Robo-advisory is still evolving and trying to find the right path.
essentials of a comprehensive financial planning. The human Nevertheless, you should not mistake it as yet another fad. In its
element is as much required as technology, which can only right avatar, it is going to be an important part of the financial
improve the efficiency of human being. Earlier avatar of the planning ecosystem, but it would happen over the long-term. It is
robo-advisory was offering products that were suitable to you, suitable for you if you are cost-conscious and do not want to pay
higher charges for advice. Although, these charges are expressed
but it lacked the fiduciary advice which not only offers a suitable in percentage and may look minuscule to you, over time, it will
advice to you, but also offers that which is in your best interest. help you to save an immense amount of money.
Besides, the operating cost of these firms were also very high. On
an average, they spent around `2500 to acquire a client. Even if Another important criterion is that you can start with a small
amount of investment as you do not need hefty bank balance
we assume revenue of 1.5 per cent of assets under management, a before going for robo-advisors. There is no mandatory minimum
back of the envelope calculation shows that every client needs to investment amount required from the investors.
come with an asset of `1,60,000 to break-even the acquisition
One of the benefits of opting for robo-advisors is that they do
cost. At the end of June 2018 on an average, the retail investor not suffer from any behavioural biases. They are expected to
had AUM of around `1.4 lakh, which is way below the required offer you a rational advice. In the case of human advisors or if
level to break-even. Initially most of the robo-advisory firms you do it yourself, there are chances that you may take decisions
were eager to acquire more clients rather than client’s assets, influenced by your behavioural biases.
which resulted into poor performance. Larger number of clients Going ahead, robo-advisors are going to be a big thing and will
with lower assets under management was not helping them. experience exponential growth in their assets under
management. According to a Business Insider Intelligence
The Future forecast, robo-advisors, including those with semi-automated
Now most of the robo-advisory firms have realised that the set-up, will manage investment products worth USD 1 trillion by
2020, which will go up to USD 4.6 trillion by as early as 2022.
road to profitability as standalone business-to-consumer (B2C) Moreover, the advances in computing, machine learning and
is long and uncertain. Therefore, they are changing their course artificial intelligence will make robo-advisors more acceptable
of action and want to break into the world of intermediation by due to better customised advices.
partnering with some established investment services players.
Having only digital presence will take them nowhere. The launched as a pure robo-advisory, but has since added human
delivery of service requires a human touch. The trend is visible interface to its offerings. In addition to this, they need to rationalise
internationally also where, Betterment, which originally their cost of client acquisition and servicing them.
MF Page - 14
MF Data Bank With Ranking

Key To Databank
T
he following table lists top-ranked equity funds based on
DSIJ's proprietary research methodology. We have Category Rank: Category wise ranking as on July 27th 2018
evaluated each funds underlying portfolio of stocks and Scheme Name: This is the name of the mutual fund scheme
NAV (`): Net asset value per unit of a mutual fund or an exchange-traded fund
ranked them based on their expected portfolio returns. This way
(ETF) on a specific date
we are also able to rank newly launched funds that are not rated
AUM (`Crore): This is the total market value of financial assets held by the mutual
by others due to their short duration of existence. fund scheme on a specific date.
We evaluate all the equity funds based on the changed ratings Weightage: Large-Cap: This is a percentage of total assets held by a fund in the
of their underlying stocks and the change in their prices. large-cap stocks as defined by AMFI for the current period.
Therefore, this list is quite dynamic and reflects the best possible Mid-Cap: This is a percentage of total assets held by a fund in mid-cap stocks as
return potential of the funds for the next one year. defined by AMFI for the current period.
You can use this ranking to create your own mutual fund Small-Cap: This is a percentage of total assets held by a fund in small-cap stocks as
portfolio. Depending on your risk profile, return expectations and defined by AMFI for the current period.
Total No of Companies: This is a total number of companies held by a mutual fund
overall asset allocation, you can add the best performing fund
scheme at the end of a specific month.
category to your portfolio. For clarity and to include more funds,
Expenses Ratio: This is the latest expense ratio disclosed by the mutual fund scheme
we have not included ‘Direct’ and ‘close-ended’ funds. You can Return_1Years: This is the past one-year return given by the scheme.
visit our website (www.dsij.in/mutual-fund) to know the latest Expected 1-yr return: This is based on our analysis of the portfolio of mutual fund
ranking of both ‘Direct’ and ‘Regular’ Funds along with equity- scheme and their expected growth in the next one year, assuming the underlying
oriented hybrid and close-ended funds. remains the same.
This ranking can also be used for reviewing different holdings Current Rank: Rank as on July 27th 2018
in your fund portfolio. Hence, a consistently laggard performer of Previous Rank of July 13th 2018 is shown under bracket ()
a category can be looked at as 'Switch' or 'Exit' advice.
Category Weightage (%) Return Expected DSIJ Current

