06april2023 India Daily

India Daily
April 06, 2023 NIFTY-50 [Apr 05]: 17,557
Contents
Special Reports
Strategy
Strategy: March 2023 quarter earnings preview
Daily Alerts
Sector Alerts
Automobiles & Components: Favorable mix and RM tailwinds to aid profitability
Banks/ Diversified Financials: Strong 4Q; walking toward multiple uncertainties
Construction Materials: Cement - 4QFY23 preview
Consumer Staples: Staples resilient, weakness in discretionary continues
Metals & Mining: 4QFY23 preview—margins to recover sequentially
Oil, Gas & Consumable Fuels: 4QFY23 qoq likely better for all except upstream
Pharmaceuticals/ Health Care Services: Steady quarter in store
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NEW RELEASE
Strategy
India
April 05, 2023
March 2023 quarter earnings preview Key estimates summary
We expect net income of the KIE universe to increase 6.5% yoy and 17% qoq 2023E 2024E 2025E
in 4QFY23. Excluding the metals and mining sector, net income of the Nifty estimates
coverage universe is expected to increase 18% yoy and 12% qoq. We expect Earnings growth (%) 10.2 13.9 15.7
Nifty EPS (Rs) 806 916 1,064
net income of (1) automobiles (improvement in PV and CV volumes, margin
Nifty P/E (X) 21.8 19.2 16.5
improvement for OEMs) and (2) banks (strong loan growth, stable NIMs and Macro data
steady asset quality) to increase sharply yoy, but the net income of metals Real GDP (%) 6.8 5.6 6.3
and mining (lower commodity prices, weak realization) is likely to decline Avg CPI inflation (%) 6.7 5.5 4.5
sharply yoy. We expect modest yoy growth in net income for (1) consumer
staples (modest volume growth, improvement in gross margin), (2) IT Source: CEIC, Kotak Institutional Equities estimates
services (muted c/c revenue growth) and (3) pharmaceuticals (weak US sales
for most companies, offset by healthy domestic sales). Furthermore, we
expect 4QFY23 net profits of the BSE-30 Index to increase 10% yoy and 8%
qoq and for the Nifty-50 Index to increase 9% yoy and 8% qoq. We estimate Quick Numbers
‘EPS’ of the BSE-30 Index at Rs2,678 for FY2023 and Rs2,986 for FY2024 and
of the Nifty-50 Index at Rs806 for FY2023 and Rs916 for FY2024.
Net income of the KIE universe to increase 6.5% yoy
and 17% qoq
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities A ct of 1933
We expect 4QFY23 net income of the KIE universe to increase 6.5% yoy and 17% qoq
Sector-wise sales, EBITDA and PAT growth of the KIE universe We expect net income of the Nifty-50 Index to
PAT growth increase 9% yoy and 8% qoq
Sales growth (%) EBITDA growth (%) EBITDA margin (%) (%)
yoy qoq yoy qoq Mar-22 Dec-22 Mar-23E yoy qoq
Automobiles & Components 18 6 31 14 11.2 11.5 12.4 76 17
Banks 26 2 — — — — — 45 8
Capital Goods 14 27 2 31 13.7 11.9 12.3 (3) 49
Commercial & Professional Services 12 2 (2) 3 3.7 3.2 3.2 (24) (26)
Commodity Chemicals 14 (0) 29 8 17.1 17.8 19.3 21 14
Construction Materials 15 15 7 44 17.9 13.3 16.7 (13) 70
Consumer Durables & Apparel 10 10 (7) 6 13.2 11.6 11.2 (17) 10
Consumer Staples 11 2 14 1 23.8 24.6 24.5 13 0
Diversified Financials 16 3 — — — — — 11 26
Electric Utilities 18 (4) 13 (12) 37.0 38.6 35.4 (4) 3
Fertilizers & Agricultural Chemicals 6 16 2 21 19.3 17.9 18.6 (9) 33
Gas Utilities 33 (0) (36) 84 13.9 3.6 6.7 (37) 132
Health Care Services 22 2 23 5 17.9 17.6 18.0 46 16
Hotels & Restaurants 18 (7) 15 (14) 20.8 21.9 20.3 (24) (43)
Insurance 19 (2) — — — — — 25 5
Internet Software & Services 44 (3) 92 28 (10.9) (0.8) (0.6) 68 78
IT Services 17 1 16 1 23.3 23.2 23.2 12 3
Media 9 3 (31) (30) 26.2 24.6 16.6 (33) (38)
Metals & Mining (7) 9 (27) 25 30.5 20.8 24.0 (56) 206
Oil, Gas & Consumable Fuels 10 (0) 11 12 11.6 10.4 11.7 4 16
Pharmaceuticals 10 (2) 17 (7) 21.1 23.6 22.4 6 (11)
Real Estate (1) 14 11 5 30.8 37.4 34.5 16 9
Retailing 23 (14) 22 (22) 9.7 10.7 9.7 15 (29)
Specialty Chemicals 2 (1) 6 1 21.1 21.4 21.9 8 2
Telecommunication Services 11 1 8 1 48.0 47.0 46.9 (36) 20
Transportation 43 (1) 110 7 19.6 26.8 28.8 NM 15
KIE universe 11.4 3.1 3.5 9.5 18.6 16.4 17.4 6.5 17.4
KIE universe (ex-metals & mining) 14.5 2.4 13.8 6.6 16.5 15.8 16.5 18.4 12.5
Source: Kotak Institutional Equities estimates
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3
Sector-wise expectations
We expect 4QFY23 net income of automobiles & components and banks to increase on a yoy basis; metals & mining sector will drag
down the net income
Sector-wise expectations for March 2023 quarter results
Key points Key points
Automobiles & We expect automotive OEM revenues to increase by 7% qoq, mainly on account of (1) a double- We expect auto component companies under our coverage to report a 3% qoq increase in
Components digit qoq increase in PV volumes, led by strong sales in the SUV segment and (2) >20% qoq revenues (12% yoy growth) due to (1) a strong increase in the CV and PV segment volumes
increase in CV volumes, led by robust replacement segment demand and prebuying before BS- and (2) low single-digit qoq growth in the replacement segment (tires, batteries and bearing
VI Phase II transition, partly offset by a high single-digit decline in 2W revenues, largely led by segments) partly offset by (1) a decline in 2W segment volumes and (2) continued weakness
weak export 2W volumes owing to the unavailability of dollar in African geographies. We in export markets. We expect the EBITDA margin to improve 70 bps qoq, mainly due to (1) RM
expect EBITDA margin to improve 100 bps qoq in 4QFY23 for auto OEMs, mainly led by (1) tailwinds for select companies and (2) operating leverage benefits.
operating leverage benefits and (2) richer product mix.
Banks We expect banks under coverage to report ~45% yoy earnings growth, led by ~24% yoy As with the previous quarter, we see following key discussion points—(1) driver of near-term
operating profit growth. Axis Bank would report a loss due to goodwill amortization. We expect earnings, given the headwinds on NIM, loan growth and potential risks emerging from asset
solid NII growth at ~25% yoy owing to ~16% yoy loan growth. Outlook on NIM appears to be quality, (2) we build in NIM compression for most banks that witnessed NIM expansion in
flat sequentially. Negligible risk on asset quality and a few resolutions as well, which imply FY2023, but concerns remain on the quantum of compression that is likely to be visible in
credit costs would continue to be lower. FY2024; additional challenges emerge from deposits, as growth continues to lag with loans
and the quality of deposits is shifting to term and wholesale, away from CASA and retail
deposits, (3) composition of loan growth and the possible risk of a sharp slowdown in FY2024,
led by a lower intent to borrow, especially those that had a positive impact from inflation-driven
demand, and (4) ability to pull back costs, if there is a slowdown in operating profit growth.
Capital Goods We expect the execution of all capital goods companies and most EPC companies to remain Roads: 4QFY23 results should reflect improved execution on fairly strong order books of
healthy on a yoy basis, led by strong order book accretion in the past 5-6 quarters. We expect companies. Companies such as IRB should see a strong yoy increase in toll collections due to
EBITDA margin to benefit from the recent moderation in commodity prices. We expect L&T to (1) toll rate hikes and (2) improvement in traffic. Margins will depend on the project execution
grow its consolidated ex-services revenues by 10% yoy. We expect its core E&C EBITDA mix. We expect EBITDA margin for IRB's EPC division at 26% and for GR Infraprojects at 15%.
margin to improve by 40 bps yoy on lower commodity prices. The announced order inflow for
L&T for 4QFY23 has so far remained below our expectations, but the announcements do not
include orders where negotiations are still ongoing with clients. We expect healthy growth in
revenues for ABB, Siemens and Thermax on a yoy basis on strong inflows received in the past
few quarters. We expect the benefit of lower commodity prices to get reflected in gross margin
improvement for these players. For Thermax, we expect lower styrene prices to reflect in
improved margins for the chemical division. Carborundum Universal's results should reflect
improved revenues yoy on the impact of recent acquisitions. We expect KEC to witness
healthy growth in revenues on a strong order book and KPTL's revenues to reflect the merged
financials of KPTL and JMC. We expect margins for KEC to reflect the completion of orders in
the Brazilian subsidiary, while KPTL should benefit from lower commodity prices. Defense
players should see a mixed performance on a yoy basis on a strong order book.
Construction We expect cement industry demand growth of 9-10% yoy in 4QFY23, led by strong growth in We expect costs to decline sequentially by 3.3% qoq (+6.4% yoy), led by lower energy prices
Materials January-February 2023, driven by seasonal tailwinds, partly offset by demand weakness in and operating leverage on higher volumes. We estimate cement EBITDA/ton to increase
March 2023. We estimate 11.3% yoy volume growth for our coverage universe, factoring in a sequentially (+23% qoq, -4% yoy) to Rs996/ton (+Rs184/ton qoq), mainly led by lower costs
gain in market share. As per our checks, all-India prices were flat qoq in 4QFY23, led by firm although the margin expansion quantum is divergent across companies due to different
prices across regions (+1-2% qoq), offset by the sharp weakness in South (-4.3% qoq). On a regional exposures.
monthly basis, prices firmed up in January-February 2023. However, sluggish demand in
March 2023 resulted in price cuts toward the end of the quarter.
Consumer Durables: We expect 4QFY23 earnings of most of the durables companies under our coverage Apparel: We expect Trent to be an outlier among apparel retailers due to its aggressive
Durables & to remain lackluster, with the continued exception of Polycab, which should report another expansion of Zudio stores. We bake in revenue growth of 70% yoy, but a 7% qoq decline with
Apparel solid print, driven by a relatively healthy demand environment in the wire & cable sector. While lower margins due to negative operating leverage and sequentially lower GM. For ABFRL, we
the air-conditioner category is likely to have benefited in 4QFY23 from this year's early onset of expect overall revenue growth of 18% yoy on account of new store additions and incremental
summer, margins of AC-makers are likely to remain subdued amid continued pricing pressure. revenue from TMRW, Reebok. Expect a decline in EBITDA margins, as we bake in investments
Other categories continue to face headwinds from weak consumer demand (particularly in the in ad spends, store additions in ethnic and lower margins in Pantaloons for ABFRL. For Vedant
entry-level segment) and intense competition. Meanwhile, the fan segment will probably Fashions, we model slightly muted revenue growth of 10% yoy. However, we expect a higher
register weak primary sales growth due to the overhang of channel inventory of older models 29% yoy customer sales (secondary sales) growth on account of spillover of wedding and
amid the transition to new energy norms. festive quarter. We bake in 5% yoy growth in sales primarily on account of volume growth and
flat pricing for PAG. Margins should moderate across retailers due to negative operating
leverage and investments in new verticals.
Consumer Staples: expect resilient demand with sequential improvement in margins. We expect 0-6% Discretionary: weak underlying demand across the board with a few exceptions. Decorative
Staples volume growth and 8-14% value growth for FMCG players, driven by resilient demand (rural paints had a good start to the March quarter (January 2022 was impacted by Omicron), but
has bottomed out but is yet to register growth pick-up). We expect GCPL to lead the pack. growth moderated in March due to a high base. We would focus on 2H growth as against 4Q
Growth expectations: (1) GCPL: 14%/9% value/volume growth in India, aided by strong growth (15% price hike last year shifted some sales from 4QFY22 to 3QFY22, distorting the base
in HI (weak base and stocking on the new LUP in the channel) and robust growth across quarter) to assess underlying demand trends. Our 4Q forecast implies 2H decorative paints
segments; (2) HUVR: 13% yoy revenue growth and 6% UVG; (3) BRIT: 14% yoy revenue growth, growth of: (1) APNT: 7%/7.5% value/volume growth (reported) and LSD volume growth (ex
primarily led by pricing; volume growth of 4%; (4) NEST: 13% yoy revenue growth, entirely led by putty), (2) BRGR: 9% value growth, and (3) KNPL: 8.4% value growth, in line with industry after 3-
pricing (marginal decline in tonnage); (5) soft print from Dabur (2%/6% volume/value growth in 4 years of underperformance. We estimate 8% (LFL) standalone revenue growth in 4Q for PIDI.
India), Marico (4.5%/3.5%) and CLGT (flat/1.4%); and (6) decent recovery in tea volumes and
resilient foods sales for TCPL. For ITC, we model 15% yoy cigarette volume growth (4.5% 4-yr CAGR versus +5.2%/+4.6% in
3Q/2QFY23) and 17% cigarette EBIT growth (+17% in 3Q). Despite the disruption of summer
following hailstorms in the Delhi/NCR region, we expect strong 27%/20.3% yoy growth in
revenues/volumes for VBL (share gains, 100%+ growth in Sting). Weakness in QSR
continues—we estimate (1) JUBI: 2% yoy revenue growth (15% store growth; 9-10% SSS
decline), (2) slightly higher-than-usual seasonal qoq decline in ADS of McD and BK; we
estimate 12% SSSG for WLDL (versus 20% in 3Q), (3) 2-3% SSSG for KFC and MSD SSS decline
(yoy) for PH. We model 47 mn cases for UBBL, up 4% yoy (similar to 3Q) after factoring in
some volume impact (akin to 3Q) pertaining to RTM changes in TN/AP. UNSP: We estimate
14% yoy growth in P&A (7%/7% volume/price-mix) and a 25% decline in EBITDA (adjusted for
the divested portfolio) due to GM decline and higher A&P.
Strategy
India Research
4
down the net income
Exhibit 1: Sector-wise expectations for March 2023 quarter results
Fertilizers & 4Q is seasonally a slow quarter for the crop protection industry, and the sector's growth is Amid generally declining prices of agrochemicals, margins are likely to come under pressure
Agricultural likely to remain under pressure for the quarter amid an overhang of channel inventories across for most companies. For example, Bayer's earnings are likely to be impacted by the decrease
Chemicals important markets worldwide and an environment of generally declining prices of finished in the prices of glyphosate, while Godrej Agrovet's subsidiary Astec will continue to be hurt by
products. We would therefore expect subdued growth for all companies under our coverage. the plunge in prices of its key products tebuconazole and propiconazole. Even UPL faces
We would expect UPL to perform best within our coverage universe, driven primarily by the headwinds from the decline in prices of glufosinate, which is among the company's most
LatAm and India markets, although even its yoy growth is likely to be only in the single-digits. important products.
Gas Utilities Gas Utilities: We expect a sequentially better quarter for gas utilities, driven by qoq recovery in City Gas Distributors (CGDs): We expect 6-8% yoy (but largely flat qoq) volume growth.
volume amid sharp correction in LNG prices. For GAIL, we expect LPG segment to return to However, we expect per-unit margins to improve sequentially, driven by (1) HPHT gas tie-up
profits (after posting a loss in 3Q), but expect petchem to remain in EBIT loss. GAIL can from February 2023 and (2) qoq lower LNG prices. We expect IGL's per-unit margins to recover
surprise with strong marketing earnings as oil index - HH spreads increased sharply in to Rs6.4/scm (from Rs5.7/scm qoq) and MGL's per-unit EBITDA margin to improve to
4QFY23. For GSPL, we expect a modest 2% qoq uptick in EBITDA as higher transmission Rs9.5/scm (from Rs8.2/scm qoq).
volume would likely be offset by lower ship-or-pay gains. For PLNG, we expect improvement in
core operational performance with Dahej utilization likely to recover to ~79% (versus very
weak 68% in 3QFY23) and benefit of 5% tariff hike at Dahej from Jan-2023. However, reported
numbers may appear weaker as 3QFY23 was boosted by PLNG accounting use-or-pay
charges (Rs8.5 bn) for the entire CY2022 in 3QFY23.
Internet Software We model revenue growth of 40.7% yoy, led by paid campaigns growth of 17% yoy and 20% For Zomato, we build in a tepid 2.2% qoq revenue growth on account of lower food delivery
& Services yoy growth in realizations for JUST. We expect Naukri to report 30% yoy revenue growth and orders (2% qoq decline, implying 12% yoy growth in food delivery GMV), offset by contribution
99acres to report 19% yoy revenue growth. Revenue growth for Naukri may remain healthy from the Blinkit business. Overall EBITDA loss of Zomato should narrow sequentially on
despite IT demand coming off on account of healthy deferred revenue trends of previous account of lower losses for Blinkit. For Nykaa, we expect revenue growth of 31% yoy, but 13%
quarters. We would focus on commentary on billings to get a better sense of demand qoq decline primarily on account of seasonality. We expect BPC revenues to grow 27% yoy and
slowdown in Naukri. Other segment (JS+Shiksha) should report 8.7% yoy decline as JS fashion business revenues at 35% yoy. We model sequentially higher GMs on account of
revenues will be hit (JS shifted to a free services model). higher fashion in the mix; this should lead to a marginal sequential EBITDA margin expansion
of ~10 bps to 5.4%.
IT Services We forecast qoq revenue growth ranging from a decline of 2.1% to growth of 2.3% across our The sharp decline in attrition has greatly reduced margin headwinds from war for talent.
coverage universe. Growth will be impacted by (1) usual seasonality in the March quarter, (2) Higher travel and muted growth are incremental headwinds that can be offset by a range of
slowdown in discretionary spends as companies focus more on costs and RoI and (3) operational efficiencies. We expect modest revenue growth guidance for FY2024 across
deterioration in demand caused by macro uncertainties in the impacted verticals of companies that may not be considered conservative due to elevated risks to growth and likely
mortgages, hi-tech and parts of retail and telecom. back-ended growth trajectory.
Media We expect a gradual improvement in TV industry advertising environment with waning inflation Multiplexes: 4QFY23 will be the first quarter for PVR-INOX merged entity. BO collections were
impact on FMCG ad budgets. We expect Sun TV's ad revenues to grow by 2% yoy, dominated by Pathaan (Rs5.4 bn NBOC) and Tu Jhoothi Main Makkar (Rs1.3 bn) even as other
outperforming Zee whose ad revenues could decline by 10% yoy (some disruption due to NTO releases failed to impress. We expect 30.5 mn footfalls (about 18% below 3QFY23), ATP of
3.0 implementation and the withdrawal of Zee Anmol from FTA). We build domestic Rs240 (versus Rs238 in 3QFY23) and SPH of about Rs122 (versus Rs122 in 3QFY23). We
subscription growth of +1%/flat yoy for Zee/Sun TV respectively. For Zee, we estimate expect ad revenues of MergeCo at ~Rs1 bn (about 12% below 3QFY23). We estimate EBITDA
57%/38% yoy/qoq decline in EBITDA to Rs2.1 bn, led by about 10-11 ppts yoy decline in of Rs105 mn on pre-Ind-AS 116 basis and about 0.9% EBITDA margin factoring in ~21%
EBITDA margin to 10.3% (OTT losses, costs associated with sports broadcasting). For Sun TV, occupancy- we note that PVR-INOX' EBITDA breakeven occupancy is about 18-20%. Film hire
we forecast 14.6%/6.3% yoy decline in EBIT/PAT and build in IPL revenue of Rs120 mn in cost (% of ticket sales) is expected to remain similar to 2QFY23 level (45.3%). We factor in a
4QFY23 versus Rs289 mn in 4QFY22, factoring in the late start of IPL 2023 versus 2022 significant drop in PVR Pictures revenues/EBITDA versus last quarter. We expect certain
edition. merger-related costs of Rs125 mn (exceptional item).
Metals & Mining Ferrous: We expect (1) an average increase in steel realization of ~Rs2,750/ton qoq (4.5% Non-ferrous: We see a sequential improvement in margins for base metal companies in
qoq), led by price hikes in the quarter. (2) US$15-20/ton higher coking coal costs and Rs500- 4QFY23. Aluminum producers should witness margin expansion, led by a combination of
750/ton higher iron ore costs for non-integrated producers, assuming a consumption lag; and higher prices and lower coal costs, whereas higher Zinc prices and volume uptick should aid
(3) we estimate ~3%/11% yoy/qoq volume growth in the quarter for our coverage companies margins for zinc producers. Zinc/Aluminum/Alumina prices increased by 4%/2.2%/13.5% qoq
in the quarter with pick-up in exports toward the end of quarter. We estimate the profitability to in 4QFY23 in US$ terms. (1) Hindalco - We estimate India EBITDA to increase sequentially to
increase sharply on a sequential basis in 4QFY23, mainly led by higher realizations, whereas Rs 23.6 bn (-42% yoy, +26% qoq), whereas Novelis' EBITDA should see recovery (US$420/ton, -
higher raw material costs are offset by operating leverage. We estimate ~Rs2,600/ton qoq 3.8% yoy, +11.8% qoq) after hitting a trough in 3QFY23. (2) Nalco - We estimate EBITDA of
recovery in steel margins in 4QFY23. Rs6.4 bn (-60% yoy, +40% qoq), mainly due to higher commodity prices in the quarter.; (3) HZ -
We estimate EBITDA to increase by 12.2% qoq (-16.2% yoy), mainly due to higher metal prices,
partly offset by lower hedging gains; and (4) Vedanta - We forecast a 30% qoq increase in
EBITDA (-36% yoy) due to sequentially stronger commodity prices across its key segments -
zinc, aluminum and oil.
Oil, Gas & Upstream: We expect a marginal 2% sequential EBITDA decline for upstream, driven by (1) qoq RIL: We expect RIL’s standalone EBITDA to improve 7% qoq, reflecting (1) resilient GRM and
Consumable lower oil/gas sales and (2) 8% qoq decline in oil price, largely offset by a reduction in windfall improvement in petchem margins, (2) higher E&P profitability on slightly higher gas production.
Fuels taxes. We expect EBITDA for R-Jio to increase 2% qoq, largely driven by (1) 5.7 mn overall net adds,
Downstream: We expect a sharp qoq improvement for oil marketing companies, driven by (1) (2) qoq stable blended ARPU at Rs178 as subscriber mix improvements and rising contribution
further recovery in auto-fuel margins as marketing margins on diesel turned positive (versus from FTTH are offset by lower days in quarter (90 versus 92 in 3Q). We expect Reliance Retail's
loss in 3Q) and continued over-recovery on petrol sales, (2) largely resilient GRM as the decline revenue/EBITDA to increase by ~2% qoq, driven by increased store footprint and the benefits
in middle distillate cracks is offset by better cracks for gasoline, naphtha etc., and (3) of operating leverage.
sequentially higher refinery throughput.
Strategy
India Research
5
down the net income
Exhibit 1: Sector-wise expectations for March 2023 quarter results
Pharmaceuticals Pharmaceuticals: We expect a steady 4QFY23 for our pharma coverage with greater stability in Health care services: In a seasonally strong quarter, we expect a sequentially better
/ Health care the base US portfolio, healthy domestic sales amid gradual easing of cost pressures. performance for the India-based hospitals (except for Rainbow wherein 4Q is a seasonally
services Nonetheless, there have not been any big-ticket launches in US by any company under our weak quarter), led by higher occupancies. The sequential improvement in sales (+2.4% qoq)
coverage in 4QFY23, which will restrict any meaningful uptick in US sales on a sequential will be despite a slightly slower January than usual. On the other hand, we expect sequentially
basis. For most companies in the US, except for CIPLA and ARBP, we build in a qoq decline or flat or lower trends in ARPOB. Overall, for the India-based hospitals (except KIMS), we forecast
flat sales, wherein sales will be boosted by ramp-up of Leuprolide Acetate and specialty, growth of 20-26% yoy in 4QFY23. For KIMS, financials are not comparable on an yoy basis due
respectively. gRevlimid sales for DRRD (albeit down qoq) and Cipla will also provide further to integration of Sunshine and Nagpur in 1HFY23. For Aster DM, GCC is expected to do well in
respite. We expect DRRD and CIPLA to report US$85 mn and US$26 mn sales from gRevlimid a seasonally strong quarter. Overall, we expect an EBITDA growth of 23% yoy and 5% qoq for
respectively, while LPC is expected to report tad lower sales sequentially from gSuprep in the our hospital coverage. For the diagnostic companies, we expect non-Covid realizations per
quarter. Despite the NLEM impact, we build in a healthy 5-18% yoy domestic growth for our patient to be largely flat qoq, and non-Covid volumes to improve qoq. For DLPL and METROHL,
coverage in 4QFY23. For the API segment, we build in a sequential volume-led recovery. On the we bake in a healthy 12-20% yoy growth for the non-Covid business aided by a low non-Covid
other hand, we expect lower CDMO sales for DIVIS and LAURUS on account of lesser base due to the Omicron wave. We note there is no incremental adjustment for the Suburban
contribution from Molnupiravir and Paxlovid. In our coverage, we bake in elevated R&D and Hitech acquisitions from 4QFY23 as they are now fully in the base. We build in sequentially
expenses towards specialty uptick for SUNP and ARBP. Owing to the Viatris acquisition by lower Covid sales for both DLPL and METROHL. Overall, we bake in 12% qoq and 4% qoq
BIOS (effective November 29, 2022) and Curatio acquisition by TRP (effective October 14, EBITDA growth rates for DLPL and METROHL, respectively, in 4QFY23. The lower growth in
2022), their yoy performance is not comparable. Overall, excluding BIOS, we expect 7.4% yoy METROHL is largely on account of loss of the NACO contract (used to be 4-5% of sales) from
sales growth (-1.5% qoq) in 4QFY23 for our pharma coverage. On the operating front, we February 2023.
expect 14% yoy growth in EBITDA (-8.5% qoq) for our pharma coverage (ex-BIOS). The
sequential drop is largely on account of lower gRevlimid sales, lower Covid contribution and
seasonality.
Real Estate Residential. We expect consolidation to continue to play out in favor of players such as Lodha, Annuity. We expect occupancies for commercial office players to continue to improve
DLF and Prestige, boosted by tailwinds to residential real-estate demand, new launches and gradually, in line with an improvement in physical occupancy for companies. For Lemon Tree,
customers' preference for quality. Residential demand continues to remain strong, despite we expect the ARRs to further improve in the quarter, owing to the seasonal strength in
street concerns on rising interest rates. DLF should report record pre-sales on the back of the hospitality business.
strong launches at "The Arbour", which alone saw sales of Rs80 bn during the quarter. In
general, luxury residential projects should see strong sales traction owing the cap on capital
gains relief on purchase of new home restricted to Rs100 mn from April 2023. Players such as
Macrotech and Oberoi Realty should also benefit on account of the traction on sales in luxury
projects.
Retailing Titan. We model (1) 15% yoy growth in standalone jewelry sales (+15.4% 4-year CAGR versus Staple retail. We model consolidated revenue growth of 27% yoy in 4Q, with the addition of 10
+19.4%/19.1/20.8% in 3QFY23/2QFY23/1QFY23) on LFL basis (excluding sale of gold bullion). stores for Dmart. Revenue throughput of Rs34.6k is 8% higher on a yoy basis, yet below pre-
We gather that the quarter started on a strong note (favorable base) but demand moderated a Covid 4Q peaks of Rs36k. We expect sequential revenue decline off a festive 3Q base. We
bit in the month of March (high base + perhaps, some impact of sharp 8-10% increase in gold expect consolidated EBITDA margin of 7.7%, down 60 bps qoq.
price), (2) we expect 16% yoy growth in watches (versus +14.5% in 3Q) and 22.5% yoy growth
in eyewear (aided by store growth) segment. We expect EBITDA margin to improve 130 bps
yoy to 12% as base quarter margin was partly impacted by an ex-gratia payout to employees.
On segmental front, we expect (1) EBIT margin of 12% for Jewelry business (versus 13% adj
EBIT margin in 3Q), (2) 11.2% EBIT margin for watches, and (3) 17.7% EBIT margin for eyewear.
Specialty Chemical intermediate companies are likely to report another quarter of mixed results amid Amid what has been a generally deflationary environment for chemical prices, margins of
Chemicals intensifying macroeconomic headwinds. The companies with specific growth drivers that are companies are likely to be determined by idiosyncratic moves in spreads on their key products.
currently firing (e.g., the Honeywell project for NFIL, pyroxasulfone for PI, butyl phenols for Tata Chemicals is an example of a company benefiting from strength in prices of its key
Vinati and HALS/PBQ/BHA for Clean Science) are likely to continue to report healthy results, at product (soda ash), whereas Atul is currently at the opposite end of the spectrum. However,
least on a yoy basis, whereas others facing a slowdown in certain segments (e.g., SRF in we do expect operating leverage to buoy margins in cases where revenues are growing
Packaging Films and Atul in Performance Chemicals) seem likely to again report subdued sharply, e.g., at Navin Fluorine. It also remains to be seen whether the softening demand
results. Tata Chemicals should benefit from a renegotiation of soda ash prices in the US environment forces companies to pass on the benefit of lower input costs to customers.
domestic market to significantly higher levels.
Telecommunicati Telcos: We expect modest ~1% qoq growth in combined wireless revenue and EBITDA for the Indus Towers: We expect EBITDA (adjusted for one-offs and provision write-offs) to increase
on Services three private telcos, driven largely by a modest ~1% qoq ARPU uptick, as subscriber mix 1% qoq, reflecting a modest increase in tenancies. Reported EBITDA will likely be impacted by
improvement and Bharti's minimum recharge plan hike offset the lower days in quarter (90 continued provisions for bad debts. We assume modest ~Rs5 bn bad debt provisions in
versus 92 qoq). With continued subscriber losses at Vodafone Idea, we expect further market 4QFY23 (versus Rs22.5 bn/Rs17.8 bn/Rs12.3 bn in 3QFY23/2QFY23/1QFY23).
share gains for Bharti and R-Jio. We expect Bharti's consolidated revenue to increase ~2% TCOM: We expect data segment gross revenue to inch-up ~12% yoy (~2.5% qoq) but EBITDA
qoq, driven by sustained strong net adds in Homes Broadband and qoq stable performance margins to decline by ~30bps qoq to 23.5%
from Enterprise and Airtel Africa.
