Ambit Rec

AMBIT INSIGHTS
28 April 2020
DAILY
UPDATES
Strategy
Resilience of ‘Great’ Firms and Ten Bagger 9.0
RESULTS UPDATE
Ambuja Cement (BUY)
Cost rationalisation drives EBITDA beat
IndusInd Bank (SELL)

No respite on asset quality
ANALYST NOTES: BFSI: MF industry AUM growth resilient to redemption

pressure across credit risk funds (Udit Kariwala, CFA, +91 22 6623 3197)
Liquidity tightening has exposed debt MFs to redemptions. Last week one large MF
closed six of its debt funds citing redemption pressure. Bulk of the higher credit risk
debt is usually housed under credit risk/short-term funds. As of Mar’20, 20 AMCs ran
credit risk funds with total AUM of Rs555bn (~4% of total debt MF). We analysed
97% of total credit risk exposure across 12 large AMCs. Exposure to AAA equivalent
debt (AAA debt + sovereign debt + positive cash balances) accounted for 26% of
total credit risk exposure. High-risk exposure (below AA rated) amounted to Rs148bn,
merely 1.1% of total MF exposure and 27% of total credit risk exposure. Total debt
under default was ~Rs0.7bn. NBFC/HFC exposure (including PSUs) to credit risk
funds was merely ~16% (~Rs84bn). So we don’t expect redemptions across credit
risk funds to impair industry AUM growth, and maintain our estimates. Reiterate BUY
on MOFS.
Source: Ambit Capital research
HAVE YOU SEEN THIS? 70%+ AUM parked in credit risk funds across AMCs is
rated AA- or higher
Rating category-wise credit risk fund exposure

(Rs bn)
45%
26% 27%
239
139 148
2%
AAA equivalent AA equivalent Below AA Unrated Please refer to our website for
complete coverage universe
Source: Company, Ambit Capital research estimates. * Data for 12 large AMCs considered, capturing ~97% of
credit risk fund market share. AAA equivalent = AAA rated debt + sovereign bonds + positive cash and cash http://ambitresearch.co
equivalent balances. AA equivalent = AA+/AA/AA- rated debt
Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital
pkudva@samvitticapital.com
may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Please refer to the Disclaimers at the end of this Report.
AMBIT INSIGHTS
Strategy Quick Insight

Resilience of ‘Great’ Firms and Ten Bagger 9.0
Analysis 
Natural selection criteria basis the metrics defined by our ‘greatness
framework’ help us pick companies resorting to high growth capex, better Meeting Note
capital allocation (superior RoCE), low leverage and high cash generation. News Impact
Strong comeback of ‘Great firms’ post the 2008 and 2011 market crises is
testimony to their resilience in difficult times. Amidst ongoing Covid-19 crisis,
our recent Ten Bagger 9.0 (published Feb’20) has largely performed in line
with broader markets over last two months. Interestingly, however, 18 of 25
(>70%) high-quality stocks are now available cheap vs own historical
valuations! Overall, it indicates that one can still find opportunities when
‘Great’ firms get stressed down the road in midst of many expected
reverberations. Refer to our analyst comments to know impact of Covid-19 on
these stocks. Natco, Dr. Lal, L&T Infotech and Abbott are a few names where
we find little risks to business and near-term earnings; apart from Abbott
others are at valuation discount to historicals.
What is the Ten Bagger portfolio?

Objective of this Ten Bagger process is to try to generate 26% CAGR over a 10-
year holding horizon by buying a portfolio of companies which are improving on
Greatness as well as Accounting scores. The portfolio is churned every year. The
methodology focuses on evaluating the companies on drivers of ‘Greatness’ (e.g. cash
generation, incremental capex, efficiency in capital employed turnover etc.) rather
than the actual outcome (i.e. RoE, RoCE, PAT etc.). Improving Greatness scores imply
that the company’s RoCE metric will be improving as the Greatness score is built on
inputs which lead for RoCE uplift gradually. Investors can also use this as a starting
point to find ideas where underlying changes for RoCE improvement are taking place.
We recently published our Ten Bagger portfolio 9.0 on 11 Feb 20 (click here for the
detailed note). Since its inception in 2012, our Ten Bagger portfolios have managed
to outperform the BSE500 index and NSE100 index by ~11% and 9% respectively in
CAGR terms till date. Over the last two months, amidst concerns related to Covid-19,
the Ten Bagger portfolio has outperformed the BSE500 index by 2%, while it has
broadly performed in line with NSE100 index.
Exhibit 1: Amidst ongoing Covid-19 crisis, our recent Ten Bagger 9.0 portfolio has
performed largely in line with NSE100 index and outperformed BSE500 index (ex-BFSI)
by 2%
Tenbagger iterations (1.0 to 9.0) 76.7 87.3 86.9

90
62.3 59.0
56.8 82.6
60 46.3 76.2 78.3
41.3 41.6
30.6 33.0
Return (%)
30 12.5 9.1
33.5
0
8.8
-30
1.0(2012)
2.0(2013)
3.0(2014)
4.0(2015)
5.0(2016)
6.0(2017)
7.0(2018)
8.0(2019)
9.0(2020)
Research Analysts
Tenbagger iteration return BSE500 index return Vinit Powle

NSE100 index return cumulative alpha BSE500 (ex. BFSI) vinit.powle@ambit.co
Tel: +91 22 6623 3149
cumulative alpha NSE100
Nitin Bhasin
Source: Ambit Capital research, Company, Bloomberg Note: Performance in the exhibit above is on a total-return nitin.bhasin@ambit.co
basis; i.e. assuming that dividends are reinvested into the same stock on the ex-dividend date. We have used Tel: +91 22 6623 3241
BSE500 index (ex-BFSI). Returns are calculated on 1-year forward basis; i.e. from date of 1 iteration to next. For
Ten Bagger 9.0, we calculated the returns from 11 Feb 20 to 24 Apr 20
Ambit Capital Pvt Ltd 28 April 2020
AMBIT INSIGHTS
History suggests ‘Great’ firms make a stronger comeback

Ten Bagger portfolios essentially consist of companies which are identified as ‘Great’
on our greatness formwork. After two major sharp falls that markets witnessed in
2009 and 2011, we observe that the ‘Great’ firms made a stronger comeback in
comparison to broader market or ‘Mediocre’ firms. Please refer to later part of this
note to know about the methodology on ranking of companies as ‘Great’ or
‘Mediocre’ firms. (Click here for the detailed note)
The outperformance of great firms can be obviously attributed to its superiority over
peers in 1) Investing capital (capex), 2) Turning investment into sales, 3) Maintaining
pricing discipline (EBIT margins), 3) Achieving efficiency in capital employed turnover,
4) Maintaining balance sheet discipline (debt-equity and equity dilution), and 5)
Generating cash (CFO).
Even the Ten Bagger portfolio constructed in Jan’12 (i.e. almost during the time when
the market crashed due to the 2011 crisis) outperformed the NSE100 index and
BSE500 index (ex-BFSI) by >10% (refer exhibit 1) in the next 12 months.
Exhibit 2: After ~14 months fall during 2008 financial crisis Exhibit 3: Similarly, post the next major fall around
which ended at Mar’09, ‘great’ firms made a better Dec’11, ‘great’ firms made substantial and faster gains
comeback in the next 12 months relative to ‘mediocre’ firms and broader markets
120 70
100 60
Great firms:
50
80 9.9% - 2yrs CAGR)
40
60
Great firms: (38.6%)- 30
40 2yrs CAGR BSE500 (ex-BFSI): -
20 17.4% - 2yrs CAGR
BSE500 (ex-BFSI):
20 (42.6%)-2yrs CAGR 10
Mediocre firms: - Mediocre firms:
0 (47.7%)-2yrs CAGR 0 (27.2%)- 2yrs
CAGR
Jun-08
Jun-09
Jun-11
Jun-12
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Sep-08
Sep-09
Sep-11
Sep-12
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Source: Company, Ambit Capital research, Bloomberg. Returns are median Source: Company, Ambit Capital research, Bloomberg. Returns are median
returns. The back-test is based on annual rebalancing with forward looking returns. The back-test is based on annual rebalancing with forward looking
returns. Annual rebalancing is done at December of each year. The above returns. Annual rebalancing is done at December of each year. The above
exhibit only considers the share price returns and not the total shareholder exhibit only considers the share price returns and not the total shareholder
returns. 2 CAGR returns are calculated from Dec 07 to Mar 10 returns. Returns are calculated from Dec-10 to Mar-13
Ten Bagger companies have higher potential to navigate difficult times

Lockdowns due to Covid-19 have led companies to a point where they are not
generating any revenues, but are still spending on recurring fixed costs. Obviously,
companies with high net cash on their balance sheet will be in a better position to
overcome this situation. Secondly, companies with history of superior capital
allocation practices (high RoCE), consistently high growth capex and high cash
generation capabilities will have added advantage when the situation eases.
We compare our overall Ten Bagger portfolios of the past with the broader markets to
understand where the portfolio stands in terms of 1) spending on growth capex, 2)
generating superior RoCE, 3) recent leverage positions, and 4) cash generation
capabilities.
AMBIT INSIGHTS
Exhibit 4: Ten Bagger portfolio as a whole appears to Exhibit 5: ….and also making substantially high RoCE
consistently invest in high growth capex …..
Cum. Capex/CFO* 50% 3 yr. median ROCE

