7TH JANUARY 2025

India Strategy SENSEX: 77965 ; NIFTY: 23616

Nandan Chakraborty Radhika Piplani Pankaj Kadu

(Dir) +91-22-42022501 (Dir) +91-22-42022698 (Dir) +91-22-42022562
Email: [email protected] Email: [email protected] Email: [email protected]
With DAM Capital, It’s Possible!
Investment Summary
➢ Near term to be UNCERTAIN due to A) 3QFY25 consumption & capex slowdown (but both expected to recover in 4Q), B) High
valuations & Trump uncertainty (affecting FPI flows & exports), C) Rate cut quadrilemma by new RBI Governor on Fed stance/
INR protection/ Inflation control/ GDP slowdown. Hence CY 2025 may be volatile as the above signals keep emerging
➢ Doubler Stocks: At this uncertain juncture, SMidCaps are generally most vulnerable. Yet, as one needs a shortlist of what’s long
term intrinsically sustainable, we identified stocks that can DOUBLE in 3 years (across market caps) based on their intrinsic
growth. Separately we provide our Best Large cap Buys on a 1-year timeframe
➢ Case for SMIDCaps: We cover valuations, growth, high growth subsectors, to make a case for SMIDCap investing, even in the
context of pockets of overvaluation of SMIDCap subsectors
➢ Slowdown: We analyse what led to the slowdown in Capex and Consumption and the case for recovery
 Consumption: Inflation (unlike the West where it depends more on interest rates due to housing & auto spends), depends
more on food, crude oil (& housing). Hence Consumption here depends on monsoons, government spend, temporarily on
easing of lending regulations, and industrial activity (employment). Consumption slowed down primarily due to inflation
driven by erratic monsoons in the short term, while GST-driven unemployment continues. With wheat/ rice (winter) sowing
being higher by 2%/ 5% as of 30 Dec, inflation to abate by March 2025
 Capex: Govt spend, global demand outlook, ease of doing business are as important as factors in other key economies such
as interest rates and government policy thrust on sectors. Due to elections, there was a mandatory hiatus in govt spend in
1HFY25. Capex in FY25 upto Nov declined 12% YoY; Oct-Nov rose 4% YoY. State Govt borrowing relaxation for 50Y interest
free loan in Q4FY25 is also a turning point in capex cycle. Recent private sector project announcements look optimistic
➢ Trump Impact: In this section we also note sectoral drivers that are MORE important vs. US policy changes which may affect us
➢ India: Why is the Indian market uniquely attractive, key India risks (each adversity provides investment opportunities),
MegaTrends: ecosystems around Energy Transition, Discretionary Consumption/ Lending, Manufacturing incl. defence/ EMS),
Infra buildup

PRIVATE & CONFIDENTIAL 2

14 DOUBLER Stocks in 3 years: *Silicon, Silicon everywhere, but …
➢ From our coverage (yet to cover power, infra and discretionary consumer services, and some segments of
capital goods), we shortlisted stocks that have upside and meet the PAT CAGR required to double in 3 years.
Our analysts then used their judgement to select high conviction ideas across market cap after adjusting for any
re/ de-rating. Refer company section on Profile/ Drivers/ Risks for these stocks
Mcap Mcap Price EPS (Rs) CAGR (%) PE (x) PB (x) RoE (%)
Company Name (USD m) Category (Rs) FY24 FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Glenmark Pharma 5,339 Mid Cap 1,624 (21) 49 65 81 LP 33 25 20 5.1 4.3 3.6 16 19 20
Sharda Cropchem 838 Small Cap 797 (7) 34 45 56 LP 23 18 14 2.9 2.6 2.2 13 15 17
Strides Arcolab 736 Small Cap 686 7 31 47 65 110 22 15 11 2.7 2.3 1.9 13 17 19
Entero Healthcare 713 Small Cap 1,406 9 30 42 57 84 46 33 24 3.4 3.1 2.8 8 10 12
Greenlam Industries 847 Small Cap 570 11 9 16 28 37 61 35 21 6.3 5.6 4.7 11 17 25
Radico Khaitan 3,920 Small Cap 2,515 20 28 36 47 34 91 69 53 12.2 10.6 9.0 14 16 18
Chola Invt & Fin 12,679 Large Cap 1,294 41 50 69 93 32 26 19 14 4.7 3.6 2.9 18 19 21
Ramkrishna Forgings 1,909 Small Cap 906 19 27 33 41 30 33 27 22 5.1 4.4 3.7 17 17 18
PCBL 1,903 Small Cap 433 13 16 21 27 27 28 21 16 4.0 3.5 3.0 16 18 20
JSPL 11,165 Mid Cap 939 58 43 78 117 26 22 12 8 2.0 1.7 1.4 9 15 19
Home First Fin 1,087 Small Cap 1,040 35 44 55 69 26 24 19 15 3.7 3.1 2.6 16 17 17
M&M Financial 3,901 Mid Cap 271 15 18 24 29 26 15 11 9 1.7 1.6 1.4 11 14 15
TVS Motor 13,362 Large Cap 2,414 44 57 73 87 26 43 33 28 11.4 8.7 6.8 30 30 28
PNB Housing Fin 2,716 Small Cap 897 58 71 84 105 22 13 11 9 1.4 1.2 1.1 11 12 13
Source: DAM Capital, Bloomberg Note: 1) LP=Loss to Profit; PL=Profit to Loss; NA=Not Applicable; 2) For Banks PB = Price to Adjusted Book Value; ROCE = ROA; 3) Mcap category as per AMFI
Price updated as on 06-Jan-25

* (with due apologies to the Rime of the Ancient Mariner): I read an amazing book recently “Material World”- Ed Conway, where he
explains in the Sand chapter how even though it is ubiquitous (Silicon= atomic no. 14, the most common solid element), each type
required for say construction, lenses, semiconductors, is different and may have to be imported from far far away. Eg desert countries
in the Gulf import construction sand from Belgium & Australia. Similarly, we curated the exact right sand from eclectic businesses here

PRIVATE & CONFIDENTIAL 3

16 Chessboard Pieces: 1 year Large Cap Buys: Don’t ask me which piece is the best!
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) RoE (%)
Company Name (USD m) (Rs) (Rs) (%) FY24 FY25E FY26E FY24/26E FY24 FY25E FY26E FY24 FY25E FY26E FY24 FY25E FY26E
Hindalco Inds 15,032 574 905 58 46 63 70 24 13 9 8 1.2 1.1 1.0 10 12 12
REC 15,726 513 755 47 57 60 69 10 9 9 7 2.0 1.7 1.4 20 20 20
TVS Motor 13,362 2,414 3,350 39 44 57 73 29 55 43 33 14.8 11.4 8.7 30 30 30
Tata Consumer 10,972 947 1,310 38 16 14 19 7 58 66 51 5.2 4.5 4.4 9 7 9
Indian Oil 21,863 133 181 36 29 13 17 (24) 5 11 8 1.0 1.0 0.9 25 10 12
Havells India 12,025 1,646 2,125 29 20 24 30 21 81 69 55 13.2 12.5 11.1 17 19 21
Reliance Industries 1,92,053 1,218 1,521 25 51 52 62 10 24 23 20 1.8 1.7 1.5 9 8 9
HDFC Bank 1,52,432 1,711 2,130 25 80 88 102 13 21 19 17 3.0 2.7 2.4 14 14 14
Hindustan Unilever 65,052 2,376 2,938 24 43 45 50 7 55 53 47 11.0 11.0 11.0 20 21 23
Chola Invt & Fin 12,679 1,294 1,600 24 41 50 69 30 32 26 19 5.6 4.7 3.6 18 18 19
Bajaj Finance 53,006 7,349 9,000 22 235 271 350 22 31 27 21 5.9 5.0 4.1 19 18 20
SBI 80,735 776 950 22 68 80 90 15 11 10 9 2.1 1.8 1.5 17 18 17
ITC 64,530 443 532 20 16 17 19 7 27 26 24 7.7 7.7 7.7 29 29 33
Bharti Airtel 1,10,773 1,588 1,907 20 13 33 45 88 124 48 35 8.8 7.8 6.4 7 17 20
ICICI Bank 1,03,978 1,264 1,465 16 58 67 76 14 22 19 17 3.9 3.3 2.8 17 17 17
TCS 1,72,631 4,095 4,730 16 127 135 150 8 32 30 27 16.4 15.4 14.5 51 52 55
Source: DAM Capital Research, Bloomberg
Note - 1) LP=Loss to Profit; PL=Profit to Loss; NA=Not Applicable
2) Price updated as on 06-Jan-25

PRIVATE & CONFIDENTIAL 4

Sectoral Stance, with largecap bias
2yr Fwd EPS 5Yr Rolling 12m Fwd Valns (x)
CAGR FY24 to
Sector Valn Metrix Current Trend Rationale
FY26E
Overweight
NSE Financial Services 14 PB 2.4 Below LT Avg Large caps undervalued. Key drivers expected: rate cuts, private capex & regulatory easing.
NSE Metal 36 EV/E 7.1 Above LT Avg Steel Capex, Aluminium pricing growth
NSE FMCG 6 PE 39.5 Above +1SD Rural recovery, Urban slowdown due to inflation (to abate with monsoon normalisation).
BSE Telecom Loss to Profit EV/E 9.6 Above LT Avg Improving cashflows, with tariff hikes and decelerating capex spends
Underweight
BSE Consumer Durable 26 PE 64.8 Above +1SD High competition
Reasonably valued. Still intensely competitive, but potential acquisition premium on small
Cement*
caps to remain.
High valuations but high growth as Govt capex picks up after pre-election hiatus & Private
BSE Capital Goods 25 PE 36.2 Above +1SD
capex kicks off. Highest growth & valuations in EMS
Neutral
BSE Oil & Gas -6 PE 10.3 Above +1SD Tactical play on OMCs, Upstream weak
NSE Pharma 17 PE 29.9 Above +1SD Prefer US generics & CDMO
Deals steady & conversion to revenues to improve, expect shift in US Inc. spends from
NSE IT 15 PE 28.4 Above LT Avg equipment providers to Services, USD appreciation, potential tax rate cut in US Inc. & our IT
subs.
NSE Auto 25 PE 22.0 Below LT Avg Rural recovery good for 2W & entry level cars, CV demand to improve with Capex
No Coverage
NSE Media 45 PE 21.0 Above LT Avg
BSE Power 15 PB 3.4 Above +1SD
NSE Realty 34 PB 5.3 Above +1SD
BSE Utilities 13 PB 2.6 Above +1SD
Source: Bloomberg Consensus; DAM Capital Research
* No Index available

PRIVATE & CONFIDENTIAL 5

Table of Contents

Section Page No.

1. Markets, Why SMIDCaps 7

2. Slowdown: Consumption & Capex 18

3. Trump- India Impact 24

4. Economic Overview & Risks 27

5. India Story: Uniquely Attractive, Transformations, Risks 32

6. Doubler Stocks – Rationale for each stock 39

7. Appendix 54

8. Valuation guide 60

PRIVATE & CONFIDENTIAL 6

Investment Banking

Capital Markets
1. Markets, Why SMIDCaps
Institutional Equities

With DAM Capital, It’s Possible!

7
Why SMidCaps remain attractive …

➢ Valuation: Midcap 150 and Small cap 250 at premium of 63% and 28% (vs. 5-year average premium of +34 and
discount of 6%) vs. NIfty; However, due to higher 2-year forward EPS CAGR of ~19% for Mid cap and ~18% for
Small cap vs. 12% for Nifty, PEG is at 1.2 for Midcap and 1 for Small cap vs. 1.5 for Nifty. As we near end of FY
25, this will seem more attractive. Of course there are pockets of severe valuation in certain Smidcap pockets
➢ Economic Transformation:
 Growth areas: India has been driven by core sectors (BFSI, IT, Energy & Commodities) – as the economy
transforms, as can be seen in the breakup of capex and distribution of consumption and wealth, there are
many high growth non-core dimensions e.g. tier 3/ 4 towns, renewables/ EMS/ textiles/ realty/ consumer
services incl. digitalized ones/ tourism, various subsectors of cap goods; represented better by SMidCaps.
 Ecosystem Control: With hard and soft infra (e.g. roads, e-infra, logistics) improving, the control of large
companies over their ecosystem (through captive infra like distribution and access to inputs like people/
finance/ markets) is decreasing, leading to many SMidCaps competing effectively.
➢ Medium term triggers which benefit SMidCaps relatively more:
 New US regime likely to increase Indian status as “US+1”, i.e. complementary products and services to
MAGA (eg making “lagging edge” chips in India), benefiting manufacturing and exports. Tariffs on China and
chaos in Bangladesh also help some exports.
 Input costs decreasing: Chinese slowdown + dumping on tariffs to decrease RM costs, Lower Energy costs as
renewable proportion increases.
 Government capex to resume after pre-election hiatus.
PRIVATE & CONFIDENTIAL 8
… Why SMIDCaps remain attractive

➢ Vulnerability:
 While cyclically, SMidcaps are more vulnerable to economic slowdowns (double whammy of revenues and
margins), STRUCTURALLY in India, there are many bottom-up entrepreneurial SMidCap plays whereas the
large caps are relatively more buffeted by global dynamics (BFSI, IT, Energy & Commodities).
 Many SMIDCaps had governance issues earlier; with increasing valuations, now promoters more aligned to
market cap imperatives.

➢ Consolidation: GST introduction resulted in a virtual wipeout of many SMEs (45% of Industry, 40% of
workforce, 40% of exports) who were benefiting from lack of taxes. The effect of resulting consolidation is
likely to be greater in key SMidCaps.

➢ Alpha: Indian equity markets have the longest tail (no. of stocks) in the world – fund managers, to get alpha,
have a far larger set from small caps to choose from vs. large or midcaps, since SEBI definitions are based on
order of market cap rather than value, ie top 100 for largecaps, next 150 for midcaps (particularly difficult for
midcap fund managers to manoeuvre with such a small universe), & the rest for small caps.

➢ Flows & AUM: Given that SIPs are a third of gross MF inflows (anecdotally more in SMidCaps) and growing,
and that pure SMidCap schemes (excl. those included in thematic, multi cap, etc.) are a fourth of MF equity
AUM, money will continue to chase SMidCaps as long as the momentum remains.
PRIVATE & CONFIDENTIAL 9
India’s growth story: Powered by consistency and robust RoE

Earnings Growth CAGR Average RoE

(%) (%)
20%
20%
18.4
16.4
14% 15.1 15.2
14% 16.2 14.0
15.2 13.8
14.3 12.6
11.3 11.5
12.0
10.4 8%
8%

6.3 6.8

2% 2%

(2.3) (3.0)
(4)% (4)%
10yr 5yr 2yr Fwd 10yr 5yr 2yr Fwd 10yr 5yr 2yr Fwd 10yr 5yr 2yr Fwd 10yr 5yr 2yr Fwd 10yr 5yr 2yr Fwd
Est. Est. Est. Est. Est. Est.

US (S&P500) MSCI EM India (Nifty-50) US (S&P500) MSCI EM India (Nifty-50)

Source: Bloomberg, DAM Capital Research

• India vs US: Earnings growth historically higher, immediate future slightly lower (but US growth dependent on new regime vs. continuity in India).
RoE marginally lower. US superiority in growth & RoE due to tech dominance. India’s multiple at 10% discount to US (vs. LT avg of 1% premium).
Tariffs & Currency Indian uncertainties
• India vs. EMs: Earnings growth historically higher but EM future growth higher due to low base & pivots on Chinese recovery. RoE ahead. Multiple
at 66% premium vs. 5-year average of 58%, justified by better RoE & consistent growth

PRIVATE & CONFIDENTIAL 10

India’s valuations vs. US seem bottomed, while consistently commanding a premium
over EMs in recent years

Nifty-50 12m forward PE, premium/(discount) to US (S&P500) Nifty-50 12m forward PE, premium/(discount) to MSCI EM

(%) Nifty Prem/ (Disc) to S&P 500 LT Average (%) Nifty Prem/ (Disc) to MSCI EM LT Avg 5yr Avg
60% 100%

80%
40% 66
60% 58

20% 40% 41
LT average at 1%
20%
0%

0%
(20)%
(20)%
GFC Crises
Covid Pandemic
(40)% (40)%

Dec-06

Dec-09

Dec-12

Dec-15

Dec-18

Dec-21

Dec-23
Dec-24
Dec-07
Dec-08

Dec-10
Dec-11

Dec-13
Dec-14

Dec-16
Dec-17

Dec-19
Dec-20

Dec-22
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12

Dec-23
Dec-24
Source: Bloomberg, DAM Capital Research

• India’s multiple trades at 10% discount to US (historically 1% premium). The only time it went below this level was during the GFC crises in 2008
and Covid-19 in 2020.
• Multiple vs. EMs at 66% premium vs. 5-year average of 58%, justified by superior RoE and resilient growth.