NAV AUM Total No of Expense
Scheme Name 1 Years 1 yr return Rank
Rank (`) (` Cr) Companies Ratio (%)
Large Cap Mid Cap Small Cap (%) (%) (27 July 18)
Equity - Large & Mid Cap
1 ICICI Prudential Large & Mid Cap Fund 315.96 3120.00 49.61 29.45 8.64 65.00 2.09 2.42 19.06 43 (49)
2 Reliance Vision Fund 524.66 3076.00 59.55 37.59 2.35 34.00 2.18 -5.06 17.96 59 (24)
3 UTI Core Equity Fund 62.91 915.00 49.25 38.08 9.22 60.00 2.38 4.19 17.21 72 (109)
4 Franklin India Equity Advantage Fund 80.15 2745.00 59.99 30.99 5.72 50.00 2.13 5.25 17.17 73 (106)
5 DSP BlackRock Equity Opportunities Fund 218.04 5400.00 55.27 35.80 6.40 72.00 2.14 5.38 17.08 77 (68)
6 Mirae Asset Emerging Bluechip Fund 49.62 5351.00 45.56 35.31 17.00 66.00 2.09 5.14 16.79 82 (80)
7 Canara Robeco Emerging Equities 95.50 3510.00 42.41 30.54 20.44 65.00 1.98 9.56 15.75 100 (181)
8 Principal Emerging Bluechip Fund 108.66 1811.00 40.71 31.52 23.65 88.00 2.40 9.62 15.67 105 (164)
9 IDFC Core Equity Fund 45.78 2763.00 52.61 33.44 9.35 81.00 2.13 7.23 14.59 127 (193)
10 Invesco India Growth Opportunities Fund 33.98 672.00 62.13 32.27 3.08 40.00 2.49 13.65 14.30 131 (192)
Others - Index Funds/ETFs
1 Kotak PSU Bank ETF 309.59 66.00 78.60 17.93 3.37 12.00 0.49 -13.66 23.93 6 (1)
2 ICICI Prudential Bharat 22 ETF 35.55 5459.00 89.41 10.27 0.00 22.00 0.01 ** 21.08 24 (8)
3 ICICI Prudential Nifty Next 50 Index Fund 25.86 234.00 85.84 12.13 0.00 50.00 0.85 5.99 19.99 32 (45)
4 IDBI Nifty Junior Index Fund 22.01 52.00 86.95 12.04 0.00 50.00 1.74 4.49 19.33 36 (41)
5 UTI Nifty Next 50 Exchange Traded Fund 295.76 50.00 87.68 12.10 0.00 50.00 ** 19.17 39 (41)
6 UTI Nifty Next 50 Index Fund 10.39 214.00 85.85 11.86 0.00 50.00 ** 19.17 39 ()
7 DSP BlackRock Equal Nifty 50 Fund 10.11 125.00 99.65 0.00 0.00 50.00 0.91 ** 15.56 109 (152)
8 ICICI Prudential Nifty 100 ETF 121.75 39.00 96.16 1.70 0.00 101.00 0.49 12.25 12.14 169 (217)
9 IDFC Nifty Fund 23.13 113.00 98.53 0.00 0.00 51.00 0.27 13.57 11.20 182 (235)
10 IDBI Nifty Index Fund 20.79 210.00 99.62 0.00 0.00 50.00 1.76 11.55 11.00 188 (241)
11 Franklin India Index Fund - NSE Nifty Plan 89.30 239.00 99.24 0.00 0.00 50.00 1.08 12.36 10.99 189 (250)
12 ICICI Prudential Nifty ETF 116.92 907.00 99.44 0.00 0.00 50.00 0.05 13.87 10.97 190 (252)
13 ICICI Prudential Nifty Index Fund 108.67 326.00 99.80 0.00 0.00 50.00 1.00 12.64 10.97 190 (252)
() There are some blanks in the previous ranking column. This is because these funds were not in our last ranking as they have come into
existence recently, after the realigning of the funds with respect to SEBI's guidelines on rationalisation and categorisation of schemes.
** These funds are yet to complete one year
There are 74,624,230 accounts in the mutual fund industry as at June 2018,
of which 99.4% is accounted for by individual investors.
MF Page -15

