Cholamandalam Investment and Finance

About the Company:

• Cholamandalam Investment and Finance Company Limited (Chola) is the financial services arm of the Murugappa Group.
• Chola commenced business as an equipment financing company and today, provides vehicle finance, home loans, home
equity loans, SME loans, investment advisory services, stock broking and a variety of other financial services to customers.
• Chola operates from 858 branches across India, across 27 states and has an 87.5% presence across Tier III IV, V, and VI
towns.
• Assets under management are valued at INR419 billion as of December 2017.

Investment Rationale:
• AUM of 39,000 Crore growing at 20%; AUM Mix- Vehicle 72%; Home equity 25%;
• Significant pickup in vehicle finance disbursements (36%) YTD led by pick up in CV cycle. Chola customers are small fleet
owners with less than 10 trucks or individual truck owners. There is less competition from banks in this segment.
• Credit quality is good with GNPA of 3.7% better than other NBFCs in this segment. Chola has strong focus on collections.
• The current ROA of the company is 3% which should stabilize and ROE should remain ~20%. Rising interest rates wont have
much impact on margins as chola will refinancing 3 year old NCDs with better rates.
• Chola was facing pressure on the Home equity portfolio. Incrementally, this should reduce as they have cut back on large
ticket disbursements, reduced LTV, moved to smaller ticket sizes, improved the operations including fraud detection and are
working to resolve the large ticket problems in NCR region.

Mcap 22,000cr RoE: 18% PAT: 719cr

Sundaram Fasteners

About the Company:

• Sundaram Fasteners Ltd. is part of the TVS Group of Companies, which is India’s largest automotive component
manufacturer.
• Sundaram Fasteners Ltd. manufactures critical, high precision components for the automotive, infrastructure, windmill and
aviation sectors.
• Its products range includes fasteners, powertrain components, sintered metal parts, iron powder, cold extruded parts,
radiator caps and wind energy components.
• It operates in OEM and aftermarket segments in India, China, Germany, USA, UK, Italy, France and Brazil.

Investment Rationale:
• Sundaram Fasteners (SF) is India’s largest fastener manufacturer with 40% market share. SF has changed its product mix
evolving towards higher value-added products including pumps assemblies, powder metal components, hubs and shafts and
hot and cold forged products. Strength of the company is the large in-house tooling library and tooling capabilities which
reduces turnaround time for customers.
• Non-fastener business (primarily value added products) contributes ~60+% of revenues and should increase further. Value
added products enjoy multi-fold realisations compared to std. fasteners and better margins.
• Exports are expected (35% of revenue) to grow at 12% CAGR over FY17- FY20E, led by increased off-take and new order wins
from GM and Ford.
• For domestic business - PV, CV and 2W are expected to outgrow exports at 16% CAGR driven by increasing wallet share
(especially with top PV OEMs) and strong underlying volume growth
• FCF should improve for company despite the high capex investments for building up capacities for more value added
products.

Mcap 11600cr RoE: 28% Sales: 2934 cr

Godrej Agrovet

About the Company:

• Godrej Agrovet Limited is a diversified, R&D focused agri-business company, improving farmer productivity by innovating
products and services that sustainably increase crop and livestock yields.
• The different businesses of operation are Animal Feed, Crop Protection, Oil Palm, Dairy and Poultry and Processed Foods.
• In 2015, GAVL set up the Nadir Godrej Centre for Animal Research and Development in Nashik, Maharashtra - a one-of-its-
kind animal husbandry research center in the private sector in India.
• Godrej Tyson Foods is the second largest player in the processed poultry segment in India. The ACI-Godrej Agrovet joint
venture ranks among the top three feed companies, across all categories in Bangladesh.