Transportation Ports: For APSEZ, we model comparable volume growth to be around low-to-mid-single digits, Airlines: We expect a 76%/4% yoy/qoq improvement in revenues, largely driven by a sharp
as it was impacted by the weakness in country-level demand. The consolidation of improvement in passenger levels by ~63% yoy and 11% yoy increase in overall yields for the
Gangavaram port yields a higher 15% yoy growth in volumes. For Gujarat Pipavav port, we company to Rs4.9/RPK. We are broadly maintaining the load factors and envisage a 3% qoq
expect a 21%/11% yoy improvement in container and overall volumes. For GMR Airports, we increase in ASK count qoq. We assume flat qoq load factors of 85%.
factor in airport volumes at 95% of pre-Covid levels, yielding a 2% qoq growth in revenues.
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Jun-13 Jun-13 Jun-13
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Dec-13 Dec-13 Dec-13

Mar-17
Adjusted earnings growth of BSE-30 Index (%)
Mar-17 Mar-17
Jun-18 Jun-18
We expect net income of the BSE-30 Index to increase 10% yoy in 4QFY23
Jun-18
BSE-30 Index earnings growth (%)

BSE-30 Index earnings growth ex-energy (%)

BSE-30 Index earnings growth ex-energy ex-banks (%)
19.5
27.0
27.4

12.0
10.4
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(6.0)(3.3)
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We expect net income of the BSE-30 Index to increase 10% yoy and 8% qoq
Sector-wise sales, EBITDA and PAT growth of the BSE-30 Index
Sales growth (%) EBITDA growth (%) EBITDA margin (%) PAT growth (%)
Banks 26 1 — — — — — 42 6
Capital Goods 12 28 12 45 12.3 10.9 12.4 22 82
Commodity Chemicals 14 4 21 8 18.3 18.7 19.4 20 8
Construction materials 23 24 12 50 19.9 15.0 18.2 18 75
Consumer Staples 11 3 15 — 28.5 30.1 29.4 16 (0)
IT Services 17 1 16 0 23.9 23.8 23.6 11 2
Metals & Mining (13) 6 (63) 46 22.7 7.1 9.8 (91) 140
Oil, Gas & Consumable Fuels 9 4 16 4 15.1 16.2 16.1 2 4
Pharmaceuticals 14 (6) 30 (14) 22.5 28.1 25.7 14 (17)
Retailing 10 (27) 23 (28) 10.7 12.2 12.0 14 (35)
Telecommunication Services 15 2 16 1 50.9 51.5 51.2 140 9
BSE-30 Index 12.9 4.1 7.8 2.8 21.7 21.3 21.0 10.4 8.3
Notes:
(a) Above table doesn’t include data for Kotak Mahindra Bank.
Source: Companies, Kotak Institutional Equities estimates
We expect 4QFY23 net income of the Nifty-50 Index to increase 9% yoy and 8% qoq
Sector-wise sales, EBITDA and PAT growth of the Nifty-50 Index
Sales growth (%) EBITDA growth (%) EBITDA margin (%) PAT growth (%)
Banks 26 1 — — — — — 42 6
Capital Goods 12 28 12 45 12.3 10.9 12.4 22 82
Commodity Chemicals 14 4 21 8 18.3 18.7 19.4 20 8
Construction Materials 17 19 11 53 17.5 12.8 16.5 (9) 72
Consumer Staples 12 2 15 (0) 26.2 27.7 27.0 16 (2)
Fertilizers & Agricultural Chemicals 7 24 6 25 21.3 21.1 21.2 (1) 39
Health Care Services 25 4 19 9 13.1 11.9 12.4 167 57
Insurance 19 (2) — — — — — 25 5
IT Services 17 1 16 0 23.9 23.8 23.6 11 2
Metals & Mining (6) 8 (42) 52 18.7 8.3 11.7 (69) 1,637
Oil, Gas & Consumable Fuels 9 2 8 (3) 15.9 16.6 15.8 2 (5)
Pharmaceuticals 7 (5) 14 (14) 23.0 27.0 24.5 (1) (17)
Retailing 10 (27) 23 (28) 10.7 12.2 12.0 14 (35)
Telecommunication Services 15 2 16 1 50.9 51.5 51.2 140 9
Transportation 31 5 35 7 62.0 62.9 63.8 29 13
Nifty-50 Index 11.4 3.9 5.7 4.0 19.5 18.8 18.7 8.9 7.7
Notes:
(a) Above table doesn’t include data for Adani Enterprises, Bajaj Finserv and Kotak Mahindra Bank.
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Sector-wise net sales, EBITDA and PAT of companies in the BSE-30 Index (Rs bn)
Net sales EBITDA PAT
Company (#) Mar-22 Dec-22 Mar-23E Mar-22 Dec-22 Mar-23E Mar-22 Dec-22 Mar-23E
Automobiles & Components (2) 439 507 546 44 56 63 30 44 44
Banks (5) 755 935 948 — — — 317 426 450
Capital Goods (1) 529 464 593 65 51 73 36 24 44
Commodity Chemicals (1) 79 86 90 14 16 17 10 11 12
Construction materials (1) 152 150 186 30 22 34 15 10 17
Consumer Staples (3) 330 357 367 94 107 108 71 82 82
Diversified Financials (3) 94 109 112 — — — 61 68 69
Electric Utilities (2) 430 529 516 188 234 212 94 81 89
IT Services (5) 1,385 1,603 1,619 331 381 382 238 259 264
Metals & Mining (1) 693 571 605 157 40 59 107 (24) 10
Oil, Gas & Consumable Fuels (1) 2,074 2,172 2,269 314 352 365 162 158 165
Pharmaceuticals (2) 149 180 169 33 51 44 25 34 29
Retailing (1) 73 109 80 8 13 10 5 10 6
BSE-30 Index 7,495 8,130 8,463 1,439 1,509 1,552 1,182 1,205 1,304
Notes:
(a) Above table doesn’t include data for Kotak Mahindra Bank.
Sector-wise net sales, EBITDA and PAT of companies in the Nifty-50 Index (Rs bn)
Automobiles & Components (6) 1,409 1,603 1,690 161 188 214 53 94 106
Banks (4) 755 935 948 — — — 317 426 450
Capital Goods (1) 529 464 593 65 51 73 36 24 44
Construction Materials (2) 215 212 253 38 27 42 24 12 21
Fertilizers & Agricultural Chemicals (1) 159 137 169 34 29 36 15 11 15
Health Care Services (1) 35 43 44 5 5 6 1 2 2
Insurance (2) 72 87 86 — — — 20 24 25
IT Services (5) 1,385 1,603 1,619 331 381 382 238 259 264
Metals & Mining (3) 1,720 1,494 1,609 322 124 188 188 (4) 58
Retailing (1) 73 109 80 8 13 10 5 10 6
Transportation (1) 38 48 50 24 30 32 13 15 17
Nifty-50 Index 11,738 12,578 13,071 2,112 2,147 2,233 1,540 1,557 1,677
Notes:
(a) Above table doesn’t include data for Adani Enterprises, Bajaj Finserv and Kotak Mahindra Bank.
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Sector-wise net sales, EBITDA and PAT of companies in the KIE universe (Rs bn)
Automobiles & Components (25) 2,116 2,376 2,507 236 273 311 87 130 153
Banks (19) 1,157 1,422 1,452 — — — 413 553 598
Capital Goods (13) 887 796 1,010 121 95 124 77 50 74
Commercial & Professional Services (2) 45 49 50 2 2 2 1 1 1
Construction Materials (10) 451 449 517 80 60 86 48 25 42
Consumer Durables & Apparel (8) 167 167 183 22 19 21 12 9 10
Fertilizers & Agricultural Chemicals (4) 194 177 205 37 32 38 18 12 16
Gas Utilities (5) 420 561 559 58 20 38 41 11 26
Health Care Services (8) 98 117 120 18 21 22 8 10 11
Hotels & Restaurants (6) 31 39 36 6 9 7 2 3 2
Insurance (2) 72 87 86 — — — 20 24 25
Internet Software & Services (5) 29 43 42 (3) (0) (0) (2) (3) (1)
IT Services (9) 1,509 1,747 1,765 351 405 409 252 275 283
Media (3) 37 39 40 10 10 7 6 6 4
Metals & Mining (9) 2,767 2,358 2,561 845 490 615 349 51 155
Real Estate (12) 133 116 132 41 43 45 22 24 26
Retailing (3) 172 246 211 17 26 20 10 17 12
Specialty Chemicals (8) 119 123 122 25 26 27 16 17 18
Telecommunication Services (4) 525 577 581 252 271 273 (33) (56) (45)
Transportation (8) 189 272 270 37 73 78 (1) 27 32
KIE universe 19,665 21,264 21,914 3,386 3,201 3,505 2,181 1,979 2,324
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4QFY23/1QCY23 earnings preview for KIE universe
Company-wise earnings of the KIE universe (Rs mn)

Change (%)
Mar-22 Dec-22 Mar-23E yoy qoq Comments
Automobiles & Components
Amara Raja Batteries
Net sales 21,807 26,372 27,691 27.0 5.0
EBITDA 2,199 3,969 4,276 94.5 7.8 We estimate revenues to increase by 5% qoq in 4QFY23, led by (1) 10-12% qoq increase in 4W OEM
EBIT 1,211 2,823 3,126 158.1 10.7 segment volumes, (2) mid single-digit increase in revenues in industrial segment and automotive
PBT 1,325 3,026 3,368 154.2 11.3 replacement segments, and (3) high single-digit qoq decline in 2W OEM volumes.
Tax 340 798 876 157.9 9.8
Reported PAT 985 2,228 2,492 152.9 11.9
Extraordinaries — — — — —
We expect EBITDA margin to increase by 40 bps on a qoq basis in 4QFY23, driven by (1) operating
Adjusted PAT 985 2,228 2,492 152.9 11.9
leverage benefit and (2) cost-control measures.
EPS (Rs/share) 5.8 13.0 14.6 152.9 11.9
EBITDA margin (%) 10.1 15.0 15.4 536 bps 39 bps
Apollo Tyres
Net sales 55,783 64,228 61,395 10.1 (4.4)
We expect standalone revenues to decline by 1% qoq, mainly led by ASP decline. We expect volumes to
EBITDA 6,264 9,134 9,179 46.5 0.5 remain flat, as the decline in replacement (weakness in PCR segment) and export segment volumes
would be offset by a sequential recovery in CV and PV OEM segment volumes. We are building in a 1%
EBIT 2,510 5,589 5,629 124.2 0.7
qoq decline in ASPs, mainly due to inferior product mix (lower mix of export and replacement segments).
PBT 1,603 4,237 4,279 167.0 1.0 We expect standalone EBITDA margin to improve by 120 bps qoq, led by RM tailwinds in 4QFY23. We
expect gross margin to improve by 180 bps qoq in 4QFY23.
Tax 467 1,316 1,198 156.3 (9.0)
Reported PAT 1,135 2,921 3,081 171.6 5.5
Extraordinaries — — — — — We expect Europe manufacturing operation revenues to increase by 11% yoy (in INR terms) in 4QFY23
driven by (1) 5% increase in revenues in (EUR terms) and (2) benefit of EUR appreciation versus INR. We
Adjusted PAT 1,135 2,921 3,081 171.4 5.5
build in EBIT margin of 7.5% in our estimates in 4QFY23 (EBIT margin of 7.9% in 3QFY23 and EBIT
EPS (Rs/share) 1.8 4.6 4.8 171.4 5.5 margin of 4.9% in 4QFY22).
Ashok Leyland
Net sales 87,443 90,297 117,868 34.8 30.5
EBITDA 7,760 7,973 13,514 74.1 69.5 We expect revenues to increase by 31% qoq in 4QFY23, led by (1) 26% qoq increase in volumes and (2)
4% qoq increase in ASPs. We expect ASPs to increase by 4% qoq, mainly on account of (1) higher mix of
EBIT 5,807 6,084 11,614 100.0 90.9
domestic M&HCV segment (+320 bps qoq) and (2) better retention of price increases taken during the
PBT 5,284 5,596 11,214 112.2 100.4 quarter.
Tax 973 2,052 3,140 222.8 53.0
Reported PAT 9,014 3,613 8,074 (10.4) 123.4
Extraordinaries 4,703 69 — — — We expect EBITDA margin to improve by 260 bps qoq, led by (1) operating leverage benefits, (2) richer
Adjusted PAT 5,487 3,561 8,074 47.1 126.7 product mix (higher mix of M&HCV segment) and (3) lagged benefit of RM tailwinds (correction in steel
EPS (Rs/share) 1.9 1.2 2.8 47.1 126.7 prices) in 4QFY23.
Bajaj Auto
Net sales 79,748 93,151 83,897 5.2 (9.9)
Volumes declined by 13% qoq in 4QFY23, led by (1) a 21-22% qoq decline in export 2W and 3W segment
EBITDA 13,656 17,768 15,857 16.1 (10.8)
volumes and (2) a 9% qoq decline in domestic 2W segment volumes, partly offset by a 12% qoq increase
EBIT 12,959 17,029 15,117 16.7 (11.2) in domestic 3W volumes. We expect revenues to decline by 10% qoq, led by (1) 13% qoq decline in
volumes and (2) 4% qoq increase in ASPs due to the higher mix of the 3W segment, lower mix of the
PBT 15,819 19,635 17,767 12.3 (9.5)
domestic economy motorcycle segment, and lower mix of the export 2W segment.
Tax 4,282 4,721 4,264 (0.4) (9.7)
Reported PAT 14,690 14,914 13,503 (8.1) (9.5)
Extraordinaries 3,153 — — — — We expect EBITDA margins to decline by 20 bps qoq in 4QFY23 due to negative operating leverage,
Adjusted PAT 12,483 14,914 13,503 8.2 (9.5) partly offset by richer product mix (higher mix of domestic 3W segment and lower mix of domestic
EPS (Rs/share) 43.1 51.5 46.7 8.2 (9.5) economy motorcycle segment).
EBITDA margin (%) 17.1 19.1 18.9 177 bps -18 bps
Balkrishna Industries
Net sales 24,319 22,153 21,710 (10.7) (2.0)
EBITDA 5,765 4,233 4,655 (19.3) 10.0 We expect volumes to decline by 12% yoy (up 2% qoq) to 67.9k MT in 4QFY23. Volumes will remain
under pressure owing to channel destocking and weak demand trends in off-highway segments.
EBIT 4,598 2,783 3,205 (30.3) 15.2
Revenues will likely decline by 2% qoq, led by 4% decline in ASPs due to pass-through of freight
PBT 4,934 1,418 3,755 (23.9) 164.7 surcharge to end-consumers.
Tax 1,147 422 946 (17.5) 124.1
Reported PAT 3,787 996 2,809 (25.8) 181.9
Extraordinaries — — — — — We expect EBITDA margin to increase by 230 bps qoq due to (1) RM tailwinds (lagged benefit), (2)
Adjusted PAT 3,943 2,231 2,809 (28.8) 25.9 continued decline in freight expenses and (3) cost-control measures. We expect RM per kg to decline by
EPS (Rs/share) 20.4 11.5 14.5 (28.8) 25.9 7% qoq in 4QFY23.
EBITDA margin (%) 23.7 19.1 21.4 -227 bps 233 bps
Bharat Forge
Net sales 35,731 33,534 35,951 0.6 7.2 We expect standalone revenues to increase by 7% qoq, led by (1) 10% qoq increase in domestic
segment revenues and (2) 5% qoq increase in export segment revenues. Domestic segment revenue
EBITDA 5,539 4,693 5,327 (3.8) 13.5
growth would be driven by strong growth in domestic CV and PV segments, whereas export segment
EBIT 5,539 4,693 5,327 (3.8) 13.5 will witness steady recovery, driven by PV and CV segments. We expect EBITDA margin to decline by
160 bps on a qoq basis, as 3QFY23 had an exchange gain benefit of Rs422 mn. Adjusted for the
PBT 3,604 2,110 3,107 (13.8) 47.2
exchange gain benefit, we expect EBITDA margin to improve by 60 bps, driven by operating leverage
Tax 1,155 1,323 1,200 3.9 (9.3) benefit, partly offset by inferior segmental mix (lower mix of export segment) in 4QFY23.
Reported PAT 2,450 787 1,907 (22.2) 142.2 We estimate consolidated revenues to increase by 7% qoq in 4QFY23, led by (1) 7% qoq increase in
Extraordinaries — — — — — standalone segment revenues, (2) 5% qoq increase in EU subsidiaries and (3) 10% qoq increase in BF
Adjusted PAT 2,417 787 1,907 (21.1) 142.2 Industrial business revenues. We expect the company's consolidated EBITDA to improve by 80 bps on a
EPS (Rs/share) 5.2 1.7 4.1 (21.1) 142.2 qoq basis, mainly led by (1) improvement in EU subsidiaries profitability and (2) operating leverage
benefit in standalone business, partly offset by lower forex gain in 4QFY23.
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Change (%)
CEAT
Net sales 25,920 27,272 28,342 9.3 3.9
EBITDA 1,875 2,376 2,794 49.0 17.6 We expect consolidated revenues to increase by 4% qoq in 4QFY23, mainly led by 5% qoq increase in
EBIT 779 1,201 1,620 107.8 34.8 volumes. In standalone operations, we expect volume to increase by 5% on a qoq basis, led by (1)
PBT 246 565 985 300.0 74.4 increase in PCR and CV OEM segment volumes and (2) uptick in CV replacement segment volumes.
Tax 10 150 246 2,412.1 64.5
Reported PAT 253 354 762 201.7 115.2
Extraordinaries (59) (5) — — — We expect EBITDA margin to improve by 120 bps on a qoq basis in 4QFY23, led by RM tailwinds (2-3%
Adjusted PAT 297 357 762 156.8 113.2 qoq decline in RM basket), partly offset by (1) weaker product mix (lower mix of exports and 2W
EPS (Rs/share) 7.3 8.8 18.8 156.8 113.2 segment). Overall, we expect consolidated gross margin to improve by 90 bps on a qoq basis in 4QFY23.
Eicher Motors
Net sales 31,933 37,210 37,644 17.9 1.2 Royal Enfield's volumes declined by 1% qoq in 4QFY23, led by (1) 5% qoq decline in domestic segment,
EBITDA 7,571 8,572 9,133 20.6 6.5 led by weak performance of the core portfolio (ex-Hunter) and (2) 37% qoq increase in export segment
owing to the launch of Super Meteor 650 and favorable base. We expect revenues to increase by 1% qoq
EBIT 6,376 7,224 7,788 22.1 7.8
in 4QFY23, led by (1) 2% qoq increase in ASPs due to price increases and higher export mix and (2) 1%
PBT 7,525 9,071 9,706 29.0 7.0 qoq decline in volumes. We estimate EBITDA margin to increase by 50 bps qoq in 4QFY23, led by (1) RM
Tax 1,962 2,302 2,427 23.7 5.4 tailwinds and (2) richer product mix (higher mix of exports segment).
Reported PAT 6,101 7,408 8,999 47.5 21.5
We expect VECV to report an EBITDA margin of 9% in 4QFY23 versus 6.9% in 3QFY23 due to (1)
Adjusted PAT 6,101 7,408 8,999 47.5 21.5
operating leverage benefits and (2) richer product mix.
EPS (Rs/share) 22.4 27.2 33.1 47.5 21.5
Endurance Technologies
Net sales 20,788 20,952 20,553 (1.1) (1.9)
EBITDA 2,571 2,395 2,523 (1.9) 5.3 We expect consolidated revenues to decline by 2% qoq in 4QFY23, led by (1) 5% qoq decline in
standalone revenues owing to decline in 2W production volumes and (2) high single-digit qoq increase in
EBIT 1,590 1,379 1,498 (5.8) 8.6
European subsidiary revenues (in INR terms), led by recovery in EU PV production volumes, driven by an
PBT 1,700 1,448 1,567 (7.8) 8.2 improvement in supply chain.
Tax 338 366 395 16.8 7.8
Reported PAT 1,362 1,082 1,172 (14.0) 8.3
Extraordinaries — — — — — We expect consolidated EBITDA margin to improve by 90 bps qoq due to (1) RM tailwinds and (2)
Adjusted PAT 1,362 1,082 1,172 (14.0) 8.3 decline in energy cost prices as well as adjustments for EU OEMs, partly offset by negative operating
EPS (Rs/share) 9.7 7.7 8.3 (14.0) 8.3 leverage in the standalone business in 4QFY23.
Escorts Kubota
Net sales 18,614 22,637 21,730 16.7 (4.0) We expect revenues to increase by 17% yoy in 4QFY23, led by (1) 51% yoy increase in railway segment
EBITDA 2,434 1,903 2,168 (10.9) 13.9 revenues, driven by strong order book, (2) 21% yoy increase in construction equipment segment
EBIT 2,104 1,528 1,788 (15.0) 17.1 revenues, driven by 19% yoy increase in volumes, and (3) 12% yoy increase in tractor segment revenues
PBT 2,695 2,414 2,658 (1.4) 10.1 due to a 13% yoy increase in tractor volumes owing to good Rabi sowing, continued government
support and better crop realizations.
Tax 679 550 611 (10.0) 11.2
Reported PAT 2,016 1,864 2,047 1.5 9.8
Extraordinaries — — — — — We estimate EBITDA margin to increase by 160 bps on a qoq basis, mainly on account of (1) RM
Adjusted PAT 2,016 1,864 2,047 1.5 9.8 tailwinds, especially in the tractor segment and (2) operating leverage benefits in railways and
EPS (Rs/share) 19.9 16.9 18.5 (7.0) 9.8 construction equipment businesses in 4QFY23.
Exide Industries
Net sales 34,086 34,053 35,807 5.0 5.2
EBITDA 3,490 4,005 4,394 25.9 9.7 We estimate revenues to increase by 5% qoq in 4QFY23, led by (1) mid single-digit qoq increase in
EBIT 2,426 2,854 3,244 33.8 13.7 automotive replacement and industrial segment revenues and (2) 10-12% increase in 4W OEM segment
PBT 2,712 3,008 3,464 27.8 15.2 volumes, partly offset by high single-digit decline in 2W OEM segment volumes.
Tax 8,453 776 880 (89.6) 13.3
Reported PAT 41,197 2,232 2,584 (93.7) 15.8
Extraordinaries 46,938 — — — —
We expect EBITDA margin to increase by 50 bps to 12.3%, led by (1) RM tailwinds (lagged benefit of
Adjusted PAT 2,111 2,232 2,584 22.4 15.8
decline in lead prices) and (2) operating leverage benefit in 4QFY23.
EPS (Rs/share) 2.5 2.6 3.0 22.4 15.8
Hero Motocorp
Net sales 74,217 80,310 83,951 13.1 4.5
EBITDA 8,276 9,241 10,028 21.2 8.5
We expect revenues to increase by 5% qoq in 4QFY23, led by (1) 3% qoq increase in volumes and (2) 2%
EBIT 6,691 7,621 8,398 25.5 10.2
qoq increase in ASPs, mainly on account of price hikes taken during the quarter.
PBT 8,022 9,404 10,148 26.5 7.9
Tax 1,752 2,294 2,436 39.1 6.2
Reported PAT 6,271 7,111 7,713 23.0 8.5
Extraordinaries — — — — — We expect EBITDA margin to increase by 40 bps qoq, mainly driven by (1) marginal expansion in gross
Adjusted PAT 6,271 7,111 7,713 23.0 8.5 margins on account of decline in precious metals and (2) richer product mix (higher mix of spares),
EPS (Rs/share) 31.4 35.6 38.6 23.0 8.5 partly offset by higher other expenses on account of newer launches.
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Change (%)
Mahindra & Mahindra
Net sales 171,240 216,537 221,773 29.5 2.4
EBITDA 19,455 28,142 27,673 42.2 (1.7) We estimate a 2% qoq increase in revenues in 4QFY23, led by (1) 10% qoq increase in automotive
segment revenues, driven by 7.5% qoq increase in volumes and 2% qoq increase in ASPs due to price
EBIT 12,651 19,851 19,373 53.1 (2.4)
increases taken by the company and (2) 14% qoq decline in tractor revenues, mainly due to 15% qoq
PBT 14,479 25,865 21,173 46.2 (18.1) decline in volumes owing to seasonality.
Tax 2,808 4,296 5,293 88.5 23.2
Reported PAT 12,919 15,281 15,880 22.9 3.9 We estimate overall EBITDA margin to decline by 50 bps qoq, led by (1) inferior segmental mix (tractor
segment volume mix stood at 32% in 4QFY23 versus 38% in 3QFY23) and (2) higher launch cost in the
Extraordinaries 1,248 (6,289) — — —
automotive segment, partly offset by RM tailwinds (lagged benefit) in the tractor segment. We are
Adjusted PAT 11,976 20,035 15,880 32.6 (20.7) building automotive EBIT margin of 7% in 4QFY23 versus 6.7% in 3QFY23, mainly on account of (1)
operating leverage benefits and (2) better pricing. Further, we are building in tractor segment EBIT
EPS (Rs/share) 10.3 17.3 13.7 32.6 (20.7)
margin to improve by 20 bps qoq to 16.8% despite negative operating leverage, mainly on account of
EBITDA margin (%) 11.4 13.0 12.5 111 bps -52 bps lagged benefit of RM movement.
Mahindra CIE Automotive
Net sales 24,444 20,740 21,588 (11.7) 4.1 We expect consolidated revenues to increase by 4% qoq in 1QCY23, led by (1) 8% qoq increase in
EBITDA 3,079 3,169 3,343 8.6 5.5 standalone business revenues, driven by strong growth in PV and CV segment volumes, (2) 8% qoq
EBIT 2,213 2,399 2,543 14.9 6.0 decline in revenues of Aurangabad Electricals and Bill Forge due to lower 2W production volumes and
PBT 2,130 2,324 2,443 14.7 5.1 (3) 2-3% qoq increase in EU subsidiary revenues (in EUR terms), led by a gradual recovery in production
volumes.
Tax 516 376 611 18.4 62.6
Reported PAT 1,614 1,948 1,832 13.5 (6.0)
We expect consolidated EBITDA margin to improve by 20 bps qoq, led by (1) cost control measures and
Adjusted PAT 1,614 1,948 1,832 13.5 (6.0)
(2) benefit of lower energy prices in EU subsidiaries in 1QCY23.
EPS (Rs/share) 4.3 5.1 4.8 13.5 (6.0)
Maruti Suzuki
Net sales 267,400 290,443 323,776 21.1 11.5
EBITDA 24,268 28,331 34,908 43.8 23.2
We expect revenues to increase by 12% qoq, led by (1) 11% qoq increase in volumes and (2) 1% qoq
EBIT 17,794 21,228 27,756 56.0 30.8
increase in ASPs due to price increases and richer product mix (especially in the month of March).
PBT 21,980 29,542 36,058 64.0 22.1
Tax 3,591 6,029 7,752 115.9 28.6
Reported PAT 18,389 23,513 28,305 53.9 20.4
We estimate EBITDA margin to increase by 100 bps qoq, led by (1) operating leverage benefits and (2)
Adjusted PAT 18,389 23,513 28,305 53.9 20.4
favorable product mix, partly offset by higher advertisement spends on account of newer launches.
EPS (Rs/share) 60.9 77.8 93.7 53.9 20.4
MRF
Net sales 52,003 55,349 57,563 10.7 4.0
EBITDA 5,275 5,486 6,616 25.4 20.6 We expect revenues to increase by 4% qoq in 4QFY23, driven by volume increase on account of (1)
EBIT 2,173 2,337 3,466 59.5 48.3 strong growth in PCR and CV OEM segment volumes and (2) uptick in CV replacement segment
PBT 2,166 2,235 3,391 56.6 51.7 volumes.
Tax 598 543 854 42.9 57.4
Reported PAT 1,568 1,692 2,536 61.8 49.9
Adjusted PAT 1,568 1,692 2,536 61.8 49.9 We expect EBITDA margin to increase by 160 bps qoq due to RM tailwinds in 4QFY23.
EPS (Rs/share) 369.8 399.1 598.2 61.8 49.9
Samvardhana Motherson
Net sales 171,848 202,262 208,795 21.5 3.2
EBITDA 12,108 15,753 17,320 43.0 9.9 We estimate consolidated revenues to increase by 3% qoq in 4QFY23, owing to (1) low single-digit
revenue growth on a qoq basis in SMRPBV business (in INR terms) and (2) high single-digit qoq growth
EBIT 4,746 7,603 9,120 92.2 20.0
in wiring harness division, led by 10-12% qoq revenue increase in domestic business due to higher PV
PBT 4,547 7,330 8,820 94.0 20.3 production volumes as well as high single-digit qoq increase in PKC revenues.
Tax 2,659 2,172 2,646 (0.5) 21.8
Reported PAT 1,216 4,539 5,724 370.6 26.1
Extraordinaries (476) (10) — — —
We estimate consolidated EBITDA margin to improve by 50 bps qoq to 8.3%, led by a sharp decline in
Adjusted PAT 1,549 4,546 5,724 269.5 25.9
energy prices, resulting in lower other expenses in 4QFY23.
EPS (Rs/share) 0.2 0.7 0.8 269.5 25.9
Schaeffler India
Net sales 15,675 17,947 18,904 20.6 5.3
EBITDA 3,085 3,452 3,688 19.6 6.8 We expect revenues to increase by 5% qoq in 1QCY23, led by (1) 8% qoq increase in automotive
technologies segment - PVs, trucks and tractors (39% of the revenues), (2) 4-5% qoq increase in
EBIT 2,580 2,922 3,158 22.4 8.1
industrial segment, which includes 2Ws and off-highway segments (33% of the revenues) and (3) low
PBT 2,772 3,096 3,343 20.6 8.0 single-digit qoq increase in exports and automotive replacement segments (28% of the segment).
Tax 701 786 843 20.2 7.2
Reported PAT 2,071 2,310 2,501 20.7 8.3
Extraordinaries — — — — — We expect EBITDA margin to increase by 30 bps qoq basis in 1QCY23, mainly driven by (1) operating
Adjusted PAT 2,071 2,310 2,501 20.7 8.3 leverage benefits and (2) cost-control measures, partly offset by weaker segmental mix (lower mix of
EPS (Rs/share) 13.3 14.8 16.0 20.7 8.3 replacement and export segments).
