INDIA'S NO.1 INVESTMENT MAG AZINE SINCE 1986 DALAL STREET UE DEMOCRATIZING Te CREATION sisin 120 eT aCe Attractive Despite be Fe (eta t zeny ~ Sarees Alo 1000 Companies usa ea) ores Analysis Pere ae i ac) ul35€ INVESTING IS ALL ABOUT PLAYING ALONG INNINGS. ‘Stay invested for the ong term, to make the most of your investments. INVEST RIGHT \ssueo mm punuic wrrencst ay THe wseimvesrons:prorecvonruxe TOH FUTURE BRIGHT‘NTS ' ttractive hallenges tecommendations LZ 13 Low Priced Scrip Hot Chips Laurus Labs Limited In A Healthy Space Regulars 06 Editor’s Keyboard 07 Company Index 08 Market View 14 Technicals 116 Query Board 120 Reviews 121 Kerbside ‘Communication Feature sections are advertorials provided by the company & carried on “as is” basis. {ET JOURNAL sinFOREX SERVICES sFormcarency demand cat OTHER SERVICES Banking on Relationship forever ‘www dhanbankGetting Over the Hiccups ith the current situation’s uncertainty mostly factored in, markets are Wisin itdifficult to retrace any part of the post March rally In spite ofthe virus cases continuing to rise globally, most countries now appear to be well-prepared to handle the crisis. A majority have raised their health infrastructure, thereby alleviating the panic thet existed couple of months back. This is leading to bolder opening of economies with few ‘on and off” hiccups. Alongside, news about the development of a vaccine appears to be promising, providing fodder to the bulls. Ifthe record stimulus package announced so far globally was not enough to cheer fovetoe eb mt Incline wth US porte’ wecingon chugs stimulus in the course ofthis week. Internationally, the FAANG (Facebook, Apple, Amazon, Netflix and Google) stocks have dominated 2020. Back home, Reliance Industries Limited (RIL) mimicked the performance of FANG stocks and dominated the Indian bourses. In our cover story we have discussed how the markets have done so far in 2020 and which sectorsare expected to do well. We have explained why in spite of the challenging environment, equity will still emerge victorious. An interesting point to note is that despite 2020 being one of the worst hit years, it has had more than 1,400 stocks hitting their 52-week highs so far. Several stocks have doubled on YTD basis. ‘This suggests that recovery is taking place even though many would argue that any recovery on ground is invisible. Do go through our cover story and mail us your feedback. “This isue isa special edition as we bring you the “Top 1,000" companies by market capitalisation. The lst should come handy for long-term investors such as yourself in identifying the potential inclusions to your portfolio. Along withthe list you will find sectoral reports and data of at least 24 sectors. The trends in profitability, net sales and net profit margins is analysed and presented in a crisp format for the readers to digest the information and take appropriate investment decisions. | am sure you will enjoy reading this very exclusive issue. Going ahead, the market rally may get narrow and hence investors will have to adopt a bottom-up approach to identify lucrative stocks. Include only quality stocks with higher safety net. For the moment one may sacrifice growth and focus on sustainability and hence strong belance-sheet stocks with comfortable cash flows situation should be more desirable than flashy super-growing stocks with ed balance-sheets and uncertain cash flows. Invest in a diversified manner and towards a mix of high beta and defensive stocks in the portfolio because the market rally does not appear to be waning, It has taken a breather. Buying on dipsis highly recommended. a RAJESH V PADODE Managing Director & Editor 6 DALALSTREET INVESTMENT JOURNAL | AUG. stainVol 35.No. 18+ 2 Founder empha LeteVB Pade Vpeiioie ManagingDiretor Edit Subciption&Casomer Service uj Pabte (ant Smale Dept tors Cupane and tata Aut ‘eet apr ‘eon Ma Schon Sgh aT Copy tos Fad Khan AVP ‘sedkia Pay Mayank Dit - AVP Dig aed Corns : Recah ‘rl Chine Manger ae owen bane Apu Lakes Shaema Se Manager posters Nihon oie Doman ape Prk Shas Hemant Vira age Jo Din DSI) Private Limited enter Momentum-Based Trading Strategies | found coverage on momentum trading strategies in the previous issue to be highly informative for retail investors like me. I would like to know what {s the typical timeframe for trade if one uses momentum. based strategies? ~ Gagan Valimbe Editor Responds: Thank you jor writing tous. Momentum trading strategies are usually focused on short-term market movements, but the duration of te trade can depend on how long the trend maintains its strength. Typically, the ‘more volatile the market, the more advarage a momentum trader cas take of short-term rises and falls in an asset’ value. Momentum: trading can be suitable Jor traders who employ longer-term styles suc as position trading, as well as ‘thase who prefer short-term styles, such as day trading and scalping. We hope this helps! Do keep writing tous with your queries. Recommendations Q Forcustomer Service Maral Ofice 419-4. ath Foor Arun Chambers, Tadeo, Netto AC Market ‘Mambet-400034 022-434 76012/1617 Pane Ofc (©1055 Flos, Thad Ceer North Main Road, Near Aus Bank, ‘Oppose ane na 6 Koregacn Prk, Pane 11001 ‘B oxo 1072500 Dai © 907679278 ‘Printer and Pblicer: iin Sevan. Rr Reh V Pde for DS) Pt 1d on behalf of Achievements Marchandie Prt 4 red st MOSS Prine Pre. Ld. 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While all efit are made o cnvue tat he ‘ent publ icone al upto ate Daal eet Lene Inurl hole no respons for any crore Ha eaghtocrurAll ator cantina erin bed on undamantaland th alps ‘hdc howe methods whch though rable arent ini, The eel erates eerie aie ener (sheeltocobullapetsbetre hig any sven sas al Dll ‘Se osm ods esponsbty fr any oes that sy te de lnvesumcnt devine radeon the us of inet given ma the agai No reodacton ws pertednwhee orpar Wh ‘een! fom Dalal Set Journal @ All dupes ape naj 1 the ‘Schoo jarkdiion of cempetnt court and arn in Mamba oy Dal Set essen Jura e member of TNSABCs Adan cas * By 15610 Low Priced Scip 12 Aster OM Heatare ° By 13635 ertside nt Bai Becticals * By 43780 Hot Chips B (aon PointLaboratis By 38435 Kerbside m1 {achin shipyard by 32350 etnias 5 Fre etl Hid 10035 Queybord 119 a * By 9400 QueryBrard 119 Hvels nis * sal 57625 Tectials 5 am = tie 19625 Reviews 10 Kajra Cras * By 47380 Hot Chips B KireskrBroters ° by 1136 fertside ma Laws Labs = tid 76400 sis 6 PrINOUSTIES ° by 177805 Cheep 0 rcindia = Ho 487 Qveybrard 116 fall vik Wig = tie 1920 Queyord = 118 seelifrsrctreFinance = ‘Hod 7A Queyfoard 118 Tatas * by 57265 Kerbside m Torrent Power = tid 31725 evens 10 United Dring Tos * by 13050 Queybord 116 BP 200% Profit» BPP - cok Portal Profits BL - Bo stsia 20 | DALAL STREET INVESTMENT JOURNAL 7ver the last few weeks the markets have remained ‘volatile as the world ‘economy tries to get back to normalcy despite rise in COVID-19 cases. Also, fears existed in the minds of investors as tensions between US-China rose. During the week. domestic markets ‘witnessed bull sessions as lockdown was ‘eased. Sensex and Nifty rose by 6.83 per cent and 6.54 per cent respectively. SmallCap and MidCap index gained by 1.99 per cent and 2.95 per cent respectively. Amongst sectoral indices, IT index zoomed by 15.90 per cent during the fortnight as the impact of COVID-19 ‘was less than expected and most of the ‘companies have strong project orders to beable to sustain through the current challenging situation. Following Auto index, ‘Metal index, Bankex and Power index inched up higher by 7.25 per cent, 4.47 per cent, 3.47 per cent and 2.50 percent, respectively FMCG and Healthcare indices reported a relatively lower growth of 0.20 per cent and 1.86 per cent respectively. Realty index:is the only index to end the fortnight in negative down by 0.70 percent ‘On the global front, global indices ‘underperformed compared to domestic indices asin the American indices such as DJIA and NASDAQ declined by 0.99 per cent and 0.82 per cent respectively while S&P 500 registered a mere gain of 0.65 -rcent. Amongst European indices, FISE 100and CAC 40 fell by 0.82 per scent and 1.57 per cent respectively ‘whereas DAX rose by 1.09 per cent. As data from China showed a positive sowth trend post the pandemic, investors feared that the government might soon tighten its eased out financial Market Watch Mixed Data Keeps Investors Guessing! environment, thus further adding to the belief that there may not be more bull runs in the respective market. As a result Shanghai index tanked by 5.47 per cent while Hong Kong’ Hang Seng index ‘which is dominated by Chinese stocks also witnessed a decline by 2.77 per cent during the fortnight. Japan's Nikkei index gained by 0:31 per cent Looking atthe trading data, Flls were net buyers to the tune of 29,4284 crore while Dils were net sellers to the tune of ¥907687 crove in the last few weeks Gold prices have been on a run globally, with the prices in India hitting a new high. The yellow metal surged by almost 6.78 per cent to%54,300 for l0gof 24-carat gold in the lat few weeks and it is up by 7.19 per cent since the beginning of this month. errs el ee end ar mK BOISE ys HSS wie Ko wie ia ho Swe mer 30K Se mG ey musta fete 1S) TS ' ut mE ee eee) me Kk my as aT ‘The Brent crude ol in the last couple of weeks was up by 2.75 per cent to USD 41.40. Since the beginning of the month Brent crude oil has gone up by 3.6 per cent. Oil demand has improved from the deep trough of the second quarter, although the recovery path is uneven as the resumption of lockdowns in the United States and other parts of the world has capped consumption. masa | BoM eaeY Pee Deen Ma nS oe yt ie te oo eA mem imme x kee ms in we om ‘eam ee tie ea oes ue num = M1138 nam 164779 m8 mum | MN 15 mum | eRB ma rsa S9157 337 Maan 3407 $87 ‘wal gana 907587 psuinNURTURING BRANDS ‘CO No.LisHaneeTPLceterst “AMBULATONER? Opp Scdbu Brava, Sadhu Bhavan Road, Boda, Ta Ahmedabec «88058 (jrt ka htoGambefagroup.com Webete ww anbujagrup com v GUJARAT AMBUJA