Equirus Annual Virtual Conference Takeaways

India Equity Research
October 13, 2021

Earnings Preview
Equirus Annual Virtual Conference
Organized players gaining share; growing

export opportunities
➢ We hosted 60+ corporate is our Annual Virtual conference

➢ In many sectors like building material, logistics etc companies highlighted that post
GST and COVID, Un-organized players have been more impacted which has
benefitted organized players
➢ Companies from Building material, Chemicals, textiles indicated that post COVID,
customers in global markets are looking at China + 1 sourcing which is benefitting
Indian companies
➢ Tighter climate control norms in China are also benefitting Indian players in certain
industries
Following are some of the important sectoral takeaways:

Pharma API: Owing to power outages in China, all key raw-material prices have started
moving up. China is also moving up in the value chain as it is tightening climate control
policies and future focus would be formulations in China. China + 1 is getting real as
many companies globally are trying to de-risk their supply chain.
Building Material: Un-organized players are not fully recovered post COVID which is
benefitting organized players. Some of the managements indicated that smaller companies
are getting shut in Euro zone and larger companies are moving into value added products,
which is creating opportunities for Indian companies. Pick up in Real Estate has driven
demand in 2QFY22 which improved on MoM basis starting July.
FMCG: Bajaj consumer care management indicated that 2QFY22 started on the positive
note in July’21 but the revival slowed down since August’21 and it continued in
September;21 also. The weakness was mainly in the wholesale markets and it was
witnessed across some of the other discretionary categories also. Urban retail continues to
be decent but rural demand has been tapering off.
IT: Most of the companies are witnessing strong demand momentum, but industry is
witnessing higher attrition and increasing employee cost.
Logistics: Lot of change is happening in the logistics industry. GST was the first trigger for
huge changes to come in the logistics industry. With freight corridor opening, the rail
transport will come up in a big way. In distribution, cutting out the intermediaries will be
the way forward, it is expected that the intermediaries will slowly die, and the manufactures
will go direct to the retail.
Music Industry: India music industry size is about Rs. 1700-1800 crores and is estimated
to grow at 25-30% over the next 3-4 years. Subscription revenue is increasing, and it will
keep on increasing for the music companies. Amongst all the platforms which play the
music YouTube is the biggest one.
Real Estate: Commercial segment has witnessed an uptick post 2nd wave of Covid and
leasing enquires are gaining momentum
Textile: Client sourcing depends on type of garments - Knitted garments are preferred from
India, synthetic is preferred from China, denim from Bangladesh and high-end fashion
from Turkey. India, with a good history, is becoming a preferred sourcing destination with
China+1 strategy playing out.
Equirus Research
Research@equirus.com
Refer to important disclosures at the end of this report October 03, 2021| 1
India Equity Research | Earnings Preview
Contents
Aarti Drugs ............................................................................................................................ 2
Apex Frozen Foods ................................................................................................................. 2
Apollo Pipes Limited ............................................................................................................... 2
Aster DM ............................................................................................................................... 2
Bajaj Consumer Care Ltd. ....................................................................................................... 2
Birlasoft Ltd ............................................................................................................................ 2
Birlasoft Ltd ............................................................................................................................ 2
Crompton Greaves Consumer Electricals Ltd ............................................................................. 2
Carborundum Universal ltd...................................................................................................... 2
City Union Bank Ltd ................................................................................................................ 2
Creditaccess Grameen Ltd....................................................................................................... 2
DCB Bank Limited .................................................................................................................. 2
Dodla Dairy ........................................................................................................................... 2
Dollar Industries ..................................................................................................................... 2
DreamFolks ........................................................................................................................... 2
eClerx Services Ltd .................................................................................................................. 2
Equitas small Finance Bank ..................................................................................................... 2
Fedbank Financial Services ...................................................................................................... 2
Federal Bank Ltd .................................................................................................................... 2
Gati ...................................................................................................................................... 2
Greenlam Industries Ltd........................................................................................................... 2
Greenpanel Industries Ltd. ....................................................................................................... 2
HCG Enterprise Ltd. ................................................................................................................ 2
Heritage Foods ...................................................................................................................... 2
Hexagon Nutrition .................................................................................................................. 2
Hindustan Aeronautics ............................................................................................................ 2
Home First Finance Company India Ltd .................................................................................... 2
Jindal Worldwide ltd ............................................................................................................... 2
Jubilant Pharmova Ltd ............................................................................................................. 2
KNR Constructions Ltd ............................................................................................................ 2
KRBL ..................................................................................................................................... 2
L&T Technology Services ......................................................................................................... 2
Mahindra Logistics .................................................................................................................. 2
Manappuram Finance............................................................................................................. 2
Max Ventures and Industries Limited ......................................................................................... 2
Nazara Technologies .............................................................................................................. 2
NESCO Ltd ............................................................................................................................ 2
Nitin Spinners ltd .................................................................................................................... 2
Orient electric ltd.................................................................................................................... 2
PDS Multinational Fashions Ltd. ............................................................................................... 2
Polycab ................................................................................................................................. 2
Prince Pipes & Fittings Ltd ........................................................................................................ 2
Radico Khaitan ltd. ................................................................................................................ 2
RBL ....................................................................................................................................... 2
Rolex Rings Limited ................................................................................................................. 2
S P Apparels Ltd. .................................................................................................................... 2
South Indian Bank Ltd ............................................................................................................. 2
Spandana Sphoorty Financial Ltd ............................................................................................. 2
Sterlite Technologies ............................................................................................................... 2
Surya Roshni Limited ............................................................................................................... 2
Symphony Limited ................................................................................................................... 2
The Waterbase ....................................................................................................................... 2
Tips Industries ........................................................................................................................ 2
Torrent Pharmaceuticals Ltd ..................................................................................................... 2
Zensar Technologies Limited .................................................................................................... 2
October 03, 2021| 2

India Equity Research | Telecom services
September 30, 2021
Company Update
Aarti Drugs
Shortages to aid growth
➢ Aarti drugs indicated past quarter has seen softness in the margin owing to higher raw
material prices, which will be passed on in subsequent quarter. Consequently, it expects
a gradual improvement in 2Q and expects 2H to be far superior.
➢ Owing to power outages in China, all key raw-material prices have started moving up
and it believes China is moving up in the value chain as it is tightening climate control
policies and future focus would be formulations than China. Therefore volumes to
move to other countries mainly India.
➢ To surprise, Aarti stated inventories in the channel are not high and thus there would
be a room for price increases if China power outage be there for long.
➢ China + 1 is getting real as many companies globally are trying to de-risk their supply
chain. It remains cautiously optimistic and expanding capacities to meet the growing
demand.
Sales Breakup: It derives majority revenues from API (77%), followed by Formulation (8%),
and Intermediates & Specialty Chemicals (15%). Exports forms 37%, rest 63% are derived
from domestic market in FY21.
The turnover in FY22 is projected to be at around Rs. 4.5bn-50bn. Currently, majority of
its sales are D2C, and they have very limited sales through distributors.
Product Portfolio composition: Their top product contributes approximately 17% towards
its topline while their top 10 products contribute approximately 65%.
Client Base: Aarti Drugs has a strong presence in the domestic market with over 300+
clients and their top client contributes less than 4% towards their revenue which indicates
that its client base is strong with no major dependency on a select few clients.
Capex plans: The company plans to setup a Rs. 5.5-6bn crore worth greenfield plant to
expand in the specialty chemicals, anti-diabetic and skin treatment space. Currently, the
capacity utilization in these plants is at around 70%.
RM Procurement: 50% of its raw materials are imported. Out of which 80% is from China.
The company has plans for backward integration to reduce dependence on China and has
also identified alternative domestic suppliers for some its imported raw materials but there
are still some important raw materials for which alternative suppliers are not available
currently.
Margins: Their June margins suffered because of cost escalations due to supply disruptions Relative price chart
from China. Sep quarter is projected to be better and Dec even better as it takes times to TRP IN Nifty Index
5,100
pass on price increase to customers.
Inventory Levels: Though it is found that other pharma companies are keeping inventory 4,505
levels higher compared to earlier to mitigate the risk of supply disruptions, Aarti Drugs 3,910
mentioned inventory in channel is at lower end. 3,315
Price trends: The June’21 quarter prices were higher than the Dec’20 quarter, and the 2,720
prices are projected to move further upwards. 2,125

Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Financial Summary Analsyts

EV/ Core EBITDA Bharat Celly
YE Mar Recurring P/E P/B ROE
Sales EBITDA EPS (Rs) EBITDA ROIC Margin bharat.cellyl@equirus.com
Rs mn PAT (x) (x) (%)
(x) (%) (%) +91-079 6190 9524
FY21A 50,233 9815 5235 15.1 67.6 10.1 40.3 14.9 16.2 19.5
FY22E 57,694 13591 6757 31.1 32.9 6.6 28.7 13.6 19.0 23.6
FY23E 69,233 16684 9611 26.5 38.5 5.7 23.5 14.9 18.5 24.1
FY24E 83,079 20403 11900 32.8 31.1 5.0 19.3 16.0 19.0 24.6
Source: Company, Equirus Securities
India Equity Research | Consumer Discretionary
September 30, 2021
Equirus Virtual Annual Conference
Apex Frozen Foods
About the Company: Apex Frozen Foods Limited is one of the integrated producer and
exporter of processed ready-to-cook shrimp in India. It is fully integrated company with
presence across the value chain - Hatchery Farming Processing and Exporting of Shrimp.
The company's output majorly comprises of variants of processed White leg shrimp
(L.Vannamei) and small quantities of Black Tiger shrimp (P. Monodon) in frozen form; and
is sold under the brands owned by customers and also through the company's own brands
Represented by: Mr. Choudary Karuturi - Executive Director
Below are the Key Takeaways:

Business Overview
• Majority of the exports by Apex is towards US market and the second largest
(20%+) market is EU. In 2020, company has commissioned new greenfield
project, the new processing plant, utilizing the proceeds of IPO. Out of the total
capacity of 29,200 MT, 5,000 is ready to eat.
• Realization in ready to eat is higher by $1.5-2 per kilo and margins by 50 cents
to $1 per kilo as compared to ready to cook. Ready to Eat utilisation was 15% in
FY21 and in last quarter it was 21%. Total capacity utilisation was 41% in FY21.
Capacity utilisation is predominantly dependent on supply situation and good
customer relationships.
• Export to US has increased from India at the cost of exports to China. Average
sailing/shipment time has moved up by two weeks due to logistical challenges.
Demand has remained strong, and it is higher than the pre COVID level, but
logistics is the major issue.
Logistical Challenges
• Company has been facing the wrath of COVID 19 mainly because of the logistic
issues. All the shipments are done by sea using the refer containers and it takes
anywhere between 20-60 days dependent on the destination countries. There is
huge shortage of refer containers. Logistics continue to be a challenge with
regards to lack of equipment which is the refer container or containers being held
up at various ports overseas and this has caused trouble to the export businesses.
• Customers have supported in reimbursing the increased freight costs. Freight costs
have increased by 500%. Customers have been revising the pricing in the current
orders considering the increased freight. However, complete increase in the freight
cost is not reimbursed. When refer containers were not available at the east coast
ports, company has even gone to the JNPT port for shipment. In terms of logistics,
there has not been any significant improvement as compared to 1Q. Company
continues to do maximum 2-4 shipments per week. Company is doing limited
shipment via JNPT. In US, a lot of truckers and staff in the container terminals
have not yet returned to work and this has led to huge delays and containers being
stuck.
Supply Side Challenges
• There have been few issues with regards to supply in past few months. There was
early premature harvest of smaller sizes of shrimp. Medium and large sizes are
affected as the shrimps are prematurely harvested as smaller size. So, for larger
sizes, this year company has sourced products from Haryana. Farm gate prices Analsyts
have significantly improved over the past few months, and this has become very Depesh Kashyap, CFA
lucrative scenario for the farmers and thus farmers are stocking. depesh.kashyap@equirus.com
+91- 7228934327
Piyush Sevaldasani
piyush.sevaldasani@equirus.com
+91-9767990926
India Equity Research | Building Materials
Apollo Pipes Limited

Well on-track to achieve revenue target
➢ Demand scenario was robust during the quarter with situation starting to improve from
July and carrying the momentum thereon. This was largely driven by strong uptick in
real estate space. Further, agri demand is also expected to pick-up in 2H22 on healthy
monsoon during the year.
➢ Company is on track for achieving Rs 10bn revenue target by FY23 with 14-15%
EBITDAM. In the long run, company expects the EBITDAM to move to 16-17% with
increase in utilizations to ~55%.
➢ New products i.e. Bathroom fittings, solvent cement and storage tanks are getting good
response and expected to ramp-up quickly. These products currently comprise ~5-
10% of revenue currently which will go above 10% by FY23.
Gradual move to value added products: Management plans to improve the building
material to agri mix from 50:50 in 1Q22 to 60:40 in by FY23 and 70:30 by FY24. Further,
management has mentioned that since launch of CPVC products by the company 3 years
back, growth in CPVC products has been higher than the overall growth in revenue.
Currently it is in high single digit as % of overall revenue and management plans to take it
to 15-20%. Furthermore, fittings are currently 20% of total revenue which are expected to
grow to ~25% as company grows its CPVC portfolio.
Balance Sheet position remains strong: Company remains net cash positive despite Raipur
capex with robust cash flows. Further, WC days which were earlier stretched to over 50 days
due to low creditors days are now normalized and currently remains ~40-50. Company
plans to further reduce WC days to 40 days.
Capacity & distribution expansion plans: With Raipur plant commissioning, company’s
capacity reached 125,000MTPA. Further, management plans to spend ~15-20% of its
EBITDA every year on capacity addition thereby increasing its capacity by ~15% every year.
Further, company also plans to expand its distributors by 10-15% every year. Retail
touchpoints are 12,000-15,000 currently which will grow by 10-15% every year.
Other takeaways:
• Company is targeting Rs 250mn A&P expense next year (Rs 80-100mn on BTL activities
and Rs 150mn on ATL activities) i.e. 2.5% of revenue.
• Management has mentioned that the company is targeting to capture market share
from lower half of top 15 players rather than the top 5 players. Management has stated
that company is currently a tier-2 brand in the sense that they offer similar quality &
service as of a tier-1 brand but at 4-5% lower price. Company intends to remain in tier-
2 space for another 3-4 year as it offers a higher CAGR and then eventually move to
tier-1 category.
• Currently, 70% of PVC is imported and balance domestic vs earlier 90% imported.
Financial Summary
EV/ Core EBITDA Analysts
YE Mar Recurring EPS ROE
Sales EBITDA P/E (x) P/B (x) EBITDA ROIC Margin
Rs mn PAT (Rs) (%) Pranav Mehta
(x) (%) (%)
pranav.mehta@equirus.com
FY21A 5,181 742 445 33.9 52.4 6.6 31.1 13.5 13.3 14.3
+91-07961909514
FY22E 5,808 755 454 34.7 51.3 5.9 30.5 12.1 11.3 13.0
Aman Agrawal
FY23E 7,298 978 612 46.7 38.1 5.1 23.5 14.3 13.7 13.4 aman.agarwal@equirus.com
FY24E 9,259 1,269 821 62.6 28.4 4.4 18.1 16.7 16.3 13.7 +91-079 6190 9526
September 30, 2021
Company Update
Aster DM
Value unlocking on cards
➢ Incorporated in 1987 with a single clinic in Dubai and expanded to 27 Hospitals, 115
Clinics and 223 Pharmacies across GCC and India.
➢ Aster derives majority revenues from GCC (80%) and rest from India (20%). Amongst
GCC it is present in 7 countries inc. UAE, Saudi Arabia, Qatar and Oman.
➢ It is working on minority share-holder value unlocking. It is evaluating multiple avenues
viz. demerger of GCC and Indian operation, GCC asset monetization, etc. It is
evaluating options and will have concrete plans in the ensuing quarters.
➢ GCC capex per bed is almost 2x of India spend; however, revenues are almost 4-5x
and therefore ROIC stands tall in GCC than India.
➢ Looking to enter new avenues viz. Diagnostics and pharmacies to reach to patient
directly. Its goal is to start with southern region and later-on expand to other regions.
In Pharmacies its targeting omnichannel presence.
Impact of COVID receding: Things back to normalcy. GCC back to normal. 90%
population is vaccinated. Not significant impact of wave.
Shareholder value enhancement: Exploring multiple avenues to enhance minority value
with a) demerger of International and domestic value biz, b) some businesses in GCC they
can sell, and capital could be deployed in India, c) PE investment come in- GCC separate
listing. It is still under evaluation and could take couple of months before final decision is
reached.
Investment: GCC- spend per bed is almost 2x times of India spend, however, revenues are
almost 4-5x and therefore ROIC stands tall in GCC than India. Expansion will be in South
and West then will move to rest part of India.
• GCC investment has been has higher in past years since insurance was made
mandatory in UAE, resulting in better growth. In GCC it takes 36 months to reach
maturity and 18 months for breakeven.
• While in India it takes 24-30 months for breakeven, and maturity takes upto-6
years- usually considered at 60% occupancy.
Relative price chart
Expansion areas: Looking to enter new avenues viz. Diagnostics and pharmacies to reach SOTL IN Nifty Index
to patient directly. Its goal is to start with southern region and later-on expand to other 340
regions. In Pharmacies its targeting omnichannel presence. 290
Growth guidance: In GCC it is targeting low double-digit growth, while in India growth of 240
30%. 190
Capex Guidance: Capex for next 3 year- 580cr. 50% will be in India. 50% towards GCC 140
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
& Keyman. Even after capex they will generate FCF. They will continue reduce debt.
Source: Bloomberg
Analsyts
Bharat Celly
bharat.cellyl@equirus.com
+91-079 6190 9524
India Equity Research | FMCG
October 02, 2021
Company Update
Bajaj Consumer Care Ltd.
Near term demand challenging; Long term

growth drivers intact
➢ Steps such as strengthening of the core ADHO brand, focussing on new amla hair oil
and coconut hair oil launches, strengthening of Van sales in the rural areas and scaling
up distribution would be the key focus areas for the company
➢ Prices of key RM such as refined mustard oil still remain at elevated levels and are likely
to remain so in near term. A&P spends will likely remain elevated to support brands.
➢ Price hikes in Oct’21 will be taken to protect margins and new brand launch in the E-
commerce channel is expected.
➢ Bajaj Consumer Care’s (BAJAJCONS) indicated that the near term demand scenario,
especially in the wholesale channel has been challenging over the past two months.
➢ Management has retained guidance of 25%+ EBITDA margins. As the building blocks
in terms of new hiring in middle and upper management, building of portfolio,
distribution expansion are in place, BAJAJCONS remains well placed to capture
growth in the long term
➢
Revival slows down due to weakness in the wholesale market: Management indicated that
2QFY22 started on the positive note in July’21 but the revival slowed down since August’21
and it continued in September;21 also. The weakness was mainly in the wholesale markets
and it was witnessed across some of the other discretionary categories also. Urban retail
continues to be decent but rural demand has been tapering off. East India, Bihar, Eastern
Uttar Pradesh are some of the areas where the demand is weak while remaining markets
are seeing good demand.
Margins likely to be protected led by price hikes and cost savings: The prices of some of
the key RM such as Refined mustard oil remains at an elevated level and management
expects it to remain elevated in near term. Price hikes (~3% in Oct’21 planned) are likely
to come into the picture in 3QFY22. Cost saving initiatives across the board along with
price hikes wil protect the EBITDA margins to an extent.
Recently launched products gaining traction: BAJAJCONS had recently launched Bajaj
Amla aloe vera and Bajaj coconut oil. Amla oil is currently having monthly run rate of cRs
40mn and it is gaining market share in some of the states such as Punjab (high single digit
share), MP and Rajasthan. Coconut oil has been gaining traction in the state of
Maharashtra and BAJAJCONS will gradually scale it up in South India.
Building blocks falling into place: Management indicated that the teams across the most Relative price chart
functions are falling into place as far as mid and senior level leadership is concerned. Van 350
BAJAJCON IN Nifty Index
initiatives have been rationalized and BAJAJCONS is seeing good placement and
300
assortment of products and it will continue with these initiatives and make it more efficient
in coming qtrs. New launches are scaling well. Execution of recent initiatives will take 18- 250
24 months to translate into robust business performance but BAJAJCONS remains 200
directionally on the right path. 150

Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Ronak Soni
Sales EBITDA EPS (Rs) EBITDA ROIC Margin
Rs mn PAT (x) (x) (%) ronak.soni@equirus.com
(x) (%) (%)
FY21A 9,146 2,435 2,236 15.2 16.7 4.8 15.4 30.7 218.4 26.6 +91-8130631728
FY22E 10,265 2,670 2,442 16.6 15.3 4.4 14.1 29.9 269.3 26.0
FY23E 11,290 3,036 2,742 18.6 13.6 4.0 12.4 30.8 255.3 26.9
FY24E 12,461 3,391 3,042 20.6 12.3 3.7 11.1 31.5 262.0 27.2
India Equity Research | IT Services
October 02, 2021
Company Update
Birlasoft Ltd
CMP Target Price
Rs 397 Rs 470
Optimistic on demand but attrition led Sep 2022
challenges seem rising in near term