PRIVATE & CONFIDENTIAL 11

Consensus estimates strong growth beyond large caps; Small Cap valns lowest vs. growth

Indicators Nifty 50 Nifty Midcap 150 Nifty Small Cap 250

EPS CAGR (%)

Last 5yr 16.2 17.6 28.7
Est. 2yr Fwd (FY24 to FY26E) 12.0 18.8 18.1
Chg bps (Est. 2yr Fwd vs. Last 5yr) -417 121 -1,058
RoE (%)
Avg 5yr 13.8 9.3 11.3
Est. 2yr Avg (FY25 & FY26E) 15.2 12.9 14.0
Chg bps (Est. 2yr Fwd vs. Last 5yr) 138 357 275

PEG Ratio
FY26E 1.5 1.2 1.0
Source: Bloomberg, DAM Capital Research
Note: The table above is based on free float methodology

SMIDCaps offer a steady balance between fundamentals (RoE), Growth and valuations

PRIVATE & CONFIDENTIAL 12

SMidCap valuations high vs. history but cheap vs. forward growth

Nifty Midcap 150 12m forward PE, prem/(disc) to Nifty-50 Nifty Small Cap 250 12m forward PE, prem/(disc) to Nifty-50
Midcap P/(D) to Nifty (%) +1SD Smallcap P/(D) to Nifty (%) +1SD
Avg -1SD Avg -1SD
Last 5yr Avg Last 5yr Avg
35%
90%
28
25%
75%

15%
60% 62

5% 6

45% 45
(5)% -6
34
30% -9
29 (15)%

15% 13 (25)% -25

0% (35)%

(15)% (45)%
Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24

Source: Bloomberg, DAM Capital Research

Earnings growth in SMIDCaps is expected to remain strong, with consensus estimates an EPS CAGR of ~19% for midcaps and
~18% for small caps over the next two years (FY24 to FY26)

PRIVATE & CONFIDENTIAL 13

Large cap valuations around +1SD

Nifty-50 12m forward PE Nifty-50 12m forward PB

PE (x) +1 SD Mean -1 SD PB (x) +1 SD Mean -1 SD

25 4.5

19.6
4.0

20
19.2 3.5 3.0

3.0 3.1
16.2
15
2.6
2.5
13.2
2.2
2.0
10

1.5

5 1.0
Apr-06
Apr-07
Apr-08
Apr-09

Apr-14
Apr-15
Apr-16

Apr-21
Apr-22
Apr-23
Apr-24
Apr-10
Apr-11
Apr-12
Apr-13

Apr-17
Apr-18
Apr-19
Apr-20

Apr-07
Apr-08
Apr-09

Apr-12
Apr-13

Apr-17
Apr-18

Apr-21
Apr-22
Apr-06

Apr-10
Apr-11

Apr-14
Apr-15
Apr-16

Apr-19
Apr-20

Apr-23
Apr-24
Source: Bloomberg, DAM Capital Research

Nifty-50's forward PE is slightly above +1SD, while PB multiple is just below +1SD. Estimated EPS CAGR by consensus for the
next two years (FY24 to FY26) is ~12%. Sustaining these valuation levels will require strong earnings growth.

PRIVATE & CONFIDENTIAL 14

SMidCaps likely to perform better given growing SIP contribution

SIP collections vs. MF gross inflows MFs equity schemes AUM CAGR (Mar-19 to Nov-24)
MF Gross Inflow (Rs bn) SIP Collection (Rs bn)
Avg Monthly SIP Collection (Rs bn - RHS) Small Cap 43%
600 24
Sectoral/Thematic 43%

500 20 Dividend Yield 40%

Large & Mid Cap 34%

400 16
Mid Cap 34%

300 12 Flexi Cap 32%

Focused 28%
200 8
Value funds/Contra 24%

100 4 Large Cap 21%

ELSS 19%
0 0
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Multi Cap 3%
(upto
Nov-24) 0% 10% 20% 30% 40% 50%

Source: AMFI, DAM Capital Research

Despite a broader market downturn, SMidCaps have shown greater resilience vs. large caps. While Nifty-50 fell by ~10%, both
Midcap-150 and Smallcap-250 saw a lower dip of ~7% from respective 52-week highs. Given that SMIDCaps form a sizeable
part of SIPs & MF equity AUM (~24%), and a favorable valuation vs growth, SIPs are likely to continue to favour SMIDCaps

PRIVATE & CONFIDENTIAL 15

Market volatility due to bunching of paper supply

Equity paper supply vs Nifty-50 performance Nifty-50 avg monthly return vs. bunching of equity paper supply

Total equity paper supply Nifty MoM Perf (% - RHS)

(USD mn) 2.0%
9,000 36% 1.7%

1.5% 1.3%
7,500 24% 1.1% 1.1%
1.0% 0.9%

Nifty Performance
6,000 12%

0.5%
4,500 0%

0.0%
3,000 (12)%
(0.5)%
1,500 (24)%
(0.7)%
(1.0)%
> $5 bn $3 to $2 to $1 to $500mn <$500mn
0 (36)%
$5bn $3bn $2bn to $1bn
Jan-08
Jan-09
Jan-10

Jan-15
Jan-16
Jan-17

Jan-22
Jan-23
Jan-24
Jan-05
Jan-06
Jan-07

Jan-11
Jan-12
Jan-13
Jan-14

Jan-18
Jan-19
Jan-20
Jan-21

Money Raised
Source: Prime Database, Bloomberg, DAM Capital Research
Note: Equity paper supply includes, IPO, FPO, OFS, QIP, Rights and Institutional Placement

• Whenever equity paper supply activity cumulatively crosses USD 5bn in any month, Nifty-50 falls.
• With pipeline of ~USD 30bn in next 12 months (approved IPOs ~USD 3bn, IPO awaiting approval ~USD 11bn and QIP
announced ~USD 16bn) as of 20th Dec’24. However, bunching of paper could put pressure on the Nifty. Refer appendix for
key issuances.

PRIVATE & CONFIDENTIAL 16

Sectoral Profits across market cap: Multiple SMidCap sectors present reasonably valued
high growth opportunities
NSE 100 (97 Cos) NSE Midcap 150 (144 Cos) NSE Small Cap 250 (218 Cos)
No of FY25E FY26E PEG Ratio No of FY25E FY26E PEG Ratio No of FY25E FY26E PEG Ratio
Sector Cos YoY (%) YoY (%) FY26E Cos YoY (%) YoY (%) FY26E Cos YoY (%) YoY (%) FY26E
Agro Chem & Fertilizers - - - - 4 73.5 45.0 0.5 3 104.4 17.8 0.9
Auto Ancillary 2 35.1 26.8 1.0 15 14.9 23.8 1.4 9 1.2 27.6 0.8
Automobiles 7 1.8 15.5 1.3 2 16.5 14.4 1.5 - - -
Banks PSU 5 17.3 6.4 1.2 3 23.4 11.1 0.6 - - -
Banks Pvt 5 10.1 12.7 1.3 5 25.3 31.9 0.4 6 -5.0 20.7 0.4
NBFC 13 41.2 16.5 0.9 20 1.2 27.5 0.8 27 27.3 22.5 0.9
Capital Goods 5 19.0 26.2 1.6 15 23.9 30.1 1.5 28 43.6 33.3 1.0
Cement 4 -3.4 40.2 1.0 3 -15.8 37.4 0.6 5 -31.5 150.5 0.2
Chemicals 1 31.0 14.5 4.1 6 28.3 38.9 1.1 15 40.9 32.1 0.9
Construction 1 24.4 23.5 1.1 3 44.9 123.0 0.3 10 3.4 25.7 0.8
Consumer Durables 1 25.3 26.5 2.0 3 68.3 26.4 2.2 9 31.0 34.0 1.2
FMCG 9 9.3 13.7 2.9 7 34.4 19.7 2.1 13 17.2 28.6 1.1
Healthcare 6 15.6 12.9 2.4 11 25.2 22.3 1.4 16 97.5 21.8 1.4
Healthcare Services 1 66.6 33.9 1.6 3 25.7 28.8 1.9 8 28.1 23.1 2.0
Home Improvement 1 -11.3 11.1 3.9 2 6.6 16.5 2.4 5 -4.1 16.2 1.8
Hotels, Restaurants & Tourism 1 18.9 16.9 2.3 2 23.9 26.7 2.5 8 30.9 54.2 0.9
IT Services 7 8.8 12.8 2.1 8 15.6 19.6 2.1 15 17.1 23.8 1.2
Media & Entertainment - - - - 1 19.1 8.9 1.5 5 173.6 31.1 0.8
Metals & Mining 7 22.6 30.2 0.4 5 32.5 29.9 0.4 7 26.0 11.8 1.2
Oil & Gas 5 -20.5 14.8 0.9 6 -29.8 26.0 0.4 4 -49.3 32.4 0.5
Others - - - - - - - - 1 32.5 30.6 0.6
Power 7 9.7 17.4 1.1 3 22.9 25.4 0.8 1 639.4 10.4 1.4
Realty 2 39.5 27.9 1.6 4 66.2 31.4 1.2 7 50.0 55.0 0.7
Retailing 4 33.5 43.2 1.8 5 61.8 67.9 1.4 4 9.1 23.5 1.2
Telecommunication 1 64.5 41.4 0.8 4 Loss Loss - 3 30.1 27.6 0.9
Textiles, Apparels & Accessories - - - - 1 23.7 20.1 1.4 4 45.2 23.6 0.7
Transportation & Logistics 2 12.0 21.8 1.0 3 42.4 22.9 1.7 5 23.9 10.1 1.6

Source: Bloomberg, DAM Capital Research. Notes: 1) Above aggregates unweighted & based on Consensus ests. 2) Top-10 high growth sectors and PEG ratio < 1 highlighted in GREEN

• Appendix provides list of high growth stocks based on consensus PAT estimates of FY26 in Large & SMid Caps
• High growth sectors across market cap are Auto Ancillary, Capital Goods, Cement, Construction, Consumer
Durables, Realty, Retail
PRIVATE & CONFIDENTIAL 17
Investment Banking

Capital Markets
2. Slowdown: Consumption & Capex
Institutional Equities

With DAM Capital, It’s Possible!

18
Q2FY25 GDP at 5.4% surprising, but recovery underway

➢ Q2FY25 GDP at 5.4% vs. expectations of 6.5% consensus/ 7% RBI

➢ 1H FY25 at 6% vs. RBI expectations: 7% for 2HFY25 & 7.1% for 1HFY26. We expect medium term growth potential to 6.5%, at
the pre-Covid rate, normalized from the post-Covid recovery 7-8% band
➢ Components of slowdown: Industry (Mfg, mining, construction), Urban Consumption (esp. FMCG), Capex. Industry to improve
with revival of Capex (Ref separate section) and Consumption (esp. Urban, as follows):
➢ Multi-year slowdown:
 GST led to smashing of SME sector (40% of workforce); this, and the inadequacy of manufacturing capacity have led to
chronic unemployment.
 HH debt: At Rs127 tn in Q1FY25= 3x Rs40 tn in mid-2015, due to increasing financial penetration. 18.3% of adults have
some outstanding loan, rural male more likely to have debt. But, Wealth effect kicking in: HH’s GFA totaled 158% of GDP in
Q1FY25 vs. 124% at end-Dec-19, largely due to realty & equity investments. The number of individuals with a gross income
over Rs1cr increased by 70% in the last 2Y. This higher indebtedness AND wealth effect obviously increases Inequality
➢ 2024: 2025 to improve due to easing in rates & financial regulations, with higher recovery in Rural (ref next slide)
 Monsoons were extended + dispersion= higher inflation (Rate cut from Q4FY25 expected; Wheat/ rice winter sowing
higher by 2%/ 5%, positive for inflation abatement from Q4FY25). Food inflation affects Urban more as Rural benefits from
food income & is protected by higher MSPs. Festive sales (Oct/ Nov) were up on discounts
 Regulatory tightening on unsecured lending & home loans. Given need to revive consumption, expect regulatory easing to
start mid 2025
 Tighter financial lending due to the above + Paucity of deposits (diversion to equity + lower savings). Recent CRR cut and
expected OMO Purchases/ Fx swaps/ VRR to further boost liquidity from Q4FY25
 IT sector (high per capita spend + employment) saw 150K job losses in 2QFY25, an all time high, due to AI. GCC hiring is
moderating(BFSI in FY24 recruited more than IT (+2L vs (-)66K), reversing the trend seen in FY22/FY23) .
 Pre-election hiatus in government spend. Low GoI cash balance indicates pickup in spending

PRIVATE & CONFIDENTIAL 19

Rural outperformance in FY26

➢ GoI turned populist: 15 states have introduced income transfer programs for adult women (recent: MH, JH, MP, KA, BR)
bringing total annual spending to >Rs 2tn (0.7% of GDP), 3x the amount planned for FY24. These programs benefit 34% of
women in the states (<=> 20% of women overall).
➢ Note: Avg monthly per capita consumption in FY24 Rural: Rs4,122| Urban: Rs. 6,996 w/o considering values of freebies.
➢ Monsoon normalisation
➢ Expect Easing of rates & unsecured lending norms in mid-2025
➢ Structural factors:
 Non agri employment increasing (5Y wage CAGR at 12% for non agri vs. 9.5% agri), leading to reduced demand for
MGNREGA jobs (demand lower by 20L jobs so far vs last 2Y).
 Increasing penetration of distribution, financialisation, digitalization.

 Convergence of wage growth with urban (FY15-FY22 CAGR of 10.6% Rural vs. 8.7% Urban) leading to reverse migration to
rural (increase in physical infrastructure leading to enhanced rural mobility)
 Decline in rural poverty vs. urban poverty (Rural FY24: 5%, FY23: 7%, FY12: 26%; Urban FY24: 4%, FY23: 5%, FY12: 14%),
leading to decline in consumption inequality
➢ FICCI-Quess report (highlights why urban would lag rural):
 Real wage growth during 2019-23 in urban areas was lower than 5.7% average inflation (highlights lower urban wage
elasticity, mobility towards urban led to dampening of wage growth).
 TDS collections from salaries have reduced YoY, while advanced taxes have increased. This typically indicates higher business
income than salaries. Company profits not passed on as salary hikes.

PRIVATE & CONFIDENTIAL 20

Govt Capex to pick up in 2HFY25 after electoral hiatus in 1H
➢ FY 25: Target Capex was Rs 11.11 tn:
GoI cash balances moderates, suggesting pickup in spending
 8MFY25 capex declined 12%YoY. Nov jumped 21% YoY (low base).
Govt Balance (Rsbn)
Adjusting for holiday seasonality in Oct-Nov, capex grew by a modest 6,000
4%. Early trends indicate strong Dec spend (positive for steel, cement,
4,000
infra). State Gov borrowing relaxation for 50Y interest free loan in
Q4FY25 is a turning point in capex cycle. 2,000
 Top Sector Spends: Railways (Rs1.7tn), Roads, Transport and Highways
0
(Rs1.5tn), Defence Services (Rs707bn).
 Rs 1.5 tn run-rate p.m. required in 4M, unlikely, expect ~Rs 1 tn miss to (2,000)

Apr-21

Apr-22

Apr-23

Apr-24
Dec-20

Aug-21

Dec-21

Aug-22

Dec-22

Aug-23

Dec-23

Aug-24

Dec-24
Rs 10 tn (Note: GoI is considering relaxation of quarterly spending limits
to ensure it does not fall short of its capex target)
Source: Bloomberg, DAM Capital Research
 Govt cash balance avg ~Rs 1.5 tn in Dec/ Rs 1.0tn in Nov/ Rs 2.9 tn in
Oct/Rs 3.2 tn in Sep. Expect sharp run-down in Q4FY25 Below trend capex spend in 7MFY25
 Fiscal deficit expected at 4.8% (-10bps)

➢ FY26:
 Exp Capex at ~Rs 12 tn (20%YoY)
 Fiscal deficit at 4.5%, but expect reorientation from revenue spending
(lower MGNREGA & petro/ fertilizer subsidy)
➢ Rs100 tn infra plan just announced, to rollout over 5Y (Centre+ state+ pvt).
 Expressways: Rs 20 tn
 Port infra: Rs 2 tn
 Rail network/ Vande Bharat upgrade: Rs 10- 12 tn Source: Bloomberg, DAM Capital Research
 Roads: Rs 2.1 tn through BoT model

PRIVATE & CONFIDENTIAL 21

Private capex

➢ FY 25 suffered due to electoral hiatus for govt capex, global Booming IPO, Debt markets counter bank lending slowdown
uncertainty, demand slowdown Total corporate funding (Rs Tn, 12m rolling sum)
300
➢ Bloomberg’s corporate funding index (equity+debt+bank
250
credit+ECBs) shows 12M rolling sum increased 32% YoY in
Oct 24 to Rs 14+ tn, up from 13% YoY in Jun 24 200

150
➢ Firm financing changing to equity and corporate debt vs.
banks (tighter regulations, high rates, tighter liquidity) 100

50
➢ Equity fund raising at ~$17.8bn in CY 24 as of 6 Dec) & 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
~USD 31bn likely in FY26 Source: Bloomberg, DAM Capital Research

➢ RBI support likely in FY 26: Easing Rates & financing IPO boom seen extending into 2025
regulations to support demand recovery Proceeds raised (USDbn)
20
➢ Risk: Global uncertainties, incl. Trump’s policies
15

10

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Bloomberg, DAM Capital Research

PRIVATE & CONFIDENTIAL 22

Capex breakup/expectations

Capex Expectations of NSE 500 (consensus) Capex announcements by sector in Q1-Q3FY25 refer appendix for company details)
USDbn % Share Industry Value of new project announcents in Q1-Q3FY25 (Rs bn)
(Rs bn)/% FY24 FY25E FY26E FY24 FY25E FY26E
Renewable electricity 989
NSE500 Total 7685 9201 9395 100 100 100
Oil & Gas 2930 2742 2777 38 30 30 Inorganic chemicals 734
Power 992 1427 1634 13 16 17 Passenger vehicles 635
Metals & Mining 1119 1477 1492 15 16 16 Refinery 614
Automobile/Auto Comp. 482 832 846 6 9 9
Conventional electricity 476
Telecommunication 533 630 681 7 7 7
Construction Materials 312 421 358 4 5 4
Other transport equipment & ancillaries 296
Healthcare 264 319 269 3 3 3 Housing construction 295
Services 163 241 216 2 3 2 Storage batteries 250
Capital Goods 153 199 215 2 2 2 Note: The shortlist was made by looking at top 20 new project announcements in Q1-Q3FY25.
IT 100 202 205 1 2 2 Source: CMIE, DAM Capital Research

Chemicals 171 194 193 2 2 2

FMCG 150 149 131 2 2 1
Opportunities in T&D expected to remain robust, backed by National
Realty 59 89 99 1 1 1 Electricity Plan-II, which has a planned expenditure of ~Rs 9.16 tn (during
Consumer Services 82 89 96 1 1 1 2022-32). Supports grid connectivity, renewable energy generation.
Consumer Durables 87 75 70 1 1 1
Construction 62 70 68 1 1 1
Oil & Gas sector to see fresh investments – HPCL/ BPCL
Textiles 10 27 25 0 0 0
Increasing interest: Renewables, Inorganic, Infra (railways, airports, ports),
Media, Ent, Publication 13 15 16 0 0 0
roads, realty, datacentres, semiconductors, green hydrogen, EVs, energy
Forest Materials 2 1 3 0 0 0
storage (Tata, JSW, Adani, Reliance etc)
Diversified 0 1 1 0 0 0

Oil & Gas includes RIL whose capex is also in Telecom & Retail. Others: ONGC, IOCL
Power: NTPC, Adani Green, Tata Power
Metal: Tata Steel, Adani Ent., Hindalco, JSW Steel
Auto: Tata Motors, Maruti, M&M
Source: Bloomberg, DAM Capital Research

PRIVATE & CONFIDENTIAL 23

Investment Banking

Capital Markets
3. Trump: India Impact
Institutional Equities

With DAM Capital, It’s Possible!