80%
40%
60% 30%
40% 20%
20% 10%
0% 0%
TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB
1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Portfolio BSE500(ex-BFSI) universe median Portfolio
Source: Ambit Capital research, Company. TB on X axis indicates’ Ten Bagger Source: Ambit Capital research, Company. TB on X axis indicates’ Ten
portfolio’. *Cumulative capex/CFO ratio is calculated basis previous three Bagger portfolio’.*We have shown 3 yr median RoCE. For instance, TB 9.0
year numbers. For Instance, TB 9.0 cum. Capex/ CFO is based on numbers RoCE is median of RoCE for the year FY17 to FY19. TB 8.0 RoCE is based on
for the year FY17 to FY19; TB 8.0 cum. Capex/ CFO is based on numbers for numbers for the year FY16-18 and so on. BSE500 (ex-BFSI) ratio is excluding
the year FY16-18 and so on. BSE500 (ex-BFSI) ratio is calculated excluding Ten Bagger portfolio companies in its calculation
Ten Bagger portfolio companies
Exhibit 6: Ten Bagger portfolio as whole is less levered as Exhibit 7: High CFO /EBITDA ratio indicates tendencies of
compared to broader markets minimum investment in working capital, enhancing their
capability to invest in capex
0.8 Debt / equity ratio Cum. CFO/EBITDA*

85%
80%
0.6
75%
70%
0.4
65%
0.2 60%
55%
0.0 50%
TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB TB
1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Portfolio BSE500(ex-BFSI) universe median Portfolio BSE500(ex-BFSI) universe median
Source: Ambit Capital research, Company. Debt-equity is calculated at Source: Ambit Capital research, Company. TB on X axis indicates ‘Ten
balance sheet date. BSE500 (ex-BFSI) ratio is excluding Ten Bagger portfolio Bagger portfolio) Cumulative CFO/EBITDA ratio is calculated basis previous
companies in its calculation. three year numbers. For Instance, TB 9.0 Cum. CFO/ EBITDA is based on
numbers for the year FY17 to FY19; TB 8.0 Cum. CFO/ EBITDA is based on
numbers for the year FY16-18 and so on. BSE500 (ex-BFSI) ratio is
calculated excluding Ten Bagger portfolio companies
We also look into individual companies in our latest Ten Bagger 9.0 portfolio to gauge
their approach towards growth and efficiency in capital allocation.
AMBIT INSIGHTS
Exhibit 8: Several companies in our recent Ten Bagger 9.0 portfolio have cumulative capex/CFO of >40% in the previous
three years (FY17-19)
Source: Ambit Capital research, Company. Cumulative capex/CFO ratio is calculated basis previous three year numbers. For Instance, TB 9.0 cum. Capex/ CFO is
based on numbers for the year FY17 to FY19.
Exhibit 9: 3-year median RoCE* of individual Ten Bagger portfolio companies is substantially high than that of the larger
universe
Source: Ambit Capital research, Company. *We have shown 3-year median RoCE. For instance, RoCE median is calculated the year FY17 to FY19
Moreover, a look at stellar performance in the past of our individual Ten Bagger
portfolio companies gives us no reason to believe that they will not perform in the
coming years.
AMBIT INSIGHTS
Exhibit 10: Ten Bagger 9.0 – A financial snapshot

Mcap FF Mcap MDVT - 6m 3yr CAGR 3yr median FY19 Net
Share price
Ticker Company EBIT Debt /
(US$ mn) (US$ mn) (US$ mn) perf. 3yr Sales EPS CFO FCF RoE
margins Equity
Attractive valuations*
DMART IN Avenue Super. 19,500 4,877 16.2 46% 32% 38% 23% N/A 7% 18% 0.1
BOS IN Bosch 4,038 1,189 3.9 -23% 5% 2% -23% -70% 19% 17% -0.6
PAG IN Page Industries 2,562 1,324 9.1 8% 17% 19% 2% 0% 21% 46% 0.1
NTCPH IN Natco Pharma 1,456 744 1.4 -13% 22% 56% 81% -305% 39% 29% 0.0
SF IN Sundram Fasten. 828 418 0.4 -9% 12% 54% -8% -278% 15% 28% 0.5
GRIL IN Graphite India 586 204 2.9 23% 72% 245% 105% 121% 45% 45% -0.5
TELX IN Tata Elxsi 589 327 6.6 -2% 14% 23% 21% 30% 25% 37% -0.5
BRCM IN Balrampur Chini 292 172 1.7 -15% 16% 83% N/A N/A 15% 30% 0.8
NOCIL IN NOCIL 174 115 1.7 -9% 13% 32% -1% -28% 26% 17% -0.1
JUBI IN Jubilant Food. 2,622 1,523 26.9 43% 13% 44% 26% -360% 10% 22% -0.5
LTTS IN L&T Technology 1,619 411 2.2 17% 18% 19% 15% 21% 17% 33% -0.3
DLPL IN Dr Lal Pathlabs 1,627 703 3.9 16% 15% 14% 11% 15% 25% 25% -0.7
AVNT IN Avanti Feeds 710 400 4.6 10% 20% 20% 15% 42% 13% 41% -0.6
HWA IN Honeywell Auto 3,250 812 1.4 38% 13% 36% 23% 24% 14% 19% -0.7
ABFRL IN Aditya Bir. Fas. 1,241 508 2.4 -12% 10% -243% 19% 34% 4% 12% 1.1
LTI IN L & T Infotech 3,247 827 2.7 25% 17% 20% 18% 19% 17% 35% -0.4
WHIRL IN Whirlpool India 3,064 766 2.5 15% 16% 19% 5% -7% 12% 21% -0.7
PVRL IN PVR 670 546 21.9 -14% 19% 21% 33% 49% 12% 12% 1.0
Moderate valuations**
3M IN 3M India 2,772 693 1.8 17% 12% 23% -1% -5% 19% 29% -0.4
TRCL IN The Ramco Cement 1,735 995 4.7 -6% 13% -2% -10% 9% 19% 14% 0.2
VOLT IN Voltas 2,189 1,526 12.8 7% 8% 9% N/A -17% 12% 16% -0.6
Rich valuations***
HUVR IN Hind. Unilever 67,904 22,286 82.3 38% 7% 13% 12% 14% 21% 75% -0.8
IGL IN Indraprastha Gas 4,110 2,260 19.4 28% 16% 24% 21% 4% 24% 21% -0.4
BOOT IN Abbott India 4,600 1,150 3.5 53% 12% 21% 26% 31% 19% 24% -0.8
NITEC IN NIIT Tech. 888 265 10.0 37% 11% 13% 8% 24% 14% 16% -0.4
Source: Ambit Capital research, Company. Note: Sorted on the basis of valuations.
* Trading below five-year average P/E, P/B, EV/EBITDA (on at least two of these three measures)
** Trading below either five-year average P/E, five-year P/B or five-year EV/EBITDA (on one of these three measures)
*** Trading above five-year average P/E, P/B and EV/EBITDA
Interestingly, the ongoing Covid-19 crisis led the proportion of attractively valued
stocks in our Ten Bagger portfolio rise to 72% (vs 52% in Feb’20). The stocks which
have moved from moderate or rich valuations to attractive valuations include Avanti
Feeds, Honeywell Auto, Aditya Birla Fashion, L&T Infotech and Whirlpool India. Voltas
has moved from richly valued to moderately valued
AMBIT INSIGHTS
Exhibit 11: Proportion of attractively valued stocks has Exhibit 12: ..…to 72% currently in the Apr 20 Ten Bagger
increased from 52% in Feb 20…… 9.0 portfolio
Ten Bagger 9.0 (then) Rich

Valuations Ten Bagger 9.0 (now)
Rich , 16%
valuations,
28%
Moderate
valuations
, 12%
Attractive
valuations,
52%
Attractive
Moderate valuations
valuations, , 72%
20%
Source: Ambit Capital research, Company, Bloomberg Source: Ambit Capital research, Company, Bloomberg
Exhibit 13: 72% of total portfolio companies look cheap vs their historical valuations
MDVT - Blended FY19 and FY20 Overall
Mcap FF Mcap Cheap w.r.t. history?
6m Trailing valuations cheap on
Sr. No. Ticker Company P/B
(US$ P/E EV/ EV/ how many
(US$ mn) (US$ mn) P/E P/B P/E P/B
mn) EBITDA EBITDA counts?
1 DMART IN Avenue Super. 19,500 4,877 16.2 113.0 25.9 103.0 16.9 62.8 Yes Yes Yes 3
2 BOS IN Bosch 4,038 1,189 3.9 31.8 3.5 30.8 4.6 21.4 Yes Yes Yes 3
3 PAG IN Page Industries 2,562 1,324 9.1 50.3 25.6 60.4 28.9 39.3 Yes Yes Yes 3
4 NTCPH IN Natco Pharma 1,456 744 1.4 22.9 3.3 19.6 3.0 15.7 Yes Yes Yes 3
5 SF IN Sundram Fasten. 828 418 0.4 16.7 3.4 21.7 4.7 13.6 Yes Yes Yes 3
6 GRIL IN Graphite India 586 204 2.9 7.3 0.9 29.8 1.3 1.3 Yes Yes Yes 3
7 TELX IN Tata Elxsi 589 327 6.6 18.3 4.2 15.3 3.6 9.7 Yes Yes Yes 3
8 BRCM IN Balrampur Chini 292 172 1.7 4.1 1.1 4.8 1.2 5.8 Yes Yes Yes 3
9 NOCIL IN NOCIL 174 115 1.7 12.1 1.2 11.4 1.6 7.3 Yes Yes Yes 3
10 JUBI IN Jubilant Food. 2,622 1,523 26.9 60.8 15.7 58.2 13.7 26.8 Yes Yes Yes 3
11 LTTS IN L&T Technology 1,619 411 2.2 15.2 4.8 17.9 5.3 13.8 Yes Yes Yes 3
12 AVNT IN Avanti Feeds 710 400 4.6 15.7 4.6 18.1 4.2 11.3 Yes Yes Yes 3
13 PVRL IN PVR 670 546 21.9 32.2 3.7 36.9 4.7 13.1 Yes Yes Yes 3
14 DLPL IN Dr Lal Pathlabs 1,627 703 3.9 51.2 13.2 46.1 10.1 30.3 Yes Yes - 2
15 HWA IN Honeywell Auto 3,250 812 1.4 53.4 13.9 51.8 11.3 36.2 Yes - Yes 2
16 ABFRL IN Aditya Bir. Fas. 1,241 508 2.4 50.8 6.8 75.0 9.2 22.8 - Yes Yes 2
17 LTI IN L & T Infotech 3,247 827 2.7 16.7 4.8 18.2 5.3 13.3 Yes Yes - 2
18 WHIRL IN Whirlpool India 3,064 766 2.5 47.3 11.0 45.8 9.0 28.4 Yes Yes - 2
19 3M IN 3M India 2,772 693 1.8 65.4 14.9 79.6 19.1 50.0 - Yes - 1
20 TRCL IN The Ramco Cement 1,735 995 4.7 28.6 3.0 28.3 3.3 15.6 - Yes - 1
21 VOLT IN Voltas 2,189 1,526 12.8 33.4 4.1 35.3 4.4 27.1 - Yes - 1
Rich valuations**
22 HUVR IN Hind. Unilever 67,904 22,286 82.3 76.4 64.0 66.1 54.5 45.6 - - - 0
23 IGL IN Indraprastha Gas 4,110 2,260 19.4 28.2 7.4 27.2 5.7 17.3 - - - 0
24 BOOT IN Abbott India 4,600 1,150 3.5 58.8 17.3 44.9 11.0 32.2 - - - 0
25 NITEC IN NIIT Tech. 888 265 10.0 15.2 N/A 18.2 3.5 10.2 - - - 0
Source: Ambit Capital research, Company, Bloomberg. Note: Sorted on the basis of valuations.
AMBIT INSIGHTS
Exhibit 14: Ten Bagger 9.0 valuations table