Rating Upside
LONG 18% ()
Estimate Revision
➢ Birlasoft is witnessing healthy demand environment (even for enterprise solutions) on
Forecasts % Change
the back of pent-up demand as well as new transformational initiatives of clients.
➢ Regarding nature of pipeline and deal wins, it is seeing some shift from large multi- (Rs mn) FY22E FY23E FY22E FY23E
year transformational projects to multiple smaller deals of shorter duration. Further with Sales 40,143 46,722 NA NA
increased focus on cross selling, Birlasoft now derives more incremental revenue from EBITDA 6,462 7,329 NA NA
cross selling initiatives. PAT 4,691 5,398 NA NA
➢ Like peers even Birlasoft acknowledged that supply side pressures are intensifying
EPS 16.3 18.8 NA NA
leading to increased subcontracting cost, employee hiring and retention cost. It expects
that supply side pressures to sub side by the end of CY21E/FY22E. Stock Information
➢ In the near to medium term Birlasoft is focusing to curtail the impact on demand from
Market Cap (Rs Mn) 1,10,270
supply side issues and expects to regain any near-term margin loss over medium to
long term through various initiatives. 52 Wk H/L (Rs) 458/172
Avg Daily Volume (1yr) 24,52,635
Avg Daily Value (Rs Mn) 12.4
Optimistic on demand: Birlasoft continues to witness good demand momentum and Equity Cap (Rs Mn) 555
expects it to continue at least for next 2-3 years. Among verticals, Birlasoft is witnessing Face Value (Rs) 2
healthy demand traction in BFSI, Lifesciences and Hi-Tech with some improvement even Share Outstanding (Mn) 277.7
seen in oil/gas. Healthy demand is led by both pent up as well as increasing digital
Bloomberg Code BSOFT IN
adoption by clients leading to new transformation led projects. Birlasoft has been also
witnessing trend of larger transformational projects getting divided into smaller projects Ind Benchmark BSE IT
due to which project TCV getting reduced however ACV is increasing. Post cloud adoption
Birlasoft expects material rise in demand from cloud native application development and Ownership (%) Recent 3M 12M
hyper automation related services. Promoters 40.67 (0.0) (0.1)
Improving demand for enterprise solutions as well: Even on enterprise solutions projects DII 19.61 2.0 10.9
which were put on hold at the beginning of the pandemic are now coming back for
FII 17.29 (0.1) (7.9)
discussion (even for SAP practice). Regarding cloud adoption in enterprise solutions,
Birlasoft is witnessing that clients are preferring best of breed software/platform rather than Public 22.43 (1.8) (3.0)
choosing one and are migrating to multiple cloud platforms. This is resulting into higher
work relating to system integration, multi cloud management, testing for system integrators.
Rising supply side issues: Like peers Birlasoft is also witnessing higher supply side pressures
and resultantly increase in attrition (16.5% in 1QFY22 vs. 11.6%/10.9% in
4QFY21/3QFY21 on LTM basis). However, it believes that these challenges will get
stabilized by end of CY21E/FY22E. To manage these challenges, Birlasoft is focusing on Relative price chart
increasing the intake of fresh engineering graduates, train and upskill them and replace BSOFT IN Nifty Index
the rising use of sub-contractors currently. In the near to medium term Birlasoft is focusing 465
to curtail the impact on demand from supply side issues and expects to regain any near-
390
term margin loss over medium to long term through various initiatives as discussed above
and also through growth leverage. 315
240
165
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Sandeep Shah
Rs mn PAT (x) (x) (%) sandeep.shah@equirus.com
(x) (%) (%)
FY21A 35,557 5,292 3,208 11.2 35.6 5.2 18.7 15.8 18.9 14.9 022-43320673
FY22E 40,143 6,462 4,691 16.3 24.3 4.5 14.9 19.9 24.9 16.1 Meet Rachchh
meet.rachchh@equirus.com
FY23E 46,722 7,329 5,398 18.8 21.2 3.9 12.7 19.8 26.8 15.7
+91-9892707286
FY24E 54,324 8,386 6,312 22.0 18.1 3.4 10.6 20.2 29.8 15.4
October 02, 2021
Company Update
Birlasoft Ltd
CMP Target Price
Rs 397 Rs 470
Optimistic on demand but attrition led Sep 2022
challenges seem rising in near term

Rating Upside
LONG 18% ()
Estimate Revision
➢ Birlasoft is witnessing healthy demand environment (even for enterprise solutions) on
Forecasts % Change
the back of pent-up demand as well as new transformational initiatives of clients.
➢ Regarding nature of pipeline and deal wins, it is seeing some shift from large multi- (Rs mn) FY22E FY23E FY22E FY23E
year transformational projects to multiple smaller deals of shorter duration. Further with Sales 40,143 46,722 NA NA
increased focus on cross selling, Birlasoft now derives more incremental revenue from EBITDA 6,462 7,329 NA NA
cross selling initiatives. PAT 4,691 5,398 NA NA
➢ Like peers even Birlasoft acknowledged that supply side pressures are intensifying
EPS 16.3 18.8 NA NA
leading to increased subcontracting cost, employee hiring and retention cost. It expects
that supply side pressures to sub side by the end of CY21E/FY22E. Stock Information
➢ In the near to medium term Birlasoft is focusing to curtail the impact on demand from
supply side issues and expects to regain any near-term margin loss over medium to Market Cap (Rs Mn) 1,10,270
long term through various initiatives. 52 Wk H/L (Rs) 458/172
Equity Cap (Rs Mn) 555
Optimistic on demand: Birlasoft continues to witness good demand momentum and Face Value (Rs) 2
expects it to continue at least for next 2-3 years. Among verticals, Birlasoft is witnessing
Share Outstanding (Mn) 277.7
healthy demand traction in BFSI, Lifesciences and Hi-Tech with some improvement even
seen in oil/gas. Healthy demand is led by both pent up as well as increasing digital Bloomberg Code BSOFT IN
adoption by clients leading to new transformation led projects. Birlasoft has been also Ind Benchmark BSE IT
witnessing trend of larger transformational projects getting divided into smaller projects
due to which project TCV getting reduced however ACV is increasing. Post cloud adoption Ownership (%) Recent 3M 12M
Birlasoft expects material rise in demand from cloud native application development and
Promoters 40.67 (0.0) (0.1)
hyper automation related services.
DII 19.61 2.0 10.9
Improving demand for enterprise solutions as well: Even on enterprise solutions projects
FII 17.29 (0.1) (7.9)
which were put on hold at the beginning of the pandemic are now coming back for
discussion (even for SAP practice). Regarding cloud adoption in enterprise solutions, Public 22.43 (1.8) (3.0)
Birlasoft is witnessing that clients are preferring best of breed software/platform rather than
choosing one and are migrating to multiple cloud platforms. This is resulting into higher
work relating to system integration, multi cloud management, testing for system integrators.
Rising supply side issues: Like peers Birlasoft is also witnessing higher supply side pressures
and resultantly increase in attrition (16.5% in 1QFY22 vs. 11.6%/10.9% in
4QFY21/3QFY21 on LTM basis). However, it believes that these challenges will get Relative price chart
stabilized by end of CY21E/FY22E. To manage these challenges, Birlasoft is focusing on BSOFT IN Nifty Index
increasing the intake of fresh engineering graduates, train and upskill them and replace 465
the rising use of sub-contractors currently. In the near to medium term Birlasoft is focusing 390
to curtail the impact on demand from supply side issues and expects to regain any near-
315
term margin loss over medium to long term through various initiatives as discussed above
and also through growth leverage. 240
165
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
(x) (%) (%)
FY21A 35,557 5,292 3,208 11.2 35.6 5.2 18.7 15.8 18.9 14.9 022-43320673
FY22E 40,143 6,462 4,691 16.3 24.3 4.5 14.9 19.9 24.9 16.1 Meet Rachchh
FY23E 46,722 7,329 5,398 18.8 21.2 3.9 12.7 19.8 26.8 15.7
+91-9892707286
FY24E 54,324 8,386 6,312 22.0 18.1 3.4 10.6 20.2 29.8 15.4
India Equity Research | Consumer Durables
October 02, 2021
Company Update
Crompton Greaves Consumer Electricals Ltd

CMP Target Price
Rs 489 Rs 511
Targets to foray into new category; focus on
new categories & distribution
Rating Upside
ADD 4% ()
Estimate Revision
➢ After disruption caused by covid 2.0 in 1QFY22, CROMPTON has been witnessing Forecasts % Change
fair amount of recovery post June’21. July-Aug’21 ended on a positive note as (Rs mn) FY22E FY23E FY22E FY23E
compared to July-Aug’19. NA NA
Sales 57,042 64,584
➢ CROMPTON plans to foray into a new category in coming 6-8 months. EBITDA 8,304 9,741 NA NA
PAT 6,588 7,448 NA NA

➢ CROMPTON has been generating additional revenue of Rs 200mn every month under
its ‘Go-to-Market’ strategy which aims to target towns with 25,000-100,000 EPS 10.5 11.9 NA NA
population.
Stock Information
➢ In fans, CROMPTON remains market leader with market share of 27%. CROMPTON Market Cap (Rs Mn) 3,06,876
aims to take it above 30% in couple of years.
52 Wk H/L (Rs) 513/260
➢ Central R&D facility is likely to give synergy benefits to CROMPTON. Avg Daily Volume (1yr) 18,54,887
Commodity headwinds managed well:
In last ten months, cost has gone up by 20-25%. CROMPTON has been able to mitigate
Equity Cap (Rs Mn) 19,314
80-85% of cost escalation through combination of price increase, cost savings and change
in sales mix. CROMPTON never lost a revenue due to unavailability of raw material. Face Value (Rs) 2
CROMPTON prepared alternate designs and planned advance buying to the extent Share Outstanding (Mn) 627.8
possible. CROMPTON took 15-17% price hike across category.
Bloomberg Code CROMPTON IN
ECD Segment:
Ind Benchmark SPBSMIP
1. Fans Business: CROMPTON expects pressure on demand front once BE change norms
gets implemented mainly due to increase in prices. CROMPTON’s fans reach in urban Ownership (%) Recent 3M 12M
store ~ 65% (Total urban store – 150K-200K). CROMPTON aims to be market leader in
every geographical market. Premium fans contribution increased from 7% to 20%. Promoters 0.0 0.0 0.0
CROMPTON aims to # Number 1 player in premium fans. DII 0.0 0.0 0.0
2. Water Heaters: CROMPTON’s water heater reach in urban stores is 20% (total urban FII 0.0 0.0 0.0
stores – 100K). CROMPTON has been fastest growing player in last two years. Currently, Public 0.0 0.0 0.0
CROMPTON is #Number 2 or #Number 3 player.
3. Appliances & Others: CROMPTON’s market share in Air-cooler is ~6-7% which is
expected to grow to double digits in next 12-18 months mainly on the back of improved
product range. CROMPTON’s air cooler reach in urban stores is ~ 15%. In Geyser,
CROMPTON has grown from #Number 7 to #Number 2 player in the market.
CROMPTON also started working on small appliances mainly led by mixer grinders.
Lighting Segment: CROMPTON IN Nifty Index
Mainly on the back of price stability in B2C business, CROMPTON has been able to 525
convert volume growth in top-line growth. B2B business continues to struggle mainly due 450
unstable prices and demand pressure and it will take 12-18 months to stabilize. 375
CROMPTON’s lighting business reach in urban stores ~ 32-33% (Philips ~ 60%).
300
225
Sep-21
Sep-20
Mar-21
Jun-21
Dec-20
Source: Bloomberg

EV/ Core EBITDA Manoj Gori
Sales EBITDA EPS (Rs) EBITDA ROIC Margin manoj.gori@equrius.com
(x) (%) (%)
+91-079 6190 9523
FY21A 48,035 7,205 6,167 9.8 49.8 15.9 41.1 36.3 53.8 15.0
Deep Shah
FY22E 57,042 8,304 6,582 10.5 46.6 13.2 35.3 30.9 59.9 14.6 Deep.shah@equirus.com
FY23E 64,584 9,741 7,448 11.9 41.2 11.1 29.6 29.2 58.0 15.1 079-7359725344
FY24E 72,143 11,257 8,633 13.8 35.5 9.2 25.1 28.3 58.1 15.6
India Equity Research | Capital Goods
September 30, 2021
Company Update
Carborundum Universal ltd.

.
Outlook positive on all fronts
➢ While the supply chains disruptions like semiconductor and freight container shortages
are likely to inflate RM prices further, CUMI is well placed with its established RM
facilities to gain cost advantage over its foreign competitors facing cost pressures.
➢ CUMI aims to increase its market reach of coated abrasives globally (mainly domestic
currently) by targeting specific markets like hardwood flooring and metal grinding.
➢ Increasing adoption of alternate energy sources like solid oxide fuel cells (SOFC),
hydrogen fuel cells (HFC) present sizeable opportunities for CUMI’s ceramics products.
It has also forayed into EV with customers in Japan.
➢ CUMI’s Russia and India electrominerals plants have been benefitting from China +
1 strategy adopted by various customers. Russia plant with its ~90,000 tons Silicon
Carbide capacity commands ~8% market share globally (~50% capacity in China)
and is in the process of adding another ~10,000 tons.
Abrasives – cost advantage in an inflationary scenario: Management expects operational

hiccups to continue due to supply chain issues like semiconductor shortages impacting
auto industry, container shortages impacting RM prices etc. With its established RM
facilities, CUMI is witnessing a significant cost advantage over its foreign competitors as
this scenario is expected to sink further. Its new coated maker has enabled a better cost
position in the coated abrasives market (~Rs 12-13bn market, growing at ~8-10% p.a).
Ceramics – new opportunities emerge: Management is witnessing healthy demand for its
ceramics products for alternate energy sources like SOFCs and HFCs. Push by the
incumbent US government on alternative sources of energy is a new positive. In EV, CUMI
has been increasingly participating in electrical systems similar to vacuum circuit breakers
in 2W/4W industry. CUMI aims to be a global leader in Metz Cylinder (currently trails
Korean players) and has also expanded its capacity to cater the same. These products are
largely used as vacuum interrupter in a MV/HV circuit breaker for both power generation
and T&D and are supplied to global giants like ABB, Siemens, Schneider Electric etc.
Electrominerals – tracking better consistently: Both India and Russia plants have been
benefitting from alternate sourcing (China+1) by customers. CUMI’s Russia plant is the
largest single location plant manufacturing Silicon Carbide (SiC) with a capacity of
~90,000 tons (utilization of ~85,000 tons; ~8% market share) and enjoys a significant Relative price chart
cost advantage through (a) owned silica sand mines (b) washing plant (for higher purity)
CU IN Nifty Index
1,050
and (d) rich reserves of raw petroleum coke in Russia. CUMI is adding new furnaces to 870
expand SiC capacity by ~10,000 tons. In advanced materials, CUMI is working towards 690
production of SiC for semiconductors with 99.999% purity and is also coming up with 510
graphene-based products along with graphene intermediates. 330
150
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Analsyts
Financial Summary
Harshit Patel
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE harshit.patel@equirus.com
(x) (%) (%) +91-079 6190 9522
FY21A 26,317 4,656 2,987 15.8 55.4 7.8 19.4 15.0 18.6 17.7 Mayank Chaturvedi
FY22E 30,618 5,178 3,450 18.2 48.0 6.8 30.7 15.2 19.2 16.9 mayank.chaturvedi@equirus.com
FY23E 34,878 6,124 4,120 21.7 40.2 6.0 25.6 16.0 20.9 17.6 +91-079 6190 9531
FY24E 39,146 7,010 4,743 25.0 34.9 5.3 22.1 16.2 22.6 17.9
India Equity Research | BFSI
October 02, 2021
Company Update
City Union Bank Ltd
Guidance intact; collections still impacted by

non-functioning of court
➢ Business activity levels have picked up with capacity utilization levels at pre-covid levels
and investment cycle is likely to pick up in next 2-3 quarters
➢ Barring tourism, hotels, educational sector and PV transporters, all the segments have
almost returned to pre-covid levels.
➢ On recovery and collections, Management highlighted that courts have still not
returned to 100% functioning which is leading to delayed recoveries
➢ Management retained its guidance of FY22E loan growth to be in mid-to-high single
digits. From FY23, low teen growth is pretty much achievable
➢ GNPA/NNPA levels at FY22-end are likely to be better than FY21 levels with slippages
in FY22 being lower than FY21. Further, PCR (ex-TWO) is likely to be maintained
around 40%
➢ NIMs are likely to be in the range of 3.8-4% on a sustainable basis
• There have been some restructuring during the quarter. SMA-2 book as of 1QFY22-
end stood at 3.16. Management highlighted the SMA-2 book was 5-6% pre-COVID,
but is likely to stabilize between 3-3.25% due to increased discipline among borrowers
• CUBK have been facing competition from new generation banks for the past 10 years.
Every year, CUBK usually lose around 1% of their customer base to new generation
banks. However, currently, regional banks and new generation banks are gaining
market share from public sector banks which has helped the bank in growing the book
• With respect to Account aggregator, Management expects it to be a hygiene factor
which will be adopted by all banks and impact on CUBK is expected to be neutral
• In Jul’21, CUBK has linked the employee expenses to the performance. Bank has fully
migrated to cost to company basis across all the domains of the bank, similar to new
generation banks

CUBK IN Nifty Index
220
195
170
145
120
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
YE Credit Rohan Mandora
EPS ABVPS P/ABV ROE RoA
Mar NII PPOP PAT P/E (x) cost
(Rs) (Rs) (x) (%) (%) rohan.mandora@equirus.com
Rs mn (bps)
+91-079 6190 9529
FY21A 18,297 14,838 5,928 8.0 64.5 19.8 2.5 10.6 1.2 225.7
Lalit Deo
FY22E 20,090 15,849 6,702 9.1 72.7 17.5 2.2 10.9 1.2 183.3
lalit.deo@equirus.com
FY23E 22,271 17,490 8,106 11.0 82.8 14.5 1.9 11.9 1.3 160.1 +91-079 6190 9533
FY24E 25,271 19,724 9,769 13.2 94.1 12.0 1.7 12.7 1.4 140.6
Source: Company, Equirus Research
India Equity Research | NBFC
October 01, 2021
Company Update
Creditaccess Grameen Ltd
PAR improves across buckets in Aug’21
➢ CreditAccess’ (CREDAG) disbursements have revived to pre-COVID levels in Jul’21,

while focus has shifted from existing customers in Jun-Jul'21 (loans matured in Mar-
Apr’21) to acquiring new customers in Aug-Sep’21.
➢ PAR levels peaked in Jun’21 on account of stringent lockdowns in key states, restricting
customer meetings for some weeks. PAR levels are improving m-o-m since Jun’21 with
forward flow rates for PAR 60+ and PAR 90+ buckets contained. Even rollbacks are
showing healthy trends.
➢ The industry is expected to grow at 20-25% for the next 4-5 years, with CREDAG’s
growth largely matching or higher than the industry
➢ Management expects the credit-cost impact of COVID 2.0 to be lower than that of
COVID 1.0. Management believes that incrementally BAU credit costs are set to
increase by 30-40bps from pre-COVID levels.
• Disbursement growth is being driven by an increase in ticket size for repeat customers,
and new customer acquisitions from existing/new branches. Ticket size was capped
only for customers with an impact on credit scores.
• Attendance in centre meetings for CREDAG is lower by 5-6%, with customers now
utilizing the allowed 12 leaves (unlike in the past). The % of absconding customer has
also increased as the % of non-paying customers has increased from 0.5% in normal
conditions to 5.5% currently.
• Collection Efficiency (CE) in Maharashtra (MH) and Madhya Pradesh (MP) was lower
due to the residual impact of COVID 1.0, while incremental impact from COVID 2.0
was similar to other states.
• CE across geographies have broadly stabilized between 90-94% and is expected to
increase by 1-1.5% in the next 1-2 months.
• Matured branches (in KA & MH) manage 6,000-7,000 customers and a portfolio of
Rs 200-220mn. A branch usually breaks even with a size of Rs 50mn-60mn or with a
customer base of ~2,000. A new branch usually takes 14-18 months to break-even.
• MMFL will gradually shift to CREDAG’s operational style/processes, the integration will
get completed in FY22. MMFL’s operations are likely to be slower than usual for 2-3
months due to this transition. MMFL is following CREDAG’s processes for new
CREDAG IN Nifty Index
business. 1,250
• MMFL will shift to PAR 60 NPA recognition by the next 2-3 quarters. 1,100
• Liquidity as a % of total assets is likely to reduce to 10% by Sep'21 from 16% in Jun’21. 950
• Any increase in CoB would be easily passed on to customers. BAU NIM for the 800
company is 11-12% 650
• CREDAG has sufficient capital to support growth for the next 12-18 months. 500
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Credit Shreepal Doshi
YE Mar ABVPS P/E P/ABV ROE
NII PPOP PAT EPS (Rs) RoA (%) cost
Rs mn (Rs) (x) (x) (%) shreepal.doshi@equirus.com
(bps)
+91-079 6190 9541
FY21A 13,613 9,518 1,314 8.4 233.2 75.5 2.7 4.1 1.0 603.0
Rohan Mandora
FY22E 14,155 10,605 3,049 19.6 255.7 32.5 2.5 7.9 1.9 445.0
rohan.mandora@equirus.com
FY23E 18,258 14,045 8,599 55.3 316.5 11.5 2.0 19.4 4.7 144.0 +91-079 6190 9529
FY24E 22,754 17,224 10,532 67.7 384.7 9.4 1.7 19.6 4.8 144.0
October 02, 2021
Company Update
DCB Bank Limited
Collections improved; pre-covid growth rate

likely in 12-18 months
➢ Barring CV, collection efficiency and bounce rates have improved across products to Mar’21
levels. Along with that, file logins across products have also improved to Mar’21 levels.
Collections have improved during 2QFY22 as: a) cash flows of the customers have improved,
b) improved mobility of collection team c) barring 6 states, functioning of courts have led to
better recovery
➢ Management expects bank to reach pre-covid level growth in next 12-18 months with focus on
granular and secured loans. However, asset quality stabilization is likely to take some time
➢ Bank targets to reach aspirational RoA of 1.2-1.3% with NIMs around 3.5-3.6%, non-interest
income: 1.1-1.2%, opex around 2.2% of assets and 0.5-0.6% of credit cost
• Sectors like Hospitality and Schools are still affected by the pandemic. Within
Hospitality, restaurants are still taking time and turnover is around 50% of the pre-
covid levels. Further, margins of restaurant have also been impacted
• 30% of the Bank book is towards wholesale/retail trade. In this business, institutional
supplies are taking time to recover, while retail purchases have reached closer to pre-
pandemic levels. Working capital cycle of borrowers which has been stretched has
been easing out with recovery in institutional supplies
• DCBB has been facing challenges on Balance transfer cases. Usually, bank used to
take loans from NBFCs due to the interest rate arbitrage. As compared to self-sourced
customers, DSA sourced customers have low stickiness and DSAs prompt the
customer to switch lenders to avail the benefit of lower rate, extended tenor and higher
exposure. To retain customer, DCBB offers similar rates to customer, however, bank
does not increase the exposure of the customers
• Bank has Rs 130.0 bn of mortgage book, of which home loans is around Rs 60.0
bn. About <20% of the customers are new to credit which sticks with the bank for 4-
4.5 years and >80% of the book is collateralized with self-occupied residential
property (SORP)
• Total costs of a branch is usually around Rs 6.0mn per annum and it takes 2-3 years
for break-even. However, with pandemic, rental costs have come down and bank
has also expanded the gold loan business which has helped in achieving break-even Relative price chart
early. DCBB IN Nifty Index
• On the digital side, Bank will have an open architecture and partnership led business
model. In check-out financing, Bank has partnered with Zestmoney where the bank 120
will fund 60-70% of the purchase amount. Collections are done by Zestmoney. 95
• Bank has identified segments in CV portfolio (high ticket size loans) which has not
done well and will continue to downsize it 70
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EPS ABVPS P/E P/ABV ROE
Mar NII PPOP PAT RoA (%) cost
(Rs) (Rs) (x) (x) (%) rohan.mandora@equirus.com
Rs mn (bps)
+91-079 6190 9529
FY21A 12,866 8,985 3,358 10.8 94.5 8.3 1.0 9.4 0.9 173.7
Lalit Deo
FY22E 13,118 8,786 3,230 10.4 91.2 8.6 1.0 8.3 0.8 164.6
FY23E 14,604 9,852 4,104 13.2 105.9 6.8 0.8 9.7 0.9 146.2 +91-079 6190 9533
FY24E 16,365 10,995 5,239 16.9 125.0 5.3 0.7 11.2 1.0 117.1
India Equity Research | Dairy
October 02, 2021
Dodla Dairy
About the Company: Dodla Dairy is an integrated dairy company based in southern India
primarily deriving revenue from the sale of milk & dairy-based value-added products. The
company is third highest in terms of milk procurement with average purchase of 1.03
million litre of raw milk per day among private dairy players with a significant presence in
southern India.
Represented by: Mr. D Sunil Reddy - MD & Promoter, Mr. BVK Reddy – CEO, Mr.
Anjaneyulu Ganji - CFO

