BULLS BEARS India Valuations Handbook 20221103 MOSL

Sectors trading at a premium
Sp. Chemicals
Infrastructure
Banks – PSU
Technology
Cement
Consumer
Real Estate
Oil & Gas
Banks - Private
Logistics
HIGHLIGHTS – OCT’22 EDITION
Retail  Nifty bounces  All major sectors  All major
back and closes ended higher in economies end
Healthcare above 18k in Oct’22 higher in Oct’22
NBFCs Oct'22  PSU Banks, Capital  Over the last 12
 FII (USD1b) and DII Goods, Tech, and months, the MSCI
Automobiles (USD1.1b) both Private Banks - the India index (+2%)
Metals record inflows top gainers has outperformed
 India has emerged  Consumer and the MSCI EM index
Media as a shining star in Media the only (-33%)
Telecom CY22 with healthy laggards
Sectors trading at a discount outperformance
BULLS &
Deven BEARS
Mistry | Nov 2022
– Research Analyst (Deven@MotilalOswal.com)
Contents
STRATEGY About the product
Market makes a smart comeback in Oct’22; Pg 03 As the tagline suggests, BULLS & BEARS is a monthly
FIIs/DIIs both record inflows handbook on valuations in India. It covers:
 Valuations of Indian market vis-à-vis global markets
DEEP-DIVE FOR THE MONTH  Current valuation of companies in various sectors
Banking: Healthy earnings progression to aid Pg 06  Sectors that are currently valued at a premium/
continuous re-rating discount to their historical long-period averages
NOTES:
INDIAN EQUITIES  Prices as of 31st Oct’22
Nifty closes above 18k; adds 918 points in Pg 07
Oct’22  BULL icon:
Sectors trading at a premium to their historical
average
GLOBAL EQUITIES  BEAR icon:
All major economies end higher in Oct’22 Pg 13
Sectors trading at a discount to their historical
average
SECTOR VALUATIONS
 Valuations are on a 12-month forward basis, unless
Two-thirds of the sectors trade at a premium to Pg 20 mentioned otherwise
their historical averages  Sector valuations are based on MOSL coverage
companies
COMPANY VALUATIONS  Global equities’ data are sourced from Bloomberg;
Half of the Nifty constituents trading at a Pg 40 Nifty valuations are based on MOFSL estimates
discount to their historical averages Investors are advised to refer to the important disclosures appended at the
end of this report.
BULLS & BEARS | Nov 2022 2

Strategy Market makes a smart comeback in Oct’22; FIIs/DIIs both record inflows
 Nifty bounces back and closes above 18k in Oct'22: The Nifty, after declining in Sep’22, bounced back smartly in Oct’22 with
5.4% MoM gain – the second highest since Aug’21. India has emerged as a shining star in CY22 registering a healthy
outperformance amid varied global macro headwinds including, inflation, interest rates, currency, and geopolitics. While
most global equity markets are down 20-25% in YTD’CY22, India is up 4% (in local currency). The Nifty Midcap 100 (+2.5%
MoM) and Nifty Smallcap 100 (+2.6% YoY) both underperformed the benchmark in Oct’22. In P/E terms, the Nifty Midcap 100
now trades at a 23% premium to largecaps, whereas the Nifty Smallcap 100 trades at a 16% discount to largecaps.
 All major economies end higher in Oct’22: Barring China (-4% MoM), Taiwan (-4%), and MSCI EM (-3%), Oct’22 saw all key
global markets such as Russia (+15%), the US (+8%), Korea (+6%), Japan (+6%), Brazil (+5%), India (+5%), the UK (+3%), and
Indonesia (+1%) close higher in local currency terms. Over the last 12 months, the MSCI India index (+2%) has outperformed
the MSCI EM index (-33%).
 FII and DII both record inflows: FIIs turned net buyers of USD1b in Oct’22, after withdrawing USD1.6b in Sep’22. Outflows
YTD stood at USD21.5b. DIIs remained net buyers of USD1.1b in Oct’22. Inflows YTD stood at USD30b.
 All major sectors ended higher in Oct’22: PSU Banks (+16%), Capital Goods (+7%), Technology (+6%), and Private Banks (+6%)
were the top gainers. While, Consumer and Media were the only laggards.
 Our view: The 2QFY23 corporate earnings have been in-line thus far with heavyweights, such as RIL, HDFC Bank, TCS, ICICI
Bank, and Infosys, registering in-line aggregate performance. The spread of earnings has been decent with 70% of our
universe either meeting or exceeding profit expectations. However, the growth is being led by just BFSI and Autos with
Metals, Oil & Gas and Cement posting a YoY earnings decline. As the benefit of the recent moderation in commodity costs
start accruing in 2HFY23E, we expect other sectors to contribute too. Markets have bounced back smartly in Oct’22. Nifty
now trades at 22x FY23E, comfortably above the LPA and offers limited upside in the near term, in our view. We reckon the
upside from here will be a function of stability in global and local macros and continued earnings delivery v/s expectations. In
our model portfolio, we maintain our OW stance on BFSI, AUTO, Consumer & IT and UW stance on Energy, Pharma, and
Utilities.
 Top ideas | Largecaps: Reliance Industries, Infosys, ICICI Bank, SBI, Bharti Airtel, ITC, Maruti Suzuki, Titan Company, Ultratech
Cement, IndusInd Bank, Hindalco, Apollo Hospitals, and Macrotech Developers.
Midcaps/smallcaps: Varun Beverages, Ashok Leyland, Jubilant Foodworks, Metro Brands, Vinati Organics, Cams Services,
Angel One, Lemon Tree Hotel, and VRL Logistics.

Key Exhibit India outperforms and emerges as a shining star in CY22
WORLD EQUITY INDICES IN CY22 TILL DATE IN USD TERMS (%) WORLD EQUITY INDICES IN LOCAL CURRENCY TERMS IN CY22 TILL DATE (%)
CY22 YTD Chg (%) - In USD 11 CY22 YTD Chg (%) - In local currency
19 8
4
-2 -4 -4
-7
-18 -19 -19
-26 -19 -21
-31 -31 -23
-36 -39
-29 -31
-31
India
Korea
Indonesia
India
Korea
Indonesia
MSCI EM
MSCI EM
Brazil
China
Brazil
China
Russia
Taiwan
Taiwan
Russia
UK
US
UK
Japan
Japan
US
PERFORMANCE OF MSCI EM V/S MSCI INDIA OVER THE LAST 12 MONTHS MSCI INDIA OUTPERFORMS MSCI EM BY 205% OVER THE LAST 10 YEARS
MSCI India Rebased MSCI EM Rebased MSCI India Rebased MSCI EM Rebased
113 370
10 Year CAGR: 5 Year CAGR:
102 290
101 MSCI India: 11.2% MSCI India: 11.1%
290
MSCI EM: -1.6% MSCI EM: -5.4%
89 210
77 130
67 85
65 50
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Apr-22
May-22
Oct-21
Dec-21
Jan-22
Mar-22
Aug-22
Jun-22
Oct-22
Nov-21
Jul-22
Feb-22
Sep-22

Key Exhibit World M-Cap declines at a faster space; India stands out
MCAP CHANGE IN THE LAST 12 MONTHS (%) - GLOBAL M-CAP DECLINED 22% (USD26.4T), WHILE INDIA’S M-CAP DECLINED ONLY 2%
0.6 0.8 3.3 42.2 9.0 4.9 2.6 1.4 0.6 1.4
Mkt cap chg 12M (%) Curr Mcap (USD Tr)
7 4
-2
-20
-26 -27 -29 -32 -33 -34
Indonesia Brazil India US China Japan UK Korea Russia Taiwan
INDIA’S MARKET CAPITALIZATION-TO-GDP RATIO (%) – MAINTAINS 100%+ LEVEL
112
104
107
Average of 79% for the period
81 79 83 80
71 69
64 66
56
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23E

Deep-dive Banking: Healthy earnings progression to aid continuous re-rating
 Growth momentum has accelerated for banks over the past few quarters, Trend in Private Banks P/B – one-year forward
fueled by a healthy pick-up in corporate portfolio. Growth in retail, business
Private Banks P/E (x) 10 Yr Avg (x)
banking and SME segments continue to remain healthy. While we remain 35.0
watchful of rising inflation and further monetary tightening which can dent
the demand and delay the capex recovery, we nevertheless estimate 25.0
20.4
systemic loans to grow at ~13%/14% over FY23E/FY24E. 16.5
15.0
 Margins have exhibited a healthy improvement across banks, aided by
rising interest rates and a higher mix of floating rate book. While the same 5.0
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
is likely to exhibit positive bias in the near term, we remain watchful of
margins over FY24 as funding cost is likely to increase with a lag and
garnering deposits would be challenging for banks. Premium/discount of Private Banks relative to Nifty P/B
 On asset quality, banks continue to see an improvement, driven by a
decline in slippages and higher recoveries/upgrades. SMA book has 15.0
Private Banks Relative to Nifty PB (%) 10 Yr Avg (x)
declined across banks, providing comfort on future asset quality. PCR has
remained healthy, with banks continuing to carry additional provision 0.0
buffers, which should result in credit cost being over FY23-24E.
-15.0 -5.3 -15.0
 Historically, private banks (10-year average P/B multiple of 2.5x) have
always traded at a premium to PSBs (0.8x), owing to their (i) superior -30.0
earnings profiles, (ii) higher return ratios, and (iii) consistent market share
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
gains. Private banks currently trade at 2.6x one-year forward P/B,
marginally higher than the 10-year average that appears compelling.
Sustained recovery in loan growth, along with benign credit costs, would Trend in Private Banks P/B – one-year forward
drive earnings, resulting in a further re-rating of the stocks. Private Banks P/B (x) 10 Yr Avg (x)
4.0
 The P/B for PSBs at 1.0x is moderately above its 10-year average of 0.8x.
PSBs have been reporting healthy improvements in their operating 3.0
performances and we believe earnings are poised for a strong rebound 2.6
(34% CAGR over FY22-24E). Along with improving asset quality trends, this 2.0 2.5
would enable a healthy 11–23% CAGR in ABVs over FY22–24E. We estimate
PSBs to deliver RoA/RoE of 0.9%/13.7% for FY24, while valuations remain 1.0
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
undemanding at 0.5–0.8x ABV for most barring SBIN. SBIN remains our top
pick, followed by BoB and CBK.

