MOSL AGIC - Highlights From The Conference

AGIC-2022 HIGHLIGHTS
LEAVING A LASTING IMPRESSION
23 September 2022 1
CEO Track
Mahindra & Mahindra
Dr. Anish Shah

Group CEO
Reigniting for growth

Financials & Valuations (INR b)
Y/E MARCH 2022 2023E 2024E
Will continue to focus on technology to engage and recruit customers
Sales 574 773 910
 We hosted Dr. Anish Shah, Group CEO, Mahindra & Mahindra, as a part of CEO Track
EBITDA 70.4 95.5 124.7
at our 18th AGIC. Here are our key insights from the session:
Adj. PAT 51.4 66.7 87.7
Adj. EPS (INR) 43.0 55.7 73.3 Focus on accelerating core growth
EPS Gr. (%) 26.2 29.6 31.6 After focusing intently on reducing losses in the non-core businesses and
BV/Sh. (INR) 326 371 434 maintaining capital allocation discipline for the last two years, now the company’s
Ratios focus is on accelerating core growth. MM is on track to deliver 18-20% consol RoE.
RoE (%) 13.9 16.0 18.2 In the Auto business, in the near term, it is focused on meeting strong demand for
RoCE (%) 11.6 14.3 17.1 its SUV portfolio by ramping up capacity 2x (will share roadmap shortly); however,
Payout (%) 28 18 14 with the entrant of EVs, the capacity additions might need a relook. The company
Valuations sees strong growth opportunities in the Farm Equipment Sector (FES). MM’s farm
P/E (x) 30.0 23.1 17.6 machinery revenues were at ¬INR4-4.5b in FY22 with a 6% market share. It is
P/BV (x) 4.0 3.5 3.0 targeting to increase its market share to similar levels as that of tractors, by
Div. Yield (%) 0.9 0.8 0.8 launching more attractive products, expecting a 10x growth in revenues. It has
FCF Yield (%) 2.5 3.2 4.6 three-pronged approach to drive sustained value creation viz Purpose (leading ESG
globally), Profit (outperform financially), and future ready (FutuRise) on technology.
EVs: Focus on regaining leadership
It expects to regain its leadership in EVs, driven by the InGlo platform, which will
deliver 5 new electric SUVs under ‘Mahindra Born electric vision’ with critical
components coming from VW. While XUV400 is a strong intermediate product
before Born EV comes in, it doesn’t plan to get into the sedan or hatchback segment
by leveraging on EV disruption. The company expects a 20-30% EV penetration by
FY27 in its SUV volumes, i.e., about 200k at the upper end. The penetration is
expected to be driven by a wide product portfolio, and improving charging
infra/time. It doesn’t expect EVs profit pool to be materially different from that of
ICE, as it enjoys lower GST, PLI benefits, etc.
RoE improvement in non-core with focus on high impact deliverance
Apart from sustainably turning around loss-making businesses, it is also focusing on
improving performances of large businesses, which have strong potentials but are
not yet delivering on the same. It is focused on businesses such as Mahindra
Financial Services, Mahindra Lifespaces, and Mahindra Holidays. In MMFSL, it is
focused on addressing volatility in NPAs, bringing in new customers and leveraging
technology to deliver on its strong business model. While Mahindra Holidays has a
strong business model, it needs to take bold actions to capture the opportunity of
exponential growth, beyond the current 20-25%.
23 September 2022 2
‘Growth Gems’ have the potential to deliver USD1b valuation
Mahindra Group has identified a few businesses under its umbrella, fueling its
growth. While Mahindra Life has reached USD1b valuations, Mahindra Susten
(Renewable energy) and Mahindra Logistic are progressing towards this mark. The
group is looking for partnerships for ‘Gems businesses’. In line with this, Mahindra
Group and Ontario Teachers’ Pension Plan announced a strategic partnership to
capitalize on the growing renewables opportunity in India. The group wants to avoid
investing cashflows from its core businesses. If any of the identified businesses don’t
meet the targets, the group will look into other alternatives.
Story in charts
Trend in Tractor volumes New product launches to drive UV sales
Tractor volumes (units) Growth (%) UVs (incl pick-ups) Growth (%)
42.0
23.1 21.5 31.0 20.0
17.4
8.0 3.1 9.1 9.5
3.4 6.0
0.1
(8.6) (23.0) (18.7)
319,623
609,304
402,580
437,397
477,300
522,648
327,486
429,087
731,164
262,992
330,436
301,915
354,498
354,698
375,980
406,058
FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E
Realization trend Trend in EBITDA margin
Net realizations (INR/unit) EBITDA (incl. MVML) (%)

749,951
738,868
15.3
700,349
14.8 14.2 14.2 13.7

629,219
13.1 12.3 12.4

576,709
562,795
547,636
537,642
Trend in return profile FCF to improve despite higher capex plans

RoE (%) RoIC (%) CFO Capex FCF
126.8
95.9 95.6
74.5 70.9
53.9 63 49 70
44.0 48 39.5 39
23 22
41.7
(6)
39.9
39.2
35.0
31.2
29.4
29.2
21.8
18.2
16.0
15.7
(21)
15.1
14.1
13.9
(27)
10.3
11.7
(32) (45) (33) (32)

(46) (57)
Source: Company, MOFSL Source: Company, MOFSL
23 September 2022 3
CEO Track
IndusInd Bank
Mr. Sumant Kathpalia

MD & CEO
Business segments witnessing steady recovery

Y/E March FY22 FY23E FY24E
Earnings progression remains on track
NII 150.0 175.5 202.9
OP 131.0 146.2 169.2  We hosted Mr. Sumant Kathpalia, MD and CEO, IndusInd Bank, as a part of CEO Track
NP 48.0 77.1 92.4 at AGIC CY22. Here are our key insights from the session:
NIM (%) 3.9 4.1 4.2
Business outlook getting stronger to deliver healthy growth
EPS (INR) 62.1 99.5 119.3
EPS Gr. (%) 55.4 60.3 19.9
IIB believes that the next 3-5 years is going to be very strong for the finance sector,
BV/Sh. (INR) 617.8 707.1 815.4 which is well poised for growth, driven by consumption and capex demand. Thus,
ABV/Sh. (INR) 604.0 695.0 802.3 focus continues to be on improving the market share and delivering sustainable
Ratios growth in the consumer finance segment. The bank expects CE volumes to grow at
RoE (%) 10.6 15.1 15.7 12-14% CAGR over FY22-30 and believes that significant opportunities exist in
RoA (%) 1.3 1.8 1.9 growing the Rural and Gems and Jewellery business. Growth in consumer loans is
Valuation
likely to remain healthy, driven by home loans, which would be a key focus area and
P/E (X) 19.8 12.3 10.3
P/BV (X) 2.0 1.7 1.5 the bank is aiming to grow this book to INR150-200b by FY25-26. The bank has
P/ABV (X) 2.0 1.8 1.5 further realigned its corporate growth underwriting from its past learnings and is
well poised to grow.
Liability franchise improving; Mix of retail deposits improved to 41%
The bank has improved its liability franchise with a higher focus on garnering Retail
deposits. Thus, over the past two years, the mix of retail deposits increased to 41%
vs 31% in Mar’20, while LCR ratio too has stood healthy, showing improvements.
The bank remains committed to improve the deposit concentration and maintaining
a healthy LCR ratio, while the increase in loan growth would aid the CD ratio,
thereby resulting in steady margins.
Setting bigger aspirations under Planning Cycle - 6
Planning Cycle - 6 strategies focus on a) scaling up its domain business on a
sustainable basis, and, b) building up on new initiatives. It has a strong focus on
reducing deposit concentration and increasing granularity through Retail deposits
(target mix of 45-50%). Overall, it is targeting a loan CAGR to be > PC-5 (double in 3
years) with Retail to form 60%. CASA ratio to be >45% with PPoP to loans being >
5.5% over FY23-26. Branch count to be >3k and customer base to be > 50m.
Asset quality outlook improving; Return ratios to improve steadily
Asset quality ratios for the bank have improved significantly over the past few
quarters with overall risks receding gradually. Restructuring book has moderated to
2.1% of loans, which coupled with a healthy PCR of 72% and contingent buffer of
1.2% of loans will enable a sustained decline in credit cost. As a result, profitability
for the bank has improved significantly with the bank reporting an RoA of 1.7% in
1QFY23 and further believing the ratio to improve steadily going ahead.
23 September 2022 4
Story in charts
Expect loans to register a CAGR of at 18% over FY22-24E, led Expect deposits to register a healthy 16% CAGR over FY22-
by pick up in Corporate and Vehicle/MFI segment 24E
Loans (INRb) YoY Gr (%) Deposits (INRb) YoY Gr (%)

36
29 28 28 29
25 29
2,068
2,126
25 27
2,020
18 19 23
20
15 15 17
11 12
1,450
1,131
1,864
2,821
3,357
1,266
1,516
1,949
2,559
3,947
4
FY23E 3,374
FY22 2,933
3
930
688
884
741
FY22 2,391
FY18
FY16
FY15
FY16
FY17
FY19
FY20
FY21
FY15
FY17
FY18
FY19
FY20
FY21
FY23E
FY24E
FY24E
Slippages/credit cost stood is expected to moderate over
Asset quality to witness healthy recovery over FY22-24E FY22-24E
4.5
GNPA (%) NNPA (%) PCR (%) Slippage Ratio (%) Credit Cost (%)
3.8
75 72 72 73 75
3.7
73 73 70 70
3.3
63 59 58 63
3.0
3.0
3.0
56
2.6
2.5
2.4
43
1.9
1.4
1.4
1.4
1.3
1.3
1.3
1.1
0.9
0.9
0.8
0.7
0.7
0.6
0.6
0.6
0.5
0.5
1.0
1.0
1.0
0.3
0.3
0.3
1.1
0.3
0.8
0.3
0.9
0.4
0.9
0.4
1.2
0.5
2.1
1.2
2.5
0.9
2.7
0.7
2.3
0.6
2.4
0.7
1.8
0.5
1.7
0.4 FY24E
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23E
1QFY23
FY12
FY16
FY23E
FY11
FY13
FY14
FY15
FY17
FY18
FY19
FY20
FY21
FY22
FY24E
PPOP to provision/loans set to improve gradually Return ratios to revert to historical levels
PPoP/Prov (x) PPoP/Loans (%) RoE (%) RoA (%)

5.6 5.5
5.2 5.2 5.0
4.7 4.5 4.7 4.8 4.6
4.3 1.8 1.8 1.8 1.8 1.8 1.9
4.1 3.9 4.2 1.6 1.8
3.4 1.4 1.6 1.3
1.5
1.3
1.1
0.9
19.5
19.3
19.2
17.8
17.5
19.0
16.6
15.3
16.5
13.2
14.5
10.6
15.1
15.7
7.6
5.0
2.0
4.1
5.4
7.0
5.6
8.0
6.2
5.7
2.6
2.3
1.5
3.4
3.7
7.6
FY12
FY17
FY22
FY10
FY11
FY13
FY14
FY15
FY16
FY18
FY19
FY20
FY21
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23E
FY24E
FY23E
FY24E
23 September 2022 5
CEO Track
Panel Discussion:
‘Indian Equities: The Retail
Juggernaut’
Mr. Nilesh Shah

Managing Director, A multi-decadal growth story
Kotak Asset Management Co.
Technology, regulation, and distribution will play a vital role
 We hosted Mr. Nilesh Shah, MD Kotak AMC; Mr. Vijay Chandok, MD & CEO ICICI
Securities., Mr. Dinesh Thakkar, CMD Angel One and Mr. Nehal Vora, MD & CEO CDSL,
as a part of CEO Track at AGIC CY21. Here are our key insights from the session:

Large opportunities unfolding in the Indian equity markets
The consensus at the Panel Discussion on ‘Indian Equities: The Retail Juggernaut’
was that of a structural multi-decadal sustainable growth opportunity in the retail
equity investing segment. Over the next 25 years, India’s GDP could cross the
Mr. Vijay Chandok US$30-t mark, while market capitalization of stocks in Indian equities could cross
MD & CEO,
US$50t. Over the next 3-5 years, about 80-100m customers can be added in both
lClCl Securities
direct equity and MFs. The growth witnessed over the past 3-4 years is structural in
nature. Going ahead, the growth is expected to come in the form of new customers,
increasing investments from the existing customers and registering healthy market
returns. Key enablers for this growth:
 Democratization of account opening with smooth EKYC, faster onboarding
through tech means
 Expansion of reach through digitization to get young and people from tier 2&3
and rural areas into the equity bandwagon.
 Convergence of the more affluent segment towards use of tech
Mr. Dinesh Thakkar
 While the discount brokers have evolved and grown the customer base, further
CMD,
Angel One use of technology in the entire ecosystem, especially with interoperability
between various intermediaries.
Surging Retail F&O activity is not risky as perceived

The risk of retail investors exiting equity markets is low in the current market set up.
In the past, bulk of the retail volumes was in the cash segment, which in a weak
market environment would create value erosion and exit of customers. In the
current set up, the customers are buying options, and hence, a relatively less risky
proposition with much smaller ticket size. This enhances the stickiness of the
customers even in a volatile or weak market environment.
Mr. Nehal Vora Customer acquisition costs and building scale are key challenges
MD & CEO,
One of the biggest challenges is the high cost of customer acquisitions. The cost of
CDSL
acquisition for a SIP customer is recovered in 5-6 years. However, an association
between players (Stock brokers, AMCs, Insurance companies) can bring this down
23 September 2022 6
substantially. It is pertinent that players build scale in their operations as the
opportunities will unfold in a J-Curve form. While the customer base has been
scaling up, players will have to engage, retain, and monetize the entire customer
base.
SIPs will continue to be the driving force for MF investments

Regulators investing heavily into the ‘Mutual Funds Sahi Hai’ campaign has made
SIPs a household name. Going ahead, demand for SIPs will come from rising number
of accounts and increased adoption of Balanced, Hybrid, and Debt schemes for SIP
investments. While the bank deposits of troubled entities became an issue from the
recovery aspect (delayed return of capital to customers) but for troubled MF
entities, the client capital was recovered rather quickly, building the trust of
customers. The next set of customers for MF business can come from 1) customers
with large cash holdings (Currency in circulation is more than MF investments), 2)
set of investors having seen wealth erosion in direct equities and 3) customers
having large investments in gold.
A lot has been done by regulators but a lot more can be done
 Enabling measures to get EPFO funds into equity markets, implementing a
scheme for MF accounts akin to JanDhan bank account.
 Ease of regulations for NRIs wanting to invest in India, unfolding a large
opportunity.
 Gift city holds a lot of promise as it is the gateway for foreign inflows into Indian
markets and investments into foreign countries by Indians. Enabling smoother
regulations will be key to unlock the large potential.
 Account Aggregator (AA) framework will enhance the growth of distribution of
assets materially as the flow of information will become seamless and will allow
financial planners to avoid misselling. Interplay of financial institutions will
provide financial inclusion opportunity.
Story in charts
Huge scope for India to adopt equities Equities contribute only 4.8% of HH assets
Share of population
78% 4.8
4.2 4.3
3.7 3.7 3.6 3.8 3.9
3.3 3.4
2.9 2.7
36% 2.6
2.2 2.2
2.7
7% 2.2
3% 3%
Account at a PAN Card Demat Active NSE Unique MF

Financial User Investors
FY11
FY18
FY06
FY07
FY08
FY09
FY10
FY12
FY13
FY14
FY15
FY16
FY17
FY19
FY20
FY21
FY22
Institution
Source: MOFSL, World Bank, CDSL, NSDL, NSE, HDFC AMC Source: MOFSL, RBI
23 September 2022 7
Number of Demat accounts cross 100m mark Penetration of demat still low in India
Demat accounts (m) Penetration 65.0%

100
90
55
36 41
28 32
21 22 23 25
14.2%
6.9%
FY15
FY13
FY14
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Aug-22
India (Jun 2022) China (Jun 2022) USA (2018)
Source: MOFSL, CDSL, NSDL Source: Angel One, MOFSL
Retail Segment F&O ADTO through the roof Monthly SIP flows hitting new highs every month
127
Retail F&O ADTO (INR t) 56
115
44
96
119
85
83
80
80
81
105
78
67
56
86
84
82
82
78
18
43
76
34
66
31
49
6 7
4
41
2
33
0 0 0 0 1 0 1 1 1 1
Aug-22
Q1FY20
Q1FY08
Q1FY09
Q1FY10
Q1FY11
Q1FY12
Q1FY13
Q1FY14
Q1FY15
Q1FY16
Q1FY17
Q1FY18
Q1FY19
Q1FY21
Q1FY22
Q1FY23
Jun-20
Aug-19
Mar-19
Jul-17
Oct-18
Jul-22
Apr-16
Dec-17
Jan-20
Apr-21
Sep-16
Feb-17
Sep-21
Feb-22
May-18
Nov-20
Source: MOFSL, BSE, NSE Source: MOFSL, AMFI
MF Unique investors more than 2x in 4 years MF Penetration low in India
34 35 120
31
27
24 81 80
23 68
20 21 21 21 22 67 63 63
18 18 19 19 20 20
15 16 17 48
40
32
13 12
Japan
France
World
UK
Brazil
US
Germany
Korea
China
South Africa
Canada
India
Jan-18
Jan-19
Jan-20
Jan-21
Sep-21
Jan-22
Sep-17
Sep-18
Sep-19
Sep-20
May-18
May-19
May-20
May-21
May-22
Source: MOFSL, HDFC AMC Source: MOFSL, Prudent Corp RHP
23 September 2022 8
CEO Track
Mindtree
Mr. Debashis Chatterjee

CEO
Demand resilience led by growing tech criticality

Y/E March 2022 2023E 2024E
Supply gap remains the key risk to long-term industry stability
Sales 105.3 133.8 152.5
EBIT Margin (%) 18.6 19.0 19.2  We hosted Mr. Debashis Chatterjee, CEO, Mindtree, as a part of CEO Track at AGIC
PAT 16.5 20.4 23.7 CY22. Here are our key insights from the session:

EPS (INR) 100.1 123.7 143.7
EPS Gr.(%) 48.6 23.5 16.2 Resilient Revenues
BV/Sh.(INR) 332 400 479 IT services is playing a major role in both ‘Core (revenue generation related)’ and
Ratios ‘Context (activities to support core)’ requirements of business, making it difficult to
RoE (%) 33.8 33.8 32.7 reduce the expenditure. With transformation happening in both Core and Context
RoCE (%) 27.2 28.6 27.3
operations, the IT services industry has evolved into a strategic requirement for
Payout (%) 37.0 45.0 45.0
Valuation
large Enterprises, which is a key reason for disconnect with macro weakness. With
P/E (x) 31.1 25.2 21.7 increasing companies moving towards the digital space, innovation becomes very
P/BV (x) 9.4 7.8 6.5 important. Mindtree also suggested that cloud will become a commodity and
EV/EBITDA (x) 21.8 16.8 14.2 imperative for enterprises.
Div. Yield (%) 1.2 1.8 2.1
Discussions moving to cost efficiency
Cost optimization initiatives are being driven through technology, which has helped
to avoid cuts in IT services spends. The discussion is beginning to shift to cost
efficiency work from transformation related expenditure. As long as IT services
vendors can help control cost, they can defend growth-related spends. Supply cost
optimization is also a key point of discussion.
Supply cost remains elevated
Mindtree CEO believes that the increase in supply cost has been excessive and is a
result of some irrational behavior in the industry with frequent moves and large
salary hikes. While some of this has been on account of low intake over last few
years, the industry needs to guard against becoming uncompetitive.
Retail and Europe remain challenging
Mindtree faced some challenges in its retail and consumer goods portfolio,
impacted by its high exposure to Russia and Ukraine. This has also impacted
European performance and remains a concern area.
LTI-Mindtree merger – Massive synergies
LTI and Mindtree have complementary verticals and also have good cross-selling
opportunities. The combined entity will also benefit from diverse capabilities as
Mindtree has strong front-end transformation capabilities, while LTI has strong
supply chain transformation capabilities. They should also receive the benefit of
scale, which will enable it to claim a seat at the table for large deals bids.
23 September 2022 9
Story in charts
Deal wins up 46% on a sequential basis
Deal wins
570
504
391 375 360 358 390
303 312
1QFY23
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
Source: Company, MOFSL
Revenue grew 4% QoQ in 1QFY23 Margin improves 20bps in 1QFY23
Revenue growth (QoQ %) EBIT margins

12.8
19.6 18.6 19.2 18.9 19.2
5.1 17.7 18.2
5.0 4.7 4.7 4.0 16.7
3.1 15.1
7.7
(9.1)
1QFY21
1QFY23
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
Utilization moderates in 1QFY23 Offshoring touches new highs in 1QFY23

Utilization (incl. trainees) Offshore Effort (%)
86.0 86.3 86.6
84.3 85.0
83.1 83.2 82.9 83.1
81.5 81.2 82.9 83.5
82.8
78.8 82.1
80.2
75.5
1QFY22
1QFY23
1QFY21
2QFY21
3QFY21
4QFY21
2QFY22
3QFY22
4QFY22
1QFY23
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
23 September 2022 10
CEO Track
Adani Transmission
Mr. Anil Sardana

MD and CEO
Distribution reforms and energy transition – leading the way

A lot has been done in reforms, but a lot needs to be done … green energy is the
future
 We hosted Mr. Anil Sardana, MD and CEO, Adani Transmission, as a part of CEO Track
at AGIC CY22. Here are our key insights from the session:

India is one of the top 3 power producers globally, but per capita lags
India has more than doubled its power capacity over the last 10 years to 370GW
from 170GW. However, per capita consumption at ~1200kwh is way below global
average. ATL expects power generation to grow by 2.3x to 832GW by 2030 with per
capita consumption also likely to more than double. This presents a never before
kind of an opportunity for ATL, given its presence in the T&D space.
Reforms in distribution network had varied outcome; more reforms needed

The government has continuously been targeting reforms in various parts of
distribution including improving governance of Discom boards and structuring of
Discom debt. ATL believes there is a huge scope for extensive reforms in the sector,
providing reliable, continuous, and affordable power to all without cross subsidizing
various segments. However, this would also require enforcing existing reforms
more strictly.
Consumer first approach to bring in efficiency in the transmission system

One of the most important reforms highlighted by ATL was giving the customers the
choice to choose their preferred power distribution network. ATL has applied for a
second distribution license in several states, which will widen competition in the
sector and bring in efficiency and affordability in the sector. The entire approach of
ATL in the transmission space is bring in choices and affordability to customers’
door-steps as is now prevalent in the telecom sector.
Transitioning to green energy, leap frogging into the future