Investment Rationale:
• Animal feed, crop protection and oil palm, contribute ~ 95% of EBIT
• GAVL management team has significant industry experience – MD with company since 1991 has 27 years experience. GAVL
has leveraged the Godrej brand and R&D to grow ahead of competition and is the largest compound animal feed player with
~10% market share in the organized fragmented animal feed business.
• Crop protection should grow 12-15% CAGR led by good product portfolio, strong distribution and exports through the Astec
acquisition. GAVL is the largest crude palm oil producer in India, with 35% market share. As more palm trees achieve
maturity, this business should see continued growth.
• In addition, GAVL has seeded a dairy business (Creamline) in Karnataka and has a JV with Godrej Tyson for poultry and
processed foods. Overall, we see a strong 25%+ EPS CAGR over FY18E-20E.

Mcap: 12700cr RoE: 14% Sales:4911cr

Avanti Feeds Ltd

About the Company:

• Avanti Feeds is a leading Indian manufacturer of prawn and fish feeds, and shrimp processor. It is also a leading exporter
from India.
• Avanti Feeds has established a joint venture with Thai Union Frozen Products PCL, the world’s largest seafood processors
and leading prawn and fish feeds manufacturer in Thailand. Thai Union is closely associated with Avanti Feeds in equity
participation, technical collaboration and marketing tie-ups.
• Avanti has four Prawn and Fish Feed manufacturing units in Andhra Pradesh and Gujarat with a capacity of 4,00,000 MT per
annum
• After achieving high success in exports, Avanti has ventured into the domestic market to provide export quality shrimp
products to Indians by launching the "Prawn King" brand.

Investment Rationale:
• Avanti Feeds Limited has a market share of ~45%. It is a beneficiary of the shrimp aquaculture wave that came in the country
post 2009 with introduction of new species growing its shrimp feed biz at 55% CAGR over 5 years.
• They have a technical/marketing tie-up with Thai Union Foods (TUF) which helps AFL manufacture better feed with lower
Feed conversion ratio (FCR). As a result, it has gained and maintained its market share. It has also developed very strong
relationship with shrimp farmers giving it an advantage over other players. The company generates 40%+ ROCE due to
limited working capital and capex requirement of the business.
• Going ahead, Avanti is increasing its shrimp processing business significantly in collaboration with TUF. AFL is increasing its
processing capacity from 6,000 MTPA to 15,000 MTPA.
• Avanti has a demonstrated strong track record along with superior RoCE and RoEs and is our preferred bet to play on the
growing aquaculture trend in India.

Mcap 6935cr RoE: 29.6% Sales:3435 cr

Coffee Day Enterprises

About the Company:

• Coffee Day Enterprises started with the Coffee Day Group, which pioneered the coffee culture in the chained segment in
India. Today, the portfolio includes Technology Parks & SEZs, Logistics, Investments, Financial Services and Hospitality.
• Today, the subsidiary Coffee Day Global Limited (CDGL) has established the largest footprint of café outlets in India-spread
across more than 200 cities. It is a vertically integrated coffee business which ranges from procuring, processing and roasting
of coffee beans to retailing of coffee products across various formats.
• Tanglin, a wholly-owned subsidiary is currently developing and operating a Special Economic Zone in Bengaluru and a
technology park in Mangalore.
• The financial services arm, Way2Wealth, has four main categories: broking & commission, distribution, margin trade
financing and associated products.
• Sical combines numerous aspects of logistics, namely port handling, road and rail, logistics, container freight stations and
mining to provide integrated logistics solutions. Coffee Day Enterprises also has investments in Mindtree, Ittiam Systems,
Global Edge Software Limited and Magnasoft.

Investment Rationale:
• Conglomerate structure with 5 main businesses – 1) retail- Coffee day cafes 2) Logistics - listed company Sical 3) Tech parks
and SEZ 4) Financial services- Way2wealth and 5) Investments - largely holdings in Mindtree.
• Coffee retailing – 1700+ cafes and 45,000+ vending machines. Average per day sales/store (ASPD) is Rs 15,000. 18% EBITDA
on retail biz. We expect improving customer sentiment to further increase same stores sales growth and ASPD which
coupled with higher contribution from high ROCE vending biz should drive earnings upside.
• Tech parks: 4.5 mn sq ft with 75% occupancy at 40-50 rs/sq ft rent. 7.5 mn sq ft yet to be developed. Overall value at Rs
60/share
• Investments: Listed companies Mindtree (0.083 shares/ CCD share) and Sical logistics (0.14 share/CCD share ) coming to Rs
100/share.
• Sum of parts ex debt works out to Rs 350/share. We expect huge upside if company goes for restructuring to unlock value
from disparate parts.
Mcap 6500 cr RoE: 8% Sales: 3120cr
GRUH Finance