Indian equities Nifty closes above 18k; adds 918 points (+5.4%) MoM in Oct’22
 The Nifty, after declining in Sep’22, bounced back in Oct’22 with 5.4% MoM gain – the second highest since Aug’21.
 All major sectors ended higher; PSU Banks (+16%), Capital Goods (+7%), Technology (+6%), and Private Banks (+6%) were the top gainers. Consumer
and Media were the only laggards.
Nifty MoM change (%) — bounced back in Oct’22 Sectoral MoM change (%) – PSU Banks, Capital Goods, Tech top gainers
14.7
Nifty MoM Change (%) 16 MoM Chg (%)
11.4
8.7
7.8
7.7
7.5
7.5
8.7
6.6
6.5
5.4
4.1
3.5
3.5
3.5
2.8
2.8
7 6
2.2
4.0
6 6
1.5
1.5
1.1
1.1
5 5
0.9
0.9
6
0.3
0.3
4 3 3 2 2 2 2 2
-0.1
-0.3
-0.4
-0.4
-0.9
-2.1
-1.1
-1.2
-1.7
-2.5
-2.8
0 0
-3.0
-3.1
-3.7
-3.9
-4.8
-5.7
-6.4
Smallcap 100
Healthcare
Metal
Media
Nifty-50
Consumer
Real Estate
Bank PSU
Bank PVT
Finance
Infra
Auto
Utilities
Telecom
Technology
Oil & Gas

Capital Goods
Midcap 100
-23.2
Apr-19
Apr-20
Oct-20
Apr-21
Jan-22
Apr-22
Oct-19
Oct-21
Oct-22
Jan-19
Jul-19
Jan-20
Jan-21
Jul-20
Jul-21
Jul-22
Sectoral YTD’CY22 change (%) – Utilities, PSU Banks, and Autos were top
Institutional flows (USD b) – FII and DII both record inflows in Oct’22 gainers while Technology, Real Estate, and Healthcare were top losers
FIIs (USDb) DIIs (USDb) CY22YTD Chg (%)
6.8
6.1
5.6
6.0
40 37
4.1
3.6
3.3
3.0
2.6
22 18 18 17
2.5
3.1
2.0
2.3
0.80
1.7
1.5
16
1.5
1.3
1.1
1.1
1.0
1.0
1.0
0.9
0.8
0.7
0.7
0.6
0.3
7 7 6 4 3
-2
-0.8
-0.9
-7 -7 -9 -14
-1.5
-1.6
-1.6
-1.7
-1.7
-2.2
-2.3
-3.8
-3.7
-4.9
-26
-5.0
-4.8
June -6.3
Capital Goods
Nifty-50
Metal
Media
Consumer
Real Estate
Bank PSU
Finance
Utilities
Auto
Bank PVT
Infra
Telecom
Technology
Oil & Gas
Midcap 100
Healthcare
Smallcap 100
July
July
Jan
Feb
Apr
Sep
Nov
Dec
Jan
Feb
Apr
Sep
Aug
Mar
June
Aug
Mar
May
Oct
May
Oct
2021 2022

Indian equities Breadth positive in Oct’22; 40 Nifty companies end higher MoM
 Best and worst Nifty performers in Oct’22: Axis Bank (+24%), Coal India (+16%), HCL Tech (+12%), L&T (+9%), and Infosys (+9%) were the top
performers, while Asian Paints (-7%), HUL (-5%), Tata Consumer (-4%), Indusind Bank (-4%), and Adani Enterprises (-3%) were the key laggards.
 Best and worst Nifty performers in CY22 to date: Adani Enterprises (+96%), Coal India (+68%), M&M (+61%), ITC (+60%), and Eicher Motors
(+49%) were the top performers, while Wipro (-46%), Tech Mahindra (-41%), Divis Lab (-23%), BPCL (-21%), and HCL Tech (-21%) were the top
laggards.
Best and worst Nifty performers (MoM) in Oct’22 (%) – Breadth positive; 40 Nifty companies end higher
24
16
12 9
9 9 8 8 8 8 8 7 7 7 7
6 6 6 6 6 5 5 5 5 5 5 5 5 5 4 4 4 3
3 2 2 2 2 1 1
0
0 -2 -2 -3 -3 -3 -4
-4 -5 -7
HCL Tech
HDFC Life
Maruti
TCS
Nifty
Bajaj Auto
BPCL
Axis Bank
Coal India
L&T
Hero Moto
Wipro
Cipla
Hindalco
Bajaj Fin.
HUL
UPL
Reliance Ind.
Dr Reddy's
Asian Paints
NTPC
ICICI Bank
Kotak Mah.Bk
Tata Steel
Infosys
Tata Motors
M&M
Eicher Motors
Bharti Airtel
Britannia
Grasim Ind
Adani Ports
Divi's Lab.
SBI
HDFC
Power Grid
UltraTech
Nestle
Titan Co
ONGC
IndusInd Bk
JSW Steel
HDFC Bank
SBI Life Ins

Bajaj Finserv
Sun Pharma
Tech Mah.
ITC
Adani Enterp.
Apollo Hosp.
Tata Consumer
Best and worst Nifty performers (YoY) in CY22 to date (%) – 64% of the constituents trade higher
96
68 61 60
49 39
34 29 28 25 24
23 22 20 13 13
12 9 9 8 8 7 6 6 6 4 4 4 3 3 3 2 1
-2 -5 -6 -8 -9 -10 -10 -12
-14 -15 -15 -17 -19-21 -21 -23
-41 -46
HCL Tech
HDFC Life
L&T
Maruti
Nifty
TCS
Coal India
Bajaj Auto
Hindalco
BPCL
Axis Bank
Cipla
Hero Moto
HUL
Bajaj Fin.
Wipro
Reliance Ind.
Kotak Mah.Bk
UPL
Asian Paints
Tata Steel
Dr Reddy's
M&M
Eicher Motors
NTPC
ICICI Bank
Bharti Airtel
Tata Motors
Infosys
Adani Ports
Britannia
ITC
IndusInd Bk
SBI
Power Grid
Titan Co
Grasim Ind
Nestle
Bajaj Finserv
HDFC
ONGC
UltraTech
Divi's Lab.
Adani Enterp.
Sun Pharma
SBI Life Ins
JSW Steel
HDFC Bank
Tech Mah.
Tata Consumer
Apollo Hosp.
Indian equities Midcaps outperform, Smallcaps underperform over the last 12 months
 Over the last 12 months, midcaps have risen 3% and largecaps 2%, while smallcaps have declined 10%. Over the last five years, midcaps/smallcaps
have underperformed largecaps by 13%/61%, respectively.
Performance of midcaps and smallcaps v/s largecaps over the last 12 months
Nifty Rebased Nifty Midcap 100 Rebased Nifty Smallcap 100 Rebased
118
106 103
102
94
90
82
70
Jun-22
Nov-21
Dec-21
Aug-22
Oct-21
Apr-22
May-22
Oct-22
Jan-22
Mar-22
Feb-22
Jul-22
Sep-22
Performance of midcaps and smallcaps v/s largecaps over the last five years
Nifty Rebased Nifty Midcap 100 Rebased Nifty Smallcap 100 Rebased
200
5 Year CAGR | Nifty: 11.8% | Midcap: 9.9% | Smallcap: 2.5% 174
160 161
120
113
80
40
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Indian equities Midcaps trade at a premium to largecaps
 In P/E terms, the Nifty Midcap 100 now trades at a 23% premium to largecaps at 24.2x, whereas the Nifty Smallcap 100 trades at a 16% discount to
largecaps at 16.4x.
12-month forward P/E for midcaps v/s largecaps (x) Midcaps trade at a 23% premium to largecaps
Midcap PE (x) Nifty PE (x) Midcap Vs Nifty PE Prem/(Disc) (%)
34 80
Nifty Avg: 19.7x
28 Midcap Avg: 18.6x
50
24.2 23
22 20
19.6 Average: -6%
16 -10
10 -40
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-17
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward P/E for smallcaps v/s largecaps (x) Smallcaps trade at a 16% discount to largecaps
Smallcap PE (x) Nifty PE (x) Smallcap Vs Nifty PE Prem/(Disc) (%)
29 20
Nifty Avg: 19.7x
Smallcap Avg: 14.2x
23 0
19.6
Average: -28%
17 16.4 -20 -16
11 -40
5 -60
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-17
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Source: MOFSL, Bloomberg for midcap, smallcap valuation

Indian equities Nifty P/E valuation at its historical average
 The Nifty trades at a 12-month forward P/E of 19.6x, near its LPA of 19.7x. P/B, at 3.1x, is at a 15% premium to its historical average.
 The 12-month trailing P/E for the Nifty, at 23x, is at a 7% premium to its LPA of 21.4x. At 3.4x, Nifty’s 12-month trailing P/B is above its historical
average of 2.9x – at a 18% premium.
12-month forward Nifty P/E (x) 12-month forward Nifty P/B (x)
26 3.8
23 3.3
3.1
19.6
19 2.8
10 Year Avg: 19.7x
10 Year Avg: 2.7x
16 2.3
12 1.8
Oct-14
Oct-12
Oct-13
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Trailing Nifty P/E (x) Trailing Nifty P/B (x)
29 4.0
25 3.5 3.4
23.0
21 3.0
10 Year Avg: 21.4x
10 Year Avg: 2.9x
17 2.5
13 2.0
Oct-19
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22

Indian equities Market capitalization-to-GDP continue at 100%+ level
 India’s market capitalization-to-GDP ratio has been volatile, reaching 56% (of FY20 GDP) in Mar’20 from 80% in FY19 and then sharply bouncing back
to 112% in FY22. The ratio is now at 107% (of FY23E GDP), above its long-term average of 79%.
 The Nifty is trading at a 12-month forward RoE of 15.7%, above its long-term average.
India’s market capitalization-to-GDP ratio (%) – maintains 100%+ level
112
104 107
Average of 79% for the period
81 79 83 80
71 69
64 66
56
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23E
12-month forward Nifty RoE (%) Trailing Nifty RoE (%)

17.3 17.8
15.6 15.7
15.6 16.1
14.9
13.9 10 Year Avg: 13.7% 14.4 10 Year Avg: 13.7%
12.2 12.7
10.5 11.0
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22

Global equities All major economies end higher in Oct’22
 Barring China (-4% MoM), Taiwan (-4%), and MSCI EM (-3%), Oct’22 saw all key global markets such as Russia (+15%), the US (+8%), Korea (+6%),
Japan (+6%), Brazil (+5%), India (+5%), the UK (+3%), and Indonesia (+1%) close higher in local currency terms.
 Indian equities have been trading at 22x FY23E earnings. All key markets continue to trade at a discount to India.
India (Nifty) v/s other markets

Prem / Disc MoM Chg (%)
` CY22YTD Chg (%) PE (x) PB (x) RoE (%)
to India PE (%)
Russia MICEX 15
Index Mkt Cap Local CY21 / CY22E / CY21 / CY22E / CY21 / CY22E / CY21 / CY22E /
In USD
Value (USD T) Currency FY22 FY23E FY22 FY23E FY22 FY23E FY22 FY23E US 8
US 3,872 42.2 -19 -19 20.1 17.4 -79 -79 3.9 3.7 20.6 22.2 Korea 6
MSCI EM 848 17.3 -31 -31 9.2 10.4 -90 -87 1.2 1.4 14.1 12.4
Japan 6
China 2,893 9.0 -21 -31 12.7 10.3 -86 -87 1.3 1.2 10.5 11.0
Brazil 5
Japan 27,587 4.9 -4 -26 15.7 14.9 -83 -82 1.8 1.6 11.7 10.5
India 18,012 3.3 4 -7 24.6 22.0 3.6 3.3 14.7 15.0
India 5
UK 7,095 2.6 -4 -19 14.6 8.9 -84 -89 1.8 1.5 14.3 14.0 UK 3
Korea 2,294 1.4 -23 -36 9.6 10.4 -90 -87 0.8 0.9 9.8 6.1 Indonesia 1
Taiwan 12,950 1.4 -29 -39 9.8 9.2 -90 -89 1.6 1.7 16.7 22.5 MSCI EM -3
Brazil 1,16,037 0.8 11 19 7.3 6.7 -92 -92 1.9 1.4 25.1 29.1 Taiwan -4
Indonesia 7,099 0.6 8 -2 23.2 15.1 -75 -81 2.3 2.0 10.0 -9.2
China -4
Russia 3,989 0.6 -31 -18 3.4 2.7 -96 -97 0.6 1.0 18.2 7.8
Source: Bloomberg/MOFSL

Global equities MSCI India continues to outperform MSCI EM
 Over the last 12 months, the MSCI India index (+2%) has outperformed the MSCI EM index (-33%). Over the last 10 years, it has outperformed the
MSCI EM index by 205%.
 In P/E terms, the MSCI India index is trading at a 155% premium to the MSCI EM index, above its historical average of 64%.
Performance of MSCI EM v/s MSCI India over the last 12 months MSCI India outperforms MSCI EM by 205% over the last 10 years
MSCI India Rebased MSCI EM Rebased MSCI India Rebased MSCI EM Rebased
113 370
10 Year CAGR: 5 Year CAGR:
102 MSCI India: 11.2% MSCI India: 11.1%
101 290
MSCI EM: -1.6% MSCI EM: -5.4% 290
89 210
77 130
85
65 67 50
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Apr-22
Oct-21
Dec-21
Mar-22
May-22
Aug-22
Jun-22
Oct-22
Nov-21
Jan-22
Feb-22
Jul-22
Sep-22
Trailing P/E (x) for MSCI India v/s MSCI EM P/E premium (%) for MSCI India v/s MSCI EM
MSCI India PE (x) MSCI EM PE (x) MSCI India Vs EM PE Premium (%)
45.0 170 155
35.0 130
MSCI India Avg: 23.2x 90