Business Overview
• Company has 2nd highest market presence across 12 states in India and has 3 rd
largest procurement network in India.
• Company procures raw milk from ~1.2lakh farmers across 7,300+ villages
through 7,100+ VLCCs and 90% of raw milk is directly procured from farmer.
• Company has total 14 milk processing plants in India & Uganda.
• Market share: Karnataka has the largest market share in terms of volume, then
followed by AP. Company do not think it will be a Pan India any time soon. Lot of
penetration is yet to be done in South Indian States. Company has recently entered
Maharashtra market. For next 2-3 years company has enough growth areas.
Animal Feed Business
• Earlier company used to buy from third party players and supply to farmers, now
company has its own feed plant. This gives company advantage over other
competitors.
• Orgafeed primarily engaged in farming, breeding, agriculture, horticulture, and
allied activities such as poultry, dairy, and livestock farming.
• Company is selling directly to farmers through own procurement network which is
adjusted against the value of the raw milk supplied by such farmers
Value Added Products
• Company is investing heavily in expanding its range of value-added products, a
move that is anticipated to boost margins. The company has been proactive in
identifying and responding to customer preferences.
• It has invested significantly in value-added products such as Curd, Ice Creams,
Flavoured Milk, Lassi, Butter Milk, Ghee, Yoghurt and Butter to name a few.
• Overseas Prescence
• Dodla operates in Kenya and Uganda in Africa through its subsidiaries Lakeside
Dairy Limited & Dodla Dairy Kenya Limited. African product portfolio is marketed
under the “Dairy Top” and “Dodla +” brands and includes Milk, yogurt with
different flavours, ghee, paneer, cheese, and UHT milk.
Analsyts
• Dairy player margins are higher due to limited competition and constrained supply Depesh Kashyap, CFA
of processed milk. depesh.kashyap@equirus.com
+91- 7228934327
Piyush Sevaldasani
+91-9767990926
India Equity Research | Textiles & Apparels
October 02, 2021
Conference Key Takeaways
Dollar Industries
Poised to grow
➢ Dollar Industries has become one of the leading brands in the hosiery sector with an
enviable 15% market share and a significant percentage in textile exports of the total
production in the Indian hosiery market.
➢ Dollar has a production capacity of 13.5 tons a day. Its inner wear brands include Dollar, Force,
Force NXT, Missy and Club.
➢ Management is banking on 3 pillars that will help Dollar grow at faster pace: (a) brand
architecture: completed last year with change in logo (b) restructuring distribution: replacing
push model by replenishment model & loyalty-based programs & (c) digitisation: adopting ARS,
DMS, switching from Oracle ERP to SAP etc.
➢ Demand recovery was strong before COVID 2.0 struck and marred sales. However, current
demand trends are also very encouraging.
➢ Management expects to double the current revenues by 2024-25 with EBITDA margins
sustaining at ~18%.
Demand recovery post COVID 2.0 encouraging: Demand has remained encouraging
since beginning-Q2FY21 and picked pace significantly in H2FY21, before sales were
marred by COVID Wave II in Q1FY22. In 2Q22, the recovery trends are encouraging as
except for Southern India most other states have opened up & seeing sharp demand
rebound. Management expects overall sales to grow at ~15-16% in FY22 with margins
improving ~100-150bps to 14.5-15%. A large part of this growth will be contributed by
premium brands like Missy & Force NXT which will grow by ~30-40%. Apart from this it is
also focusing on growing its kids brand Champion. Dollar is also venturing in women
lingerie segment with launch of Brasserie next year which will not only grow realizations but
also the share of premium products in overall sales mix.
Raw material inflation largely addressed: Dollar along with other players saw a sharp
growth in RM prices from Sep’20 to April’21. Dollar has taken around 6 price hikes
totaling to ~18-20% in order to pass it on to the customers. While it does not expect any
further price hikes in next 2-3 months, unstable monsoon with floods across cotton
producing states can pose further risk to cotton prices.
Project Lakshya: COVID impacted the implementation of project Lakshya which was aimed
to implement DMS and ARS so as to up the level of automation & serviceability. ~40-45
people are working on this project on front-end. While the current pace of implementation
is low, management expects to complete this project in 2-3 years’ time. This would bring
down the WC days from ~120 days at present to ~60 days.
Capex guidance: Dollar will spend a total of Rs 1-1.25bn over next two years towards
expanding the spindle capacity as well as putting up a new warehouse in Kolkata (Rs 450-
500mn). Dollar currently has ~6-7 warehouses near Kolkata which will be consolidated
into a single unit that will have high level of automation w.r.t. loading & unloading of cargo.
Working capital days: Management acknowledged the high working capital days which Analysts
are mainly due to higher receivable days which they are planning to bring down by ~12- Vikas Jain
15 days. The inventory days are expected to reduce by ~5-10 days only as new product vikas.jain@equirus.com
launches will require them to keep adequate inventory. 079-6190 9531
Parth Patel
Channel dynamics: A large part of the sales still comes from general trade segment only.
parth.patel@equirus.com
Modern trade channels like e-com & LFS contributes only ~3% of overall sales. Dollar is 079-6190 9513
planning to add ~7-8 EBO by end of FY22.
India Equity Research | Internet Services
October 02, 2021
DreamFolks
About the Company: DreamFolks is one of the world’s largest providers of airport solutions
with a global footprint extending to 1000+ lounges across 140+ countries. It has
pioneered the concept of Airport Lounge Access in India accompanied with services like
Meet & Assist, Wellness Services, Airport Dining, Airport Transfers, Airport Transit Hotel,
Sleeping Pods / Nap Room and Porter Services.
Represented by: Ms. Liberatha Kallat – MD & Co-promoter, Mr. Balaji Srinivasan- CTO &
Executive Director, Mr. Anurag Jain- COO and Ms. Giya Diwaan-CFO

Business Overview
• Dreamfolks has 100% coverage of lounges in Indian airports and 40% exclusivity
in Indian airports.
• All top banks with credit cards are Dreamfolks’ clients. Priority pass is its main
competitor globally.
• Company operates on a Hybrid model: Issued card + digital platform completely
on company’s proprietary tech.
• Revenue CAGR (FY16-20) has been 75% while the Client growth has been 2.5x
from FY18-21. Company has healthy return ratios with ROCE of 66% and ROE
of 50%.
• Dreamfolks has net cash balance sheet and operates on a negative working
capital cycle.
Plans for future
• Capturing the international lounge access for current India clients
• Develop/ Expand newer offerings for current and new clients
• Leverage adjacencies to drive incremental growth
• Replicate India model in other countries
• Expand all the existing B2B app to all customers via B2C interface
Differentiation
• Company provides multiple channels (1) Physical card of bank (2) Dreamfolks
card (3) Dreamfolks app (4) embedding digital access app of diners, MasterCard,
banks etc.
• Company has already tied up with easymytrip, with some airlines providing the
access of lounge and is in discussion with other Online Travel Agents(OTAs) for
tie-ups.
Analsyts
Depesh Kashyap, CFA
depesh.kashyap@equirus.com
+91- 7228934327
Piyush Sevaldasani
+91-9767990926
October 02, 2021
Company Update
eClerx Services Ltd

CMP Target Price
Rs 2,206 Rs 2,510
Remain optimistic about demand Sep 2022
Rating Upside
LONG 14% ()
➢ eClerx is sounding optimistic regarding demand outlook for at least near to medium Estimate Revision
term. It believes that if there are no major macro/pandemic related pressure than even Forecasts % Change
demand could stay healthy over medium to long term. (Rs mn) FY22E FY23E FY22E FY23E
➢ Improved demand confidence stems from i) all round demand it witnesses across Sales 20,378 22,535 NA NA
industry segments, ii) lower sales roll off (ramp downs) than earlier years and iii) higher
EBITDA 6,052 6,344 NA NA
new business addition than earlier years.
➢ With attrition related challenges are limited especially in BPO business, eClerx expects PAT 3,935 4,108 NA NA
to maintain its earlier indicated EBITDA margin band of 28-32% over near to medium EPS 115.3 120.4 NA NA
term. However, it expects once the pandemic stabilises and work from office starts in
gradual fashion, it foresees increase in some of the expenses. Stock Information
Market Cap (Rs Mn) 76,979
52 Wk H/L (Rs) 2,457/669
Remain optimistic on demand and witnesses all round growth even in Personiv: eClerx is Avg Daily Volume (1yr) 75,330
witnessing demand recovery across industry segments including financials, digital operations Avg Daily Value (Rs Mn) 1.8
and cable and wireless. This is driven through increasing digital adoption, increasing net new
business addition and scarcity of talent at client locations. eClerx is also witnessing good
demand for Personiv’s services which are largely similar to eClerx but provided to small and Face Value (Rs) 10
medium size clients. Personiv has a complementary service provided around finance and Share Outstanding (Mn) 34.9
accounting process for which eClerx believes that driving business synergies will take a bit Bloomberg Code ECLX IN
longer time given incremental relations to be built with CFO/finance department of most
Ind Benchmark BSE IT
clients. Within cable and wireless eClerx is also looking to diversify and offer its services
toward streaming business as well.
Ownership (%) Recent 3M 12M
Also reflected from improving net new business addition: eClerx generally witnesses annual
revenue roll off worth US$40-50mn led by i) client specific issues and ii) normal leakage. It Promoters 53.8 0.0 3.0
is now witnessing material reduction in the client specific events though normal business DII 14.9 0.9 (6.7)
leakage continuing. Considering this, it is now witnessing around 50% reduction in the FII 19.9 (0.1) 4.3
general annual revenue roll off scale. Also, earlier annual new business addition scale was
Public 11.4 (0.8) (0.4)
around US$50mn and in the last 12-15 months, eClerx is witnessing higher scale of new
business addition than US$50m. Also, eClerx is looking to materially increase the productivity
of its sales/business development team which can further add new business growth annually.
Margin management seems under control: eClerx believes that increasing attrition/supply
side challenges in the industry are manageable for eClerx given talent crunch is only for 5-
10% of its business. eClerx expects to maintain its earlier indicated EBITDA margin band of
28-32% over near to medium term. However, it expects once the pandemic stabilises and Relative price chart
work from office starts in gradual fashion, it foresees increase in some of the expenses 2,800
ECLX IN Nifty Index
including travel and other associated cost. eClerx witnessed material saving in the travel cost
2,380
from its earlier annual run rate due to covid related restrictions. However, it believes that
1,960
going forward hybrid model is likely but for financial services and cable and wireless
segments, client will demand work from office incrementally. 1,540
1,120
700
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
(x) (%) (%)
FY21A 15,645 4,480 2,826 80.6 27.4 5.2 15.7 20.1 24.0 28.6 022-43320673
FY22E 20,378 6,052 3,935 115.3 19.1 4.9 11.7 26.0 27.6 29.7 Meet Rachchh
FY23E 22,535 6,344 4,108 120.4 18.3 4.1 10.8 24.4 26.0 28.2
+91-9892707286
FY24E 24,570 6,750 4,443 130.2 16.9 3.7 10.0 22.9 25.3 27.5
October 02, 2021
Company Update
Equitas small Finance Bank
Levers to grow asset book and liability

franchisee in place
➢ Credit demand has picked up in the SBL, used and new VF, and new CV. Incremental
business in the MFI segment is strong while gold business is growing at a slow pace.
➢ Equitas SFB (EQUITASB) Loan growth of 25% is expected in the next 2-3 years driven
by product launches like car loans, home loans, personal loans, and other cross-selling
products for liability customers
➢ The focus for the next three months would be on collections to bring back X bucket
collection efficiency to pre-covid levels of 98-99%.
➢ R/s book is expected to be Rs 14-17bn in FY22, and most of these customers would
be in X bucket by Mar’22. These customers were not given R/s 1.0 option during covid
wave 1.
➢ Fintech collaborations is likely to help the bank in achieving 10-15mn liability customer
base in next few years
• EQUITASB will start scaling up the products like personal loans, car loans, credit cards
once they have the universal bank licence
• The bank has tied up with HDFC Ltd., for high ticket home loan business and a large
bank for credit card business. EQUITASB will act as a sourcing partner in both the
cases.
• Measures taken by in-house digital team and fintechs have led in a 3x increase in
deposit customer acquisition (80% is digitally sourced via partnerships)
• The bank is looking to deepen the relation with the current customers by offering third
party products like insurance, and mutual funds
• The bank has reduced interest rate to 6% for savings accounts with balance of >Rs
10mn while the same continues to be 7% for account balances ranging in Rs 0.1-
10mn
• NIMs are expected to contract to 7.5% over the next 2-3 years on account of changing
product mix – shifting towards low yielding products Relative price chart
EQUITASB IN Nifty Index
• The management re-iterated credit cost of 2.5% for FY22 assuming no COVID wave 70
3.0 60
• EQUITASB is targeting at RoE/RoA/Credit Cost/C/I Ratio of 16-17%/2.25%/1%/50% 50
over next 2-3 years 40
30
• The bank aspires to have a longer-term PCR of 60-65%
Oct-20
Jan-21
Apr-21
Jul-21
• Merger
Financial scheme of Equitas SFB & Holdco is submitted to RBI and SEBI and a time of
Summary
Source: Bloomberg
YE 3-4 months is expected for the regulatory bodies to respond, and then approval
Credit
from
ABVP P/E P/ABV ROE
Mar NII PPOP PAT EPS (Rs) RoA (%) cost Analsyts
shareholders would be taken. S (Rs) (x) (x) (%)
Rs mn (bps) Shreepal Doshi
FY21A 17,980 8,866 3,842 3.4 27.3 18.3 2.3 12.5 1.7 245.5 shreepal.doshi@equirus.com
FY22E 20,670 10,014 3,966 3.5 30.5 17.7 2.0 11.0 1.5 257.3 +91-079 6190 9541
FY23E 25,400 13,225 7,212 6.3 37.3 9.7 1.7 17.4 2.2 161.1 Rohan Mandora
FY24E 30,522 16,446 9,044 7.9 44.5 7.8 1.4 18.2 2.3 156.7
+91-079 6190 9529
October 01, 2021
Company Update
Fedbank Financial Services
Retail focussed products to drive loan

growth
➢ Fedbank (Fedfina) is currently offering 3 products i.e., Gold Loans (40% of the loan
book), Mortgage Loans (Small Ticket and Medium Ticket size), and unsecured loans
to self-employed customers
➢ The management is confident of achieving the AUM target of Rs 150bn and RoE of
~18% by FY24 despite hampered loan growth on account of covid in FY21 and
1QFY22.
➢ Target portfolio mix between GL/Mortgage/Unsecured loans is 30-35%/50%/10-15%
of the overall portfolio.
➢ The focus would only be on retail products and hence the company has discontinued
the wholesale and partnership business.
➢ Branch expansion is now being focused in north and central India
➢ Since Jul’21, the company is back to pre-covid level of disbursements run-rate
• The loan book scaled from ~Rs 14bn in FY18 to ~Rs 50bn as of Aug’21. During FY
19-20, the company originated Rs 3.5bn / month and disbursed Rs 2.5bn / month
• The two levers for loan growth are gold loan product and instalment loans as these
are complementary products in terms of navigating any crisis
• Fedfina is adding 60 more gold loan branches and 15 small mortgage loan branches
by Oct’21.
• Fedfina is focusing on lower branch radius, and slightly higher ATS for gold loans to
maximize business
• The company is well capitalized with CRAR of 23.5% as of Mar’21
• Yields for GL/Medium ticket LAP/Small ticket LAP/Business Loans were

~19%/12%/16%/17% as of Mar’21
• Cost of funds for FY21 were 7.43%
• C/I Ratio increased from 58% in FY19 to 71% in FY20 due to increase in employee Analsyts
Shreepal Doshi
strength (employee strength increased from 935 in FY19 to 1800 in FY20), number of
shreepal.doshi@equirus.com
branches and improvement in tech infrastructure. +91-079 6190 9541
• C/I is expected to reduce to industry average going forward as benefits of scale will be Rohan Mandora
seen rohan.mandora@equirus.com
+91-079 6190 9529
• RoE contracted in FY20/FY21 to 6.8%/8.1% from 9.7% in FY19 on account of various
investments in FY20 and covid led provisions in FY21.
• GNPA/NNPA stood at 1.04%/0.71% as of Mar’21 with PCR for stage 3 assets at

31.8%
• PCR on stage 1 assets stood at 1.02% as of Mar’21 (~1.8% after excluding gold loans
(100% secured) from stage 1 assets)
October 02, 2021
Company Update
Federal Bank Ltd
Asset Quality stable
➢ Trends in credit offtake has been healthy during the quarter. Bank plans to grow mid-
teens in medium term with medium to high single digit growth in corporate book. Gold
loan book is expected to grow higher than 20%
➢ Asset quality is expected to be better in 2QFY22 as compared to 1QFY22 due to
healthy collections, recoveries and improving business activity levels. Bank expects PCR
to be maintained around 65% at the end of FY22
➢ Bank sees a lot of potential to grow the book through account aggregator platform.
However, it will take time to grow as the rule engines are in progress and customers
need time to get acquainted with the platform
➢ NIMs to remain in the range of 3.15%. Bank has identified certain levers to aid the
margins like a) focus on high margin products such as personal loans, credit cards,
gold loans, b) Granular loan book growth from deeper geographies
• SMA-2 book as of Aug’21-end is better than Jun’21-end. Recoveries seen in gold loan
NPAs. Recoveries have been better as customer co-operation has increased, mobility
of collection staff improved, and legal remedies have started in 2QFY22
• System still has surplus liquidity of over Rs 7tn and interest rates have been under
pressure which could impact treasury income
• FB’s SME portfolio in 3-4 states where Bank has built decent presence is growing faster
than Kerala SME portfolio. Bank is focusing upon developing rule based smaller ticket
loans (Rs 10-30mn) using GST filing & bank statement analysis
• Within corporate banking, focus is on mid-corporate segment in deeper geographies
(Morbi, Bhubaneshwar, Raipur, other than top 12 cities). Bank has revamped the
supply chain finance where the large corporate group will start building relationship
with larger OEMs. Supply chain finance is a key focus area of growth with integrated
IT systems and partnership with fintech players. In Large Corporates, Bank is building
advisory based relationship along with lending relationship to make healthy RoEs.
• In CV, FB is seeing good growth signs and have started focusing on SRTOs, used CV,
CEs. On pilot basis, Bank has entered FTUs within the CV segment
• In MFI, Bank has tied-up with a fintech player. With collections stabilizing and cash
flows of customer improving, Bank has started disbursements towards this segment.
Further, Bank has developed an in-house app for the BC partners which will do end
to end servicing to the customers including sourcing, monitoring, KYC and collections.
Couple of Fin-tech partners are in pipeline to tie-up with the Bank
• In Gold loans, Bank is increasing tie-ups with different partners and growth from the
branch remains a key growth area. Further, Bank has launched a new product with a
bundled offering at rates lower than personal loan to capture market share
Financial Summary
YE Credit Analsyts
(Rs) (Rs) (x) (%) (%) Rohan Mandora
Rs mn (bps)
FY18A 35,828 22,910 8,788 4.5 54.0 18.7 1.5 8.3 0.7 114.6
+91-079 6190 9529
FY19A 41,764 27,631 12,439 6.3 58.6 13.3 1.4 9.8 0.8 84.7
Lalit Deo
FY20A 46,489 32,047 15,428 7.7 64.8 10.7 1.3 11.1 0.9 100.8 lalit.deo@equirus.com
FY21A 55,337 37,869 15,903 8.0 72.9 10.4 1.1 10.4 0.8 129.8 +91-079 6190 9533
India Equity Research | Logistics
September 30, 2021
Gati Ltd
About the Company: Gati, founded in 1989, is one of India’s premier Express Distribution
and Supply Chain Management company with a strong presence across Asia and coverage
that spans the whole of India (across more than 19,800 PIN Codes in 735 of India’s 739
districts). After strategically acquiring Gati in 2020, Allcargo Logistics is now the promoter
and the single largest shareholder of Gati with more than 50% ownership, followed by
Japan’s Kintetsu World Express (KWE) with about 3.5% shares in the company.
Represented by: Mr. Pirojshaw Sarkari – CEO, Mr. Ravi Jakhar - CSO (Allcargo Logistics)

Business Overview
• Gati is a subsidiary of Allcargo logistics. Gati KWE is a subsidiary of Gati which is
70-30 JV between Gati and KWE. Gati KWE has the B2B Express business and
Gati standalone has B2C business and fuel business. Many non-core businesses
such as Gati Kausar (cold chain business) has been divested.
• Gati has extensive reach and covers 99% of the pin codes across India and has
very wide customer base across industries. Gati is the second largest B2B Express
company behind Safe express.
• Gati has reduced the debt, reduced non-core assets, introduced digitalisation,
and brought the right governance into the company.
• Company has introduced the gold standard salesforce system and company is
also looking at the customer digital portal so that the flow of information becomes
seamless between the company, customer, and the receiver of the goods.
Logistics Industry
• Lot of change is happening in the logistics industry. GST was the first trigger for
huge changes to come in the logistics industry. Forward distribution is where the
Gati concentrates. Forward distribution is the finished goods to be sent to the
client’s customers. Distances are getting are shorter, the need of air is becoming
less as express is increasing in a big way. With freight corridor opening, the rail
transport will come up in a big way.
• There are basically forms of logistics (1) Physical form movement of package from
point a to point b (2) wrapping data around the package - this brings predictability
to the receiver of the package (3) the invoicing of remittance of the money. All this
put together, express logistics enables sales for the manufactures of this country.
• In distribution, cutting out the intermediaries will be the way forward. Company
predict that the intermediaries will slowly die, and the manufactures will go direct
to the retail.
• Express Logistics is just like a cargo airline network with fixed departure and fixed
arrival.
• Gati already has the infrastructure for catering the large category C goods.
Analsyts
Depesh Kashyap, CFA
+91- 7228934327
Piyush Sevaldasani
+91-9767990926
Greenlam Industries Ltd.

