RATES RECESSION ROAD AHEAD

Strong Fundamentals | Lofty Valuations

Contributors

Vinay Khattar
Head Research
Vinay.Khattar@edelweissfin.com

Kavita Chacko Jigar Jani Parag Shah

Chief Economist Research Analyst Research Analyst
Kavita.Chacko@edelweissfin.com Jigar.jani@edelweissfin.com Shah.parag@edelweissfin.com

2
Strategy Report: Key Takeaways
● Global Economy
- Inflation though cooled off, still remains persistent.
- Central Banks across the globe adopting different
approaches to tackle inflation.
• Corporate Result Snapshot
- Strong sales growth across universe.
- Margin pressures remain, however Management confident
of revival in margins.
• Indian Economy - Resilient
- G.S.T collections remain robust, impressive Auto sales
during festive season add confidence.
- Govt. – Leader in capital formation.
- DXY losing strength.
• Indian Markets likely to outperform
- Mcap and GDP as a percentage of world still below
alarming levels.
- Domestic flows remain strong, FII’s also turn positive.
- India’s share in MSCI has been increasing steadily.
- Softening Crude prices act as a positive catalyst.
- Rising covid cases in China pave way for outperformance
of MSCI India over MSCI China.
• Sectors to be pitched : Banking
- Credit growth robust.
- Stress in Banking system at multi year lows.
- RoA at decadal high.
- PSU banks turning the corner
• Sectors to be pitched : Defense
- Capex plans for modernization.
- Sales growth remains robust.
- Strong accretion in order book.
• Key Risks
- Standalone Nifty valuation at median levels, however, when
compared with MSCI Emerging markets, valuations are at a 7
year high.
- Equity markets tend to peak out prior to Interest rates.
- Yield Curve inversion model at 79%.
3
 Global Economy: Deterioration In Growth Prospects

IMF GDP Growth Projections Revised Lower Across Economies

10 9
6.8
4.7 4.8
Real GDP Growth %

5 4 3.8 3.5 3.6

2.5 3.2 2.8 2.8
1.6 1.5
0.3
0

-5 -3.4

-10
United States Germany France United Kingdom China India Russia Brazil

Jan '22 Proj Apr '22 Proj Jul'22 Proj Oct'22 Proj

 As per the IMF’s latest assessment (Oct’22), the slowdown in global economic activity is broad-based and sharper-than-expected and the risks to the economic outlook remain
unusually large
 A growing share of economies are in a growth slowdown or contraction
 The IMF has warned that colliding pressures from inflation, war-driven energy and food crises and sharply higher interest rates were pushing the world to the brink of
recession and threatening financial market stability
 The three largest economies, the United States, China and the Euro area have seen significant slowdown
 Global GDP growth for 2022 estimated to be 3.2% and for 2023 it is projected at 2.7% (2.9% earlier)
 India’s GDP growth forecast for FY23 lowered to 6.8% (7.4% earlier) due to less favourable external conditions and rapidly tightening financial conditions
 Eurozone’s economic outlook bleak : A recession is likely coming, due to the combined impact of tight monetary policy and the energy crisis which is impacting on output of
various (energy intensive) sectors, weighing down overall economy activity
 UK, the world’s sixth largest economy, is expected to contract over the next 2 years (through June’24) as per the Bank of England
Source: Edelweiss Wealth Research 5
Persistent Price Pressures

Retail Inflation

12

10

8
% YoY

0
US UK Eurozone Japan China India

Jan-22 Sep-22 Oct-22 Nov-22

• Inflation is seen as broadening across economies and has come to cover a wide range of goods and service, despite moderation in
headline inflation reading. Inflation is seen as becoming entrenched in many economies

Source: Bloomberg, Edelweiss Wealth Research 6

Easing Global Commodity Prices and Supply Chain Normalization To Provide Respite To
Inflation
Commodity Prices to ease; but to stay above 5 yr avg Food Prices easing sequentially
Natural Gas
Gold Silver Brent crude Copper Aluminum Nickel Coal
US
($/oz) ($/oz) oil ($/bbl) ($/tonne) ($/Tonne) ($/tonne) ($/tonne) 300
($/mmbtu)
2018 1269 16 72 3 6545 2114 13186 107 250
2019 1393 16 64 3 6020 1813 13970 78 200

FAO Index
2020 1770 21 42.3 2 6174 1704 13787 60.8
150
2021 1800 25 70.4 3.9 9317 2473 18465 138
2022 est 100
1775 21 100 6.6 8700 2700 25000 320
2023 est 1700 21 92 6.2 7300 2400 21000 240 50
2024 est 1650 21 80 6 7361 2434 20708 212 0

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22
Apr-18

Apr-19

Apr-20

Apr-21

Apr-22
Jan-18

Jan-19

Jan-20

Jan-21

Jan-22
Oct-18

Oct-19

Oct-20

Oct-21

Oct-22
Average
1558 19 62 3 7345 2234 18017 165
2018-21

Food Price Index Meat Dairy Cereals Oils Sugar

Freight rates dropping

12,000
Drewry's World COnatiner Index :

10,000
• Commodity prices and freight rates are being weighed down by
USD/ 40 ft container

8,000 global growth slowdown, possibly aiding in cooling off Inflation in

6,000
short term.