24
Trump Regime – Opportunities & Challenges for India

Economic Impact
➢ Tariffs, US Corporate rates, Make in USA, H1B visa tightening: But other factors more important here vs. potentially worse
effect on key other global economies. Note powers:
 President's Power: Can decide on Tariffs and Immigration (H1B Visas) without Congress approval.

 Requires Congress Approval: Corporate Tax Cuts and Fiscal Spending policies.

➢ USD/INR (FY26 Avg USD/INR: 86.50-87): Thus, status could lead to capital outflows and INR depreciation (India’s twin deficit
exacerbates impact of INR depreciation on itself, leading to vicious cycle)

➢ US Tariffs and Trade Impact: Global competitive currency devaluation, currency manipulator label. Impacted Sectors: Auto &
components (eg Bharat Forge), Jewelry, Electronics, Solar Modules, Textiles, Chemicals & Pharma (dependent on Chinese
imports for inputs and Yuan flux). US likely to use tariffs selectively in self-interest vs. blanket increases.

➢ China:
 China’s Role in EM Flows: Competes directly with India for EM investments. Potential further stimulus to counter US tariffs
could improve China’s relative inflows position vs. India. But India part of EM basket
 Depreciation of CNY: Likely 10-15% depreciation vs. USD to mitigate tariffs, triggering global currency devaluation, including
INR (& delaying interest rate cuts required to spur growth).
 Disinflation in China: Dumping Chinese goods into India, affecting sectors like Solar PV Cells, Steel, Chemicals, Textiles,
Pharma. Thus, India’s challenge in difficulty in proving dumping.

PRIVATE & CONFIDENTIAL 25

Trump Regime – Sectoral Impact

Note following factors ex-Trump more important

➢ IT: AI LLM Application work to us, US IT Budget increase as Presidential uncertainty removed + localization +
reduced US corporate tax + US Govt spend for cost-rationalisation, Fed Rate Cuts.
 Corporate Tax Cuts benefit Indian IT subsidiaries also.

 Banking recovery to help MPhasis

 Infosys and Wipro less affected by potentially tighter H1B visa rules due to greater localization.

➢ Commodities (Metals, FMCG Inputs): Chinese growth, global currency devaluation, end of Ukraine war, end of
Gaza easing logistics costs.
➢ Pharma: Drug patent expirations more critical than impact of China tariffs, Bio secure law to help CDMOs,
Healthcare cost-savings related US laws benefit us.
➢ Oil:
 Global Refinery Shutdowns in 2024 to raise GRMs.

 US will export own oil to Europe, buying own needs from Saudi, as US refineries less efficient at processing
local oil.

PRIVATE & CONFIDENTIAL 26

Investment Banking

Capital Markets
4. Economic Overview and Risks
Institutional Equities

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27
Main risk for FY26 is INFLATION: expected fall to 4.5% slippery

➢ Domestic: Passthrough of higher RM costs (agri, food, S&P Global HSBC PMI Survey
metals) as demand picks up MANUFACTURING
PMI Index
Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24
2
Oct-24
5
Nov-24
2
Output 2 5 2
➢ Inflation expectations: A large share of HH in New Orders 2 5 2
New Export Orders 2 5 5
November view 1Y ahead inflation to be higher due Input Prices 5 5 5
Output Prices 2 5 5
to food, housing Future Output index 2 5 5

➢ Imported inflation: SERVICES

Business Activity
Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24
2
Oct-24
5
Nov-24
5
New Business 2 5 5
 Competitive devaluation due to tariff war: Yuan New Export Business 2 5 5
Input Prices 5 5 5
devaluation likely to be worse vs. INR given China’s Prices Charged 2 5
Future Activity Index 5 2
higher vulnerability, leading to pressure on INR
expanding and stronger expanding but weaker contracting but improving contracting and weaker

 USD safe haven: Trump’s MAGA & other policies

which can affect major economies may spike the
USD RBI Survey of Manufacturing Cos

➢ Key mitigator: Intrinsic China deflation+ Yuan Business Expectations of Select Parameters - (%)
Parameters Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26
depreciation- led price competitiveness of Chinese Overall Business Situation 45 47 54 53
exports Production 36 36 51 50
Order Books 35 33 47 49
Capacity Utilisation 29 30 47 46
Rate View: Frontloaded rate cut cycle, of cumulative Employment 16 18 28 30
75bps. Rate cut cycle to start in February. Cost of Raw Materials -51 -48 -46 -46
Selling Prices 17 17 29 30

PRIVATE & CONFIDENTIAL 28

USDINR to depreciate to average 86.50 - 87.0 in FY26

➢ Rupee’s fall: From 84 to 85 in 2M; 83 to 84 in 14M; 82 to 83 USDINR is 8% overvalued; possibility of faster depreciation is high
in 10M (cost to hedge INR exposure rises for offshore Actual USDINR Implied Fair Value of USDINR
95
investors) 90
90
➢ FY26 USDINR:86.50-87.0 (FY25:84) 85
80 85.07
 Interest rate differentials favor dollar (~200 bps) 75
70
 Safe haven dollar demand (Trump policies, China
65
slowdown, global uncertainty, geopolitics, growth 60
differential in favor of US vs other DM/EM) 55
50
 Rise in goods trade deficit worsens CAD to 1.4% of GDP

Jun-14

Jun-23
Dec-13

Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22

Dec-23
Jun-24
Dec-24
despite assuming oil price to avg USD70 pb (FY25:1.2%
of GDP). Higher services exports to cushion any
The rise of US10Y above 4.5% signals stronger dollar for longer!
downside risks.
 As per REER index, the fair value of rupee is 90. Rupee
is overvalued by >8%.
 RBI would allow for rupee depreciation and start a
shallow rate cut cycle in February 2025. Else the
window for rate cut would close soon.
➢ US10Y move above 4.5% (key resistance), post Fed policy, is
critical. Sustaining above this brings 5% levels into play. This
simplistically implies, stronger USD, higher INR rates.

PRIVATE & CONFIDENTIAL 29

 Macro Risks for CY25, apart from Currency management

Risks Mitigation

Food inflation expected to abate by March as winter

Inflation due to erratic monsoons
crops come in

CRR cut by 50 bps in Dec-24 led to liquidity infusion of

Liquidity Deficit due to Fx management in the background Rs1.16tn. Expect Govt spending in Q4FY25 to ease
of FII outflows liquidity concerns. Expect announcements on FX swaps,
OMO purchases, VRR auctions.

Expect regulatory easing by mid-2025 as Slippages are

Regulatory Tightening on alarming Unsecured loan growth showing deceleration and as RBI imperative shifts to
supporting Growth .

RBI dividend transfer of Rs 2.5 trn+ (CY23 was 2.1) &

Budget Dilemma: Fisc vs. capex reducing Food subsidy a possibility (only major election
in 2025 is Bihar)

PRIVATE & CONFIDENTIAL 30

Economic Outlook

➢ Monetary Policy: New RBI governor to balance Growth imperative vs. Tariff related (new US regime) effect on
Inflation & need to defend INR. Except frontloaded rate cut cycle to start in February 2025 (cumulative 75bps).
➢ GDP: Real GDP growth expected at 6.5% for both FY25 and FY26 (RBI: FY25: 6.6%, 1HFY26: 7.1%). GoI capex
and private consumption to be key driver of FY26 growth.
➢ Inflation: Expect CPI inflation to average 4.5% in FY26, after 4.8% in FY25. That said, volatility in inflation
would persist on account of food, imported inflation, passthrough of prices by businesses to end-consumers.
➢ Rates: Expect 75bps cumulative repo rate cut and durable liquidity injection by the RBI. CRR cut, OMO
purchases, VRRR/VRR, FX swaps would be ready instruments to manage liquidity mismatch. Lending standards,
risk weights to ease gradually through FY26 depending on balance sheet recovery of MFIs/ SFBs. We expect
10Y g-sec yields to tread towards 6.60% by March 2025 and towards 6.30% until March 2026 (assuming 75bps
rate cut).
➢ External balance: Expect CAD/ GDP at 1.2% for FY25 (oil price avg USD80) and 1.4% for FY26 (oil price:
USD70pb)
➢ INR: Post the November trade data, we expect the USDINR slide towards 85.50 by January/February 2025, with
RBI’s Fx intervention. For FY26, we expect 86.50-87 avg (assume 2.5-3% depreciation, LT avg:2%)
➢ Fiscal Deficit: With capex undershooting budget estimate (Rs1tn miss in our view), we expect fiscal deficit at
4.8% of GDP, 10bps lower than budgeted. Revenue shortfall on account of lower nominal GDP likely to offset
lower expenditure growth. For FY26, expect fiscal deficit at 4.5%.

PRIVATE & CONFIDENTIAL 31

Investment Banking

Capital Markets
5. India Story: Uniquely Attractive, Transformations, Risks
Institutional Equities

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32
Why is India such a uniquely attractive market among major markets & EMs

➢ India’s Capex, Consumption, Investible sectors, etc are all more DISTRIBUTED vs. past & key economies
➢ Growth:
 Highest GDP growth in the immediate term in a sclerotic world, but also structural demographic advantages
in an ageing globe
 This brings forth a very striving and driven society, budding with entrepreneurship (Eg 3rd largest ecosystem
for startups)
 US & India have given the highest equity returns over long periods
➢ Diversified:
 Among the most diversified equity markets, providing both the comfort that no sectoral issues can roil
overall markets, and the benefit of investing in sectors of all preferences. Eg Bajaj Allianz Pure Stock fund
with no BFSI holdings (~35% of Nifty) returned ~24% vs. Nifty returns of 13% over 12 months.
 This is so unlike even the US where big tech dominates or EMs where some commodities or chips or other
specific sectors dominate
➢ Stability:
 Political (and hence policy) continuity is far more certain in India than almost anywhere else, with each
regime building on the previous, even as the globe is mired in political uncertainty with dramatic differences
in policies between parties.
 Strong independent institutions, eg central bank, judiciary, various sector regulators, etc. – strong pillars
which withstand political vagaries – comparable to that of the West

PRIVATE & CONFIDENTIAL 33

Challenges to India Macro… (each adversity can provide some investment opportunity)

➢ Near Term Challenges (Ref Economy section): Urban Consumption (HH leverage reached ~43% of GDP, near
previous retail credit cycle peak in 2008), partly driven by slowdown in Private Capex
➢ Impact of increased US Tariffs under new regime: Our major exports are Electronics, Solar modules, Pharma &
Specialty Chem, Jewelry, Textiles. However, with tariffs on China, our pharma/ chem exports where we
compete, could improve. Separately, we could become a US+1 secure friend-shore eg for “lagging edge” chips
➢ Vulnerability to USD appreciation: Twin deficit results in virtuous/ vicious cycles due to feedback loops in
flows/ inflation/ further currency impact, etc. as in 2007 vs. 2009. Geopol (risk-off/ Oil) & Fed rates affect INR.
Note counterintuitive relationship between Oil & Sensex: usually positively correlated as global demand buoys
both. Suck back of Flows to US in new regime due to US growth takeoff or risk-on can impact our twin deficit
➢ Dependance for strategic imports:
 Oil forms a quarter of imports, while alternative solar energy currently dependent on Chinese equipment
(Adani & Ambani groups plan fully integrated H2 & solar)
 Defense imports are 17% of global imports (Russia now accounts for only ~ 1/3 from over 2/3 historically).
India the only country in the world with 2 nuke-armed neighbors who have gone to war and a non-aligned
foreign policy. Our main arms supplier Russia can become an economic vassal of China (China blocks us in
every possible large economic move, eg Tesla’s entry in India). We are mitigating these by our Make in India
program, also leading to growing Defence exports, and higher Israeli & Western defence collaborations
 Electronics (13% of imports) largely dependent on China, being mitigated by PLI schemes. CONTINUED …

PRIVATE & CONFIDENTIAL 34

… Challenges to India Macro (each adversity can provide some investment opportunity)

➢ Unemployment leading Consumption slip: Huge numbers entering working age population + GST has shrunk
the unorganized sector (40% of workforce). HUGE population with low income (ref next slide). However:
 Manufacturing thrust to absorb semi-skilled labour: PLIs for import substitution capacity creation, FDI esp.
in China+1 areas like electronics & chemicals, Ease of Doing Business improvement, Tenders prioritizing local
manufacture eg power equipment & defense
 Thriving democracy (unpopular parties booted out), judiciary & media ensure social unrest doesn’t boil over

➢ Policy Implementation/ Ease of Doing Business: State domains (Labour, Land, electricity, agriculture) usually
difficult to reform & state finances are bad. Judicial delays, Logistics costs, State vs Centre issues, Tax base,
Industry clusters, etc.
➢ Disruption in various Sectors due to Technology & Distribution: FMCG & Retail (RIL entry), e-Consumer & e-
Finance, AI in IT, global use of robotics & mechanization in manufacturing, Renewables on thermal power eco
system incl. grid upgration, coal, etc, and on auto.
➢ Areas requiring global resolution: Uncompromising globe due to political polarization in key economies, which
affect us: climate change (India among most vulnerable to erratic monsoons, high temp & water scarcity), wars,
trade issues, funds flows & currencies (high debt/ GDP of West, risk on/ off)
➢ Increasing global volatility: Yen carry trade?, USD?, inflation resurgence- Interest rates due to tariffs, etc, algo
trades, commodity availability & pricing in both new & old eco.

PRIVATE & CONFIDENTIAL 35

India has a HUGE population of very low income, which needs dire attention

Per Capita Avg Pre tax income ($ ‘000, 2023) Top 1% Bottom 99% Top 10% Bottom 90%
India 75.7 2.5 19.3 1.4
China 201.4 10.9 55.5 7.3
US 1,880 72.5 423.3 48.6
Kenya 53.4 2.9 16.6 1.7
Population (Mn, 2024) of above income baskets

India 15 1,436 145 1,306

China 14 1,405 142 1,277
US 3 342 35 311
Kenya 1 56 6 51
Countries of equivalent Population to India pop
Guinea China Russia China
basket
Countries of equivalent income* US Ghana Hungary Zimbabwe, Pak
Sources: https://www.worldometers.info, & world bank, https://wid.world
* Country with p.c. GDP (Current USD 2023) similar to p.c. Pretax income of India baskets

Top 1% Indian income basket similar to US avg, bottom 99/ 90% similar to Ghana/ Pak & Zimbabwe, of pop same as China

PRIVATE & CONFIDENTIAL 36

India: Major Transition Themes

➢ Manufacturing (strategic sector): Make in India Program and PLIs: esp. in electronics & tech, green energy,
steel, chemicals, defense. Domestic demand drives a lot of low-end manufacturing – sofas, umbrellas, low-end
electronics. Manufacturing is also about national security.
➢ Renewable Energy: govt target 43% of energy requirements by 2030: fully integrated investments in H2 &
Solar planned: will reduce energy import vulnerability and inflation, fertilizer subsidy
➢ Financialisation of the Indian economy (active investors to grow multifold): eg 1) wealth effect (1/3rd of
India’s wealth is coming out of NSE, $5.2-5.3tn), 20 cr investor accounts with 105 mn unique investor accounts
(India: 12% of population; China: 20% ; US: 60%), 14.4 mn are active (traded in past 1M as of Oct) 2)
Penetration of consumer lending thru NBFCs, apps, etc. 3) 95% of adults have a bank/ FI account.
➢ Digitalisation of Consumer Economy by India’s UNIQUE public utility IndiaStack model: From base of citizen
identifier based e-payments, direct subsidies and document storage, now onto a) consumer lending, b)
financial services like insurance, c) e-retailing d) digital health. AgriStack: >3.72mn farmers IDs created so far
(demography, land holdings, crops sown etc.)
➢ Discretionary Consumption boom as per capita GDP crosses $3000 benchmark: typically these spur auto &
consumer durables, realty, consumer services (hotels, restaurants), financial services. Eg 4% of bottom 20% of
population had some vehicles 10 years back vs 40% today (power of India’s domestic demand). Thus Vehicles +
Mobile telephony + Roads + Power + Financial penetration leading to a surge in Consumer demand. About
94.2% of rural HH/ 97.1% of urban HH possess telephone/mobile (NSSO).

PRIVATE & CONFIDENTIAL 37

India: Major Transition Themes

➢ Major Infra push: dedicated freight corridor, expansion in ports/ airports, power, telecom
➢ Bottom up economy: Vs. top down central command economy of China. India’s Capex, Consumption and
Entrepreneurship are bottom up
➢ Domestic migration slowdown: No. of migrants as of 2023 is about 11.8% lower compared to 2011 Census
(availability of improved services- education, health, infrastructure, connectivity, improved economic
opportunities in or near major sources of migration.
➢ Inclusion in Bond EM Indices: JP Morgan EM bond index (Jun 24-Mar 25, attracts USD30bn bond inflows),
Bloomberg’s Emerging Market Local Currency Government Index (Jan-25, attracts USD5bn bond inflows) and
FTSE Russell EM Government Bond Index (Sep-25, phased over 6M; India’s wt:9.35%, attracts USD4-5 bn
flows). This eases capital requirements, boost Fx reserves, stabilize INR.
➢ Government Initiatives for semiconductor ecosystem: Semicon India Program’s incentives include an outlay of
Rs760bn with capital subsidies, and Design-linked Incentive with investment subsidy and deployment-linked
incentives
➢ Consumption: Tier 3-Tier 4 cities to drive consumption growth. Eg V-Mart, e-commerce sales. Shift from agri to
non-agri jobs in rural/semi-urban. Increased entrepreneurship opportunities to provide the income trigger.
Urban consumption governed by luxury or premiumization, highly dependent on macro conditions – inflation,
jobs, hike, wealth effect etc
➢ Capex: Newer pockets of capex – electronics, power distribution, renewables etc.