Benefiting from robust demand scenario
➢ For Greenlam, demand is witnessing good traction post covid effect. There is a push on
value added categories but largely growth seen in all the categories. Residential space
is witnessing better demand currently for laminates. Further, laminate export demand
is also reporting good numbers currently.
➢ Management has indicated that unorganised sector has not fully recovered which is
benefitting organised players.
➢ Management expects FY22 EBITDAM to be impacted on RM price inflation. Further,
margins for domestic expected to be slightly higher than exports as some RM price
hikes not fully passed on for export demand.
➢ Company had, from 3Q21, fixed base freight rate for all customers. Beyond this rate,
any increase in freight rates are directly passed on to customers. Hence recent rise in
freight rates will not have a major impact on company’s margins.
Significant price hikes taken to pass on RM price increase: Management indicated that
Melamine prices are up from USD 800-900/t a year ago to USD 2800-2900/t currently.
Other RM price like paper were also higher ~10% yoy. To compensate this, company has
taken price hikes of ~12-15% over Mar’21 to now. Management has stated that paper is
~60-62% of overall cost while chemical (after recent spike in prices) is ~40% of cost of
laminates. In papers, design papers are mostly imported from Europe and China while
craft papers are mostly procured locally (except few from Europe and US). Further,
chemical can be procured from anywhere depending on availability.
Capex update: Greenfield Laminate capacity expansion of 1.5mn sheets per annum at
Naidupeta, Nellore in AP, initially scheduled for commissioning in 4Q22, got delayed due
to COVID-19 related issues. It is currently on last stages of getting the government approval
which are expected to come in 1 month time post which work will commence. It will take
~12 months to commission once the construction activities start. The land taken for AP
expansion is quite large (65 acres) which provides adequate room for brownfield expansion
and management is in talks to consider the same. One press line in brownfield expansion
would costs Rs 300-350mn currently and can produce ~2mn sheets p.a. (Management
stated that it has historically undertaken brownfield expansion every 18 months).
Management has indicated that it is not looking for inorganic growth as the manufacturing
setup of unorganized players may not necessarily match the quality of Greenlam. Hence
management believes it is better to grow organically. Further management does not intend
to opt for outsourcing due to quality concerns.
Export opportunities: Management has stated that many smaller companies are getting
shut in Euro zone and larger companies are moving in more value-added products. Hence,
overall competition is not increasing for the export opportunities for the company.
Company has, in recent times, opened 3-4 years subsidiaries outside India to have greater
presence there.
Financial Summary
Sales EBITDA P/E (x) P/B (x) EBITDA ROIC Margin Pranav Mehta
Rs mn PAT (Rs) (%)
(x) (%) (%)
FY21A 11,996 1,733 861 35.7 38.0 5.8 19.8 16.2 13.9 14.4
+91-07961909514
FY22E 13,780 2,010 1,040 43.1 31.8 5.0 16.6 16.8 17.4 14.6
Aman Agarwal
FY23E 16,112 2,556 1,432 59.3 23.1 4.1 13.0 19.6 16.9 15.9 aman.agarwal@equirus.com
FY24E 18,111 2,895 1,649 68.3 20.0 3.5 11.2 18.9 20.4 16.0 +91-079 6190 9526
Greenpanel Industries Ltd.

Operating at full utilization amid high
demand scenario
➢ Industry demand situation has been improving MoM where July was impacted but
August and September largely made up for it. OEM sector has recovered faster than
the retail sector. Company is currently operating at 100% utilization in MDF segment
(95% in August) and ~90% in Plywood segment.
➢ De-bottlenecking of MDF capacity is on-going and will be completed in 3Q22. This
will increase MDF capacity from 540,000cbm currently to 660,000cbm. Post this de-
bottlenecking of MDF capacity, management expect 90-95% utilization in FY23 and
full utilization in FY24.
➢ Management has stated that company’s next expansion will be a brownfield MDF unit
in Andhra Pradesh with capacity between 120,000-180,000cbm. This will be
commissioned in 9 months after work starts.
Realizations & Margins: Management is expecting realization of ~Rs 27,000/cbm in

domestic and Rs 18500-19000/cbm in exports for this quarter vs earlier realizations of Rs
25,500/cbm for domestic and Rs 15,600/cbm in exports. This increase is mainly due to
RM price increase; hence gross margin for 2Q will be largely similar to 1Q. Further, in
subsequent quarters, exports realization should further improve to Rs 19,500-20,000.
Hence, FY22 should see improvement in export margins from 10% PY to 16-18% this year
while overall MDF margins for 2Q are expected to be similar to 4Q21 margins.
Management stated that industry has maintained price discipline so far; hence
management does not expect realizations to be affected with growing capacity. Company
took 4% price hike in July which covered RM price increase. Management is further thinking
for another hike soon.
Exports & Imports scenario: Management is expecting exports of ~140,000cbm this year
for the company. Company plans to reduce exports from next FY as EPCG requirements
will be completed this year. In long term, management target’s 85:15 domestic & exports
mix. Imports to India had reduced significantly to 80,000cbm last year and management
expects it to be 50,000-60,000cbm this year. Indonesia and Vietnam have significant
domestic demand so not they will not be exporting much. Only threat is from Thailand but
it is also impacted significantly by covid. Further, CVD on imports from these countries is
under consideration by ministry.
Other updates:
• Non-compete between the company and Greenply Industries restricting the company
to expand its Plywood business has been lifted with Greenply entering MDF business.
• Company’s current mix of Retail: OEM is 70:30. Going forward, management target’s
retail to increase to 80%.
• Company had 1,400 dealers at the starting of the year; and has 1650 currently.
Management target’s to have 2,200 dealers by FY23 end.
Financial Summary
Rs mn PAT (x) (x) (%) Pranav Mehta
(x) (%) (%)
FY21A 10,208 2,034 813 6.6 49.0 5.5 10.8 9.9 7.6 19.9
+91-07961909514
FY22E 13,132 3,111 1,367 11.2 29.2 4.6 6.6 17.2 13.0 23.7
FY23E 16,384 4,015 1,991 16.2 20.0 3.8 4.9 20.7 16.4 24.5 Aman Agrawal
aman.agarwal@equirus.com
FY24E 18,106 4,474 2,308 18.8 17.3 3.1 4.2 19.8 16.9 24.7
+91 9099514159
September 30, 2021
Company Update
HCG Enterprise Ltd.
At the end of capex cycle
➢ HCG is leading specialty healthcare provider of tertiary and quaternary healthcare

services in cancer under the brand ‘HCG’ (96%) and fertility specialties under the brand
name ‘MILANN’ (4%).
➢ HCG network consists of 22 comprehensive cancer centres which includes the centre
of excellence in Bengaluru and 1 centre in Africa. It also operates 3 multispecialty
hospitals, 2 freestanding diagnostic centre and is managing 1 multispecialty.
➢ From tier-1 cities, HCG is expanding its services to tier-II and III as well. Opened 7
comprehensive centres in cities like Bhavnagar, Gulbarga, Baroda, Vishakhapatnam,
etc.
➢ For HCG, benefit from COVID was practically non-existent (~3% of revenues) as the
company has only 4 multispecialty hospitals.
Onco focus; didn’t accrue any benefit for COVID: It has 22 centers in India which are
mainly focused in providing Oncology services. Out of 22 centers 19 centers are matured
and EBITDA accretive, while 3 centers are relatively newly built (less than 3 years) and still
a drag on EBITDA. Additionally, it has 4 multi-Specialty hospital, where it had actively
provided COVID-19 treatment and COVID contribution was limited to 3% of revenues.
Cashflow to be a focus; at the end of capex cycle: HCG has focused on expanding its
services to tier II and III cities across India and therefore had built 7 centers across 7 cities.
HCG is now targeting to turn them EBITDA accretive over ensuing years and therefore it’s
towards end of its capex cycle and focus would be on cashflow generation.
20% ROCE target at Center level: HCG is installing the latest technology (Cyberknife
technology at South Mumbai, Bone marrow transplants at Kolkata) at its new centers which
will aid it to increase occupancy and APROB levels. All these initiatives will help them in
achieving ROCE levels of 20%.
Fertility Business: Acquired 50.1% stake in BACC in 2013 which operated fertility centres
under the MILAAN brand and now the company operates 7 centres under MILAAN. The
company closed fertility centres in Bhavnagar and Mumbai due to which the business was
affected in 2020 resulting in low registrations. Fertility rates in India is on a reducing trend TRP IN Nifty Index
and since this space is completely unorganised at this stage, the outlook for this segment 5,100
remains very promising. 4,505
3,910
Outstanding 1Q2022 Numbers: Q1 2022 has been phenomenal for the 3,315
company with revenue growth of 66%, Operating EBITDA 164% on Y-o-Y basis. 2,720
All regions except Tamil-Nadu (28.6%) posted revenue growth upwards of 30% 2,125
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Analsyts
Bharat Celly
bharat.cellyl@equirus.com
+91-079 6190 9524
India Equity Research | Dairy
October 02, 2021
Heritage Foods
About the Company: Heritage is recognized as one of the India’s largest and reputed
FMCG companies, since 1992. The Heritage Group, founded in the year 1992 by Mr.
Nara Chandrababu Naidu, is one of the fastest growing Public Listed Companies in India,
with two-business divisions-Dairy and Renewable Energy. Currently Heritage's milk and milk
products have a market presence in Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil
Nadu, Maharastra, Odisha, NCR Delhi,Haryana, Rajasthan, Punjab and Uttarakhand.
Represented by: Dr. M. Sambasiva Rao - President

Demand outlook
• July onwards industry is moving towards normalcy post lockdowns. Demand has
increased sharply while supply is low. This has led to increase in farmgate prices.
• Overall milk procurement costs have increased but retail selling prices remain the
same.
• In the Season starting in October. Availability of milk and the prices of milk should
be good. Procurement prices are expected to cool off in the flush season.
• Strategies to increase the share of VAP
• Expect 40-45% of revenue coming from sales of Value-added products. Strategies
to achieve this target are threefold:
• Back-end capacity creation for value added products. Most of this will happen in
the existing premise.
• Marketing – creating the awareness of the products
• Improving the distribution and acceptability of products – Predominantly increase
in Prescence in general trade. Company has close to 850 heritage partners. Also,
has Prescence in modern retail chains. Listed the products in every chain.
Others
• Company is focusing on existing markets only and not looking for geographical
expansion
• Margins difference between VAP and liquid Milk: Margin structure - Milk 7% and
VAP 14%. This is broad trend and expect this to continue going forward.
• Competition is increasing in the industry, but overall demand is also increasing.
• Margin volatility is primarily due to the higher volatility in procurement prices.
• Milk powder depends on procurement price of milk. Major volatility is coming
from the Milk procurement price.
• Certain years the government of India allows incentive for exporting products and
in certain years have been banned. Some years there are duty and some years no
duty and these policy fluctuations are function of demand supply scenario.
• Working capital difference between VAP and Milk: In our current portfolio. WC
days is same for both for Milk and VAP both are cash and carry and no difference.
In the ecommerce channel and modern retail, receivables days are 15-20 days
for all products.
Analsyts
Depesh Kashyap, CFA
+91- 7228934327
Piyush Sevaldasani
+91-9767990926
India Equity Research | FMCG
October 02, 2021
Company Update
Hexagon Nutrition
Pioneer in Holistic Nutrition
➢ Hexagon nutrition in the leader in the Micro-nutrient pre mixes in India and globally.
It also has presence in the international markets with presence across 70+ countries.
➢ It also boasts B2C brands across multiple sub categories in the nutrition segment pan
India and in international markets
➢ Sales/EBITDA/PAT have grown at a CAGR of 11%/19%/39% over FY17-FY21 with
strong EBITDA to PAT conversion of ~11%.
➢ It is a zero net debt company with dividend paying track record.
➢ Hexagon has robust manufacturing capabilities with multiple plants across countries
and plans to expand the manufacturing facilities in the international market.
Pioneer in holistic nutrition: Hexagon nutrition is the market leader in the micro-nutrient
and premixes category in India and globally. It preferred partner to major FMCG
companies in India such as Amul, Jubiliant foodworks, Marico, Britannia and ITC and it
also provides customised solutions across F&B industry. It is also present in the B2C
segment through brands such as pentasure, Pediagold and obesigo. It is also an emerging
leader in the global supply of ready to eat therapeutic food (“RUTF”) and Ready to eat
supplementary food (“RUSF”). One of the largest licensed suppliers under UN program for
micronutrient powders.
Global presence with diversified operations: Hexagon is present in 70+ countries with
majority of its sales coming from Asia (~70%) and top 10 countries contribute ~71% of
the total sales in FY21. The share of domestic sales currently stands at ~46% vs. 31% in
FY18.
Backed by strong R&D and robust manufacturing facilities: Hexagon has strong R&D
capabilities with high barriers to entry non B2C business. It has state of the art
manufacturing facilities in Nasik, Chennai and Tuticorin and it is planning an expansion in
South Africa, Tuticorin and Chennai and setting up a new factory in its legacy market of
Uzbekistan. The facility in Uzbekistan will also cater to adjoining geographies in central
Asia.
Financials and guidance: Hexagon has delivered a sales/EBITDA/PAT CAGR of BAJAJCON IN Nifty Index
350
11%//19%/39% over FY17-FY21. Management has guided to EBITDA margin expansion
from 16.5% to high teens and above in the mid to long term whereas sharper focus will be 300
there on expanding the B2C business. It will gradually increase the pan India presence by 250
expanding the 120+ sales force and targeting T2 and below markets. 200
150
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ EBITDA
YE Mar Recurring P/E P/B ROE ROCE Ronak Soni
Sales EBITDA EPS (Rs) EBITDA Margin
Rs mn PAT (x) (x) (%) (%) ronak.soni@equirus.com
(x) (%)
FY18A 2,112 123 29 - - - - 3 9 5.8 +91-8130631728
FY19A 2,358 307 154 - - - - 15 21 13.0

FY20A 2,067 308 197 - - - - 16 20 14.9
FY21A 2,115 350 223 - - - - 16 22 16.5
India Equity Research | Capital Goods
September 30, 2021
Company Update
Hindustan Aeronautics
Ticking the right boxes
➢ For its regular platforms (LCA, LUH, LCH etc), HAL expects to receive orders worth ~Rs
1,700bn in the next 10 years.
➢ While orders for 15 LCH (~Rs 30bn) will surely be received by FY22-end, orders for
12 Su-30 (~Rs 100bn), 70 HTT-40 (~Rs 95bn), 12 LUH (limited series production)
are expected latest by 1QFY23. Management also expects to receive ROH/new engine
order worth ~Rs 80-100bn/90bn respectively in FY22.
➢ HAL looks to exploit defence opportunities meaningfully with its future platforms
including (a) LCA Mk II, (b) twin engine deck-based fighter, (c) AMCA and (d) IMRH.
➢ Guidance: (a) Revenue growth of ~6-9% p.a for next 5-6 years (minimum ~6% in
FY22E) (b) EBITDA/PBT margins of ~24-25%/18-19% for next 3-4 years (c) Nil interest
cost in FY22E (d) Receivable/Inventory days of ~90/180-270 days going ahead (d)
Cash collection of ~Rs 180bn in FY22E.
Order Inflows: Management is confident on receiving orders for 15 LCH (~Rs 30bn) in
FY22 along with ROH orders worth ~Rs 80-100bn and new engine orders of ~Rs 90-
10bn split between AL-31 FP (for Su-30) and RD-33 (for Mig-29) engines (~Rs 57bn and
~Rs 33bn approximately). Orders for 12 Su-30 (~Rs 100bn), 70 HTT-40 (~Rs 95bn), 12
LUH (limited series production) are expected latest by 1QFY23.
Management expects LUH orders to mirror ALH numbers (~350+ ALH delivered as on
date) fuelled by replacement of the existing fleet of Cheetah and Chetak helicopters (400+
in service currently). For its regular platforms, HAL expects to receive orders worth ~Rs
1,700bn in the next 10 years. HAL’s outstanding OB at 1QFY22-end stood at ~Rs
835.3bn vs ~Rs 806.4bn at FY21-end.
Future Platforms: (a) HAL has entered in an MoU with ADA to design, develop and
manufacture LCA Mk II, twin engine deck-based fighter (TED-BF) and AMCA. Initial
numbers for these are expected roughly at ~100/140/60 for LCA Mk II/TED-BF/AMCA
respectively. (b) Indian Multi Role Helicopter (IMRH): The opportunity size of IMRH stands
at ~Rs 2,000bn+ and is expected to be developed by FY27-28. These helicopters will
replace ageing MI-17 fleet of helicopters (400+ MI-17 in service currently). (c) UAVs: HAL
has partnered with IAI, Israel for fixed wing UAVs and Elbit Systems, Israel for rotary wing
UAVs. It is also developing its in-house rotary (2,000kg) and fixed wing (CATS) UAVs. (d)
Civil: HAL plans to enter civil aircraft painting and LRUs for both Airbus and Boeing aircrafts Relative price chart
in next 2-3 years and Engines in next 5 years. HNAL IN Nifty Index
1,650
Guidance: (a) Revenue growth of ~6-9% p.a for next 5-6 years (aims to reach DD revenue
1,440
growth in next 10 years); (b) EBITDA margins of ~24-25%, PBT margins of ~18-19% for
1,230
next 3-4 years (c) Nil interest cost in FY22E (d) Receivable/Inventory days of ~90/180-
270 days going ahead (d) FY22E collections pegged at ~Rs 180bn.
1,020
810
600
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA Harshit Patel
Sales EBITDA EPS (Rs) EBITDA ROIC Margin harshit.patel@equirus.com
(x) (%) (%)
+91-079 6190 9522
FY21A 227,545 54,132 32,374 96.8 13.8 2.9 6.9 22.6 13.8 23.8
Mayank Chaturvedi
FY22E 237,942 54,756 33,979 101.6 13.2 2.5 7.3 20.5 14.5 23.0
mayank.chaturvedi@equirus.com
FY23E 251,582 59,036 36,166 108.2 12.4 2.2 6.4 19.0 13.8 23.5 +91-079 6190 9531
FY24E 276,068 66,971 41,864 125.2 10.7 1.9 5.4 19.2 15.4 24.3
October 01, 2021
Company Update
Home First Finance Company India Ltd
Operating leverage to kick in going forward
➢ Home First Finance (HFFC) management highlighted that incremental growth strategy
is to have deeper distribution in its key states i.e., GJ, MH, TN, TS, KA, RJ over next
three years. HFFC is looking at AUM growth of 30% YoY by increasing the front-end
team to 1000-1200 from ~700 currently.
➢ Branch expansion is important going forward to manage portfolio, collections, and
servicing of the customers who are not comfortable with digital tools of servicing
(leading to increase in foot traffic at a branch). Opex/AUM is expected to be 3.0%-
3.5% for next 2-3 years.
➢ The networth of the company is expected to increase to more than Rs 20bn in next 3
years and management is comfortable with D/E of 4x-5x.
➢ Credit cost is expected to reach pre-pandemic level of ~40bps in FY23, while the
same would remain elevated at ~80bps in FY22.
• Management believes HFFC’s closest comparison would be with Gruh Finance, but
HFFC’s model is both tech and branch led with centralised underwriting while Gruh’s
business model was branch led.
• Target Customer Profile
o Average monthly income of Rs 20,000-Rs 50,000
o Customer without 100% formal income proofs
• HFFC has centralized underwriting unlike peers in the affordable housing finance space.
• Relationship managers at the branch are responsible for sourcing, lead evaluation,
physical verification, case login and collection.
• Productivity ratios like AUM/Branch, AUM/Employee, Disbursement/Branch,
Disbursement/Employee etc., are much better for HFFC as compared with peers.
• While the current C/I is 38%-40%, the same is likely to improve as the company is
targeting to increase the AUM/branch from Rs 600mn to Rs 1,500-2,000mn per branch.
Currently, it has 35 branches which have AUM of <Rs 500mn. The matured branches
have AUM of >Rs 1,200mn with ratio have C/I of 25%
• Churning out of customers for HFFC is not much as the underwriting process includes
talking to employers and assessing ‘kaccha’ bills which is not part of underwriting for
other players in the segment. The same was visible in low BT rate of 4-5% (annualised).
• Tech related expenses currently are 7-8% of the total opex (have increased significantly Relative price chart
in FY18 and FY19). These expenses are related to recurring license fees, and outsourced HOMEFIRS IN Nifty Index
tech stacks which has resulted in reduction of number of manual processes involved and 650
have got replaced by digital processes. Outsourcing cost could reduce going forward 600
as these would get replaced by in-house developed tech stacks. 550
• Adopting technology led model from the beginning has helped HFFC in providing better 500
service to its customers. 450
• The loan book mix between HL/LAP is likely to change to 85%/15 in medium term. 400
Aug-21
Feb-21
May-21
• As a strategy, HFFC will continue to maintain 20-22% of the total liabilities through
DA/securitization.
Source: Bloomberg
• Management expects to get a credit rating upgrade, this would benefit the CoF by 20-
30bps. Analsyts
Shreepal Doshi
shreepal.doshi@equirus.com
+91-079 6190 9541
Rohan Mandora
+91-079 6190 9529
Jindal Worldwide ltd
Virtual Conference Points
➢ Jindal Worldwide has India’s and Asia’s largest denim production capacity. Capacities
are Denim: 140 MMPA, Bottom Weights: 25 MMPA, Premium Shirtings: 25 MMPA,
Yarn Dyeing: 1200 MT, Home Textile: 10k piece per day.
➢ Margin expansion over the past few years has been on account of export business.
Export revenues now contribute about 25%-28% of topline against 0% few years back.
Export contribution will increase to 40-50% in coming years. Realizations are better in
export business over domestic market by 5-7%.
➢ Jindal has market share of 8-10% of organized market in denim business.
➢ Industry growth in last 5 years was around 7% CAGR and covid normalized growth for
company has been at 14% CAGR.
➢ Company has been able to pass-on cotton price increase within 30-35 days indicating
pricing power. In last 9 months cotton prices have increased by 60-70% which forms
around 70% of raw material though company improved margins.
➢ Deleveraging helped in bringing debt to equity ratio to less than 1x.
➢ Adding spinning capacity to increase backward integration and hence margins.
➢ Domestic industry growth in medium term will be around 8% on back of 1) China+1
sentiments which will bring demand to Southeast Asian countries 2) rise in income
levels 3) rise in working population 4) fashion awareness in tier-3 and tier-4 towns.
➢ CAPEX plan of Rs 60-65 bn over next 18-24 months. Significant part will go to
expansion of spinning facilities and remaining on denim capacity expansion upto 155
MMPA. First phase of capacity expansion will get over by Mar’22 for specialized yarn
that company currently buys from outside market at premium price which will help in
improving margins.
➢ Current denim utilization at 80% and optimum utilization level at 83%. Non-denim
capacity utilization around 65-68%. Supply chain issues like container availability
impacting utilization levels.
➢ Product mix will remain with denim at 75- 80% and rest non-denim. EBITDA margins
are higher in denim than non-denim.
➢ Denim realizations have improved in both domestic and export markets and expected
to grow further on value added products contribution. Blended realizations were at Rs
155/mt in FY21 which improved to Rs 166/mt in Q1FY22 that is growth of around
7% on basis of price hikes taken, increased contribution from exports, and better
utilization levels.
➢ PLI scheme is beneficiary for textile industry as a whole but focused on MMF and
technical textiles. Company is exploring opportunities in technical textile areas to take
advantage of PLI scheme. Analysts
Vikas Jain
➢ Passing of change in raw material price in domestic market happens with a lag of 1 vikas.jain@equirus.com
month. And in export market company takes short term orders of around 2 months. 079-6190 9531
Parth Patel
➢ Company offers wide range of denim fabrics with almost 600 SKUs ranging from Rs
100/mt to Rs 320/mt and hence cater to demands of clients. Any new fashion brings 079-6190 9513
in new products and scope for margin improvement.
Refer
➢ to important disclosures at the end of this report October 13, 2021| 30
India Equity Research | Pharmaceuticals
October 03, 2021
Company Update
Jubilant Pharmova Ltd
CDMO orderbook remains strong
➢ Jubilant Pharmova has seen a mixed performance over past year with its Radio-pharma biz
getting impacted, while CDMO and Generics seeing strong demand on the account of COVID
led drugs and higher new orders in CMO.
➢ Radio Pharma biz has started seeing gradual improvement with patient footfall improving,
however, key products viz. MAA continues to remain impacted owing to lower usage since
COVID outbreak and additional competition in the product.
➢ Generics performance was aided by Sartans and Remdesivir, which shall see recede with Sartans
prices cooling off and COVID cases declining in India. Moreover, import alert at its Roorkee
plant will translate into tepid new launches in mid-near term.
➢ CMO orderbook remains strong and management stated new capacity installation at its
Spokane facility will aid further growth.
Radiopharma biz seeing gradual improvement: Management stated, since COVID

