ValueGuide Aug2020-202008131323151558733

ValueGuide
August 2020
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CONTENTS
From the Editor’s Desk EQUITY

Markets have surprised
FUNDAMENTALS
even the most optimistic REGULAR FEATURES
of investors with the 3R Stock Idea 07 Report Card 04
unrelenting rally for more Stock Update 08 Earnings Guide 49
than four months now.
Sector Update 31
Given the economic fallout
of the COVID-19
pandemic, demand
destruction and the
pressure on businesses
globally, the surge in the equity market is intriguing to say
the least. ...
TECHNICALS DERIVATIVES
Nifty 39 View 40
06 ADVISORY DESK DERIVATIVES
MID Trades 44 Derivatives Ideas 44
PMS DESK
ProPrime - Prime Picks 43
CURRENCY
FUNDAMENTALS
USD-INR 41 GBP-INR 41
EUR-INR 41 JPY-INR 41
TECHNICALS
MUTUAL FUND DESK 45
USD-INR 42 GBP-INR 42
EUR-INR 42 JPY-INR 42
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JuneAugust20172020 33
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REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON AUGUST 03, 2020)

CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-AUG-2020 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Automobiles
Apollo Tyres Buy 108 135 197 74 -5.4 21.7 -33.0 -26.5 -7.8 4.5 -26.1 -27.0
Ashok Leyland Hold 49 60 88 34 0.3 -0.1 -37.6 -23.0 -2.2 -14.2 -31.1 -23.5
Bajaj Auto Buy 2917 3500 3315 1793 -0.6 19.5 -7.8 11.3 -3.1 2.6 1.8 10.6
Hero MotoCorp Buy 2631 3200 3021 1475 -3.9 31.4 6.8 9.6 -6.3 12.8 18.0 8.9
M&M Buy 597 750 641 246 12.7 67.4 3.6 9.4 9.9 43.7 14.4 8.7
Maruti Suzuki Buy 6166 6925 7755 4002 3.9 26.1 -14.4 8.8 1.3 8.2 -5.4 8.1
TVS Motor Buy 396 470 503 240 0.2 27.4 -12.8 5.4 -2.3 9.4 -3.8 4.7
BSE Auto Index 16399 19057 10141 3.7 31.9 -9.9 6.2 1.1 13.3 -0.5 5.5
Banks & Finance
Axis Bank Buy 417 585 766 285 -2.6 3.6 -41.6 -37.0 -5.0 -11.0 -35.5 -37.5
Bajaj Finance Buy 3173 3800 4923 1783 8.2 52.5 -29.8 0.4 5.5 31.0 -22.4 -0.3
Bajaj Finserv Buy 6073 7500 10297 3986 -1.3 27.4 -36.4 -13.1 -3.7 9.4 -29.8 -13.7
Bank of Baroda Hold 47 56 108 36 -7.7 2.1 -46.2 -54.6 -10.0 -12.4 -40.6 -54.9
Bank of India Hold 48 53 80 30 -5.2 42.4 -26.6 -30.3 -7.6 22.2 -19.0 -30.8
Federal Bank Buy 52 60 99 36 -1.0 19.1 -41.6 -40.0 -3.5 2.2 -35.5 -40.4
HDFC Buy 1740 2113 2500 1473 -7.7 0.9 -25.8 -19.2 -10.0 -13.3 -18.1 -19.7
HDFC Bank Buy 1002 1400 1304 739 -6.7 8.5 -18.5 -54.0 -9.0 -6.8 -10.0 -54.3
ICICI Bank Buy 343 485 552 269 -4.9 1.5 -35.3 -14.7 -7.2 -12.8 -28.5 -15.3
LIC Housing Finance Hold 258 285 509 186 -6.1 -0.6 -34.4 -48.0 -8.4 -14.6 -27.6 -48.4
Max Financial Buy 543 570 611 280 -2.3 17.3 12.4 34.3 -4.7 0.7 24.1 33.5
Punjab National Bank Hold 33 45 70 26 -8.5 8.8 -42.0 -50.6 -10.8 -6.6 -36.0 -50.9
SBI Buy 192 280 351 150 4.0 7.4 -37.3 -36.0 1.4 -7.8 -30.7 -36.4
BSE Bank Index 23927 37193 18430 -3.5 5.5 -31.9 -23.4 -5.9 -9.4 -24.8 -23.9
Consumer goods
Asian Paints Buy 1705 1987 1916 1432 0.5 1.7 -9.8 11.8 -2.0 -12.7 -0.4 11.1
Britannia Buy 3776 4200 4015 2101 6.7 22.1 16.8 46.8 4.0 4.8 29.0 45.8
Emami Buy 241 320 357 141 4.9 27.8 -19.8 -22.6 2.3 9.7 -11.5 -23.1
Godrej Consumer Products Buy 698 810 772 425 -2.7 32.8 6.7 13.9 -5.1 14.0 17.8 13.2
Hindustan Unilever Buy 2205 2550 2614 1756 1.5 5.9 2.3 26.6 -1.0 -9.1 13.0 25.8
ITC Buy 193 250 266 135 -7.1 10.7 -10.7 -25.8 -9.4 -4.9 -1.4 -26.2
Jyothy Laboratories Buy 125 170 185 86 2.4 14.9 -18.3 -19.5 -0.2 -1.4 -9.8 -20.1
Marico Buy 363 420 404 234 1.2 27.6 18.1 -2.9 -1.3 9.5 30.4 -3.5
Tata Consumer Products Buy 434 522 530 214 9.5 29.6 14.3 66.4 6.8 11.3 26.2 65.3
Zydus Wellness Buy 1726 1780 1859 1070 30.0 32.2 14.8 13.5 26.7 13.5 26.8 12.7
BSE FMCG Index 11418 12378 8491 -0.1 10.3 -1.4 4.7 -2.6 -5.3 8.9 4.0
IT / IT services
HCL Technologies Buy 706 750 718 376 21.9 37.3 20.4 -30.2 18.9 17.9 32.9 -30.6
Infosys Buy 957 ** 986 511 25.5 42.1 21.5 23.3 22.4 22.0 34.2 22.5
L&T Technology services Buy 1534 1600 1780 995 18.5 28.9 -9.6 2.6 15.6 10.7 -0.2 2.0
Persistent Systems Buy 978 1000 1040 420 52.6 111.1 36.6 90.0 48.8 81.3 50.9 88.7
Tata Consultancy Services Hold 2251 ** 2357 1504 2.4 16.7 6.8 0.1 -0.2 0.2 17.9 -0.5
Wipro Hold 281 ** 291 160 25.2 47.9 17.1 7.3 22.1 27.0 29.3 6.6
BSE IT Index 18133 18551 10937 17.1 34.0 12.9 15.9 14.2 15.0 24.7 15.2
Capital goods / Power
CESC Buy 549 825 855 366 -12.8 -12.9 -23.1 -26.1 -15.0 -25.2 -15.1 -26.6
Finolex Cable Hold 269 325 433 165 -8.3 10.6 -28.7 -27.5 -10.6 -5.0 -21.2 -27.9
Greaves Cotton Hold 79 90 154 66 -8.5 4.0 -40.3 -32.6 -10.8 -10.7 -34.1 -33.0
Kalpataru Power Transmission Buy 229 300 515 170 -2.4 4.5 -47.6 -49.5 -4.8 -10.3 -42.2 -49.8
KEC International Buy 268 370 358 155 -3.2 33.6 -19.7 -10.1 -5.6 14.7 -11.4 -10.7
Thermax Hold 742 815 1180 644 -3.1 5.4 -28.1 -28.1 -5.5 -9.5 -20.6 -28.5
Triveni Turbine Hold 64 72 115 46 -12.4 -6.2 -33.4 -37.3 -14.6 -19.5 -26.5 -37.7
V-Guard Industries Buy 162 200 260 149 -4.6 -5.1 -24.9 -26.7 -7.0 -18.5 -17.1 -27.2
August 4 Sharekhan ValueGuide

2020
EQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON AUGUST 03, 2020)

CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-AUG-2020 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
BSE Power Index 1528 2057 1275 -4.9 5.6 -19.7 -19.1 -7.3 -9.4 -11.3 -19.6
BSE Capital Goods Index 12751 19428 9499 -2.7 10.1 -24.4 -24.9 -5.2 -5.5 -16.5 -25.4
Infrastructure / Real estate
Larsen & Toubro Buy 916 1250 1554 661 -3.0 7.6 -29.1 -31.9 -5.4 -7.6 -21.7 -32.4
Sadbhav Engineering Buy 43 75 148 23 -5.0 -12.1 -62.7 -64.5 -7.4 -24.5 -58.8 -64.7
CNX Infra Index 3113 3392 2073 0.2 16.7 -4.3 3.1 -2.3 0.2 5.7 2.4
BSE Real estate Index 1557 2565 1259 -2.3 15.3 -35.8 -21.7 -4.8 -1.0 -29.1 -22.2
Oil & gas
Mahanagar Gas Buy 972 1380 1247 666 -9.2 3.3 -19.0 20.6 -11.5 -11.3 -10.5 19.8
Oil India Ltd Buy 95 115 175 66 -2.5 0.4 -26.4 -37.3 -4.9 -13.8 -18.8 -37.7
Petronet LNG Buy 250 300 302 171 -8.4 8.2 -7.4 5.6 -10.7 -7.1 2.2 4.9
Reliance Ind Buy 2008 2400 2199 868 12.4 39.9 40.9 75.7 9.6 20.1 55.5 74.6
BSE Oil and gas Index 12980 15772 8724 -0.3 12.0 -7.6 1.3 -2.7 -3.9 2.0 0.7
Pharmaceuticals
Aurobindo Pharma Hold 868 ** 968 281 11.5 32.9 75.3 58.3 8.7 14.1 93.5 57.2
Cadila Healthcare Hold 395 445 412 206 7.9 19.6 49.6 76.7 5.2 2.7 65.2 75.5
Cipla Buy 711 875 814 357 11.2 16.1 58.4 36.9 8.5 -0.3 74.9 36.0
Divi's Labs Buy 2632 3400 3228 1467 20.2 15.1 34.2 66.9 17.2 -1.2 48.2 65.8
IPCA Lab Buy 1888 2365 2175 844 13.5 17.0 60.2 98.9 10.7 0.5 76.9 97.6
Lupin Hold 927 965 978 505 3.1 10.2 28.5 22.5 0.5 -5.4 41.9 21.7
Sun Pharmaceutical Industries Hold 520 575 551 315 9.0 11.8 22.1 24.7 6.3 -4.0 34.9 23.9
Torrent Pharma Hold 2731 2780 3029 1555 14.0 15.0 41.6 63.6 11.2 -1.3 56.4 62.5
BSE Health Care Index 18388 19720 10948 12.5 19.7 32.4 47.8 9.7 2.7 46.2 46.8
Building materials
Grasim Hold 634 704 837 380 0.8 32.0 -20.2 -15.4 -1.7 13.4 -11.9 -16.0
JK Lakshmi Cement Buy 294 372 389 180 6.6 51.6 -17.7 -12.4 3.9 30.2 -9.1 -13.0
Pidilite Industries Buy 1345 1645 1710 1186 -3.2 -5.4 -13.6 5.7 -5.6 -18.8 -4.6 5.0
Shree Cement Hold 21761 23453 25341 15500 -4.9 16.8 -11.2 8.9 -7.3 0.3 -1.9 8.2
The Ramco Cements Buy 676 740 883 457 5.4 31.5 -15.9 -5.0 2.8 12.9 -7.1 -5.6
UltraTech Cement Buy 4044 5000 4753 2913 4.1 20.8 -9.6 -4.7 1.5 3.7 -0.2 -5.4
Discretionary consumption
Arvind@ Buy 28 43 59 19 -14.9 18.8 -35.6 -50.2 -17.0 2.0 -28.9 -50.5
Century Plyboards (India) Buy 129 145 182 95 2.9 10.6 -24.0 12.2 0.3 -5.0 -16.1 11.5
Info Edge (India) Hold 3155 ** 3575 1580 14.0 26.2 6.4 46.7 11.2 8.3 17.5 45.7
Inox Leisure Hold 231 270 511 158 -1.2 11.5 -44.1 -20.0 -3.6 -4.3 -38.2 -20.5
Relaxo Footwear # Buy 594 825 830 410 -9.4 -2.1 -19.6 35.8 -11.6 -16.0 -11.2 34.9
Titan Company Limited Buy 1076 1200 1390 720 7.3 20.8 -15.6 3.8 4.6 3.7 -6.8 3.1
Wonderla Holidays Hold 137 162 300 105 3.8 7.8 -43.6 -45.0 1.2 -7.4 -37.7 -45.3
Diversified / Miscellaneous
Bajaj Holdings Buy 2600 3345 3949 1472 2.0 37.3 -30.6 -25.0 -0.6 17.9 -23.4 -25.5
Bharat Electronics Buy 97 110 122 56 -0.5 43.4 14.1 4.7 -2.9 23.1 26.0 4.0
Bharti Airtel Buy 547 710 612 326 -5.8 2.8 5.4 53.3 -8.2 -11.7 16.4 52.3
Coromandel International Buy 780 1000 830 337 4.1 37.1 26.1 115.3 1.5 17.7 39.2 113.9
Gateway Distriparks Buy 83 110 138 71 -4.6 -4.2 -36.0 -16.5 -6.9 -17.7 -29.4 -17.1
PI Industries Buy 1841 2250 2154 974 16.8 21.7 19.0 70.1 13.9 4.5 31.4 69.0
Ratnamani Metals and Tubes Buy 1132 1250 1384 716 6.6 29.3 -11.5 25.1 3.9 11.0 -2.3 24.3
Supreme Industries Limited Buy 1294 1350 1414 791 14.0 30.9 -4.1 25.7 11.2 12.4 5.9 24.9
UPL Buy 452 550 618 240 1.8 17.2 -13.4 -16.4 -0.7 0.6 -4.4 -17.0
BSE500 Index 14183 16158 9758 2.8 17.7 -9.3 1.4 0.2 1.0 0.2 0.7
CNX500 Index 8932 10175 6152 2.7 17.6 -9.3 1.1 0.2 0.9 0.1 0.5
CNXMCAP Index 15469 18496 10750 2.8 19.8 -13.6 -0.1 0.3 2.9 -4.6 -0.8
** Price under review @ Reco price adjusted for demerger # Reco price adjusted for bonus ^ Reco price adjusted for stock split
* Price targets will be reviewed after we get further clarity on operations from companies post Q4FY2020 result announcements.
New Idea: We have converted the existing Viewpoint under our active coverage into a Stock Idea
From the Edito
From the Editor’s Desk
Gush of money, wave of hope
Markets have surprised even the most optimistic of investors with the unrelenting rally for
more than four months now. Given the economic fallout of the COVID-19 pandemic, demand
destruction and the pressure on businesses globally, the surge in the equity market is
intriguing to say the least.
But the equity market rally globally can be explained by two simple words: money and hope.
Yes, it is all about money. Policymakers have been quite aggressive and swift this time
around. Globally, the central bankers have cut interest rates sharply and kept liquidity
conditions comfortable. Governments have also played their part with aggressive fiscal
stimulus packages to support accommodative monetary policy. Globally, policymakers have
pumped in $10-12 trillion into financial markets in the past few months. Ample low-cost
liquidity conditions create a fertile ground to plant seeds for a new equity rally.
Hope is another key factor behind the equity rally. Hope that the Coronavirus vaccine will be
available sooner than later. Hope that the economic growth will stabilise and latent demand
will drive a smart recovery in the global economy next year and also boost corporate
earnings. The sharp dip in bond yields and falling returns in the fixed income market has also
resulted in money moving into equity in hope of better returns.
The consensus view will get tested over the next few months. Moreover, only time will tell
if reality matches up to hope. This is because the quick recovery in global economy is built
into the current equity rally. The valuations are also not cheap anymore. Thus, it could create
volatility in the near term.
However, there is an important lesson for investors here. It is futile to time the market and
catch the bottom. The idea should be to accumulate gradually during deep corrections.
Eventually markets do recover and handsomely reward investors over the next 12-18
months. So it is important to keep the larger picture in mind and stay calm as equities
eventually bounceback in the long run.
Happy Investing!

EQUITY FUNDAMENTALS STOCK IDEA
Tata Consumer Products Ltd.

Date: July 23, 2020 A wholesome basket
Reco Price
Buy PT : Rs. 484 Rs. 405
Summary
• Initiating coverage on Tata Consumer Products Limited (TCPL) — earlier named Tata Global Beverages — with a Buy
rating and PT of Rs. 484.
• TCPL will become strong play with integration of Tata Chemicals’ consumer business; share of consistently-performing India
business in revenue to rise to 61% from 48%, margins too can rise 60-80 bps in the near term.
• Appointment of consumer expert Mr. Sunil D’Souza as MD & CEO improves earnings visibility; consolidated revenue and
earnings (including TCL’s consumer business) to clock CAGR of 10% and 20% over FY2020-23E.
• Balance sheet strengthening despite commodity-linked business; FCF rose to Rs. 711 crore in FY2020 from negative Rs.
103 crore in FY2019; debt/equity ratio at 0.1x.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TataConsumer-July23_2020_StockIdea.pdf
Pidilite Industries Limited

Date: August 07, 2020 Investment ka mazboot jod
Reco Price
Buy PT : Rs. 1,645 Rs. 1,377
Summary
• We initiate coverage on Pidilite Industries Limited (Pidilite) with Buy recommendation and assigning a price target of Rs. 1,645.
• Pidilite leads domestic market for adhesives, sealants and construction chemicals. Strong brands (including Fevicol, Dr.Fixit
and Fevikwik) give it a competitive edge over peers.
• FY2021 will be affected by impact of Covid-19 spread resulting into a wash-out Q1FY21. With recovery started flowing in
(especially in tier-III and IV towns), FY2022 is expected to witness strong bounceback. Fall in VAM prices would help
margins continue rise.
• Launch of premium products in core categories, foray into new categories (largely consumer-centric), wider distribution
reach and expansion into international markets remain key growth drivers in the medium to long term.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Pidilite-Aug07_2020_3R_StockIdea.pdf

2020
STOCk UPDATE EQUITY FUNDAMENTALS
Price Target/ Upside

Recommendation Reco Price
Date Company Report Type (%)
(Rs.)
Latest Chg Latest Chg
July 01, 2020 Finolex Cables Ltd. Stock Update HOLD  291 325 
Summary
• We reiterate our Hold rating with a revised PT of Rs. 325, due to muted outlook in user industries.
• Finolex posted lower revenues for Q4FY20 led by weak performance in electrical and communication business, with a
decline in OPM y-o-y. Net profit was higher due to higher other income and lower ETR.
• We expect slowdown in construction and postponement of projects by the Government to limit its revenue growth along with
shortage of skilled labourers in the near term to weigh on performance.
• Company focuses on containing costs and enhances manufacturing efficiencies. Capex plans remains intact attributable
towards backward integration and capacity expansion helping enhancing revenues at full capacity utilization.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Finolex-Jul01_2020.pdf
July 01, 2020 Arvind Limited Stock Update BUY  33 43 

Summary
• Q4FY2020 revenue fell by 11.7% y-o-y due to COVID-19 disruptions; revenue grew by 6.7% for January-February and
OPM declined by just 27 bps to 9.6% in Q4FY2020 due to lower operating leverage (despite a significant fall in gross
margins).
• Efficient working capital management helped Arvind reduce net debt by Rs. 248 crore in FY2020; we expect balance sheet
to remain stable in FY2021 though operating performance is likely to be sluggish during H1FY2021.
• FY2021 to be impacted by COVID-19, faster recovery in export markets, good growth in garment volumes and sustained
growth in AMD business will help company post good recovery in FY2022; soft cotton prices to help margins sustain.
• We maintain our Buy rating with a revised PT of Rs. 43 due to discounted valuation of 6.6x its FY2022E earnings and 4.1x
its FY2022E EV/EBITDA (trading at a discount of ~28% since its listing last year).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Arvind-July01_2020.pdf
July 01, 2020 Oil and Natural Gas Corporation Ltd. Viewpoint BOOK OUT - 81 - -
Summary
• We drop our coverage on ONGC and recommend Book Out as valuations are pricing in a crude oil price of $50/bbl (as
compared to current Brent price of $42/bbl) and expect profitability of gas business to be stressed amid weak domestic gas
prices.
• Q4FY20 net loss stood at Rs. 3,098 crore (versus PAT of Rs. 4,240 crore in Q4FY19) due to impairment charge of Rs.
4,899 crore and a forex loss of Rs. 1,113 crore partially offset by a deferred tax benefit of Rs. 1,642 crore. Adjusted
standalone PAT of Rs. 802 crore (down 81.1% y-o-y) was below our estimates.
• For FY2020, ONGC’s consolidated reported PAT declined sharply by 64% to Rs10907 crore due to impairment charge of
Rs. 8,025 crore and an inventory loss of Rs. 1,003 crore for its subsidiary HPCL.
• We expect the gas business to report losses in FY2021 given expectation of further downward revision in domestic gas
prices to $1.9-2.1/mmBtu for H2FY2021E as against break-even gas price of $3-3.5/mmBtu.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ONGC-Jul01_2020.pdf
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EQUITY FUNDAMENTALS STOCk UPDATE
(Rs.)
July 08, 2020 Polyplex Corporation Limited Viewpoint POSITIVE  536 15% 
Summary
• Stay positive on Polyplex Corp (PCL) and expect a 15% upside as valuation of 4.6x FY22E EPS is at a 45% discount to
historical average PE, given earnings growth visibility (expect 16% PAT CAGR over FY20-FY22E), robust balance sheet
and healthy dividend yield of 4%.
• Higher exposure to consumer staple packaging (71% of sales) and increased focus on health & hygiene packaging bodes
well for BOPET volumes. Recent BOPET capacity expansion to drive 7% volume CAGR over FY20-FY22E.
• Sharp fall in PTA and MEG prices (key raw material for BOPET films) and lagged impact in correction of BOPET prices
bodes well for margin in Q1FY2021.
• Steady rise in share of specialty films in revenue mix (33% in FY2020 versus 24% in FY2017) to structurally drive margin in
medium to long term.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Polyplex-July08_2020.pdf
July 09, 2020 Tata Consultancy Services Stock Update HOLD  2,204 2,250 
Summary
• We downgrade TCS to Hold from Buy with a revised PT of Rs. 2,250.
• Q4 was weak due to supply-side constraints and subdued demand; OPM severely lagged estimates, pulling down PAT by
12.9%.
• Management expects revenue to recover from Q2FY2021E as supply-side constrains evaporate and demand surges for
digital infrastructure solution core transformation; deal wins remained strong.
• Though FY2021 looks to be a weak year, we assume strong revenue growth in FY2022E given pent-up demand and market
share gains.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCS-July09_2020.pdf
July 10, 2020 Sadbhav Engineering Stock Update BUY  49 75 

Summary
• We maintain our Buy rating on Sadbhav Engineering Limited (SEL) with a revised PT of Rs. 75, factoring lower valuation of
its listed subsidiary Sadbhav Infrastructure Projects Limited (SIPL).
• SEL reported weak execution during Q4FY2020, led by issues plaguing Right of Way in HAM projects and COVID-19 led
lockdown. Adjusted for exceptional gain, SEL posted standalone net loss.
• Management expects to revert to normal quarterly revenue run-rate from Q3FY2021 and strong jump in revenue in FY2022.
Stake sale in assets leads to meaningful de-leveraging.
• Merger of SIPL with SEL isexpected to complete by March 2021. Receives appointed dates for all HAM projects.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sadbhav-July10_2020.pdf


(Rs.)
July 14, 2020 Wipro Stock Update HOLD  225 250 
Summary
• We maintain our Hold rating on Wipro with a PT of Rs. 250 given low visibility on growth recovery.
• Wipro reported constant currency (CC) revenue decline of 7.5%, in-line with our expectations; margins improved 146bps q-
o-q to 19.1% , resulted in 9% beat in net profit.
• Management expects stability would return in communication, consumer and technology vertical in Q2FY2021E, which
together contribute 34.5% of the total revenue; margin likely to remain in narrow band in Q2FY2021.
• Though new CEO would focus on a potential turnaround strategy, we believe it would be a tough task given existing
execution issues, absence of large-deal engines and challenging demand environment.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wipro-July14_2020.pdf
July 15, 2020 Infosys Stock Update BUY  831 920 

Summary
• We maintain our Buy rating on Infosys with a revised price target of Rs. 920.
• Infosys reported better-than-expected results on all financial fronts despite supply-side constraints, with strong deal wins
and FCF generation; EBIT margin improved by 150 bps q-o-q to 22.7%, way ahead of our estimates.
• Management has resumed guidance with FY2021E revenue growth guidance of 0-2% in CC; margins are likely to be at 21-
23% (EBIT margin was 21.3% in FY2020).
• Even as reduction of IT spending is expected during 2020, Infosys is well poised to gain share in the recessionary
environment and outperform peers in terms of revenue growth in FY2021E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Infosys-July15_2020.pdf
July 15, 2020 Federal Bank Stock Update BUY  50 60 

Summary
• Federal Bank (FB) posted operationally strong performance for Q1FY2020, helped mainly by treasury gains, cost control
and sequentially lower slippages which helped offset elevated provisions and lower fee income.
• The moratorium book (net) now stands at 24%, PCR stands at 58.5% with stressed book at 1.14%, which provides support.
• Management indicated that headwinds would continue and may see a spike in NPAs in Q3, growth outlook is likely to be
cautious.
• We maintain our Buy rating on the stock with an unchanged price target (PT) of Rs. 60.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/FederalBank-July15_2020.pdf
July 16, 2020 L&T Technology Services Stock Update BUY  1,439 1,600 
Summary
• We maintain a Buy on L&T Technology Services (LTTS) with an unchanged PT of Rs. 1,600.
• Q1 revenue met our modest expectations, while margins missed mark; revenue affected by scrapping of aerospace project
and softness in plant engineering vertical.
• Management expects USD revenue to fall 9-10%, as anticipated for FY2021 that translates into a 2.3-3% q-o-q growth for
remaining quarters.
• We expect growth to normalise in FY2022E on account of catch-up effects and strong demand for digital engineering.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LTTS-July16_2020.pdf