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SKF
Net sales 10,390 10,772 11,203 7.8 4.0 We expect revenues to increase by 4% qoq in 4QFY23, led by (1) low single-digit qoq increase in the
EBITDA 1,594 1,841 1,911 19.9 3.8 automotive OEM segment (26% of the overall revenues), mainly led by double-digit increase in CV and
EBIT 1,443 1,670 1,736 20.3 3.9 PV segments volumes, (2) 5-8% qoq increase in industrial OEM and railways segment (19% of the overall
PBT 1,457 1,797 1,862 27.8 3.6 revenues) and (3) 3-5% qoq increase in automotive and industrial replacement segments (47% of the
overall revenues).
Tax 362 632 466 28.8 (26.3)
Reported PAT 1,095 1,167 1,398 27.7 19.8
Adjusted PAT 1,095 1,167 1,398 27.7 19.8 We expect EBITDA margin to remain flat on a qoq basis at 17.1% in 4QFY23.
EPS (Rs/share) 22.1 23.6 28.3 27.7 19.8
Sona BLW Precision
Net sales 5,500 6,850 7,293 32.6 6.5
EBITDA 1,354 1,862 1,971 45.6 5.9 We expect revenues to increase by 7% on a qoq basis, led by (1) 8-10% qoq increase in starter motor
EBIT 980 1,392 1,491 52.1 7.1 business, (2) pick-up in 2W traction motor segment revenues, led by increase in production volumes of
PBT 1,089 1,373 1,481 36.0 7.8 key customers, and (3) low single-digit growth in driveline business revenues in 4QFY23.
Tax 42 302 363 763.0 20.0
Reported PAT 1,047 1,071 1,118 6.8 4.4
Extraordinaries — — — — — We expect EBITDA margin to decline by 20 bps on a qoq basis, mainly led by weaker product mix (lower
Adjusted PAT 1,047 1,071 1,118 6.8 4.4 mix of driveline business), partly offset by (1) RM tailwinds and (2) operating leverage benefits in
EPS (Rs/share) 1.8 1.8 1.9 6.8 4.4 4QFY23.
Tata Motors
Net sales 784,391 884,886 939,404 19.8 6.2 We estimate standalone business revenues to increase by 25% qoq in 4QFY23, led by (1) a 21% qoq
EBITDA 87,416 96,430 116,862 33.7 21.2 increase in volumes and (2) a 3% qoq increases in ASPs due to the richer product mix. Overall, we expect
EBIT 23,095 35,712 56,062 142.7 57.0 EBITDA margins to improve to 10.6% in 4QFY23 from 8.8% in 3QFY23, led by (1) operating leverage
PBT 8,315 20,257 42,062 405.9 107.6 benefits and (2) richer product mix. We also expect domestic PV business EBITDA to improve to 7.8%
(+80 bps qoq), led by RM tailwinds in 4QFY23.
Tax 7,582 2,628 10,515 38.7 300.1
Reported PAT (10,328) 29,577 32,046 NM 8.3
Extraordinaries (11,726) 11,769 — — — We expect JLR volumes (ex-China JV) to increase by 3% qoq, led by an improvement in chip availability.
Overall, we expect revenues (ex-China JV) to increase by 2% qoq in 4QFY23. We expect reported EBITDA
Adjusted PAT (2,120) 21,339 32,046 NM 50.2
margins to improve by 60 bps qoq to 12% due to favorable model mix (higher mix of Land Rover). As a
EPS (Rs/share) (0.6) 5.6 8.4 NM 50.2 result, we expect JLR EBIT margin to come in at 4.3% in 4QFY23.
Timken
Net sales 6,674 6,094 6,703 0.4 10.0
EBITDA 1,798 1,037 1,340 (25.4) 29.3 We expect revenues to increase by 10% qoq in 4QFY23, led by (1) 20% qoq increase in CV segment
EBIT 1,574 813 1,115 (29.1) 37.2 revenues, (2) 5-10% qoq increase in replacement segment (18% of the revenues) & export segment
PBT 1,610 952 1,285 (20.2) 35.0 revenues (30% of the revenues) and (3) 8% qoq increase in railway segment revenues.
Tax 397 246 324 (18.4) 31.7
Reported PAT 1,213 706 962 (20.7) 36.2
We expect EBITDA margin to improve by 300 bps on a qoq basis to 20% in 4QFY23, mainly led by (1) RM
Adjusted PAT 1,213 706 962 (20.7) 36.2
tailwinds, (2) operating leverage benefits, and (3) improvement in product mix.
EPS (Rs/share) 16.1 9.4 12.8 (20.7) 36.2
TVS Motor
Net sales 55,303 65,454 66,574 20.4 1.7
EBITDA 5,568 6,589 6,378 14.5 (3.2) We estimate revenues to increase by 2% qoq in 4QFY23, led by (1) 3% qoq increase in ASPs and (2) 1%
EBIT 3,975 5,006 4,788 20.5 (4.4) qoq decline in volumes. The increase in ASPs can be attributed to (1) price hikes taken during the
PBT 3,727 4,755 4,538 21.8 (4.6) quarter, (2) higher mix of EV scooters, and (3) lower mix of the export segment.
Tax 982 1,227 1,180 20.2 (3.9)
Reported PAT 2,745 3,528 3,358 22.3 (4.8)
Extraordinaries — — — — — We forecast EBITDA margin to decline by 50 bps qoq, largely due to weaker product mix--higher mix of
Adjusted PAT 2,745 3,528 3,358 22.3 (4.8) EV scooters and lower mix of export and 3W segments, partly offset by higher mix of the ICE scooter
EPS (Rs/share) 5.8 7.4 7.1 22.3 (4.8) segment in 4QFY23. We expect gross margins to decline by 80 bps on a qoq basis in 4QFY23.
EBITDA margin (%) 10.1 10.1 9.6 -49 bps -49 bps
Uno Minda
Net sales 24,151 29,155 30,116 24.7 3.3
EBITDA 2,755 3,384 3,543 28.6 4.7 We expect 4QFY23 consolidated revenues to increase by 3% on a qoq basis, led by (1) 10-12% qoq
increase in PV segment production volumes and (2) ramp-up of new order wins in various segments,
EBIT 1,652 2,235 2,393 44.9 7.1
partly offset by (1) high single-digit decline in 2W production volumes and (2) lower ASPs due to decline
PBT 1,750 2,148 2,343 33.9 9.1 in Aluminium prices (LMT division).
Tax 483 659 586 21.4 (11.1)
Reported PAT 1,444 1,620 1,907 32.1 17.8
We expect EBITDA margin to increase by 20 bps qoq due to (1) RM tailwinds and (2) cost-control
Adjusted PAT 1,444 1,620 1,907 32.1 17.8
measures in 4QFY23.
EPS (Rs/share) 2.7 3.0 3.5 32.1 17.8
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Varroc Engineering
Net sales 16,520 17,168 16,309 (1.3) (5.0)
EBITDA 1,071 1,285 1,200 12.0 (6.6)
We expect consolidated revenues to decline by 5% qoq in 4QFY23, led by high single-digit decline in
EBIT 236 466 375 59.2 (19.5)
domestic 2W production volumes due to weak demand scenario, especially in the export markets.
PBT (40) 105 25 NM (76.1)
Tax 265 (103) 6 (97.6) NM
Reported PAT (2,850) 218 31 NM (85.9)
Extraordinaries (2,524) — — — —
We expect EBITDA margin to decline by 10 bps qoq, led by negative operating leverage, partly offset by
Adjusted PAT (326) 218 31 NM (85.9)
cost-control measures in 4QFY23.
EPS (Rs/share) (21.1) 1.6 0.2 NM (85.9)
Banks
AU Small Finance Bank
Net interest income 9,366 11,527 11,939 27.5 3.6 We expect NIM to be lower by ~20 bps qoq to ~5.8%. Strong NII will result in ~20% revenue growth yoy,
while elevated costs will result in ~18% yoy growth in operating profits. Some normalization in
Pre-provision profit 4,823 5,557 5,714 18.5 2.8 provisions will result in earnings growth of ~7% yoy (low tax rate in base quarter of 4QFY22).
Loan-loss provisions 932 326 578 (38.0) 77.2

PBT 3,891 5,231 5,136 32.0 (1.8)
We expect credit cost to stay low (~30 bps annualized). We expect discussion to focus on growth
Tax 430 1,302 1,418 229.6 8.9
visibility across vehicle/ SBL segments, margin trends and cost ratios.
PAT 3,461 3,928 3,717 7.4 (5.4)
EPS (Rs/share) 5.5 5.9 5.6 1.8 (5.0)
Axis Bank
Net interest income 88,191 114,593 123,239 39.7 7.5 4QFY23 is not a representative of the underlying business as it includes the integration of Citi's business
in the portfolio from March, 2023. The bank would be reporting a loss to mark down the goodwill on this
Fee income 37,580 41,010 42,423 12.9 3.4
acquisition. We expect a like-for-like loan growth to be similar to industry average at ~15% yoy. We are
Treasury income 2,310 4,280 250 (89.2) (94.2) building NIM to be flat qoq but the variables driving the actual NII performance would be challenging to
Pre-provision profit 64,660 92,775 97,765 51.2 5.4 forecast this quarter.
Loan-loss provisions 9,872 14,377 12,574 27.4 (12.5) We expect slippages of ~Rs40 bn (~2% of loans) mostly led by small ticket loans. Expect strong
PBT 54,788 78,398 85,190 55.5 8.7 commentary on asset quality performance and we see an improvement in NPL ratios aided by stronger
Tax 13,610 19,867 20,956 54.0 5.5 recovery/upgradations. We should expect the bank to make higher provisions for expenses pertaining to
PAT 41,178 58,531 64,234 56.0 9.7 the merger as well. Citi integration, near term growth trends and progress of NIM would be the key
discussion areas for the quarter.
EPS (Rs/share) 13.4 19.0 20.9 55.7 9.7
Bandhan Bank
Net interest income 25,398 20,804 22,811 (10.2) 9.6 The bank reported 10% loan growth on a yoy basis, while the sequential growth was strong at 12%. The
impact on NIM would be higher on account of lower slippages coming from the restructured portfolio
Pre-provision profit 25,214 19,222 16,789 (33.4) (12.7) (mostly the last quarter of peak slippages) and revision in interest rates on the MFI portfolio.
Loan-loss provisions 47 15,415 5,228 NM (66.1)
PBT 25,167 3,807 11,562 (54.1) 203.7 We expect slippages to be sharply lower as most of the loans have slipped from the restructured loan
portfolio. The bank has sold loans to ARC in 4QFY23, part of which would result in NPL reduction and
Tax 6,143 901 3,133 (49.0) 247.7
the balance as an increase in SR receipts which would also get marked down (no P&L impact). We
PAT 19,023 2,906 8,429 (55.7) 190.1 should expect positive commentary on growth, recovery in business and return ratios for the bank.
EPS (Rs/share) 11.8 1.8 5.2 (55.7) 190.1
Bank of Baroda
Net interest income 86,117 108,183 110,347 28.1 2.0
We expect solid operating profits of ~40% yoy led by strong revenue growth and stable costs. We are
Fee income 12,360 15,390 11,256 (8.9) (26.9)
buiding flat NIM qoq for 4QFY23. We expect loan growth to be solid at 15% yoy leading to ~30% yoy NII
Treasury income (6,830) 2,880 2,240 NM (22.2) growth.
Pre-provision profit 56,351 82,322 79,690 41.4 (3.2)
Loan-loss provisions 37,364 24,039 21,614 (42.2) (10.1)
PBT 18,988 58,283 58,076 205.9 (0.4) We expect slippages at ~1.7% (Rs38 bn) and offset by a meaningful quantum from recoveries and
upgrades from the retail and SME portfolio. We expect to hear commentary to be quite positive on asset
Tax 1,200 19,755 15,468 1,189.1 (21.7)
quality. Key discussion would be the sustainability of loan growth, deposit related challenges and NIM
PAT 17,788 38,527 42,608 139.5 10.6 outlook in the near term.
EPS (Rs/share) 3.4 7.4 8.2 139.5 10.6
Canara Bank
We expect bank to report healthy growth of ~20% yoy in PPOP, driven by strong revenue growth,
Pre-provision profit 62,019 69,521 74,514 20.1 7.2
resulting in earnings growth of >100% yoy. NIM is expected to expand only marginally qoq driven by
Fee income 3,950 3,330 3,774 (4.5) 13.3 elevated competition for deposits.
Treasury income 5,230 3,860 4,580 (12.4) 18.7
PBT 24,933 38,309 44,894 80.1 17.2 We expect slippages at 1.7% , but the trend of GNPL decline continues due to high recoveries and
upgradations. We expect discussion to focus on operating profit growth and its drivers given that asset
Tax 8,270 9,493 10,686 29.2 12.6
quality has improved significantly for the bank. Provisions are likely to be lower qoq at ~1.4%, mainly
PAT 16,662 28,815 34,208 105.3 18.7 towards improving PCR.
EPS (Rs/share) 9.2 15.9 18.9 105.3 18.7
City Union Bank
We expect loan growth to be lower than industry average at 10% yoy. We expect NII growth at ~15% yoy
Fee income 788 803 811 2.9 1.0
while non-interest growth would be muted due to lower treasury income contribution but partly offset\
Treasury income 502 353 183 (63.5) (48.2) by higher income from written-off loans.
PBT 2,690 2,728 2,961 10.1 8.5 We expect a slippages to be high (2.4% of loans or Rs2.5 bn) but we should see higher recovery and
Tax 600 550 674 12.4 22.6 upgradation as well. Key discussion would be on loan growth/demand, provisions and recovery in
PAT 2,090 2,178 2,287 9.4 5.0 RoA/RoE.
EPS (Rs/share) 2.8 2.9 3.1 9.4 5.0
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DCB Bank
Net interest income 3,805 4,460 4,626 21.6 3.7 We expect operating profit growth to be flat yoy as non-interest income growth is still weak and the
Fee income 1,043 854 912 (12.5) 6.8 headwind of higher investments in business continues. We expect NIM at 4% (within the band at which
Treasury income 30 50 63 110.0 26.0 the company prefers to operate). Loan growth should be strong at ~20% yoy leading to healthy NII
Pre-provision profit 2,208 1,941 2,214 0.3 14.1 growth of ~20% yoy.
Loan-loss provisions 676 407 392 (42.1) (3.7)

PBT 1,532 1,534 1,823 18.9 18.8 We expect PAT to increase sharply on account of lower loan-loss provisions. We expect a positive
Tax 398 396 456 14.5 15.1 commentary (directionally an improvement in NPL ratios from hereon) as the economy has opened up
PAT 1,134 1,139 1,367 20.5 20.1 well. Key discussion: loan demand and normalization of return ratios in FY2024-25.
EPS (Rs/share) 3.7 3.7 4.4 20.3 20.1
Equitas Small Finance Bank
Fee income 790 950 998 26.3 5.0 We expect NII growth of ~7% qoq (~25% yoy) in line with ~5% qoq loan growth. NIM is likely to be flat
Treasury income (30) 80 10 NM (87.5) qoq, given the low share of floating rate book and yield mix across segments. Costs will likely keep
Pre-provision profit 2,839 2,791 2,920 2.8 4.6 operating profit growth muted. Credit cost should be near the bank's FY2023 guidance.
Loan-loss provisions 1,232 499 704 (42.8) 41.1
PBT 1,607 2,292 2,216 37.9 (3.3)
Tax 412 591 592 43.5 0.2 Asset quality will continue to be strong with decline in slippages led by lower delinquencies from the
PAT 1,195 1,701 1,624 35.9 (4.5) restructured book. Recoveries and upgradations will also continue to be strong.
EPS (Rs/share) 1.0 1.4 1.5 53.3 7.9
Federal Bank
Net interest income 15,252 19,565 19,430 27.4 (0.7) The bank has reported a solid loan growth at ~20% yoy but deposit growth was slower at 13% yoy.
Fee income 3,850 4,550 — (100.0) (100.0) CASA deposits is growing slower than deposit growth. We expect NII growth at ~25% yoy with NIM flat
Treasury income 110 70 20 (81.8) (71.4) qoq to marginally higher. We expect operating profit growth of ~45% yoy on the back of better
Pre-provision profit 7,982 12,742 11,679 46.3 (8.3) management of cost ratios.
Loan-loss provisions 752 1,987 1,413 87.8 (28.9)

PBT 7,230 10,755 10,266 42.0 (4.5) We expect slippages at ~1.5% of loans (Rs6.5 bn) with no major large ticket loans. Gross NPL ratio is
Tax 1,824 2,719 2,640 44.7 (2.9) expected to be flat qoq. The key discussion points would be (a) liability side challenges, (b) near term
PAT 5,405 8,036 7,626 41.1 (5.1) outlook on growth and (c) near term normalization of RoA and RoEs.
EPS (Rs/share) 2.6 3.8 3.6 41.1 (4.5)
HDFC Bank
Net interest income 188,727 229,878 222,904 18.1 (3.0)
Fee income 56,303 60,526 63,246 12.3 4.5
We expect NII growth at ~18% yoy led by loan growth of ~18% yoy (bank has already reported headline
Treasury income (403) 2,614 3,034 NM 16.1
business performance). We expect NIM to be stable qoq. The growth is balanced across segments.
PBT 130,447 162,176 157,153 20.5 (3.1)
We expect gross NPL ratio to be stable qoq led by lower slippages (<2%), better recovery (expect a
Tax 29,895 39,581 38,447 28.6 (2.9)
bullish commentary of the situation on the ground) and strong loan growth outlook. Near term focus
PAT 100,552 122,595 118,706 18.1 (3.2) would be the status of the merger with HDFC Ltd (conversation on regulatory dispensations).
EPS (Rs/share) 18.1 22.0 21.4 18.1 (2.7)
ICICI Bank
We expect a PPOP to grow at ~33% yoy as we expect most operating metrics to be stable to positive.
Fee income 43,660 44,480 45,719 4.7 2.8
Loan growth to be solid at ~20% yoy driven by healthy contribution from all segments. The rate cycle is
Treasury income 1,290 360 2,130 65.1 491.7 still favorable but scope for NIM expansion is coming to an end. We are building flat NIM qoq at 4.7%.
Loan-loss provisions 10,689 22,574 20,225 89.2 (10.4) We expect provisions to remain at low levels given lower slippages and better trends on
PBT 92,240 110,138 116,392 26.2 5.7 recovery/upgradation. We are building slippages of ~2% (~Rs50 bn) but we see a solid commentary on
Tax 22,053 27,019 26,049 18.1 (3.6) recovery to continue resulting in lower stress coming from asset quality perspective. Key concern would
PAT 70,187 83,119 90,343 28.7 8.7 be the reversal of NIM as cost of funds is starting to move up sharply for the sector, especially with
slower CASA growth.
EPS (Rs/share) 10.1 11.9 12.9 28.2 8.7
IndusInd Bank
Net interest income 39,852 44,953 46,015 15.5 2.4 We expect a weak operating profit growth (~5% yoy) led by (1) lower contribution from treasury and (2)
Fee income 16,440 19,410 18,259 11.1 (5.9) high operating costs, led by recovery in business. Loan growth is healthy at 17% yoy, while NIM
Treasury income 2,590 1,353 797 (69.2) (41.1) (reported) is likely to be stable qoq at 4%. Non-interest income would be subdued due to lower treasury
income. Deposit growth at ~15% yoy is showing stable trends. We expect RoE at ~15% this quarter.
Loan-loss provisions 14,616 10,647 11,083 (24.2) 4.1
PBT 18,650 26,157 24,121 29.3 (7.8) We expect provisions to keep declining led by lower slippages and better asset quality trends. Both the
Tax 5,036 6,565 5,995 19.0 (8.7) MFI and vehicle finance portfolio is showing improving trends. We are building slippages of ~2.3% (Rs14
PAT 13,614 19,592 18,126 33.1 (7.5) bn). Key focus area would be the cost of funds given the sharp rise in raising deposits.
EPS (Rs/share) 17.6 25.3 23.4 33.1 (7.4)
Karur Vysya Bank
Net interest income 7,099 8,890 9,021 27.1 1.5 We expect strong earnings on the back of lower provisions and healthy operating profit growth.
Fee income 1,856 2,416 3,175 71.0 31.4 Operating profits to grow ~40% yoy on the back of 13% yoy loan growth, stable NIM and importantly,
Pre-provision profit 4,413 6,889 6,187 40.2 (10.2) operating leverage. We don’t see the bank having an issue at the operating level currently.
We expect NPLs to decline to 2.5% levels led by lower slippages (1% of loans or Rs1.5 bn). Expect
PBT 3,012 3,249 4,894 62.5 50.7
commentary for FY2024 to be positive with greater emphasis on normalization of return ratios. Near
Tax 877 356 1,845 110.3 418.7 term concern to be addressed would be on loan demand and growth outlook.
PAT 2,135 2,893 3,049 42.8 5.4
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Punjab National Bank
We expect the bank to report healthy operating profit growth of ~14% yoy resulting in strong earnings
Fee income 15,320 13,310 11,284 (26.3) (15.2)
growth (low base) in spite of higher provisions. Loan growth trends are expected to be modest (~2%
Treasury income 120 (1,070) 7,410 NM NM qoq) with NIM up marginally qoq driven by higher yields.
Loan-loss provisions 48,515 47,133 57,487 18.5 22.0
PBT 4,133 10,026 11,149 169.8 11.2 We expect slippages to be broadly flat qoq at ~2.1%. Overall GNPL reduction will continue as recoveries
Tax 2,117 3,737 2,876 35.8 (23.0) are expected to be healthy. We expect incrementally positive commentary on asset quality and net NPL
PAT 2,016 6,289 8,273 310.4 31.6 reduction..
EPS (Rs/share) 0.2 0.6 0.8 310.4 31.6
SBI Cards and Payment Services
We expect revenues to grow at ~15% yoy, while NII growth is expected to grow ~3% yoy on the back of
Net interest income 9,987 11,446 10,313 3.3 (9.9) ~25% yoy growth in receivables (share of revolvers likely to move up from FY2022 levels). Non-interest
income growth of ~20% yoy is primarily driven by recovery in spends (~25% yoy). Provisions are
Pre-provision profit 11,720 12,174 13,231 12.9 8.7 expected to increase by ~45% yoy as incremental provisions is mainly on account of higher spends and
normalization of business.
We expect the company to deliver a positive commentary on (a) asset quality with recovery in
PBT 7,792 6,843 7,440 (4.5) 8.7
discretionary categories like travel and hospitality, and (b) spend growth for FY2023-24. Key monitorable
Tax 1,984 1,749 1,927 (2.9) 10.2 would be the ruling on MDR changes, if any.
PAT 5,809 5,095 5,513 (5.1) 8.2
State Bank of India
We expect an operating profit growth of ~25% yoy led by strong NII growth. We are building 25% yoy NII
Fee income 80,230 59,280 85,328 6.4 43.9
growth on the back of 15% yoy loan growth. We are building stable NIM qoq, but do see a possibility of a
Treasury income 1,780 29,380 1,540 (13.5) (94.8) small expansion given the structure of loan book and negligible need for deposits to fund this growth.
PBT 124,794 194,587 205,347 64.5 5.5 We expect slippages at ~1.5% of loans (~Rs115 bn) mostly driven by SME and retail, while corporate will
Tax 33,659 52,534 46,449 38.0 (11.6) continue to hold up relatively well. We should see further improvement in NPL ratios as recovery and
PAT 91,135 142,053 158,897 74.4 11.9 upgrades are likely to be strong in 4QFY23.
EPS (Rs/share) 10.2 15.9 17.8 74.4 11.9
Ujjivan Small Finance Bank
Net interest income 5,440 6,970 7,361 35.3 5.6 We expect strong NII growth of ~6% qoq (~35% yoy) in 4QFY23. Margin is expected to see some
Pre-provision profit 2,172 3,889 4,033 85.6 3.7 pressure, but PPOP is expected to grow ~4% qoq, which combined with low provisions will result in
healthy earnings print for the bank.
Fee income 620 640 781 26.0 22.1
Loan-loss provisions 438 (2) 395 (9.7) NM
PBT 1,734 3,891 3,637 109.7 (6.5)
We expect credit cost to be higher qoq (~0.7% annualized) as portfolio starts to normalize. Slippages
Tax 469 960 1,045 122.7 8.9
expected to be at ~2.2%, but recoveries/ upgradations are likely to be good.
PAT 1,265 2,932 2,592 104.9 (11.6)
EPS (Rs/share) 0.7 1.4 1.2 85.8 (10.4)
Union Bank
We expect earnings to increase ~60% yoy driven by ~25% yoy growth in operating profit and flat
Fee income 18,270 17,100 17,232 (5.7) 0.8
provisions yoy. NII growth is expected to be strong at ~35% yoy driven primarily by both growth and
Treasury income 8,350 1,680 1,620 (80.6) (3.6) some improvement in margin.
PBT 19,020 35,832 33,073 73.9 (7.7) We expect slippages to be ~1.7% and credit cost to be at ~2.0%, largely towards reducing net NPLs.
Tax 4,624 13,384 10,136 119.2 (24.3) Apart from recovery pipeline, discussion is likely to shift towards loan growth drivers, margins and
PAT 14,396 22,448 22,937 59.3 2.2 capital raise.
EPS (Rs/share) 2.1 3.3 3.4 59.3 2.2
YES Bank
Net interest income 18,195 19,706 19,328 6.2 (1.9) We expect NII to grow ~6% yoy reflecting the underlying business growth. Business momentum is
gaining traction across retail and MSME segments but overall loan growth to be lower than industry
Treasury income (260) 1,370 220 NM (83.9) average at ~11% yoy. Deposit growth at 11% yoy is meeting the business requirements but has
significantly decelerated in recent quarters. We expect NIM at ~2.5% (stable qoq). Revenue growth
Pre-provision profit 7,742 9,136 7,600 (1.8) (16.8) pressure to remain high especially led by weak treasury income.
Loan-loss provisions 2,710 8,448 3,230 19.2 (61.8)
PBT 5,032 689 4,370 (13.2) 534.4 We should see healthy traction on recovery and upgrades in 4QFY23 (mostly reflected in changes to the
value of security receipts). Earnings impact is difficult to forecast given the nature of provisioning policy.
Tax 1,357 174 1,153 (15.0) 564.2
Focus is shifting towards rebuilding the business for the bank. Conversations would be on growth and
PAT 3,675 515 3,217 (12.5) 524.3 return to normalised levels of business operations.
EPS (Rs/share) 0.1 0.0 1,439.7 NM NM
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Diversified Financials
360 One
We expect IIFL Wealth's recurring AUM to grow ~2% qoq in 4QFY23 (7% in 3QFY23) owing to fall in
Revenues 4,220 4,150 3,829 (9.3) (7.7)
equity indices and likely slower flow momentum, especially in higher yielding strategies. Impact of
volatile markets on flows remains a key monitorable. PBT (ex. other income) to decline 3% yoy, due to
PBT 2,140 2,232 2,048 (4.3) (8.3) lower transactional income.
Yields in the recurring business will likely decline qoq reflecting the mix effect. We bake in lower
PAT 1,678 1,801 1,541 (8.2) (14.4)
transactional income qoq but this line item remains volatile. We expect core cost-to-income (excluding
other income and ESOP expenses) to be higher qoq at ~50%, as we establish a new base for expense
EPS (Rs/share) 4.6 5.0 4.3 (6.0) (14.2) line given recent changes in compensation structure.
Aavas Financiers
Pre-provision profit 1,357 1,415 1,540 13.5 8.9 We expect Aavas to report 8% qoq AUM growth in 4QFY23, translating to 24% yoy growth (23% yoy in
Provisions (104) 35 (23) (78.0) (165.4) 3QFY23). NIM will likely expand 10 bps qoq due to sharp (~50 bps) increase in lending rates in 3QFY23,
PBT 1,461 1,380 1,563 7.0 13.3 whose benefit will be realized in 4QFY23.
Tax 304 307 332 9.1 8.1
PAT 1,157 1,073 1,231 6.4 14.8
EPS (Rs/share) 14.7 13.6 15.6 6.4 14.9 We expect cost-to-average AUM to remain high at 3.9% (3.5-3.9% in last four quarters) due to higher
NIM (%) 8.2 8.1 8.2 -7 bps 9 bps investments in infrastructure/IT. We model credit cost of -7 bps on the back of strong collections.
Core PBT 888 1,029 1,106 24.6 7.5
Aptus Value Housing Finance
Pre-provision profit 1,548 1,762 1,815 17.2 3.0 We expect Aptus to deliver 6.4% qoq AUM growth (6.3-7.8% in last four quarters) and 30% yoy, driven by
Provisions 105 78 93 (11.2) 19.6 23% disbursement growth in 4QFY23E and 45% yoy for FY2023E . NIM will expand marginally (up 9 bps
PBT 1,443 1,684 1,722 19.3 2.2 to 13.2%) to reflect refinance from NHB and reduction of liquidity on balance sheet.
Tax 345 429 372 7.9 (13.3)
PAT 1,099 1,256 1,350 22.9 7.5
EPS (Rs/share) 2.3 2.5 2.7 22.1 9.0 We expect increased business activity to keep cost-to-average AUM elevated at 2.9% (2.4-3.1% over the
NIM (%) 13.5 13.1 13.2 -30 bps 8 bps last four quarters).We model credit cost of 58 bps for 4QFY23E.
Core PBT 1,432 1,656 1,734 21.1 4.7
Bajaj Finance
Pre-provision profit 39,671 49,519 51,142 28.9 3.3 Bajaj Finance reported 7% qoq loan growth (6% qoq in 3QFY23) driving 25% yoy growth/29% yoy growth
Provisions 7,016 8,413 9,035 28.8 7.4 in core AUMs. We expect almost flat NIM qoq; 54 bps yoy NIM expansion reflects large IPO loans in the
PBT 32,655 41,106 42,107 28.9 2.4 base period (March 31, 2022).
Tax 8,460 10,387 10,707 26.6 3.1
PAT 24,195 30,719 31,400 29.8 2.2
EPS (Rs/share) 40.1 50.9 52.0 29.8 2.2 We expect cost-to-average AUM ratio to remain high at 4.6%, similar to 3QFY23. We model credit costs
NIM (%) 10.1 10.7 10.7 53 bps -5 bps of 1.5% for 4QFY23E, similar to 3QFY23.
