2QFY24 Results Recap - Good, Bad, Ugly - 231117

2QFY24 results recap - The good, the bad and the ugly
17 November 2023
2QFY24 AP
S REC
RESULT
Strong quarter, but on expected lines!

Pankaj Chhaochharia
+91 22 6911 3340
pankaj.chhaochharia@antiquelimited.com
Dhirendra Tiwari Research Team

+91 22 6911 3436 Abhimanyu Godara +91 22 6911 3300
dhirendra.tiwari@antiquelimited.com abhimanyu.godara@antiquelimited.com equityresearch@antiquelimited.com
Strictly confidential
17 November 2023
Pankaj Chhaochharia, +91 22 6911 3340, pankaj.chhaochharia@antiquelimited.com
Dhirendra Tiwari, +91 22 6911 3436, dhirendra.tiwari@antiquelimited.com
Strong quarter, but on expected lines! Research Team, equityresearch@antiquelimited.com
Nifty 50's (ex-insurance) revenue/ EBITDA grew by 5%/ 21%, Slowdown in ordering on the export side.
which was below our expectations by 2%/ 1% respectively, 2. Revival in investment cycle is gaining strength: Management
while PAT grew by 26% which was ahead of our expectation commentary suggests that the investment activity remains buoyant
by 2%. Excluding financial and a few volatile sectors like helped by continuing public capex, leading to a) Pick-up in execution
telecom, commodity, and Tata Motors, Nifty's revenue/ EBITDA/ for industrial companies; b) A lower drop in domestic steel prices
PAT grew 9%/ 15%/ 21%, which is -1%/ 0%/ 1% ahead of (relative to other geographies) with expectation of improvement in
expectations. Within Antique's coverage universe (excluding 2HFY24 realization; c) Strong growth in residential sales booking
financial and commodity), revenue/ EBITDA/ PAT grew by 8%/ (~50% YoY) with a strong launch pipeline in 2HFY24; and d) Cement
15%/ 19% respectively, which are -1%/ 1%/ 5% ahead of companies planning to significantly increase capacity over the next 4-
expectations. Strong growth during the quarter was 5 years.
predominately due to a favorable base effect (last year's 3. Early signs of revival in rural demand: Rural demand is seeing
profits de-grew due to higher inflationary pressures). signs of improvement due to a) Low base; b) Significant infrastructure
Overall, EBITDA beat was reported in sectors like retail, and local body work; c) MSP increase; d) Populist schemes due to the
automobile, utilities, and industrials. While a miss was seen upcoming state assembly and Lok Sabha elections; e) Good winter
in consumer durable, agro-chemical, cement, and QSR. EBITDA crop seeding; f) Moderation in inflation; and g) Rise in real wages.
margin (excl. financial & commodity) improved by ~110 bps 4. Festive demand has started off well: Managements across
YoY to 19.6% (higher than our estimate of 19.3%) across most sectors like two-wheeler, four-wheeler, fashion retailer, consumer
sectors barring Infrastructure, Agro-chemical, Retail, Consumer durables mentioned that the festive season has started off well
durable. (especially during Onam/ Pujo/ Navratri/ Dusshera) helped by pick-
up in rural demand, lower inflationary pressures, and stagnant interest
Key trends observed from management commentaries:
rates. Our recent interaction with auto dealers suggests that the resilient
1. Moderation in global growth momentum is visible demand trend is likely to persist in the near term.
particularly in the US and EU (due to tight financial conditions, and
Broadly, we are constructive on the overall market, given the
protracted and enhanced geopolitical tensions). It is leading to a)
receding macro pressures (lower Brent crude, US 10-year yield,
Reprioritization of IT services spending from discretionary areas to
dollar index, and domestic political risks), supportive valuation
cost optimization; b) Moderation in steel prices; c) Export-oriented
(at long-term average), in-line corporate earnings, strong
agro-chemical companies are witnessing immense pressure due to domestic SIP flows, receding FPI equity selling pressure and
global channel inventory de-stocking and dumping by China; and d) expectation of a resumption in the rate cut cycle from 1QFY25.
Antique Stock Broking Limited 2

17 November 2023
Strong
Xxxxx quarter, but on expected lines! Research Team, equityresearch@antiquelimited.com
Our FY23/ FY24/ FY25 Nifty 50 earnings currently stand at universe stands at an all-time high of INR 7.6 trn providing visibility of
INR 808/ INR 966/ INR 1,089 (implying FY24/ 25 earnings 3.2x its TTM revenue.
growth of 20%/ 13%) respectively. We continue to prefer 4. Cement companies reported ~15% revenue growth (helped by
industrials, real estate and cement and our Mar'24 Nifty 50 ~14% volume growth) with ~75% EBITDA growth (largely due to a
target remains unchanged at 20,800 based on 19x FY25 EPS low base). Blended EBITDA/ton increased by INR 314/ton YoY but
of INR 1,089. declined INR 18/ton QoQ-marginally lower than our estimate due to
Key sector-wise takeaways: lower than expected input cost reduction and higher than expected
1. Key trends visible within our banking universe are: a) Sequential maintenance shutdown costs.
decline in NIMs; b) Select banks may see a further decline in NIMs 5. Within utilities, a) Less than an average monsoon impacted NHPC,
due to the ongoing re-pricing of term deposits; c) Stable loan growth SJVN, and JSW Energy's generation during the current quarter; b)
momentum (3%-6% QoQ growth); d) PAT grew by ~21% YoY (higher Coal India posted strong financials helped by ~12-13% YoY production
than our estimate by ~6%) supported by higher other income and and off-take; c) Health of discoms is improving with Tata Power, Torrent
lower than estimated provisions; and e) On asset quality, the overall Power, and CESC reporting improved numbers for distribution
trend remained stable and benign. operations with AT&C losses starting to reduce for many subsidiaries.
2. Private insurers reported APE and VNB growth of 14% YoY and 6. Real estate companies reported strong growth in sales booking
9% YoY. Going ahead, 2HFY24 APE growth (ex-Mar'24) is likely to be (~50% YoY), helped by strong response to new launches. Most of the
better than 1HFY24 led by a lower decline in non-par, while protection companies are confident of exceeding their sales booking guidance
and annuity are likely to sustain the momentum. for FY24 driven by a strong launch pipeline in 2HFY24. Other segments
3. Operational performance of our industrial coverage universe was like office leasing, retail, and hospitality continue to remain strong.
in-line with our expectations helped by pick-up in execution (15% YoY 7. A majority of the IT services companies reported weaker than
revenue growth) and stable margins (11.7%). Although the domestic expected revenue growth in 2QFY24, impacted by reduced
business outlook remains robust, business momentum from the transformation and discretionary spend as well as continued delays in
international markets has witnessed moderation. Companies are decision-making. EBIT margin improved due to productivity and
optimistic about the near to medium-term business outlook with strong utilization benefits as well as cost optimization measures. Deal wins
enquiry levels across industries. Order inflow for the quarter was remain skewed towards cost take-out deals, but TCV of IT companies
strong and was up 59% YoY supported by strong ordering in BEL, L&T, were extremely strong in 2QFY24 and should augur well for a recovery
BHEL, Engineers India & GE T&D. Order backlog for the coverage in revenue growth for FY25.

17 November 2023
Strong
Xxxxx quarter, but on expected lines! Research Team, equityresearch@antiquelimited.com
8. Our pharma coverage companies reported 3% sequential revenue 13. The consumer electrical sector reported a mixed performance,
growth with EBITDA/ PAT growing at 16%/ 22% respectively. We with demand in the UCP segment witnessing a revival, while the ECD
assume the core US business (ex-gRevlimid) would have grown segment witnessed subdued demand. The industry is witnessing green
marginally led by new launches including gSpiriva by LPC. The domestic shoots in terms of demand recovery during the current festive season.
business growth came in at 4% QoQ due to a delay in the flu season, Revenue grew by 11% YoY (helped by RAC due to weak monsoon),
with healthier growth expected in 3QFY24. EBITDA margin improved while operating profit growth was weak at a meager 4.3% YoY (20%
by ~250 bps to ~24.2% on a sequential basis backed by softening of below our estimate) due to high competitive intensity.
RM costs, cost optimization, and favorable operating leverage. 14. 2QFY24 EBITDA for steel companies under our coverage indicates
9. Our FMCG universe's 2QFY24 revenue performance was the weakest to sequentially weaker steel prices, partially offset by steady domestic
over the past few quarters due to sustained stress in the rural markets volumes (lower exports amidst weaker global macros) and easing cost
on account of food inflation and erratic monsoon. However, profitability pressures (lower coking coal prices coming in) supporting margins.
across companies was healthy due to receding commodity price The profitability of steel companies is expected to improve from 2HFY24
inflation. onwards with sequentially higher realizations, revival of volumes post
10. The performance of paint companies was soft due to a shift in the monsoon, offsetting higher coking coal prices. Non-ferrous prices are
festive season to 3Q and the erratic monsoon. Profitability improved largely range-bound and would be supported by restricted supply and
materially due to a drop in commodity prices. In the alcobev sector, steady demand.
RDCK witnessed strong growth in P&A while UNSP registered muted 15. Despite poor marketing margins, oil marketing companies (OMC)
performance. QSR performance remained soft due to consumption profitability was extremely strong (although on expected lines) due to
slowdown, a longer Shravan month, and heightened competitive strong refining margins (~USD 13-18/bbl) supported by inventory
intensity impacting SSSG. gains.
11. Auto OEMs reported ~17% higher net profit than what we expected 16. Within agro-chemicals, export companies are witnessing immense
due to higher than expected margin expansion and higher other pressure (due to global channel inventory de-stocking and dumping by
incomes. China). Domestic companies reported decent numbers (helped by
12. Continued outperformance was visible by retail sector heavy weight steady volume off-take in the Kharif season).
like a) Trent (driven by the rapid scale-up of Zudio and healthy 10% LTL 17. Stable margins and positive demand expectations in 2HFY24 were
growth in fashion formats); b) D-Mart (driven by staples/ FMCG business the commentary across building material companies in 2QFY24.
and store expansion) and Titan (driven by jewelry and watches division).

17 November 2023
Top pick Research Team, equityresearch@antiquelimited.com
Company M Cap CMP TP Return EPS (INR) PE (x) P/B (x) ROE (%)
(USDbn) (INR) (INR) (%) FY24 FY25 FY24 FY25 FY24 FY24
Large Cap (>US$5 bn)
ICICI Bank 78.8 936 1,225 31 56 57 16.8 16.6 2.5 18.3
Larsen & Toubro 51.5 3,051 3,398 11 98 129 31.0 23.6 4.4 14.9
HCL Technologies 42.7 1,311 1,475 13 59 66 22.2 19.8 5.3 24.2
Ultratech Cement 30.4 8,775 10,500 20 286 371 30.7 23.7 4.2 14.3
Coal India 25.6 346 377 9 41 35 8.4 9.9 3.1 40.6
DLF 18.7 630 687 9 17 22 36.8 29.0 3.7 10.7
Tata Steel 18.3 125 137 10 8 11 15.9 11.8 1.5 9.5
Hindustan Aeronautics 17.0 2,114 2,589 22 75 84 28.1 25.3 5.3 20.0
HDFC Life Insurance 16.4 635 780 23 8 9 22.1 17.0 2.8 18.3
Siemens 15.1 3,525 4,909 39 64 76 54.9 46.7 8.9 17.2
IndusInd Bank 14.0 1,499 1,725 15 116 134 12.9 11.2 1.9 15.6
United Spirits 9.1 1,041 1,234 19 15 19 69.4 55.8 11.2 17.2
Ashok Leyland 6.1 174 222 27 8 9 22.1 18.5 5.2 25.3
Bharat Heavy Electricals 5.8 139 158 14 2 5 77.6 25.2 1.7 2.3
Mid/Small Cap (<US$5 bn)
Max Financial Services 3.8 927 1,140 23 4 5 14.1 10.4 2.4 20.6
Bharat Dynamics 2.4 1,107 1,420 28 35 45 32.0 24.6 5.6 18.6
Sumitomo Chemicals 2.3 392 440 12 7 10 54.3 39.1 7.3 14.2
Century Textiles & Inds 1.7 1,235 1,319 7 45 50 27.3 24.8 3.2 12.3
Concord Biotech 1.6 1,306 1,641 26 36 44 36.5 29.6 8.8 26.4
Karur Vyasa Bank 1.5 158 175 11 17 18 9.1 8.9 1.3 15.1
Titagarh Rail Systems 1.3 838 1,013 21 21 36 40.4 23.6 7.1 21.4
NCC 1.2 164 207 27 11 16 15.0 10.2 1.5 10.3
Kirloskar Oil Engines 0.9 541 699 29 23 29 23.0 19.0 3.2 14.4
Prince Pipes & Fittings 0.9 689 940 36 22 27 31.5 25.7 4.8 16.4
Kewal Kiran Clothing 0.6 785 963 23 25 30 31.9 26.5 7.2 22.7
Teamlease Services 0.5 2,483 4,000 61 77 110 32.3 22.5 4.4 14.8
Source: Antique; Price as on 16th November 2023

17 November 2023
Nifty 50 reported strong earnings growth

Nifty 50 (ex-Insurance) Revenue/ EBITDA grew by 5%/ 21%, which were below our expectation by 2%/ 1% respectively while PAT grew by 26% which
was ahead of our expectation by 2%. Nifty excluding financials and a few volatile sectors like telecom, commodity, and Tata Motors, revenue/ EBITDA/
PAT grew 9%/ 15%/ 21%, which are -1%/ 0%/ 1% ahead of expectation.
Core operating earnings grew by ~15% YoY

Sales EBITDA Adj PAT
YoY % % YoY % % YoY % %
Nifty-50 (INR mn) Sep-23 growth variance Sep-23 growth variance Sep-23 growth variance
Auto ex TTMT 848,472 13.6 (1.4) 122,768 23.9 4.1 109,968 51.9 18.9
Cement 157,350 15.7 0.3 25,509 36.8 (5.2) 12,815 68.7 (10.9)
Consumption 650,784 7.8 1.9 154,632 11.4 (1.0) 114,898 15.0 0.5
Corporate Bank 701,225 16.2 1.4 422,778 4.3 (9.1) 304,546 16.3 0.7
Energy 3,731,047 (3.3) (5.0) 722,362 40.3 1.2 361,120 37.9 3.6
Health Care 323,174 11.3 0.5 80,453 8.9 0.2 53,319 12.5 (1.8)
Materials 1,537,183 2.6 (1.8) 220,518 33.4 2.8 105,012 57.0 10.5
NBFC 158,828 28.7 (0.9) 100,461 25.5 (10.3) 54,798 26.3 0.2
Retail Bank 387,585 27.4 (1.1) 311,849 27.4 0.9 213,486 42.6 8.8
Utilities 579,411 1.9 (8.3) 236,252 10.6 (0.9) 94,201 8.8 (2.6)
Total ex Insurance 13,038,983 5.3 (2.2) 3,194,306 20.5 (1.1) 1,802,481 26.4 1.7
Total ex fin 11,791,345 3.9 (2.5) 2,359,218 22.8 0.6 1,229,652 26.6 0.9
Total ex fin, telco & commodity 6,152,677 9.0 (1.1) 1,221,201 14.7 0.3 750,113 20.8 1.0
Source: Bloomberg, Antique; Note: Above Sales, EBITDA, & PAT numbers are without free float adjustment

17 November 2023
Antique coverage surprised positively
Sales EBITDA PAT

YoY % % YoY % % YoY % %
Sectors (INR mn) Sep-23 growth variance Sep-23 growth variance Sep-23 growth variance
AgroChem 275,094 (14.1) (8.6) 42,429 (19.6) (12.9) 17,450 (29.1) (18.6)
Automobile 1,139,817 11.1 (2.1) 164,918 29.4 5.4 131,272 54.8 16.8
Cement ex Grasim 444,503 14.8 2.2 71,973 75.1 (3.7) 34,161 NA (3.5)
FMCG 572,394 2.3 (0.1) 141,479 10.7 (1.2) 106,632 13.6 (0.2)
Consumer Discretionary 179,890 3.1 (2.8) 32,938 22.9 (4.1) 19,098 29.8 (1.8)
Retail 343,933 22.1 5.9 37,706 7.3 9.9 19,332 (7.8) 6.6
Industrials 877,605 15.2 1.2 102,655 16.1 3.1 68,918 29.4 16.6
Consumer Durable 109,694 11.2 (2.3) 7,990 4.3 (20.2) 4,942 (5.1) (23.8)
IT 1,845,827 6.0 (0.5) 406,475 5.1 0.9 273,441 3.2 (0.9)
Metals 2,225,701 2.2 2.8 369,353 43.8 12.5 136,170 NA 21.5
Oil_Gas ex OMC 3,292,617 (3.3) 1.8 681,560 20.9 2.2 340,957 8.4 6.4
OMC 3,784,266 (12.1) (22.3) 423,425 NA (2.2) 265,882 NA (2.5)
Pharma 375,778 10.7 (0.8) 90,347 25.7 (2.5) 56,843 38.2 (3.4)
Real estate 118,089 30.7 1.4 33,677 42.8 (6.8) 26,611 86.9 17.4
Textile 59,391 7.9 3.1 8,680 34.0 (0.7) 4,767 59.5 1.4
Infrastructure 214,696 16.3 7.4 24,066 5.8 (0.2) 13,651 11.3 13.8
Building Material 83,049 8.2 (1.0) 11,935 NA 1.8 7,486 NA 5.3
Utilities 1,228,693 4.6 (4.7) 373,881 14.1 3.9 195,698 11.9 11.0
Midcap 135,397 13.6 4.9 25,403 23.2 5.6 16,924 22.9 16.6
PSU Bank 782,827 12.9 2.1 484,891 5.0 (1.5) 274,565 28.5 5.2
Private Bank 757,864 24.0 0.2 578,796 22.2 0.4 400,136 34.0 7.4
Insurance 250,940 1.3 (2.0) - - - 52,821 (0.2) (5.1)
Total 19,162,484 1.4 (5.1) 4,120,513 30.5 1.4 2,475,706 40.2 5.2
Total ex financial 17,370,853 0.1 (5.6) 3,056,826 37.6 2.0 1,748,183 45.6 5.1
Total ex financial & commodity 8,068,270 8.2 (0.8) 1,582,488 14.6 1.0 1,005,175 19.0 4.9
Source: Bloomberg, Antique

17 November 2023
Management commentary suggest moderation in global growth...
Company Management commentary

TCS  By geographic market, we see maximum caution in North America and Continental Europe.
 Given client caution over the macro overhang, we continue to see reprioritization of spending from discretionary
areas to cost optimization.
Infosys  With a clear focus on client relevance, as the economic environment changed, we rapidly pivoted from delivering
transformation projects to also delivering productivity benefits and cost savings at scale.
 We continue to see the overall environment where digital transformation programs and discretionary spends are
low and decision-making is slow.
 Outlook continues to remain uncertain in financial services, sector with slowdown in areas like mortgages, asset
management, investment banking, cards and payment.
L&T  Global economic growth is losing momentum and is slowing under the impact of tight financial conditions,
protracted and enhanced geopolitical tensions and increasing geo-economic fragmentation.
Tata Steel  The steel prices across regions moderated on slowdown in economic activity, and in the U.S. and EU, elevated
interest rates to manage inflation has adversely affected the demand, while in China, the persistent weakness in the
property market continued to have an overhang on the prices.
 In Europe, steel deliveries were around 1.8 million tons in the second quarter on subdued demand
Source: Company, Antique

17 November 2023
... Buoyant investment activity...

Ultratech  UltraTech has grown 15% this quarter with a 75% capacity utilization on 132 million tons. Practically all markets
are doing well.
 The company plans to reach 200 mn ton of capacity from current 132 mn ton in coming 4-5 years.
Larsen & toubro  In contrast to global trends, the Indian economy in Q2 FY '24 has continued to demonstrate resilience on the back
of strong domestic demand. Investment activity has been buoyant, supported by continuing public CapEx.
 Our group has reported the highest ever order inflow with order book at INR 4.5 trillion as on September '23,
which is up 22% vis-à-vis September '22 last year.
Tata Steel  In India, the steel prices were impacted by the global sentiment, but given the resilient demand, it witnessed a
lower drop in prices 3% quarter-on-quarter than the rest of the key markets.
 In India, net realizations are expected to improve by about INR2,200 per ton quarter-on-quarter, aided by domestic
demand.
 We've seen 10% growth in consumption year-on-year, because all engines are firing, automotive is strong,
construction is good, rural markets are picking up. The only kind of gap is a little bit more on what's happening in
the international markets and international prices but, domestic is quite strong.
Lodha  In Q2, which is otherwise seasonally, the weakest quarter of the year, we had our best-ever pre-sales.
 The demand conditions on the ground remain very robust and the early read through of the festive season is quite
encouraging.

17 November 2023
... Early signs of rural recovery...

Ultratech  The rural market is still robust. FMCG companies are probably having the problem, however we have not seen any
such issue. By and large, it is still robust because in rural also, there is a lot of infrastructure and the local body
work etc.
 Rural sales were at 63% of trade, grew 15% for the quarter.
Tata Steel  We've seen 10% growth in consumption year-on-year, because all engines are firing, automotive is strong,
construction is good, rural markets are picking up. The only kind of gap is a little bit more on what's happening in
the international markets and international prices but, domestic is quite strong.
Dabur  While the macroeconomic indicators were showing an improving trend during the quarter, uneven distribution of
rainfall and a deficient monsoon impacted rural consumption in Quarter 2.
 However, rural will continue to gain traction, albeit it's happening slowly, but it will happen surely with MSP
increases, good crop sowing, infrastruc ture spending by government and direct benefit transfers in place. And
with the election season coming up, some SOPs will happen.
Maruti  Rural was slightly higher than urban and so far, it continues healthy
Hero Moto Corp  Festive season has started off well with pick up in rural demand
HUL  Rural demand remains subdued with volumes continue to decline marginally on a two-year basis. However, the
company is cautiously optimistic, and expect demand to continue to recover gradually given moderation in inflation,
rise in real wages and increased government spending in rural.