14 SBI Nifty Index Fund 96.53 310.00 97.06 0.00 0.00 50.00 0.75 13.13 10.92 193 (254)
Hybrid - Dynamic Asset Allocation/Balanced Advanta
1 Union Prudence Fund 10.20 566.00 56.63 33.14 4.35 94.00 2.48 ** 16.78 83 (75)
2 ICICI Prudential Balanced Advantage Fund 33.86 27877.00 43.60 8.45 2.59 193.00 2.15 6.68 15.23 117 (213)
3 Reliance Balanced Advantage Fund 86.90 637.00 50.00 19.81 0.67 44.00 2.50 3.83 14.36 128 (260)
4 IDFC Dynamic Equity Fund 13.22 983.00 48.37 17.82 11.09 79.00 2.49 8.99 13.35 151 (203)
Equity - Large Cap
1 JM Large Cap Fund 65.87 2219.00 77.95 2.93 0.30 81.00 2.39 4.66 18.04 57 (60)
2 ICICI Prudential Bluechip Fund - Institutional Plan 45.25 17427.00 88.29 2.28 0.03 62.00 0.93 10.85 16.61 87 (135)
3 ICICI Prudential Bluechip Fund 41.30 17427.00 88.29 2.28 0.03 62.00 2.12 9.72 16.61 87 (135)
4 Reliance Large Cap Fund 33.20 10126.00 78.05 17.81 2.91 49.00 2.32 8.45 16.51 90 (56)
5 Franklin India Bluechip Fund - Growth 459.73 7933.00 90.44 6.58 0.00 42.00 2.03 3.41 16.06 97 (155)
6 SBI Blue Chip Fund 39.05 19064.00 80.61 9.50 2.19 59.00 2.44 7.24 15.79 99 (122)
7 IDBI India Top 100 Equity Fund 24.39 398.00 86.76 5.31 0.70 44.00 2.98 2.61 13.80 139 (128)
8 HSBC Large Cap Equity Fund 211.62 686.00 98.28 1.15 0.00 32.00 2.47 8.76 13.45 149 (214)
9 UTI Mastershare 121.23 5195.00 82.13 10.62 4.07 49.00 2.04 11.29 13.15 156 (228)
10 Kotak Bluechip Fund - Regular Plan 232.39 1322.00 80.57 9.60 7.25 52.00 2.24 9.23 12.95 159 (229)
11 Invesco India Largecap Fund 29.10 141.00 90.42 2.92 4.97 20.00 2.71 13.10 12.35 168 (259)
12 DSP BlackRock Top 100 Equity Fund 209.93 2836.00 99.49 0.00 0.00 33.00 2.36 7.47 11.97 172 (196)
13 Union Largecap Fund 10.80 309.00 89.44 7.05 0.00 30.00 2.59 5.57 11.05 187 (111)
14 Edelweiss Large Cap Fund 36.02 133.00 61.64 15.25 0.00 57.00 1.38 15.67 9.94 214 (298)
15 Canara Robeco Bluechip Equity Fund 24.47 122.00 92.07 2.38 0.00 32.00 2.51 13.29 8.29 226 (311)
16 IDFC Large Cap Fund 32.93 347.00 87.79 0.00 6.94 39.00 2.66 10.82 7.66 230 (320)
Equity - Sectoral/Thematic
1 ICICI Prudential Infrastructure Fund 49.26 1521.00 52.46 10.84 27.45 44.00 2.25 -1.56 24.10 4 (11)
2 IDFC Infrastructure Fund 16.09 1092.00 40.20 12.70 40.55 49.00 2.38 -3.26 23.93 6 (13)
3 Reliance Power & Infra Fund 101.57 1626.00 22.19 18.68 55.64 39.00 2.11 -2.59 23.26 9 (18)
4 DSP BlackRock Tiger Fund 90.39 1313.00 52.93 14.79 27.80 62.00 2.30 -0.87 22.68 10 (16)
5 Invesco India PSU Equity Fund 17.59 70.00 57.68 22.97 18.85 19.00 2.72 -6.49 22.57 11 (3)
6 ICICI Prudential Banking and Financial Services 61.76 2697.00 61.30 15.95 16.49 38.00 2.11 2.05 22.23 12 (19)
7 UTI Banking & Financial Services Fund 100.70 658.00 73.15 15.14 11.33 27.00 2.43 4.65 22.07 13 (25)
8 UTI Infrastructure Fund 52.66 1403.00 52.84 17.23 26.08 45.00 2.24 -1.40 21.72 14 (22)
9 Canara Robeco Infrastructure 45.60 130.00 51.01 9.46 35.53 25.00 2.50 -3.12 21.70 15 (12)
10 SBI PSU Fund 10.43 170.00 67.22 21.32 3.50 19.00 2.88 -12.08 21.26 23 (6)
11 Sundaram Infrastructure Advantage Fund 32.37 657.00 20.10 20.55 57.03 45.00 2.52 -0.46 20.71 25 (84)
12 Franklin Build India Fund 40.02 1156.00 71.99 5.95 16.11 34.00 2.35 2.72 20.62 27 (14)
13 Franklin India Opportunities Fund 74.39 626.00 68.86 12.70 14.02 36.00 2.61 4.79 19.59 34 (93)