Core PBT 35,870 45,493 47,382 32.1 4.2
Cholamandalam
We expect loan growth to acclerate to 33% yoy from 31% in 3QFY23 as disbursements across segments
Provisions (174) 1,589 773 NM (51.4)
continue to remain strong.
PBT 9,294 9,208 9,805 5.5 6.5
Tax 2,398 2,365 2,535 5.7 7.2
PAT 6,896 6,843 7,271 5.4 6.3
Sharper rise in cost of funds due to MCLR reset will lead to 15 bps qoq NIM compression even as the
EPS (Rs/share) 8.4 8.3 8.9 5.4 6.3
company has recently raised lending rates across products. Credit cost will likely remain low, in line with
NIM (%) 7.6 7.1 6.9 -67 bps -16 bps seasonal trends.
Core PBT 9,101 10,616 10,544 15.9 (0.7)
Computer Age Management Services
Revenues 2,474 2,507 2,563 3.6 2.3
We expect ~1% qoq growth in AAUM with broadly stable share of equity (~46%) on a sequential basis.
PBT 989 978 944 (4.6) (3.5)
We build in stable calculated yields at ~2.7 bps qoq (for asset linked MF revenues) reflecting impact of
PAT 738 736 716 (3.1) (2.7)
asset growth offset by mix effect. We expect largely stable core cost-to-income ratio at ~63%. We build
revenue traction on non-MF businesses (off low base) which will likely be an area of focus apart from
EPS (Rs/share) 15.0 14.7 14.4 (4.2) (2.5) core yields.
Five Star Business Finance
Pre-provision profit 1,673 2,062 2,135 27.6 3.6 We expect Five Star's AUM growth to remain strong at 8.4% qoq and 34% yoy in 4QFY23E (8.9% in
3QFY23 and 8.2% in 2QFY23), driven by branch expansion. We expect qoq NIM compression of 90 bps
Provisions 83 47 103 23.8 120.0
to 20.5% driven by 20 bps decline in yields, 30 bps increase in cost of borrowings, and bolstering of
PBT 1,590 2,015 2,032 27.8 0.9 liquidity buffers.
Tax 411 505 501 21.7 (0.9)
PAT 1,179 1,510 1,532 30.0 1.5 Cost-to-AAUM ratio will likely remain elevated at 7.8% in 4QFY23E (6.8-8.0% over the past four quarters)
EPS (Rs/share) — 5.2 5.3 — 2.1 owing to investment in branch network and collection infrastructure. We pen down credit cost of 60 bps
NIM (%) 20.3 21.4 20.5 21 bps -84 bps for the quarter
HDFC
Pre-provision profit 50,235 49,818 49,902 (0.7) 0.2 We expect HDFC to deliver 3.7% qoq individual loan growth (16% yoy, 3.4-4% qoq in the last three
quarters) reflecting marginal weakness in retail disbursements. Overall loan growth is lower at 11% due
Provisions 4,010 3,700 1,862 (53.6) (49.7)
to slower growth in the non-individual segment. Core NIMs will likley expand marginally (up 5 bps qoq)
PBT 46,225 46,118 48,040 3.9 4.2 reflecting recent rate hikes.
Tax 9,222 9,210 10,821 17.3 17.5
PAT 37,003 36,908 37,219 0.6 0.8
We expect cost-to-AAUM ratio of 34 bps (35 bps in 2QFY23) and pen down credit cost of 27 bps for the
EPS (Rs/share) 20.4 20.4 20.5 0.6 0.8
quarter. HDFC reported a loss of Rs2.7 bn on FV changes in investments (gain of Rs2.7 bn in 4QFY22)
NIM (%) 3.3 3.2 3.1 -20 bps -11 bps and dividend income of Rs2 bn (Rs1.3 bn in 4QFY22).
Core PBT 42,545 44,340 42,038 (1.2) (5.2)
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Home First Finance
Net interest income 851 1,083 1,193 40.2 10.1
Pre-provision profit 659 817 901 36.7 10.2 We expect AUM growth of 7.9% qoq (7.6-8.4% qoq growth during the last 4 quarters), thereby driving
Provisions 27 60 83 210.8 39.3 35% yoy growth; disbursements will likely grow by 34% yoy reflecting strong underlying momentum. NIM
PBT 632 757 817 29.3 7.9 will likely expand 17 bps qoq, following share rise in lending rates.
Tax 30 170 181 498.0 6.4
PAT 602 587 636 5.7 8.3
EPS (Rs/share) 6.7 6.5 7.7 15.1 18.6 We expect cost-to-average AUM to remain flat at 2.7% in 4QFY23E. We pen down credit cost of 48 bps
NIM (%) 8.2 8.0 8.2 1 bps 17 bps for the quarter.
Core PBT 521 740 771 48.0 4.1
L&T Finance Holdings (Lending business)
Net interest income 13,950 16,530 17,258 23.7 4.4 We expect LTFH to deliver 10.5% qoq retail loan growth driven by strong disbursements across product
Pre-provision profit 10,600 (14,910) 12,783 20.6 NM lines; overall loan book growth will be muted at 3% qoq due to rundown in the wholesale segment. We
Provisions 5,930 5,430 6,164 3.9 13.5 expect NIM to expand 30 bps qoq to 7.7% (6.5-7.4% in the last four quarters) primarily driven by the retial
segment.
PBT 4,670 (20,340) 6,619 41.7 NM
PAT 3,450 (16,470) 5,287 53.2 NM Continued investments in new business lines will lead to elevated cost-to-income ratio of 37% (37% in
both 3QFY23 and 2QFY23). We build in credit cost of 2.8% as compared to 2.5-3.5% over the last four
Core PBT 10,600 11,960 12,783 20.6 6.9 quarters.
LIC Housing Finance

Pre-provision profit 15,069 13,557 14,797 (1.8) 9.1 We expect low (7% yoy) growth in retail disbursements in 4QFY23 reflecting slowdown in demand for
Provisions 1,925 7,626 2,996 55.7 (60.7) housing loans in prime segment. Recent home loan rate hike will support NIM expansion (up 15 bps
PBT 13,144 5,931 11,801 (10.2) 99.0 qoq) to 2.56%, even as the borrowings cost continues to inch up.
Tax 1,958 1,127 2,241 14.5 98.8
PAT 11,186 4,804 9,561 (14.5) 99.0
EPS (Rs/share) 22.2 9.5 18.9 (14.5) 99.0
Credit costs will likley be stable at 44 bps, in line with management's long term guidance.
NIM (%) 2.6 2.4 2.6 -8 bps 15 bps
Core PBT 14,976 13,547 14,885 (0.6) 9.9
Mahindra & Mahindra Financial
Pre-provision profit 8,979 9,983 9,882 10.1 (1.0) Mahindra Finance has reported 6% qoq and 27% yoy loan growth in 4QFY23E. We expect NIM to
Provisions 639 1,551 1,339 109.7 (13.7) compress 10 bpq qoq to 8.1%; we expect about 50 bps qoq increase in borrowing's cost, partially offset
PBT 8,341 8,431 8,543 2.4 1.3 by recent rise in lending rates.
Tax 2,333 2,142 2,276 (2.4) 6.3
PAT 6,008 6,290 6,812 13.4 8.3
Strong collection effeciency (99% in 4QFY23, 100% in 4QFY22) has driven reduction in gross stage-3
EPS (Rs/share) 4.9 5.1 5.1 4.3 (0.4)
loans to 4.6% (5.9% in 3QFY23, 7.7% in 4QFY22). We expect credit cost to remain belign at 0.67% (0.82-
NIM (%) 9.0 8.2 8.1 -95 bps -13 bps 3.19% over the last three quarters, 0.4% in 4QFY23).
Core PBT 8,908 10,100 9,823 10.3 (2.7)
Muthoot Finance
Rise in gold prices (11% qoq) will likley drive 5% qoq loan growth even as competition from banks
Provisions (700) 557 (418) (40.2) (175.1)
remains high.
PBT 12,918 12,068 13,764 6.5 14.1
Tax 3,315 3,051 3,564 7.5 16.8
PAT 9,603 9,017 10,200 6.2 13.1
EPS (Rs/share) 24.0 22.6 25.5 6.2 13.1
Higher gold prices and buyback of high-yield bonds will drive NIM (up 40 bps qoq to 12.3%).
NIM (%) 12.2 11.9 12.3 6 bps 41 bps
Core PBT 12,136 12,384 13,069 7.7 5.5
Shriram Finance
We expect loan growth to remain stable at 5% qoq, similar to 3QFY23. Rise in borrowings cost will lead
Provisions 9,380 9,173 10,144 8.1 10.6
to 50 bps qoq compression in NIM to 10.15%.
PBT 17,689 23,844 22,618 27.9 (5.1)
Tax 3,792 6,074 5,701 50.3 (6.1)
PAT 13,896 17,770 16,917 21.7 (4.8)
EPS (Rs/share) 37.3 47.7 45.4 21.7 (4.8) Cost-to-AAUM ratio to likely remain stable qoq at 2.8%, credit cost/AUM at 2.2%. 4QFY22 figures are
NIM (%) 10.2 10.7 10.2 -2 bps -52 bps proforma estimates on merged basis.
Core PBT 26,031 31,601 31,673 21.7 0.2
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Insurance
HDFC Life Insurance
We expect 27% yoy APE growth for HDFC Life in 4QFY23E (18% and 22% in Jan and Feb 2023
APE 30,490 32,600 38,743 27.1 18.8
respectively) driven by sunset period sales of high-ticket non-par policies.
VNB 8,950 8,750 11,566 29.2 32.2 Despite pick up in non-par sales in 4QFY23E we expect margin expansion to be muted at 50 bps due to
VNB margin (%) 29.4 26.8 29.9 50 bps 301 bps lower margins in the erstwhile Exide Life business.
SBI Life Insurance

We expect 14% yoy APE growth for SBI Life in 4QFY23E (9% and 0% in Jan and Feb 2023 respectively)
APE 41,200 54,400 46,772 13.5 (14.0)
due to likely stronger momentum in the last month of the year.
VNB 11,078 15,148 13,512 22.0 (10.8) We expect 200 bps yoy margin expansion in 4QFY23E driven by higher share of non-par policies in the
VNB margin (%) 26.9 27.8 28.9 199 bps 104 bps product mix.
AMCs
ABSL AMC
Revenues 3,235 3,140 3,091 (4.5) (1.6) We are building in ~2% qoq decline in overall and equity AUM in 4QFY23E for the domestic MF business
market share loss in equity. We expect largely stable revenue yields with downside risks given driven by
PBT 2,093 2,227 1,995 (4.7) (10.4) mix effect.
PAT 1,585 1,663 1,501 (5.3) (9.8) We expect 5% earnings decline yoy, reflecting 4% yoy growth in fee income and 3% yoy growth in
EPS (Rs/share) 5.5 5.8 5.2 (5.3) (9.8) operating expenses. Focus to remain on market share loss in equity segment.
HDFC AMC
Revenues 5,163 5,596 5,613 8.7 0.3 We are building in ~1% qoq increase in QAAUM in 4QFY23E for the domestic MF business reflecting
growth in equity indices and higher equity market share. Average Nifty-50 was down ~4% qoq. We
PBT 4,427 5,005 4,717 6.6 (5.7) expect largely stable revenue yields driven by ongoing pressure on fees, partly offset by mix effect.
PAT 3,436 3,692 3,496 1.8 (5.3)

We expect ~5% sequential decline in earnings growth due to lower other income, yield pressure and
stable operating expenses. Core PBT (i.e. ex other income and ESOP costs) are expected to be flat qoq.
EPS (Rs/share) 16.1 17.3 16.4 1.6 (5.5)
Nippon AMC
Revenues 3,380 3,538 3,561 5.4 0.7 We are building marginal growth QAAUM in 4QFY23E for the domestic MF business reflecting decline in
equity indices and stable equity market share. Average Nifty-50 was is down ~5% qoq. Focus on the
quarter to remain on market share outlook given improved fund performance, yield trajectory and cost
PBT 2,344 2,664 2,487 6.1 (6.6) control.
PAT 1,748 2,048 1,803 3.1 (12.0) We expect ~3% yoy earnings growth as ~5% yoy revenue growth is offset ~4% growth in operating
EPS (Rs/share) 2.8 3.3 2.9 3.1 (12.0) expenses. We expect flat yields sequentially on stable asset mix.
UTI AMC
Revenues 2,950 2,836 2,839 (3.8) 0.1 We are building in ~1% qoq increase in QAAUM in 4QFY23E for the domestic MF business reflecting
growth in non-equity AUM while building marginal decline in equity due to MTM and decline in market
PBT 973 1,024 1,288 32.3 25.8 share.
PAT 539 600 926 71.8 54.3 We expect 8% yoy core PBT growth led by similar decline in operating expenses (base quarter had
lumping of costs). Higher other income to support 6% income growth while operating revenues are
EPS (Rs/share) 4.2 4.7 7.3 71.8 54.3 expected to decline 4% yoy due to yield pressure.
Capital Goods
ABB
Net sales 19,684 24,269 23,903 21.4 (1.5)
EBITDA 1,879 3,643 2,804 49.2 (23.0)
We expect healthy 21% yoy growth, led by strong yoy growth across segments. Order inflow was strong
EBIT 1,622 3,375 2,510 54.8 (25.6)
for the company during CY2022.
PBT 1,980 4,002 2,995 51.3 (25.2)
Tax 1,212 943 755 (37.7) (20.0)
Reported PAT 3,731 3,053 2,241 (39.9) (26.6)
Extraordinaries 2,963 (6) — — — We expect sequential moderation in EBITDA margins to sub-12% levels from 15% seen in 3QFY23. The
Adjusted PAT 3,731 3,053 2,241 (39.9) (26.6) same is still up 220 bps yoy due to gross margin improvement assumed (100 bps impact) and benefits
EPS (Rs/share) 17.6 14.4 10.6 (39.9) (26.6) of operating leverage.
Bharat Electronics
Net sales 63,249 41,310 64,416 1.8 55.9
EBITDA 15,678 8,535 15,846 1.1 85.7
We assume revenue growth to be flat yoy and down on a two-year basis. The same is reflective of the
EBIT 14,668 7,527 14,621 (0.3) 94.2
state of the order backlog during 9MFY23.
PBT 15,266 8,004 15,114 (1.0) 88.8
Tax 3,848 2,017 3,903 1.4 93.6
Reported PAT 11,418 5,988 11,210 (1.8) 87.2
Adjusted PAT 11,418 5,988 11,210 (1.8) 87.2 We model a broadly stable yoy EBITDA margin of 24.6%.
EPS (Rs/share) 1.6 0.8 1.5 (1.8) 87.2
BHEL
Net sales 80,617 52,634 85,929 6.6 63.3
EBITDA 11,519 1,443 37 (99.7) (97.4)
EBIT 10,660 818 (679) (106.4) (183.0) We expect ~7% yoy improvement in revenues, largely driven by the power segment.
PBT 10,982 414 (1,024) (109.3) (347.2)
Tax 1,893 104 352 (81.4) 237.4
Reported PAT 9,089 310 (1,376) (115.1) (543.8)
Extraordinaries — — — — — We expect EBITDA to remain negative on the weak executable backlog and stiff raw material prices. We
Adjusted PAT 9,089 310 (1,376) (115.1) (543.8) expect employee cost to remain elevated. Furthermore, we expect other expenses to move up. Previous
EPS (Rs/share) 2.6 0.1 (0.4) (115.1) (543.8) quarters had the benefit of provision write-back in other expenses.
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Carborundum Universal
Net sales 8,693 11,871 12,137 39.6 2.2
EBITDA 1,109 1,710 1,736 56.5 1.5 We expect a healthy 40% yoy improvement in revenues on incremental impact of recent acquisitions
and improved traction for all segments on yoy basis. On a qoq basis, we expect a 2% growth in revenues,
EBIT 766 1,237 1,329 73.5 7.4
largely driven by the abrasives business and net of impact of the Ruble's depreciation versus the Indian
PBT 866 1,409 1,463 68.8 3.8 Rupee.
Tax 343 340 351 2.4 3.4
Reported PAT 570 1,091 1,086 90.4 (0.5)
Extraordinaries — — — — — We model EBITDA margin to be flat qoq. The low base of 4QFY22 drives yoy improvement in the EBITDA
margin. The Ruble's depreciation versus the Euro would support the margin in 4QFY23, and compensate
Adjusted PAT 570 1,091 1,086 90.4 (0.5)
for the normalization of commodity prices in the EMD segment. We expect a modest EBITDA loss
EPS (Rs/share) 3.0 5.8 5.8 90.4 (0.5) impact on PAT from recently acquired companies, i.e., Rhodius and Awuko.
Cochin Shipyard
Net sales 12,114 6,309 9,972 (17.7) 58.1
EBITDA 2,992 1,539 2,527 (15.5) 64.3
EBIT 2,851 1,394 2,228 (21.8) 59.8 We expect a declining top-line on yoy basis due to the tapering of IAC execution.
PBT 3,863 1,507 3,497 (9.5) 132.1
Tax 1,022 323 868 (15.1) 169.0
Reported PAT 2,841 1,184 2,629 (7.5) 122.0
Extraordinaries — — — — — We expect a broadly stable EBITDA margin of 25.3%, up ~60 bps yoy. Margins are subject to quarterly
Adjusted PAT 2,841 1,184 2,629 (7.5) 122.0 fluctuations depending on the revenue mix. Long-term margins will decline for the company, as
EPS (Rs/share) 21.6 9.0 20.0 (7.5) 122.0 revenues from the IAC project starts tapering off.
Cummins India
Net sales 14,936 21,805 17,983 20.4 (17.5)
EBITDA 2,066 4,122 2,987 44.6 (27.5)
We expect 20% yoy growth in revenues, translating to a ~7.5% growth on a 4-year CAGR basis. We
EBIT 1,719 3,779 2,623 52.6 (30.6)
expect export revenues to remain largely flat qoq.
PBT 2,437 4,790 3,744 53.7 (21.8)
Tax 545 1,188 915 67.8 (23.0)
Reported PAT 1,891 3,601 2,972 57.1 (17.5)
Extraordinaries — — 143 — —
We build in a qoq moderation in the margin of 230 bps, as 3QFY23 had the advantages of (1) price hikes,
Adjusted PAT 1,891 3,601 2,829 49.6 (21.5)
(2) cost reduction, (3) positive impact of arrears, and (4) currency depreciation benefits.
EPS (Rs/share) 6.8 13.0 10.2 49.6 (21.5)
G R Infraprojects
Net sales 22,681 18,988 21,171 (6.7) 11.5
EBITDA 4,030 2,769 3,161 (21.6) 14.2
We expect revenues to remain largely flat yoy on a strong base of 4QFY22 and lack of order inflows
EBIT 3,413 2,156 2,423 (29.0) 12.4
during 9MFY23.
PBT 3,471 2,329 2,431 (30.0) 4.4
Tax 819 588 617 (24.6) 4.9
Reported PAT 2,652 1,741 1,814 (31.6) 4.2
We expect EBITDA margin of 14.9%, up 30 bps qoq on improved execution from HAM projects and lower
Adjusted PAT 2,652 1,741 1,814 (31.6) 4.2
RM prices.
EPS (Rs/share) 27.4 18.0 18.8 (31.6) 4.2
IRB Infrastructure
Net sales 14,336 15,142 16,717 16.6 10.4
EBITDA 6,417 7,446 7,565 17.9 1.6
We expect 17% yoy growth in revenues for IRB on improved execution of under-construction projects
EBIT 4,528 5,296 5,365 18.5 1.3
and toll revenues. Execution will ramp up further from Ganga Expressway in the coming quarters.
PBT 3,029 2,185 2,589 (14.5) 18.5
Tax 679 646 784 15.4 21.2
Reported PAT 1,746 1,414 1,334 (23.6) (5.7)
Extraordinaries — — — — — We model a 4QFY23 margin of 25.5% in the construction segment and 89% in the BOT segment. We
expect interest charges to decrease yoy on transfer of the VK-1 project to a public InVIT, while we expect
Adjusted PAT 1,746 1,414 1,334 (23.6) (5.7)
depreciation charges to remain high yoy on improved toll collections. Losses from road SPVs may move
EPS (Rs/share) 0.3 0.2 0.2 (23.6) (5.7) up in 4QFY23 on commencement of revenue share from the KG tollway and Hapur Moradabad projects.
Kalpataru Power Transmission
Net sales 20,100 35,090 41,062 104.3 17.0
EBITDA 1,710 3,050 3,654 113.7 19.8 We expect revenues to grow 15% yoy on merged standalone financials of KPTL and JMC. Order inflow
EBIT 1,450 2,300 2,655 83.1 15.5 has remained healthy with the merged entity receiving nearly Rs252 bn on inflows in FY2023. We expect
PBT 1,340 1,650 2,057 53.5 24.6 this to aid revenue growth in the coming quarters.
Tax 470 540 679 44.5 25.8
Reported PAT 870 1,110 1,377 58.3 24.1
Extraordinaries — — — — — We model a sequential improvement in EBITDA margins to around 9% for the quarter to bake in the
Adjusted PAT 870 1,110 1,377 58.3 24.1 decline in commodity prices. The key monitorables would be execution growth, moderation in working
EPS (Rs/share) 5.3 6.8 8.4 58.3 24.1 capital and decline in pledging levels.
KEC International
Net sales 42,748 43,746 53,391 24.9 22.0
EBITDA 2,517 1,999 2,937 16.7 46.9 We model 25% yoy growth in revenues, led by a strong order book. Among segments, we expect civil
EBIT 2,098 1,591 2,508 19.6 57.7 and T&D projects to drive revenue growth. Order inflow for the company has remained fairly strong in
PBT 1,178 115 1,180 0.2 929.6 FY2023.
Tax 58 (62) 201 248.8 NM
Reported PAT 1,120 176 979 (12.6) 455.5
We expect margins to improve sequentially to 5.5%, as booking of losses from SAE projects was largely
Extraordinaries — — — — — completed in 3QFY23. We expect moderation in debt by Rs3 bn on reduction in working capital closer to
Adjusted PAT 1,120 176 979 (12.6) 455.5 the quarter end. However, we expect interest expenses to remain high yoy due to higher interest rates.
EPS (Rs/share) 4.4 0.7 3.8 (12.6) 455.5 Working capital, as a percentage of sales, to decline on improved execution. Key monitorables for KEC
would be the trend in margins, execution ramp-up and reduction in the working capital cycle.
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Change (%)
L&T
Net sales 528,507 463,897 592,529 12.1 27.7
EBITDA 65,205 50,731 73,314 12.4 44.5 We expect 10% yoy improvement in the core EPC revenues, as we bake in improved construction activity
across projects in 4QFY23. We bake in inflows of Rs630 bn for 4QFY23E; announced order inflows for
EBIT 57,512 42,479 65,356 13.6 53.9
the quarter so far are lower and mostly includes orders from hydrocarbon, water, B&F, metals and
PBT 55,616 42,005 63,448 14.1 51.0 mining, and transmission.
Tax 15,550 12,705 16,541 6.4 30.2
Reported PAT 36,207 25,529 44,071 21.7 72.6
Extraordinaries — 1,360 — — —
We expect the core E&C business' EBITDA margin at 10.4%, up 40 bps yoy. We expect improvement in
Adjusted PAT 36,207 24,170 44,071 21.7 82.3
the margin to be driven by lower commodity prices.
EPS (Rs/share) 25.8 17.2 31.4 21.7 82.3
Siemens
Net sales 39,547 40,151 46,026 16.4 14.6
EBITDA 4,848 5,992 5,450 12.4 (9.1)
We expect a 16.4% yoy improvement in revenues for Siemens. We envisage healthy growth across the
EBIT 4,048 5,231 4,656 15.0 (11.0)
mobility, digital and smart infra segments.
PBT 4,582 6,211 5,445 18.8 (12.3)
Tax 1,182 1,584 1,432 21.1 (9.6)
Reported PAT 3,400 4,627 4,013 18.0 (13.3)
We expect a 11.8% EBITDA margin, down 50 bps yoy, as cost reduction and price hikes normalized
Adjusted PAT 3,400 4,627 4,013 18.0 (13.3)
during 4QFY23. The ~300 bps qoq decline is driven by margin normalization from the high base.
EPS (Rs/share) 9.5 13.0 11.3 18.0 (13.3)
Thermax
Net sales 19,919 20,493 24,776 24.4 20.9
EBITDA 1,352 1,611 2,334 72.6 44.9
We build in a healthy ~24% yoy improvement in consolidated revenues on a healthy ~33% yoy increase
EBIT 1,058 1,320 2,029 91.8 53.7
in the quarter-starting order backlog of mid-to-large sized order wins over 9MFY23.
PBT 1,314 1,652 2,370 80.4 43.4
Tax 290 386 636 119.5 64.9
Reported PAT 1,025 1,264 1,734 69.1 37.2
We expect yoy improvement in the EBITDA margin beyond the 9% print, as we expect segment-wise
Adjusted PAT 1,025 1,264 1,734 69.1 37.2
margins for energy and chemicals to improve on easing commodity price headwinds.
EPS (Rs/share) 9.1 11.2 15.4 69.1 37.2
Commercial & Professional Services
SIS
Net sales 26,480 29,043 29,694 12.1 2.2
EBITDA 1,244 1,264 1,321 6.2 4.5
We believe overall revenues will grow 12% yoy, driven mainly by SIS India operations (security+FM). We
EBIT 946 922 971 2.7 5.3
model 19% yoy revenue growth in India security and 33% yoy revenue growth in the FM business.
PBT 748 642 701 (6.3) 9.2
Tax (183) (379) — — —
Reported PAT 974 1,034 701 (28.0) (32.2)
We model sequentially flat EBITDA margins of 4.4% due to a marginal improvement in SIS International
Adjusted PAT 974 1,034 701 (28.0) (32.2)
and the FM business being offset by India Security.
EPS (Rs/share) 6.6 7.1 4.8 (27.4) (32.2)
Teamlease Services
Net sales 18,174 20,083 20,482 12.7 2.0
EBITDA 410 316 303 (26.0) (4.0) Expect ~6,450 sequential additions to temporary staffing headcount on account of the slowdown hiring
demand across some verticals. We bake in sequential revenue growth to be flat in the specialized
EBIT 304 203 190 (37.4) (6.3)
staffing vertical due to weakened IT/ITES demand. Overall, revenue growth of 13% yoy should be driven
PBT 343 286 274 (20.3) (4.5) by 14% yoy growth in general staffing. NETAP should remain impacted in 4Q.
Tax 33 (4) — — —
Reported PAT 309 290 274 (11.4) (5.8)
Extraordinaries 6 — — — —
Overall EBITDA margin of 1.48% is marginally lower on a sequential basis, as we expect pushback in
Adjusted PAT 309 290 274 (11.4) (5.8)
staffing contract rates. Other HR services margin should recover to 8%.
EPS (Rs/share) 18 17 16 (11.4) (5.8)
Strategy
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Change (%)
Commodity Chemicals
Asian Paints
Net sales 78,927 86,367 89,715 13.7 3.9 We gather that the March quarter started off on a strong note (on a soft base), but demand moderated
EBITDA 14,433 16,114 17,431 20.8 8.2 toward the end of the quarter (perhaps, on a high base). A steep 15% price hike in 3Q last year led to
some shift of sales to 3QFY22 from 4QFY22. Consequently, APNT reported flat revenues in 3QFY23 and
EBIT 12,382 13,974 15,143 22.3 8.4
we expect 16%/13.7% yoy volume/value growth in 4QFY23 (Standalone - largely domestic decorative
PBT 12,960 14,426 15,823 22.1 9.7 paints). In our view, investors should look at 2HFY23 topline. Our 4QFY23 forecast implies 7% revenue
Tax 3,151 3,811 4,194 33.1 10.0 growth, 7.5% volume growth (reported) and low single-digit volume growth (ex-putty).
Reported PAT 8,504 10,727 11,590 36.3 8.1
Extraordinaries (1,157) — — — — We expect 170 bps qoq and 155 bps yoy expansion in gross margins, driven by a fall in crude/paint input
Adjusted PAT 9,661 10,727 11,590 20.0 8.1 prices (3Q margins were impacted by consumption of high-cost inventory). We expect EBITDA margin to
EPS (Rs/share) 10 11 12 20.0 8.1 expand by 115 bps yoy, largely driven by GM expansion.
Berger Paints
Net sales 21,875 26,936 24,754 13.2 (8.1)
EBITDA 3,464 3,497 3,773 8.9 7.9 We estimate 13% yoy volume/value growth (versus +7%/+6% yoy volume/value growth in 3Q) in
EBIT 2,867 2,853 3,120 8.8 9.4 domestic decorative paints and about 15% yoy growth in industrial coatings (versus +20% in 3Q). Our
PBT 2,912 2,666 3,014 3.5 13.0 4QFY23 forecast implies 9% yoy revenue growth in 2HFY23.
Tax 762 680 782 2.6 15.0
Reported PAT 2,207 2,009 2,249 1.9 11.9
Extraordinaries - — — — — We expect a 330 bps qoq expansion in gross margins (BRGR's last quarter margins were impacted by
Adjusted PAT 2,207 2,009 2,249 1.9 11.9 high-cost inventory), driven by the correction in crude/paint input prices (monomers, solvents, TiO2). GM
EPS (Rs/share) 2 2 2 1.9 11.9 recovery should boost EBITDA margins by 225 bps qoq to 15.2%.
Indigo Paints
Net sales 2,884 2,813 3,361 16.6 19.5
EBITDA 538 406 663 23.3 63.4
We expect 16.5% yoy revenue growth in domestic decorative paints, implying 200-250 bps ahead of
EBIT 454 318 570 25.4 78.9
APNT/BRGR, a tad lower than management guidance of 1.5X industry growth rate.
PBT 474 353 611 28.8 72.9
Tax 128 91 159 23.8 75.3
Reported PAT 346 263 452 30.7 72.1
We expect 250 bps qoq (+230 bps yoy) expansion in GM, led by the softening of RM prices and superior
Extraordinaries - — — — —
product mix, partly offset by higher trade discounts. We expect EBITDA margins to expand 110 bps yoy
Adjusted PAT 346 263 452 30.7 72.1 to 19.7%.