Revenue EPS
P/E P/B EV/EBITDA
Ticker Company CAGR (%) CAGR (%)
FY20-22 FY20-22 FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22
DMART IN Avenue Super. # 25 27 106 86 65 13 11 10 67 55 43
BOS IN Bosch 11 12 27 25.9 21.3 3 3.1 2.8 19 18.4 15.3
PAG IN Page Industries# 7 12 57 65 46 24 22 20 39 44 32
NTCPH IN Natco Pharma 15 20 22 19.1 15.7 3 2.6 2.3 18 15.1 11.7
SF IN Sundram Fasten. # 2 13 25 38 19 3 3 3 13 18 11
GRIL IN Graphite India 15 194 57 11.2 6.6 1 1 1 N/A 9.5 4.6
TELX IN Tata Elxsi 6 9 18 16.2 15 4 3.5 3.1 11 10.1 9.4
BRCM IN Balrampur Chini 0 17 4 3.7 3.1 1 0.8 0.6 4 3.8 3.5
NOCIL IN NOCIL 17 12 10 9.5 7.6 1 1 0.9 7 5.9 4.8
JUBI IN Jubilant Food.# 20 45 67 57 32 16 13 11 24 21 14
LTTS IN L&T Technology 11 10 15 13.8 12.1 4 3.5 3 11 9.7 8.4
DLPL IN Dr Lal Pathlabs# 10 17 51 77 38 11 10 9 29 38 21
AVNT IN Avanti Feeds 12 17 16 13.5 11.5 4 3.1 2.6 10 8.8 7.6
HWA IN Honeywell Auto 11 17 48 41.9 35.3 11 9.4 7.2 36 30.1 27.1
ABFRL IN Aditya Bir. Fas. # 12 89 545 51 21 7 7 5 21 18 11
I IN L & T Infotech 12 12 17 15.3 13.4 4 3.9 3.4 12 10.6 9.4
WHIRL IN Whirlpool India 12 15 45 40.2 33.8 9 7.7 6.4 29 26.1 22.8
PVRL IN PVR# 19 37 (53) 109 14 3 3 3 14 12 7
3M IN 3M India NA NA N/A N/A N/A N/A N/A N/A N/A N/A N/A
TRCL IN The Ramco Cement 12 12 22 22.3 17.5 3 2.4 2.2 13 12.2 10.3
VOLT IN Voltas 11 15 30 27.3 22.3 4 3.4 3.1 22 20.6 17.1
Rich valuations***
HUVR IN Hind. Unilever 13 16 71 60.4 52.5 60 27.5 28 49 41.5 36.3
IGL IN Indraprastha Gas# 6 11 28 36 32 7 6 6 22 24 20
BOOT IN Abbott India 12 18 55 46.4 39.5 14 11.8 9.4 41 34.9 30.5
NITEC IN NIIT Tech. 11 15 16 14 12.1 3 2.8 2.5 9 7.8 6.8
Source: Ambit Capital research, Company, Bloomberg. # Since these are our covered stocks, we have considered Ambit estimates
Impact of Covid-19 on our Ten Bagger portfolio

In the below exhibit, our analysts have given their brief comments on the impact of
Covid-19 on our Ten Bagger 9.0 portfolio companies. Natco, Dr.Lal, L&T Infotech,
Whirlpool, Ramco and Voltas are names where we see weak or moderate risk to the
business model and earnings estimates.
AMBIT INSIGHTS
Exhibit 15: Ten Bagger 9.0 – Our analysts’ comments on a few companies
Analyst comments on business for the next 12
Company Risk to business model Risk to earnings estimates
months
DMart least impacted as (a) it provides essential
services and likely to operate at least 50% of total
LOW
stores; (b) cash rich balance sheet due to recent fund- MODERATE
raising; (c) low fixed cost (zero rental).
Avenue DMart's business model is built around the trinity of
Revenue/margins may see headwinds given: (a) Due to adverse revenue mix and impact of
Supermarts cost, convenience and assortment. Any threat of
closure of stores; (b) adverse mix due to closure of negative operating leverage, DMart may report
increasing competition from e-commerce and local
general merchandise/apparel section (high GM); (c) lower than expected earnings.
kirana stores will be temporary.
interim shift of consumers from LFS to e-commerce
and kirana stores.
With all OEM segments set to decline by ~25% in
FY21E, BOS will be adversely impacted. BS6 would MODERATE HIGH
Bosch result in gradual decline in market share in CV FIP
systems, further impacting revenues, but partly CV exposure of ~40%, Earnings decline of about 20-25% in FY21
balanced by 2W FIPs coming in.
LOW
MODERATE
For Page, the biggest growth driver was
We don't see any risk to the business model of Page
premiumisation within male as well as female While Page does not have significant financial
given paucity of any credible competition in the
Page Industries innerwear. With consumption slowdown and decline cost, it will still face earnings cut led by decline
men’s innerwear segment. On top of that,
in discretionary spending, the pace of premiumisation in revenue driving negative operating leverage
competition from VH may subside as well as ABFRL
will take a hit. and impact of high employee cost (added 100
may focus on conserving cash rather than burning on
employees for the kids vertical).
VH.
Exports would remain robust as we see panic buying
LOW
behavior in export markets. Chronic/specialty NONE
portfolios would remain safeguarded in the domestic
Insignificant impact on its differentiated strategy of
Natco Pharma segment. Only issue we see with Natco is that cardiac Only risk is delay in cardiac/diabetes uptake,
focusing only on limited competition opportunities,
& diabetes strategy of sales ramp-up would be hit but overall contribution from these therapeutic
barring delay in aggressive push in cardiac &
owing to low doctor-MR touchpoints in the current areas is currently quite low.
diabetes.
environment.
Revenue is set to decline by ~18% led by Covid-19
MODERATE
impact despite a low base. Exposure to domestic and HIGH
Sundram
US trucks to keep revenue revival contained in
Fasteners Products which can be substituted by EVs at ~35% of
FY21E, though non-autos and after-market would be Expect ~35% earnings decline in FY21
revenue.
potential areas of growth.
Tier-2 IT player with differentiated offerings in
embedded product design (87% of revenue). Benefits
from uptake in AI, analytics, automation, IOT in
target markets; helped drive strong revenue/earnings
Tata Elxsi growth. Media & communications growth to continue MODERATE MODERATE
in FY21E; transportation (47% of revenues) may be
hit. Benefits from remote delivery in medium term
with efforts mix at 70:30 in favor of offshore.
LOW
Demand from NOCIL's key end-customer, tyres
NOCIL is one of the biggest rubber chemical
(rubber chemicals), will remain weak in near future
manufacturers after the Chinese players. It will HIGH
as global demand weakness will extend auto
benefit from: a) desire to have alternative source to
slowdown. Plants are closed till date similar to most
China, b) increasing cost competitiveness of NOCIL Consensus FY21 earnings estimates have seen
NOCIL tyre manufacturers. Moreover, there can be near-
vs. China (increase in cost of doing chemicals meaningful downward revisions (45-50%) in
term risk of Chinese players reducing prices to clear
business in China, recently imposed duty on rubber the past one year. We believe there could be
inventory. Recovery will only be slow; growth from
chemicals imported to US from China, and improving further risk if the plant shutdown extends.
FY22E driven by auto cycle recovery and low base of
process efficiency of NOCIL) and c) its foray into
FY21.
specialized rubber chemicals. Also, NOCIL is a debt-
free company.
Jubilant will be the biggest beneficiary of current NONE