While ATL continues to develop the transmission space by adding more distribution
networks, it is now transitioning to green energy with a massive growth plan of
20,4GW already in place, which is already fully funded. ATL has ~5.8GW of
operational RE (renewable energy) portfolio with 11.4GW where PPA is signed and
~3.2GW capacity where PPA have not been signed. With the execution of over
~15GW capacity at various stages, ATL is poised to leap frog into the renewables
space.
Investing in the green hydrogen ecosystem, the answer to de-carbonization
ATL expects the green hydrogen market to grow to 6mt by 2030 and spike to ~20-
30mt by 2050 as hydrogen becomes more affordable and widely available. ATL
expects that significant demand for the green hydrogen will arise from the refinery,
ammonia, city gas distribution, fertilizers, automobile, shipping, and other sectors. It
expects demand for green methanol to be one of the biggest drivers for demand for
hydrogen. ATL has embarked on an ambitious path to meet this demand and plans
to invest ~USD50b by 2030 to create a mega hub for green hydrogen. This will
include a generation hub at Khavda, Gujarat and a consumption hub at Mundra,
Gujarat. It is in the process of setting up phase-I, consisting of 1 mt green hydrogen
ecosystem.
CEO Track
Patanjali Foods
Shri Swami Ramdev

Co-founder
Laying out a roadmap for long-term stuctural growth

Will focus on increasing the contribution of the higher margin FMCG business
 We hosted Shri Swami Ramdev, Co-founder, Patanjali Foods, as a part of CEO Track at
AGIC CY22. Here are our key insights from the session:

Laying the foundation for a strong FMCG business
The Foods business of the Patanjali group had a turnover of INR40B. The company
recently acquired Ruchi Soya, and Patanjali Foods was created. A majority of the
business’s revenues still come from the traditional commodity-based edible oil
business, which contributes nearly 75% of the company's EBITDA. The focus now is
to ramp up the FMCG/branded business to about 50% of the overall business’
revenue, which would help deliver better margins and improve the sustainability of
its earnings.
Vision to expand the plantation business by 10x from current levels

The company’s plantation business is expected to register massive growth over the
next five years. The management aims to increase area under coverage from 50k
hectares to 500k hectares with support from the National Mission on Oilseeds and
Oil Palm. Patanjali Foods has a well laid out plan, where it plans to take the help of
farmers with existing land and work with them as long-term partners. The expansion
will primarily be in the territories of North East India and South India. The total
capex laid out for this expansion is to the tune of INR15b and a substantial part of
this will be returned to the company in the form of government subsidies.
Future targets
Nutraceuticals is another focus area with the size of the market expected to double
to INR1T in five years. The management aims to grow the Foods business, from its
current revenues of INR65b to INR100b, driving the overall company margins
towards the 12-15% range. The promoters also plan to list four other groups–
Patanjali Ayurveda, Patanjali medicines, Patanjali Lifestyle, and Patanjali Wellness –
in the coming years.
The Patanjali group currently has a combined turnover of INR400B with the target of
reaching INR1t in the next five years.
CEO Track
FSN E-commerce Ventures (Nykaa)
Ms. Falguni Nayar

CEO
Well positioned to ride the upcoming e-com growth in India

Harnessing the power of social media to educate consumers and expand the market
 We hosted Mrs. Falguni Nayar, CEO, FSN E-commerce Ventures (Nykaa), as a part of
CEO Track at AGIC CY22. Here are our key insights from the session:

Inspiration and start
Beauty has been an underserved market in India. Given that the industry has a long
tail of SKUs, it was difficult for traditional retail stores to stock adequate amounts of
merchandise, thus, limiting customer choice. Mrs. Nayar took inspiration from
multiple developed countries where BPC was a thriving industry with large stores
stocking multiple brands and SKUs. This was her inspiration to start Nykaa for which
she embraced technology to create a unique beauty retailing business.
Creating a market through consumer education

When Nykaa started operations, the BPC market was still nascent with most
consumers using only a few basic products. Nykaa was able to harness the power of
social media to educate consumers about various beauty products, which also
resulted in a loyal captive audience. By collaborating with a number of influencers,
Nykaa was able to reach out to a wide audience and promote multiple brands and
their products. This network of influencers and customers has only grown from
strength to strength and is one of Nykaa’s biggest competitive advantages today.
Identifying and solving the problem of spurious products

Authenticity was a big problem within the BPC space in India. To address this issue,
Nykaa decided early on to work directly with brands and official distributors as the
direct source for their goods. It then went on to leverage an inventory-led model,
wherein all products were stored in Nykaa’s own warehouses and subsequently
shipped directly to customers, thereby, ensuring authenticity of all products.
‘Retail is Detail’
Nykaa believes that its success is a result of understanding the customer and
creating custom solutions for them. It has strived to create a customer experience at
par with international standards set by the likes of Amazon and Flipkart. It worked
with its brand partners to create mini SKUs or access packs specifically for the Indian
market. Nykaa was also the first to put expiry date data on its website and only
purchased merchandise from brands, which were at least 15 months away from
expiration. This customer-centric approach helped Nykaa to create a loyal customer
base with healthy repeat purchase patterns.
CEO Track
Metro Brands
Mr. Nissan Joseph

CEO
Financials & Valuations (INR b) Target to be India’s largest specialty footwear retailer
Sales 13.4 21.1 25.2
EBITDA 4.1 6.7 8.1  We hosted Mr. Nissan Joseph, CEO, Metro Brands, as a part of CEO Track at AGIC CY22.
Adj. PAT 2.1 3.8 4.5 Here are our key insights from the session:
EBITDA 
30.5 32.1 32.0
Margin (%) Multiple formats to drive growth:
Adj. EPS (INR) 7.8 13.9 16.6 Majority of the footwear players in India are typically single-brand companies. India
EPS Gr. (%) NM 78.0 19.5
doesn’t have a multi-brand stores. Metro plans to leverage this space with a target
BV/Sh. (INR) 47.6 60.5 75.8
to be the largest specialty footwear retailer. The company has identified multiple
Ratios
levers of growth. In order to ensure all brands get equal attention for growth, it has
Net D:E (0.1) (0.0) (0.1)
RoE (%) 20.0 26.2 24.9 created different strategic business units (SBUs) for each format, viz. Metro, Mochi,
RoCE (%) 14.9 18.8 17.8 Crocs, walkway and fitflops, with individual targets on growth and profitability. The
Payout (%) 9.6 9.5 9.5 existing retail footprint is catering the mass segment and Metro targets all brands in
Valuations the mass premium category. It is not keen on the luxury segment as it sees limited
P/E (x) 113.9 64.0 53.5 opportunity.
EV/EBITDA (x) 59.5 36.1 30.0
EV/Sales (X) 18.1 11.6 9.6 E-commerce to be assessed
Div. Yield (%) 0.1 0.1 0.2
The company is not aggressively pursuing the e-commerce space. Footwear, within
FCF Yield (%) 1.0 1.4 2.3
e-commerce, has low tolerance of fit/comfort leading to 30% returns. Also,
economics is not conducive as ecommerce would incur high marketing, logistics, and
other costs. Therefore, the company is playing heavily on the omni-channel, as it has
high full price sell through, low logistics cost, and better inventory management.
New footprint additions

There is a huge opportunity lying untapped. There are only 238 stores for Metro in
~140 cities. This can easily double up. Metro is working towards identifying the right
locations for its stores for optimum store profitability.
Margin to hover at current level

Gross margins to trend in 55-57%, while EBITDA/PAT to range around 35%/15%.
Historically, 70% of the products are its own brands, and the company plans to
maintain the current mix.
Story in charts
Expect 37% revenue CAGR over FY22-24E Expect gross margins to remain at 57% range
Gross Profit (INR b) Gross Margins (%)
Revenues (INR b) Growth YoY (%)
67.9
56.8 57.9
57.0 57.0
19.7
12.1 5.6 55.6
21.1 54.9 54.9
12.0
-37.7
12.2 12.9 8.0 13.4 25.2 6.7 7.1 4.4 7.8 14.4
FY19 FY20 FY21 FY22 FY23E FY24E FY19 FY20 FY21 FY22 FY23E FY24E
EBITDA margins to hover around 30-35% Improved share of online sales witnessed
EBITDA (INR b) EBITDA Margins (%) Online Sales (INR m) % of revenue
30.5 32.1 32.0 8.4%
27.6 27.4 7.3% 7.6%
21.4
2.5%
1.7%
3.4 3.5 1.7 4.1 6.7 8.1 190 310 570 1100 380
FY19 FY20 FY21 FY22 FY23E FY24E FY19 FY20 FY21 FY22 1QFY23
Store additions expected to remain strong (No of stores) Mix between third party and own brand remains stable.
Metro Mochi Walkaway Crocs Fitflop Third Party Brands Own Brands
246
212
149 178 98 70% 69% 69% 73% 75%
96 118 63
70 73 53
63 182 190
136 145 145 162
209 218 219 231 251 264 30% 31% 31% 27% 25%
FY19 FY20 FY21 FY22 FY23E FY24E FY19 FY20 FY21 FY22 1QFY23
CEO Track
Mumbai Metro Line 3 – Connecting
the unconnected
Smt. Ashwini Bhide

MD, Mumbai Metro Rail Corporation (MMRC)
Mumbai Metro line 3 – One of its kind project to be operational soon

Will continue to focus on developing several metro lines in the MMR region
 We hosted Smt. Ashwini Bhide, MD, Mumbai Metro Rail Corporation, as a part of CEO
Track at AGIC CY22. Here are our key insights from the session:

Mumbai infrastructure needs significant improvement
Mumbai, the financial capital of India today a) handles 1/3rd of the foreign trade b)
handles a large amount of air passenger traffic c) is a significant contributor to GDP
and taxes and also accounts for ~25% of the industrial output. Despite this, the
current infrastructure of the region is not as per the desired levels and requires
significant upgradation. Mumbai today has 1.2m private cars and nearly 2,150 cars
per km which is significantly higher than other regions. The number of private cars
has nearly doubled in a decade. Due to this, there is a need to reduce public
transport via road and the most feasible solution is to develop a robust Rail network.
Metro line 3 – to start soon; would ease congestion significantly

To tackle the requirement of better Infra in Mumbai, the Mumbai Metro -3 lines,
one of its kind underground metro project is under construction. The 33.5 -km
project would connect Colaba to Aarey and is expected to get commissioned soon in
phases. The Aarey to BKC is targeted to be complete by the end of Dec’23, the BKC
to Colaba stretch is expected to be complete by Jun’24. The project would serve
Nariman Point, Cuffe Parade, Fort, Worli/Lower Parel, BKC, SEEPZ / MIDC.
Additionally, it would also connect areas not served by suburban rail. The project
would have interchange provision with existing public transport and would also be
connected to both the Airport Terminals. The project has seen several challenges
that include land acquisitions and rehabilitation of affected families, approvals,
congested work areas, litigations, etc. On Aug 30, the trial runs were conducted.
Project to benefit Mumbai in several ways

The Mumbai Metro 3 line is expected to benefit the city with a whopping 35%
reduction in traffic, reduced fuel consumption, reduction in air and noise pollution.
Modal Share of Public transport is expected to increase from 65% in 2017 to 75% by
2041. The project significantly also improves competitiveness of Mumbai and
Improved Productivity. Additionally, it would improve the quality of life for the
citizens and significantly ease the congestion the city is witnessing.
Several Metro rail projects currently underway
There are more than 350 kms of Metro/Mono lines, which are being planned for the
Mumbai region, which includes projects operational, under construction, and
projects at the planning stage. Over the next 6-8 years, most of the projects would
be operational and the ease of travel would significantly improve for the citizens.
Project images Project images
Project images Project images
CEO Track
Trent
Mr. P Venkatesalu
CEO
Financials & Valuations (INR b) Target to deliver growth with profitability and capital efficiency
Sales 45.0 76.6 95.9
EBITDA 5.7 11.9 16.0  We hosted Mr. P Venkatesalu, CEO, TRENT, as a part of CEO Track at AGIC CY22. Here
NP 0.4 3.9 6.0
are our key insights from the session:
EBITDA Margin (%) 12.8 15.5 16.7 
Adj. EPS (INR) 1.2 11.0 16.8
Value focused to drive scale:
EPS Gr. (%) NM NM 53.5
BV/Sh. (INR) 71.1 82.9 100.8
Dissonance of consumer’s aspiration and affordability has had implications on
Ratios consumer’s buying behavior. Aspiration levels are higher across age cohorts, while
Net D:E 1.7 1.4 1.2 income levels, though growing, are not meeting aspiration levels. Trent’s bet is to
RoE (%) NM 15.2 19.6 propose a product, which is aspirational, affordable, and value-oriented in terms of
RoCE (%) 2.0 9.3 11.1
absolute and relative price point. Else, it doesn’t resonate with the audience at
Payout (%) 174.6 0.0 0.0
Valuations scale. On the other hand, luxury category has limited opportunity to drive scale.
P/E (x) NM 131.8 85.9
95.2 46.4 34.6
Preference towards own brands, own reach
EV/EBITDA (x)
EV/Sales (x) 12.4 7.4 5.9 Consumers have a.) Multiple brands (ranging between 2 and 10) in their wardrobe.
Div . Yield (%) 0.1 0.0 0.0 In order to stand out, the company needs to offer brands with differentiated brand
FCF Yield (%) -0.3 1.3 1.7 proposition. Trent has high bias towards driving a differentiated product
proposition. The company does not aim to merely trade in third-party products but
sell own brands by leveraging integrated backend. Similarly, Trent’s culture is to
reach customers directly (Direct-to-Consumer) and not to sell any of their products
through any retailer.
Growth at accelerated pace through a portfolio of brands:

At a portfolio level, it targets to grow at 25%, similar to that of the last few years.
Further, it wants to have a portfolio of brands/formats and plans to
originate/incubate portfolio of brands, where it can answer/address customer
aspirations and offer differentiated value propositions. The company, however, does
not want to work on licensed brands. Star and Utsa are yet in the WIP phase as the
company is trying to get the model right with differentiated products to drive scale.
Star Bazaar
Incremental capital commitment remains limited within this segment. It aims to
deliver growth with profitability and capital efficiency. The company sees a good
opportunity with the exit of international players, thereby creating duopoly. Further,
the company is now operating on very tight economics, store size, own labels and
right location. It wants to optimize operating performance through private labels, so
that it can create differentiated offerings and achieve good store economics.
Story in charts
Expect 46% revenue CAGR over FY22-24E EBITDA margins to see improvement
Consol. revenues (INR b) YoY Growth (%) Consol. EBITDA (INR b) EBITDA Margin (%)
73% 70% 16.7%
15.6% 15.5%
12.8%
33% 9.3% 8.7%
25% 6.6% 16.0
18% 22%
11.9
-26% 5.4
5.7
21.6 26.3 34.9 25.9 45.0 76.6 95.9 2.3 1.7
2.0
FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY18 FY19 FY20 FY21 FY22 FY23E FY24E
Westside expected to add 35 stores annually Zudio to add 100 stores annually
Westside Westside stores added Zudio - Standalone Zudio - Store adds
35 35
100 100 100
25 26
18 20 433
14
8 9 333
5 53
40
33 233
6 133
85 93 107 125 150 165 174 200 235 270 7 40 80
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY18 FY19 FY20 FY21 FY22 FY23E FY24E
CEO Track
ONDC
Mr. T Koshy
CEO
ONDC: Disaggregation of E-commerce to grow the addressable market

New business models can bring more Sellers to the digital space
 We hosted Mr. T Koshy, CEO, ONDC (Open Network for Digital Commerce), as a part of
CEO Track at AGIC CY22. ONDC is a non-profit institute set up with the encouragement
of government of India to promote protocols which will establish open networks for
exchange of goods and services between digital buyers and sellers. Here are our key
insights from the session:
Decentralized network to encourage unbundling and interoperability

 Unlike the existing platforms, which require tight control and creation of walled
gardens to create value, ONDC enables an open ecosystem, where multiple
buyers can transact with multiple sellers across apps, using third-party
intermediaries within a set preset protocol.
 The intent of forming ONDC was laid on the principles of openness and
decentralization.
 The aim of ONDC is to enable wider and more equitable participation of both
sellers and buyers in the digital commerce, which should result in lower
concentration of large sellers with information asymmetry.
 Moreover, this will also reduce the regulatory risks from large walled gardens in
Internet, which are a key concern of regulators globally. ONDC is providing
democratic approach to this problem, making it unique.
 ONDC aims to provide equal opportunities to small sellers by providing equal
visibility on the platform. The attractiveness of the product to the buyers will
decide the demand for the product for sellers.

Solutions to the current problems in E-commerce
 Currently, there are two-three major E-commerce platforms in India, with their
own exclusive large sellers. Once the platform is ONDC compliant, the buyers
would be able to discover all the sellers and sellers would be able to discover
their buyers.
 ONDC will also solve the problem of large captive sellers on the platform. The
practice of profit maximization by the enterprises with the help of the
information they collect will become irrelevant.
 Currently, buyer and seller apps are a part of a single platform. It will provide
the freedom to set-up the buyer/seller app independently.
ONDC to boost E-commerce penetration
 There is negligible e-commerce penetration in India. Buyer side penetration
stands at ~5%, while the seller side penetration is even lower at just ~1%.
 At present, only 15k of the 12m Kirana stores (0.125%) are e-commerce
enabled.
 ONDC will widen the e-commerce market by increasing the penetration levels
by bringing in more buyers and sellers to the ecosystem.
 The current e-commerce platforms will co-exist with ONDC in the new
ecosystem.
CEO Track
Nasscom
Mr. Harish Mehta

Founder
Unique industry culture of colloborative approach defines Indian IT

Industry has always emerged stronger post macro headwinds
 We hosted Mr. Harish Mehta, founding member and the first elected Chairman of
NASSCOM in a fireside chat with Atul Nishar, Founder & Chairman of Hexaware
Technologies, as a part of CEO Track at AGIC CY22. The discussion covered the current
state of Indian IT services industry along with its growth journey covered in Harish’s
book “The Maverick Effect”. Here are our key insights from the session:

Industry growth outlook remains positive despite near-term concerns
 The IT services industry has grown in its confidence over the last many years as
the work profile changed from execution towards advisory. This has helped the
industry to focus on growth opportunities instead of worrying about near-term
challenges due to adverse macroeconomic conditions.
 The industry has shown a tendency to bounce back stronger after every
macroeconomic crisis in developed economies.
 The industry long-term growth outlook remains unchanged despite the
slowdown and is likely to double export sales over the next five years to
USD350b.
 The only area of worry for service providers currently is the supply side
disruption, which has impeded their ability to service customers.
Strong foundation and culture sets IT services industry apart