About the Company:

• GRUH Finance is a subsidiary of HDFC Ltd., and is registered with the National Housing Bank (NHB).
• Gruh Finance India is a housing and rural finance company offering home loan products at low interest rates, and is
recognized by the National Housing Board for its refinance facility.
• Gruh Finance operates in a niche segment, catering to the lower-income group in rural and semi-urban areas, and has
advanced more than 50% of its loans in rural areas.
• It has a retail network of 193 branches across 11 states, as on December 31, 2017.

Investment Rationale:
• Best quality housing finance company focused on affordable housing segment with three decades of experience and
spotless asset quality. Cumulative disbursements of Rs 27000 cr.
• Loan book of 14,800 cr with average ticket size of Rs 9 lakhs. Gross NPA 0.7%; net NPA 0%.
• Consistent track record of low NPA with excellent credit culture generating RoA of 2+%.
• Home loans form 82% of book with just 4% exposure to developers. 60-65% of loans to self employed segment.
• Branch led model with 180+ offices - strong growth led by increased availability of affordable housing in key states where
GRUH is present like Gujarat, Maharashtra, MP and Karnataka.
• We expect 20%+ EPS growth with no dilution and see some upside to our estimates as affordable housing supply increases
and GRUH continues to deliver on credit quality.

Mcap 20,008cr RoE: 21% Sales:2079cr

Century Plyboards

About the Company:

• CenturyPly is the largest seller of plywood and decorative veneers in the Indian organized plywood market, catering a range
of products for both residential as well as commercial consumers.
• The company is the joint leader in plywood, currently the biggest player in MDF and the third biggest player in laminates.
• It has pioneered the Borer Proof Plywood and Boiling Water Resistant (BWR) Decorative Veneers and Laminates in India.
• The products are available across Tier-I, Tier-II and in Tier-III locations. The dealers and retailers are serviced through 40
depots and warehouses.

Investment Rationale:
• Started in 1986, Centuryply is one of the largest plywood manufacturers in India with 25% market share in organized space
and top 3 laminate producer. Company product range includes plywood, laminates, veneer, MDF, particle board and doors.
• Plywood has 70% unorganized players in a 18,000 crore market. With the implementation of e-way bill, we expect significant
increase in prices of unorganized players leading to market share gain by Centuryply especially at the lower ranges.
• Centuryply is increasing its laminate capacity by 50% and plans to increase its market share as a one stop solution provider
to customer. Centuryply started its 198,000 CBM MDF capacity in Q3FY18 and is already generating 20% EBITDA.
• 30%+ EPS growth is expected over FY18E-20E as laminates and MDF capacities ramp up along with margin expansion led by
growth in higher margin MDF segment.

Mcap : 16175cr RoE: 39% Sales:1727cr

JK Lakshmi Cement

About the Company:

• JK Lakshmi Cement is one of India’s biggest cement manufacturers with a wide range of construction products including
multiple grades of cement to build runways, highways and houses.
• It also focuses on eco-friendly products which shortens construction time and enhances project sustainability.
• It is also the first cement producer of Northern India to be awarded an ISO 9002 certificate.

Investment Rationale:
• JK Lakshmi Cement (JKLC) has 10.5 mn tons of standalone capacity across North, West and east regions spread across
Rajasthan, Haryana, Gujarat, and Chhattisgarh.
• JKLC has completed its major capex cycle which started in FY15 with current consolidated capacity reaching to 12.5mt.
JKLC’s net debt stands at Rs 1700 crore (FY17 Net debt to equity of ~1.2x) peaking out in FY17 and deleveraging should
accelerate as there is no significant capex planned.
• JKLC profitability of East plant in Chhattisgarh remains low but should improve with cost saving measures including setting
up waste heat recovery plant and captive power plant coupled with better realization in Chhattisgarh.
• Valuations are supportive at $75EV/Ton considering a revival is expected in profitability, improved pricing and better balance
sheet.