4,000

2,000

0
Jun-11

Jul-15

Jun-18

Jul-22
May-14

Apr-17
Nov-17

May-21
Aug-12

Aug-19
Jan-12

Mar-13

Dec-14

Feb-16
Sep-16

Jan-19

Mar-20

Dec-21
Oct-13

Oct-20

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 7

New Phase of Monetary Policy : Less Synchronized Going Forward

Interest Rate Changes in 2022 Real Interest Rates (10 Year Govt Security )
4.0 3.75
3.5 10.0
2.90
3.0 2.75 8.0
% Change Since Jan'22

2.5 2.25 6.0

2.00 2.00 4.0
2.0
2.0
1.5 0.0

%
1.0 -2.0
0.5 -4.0
-6.0
0.0
-8.0
-0.5 -0.20 -10.0
United United Australia India Euro Area Norway China US UK Japan S Korea Germany Brazil China India
States Kingdom

• Less uniform rate hikes (change from aggressive, synchronized rate action) on cards
• Central banks prepare to slow pace of rate hikes but differ on how high they can go
• US has signaled higher peak rate, while UK, Australia, Canada, Norway have been scaling down or have indicated limited upside to rates
• ECB to raise rates aggressively with inflation broadening and scaling fresh record highs
• Bank of Japan remains an outlier, opting to maintain excessively accommodative monetary policy. It has however suggested that it may
tweak monetary policy if inflation continue to exceed the 2% target) and wages rise
• Real rates (10 Year Government Security) have turned positive in some economies and remain in deep negative territory in some
• Central banks altering their approach – end of free money
• Central banks have to work towards bringing down inflation, protect economy and maintain financial stability
Source, Bloomberg, Edelweiss Wealth Research 8
 Sales Growth Remains Strong; BFSI Partly Offsets RM Pressures On Overall Profitability

Q2FY23 Performance - Edel 500 Q2FY23 Performance – Edel 500 (Ex-BFSI)

Sales (NII) EBITDA (PPOP) PAT Sales EBITDA PAT

37.1
32.7
29.5
27.0
16.7 15.7
16.3 15.3 15.3
12.9 7.8 8.5 7.8
9.1 9.4 2.8
0.1
1.0 2.8

-7.1
-0.6 -11.5

-11.1 -24.7
Quarter Quarter 6 months 6 months Quarter Quarter 6 months 6 months
(YoY) (3 yr CAGR ) (YoY) (3 yr CAGR) (YoY) (3 yr CAGR ) (YoY) (3 yr CAGR)

• Sales growth for Edel-500 companies has come in extremely strong at 27% YoY. The growth also is strong on a 3Y CAGR basis at 16% YoY.
Inflation has played a significant part in aiding the growth.

• Significant inflationary pressure led to a YoY decline in net profits in the quarter, Edel 500 companies have managed to delivered ~13%
growth in PAT on a 3Y CAGR basis but PAT is down 11% YoY

• Profits have been mainly driven by the BFSI segment offsetting negative impact of commodity companies which have been a major drag.

• Edel 500 (ex-BFSI) companies have registered 3Y CAGR profit growth of ~3%.

Source: Edelweiss Wealth Research

10
Volume Growth Has Been Strong In Major Infra / Consumption Industries

Metal Volumes expected to grow 10-11% over the next 2 years

PV quarterly sales are now back to pre-covid levels
continuing the upward trend

1.1
1.0 Qtly. Steel Volumes of Top 4 players in India
0.9 18.0
0.8 16.0
0.7
mn

mn tons
0.6 14.0
0.5
12.0
0.4
0.3 10.0
0.2
8.0

Q1FY22

Q2FY22
Q4FY19

Q1FY20

Q2FY20

Q3FY20

Q4FY20

Q1FY21

Q2FY21

Q3FY21

Q4FY21

Q3FY22

Q4FY22

Q1FY23

Q2FY23

1Q 18
2Q 18
3Q 18
4Q 18
1Q 19
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
3Q 20
4Q 20
1Q 21
2Q 21
3Q 21
4Q 21
1Q 22
2Q 22
3Q 22
4Q 22
1Q 23
2Q 23
Cement Consumption is expected grow at -8-9% over the next 2 years
430 16.0%
410 14.0%
390 12.0%
370 10.0%
mn tons

350 8.0%
330 6.0%
310 4.0%
290 2.0%
270 0.0%
250 -2.0%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E

Consumption % y-o-y

Source: Edelweiss Wealth Research 11

BFSI Sector Has Ensured Edel-500 PAT Decline Has Remained Respectable Amid The Margin Rout

BFSI is the only sector to have registered any substantial growth in PAT on a 3Y CAGR basis in Q2FY23 and H1FY23

Exports Oriented Commodities Investment Consumption BFSI

40 47.2
33 32 36.6 36.0
13 11 7 9.6 6.9 12.2 8.3 4.4
4.2

-7 -4 -1

-44.6
-62
YoY CAGR YoY CAGR
(Sep-19) (1HFY20)
Quarterly Growth Half Year Growth

Leading to shift in Edel 500 PAT to BFSI from Commodities

11% 8% 9%

19% 28% Residual

39%
BFSI
19% 9%
Consumption
13% Investment
25% 36% Commodities
16%
Exports Oriented
20% 15% 19%

Sep-19 Sep-21 Sep-22

Source: Edelweiss Wealth Research
12
Bottom 250 Companies Register 10% PAT Growth On A 3Y CAGR Basis In The Quarter While
TOP 250 Companies Struggle Due To Inflation
Q2FY23 – YoY Growth (Ex BFSI) – Top 100 (Ex-BFSI) impacted most due to the margin pressures on commodity companies

Sales EBITDA PAT

30.3 31.2 29.5
24.3 22.8

-3.6 -3.8
-17.0
-24.7
-29.2
Nifty Top 100 Next 150 Bottom 250 Edel 500

Q2FY23 – 3Y CAGR Growth (Ex BFSI) – Margin compression played spoil sport on a strong 3-year sales CAGR

Sales EBITDA PAT

17.7
16.5 16.7

13.6 12.9

9.5 10.1
8.5 7.8
5.6 4.9
3.8
3.0 2.8
2.2

Nifty Top 100 Next 150 Bottom 250 Edel 500

Source: Edelweiss Wealth Research 13

Margins Are Now Below Pre-Covid Levels As Gross Margins Take A Hit Across The Board

Edel 500 (Ex BFSI, Comm) – EBITDA Margin (%)

19.4 19.5

18.3
18.0
17.4
17.1 17.0
16.7 16.6
16.3 16.2
15.4
14.7
Sep-19

Mar-20

Sep-20

Mar-21

Sep-21

Mar-22

Sep-22
Jun-20

Jun-21

Jun-22
Dec-19

Dec-20

Dec-21
Edel 500 (Ex BFSI, Comm.) - EBITDA Margin (%)