 Since the setting up of NASSCOM in 1988, Indian IT services industry has
operated in an open and collaborative culture, which has resulted in an industry
with strong reputation and clean governance track record.
 The Indian IT industry has been one of the fastest growing globally, owing to the
adoption of international operating and reporting standards.
9 Sep - 23 Sept, 2022 ‘MANAGEMENT SAYS’
Key takeaways from Motilal Oswal Annual Global Investor Conference 2022
Company Takeaway
AUTOMOBILES
A. Better realizations: As commodity costs are still high, the management has been
taking regular price hikes (1.7% in 1Q and further price hikes in Jul-Aug’22). It
thus expects better realization in 2QFY23.
B. The drivers of margin: The government’s scrappage policy, a recovery in
demand resulting in operating leverage, lower commodity costs, and an
Ashok Leyland
improving mix (higher proportion of FTBs and FTUs) will be margin accretive.
C. DFCC: It will have some effect on Truck volumes. The management believes it
will be more of a hub-and-spoke model, aiding ICV volumes.
D. Defense business: Revenue is currently in the INR4-5b range, which AL aims to grow
to INR10b over the next three years, with the launch of new specialized vehicles.
A. SUVs: In its SUV business, it is looking to increase overall capacity by 2x and will
formulate a roadmap in a couple of months. It will have to expand engine
capacity as the Thar, XUV700, and Scorpio share the same engines. The
management said it will be investing INR19b in existing products.
B. Semiconductor shortages: The SUV business has seen a 10% impact on volumes
due to the semiconductor shortages. In the LCV business, ECU supplies have
normalized and it expects production to normalize going forward.
M&M
C. After the XUV400 launch in Jan’23, it has no new or ICE platform launches
planned till the launch of first completely in-house EV in Dec’24.
D. Electric Tractor: It has a product ready, but finds technology and cost as limiting
factorsd. The management said that an e-Tractor is okay for a small HP
perspective, but not for mainstream Tractors, given the higher need for torque
and daily operating needs. It has a product ready, but isn’t launching the same
as it feels the timing isn’t right.
A. The management aims to diversify revenue over the next five years. While the
share of ICE is expected to fall to ~60% from 83% in FY22, non-Auto and tech
agnostic/xEV will constitute 40% from 17% in FY22.
B. It has an order book of INR14b, which usually takes to 24-30 months to reach
peak revenue. Around 50% of its order book are from the tech agnostic/xEV and
non-Autos. Its ICE order book is largely for PVs and CVs as 2W ICE orders are
Sansera Engineering largely replacement orders (and hence not part of the order book). Around 50%
of the order book are for the export market.
C. It expects exports to remain weak in FY23 due to weakness in the EU. It expects
strong demand in the domestic business, led by a recovery in 2Ws, PVs, and CVs.
D. Alloy steel prices rose ~INR9.5/kg in 1Q and then declined by ~INR5/kg in
2QFY23 till date. The management said there is demand for an increase by
~INR5/kg.
A. Alloy Wheels: At present, Alloy Wheel penetration in India stands at 33% for
Steel Strips Wheels
PVs (v/s 95% globally). It aims to sell 2.9m Alloy Wheels in FY23 (v/s 1.8m in
18th AGIC 2022
Company Takeaway
FY22), which will result in a revenue of INR11-12b (v/s INR7.1b in FY22). It also
has a higher EBITDA margin (18-20%).
B. Exports: Only steel wheels are currently exported. Exports are expected to
decline in FY23 due to inventory build-up at the channel level. There has been
seven months of a continuous decline in exports, but it is now seeing a MoM
improvement. EBITDA margin for the export business is 400-500bp higher than
the domestic business. It sees a huge opportunity in the export alloy business as
the market currently stands ~350m wheels annually.
C. EBITDA per wheel for FY23 is expected to sustain at 1Q levels of ~INR259/unit
(v/s INR224/wheel in FY22, excluding inventory gain).
D. SSW is in the process of acquiring AMW’s steel wheel capacity (of 7m wheels)
for INR1.5b. This capacity has the potential to generate INR7-8b in revenue. The
acquisition of the distressed asset is sub judice as Triton EV has submitted a bid
for this asset after the resolution plan was submitted by SSW.
A. JLR’s order book remains strong, with hardly any cancellation. However,
semiconductor shortages continue to impact volumes.
B. EVs: Around 55% of its bookings for Nexon EVs are for Nexon EV Max, which
costs INR1.8-1.9m. It will be launching the Tiago EV for the price conscious
buyers in the near future and the Nexon EV Cross in the 4.2m category. Its first
in-house EV product is targeting a FY25 launch. It has the first-mover advantage
in EVs. As the Nexon EV will have completed one cycle of four years when its
Tata Motors
competitors launch their products, it believes its customers will be able to gauge
the residual value of the product.
C. India PVs: It will be introducing regular updates like Kaziranga, Jet, and Dark
editions to its present range and different fuel options like CNG (Tiago and
Tigor). It is looking to launch a product competing in the Creta segment. Around
90% of its PV dealers have turned profitable, and the focus it to enhance its
sales and service network.
Company Takeaway
CEMENT
A. The VSF business is seeing double-digit volume growth, but pricing remains
weak. Though demand from the international market remains low, it is seeing
continued traction in the domestic market. The management is focusing on
increasing Speciality volumes. Livaeco is seeing strong demand growth for
sustainable fiber. Though it is evaluating some debottlenecking opportunities,
there are no major expansion plans on the board.
B. Chemical business: Demand in this space remains good. The closure of plants in
Europe will boost profitability. Though it has seen steady pricing, the same has
fallen from peak levels. Chlorine realization remained in the negative territory.
Grasim The management’s key focus is on increasing the share of chlorine integration.
C. Paint: Land acquisition has been completed at all sites, with civil construction at
four sites. The management is targeting a total capacity of 1,332mtpa and aims
to start plant commissioning as well as distribution from 4QFY24. Distribution in
the Paints business will depend on its own penetration. It will leverage its dealer
network and strong brand positioning of Birla White and Putty. Its key focus is
on Decorative Paints.
D. The B2B e-commerce business will provide a platform for procurement of
Building Materials (such as tile, sanitary fittings, steel, etc.). It plans to invest
INR20b over the next five years and is developing a new team for this vertical.
September 2022 25
18th AGIC 2022
Company Takeaway
The Building Materials Procurement segment offers huge growth opportunities.
GRASIM is not looking at any inorganic growth opportunities as it already has
the required support system. It will maintain some inventory for timely delivery.
A. Demand in its key markets North and East India remains healthy. Its plant in South
India is operating at optimum levels. The recently commissioned grinding unit in
Pune (Maharashtra) will aid volume growth. Annual industry volume growth is
estimated at 7-8%, which will surpass capacity addition growth of ~5%. It has seen a
strong pick-up in Real Estate demand after a lull of six-to-seven years. Also, higher
pre-election spending in Infrastructure will drive demand growth.
B. Increasing share of green energy and alternative fuel: SRCM currently meets
50% of its power requirement through green energy (WHRS, solar, and wind). It
is in the process of adding 100MW of solar power plants at various locations
over the next six-to-nine months, which will help increase its share of green
energy to ~55%. It is also focusing on increasing its share of alternative fuel
(agro husk, municipal waste, and biomass). It aims to increase its thermal
Shree Cement
substitution rate (TSR) to ~20% v/s ~6% at present.
C. Capex guidance and capacity addition: For its ongoing capacity expansion plans, it
has guided at a capex of INR75b over the next two years. It is likely to announce
further expansion plans (mix of greenfield or brownfield) over the next few quarters
after receiving statutory clearances and on completion of the land acquisition. It
aims to achieve a grinding capacity of 80mtpa over the next six-to-seven years. The
management is open to inorganic growth at an economical price.
D. Improvement in logistics and digitization: The management aims to have a
railway siding across its plants to rationalize its logistics costs. It aims to increase
the share of rail in logistics to 25% from 10% at present. It is rapidly moving
towards digitization in marketing, sales, logistics, and process automation at the
plant operation level.
Company Takeaway
CONSUMER
A. Demand: There has been no letup in industry demand in Jul-Aug’22.
B. Price hikes: As APNT has taken some price increases in solvents, no dip in
Asian Paints realization is likely.
C. Other: Price reductions will be taken with a lag once commodity costs sustain
at lower levels. APNT had taken price increases too with a lag.
A. Adjusted for seasonality, the demand momentum continues to stay strong,

despite the second quarter being a weak quarter for QSRs.
B. Input costs: Since raw material prices for KFC have stabilized, further price
hikes may not be needed if they sustain at these levels. Input costs for Pizza
Hut are also largely stable, barring cheese, which is seeing some inflation.
Devyani International
C. Store opening guidance: The management reiterated its guidance of opening
250 stores in FY23 (100 KFC, 100 Pizza Hut, 40-50 Costa Coffee, and a handful
of Vaango stores). All incremental Pizza Hut stores will be in the new small
format, which currently constitute 90% of its total store network. New stores
typically mature in 18-24 months.
A. Demand has been good in Hair Color and Soaps. The demand trend for
Godrej Consumer Products
Household Insecticides (HI) has been improving on a sequential basis.
September 2022 26
18th AGIC 2022
Company Takeaway
B. Volume growth is a priority for the management, but feels the same needs to
be sustainable. Price actions and A&P spends will be implemented in an effort
to boost volumes.
C. Household Insecticides: The management is boosting its market share in
aerosol and liquid vaporizer formats without surrendering its share in coils. The
challenge in coils is its high trade margins. So, the management will rather pass
on the benefits to consumers. Lowering the prices of other formats causes
consumers to shift from coils.
D. Margin: The management believes the company will witness a sequential
improvement in gross margin as palm oil prices are down sharply and inventory
levels were not very high.
A. Demand: The momentum in urban demand remains strong. Rural demand has
slowed down, but is still in positive territory, unlike Staples.
B. Growth in other building materials remains healthy. A fresh capacity infusion
Pidilite Industries
for PIDI is likely in the next six months in many businesses.
C. Margin: Spot VAM prices fell to USD1,600/t. With three-months of inventory in
hand, margin benefits will be seen only towards the latter half of 3QFY23.
A. Capacity expansion: Sitapur and Rampur projects are proceeding as per the
timeline. Its Sitapur facility will be commercialized by 1QFY24.
B. Margin should return to historical levels of 15-16% on the back of backward
integration, premiumization, launch of luxury brands, etc.
C. Growth trajectory: The Prestige and above category should contribute 30-
Radico Khaitan
35%/~60% in volume/value terms over the next three years. Regular brands
should grow by 5-6%.
D. Others: Advertisement and promotion expenses should constitute 6-8% of
revenue in FY23. Exports currently constitute 5-6% of revenue, but will be in
double-digits in coming years.
Company Takeaway
BANK AND INSURANCE
A. On its merger with HDFC: The management is confident of securing approvals
to raise its stake in HDFCLIFE in the absence of which a proper glide path to
move towards 30% will be available. With HDFCLIFE, it will continue to have an
open architecture, but the relationship will be stronger, with better product
management.
B. The management is planning to add 3,000-4,000 branches over the next two-to-
three years. Its focus is on improving its branch density (11 branches per 0.1m
people). Branches add brand value and thus are important for customer addition.
C. Customer experience is an important area where the management wants to
HDFC Bank significantly add value. The focus is on providing better standards as it is an
area, where there is scope for improvement.
D. Digital play for customer servicing and cross-sell are important in current times,
especially with new digital investments being undertaken. Customer
engagement is likely to deepen with a focus on these areas.
E. The management believes that there is enough growth available for all Banks to
do well going forward, and sounded positive on the growth outlook.
F. In cycles, where the credit loss is high, attention gets diverted to operating
profit. The bank believes that it is more important to look at overall profitability
than its pricing model.
September 2022 27
18th AGIC 2022
Company Takeaway
G. The bank added ~12,000 employees in 1QFY23 and will continue to boost its
employee strength. Overall, it takes six-to-nine months to turn productive.
A. The management is focusing on risk-calibrated growth in its operating profit.

B. The bank is well-placed to grow across segments, which match with its overall
strategy, and is not chasing any particular growth target. The focus will be on
such customers and segments that meet the risk parameters of the bank.
C. The bank has first utilized the excess liquidity. In coming quarters, the effort will
be on higher deposit mobilization.
D. Its asset quality parameters are under control, with the bank is carrying healthy
ICICI Bank contingent provisions to take care of any shocks.
E. NIM is likely to remain stable in the medium term as the cost of deposits will
increase gradually. However, margin may see some expansion in the near term.
F. Tech spends will continue to grow at a faster pace than overall OPEX.
G. Tie-up with Amazon: Its customer acquisition cost is very low. The management
prefers to look at customer profitability, rather than product profitability.
H. Attrition is a challenge for the industry, and the bank is trying to adapt to the
changing external environment.
A. The management expects traction in the Retail loan momentum to continue,

with a growth of 25-30% YoY over the next few years. Thus, the overall loan
growth will be more than 20% as the legacy book continues to run down.
B. Despite a reduction in Savings Account’s interest rates, the bank is growing its
deposit base as customer perception with regard to the bank remains strong,
along with its good service quality. Growth in deposits will be strong enough to
replace its high-cost borrowings as well as fund its future growth requirements.
C. The cost-to-income ratio remains elevated as it is an early stage bank, and thus
needs to make significant investments in expanding its branch network, in
widening its product offerings, and boosting its technological capabilities.
IDFC First Bank D. Margin is likely to remain steady ~6%, aided by improving asset mix and
replacement of high-cost borrowings (INR230b at 8.8%) with deposits (current
cost ~5.5%).
E. The management does not expect any negative or a one-off surprise in its asset
quality performance as it has completely addressed the legacy issues. While its
endeavor is to do better, the management continues to guide at a credit cost of
1.5%.
F. It expects significant improvement in profitability from current levels, led by a
moderation in cost ratios, replacement of high-cost borrowings, and lower
credit cost. Operating leverage will allow the bank to deliver extremely strong
return ratios. It aims to have a RoA of 2% and RoE of more than 15%.
A. Macro: The Gems and Jewelry business is expected to touch ~USD100b by FY25
from USD39b in FY22. The Home loan market is likely to touch INR48t by FY26
form INR24t at present. Total demand in the MSME segment stands at INR45t,
of which outstanding credit stands at INR15t. Unmet demand stands at INR20t.
IndusInd Bank
B. The next three-to-five are going to be very strong for the Vehicle Finance
segment, which is well-poised for growth, led by consumption and capex
demand. IIB expects CE volumes to clock 12-14% CAGR over FY22-30, and sees
significant opportunities in growing the Rural and Gems and Jewelry business.
September 2022 28
18th AGIC 2022
Company Takeaway
C. Growth in Consumer loans is likely to remain healthy, led by Home loans, which
are a key focus area. The bank is aiming to grow this book to INR150-200b over
FY25-26. It has further realigned growth in Corporate underwriting with its past
learnings and is well poised to grow.
D. The bank has improved its liability franchise, with a higher focus on garnering
Retail deposits. Over the past two years, the mix of Retail deposits rose to 41%
v/s 31% in Mar’20, while the LCR ratio too stood healthy.
E. Asset quality ratios for the bank have improved significantly over the past few
quarters, which resulted in a sustained decline in credit cost. As a result,
profitability improved significantly, with the bank reporting a RoA of 1.7% in
1QFY23. The management expects the improvement in RoA to continue on a
steady basis going forward.
F. Targets from its Planning Cycle – VI strategy: The management is targeting a
Retail deposits mix of 45-50%. Overall, it is targeting a loan CAGR over its
Planning Cycle – V strategy (double in three years), with Retail constituting 60%.
We expect a CASA ratio of 45%, PPOP-to-loan ratio of over 5.5% over FY23-26,
branch count of over 3k, and a customer base of over 50m.
A. Growth: The management said that things on the ground are very positive, with
the combination of growth in both Secured and Unsecured assets playing out
well. It is looking to grow at 1.5-2x of nominal GDP growth.
B. Overall, the highest growth was witnessed by the Consumer segment, followed
by the Commercial segment and Wholesale. On an absolute basis, Home loans
will continue to remain the biggest lending segment.
C. NIMs have improved considerably, and are likely to remain resilient. Growth in
Savings Account deposits has been under pressure as the bank has reduced its
interest rate v/s its peers.
Kotak Mahindra Bank
D. The C/I ratio is currently elevated due to push for growth. DSA payments are
paid up front, which also drive higher expenses. Technology investments remain
high, with the C/I ratio remaining elevated in both FY23 and FY24.
E. Excess capital: The last time around it raised capital was due to the COVID-19
pandemic. Its current five-year targets are more aggressive than that in the
past. However, the bank has undertaken smaller portfolio acquisitions.
F. M&A: Its customer base remains the key determinant for any acquisition. Its
branch network was a key determinant at the time of its merger with ING Vysya
Bank.
A. Post-paid: Average monthly spends stood ~INR4,000, with an average ticket size
of INR600. PAYTM’s primary focus is on customers who carry out small ticket
transactions of up to seven-to-eight per month. Credit cost in post-paid loans is
less than 1%.
B. The total take rate stands at 3%, within which half would be convenience fees
and balance half is divided between late fees and MDR. After the collection cost
and other OPEX, the company earns a contribution margin of 20-30%.
One97 Communications
C. Average ticket size in Personal loans stands at INR0.1m, while the same stands
at INR0.14m for merchant loans. The rejection rate stands at 60-80% for those
beginning their loan journey. However, this rate is affected by incomplete
documentation and processes.
D. PAYTM has ~13m merchants and ~3.5m Credit Cards on its platform.
E. Gross credit losses stand at 4-4.5% for Personal loans, 5-5.5% of Merchant
loans, and 1.1-1.3% of post-paid loans.
September 2022 29
18th AGIC 2022
Company Takeaway
F. Its bank partners are HDFCB, SBIN, and Citi. Its NBFC partners are PIEL, ABCAP,
and Fullerton. PAYTM is looking to add two-to-three more partners with a
higher focus on its wallet share.
G. Half of the post-paid loans will get paid in one month, while the tenure for the
its other two products is about a year. Post-paid loans are being availed by 4%
of customers (with the market pegged at 30-50%), Personal loans by 0.5%, and
device merchant at 4%.
H. Profitability remains in sight. With an improvement in volumes, the company is
likely to be there in a few years. Lending will be the biggest contributor of that.
A. The new IRDAI Chairman has set the ball rolling on many aspects, including
increasing growth and penetration in the industry.
B. The management said the challenges of running a Health Insurance business are
very different from that of Life Insurance. However, it is willing to undertake this
business as and when the regulator approves. The opportunity remains huge,
with less than 1% penetration and 70% OPE.
C. The company saw a fairly steady rise in its average ticket size, given the recent
product launches such as Sanchay Plus.
D. Distribution is being continuously expanded, with the addition of new bank
HDFC Life Insurance
partners. It believes penetration in HDFCB will improve on completion of the
merger.
E. As it is of the view that an open architecture will be good for its customers,
HDFCB will stick with it. Overall, HDFCLIFE has a 60% wallet share, with HDFCB
being the largest, followed by TATA and Birla Life.
F. The management is hopeful of sustaining the momentum in agent addition,
which is being seen in recent months. A wider product base and a stronger
brand will aid Exide Life’s distribution, and thus aid higher growth. The agency
business is delivering higher profitability than that at the company-level.
A. Growth momentum picked up from Sep’22 as SBILIFE completed its promotions

and transfers after FY22. Incremental growth is likely to be 60%/40% from
ULIP/Traditional policies. The mix of Non-PAR is unlikely to moderate from
hereon.
B. SBILIFE is growing at 26-27%, even at its current base, while the agency channel
is performing well. It expects to grow by 27-28% in FY23.
C. Growth in APE is likely to remain at 20-25% over the next three-to-five years,
while growth for the industry will be 15-16%.
D. VNB growth is likely to be more than 30% in FY23. Margin is likely to remain
SBI Life Insurance between 28.5% and 30%.
E. Growth in Individual Protection is likely to recover in coming months, whereas
the Group business continues to perform well. Around 85% of the Protection
business consists of Return of Premium policies.
F. The pressure from Reinsurance hasn’t been much. SBILIFE didn’t really increase
Protection pricing after the Reinsurance price hikes. It retains risk up to
INR2.5m, irrespective of the sum assured, with an average sum assured of
INR5.5-6.5m.
G. The cost-to-income ratio is likely to remain under control. SBILIFE is seeing
multiple levers to control costs and maintain its overall dominance.
September 2022 30
18th AGIC 2022
Company Takeaway
NBFCs
A. JV with OPEN: The target is to grow the loan book under the JV to INR15-20b
over the next few years and an accretion to RoA in FY23.
B. Co-lending and co-origination: Co-lending is undertaken based on the bank’s
underwriting policies. IIFL does not provide first-loss protection (FLDG) under
the co-lending arrangement, while asset quality risks are pari-passu. The co-
lending constitutes ~7% of the consolidated book (INR38b). The management
is looking to add more co-lending partners.
IIFL Finance
C. Gold loans: Growth in this segment will depend on Gold loan prices. Intense
competition has led to a decline in NIM, with interest rates on Gold loans
plateauing. IIFL partnered with GPay for Gold loans, but over 90% of Gold
lending is still being undertaken by its own employees.
D. Cost of funds: Proceeds from ADIA should help improve its credit rating, which
can result in a 70-80bp reduction in the cost of its borrowings and can give IIFL
a higher bargaining power even in assignment and securitization transactions.
A. Demand: Healthy demand momentum was seen across the Vehicle Finance
space, especially among LCVs and small transporters. The company has
expanded its focus on new products like HFCs by leveraging its existing
customer base and technological capabilities.
B. Robust liability management: IKFFI has maintained strong relationships with
marquee lenders, with around half of such relationships being over a decade
old. The management’s focus is on long-term, low-cost borrowing, with 83% of
the borrowing mix in the form of term loans and ~47% financed by PSUs as
on1QFY23.
IKF Finance
C. Leveraging tech to improve asset quality: IKFFI extensively employs and
leverages technology to grow its loan book in a risk-adjusted manner.
Realignment of credit filters and LTVs, in line with market dynamics, has
resulted in a significant improvement in asset quality. Consolidated GNPA
stands at 2.7%, with Vehicle/Housing Finance GNPA at 2.7%/sub-1%.
D. AUM mix: As of 1QFY23, consolidated AUM stood at INR22.3b, with Home
Finance forming 21% of AUM (INR4.8b) and Vehicle Finance and Secured SME
constituting 79% of AUM (INR16.5b/INR1.5b for the Vehicle Finance/Secured
SME book).
A. Demand outlook: Strong macro tailwinds point towards a sustained and robust
demand outlook in the Housing Finance industry, especially in the Self-
employed customer segment in Tier II and III cities. The management expects
to grow its Retail loan book to 67% of the loan mix by FY27.
B. Stress in the Wholesale book: The management said it is difficult to quantify
the amount of stress in the Wholesale book, but the intent is to recognize,
provide, and sell-down or monetize its stressed Wholesale exposures by
Mar’23. Three pockets of opportunity, which can be utilized and can aid in
Piramal Enterprises
stress recognition without adversely impacting its net worth, are: a) recoveries
from POCI book; b) DTA of ~INR62b, and c) DTL of ~INR34b.
C. Growth strategy: The management aims to scale up the business, while
maintaining healthy asset quality. It plans to: a) offer a diversified mix of Retail
products; b) run-down the Wholesale book and then grow it gradually, and c)
create an underwriting approach, with a combination of high-touch and high-
tech.
D. Investments in the Shriram Group: The management maintained that it is no
September 2022 31
18th AGIC 2022
Company Takeaway
longer a strategic investment. It plans to exit its investment in Shriram Group in
FY23 without any knee-jerk actions. The capital will be deployed for: a) growth
of the loan book, b) M&A opportunities in both lending as well as non-lending,
and c) returning of the excess capital to shareholders in a tax-efficient way.
A. Merger update: Nearly 1,250 branches have started cross-selling, or are on the
verge of undertaking the same in Gold loans, 2W loans, and loans for
LCVs/SCVs. SHTF has completed 75-80% of the integration for the merger. The
management expects NCLT’s approval in the last week of Sep’22 or the first
week of Oct’22. The merger process is expected to be completed by mid-
Nov’22.
B. Normalization in the levels of excess liquidity: Liquidity has fallen by ~INR20b
Shriram Transport Finance the past one month. The plan is to pare down liquidity to INR13-14b by Oct’22,
Company and the target is to maintain liquidity of 4-4.5 months going forward.
C. Guidance: The management endeavors to double AUM of the merged entity
within five years. It does not foresee deterioration in asset quality and expects
credit costs of 2%/3-3.5% in SHTF/SCUF (2.5-2.7% for the combined entity).
D. Margin: CoF are not expected to rise in 2QFY23. The management expects
credit ratings to improve over the next 12-18 months, which could help the
company borrow at lower cost. It does not expect a significant decline (or
change) in margin in 2QFY23.
Company Takeaway
Healthcare
A. Insurance-led demand: Given an increased shift towards Health Insurance, the
Hospital sector is witnessing a further increase in demand as patients are
inclined towards better treatment as well as service.
B. Medical value tourism – another demand driver: Given the reasonably good
quality of Healthcare services and the availability of lower-priced treatments in
India as compared to developed countries, the management expects an influx
of patients from abroad.
Max Healthcare Institute
C. The limited impact of new entrants: While there have been significant bed
additions by certain companies (like Amrita Hospitals), the location of the
Hospital (Faridabad) and its customer profile (relatively lower ARPOB) will have
a minimal impact on MAXHEALT’s business.
D. To further strengthen margin: With a superior payor profile and case mix,
aided by strong cost efficiency, profitability is expected to improve going
forward.
A. Product portfolio to aid growth in the CDMO segment: Piramal Pharma’s