EXPORTS LIMITED Well diversified and yet focusedacl Recommendations} PLINDUSTRIES ADAPTING AN INVIGORATING aa | Industries currently operates, Jin the domestic agricultural inputsand custom synthesis and contract manufacturing (CSM) segments. tis leading player in the domestic agricultural inputs sector, primarily dealing in agrochemicals and plant nutrients. In the CSM. its business interests include dealing in custom synthesis and contract ‘manufacturing of chemicals. This constitutes techno-commercial evaluation of chemical processes, process development, lab and pilot scale-up as well as commercial production. Considering that manufacturing of crop protection products hasbeen exempted from lockdown, the company will see revenue and healthy numbers even in Fv2L In December 2019, PL industries completed the acquisition of Isagro (Asia) ‘Agrochemicals Private Limited. The acquisition provides Pl access to additional manufacturing capacities to ‘meet growing demand and also strengthen its position in the domestic ‘market by leveraging complementary product portfolio and distribution channel of JAPL. PI Industries is aso expected to benefit from synergy benefits oes 1 YEAR INVESTMENT HORIZON eae 2 Ce) mms omin we BK wm KM aut of adjacent manufacturing site while de-risking the supply chain of afew products. Going ahead this acquisition will add to the top-line. ‘The CSM export segment provides healthy revenue and stable profitability. PL Group is one ofthe pioneers of CSM in the agrochemical space in India. Ithas builta strong reputation based on its sound research capabilites. The clientele includes some ofthe largest agrochemical innovator companies in the world. The Equity ‘group hes invested significantly in ‘enhancing manufacturing capacities over the past five years. ‘With the growth in population in India, there isa rise in production of erops. which in turn enhances demand for agrochemicals. The company has shown ‘good growth in sales, PBITD and PAT in the ast three years. Gross sales have increased by 20.76 per cent CAGR from FY18to FY20, PBITD and PAT also saw a ‘growth of 20.59 per cent and 11.35 per ‘cent inthis period. Thus the company has posted noteworthy past performance and ‘growth visibility due to acquisition and a growing market For the quarter ended March 2020, the ‘company’s gross sales increased 6.26 per ‘ent to 8855.20 crore in Q4FY20 from 2804.80 crore in QUFY1S. Total expenditure for QaFY20 stood at 2668.90 crore 2s against 8681.30 crore in QUFY19, showing an increase of 5.96 per cent PBIDTE excluding other income, showed an increase of 738 per cent to 186,30 crore in QUEY20 from?173.50 ‘crore in the same quarter lst year. PBIDT ‘margin, excluding other income, for QUFY20 stood at 21.78 per cent as against 21.56 percent in the same quarter last year PAT for Q4FY20 stood at 2109.90 crore as against 2125.70 crore inthe same quarter ist year showinga decease of 1257 per cent. PAT margin for Q4FY20 stood at 12.85 per cent as against 15.62 per cent in the same quarter last year. The stock is tradingat a PE multiple of $8x. ROCE for FY20 stood at 25.10 percent. The ‘company has shown increase in sles and profit over the last three yeas along with ‘consistent margin (PBIDTM and PATM).. By virtue ofthese factors, we recommend ‘our reader-investors to BUY this tock, Shareholding Pattern oe roe —— ter ae lc S216 Orting ft 10 DALALSTREET INVESTMENT JOURNAL | m0 nao pstin&) TradeAnywheve End to End Online Trading Solutions for Indian Capital Market NSE has decided to discontinue Market Alert! New) trading platform so what next? Dion is offering multiple frontend cutting edge technology solutions which caters entire transaction life cycle of financial services and online trading business! For Cost Effective and High End Trading Solutions Please Contact Us! Vera PCr erie www.dionglobal.com connect@dionglobal.com 91204149672, 97118 67505ADANIGAS INTHE RIGHT SPACE AT T dani Gas Limited is engaged in developing city gas distribution (CGD) networks to supply piped natural gas (PNG) to the industrial, commercial, domestic (residential) segments and compressed natural gas (CNG) to the transport sector. The company has already set up city gas distribution networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana and Khurja in Uttar Pradesh. Atpresent, natural gas accounts for just about 6 percent inthe total energy mix of the country due to its low per capita consumption. The government is aiming to increase this share and wants to take it to 15 per cent by 2030. Even without increase in total energy consumption asa nation, this can translate into 150 per cent increase in revenue for natural gas players. Moreover, with favourable government policies and reforms, the per Capita consumption of natural gas is expected to also rise, Simultaneously, the population of India is expected to grow to 1.4 billion by 2024, thereby aiding increased demand for energy. Hence, the demand side will be strong, There is a oes ea ad 12 DDALALSTREET INVESTMENT JOURNAL | 5 Recommendations HE RIGHT TIME vetttaten 1 +9 6/1 2 set oa LOW PRICED SCRIP 1 YEAR INVESTMENT HORIZON ese m4 Niralfet 6130 7800 302 deta «SSD MATa dmatioed TS $675 SALSA Wt = 00 0) 2 Annet OO HOD 181267 growing preference for natural gas for its convenience, safety and cost-effective properties. ‘The infusion by TOTAL Group for 37.4 percent equity stake in AGL is the largest foreign direct investment in India city gas distribution sector. This investment aims at strengthening infrastructure across the supply chain. It will also result in access to global expertise and supply network, which will help in better gas sourcing, Investment by TOTAL Group helps give the growth story of Indi natural gas company a kind of validation, Peery eed Toa mame Promotes OTE) eatpaac hic 5m Osan Pte ‘aia Ines ‘ er Cm .. Equity ‘Thecity gas distribution business is stillan untapped market with alot of potential to grow. This makes it a unique space with good growth prospects and at profitable level with good ROCE and. profit margins, as can be seen from the past three years’ performance. For the quarter ended March 2020, the ‘company’s gross sales decreased by 0.78, per cent to 490.32 crore in Q4FY20 from $494.17 crore in Q4FY19. Total expenditure for QAFY20 stood at 322.37 crore as against 2354.58 crore in QUFYI9, showing a decrease of 9.08 per cent. Thereby, PBIDT, excluding other income, showed an increase of 20,32 per cent to 8167.95 crore in Q4FY20 from 139.59 crore in the same quarter last yeat. PBIDT margin, excluding other income, for Q4FY20 stood at 34.25 per cent as against 28.25 per cent in the same quarter last year. PAT for Q4FY20 stood at €122.07 crore as against 75.68 crore in the same ‘quarter last year, showing a significant increase of 61.3 per cent. PAT margin for Q4FY20 stood at 24.90 per cent as. against 15.31 per cent in the same {quarter last year. The stock is trading at a PE multiple of 36x. ROCE for FY20 stood at 36.54 per cent whereas the RONW ior the same period stood at 33.91 per cent. The company has shown increase in sales and profit over the last three years along with margin improvements (PBIDTM and PATM). By virtue of these factors, we recommend our reader-investors to BUY this stock a eee i877 93 8417 ins et nt Oe TH MM 59 SL ns 398 HB UM MD mo 1 me mM se 1958 198 198 eH stainThe scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations. (Ching price af uly 28 209) stsia BAJAJ ELECTRICALS CMP - 8437.80 BSE CODE Volume Face Value ‘Target ‘Stoploss 500031 70,069 2 2475405 (CLS) aja) Electricals is engaged in engineering and projects, power distribution, illumination and consumer durables businesses. On a consolidated quarterly front, the company reported net sales of 81,293.27 crore in QAFY20, down by 26.55 per cent from $1,760.83 crore in the same quarter for the previous fiscal year. Operating profit declined by 40.47 per cent from 291.12 «crore in QUFY19 to%54.24 crore in QUFY20. The company reported a net loss (oF 80.12 crore in Q4FY20 against a net profit of &24.98 crore in Q4FYI9. There has been an improvement in balance sheet position with leverage rato reducing from Loxin FY19 to 0.6xin FY20. This reduction in debt will lad to a significant decline in interest outgo going forward. ‘Companies with a strong balance sheet position like Bajaj Electricals are likely to recover faster post lockdown. Thus, we BSE CODE 500233 Volume | Face Value 25,241 Est (No. of Shares) = and aaa 2518 2am an 2a) 1a haa sats athe ss 2h 9s Bhdame 2241 |AUGO3- 16, 2020 | DALALSTREET INVESTMENT JOURNAL enor n ety (No. of Shares) 2 hy. 200 708 21 oy 200 Ix) jay 20 rs By 3a ee ny 300 08 Pay 100 vaca hy 200 70 recommend a BUY on this crip. (CMP - 2423.80 Target ‘Stoploss 2455 395(CLS) Ceramics Limited isa tile ‘company engaged in the manufac- and of ceramics, Polished and glazed vitrited es and offers products, including ceramic wall and floor tiles, polished vitrified tiles, glazed vitrified tiles, and sanitary ware and faucets. On the consolidated financial front, the net sales for QUFY20 declined by 20.03 percent 10 2652.04 crore from 815.31 crore reported. for Q4FY19, PBDT for QSFY20 contracted by 23.57 per cent to be £95.36 crore compared to 2124.77 crore for Q4FY19, The company gained a net profit of 48.82 crore for Q4FY20, decreasing by 26:98 per cent ‘when compared to the net profit of %66.86 crore gained in Q4FY19. Despitea challeng- ing year, Kajaria Ceramics is expected to benefit from its leadership position in the industry and strong execution capabilities. ‘Additionally, the company also has a healthy cash balance aiding its long-term ag prospects Hence, we recommenda p a 13Technicals | NIFTY Index Chart Analysis REMAIN WITH THE TREND he bull on D-Street seems ‘unstoppable as Nifty extended its northward journey forthe sixth successive week, making it thelongest winning streak post April 2019, Further, every critical resistance is bbeing dispatched to the casualty ist and thelist continues to grow as Nifty has ‘managed to overcome the bearish gap (11,035-11,244) of March 6. This buoyant move can be accredited to the news on COVID-19 vaccines and treatments and ‘on the domestic front, a pleasant surprise ess ity Levels ‘Action tobe tated Probab Targets ‘rading ae 1 00 ova wey sg bs Assure treme 113771140 parte ene nonenm ee i, Rett) ‘dese ton 1.200 ne eet ca woud Sisoatrtenetumiem 1120011210 BREN mbm wey oe 1080 ‘with Fils turning net buyers to the tune ‘of ®3,594.15 crore month till date, while for the same period Dils have been net sellers to the tune of €9,557.75 crore. The ‘worry for the markets would beon the domestic flows front as they have been ‘consistently in the negative zone for some time now. The Nifty has retraced © | almost 78 per cent of = | the down move which started from January and aso it has gained ‘almost 50 percent from the March lows. Let’ revisit history and check how the ‘current V-shaped recovery has fared in ‘comparison with the ast FE = | We have categorized from the earning season as the corporate carnings havent been as bed as analysts expected. In fat, the earnings season has added some visibility that was missing. ‘Meanwhile, the Bank Nifty has been quite volatile over the concern that banks are likely to face the brunt post the end of the EMI moratorium period, However, itis also finding its mojo and is seen prepared for a big move. After spending nearly five trading sessions in the consolation range ‘of 11,058-11,240, finally on Tuesday Nifty broke its shackle and ascended higher to «lose atthe 11,300 mark for the first time ever since March 3. The bull once again displayed strength and every opportunity presented in the form of shallow dips has been bought. ‘The institutional participants are tepid 14, DALALSTREET INVESTMENT JOURNAL | 5 severe falls where the index has corrected over 35 per cent from the top and there are total four instances when these criteria have been ‘met. With the fourth being the recent ‘COVID-19 pandemic fall, the other three have been from the past. Following are the details in the year 1992 and 2000 when we saw a severe fall of 53 per erence on ue to the ongoit Virus anemic 7s ‘While there cannot be divergent views ‘on the impact ofthe pandemic globally, itisalso evident thatthe financial sector fn general has taken a huge beating. With the lockdown continuing and economic activities coming toa halt, bank earnings are directly impacted. With ‘manufacturing, SME and retail business, ‘except the essential consumable items, ‘non-functioning for quite a few months ina row the impact on GDP is likely to be severe. Hopefully, economic activities ‘may resume over a period of 6-9 months ‘which will possibly improve the asset quality too, Due to the virus pandemic, there isa sharp decline in the purchasing power of iouseholds where discretionary spending has reduced to half. ‘Banks, in particular, may facea ‘mammoth task to protect their lending book and will have to resort toadequate ‘measures. The RBI has offered ‘moratorium to ll borrowers asa relief yet repayment of overdue amounts will put pressure on borrowers who are already reeling under a severe financial crunch, With the present crisis bringing GDP growth toa negative region, the levels of NPAs are likely to move northwards. As for our bank, though we are expecting some deterioration ina few ‘SME accounts, no major impact in asset quality is expected on account of the pandemic. We continue to maintain a Conservative approach on large-value advances and are also keeping a healthy provision coverage ratio to immune ‘ourselves. ‘What percentage of your borrowers has availed of the EMI deferment facility? ‘Moratorium on loan repayment facility 20 announced by the RBIs o the tune of 30 per cent of the loan portfolio of our bank which is in line with the industry average. ‘What isthe bank’s position when it comes to liquidity? ‘The ascet lability management (ALM) of Dhanlaxmi Bank is comfortable with no negative cumulative mismatches in any ‘of the time buckets and has quite ‘comfortable liquidity coverage ratio (LCR) as of June 30, 2020 against tory requirement. Moreover, the bank has liquidity backup in the form of ‘excess SLR investments. In addition, the term deposit rollover rate of above 80 per cent and core savings deposits of above 85 per cent provide additional liquidity ‘comfort, We are, on the contrary, Increasing our lending to agriculture and MEI segments and providing gold loans. Investors at this point are risk-averse and fear a spike in NPAs for the financials. }ow would you address ‘The apprehension of a spike in NPAS stems from the foreboding over what will happen tothe financial sector once the six months’ moratorium on repayment of loans ends by August 2020. When the time to resume repayment comes, there are likely to be some defaults by borrowers, which may cause sharp rise in NPA levels. Our bank has proactively done some spadework and we do not foresee an unexpected spike in NPAs as faras we are concerned, Our bank will be able to curtal the fresh NPAs with suitable rehabilitation and recovery strategies in accounts that need special care or attention. We have beefed up the monitoring mechanism at all levels to censure our asset quality remains unaffected Meanwhile, green shoots in the form of ‘opening of economic activities gradually across India and the likelihood of ‘vaccine reaching the market soon will surely help bring things back to normal ‘The bright spot in this otherwise bleak scenario isan upbeat rural India. A good. start to the monsoon season has encouraged sowing, thereby holding the promise ofa good kharif crop. The ‘government has announced several key reform measures forthe agricultural sector which have improved sentiments across the entire agricultural supply chain. ‘Domestic tractor sales growth isa chief [proxy to gauge the health of rural ‘economy which shall bolster the revival endeavours. ‘What are the growth chall faced bby your bank going forwa ‘With sentiments improving across India, ‘we shall continue to focus on social impact banking with lending focused on rural, microfinance, agricultureand ‘SMEs to create liquidity and then sustainable businesses. Largely concentrated in the southern part of the country, our hank shall continue to ‘explore growth potential with focus on ‘merging business opportunities. We are ‘ofthe belie that every crisis brings along ‘unprecedented opportunities. Therefore, ‘with small base, we shall beable to move swifily and capture the potential. Retail penetration through gold loans and hhousing, business loans will add substantially to our growth. A technology-based risk model shal fuel ‘our aspirations and help mitigate the risk. ‘Do you have any plan to expand the barkbranch network in the future? ‘Wedb foresee an opportunity to expand ‘our businesses in South India fist and shall be exploring the possibility of creating new footprints in afew prosperous urban pockets across other gions. sMs. Apurva Purohit Presiden, agran Prakashan Limited mn wellok at how the year 19-20 panned out, Covid andi shoxk is ike to overshadow everything that happened hitherto; however the fact remains that for the entre year, a weak macro-economic environment continued to impact consumption in India. This directly caused advertisers to lower or withhold ‘marketing spends. And of cours, the situation got hugely ageravated with the sudden lockdown announced by the Government of India when the economy ‘came wo a screeching halt in March 2020 ‘Advertisers had already started canceling ‘ongoing ad campaigns from the middle of March and as weal are aware, continue to remain off grid with most agencies and offices still closed down, especially in the ‘two largest advertising markets ~ Mumbai and Dei, Asthe opening and closing of cities continues well into Jul. the impact on the economy is not only going tobe huge Dut also sustained over alonger period. Increasingly pundits and forecasters are already delaying their expectation ofan ‘economic bounce back from March 21 to the middle of FY 22. ‘Atan organization level, the businesses that ‘will survive and prosper are those who have consciously been watching their bottom Tines, have believed that cash isking and have been judicious in cost management Whilea crisis is often an opportunity to bstsin (@e)annlelaesiaeya) Feature A Journey Of Resurgence tighten our purse sings forcing us to improve efficiency and productivity which ‘may have got compromised during the days of plenty, this pruning and tightening helps only ifthe businesses are able to tide over the crisis Since no crisis comes witha ‘or allows usa practice session, the better approach Ihave always strongly believed, is to be consistently prudent and ‘margin focused rather than topline driven alone. ‘Therefore, the leaning here would be to concentrate on margin and cash low and not look at buying marketshare or doing expensive customer acquisition but focus ‘more on customer engagement and retention and thus consistent bottom line at all points in time ~both ina benign as well asa dificult economic environment. AtMBL, this philosophy of being discret is ‘ot something that is new to us. As far back as 2015-16 when ll FM players were given ‘one more opportunity to expand their foot print by bidding for new radio stations, “MBL chose to be extremely selective and «expanded by acquiring stations which could give usa geographical advantage at efficient bid prices. Most of our competitors however chose to increase depth of coverage by Duyingextremely expensive frequencies in the same metros where they already had one frequency. Asa consequence, the impact on for them hasbeen significantly negative and continues tobe erosive, whereas this prudent strategy helped MBL actually 2018-19 by 673 basis point. Today MBL has the best in clas profit and margins as compared to allit national peers. Inthe year 19-20, MBLS revenue was 22478 Crores with an EBITDA of 266.6 crores excluding one-time charges of ®9.5 crore made on account of