25.0 24.4 Average of 64%
15.0 50
MSCI EM Avg: 14.3x 9.6

5.0 10
Apr-15
Apr-13
Apr-14
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-13
Oct-12
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Source: Bloomberg

Global equities India’s share in the world M-cap moderates in Oct’22 after touching an all-time high in Sep’22
 India’s share in the world M-cap stood at 3.5% - above its historical average of 2.5%.
 India among the top five contributors to the world M-cap. Top 10 contributors accounted for ~81% of the world M-cap.
Trend in India's contribution to world m-cap (%) – at its all-time high

India's Contribution to World Mcap (%)
3.9
3.3 3.5
3.3
Average: 2.5%
2.7
2.1
1.6
1.5
Apr-08
Apr-14
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-08
Oct-07
Oct-09
Oct-10
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Top 10 countries constitute ~81% of world m-cap
Source: Bloomberg

Global equities Indian equities remain resilient over the last 12 months
 Over the last 12 months, global M-cap declined 22% (USD26.4t), while India’s M-cap has declined only 2.2%.
 Barring Indonesia and Brazil, all key global markets saw a decline in M-cap over the last 12 months.
M-cap change in the last 12 months (%)

0.6 0.8 3.3 42.2 9.0 4.9 2.6 1.4 0.6 1.4
Mkt cap chg 12M (%) Curr Mcap (USD Tr)
7 4
-2
-20
-26 -27 -29 -32 -33 -34
Indonesia Brazil India US China Japan UK Korea Russia Taiwan
Global market capitalization-to-GDP ratio (%)
166 Market cap to GDP (%)
120
100 93 87
80 77
47 45 45 44
32
US Canada Japan India France Korea UK Indonesia China Brazil Germany Russia
* Based on IMF GDP est for CY22 and latest Mkt cap
Source: Bloomberg, IMF’s GDP estimates for CY22

Nifty Half of the constituent companies trade at a discount to their historical averages
 Companies trading at a significant premium to their historical averages: Reliance Industries (+61%), Titan (+35%), Infosys (+32%), Nestle (+30%),
and Grasim Industries (+27%).
 Companies trading at a significant discount to their historical averages: ONGC (-73%), Tata Steel (-64%), Coal India (-38%), JSW Steel (-33%), and Dr
Reddy’s Labs (-26%).
Valuations of Nifty constituent companies

PE (x) Relative to Nifty P/E (%) PB (x) Relative to Nifty P/B (%)
Name Sector Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Bajaj Auto Auto 15.9 17.6 -10 -19 -11 4.2 4.4 -6 36 67
Eicher Motors Auto 28.2 31.0 -9 44 57 6.2 7.1 -13 101 166
Hero MotoCorp Auto 16.1 18.4 -13 -18 -7 3.1 5.0 -38 2 88
Mahindra & Mahindra Auto 19.2 18.5 3 -2 -6 3.3 2.7 22 6 0
Maruti Suzuki Auto 29.8 29.1 2 52 48 4.5 3.8 18 47 44
Tata Motors Auto NA 15.0 NA NA -24 3.0 2.0 54 -2 -27
Axis Bank Banks - Private 12.0 37.8 -68 -39 92 2.0 1.9 4 -34 -27
HDFC Bank Banks - Private 17.0 20.5 -17 -13 4 2.7 3.3 -18 -12 24
ICICI Bank Banks - Private 18.4 20.8 -12 -6 6 2.9 1.9 51 -6 -28
IndusInd Bank Banks - Private 10.2 19.3 -47 -48 -2 1.5 2.6 -42 -52 -4
Kotak Mahindra Bank Banks - Private 24.3 27.0 -10 24 37 3.1 3.3 -5 2 24
State Bank Banks - PSU 9.5 13.7 -31 -52 -31 1.4 1.1 28 -55 -59
Bajaj Finance Banks - NBFC 33.6 27.6 22 71 40 7.2 4.8 50 133 79
HDFC Banks - NBFC 31.9 35.9 -11 62 82 3.3 4.0 -20 6 52
HDFC Life Ins Banks - Insurance 71.7 84.8 -15 265 330 2.7 4.2 -37 -13 59
SBI Life Ins Banks - Insurance 67.8 57.0 19 245 189 2.4 2.5 -5 -24 -7
Grasim Inds Cement 15.6 12.3 27 -20 -38 2.2 1.7 26 -30 -35
Ultratech Cement Cement 32.6 31.9 2 66 62 3.4 3.3 1 9 25
Asian Paints Consumer 59.1 51.1 16 201 159 18.9 13.5 40 515 407
Britannia Inds. Consumer 50.0 41.1 22 155 108 33.9 18.0 89 1003 573
Hind. Unilever Consumer 56.3 48.6 16 187 147 12.9 26.9 -52 318 908
ITC Consumer 21.4 24.6 -13 9 25 6.5 6.2 4 110 132
Nestle India Consumer 72.7 55.8 30 271 183 95.2 42.6 123 2992 1497
Tata Consumer Consumer 50.6 41.4 22 158 110 4.2 2.7 58 36 -1

Nifty Half of the constituent companies trade at a discount to their historical averages (cont.)
PE (x) Relative to Nifty P/E (%) PB (x) Relative to Nifty P/B (%)
Name Sector Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg
Apollo Hospitals Healthcare 58.2 74.8 -22 196 279 8.6 5.6 53 180 111
Cipla Healthcare 26.4 27.9 -6 34 42 3.7 3.3 13 21 23
Divi's Lab. Healthcare 31.4 27.3 15 60 38 6.4 5.8 10 108 117
Dr Reddy’ s Labs Healthcare 19.2 26.1 -26 -2 32 3.0 3.7 -19 -3 38
Sun Pharma Healthcare 27.1 30.0 -10 38 52 4.0 4.2 -4 31 58
Coal India Metals 7.1 11.3 -38 -64 -43 2.5 5.0 -51 -20 89
Hindalco Metals 8.7 9.3 -7 -56 -53 1.3 1.2 13 -56 -56
JSW Steel Metals 8.0 11.9 -33 -59 -40 1.8 1.5 20 -40 -43
Tata Steel Metals 6.9 19.1 -64 -65 -3 1.0 1.2 -18 -68 -55
BPCL Oil & Gas NA 8.6 NA NA -57 1.4 1.9 -28 -56 -30
ONGC Oil & Gas 2.3 8.4 -73 -88 -57 0.5 1.0 -49 -83 -61
Reliance Inds. Oil & Gas 23.8 14.8 61 21 -25 1.9 1.5 24 -40 -44
Titan Co Retail 70.6 52.2 35 260 165 19.6 11.6 69 537 335
HCL Technologies Technology 17.8 14.7 21 -9 -26 4.6 3.5 31 51 33
Infosys Technology 24.8 18.7 32 26 -5 8.7 4.8 81 184 81
TCS Technology 25.5 21.7 17 30 10 12.6 8.4 51 310 214
Tech Mahindra Technology 16.2 15.0 8 -17 -24 3.2 3.0 6 4 13
Wipro Technology 17.4 16.6 5 -12 -16 3.1 3.0 4 0 12
Bharti Airtel Telecom NA 33.8 NA NA 72 4.9 2.7 78 58 2
UPL Others 10.0 12.3 -19 -49 -37 1.2 2.5 -50 -60 -8
Nifty 19.6 19.7 0 3.1 2.7 15

Midcaps Underperform largecaps in Oct’22
 In Oct’22, the Nifty Midcap 100 rose 2.5% as against an increase of 5.4% MoM for the Nifty.
 The best midcap performers in Oct’22: Indian Bank (+29%), Canara Bank (+27%), Union Bank (+21%), Bharat Forge (+20%), and Persistent Sys. (+14%).
PE (x) Relative to Nifty P/E (%) PB (x) Relative to Nifty P/B (%) Price Chg (%)
Company Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) Current 10 Yr Avg MoM CY22YTD
Indian Bank 5.3 10.0 -47 -73 -49 0.7 0.5 23 -79 -80 29 82
Canara Bank 4.4 5.5 -20 -78 -72 0.7 0.6 16 -78 -78 27 45
Union Bank (I) 3.9 6.7 -42 -80 -66 0.5 0.6 -16 -85 -79 21 24
Bharat Forge 28.2 36.9 -24 44 87 4.7 4.5 5 54 70 20 20
Persistent Sys 26.9 21.3 27 37 8 6.2 3.9 61 102 45 14 -25
Deepak Nitrite 27.7 15.9 74 41 -19 6.5 3.0 118 111 12 14 -7
Coforge 24.8 18.7 32 26 -5 6.4 3.8 68 109 44 13 -35
Container Corpn. 31.3 28.6 10 60 45 4.1 3.0 40 35 11 12 30
MRF 31.0 20.4 52 58 4 2.5 2.1 16 -20 -20 11 24
TVS Motor Co. 31.3 27.1 16 59 37 7.7 5.6 39 151 108 11 83
Federal Bank 9.2 12.1 -24 -53 -39 1.2 1.2 5 -61 -57 11 58
Oil India 3.2 7.8 -59 -84 -61 0.6 0.9 -31 -80 -67 11 -3
Tata Comm 18.4 24.6 -25 -6 25 9.0 20.1 -55 193 655 9 -14
M & M Fin. Serv. 14.6 16.4 -11 -26 -17 1.5 1.4 3 -52 -46 9 36
L&T Fin.Holdings 11.4 15.9 -28 -42 -19 0.9 1.6 -43 -71 -41 9 4
Page Industries 64.1 56.0 15 227 184 41.1 26.3 56 1236 884 -2 23
LIC Housing Fin. 6.2 10.3 -40 -68 -48 0.8 1.5 -49 -75 -43 -2 10
Guj.St.Petronet 12.6 13.2 -4 -36 -33 1.3 1.6 -18 -58 -40 -2 -23
United Breweries 57.6 86.2 -33 193 337 9.1 9.6 -5 196 260 -3 4
Coromandel Inter 14.4 15.6 -7 -27 -21 3.2 3.2 1 4 19 -3 27
Trident 20.6 10.9 89 5 -45 3.5 1.4 149 14 -47 -3 -34
Alkem Lab 23.7 24.3 -2 21 23 3.6 4.1 -11 18 52 -4 -13
Escorts Kubota 26.4 12.6 110 35 -36 2.7 1.5 78 -11 -43 -4 7
The Ramco Cement 34.4 28.8 20 75 46 2.4 3.0 -19 -22 11 -4 -28
AU Small Finance 24.1 29.9 -19 23 51 3.3 4.4 -25 7 64 -5 14
Mphasis 19.2 16.6 15 -2 -16 4.6 3.0 52 49 12 -5 -42
Emami 23.5 31.6 -26 20 60 9.3 10.8 -14 203 305 -6 -9
Max Financial 84.7 44.6 90 331 126 1.7 2.5 -34 -46 -6 -7 -28
Alembic Pharma 21.0 20.9 0 7 6 1.9 4.1 -54 -38 54 -9 -31
Laurus Labs 20.0 25.0 -20 2 27 5.0 4.3 16 62 61 -11 -16

Sector valuations Two-thirds of the sectors trade at a premium to their historical averages
 The Technology sector is trading at a P/E of 22.8x, a 20% premium to its historical average of 19x. Valuations have corrected meaningfully over the
last few months due to weak macro environment. The longer term demand for IT services remains intact despite near-term pain due to weak macro.
 Private Banks are trading at a P/B of 2.6x, marginally above its historical average of 2.5x. Most banks are guiding for a sustained traction in loan
growth, driven by continued momentum in Retail/SME segments, while the corporate segment too saw a healthy traction as loan growth for the
system improved to ~18% as on Oct22.
 PSU Banks are trading at a P/B of 1.0x, 25% premium to its historical average of 0.8x. The earnings outlook for PSBs continues to look good, led by an
improvement across all major parameters namely margins, operating profitability, and credit costs.
 The Auto sector is trading at a P/E of 24.2x, below its historical average of 26.1x – at a 7% discount. PV/CV/ 3W/tractor volumes rose 29%/4%/13%/
10% YoY, respectively, while 2Ws declined 8% YoY. Easing of chip shortages and healthy demand are aiding PV wholesales. 2W wholesales declined
YoY due to focus on inventory management.
Snapshot: Sector valuations