CDMO business has a robust pipeline with 172 molecules spread across three
phases of clinical development. With 46% of development revenue derived
from Phase III molecules, it offers robust visibility for healthy growth over the
next three-to-five years. In the CDMO business, the company generates
Piramal Pharma USD60m from products currently under patent.
B. Margin profile to improve over the medium term: EBITDA margin is under
pressure due to COVID-led supply disruption and considerable attrition. The
management has resolved the attrition-related issue considerably, which will
improve sales and profitability. It intends to attain 25% margin within the next
five years.
September 2022 32
18th AGIC 2022
Company Takeaway
C. Planned capex to aid growth: The company has planned a total capex of
USD150-200m over the next two years.
D. Levers in place for superior growth in Complex Hospital Generics: Niche
launches, increased market share in existing products, and vertical integration
has the potential to drive 10-15% sales CAGR in the Complex Hospital Generics
segment.
A. Focusing on regulated markets for better growth prospects: Given its

consistency in service and supply of products, SUPRIYA aims to increase its
market share in core molecules in regulated markets. The management sees
scope for a further improvement in its revenue share from 52-55% at present.
B. Capacity expansion: It is constructing two R&D facilities and two manufacturing
blocks to ease capacity constraints. One R&D facility and a manufacturing block
are coming up in Ambernath. An 80,000sq. m. land parcel is available at Isambe
Supriya Lifescience
(Patalganga) and is being explored for mid- to large-sized products.
C. R&D cost to inch up: R&D cost for SUPRIYA is currently lower (at 0.3%) as
spends are focused on the product lifecycle management. Costs are expected
to inch-up as the company is adding two R&D centers.
D. Expect margin to sustain: The higher share of regulated markets and cost
advantages, as it manufactures in India, is expected to sustain its superior
margin.
A. USFDA inspection key to a better US Generics business: The management is

awaiting inspection of its facilities from the USFDA, even as it continues to file
ANDAs. TRP currently has 60 ANDAs pending approval and will be filing 8-10
ANDAs annually.
B. Price erosion in the US trending lower: Price erosion in TRP’s US business is
currently in the mid-teens, down from its historical high of 20% in 3QFY22, but
Torrent Pharma
is yet to normalize at 8-9%.
C. MR addition to aid growth in Domestic Formulation: TRP has added 600 MRs
in the domestic business.
D. To recalibrate its therapy focus in Domestic Formulation: To strengthen its
presence in core therapies, TRP is expanding its focus on Diabetes,
Dermatology, and Gynecology.
Company Takeaway
INFRASTRUCTURE
A. Bid pipeline and order flow: The bid pipeline remains strong, and the
management expects awarding to remain strong over the next few years. The
National Infrastructure Pipeline envisages significant spends on the Road
sector. However, near-term ordering from NHAI may be weak. In value terms, it
expects a 30% YoY decline in awarding by NHAI in FY23. IRB expects new order
inflows of INR50-70b in FY23.
B. Project type: The management expects several projects to be awarded in BOT
IRB Infrastructure Developers
toll mode. As there will be fewer players bidding under that mode, IRB could
bag some projects in FY23. Its focus is on BOT toll, followed by HAM projects.
C. Asset monetization: The management has been focusing on asset monetization
and recently transferred a HAM project to public InvIT. Going forward, BOT toll
projects will be transferred to private trust and HAM projects to public InvIT.
D. The execution pace has picked up well and the momentum is likely to continue.
E. The competitive intensity is expected to reduce with reduction in NHAI’s
September 2022 33
18th AGIC 2022
Company Takeaway
contribution in HAM projects to 20% from 40%.
F. Toll collections have been picking up at the industry level and the momentum
is expected to continue.
G. Issues in acquiring stressed projects: When a physical survey is conducted, the
physical progress is much lower than that claimed. Hence, it is difficult to
acquire such projects.
H. Outlook: IRB’s EPC order book is strong and provides 24-30 months of visibility.
The management expects execution to remain strong going forward, with a
reduction in input costs. It expects margin to stabilize ahead. The management
said it will focus on BOT toll and HAM projects and won’t bid for EPC projects.
Company Takeaway
METALS & MINING
A. Demand: As GODPI sells pellets with low alumina content, which is most sought
after by steel makers, demand is not an issue. However, overall demand for
pellets is weak on account of several reasons.
B. Exports and export duty: Exports were ~50% of total sales previously. At
present, the company does not export any pellets due to the imposition of
export duty of 45%. There is no clarity yet on the change in the status of export
duty on pellets.
C. Capex and debt: GODPI is carrying working capital debt on its books and has no
Godawari Power & Ispat
long-term debt. It has lined up a capex of INR11b, which will be funded
internally. The management expects enough FCF generation to fund its capex
plans, despite compression in margin after the imposition of export duty.
D. Industry outlook: The margin outlook on long-steel products are currently
weak due to high coal prices. The margin in the DRI business, based on bought
out RM, is close to INR1,000/t, while that on pellet is almost nil. As long as
input prices remain high, the management expects margins in DRI/secondary
TMT to remain constrained.
A. Demand: The aluminum market is likely to remain in deficit of ~1mt in CY22. In

Europe, ~900kt of aluminum smelting capacity has been already shut and an
additional 700-800kt is likely to be shut soon. Since aluminum demand in China
is also down, the closure of capacities in Europe has not led to an improvement
in LME prices.
B. Capex: The company has lined up a capex of USD8b. Of this, it has committed
USD5b in Novelis, on which work is ongoing. The same for India stands at
USD3b, of which USD2b is towards the downstream aluminum business, which
will de-risk the upstream business from LME price fluctuations to a certain
extent. The balance capex in India is for expansion of the aluminum smelter,
Hindalco Industries
which is dependent on factors like availability of renewable power on which the
smelter project is techno-economically viable. Without this, it won’t proceed
with the smelter capex.
C. Aluminum demand in India stands ~4mt, of which ~2mt is imported. The
management sees a significant growth potential in the domestic market, given
the low per capita consumption and rising demand in the medium term.
D. Costs: The management expects costs in 2QFY23 to increase by ~35% over
4QFY22 levels. Costs were 19% higher QoQ in 1QFY23. However, the same was
not reflected due to the consumption of low-cost inventory. With the same
behind it, costs are likely to rise 35% from 4QFY22 levels.
September 2022 34
18th AGIC 2022
Company Takeaway
E. Domestic coal mines: HNDL expects operations at the Chakla coal mine to start
from Dec’23, with peak rated output at 4mt. It expects to ramp up output in
the first year by 35-40%. Operations at its Meenakshi coal mine are likely to
begin in Dec’27.
F. Power costs in Europe: Since HNDL has hedged 75%/~60% of its power cost in
Europe for CY22/CY23, it remains impacted for the balance power being
purchased.
G. Secondary aluminum demand: While the demand for cans has been somewhat
weak, Auto demand remains strong. Production lines for the can sheets and
Automotive sheets are fungible, and the management has the flexibility to
swap production at these lines as per demand.
A. Demand: Normalcy in demand is returning. Customers are now locking in
greater quantities on expectations of a price hike. Sales in Aug’22 are likely to
be better than that in Jul’22. The same for Sep’22 also appears good.
B. Export duty: The management is unsure on the timelines and the modalities of
the recall in export duty in the near term, if any. But it expects exports to pick
up from the current 10-15% (of total sales volume). The same can return to
25%, if the export duty is recalled.
Jindal Steel & Power
C. Long-term capacity expansion: While JSP has plans to expand to 15.9mt under
its existing plans, it aspires to reach a capacity of 25mt in the medium-term,
given the economic growth and consequent demand for steel in India in the
long term.
D. Thermal coal: The company has four thermal coal mines, which it has bagged in
the recent auctions. It expects these to be operational from FY24, which will
reduce costs and increase its self-sufficiency in a major raw material.
A. Demand: Domestic consumption has been resilient. The management expects

sales in 2Q to be higher than 1QFY23 levels. JSTL exports a mix of value add,
semis, and alloy steel. Semis and alloy steel currently remain out of the purview
of the export duty.
B. Exports and export duty: Europe was the biggest market for JSTL. Demand in
its export markets, including Europe, remains weak. The management expects
the share of exports in 2Q to be lower than 1QFY23 levels. There is no progress
on the recall of export duty so far. JSTL is of the view that export duty will be
adjusted in the near term, but said it is difficult to guess the exact time for the
JSW Steel
same.
C. Input cost pressures: Coking coal cost is likely to come off by USD50-60/t in
2QFY23, which should ease some pressure on the cost side. While JSTL
continues to incur higher costs on the iron ore from its own mines, given the
high premium, it is likely to have an assured supply of ore whenever it needs
additional ore. This also improves the techno-economics of its steel making
facility.
D. Expansion– 5mt expansion at Vijayanagar will be commissioned as per the
previously announced timeline of end FY24 and there is no change to the same.
September 2022 35
18th AGIC 2022
Company Takeaway
Oil & Gas
A. The company has two facilities, one in Tarapur (Maharashtra) and the other at
the Kandla SEZ (Gujarat). Both plants have a combined capacity of 1m units. It
also has a plant in the US and two in Dubai. Capacities are fungible for the
company between CNG and Industrial.
B. Usage mix stands at 70%/30% for CNG/Industrial. In FY23, the mix changed as
demand for gas has reduced on the back of higher gas prices, which impacted
Everest Kanto Cylinder demand. Around 60% of the business currently accrues from the Industrial
business, with the balance from CNG. Margin has been impacted as the CV
business is soft right now.
C. Debottlenecking and brownfield expansion at Tarapur and Mundra are almost
complete. Both plants have a combined revenue potential of INR3b. EKCL is also
undertaking a greenfield project for increasing production of 200k cylinders at a
capex of INR450m. The initial phase is expected to be completed by 2QFY24.
A. A multi-prong effort is underway with respect to the force majeure declaration

on the supply of LNG to GAIL from GMTS (a Gazprom subsidiary). The
management said it won’t be wise to seek monetary compensation as it is a
commodity, and it would rather have GMTS honor the contract and supply it
LNG.
B. GAIL Gas is currently undertaking volumes of 6mmscmd, and has guided at a
volume growth of 10% YoY over the next two years. There are no IPO plans for
GAIL (India) GAIL Gas right now as the management sees softness in the CGD sector at
present. It expects a capex of INR12b in FY23 and INR13b each in FY24 and FY25
in GAIL Gas.
C. It is targeting an increase in domestic gas connections/CNG stations to
1.6m/570 by FY25 from 427,000/250 at present. Overall capex stood at
INR75b/INR80b for FY23/FY24. Three major pipelines are being set up by the
company, along with an expansion of the Petrochemical business. It guided at a
capex of INR300b over the next three years.
A. The management said it prefers the government takes a share of profit through
the dividend route, but does not want any interference in its revenue.
B. It is evaluating the option to merge MRPL and HPCL. OMPL and MRPL were
amalgamated recently and the management’s focus is on stabilizing operations.
Taxation issues have to be looked into, as also marketing margin, which has
ONGC
been currently impacted, will need to be factored in while considering the MRPL
and HPCL merger.
C. Average annual capex guidance for ONGC stands at INR300b, with an additional
INR100b to be spent annually on domestic E&P activity. Capex for OVL is
different, with an overall capex guidance of INR80b.
September 2022 36
18th AGIC 2022
Company Takeaway
Real Estate
A. The strong traction in Residential demand continues across segments and
geographies. While 2QFY23 may see some seasonal weakness on a QoQ basis
due to the monsoons and the inauspicious Śrāddha period, it will be better
than last year. The management may revisit its pre-sales guidance of INR115b
in 3QFY23. Over the next decade, it expects sales from the top seven cities to
increase to 1.0m units from 0.3m at present.
B. Cost and pricing: Despite all the inflation over the last 15 months, total costs
are up only 9%, which impacts margin by 3%. On an average, LODHA raised
prices by 6% in FY22, and followed it up with another 1.6-1.7% hike in 1QFY23.
It is targeting an 8% increase in prices in FY23 and an overall increase of 100-
200bp below the wage growth rate over the medium term.
C. Micro market strategy: A large part of the growth for LODHA is likely to accrue
Macrotech Developers
from taping under-penetrated micro-markets of Mumbai and Pune, with a
total addressable market (T AM) of INR900b. The company is targeting a 10%
market share in these markets over the next two-to-three years. Market share
gains in Bengaluru (INR600b TAM) are likely to be gradual. Its acquisition
strategy will be tilted towards JDAs over the next two years, with the mix
expected to reduce to 40-45% in a steady state.
D. 20-20-20 strategy: The management is looking at 20% CAGR in pre-sales over
the next four-to-five years. It aims to generate a 20% PAT margin and 20% RoE.
E. Leverage and the cost of debt: The company aims to reduce its net debt to
INR60b by the end of FY23 and reach its targeted 1x net debt-to-OCF ratio. It
aims to maintain leverage at similar levels to insure itself from any exigency in
the future. The cost of debt is expected to reduce to 9-9.5% by FY23 from 10%.
Company Takeaway
Retail
A. Capital allocation: Madura and the Innerwear segment remain self-
sustainable, while capital requirements in Pantaloons will be majorly driven by
the 70-80 store additions. The Innerwear segment will also be driven from
EBOs.
B. Focus is on expanding brands: The management is looking to expand its
Innerwear segment by opening up independent stores and taking its store
count to ~1,000 stores by FY26. It expects Tasva to achieve sales of INR4-5b
with a strong footprint addition. Innerwear segment which currently has a
Aditya Birla Fashion and Retail
runrate of INR6b, is expected to reach a revenue runrate of INR10b by FY26.
C. Margin profile: EBITDA margin (pre-Ind AS 116) for the Lifestyle segment is
expected to range between11-12%. The same for Pantaloons stands at 3.5%
and will increase to 8-10%. The Ethnic and Innerwear segments are expected
to garner a margin of 12-15%.
D. Scaling up of “Style-up” segment: The company plans to scale up this segment
in larger markets after witnessing lower productivity in smaller towns. Expects
to open 50-70 stores under this format in coming period.
September 2022 37
18th AGIC 2022
Company Takeaway
Technology
A. Demand remains strong and there is huge potential for growth over the next
three-to-five years. Banks are increasingly outsourcing their non-core work. As
transactions are also going up, there is a huge opportunity.
B. Apart from the liability side, Banks are also looking for outsourcing
BLS International Services opportunities on the asset side.
C. It operates a 100% franchise model and its Balance Sheet is asset-light. The
working capital requirement is low and cash generation is good.
D. The expansion in UK, US, and Australia geographies is also in the pipeline in
that particular order.
A. Demand: The company plans to add 8-9k paying subscribers per quarter. It is
seeing 30% growth rate for FY23 and should grow 35-38% going forward.
B. Margin: The management said that ARPU should see an improvement in FY23.
It doesn’t earn a profit from its silver monthly membership as servicing cost is
INR2,000-2,100. In the long-term, 20-25% growth in revenue, coupled with a
15% increase in cost, will aid margin.
IndiaMART InterMESH
C. The overall churn rate is 3-4% per month. While the monthly churn rate for
silver customers is ~6%, the same for annual silver and gold customers is 25%.
The annual churn rate for platinum customers is 8-9%.
D. Investee companies: The management expects an improvement in 12-18 months.
The companies gain through INMART’s customer base. It has been undertaking
cross-selling for Vyapar. ARPU for Vyapar is less than INR1,000 per month.
A. Demand: The management is seeing strong demand across the board in IT and
non-IT clients.
B. Advertising and promotion spends: The management is trying to cut down
Info Edge (India) A&P spends in Jeevansathi, while increasing A&P spends in 99acres. It expects
the burn rate to continue at both entities.
C. M&A: It is continuing to see deals in the pipeline for investments, acquisitions,
and tools.
A. Demand: The management is seeing strong demand across the board in IT and
non-IT clients.
B. Advertising and promotion spends: The management is trying to cut down
Mphasis A&P spends in Jeevansathi, while increasing A&P spends in 99acres. It expects
the burn rate to continue at both entities.
C. M&A: It is continuing to see deals in the pipeline for investments, acquisitions,
and tools.
A. Demand: The demand pipeline is good, and there is no elongation in the sales
cycle. It is facing some pressure on manufacturing, but none in Telecom and
BFSI. Retail is also looking good.
B. Margin: The management suggested that hiring is coming off. Sub-contracting
is the biggest margin lever and offshoring can also increase at a good pace. It
Tech Mahindra has plans to boost utilization. There can be some pressure on pricing if there is
a massive slowdown. Attrition is coming under control only due to wage hikes,
but natural attrition is still elevated.
C. M&A: The management is seeing no integration challenges in current
acquisitions. TECHM is planning to slow down on acquisitions and plans to
return 100% FCF if there are no acquisitions in FY23.
September 2022 38
18th AGIC 2022
Company Takeaway
MIDCAPS
A. Demand: There is a little softening in demand in the Leisure segment. However,
the business segment is performing extremely well. The management expects
weddings to accelerate demand in 2HFY23. Demand in Mumbai is significantly
driven by the Jio Convention Center, which is performing exceptionally well.
D. Rationalization of manpower cost is the biggest cost saver for the company,
falling to 18% 1QFY23 from 24% in 1QFY20. The management is targeting a
stable-state of staff per room target of 0.6-0.7 down from 0.96 in FY20.
Lemon Tree Hotels E. Shrinking inventory in the industry: Rooms listed on online platform ‘MakeMy
Trip’ shrunk to 1.19m in Aug’22 from 1.53m prior to the COVID-19 pandemic
(Jan-Feb’20), which indicates that inventory is shrinking in the unbranded
space.
F. Retail focus: The management wants to focus more on Retail as compared to
the Corporate segment as it can exercise additional control on pricing,
inventory, etc. Its current revenue contribution from the Retail segment is 44%
of total revenue.
A. Pharma packaging: A DMF certification is required for the manufacture of

Pharma export bottles, which may take an additional four-to-five months. The
DMF Pharma unit is expected to begin operations by Apr’23. MTEP is installing
a capacity of 1,500-2,000mtpa in OTC Pharma packaging, which will be
expanded to 3,000mtpa by Apr’23. This will contribute 8-10% of total revenue.
B. Current installed capacity stands ~45,000mtpa. Capacity utilization stood ~80%
in 1QFY23. A lot of capacity is fungible and can be used across different
segments.
Mold-Tek Packaging
C. Capex: The management expects to incur INR1.25b on capex in FY23 to create
additional capacity, taking its total capacity to ~56,000mtpa. It is doubling its
IML label making capacity and is setting up three new greenfield projects for its
clients. A similar level of capex is expected in FY24, taking total capacity to
~70,000mtpa.
D. Sustainability: The management is focusing on increasing the share of
recyclable plastics in its processes. It is also working on plant-based products,
based on open technology from DRDO scientists.
A. Demand was tepid due to destocking of inventory in the channel. The

management is seeing some inventory normalization in the channel. The
management expects capacity utilization and growth to rebound going forward.
B. CPVC prices have not corrected much of late and is stable at INR190-200/kg,
while PVC prices are ~INR90/kg. PVC has a much wider application range, while
CPVC has a much lower application range such as cold and hot water. The
company has 20-25% of revenue share in CPVC. The industry is facing a short
supply in CPVC, which is creating a demand for the company’s FlowGaurd
Prince Pipes & Fittings brand.
C. Focus on B2B segment: The company’s business model is largely B2C based. It
has 1,500 channel partners across India. In terms of the B2B segment, it is
lacking behind its peer, with the B2B segment contributing ~20% to total
revenue v/s 40% for its peers. The management is strongly focused on growing
its B2B model.
G. New segments: The company recently entered into the underground drainage
segment. It is looking forward to invest in new segments, which have a better
margin profile.
September 2022 39
18th AGIC 2022
Company Takeaway
A. Capex: The company is setting up two plants in Madhya Pradesh (Jabalpur) and
Rajasthan (Kota), which are some of the growing markets for the sector. Apart
from these, the company is adding brownfield capacity across 8-10 existing
plants. It is targeting an overall capacity increase of 25-30% over the next few
months (only for the Carbonated business).
B. Sting: Considering the company’s profitability, INR20 is a good price for the
product. Sting is placed in a highly profitable segment. The management said it
Varun Beverages will not reduce the price point from current levels. It believes the price of Red
Bull (competition) is high due to the customs duty.
C. Tropicana: The management has a strong focus on its Tropicana brand. Earlier,
Tropicana had a reach of only 50,000 outlets, which has now increased to
300,000-400,000 outlets. The company has a pan-India right for Tropicana.
D. Industry growth: Overall, the Beverage industry will grow at a good pace, as
per the management. The growth is further accelerated by the launch of newer
products in the segment.
September 2022 40
18th AGIC 2022
AGIC MANAGEMENT SAYS: Day 2
Company Takeaway
AUTOMOBILES
A. Demand: Some parts of Uttar Pradesh and Bihar were affected by deficient
rainfall. But overall rainfall has been normal for the fourth consecutive year.
Ganesh Chaturthi and Onam sales have been positive. The management
expects a YoY growth this festive season and will be aggressive in providing
attractive financing schemes. Inventory at the dealer level stands at seven
weeks, and the management wants to raise it to 10 weeks. At the end of the
festive season, inventory at the dealer level should be at four weeks.
B. There is a sticker shock due to a 40% increase in prices. However, affordability
isn’t impacted as out of pocket spends is similar due to financing. The sticker
Hero MotoCorp
shock will take time to be accepted by customers, and has impacted
replacement demand. Financing is now at 52-55% (v/s 35% a few years back).
C. Overall, margin is up to 14-16%, driven by premiumization (Xtec), model mix,
commodity cost, and operating leverage. XTEC variants are 40-50% of Glamor
volumes and 20-30% of Splendor/Passion volumes. XTEC variants earn a higher
price (3-4%) and margin. It expects the share of Premium (to 10% from 5-6%)
and export volumes to rise in three years.
D. EVs: It is expected to soon begin deliveries of Scooters with a fixed battery,
and with a swappable battery next year. It is targeting the mass market.
A. Its Chennai plant is on track to begin operations by Mar’23, with a capacity of