Covid impact. To ‘minimize the financial impact of Covid, we «continued with our cost rationalization initiatives which have resulted in total cost saving of 30.2 cores on an annual basis thus far ‘tide over the current crisis the radio industry association has requested the Government to waive of regulatory ‘payments including license fee for the entire ‘year, clear overdue payments by various Government agencies, which have significantly added to our net outstandings, and restore advertising to earlier levels hich accounted for 12% of the FM Industry revenue. ‘On the balance sheet front, we have been able to reduce our non-government ‘outstanding from 114 daysas on March 31, 2019 to 109 days ason March 31,2020 Daring the quarter, we have repaid 69.24 ‘crores comprising NCDs and other borrowing, Fost the repayment, our balance sheet is debt-free and we havea strong cash reserve of 220 Crores which will larly go allong way in helping us weather out the ‘current testing times to emerge even stronger than earlier Recently the Association of Radio Operators for India (ARO commissioned an independent survey toundersiand the impact on media consumption during COVID-19 lockdown which I would like to share with you. ‘© Radio listenership has increased from 48 milion to reach 51 million, second only to TV's reach of 6 million a= Average time spent listening toradio grew 30 minutes or 239% from 2 hours and 7 minutes to 2 hours and 36 minutes = Time pent on radio has increased in all SEC segments = Total daily hoursof radio consumption are at 131 million, up from 102 million 1= Theresearch showed that radio is considered asone of the most reliable sources of information and the mode oflistening is mostly on the mobile ‘The road to revivals going tobe hard for the world and for every business but if we stay focussed and keep working at strengthening our relationships with all our stakeholders-our customers, our clients, our ‘employees, and our investors, Lam sure we will emerge from these dificult times with ‘our businesses finely honed and stronger. gy AUSOD 16,2020 | BALALSTREETINVESTMENT JOURNAL — 21Fennec Feature Company Has Plans To Increase its Revenue/turnover from 799 (Pat 52.5 CR) to 1500 Cr (Pat 120 Cr) in Next 3 Years ‘What were the logistic challenges that the company had to overcome to remain operational during the lockdown? For essential commoxiities operation of trucks, road and rail transport was resumed after about 15 days of lockdown, so the supply mainly happened in the International market ‘uninterrupted, ‘What has been the impact on the export of Basmati Rice taking into consideration that shipments to countries such as tran and Saudi Arabia, large buyers of India Basmati rice, have been affected? The company is not exporting to Iran for the last 07 years due to ever increase inthe sanctions, The exports to Saudi Arabia and other parts of the world remained normal and even higher {in some regions due to panic buying during Covid 22 DALALSTREET NVESTMENT JOURNAL - Sankesh Setia Director, Chaman Lal Setia Exports Ltd ‘With further relaxations anticipated by the central and state governments, are improvements expected in the operational performance in the quarters ahead? The rice is a GST free product, except branded sales in India, Now the central government, by the President of India order made entire India a single market for the farmers and for the rice industry. Market fees/ Mandi samiti of 4% has been brought down to zero. this development augurs well for us, We expect good. business in the times to come. ‘What plans do the company have in store for the future? ‘Company has plans to sell Maharani brand on several online portals like Amazon, Big basket and so on. Itsalways the endeavor of the company to promote the business in every region, India or abroad stain|our research-backed recommendations have been our greatest strength Cover the past so many years. infact, helping investors book profits has U l a fac e |been the very essence of our existence. Here isa detailed guide on the | recommendations readers to get a quick insight on what to do next. LOW PRICED SCRIP RECOMMENDATIONS UPDATE FOR THE LAST ONE YEAR cl ore Lieu) aire Exit toa Po gol! ie A (%) Novs,2018 Trident ad. 6 | Decl6,2019 835 Nov 22,2018 | Oricon Enterprises Lid 3225 Nor22,2019 1820 4357 Dec06,2018 Jain Irgation Systems Lid 65 julo4.2019 2720 “127 ec 20,2018 Flatex India Ld. 62.00 Jun22,2020 2800 4.88 Ja03,2019 Prism johnson Ld 805 Apeig,2019 $870 nauo Jan 17,2019 BC Power Contos Ltd 3650 Jan 24,2019 280 1599 Jan 31,2019 Jay Shree Tea Industries Led 7670 Ape30,2020 384s 4987 Feb 14,2019 Jammu & Kashmir Bank Lid. 3840 Mar06, 2019 41985 2982 Feb 28,2019 Prakash Industrie Lad 9125 645 Mar 14.2019 | Masic Broadcast i 48.49 66.96 Mar 28,2019 Federal Bank Lid $0.80 Juno4,2019 10920 20.28 ‘Apr 11,2019 Indiabulls RealEstate Lid. sas 13,2000 4500 2 ‘Apr 25,2019 ‘Tata Power Company Lid 75 am May 09,2019 South Indian Bank Ltd. 1545 53.40 May 23,2019 Aaya Bila Capital ad 95.5 3815 Jun 06,2019 National Aluminium Company Lid 5025 “3373 Jun20,2019 ET Foods Ld. 24.00. Sep1,2019 us7 Jal04,2019 Granules India Lad 950 0424,2019 11435 97 Jul 18,2019 Bharat Heavy Electrical Lad uss Eo 1292 ‘Aug01, 2019 _ India Cements Lad. 8785 Feb26,2020 wor ‘Aug 14,2019 SIVN Lid. 24.40 aa) 9.02 ‘Aug29, 2019 Housing and Urban Development Corporation Li 3695 Nov4,2019 aun Sep 12,2019 NHPCLid 2430 Jan20,2000 ae 1938 Sep 26,2019 alma Bhart Sagar and Industries Le 9065 Jano1, 2020 11335 2508 ct 10,2019 Prism Johnson Led 7750 407 Oct 24,2019 Welspun Enterprises Lud as 3.68 Nov67.2019 Gujrat Pipsnaw Port Ld 8840 882 Nov 21,2019 | Hindustan Oil Exploration Company Lid sas 25.80 Dects,2019 | Himadr Spectalty Chemical I. 6195 2055 Dec 19,2019 Jamin Aso Industries Ld 4045 538 Jan 02,2020 _| Housing and Urban Development Corporation Lid. a0 245 Jan 16,2020 Birlasoft Ltd. 73.05 Feb 03, 2020 22.25 Jan 30,2020 Rall Vikas Nigam Lad 2850 32 Feb 13,2020 GAIT (india) Lu 13030 23.56 Feb 27,2020 JK Paper Lx 121485 “1817 ‘Mar 12,2020 _R Systems International Lid 90.00 Juno2, 2020 11220 Mar 26,2020 Fistsource Solutions id 2595 Apr 16,2020 3765 ‘Apr 09,2020 fythy Labs Lid. 10035 Jun24. 2020 120270 ‘4pr23,2020 | NMDC Ld a0 oe oo May 07,2020 Philips Carbon Black Lid 7350 Juni, 2020 3375 May 21,2020 | Newgen Software Technologies Lx 15075 jul22,2020 203.90 Jun03,2020 | Marksans Pharma Lid 2890 jun23,2020 37.0 Jun 18,2020 Hindalco Industries Lid 48.00 Jul 02,2020 Meghmani Organics Ltd. 52.65 Jul 16,2020 Star Cement Lid 85.00 pasta AGO}. 16.2020 DALALSTREETINVESTMENT JOURNAL 23o4 @ quity To Remain Attractive Despite Challenges Even as the corona virus shock dictates how global economies perform in the near and medium term, it is fundamentally reshaping the investment landscape for global investors. There are accelerating structural trends in inequality, globalisation, sustainability and macroeconomic policies triggered by the virus shock. Amidst heightened uncertainty, strategic asset allocation becomes the most crucial investment decision. Yogesh Supekar discusses the outlook for the equities with the help of industry experts while Anthony Fernandes highlights the YTD performance of various global indices and asset classes 24 OALALSTREETINVESTMENT JOURNAL | 4.50 stainhe Sensex is up by almost 46 per cent from its corona virus-pushed market lows in March, 2020. This sudden, sharp and smooth recovery has not only surprised market participants but has also Jed to some confusion in their minds, Usually stock markets are leading indicators of economic reality and stock prices often reflect the optimism seen in businesses in real terms. But the stark. contrast in stock prices and ground realities have pushed several ‘market commentators to conclude that there is less or no correlation between stock prices and the economic realities ~ atleast in the near term, ‘There is also a raging debate on whether the financial crisis of 2008 has done more ‘damage or whether the virus-led disruption has led to larger disruptions in the ‘market. The comparison, many believe, wll help us understand how and by when will the global economies start operating at full capacities. Taken at face value it does look like the initial pandemic contraction is larger than the great financial crisis (GFC). However, the manner in which the policy response has been executed and the ‘curmulative impact on the economy will likely be much les in the current crisis when ‘compared to the GFC situation. The strong policy response will cushion the blow ‘much better than it did during the financial crisis of 2008. ‘The US Federals attitude todo ‘whatever it takes'to bring normalcy in the markets has appeased investors globally In fact, the US Federal has used its full ange of tools and al times created new ones ina far shorter timeframe than in 2008. These policy actions have fuelled the current stunning record-breaking rally. As of now, the global nancial system is flush with liquidity and the dilemma faced by global institutional equity investors is whether to chase growth or value. Emerging markets (EMs) have always been looked at as ‘growth markets’ by the developed world. ‘What the virus crisis has done is given a generational shock to EMs. The long-standing pillars of EMs have been superlative growth, strong balance-sheets and fiscal discipline. All these three pillars are now challenged due to the ongoing crisis. Each. ‘country will be studied with a microscopic view and the country with Best fundamentals and fastest recovery from the current crisis may attract maximum investments. China, ince it restarted its economy fastest, has a clear advantage over its EM peers. India is struggling with its infection rate now being the fastest in the world. ‘Thus. if investors want to know ifthe recovery in the equity markets both global and locals sustainable the following signposts need to be tacked clos: How successfully the economies are restarting themselves while controlling the virus spread. What steps