17 November 2023
... With good start to festive demand

Maruti  Festive demand so far has been ~18-20% growth
 Rural was slightly higher than urban and so far, it continues healthy
Hero Motocorp  The festive season has started off very well (Double digit growth)
 We are also seeing that the rural demand has picked up quite well.
 Overall growth is across the regions - a) Rajasthan is leading the growth; b) central zone is doing really well; c)
North kicking in very well; d) South is doing extremely well; and e) East back on the growth path.
Voltas  Strong growth in the appliances business on Onam festival in Kerala has witnessed a after almost three years of
muted sales.
 Early indicators of tertiary sales indicate a strong demand during the upcoming festival months.
 The downtrend of inflation, stagnant interest rates and a fulfilling monsoon season may help in reviving rural
demand during this auspicious period.
Blue star  The festival season has started off well. Company had impressive sales during Onam and subsequently during the
Puja as well.
 The demand from the market seemed to be significantly higher than what it was last year.
Shoppers Stop  Customer sentiments are looking healthy. Our Pujo performance has been very, very good.
 Our like-to-like store growth is in high single digits with strong growth across all categories.

17 November 2023
Nifty earnings to grow at ~16.1% CAGR over FY23-FY25

Nifty earning likely to grow at 16.1% CAGR Nifty 50 sectorwise growth (%)
1,200 50 Sectors FY23A FY24E FY25E
1,089
966
(INR)
Auto ex TTMT 51.5 27.8 12.3
40
808
1,000 Cement (22.9) 34.9 27.7
730
30 Consumption 24.1 13.1 14.9
800 Corporate Bank 27.6 37.9 7.1
528
20
462
462
Energy 3.5 21.5 2.4
443
428
402
389
600
383
366
335
307 10 Health Care 12.1 (9.2) 22.7
273
260
226
221
400 Industrials 20.6 33.4 31.4

167
153
0
119
IT Services 6.7 3.5 14.1

86
73
200 -10 Materials (52.0) 15.5 7.6

NBFC 56.4 24.4 27.6
0 -20 Retail Bank 22.7 9.1 15.2
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24e
FY25e
Utilities 14.6 7.5 10.8
Insurance 37.2 8.9 16.3
Total 10.1 19.8 12.6
Nifty EPS Nifty EPS YoY % Total (Ex financial) 1.1 17.9 13.2
Source: Bloomberg, Antique Total (ex financial & commodity) 25.2 17.1 18.3
EPS contribution by sectors (FY23-24) EPS contribution by sectors (FY23-25)

1,000 966 (INR) 1,089
(INR) 1,100 3
4 4 3 3 3 13 10 8 5
9 7 7 14 13
15 9 1,000 16 15
900 18 19
23 27 23
808 54 900 44
800 808 68
800
700 700
600 600
Utilities
Corporate Bank
Energy
TTMT
FY23
IT Services
Industrials
Auto ex TTMT
Materials
NBFC
FY25
Cement
Health Care
Retail Bank
Telco
Consumption
Corporate Bank
Energy
TTMT
Materials
FY23
Industrials
NBFC
IT Services
FY24
Cement
Retail Bank
Health Care
Auto ex TTMT
Utilities
Consumption
Telco
Source: Bloomberg, Antique Source: Bloomberg, Antique

17 November 2023
Indian equities trading at mean level...

Nifty P/E… …Nifty P/B…
30.0 3.5
25.0 3.0
20.0 2.5
15.0 2.0
1.5
10.0
Nov-08
Nov-09
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
1.0
Nov-07
Jul-08
Dec-09
Aug-10
Jan-12
Jun-13
Nov-15
Nov-16
Jul-17
Dec-18
Aug-19
Jan-21
Jun-22
Sep-21
Nov-23
May-11
Oct-12
Apr-09
May-20
Apr-18
Feb-23
1 yr fwd PE Avg
Avg + 1 Stdev Avg - 1 Stdev Nifty P/B Avg Avg + 1 SD Avg - 1 SD
…and bond equity earnings yield are trading at mean levels… …while, market to GDP still remains elevated
2.0 120.0
100.0
1.5
80.0
1.0
60.0
0.5
40.0
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
Bond Equity Earnings Yield ratio Average
Avg +1 Stdev Avg -1 Stdev Trailing Market cap as a % of GDP -SD +SD Avg

17 November 2023
...Along with improving macros, given easing crude oil prices...

Crude oil prices recede as geo-political tensions recede... ...along with stronger supplies from Non-OPEC non Russia...
125.0 Incremental non-OPEC non-Russia Crude Supply
(mnbpd)
100.0 2.5
USD/barrel
75.0 2.0
1.5
50.0
1.0
25.0
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
May-19
May-20
May-21
May-22
May-23
0.5
0.0
Price of Brent crude oil 2022 2023 2024
…and expected moderation in global oil demand

(mnbpd) Incremental global crude demand
2.5
2.0
1.5
1.0
0.5
0.0
2022 2023 2024

17 November 2023
...with falling bond yields and dollar index

Given moderating inflationary pressures... …interest rate cut cycle is expected to resume from 1QFY25…
10.0 US - Interest rate probability (%)
7.5 5.6 5.33 5.33 5.32 5.25
5.4
(%)
5.0
5.2 4.96
2.5 5.0
4.8 4.64
-
4.6 4.35
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
Feb-19
Feb-20
Feb-21
Feb-22
Feb-23
4.4 4.21
4.2
4.0
US CPI Urban Consumers YoY NSA 3.8
31/Jan/24
12/Jun/24
29/Jan/25
18/Sep/24
15/Nov/23
13/Dec/23
20/Mar/24
18/Dec/24
Core Services ex Housing YoY
Urban Consumers ex Food & Energy YoY NSA
Urban Consumers Owners Equivalent Rent_Residence YoY NSA
Current Fed Meeting Dates
...leading to lower bond yields... ...and dollar index (+ve for EMs)
5.0 1,600.0 120.0
4.5
1,200.0
(%)
4.0 100.0
800.0
3.5
400.0 80.0
3.0
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
May-18
May-19
May-20
May-21
May-22
May-23
Jul-23
Jul-23
Nov-22
Dec-22
Dec-22
Jan-23
Jun-23
Aug-23
Sep-23
Sep-23
Nov-23
Feb-23
Feb-23
Mar-23
Apr-23
May-23
May-23
Oct-23
US 10 year yield MSCI EM Index Dollar index


17 November 2023
...strong domestic SIP flows and receding FPI selling pressure...

Mutual fund flows… …and SIP flows remain strong…
400 175
300 155
200 135
100 115
0 95
-100 75
Jun-22
Jun-23
Dec-21
Feb-22
Aug-22
Dec-22
Feb-23
Aug-23
Oct-21
Apr-22
Oct-22
Apr-23
Oct-23
Jan-22
Jan-23
Jul-21
Jul-22
Jul-23
Apr-21
Oct-21
Apr-22
Oct-22
Apr-23
Oct-23
MF Equity Flow (INR bn) SIP Equity flow (INR bn)
...Along with FPI selling intensity... ...receding

FPI equity flow (US $mn) 800.0
7,000 600.0
400.0
2,000 200.0
-
-3,000 -200.0
-400.0
Aug/23
Sep/23
Oct/23
Nov/23
Jun/23
Jul/23
-8,000
Nov-20
Feb-21
Aug-21
Nov-21
Feb-22
Aug-22
Nov-22
Feb-23
Nov-23
Aug-23
May-21
May-22
May-23
FPI flows in India ($ mn) - 7 Days SMA


17 November 2023
...along with low political risk as BJP likely loss in state elections...
Except in Rajasthan… …INC seems to have an edge in MP…
Rajasthan Seats Madhya Pradesh Seats
0-5
59-69
INC
BJP
104-116 113-125 BJP
127-137 INC
Others
Source: ECI, ABP News-Cvote, Antique Source: ECI, ABP News-Cvote, Antique
...Chhattisgarh... ...and Telangana as per opinion polls

Chhattisgarh Seats
Telangana Seats
0-2
5-11
INC BRS
39-45 43-55
BJP INC
45-51
Others BJP
48-60
Source: ECI, ABP News-Cvote, Antique Source: ECI, ABP News-Cvote, Antique

17 November 2023
...may not be a good barometer of the outcome in Union election...

Our empirical analysis suggests that the state election verdict is not a good barometer of the national elections as seen in 1999 and 2019, likely due to
a) differing voter preferences and leadership popularity at the state and national level; and b) 6 month is a sufficient time to sway political preferences
(as seen during 2018/19 election when BJP loss in states was reversed in Lok Sabha by announcing PM Kisan Samman Nidhi yojna in 2019 Budget
promising farmers INR 6,000p.a as minimum income support).
1998 & 2018 elections paint a differing picture in Rajasthan…
Rajasthan Assembly Lok Sabha
No. of seats BJP INC BJP INC
Nov/Dec 2018 73 100 May 2019 24 0
Nov/Dec 2013 163 21 May 2014 25 0
Nov/Dec 2008 78 96 May 2009 4 20
Nov/Dec 2003 120 56 May 2004 21 4
Nov/Dec 1998 33 153 May 1999 16 9
…Madhya Pradesh
Assembly Lok Sabha
Nov/Dec 2018 109 114 May 2019 28 1
Nov/Dec 2013 165 58 May 2014 27 2
Nov/Dec 2008 143 71 May 2009 16 12
Nov/Dec 2003 173 38 May 2004 25 4
Nov/Dec 1998 119 172 May 1999 27 8
…and Chhattisgarh
Chhattisgarh Assembly Lok Sabha
Nov/Dec 2018 15 68 May 2019 9 2
Nov/Dec 2013 49 39 May 2014 10 1
Nov/Dec 2008 50 38 May 2009 10 1
Nov/Dec 2003 50 37 May 2004 10 1
Source: Election Commission of India, Antique

17 November 2023
...and BJP's prospect in 2024 LS election remain intact given PM's popularity
BJP leads at national level... …given the PM's strong popularity
India’s Most Popular Leader (as on Sept) India’s Most Popular Leader (as on Sept)
3% 3%
8% 3% 8%
3% Narendra Modi Narendra Modi
5% Rahul Gandhi 5% Rahul Gandhi
Arvind Kejriwal Arvind Kejriwal
Yogi Adityanath 19% Yogi Adityanath

19%
62% Mamata Banerjee 62% Mamata Banerjee
Others Others
Source: CVoter Survey Source: CVoter Survey

17 November 2023
Sectoral Discussion

17 November 2023
Varun Baxi, +91 72890 58502, varun.baxi@antiquelimited.com

Automobiles - Positive Mihir Vora, +91 22 6911 3448, mihir.vora@antiquelimited.com
Margin improvement drives earnings Quarterly financials and variance

Our auto OEM universe’s top-line in 2QFY24 grew 13%/ 7% YoY/ QoQ, Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
mainly driven by realization growth of 7% YoY while overall volume grew Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
by 6% YoY. Overall EBITDA margin was ahead of our estimates mainly due Bajaj Auto 107,773 5.6 (0.1) 21,329 21.3 4.1 18,361 20.0 5.6
to better operational performance owing to commodity cost softening, rising Eicher Motors 39,307 15.7 (0.9) 10,974 36.6 7.6 9,385 52.6 3.3
ASPs, and operating leverage benefits. The companies indicated RM costs
Hero MotoCorp 87,672 (3.4) (5.5) 13,283 27.9 6.3 10,538 47.2 13.7
to be range-bound at current levels and expect margins to be robust going
TVS Motors 72,179 (0.0) (13.0) 8,998 22.2 (0.5) 5,366 31.7 (3.6)
ahead as well. OEM net profit came in higher by ~17% as compared to our
Maruti Suzuki India 370,621 23.8 0.9 47,842 72.8 29.0 37,165 80.3 33.7
expectation due to better operational performance and higher other
incomes. Ashok Leyland 96,380 16.6 (1.9) 10,798 101.0 16.7 5,839 205.6 11.8
Mahindra & Mah. 243,099 10.0 (4.0) 29,341 (17.1) (22.0) 34,519 49.1 19.4
Ancillary universe reported flattish revenue performance on a YoY basis,
Total 1,017,031 12.8 (2.4) 142,564 27.5 4.7 121,173 54.6 17.4
mainly due to weakness in the international market offset by robust domestic
Ancillary's
demand. EBITDA margin saw a very sharp improvement of ~550 bps on a
Apollo Tyres 62,796 5.4 (1.4) 11,598 62.9 11.7 4,657 139.6 14.7
YoY basis due to RM cost softening and better realizations. The companies
have indicated that RM costs will be range-bound going ahead as well, Ceat Tyres 30,432 5.4 1.6 4,574 122.2 17.5 1,991 321.9 17.6
which will bode well for profitability. Suprajit Engineering 7,089 (1.0) 2.4 698 (11.3) (11.9) 348 (24.0) (16.3)
Balkrishna Industries 22,468 (19.9) 2.1 5,484 (2.9) 6.1 3,104 (12.5) 3.3
Top Picks: Ashok Leyland, Eicher Motors and Maruti Suzuki
Total 122,785 (0.7) 0.2 22,354 43.2 10.5 10,100 57.3 10.1
Revenue growth in 2QFY24 (% YoY) EBITDA margin trend (%) PAT margin trend (%)
30 30 30
20 25
10 20 20
- 15
10 10
(10) 5
(20) - -
(30)
M&M
Ceat
Bajaj Auto
Supraji Engg.
Balkrishna I.
Eicher M.
Hero MotoC.
TVS Motors
Maruti S. I.
Ashok Ley.
Apollo Tyres
Bajaj Auto
Hero MotoC.
TVS Motors
M&M
Eicher M.
Ceat
Balkrishna I.
Maruti S. I.
Apollo Tyres
Supraji Engg.
Ashok Ley.
M&M
Bajaj Auto
Balkrishna Ind.
Maruti Suzuki I.
Eicher Motors
TVS Motors
Suprajit Engg.
Ceat Tyres
Apollo Tyres
Ashok Leyland
Hero MotoCorp
Sep-22 Jun-23 Sep-23 Sep-22 Jun-23 Sep-23

Source: Company,Antique Source: Company, Antique Source: Company, Antique

17 November 2023
Varun Baxi, +91 72890 58502, varun.baxi@antiquelimited.com

Automobiles Mihir Vora, +91 22 6911 3448, mihir.vora@antiquelimited.com
 Good Ashok Leyland

Decent margins aided by pricing discipline
 AL reported revenue of ~INR 96 bn, slightly

execution
Good Eicher Motors
Strong margin performance backed by superior  Good Maruti Suzuki
Strong beat in 2Q; robust performance to continue
 MSIL reported 2QFY24 revenue of INR 371
below our estimate due to lower than expected
realization (6% YoY but down 2% QoQ) and  EIM’s 2QFY24 standalone revenue at INR 39 bn which was in line with our expectation;
volume growing by 10%/ 21% YoY/ QoQ. bn was up ~16% YoY led by ~10% YoY volume realization stood at INR 671k, up 16% YoY.
EBITDA margin at ~11.2% was up 120 bps growth and 5% realization growth while they Volume grew by ~7%/ 10% YoY/ QoQ.
QoQ beating our estimate of 9.4% led by were flattish on a sequential basis. EBITDAM EBITDAM for the quarter came in strong at
operating leverage benefits. Earnings stood came in at ~28% and was up by 196 bps QoQ 12.9%, 360 bps higher on YoY and QoQ basis
at ~INR 5.8 bn.
beating our estimate of 26%, mainly due to driven by RM cost softening and operational
Our take lower than expected other expenses and better efficiencies.
 We believe the CV upcycle should benefit AL RM cost management. Earnings stood at INR
volumes as (1) It has a higher share in the Our take
9.4 bn up 52% YoY.
>16-ton segment & the mix is shifting towards  We remain confident about MSIL continued
higher tonnage vehicles. (2) Buoyant demand Our take
in the bus market. We expect the industry market share gains driven by new model
upcycle to continue for a few more quarters  We reiterate our positive stance on Eicher launches in the SUV segment. We believe
led by (a) Higher fleet utilization, (b) despite the increasing competitive intensity. We MSIL’s UV share will grow to ~30% in FY26
Construction and infra spending to keep freight believe the mid-weight category motorcycles from around 19% in FY23. Furthermore, its
demand at elevated levels, (c) Replacement will grow at ~14% CAGR and double over five increasing share of SUVs will boost net
demand fuelled by regulatory requirements like
the scrappage policy, (d) Higher profitability years in India. In the domestic market, EIM is realization as has been observed in 2QFY24,
of fleet operators. expected to benefit from a strong new model wherein ASPs went up by 3% and EBITDA/
We believe gaining ground in north, east and pipeline & increasing addressable market by vehicle went up by ~45% as the share of SUVs
west markets will also provide AL the opportunity network expansion and product actions. On increased from 30.5% to 39.2% QoQ. Going
to expand its presence in LCVs. In terms of exports, the company indicated that due to ahead, we believe MSIL will outpace industry
demand, we believe the momentum will challenging macros it is cautious of building growth with the ramp-up of new models
continue owing to higher freight availability, inventories, though retail continues to remain including Fronx, Jimny, and Invicto which have
shortening replacement cycles, and easy
financing. Furthermore, softening RM costs & strong. Also with ramping of the new Himalayan been received well in the market. We are
operating leverage benefits will drive margins. 450 and Meteor 650 going ahead, we remain factoring in volume CAGR of 8% over FY23–
Recommendation - BUY positive on exports picking up. 26E, along with a notable increase in ASP, led
Recommendation - BUY by product mix improvement.
 We value AL’s auto business at 13x 1HFY26E
EV/EBITDA to factor in the improvement in Recommendation - BUY
the balance sheet, strong margin outlook, and  We value RE (standalone) at 24x 1HFY26 EPS
volume growth, and value HLFL at INR 10/ and VECV at 11x EV/EBITDA on 1HFY26 to  We maintain BUY on MSIL at a TP of INR
share to arrive at a TP of INR 222. arrive at a TP of INR 4,186. 12,424 at 26x 1HFY26E EPS.
17 November 2023
Manish Mahawar, +91 22 6911 3427, manish.mahawar@antiquelimited.com
Agrochemicals - Neutral Darshita Shah, +91 22 6911 3431, darshita.shah@antiquelimited.com
Jenish Karia, +91 22 6911 3406, Jenish Karia@antiquelimited.com
Domestic revives; gradual recovery expected in exports Quarterly financials and variance
Companies under our coverage universe reported a mixed set of numbers
during 2QFY24, with export companies witnessing immense pressure, while Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
the domestic ones reported decent numbers. Revenue/ EBITDA/ PAT growth Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
of the agrochemical companies were -12%/ -28%/ -47% YoY vs. expectation UPL 101,700 (18.7) (3.2) 15,750 (43.1) (22.0) (1,020) (112.0) (144.4)
of -9%/ -17%/ -32%, respectively. The underperformance, led by export
players, was due to a) Global channel inventory destocking as the supply Bayer Cropscience 16,172 11.4 6.1 3,049 28.2 18.0 2,229 37.1 20.1
chain improved and b) Low-priced dumping from China impacting PI Industries 21,169 19.6 (1.6) 5,514 27.7 3.2 4,805 43.5 16.4
realizations. Export companies EBITDA margins remained under pressure
as well due to the impact of a) High-cost inventory and b) Lower fixed cost Rallis India 8,320 (12.5) (4.0) 1,330 13.1 22.1 820 15.4 32.0
absorption. However, the demand situation in specialty molecules was steady, Dhanuka Agri 6,179 13.8 5.4 1,416 45.2 26.3 1,018 39.4 25.1
resulting in better performance of PI. Barring Sumitomo, due to the impact
of a fall in glyphosate prices, domestic companies posted strong performance Sharda Cropchem 5,808 (19.5) (17.7) 344 NA NA (276) NA NA
led by decent volume offtake in the Kharif season. EBITDA margins expanded Sumitomo Chemical 9,035 (19.5) (16.5) 1,879 (32.4) (21.6) 1,434 (28.8) (19.0)
benefitted by a) Lower RM prices and b) Phasing out the impact of high-cost
inventory. Coromandel Int'l 69,881 (30.9) (24.2) 10,587 0.2 (11.6) 7,546 1.9 (11.1)
For export players, EBITDA decline YoY was sharper than the domestic one Paradeep Phos. 36,830 28.6 6.8 2,560 NA NA 894 NA NA
due to a) A lag in price erosion in the export market vs. the domestic Total Agrochemical 168,383 (11.7) (3.4) 29,282 (27.5) (13.0) 9,010 (47.1) (22.8)
market, resulting in a lingering impact of high-cost inventory and b) Poor
volume offtake. Total Agri Input 275,094 (14.1) (8.6) 42,429 (19.6) (12.9) 17,451 (30.1) (18.6)
For fertilizer companies under our coverage, revenue was down 18% vs. Source: Company, Antique
the expectation of -2% led by a reduction in subsidy rates. EBITDA/ PAT was
up 6%/ 7% benefited by stable subsidy rates and MRP, despite a decline in FY24 is expected to be flattish to negative due to price decline and high
RM prices. This was despite the companies providing for a sizeable subsidy- channel inventory, with performance revival expected from 4QFY24
cut related provision. onwards for export companies.
For agrochemical companies, we believe the top-line growth momentum in Top Picks: Sumitomo Chemical, UPL, Paradeep Phosphates
Revenue growth in 2QFY24 (% YoY) EBITDA margin trend (bps)
40 600.0
400.0
30 200.0
-
20 (200.0)
(400.0)
10 (600.0)
(800.0)
- (1,000.0)
Sumitomo Chem
PI
Coromandel Int'l
UPL
Bayer
Paradeep Phos
Dhanuka
Rallis
PI
Bayer
Sumitomo Chem
Coromandel Int'l
Paradeep Phos
UPL
Rallis
Dhanuka
Sharda
Sharda
(10)
(20)
(30)
(40)
Source: Company, Antique Source: Company, Antique