60k tonne and a full ramp-up expected in three years. At full ramp-up, the
Chennai plant can deliver a revenue of ~INR6b (at current pricing). Of the total
capex of INR3b, it is investing INR2b initially and will invest the balance
subsequently. This plant enjoys a PLI incentive of 8% of incremental sales.
B. Its exports from India are currently minuscule, given its limited capacity. It exports
40% of its total production from Thailand to Sri Lanka, Indonesia, the EU, Vietnam,
Rajratan Global Wire and the US. It aims to export greater volumes from its Chennai plant.
C. Europe: Demand was impacted, but the impact on the supply-side was greater
as certain supplies from Russia have stopped. It is working hard to profit from
this opportunity.
D. Tyre chords: As 70% of tyre chords is currently imported, customers are
beseeching RGW to enter this space. Since it involves a complex
manufacturing process, it has been scouting for partners in China and Europe,
but the same did not fructify.
A. Business mix: It derives 60%/40% of its revenue from bearing rings/Auto

components. It supplies rings to major bearing makers like SKF, TMKN, and
SCHFL and has ~700SKUs. ROLEXRIN is 8-10x bigger than its nearest
competitor in bearing rings. It is targeting a revenue of INR17-18b (v/s INR10b
in FY22) over the next three-to-four years, keeping the mix same.
B. Export margins are better than that for the domestic business. Its current
Rolex Rings export-to-domestic mix stands at 65:35. US constitutes 55-60% of exports.
There is some slowdown in exports due to weakness in the European market.
C. EVs: The number of bearings in EVs will be six-to-eight v/s 16-18 in an ICE
vehicle, but the value would be similar. Margin in EVs stand ~27% (v/s 14-15%
in traditional bearings).
D. Capex: It will incur an annual capex of INR200-250m per year, including a
maintenance capex of INR50m.
September 2022 41
18th AGIC 2022
Company Takeaway
A. It expects to clock 25% CAGR, led by: a) an underlying industry recovery, b)

increase in premiumization and a focus on aesthetics, and c) content increase
(e.g. supply of dials to lens mask assembly, chrome plating, etc.).
B. It aims to maintain blended margin (including Exotech) at 25-27%, with a
standalone margin of 30% and Chrome Plating (Exotech) margin at 15%.
C. In the Chrome Plating business, it is investing INR1b to expand capacity, which
SJS India
can support a revenue of up to ~INR3b (v/s ~INR1b in FY22).
D. Exports currently stand at 13% of total revenue (17% excluding Exotech). It
aims to increase the same to 25%.
E. SJS plans to appoint a CEO who can manage the existing businesses, while Mr.
Joseph K A (the founder and MD) and Mr. Sanjay Thapar (ED and CEO) will look
at future growth drivers, technology, new segments, etc.
Company Takeaway
CEMENT
A. Demand and pricing: Demand was weak in Jul’22 and Aug’22 on YoY basis;
however, witnessed strong rebound in Sep’22. Profitability in 2QFY23 will be
the lowest due to the full impact of higher fuel prices and a weak pricing.
Profitability should improve from 3QFY23, benefitting from price hikes with
improvement in demand and lower fuel prices (petcoke prices to correct to
USD170/t).
B. Focusing on AFR and green energy: JK Cement is focusing to increase the
share of alternative fuel and invested about INR1b towards the same. Thermal
substitution rate stood at ~9% and green energy share in total power
consumption stood at ~38-40% currently.
JK Cement C. Capacity expansion: Panna expansion (4mtpa) is at an advanced stage and is
likely to be commissioned in the next three months. Post this it aims to add
6mtpa grinding capacity (4mtpa Greenfield expansion in central India and
2mtpa through debottlenecking at various plants). It aims to reach at
25mtpa/30mtpa by CY25/CY30 v/s current capacity of 15mtpa in grey cement.
D. Capex guidance: For 6mtpa grinding capacity, it has guided for capex of
INR12b (major portion is for Greenfield expansion and residual for
debottlenecking). Further, it has guided for a capex of INR3b annually for
sustenance and efficiency, and INR6b towards the Paints business. The
company’s peak net-debt is estimated at INR35b v/s INR26.2b as of end-
Jun’22.
A. Demand and pricing: Demand in northeast is healthy driven by increased infra

spending and pick-up in retail & IHB demand. Management expects northeast
to register higher demand growth of ~10% v/s ~8% for the industry in FY23.
Cement price has improved in its key markets and management expects
further price hikes in coming months.
B. Cost efficiency plans: It is setting up 12MW of WHRS at its existing Meghalaya
Star Cement plant, which will meet ~50% of its power requirement for this plant. It is
improving rail connectivity to optimize logistics costs. Currently, its railway
siding network stands at three and the company has planned to install railway
siding at Greenfield GU expansion in Assam.
C. Capacity expansion: It is setting up a: a) clinker capacity of 3mtpa at
Meghalaya (brownfield expansion) along with 12MW of WHRS; and b) GU in
Guwahati, Assam with 2mtpa capacity (brownfield expansion) and c) GU in
September 2022 42
18th AGIC 2022
Company Takeaway
Silchar, Assam with 1mtpa capacity along with railway siding (Greenfield
expansion). Silchar GU will help it expand reach in other parts of Northeast
such as Mizoram, Manipur and Tripura.
D. Capex guidance: Estimated capex for these expansions is INR20-21b to be
spent over the next five years. Currently, it has a net cash balance of INR8b
and is likely to generate a CFO of INR10b over the next two years. It would
raise debt of about INR5b, which will be paid as soon as plants get
commissioned. Hence, it does not leverage the balance sheet much.
A. Demand and pricing: Management expects volume growth of ~15% YoY in

FY23. Volume share of East India in overall volume increased to ~30% v/s
~20% in 4QFY22. Cement price largely remained flat in South India on a
sequential basis.
B. Focus to increase premium product share: Premium products’ share stood at
~25% and the company targets to increase the share upto 30% of total
volumes. Its trade sale stood at ~70% currently.
C. Expects power and fuel costs to be largely flat sequentially in 2QFY23, as it is
The Ramco Cements
carrying coal inventory of four months. Benefit of reduction in fuel price to
reflect from 3QFY23 onwards.
D. Capex guidance: In FY23E, total capex would be of INR8.5b including
maintenance capex of INR1.3b (spent INR4.8b in 1QFY23). Capex in FY24E/25E
will be at INR5-6b each. At Kurnool, clinker production has started and
grinding is likely to be commissioned by mid-Oct’22. Management expects
commercial dispatches to start from mid-Oct’22. Modernization of RR Nagar is
estimated to complete by Mar’23.
Company Takeaway
CHEMICALS-SPECIALTY
A. There is supply disruption in Turkey and Europe overall because of higher gas
prices that is making it difficult for GHCL to export its products. The company
used to export ~1.5mmtpa, which is now seen to be softening. However,
China’s demand is in a downward trend and so that part will be fed by Chinese
exports; thus offsetting some of the demand disruption seen. The company is
not seeing a major volume coming in from the US in this part of the world.
B. GHCL exited from the home textile business in Mar’22 but is still in the yarn
business. The vision of the management is to take the spindle capacity to
220ktpa and in the next five years it plans to scale it to 300ktpa.
GHCL C. Earlier the company was selling yarn as a commodity. However, in the last
three years, GHCL is selling this to strategic customers and of high quality. The
company buys high quality of cotton and also keeps an understanding of the
cotton production to gauge when to buy cotton. Currently, cotton prices are
INR70-75K/ crop. GHCL procures cotton only from a few selected suppliers to
maintain quality.
D. GHCL has 26% market share in soda ash. It is the largest player in India and
also the one with the highest margin. India still has a high amount of soda ash
imports because no one has really expanded their capacities. In the last 15
years, the Soda ash prices have only fallen twice.
September 2022 43
18th AGIC 2022
Company Takeaway
CONSUMER
A. Standardization: BARBEQUE has standardized the ingredients that it uses, but
had to tweak the taste of the dish region-wise as the taste expectations of
Indians vary across each state.
B. Capex: It aims to open ~40/45-50 stores in FY23/FY24. Per store capex stands
Barbeque Nation Hospitality ~INR27m. Capex for FY23 will be ~INR1.5b including maintenance capex.
C. Others: i) Apart from the newly opened stores, 4-5% of stores are currently
incurring losses. ii) Steady-state SSSG should be 5-6%. iii) Dependence on Chef
exists materially, but fell significantly on a relative basis over the last five
years.
A. Business structure: PATANJAL is currently a more diversified entity v/s two

years ago (erstwhile Ruchi Soya). The management is trying to ramp up its
salience on the branded FMCG business, which earns an EBITDA margin of
~15%.
B. Distribution: At present, PATANJAL has a direct distribution reach of 1m
outlets and a total reach of 3m outlets. The management plans to raise this
further by looking to secure its presence in towns with a population of over
20,000.
Patanjali Foods
C. Plantation business: The company will invest ~INR15b over the next five
years in its Palm Oil Plantation business to increase the area under coverage
to over 500k hectares over the next five years from 50k hectares at present.
Under the National Mission on Oilseeds and Oil Palm, a substantial part of the
capex incurred by the company will be reimbursed by the government.
D. Rural demand is beginning to show early signs of a recovery. The
management is confident that demand will improve significantly after the
harvesting of the Kharif crop.
A. Demand environment: The second quarter is seasonally weak for SAPPHIRE,

particularly KFC, owing to lower consumption of non-vegetarian food during
various religious occasions. However, the weakness is more than made up in
3Q which is the strongest quarter for QSRs.
B. Input costs: The full impact of inflation will be visible in 2QFY23, although
price hikes taken in 1Q should help soften the impact on margin. Commodity
prices are beginning to stabilize, especially chicken and cooking oil, which
should result in a healthy margin recovery in 3QFY23.
Sapphire Foods India
C. Addition of new brands: While the management is on the lookout for new
brands to add to SAPPHIRE’s portfolio, it will dedicate only minimal bandwidth
to this pursuit. A brand will only be added when it meets all the criteria in its
internal checklist.
D. Sri Lanka: The business continues to perform well despite the macroeconomic
headwinds. It is expected to deliver LFL CC sales growth in FY23, led by price
hikes and a growth in orders. However, the depreciation of the LKR v/s the INR
will result in poorer earnings on a consolidated basis.
September 2022 44
18th AGIC 2022
Company Takeaway
FINANCIALS – Bank/Insurance
A. The management’s focus is on customer addition. However, it won’t use
interest rates to attract customer deposits.
B. The bank will continue to grow its Gold loan book and will build that business.
By FY30, Gold loan will be just one part of the overall Retail business as the
bank is focused on building a strong and diversified franchise. However, Gold
loans will remain the cash cow for the next three years. Overall, the bank is
looking to grow faster than the system.
C. The bank is investing in branches and technology and intends to keep the C/I
ratio below 60%. While its cost will rise, its fee intensity will also improve as
the management focuses on third-party, forex, liability-related fees, etc.
D. It is adding ~100 branches outside Kerala, mainly in Tamil Nadu, Karnataka,
Maharashtra, Gujarat, Delhi, and Punjab.
CSB Bank
E. In terms of geography, Kerala will continue to grow, while incremental
branches will drive growth.
F. By Mar’24, the entire CXO+1 level will be less than three years as the earlier
team retires. The bank has hired personnel to head the SME, Credit, and CTO
functions from other large Banks. It is looking to hire a CFO and a Chief Digital
Officer in FY23.
G. CSBBANK has 5,100 employees, of which less than 1,300 are part of the IBA.
The mix of IBA in two years will reduce to less than 10% as the bank continues
to add employees.
H. The Fairfax Group is very professional as a promoter and gives the
management complete freedom to operate. The board has been
strengthened, with a distinct focus on its credit culture and governance.
A. The strong trajectory in credit traction, as seen in 1QFY23, continued in 2Q as

well. Traction in the Corporate segment, as seen in 1QFY23, continued in 2Q
as well. The management is looking at a loan growth of 18-20% in FY23.
B. FB should see a pickup in margin in 2QFY23, but the cost of funds has
increased considerably. Thus, NIM is likely to be in a narrow range of 3.25-
3.3% in FY23.
C. Overall, the bank is looking to increase the mix of high-margin business such
as Personal loans, Credit Cards, CV/CE Financing, MFI, and Gold loans to
~15%.
D. FB is planning to open another 50 branches in FY23, taking the total for the
fiscal to 75. It plans to add another 175 branches over the next 12-18 months.
Federal Bank
E. Rupeek is the largest FinTech player for Gold loans for FB. The latter alone
constitutes 70-80% of the total business of Rupeek. With FinTech
partnerships (Jupiter, Apifi, etc.), the bank is looking to add ~5m liability
customers in FY23, which took it around five years to add via the traditional
approach.
F. It aims to pare down its C/I ratio to 50%/48% in FY23/FY24 from ~52% at
present. The bank has one of the lowest attrition rates (~2.5%).
G. A large part of restructuring book is likely to emerge out of the moratorium in
2Q/3QFY23, which will be a key monitorable. Its credit cost guidance stands
at 50-60bp for FY23. The actual experience of slippages from the
restructuring and ECLGS book has been better than its expectations.
A. Persistency continues to improve across cohorts. The management reiterated

ICICI Prudential Life Insurance
its guidance of doubling VNB by FY23 and is confident of achieving the same.
September 2022 45
18th AGIC 2022
Company Takeaway
B. Protection remains a key product segment. The management expects growth
to recover in Individual Protection from FY24, even as the Group business
continues to perform well. It still expects the Protection business to grow
faster than Savings over the next decade.
C. Pricing in Group Term plans is likely to reduce, and companies will have to
increase volumes to sustain the growth in premium.
D. Around 15-20% of Protection premium accrues from Return of Premium
products. Retention in Group/Individual Protection rose to INR2m/INR10m.
E. In the medium term, the management expects the Savings/Protection
business to grow at 1x/1.5x of nominal GDP.
F. Allowing the sale of Health Insurance will be a big business opportunity for
IPRU. The regulator is more receptive towards it, but the management said it
will await further clarity before moving in that direction.
G. Under the risk-based solvency framework, its solvency ratio will improve to
375% v/s 205% at present.
A. Weak momentum in premium growth is due to muted sales from its key banca
partners. Overall Insurance sales at AXSB have been weak and resulted in a
weakness in its banca performance. While the management aspired for a 30%
YoY growth in Insurance sales at AXSB, actual growth has been only 10% so far.
B. However, MAXF has successfully maintained its counter share at 70% at AXSB
throughout the year. This is an improvement from 65% in 4QFY22.
C. For YES, the counter share of MAXF stood at 63%. The management expects
the same to stabilize in coming quarters.
D. In order to balance its muted performance in banca, MAXF has tied up with
Max Financial Services several brokers to further diversify its distribution mix. This can potentially
add INR2b to new business premium.
E. Proprietary channels continue to perform well, with MAXF is looking to add 50
branches annually and increase manpower across all distribution channels.
F. VNB margin will remain stable on a full-year basis and will see an
improvement going forward as margin in the first quarter is usually soft.
G. Since the appointment of a new Chairman, IRDAI has introduced several
changes that will improve penetration and increase growth in the Insurance
sector. The draft commission guidelines are beneficial for large companies and
allow it flexibility to drive the product mix of its choice.
Company Takeaway
NBFCs
A. Focus on under-penetrated markets: The Affordable Housing Finance
segment comprises ~40% of the loan mix. ABCAP plans to further increase the
proportion of Affordable Housing via penetration in Tier III and IV cities. ATS
for the same stands at INR1.5-2m. Salaried borrowers comprise 60% of the
Affordable Housing Finance loan book.
B. Guidance: In the NBFC business, the management guided at a loan growth of
Aditya Birla Capital 20% for FY23, while Retail and SME is expected to grow at 25%. It endeavors
to double the NBFC business over the next three years and deliver a RoA of
~3%. It plans to enter the Vehicle Financing segment via the partnership model
in FY24.
C. Branch expansion: The management plans to aggressively increase the
number of branches to 320 by the end of FY23 and by ~500 in the subsequent
years from ~190 at present. It aims to capture market share via branch
September 2022 46
18th AGIC 2022
Company Takeaway
addition in Tier II, III, and IV cities.
D. Sourcing methods: ABCAP has built a digital lending platform to acquire
customers at scale (i.e. small ticket size and short tenor loan customers). It
also plans to cross-sell other products in the ABCAP ecosystem to its digitally-
sourced customer base. It will leverage the distribution network (dealers,
wholesalers, and distributors) of group company UTCEM and offer financial
solutions to them.
E. Focus areas under the new leadership: The management will focus
extensively on building its capabilities for direct customer acquisition. It is
looking to further strengthen its One ABCL proposition for both its customers
as well as partners.
F. Asset quality: ABCAP is expecting resolutions to a few large Corporate
accounts over the next few quarters, with an improvement in asset quality. It
expects the same in SME asset quality as well.
A. The company’s aim is to increase the alternative assets to INR500b from

INR130b over the next 2-3 years, which will be driven by passives, offshore
funds and PMS/AIF. The rise in alternative assets will be carried out through
launch of new products and set up of dedicated teams for these sub-segments.
Aditya Birla Sun Life AMC B. Debt index funds have seen an increase in interest from Corporate and HNI
customers. Longer duration and corporate bond funds should find more
demand in due course as yields peak out.
C. Debt segment yields will improve as the share of longer duration assets
increase. Equity segment yields will decline, albeit, at a much lower pace.
A. An update on its merger with HDFCB: NCLT has completed its hearings and its
order is awaited. A shareholder meeting is scheduled for Nov’22. The company
has formed an integration committee, and expects the merger process to be
completed by Jun’23. It has sent a request to RBI to allow it to increase its
stake in the Insurance subsidiaries above 50%.
B. Wholesale book: It sanctioned new proposals and expects disbursements to
grow gradually over the year. Growth in the Wholesale book was muted in
prior years due to the REITs, but it expects growth to revert back to double-
digits in the near-term.
Housing Development Finance
C. Liability: All long tenor borrowing options – term loans, bonds and ECB – are
Corporation
available to HDFC. In order to reduce interest rate risk, it is diversifying the
swap book into different benchmarks so that it is not unduly exposed to any
particular benchmark. The management expects spreads and margin to be
maintained, as higher borrowing costs have been passed on to customers
(even though there is some lag in transmission).
D. Asset quality: Retail NPA is currently ~98bp, and the management endeavors
to reduce it to ~70bp. Non-individual NPA is currently elevated at 4%, which it
endeavors to reduce to 1%, driven by resolutions in some stressed exposures.
It has refrained from selling assets to ARCs on account of the slow recoveries.
A. The intensity of the drop in yield will reduce going ahead with lesser number of
NFOs and relatively better commission structures for these NFOs.
B. Sectoral thematic funds are a gap in the product profile for HDFC AMC and the
HDFC AMC
company will look to launch this type of scheme selectively.
C. Even post-merger, HDFC Bank will maintain an open architecture. Currently,
the bank sources less than 30% of AMC flows that will increase after the
September 2022 47
18th AGIC 2022
Company Takeaway
merger.
D. In terms of market share, the inflow market share had reduced to 0.2x from
the peak, which has now recovered to 0.5x. Conversely, redemption market
share has been constant.
A. Growth: The management guided at an AUM growth of 30%, and expects to

earn a RoA of 3.5-3.8% on a sustained basis. Currently, it undertakes co-
lending with PSUs and expects co-lending to contribute 10% to its
disbursements. It has a strong capital buffer and does not need to raise capital
in the near term.
B. Sourcing model: It employs a 600-member team across 100 branches, which is
responsible for origination, and a network of ~10,000 connectors in various
markets to source business. It pays commissions (in the 20-50bp range) to the
Home First Finance Company connectors. The share of the top 10 connectors is less than 5% of AUM and
India there is no concentration risk or dependence on a handful of connectors in the
HOMEFIRS ecosystem.
C. Differentiators: The underwriting team is centralized. HOMEFIRS employs a
team of underwriters, with an average experience of five-to-six years. Faster
TAT, a superior technology platform, and analytical skills have helped it gain
market share.
D. Others: Overall run-offs (including subsidy, BT-OUTs, and repayments) are
~15%. It plans to gradually reduce its concentration in Gujarat and increase its
focus in other western and southern states.
A. Wealth management is the next growth area in which customers with

networth in excess of INR10m are serviced. This customer base has increased
to 70k from 40k, AUM has surged to INR2.7t from INR1t, while revenue has
surged to INR7.7b from INR2.2b.
B. The company is adding 1,500 customers per quarter in this segment and most
ICICI Securities of them are from the mass affluent section. While ICICI Bank also has a private
wealth division, its focus is on the banking products.
C. The company is looking to execute discount broking model differently under a
brand once it integrates the Multipie acquisition and Asknbid (16% stake).
D. Technology investments will continue to increase from INR1.4b in FY22. The
next round of investments will be required for moving to Cloud.
A. Growth in Gold loans: MGFL is seeing demand for Gold loans accruing from
Agriculture, MSMEs, and for personal consumption. Floods in North India have
affected the Agriculture business and the management expects Gold loan
growth to remain muted even in 2QFY23. Though the opening of schools has
led to an uptick in demand, with a higher run-rate of newer customer
additions, it expects Gold loan demand to improve in 2HFY23.
B. Gold loan branches: RBI has imposed restrictions on the opening of new
Manappuram Finance
branches since the company carries an auction surplus of ~INR450m (of which
INR360m is prior to FY12). Despite several attempts to refund this surplus to
customers, the company has been unable to do so due to the lack of KYC
details of its customers. MGFL has communicated the same to RBI and expects
the issue to be resolved over the next two-to-three quarters. It expects to
receive RBI approval to open new Gold loan branches within the next two
quarters.
September 2022 48
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Company Takeaway
C. Improvement in yields: MGFL compromised on yields in 2Q-3QFY22 to grow
its loan book. However, it did not find this model sustainable and raised its
yields even though there will be a trade-off with loan growth. It plans to focus
on low-ticket, high yielding business and maintain near-term Gold loan yields
at 22%.
D. MFI business: The new regulatory guidelines in the MFI segment have
removed the pricing cap and has allowed Asirvad Microfinance to increase its
yields on incremental disbursements to 24% (from ~20% earlier). The
economic expansion is resulting in a healthy growth in disbursements and
AUM. It expects credit costs to decline further in 2Q and deliver normalized
credit costs from 2HFY23.
A. Target customers: Muthoot Microfin is focused on the under-penetrated Low