are being taken by policy makers to minimise the economic damage with stimulus packages to support industries. Whether there are any signs of permanent scarring of productive capacity. stsia auco3- 6 DALAL STREETINvESTMENT JOURNAL — 25Cover Story Long-Term Impact of Pandemic With the dynamics of business and economies changing itis expected that the fundamentals will be impacted for industries, across countries due to macro changes. Some ofthe expected long-term impacts across world economies include: Lower interest rates will prevail for much longer than. expected. Globalisation may reduce to unprecedented levels. Huge debt may get piled up, both by the government and, the corporates while the share of governments in respective economies may increase Low intlation exists right now but there is risk of higher inflation going forward, and in some ofthe economies there might be stagflation. This is situation where inflation increases with overall growth in the economy ‘being mated. Corporate profitability. one would argue, may increase duc to increased use of technology on account of lockdowns generating cost-savings and productivity improvements. However, slower economic growth, ‘inefficient capital allocation, higher taxes and labour Issues can be expected to impact the profitability negatively Market Outlook Rahul Sharma ver the last few days, Fllsareon Ja buying spree in the cash segment, especially ater crossing the 11,000 mark, which is either a sign of FOMO or pethaps they are eyeing something which we are not aware of. However, traders are advised tostay light on longs and stay close to the door ast seems like the party may end in the near future. Technically, Nifty faces multiple resistances around the 11,200 ~ 11,400 2one and ifthe support zone of 11,000-10:900 i breached this time it may attract a lot of shortin interes Gr the bear = — Indian Market Performance ‘With the kind of challenges faced by the markets and the economy one would have expected a very different kind of performance from equity markets. Instead, what we have are at least 45 stocks from the lst of 500 stocks that are BSE 500 ‘components doubling on YTD basis so far. Over 1,000 stocks across market capitalisation gained more than 50 per cent since ‘March 23 when the Sensex hit the bottom and as many as 318 stocks gained more than 100 per cent. Up to 715 stocks have hit fresh 52-week highs since March 23 and as many as 1,497 stocks have touched their respective 52-week highs in 2020 so far. In 2019, a total of 1621 stocks were seen making 52-week highs. This goes to show the momentum in stock prices in 2020 despite being faced by a deep crisis, ‘The highlight of the 2020 market so far has been the retail investors’ participation which is close to all-time highs, inching. close to the performance of the year 2000 when retail participation was at its peak. Flis and Dis were net sellers ‘while retail participation was on the rise since March 2020. Also, the performance of penny stocks took many by surprise ‘with several of them proving to be multibaggers. This goes to show that the risk appetite ofthe investors has increased across Associate Director and Head (Technical and Derivatives Research), JM Financial Services Ltd. \ ye | ut siimdntac bifve: = “Major long.term support levels are seen at 10,350 and 9,800. A correction from here, fit happens, will only make the uptrend healthier. [Phistory has to rhyme with the 1987 crash and the recovery thereafter, we may see corrections getting bought into and eventually markets getting over this year’s crash, which may be triggered by the US’ elections or possibly a vaccine development. Volatility has been a hallmark of 2020 due to which it has been a trader’ paradise so far and we hope the rest of 2020 will be no less. . 26 DALALSTREETINVESTMENT JOURNAL | 4503-1 psuinViram Shah, ceo andco-ounce vested inane. CB iexiy ‘we are witnessing a new wave of Indian investors entering the global markets for the first time. Led by ‘young and aspirational investors who want to own global technology brands, indian investors are increasingly reserving 10-15 per cent of their portfolio allocation to international markets. Even during the lockdown quarter, deposits on our platform that allows Indians to invest in the US markets grew 50 per cent as compared to the January-March quarter. coo) the board over the past few months. thus eading to higher participation. “The liquidity-driven rally has pushed Indian markets further into ‘ich valuation’ territory. Says Vinod Nair, Head (Research), Geojit Financial Services: “In terms of valuation, they are ahead of fundamentals. In PE terms we are already above the pre-pandemic level. § & P 500 is at 22x on 12-month forward basis compared to 18x. And Nifty 50 one year forward PEs at 20.5x, which is higher than 18.5x before the onset of the pandemic. Itmay be high due to low actual earnings of FY20 398 431 “10 “363 “347 408) 1756 553 “168 “41 “Bs 361 “195 ars 1801 755 333 ns Zt 2006 27 2412 7569 20 706 a 1823 385, id 671 08 052 1360 8a a5, peste Nek 25° Sou 162 m8 and lack of growth in FY21. It isalso due to the performance of a few sets of stocks with high weightage. Stll,ona historical basis, we are in the bubble range in valuation and itis advisable to be cautious and place assets in safe categories and sectors” India in terms of valuation (PE) remains one of the most expensive markets in the world. With PE greater than 26 for Sensex. only Nasdaq and Brasilian Bovespa are the other indices trading at higher earnings multiple. The table below highlights Indias relative performance and the expected contraction in GDP as compared to other countries. 100) 060, 159, 130, a) 610, z an MF Wr amc tlk tre 2005 ke 225 ets 5 0f 2207 2020 Outlook on Small-Caps and Mid-Caps Rohan Patil, technical anayst, Bonanza Porto. From a technical point of view, the small-cap index is moving strongly on an absolute basis. In fact. the Nifty Small-Cap 100 price has moved above the previous week’ swing high decisively, which indicates arise in optimism. At the same time, ithas neglected its bearish ABCD pattern and this gives double confirmation that more upside is due in mid-cap. On a relative basis for the last seven weeks, itis consistently outperforming the border index (Nifty) and so one can definitely expect a continuation of further retracement of fall from the high of February 2020. In the case of mid-cap, the charts are indicating strength in the current move on an absolute basis. The stronger buying has pushed the Nifty ‘Mid-cap 100 index above 50 EMA and theres a bullish golden cross on.a smaller timeframe moving average. All this indicates a bullish outlook but on a relative basis itis not able to outperform the broader index. o 27 |AUGOS- 16,2020 DALALSTREET INVESTMENT JOURNALCover Story Commoxities have rallied in 2020 with bullion | markets doing the best on YTD basis so far On. YTD basis the following commodities Ct) ee age a Ce me TT beer Baers CLI OX Gald 1g 3043 Naive 3106 {cx Alin mn Cx oper 1571 Mawel 585 Meta 237 Main 331 S260 “168 NY ait HB Deepak Jasani, ead rai researc, wore secures What strategy may work the best in the current market situation? ‘The difference between the macros (which are worrying) and stock market values (which are soaring) creates doubts in the ‘minds of investors to keep participating in the bounce. On the other hand, FOMO is also bothering them. Investors can relook at their asset allocation and bring down the equity portion fit has exceeded the intended allocation as planned by the investor. In case the equity portion has not been exceeded, investors can, Keep reshuifling their portfolio by part booking profits on stocks that have run up much more than the markets and parking that sum into sectors that are currently neglected and. within that sector look for the best 1-2 companies to invest. For investors who are woefully short of the intended asset allocation as far a equities are concerned, they can shortlist 35 stocks for staggered investing over the next 5-8 months. ‘What is your outlook on IT stocks? The IT sector can be looked upon asa truly defensive sector currently. The pandemic will have minimal impact on deliveries by IT companies through a combination of work from home and on-site work. Although there may be doubts about spending by key industries globally resulting in their revenue Visibility getting impacted diue to the slowdown, IT sector's importance has risen late due to the urgency by the cents to digitize their operations with a view to compete effectively and keep operating in tough times. Within IT, both the large-cap and small-cap have their oven strengths. While the arge-caps provide stability in order bookings and execution along with visibility in revenue growth despite the pandemic, the mid-caps 2B DALALSTREET INVESTMENT JOURNAL | 5 0 have their own niche areas of speciality. These niches help ‘mid-cap companies perform well in certain periods. These niches ae also valuable to some investors as was seen in the recent buyout of Majesco US, ‘What are the key risks faced by the markets? Will Fils park ‘more money into Indian equities? “The risks include irregular monsoon, rupee coming under pressure, local interest rates starting to rise, emengi ‘markets going out of favour, political setback for Pr Minister Narendra Modi, geopolitical troubles for India including the China front, US presidential elections «creating some turmoil globally stress inthe financial sector spreading to the real sector, the pandemic having second and third round of infections, etc Ifthe global or local situation deteriorates and liquidity taps start to run dry. a sharper fall ‘could ensue, Pls have a choice to invest across the globe. Some of them try to arbitrage by borrowing cheap abroad and investing in ‘markets, including emerging markets, keeping in mind the currency depreciation possibilty. Currently we ae witnessing a virtuous cycle with a feeling of FOMO present in quite afew FPls despite their belief that