Source: Edelweiss Wealth Research

14
RM Pressures Are Abating, Price Hikes And Operating Leverage To Support Margins
Our view is that fuel cost will remain high due to the ongoing
geopolitical scenario, albeit we have seen the worst on coal and
petcoke prices. Hopefully, they should not go up further.
- Ultratech Q2FY23 Conference Call
Net material inflation for the quarter stood at 22%. Company to see
slight sequential reduction in material inflation Q3, especially due to
vegetable oil. (However, other commodities are expected to remain
inflated). Hence, it expects to some sequential GM improvement.
- HUL Q2FY23 Conference Call
So, it's very hard to give a specific number, but like Anish mentioned, we
expect the margin trajectory to keep improving as we go forward.
- M&M Q2FY23 Conference Call
Overall pricing levels are still high though inflation is cooling,
expect inflation to cool off moving forward.
- Devyani Q2FY23 Conference Call
So, we expect inflation to be around 6% and the price increase
benefit of 6% kicks in now so we expect the inflation to
moderate in the coming quarters. With that sequentially, our
margins should be better
- Dabur Q2FY23 Conference Call
…commodity deflation impact, do you expect from Q3 onwards?
Yes, in Q2, it hasn't impacted into the P&L to that extent. So, it
will start flowing in Q3 onwards.
- Eicher Q2FY23 Conference Call
Source: Edelweiss Wealth Research
15
 Resilient Yet Sensitive

GST collections momentum indicates sturdy demand Auto Sales: Festive Cheer

21.6
21.1
1.8 25

20.2
1.6

17.1
1.4 20
1.2
INR Lakh Crore

15

Lakhs
1.0
0.8 10

4.6
4.5
3.9

3.4
0.6
5

1.1
0.9

0.9
0.9

0.8

0.8
0.8
0.7

0.6
0.6

0.5
0.4
0.4
0.2 0
0.0 2W 3W CV PV Tractor
May-18

May-19
Aug-19

May-20

May-21

May-22
Aug-17

Aug-18

Aug-20

Aug-21

Aug-22
Nov-17

Nov-18

Nov-19

Nov-20

Nov-21
Feb-18

Feb-19

Feb-20

Feb-21

Feb-22
Festive'19 Festive'20 Festive'21 Festive'22

Industrial Output Pressured

25
19.7 • Although resilient, sensitive to global headwinds
20
13.8 13.0 12.6
• Urban demand robust; rural demand gaining traction
15 11.5
% YoY Change

10 6.7
4.4 4.2 3.5
5 2.0 1.2 2.2
1.0 1.0
2.2
0
-5 -4.0
Jun-21

Nov-21

Dec-21

Jun-22
Jul-21

Jul-22

Aug-22
Oct-21

Oct-22
Aug-21

Sep-21

Feb-22

Apr-22

Sep-22
Jan-22

Mar-22

May-22

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 17

Capital Formation – Government Led

Emphasis on quality of expenditure

70
61
60
50
% Change YoY

40
28
30
20 17
14 14 14
10 10
10 7
0 1
0
-10 -2
7M FY20 7M FY21 7M FY22 7M FY23
Total Revenue expenditure Capital Expenditure

• While revenue expenditure has seen limited increase, expenditure towards capital asset creation has been notably higher in the ongoing
fiscal. Healthy overall tax collections have aided government’s income despite lower non-tax revenues and slippages under some tax
components

• Calibrating response in an environment of rising rates and nervous markets

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 18

US Dollar Momentum Moderates

Major Currencies Movement v/s the USD (MoM) Dollar Index has come off peaks

115 115.1 114.1

% Change : '+' Appreciation/ '-' Depreciation

4.8 110
-4.8
Australian Dollar -6.1 0.8
105 105
0.8 6.2
Mexican Peso -1.7 3.3
0.0 1.3 100
Swiss Franc -1.1 0.9

Dollar Index
-1.7 3.0 95
Thai Bhat -4.7 2.4
-5.8 4.6
Euro 2.1 90
-6.7
-7.1 -2.6
Pound Sterling -9.0 4.4 85
-9.6 0.5
Chinese Yuan -9.6 1.8 80
-9.9 -1.3
S African Rand -10.7 -1.6 75
-11.3 -2.7
Japanese Yen -19.2 1.7
70

Apr-17
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16

Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Oct-02

Oct-21
Oct-03
Oct-04
Oct-05
Oct-06
Oct-07
Oct-08
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-22
-25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0

MoM YTD

• Even though the likelihood of the USD surging to record highs touched in late September in the near term has lessened, the downside
too is limited

• Relatively strong US economy (that could keep prices elevated) can prompt the Federal Reserve to pursue its tightening policy stance
for longer, taking interest rates to higher than anticipated levels. The broadening slowdown in the global economy and unabated geo-
political tensions all of which continue to lend support to the US
Source: Bloomberg, Edelweiss Wealth Research 19
Long Term Differential Between Mcap And GDP In Comparison To The World Not As Stark As
In Previous Peaks
India’s Mcap to World Mcap ratio inline with India GDP with World GDP
4.00 4.00
Current
differential is
3.50
only 6 bps 3.50
3.13
3.00 3.04

60 3.00
2.50 bps
100
2.00 bps 2.50

1.50
2.00
1.00
1.50
0.50

0.00 1.00
Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21
Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Jun-12

Jun-13

Jun-14

Jun-15

Jun-16

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21

Jun-22
India Mcap as % of World Mcap India GDP as % of World GDP (RHS)

Source: Edelweiss Wealth Research 21

Financial Markets Are Being Supported By Strong Domestic Flows

Domestic Flows Have Been Extremely Resilient

80,000

60,000

40,000

20,000

-20,000

-40,000

-60,000
Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22

FIIs are now realizing India might be the TINA market

80,000

60,000

40,000

20,000

-20,000

-40,000

-60,000

-80,000
Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22

Source: Edelweiss Wealth Research 22

India’s Allocation In Global Benchmark Indices Like MSCI EM Is On The Rise Which
Should Also Ensure Steady FII Flows In The Long Term