14 Invesco India Infrastructure Fund 16.95 39.00 34.00 20.55 39.46 25.00 2.78 3.35 19.03 44 (31)
15 DSP BlackRock Natural Res. and New Energy Fund 32.87 412.00 78.24 8.95 1.65 21.00 2.71 2.81 18.81 46 (7)
16 SBI Infrastructure Fund 14.76 531.00 30.83 3.44 51.23 20.00 2.69 0.74 18.48 51 (50)
17 Invesco India Financial Services Fund 55.02 124.00 75.49 11.35 11.31 21.00 2.75 6.86 18.34 55 (62)
18 Franklin Asian Equity Fund 22.42 123.00 7.75 5.13 0.71 11.00 2.89 8.35 17.74 63 (122)
19 Sundaram Financial Services Opportunities Fund 40.23 149.00 79.02 13.43 5.80 22.00 2.80 2.41 17.06 78 (110)
20 SBI Magnum Comma Fund 36.84 290.00 54.30 23.16 18.50 24.00 2.80 1.41 16.64 86 (30)
21 SBI Banking & Financial Services Fund 17.12 509.00 60.85 23.03 11.17 19.00 2.70 15.28 16.15 94 (184)
22 HSBC Infrastructure Equity Fund 20.41 145.00 20.77 11.53 58.76 32.00 2.74 -10.39 15.91 98 (180)
23 UTI Transportation and Logistic Fund 118.90 1620.00 65.95 13.10 14.44 36.00 2.17 5.02 15.75 100 (211)
24 Reliance Consumption Fund 62.91 67.00 60.21 25.29 9.34 27.00 2.68 0.27 15.46 114 (199)
25 SBI Healthcare Opportunities Fund 114.65 958.00 36.70 27.40 30.55 24.00 2.54 -10.58 15.20 118 (174)
26 Mirae Asset Great Consumer Fund 34.11 397.00 53.69 24.85 17.50 41.00 2.70 15.49 14.83 125 (177)
27 Kotak Infra. & Eco. Reform Fund - Regular Plan 20.09 445.00 28.90 25.00 43.75 50.00 2.54 -2.70 14.34 130 (150)
28 ICICI Prudential Exports and Services Fund 58.01 701.00 62.14 3.34 25.92 22.00 2.50 8.76 14.03 136 (279)
29 Sundaram Rural and Consumption Fund 42.70 2540.00 45.92 17.38 28.46 62.00 2.17 4.65 13.68 143 (224)
Since December 2014, there is an increase in investor accounts from 4.03 crore
to 7.46 crore in June 2018
MF Page - 16
MF Data Bank
30 IDBI Banking & Financial Services Fund 10.11 186.00 5.86 0.98 0.00 4.00 3.16 ** 13.53 145 ()
31 ICICI Prudential FMCG Fund - Growth 237.54 408.00 60.79 17.43 13.25 25.00 2.89 16.64 13.23 153 (266)
Equity - Focused
1 Franklin India Focused Equity Fund 38.92 7356.00 67.25 10.67 11.11 27.00 2.08 3.86 18.55 50 (23)
2 Reliance Focused Equity Fund 47.39 4295.00 67.77 20.10 7.41 32.00 2.23 4.46 17.63 66 (59)
3 DSP BlackRock Focus Fund 23.41 2718.00 91.90 6.12 1.49 31.00 2.36 6.83 13.47 148 (145)
4 IDBI Focused 30 Equity Fund 10.37 327.00 74.32 1.99 4.54 27.00 3.09 ** 12.86 160 (227)
5 ICICI Prudential Focused Equity Fund 30.13 545.00 92.24 0.00 0.00 12.00 2.76 8.03 11.08 184 (198)
6 Principal Focused Multicap Fund 63.40 298.00 71.98 9.53 3.43 30.00 2.58 8.01 10.53 203 (281)
Equity - Mid Cap
1 SBI Magnum Midcap Fund 74.22 3521.00 0.80 65.34 30.24 45.00 2.52 -4.51 20.23 31 (65)
2 IDBI Midcap Fund 11.77 250.00 14.98 59.19 22.69 49.00 3.09 3.61 19.28 38 (53)
3 Kotak Emerging Equity Scheme - Regular Plan 38.85 3163.00 6.18 57.38 34.84 67.00 2.30 4.68 18.41 53 (91)
4 Invesco India Mid Cap Fund 48.70 179.00 12.71 54.87 28.45 40.00 2.73 10.93 18.38 54 (118)
5 ICICI Prudential MidCap Fund 97.04 1523.00 9.33 46.09 33.37 82.00 2.45 5.39 18.08 56 (95)
6 DSP BlackRock Mid Cap Fund 55.38 5266.00 12.12 54.48 29.45 60.00 2.16 5.39 17.77 62 (82)
7 Franklin India Prima Fund 965.84 6336.00 19.45 61.24 15.53 57.00 2.11 5.94 16.45 91 (141)