Kansai Nerolac
Net sales 14,071 17,171 15,948 13.3 (7.1)
EBITDA 1,014 1,885 1,795 77.0 (4.8) We model 13%/13% yoy volume/value growth in domestic decorative paints, broadly in line with the
industry growth rate after 3-4 years of underperformance. We expect 14% yoy revenue growth in auto
EBIT 623 1,464 1,376 120.8 (6.0)
and non-auto coatings, aided by a recovery in auto volumes and price hikes. Net-net, we estimate 13.3%
PBT 673 1,525 1,436 113.4 (5.8) yoy growth in standalone revenues of KNPL.
Tax 119 402 373 213.9 (7.2)
Reported PAT 245 1,123 1,063 333.4 (5.3)
Extraordinaries (309) — — — — We expect 150 bps qoq (+405 bps yoy on a low base) expansion in gross margins to 31.7%, as price
hikes and RM correction are offset by high-cost inventory consumption and inferior mix (higher
Adjusted PAT 554 1,123 1,063 91.9 (5.3)
industrial). We expect EBITDA margin to expand only 30 bps qoq to 11.3%, factoring in higher marketing
EPS (Rs/share) 1 2 2 91.9 (5.3) and personnel investments.
Tata Chemicals
Net sales 34,807 41,480 40,269 15.7 (2.9)
EBITDA 6,574 9,220 9,942 51.2 7.8 We expect an improved quarterly performance from Tata Chemicals in 4QFY23, underpinned by
improved margins in the US business and possibly the India business as well. These should offset a
EBIT 4,521 6,950 7,622 68.6 9.7
moderation in earnings from the UK business as well as the customary seasonal slowdown at Rallis. We
PBT 4,891 6,250 6,872 40.5 9.9 expect consolidated EBITDA to grow 8% qoq/51% yoy.
Tax 710 1,020 1,443 103.3 41.5
Reported PAT 4,382 3,980 5,279 20.5 32.6
Extraordinaries 33 — — — — The margin improvement in the US business should be driven by increased realizations on domestic
sales within the US, in particular, pursuant to the renegotiation of annual contracts at significantly higher
Adjusted PAT 4,353 3,980 5,279 21.3 32.6
prices. In the India business, margin improvement could be driven by a pickup in sales volumes (versus
EPS (Rs/share) 17 16 21 20.8 32.1 the depressed base of the previous two quarters) and a correction in coal prices.
Construction Materials
ACC
Net sales 44,265 45,370 48,823 10.3 7.6
EBITDA 6,337 3,783 5,593 (11.7) 47.8 We estimate volume of 8.3 mn tons (+6% yoy, +7.4% qoq) during the quarter factoring strong growth in
EBIT 4,806 2,067 3,877 (19.3) 87.5 January-February 2023 and seasonal tailwinds. We estimate blended realizations to increase by 0.2%
PBT 5,276 2,286 4,096 (22.4) 79.2 qoq (+4.1% yoy) led by muted prices towards the second half of the quarter.
Tax 1,358 390 1,024 (24.6) 162.3
Reported PAT 3,918 1,104 3,072 (21.6) 178.1
Extraordinaries — (791) — — — We estimate costs/ton to decline sequentially (+7.5% yoy, -3.2% qoq) largely led by power-fuel cost and
Adjusted PAT 3,918 1,895 3,072 (21.6) 62.0 operating leverage. We estimate cement EBITDA/ton to increase to Rs676/ton (-17% yoy, +38% qoq) led
EPS (Rs/share) 20.8 10.1 16.3 (21.6) 62.0 by lower costs.
Ambuja Cements
Net sales 39,252 41,285 43,281 10.3 4.8
EBITDA 7,904 6,261 8,082 2.3 29.1 We estimate volume of 7.9 mn tons (+6% yoy, +3.1% qoq) during the quarter factoring strong growth in
EBIT 6,389 4,613 6,434 0.7 39.5 January-February 2023 and seasonal tailwinds. We estimate blended realizations to increase by 1.7%
PBT 6,543 5,250 7,072 8.1 34.7 qoq (+4% yoy) led by price hikes in first half of the quarter.
Tax 1,591 947 1,768 11.1 86.7
Reported PAT 4,952 3,690 5,304 7.1 43.7
Extraordinaries — (614) — — — We estimate costs/ton to decline sequentially (+5.9% yoy, -2.5% qoq) largely led by power-fuel cost and
Adjusted PAT 4,952 4,303 5,304 7.1 23.2 operating leverage. We estimate cement EBITDA/ton to increase to Rs1018/ton (-3.5% yoy, +25% qoq)
EPS (Rs/share) 2.5 2.2 2.7 7.1 23.2 led by lower costs.
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Change (%)
Dalmia Bharat
Net sales 33,800 33,550 38,913 15.1 16.0
EBITDA 6,820 6,450 7,933 16.3 23.0 We estimate volume of 7.4 mn tons (+12% yoy, +17% qoq) during the quarter factoring strong growth in
EBIT 3,480 3,200 4,683 34.6 46.3 January-February 2023 and seasonal tailwinds. We estimate blended realizations to decline by 1.1% qoq
PBT 3,560 2,860 4,343 22.0 51.9 (+2.8% yoy) led by muted prices towards the second half of the quarter.
Tax (2,390) 730 1,097 NM 50.3
Reported PAT 5,950 2,040 3,246 (45.4) 59.1
Extraordinaries 40 30 — — — We estimate costs/ton to decline sequentially (+2.5% yoy, -2.6% qoq) largely led by power-fuel cost and
Adjusted PAT 5,950 2,040 3,246 (45.4) 59.1 operating leverage. We estimate cement EBITDA/ton to increase to Rs1,073/ton (+3.9% yoy, +4.8% qoq)
EPS (Rs/share) 31.0 10.6 16.9 (45.4) 59.1 led by lower realizations and lower costs.
Grasim Industries
Net sales 63,764 61,956 66,861 4.9 7.9
EBITDA 7,526 4,770 8,008 6.4 67.9
We model a 3% yoy volume decline in VSF operations and +9.4% yoy volume increase in the chemical
EBIT 4,696 2,015 5,253 11.9 160.7
operations led by ramp-up of new capacity partly offset by near-term demand headwinds.
PBT 4,764 2,150 5,388 13.1 150.6
Tax (4,063) (424) 1,347 NM NM
Reported PAT 8,136 2,574 4,041 (50.3) 57.0
Extraordinaries (691) — — — — We expect margins to recover from cyclical lows in the VSF division and moderate in the chemicals
divison sequentially. We estimate (1) VSF EBITDA of Rs 3.1 bn (+25% yoy, +400% qoq) on improved
Adjusted PAT 8,827 2,574 4,041 (54.2) 57.0
realizations and lower costs, and (2) chemicals EBITDA of Rs 4.2 bn (-16% yoy, -14% qoq) mainly on
EPS (Rs/share) 13.4 3.9 6.2 (54.2) 57.0 account of lower prices.
J K Cement
Net sales 22,690 22,880 26,559 17.1 16.1
PBT 2,792 1,286 2,643 (5.4) 105.5 qoq (+1.4% yoy) despite muted prices towards the second half of the quarter.
Tax 630 320 658 4.5 105.5
Reported PAT 863 966 1,985 130.1 105.5
Extraordinaries (1,300) — — — — We estimate costs/ton to decline sequentially (+3.5% yoy, -3.6% qoq) largely led by power-fuel cost and
Adjusted PAT 863 966 1,985 130.1 105.5 operating leverage. We estimate cement EBITDA/ton to increase to Rs885/ton (-9.1% yoy, +32% qoq) led
EPS (Rs/share) 12.3 13.8 28.4 130.1 105.5 by higher realizations and lower costs.
Nuvoco Vistas Corp
Net sales 29,302 26,046 31,718 8.2 21.8
EBIT 1,805 286 2,039 12.9 611.9 January-February 2023 and seasonal tailwinds. We estimate blended realizations to decline by 0.4% qoq
PBT 640 (1,007) 679 6.1 NM (+8.2% yoy) led by muted prices towards the second half of the quarter.
Tax 349 (254) 170 (51.3) NM
Reported PAT 291 (753) 509 74.9 NM
Extraordinaries — — — — — We estimate costs/ton to decline sequentially (+8.9% yoy, -4.5% qoq) largely led by power-fuel cost and
Adjusted PAT 291 (753) 509 74.9 NM operating leverage. We estimate cement EBITDA/ton to increase to Rs806/ton (+4.4% yoy, +35% qoq)
EPS (Rs/share) 0.8 (2.1) 1.4 74.9 NM despite slightly lower realizations on the back of lower costs.
Orient Cement
Net sales 8,039 7,323 8,714 8.4 19.0
EBITDA 1,533 903 1,078 (29.7) 19.4 We estimate volume of 1.75 mn tons (+8% yoy, +22% qoq) during the quarter factoring strong growth in
EBIT 1,167 532 707 (39.4) 32.8 January-February 2023 and seasonal tailwinds. We estimate blended realizations to decline by 2.8% qoq
PBT 1,138 447 621 (45.4) 39.2 (+0.4% yoy) led by muted prices towards the second half of the quarter.
Tax 406 171 217 (46.4) 26.9
Reported PAT 732 275 404 (44.9) 46.8
Adjusted PAT 732 275 404 (44.9) 46.8 operating leverage. We estimate cement EBITDA/ton to decrease marginally to Rs616/ton (-35% yoy, -
EPS (Rs/share) 3.6 1.3 2.0 (44.9) 46.8 2.5% qoq) led by lower realizations and lower costs.
Shree Cement
Net sales 40,988 40,688 45,653 11.4 12.2
PBT 6,938 3,842 6,704 (3.4) 74.5 qoq (+1.3% yoy) led by price hikes in the first half of the quarter.
Tax 486 1,074 1,584 226.0 47.4
Reported PAT 6,452 2,768 5,120 (20.6) 85.0
Extraordinaries — — — — — We estimate costs/ton to decline sequentially (+1% yoy, -4.2% qoq) largely led by power-fuel cost and
Adjusted PAT 6,452 2,768 5,120 (20.6) 85.0 operating leverage. We estimate cement EBITDA/ton to increase to Rs1,160/ton (+2.3% yoy, +32% qoq)
EPS (Rs/share) 178.8 76.7 141.9 (20.6) 85.0 led by higher realizations and lower costs.
The Ramco Cements
Net sales 17,134 20,116 20,350 18.8 1.2
EBITDA 2,949 2,831 3,047 3.3 7.7 We estimate volume of 3.7 mn tons (+17% yoy, 4.6% qoq) during the quarter factoring strong growth in
EBIT 1,871 1,468 1,685 (9.9) 14.8 January-February 2023 and seasonal tailwinds. We estimate blended realizations to decline by 3.3% qoq
PBT 1,629 948 1,164 (28.5) 22.9 (+1.5% yoy) led by muted prices towards the second half of the quarter in southern region.
Tax 397 291 349 (11.9) 19.9
Reported PAT 1,233 656 815 (33.9) 24.2
Adjusted PAT 1,233 656 815 (33.9) 24.2 operating leverage. We estimate cement EBITDA/ton to increase to Rs816/ton (-11.7% yoy, +2.9% qoq)
EPS (Rs/share) 5.2 2.8 3.5 (33.9) 24.2 led by lower realizations and lower costs.
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Change (%)
UltraTech Cement (India business)
Net sales 151,500 149,890 185,794 22.6 24.0
EBITDA 30,210 22,440 33,725 11.6 50.3 We estimate domestic volume of 30.5 mn tons (+15% yoy, +24% qoq) during the quarter factoring strong
EBIT 23,410 15,500 26,507 13.2 71.0 growth in January-February 2023 and seasonal tailwinds. We estimate blended realizations to stay
PBT 22,710 14,510 25,459 12.1 75.5 stable with +0.2% qoq increase (+5.9% yoy) led by muted prices towards the second half of the quarter.
Tax 8,030 4,620 8,106 0.9 75.5
Reported PAT 14,680 9,890 17,353 18.2 75.5
We estimate costs/ton to decline sequentially (+8.3% yoy, -3.5% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs1,106/ton (-3.6% yoy, +21% qoq)
Adjusted PAT 14,680 9,890 17,353 18.2 75.5 led by lower costs.
Consumer Durables & Apparel
Aditya Birla Fashion and Retail
Net sales 22,828 35,888 26,859 17.7 (25.2)
EBITDA 3,730 4,356 2,686 (28.0) (38.3)
We expect overall revenue growth of 18% yoy on account of new store additions and incremental
EBIT 1,062 1,181 (489) (146.1) (141.4)
revenue from TMRW, Reebok.
PBT 435 129 (1,420) (426.6) NM
Tax 127 62 — — —
Reported PAT 308 67 (1,420) (561.7) NM
Expect a steep ~630 bps yoy decline in EBITDA margin to 10%, as we bake in investments in fresh ad-
Adjusted PAT 308 67 (1,420) (561.7) NM
spends, store additions in ethnic and lower margins in Pantaloons.
EPS (Rs/share) 0.3 0.1 (1.5) (561.7) NM
Havells India
Net sales 44,171 41,197 49,227 11.4 19.5 We expect another quarter of yoy earnings decline for Havells. The reason once again could be margin
EBITDA 5,205 4,237 4,649 (10.7) 9.7 erosion in segments such as Lighting and ECDs, as witnessed in recent quarters amid demand
weakness and a normalization in opex run-rate post-Covid. We expect consolidated revenue growth to
EBIT 4,498 3,492 3,899 (13.3) 11.7
remain fairly healthy, at ~11% yoy, driven by continued market share gains at Lloyd and steady growth at
PBT 4,749 3,818 4,229 (11.0) 10.8 Switchgears and Cable, dampened somewhat by the softness in Lighting and ECDs (the inventory
Tax 1,220 978 1,078 (11.6) 10.2 overhang in fans should weigh on ECD growth).
Reported PAT 3,530 2,839 3,150 (10.7) 11.0
Extraordinaries — — — — — We estimate 25% yoy revenue growth for Lloyd in what is seasonally a major quarter; this should drive
operating leverage, supporting improvement in EBIT margins, which have been sharply negative in
Adjusted PAT 3,530 2,839 3,150 (10.7) 11.0
recent quarters. However, there is some left-over high-cost inventory from previous quarters, and this
EPS (Rs/share) 5.6 4.5 5.0 (10.9) 11.0 could curb the extent of improvement in margins.
Page Industries
Net sales 11,111 12,233 11,667 5.0 (4.6)
EBITDA 2,671 1,928 2,077 (22.2) 7.7
EBIT 2,507 1,728 1,872 (25.4) 8.3 We expect 5% yoy growth in sales, primarily on account of volume growth and flat pricing.
PBT 2,460 1,645 1,792 (27.2) 8.9
Tax 555 407 459 (17.3) 12.6
Reported PAT 1,905 1,237 1,333 (30.0) 7.7
We expect EBITDA margin of 17.8%, driven by sequential gross margin expansion on account of better
Adjusted PAT 1,905 1,237 1,333 (30.0) 7.7
inventory mix.
EPS (Rs/share) 170.8 110.9 119.5 (30.0) 7.7
Polycab
Net sales 39,700 37,152 42,590 7.3 14.6 We expect Polycab to report another robust quarterly performance, though yoy growth in EBITDA may
EBITDA 4,763 5,038 5,278 10.8 4.8 moderate relative to the very strong performances witnessed in the past two quarters (2Q & 3QFY23).
EBIT 4,261 4,514 4,728 11.0 4.8 Growth should again be driven primarily by the Wires & Cables segment, whereas growth in the FMEG
PBT 4,304 4,818 4,979 15.7 3.3 segment is likely to remain weak owing to sluggish demand and a channel inventory overhang in the
fans market.
Tax 1,047 1,202 1,244 18.8 3.5
Reported PAT 3,253 3,608 3,731 14.7 3.4 We expect Wires & Cables segment EBIT margins to return to the 11-13% range from the unusually high
Extraordinaries — — — — — 13.7% reported last quarter in 3QFY23. However, we expect the FMEG segment to remain unprofitable
Adjusted PAT 3,222 3,576 3,701 14.9 3.5 amid the continued sluggishness in revenue growth. For the company overall, we estimate 7%/11%/15%
EPS (Rs/share) 21.6 23.9 24.7 14.7 3.5 yoy growth in revenues/EBITDA/PAT. We see qoq revenue growth at 15% amid an increase in
commodity prices, but expect EBITDA/PAT to grow a more modest 5%/3% qoq.
TCNS Clothing Co.
Net sales 2,344 3,061 2,813 20.0 (8.1)
EBITDA 198 397 340 71.9 (14.4)
EBIT (90) 103 46 NM (55.6) We model 20% yoy revenue growth, driven by new store openings and off Omicron-impacted base
PBT (76) 7 (48) (37.0) (771.7)
Tax (18) 2 — — —
Reported PAT (58) 5 (48) (17.3) NM
Expect sequentially lower GM and negative operating leverage to lead to EBITDA margins of ~12.1% (90
Adjusted PAT (58) 5 (48) (17.3) NM
bps lower on a qoq basis).
EPS (Rs/share) (0.9) 0.1 (0.8) (17.3) NM
Vedant Fashions
Net sales 2,963 4,414 3,250 9.7 (26.4)
EBITDA 1,440 2,245 1,540 6.9 (31.4)
Expect slightly muted revenue growth of 10% yoy. However, we expect higher 29% yoy customer sales
EBIT 1,171 1,994 1,280 9.2 (35.8)
(secondary sales) growth on account of spillover of wedding and festive quarter.
PBT 1,196 2,019 1,305 9.1 (35.4)
Tax 309 516 334 8.1 (35.3)
Reported PAT 887 1,504 971 9.4 (35.4)
Adjusted PAT 887 1,504 971 9.4 (35.4) We bake in EBITDA margin print of 47.4% (down 350 bps qoq) on account of weaker operating leverage.
EPS (Rs/share) 3.7 6.2 4.0 9.4 (35.4)
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Voltas
Net sales 26,666 20,056 28,901 8.4 44.1
EBITDA 2,610 764 2,473 (5.3) 223.8 We estimate 11% revenue growth for the Unitary Cooling Products (UCP) segment--the company's main
valuation driver--on the back of early arrival of summer this year, which likely drove a pick-up in demand
EBIT 2,516 653 2,378 (5.5) 264.0
for air-conditioners in February and early-March. The subsequent dip in temperatures across the country
PBT 2,762 895 2,623 (5.0) 193.0 due to unseasonal rains may, however, have acted as a dampener for the quarter's revenue growth.
Tax 647 300 630 (2.7) 109.7
Reported PAT 1,827 (1,104) 1,694 (7.3) NM We model 9% EBIT margin in the UCP segment, marking an uptick from the 7-8% margins reported thus
Extraordinaries — (1,374) — — — far in FY2023; the pick-up in revenue growth in 4Q may help operating leverage kick in. For the
Electromechanical Projects business, which has reported losses in recent quarters owing to one-time
Adjusted PAT 1,827 (73) 1,694 (7.3) NM
write-downs, we assume a return to more normal profit margins in 4Q as well as a pick-up in revenue
EPS (Rs/share) 5.5 (0.2) 5.1 (7.3) NM growth, driven by an increase in the order book. We expect the Engineering Products & Services
EBITDA margin (%) 9.8 3.8 8.6 -124 bps 474 bps segment to maintain a steady EBIT run-rate.
Whirlpool
Net sales 17,069 13,025 17,923 5.0 37.6 We model for 5% yoy revenue growth for Whirlpool--a much improved result compared to the 15% yoy
EBITDA 1,476 440 1,541 4.4 249.8 revenue decline reported for 3QFY23 amid weak demand. The early arrival of summer this year may
EBIT 1,040 (9) 1,091 4.8 NM have aided Whirlpool's refrigerator business, which is the company's main source of revenues. However,
PBT 1,144 361 1,314 14.8 264.1 the subsequent dip in temperatures owing to unseasonal rains in the latter part of March may have put
the brakes on growth.
Tax 284 94 342 20.4 264.5
Reported PAT 854 247 962 12.6 289.7
We assume that margins recover to flat levels yoy after the sharp dip witnessed in 3QFY23. The
Extraordinaries — — — — — company had then attributed the pressure on margins to high-cost inventory and operating leverage.
Adjusted PAT 854 247 962 12.6 289.7 While we assume that high-cost inventory was largely liquidated in 4QFY23, there was some raw
EPS (Rs/share) 6.7 1.9 7.6 12.6 289.7 material cost inflation in late-3Q, which could put some pressure on margins. That said, Whirlpool has
tightly controlled other opex during FY2023. Overall, quarterly margins remain hard to predict.
Consumer Staples
Britannia Industries
Net sales 35,505 41,968 40,347 13.6 (3.9) We model 4% yoy growth in domestic volumes (similar to 3Q) and about 10% yoy contribution from price-
EBITDA 5,497 8,176 6,941 26.3 (15.1) mix (price-volume growth factor in higher promotions as highlighted in 3Q earnings call), which
EBIT 4,988 7,596 6,378 27.9 (16.0) translates to about 13.6% growth in consolidated revenues (versus 16.2% in 3Q). Revenue growth will be
PBT 5,188 7,722 6,406 23.5 (17.0) aided by (1) market share gains from Parle, (2) traction in new launches, (3) distribution expansion,
particularly in rural markets, and (4) likely bottoming of the rural slowdown.
Tax 1,410 2,169 1,678 19.1 (22.6)
Reported PAT 3,799 9,324 4,774 25.7 (48.8)
Extraordinaries — 3,756 — — — We expect consolidated GM to normalize and decline sequentially by 195 bps to 41.7% (3Q GM hit an all-
Adjusted PAT 3,799 5,568 4,774 25.7 (14.3) time high of 43.7%), as BRIT's wheat covers get exhausted. GM contraction should lead to EBITDA
EPS (Rs/share) 16 23 20 25.4 (14.3) margin decline of 230 bps qoq to 17.2% even as we expect BRIT to maintain A&P intensity.
Colgate-Palmolive (India)
Net sales 13,013 12,913 13,193 1.4 2.2
EBITDA 4,294 3,615 3,883 (9.6) 7.4 We model 1.4% yoy revenue growth on flat volume growth (versus (-) 3% in previous quarter), likely aided
EBIT 3,856 3,178 3,437 (10.9) 8.2 by bottoming of the rural slowdown (rural contributes 40% to CLGT's revenues). We expect flat volumes
PBT 3,931 3,269 3,523 (10.4) 7.8 on a yoy basis.
Tax 696 837 851 22.3 1.7
Reported PAT 3,236 2,432 2,672 (17.4) 9.9
Extraordinaries — — — — — We expect 65/145 bps sequential improvement in both gross/EBITDA margins, led by the softening of
Adjusted PAT 3,236 2,432 2,672 (17.4) 9.9 RM prices (crude-linked). We expect CLGT to broadly maintain the A&P intensity (% of sales at 13.0% in
EPS (Rs/share) 12 9 10 (17.4) 9.9 4QFY23, steady versus 13.2% in the previous quarter).
Dabur India
Net sales 25,178 30,432 27,197 8.0 (10.6) We model 6% yoy domestic revenue growth (2% volume growth). We expect growth to be driven by
EBITDA 4,536 6,099 5,172 14.0 (15.2) foods/home care even as we expect health supplements growth to remain subdued (base quarter had
EBIT 3,885 5,390 4,444 14.4 (17.6) some Omicron-led tailwinds). We estimate 13.3% yoy reported growth in aggregate revenues of
PBT 4,759 6,209 5,412 13.7 (12.8) subsidiaries; adjusted for Badshah acquisition (estimated revenue contribution Rs600 mn in 4QFY23),
revenue growth would be around 6%.
Tax 954 1,435 1,263 32.5 (12.0)
Reported PAT 2,942 4,762 4,132 40.4 (13.2)
Extraordinaries (850) 3 — — — We estimate 60 bps qoq expansion (-130 bps yoy) in consolidated gross margins, aided by softening RM
Adjusted PAT 3,792 4,759 4,132 9.0 (13.2) prices. Consolidated EBITDA margin is expected to expand 100 bps yoy (despite GM decline), led by cost
EPS (Rs/share) 2 3 2 9.0 (13.2) savings, including lower A&P spends.
Godrej Consumer Products
Net sales 29,158 35,989 32,291 10.7 (10.3) We estimate +9%/+14% yoy volume/value growth in the domestic business, led by–(1) about 20%
EBITDA 4,676 7,266 6,316 35.1 (13.1) growth in HC (versus +10% in 3Q), led by strong growth in HI off a weak base and aided by stocking of
recently launched LUPs in the channel, (2) 12% growth in BPC (versus 13.6% in 3Q) despite price cuts in
EBIT 4,136 6,693 5,695 37.7 (14.9)
soaps and robust growth in hair color. We expect a mixed performance in the international business,
PBT 4,045 6,726 5,810 43.6 (13.6) with some improvement in Indonesia (off a favorable base), partly offset by the softness in Africa, led by
Tax 208 1,188 1,175 466.2 (1.0) demonetization in Nigeria.
Reported PAT 3,632 5,463 4,634 27.6 (15.2)
Extraordinaries (205) (74) — — — We model a 95 bps qoq expansion in consolidated GM to 52.1%, aided by RM tailwinds in India. Despite
the sequential GM expansion, EBITDA margin (-65 bps qoq, +350 bps yoy) would moderate a bit on
Adjusted PAT 3,838 5,538 4,634 20.8 (16.3)
sequential basis, owing to lower operating leverage. Consolidated A&P spends are expected at 7.7% of
EPS (Rs/share) 4 5 5 20.8 (16.3) sales in 4QFY23 versus 6.3% in 4QFY22.
Hindustan Unilever
Net sales 134,620 152,280 152,774 13.5 0.3 We model 13.5% yoy revenue growth (versus +16.3% in 3Q), with 6% yoy growth in UVG (versus 4%/5%
EBITDA 32,450 35,370 36,866 13.6 4.2 in 2Q/3Q). We expect—(1) continued strength in home care revenue growth on the back of price hikes in
laundry, (2) some improvement in BPC growth, as the spillover in the winter portfolio gets offset by price
EBIT 29,840 32,770 34,157 14.5 4.2 cuts in skin cleansing, (3) price hikes in MFD, and (4) some respite on the GM front, led by a softening of
PBT 30,700 34,790 35,165 14.5 1.1 crude/palm oil. We forecast–(1) 19.5% yoy growth in Home care, (2) 11.5% yoy growth in BPC, and (3)
Tax 7,870 8,980 9,009 14.5 0.3 8.1% yoy revenue growth in the F&R portfolio, partly aided by an early onset of summer.
Reported PAT 23,270 25,050 26,155 12.4 4.4
Extraordinaries 440 (760) — — — We model 155 bps qoq expansion in gross margins, led by the correction in crude/palm oil prices, which
is expected to narrow the gap between realization increase and net material inflation. We build in 24.1%
Adjusted PAT 22,830 25,810 26,155 14.6 1.3
EBITDA margin, up 90 bps qoq, as GM expansion is offset by (1) a 45 bps increase in royalty from
EPS (Rs/share) 10 11 11 14.6 1.3 February 2023 and (2) A&P intensity at 8.6% of sales (versus 7.9% in 3QFY23).
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ITC
Net sales 155,309 162,257 169,729 9.3 4.6
EBITDA 52,244 62,232 60,501 15.8 (2.8) We model 15% yoy growth in cigarette volumes (4.5% 4-yr CAGR versus +5.2%/+4.6%/+2.5% in
EBIT 47,784 58,160 56,049 17.3 (3.6) 3Q/2Q/1QFY23), largely driving 17.9% yoy growth in cigarette sales (versus 16.7% last quarter). We
PBT 54,420 66,775 65,103 19.6 (2.5) forecast 17.2% yoy growth in Cigarette EBIT (versus 16.9% growth last quarter).
Tax 12,511 16,465 16,033 28.2 (2.6)
Reported PAT 41,910 50,310 49,070 17.1 (2.5) In the FMCG segment (standalone), we estimate 21.8% yoy revenue growth (versus 18.4% in last
Extraordinaries — — — — — quarter). We model 40 bps qoq FMCG EBIT margin to 7.6%. We expect a resilient 72% growth in Hotels
Adjusted PAT 41,910 50,310 49,070 17.1 (2.5) (Omicron-impacted base; EBIT margin of 18.1%). We also forecast further moderation/normalization in
EPS (Rs/share) 3 4 4 16.2 (2.5) Paperboards margin to 24.2% (-210 bps qoq) and 18.8% yoy decline in Agri sales (versus 37% decline in
previous quarter).
Jyothy Labs
Net sales 5,467 6,127 6,194 13.3 1.1
EBITDA 573 844 974 70.1 15.4 We expect 13.3% yoy revenue growth, led by 18.1% yoy growth in Fabric care (led by mid-priced
EBIT 418 722 841 101.1 16.5 detergent brands and continued recovery in post-wash segment), 12.8% yoy growth in dishwashing
PBT 447 843 878 96.4 4.2 (share/penetration gains), flat sales in HI and 15.4% yoy growth in personal care.
Tax 78 169 111 42.4 (34.4)
Reported PAT 380 674 797 109.9 18.3
Extraordinaries — — — — — We expect gross margins to increase by 235 bps qoq, led by price correction in palm and crude
Adjusted PAT 380 674 797 109.9 18.3 derivatives. EBITDA margin is expected to improve by 195 bps qoq to 15.7%, after factoring in A&P
EPS (Rs/share) 1 2 2 109.9 18.3 spends at 7.2% of sales (flat yoy).
Marico
Net sales 21,610 24,700 22,380 3.6 (9.4) Our estimates are in line with Marico's quarter-end update. We model 3.7% yoy growth in the domestic
EBITDA 3,460 4,560 3,848 11.2 (15.6) FMCG business on the back of about 4.5% yoy volume growth. We build yoy volume/value growth of
8%/1% in parachute, 5%/10% in VAHO, and (-) 5%/(-) 8% in Saffola edible oil. We expect share gains in
EBIT 3,090 4,170 3,462 12.0 (17.0)
CNO, led by right pricing achieved on-ground by MRCO. For the international business, we model about
PBT 3,220 4,430 3,575 11.0 (19.3) 3.2% yoy growth (versus 4.9% in 3Q) as currency depreciation (Bangladesh) would weigh on reported
Tax 650 1,100 829 27.5 (24.6) revenues. We expect consolidated revenue growth of 3.6%.
Reported PAT 2,510 3,280 2,609 3.9 (20.5)
Extraordinaries — — — — — We expect consolidated GM to expand by 85 bps qoq (+130 bps yoy), led by continued deflation in
Adjusted PAT 2,510 3,280 2,609 3.9 (20.5) copra/edible oil prices. Consolidated EBITDA margin is expected to increase by 120 bps to 17.2%, led by
EPS (Rs/share) 2 3 2 3.9 (20.5) GM tailwinds, leading to EBITDA growth of 11.2% yoy.