PRIVATE & CONFIDENTIAL 38

Investment Banking

Capital Markets
6. Doubler Stocks
Institutional Equities

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39
Cholamandalam Investment & Finance Co. (CIFC IN)

➢ CIFC was incorporated in 1978 as the financial services arm of the Murugappa Group. CIFC commenced business as an
Company equipment financing company and has today emerged as a comprehensive financial services provider offering vehicle finance
Profile (VF), home loans (HL), loan against property (LAP), SME loans, secured business personal loans (SBPL), consumer & small
enterprises loans (CSEL), loan against securities and a variety of other financial services to its customers.

➢ CIFC has a track record of fine execution for over a decade now. Despite being heavy on vehicle financing, which is subjected
to high cyclicality in growth, CIFC has been able to clock ~24% CAGR over FY10- FY20 (Pre-Covid decade).
➢ CIFC’s key strength lies in its ability to toggle between the sub-segments of Vehicle Finance (VF) based on the conduciveness of
each sub-segment. As a result, unlike its peers, CIFC does not heavily rely on any specific business line within its vehicle book.
It has posted ~26% CAGR on earnings over the last decade. Such sustained execution on growth with due focus on asset
quality is rare in the vehicle financing space.
➢ To reduce the dependency on vehicle finance, CIFC diversified into loan against property (LAP) and home loans (HL) in FY13
Key Drivers and further diversified into multiple new businesses post Vellayan’s come-back to CIFC as a Chairman.
➢ Current AUM mix consists of VF (56%), LAP (21%), HL (10%) and new business (13%). The execution on new businesses has
been remarkable, with total quarterly disbursements rising from Rs100bn in Q3 FY22, which was a record high at that time to
Rs243bn in Q2 FY25. The share of new businesses has been inching up fast, leading to depleting share of vehicle finance in
overall book.
➢ We expect AUM to grow in the range of ~25-28% while maintaining healthy RoEs of ~20-22% over FY25-FY27E. We expect
~35%+ earnings CAGR over FY25-FY27E.

➢ Slow down in the economic activity can impact sales of vehicles and thereby its financing. This can also lead to increase in
Key Risks credit cost for the company.
➢ New business is still at a nascent stage but growing rapidly. Asset quality in this segment will be a key monitorable.

PRIVATE & CONFIDENTIAL 40

Entero Healthcare Solutions (ENTERO IN)

➢ Entero is one of India’s largest and fastest growing organised pharmaceutical products distribution platforms with a network of
Company
95 warehouses used to cater to 79.5K pharmacies and 3.1K hospitals across 43 cities and 485 districts. The company has a
Profile
supply relationship with 2,300+ healthcare product manufacturers and handles over 71K SKUs.

➢ The Indian Pharma market is worth ~$26bn and is split across a fragmented supply chain of over 65K distributors with
organised players only accounting for 8% of the market (vs >90% in Developed Markets). We believe this space is ripe for
consolidation driven by decreasing power of AIOCD and its affiliates, representing a large opportunity for organised players.
➢ Entero, with its large scale of operations, well capitalized balance sheet, and a proven track record of execution is ideally
positioned to leverage this opportunity.

Key Drivers ➢ Since its inception, Entero has acquired and integrated 44 entities, all of which have delivered robust organic revenue since
their acquisition. Notably, Entero's inorganic strategy is aimed at shortening the timeline for scaling the company to a pan-
India level with a reach of 150-200K retailers. YTD, the company completed 9 acquisitions and added ~Rs7.5bn in annual
revenues with a couple of more in the pipeline to be closed by the year end.
➢ Between FY24E and FY27E, we expect Entero to achieve 2x its revenue driven by a strong deal pipeline with EBITDA/PAT set to
reach 4x/6x backed by procurement efficiencies, entry into higher margin adjacencies and operating leverage. Ex-Cash ROCEs
are expected to inch up to ~15% with long-term ROCEs of 25%+ as M&A pace drops.

➢ Industry consolidation: Consolidation by its customers, suppliers and competitors might reduce the number of market participants
and give the remaining enterprises greater bargaining power, which might lead to erosion in Entero’s profit margin.
Key Risks ➢ Capital intensive: The business requires significant amount of working capital as well as high amount of cash to fund
acquisitions for growth. Inability to maintain sufficient cash flow, credit facilities / other sources of funding could adversely
impact financials.

PRIVATE & CONFIDENTIAL 41

Glenmark Pharmaceuticals (GNP IN)

➢ Glenmark Pharmaceuticals Ltd is a global research-led pharmaceutical company with presence across generics, specialty and
Company
OTC business with operations in over 80 countries. The company has a strong presence across branded formulations, with
Profile
domestic and EM branded generic businesses accounting for c.55% of its revenue.

➢ With the Rs56.5bn GLS stake divestment, GNP has decisively corrected its leverage issues.
➢ Barring the transient challenges in the US business, the other segments remain on a solid footing and continue to grow
strongly with a positive medium-term outlook underpinned by growth in specialty sales on the back of Ryaltris.
➢ The company remains positive on a turnaround in the US business backed by the launch of new products including gFlovent in
FY26E (Glenmark is FTF). The company is working on multiple strengths with the franchise cumulatively worth ~$1.6bn.
Key Drivers Further, the Monroe Injectables facility is expected to resume production in the coming months which should add to US sales.
➢ Additionally, recently, Glenmark’s R&D subsidiary, IGI, has shared a very promising initial data for its investigational oncology
drug ISB 2001. In our view, this creates significant possibility of out-licensing of ISB 2001 over the next few quarters - could be
a value unlocking event for the stock if this comes through.
➢ We expect the company to begin generating meaningful FCF from FY26E, with limited capex spends and improved OCF
generation.

➢ Regulatory challenges at facilities that supply to the US markets remain one of the key risks faced by Glenmark Pharma. The
resumption of USFDA inspections post COVID with an increased willingness to penalize shortcomings has been a major
Key Risks challenge for the India Pharma industry.
➢ India Pricing: Addition of drugs in the National List of Essential Medicines (NLEM) could hurt the domestic business.

PRIVATE & CONFIDENTIAL 42

Greenlam Industries (GRLM IN)

➢ Greenlam Industries Ltd. (GRLM) is India’s largest (and a top 3 global) player in the laminates industry with a presence in
Company Veneers, Engineered Flooring/Doors and Plywood. Additionally, GRLM is set to enter the Particle Board space by Q4FY25E with
Profile a manufacturing setup in South India.
➢ Revenue break-up Q2FY25 – Laminates: 88% of revenue; Veneer and allied: 9% and Plywood: 3%.

➢ GRLM has been a sustained growth story (despite the ebb and flow in the wood panels space), moving up the value chain
while driving volume growth in its core business of laminates on the back of constant innovation (especially for the exports
markets).
➢ While GRLM should continue its dominance in the laminates, its foray into the high-growth category of particle board
(although at a high capex of ~Rs8bn) sets a platform for robust earnings growth from FY26E onwards.
Key Drivers
➢ The company’s core business growth consistency and reducing veneer+ margin drag should be able to support ramp up in its
new Plywood/Particle segment.
➢ Although near-term margins/RoCE will remain under pressure, new capacity ramp-up (esp. particle board = higher margin
profile) and subsequent debt reduction (low capex intensity in upcoming years) should drive ~3x EPS CAGR over FY25E-27E.
➢ Quicker ramp-up of Ply/PB units should drive a re-rating (or at least help hold on to premium multiples).

➢ Stretched balance sheet: Delay in debt repayment due to failure in the ramp-up of particle board capacity.
➢ Decline in exports: Near-term weakness due to freight / container unavailability is a minor blip but the resurgence of European
Key Risks
competition could be a major roadblock as GRLM has spent the last 3-4 years bolstering its value-additive sales in the exports
market.

PRIVATE & CONFIDENTIAL 43

HomeFirst Finance (HFFC IN)

➢ Headquartered in Mumbai, HomeFirst Finance commenced its operation in 2012 in the state of Gujarat and Tamil Nadu, and
Company
later expanded into other states. Of the total AUM of ~Rs112bn, ~68% of the AUM comes from salaried customers, with
Profile
product wise, pure home loans comprising ~85%.

➢ Stellar overall execution – HFFC continues to remain one of the few companies in the affordable space with strong and
sustained overall performance over the years through its superior tech-led capabilities. We continue to remain constructive on
the management’s capabilities for such sustained execution even in the subsequent years.
➢ Growth – The company has been growing at more than 30% over the past three years, and we expect it to grow at ~30% for
the next three years as well. The PMAY scheme is expected to contribute to the estimated growth of the company. The
structural demand for housing in the affordable space remains buoyant.
➢ Margins – Spreads have moderated in the past couple of years due to increase in cost of funds and currently stand at 5.1%. We believe
that the spreads and margins have bottomed-out and expect these to improve from hereon, aided by the recent rate hikes,
improvement in fee income, and LAP share inching-up in the over all AUM. We expect the spreads to be in the range of 5-5.25%.
Key Drivers ➢ Asset quality – The company’s strong execution, along with tech-led capabilities and strong underwriting, has enabled it to
maintain stable asset quality across cycles. GNPAs have remained below ~2% (except for FY22 due to Covid). In terms of
overall ECL provisioning, the company fares much better compared to its peers. With no exposure to developer loans and
relatively low share of LAP, we expect the asset quality to hold up going ahead as well.
➢ Excellent implementation on operating leverage – In terms of most operational/efficiency metrics, HFFC fares much better
than most of its peers. HFFC has reported a consistent improvement in efficiency ratios, such as AUM per employee and AUM
per branch, over the last few years.
➢ Return ratios – augmenting leverage RoAs to moderate to 3.3% (FY24:3.8%), while RoEs to inch-up to 19% (FY24:16%) by FY27E.
➢ The company has created a niche for itself in the affordable space through its differentiated operating model.

➢ Lower-than-expected AUM growth will have adverse effect on earnings.

Key Risks ➢ Higher-than-expected credit cost due to deterioration in the asset quality would impact earnings growth.

PRIVATE & CONFIDENTIAL 44

Jindal Steel and Power (JSP IN)

➢ Jindal Steel & Power Ltd (JSPL) is one of India’s leading steel producers with operations in steel manufacturing, mining, and
power generation, and a global presence across countries such as Australia, Mozambique, and South Africa.
➢ The company offers a diverse product portfolio, including high-value-added products such as high-tensile plates, rails, TMT,
Company and fabricated structures, with value-added products contributing 64% to revenue in FY24.
Profile ➢ JSPL is implementing a Rs31,000 Cr capex plan to expand steel capacity to 15.9 MTPA by FY27, alongside investments in
renewable energy and green hydrogen projects to reduce coal dependency by 50% in the next 2-3 years.
➢ With strong backward integration in raw materials, JSPL has significantly reduced its reliance on Australian coking coal, while
maintaining its focus on debt optimisation and achieving a net debt-to-EBITDA ratio below 1.5x.

➢ JSPL is set to increase its capacity from 9.6mt to 15.9mt over the next two years, with strong volume growth expected to
continue, supported by a healthy balance sheet, making it the least leveraged among major steel players and best positioned
to announce the next phase of growth.
➢ Additionally, JSPL is ramping up production from its coal blocks and has applied for an extension of EC limits, which, once
granted, will further enhance coal security and help mitigate variability in coal costs during periods of shortages or e-auction
price spikes.
Key Drivers
➢ JSPL continues to focus on adding value-added product grades, making it more resilient to commodity price fluctuations, and
with the Angul expansion, it will achieve an improved finished product mix.
➢ We expect higher steel spreads in FY26 and FY27, while the near term (2HFY25) might see a gradual improvement. China steel
spreads are currently at a cyclical trough, and we anticipate medium-term recovery. Government measures, such as stimulus
packages and fiscal spending, could accelerate this improvement. For FY27, we have factored in the India HRC price of
Rs60,000/t, compared to Rs48,000/t at present.

➢ Regulatory risk: an increase in mineral taxes or an increase in export duty of steel/decrease in import duty of steel.
➢ Execution risk : Delay in execution of expansion projects may lead to volume miss on our projected numbers.
Key Risks
➢ Pricing: A slowdown in global economy and further deterioration of China property, leading to steel prices staying lower for longer.
➢ Inflation: Cost inflation in terms of coking coal supply disruptions, or a sharper rise in domestic iron ore prices for JSPL.

PRIVATE & CONFIDENTIAL 45

Mahindra & Mahindra Financial (MMFS IN)

➢ MMFS is one of India’s leading non-banking finance companies focused on the rural and semi-urban sector. The company
Company
primarily operates in the business of financing purchase of new and pre-owned auto and utility vehicles, tractors, cars, CV/ CE
Profile
and SME financing.

➢ Growth - We expect the business assets to grow at ~20% for the next three years. Brighter outlook of its OEM, which
constitutes ~43% of the vehicle financed by MMFS, adds comfort to our growth estimates.
➢ Margins - The company’s margins have reduced meaningfully from 7.1% in FY22 to 6.4% in FY24 (6.3% in Q2FY25) on account
of increase in cost of borrowings. We believe that the margins have bottomed out and expect them to improve from hereon
when the rate cut begins, coupled with structural improvement in other income as the company has forged tie-ups with
insurance partners.
➢ Asset quality - Asset quality has seen a considerable improvement, from peak overall stress of ~35% at the end of Q1 FY22 to
Key Drivers ~10.3% in Q2FY25. Following the arrival of Raul Rebello and due focus of the current group MD, there has been a substantial
change in the collection efforts with dedicated workforce formed for all overdue buckets (30+, 60+ and 90+). Also, focus on
relatively affluent customer base within the rural space is expected to result in less swings in credit cost, ensuring steady
return ratios going ahead.
➢ Further as we enter normalised macro, it will result in lower LGDs (loss given default) requiring lower provisions (even with
same level of stress) and hence the credit cost.
➢ Taking into consideration the above, we expect the earnings to grow ~27% over FY25-27E with an uptick in RoAs to ~2% (from
1.7% in FY24).

➢ Lower-than-expected AUM growth will have adverse effect on earnings.

Key Risks
➢ Higher-than-expected credit cost due to deterioration in the asset quality would impact earnings growth.

PRIVATE & CONFIDENTIAL 46

PCBL Ltd (PCBL IN)

➢ PCBL Limited, a key entity of the RP-Sanjiv Goenka Group, is India’s largest and the world’s 7th largest producer of carbon
black, specialising in tyre, performance, and specialty black. Operating five facilities and global R&D centers in India and
Company Belgium, PCBL plans to expand its capacity to >1 MnMTPA over the medium term (currently at 770KTPA).
Profile ➢ The acquisition of Aquapharm Chemicals positions it among the top 3 global leaders in phosphonates and gives an opportunity
to tap into the Water treatment, Detergent and Oil and Gas products.
➢ JV with Kindia Pty Ltd. drives nano-silicon innovation for EV batteries – with a planned infusion of $44mn over the next 2 years.

➢ Rs35bn capex over the next five years across three initiatives – expanding carbon black capacity to over 1 mn tonnes, double
Aquapharm’s capacity and infusion in the new JV for nano silicon products (to acquire Ips, pilot plant and commercial scale).
➢ Target CAGR of 10–11% for sales volumes, supported by specialty chemicals doubling in size by FY29 (global CB demand
expected growth rate at 3.6% CAGR; the Indian tyre industry expected growth rate at 7-8%).
➢ Increase in the share of exports to the EU (with ban on Russian imports and limited Chinese competition) and higher
Key Drivers contribution from non-tyre CB to drive profitability/kg.
➢ Focus on increasing market share and moving up the value chain with green chelates and polymers.
➢ Development of silica-based nano additives for anodes to enhance battery capacity and reduce charging time, targeting 65%
gross margins and 50% EBITDA margins; positioned to capitalise on EV battery market growth.
➢ Anticipates generating ~Rs95-100bn over the next five years, with cash flows increasing annually due to higher capacity and
sales volumes. This cash will support growth initiatives and debt reduction.

➢ Concentration risk: High dependency on tyre and auto sectors poses risks, with systemic challenges potentially impacting
demand significantly.
Key Risks ➢ Raw material volatility: CBFS price fluctuations, linked to crude, may affect EBITDA/ton if costs are not fully passed through
➢ Slow capex ramp-up : Potential ramp-up may face delays, with underutilisation/shutdowns impacting the PnL.

PRIVATE & CONFIDENTIAL 47

PNB Housing Finance (PNBHOUSI IN)

➢ Headquartered in Delhi, PNB housing commenced its operation in 1988. PNB Housing is a trusted name in the housing finance
Company
sector, offering a range of Home Loan and related financial products. It has a total AUM of Rs747bn, of which 98% is retail
Profile
(housing + LAP) and the remaining is corporate exposure. Current long-term rating stands at AA+ (stable).