Mcap: 5026cr RoE: 7% Sales:2910 cr

Sobha Ltd

About the Company:

• SOBHA Group is one of the largest real estate organizations in India and the Middle East, founded in 1976. It is the only
backward integrated real estate player in the country.
• Headquartered in Bangalore, SOBHA is primarily focused on residential and contractual projects. The Company’s residential
projects include presidential apartments, villas, row houses, luxury and super luxury apartments and plotted development.
• On the contracts side, the Company has constructed a wide variety of structures for corporates including corporate offices,
convention centers, software development blocks, multiplex theatres, hostel facilities, guest houses, food courts,
restaurants, research centers and club houses.
• The Company currently has ongoing real estate projects aggregating to 40.30 million square feet of developable area and
27.63 million square feet of saleable area.
• Its presence pans 24 cities and 13 states across India and throughout the Middle East

Investment Rationale:
• High quality residential real estate player with 70% of sales from Bangalore market.
• Company is selling 3-4 mn sq ft annually for past 7 years but has execution capabilities to increase this significantly without
adding much additional costs.
• Sobha does the entire execution in-house which enables the company to play even in affordable segment and sell lower
ticket size units profitably. Dream acres with ticket price in sub 50 lakhs segment is currently getting executed and Sobha is
planning to lauch more such projects shortly.
• Company has land bank of 2500 acres. Further, company has tied up with Kotak private equity for funding real estate
projects.
• With RERA kicking in, Sobha is seeing several small players exiting the market leaving significant scope for company to grow
market share in its focus markets. We expect 30%+ EPS growth over FY18E-19E.

Mcap 5300cr RoE: 6% Sales:2246 cr

IPCA Labs

About the Company:

• Ipca is a fully-integrated Indian pharmaceutical company manufacturing over 350 formulations and 80 APIs for various
therapeutic segments.
• Ipca is a therapy leader in India for anti-malarials with a market-share of over 34% with a fast expanding presence in the
international market as well.
• For more than 60 years, Ipca has been partnering healthcare globally in over 110 countries.
• Its international client roster includes global pharmaceutical giants like AstraZeneca, GlaxoSmithKline, Merck, Roche and
Sanofi Aventis.

Investment Rationale:
• IPCA labs is on recovery path after a 2015 US FDA import alert on their facility impacted their institutional anti-malaria
business and US generic business. The regulatory issues should get resolved in FY19 driving recovery in both anti-malaria
and US generics businesses. At peak these revenues were USD 100mn which then fell to USD 24 mn
• Revenue mix of company - domestic formulations 43%, Europe 18%, API exports 18%, International branded 9%; Others
12%. Steady 12-13% CAGR in domestic formulations segment with 60% of revenues from chronic therapies such as non
steroid anti-inflammatory drugs, CV and anti-diabetics. This business has provided the base when others were not
performing.
• IPCA is now re-qualified for global institutional malarial business which should resume from FY19. IPCA has invited FDA to
inspect 3 facilities – close to 30 ANDAs pending approval.
• Margins should see upside as remediation cost reduce, higher capacity utilization and better MR productivity driving 60%+
EPS growth FY18E-20E.