8 UTI Mid Cap Fund 106.68 3884.00 10.88 63.79 22.68 60.00 2.06 5.70 16.09 96 (124)
9 Sundaram Mid Cap Fund 491.86 6039.00 3.38 60.61 32.61 67.00 2.11 1.97 15.50 112 (145)
10 Sundaram Mid Cap Fund - Institutional Plan 517.36 6039.00 3.38 60.61 32.61 67.00 1.59 2.74 15.50 112 (145)
Equity - Small Cap
1 Sundaram Small Cap Fund 89.40 1173.00 0.00 0.64 92.59 49.00 2.38 -9.27 24.87 3 (36)
2 HSBC Small Cap Equity Fund 53.78 575.00 5.91 18.44 64.56 51.00 2.45 0.08 21.69 16 (44)
3 DSP BlackRock Small Cap Fund 57.64 5255.00 0.00 9.02 84.12 85.00 2.18 -6.09 21.69 16 (85)
4 ICICI Prudential Smallcap Fund - Institutional Plan 25.47 174.00 12.12 2.70 74.04 37.00 2.25 -3.74 21.55 18 (51)
5 ICICI Prudential Smallcap Fund 25.48 174.00 12.12 2.70 74.04 37.00 2.74 -3.67 21.55 18 (51)
6 Franklin India Smaller Companies Fund 57.22 7114.00 13.48 9.93 68.94 72.00 2.15 3.87 20.65 26 (83)
7 Union Small Cap Fund 15.08 305.00 2.73 19.88 69.23 47.00 2.82 0.33 20.49 28 (38)
8 Kotak Small Cap Fund - Regular Plan 74.09 804.00 7.94 19.03 71.30 61.00 2.43 0.13 17.89 60 (153)
Hybrid - Balanced/Aggressive
1 ICICI Prudential Equity & Debt Fund 127.13 28266.00 72.71 6.59 1.74 116.00 2.13 4.39 19.64 33 (35)
2 Franklin India Equity Hybrid Fund 116.41 2036.00 59.26 7.91 1.63 40.00 2.18 4.49 17.33 69 (91)
3 UTI Hybrid Equity Fund 169.70 6272.00 49.94 26.95 11.32 96.00 2.04 4.60 17.11 74 (126)
4 Reliance Equity Hybrid Fund 55.58 13593.00 64.53 8.29 4.96 59.00 2.24 5.86 16.11 95 (104)
5 IDFC Hybrid Equity Fund 11.74 1162.00 43.11 13.25 14.82 75.00 2.20 4.51 15.64 107 (189)
6 IDBI Hybrid Equity Fund 12.16 421.00 53.68 16.25 9.24 53.00 3.06 6.02 15.54 110 (197)
7 Kotak Equity Hybrid - Regular Plan 24.41 2030.00 40.90 14.24 24.94 64.00 2.20 3.50 15.09 121 (176)
8 Principal Hybrid Equity Fund 76.44 1408.00 53.57 11.77 11.15 69.00 2.74 10.21 13.35 151 (202)
9 Mirae Asset Hybrid Equity Fund 13.99 1213.00 63.29 9.65 1.46 62.00 2.15 7.63 13.05 158 (188)
Equity - Multi Cap
1 Reliance Multi Cap Fund 91.24 9270.00 49.02 28.58 21.82 54.00 2.18 5.23 16.85 81 (63)
2 ICICI Prudential Multicap Fund 287.59 2794.00 79.96 12.00 4.61 35.00 2.15 10.26 16.42 92 (87)
3 Invesco India Multicap Fund 49.34 524.00 37.06 22.28 37.89 41.00 2.72 8.87 15.72 103 (160)
4 IDFC Focused Equity Fund 39.82 1667.00 41.00 22.61 27.47 25.00 2.28 10.01 15.66 106 (127)
5 Franklin India Equity Fund 589.33 11470.00 73.13 13.67 8.28 49.00 2.04 4.62 15.63 108 (163)
6 HSBC Multi Cap Equity Fund 89.67 612.00 66.34 18.59 13.20 51.00 2.43 6.16 15.04 122 (149)
7 SBI Magnum Multi Cap Fund 48.03 5413.00 59.39 12.17 19.88 67.00 2.43 9.16 14.98 123 (161)
8 Mirae Asset India Equity Fund 48.61 7945.00 82.90 9.94 2.70 63.00 2.39 9.38 13.91 137 (175)
9 DSP BlackRock Equity Fund 38.64 2503.00 63.60 17.98 15.58 62.00 2.25 8.52 13.20 154 (218)
10 IDFC Multicap Fund 95.76 5484.00 38.67 30.73 24.39 65.00 2.14 8.45 12.42 166 (310)
11 IDBI Diversified Equity Fund 21.53 363.00 48.84 21.92 23.50 49.00 2.93 9.07 12.02 171 (309)
12 Motilal Oswal Multicap 35 Fund 27.28 13016.00 79.74 17.50 0.63 27.00 2.04 8.78 11.34 180 (76)
Equity - Value/Contra
1 SBI Contra Fund 110.12 1605.00 48.22 8.10 31.45 34.00 2.34 0.43 20.31 30 (57)
The ticket size for equity oriented funds is `154,506 per account at the end of June 2018
MF Page -17