Relative to Relative to
PE (x) PE Std. Deviation PB (x) PB Std. Deviation
Sector Nifty P/E (%) Nifty P/B (%)
Current 10 Yr Avg Prem/Disc (%) +1SD -1SD Current 10 Yr Avg Current 10 Yr Avg Prem/Disc (%) +1SD -1SD Current 10 Yr Avg
Auto 24.2 26.1 -7.3 36.4 15.7 23 29 3.8 3.2 16.6 3.8 2.7 22 20
Banks - Private 16.5 20.4 -19.1 25.6 15.2 -16 2 2.6 2.5 3.6 2.9 2.2 -15 -5
Banks - PSU 7.6 10.6 -28.6 41.2 -19.9 -61 -49 1.0 0.8 24.5 1.0 0.6 -68 -70
NBFC 20.8 21.5 -3.1 25.1 17.8 6 9 2.9 3.0 -3.3 3.3 2.6 -7 11
Cement 29.3 25.3 15.8 30.6 20.1 49 29 3.1 2.7 13.9 3.1 2.3 0 1
Consumer 42.6 39.1 9.1 43.4 34.7 117 100 11.6 10.2 13.2 11.0 9.4 275 286
Consumer Ex ITC 52.0 47.6 9.1 56.1 39.2 165 143 13.6 13.0 5.3 14.4 11.5 343 387
Healthcare 24.8 25.3 -2.1 30.0 20.6 26 29 3.3 3.9 -13.2 4.6 3.1 9 46
Infrastructure 12.8 8.6 48.1 12.0 5.2 -35 -56 1.3 1.1 19.3 1.5 0.7 -56 -58
Logistics 30.6 30.3 1.0 38.2 22.4 56 52 5.0 3.7 34.7 4.6 2.9 64 39
Media 17.0 25.3 -32.7 30.0 20.5 -13 29 2.5 4.6 -46.5 6.2 3.0 -20 76
Metals 7.7 11.0 -30.1 15.6 6.3 -61 -44 1.3 1.1 12.5 1.4 0.9 -58 -58
Oil & Gas 12.5 12.0 4.5 14.3 9.7 -36 -38 1.5 1.4 2.0 1.6 1.3 -53 -46
Oil & Gas Ex RIL 5.1 9.4 -46.0 12.4 6.5 -74 -51 0.8 1.3 -38.8 1.6 1.0 -74 -51
Sp. Chemicals 35.9 17.4 106.3 28.1 6.7 83 -14 6.8 3.3 105.1 5.4 1.2 121 20
Real Estate 22.7 19.7 15.0 27.5 12.0 16 1 2.3 1.3 70.0 1.9 0.8 -26 -51
Retail 78.3 78.1 0.2 130.0 26.3 299 296 15.8 9.0 75.6 12.9 5.1 412 230
Technology 22.8 19.0 19.7 23.6 14.5 16 -3 7.2 5.1 41.7 6.6 3.6 135 89
Telecom Loss 22.9 - 89.7 -43.8 24 27.1 6.2 334.1 13.0 -0.5 0 35

Automobiles Oct’22: A mixed bag in terms of wholesales
 The Auto sector is trading at a P/E of 24.2x, below its historical average of 26.1x – at a 7% discount.
 Valuations are at a 17% premium to its 10-year average of 3.2x on a P/B basis.
 PV/CV/ 3W/tractor volumes rose 29%/4%/13%/ 10% YoY, respectively, while 2Ws declined 8% YoY. Easing of chip shortages and healthy demand are
aiding PV wholesales. 2W wholesales declined YoY due to focus on inventory management. CV demand, however, has continued to grow. Tractor
wholesales jumped as retail demand revived during the festive season.
 Retail demand across categories has been satisfactory in the festive season. 2Ws post-festive domestic demand needs to be seen and the worst is
behind in terms of exports. With demand being strong and chip shortages easing, the waiting periods for PVs are declining. The outlook for the
upcoming Rabi season is positive, led by macro factors, which may aid tractor demand.
12-month forward Automobiles P/E (x) Automobile P/E relative to Nifty P/E (%)
Auto P/E (x) 10 Yr Avg (x) Auto Relative to Nifty PE (%) 10 Yr Avg (x)
68 220
47 130
26.1 29.2
26 40 23.1
24.2
5 -50
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Jun-14
Jun-19
Aug-13
Apr-15
Apr-20
Dec-21
Feb-16
Dec-16
Aug-18
Feb-21
Oct-17
Oct-12
Oct-22
12-month forward Automobiles P/B (x) Automobile P/B relative to Nifty P/B (%)
Auto P/B (x) 10 Yr Avg (x) Auto Relative to Nifty PB (%) 10 Yr Avg (x)
4.9 80
60
3.6 3.2 3.8
40
20.5 22.0
20
2.3
0
1.0 -20
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-21
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-22
Jun-14
Apr-15
Jun-19
Aug-18
Apr-20
Aug-13
Feb-16
Dec-16
Feb-21
Dec-21
Oct-12
Oct-17
Oct-22
Private Banks Earnings momentum remains healthy; margins exhibited healthy improvement
 Private Banks are trading at a P/B of 2.6x, marginally above its historical average of 2.5x.
 Most banks are guiding for a sustained traction in loan growth, driven by continued momentum in Retail/SME segments, while the corporate
segment too saw a healthy traction as loan growth for the system improved to ~18% as on Oct’22. While we expect the momentum to sustain, we
remain watchful of further monetary tightening and rising inflation, which can dent demand and delay the recovery in capex cycle. Margins have
increased over 2QFY23 and is likely to witness a positive bias in the near term. Garnering deposits would be important, given the tightening
liquidity.
 On the asset quality front, slippages continued to moderate, while the stress from restructuring book too remained under control, which is likely to
keep the credit costs benign. Additional provision buffers provide further comfort on asset quality outlook.
12-month forward Private Banks P/E (x) Private Banks P/E relative to Nifty P/E (%)
Private Banks P/E (x) 10 Yr Avg (x) Private Banks Relative to Nifty PE (%) 10 Yr Avg (x)
35.0 45.0
25.0 20.0
2.3
15.0 20.4 16.5 -5.0
-15.9
5.0 -30.0
Apr-21
Apr-19
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Private Banks P/B (x) Private Banks ROE (%)
Private Banks P/B (x) 10 Yr Avg (x) Private Banks ROE (%) 10 Yr Avg (%)
4.0 18.0
15.9
3.0 15.0
2.6 12.8
2.0 2.5 12.0
1.0 9.0
Apr-21
Apr-14
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
PSU Banks Operating metrics improving; treasury performance to be muted
 PSU Banks are trading at a P/B of 1.0x, 25% premium to its historical average of 0.8x.
 The earnings outlook for PSBs continues to look good, led by an improvement across all major parameters, namely margins, operating profitability
and credit costs. The SMA pool remains benign, which coupled with limited slippages from the restructuring/ECLGS book, augurs well for
incremental slippages to remain controlled and would aid in sustained/continuous reduction in credit costs. While the yields have moderated over
2QFY23, it has increased over the shorter tenure, which could keep the treasury performance muted.
 Capital ratios remained healthy to pursue growth opportunities. We saw a revival in growth as PSBs reported strong sequential growth particularly
in the corporate segment. We expect trends to remain healthy going ahead as the pipeline remains strong across most of the banks.
12-month forward PSU Banks P/B (x) PSU Banks P/B relative to Nifty P/B (%)
PSU Banks P/B (x) 10 Yr Avg (x) PSU Banks Relative to Nifty PB (%) 10 Yr Avg (x)
1.6
-45.0
1.1 -60.0
0.8 1.0 -70.3
-67.6
0.6 -75.0
-90.0
0.1
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Apr-20
Apr-13
Apr-14
Apr-15
Apr-16
Oct-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
PSU Banks ROE (%) Oct-22
PSU Banks ROE (%) 10 Yr Avg (x)

15.0
13.1
10.0
6.9
5.0
Negative
Earnings
0.0
Apr-20
Apr-13
Apr-14
Apr-15
Apr-16
Oct-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22

NBFC Forward-looking commentaries on demand/margin more crucial now than earlier
 NBFCs are trading at a P/B of 2.9x, just a 3% discount to its historical average of 3x
 Strong demand in vehicle finance all through 2QFY23 and it is expected to sustain in 2HFY23 as well.
 Housing demand has been robust until now, but we believe that another ~50bp increase in the repo rates will start adversely impacting the
demand. Impact on NIM for vehicle financiers was less pronounced in 1HFY23 but will be much higher in 2H.
 Asset quality has improved marginally (or remained stable) for majority of the NBFCs/HFCs despite the seasonality inherent in 1H of the fiscal year.
 Demand for Gold loans in lower ticket sizes has remained weak and the higher ticket gold loan book continues to run off at a brisk pace, leading to
muted gold loan growth. Gold loan NBFCs have started prioritizing profitability, given that the aggression from banks has not mellowed down yet.
12-month forward NBFC P/E (x) NBFC P/E relative to Nifty P/E (%)
NBFC P/E (x) 10 Yr Avg (x) NBFC Relative to Nifty PE (%) 10 Yr Avg (x)
34.0 40.0
26.0 20.0
21.5 8.9
20.8 6.1
18.0 0.0
10.0 -20.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward NBFC P/B (x) NBFC ROE (%)
NBFC P/B (x) 10 Yr Avg (x) NBFC ROE (%) 10 Yr Avg (x)
4.0 19.0
3.0 16.0
2.9 14.0
3.0 13.8
2.0 13.0
1.0 10.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-18
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-19
Oct-20
Oct-21
Oct-22
Cement Festive season adversely impacts demand, price improves in select regions
 The sector trades at a one-year forward EV/EBITDA ratio of 19.3x – at a 18% premium to its historical average of 16.4x.
 Our channel checks indicate that cement demand in Oct’22 was soft due to festive seasons and unprecedented rainfall in some parts of the country.
We estimate Cement volume in Oct’22 to be down 5-7% YoY.
 Cement price has seen improvement in the South, West and East India, while it remained flat in North and Central India. All India average Cement
price increased ~2-3% MoM. Petcoke prices after declining over the past couple of months increased 11-15% in Oct’22 MoM. Contrary to this,
imported coal prices, after remaining at an elevated levels of USD300-350/t (Richard Bay spot price), declined to USD215/t by Oct’22-end (down by
~22% MoM). We believe that fuel cost has peaked out in 2QFY23 and the industry will see a gradual reduction in prices from 3QFY23 onwards.
12-month forward Cement P/E (x) 12-month forward Cement EV/EBITDA (x)
Cement P/E (x) 10 Yr Avg (x) Cement EV/EBDITA (x) 10 Yr Avg (x)
40.0 28.0
23.0
30.0 25.3 29.3
19.3
18.0 16.4
20.0
13.0
10.0 8.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-18
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Cement P/B (x) 12-month forward Cement EV/Ton (x)
Cement P/B (x) 10 Yr Avg (x) EV / Ton (x) Avg (x)
4.0 320
2.7 3.1
3.0 240
171
199
2.0 160
1.0 80
Apr-13
Apr-14
Apr-15
Apr-16
Oct-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-13
Oct-13
Apr-14
Apr-15
Oct-15
Apr-16
Apr-17
Oct-17
Apr-18
Apr-19
Oct-19
Apr-20
Apr-21
Oct-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-14
Oct-16
Oct-18
Oct-20
Oct-22
Consumer Gross margin to improve gradually
 The consumer sector P/E of 42.6x in Oct’22 was at a 9% premium to its 10-year average of 39.1x. On a P/B basis, it trades at 11.6x against its
historical average at 10.2x (13% premium).
 Rural demand environment remains subdued as volumes do not pick up. Patchy rainfall in UP and Bihar and liquidity pressures have resulted in
weak demand.
 Commodity costs have remained more or less stable during the month of Oct’22. Palm oil has corrected the most (~51-59% from peak). Gross
margin pressure will gradually come off and the impact will be seen in the later part of the year.
12-month forward Consumer P/E (x) Consumer P/E relative to Nifty P/E (%)
Consumer P/E (x) 10 Yr Avg (x) Consumer Relative to Nifty PE (%) 10 Yr Avg (x)
55.0 170.0
45.0 130.0
39.1 42.6
100.0
117.1
35.0 90.0
25.0 50.0
Apr-20
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Consumer P/B (x) Consumer P/B relative to Nifty P/B (%)
Consumer P/B (x) 10 Yr Avg (x) Consumer Relative to Nifty PB (%) 10 Yr Avg (x)
13.4 440.0
11.6
11.6 360.0
10.2 285.9 275.5
9.8 280.0
8.0 200.0
Apr-20
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Healthcare Business prospects improving; valuation near its averages
 Healthcare sector P/E of 24.8x is trading at just 2% discount to its 10-year average.
 Healthy revival is witnessed in the domestic formulations segment, driven by non-Covid portfolio and price hikes in products under NLEM.
 The US business remains under pressure due to ongoing price erosion. However, there is some respite, led by niche launches and gradual recovery
in the pace of ANDA approvals. The regulatory risk with increasing inspections has been on the rise. The USD appreciation against INR is offset to
some extent by imports and depreciation in other currencies.
 The hospital sector’s operational performance remains robust with improving occupancy/ARPOB in elective surgeries and rising international
medical tourism. We remain positive on: a) branded generics plays (SUNP), b) companies with a robust ANDA pipeline (DRRD), d) firms with strong
growth prospects (LAURUS), and e) hospitals/pharmacy theme (Apollo Hospitals).
12-month forward Healthcare P/E (x) 12-month forward Healthcare EV/EBITDA (x)
Healthcare P/E (x) 10 Yr Avg (x) Healthcare EV/EBDITA (x) 10 Yr Avg (x)
40.0 23.0
30.0 18.0
25.3 24.8 15.4 15.1