Top Countries 31-Mar-20 31-Mar-21 31-Mar-22 31-Oct-22

China 36.1 35.5 27.5 26.9

India 7.7 9.6 12.8 16.2

Taiwan 12.1 13.7 15.5 13.5

South Korea 11.7 13.3 12.3 11.9

Brazil 4.8 4.5 5.7 6.4

Others 14.9 14.3 15.6 25.0

Source: Edelweiss Wealth Research 23

Softening In Crude Prices : A Welcome Move For Indian Markets

• Crude Oil prices have given a breakdown from “Head & Shoulders” pattern which is associated with a
trend reversal pattern.
• Historical analysis indicates that, Crude oil prices below $75 have resulted in an average upside move of
20% - 25% in Nifty.
Source: Edelweiss Wealth Research 24
Why Is Every Dip Likely To Be Bought Into? The Psychology Of Money?

Growth in investors has been rapid recently Most investors would have doubled their money in 2 years

120 Nifty Indexed Returns Since Mar-20

103
100 250 231.30
220
80
58 190
(mn)

60
41 160
40 31
25 130
20 10 100

0 70
FY16 FY20 Q2FY23

Demat Accounts (mn) SIP Account (mn)

Early Investment Experience shape investor’s psychology

• Morgan Housel in his book “The Psychology of Money” has mentioned “People’s personal experience with money make up maybe
0.00000001% of what’s happened in the world, but maybe 80% of how people think the world works.

• We have seen a massive increase in stock market / MF investors over the past 2 years, majority of which have seen their investments
double over the last 2 years

• People’s investment decisions are heavily anchored to their investment experiences especially in their early adult life. And these
strong returns are likely to make these investors more biased towards buying more stocks on every dip as they have anchored
expectations on their investment return expectations

Source: Edelweiss Wealth Research 25

Blistering Growth Momentum Seen In Credit Offtake

Credit growth (%) at a 12-year high Corporate lending picking pace

25% 40%
20%
20% 30%

20%
15%
10%

10% 0%

-10%
5%

Apr-21

Apr-22
Mar-21

Dec-21
May-21

Aug-21

Mar-22

May-22

Aug-22
Jun-21

Oct-21

Jun-22
Nov-21

Jan-22
Jul-21

Sep-21

Feb-22

Jul-22

Sep-22
0%

Q1FY23

Q2FY23
FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22
Large (Industry) YoY Growth (%) MSME (Industry) YoY Growth (%)
Personal Loans YoY Growth (%)

• Loan growth has been accelerating since the last 7 quarters and is expected to remain robust over the next couple of years.

• Whereas the retail and SME segments have been contributing much of the growth thus far, a pickup in demand for capex related
lending is expected to drive a spurt in corporate loan growth.

• Banks’ PCR levels are at a multi-year high and they are very well capitalized. Moreover, with Covid-19 induced stress well and truly
behind, banks are well positioned to maintain their emphasis on credit growth.

Source: Edelweiss Wealth Research 27

Stress In The Banking System Is At Its Lowest In Years

GNPA (%) has reduced substantially… ….driven by improvement in corporate AQ…

16.0 25
14.0 PSUs’ AQ has Key Driver of AQ
significantly 20 improvement
12.0
improved
10.0 15
8.0
6.0 10
4.0
5
2.0
0.0 0
PVBs' GNPA (%) PSUs' GNPA (%) Sector GNPA (%) Agri Industry Services Retail Overall

FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q2FY23 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

…across sectors Restructured Advances (%)

Sector-wise GNPA (%) 6.0 5.7 5.5

50 Mild uptick in
5.0 4.5 restructuring due to
40
Covid related regulatory
30 4.0 dispensation
20
3.0
10
2.0
0 2.0 1.5 1.6
Mining & Cement & Basic Metals Engineering Auto & Auto Infrastructure 1.0 0.9
Quarrying Cement & Metal Parts 1.0
Products Products
0.0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 Q3FY22
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: Edelweiss Wealth Research 28
Remarkable Balance Sheet Strength

Both PSUs and PVBs have enhanced their PCR Credit cost has consistently declined since FY18
100% 4.5% 4.0%
78% 74% 4.0%
80% 73% 3.5%
3.5%
2.9%
60% 3.0% 2.6%
2.4% 2.4%
2.5%
40%
2.0% 1.5%
20% 1.4%
1.5% 1.1%
0% 1.0%
PVBs' PCR (%) PSUs' PCR (%) Sector PCR (%) 0.5%
0.0%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q2FY23 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23

Adequately capitalized (CRAR %)

20
Whereas an improvement in asset
18
quality has resulted in a decline in
16
credit costs to healthy levels, banks’
14 robust PCR will help keep it there
12

10
Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21
Sep-21
Mar-22
Sep-12

Sep-13

Sep-14

Sep-15

Sep-16

Sep-17

Sep-18

Sep-19

Sep-20

PSBs PVBs ALL SCBs

Source: Edelweiss Wealth Research 29

Banking Sector’s Return Ratios – Soaring High

Combination of NIM improvement and Credit Cost moderation…

Sector NIM Sector Credit Cost

3.4% 3.2% 5.0%
3.1% 4.0%
3.2% 3.1% 4.0% 3.5%
3.0% 2.9%
2.8% 2.9%
3.0% 2.4% 2.6% 2.4%
2.8% 2.6% 2.7% 2.6% 2.7%
2.6% 2.0% 1.4% 1.5%
2.4% 1.1%
1.0%
2.2%
2.0% 0.0%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23

… lead to jump up in return ratios….