Mcap 8500cr RoE: 8% Sales:3200cr

Bajaj Electricals

About the Company:

• Bajaj Electricals Limited (BJE) is a part of Bajaj Group, which is a conglomerate of 25 companies and has been in existence for
more than 75 years.
• Bajaj Electricals business is spread across Consumer Products (Appliances, Fans, Lighting), Exports, Luminaires and EPC
(Illumination, Transmission Towers and Power Distribution).
• Bajaj Electricals has 19 branch offices spread in different parts of the country besides being supported by a chain of
distributors, authorized dealers, retail outlets, exclusive showrooms called ‘Bajaj World’ and approximately 462 customer
care centers.
• It is also present in the hi-end appliance segment with brands like Platini and Morphy Richards in India.
• BEL has marketing arrangements with Teleco Automation of Italy, tie ups with CREE Lighting of USA and Securiton of
Switzerland for Luminaires, Delta Controls of Canada for Integrated Building Management Systems, Gooee of USA for IOT
based lighting solutions, Greystone of Canada and Magnum Energy of USA for Wired and Wireless Sensors, Disney of USA
and Midea of China for Fans, and Morphy Richards of UK for Appliances. Bajaj Electricals has also invested in Starlite Lighting
for manufacture of energy saving lamps (CFL).

Investment Rationale:
• BJE is now on path of recovery after muted growth and margins in the consumer durable business coupled with better
performance in the contracting business. .
• Consumer durables (54% of revenues) saw major channel disruption over past 3 years due to implementation of new
distribution model – reducing dependence on wholesalers significantly. However, company saw strong 25%+ growth in
January which indicates stabilization of the new system. Company plans to increase its distribution reach to 250,000 outlets
by Mar-19.
• Contracting business (46% of revenues) was flat for previous 3 years. The current order book of Rs 3,000cr should have
strong margins as the company has become very selective in bidding for fresh orders.
• With both businesses kicking in on growth and profitability, the company is expected to deliver 40% EPS CAGR over FY18E-
20E.

Mcap 5400cr RoE: 15% Sales:4262 cr

HEG Limited

About the Company:

• HEG Ltd. is a premier company of the LNJ Bhilwara Group.
• Today, HEG is India’s leading graphite electrode manufacturer. It has one of the largest integrated Graphite Electrode plants
in the world, processing sophisticated UHP (Ultra High Power) Electrodes.
• The main business of HEG is graphite which accounts for 80% of the revenue. Set up in 1977, in technical and financial
collaboration with Societe Des Electrodes Et Refractaires Savoie (SERS), HEG is now the largest integrated graphite plant in
the world. Its plant is located at Mandideep near Bhopal (MP). The power required for this plant is also generated by HEG.
• HEG’s carbon specialties include carbon blocks, activated carbon fabric and graphite specialties.

Investment Rationale:
• HEG has 80kt of graphite electrode capacity (the largest under one roof) and controls 10% of the world’s capacity. The
company exports over 70% of its production to more than 30 countries of the world.
• Graphite electrode industry is seeing strong revival after a tough 3-4 years as China is shutting down steel capacities due to
environmental reasons. Graphite electrodes are consumed during the production of steel using Electric arc furnace method
– 2Kg/ton of steel. During the downturn, the electrode industry saw consolidation with the closure of ~200kt capacity.
• HEG exports 2/3rd of its production to countries in middle east, US, Europe and south east Asia with limited customer
concentration risk.
• With improved utilization and better price realizations , HEG will deliver 100%+ EPS CAGR over FY18E-20E.

Mcap 9722cr RoE: 28% Sales:2418cr

JM Financial

About the Company:

• JM Financial Group forayed into the financial sector services as JM Financial & Investment Consultancy Services Pvt. Ltd.
(JMFICS) in Mumbai in 1973.
• JM Financial is a financial services groups, specializing in providing a spectrum of businesses to corporations, financial
institutions, high net-worth individuals and retail investors.
• Its services range from Investment Banking, Equity, Debt, Commodity Sales and Trading, Wealth Management, Portfolio
Management Services, Asset Management, Alternative Asset Management, Financing and Lending, Housing Finance and
Distressed Asset Management.
• JM Financial has international subsidiaries in Mauritius, Singapore and USA.