(Rs.)
July 16, 2020 Larsen & Toubro Infotech Viewpoint NEUTRAL  2,291 5-7% 
Summary
• We maintain our Neutral stance on L&T Infotech (LTI) given unfavorable risk-reward ratio and expect upside potentialof 5-7%.
• Revenue in-line, margin beat our estimates; however, revenue decline from the top 5 accounts decelerated to 9.8% q-o-q;.
• Despite delay in decision making, LTI won a large deal (TCV of $20 million) with BFS logo in UK. TCV of deal was
significantly smaller compared to usual run-rate in earlier quarters.
• Consistency in deal wins, new logo openings and prudent client mining would position the company in the leader’s quadrant
in term of revenue growth in FY2021.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LTI-July16_2020.pdf
July 17, 2020 HDFC Bank Stock Update BUY  1,099 1,400 
Summary
• HDFC Bank reported Q1FY21 results, with Operational performance largely in line with expectations; PAT was boosted by
higher treasury income even though Core fee income declined.
• Though asset quality deteriorated slightly as GNPA rose sequentially, a confident management stated that moratorium pie
has fallen to ~9% of the total book, which is positive. Balance sheet stays robust, with provision buffer (total provisions at
149% of GNPAs).
• The succession of Mr. Puri, the MD & CEO, will be keenly watched, but the bank has hinted the successor is likely to be an
internal candidate. The bank clarified well on most other uncertainties (recent events, management exits).
• We retain our Buy rating on the stock with unchanged price target (PT) of Rs. 1,400.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFCBank-July17_2020.pdf
July 17, 2020 HCL Technologies Stock Update BUY  623 750 
Summary
• We maintain our Buy rating on HCL Technologies (HCL Tech) with a revised PT of Rs. 750.
• Revenue was inline and margins were ahead of our expectations; deal signings and FCF generation remained strong.
• Management provided revenue growth in the range of 1.5% - 2.5% q-o-q for the remaining quarters, translates -3.3% to
-0.8% revenue growth in FY2021E. It expects EBIT margin to be in the range of 19.5-20.5% for FY2021.
• Strong demand for infrastructure business, higher spending on digital infrastructure and emergence of new business
models is expected to create new growth opportunities for the company.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HCLTech-July17_2020.pdf


(Rs.)
July 17, 2020 Britannia Industries Stock Update BUY  3,784 4,200 
Summary
• Q1FY2020 numbers were strong with revenues growing 26% and OPM stable at 21% (up 634 bps). PAT surged 110% led
by strong operating performance, higher other income and lower tax incidence.
• Hindi-speaking belt performed well with double-digit revenue growth. Adjacent categories (including rusk, bread and
cheese) clocked double-digit revenue growth and higher profitability.
• Sustained demand from in-house consumption and large shift towards branded products and better growth in the rural
markets will help Britannia to maintain growth momentum.
• We have raised earnings estimates by 5% and 4%, respectively, for FY2021 and FY2022 to factor a strong improvement in
OPM. We maintain our Buy rating on stock with a revised price target of Rs. 4,200.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Britannia-July17_2020.pdf
July 17, 2020 ICICI Lombard General Insurance Viewpoint POSITIVE  1,288 15-18% 
Summary
• ICICI Lombard General Insurance (ILGI) reported strong Q1FY2021 results with gross direct premium income (GDPI)
coming higher than expectations and encouraging improvement in combined ratio, and solvency ratio, which was positive.
• ROAE jumped to 25.1% in Q1FY2021 from 20.8% in FY2020 due to strong cost control and better profitability; and solvency
ratio also improved to 2.5x in June 2020 (from 2.17x in March).
• We find the general insurance space attractive with strong growth potential; and ILGI with its focus on higher-margin
business andstrong operating metrics make ILGI an attractive franchise for the long term.
• We maintain our Positive view and see 15-18% upside potential for the stock.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICILombard-July17_2020.pdf
July 17, 2020 L&T Finance Holding Viewpoint NEUTRAL  62 3-5% 

Summary
• L&T Finance Holdings (LTFH) posted weak results for Q1FY2021, where its operational performance was below
expectations, but the company saw a one-time stake sale benefit, which was a one-off.
• Due to the provisions of Rs. 577 crore over and above GS3 provisioning, not only the NS3 declined, but PCR also
increased from 58% to 69%.
• Lower disbursals will impact interest and fee income growth, and higher liquidity on the balance sheet may crimp medium-
term profitability.
• We have fine tuned our estimates for FY2021E and FY2022E and the target multiples. We maintain our view as Neutral on
the stock.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LnTFinance-July17_2020.pdf

(Rs.)
July 17, 2020 Granules India Limited Viewpoint POSITIVE  264 18-20% 
Summary
• We maintain our Positive view on Granules India and expect an upside potential of 18-20%.
• Granules reported an impressive performance for Q1FY21 with revenues at Rs 735.6 cr, up by 23.6% yoy, on the back of a
double digit growth in lucrative PFI and FD segments. PAT at Rs 111.4 cr was up 34% yoy.
• Granules is witnessing strong demand traction across segments, which is expected to sustain going ahead as well. Tapping
new geographies for growth, strong product pipeline, growth in existing core molecules would drive the revenues. Favorable
mix, benefits of operating efficiencies accruing would lead to OPM expansion.
• Management has revised upwards its earnings growth guidance of FY2021 to 30% while it has retained FY2022 guidance
at 25% growth. This compares with earlier guidance of 25% CAGR over FY2020-FY2022.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Granules-July17_2020.pdf
July 17, 2020 Bosch Limited Viewpoint POSITIVE  13,184 18-20% 

Summary
• Bosch would gain from an increase in content per vehicle under the BS-VI emission norms and has a strong order book of
Rs 24,000 cr, which provides visibility for next 2-3 years.
• Bosch has invested heavily into manufacturing of new age sensors, softwares and services to capture emerging areas of
connected and electric vehicles.
• Bosch is adopting a technology-agnostic approach for growth and stated it will recover faster than the automotive industry .
Bosch has a strong technological parentage, debt-free balance sheet and robust return ratios.
• Valuations at 25.7x FY22 earnings are below long term historical average of 31-32x. Hence, we stay positive on the stock
and expect an 18-20% upside from current levels.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Bosch-July17_2020.pdf
July 20, 2020 Hero MotoCorp Stock Update BUY  2,858 3,200 
Summary
• We retain Buy rating on Hero Motocorp (Hero) with revised PT of Rs 3,200. Buoyant rural sentiments would lead to faster
recovery for Hero given its higher rural exposure.
• While near term demand would be impacted by COVID-19; management expects recovery from H2FY21 driven by strong
rural sentiments, pent up demand and preference for personal transport in post COVID era.
• Long term growth levers for 2W industry are intact. Hero is focusing on export markets and premiumisation of product
portfolio to drive growth.
• Valuations at 16.1x FY22 earnings are lower than its long-term historical average. Hero remains our preferred pick in
automotive space.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HeroMoto-July20_2020.pdf


(Rs.)
July 21, 2020 Bajaj Finance Stock Update BUY  3,293 3,800 
Summary
• Bajaj Finance Ltd (BFL) reported mixed Q1FY20 numbers, with tepid business growth, but asset quality improved
sequentially, and the moratorium share fell to 15.7% of AUM from 27% which is a positive.
• Adopting a conservative and prudent provision policy, creating additional reserves will help the bank meet challenges on
asset quality going forward. Hence, an additional Rs. 1,450 crore COVID-19 provisions (total COVID19 provisions stands at
1.7% of AUM as of June 2020) provides comfort.
• Asset quality improved sequentially with gross NPA and net NPA at 1.40% and 0.50% respectively, from 1.61% and 0.65%
in Q4FY20. With a strong balance sheet, robust risk management and prudent management, BFL is a strong franchise for
the long term and is well-placed to ride over medium term challenges.
• We maintain a Buy rating on Bajaj Finance with a revised price target of Rs. 3,800.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinance-July21_2020.pdf
July 21, 2020 Hindustan Unilever Stock Update BUY  2,319 2,550 
Summary
• Q1FY2021 performance was better than our as well as the street’s expectation with revenue and PAT growing by ~4% and
~8%, respectively. Core business performed well with just a 7% decline compared to ours as well as street’s assumption of
12-13% decline.
• OPM was affected by unfavourable mix and higher COVID-19-related expenses. However, the same is expected to recover
in coming quarters as business normalises (skin care and personal care regaining momentum).
• Recovery in rural demand, strong demand for hygiene and nutritional products and market share gains in key categories will
be key revenue drivers in the near term. The company paid special dividend of Rs. 9.5 per share.
• We have raised earnings estimates by ~5% and ~4% for FY2021 and FY2022. We retain our Buy recommendation on the
stock with a revised PT of Rs. 2,550.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-July21_2020.pdf
July 21, 2020 Axis Bank Stock Update BUY  446 585 
Summary
• We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 585.
• Axis Bank posted strong results Q1FY2020 with Operating results better than expectations and adopting a conservative
provision policy and slow growth on business impacted the fee income.
• Notably, the moratorium book has declined to 9.7% from ~26% earlier, which is a positive.
• With a decent CRAR (CET1 of 13.5%) the bank is well capitalised and plans for additional capital raise. If these plans
fructify, it will help improve the capital base and augur well for the bank.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AxisBank-July21_2020.pdf

(Rs.)
July 21, 2020 ICICI Prudential Life Insurance Company Viewpoint POSITIVE  443 18-20% 
Ltd
Summary
• The operational performance of ICICI Prudential Life Insurance (IPRU) was reasonable even as the decline in business was
largely expected, due to the impact of the lockdown during the quarter as well as due to shift in customer preferences.
• Cost management (Cost/TWRP) improved to 14.8% for Q1FY2021 from 17% in Q1FY2020, helped by higher renewal
premium and lower first income premium growth. VNB margin was 24.4% for Q1FY2021 as compared to 21.7% for FY2020,
helped by increased protection mix.
• Going forward, we expect protection and annuity products to continue to see higher growth. We find the insurance space
attractive, given a long runway for growth and believe that players with a strong balance sheet and business metrics would
be able to tide over the crisis.
• We maintain a Positive view on the stock and expect an upside of 18-20%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICIPru-July21_2020.pdf
July 22, 2020 Bajaj Auto Stock Update BUY  2,985 3,500 
Summary
• We maintain Buy rating on Bajaj Auto Ltd (Bajaj) with an upgraded PT of Rs 3,500.
• Bajaj’s operating results were ahead of our as well as street estimates as better product mix, favourable currency
realisations, and cost-control measures led to better-than-anticipated margins.
• Bajaj is witnessing fast recovery in both the domestic (due to strong rural sentiments) as well as overseas markets (due to
opening of economies and bounce back in crude prices). Management has stated demand recovery is faster than expected.
• We have fine tuned our earnings estimates. Valuations at 16x FY22 earnings are lower than long term historical average.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajAuto-July22_2020.pdf
July 22, 2020 HDFC Life Insurance Viewpoint POSITIVE  610 12%-15% 
Summary
• HDFC Life Insurance (HLIC) Q1 FY21 quarter was impacted by the pandemic as expected, however, better premium
recoveries m-o-m were a silver lining, hinting that business is normalizing fast.
• Total annualized premium equivalent (APE) fell by 30% y-o-y in Q1FY21, impacted by a lockdown and weak buyer
sentiment towards ULIPs; but individual protection and PAR showed strong traction.
• Given strong structural fundamentals such as a robust balance sheet, strong brand image and high long-term growth
potential for the Indian insurance industry we see HDFC Life as attractive option for long-term investors. Its inclusion in Nifty
benchmark index is another positive.
• We maintain our Positive view and expect a potential upside of 12-15%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/HDFCLife-July22_2020.pdf


(Rs.)
July 22, 2020 Tata Elxsi Limited Viewpoint POSITIVE  915 18-20% 
Summary
• We stay Positive on Tata Elxsi Limited (TEL) and expect an upside of 18-20%.
• Revenue in-line, margins beat our expectations; constant currency revenue grew 4.1% y-o-y, led by strong growth in non-
automotive verticals.
• TEL’s diversification strategy in service offering (in media and communications and healthcare verticals) and geography (in
the US) has been progressing well and would help the company to tide out the current challenging situation.
• Management expects recovery in revenues from 2HFY2021 led by new deal wins, addition of new logos, anticipated
recovery in auto segment and continued growth momentum in media and medical devices verticals.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TataElxsi-July22_2020.pdf
July 22, 2020 Indian Oil Corporation Ltd Viewpoint POSITIVE  92 25% 
Summary
• We upgrade our view on IOCL to Positive and expect 25% upside given its attractive valuation of 6.1x FY22E EPS (40%
discount to historical average PE and 61% to that of BPCL). Recovery in earnings and high dividend yield of ~8% would
narrow valuation gap with peers.
• We expect strong earnings recovery for OMCs over FY21E-FY22E led by above-average auto fuel marketing margins of
~Rs. 4.5/litre (Rs. 2-2.5/litre historically) and a sharp recovery in petroleum consumption (recovered to ~88% of pre-COVID-
19 levels).
• IOCL is biggest beneficiary of a sharp fall in crude oil prices given high fuel & loss of 8.8% (versus 5.4% for BPCL and 7.2%
for HPCL) that would result into highest improvement in IOCL’s refining margins.
• Sharp 27% correction in IOCL’s stock price in CY2020 YTD ignores potential improvement in earnings prospects over
FY21E- FY22E (we expect standalone EBITDA/PAT to clock CAGR of 29%/19% over FY20-FY22E).
Read report - https://www.sharekhan.com/MediaGalary/Equity/IndianOil-July22_2020.pdf
July 22, 2020 Polycab India Limited Viewpoint POSITIVE  824 14-15% 
Summary
• We maintain our Positive view on Polycab India Limited (Polycab) with 14-15% upside, given attractive valuation post
factoring COVID-19 impact and expecting strong bounce back in FY2022.
• Q1FY2020 revenue declined sharply, which came in below estimates, affected by COVID-19 led shutdown and adverse
operating leverage resulting in lower OPM. Adjusting for write-back of income tax provision and exceptional gain from Ryker
stake acquisition and interest on income tax refund, adjusted PAT came in at Rs. 7.5 crore.
• We expect H2FY2021 to be better than H1FY2021, while demand is likely to normalise over one to two quarters. We expect
Polycab to bounce back in FY2022, owing to its leadership position in key business verticals.
• Polycab’s strong balance sheet and net cash position provide comfort in the present challenging environment.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Polycab-July22_2020.pdf


(Rs.)
July 23, 2020 Bajaj Finserv Stock Update BUY  6,390 7,500 
Summary
• Bajaj Finserv (holding company) saw its consolidated net profit rise by 43.7% to Rs 1,215 crore, while revenue increased
15.6% y-o-y to Rs 14,190 crore in Q1 FY21 mainly helped by strong earnings from its insurance subsidiaries.
• Bajaj Finance (lending subsidiary) saw tepid AUM growth, but asset quality improved q-o-q and moratorium book share
declined to 15.7% (from 27% earlier). Insurance arms saw strong PAT growth helped by lower claims and strong cost
management. Even though Q1 topline was impacted by COVID-19 as expected, pick-up on a month-on-month basis on
premiums is encouraging, reflecting rapid normalisation.
• All subsidiaries are well-capitalised with strong operating metrics, which will enable them withstand and tide over near-term
challenges.
• We maintain our Buy recommendation on Bajaj Finserv with a revised SOTP-based price target of Rs. 7,500.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinserv-July24_2020.pdf
July 23, 2020 Larsen and Toubro Stock Update BUY  916 1,250 
Summary
• We maintain our Buy rating on Larsen and Toubro (L&T) with an unchanged PT of Rs. 1,250, considering undemanding
valuation and healthy fundamentals to ride the current uncertainties.
• L&T’s Q1FY2021 performance remained resilient in the given conditions with inline revenue, marginally lower operating
profit margin (OPM) with estimates, and slip in earnings due to higher interest cost and depreciation.
• Management has refrained from providing any revenue or order inflow guidance as it is too early to quantify the same and
highlighted that the situation is expected to improve in the latter part of FY2021.
• Order book remains strong and diversified. International order book provides cushion despite lower new order prospects
from the Middle East.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnT-July24_2020.pdf
July 24, 2020 Asian Paints Stock Update BUY  1,711 1,987 
Summary
• Though Q1 saw the impact of the April lockdown that hit around 30-40 days of business, sales improved post Unlocking 1.0,
and June saw double-digit volume growth for Asian Paints (APL) in decorative paints segment.
• Sharp recovery in June helped APL post better-than-expected performance in Q1FY2021 with revenues declining by 43%
y-o-y (against street expectation of 55-60%) and OPM standing at 16.6% (as against our as well street expectation of
9.5%).
• We maintain that FY2022 would see strong recovery on back of pent-up demand for painting activities, shift to trusted
brands and higher construction activities.
• We have increased our earnings estimates by 6% and 4% for FY2021 and FY2022, respectively. We maintain our Buy
recommendation on the stock with a PT of Rs. 1,987.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AsianPaint-July24_2020.pdf


(Rs.)
July 24, 2020 ICICI Bank Stock Update BUY  382 485 
Summary
• ICICI Bank posted good numbers for Q1FY2021, where operating performance was better than expectations, even though
higher provisions (partly due to COVID-19) resulted in lower-than-expected PAT. Moratorium book stood at 17.5% (from
30% at Q4FY2020) which is positive.
• Asset quality improves with GNPA/NNPA ratio decreasing by 5 bps/18 bps, respectively, to 5.99%/1.23% vis-à-vis
Q4FY2020. Even gross slippages declined significantly to Rs. 1,160 crore, which was a 20-quarter low.
• The bank is adequately capitalised (Tier-1 at 14.9%) and a successful equity-raising plan will further add to balance sheet
strength. We like the prudent and cautious approach of the bank in building provision buffers, cautious loan book growth,
and healthy capitalisation levels.
• We maintain our Buy rating on the stock with a revised SOTP-based price target (PT) of Rs. 485.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ICICIBank-July24_2020.pdf
July 24, 2020 ITC Limited Stock Update BUY  200 250 
Summary
• Cigarette sales volumes declined by ~38% in Q1FY2021 affected by lockdown (gross revenues fell by 29%); better than
ours as well as street’s expectation of a 50-55% decline.
• Non-cigarette FMCG business grew by 12.2% on comparable basis (18.8% excluding education and stationery segments);
essentials segment grew by 34%.
• Non-cigarette FMCG business will continue to grow strongly while cigarette sales would improve sequentially; Paperboard,
paper & packaging segment (excluding stationery) would perform stably in the coming quarters.
• We have revised our earnings estimates by 4-5% for FY2021/22. We maintain our Buy recommendation on the stock with
revised PT of Rs. 250.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ITC-July24_2020.pdf
July 24, 2020 Biocon Viewpoint POSITIVE  415 10-12% 

Summary
• Biocon clocked a strong performance for Q1FY21. Revenues at Rs 1672 cr grew 14.6% YoY and were ahead of estimates.
Strong double digit growth in the Biologics as well as generics segment aided the topline growth. PAT at Rs 152 cr was
ahead of estimates.
• Biocon is expected to significantly benefit from the opportunities in the Biologics space. Strong traction in existing products,
healthy new product pipeline, innovative products / therapies, tapping new geographies would be key growth drivers.
• Management expects to have a total of 8 biosimilar products in the US markets by end of FY2022 as against 3 now. It has
retained its guidance of $1bn revenues from the biologics segment by FY2022.
• Possible listing of subsidiary - Biocon Biologics provides a significant value unlocking opportunity. We stay Positive on the
stock and expect an upside of 10-12%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Biocon-Jul24_2020.pdf


(Rs.)
July 24, 2020 JSW Steel Limited Viewpoint POSITIVE  205 20% 
Summary
• JSW Steel’s consolidated EBITDA at Rs. 1,341 crore (down 55% q-o-q) was above our estimates, led by higher-than-
expected EBITDA/tonne at Rs. 4,806/tonne (down 41% q-o-q) due to lower cost of production by 4% q-o-q.
• Sales volume declined by 23.6% q-o-q to 2.8 million tonne (mt) with export volume at 1.8mt (57% of volumes) but weak
domestic volumes at 1.2 mt (43% share in sales volume), which was impacted by COVID-19 led lockdown.
• FY2021E sales volume guidance of 15mt implies 9% y-o-y growth in 9MFY2021E. Likely higher domestic steel price, lower
coking coal price, improvement in revenue mix (with ramp-up in domestic sales), and higher plant utilisation to aid earnings
recovery.
• Valuation of 6.1x its FY2022E EV/EBITDA is at 12% discount to its historical average one-year forward multiple EV/EBITDA
multiple of 7x. Hence, we maintain our Positive view on JSW Steel and expect a 20% upside potential.
Read report - https://www.sharekhan.com/MediaGalary/Equity/JSW_Steel-Jul24_2020.pdf
July 27, 2020 Coromandel International Limited Stock Update BUY  790 1,000 
Summary
• We maintain our Buy rating on Coromandel International with unchanged PT of Rs. 1,000.
• Company set to report healthy revenue and earnings CAGR of 11% and 17.5%, respectively, over FY2020-22E.
• Coromandel to speed up investments in high-growth crop protection business which is expected to enhance profitability.
• Q1 performance strong with revenue, EBITDA and PAT rising 51%, 111% and 4x y-o-y, respectively.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Coromandel-July27_2020.pdf
July 27, 2020 Marico Stock Update BUY  350 420 

Summary
• Marico’s Q1FY2021 performance was better than our as well street expectations, largely led by ~300 bps expansion in
consolidated OPM, resulting in 4% growth in adjusted PAT to Rs. 340.8 crore (better our expectation of Rs. 283.4 crore).
• Domestic sales volume decreased by ~14%, led by 11% volume decrease in parachute rigid packs and 30% volume
decline in value-added hair oil (VAHO) portfolio. Saffola edible oil registered 16% volume growth.
• The month of June saw recovery in sales of Parachute rigid pack and VAHO portfolio, Saffola edible oil is expected to
maintain the good run, while margin expansion is expected to sustain due to benign input prices and lower ad spends.
• We have revised upwards our earnings estimates by ~6% and ~4% for FY2021 and FY2022, respectively. We maintain our
Buy recommendation on the stock with a revised price target of Rs. 420.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Marico-July27_2020.pdf
July 27, 2020 Persistent Systems Stock Update BUY  856 1,000 
Summary
• We retain our Buy rating on Persistent Systems Limited (PSL) with a revised PT of Rs. 1,000.
• PSL delivered a strong set of numbers, with beat on all financial fronts; deal signings remained strong.
• We believe growth momentum in Technology Services would continue in FY2022Eled by large deal signings, new logo
addition, prudent client mining strategy and a healthy deal pipeline.
• Cash and cash equivalents account for 23% of its current market capitalisation; strong balance sheet and potential strong
earnings growth potential provide us comfort on the stock.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Persistent-July27_2020.pdf


(Rs.)
July 27, 2020 Supreme Industries Stock Update BUY  1,173 1,350 
Summary
• We maintain our Buy rating on Supreme Industries Limited (SIL) with a revised PT of Rs. 1,350 assigning a higher multiple
to factor in early cycle recovery.
• Considering healthy demand prospects during FY2021-22E, the company intends to incur a capex of Rs 350 crores to
expand capacities mainly in piping segment and packaging film segment.
• We believe that the company will be able to deliver revenue and earnings CAGR of 6.9% and 10.7% respectively during
FY2020- 22E, despite the company’s reluctance to provide annual guidance given the COVID-19 crisis.
• Though the COVID-19 led lockdown impacted Q1FY2020 results adversely with revenue, EBITDA and PAT witnessing a
decline of 26.7%, 30.0% and 53.5% respectively performance remained above our expectation.
Read report - https://www.sharekhan.com/MediaGalary/Equity/SupremeInd-July27_2020.pdf
July 27, 2020 Kotak Mahindra Bank Viewpoint POSITIVE  1,322 22-25% 
Summary
• Kotak Mahindra Bank (KMB) posted mixed results for Q1FY2021 with operational performance largely in line with
expectations; the decline in moratorium book to 9.65% (from 26% earlier) is encouraging.
• Net interest income (NII) at Rs. 3,723 crore increased by 17.8% y-o-y/ 4.6% q-o-q despite advances book posting a decline
of 1.9% y-o-y and 7.2% q-o-q, indicating the cautious stance of the management on growth.
• Management has taken a conservative stance and kept under moratorium only those loans that were viable, allowing rest to
be treated normally; also 80% of the moratorium book is secured, which indicates lesser NPA pressure going forward.
• We have maintained our Positive view on the bank and expect 22-25% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/KotakMahindra-July27_2020.pdf
July 27, 2020 Tech Mahindra Viewpoint POSITIVE  664 18-20% 

Summary
• We stay Positive on Tech Mahindra and expect a potential upside of 18-20% in the next 10-12 months.
• Performance was better than expected on all parameters; however, deal signings of $290 million were lower as compared
to average quarterly deal signings of $450-500 million.
• Though 5G spends have been delayed, capex on that front is expected early next year as large global telecom players have
already committed to strengthen their networks.
• We expect margin to improve in FY2022E led by structural changes, reduction in sub-contractor costs, better synergies
among portfolio companies and utilization improvement.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TechMahindra-July27_2020.pdf

(Rs.)
July 27, 2020 Nippon Life India Asset Viewpoint POSITIVE  270 15%-17% 
Management
Summary
• Nippon Life India Asset Management’s (NAM’s) quarterly results were mixed; topline met expectations but rise in mark-to-
market (MTM) income helped other income growth, which lead to better-than-expected PBT and PAT performance.
• Quarterly AAUM (average assets under management) was lower by 12.1% q-o-q Rs 180,100 crore. AUM recovery was
impacted by COVID-19in recent months.
• Focus on retail segment (especially in B-30 town/cities) will boost AUM traction; and with benefits of scale, operating ratios
are expected to improve.
• We stay Positive on the stock and expect an upside of 15-17%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Nippon-July27_2020.pdf
July 27, 2020 Atul Limited Viewpoint POSITIVE  5,028 9-11% 

Summary
• We stay Positive on Atul Limited and expect an upside of 9-11%.
• As global players shift their manufacturing and vendor bases outside China, opportunities will open up for Indian and
Southeast Asian companies over the medium to long term.
• After the lockdown lifted, utilisation levels have gradually improved. We have fine-tuned our estimates and expect the
company to deliver moderate revenue and PAT CAGR of 4.2% and 4.6% during FY2020-22E.
• Q1FY2020 was impacted owing to COVID-19- led lockdown that dragged down revenue, EBITDA and Adjusted PAT being
lower by 36.5%, 34.0% and 19.9%, respectively.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Atul-July27_2020.pdf
July 27, 2020 TCI Express Limited Viewpoint POSITIVE  722 13-15% 
Summary
• We retain our Positive view on TCI Express Limited (TCI) with 13-15% upside potential believing it to achieve its higher-
than- industry growth rate once normalcy returns.
• TCI’s net earnings were affected due to COVID-19 led disruption leading to steep decline in net revenues and OPM.
However, the company surprised positively on a strong rise in gross margins which are expected to sustain going ahead.
• Weak Q1 led to management revising revenue guidance for FY2021 to remain flat vis-à-vis 10-12% y-o-y growth earlier.
However, the OPM is slated to rise 200 bps y-o-y due to high gross margins and fixed cost reductions.
• The two new sorting centers are on schedule with commercial operations expected to start before end of the current
calendar year.
Read report - https://www.sharekhan.com/MediaGalary/Equity/TCI-July27_2020.pdf