Sector RoA Sector RoE
1.2% 20%
1.0% 1.0% 1.0%
1.0% RoA at a decadal 15%
0.9% 14%
high in H1FY23 15%
0.8% 0.7% 0.7% 12%
0.6% 11% 10% 11%
0.6% 10% 8%
0.4%
0.4% 5%
0.2% 5% 3%
0.2% 0.1% 1%
0.0% 0%
-0.2%
-0.2% -5% -4% -2%
-0.4% -0.3% FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

H1FY23
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

H1FY23

Source: Edelweiss Wealth Research 30

Public Sector Banks – Edging Closer To Their Private Counterparts

 PSU Banks’ GNPA levels have been on a consistent decline since peaking in FY18. Slippages have been
largely contained over the last few quarters, and we expect this trend to continue.
 Balance sheets of PSU Banks have been significantly strengthened, as evidenced by healthy levels of
NPA coverage and CRAR.
 Credit growth of the overall banking sector has been picking up pace and now stands at nearly a
decadal high. We believe growth will remain robust over the next few years and expect PSU banks to
participate in it.
 The combination of receding stress, healthy provisioning levels, and NIM expansion will contribute to
strong return ratios.
 Valuations for PSUs are quite attractive and present a favorable risk-reward tradeoff in the case of
select banks.

Source: Edelweiss Wealth Research 31

PSUs (Catching up with PVBs) – Asset Quality

PSU Banks have done well to contain slippages in recent quarters

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23
PSUs' Slippage Ratio PVBs' Slippage Ratio

• Despite of a Covid induced spike in slippages in Q4FY21, the slippage ratio of PSU Banks has largely mirrored that of Private Banks.

• In fact, in 9 out of the last 14 quarters, PSUs have reported lower slippage ratio than the PVBs.

Source: Edelweiss Wealth Research 32

PSUs (Catching up with PVBs) – Loan Growth

Loan growth gap between PSUs and PVBs closed off completely in Q2FY23
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%

Q4FY20
Q1FY17

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

Q1FY20

Q2FY20

Q3FY20

Q1FY21

Q2FY21

Q3FY21

Q4FY21

Q1FY22

Q2FY22

Q3FY22

Q4FY22

Q1FY23

Q2FY23
PVBs' YoY Loan Growth PSUs' YoY Loan Growth

PSUs boast ample headroom in CD ratio

• PSUs’ loan growth has substantially picked up in recent quarters,
100% 86% bringing them to growth parity with large private banks as of
80% 69% Q2FY23.
60%
40% • Whereas a wider gap between PSUs and PVBs still exists when it
20%
comes to deposits growth, the fact that PSUs have a considerably
0%
lower CD ratio is a major positive.
Q2FY23
FY18
FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY19

FY20

FY21

FY22

• Thus, access to deposits will not be a barrier for PSUs’ loan

growth over the next few quarters.
PSUs' CD Ratio PVBs' CD Ratio

Source: Edelweiss Wealth Research 33

DEFENCE
 Growth Drivers: Significant Capex Plans Towards Modernization

India plans to incur over USD130bn towards modernisation programme over next 6-7 years

Missile and air LCA Tejas, Su-30 MKI, Mig-29 UPG (upgrades+21 new), Mirage 2000
Combat/Trainer
defence upgrades, MRFA, Multi-role carrier based aircrafts, Trainer aircraft,
Combat infantry 10%
Aircraft Airforce Boeing P8I, Tanker aircraft, AWACS, Transport aircrafts, LUH, LCH,
vehicle 27%
Apache, Kamov Ka 226T, MH 60R, MQ-Reaper
5%

Air-defence
Artillery 10%
7% Project 15B, Project 17A, Project 11356, Project 75, Project 75I,
Army
Navy Arihant class, SSN, Anti submarine warfare vessel, NG Missile
12% vessel
Support Airforce
vessel 42%
2%

CIWS, Air-air-gun, Arjun Mark1A, T90, Dhanush, M777, ATAGS,

Army Self propelled howitzers, Pinaka, AFV, BMP
Support
7%
Navy
Submarines 36%
23%
Rotary
8% VSHORAD, S400, IADWS, SRSAM, MRSAM, Akash, Astra, ATAGM NG,
Surface Missile Agni Prime,
combatants
11%

Source: Edelweiss Wealth Research

35
 Defense Sector Sales Are Continuing To Show Strength; Order Book Accretion Continues

TTM Sales* For Sector continues to grow ~20% YoY Order book# accretion in the defense sector continues
60,000 25.0
2,44,072

2,33,450 2,35,455
55,000 20.0

50,000 15.0 2,00,572

1,89,498
1,83,750
INR cr

45,000 10.0

1,56,684
40,000 5.0
1,49,965

35,000 0.0

30,000 -5.0
Dec-20
Dec-18

Dec-19

Dec-21
Jun-19

Jun-20

Jun-21

Jun-22
Mar-19

Mar-20

Mar-21

Mar-22

Sep-22
Sep-19

Sep-20

Sep-21

FY19 FY20 FY21 FY22 H1FY23

TTM Sales Sales Growth (%) TOTAL Defence Order Book (Ex-MDL) TOTAL Defence Order Book (With-MDL)

Source: Edelweiss Wealth Research

* Sales is calculated as a collation of BEL, HAL, BDL, CSL, Solar Industries, Premier Explosives and Astra Microwave
# Order book is calculated as a collation of BEL, HAL, BDL, CSL, GRSE, MTAR, Data Patterns, Astra Microwave, Solar Industries (Defence), Premier
Explosives
36
Management Guidance For Both Growth And Margins Pointing Higher

Despite of these challenges, half yearly results, along with the strong
order book of INR 4,000 crores-plus, which includes defense orders of
INR 885 crores, gives us a strong confidence to revise our annual
revenue growth for financial year '22/'23 from 30% to around 50%.