situation as Domino's would be preferred over MODERATE
smaller restaurants/cloud kitchens as hygiene will Jubilant’s execution improved with every disruption –
Jubilant play important role over discounting. With JUBI's own threat from Yum and other QSRs in early 2000s, own JUBI will see moderation in profits led by
Foodworks supply chain (sourcing and delivery) in play, it will issues like management churn and rapid expansion negative SSGs, closure of stores, delay in
also benefit from increase in share of delivery vis-a- of Domino’s/Dunkin in FY15-17, and threat of food opening and ramping up of new stores, and
vis dine-in and from challenges faced by other aggregators in recent times. Even in the current impact of negative operating leverage.
restaurants in sourcing raw material. situation, JUBI was one of the first companies to
launch 'contactless delivery’.
Benefited from entry barriers in existing space, where
client familiarity and success are key to scale up.
ER&D remains fastest growing service in Indian IT.
L&T Near term, might be impacted by high exposure (91%
MODERATE MODERATE
Technology of revenues from Manufacturing/Hi-tech/Travel) to
verticals hit by Covid-19. But company highlighted
large deal conversion on track; expects support in
telecom/media/entertainment.
Lockdown is negatively impacting 1QFY21 footfalls,
LOW LOW
but we expect footfalls to gradually increase as cities
steadily lift movement restrictions, manpower is
Dr Lal Pathlabs Unbranded/smaller players could emerge weaker, Near-term impact on earnings is material, but
available and hospital OPDs start functioning.
which could lead to consolidation in the industry and we expect sharp rise in footfalls once the
Overall, we expect footfalls to revert to recent
benefit larger chains. lockdown restrictions lift.
quarterly run-rate by end-FY21.
AMBIT INSIGHTS
Analyst comments on business for the next 12

Company Risk to business model Risk to earnings estimates
months
Demand disruption from China/Vietnam/USA amid
COVID-19 outbreak would be high, implying
significant impact for next 12 months. This would be
coupled with price correction as global supply-
Avanti Feeds MODERATE MODERATE
demand dynamics are disturbed. Nation-wide
lockdown has impacted ready-to-harvest shrimps in
ponds (>Rs1.2bn) in in East and West Godavari
districts of Andhra Pradesh.
Honeywell offers technological solutions for
diversified industries such as aerospace, healthcare &
pharma, retail, safety, etc. For the next 12 months,
Honeywell
the business may get affected due to slowdown in MODERATE MODERATE
Auto
overall capex, especially in the industrial sector.
However, adoption of automation solutions might
prove to be an offset.
MODERATE
Successful in creating 4 large brands in apparel HIGH
While ABFRL has been successful in creating 4 large
business, but will face increase in threat from e-
brands in the apparel business, it will face increase in
Aditya Bir. Fas. commerce players. ABFRL’s business is skewed ABFRL may report loss in FY21 led by high
threat/competition from e-commerce players. Also,
towards Formals, so may see stress with increase in financial costs and low PAT margin (0.8% in
ABFRL business is more skewed towards formals
work from home. 9MFY20).
which may see stress with increase in WFH
instances/people.
Strong leadership of CEO Sanjay Jalona and
improved management bandwidth, good client
satisfaction scores, operational control and
differentiated positioning helped post best-in-class
L & T Infotech LOW LOW
growth. Capability-focused acquisitions helped
augment offerings. LTI is better placed among L&T’s
IT subsidiaries with reasonable exposure to defensive
verticals and service lines.
Consumer durables companies may perform well
initially after lockdown as seen in China. We expect
Whirlpool discretionary spend to come down considerably which
MODERATE LOW
India may affect sales of white goods. In the longer term,
white goods continue to be a lucrative story given
lower penetration in India.
HIGH
One of most affected in our coverage. Multiplexes HIGH
face 3 immediate risks: (a) content risk as production
Covid19 will act as a catalyst in shifting people from
has stopped and movies now being released on OTT PVR's fixed cost as well as financial cost are
multiplex to OTT driving permanent loss of certain
PVR as well; (b) footfalls risk; (c) regulatory risk led by very high. With business under complete
percentage of consumers. Also, it will drive
government imposing further restriction on capacity lockdown, PVR may report loss in FY21 given
accelerated adoption of OTT as a source of
or increasing lockdown period for such businesses limited opportunity to control these fixed and
entertainment driving further structural risk to the
and allowing consumers to bring home cooked food. financial costs.
business.
We expect 5-8% decline in cement volumes for MODERATE
LOW
Ramco in FY21. Should see similar decline in Earnings estimates are more sensitive to price
While Ramco expansion at Jayanthipruram gets
revenues as we don’t see much increase in vs. the volumes. Given the sharp dip in
Ramco Cement delayed by 3-6 months but company should be able
realisations as company sells more in East. Margins volumes we expect Tamil Nadu player (50%
to benefit from it in FY22 through reduced servicing
should be under further pressure as clinker expansion exposure for Ramco) could manage pricing
cost to the eastern markets.
at Jayanthipuram gets delayed to FY22. discipline similar to FY12-14.
Room AC business will remain subdued as
compressor availability and low sales due to COVID-
Voltas 19 will be an issue. The Volt Beko JV is expected to MODERATE LOW
be next driver of growth in coming years. MEP
business will continue to perform moderately.
MODERATE
HIGH
Geared to transportation which accounts for ¾ of
FY20E volumes. Near-term demand hinges on Since IGL's margin on sale of CNG is 1/3rd of retail
Earnings estimates are fluid given the
duration of lockdown and consumer behaviour. selling price (unlike OMCs that earn 4-7%), the
Indraprastha Company's umbilical link to transportation
Remains to be seen whether car owners (several work business faces a Regulatory threat to its NCR
Gas demand. Estimates are varied on account of
in formal sector) continue to WFH. Input costs and presence's monopoly. The Regulator could earmark a
difficulty in (i) guesstimating the duration of
margins remain predictable given Government's portion of IGL's capacity for 3rd party usage (~20%)
lockdown (ii) second order behavioural and
administrative gas pricing mechanism. and ask IGL to lease the same for a regulated return.
economic impact of Covid19
This has the potential to reduce volume and margins.
Abbott would benefit from chronic patients engaging
LOW
in a behaviour of panic buying given supply LOW
uncertainty in the chain, high brand recall would lead Abbott has a well balanced portfolio, due to
Abbott India While we do expect demand to be under pressure in
to possible market share gains at the expense of which any demand destruction would not have
FY21, but that would largely be limited to acute
smaller players and trade generics presence would a severe impact on earnings
segments like anti-infectives, gastro and vitamins
also push sales on the back of distributor tie-ups
While revenues might be impacted in the near term
due to European exposure (37% revenue) and higher
BFSI and transportation exposure (75% revenue), app
NIIT Tech. MODERATE MODERATE
maintenance and IMS business (ADM & IMS
contribute to 89% revenues) would lend defensibility
to the business.
Source: Ambit Capital research, Company
AMBIT INSIGHTS
Recap of construction of our Ten Bagger portfolio

In the latest iteration (click here for the detailed note) of the Ten Bagger exercise to
identify stocks for the portfolio, we select firms which clear our ‘greatness’ filters (i.e.
where the ‘greatness score’ is more than 67%) as well as ‘accounting’ filters (i.e.
where the stock does not fall in the bottom three deciles of accounting in our
accounting model).
To identify the stocks for our Ten Bagger 9.0 iteration, we start with firms with the
highest ‘greatness score’. Within these firms, we remove firms:
 That are in the ‘Zone of Darkness’ in our accounting model (i.e. the bottom 3
deciles on accounting quality. For a full exposition of our accounting filter, please
refer to our 08 January 2020 note “When Accounting Predicted”);
 Firms with suspect corporate governance; and
 Firms with 6 months median daily value traded (MDV) of below USD 0.35mn.
This overlay of ‘greatness’, ‘accounting’, corporate governance and liquidity checks
allows us to identify the 25 firms that comprise our Ten Bagger portfolio. We highlight
that we do not exclude the companies where our analysts may have a negative view for
near-term earnings or valuations.
Forensic accounting framework

Using our own proprietary forensic accounting framework consisting of 11 simple yet
powerful ratios spread across P&L misstatement checks, balance sheet misstatement
checks, pilferage checks and audit quality checks, we assign scores to ~1400
companies (ex-BFSI). Basis the final scoring, we classify the companies into deciles (D1
to D10) such that D1 is the best, while D10 is the worst. We bucket all these deciles
into three zones such that:
 D1 to D5 = ‘Zone of Safety’ companies or good accounting quality companies
 D6 and D7 = ‘Zone of Pain’ companies or relatively poor quality companies
 D8 to D10 = ‘Zone of Darkness’ companies or poor quality accounting
companies.
Please note that we use the previous six years’ financials to arrive at these scores.
Greatness framework
Here, we apply our greatness framework on ~1400 companies (ex-BFSI). This
framework again hinges on using publicly available data to assess which firms have,
over a sustained period of time (FY14-FY19), been able to relentlessly and
consistently:
 Invest capital
 Turn investment into sales
 Turn sales into profit
 Turn profit into balance sheet strength
 Turn all of that into free cash flow and
 Invest free cash flow again
Basis the final scoring, we divide companies as great firms (>67% score), good but not
great (50-67% score) and mediocre firms (<50%)
AMBIT INSIGHTS
Ambuja Cement BUY