valuations are not conducive for fresh investment. Hence, the turnaround in economy and in ‘corporate earnings or continued easy money policy or risk on sentiments across the globe due to no large geopolitical issues ‘or inter-country conflict (even economic) can lead to continued flow into India by FPIs. Any reversal in these can lead to ‘outflows though their quantum will depend on the intensity of the negative trigger. . stainSankar Cha ‘How is the indian economy expected to grow in FY21? ‘Given the severe impact of the pandenaic and intermaiticat hockdowns actos the county that ar likely to continue across 2, we ar expecting real GDP to contract by 10 per cent in the ‘current financial year (FY21). While QI is expected to contract by over 30 per cent, we reckon that the economy will continme tw contract even in Q2- What this means is that chances of a Veahaped reeinery are rather alim. Instead. the recewery will be more gradual ower the next few quarters and culminate somewhere in FY22. ‘What are the key risks facing Indian at this ‘are the key risks facing Indian economy Households postponing consumption isto our mind the single biggest risk faced by the Indian econoeny. This is because ‘consumption i the engine of Indias economic virtuous cycle and al! operational as well as capital expenditure is dependent ‘on it The negative credit off-take as well as contraction seen in ‘other macro vartables is ultimately reflection of weak domestic demand. We note that poor ccanomic performance not just a fection ofthe carveat oclslown end the apply donation thereof but the increasing economic uncertainty that is Cover Story 1, Group £0, Acuité Ratings & Research translating wlracr spending and a propensity to save despite a low interest rate environment. A consumption: inducing policy is therefore the key at this juncture and it must precede all else. ‘Why can’t india print money and inject cash in the economy the way western economy does? Unlike the USD and Euro, the Indian rupee lacks a reserve status in the world and the excess money supply created by merely printing cash has to be absorbed domestically. thas been observed historically that deficit financing by the central bank (printing money) isften inflationary (lasting a least a quarter depending upon the magnitude) ifnot utilised productively. In any case, deficit Financing is a window of last resort and a consensus between the RBI and the Indian government will be critical. If and when the RBI decides to monetize the government debt om a lange scale, a formal plan must be in place much in advance. Itis recommended that this money, if created. should be used for capital expenditure instead of bouschold handouts. We believe that there isa possibility of a second fiscal package. if any, to be partially financed via this window. . Conclusion As of now, markets lack the sklvantage of value they had when ‘we witnessed the fastest market correction ever ata time when there was fall by nearly 0 per cent. The market looked cheap ‘with its PE being close to 16 after the correction pushed Sensex ‘to sub 26,000 levels. With Sensex trading at above 38,000, the PE multiple of 26 suggests the valisbons are not very attractive. “That sad, the ‘known unknowns’ are already factored in and it ‘will bea mistake to have a negative outlook on the equity markets, Cautious optimism is required more than anything ‘lsc in the current markets “The recovery will continue as more efforts are being made by [policy-makers actoss the globe to bring economies to normalcy. ‘What matters for equities isthe onger-term impact on cearningy For long-term equity returns, itis important to access the time taken for earnings and dividends to recover to the ‘pre-panemic levels. With the stimuli packages announced ‘worldwide the recovery is expected to be fast-tracked and some of the economies may see a V- recovery: India may show relatively dow recovery due to lack of stimulus ax compared to some of the developed economies. India is opening up rather gradually and may recover taster swith more focused stimulus. The market will tke cues from fresh news expected this week. Chances are that i will correct ‘with every hint of negative news. The market outlook is neutral {to positive in the near term to medium term with expectations ‘of more stimmulss packages to hit the markets even as an increasing number of countries are reopening quite fat. A JO OALAL stmcey mvestient soURNAL positive development on the vaccine front will also keep the ‘markets from falling, And even though the high-frequency ‘economic indicators are pointing toa slowdown, it may prox the US Federal to continue with its dovish guidance. This may keep the interest rates lower fora longer period and that augurs veel for equities. [Equity investors should remember that recor level of fiscal stimulus, sustained lower interest rates and low inflationary ‘environment together create a supportive environment for risky ‘asset outperformance such as equity. The US dollar is siding ‘and it should weaken as the global economy recovers given its ‘counter cyclical behaviour. Its observed that the dollar typically gains during global downturns and declines inthe recovery phase. A Jower US dollar could keep gold prices higher. While shining gold prices is pleasing the trend often ‘means that the market participants are not confident about the ‘economic growth prospects. Jn such uncertain times when the direction is not clear on many fronts, quality always fetches a Those businesses with strong balance-sheet, steady cash flow and ‘quality growth will be chased by both institutional and HIN investors. Thus, it makes sense to strictly stick to quality stocks the rally may get narrow until further clarity emerges on the ‘yaccine front. Its advisable to have a stock -specihic view rather than taking a blanket call on the market. Investors can take long ‘bets on sectors that show promise such as chemicals, specialty ‘chemicals, IT, pharmaceuticals, insurance and FMCG. Buying ‘on dips could be the most profitable strategy in such market conditions.Cover Story Sankar Chakraborti, cous eo,aciteratings Research How Is the Indian economy expected to grow in FY212 Given the severe impact ofthe pandemic and intermittent lockdowns across the country that ae likely to continue across Q2, we are expecting real GDP to contract by 10 per ent in the current financial year (FY21). While Ql is expected to contract by over 30 per cent, we reckon that the economy will continue tocontract even in Q2. What this means is that chances of a ‘V-shaped recovery are rather slim. Instead, the recovery will be more gradual over the next few quarters and culminate somewhere in FY22. What are the key risks facing Indian economy at this Houscholds postponing consumption isto our mind the single biggest risk faced by the Indian economy. This is because consumption is the engine of India's economic virtuous cycle and all operational as well as capital expenditure is dependent ‘nit. The negative credit off-take as well as contraction seen in ‘other macro Variables is ultimately a reflection of weak domestic demand, We note that poor economic performance is not just a function of the current lockdown and the supply disruption thereof butthe increasing economic uncertainty that is Conclusion As of now, markets lack the advantage of value they had when. ‘we witnessed the fastest market correction ever at atte when there wasa fall by nearly 40 per cent. The market looked cheap, wit its PE being close to 16 afer the correction pushed Sensex to sub 26,000 levels. With Sensex trading at above 38,000, the PE multiple of 26 suggests the valuations are not very attractive. ‘That said, the “known unknowns’ are already factored in and it will bea mistake to have a negative outlook on the equity ‘markets. Cautious optimism is required more than anything else in the current markets. “The recovery will continue as more efforts are being made by policy-makers across the globe to bring economies to normalcy. ‘What matters for equities isthe ‘longer-term impact on earnings Forlong-term equity returns, itis important to access the time taken for earnings and dividends to recover to the pre-pandemiclevels. With the stimuli packages announced ‘worldwide the recovery is expected to be fast-tracked and some ‘of the economies may see a V-shaped recovery. India may show relatively slow recovery due to ack of stimulus as compared to some of the developed economies. India is opening up rather gradually and may recover faster ‘with more focused stimulus. The market will take cues from fresh news expected this week. Chances are that it will correct with every hint of negative news. The market outlook is neutral 10 positive in the near term to medium term with expectations, ‘of more stimulus packages to hit the markets even as an increasing number of countries ae reopening quite fast. A 30 DALALSTREET INVESTMENT JOURNAL ( 4.5 03-1 translating to lower spending and a propensity to save despite a low interest rate environment. A consumption-inducing policy is therefore the key at this juncture and it must precede all else ‘Why can't india print money and inject cash in the economy ‘the way western economy does? Unlike the USD and Euro, the Indian rupee lacksa reserve status in the world and consequently the excess money supply created by merely printing cash has to be absorbed ‘domestically. Ithas been observed historically that deficit financing by the central bank (printing money) is often inflationary (lasting at east a quarter depending upon the magnitude) ifnot utilised productively. In any case, deficit Financing isa window of last resort and a consensus between the RBI and the Indian government will be critical. and when the RBI decides to monetize the government debt on a large scale, a formal plan must be in place much in advance. tis recommended that this money, if created, should be used for ‘capital expenditure instead of household handouts. We believe that there isa