Investment Rationale:
• JM has evolved from a corporate finance advisor and broker to a corporate finance provider with a combination of fund and
fee based businesses. 77% of profits come from fund based activities including lending and Asset reconstruction Company
(ARC).
• The lending business is currently focussed on the real estate developer, promoter loans and capital market lending.
Company has started SME and HFC segments in FY18 which should see significant growth over coming 2 years. We expect
NBFC AUM to increase from current level of Rs 12,000 cr to Rs 20,000 cr by FY20E showing a 22% loan book CAGR and 20%
earnings CAGR over FY18E-20E. Superior ROE of 19% and ROA of 3.7% by FY20E..
• Second-largest ARC in India at AUM of Rs 12,500 cr. Company should see good growth in the business with RBI new
guidelines pushes banks towards earlier recovery of loans coupled with macro revival aiding the underlying business. They
are also into Wealth management (Rs 31,000 cr) and AMC (Rs 14,000cr).
• JM should see EPS growth of 21% over FY18E-20E with the recent capital raise of Rs 650 cr further buttressing the balance
sheet.

Mcap 11,900 cr RoE: 19% AUM:12,000cr

CDSL

About the Company:

• Central Depository Services (India) Ltd (CDSL), is India’s second-largest depository providing security dematerialisation
services for various capital market participants. More than a third of its revenue is annuity and competition is limited
(promoted by exchanges) given risk of data pilferage.
• Its main function is the holding securities either in certificated or uncertificated (dematerialized) form, to enable book entry
transfer of securities.
• CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to
all market participants.
• CDSL is promoted by Bombay Stock Exchange Limited (BSE) jointly with State Bank of India, Bank of India, Bank of Baroda,
HDFC Bank, Standard Chartered Bank, Axis Bank and Union Bank of India.

Investment Rationale:
• CDSL is India’s second-largest depository providing security dematerialisation services for various capital market participants.
More than a third of its revenue is annuity and competition is limited (promoted by exchanges) given risk of data pilferage.
• CDSL has steadily gained market share in its core business from its lone competitor, NSDL due to its DP friendly policies -
lower operating cost, lower upfront deposit, net worth criteria and technology investment.
• CDSL gets 35%+ of its revenues from annual issuer charges (fees charged to corporates) which will remain stable irrespective
of market conditions. IPO and Corporate action charges contribute 11% of revenues which might see some downside from
weak capital markets.
• CDSL has started two new businesses - Academic depository and Insurance depository which provide digital authenticated
copies of academic awards and insurance policies respectively.
• We believe that CDSL is strong play on growth in financial assets theme with a less cyclical business model than brokers.
Further, the new businesses could provide further upside as these are annuity streams with limited competition.

Mcap : 2592 cr RoE: 12.2% Sales:2568cr

Bata India

About the Company:

• Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization.
• It has a strong pan-India retail presence with 1,293 stores across 500 cities and is also available through a large network of
dealers.
• Bata has 2.62mn sq. ft. of retail space across India.
• It is currently looking to register growth in the women’s range with new technology and also aims to expand the children’s
range.

Investment Rationale:
• Bata India is power house of footwear brands and has multiple brands such as Bata, Hush Puppies, Scholl, Comfit, Power,
Bubblegummers, Marie Clair, Naturalizer, Ambassador etc. Premium brands form ~ 30% of sales.
• Bata has 1400+ stores and plans to open 100 annually. The company derives 85%+ of revenues from retail segment and
remainder from wholesale channel which has been under pressure due to GST and demonetization.
• Women contribute 28-29% of revenues and this should see increase as Bata launches fresher products and more
fashionable aimed at women. Historically, Bata has spent < 1% on A&P which they are working to change – plan to spend ~
3% in Fy19 which should aid the brand.
• Strong MNC parentage, excellent direct retail reach and investment in product and A&P should drive improved Same store
sales for the company leading to operating leverage and margin expansion.

Mcap : 2192cr RoE: 9% Sales:3070cr

Cochin Shipyard

About the Company:

• Cochin Shipyard Limited (CSL) is the largest shipbuilding and maintenance facility in India.
• It is part of a line of maritime-related facilities in the port-city of Kochi, in the state of Kerala, India.
• Of the services provided by the shipyard are building platform supply vessels and double-hulled oil tankers. Presently, it is
building the first range of indigenous aircraft carriers for the Indian Navy, the Vikrant-class aircraft carriers.
• CSL has adopted the Japanese Integrated Hull Outfitting and Painting system (IHOP) for its new construction, which gives it
an edge in the field of fabrication of commissioning of accommodation modules & topside modification.