Cost rationalisation drives EBITDA beat
Ambuja’s cement volume declined 10% YoY due to the ongoing lockdown, but
Result Update
was 3% above our estimate. Cement realisation improved 3% QoQ to
Rs4,792, but was lower than suggested price increases in its core North/East Stock Information
markets. Sharp reduction in RM/P&F cost by 11%/Rs165/t QoQ has positively Bloomberg Code: ACEM IN
surprised; this was partly led by higher closing inventory which could reverse CMP (Rs): 172
in 2Q. Overall variable cost/t was down 5%/Rs140/t. 12% QoQ decline in TP (Rs): 225
other expenses also surprised and subsided the negative impact of operating
Mcap (Rs bn/US$ bn): 342/4.5
leverage. EBITDA/t jumped by 25%/Rs220/t QoQ and absolute EBITDA of
Rs6bn was up 30% YoY. Due to extended lockdown and expectation of a slow 3M ADV (Rs mn/US$ mn): 938/12.30
demand recovery in urban housing, we have reduced volume/realisation
estimates for CY20 by 11%/2%, building recovery over CY21-22. Over CY19-
22E, we expect volume/realisation CAGR of 2%/3% and 5% CAGR in EBITDA. Stock Performance (%)
At CMP, Ambuja currently trades at 20% discount to even replacement cost. 1M 3M 12M YTD
Remain BUYers with TP of Rs225 (30% upside). Absolute 22 (20) (24) (12)
Key surprises to note: Rel. to Sensex 15 2 (5) 11
Source: Bloomberg, Ambit Capital research
 Cement volumes were down 10% YoY vs. our expectation of a 13% decline:
Ambuja despite capacity constraint was able to maintain healthy growth in
volumes over Jan-Feb’20, which helped it report better-than-expected volume
growth in 1Q. Ambit Estimates (Rs bn)
CY20E CY21E CY22E
 Cement realisation were up only 3% vs. expectation of 6% increase: Net
Revenues 104 118 130
cement realisation was Rs4,792, up 3%/Rs145/t but was 3% lower than our
estimate. Less-than-expected growth in realisation could possibly be due to EBITDA 15 20 25
change in volume mix tilted in favour of west markets. EPS (Rs) 5.0 6.9 8.5
Source: Company, Ambit Capital research
 RM+P&F cost/t fell by 11% QoQ and was 6% below our estimate: RM cost
for Ambuja was down by 20% QoQ partly due to higher closing inventory. In 1Q,
the company further benefitted from lower fuel prices, which resulted in 5%
decrease in power cost/t despite higher closing inventory. Overall, variable cost/t
was lower by Rs140/t (5%) QoQ and was Rs40/t (1%) lower than our estimate.
 Other expenses fell 12% QoQ, in line with fall in volumes: Other expenses
which are partly fixed fell by 12% QoQ, in line with the volume decline; surprising
positive but this may not be sustainable.
 Absolute EBITDA of Rs6bn grew 30% YoY and was 9% above our estimate:
Led by superior realisation and reduced cost structure, EBITDA/t sequentially
improved by 25%/Rs220/t. On YoY basis, EBITDA margin improved by 570bps
and absolute EBITDA was up 30%.
Where do we go from here?
In light of the ongoing lockdown, risks of further extensions and then expectations of a
slow demand recovery by the end of CY20, we have reduced our volume growth
expectation by 10% for CY20E. Also, we expect recovery in demand by urban and
rural housing, where Ambuja has brand advantage, would be relatively gradual to the
Infra segment. We have also reduced our realisation expectation for CY20 by 2%. Led
by lower realisations and marginally lower fixed cost absorption, EBITDA/t in CY20
should decline by Rs200/t to ~Rs700. While CY20 will be challenging, we do not
expect Ambuja to defer its capex.
Research Analysts
Over CY20-22E, with recovery in cement demand and aided by expanded capacity, Nitin Bhasin
we expect 8% volume growth for Ambuja. Further, Ambuja’s focus to increase nitin.bhasin@ambit.co
premium variant sales, supplementary product sales and ~50% capacity exposure to Tel: +91 22 6623 3241
North and Gujarat markets where pricing discipline persists should support 3% CAGR
Prateek Maheshwari
in realisation. Margins (EBITDA/t) should also sharply recover to Rs980/t by CY22 prateek.maheshwari@ambit.co
driving 5% CAGR in absolute EBITDA over CY19-22E. Tel: +91 22 6623 3234
Our revised TP of Rs225 implies 12x on CY21 EBITDA, but Ambuja currently trades at
20% to even replacement cost. We recommend BUY
AMBIT INSIGHTS
Exhibit 1: Quarterly results snapshot: Revenue decline by 3% YoY and was in-line with estimates. EBITDA jumped by 31%
YoY driven by 570bps YoY margin improvement from improved realisations and lower fixed overheads.
Quarter ending (In Rs mn unless specified) 1QCY19 4QCY19 1QCY20 YoY (%) QoQ (%) Ambit est Dev (%)
Net sales 28,470 30,380 27,600 (3) (9) 27,609 (0)
Other operating income 806 979 675 (16) (31) 626 8
Operating Income 29,276 31,359 28,275 (3) (10) 28,236 0
Raw material incl. stock Adj. 2,567 3,633 2,514 (2) (31) 2,803 (10)
Cost of materials 2,489 2,553 2,522 1 (1)
Change in inventory (17) 828 (390) 2,181 (147)
Purchase of stock 95 252 382 302 52
Employee cost 1,671 1,690 1,722 3 2 1,690 2
Power and fuel 7,099 6,692 5,622 (21) (16) 5,606 0
Outward Freight 6,596 6,463 5,763 (13) (11) 5,373 7
Freight on inter-unit transfer 1,771 1,914 1,758 (1) (8) 1,682 5
Other Expenses 4,941 5,493 4,811 (3) (12) 5,500 (13)
Total Expenditure 24,644 25,885 22,189 (10) (14) 22,653 (2)
EBITDA 4,633 5,474 6,086 31 11 5,582 9
EBITDA margin (%) 15.8 17.5 21.5 570bps 407bps 19.8 175bps
Depreciation 1,314 1,487 1,292 (2) (13) 1,500 (14)
EBIT 3,319 3,987 4,794 44 20 4,082 17
Other income 1,592 656 881 (45) 34 650 36
Interest expense 175 237 184 5 (22) 230 (20)
Adj. PBT 4,736 4,407 5,492 16 25 4,502 22
Exceptional items (810) - 163 -
Reported PBT 5,546 4,407 5,329 (4) 21 4,502 18
Total taxes 1,276 (142) 1,313 3 (1,023) 1,130 16
Adjusted ETR (%) 26.9 (3.2) 23.9 -303bps NM 25.1 -119bps
Reported PAT 4,270 4,549 4,016 (6) (12) 3,372 19
Adj. PAT 2,650 4,549 4,341 64 (5) 3,372 29
EPS (Rs) 2.15 2.29 2.02 (6) (12) 1.70 19
st
Source: Company, Ambit Capital research. Note: (a) Other operating income includes VAT Incentives; (b) Company adopted IND AS 116 from 1 Jan, 2020 for
which in 1QCY20 freight and other expenses were lower by Rs99mn and Rs10mn respectively. Also, Its depreciation & amortisation and Interest expenses were
higher by Rs87mn and Rs47mn respectively. We have reversed these adjustments for comparison with past period financials; (c) Further, we have adjusted other
expenses for foreign exchange loss of Rs163mn. (d) In 1QCY19, we have adjusted the other income for Rs810mn of un-recognised interest income on income tax
refunds.
AMBIT INSIGHTS
Exhibit 2: Unitary trends: Volumes decline by 10% YoY. Higher realisations and lower RM & Power cost led to Rs220/t (25%)
sequential improvement in EBITDA/t
Quarter ending (In Rs/tonne unless specified) 1QCY19 4QCY19 1QCY20 YoY (%) QoQ (%) Ambit Est. Dev (%)
Sales volume (mn tonnes) 6.37 6.54 5.76 (10) (12) 5.61 3
Avg. net realisation 4,469 4,645 4,792 7 3 4,925 (3)
Avg. net realisation (incl. operating income) 4,596 4,795 4,909 7 2 5,037 (3)
Avg. net realisation- ex-freight (incl. operating income) 3,434 3,657 3,791 10 4 3,967 (4)
Other op. income including Incentives 127 150 117 (7) (22) 112 5
Operating cost 3,869 3,958 3,852 (0) (3) 4,041 (5)
Raw material incl. stock Adj. (Rs/tonne) 403 555 437 8 (21) 500 (13)
Employee cost 262 258 299 14 16 301 (1)
Power and fuel 1,114 1,023 976 (12) (5) 1,000 (2)
Outward Freight 1,035 988 1,001 (3) 1 959 4
Freight on inter-unit transfer 278 293 305 10 4 300 2
Other Expenses 776 840 835 8 (1) 981 (15)
Cement EBITDA 601 687 939 56 37 884 6
EBITDA 727 837 1,057 45 26 996 6
Source: Company, Ambit Capital research. Note: (a) Cement EBITDA/t excludes incentives; (b) Above figures are for Ambuja’s standalone operations
Exhibit 2: Change in estimates: We have marginally increased our volume growth estimate, which does not materially
change our TP
Particulars (Rs mn unless New estimates Change (%)

mentioned)
CY20 CY21 CY22 CY20E CY21E CY22E
Utilization (%) 72.7 76.9 80.0 -11% -7% -9%
Despatches (mn tonnes) 21.6 23.5 25.2 -11% -7% -9%
Realisation (Rs/tonne) 4,786 4,977 5,126 -2% 0% 1%
EBITDA (Rs/tonne) 694 871 978 -25% -10% -6%
Revenues (Rs mn) 103,197 116,984 128,928 -13% -8% -8%
EBITDA (Rs mn) 14,974 20,474 24,606 -33% -16% -14%
PBT (Rs mn) 13,208 18,285 22,623 -36% -18% -15%
PAT (Rs mn) 9,893 13,695 16,945 -36% -18% -15%
EPS(Rs ) 5.0 6.9 8.5 -36% -18% -15%
RoIC (%) 15.6 20.4 25.6 -1249bps -548bps -558bps
RoCE (%) 3.0 4.4 5.4 -244bps -120bps -114bps
RoE (%) 4.4 5.9 7.1 -246bps -119bps -111bps
Target Price 225 -8.1%
Source: Ambit Capital Research. Note: Above figures are for Ambuja’s standalone operations
Exhibit 3: Ambit vs. Consensus: We have built-in conservative estimates for Ambuja
with 10% volume decline in CY20
Particulars Consensus Ambit Divergence
Revenue (Rs mn)
CY2020 111,363 104,275 -6%
CY2021 124,755 118,183 -5%
CY2022 132,402 130,249 -2%
EBITDA (Rs mn)
CY2020 19,755 14,974 -24%
CY2021 23,247 20,474 -12%
CY2022 26,609 24,606 -8%
Source: Bloomberg, Ambit Capital Research. Note: Above figures are for Ambuja’s standalone operations
AMBIT INSIGHTS
Exhibit 4: Ambuja currently trades at 10x one-year forward Exhibit 5: On EV/tonne, Ambuja trades at Rs6,300/t, a
EV/EBITDA, a 15% discount to last three-year average 22% discount to recent three-year average
(x) Rs/t 1-yr fwd EV/tonne