2 IDFC Sterling Value Fund 54.33 2916.00 17.40 34.19 41.62 84.00 2.21 7.85 17.98 58 (115)
3 Templeton India Value Fund 264.10 568.00 51.41 26.29 19.78 31.00 2.58 2.97 17.35 68 (116)
4 Reliance Value Fund 72.97 3154.00 48.37 29.78 17.05 61.00 2.35 8.41 15.20 118 (207)
5 Invesco India Contra Fund 48.50 1868.00 70.28 10.10 15.74 39.00 2.24 18.38 14.25 132 (119)
6 Indiabulls Value Discovery Fund 12.57 47.00 10.42 18.44 46.86 34.00 2.79 -4.83 14.15 133 (232)
7 ICICI Prudential Value Discovery Fund 146.38 16281.00 74.47 9.81 4.72 40.00 1.99 6.11 13.88 138 (158)
Equity - ELSS
1 IDFC Tax Advantage (ELSS) Fund 56.88 1528.00 40.54 22.09 28.75 82.00 2.32 9.84 19.14 42 (120)
2 SBI Magnum Tax Gain Scheme 93 139.76 6080.00 69.77 10.94 12.94 65.00 2.31 0.93 18.62 49 (70)
3 HSBC Tax Saver Equity Fund 37.28 163.00 64.94 16.68 16.71 35.00 2.67 2.64 17.70 64 (133)
4 UTI Long Term Equity Fund 87.14 964.00 55.04 29.64 11.53 59.00 2.28 7.14 17.65 65 (102)
5 Franklin India Taxshield 560.09 3623.00 77.37 9.73 5.49 51.00 2.04 5.85 17.09 76 (139)
6 DSP BlackRock Tax Saver Fund 46.73 4218.00 68.15 17.56 11.12 70.00 2.07 5.63 15.75 100 (98)
7 Mirae Asset Tax Saver Fund 16.72 1024.00 69.35 19.56 10.66 61.00 2.26 9.66 15.26 116 (143)
8 ICICI Prudential Long Term Equity Fund 370.90 5218.00 74.07 11.07 13.59 47.00 2.28 12.60 14.98 123 (135)
9 Quantum Tax Saving Fund - Regular Plan 52.99 69.00 72.08 9.47 2.02 23.00 1.46 4.83 13.58 144 (221)
10 Union Tax Saver Scheme 24.46 216.00 74.53 9.60 12.23 43.00 2.58 7.28 12.09 170 (210)
11 IDBI Equity Advantage Fund 26.98 644.00 42.74 45.75 10.48 28.00 2.73 9.76 11.65 176 (323)
12 Kotak Taxsaver - Regular Plan 42.30 731.00 56.29 24.43 17.77 58.00 2.37 4.72 11.31 181 (238)
13 Motilal Oswal Long Term Equity Fund 18.45 1056.00 70.81 17.75 7.74 27.00 2.16 10.34 11.11 183 (100)
14 Edelweiss Long Term Equity Fund (Tax Savings) 47.22 73.00 63.18 19.16 10.41 54.00 2.58 7.07 10.26 211 (256)
Hybrid - Equity Savings
1 DSP BlackRock Equity Savings Fund 12.44 1652.00 49.48 24.56 7.55 126.00 2.29 4.28 20.43 29 (19)
2 Kotak Equity Savings Fund - Regular Plan 13.79 2180.00 23.55 7.97 2.24 299.00 2.30 8.46 19.39 35 (61)
3 ICICI Prudential Equity Savings Fund 12.99 2674.00 28.19 1.55 1.33 108.00 1.50 4.25 19.30 37 (48)
4 Principal Equity Savings Fund (Growth Accum) 35.10 76.00 48.35 24.91 5.99 61.00 2.79 4.39 18.94 45 (78)
5 Reliance Equity Savings Fund 12.75 2632.00 54.07 9.42 9.43 87.00 2.10 4.47 18.67 47 (55)
Solution Oriented - Children's/Retirement
1 ICICI Prudential Child Care - Gift Fund 137.01 592.00 51.15 16.72 4.31 35.00 2.50 8.32 16.77 84 (58)
2 UTI CCF Investment Plan 38.90 249.00 66.87 13.06 11.04 63.00 2.64 12.64 11.51 177 (264)