(Rs.)
July 28, 2020 UltraTech Cement Stock Update BUY  4,136 5,000 
Summary
• We maintain Buy on UltraTech Cement (UltraTech) with a revised PT of Rs. 5,000, factoring revision in earnings estimates
for FY2021E-FY2022E and marginally revising upwards our valuation multiple.
• In Q1FY2021, UltraTech reported strong beat on operational performance, largely driven by reduction in key input costs.
Reduction in net debt was aided by reduction in working capital requirements.
• The company has increased capex for FY2021 by Rs. 500 crore to Rs. 1,500 crore, highlighting confidence in improving
demand environment going ahead.
• Expect rural demand to sustain on back of good monsoon while labourers returning to project sites and the government
kickstarting infrastructure investments to aid in revising non-trade demand from Q3FY2021.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UltraTech-July28_2020.pdf
July 28, 2020 V-Guard Industries Stock Update BUY  165 200 
Summary
• We retain Buy on V-Guard Industries Limited (V-Guard) with a revised PT of Rs. 200 considering its attractive valuation and
healthy fundamentals to ride the current uncertainties.
• V-Guard reported lower-than-expected earnings on account of loss of revenue affected by nation-wide lockdown led by
COVID-19 pandemic and higher fixed cost.
• Management expects near term to be uncertain as localised lockdowns are hampering discretionary demand despite long
term positives. Focus remains on maintaining healthy cash position, cost rationalisation, and expediting digitisation.
• The company’s strong balance sheet, cash flow and reputed brand along with strong business fundamentals will help the
company emerge stronger from the near-term weak environment.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/V-Guard-July28_2020.pdf
July 28, 2020 Bharat Electronics Limited Stock Update BUY  97 110 
Summary
• We reiterate our Buy rating on Bharat Electronics Limited (BEL) with a price target of Rs. 110.
• MOU with the Airport Authority of India to create opportunities in the global civilian airport business.
• Order intake increased by 72.2% y-o-y and 19.3% q-o-q to Rs 3,419 crore while order book remains healthy at Rs. 53,752
crore (4.2xits FY2020 revenue), which provides sustainable revenue visibility.
• Q1FY20 performance adversely impacted owing to lower execution led by COVID-19 led crisis resulting in revenue,
EBITDA and PAT being lower by 21%/59%/75%y-o-y respectively.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BEL-July28_2020.pdf


(Rs.)
July 28, 2020 Sanofi India Viewpoint POSITIVE  7,581 20-22% 
Summary
• Sanofi India (Sanofi) reported a strong operational performance for Q2CY2020. Revenues de-grew 5% YoY as some
therapy segments reported a weak performance due to Covid related restrictions. Margins at 24.9% expanded remarkably
380 bps yoy. PAT at Rs 135 cr grew 38.8% YoY.
• Higher Share of Chronic, which provides a stable stream of revenues coupled with sustained traction from the top brands
and margin expansion, due to favorable mix, to result in double digit earnings growth over CY2019-CY2021E.
• High growth visibility, low exposure to highly regulated markets, strong balance sheet with no debt, minimal capex, healthy
cash position, and sturdy cash conversion cycle would continue to support premium valuations.
• Sanofi’s Sales and PAT are expected to grow by 5% and 13% CAGR over CY2019-CY2021. We retain Positive view on the
stock with 20-22% upside over 10-12 months.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Sanofi-July28_2020.pdf
July 28, 2020 IndusInd Bank Viewpoint POSITIVE  527 12-15% 

Summary
• IndusInd Bank posted stable numbers considering impact of COVID-19; operational numbers are mixed, advances declined
q-o-q, but fall in moratorium share to 16% (including MFI book) was positive.
• Asset quality was stable; GNPA ratio at 2.53% was up by 8 bps q-o-q, NNPA at 0.86% was down 5 bps q-o-q.
• We believe the bank is in a much better position vis-à-vis its balance sheet, and valuations are more reasonable.
• We therefore upgrade our view on the stock to Positive and expect an upside of 12-15%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/IndusInd-July28_2020.pdf
July 28, 2020 RBL Bank Viewpoint NEUTRAL  182 3-5% 

Summary
• RBL Bank posted mixed results for Q1FY2021 with operational results better than expectations but witnessed margin
erosion. On the other hand, asset quality improved (and moratorium book declined), which were positive.
• However, concerns on growth and credit cost remain and business outlook continues to be beset with uncertainties.
• Total exposure to BB or below loans is ~7.5% (stable on a sequential basis); and even though the said book is secured, we
view that as a significant proportion and a key monitorable going forward.
• We maintain our Neutral rating on the stock.
Read report - https://www.sharekhan.com/MediaGalary/Equity/RBL-July28_2020.pdf


(Rs.)
July 29, 2020 Maruti Suzuki Stock Update BUY  6,186 6,925 
Summary
• We upgrade our recommendation on Maruti Suzuki to “Buy” from “Hold” earlier with PT of Rs 6,925.
• Maruti’s Q1FY21 operating results were lower than estimates impacted by negative operating leverage due to steep fall in
volumes & higher fixed cost incidence due to lower production. However, higher other income led to company posting lower
than expected loss.
• Going ahead, the company is witnessing strong pick up in the demand with retails reaching 85-90% of Pre-COVID levels.
Moreover, demand shift towards entry level cars is likely to benefit Maruti which has stronghold in the segment..
• We have raised our earnings estimates to factor in the demand recovery and also raised our target multiple from 25x to 27x.
At CMP, stock is trading at 24.1x FY22 earnings which is close to its long-term historical average. However, given the early
recovery cycle scenario in which Maruti currently is in, valuation multiples can expand above historical averages.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Maruti-July29_2020.pdf
July 29, 2020 TVS Motors Stock Update BUY  402 470 
Summary
• TVS Motors (TVSM) Q1FY21 operating results were lower than estimates as negative operating leverage due to steep fall
in volumes impacted the margins. However, tax credit during the quarter led to lower than expected loss during the quarter.
• On the demand front TVSM is expecting strong recovery in both domestic (due to strong rural sentiments) and exports (due
to opening up of economies and steady oil prices). TVS expects to reach Pre-COVID 19 volumes by September 2020.
• Cost control initiatives coupled with pick up in volumes would drive margin improvement for TVSM. We expect TVSM to
deliver strong 17% earnings CAGR over FY20-22 period.
• Valuations at 20.1x core FY22 earnings are lower than long term historical average of 23x. Hence, we retain Buy rating on
the stock with PT of Rs 470.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TVSMotor-July29_2020.pdf
July 29, 2020 Colgate Palmolive (India) Viewpoint POSITIVE  1,448 16-18% 
Summary
• Colgate Palmolive (India) Limited’s (Colpal’s) Q1FY2021 revenue fell by just 4%, affected by supply disruptions in the
beginning of the quarter; domestic sales volumes fell by ~8%, whereas volumes for toothpaste declined by just 2-3%.
• Gross margin remained flat, lower advertisement spends and operating efficiencies resulted in a ~200 bps expansion in OPM.
• The company has seen recovery in sales volume in the toothpaste category in most markets.
• We have fine-tuned our earnings estimates for FY2021/FY2022 to factor in better-than-expected operating performance.
We maintain our Positive view on the stock with 16-18% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Colgate-July29_2020.pdf

(Rs.)
July 29, 2020 Castrol India Limited Viewpoint POSITIVE  116 20-22% 
Summary
• Q2CY20 operating profit plunged 66.5% y-o-y to Rs. 95 crore, below our estimates but ahead of consensus estimates.
Sales volume declined 47% y-o-y to 29 million litres amid lockdown; EBITDA margin fell 792bps y-o-y to 19.4% due to
negative operating leverage and as weak rupee drove up input costs.
• Volumes in personal mobility segment improving since June-end; realisations to rise as dealer support scheme ended in
June. Management maintained long-term volume growth guidance of 5-6% annually.
• Alliance with Jio-BP retail fuel network provides strong volume growth opportunity as it will be sole supplier of lubricants for
network of 1,400 fuel outlets (plan to expand to 5,500 retail outlets over next five years).
• Attractive valuation of 13.9x CY21E EPS (close to decade low valuation) despite strong cash position, FCF/dividend yields
of 8%/5% and RoE of ~50-52%. We stay Positive view on Castrol and expect a 20-22% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Castrol-July29_2020.pdf
July 29, 2020 Quess Corp Limited Viewpoint POSITIVE  344 18-20% 
Summary
• Q1FY2021 performance was affected by COVID-19-led lockdown. However, performance bettered our expectation with
revenues flat at Rs. 2409.4 crore and OPM at 5.4%.
• Corporate initiatives are on track with 20% cut in indirect cost over Q4; continued focus on cross sales (accounted for 68%
of revenue in Q1).
• Strong collections dragged down total receivables to Rs. 921 crore from Rs. 998 crore in Q4FY2020 (OCF/EBIDTA at
152%); net debt reduced by Rs. 100 crore to Rs. 254 crore in Q1FY2021.
• We have fine-tuned our earnings estimates for FY2021/22. Strengthening of balance sheet and reduction in corporate
governances issue remain key re-rating triggers. We stay Positive and expect an 18-20% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Quess-July29_2020.pdf
July 30, 2020 Reliance Industries Stock Update BUY  2,109 2,400 
Summary
• Consolidated operating profit of Rs. 16,875 crore (down 22% y-o-y) met our estimates with broadly in-line GRM of $6.3/bbl
and petrochemical margin of 13.8%. Jio’s EBITDA rose 17% q-o-q to Rs. 7,281 crore led by higher ARPU of Rs. 140 and
better margin of 44% (versus 41.8% in Q4FY20).
• Retail EBITDA fell 47.4% y-o-y to Rs. 1,083 crore and EBITDA margin of 3.4% (versus 5.4% in Q1FY2020) as 50% of
stores were shut in Q1FY21 resulting in adverse mix (most profitable Fashion & Lifestyle stores stayed shut for most part of
quarter).
• Recent fund raising strengthens RIL’s balance sheet; potential monetisation of stake in retail business and Jio’s likely listing
could create long-term value for investors.We expect PAT to clock CAGR of 20% during FY20-FY22E driven by digital and
retail.
• We maintain our Buy rating on RIL with revised SoTP based PT of Rs. 2,400 (to reflect higher value for retail and higher net
cash).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/RIL-July30_2020.pdf


(Rs.)
July 30, 2020 Housing Development Finance Corporation Stock Update BUY  1,811 2,113 
Summary
• HDFC Limited’s results were mixed with operational results better than expected (benefitted with stake sale proceeds) and
sequentially improved asset quality..
• Loans opted under moratorium 2 were at 22.4% of the overall book (from 27% as under moratorium 1 earlier). The decline
in the moratorium book is lower than that observed with other peers.9+.
• HDFC had a one-time gain from stake sale in subsidiaries, which resulted in Rs. 1,241 crore benefit; and utilising the same,
the corporation made provisions of Rs. 1,199 crore (Additional provisions for COVID-19).
• We maintain our Buy rating on the stock with an unchanged PT of Rs. 2,113.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFC-July30_2020.pdf
July 30, 2020 Bharti Airtel Stock Update BUY  553 710 
Summary
• We maintain our Buy rating on Bharti Airtel with a revised price target (PT) of Rs. 710.
• Broadly in-line performance, while net loss widened owing to incremental provision for the AGR dues; ARPU surprised
positively despite challenges; data traction remained strong.
• ARPU would continue to improve on the back of continued up-gradation from 2G to 4G, increasing post-paid subscribers
and segmentation price hike for the premium users. EBITDA is expected to grow at a CAGR of 24% over FY20-FY22E.
• We remain positive on Bharti, considering its steady EBITDA performance, scope for growth in the number of 4G
subscribers and improving free cash flows. Further, we believe that the valuation gap with Reliance Jio is set to narrow
down further.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BhartiAirtel-July30_2020.pdf

July 30, 2020 Max Financial Services Stock Update BUY  563 665 
Summary
• Max Financial Services (MFS) posted strong numbers for Q1 FY2021, with better-than-expected operating performance,
and an encouraging EV growth with market share gain despite the impaired collections because of the lockdown is notable.
• Despite COVID-19 challenges, Max Life outperformed industry and gained more than 217 bps share from FY20 in the
private market. Also, the 13th-month persistency ratio for Q1 FY2021 was stable at 82% (as compared to 83% in FY2020),
which indicates good customer retention and effective client communication.
• MLIC has strong bancassurance relationships, and the same is now looking more stable due to the recent agreement
between the two entities.
• We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 665.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Max-July30_2020.pdf


(Rs.)
July 30, 2020 Torrent Pharmaceuticals Limited Stock Update HOLD  2,437 2,780 
Summary
• Torrent Pharmaceuticals Limited (Torrent) reported strong performance for Q1FY2021 with results ahead of estimates.
Revenues grew 1.7% YoY While PAT at Rs 321 cr grew by a sturdy 49% YoY.
• Torrent derives 55-60% of its sales collectively from India and Brazil and has outperformed industry growth in both these
markets. Management expects to sustain the traction in both these markets backed by new product launches.
• Torrent has submitted responses for all its three plants to the USFDA and is awaiting a response from the regulator. Timely
and successful USFDA clearance is critical from a growth perspective.
• Due to recent run up in stock prices and persisting uncertainties, we see limited upside in the stock price and have retained
our Hold recommendation with an unchanged PT of Rs. 2,780.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TorrentPharma-July30_2020.pdf
July 30, 2020 Gateway Distriparks Limited Stock Update BUY  80 110 
Summary
• We maintain Buy on Gateway Distriparks Limited (GDL) with an unchanged SOTP-based PT of Rs. 110 due to attractive
valuation and improving growth and profitability outlook of its key verticals.
• For Q1FY2021, GDL reported better than expected net earnings led by strong outperformance on OPM front. Rise in
imports, savings in haulage charges and accrual of ground-rent led to strong beat on operational profitability.
• GDL continues to focus on de-leveraging with proposed rights issue. Post which, it will be undertaking capex plan for its rail
vertical.
• Snowman logistics is expected to fare well with improving operational profitability and capacity expansion plan.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gateway-July30_2020.pdf
July 30, 2020 Dabur India Limited Viewpoint POSITIVE  493 14-16% 
Summary
• Q1FY2021 performance was affected by supply disruptions, resulting in a ~10% decline in domestic volumes..
• Recovery started in June with mid-single digit growth (that sustained in July as well). The rural market grew by 1% as
against a 13% decline in urban market. Health supplements, over-the-counter (OTC) and ethical products along with new
launches (6% of overall revenue) saw strong demand.
• Recovery in rural demand, strong acceptance for healthcare and sanitisation products and gradual recovery in core
products such as shampoos, hair oils and home-care items would help Dabur post decent revenue growth in the near term;
OPM expansion to sustain.
• We have raised earnings estimates by ~8% and 5% to factor in better sales volume and higher-than-expected margins in
the coming quarters. We stay Positive on the stock and expect a 14-16% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Dabur-July30_2020.pdf


(Rs.)
July 30, 2020 Mastek Limited Viewpoint POSITIVE  523 18-20% 
Summary
• We stay Positive on Mastek Limited and expect an 18-20% upside from current levels.
• The company reported strong quarterly performance, attributed to full quarter revenue contribution from Evosys acquisition;
added 48 new customers during the quarter.
• Management expects recovery in revenue growth in 2HFY2021, led by ramp up of deal wins, increased spending on Buy
Online, Pick-up In Store (BOPIS) by US retail customers, and higher demand for cloud migration.
• The stock is trading at reasonable valuation of 9x its FY2022E EPS; net cash represents 14% of Mastek’s current mcap;
Mastek would receive ~Rs. 200 crore as consideration from the recent deal of Majesco USA.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Mastek-July30_2020.pdf
July 31, 2020 State Bank of India Stock Update BUY  191 280 
Summary
• State Bank of India (SBI) posted encouraging results with asset-quality improvement on a sequential basis, and
performance aided by one-time gain of Rs. 1,539 crore from stake sale benefit of the subsidiary.
• Asset-quality performance was robust and GNPA at 5.44% (down 209 bps y-o-y and 71 bps q-o-q) improved significantly.
• Moratorium book was at 9.5% of term loans versus 23% earlier, of which ~2% was comprised of AA and AAA rated
corporate borrowers, which is encouraging.
• At <1x its FY2022E BVPS, valuations are attractive. We maintain our Buy rating on the stock with a revised PT of Rs. 280.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SBI-July31_2020.pdf
July 31, 2020 Zydus Wellness Stock Update BUY  1,607 1,780 
Summary
• Zydus Wellness (ZWL) Q1FY2021 performance was better than our and street’s expectation on the back of strong recovery
in the performance of Sugar Free and Complan brands. Also, the performance is better considering the discretionary nature
of portfolio.
• Revenue and PAT decreased by 13.4% and 14.6% respectively (OPM decreased by 121 bps to 22.8%)..
• Strong recovery in Sugar Free and expected improvement in the sales of Complan due to the new launches and
introduction of small packs would help drive better performance in the coming quarters. Lower input prices will drive
margins in the coming quarters.
• We have raised our earnings estimates for FY2021 and FY2022 to factor in better than expected performance. We maintain
our Buy recommendation with a revised price target of Rs. 1,780.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Zydus-July31_2020.pdf
July 31, 2020 UPL Limited Stock Update BUY  478 550 
Summary
• We stick to our Buy rating on UPL Limited (UPL) with a revised price target of Rs. 550.
• We expect the company to report revenue and earnings CAGR of 8.7% and 20%, respectively, during FY2020-2022E.
• Management eyes revenue growth of 6-8%, EBITDA growth of 10-12% and net debt-equity ratio of 2x during FY2021E.
• Q1FY21 revenue fell by 1% as volumes sold stayed unchanged, adjusted EBITDA margin improved by 508 bps to 21.8%;
adjusted PAT increased by 70.7%.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/UPL-July31_2020.pdf

(Rs.)
July 31, 2020 Sun Pharmaceuticals Industries Stock Update HOLD  532 575 
Summary
• Sun Pharmaceuticals Industries (Sun Pharma) reported a healthy performance for Q1FY2021. Revenues declined 9.4%
yoy While operating margins were almost flat, though were ahead of estimates. The adj PAT after minority interest grew
43% YoY.
• The domestic business is expected to grow at a healthy pace, backed by new launches and growth in the chronic portfolio.
• The US business continues to witness competitive pressures leading to sustained price erosion. Also ramp up in US
specialty business is slow. USFDA approval on Halol plant is a key monitorable as management has submitted it
sresponses to the regulator.
• Uncertainties persisting around the US business and India business (acute therapy) could impact the growth prospects.
Consequently, we hold back from taking a constructive view on the company and retain our Hold recommendation.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SunPharma-July31_2020.pdf
July 31, 2020 SRF Limited Viewpoint POSITIVE  3,792 14-16% 

Summary
• We stay Positive on SRF and expect an upside of 14-16%.
• Company’s capex momentum is intact as growth opportunities are significant over medium to long term.
• Healthy performance in speciality chemicals to continue, while demand environment for fluorochemicals to improve in
H2FY2021, increased volumes from expanded capacities to drive demand for packaging films, while further easing of
lockdown to enhance performance of technical textiles.
• Healthy growth in chemicals restricted overall revenue decline to 12.4% y-o-y, while significant improvement in profitability
in packaging films business improved adjusted EBITDA margin to 24.7% y-o-y resulting in Adjusted PAT growth of 21.5% y-
o-y.
Read report - https://www.sharekhan.com/MediaGalary/Equity/SRF-July31_2020.pdf

July 31, 2020 Laurus Labs Viewpoint POSITIVE  934 18-20% 
Summary
• Laurus Labs (Laurus) has reported an impressive performance for Q1FY21. Topline grew sturdily by 77% YoY to Rs 974 cr
backed by a 232% growth in FDF business. PAT grew multifold to Rs 171 cr compared to Rs 15 Cr in Q1FY20.
• Laurus sees momentum in the formulations business to sustain. Laurus to expand formulations capacities by 80% over next
two years. This would segment growth..
• Synthesis business is also on track to grow in double digits, while the API business is expected to benefit from emerging
opportunities worldover. Operating leverage, favorable mix and process efficiencies would support margins expansion.
• Given the strong topline growth prospects, visibility on earnings and a healthy return ratios and low debt-equity ratio would
support the multiple expansions. We maintain our Positive view and expect an upside of 18-20%.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Laurus-July31_2020.pdf


(Rs.)
July 31, 2020 Mahindra Logistics Limited Viewpoint POSITIVE  298 18-20% 
Summary
• We retain our positive view on Mahindra Logistics Limited (MLL) with an upside potential of 18-20% considering its
attractive valuation and an expected bounce back in earnings from FY2022.
• Q1 net revenues were affected by COVID-19 led disruption in the user industry. However, it has been able to maintain its
gross margins. MLL posted a net loss due to low fixed cost abruption led by shrinkage of revenues.
• MLL exited Q1FY2021 with around 80% of normal revenue run-rate with strong m-o-m improvement during May 2020 and
June 2020. It added key clients while expanded services in both new and existing customers.
• MLL is expected to benefit in the post COVID era along with strong rebound in auto sector expected in FY2022.
Read report - https://www.sharekhan.com/MediaGalary/Equity/MahindraLogistics-July31_2020.pdf
July 31, 2020 Alicon Castalloy Viewpoint POSITIVE  245 18-20% 

Summary
• Alicon Castalloy Ltd (Alicon) Q1 results missed our estimates as lockdown due to COVID-19 led to significant loss of
production. Operating deleverage due to sharp fall in topline led loss at EBIDTA level.
• However, Alicon is expected to outperform the automotive industry going ahead, driven by recent order wins & new BS6
product introductions. OPM to improve 100 bps over the next two years driven by operating leverage.
• Long term export orderbook of Rs 810 cr is intact. Execution would commence from end of FY22 which provides robust
medium term outlook.
• At CMP, stock is trading at 10.6x FY22 earnings which is lower than its long term historical average. Hence, we retain
positive view on the stock and expect 18-20% upside.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Alicon-July31_2020.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.
EQUITY FUNDAMENTALS SECTOR UPDATE
Sector View
Date Sector Report Type
Latest Chg
July 02, 2020 Automobiles Sector Update Neutral 
Summary
• Automotive volumes further build upon the recovery witnessed in May 2020. A further easing of lockdown and improvement
in economic activities pushed up sales volumes in June 2020.
• Rural centric segments witnessed marked improvement. Tractor sales surprised positively with double-digit growth of 12%
(expectations of flat sales). 2W sales recovered to 65% of normal (broadly in line with 70% of normal sales expected).
• PV’s being urban centric & more of a discretionary purchase reported a slower recovery of 45% of normal sales (marginally
better than expectations of 40% of normal sales). CV sales recovered to 40% of normal (better than our estimates of 30%
of normal) driven by LCV.
• While automotive sales are improving driven by enhanced business activity and pent up demand, sustained recovery is
some time away. Rural plays such as 2W would recover fast. We retain Neutral view on the sector. Prefer rural centric
stocks such as M&M, Hero Motocorp and Bajaj Auto (among OEMs); Balkrishna Industries and Mayur Uniquoters (among
ancillary companies).
Read report - https://www.sharekhan.com/MediaGalary/Equity/Auto_Monthly_Review-Jul02_2020.pdf
July 06, 2020 Q4FY2020 Banking and Financial Services Results Review Sector Update - -
Summary
• In Q4FY20, the overriding monitorable was the impact of the COVID-19 pandemic, which affected business growth and
asset quality / provisions for the BFSI sector.
• Larger banks reported a moratorium rate of 25-35%, while public sector banks (PSBs) like BoB and BoI reported higher
(40+%) moratorium rates but other PSBs like SBI and PNB reported lower moratorium rates of 23% and 30% which
compare well with larger private sector banks.
• Well-managed private banks, SBI and high-rated NBFCs would continue to outperform peers due to better capitalisation
and better book quality.
• Preferred Picks: ICICI Bank, SBI, HDFC Bank, HDFC Life, Kotak Mahindra Bank, ICICI Lombard, ICICI Prudential
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Banking Financial_Services_Results_review-Jul06_2020.pdf
July 06, 2020 Q4FY2020 Consumer Goods Results Review Sector Update Positive 
Summary
• Q4FY2020 was subdued for consumer goods companies as supply chain disruptions amid the lockdown in the last few
days of March affected sales volume of most companies under coverage; volumes for companies under our coverage
declined by 3-22%.
• Soft raw-material and packaging prices aided gross margin to expand for most companies, whereas lower operating
leverage resulted in lower OPM for most companies; our universe’s PAT declined by 5.4% and OPM fell by 71 bps to
25.6%.
• Q1FY2021 is expected to be a disrupted quarter for consumer goods companies (except for food companies), whereas
recovery is anticipated from Q2FY2021 (largely for companies catering to essential categories). Overall, FY2021 is
expected to remain muted, while recovery is anticipated in FY2022.
• Preferred picks: Asian Paints, Hindustan Unilever, ITC, and Tata Consumer Products.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Consumer_Goods_Results_review-Jul06_2020.pdf
 Upgrade   No change   Downgrade 

 Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report
SECTOR UPDATE EQUITY FUNDAMENTALS
Sector View
Latest Chg
July 06, 2020 Q4FY2020 Consumer Discretionary Results Review Sector Update Neutral 
Summary
• Shutdown of malls/stores during the lockdown phase had a severe impact on the business of branded and apparel
companies at the end of Q4FY2020.
• Revenue of Sharekhan’s consumer discretionary universe declined by 10-40%, affected by no footfalls during the lockdown
period. Profitability was severely affected by lower operating leverage (as retail/entertainment companies have higher direct
cost element).
• FY2021 will be affected by no sales during a large part of the pandemic and lower demand due to cut in discretionary
spends. However, demand is expected to recover in FY2022 in the backdrop of stable economy and normal business
operations.
• Preferred picks: Trent, Jubilant Foodworks, Titan, Relaxo Footwears and Bata India
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Consumer_Discretionary_Results_review-Jul06_2020.pdf
July 06, 2020 Q4FY2020 Oil & Gas Results Review Sector Update Positive 
Summary
• In Q4FY2020, city-gas distribution (CGD) companies reported mixed results with a strong margin expansion given low gas
prices; however volumes were down for IGL and MGL amid COVID-19 led lockdown. Gujarat Gas outperformed peers with
6.8% q-o-q volume growth
• OMCs clocked losses due to massive inventory and forex loss but core GRM was robust; Upstream PSUs disappointed
with sharp decline in earnings given lower oil & realisation and impairment of oil & gas assets.
• We maintain our positive stance on gas companies and OMCs. LT volume growth intact for CGD/gas utilities led by
structural demand drivers like regulatory push and low gas prices; recovery in petroleum demand and strong auto fuel
marketing margin bodes well for OMCs.
• Preferred picks - Reliance Industries, Mahanagar Gas, Gujarat Gas, IGL, GAIL (India) and Petronet LNG.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Oil_Gas_Results_review-Jul06_2020.pdf
July 06, 2020 Q4FY2020 Infrastructure/Cement/Building material Results Sector Update Positive 
Review
Summary
• The cement sector reported healthy net earnings growth led by positive surprise on OPM while volume declines on
anticipated line.
• Infrastructure companies reported better than expected execution and OPM while couple of companies have been affected
by higher interest on mobilization advances. OB remains strong.
• Building materials gets affected by weak sales during peak period of March 2020. Net earnings were aided by improvement
in gross margins.
• Preferred picks - UltraTech, The Ramco Cements, JK Lakshmi Cement, KNR Construction, PNC Infratech, Pidilite Industries
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Infra_Cement_Results_review-July06_2020.pdf