One-yr fwd EV/EBITDA
20 3 yr avg 1-yr fwd EV/tonne
Rolling 3 year average one-year fwd EV/EBITDA 16,000
16 14,000
12,000
12
10,000
8 8,000
6,000
4
4,000
- 2,000
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Source: Bloomberg, Company, Ambit Capital research Source: Bloomberg, Company, Ambit Capital research
Exhibit 6: Over last 3 months, consensus has reduced Exhibit 7: And has reduced EBITDA estimates for CY20/21
Ambuja’s revenue estimates for CY20/21/22 by 6%/2%/3% by 11%/2% respectively. For CY22, EBITDA estimates were
respectively increased by 7%
Rs. bn Rs. bn
CY20 CY21 CY22 CY20 CY21 CY22
170 30
160
27
150
140 24
130 21
120
18
110
100 15
May-…
Aug-19
Nov-19
Oct-19
Jan-20
Sep-19
Jun-19
Dec-19
Mar-20
Feb-20
Jul-19
Apr-19
Apr-20
May-19
Aug-19
Nov-19
Oct-19
Jan-20
Sep-19
Jun-19
Dec-19
Mar-20
Feb-20
Jul-19
Apr-19
Apr-20
Source: Ambit Capital research, Bloomberg Source: Ambit Capital research, Bloomberg
AMBIT INSIGHTS
Financials - Standalone
Income Statement (Rs mn)
Particulars CY18 CY19 CY20E CY21E CY22E
Revenue 113,568 116,679 104,275 118,183 130,249
Total expenses 94,692 95,252 89,301 97,709 105,643
EBITDA 18,876 21,427 14,974 20,474 24,606
Net depreciation / amortisation 5,481 5,438 5,937 6,868 7,330
EBIT 13,395 15,989 9,037 13,606 17,276
Net interest and financial charges 823 835 - - -
Other income 3,750 4,265 4,171 4,679 5,347
PBT 15,022 19,419 13,208 18,285 22,623
Provision for taxation 191 4,195 3,315 4,589 5,678
Adjusted PAT 12,411 15,224 9,893 13,695 16,945
Reported PAT 14,832 15,224 9,893 13,695 16,945
EPS (Rs) 7.5 7.7 5.0 6.9 8.5
Balance sheet (Rs mn)

Total Networth 210,125 222,052 227,318 234,609 243,629
Deferred tax liability (net) 3,722 2,161 2,161 2,161 2,161
Sources of funds 214,244 224,565 229,480 236,770 245,791
Net block 56,636 58,125 68,848 73,973 68,876
Capital work-in-progress 6,100 11,087 11,087 11,087 11,087
Investments 120,443 120,195 120,195 120,195 120,195
Cash and bank balances 29,995 43,690 37,132 38,643 52,368
Other current assets 1,860 2,014 2,014 2,014 2,014
Total Current Assets 68,688 80,501 73,638 77,065 92,452
Current liabilities and provisions 37,623 45,342 44,289 45,551 46,821
Net current assets 31,065 35,159 29,349 31,514 45,632
Application of funds 214,244 224,565 229,479 236,769 245,790
Cash flow Statement (Rs mn)

PBT 15,061 19,480 13,208 18,285 22,623
Depreciation 5,481 5,438 5,937 6,868 7,330
CFO before change in WC 18,135 21,771 14,974 20,474 24,606
Change in working capital (5,922) 3,877 (748) (655) (393)
CFO 5,962 24,840 10,911 15,230 18,535
Capex (5,936) (11,114) (16,660) (11,993) (2,233)
Others 3,393 3,734 4,171 4,679 5,347
CFI (2,543) (7,380) (12,489) (7,314) 3,114
CFF (5,027) (3,868) (4,979) (6,405) (7,924)
Net increase in cash (1,608) 13,592 (6,557) 1,511 13,725
FCF 26 13,726 (5,749) 3,236 16,302
AMBIT INSIGHTS
Ratios
Revenue growth % 8.6 2.7 (10.6) 13.3 10.2
EBITDA growth % (2.7) 13.5 (30.1) 36.7 20.2
PAT growth % 18.7 2.6 (35.0) 38.4 23.7
EPS norm (dil) growth % 18.7 2.6 (35.0) 38.4 23.7
EBITDA margin % 16.6 18.4 14.4 17.3 18.9
EBIT margin % 11.8 13.7 8.7 11.5 13.3
Net margin % 10.9 13.0 9.5 11.6 13.0
Post tax RoCE % 5.0 5.7 3.0 4.4 5.4
RoE % 7.2 7.0 4.4 5.9 7.1
Post tax RoIC % 23.7 27.9 15.6 20.4 25.6
Valuation parameters
P/E (x) 23.0 22.4 34.5 24.9 20.2
P/B (x) 1.6 1.5 1.5 1.5 1.4
Debt/Equity (x) 0.0 0.0 0.0 0.0 0.0
Net debt/Equity (x) (0.2) (0.2) (0.2) (0.2) (0.2)
Net debt/EBITDA (x) (1.7) (2.1) (2.6) (2.0) (2.2)
EV/Sales (x) 1.8 1.8 2.0 1.6 1.4
EV/EBITDA (x) 10.7 9.8 13.9 9.5 7.2
EV/tonne (Rs) 6,842 7,051 7,000 6,163 5,661
Unitary trends
Particulars CY18 CY19 CY20E CY21E CY22
Sales volume (mn tonnes) 24.2 24.0 21.6 23.5 25.2
Avg. net realisation (Rs/tonne) 4,525 4,738 4,786 4,977 5,126
Avg. net realisation (Rs/tonne) (incl. operating income) 4,681 4,870 4,836 5,028 5,179
Operating cost analysis (Rs/tonne) 3,903 3,975 4,141 4,157 4,200
Raw material incl. stock Adj. 390 470 424 437 450
Employee cost 280 281 312 295 284
Power and fuel 1,051 1,079 1,112 1,145 1,180
Freight 1,351 1,291 1,330 1,370 1,411
Other Expenses 831 854 963 910 876
Cement EBITDA (Rs/tonne) 622 763 644 820 926
EBITDA (Rs/tonne) 778 894 694 871 978
AMBIT INSIGHTS
IndusInd Bank SELL

No respite on asset quality
Asset quality remained under pressure with annualised credit cost of 471bps
Result Update
in 4QFY20 (vs 206bps in 3QFY20). Net slippage ratio was 3.3% in 4QFY20 vs Stock Information
2.2% last quarter. Deposits declined 7% QoQ with SA deposits declining 18%
Bloomberg Code: IIB IN
QoQ, leading to loan book remaining flat QoQ. NIM expanded 10bps QoQ
due to cost of fund declining QoQ. The bank made additional provision of CMP (Rs): 407
Rs2.8bn (0.15% of loan) for Covid-19 and expects just 50bps additional credit TP (Rs): 364
cost due to Covid-19. Management expects deposit base to stabilise from this Mcap (Rs bn/US$ bn): 283/4.0
quarter and expects >10% loan growth in FY21. Given its 33% exposure to
3M ADV (Rs mn/US$ mn): 11,433/150
microfinance/CV/CE and 10% exposure to real estate/NBFCs/telecom, we
expect credit cost in FY21/FY22E to be ~4.0%/2.3% vs 2.4% in FY20. Also, we
expect ~5% loan growth and ~40bps NIM compression in FY21/22E leading
Stock Performance (%)
to negligible profits in FY20 and RoE of only ~9% in FY22E. We maintain SELL
with TP of Rs364 (11% downside). 1M 3M 12M YTD
Absolute (1) (68) (76) (73)
Rel. to Sensex (7) (45) (57) (50)
Asset quality pressure continues Source: Bloomberg, Ambit Capital research
Asset quality pressure continued with annualised credit cost of 4.7% during the
quarter (vs 2.1% in 3QFY20 and 3.5% in 4QFY19). Annualised net slippage ratio
Ambit Estimates (Rs bn)
increased to 3.3% during the quarter vs 2.2% despite gross slippage ratio remaining
stable QoQ at ~4.0%. However, gross NPA ratio increased marginally to 2.45% vs FY20 FY21E FY22E
2.18% in 3QFY20 as the bank wrote off 25% of its gross NPAs during the quarter. NII 120.6 116.4 122.6
Asset quality pressure was visible in retail loans as well with retail gross slippages PAT 44.2 7.4 31.4
being 2.7% in FY20 vs 2.2% in FY19. Gross NPA in MFI/BBG/LAP/CV segments
EPS (Rs) 63.7 10.7 45.3
increased by 63%/18%/12% QoQ.
The bank created just Rs2.8bn of floating provisions (0.15% of loan book) for potential
asset quality impact of Covid-19 and expects just 80bps of additional NPAs and 50bps
of additional credit cost because of Covid-19. However, we expect gross slippage ratio
of 6% for the bank in FY21 with credit cost of 4% given the bank’s higher exposure to
microfinance loans (12% of loan book), CV/CE (22% of loan book) and 10% exposure
to real estate/NBFCs/telecom sector.
Deposit/Loan growth under pressure, NIMs improve