Income segment. It caters to women in joint liability groups by extending loans
to meet personal demands and the operations of small businesses. It operates
a high touch model, with each branch catering to a radius of 30km and offering
loans with an ATS of INR10k-0.1m. The customer retention rate is high at 89%,
with 25% of its collection operations digitized.
B. Widespread presence: The company has grown its presence across India and is
presently operating 989 branches across 18 states. AUM grew to INR72b in
FY22 from ~INR62b in FY21, resulting in a RoA accretion of 3%.
Muthoot Microfin
C. Guidance: The management is targeting an AUM of INR85b and an RoA of 3.5-
4% by FY23. It expects cost of operations to reduce to 4.5% from 6.5% at
present and the cost of funds to remain constant at 10.7%. The management
projects the same to lead to a PAT of INR2b in FY23 (v/s ~INR0.5b in FY22).
D. Asset quality: ECL/EAD stands at 5%, with coverage on Stage 2 and 3 loans at
55%. Around 77% of its loan book originated after the lifting of COVID-related
restrictions, with GNPA less than 0.4%. It expects the same to increase to
~95%, with a GNPA of less than 1% by FY23. The management projects credit
costs to moderate in subsequent quarters.
A. NAM’s fund performance has improved across schemes with most of them
appearing in the top two quartiles. This should translate into better flows
going ahead.
B. The company has seen increased market share in fixed income, number of
folios, number of unique customers, B30 markets and SIP AUM.
Nippon Life India Asset
C. NAM aims to grow its offshore assets aggressively through partnerships with
Management (NAM India)
entities such as DWS for Europe and Cathay SITE. Support from the parent
entity will be the key to scale up its assets in the segment.
D. NAM ranks among the top two for most banks as a distributor. If any
regulations pertaining to restricting or capping banks’ selling MFs of their
group AMCs are implemented, NAM would be a major beneficiary.
A. Diversifying its asset base across businesses and sectors: In addition to its
mainstay ‘Financial Services’ segment, it has been focusing on emerging
businesses like IT, ITeS, Logistics, Healthcare, Consumer, and Education.
B. Liabilities on a healthy footing, low through cycle credit costs: Its liabilities
Northern Arc Capital are well-diversified across foreign borrowings (30%), PSU and Private Banks
(30% each), and the Capital Market (~10%). Average credit cost stood ~50bp in
the last decade.
C. Healthy margin profile led by superior yields and low-cost borrowings: The
September 2022 49
18th AGIC 2022
Company Takeaway
company has portfolio yields of 14% and the cost of borrowings of 8.8%, which
translates into healthy spreads and margin.
D. Large partner network that includes some of the biggest NBFCs and MFIs:
Northern Arc remains relevant (from even a balance Sheet perspective) to its
partner NBFCs and MFIs till it reaches an AUM of INR40-50b. Even larger
NBFCs (like Shriram Group and Hinduja Leyland Finance) work with it as it
offers end-to-end origination capabilities and given its expertise in structured
products like assignment and securitization transactions.
A. Focusing on a niche customer segment: The management focusses on the

niche, self-employed customer segment (those with undocumented incomes).
It has a presence across 13 states, with 75% of its loan book having a CIBIL
score of over 700 and 15-16% of its customers new to credit (NTC).
B. Actively leveraging its co-lending partnerships: Wherever there is a higher
propensity of customers to take a balance transfer, the company originates
such loans under its co-lending partnerships. None of its co-lending
partnerships have FLDG or any other guarantee and help it expand the
customer segment. It also has a high RoE model since the capital requirement
is much lower.
Vastu Finance
C. Borrowing mix dominated by NHB borrowings: The latter contributed ~40% to
its liability mix. Excluding NHB, its borrowing cost stood at 7.5% before the
repo rate hikes began in May’22. All its LAP and Housing loans are at a floating
rate.
D. Completely paperless systems, with processes that extensively leverage
technology and analytics: It has a comprehensive Home loan system called
Pulse, which it has extensively leveraged for sourcing, underwriting, and
collections. The system is equipped to generate multiple MIS reports on a real-
time as well as at pre-determined schedule to aid the decision-making of
business teams.
Company Takeaway
Healthcare
A. Price driven growth in Domestic Formulations (DF) in FY23: The management
has guided at 10-12% YoY growth in DF sales. Despite a high base in FY22, it is
confident of outperforming the IPM on the back of launches and price hikes in
certain products.
B. US business to grow by 10% YoY in FY23: The management maintained its
10% YoY growth guidance in US Generics sales for FY23 on the back of ANDA
Alkem Labs
launches.
C. Rationalizing US filings: ALKEM is targeting annual ANDA filings of 10-12 in the
US in the medium term.
D. Expects an EBITDA margin of 16.5%: Price erosion in the US base portfolio and
increased RM cost, resulted in lower gross margin in 1QFY23. The
management is targeting an EBITDA margin of 16.5% in FY23.
A. Softening in raw material cost: Prices of inputs and freight rates have been
softening. This downtrend is expected to continue, driving better profitability
to some extent over the coming quarters. The supply of a key raw material for
Granules India
Paracetamol has improved, with the Chinese manufacturer resuming
operations. Also, a few Indian suppliers are being evaluated.
B. A new set of products is to be added to its portfolio offering: Purchase of a
September 2022 50
18th AGIC 2022
Company Takeaway
Biotechnology asset for INR200m will add Fermentation to its portfolio. GRAN
intends to incur INR750m over the next 12 months on this space.
C. ANDA launches to better its US business: The management intends to launch
two-to-three ANDAs in FY23.
D. Growth-led capex: It has guided at a capex of INR3b for FY23.
A. Overall revenue growth to be 9-10% YoY in FY23: The management guided at

a sales growth of 9-10% YoY for FY23, led by 12-13% growth in the DF
business, and 13-15% growth in branded exports. The API segment is expected
to grow moderately by 5% YoY.
B. Softening raw material prices: The management indicated some softening in
raw material prices. Also, increased backward integration will aid better gross
margin from current levels.
Ipca Labs
C. Expect an EBITDA margin guidance of 20% in FY23: IPCA has guided at 20%
EBITDA margin, excluding other income.
D. UK business to gradually normalize: IPCA received six approvals in the UK
market. These products would be launched soon. It expects better growth
prospects in this segment from FY24. It has strengthened its efforts in parts of
Europe, excluding the UK, through product launches and increased
penetration.
A. Enough scope to improve profitability in its Azmarda product: While expiry of

the patent for Azmarda will erode its selling price considerably, the shift of
manufacturing to its India site will considerably improve its gross margin,
thereby driving better profitability for JBCP over the medium term.
B. Strong traction in Azmarda: JBCP’s superior execution has led to an
JB Chemicals Pharmaceuticals improvement in Azmarda sales to INR90m per month from INR50-60m at the
(JBCP) time of its acquisition.
C. Multiple strategies to drive growth: JBCP will optimize its existing portfolio
and continue to look at M&A opportunities to aid growth in the DF segment.
D. Efforts underway to improve MR productivity: JBCP has improved MR
productivity to INR60m PCPM from INR4m PCPM at the time of acquisition of
JBCP by KKR.
A. Non-ARV API in scale-up mode: LAURUS expects its Non-ARV API portfolio to
grow at early double-digits YoY in FY23. Growth will be better in FY24, aided by
product introduction and geographic expansion in the US and the EU.
B. Business from the new Formulation facility to commence from 2QFY23:
LAURUS has operationalized a new Formulation site recently and will optimize
capacity utilization over the next two years.
Laurus Labs
C. Supply challenges will abate with the normalization of manufacturing
operations in China and the easing of geopolitical risks.
D. To incur a capex of INR20b over FY23 and FY24: The management has guided
at a capex of INR20b for FY23 and FY24, funded mostly through internal
accruals. Capex for the CDMO segment stands at 40-50%, while the rest will be
for non-ARV API and Formulations.
A. Growth led by expansion in existing clusters and the development of new

clusters: MEDPLUS intends to scale up its store additions and its same store
Medplus Health Services
revenue growth from its already established presence in seven key states. It
also intends to build new clusters as well.
September 2022 51
18th AGIC 2022
Company Takeaway
B. Improvement in the share of private labels to drive better profitability:
MEDPLUS has over 850 SKUs curated under its private label range. It intends
to increase the contribution of private labels, especially in Chronic, sub-
Chronic ailments, and FMCG products, including Nutrition and Wellness.
C. Aggressive store additions planned: Over the past 12-months, MEDPLUS has
added 815 stores (232 in 1QFY23). Given the pace of store additions in
1QFY23, it intends to easily surpass its FY22 store addition in FY23.
A. Adopts a hub-and-spoke model: RAINBOW has an asset-light hub-and-spoke

model. Hubs offer all levels of treatment. It takes two-to-three years for a
Hospital to break even at its hub location v/s two years for a spoke location.
Capex per bed in hub/spoke locations stands at INR6m/INR5m.
B. Differentiating factor drives more customers towards RAINBOW: It has a
pediatric specialist available 24x7 at its OPD as compared to a limited
availability of specialists in other adult hospitals.
C. Bed additions on track: In the next three years, RAINBOW is planning to add
Rainbow Children’s Medicare 500 beds. Matured hospitals have a 300-400bp margin higher than company-
level margin.
D. Operational guidance: In FY23, the management expects 55% occupancy after
adding 150 beds. It will be adding another 100 beds by the end of FY23.
E. Better doctor retention ratio compared to that of the industry: RAINBOW has
an 87% doctor retention ratio out of 400 doctors (a total of 640 doctors
including DNB). The high retention ratio is due to better financial incentives
and availability of a 24x7 team, which provides a better work-life balance to its
doctors.
Company Takeaway
Infrastructure
A. Complete solutions: APSEZ provides complete solutions by using its logistics
vertical and it proves to be cheaper for customers to avail services of APSEZ
versus engaging with multiple operators. This increases APSEZ’s
competiveness significantly.
B. Warehousing: Management sees significant opportunity in this segment; it
intends to expand warehousing space by 10m sq ft every year.
C. Acquisition: Management is constantly exploring the possibility of port
acquisitions in India and abroad. For acquisitions in India, the company
generally looks to tie up with local partners. APSEZ is open to bidding for
CONCOR and sees significant synergies in the business.
Adani Ports & Special Economic
D. Capex: FY23E capex to be incurred majorly towards ports vertical, whereas
Zone
logistics business would see decent capex in FY24E. APSEZ is targeting a capex
of ~INR85b in FY23E.
E. Debt: Gross debt is at INR450b and Net debt is at INR330b at end of June’22.
F. Guidance: Management expects 500MT of volumes by FY25, which would
lead to INR200b of EBITDA. The realization would continue to improve for the
ports business. About 40% of the EBITDA would be from logistics business in
FY25E.
G. Higher container volume to drive margins: APSEZ is focused on increasing
the share of container volumes to more than 40% by FY24 (v/s 38% in FY22) as
it is a high realization and margins business for the company.
September 2022 52
18th AGIC 2022
Company Takeaway
LOGISTICS
A. Recent trends: Volume growth remains robust, margins are likely to improve
from 1QFY23 levels as the integration issues with Spoton have been resolved,
truck and warehouse utilization levels are improving, and operating leverage
is kicking in.
B. Positive adjusted EBITDA: The company has delivered positive adjusted
EBITDA margin (adjusted for ESOP and non-recurring expenses) and with
higher volumes, management expects benefits of operating leverage to
further drive adjusted EBITDA profitability.
C. Spoton integration is complete; synergies should flow during FY23: The
company does not expect to incur any further Spoton-related integration
costs going forward (INR460m in 1QFY23).
D. Volume and price: Delhivery said it is unlikely to take any notable pricing
action in the remainder of FY23 and expects pricing to remain at current
levels. On the volume front, management asserted that Indian ecommerce
Delhivery will continue to grow, though some players and marketplaces might face a
slowdown.
E. ONDC could help Delhivery to capture market share: The Open Network for
Digital Commerce (ONDC), aimed at enabling and helping small players in an
industry dominated by large ecommerce players, could be beneficial for
Delhivery, as the company does not depend significantly on any one customer.
The ONDC platform, if implemented successfully, could help Delhivery to lift
its market share in the express parcel delivery segment.
F. Differentiating factors from peers: Delhivery is the largest integrated logistics
platform with a full range of supply chain services and operates an asset light
model. The company’s proprietary technology and vast data intelligence along
with engineering capabilities are the differentiating factors. Most of the logistics
companies in India are monoline since they do not have the technology to
combine B2B and B2C. However, Delhivery runs system-directed hubs and hence
is able to manage B2B and B2C consignments simultaneously.
A. Revenue: Volumes and revenue from the Goods Transport (GT) division have
been increasing MoM driven by a pick-up in economic activities. With
implementation of E-way bills, GST etc., the market share of organized players
in the GT segment is expected to increase going ahead.
B. Margins: The margins have been robust with higher volumes and improved
efficiency. With the sale of the low-margin Bus segment, the margins are likely
to improve going forward.
C. Capex: VRL expects to incur a capex of INR3.0-3.5b during FY23.
D. Branch network: VRL opened 68 branches in 1QFY23, taking the total number
VRL Logistics of branches to 1,023 as of Jun’22. There were 0.4m customers of VRL during
pre-Covid, which has increased to 0.7m now. Addition of new customers is
expected to continue as new branches are being opened.
E. Divestments of the Power and Bus divisions: VRL completed the sale of its
wind power business for INR480m in Aug’22, and plans to utilize the entire
proceeds towards capex in FY23E. Further, in Sep’22, the company announced
the sale of its Bus division for INR230m to a promoter group entity. The
average revenue per passenger in the bus segment has been declining while
costs have been escalating. VRL has not been able to pass on the cost increase
to customers due to rising competition.
F. Focus on increasing market share: Management has not taken any prices
September 2022 53
18th AGIC 2022
Company Takeaway
hikes despite diesel price increase, as the company is focusing on volume
growth and gaining market share.
G. Guidance for FY23: VRL is targeting a tonnage growth of 20%. The company is
aiming for a margin of 17% for the GT segment in FY23E.
Company Takeaway
MEDIA
A. Revenue: Zee’s 1HFY23 revenue is likely to be weak due to: a) inflation, which
impacted FMCG ads adversely and b) delayed pricing power led by NTO 2.0.,
which is likely to be completed by Feb’23. We expect 2HFY23 revenue to be
better that will lead to higher margin.
B. OTT metrics improving: DAU and DAU/MAU ratios are improving. The
company is likely to invest INR2.0-2.5b every quarter (pre-merger).
ZEE Entertainment
C. Movie releases: Management expects to release a couple of movies every
quarter; these movies will majorly be small-budget or regional movies.
D. Important dates: a) Shareholders’ approval is likely on 14th Oct’22 and
subsequently Zee will proceed for the CCI approval; b) NTO 2.0 is projected to
be completed by Feb’23; and c) Zee will start paying for the broadcasting
rights to Star from FY24E onwards.
Company Takeaway
METALS
A. Demand: Domestic demand has been recovering and volumes in 2QFY23 are
likely to be higher than 1QFY23. While JSL has not witnessed any problem in
selling volumes, it is trying to achieve volumes without sacrificing EBITDA
margin.
B. Exports and export duty: JSL highlighted that exports are mainly directed to
Europe and the US where it competes on quality with companies such as
Aperam, Acerinox, Outokumpu, etc. Its exports have been impacted
adversely by the sudden imposition of export duty. However, the
management highlighted (BL article-1 , BL article-2) and opined that export
duty may not be a long-term phenomenon but the timing and modalities of
recall are difficult to predict.
Jindal Stainless C. Expansion: The company is likely to complete the 1mt expansion at its Jajpur
plant in 2HFY23E. Further, expansion of value-add SS at its Hisar plant will be
commissioned in phases between 2QFY23E to 2QFY24E. JSL is likely to spend
about INR11b and an additional INR16b during FY23-24E.
D. Acquisition of JUSL – JUSL is expanding its rolling capacity to 3.6mt from
1.6mt at a capex of INR3.5b, which is a fraction of the capex needed for such
expansion normally. This will lead to a quick payback for the capex. JSL will
pay an equity of INR9.58b and debt of INR24b (including proposed capex of
INR3.5b) for the expansion of the HSM.
E. Merger of JSL and JSHL: Management highlighted that the next date for the
NCLT hearing will be on 18th Oct’22. The company has already received
approvals from lenders and shareholders for the merger with JSHL..
September 2022 54
18th AGIC 2022
Company Takeaway
Oil & Gas
A. GRMs have come down and are negative currently. Management expects
GRMs to be subdued for the rest of the year. However, management is not
worried much as Brent has corrected and the lower refining margins would
be made up for by better marketing margins. If Brent would rise again to the
Apr’22 level, then the company could increase the product prices. However,
if Brent remains at these levels, then management is content with the
prevailing product prices.
B. The Total-Mozambique project is likely to be delayed by 1.5-2 years. Total is
the operator of the block and it has secured the land but the force majeure
still exists. The total project cost is USD20b with the FID being done at
BPCL USD14.9b.
C. The petchem project is expected to come up in the next 4-5 years with a
capex outlay of INR250-350b. There would be no separate segment reporting
for petchem in the short term, but in the long term the management could
decide to report it separately.
D. Capex guidance for FY23E stands at INR100b with INR50b for marketing,
INR20b for petchem, and INR10b each for Upstream activities (through
equity in BRPL, Gas and maintenance and other spends). Aspiration for the
company is to spend INR1,400b on capex over the next five years (refineries-
INR450b, petchem – INR450b, upstream – INR250b, and development of
CGDs – INR210b)
A. Manufacturing of LPG cylinder is the cash cow for the business with the
company having 15 plants. About 99% of the cylinders are used for industrial
and commercial purposes. For the routine business the margins are at 10-
12%. Margins are likely to be better after starting distribution as a pilot
project in some cities such as Pune, Bangalore, Jaipur and Chennai.
B. The replacement business is growing with the average life of a cylinder being
8-10 years. The company has ~2,500 dealers. Confidence is setting up its own
sales force to sell their cylinders to customers. The company saves INR15/kg
Confidence Petroleum
when it sells directly v/s INR7/kg when it sells through distributor channel.
The company earns refill income i.e. with an investment of INR1,000,
Confidence creates a lifetime earnings source of INR1,000 per month i.e.
payback in 2-3 months.
C. Composite cylinder is costly by 30% than normal cylinder. The management
does not believe that there is any future for composite cylinder. The
company is adding 10k cylinders per month to reach 300k cylinders in two
years (v/s 40k now). Every cylinder generates INR6k profit per year.
Company Takeaway
RETAIL
A. Enjoys a five-format concept: Metro’s five growth engines are: Mochi,
Metro, Crocs, Walkaway and Fitflop. Hence, the company enjoys multiple
levers of growth.
B. Number of stores: Huge opportunity lies in store expansion. The company
Metro has only 238 stores of Metro in 140 cities and 168 stores of Mochi in 88
cities, which can be doubled across markets as most of these markets have
huge penetration opportunities.
C. Ecommerce: Metro’s sales contribution via online is less than 10% and it is
not aggressive on ecommerce as 30% of the footwear purchased are
September 2022 55
18th AGIC 2022
Company Takeaway
returned by customers. Online economics is not conducive for the company
as it has to incur high marketing, logistics and other costs even if there are
no sales. Management will be focusing more on omnichannel, as it has good
full-price sell through, low logistics cost and better inventory management.
D. Margins: Expect gross margin trajectory of 55-57%, EBITDA margin to be
~35% and PAT at ~15% going forward.
A. Expanding in Women’s celebration wear: The company forayed into

women’s celebration wear through “Mohey” with lower cash investments
and turned the segment EBITDA positive within the first year itself. Going
ahead, Vedant looks to expand this segment by opening up 5-6 standalone
stores in addition to the brand’s presence in the current flagship Manyavar
stores.
B. Strong Inventory management: The company’s AI-based data module
ensures efficient inventory replenishment and management. This has helped
Vedant Fashion (Manyavar)
it achieve lower discounted sales of merely 3% of the total turnover.
C. Product offering: The company will continue to have three brands, i.e.,
Manyavar (flagship brand), Mohey and Manthan, which will allow Vedant to
cater to 90% of the target audience. The company, going ahead, will look to
open EBO stores for Manthan, which is currently being sold through online
and MBO channels.
D. Strong pricing position: The company’s cost-to-MRP ratio stands strong at 4x,
implying a strong pricing position.
Company Takeaway
STAFFING
A. The company currently has ~5% market share in India and ~20% in Australia
in security services. The management wants to expand the market share
further. Though the company will continue to grow organically, it will
continue to explore potential acquisition opportunities in India.
B. The company not only provides physical security but also offers electronic
security. It is now trying to create an integrated model of physical security,
SIS
electronic security and facility management bundled as a single solution.
C. Cross-selling and up-selling are currently only about 7.5-8.0% of the
revenue. This is a low-hanging fruit and the management is incentivizing the
sales team to take up cross-selling initiatives.
D. The minimum wage was flat for two years and now it is recovering. The
management is seeing 10% wage hike in a few states.
Company Takeaway
TECHNOLOGY
A. Demand: Management suggested that: a) it is not seeing any adverse
impact of weakening macro on the near-term demand environment; and b)
the company is better placed than competitors to withstand any impact in
case of a slowdown.
LTI B. LTI-Mindtree merger: Management suggested that the prime motive of the
merger is to bring revenue synergies and not cost synergies. There is a
tremendous cross selling opportunity as the clients are not overlapping and
the capabilities and verticals are complementary to each other. It expects the
merger to complete by end-CY22. Besides, there is no spike in senior-level
September 2022 56
18th AGIC 2022
Company Takeaway
attrition due to the merger.
C. Margin: The attrition remains at elevated levels and the cool-off is likely to
be gradual. The attrition is highest in the three-to-seven year employee
bucket. The fresher hiring target for FY23 remains at 6,500. Higher fresher
intake could have some impact on utilization levels. However, offshoring
levels are not expected to change much. On pricing, it is difficult to engage
in pricing discussions with existing clients. Further, the facility expenses are
returning, so margin expansion would be slower than usual.
Company Takeaway
MIDCAPS
A. Newer opportunities: The UP government has announced the order for
1,000 water tanks to be made out of steel tubes. To manufacture 1,000
water tanks, ~1MMT of steel tube is required. This provides a good
opportunity for APL.
B. Focus on value added products: APL has market share of 10% in commodity
business, 70% in value added business and 100% in super value added business.
C. Raipur plant: APL’s Raipur plant has gross block of INR10b, of which INR8b
Apl Apollo
is funded via internal accruals. This plant has a potential to generate an
EBITDA of INR10b p.a. at full capacity utilization. All the three lines are
expected to be operational by Dec’22.
D. Steel price has reduced to ~INR53,000 per tonne now from ~INR75,000 per
tonne in 4QFY22. Even after the decline in the price , the company has
protected its margin at ~INR4,600-4,800/tonne. The management is
confident of achieving similar or better margin in FY23E.
September 2022 57
18th AGIC 2022
AGIC MANAGEMENT SAYS: Day 3
Company Takeaway
AUTOMOBILES
A. Wiring is an asset-light business, with hard assets like land owned by
MOTHERSO. Some of the assets could not be transferred to MSUMI due to
challenges with respect to the levy of duties. The biggest moat for MSUMI is its
scale and backward integration. It will remain a high RoCE business.
B. EVs will result in an increase in content and a reduction in competition due to
higher technology. It is setting up a new EV dedicated line at Chennai. EV related
components like chargers, connectors, etc. are under active consideration.
Where this business will reside has not yet been finalized as the technology exists
with both partners.
C. While there are many advanced technologies available, the wiring harness is the
Motherson Sumi Wiring India
only proven fail-safe mechanism, considering its application is in a varying and
challenging environment.
D. The pricing of wires sourced for MOTHERSO’s Wiring Harness business is the
same for MSUMI. Connectors are manufactured by MOTHERSO. The pricing of
components sourced from MOTHERSO is dependent on its parts. For instance,
some parts are on a cost plus basis, whereas some parts will have a higher margin
(where MOTHERSO is the only manufacturer). MSUMI is free to purchase from
wherever it wants to.
E. While exports will be carried out by MOTHERSO, anything to do with Automotive
wiring (excluding that for the Hyundai group) will accrue to MSUMI.
A. Demand: FY23 will see volumes of 72-80k tonne (v/s 62k tonne in FY22). The US
Class 8 segment is not seeing any immediate cuts. It may see a 5% cut due to
supply side issues, resulting in a longer delivery timeline and resultant order
cancellations. In terms of geography, the EU remains a concern, given the
inflation in energy prices. The domestic business is seeing strong demand growth,
which will dilute the impact of EU.
B. Its domestic market share stands at 50%, but may rise to 60%, led by new products
MM Forgings
targeting domestic customers (crankshafts, front axle beam, knuckle, etc). All new
products consist of fully machined components, which earn a higher margin.
C. It expects the share of machining to increase to 55-60% from 45% in the
medium term. This can add 1-2pp to margin, despite inflation in non-input cost.
D. EV Motors: The recently acquired startup in the EV motor segment has started
producing sample motors for testing and validation. The motor is smaller in size,
but has a higher power.
A. Global demand is not a challenge, but supply is still a challenge. Demand in