- Solar Industries Q2FY23 Conference Call

Lower end of EBITDA guidance raised to 22-23% from 21-23%
The aggregate value of all these contracts is expected to be around Rs. - BEL Q2FY23 Conference Call
50,000 crore, which should all materialize since it is all there in the
advanced stages. We expect it to get materialized in the next six months
to one year timeframe.
- HAL Q2FY23 Conference Call

Raised EBITDA margin guidance to 26-27% owing

Order inflow guided at Rs200bn each in FY23 and FY24. to higher share of RoH & spares in short term and sourcing
- BEL Q2FY23 Conference Call efficiencies in the long term

-HAL Q2FY23 Conference Call

Orderbook to grow 2x to Rs250bn in next 2-3 years

- BDL Q2FY23 Conference Call

Source: Edelweiss Wealth Research

37
Defence Companies Show A Break Out In Ratio Chart Compared To Nifty

Equal Weighted Defence Index / Nifty (Ratio Chart)

• Indian markets are no different than U.S markets, the above chart indicates even Nifty tends to peak out before Indian Repo rates
peak.

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 38

 0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jul-00

12.0
14.0
16.0
18.0
22.0
24.0
26.0

20.0
Dec-00
Dec-12
May-01
Oct-01
Mar-02
Aug-02
Jan-03
Dec-13
Jun-03
Nov-03
Apr-04
Sep-04
Feb-05
Dec-14
Jul-05
Dec-05
May-06
Oct-06
Mar-07
Dec-15
Aug-07
Jan-08
Jun-08
Nov-08
Apr-09
Dec-16
Sep-09
1 Yr Fwd PER

Feb-10
Jul-10
Dec-10
May-11
Dec-17
Average

Oct-11
Mar-12
Aug-12
Jan-13
Std-1

Jun-13
Dec-18
Nov-13
Apr-14
Sep-14
Std+1

Feb-15
Jul-15
Dec-19
Dec-15
May-16
Oct-16
Nifty Forward PE is near its median levels leaving limited upside

Nifty Valuations compared to MSCI EM are now near 10- year highs

Mar-17
Aug-17
Dec-20
Jan-18
Jun-18
Nov-18
Apr-19
Sep-19
Dec-21
Feb-20
Jul-20
Dec-20
Valuations Are Near Long Term Median Levels And At A Multi-year Premium To MSCI EM

May-21
Oct-21
Dec-22
Mar-22
19.7
22.5

17.0
20.1

Aug-22
Source: Edelweiss Wealth Research 40
Markets Tend To Peak Earlier Than Interest Rates – US Markets

• Historical analysis of Interest rate cycle indicates that stock markets tend to peak out before actual interest rates peak.

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 41

Markets Tend To Peak Earlier Than Interest Rates – Indian Markets

• Indian markets are no different than U.S markets, the above chart indicates even Nifty tends to peak out before Indian Repo rates
peak.

Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 42

Yield Curve Inversion Analysis

100% 3500

90%
3000
80%

70% 2500

60%
2000

50%

1500
40%

30% 1000

20%
500
10%

0% 0
1977

1997
1997

2017
2017
1977
1978
1979
1980
1981
1982
1982
1983
1984
1985
1986
1987
1987
1988
1989
1990
1991
1992
1992
1993
1994
1995
1996

1998
1999
2000
2001
2002
2002
2003
2004
2005
2006
2007
2007
2008
2009
2010
2011
2012
2012
2013
2014
2015
2016

2018
2019
2020
US yield curve inversion (%) (LHS) US Recession (LHS) SPX Index

• Above chart is a graphical representation of our proprietary yield curve model, X – Axis (LHS) captures the percentage of inversion
across maturities. Whereas RHS captures the price of S&P 500. Red line in the chart is the outcome of the model which captures
whether there is a probability of recession in the U.S.
• A 75% yield curve inversion is an indication that recession in the U.S is unavoidable. The above model is indicating that inversion
across yield curves has reached 68%.
Source : World Bank, FAO, Bloomberg, Edelweiss Wealth Research 43
Large Cap Model Portfolio

Model Largecap Portfolio vs Nifty 100

235

215 213.08 203.83

197.32
202.74
195
186.92
201.00
175 175.17

155 166.19

135

115

95
16-04-2020

16-06-2020

16-08-2020

16-10-2020

16-12-2020

16-02-2021

16-04-2021

16-06-2021

16-08-2021

16-10-2021

16-12-2021

16-02-2022

16-04-2022

16-06-2022

16-08-2022

16-10-2022
Largecap Portfolio Nifty 100

Source: Edelweiss Wealth Research

45
Large Cap Model Portfolio

FY23E ROE (%) vs. P/B (x) ROE (%) P/E (x) P/B (x)
Outperformance
CMP Weights FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E since addition

ICICI Bank 933 10.1% 16.3 16.2 16.8 25.8 21.3 17.9 3.3 3.0 2.6 81%
Infosys 1,572 9.0% 30.5 31.1 33.1 29.9 27.0 23.3 8.2 8.3 7.3 35%
Titan 2,576 7.8% 25.9 30.5 29.4 105.2 69.8 58.0 24.6 19.5 15.7 40%
Asian Paints 3,179 7.4% 22.8 28.5 30.8 100.6 71.8 57.9 22.1 19.3 16.7 -22%
Pidilite 2,649 7.3% 20.1 21.7 24.9 111.5 89.9 66.8 21.0 18.4 15.6 -25%
Siemens 2,990 7.1% 11.0 14.0 15.3 69.0 60.2 49.6 10.3 8.5 7.5 84%
Page Industries 46,779 6.7% 54.4 59.9 56.4 97.2 69.8 57.4 47.9 37.0 28.5 67%
HDFC Limited 2,703 6.0% 13.4 12.3 12.9 21.6 24.6 21.1 2.7 4.2 3.8 -35%
Tata Motors DVR 224 5.8% -24.0 -3.1 22.9 -7.5 108.5 6.9 3.3 1.9 1.6 41%
DLF 400 5.4% 4.2 6.1 7.3 66.1 44.3 33.8 2.7 2.6 2.5 16%
ITC 346 5.3% 24.8 28.1 29.3 27.9 23.7 21.6 6.8 6.3 6.1 8%
Indusind Bank 1,235 4.5% 12.6 14.3 15.4 19.9 12.9 10.5 1.9 1.8 1.5 5%
Maruti Suzuki 8,621 4.3% 7.2 13.3 18.0 67.1 34.2 22.4 4.7 4.4 3.9 -4%
Havells 1,152 4.2% 21.4 18.9 22.0 60.3 59.5 45.2 12.0 10.8 9.4 -17%
Ultratech Cement 7,225 3.9% 15.5 10.8 13.1 28.4 37.3 26.8 4.1 3.8 3.4 -11%
Jubilant Foods 521 3.0% 24.9 24.5 26.5 81.9 64.3 49.4 17.7 14.5 11.9 -16%
Nykaa 173 2.1% 4.5 6.2 13.9 1,179.2 554.3 214.8 36.7 34.2 28.9 -45%