17 November 2023
Agrochemicals Darshita Shah, +91 22 6911 3431, darshita.shah@antiquelimited.com
Jenish Karia, +91 22 6911 3406, Jenish Karia@antiquelimited.com
 Good PI Industries
Strong performance amidst challenging times
 Good Dhanuka Agritech
Sailing strong through the headwinds
 Bad UPL
Subdued quarter; volume growth to lead to decent
 Revenue surged 20% YoY in 2QFY24 to INR  Revenue was up 14% YoY to INR 6.2 bn led
2HFY24
21.2 bn on the back of 22% YoY growth in by volume/ realization growth of 20%/ -6%  Consolidated revenue stood at INR 102 bn,
CSM. CSM business growth was led by 21%/
6% YoY growth in volume/ product mix, price, YoY. The strong volume growth despite the down 19% YoY led by -7%/ -15%/ +2%
and favorable currency movement. Domestic erratic monsoon was led by strong demand for volume/ price realization/ FX growth. Gross
business declined 2% YoY due to a decline in new product launches, including Decide. Gross margin contracted ~520 bps YoY to 48.5%
volumes, impacted by erratic monsoon. Pharma margin expanded by ~625 bps YoY to 40% due to the impact of a) High-cost inventory, b)
business contribution was INR 719 mn (INR 1 led by a) Better product mix contributing 2/3 Higher sales return, especially in NAFTA and
bn, ex-Ind AS adjustment). Gross margin
expanded ~135 bps YoY to 46.5%, led by a) of the gross margin and b) Phasing out the LATAM, and c) Higher rebate to support
Higher contribution of CSM business and b) impact of high-cost inventory. EBITDA was up channel partners. EBITDA was at INR 15.8
Contribution from the pharma business with a 45% to INR 1.4 bn YoY, with margin expanding bn, down 43% YoY. EBITDA margin declined
gross margin of 60%. EBITDA was INR 5.5 bn, by ~490 bps YoY to 23%. PAT was up 39% ~665 bps YoY to 15.5% on account of a) Lower
up 28% YoY. EBITDA margin expanded by YoY to INR 1 bn on the back of a 131% YoY gross margin and b) Lower fixed cost
~165 bps YoY to 26% led by i) Strong gross
margin performance and ii) Operating increase in depreciation led by absorption. Interest cost was up 35% YoY due
leverage benefits. PAT was up 43% at INR 4.8 commercialization of the Dahej plant. to a significant rise in benchmark rates globally,
bn. Our take up 400 bps YoY. The company reported INR 1
Our take bn loss on the PAT level vs. a profit of INR 8.4
 For FY24, the company has guided for double- bn due to weak operational performance.
 We believe a) Strong volume-led growth in digit top-line growth YoY, volume-led with
CSM and domestic market, b) A robust Our take
pipeline for product launches for 3-4 years, EBITDA margin expanding 50-100 bps.
and c) Growing CSM order book will continue Margin expansion will be supported by a fall  Considering 1HFY24 performance and near-
to drive growth for PI over the medium term. in RM prices as well as a better product mix. term challenges, UPL has revised its FY24
The company has provided top-line growth revenue/ EBITDA growth guidance downwards
guidance of 18%-20% YoY (excluding pharma) Recommendation - BUY
from 1%-5%/ 3%-7% to flat-0/ (-5%) YoY and
with improvement in margin.  Maintain BUY with a TP of INR 1,080 valuing provided gross debt reduction guidance of USD
Recommendation - BUY it at 40x 1HFY26 EPS. 500 mn YoY.
 Maintain BUY with a TP of INR 4,830 valuing Recommendation - BUY
it at 40x 1HFY26 EPS.
 Maintain BUY with a TP of INR 740 based on
12x 1HFY26 EPS.

17 November 2023
Building Materials - Positive Jenish Karia, +91 22 6911 3406, Jenish Karia@antiquelimited.com
Darshita Shah, +91 22 6911 3431, darshita.shah@antiquelimited.com
Stable margins and positive demand expectations in 2HFY24 were the Quarterly financials and variance
commentary across building material companies in 2QFY24.
PVC prices were stable in the second half of 2QFY24 which kept the Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
demand momentum healthy for the most part of 2Q. However, anticipation Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
of price corrections in Oct'23 resulted in channel destocking and deferment
of purchases in Sept'23. Pipe companies reported volume growth ranging Apollo Pipes 2,495 20.5 3.4 241 869.0 (9.7) 129 (368.9) NA
between 6%-30% and per kg margins stabilized in 2Q. Demand outlook Astral 13,630 16.3 (1.1) 2,201 52.8 (0.4) 1,317 76.5 0.3
remains positive for 2HFY24.
Tile companies continued to deliver moderated 6% volume growth. The Cera Sanitaryware 4,637 11.5 1.1 765 12.6 (0.2) 586 14.5 (4.0)
demand environment remained challenging and is expected to improve Finolex Industries 8,832 (6.2) (16.4) 1,030 NA (22.2) 891 NA 2.9
from 2HFY24. Margins however revived sharply on YoY basis driven by the Greenlam Industries 6,036 16.5 13.2 756 40.8 12.0 394 34.9 22.1
cooling of gas prices.
Faucetware maintained healthy revenue growth on the back of strong Kajaria Ceramics 11,216 4.1 (4.0) 1,797 38.9 (5.7) 1,110 55.1 (9.1)
demand and market share gains. Moderation of growth was seen in the Prince Pipes 6,565 3.1 (0.9) 942 NA 33.7 572 NA 51.6
sanitaryware segment. Margins remained stable during the quarter despite Somany Ceramics 6,552 6.1 1.1 641 51.9 8.9 295 121.6 13.3
some input cost pressures.
Demand and margins for laminates recovered during 2Q. Demand recovery Supreme Industries 23,087 10.6 2.8 3,562 142.1 8.4 2,192 245.4 9.7
was across geographies and margin recovery was driven by softening of Total 83,049 8.2 (1.0) 11,935 175.8 1.8 7,486 314.8 5.3
RM costs and ocean freight.
Overall, our coverage universe revenue grew 8% YoY (1% below our
estimate). EBITDA for the coverage universe grew 176% YoY (2% above (5% above our estimate). In the near term, demand uptake from the housing
our estimate). Pipe companies' margins were impacted in 2QFY23 hence and infrastructure sector remains key monitorable for pipes and tiles
the YoY growth numbers are not comparable. EBITDA margin stood at segments. We prefer Prince Pipes and Greenlam Industries in the sector.
14.4% (vs. our est. of 14.0%), up 870 bps YoY. Net profit grew 315% YoY Top Picks: Prince Pipes and Greenlam Industries
Revenue growth in 2QFY24 (% YoY) EBITDA margin expansion (bps YoY)
25 (%) 3,000 (bps)
20 2,500
15 2,000
10
5 1,500
- 1,000
(5) 500
(10) -
Industries
Prince Pipes
Industries
Sanitayware
Greenlam
Apollo Pipes
Ceramics
Ceramics
Industries
Supreme
Industries
Prince Pipes
Industries
Greenlam
Sanitaryware
Apollo Pipes
Ceramics
Ceramics
Industries
Astral
Somany
Supreme
Astral
Somany
Finolex
Kajaria
Finolex
Kajaria
Cera
Cera
Source: Company, Antique; Source: Company, Antique;

17 November 2023
Building Materials Jenish Karia, +91 22 6911 3406, Jenish Karia@antiquelimited.com
Darshita Shah, +91 22 6911 3431, darshita.shah@antiquelimited.com
 Good Greenlam Industries

Visible recovery in demand and margins; steady
growth outlook
 Good Prince Pipes
Mix improvement drives superior margin
 Prince reported volume growth of 8% YoY, in
 Good Supreme Industries
Volume growth to normalize; rich valuation compels
a downgrade
 Greenlam reported strong operating line with our estimate. Profitability beat our  Supreme reported a strong operational
performance driven by recovery in volume estimate as EBITDA margin expanded to 14%
performance delivering volume growth of 23%
growth and margins for the laminates segment. (INR 23/kg). Over premiumization in select
Domestic/ export laminate volume grew 21%/ markets resulted in laggard volume growth. YoY. Piping volume grew 30% YoY. Revenue
10% YoY. Guidance of 40%-50% CU at its new Price corrective action undertaken. Channel from value-added products grew 18% YoY,
laminates and plywood plants by 4QFY24. destocking and deferment of purchases in contribution 41%. CPVC volumes grew 1.25%
Stable RM prices led to laminates EBITDA Sept'23 also impacted volumes. Improvement YoY in 1HFY24. In the absence of any
margin improving to 16.4%. Overall margin in pipe fitting ratio resulted in normalization of inventory gain/ loss, overall/ piping EBITDA/
remained stable at 12.5%. Investing an EBITDA margin. CPVC contributed 20%-25%
additional INR 600 mn at the new plants to kg improved to INR 24/ 26 per kg. Margins
of revenue in 2Q. Inventory gain of INR 50 mn.
provide for value-added capacity expansion. Prince continues to invest in distribution, for the packaging segment improved to INR
Targeting full CU of the expanded laminate branding, and focusing on increasing presence 43/kg (guided to be sustainable) driven by
capacity (24.5 mn sheets) by FY25. Capex spend in the projects business. Encouraging response traction in exports and mix improvement.
for the upcoming particle board plant has been received for bathware products. Targeting INR
increased to INR 7.8 bn from INR 6 bn. Expect Parvati Agro acquired for INR 1.7 bn (36
80 mn revenue in 3Q. Investing INR 1.5 bn for kmtpa) to start contributing from Dec' 23. INR
the facility to stabilize over three years post 35 kmtpa plant in Bihar. Construction to
commercialization (4QFY24). Guidance of 20% commence post Diwali. 9 bn capex plan on track to increase capacity
revenue growth and 13%-14% EBITDA margin by 26% YoY to 1 mn mtpa by FY24 (1HFY24
in FY24. Project/ net debt of INR 5.5 bn/ INR Our take
capex of INR 2.5 bn and 900 kmtpa capacity).
6.7 bn as of 2QFY24. Expect peak net debt of  Prince has been spending on product portfolio
INR 10.9 bn in FY24 (guidance of INR 8.5 bn). expansion, expanding geographical reach, and Our take
Our take increasing brand spends giving it the pricing  We are factoring in volume/ revenue/ EBITDA
 We believe the successful ramp-up of new power. We believe consolidation will continue CAGR of 17%/ 13%/ 23% over FY23-26E.
capacities can triple FY23 EPS by FY27. We in favor of branded players like Prince. We
expect laminate/ total revenue CAGR of 9%/ have factored in volume/ revenue CAGR of Recommendation - HOLD
21% over FY23-26E. EBITDA margin is 13%/ 12% over FY23-26. We expect an
EBITDA margin of 14.3%/ 14.7%/ 14.9%  Maintain HOLD rating with a TP of INR 4,620
expected to improve to 12.7%/ 13.8%/
14.7% in FY24/ FY25/ FY26 respectively. and EBITDA/kg of INR 23/ INR 23/ INR 24 in based on 40x 1HFY26 P/E (5-yr. avg./ high/
FY24/ FY25/ FY26 respectively. low 24x/ 43x/ 11x).
Recommendation - BUY
 Maintain BUY with a TP of INR 560 based on
32x 1HFY26 P/E (earlier FY25E; five-year  Maintain BUY with TP of INR 940 based on
avg./ high/ low of 25x/ 36x/ 14x). 32x 1HFY26 P/E.

17 November 2023
Krupal Maniar, +91 22 6911 3419, krupal.maniar@antiquelimited.com

Cement - Positive Harshal Milan Mehta, +91 22 6911 3428, harshal.mehta@antiquelimited.com
Our cement universe reported revenue growth of 15% YoY (down 10% Quarterly financials and variance
QoQ), while EBITDA grew 75% YoY on a low base during 2Q. Volume Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
grew 14% YoY/ declined 10% QoQ. Ex-MSA led volume between ACC- Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
ACEM, the growth would be ~12% YoY. Blended realization stood flat ACC 43,347 10.8 (0.7) 5,493 NA (21.6) 3,879 NA (6.2)
ACEM 39,229 8.0 (1.2) 7,734 153.5 (3.5) 6,438 318.5 6.4
QoQ. Total cost/ton decreased by 6% YoY/ increased ~1% QoQ-lower
BCORP 22,858 14.3 (1.3) 2,889 207.4 (7.7) 586 NA (20.1)
than our estimate of 1% QoQ decline as companies witnessed lower benefits
DALBHARA 31,490 6.0 0.5 5,890 55.4 6.7 1,190 142.9 26.7
of input cost reduction owing to rise in slag/ fly-ash costs and higher than
HEIM 5,665 13.7 7.9 695 46.0 (16.6) 358 117.2 (21.5)
usual maintenance shut-down costs. Blended EBITDA/ton increased by INR JKCE 26,631 22.6 4.5 4,670 51.1 13.0 1,785 54.9 33.2
314/ton YoY but declined INR 18/ton QoQ-marginally lower than our JKLC 15,745 14.6 3.8 2,173 32.5 11.5 927 36.4 13.3
estimate. Going forward, the industry is expected to benefit from recent NUVOCO 25,730 7.2 2.3 3,300 71.8 (16.4) 15 NA (91.3)
price increases (up ~5% QoQ or >INR 250/ton till date) and better ORCMNT 7,206 17.1 (1.5) 865 165.8 (7.7) 246 NA (27.4)
operating leverage. Sustenance of recent price increases remains the key SRCM 45,846 21.3 10.5 8,701 66.3 (3.6) 4,913 156.2 (7.8)
TRCL 23,406 31.2 13.8 4,056 120.7 22.4 1,009 779.8 45.4
near-term trigger for the sector.
UTCEM 157,350 15.7 0.3 25,509 36.8 (5.2) 12,815 68.7 (10.9)
Top Picks: UTCEM, SRCM and JKCE. Total 444,503 14.8 2.2 71,973 75.1 (3.7) 34,161 211.2 (3.5)
GRASIM 64,420 (4.5) 0.9 5,936 (37.9) 0.8 7,947 (24.5) 9.4
2QFY24 volume growth (YoY%) 2QFY24 EBITDA/t vs estimated 2QFY24 realization growth (QoQ%)
1.4
1.3
3.1
0.8
38.0
0.6
0.1
21.2
(2.8)
15.3
17.1
16.3
15.5
1,102
14.8
13.9
1,044
13.8
1,008
(2.6)
1,020
1,029
1,062
986
915
887
882
834
793
9.9
678
691
749
955
598
755
627
741
607
654
880
956
7.7
6.4
1.2
(0.2)
ACC (1.4)
HEIM (1.4)
DALBHARA (1.4)
BCORP
NUVOCO
ORCMNT
ACC
ACEM
JKLC
HEIM
SRCM
TRCL
DALBHARA
JKCE
UTCEM
BCORP
SRCM
JKCE
NUVOCO
JKLC
ACEM
ORCMNT
TRCL
UTCEM
BCORP
ACC
JKLC
DALBHARA
ORCMNT
JKCE
NUVOCO
SRCM
UTCEM
ACEM
TRCL
HEIM
Average
2QFY24 2QFY24e
Source: Company, Antique Source: Company, Antique Source: Company, Antique

17 November 2023

Cement Harshal Milan Mehta, +91 22 6911 3428, harshal.mehta@antiquelimited.com
 Good
Above expectations
The Ramco Cements
 TRCL's 2Q EBITDA at INR 4.1 bn (up 18% QoQ)

 Good
Above expectations
JK Cement
 JKCE's consolidated 2Q EBITDA at INR 4.7 bn

 Good
Below expectations
JK Lakshmi Cement
 JKLC's 2Q consolidated EBITDA at INR 2.2 bn

was 22%/ 25% above our/ consensus estimates (increased 51% YoY/ 15% QoQ) was 13%/ (up 33% YoY/ 11% QoQ) was 12%/ 22%
owing to higher than expected volume growth. 18% above our/ consensus estimates led by
higher volumes and lower costs. above our/ consensus estimates.
 Volume growth remained robust at 38% YoY  This was mainly due to higher volume growth
 Consolidated total costs/ton declined 1%/ 2%
and 7% QoQ led by a ramp-up in cement YoY/ QoQ resulting in blended EBITDA/ton (14% vs. our estimate of 10%), lower other
utilization to 82% and clinker utilization to ~90% increasing 25% YoY/ 17% QoQ to INR expenses/ton which declined 5% YoY/ ~1%
resulting in total costs/ton declining 5% QoQ. 1,029/ton vs. our estimate of INR 948/ton as QoQ and a better market mix (higher volumes
 Blended realization (incl. other operating profitability improved across all businesses- in the West).
income) declined ~3% QoQ (vs. our estimate of standalone business (domestic grey + white  Accordingly, blended EBITDA/ton increased
~1% QoQ decline) led by a sharp drop in prices cement/ putty) and UAE operations.
17% YoY (INR 107/ton) and 23% QoQ (INR
down South (TN and Kerala markets).  Volume growth remained robust at 21% YoY/
declined 2% QoQ led by grey cement which 142/ton) to INR 755/ton vs. our estimate of
 Blended EBITDA/ton increased INR 81 QoQ to
grew 22% YoY. INR 700.
INR 880-6% above our estimate of INR 834/ton.
 The company is likely to surpass its grey cement  Management has guided for ~12% YoY volume
 Net debt increased INR 5 bn QoQ to INR 49.7 bn
volume growth guidance of 15% for FY24 growth for FY24 and EBITDA/ton of INR 1,000
mainly owing to the purchase of land for future growth.
given 26% YoY growth in 1HFY24 and strong by FY25E.
 Management expects the benefits of recent price
momentum continuing in Oct'23.  The recent commissioning of UCWL's
hikes in the South and East markets and the full  A favorable market mix and improving
effect of fuel cost reduction to reflect from 2HFY24. clinkerization and 2.5 mtpa grinding unit, likely
profitability at Panna (as it ramps up), paints, and
UAE operations remain key positives for JKCE. to be commissioned by Mar'24, would provide
Our take higher volume growth in the near term.
 We factor 11% volume CAGR during FY24-26E, Our take
while EBITDA/ton to reach INR 1,238 by FY26E  We factor in 11% volume CAGR over FY23-26E Our take
from INR 789 in FY23 led by lower fuel costs, and expect consolidated blended EBITDA/ton to  We expect 8% consolidated volume CAGR during
improve from INR 813/ton in FY23 to INR 1,045/ FY24-26E, while EBITDA/ton should reach INR
better cost efficiencies, and higher realization.
ton in FY24E, INR 1,105/ton by FY25E, and INR 920 by FY26E from INR 710 in FY23 led by
Recommendation - BUY 1,119/ton by FY26E led by lower fuel costs, lower fuel costs, better cost efficiencies, and higher
 We maintain BUY with a target price of INR 1,130 better costs efficiencies, and higher realization. realization.
(earlier INR 1,035) valuing the stock at 13x Recommendation - BUY
1HFY26E EV/EBITDA. TRCL currently trades at  The stock currently trades at 11.4x EV/EBITDA and  We maintain BUY with a target price of INR 820
~12x 1HFY26 EV/EBITDA and ~USD 140 EV/ USD 120 EV/ton based on 1HFY26 EBITDA estimate. based on 8x 1HFY26E EV/EBITDA. JKLC currently
ton based on 1HFY26E EBITDA estimate. Key Maintain BUY with a target price of INR 3,940 based trades at ~6.4x 1HFY26E EV/EBITDA and ~USD
risks: lower demand/ price and higher cost on 14x 1HFY26E EV/EBITDA. Key risks: Lower 64 EV/ton.
escalations. demand/ prices and higher cost escalations.
17 November 2023
Amit Shah, +91 22 6911 3466, amit.shah@antiquelimited.com