Sector View
Latest Chg
July 06, 2020 Q4FY2020 Capital Goods Results Review Sector Update Positive 
Summary
• Project-based companies reported weak execution, as anticipated due to COVID-19 led disruptions. Order inflows
remained weak although order backlog remained healthy.
• Selected consumer-facing companies posted strong net earnings growth despite weak macroeconomic environment and
low consumer sentiments further aided by a lower effective tax rate.
• Expect order tendering to remain muted during FY2021. Companies’ focus to remain on maintaining liquidity, de-leveraging
and containing working capital requirements.
• In project based segment, we prefer L&T, Bharat Electronics, KEC and Kalpataru Power while in consumer durable space
we prefer Polycab, Dixon Technologies and KEI Industries.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Capital_Goods_Results_review-July06_2020.pdf
July 07, 2020 Q1FY2021 IT Results Preview Sector Update Neutral 

Summary
• We expect tier-I IT companies to report revenue decline of 5-8% q-o-q on constant currency basis for Q1FY2021, owing to
supply constraints and material deterioration of demand.
• Margins are expected to decline on a sequential basis owing to revenue decline and pricing pressure, partially offset by (1)
currency tailwind, (2) lower travel and administrative costs, and (3) limited wage inflation.
• Though FY2021E is going to be a weak year, we expect strong revenue growth in FY2022E because of pent-up demand,
higher adoption of digitalisation, and increasing spends on core transformation.
• We stay Neutral on the IT sector. Multiples of select leading companies have touched close to pre-COVID multiples;
Preferred picks: Infosys, HCL Tech, Tech M and L&T Technology.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_IT_Results_Preview-Jul07_2020.pdf
July 07, 2020 Q4FY2020 Automobiles Results Review Sector Update Neutral 
Summary
• Q4FY2020 was difficult for the automotive industry as lockdown due to COVID-19 and inventory correction ahead of BS6
emission norms impacted the demand. Auto universe’s revenues (ex-TAMO) fell by 24% yoy.
• Operating margins fell 100 bps y-o-y to 11.8% as higher discounting and negative operating leverage more than offset the
benefits of soft commodity prices. Net Profit for the universe fell 31% yoy.
some time away. Among automotive, two-wheeler and tractor segments would witness a faster recovery due to higher
exposure to rural markets.
• Preferred Picks - We prefer two-wheeler players (Hero MotoCorp, Bajaj Auto) and agri theme plays (M&M, Balkrishna
Industries) due to strong rural sentiments.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Auto_Results_review-Jul07_2020.pdf

Sector View
Latest Chg
July 07, 2020 Q4FY2020 Pharmaceuticals Results Review Sector Update Neutral 
Summary
• The topline for Sharekhan’s pharma universe grew by a healthy 8.2% y-o-y, while adjusted PAT was up 12.7% y-o-y for
Q4FY2020. The results reflected the effect of Covid 19 disruptions.
• Management commentaries suggest that the performance in Q1FY21 is likely to be weaker as the plant utilization levels
have been lower due to lockdown. A near normal utilization levels were achieved towards May end.
• Though valuation of most pharma companies seems reasonable, the risk of regulatory overhang would stay and could
result in a likely stress in the U.S. business. Hence we maintain our neutral stance on the sector. However, in the
pharmaceutical sector, we like the API space and domestic focused MNC companies and have a constructive view on this
space.
• Our preferred picks - Divis Laboratories, Laurus Labs, Granules, Sanofi India, Abbott India
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY2020_Pharma_Results_review-Jul07_2020.pdf

July 07, 2020 Q4FY2020 Results Review Sharekhan Special - -
Summary
• Q4FY2020 overshadowed by COVID-19 led disruptions that hit most sectors in March; aggregate PAT of Sensex
companies fell 6% y-o-y; however, duress more visible in ~20% fall in aggregate net profits of Nifty companies with a much
higher representation of global commodities like metals and energy.
• Earnings growth to stay stressed; accordingly, consensus estimates for FY21/22 have seen double-digit downgrades in
past couple of months; post earnings downgrades and sharp bounceback from March lows, Sensex valuations aren’t cheap
anymore at 17-17.5x FY2022 earnings. Further upside would depend on pace of economic recovery.
• Preferred Picks (structural growth companies with proven track record and healthy balance sheets): ICICI Bank, Bajaj
Finance, Asian Paints, Bharti Airtel, Reliance Industries, Tata Consumer, Bata India, Divis Labs
• Value Picks (near-term concerns but valuations attractive): Hero Motocorp, SBI, L&T, Castrol India, JK Lakshmi Cement,
ITC
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q4FY20ResultsReview-July07_2020.pdf
July 10, 2020 Q1FY2021 Automobiles Results Preview Sector Update Neutral 
Summary
• Automobile universe (ex-TAMO) revenues are expected to decline sharply 68% yoy impacted by lockdown on account of
COVID-19.
• Margins are expected to decline sharply 940 bps yoy to 3.7% on account of negative operating leverage due to steep fall in
volumes. Auto universe is expected to report loss in Q1FY21.
• Automotive demand improving as economy is opening up; however sustained recovery is some time away. Rural plays
such as 2W and tractors would stage faster recovery.
• We retain Neutral view on the sector. Prefer rural centric stocks such as M&M, Hero Motocorp and Bajaj Auto (among
OEMs); Balkrishna Industries and Mayur Uniquoters (among ancillary companies).
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_Automobiles_ResultsPreview-July10_2020.pdf

Sector View
Latest Chg
July 10, 2020 Q1FY2021 Consumer Goods Results Preview Sector Update Positive 
Summary
• Production shut-downs and supply disruption caused by a lockdown in March-end and first half of April would drag
revenues of most companies in our coverage (barring food companies such as Britannia and Tata Consumer Products) in
Q1FY2021.
• Benign input prices to lift gross margins y-o-y. However, lower operating leverage to pull down OPM for few stocks in the
universe during the quarter.
• Production normalises in June once lockdown eases in most part country; consumer goods sales would normalise from
Q2FY2021 and volumes would recover from H2FY2021 with strong agri-economy and government sops reviving rural
demand.
• Preferred Picks - We like companies with strong brands in essential categories, strong cash flows and good dividend payout
- Asian Paints, HUL, Tata Consumer Product and ITC.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_ConsumerGoodsResultsPreview-July10_2020.pdf

July 10, 2020 Q1FY2021 Oil & Gas Results Preview Sector Update Positive 
Summary
• In Q1FY2021, OMCs are expected to report stellar earnings led by higher marketing margins and inventory gains, partially
offset by lower refinery throughput and marketing sales volume amid the COVID-19 led lockdown. Upstream PSUs to report
loss due to a sharp fall in oil & gas realisations and lower volumes.
• CGD players are likely to see volumes fall by 50-55% y-o-y given lower CNG and I/C PNG demand due to limited vehicular
movement and shutdown of industries due to lockdown amid COVID-19. We expect CGD players’ margins to be cushioned
by lower gas prices offset by negative operating leverage.
• We stay positive on gas companies and OMCs. Long-term volume growth outlook remains intact for CGD/gas utilities led
by structural gas demand drivers like regulatory push and low gas prices; recent sharp recovery in petroleum demand and
auto fuel marketing margin bodes well for OMCs’ earnings.
• Preferred picks - Reliance Industries, Mahanagar Gas, Gujarat Gas, IGL, GAIL (India) and Petronet LNG.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_OilGas_ResultsPreview-July10_2020.pdf
July 10, 2020 Life Insurance Sector Update Positive 

Summary
• Private life insurers reported a 10.5 % y-o-y decline for total first-year premium for June month but the decline was along
expected lines (due to the COVID-19 lockdown impact) and notably was an improved performance on month-over-month
basis.
• Individual non-single premium declined in June for most private sector players - ICICI Life saw a 45.5% y-o-y decline (was
53% y-o-y drop in May), HDFC Life saw a decline of 3.6% y-o-y (was -32.5% y-o-y). Several players such as Kotak Life,
Max Life, and Bajaj Allianz Life saw increase on a y-o-y basis.
• Going forward, we expect Protection and Annuity products to see higher growth, but we expect weak growth in ULIPs and
savings segment.
• Our preferred picks in pecking order are Bajaj Finserv (holding company of Bajaj Allianz Life), HDFC Life, ICICI Prudential,
and Max Financials – who have strong balance sheet and healthy operating metrics.
Read report - https://www.sharekhan.com/MediaGalary/Equity/LifeInsurance-July10_2020.pdf

Sector View
Latest Chg
July 13, 2020 Q1FY2021 Banking and Financial Services Results Sector Update - -
Preview
Summary
• For Q1FY2021 earnings, we expect market share consolidation in favour of strong private banks (well-capitalised; ones in
both retail/corporate) and SBI; sequentially lower slippages expected; however, AUM growth is likely to be muted for PSU
banks and most NFBCs.
• Insurance companies and AMCs may see earnings being impacted, however life and general insurers are witnessing
improved traction, which was encouraging.
• Several banks and NBFCs have reported their moratorium book reducing, which is a positive trend; management
commentary on moratorium and collection efficiency will be a key monitorable.
• Preferred Picks: ICICI Bank, SBI, HDFC Bank, HDFC Life, Kotak Mahindra Bank, and ICICI Prudential.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_BFSI_ResultsPreview-July13_2020.pdf
July 13, 2020 Q1FY2021 Capital Goods & Engineering Results Sector Update Positive 
Preview
Summary
• The COVID-19 pandemic and the subsequent lockdown is likely to weigh on the capital goods sector,which is set to witness
a decline in net earnings, led by lower execution and production disruption due to the lockdown.
• Consumer goods/electrical-based companies are expected to witness demand disruption in a seasonally strong quarter,
impacting sales and net earnings.
• With the lockdown lifting and operation resuming gradually, key monitorables are outlook on ordering activity/execution,
labour issues and intensity of working capital for project-based companies and demand recovery across different regions
for the consumer durable/electrical companies.
• In the project based segment, we prefer L&T, Bharat Electronics, KEC and Kalpataru Power while in consumer durable
space we prefer Polycab, Dixon Technologies and KEI Industries.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_CapitalGoods_ResultsPreview-July13_2020.pdf
July 13, 2020 Q1FY2021 Pharmaceuticals Results Preview Sector Update Neutral 
Summary
• Though the COVID-19 pandemic looms over Q1FY21 results of our universe of pharmaceutical companies, they are
expected to be relatively less impacted. The nationwide lockdown has resulted in plant shutdowns by companies, but a
near normal operations were achieved towards end of May 2020..
• The revenue growth of the universe is expected to moderate to 2.2% y-o-y as the demand is likely to be muted across the
Indian and global markets. Elevated cost pressures would result in a contraction in margins, thus leading to a drop in the
universe’s earnings on a y-o-y basis.
• Valuations of most of the pharmaceutical companies seem reasonable. The risk of a likely stress in the US business is
apparent. We stay Neutral on the sector. However in the sector we prefer API players and India focused MNC companies
and have a constructive view on this space.
• Preferred Picks: Divis Laboratories, Laurus Labs, Granules, Sanofi India, Abbott India.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_Pharma_ResultsPreview-July13_2020.pdf

Sector View
Latest Chg
July 13, 2020 Q1FY2021 Cement/Infrastructure/Building Material Results Preview Sector Update Positive 
Summary
• The cement, infrastructure and building material segments were affected by the COVID-19 led nationwide lockdown since
March and gradually recovered m-o-m in May 2020 and June 2020.
• Cement volumes likely to decline, while higher realisations and lower power & fuel costs should help players absorb fixed
costs. Infrastructure and building materials players to be severely affected on net earnings front.
• We expect all three sectors to see healthy pick-up in business from Q3FY2021 followed by a strong bounce back in FY2022.
• We stay Positive on the sector. Preferred picks - UltraTech, The Ramco Cements, JK Lakshmi Cement, KNR Construction,
PNC Infratech, Century Plyboards and Pidilite Industries.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_Cement_ResultsPreview-July13_2020.pdf
July 14, 2020 Q1FY2021 Consumer Discretionary Results Preview Sector Update Neutral 
Summary
• Q1FY2021 will be a wash-out quarter for branded apparel, retail and entertainment companies as malls and stores were
shut for most part of Q1. Revenue to plummet by 60-90% for most companies in our coverage.
• Higher fixed costs and lower sales to result in lower operating leverage, which will hit profitability of most companies.
• FY2021 will be affected by COVID-19 led lockdown; demand to decline as discretionary spends reduce. A recovery is likely
in FY2022 as economy stabilises and pent-up demand materialises for apparel and footwear products.
• Preferred picks - We stay selective; prefer Titan Company, Trent, Jubilant Foodworks, Bata India and Relaxo Footwears.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_ConsumerDisc_ResultsPreview-July14_2020.pdf
July 14, 2020 Q1FY2021 Agri Inputs and Speciality Chemical Results Preview Sector Update Positive 
Summary
• Healthy monsoons to drive performance of companies in agri-input space while poor demand offtake amid COVID-19 and
negative operating leverage is to impact performance of companies in speciality chemicals space.
• Demand for agri-inputs to remain buoyant led by encouraging progress of monsoons, while that of specialty chemicals is
expected to improve as lockdown restrictions are eased and business operations turns normal in a quarter or two.
• Agri input and speciality chemical companies are trading at reasonable valuations and most of them have different triggers
for which the stock can potentially provide further upside from current levels.
• Preferred Picks: PI Industries, UPL, Coromandel International, Aarti Industries, Atul Limited, SRF.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Q1FY2021_Agri_ResultsPreview-July14_2020.pdf

Sector View
Latest Chg
July 20, 2020 Cement Sector Update Positive 
Summary
• Cement stocks continue to remain in focus led by consistent rise in capacity utilisation levels m-o-m, sustained healthy
pricing discipline, and contained key input costs. Cement demand is driven by the rural sector and government-backed
infrastructure projects.
• Cement production and cement dispatch through Indian railways highlight better-than-expected improvement in capacity
utilisation during May 2020 and June 2020, respectively.
• Cement prices (ex-South) marginally dipped m-o-m in July 2020 with onset of the monsoon season. The southern region
witnessed a steep rise of ~7% m-o-m.International pet coke price remained flat, while domestic pet coke and diesel prices
inched up during July 2020.
• We stay Positive on the sector. We have a Buy rating on UltraTech, Ramco, and JK Lakshmi Cement, while we have a Hold
rating on Shree Cement and Grasim.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Cement-July20_2020.pdf
July 28, 2020 Automobiles Sector Update Neutral 

Summary
• Automotive volumes would continue on path to recovery with sales expected to improve from previous month of June 2020
improvement in economic activities on account of unlock measures & pent up demand.
• Rural sentiments and increased preference for personal transport to drive recover in PV and 2W. PV expected to reach
75% of normal volumes compared to 45% in June. 2W segment expected to reach 80% of normal volumes as compared to
65% in June.
• Tractors expected to grow by 5% in July (impacted by production constraints) as compared to 13% growth in June 2020.
CV segment expected to witness slower recovery with sales at 50% of normal in July 2020 as against 42% in June.
some time away. We retain Neutral view on the sector. Preferred Picks - M&M, Balkrishna Industries, Hero Motocorp and
Bajaj Auto in OEM; Mayur Uniquoters and Bosch in ancillary space.
Read report - https://www.sharekhan.com/MediaGalary/Equity/Automobile-July28_2020.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.
EQUITY TECHNICALS TREND & VIEW
Close to hurdles
Daily view
 The Nifty witnessed a correction recently from 11341
to 10882
 On the way down, the index breached a crucial rising
trendline drawn from the March low
 After the first leg of decline the index moved up to
retest the recent high of 11341
 Failure near this level can trigger the next leg of decline
 The daily momentum indicator is heading lower
towards the equilibrium line
Weekly view
 The index formed a Dark Cloud Cover - a bearish

candle on the weekly chart for the last week of July
 This makes the recent high of 11341 a crucial barrier
 On the downside, the Nifty couldn’t breach the rising
trendline from the March low on the weekly chart
 Thereon, the index bounced back in the first week of
August
 Thus, the swing low of 10882 becomes a key support
to watch out for
Monthly view
 The Nifty had formed a multi-month Ending Diagonal

pattern and broke out on the downside in March
 Consequently Nifty witnessed a sharp fall in March
that retraced 61.8% of the rally from 2011 to 2020.
 From the key Fibonacci level the index saw a steep
recovery, which is around 50% from the March lows
 The index is facing resistance at 78.6% retracement
of the January-March fall, which is near 11380
 Unless this hurdle is surpassed on closing basis the
Nifty can get into a correction phase
View Target Support Resistance Reversal

Down 10000 10000 11380 11380
MONTHLY VIEW EQUITY DERIVATIVES
Nifty could consolidate between 10800-11500

In line with the June series, the July series saw a
Top five stock futures with the highest open interest in
blockbuster rally mainly in the Nifty. The Nifty clocked the current series are:
gain of ~8%, while the Bank Nifty saw some selling
OPEN INTEREST
pressure on the higher side at round 23000 levels, which FUTURES
(Rs. Cr)
is now a stiff resistance for the Bank Nifty and due to
RELIANCE 8,404.98
which it closed the series with just gain of 0.65%. On the
open interest front, we saw a reduction in the position in HDFC 5,438.08
the Nifty as series-on-series, it decreased by ~2.5% ICICIBANK 4,868.08
indicating short covering, however rollover was on the BHARTIARTL 4,546.76
higher side at ~77.59% versus the three-month average
INFY 4,279.81
of 75.30% with a negative rollover cost of nine points
Source: Sharekhan
indicating short rollover to the next series. While on the
Bank Nifty front Series on Series we saw addition in open
interest of around 4% while rollover was on the lower Top five stock options with the highest open interest
side at 75.30% versus the three-month average of in the current series are:
81.11%. OPEN INTEREST
OPTIONS
(Rs. Cr)
On the other hand, FII action has been positive
RELIANCE 8,749.47
throughout the July series. In the cash market, FIIs were
net buyers to the tune of Rs. 3,448 crore. While on the SBIN 2,498.62
derivative front in Index Futures they are net long with ICICIBANK 2,140.65
around 38,000 contracts and they have carried forward
BHARTIARTL 1,708.45
more longs then shorts in the August series.
HDFCBANK 1,705.01
MARKET WIDE VS NIFTY ROLLOVER ACTIVITY: Source: Sharekhan
Nifty Market Wide

100.00%
90.00%
80.00%
View for August series:
70.00%
60.00% On the options front, in the August monthly expiry the
91.94%
90.46%
buildup is quite scattered. In the nearest strike 11000

89.89%
87.85%
86.69%
85.24%
50.00%
78.93%
77.59%
77.65%
75.67%
40.00%
71.29%
62.12%
30.00% PE is highest in terms of open interest with 30,63,000

20.00%
10.00%
shares followed by 10000 PE with 28,66,650 shares. On
0.00%
the call side, the 11500 CE has the highest open interest
Aug
Apr
May
Jul
Jun
Mar
with 21,06,600 followed by the 12000 strike, which has

Rollover highlights: 19,30,875 shares.
 Nifty Futures began the July series with 1.14 crore Put-call Ratio (PCR) in August series started on the
shares versus 1.01 crore shares in open interest. higher side at 1.49 level, currently at 1.60. Volatility
index has
 The July series started with Rs.91,631 crore versus been continuously cooling off and is currently in a tight
Rs. 80,794 crore in stock futures, Rs. 11,685 crore band between 21-25% levels. Seeing the above data,
versus Rs. 9,502 crore in Nifty futures & Rs.84,291 we feel after two consecutive series of sharp jump, Nifty
crore versus Rs. 71,580 crore in index options and
could see some consolidation in the range of 10800-
Rs.17,812 crore versus 12,589 crore in stock options.
11500 levels. There is lot of long accumulation seen in
 Nifty July month rollover was higher at 78.93% versus
the index around 10600-10800 levels and hence could
75.67%.
act as a major support.
 Market-wide rollover was at 92.01% versus 89.89%.
CURRENCY FUNDAMENTALS MONTHLY VIEW
Currencies: Euro gains as EU leaders agree on coronavirus recovery package

Key points
 India CPI data showed inflation accelerated by 6.09% in June 2020 CURRENCY LEVELS IN JULY (IN RS.)
compared to forecast of 5.30% Currency High Low Close % Monthly Change
 European Union leaders agreed a EUR1.8 trillion budget and
coronavirus recovery package USDINR 75.60 74.50 74.81 -0.92
 German GDP data showed the economy contracted by 10.1% in EURINR 89.06 83.82 88.74 4.72
Q2CY2020 compared to -2.0% in Q1CY2020
GBPINR 98.38 92.95 98.06 5.80
 US Advance GDP data showed the economy shrunk by 32.9% in
Q2CY2020 compared to -5.0% in Q1CY2020 JPYINR 71.71 69.15 71.45 1.90
 Euro area Flash GDP data showed the economy contracted by 12.1%
in Q2CY2020 compared to -3.6% in Q1CY2020
Spot INR Movement in July Spot INR Movement in July
USDINR JPYINR
EURINR GBPINR
75.7 71.5
88.5 97.5
75.5 71
87.5 96.5
75.3 70.5
70
86.5 95.5
75.1 85.5
74.9 69.5 94.5
69 84.5 93.5
74.7
83.5 92.5
74.5
02-Jul-20
01-Jul-20
03-Jul-20
04-Jul-20
USD-INR: CMP - Rs. (74.98)
Indian Rupee appreciated by 0.92% in the previous month on weakness in dollar and rise in risk appetite in global markets. Market
sentiments improved on optimism over positive development in vaccine and on hopes of huge fiscal stimulus across major economies to
support economic growth. Further, FII inflows supported Rupee. However, sharp gains were prevented on disappointing macroeconomic
data and ongoing concerns over rising cases of COVID-19. India’s CPI data showed inflation accelerated by 6.09% in June 2020
compared to forecast of 5.30%. Inflation remained above the mid-point of Reserve Bank of India’s (RBI) target range of 2-6%.
Outlook: Indian Rupee is expected to trade with a negative bias amid disappointing macroeconomic data and surge in crude oil
prices. Nikkei Markit Manufacturing PMI data showed activity in the sector contracted for four consecutive months and Nikkei Services
PMI data showed activity in the sector contracted for the fifth consecutive month. Further, RBI said inflation will remain elevated
until Q2FY2021 and real GDP growth is forecast to remain in the negative territory in the first half and overall FY2021. Traders fear
that fast-spreading Coronavirus outbreak may slow down the pace of reopening of the economy, hurting economic recovery. Traders
will remain cautious ahead of Jackson Hole Symposium. However, sharp fall may be prevented on weakness in greenback and FII
inflows. The expected trading range in the near term is 74.00-76.10..
EUR-INR: CMP - Rs. (88.78)

Euro appreciated by 4.82% in the previous month on weakness in Dollar. Further, Euro gained strength as European Union leaders
agreed a EUR1.8 trillion budget and coronavirus recovery package to revive economies. Leaders agreed to multiyear budget of around
Euro 1.1 trillion and Euro 750 billion recovery package. Recovery package includes Euro 390 billion of grants and Euro 360 billion of
loans.
Outlook: Euro currency is expected to trade with a positive bias amid weakness in Dollar and improved economic data from Euro
area. Additionally, Euro will gain strength as European Central Bank (ECB) has kept its interest rates and emergency coronavirus
stimulus programme unchanged and EU leaders have agreed to coronavirus recovery package. Further, traders will remain cautious
ahead of Eurogroup meetings, ECB monetary policy meeting minutes, and Jackson Hole Symposium. The expected trading range in the
near term is 87.25-90.30.
GBP-INR: CMP Rs. (98.45)

British pound appreciated by 5.54% in July on weakness in Dollar and rise in risk appetite in global markets. Further, Bank of England’s
(BOE) Chief Economist, Andy Haldane suggested ‘V’ shaped recovery. Additionally, UK Chancellor of the Exchequer announced Pound
30 billion of tax cut and extra spending to support the economy. However, sharp upside was capped on Brexit uncertainties.
Outlook: Pound is expected to correct from its five-month high on expectation of disappointing economic data from the country.
Further, market fears that UK will fail to seal the trade deal with EU by the end of 2020 deadline, as little progress has been made.
However, sharp fall may be cushioned on weakness in dollar. Further, BOE has kept its benchmark interest rate unchanged at 0.1% and
its bond buying programme at Pound 745 billion. Furthermore, central bank said that negative interest rate would be a less effective
tool than others at this time. Additionally, central bank now expects the impact of the pandemic on the economy will be lower than
initially estimated. The expected trading range in the near term is 97.0 – 99.30.
JPY-INR: CMP Rs. (71.0)

Yen appreciated by 1.88% in the previous month on weakness in Dollar and upbeat economic data from Japan. Further, demand for a
safe haven increased on concerns that rising Coronavirus cases across the globe may hurt global economic recovery and rising tensions
between the US and China. Additionally, Bank of Japan (BOJ) has left its monetary policy unchanged. BOJ has kept its deposit rate at
-0.1%.
Outlook: Japanese Yen is expected to trade with a positive bias on weakness in Dollar and as demand for a safe haven may increase
on fears that rising coronavirus cases will dampen global economic recovery. Worries over Brexit uncertainty and rising tensions
between the US and China will support Yen. Traders will remain cautious ahead of negotiations on US second stimulus package
between Republicans and Democrats and Jackson Hole Symposium. The expected trading range in the near term is 70.0-72.20.
CMP as on August 07, 2020
TREND & VIEW CURRENCY TECHNICALS
USD-INR: Drifting lower GBP-INR: Breaking Boundaries