➢ We believe that the company has found the right leadership in Mr. Girish Kousgi for a potential turnaround who can drive the
retail focus and create an effective collection infrastructure. His stint at CanFin is a testimony of his ability to protect asset
quality and then push the paddle on growth in a conducive setting.
➢ With the company focusing on affordable and emerging markets and expansion led growth in sight, we expect the AUM to
grow at a CAGR of ~17-18% over FY25-FY27E. AUM mix by FY27E – Prime (60%), emerging segment (25%) and affordable
segment (15%).
➢ The company’s cost of funds being lower than Homefirst / Aavas, its ability to price the loans will be better (thereby attracting
better asset quality) and hence we believe it has the right to win in the affordable segment.
Key Drivers ➢ Corporate/Developer NPA now stands NIL in a book which now accounts for ~2% of the overall AUM. Credit cost for FY25 to be
near zero with recoveries from written-off pool (corporate and retail both). Post FY25, we expect normalised credit cost of
30bps.
➢ The depleting stress pool has resulted in rating upgrade, while focus on affordable and emerging segments would lead to
improvement in margins, thereby ensuring healthy profitability. Additionally, several key structural changes in underwriting
would ensure much lower volatility from inferior asset quality, similar to the past.
➢ We expect the company to clock ~17-18% growth CAGR with RoAs of ~2.3-2.5% over FY25-FY27E. We believe that the stock is
currently trading at an attractive valuation of ~1x. With visible improvement in the company’s performance, we expect the
multiple to re-rate to ~1.5x-1.6x on sustained execution.

➢ Any slowdown in the economic activity will hamper growth and thereby earnings.
Key Risks ➢ Any lapses in execution in the newly forayed segment of affordable and emerging segment will impact margins , growth and
earnings.

PRIVATE & CONFIDENTIAL 48

Radico Khaitan (RDCK IN)

➢ Radico's transformation from a bulk spirits manufacturer to a leading premium IMFL player is a notable success in the Indian
spirits industry. Starting in 2006 with the launch of Magic Moments Vodka, now India’s best-selling vodka and a global leader,
Company
its premiumisation journey gained momentum in 2016 with the introduction of Rampur Indian Single Malt Whisky. Over past
Profile 15 years, Radico has built a robust premium portfolio, driven by consumer demand and supported by 20+ new brand launches
which straddle across price points.

➢ Radico’s P&A volumes have been growing at 2x the industry, with top end of its portfolio growing even faster. Continued thrust
on building a luxury and premium portfolio (through brands such as Rampur and Sangam in whisky and Jaisalmer in Gin) would
enable improvement in realisation per case and robust growth in the P&A category. We expect 12.6% CAGR in P&A volumes
over FY24-27E.
➢ UP's economic boom is expected to drive liquor premiumisation, positioning Radico, with its robust infrastructure, extensive
reach, and diverse portfolio across price points, to benefit significantly. UP contributes ~25-30% of its revenue.
Key Drivers
➢ Recent policy changes, including excise duty rationalisation in Karnataka, liquor policy favouring private players in Andhra
Pradesh, and clearance of payment overdue in Telangana are further expected to boost volume growth.
➢ We expect 368 bps improvement in EBITDA margin over FY24-27E driven by stabilising RM inflation, improving contribution of
P&A segment and higher operating efficiencies. PAT is expected to grow at ~34% CAGR over FY24-27E.
➢ Improving operating cash flows, stable working capital and no significant capex requirements will aid the company turn net
cash positive by FY27E.

➢ Exposure to state-specific policies and frequent regulatory changes poses operational and compliance challenges, with
potential impacts on revenue and profitability.
Key Risks ➢ Volatility in the prices of key inputs such as ENA and packaging materials could exert pressure on margins.
➢ A highly competitive market, characterised by the presence of domestic and international players, may limit pricing flexibility
and market share expansion.

PRIVATE & CONFIDENTIAL 49

Ramkrishna Forgings (RMKF IN)

➢ RMKF has emerged as one of the top five large, integrated forging companies offering in-house machining capabilities in
Company Eastern India. It primarily caters to OEMs and tier‐1 auto‐component suppliers in the commercial vehicle (CV) segment. RMKF
Profile has a sizable exports base with presence in the North American and European markets. The exports segment has recorded a
35% revenue CAGR over FY20-24. As of Q2FY25, the exports business accounted for ~43% of its total revenue.

➢ We believe that the new product launches, expansion into new product segments with castings, and a healthy pipeline in both
existing CV markets and potential markets such as EV and passenger vehicles (PV), coupled with market share gains, would
drive a double-digit volume growth over the next 2-3 years.
➢ We expect the JV with Titagarh Wagons to be a key growth driver, as it has already secured two sizable orders. The JV is
expected to continue being the preferred partner for railway components in both domestic and international markets.
➢ New order wins of ~Rs15bn, along with the potential orders for assembly bogies for the Vande Bharat train, are encouraging.
Key Drivers
These potential order wins from the Vande Bharat train would present a significant opportunity.
➢ The scalability potential from the recently acquired subsidiaries is expected to make a significant contribution to both the
topline and the bottom line over the next 2-3 years.
➢ The company operates at a healthy EBITDA margin of 20%+, and the higher exports and non-auto mix, turnaround of
subsidiaries, margin expansion in Multitech Auto Pvt Ltd (MAPL) as well as casting business are expected to further enhance
overall consolidated profitability.

➢ Prolonged economic slowdown in the US and Europe.

➢ Longer and deeper CV slowdown in the domestic market.
Key Risks
➢ Any major change in government regulations or cancellation of railway orders.
➢ Any adverse development in terms of freight rate and red sea issue may impact exports profitability meaningfully.

PRIVATE & CONFIDENTIAL 50

Sharda Cropchem (SCHR IN)

➢ Sharda Cropchem specializes in marketing and distributing agrochemicals and non-agrochemicals (conveyor belts, chemicals,
dyes, etc) globally, focusing on identifying off-patent molecules, securing product registrations, and outsourcing formulation
manufacturing, primarily from China
Company
➢ It has a strong global distribution network (operating in 80+ countries) supported by 525 third-party distributors and 500+
Profile
sales personnel
➢ Experienced management with the leadership having over 30+ years experience in chemicals, agrochemicals and related
businesses.

➢ Asset-light business model with a strong balance sheet focused on identifying scalable generic molecules, securing global
product registrations and outsourcing manufacturing - primarily from China.
➢ With Chinese manufacturers looking to increase their dominance in the global generic agrochemical market, we believe
Sharda is well placed to leverage the lower priced supplies emanating from China unlike other Indian peers which rely on
Key Drivers domestic manufacturing.
➢ Company has already built a critical mass in EU and is strengthening its presence across other regions .
➢ This asset light business model based on cost competitive Chinese sourcing, combined with significant investments in global
registrations and distribution, has created a long growth runway and should reflect in a strong profitability growth over FY24-
27E (~EBITDA CAGR of 68%).

➢ Registration Delays: Delays in obtaining registrations for new products could impact revenue, especially during peak seasonal
demand.
Key Risks
➢ Currency risk: Sharda’s majority sales are Euro denominated while its RM sourcing is largely in USD terms- this exposes it to
forex MTM risk emanating from any volatility in USD EUR exchange rates.

PRIVATE & CONFIDENTIAL 51

Strides Pharma Sciences (STR IN)

➢ Strides is a pharmaceutical company based out of Bengaluru with a focus on generic exports. The company derives over 80%
Company
of its revenue from formulation exports to developed markets with US being the largest market. The company also has a
Profile
smaller Emerging Markets piece which comprises a small tender business in Africa and a Branded Generics business.

➢ Strides’ strategy of prioritising profitability/cash generation over revenue growth, backed by strong execution, differentiates it
from Indian generic peers and has created a solid platform for steady and profitable growth.
➢ Going forward, we expect the US/ORM businesses to be the primary growth drivers with a revenue CAGR of 13%/15% backed
by new launches from a large, approved product basket. Investment in differentiated platforms such as controlled substances
and nasal sprays adds to its long-term growth visibility.
Key Drivers ➢ We est Strides’ base business (ex-soft gel) to deliver revenue/EBITDA CAGR of 13%/24% between FY24 and FY27E, and
ROE/adj. ROCE to increase to 18%/21% from 11/13% with potential for further upgrades driven by new launches.
➢ The steady scale-up in OCF, combined with limited organic capex requirements, will lead to meaningful free cash flow
generation (expect FCF of Rs15.4bn exSoft Gel between FY25E and FY27E).
➢ Over this period, we expect the company’s net debt position to improve from ~Rs22bn in FY24 to Rs10.5bn in FY27E, after
accounting for the Rs2.8bn pushdown to OneSource as part of the Soft Gel business.

➢ Deterioration in US Generics market: 50% of the company’s revenue is driven by generic formulation sales to the US. Any
deterioration in the market dynamics similar to FY22/23 could significantly impact profitability.
Key Risks ➢ Currency fluctuation: The company is exposed to currency fluctuation risk, arising primarily from its business presence in
multiple foreign countries. The entire revenue is from exports and hence any adverse movement in the currency rate will
impact overall profitability.

PRIVATE & CONFIDENTIAL 52

TVS Motors (TVSL IN)

➢ TVS Motor Company (TVSL) is the flagship company of the TVS Group and is the third largest two-wheeler (2W) manufacturer
Company
in India with an annual sale of more than 4 million units. The company is gradually emerging as a key export engine, with
Profile
exports contribution rising from 16% in FY18 to ~25% in Q2FY25.

➢ A strong product portfolio and enhanced brand equity are expected to drive market share gains which, combined with the
trend of premiumisation, would lead to robust outperformance in the domestic markets. Meanwhile, a decent recovery in
exports would support volumes growth over the next 2-3 years.
➢ Green shoots of rural recovery, along with a normal monsoon, are expected to support volume growth in the domestic
markets going forward.
Key Drivers
➢ Given the higher contribution from the 125cc+ segment, increased exports and improved average selling price (ASP), we
believe that EBITDA margins would expand by >100bps from current levels over the next two years, which would be a key
trigger for a re-rating of the stock.
➢ The company is eligible for PLI incentives but has not accrued the benefit compared to its peers as of now. Upon accrual, this
amount would further support margin expansion and net profitability.

➢ Slower recovery in both domestic and international geographies.

➢ Major failure of new product launches.
Key Risks
➢ Any major disappointment from its key subsidiary or sudden huge losses.
➢ Any major change in government regulation in India and overseas markets.

PRIVATE & CONFIDENTIAL 53

Investment Banking

Capital Markets
7. Appendix
Institutional Equities

With DAM Capital, It’s Possible!

54
Appendix 1 – Top Capex Announcements by Company & Industry (Q1-Q3FY25) (1/2)
Company Name Project Name Cost (Rs m) Industry
TATA Power Co Rajasthan Renewable Energy Project 7,50,000 Renewable electricity
Bharat Petroleum Corpn Oil Refinery and Petrochemical Complex Project 6,00,000 Refinery
Welspun New Energy. Bulandshahr (UP) Green Hydrogen or Ammonia Plant Project 4,00,000 Inorganic chemicals
Ministry of Defence Mazagon Guided Missile Destroyers (Warships) Project (under P-15B plan) 2,96,437 Other transport equipment & ancillaries
J S W Green Mobility Chhatrapati Sambhajinagar Electric & Hybrid Car Mfg Plant 2,72,000 Passenger vehicles
J S W Energy P S P Eleven Nagpur Lithium-Ion Battery Manufacturing Plant Project 2,50,000 Storage batteries
Toyota Kirloskar Motor Auric City Electric & Hybrid Passenger Cars Manufacturing Plant 2,12,730 Passenger vehicles
Megha Engineering & Infrastructures Kamod & Ghosla Pumped Storage Power Projects 2,11,000 Conventional electricity
Deendayal Port Trust Tuna Tekra Satellite Port Project 2,00,000 Shipping transport
Valor Estate Ltd. Mumbai (BKC) Mixed-use Residential & Commercial Project 2,00,000 Housing construction
Hygenco Green Energies Prayagraj Green Hydrogen Facility Project 1,60,000 Inorganic chemicals
Skoda Auto Volkswagen India Chakan Electric & Hybrid Cars Manufacturing Plant Project 1,50,000 Passenger vehicles
Avaada Aqua Batteries Pvt. Kumbhavade & Pawana Falyan Pumped Storage Power Project 1,40,000 Conventional electricity
H P C L Renewable & Green Energy Uran (Raigad) Green Hydrogen & Derivative Plant Project (at MahaGenco's gas-based power project) 1,20,000 Inorganic chemicals
L & T Realty Developers Bandra Premium Residential Project 85,000 Housing construction
Chevron Global Technology & Services Bangalore Chevron Engineering & Innovation Excellence Center (ENGINE) Project 83,000 Commercial complexes
Hyderabad Metro Rail RGIA-Fourth City Metro Rail (Hyderabad Metro Rail (Phase II)) 80,000 Railway transport
N H P C Ltd. 1,200 Mw Ists Connected Solar Power Project 78,000 Renewable Electricity
Solar Energy Corpn. Of India 1,200 Mw Ists Connected Solar Power Project (Tranche 16) 78,000 Renewable Electricity
Greenko Energies Valasamalai RF TN-21 Off-Stream Closed Loop Pumped Storage 65,450 Conventional electricity
Nayara Energy Ltd Vadinar Polypropylene Manufacturing Unit Project 61,000 Polymers
Greenko Energies Navappatti TN-11 Off-Stream Closed Loop Pumped Storage 59,475 Conventional electricity
Himadri Speciality Chemical Madhya Pradesh Lithium Iron Phosphate (Chemical) Plant 54,250 Inorganic chemicals
Shyam Metalics & Energy Madhya Pradesh Steel Plant 50,400 Steel
Grew Energy Pvt. Ltd. Bhagthali Industrial Zone Solar Modules Manufacturing Facility 45,000 Other Electronics
Northeast Frontier Railways New Bongaigaon-Rangiya-Kamakhya (Agthori) Rail Line Doubling Project (Gati Shakti) 38,900 Railway transport infrastructure services
Capitaland India Pvt Ltd. Gurgaon International Tech Park Project 27,100 Computer software
Juniper Green Energy Pvt. Ltd. Fatehgarh (Fdre) Wind Power Plant Project 24,120 Renewable Electricity
East Central Railway Sakri-Laukaha Bazar-Nirmali & Saharsa-Forbesganj Gauge Conversion Project (Gati Shakti) 23,832 Railway transport infrastructure services
Hartek Power Pvt. Ltd. Rajasthan Ground Mounted Solar Pv Power Plant Project 19,500 Renewable Electricity
G A I L (India) Ltd. Vijaipur (MP) To Pata (UP) Petroleum Liquid Products Pipeline 17,920 Storage & Distribution
Source: Prime Database, SEBI, DAM Capital Research Note: List updated as of 20Th Dec’24

PRIVATE & CONFIDENTIAL 55

Appendix 1 – Top Capex Announcements by Company & Industry (Q1-Q3FY25) (2/2)
Company Name Project Name Cost (Rs m) Industry
Six Lane access controlled Highway from Junction with Jaitpur-Pushta Road-Junction with Sector-62/65
National Highways Authority of India 17,290 Road transport infrastructure services
dividing Road on Faridabad-Ballabhgarh Bypass (NH-148NA) Project (Pkg-2) (Delhi-Mumbai Expressway)
Water Resources Department Madhya Pradesh Suwasra-Shamgarh Micro Irrigation Project 17,084 Irrigation
Vardhman Textiles Ltd. Spinning Capacity Expansion Project 16,600 Cotton & Blended Yarn
Transmission System Strengthening Scheme for Evacuation of Power from Solar Energy Zones in Rajasthan
Powergrid Aligard Sikar Transmission Ltd 15,160 Electricity transmission
(8.1 GW) under Phase-II Part-D Project
Rail Vikas Nigam Ltd Allahabad-Varanasi Rail Line Doubling Project (Gati Shakti) 15,000 Railway transport infrastructure services
Hindustan Coca Col Beverages Pvt Ltd Bandathimmapur (AVINYA) Carbonated Beverages, Juices & Drinking Water Plant Phase 1 Project 14,090 Processed foods
Bharat Petroleum Corpn. Ltd. Sustainable Aviation Fuel (Saf) Units Project 14,000 Refinery
Petronet L N G Ltd Dahej Storage Tanks (T-107 & T-108) & Truck Loading Bays Project 12,460 Natural gas trading & distribution
Mahindra Susten Pvt. Ltd. Maharashtra Hybrid Power Project 12,000 Renewable Electricity
Hesaraghatta Cross (Nagasandra)-BIEC (Madavara) Metro Rail (Ext.lines of Phase-I including Reach 3C)
Bangalore Mtero Rail Corpn Ltd. 11,680 Railway transport infrastructure services
(Namma Metro Phase 2)Project
T P Saurya Ltd Neemuch (Solar Park) Solar Power Project 1 11,050 Renewable electricity
G R Galgalia Bahadurganj Highway Pvt Ltd Galgalia-Bahadurganj (NH327E) Four Lane Highway Project (Package-1) 10,970 Road transport infrastructure services
G R Bahadurganj Araria Highway Pvt Ltd Bahadurganj-Araria (NH327E) Four Lane Highway Project (Package-2) 10,817 Road transport infrastructure services
T P Saurya Ltd Neemuch (Solar Park) Solar Power Project 2 10,400 Renewable electricity
Numax Realcon Pvt. Ltd. Muzaffarnagar Integrated Township Project 10,000 Housing Construction
J S W STEEL LTD. Torangullu (Vijayanagar) Blast Furnace-3 Revamp & Capacity up-gradation Project 10,000 Steel
Jindal Panther Cement Pvt Ltd Angul Cement Manufacturing Unit Project 9,550 Cement
South Central Railways Gudur-Renigunta Third Rail Line Project 8,840 Railway Transport Infrastructure Services
Greenbase Industrial Parks Pvt. Oragadam Industrial Park Project 8,000 Commercial Complexes
Phoenix Mills Ltd. Thane Premium Hotel Project 8,000 Hotels & Restaurants
Bajaj Hindusthan Sugar Ltd. Kastua & Kundarkhi Molasses/Cane Syrup/Grain Based Distillery And Co-Generation Power Plant Project 7,876 Organic Chemicals
Phoenix Spaces Pvt Ltd Puppalaguda (Survey No.285) IT/ITES SEZ Project 7,730 Computer software
Shyam Sel & Power Ltd. Madhya Pradesh Ss Bright Bars & Ss Wires Manufacturing Unit 7,500 Steel
Ministry of Ayush Fatehpur Ayush Hospital Project 7,394 Health services
Hindustan Coca Cola Beverages Pvt. Peddapalle Greenfield Manufacturing Plant Project 7,000 Processed Foods
Max Steel & Power Pvt. Ltd. Mohbhatta & Kukrachunda Greenfield Steel Plant Project 6,738 Sponge Iron
Simpolo Vitrified Pvt. Ltd. Malia (Morbi) Ceramic Products Plant Project 6,500 Ceramic Products
Tata Sons Pvt. Ltd. Ayodhya Ram Temple Museum Project 6,500 Tourism
Ampin Energy Transition Pvt. Fatehgarh Wind Power Plant Project 6,237 Renewable Electricity
Source: Prime Database, SEBI, DAM Capital Research Note: List updated as of 20Th Dec’24