Consumer Electricals - Neutral Dhirendra Tiwari, +91 22 6911 3436, dhirendra.tiwari@antiquelimited.com
Mixed bag Quarter; all hopes on festive season demand revival Quarterly financials and variance
The consumer electrical sector reported a mixed performance, with demand Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
in the UCP segment witness witnessing revival supported by weak monsoon, Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
whereas traditional electrical consumer product portfolio of lighting, fans BJE 11,128 (3.5) (10.1) 581 (41.6) (41.4) 378 (37.2) (43.4)
and kitchen appliances continued to witness demand moderation. Industry Blue Star 18,904 19.9 1.6 1,227 43.3 6.8 708 66.3 17.9
has now pinned all its hope on the festive season and have witnessed green
Crompton Con 17,823 4.9 (1.8) 1,745 (9.6) 0.2 1,009 (22.8) (5.3)
shoots on the demand recovery. Revenue for our coverage universe
registered an 11% YoY growth supported by a pick-up in RAC demand Havells 38,912 6.1 (7.2) 3,735 30.1 (20.8) 2,491 33.3 (21.4)
amidst weak monsoon however profitability continues to remain under Voltas 22,928 29.7 8.4 703 (30.3) (50.3) 357 (64.5) (63.9)
pressure given weak demand, high competitive intensity. Operating profit Total 109,694 11.2 (2) 7,990 4.3 (20.2) 4,942 (5.1) (23.8)
for our coverage universe registered muted 4.3% YoY growth leading to Source: Company, Antique
20% under performance to our estimate despite revenue booking being
merely 2% below our estimate, PAT stood below our estimate by 24% (-5%
YoY, given the weak performance from Voltas and Bajaj Electricals). Going Top earnings surprises: None
ahead with companies expecting demand revival, moderation in competition Top Earnings misses: Voltas, Bajaj Electricals
intensity coupled with stable input cost, margins are expected to witness
improvement. Top Picks: None
Revenue growth (% YoY) EBITDA margin (%, 2QFY24, 2QFY23) PAT growth (% YoY)
29.7 12.0 66
10.0 33
19.9 8.0
6.0
(37)
4.0 (23)
6.1 4.9 2.0
0.0 (64)
(3.5)
Blue Star
BJE
Voltas
Havells
Crompton Con
Blue Star
Crompton
BJE
Voltas
Havells
Blue Star
Crompton
Voltas
Havells
BJE
Con
Con
2QFY24 2QFY23

17 November 2023
Amit Shah, +91 22 6911 3466, amit.shah@antiquelimited.com

Consumer Electricals Dhirendra Tiwari, +91 22 6911 3436, dhirendra.tiwari@antiquelimited.com
 Good Blue Star

Marginal outperformance on the operational
 Bad Voltas
EMP provision mars profits yet again, pain to
 Bad
Miss on all fronts
Bajaj Electricals
front; downgrade to HOLD persist for now  BJE reported a weak set of numbers in 2QFY24.
 Blue Star's 2QFY24 operational performance  Voltas' 2QFY24 operational performance was Revenue booking during the quarter declined
was marginally ahead of our expectations below our expectations on the profitability
supported by robust performance in the UCP by 3.5% YoY due to subdued demand in both
front, despite strong revenue booking impacted
segment. Blue Star has been able to gain the lighting as well as consumer products
market share and register market-leading by yet another provisioning in the EMP
segment. Voltas, over the past few quarters, segments. EBITDA margin witnessed a 340 bps
growth in the RAC segment. With a current
market share of 13.5%, Blue Star expects to has been struggling on the margin front given YoY contraction and stood at 5.2% impacted
raise it to 15% in the RAC business segment severe competition & soft RAC demand, which by operating deleverage and BJE continued
and margin to be in the range of 8.5%-9.0%. has also led to some market share loss in the its focus on brand investments leading to higher
Our take RAC segment (19.5% vs. peak share of 25.9% A&P spend. During the quarter, BJE has
in Aug 2021) and also on account of losses
 The company has a strategy to scale up its demerged its project business into a separate
booked in the EMP segment.
operational performance by focusing on a) entity and thus it is now a pure consumer
Scaling up R&D investment, b) Emphasizing Our take
total cost management, c) Expanding its discretionary play.
manufacturing footprint, and d) Expanding  With the indication from the management that
provisioning might continue for another 2-3 Our take
distribution reach. Management reiterated its
guidance of a 15% market share in the RAC quarters we cut our FY24/ 25E earnings by  BJE has over the past two years embarked on a
business with UCP segment margins in the 15%/ 5% respectively. We like the RAC under
range of 8.0%-8.5%. EMP business outlook business transformation journey by simplifying
penetration theme from a long-term view and
remains healthy with Blue Star diversifying its believe that Voltas would be one of the key its corporate structure, streamlining its balance
presence from the traditional building market beneficiaries of the same. sheet, and strengthening its senior management
to areas like data center, factories, and metro
rail as well as plans to become a significant team.
Recommendation - HOLD
player in overseas markets like Europe and Recommendation - HOLD
North America.  We believe the worst seems to be behind in
terms of margin erosion for Voltas and  Given premium valuation and pressure on
Recommendation - HOLD operational performance should improve from
 We are enthused by Blue Star's strategic plans operational performance, given weak demand
hereon. We like the RAC under penetration
to scale up its market share from the current theme from a long-term view and believe that and prevailing heightened competitive
13.5% to 15% over the next few years, Voltas would be one of the key beneficiaries intensity, we maintain HOLD rating on the stock
however, given the premium valuations, we
downgrade the stock to HOLD with a SoTP TP of the same. However, given premium with a target price of INR 1,019 valuing it at
of INR 930 (valuing its UCP business at 42x valuations, we maintain HOLD rating with a 40x 1HFY26E EPS and wait for a better entry
1HFY26E EPS, and EMP and professional SoTP TP of INR 855 and roll over to 1HFY26E point.
electronics segment each at 18x its 1HFY26E EPS.
EPS).

17 November 2023
Sohail Halai, +91 22 6911 3413, sohail.halai@ antiquelimited.com
Raju Barnawal, +91 22 6911 3429, raju.barnawal@ antiquelimited.com
Financials - Banks - Positive Sarvesh Mutha, sarvesh.mutha@antiquelimited.com
In-line earnings; margin came under pressure Quarterly financials and variance
Our coverage universe earnings remained strong at 34% YoY, though Net interest income PPOP PAT
deceleration was witnessed led by a sequential decline in NIM, especially INR mn 2QFY24 % YoY % Var 2QFY24 % YoY % Var 2QFY24 % YoY % Var
in larger banks like HDFCB, ICICIBC, KMB & BOB. IndusInd, Axis Bank's HDFC Bank - Proforma 273,852 6.0 -2.1 226,939 -2.5 0.9 159,761 6.1 11.0
NIM stayed flat QoQ. The momentum on loan growth remained stable with HDFC Bank 273,852 30.3 -2.1 226,939 30.5 0.9 159,761 50.6 11.0
most of the banks reporting 3%-6% QoQ growth, barring SIB. On a YoY
ICICI Bank 183,079 23.8 0.4 142,293 21.8 0.4 102,610 35.2 6.1
basis, loans grew 15% YoY, within which private banks grew 16% YoY &
Axis Bank 123,146 18.9 3.0 86,319 11.9 -2.7 58,636 10.0 1.8
PSU banks grew 14% YoY. On the liability side, deposits grew 14% YoY
Kotak Mahindra Bank 62,966 23.5 0.9 46,101 29.2 2.8 31,910 23.6 4.4
(3% QoQ), within which private banks grew 18% YoY & PSU banks grew
IndusInd Bank 50,767 18.0 2.0 38,809 10.3 -0.8 21,815 22.1 0.6
11% YoY.
Federal Bank 20,564 16.7 1.8 13,245 9.3 2.2 9,538 35.5 13.4
Coverage banks (incl. HDFCB proforma) reported an aggregate PAT of INR City Union Bank 5,384 -5.2 4.8 3,866 -15.3 -5.7 2,806 1.5 20.5
675 bn (21% YoY, 6% higher than estimates) with private banks' PAT growing
DCB Bank 4,757 15.7 0.5 2,105 15.3 -3.8 1,268 12.9 0.6
17% YoY (RoA of 2.0%) and PSU banks' earnings growth of 29% YoY (RoA
Karur Vysya Bank 9,154 11.4 3.0 6,379 11.5 10.9 3,785 51.2 18.4
of 1.0%) supported by higher other income and lower than estimated
South Indian Bank 8,306 14.3 2.1 4,604 8.2 3.0 2,748 23.2 21.2
provisions. NII increased 14% YoY & 1% QoQ. At the aggregate level,
Equitas SFB 7,656 25.6 1.3 3,302 36.3 6.2 1,982 70.2 4.1
NIMs (adjusted for HDFC merger) dropped by 8 bps QoQ but was flat YoY.
Mixed performance was seen with BOB, ICICIBC, and KMB reporting a 20- Ujjivan SFB 8,233 24.1 3.5 4,834 25.6 14.0 3,277 11.4 14.1
35 bps QoQ drop and small finance banks reporting a 30-40 bps QoQ Pvt Banks 757,865 24.0 0.2 578,795 22.2 0.4 400,135 34.0 7.4
decline, whereas IIB, AXSB, and PSU banks (excluding BOB) reported stable/ Pvt Banks
improvement in NIMs. With the ongoing re-pricing of term deposits, select (HDFCB Proforma) 757,865 14.9 0.2 578,795 8.7 0.4 400,135 16.6 7.4
banks may see a further decline in NIMs. PPOP grew 7% YoY (in-line). On
asset quality, the overall trend remained stable and benign; credit cost Public Sector Banks
continued to support PAT growth. State Bank of India 395,000 12.3 1.5 194,166 -8.1 -17.3 143,300 8.0 -3.3
Strong: AXSB, KVB; Weak: BOB Bank of Baroda 108,307 6.4 -2.1 80,197 33.0 8.8 42,529 28.4 4.1
Canara Bank 89,030 19.8 3.4 76,156 10.3 22.5 36,061 42.8 15.4
Maintain positive outlook: We continue to remain constructive on Punjab National Bank 99,229 20.0 4.8 62,164 11.7 5.4 17,561 327.0 42.7
banks with benign asset quality environment and favor those with a strong
Union Bank of India 91,261 9.9 6.4 72,208 9.8 19.9 35,114 90.0 23.4
liability franchise and niche lending as these should be better placed to
PSU Banks 782,826 12.9 2.1 484,892 5.0 -1.0 274,566 28.5 5.2
capture gains of the cycle. NIM moderation is expected in FY24,
Coverage Banks 1,540,691 18.1 1.2 1,063,687 13.7 -0.2 674,701 31.7 6.5
nevertheless, RoAs are likely to remain healthy.
Coverage Banks
Top pick: ICICIBC (HDFCB Proforma) 1,540,691 13.9 1.2 1,063,687 7.0 -0.2 674,701 21.2 6.5
Valuation plays: IIB, CBK, and KVB Source - Company, Antique

17 November 2023
Financials - Banks - Positive Sarvesh Mutha, sarvesh.mutha@antiquelimited.com
NIM (%) Return on assets (%)

10.00 2.10 2.09
1.80 1.98
8.00
1.50 1.41
6.00 1.20 1.38
4.00 0.90 0.97

0.60
2.00 0.30
0.00 0.00
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
Ujjivan SFB
ICICIBC
HDFCB Proforma
AXSB
KMB
IIB
FB
CUB
DCB
KVB
SIB
BOB
CBK
PNB
UNBK
Equitas SFB
SBIN
HDFCB
Pvt. Banks (%) Pvt. Banks HDFCB Proforma (%)

PSU Banks. (%) Coverage (%)
1QFY24 2QFY24 Coverage HDFCB Proforma(%)

17 November 2023
Financials - Banks Sarvesh Mutha, sarvesh.mutha@antiquelimited.com
 Good Axis Bank

Stable NIM QoQ; cost ratio remains high
 Good Karur Vysya Bank
Good performance, RoA remains high
 Bad Bank of Baroda
NIM disappoints, non-core income supports PAT
 AXSB reported a PAT of INR 59 bn (10% YoY/  KVB reported NII of INR 9.2 bn (11% YoY, our  BoB reported 2QFY24 PAT of INR 42.5 bn
1% QoQ; RoA of 1.8%) in line with our estimate of INR 8.9 bn), core PPP of INR 5 bn (28% YoY; RoA of 1.1%) mainly on account of
expectations. Highlights: (1) Cost of funds (-2% YoY), and PAT of INR 3.8 bn (51% YoY vs. strong recoveries from written-off loans and
increased by 14 bps QoQ (vs. 18–42 bps QoQ our estimate of INR 3.2 bn). As compared to overall non-recurring income of INR 17 bn vs.
rise for peers) and was helped by moderation the reported INR 1.4 bn, our estimates factored INR 16.2 bn in 1QFY24. NII came in at INR
in deposit growth (1.5% QoQ, this, in turn, kept in a much softer non-core income at INR 500 108 bn (+6% YoY, 2% below estimate) as NIM
NIM stable QoQ (at 4.1%), (2) NII grew 3% mn which led to a beat on PAT. NIM decline declined 20 bps QoQ (46 bps in 1HFY24), a
for the quarter was lower than expectations at
QoQ and 19% YoY, (3) Fee income grew 31% disappointment. Core PPP was in line at 6%
12 bps QoQ at (4.1%) and the asset quality
YoY and core PPP grew 12% YoY (4% QoQ), YoY, 1.6% of average assets. Led by one
remained strong with a low net slippage ratio
2.6% of assets, ; (3) Loan growth of 5% QoQ aviation account, gross/ net slippage ratio
of 0.2% and NNPL of 0.5%. Loan growth was
was led by stronger growth in relatively better healthy at 17% YoY and 5% QoQ, and was increased QoQ to 2.3%/ 1.2% (1.4%/ 0.4%
yielding loans (7% QoQ), and (4) Slippages/ broad-based. Deposit growth was healthy and excl. the aviation a/c) vs. 1.4%/ 0.4% in
net slippages were low at 1.8%/ 0.7% liquidity remains comfortable. 1QFY24. Credit cost of 0.9% was higher than
respectively. LCR is healthy at 118%. Strong expected. NNPL stays low at 0.8%. Business
Our take
RoE and contained RWA intensity helped CET momentum was strong with loans and deposits
1 improve to 14.6% (vs. 14% in FY23).  KVB continues to deliver healthy core both growing at 4% QoQ each. CET is at
performance and is strengthening its balance 12.5%.
Our take
sheet further—the benefits of which have
 AXSB’s performance was healthy and operating Our take
started percolating into the P&L in the form of
leverage benefits should help core profitability low credit cost. The benefits are expected to  BoB continues to remain a key beneficiary of
and return ratios. We expect the bank to deliver continue to flow in FY24/ 25 which should the improved credit quality cycle. While non-
RoA/ RoE (without factoring in capital dilution) partially help offset moderation in NIM and core income is currently supporting profitability,
of 1.7%/ 1.8% and ~18% over FY24/ 26E, non-core income. We expect the bank to even as it normalizes, we expect BoB to report
with RoA being closer to near its historic peak, deliver RoA of 1.4%–1.3% and RoE of 15%– RoAs of ~1% and RoEs of ~16% over FY24–
asset quality and merger challenges behind. 14% over FY24-FY26E. Maintain BUY with TP FY26.
of INR 175 (~1.2x 1HFY26 BV).
Recommendation - BUY Recommendation - BUY
 We believe valuations are reasonable and  Maintain Buy BUY with TP of INR 240 (1.0x
maintain BUY, with TP of INR 1,225 (2x  We maintain our BUY rating with TP of INR 1HFY26 BV).
1HFY26 BV). 175 (~1.2x 1HFY26 BV).
17 November 2023
Abhijeet Kundu, +91 22 6911 3430, abhijeet.kundu@antiquelimited.com

FMCG - Neutral Dhiraj Mistry, +91 22 6911 3434, dhiraj.mistry@antiquelimited.com
Weak topline; profitability improved on receding inflation Quarterly financials and variance
Our FMCG universe’s 2QFY24 revenue performance was the weakest Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
over the past few quarters due to sustained stress in the rural markets on Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
account of food inflation and erratic monsoon while profitability improved Bajaj Cons 2,319 0.7 (7.2) 377 23.1 (13.1) 384 20.9 (4.9)
Colgate 14,711 6.0 (1.8) 4,821 18.2 (2.2) 3,401 22.3 (0.8)
across companies on receding commodity price inflation. During the quarter,
Dabur 32,038 7.3 (0.8) 6,609 10.0 0.6 5,151 5.1 (0.9)
revenue/ EBITDA/ PAT grew 2.5%/ 12.8%/ 15.8% YoY respectively. Most Emami 8,649 6.3 2.2 2,337 19.6 11.6 1,964 (3.3) (4.3)
companies alluded to revenue performance likely to recover with the onset GCPL 36,020 6.2 1.5 7,234 26.0 5.0 4,430 17.5 (2.2)
of the festive season. In staples, there was a step-up in competitive intensity HUL 152,760 3.6 (3.8) 36,940 9.4 (5.4) 26,680 12.1 (3.5)
from regional/ local players with the moderation of inflation. A large part Jyothy Labs 7,323 11.1 (0.8) 1,354 68.3 5.7 1,042 55.8 8.6
Marico 24,760 (0.8) (0.0) 4,970 14.8 0.3 3,530 17.3 (4.4)
of gross margin expansion was invested in A&P spends to fight competition.
Nestle 50,095 9.4 (3.9) 12,468 21.6 2.6 8,236 20.6 1.5
Paint performance was soft due to a shift in the festive season to 3Q and ITC 165,501 2.6 4.7 60,416 3.0 (3.5) 49,270 10.3 (0.8)
erratic monsoon; profitability improved materially due to a drop in commodity United Spirits 28,647 (0.5) (0.4) 4,701 5.4 (13.2) 3,106 8.6 (14.1)
prices. In the alcobev sector, RDCK witnessed strong growth in P&A while Radico 9,250 21.5 6.1 1,212 34.6 11.5 619 19.4 14.4
UNSP registered muted performance. QSR performance remained soft due Patanjali 78,219 (8.1) 0.0 3,953 103.1 75.0 2,545 126.7 126.5
Asian Paints 84,786 0.2 (4.5) 17,162 39.8 (2.3) 12,054 54.0 1.7
to consumption slowdown, a longer Shravan month, and heightened
Kansai 18,456 1.7 (3.1) 2,699 36.8 (0.7) 1,799 53.4 0.3
competitive intensity impacting SSSG. During the quarter, Jyothy Labs and Jublfoods 13,448 4.5 (1.0) 2,807 (10.2) (4.9) 721 (39.5) (19.6)
Radico Khaitan (upgraded to BUY) reported strong performance while RBA 4,535 23.2 (0.4) 634 50.7 19.5 (93) (29.6) (61.0)
Jubilant Foodworks, Asian Paints, and HUL reported weak performance. Westlife 6,147 7.4 (2.7) 983 2.7 (7.6) 224 (29.2) (24.3)
Devyani 8,195 9.6 (7.3) 1,588 (4.1) (14.1) 517 (25.3) 3.2
Top Picks: United Spirits, Radico Khaitan, Jyothy Labs, and GCPL Sapphire 6,426 14.2 (1.1) 1,151 11.6 (2.6) 152 (43.6) (24.0)
Total 752,284 2.5 (0.8) 174,417 12.8 (1.8) 125,730 15.8 (0.4)
Revenue growth (% YoY) EBITDA growth (% YoY) EBITDA expansion (bps)

24 700
9.6
9.4
7.4
7.3
6.3
6.2
6.0
375
315
301
104
296
4.5
(73)
277
3.6
272
2.6
255
337
248
(42)
1.7
0.7
0.2
68
16
628
573
(341)
78
(277)
51
129
8
127
40
350
37
35
93
26
(1)
23
51
52
22
15
20
18
15
(4)
12
103
(10)
10
14.2
11.1
(9)
Radico 21.5
RBA 23.2
United Spirits (0.5)

Marico (0.8)
26 -
9
5
3
Patanjali (8.1)
3
-
(26) (350)
Colgate
Devyani
Kansai
Dabur
Jublfoods
Bajaj Cons
Asian Paints
Sapphire
Nestle
Westlife
GCPL
HUL
ITC
Colgate
Devyani
Kansai
Patanjali
Dabur
Asian Paints
Bajaj Cons
Nestle
Radico
Westlife
Jublfoods
GCPL
RBA
HUL
United Spirits
Sapphire
ITC
Jyothy Labs
Emami
Jyothy Labs
Marico
Emami
Colgate
Patanjali
Devyani
Kansai
Dabur
Asian Paints
Radico
Bajaj Cons
Nestle
Westlife
Jublfoods
RBA
GCPL
Sapphire
HUL
United Spirits
ITC
Jyothy Labs
Marico
Emami
Source: Company Antique Source: Company, Antique Source: Company, Antique

17 November 2023

FMCG Dhiraj Mistry, +91 22 6911 3434, dhiraj.mistry@antiquelimited.com
 Good
Above expectations
Radico Khaitan
 Bad
Below expectations
Asian Paints
 Bad
Below expectations
Jubilant Foodworks
 Reported a strong performance in P&A  Sales performance belied expectations;  Operational performance remains muted with
(Prestige & Above) brands with 22%/ 36% domestic decorative paint volume grew 6% 4.5% revenue growth and a 1.3% decline in
volume/ value growth and 11% realization while sales remained flat impacted by the like-for-like growth (LFL-adjusted for store split).
growth. Profitability improved due to price erratic monsoon and the delayed festive Elevated commodity prices and a step-up in
increases received in non-IMFL business and season. consumer promotions impacted overall
IMFL portfolio coupled with premiumization Our take profitability, partially offset by productivity
of the portfolio. improvement.
 Though 2QFY24 may not be strictly comparable
Our take with 2QFY23 due to the erratic monsoon and Our take
 Over the long term, we expect RDCK to deliver late onset of the festive season this year, we  In our view, JUBI is reimaging Domino's stores
strong performance with increasing saliency are losing comfort in APNT's sales with a better look and space management to
of P&A brands driving improvement in performance. With the broad-based slowdown revive growth in the dine-in channel, which
profitability and operating metrics (lower in consumption witnessed across sectors, we may take time in our view.
working capital requirement, debt repayment). now expect some moderation in decorative Recommendation - SELL
Recommendation - BUY paints.
 In our view, heightened competitive intensity
 We expect strong growth in P&A brands
Recommendation - HOLD in the pizza segment and higher promotional
(17%/ 25% growth in P&A brands volume/  We downgrade APNT to HOLD factoring in activities would keep JUBI's performance muted
value over FY23-26E) and margin improvement demand challenges and due to the expected in the near term. Factoring headwinds due to
on the back of backward integration and increase in competition. Our target price of competition and inflation, we have
premiumization of portfolio. We upgrade INR 3,208 is based on 50x PER on 1HFY26E downgraded JUBI to SELL with a target price of
RDCK to BUY recommendation with a target EPS. INR 435, based on 45x 1HFY26E EPS.
price of INR 1,655.