 During July, USD-INR traded within a narrow range (75.62-74.48)
 In July, the pair broke out of the three month narrow range and
and closed on a negative note for the second consecutive month.
closed around the highs for the month.
 The price action for July was along expected lines considering the
 On account of the sharp rise the Bollinger bands have started to
sharp run up between Jan, 2020 and March 2020. Since April, the
pair has been consolidating with a negative bias. expand and prices are tagging the upper band which indicates that
 Momentum indicator on the monthly chart is showing loss of the positive momentum is likely to continue.
positive momentum. Weekly momentum indicator has a negative  Monthly and weekly momentum indicator has a positive crossover
crossover indicating correction in the near term before resuming which is a Buy signal. Thus, both price and momentum indicators
uptrend. are in sync and pointing towards continuation of positive
 Considering the weak price action and loss of positive momentum momentum.
we expect the pair to slip down till 72.00-71.40 levels which  We shall continue to maintain a positive stance on the pair and
coincides with support zone of 20 month moving average and the expect it to target levels 102 where resistance in the form of
lower end of the rising channel.
downward sloping resistance trend line is placed.
KST (4.99944)9
8
7
6
5
4
3
2
1
0
-1
-2
-3
USDINR - INDIAN RUPEE (74.9160, 75.3070, 74.7457, 74.8900, -0.02600)81.0

80.5
80.0
79.5
79.0
78.5
78.0
77.5
77.0
76.5
76.0
75.5
75.0
74.5
74.0
73.5
73.0
72.5
72.0
71.5
71.0
70.5
70.0
69.5
69.0
68.5
68.0
67.5
67.0
66.5
66.0
65.5
65.0
64.5
64.0
63.5
63.0
62.5
62.0
61.5
61.0
60.5
D 2017 M A M J J A S O N D 2018 M A M J J A S O N D 2019 M A M J J A S O N D 2020 M A M J J A S O N D 2021 M A M J J
KST (5.92510)
15
EUR-INR: Up, Up and Away 10
 In July, EURINR witnessed buying interest throughout the month 0
-5
and closed positive for the third consecutive month. -10
GBPINR (98.0800, 98.8190, 97.5200, 98.4500, +0.43700)
 During the month, it surpassed the swing high resistance of 86.17 110
and has closed above that which is a Bullish sign. The Bollinger 105
Bands are expanding with prices moving along the upper band 100
indicates positive momentum likely to continue. 95
 Monthly and weekly momentum indicators have a positive 90
crossover which is a buy signal. Thus both price and momentum 85
indicators are pointing towards a northward move for the pair. 80
 During the month, we expect the pair to trade with a positive bias 75
and target levels 92.00 which is the previous swing high. 70
65
2013 2014 2015 2016 2017 2018 2019 2020 2021
JPY-INR: Bulls have upper hand

 In July, the pair traded with a positive bias and closed on a positive
note. It managed to break out of the narrow range however, Bulls
could not hold on and the pair slipped back into the range.
 On the weekly charts, we can observe that the pair has been
holding on to the rising support trendline and heading higher. The
weekly Bollinger bands are contracting which is often followed by
an expansion.
 Weekly momentum indicator has a negative crossover and hence
it is likely to witness more consolidation before resuming uptrend.
 During the month, we expect the pair to trade with a positive bias
and target levels of 73.27, which is the previous swing high and
above that it has potential to stretch up till 78.50, which is the
equality target.
KST (8.38290)
15
0
10
EURINR (88.2590, 89.1660, 87.9440, 88.9320, +0.70300) -5

5
94
P 93
92
91
90
89
-10
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60
59
58
2013 2014 2015 2016 2017 2018 2019 2020 2021
KST (0.84957)
6
5
4
3
2
1
0
-1
74.5
74.0
73.5
73.0
72.5
72.0
71.5
71.0
70.5
70.0
69.5
69.0
68.5
68.0
67.5
67.0
66.5
66.0
65.5
65.0
64.5
64.0
63.5
63.0
62.5
62.0
61.5
18 25 8 22 29 13 27 3 17 31 14 27 13 20 3 17 1 15 29 12 19 3 17 31 13 27 10 24 1 15 2
ber November December 2020February MarchAprilMayJuneJulyAugust September October
JPYINR (70.7422, 71.1818, 70.3767, 70.9454, +0.18980)
Currency View Reversal Supports Resistances Target

USD-INR DOWN 76.30 74.00 / 72.40 75.60 / 76.30 71.40
GBP-INR UP 93.70 96.90 / 95.50 101.00 / 102.00 102.00
EUR-INR UP 84.00 86.17 / 85.18 91.00 / 92.00 92.00
JYP-INR UP 68.50 70.30 / 69.10 71.87 / 73.30 78.50
PMS DESK PMS FUNDS
PRIME PICKS STRATEGY

OVERVIEW Prime Picks Portfolio Performance
(as of July 2020)
Prime Picks is a multi-cap discretionary PMS scheme.
It aims to outperform the BSE 200 & CNX Mid Cap 100 indices across Duration Prime Picks* BSE 200
market cycles. 1 Month 4.1% 7.8%
Scheme comprises two folios, Quality and Alpha, with a distinct investing 3 Months 8.7% 20.7%
style to offer.
6 Months -10.0% -14.2%
Based on the client risk profile allocation between conservative /moderate
/ aggressive. 1 Year -4.5% -11.6%
It’s a long only fund. Since inception
-4.5% -12.9%
(25 June,2018)
INVESTMENT STRATEGY *Note: Net of Quarterly AMC Fees
*Note: Returns mentioned are weighted average
 Right mix of two different strategies with a high standard of
management and corporate governance through in-depth research Disclaimer: Returns are based on a client’s returns since
by experienced in-house fundamental research team. inception and may be different from those depicted in the
risk disclosure document.
 Aims to leverage on investment opportunities in structural
growth sectors through Quality folio whereas the allocation to more
aggressive Alpha folio would add to superior outperformance across Top 5 Stocks – Prime Picks QUALITY
market cycles. 1 ASIAN PAINTS
 Maintain judicious mix between Quality and Alpha through dynamic 2 HDFC BANK
investment strategy and providing flexibility to investors to make 3 ICICI BANK
changes to allocations between the two folios once every year.
4 HDFC LIFE
5 RELIANCE INDUSTRIES
PRICING & PRODUCT FEATURES
 Minimum investment of Rs.50 lakh
Top 5 Stocks – Prime Picks ALPHA
 Charges
1 BATA INDIA
 2% per annum (plus taxes); AMC fee charged every quarter.
2 MAHANAGAR GAS
 0.5% brokerage on every trade executed.
3 MAYUR UNIQUOTERS
 20% profit sharing after the 18% hurdle is crossed at the end
4 SANOFI INDIA
of every fiscal (with higher watermark basis).
5 TATA CONSUMER
20.7%
8.7%
7.8%
4.1%
1 Month 3 Months 6 Months 1 Year Since inception
-4.5% -4.5%
-10.0%
-11.6%
-12.9%
-14.2%
Prime Picks PMS
BSE 200
MONTHLY PERFORMANCE ADVISORY DESK
Advisory Products and Services

The Advisory Desk is a central desk consisting of a Mumbai- Advisory Products &
based expert team that runs various sample model portfolios Services
for illustrative purposes only for clients of all profiles, be they
traders or investors.
These products are different from Sharekhan research-
based technical and fundamental offerings as these Investor Trader
essentially try to capture the trading opportunities in stocks
where momentum is expected before or after some event Actionable Ideas
including the announcement of results or where some MID DerivativeSharekhan Pre Market Action Intraday Calls (Cash)
news/event is probable. Derivative Calls (Opt)

Derivative Idea (Fut+Opt)
Advisory products are ideal for those who do not have time
to either monitor the market tick by tick or shift through Stocks In TechnicalDerivative
pages of research for data or pour over complex charts to News view view
catch a trend.
However, all these products require perfect discipline and money management.
For Investor
ACTIONABLE IDEAS
These calls focus on generating absolute returns over a timeframe of 6-12 months and have a favourable risk-reward
ratio. Stocks are closely tracked based on regular interaction with companies’ management to stay abreast of the
business outlook. For details about the product, please write to us at advisory@sharekhan.com.
For traders
INTRADAY CALLS
These are technical analysis calls. Calls will be generated in the cash segment and closed before the end of the
trading day. These calls have pre-defined stop loss, targets. For details of the product, please write to us at
advisory@sharekhan. com.
DERIVATIVE CALLS
These calls are based on the analysis of open interest, implied volatility and put-call ratio in the derivatives market. It is
a leveraged product and ideal for aggressive traders. These calls have a pre-defined stop loss, target, timeframe and
quantity to be executed. For more details on this product, please write to us at derivative@sharekhan.com.
DERIVATIVE IDEA FUTURES
Calls are in (stocks & index) futures segment, based on an analysis of open interest, implied volatility and the put-call
ratio in the derivatives market. It is a leveraged product and ideal for aggressive traders. These calls have pre-defined
stop loss, targets, timeframe and quantity to be executed. For more details on this product, please write to us at
derivative@ sharekhan.com.
SHAREKHAN PRE-MARKET ACTION
This report gives us stocks in news, with likely the price effect which is valid for a day. The report has different sections
- Stocks in News, Events, Technical View and Derivative View alongwith positive and negative bias stocks. The report
is valid for a day, for more details please write to us on advisory@sharekhan.com.
Report Card
Product Intraday Calls (Cash) Derivative Calls Derivative Idea Future and
Strategy
Month July 20 CY 20 July 20 CY 20 July 20 CY 20
No. of calls 38 176 63 444 6 63
Profit booked 22 103 37 229 1 36
Stop loss hit 16 76 26 189 4 27
Strike rate (%) 58% 59% 59% 52% 17% 57%
MUTUAL FUNDS DESK MF PICKS
SHAREKHAN MUTUAL FUND FINDER AUGUST 2020

Top Equity Fund Data as on July 01, 2020
Picks
Absolute % Compounded Annualised %
(Point to (Point to Point)
Scheme Name *Riskometer NAV (Rs.) Point)
6 Months Since
1 yr 3 yrs 5 yrs Inception
Large Cap Funds
Axis Bluechip Fund - Growth Moderately High 29 -10.0 -4.3 9.0 8.1 10.6
BNP Paribas Large Cap Fund - Growth Moderately High 88 -9.7 -4.6 3.4 4.9 14.8
Mirae Asset Large Cap Fund - Reg - Growth Moderately High 47 -13.9 -10.8 3.4 7.3 13.4
UTI Mastershare Unit Scheme - Growth Moderately High 114 -11.8 -8.1 2.9 4.6 14.7
ICICI Prudential Bluechip Fund - Growth Moderately High 38 -13.8 -11.6 2.4 5.5 11.7
Kotak Bluechip Fund - Reg - Growth Moderately High 221 -12.9 -7.5 2.4 4.8 18.2
HSBC Large Cap Equity Fund - Growth Moderately High 197 -12.8 -8.7 2.3 5.4 18.5
Large & Mid Cap Fund
Invesco India Growth Opportunities Fund - Growth Moderately High 32 -13.2 -8.8 3.9 5.8 9.3
Kotak Equity Opportunities Fund - Reg - Growth Moderately High 115 -10.3 -5.2 2.4 6.5 16.7
DSP Equity Opportunities Fund - Reg - Growth Moderately High 206 -12.1 -7.0 1.7 6.8 16.2
Canara Robeco Emerging Equities - Growth Moderately High 88 -8.9 -6.9 1.6 8.1 15.3
Sundaram Large and Mid Cap Fund - Reg - Growth Moderately High 30 -17.4 -13.8 1.5 5.8 8.7
SBI Large & Midcap Fund - Growth Moderately High 198 -13.6 -11.9 0.8 4.4 13.2
Principal Emerging Bluechip Fund - Growth Moderately High 97 -10.3 -7.1 0.7 6.9 21.5
IDFC Core Equity Fund - Reg - Growth Moderately High 38 -16.3 -15.8 -2.3 3.6 9.4
Mid Cap Fund
Axis Midcap Fund - Growth Moderately High 38 -5.4 1.7 8.5 7.6 15.2
Invesco India Mid Cap Fund - Growth Moderately High 47 -6.8 -3.1 3.2 6.1 12.4
DSP Midcap Fund - Reg - Growth Moderately High 54 -6.5 -2.0 1.9 8.1 13.1
Kotak Emerging Equity Fund - Reg - Growth Moderately High 36 -12.6 -9.2 -0.7 6.4 10.0
Edelweiss Mid Cap Fund - Growth High 24 -10.7 -9.6 -0.8 4.3 7.3
BNP Paribas Mid Cap Fund - Growth High 30 -8.7 -5.4 -2.0 4.0 8.1
Franklin India Prima Fund - Growth Moderately High 832 -13.5 -13.3 -2.0 4.4 18.1
Small Cap Fund
Axis Small Cap Fund - Reg - Growth Moderately High 28 -12.8 -4.7 3.5 7.7 16.8
Kotak Small Cap Fund - Reg - Growth Moderately High 64 -12.2 -10.1 -3.8 4.1 12.9
HDFC Small Cap Fund - Growth Moderately High 32 -17.1 -24.3 -4.2 4.6 10.0
ICICI Prudential Smallcap Fund - Ret - Growth Moderately High 21 -18.8 -17.2 -6.3 0.1 6.1
L&T Emerging Businesses Fund - Reg - Growth High 19 -19.1 -21.9 -7.6 5.5 10.6
Franklin India Smaller Companies Fund - Growth Moderately High 40 -21.1 -25.5 -9.6 0.7 10.0
Focused Fund
SBI Focused Equity Fund - Growth Moderately High 138 -10.2 -5.3 6.8 8.9 18.1
Axis Focused 25 Fund - Growth Moderately High 27 -11.4 -5.2 5.9 8.3 13.3
Sundaram Select Focus - Reg - Growth Moderately High 168 -13.0 -9.6 4.3 5.7 17.0
Principal Focused Multicap Fund - Growth Moderately High 63 -8.3 -3.1 4.3 6.2 13.4
Motilal Oswal Focused 25 Fund - Reg - Growth Moderately High 22 -10.3 -3.1 3.1 5.8 11.5
Aditya Birla Sun Life Focused Equity Fund - Growth Moderately High 55 -13.1 -10.3 1.1 4.8 12.3
Multi Cap Funds
Canara Robeco Equity Diversified Fund - Growth Moderately High 131 -7.4 -4.9 5.7 6.4 16.6
UTI Equity Fund - Growth Moderately High 137 -9.9 -3.9 5.1 6.0 11.6
DSP Equity Fund - Reg - Growth Moderately High 38 -10.2 -4.9 4.3 6.9 10.8
Kotak Standard Multicap Fund - Reg - Growth Moderately High 33 -13.2 -10.8 2.4 7.0 11.5
SBI Magnum Multi Cap Fund - Growth Moderately High 44 -14.8 -13.4 1.0 6.0 10.5
Aditya Birla Sun Life Equity Fund - Growth Moderately High 645 -15.4 -11.7 -0.5 6.1 21.0
Principal Multi Cap Growth Fund - Growth Moderately High 125 -13.0 -12.4 -0.7 5.4 13.7
HDFC Equity Fund - Growth Moderately High 541 -20.0 -22.7 -1.8 2.8 16.9
MF PICKS MUTUAL FUNDS DESK
Data as on July 01, 2020

Absolute % Compounded Annualised %
(Point to (Point to Point)
Scheme Name *Riskometer NAV (Rs.) Point)
6 Months Since
1 yr 3 yrs 5 yrs Inception
Value & Contra Funds
Invesco India Contra Fund - Growth Moderately High 45 -8.1 -6.6 4.7 7.7 12.1
Kotak India EQ Contra Fund - Reg - Growth Moderately High 48 -13.5 -10.7 4.3 5.8 11.0
Tata Equity P/E Fund - Reg - Growth Moderately High 122 -12.1 -10.3 -0.3 6.6 16.9
HDFC Capital Builder Value Fund - Growth Moderately High 239 -16.5 -18.1 -1.8 3.5 12.8
IDFC Sterling Value Fund - Reg - Growth Moderately High 38 -20.5 -24.9 -7.6 0.8 11.4
ELSS
Axis Long Term Equity Fund - Growth Moderately High 44 -11.6 -5.8 6.0 7.1 15.0
Canara Robeco Equity Tax Saver Fund - Growth Moderately High 63 -7.5 -6.4 5.4 6.2 17.5
Mirae Asset Tax Saver Fund - Reg - Growth Moderately High 17 -11.4 -6.8 5.1 -- 12.3
Invesco India Tax Plan - Growth Moderately High 48 -10.1 -6.9 4.1 6.1 12.3
Aditya Birla Sun Life Tax Relief 96 - Growth Moderately High 30 -8.1 -4.5 2.8 6.6 9.2
DSP Tax Saver Fund - Growth Moderately High 45 -12.8 -8.4 2.4 6.8 11.8
BNP Paribas Long Term Equity Fund - Growth Moderately High 37 -9.2 -4.8 2.3 4.2 9.5
Kotak Tax Saver Fund - Reg - Growth Moderately High 41 -12.1 -10.1 2.1 5.5 10.2
Thematic/Sector Funds
Aditya Birla Sun Life India GenNext Fund - Growth High 81 -12.0 -4.1 4.2 8.1 15.0
DSP Natural Resources & New Energy Fund - Reg - Gth High 27 -18.7 -17.8 -3.8 7.4 8.3
Aditya Birla Sun Life Banking and Financial Services Fund - Reg -
High 22 -30.5 -27.7 -4.8 5.1 12.7
Growth
ICICI Prudential Banking and Financial Services Fund - Retail - High 48 -31.3 -30.1 -5.2 5.1 14.2
Growth
L&T Infrastructure Fund - Reg - Growth High 13 -18.2 -21.6 -6.2 2.4 1.8
BNP Paribas Equity schemes

Absolute
Compounded Annualised %
Scheme % (Point to
(Point to Point)
Scheme name *Riskometer Category Point)
Since
6 Months 1 yr 3 yrs 5 yrs
Inception
Aggressive
BNP Paribas Substantial Equity Hybrid Fund - Reg - Growth Moderately High -6.1 0.9 5.9 -- 6.4
Hybrid
BNP Paribas Large Cap Fund - Growth Moderately High Large Cap -9.7 -4.6 3.4 4.9 14.8
BNP Paribas Long Term Equity Fund - Growth Moderately High ELSS -9.2 -4.8 2.3 4.2 9.5
BNP Paribas Multi Cap Fund - Growth Moderately High Multi Cap -13.6 -8.5 0.2 4.1 10.5
BNP Paribas Mid Cap Fund - Growth High Mid Cap -8.7 -5.4 -2.0 4.0 8.1
BNP Paribas Focused 25 Equity Fund - Reg - Growth Moderately High Focused -11.2 -7.2 -- -- -3.3
BNP Paribas India Consumption Fund - Reg - Growth High Thematic -4.5 4.9 -- -- 12.2
*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high
(principal at
high risk).
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and
risk- taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.
MUTUAL FUNDS DESK MF PICKS
SHAREKHAN MUTUAL FUND FINDER AUGUST 2020

Top SIP Fund Picks
(*invested on 1st day of every month) Data as on July 01, 2020
SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year

Kotak Bluechip Fund - Reg - Growth 12,000 36,000 60000
UTI Mastershare Unit Scheme - Growth Present Compounded Present Compounded Present Compounded
*Riskometer NAV (Rs.) Value annualised value annualised value annualised
(Rs.) return (%) (Rs.) return (%) (Rs.) return (%)
Large Cap Fund
Axis Bluechip Fund - Growth Moderately High 29 11,753 -4.5 38,001 3.8 73,336 8.2
BNP Paribas Large Cap Fund - Growth Moderately High 88 11,877 -2.2 36,853 1.6 67,663 4.9
Moderately High 220 11,842 -2.9 35,538 -0.9 65,069 3.3
Moderately High 114 11,800 -3.6 35,227 -1.5 64,857 3.2
HSBC Large Cap Equity Fund - Growth Moderately High 197 11,768 -4.2 35,211 -1.5 65,651 3.7
Mirae Asset Large Cap Fund - Reg - Growth Moderately High 47 11,702 -5.4 35,128 -1.7 67,423 4.8
ICICI Prudential Bluechip Fund - Growth Moderately High 38 11,714 -5.2 34,529 -2.8 64,714 3.1
Large & Mid Cap Fund
Mirae Asset Emerging Bluechip Fund - Growth Moderately High 52 12,112 2.1 37,031 2.0 73,006 8.0
Kotak Equity Opportunities Fund - Reg - Moderately High 115 11,973 -0.5 35,923 -0.2 67,242 4.7
Growth
Canara Robeco Emerging Equities - Growth Moderately High 88 11,959 -0.8 34,991 -1.9 67,083 4.6
DSP Equity Opportunities Fund - Reg - Growth Moderately High 206 11,833 -3.0 34,842 -2.2 65,341 3.5
Invesco India Growth Opportunities Fund -
Moderately High 32 11,575 -7.7 34,736 -2.4 66,238 4.0
Growth
Principal Emerging Bluechip Fund - Growth Moderately High 97 11,872 -2.3 34,051 -3.8 64,943 3.2
SBI Large & Midcap Fund - Growth Moderately High 198 11,580 -7.6 33,846 -4.2 62,533 1.7
Sundaram Large and Mid Cap Fund - Reg -
Moderately High 30 11,283 -12.8 33,477 -4.9 63,716 2.5
Growth
Mid Cap Fund
Axis Midcap Fund - Growth Moderately High 38 12,128 2.4 38,414 4.5 73,417 8.3
DSP Midcap Fund - Reg - Growth Moderately High 54 12,157 2.9 36,002 0.0 67,576 4.9
Invesco India Mid Cap Fund - Growth Moderately High 47 12,103 1.9 35,659 -0.7 66,582 4.3
BNP Paribas Mid Cap Fund - Growth High 30 11,983 -0.3 34,149 -3.6 61,395 0.9
Kotak Emerging Equity Fund - Reg - Growth Moderately High 35 11,698 -5.5 33,892 -4.1 63,125 2.1
Edelweiss Mid Cap Fund - Growth High 24 11,687 -5.7 33,020 -5.8 61,178 0.8
Franklin India Prima Fund - Growth Moderately High 832 11,553 -8.1 32,588 -6.7 59,879 -0.1
Small Cap Fund
Axis Small Cap Fund - Reg - Growth Moderately High 28 11,498 -9.0 36,109 0.2 67,637 4.9
SBI Small Cap Fund - Growth Moderately High 49 11,841 -2.9 34,094 -3.7 67,329 4.7
Kotak Small Cap Fund - Reg - Growth Moderately High 64 11,751 -4.5 32,686 -6.5 59,121 -0.6
Nippon India Small Cap Fund - Growth Moderately High 35 11,872 -2.3 31,806 -8.3 60,810 0.6
ICICI Prudential Smallcap Fund - Ret - Growth Moderately High 21 11,213 -14.0 30,824 -10.4 54,752 -3.7
HDFC Small Cap Fund - Growth Moderately High 32 11,234 -13.6 29,207 -13.9 56,050 -2.8
L&T Emerging Businesses Fund - Reg - Growth High 19 11,138 -15.3 28,525 -15.4 54,915 -3.6
MF PICKS MUTUAL FUNDS DESK
(*invested on 1st day of every month) Data as on July 01, 2020
SIP INVST (Monthly Rs. 1,000)* 1 year 3 years 5 Year

Total amount invested 12,000 36,000 60000
Present Compounded Present Compounded Present Compounded
Scheme Name *Riskometer NAV (Rs.) Value annualised value annualised value annualised
(Rs.) return (%) (Rs.) return (%) (Rs.) return (%)
Focused Fund
SBI Focused Equity Fund - Growth Moderately High 138 11,817 -3.3 36,855 1.6 70,715 6.7
Principal Focused Multicap Fund - Growth Moderately High 63 12,066 1.2 36,786 1.5 68,360 5.3
Motilal Oswal Focused 25 Fund - Reg - Growth Moderately High 22 11,958 -0.8 36,622 1.2 68,007 5.1
Axis Focused 25 Fund - Growth Moderately High 27 11,773 -4.1 36,407 0.8 71,266 7.0
Sundaram Select Focus - Reg - Growth Moderately High 168 11,656 -6.2 35,629 -0.7 67,482 4.8
Aditya Birla Sun Life Focused Equity Fund -
Moderately High 55 11,724 -5.0 34,643 -2.6 63,739 2.5
Growth
Multi Cap Funds
Canara Robeco Equity Diversified Fund -
Moderately High 131 12,038 0.7 37,078 2.0 70,120 6.4
Growth
UTI Equity Fund - Growth Moderately High 137 11,941 -1.1 36,447 0.9 67,880 5.0
DSP Equity Fund - Reg - Growth Moderately High 38 11,851 -2.7 36,428 0.8 68,493 5.4
Kotak Standard Multicap Fund - Reg - Growth Moderately High 32 11,709 -5.3 35,024 -1.9 66,329 4.1
SBI Magnum Multi Cap Fund - Growth Moderately High 44 11,425 -10.3 33,706 -4.5 63,029 2.0
Aditya Birla Sun Life Equity Fund - Growth Moderately High 645 11,524 -8.6 33,377 -5.1 62,620 1.7
Principal Multi Cap Growth Fund - Growth Moderately High 125 11,672 -5.9 32,921 -6.0 62,447 1.6
HDFC Equity Fund - Growth Moderately High 541 11,135 -15.3 31,705 -8.5 59,071 -0.6
Value & Contra Funds
Invesco India Contra Fund - Growth Moderately High 45 12,121 2.2 35,668 -0.6 68,591 5.5
Kotak India EQ Contra Fund - Reg - Growth Moderately High 48 11,676 -5.9 34,793 -2.3 66,393 4.1
Tata Equity P/E Fund - Reg - Growth Moderately High 122 11,828 -3.1 33,473 -4.9 63,953 2.6
HDFC Capital Builder Value Fund - Growth Moderately High 239 11,424 -10.3 31,327 -9.3 58,236 -1.2
IDFC Sterling Value Fund - Reg - Growth Moderately High 38 11,133 -15.4 28,414 -15.6 52,714 -5.3
Tax-saving funds (ELSS)
Canara Robeco Equity Tax Saver Fund -
Moderately High 63 11,992 -0.1 36,970 1.8 69,326 5.9
Growth
Axis Long Term Equity Fund - Growth Moderately High 44 11,654 -6.3 36,450 0.9 69,304 5.9
BNP Paribas Long Term Equity Fund - Growth Moderately High 37 11,912 -1.6 36,125 0.2 65,809 3.8
Invesco India Tax Plan - Growth Moderately High 48 11,863 -2.5 35,471 -1.0 66,706 4.3
Kotak Tax Saver Fund - Reg - Growth Moderately High 41 11,780 -4.0 35,412 -1.1 65,868 3.8
DSP Tax Saver Fund - Growth Moderately High 45 11,757 -4.4 35,227 -1.5 66,003 3.9
Aditya Birla Sun Life Tax Relief 96 - Growth Moderately High 30 12,071 1.3 35,133 -1.7 66,249 4.0
Motilal Oswal Long Term Equity Fund - Reg -
Moderately High 16 11,372 -11.2 33,150 -5.6 63,690 2.4
Growth
*The Riskometer will indicate five levels of risk – low (principal at low risk), moderately low (principal at moderately low risk), moderate (principal at moderate risk), moderately high (principal at moderately high risk) and high
(principal at
high risk).
Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at Sharekhan first understand the individual’s investment objectives and
risk- taking capacity, and then recommend a suitable portfolio. So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the mutual funds mentioned in the article.
EQUITY FUNDAMENTALS EARNINGS GUIDE
Sharekhan Earnings Guide Prices as on August 03, 2020

CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E growth FY20 FY21E FY22E FY21E FY22E FY21E FY22E Rs. Yld(%)
Automobiles
Apollo Tyres 108 16,327.0 15,721.8 17,967.5 442.2 583.5 857.5 7.7 10.2 13.5 32% 14.0 10.6 8.0 5.3 6.6 5.5 7.0 3.0 2.8
Ashok Leyland 49 17,467.5 15,232.5 20,657.0 395.3 21.1 634.2 1.3 0.1 2.2 30% 37.9 493.0 22.4 0.0 7.4 0.3 9.9 3.1 6.3
Bajaj Auto 2,917 29,918.7 27,108.1 33,481.9 5,100.0 4,330.7 5,411.1 176.3 149.7 187.1 3% 16.5 19.5 15.6 25.7 28.7 19.8 22.0 120.0 4.1
HERO MOTOCORP 2,631 28,836.1 26,427.9 32,933.1 3,178.7 2,573.8 3,535.0 159.2 128.9 177.0 5% 16.5 20.4 14.9 22.5 28.8 17.3 22.2 90.0 3.4
M&M 597 44,865.5 43,728.2 53,982.5 3,550.9 3,475.6 4,688.5 28.6 28.0 37.7 15% 20.9 21.3 15.8 11.1 13.7 8.8 11.0 8.5 1.4
Maruti Suzuki 6,166 75,610.6 64,001.8 81,526.5 5,650.6 5,024.3 7,744.3 187.1 166.3 256.4 17% 33.0 37.1 24.0 10.8 15.5 9.3 12.9 60.0 1.0
TVS Motor 396 16,423.3 14,892.5 19,060.3 624.6 467.1 847.9 13.1 9.8 17.8 17% 30.2 40.4 22.3 13.9 20.8 11.5 18.4 3.5 0.9
Banks & Financials
Axis Bank 417 25,206.0 24,934.0 27,330.0 1,627.0 3,509.0 9,909.0 5.8 12.4 35.1 146% 72.0 33.7 11.9 - - 3.9 10.2 0.0 0.0
Bajaj Finance 3,173 16,901.0 19,151.0 21,406.0 5,264.0 5,590.0 8,239.0 87.7 93.2 137.3 25% 36.2 34.0 23.1 - - 16.1 20.1 10.0 0.3
Bajaj Finserv 6,073 54,351.0 64,015.0 79,925.0 3,369.0 4,091.0 5,496.0 212.0 257.0 345.0 28% 28.6 23.6 17.6 - - - - 5.0 0.1
Bank of Baroda 47 27,451.3 30,784.2 33,612.0 546.2 1,648.2 2,330.2 1.2 3.6 5.0 104% 39.0 13.0 9.4 - - 2.3 3.1 0.0 0.0
Bank of India 48 15,399.0 14,267.0 16,212.0 (2,929.0) 424.0 1,598.0 -9.4 1.3 4.9 - -5.1 37.0 9.8 - - 0.9 3.5 0.0 0.0
Federal Bank 52 4,648.0 5,111.5 5,866.7 1,542.8 1,478.3 1,902.1 7.7 7.6 9.8 13% 6.8 6.9 5.4 - - 9.8 11.6 0.0 0.0
HDFC 1,740 15,194.0 11,716.0 12,523.0 17,770.0 10,994.0 11,303.0 102.9 63.4 65.2 -20% 16.9 27.4 26.7 - - 11.9 11.5 21.0 1.2
HDFC Bank 1,002 56,186.0 69,271.0 80,787.0 26,257.0 30,955.0 40,245.0 48.0 56.6 73.6 24% 20.9 17.7 13.6 - - 17.1 19.5 2.5 0.2
ICICI Bank 343 33,267.0 34,647.0 38,264.0 7,931.0 13,931.0 17,248.0 12.3 21.5 26.6 47% 27.9 16.0 12.9 - - 11.4 12.6 1.5 0.4
LIC Housing Finance 258 4,689.0 5,036.9 5,548.4 2,401.8 2,481.4 2,800.5 47.6 49.1 55.5 8% 5.4 5.3 4.6 - - 18.4 18.8 8.0 3.1
Max Financial 543 16,183.0 18,523.0 21,270.0 269.0 305.0 345.0 10.0 11.2 12.8 13% 54.3 48.4 42.4 - - - - 0.0 0.0
Punjab National Bank 33 17,438.0 15,994.0 17,686.0 336.0 977.0 1,198.0 0.5 1.5 1.8 90% 65.8 21.9 18.3 - - 1.6 1.9 0.0 0.0
SBI 192 98,085.0 1,08,125.0 1,15,561.0 14,488.0 21,031.0 25,764.0 16.2 23.6 28.9 34% 11.9 8.1 6.6 - - 8.8 10.0 0.0 0.0
Consumer Goods
Asian Paints 1,705 20,211.3 19,700.1 23,784.7 2,779.1 2,586.3 3,400.5 29.0 27.0 35.5 11% 58.8 63.2 48.1 19.1 22.0 24.0 27.6 12.0 0.7
Britannia 3,776 11,599.6 13,365.9 14,876.5 1,410.2 1,822.1 2,119.0 58.6 75.8 88.1 23% 64.4 49.8 42.9 36.4 35.5 36.2 32.9 50.0 1.3
Emami 241 2,840.8 2,926.2 3,365.6 596.4 633.1 765.2 13.1 14.0 16.9 13% 18.3 17.3 14.3 36.7 39.1 12.9 10.8 5.0 2.1
Godrej Consumer Products 698 9,910.8 10,530.6 11,639.4 1,462.0 1,639.1 1,921.1 14.3 16.0 18.8 15% 48.8 43.6 37.2 17.1 18.8 19.9 21.3 8.0 1.1
Hindustan Unilever 2,205 38,785.0 46,032.1 51,216.8 6,885.8 8,568.4 10,705.8 31.9 36.5 45.6 20% 69.2 60.4 48.4 39.7 28.5 30.2 21.5 26.0 1.2
ITC 193 46,807.3 46,841.9 53,339.4 15,170.4 14,088.2 16,399.4 12.4 11.5 13.4 4% 15.5 16.7 14.3 23.2 27.0 21.9 24.8 10.2 5.3
Jyothy Laboratories 125 1,711.2 1,848.0 2,091.3 159.4 187.4 232.2 4.3 5.1 6.3 21% 28.8 24.5 19.8 13.3 14.7 14.6 16.5 2.0 1.6
Marico 363 7,315.0 7,492.0 8,478.0 1,069.3 1,140.8 1,353.6 8.3 8.8 10.5 13% 43.8 41.0 34.6 41.8 43.5 34.6 34.1 3.8 1.0
Tata Consumer Products 434 9,637.4 10,757.8 11,909.6 660.7 886.7 1,092.9 7.2 9.6 11.9 29% 60.5 45.1 36.6 8.8 10.0 7.3 8.1 2.7 0.6
Zydus Wellness 1,726 1,766.8 1,696.1 1,933.6 185.9 154.5 218.4 32.2 30.3 37.9 8% 53.5 57.0 45.6 5.8 6.9 4.4 6.0 5.0 0.3
IT / IT services
HCL Technologies 706 70,678.0 73,005.0 78,869.3 11,061.0 11,308.9 12,217.4 40.8 41.7 45.0 5% 17.3 16.9 15.7 22.8 22.4 20.9 20.4 8.0 1.1
Infosys 957 90,791.0 97,366.0 1,07,255.8 16,594.0 17,026.2 18,925.2 39.0 40.1 44.6 7% 24.6 23.9 21.5 33.5 37.9 25.9 28.5 17.5 1.8
L&T Technology services 1,534 5,619.1 5,394.6 6,049.6 818.6 719.5 891.0 77.7 68.2 84.4 4% 19.7 22.5 18.2 21.8 24.2 24.0 25.3 21.0 1.4
Persistent Systems 978 3,565.8 4,036.5 4,448.8 340.3 389.5 447.1 44.4 51.0 58.5 15% 22.0 19.2 16.7 20.7 21.6 15.6 16.5 12.0 1.2
Tata Consultancy Services 2,251 1,56,949.0 1,58,326.8 1,74,785.7 32,340.0 30,075.4 34,021.3 86.2 80.2 90.7 3% 26.1 28.1 24.8 39.7 44.6 35.9 40.6 73.0 3.2
Wipro 281 61,023.2 60,568.8 62,931.5 9,721.8 9,162.9 9,995.3 16.6 16.1 17.5 3% 16.9 17.5 16.0 13.9 14.0 15.1 15.2 1.0 0.4
Cap goods / Power
CESC 549 7,836.0 7,709.8 8,845.9 918.0 827.7 1,047.8 68.9 62.1 78.7 7% 8.0 8.8 7.0 6.9 8.5 8.0 9.6 20.0 3.6
Finolex cable 269 2,877.3 2,623.5 2,851.5 402.5 297.2 332.4 26.3 19.4 21.7 -9% 10.2 13.8 12.4 14.0 14.4 13.1 14.5 5.5 2.0
Greaves Cotton 79 1,911.0 1,759.0 2,032.0 122.6 91.3 126.6 5.4 4.0 5.5 1% 14.6 19.7 14.3 16.8 24.4 14.1 20.9 4.0 5.1
Kalpataru Power Transmission 229 7,904.0 8,302.4 9,368.8 463.0 419.9 522.8 30.0 28.5 35.5 9% 7.6 8.0 6.4 16.2 17.7 11.2 12.5 3.5 1.5
EARNINGS GUIDE EQUITY FUNDAMENTALS
CMP Sales Net profit EPS (%) EPS PE (x) RoCE (%) RoNW (%) DPS Div
Company
(Rs) FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E growth FY20 FY21E FY22E FY21E FY22E FY21E FY22E Rs. Yld(%)
KEC International 268 11,965.4 12,344.6 13,318.6 565.5 539.6 620.5 22.0 21.0 24.1 5% 12.2 12.7 11.1 20.0 20.2 17.6 17.4 3.4 1.3
Thermax 742 5,731.3 5,168.2 5,856.1 212.5 250.2 353.1 18.9 22.2 31.4 29% 39.3 33.4 23.7 11.6 16.6 8.9 12.9 7.0 0.9
Triveni Turbine 64 817.9 723.8 825.4 121.8 103.5 123.3 3.8 3.2 3.8 1% 17.1 20.1 16.9 21.1 21.8 16.7 16.7 0.5 0.8
V-Guard Industries 162 2,482.0 2,520.8 2,823.3 185.2 174.9 220.6 4.3 4.1 5.2 9% 37.5 39.7 31.5 21.8 24.3 16.4 18.1 0.9 0.6
Infra / Real Estate
Larsen & Toubro 916 1,45,452.4 1,43,888.5 1,62,237.3 9,549.0 7,308.5 9,486.6 68.0 52.1 67.7 0% 13.5 17.6 13.5 6.6 7.6 10.6 12.7 18.0 2.0
Sadbhav Engineering 43 2,251.7 2,378.4 3,208.0 68.1 63.2 152.3 4.0 3.7 8.9 49% 10.9 11.7 4.9 4.7 7.1 3.0 6.9 1.0 2.3
Oil & gas
Mahanagar Gas 972 2,972.1 2,303.5 2,944.7 737.1 585.9 848.3 74.6 59.3 85.9 7% 13.0 16.4 11.3 23.6 30.7 18.9 24.4 35.0 3.6
Oil India Ltd 95 12,128.5 8,164.7 10,768.2 3,207.8 1,510.2 2,274.1 29.6 13.9 21.0 -16% 3.2 6.8 4.5 7.4 10.1 6.1 8..9 10.6 11.2
Petronet LNG 250 35,452.0 25,019.2 34,429.4 2,852.4 2,797.7 3,466.8 19.0 18.7 23.1 10% 13.1 13.4 10.8 22.9 27.4 25.0 29.4 12.6 5.0
Reliance Ind 2,008 5,96,743.0 5,26,950.4 6,21,195.7 44,324.0 45,715.0 63,302.1 74.9 77.2 93.6 12% 26.8 26.0 21.5 9.5 11.5 8.6 10.0 6.5 0.3
Pharmaceuticals
Aurobindo Pharma 868 23,098.0 24,833.5 26,681.1 2,913.2 3,080.5 3,273.2 49.7 52.6 55.9 6% 17.5 16.5 15.5 18.4 18.1 16.9 15.4 3.0 0.3
Cadila Healthcare 395 14,253.1 15,400.8 16,972.7 1,511.4 1,756.9 2,073.8 14.8 17.2 20.3 17% 26.8 23.0 19.5 11.9 13.2 15.1 15.8 3.5 0.9
Cipla 711 17,132.0 18,714.4 20,721.5 1,499.5 2,224.3 2,777.4 19.2 24.0 31.4 28% 37.0 29.6 22.6 15.4 17.2 13.3 14.5 4.0 0.6
Divi's Labs 2,632 5,394.4 6,603.5 8,181.5 1,294.5 2,365.6 2,854.9 48.8 68.3 89.1 35% 53.9 38.5 29.5 26.4 27.9 20.7 22.0 16.0 0.6
IPCA Lab 1,888 4,648.7 5,473.1 6,451.9 603.6 953.7 1,192.4 47.8 75.6 94.5 41% 39.5 25.0 20.0 24.6 25.3 23.4 23.2 5.0 0.3
Lupin 927 15,374.8 16,143.4 17,834.4 352.6 1,271.6 1,659.5 7.8 28.1 36.6 117% 118.8 33.0 25.3 10.1 11.9 9.2 10.7 6.0 0.6
Sun Pharmaceutical Industries 520 32,837.5 36,162.7 39,234.8 4,025.6 5,182.3 6,254.7 16.8 21.6 26.1 25% 30.9 24.1 19.9 12.0 12.2 11.2 12.0 4.0 0.8
Torrent Pharma 2,731 7,780.0 8,517.7 9,858.7 1,025.0 1,273.6 1,645.6 60.3 74.9 96.8 27% 45.3 36.5 28.2 17.5 20.6 23.5 24.3 32.0 1.2
Building Materials
Grasim 634 18,609.4 17,861.9 20,795.2 1,266.7 1,107.9 1,660.2 19.3 16.8 25.2 14% 32.9 37.6 25.1 2.5 3.6 2.9 4.1 4.0 0.6
JK Lakshmi Cement 294 4,043.5 3,425.1 4,039.8 235.2 97.9 203.9 22.6 8.3 17.3 -12% 13.1 35.4 17.0 6.9 10.1 5.6 10.8 2.5 0.8
Pidilite Industries 1,345 7,294.5 6,676.7 8,204.2 1,177.2 1,031.7 1,376.1 23.2 20.3 27.1 8% 58.0 66.2 49.7 18.4 20.8 21.5 24.5 2.3 0.2
Shree Cement 21,761 11,904.0 11,149.0 12,901.3 1,570.2 1,159.7 1,636.1 435.2 321.4 453.4 2% 50.0 67.7 48.0 8.7 10.9 8.7 11.3 110.0 0.5
The Ramco Cements 676 5,368.4 5,623.8 6,653.9 601.1 517.7 701.7 25.5 22.0 29.8 8% 26.5 30.8 22.7 6.5 7.9 10.1 12.4 2.5 0.4
UltraTech Cement 4,044 40,649.2 37,493.0 43,288.6 3,652.2 3,331.1 4,331.3 126.5 115.4 150.1 9% 32.0 35.0 26.9 7.7 8.9 8.4 10.0 13.0 0.3
Discretionary
Arvind* 28 7,369.0 6,255.5 7,687.1 128.1 48.9 130.0 4.9 1.9 5.0 2% 5.7 14.7 5.5 4.0 5.7 1.8 4.7 0.0 0.0
Century Plyboards (India) 129 2,317.0 1,959.7 2,262.0 208.8 149.0 189.7 9.4 6.7 8.5 -5% 13.7 19.2 15.1 10.9 12.6 10.7 12.7 1.0 0.8
Info Edge (India) 3,155 1,272.7 1,059.1 1,436.8 328.9 260.1 464.4 26.7 21.1 37.8 19% 118.0 149.2 83.5 13.3 20.7 10.0 15.6 6.0 0.2
Inox Leisure 231 1,897.4 744.2 1,985.2 83.9 (150.7) 172.0 8.5 -15.3 17.5 43% 27.1 - 13.2 - 10.7 - 26.7 1.0 0.4
Relaxo Footwear # 594 2,410.5 2,413.5 2,948.2 226.3 229.4 327.6 9.1 9.2 13.2 20% 65.2 64.3 45.0 23.2 28.8 16.8 20.6 1.3 0.2
Titan Company 1,076 21,051.5 18,207.1 24,776.0 1,519.2 988.3 2,001.9 17.0 11.1 22.5 15% 63.2 96.7 47.7 16.5 29.3 14.1 24.8 4.0 0.4
Limited
Wonderla Holidays 137 270.9 41.7 216.1 45.9 (73.7) 22.3 8.1 -13.0 3.9 -30% 16.9 - 34.8 - 3.8 - 2.9 1.8 1.3
Diversified / Miscellaneous
Bajaj Holdings 2,600 - - - - - - - - - - - - - - - - - 32.5 1.4
Bharat Electronics 97 12,968.0 13,438.0 14,614.0 1,824.0 1,691.0 1,818.0 7.5 6.9 7.5 0% 12.9 14.0 12.9 14.3 13.9 16.1 15.9 1.4 1.4
Bharti Airtel 547 87,539.0 1,00,876.9 1,12,864.2 (3,630.4) 3,016.5 7,602.4 -7.0 5.9 14.8 - - 93.1 36.9 9.3 13.1 3.6 8.6 2.5 0.5
Coromandel International 780 13,137.0 14,877.0 16,179.0 1,065.0 1,271.0 1,470.0 36.3 43.4 50.2 18% 21.5 18.0 15.5 27.3 26.8 26.8 25.8 12.0 1.5
Gateway Distriparks 83 1,237.2 1,170.0 1,247.6 50.7 48.9 53.9 4.7 4.5 5.0 3% 17.9 18.5 16.8 7.0 7.3 3.7 4.1 4.5 5.4
PI Industries 1,841 3,367.0 4,253.0 5,257.0 455.0 657.0 827.0 33.1 43.5 54.7 28% 55.6 42.3 33.7 19.3 17.8 16.9 14.9 4.0 0.2
Ratnamani Metals and Tubes 1,132 2,583.1 2,393.2 2,911.8 307.5 276.5 328.4 65.8 59.2 70.3 3% 17.2 19.1 16.1 16.0 17.9 15.1 15.6 12.0 1.1
Supreme Industries 1,294 5,512.0 5,036.0 6,297.0 405.0 342.0 497.0 31.9 26.9 39.1 11% 40.6 48.1 33.1 17.6 26.8 13.0 20.1 14.0 1.1
limited
UPL 452 35,756.0 38,438.0 42,281.0 2,399.0 2,865.0 3,457.0 31.4 37.5 45.2 20% 14.4 12.1 10.0 10.2 12.4 16.5 19.1 6.0 1.3
Note: Grasim- Changed reporting to standalone financial numbers New Idea- We have converted the existing Viewpoint under our active coverage into a Stock Idea
Remarks
Automobiles
Apollo Tyres (ATL) • Apollo Tyres’ domestic replacement demand has witnessed sharp recovery reporting a 10% y-
o-y growth in June 2020 and a 7-8% y-o-y growth in July 2020.As per management the
recovery in replacement demand exceeds expectations. European operations (primarily
replacement) are also reviving with demand expected to reach 90% of pre-COVID normal
in Q2FY21. Moreover, ATL is gaining market share in replacement in both geographies,
driven by new launches and a wider distribution reach. Moreover, the government’s
move to restrict tyre imports would help domestic tyre players such as Apollo gain
market share. With better product mix, cost control measures and restructuring in
European operations, we expect margins to improve and expect strong 39% earnings
CAGR over FY2020-22. Valuations are lower than long-term historical average multiples.
Hence, we retain a Buy recommendation on the stock.
Ashok Leyland • Ashok Leyland Limited (ALL), the second-largest commercial vehicle (CV) manufacturer
in India, is a pure play on CVs. MHCV demand is likely to decline for the next 2-3
quarters, given weak economic growth, COVID-19 outbreak, and rise in costs due to the
shift to BS-VI norms. Once business activity normalises (post COVID-19) and economic
growth and rural demand pick up, the medium and heavy commercial vehicle (MHCV)
segment is expected to revive from FY2022. We retain a Hold rating on the stock.
Bajaj Auto • Bajaj Auto is second largest domestic motorcycle manufacturer and largest exporter of
motorcycles from India. Bajaj Auto is witnessing fast recovery in both the domestic as
well as overseas markets. Driven by strong rural sentiments, domestic markets have
already reached 80-85% of normal levels in July 2020. Opening up of economies overseas
and a in crude oil prices have led to export markets reaching 80% of normal sales in July
2020. Bajaj’s management has stated that recovery in demand has been better than
expectations and the company is ramping up capacity further to meet demand. The
company has a strong balance sheet and healthy cash balance. Valuation multiples are
lower than long- term historical average. We retain our Buy recommendation on the
stock
Hero MotoCorp • Hero MotoCorp (Hero) is the market leader in the domestic two-wheeler industry. While
the industry is facing short-term challenges on account of COVID-19, long-term growth
factors are intact. Moreover, Hero MotoCorp (Hero) expects industry demand to recover
as early as H2FY2021, driven by buoyancy in rural sentiments, pent-up demand, and
preference for personal transport to ensure safety in post-COVID era. Hero’s focus on
premiumisation of product portfolio and enhancing exports would also aid in demand
improvement. Hero, being a debt-free company with strong reserves, would enable it to
navigate the current challenging environment and prepare for the next growth cycle.
Higher rural exposure with Hero deriving half of its volumes from rural areas would lead
to its faster recovery. Hence, we retain our Buy rating on the stock.
M&M • Mahindra & Mahindra is the market leader in tractors and light commercial vehicles with
market share of about 40%. It is also India’s leading sports utility vehicle manufacturer
with market share of about 20%. Due to strong farm sentiments, M&M expects tractor
demand to remain robust and expects the industry to grow in FY2021. Moreover, M&M is
likely to gain market share in tractors due to a better outlook in regions where it has a
higher market share. M&M’s automotive segment is also witnessing recovery due to
robust rural sentiments and increased preference for personal transport. The company
expects m-o-m improvement to continue till the festive season in October-November
2020. Tighter capital allocation strategy of NIL fund infusion in businesses with an
unclear path to profitability will continue and M&M is evaluating performance of its
other international subsidiaries (recently M&M has decided against additional fund
infusion in Ssangyong and Genze). With good outlook for core business along with
prudent capital allocation policy, M&M’s multiples are likely to get re-rated considering
companies with lower market share such as Escorts are trading at higher multiples than
M&M. Hence, we retain our Buy rating on the stock.
Maruti Suzuki • Maruti Suzuki India Limited (MSIL) is India’s largest passenger vehicle (PV) manufacturer
with the company holding a strong 51% market share. Maruti is witnessing strong pick-up
in demand with retail sales reaching 85-90% of pre-COVID levels. Apart from pick-up in
rural areas due to strong farm sentiments, urban areas are also witnessing surge in
demand, driven by increased preference for personal transportation to ensure social
distancing. Moreover, demand shift towards entry-level cars is likely to benefit Maruti,
which has a stronghold in the segment. Hence, we upgrade our recommendation on the
stock to Buy from Hold.
TVS Motor • TVS Motor (TVSM) is India’s fourth largest two-wheeler manufacturer present in the
scooters segment. On the demand front, TVSM is expecting strong recovery in both
domestic (due to strong rural sentiments) and exports (due to opening of economies and
steady oil prices). TVS expects to reach pre-COVID 19 volumes by September 2020 in
both domestic and export markets. Cost-control initiatives coupled with a pickup in
volumes would drive margin improvement for TVSM. We expect TVSM to deliver strong
17% earnings CAGR over FY20-22. Valuations are below the long-term historical average.
Hence, we retain our Buy recommendation on the stock.
Banks & Financials
Axis Bank • Axis Bank is the third-largest private sector bank, with a well-diversified loan book with
strengths in both retail and corporate segments. The bank’s liability profile has
improved, which would help keep margins healthy. Business restructuring along the
lines of incremental lending to higher-rated corporate segment, focus on quality retail
and mid-market groups are steps in the right direction, which will augment
sustainability and profitability. However, in the medium term, COVID-19 poses
challenges to credit growth and asset quality of the banking sector. We expect banks
with strong balance sheets and capital position better placed to recover once the
business environment normalises. Going forward, the bank’s strategic investment in the
insurance space will further add strategic value. The bank has a strong market position
across most digital payment products.
Bajaj Finance • Bajaj Finance, a subsidiary of Bajaj Finserv, is a leading NBFC with well-diversified and
strong asset quality. The company has its assets spread across products, viz. loans for
consumer durables, two-wheelers, and three-wheelers, loans to small and medium
enterprises (SMEs), mortgage loans and commercial loans. The company’s strong loan
growth, asset quality, and provisioning set Bajaj Finance’s performance among the best
in the system. However, in the medium term, COVID-19 poses challenges to credit
growth and asset quality of NBFCs. We expect NBFCs with strong balance sheets and
capital position is likely to recover faster, once the business environment normalises.
Bajaj Finserv • Bajaj Finserv is a financial conglomerate with subsidiaries in the financing, life
insurance, and general insurance segments. We expect its subsidiary, Bajaj Finance
Limited (BFL), to continue with calibrated growth and sustainable profitability and
margins (for the long term), which will be the key support for present valuations of
Bajaj Finserv. Bajaj Allianz General Insurance Company (BAGIC) is expected to continue
its healthy operating metrics and profitability going ahead. BALIC is focusing well on
strengthening its distribution channel and protection business, but profitability will
depend on the pace and segment of new business growth. The COVID-19-led lockdown is
expected to put the economy under severe financial strain and the resultant ratings
downgrades are likely to put pressure on corporate bond valuations as well. Insurers
would be sensitive to bond downgrades; and if market volatility persists, investment
portfolios and investment earnings may be impacted as well. However, given the strong
balance sheet of its subsidiaries, companies like Bajaj Finserv are expected to tide over
medium-term challenges.
Bank of Baroda • Bank of Baroda has over 9,400 branches across India and abroad along with a diversified
products and services portfolio and strong client relationships. Business growth as well
as profitability and asset-quality improvement is gradual but in the desired direction.
Two other PSU banks have been merged with Bank of Baroda, which will add to its
business reach and strength. Notwithstanding the synergies that will accrue over the
long run, we believe near-term challenges in terms of asset quality and integration
issues of the merged entity may mute medium-term performance. Moreover, in the
medium term, COVID-19 impact poses challenges for credit growth and asset quality of
the banking sector, including Bank of Baroda.
Bank of India • Bank of India (BOI), established in 1906, is one of the largest PSU banks in the country.
The Mumbai-based bank has a strong presence in Western and Eastern regions. The bank
has over 5,100 branches and 5,800 ATMs across India. The government holds a ~89%
stake in the bank. Operating performance and earnings have been affected by a sharp
rise in non-performing assets (NPAs). However, going forward, credit traction is
expected to start over time as the bank has exited the prompt corrective action (PCA)
framework. However, in the medium term, the COVID-19 impact poses challenges for
the credit growth and asset quality of the banking sector, including Bank of India. As
several segments are undergoing stress and weak credit demand, we expect credit
growth and margins for BOI to likely be muted for the medium term.
Federal Bank • Federal Bank is among the better-performing old private-sector banks in India with a
strong presence in South India, especially Kerala. We believe the bank’s growth is in the
desirable direction and the accompanying vectors indicate sustainability and quality of
the bank. We believe incremental loans to better-rated borrowers, fewer additions to
the stressed asset pool, and high provision coverage are positives, but asset-quality
performance will continue to be a key monitorable for the medium term as COVID-19
will pose challenges for credit growth and asset quality of the banking sector, and
sectors such as MSME and unsecured loans, among others, are likely to be vulnerable.
HDFC • HDFC Limited is among the top-performing housing finance companies in the country
having deep roots in the retail segment. Despite general slowdown in credit growth,
HDFC continues to report strong growth in advances with stable margins. Aided by a
strong business franchise, best-in-class credit ratings and impeccable asset quality,
HDFC is a safe long-term bet with a scope for value creation led by steady business
growth. However, in the medium term, COVID-19 poses challenges for the credit growth
and asset quality of the financial sector, including HDFC. We expect NBFCs with a strong
balance sheet and capital position likely to recover faster, once business environment
normalises.
HDFC Bank • HDFC Bank is among India’s top-ranking lenders with a strong hold in the retail segment.
Despite the general slowdown in credit growth, the bank continued to report better
than industry growth in advances (mainly from retail products) and a strong retail
liability base. Higher margins as compared to peers, a strong branch network, and
better asset quality make HDFC Bank a safe bet with scope for expansion in valuation
multiples. The COVID-19 poses challenges for credit growth and asset quality of the
banking sector in the medium term, including the bank. We expect banks with strong
balance sheets and capital position to recover faster once the business environment
normalises.
ICICI Bank • ICICI Bank is one India’s top three-largest private sector bank with over 5,200 branches.
The bank has made inroads into the retail loan segment and has also significantly
improved its liability franchise. We believe that its strong capital adequacy and a wide
branch network will help support business growth in the long run. The bank appears to
be well-positioned to benefit from reduction in competitive intensity from NBFCs and
other banks, which face challenges of their own. However, in the medium term, COVID-
19 poses challenges to credit growth and asset quality of the banking sector, including
ICICI Bank. We expect banks with strong balance sheet and capital position better
placed to recover once business environment normalises.
LIC Housing • LIC Housing Finance is one of the largest mortgage financiers in India and is promoted
by Life Insurance Corporation of India. With over 282 marketing offices, the company
has one of the strongest distribution networks to support business expansion. Though
falling interest rates and a strong parent bode well for NBFCs, we believe increasing
competitive pressures may keep NIM range bound in the near to medium term.
Uncertainties in the builder loan segment and weak economic conditions warrant
caution due to asset-quality concerns. Recoveries in retail and developer book and loan
growth momentum in the next few quarters would be key monitorables. In the medium
term, COVID-19 poses challenges for the credit growth and asset quality of the financial
sector, including LIC Housing. We expect NBFCs with a strong balance sheet and capital
position likely to recover faster, once the business environment normalises.
Max Financial
• Max Life Insurance is owned by Max Financial Services (MFS) and is among the leading
Services
private sector insurers that has gained critical mass and enjoys the best operating
parameters in the industry. MFS is effectively building an attractive insurance franchise
characterised by a multi-channel distribution network built upon a conservatively
underwritten insurance business. The deal with Axis Bank will provide clarity to the
bancassurance relationship and is long-term positive for MFS. Management has
reiterated its strategy to achieve a balanced product mix and focus on non-par savings
with the protection segment, which will be margin-accretive. COVID-19-led lockdown is
expected to put the economy under severe financial strain and the resultant rating
downgrades are likely to put pressure on corporate bond valuations as well. Insurance
companies would be sensitive to bond downgrades, and if market volatility persists,
investme
nt
portfolio
s and
investme
nt
earnings
too may
be
impacted
as well.
PNB • Punjab National Bank (PNB) has a strong liability mix in the banking space, with low-cost
deposits constituting over 40% of its total deposits. PNB has done a significant amount
of business and process enhancement/upgradation to mitigate operational and credit
risks after the fraud, but so far the asset-quality improvement has been subdued.
Further development in resolution/recovery of NCLT exposures as well stress in the SME
segment warrant a cautious approach. Risks of chunky slippages/haircuts are present in
the near term. Moreover, in the medium term, COVID-19 impact poses challenges for
credit growth and asset quality of the banking sector, including the bank, and will be a
key monitorable.
SBI • State Bank of India (SBI) is India’s largest bank. The successful merger of associate banks
and value unlocking from the insurance business could provide further upside. While the
bank is favourably placed in terms of liability base and operating profit is better than
peers, asset quality is also improving aided by strong resolution/recoveries. SBI’s strong
balance sheet coupled with an enviable reach and business strength make it a strong
business franchise, which is well-placed to gain market share as well as quality clients
in the medium to long term. However, in the medium term, COVID-19 poses challenges
for the credit growth and asset quality of the banking sector, including the bank. SBI’s
status as the market maker in terms of domestic interest rates places it at an advantage
to other PSU bank peers, providing a cushion to margins.
Consumer Goods
Asian Paints • Asian Paints Limited (APL) is a market leader in domestic paint industry with a 55%
market share. Unlike peers, the company has de-risked its business model, deriving
more than 85% of revenue coming from domestic decorative paints. The company has a
strong portfolio of brands straddling the pyramid. APL's Q1FY2021 performance was
affected by lockdowns but strong pick-up in demand was seen for decorative paints
from June. If the Coronavirus scare recedes significantly, H2FY2021 will be much better
than H1. Considering the strong traction for its products, the waterproofing segment
can be a revenue contributor in the near to medium term. FY2021 will be affected by
COVID-19 as social distancing will defer painting activities. However, a higher
willingness to spend on home improvement and an increase in demand from
infrastructure/construction projects will drive a strong recovery in FY2022. A sharp fall
in crude oil prices led to a significant decline in key crude-linked input prices, which
will help operating margins (OPM) to remain stable in FY2021 and expand in FY2022.
APL’s leadership position in domestic paints industry and better earnings visibility
justifies the premium valuation. We maintain our Buy recommendation on the stock.
Britannia • Britannia is one of the largest domestic biscuit and snacking companies (it gained top
position in the domestic biscuit market, beating Parle) with a turnover of over Rs.
11,000 crore. Under the new leadership, the company has been able to leverage and
monetise its strong brand and premium positioning in the biscuits and snacks segments.
The company clocked strong numbers in Q1FY2021 with revenues growing by 26.5% y-o-
y and higher OPM at 21%. The company expects strong growth momentum to sustain in
the coming quarters with higher demand from in-house consumption, improvement in
supply in key markets, market share gains from small players and strong recovery in
rural demand. Correction in raw-material prices would help post better margins.
Sustained innovation in the product portfolio, expanding distribution reach, entry into
newer categories, and focus on cost efficiency will help the company maintain steady
earnings growth in the medium term
Emami • Emami is one of the largest players in the domestic FMCG market with a strong presence
in underpenetrated categories such as cooling oil, antiseptic creams, balm, and men’s
fairness creams. Emami's Q1FY2021 earnings performance was better than ours
expectation with revenue and PAT declining by ~26% and ~6.5%, respectively. June saw
a recovery with revenue bouncing back to 6% and double-digit growth was witnessed in
July. Management expects growth in terms of revenue largely driven by strong demand
in the health & hygiene portfolio, new launches and a recovery in rural markets. Benign
input prices, reduction in advertisement cost, and stringent management of other cost
elements would help the company post better margins in the coming quarters. The
group’s exit from non- core businesses has helped promoters to reduce pledged share
significantly from 95% to 55% currently. In view of reducing headwinds and favourable
risk-reward ratio, we have upgraded the stock to Buy from Hold.
GCPL • Godrej Consumer Products Limited (GCPL) is a major player in the personal wash, hair
colour, and household insecticide market segments in India. The company clocked
resilient performance with flat revenue, largely driven by 5% growth in India and
Indonesia each while OPM expanded by 77 bps to 20.3%. In India, HI and hygiene
products registered strong growth of 27% and 15%, respectively, led by strong demand.
The management expects HI segment to keep growing strongly in coming quarters as
new products gain good traction and competitive intensity from illegal incense sticks
eases in the current environment. Higher demand for health and hygiene-related
products will augur well for the company as ~85% of GCPL’s portfolio consists of
essentials/value-for-money products. Thus, India business is expected to get back on
the growth trajectory in H2FY2021.