global PVs is good, particularly in the Premium segment. There is a long waiting
period of three-to-twelve months.
B. The management is in discussions with clients on higher pass through of cost
inflation as the competition is in bad shape. It expects to settle the current cost
Samvardhana Motherson pass through discussion before FY23 end.
International C. A large part of the cost inflation (excluding the recent rise in energy cost) is
reflected in the P&L. As pass through benefits are not yet in the P&L, margin
should see improvement from here on.
D. It is seeing a fair amount of M&A traction, but given the macro uncertainty, it is
not yet pulling the trigger as there may be more opportunities as the stress
increases.
September 2022 58
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Company Takeaway
E. It recently signed a MoU with the Saudi Arabia government for development of
an Automotive Component industry in the Gulf country. The Saudi Arabian
government has put in place the necessary infrastructure to facilitate
industrialization. It is offering subsidies as well as lowered the corporate tax rate.
These benefits, coupled with a lower transit time to the EU (six days), boost the
competitiveness of this location.
Company Takeaway
CHEMICALS-SPECIALTY
A. The first phase of Chlorotoluene would be majorly for agrochem and pharma API
players. The capacity that would come up is likely to be 20-25ktpa in the first
phase with a basket of 10-12 products. The first phase is expected to be
completed by 4QFY24.
B. Whenever the company chooses a product, the focus is never on the asset
turnover ratio of the product but always on the RoCE and the EBITDAM that the
Meghmani Finechem product can generate at the company level. The required RoCE and EBITDAM for
the company are 25% and 27-28%, respectively.
C. The CPVC of the competitor in India is 10ktpa while MEGHFL is coming up with a
capacity of 30ktpa. India consumes 50% of the overall CPVC consumption. It is a
play on import substitution for the company. ECH goes into the production of
Epoxy Resins (80%) and in the water treatment chemicals and pharma segments
(20%).
A. Demand: The management expects favorable demand-supply dynamics on the

back of good growth in demand for the industry as a whole. One-third of
demand accrues each from Consumer products (like container glasses), flat
glasses (used in the Auto and Real Estate sector), and newer applications (which
find use in the lithium and solar industry).
B. Soda Ash capacities: TTCH is adding a capacity of 0.3MMT each in India, Kenya,
and the US. In terms of global supply, China is reducing supplies (it has recently
taken out 3MMT of capacity), while the same in Turkey has maxed out.
Tata Chemicals
Currently, only India and US can offer additional supplies in this segment.
C. High inflation in Europe: The cost of production per tonne in Europe has risen by
GBP100 to ~GBP500. Energy constitutes ~70% of the cost of production in
Europe. Any change therein will significantly change its overall cost of
production. At present, Indian prices stand ~GBP400/t, much lower than
European prices of ~ GBP550/t.
D. Sustainability: TTCH expects a 30% reduction in carbon emissions in the near
term. The management expects to be carbon neutral by CY45.
Company Takeaway
CONSUMER
A. Demand environment: The management said urban demand is stable, but rural
demand remains weak, especially in North and Northeast India, where rainfall
has been below its long-term average. It expects a revival in rural demand in
2HFY23 after the paddy harvest season.
Adani Wilmar
B. Commodity prices: Edible oils were the most impacted commodity in 1HCY22,
with the management taking price increases in line with the rise in global edible
oil and oil seed prices to combat inflation. Global prices corrected sharply, with
AWLTD taking proportionate price cuts to remain competitive.
September 2022 59
18th AGIC 2022
Company Takeaway
C. Future plans and ambitions: Foods will be its key focus area, with the
management strengthening its play in the Staples space. It is hopeful of the
Foods business achieving a volume of 500k MT in FY23, while it expects volumes
to reach 1m MT over the next two years.
D. Its strategy in Foods: The Foods business is currently EBITDA neutral for AWLTD
as its near-term goal is to ramp up volumes and gain market share.
Premiumization and margin improvement will be the next step. The business is
investing heavily in A&P, distributor incentives, and sales promotions to achieve
higher volumes.
A. Salt business: TATACONS’ Salt business is seeing a volume growth of 7-8% p.a.
The company has 38% market share in the Salt segment, while unbranded
players command 50% share. In the last two years, TATACONS has gained ~7%
market share. Growth in Premium Salt is much higher than the traditional Salt
segment.
B. Starbucks: TATACONS has 280 Starbucks outlets across 30 cities. It has added
~40 stores in FY22 and is looking to add another 50-70 stores annually going
forward. Starbucks is running a pilot project in four cities, where it is offering
affordable rates on its smaller-sized Coffee offerings and added different
Tata Consumer Products
products such as Masala Chai, Filter Coffee, and Milkshakes to attract consumers
from the Middle-Income segment.
F. Guidance: The management expects the traditional business to grow in higher
single-digits, while newer segments such as Sampann and Soulfull can grow at
40-50% p.a. It expects margin to improve on a consolidated basis.
G. Distribution network: The management is focusing on improving its distribution
network. The company had 1.3 m outlets at the end of FY22 and aims to take it
to 1.5m outlets in FY23. TATACONS has already doubled the number of
wholesalers and quadrupled the number of rural distributors in FY22.
Company Takeaway
Consumer durables
A. Demand for ACs to recover in FY23; expect Washing Machine (WM) volumes to
remain strong: Demand for ACs was impacted in FY21 and FY22 as the COVID-
related lockdowns occurred during the peak sales season. Demand is expected to
recover in FY23, with sales volumes of 8.25-9m units. Demand for WMs remains
good. The management expects volumes of 550k/750K units in FY23/FY24 v/s
300k units in FY22.
B. Increasing capacities of ACs and WMs: Production capacities for both indoor and
outdoor ACs are being expanded significantly, which will aid future growth.
Capacity for indoor/outdoor units will be expanded to 200k/100k units (from
120k/50k units at present). It is adding assembly lines and has one of the most
PG Electroplast
backward integrated and largest AC manufacturing plants. The company has
completed the first phase of expansion for WMs and will increase capacity by 2x
to 1m units in FY24.
C. Revenue guidance: The management has guided at a revenue/operating profit of
INR18b/INR12.6b in FY23, up 64%/69% YoY. It expects a revenue of INR10.5b
from the Product business in FY23 v/s INR4.8b in FY22. The focus will be on
improving revenue of the products business, which will aid improvement in asset
turnover and RoCE. Revenue from AC manufacturing stood at INR2.79b in FY22. It
should be at INR30b in FY27 to avail PLI benefits. Revenue potential from current
capacities (excluding FY23 capex) is INR20-22b. The management is targeting a
September 2022 60
18th AGIC 2022
Company Takeaway
revenue of INR50-60b over the next three years. RoCE should be at 18-20% in
FY25.
D. Capex is pegged at INR1.3-1.4b in FY23, which will help increase its WM and AC
production capacities. The company will incur an annual capex of INR1.2-1.5b
over the next few years. There should not result in an increase in debt going
forward. The current price difference between Chinese and Indian players is 15-
20%. As Indian players are expected to be at par with Chinese players over the
next two-to-three years, it will help boost exports.
A. Recoups market share: VOLT has regained market share in the overall AC
segment, after a marginal drop seen in FY22. Its exit market share for Jun’22 was
24.1%, 950bp higher than its nearest competitor. It is now leading the inverter AC
market, with a market share 290bp higher than its nearest competitor.
B. Inventory level: Inventory at the manufacturing level is slightly higher than its
long-term average. Channel inventory remains at an average of 30 days, but may
increase to 45-50 days due to the festive season.
Voltas C. Voltas Beko’s growth journey continues. The management is targeting a market
share of 10% by FY25. The in-house manufacturing of products has helped the
brand introduce more customer-centric and value-for-money products, which
offer higher quality and comfort.
D. Capex guidance: Capex is pegged at INR4-4.5b over FY23-24. This will be incurred
on expansion of its manufacturing facilities for both ACs and commercial
refrigerators, as well as to meet the incentive-led targets under the PLI scheme
for which applications have been submitted.
Company Takeaway
FINANCIALS – Bank/Insurance
A. The management continues to grow its assets in core regions, while garnering
liabilities in urban regions. Around 65% of its assets accrue from the core areas,
while 77% liabilities come from urban locations.
B. Business momentum remains strong across all key verticals. The management is
ensuring that there are no negative surprises on credit quality. Wheels, SBL, and
Home Finance are three main pillars of growth, and will drive growth going
forward. Unsecured loans like Personal loans and Credit Cards will not exceed
more than 5% of overall loans.
C. To grow its deposit base, AUBANK has augmented its branch presence in major
AU Small Finance Bank cities and metros, with a higher share of deposits. It has also ramped up its digital
offerings and expanded its product suite (such as the introduction of Credit Cards
and pre-approved Personal loans to existing customers).
D. AUBANK will continue to invest to further narrow the spread in the cost of
deposits v/s large Banks. The addition of branches will primarily be in heavy
deposit areas. The cost-to-income ratio will be slightly elevated in the near term.
E. The average cost of savings deposits stands at 5.5%. Margin in FY23 is likely to be
similar to FY22 levels. Overall, the management aims to maintain spreads ~7%.
F. Asset quality remains steady, and the management expects credit cost to remain
in control.
A. The management’s focus is on growing higher return yielding businesses. It will

not undertake the Corporate business at a very thin margin, which is weighing on
Axis Bank
overall loan growth. Unsecured Retail will continue to grow at a faster pace and
is likely to be in the 15-20% range.
September 2022 61
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Company Takeaway
B. The quantum of RIDF deposits is moderating and will aid margin. The bank is
aiming at a margin of 3.8% and a RoE of 16-16.5% on a sustainable basis. Overall,
the aspiration is to deliver a RoE of 18%.
C. The management expects the cost-to-assets ratio to moderate to ~2% by the end
of FY25 (4Q), which will aid RoE expansion. It aims to open 300-400 branches
annually.
D. The intension is to maintain the contingent provisions buffer ~INR50b on an
ongoing basis. The management said it will not drawdown from these provisions.
From an asset quality perspective, the bank doesn’t see any stress point in this
book.
E. The Citi deal is likely to be completed by 4QFY23 and will take another 18 months
for integration. The customer retention and churning experience is in line with
the assumptions as forecasted by the bank.
F. As the product portfolio offered by Bajaj Allianz is slightly superior to that of Max
Life, it has seen higher growth in AXSB’s banca channel, which is enhancing its
pool of fee income.
A. LICI has a strong experience in selling Non-PAR products and has increased its
focus on the sale of these products. At present, it has 16/19 PAR/Non-PAR
products.
B. While it expects incremental growth in PAR products, the primary growth driver
will be Non-PAR products due to the management’s focus on diversifying the
product mix and plugging the gaps.
C. Protection is gaining focus across all distribution channels, and LICI is committed
to grow the ticket size as well as sum assured in this segment.
D. LICI has access to more than 62,000 branches, with tie-ups with 14 SCBs, besides
Life Insurance Corporation of Co-Operative Banks and RRBs. In order to diversify its channel mix, LICI is taking
India all the required efforts to increase the share of banca and the online and direct
channel. It has begun selling its policies on Policybazaar.
E. While the 13M/25M persistency ratio is lower as compared to its peers, LICI
stands out with the best-in-class persistency ratio of 61M. The management aims
to improve the performance in near-term cohorts by improving agent stickiness
and incentivizing agents to improve this trend.
F. Since the appointment of new Chairman, IRDAI has taken several steps to
increase growth and improve the penetration of Life Insurance in India. The draft
guidelines on commission will allow large companies to drive the product mix of
their choice.
A. One of the reasons why the revolver mix for SBICARD remains low is that many
customers have converted their Transactor balance upfront to EMIs, which is
keeping the revolver mix relatively lower.
B. SBICARD remains comfortable with a market share of ~20% in terms of spends.
C. Retail spends per card, excluding international travel, has risen after the lifting of
COVID-related restrictions.
SBI Cards and Payments
D. Within Corporate spends, the mix of GST payments stands higher than travel.
Services
Since the former is EPS dilutive, SBICARD is cutting down on such expenses.
E. The cost of acquisition for the D2C acquisition stands at almost nil.
F. Rewards offered by SBICARD are higher than that of Amazon Pay as they have a
lower cost of acquisition. It has rationalized rewards by limiting categories.
G. The customer age group stands at 22-27 years, and do not have much of a view
on credit quality within this segment.
September 2022 62
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Company Takeaway
A. SBIN is seeing some signs of a revival in capex in Infra, Roads, Telecom, and the
Renewable Energy sector.
B. The management is targeting an SME book of INR4t by FY24 and is well on track
to achieve the same. It is completely revamping its CGTSME and is making it end-
to-end digital, which will help improve SME growth. Vendor financing and pre-
approved Personal loans (PAPL) is showing healthy traction.
C. Around 95% of Personal loans are to salary customers. Of this, 85% are in
defense, and central and state governments having a very low NPA in this
segment. The bank has ~18.2m Corporate salary customers, of which only 23%
have availed of a Personal loan. Around 80% of these customers are repeat
customers having an average age of 40-50 years, with a loan tenure of three
years (but the loan is repaid much faster).
D. The pricing environment has improved in the Corporate segment, given tighter
liquidity in the system. The management is focused on profitable growth.
State Bank of India
E. Overseas growth will moderate as the bank is focused on margin. The domestic
demand environment has improved, while global macros are volatile. NIM is
likely to increase by 3QFY23 and will touch 10bp/20bp higher than normalized
levels in the next few quarters.
F. Deposit profile is comfortable for the bank. The management said it won’t
surrender any market share in CA deposits. Bulk deposits constitute 11% of total
TDs. LCR ratio is comfortable at 131%.
G. Behavior of the ECLGS book is similar to that of other SME loans. Around 7% of
this is SMA, which is quite usual in nature. The bank remains watchful of interest
rate risk, while asset quality risks have subsided.
H. The demand for Housing loans has increased, and SBIN is seeing a YoY growth of
~40% in sanctions. The bank is adding to its processing capacity in Tier II and III
cities and is completely digitizing the process.
I. The cost-income ratio is likely to sustain ~50% in the medium term.
Company Takeaway
NBFCs
A. AUM growth: AUM stood at ~INR41b as of FY22 and has now crossed ~INR50b.
Management expects AUM to grow to INR200b by FY27 at a CAGR of 37% and
ROE to normalize at ~25-26%. The growth is likely to be driven by better profiled
customers satisfying the risk management framework of the company and
diversification benefits of being present in multiple geographies.
B. Elevated opex: Opex increased to 7.4% as of 1QFY23 v/s a low of 5.14% in FY20.
The company runs a high-touch business model and has made extensive
technological investments leading to elevated operating expenses. The same is
expected to decline to 4.7% by FY27 as the operations scale up.
Aarohan Finance
C. Cost of funds: The company accords special focus to managing its liability
franchise through diversification of borrowing profile. CoF improved to 10.5% in
FY22 from 10.9% in FY19. Management expects credit rating upgrades in the
future to aid decline in CoF in the subsequent years.
D. Others: The company maintains a healthy CAR of 28% as of 1QFY23 and has
considerable cash and cash equivalents. It extensively employs technology to
conduct business, including a customized app, data warehouse and business
intelligence, tech-driven staff management, customer profiling, core banking
system and other multiple process automations.
September 2022 63
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Company Takeaway
A. The IOS version of its super app continues to progress well. In the initial days,
there were some customer dropouts, but activation and trading activity has
normalized now. The management expects to launch its Android version over the
next few months.
B. Its customer acquisition trajectory will be maintained at current levels, given its
target of increasing acquisitions from lower tier cities.
Angel One
C. Net interest income from MTF is 9-10%, with the cost of borrowings at 8.5% and
the MTF lending rate at 18%. The management is not looking to grow
aggressively in this product.
D. CAC has been trending down and the company takes around six months to break
even. While ARPUs are lower in smaller tier cities and towns, scale benefits allow
the breakeven duration to be maintained within six months.
A. The Insurance Repository business has a revenue potential of INR5-10b for the
industry as a whole. Many existing services in the MF segment can be offered in
the Insurance segment as well. If LIC wants to start its own repository, an
amendment to the Insurance Act, which restricts Insurance companies to own
more than 10% in any intermediary, will be needed. This is a long drawn process
and will take time, but it appears that IRDAI wants to implement the same at
the earliest. CAMS is hopeful of retaining market share in this segment.
B. The AIF/PMS segment offers a huge growth opportunity as fund managers add
more schemes and see an increase in distributors and customers. The scale will
Computer Age Management
ensure that incrementally more AIF and PMS fund managers use RTA services.
Services
Also, existing ones will widen the scope of services.
C. In the MF segment, no major cuts occurred in terms of fees with AMCs. The
drop in yields is owing to the tiered structured, which was offset by the rising
share of equities in the AUM mix.
D. Account Aggregator is a multi-year opportunity. It is expected that by Dec’22 all
MFs and most Banks and regulators will be on the account aggregator platform,
which will increase the awareness and adoption by customers. Lending and
Wealth Management will be the two primary use cases, and the same will
increase going forward.
A. Growth momentum: Apr’22/May’22 disbursements were impacted adversely

since the company prepared to align with the new RBI guidelines. However,
disbursements have picked up pace with Jul’22 clocking disbursements of INR12b
and this momentum has only improved in the subsequent months of Aug/Sep’22.
B. Margin expansion: The company has increased interest rates by ~120bp leading
to expansion in yields (current average yields of 20.3%) while the rise in
borrowing costs is likely to be gradual. Management guided for ~40bp margin
expansion in FY23.
C. Geographical loan mix: 60% of the branches are located in the core markets of
CreditAccess Grameen
Karnataka, Maharashtra and Tamil Nadu that account for 80% of the loan mix.
The company plans to gradually reduce the concentration in core states with
stronger growth from other states over the next three years. The company is
witnessing healthy growth traction in non-core markets with 60% of new
borrower additions from the non-core states.
D. Guidance: Extremely focused on customer acquisitions of ~0.1m every month.
Maintained its guidance of 25% AUM growth in FY23 and RoA of 4.0-4.5%. Credit
costs guidance maintained at ~1.8-2.0% for FY23 including write-offs of residual
stress in 1HFY23.
September 2022 64
18th AGIC 2022
Company Takeaway
A. ICICIGI is losing market share in the Motor OD business as it has consciously
reduced its exposure to the Passenger Car segment, where the competition has
continued to be on the higher side, especially from smaller General Insurance
players. Few players are operating with a combined ratio of over 120% in this
segment, which is not sustainable over the longer term.
B. On the Motor TP side, with IRDAI pushing for the implementation of the Motor
Vehicles Act, the claim intimation period is likely to reduce to six months. In the
past, the average intimation period was around five years and the settlement
ICICI Lombard General
period was four-to-five years. This will reduce the float income and loss ratios for
Insurance Company
ICICIGI. Overall, this move should be RoE accretive.
C. The investment in the agency distribution channel is likely to reap benefits over
the next 18-24 months. Currently, ~5,000 agents have been hired under the
1,000 agency managers appointed in FY22. Overall, 15-20 agents will be hired
under each agency manager.
D. In the initial phase, the combined ratio for the Retail Health segment is likely to
be the above the 100% mark, but eventually the management expects it to settle
in the 95-96% range.
A. Strong visibility on demand momentum: Growth in first quarter is generally sluggish