PRIVATE & CONFIDENTIAL 56

Appendix 2 - List of companies where paper supply is expected in the near future
Approved IPO's by SEBI > Rs 10,000 mn Awaiting Approval from SEBI > Rs 10,000 mn QIP Announced > Rs 10,000 mn
Estimated
Amount Amount Amount
Company (Rs m) Company (Rs m) Company (Rs m)
NATIONAL SECURITIES DEPOSITORY LTD. 4,500 LG ELECTRONICS INDIA LTD. 15,000 AXIS BANK LTD. 20,000
AVANSE FINANCIAL SERVICES LTD. 3,500 HDB FINANCIAL SERVICES LTD. 12,500 INDUSIND BANK LTD. 10,000
MANJUSHREE TECHNOPACK LTD. 3,000 HEXAWARE TECHNOLOGIES LTD. 9,950 UNION BANK OF INDIA 6,000
ECOM EXPRESS LTD. 2,600 SCHLOSS BANGALORE LTD. 5,000 OBEROI REALTY LTD. 6,000
SK FINANCE LTD. 2,200 ATHER ENERGY LTD. 4,500 GMR AIRPORTS LTD. 5,000
KALPATARU LTD. 1,590 JSW CEMENT LTD. 4,000 JINDAL STAINLESS LTD. 5,000
ASIRVAD MICRO FINANCE LTD. 1,500 SMPP LTD. 4,000 AU SMALL FINANCE BANK LTD. 5,000
BELSTAR MICROFINANCE LTD. 1,300 HERO FINCORP LTD. 3,668 TORRENT PHARMACEUTICALS LTD. 5,000
PARAS HEALTHCARE LTD. 1,200 CONTINUUM GREEN ENERGY LTD. 3,650 INDIAN BANK 5,000
RUBICON RESEARCH LTD. 1,085 DR.AGARWAL'S HEALTH CARE LTD. 3,500 INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. 4,500
TRUALT BIOENERGY LTD. 1,000 AEGIS VOPAK TERMINALS LTD. 3,500 RBL BANK LTD. 3,500
BELRISE INDUSTRIES LTD. 2,150 CENTRAL BANK OF INDIA 3,200
AJAX ENGINEERING LTD. 2,000 RELIANCE INFRASTRUCTURE LTD. 3,000
TRAVEL FOOD SERVICES LTD. 2,000 RELIANCE POWER LTD. 3,000
MOURI TECH LTD. 1,500 MANKIND PHARMA LTD. 3,000
VIKRAM SOLAR LTD. 1,500 GMR POWER & URBAN INFRA LTD. 3,000
EAAA INDIA ALTERNATIVES LTD. 1,500 KPIT TECHNOLOGIES LTD. 2,880
AYE FINANCE LTD. 1,450 SHREE RENUKA SUGARS LTD. 2,500
ADITYA INFOTECH LTD. 1,300 UCO BANK 2,000
VARINDERA CONSTRUCTIONS LTD. 1,200 PUNJAB & SIND BANK 2,000
SAATVIK GREEN ENERGY LTD. 1,150 INDIAN OVERSEAS BANK 2,000
CASAGRAND PREMIER BUILDER LTD. 1,100 ANANT RAJ LTD. 2,000
VIKRAN ENGINEERING LTD. 1,000 CAPRI GLOBAL CAPITAL LTD. 2,000
CRIZAC LTD. 1,000 ZEE ENTERTAINMENT ENTERPRISES LTD. 2,000
BLUESTONE JEWELLERY & LIFESTYLE PVT.LTD. 1,000 PC JEWELLER LTD. 1,500
ARIHANT SUPERSTRUCTURES LTD. 1,200
KALPATARU PROJECTS INTERNATIONAL LTD. 1,000
TIME TECHNOPLAST LTD. 1,000
SANDUR MANGANESE & IRON ORES LTD.,THE 1,000
DISH TV INDIA LTD. 1,000
PURAVANKARA LTD. 1,000
CHEMPLAST SANMAR LTD. 1,000
CAN FIN HOMES LTD. 1,000
PRIVI SPECIALITY CHEMICALS LTD. 1,000
JINDAL SAW LTD. 1,000
Source: Prime Database, SEBI, DAM Capital Research Note: List updated as of 20Th Dec’24

PRIVATE & CONFIDENTIAL 57

Appendix 3 - Large and Midcap stocks >25% FY26E PAT growth as per consensus…
NSE-100 NSE Midcap-150… ...NSE Midcap-150
FY26E FY26E FY26E
PAT Gwth PAT Gwth PAT Gwth
Company Sector (%) Company Sector (%) Company Sector (%)
Tata Steel Ltd Metals & Mining 152.7 Mangalore Refinery & Petrochemicals
Oil &Ltd
Gas 162.3 Bharat Dynamics Ltd Capital Goods 35.9
Bharat Heavy Electricals Ltd Capital Goods 144.2 Lloyds Metals & Energy Ltd Metals & Mining 157.1 ACC Ltd Cement 35.8
Zomato Ltd Retailing 138.3 UPL Ltd Agro Chem & Fertilizers 154.2 Sona Blw Precision Forgings Ltd Auto Ancillary 35.5
Adani Green Energy Ltd Power 97.7 FSN E-Commerce Ventures Ltd Retailing 135.6 Gland Pharma Ltd Healthcare 33.8
JSW Steel Ltd Metals & Mining 80.8 PB Fintech Ltd NBFC 117.4 Poonawalla Fincorp Ltd NBFC 32.8
Jindal Steel & Power Ltd Metals & Mining 58.8 Delhivery Ltd Transportation & Logistics 105.1 Max Healthcare Institute Ltd Healthcare Services 32.1
Shree Cement Ltd Cement 49.7 Biocon Ltd Healthcare 103.0 Thermax Ltd Capital Goods 31.7
Adani Energy Solutions Ltd Power 49.5 APL Apollo Tubes Ltd Capital Goods 66.7 Timken India Ltd Auto Ancillary 31.6
Grasim Industries Ltd Cement 48.1 IDFC First Bank Ltd Banks Pvt 65.2 IRB Infrastructure Developers LtdConstruction 31.5
Trent Ltd Retailing 43.8 Steel Authority of India Ltd Metals & Mining 62.6 Ipca Laboratories Ltd Healthcare 31.1
Bharti Airtel Ltd Telecommunication 41.4 Suzlon Energy Ltd Capital Goods 60.8 AU Small Finance Bank Ltd Banks Pvt 31.1
Ambuja Cements Ltd Cement 40.1 SJVN Ltd Power 59.7 Astral Ltd Capital Goods 30.9
Indian Oil Corp Ltd Oil & Gas 38.2 Yes Bank Ltd Banks Pvt 55.3 Apollo Tyres Ltd Auto Ancillary 30.0
UltraTech Cement Ltd Cement 37.5 Jubilant Foodworks Ltd Hotels, Restaurants & Tourism 54.4 Bharat Forge Ltd Auto Ancillary 29.8
Macrotech Developers Ltd Realty 36.6 Tata Communications Ltd Telecommunication 54.4 Solar Industries India Ltd Chemicals 29.2
Titan Co Ltd Retailing 34.8 Gujarat Fluorochemicals Ltd Chemicals 53.7 Bayer CropScience Ltd/India Agro Chem & Fertilizers 29.0
Apollo Hospitals Enterprise Ltd Healthcare Services 33.9 Linde India Ltd Chemicals 51.5 Bank of Maharashtra Banks PSU 28.1
Vedanta Ltd Metals & Mining 33.4 Prestige Estates Projects Ltd Realty 48.6 BSE Ltd NBFC 27.7
Info Edge India Ltd IT Services 33.4 Hindustan Petroleum Corp Ltd Oil & Gas 46.1 Deepak Nitrite Ltd Chemicals 27.5
Tech Mahindra Ltd IT Services 33.3 Tata Chemicals Ltd Chemicals 45.6 Endurance Technologies Ltd Auto Ancillary 27.2
Samvardhana Motherson International
Auto Ancillary
Ltd 31.9 Kalyan Jewellers India Ltd Retailing 44.5 UNO Minda Ltd Auto Ancillary 27.2
Torrent Pharmaceuticals Ltd Healthcare 30.3 United Breweries Ltd FMCG 42.3 Housing & Urban Development Corp NBFCLtd 27.1
InterGlobe Aviation Ltd Transportation & Logistics 29.3 Godrej Properties Ltd Realty 41.4 Metro Brands Ltd Retailing 26.8
Cholamandalam Investment and NBFC
Finance Co Ltd 29.3 JK Cement Ltd Cement 40.8 ZF Commercial Vehicle Control Systems
Auto Ancillary
India Ltd 26.7
JSW Energy Ltd Power 29.2 Bharti Hexacom Ltd Telecommunication 40.5 Mahindra & Mahindra Financial Services
NBFC Ltd 26.1
Divi's Laboratories Ltd Healthcare 28.3 Coforge Ltd IT Services 39.5 Fortis Healthcare Ltd Healthcare Services 26.0
Varun Beverages Ltd FMCG 28.2 SRF Ltd Chemicals 39.4 Syngene International Ltd Healthcare 25.7
Bajaj Finance Ltd NBFC 27.3 Jindal Stainless Ltd Metals & Mining 39.2 Persistent Systems Ltd IT Services 25.7
NHPC Ltd Power 27.0 Dalmia Bharat Ltd Cement 37.7 Motherson Sumi Wiring India Ltd Auto Ancillary 25.6
Tata Consumer Products Ltd FMCG 26.5 SBI Cards & Payment Services LtdNBFC 37.0 KEI Industries Ltd Capital Goods 25.6
Havells India Ltd Consumer Durables 26.5 Patanjali Foods Ltd FMCG 36.6 Phoenix Mills Ltd/The Realty 25.5
IndusInd Bank Ltd Banks Pvt 25.3 Dixon Technologies India Ltd Consumer Durables 36.5 Aditya Birla Capital Ltd NBFC 25.0
CG Power & Industrial Solutions Ltd
Capital Goods 36.1 Voltas Ltd Consumer Durables 24.9
Source: Bloomberg, DAM Capital Research

PRIVATE & CONFIDENTIAL 58

…Appendix 3 - Small cap stocks >25% FY26E PAT growth as per consensus
FY26E FY26E FY26E
PAT Gwth PAT Gwth PAT Gwth
Company Sector (%) Company Sector (%) Company Sector (%)
VIP Industries Ltd Consumer Durables 657.2 Blue Dart Express Ltd Transportation & Logistics 44.9 Quess Corp Ltd Others 30.6
Chemplast Sanmar Ltd Chemicals 353.8 Intellect Design Arena Ltd IT Services 44.5 Firstsource Solutions Ltd IT Services 30.6
Chennai Petroleum Corp Ltd Oil & Gas 282.8 Schneider Electric Infrastructure Ltd
Capital Goods 44.3 Clean Science & Technology Ltd Chemicals 30.5
Nuvoco Vistas Corp Ltd Cement 249.7 Piramal Enterprises Ltd NBFC 43.9 Concord Biotech Ltd Healthcare 30.3
HEG Ltd Capital Goods 248.4 CE Info Systems Ltd IT Services 43.2 Ratnamani Metals & Tubes Ltd Metals & Mining 30.1
TVS Supply Chain Solutions Ltd/India
Transportation & Logistics 186.1 Eris Lifesciences Ltd Healthcare 43.1 Rainbow Children's Medicare Ltd Healthcare Services 30.1
PVR Inox Ltd Media & Entertainment 171.8 Tbo Tek Ltd Hotels, Restaurants & Tourism 43.1 Happiest Minds Technologies LtdIT Services 29.9
Piramal Pharma Ltd Healthcare 143.3 Go Digit General Insurance Ltd NBFC 41.7 Latent View Analytics Ltd IT Services 29.7
Sapphire Foods India Ltd Hotels, Restaurants & Tourism 122.7 BEML Ltd Capital Goods 41.5 Ramkrishna Forgings Ltd Auto Ancillary 29.1
Devyani International Ltd Hotels, Restaurants & Tourism 118.2 Kaynes Technology India Ltd Capital Goods 40.9 Saregama India Ltd Media & Entertainment 29.1
Westlife Foodworld Ltd Hotels, Restaurants & Tourism 110.8 Asahi India Glass Ltd Auto Ancillary 40.7 Anand Rathi Wealth Ltd NBFC 28.9
SignatureGlobal India Ltd Realty 106.3 PCBL Ltd /India Chemicals 40.2 Usha Martin Ltd Capital Goods 28.9
Sterling and Wilson Renewable Construction 104.2 CreditAccess Grameen Ltd NBFC 40.0 Kirloskar Oil Engines Ltd Capital Goods 28.8
Honasa Consumer Ltd FMCG 100.2 HFCL Ltd Telecommunication 39.8 Zee Entertainment Enterprises LtdMedia & Entertainment 28.8
Birla Corp Ltd Cement 92.6 GE T&D India Ltd Capital Goods 39.2 Alembic Pharmaceuticals Ltd Healthcare 28.8
Chalet Hotels Ltd Hotels, Restaurants & Tourism 91.9 Garden Reach Shipbuilders & Engineers
Capital Ltd
Goods 39.0 Granules India Ltd Healthcare 28.8
Sobha Ltd Realty 89.8 Whirlpool of India Ltd Consumer Durables 38.9 Poly Medicure Ltd Healthcare Services 28.0
Equitas Small Finance Bank Ltd Banks Pvt 88.5 Titagarh Rail System Ltd Capital Goods 37.0 Multi Commodity Exchange of IndiaNBFC
Ltd 27.8
PTC Industries Ltd Capital Goods 85.4 NBCC India Ltd Construction 36.6 Atul Ltd Chemicals 27.3
Laurus Labs Ltd Healthcare 81.2 Trident Ltd/India Textiles, Apparels & Accessories 36.2 SBFC Finance Ltd NBFC 27.3
Inox Wind Ltd Capital Goods 80.9 Aster DM Healthcare Ltd Healthcare Services 35.9 Ujjivan Small Finance Bank Ltd Banks Pvt 26.8
Aditya Birla Real Estate Ltd Realty 78.7 Balrampur Chini Mills Ltd FMCG 35.7 Vijaya Diagnostic Centre Pvt Ltd Healthcare Services 26.7
Avanti Feeds Ltd FMCG 78.3 Radico Khaitan Ltd FMCG 35.7 Action Construction Equipment LtdCapital Goods 26.6
Craftsman Automation Ltd Auto Ancillary 70.1 Praj Industries Ltd Capital Goods 35.3 Data Patterns India Ltd Capital Goods 26.4
IIFL Finance Ltd NBFC 64.3 Engineers India Ltd Construction 35.1 Metropolis Healthcare Ltd Healthcare Services 26.3
Century Plyboards India Ltd Home Improvement 63.4 Sonata Software Ltd IT Services 35.0 Affle India Ltd Media & Entertainment 26.2
Godawari Power and Ispat Ltd Capital Goods 63.2 Jubilant Ingrevia Ltd Chemicals 35.0 Brigade Enterprises Ltd Realty 26.1
Capri Global Capital Ltd NBFC 62.2 Techno Electric & Engineering Co Construction
Ltd 34.3 Gujarat Ambuja Exports Ltd FMCG 26.1
Ramco Cements Ltd/The Cement 61.6 Jyoti CNC Automation Ltd Capital Goods 34.3 JK Tyre & Industries Ltd Auto Ancillary 25.9
KEC International Ltd Capital Goods 59.0 Cholamandalam Financial Holdings NBFCLtd 33.9 RITES Ltd Realty 25.8
Archean Chemical Industries Ltd Chemicals 54.9 Kalpataru Projects International Limited
Construction 33.7 Crompton Greaves Consumer Electricals
ConsumerLtd Durables 25.8
Suven Pharmaceuticals Ltd Healthcare 53.6 Alkyl Amines Chemicals Chemicals 33.5 Emcure Pharmaceuticals Ltd Healthcare 25.8
Varroc Engineering Ltd Auto Ancillary 53.1 BLS International Services Ltd Hotels, Restaurants & Tourism 32.9 V-Guard Industries Ltd Consumer Durables 25.6
Syrma SGS Technology Ltd Capital Goods 51.7 Anant Raj Ltd Realty 32.8 Home First Finance Co India Ltd NBFC 25.5
JK Lakshmi Cement Ltd Cement 51.2 Balaji Amines Ltd Chemicals 32.2 Raymond Ltd Textiles, Apparels & Accessories 25.2
RBL Bank Ltd Banks Pvt 50.6 KSB Ltd Capital Goods 32.0 Elecon Engineering Co Ltd Capital Goods 25.2
Amber Enterprises India Ltd Consumer Durables 50.2 Ceat Ltd Auto Ancillary 31.9 Cyient Ltd IT Services 25.1
Lemon Tree Hotels Ltd Hotels, Restaurants & Tourism 48.6 Vinati Organics Ltd Chemicals 31.9 Godrej Agrovet Ltd FMCG 25.1
Navin Fluorine International Ltd Chemicals 48.5 Triveni Engineering & Industries Ltd
FMCG 31.5 Doms Industries Ltd FMCG 25.1
RR Kabel Ltd Consumer Durables 46.1 Campus Activewear Ltd Retailing 31.5 NCC Ltd/India Construction 25.1
Shyam Metalics & Energy Ltd Metals & Mining 46.1 Graphite India Ltd Capital Goods 31.2 Minda Corp Ltd Auto Ancillary 25.1
Aarti Industries Ltd Chemicals 45.5 CCL Products India Ltd FMCG 31.0 Blue Star Ltd Consumer Durables 25.0
Netweb Technologies India Ltd IT Services 45.1 Jupiter Wagons Ltd Capital Goods 30.9

Source: Bloomberg, DAM Capital Research

PRIVATE & CONFIDENTIAL 59

Investment Banking

Capital Markets
8. Valuation Guide
Institutional Equities

With DAM Capital, It’s Possible!