17 November 2023

Industrials - Positive Amit Shah, +91 22 6911 3466, amit.shah@antiquelimited.com
Execution strong; ordering momentum robust Quarterly financials and variance

2QFY24 operational performance of our industrial coverage universe met Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
our expectations on all fronts supported by a robust all round operational Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
performance. Execution pick up was aided by easing of supply chain ABB 27,692 30.6 8.7 4,385 107.9 50.9 3,620 131.2 46.9
challenges which also helped companies to book operating leverage, BDL 6,158 15.2 (11.4) 1,340 42.8 1.5 1,471 94.0 41.4
operational efficiencies leading to superior profitability. Execution for our BEML 9,168 13.9 (1.0) 615 46.9 2.2 521 218.8 50.7
coverage universe stood strong registering 15% YoY revenue growth (+1% BEL 39,933 1.2 (14.2) 10,044 17.4 (1.9) 8,123 32.9 11.4
above expectations) whereas operating profit for the coverage universe BHEL 51,253 (1.5) (17.4) (3,877) (58.9) N/A (2,334) PL* N/A
saw a 16% YoY growth (+3% above expectations) with EBIDTA margin Cummins 18,997 (2.6) (9.5) 3,386 16.5 9.7 3,285 30.2 18.6
EIL 7,772 (0.6) (4.9) 952 126.9 50.6 1,022 20.1 25.1
stable at 11.7% (22 bps above expectations). Although domestic business GE T&D 6,978 (0.4) (13.4) 606 1,014.7 15.8 372 334.2 29.6
outlook remains robust, business momentum from the international markets HAL 56,358 9.5 3.8 15,288 (5.0) 6.3 12,353 2.2 18.5
has witnessed moderation. Companies are optimistic about the near to Hitachi Energy 12,280 10.2 (5.8) 653 (13.8) (41.1) 247 (33.4) (59.4)
medium-term business outlook with strong enquiry levels across industries. Honeywell 11,042 39.0 20.9 1,383 8.3 4.4 1,219 3.4 3.0
Order inflow for the quarter was strong and was up 59% YoY supported by JWL 8,792 111.0 10.7 1,212 142.9 12.2 816 229.0 14.9
KEC 44,990 10.7 (4.0) 2,743 54.2 (2.4) 558 1.1 (11.8)
strong ordering in BEL, L&T, BHEL, Engineers Ind & GE T&D. Order backlog
KKPC 2,819 (4.5) (17.0) 317 (20.4) (33.4) 202 (25.8) (34.1)
for the coverage universe stands at an all-time high of INR 7.6 trn providing KOEL 10,590 4.8 (3.0) 986 (14.5) (20.0) 690 (14.3) (12.1)
visibility of 3.2x its TTM revenue. Linde 7,114 3.7 (10.7) 1,736 20.4 (1.8) 1,067 17.6 (5.3)
LMW 13,050 11.7 1.3 1,367 27.8 15.8 1,164 23.6 12.0
Top earnings surprises: ABB, L&T, Cummins, GE T&D, JWL, L&T 510,240 19.3 6.2 56,320 15.0 10.8 32,226 44.6 31.1
Linde, LMW, Titagarh Thermax 23,025 10.9 (2.7) 2,046 45.6 2.5 1,586 45.3 8.6
Titagarh 9,355 54.3 1.0 1,151 108.9 3.3 709 106.1 (0.6)
Top Earnings misses: BHEL, Hitachi Energy, KKPC, Honeywell, KOEL Total 877,605 15.2 1.2 102,655 16.1 3.1 68,918 29.4 16.6
Top Picks: L&T, Siemens, ABB, BHEL, KOEL, Titagarh, BEL & HAL Source: Company, Antique; *PL: Loss to Profit
Revenue growth (% YoY) EBITDA margin (%, 2QFY24, 2QFY23) PAT growth (% YoY)
125.0 40.0 800
111
100.0 30.0
54
334
600
39
229
75.0
219
31
20.0
19
131
15
14
106
12
11
11
10
10
50.0 400
94
10.0
5
4
45
45
33
30
(1)
24
25.0
(14)
(26)
(1)
20
(3)
(0)
(4)
(33)
1
200
18
0.0
2
1
3
0.0
-25.0 -10.0 -
Cummins
Titagarh
Thermax
GE T&D
Honeywell
HAL
BEL
BDL
JWL
EIL
Hitachi Energy
ABB
L&T
KKPC
KEC
LMW
BHEL
Linde
KOEL
BEML
Titagarh
Thermax
KEC
KKPC
GE T&D
Titagarh
Honeywell
BDL
Thermax
JWL
Cummins
HAL
BEL
BHEL
EIL
Honeywell
Hitachi Energy
ABB
LMW
L&T
ABB
LMW
GE T&D
KEC
KKPC
JWL
BEML
Hitachi Energy
KOEL
Linde
EIL
Cummins
BEML
BDL
BEL
Linde
HAL
KOEL
L&T
(200)

17 November 2023

Industrials Amit Shah, +91 22 6911 3466, amit.shah@antiquelimited.com
 Good Larsen & Toubro

Stellar quarter; upside guidance risk on order
 Good
Another strong quarter; business outlook
ABB
 Good
A stellar quarter!
Titagarh Rail Systems
inflow, revenue emerge promising  Titagarh Rail Systems (TRSL) delivered a robust
 L&T's 2QFY24 operational results were ahead  ABB's 3QCY23 operational performance was performance in 2QFY24 reporting a 54%/
of our expectations supported by a) Excellent above our expectations supported by superior 109%/ 106% YoY growth in revenue/
execution displayed in the P&M segment execution and profitability that ABB displayed. EBITDA/ PAT respectively. Strong execution in
(+24% YoY) and b) Better than estimated service Business performance continues to surprise us the freight rail segment coupled with operating
segment margin (18.9%; +100 bps YoY; est. positively across most parameters with consistent leverage resulted in a 320 bps expansion in
of 18.5%) driven by ToD monetization in improvement across key business matrices. For EBITDA margin to 12.3%. The order book (ex.
Hyderabad Metro. However, P&M margin was the quarter, revenue growth stood at a healthy forged wheels) stands robust at INR 219 bn
disappointing and stood below expectations 31% YoY supported by seamless execution of supported by the recent private wagon, Vande
impacted by the execution of weak margin orders in hand. EBTIDA margin expanded by Bharat, Ahmedabad Metro & Surat Metro
orders bagged earlier. Given the 580 bps YoY to 15.8% supported by better orders the company received, providing strong
outperformance on the revenue and order visibility of 6.1x TTM revenue.
operational efficiencies, cost optimization, and
inflow front in 1HFY24, management has
improved price realization across verticals Our take
guided for an upward risk of beating the top
end of its guidance on revenue (FY24 leading to operating profit growth of 76% YoY
and PAT growth of 101% YoY  While TRSL is India's undisputed leader in the
guidance: 12%-15% YoY growth) as well as wagon manufacturing space, now it is also
on the order inflow front (FY24 guidance of Our take among India's very few integrated
10%-12% YoY growth). manufacturers of passenger rail systems. We
 The broader commentary on business outlook
Our take continues to remain healthy, with business believe that the company has created a
 L&T's long-term business prospects remain momentum witnessing traction across key manufacturing set-up that is difficult to
promising given infrastructure development verticals like data centers, warehousing and replicate, and has the capacity to grow its
(NIP of INR 111 trn) and GATI Shakti being logistics, electronics, railways, and metals. ABB turnover to over INR 90-100 bn over the next
the central government's pivotal theme to would be a key beneficiary of the Industry 4.0 five years.
revive the Indian economy. And since L&T is capex theme as well as the broader capex Recommendation - BUY
the largest infrastructure company in India, activity pick-up witnessed across the sector,
we believe it would be a key beneficiary. given its leadership position.  We believe the recently concluded fund raising
coupled with the expected strong cash flow
Recommendation - BUY Recommendation - BUY generation in the next few years will support
 We remain positive on the long-term prospects  We continue to like ABB and maintain BUY the company in meeting its growth objectives.
of the company and maintain BUY rating on rating on the stock with a target price of INR We retain BUY rating on the stock with a TP of
the stock with a SoTP target of INR 3,398. 5,280 (65x its CY25E EPS of INR 81.2). INR 1,013 (25x its 1HFY26E EPS).

17 November 2023
Vikas Ahuja, +91 22 6911 3439, vikas.ahuja@antiquelimited.com

Information Technology - Neutral Aashray Vasa, +91 22 6911 3438, aashray.vasa@antiquelimited.com
A majority of the IT services companies reported weaker than expected revenue Quarterly financials and variance
growth in 2QFY24, impacted by reduced transformation and discretionary
spend as well as continued delays in decision-making. Infosys' revenue growth Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
was aided by pass-through revenue and the company has cut its FY24 revenue Company (INR bn) (%) YoY (%) (INR bn) (%) YoY (%) (INR bn) (%) YoY (%)
growth guidance at the top end to 1%-2.5% in CC terms vs. 1%-3.5% earlier. TCS 597 7.9 (1.0) 157.5 8.5 0.1 113.4 8.7 0.5
Infosys reported CC growth of 2.3% QoQ (of which c1.8% was aided by pass-
Infosys 390 6.7 1.1 94.4 6.0 2.6 62.1 3.2 (0.3)
through revenue) while TCS reported flat growth. HCLT reported 1.0% QoQ
growth while Wipro was down 2.0% QoQ in CC terms. TCS/ Infosys/ HCLT/ Wipro 225 (0.1) (1.7) 42.0 6.7 (1.3) 26.5 (0.5) (7.4)
Wipro's EBIT margins were slightly ahead of expectations (except Wipro) and HCL Technologies 267 8.0 0.0 59.4 9.5 3.1 38.5 10.3 0.0
stood at 24.3%/ 21.2%/ 18.5%/ 14.7%. The major levers for margin TechM 129 (2.0) (1.8) 10.7 (46.0) (9.1) 4.9 (61.6) (17.5)
improvement were productivity and utilization benefits as well as cost
LTIM 89 8.2 0.6 16.3 (0.3) 4.1 11.6 (2.2) 2.2
optimization measures. HCLT cut its FY24 revenue growth guidance to 4.0%-
5.0% in organic CC term (5.0%-6.0% including the ASAP acquisition) versus CoForge 23 16.2 (1.0) 3.5 0.8 (8.8) 1.8 (9.8) (18.6)
6.0%-8.0% earlier, implying strong organic growth of 2.7%-4.0% CQGR in Mphasis 33 (6.9) (2.3) 6.0 (3.6) (1.3) 3.9 (6.3) (6.1)
2HFY24. Wipro's CC revenue growth guidance for 3QFY24 of -3.5% to - Persistent 24 17.7 0.2 4.1 10.1 2.2 2.6 19.7 4.8
1.5% QoQ was much lower than our expectation of -1% to +1%.
LTTS 24 19.6 0.4 4.8 12.8 4.3 3.2 11.7 1.0
Despite the lack of visibility in the near term, IT services companies remain confident
Cyient 18 27.4 1.7 3.3 42.3 (0.4) 1.8 66.5 (3.2)
of the long-term demand trajectory, driven by the return of discretionary tech
spending and the emergence of newer technologies. TCS expects its order book to Firstsource 15 3.5 (1.0) 2.3 19.3 (3.9) 1.3 (2.2) (6.9)
be robust, and despite the slowdown, increased the guidance of TCV run-rate to Zensar 12 0.5 0.2 2.3 118.9 15.1 1.7 206.0 27.9
USD 9-10 bn per quarter (previously USD 7-9 bn). Deal wins remain skewed Total 1,845 6.4 (0.4) 406 5.5 0.9 273.4 3.5 (1.0)
towards cost take-out deals, but TCV of IT companies were extremely strong in
2QFY24 and should augur well for a recovery in revenue growth for FY25.
Top Picks: HCLT & LTIM
Constant currency revenue performance USD YoY revenue growth for Tier 1 IT
of IT vendors vendors 2QFY24 - EBIT margin performance
3% 32% 26%
24% 24%
16% 22%
0% 8%
0% 20%
-8% 18%
Q3FY20
Q4FY20
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q3FY22
Q4FY22
Q1FY23
Q2FY23
Q3FY23
Q4FY23
Q1FY24
Q2FY24
16%
-3% 14%
TCS Infosys HCLT Wipro TCS Infosys HCLT Wipro
Reported Expected
TCS Infosys Reported Expected

17 November 2023
Vikas Ahuja, +91 22 6911 3439, vikas.ahuja@antiquelimited.com

Information Technology Aashray Vasa, +91 22 6911 3438, aashray.vasa@antiquelimited.com
 Good
Outlook for 2H robust, unlike its peers
HCLT
 HCLT's results were largely in line, with a marginal

 In-line Infosys
Weak exit rate rules out double-digit growth in FY25
 Bad
Miss on all counts; recovery to be gradual
TechM
 Infosys reported 2QFY24 revenue of USD 4,718  TechM reported 2QFY24 revenue of USD 1,555
miss on the revenue front, while EBIT margin was mn, up 2.3% CC QoQ (of which c1.8% was mn, down 2.4% CC QoQ versus our estimate of a
better than expectations. Revenue came in at USD aided by pass-through revenue) versus our 1% decline. The decline was led by continued
3,225 mn, up 1.0% QoQ in CC terms (including weakness in the communication vertical.
estimate of 1.0%. However, despite the better
50 bps from the ASAP acquisition) versus our Management noted that the continued pressure
than expected 2Q, the company cut its FY24
expectation of 1.5% QoQ growth. Deal wins were on the discretionary services portfolio and business
growth guidance at the top-end to 1%-2.5% in
higher at USD 4.0 bn vs. an average of USD 2.3 rationalization measures are also contributing to
CC vs. 1%-3.5% earlier, implying a CQGR of -
bn for the last eight quarters. HCLT cut its FY24 the revenue decline. 2Q EBIT margin came in 210
2.0% to 0.0%. The company continues to see a
revenue growth guidance to 4.0%-5.0% in bps, lower QoQ at 4.7%, impacted by revenue
slowdown in volume due to delays in decision-
organic CC term (5.0%-6.0% including the ASAP decline, wage hikes, and measures such as
making from clients on the transformation
acquisition) versus 6.0%-8.0% earlier, while EBIT termination of product lines and exit from non-core
programs and discretionary work, mainly in the
margin guidance remains intact at 18.0%-19.0%, businesses. Deal wins saw a reasonable
financial services, telecom, hi-tech, and retail
implying strong organic growth of 2.7%-4.0% improvement QoQ at USD 640 mn (net new TCV),
CQGR in 2H, which improves the visibility of verticals. For the quarter, EBIT margin came in
line with expectations at 21.2%; FY24 margin but still below the company's previously guided
achieving industry-leading growth in FY25. range of USD 700 mn to USD 1 bn. Although
Margin came in better than expected, the 154 guidance remains intact at 20% to 22%. The
margin improvement demonstrates the early 2HFY24 deal pipeline remains strong,
bps improvement was due to productivity and management hinted that deal closures could
utilization benefits, reduction of sub-contracting benefits of its recently unveiled margin
improvement plan. continue to be slower due to the macro environment,
costs, discretionary cost optimization, and resulting in continued pressure on revenue in 2H.
reduction in overheads. Our take
Our take
Our take  We now forecast FY24/ 25E/ 26E CC organic
 The revised guidance still builds in a strong pick- revenue growth of 2.5%/ 7.8%/ 9.1% versus  TechM has been reporting a decline in revenue for
up in coming quarters. The cut in guidance was 3.7%/ 9.7%/ 9.8% earlier. We cut EPS for FY25/ the past few quarters and margins continue to be
largely expected and the margin beat offset the 26E by 4%-3% as we cut revenue growth under pressure. We think that recovery for the
miss on 2Q revenue. We now forecast a CC growth assumptions and cut the target price in line with company will be gradual, with the new CEO
of 10.0% for HCLT in FY25 versus 7.8%/ 9.1% EPS to INR 1,490. revamping the company's strategies and GTM model.
for Infosys/ TCS aided by a strong exit rate. Recommendation - BUY
Recommendation - HOLD
Recommendation - BUY  We retain BUY recommendation for TechM,
 We value Infosys at 21x forward PE on
 We continue to value HCLT at a multiple of 21x with a TP of INR 1,225. We value TechM at
1HFY26E EPS, which is at a 15% discount to
1HFY26E EPS, in line with our valuation 18x on 1HFY26E EPS, which is at a 25%
TCS' forward valuation multiple as earnings
multiple for Infosys. We have a BUY rating with discount to the average target multiple of
a TP of INR 1,475. volatility remains higher compared to TCS.
Infosys and TCS.
17 November 2023
Rohit Natarajan, +91 22 6911 3414, rohit.natarajan@antiquelimited.com

Infrastructure - Positive Pranav Furia, +91 22 6911 3467, pranav.furia@antiquelimited.com
At an aggregate level, revenue was up 16.3% YoY due to a pick-up in Quarterly financials and variance
execution led by NCC and Ircon. Total road tendering in the financial year
Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
so far has been INR 1.7 trn, while awarding was at INR 829 bn. Total water
Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
segment tendering for 1HFY24 was INR 1.2 trn, while awarding was INR
445 bn. Ashoka Buildcon 15,613 21.9 17.0 1,439 28.5 33.2 712 8.8 33.4
Dilip Buildcon 24,270 7.3 (1.5) 2,935 12.3 (11.7) 833 284.3 (3.4)
We prefer drinking water over road as an infra theme. NHAI is likely to
IRB Infra 17,450 29.9 15.2 7,946 19.5 9.3 957 12.4 (2.7)
award 84 projects spanning 2,856 km and costing INR 1.43 trn, of which
1,671 km are to be prioritized—that is 34 projects for INR 585 bn. NHAI IRCON 28,836 36.2 29.8 1,725 12.6 9.4 2,304 29.4 48.2
awarded 6,003 kms in FY23. With the highway authority’s debt reaching KNRConst 9,415 11.1 0.7 1,663 (11.9) (1.2) 999 (7.2) (2.8)
record levels of INR 3.43 trn, we expect BOT projects to be back in focus NBCC 16,221 4.2 (4.6) 887 5.4 (1.5) 1,507 51.5 47.7
(positive for IRB). NCC Ltd. 42,832 42.6 18.8 2,785 (3.5) (18.7) 690 (43.3) (52.1)
Welspun Enterprises, IRB Infrastructure Developers, and Ircon International Rites 5,493 (13.0) 4.8 1,107 (29.9) (12.0) 1,166 (11.3) 5.9
posted a strong set of numbers. Welspun posted revenue growth of 6.4%, RVNL 49,143 0.1 (4.3) 2,983 (5.6) (3.2) 3,944 3.5 28.0
but with superior EBITDA margin and lower finance cost on account of Welspun Ent 5,424 6.4 (3.2) 595 28.1 18.0 538 56.6 37.0
being a net cash company, PAT growth was 57%. NCC posted the highest Total Infra 199,908 16.3 7.4 24,066 5.8 (0.2) 13,651 11.3 13.8
revenue growth of 42%, but Sembcorp arbitration and other settlements
led to a one-time impact of ~INR 2 bn on revenue and INR 1.5 bn on net
profit during the quarter, leading to a PAT decline of 43%.
Top picks: NCC and IRB
Revenue growth YoY (%) EBITDA growth YoY (%) Net profit growth YoY (%)
30 40 100
11
20 30
30
36
43
70
22
6
7
10 20
- 10 40
(10) - 10
(10)
RITES (13)
(20) (20) (20)

(30)
(40) (50)
IRCON
NBCC
NCC Ltd.
RITES
RVNL
IRB Infra
NCC Ltd.
Welspun E.
IRCON
Ashoka Build.
Dilip Build.
IRB Infra
NBCC
RVNL
Ashoka Build.
Welspun E.
Dilip Build.
IRCON
NBCC
RVNL
NCC Ltd.
RITES
IRB Infra
Welspun E.
Ashoka Build.
Dilip Build.
KNR
KNR
KNR

17 November 2023

Infrastructure Pranav Furia, +91 22 6911 3467, pranav.furia@antiquelimited.com
 Good Welspun Enterprises