possibility of a second fiscal package, ifany, to be partially financed via this window. . positive development on the vaccine front will also keep the markets from falling, And even though the high-frequency ‘economic indicators ae pointing toa slowdown, it may prod the US Federal to continue with its dovish guidance. This may keep the interest rates lower for a longer period! and that augurs well for equities. Equity investors should remember that record level of fiscal stimulus, sustained lower interest rates and low inflationary ‘environment together create a supportive environment for risky asset outperformance such as equity. The US dollar is sliding and it should weaken as the global economy recovers given its ‘counter-cycical behaviour. Its observed that the dollar typically gains during global downturns and declines inthe recovery phase. A lower US dollar could keep gold prices higher. While shining gold prices is pleasing, the trend often ‘means that the market participants are not confident about the ‘economic growth prospects. In such uncertain times when the direction is not clear on, ‘many fronts, quality always fetches a premium. Those businesses with strong balance-sheet, steady cash flow and quality growth will be chased by both institutional and HNT investors. Thus, it makes sense to strictly stick to quality stocks asthe rally may get narrow until further clarity emerges on the ‘vaccine front. Itis advisable to have a stock-specific view rather than taking blanket call on the market. Investors can take long ‘bets on sectors that show promise such as chemicals, specialty ‘chemicals, IT, pharmaceuticals, insurance and FMCG, Buying ‘on dips could be the most profitable strategy in such market conditions. aVV 23] Ste Ory yt Financial Review ForFy2o <CONTENTS is Agriculture. Electrical Equipment Engineering, Entertainment. Miscellaneous .. We bring you te vital financial data of TOP 1000 companies by market capitalisation. We constantly get requests from our valued reader-investors for fiancial data and keeping our promise. we lay down for you the nancial data for Top 1000 companies by 24 sectors in easy readable format. We are sure tha ftancial data by sectors along with the detailed view on sector dynamics wil be an imerestng read for you! We have sourced our financial data from Ace Equity PS. Companies having year ending as Tune, eptember and December are ao included inthe financial data with data flowing under Fx20. (Compiled by - Amir Staikh, Anthony Fernandes, Apurva Josh, Geyatee Deshpande. Nidhi nk Pratik Shasirt, Rishikesh Gatkwad. Yogesh Supekar 32_BALALSTREET nVESTMENT JOURNAL stain) ( Arming you to reach your investment target * Easy to view your portfolio on your fingertips. BCU W Be id Portfolio Advisory Service (PAS) is DSIJ's premier wealth creation service that provides personalised stock ae recommendations to investors. Dire mea See ORO TR ae Rem Pee a ce eeAgriculture " BA Ficinse contend beshebachione ofthe wo Indian economy. Since the country has bi proportion of fertile and cultivable land supported by diverse agro-climatic conditions. farming is extensively practised. Itis the largest producer of spices, pulses, milk, tea, cashew and jute, and the second-largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and cilseeds ‘Additionally it also is second in the global production of fruits and vegetables and is the largest producer of mango and banana. Food grain production was estimated to reach 295,67 million tons (MT) during 2019-2020. Production of horticulture crops in India was estimated to be at 320.48 million metric tons (MMT) in FY20 while milk luction in the country is expected to increase to 208 MT in FY21 from 198 MT in FY20, thus docking a growth of 10 per cent YoY. Despite the virus-triggered pandemic, the agriculture sector has witnessed a silver lining by experiencing ENTS ro oe Rear) oo) aon Pea 15 sii9 | ane | 5026 none arn aby oman teu] 17902 [13798 | 127790 erst | a8 | S168 ei. Pay (ne S675 wit] ara | simak ae Sed orn 198 25991 ai7al Pes). 713800 594 fang On 007? SLs [sree tea ops “e630 (ujzat andj aio ia oe 150132 [Wen (nia) Utd 2686.21 ven Engng nr ies [sama mS i. 1us667 tania Balu tnt amass thn Sar 39501 [oj asa Sa 571 [Nath Bio-Genes (ina) Let. 419165 i Dwar spans |Awadh Sugar & Energy Lid. $8.16 [ree 1138 an Si i selina. 026 noi stron aa 58 Sree ae ra Li 106 330 [gi Spr meri ia 21 [Ucar Swear Werks Lid. 158.51 813 [rare Naan im as 34 «DALAL STREETINVESTMENT JOURNAL | UGC 1 sisinppeamennereaiy ei CS or FY20 7 percent YoY to ined net profit of antly compared \-For FY20,, °€3816.59 crore 184 crore forthe registrations in the country dived to alm May due to the complete lockdown However, there have been improvement ‘of the lockdown in some regions, leading vehicle sales. The automotive and auto tead of further sectors are major contributors to Indias for better pricing, product (GDP), accounting for more t cological total ‘to sustain shocks 'siness Councils Acconding to the Society of Indian Auto arendra Modi (SIAM), the automotive industry mann idia beinga land ‘etnies including passenger vehicles, co sing the key three-whecters,rwo-wheelers and quadri athe near future, 2020 as against 7,213,045 in Apel-hune 24 beakey sharp dedine of 794 per cent. During: vill bolster the wheeler sexenen! was mest affected 35 ts for farmersas pearly 91.5 per cent YoY in QUFY21 to 12.7 ay. ‘commercial vehicles which recorded nearly plunge in domestic sales to 31,636 units. Segments of passenger vehicles and two ¥ sant nearly 7844 per cent and 74.2 per cent YoY 1395 sales inthe first quarter of FY21 to 153,73 1770 ne 1,293,113 units, respectively: The BSE Aut neatly 45 per cent in March 2020 from Jat et inno ret that iheoutea forma viushas | atid clown contain he spre J[sesotecmmicnyios stn hr anne |e wine asaya en indoary so capone pandas darued nt | tow when econo cvs wate jut oeephy ceanbetdonandaswe dutoste | paued manee Flowing the oan! Cero) Coon Tov | esa] aebeao| weer [seuss [e128 55920, inist| aierzs| rsomse| — sanzi| esa0n0| ssi] eon Tammt| 951m orm | onse77] — Desss fie [oes | pease ssasai|— masa] win] ees] — ome] sos] sour] mien sana] —enss] sa] sms] — mae] aoa on] Ins Task | aac [Ponsa sh | Dv 25 | — Towa [ren [sis [a5 75 said] we mine] 7s | pmem | ne] eae aS sins] 2a] wn) rnD] Is] soso] ee] seat tana] — sno] eam] aes] — nam) nies] oasr] ore smo] smn] suis] ase] an] sya] son] 37 zm35 | 0st san] m6 | son Skat nines] — sas ms] an] 956 1800 saa] ans ast] san] as se zn] nm 335] 8] 2 1873 NvsounaL 35, 3G SALAL svaEET vvesrent JoURNALSpecial Supplement Automobile registrations in the country dived to almost zero in early May due to the complete lackdown imposed nationwide. However, there have been improvements with the easing. ofthe lockdown in some regions, leading to pick-up in vehicle sales. The automotive and automotive ancillary sectors are major contributors to India’ gross domestic product (GDP), accounting for more than 7 per cent of the total. According to the Society of indian Automotive Manufacture (SIAM) the automotive indastry manufactured nearly 1,486,594 vehicles including passenger vehicles, commercial vehicles, {hree-wheders, two-wheelers and quadricycles in April-June 2020 a against 7,213,045 in April-June 2019, thus representing a sharp decline of 79.4 per ent. During this quarter, the three- wheeler segment was most affected as its domestic sales tanked nearly 91.5 per cent YoY in QUEY21 to 12,760 units followed by commercial vehicles which recorded nearly 848 per cent YoY plunge in domestic sales to 31,636 units Segments of passenger vehicles and two- wheelers recorded nearly 78.4 per cent and 74.2 per cent YoY fallin domestic sales in the first quarter of FY21 to 153,734 units and 5113 units respectively. The BSE Automotive index fell nearly 45 per cent in March 2020 from January 2020 due to tis no secret that the outbreak of corona virus has ‘nationwide lockdown to contain the spread of the virus, but T[ircsitsimictiny oss hence | erie sp nce fa pen om jndustry is no exception. The pandemic has disrupted not | that low when economic activites started to resume in a just the supply chain but demand as well. Automotive | phased manner. Following is the median PE calculated on the Mars Sub i W7srr2a3| 7170480 | €303850] e03e680 | 1064700 [1356480 [1410920 | $88820] 745490 71740 ej te aoooe.2| 291nnst | 2856725] 2soamee | ocaozn | 653400 sonst | 040 asrzas | 393133 Matera & vane Tanss.2t | 9517909 [10472068 | s326477 | Taezeae [1909212 {3957.13 | I3ease | 465053 | eas053 Hero Moeorp suis | 2525532] 3397223 sstoost| ——«7oiae| 7055 seaszz | s6za70 | 340559 367251 che ners Siaii2s| 907355] srivaa| 917516] amaseo| 334650] 30e773| 179573 t94433] 17081 [aa Mats race. 56 | 5594-36 | 7616058 | TH638625 | 7086072 | PPeDase | ¥sav577 | 0975.73 | 7883370 | 13 10 [vsMatr Company wasriz7 | saeea3i | 201sees | ieroi7s| zeae] riss2s | remee | ess30 | Tro] ooazt ask Leyland Bsisi35] —a17as tz] s77saza| resmz13 | ssent9| sons | vaaase | —eseot | r1e32| 180725 Exons 14as2.ta | ser003 | 62ez02 | sosnis | veoco | 91693 e1ssz | —a7zan | a7s6 | 34696 Tube nesters of na seman] 450030] sects | aazase | eanaz | sero] woo] 13z7| 25860] 16059 Force Mears 122895 | soansz | 3es2us | 352377] suns | 30040] s3651] seas] 10243 14721, [sr Ties rac 119893 54368] 61480 | 75395 aosz|—#955[ 16476] 1800 4605] 11198 cu ao uss | e17si| 6613s] 56457 mai] was sn] sia] san] 619 Scots nda wn] no] eas] sass ne| 2 16] asm] 463] ae 36 DALALSTREET INVESTMENT JOURNAL stain—- #10000 panies| Financial Review For FY20 dipped 19 per cent YoY. Outlook ‘The automotive industry was already experiencing a bumpy ride due to lacklustre demand on account of higher ownership ost, rising fuel prices, liquidity crunch due to NBFC crisis, etc. The pandemic has led to supply disruption, adding further to the woes of the automotive industry resulting in a double setback to automotive players, Besides, automotive industry players are in discussions with the government to provide fiscal stimulus while also demanding 10 per cent reduction in GST rates across all vehicle categories. Automotive sales recovery is expected to be primarily led by rural sales as the hinterland economy is less impacted by the pandemic. In fact, rural economy is helping in driving sales of tractors, two-wheelers, small commercial vehicles and three-wheelers. 