60
 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Agrochemicals & Seeds 13,942 8 39 22 18 3.5 3.0 2.6 16 13 11 12 14 15 0.5 0.6 0.7
Dhanuka Agritech 714 1,360 1,977 45 65 79 95 22 21 17 14 4.4 3.6 2.9 14 12 9 22 23 22 0.6 0.6 0.6
Kaveri Seed 524 874 976 12 48 61 72 7 18 14 12 3.1 2.6 2.2 16 12 9 18 20 19 0.6 0.6 0.6
PI Industries 6,364 3,600 4,189 16 112 129 150 11 32 28 24 5.4 4.6 3.9 23 19 16 18 18 18 0.4 0.4 0.4
Rallis India 676 298 350 17 9 13 16 28 34 23 19 3.0 2.7 2.5 15 12 9 9 12 14 0.9 1.4 1.7
Sharda Cropchem 838 797 857 7 34 45 56 LP 23 18 14 2.9 2.6 2.2 11 9 7 13 15 17 1.0 1.0 1.0
UPL 4,826 521 452 (13) 9 32 48 LP 56 16 11 1.2 1.1 1.0 8 7 6 2 7 9 0.4 0.6 1.0
Alcoholic Beverages 24,620 23 83 67 57 13.8 12.4 11.1 55 45 39 18 19 21 0.5 0.7 0.8
Radico Khaitan 3,920 2,515 2,832 13 28 36 47 34 91 69 53 12.2 10.6 9.0 53 42 34 14 16 18 0.2 0.2 0.2
Sula Vineyards 399 406 537 32 10 13 16 13 41 31 26 6.3 6.2 6.0 21 17 15 15 20 24 2.7 3.0 3.2
United Breweries 6,393 2,075 2,300 11 23 32 40 37 89 64 52 12.3 11.1 9.8 54 41 34 14 18 20 0.6 0.7 0.8
United Spirits 13,908 1,641 1,720 5 20 24 27 14 80 69 61 15.1 13.6 12.4 57 49 44 20 21 21 0.5 0.7 0.9
Auto Ancillary 22,390 20 45 35 28 6.5 5.6 4.7 21 18 15 15 17 18 0.4 0.4 0.4
Apollo Tyres 3,706 501 565 13 21 29 35 8 23 18 14 2.1 1.9 1.7 9 7 6 9 11 13 0.7 0.7 0.7
Bharat Forge 7,023 1,261 1,550 23 25 32 39 23 51 40 33 7.4 6.5 5.6 22 19 17 15 17 18 0.6 0.6 0.6
CEAT 1,447 3,070 3,600 17 140 207 240 13 22 15 13 2.8 2.4 2.0 9 7 6 13 17 17 1.0 1.0 1.0
JK Tyre 1,187 372 490 32 27 32 36 6 14 12 10 1.9 1.7 1.4 7 6 5 15 15 15 0.5 0.5 0.5
Ramkrishna Forgings 1,909 906 1,230 36 27 33 41 30 33 27 22 5.1 4.4 3.7 18 15 12 17 17 18 0.2 0.2 0.2
UNO Minda 7,119 1,064 1,080 1 17 22 28 24 62 49 37 9.8 8.2 6.7 33 27 21 17 18 20 0.1 0.1 0.1
Automobiles 206,962 13 25 21 18 5.8 4.7 3.9 17 15 12 25 24 23 0.9 1.0 1.0
Ashok Leyland 7,738 226 325 44 10 13 15 19 22 17 15 6.0 4.7 3.7 13 11 9 31 31 29 1.3 1.3 1.3
Bajaj Auto 28,711 8,824 9,750 10 304 372 424 17 29 24 21 8.5 7.3 6.1 23 19 16 32 33 32 1.7 2.2 2.2
Escorts Kubota 4,349 3,336 3,550 6 107 119 142 14 31 28 23 3.5 2.8 2.5 24 21 17 12 11 11 0.2 0.2 0.2
Hero MotoCorp 9,794 4,203 5,250 25 232 269 292 12 18 16 14 4.2 3.7 3.3 13 11 10 24 26 24 3.3 3.3 3.3
Hyundai Motor 17,052 1,801 2,320 29 68 86 101 11 26 21 18 10.0 7.3 5.5 15 12 9 44 40 35 1.1 1.1 1.1
M&M 44,999 3,106 3,551 14 107 129 148 19 29 24 21 5.9 4.9 4.0 22 18 15 22 22 21 0.5 0.5 0.5
Maruti Suzuki 43,064 11,756 12,750 8 481 559 638 15 24 21 18 3.8 3.3 2.9 18 16 14 17 17 17 0.5 0.5 0.5
Tata Motors 37,893 776 870 12 58 62 78 (3) 13 13 10 2.6 2.2 1.8 6 6 4 21 19 20 0.8 0.8 0.8
TVS Motor 13,362 2,414 3,350 39 57 73 87 26 43 33 28 11.4 8.7 6.8 26 21 18 30 30 28 0.3 0.3 0.3

PRIVATE & CONFIDENTIAL

 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Banks 467,237 13 16 14 13 2.5 2.2 1.9 - - - 15 15 15 1.1 1.2 1.2
AU Small Finance 4,858 560 760 36 29 39 51 30 19 14 11 2.5 2.1 1.8 - - - 13 15 16 0.2 0.3 0.3
Axis Bank 38,349 1,063 1,360 28 84 95 109 10 13 11 10 1.9 1.6 1.4 - - - 15 14 14 0.1 0.2 0.2
Bank of Baroda 13,736 228 310 36 37 43 51 14 6 5 4 1.0 0.9 0.8 - - - 16 16 16 3.3 3.8 3.8
Equitas Small Finance 921 69 90 30 4 9 12 22 20 8 6 1.3 1.2 1.0 - - - 6 14 16 1.4 1.7 1.7
Federal Bank 5,647 198 230 16 17 21 25 16 11 9 8 1.5 1.3 1.1 - - - 13 14 14 0.8 1.0 1.0
Canara Bank 10,287 97 128 32 18 20 23 12 5 5 4 1.0 0.9 0.8 - - - 18 17 17 3.3 3.8 3.8
HDFC Bank 152,432 1,711 2,130 25 88 102 116 13 19 17 15 2.7 2.4 2.1 - - - 14 14 14 1.1 1.3 1.3
ICICI Bank 103,978 1,264 1,465 16 67 76 87 14 19 17 14 3.3 2.8 2.4 - - - 17 17 16 0.8 0.9 0.9
IDFC First Bank 5,340 63 77 23 3 5 6 9 22 13 11 1.3 1.2 1.1 - - - 6 9 9 - - -
IndusInd Bank 8,805 970 1,200 24 77 104 129 4 13 9 7 1.2 1.0 0.9 - - - 9 11 12 1.0 1.5 1.9
Kotak Bank 41,226 1,780 2,020 14 82 85 95 11 22 21 19 3.2 2.8 2.4 - - - 15 13 13 0.1 0.1 0.1
SBI 80,735 776 950 22 80 90 102 14 10 9 8 1.8 1.5 1.3 - - - 18 17 16 1.8 2.0 2.0
Ujjivan Small Finance 768 34 49 44 5 6 8 4 6 6 5 1.1 0.9 0.8 - - - 16 16 17 4.4 2.9 3.5
NBFC 151,056 20 20 16 13 3.4 2.9 2.4 - - - 17 18 18 1.4 1.6 1.6
AAVAS Financiers 1,559 1,691 2,100 24 72 86 104 19 24 20 16 3.1 2.7 2.3 - - - 13 14 14 - - -
Aptus Value 1,674 287 360 25 15 18 22 22 19 16 13 3.3 2.9 2.5 - - - 17 18 19 1.6 1.6 1.6
Bajaj Finance 53,006 7,349 9,000 22 271 350 444 24 27 21 17 5.0 4.1 3.4 - - - 18 20 21 0.5 0.7 0.7
Can Fin Homes 1,083 698 920 32 66 77 89 17 11 9 8 1.8 1.5 1.3 - - - 17 17 17 1.0 1.1 1.2
Chola Invt & Fin 12,679 1,294 1,600 24 50 69 93 32 26 19 14 4.7 3.6 2.9 - - - 18 19 21 0.3 0.3 0.3
Five-Star Business Fin 2,538 742 750 1 31 35 42 13 24 21 18 3.6 3.0 2.6 - - - 15 14 15 - - -
Fusion Micro Finance 204 173 194 12 (40) 39 44 (5) na 4 4 0.7 0.6 0.5 - - - (17) 14 13 - - -
Home First Fin 1,087 1,040 1,400 35 44 55 69 26 24 19 15 3.7 3.1 2.6 - - - 16 17 17 0.4 0.5 0.5
IIFL Finance * 2,000 404 UR - 62 82 - 29 6 5 - 1.2 1.0 - - - - 18 20 - 2.6 3.4 -
LIC Housing 3,809 594 850 43 94 99 105 7 6 6 6 0.9 0.8 0.7 - - - 14 13 13 1.9 2.2 2.2
Manappuram Fin * 1,768 179 UR - 17 27 - 3 11 7 - 1.2 1.0 - - - - 11 16 - 2.2 2.2 -
MAS Financial Services 552 261 300 15 16 21 25 19 16 13 10 1.9 1.7 1.4 - - - 12 13 14 - - -
M&M Financial 3,901 271 330 22 18 24 29 26 15 11 9 1.7 1.6 1.4 - - - 11 14 15 2.6 3.0 3.0
Muthoot Finance 10,225 2,186 2,450 12 120 144 169 19 18 15 13 3.1 2.7 2.3 - - - 17 18 18 1.2 1.4 1.4
PNB Housing Fin 2,716 897 1,350 50 71 84 105 22 13 11 9 1.4 1.2 1.1 - - - 11 12 13 - - -
Power Fin Corpn 17,169 447 680 52 48 54 61 12 9 8 7 1.6 1.4 1.3 - - - 17 17 17 3.2 3.6 3.6
REC 15,726 513 755 47 60 69 80 12 9 7 6 1.7 1.4 1.2 - - - 20 20 20 3.5 4.1 4.7
Repco Home 303 416 540 30 67 72 79 8 6 6 5 0.8 0.7 0.6 - - - 13 12 12 0.8 1.0 1.0
Shriram Finance 13,012 2,970 3,850 30 227 275 322 19 13 11 9 2.0 1.7 1.5 - - - 15 16 16 1.5 1.5 1.5
Spandana Sphoorty 278 334 400 20 (57) 53 69 (1) na 6 5 0.7 0.7 0.6 - - - (12) 10 12 - - -
Sundaram Finance 5,768 4,456 4,000 (10) 138 161 192 14 32 28 23 4.9 4.3 3.7 - - - 15 16 16 0.7 0.7 0.7

PRIVATE & CONFIDENTIAL

 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Capital Goods 102,679 36 85 63 49 17.6 14.1 11.2 55 42 34 22 24 24 0.4 0.4 0.5
ABB 16,346 6,620 7,200 9 87 100 120 27 76 66 55 19.6 16.4 13.7 60 52 44 28 27 27 0.5 0.5 0.6
Afcons Infrastructure 2,265 529 610 15 15 18 23 18 35 29 23 3.6 3.2 2.9 13 12 10 12 12 13 0.1 0.3 0.6
AIA Engineering 3,634 3,342 4,100 23 115 127 139 5 29 26 24 4.4 3.9 3.4 23 21 19 16 16 15 0.6 0.7 0.7
Avalon Technologies 709 920 825 (10) 8 14 18 63 111 67 50 10.0 8.7 7.4 61 40 29 9 14 16 - - -
Blue Star 5,329 2,224 1,750 (21) 30 38 48 34 75 59 46 15.0 12.7 10.6 51 40 31 22 23 25 - - -
Carborundum Universal 2,765 1,246 1,750 40 26 30 35 13 49 41 35 6.5 5.7 5.0 33 27 23 14 15 15 0.4 0.5 0.5
Crompton Consumer 2,782 371 520 40 9 11 13 24 43 34 28 6.4 5.8 5.1 28 23 19 15 18 19 1.2 1.3 1.5
Dixon Technologies 12,625 18,037 17,250 (4) 118 192 264 62 153 94 68 42.6 30.2 21.5 76 51 41 33 38 37 0.1 0.1 0.1
Engineers India 1,188 181 230 27 6 8 9 13 32 24 20 4.2 4.0 3.7 35 22 17 13 17 20 2.2 2.8 3.3
Epack Durable 684 612 495 (19) 5 7 13 50 120 87 49 6.2 5.8 5.2 41 29 21 5 7 11 - - -
Havells India 12,025 1,646 2,125 29 24 30 35 20 69 55 47 12.5 11.1 9.8 48 38 32 19 21 22 0.7 0.8 0.8
Kalpataru Projects Intl 2,463 1,238 1,470 19 40 56 72 32 31 22 17 3.6 3.1 2.7 12 10 9 12 15 17 0.6 0.6 0.6
Kaynes Technology 5,345 7,166 5,200 (27) 50 65 87 45 143 110 83 16.2 13.9 11.3 103 76 57 12 14 15 - - -
KEC International 3,708 1,196 1,090 (9) 26 41 50 54 47 29 24 5.7 4.9 4.1 21 16 13 14 18 19 0.3 0.4 0.4
Sterling & Wilson Renewable 1,219 448 765 71 18 38 44 LP 25 12 10 7.6 4.6 3.4 20 9 8 36 49 39 - - 2.2
Thermax India 5,767 4,154 4,500 8 64 83 101 26 65 50 41 9.4 8.1 7.0 50 38 31 15 18 18 0.4 0.4 0.5
Voltas 6,847 1,776 1,680 (5) 30 36 45 80 58 49 40 8.9 7.8 6.7 50 42 36 16 17 18 0.5 0.5 0.5
Cement 77,078 15 45 32 28 3.7 3.3 3.0 21 16 14 9 11 11 0.3 0.3 0.4
ACC 4,341 1,984 2,425 22 92 122 135 6 21 16 15 2.1 1.9 1.7 11 8 8 10 12 12 0.4 0.4 0.4
Ambuja Cement 15,208 530 618 17 14 19 23 14 37 28 23 2.1 1.9 1.7 19 15 12 6 7 8 0.4 0.4 0.4
Dalmia Bharat 3,837 1,756 1,850 5 48 63 74 19 37 28 24 1.9 1.8 1.7 14 12 10 5 7 7 - - -
Nuvoco Vistas 1,469 353 360 2 4 11 15 55 96 31 23 1.4 1.3 1.3 11 8 7 1 4 6 - - -
Ramco Cement 2,635 957 1,000 5 18 29 36 30 52 33 26 3.0 2.7 2.5 16 13 11 6 9 10 - - -
Shree Cement 10,892 25,909 27,000 4 389 644 723 2 67 40 36 4.4 4.0 3.7 22 16 15 7 10 11 0.4 0.4 0.4
UltraTech Cement 38,696 11,504 10,900 (5) 264 352 393 17 44 33 29 4.6 4.1 3.7 23 18 16 12 13 13 0.3 0.3 0.4
FMCG 210,160 7 50 43 38 16.6 15.2 13.6 34 30 27 33 35 36 2.2 2.5 2.7
Dabur India 10,425 505 570 13 11 12 13 9 46 42 38 8.1 7.6 7.0 36 32 29 18 19 19 1.4 1.5 1.6
Hindustan Unilever 65,052 2,376 2,938 24 45 50 56 9 53 47 42 11.0 11.0 10.7 37 34 30 21 23 26 1.9 2.1 2.1
ITC 64,530 443 532 20 17 19 21 8 26 24 21 7.7 7.7 7.7 21 19 17 29 33 36 3.8 4.3 4.7
Marico 9,785 648 800 23 13 15 17 13 49 43 39 18.7 17.8 16.9 37 32 29 40 42 45 1.7 2.0 2.3
Nestle 24,546 2,185 2,700 24 32 37 41 8 68 59 54 56.1 47.7 38.7 44 39 35 88 87 79 1.3 1.4 1.4
Tata Consumer 10,972 947 1,310 38 14 19 22 10 66 51 44 4.5 4.4 4.3 36 30 27 7 9 10 1.2 1.4 1.6
Varun Beverages 24,850 631 711 13 8 10 12 (9) 80 63 53 23.5 20.1 17.4 46 39 33 32 34 35 0.4 0.9 1.1