Investment Rationale:
• CSL is a PSU which has transitioned from building commercial ships to naval ships. 85% of its revenues come from Indian
Navy and Coast guard.
• CSL has very strong order book of ~ Rs 12,500 crore – 5X revenue visibility without including the Rs 5,500 crore corvette
order where CSL is L1. The yard has facilities to build vessels up to 1.1 million tons and repair vessels up to 1.25 million tons,
the largest of such facilities in India.
• We expect the higher margin ship repair business to grow faster than the ship building business as CSL is adding new
capacity through JVs with port trusts and new International Ship Repair Facility (ISRF) .
• CSL is a strong play on the significant jump 3X in naval capex. CSL plans to spend Rs 2800cr as capex over next three years to
ensure that its capabilities to cater to the larger orders.
• Strong order book backed by solid balance sheet with Rs 200+ net cash/share with growing share of higher margin ship
repair business drive our investment thesis for CSL.

Mcap : 8900cr RoE: 31% Sales:800cr

KEI Industries

About the Company:

• KEI Industries Ltd. is one of India's leading Electrical Cable and Wire Manufacturers that specialize in manufacturing Power
Cables, Electrical Cables and House cables.
• Its portfolio includes Power Cables-Extra High Voltage(EHV), High Tension and Low Tension, Control and Instrumentation
Cables, Specialty Cables, Rubber Cables, Flexible And House Wires, Submersible Cables, PVC/Poly Wrapped Winding Wires
and, Stainless Steel Wires.
• KEI Industries ranked amongst the top three cable manufacturing companies in India.
• The company addresses the cabling requirements of a wide spectrum of sectors, such as- Power, Oil Refineries, Railways,
Automobiles, Cement, Steel, Fertilizers, Textile And, Real Estate etc.

Investment Rationale:
• KEI is a house wire and cables company with revenue mix of 55% Institutional; 31% retail and 14% exports. In retail
segment, KEI sells household wires and Low Tension (LT) power cables. This is a strong focus area for the company growing
at 16% CAGR for past 5 years .
• KEI has invested behind brand awareness and increasing distribution network (now stands at 1200 dealers) to drive its retail
sales.
• On the institutional side, KEI is increasing the share from higher value added products such as Extra High Voltage cables
which should reach 10% of revenues by FY19; .
• KEC also has an EPC division which is 28% of sales should remain at similar levels. Cables form 25% of these EPC projects and
ensure captive consumption.
• We expect KEI revenue mix to shift towards more retail driving better ROCE for the company with a decent 20%+ EPS CAGR
over FY18E-20E.

Mcap : 5290cr RoE: 24% Sales:2213cr

Essel Propack

About the Company:

• Essel Propack, part of the USD 4.2 billion Essel Group, is the largest specialty packaging global company, manufacturing
laminated plastic tubes catering to the FMCG and Pharma space.
• Essel is the first company that introduced laminated tubes to India and has witnessed exponential growth since it was
started over 30 years ago, having adopted a specialized approach towards creating packaging solutions for a diversity of
industry segments.
• Essel Propack functions through 19 state of the art facilities across eleven countries, selling circa 7 billion tubes.
• Essel Propack is the world’s largest manufacturer with units across countries such as USA, Mexico, Colombia, Poland,
Germany, Egypt, Russia, China, Philippines and India.
• Its facilities cater to diverse categories that include brands in Beauty & Cosmetics, Pharma & Health, Food, Oral and Home.
• It holds an Oral Care market share of 36% in volume terms globally.