1882 3s ct a DELL Le Baja Ao 1453 188 cher Motors 238 311 Exons tt, 1697 2 Face eos. 1407 a Hero orp 1801 1s Nahin Babin 557 sas ar Sk ina id un 318 ‘SL tazuLi, 164 18 tae 1145 ws wer Company Ud. EE) m2 ST Ties Tras tt 1097 es source: Ac Ely Further, the government has announced a stimulus package for the agricultural sector while the prediction of a normal basis of the monthly PE data from January 2008 to June 2020. Financials ‘To analyse the performance of the automotive industry, we haave taken the financial data of 14 companies from this sector. Ail the companies, except Scooters India, have recorded a decline in net sales for FY20. The aggregate sales of these ‘companies fell nearly 13 per cent YoY while operating profit ‘monsoon and an increase in minimum support prices (MSP) bodes well for the rural economy. The commercial vehicle segment is expected to be the worst performer in the ongoing fiscal year. Iti stated that social distancing is likely to support two-wheeler sales with a majority of people avoiding public transport. Prolonged virus infections and delay in the revival of economy and consumer spending may act asa huge hurdle oon the recovery path. Though the valuation may look lucrative at this moment. investors should not forget that they can reach their destination by focusing on the windshield and not, looking into the rear mirror. YoY Growth Eno) 19795] 75326] menss] 1365] 2151 Bel wal 73s] any sa] 15100 5100 wot] 17029] 14580154 12 6m] sr] t635{ 1503] 1535] 20937 2337 iis] ase [ease] sun] 1536 mi] s765]—1a3 [aus] 735] saan SB Wp] ia] ias30| 138] 1501 Gu] ses] 238{ tooo | i103 | 3995 3358 oea35 | —_w07as | isa] 463 1st] —ans0[ 1867] maz] ma6] 2730 7728 mss] uaa | 267] 1357 mi] ma] 420] 958] 233] asa on Bs] as) 7650 aul aiss[ sa 35] 388] ost ast ius[_7o8[ 601] s3e0| a5 “aar| timo] 208] 658] 60s] 203s 71 us| ser] an] am] 497 lar] _-139[ aia] 768] 6a] 758 1630] 1281] 786] 10.24 718, rosa] —n26[ 655 450] 331] 1879, 1875 aor | 1047s inez| 15661353, 4033| 6500] 150] ans] 8 BB max] S330 12361] 1157] 5431 sus] or] 331 1a] tae] 864 864 2a] _2s08 | augs| 463 | _—asa9 56] 2a] asf 797] an] 1097 a7 10) ass) 28] 278 MA ma] ww] aise 725] sae] o727 3535 psisia ‘AUS03- 36.2020 BALALSTREETINVESTMENT JOURNAL 37.ial Supplemen Auto Ancillary {he automotive components’ industry accounted for 2.3 percent of Indias GDP It contributed 25 per cent (ils manufacturing GDP and provides employment to 50 lakh people. The Indian automotive components industry is also expected to become the third-largest in the ‘world by 2025. India is among the top five largest automobile ‘markets globally. A cost-effective manuficturing base keeps costs lower as compared to those in Europe or Latin ‘America. This has resulted in India emerging asa global hub for automotive component sourcing. ‘As per Automobile Component Manufacturers ‘Association's forecast, the export of automobile components from India could reach USD 80 billion by 2026, The Indian automotive components industry aims to achieve USD 200 billion in revenues by 2026. For companies like Fiat General Motors (GM) and Suzuki, India has established itselfas a global hub for small engines. The growth in sourcing from India and increased indigenisation of global OEMs has resulted in making India a preferred designing and manufacturing base. In 2019, Minda Industries acquired Germany-based automotive lamps firm Delvis Gmbh along with two ofits subsidiaries. In May 2020, JK Tyre & Industries set up a new entity, Western Tires Inc, to expand its business in the United States. Both Indian and global manufacturers are investing in new capacities and newer programmes to get long-term advantage. With the markets in the north, west and south of India getting saturated, component manufacturers are now eyeing untapped markets in the northeast region of the country, Financials We analysed the performance of 83 companies. The companies that showed high sales growth on YoY basis in FY20 over the same period last year inciude Welspun Corp Limited (12.50 per cent), PTC Industries (11.16 per cent), Precision Camshafts Limited (7.34 per cent) and Srikalahasthi Pipes Limited (6.68 3B OALALSTREETINVESTMENT JOURNAL | UG.C2 16 2020 pe op Cer) Operating Profit Ces) es [| mecas_[geviss | reson | nusrz2e | areas | 2res36 | asnes | ean | assent | 137072 eterna asars3o | 257310 | 257158 | smnens | — sa7en9 | sn | ass7on | nase [e500 | 217185 nt asin | — 16936 | amas | isas7 | — zoey [8 | tansy [ine | mHISt ‘irs rare’ ‘ari2t | szse | ages? | — 152203 | 1s Pat | ssn6s | aes | 73579 smoctroe “orssat | 101573 | enesr | 1aes7_| zasex7 | aso | 20215 | toeas? | 75135 ce dese iaarioi | ro | ane [sre sen | 1755 [poner | ea735 | 69419 [Wabeo India 192956 | 285414 | 2476.71 31537 | 48235 | aa5t4 | tsaei | 26217 | 27283 ‘urn Teme sari | 7sivs0 | 6029 | uaa uss | asim | sess | —ess0i | 29076 Inara aters sava7 [ernst | 67298 | 115359 | seas | suneo | eeaa0 | aears | anise (sla 3750 | ss04e0 | 385150 | — 121780 | 18510-| 111670 | e77a0_| roast | 65160 [Schaefer india 436053 | 456151 | 4099.55 sem) | GoM | 7s | 36764 | 4980 | 38849 (orm rd — 2 —sossa |” 556055 [soso | oteg7 | iuoei2 | aptzz [seas | oes? | esos [ind nie Sagi | ssoses | ~esis25 | essa | 201 | sera | rere | smoet | 30078 a 2a4ish [30353 | 2304ar | «5337 | s7e2u | 50620 | —7aa98 | 33577 | 29589 Timien da 175 [166A | SLT | — 597 | sai | Tet | 260 | eee | 9159 potas 25357 | tes | 1a7a39 | mess | De | Doers [eT | emo | mT | 788 2sauue | zostso | rrasat | easat| are | ase3t | atrse | as082 | 15177 Toor? |aomst | e57ost | — toooat | 1es77 [autos | 35373 | esas | 35038 ergy |-eetst | 66230 | russ] ise | Gun | 2mee| Toe | 21027 S| ma] 1251) 19362 | 7595 | e209) mse | reed | 8075 ioisa70 | nisares | 7256 | asron| Teese | 165199 | e2s05 | 7as15 | rae 165d | t7ase0 | toveek | —soo0a | 125-[-asiar | —atps2 | 17778 | 15856 sez | 15a960 | ~n6aer | —2u08 [nar 25178 | ws | nae |e sao | e67506 | 61051 | 12585 |_07.5| rium | mos | — e685 | 23852 /aowsar ["raanas | 1sga0 | 10279 | asses | 2seae | 3077 |Se 0P- 1000 Companies| Financial Review For FY20 per cent), Players like MRF Limited and Amara Raja Batteries Limited posted marginal increase in sales at 1.1 per cent and (0.68 per cent in FY20 as against FY19, MRF and Amara Raja Batteries were the only tyre and battery manufacturers that recorded YoY growth in sales. Bosch India, the largest company by market capitalisation, saw 18.56 per cent decline in net sales in FY20. Its net sales for the year stood at 89,841.63 crore in FY20 as against 212,085 crore in FV19. The companies that showed the highest decline in sales in the same period include Automotive Axles Limited (50.91 per cent), Jamna Auto Industries Limited (47.12 per cent) and Enkei Wheels (India) Limited (-43.78 per cent). Out, of the 83 companies we analysed here, 12 companies showed increase in sales over the past year. Up to 71 companies saw a m[ ae] en] mol an] am] an me | mo] 16s | 382 as7| 1307 | am | ie] 193] tos | a | ee] aes pain 003-16 20201 BALALSTREETIMVESTMENT JOURNAL 77Hospitality ‘dias rich culture and diversity attracts a large number ‘of tourists from all over the globe. In addition, a consistently growing middle-class, rising levels of disposable income, increasing interest among millennials to travel in their home country are just some ofthe reasons why the Indian tourism sector has grown to such a large extent over the years. The sector also has an economic significance in terms of employment generation ~ the contribution of travel and tourism to domestic employment stood at around 40 million jobs during 2019, representing around 8 per cent ofthe total domestic jobs. ‘According to the World Travel & Tourism Council (WTTC). this sector contributed about USD 194 billion during CY2019 ~ an input of around 6.8 per cent to the country’s GDP. The hospitality sector being a part ofthe travel and tourism industry has been one of the biggest beneficiaries asa result. ‘The hotel industry is largely fragmented with numerous small and unorganised players dominating the market. Over the years, it has witnessed a shift in favour of the mid-market and budget hotel segments along with hotel aggregators in the budget segment that has led the massive and unorganised hotel industry to consolidation. ‘The unbranded hotel segment comprises more than 70 per cent ofthe total available hotel rooms, whereas the branded hotel segment, which dominates the organised sector, accounts for about 5 per cent of the overall hotel industry in terms of room supply. In the year 2019, the hotel industry witnessed good levels of growth in operating performance despite headwinds such as the closure of Jet Airways, the impact of general clections and softer economic growth. Growth was led by business cities on the back of stellar office market absorption seen across the country last year The year 2019 also witnessed a 13 per cent growth in brand signings over the previous year and the highest volume of hotel transactions both in terms of value and number of keys traded, displaying strong investor sentiment and confidence. Furthermore, the central government’ initiatives such as the slashing of Goods and Services Tax (GST) rates for hotels brought much optimism to the hospitality sector. Reduction of corporate tax boosted business sentiment towards the end of 2019. Thelin nse M55] ua S120) A055 708 ‘an Ea “sisi5| 159625 | 1H1082 | —isea] 10493 171% ing ai ar Bris |-2aas8 | 1687 0 126 tenon reeks ssi] au ‘i — nat a ik aanas| ipa sar] aie cis ers 3i6e7 | 282s 135 2100 Wondera tas 21st] 77058 695 3450 Aste We ui8 | ma Tie 773 cra ee 3673 | 3797 ai 56 ac ars nda 3065 | 7a. am 2 Qa 168 33g) a0 is oan iin