The deposit base of the bank declined by 7% QoQ with savings deposits declining
18% QoQ. This resulted in loan book remaining flat QoQ. The corporate loan book
declined by 4% QoQ while retail loan book increased by 3% QoQ. Going forward, we
expect loan growth to remain weak in FY21 (5% YoY) as we expect deposit growth to
remain under pressure due to higher share of wholesale deposits (60%) in the deposit
mix. Moreover, relatively low LCR (~112%) and high CD ratio should also force the
bank to curtail its loan growth in FY21 till deposit base stabilises.
Yield on advances was under pressure during the quarter with 8bps QoQ decline.
However, the cost of funds was also down by 21bps QoQ leading to NIM expansion Research Analysts
of 10bps QoQ. However, slowing loan growth and rising NPAs will have negative Pankaj Agarwal, CFA
impact on NIM. We expect NIM compression of ~40bps during FY20-22E.
Tel: +91 22 3043 3206
pankaj.agarwal@ambit.co
Declining fee income growth Ajit Kumar, CFA

Tel: +91 22 3043 3252
Core fee income declined by 8% QoQ in this quarter. The management highlighted ajit.kumar@ambit.co
that lockdown had negative impact on its distribution businesses. Operating expenses
Shreya Khandelwal
(up 26% YoY vs 29% in last quarter), with cost-to-income standing at ~43%, broadly
Tel: +91 22 6623 3292
similar level as compared to 3QFY20. We expect core fee income to be under
pressure in FY21 (~1% YoY growth) due to lower disbursements of retail loans, lower shreya.khandelwal@ambit.co
transaction volumes and lower sales of third-party products. We expect management
to control operating expenses in FY21 given pressure on top line and hence expect
~11% growth in opex in FY21E.
AMBIT INSIGHTS
Where do we go from here?

Increase in credit cost and slowdown in loan growth mean the bank will report almost
negligible profits in FY21 and just 8.7% RoE in FY22. Given new CEO talking about
change in business strategy towards focusing more on the liability side, we believe it
would take 2-4 years for the bank to rebuild its business model. Remain SELLers with
revised TP of Rs364 (from Rs355), implying 0.7x FY22E P/B.
IIB regaining confidence of depositors, leading to deposit growth of >15% in FY21
and stable asset quality in microfinance/CV/CE loans remain the key risks to our SELL
stance.
Exhibit 1: Quarterly results snapshot
Earnings (Rs mn) 4QFY19 3QFY20 4QFY20 YoY (%) QoQ (%) 4QFY20E A/E (%)
NII 22,324 30,740 32,312 45% 5% 25,994 24%
Non-Interest income 15,590 17,894 17,720 14% -1% 16,501 7%
Total Income 37,914 48,634 50,032 32% 3% 42,495 18%
Employee Cost 4,812 5,501 4,957 3% -10%
Other Operating Expenses 12,424 15,677 16,713 35% 7%
Total Operating Expenses 17,237 21,178 21,670 26% 2% 20,318 7%
Operating Profit 20,677 27,456 28,362 37% 3% 22,177 28%
Total Provisions 15,607 10,435 24,403 56% 134% 12,277 99%
PBT 5,070 17,022 3,959 -22% -77% 9,900 -60%
Tax 1,469 4,020 940 -36% -77% 2,043 -54%
Reported Profit 3,601 13,002 3,018 -16% -77% 7,857 -62%
Balance sheet (Rs bn)
Deposits 1,948.7 2,167.1 2,020.4 4% -7% 2,154.8 -6%
Net Advances 1,863.9 2,074.1 2,067.8 11% 0% 2,089.4 -1%
Total Assets 2,778.2 3,079.4 3,070.6 11% 0% 3,124.1 -2%
Loan-Deposit ratio (%) 95.7% 95.7% 102.3%
Key Ratios
Credit Quality
Gross NPAs (Rs mn) 39,474 45,784 51,467 30% 12%
Net NPAs (Rs mn) 22,483 21,733 18,866 -16% -13%
Gross NPA (%) 2.10% 2.18% 2.45%
Net NPA (%) 1.21% 1.05% 0.91%
Loan Loss Provisions (%) 3.47% 2.06% 4.71% 2.36%
Coverage Ratio (%) 43.0% 52.5% 63.3%
Capital Adequacy
Tier I (%) 13.70% 13.49% 14.57%
CAR (%) 14.16% 13.92% 15.04%
Du-pont Analysis
NII / Assets (%) 3.34% 4.08% 4.20% 3.35%
Non-Interest Inc. / Assets (%) 2.33% 2.38% 2.31% 2.17%
Operating Cost / Assets (%) 2.58% 2.81% 2.82% 2.80%
Operating Profits / Assets (%) 3.09% 3.64% 3.69% 2.73%
Provisions / Assets (%) 2.34% 1.39% 3.17% 1.00%
ROA (%) 0.54% 1.73% 0.39% 1.04%
AMBIT INSIGHTS
Financials
Balance Sheet
Year to March (Rs bn) FY18 FY19 FY20 FY21E FY22E
Networth 235 263 347 347 375
Deposits 1,516 1,949 2,020 2,157 2,330
Borrowings 383 473 608 603 651
Other Liabilities 79 90 96 149 152
Total Liabilities 2,213 2,775 3,071 3,255 3,508
Cash & Balances with RBI &
132 148 160 0 0
Banks
Investments 501 593 0 0 0
Advances 1,450 1,864 2,068 2,181 2,355
Other Assets 130 170 243 262 282
Total Assets 2,213 2,775 3,071 3,255 3,508
Source: Company, Ambit Capital Research.
Income statement
Interest Income 173 223 288 295 313
Interest Expense 98 134 167 179 190
Net Interest Income 75 88 121 116 123
Total Non-Interest Income 48 56 70 71 73
Total Income 122 145 190 187 196
Total Operating Expenses 56 64 82 91 101
Employees expenses 18 19 22 24 25
Other Operating Expenses 38 46 60 68 76
Pre Provisioning Profits 67 81 108 96 95
Provisions 12 31 47 85 52
PBT 55 50 61 10 43
Tax 19 17 17 3 12
PAT 36 33 44 7 31
Source: Company, Ambit Capital Research
Key ratios
Credit-Deposit (%) 95.6% 95.7% 102.3% 101.1% 101.1%
CASA ratio (%) 44.0% 43.1% 47.4% 50.6% 53.4%
Cost/Income ratio (%) 45.7% 44.2% 43.3% 48.9% 51.4%
Gross NPA (Rs bn) 17 39 51 126 86
Gross NPA (%) 1.17% 2.10% 2.45% 5.54% 3.55%
Net NPA (Rs bn) 7 22 19 40 26
Net NPA (%) 0.51% 1.21% 0.91% 1.84% 1.09%
Provision coverage (%) 56.3% 43.0% 63.3% 68.0% 70.0%
NIMs (%) 3.98% 3.77% 4.44% 4.00% 3.94%
Tier-1 capital ratio (%) 14.6% 11.8% 9.8% 9.2% 9.6%
AMBIT INSIGHTS
Du-Pont analysis
Year to March FY18 FY19 FY20 FY21E FY22E
NII / Assets (%) 3.8% 3.5% 4.1% 3.7% 3.6%
Other income / Assets (%) 2.4% 2.3% 2.4% 2.2% 2.2%
Total Income / Assets (%) 6.1% 5.8% 6.5% 5.9% 5.8%
Cost to Assets (%) 2.8% 2.6% 2.8% 2.9% 3.0%
PPP / Assets (%) 3.3% 3.2% 3.7% 3.0% 2.8%
Provisions / Assets (%) 0.6% 1.2% 1.6% 2.7% 1.5%
PBT / Assets (%) 2.7% 2.0% 2.1% 0.3% 1.3%
Tax Rate (%) 34.2% 33.7% 27.0% 27.0% 27.0%
ROA (%) 1.81% 1.32% 1.51% 0.24% 0.93%
Leverage 9.1 10.0 9.6 9.1 9.4
ROE (%) 16.5% 13.3% 14.5% 2.1% 8.7%
Valuation metrics
Year to March FY18 FY19 FY20 FY21E FY22E
EPS (Rs) 60.1 54.8 63.7 10.7 45.3
EPS growth (%) 25% -9% 16% -83% 322%
BVPS (Rs) 390.9 436.8 500.4 499.7 540.4
Adj BVPS (Rs) 390.9 425.4 496.7 476.2 540.4
P/E (x) 6.8 7.4 6.4 38.1 9.0
P/ABV (x) 1.04 0.96 0.82 0.86 0.75
P/BV (x) 1.04 0.93 0.82 0.82 0.75
AMBIT INSIGHTS
Institutional Equities Team