Investment Rationale:
• Essel Propack is global market leader in laminated tubes with presence distributed across the globe. Company enjoys 35%+
market share in global oral care segment and 5% in non oral acre segment.
• Non oral care categories such as skin care, toiletries and shampoo forms ~ 40% of Essel revenues and should go up 50% in
next three years.
• Essel propack is seeing improvement in its European region due to cost cutting measures, operating leverage, stabilization of
factory and new clients. Recent acquisition of EDG should aid company in increasing its presence in Germany.
• Company plans to improve both EBITDA margins and ROCE to 20% levels over a period of time. We expect 25% EPS growth
over FY18E-20E.

Mcap : 4000cr RoE: 14% Sales:1631cr

Accelya Kale Solutions

About the Company:

• Accelya Kale Solutions Limited, formerly Kale Consultants Limited, is a software solutions provider to the airline and travel
industry. The Company operates in one division, which addresses the Travel and Transportation vertical.
• Accelya Kale Solutions Limited is part of the Accelya Group, a leading solutions provider to the Airline and Travel industry. It
became part of the Accelya group in 2011.
• The Company offers data analytics, managed process outsourcing services, software products, platform solutions,
customized technology and hosting services. Its products include APEX, REVERA and AMBER.
• The Company provides revenue accounting, audit services, financial management, business intelligence and analytics,
miscellaneous billing, simplified interlines settlement (SIS) compliance and business process outsourcing services.

Investment Rationale:
• Accelya Kale (Accelya), a focused IT player in the aviation industry with US$ 54 mn in revenues and will benefit from
improved macros like higher air traffic. Accelya group’s expertise spans across revenue accounting, audit and revenue
recovery, credit card management, miscellaneous billing, F&A processes, and decision support and analytics
• Accelya Kale mostly works on a pay-per use business model helping airlines to avoid upfront investment, an improved airline
business environment should lead to improved revenue visibility for the company.
• Accelya Kale’s parent Accelya is a MNC and is merging with Mercator in a transaction backed by Warburg Pincus which will
create a global solutions provider for Travel industry. Combined entity will service 17% of all airlines.
• New deal wins such as El Al and Biman Bangladesh should drive growth. Sticky product and high switching costs coupled
with cross-selling synergies for the new combined entity should drive growth going forward.

Mcap : 2000cr RoE: 50% Sales: 3674cr

Shalby

About the Company:

• Shalby Hospitals ( Shalby Limited), established by Dr. Vikram I. Shah in 1994 in Ahmedabad, Gujarat, operates a chain of
multispecialty hospitals across India.
• It offers care in over 40 medical disciplines ranging from cardiology, cardiothoracic surgery, and trauma to ENT.
• Shalby Hospitals is a world renowned Joint Replacement Centre today. By late 2016, the organization claimed to have
performed more than 85,000 joint replacement procedures.
• The length of surgical time in the hospital had been dramatically reduced from 1 hour, 20 mins per total knee replacement
(TKR) surgery to around 10–12 minutes using the "ZERO Technique" invented by Dr. Vikram Shah.
• Shalby is well connected with the community through its robust OPD (Out Patient Department) Centres situated across India
and Kenya, Tanzania, and Uganda in the African continent. Shalby also has tie-ups with RAK hospital in Ras- al Khaimah and
Saudi Germal Hospital in Dubai.

Investment Rationale:
• Shalby is a hospital chain with 11 hospitals and ~ 2000 beds deriving 62% of revenues from knee and hip replacements
(Arthroplasty).
• Company has lower capex/bed of Rs 45 lakhs (as compared to Rs 75 lakhs-1cr/bed for peers) due to use of in house team for
design and project management coupled with hospital design tweaks leading to 30% more beds in same area. Similar cost
control on operating expenditure ensures break even at just 27%.
• Smaller size of hospital ensures better occupancy and no dependence on star doctors.
• Margins for the company are improving as the occupancy at some of the newer hospitals is increasing.
• We expect company to continue to grow well led by stronger growth in non Arthoplasty segment, entry into new segments,
start of new hospitals (more under asset light model) and lower debt burden post IPO.

Mcap : 2300cr RoE: 21% Sales 325 cr