while second half of the fiscal year witnesses healthy business volumes supported by
festival and marriage seasons. Further, combination of an increase in prices of
vehicles and healthy rise in booking volumes at dealership and OEM levels (with
limited cancellations) signals that the disbursement momentum will be healthy even
in the remainder of FY23. Management guided for an RoA of 2.5% and 15% RoE as
part of Vision 2025.
B. Strengthened the leadership team: The company has strengthened the senior
leadership team with multiple appointments including COO, CRO, CTO and COO –
Digital Finance over the last two years.
C. Collection war room: Setup of the collection war room has led to improvement in
MMFSL
collection efforts of the company. It now tracks and analyses the scrub data of the
customers on a monthly basis and the same is disseminated to collection officers to
improve collection efficiency. Institutionalized the process of informing the
customers of their position in the delinquency bucket and repercussions of the
same.
D. Asset quality: The restructured portfolio has reduced and many of the customers in
this pool are in the 0-30dpd buckets. Pursuant to the implementation of the RBI NPA
circular on 1 Oct’22, the company will additional provide disclosure to explain the
gap between Ind-AS Stage 3 and IRACP GNPA. Post implementation of the RBI NPA
circular, it does not expect any significant additional provisions to deliver NNPA
(under IRACP) of <6% by Mar’23.
A. The claim ratios remained elevated in 2QFY23 till date, owing to: 1) COVID-related
tests and the addition of consumables to non-COVID claims, and 2) the surge of
monsoon-related ailments in 2QFY23.
B. The decline in the Corporate Health book should be arrested going forward as most
exits are now behind it. Also, the benefit-based credit-linked business from the
Star Health and Allied
bancassurance channel should scale up going forward.
Insurance Co.
C. The management is focusing on improving agent productivity, increasing sum
assured per policy, and foray into the HNI segment. STARHEAL is looking to
implement wellness initiatives to enhance its offerings. Specialized products
remain a focus area for the management as profitability in the same is relatively
better.
September 2022 65
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Company Takeaway
INFRASTRUCTURE
A. Operational performance: The company is currently having an order book of
INR120b. J Kumar continues to be a net debt free company with stable margins
despite high commodity prices.
B. Metro segment opportunity: There are huge opportunities in the Metro
segment with several metro lines planned. Metro lines 5, 10, 11, 12, 13 are
expected to come up for bidding. For Goregaon Mulund Link Road (GMLR), the
company has submitted the RFQ for the packages.
C. Metro Line 3: With new government, there has been an acceleration in
execution and the project is very much on track to be completed latest by CY24.
The trial runs have also been started in certain sections.
J Kumar Infraprojects
D. Project status: J Kumar completed Mumbai Metro Line 7, JNPT port
connectivity; Delhi elevated Metro project and Ahmedabad Metro. The JNPT
port connectivity project (35km) has been operational for public from Apr’22.
Line 2A is almost complete and Line 3 is 85% complete. There are no slow
moving projects in the order book.
E. Guidance: The company has won INR14b worth of projects in 1QFY23. It is
aiming for an order inflow of INR50b in FY23E and looking to have an order book
of INR120-130b by end-FY23. J Kumar is targeting a revenue of ~INR80b by CY27
and margins are likely to sustain at 15% levels. It would incur a capex of
~INR1.5b in FY23E, which would majorly be used towards procurement of a
tunnel boring machine.
A. Focus on Roads and Highway projects: KNRC continues to focus on Roads and
Highway projects, with a concentration in South India. The management
continues to see strong growth in the Roads and Highways segments, aided by
government initiatives such as Bharatmala Project. It will selectively bid for
projects in other segments.
B. Equity infusion in HAM: The incremental equity requirement for HAM projects
will be INR3b/INR1.6b/INR1b in FY23/FY24/FY25.
C. Order book: As of Jun’22, KNRC had an outstanding order book of INR93.5b. EPC
Road and HAM projects constitute 76% of its total order book, while Irrigation
projects constitute the balance. The company is bidding for bigger flyover
KNR Construction
projects, and may bid for projects with a ticket size in excess of INR20b. The
management hopes to win INR40-50b of new projects in FY23.
D. Receivables from Irrigation projects: Current outstanding stands at INR8.5b.
The company is expecting to receive payments over the next few months. It
continues to execute work every quarter from its existing order book.
E. Guidance: For FY23, the management has guided at a revenue/EBITDA margin of
INR35b/18%. It is targeting an order inflow of INR40-50b in FY23. The
management has guided at 15% YoY growth for the next five years. Its focus will
be on Road and Highway projects and will not bid below its threshold margin
profile. Annual capex will be INR1.3-1.5b in FY23 and FY24.
September 2022 66
18th AGIC 2022
Company Takeaway
MEDIA
A. Business performance: While 1QFY23 saw a strong recovery from the
pandemic, reaching 90% of the pre-Covid levels, 2QFY23 remains majorly
impacted by a tepid response to the Bollywood movies and lack of releases
under the Hollywood and regional languages front. F&B segment, however,
continues to do well and remained above the pre-Covid levels.
B. Recovery in advertisement revenue: Delay in recovery of ad-revenue is
expected led by the weak 2QFY23 performance. Management expects recovery
to take place after one or two quarters of stable box office performance and
footfalls.
PVR
C. Synergies from the merger: Management forecasts synergies from the merger
to occur majorly on the revenue front, which would mainly be led by improved
spend per head through the F&B segment. Synergies in cost will however
remain limited.
D. Focus on premiumization: The company is experimenting on the surge pricing
model that will charge higher prices for ticket based on occupancy threshold.
The share of premium screens (recliner + director’s cut), which currently stands
at 12% of total seats is expected to go up, as the company continues to focus on
delivering experience.
Company Takeaway
METALS
A. Govt. focus on recycling: The govt. has recently notified new regulations related
to recycling of batteries. This has led to renewed focus in lead battery recycling,
which is positive for the company as ~70% EBITDA is currently being generated
through lead recycling. The company has also requested the govt. to impose
GST on purchase of second-hand batteries on reverse charge basis to bring the
unorganized sector within the fold of GST and thereby making Gravitas more
competitive than the unorganized sector.
B. Strong growth trajectory: With about 30 years of experience in recycling,
Gravitas is embarking on a strong growth trajectory with a roadmap to increase
revenue to INR70b over the next four years from INR22b with a high RoCE. The
growth will be obtained through both existing and new recycling opportunities
in India and overseas.
C. Diversifying while growing: The company has so far been predominantly
Gravitas involved in recycling lead. However, now it has diversified into recycling plastics,
aluminum and steel. In addition, the company is also adding rubber, paper and
copper to their recycling portfolio.
D. Focus on maintaining high RoCE with growth: Gravitas will continue to focus on
maintaining high RoCE in excess of 30% through various means including: a)
reducing the cost of scrap, b) reducing logistics cost, c) achieving economies of
scale in all the new lines of businesses and d) increasing share of value added
products such as alloys, which command a higher margin.
E. Growth capital largely from internal accruals: Management highlighted that it
will require about INR13b capital over the next four years to achieve a turnover
of INR70b from current run rate of INR22b. It plans to fund about INR9b
through internal accruals and raise debt for the balance INR4b given its
comfortable debt position both in absolute terms as well as in terms of net debt
to equity and net debt to EBITDA.
September 2022 67
18th AGIC 2022
Company Takeaway
Vedanta A. Aluminum business: Management highlighted that the aluminum division has
the potential to deliver an EBITDA of USD1,100-1,200/t at a fully expanded
capacity of 3mt with increased share of: a) captive alumina to 100% from 45%,
b) captive coal to 75% from nil, and c) value added products to 90% from 60%.
Vedanta highlighted that the total capex for the aluminum business is
~USD1.3b. Opening of the captive coal mines is likely to be the major source of
cost reduction in aluminum business.
B. Semiconductor business: This business will be housed in the promoter entity
(VRL). VEDL will have no stake in the same. The total capex of USD20b will be
used in: a) glass fab and b) semiconductor chips business. Vedanta’s promoter
entity will not have any JV in the glass fab business. However, it will have a
62:38 JV with Foxconn in the semiconductor chips business. The total
investment required in these two businesses stands at USD20b comprising 60%
subsidy under the PLI scheme from the government and balance 40% (USD8b)
investment needed from VRL Foxconn over the next eight years in the form of
both debt and equity.
C. Debt repayment at promoter entity: The promoters have a target to reduce
debt at the promoter level to USD5.9b by Mar'25 from USD9.9b at end-Mar'22.
i.e., USD4b debt reduction over three years of which VRL has repaid USD1.5b
since Mar'22.
D. Oil and Gas: The management expects to reach 300 kboped production from
current levels of 161 kboped by Mar’24 driven by increasing drilling of 50 wells,
70 infill wells that would mitigate natural decline and five pilot wells in shale.
This growth will entail a capex of USD687m including the capex for augmenting
the reserves and resource.
Company Takeaway
Oil & Gas
A. A first LPG cavern in the country is being set up by the company. There are also
two new pipelines that are coming up. HPCL also plans to increase its EV
charging stations to 3K from 1K currently in the next 4-5 years. The Mumbai
refinery is also completely stabilized now.
B. The company hopes to expand retail outlets to 25K by FY26E. A new 9mmtpa
refinery and petchem at Barmer in Rajasthan is coming up of which the
mechanical completion should be completed by CY24E and stabilization should
HPCL be done by CY25E. A 5mmtpa LNG import Terminal at Chhara Port in Gujarat is
to be commissioned by end-CY22E. The current petchem expansions will make
HPCL the second biggest petchem player in India.
C. The total FY22 capex stood at INR160b. Capex guidance for FY23E is at INR145b
with investments in refineries at INR55b, Marketing at INR43b, Natural gas at
INR6.5b, Bio fuels and Renewable energy at INR6.5b and equity investments in
JV and subsidiaries at INR34b with estimated capex of INR610b for the next five
years. Debt in the books was INR430b as of Mar’22 and INR470b as of Jun’22
A. The total capacity of the company is 240ktpa with four production plants, one each
in Ankleshwar GIDC, Taloja, Dahej SEZ and Daman. There is one plant which is
situated in Panol, UAE through its 100% subsidiary. All the plants are running at full
Panama Petrochem utilization levels with utilization rates going up to 120% of the installed capacities. It
is adding 35ktpa in 2HFY23E and another 60ktpa in FY24-25E.
B. The management sees market opportunities to last for the next 15 years at
least and Panama is moving from conventional oils towards specialized oils by
September 2022 68
18th AGIC 2022
Company Takeaway
launching new products for the existing product categories. About 65% of the
revenue comes from specialized products with EBITDA contribution of 50-70%
to total EBITDA. Exports form 45% of total production spread across 75
countries.
C. There has been a shift from customers also to more environmental products.
R&D has been a major part of success for the company and the product pipeline
remains strong for Panama. It launched products for the oil drilling industry last
year. The top 3 segments for the company are cosmetics & Pharma, ink and
rubber that contribute ~65% to the total production.
Company Takeaway
Real Estate
A. Demand trend and launches: Residential demand remains steady. A delay in
RERA approvals, due to certain changes in regulations, has led to launches
pushed to 2HFY23. Over the next 15 days to four months, the management
expects to launch INR60b worth of projects, of which 50% will be released for
sale. It doesn’t expect any material impact on demand until interest rates are
hiked by another 100-150bp, and has a strategy in place to nullify the impact.
B. Pre-sales target: Despite the delay in launches, it reiterated its pre-sales
guidance of INR23b for FY23 and expects to reach INR30b by FY24. Over the
next three-years, it expects to clock cumulative pre-sales of INR80-90b.
C. Pipeline and cash flow: The management is targeting a large part of pre-sales
over the next three years. The same is expected to be met through INR10b of
Kolte Patil Developers
existing inventory and INR60b of upcoming launches. The company has pending
sales receivables of INR15b. The cost to complete, including overheads, stands
at INR15b.
D. Business development: KPDL is targeting INR70b of project additions across the
three markets of Pune, Mumbai, and Bengaluru. In Pune, the company is
targeting projects in the under-penetrated micro markets, with a monetization
timeline of five years. The same in Mumbai is 24-30 months.
E. Cost and margin: The company didn’t realize a material impact of the increase
in cost as most ongoing projects were at fairly advanced stages of construction.
Overall, it expects project margin to remain at 25-30%, while consolidated
EBITDA margin is expected at 20-22%.
A. Demand: SOBHA is seeing steady demand in markets where it has a presence. It

intends to grow on a consistent basis and aspires to double the sales run-rate
from current levels.
B. New project pipeline stands at 11msf, which will be launched over the next two
years, with the bulk of the launches occurring over the next three-to-four
quarters. While SOBHA has increased its focus on making its existing land bank
developable, the targeted sales velocity in the near term is not contingent on
Sobha these land parcels getting launched.
C. Balanced strategy: The management intends to follow a balanced strategy
towards growth without compromising on the strength of its balance Sheet.
Although optimism around demand remains strong, the management believes
that the industry should remain cautious on the supply side.
D. RoE looks depressed due to low margin over the last two years, led by various
challenges. The same will gradually improve from here on. While it reflects in
P&L with a lag, it is already healthy from a cash flow perspective.
September 2022 69
18th AGIC 2022
Company Takeaway
RETAIL
A. Average consumption pattern: As per the management, 1.5 pairs are the
average consumption in India. The audience that CAMPUS caters to has an
average consumption (in terms of volume) of 2.2 pairs, which it targets to
increase to 2.5 pairs.
B. Capex plan: The company will continue to install additional capacity over the next
three-to-five years, with capex in line with revenue generation. With a capex and
Campus Activewear inventory of INR1b each, CAMPUS generates INR5b of sales by manufacturing 8m
pairs at 80% capacity utilization. This generates a RoCE of 40%.
C. Number of stores: CAMPUS has 160 EBOs, split equally between COCO and
FOFO stores. It generates 49% gross margin from its FOFO stores.
D. Returns: Online returns are close to 25%, of which 80% are return to origin
(RTO) and 20% are return to vendor (RTV). CAMPUS has to bear logistics and
other expense in RTV. It undertakes 100% outright sales to MBOs.
A. Focus on ethnic wear: Raymond plans to expand its ethnic wear segment given
its growth opportunity. Currently, the segment's products are present across
300 Raymond stores. The company expects the EBO store count for this
segment to reach 100 by end-FY23. The company will look to open 80-100
stores annually, mainly through the franchise route.
B. Garment export business to grow: The company has seen strong traction led
by the China+1 policy. It has recently acquired order from Hugo Boss for ~10%
of their shirting requirements in addition to customized suiting order from a
large supplier in the US. The company looks to expand its manufacturing
capacity to 7-8m garments from 4m garments, as it has acquired a new facility
Raymond
in Andhra Pradesh to set-up 7-8 manufacturing lines.
C. Witnessing traction in B2C shirting: The company will look to improve its
capacity under the shirting segment by 2.5x over a five-year period and expand
the business mainly through distribution. It has further launched two new
shirting lines viz. Whites and Monarch, targeting the younger audience.
D. Real estate segment: The real estate project undertaken in Thane has seen
sales of 65% of the total inventory. The company has started developing this as
a separate segment with an employee base of 180 and is now looking to
expand within Mumbai Metropolitan Area through JDA outside Thane, to
conserve capital investment.
Company Takeaway
Technology
A. Demand: The company will continue to prioritize growth over margins. The
management suggested that IT has evolved over the years and IT spends are
not the first in the list to cut down on in case of a recession. The pain due to
macro challenges is largely in the Retail, CGP and Energy segments and the
company does not have significant exposure in those areas. The company has
aspiration to hit USD2b in revenue with 21% margin though it has not
Coforge
communicated the timeline yet.
B. Margin: The company has seen a structural shift to offshore revenue bringing it
to 48% from ~36-37% five quarters back aided by large deal wins that have
supported margins. Utilization is a good tactical margin lever of the company
and it is trending down due to high fresher additions. The management said
every USD300m revenue will add 75-100bp to margins. Its aspirational target
September 2022 70
18th AGIC 2022
Company Takeaway
to hit 21% margin is encouraging though the timeline is yet to be
communicated.
C. Attrition: Targeted wage hikes as efforts to retain employees have worked for
the company in terms of controlling the attrition. The company saves on
backfilling cost as it has lower attrition than its peers. It has started seeing
quarterly attrition to ease in some pockets and expects LTM attrition number
to trend down in a few quarters too.
D. Capital Allocation: The company is keen on inorganic growth if it finds the right
asset at the right price.
A. Demand: There is more near-term pain in Europe than in the US. Management
suggested that revenue is resilient in nature despite the macro concerns. It has
not seen any impact on business or deal pipeline until now. Management is
seeing a marginal shift towards cost-focused deals that have a higher TCV.
B. Margin: Management has comfort on margins as the company has ramped up
on fresher hiring over the last few years and is now beginning to bill their
HCLT services. It has seen pricing improvements although not across the board. The
management continues to expect margins to be at the lower end of the
guidance as wage hikes will be compensated by higher utilization, pricing and
freshers turning billable.
C. Outlook on P&P: The management sees lots of opportunity in P&P as the
industry is moving towards software usage. It has already recovered 68% of the
investment and is looking to recover the balance in the next two years.
A. The growth remains strong and the management suggested that it aspires to
grow in double digits. The growth this year is expected to be in low double
digits. The revenue growth is likely to be muted in 2QFY23 due to seasonality
but will bounce back in 3Q.
Matrimony B. It is not reacting much to the competition in terms of advertising intensity. The
company plans to keep the losses rangebound. It will contain the losses as
growth becomes stronger.
C. Though Jeevansathi has made paid services free to use, it is not impacting the
company significantly in South.
A. Otipy has already become the largest fresh produce commerce player in
Delhi/NCR with 120k orders weekly and on track to become India’s largest B2C
fresh produce player. Its unique community group buying model is helping
more than 10k resellers across Delhi NCR.
B. Otipy has built an advanced tech operating system that is fit to tackle the
Otipy complexity of fresh products including WMS, QR-based traceability, geo-
fencing, forecasting & quality control.
C. Otipy has the best-in-class metrics with: 1) lowest logistics cost – INR25 last
mile delivery cost/order, 2) 4% wastage, 3) 40% customer value retention, and
3) INR300 CAC. It has an annualized revenue run-rate of INR1.6b with 22%+
gross margin.
September 2022 71
18th AGIC 2022
Company Takeaway
TELECOM
A. Capex and RoCE: Around 2% of capex is maintenance-related. It has guided at
a total capex of INR300m in the medium term, and expects to increase the
same to INR400m (up INR100m due to Cable installation). It aims to maintain a
medium-term RoCE of 25-30%.
B. EBITDA margin: The management reiterated its 23-25% EBITDA guidance,
given the 25%/10-12% margin from Digital platform services/core business.
Tata Communications C. International revenue mix to increase: Revenue mix split between India and
international stands at 60:40. The management aspires to grow more
internationally, with the share of international in the overall revenue pie at 60-
65%.
D. Others: a) Normalization hasn't picked yet. However, there is good visibility in
its order book. b) The supply chain issue, with regard to semiconductor
storage, is a headwind due to the Russia-Ukraine war.
Company Takeaway
Agriculture
A. Segmental shift: The management is focused on its own branded product. B2C
sales, which accounted for 15% of total revenue in FY22, are expected to
increase to 35%/~50% in FY23/FY24.
B. New products: The company has launched its first patented Insecticide
product – ‘Ronfen’ – in India, with a potential market size of ~INR80b. Ronfen
will help the farmer save cost by more than 50% as it is more cost-effective and
Best Agro Life
eradicates the requirement of additional labor.
C. Guidance: The management has guided at 30% revenue growth and an EBITDA
margin of 18-20% in FY23.
D. Working capital: Currently the working capital of company is high due to
launch of new products. The management aims to reduce the working capital
cycle to 90 days over the next one-year.
A. New products and customer addition to lower concentration risk in the

Agrochemical business: Globally, seven key agrochemical companies
constitute 60% of the Agrochemical industry. The concentration of customers
and products is a key risk in the Agrochemical segment. The management is
strongly focusing on the addition of new customers and expansion of its
product portfolio.
B. Inorganic growth in Pharma: PI is looking at inorganic growth options in the
Pharma segment in domestic as well as global markets. It is evaluating its
PI Industries
acquisition options in APIs and Intermediates. The long-term focus of the
company will be in differentiated products.
C. The CSM segment will grow organically with label as well as geographical
expansion of existing products. The dynamics for the CSM business changes
annually due to changes in customer and product concentration, given the
saturation of products and product launches.
D. The business shift in CSM from Europe to other countries will take time for
Active Ingredients, but it will take a lesser time for Intermediates.
September 2022 72
18th AGIC 2022
NOTES
September 2022 73
18th AGIC 2022
Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >=15%
SELL < - 10%
NEUTRAL > - 10 % to 15%
UNDER REVIEW Rating may undergo a change
NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30 days take appropriate measures to make the recommendation
consistent with the investment rating legend.
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September 2022 74

MOSL AGIC - Highlights From The Conference

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MOSL AGIC - Highlights From The Conference

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AGIC-2022 HIGHLIGHTS

LEAVING A LASTING IMPRESSION

Dr. Anish Shah

Reigniting for growth

Realization trend Trend in EBITDA margin

Net realizations (INR/unit) EBITDA (incl. MVML) (%)

14.8 14.2 14.2 13.7

13.1 12.3 12.4

Trend in return profile FCF to improve despite higher capex plans

(32) (45) (33) (32)

Source: Company, MOFSL Source: Company, MOFSL

Mr. Sumant Kathpalia

Business segments witnessing steady recovery

Loans (INRb) YoY Gr (%) Deposits (INRb) YoY Gr (%)

PPoP/Prov (x) PPoP/Loans (%) RoE (%) RoA (%)

Source: Company, MOFSL Source: Company, MOFSL

Mr. Nilesh Shah

Surging Retail F&O activity is not risky as perceived

SIPs will continue to be the driving force for MF investments

Account at a PAN Card Demat Active NSE Unique MF

Demat accounts (m) Penetration 65.0%

Source: MOFSL, CDSL, NSDL Source: Angel One, MOFSL

MF Unique investors more than 2x in 4 years MF Penetration low in India

Source: MOFSL, HDFC AMC Source: MOFSL, Prudent Corp RHP

Mr. Debashis Chatterjee

Demand resilience led by growing tech criticality

Revenue grew 4% QoQ in 1QFY23 Margin improves 20bps in 1QFY23

Revenue growth (QoQ %) EBIT margins

Source: Company, MOFSL Source: Company, MOFSL

Utilization moderates in 1QFY23 Offshoring touches new highs in 1QFY23

Source: Company, MOFSL Source: Company, MOFSL

Mr. Anil Sardana

Distribution reforms and energy transition – leading the way

Reforms in distribution network had varied outcome; more reforms needed

Consumer first approach to bring in efficiency in the transmission system

Transitioning to green energy, leap frogging into the future

Shri Swami Ramdev

Laying out a roadmap for long-term stuctural growth

Vision to expand the plantation business by 10x from current levels

Ms. Falguni Nayar

Well positioned to ride the upcoming e-com growth in India

Creating a market through consumer education

Identifying and solving the problem of spurious products

Mr. Nissan Joseph

New footprint additions

Margin to hover at current level

Source: Company, MOFSL Source: Company, MOFSL

Source: Company, MOFSL Source: Company, MOFSL

Smt. Ashwini Bhide

Mumbai Metro line 3 – One of its kind project to be operational soon

Metro line 3 – to start soon; would ease congestion significantly

Project to benefit Mumbai in several ways

Project images Project images

Project images Project images

Growth at accelerated pace through a portfolio of brands:

Source: Company, MOFSL Source: Company, MOFSL

ONDC: Disaggregation of E-commerce to grow the addressable market

Decentralized network to encourage unbundling and interoperability

Mr. Harish Mehta

Unique industry culture of colloborative approach defines Indian IT

Strong foundation and culture sets IT services industry apart

A. Adjusted for seasonality, the demand momentum continues to stay strong,