Hybrid - Multi Asset Allocation
1 ICICI Prudential Multi Asset Fund 253.09 11091.00 56.38 9.28 5.62 79.00 2.17 4.63 21.37 20 (27)
2 UTI Multi Asset Fund 33.67 947.00 54.95 12.10 5.94 57.00 2.31 4.49 15.18 120 (159)
Miscellaneous
1 Reliance CPSE ETF 26.71 4174.00 86.77 13.17 0.00 10.00 0.07 0.50 25.88 1 (5)
2 Reliance Tax Saver Fund 56.29 9545.00 58.84 16.95 20.86 59.00 2.23 -6.69 24.98 2 (10)
3 Reliance Banking Fund 278.23 2851.00 56.74 30.49 9.17 28.00 2.05 6.75 23.96 5 (21)
4 Reliance ETF PSU Bank BeES 343.18 97.00 78.81 17.83 3.34 12.00 0.49 -13.73 23.90 8 (1)
5 Reliance ETF Junior BeES 299.58 394.00 87.68 12.10 0.00 50.00 0.23 ** 19.17 39 (40)
6 Reliance Growth Fund 1099.25 6550.00 9.87 64.96 22.13 80.00 2.15 2.97 18.64 48 (100)
7 HDFC Prudence Fund - Regular Plan 491.98 36720.00 66.40 10.91 10.80 93.00 2.14 3.23 18.45 52 (46)
8 L&T Tax Saver Fund 38.77 30.00 47.28 22.14 30.26 43.00 2.63 11.22 17.81 61 (131)
9 Tata Dividend Yield Fund - Regular Plan 75.26 296.00 57.29 8.53 22.30 20.00 2.86 4.10 17.46 67 (145)
10 Aditya Birla Sun Life India Reforms Fund 19.68 100.00 55.92 23.88 12.37 25.00 2.86 9.88 17.11 74 (72)
11 UTI Multi Cap Fund 13.99 397.00 52.90 20.97 3.70 36.00 2.69 14.01 16.86 79 (144)
12 Aditya Birla Sun Life Special Situations Fund 25.71 181.00 57.20 10.55 29.33 52.00 2.70 15.78 16.86 79 (182)
13 Reliance ETF Bank BeES 2811.80 2667.00 95.58 4.18 0.00 12.00 0.22 11.07 16.77 84 (150)
14 HDFC Balanced Fund - Regular Plan 147.07 22109.00 49.11 10.31 13.27 91.00 1.92 6.97 15.72 103 (86)
15 Reliance Retirement Fund - Wealth Creation Scheme 13.64 1262.00 77.20 11.63 8.09 49.00 2.61 7.43 15.53 111 (155)
16 Invesco India Equity & Bond Fund 10.28 279.00 14.50 7.82 0.52 39.00 ** 14.65 126 ()
17 Sundaram Diversified Equity Fund 103.17 2624.00 48.22 32.99 16.02 67.00 2.28 3.12 14.12 134 (183)
18 Principal Dividend Yield Fund 53.38 146.00 61.83 11.59 18.82 58.00 3.02 12.66 14.11 135 (266)
19 Reliance Focused Large Cap Fund 29.90 1197.00 77.02 20.98 0.00 24.00 2.16 8.51 13.79 140 (71)
20 Principal Growth Fund 143.16 661.00 55.74 14.11 22.38 64.00 2.42 6.97 13.76 141 (170)
21 Principal Tax Savings Fund 210.50 379.00 58.63 14.54 23.62 63.00 2.50 6.89 13.74 142 (169)
All the NAV figures are for date July 27, 2018. Trailing returns are also calculated for the same date. AUM, weightage of a stocks , number
of companies and expense ratio are for the period ending June 2018. All the raw data is provided by Dion Global Solutions Ltd
Note : The funds in the data bank are now appropriately categorised as per SEBI guidelines, except for funds in miscellaneous category