HUL • Hindustan Unilever Limited (HUL) is India’s largest fast-moving consumer goods (FMCG)
company. Q1FY2021 overall performance was better than our as well street expectation
with revenue and adjusted PAT growth of ~4% and ~8%, respectively. With half of the
portfolio catering to essential categories, the strong direct distribution reach and new
product launches (especially in the hygiene space) would help HUL see faster recovery
post normalisation of the business environment. Though the current business
environment remains uncertain, the management is confident that 80% of business
(largely essentials) will continue to perform well. Recovery in rural demand, strong
demand for hygiene and nutritional products and market share gains in key categories
will be key revenue drivers in the near term. Synergistic benefits from GSK Consumer’s
merger and cost rationalisation measures will help OPM to remain high in FY2021. HUL
remains one of our top picks in the FMCG space.
ITC • ITC’s Q1FY2021 performance was better than ours as well as the street’s expectation
mainly on account of a strong growth in essentials segment of the non-cigarette FMCG
business and a strong recovery in cigarette sales in June. Non-cigarette FMCG business
will continue to deliver strong performance with essential products gaining strong
traction and expanded reach aiding the company for stable supply of products.
Cigarette business is recovering and sales volumes are expected to come back on track
in the coming quarters. The hotel business will remain an underperformer in FY2021
(likely to see strong recovery in FY2022). ITC stock is trading at a stark discount to some
of the large consumer goods stocks. With a favourable risk-reward ratio, we maintain
our Buy recommendation on the stock.
Jyothy Labs • Jyothy Laboratories Limited (JLL) is the market leader in the fabric whitener segment in
India. JLL is largely a consumer staples company with 45-50% of its revenue coming
from essential products such as detergents, dishwashing products, and personal wash
items. JLL posted better performance in Q1FY2021 with consolidated revenue and PAT
growing by 2.5% and 25%, respectively driven by strong growth in the HI segment.
Driving sales through LUP, expanding reach (especially in rural markets), and focus on
gaining strong traction to new product launches are near-term growth drivers. The HI
and dishwashing segments will continue to deliver good growth, while the personal care
segment (consisting of Margo) will see recovery in Q2. Management is confident of
maintaining OPM at around 16%. In view of the long-term growth prospects and
discounted valuations, we maintain our Buy rating on the stock.
Marico • Marico is among India’s leading FMCG companies. Core brands such as Parachute and
Saffola have a strong foothold in the market. Q1FY2021 consolidated results are better
than expectation with revenue decline of ~11% and adjusted PAT growth of 4% driven by
relatively better performance in international markets and sharp 300 bps expansion in
OPM. With most of Marico's products in non-essential categories (except for edible oil),
we expect recovery in performance will take some time. Management is confident of
achieving decent growth in the remaining fiscal. Benign copra prices and conservative
ad spends would help OPM to stay 20%+ in the coming quarters. Though FY2021 is
expected to be a disruptive year, Marico is focusing on delivering double-digit revenue
growth in the near to medium term by launching new products in health and hygiene
categories, different distribution model for urban markets, and increased direct
distribution in rural markets. Strong footings in the value-added hair oil and enhancing
presence in low penetrated categories such as premium hair care and male grooming
space would help the company to achieve good growth in the long run.
Tata Consumer • Tata Consumer Products is one of the largest consumer goods company in India with
Products strong presence in branded tea, salt, water and other staples. The integration of Tata
Chemicals’ consumer goods will bring a lot of synergistic benefits such as a combined
distribution network catering to more than 200 million households, diversification into
multiple product categories, robust innovation and sustained revenue and cost
synergies, which will help in driving sustainable growth in the long run. Integration of
TCL’s consumer business with TCPL heightens sustainable revenue and PAT growth
visibility owing to multiple growth levers. We expect consolidated revenue and earnings
to grow at a CAGR of 10% and 20% over FY2020-23E.
Zydus Wellness • Zydus Wellness now has a product portfolio of brands such as EverYuth, Nutralite, and
Sugar Free along with Glucon D and Complan post the acquisition of Heinz India. Zydus
Wellness has a strong portfolio of leading brands, which are largely placed in low-
penetrated categories. Zydus Wellness registered decent numbers amid a tough
environment, where supply disruptions caused by lockdown led to a 13.4% and 14.6%
decline in revenue and PAT, respectively. Though FY2021 will be affected by COVID-19
pandemic, strong recovery is anticipated in FY2022. Though gross margins stumbled in
Q1FY2021, the management expects gross margins to improve in the coming quarters on
account of correction in key input prices. This will also help ZWL post better OPM in
the coming quarters. Stable working capital and strong cash generation ability would
help ZWL in the current uncertain environment. In view of discounted valuations to
peers, a stable balance sheet, negative working capital cycle, and a strong brand
IT/IT services
portfolio, we maintain our Buy rating on the stock
HCL Tech • HCL Technologies has a leadership position in infrastructure management services (IMS)
and engineering and research and development (ERD) space. The management also
highlighted that COVID-19 related impact on the demand side stabilized after initial
impact of ramp-downs, volume reduction and discounts to some customers in the
stressed sectors. Hence, the management provided its guidance on revenue growth in
the range of 1.5% - 2.5% q-o-q for the remaining quarters of FY2021. This guidance
translates to -2.3% to -0.8% growth in FY2021. On margin front, management expects
EBIT margin to be in the range of 19.5-20.5% for FY2021 (EBIT margin was at 19.6% in
FY2020). HCL Tech’s strength in cloud infrastructure, and capabilities in automation and
security services, would help the company to drive clients’ digital transformation
journey.
Infosys • Infosys is India’s premier IT and ITeS company that provides business consulting,
technology, engineering, and outsourcing services. The company expects its Pentagon
agile digital service architecture to help address clients’ digital requirements.
Management resumed guidance with annual revenue growth guidance of 0-2% in CC for
FY2021E, translating 0.5-2% CQGR for the remaining three quarters of FY2021E. The
company expects positive growth in FY2021E because of its strong relationships with
clients, traction for its digital offerings, higher localisation in the U.S., strong deal wins
especially in the BFSI vertical, and healthy deal pipeline. Even as reduction of IT
spending is expected during 2020, Infosys is well poised to gain share in the recessionary
environment and outperform peers in terms of revenue growth in FY2021E.
L&T Technology • L&T Technology Services (LTTS) is the third-largest engineering services provider (ESP) in
Services India and is well-diversified to capture the digital engineering spending across the
verticals. Digital engineering spend is expected to clock a 19% CAGR to $1.1 trillion by
2025, which would account for 53% of overall ERD spends. Though implications of
COVID-19 will be felt in certain verticals in the near term, technologies facilitating in
building the new normal for enterprises are expected to speed-up adoption of digital
engineering in the medium-to-long term. The management also remains optimistic that
it would report positive revenue growth q-o-q from Q2FY2021 on the back of strong deal
wins,
robust deal
pipeline
and
continued
growth
momentum
in medical
devices.
Persistent Systems • Persistent Systems Limited (PSL) has proven expertise and a strong presence in newer
technologies, strength to improve its IP base, and a decent margin profile, all of which
set it apart from other mid-cap IT companies. PSL is focusing on the development of
Internet of Things (IoT) products and platforms, as it sees a significant traction from
industrial machinery, SmartCity, healthcare, and smart agriculture verticals. Post the
management change, the company’s has been delivering strong performance especially
in the technology services segment with new deal wins. The recent vendor
consolidation deal in BFSI vertical along with a large deal signings ($50 million over five
years) in the emerging vertical and continued growth momentum in technology services
segment would help the company to maintain its growth momentum in FY2022E. We
expect margins to improve in coming quarters on the back of lower travel expenses,
normalcy of pricing discounts, reduction in subcontractor costs and reduction in
expenses of new engagement.

TCS • Tata Consultancy Services (TCS) is among the pioneers in the IT services outsourcing
businesses in India and is the largest IT services firm in the country. The management
reiterated earlier expectations of a recovery in revenue growth from Q2FY2021E as
supply- side constrains evaporate and demand surges for digital infrastructure solution
and higher expenditure around core transformation. The management indicated that
TCS would benefit from three broad spending themes - (1) smart secure workplace and
collaboration (higher demand for its SBWS model as customers are switching to remote
model) (2) customer experience (lot of investment on front-end transformation) and (3)
core transformation (need for operational resilience and agility within the enterprise).
Management believes it can match December 2019 quarter rupee revenues in
December2020 quarter and flattish CC revenues on y-o-y basis by March 2021.
Wipro • Wipro is among India’s top five IT companies in India. Wipro’s management restricted
itself to provide any guidance on growth recovery as demand environment remains fluid
and velocity of decision making is not at par with pre-COVID level. However, it
indicated that TCVs of large deals have improved on a y-o-y basis and the company has
healthy deal pipelines. Mr. Delaporte (newly appointed CEO) plans to get Wipro back on
the path to industry growth without losing sight of profitability. He highlighted that the
near-term priorities are—(1) engage with leaders and be active on day to day
operations; (2) increase client connects to understand expectations from Wipro, (3)
reinforce employee engagement,
(4) redefine and reinforce strategy, (5) streamline processes, focus on top talent, make
the organization more efficient.
Capital Goods/Power
CESC • CESC, an RP-Sanjiv Goenka Group company, is a fully-integrated power utility company.
The company has stable earnings contribution from standalone operations with
regulated power generation and distribution businesses getting assured RoE of 15.5% on
generation assets and 16.5% for distribution assets. Reducing loss at Dhariwal
Infrastructure and Rajasthan distribution franchisee makes CESC an attractive
investment proposition. Although electricity demand is expected to get impacted due to
COVID-19 but regulated tariff model assures fixed RoE and, thus, provides earnings
visibility in uncertain times.
Finolex Cables • Finolex Cables, a leading manufacturer of power and communications cables, is set to
benefit from improving demand for cables, its core business. The company is leveraging
its brand strength to build a high-margin consumer product business, although scaling
up the business would be gradual. The company was already facing near-term
headwinds due to slowdown in construction activity affecting its electrical division,
which will further aggravate due to the outbreak of COVID-19 leading to postponement
of deferment of projects by the government. Management stated that different
manufacturing plants are operating at a capacity utilisation level of 50-80%, depending
on products. While permanent labourers have returned to factories, the company is still
facing issues regarding contract labourers. Management expects a subdued level of
activity in the electrical cable segment due to slowdown in industrial activity along with
challenges expected in the optic fiber cables with lower investments from telecom. We
expect pain in the construction and OFC segments to continue in the near term, leading
to subdued net earnings growth along with labour shortage issues to impact productivity
for the year. Further, more than 50% of sales come from South India and lockdown in TN
has hurt the business and expected to impact the performance ahead. Hence, we have
fine-tuned our net earnings estimates for FY2021- FY2022E. Moreover, a key hangover
with respect to issue surrounding re-appointment of the chairman is sub-judice and,
thus, remains unresolved. Hence, we have maintained our Hold rating on the stock.
Greaves Cotton • Greaves Cotton Limited (GCL) is a mid-sized and well-diversified engineering company.
Core competencies of the company are in diesel/petrol engines, power gensets, agro
engines, and pump sets (engine segment). Going ahead, we expect volume pressure to
sustain due to slowing economic growth due to COVID-19 and a fall in demand for diesel
three- wheelers engines due to steep cost increases (40-45% cost increase expected) on
account of implementation of BS-VI emission norms. We expect share of diesel three-
wheelers to fall further in the BS-VI era. We expect recovery in FY2022 driven by pick-
up in economic growth (post control of COVID-19). We retain our Hold rating on the
stock.
Kalpataru Power • Kalpataru Power Transmission Limited (KPTL) is a leading EPC player in the power
transmission and distribution space in India. Opportunities in this space are likely to
grow significantly, thereby providing healthy growth visibility, which remains the key
monitorable in the wake of recent pandemic. The recent COVID-19 outbreak and
subsequent lockdown impacted execution and, thus, revenue. KPTL’s management
stated that work has partially started in all its factories; and out of 103 sites, projects
have started in 90 sites. Order book remains strong for KPTL along with L1 position in
orders worth Rs. 2,000 crore. Management has guided for 5-10% standalone revenue
growth for FY2021 with stable OPM at 10.5-11%. KPTL has risen over 32% since our last
report dated May 21, 2020, which has been led by better-than-expected Q4FY2020
performance, new order wins, and improving sector outlook led by favourable
government measures. We expect FY2021 to be better for KPTL in terms of order intake
and improving prospects for asset divestments, which will further deleverage the
balance sheet. Overall, strong order inflows and improvement in sector outlook have
led to re-rating of the company’s valuation multiple. We increase our valuation multiple
for KPTL along with higher contribution from JMC. We maintain our Buy rating on the
stock with a revised SOTP-based price target.
KEC • KEC International is a Global Power Transmission Infrastructure EPC major. The company
is present in the T&D, cables, railways, water, renewable (solar energy), and civil works
verticals. Globally, the company has powered infrastructure development in more than
61 countries. KEC is a leader in power transmission EPC projects and has more than
seven decades of experience. Over the years, it has grown through the organic as well
as inorganic route. The management refrained from giving any guidance on order
inflows, revenue, and margins for FY2021 due to uncertainty led by COVID-19. Order
book stood at Rs. 19,682 crore (up 3.5% y-o-y, 1.7x TTM consolidated revenue). The
company has L1 position for orders worth Rs. 4,818 crore (majorly international T&D).
The pipeline for tenders remains healthy in railways, international T&D, and civil
segments. The company has been able to better manage working capital owing to timely
receipt of government payments and decline in acceptances. Overall, the outlook for
KEC’s business segments, viz. T&D international and non-T&D comprising railways, civil,
and other businesses remains favourable. Hence, we maintain Buy given the healthy
order backlog, order inflow visibility, and KEC’s ability to ramp-up execution.
Thermax • The energy and environment businesses of Thermax are direct beneficiaries of the
continuous rise in India Inc’s capex. Order inflows declined by 17.7% y-o-y, with FY2020
order intake at Rs. 5,498 crore (-2.4% y-o-y). Accordingly, order backlog dropped by
2.5% y-o-y to Rs. 5,238 crore (0.9x its FY2020 revenues). Weak international order
inflows and limited visibility for big-ticket size domestic orders (in steel, cement, and
fertilisers) led to management guiding for lower order inflows in FY2021 compared to
FY2020, given the current uncertainties. Although management expects better ordering
in its chemical business and enquiries pipeline remain positive in food processing,
FMCG, oil and gas refinery, and pharma in domestic markets. Management stated that
all factories have started operating, which are currently at 40-45% utilisation levels and
expect to return to normalcy by Q3FY2021. Further, 90-95% of the project sites are
operating at 50-60% of labour so execution will not be a challenge at present and the
company expects more labour to come gradually as things improve. The fire at
adjoining facility of Dahej chemical factory affected its factory, which would lead to
30-40 days of production loss, impacting the chemical division’s revenue. We have
tweaked our estimates for FY2021-FY2022, factoring lower order booking and challenges
pertaining to uncertainties related to execution and production. We retain our Hold
rating on the stock.
Triveni Turbines • Triveni Turbines Limited (TTL) is a market leader in 0-30 MW steam turbine segment. TTL
order booking declined by 33% y-o-y, wherein exports order booking declined by 53% y-
o-y and domestic declined by 19% y-o-y. Total order book declined marginally (down
6.4% y-o-y). Order enquiry book remains healthy in key sectors such as distillery, oil and
gas, Biomass IPP, food processing, and waste heat recovery, but fructification of the
same remains key monitorables considering the given uncertainties in the current
environment. Management has largely maintained its earlier stance that in the worst-
case scenario, the company is likely to see a decline in revenue by 10% to 15% and profit
by 15% to 20% for FY2021. However, management expects better order inflow during
H2FY2021 due to postponement of order finalisation expected along with healthy
enquiry pipeline but expects deliveries of orders more bunched up towards FY2022. We
have tweaked our estimates for FY2021-FY2022, factoring near-term uncertainties in
terms of execution and order inflow. We maintain our Hold rating on the stock
V-Guard • V-Guard Industries is an established brand in the electrical and household goods space,
particularly in South India. Over the years, the company has successfully ramped up its
operations and network to become a multi-product company. Regionally, the company
has witnessed good traction in the southern markets (Karnataka and Kerala) but non-
south markets saw larger impact due to extended lockdowns where the impact has been
higher in metros compared to non-metros. On the business front, the management
indicated that there is good demand seen across it electrical products (largely wires)
and capacity utilization has been very good, other business utilization has been normal.
We have revised our revenue estimate downwards, factoring sporadic lockdown
hampering sales and gradual improvement in the demand environment for FY2021-
FY2022 and revised OPM for FY2022 weighing the fixed cost. Currently, the stock is
trading at a P/E of 32x its FY2022E earnings, which is almost 26% discount to historical
(trailing five year) average one-year forward P/E multiple. We believe the company’s
strong balance sheet, cash flows and reputed brand along with robust business
fundamentals will help it emerge stronger from the near-term weak environment.
Hence, we continue to maintain Buy on the stock
Infrastructure/Real Estate
L&T • Larsen & Toubro (L&T), being the largest engineering and construction company in India,
is a direct beneficiary of the domestic infrastructure capex cycle. Despite the
challenging business environment, lower fresh investments, and deferment of awarded
orders, the company was able to bag orders worth ~Rs. 23,574 crore (down 39% y-o-y) in
Q1FY2021, driven by the domestic business, especially in the infrastructure segment.
International orders during the quarter at Rs. 8,872 crore constituted 38% of the total
order inflow. Order backlog remained diversified and healthy at Rs. 3,05,083 crore
(2.2x TTM revenue). Order pipeline at Rs. 6.5 lakh crore comprising of Rs. 5.3 lakh crore
from domestic order and Rs. 1.2 lakh crore from International orders. Segmental
breakup of the order pipeline: Infrastructure Rs. 1.5 lakh crore; Power T&D: Rs. 60000
crore; Defence – Rs. 10000 crore. Key challenges with persistence issues such as
slowdown in consumption, shortage of labour (gradually improving), sluggish liquidity
scenario, deferment in ordering activity, and uncertain geopolitical scenario persist. We
expect L&T to sail through weak FY2021 as it is better poised to ride the current
uncertainties owing to multiple levers such as strong business model, diversified order
book, and healthy balance sheet, while it refurbishes its order book and maintains the
liquidity position to bounce back in FY2022. Consequently, the steep correction in L&T’s
stock price provides a favourable risk-reward ratio to investors. Hence, we continue to
maintain our Buy rating on the stock.
Sadbhav
Engineering (SEL) • SEL is engaged in 1) EPC business for transport, mining, and irrigation sectors and 2)
development of roads and highways on BOT basis through SIPL. SEL has a healthy order
book of Rs. 8,372 crore (3.7x its FY2020 standalone revenue). The company has robust
in-house integrated execution capabilities with qualified human resource and owned
equipment. We expect the company to gradually return back to track with the
execution of projects at advanced stage and reduction in leverage. Considering
attractive valuation and improving fundamentals, we have maintained our Buy rating on
the stock.
Oil & Gas
Oil India • Oil India has several hydrocarbon discoveries across reserves in Rajasthan and the
northeastern regions of India. The company holds domestic 2P (proved and probable)
reserves of 76 mmt for oil and 130 bcm for gas. Reserve-replacement ratio of the
company is also healthy. However, the recent sharp decline in oil prices given weak
demand due to COVID-19 and weak domestic gas price is a cause of concern for
upstream PSUs. The company offers high dividend yield.
Petronet LNG • Petronet LNG is the largest LNG re-gasifier in India with 17.5 mmt LNG terminal at Dahej
and 5 mmt LNG terminal at Kochi. The company’s Dahej terminal enjoys a competitive
edge compared to other LNG import terminals given its low tariff and long-term
contracted volumes with use or pay clause. COVID-19 is expected to impact volumes
temporarily; and Dahej terminal utilisation has already recovered to 100% with
expectation of high utilisation to sustain as gas robust demand outlook supported by low
LNG prices. Kochi terminal utilisation is also expected to improve with resolution of
pipeline connectivity issues in southern India. Petronet LNG would be the key
beneficiary of rising share of LNG in India’s overall gas consumption. The stock offers
healthy dividend yield.
Reliance Industries • Reliance Industries is a diversified conglomerate with ~60% EBITDA contribution from the
core business of refining and petrochemicals and ~35% from consumer businesses (retail
and digital services). The long-term earnings growth outlook remains robust with
potential improvement in the financial of digital services business (likely ARPU hike,
ramp-up of recently launched fibre broadband services, and rollout of enterprise
business and new commerce services) and continued strong growth for the retail
business (although near-term earnings to get impacted due to COVID-19) supported by
leveraging of the JioMart platform using WhatsApp. The company’s aim to increase the
share of EBITDA from the consumer business to 50% would play a crucial role to tide
over margin volatility in downstream margin due to COVID-19. RIL has a strong balance
sheet as it has become virtually net debt free with monetisation of stake in Jio
Platforms, a rights issue, and a fuel retail JV with BP. Potential listing of Jio and
induction of strategic partner in retail business could further unlock value from
consumer-centric businesses and create long-term wealth for investors.
Mahanagar Gas • Mahanagar Gas (MGL) is a dominant CGD player in and around Mumbai with gas sales
volumes of 3 mmscmd in FY2020 with 73% volume is derived from CNG and 14% from
domestic PNG. The company’s long-term volume growth remains intact given low gas
penetration (CNG at 34% and domestic PNG at 38%), regulatory push for use of green
fuels, and potential volume ramp-up at Raigad geographical area. Moreover, weak gas
prices would aid margin expansion MGL’s pricing power in CNG and domestic PNG. MGL’s
balance sheet is strong with nil debt and robust free cash flow generation. The stock
offers healthy dividend yield.
Pharmaceuticals
Aurobindo Pharma • Aurobindo derives around half of its revenue from the highly regulated US market, while
Europe accounts for almost a quarter of revenue. Hence, the company is exposed to
stringent norms of regulators. With the USFDA clearing the company’s unit-4, regulatory
concerns seem to be easing, though only partially. Aurobindo’s five plants are still
under USFDA’s scrutiny with an OAI/WL status. Consequently, new approvals from these
plants would be with held, leading to likely slower growth. Aurobindo’s Q4FY2020
results are better than estimates with a healthy all-round performance. The withdrawal
of US acquisition has put to rest concerns regarding higher debt and points at improved
balance sheet position. This coupled with the clearance of the unit-4 led to a sharp run-
up in the stock price since March 2020, thus leaving a limited upside. Further, new
approvals are the key growth drivers, as the base business in the US is fairly large.
Hence, timely and proper resolution of the USFDA issues is critical. We believe the
uncertainty related to regulatory hurdles would be an overhang on the stock (until they
are resolved successfully). We maintain our Hold rating on the stock.
Cadila • Cadila is favourably progressing in its efforts to build an alternative growth platform
(NCE, Biologics, and Vaccines) that should start delivering over the long term and
reduce the company’s dependence on limited competition assets in the US for its
earnings growth. India business including the consumer wellness segment is likely to
grow at a healthy pace, albeit over the medium to long term. The company reported
better than expected results for Q1FY2021. Revenues were up 4% yoy backed by a
strong growth in the Us business while the India business performed poorly. Operating
margins expanded by 230 bps y-o-y to 22.4% supported by gross margin expansion and
lower other expenses. Adjusted PAT was up 25% yoy. Cadila’s India business is expected
to improve gradually as doctors open up OPD’s. Meaningful revival is a key monitorable.
The US business on the other hand is well placed to grow backed by new product
launches. Further easing of pricing pressures in the US generics segment and a strong
product pipeline are likely to be the key drivers for the US business. Also the resolution
of USFDA issues at the Moraiya plant is critical from the growth perspective and
resolution would be a key point to watch for. We retain Hold recommendation on the
stock.
Cipla • Cipla is a global pharmaceutical company with a geographically diversified presence.