20.0 13.0
10.0 8.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-18
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Healthcare P/B (x) Healthcare P/B relative to Nifty P/B (%)
Healthcare P/B (x) 10 Yr Avg (x) Healthcare Relative to Nifty PB (%) 10 Yr Avg (x)
6.5 130.0
5.0 80.0
3.9 46.2
3.5 30.0
3.3 8.8
2.0 -20.0
Apr-21
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Infrastructure Project awarding remains muted; NHAI looks to fast track asset monetization
 The Infrastructure sector is trading at a P/B of 1.3x, at a 19% premium to its long-term historical average.
 Project awarding by agencies such as NHAI has been soft with 810 kms of projects being awarded in 1HFY23. To achieve the target of awarding
6,500 kms in FY23, 2HFY23 would require massive project awarding.
 The prices of Steel and Aluminum have declined ~25%/30%, respectively, from their levels in Apr’22, which would benefit contractors in 2HFY23.
 National Highways Infra Investment Trust (NHAI InVIT) has raised INR 94.3b in two tranches with a total portfolio of eight road assets of 636 kms.
NHAI has prepared a pipeline to monetize 1,750 kms of assets in FY23 but a faster execution is required to meet the monetization targets.
 We prefer players with decent order book in hand, presence in two or more segments, and strong balance sheets; these companies will be better
placed to capitalize on the opportunity.
12-month forward Infrastructure P/E (x) Infrastructure P/E relative to Nifty P/E (%)
Infrastructure P/E (x) 10 Yr Avg (x) Infrastructure Relative to Nifty PE (%) 10 Yr Avg (x)
22.0 20.0
15.0 -20.0
12.8 -34.9
8.6 -56.0
8.0 -60.0
1.0 -100.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Infrastructure P/B (x) Infrastructure P/B relative to Nifty P/B (%)
Infrastructure P/B (x) 10 Yr Avg (x) Infrastructure Relative to Nifty PB (%) 10 Yr Avg (x)
3.0 20.0
2.0 -20.0
1.1 1.3 -58.3 -56.4
1.0 -60.0
0.0 -100.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Logistics Logistics activity remains steady
 The Logistics sector is trading at a P/E of 30.6x, near its historical average of 30.3x.
 Logistics activity remained steady in Sep’22 with daily average e-way bill generations increasing 11% MoM and daily average FASTag toll collections
rising 3% MoM in Sep’22.
 Market share of Indian railways in EXIM containers increased to 35% as of Sep’22 (33% in Sep’21).
 Freight rates increased marginally in Sep’22. During the last few months, freight rates have been steady with robust end-use demand and elevated
diesel prices.
 With a structural shift in the formalization of the sector (~90% of the logistics sector is unorganized), supported by stricter implementation of GST
and mandatory e-invoicing, the addressable market size for the organized operators will increase.
12-month forward Logistics P/E (x) Logistics P/E relative to Nifty P/E (%)
Logistics P/E (x) 10 Yr Avg (x) Logistics Relative to Nifty PE (%) 10 Yr Avg (x)
68.0 180.0
48.0 110.0
30.3 52.3 56.0
28.0 30.6 40.0
8.0 -30.0
Apr-21
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Logistics P/B (x) Logistics P/B relative to Nifty P/B (%)
Logistics P/B (x) 10 Yr Avg (x) Logistics Relative to Nifty PB (%) 10 Yr Avg (x)
6.5 100.0
5.0 63.6
5.0 60.0
3.7 38.7
3.5 20.0
2.0 -20.0
Apr-21
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Media Zee-SONY merger receives CCI/Shareholders’ approval
 The Media sector P/E of 17x is trading at a 33% discount to its 10-year historical average of 25.3x.
 Zee Entertainment announced the receipt of CCI and shareholder’s approval for the merger. In return, Zee has agreed to sell three Hindi channels--
Big Magic, Zee Action, and Zee Classic--to address anti-competition concerns.
 Multiplex expects healthy recovery in Q3FY23 on the back of positive response seen in early part of the quarter and strong release pipeline of big
ticket movies.
12-month forward Media P/E (x) Media P/E relative to Nifty P/E (%)
Media P/E (x) 10 Yr Avg (x) Media Relative to Nifty PE (%) 10 Yr Avg (x)
40.0 80.0
30.0 40.0
29.4
20.0 25.3 0.0
17.0
-13.3
10.0 -40.0
Apr-22
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Media P/B (x) Media P/B relative to Nifty P/B (%)
Media P/B (x) 10 Yr Avg (x) Media Relative to Nifty PB (%) 10 Yr Avg (x)
8.5 280.0
6.0 160.0
4.6 76.0
3.5 40.0
2.5
-20.3
1.0 -80.0
Apr-20
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Metals Metals continue on its downturn; coking coal moves up on seasonal rains
 The Metals sector is trading at an EV/EBITDA ratio of 4.8x, below its 10-year historical average of 6.6x (27% discount).
 With concerns over Chinese economic growth due to strict implementation of zero-covid strategy, commodities continue to remain weak
 Copper/Zinc/Nickel/Alumina prices were down 1.4%/5.4%/3.2%/5.2% on MoM basis, while Brent/Aluminum/Lead prices were up 3.3%/0.7%/6%.
 Chinese domestic HRC prices slid further 1.4% MoM while N. Europe/US HRC were down 7.6%/8,6%. Dom HRC prices were marginally up 1.8%
MoM due to currency weakness and low import supplies.
 Coking coal was up 7.6% MoM on stronger-than-average rainfall forecasts in Australia, which supplies ~50% of global seaborne trade in coking coal.
12-month forward Metals P/E (x) 12-month forward Metals EV/EBITDA (x)
Metals P/E (x) 10 Yr Avg (x) Metals EV/EBDITA (x) 10 Yr Avg (x)
25.0 14.0
17.0 10.0
11.0 6.6
9.0 6.0
7.7 4.8
1.0 2.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-18
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Metals P/B (x) Metals P/B relative to Nifty P/B (%)
Metals P/B (x) 10 Yr Avg (x) Metals Relative to Nifty PB (%) 10 Yr Avg (x)
1.8
-35.0
1.3 1.3 -50.0

-57.7
1.1
0.8 -65.0 -58.4
0.3 -80.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oil & Gas Brent crude prices recover MoM on production cuts by OPEC+
 The sector trades at a P/B of 1.5x and a P/E of 12.5 v/s its historical average of 1.4x/12x, respectively.
 Brent prices in Oct’22 averaged USD93.5/bbl (up USD3.7 MoM). The decision by OPEC+ earlier this month to curtail supply pushed prices up by
around USD14/bbl to USD98/bbl, before easing somewhat. Brent touched a seven-year high of USD139/bbl in Mar’22 (v/s USD80.6/bbl in FY22).
 SG GRM in Oct’22 declined further and was at USD2.5/bbl (v/s USD3.3/bbl in Sep’22). Gasoil cracks inched upwards MoM at +USD36.1/ bbl (v/s
USD30.5/bbl in Sep’22), ATF also increased to USD32.3/ bbl in Oct’22(v/s +USD31/ bbl in Sep’22) while Gasoline cracks decreased to USD1/ bbl (v/s
USD2.8/ bbl in Sep’22). FO cracks narrowed MoM to –USD28.9/bbl in Oct’22.
 Gross marketing margins for petrol improved to INR10.6 per litre from INR5.2 per litre seen in Sep’22. While diesel marketing margin losses were at
INR3.3 per litre in Oct’22, down from INR10.4 per litre in Sep’22.
12-month forward Oil & Gas P/E (x) Oil & Gas P/E relative to Nifty P/E (%)
Oil & Gas P/E (x) 10 Yr Avg (x) Oil & Gas Relative to Nifty PE (%) 10 Yr Avg (x)
18.5 5.0
14.0 -20.0
12.0 12.5 -38.4 -36.1
9.5 -45.0
5.0 -70.0
Apr-20
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Oil & Gas P/B (x) Oil & Gas P/B relative to Nifty P/B (%)
Oil & Gas P/B (x) 10 Yr Avg (x) Oil & Gas Relative to Nifty PB (%) 10 Yr Avg (x)
-30.0
1.9
1.5 1.4 1.5 -40.0
1.1 -50.0 -46.4