Nestle India
Net sales 39,807 42,568 44,911 12.8 5.5
EBITDA 9,308 9,769 10,532 13.1 7.8 We model 13% yoy growth in net domestic revenues, entirely led by price increases. Volume (tonnage) is
likely to decline marginally, owing to (1) continued share loss in Maggi LUP as it increased price point to
EBIT 8,265 8,782 9,462 14.5 7.7
Rs7 from Rs5, whereas ITC Yippee! has maintained price at Rs5, and (2) weak trends in milk/nutrition
PBT 8,124 8,630 9,351 15.1 8.4 portfolio.
Tax 2,115 2,310 2,431 14.9 5.2
Reported PAT 5,947 6,281 6,920 16.4 10.2
Extraordinaries (61) (39) — — — We model a 65 bps qoq GM expansion, aided by deflation in edible oils, price increases, improving mix
Adjusted PAT 6,008 6,319 6,920 15.2 9.5 (lower margin-dilutive LUP sales), partly offset by high inflation in dairy. We expect EBITDA margin to
EPS (Rs/share) 62 66 71 14.0 8.4 expand 5 bps/50 bps yoy/qoq, led by GM expansion.
Tata Consumer Products
Net sales 31,754 34,746 35,624 12.2 2.5 We model 12.2% yoy growth in consolidated revenues, led by (1) 1% yoy growth in domestic tea sales
(versus 9% decline in 3Q) with 3% yoy growth in volumes (versus 5% decline in 3Q), (2) 25.3% yoy growth
EBITDA 4,443 4,537 4,742 6.7 4.5 in India foods business, largely price/mix led with 5% volume growth, and (3) 13.1% yoy growth in
EBIT 3,722 3,785 3,977 6.8 5.1 subsidiaries. We model ~2.3% yoy decline in International tea (improvement versus last quarter's (-)5.1%
yoy, led by price hikes) and ~15.4% yoy growth in overseas coffee (EOC + Vietnam FDC) in INR terms
PBT 4,032 4,038 4,187 3.8 3.7
(+16.8% in 3Q). We estimate Rs1.5 bn revenues for NourishCo (53.4% yoy), implying FY2023 revenue of
Tax 953 1,129 1,044 9.6 (7.5) Rs6 bn.
Reported PAT 2,175 3,518 2,450 12.6 (30.3) India branded business (standalone): We expect flat qoq gross margins (-125 bps yoy) as some GM
Extraordinaries (187) 786 — — — pressure in tea (consumption of high-cost inventory) is offset by the recovery in GM of India foods.
Adjusted PAT 2,362 2,732 2,450 3.7 (10.3) Lower operating leverage can drive a 20 bps qoq decline in India EBITDA margins (+20 bps yoy).
EPS (Rs/share) 3 3 3 3.7 (10.3) Aggregate of subsidiaries (largely overseas): We expect gross/EBITDA margin to improve 150 bps/115
bps qoq as lagged price hikes in the UK/US offset significant RM inflation/currency impact.
United Breweries
Net sales 17,069 16,110 17,961 5.2 11.5
EBITDA 2,603 766 1,781 (31.6) 132.4 We model 47 mn cases, up 4%/18% yoy/qoq (versus 3Q’s 4% yoy). We estimate 5.2% yoy growth (versus
EBIT 2,072 265 1,274 (38.5) 381.0 3Q's 1.9%) in net operating revenues. We are modeling some volume impact (akin 3Q) pertaining to the
PBT 2,176 379 1,424 (34.6) 276.1 RTM change in TN/AP.
Tax 547 69 357 (34.7) 418.7
Reported PAT 1,630 (21) 1,067 (34.5) NM
Extraordinaries — (331) — — — We expect gross margins to improve by 140 bps qoq, but remain significantly below on a yoy basis
Adjusted PAT 1,630 (171) 1,067 (34.5) NM (down 540 bps yoy) due to high inflation in barley/glass prices and adverse state mix. We expect EBITDA
EPS (Rs/share) 6 (1) 4 (34.5) NM margin to expand by 510 bps qoq off a low base.
United Spirits
Net sales 24,351 27,811 23,371 (4.0) (16.0)
EBITDA 4,267 3,678 2,694 (36.9) (26.8) We model 10.5% yoy growth in net revenues (versus 9.7% yoy in 3Q, excluding bulk scotch sale) on LFL
basis, adjusted for the divestment of select popular brands. P&A segment volume is expected to grow by
EBIT 3,596 3,042 2,065 (42.6) (32.1)
7.3% yoy to 11.7 mn cases. Popular segment volume is expected to decline 4% yoy on LFL basis to 3.6
PBT 3,727 3,031 2,228 (40.2) (26.5) mn cases. We model 14.4% yoy revenue growth in the P&A segment.
Tax 633 415 593 (6.3) 42.9
Reported PAT 1,362 1,105 1,635 20.1 48.0 We model 145 bps qoq expansion in GM, aided by price hikes and mix improvement (aided by
Extraordinaries (1,732) (1,511) — — — resumption of scotch supply in a few states after successful price renegotiation). We expect higher A&P
Adjusted PAT 3,094 2,616 1,635 (47.2) (37.5) spends (11.5% of sales in 4QFY23 versus 10% in 3QFY23 and 5.4% in 4QFY22) and operating deleverage
EPS (Rs/share) 21 18 11 (47.2) (37.5) to weigh on EBITDA margin (-600 bps yoy to 11.5%). We estimate EBITDA decline of 37% yoy on a
reported basis and about 25% decline (LFL basis) adjusted for the divested portfolio.
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Varun Beverages
Net sales 28,275 22,142 35,888 26.9 62.1 We expect strong 27%/20.3% yoy growth in revenues/volumes (to 217 mn cases) notwithstanding the
EBITDA 5,310 3,075 7,873 48.3 156.0 disruption of summer in the second fortnight of March following hailstorms in the Delhi/NCR region.
EBIT 3,997 1,278 6,073 52.0 375.0 Strong growth would be driven by (1) share gains in underpenetrated markets, (2) robust 100%+ yoy
PBT 3,612 896 5,697 57.7 535.8 growth of energy drink Sting. We build in 5% yoy growth in realization, partly aided by superior mix
(Sting's realization is 60-65% higher than the company average).
Tax 901 81 1,481 64.3 1,733.7
Reported PAT 2,542 748 4,047 59.2 441.4
We model 52.5% gross margin (up 95 bps yoy, factoring in correction in crude) and EBITDA margin of
Adjusted PAT 2,542 748 4,047 59.2 441.4
21.9% (up 310 bps yoy, GM expansion + operating leverage).
EPS (Rs/share) 3.9 1.2 6.2 59.2 441.4
Electric Utilities
CESC
Net sales 19,350 19,390 19,271 (0.4) (0.6)
EBITDA 5,010 4,560 4,431 (11.6) (2.8)
EBIT 3,810 3,370 3,223 (15.4) (4.4) Modest improvement in unit sales at 2.1 BU (+2% yoy) due to weak demand in March 2023.
PBT 3,320 2,370 2,233 (32.7) (5.8)
Tax 730 510 500 (31.5) (2.0)
Reported PAT 2,590 1,860 1,733 (33.1) (6.8)
Adjusted PAT 2,590 1,860 1,733 (33.1) (6.8) Sequential decline in PAT owing to seasonally lower demand in the distribution business.
EPS (Rs/share) 2.0 1.4 1.3 (33.1) (6.8)
JSW Energy
Net sales 18,873 22,481 21,851 15.8 (2.8)
EBITDA 5,784 6,249 6,380 10.3 2.1
EBIT 3,012 3,298 3,504 16.3 6.3 Generation at 4.4 BU (+2.5% yoy), with lower contribution from hydro capacities.
PBT 3,027 2,177 2,172 (28.2) (0.2)
Tax 983 335 527 (46.3) 57.2
Reported PAT 8,576 1,941 1,745 (79.7) (10.1)
Extraordinaries 6,532 99 100 (98.5) 0.9
Adjusted PAT 2,044 1,842 1,645 (19.5) (10.7) Impact of lower prices of imported coal to be partially offset by weak merchant tariffs.
EPS (Rs/share) 1.2 1.1 1.0 (19.5) (10.7)
NHPC
Net sales 15,058 22,722 17,314 15.0 (23.8)
EBITDA 4,237 14,752 9,180 116.7 (37.8)
Strong generation growth (9% yoy), with generation of 3 BUs will likely lead to higher incentive income
EBIT 1,434 11,871 6,310 340.0 (46.8)
during the quarter.
PBT 5,864 7,681 7,890 34.6 2.7
Tax 263 (136) 2,287 770.8 NM
Reported PAT 5,601 7,817 5,604 0.0 (28.3)
Absence of earnings growth in comparison with 4QFY22 should be seen in the context of the low
Adjusted PAT 5,601 7,817 5,604 0.0 (28.3)
effective tax rate (4.5%) in the base quarter of 4QFY22.
EPS (Rs/share) 0.5 0.7 0.5 0.0 (28.3)
NTPC
Net sales 329,050 414,105 397,708 20.9 (4.0)
EBITDA 101,206 132,392 107,726 6.4 (18.6)
EBIT 71,747 99,271 73,885 3.0 (25.6) Healthy growth in generation at 84 BU (+8.6% yoy) due to commercialization of 4 GW over FY2023.
PBT 66,273 60,575 65,854 (0.6) 8.7
Tax 10,054 15,812 17,236 71.4 9.0
Reported PAT 56,219 44,763 48,618 (13.5) 8.6
Base quarter (4QFY22) includes prior period sales of Rs13.8 bn resulting in a 14% yoy decline in reported
Adjusted PAT 56,219 44,763 48,618 (13.5) 8.6
PAT and adjusted PAT growth of 7% yoy factored in estimates.
EPS (Rs/share) 5.7 4.5 4.9 (13.5) 8.6
Power Grid
Net sales 100,487 114,937 118,041 17.5 2.7
EBITDA 87,033 101,253 103,821 19.3 2.5
EBIT 54,242 67,185 68,748 26.7 2.3 Healthy revenue growth (17.5% yoy) owing to asset capitalization of Rs73 bn in FY2023.
PBT 37,155 39,752 49,312 32.7 24.1
Tax (853) 3,300 8,966 NM 171.7
Reported PAT 41,564 36,453 40,691 (2.1) 11.6
Extraordinaries 3,064 — — — —
Earnings are not comparable with preceding periods due to the lower effective tax rate in 4QFY22 (-2%)
Adjusted PAT 38,008 36,452 40,346 6.2 10.7
and 3QFY23 (8%).
EPS (Rs/share) 5.4 5.2 5.8 6.2 10.7
Tata Power
Net sales 120,851 143,391 136,564 13.0 (4.8)
EBITDA 19,938 25,448 19,744 (1.0) (22.4)
Earnings from the renewable portfolio will benefit from a higher capacity base and strong execution at
EBIT 11,481 16,915 11,179 (2.6) (33.9)
Tata Power Solar.
PBT 3,929 8,661 1,563 (60.2) (81.9)
Tax (5,616) 8,119 1,533 NM (81.1)
Reported PAT 5,031 9,450 7,545 50.0 (20.2)
We expect higher losses from Mundra, as the plant was barely operational during 4QFY23. Coal mining
Adjusted PAT 5,031 9,450 7,545 50.0 (20.2)
profits to moderate sequentially due to softness in realizations.
EPS (Rs/share) 1.9 3.5 2.8 50.0 (20.2)
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Fertilizers & Agricultural Chemicals
Bayer Cropscience
Net sales 9,633 10,379 9,422 (2.2) (9.2) We expect Bayer to register a sharp yoy decline in EPS, given a difficult base. 4QFY22 EPS was boosted
EBITDA 2,007 854 1,458 (27.4) 70.7 by one-off factors, including a spike in prices of glyphosate, early buying by channel partners amid
EBIT 1,793 711 1,248 (30.4) 75.5 supply chain uncertainties and rising prices. BYRCS also began 4QFY22 with low inventories in the
PBT 1,895 829 1,358 (28.3) 63.8 channel. In contrast, 4QFY23 started off with high channel inventories, and besides, the recent
correction in prices of glyphosate as well as other agrochemicals will probably be a headwind.
Tax 368 491 339 (7.7) (30.9)
Reported PAT 1,527 1,345 1,018 (33.3) (24.3) We expect revenues to slip 2% yoy and EBITDA margin to contract 530 bps yoy due to lower realizations
Extraordinaries — 1,007 — — — on glyphosate, leading to a 27%/28% yoy decline in EBITDA/PAT. However, the key upside risk to our
Adjusted PAT 1,527 607 1,018 (33.3) 67.7 estimates is a better-than-expected performance from the corn hybrids business (DeKalb) as well as
EPS (Rs/share) 34.0 13.5 22.7 (33.3) 67.7 corn-focused herbicides, given that Rabi corn acreages in India were up 16% yoy as of February 2, 2023
(the last-reported data).
Godrej Agrovet
Net sales 20,808 23,235 21,070 1.3 (9.3) We expect GAVL to report another weak quarter, due to margin pressures in animal feed, very weak
EBITDA 1,693 1,363 578 (65.9) (57.6) demand at Astec, inventory write-downs in domestic Crop Protection, and falling prices of Palm oil.
EBIT 1,234 893 117 (90.6) (86.9) These challenges should more than offset healthy volume growth in animal feed and oil palm. We
PBT 1,586 720 (33) (102.1) (104.6) expect the dairy segment to remain under pressure and poultry (Godrej-Tyson) to also suffer a decline
amid weaker prices of live bird.
Tax 346 334 (8) (102.4) (102.4)
Reported PAT 1,222 1,163 115 (90.6) (90.1) Increased prices of key input commodities (maize, DORB, rapeseed, etc.), combined with price controls
Extraordinaries — 708 — — — in key states and stiff competition, are the key factors responsible for the pressure on animal feed
Adjusted PAT 1,223 456 116 (90.5) (74.6) margins. Demand for Astec's products remains very weak amid continued overcapacity in the markets
EPS (Rs/share) 6.4 2.4 0.6 (90.5) (74.6) for its key products tebuconazole and propiconazole. Perhaps the only silver lining may be some
recovery in ACI Godrej (the Bangladesh JV) off a low base.
Rallis India
Net sales 5,075 6,304 5,184 2.1 (17.8)
EBITDA (28) 533 119 NM (77.6) We expect Rallis to report a net loss in what is seasonally a slow quarter. Sales growth as well as
EBIT (225) 313 (101) (55.2) (132.2) margins may remain under pressure in both Crop Protection and Seeds businesses amid elevated
PBT (162) 300 (96) (41.0) (132.0) channel inventories, falling prices and possible write-downs of slow-moving stocks.
Tax (21) 74 (24) 13.5 (132.3)
Reported PAT (141) 225 (72) (49.2) (131.9)
Extraordinaries — — — — — We build in 7.5% yoy revenue growth in the domestic Crop Protection business, but a 5% yoy decline in
exports. We expect Seeds sales to remain flat. Margins are likely to be muted given the seasonal
Adjusted PAT (141) 225 (72) (49.2) (131.9)
slowness of the quarter, while the yoy increase in D&A expense and decrease in other income amid
EPS (Rs/share) (0.7) 1.2 (0.4) (49.2) (131.9) capex spending is likely to further pressure PBT and PAT growth.
EBITDA margin (%) (0.6) 8.5 2.3 285 bps -616 bps
UPL
Net sales 158,610 136,790 169,266 6.7 23.7 We expect UPL to report 6% yoy revenue growth on a consolidated basis, driven primarily by LatAm and
EBITDA 33,800 28,840 35,924 6.3 24.6 India, offsetting sluggish growth in the mature, developed markets (US and Europe). This implies 17%
EBIT 27,380 22,600 29,284 7.0 29.6 yoy growth for FY2023 overall, topping the company's 12-15% guidance range. We expect flat EBITDA
PBT 20,540 14,810 21,684 5.6 46.4 margin yoy, leading to EBITDA growth of 16% yoy for FY2023, within the company's 15-18% guidance
range.
Tax 2,650 1,350 3,208 21.0 137.6
Reported PAT 13,790 10,870 15,078 9.3 38.7 We expect UPL to reduce debt during the quarter, consistent with the usual seasonal pattern, though
Extraordinaries (1,680) (200) (300) (82.1) 50.0 whether the company succeeds in meeting its guidance for US$500 mn of net debt reduction on a yoy
Adjusted PAT 15,470 11,070 15,377 (0.6) 38.9 basis remains to be seen. We expect interest expense to remain elevated, albeit stable qoq versus a high
EPS (Rs/share) 20.2 14.5 20.1 (0.5) 39.1 base (3QFY23 interest expense included a forex loss of Rs870 mn). We assume a 15% tax rate in our
estimates.
Gas Utilities
GAIL (India)
Net sales 269,619 353,654 364,521 35.2 3.1
EBITDA 37,145 2,613 16,655 (55.2) 537.3 We expect a sequentially better quarter after weak 3Q, but expect EBITDA to decline 55% yoy. We expect
EBIT 31,685 (3,612) 10,355 (67.3) NM the petchem segment to remain in EBIT loss, while LPG should return to profits. Driven by increased oil
PBT 35,459 2,227 16,355 (53.9) 634.5 index–HH spreads, GAIL can surprise on marketing earnings.
Tax 8,628 (231) 4,192 (51.4) NM
Reported PAT 26,831 2,457 12,164 (54.7) 395.0
Extraordinaries — — — — — We assume (1) 4% qoq increase in gas transmission volumes to 108 mmscmd (2) petchem production
Adjusted PAT 26,831 2,457 12,164 (54.7) 395.0 to nearly double qoq (but down 28% yoy), flat realization of Rs115 (3) 12% increase in LPG/LHC
EPS (Rs/share) 4.1 0.4 1.8 (54.7) 395.0 realizations to Rs61/kg.
GSPL
Net sales 4,331 4,024 4,231 (2.3) 5.1
EBITDA 3,062 2,699 2,749 (10.2) 1.8
We expect a modest 2% qoq uptick in EBITDA, as qoq higher volume would likely to be offset by lower
EBIT 2,568 2,209 2,248 (12.5) 1.8
ship-or-pay gains.
PBT 2,598 2,329 2,387 (8.1) 2.5
Tax 577 620 601 4.1 (3.1)
Reported PAT 2,020 1,709 1,786 (11.6) 4.5
We assume (1) 12% qoq uptick in gas transmission volumes to 25 mmscmd, driven by a correction in
Adjusted PAT 2,020 1,709 1,786 (11.6) 4.5
spot LNG prices and (2) 8% qoq lower realized tariff at Rs40.8/mmbtu on lower ship-or-pay gains.
EPS (Rs/share) 3.6 3.0 3.2 (11.6) 4.5
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Indraprastha Gas
Net sales 24,059 37,108 35,886 49.2 (3.3)
EBITDA 5,005 4,285 4,730 (5.5) 10.4
We expect IGL's EBITDA to increase 10% qoq. The benefits of lower LNG prices, HPHT gas tie-up, and
EBIT 4,252 3,360 3,790 (10.9) 12.8
the full impact of price hikes taken in 3QFY23 will be offset in part by increased APM shortfall.
PBT 4,977 3,891 4,529 (9.0) 16.4
Tax 1,361 1,109 1,141 (16.1) 3.0
Reported PAT 4,267 3,285 3,388 (20.6) 3.1
We assume (1) overall volumes to increase 6% yoy and 1% qoq to 8.2mmscmd and (2) unit EBITDA
Adjusted PAT 4,267 3,285 3,388 (20.6) 3.1
margins to recover to Rs6.4/scm in 4QFY23 from Rs5.7/scm in 3QFY23.
EPS (Rs/share) 6.1 4.7 4.8 (20.6) 3.1
Mahanagar Gas
Net sales 10,868 16,714 15,725 44.7 (5.9)
EBITDA 2,155 2,561 2,912 35.2 13.7
We expect MGL’s EBITDA to increase 14% qoq. We assume volumes to be flat qoq, but gas cost should
EBIT 1,600 1,976 2,312 44.6 17.0
be lower driven by lower LNG prices and tie-up of HPHT gas from early February.
PBT 1,804 2,274 2,612 44.8 14.9
Tax 486 553 674 38.7 21.8
Reported PAT 1,318 1,721 1,938 47.1 12.6
We assume (1) overall volumes to be flat qoq at 3.4mmscmd (2) unit EBITDA to increase sequentially to
Adjusted PAT 1,318 1,721 1,938 47.1 12.6
Rs9.5/scm in 4QFY23 from Rs8.2/scm in 3QFY23.
EPS (Rs/share) 13.3 17.4 19.6 47.1 12.6
Petronet LNG
Net sales 110,771 149,270 138,279 24.8 (7.4)
EBITDA 10,858 8,264 10,458 (3.7) 26.5 We expect a sharp 27% qoq improvement in core EBITDA (3Q was very weak), driven by recovery in
volumes amid correction in LNG prices and 5% tariff hike at Dahej from January 2023. In 3QFY23,
EBIT 8,962 6,341 8,508 (5.1) 34.2
reported numbers were boosted by PLNG accounting for take-or-pay gains of Rs8.5 bn for the entire
PBT 9,011 6,574 8,733 (3.1) 32.9 CY2022.
Tax 2,342 4,050 2,198 (6.2) (45.7)
Reported PAT 6,669 11,805 6,535 (2.0) (44.6)
Extraordinaries — 9,282 — — — We assume overall volumes at 189 tn btu up 13% qoq (but flat yoy), as volumes likely recovered with
Adjusted PAT 6,669 1,933 6,535 (2.0) 238.1 cooling of spot LNG prices. We assume Dahej utilization to recover to ~79% in 4QFY23 (from ~68% in
EPS (Rs/share) 4.4 1.3 4.4 (2.0) 238.1 3Q).
Health Care Services
Apollo Hospitals
Net sales 35,464 42,636 44,389 25.2 4.1
EBITDA 4,633 5,054 5,506 18.8 8.9 We expect healthcare revenues to grow 4% qoq on account of seasonality (despite slightly softer
footfalls in January 2023) in 4QFY23. We expect HealthCo sales to grow 33.5% yoy, driven by growth in
EBIT 2,969 3,520 3,936 32.6 11.8
offline pharmacy sales (+4% qoq) and increased traction in 24/7 (+6% qoq). For AHLL, we forecast 7%
PBT 2,327 2,874 3,366 44.7 17.1 yoy sales growth in 4QFY23 despite a high Covid base.
Tax 1,387 1,035 786 (43.3) (24.1)
Reported PAT 902 1,535 2,410 167.3 57.0
Extraordinaries — — — — — We build in 6% qoq growth in healthcare EBITDA, with healthcare EBITDA margin at 25.4% (up 60 bps
Adjusted PAT 902 1,535 2,410 167.3 57.0 qoq). Consolidated EBITDA will continue to be impacted by higher marketing spends and discounting in
EPS (Rs/share) 6.3 10.7 16.8 167.3 57.0 24/7. We factor in Rs2.1 bn opex for 24/7 in 4QFY23, marginally higher than Rs2 bn in 3QFY23. We
EBITDA margin (%) 13.1 11.9 12.4 -66 bps 55 bps expect overall EBITDA margin to be up 55 bps qoq at 12.4%.
Aster DM Healthcare
Net sales 27,278 31,921 32,200 18.0 0.9
EBITDA 4,625 4,487 4,715 1.9 5.1 We expect 14% yoy growth and flat qoq performance in overall GCC sales, driven by a seasonally strong
EBIT 2,922 2,512 2,648 (9.4) 5.4 2H in the hospital segment (+5% qoq), offset by lower sales in pharmacies (-9% qoq). On the other hand,
PBT 2,519 1,725 2,128 (15.5) 23.4 led by a healthy performance in its key clusters of Kerala and Karnataka, we expect India hospitals to
Tax 42 144 170 305.3 17.9 continue to do well with 20% yoy (flat qoq) topline growth.
Reported PAT 2,263 1,394 1,798 (20.5) 29.0
Extraordinaries — — — — — We build in +2% yoy growth in consolidated EBITDA to Rs4.7 bn for Aster DM in 4QFY23. Owing to
Adjusted PAT 2,263 1,394 1,798 (20.5) 29.0 strength in the GCC business and continued resilience in India, we factor in 5% higher EBITDA
EPS (Rs/share) 4.5 2.8 3.6 (20.5) 29.0 sequentially with consolidated EBITDA margin of 14.6% (down 230 bps yoy and up 60 bps qoq) in
EBITDA margin (%) 17.0 14.1 14.6 -232 bps 58 bps 4QFY23.
Dr Lal Pathlabs
Net sales 4,855 4,894 5,110 5.3 4.4
EBITDA 1,211 1,130 1,266 4.6 12.0
Overall, we expect DLPL’s 4QFY23 revenues to grow 5% yoy. For the non-Covid business, we build in 20%
EBIT 834 751 871 4.5 16.0
yoy sales growth and sequentially flat realisations. Compared to Rs658 mn and Rs113 mn in 4QFY22
PBT 835 765 876 4.9 14.5 and 3QFY23, we bake in Rs90 mn Covid revenues for DLPL in 4QFY23.
Tax 214 229 245 14.6 7.1
Reported PAT 613 528 623 1.6 18.0
We expect DLPL's EBITDA at Rs1.27 bn in 4QFY23 to increase 12% qoq with EBITDA margin of 24.8%
Adjusted PAT 613 528 623 1.6 18.0
(up 170 bps qoq, down 20 bps yoy). We note there is no incremental adjustment for the Suburban
EPS (Rs/share) 7.4 6.3 7.5 1.6 18.0 acquisition from 4QFY23 as it is now fully in the base.
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KIMS
Net sales 3,723 5,622 5,881 57.9 4.6
EBITDA 1,136 1,512 1,655 45.7 9.5 We build 58% yoy overall topline growth for KIMS in 4QFY23. The yoy numbers aren't exactly
EBIT 949 1,179 1,300 36.9 10.3 comparable due to Sunshine being consolidated from 1QFY23 (Rs1.17 bn sales expected in 4QFY23)
PBT 993 1,128 1,264 27.3 12.0 and Nagpur being consolidated from September 1, 2022 (Rs390 mn sales expected in 4QFY23). For the
Tax 235 310 322 37.2 4.0 Telangana mature cluster, we build in a 8% qoq sales growth in 4QFY23.
Reported PAT 731 760 877 19.9 15.4
Extraordinaries — — — — — We expect KIMS' consolidated EBITDA to grow 46% yoy and 9.5% qoq in 4QFY23. We bake in 26.5%
Adjusted PAT 807 760 877 8.7 15.4 (down 190 bps qoq) and 10.3% (up 560 bps qoq) post-Ind AS-116 EBITDA margins for Sunshine and
EPS (Rs/share) 10.1 9.5 11.0 8.7 15.4 Nagpur respectively. Overall, we expect KIMS' EBITDA margin to decline 240 bps yoy and grow 125 bps
EBITDA margin (%) 30.5 26.9 28.1 -237 bps 124 bps qoq, respectively, in 4QFY23 to 28.1%.
Max Healthcare
Net sales 12,203 14,638 15,080 23.6 3.0
EBITDA 2,996 4,050 4,211 40.5 4.0 Given 4Q is the seasonally strongest quarter, we expect Max's 4QFY23 occupancies to improve qoq. In
4QFY23, we expect Max's scheme mix to decline from 29% in 3QFY23, aiding ARPOB growth. We build in
EBIT 2,341 3,416 3,541 51.3 3.7
24% yoy and 23% yoy growth for the overall business and the network hospitals business, respectively.
PBT 2,125 3,478 3,441 61.9 (1.1) On a sequential basis, we bake in a 3% growth in both overall sales and network hospital sales. We
Tax 342 608 506 47.9 (16.7) expect Max Lab and Max@Home to post 24% yoy and 37% yoy sales growth, respectively.
Reported PAT 1,714 2,688 2,815 64.3 4.7
Extraordinaries (69) (182) (120) 73.2 (34.1)
Adjusted PAT 1,772 2,837 2,917 64.6 2.8 Overall, we are building in 40.5% yoy growth in EBITDA (+4% qoq) for Max in 4QFY23. We expect Max's
EPS (Rs/share) 1.8 2.9 3.0 64.6 2.8 4QFY23 EBITDA margin to expand 340 bps yoy to 27.9%.
Metropolis Healthcare
Net sales 3,059 2,855 2,893 (5.4) 1.3
EBITDA 748 705 734 (2.0) 4.1 We expect Metropolis' 4QFY23 non-Covid revenues to grow 12% yoy in 4QFY23 on higher volumes, both
on the B2C and on the B2B front. We expect the Mohalla clinic sales to fully compensate for loss of the
EBIT 569 475 499 (12.3) 5.0
NACO contract from Feb-2023 only over the next few quarters. Compared to Rs512 mn and Rs77 mn in
PBT 565 480 504 (10.8) 5.0 4QFY22 and 3QFY23, we bake in Rs40 mn Covid revenues for Metropolis in 4QFY23.
Tax 163 121 127 (22.2) 4.8
Reported PAT 400 358 376 (6.1) 4.9
Extraordinaries — — — — — We expect Metropolis' EBITDA of Rs734 mn in 4QFY23 to decline 2% yoy. We build in an EBITDA margin
expansion of 90 bps yoy to 25.4% for Metropolis in 4QFY23 as nil NACO sales (lower margins) will offset
Adjusted PAT 400 358 376 (6.1) 4.9
lower Covid contribution and increased investments. We note there is no incremental adjustment for the
EPS (Rs/share) 7.9 7.1 7.4 (6.1) 4.9 Hitech acquisition from 4QFY23 as it is now fully in the base.
Narayana Hrudayalaya
Net sales 9,407 11,282 11,528 22.5 2.2
EBITDA 1,751 2,544 2,623 49.8 3.1
We build in 22.5% yoy and 2% qoq growth, respectively, in overall sales for NARH in 4QFY23. For India
EBIT 1,283 1,971 2,038 58.8 3.4
hospitals, we build in a 23% yoy growth and 2.5% qoq growth in 4QFY23. We expect 20% yoy sales
PBT 1,218 1,899 2,018 65.6 6.3 growth in Cayman in 4QFY23.