Order inflows to be the key driver ahead!
 Good
Adds TOT-12 to the portfolio!
IRB Infra
 Bad
Best case scenario already priced in
NBCC
 We continue to like WELENT as the best proxy  IRB is on a steady path to growth: (1) With 24%  NBCC recorded flattish revenue and EBITDA
for the water space. WELENT’s order backlog toll revenue growth in 2QFY24 (ex-Hyderabad growth, with PAT growth only supported by a
is at INR 91 bn (book-bill 3.3x FY23 revenue). TOT: 14% YoY), there is a case for rising PCU jump in other income. The big event for NBCC
Having won no new projects since the Actis growth with adequate toll hikes and (2) MRM’s India (NBCC) is the new CMD and his vision.
transaction, WELENT continues to be an INR INR 76 bn order backlog, which can assure Over the next five years, in accordance with
9.3 bn net cash company. For the cash in hand, INR 38 bn revenue in FY24E, besides INR 5 bn the new CMD’s target, NBCC hopes to be an
the company can achieve the target of INR in annual O&M. EBITDA was at INR 7.9 bn, up INR 250 bn revenue and INR 12 bn net profit
19% YoY. With interest costs rising and losses company, which seems difficult to achieve. With
60–80 bn of order inflow in FY24. Post that,
in JV aggravating, the company net profit of 40% of OB working on the ground and
WELENT can move up to the INR 43–47 bn monetization moving at a snail’s pace, we find
revenue trajectory. INR 957 mn, was up 12% YoY.
no reason for cheer.
Our take Our take
Our take
 The company remains undervalued. The  NHAI is likely to award 84 projects spanning
 From 2017 to October-23, NBCC sold
company has developed assets, even beyond 2,856 km and costing INR 1.43 trn, of which
commercial inventory of 2.1 mn sq. ft., valued
roads, sold them, and has bid for new ones. And 1,671 km are to be prioritized—that is 34
at INR 87.5 bn, through open e-auction. This
it has all happened with an adequate cushion of projects for INR 585 bn. However, BOT (toll)
essentially translates to INR 41,667/sq. ft.—as
cash in hand. With the decision to buy a 50.1% offers INR 400 bn out of INR 1.43 trn in the against NCR, which offers property at 25% of
near-term addressable market. This could be a these reserve price. Moreover, NCR is a region
stake in Patel Engineering’s Michigan Engineers,
significant shift from 65:35 model of HAM and with 56 mn sq. ft. of vacant commercial inventory.
it can undertake high-margin specialized EPC mix, which bloated NHAI’s balance sheet.
projects. Going ahead, the EBITDA margin will Without doubt, critics may point out Nauroji
With BOT (toll) remaining the natural solution, Nagar to be a prime location. But it seems small,
be strong at 10%–12% and order inflow could IRB remains the best proxy for NHAI’s policy it is in this market that NBCC plans to monetize
be INR 60–80 bn for the year. change. INR 225 bn, award it to contractors, and
Recommendation - BUY Recommendation - BUY execute it over the next five years. To make
 With an incremental focus on the EPC business, matters worse, NBCC has little legroom to lower
 We value the BOT (toll) at INR 46 bn. The the reserve price in a bid to chase volumes.
we believe the company can deliver a Mumbai-Pune TOT we value at INR 45 bn and
revenue/ EBITDA growth of 23%/ 39%/ 30% HAM assets at INR 6 bn. We value private Recommendation - SELL
CAGR respectively (FY23–26E). Valuing its InvIT at INR 129 bn, the EPC arm at INR 56  With an eroded base, we foresee 11%/ 23%/
EPC business at 10x 1HFY26 annualized EPS, bn, and public InvIT at INR 7 bn. We add the 30% CAGR in revenue/ EBITDA/ net profit
net cash, and residual road investments at the optionality of INR 6 bn against claims of INR from FY23–26E respectively. We continue to
invested value, we value the company at a TP 36 bn. Using SoTP, we value IRB at INR 49/ rate SELL with a TP of INR 28 (10x PE for
of INR 430 and maintain BUY. share and retain BUY. 1HFY26E annualized EPS).
17 November 2023

Insurance - Positive Harshal Milan Mehta, +91 22 6911 3428, harshal.mehta@antiquelimited.com
Our insurance universe reported APE growth of ~1% YoY for 2QYF24 owing to 13% de-growth in LIC's APE. APE growth of our private coverage
companies stood robust at 22% YoY owing to higher sales of ULIP, retail protection and annuity offset to an extent by lower non-par sales. For 1HFY24,
APE for our coverage universe remained flat, however, private coverage universe APE grew 14% YoY. Our coverage universe VNB remained flat YoY for
2QYF24 whereas private coverage companies' VNB grew 9% YoY. For 1HFY24, the VNB of our coverage universe remained flat, however, the private
coverage universe's VNB grew 7% YoY. VNB margin of our coverage universe remained broadly flat YoY at 21%, however, the private coverage
universe's margin declined 330 bps YoY to 27.4% in 2QFY24 owing to higher sales of low margin ULIP, lower sales of high margin non par offset to an
extent by higher sales of high margin retail protection and annuities. In 1HFY24, the VNB margin of our coverage universe remained broadly flat YoY at
20.6%, however, private coverage universe margins declined 177 bps YoY to 27.4% in 1HFY24. Going ahead, 2HFY24 APE growth (ex-Mar'24) is likely
to be better than 1HFY24 led by a lower decline in non-par, while protection and annuity are likely to sustain the momentum. FY24 is expected to be a
reset year with respect to margins and we expect margins to improve over the medium term led by the increasing share of high-margin products such as
protection, annuity, and non-par. Top Picks: HDFCLIFE and MAXF.
Quarterly performance and variance
Q2FY24
APE VNB VNB Margin (%)
INR Bn Q2FY24 Q2FY24 E Q2FY23 Variance % YoY Q2FY24 Q2FY24 E Q2FY23 Variance % YoY Q2FY24 Q2FY24E Q2FY23 Variance (bps) Yoy
HDFCLIFE 30.5 32.2 26.9 (5.6) 13.2 8.0 8.5 7.8 (5.8) 3.0 26.3 26.4 28.9 (6) (262)
IPRU 20.6 20.6 20.0 0.2 3.2 5.8 6.1 6.2 (5.0) (7.1) 28.0 29.5 31.1 (152) (308)
SBILIFE 52.4 51.4 39.4 2.0 33.0 14.9 16.0 12.4 (7.0) 20.3 28.4 31.2 31.5 (274) (302)
MAXF 16.5 15.1 11.9 9.8 38.8 4.2 4.2 3.7 (1.7) 11.5 25.2 28.1 31.3 (295) (615)
Pvt Cos 120.0 119.2 98.2 0.6 22.2 32.8 34.8 30.1 (5.7) 9.1 27.4 29.2 30.7 (184) (330)
LICI 131.0 136.8 149.6 (4.3) (12.5) 20.0 20.8 22.8 (4.1) (12.4) 15.3 15.2 15.2 3 1
Total 250.9 256.0 247.8 (2.0) 1.3 52.8 55.7 52.9 (5.1) (0.2) 21.0 21.7 21.4 (69) (31)
YTD performance and variance

H1FY24
APE VNB VNB Margin (%)
INR Bn H1FY24 H1FY24E H1FY23 Variance % YoY H1FY24 H1FY24E H1FY23 Variance % YoY H1FY24 H1FY24 E H1FY23 Variance (bps) Yoy
HDFCLIFE 53.7 55.5 49.1 (3.2) 9.3 14.1 14.6 12.9 (3.4) 9.5 26.3 26.3 26.2 (4) 5
IPRU 35.2 35.2 35.2 0.1 0.1 10.2 10.5 10.9 (2.9) (7.1) 28.8 29.7 31.0 (89) (222)
SBILIFE 82.6 81.6 68.3 1.3 20.9 23.6 24.7 21.2 (4.5) 11.3 28.6 30.3 31.0 (173) (245)
MAXF 27.7 26.2 22.0 5.7 25.7 6.6 6.7 5.9 (1.1) 13.1 24.0 25.6 26.6 (163) (267)
Pvt Cos 199.2 198.5 174.7 0.4 14.1 54.5 56.5 50.9 (3.5) 7.1 27.4 28.5 29.1 (110) (177)
LICI 226.3 232.1 252.3 (2.5) (10.3) 33.0 33.9 36.8 (2.5) (10.1) 14.6 14.6 14.6 0 3
Total 425.5 430.6 426.9 (1.2) (0.3) 87.5 90.4 87.6 (3.1) (0.1) 20.6 21.0 20.5 (41) 5

17 November 2023

Insurance Harshal Milan Mehta, +91 22 6911 3428, harshal.mehta@antiquelimited.com
 Good
Above expectations
Max Financial Ser
 MAXF's 1HFY24 APE grew 26% YoY to INR 27.7 bn

 Good
Above expectations
SBI Life
 Bad
Below expectations
Life Insurance Corp
 SBILIFE's 2QFY24 APE grew 33% YoY to INR  LIC's 2QFY24 APE de-grew 12% YoY to INR
(6% above our estimate) implying 5-yr. CAGR of 13%
led by robust growth in par, protection, and annuity. 52.4 bn (in line with our/ consensus estimates). 131 bn (4% below our estimate). 1HFY24 APE
 Par grew 55%, protection grew 42%, and annuity de-grew 10% to INR 226 bn. Group APE
 1HFY24 APE increased 21% to INR 82.6 bn
grew 277% (on a low base). (5-yr. CAGR: 17%) led by 17% YoY growth in declined 25% to INR 80 bn whereas individual
 1HFY24 VNB grew 13% YoY to INR 6.6 bn (5- APE remained flat at INR 146 bn. Of individual
yr. CAGR of 18%) with VNB margin declining individual APE to INR 71.4 bn whereas group
APE, on a low base, grew 66% YoY to INR APE, non-par APE increased 20% YoY to INR
260 bps YoY to 24% owing to a) Higher sales of
ULIP in online business at lower margins; b) 11.2 bn. ULIP grew 37% YoY, while non-par 16 bn.
Higher investments in proprietary channels, and savings declined 18% YoY.  Market share in premium/ policies declined
c) Decline in non-par share. 980 bps YoY/ 250 bps YoY to 58.5%/ 68.7%.
 1HFY24 VNB grew 12% YoY to INR 23.6 bn
 Management's guidance of double-digit APE Group premium market share declined 1000
growth for FY24E seems conservative given an (5-yr. CAGR of 27%) with VNB margin
declining 240 bps YoY to 28.6% owing to the bps YoY to 70.3%.
ask rate of 11% YoY (adjusted for INR 3.5 bn
one-off sales in Mar'23) for 2H amidst the resilient adverse product/ distribution mix.  2QFY24 VNB de-grew 12% YoY to INR 20 bn,
underlying business momentum and strong while 1HFY24 VNB de-grew 10% to INR 33
 The new MD and CEO (Mr. Amit Jhingran)
growth outlook guided by industry peers. bn with VNB margin remaining flat YoY at
 The company reiterated its VNB margin guidance reiterated guidance of 20% retail APE growth for
14.6% (in line with estimates).
of 27%-28% (vs. 31.2% for FY23) for FY24 which FY24E vs. 17% achieved during 1H and has
guided for a VNB margin of 28%-30% for FY24E  LICI's progress in terms of increasing the share
seems possible led by higher operating leverage
benefits and improving products mix vs. 1HFY24. (vs. 30.1% for FY23) as the company remained of non-par and diversifying its distribution mix is
 Management aspires for 20% APE growth in focused on increasing the share of non-par products. sure but gradual given its sheer gigantic size.
the medium term and expects VNB margin to
improve by 100-200 bps. Our take Our take
Our take  We factor APE/ VNB CAGR of 7%/ 12% over
 We factor APE/ VNB CAGR of 16% 19% over
 We factor APE/VNB CAGR of 14%-15% over FY22-26E and expect VNB margin to improve FY22-26E and expect VNB margin to improve
FY22-26E and expect VNB margin to improve from 15.1% in FY22 to 18.4% by FY26E.
from 27.3% in FY22 to 29% by FY26E. from 25.9% in FY22 to 28.9% by FY26E.
Recommendation - BUY Recommendation - BUY Recommendation - HOLD
 Valuations at 1.8x 1HFY26E P/EV and ~9x 1HFY26E  We factor 5% APE, 9% VNB, and 11% EV CAGR
P/VNB (after providing 20% holdco discount) seem  Valuations at 1.8x 1HFY26E P/EV and ~8x
over FY23-26E as LICI may continue to lose market
attractive, considering the expected 14%-15% APE/ 1HFY26E P/VNB seems attractive, considering
share, but VNB margins may improve given the
VNB CAGR over FY22- 26E. Maintain BUY with a the expected 16%/ 13% APE/ VNB CAGR
DCF-based TP of INR 1,140 implying 2.4x P/EV and over FY24-25E. Maintain BUY with DCF-based increasing share of non-par. Higher MTM gains
15x P/VNB on 1HFY26E after factoring 20% holdco TP of INR 1,630 implying 2.3x P/EV and 13x may drive EV growth higher than VNB growth.
discount. Separately, Max Life's listing over the next P/VNB on 1HFY26E. Maintain HOLD with a revised target price of INR
two years shall further unlock value, in our view. 690 based on 0.6x 1HFY26E EV/EBITDA.
17 November 2023
Pallav Agarwal, +91 22 6911 3411, pallav.agarwal@antiquelimited.com

Metals - Neutral Suman Kumar, +91 22 6911 3416, suman.kumar@antiquelimited.com
Seasonally weak quarter for steel; lower metal prices impact margins Quarterly financials and variance
2QFY24 EBITDA for companies under our coverage indicates sequentially Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
weaker steel prices, partially offset by steady domestic volumes (lower Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
exports amidst weaker global macros) and easing cost pressures (lower SAIL 297,135 13.2 13.3 38,690 428.1 18.2 16,556 LP** 28.3
coking coal prices coming in) supporting margins. The profitability of steel Tata Steel* 556,819 (7.0) (9.8) 42,678 (29.6) (12.6) 7,027 (54.2) 9.7
companies is expected to improve from 2HFY24 onwards with sequentially JSW Steel* 445,840 6.7 4.1 78,860 350.1 6.6 21,710 LP** (7.7)
Nalco 30,434 (12.8) 5.8 3,965 17.9 (19.1) 2,063 21.2 (24.2)
higher realizations, revival of volumes post the monsoon, offsetting higher
Hindalco 206,760 12.5 8.2 17,610 22.5 (2.0) 8,140 48.5 6.1
coking coal prices. The domestic demand outlook remains strong amidst
NMDC 40,140 20.6 (1.2) 11,933 39.7 (12.6) 10,278 15.6 (8.4)
higher infrastructure outlay by the government in the upcoming election Hindustan Zinc 67,920 (18.5) (0.0) 31,390 (28.8) (2.9) 17,370 (35.2) (0.1)
year. Jindal Steel & Power* 122,502 (9.4) (0.8) 22,857 18.3 (8.2) 13,878 24.2 28.3
Non-ferrous prices are largely range-bound and would be supported by Kirloskar Ferrous 8,798 (22.4) (10.9) 1,327 (4.1) (11.0) 569 (30.6) (18.9)
restricted supply and steady demand. Easing of domestic e-auction premiums, MOIL 3,475 47.3 2.9 963 189.7 (1.4) 615 150.8 (0.7)
Vedanta* 389,450 6.3 16.5 114,790 49.1 58.6 35,350 148.2 127.6
higher linkage thermal coal availability, initiation of captive mining, and
Total 2,169,274 1.9 2.9 365,064 43.8 12.6 133,556 101.0 22.0
lower input commodity costs would aid in the reduction of costs for non-
Metal, pipes and tubes
ferrous metal makers in 3QFY24. APL Apollo Tubes 46,304 16.7 0.6 3,250 40.2 (0.7) 2,029 35.1 2.1
Top Picks: Hindalco, JSPL, Tata Steel, NALCO, MOIL, and NMDC. Indian Hume Pipe 3,188 (1.5) (6.2) 318 19.7 16.0 103 61.9 61.0
JTL Industries 5,021 37.2 (6.9) 374 16.4 (7.4) 279 33.5 (2.2)
Venus Pipes and Tubes 1,914 51.4 (1.4) 347 123.5 14.8 203 95.0 7.1
Source: Company, Antique; * Tata Steel, Vedanta, JSW Steel, JSPL financials are consolidated; ** Loss to Profit
Revenue growth in 2QFY24 (% YoY) EBITDA margin trend (%) PAT margin trend (%)
60 60 40
40 30
40
20 20
20 10
-
- -
(20)
(10)
NMDC
Tata Steel*
H. Zinc
JSW Steel*
Nalco
MOIL
JSPL*
Hindalco
Vedanta*
Kir Ferrous
SAIL
H. Zinc
NMDC
MOIL
Tata Steel*
SAIL
JSW Steel*
Nalco
Hindalco
JSPL*
Kir Ferrous
Vedanta*
(40)
NMDC
MOIL
Tata Steel*
SAIL
H. Zinc
JSW Steel*
Nalco
Hindalco
JSPL*
Kir Ferrous
Vedanta*
Sep-22 Jun-23 Sep-23 Sep-22 Jun-23 Sep-23

Source: Company, Antique *consolidated financials Source: Company, Antique *consolidated financials Source: Company, Antique *consolidated financials

17 November 2023
Pallav Agarwal, +91 22 6911 3411, pallav.agarwal@antiquelimited.com

Metals Suman Kumar, +91 22 6911 3416, suman.kumar@antiquelimited.com
 Good
Above expectation
Hindalco

In line
In-line Hindustan Zinc
 Bad
Below expectation
Nalco
 Hindalco's standalone revenue came in at ~INR  HZ's revenue declined 18.5% YoY and 6.7% QoQ  Nalco's standalone revenue was 5.8%, above our
206.8 bn, rising 12.5% YoY and 3.9 QoQ, to ~INR 67.9 bn, primarily impacted by lower and 3.2% below consensus estimates at INR 30.4
driven by the highest-ever copper shipments, sales volume and weaker zinc prices. EBITDA at bn, fell by 12.8% YoY and 4.2% QoQ impacted by
partially offset by lower LME copper and ~INR 31.4 bn declined 28.8% YoY and 6.2% lower alumina, aluminum prices. EBITDA at INR 4
aluminum prices. Standalone EBITDA (excluding sequentially (impacted by lower revenue partially bn grew by 17.9% YoY but fell 33.3% QoQ; it was
Utkal Alumina) was in line with our estimate at offset by cost improvement), was ~3% below our below our and consensus estimates. Power and
~INR 17.6 bn, higher 22.5% YoY and 12.5% and 8% lower than consensus estimates. The cost fuel costs at INR 10.5 bn declined 24% YoY (aided
QoQ. Copper segment EBITDA at ~INR 6.5 bn of zinc metal production, excluding royalty, by lower coal costs post commencement of captive
rose 20% YoY and 23% QoQ, aided by higher declined 6% YoY and 4% QoQ in INR terms to coal mining at Utkal block D) but rose 14% QoQ
shipments. Aluminum India's upstream EBITDA INR 93,981 per ton. Cost reduction was aided by due to external purchase of grid power. Aluminum
(including Utkal) stood at ~INR 20.7 bn, which the softening of thermal coal prices, higher linkage segment EBIT at INR 2 bn rose 13.7% YoY but
was sharply higher by 54% YoY and 7.2% coal availability, and lower specific coal declined 46.7% QoQ, while alumina segment EBIT
sequentially with 6% QoQ cost reduction offset consumption through technological improvement. at INR 1.1 bn grew by 27.7% YoY and 2.7% QoQ.
by lower metal prices. Consolidated EBITDA was Adjusted PAT at INR 17.4 bn declined 35.2% Adjusted PAT at INR ~2.1 bn rose 21.2% YoY and
at ~INR 56.4 bn, higher by 4% YoY but YoY and 11.8% QoQ. shrank 41% QoQ.
marginally lower QoQ, in line with consensus Our take
Our take
estimates. Consolidated net debt fell 2%
sequentially to INR 376.1 bn from INR 384.6  ILZSG expects zinc and lead to remain  We remain positive on Nalco with largely range-
bn at the end of 1QFY24. balanced/ marginally surplus globally. bound aluminum and alumina prices supported by
Plausible revival of Chinese domestic the global cost curve, integrated business model,
Our take consumption, Tara mine shutdown (~40% of and attractive dividend yield. Lower coal costs, aided
 Improved copper segment performance, better Boliden's metal concentrate output), Nyrstar by captive coal mining at Utkal block D (commenced
aluminum operations (higher downstream volume US zinc mine temporary closure, and Almina- in 1QFY24), could help offset the marginal softening
through the new 34 KT Silvassa extrusion facility Minas shutdown (~99 KT of zinc, 29 KT lead of aluminum prices. Ongoing capital expenditure
and an additional 350 KT expansion by in Portugal) indicate to some supply tightness. projects-5th stream alumina refinery, Pottangi bauxite
debottlenecking at the Utkal Alumina), lower coal mines, and commencement of captive coal mining
Recommendation - HOLD would support margins further.
costs, and improvement in Novelis' operations would
aid profitability FY25 onwards.  We roll over our earnings estimate factoring Recommendation - BUY
in the lower zinc price, higher lead price, and
Recommendation - BUY cost guidance leading to a TP of INR 288 at a  We maintain BUY rating, incorporate lower
 We maintain BUY rating and roll over our multiple of 6x 1HFY26E EV/EBITDA. We metal prices and roll over earnings estimate
earnings with a SoTP-based TP of INR 551 maintain HOLD rating as valuations are rich with a target price of INR 116 at a multiple of
(earlier INR 526) at an implied 1H FY26E EV/ and dividend prospects stand affected. 5x 1HFY26E EV/EBITDA.
EBITDA multiple of 6.0x (earlier 5.9x FY25E).