-52.8
0.7 -60.0
Apr-20
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Sp. Chemicals RM prices remain more or less flat amid stability in Brent crude prices
 The sector trades at a P/B of 6.8x and a P/E of 35.9x v/s its historical average of 3.3x/17.4x, respectively.
 Brent prices in Oct’22 averaged USD93.5/bbl (up USD3.7 MoM). The decision by OPEC+ earlier this month to curtail supply pushed prices up by
around USD14/bbl to USD98/bbl, before easing somewhat. Brent touched a seven-year high of USD139/bbl in Mar’22 (v/s USD80.6/bbl in FY22).
 The prices of Propylene and Benzene were flat, while Butadiene prices dropped 13% MoM, respectively. Toluene prices were up 3% while Styrene
prices were down 7% MoM. Methanol prices were up 3%.
 Phenol prices were down 2% MoM at INR115/kg while Acetone prices were flat during the same period. Caustic Soda Lye prices were up 10% MoM
at INR64/kg, while Caustic Soda Flakes prices were up 12% at INR95/kg in Oct’22.
12-month forward Sp. Chemicals P/E (x) Sp. Chemicals P/E relative to Nifty P/E (%)
Sp. Chemicals P/E (x) 10 Yr Avg (x) Sp. Chemicals Relative to Nifty PE (%) 10 Yr Avg (x)
61.0 200.0
41.0 100.0
35.9
17.4 -13.7 83.0
21.0 0.0
1.0 -100.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Sp. Chemicals P/B (x) Sp. Chemicals P/B relative to Nifty P/B (%)
Sp. Chemicals P/B (x) 10 Yr Avg (x) Sp. Chemicals Relative to Nifty PB (%) 10 Yr Avg (x)
9.0 200.0
6.8
6.0 100.0
121.2
3.3 19.8
3.0 0.0
0.0 -100.0
Apr-20
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Real Estate High demand trends for large developers expected to sustain in 3QCY22
 The Real Estate sector trades at a P/E of 22.7x, a 15% premium to its 10-year historical average of 19.7x.
 Despite a seasonally weak quarter, housing demand remained buoyant across top markets which saw just 8% sequential decline in sales in 3QCY22.
 Driven by a growing preference for quality developers, our Coverage Universe is expected to report pre-sales of INR139b, up 2% QoQ.
 In Mumbai, Property sales during Navratri recorded 14% YoY growth compared to pre-Navratri period. The daily average sale during the Navratri period
this year increased to 407 v/s 356 last year.
12-month forward Real Estate P/E (x) Real Estate P/E relative to Nifty P/E (%)
Real Estate P/E (x) 10 Yr Avg (x) Real Estate Relative to Nifty PE (%) 10 Yr Avg (x)
46.0 100.0
31.0
19.7 22.7 0.0 15.7
16.0
0.9
1.0 -100.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Real Estate P/B (x) Real Estate P/B relative to Nifty P/B (%)
Real Estate P/B (x) 10 Yr Avg (x) Real Estate Relative to Nifty PB (%) 10 Yr Avg (x)
3.5 10.0
2.5 -20.0
2.3 -26.2
1.5 1.3 -50.8
-50.0
0.5 -80.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Retail Strong recovery in demand, led by festive season
 The Retail sector trades at a P/E of 78.3x, near its 10-year historical average of 78.1x.
 The sector is witnessing a strong recovery in demand, led by festive season with customer spending making a grand return after the lull of the
pandemic.
 Fashion retailer Vmart announced its acquisition of Limeroad.com, a vertical online market place catering to the fashion segment, for INR670m (1x
P/Sales on FY22) with a view to expand its online presence.
12-month forward Retail P/E (x) Retail P/E relative to Nifty P/E (%)
Retail P/E (x) 10 Yr Avg (x) Retail Relative to Nifty PE (%) 10 Yr Avg (x)
400.0 2,401.0
300.0
1,601.0
200.0
100.0
78.1 801.0
295.8
78.3
0.0 1.0 298.8
Apr-13
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-22
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Retail P/B (x) Retail P/B relative to Nifty P/B (%)
Retail P/B (x) 10 Yr Avg (x) Retail Relative to Nifty PB (%) 10 Yr Avg (x)
22.0 541.0
412.1
15.0 15.8 361.0
8.0 181.0
9.0 229.8
1.0 1.0
Apr-17
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-20
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Technology Resilient revenues; supply pressures to ease
 The Technology sector is trading at a P/E ratio of 22.8x, at a 20% premium to its historical average of 19x.
 Valuations have corrected meaningfully over the last few months due to weak macro environment. The longer term demand for IT services remains
intact despite near-term pain.
 Though some areas such as Mortgage, Retail, and Manufacturing have seen some impact due to weak macro, the deal wins continue to remain
strong with increasing cost optimization initiatives from clients.
 Freshers becoming billable, pricing, utilization, and operating leverage remain the key margin levers. Attrition has peaked, and should see
moderation in the coming quarters as the supply pressure eases.
12-month forward Technology P/E (x) Technology P/E relative to Nifty P/E (%)
Technology P/E (x) 10 Yr Avg (x) Technology Relative to Nifty PE (%) 10 Yr Avg (x)
38.0 80.0
28.0 40.0
19.0
22.8 -3.0 16.1
18.0 0.0
8.0 -40.0
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Technology P/B (x) Technology Div Yield (%)
Technology P/B (x) 10 Yr Avg (x) Div Yield (%) Avg (x)
12.0 5.5
9.0 4.0 3.5

7.2 2.6
6.0 2.5
5.1
3.0 1.0
Apr-18
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-19
Apr-20
Apr-21
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-13
Oct-12
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Telecom VIL receives SEBI approval to convert its dues to equity for Government
 The Telecom sector is trading at an EV/EBITDA ratio of 6.9x, a 15% discount to its 10-year historical average of 8.2x.
 Subscriber data for Aug’22 released by TRAI indicated growth in Active subscriber base, thereby indicating sustenance in SIM consolidation
witnessed recently.
 SEBI approved the government's proposal to convert dues of over USD1.92 billion by telecom operator Vodafone Idea to equity.
 As per media sources, Adani Data Networks has received authorization to provide full-fledged telecom services.
12-month forward Telecom P/B (x) Telecom P/B relative to Nifty P/B (%)
Telecom P/B (x) 10 Yr Avg (x) Telecom Relative to Nifty PB (%) 10 Yr Avg (x)
30.0 27.1 500.0
20.0 300.0
10.0 100.0 34.7

6.2
0.0 -100.0
Apr-21
Apr-17
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Apr-13
Apr-14
Apr-15
Apr-16
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
12-month forward Telecom EV/EBITDA (x)
Telecom EV/EBDITA (x) 10 Yr Avg (x)
18.0
13.0
8.2
8.0
6.9
3.0
Apr-21
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-22
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22

Appendix Company valuations
Standard Standard
P/E (x) Relative to Nifty P/E (%) P/B (x) Relative to Nifty P/B (%)
deviation in P/E deviation in P/B
10-year Premium/ 10-year 10-year Premium/ 10-year
Company Current +1SD (x) -1SD (x) Current Current +1SD (x) -1SD (x) Current
average discount (%) average average discount (%) average
Automobiles 24.2 26.1 -7 36.4 15.7 23 32 3.8 3.2 17 3.8 2.7 22 21
Amara Raja Batt. 13.6 22.9 -40 30.2 15.6 -30 16 1.7 4.0 -57 5.5 2.5 -44 49
Ashok Leyland 27.5 24.9 10 34.3 15.6 40 27 5.2 3.5 49 4.9 2.1 70 31
Apollo Tyres 14.1 13.2 7 18.8 7.7 -28 -33 1.3 1.2 4 1.6 0.9 -59 -54
Balkrishna Inds 23.5 17.1 38 25.2 9.0 20 -13 4.4 3.3 35 4.7 1.8 44 23
Bajaj Auto 15.9 17.6 -10 19.4 15.8 -19 -11 4.2 4.4 -6 5.3 3.6 36 67
Bharat Forge 28.2 36.9 -24 63.9 9.9 44 87 4.7 4.5 5 6.1 3.0 54 70
Bosch 30.5 37.8 -19 45.3 30.3 55 92 3.9 5.4 -28 6.9 3.9 27 103
CEAT 19.5 17.2 14 32.3 2.0 -1 -13 1.7 1.5 16 2.1 0.9 -44 -44
Eicher Motors 28.2 31.0 -9 37.5 24.4 44 57 6.2 7.1 -13 9.9 4.3 101 166
Endurance Tech. 28.2 32.5 -13 39.5 25.5 43 65 4.1 5.1 -20 6.4 3.9 34 93
Escorts Kubota 26.4 12.6 110 18.8 6.4 35 -36 2.7 1.5 78 2.3 0.7 -11 -43
Exide Inds. 12.9 20.8 -38 25.0 16.7 -34 6 1.2 2.6 -54 3.4 1.8 -61 -4
Hero MotoCorp 16.1 18.4 -13 21.0 15.8 -18 -7 3.1 5.0 -38 6.4 3.6 2 88
Mahindra CIE 14.2 26.4 -46 38.7 14.1 -28 34 1.8 2.1 -12 3.0 1.2 -40 -21
Mahindra & Mahindra 19.2 18.5 3 21.9 15.1 -2 -6 3.3 2.7 22 3.2 2.1 6 0
Maruti Suzuki 29.8 29.1 2 41.0 17.2 52 48 4.5 3.8 18 4.9 2.8 47 44
MRF 31.0 20.4 52 33.2 7.6 58 4 2.5 2.1 16 2.6 1.7 -20 -20
Samv. Motherson 19.4 57.4 -66 81.1 33.7 -1 191 1.9 3.6 -47 5.0 2.3 -38 36
Sona BLW Precis. 53.2 79.0 -33 96.8 61.3 171 301 10.6 14.5 -27 17.5 11.5 244 443
Tata Motors na 15.0 na 23.0 7.1 na -24 3.0 2.0 54 2.8 1.2 -2 -27
TVS Motor 31.3 27.1 16 38.3 15.8 59 37 7.7 5.6 39 7.8 3.3 151 108
Banks-Private 16.5 20.4 -19 25.6 15.2 -16 3 2.6 2.5 4 2.9 2.2 -15 -5
AU Small Finance 24.1 29.9 -19 40.1 19.6 23 51 3.3 4.4 -25 5.5 3.3 7 64
Axis Bank 12.0 37.8 -68 89.9 -14.3 -39 92 2.0 1.9 4 2.3 1.6 -34 -27
Bandhan Bank 9.1 26.3 -66 36.5 16.2 -54 34 1.7 3.8 -54 5.3 2.2 -44 41
DCB Bank 6.6 12.9 -49 18.0 7.8 -67 -35 0.7 1.3 -45 1.8 0.8 -76 -51
Equitas Holdings 5.4 44.9 -88 170.8 -81.0 -73 128 0.7 1.5 -52 2.2 0.7 -77 -45
Federal Bank 9.2 12.1 -24 17.1 7.1 -53 -39 1.2 1.2 5 1.5 0.8 -61 -57
HDFC Bank 17.0 20.5 -17 23.2 17.9 -13 4 2.7 3.3 -18 3.7 3.0 -12 24
ICICI Bank 18.4 20.8 -12 31.4 10.3 -6 6 2.9 1.9 51 2.4 1.5 -6 -28
IndusInd Bank 10.2 19.3 -47 26.1 12.4 -48 -2 1.5 2.6 -42 3.5 1.6 -52 -4
Kotak Mah. Bank 24.3 27.0 -10 31.7 22.3 24 37 3.1 3.3 -5 3.9 2.8 2 24
RBL Bank 7.5 30.4 -75 45.6 15.2 -62 54 0.6 1.9 -69 2.9 0.8 -81 -30