outbreak patient footfalls (other than for COVID treatment) has been tepid causing lower
demand for Radio-pharma products. It is seeing a gradual improvement with patient
footfall normalizing; however, its key product MAA required for Lung perfusion studies
continues to remain impacted owing to nature of test and additional generic competition.
It remains positive on Radio biz and started it will growth in ensuing period with a) pick-up
in Ruby-fill across US and Europe (recently launched), b) filing and launch of 2 products
over the next two year.
Generics to be impacted owing to import-alert at Roorkee facility: Generics had seen a
strong growth over the past two years on the account of a) higher price in sartan portfolio
and b) higher contribution from Remdesivir owing to higher COVID cases. As COVID cases
have subsided and Sartan prices have also cooled off, the overall base business is going
to see decline with no new products in sight. Its new Roorkee facility got an Import alert
from the USFDA with an exception to export few products (~3% of overall revenues),
therefore all the products filed from the site with be withheld. Cadista has limited filings
(single digit) and therefor won’t be material.
CMO orderbook strong; facility augmentation to aid revenues: CMO business has been a Relative price chart
strong segment for Jubilant with strong order flows. It also had COVID related supplies in JUBLPHAR IN Nifty Index
FY21 and FY22 to the extent of Rs. 2.bn and Rs. 1bn, respectively. However, company 990
stated it can easily growth over the base as the orderbook remains strong and require 870
additional capacities to meet the demand. It is adding new lines at its Spokane and Hollister 750
plant to meet the additional demand. 630
510
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Bharat Celly
Rs mn PAT (x) (x) (%) bharat.celly@equirus.com
(x) (%) (%)
FY21A 60,985 13,965 5,954 52.5 12.0 2.1 9.0 16.2 8.4 22.9 +91-079 6190 9524
FY22E 63,842 15,205 7,534 47.3 13.3 1.8 7.8 14.8 11.0 23.8
FY23E 67,288 15,827 8,023 50.4 12.5 1.6 7.3 13.9 10.7 23.5
FY24E 73,325 18,337 9,667 60.7 10.4 1.4 6.0 14.7 11.9 25.0
India Equity Research | Construction
October 02, 2021
Company Update
KNR Constructions Ltd

CMP Target Price
Rs 287 Rs 321
Roaring to grow Jun 2022
Rating Upside
ADD 12% ()
Estimate Revision
➢ Order book at 1QFY22-end was at ~Rs 66bn (excl. recently won orders of Rs 50.9bn Forecasts % Change
for which ADs/FCs are pending), offering strong revenue visibility.
(Rs mn) FY22E FY23E FY22E FY23E
➢ Deal with Cube for stake sale of 3 of its HAM SPVs is on track. Of 3 projects, 1 project
Sales 34,195 39,566
has received PCOD, 1 project’s PCOD has been applied for and balance 1 is at
EBITDA 6,531 7,359
verge of completion. KNRC expects to close the deal and receive the amount by end
of FY22. PAT 3,842 4,381
➢ Unwinding of irrigation segment debtors has begun and management is expecting the EPS 13.7 15.6
cycle to continue.
Stock Information
➢ KNRC will continue to have a strong balance sheet, and asset monetization will only
strengthen it further. Market Cap (Rs Mn) 80,644
52 Wk H/L (Rs) 344/114
Robust OB; execution on track: OB at 1QFY22-end stood at ~Rs 66bn (excl. recently won Avg Daily Value (Rs Mn) 4.1
orders of ~Rs 50.8bn for which ADs/FCs are pending), offering strong revenue visibility Equity Cap (Rs Mn) 19,678
for the next 2.5-3 years. Management is targeting additional order inflows of Rs 20bn-
Face Value (Rs) 2
30bn during 9MFY22E, which should further boost revenue visibility and aid growth
momentum. Majority of projects are on track and execution to gather pace.
Bloomberg Code KNRC IN
Stake sale with Cube on track: Stake sale of 3 of its HAM SPVs with Cube highways is on
track. Of 3 projects, 1 project has received PCOD, 1 project’s PCOD has been applied Ind Benchmark SPBSMIP
for and balance 1 is at verge of completion. KNRC expects to close the deal and receive
the amount by end of FY22. Management is in talks with Cube and other potential investors
for unlocking value in balance HAM projects. Promoters 53.3 (1.8) (1.8)
DII 34.4 2.0 0.7
Update on recently won HAM project: Of 3 HAM projects won recently, KNRC has received
FC for 2 of its HAM project and balance 1 project is expected to received FC in near term. FII 2.3 0.2 0.3
Public 10.1 (0.4) 0.8
Update on irrigation projects: Receivables from Irrigation projects are slow and stand ~Rs
7.5bn – 8bn. However, unwinding of debtors has started as authority has started making
the payments. KNRC expects to receive entire amount by Dec’21.
Equity infusion in HAM projects: Equity investments in five HAM projects put together are
~Rs 6.2bn, of which ~Rs 4.2bn have already been infused till 1QFY22. Of the balance
equity requirements, ~Rs 1.35bn/ ~Rs 0.65bn are likely to be infused during Relative price chart
FY22E/FY23E KNRC IN Nifty Index
Capex & debt: The company has incurred a capex of ~Rs 0.4bn and guided for a FY22E 320
capex of Rs 1.4bn-1.5bn in FY22E. KNRC is net debt free as on 1FY22-end (net cash at 270
~Rs 470mn) 220
170
120
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Financial Summary
Analsyts
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Shreyans Mehta
(x) (%) (%) shreyans.mehta@equirus.com
FY21A 27,026 5,358 2,554 8.7 33.0 4.3 14.8 14.0 14.1 19.8 +91-022 4332 0611
FY22E 34,195 6,531 3,842 13.7 20.9 3.6 12.1 18.7 19.5 19.1 Jainam Shah
Jainam.Shah@equirus.com
FY23E 39,566 7,359 4,381 15.6 18.3 3.0 10.7 17.8 18.6 18.6
+91-079 6190 9516
FY24E 43,830 8,109 4,833 17.2 16.6 2.6 9.6 16.6 17.6 18.5
India Equity Research | Consumer Staples
October 02, 2021
KRBL
About the Company: KRBL is world's leading basmati rice producer and has fully integrated
operations in every aspect of basmati value chain right from seed development contact
farming procurement of paddy storage processing packaging branding and marketing.
India Gate' is KRBL's flagship brand both in domestic and international markets.
Represented by: Mr. Anil Kumar Mittal, CMD, Mr. Anoop Kumar Gupta - Jt. MD, Mr.
Rakesh Mehrotra - CFO

Distributors
• Distributors are quite old for 10-15 years in middle east or USA and brands have picked
up quite well. The brands have picked up well in middle east. KRBL is no.1 players as far
as niche products are concerned. Topline is primarily from the middle east and prices of
products of KRBL are highest.
• It is difficult to have multiple distributors in one country. In America company has multiple
distributors as it is big, but in countries like Saudi, Kuwait or Oman which are small there
will be territorial dispute amongst the distributors. Selection of Distributor: Distributor
should be dealing in FMCG products. They should be dealing with Lever, Nestle and other
big FMCG companies. Also, look at the revenue and the distribution channel of the
company.
Acquisition
• Acquisition will be less than Rs. 500 crores. And it has nothing to do with the procurement
which is of 2-3k crores.
• In any food business, the capex is less but more money is required for the raw material.
• Company is planning to acquire business in West Bengal, Karnataka, and Maharashtra.
High Rice Prices
• Market is higher by 20% and company has inventory of Rs. 2,500 crores.
• Price Hikes: Branded segment MRP does not change often. Only when market goes
haywire there will be change in prices.
Iran
• There are 3 good markets when 65% of rice is exported. Iran is 33%, Saudi Arabi is 25%,
Iraq is 9%. Iran is still under the US Sanction list. Iran is 1.4mn tons market for Indian
market. Only 50-60% is taking place between India-Iran routing through other third
countries. Indian government is also trying to let India import food and fertilisers from Iran.
• Saudi Arabi and Iraq can help negate the impact due to Iran situation. Saudi would not
import much this year as last year they imported a lot. Iraq is coming in big way.
• Saudi Arabia, it is not easy to have new distributors as most of them are having their own
private label and company does not wish to hand the business to someone who has own Analsyts
private label. Company is in search of new distributor who is not doing own private label. Depesh Kashyap, CFA
Lesser pesticide Rice
+91- 7228934327
• It takes about 3-3.5 years to come into commercial production. This is the first year when Piyush Sevaldasani
the seeds will be available to farmers and exporters to promote those exports. Next year piyush.sevaldasani@equirus.com
there will be some export of those products. In 2024, it will come in the full-fledged manner. +91-9767990926
October 02, 2021
Company Update
L&T Technology Services

CMP Target Price
Rs 4,644 Rs 3,200
Getting poised for the next leap Sep 2022
Rating Upside
ADD -31% ()
➢ Addressable market for Engineering and R&D (ER&D) services globally is currently Estimate Revision
above US$ 1trn and is expected to grow at healthy pace. LTTS has identified six Forecasts % Change
strategic investment bets which could act as long-term structural catalysts for the growth (Rs mn) FY22E FY23E FY22E FY23E
ahead. In addition to that, lower outsourcing penetration in ER&D industry augurs well NA NA
Sales 64,134 74,422
for its growth visibility ahead. LTTS reiterated about its aspiration of achieving US$1bn
annual run rate by 2Q/3QFY23 and US$1.5bn annual revenue run rate by FY25E. EBITDA 13,366 15,218 NA NA
➢ LTTS believes that growth in its six identified areas will be higher than company average PAT 9,140 10,816 NA NA
growth. However, these areas will require certain investments which along with gradual EPS 86.4 102.3 NA NA
increase in travel/ facility cost post stabilization of pandemic will keep margin volatile
in near term. It reiterated to achieve EBIT margin target of 18% by FY25E. Stock Information
➢ Overall growth visibility seems improving for LTTS given its diversified revenue base,
expected increase in ER&D outsourcing and its increased focus on six identified bets.
52 Wk H/L (Rs) 5,000/1,565
Encouraging demand environment: LTTS stated that the opportunity in the digital Equity Cap (Rs Mn) 210
engineering area is growing at fast pace given the shift of clients’ needs from traditional
Face Value (Rs) 2
ways of manufacturing, product/services consumption to processes which are more
intelligent, connected and autonomous. To leverage on this emerging opportunity LTTS Share Outstanding (Mn) 105.2
has identified and is investing into six strategic bets including j) electric autonomous Bloomberg Code LTTS IN
connected vehicle (EACV), ii) MedTech, iii) 5G, iv) digital manufacturing, v) Al & digital Ind Benchmark BSE IT
products and vi) sustainability. LTTS believes that addressable market for these six areas is
big and expects growth in these six areas for LTTS will be higher than company average Ownership (%) Recent 3M 12M
growth in coming years. LTTS reiterated about its aspiration of achieving US$1.5bn revenue
Promoters 74.2 0.0 (0.4)
run rate by FY25E (including inorganic initiatives) which requires around more than 4%
compounded qoq growth rates from 2QFY22E-4QFY25E. DII 6.2 0.3 2.5
Margin outlook: LTTS is aspiring for 18% EBIT margins by FY25E (17.3% in 1QFY22) given FII 9.4 (0.1) (0.3)
improving growth visibility esp. in the digital engineering, resulting operating leverage and Public 10.2 (0.2) (1.8)
efficiencies. However, it expects some volatility in margin qoq in near to medium term given
expected headwinds including i) increased employee hiring and retention cost due to rising
supply side challenges, ii) investments in six identified strategic bets including investments
in people, labs & other assets and iii) expectations of gradual increase in travel and facility
cost post stablisation of pandemic.
Other takeaways: LTTS continues to chase/win larger size and long tenure deals however
it also witnessing many short duration deals with high frequency of winning such deals as Relative price chart
large projects/contracts getting divided into multiple smaller deals. LTTS further stated that 5,200
LTTS IN Nifty Index
engagements with its clients are now becoming more strategic in nature with work moving 4,420
from non-core to core as core is getting redefined by clients. It also believes that it has 3,640
optimal vertical diversification and continues to focus on mining its existing clients with
2,860
focus to super-size some of them going forward.
2,080
1,300
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
(x) (%) (%)
FY21A 54,497 10,074 6,634 62.7 74.0 14.1 46.7 21.3 21.8 18.5 022-43320673
FY22E 64,134 13,366 9,140 86.4 53.7 11.8 34.7 24.0 31.0 20.8 Meet Rachchh
FY23E 74,422 15,218 10,816 102.3 45.4 10.0 30.0 23.9 35.6 20.4
+91-9892707286
FY24E 85,935 17,321 12,529 118.5 39.2 8.5 25.8 23.5 40.9 20.2
India Equity Research | Logistics
October 02, 2021
Mahindra Logistics
About the Company: Mahindra Logistics Limited is a leading 3PL solutions provider with
over a decade of experience. It has strong presence across the country in two distinct
business segments – Supply Chain Management and Enterprise Mobility Solutions. MLL
offer Supply Chain expertise to diverse industry verticals such as Automotive, Engineering,
Consumer Goods, Pharmaceuticals, Telecommunications, Commodities, and E-
commerce.
Represented by: Mr. Yogesh Patel - CFO

Disruption in Automotive Market
• Headwinds have been towards automotive part side of the business. The disruption
stared with one or two components and that has extended on more components.
Certain customers have reduced the production, and this has impacted the
volumes for MLL.
• Automotive component side is the biggest driver of volume shrinkage for MLL.
Company does not have good view of when the issue would settle down.
• Farm demand was healthy last year and this year as well it has stayed well. Farm
business, which contributes 1/3rd of its auto portfolio, has not been much impacted
due to disruption.
Larger Deals
• Bajaj Electricals Deal: Its going as per the contract timeline. There has been no
disruption due to the COVID. Deal would include integrated solution for their
supply chain and thus whatever supply chain management was done by them
inhouse or by third party logistics provider will be transitioned to the Mahindra
Logistics.
• Many companies now want to focus on their core businesses and not supply chain
and thus are outsourcing the whole of supply chain. Now companies want to have
supply chain handled by someone who has that resilience and skill.
Freight Forwarding
• Company has scaled up the Freight forwarding services. Upto 2020 it was 5% of
revenues and last year it has grown to 8%. In 1QFY22 it has grown in terms of
increase in the volumes.
Non-Auto Business
• FMCG, consumer durables, pharma, and telecom: these sector verticals have
stayed very steady. On YoY comparison they would scale up and in QoQ there
would be some capacity addition in one quarter and the utilization would be in
next quarter.
• 4mn sq.ft. capacity addition target is on track. Company has three different sites
on which it is working to build warehousing and post that there are couple of new
sites which have come up this quarter as well.
• Warehousing addition: most of it is non-Auto. There is certain space for
engineering and manufacturing space to grow. Auto motive industry as itself does
not need much of warehousing. Analsyts
• For increasing the revenue company need not continuously increase the Depesh Kashyap, CFA
warehousing space but if company is able to manage better throughput, provide depesh.kashyap@equirus.com
+91- 7228934327
better value-added services there would be revenue growth without space
addition. Piyush Sevaldasani
+91-9767990926
October 01, 2021
Company Update
Manappuram Finance
Healthy Business momentum across