Tax 503 360 404 (19.7) 12.0
Reported PAT 689 1,538 1,614 134.1 4.9
Extraordinaries — — — — — We expect NARH's consolidated EBITDA to grow 50% yoy (+3% qoq) at Rs2.6 bn in 4QFY23. We build
22.8% EBITDA margin in 4QFY23 (+20 bps qoq, +410 bps yoy). We expect the yoy improvement in
Adjusted PAT 689 1,538 1,614 134.1 4.9
profitability to be led by both the segments, with India pre-Ind AS-116 EBITDA margins to expand 560
EPS (Rs/share) 3.4 7.5 7.9 134.1 4.9 bps yoy (+50 bps qoq) and Cayman pre-Ind AS-116 EBITDA margins to improve +20 bps yoy (-50 bps
EBITDA margin (%) 18.6 22.6 22.8 414 bps 20 bps qoq), respectively.
Rainbow Children's Medicare
Net sales 2,124 3,064 2,670 25.7 (12.9)
EBITDA 481 1,068 856 77.8 (19.8)
Owing to a seasonally weak 4Q for pediatric hospitals, we bake in overall sales decline of 13% qoq for
EBIT 259 836 646 149.9 (22.7)
Rainbow. On a yoy basis, we expect mature hospitals and new hospitals to grow at 26% yoy and 25%
PBT 158 783 591 275.0 (24.5) yoy, respectively, in 4QFY23.
Tax 35 201 152 333.7 (24.4)
Reported PAT 122 579 434 256.1 (25.0)
We expect Rainbow's gross margin to contract by 20 bps qoq to 86.7%. On the EBITDA front, we expect
Adjusted PAT 122 579 434 256.1 (25.0)
a sequential decline of 20%, with margins of 32.1% (-280 bps qoq). Overall, we bake in an EBITDA of
EPS (Rs/share) 1.3 5.7 4.3 235.8 (25.0) Rs856 mn for Rainbow in 4QFY23.
Hotels & Restaurants
Devyani International
Net sales 5,907 7,906 7,467 26.4 (5.5) We model 13, 22, and 12 net new KFC, PH, Costa stores in 4QFY23 and ADS of Rs105K (-9%/-7%
qoq/yoy), Rs37.5K (-13%/-8.8% qoq/yoy), and Rs28K (-25%/-8% qoq/yoy), respectively. KFC should
EBITDA 1,397 1,739 1,414 1.2 (18.7)
report low single-digit SSSG whereas Pizza Hut should report mid single-digit SSS decline. We expect
EBIT 749 1,033 704 (6.0) (31.8) revenues from other domestic brands and international outlets at Rs510 mn and Rs558 mn,
respectively. We note that most QSR players witnessed a slowdown in demand starting November 2022,
PBT 451 736 398 (11.9) (45.9)
which continued in 4QFY23E attributable to impact of broad-based inflation on discretionary
Tax (335) (62) 19 NM NM consumption.
Reported PAT 759 710 378 (50.2) (46.8) We estimate +5/(-)135/+60 bps qoq GM change in KFC/PH/Costa amid high dairy inflation. High RM
Extraordinaries (27) (88) — — — inflation and lower operating leverage are expected to weigh on brand contribution (restaurant level)
margin with KFC at 18.9% (-70 bps qoq), PH at 11.1% (-300 bps qoq) and Costa at 26.2% (-25 bps qoq),
Adjusted PAT 786 798 378 (51.9) (52.6)
respectively. Pre-Ind AS 116: We expect company-level pre-Ind AS 116 EBITDA of Rs925 mn (down 21%
EPS (Rs/share) 0.7 0.7 0.3 (51.9) (52.6) qoq) and EBITDA margin at 12.4% (down 240 bps qoq) as corporate overheads could increase to Rs333
EBITDA margin (%) 23.6 22.0 18.9 -471 bps -307 bps mn versus Rs278 mn in 3Q.
Jubilant Foodworks
Net sales 11,579 13,166 11,757 1.5 (10.7) We expect 9-10% SSS decline and 7-8% LFL decline (non-split restaurants) for Domino's, weakest same-
EBITDA 2,897 2,900 2,350 (18.9) (19.0) store metrics across QSR brands. We estimate 1.5% yoy growth in standalone revenues despite about
EBIT 1,865 1,602 1,122 (39.9) (30.0) 15% yoy growth in Domino's store count to about 1,807 stores (+47 stores qoq). Our estimates imply a
PBT 1,539 1,194 729 (52.7) (39.0) decline in average revenue per store of about 12-13% yoy on account of (1) store splits and (2) subdued
demand due to high consumer inflation.
Tax 374 309 182 (51.4) (41.0)
Reported PAT 1,161 886 547 (52.9) (38.2)
Extraordinaries (4) — — — —
We estimate 70 bps qoq decline in GM to 74.7% (high dairy/flour inflation) and 200 bps/500 bps
Adjusted PAT 1,165 886 547 (53.1) (38.3)
qoq/yoy decline in reported EBITDA margin to 20% (GM pressure and adverse operating leverage).
EPS (Rs/share) 1.8 1.3 0.8 (53.1) (38.3)
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Lemon Tree Hotels
Net sales 1,195 2,335 2,482 107.7 6.3
EBITDA 216 1,265 1,370 534.4 8.3
EBIT (49) 1,029 1,131 NM 9.9 We factor ARR of Rs6,005/day (+47% yoy) and occupancy of 69% for 4QFY23.
PBT (397) 590 736 NM 24.8
Tax (3) 106 230 NM 117.0
Reported PAT (246) 400 436 NM 9.1
Adjusted PAT (246) 400 436 NM 9.1 Improvement in EBITDA margin to 55% in 4QFY23 should be seen on account of increase in revenues.
EPS (Rs/share) (0.3) 0.5 0.6 NM 9.1
Restaurant Brands Asia
Net sales 2,687 3,698 3,523 31.1 (4.7)
EBITDA 302 479 431 42.6 (9.9) We model an 11% qoq decline in ADS of BK India to Rs107k in 4QFY23E, implying a revenue decline of
EBIT (48) 45 (15) (69.4) (132.9) 4.7% qoq to Rs3.5 bn on the back of strong store additions (bulk of 3Q new stores were added toward
PBT (132) (112) (194) 46.7 72.9 the end of the quarter). We estimate 11 new BK India net additions in the quarter, taking the total to 390.
Tax — — — — —
Reported PAT (132) (112) (194) 46.7 72.9
Extraordinaries — — — — — We model standalone gross margin (BK India) at 66.5%, flat qoq as high RM inflation is offset by the
scale-up of BK Cafe. We expect BK India EBITDA margin (pre-Ind-AS 116) at 3.5% versus 4.2% in 3QFY23
Adjusted PAT (132) (112) (194) 46.7 72.9
due to lower operating leverage and as investments in breakfast/BK café could continue to weigh on
EPS (Rs/share) (0.3) (0.2) (0.4) 46.7 72.9 near-term profitability.
Sapphire Foods
Net sales 4,968 5,961 5,678 14.3 (4.8) We model 11, 7, and 1 net new KFC, PH, Sri Lanka stores in 4QFY23E and ADS of Rs124k (-8.5%/-6%
EBITDA 998 1,167 1,003 0.5 (14.0) qoq/yoy; weaker versus Devyani due to higher impact of 'Navratra' in SF's regions), Rs49k (-16%/-12%
EBIT 421 486 310 (26.5) (36.2) qoq/yoy), and Rs70k (-6% qoq), respectively. KFC should report low single-digit SSSG, whereas Pizza Hut
PBT 286 336 152 (46.7) (54.6) should report mid-single-digit SSS decline. Overall, demand trends in the QSR space are expected to be
weak, owing to the slowdown in discretionary consumption, led by inflationary pressures.
Tax 21 9 9 (58.6) (1.3)
Reported PAT 265 327 144 (45.8) (56.1) We estimate +20/(-)150/(-)75 bps qoq change in gross margin in KFC/PH/Sri Lanka. High inflation in
Extraordinaries — — — — — cheese/flour is weighing on PH's GM. Expect the brand contribution (restaurant level) margin for KFC,
PH, Sri Lanka at 19.1% (-110 bps qoq, adverse operating leverage), 10.5% (-360 bps qoq, GM
Adjusted PAT 265 327 144 (45.8) (56.1)
compression and lower operating leverage), and 14.5% (-10 bps qoq), respectively. Pre-Ind-AS 116: We
EPS (Rs/share) 4.2 5.1 2.3 (45.8) (56.1) expect company-level EBITDA of Rs609 mn (-17%/-4% qoq/yoy) and EBITDA margin at 10.7% (-165 bps
EBITDA margin (%) 20.1 19.6 17.7 -242 bps -191 bps qoq).
Westlife Foodworld
Net sales 4,550 6,113 5,526 21.5 (9.6)
EBITDA 628 1,020 842 34.1 (17.4) We expect some impact of broader discretionary slowdown on McDonald's as well--we expect an 11%
qoq decline in ADS (versus usual 6-8% qoq decline per seasonality) to about Rs173k (+10% yoy) in
EBIT 282 634 455 61.4 (28.3)
4QFY23. We estimate 22.4% yoy revenue growth and about 12% SSSG (versus 20% in 3QFY23). We build
PBT 205 480 283 37.9 (41.0) in 17 new store additions in the quarter.
Tax 52 116 73 39.6 (37.4)
Reported PAT 153 364 210 37.3 (42.1)
Extraordinaries — — — — — We model gross margins at 66.4%, down 45 bps qoq on account of product mix change (seasonality and
some downtrading). Pre-Ind-AS 116: We expect company-level EBITDA of Rs705 mn (-15.5% qoq) and
Adjusted PAT 153 364 210 37.3 (42.1)
EBITDA margin at 12.8% (-90 bps qoq) as the decline in employee costs (3QFY23 had certain one-offs) is
EPS (Rs/share) 1.0 2.3 1.4 37.3 (42.1) offset by GM decline and lower operating leverage.
Internet Software & Services
Cartrade Tech
Net sales 931 972 960 3.1 (1.2)
EBITDA (259) 106 114 NM 7.6
We model 3% yoy revenue growth on account of 12% yoy growth in the advertisement segment. The
EBIT (324) 34 42 NM 24.1
advertisement segment peaks in 3Q and will see a 3% sequential decline.
PBT (214) 201 213 NM 5.7
Tax (0) 61 53 NM (12.7)
Reported PAT (257) 130 145 NM 11.1
Low ESOP expenses and positive operating leverage will lead to strong yoy growth in EBITDA and
Adjusted PAT (257) 130 145 NM 11.1
margins
EPS (Rs/share) (5.5) 2.8 3.1 NM 11.1
EBITDA margin (%) (27.8) 10.9 11.9 3971 bps 97 bps
FSN E-Commerce Ventures
Net sales 9,733 14,628 12,770 31.2 (12.7)
EBITDA 385 782 686 78.0 (12.3)
We reckon revenue growth of 31% yoy but 13% qoq decline, primarily on account of coming off the
EBIT 80 275 166 106.3 (39.6)
festive season base. Expect BPC to grow 27% yoy and fashion business to see 35% growth yoy.
PBT 58 127 16 (72.9) (87.6)
Tax (18) 35 4 NM (88.4)
Reported PAT 86 82 2 (98.1) (98.0)
We model in sequentially higher GMs on account of higher fashion in the mix, but negative operating
Adjusted PAT 86 82 2 (98.1) (98.0)
leverage will lead to sequentially flat EBITDA margin of 5.4%.
EPS (Rs/share) 0.0 0.0 0.0 (98.1) (98.0)
Info Edge
Net sales 4,555 5,552 5,661 24.3 2.0
EBITDA 1,280 2,168 2,160 68.8 (0.4) We expect Naukri to report 30% yoy revenue growth and 99acres to report 19% yoy revenue growth.
Revenue growth for Naukri may remain healthy despite IT demand coming off on account of strong
EBIT 1,183 2,053 2,045 72.9 (0.4)
deferred revenue trends of the previous quarter. Other segment (JS+Shiksha) should report an 8.7% yoy
PBT 1,595 2,440 2,485 55.9 1.9 decline as JS revenues will be hit (JS shifted to free services model).
Tax 388 523 596 53.9 14.1
Reported PAT 1,207 (843) 1,889 56.5 NM
Extraordinaries — (2,760) — — —
Expect EBITDA margin of 38.2% (versus 39.1% in 3QFY23); decline largely on account of higher losses in
Adjusted PAT 1,207 (843) 1,889 56.5 NM
99acres due higher ad-spends.
EPS (Rs/share) 9.4 (6.5) 14.7 56.5 NM
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Just Dial
Net sales 1,667 2,214 2,345 40.7 5.9
EBITDA (60) 271 340 NM 25.4
We model revenue growth of 40.7% yoy, led by paid campaigns growth of 17% yoy and 20% yoy growth
EBIT (130) 187 252 NM 35.1
in realizations.
PBT 206 876 977 374.5 11.5
Tax (16) 124 186 NM 50.1
Reported PAT 221 753 791 257.5 5.1
Adjusted PAT 221 753 791 257.5 5.1 We expect EBITDA margin expansion of ~220 bps qoq on account of positive operating leverage.
EPS (Rs/share) 2.6 9.0 9.5 257.5 5.1
EBITDA margin (%) (3.6) 12.3 14.5 1812 bps 224 bps
Zomato
Net sales 12,118 19,482 19,913 64.3 2.2
EBITDA (4,497) (3,662) (3,540) (21.3) (3.3) We build in a tepid 2.2% sequential revenue growth on account of lower food delivery orders (2% qoq
EBIT (4,874) (5,210) (5,135) 5.3 (1.4) decline and 12% yoy growth in food delivery GMV). This gets offset by higher contribution from the
PBT (3,517) (3,637) (3,571) 1.5 (1.8) Blinkit business.
Tax 3 (171) — — —
Reported PAT (3,599) (3,466) (3,571) (0.8) 3.0
Extraordinaries 79 — — — — Overall EBITDA loss of Zomato contracts sequentially on account of an improvement in the profitability
Adjusted PAT (3,599) (3,466) (3,571) (0.8) 3.0 of Blinkit, offset in part by lower absolute adjusted EBITDA of food delivery due to lower orders.
EPS (Rs/share) (0.5) (0.4) (0.4) (9.3) 3.0
EBITDA margin (%) (37.1) (18.8) (17.8) 1933 bps 101 bps
IT Services
HCL Technologies
Net sales 225,978 267,000 264,671 17.1 (0.9) We forecast sequential revenue decline of 2.1%, driven by seasonal weakness in the products business.
We forecast 1.5% c/c growth in services (IT services + ERD), aided by ramp-up of large deals won in the
EBITDA 50,351 63,787 59,720 18.6 (6.4) past quarters offset by ramp-downs in impacted verticals such as hi-tech and entertainment. We expect
EBIT 40,528 52,346 48,095 18.7 (8.1) 23% sequential c/c revenue decline in products business and flat revenue on yoy comparison. We
expect EBIT margin to decline 140 bps qoq and increase 20 bps yoy due to decline in mix of product
PBT 43,065 53,746 50,341 16.9 (6.3) business. We forecast 25 bps sequential margin improvement in services, driven by bench optimization
Tax 7,172 12,840 12,082 68.4 (5.9) and other operational efficiencies. We forecast decline of 5-10% in net new deal TCV on yoy comparison.
We expect muted deal win TCV in Europe due to delays in decision making. We expect pipeline to remain
Reported PAT 35,840 40,906 38,259 6.8 (6.5) healthy.
We expect HCLT to guide for 4-6% revenue growth for FY2024; we expect implied services growth
Extraordinaries — — — — — guidance of 5-7%. We expect weak 1QFY24 and pick-up of growth from 2QFY23, driven by the ramp-up
of large deals won in the past quarters and bottoming out of headwinds from impacted verticals/clients.
Adjusted PAT 35,840 40,906 38,259 6.8 (6.5) On profitability, expect HCLT to guide for 18-20% EBIT margin band. We expect investor focus on—(1)
revenue growth guidance for FY2024 and whether growth can be among industry leaders, (2) impact on
discretionary businesses, i.e., products and ERS in the event of recession, (3) exposure to impacted
EPS (Rs/share) 13.2 15.1 14.1 6.8 (6.5) verticals/clients and when revenue will bottom out in these segments, (4) outlook on revenue growth in
Europe, (5) levers to increase margins to normalized band, (6) large-deal activity in the market, especially
EBITDA margin (%) 22.3 23.9 22.6 28 bps -133 bps noting HCLT's higher dependence on large deals for growth, and (7) changes to hiring plans in FY2024 in
a deteriorating macro environment.
Infosys
We expect muted 0.1% revenue growth in c/c, driven by both cloud/digital programs and cost take-out
Net sales 322,760 383,180 386,932 19.9 1.0
agenda of clients. March is a seasonally weak quarter for the company. We do not expect material
incremental revenue contribution from Daimler deal. We expect 25 bps sequential decline in EBIT margin
EBITDA 78,460 93,670 93,597 19.3 (0.1)
with headwinds from visa costs (40 bps) partially offset by operational efficiencies and lower pass-
through expense. Deal TCV and pipeline will take centerstage. Large deals will be in focus. Quantum of
EBIT 69,560 82,420 82,235 18.2 (0.2)
pipe, nature of large deals, pace of decision making and drivers of consolidation trend will be important
focus points. We expect healthy TCV of wins powered by large deals. We expect Infosys to guide for
PBT 75,430 89,310 87,355 15.8 (2.2)
revenue growth of 5-7% in FY2024 and EBIT margin of 21-23%. Composition of growth matters—a front-
ended growth guidance will give lot more comfort and even create scope for upgrades. A back-ended
Tax 18,480 23,450 23,367 26.4 (0.4)
growth guidance may not be viewed favorably.
Reported PAT 56,860 65,860 63,787 12.2 (3.1) Attrition will likely moderate further as supply side pressures ease. Easing of attrition will aid in realizing
operational efficiencies. We expect investor focus on—(1) revenue growth guidance and whether growth
Extraordinaries — — — — — will be back-ended, (2) outcome of clients budgeting cycle, priorities of investments and increase/
decrease in spending, (3) positioning in vendor consolidation and cost take out opportunities , (4) health
Adjusted PAT 56,860 65,860 63,787 12.2 (3.1)
of impacted verticals such as hi-tech, retail, parts of financial services and Europe, (5) strength of deal
EPS (Rs/share) 13.5 15.7 15.4 13.7 (2.0) pipeline and pace of closures, (6) re-allocation of responsibilities and portfolios of Mohit Joshi, (7)
measures to improve margins and (8) impact of recent banking sector events on BFS tech spending
EBITDA margin (%) 24.3 24.4 24.2 -12 bps -26 bps outlook .
LTIMindtree
Net sales 71,990 86,200 88,590 23.1 2.8 We expect sequential growth of 2.3% in c/c, driven by LTI's portfolio of business. Mindtree's portfolio of
business has high exposure to impacted verticals of retail and hi-tech, which will be under pressure.
EBITDA 10,860 13,037 16,228 49.4 24.5 Revenue growth on yoy basis is at a reasonably healthy 12.5%. We expect 230 bps sequential margin
improvement due to the absence of one-time merger costs and furloughs. Note that margins will still
EBIT 9,245 11,256 14,402 55.8 28.0
decline by 180 bps on yoy basis, attributable to investments in people for future growth. Our margin
PBT 11,174 12,395 15,631 39.9 26.1 forecast does not factor in any additional one-off merger related charges. We do not expect the
departure of Venu Lambu, ex-co-head of sales, at the beginning of the quarter to impact deal win
Tax (3,755) (3,099) (3,888) 3.5 25.4 momentum.
Reported PAT 7,414 9,294 11,744 58.4 26.4 We expect healthy growth in TCV signings on yoy basis, aided by large deal wins. Both LTI and Mindtree
on a standalone basis have the capability to win large deals in managed services. The combined entity
Extraordinaries — — — — — has won quite a few deals involving integrated service offerings which were showcased in the March
2023 analyst day. We expect investors to focus on—(1) timeline for early benefits from revenue
synergies to flow into revenue, (2) health of deal pipeline and conversion rates, (3) timing of ramp-up of
Adjusted PAT 7,414 9,294 11,744 58.4 26.4
recently won large deals and their impact on margins, (4) more details of new organization structure
including vertical-geo heads, (5) outlook for Mindtree's portfolio given slowing cloud consumption and
EPS (Rs/share) 37.6 33.8 39.5 5.1 16.7 prudence in discretionary spending by clients, (6) tech spending outlook of key US and European banks
considering high exposure to the segment amidst heightened caution, (7) positioning in cost take-out
EBITDA margin (%) 15.1 15.1 18.3 323 bps 319 bps deals and vendor consolidation events, and (8) levers to offset high wage inflation especially onsite.
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L&T Technology Services
Net sales 17,561 20,486 20,707 17.9 1.1 We forecast 0.9% qoq growth in c/c, driven by continued momentum in transportation vertical where
large deals will ramp up. We expect strong growth in industrial products, transportation driven by large
EBITDA 3,805 4,412 4,430 16.4 0.4
deal wins in areas of sustainability, digital twins and product development over past couple quarters. We
EBIT 3,274 3,829 3,793 15.9 (0.9) expect return to growth in plant engineering and muted performance at other verticals. We expect 40
bps qoq moderation in EBIT margin to due to reversal of G&A costs, near lows of 11.5% of revenue and
PBT 3,588 4,455 4,143 15.5 (7.0)
partially offset by operational efficiencies. We expect LTTS to guide for 7-9% organic revenue growth in
Tax (956) (1,406) (987) 3.2 (29.8) FY2024E.
Reported PAT 2,620 3,035 3,142 19.9 3.5 We expect healthy large deal wins. The pipeline of deals is strong and similar to the December 2022
quarter wherein the company announced 5 large deals. We expect robust deal wins to continue in the
Extraordinaries — — — — — transportation vertical. We expect investor focus on—(1) overall demand outlook given discretionary
nature of ERD services and impacts due to macro uncertainties, (2) large deal wins given commentary of
Adjusted PAT 2,620 3,035 3,142 19.9 3.5
healthy pipeline across multiple verticals, (3) outlook for hi-tech and medical devices verticals that have
EPS (Rs/share) 24.8 28.7 29.7 20.0 3.7 lagged over last few quarters, (4) margin levers to maintain 18%+ organic EBIT margin, (5) margin
impact due to SWC acquisition and recovery trajectory, (6) adoption trends for 6 bets defined by the
EBITDA margin (%) 21.7 21.5 21.4 -28 bps -15 bps company, and (7) path to achieve US$1.5 bn quarterly revenue run rate guidance by FY2025E.
Mphasis
We expect further decline in revenue and build in 1.5% decline on c/c basis. We expect sequential
Net sales 32,777 35,062 34,685 5.8 (1.1)
decline of US$8-9 mn in Digital Risk business. We forecast flat revenue ex-DR due to headwinds in
multiple other verticals namely (1) hi-tech on account of revenue decline among hi-tech clients of Blink
EBITDA 5,772 6,175 6,105 5.8 (1.1)
(acquired entity), (2) revenue decline in logistics clients due to cost cutting at the corporate level and (3)
weak insurance. Mphasis should report a revenue decline of 0.2% on yoy comparison, weakest in our
EBIT 4,973 5,354 5,307 6.7 (0.9)
coverage universe. Sequential revenue growth in 1HFY23 was muted while revenue declined in 2HFY23
due to challenges in impacted portfolio of services and clients. We expect stable EBIT margin of 15.3%
PBT 5,157 5,510 5,434 5.4 (1.4)
at the lower end of guidance. Tailwinds from the absence of furloughs will be absorbed by weak revenue
growth. Utilization increase due to better fresher deployment of projects may not be significant due to
Tax 1,236 1,387 1,386 12.1 (0.1)
demand challenge in multiple verticals.
We do not forecast any meaningful growth in deal TCVs. Large deal wins have been decent but has not
Reported PAT 3,921 4,123 4,048 3.2 (1.8)
provided additional kicker to offset revenue decline in steady-state business. We expect investors to
focus on—(1) timeline for recovery in hi-tech, logistics and insurance verticals, (2) health of deal pipeline
and conversion rate, (3) assessment of headwinds to Digital Risk business, (4) tech spending outlook of
key banking clients given high exposure to the vertical, (5) margin trajectory in FY2024 noting easing of
Adjusted PAT 3,921 4,123 4,048 3.2 (1.8)
supply-side headwinds and tailwinds from anniversary of M&A-related amortization charges and
operational efficiencies, (6) success in growing accounts beyond top-10 and progression of such
EPS (Rs/share) 20.9 21.9 21.5 2.9 (1.8)
accounts into larger revenue run-rate noting high client concentration, and (8) reasons for
underperformance in Europe noting healthy growth among peers despite elevated concerns around
demand environment.
TCS
Net sales 505,910 582,290 595,082 17.6 2.2 TCS will likely lead Tier 1 IT on growth in 4QFY23. We forecast growth of 1.1% qoq and 11.2% yoy
revenue growth in c/c. Growth will likely be led by spending on cloud and digital programs, cost take-
EBITDA 138,450 155,540 161,847 16.9 4.1 outs and wallet share/vendor consolidation gains. Exposure to impacted banking clients will not
materially impact revenue growth in the quarter, in our view. We forecast 50 bps increase in EBIT margin
EBIT 126,280 142,840 149,105 18.1 4.4 on sequential basis which will be driven by easing supply-side pressures, rationalization of
subcontractor usage, improved utilization and operational efficiencies. TCS' press releases and certain
PBT 133,640 146,440 157,562 17.9 7.6 media reports have indicated several deal wins in the quarter including a few mega deals (>US$500 mn
TCV). We expect strong deal wins of US$10 bn+ for the quarter, assuming normal renewal component.
Tax 34,050 37,610 40,167 18.0 6.8 We do not include TCV from mega deal with BSNL that is likely to be signed with TCS.
TCS' commentary on growth outlook will be keenly followed. TCS is expected to be a beneficiary of
Reported PAT 99,260 108,460 117,017 17.9 7.9
higher focus of enterprises on cost take-outs and core modernization. We expect investor focus on—(1)
CY2023E budget closure and pace of decision making and ramp up of budgeted spends; (2) pipeline of
cost take-out and vendor consolidation decisions of clients and win-rates; (3) changes to strategy, key
bets and priorities of the organization under new CEO and continuity of current organizational structure
Adjusted PAT 99,260 108,460 117,017 17.9 7.9
that underwent a reorg under Rajesh; (4) health of impacted verticals/ geos especially hi-tech, retail and
Europe; (5) outlook of spending in BFS given recent events and exposure to impacted companies; (6)
EPS (Rs/share) 26.9 29.6 32.0 19.1 7.9
how the current slowdown and potentially even recession differ from the past; (7) whether attrition rate
can reduce to pre-Covid levels and maintain pre-Covid level gap with peers, and (8) levers to increase
margin back to 26-28% range.
Tech Mahindra
Net sales 121,163 137,346 137,807 13.7 0.3
We expect revenue decline of 0.6% on sequential basis in c/c. Revenue decline in top telecom accounts,
EBITDA 20,884 21,440 21,396 2.5 (0.2) slowdown in hi-tech and muted growth in BPO following seasonally strong quarter will offset tailwinds
EBIT 16,042 16,459 16,365 2.0 (0.6) from seasonally strong quarter in Comviva business. Revenue decline will likely feed into margins. We
build in EBIT margin decline of 10 bps on sequential basis. Lack of leverage from growth is the key
PBT 18,688 17,802 17,765 (4.9) (0.2) headwind. Utilization levels are maxed out and will provide limited tailwinds. Weak macro and slow
Tax 3,280 4,859 4,619 40.8 (4.9) decision making will likely feed into muted deal wins. We forecast net new TCV of US$600 mn, down
40.7% on yoy comparison. Deal win TCV will likely decline 11.2% on yoy ttm basis.
Reported PAT 15,057 12,966 13,146 (12.7) 1.4
Extraordinaries — — — — — We expect investor focus on—(1) near term growth outlook given client-specific headwinds and
deceleration in TCV growth, (2) commentary around CEO transition and likely changes to strategy and
organizational structure, (3) timing of divestments of low margin business that will aid margins but
Adjusted PAT 15,057 12,966 13,146 (12.7) 1.4
adversely impact revenue growth, (4) outlook for margins in FY2024 noting current level of margins is
lower than normalized levels and can be a low-hanging fruit, (5) outlook for vulnerable segments such as
EPS (Rs/share) 15.4 13.3 13.4 (12.7) 1.4 XDS, ERD and network services, which have higher exposure to discretionary spending, (6) health of deal
pipeline and positioning in cost take-out deals, (7) any revenue leakage in existing accounts and
EBITDA margin (%) 17.2 15.6 15.5 -172 bps -9 bps positioning in vendor consolidation events, and (8) outlook for revenue growth in top telecom clients.
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Wipro
Net sales 209,682 233,681 234,915 12.0 0.5
We expect Wipro to report sequential revenue decline of 0.4% in c/c, at the lower end of the company’s
EBITDA 42,538 46,749 45,605 7.2 (2.4) 4QFY23 growth guidance of (0.6)-1.0% c/c qoq. This implies c/c yoy growth of 6.5%. Exposure to
EBIT 35,112 37,636 37,857 7.8 0.6 impacted verticals such as hi-tech and consumer, slowdown in discretionary spending and higher
exposure to consulting are the drivers of revenue decline in our view. We expect 10 bps decline in EBIT
PBT 37,341 39,726 40,741 9.1 2.6 margin qoq to 16.2%. We expect reasonable TCV led by mid-size cost focus led deals. ACV would be
Tax 6,399 9,102 9,370 46.4 2.9 under pressure noting slowdown in discretionary programs. We expect revenue guidance of decline of
1% at the lower end of the band and growth of 1% at the upper end of the band.
Reported PAT 30,874 30,529 31,361 1.6 2.7
Wipro had net cash balance of Rs221 bn, which could possibly increase to Rs250 bn by end-March
Extraordinaries — — — — — 2023. The company has enough cash reserves to pursue a buyback as part of capital allocation policy.