Source: Edelweiss Wealth Research

46
Mid Cap Model Portfolio

Model Midcap Portfolio vs Nifty Midcap 100

340

308.38 306.87

290 275.42 277.41

279.28
250.82
252.77
240

199.35 245.99
237.35 238.30
190 187.57

140

90
16-04-2020

16-06-2020

16-08-2020

16-10-2020

16-12-2020

16-02-2021

16-04-2021

16-06-2021

16-08-2021

16-10-2021

16-12-2021

16-02-2022

16-04-2022

16-06-2022

16-08-2022

16-10-2022
Midcap Model Portfolio Nifty Midcap

Source: Edelweiss Wealth Research

47
Mid Cap Model Portfolio

FY23E ROE (%) vs. P/B (x) ROE (%) P/E (x) P/B (x)
Outperformance
CMP Weights FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E since addition

Max Healthcare 430 9.8% 10.2 14.3 14.2 68.8 39.6 35.7 6.6 5.5 4.7 53%
Cholamandalam Invst. and Fin. 752 8.2% 20.2 18.8 19.5 28.6 26.4 21.2 5.2 4.5 3.8 232%
Lumax Industries 1,961 7.7% 8.6 17.7 19.2 45.0 18.1 15.2 3.7 3.1 2.8 78%
PSP Projects 704 6.4% 27.3 21.0 22.3 15.2 15.5 12.1 3.7 3.0 2.4 -92%
Aegis Logistics 362 5.5% 17.4 17.7 17.8 35.6 29.2 24.7 5.8 4.4 3.8 -23%
Trent 1,444 5.4% 4.5 16.3 19.2 484.4 121.0 88.8 21.7 18.4 15.5 62%
Astral Poly Technik 2,100 5.2% 22.9 18.2 21.7 87.2 90.2 63.8 18.1 15.5 13.0 52%
JK Cement 3,153 4.9% 17.0 13.1 16.8 35.5 41.1 28.5 5.6 5.1 4.4 35%
Brigade Enterprises 476 4.6% 3.1 9.1 11.9 129.8 38.9 26.9 3.8 3.5 3.1 44%
Ashok Leyland 144 4.6% -4.7 11.8 25.8 -118.0 24.4 17.0 5.8 5.4 4.4 13%
Titagarh Wagons 201 4.6% -0.1 10.4 13.4 22.2 16.7 11.6 2.1 - - 31%
VIP Industries 732 4.5% 12.4 30.7 30.1 154.7 52.9 41.2 18.5 14.1 11.2 71%
CreditAccess Grameen 901 4.4% 9.5 18.3 20.8 38.6 17.6 12.7 3.5 2.9 2.4 19%
PI Industries 3,491 4.2% 14.7 17.3 18.0 62.7 45.6 37.2 8.7 7.4 6.3 -29%
LTI MindTree 3,152 4.2% 30.2 28.6 28.4 24.0 20.1 17.4 6.0 5.3 4.5 185%
MTAR 1,711 3.6% 12.2 16.6 24.2 86.4 52.6 30.2 10.1 8.6 6.9 2%
Tarsons Product 733 3.4% 27.4 17.2 17.7 37.7 41.7 33.6 8.0 6.7 5.6 -14%
Sapphire Foods 1,385 3.3% 6.2 11.7 14.0 178.0 70.6 51.0 8.7 7.8 6.8 -6%
Dalmia Bharat Cement 1,856 3.1% 8.0 4.3 6.8 30.4 50.0 30.4 2.2 2.1 2.0 -14%
Cash 1 2.5%
Source: Edelweiss Wealth Research 48
India –Standout Economy

1980 1990 2000 2010 2020 2022

GDP Current Prices (USD Bn) 189 327 477 1708 2660 3469

Rank in World GDP 13 12 13 9 6 5

% share in World GDP 1.69 1.38 1.40 2.57 3.12 3.42

• India has risen to be the fifth largest economy in the World

• The IMF forecasts that by 2027, India would be the fourth largest economy

• Retains the tag of fastest growing large economy

• Structural changes in the global economy, trade dynamics and geopolitics provides opportunities for India

• Policy reforms and prudent regulatory measures have played a key role in developing resilience in the economy

Source: IMF, Edelweiss Wealth Research 50

Economic Growth: Reopening led recovery

Quarterly GDP Growth (Y-o-Y) Sectoral Performance : % Growth YoY

Q2 FY23
40 Q2 FY20 Q2 FY21 Q2 FY22 Q2 FY23 v/s Q2

32.4

26.7
FY20

20.1

19.0
30

16.2
15.7

14.9
13.5
12.0
20 Agriculture, forestry & fishing 3.2 3.2 3.2 4.6 11.3
8.6

8.4
6.5

6.3
Industry -2.0 0.6 7.0 -0.8 6.7

6.2

5.4
5.4
4.9

4.6
4.2

4.1
3.1

3.0

2.5
10

0.7
Mining & quarrying -4.9 -7.9 14.2 -2.8 2.5
%

0 Manufacturing -3.3 5.2 5.6 -4.3 6.3

-10 -2.9
Electricity, gas, water supply & other utility
-6.6
1.8 -3.2 8.5 5.6 10.9
services
-21.6