businesses
➢ The impact of covid wave 2 was maximum in the 1QFY22 for Manappuram (MGFL).
Disbursements and AUM have bounced back since 1QFY22 across products.
➢ Gold holdings and AUM is expected to deliver growth from 1QFY22 level as gold prices have
not changed (declined) much Vs. the gold price in June quarter.
➢ Gold loan yields are expected to reduce by 2-3% going ahead. However, MGFL’s yield would
still be better than peer as shift in portfolio to lower yields would take some time.
➢ The broader thought process of the management is to remain price competitive in the gold
business and not let go of good/high ticket customers.
➢ MGFL is confident of achieving RoA/RoE of 4.5%/>25% for MFI Business.
➢ MGFL is focusing on growing the vehicle business more actively Vs. Housing. Higher capital
allocation is expected in vehicle as compared to housing
• Increased demand for gold loans is being witnessed for the company due to a)
decrease in pricing for ticket size of above Rs 0.1-0.2mn (other gold loans players are
generating yields of c.20% while MGFL was generating yields of 25%-26%) b) increase
in overall business activities (1/4th of the last quarter was lost on account of stringent
lockdowns) c) Shift in marketing activities to corporate level from field level.
• Auctions (Gold) are expected to be in-line with pre-covid levels (auctions are expected
to be at 0.5% of disbursements) in 2QFY22 as the gold prices were stable QoQ.
• The impact of covid wave 2 was more severe than Covid 1.0 as infections amongst
Asirvad’s staff was significantly high which led to disruptions in on-field activities (such
as collections and business momentum)
• CE for MFI business is expected to reach to pre-covid levels from next quarter
• Assam Update – Asirvad is expecting the first tranche of benefits from the government
schemes (for regular paying customers under MFI Loans) by mid-Oct’21, and
remaining tranches latest by Dec’21-Jan’22.
• Management will start the process for fund raising for MFI business only after a couple
of stable quarters for the segment as it would result in better valuations
• Improvement in CE is seen in VF, and with current trends, MGFL is expecting reversals
of provisions for this segment
• Although improvement in CE was seen in HF portfolio, NPAs would continue to remain
elevated as these are long term loans and roll forward in buckets was witnessed
• Capital allocation in the long term for Gold/ Unsecured/ Secured (HF, LAP, SME)/ VF Relative price chart
business to be 50%/15%/20%/10%. This is also the targeted loan book mix. MGFL IN Nifty Index
• Current business trends are encouraging and if it continues then the growth for FY22 270
might be higher than guided (2% growth/month from Jun’21-Mar’22)by management 245
220
195
170
145
120
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
(bps)
+91-079 6190 9541
FY21A 39,706 27,561 17,250 20.4 82.8 8.8 2.2 26.2 5.7 173.2
Rohan Mandora
FY22E 39,414 27,207 17,246 20.4 100.4 8.8 1.8 21.4 5.3 150.0
FY23E 48,788 35,231 24,193 28.6 126.1 6.3 1.4 24.6 6.6 90.0 +91-079 6190 9529
FY24E 59,066 43,827 30,182 35.7 156.5 5.0 1.1 24.8 6.9 90.0
India Equity Research | Construction
October 02, 2021
Company Update
Max Ventures and Industries Limited
Diversified play; Improving dynamics
➢ MVIL follows an asset light model by partnering with Institutional Investors for larger
developments. MEL has a diversified client base with professional services, Financial Services
and Technology segment accounting for ~50% of the leased area.
➢ MEL currently manages~0.7mn sq ft and has a strong project pipeline under planning stage
and plans to undertake development of ~5mn sq.ft. MEL also plans to foray into the residential
segment in the NCR region.
➢ Commercial segment has witnessed an uptick post 2nd wave of Covid and leasing enquires are
gaining momentum.
➢ MVIL is focussing on enhancing output of value-added specialty products under its packaging
films business. Work on the new CPP line is expected to commence in 2QFY22 & expected to
be commercializes in 4QFY22 expanding the company’s capacity by 7.2 KTPA.
Asset Light business model with strong partnerships: MVIL follows an asset light model by partnering
with Institutional Investors for larger developments. MEL has tenants like DBS, Nykaa, Veolia, IEX etc,
Professional services account for 29% of leased area while Financial Services - 14%, Technology -
8% others like Manufacturing, Utility, FMCG etc account for balance clients of the lease area.
Weighted Average Lease Expiry is 7.5 years, while Weighted Average rental is ~Rs104/ sq.ft.
Strong Commercial Pipeline; Plans to enter residential segment: MVIL has also developed 2 Grade
A+ Projects (Max Towers & Max House phase 1) and 2 projects are under development (Max Square
& Max House Phase 2). MVIL currently manages ~0.7mn sq ft and has a strong project pipeline
under planning stage and plans to undertake development of ~5mn sq ft of Grade A+ Commercial
Real Estate. MVIL has recently announced its foray into the residential real estate segment and plans
to enter the NCR region where MVIL has the know how and a strong foothold.
Commercial real estate business witnesses an overall uptick: Commercial real estate business
witnessed an overall uptick post second wave of Covid 19. Max tower is now 90% leased. 95% of
the Max tower area owned by MVIL is leased. Max House occupancy stands at ~18%. Leasing
inquires for the same has gained momentum post second wave of Covid. Construction at Phase II
Max house will commence from 2QFY22E.
Focus on enhancing its output from Specialty Films business: Speciality Films division has a capacity
of ~72K MTPA of BOPP films and MVIL is targeting to achieve 60-70% contribution from value
added films. The margin profile of the business has improved sharply over last 4 quarters by ~380bps
to 22.2% led by better product mix, higher realization, stable raw material prices and cost
optimization efforts etc.
Analsyts
Shreyans Mehta
shreyans.mehta@equirus.com
+91-022 4332 0611
Jainam Shah
Jainam.Shah@equirus.com
+91-079 6190 9516
India Equity Research | Media & Entertainment
October 02, 2021
Nazara Technologies
About the Company: Nazara Technologies is the leading India based diversified gaming
and sports media platform with presence in India and across emerging and developed
global markets such as Africa and North America, and offerings across the interactive
gaming, eSports, and gamified early learning ecosystems.
Represented by: Mr. Manish Agarwal - CEO

Gamified Learning
• Kiddopia has 4-5% market share and has huge headroom to grow. Marketing
spend is the lever for growth. Marketing budget came down in 1QFY22 due
to change in Apple policy. Company has found out alternative channels for
marketing spend. Company is an early partner working with Google and
Facebook for alternative channels.
• Conflict between Epic games and Apple: In case of Kiddopia when Nazara
gets subscription revenue, the platform like Apple takes 30%. Epic has raised
concern over paying this 30%. Court has said that Apple must allow third
party payment system also. Court has given 90 days to make this change.
Once Apple allows the third-party payments, Epic can collect money via other
payment systems. This is first time where anything outside Apple payment
system can infiltrate the Apple environment. If there is any reduction in
payments to Apple, Nazara will be using that savings for further growth than
look at margin expansion.
• Kiddopia targets 2-7 years old children. For these kids, school opening does
not matter. Average time spend has not reduced post COVID.
• US is 25mn kids’ market and company currently has 340,000 subscribers
only. Company has 4-5% market share considering the churn rates. The
growth looks linear today and once company becomes a household name
and reaches a certain tipping point, there will be nonlinear organic growth as
well.
• Other geographies. Post Apple policy issue the focus is on US market. In
European countries there is lot of fragmentation based on language.
Company would not look at expanding in European markets and would
double down in US market.
Esports
• Esports becoming a medal event at Asian games is a hugely positive step for
Esports as it will become a mass event. Indians have no baggage of past in
esports and can compete to win medals. It will have huge positive impact on
the way esports is viewed by the government and perspective of parents Analsyts
towards esports. This will solve the myths associated with gaming. Depesh Kashyap, CFA
• In Esports, company is looking at acquiring new IPs. Company has recently
+91- 7228934327
acquired IPs of OML.
Piyush Sevaldasani
+91-9767990926
. to important disclosures at the end of this report

Refer October 13, 2021| 38
India Equity Research | Real Estate
October 01, 2021
Company Update
NESCO Ltd
CMP
Rs 607
Strong growth potential
Estimate Revision
➢ Nesco has potential future development of ~0.9mn sqm of IT parks and ~0.9mn
Forecasts % Change
sqm of Bombay Exhibition totalling to ~0.17mn sqm.
➢ Nesco is planning to launch Tower II on its Goregaon land and is expecting a capex (Rs mn) FY22E FY23E FY22E FY23E
of ~Rs 19bn (assuming they can avail the benefits of taxes and other charges). Entire Sales
project funding is expected to be done from internal accruals. EBITDA
➢ Revenue from IT Park increased by ~15% yoy to Rs 2460.6mn during FY21. PAT
Occupancy at Tower 3 and 4 stood at 80% and 75% respectively. Rate per sq ft is EPS
around Rs 150 to Rs 160 per month.
➢ Income from Indabrator increased by 12.1% to Rs 260.9mn during FY21 and the Stock Information
company enjoys 10-15% market share of the industry. Market Cap (Rs Mn) 42,762
➢ During entire year only one guest exhibition was held which at the Bombay Exhibition
52 Wk H/L (Rs) 697/464
Centre which was organized by an existing client. Other exhibitions could not be
conducted in view of the lockdown and pandemic related restrictions. Avg Daily Volume (1yr) 1,48,369
Face Value (Rs) 2
Huge potential for Nesco: With its Goregaon land, Nesco has potential future
development of ~0.9mn sqm of IT parks and ~0.9mn sqm of Bombay Exhibition totalling
to ~0.17mn sqm. Further, leasing market in and around Goregaon is robust and there Bloomberg Code NSE IN
are no concerns on rentals. 2 of its competitors have limited space available and the new Ind Benchmark BSEREAL
additions have witnessed good traction from anchor tenants.
Launch of tower II at Goregaon: Nesco is planning to launch Tower II on its Goregaon
Promoters 68.5 0.0 0.0
land and is expecting a capex of ~Rs 19bn (assuming they can avail the benefits of taxes
and other charges). Entire project funding is expected to be done from internal accruals DII 4.7 0.0 (0.2)
however, Nesco may avail some debt to bridge the gap if required. Till date ~Rs 1bn has FII 2.7 0.0 (0.5)
already been invested by the Nesco. Public 24.0 0.0 0.6
Leasing and Indabrator business: Revenue from IT Park increased by ~15% yoy to Rs
2460.6mn during FY21. Occupancy at Tower 3 and 4 stood at 80% and 75%
respectively. Rate per sq ft is around Rs 150 to Rs 160 per month. Income from Indabrator
increased by 12.1% to Rs 260.9mn during FY21 and the company enjoys 10-15% market
share of the industry.
Exhibition business hit by pandemic: During entire year only one guest exhibition was held NSE IN Nifty Index
950
which at the Bombay Exhibition Centre which was organized by an existing client. Other
840
exhibitions could not be conducted in view of the lockdown and pandemic related
730
restrictions.
620
Healthy B/S; Net Cash on books: Nesco has zero debt on its books and has cash and 510
cash equivalents of ~Rs8.2bn on its books as on Mar’21. 400

Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
Analsyts
Shreyans Mehta
shreyans.mehta@equrius.com
+91-022 4332 0611
Jainam Shah
jainam.shah@equirus.com
+91-079 6190 9516
Nitin Spinners ltd
Spinning long term growth
➢ Nitin Spinners is a leading manufacturer of Cotton & Blended yarn, knitted fabrics,
Woven fabrics with current capacities of Yarn: 72,000 TPA and Knitted Fabrics: 8,500
TPA.
➢ Strong demand coming to India due to China+1 factor where global players looking
for alternative sourcing and reduce dependence on Chinese suppliers.
➢ Textile is the only commodity industry where forward integration into value added
products is possible.
➢ Company’s focus will remain on value-added products and increasing sustainable fibers
like organic cotton, recycled fibers, and lycra-blended yarn.
➢ Long term EBITDA margins guidance remains to be under 20%.

➢ Currently spinning capacity is running at full utilization led by strong cotton yarn
demand in export market. Export revenues contribution in total sales has increase
recently on heightened export demand and weak domestic demand which will get
normalize in coming quarters.
➢ Company is planning to increase spinning capacity marginally about 5% by
debottlenecking activities.
➢ Utilization levels in woven fabric division is lower currently due to weak domestic
demand but expected to ramp up in coming quarters. Margins are higher in fabrics
than yarn and this forward integration will reduce volatility in margins.
➢ Cotton prices which have run 60-70% in past year will come down as government will
not buy and new crop production starts coming.
➢ Cotton yarn spread between 2011 to 2020 remained around Rs 80/kg with +/-10.
But currently it is at Rs 110/kg. So according to company costs have increased during
this period by Rs 20/kg and hence spread should remain around Rs 100/kg.
➢ U.S clients buys more of fabrics and garments.
➢ Nitin Spinners have export market expertise in yarn related products. And company is
exploring export opportunities in fabric business also which is very negligible portion
currently.
➢ Deleveraging will continue this year also. But company may plan big capex after clarity
emerges in government policies side.
➢ Recently announced PLI scheme is applicable to MMF, garments and technical textiles
and hence not applicable for Nitin Spinners business.
Analysts
Vikas Jain
vikas.jain@equirus.com
079-6190 9531
Parth Patel
079-6190 9513
October 02, 2021
Company Update
Orient electric ltd.

CMP Target Price
Near-to-mid term growth levers intact Rs 331 Rs 375
despite NT uncertainties Rating Upside
LONG 13% ()
➢ New product launches, higher engagement with channel partners, expansion in Estimate Revision
distribution network and higher investment in digital space remains the key focus area Forecasts % Change
for Orient Electric (OEL). (Rs mn) FY22E FY23E FY22E FY23E
➢ In mid-term OEL expects contribution from exports to come back to pre-covid level of Sales 24,134 29,134 NA NA
8-10%. However, faster demand momentum in B2B and B2G expected from 3QFY22. EBITDA 2,423 3,167 NA NA
PAT 1,402 1,874 NA NA

➢ Chip shortage and other commodity cost increase continues to haunt OEL. In B2B
lighting business, OEL witnessed that market is not ready to accept the price increased EPS 6.6 8.8 NA NA
due to rise in commodity cost.

Stock Information
➢ Over last few years new product innovation index stood at more than 20%, showcasing
strong designing capabilities.
52 Wk H/L (Rs) 368/174
➢ E-commerce contributes 8-10% of total sales for OEL, major revenue comes from fans
& appliance business.
Commodity headwinds continues to haunt:
Face Value (Rs) 1
Chip shortages and lag in transferring cost increase has posed a lot of concern for OEL.
In B2B lighting business, prices have stabilized, however market is not ready to accept price
hike due to steep increase in commodity costs which has impacted the profitability. SYML Bloomberg Code ORIENTEL IN
expects chip shortage impact relatively lower as the SKUs which are impacted are not high Ind Benchmark SPBSMIP
revenue contribution SKUs. OEL is in the process of finding alternate circuits by the time
shortage hits. Ownership (%) Recent 3M 12M
Fans Business: Promoters 0.0 0.0 0.0

Fans business contributes 62%-65% of total revenue (75-80% - manufactured in-house). DII 0.0 0.0 0.0
OEL’s contribution from North is higher, whereas South remains a bit weak. Considering FII 0.0 0.0 0.0
itself far away from market leadership position, OEL believes it has a wide scope to grow.
Public 0.0 0.0 0.0
On the back of increased awareness towards fresh air, exhaust fans are growing faster as
compared to pedestal fans. In fans replacement vs. new sales ratio is 50:50 for OEL. Fans
market is shifting towards BLDC fans, OEL has a strong BLDC portfolio.
Lighting Business:
Lighting market is 1.5x of total fans market size, whereas OEL’s share is still negligible so
there is an ample of scope for OEL to grow up. 50-55% of total lighting products are
manufactured in-house. ORIENTEL IN Nifty Index
Appliances & Others: 375
Home appliances contributes 8-10% of total revenue. OEL posted more than industry 325
growth in water heater business. 100% appliances are outsourced, and 40-45% of 275
switchgears are manufactured in-house. 225
175
Sep-21
Sep-20
Mar-21
Jun-21
Dec-20
Source: Bloomberg

(x) (%) (%)
+91-079 6190 9523
FY21A 20,326 2,195 1,197 5.6 58.6 15.4 31.1 29.4 25.4 10.8
Deep Shah
FY23E 29,134 3,167 1,874 8.8 37.4 10.3 22.1 30.5 28.1 10.9 079-7359725344
FY24E 33,309 3,671 2,201 10.4 31.9 8.3 18.7 28.9 29.8 11.0
October 02, 2021
PDS Multinational Fashions Ltd.
Growth levers in place
➢ PDS is a global design led sourcing manufacturing and supply chain platform catering
towards leading brands and retailers. It has established its presence across 22
countries including UK, Belgium, Germany, US, Canada, Turkey, India, Sri Lanka,
Bangladesh, China, Myanmar, Cambodia, Egypt, Jordan amongst others.
➢ PDS has 3 business verticals: (A) Sourcing – the main business (~95% of topline)
wherein it acts as a crucial link between brand retailers & manufacturers/stock vendors.
(B) manufacturing: operates two manufacturing plants in Bangladesh mainly to
penetrate US market (C) venture tech investments: includes treasury, real estate & some
venture investments towards B2B & D2C businesses.
➢ Sourcing business being an asset light business makes an ROCE of ~64% whereas
other business like manufacturing & real estate which has a decent capital employed
making lower margins results in blended ROCE of ~33% at company level.
➢ Growth going ahead will be driven by (1) milking existing customers (2) entering newer
categories & (3) exploring newer geographies.
Sourcing business above pre-COVID levels: PDS clocked a revenue of Rs 16.26bn in

1Q21, surpassing the pre-COVID levels across all parameters. 1Q22 performance was
the best in last five years in terms of topline and margin expansion. This was mainly driven
by a strong sourcing business achieving high scalability with minimum capex. Additionally,
some of value-added services like designing & brand building are also aiding both retailers
as well as PDS in terms of revenues & margins. PDS currently clocks USD 1bn in revenues
mainly from UK. US contributes ~11% of topline & is expected to reach ~20% in near
term. ~7-8% of total sales in manufactured in-house while rest is outsourced to 500+
factories in countries like Bangladesh, China, Pakistan & India. Current demand trends
remain robust as onboarding of few business leaders have open up news business verticals
for PDS that can provide significant growth opportunity across verticals & geographies.
Manufacturing segment: With ~6,000 machine capacity & annual in-house production
of 36mn pieces, PDS manufacturing is running at full utilization levels. Revenues from
manufacturing grew ~85% yoy in 1Q22 with EBIT losses reducing by ~38%.
Management expects to double the topline & achieve breakeven in FY22E.
Venture Tech Investments: It is the third segment of PDS which has ~17% or Rs 2.14bn of
the total capital employed spread across treasury investments (~5%), real estate (~4%) and
PE investments (~7%). PDS allocates certain portion of profits towards ESG investments.
Working capital to come down further: PDS has managed to reduce its working capital from
~10 days in FY20 to ~5 days in FY21 and ~2 days in June 21. Management is working
to bring it down further to 0 or negative which will add to the return profile of the company.
Outlook: Management expects the existing business to grow at ~10-15% on a sustainable
basis. Additionally, strengthening of team with inclusion of experienced business heads is
not only helping PDS to (1) have additional wallet share of existing customers (2) add new Analysts
product categories in the portfolio & (3) explore newer geographies – this is expected to Vikas Jain
provide significant growth to topline & margins. vikas.jain@equirus.com
079-6190 9531
Parth Patel
079-6190 9513
India Equity Research | Wires & Cables
October 02, 2021
Company Update
Polycab Ltd
CMP Target Price
Rs 2,347 Rs 2,060
Journey has started for Rs 200bn revenues
target by FY26
Rating Upside
ADD -12% ()
➢ Jul–Sept’21 remains encouraging for Polycab on the demand front mainly on the back of private Estimate Revision
Forecasts % Change
investment picking up on B2B side. However, B2G continues to struggle. 2HFY22 likely to be
better than 1HFY22. (Rs mn) FY22E FY23E FY22E FY23E
➢ Polycab has identified key growth triggers for Rs 200bn sales target by FY26 and will share the Sales 1,07,741 1,27,338 NA NA
granular details in the times ahead. EBITDA 13,207 15,982 NA NA
➢ Over next 2-3 years, 80-100bps of cost will be saved under “Project Udaan”. PAT 9,328 11,341 NA NA
➢ In W&C, Polycab expects 11-13% margins to be sustainable in mid-to-long term. Polycab 62.7 76.1 NA NA
EPS
remained aggressive on pricing front in cables business to gain market share.
➢ In FMEG, Polycab aspires EBITDAM of 12% by FY26. Stock Information
➢ In fans, Polycab is planning to set-up new facility as current capacity operating at higher Market Cap (Rs Mn) 3,50,040
utilization rate.
52 Wk H/L (Rs) 2,627/801
Wires & Cables segment: Equity Cap (Rs Mn) 47,539

Face Value (Rs) 10
W&C revenue mix is 50:50, in wires 30% is flexible wires (B2B) and 70% is HW (B2C). In
mid-to-long term 11-13% margin is sustainable. In cables business, Polycab remained Share Outstanding (Mn) 149.2
aggressive on pricing front to gain market share and top-line growth. Once situation Bloomberg Code POLYCAB IN
normalizes, Polycab expects market share gains will give competitive edge (For e.g. – Ind Benchmark SPBSCGIP
operating leverage benefit). On the export front Polycab’s focus remains on regular
revenue generating orders. On overall profitability and working capital front, domestic and Ownership (%) Recent 3M 12M
export business goes hand-in-hand. Promoters 68.4 0.0 (0.2)
FMEG Segment: DII 8.0 (1.2) (4.2)

FII 7.4 0.3 1.9
• Fans portfolio got impacted during 1Q due to covid 2.0. However, other
categories reported a demand growth. Public 16.3 1.0 2.3
• Polycab aspires EBITDAM over 12% by FY26.