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CONTENTS Vol. 33 No.

18 • AUG 06 - 19, 2018

12 Low Priced Scrip

Subscribers can access

Communication Feature sections

4 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

It is only logical to remain cautious about the markets

The way to invest in this market is to avoid short term

Invest smartly, invest regularly.

6 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

Vol. 33. No. 18 • AUG 06 - 19, 2018

DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 7

13th July 27th July Gain/Loss

8 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

The company’s motorcycle segment reported a 25 per cent growth in

RBI Surprises With 25 bps Repo Rate Hike

RBI’s monetary policy committee (MPC) cited impressive

BSE Investments Limited Acquires 24% Stake In

DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 9

TAKE THIS SOLUTION TO MAKE PROFIT!

On an annual basis, the operating

10 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

NURTURING MSMES FOR FAST-PACED GROWTH

On the financial front, the company

Rural growth driving demand The PBDT of the company increased by

Others 0 Interest 33.31 26.42 21.61 20.71 16.02

12 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

BSE CODE Volume Face Value Target Stoploss

T he owner of casinos (88.7% revenue)

hotels viz; Deltin Suites and Deltin Palms in

lacklustre Q1 was surprisingly good as

D ilip Sanghvi-promoted pharma company

14 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

16 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

BBTC LTD ............................ BUY ............................ CMP `1567.15

INDIAN BANK .......................... BUY ........................ CMP `358.20

18 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

SHOWCASING BLOCKBUSTER PERFORMANCE

20 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

of almost 10 per cent each YoY. The

22 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

The Dark Knight Rises!

24 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

Cerebra Becomes India’s Largest

26 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

CFOs' Top Priorities:

28 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

The IT landscape is on a digital

30 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 31

As a CFO of Indian Oil Corporation, what are your top three

32 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 33

Can investors expect ﬁnancial performance of Tata Motors to

How is the company planning to bolster up its topline? What are

34 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in

DSIJ.in AUG 06 - 19, 2018 I DALAL STREET INVESTMENT JOURNAL 35

Ensuring sustainable and profitable

36 DALAL STREET INVESTMENT JOURNAL I AUG 06 - 19, 2018 DSIJ.in