Standard Standard
Banks-PSU 7.6 12.4 -39 22.2 2.6 -61 -37 1.0 0.8 25 1.0 0.6 -68 -70
Bank of Baroda 6.1 11.2 -46 26.4 -3.9 -69 -43 0.8 0.8 -1 1.0 0.5 -75 -71
Canara Bank 4.4 5.5 -20 8.4 2.6 -78 -72 0.7 0.6 16 0.7 0.4 -78 -78
Indian Bank 5.3 10.0 -47 20.0 0.0 -73 -49 0.7 0.5 23 0.8 0.3 -79 -80
Punjab Natl.Bank 8.2 10.8 -25 16.3 5.4 -58 -45 0.5 0.7 -36 1.0 0.4 -85 -72
St Bk of India 9.5 13.7 -31 22.1 5.3 -52 -31 1.4 1.1 28 1.3 0.9 -55 -59
Union Bank (I) 3.9 6.7 -42 10.0 3.5 -80 -66 0.5 0.6 -16 0.8 0.4 -85 -79
NBFC 20.8 21.5 -3 25.1 17.8 6 9 2.9 3.0 -3 3.3 2.6 -7 11
AAVAS Financiers 32.0 42.2 -24 51.5 33.0 63 114 4.5 5.3 -16 6.6 4.0 45 98
Aditya Birla Cap 17.9 23.0 -22 34.3 11.8 -9 17 1.5 2.0 -24 3.0 1.0 -51 -26
Bajaj Fin. 33.6 27.6 22 40.9 14.2 71 40 7.2 4.8 50 7.0 2.6 133 79
Can Fin Homes 11.1 12.4 -11 18.0 6.9 -43 -37 1.7 2.1 -18 3.2 1.1 -43 -20
Cholaman.Inv.&Fn 19.4 16.0 22 20.3 11.6 -1 -19 3.7 2.7 36 3.6 1.8 19 1
HDFC 31.9 35.9 -11 41.6 30.3 62 82 3.3 4.0 -20 4.7 3.4 6 52
Home First Fin. 25.0 27.9 -10 31.5 24.3 28 41 3.3 3.4 -5 3.9 2.9 6 29
ICICI Securities 12.5 14.3 -12 18.5 10.1 -36 -27 5.3 7.1 -25 8.9 5.3 72 165
IIFL Wealth Mgt 20.4 21.9 -7 28.4 15.5 4 11 4.8 3.9 26 4.6 3.2 57 45
IndoStar Capital 6.7 18.8 -64 35.6 1.9 -66 -5 0.7 1.1 -41 1.4 0.8 -79 -59
L&T Fin.Holdings 11.4 15.9 -28 19.4 12.4 -42 -19 0.9 1.6 -43 2.1 1.0 -71 -41
LIC Housing Fin. 6.2 10.3 -40 13.4 7.1 -68 -48 0.8 1.5 -49 2.1 0.9 -75 -43
M & M Fin. Serv. 14.6 16.4 -11 23.8 9.0 -26 -17 1.5 1.4 3 1.7 1.2 -52 -46
Manappuram Finance 5.9 8.0 -26 10.6 5.3 -70 -59 0.9 1.4 -37 1.9 0.8 -72 -48
MAS Financial 17.4 22.8 -24 29.0 16.6 -11 16 2.7 3.4 -20 4.1 2.6 -13 26
Muthoot Finance 11.3 9.6 18 12.4 6.7 -43 -52 1.8 1.9 -1 2.5 1.3 -40 -30
Piramal Enterprises 13.5 20.3 -34 28.4 12.2 -31 3 1.1 1.3 -18 1.7 0.9 -65 -51
PNB Housing 7.2 14.0 -49 21.4 6.5 -63 -29 0.7 1.6 -58 2.7 0.5 -79 -41
Repco Home Fin 4.4 14.5 -70 22.5 6.6 -78 -26 0.5 2.2 -77 3.5 0.8 -84 -19
Shri.City Union. 7.8 13.6 -43 19.2 8.1 -60 -31 1.1 1.8 -38 2.5 1.2 -64 -32
Shriram Trans. 7.9 11.9 -34 15.4 8.4 -60 -40 1.1 1.6 -34 2.0 1.2 -66 -40
Cement 29.3 25.3 16 30.6 20.1 49 29 3.1 2.7 14 3.1 2.3 0 1
ACC 31.2 28.2 10 35.5 21.0 59 43 3.0 2.8 7 3.3 2.4 -2 5
Ambuja Cem. 48.1 33.4 44 41.7 25.0 145 69 4.5 2.7 68 3.3 2.0 45 -1
Birla Corpn. 19.3 18.8 3 28.6 9.0 -2 -5 1.1 1.1 -3 1.5 0.8 -64 -57
Grasim Inds 15.6 12.3 27 15.4 9.3 -20 -38 2.2 1.7 26 2.1 1.3 -30 -35
India Cements na 36.2 na 59.7 12.7 na 84 1.2 0.7 59 1.0 0.5 -62 -73
J K Cements 31.4 26.3 19 40.6 12.0 60 33 4.1 2.8 48 4.0 1.6 33 4

Standard Standard
JK Lakshmi Cem. 16.0 26.7 -40 47.9 5.4 -19 35 2.2 2.3 -5 3.3 1.4 -28 -13
Shree Cement 52.3 40.4 30 51.5 29.3 167 105 4.3 5.1 -16 6.2 4.0 39 92
The Ramco Cement 34.4 28.8 20 40.2 17.4 75 46 2.4 3.0 -19 3.7 2.3 -22 11
UltraTech Cem. 32.6 31.9 2 39.7 24.1 66 62 3.4 3.3 1 3.8 2.8 9 25
Consumer 42.6 39.1 9 43.4 34.7 117 98 11.6 10.2 13 11.0 9.4 275 283
Consumer Ex ITC 52.0 47.6 9 56.1 39.2 165 142 13.6 13.0 5 14.4 11.5 343 385
Asian Paints 59.1 51.1 16 64.7 37.5 201 159 18.9 13.5 40 16.9 10.2 515 407
Britannia Inds. 50.0 41.1 22 54.6 27.5 155 108 33.9 18.0 89 27.1 8.9 1003 573
Colgate-Palm. 38.5 39.4 -3 42.9 36.0 96 100 25.6 24.0 6 28.3 19.8 731 800
Dabur India 45.9 41.5 11 50.6 32.4 134 111 10.0 10.5 -4 11.5 9.4 226 292
Emami 23.5 31.6 -26 41.9 21.2 20 60 9.3 10.8 -14 13.3 8.3 203 305
Godrej Consumer 40.0 41.0 -2 49.3 32.7 104 108 6.5 5.6 14 8.5 2.7 110 111
Hind. Unilever 56.3 48.6 16 59.1 38.1 187 147 12.9 26.9 -52 38.7 15.1 318 908
Indigo Paints 42.5 87.6 -51 123.4 51.8 117 344 7.7 13.2 -41 17.3 9.1 152 395
ITC 21.4 24.6 -13 29.9 19.3 9 25 6.5 6.2 4 7.9 4.5 110 132
Jyothy Lab. 30.5 34.8 -12 43.3 26.3 56 76 4.7 4.7 -2 5.6 3.8 51 77
Marico 45.9 39.9 15 48.6 31.2 134 102 20.2 13.9 45 17.5 10.3 556 421
Nestle India 72.7 55.8 30 69.1 42.5 271 183 95.2 42.6 123 71.4 13.8 2992 1497
P & G Hygiene 51.6 56.7 -9 72.7 40.7 163 187 52.5 31.6 66 48.5 14.7 1606 1085
Page Industries 64.1 56.0 15 72.1 39.8 227 184 41.1 26.3 56 34.5 18.0 1236 884
Pidilite Inds. 70.9 49.4 43 68.0 30.8 261 151 16.8 11.4 47 14.8 8.1 444 328
Tata Consumer 50.6 41.4 22 54.2 28.7 158 110 4.2 2.7 58 3.6 1.7 36 -1
United Breweries 57.6 86.2 -33 119.2 53.2 193 337 9.1 9.6 -5 11.2 8.0 196 260
United Spirits 55.3 100.4 -45 157.3 43.5 182 409 11.8 14.2 -17 20.0 8.4 284 431
Varun Beverages 44.1 41.6 6 48.7 34.4 125 111 11.1 6.3 75 7.9 4.7 259 137
Healthcare 24.8 25.3 -2 30.0 20.6 26 28 3.3 3.9 -13 4.6 3.1 9 44
Ajanta Pharma 20.5 21.0 -2 28.5 13.6 5 7 4.0 5.2 -24 7.4 3.1 29 96
Alembic Pharma 21.0 20.9 0 29.2 12.6 7 6 1.9 4.1 -54 5.6 2.6 -38 54
Alkem Lab 23.7 24.3 -2 30.2 18.4 21 23 3.6 4.1 -11 4.6 3.5 18 52
Apollo Hospitals 58.2 74.8 -22 109.2 40.3 196 279 8.6 5.6 53 7.4 3.8 180 111
Aurobindo Pharma 10.9 14.3 -24 19.3 9.2 -44 -27 1.1 2.8 -60 4.2 1.4 -64 5
Biocon 22.7 37.2 -39 54.0 20.4 16 89 1.9 3.7 -49 5.2 2.2 -39 38
Cipla 26.4 27.9 -6 33.8 22.1 34 42 3.7 3.3 13 3.9 2.7 21 23
Divi's Lab. 31.4 27.3 15 35.1 19.5 60 38 6.4 5.8 10 7.6 4.0 108 117
Dr Reddy's Labs 19.2 26.1 -26 34.9 17.3 -2 32 3.0 3.7 -19 4.5 2.9 -3 38
ERIS Lifescience 21.1 24.8 -15 31.1 18.5 8 26 4.1 5.7 -28 7.8 3.7 34 115
Gland Pharma 22.8 41.5 -45 51.7 31.2 16 110 3.2 6.2 -48 7.7 4.7 5 132

Standard Standard
Glaxosmit Pharma 37.1 55.6 -33 72.6 38.6 89 182 7.7 11.6 -33 13.8 9.4 151 334
Glenmark Pharma. 9.9 22.1 -55 30.2 14.1 -50 12 1.1 3.5 -69 5.2 1.7 -65 31
Ipca Labs. 23.5 28.9 -19 42.5 15.3 20 47 3.4 3.6 -5 4.5 2.7 11 35
Laurus Labs 20.0 25.0 -20 38.1 11.9 2 27 5.0 4.3 16 6.5 2.1 62 61
Lupin 37.7 37.3 1 51.1 23.4 92 89 2.4 4.1 -42 5.6 2.7 -22 54
Solara Active Pharma na 13.1 na 21.3 5.0 na -33 0.9 1.8 -49 2.9 0.8 -69 -31
Sun Pharma.Inds. 27.1 30.0 -10 39.2 20.8 38 52 4.0 4.2 -4 5.8 2.7 31 58
Torrent Pharma. 35.5 26.9 32 35.5 18.3 81 36 7.0 5.6 26 6.9 4.2 128 109
Zydus Lifesciences 19.3 20.7 -7 25.0 16.5 -2 5 2.2 4.0 -45 5.4 2.6 -29 50
Infrastructure 12.8 8.6 48 12.0 5.2 -35 -56 1.3 1.1 19 1.5 0.7 -56 -58
IRB Infra.Devl. 17.5 12.6 39 18.1 7.1 -11 -36 1.0 1.1 -3 1.5 0.6 -66 -59
KNR Construct. 13.3 11.4 17 16.5 6.3 -32 -42 2.1 1.9 13 2.7 1.1 -31 -29
Media 17.0 25.3 -33 30.0 20.5 -13 28 2.5 4.6 -47 6.2 3.0 -20 72
PVR 36.1 46.6 -22 68.3 24.9 84 136 6.1 4.9 25 6.1 3.7 98 82
Sun TV Network 11.5 17.4 -34 22.9 11.8 -41 -12 2.2 4.0 -44 5.5 2.6 -27 51
Zee Entertainment 20.3 31.2 -35 42.6 19.7 3 58 2.1 5.0 -59 7.3 2.8 -33 89
Logistics 30.6 30.3 1 38.2 22.4 56 54 5.0 3.7 35 4.6 2.9 64 40
Blue Dart Expres 36.9 76.7 -52 123.9 29.4 88 289 12.1 16.9 -29 25.2 8.6 292 535
Container Corpn. 31.3 28.6 10 36.9 20.3 60 45 4.1 3.0 40 3.6 2.4 35 11
TCI Express 39.9 31.8 26 39.4 24.1 103 61 9.4 8.0 18 9.7 6.3 206 199
VRL Logistics 21.4 29.5 -27 39.9 19.0 9 50 5.2 4.6 11 6.0 3.3 68 74
Mahindra Logis. 43.4 79.0 -45 122.4 35.6 121 301 5.6 6.0 -7 7.5 4.5 82 125
Metals 7.7 11.0 -30 15.6 6.3 -61 -44 1.3 1.1 12 1.4 0.9 -58 -57
Coal India 7.1 11.3 -38 16.4 6.3 -64 -43 2.5 5.0 -51 7.4 2.7 -20 89
Hindalco Inds. 8.7 9.3 -7 11.6 7.0 -56 -53 1.3 1.2 13 1.5 0.9 -56 -56
Hind.Zinc 10.8 11.1 -3 14.3 7.9 -45 -44 3.8 2.7 41 3.6 1.8 23 1
Jindal Steel 7.9 9.2 -14 16.4 2.1 -60 -53 1.0 0.7 44 1.1 0.3 -66 -73
JSW Steel 8.0 11.9 -33 17.5 6.2 -59 -40 1.8 1.5 20 2.0 1.0 -40 -43
Natl. Aluminium 4.9 11.7 -58 20.2 3.2 -75 -41 0.9 1.0 -6 1.3 0.7 -71 -64
NMDC 6.5 5.7 13 7.7 3.8 -67 -71 0.8 1.0 -23 1.3 0.7 -75 -62
SAIL 6.7 11.0 -39 18.9 3.2 -66 -44 0.5 0.6 -11 0.8 0.4 -82 -77
Tata Steel 6.9 19.1 -64 46.7 -8.6 -65 -3 1.0 1.2 -18 1.7 0.6 -68 -55
Vedanta 6.4 10.5 -39 15.3 5.7 -67 -47 1.6 1.4 19 1.8 0.9 -48 -49