PRIVATE & CONFIDENTIAL

 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Home Improvement 21,427 25 50 36 27 8.0 7.1 6.1 30 23 18 17 21 23 1.0 1.3 1.6
Apollo Pipes 216 449 610 36 9 14 24 32 49 32 19 2.1 1.9 1.8 17 13 9 5 6 10 0.3 0.5 1.3
Astral 4,872 1,556 2,020 30 23 32 45 30 69 48 35 11.1 9.8 8.3 40 29 22 17 22 26 0.3 0.8 1.1
Century Plyboard 2,096 810 850 5 12 20 29 24 66 41 28 7.4 6.4 5.3 36 25 19 12 17 21 0.4 0.4 0.4
Cera Sanitaryware 1,095 7,288 8,300 14 186 229 271 14 39 32 27 6.8 6.1 5.3 28 22 18 18 20 21 0.9 1.3 1.5
Finolex Industries 1,785 247 300 22 8 13 15 24 31 19 17 2.5 2.5 2.4 20 14 13 9 13 14 3.2 4.1 4.9
Greenlam Industries 847 570 610 7 9 16 28 37 61 35 21 6.3 5.6 4.7 26 18 13 11 17 25 0.5 0.9 1.5
Greenpanel Industries 507 355 420 18 6 11 19 18 55 33 18 3.2 3.0 2.7 26 16 10 6 9 15 0.5 0.9 1.6
Greenply Indus 436 300 390 30 8 13 19 47 37 23 16 4.6 3.9 3.1 16 12 10 13 18 21 0.3 0.3 0.3
Kajaria Ceramics 2,055 1,107 1,620 46 31 40 50 22 36 28 22 6.2 5.5 4.8 22 18 14 18 21 23 1.8 1.8 1.8
Prince Pipes 525 408 590 45 11 17 25 19 38 24 16 2.7 2.5 2.2 17 12 9 7 11 14 0.1 0.9 1.2
Somany Ceramics 303 635 890 40 24 42 56 34 26 15 11 2.9 2.5 2.2 11 8 6 11 18 21 1.1 2.0 2.7
Supreme Industries 6,689 4,519 5,270 17 100 126 152 22 45 36 30 9.9 8.6 7.4 32 25 21 23 26 27 1.0 1.3 1.5
Hospitals 42,003 28 68 51 42 9.9 8.3 7.0 39 30 25 16 18 18 0.1 0.1 0.1
Apollo Hospitals 12,446 7,429 8,613 16 103 143 186 44 72 52 40 12.3 10.1 8.2 35 28 22 19 21 23 0.1 0.1 0.1
Dr Lal PathLabs 2,922 3,000 3,331 11 51 59 67 16 59 51 45 11.8 10.4 9.2 35 31 27 21 22 22 0.8 0.9 1.0
Fortis Healthcare 6,325 719 725 1 10 13 16 28 70 56 45 5.8 5.2 4.7 36 30 25 9 10 11 - - -
Global Health 3,349 1,070 1,116 4 19 24 26 8 55 45 42 8.0 6.8 5.8 33 27 23 16 16 15 - - -
HealthCare Global 777 478 546 14 6 9 13 62 77 54 35 7.1 6.3 5.4 17 14 12 10 12 16 - - -
Max Healthcare 13,062 1,153 1,198 4 15 21 26 23 78 55 45 10.4 8.7 7.3 51 37 30 14 17 18 - - -
Narayana Hrudayalaya 3,123 1,312 1,408 7 39 43 51 10 34 30 25 7.5 6.2 5.1 22 20 17 25 22 22 0.4 0.5 0.5
IT - Services 437,490 12 32 28 25 10.9 10.5 9.1 22 20 17 36 38 51 2.8 3.2 5.0
Affle India 2,797 1,709 1,800 5 26 35 43 25 66 49 40 8.4 7.2 6.1 48 37 30 14 16 17 - - -
Birlasoft 1,757 545 610 12 19 22 27 6 28 24 21 4.5 3.9 3.6 19 16 13 17 17 18 1.0 1.1 2.2
CE Info Systems * 1,045 1,648 2,700 64 36 48 - 36 45 34 - 10.3 7.9 - 43 32 - 26 26 - - - -
Coforge 7,503 9,632 10,000 4 156 207 252 23 62 46 38 14.4 13.9 11.7 33 26 21 25 33 33 0.8 1.1 1.3
HCL Technologies 61,753 1,953 2,150 10 65 71 80 11 30 28 25 7.5 7.3 7.0 20 18 16 25 27 29 2.5 2.7 3.1
IndiaMart 1,525 2,180 3,200 47 85 90 106 24 26 24 21 6.1 5.1 4.3 20 19 15 27 23 23 0.9 0.9 0.9
Infosys 93,754 1,938 2,100 8 65 72 81 9 30 27 24 8.9 8.7 8.5 20 18 16 30 33 36 2.7 3.0 3.3
Le Travenues 745 165 170 3 1 2 3 38 117 76 55 13.0 11.1 9.2 88 55 40 12 16 18 - - -
LTIMindtree 19,786 5,731 6,540 14 162 186 218 12 35 31 26 7.3 6.5 5.8 24 21 17 22 22 23 1.1 1.6 1.9
Mphasis 6,403 2,898 3,350 16 90 103 120 14 32 28 24 5.8 5.4 4.9 20 18 15 19 20 21 1.9 2.1 2.5
Persistent 11,460 6,311 6,820 8 90 112 136 22 70 56 46 16.8 14.2 12.0 48 39 32 26 27 28 0.6 0.7 0.9
RateGain Travel 995 724 910 26 18 22 26 26 40 33 28 5.1 4.4 3.8 33 26 20 14 15 15 - - -
TCS 172,631 4,095 4,730 16 135 150 169 10 30 27 24 15.4 14.5 12.9 21 19 17 52 55 57 3.0 3.3 3.3
Tech Mahindra 19,231 1,686 1,780 6 49 60 77 40 35 28 22 5.1 5.0 4.8 23 19 15 15 18 22 2.5 3.1 3.9
Wipro 35,900 294 320 9 12 13 15 12 24 23 20 4.8 5.9 na 19 19 22 18 23 150 6.1 6.8 27.1

PRIVATE & CONFIDENTIAL

 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Logistics 5,889 15 31 27 24 3.5 3.2 2.9 19 16 13 12 12 13 0.9 1.1 1.2
Container Corporation 5,421 764 1,000 31 23 27 31 15 33 28 25 3.6 3.3 3.0 19 16 14 12 12 13 0.9 1.0 1.2
Gateway Distripark 468 80 110 37 5 5 6 7 17 15 13 1.9 1.7 1.6 11 10 8 12 12 13 1.2 1.6 1.9
Metals 76,407 51 43 11 8 2.0 1.7 1.4 10 6 5 7 18 19 0.2 0.4 0.4
Hindalco Inds * 15,032 574 905 58 63 70 - 24 9 8 - 1.1 1.0 - 5 5 - 12 12 - - - -
JSPL 11,165 939 1,300 38 43 78 117 26 22 12 8 2.0 1.7 1.4 10 7 5 9 15 19 0.2 0.2 0.2
JSW Steel 25,670 901 1,255 39 29 82 106 47 31 11 9 2.6 2.1 1.7 11 6 5 8 21 22 - - -
SAIL 5,314 110 130 18 1 10 12 8 187 11 9 0.8 0.7 0.7 9 6 5 0 7 8 - 1.5 2.2
Tata Steel 19,227 132 185 40 4 14 17 84 32 9 8 1.7 1.5 1.2 10 6 5 5 17 17 0.6 0.6 0.6
Oil & Gas 303,805 4 18 16 15 1.5 1.4 1.3 10 9 8 11 11 11 2.1 2.3 2.3
BPCL 14,399 285 395 39 37 42 40 (13) 8 7 7 1.5 1.3 1.2 6 5 6 20 21 18 4.6 5.3 4.9
GAIL 14,148 185 224 21 16 15 16 7 12 12 11 1.7 1.6 1.5 9 9 8 16 14 14 3.4 3.3 3.5
HPCL 9,643 389 440 13 42 44 45 (13) 9 9 9 1.8 1.6 1.4 7 7 7 21 19 18 4.4 4.6 4.6
Indian Oil 21,863 133 181 36 13 17 20 (12) 11 8 7 1.0 0.9 0.9 8 6 5 10 12 13 4.3 5.6 6.8
Oil India 8,675 458 533 16 62 59 56 3 7 8 8 1.0 1.0 0.9 8 8 8 15 13 11 5.4 5.1 4.9
ONGC 37,284 254 280 10 30 30 26 (7) 8 8 10 1.0 0.9 0.9 4 4 4 12 11 9 4.7 4.8 4.0
Petronet LNG 5,740 328 385 17 24 27 30 8 14 12 11 2.6 2.3 2.0 8 8 7 20 20 19 3.3 3.7 4.0
Reliance Industries 192,053 1,218 1,521 25 52 62 67 9 23 20 18 1.7 1.5 1.4 12 10 9 8 9 9 0.8 0.8 0.9
Pharmaceuticals 157,060 15 37 30 27 6.1 5.3 4.6 22 19 17 18 19 18 0.6 0.7 0.8
Aurobindo Pharma 8,884 1,313 1,705 30 61 81 96 19 22 16 14 2.4 2.1 1.9 11 9 8 11 14 15 0.9 1.1 1.2
Biocon 5,009 358 460 28 4 11 15 20 83 34 24 1.7 1.6 1.5 20 14 11 2 5 6 0.3 0.6 0.6
Cipla 14,034 1,491 1,677 12 57 65 64 6 26 23 23 4.0 3.6 3.3 16 14 14 16 17 15 1.0 1.2 1.3
Dr Reddy's Lab 13,129 1,350 1,315 (3) 75 90 53 (8) 18 15 26 3.4 2.8 2.6 12 10 15 20 20 10 0.6 0.7 0.6
Entero Healthcare 713 1,406 1,724 23 30 42 57 84 46 33 24 3.4 3.1 2.8 31 21 16 8 10 12 - - -
Glaxosmithkline Pharma 4,345 2,201 3,058 39 49 56 61 12 44 40 36 18.6 16.1 13.8 34 30 27 44 44 41 1.6 1.7 1.7
Glenmark Life Sciences 1,431 1,002 1,033 3 37 44 52 10 27 23 19 4.6 4.1 3.5 18 15 13 18 19 19 1.1 1.3 1.5
Glenmark Pharma 5,339 1,624 2,036 25 49 65 81 LP 33 25 20 5.1 4.3 3.6 18 15 12 16 19 20 0.4 0.4 0.5
IPCA Laboratories 5,081 1,719 1,760 2 34 48 60 33 50 36 29 5.1 4.5 3.8 26 20 15 11 13 14 0.2 0.3 0.3
Laurus Labs 3,766 600 496 (17) 6 9 15 70 109 66 41 7.3 6.6 5.7 33 25 19 7 10 15 - - -
Lupin 12,547 2,360 2,544 8 68 81 94 27 35 29 25 6.3 5.2 4.4 21 18 15 20 20 19 0.3 0.3 0.3
Natco Pharma 2,731 1,309 1,586 21 128 142 57 (10) 10 9 23 3.0 2.3 1.5 7 6 26 33 28 6 1.1 1.1 1.1
Sanofi India # 1,629 6,070 7,421 22 166 181 195 9 36 34 31 11.9 10.4 9.1 27 25 23 35 33 31 1.6 1.7 1.9
Strides Arcolab 736 686 1,095 60 31 47 65 110 22 15 11 2.7 2.3 1.9 10 8 7 13 17 19 - 0.1 0.3
Sun Pharma 51,645 1,847 2,114 14 49 55 64 12 38 33 29 5.8 5.1 4.4 28 24 21 16 16 16 0.5 0.5 0.5
Torrent Pharma 13,261 3,363 3,869 15 59 78 94 24 57 43 36 15.1 13.2 11.2 30 25 22 28 33 34 1.2 1.3 1.5
Zydus Lifesciences 11,272 961 1,112 16 44 42 46 7 22 23 21 3.8 3.3 2.9 14 14 13 19 15 15 0.4 0.8 0.9

PRIVATE & CONFIDENTIAL

 Valuation Guide
Mcap Price TP Upside EPS (Rs) CAGR (%) PE (x) PB (x) EV/E (x) RoE (%) Div. Yield (%)
Company Name (USD m) (Rs) (Rs) (%) FY25E FY26E FY27E FY24/27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Port & Port services 7,722 15 50 43 37 7.0 6.1 5.3 28 24 21 15 15 15 0.2 0.2 0.2
JSW Infrastructure 7,722 316 400 27 6 7 9 15 50 43 37 7.0 6.1 5.3 28 24 21 15 15 15 0.2 0.2 0.2
Speciality Chemicals 24,468 28 54 37 28 5.4 4.7 4.1 29 21 17 12 14 16 0.4 0.4 0.5
Aarti Industries 1,706 404 478 18 8 11 17 14 53 36 24 2.6 2.5 2.3 18 14 11 5 7 10 0.3 0.4 0.6
Deepak Nitrite 3,847 2,421 3,173 31 59 91 106 25 41 27 23 6.0 5.0 4.2 26 18 15 16 20 20 0.4 0.4 0.4
Fine Organic 1,579 4,419 6,088 38 143 148 178 10 31 30 25 6.1 5.3 4.6 22 20 16 21 19 20 1.0 1.0 1.2
Galaxy Surfactants 1,012 2,450 2,952 21 93 109 127 14 26 22 19 3.5 3.1 2.7 16 14 12 14 15 15 0.6 0.7 0.8
Gujarat Fluorochem 4,961 3,876 5,210 34 57 99 129 48 68 39 30 5.0 4.4 3.9 33 22 18 9 12 14 - - -
Navin Fluorine 1,936 3,350 3,164 (6) 50 76 122 40 67 44 28 6.4 5.8 4.9 37 25 18 10 14 19 0.3 0.5 0.7
PCBL 1,903 433 536 24 16 21 27 27 28 21 16 4.0 3.5 3.0 14 12 10 16 18 20 1.3 1.3 1.5
SRF 7,866 2,277 2,521 11 38 53 72 17 60 43 31 5.5 5.0 4.4 28 22 17 9 12 15 0.4 0.5 0.5
Steel Pipes 2,972 16 39 29 23 6.0 5.0 4.2 25 19 15 17 19 20 0.3 0.4 0.6
Ratnamani Metals 2,604 3,188 3,880 22 79 104 131 14 41 31 24 6.0 5.1 4.3 27 20 16 16 18 19 0.3 0.4 0.6
Venus Pipes 368 1,552 2,230 44 53 79 99 33 29 20 16 5.6 4.4 3.5 17 12 9 22 25 25 0.3 0.5 0.6
Sugar 2,731 9 20 17 15 2.5 2.3 2.1 14 12 11 13 14 14 1.6 2.1 2.1
Balrampur Chini 1,189 506 680 35 26 30 34 9 20 17 15 2.6 2.3 2.1 14 12 11 14 15 15 0.6 1.0 1.0
Dalmia Bharat Sugar 335 356 685 93 35 41 43 8 10 9 8 1.1 1.0 0.9 8 7 6 10 12 11 1.7 2.2 2.2
Dwarikesh Sugar 117 54 63 16 2 6 6 12 25 10 9 1.2 1.1 0.9 12 6 5 5 12 11 3.6 7.2 7.2
Triveni Engineering 1,089 427 525 23 18 22 24 10 23 20 18 3.0 2.8 2.6 15 14 12 13 15 15 2.3 2.8 2.8
Telecom 120,911 63 45 33 25 7.4 6.1 5.0 12 10 8 19 20 22 0.7 1.1 1.2
Bharti Airtel 110,773 1,588 1,907 20 33 45 60 68 48 35 26 7.8 6.4 5.2 12 10 9 17 20 22 0.5 0.6 0.6
Business Services 3,287 17 20 16 13 3.0 2.6 2.3 13 10 9 16 18 19 2.2 3.0 3.5
Redington India 1,779 195 210 8 16 21 25 16 12 9 8 1.8 1.6 1.4 9 7 6 15 18 19 3.2 4.4 5.0
TeamLease Services 574 2,940 3,110 6 71 93 115 21 41 32 25 5.3 4.5 3.8 31 23 18 14 15 16 - - -
Source: DAM Capital, Bloomberg Note - 1) Sector aggregate calculated using marketcap weighted method; 2) For Banks PB = Price to Adjusted Book Value;
3) LP=Loss to Profit; PL=Profit to Loss; NA=Not Applicable; 4) # Sanofi CY24 & CY25 numbers are of demerged entity; 5) * EPS CAGR is for two years FY24/FY26E

PRIVATE & CONFIDENTIAL

 Disclaimer
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 Disclaimer
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The analyst certifies that all of the views expressed in this research report accurately reflect his/her personal views about any and all of the subject issuer(s) or securities. The analyst certifies that no part of his / her compensation was, is, or will be directly or
indirectly related to the specific recommendation(s) and/or views expressed in this report.
Research Disclaimer - Notice to US Investors
This report was prepared, approved, published and distributed by DAM Capital Advisors Limited, a company located outside of the United States (a “non-US Company”).This report is distributed in the US by DAM Capital (Parent of DAM Capital (USA) Inc.) only
to major U.S institutional investors (as defined in Rule 15a-6 under the U.S Securities Exchange Act of 1934 (the “Exchange Act”)) pursuant to the exemption 15a-(2) of the Rule and any transaction effected by a U.S customer in the securities described in this
report must be effected through DAM Capital USA as defined in the Rule.
Neither the report nor any analyst who prepared or approved the report is subject to U.S legal requirements or Financial Industry Regulatory Authority, Inc. (“FINRA”) or other regulatory requirements pertaining to research reports or research analysts. The
non-US Company is neither registered as a broker-dealer under the Exchange Act, nor is a member of FINRA, Inc. or any other U.S. self-regulatory organization. The non-US Company is the employer of the research analyst(s) responsible for this research
report. The research analysts preparing this report are residents outside the United States and are not associated persons of any US regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a US broker-dealer, and are not
required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with US rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a
research analyst account.
It is distributed in the United States of America by DAM Capital under 15a-6(a)(2) and elsewhere in the world by DAM Capital or any authorised associate of DAM Capital.
ANALYST DISCLOSURES
1. The analyst(s) declares that neither he/she or his/her relatives have a Beneficial or Actual ownership of > 1% of equity of Subject Company/ companies;
2. The analyst(s) declares that he/she has no material conflict of interest with the Subject Company/ companies of this report;
3. The research analyst (or analysts) certifies that the views expressed in the research report accurately reflect such research analyst's personal views about the subject securities and issuers; and
4. The research analyst (or analysts) certifies that no part of his or her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report.
5. The research analyst declares that he has not served as an officer, director or employee of the subject company.

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Rating System
Investment Ratings Expected returns (over 12-month)
Buy > =10%
Sell < -5%
Neutral <-5% to 10%

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