17 November 2023
Varatharajan S., +91 22 6911 3425, varatharajan.s@antiquelimited.com

Oil & Gas - Positive Kishan Mundhra, +91 22 6911 3426, kishan.mundhra@antiquelimited.com
OMCs – Poor marketing margins during the quarter were offset by strong Quarterly financials and variance
refining and were masked by high inventory gains. Combined sequential
EBITDA for 2Q declined marginally but remained elevated at INR 423 bn Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
(-11% QoQ) while PAT was INR 265 bn (-13% QoQ). Reported GRMs were Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
extremely strong at ~USD 13–18/bbl, supported by inventory gains. Russian BPCL 1,029,857 (10.3) (20.7) 129,083 800.1 5.6 85,015 (2895.9) 7.7
crude blending continues to benefit Indian refiners. While GRMs have GAIL 318,226 (17.3) (10.2) 34,913 97.8 31.1 24,050 56.5 25.9
softened recently, marketing margins have picked up significantly and hence
GUJGA 38,454 (3.3) 1.8 4,955 (22.9) 58.8 2,967 (26.5) 95.3
overall profitability is strong.
HPCL 957,011 (11.7) (26.3) 82,170 (648.7) 6.3 51,183 (335.7) 10.8
Upstream - Upstream profitability was on expected lines, however, the IGL 34,585 (2.7) 6.2 6,569 24.7 5.9 5,348 28.7 28.0
headline number for OINL was hit on lines similar to ONGC as the company
IOCL 1,797,398 (13.4) (20.9) 212,172 938.6 (9.2) 129,684 (4870.6) (12.1)
has now started recognizing the disputed GST on Royalty under its Income
Statement instead of keeping it as a receivable from the government. Realization MAHGL 15,709 0.6 (1.8) 4,789 90.2 (1.0) 3,385 107.8 2.2
remained broadly constant at USD 75/bbl for oil and USD 6.50/mmbtu for Oil India 59,133 2.4 13.5 24,906 25.5 7.3 20,919 21.6 31.7
gas. OINL’s production increased 2% YoY while ONGC’s declined 2%. ONGC 351,630 (8.2) (1.4) 183,599 (2.4) 3.9 102,165 (20.3) 10.0
CGD sector – The sector remains a mixed bag with volumes trailing but PLNG 125,320 (21.6) 9.8 12,148 3.6 6.6 8,182 9.9 17.1
margins continuing to remain strong. For CNG volume, GGas continued to RIL 2,349,560 0.9 3.5 409680 31.2 (1.3) 173,940 27.4 (1.5)
report decent YoY growth at 13% while IGL and MGL lagged at 2.6%/ 1.6% Total 7,076,883 (10.7) (10.9) 1,104,985 94.5 3.6 606,838 191.2 5.2
respectively. On a four-year basis (i.e. starting from Covid-19), CNG growth Source: Company, Antique
is 7% CAGR with individual growth for GGas/ IGL/ MAHGL being 15%/
6%/ 4% respectively. All the companies acknowledged the risk to CNG Utilities – GAIL had a stellar quarter driven by tailwinds in terms of elevated
volume growth as the focus on EV takes center stage, particularly after the power demand and a favorable commodity environment. Petronet had a
recent Delhi EV policy. Margins remained strong for all participants on account broadly stable quarter. The outlook remains decent for both utility companies.
of stable APM pricing and availability of cheap HPHT gas for remaining
volumes. Gujarat Gas continues to face challenges from alternate fuels. Top Picks: HPCL, Oil India and MAHGL
GRM & marketing margins Brent oil & APM price
30 120 10
(USD/bbl) (USD/mmbtu)
100 8
20
80
6
10 60
4
40
0
20 2
-10 0 0
Mar-19
Jun-19
Mar-20
Jun-20
Mar-21
Jun-21
Mar-22
Jun-22
Mar-23
Jun-23
Sep-19
Dec-19
Sep-20
Dec-20
Sep-21
Dec-21
Sep-22
Dec-22
Sep-23
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Sep-19
Dec-19
Sep-20
Dec-20
Sep-21
Dec-21
Sep-22
Dec-22
Sep-23
Singapore GRM (USD/bbl) Petrol/diesel margins (INR/ltr, RHS) Oil prices APM prices (RHS)

17 November 2023
Varatharajan S., +91 22 6911 3425, varatharajan.s@antiquelimited.com

Oil & Gas Kishan Mundhra, +91 22 6911 3426, kishan.mundhra@antiquelimited.com
 Good Bharat Petroleum Corp

Refining going strong
 Good
Strong show
GAIL
 In line Gujarat Gas
Margins drive beat; volumes in line
 BPCL’s EBITDA at INR 129 bn (INR 158 bn  GAIL’s EBITDA was at INR 34.9 bn (+43%  GujGas’ EBITDA of INR 4.9 bn (+28% QoQ, -
QoQ, INR 14 bn YoY) was marginally higher QoQ, +98% YoY) vs. our estimate of INR 27 23% YoY) was better than the consensus
than our estimate of INR 122 bn, but bn and consensus of INR 25 bn. PAT was INR estimate of INR 3.8 bn and our estimate of
significantly beat the consensus estimate of INR 24 bn (+70% QoQ, +57% YoY). Natural gas INR 3.2 bn. PAT was at INR 3.0 bn (+38%
107 bn. Reported PAT at INR 85 bn (INR 106 transmission volume at 120 mmscmd (+3.4% QoQ, -26% YoY) vs. consensus of INR 2.1 bn
bn QoQ, INR -3 bn YoY). Total GRM at USD QoQ, +11.73% YoY) benefitted due to higher and our estimate of INR 1.5 bn. Total volume
18.5/bbl was very strong. A throughput of consumption from gas power plants due to high at 9.32 mmscmd (+1% QoQ, +22% YoY) was
9.4 mmt was hit by planned maintenance. peak demand. muted and in line with our estimate. The beat
Our take Our take was driven by better procurement of spot LNG
 The beat was driven by stronger than expected cargo. EBITDA/scm was INR 5.8 (vs. INR 4.63
 The beat was on account of better than QoQ, INR 9.16 YoY) and higher than the
performance in the marketing and ‘others’
estimated GRMs. Refining remains robust and company’s target range of INR 4.5–5.5/scm.
segments. The company has also given strong
Russian crude discounts continue to support
guidance of INR 40 bn for FY25 marketing Our take
GRMs. LPG, though likely to slip into losses in EBITDA and more than 130 mmscmd of
November, remains a strong profit contributor transmission volume. Despite the marketing  With propane prices remaining competitive
due to healthy margins with the huge surplus tailwinds, the company’s INR 40 bn guidance and the company refraining from entering into
in 1HFY24 compensating for any loss in the is in line with our estimates, though the 130 long-term contracts, we now expect an
near term. mmscmd of gas transmission volume looks a bit industrial volume recovery in 2HCY24 when
Recommendation - BUY aggressive to us. The petrochemicals segment spot LNG prices should come down due to huge
continues to face challenges. LNG capacity addition.
 The stock remains attractively valued and is
offering a dividend yield of 6.6%. Maintain Recommendation - BUY Recommendation - BUY
BUY rating with a TP of INR 560 based on a  GAIL’s pipeline business, from which GAIL  We reiterate BUY with a target price of INR
multiple of 5.0x 1HFY26 EV/EBITDA. derives the most value, has turned around 539 (INR 570 earlier), as we roll forward our
successfully over the last year and the valuation to 1HFY26.
marketing segment continues to witness a
favorable commodity price environment. We
remain positive on the company and maintain
BUY with a target price of INR 133 (earlier
INR 130), as we roll forward to 1HFY26.
17 November 2023
Monish Shah, +91 22 6911 3412, monish.shah@antiquelimited.com

Pharmaceuticals - Neutral Pranav Chawla, +91 22 6911 3417, pranav.chawla@antiquelimited.com
Cost optimization leads to margin improvement
Quarterly financials and variance
During 2QFY24, our coverage universe reported 3% sequential revenue
growth with EBITDA/ PAT growing at 6%/ 9% respectively. US generics Revenue Growth Variance EBITDA Growth Variance APAT Growth Variance
reported a 3% sequential decline due to quarterly fluctuations in gRevlimid Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
sales, offset by new launches. We assume the core US business (ex-gRevlimid) ALPM 15,949 8.1 (0.8) 2,083 (10.5) (32.3) 1,366 2.4 (26.6)
would have grown marginally led by new launches including gSpiriva by ALKEM 34,402 11.7 1.1 7,467 64.5 21.1 6,755 104.2 42.9
LPC. Among the large caps, LPC and ALPM reported 18% and 13% QoQ CIPLA 66,782 14.6 4.6 17,338 33.1 18.7 11,309 43.4 15.2
revenue growth respectively in the US region. The domestic business growth CONCORDB 2,623 65.1 7.0 1,192 214.3 12.5 810 113.7 1.9
came in at 4% QoQ due to a delay in the flu season, with healthier growth DLPL 6,013 12.6 5.0 1,778 23.6 13.5 1,093 52.4 20.7
expected in 3QFY24. Notably, within our coverage universe, ALKEM and DRRD 68,802 9.1 0.3 19,916 5.1 (5.4) 12,459 11.8 (10.9)
ALPM reported 22% and 10% sequential growth in their domestic ICP 5,453 0.7 (9.9) 642 101.3 (34.1) 379 138.0 (40.9)
operations led by acute business. JBCP 8,817 9.0 (3.1) 2,435 32.3 9.3 1,506 36.1 13.8
On the API front, we continue to see pricing pressure; however, there is an LAURUS 12,245 (22.3) (6.9) 1,879 (58.1) (25.3) 370 (84.1) (57.9)
improvement in demand due to inventory normalization. Management LPC 50,386 21.5 5.1 9,178 102.6 9.3 4,897 277.5 13.7
commentary highlighted the improving demand scenario coupled with softer MANKIND 27,081 11.6 0.6 6,826 13.9 (4.1) 5,010 17.3 (3.8)
RM and KSM prices in 2HFY24. METROHL 3,085 2.7 (0.5) 748 (5.3) (10.9) 355 (12.1) (20.8)
SOLARA 4,252 25.7 9.3 376 36.5 (3.2) -119 19.9 nm
Our universe's EBITDA margin improved by ~70 bps to ~24% on a sequential TRP 26,600 16.1 0.1 8,250 21.5 0.9 3,860 23.7 (0.8)
basis, assisted by RM cost softening, cost optimization, and favorable ZYDUSLIF 43,288 4.7 (15.5) 10,239 25.6 (29.1) 6,795 31.4 (32.9)
operating leverage. Total 375,778 10.7 (0.8) 90,347 22.4 (2.5) 56,843 38.0 (3.4)
Top Picks: Torrent Pharma, Mankind, Concord Source: Company, Antique
Revenue growth in 2QFY24 (% QoQ) EBITDA margin growth QoQ (bps)
16%
11%
11%
21%
342
409
255
236
859
840
172
124
154
9%
35%
7%
49
6%
5%
4%
3%
2%
-140
-110
-31
-19
-2%
-3%
ZYDUSLIF -564
ZYDUSLIF -16%
LPC
ALPM
DLPL
ICP
JBCP
LAURUS
METROHL
SOLARA
TRP
ALKEM
DRRD
MANKIND
CIPLA
CONCORDB
LPC
DLPL
ICP
JBCP
LAURUS
METROHL
TRP
MANKIND
ALPM
CIPLA
SOLARA
CONCORDB
DRRD
ALKEM

17 November 2023
Monish Shah, +91 22 6911 3412, monish.shah@antiquelimited.com

Pharmaceuticals Pranav Chawla, +91 22 6911 3417, pranav.chawla@antiquelimited.com
 Good
On a path to sustainable growth
Lupin
 Good Alkem
EBITDA Margin improvement unlikely to sustain
 Bad Zydus Lifesciences
Niche launches to offset competition risk in gAsacol HD
 LPC in 2Q reported revenue/ EBITDA/ PAT  ALKEM reported 16% revenue growth to INR  ZYDUSLIF in 2Q reported revenue/ EBITDA/ PAT
growth of 9%/ 41%/ 100% QoQ respectively 34.4bn along with 860 bps margin expansion decline of 16/ 32%/ 38% on QoQ basis
which was ahead of our estimates. The North to ~22% on sequential basis. The growth was respectively, much lower than our estimates. US
America business grew ~18% sequentially to driven by a strong 22% QoQ growth in the generics reported 25% sequential decline to USD
USD 213 mn majorly led by the launch of domestic business on the back of recovery in 225 mn due to no sales of gRevlimid and increased
gSpiriva. Domestic business grew 3% QoQ to acute therapies. Management highlighted competitive intensity in gTrokendi, partly offset by
INR 16.9 bn, impacted by LOE expiry. Other seeing continued demand in Oct'23 as well stable price erosion. India business also declined
markets also witnessed healthy double-digit and expected the trend extrapolate for 3Q. 8% QoQ with a sharp ~40% decline in consumer
growth. RM cost improvement, favorable Reduction in price erosion in the US and wellness due to seasonality while branded
business mix, and operating leverage led to a improvement in business mix led to 4% growth formulations grew 9%. Change in business and
margin of +18%. in export formulations. product mix, and negative operating leverage led
to ~460 bps margin contraction to 24.7%.
Our take Our take
Our take
 With niche limited competition product  Alkem reported significant improvement in
 ZYDUSLIF has been able to navigate challenges
launches lined up in the next 12-24 months, EBITDA margin, however, the improvement
LPC's US generics business can showcase a seems unsustainable as the company expects from competition and market share losses in its
positive surprise leading to margin a reduction in gross margin, increase in R&D key base business products, and at the same time
has been a beneficiary of timely approval and
improvement. We believe LPC's US franchise and other expenses in 2HFY24. With the India
launch of limited competition products. We believe
is likely to grow at a CAGR of ~15% over the business expected to grow at 11% CAGR over
the risk arising from competition in gAsacol HD
next three years, driven by gSpiriva, gPrezista, a two-year period, we expect margins to see
from 2HFY24 will be offset by the upcoming limited
and gMyrbetriq. On its base business products, gradual improvement towards 19% by FY26.
competition launches having an opportunity size
LPC has been able to gain market share for We also expect the US generics revenue to
of over ~USD 8 bn where ZYDUSLIF has strong
gAlbuterol. On the back of the expected revival see near double-digit growth in FY26 on a
positioning. With the India business expected to
in US generics and the earlier than anticipated muted FY25. We believe the current stock grow at ~10% CAGR, US generics at 4% CAGR
improvement in India formulations, we estimate price has largely priced in its current and (ex gRevlimid), and with complete repayment of
LPC's EBITDA margin at ~21% for FY25. forthcoming improvement in margins. debt, we expect ZYDUSLIF's core EPS to grow at
Recommendation - BUY Recommendation - BUY 8% on a two-year CAGR basis.
 We maintain BUY rating on the stock with a  We maintain BUY rating on the stock with a Recommendation - HOLD
target price of INR 1,401. revised target price of INR 3,962 on 22x  We continue to maintain HOLD rating on the
1HFY26 EPS. stock with a target price of INR 615.
17 November 2023

Retail - Neutral Priyanka Trivedi, +91 22 6911 3435, priyanka.trivedi@antiquelimited.com
Fashion retailers (except Trent) continue to witness moderation; jewelry Quarterly financials and variance
momentum sustained
Fashion retailers continued to witness demand moderation along with Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
pressure on margins due to EOSS and negative operating leverage. Trent Aditya Birla Fashion & Retail 32,265 4.9 (2.4) 3,234 (18.5) 5.8 (1,791) PL* N/A
continued to outperform with a revenue growth CAGR of 37% over four AvenueSupermarts 123,077 18.5 (0.0) 10,018 11.9 (1.7) 6,585 (9.9) (9.5)
years driven by the rapid scale-up of Zudio and healthy 10% LTL growth in Raymond 22,534 3.9 1.9 3,146 (6.1) (1.2) 1,828 8.5 7.1
fashion formats. ABFRL continued to deliver weak performance due to VedantFashion 2,179 (11.8) 3.8 927 (19.7) 2.2 490 (29.0) (1.7)
revenue growth moderation and significant margin contraction due to Shoppers Stop 10,252 1.7 0.7 1,598 (4.4) (3.9) 67 (66.7) (37.5)
negative operating leverage and continued investments in new businesses, Trent 28,907 59.4 3.3 4,609 72.3 43.4 2,897 55.9 36.1
which further spiked its debt levels. VMart's performance continued to
Titan Co Ltd 116,600 33.6 18.9 13,550 9.7 17.6 9,400 9.7 14.4
remain muted with standalone business growing at 8% CAGR over four
V-Mart Retail 5,494 8.5 0.1 7 (98.7) (54.7) (641) (466.6) N/A
years as against store expansion at 10% CAGR. Further, investments in
Kewal Kiran Clothing Limited 2,625 16.0 0.8 617 23.4 9.2 498 27.4 4.8
LimeRoad and price corrections resulting from greater focus on lower price
Retail Total 343,933 22.1 5.9 37,706 7.3 9.9 19,332 (7.8) 6.6
points have put profitability under pressure. Kewal Kiran delivered a healthy
Source: Company, Antique; *PL: Profit to Loss
performance with 16% YoY with a healthy volume growth of 19%. Vedant
Fashions delivered weak performance due to lower wedding dates during delivered strong performance with strong traction witnessed in its jewelry
the quarter. Grocery retailers like DMart clocked 19% growth on a four- and watches division. Jewelry/ watches/ eyecare revenue grew at 19%/
year CAGR basis driven by staples/ FMCG business and store expansion. 11%/5% on a four-year CAGR basis.
General merchandise sales continue to remain under pressure. Titan Top Picks: Kewal Kiran Clothing and Titan
Four-year CAGR revenue growth Gross margin growth (in bps YoY) Company-wise net store addition
37% 200 124 46
98
27% 100 27
(52) (51) 22
19% - 17
14% 12%
DMART
ABFRL
TRENT
VMART
Manyavar
KKCL
STOP
TTAN
RW
(100) 9 7
6% 4% 5% 5 6 4
5% 5%
(200)
(171) (169)
DMart
Pantaloons
Westside
ABFRL-Lifestyle
RW
Zudio
(standalone)
Manyavar
KKCL
(230)
DMart
Pantaloons
TRENT
Manyavar
KKCL
STOP
Titan
Madura
Stanalone
RW
ABFRL-
ABFRL
(300)
VMART
VMART
brands
(400)
(325)
(500) (417)

17 November 2023

Retail Priyanka Trivedi, +91 22 6911 3435, priyanka.trivedi@antiquelimited.com
 Good
Above expectation
Kewal Kiran Clothing
 Good
Above Expectations
Titan  Bad
In-line expectations
ABFRL
 KEKC posted a healthy performance during the  TTAN's performance was better than our as  ABFRL delivered a muted performance in
quarter despite the current challenging well as consensus estimates. Jewelry sales (ex. 2QFY24 due to negative operating leverage
environment. Revenue grew at 16% YoY with bullion) growth of 19% YoY with the EBIT and investments in TMRW and the ethnic
volume growth of 19% YoY. Growth was majorly margin at 14.1% is quite comforting. The watch business. Revenue growth continued to remain
driven across categories, except shirts. Retail division also displayed a resilient performance muted due to weak demand with lifestyle
channel contribution continued to increase with 32% YoY revenue growth. brands and Pantaloons witnessing LTL growth
of (-12%) and (-15%) respectively. Debt levels
driven by a higher focus on the exclusive brand Our take increased significantly to INR 48 bn as against
outlets (EBO) channel. Store expansion
 Management highlighted that jewelry demand INR 23 bn in Jun'23. Even with the GIC
momentum continues to be strong with 22 new warrant money, debt is expected to be at INR
Killer EBO addition during the quarter, taking during Navratri was healthy. Management
28-29 bn at the end of the year.
the total to 470 EBOs by Sept'23. The company reiterated its guidance of maintaining 12%-
13% EBIT margin in the jewelry segment. Our take
intends to add 60-80 EBOs during the year.
Overall, we remain optimistic about the  In terms of outlook, management highlighted
Our take company over the long term. We understand that the demand environment has been flat
 We remain optimistic about the company's that structurally it is moving in the right direction and even negative on LTL basis in certain
ability to grow at 18%-20% CAGR over the of hitting jewelry sales of INR 600 bn by FY27 geographies due to value fashion segments
next two years. and gaining market share across geographies being under pressure. However, a K-shaped
(including the South). recovery has been witnessed with the premium
Recommendation - BUY segment witnessing improved sentiment. The
 Factoring performance, we increase our EPS
Recommendation - BUY company remains optimistic about wedding and
estimates for FY24E/ 25E by 4%/ 3%  Factoring in the performance, we increase our winter wear demand.
respectively. We introduce and roll forward EPS estimates for FY24/ 25E by 2%/ 3% Recommendation - HOLD
our target price to 1HFY26, arriving at a respectively. We introduce and roll over our
 Factoring in the 1HFY24 performance, we cut
revised target price of INR 963 (valuing at estimates to 1HFY26, arriving at a revised our FY24/ 25 EBITDA estimates by 14%/ 10%
30x 1HFY26 PER) . We maintain BUY target price of INR 3,653 (valuing at 60x respectively. We introduce and roll forward
recommendation on the stock. 1HFY26 PER) . We upgrade our our estimates to 1HFY26, arriving at a revised
recommendation to BUY reckoning the target price of INR 232 (SoTP-based valuation).
consistent healthy performances across We maintain HOLD recommendation on the
businesses. stock.