Standard Standard
Oil & Gas 12.5 12.0 5 14.3 9.7 -36 -39 1.5 1.4 2 1.6 1.3 -53 -47
Oil & Gas Ex RIL 5.1 9.4 -46 12.4 6.5 -74 -52 0.8 1.3 -39 1.6 1.0 -74 -52
Aegis Logistics 22.4 26.0 -14 39.8 12.2 14 32 3.8 3.7 4 5.1 2.2 23 37
BPCL na 8.6 na 11.4 5.7 na -57 1.4 1.9 -28 2.4 1.4 -56 -30
Castrol India 12.5 25.2 -50 33.2 17.1 -36 28 5.9 17.8 -67 27.9 7.7 92 568
GAIL (India) 6.9 11.6 -40 15.9 7.2 -65 -41 0.9 1.3 -34 1.7 1.0 -71 -50
Gujarat Gas 24.7 23.8 4 33.2 14.4 26 21 4.7 4.8 -3 6.0 3.6 52 80
Guj.St.Petronet 12.6 13.2 -4 16.4 9.9 -36 -33 1.3 1.6 -18 1.9 1.3 -58 -40
HPCL na 6.4 na 8.8 3.9 na -68 1.1 1.3 -11 1.7 0.8 -64 -53
IOCL 8.0 6.8 18 10.1 3.4 -59 -66 0.4 0.7 -38 0.9 0.5 -86 -74
Indraprastha Gas 21.3 19.1 12 26.0 12.3 9 -3 3.5 3.6 -3 4.9 2.4 15 36
Mahanagar Gas 12.2 15.3 -21 18.6 12.1 -38 -22 2.0 3.2 -37 4.0 2.3 -35 19
MRPL 15.3 19.2 -20 31.8 6.6 -22 -3 2.1 2.8 -25 3.5 2.1 -30 7
Oil India 3.2 7.8 -59 10.8 4.7 -84 -61 0.6 0.9 -31 1.2 0.6 -80 -67
ONGC 2.3 8.4 -73 12.9 3.9 -88 -57 0.5 1.0 -49 1.4 0.6 -83 -61
Petronet LNG 8.9 13.0 -32 15.1 10.9 -55 -34 1.9 2.6 -27 3.3 2.0 -37 -1
Reliance Inds. 23.8 14.8 61 22.1 7.4 21 -25 1.9 1.5 24 1.8 1.2 -40 -44
Sp. Chemicals 35.9 17.4 106 28.1 6.7 83 -12 6.8 3.3 105 5.4 1.2 121 24
Alkyl Amines 43.5 19.9 119 39.8 -0.1 122 1 10.9 5.0 119 9.7 0.3 255 87
Atul 37.2 21.1 76 33.3 9.0 90 7 4.7 3.1 50 4.5 1.7 52 17
Deepak Nitrite 27.7 15.9 74 23.1 8.7 41 -19 6.5 3.0 118 5.0 1.0 111 12
Fine Organic 51.4 36.0 43 46.7 25.3 162 83 13.2 8.5 54 11.0 6.1 328 220
Galaxy Surfactants 32.3 25.7 26 33.6 17.8 65 30 5.3 4.9 6 6.0 3.9 71 85
Navin Fluorine 49.3 22.0 124 40.2 3.8 151 12 9.4 3.5 169 6.4 0.6 207 32
NOCIL 17.3 13.0 33 18.1 8.0 -12 -34 2.4 1.6 51 2.4 0.9 -20 -39
Vinati Organics 36.0 25.6 41 38.3 12.8 83 30 7.9 5.5 43 7.9 3.1 156 106
Real Estate 22.7 19.7 15 27.5 12.0 16 0 2.3 1.3 70 1.9 0.8 -26 -50
Brigade Enterpr. 30.4 20.2 51 30.5 9.9 55 2 3.1 1.5 102 2.2 0.8 -1 -43
DLF 19.0 41.5 -54 67.9 15.2 -3 111 1.7 1.1 54 1.4 0.8 -44 -58
Godrej Properties 30.3 69.4 -56 97.1 41.8 54 252 3.4 4.9 -30 6.8 3.0 11 84
Macrotech Developers 25.5 33.7 -24 41.1 26.2 30 71 3.3 3.6 -10 4.4 2.9 6 36
Oberoi Realty 22.4 23.7 -6 27.3 20.2 14 20 2.7 2.0 32 2.4 1.6 -14 -24
Prestige Estates 25.3 20.1 26 25.2 15.0 29 2 1.6 1.8 -8 2.2 1.3 -47 -34
Sobha 23.7 24.4 -3 37.3 11.5 21 24 2.2 1.7 31 2.2 1.1 -30 -38

Standard Standard
Retail 78.3 78.1 0 130.0 26.3 299 296 15.8 9.0 76 12.9 5.1 412 236
Aditya Birla Fashion na 176.2 na 227.0 125.3 na 794 9.7 9.1 8 11.6 6.5 216 239
Avenue Supermarts 89.8 98.1 -9 120.7 75.5 358 398 14.7 12.4 18 15.3 9.5 377 366
Bata India 50.4 39.4 28 51.4 27.4 157 100 9.3 7.7 21 10.1 5.2 203 188
Jubilant 66.6 76.0 -12 101.5 50.5 239 285 17.6 13.9 27 18.3 9.5 473 422
Relaxo Footwear 78.0 50.5 55 80.6 20.3 297 156 11.4 8.7 31 12.2 5.2 272 226
Shoppers Stop na 45.8 na 60.3 31.4 na 133 26.8 9.4 184 16.8 2.0 770 253
Titan 70.6 52.2 35 70.7 33.8 260 165 19.6 11.6 69 15.6 7.6 537 335
Trent na 93.0 na 110.6 75.4 na 372 16.0 6.3 153 10.0 2.7 418 137
V-Mart Retail na 37.1 na 67.9 6.3 na 88 6.2 5.3 17 7.9 2.7 101 98
Technology 22.8 19.0 20 23.6 14.5 16 -3 7.2 5.1 42 6.6 3.6 135 91
Coforge 24.8 18.7 32 28.0 9.4 26 -5 6.4 3.8 68 6.3 1.4 109 44
Cyient 12.5 16.0 -22 21.3 10.6 -37 -19 2.5 2.6 -5 3.5 1.7 -20 -2
HCL Technologies 17.8 14.7 21 18.1 11.3 -9 -26 4.6 3.5 31 4.4 2.7 51 33
Infosys 24.8 18.7 32 23.7 13.8 26 -5 8.7 4.8 81 6.9 2.8 184 81
L & T Infotech 26.6 21.2 25 30.4 12.0 36 8 7.1 5.8 23 8.2 3.4 131 117
L&T Technology 28.7 24.3 18 33.6 15.0 46 23 7.0 6.0 16 8.2 3.9 128 126
Mindtree 23.9 18.6 29 25.8 11.4 22 -6 7.5 4.5 66 6.8 2.3 145 70
MphasiS 19.2 16.6 15 23.2 10.0 -2 -16 4.6 3.0 52 4.8 1.2 49 12
Persistent Sys 26.9 21.3 27 31.2 11.3 37 8 6.2 3.9 61 6.1 1.6 102 45
TCS 25.5 21.7 17 27.6 15.9 30 10 12.6 8.4 51 11.5 5.3 310 214
Tech Mahindra 16.2 15.0 8 19.1 10.8 -17 -24 3.2 3.0 6 3.8 2.3 4 13
Wipro 17.4 16.6 5 21.2 11.9 -12 -16 3.1 3.0 4 3.8 2.2 0 12
Zensar Tech. 14.9 14.6 2 21.7 7.5 -24 -26 1.7 2.2 -23 2.9 1.5 -45 -18
Telecom na 32.7 na 45.4 20.0 na 66 27.1 6.2 334 13.0 -0.5 781 134
Bharti Airtel na 33.8 na 47.5 20.2 na 72 4.9 2.7 78 3.9 1.6 58 2
Indus Towers 8.6 19.5 -56 27.0 12.1 -56 -1 2.0 3.4 -41 4.3 2.4 -35 27
Vodafone Idea na 15.8 na 24.9 6.7 na -20 na 1.3 na 2.2 0.4 na -52
Tata Comm 18.4 24.6 -25 39.6 9.6 -6 25 9.0 20.1 -55 36.8 3.5 193 655

NOTES

Quant Research & India Strategy Gallery
BULLS & BEARS | Nov 2022

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SELL < - 10%
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Sectors trading at a premium

BULLS & BEARS | Nov 2022 2

BULLS & BEARS | Nov 2022 3

BULLS & BEARS | Nov 2022 4

Mkt cap chg 12M (%) Curr Mcap (USD Tr)

INDIA’S MARKET CAPITALIZATION-TO-GDP RATIO (%) – MAINTAINS 100%+ LEVEL

BULLS & BEARS | Nov 2022 5

BULLS & BEARS | Nov 2022 6

Oil & Gas

BULLS & BEARS | Nov 2022 7

SBI Life Ins

SBI Life Ins

BULLS & BEARS | Nov 2022 10

BULLS & BEARS | Nov 2022 11

India’s market capitalization-to-GDP ratio (%) – maintains 100%+ level

12-month forward Nifty RoE (%) Trailing Nifty RoE (%)

BULLS & BEARS | Nov 2022 12

India (Nifty) v/s other markets

BULLS & BEARS | Nov 2022 13

MSCI India Avg: 23.2x 90

MSCI EM Avg: 14.3x 9.6

BULLS & BEARS | Nov 2022 14

Trend in India's contribution to world m-cap (%) – at its all-time high

BULLS & BEARS | Nov 2022 15

M-cap change in the last 12 months (%)

Mkt cap chg 12M (%) Curr Mcap (USD Tr)

Global market capitalization-to-GDP ratio (%)

166 Market cap to GDP (%)

Source: Bloomberg, IMF’s GDP estimates for CY22

BULLS & BEARS | Nov 2022 16

Valuations of Nifty constituent companies

BULLS & BEARS | Nov 2022 17

BULLS & BEARS | Nov 2022 18

BULLS & BEARS | Nov 2022 19

Snapshot: Sector valuations

BULLS & BEARS | Nov 2022 20

PSU Banks ROE (%) Oct-22

PSU Banks ROE (%) 10 Yr Avg (x)

BULLS & BEARS | Nov 2022 23

25.3 24.8 15.4 15.1

1.3 1.3 -50.0

1.5 1.4 1.5 -40.0

1.1 -50.0 -46.4

9.0 4.0 3.5

10.0 100.0 34.7

BULLS & BEARS | Nov 2022 37

BULLS & BEARS | Nov 2022 38

BULLS & BEARS | Nov 2022 39

BULLS & BEARS | Nov 2022 40

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BULLS & BEARS | Nov 2022 42

BULLS & BEARS | Nov 2022 43

BULLS & BEARS | Nov 2022 44

BULLS & BEARS | Nov 2022

In the past 12 months, MOFSL or any of its associates may have:

BULLS & BEARS | Nov 2022

Terms & Conditions:

Disclosure of Interest Statement Companies where there is interest

Regional Disclosures (outside India)

For Hong Kong:

BULLS & BEARS | Nov 2022

BULLS & BEARS | Nov 2022