• Polycab’s main focus remains on electrical space. Polycab launched new Zoomer
plus which is in compliance with required BEE norms. Recently, Polycab launched
smart plugs and extension boards.
• Manufacturing capabilities in FMEG categories: Currently, Fans, water heaters, POLYCAB IN Nifty Index
switchgears are manufactured in-house. LEDs are manufactured in-house from JV.
2,800
2,380
Pumps are currently outsourced. Polycab will evaluate to manufacture pipes and
1,960
fittings in-house. Polycab is evaluating to set-up new facility as current capacity is
1,540
operating at higher utilization rate. In lights, Polycab is expanding portfolio in 1,120
decorative lighting. 700
Sep-20
Sep-21
Mar-21
Jun-21
Dec-20
• In fans, Polycab remains in top-6 players in fans and in other categories market
share remains 2-3%. Source: Bloomberg

(x) (%) (%)
+91-079 6190 9523
FY21A 87,364 10,909 8,313 55.7 42.1 7.4 31.3 19.5 20.4 12.5
Deep Shah
FY22E 1,07,741 13,207 9,354 62.7 37.4 6.5 25.7 18.5 20.9 12.3 Deep.shah@equirus.com
FY23E 1,27,338 15,982 11,341 76.1 30.9 5.6 20.8 19.5 23.3 12.6 079-7359725344
FY24E 1,45,829 19,154 13,501 90.5 25.9 4.8 17.1 20.0 26.2 13.1
Prince Pipes & Fittings Ltd

All set to benefit from Industry consolidation
➢ For Prince, demand has been progressively getting better MoM with each month
witnessing better demand than previous month. Management expects that semi-urban
and rural regions will deliver higher growth to the company as compared to the urban
regions.
➢ In the current quarter, most of the unorganized players and many organized players
having national presence faced PVC resin supply issues. However, Prince did not face
this problem on robust supply security which helped company in gaining some market
share in this quarter.
➢ Currently, company’s target is to focus on utilization of its last commissioned Rajasthan
plant and ongoing Telangana plant where adequate land banks are available for
further expansion.
Demand traction: With real estate space witnessing demand resilience, management
expects the company to benefit significantly from this with 65% of company’s portfolio
applicable for domestic use (Plumbing and SWR). Management expects real estate sector
to witness even better demand starting December and this demand is rather expected to be
sustainable than pent-up in nature.
Impact of BIS standards implementation: Management expects that the implementation of
BIS standards from Sep’21 will significantly impact the unorganized players who are already
bearing the greater impact of covid related challenges. This will lead to accelerated
consolidation thereby shifting the pricing power to the large organised players.
Lubrizol tie-up for Flowguard bearing fruits: With tie-up with Lubrizol for Flowguard,
company has started seeing good movement in B2B space where company was not
historically dominant. Management expects B2B setup to gain significant traction for the
company while B2C will continue to be the leading contributor.
Other takeaways:
• Management feels that distribution expansion, product portfolio expansion and
capacity expansion have all to be done simultaneously to benefit from the ongoing
industry consolidation.
• Jal Jeevan mission generated significant demand in 3Q21 and 4Q21 but was
impacted by the second wave. Management expects it to again pick-up momentum in
2H22.
• Management stated that the CPVC and PVC price gap which narrowed on steep rise
in PVC prices has already started widening again with rise in CPVC prices. Further, in
the medium term, resin prices are expected to correct; however, they will not go to pre-
covid levels.
• North and East are most price sensitive market whereas South is the most quality
conscious market. West has combination of quality and price point competition.
Financial Summary
Sales EBITDA P/E (x) P/B (x) EBITDA ROIC Margin
Rs mn PAT (Rs) (%) Pranav Mehta
(x) (%) (%)
FY21A 20,715 3,616 2,218 20.2 34.2 7.3 28.3 23.6 0.0 17.5
+91-07961909514
FY22E 21,676 3,121 1,822 16.6 41.7 6.4 32.8 16.4 0.0 14.4
Aman Agrawal
FY23E 25,706 3,959 2,397 21.8 31.7 5.6 25.8 18.8 0.0 15.4 aman.agarwal@equirus.com
FY24E 30,151 4,643 2,845 25.9 26.7 4.8 21.9 19.3 0.0 15.4 +91-079 6190 9526
India Equity Research | Consumer Staples
October 02, 2021
Company Update
Radico Khaitan ltd.
Well placed to capture IMFL market
➢ RDCK remains well placed to capture the market share and growth in the IMFL space
led by existing portfolio in the white spirits (market leader in vodka segment), P&A
brands and planned new launches
➢ Share of P&A in the overall RDCK portfolio will continue to rise led by new launches
and gradual scaling of existing brands such as 8PM Premium black, Morpheus blue
brandy, gradual expansion of super premium brands such as Rampur single malt and
Jaisamer gin and new launches (in white and brown spirit) in the P&A segment.
➢ RM prices continue to remain benign which along with increasing share of P&A should
lead to gradual margin expansion. RDCK remains net debt free company.
Broad-based growth likely across portfolio likely to continue: RDCK is likely to continue the
industry outperformance led by growth across portfolio. 8PM premium black is likely to do
sales of ~2mn cases in FY222 (~1.2mn cases sold in COVID hit FY21). Moreover, RDCK
is trying to make brandy, second biggest segment in IMFL, an all season drink (currently
being consumed majorly during winters) which would aid volumes for RDCK as it has
products across the price points in the brandy segment and it forms 18-20% of the volumes
for RDCK. New launches are planned in the Brown and White spirits which would be in
the P&A segment.
Profitability to be robust led by benign RM prices and increasing share of P&A: Prices of
key RM continue to remain benign and as the monsoons have been adequate in FY22,
management expects the favorable RM scenario to continue for FY22. Moreover,
increasing share of P&A will be led by new launches and existing products which will also
aid margins. White spirits currently command higher margins compared to some of the
brown spirits for RDCK. A&P spends are likely to remain in the range of 8%-9% as it will
continue to invest behind brands and support new launches.
Building blocks in place to capture market share in IMFL space: RDCK has been growing
consistently growing ahead of IMFL industry over the past five years. Recent developments
in the state of Delhi, Andhra Pradesh have been positive for IMFL. Moreover positive news
is expected from West Bengal market as the volumes had been affected due to hike in Relative price chart
excise duties. RDCK’s net debt is at the lowest levels. Moreover, stable sales from CSD 1,000
RDCK IN Nifty Index
(~10-12% of volumes for RDCK) and growing focus on International business will also aid 880
sales. All these factors augur well for the company as a whole. 760
640
520
400
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Ronak Soni
Rs mn PAT (x) (x) (%) ronak.soni@equirus.com
(x) (%) (%)
FY21A 24,181 4,089 2,706 20.2 44.4 6.8 30.0 16.5 14.3 16.9 +91-8130631728
FY22E 27,910 4,524 3,073 23.0 39.0 5.9 26.7 16.2 14.7 16.2
FY23E 32,508 5,731 4,084 30.6 29.3 5.1 21.0 18.6 17.6 17.6
FY24E 36,468 6,502 4,784 35.8 25.0 4.3 18.5 18.7 18.0 17.8
October 02, 2021
Company Update
RBL Bank
Card issuance resumed; spends seeing

strong momentum
➢ Business activity levels have improved in the quarter, however, slippages in the quarter
is likely to remain similar to the previous quarter as the delinquencies in the harder
bucket (60-89 dpd) are taking time to recover. Expects slippages/credit cost to
normalize from 3QFY22/4QFY22 respectively
➢ Bank expects operating expenses to remain elevated due to a) increase in retail
business volumes, b) investment on branches and people, as bank plans to reach 650-
700 branches in next 2-2.5 years, c) investment in technology and enhancement of
digital platform
➢ Management expects FY22 loan growth to be lower than FY21. FY23-FY24 loan
growth to be around 18-20% on account of more than 30% growth in key focus areas
and re-balancing of loan book
➢ Bank has been using higher deposit rates to acquire new customers. Cost of deposits
is likely to stabilize ~75bps higher than the larger pvt banks in next 9-12 months
➢
• RBK is seeing early signs of demand coming back in wholesale banking and will look
to grow the book in a selected manner.
• Credit Card spends were better than pre-covid levels in Jul’21 and it has further
improved in Aug’21/Sep’21. RBK has started issuing cards on Visa Platform and bank
is confident of making up the loss of 1.5 months. From 3QFY22 onwards, asset quality
is likely to become better as collections in soft buckets have improved. Partnership with
Bajaj Finance is likely to be renewed before the Nov’21-end (expiry date)
• Microfinance collection efficiency (CE) in Jul’21 improved to 88%, however, in
Aug’21/Sep’21, it has not improved sharply. RBK has started disbursements, however,
caution still remains. In about 30-35% of the pre-covid book, centre meetings are not
taking place regularly and collections are done via door to door, hence, it will take
time for collection efficiency to improve.
• RBK has changed strategy in business loan segment by shifting towards secured
business loans and branch sourced customers with better current account relationship.
Loan yields are expected to be lower; and disbursements are also expected to be
impacted in the near term
• In Home loans, healthy trends seen in sanctions. Target segment- ticket size: Rs 1.0- Relative price chart
4.5mn, loan yields: ~8.5%, area: tier-2/tier-3 cities. Competition is likely to be from RBK IN Nifty Index
HFCs and SOE Banks. RBK will use internal sourcing for home loans and a large part
290
265
of it will be sourced via its subsidiary RBL Finserv. Bank has created a dedicated 240
channel for balance transfer cases. Over the next 2-3 years, with improved cost of 215
funds, bank plans to move to higher ticket size loans 190

165
140
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EPS ABVPS P/ABV ROE
Mar NII PPOP PAT P/E (x) RoA (%) cost rohan.mandora@equirus.com
(Rs) (Rs) (x) (%)
Rs mn (bps)
+91-079 6190 9529
FY21A 37,876 30,908 5,078 8.5 191.0 22.8 1.0 4.4 0.5 411.8
Lalit Deo
FY22E 43,188 34,006 769 1.3 196.7 150.5 1.0 0.6 0.1 550.2
FY23E 48,614 36,099 16,987 28.4 225.1 6.8 0.9 12.6 1.5 206.3 +91-079 6190 9533
FY24E 56,819 41,940 19,708 33.0 251.1 5.9 0.8 13.1 1.5 211.5
October 03, 2021
Company Update
Rolex Rings Limited
Witnessing strong demand

X traction
➢ Historically, ROLEXRIN was not supplying to any major Korean bearing company till
FY20. However, last year the company added a leading Korea-based bearings
company as customer Korean OEMs are looking to localize sourcing from India with
increasing volumes.
➢ Post COVID, global companies are looking at the China + 1 sourcing strategy to
reduce dependence.
➢ Received a large order from a leading global bearings company for end usage in a
large EV manufacturer. Initially, the order was received from the company’s US plant;
however, based on quality and delivery, ROLEXRIN received orders from the customer’s
European plant as wel
➢ Couple of domestic bearing customers have increased inhouse production and have
started interacting with the company for rings
• Almost 95% of auto component parts supplied by the company are machined.
• Due to higher value addition, ROLEXRIN generates better margins in the auto
component segment compared to bearing rings.
• Management plans to pay the CDR Debt by next month, Long term debt remaining
post that would be Rs. 280 Mn
• 3-4 automobile customers expect impact due to chip shortage expect it to normalize
in next 3 months. Industrial business will not be impacted by chip shortage
• No change in schedule forecasted by export customers but one domestic customer has
cut down due to chip shortage,
• Started supplying orders for EV from September, will ramp up supply in November
• Forging Capacity Utilization: In FY20 it was 43-44%, will cross 55% in 1HFY22 and
will be 60% by FY22 end
• Machining capacity utilization at 85% for last 3 years, will keep adding machining lines
as per product requirements
• Expect Rs. 200-300 Mn capex/yr for next 2-3 yrs for maintenance and adding lines
ROLEXRIN IN Nifty Index
• No container shortage but higher frieght charges would impact margins 1,225
• Input Cost is 100% passed on, domestic 1 month time lag, export 1 quarter lag. 1,125
• ROTDEP wasn’t there till August but would now be added to revenue from now 1,025
onwards 925
825
Aug-21
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Ashutosh Tiwari
Rs mn PAT (x) (x) (%) ashutosh@equirus.com
(x) (%) (%)
FY21A 6,163 1,089 883 37.0 29.5 7.3 29.6 28.4 13.7 17.7 +91-8128694112
FY22E 10,005 2,248 1,283 47.1 23.2 5.5 13.7 28.6 29.6 22.5 Aashin Modi
aashin.modi@equirus.com
FY23E 11,991 2,711 1,817 66.7 16.3 4.1 11.1 28.9 33.3 22.6
+91-9726744353
FY24E 13,932 3,165 2,214 81.3 13.4 3.2 9.5 26.7 35.9 22.7
October 02, 2021
S P Apparels Ltd.
Witnessing strong demand momentum
➢ SP Apparels Ltd. (SPAL) is into kids knitted garment manufacturing business. SPAL is
fully backward integrated and has no requirement of major CAPEX in near term.
➢ SPUK is a pure trading arm of SPAL. Smaller order sizes (less than 10k pieces) or other
than kids’ garments are outsourced to countries like Bangladesh, Vietnam, Pakistan
etc. With revenue of ~Rs 800mn in FY21, SPUK makes margins of ~5%.
➢ SPAL has a retail division which houses the ‘Crocodile’ brand. Despite several
problems during COVID times, this segment is expected to return back to the growth
trajectory post transferring it into a fully owned subsidiary & raising growth capital.
Revenues of this segment for FY21 were Rs 400 mn.
➢ China is reducing textile production and focusing on other industries. Any shift of
demand to India will be huge fillip to Indian textile industry. Also, customers are shifting
away from Chinese suppliers.
India emerging as preferred sourcing destination, SPAL in sweet spot: Client sourcing
depends on type of garments - Knitted garments are preferred from India, synthetic is
preferred from China, denim from Bangladesh and high-end fashion from Turkey. India,
with a good history, is becoming a preferred sourcing destination with China+1 strategy
playing out. For SPAL, scope for operating leverage is huge as new capacities are yet to
be ramped up. With current 5,100 sewing machines and revenues of Rs 2mn per machine,
it expects peak revenues of Rs 10-11bn by FY23. Additionally, with second shift
implementation happening gradually, revenues can reach up to Rs 14bn.
Garment order book strong, margins to remain in ~18-20% range: With ~Rs 3.5bn order
book, garment outlook remains strong as existing customers are witnessing strong demand.
Additionally, SPAL has added 2 more clients which are expected to add to the orderbook
from next quarter. Extension of RoSCTL benefits has reduced the uncertainty on margins
and has also provided cushion against the rising input RM costs. SPAL has guided for
garment margins to remain in range of 18-20%. It also expects to reach Rs 10 bn revenues
in FY23 post which it can do ~15-20% revenue growth over next few years.
Rising input costs a challenge, but manageable: Similar to other textile players, SPAL is
also witnessing a sharp surge in its input costs – mainly cotton & freight costs. A high level
of backward integration along with cushion from higher RoSCTL rates is expected to offset
the margin pressure arising from higher cotton costs. On the other hand, since all export
orders for SPAL are on FOB basis, the burden of higher freight costs is on the retailer, thus
making SPAL immune to higher freight charges.
SPUK on a growth track: With increased focus of retailers on customer facing activities,
global retail chains are gradually outsourcing their sourcing to players like SPUK with wide
connects with manufacturers. SPUK has added two customers which are expected to add
to the current order book of GBP 7.1mn. It also provides some value-added services like
designing to the retailers to get incremental share of wallet. With dealings across men’s,
women’s & kids wear, margins for SPUK are expected to remain at ~5-6%.
Retail undergoing restructuring: With shareholders not approving the hiving off proposal
of retail segment to promoters, SPAL management has now decided to transfer the retail
division to a fully owned subsidiary and raise capital from markets to support growth of this
division. SPAL also expects to add a kidswear and sportswear brand to the existing Analysts
Crocodile brand in order to reap benefits of multi-brands & thus provide a kick-start to the Vikas Jain
stalled growth of this segment. vikas.jain@equirus.com
079-6190 9531
Parth Patel
079-6190 9513
October 02, 2021
Company Update
South Indian Bank Ltd
New Credit card launched; focus on 6C

strategy continues
➢ Business activity levels have picked up from the second half of Jun’21, however,
management expects business to revert to normalcy from 2QFY22. Healthy traction
seen in retail loans like personal loans, auto loans. In home loans/mortgages,
sanctions have improved during the quarter
➢ Bank is seeing healthy trends in new proposals of SME, from each geography, however,
bank has remained cautious in segments such as tourism, hospitality, hotels which are
still facing challenges
➢ Bank has tied-up with FPL technologies to launch credit cards under which the risk,
policy and funding will be done by the bank. Further, FLDG is also likely to be involved.
In gold loan business, bank is looking to enter into partnership agreement with Rupeek
➢ Bank intends to increase the RoA to 1% over the next 3-4 years and also plans to
increase the PCR (excluding write-offs) to 60% over the same time period.
• Management highlighted growing loan book in the current rate regime has been
difficult and unfavourable as the customers are always looking for low interest rates
• Bank has tightened its underwriting mechanism in SME loans by incorporating

parameters like Cibil score, CMR ratings, cash flows of the borrower, sector analysis,
etc.
• Bank has divided the SME into 2 segments i.e. upto Rs 20mn which is more retail in
nature and above Rs 20mn where the focus of the bank will be on financials and cash
flows of the borrower
• Management highlighted growing loan book in the current rate regime has been
difficult and unfavourable as the customers are always looking for low interest rates
• On CASA front, healthy traction is seen among all the channels, including Govt., TASC
and NR deposits. Bank remains in course to achieve CASA ratio of 35% by FY24-end
• Due to the current account regulation, Bank lost Rs 6bn of current account deposits.
CA deposits growth by the end of Sep’21 is expected to return to positive territory Relative price chart
SIB IN Nifty Index
• Cost income ratio is expected to be impacted by the recently announced IBA related 15
pension guideline 13
10
5
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
(Rs) (Rs) (x) (%) (%) rohan.mandora@equirus.com
Rs mn (bps)
+91-079 6190 9529
FY21A 24,069 16,179 619 0.3 16.9 34.5 0.6 1.1 0.1 250.0
Lalit Deo
FY22E 25,287 16,186 842 0.4 16.5 25.3 0.6 1.4 0.1 249.4
FY23E 27,982 17,970 3,604 1.7 19.5 5.9 0.5 6.0 0.3 199.8 +91-079 6190 9533
FY24E 30,559 19,547 4,903 2.3 23.8 4.4 0.4 7.7 0.4 179.4
October 01, 2021
Company Update
Spandana Sphoorty Financial Ltd
Foraying into non-MFI businesses
➢ Spandana is looking to change the loan book mix by increasing non-MFI business
(secured) to 40% by 2025 from ~3% currently. This is due to inconsistency in
profitability from MFI business since 2010
➢ The Non-MFI business would be conducted through Spandana's subsidiary Criss
Financial. Focus for the next 4-5 years is to diversify product segments i.e., Gold Loans
and LAP
➢ AUM is expected to grow to Rs 95-100bn by FY22, and Rs 120-130bn by FY23
➢ Credit cost for FY22 is expected to be >2%. Provisions of Rs ~4bn would be required
for covid wave 2.
➢ The management has no plans to shift back to weekly/bi-weekly repayment model
➢ Disbursements were resumed in branches where the collection efficiency (CE) was more
than 90%. Disbursements in Aug’21 stood at ~Rs 5.6bn
• Criss Financial will have separate branch network and operating framework. Non-MFI
businesses would be targeted in tier-2/3/4 locations
• Existing customer base is not the target segment for gold loans (except customers who are in
3rd or 4th cycle, who would now be able to buy some jewellery), and the focus is on walk in
customers.
• Each gold loan branch would have an AUM of not more than Rs 100mn in such towns and
could be scaled 2-3 years, while the business would still be profitable given the IRRs of 20%
along with low rental costs in such towns (which is the main expense for a gold loan branch).
• LAP portfolio is expected to increase to Rs 4bn by FY22 (5% of the total portfolio)
• LAP business would be 6% RoA business
• The company is left with sticky non-paying MFI customers and thus the CE for Sep’21 did not
increase significantly (CE for Sep’21 was 94-95%)
• CE is expected to increase marginally to 96.5-97%, resulting in 3-4% credit losses.
• 4QFY22 is expected to be a normal quarter assuming there is no covid wave 3.
• States of AP, TS, KA, GJ are doing extremely well in terms of portfolio performance while Relative price chart
portfolio performance of KL and MH is not well. SPANDANA IN Nifty Index
855
• Number of borrowers/loan officer were reduced in 1QFY22 as significant time of the loan
780
officers was going in visiting the borrower’s place, due to inability to conduct centre meetings
705
16,000 borrowers were added in 1QFY22
630
• According to the management, small and mid-sized MFIs might increase the pricing as the 555
current margins are unsustainable (Yields – 21%, avg. industry opex cost – 6%, COB – 14%, 480
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
resulting in net 1% margin.
Source: Bloomberg
(bps)
+91-079 6190 9541
FY21A 9,395 8,456 1,455 22.6 412.7 25.0 1.4 5.4 2.0 861.0
Rohan Mandora
FY22E 10,421 9,140 3,014 46.9 461.3 12.1 1.2 10.4 3.2 575.0
FY23E 12,309 11,294 6,398 99.5 569.6 5.7 1.0 19.0 5.7 250.0 +91-079 6190 9529
FY24E 15,697 14,588 8,289 128.9 698.0 4.4 0.8 20.2 6.1 250.0
September 30, 2021
Company Update
Sterlite Technologies
Positioned to ride macro tailwinds
➢ Management is witnessing a strong demand outlook driven by (a) faster than expected
adoption of 5G, (b) increasing rural connectivity projects and (c) increasing FTTx
rollouts. SOTL is well placed to play a crucial role in this decade long network creation
cycle though its robust offerings in optical interconnect products, system integration
services and wireless solutions.
➢ Management is witnessing an uptick in fibre realisations with lengthening lead times
and does not expect any disruptions in the current demand-supply scenario as ~30-
40% of preform capacities in China are currently mothballed.
➢ The impact of fibre realisations would gradually reduce on the company with its
increasing end-to-end solutions (packaged solutions) and decreasing bare fibre sales.
➢ Management has maintained its guidance of ~17-18% EBITDA margins and aims to
spend ~3-4% of sales on R&D on wireless technologies (mainly towards radios).
Strong demand environment: SOTL is well placed in the decade long network creation
cycle driven by (a) faster than expected adoption of 5G (~400mn subscribers, 173
commercial operators globally), (b) increased focus on rural broadband connectivity by
countries like USA (~US$ 65bn set aside), India (~Rs 190bn provided via VGF for
Bharatnet, total investments to be >Rs 300bn) etc. and (c) increasing FTTx rollouts (FTTH
expected to double in next 6 years in Europe, ~10mn by CY25 in India). Recent GoI
announcements for telcos is expected ease their liquidity requirements likely translating into
fiberisation capex going ahead. Demand from Data Centers in India for multiple fibre
pathways (to build redundancies) has also started increasing.
Improving realizations: Following the supply-demand disruptions caused by excessive new
preform capacities in China, prices for OF/OFC have been consistently declining over the
last 1-2 years. However, after consecutive quarters of strong global demand and
lengthening of lead times, especially in North America and Europe, this situation seems to
have recently started reversing. Since, ~30-40% of the preform capacities in China are
currently mothballed and will gradually come on board, management does not foresee new
preform capacities to come in any time soon and put downward pressure on spot prices.
Recently, China mobile announced a tender for ~143mn fkm (20% higher volumes yoy) at
improved spot prices and management expects continued demand from China going ahead
(~50% of the world market). However, the impact of fiber spot prices on the company is
gradually reducing as it is scaling up its end-to-end solutions, reducing its fiber related SOTL IN Nifty Index
connectivity dependencies in tandem. 340
Margins: Management has guided for sustainable EBITDA margins of ~17-18% with R&D 290
spend of ~3-4% of sales (inclined towards wireless radios). EBITDA margins in connectivity
240
business tend to be higher than system integration business.
190
140
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA Harshit Patel
Sales EBITDA EPS (Rs) EBITDA ROIC Margin harshit.patel@equirus.com
(x) (%) (%)
+91-079 6190 9522
FY21A 48,252 8,107 2,791 7.0 40.1 5.6 12.2 14.3 8.6 16.8
Mayank Chaturvedi
FY22E 61,765 10,469 4,583 11.6 24.4 4.7 13.1 21.0 11.8 17.0
mayank.chaturvedi@equirus.com
FY23E 73,361 13,123 6,387 16.1 17.5 3.9 10.1 24.2 14.8 17.9 +91-079 6190 9531
FY24E 81,335 14,678 7,725 19.5 14.5 3.2 8.6 24.3 17.0 18.0
October 2, 2021
Company Update
Surya Roshni Limited
Focus remains on sustainable growth along

with improving profitability and WC cycle
➢ Surya Roshni (SYR) remains #Number 1 player in GI pipes, #Number 1 exporter of
ERW pipes and #Number 2 player in lighting business.
➢ Non – metro cities generate 82% of total revenue for SYR. However, SYR is moving
towards metro and tier-1 cities as well.
➢ In last few years, SYR continued focus remains on ROCE improvement (18% -
4QFY21), capex spending and better working capital management (59 days in
4QFY21, which is further targeted to reduce to 50 days).
➢ In steel business, SYR anticipates a volume growth of 12-15%. Currently SYR operating
at 78% capacity utilization. SYR will add new capacity once utilization reaches 85%.
➢ As a part of backward integration, SYR will start component manufacturing. SYR has
participated in PLI in large investment category.
Major Growth drivers / strategy for SYR:

1. Jal Jeevan Mission: Last year major supplied done to Himachal Pradesh. During
current year, Surya Roshni witnessing good quantum of requirement from
Uttaranchal (tender announced 2-3 days back – 50,000 MT), J&K (tender
announced last week – 1,50,000 tonne) and Manipur (60,000 tonne). 90% of GI
pipe production is already booked which will start from next month.
2. During current year, Surya Roshni witnessing good quantum of requirement from
Uttaranchal (tender announced 2-3 days back – 50,000 MT), J&K (tender
announced last week – 1,50,000 tonne) and Manipur (60,000 tonne). 90% of GI
pipe production is already booked which will start from next month.
3. Good outlook for section pipe in large infra projects like airport and railway.
Export demand from USA and Canada is also encouraging. For section pipe,
Surya Roshni has expanded capacity which will be operational by the end of the
financial year.
4. River connectivity projects are expected to be the game changer as water
availability is an issue for India.
5. LED lightings Surya Roshni is moving towards metro cities and tier -1 cities and
strengthening presence in rural and semi-urban areas. In Consumer durable,
Surya Roshni launched different product in different geographies which is helping
to deliver 35-40% yoy growth.
Steel Pipe Business:
• In steel pipe business, consumer sales increased to 65%. SYR has a network of
25,000 dealers.
Lighting Business:
• LED sales as a % of overall sales is 55-60%. Portion of conventional lighting has
Analsyts
reduced and expected to reduce further. SYR entered into monumental lightings Manoj Gori
as well as smart lightings. In lighting business, consumer business in last 2-3 years manoj.gori@equrius.com
grew to ~75-80%. SYR caters to ~ 250,000 counters. +91-079 6190 9523
Deep Shah
Deep.shah@equirus.com
079-7359725344
October 02, 2021
Company Update
Symphony Limited
CMP Target Price
Rs 1,065 Rs 1,450
Normalise business environment –only
requirement for strong & sustainable growth
Rating Upside
LONG 36% ()
➢ Management highlighted they are here for long term and 3-4 years of business Estimate Revision
disruptions won’t induce management to change the overall business strategy. Focus Forecasts % Change
remains on air cooler category with sustainable growth likely from domestic market (Rs mn) FY22E FY23E FY22E FY23E
and by expanding global presence. Sales 12,016 14,265 NA NA
➢ Symphony Limited (SYML) remains the undisputed leader in Air-cooler space with 11
EBITDA 2,406 3,138 NA NA
manufacturing facilities and more than 70 household cooler model and wide range of
industrial and commercial coolers. PAT 2,057 2,650 NA NA
➢ Due to wash-out of summer season, current inventory levels are high but not alarming. EPS 29.4 37.9 NA NA
➢ For catering well in Brazil market, SYML has created a subsidiary which will buy from
India & China. Stock Information
➢ Revenue from the rest of the world during FY21 stood at 52% (22% in FY15),
showcased SYML’s global presence.
➢ SYML expects large space venti-cooling to be a key growth driver going forward. 52 Wk H/L (Rs) 1,530/811
➢ Organized has 25% market share of which 50% market share is of SYML. Avg Daily Volume (1yr) 1,40,039
Strong distribution network & presence: Equity Cap (Rs Mn) 7,592
SYML’s strong distribution network and higher presence gives a competitive edge. SYML’s Face Value (Rs) 2
has ~900 distributors and ~30,000 dealers. SYML is present in more than 7,000 towns Share Outstanding (Mn) 70.0
and cities and export presence over 60 countries. SYML has almost 2x service centers as
Bloomberg Code SYML IN
compared to #Number-2 player.
Ind Benchmark SPBSMIP
Growth levers intact for domestic and international markets:
Disruptions due to bad climatic conditions and COVID-induced disruption has weighed on Ownership (%) Recent 3M 12M
secondary sales during 4 years from the last 5 years. Management sounded confident that Promoters 73.3 0.0 (1.8)
the growth levers are intact for domestic and international markets. Normalised business DII 9.3 (0.9) (0.8)
environment is what is required for strong performance which is expected in CY22.
FII 4.5 0.1 (0.6)
Large Space Venti – cooling need of the time:
Public 12.9 0.8 2.9
Unique concept of air-cooling plus ventilation is not offered by any other cooling
technology. SYML believes market of Large Space Venti to overcome house-hold air-cooler
market going forward. From FY14, number of installations made by SYML increased by
34x (3,400 installations in FY21).
New Launches receives encouraging response:
SYML launched DiET 3D, New SUMO, Hi Flo, Venti Cool 10U, Venti Cool 08 U. SYML
SYML IN Nifty Index
received an encouraging response for new portfolio which command better gross margins 1,625
than the current portfolio. 1,450
1,275
Encouraging Outlook:
1,100
SYML reported highest ever 1Q export revenue of Rs 180mn during 1QFY21, SYML 925
expects export revenue to cross a milestone of Rs 1bn during FY22. Further, SYML expects 750
FY22 domestic sales to meet / surpass FY20 numbers.
Sep-20
Sep-21
Mar-21
Jun-21
Dec-20
Source: Bloomberg

(x) (%) (%)
+91-079 6190 9523
FY21A 8,998 1,390 1,145 16.4 65.1 9.8 52.6 16.4 31.2 15.5
Deep Shah
FY23E 14,265 3,138 2,650 37.9 28.1 7.4 22.6 28.5 39.1 22.0 079-7359725344
FY24E 16,249 3,560 2,987 42.7 24.9 6.2 19.4 26.9 39.1 21.9
India Equity Research | Consumer Discretionary
September 30, 2021
The Waterbase
CMP
Rs 114
Rating
Not Rated
About the Company: The Waterbase Ltd. is a leading manufacturer of high-quality shrimp
feed in India. The company also processes shrimp in IQF, Block Frozen and Cooked form
from its own captive farms, and exports its produce to global markets, predominantly
Japan, Europe, and the United States. The company’s processing plant is FDA listed and
EU approved, and processing is done as per HACCP guidelines.
Represented by: Mr. R. Sureshkumar – CFO and Mr. Probal Roy - Head-Financial Analysis
Overview
• CY 2020 was tough and thus performance of the industry and the company was
not good. CY 2021 looks promising for Waterbase as the volumes have picked
up.
• Company has migrated from credit business to cash business.
• Hatchery business has been started. Company is working on improving this
business as well.
• In terms of revenue company is back to normalcy of FY19-20. But in terms of
bottom-line company has not yet recovered due to steady rise in RM prices mainly
Soymeal. Company has taken price hike but has not able to pass on the entire
rise in prices of soymeal.
Outlook
• Key market areas for Waterbase are in AP and Gujarat. In AP, volume reduction
last year was due to migrating from credit business.
• Orissa and West Bengal have been giving decent volumes.
Rise in Import Duty
• Import of feed is happening despite rise in import duty. Major brands in feed are
only domestic brands.
• Since domestic soya prices have increased and accordingly, prices of feed have
also increased so despite 5% increase in import duty, imports are still cheaper.
Market Size
• Feed market would be close to 1mn ton, and the Andhra Pradesh is the major
market.
• There are in total 25-30 feed millers in India.
• Organised corporate companies are the major players. Unorganised is very
insignificant.
Major Markets
• Major market for Waterbase is AP. Other than this, Orissa, West Bengal, and
Gujarat are bigger markets.
• TN and Karnataka are very small market.
• Company has reduced exposure in Gujarat and is growing in AP. Company is
expanding in markets like Orissa and West Bengal.
• Total Market in AP is 6 lakhs tons. Annual volume of water base is sub 50,000
tons. So, Waterbase has very small market share.
• Company is expecting good Kharif crop in October and that should normalise the
situation.
• Government has given permission to import GM Soya and that should help in
normalising the prices. By October and November, prices should soften.
• 30% of the RM cost is the soymeal and the fish meal and then wheat flour are
other major components and these three occupies 75% of RM cost. Remaining Analsyts
components are fish oil, rice etc. Depesh Kashyap, CFA
• RM forms 72% of the total costs. depesh.kashyap@equirus.com
• Fish meal prices: Rs. 90-99 was the average price in 1Q. Now the fish prices have +91- 7228934327
gone up to Rs. 105-106. Piyush Sevaldasani
+91-9767990926
India Equity Research | Media & Entertainment
October 02, 2021
Tips Industries
About the Company: Tips Industries Limited is an Indian music record label and film
production, film promotion, and film distribution company in Mumbai, Maharashtra, India.
It was founded by Kumar S. Taurani and Ramesh S. Taurani in 1975.
Represented by: Mr. Kumar Taurani - Promoter & MD, Mr. Sunil Chellani – CFO, Mr. Avtar
Singh - VP Accounts & Finance

Company Overview/background
• Started TIPS in 1983 as RK electronics and Tips was the label. Company was
initially focused on Maharashtra only and later decided to go to all India. To
achieve this company started taking music rights of the films.
• In 2002, there was huge setback for music industry as it was beginning of radio
industry. This badly hurt sales for music companies. Then MP3 CDs took over
cassettes. Pirated CDs were sold for much lesser price. And then slowly physical
music was gone. And nonphysical business started. Airtel had started the caller
tune. There was no full song platform at that time.
• Post 2010, YouTube, and many music streaming apps have come. The launch of
JIO was turning point for the industry. People started consuming the music via
streaming. Short video music opportunity has come up in a big way.
Radio
• FM Radio Channel: Revenue from this is very less (~2%). Music labels are fighting
with Radio companies. Copyright laws allows radio companies to play music
without paying to music companies but there are certain rules and regulations they
are supposed to follow.
• Wync streaming services: - Wynk has contended that streaming services also come
under that copyright law. Tips has gone to court against this, and judge has given
favourable order.
Music Industry
• India music industry size is about Rs. 1700-1800 crores and is estimated to grow
at 25-30% over the next 3-4 years.
• Subscription revenue is increasing, and it will keep on increasing for the music
companies. Amongst all the platforms which play the music YouTube is the biggest
one and other all streaming apps are on same line. Social media websites are
coming up with the short video platforms and this can be a huge opportunity.
• Future Direction
• Company has solid repertoire of songs and do not want to make too many
films/music.
• There is no plan to raise further money. Company wants to maintain its internal
targets.
• Company has very good repertoire of 1990’s music.
• Company is not looking at opportunities in M&A. Analsyts
• Company is working on NFT. Depesh Kashyap, CFA
+91- 7228934327
Piyush Sevaldasani
+91-9767990926
October 02, 2021
Company Update
Torrent Pharmaceuticals Ltd
Domestic costs to be normalized in 2Q
➢ TRP indicated business momentum has been continuing strong with domestic, Brazil
and Germany seeing healthy growth, while US continue to remain lack lustre on the
count of regulatory issues at its sites.
➢ Remain confident of outperforming IPM by 200 bps going forward. For FY22 growth
looks to be around double-digit growth. Chronic therapies shall see higher growth
advantage over longer period.
➢ TRP indicated all the field force activities and marketing practices have normalized and
thus 2Q will see reflect largely the normalized cost. It indicated there is perpetual
savings in few costs, to what extent will be only known at closure of the quarter.
➢ US remains status quo for them from the regulatory front. It stated it has not heard
anything from the USFDA yet, however, as USFDA has begun inspection it is positive
considering it has completed all its work and awaiting FDA inspection.
Domestic business growth strong: TRP stated growth momentum continues to remain strong
with IPM continue to record double digit growth over. It indicated yet no clear signs are
seen in terms of higher diagnosis for chronic diseases; however, long term outlook remains
strong as Chronic demand and penetration shall pick-up. It is guiding for mid-tee growth
in FY22E.
Cost to normalize in 2Q: TRP stated 2Q is trending to be a normal quarter for them in
terms of business activities whereby field force activities and sales & Marketing activities
have normalized completely. It stated few costs have been optimized perpetually; however,
the extent of it will be known at the end of 2Q. It remains up-beat over margin improvement
each year.
Brazil to remain strong: TRP stated growth in Brazilian business has been strong over years
and will continue to hold strong as secondary data suggest high single digit growth and
TRP will continue to outperform the broader market as it has 100% chronic portfolio.
Moreover, as the base impact of Brazilian Real has already been factored, it expects strong
growth.
US continues to remain a drag: Torrent stated US continues to remain drag on the account Relative price chart
of a) dearth of new launches owing to regulatory issues, b) high price erosion in base TRP IN Nifty Index
5,100
portfolio (up-to high single digit). Sartan relaunch along with Levittown re-
4,505
commercialization towards end of CY will aid US biz. It will be further aided by new
3,910
launches from partnered sites in FY23E.
3,315
2,720
2,125
Sep-20
Mar-21
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
YE Mar Recurring P/E P/B ROE Bharat Celly
Rs mn PAT (x) (x) (%) bharat.celly@equirus.com
(x) (%) (%)
FY21A 80,050 24,850 12,520 73.6 41.8 9.0 22.4 23.5 16.2 31.0 +91-079 6190 9524
FY22E 88,188 28,588 14,032 82.5 37.3 7.6 19.2 22.0 17.0 32.4 Punit Pujara
punit.pujara@equirus.com
FY23E 99,920 32,450 17,024 100.1 30.8 6.4 16.6 22.6 20.7 32.5
+91-79 6190 9581
FY24E 1,12,409 36,909 21,125 124.3 24.8 5.4 14.3 23.6 25.5 32.8
October 02, 2021
Company Update
Zensar Technologies Limited

CMP Target Price
Rs 478 Rs 430
Incrementally positive on demand but near Sep 2022
term margin challenges remain

Rating Upside
ADD -10% ()
➢ Initial feedback from clients on Zensar’s restructuring process is positive as per Zensar. Estimate Revision
It has made certain leadership changes as a part of restructuring process. We believe Forecasts % Change
that consistent execution of the revised strategy will be the key for achievement of its (Rs mn) FY22E FY23E FY22E FY23E
key KPI of driving sustainable, predictable and profitable growth over medium to long
Sales 40,079 45,403 NA NA
term. For this to achieve, it believes it may take another 4-6 quarters.
➢ Zensar is witnessing strong demand environment at least for near to medium term. EBITDA 6,833 7,621 NA NA
However, in line with peers/industry, it is also witnessing high attrition and to alleviate PAT 3,856 4,530 NA NA
the same, it has taken various measures including higher than normal wage hikes for EPS 16.8 19.8 NA NA
FY22E, fresher hiring, other initiatives like increased employee engagement, etc.
➢ Zensar expects margins to get impacted in the near to medium term due to rising supply Stock Information
side challenges and increasing investment in execution of new strategy.
52 Wk H/L (Rs) 587/172
Witnessing broad based demand recovery: Zensar is witnessing healthy demand across Avg Daily Value (Rs Mn) 8.2
most verticals and markets and expects to sustain the same at least in near to medium
term. It is focussing to grow existing clients and invest in hunting team to drive growth from
new clients in consumer services. Zensar expects good momentum to continue in banking Face Value (Rs) 2
which is also aided by M3bi acquisition. As per Zensar, Insurance business will take some Share Outstanding (Mn) 225.7
more time to show growth momentum as it is wide spreading its capabilities beyond duck
creek. With increasing spend by top clients and worst of the client specific issues now getting Bloomberg Code ZENT IN
behind, Zensar’s growth visibility is improving in Hi-Tech at least for near term. Within Ind Benchmark BSE IT
manufacturing, new client addition is helping to improve growth visibility.
Increasing supply side issues and investments to impact margins in near term: Zensar in Ownership (%) Recent 3M 12M
line with industry peers is also witnessing rising supply side challenges. To mitigate the Promoters 49.2 0.0 (0.1)
same, it has rolled out higher than usual wage hike effective July’21. Other initiatives to
DII 20.6 (3.8) (3.9)
curtail rising attrition include increased engagement with employees, providing adequate
learning opportunities, job profile rotation, upskilling. Zensar is looking for material FII 17.6 1.5 1.2
increase in fresher hiring in FY22E. These headwinds along with ongoing investments are Public 12.6 2.4 2.4
likely to impact margins in near to medium term. However, it believes it can regain the lost
margins by executing margin levers like pyramid rationalization, driving higher growth over
medium to longer term. Material increase in margins may not be an easy task in our view
given likely increase in some expenses post stabilization of pandemic.
Update on restructuring process: As per Zensar the initial feedback of the revised strategy
from clients is positive. Refreshed strategy showed some early success in terms of building
pipeline and winning few deals (last announced large deal with city of San Diego is net
ZENT IN Nifty Index
new business and win came due to existing client relation and likely to ramp up eff. 2Q).
Zensar has also made some leadership changes by hiring of business/delivery heads for 560
US consumer business, BFSI and advanced engineering. It is looking to continue to hire 460
good senior talent for sales, delivery and SGOs (strategic growth opportunities). 360
260
160
Mar-21
Sep-20
Sep-21
Jun-21
Dec-20
Source: Bloomberg
EV/ Core EBITDA
(x) (%) (%)
FY21A 37,813 6,848 3,000 15.3 31.4 4.7 14.0 13.5 19.2 18.1 022-43320673
FY22E 40,079 6,833 3,856 16.8 28.4 4.2 13.7 15.5 20.4 17.0 Meet Rachchh
FY23E 45,403 7,621 4,530 19.8 24.2 3.7 11.7 16.2 24.1 16.8
+91-9892707286
FY24E 50,872 8,555 5,283 23.1 20.7 3.3 9.8 16.8 30.2 16.8
Equirus Morning Buzz
Rating & Coverage Definitions: Registered Office:

Absolute Rating Equirus Securities Private Limited
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion Unit No. A2102B, 21st Floor, A Wing, Marathon Futurex,
and ATR >= 20% for rest of the companies N M Joshi Marg, Lower Parel,
• ADD: ATR >= 5% but less than Ke over investment horizon Mumbai-400013.
• REDUCE: ATR >= negative 10% but <5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• SHORT: ATR < negative 10% over investment horizon Fax No: +91- (0)22 – 4332 0601
Relative Rating
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon Corporate Office:
• BENCHMARK: likely to perform in line with the benchmark 3rd floor, House No. 9,
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
Investment Horizon S.G. Highway Ahmedabad-380054
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of Gujarat
a calendar quarter. Tel. No: +91 (0)79 - 6190 9550
Fax No: +91 (0)79 – 6190 9560
© 2021 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Equirus Securities
Private Limited
Analyst Certification
I, Equirus Research, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify
that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures
Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the Capital
Market (Reg. No. INZ000251536), Futures & Options Segment (Reg. No. INZ000251536) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No. INZ000251536) of BSE Limited (BSE).ESPL
is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154), as a Portfolio Manager under SEBI (Portfolio Managers Regulations, 1993 (Reg.
No.INP000005216) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP-324-2017). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL
is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private
equity, mergers & acquisitions and structured finance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for investment
banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have received a mandate
from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their directors and employees may
from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in their proprietary position) 1% or more
of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or Associates did not receive any compensation or
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Equirus Annual Virtual Conference Takeaways

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Equirus Annual Virtual Conference Takeaways

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India Equity Research

October 13, 2021

Equirus Annual Virtual Conference

Organized players gaining share; growing

➢ We hosted 60+ corporate is our Annual Virtual conference

Following are some of the important sectoral takeaways:

October 03, 2021| 2

Shortages to aid growth

mentioned inventory in channel is at lower end. 3,315

prices are projected to move further upwards. 2,125

Financial Summary Analsyts

Apex Frozen Foods

Below are the Key Takeaways:

Apollo Pipes Limited

Value unlocking on cards

regions. In Pharmacies its targeting omnichannel presence. 290

Bajaj Consumer Care Ltd.

Near term demand challenging; Long term

directionally on the right path. 150

challenges seem rising in near term

challenges seem rising in near term

Crompton Greaves Consumer Electricals Ltd

PAT 6,588 7,448 NA NA

Financial Summary Analsyts

Carborundum Universal ltd.

Outlook positive on all fronts

Abrasives – cost advantage in an inflationary scenario: Management expects operational

graphene-based products along with graphene intermediates. 330

City Union Bank Ltd

Guidance intact; collections still impacted by

Relative price chart

Creditaccess Grameen Ltd

PAR improves across buckets in Aug’21

➢ CreditAccess’ (CREDAG) disbursements have revived to pre-COVID levels in Jul’21,

company is 11-12% 650

DCB Bank Limited

Collections improved; pre-covid growth rate

Below are the Key Takeaways:

Below are the Key Takeaways:

eClerx Services Ltd

Equitas small Finance Bank

Levers to grow asset book and liability

• EQUITASB is targeting at RoE/RoA/Credit Cost/C/I Ratio of 16-17%/2.25%/1%/50% 50

over next 2-3 years 40

Fedbank Financial Services

Retail focussed products to drive loan

• The company is well capitalized with CRAR of 23.5% as of Mar’21

• Yields for GL/Medium ticket LAP/Small ticket LAP/Business Loans were

• Cost of funds for FY21 were 7.43%

• GNPA/NNPA stood at 1.04%/0.71% as of Mar’21 with PCR for stage 3 assets at

Federal Bank Ltd

Asset Quality stable

Below are the Key Takeaways:

Greenlam Industries Ltd.

Greenpanel Industries Ltd.

Realizations & Margins: Management is expecting realization of ~Rs 27,000/cbm in

HCG Enterprise Ltd.

At the end of capex cycle

➢ HCG is leading specialty healthcare provider of tertiary and quaternary healthcare

remains very promising. 4,505

Represented by: Dr. M. Sambasiva Rao - President

Below are the Key Takeaways:

Pioneer in Holistic Nutrition

FY19A 2,358 307 154 - - - - 15 21 13.0