17 November 2023
Real Estate - Positive Biplab Debbarma, +91 22 6911 3418, biplab.debbarma@antiquelimited.com
Good quarter; all eyes on response to launches bunched up in 2HFY24 Quarterly financials and variance
Given 2Q is typically weaker in terms of sales, sales booking figures for the Sales/ Actuals
companies under our coverage are encouraging. Overall, companies under Booking 2QFY24 2QFY24E 1QFY24 4QFY23 3QFY23 2QFY23 1QFY23 YoY % QoQ%
our coverage posted strong growth in sales booking. These companies did
Arvind Smartspaces 3,690 3,750 1,350 2,440 2,503 1,889 1,183 95 173
sales booking of INR 239 bn (50%/ 52% QoQ/ YoY) in 2QFY24 and in
Brigade Enterprise 12,491 10,500 9,960 14,885 10,097 7,949 8,139 57 25
1HFY24 did INR 399 bn (32% YoY). Companies with launches at new
locations (GPL, PEPL, CENT, KPDL, and ARVSMART) witnessed strong responses Century Textiles 7,080 7,000 2,070 8,060 3,830 5,610 4,340 26 242
to their launches. These companies (excluding Oberoi Realty) have already DLF 22,280 20,000 20,400 84,580 25,070 20,520 20,400 9 9
achieved on an aggregate 51% of their sales booking guidance for FY24. A Godrej Properties 50,340 35,000 22,540 40,510 32,520 24,090 25,200 109 123
significant launch pipeline is bunched up in 2HFY24 and most of the companies Kolte Patil 6,320 6,000 7,010 7,040 7,160 3,670 4,447 72 (10)
are confident of exceeding their sales booking guidance for FY24. Overall, Macrotech Developers 35,300 35,300 33,500 30,250 30,400 31,490 28,140 12 5
the net debt of these companies on an aggregate has gone up by INR 32 bn
Oberoi Realty 9,650 7,000 4,763 6,732 6,307 11,557 7,611 (17) 103
in 1HFY24, primarily due to a rise in the net debt of Godrej Properties (INR
25 bn), Prestige Estates (INR 14 bn), Century Textiles (INR 12 bn), and Prestige Estates 70,920 60,000 39,147 38,888 25,190 35,110 30,121 102 81
Brigade Enterprises (INR 4 bn); the others saw a reduction in net debt. Sobha 17,240 17,240 14,647 14,634 14,247 11,642 11,455 48 18
Sunteck Realty 3,950 3,500 3,860 5,370 3,960 3,370 3,330 17 2
Office leasing showing resilience; retail and hospitality continue to remain
strong Total 2,39,261 2,05,290 1,59,247 2,53,389 1,61,284 1,56,897 1,44,366 52 50
Despite the challenging leasing environment, office leasing is resilient and Source: Company, Antique
Brigade Enterprises and DLF witnessed an uptick in leasing. GCC remains
one of the key drivers of leasing traction in the non-SEZ space. Retail continues
Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
to remain on a steady footing with steady consumption growth. The hospitality
segment continues to perform with elevated occupancy and ARR. Nexus Select Trust 5,331 na 7 3,492 na (3) 2,515 0 26
Phoenix Mills 8,750 34 12 5,138 35 10 3,102 67 36
Outlook
Demand for housing remains strong due to increased consumer aspirations
for home ownership. A decrease in interest rates would amplify this
momentum. Progress of the DESH Bill (aimed at simplifying SEZ area de-
notification) will be a significant aspect to observe in the commercial office
segment. We maintain a positive outlook on retail segment consumption
growth of over >10%. While valuations of many real estate companies are
currently at elevated levels, we expect most of the companies to end FY24
with record sales booking numbers.
Top Picks: Century Textiles & Industries, DLF and Kolte-Patil
17 November 2023
Real Estate Biplab Debbarma, +91 22 6911 3418, biplab.debbarma@antiquelimited.com
 Good Century Textiles

Real estate on a strong growth path; a blip in paper
 Good DLF
Robust cash flow prospects; outlook remains strong
 Good
Robust outlook
Kolte-Patil Developers
 CENT’s 2QFY24 highlights include the  DLF’s 2QFY24 key highlights include DevCo  KPDL reported robust performance in 2QFY24,
successful launch of Birla Trimaya phase 1 in turning into a net cash positive company with driven by strong sales in Life Republic and a
Bengaluru, selling nearly 96% of inventory the highest operating cash flow. Sales booking healthy operating cash flow of INR 9.5 bn. In
valued at INR 4.67 bn. Despite a dip in paper reached INR 22.3 bn, and a strong 2HFY24 1HFY24, pre-sales amounted to INR 13.33
business profitability, CENT is expected to launch pipeline of INR 197.0 bn is expected, bn, with 55% from new launches. Life Republic
exceed its FY24 sales guidance of INR 30 bn including projects in DLF 5 sector and sector saw significant growth, contributing 68% of
and aims for INR 50 bn in FY25, backed by 77 in Gurugram. DCCDL, the rental arm, total volume. Project launches and business
strong market demand, Trimaya’s response, and achieved a rental income of INR 10.7 bn. With development continue to remain on track. Net
a robust 2HFY24 launch pipeline of INR 65.0 a cash surplus of INR 57 bn projected over 3– debt remains low at INR 490 mn, with a debt-
bn. Delivery of three projects in 2HFY24 is 4 years, DLF aims to easily surpass its FY24 to-equity ratio of 0.05x.
expected to contribute to revenue recognition. sales booking guidance of INR 130 bn, given
Gurugram’s strong real estate momentum. Our take
Our take  We continue to remain optimistic about KPDL
Our take
 Management’s sharp focus on scaling the real driven by (a) Its enhanced focus on monetizing
estate business while utilizing surplus cash  We continue to remain positive on DLF given its township project—Life Republic, (b) Robust
flows from the steady businesses bodes well (a) The strong momentum in Gurugram with balance sheet position and sustained internal
for the company. We remain structurally inventory overhang of six months, (b) Strong cash accruals, and (c) Increasing footprint in
positive on CENT’s growth prospect in the launch pipeline in 2HFY24, (c) Robust cash flow MMR.
medium to long term. generation aiding balance sheet deleveraging
and growth, (d) Huge monetizable land bank Recommendation - BUY
Recommendation - BUY (at historical costs) in a housing upcycle—an  KPDL is one of our top picks and we reiterate
 CENT is one of our top picks and we reiterate important competitive advantage, (e) Excellent our positive view on the stock and maintain
BUY on the stock with a revised TP of INR track record of timely project delivery, and (f) BUY with a revised target price of INR 588
1,319 (earlier INR 1,222) to factor in an Re-entry into the MMR market. (earlier INR 532) valuing the company on SoTP
increase in the selling rate of Niyaara and Recommendation - BUY basis revising upward the selling price and
improved sales velocity across markets. reducing the timeline of the balance area of
 DLF continues to remain our top pick since
Life Republic.
initiation; we maintain BUY with a revised TP
of INR 687 as we factor in the strong growth
outlook on the residential segment.

17 November 2023
Textiles - Neutral Biplab Debbarma, +91 22 6911 3418, biplab.debbarma@antiquelimited.com
Gradual recovery; optimistic 2H Quarterly financials and variance

 All the 4Cs (cotton, container, coal, and customer) are showing signs of Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
stability. Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
 Cotton prices have stabilized at around INR 61,000/candy. Arvind Ltd 19,200 (11.5) (6.8) 2,100 4.1 1.9 800 (7.9) (4.8)
 Export markets continue to remain under pressure on account of KPR Mills 15,100 23.8 4.1 3,000 (5.5) (6.0) 2,000 (1.6) (1.5)
geopolitical issues and the global economic slowdown. However, order Welspun India 25,091 18.7 11.5 3,580 178.6 2.7 1,967 2,160.9 7.4
flow in home textiles from the US witnessed an uptick due to festive Textile Total 59,391 7.9 3.1 8,680 34.0 (0.7) 4,767 59.5 1.4
demand. Source: Company, Antique
 We believe the worst is behind for the textile segment and expect volume
to see a revival in 2HFY24.
Outlook
Despite the ongoing challenges in the textile sector in the short term, we
anticipate that demand will gradually return to normalcy in the second half
of FY24. Within the textile sector, we hold a positive outlook for the garment
and advanced textile segment in the long run. Furthermore, with stable
input costs and the potential for enhanced operating leverage as demand
revitalizes, we anticipate the ongoing margin improvement to persist. A
significant aspect to monitor for the sector is the state of the US and European
economies.
Top pick: Welspun India and Arvind Ltd.

17 November 2023
Textiles Biplab Debbarma, +91 22 6911 3418, biplab.debbarma@antiquelimited.com
 Good Welspun India

Strong performance; outlook positive
 Good
Decent quarter; AMD continues to shine
Arvind
 ARVIND’s 2QFY24 highlight is the improved

 WLSI’s 2QFY24 highlights feature record-
breaking quarterly revenue of INR 25.1 bn, textile volumes across all segments despite the
marking a 15% and 19% increase QoQ and challenges in the export business. Textile revenue
YoY, respectively. The surge is attributed to an stood at INR 14.6 bn, showing a 2.6% QoQ
increase in US order flows driven by festive increase but a 17% YoY decline due to price
demand and the company’s substantial home deflation. The AMD segment exhibited strong
textiles market share in the US. Both home growth, contributing 18% to operating revenue
with the margin expanding to 15.7% (20 bps/
textiles and flooring businesses experienced
340 bps QoQ/ YoY). Management anticipates
robust growth at 17% and 52% YoY. With
continued robust growth in AMD, targeting a
major input costs stabilized, margin during the
20%–25% CAGR. Textile performance is
quarter remained at 14.3% (5 bps/ 819 bps expected to strengthen in 2H compared to 1H,
QoQ/ YoY). Net debt decreased sequentially with denim and garment segments recovering.
to INR 15.7 bn, with an expectation of further
reduction to INR 10.0 bn in FY24. Our take
Our take  We believe the worst is behind for the textile

segment and expect volume to see revival in
 We expect demand in traditional home textiles 2HFY24. The outlook on AMD and garment
to remain strong with growth to continue in segments continues to be optimistic. With AMD
the floor, advanced textile, and domestic becoming a significant chunk of the business
businesses. All the 4Cs (cotton, container, coal, and it continuing to show growth of >20%
and customer) are showing signs of stability. In CAGR and margin of >15%.
addition, we expect the flooring business Recommendation - BUY
momentum to continue going forward.
 We value the AMD business separately at a
Recommendation - BUY higher EV/EBITDA multiple of 10x 1HFY26E,
 WLSI is our top pick and we reiterate our while valuing the textile segment at 5.0x EV/
positive view on the stock and maintain BUY EBITDA of 1HFY26E, translating to a blended
with a revised target price of INR 172 P/E multiple of 10.43x of 1HFY26E. We
(previously INR 129), valuing it at a PE multiple maintain BUY with a revised target price of
of 15x on 1HFY26 basis. INR 249 (previously INR 145).
17 November 2023

Utilities - Positive Pranav Furia, +91 22 6911 3467, pranav.furia@antiquelimited.com
Overall power demand was at 436 BU, up 13% YoY for 2QFY24 for the year Quarterly financials and variance
due to soaring temperatures. Peak demand during 2QFY24 reached record
levels of 239 GW. Merchant volume during the quarter was up by 26% and Revenue Growth Variance EBITDA Growth Variance PAT Growth Variance
year to date was up 20%, and power tariff for the quarter was INR 5.9 per Company (INR mn) YoY (%) (%) (INR mn) YoY (%) (%) (INR mn) YoY (%) (%)
Kw on an average. This has given a nudge to exchange volumes of IEX (up CESC 43,520 11.22 5.82 6,460 31.8 (7.6) 3,630 13.8 10.3
15% YoY). The country added 3.5 GW of capacity in 2QFY24. COAL 327,764 9.85 (0.14) 81,370 11.8 10.2 68,135 12.7 18.6
After focusing on coal in FY23, the sector is now focused on renewable IEX 1,085 14.01 (0.86) 920 16.5 (3.5) 827 18.1 8.0
energy, especially pumped hydro projects as a long-term solution to shift to JSW 32,594 36.52 9.22 18,804 111.4 57.5 8,568 87.7 91.4
clean energy. NTPC has announced plans to add 14 GW in pumped hydro
projects in the coming years. However, less than an average monsoon NHPC 29,313 (11.56) (1.74) 17,574 (19.7) (12.1) 16,933 0.6 13.5
impacted NHPC, SJVN, and JSW Energy’s generations during the current NTPC 408,753 (0.34) (10.70) 105,375 15.4 0.1 38,850 16.6 (0.1)
quarter. JSW Energy continued to benefit from the incorporation Mytrah PTCIN 45,697 (0.71) (6.95) 1,121 22.7 20.2 898 43.7 30.7
assets; it also tapped into the spot market to benefit from elevated spot prices. PWGR 104,194 (2.22) (7.23) 92,072 2.8 (3.6) 37,873 3.7 2.2
Coal India recorded production growth of 13% YoY to 157 mnt and offtake
SJVN 8,784 (0.01) (6.29) 7,062 (0.9) 0.5 4,385 (1.3) 4.0
growth of 12% YoY to 173 mnt and posted strong financials. While on the
regulatory side, the proposed market coupling may be negative for IEX. PTC TPW 69,609 3.85 (5.94) 12,214 4.9 (2.9) 5,425 12.1 4.7
India reported flat volume growth for the quarter but benefited from the TPWR 157,380 12.17 0.78 30,910 74.0 23.7 10,174 8.8 8.6
dividend received from subsidiaries. Discoms health is improving with Tata Total 1,228,693 4.63 (4.66) 373,881 14.1 3.9 195,698 11.9 11.0
Power, Torrent Power, and CESC reporting improved numbers for distribution
operations with AT&C losses starting to reduce for many subsidiaries.
Top picks: Coal India, NTPC, NHPC
40 120 100
74.0
43.7
14.01
100
12.17
30 80
11.22
9.85
18.1
16.6
13.8
80
12.7
12.1
31.8
60
36.52
22.7
20
87.7
8.8
16.5
60 15.4
3.85
3.7
11.8
40
0.6
111.4
10
4.9
40
2.8
20
20
- -
-
(0.34)
(0.71)
(2.22)
(0.01)
(10) (20)
SJVN (1.3)
(20)
(0.9)
NHPC (11.56)
(20) (40)
NHPC (19.7)
CESC
NHPC
PTCIN
TPWR
IEX
TPW
PWGR
COAL
JSW
NTPC
SJVN
TPW
CESC
PTCIN
TPWR
IEX
COAL
PWGR
CESC
PTCIN
SJVN
TPW
IEX
PWGR
TPWR
COAL
NTPC
JSW
NTPC
JSW

17 November 2023

Utilities Pranav Furia, +91 22 6911 3467, pranav.furia@antiquelimited.com
 Good
Remains on the guided path!
JSW Energy
 JSW reported a consolidated EBITDA of INR 19

 In-line
Bilateral trades firming up!
 At 26x 1HFY26E annualized, there is an
IEX
 Good
Continuing strong performance!
Coal India
 COAL’s 2Q results are a beat against

bn, up 111% annually. The core EBITDA was implied perpetual EPS CAGR of 11%. This is a expectations. They are due to (a) The e-auction
INR 11 bn, plus new RE and Mytrah contributed big ask, especially when MoP pushes for a premium of 84% of FSA prices; (b) The
INR 6.3 bn. Merchant power contributed INR market coupling operator. The quarterly results stabilizing wage outgo of INR 120 bn a
showed a growth of 14%/ 16%/ 8% at revenue quarter; and (c) A strong cash position of INR
1.9 bn and hydro INR 1.7 bn. Revenue and 370 bn in books supporting other income.
EBITDA were up 37% and 88% each. / EBITDA/ PAT level. Volume growth was 15%.
Our take Our take
Our take
 Coal India seems to be on track to target 10%
 Excluding the seasonality of hydro, the variable  Instead of market coupling, IEX keeps advocating
off-take growth in FY24E. COAL sold 361 MT
component from short-term and regulatory for gross bidding. For days with higher RE and in 1HFY24, up 9% YoY. COAL posted revenue
benefits from the existing 6.7 GW portfolio, lesser thermal RTC power in the system, the of INR 327 bn in 2QFY24, up 10% YoY.
there is a case for annual EBITDA of INR 9 bn/ scope for cheap power looks to be DIFFICULT. Admittedly, e-auction premiums have narrowed
GW. Thereby, with 10 GW expected to be Gross bidding, is basically optimization by down to INR 2,838/ton as compared to INR
DISCOMs. And this concept is relevant when 3,741/ton in the previous quarter. Thereby,
operational before FY26E, INR 90 bn EBITDA
prices are competitive in the range of INR 3.5- the average realization was INR 1,773/ton,
is clearly on the cards. In 2QFY24, JSW locked 4/unit. But since the last two years spot prices down 1% QoQ. As we have stated earlier, in
in short-term sales at INR 8.1/kWh—as against have been hovering around INR 5/unit and at FY24E COAL eyes 780 MT in production/ off-
the average spot market tariff of INR 5.9/kWh. levels that are not a significant opportunity for take, which is up 77 MT over FY23. COAL has
Structurally, RE addition through solar addresses gross bidding. In 2QFY24, bilateral volume begun a fresh round of coal auctions under
supply only in the morning hours. As India’s trades grew by 25% YoY vs. IEX’s 15%. IEX’s the SHAKTI B (viii-a) scheme for private power
base and peak demand grows, non-solar hours management reiterated that the shortage of producers who do not have a power purchase
will see bouts of higher spot prices, hence the power in the system can push prices higher. For agreement. The offering comprises 13.09 MT
windfall gains are here for the long haul. instance, from October 5 to October 16, India’s to be auctioned between 6th October and
power demand was very high. And November-23. COAL estimates a capex of INR
Recommendation - BUY 800 bn over the next five years while planning
corresponding supply was limited, restricting to achieve its 1 btpa+ target.
 The path ahead for strategy 2.0 is clear: spot prices to a regulatory cap of INR 10/unit.
backward integration to lower input costs, In the event, exchanges continue to lose market Recommendation - BUY
locked-in sites for lower capex/MW, and the share to bilateral trades.  On a conservative volume/ pricing estimate,
first-mover advantage in energy storage. We we expect the company to clock 9%/ 12%
are including PVGO as the company is about Recommendation - SELL
CAGR in revenue/ EBITDA by FY22–26E (our
to unlock the platform value for green assets  Coupling regulations, which could be on the base year is FY22—as FY23 was a windfall
through strategic stake sale. Including PVGO cards, will stabilize the market share of year for coal producers). Using DCF, we value
of new RE assets and 2 GWh of PSP, we ascribe exchanges. The big structural volume growth COAL at INR 377/share (up by 11% from the
a revised SoTP target of INR 488 and drivers are missing. We retain SELL with a TP earlier TP INR 340) and retain BUY
recommend BUY. of INR 102 (22x 1HFY26 EPS). recommendation.
17 November 2023
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2QFY24 Results Recap - Good, Bad, Ugly - 231117

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2QFY24 Results Recap - Good, Bad, Ugly - 231117

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2QFY24 results recap - The good, the bad and the ugly

Strong quarter, but on expected lines!

Dhirendra Tiwari Research Team

Antique Stock Broking Limited 2

Antique Stock Broking Limited 3

Antique Stock Broking Limited 4

Antique Stock Broking Limited 5

Nifty 50 reported strong earnings growth

Core operating earnings grew by ~15% YoY

Antique Stock Broking Limited 6

Antique coverage surprised positively

Sales EBITDA PAT

Antique Stock Broking Limited 7

Management commentary suggest moderation in global growth...

Company Management commentary

Antique Stock Broking Limited 8

... Buoyant investment activity...

Company Management commentary

Antique Stock Broking Limited 9

... Early signs of rural recovery...

Company Management commentary

Antique Stock Broking Limited 10

... With good start to festive demand

Company Management commentary

Antique Stock Broking Limited 11

Nifty earnings to grow at ~16.1% CAGR over FY23-FY25

400 Industrials 20.6 33.4 31.4

IT Services 6.7 3.5 14.1

200 -10 Materials (52.0) 15.5 7.6

EPS contribution by sectors (FY23-24) EPS contribution by sectors (FY23-25)

Source: Bloomberg, Antique Source: Bloomberg, Antique

Antique Stock Broking Limited 12

Indian equities trading at mean level...

Source: Bloomberg, Antique Source: Bloomberg, Antique

Antique Stock Broking Limited 13

...Along with improving macros, given easing crude oil prices...

…and expected moderation in global oil demand

Antique Stock Broking Limited 14

...with falling bond yields and dollar index

US 10 year yield MSCI EM Index Dollar index

Antique Stock Broking Limited 15

...strong domestic SIP flows and receding FPI selling pressure...

...Along with FPI selling intensity... ...receding

FPI flows in India ($ mn) - 7 Days SMA

Antique Stock Broking Limited 16

...Chhattisgarh... ...and Telangana as per opinion polls

Antique Stock Broking Limited 17

...may not be a good barometer of the outcome in Union election...

Antique Stock Broking Limited 18

5% Rahul Gandhi 5% Rahul Gandhi

Arvind Kejriwal Arvind Kejriwal

Yogi Adityanath 19% Yogi Adityanath

Source: CVoter Survey Source: CVoter Survey

Antique Stock Broking Limited 19

Antique Stock Broking Limited 20

Varun Baxi, +91 72890 58502, varun.baxi@antiquelimited.com

Margin improvement drives earnings Quarterly financials and variance

Sep-22 Jun-23 Sep-23 Sep-22 Jun-23 Sep-23

Antique Stock Broking Limited 21

Varun Baxi, +91 72890 58502, varun.baxi@antiquelimited.com

 Good Ashok Leyland

Antique Stock Broking Limited 23

Antique Stock Broking Limited 24

Source: Company, Antique; Source: Company, Antique;