Research Analysts
Name Industry Sectors Desk-Phone E-mail
Nitin Bhasin - Head of Research E&C / Infra / Cement / Home Building / Aviation (022) 66233241 nitin.bhasin@ambit.co
Ajit Kumar, CFA, FRM Banking / Financial Services (022) 66233252 ajit.kumar@ambit.co
Amandeep Singh Grover Mid-Caps / Hotels / Real Estate (022) 66233082 amandeep.grover@ambit.co
Ashish Kanodia, CFA Consumer Discretionary (022) 66233264 ashish.kanodia@ambit.co
Ashwin Mehta, CFA Technology (022) 6623 3295 ashwin.mehta@ambit.co
Basudeb Banerjee Automobiles / Auto Ancillaries (022) 66233141 basudeb.banerjee@ambit.co
Darshan Mehta E&C / Infrastructure / Aviation (022) 66233174 darshan.mehta@ambit.co
Deep Shah Media / Telecom / Oil & Gas (022) 66233064 deep.shah@ambit.co
Dhruv Jain Mid-Caps (022) 66233177 dhruv.jain@ambit.co
Karan Khanna, CFA Mid-Caps / Hotels / Real Estate (022) 66233251 karan.khanna@ambit.co
Karan Kokane Automobiles / Auto Ancillaries (022) 66233028 karan.kokane@ambit.co
Kushagra Bhattar Healthcare (022) 66233062 kushagra.bhattar@ambit.co
Nikhil Mathur, CFA Healthcare (022) 66233220 nikhil.mathur@ambit.co
Pankaj Agarwal, CFA Banking / Financial Services (022) 66233206 pankaj.agarwal@ambit.co
Prasenjit Bhuiya Agri & Chemicals (022) 66233132 prasenjit.bhuiya@ambit.co
Prateek Maheshwari Cement (022) 66233234 prateek.maheshwari@ambit.co
Ritesh Gupta, CFA Consumer Discretionary / Agri & Chemicals (022) 66233242 ritesh.gupta@ambit.co
Satyadeep Jain, CFA Metals & Mining (022) 66233246 satyadeep.jain@ambit.co
Shreya Khandelwal Banking / Financial Services (022) 6623 3292 shreya.khandelwal@ambit.co
Sumit Shekhar Economy / Strategy (022) 66233229 sumit.shekhar@ambit.co
Udit Kariwala, CFA Banking / Financial Services (022) 66233197 udit.kariwala@ambit.co
Varun Ginodia, CFA E&C / Infrastructure / Aviation (022) 66233174 varun.ginodia@ambit.co
Vinit Powle Strategy / Forensic Accounting (022) 66233149 vinit.powle@ambit.co
Vivekanand Subbaraman, CFA Media / Telecom / Oil & Gas (022) 66233261 vivekanand.s@ambit.co
Sales
Name Regions Desk-Phone E-mail
Dhiraj Agarwal - MD & Head of Sales India (022) 66233253 dhiraj.agarwal@ambit.co
Bhavin Shah India (022) 66233186 bhavin.shah@ambit.co
Dharmen Shah India / Asia (022) 66233289 dharmen.shah@ambit.co
Abhishek Raichura UK & Europe (022) 66233287 abhishek.raichura@ambit.co
Pranav Verma Asia (022) 66233214 pranav.verma@ambit.co
USA / Canada
Hitakshi Mehra Americas +1(646) 793 6751 hitakshi.mehra@ambitamerica.co
Achint Bhagat, CFA Americas +1(646) 793 6752 achint.bhagat@ambitamerica.co
Singapore
Srinivas Radhakrishnan Singapore +65 6536 0481 srinivas.radhakrishnan@ambit.co
Sundeep Parate Singapore +65 6536 1918 sundeep.parate@ambit.co
Production
Sajid Merchant Production (022) 66233247 sajid.merchant@ambit.co
Sharoz G Hussain Production (022) 66233183 sharoz.hussain@ambit.co
Jestin George Editor (022) 66233272 jestin.george@ambit.co
Richard Mugutmal Editor (022) 66233273 richard.mugutmal@ambit.co
Nikhil Pillai Database (022) 66233265 nikhil.pillai@ambit.co
Babyson John Database (022) 66233209 babyson.john@ambit.co
AMBIT INSIGHTS
Ambuja Cements Ltd (ACEM IN, BUY)
350
300
250
200
150
100
50
0
May-17
Nov-17
May-18
Nov-18
May-19
Nov-19
Mar-17
Mar-18
Mar-19
Mar-20
Sep-17
Sep-18
Sep-19
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Ambuja Cements Ltd
IndusInd Bank Ltd (IIB IN, SELL)
2,500
2,000
1,500
1,000
500
0
May-17
Nov-17
May-18
Nov-18
May-19
Mar-17
Nov-19
Mar-18
Mar-19
Mar-20
Sep-17
Sep-18
Sep-19
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
IndusInd Bank Ltd
AMBIT INSIGHTS
Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >10%
SELL <10%
NO STANCE We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation
UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events
NOT RATED We do not have any forward looking estimates, valuation or recommendation for the stock
POSITIVE We have a positive view on the sector and most of stocks under our coverage in the sector are BUYs
NEGATIVE We have a negative view on the sector and most of stocks under our coverage in the sector are SELLs
* In case the recommendation given by the Research Analyst becomes inconsistent with the rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures (like
change in stance/estimates) to make the recommendation consistent with the rating legend.
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Additional information on recommended securities is available on request.
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AMBIT INSIGHTS
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AMBIT INSIGHTS

IndusInd Bank (SELL)

ANALYST NOTES: BFSI: MF industry AUM growth resilient to redemption

Rating category-wise credit risk fund exposure

Strategy Quick Insight

What is the Ten Bagger portfolio?

Tenbagger iterations (1.0 to 9.0) 76.7 87.3 86.9

Tenbagger iteration return BSE500 index return Vinit Powle

History suggests ‘Great’ firms make a stronger comeback

Ten Bagger companies have higher potential to navigate difficult times

Cum. Capex/CFO* 50% 3 yr. median ROCE

Portfolio BSE500(ex-BFSI) universe median Portfolio

0.8 Debt / equity ratio Cum. CFO/EBITDA*

Portfolio BSE500(ex-BFSI) universe median Portfolio BSE500(ex-BFSI) universe median

Exhibit 10: Ten Bagger 9.0 – A financial snapshot

Ten Bagger 9.0 (then) Rich

Exhibit 14: Ten Bagger 9.0 valuations table

DMART IN Avenue Super. # 25 27 106 86 65 13 11 10 67 55 43

BOS IN Bosch 11 12 27 25.9 21.3 3 3.1 2.8 19 18.4 15.3

PAG IN Page Industries# 7 12 57 65 46 24 22 20 39 44 32

NTCPH IN Natco Pharma 15 20 22 19.1 15.7 3 2.6 2.3 18 15.1 11.7

GRIL IN Graphite India 15 194 57 11.2 6.6 1 1 1 N/A 9.5 4.6

TELX IN Tata Elxsi 6 9 18 16.2 15 4 3.5 3.1 11 10.1 9.4

BRCM IN Balrampur Chini 0 17 4 3.7 3.1 1 0.8 0.6 4 3.8 3.5

NOCIL IN NOCIL 17 12 10 9.5 7.6 1 1 0.9 7 5.9 4.8

JUBI IN Jubilant Food.# 20 45 67 57 32 16 13 11 24 21 14

LTTS IN L&T Technology 11 10 15 13.8 12.1 4 3.5 3 11 9.7 8.4

DLPL IN Dr Lal Pathlabs# 10 17 51 77 38 11 10 9 29 38 21

AVNT IN Avanti Feeds 12 17 16 13.5 11.5 4 3.1 2.6 10 8.8 7.6

HWA IN Honeywell Auto 11 17 48 41.9 35.3 11 9.4 7.2 36 30.1 27.1

ABFRL IN Aditya Bir. Fas. # 12 89 545 51 21 7 7 5 21 18 11

I IN L & T Infotech 12 12 17 15.3 13.4 4 3.9 3.4 12 10.6 9.4

WHIRL IN Whirlpool India 12 15 45 40.2 33.8 9 7.7 6.4 29 26.1 22.8

PVRL IN PVR# 19 37 (53) 109 14 3 3 3 14 12 7

VOLT IN Voltas 11 15 30 27.3 22.3 4 3.4 3.1 22 20.6 17.1

HUVR IN Hind. Unilever 13 16 71 60.4 52.5 60 27.5 28 49 41.5 36.3

IGL IN Indraprastha Gas# 6 11 28 36 32 7 6 6 22 24 20

BOOT IN Abbott India 12 18 55 46.4 39.5 14 11.8 9.4 41 34.9 30.5

NITEC IN NIIT Tech. 11 15 16 14 12.1 3 2.8 2.5 9 7.8 6.8

Impact of Covid-19 on our Ten Bagger portfolio

Jubilant will be the biggest beneficiary of current NONE

Analyst comments on business for the next 12

Recap of construction of our Ten Bagger portfolio

Forensic accounting framework

Ambuja Cement BUY

Particulars (Rs mn unless New estimates Change (%)

(x) Rs/t 1-yr fwd EV/tonne

Balance sheet (Rs mn)

Cash flow Statement (Rs mn)

IndusInd Bank SELL

Deposit/Loan growth under pressure, NIMs improve

Declining fee income growth Ajit Kumar, CFA

Where do we go from here?

Institutional Equities Team

Ambuja Cements Ltd (ACEM IN, BUY)

Source: Bloomberg, Ambit Capital research

IndusInd Bank Ltd (IIB IN, SELL)

IndusInd Bank Ltd

Source: Bloomberg, Ambit Capital research

Explanation of Investment Rating

Ownership & Material Conflicts of Interest:

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