-20
-23.8

-30 Construction 0.9 -6.6 8.1 6.6 7.6

Services 7.3 -10.9 10.2 9.3 7.4
Q1 2019-20

Q2 2019-20

Q3 2019-20

Q4 2019-20

Q1 2020-21

Q2 2020-21

Q3 2020-21

Q4 2020-21

Q1 2021-22

Q2 2021-22

Q3 2021-22

Q4 2021-22

Q1 2022-23

Q2 2022-23
Trade, hotels, transport, communication &
6.5 -18.8 9.5 14.8 2.1
broadcasting

Financial, real estate & professional services 8.2 -5.2 6.1 7.2 7.8

Real GDP Nominal GDP Public administration, defence and other

6.9 -10.2 19.4 6.5 14.2
services
GVA at Basic Price 4.1 -5.9 8.3 5.6 7.6

• Domestic economic activity expanded in Q1 and Q2 FY23

• The strong GDP growth is reflective of the recovery in domestic economic activity from the pandemic slowdown notwithstanding the challenging
external economic environment
• Agriculture and allied sector output has been firm
• Resurgence in services
• Industrial sector output has been weak
• Nominal GDP grew by 16.2% in Q2 FY23 (the wide gap with real GDP reflective of price pressures)
Source: MoSPI, Edelweiss Wealth Research 51
Improvement: Consumption and Investments

Growth in Consumption and Investment - Current Prices Quarterly Consumption and Investment (as % of GDP)

74
Q2 FY23 v/s 80
Y-o-Y % Growth
Q2 FY20

63
63
63

62
61
70

60

60
60

60
59

59
59

55
Q2 FY20 Q2 FY21 Q2FY22 Q2 FY23 60
50

% of GDP
Government
5.5 -22.9 8.9 -4.7 -19.7 40

30

30
29

29
29
Consumption (GFCE)

28
27
27

26

26
26

26
26
30

21
Private Consumption 20
5.7 -8.3 10.5 10.0 11.2
(PFCE) 10

14

17
11
12

12
10
Q3 2019-20 11

Q2 2020-21 11

Q1 2021-22 13

Q4 2021-22 12

Q1 2022-23 11
Q2 2021-22 10

Q3 2021-22 10

Q2 2022-23 9
Investment (GFCF) 0.9 -4.5 14.6 10.4 20.8 0

Q4 2020-21
Q1 2019-20

Q2 2019-20

Q4 2019-20

Q1 2020-21

Q3 2020-21
Exports -2.0 -6.4 20.7 11.5 25.9
Imports -1.9 -17.9 41.0 25.4 45.1
GDP (at current prices) 4.2 -6.6 8.4 6.3 7.6
Pvt Consumption (PFCE) Govt Consumption (GFCE) Investment (GFCF)

• Private consumption demand has been a growth driver and investments registered encouraging improvement

• Private consumption rose 10% YoY in Q2 FY23 (pent up demand )

• Private consumption accounted for nearly 62% of the GDP in Q2 FY23, 2% higher than Q4 FY22. This is indicative of the relative
resilience of the domestic demand in the face of price pressures.

• Investment demand grew (10.4% YoY)

• Investment rate in Q2 FY23 improved to 29.6% of GDP from 29.15 in Q1 FY23 and 26% in Q4 FY22

Source: MoSPI, Edelweiss Wealth Research 52

India’s GDP Growth Notably Higher Despite Challenging External Environment

10.0 8.6
8.0
Real GDP Growth : % YoY

6.3 5.7
6.0
3.9
4.0 3.1 2.6 2.4 2.1 1.9 1.8 1.3
2.0 1.0
0.0
-2.0
-4.0
-4.0
-6.0
Saudi India Indonesia China South Italy United Euro Area United Japan Germany France Russia
Arabia Korea Kingdom States

Jul-Sep'22

• India remains one of the fastest growing economy in 2022

• GDP growth of 6.8% in Jul-Sep’22 was amongst the highest among key economies, following the 13.5% (YoY) in Apr-Jun’22

• India better position to navigate global spill overs– has demonstrated resilience and strong macroeconomic fundamentals

• India has a large domestic market and is relatively less exposed to international trade flows

Source: Trading Economics, Edelweiss Wealth Research 53

Edelweiss Broking Limited, Edelweiss House, Windsor Ln, Kolivery Village, MMRDA Area, Kalina, Santacruz East,
Mumbai, Maharashtra 400098

Vinay Khattar
Head Research
VINAY Digitally signed by
VINAY KHATTAR

vinay.khattar@edelweiss.in KHATTAR Date: 2022.12.21

11:59:15 +05'30'

54
Disclaimer
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Management and Life Insurance. There were no instances of non-compliance by EBL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years. This research report has been prepared and distributed by Edelweiss Broking Limited ("Edelweiss") in the capacity of a Research Analyst as per Regulation 22(1) of SEBI (Research
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Disclosures under the provisions of SEBI (Research Analysts) Regulations 2014 (Regulations)
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Management and Life Insurance. There were no instances of non-compliance by EBL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years. This research report has been prepared and distributed by Edelweiss Broking Limited ("Edelweiss") in the capacity of a Research Analyst as per Regulation 22(1) of SEBI (Research
Analysts) Regulations 2014 having SEBI Registration No.INH000000172
This Report has been prepared by Edelweiss Broking Limited in the capacity of a Research Analyst having SEBI Registration No.INH000000172 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein
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EBL and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies), mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial
instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance. EBL may have proprietary long/short position in the above
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EBL or its associates may have received compensation from the subject company in the past 12 months. EBL or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. EBL or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past
12 months. EBL or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EBL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Research analyst or
his/her relative or EBL’s associates may have financial interest in the subject company. EBL, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance.
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and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.
Research analyst has served as an officer, director or employee of subject Company: No
EBL has financial interest in the subject companies: No
EBL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.
Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
EBL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
Subject company may have been client during twelve months preceding the date of distribution of the research report.
There were no instances of non-compliance by EBL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years.
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Analyst Certification:
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
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