The company has a strong presence in the domestic formulations space. Management’s
concentrated efforts to structure businesses across geographies for a long-term
sustainable growth augur well. The domestic business, which accounts for 40% of sales,
is set to be the key growth driver. In the US, a strong set of product launches would fuel
growth. The USFDA approval for generic Albuterol has strengthened Cipla’s respiratory
franchise in the US market, which provides ample growth visibility. Also the filling of
Advair Duskus with the USFDA would further add to the respiratory franchise, though
over the next 18-24 months. Overall, management sees India business to lead growth,
while the South African business is expected to report healthy growth. Cipla reported
strong results for Q1FY2021 lead by a sturdy performance of the India business and cost
optimization measures implemented, leading to margin Expansion. Healthy topline
growth, strong earnings visibility, and a healthy balance sheet augur well and would
support multiple expansions. We maintain our Buy recommendation on the stock.
Divis Labs • Divis is one of the leading players in the API space and is present in the CRAMS segment.
Following the supply disruptions in the API space, an array of opportunities has
emerged. Companies like Divis Laboratories are best positioned to capitalise on these
opportunities. Amidst a strong demand outlook, its expanded capacities are expected to
come on stream, which will provide ample visibility on the company’s capability to
meet the increased demand. The full benefits of expanded capacities are likely to be
reflected from FY2022 onwards. Q1FY21 was a phenomenal quarter for Divis. The
company is expected to benefit from backward integration, capacity expansion and
emerging opportunities in the API space. Strong earnings visibility, sturdy balance sheet
with almost a zero debt and strong return ratios bode well and provides visibility on P/E
multiple expansions. We retain our Buy recommendation on the stock.
IPCA Lab • IPCA is one of the leading formulations and API player present across major markets
around the globe. Both the segments – API and formulations have reported double-digit
growth in FY2020 and traction is expected to continue going ahead. Management has
guided for 14-17% overall revenue growth for FY2021 and 100-150 bps OPM expansion
driven by a favourable mix, operating leverage, and stable input prices. IPCA is
implementing debottlenecking exercise at its existing plants in the API segment to ease
out capacity constraints. Over the long term, the commissioning of new facilities at
Dewas would aid revenue growth. Strong earnings prospects, a sturdy balance sheet,
and healthy return ratios augur well for IPCA. Successful resolution of USFDA regulatory
issues at the Pipariya and Pithampur plants is critical and could provide a further upside
with potential for upgrade of earnings estimates.
Lupin • Lupin is one of the leading pharmaceutical companies and is present in most markets
globally. After establishing itself as a major player in the generic space, the company is
making efforts to improve its presence in the specialty business performance; adjusted
PAT fell by 59.6% y-o-y to at Rs 106.9 crore, lagging estimates. Lupin’s US revenues
plunged by 21% y-o-y due to seasonality factor for few products, recall of Metformin
and demand contraction due to stocking up in March 2020. The management expects US
business to improve gradually. Lupin is expecting a nod from the USFDA for generic
version of Albuterol and is looking at a September 2020 launch. Lupin is also looking to
file new products in Europe, by end of 2020 and has a strong pipeline for the region,
which is likely to unfold gradually. Resolution of USFDA issues at its plants is critical
from a growth perspective and is a key monitorable. We retain Hold recommendation on
the Stock.
Sun Pharma • Sun Pharma is confronting issues in the US relating to pricing erosion, which
management believes would sustain in the near to medium term. This coupled with
slow pace of the US specialty business and higher specialty promotional spends is likely
to have its impact on the company’s performance. Further, the US business is
languishing on account of lack of new product launches. USFDA clearance of Halol plant
is yet to come. Domestic formulations business is likely to witness steady growth, driven
by chronic therapy demand. The company reported a healthy performance for the
quarter. Uncertainties persisting around the US business and India business (acute
therapy) could impact the growth prospects. Consequently, we hold back from taking a
constructive view on the company and retain our Hold recommendation.
Torrent Pharma • Torrent is a leading pharma company present in emerging as well as developed markets.
Torrent has higher dependence on chronic therapies, which bodes well. The company
derives 55-60% of its sales collectively from India and Brazil markets. Torrent has
outperformed the industry growth in both these markets and looks to sustain traction
backed by new launches, albeit over the medium to long term. In its commentary,
management mentioned of uncertainties due to COVID-19, albeit in the near term only
and expects normalisation post this. Torrent has guided for a gradual pick-up in sub-
chronic and acute therapies as doctors commence OPDs. During the quarter,
performance across the US, Brazil, and Germany regions was weak. In the US, growth is
expected to be constrained due to price erosion and absence of new launches. Torrent
is awaiting a resolution from the USFDA for all its three plants. Hold recommendation
Building Materials
on the stock.
Grasim • Grasim has witnessed a steep rise in its stock price, led by increased market
capitalisation of UltraTech, Aditya Birla Capital, and Vodafone Idea. Grasim’s
standalone business may take time due to global and domestic disruption caused in user
industries due to COVID-19 pandemic, which has led to capacity expansion plans to be
put on hold while focusing on maintaining liquidity. We have factored revised market
capitalisation for its financial and telecom entities, while Grasim’s SoTP value
comprises our price target of UltraTech. However, we maintain our Hold rating on the
stock as little clarity has emerged for its standalone business and telecom investment,
while investors can directly invest in UltraTech for the cement business.
Pidilite Industries • Pidilite is the market leader in adhesives and sealants, construction chemicals, hobby
colours and polymer emulsions industry in India. Its flagship brands - Fevicol and M-Seal
have a market share of ~70% each in the domestic market. With a slew of new launches
under existing brands and entry into consumer-centric categories, supported by
adequate media activities, Pidilite has transitioned its target market from industrial
users to consumers through effective communication, which has helped the company to
register itself in customers’ minds. Though FY2021 is expected to be lull, affected by
COVID-19, growth is expected to come back on track in FY2022, driven by a recovery in
refurbishment of houses and construction activities (especially in rural markets and
tier-III towns). Further, expected increase in demand for adhesive products in global
markets would add to overall revenues in FY2022 and FY2023. A fall in prices of key
inputs, in line with the fall in crude oil prices will support margins. A monopoly in the
adhesives market, strong brand recognition and a sturdy balance sheet justify a
premium valuation. We initiate our coverage on Pidilite with a Buy recommendation.
Shree Cement • Shree Cement is expected to be affected by lower demand on account of COVID-19 led
disruption since mid-March 2020. The company may have to delay its expansion plan to
reach 60 mtpa from 40 mtpa currently due to stoppage of work led by COVID-19
pandemic. The funds raised through QIP prior to COVID-19 pandemic should aid in
better liquidity position and help in maintaining its long-term expansion strategy. The
company trades at a premium to its peers due to its higher operational efficiencies and
relatively low absolute free float. Considering its rich valuations, we have a Hold rating
on the stock with a PT of Rs. 25,345.
The Ramco
Cements • The Ramco Cements, one of India’s most cost-efficient cement producers, will benefit
from capacity additions carried out ahead of its peers in the southern region. Ramco has
embarked upon capital expenditure plan of Rs. 3,430 crore to reach cement capacity of
20 million tonnes per annum (mtpa) by 2020-end. The expansion aims to strengthen its
reach in Andhra Pradesh, West Bengal, and North Eastern states. However, the company
may have to delay its expansion plan due to COVID-19 led disruption in the industry,
which is expected to lead to low demand during FY2021. The company’s healthy
balance sheet and its efficiency should aid in faster recovery in the growth path as
normalcy returns. Hence, we have a Buy rating on the stock.
UltraTech Cement • UltraTech Cement is India’s largest cement company. The COVID-19 led pandemic is
expected to affect cement demand in the near term due to stoppage of work at
government infrastructure projects and housing projects. However, as normalcy returns,
we expect gradual pick-up of government spending, while healthy pricing discipline in
the industry along with lower key input costs should aid in maintaining profitability
going ahead. The company is better placed in reviving its growth trajectory considering
its leadership position and timely capacity expansion.
Discretionary Consumption
Arvind • Arvind demerged into three separate entities of Arvind (textile business), Arvind Fashion
(branded and retail business) and Anup Engineering (engineering business) with an aim
to unlock value for shareholders. Post the demerger, Arvind has become a textile hub
present in segments such as denim, fabric, garments, and advanced material (AMD).
Arvind’s Q4FY2020 performance was affected by stoppage of production and supply
chain disruptions during the lockdown. The export market is recovering faster than the
domestic market with stronger brands posting 60-80% recovery. Faster recovery in the
export market, good growth in garment sales volumes, and sustained growth in AMD
business will help the company post good recovery in FY2022. The company is expected
to benefit from lower cotton prices, which will help gross margins to sustain in the near
to medium term. The recent correction in the stock has factored in near-term
headwinds. We maintain our Buy rating on the stock.
Century Plyboards • Century Plyboards is a leading player in the organised plywood industry with a market
share of 25%. The company also has laminate, particle board, and medium-density
fibreboard (MDF) division having capacity of 600 cubic metres per day. The company
like other building material players is likely to be affected by weak demand on account
of country-wide lockdown led by COVID-19 pandemic. We believe the company is among
the few organised players to benefit from lower input costs and is expected to recover
at a faster pace once normalcy returns in the industry. Hence, we have a Buy rating on
the stock.
Info Edge (India) • Info Edge is India’s premier online classified company in the recruitment, matrimony, real
estate, education, and related service sectors. Naukri.com is a quality play and is
directly related to GDP growth and internet/mobile penetration. Info Edge indicated
that collections for Naukri and 99acres have declined meaningfully during the first two
months of Q1FY2021 on weak hiring activity and real estate demand. We expect
normalisation of growth in FY2022, along the expected lines with the recovery in
economy. The investee companies, particularly Zomato and PolicyBazaar, have been
progressing well in their respective businesses. We continue to derive comfort on Info
Edge’s business strength, with leading market share in key businesses.
Inox Leisure • Inox Leisure Limited (ILL), incorporated in 1999, is one of the largest multiplex
operators in India. ILL currently operates 147 properties (626 screens and over 1.44 lakh
seats) located in 68 cities across the country. The company accounts for 20% share of
multiplex screens in India and ~11% share of domestic box office collections. The ILL
mega show is supported by improving content quality in the Indian mainstream and
regional cinema, with its movies regularly hitting the Rs. 100 crore or Rs. 200 crore box-
office collection mark. A wash-out quarter as expected. However, cost management
remained robust amid shut-down of cinema; monthly cash burn was lowered by 25% to
Rs 11 - 12 crores. FY2021 is going to be a wash-out years owing to extended lockdown
restrictions, risk of box office clashes in short window and subdued occupancy in
2HFY2021; modeled strong recovery in FY2022E. The board has approved the enabling
resolution for fund raising up to Rs 250 Cr through the issuance of Equity Shares/other
securities after the re-opening of cinema. We maintain our Hold rating on stock owing
to delay in return of normalcy.
Relaxo Footwear • Relaxo Footwear (Relaxo) is present in the fast-growing footwear category, where it caters
to customers with its four top-of-the-mind recall brands, such as Hawaii, Sparx, Flite,
and Schoolmate. Relaxo’s focus is on driving sales through distribution expansion (COCO
and franchisee stores) and improving the brand presence. GST implementation has been
a silver lining for the company, as it is witnessing a gradual shift of demand from the
unorganised to organised market. The company is expected to enhance its current
capacity, which will add to revenue growth. Though FY2021 is expected to be subdued,
we expect a strong recovery in FY2022. We expect Relaxo to see early recovery post
normalisation of the lockdown because it will gain market share from unorganised
players, of a higher presence on e-commerce platform and higher demand for value-for-
money products. Lower per capita consumption in India, Relaxo’s lower penetration in
the South Indian market and sustained product additions remain the long-term growth
catalysts. This makes Relaxo one of our preferred picks in the discretionary consumption
space.
Titan Company • Titan is India’s largest specialty retail player, operating more than 1,600 stores spread
across over 2 million sq. ft. in 279 towns having businesses in jewellery, watches, and
eyewear. Revenue of Titan’s jewellery business reported a CAGR of 23% over FY2016-
FY2019. Sustained launch of new collections, expansion in domestic footprint, shift of
consumers to trusted brands, and strong growth in diamond jewellery remain the key
pillars of growth. The target is to achieve 2.5x sales and grab a 10% market share by
FY2023. In the eyewear business, Titan’s focus is to build a strong customer base
through a calibrated expansion plan and offer products at affordable prices. We expect
FY2022 to post strong recovery due to pent-up demand (mainly on account of
postponement of weddings and likely higher sales during the festive season), market
share gains from small players, and recovery in the watches and eyewear businesses. An
increase in scale of the watches and eyewear businesses along with expansion into tier-
II and tier-III markets and continuous shift from non-branded to branded jewellery
players would help Titan achieve consistent double-digit revenue growth and gradual
improvement in margin in the long run. With a lean balance sheet and strong financial
background, Titan is one of the best retail plays among peers.
Wonderla Holidays • Wonderla Holidays Limited (WHL) is the largest amusement park company in India with
over a decade of successful and profitable operations. WHL’s Q1FY2021 numbers were
affected due to non-operation of core assets (amusement parks in Bangalore, Kochi and
Hyderabad) as COVID-19 cases soared in India. However, if the pandemic normalises,
parks are expected to open up in H2FY2021 at 40-50% capacity. During non-operational
phase WHL took few strategic initiatives such as opening of ‘Wonder Kitchen’ at a low
capital expenditure of Rs. 50 lakh, customer engagement through digital platforms and
focus on reducing costs. Management is confident of domestic tourism recovering post
normalisation of the situation and achieving higher footfalls in a stable economic
environment (expects Bengaluru park footfalls to reach 1.25 million p.a. in the next 2-3
years). The company has acquired 61.87 acres of land for the new amusement park
project in Chennai. The company has liquid assets of Rs. 110 crore, which will take care
of near-term uncertainties during non- operational period. We expect FY2021 to remain
sluggish for WHL, while a recovery might be seen in FY2022. The sustenance of growth
in footfalls has to be keenly monitored in the coming quarters. Hence, we maintain our
Hold recommendation on the stock.
Diversified/Miscellaneous
Bajaj Holdings • Bajaj Holdings & Investment Limited (BHIL, erstwhile Bajaj Auto) was demerged in
December 2007, whereby its manufacturing business was transferred to the new Bajaj
Auto Limited and its strategic business consisting of the wind farm and financial
services businesses was vested with Bajaj FinServ (BFS). All the businesses and
properties, assets, investments and liabilities of erstwhile Bajaj Auto, other than the
manufacturing and strategic ones, now remain with BHIL. BHIL is a primary investment
company focusing on new business opportunities. Given the strategic nature of its
investments [namely BAL (Bajaj Auto Limited) and BFL (Bajaj Finserv Limited)], we
have given a holding company discount to its equity investments. Liquid investments
have been valued at cost. We retain our Buy recommendation on BHIL.
Bharat Electronics • Bharat Electronics Limited (BEL) is a defence PSU, with strong manufacturing and R&D
capabilities, good cost-control measures, growing indigenisation and a strong balance
sheet with improving return ratios. It manufactures electronics, communication and
defence equipment and stands to benefit from enhanced budgetary outlay for
strengthening and modernising India’s security. Further, the company is well positioned
to capture incremental spends by the government on defence through the Make- in-
India initiative. Q1FY20 performance adversely impacted owing to lower execution led
by COVID-19 led crisis resulting in revenue, EBITDA and PAT being lower by
21%/59%/75%y-o-y respectively. Order intake increased by 72.2% y-o-y and 19.3% q-o-q
to Rs 3,419 crore while order book remains healthy at Rs. 53,752 crore (4.2xits FY2020
revenue), which provides sustainable revenue visibility. A memorandum of
understanding (MoU) with the Airport Authority of India to create opportunities in the
global civilian airport business. We reiterate our Buy rating on stock.
Bharti Airtel • Bharti Airtel (Bharti) is one of the leaders in the Indian mobile telephony space.
Management continues to focus sharply on increasing retail ARPUs, non-mobile services
(enterprise services), and value-added services (Airtel TV and music) to boost revenue
and reduce the churn rate. Management has guided for ARPUs to move to Rs. 200 in the
short term and Rs. 300 in the medium term. Besides tariff hikes, ARPU increase will be
driven by increase in share of 4G subscribers, segmentation price hike for premium
users, and higher digitisation (bundling of multiple services like home broadband, DTH
and mobility). From a long-term perspective, explosive growth in the data segment,
rapid network expansion, and reach will help Bharti emerge stronger. We have a Buy
Coromandel • We like Coromandel International owing to its leadership position in key businesses led
International by high backward integration through joint ventures for sourcing of key raw materials
and strong distribution reach. The company delivers strong Q1 performance with
revenue, EBITDA and PAT rising by 51%, 111% and 4x y-o-y, respectively. The company
to speed up investments in high-growth crop protection business which is expected to
enhance profitability. Encouraging progress of monsoon and MSP hike for kharif crop
bodes well for a healthy demand off-take of its products. We believe Coromandel would
clock revenue & earnings CAGR of 11.0% & 17.5% over FY2020-22E, led by increase share
of non-subsidy business. We maintain our Buy rating on stock.
GDL • With its dominant presence in container freight station (CFS) and rail freight businesses,
Gateway Distriparks Limited (GDL) has evolved as an integrated logistics player. The
company’s CFS and rail verticals are expected to face a tough business environment on
account of both global and domestic trade disruption caused by COVID-19 led pandemic.
However, once normalcy returns along with commencement of dedicated freight
corridor (DFC), the demand environment is expected to improve. Additionally due to
comfort on valuation, we have a Buy rating on the stock.
PI Industries • Incorporated in 1947, PI Industries focuses on developing complex chemistry solutions in
the agri-science space. Company delivered strong performance during Q1FY21 in
challenging times with revenue, EBITDA and PAT rising by 41%, 50%, and 43%,
respectively. Demand environment remains encouraging in both domestic (normal
monsoon) and export markets (order book of $ 1.5 billion), guidance for over 20%
growth in each; capex guidance of Rs. 550-600 crore remains for FY2021E. Funds raised
via QIP to be deployed in 5-6 quarters and meet inorganic growth aspirations, which will
aid diversification as well. Moreover, opportunities in the export market are expected to
increase multifold as global MNCs and innovators would consider Indian players as their
preferred partners over China. We reiterate Buy rating on the stock.
Ratnamani Metals • Ratnamani Metals and Tubes Limited (RMTL) is the largest stainless steel tube and pipe
manufacturer in India. Management has guided revenue of Rs. 2,000 crore – Rs. 2,400
crore (implying a revenue decline of 7-23%. owing to slowdown in order inflows and
delay in commissioning of additional capacity) and margin in the range of 16-18%.
However, new stainless-steel plant would enable the company to manufacture import
substitute products, which would provide business visibility with entering into new
areas (i.e., oil exploration) in export markets. We remain positive on RMTL, led by its
strong balance sheet, ability to generate superior return ratios, and capacity expansion
programmes. Hence, we maintain our Buy rating on the stock.
Supreme Industries • Supreme Industries is a leading manufacturer of plastic products with a significant presence
across Piping, Packaging, Industrial and Consumer segments. Though the COVID-19 led
lockdown impacted Q1FY2020 results adversely with revenue, EBITDA and PAT
witnessing a decline of 26.7%, 30.0% and 53.5% respectively performance remained
above our expectation. Considering healthy demand prospects during FY2021-22E, the
company intends to incur a capex of Rs 350 crores to expand capacities mainly in piping
segment and packaging film segment. We believe that the company will be able to
deliver revenue and earnings CAGR of 6.9% and 10.7% respectively during FY2020-22E,
despite the company’s reluctance to provide annual guidance given the COVID-19 crisis.
We remain Positive on SIL from a long-term perspective, given recovery in the rural
economy, affordable housing sector, and the new scheme for piped water connection –
‘Nal se Jal’. Given positive demand outlook coupled with healthy cashflow generation
and a strong balance sheet, we retain our Buy rating on the stock. We retain out Buy
UPL • UPL is a global leader in agricultural solutions and has a healthy mix of high-value crops
and high-growth geographies. It has manufacturing facilities across 48 locations (earlier
34) and is present across more than 138 countries. Q1FY21 revenue fell by 1% as
volumes sold stayed unchanged, adjusted EBITDA margin improved by 508 bps to 21.8%;
adjusted PAT increased by 70.7%. Management eyes revenue growth of 6-8%, EBITDA
growth of 10-12% and net debt-equity ratio of 2x during FY2021E. We expect the
company to report revenue and earnings CAGR of 8.7% and 20%, respectively, during
FY2020-2022E. Long- term investors can consider accumulating the stock owing to
reasonable valuation and further strengthening of the balance sheet led by
deleveraging. We maintain our Buy rating on the stock.
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From the Editor’s Desk EQUITY

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Gush of money, wave of hope

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