We expect investor focus on—(1) next steps in turnaround which has hit a roadblock with return to
Adjusted PAT 30,874 30,529 31,361 1.6 2.7 industry lagging growth on organic basis, (2) stability in senior management team, given several senior
level departures, (3) outlook for consulting business (Capco and Rizing), which can be impacted due to
pullback in discretionary spending, (4) outlook for tech spending in BFS and impact of exposure to
EPS (Rs/share) 5.6 5.6 5.7 1.6 2.7 impacted companies- SVB, Silvergate, Signature Bank and Credit Suisse, (5) cause for divergence in
revenue growth and reported deal bookings, (6) positioning in cost take-out and vendor consolidation
EBITDA margin (%) 20.3 20.0 19.4 -88 bps -60 bps deals where Wipro can be vulnerable, (7) margin levers to meet aspirational margin level of 17%+ and (8)
capital allocation given build-up of cash reserves.
Media
PVR
Net sales 5,371 9,407 11,727 118.3 24.7 4QFY23 will be the first quarter for PVR-INOX merged entity. BO collections were dominated by Pathaan
EBITDA (341) 1,283 105 NM (91.8) (Rs5.4 bn NBOC) and Tu Jhoothi Main Makkar (Rs1.3 bn) even as other releases failed to impress. We
EBIT (1,141) 664 (837) (26.7) (226.0) expect 30.5 mn footfalls (about 18% below 3QFY23), ATP of Rs240 (versus Rs238 in 3QFY23) and SPH
PBT (1,363) 403 (1,073) (21.2) (366.2) of about Rs122 (versus Rs122 in 3QFY23). We expect ad revenues of MergeCo at ~Rs1 bn (about 12%
below 3QFY23).
Tax (407) 152 (395) (2.8) (360.1)
Reported PAT (956) 251 (803) (16.0) (419.6) We estimate EBITDA of Rs105 mn on pre-Ind-AS 116 basis and about 0.9% EBITDA margin factoring in
Extraordinaries — — (125) — — ~21% occupancy- we note that PVR-INOX' EBITDA breakeven occupancy is about 18-20%. Film hire cost
Adjusted PAT (956) 251 (803) (16.0) (419.6) (% of ticket sales) is expected to remain similar to 2QFY23 level (45.3%). We factor in a significant drop
EPS (Rs/share) (19) 5 (16) (16.0) (419.6) in PVR Pictures revenues/EBITDA versus last quarter. We expect certain merger related cost of Rs125
mn (exceptional item).
EBITDA margin (%) (6.4) 13.6 0.9 724 bps -1275 bps
Sun TV Network
Net sales 8,330 8,575 8,256 (0.9) (3.7)
EBITDA 5,150 4,964 4,506 (12.5) (9.2)
We forecast 2% yoy growth (versus flattish yoy in 3Q) in advertisement revenues and flattish yoy (versus
EBIT 4,885 4,639 4,171 (14.6) (10.1)
4% yoy decline in 3Q) domestic subscription revenues. We build in IPL revenue of Rs120 mn in 4QFY23
PBT 5,388 5,569 5,051 (6.3) (9.3) versus Rs289 mn in 4QFY22 factoring in the late start of IPL 2023 versus 2022 edition.
Tax 1,345 1,406 1,263 (6.1) (10.2)
Reported PAT 4,044 4,163 3,789 (6.3) (9.0)
Adjusted PAT 4,044 4,163 3,789 (6.3) (9.0) We estimate 14.6%/6.3% yoy decline in EBIT/PAT. Investor focus would be on dividend payout and
EPS (Rs/share) 10 11 10 (6.3) (9.0) capital allocation.
Zee Entertainment Enterprises
Net sales 23,229 21,112 20,453 (12.0) (3.1)
We expect ~10% decline (versus 16% decline in 3Q) in Zee’s ad revenues factoring in (1) some disruption
EBITDA 4,866 3,380 2,103 (56.8) (37.8) due to NTO 3.0 implementation and (2) withdrawal of Zee Anmol from FTA. We bake in 1% yoy growth in
EBIT 4,190 2,467 1,228 (70.7) (50.2) domestic subscription revenue (benefit from price increases on implementation of NTO 3 will likely
PBT 4,394 2,554 1,308 (70.2) (48.8) reflect in 1QFY24) and a 9% yoy decline in international subscription revenue off a high base. We also
Tax 1,572 619 340 (78.4) (45.1) expect other operating revenue to be partly boosted by Thunivu (Ajith Kumar) and Mrs Chatterjee vs
Norway (Rani Mukherji).
Reported PAT 1,819 243 468 (74.3) 92.5
Extraordinaries (1,002) (1,690) (500) (50.1) (70.4) We estimate 57%/38% yoy/qoq decline in EBITDA to Rs2.1 bn led by about 10-11 ppts yoy decline in
EBITDA margin to 10.3%. Weak profitability is attributable to (1) weak ad environment; (2) viewership
Adjusted PAT 2,821 1,933 968 (65.7) (49.9) share loss and associated increase in content investment; (3) elevated OTT losses; (4) costs associated
with sports broadcasting (international T20), and (5) higher amortization pertaining to elevated
EPS (Rs/share) 3 2 1 (65.7) (49.9)
inventory. We also factor in exceptional charge of Rs500 mn towards merger expenses and towards
EBITDA margin (%) 20.9 16.0 10.3 -1067 bps -573 bps settlement charges (in excess of amounts already provided) related to disputes with IPRS/IIB.
Metals & Mining

Hindalco Industries
Net sales 557,640 531,510 527,843 (5.3) (0.7)
EBITDA 73,050 36,090 56,142 (23.1) 55.6 We estimate India EBITDA (standalone + Utkal) at Rs 23.6 bn (-42% yoy, +26% qoq) with (1) aluminum
EBIT 55,430 17,800 37,852 (31.7) 112.7 EBITDA (including Utkal) of Rs 18.1 bn (-51% yoy, +37% qoq) led by lower costs and (2) Copper EBITDA
PBT 50,310 12,120 31,062 (38.3) 156.3 of Rs 5.5 bn (+41% yoy, flat qoq) with volumes at 105,000 tons (flat yoy, -3.7% qoq).
Tax 9,210 (1,480) 7,765 (15.7) NM
Reported PAT 38,600 13,620 23,296 (39.6) 71.0
Extraordinaries (2,500) 20 — — — We estimate Novelis EBITDA of US$415 mn (-3.8% yoy, +22% qoq) with EBITDA/ton of US$420 (-3.8%
Adjusted PAT 41,100 13,600 23,296 (43.3) 71.3 yoy, +11.8% qoq) led by moderating costs in developed markets. Our consol EBITDA weakness is
EPS (Rs/share) 18.5 6.1 10.5 (43.3) 71.3 primarily led by weak earnings at Novelis.
Hindustan Zinc
Net sales 87,970 78,660 86,252 (2.0) 9.7
EBITDA 49,620 37,070 41,594 (16.2) 12.2
EBIT 41,460 29,000 33,524 (19.1) 15.6 We estimate zinc/lead/silver sales volume to increase nearly 0.5%/10.2%/12.3% yoy respectively on the
PBT 43,570 31,860 36,384 (16.5) 14.2 back of record yearly production numbers
Tax 14,290 10,300 11,762 (17.7) 14.2
Reported PAT 29,280 21,560 24,621 (15.9) 14.2
Adjusted PAT 29,280 21,560 24,621 (15.9) 14.2 We estimate EBITDA to decrease by 16.2% yoy (+12.2% qoq) mainly on the back of lower commodity
EPS (Rs/share) 6.9 5.1 5.8 (15.9) 14.2 prices.
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Jindal Steel and Power
Net sales 143,395 124,524 129,882 (9.4) 4.3
EBITDA 252,588 226,094 233,587 (7.5) 3.3
We estimate steel volumes to increase sequentially to 2 mn tons (-3.8% yoy, +5.3% qoq ) led by recovery
EBIT 258,783 232,170 239,664 (7.4) 3.2
in domestic demand during the quarter.
PBT 262,542 235,802 243,467 (7.3) 3.3
Tax (4,941) (5,441) (5,093) 3.1 (6.4)
Reported PAT 271,727 244,203 248,618 (8.5) 1.8
Extraordinaries 4,082 2,964 — — —
We estimate JSP's standalone steel EBITDA/ton to improve sequentially by +13.9% qoq to Rs
Adjusted PAT 19,194 8,151 11,602 (39.6) 42.3
12,965/ton (-12.3% yoy) mainly led by higher realizations.
EPS (Rs/share) 21.0 8.9 12.7 (39.6) 42.3
JSW Steel
Net sales 468,950 391,340 476,753 1.7 21.8
EBITDA 91,840 47,050 72,749 (20.8) 54.6 We expect JSTL to report standalone volume of 5.69 mn tons (+11.4% yoy, +15% qoq) on ramp-up of
EBIT 73,690 28,230 53,929 (26.8) 91.0 volumes at Dovli phase II. We estimate steel realization to increase by 5.5% qoq ( -6.5% yoy) led by price
PBT 58,460 11,920 36,947 (36.8) 210.0 hikes during the quarter and contract resets.
Tax 17,310 5,040 12,215 (29.4) 142.4
Reported PAT 32,340 4,900 24,982 (22.8) 409.8
Extraordinaries (7,410) (1,580) — — —
We estimate standalone EBITDA/ton to recover by 31% qoq to Rs10,685/ton (-21% yoy) led by higher
Adjusted PAT 39,750 6,480 24,982 (37.2) 285.5
realisations partly offset by higher input costs
EPS (Rs/share) 16.6 2.7 10.4 (37.2) 285.5
National Aluminium Co.
Net sales 43,096 32,900 28,831 (33.1) (12.4)
EBITDA 15,874 4,598 6,417 (59.6) 39.6
We build in (1) Alumina sales at 300,000 tons, an increase of 10.3% yoy and (2) 5% yoy decline in
EBIT 12,032 3,027 4,846 (59.7) 60.1
aluminum sales to 120,000 tons during the quarter
PBT 13,369 3,648 5,467 (59.1) 49.9
Tax 3,424 910 1,367 (60.1) 50.3
Reported PAT 10,257 2,739 4,100 (60.0) 49.7
Extraordinaries 312 — — — —
Sequential improvement in EBITDA by 40% (-60% yoy) led by volume growth of 5%/4.5% qoq in
Adjusted PAT 10,051 2,739 4,100 (59.2) 49.7
aluminium/alumina and marginal improvement in LME Aluminum prices by 2.2% qoq (-27% yoy)
EPS (Rs/share) 5.2 1.4 2.1 (59.2) 49.7
NMDC
Net sales 67,022 37,200 57,894 (13.6) 55.6
EBITDA 26,844 11,434 20,108 (25.1) 75.9 NMDC's iron-ore sales increased 1.5% yoy(+30% qoq) to 12.5 mn tons during the quarter due to recovery
EBIT 25,729 10,598 19,272 (25.1) 81.9 in demand. We estimate blended iron-ore realizations to increase by 20% qoq(-15% yoy) led by price
PBT 28,803 12,177 20,852 (27.6) 71.2 hikes during the quarter.
Tax 10,650 3,276 5,228 (50.9) 59.6
Reported PAT 18,153 8,901 15,624 (13.9) 75.5
We estimate EBITDA/ton to increase sequentially to Rs 1,614/ton (-26% yoy, +35% qoq) mainly on
Adjusted PAT 18,153 8,901 15,624 (13.9) 75.5
account of higher prices and operating leverage
EPS (Rs/share) 5.7 2.8 4.9 (13.9) 75.5
SAIL
Net sales 307,581 249,514 298,337 (3.0) 19.6
EBITDA 41,451 19,863 37,447 (9.7) 88.5
We expect SAIL to report a qoq increase of 13.2% (-0.2% yoy) in volumes. We estimate steel realization
EBIT 30,013 7,653 25,237 (15.9) 229.8
to increase by 5.6% qoq (-2.8% yoy) led by price hikes during the quarter.
PBT 30,133 2,458 19,722 (34.6) 702.3
Tax 7,917 1,712 4,930 (37.7) 188.1
Reported PAT 24,183 4,635 14,791 (38.8) 219.1
Extraordinaries 1,967 3,889 — — —
We estimate EBITDA/ton to recover sequentially (+67% qoq) to Rs 7,967/ton (-9.5% yoy) mainly led by
Adjusted PAT 22,216 747 14,791 (33.4) 1,881.2
prices hikes partially offset by higher input costs during the quarter.
EPS (Rs/share) 5.4 0.2 3.6 (33.4) 1,881.2
Tata Steel
Net sales 693,235 570,836 604,584 (12.8) 5.9
EBITDA 157,466 40,478 58,998 (62.5) 45.8 We estimate steel realization to increase by 4.4% qoq (-6.1% yoy) led by price hikes and contract resets
EBIT 135,032 16,795 34,367 (74.5) 104.6 during the quarter. We expect standalone volumes to be flat yoy (+8.3% qoq) at 4.97 mn tons. India
PBT 126,969 1,821 17,626 (86.1) 867.7 EBITDA/ton to recover by 32% qoq to Rs 13,242/ton (-43% yoy) led by prices hikes partially offset by
Tax 20,299 29,049 8,070 (60.2) (72.2) higher input costs
Reported PAT 97,562 (22,238) 9,557 (90.2) NM
Extraordinaries (9,913) 1,603 — — —
Adjusted PAT 107,475 (23,842) 9,557 (91.1) NM We estimate Europe to report EBITDA loss of US$111/ton (-US$95/ton in 3QFY23) led by weak demand
EPS (Rs/share) 9.4 (2.1) 0.8 (91.1) NM resulting in adverse product mix partly offset sequentially moderating costs.
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Vedanta
Net sales 398,220 341,020 350,724 (11.9) 2.8
EBITDA 136,330 67,340 87,759 (35.6) 30.3
We forecast a 36% yoy decline in EBITDA(+30% qoq) due to weaker yoy commodity prices across
EBIT 112,540 40,140 60,559 (46.2) 50.9
segements. Sequential improvement led by moderation in costs
PBT 105,320 31,580 51,213 (51.4) 62.2
Tax 29,350 13,020 16,388 (44.2) 25.9
Reported PAT 57,990 17,990 26,183 (54.8) 45.5
Extraordinaries (3,360) 5,700 — — — We forecast (1) Aluminum EBITDA to decline by -68% yoy but increase +76% qoq mainly led by lower
costs and marginal improvement in realizations/volumes (2) Oil and Gas division to witness -7.6% qoq
Adjusted PAT 61,350 12,290 26,183 (57.3) 113.0
drop in EBITDA due to windfall tax and lower crude prices during quarter and (3) Zinc India division to
EPS (Rs/share) 16.5 3.3 7.0 (57.3) 113.0 see 16% qoq increase in EBITDA on the back of record yearly volumes
Oil, Gas & Consumable Fuels
BPCL
Net sales 1,087,736 1,191,581 1,127,576 3.7 (5.4)
EBITDA 42,493 42,339 75,203 77.0 77.6
We expect BPCL to report a sharp qoq improvement in earnings, driven by further recovery in auto-fuel
EBIT 29,758 26,519 59,224 99.0 123.3
marketing margins. OMCs' marketing margins on diesel turned positive in 4Q compared to losses in 3Q.
PBT 30,395 21,258 61,847 103.5 190.9
Tax 9,090 1,663 15,567 71.2 836.3
Reported PAT 21,305 19,596 46,280 117.2 136.2
Extraordinaries — — — — — We assume (1) reported refining margins of US$12.5/bbl (versus US$15.9/bbl in 3Q), (2) crude
throughput to increase 1% qoq to 9.5 mmt, (3) BPCL’s fuel over-recoveries of nearly Rs20.5 bn (versus
Adjusted PAT 21,305 19,596 46,280 117.2 136.2
~Rs32 bn under-recovery in 3Q), and (4) inventory loss of nearly Rs12 bn with loss of US$1.25/bbl in
EPS (Rs/share) 10.0 9.2 21.7 117.2 136.2 refining and US$0.6/bbl in marketing business.
Coal India
Net sales 300,463 324,295 407,768 35.7 25.7
EBITDA 64,183 76,488 16,573 (74.2) (78.3)
EBIT 50,060 63,869 3,717 (92.6) (94.2) Marginal growth in dispatches at 187 mn (3.4% yoy) tons in 4QFY23.
PBT 93,353 105,937 34,956 (62.6) (67.0)
Tax 26,203 28,746 9,185 (64.9) (68.0)
Reported PAT 67,150 77,191 25,772 (61.6) (66.6)
Extraordinaries — — — — — Blended realizations at Rs2,186/ton in 4QFY23 reflect continued strength in e-auction realizations.
Adjusted PAT 67,150 77,191 25,772 (61.6) (66.6) Reported earnings impacted by additional wage provision of Rs60 bn estimated by us on account of
EPS (Rs/share) 10.8 12.4 4.2 (61.6) (66.6) settlement of wage revisions in January 2023.
HPCL
Net sales 975,727 1,096,032 1,018,944 4.4 (7.0)
EBITDA 20,986 16,716 42,365 101.9 153.4
We expect HPCL to report a sharp qoq improvement in earnings, driven by further recovery in auto-fuel
EBIT 10,154 5,612 31,093 206.2 454.1
PBT 22,850 1,684 29,093 27.3 1,627.2
Tax 4,897 (40) 7,323 49.5 NM
Reported PAT 17,953 1,724 21,771 21.3 1,162.6
Extraordinaries — — — — — We assume (1) reported refining margins of US$10/bbl (versus US$9.1/bbl in 3Q), (2) crude throughput
up 1% qoq at 4.9 mmt, (3) fuel over-recoveries of nearly Rs18 bn (versus ~Rs24 bn under-recovery in
Adjusted PAT 17,953 1,724 21,771 21.3 1,162.6
3Q), and (4) inventory loss of nearly Rs7 bn with loss of US$1/bbl in refining and US$0.6/bbl in the
EPS (Rs/share) 12.7 1.2 14.3 12.9 1,075.1 marketing business.
IOCL
Net sales 1,772,873 2,047,402 2,014,810 13.6 (1.6)
EBITDA 116,275 35,934 122,481 5.3 240.9
We expect IOC to report a sharp qoq improvement in earnings, driven by further recovery in auto-fuel
EBIT 87,402 4,944 90,481 3.5 1,730.3
PBT 80,846 2,567 90,481 11.9 3,425.5
Tax 20,628 (1,914) 22,774 10.4 NM
Reported PAT 60,218 4,480 67,707 12.4 1,411.3
Extraordinaries — — — — — We assume (1) reported refining margins of US$11.5/bbl (versus US$12.9/bbl in 3Q), (2) qoq 6% higher
throughput of 19.2 mmt, (3) fuel over-recoveries of nearly Rs31 bn (versus ~Rs57 bn under-recovery in
Adjusted PAT 60,218 4,480 67,707 12.4 1,411.3
3Q), and (4) inventory loss of nearly Rs26 bn with loss of US$1.5/bbl in refining and US$0.6/bbl in the
EPS (Rs/share) 4.4 0.3 4.9 12.4 1,411.3 marketing business.
ONGC
Net sales 344,972 385,833 357,725 3.7 (7.3)
EBITDA 185,902 204,112 199,351 7.2 (2.3)
We expect 2% qoq decline in EBITDA, driven by ~4% qoq lower oil sales. A 8% qoq decline in crude oil
EBIT 109,504 139,502 133,529 21.9 (4.3)
prices would likely be offset by a reduction in windfall taxes.
PBT 117,143 146,720 146,496 25.1 (0.2)
Tax 28,548 36,273 36,917 29.3 1.8
Reported PAT 88,596 110,447 109,579 23.7 (0.8)
Extraordinaries — — — — — We model (1) overall crude oil sales volumes of 4.5 mmt (down ~4% qoq and 12% yoy), (2) natural gas
sales volumes to decline ~1% qoq but up 1% yoy to 4.16 bcm, (3) gross crude price realization of
Adjusted PAT 88,596 110,447 109,579 23.7 (0.8)
US$80/bbl (-8% qoq) and net oil price realization (post royalty, windfall tax, and cess) of US$53/bbl (+1%
EPS (Rs/share) 7.0 8.8 8.7 23.7 (0.8) qoq).
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Oil India
Net sales 44,786 58,794 54,417 21.5 (7.4)
EBITDA 19,585 28,553 28,097 43.5 (1.6)
We expect modest 2% qoq decline in EBITDA as ~8% qoq lower oil price is largely offset by the reduction
EBIT 17,471 24,017 23,097 32.2 (3.8)
in windfall taxes.
PBT 20,421 23,029 22,347 9.4 (3.0)
Tax 4,121 5,568 5,625 36.5 1.0
Reported PAT 16,300 17,461 16,722 2.6 (4.2)
We model (1) overall crude oil sales volumes to decline 1.5% qoq but up ~4% yoy at 761 kt and (2)
Adjusted PAT 16,300 17,461 16,722 2.6 (4.2)
natural gas sales volumes to be down ~4% qoq but up ~10% yoy at 615 mmscm.
EPS (Rs/share) 15.0 16.1 15.4 2.6 (4.2)
Reliance Industries
Net sales 2,073,750 2,171,640 2,268,725 9.4 4.5
EBITDA 313,660 352,470 365,276 16.5 3.6
We expect RIL’s standalone EBITDA to improve 7% qoq, reflecting (1) resilient GRM and improvement in
EBIT 233,650 250,600 262,675 12.4 4.8
petchem margins and (2) higher E&P profitability on slightly higher gas production.
PBT 222,660 230,060 242,903 9.1 5.6
Tax 43,900 52,660 56,430 28.5 7.2
Reported PAT 162,030 157,920 164,556 1.6 4.2
Extraordinaries — — — — — We expect EBITDA for (1) Jio to increase 2% qoq, largely driven by 5.7 mn overall net adds, blended
Adjusted PAT 162,030 157,920 164,556 1.6 4.2 ARPU likely flat qoq at Rs178 and (2) retail revenue/EBITDA to increase by ~2% qoq, driven by increased
EPS (Rs/share) 25.5 24.9 26 1.6 4.2 store footprint, and benefits of operating leverage.
Pharmaceuticals
Aurobindo Pharma
Net sales 58,094 64,071 62,745 8.0 (2.1)
EBITDA 9,744 9,544 10,014 2.8 4.9
We expect ARBP's US sales to grow 2% yoy to US$372 mn (+2% qoq) led by increasingly stable pricing,
EBIT 7,208 6,330 6,717 (6.8) 6.1
healthy demand and further uptick in specialty sales. For the ARV segment, we bake in a sequential
PBT 7,408 6,686 7,077 (4.5) 5.9 decline of 21%. We expect EU and ROW markets to report 5% yoy growth each in 4QFY23.
Tax 175 1,891 1,741 895.3 (7.9)
Reported PAT 5,765 4,913 5,663 (1.8) 15.3
Extraordinaries 197 121 380 92.7 213.3
We expect ARBP's gross margins to increase marginally by 20 bps qoq to 54.8% due to stable pricing
Adjusted PAT 7,344 4,913 5,663 (22.9) 15.3
and an improved product mix. Despite elevated R&D spends at 6.4% of sales, we expect ARBP's 4QFY23
EPS (Rs/share) 12.5 8.4 9.7 (22.9) 15.3 EBITDA margins to expand 110 bps qoq to 16.0% on account of lower freight costs.
Biocon
Net sales 24,088 29,411 36,475 51.4 24.0
EBITDA 5,919 6,443 8,191 38.4 27.1 We note yoy and qoq estimates are not comparable due to the Viatris' acquisition, effective November
29, 2022. We forecast ~US$252 mn biosimilars sales for BIOS in 4QFY23, in line with management's
EBIT 3,793 3,428 3,997 5.4 16.6
guidance of exiting FY2023 at a US$1 bn annualized biosimilars sales mark. Overall, we build in 51% yoy
PBT 3,831 2,455 1,742 (54.5) (29.0) top-line growth to Rs36.5 bn. We factor in 19% yoy growth for Syngene (seasonally strongest quarter)
Tax 586 (48) 396 (32.5) NM and 6% yoy growth for generics, respectively.
Reported PAT 2,386 (418) 1,000 (58.1) NM
Extraordinaries (410) (2,714) — — —
We build in 130 bps qoq compression in gross margins to 65.4% for BIOS in 4QFY23. Overall, we build in
Adjusted PAT 2,796 2,296 1,000 (64.2) (56.5)
60 bps qoq expansion in EBITDA margins at 22.5%. Absolute EBITDA increases by 38% yoy and 27% qoq
EPS (Rs/share) 2.3 1.9 0.8 (64.2) (56.5) to Rs8.2 bn on account of the Viatris acquisition.
Cipla
Net sales 52,603 58,101 55,276 5.1 (4.9)
EBITDA 7,497 14,076 10,795 44.0 (23.3) In a seasonally weak quarter, we expect Cipla to report 5% yoy growth (down 5% qoq) in domestic sales
EBIT 4,594 11,354 8,115 76.6 (28.5) in 4QFY23. We build in US sales of US$198 mn, up 1.5% qoq, led by marginally higher gRevlimid sales at
PBT 5,053 12,181 8,395 66.1 (31.1) US$26 mn and ramp-up of Leuprolide Acetate. We build in 16% yoy decline in South Africa (recovery
Tax 711 4,100 2,769 289.4 (32.5) expected from 1QFY24) and 19% yoy decline in ROW in 4QFY23.
Reported PAT 4,196 8,008 5,502 31.1 (31.3)
Extraordinaries — — — — — To recall, Cipla's operating performance in 4QFY22 was impacted by Covid charges as well as the
restructuring of its South Africa business. Adjusted for these factors, Cipla's 4QFY22 EBITDA stood at
Adjusted PAT 4,196 8,008 5,502 31.1 (31.3)
Rs9.5 bn. On a reported basis, we expect Cipla's gross margins to decline 210 bps sequentially to 63.4%.
EPS (Rs/share) 5.2 9.9 6.8 31.1 (31.3) After factoring in a slightly higher R&D (6.1% of sales), we expect 470 bps qoq compression in EBITDA
EBITDA margin (%) 14.3 24.2 19.5 527 bps -470 bps margins to 19.5%. We expect adjusted EBITDA to grow 14% yoy to Rs10.8 bn.
Divis Laboratories
Net sales 25,184 17,077 18,163 (27.9) 6.4
EBITDA 11,044 4,083 5,102 (53.8) 25.0 We build in 28% yoy overall sales decline for Divi's in 4QFY23 due to a high Molnupiravir-led base.
Compared to ~US$95 mn sales in 4QFY22, we estimate nil Molnupiravir sales by Divi's in 4QFY23. On an
EBIT 10,234 3,215 4,252 (58.5) 32.3
ex-Molnupiravir basis, we build in overall flat yoy sales. We note CSM sales in 4QFY23 would be partially
PBT 10,757 4,356 5,091 (52.7) 16.9 benefited by initial sales from the fast-track projects. We expect generic API and nutraceutrical sales to
Tax 1,811 1,288 1,273 (29.7) (1.2) grow 26% yoy and 5% yoy, respectively, in 4QFY23.
Reported PAT 8,946 3,068 3,818 (57.3) 24.4
Extraordinaries — — — — — Post reporting all-time low margins in 3QFY23, we factor in a sequential improvement of 420 bps in
Adjusted PAT 8,946 3,068 3,818 (57.3) 24.4 Divi's EBITDA margin to 28.1% in 4QFY23. On the gross margin front, we bake in a 340 bps qoq
EPS (Rs/share) 33.7 11.6 14.4 (57.3) 24.4 improvement (albeit down 660 bps yoy) to 60.1% due to lower incremental impact of high cost
EBITDA margin (%) 43.9 23.9 28.1 -1577 bps 418 bps inventory.
Dr Reddy's Laboratories
Net sales 54,367 67,700 63,105 16.1 (6.8)
EBITDA 11,701 20,582 16,715 42.9 (18.8) We expect North America base business (ex-Revlimid) sales to stay flat at US$245 mn. In our estimates,
EBIT 8,742 17,291 13,415 53.5 (22.4) we factor in ~US$85 mn of gRevlimid sales in US in 4QFY23 for DRRD, lower than ~US$115 mn and
PBT 9,892 16,420 13,655 38.0 (16.8) ~US$130 mn in 2QFY23 and 3QFY23, respectively. We expect DRRD's domestic sales to grow 11% yoy
Tax 1,608 3,875 3,532 119.7 (8.8) in 4QFY23. We expect 2% yoy growth and 20% yoy decline in Europe and Russia, respectively, in 4QFY23.
Reported PAT 874 12,471 10,053 1,050.2 (19.4)
Extraordinaries (7,515) (134) (150) (98.0) 11.9
Owing to lower gRevlimid sales, we expect a sequential decline of 300 bps and 390 bps in DRRD's
Adjusted PAT 8,389 12,605 10,203 21.6 (19.1)
4QFY23 gross and EBITDA margins to 56.2% and 26.5%, respectively. On a yoy basis, though, we expect
EPS (Rs/share) 50.5 75.9 61.5 21.6 (19.1) DRRD's EBITDA margin to improve 500 bps in 4QFY23.
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Gland Pharma
Net sales 11,030 9,383 10,132 (8.1) 8.0
We expect another muted quarter for Gland, although marginally better sequentially on an improved
EBITDA 3,484 2,896 3,122 (10.4) 7.8 supply scenario. We build in a 8% yoy decline in Gland's overall sales in 4QFY23. We expect increased
EBIT 3,173 2,520 2,732 (13.9) 8.4 competitive intensity in the US amid the absence of meaningful launches to weigh on Gland's 4QFY23
PBT 3,805 3,109 3,387 (11.0) 9.0 performance. Accordingly, we bake in a 4% yoy decline in US sales to US$76 mn. We build in a 10% yoy
Tax 946 789 915 (3.3) 15.9 growth in ROW in 4QFY23 aided by GCC, Asia, CIS and South Africa. On a high base amid the NLEM
impact, we estimate a 54% yoy decline in India sales in 4QFY23.
Reported PAT 2,859 2,319 2,473 (13.5) 6.6
Adjusted PAT 2,859 2,319 2,473 (13.5) 6.6 Owing to a higher regulated market mix, we factor in 400 bps yoy expansion in gross margins to 54.6%
EPS (Rs/share) 17.4 14.2 15.1 (13.3) 6.6 in 4QFY23. Our EBITDA margin estimate of 30.8% for Gland in 4QFY23 is down 80 bps yoy.
Laurus Labs
Net sales 14,248 15,448 15,265 7.1 (1.2) On a low base, led by volume uptick, we expect ARV API sales to grow 34% yoy in 4QFY23. We build in
EBITDA 3,967 4,036 3,728 (6.0) (7.6) increased volumes for the ARV formulation business as Laurus bids for winner-takes-all tenders amid
lower pricing. Overall, we expect a 16% yoy decline in formulation sales (albeit up 65% qoq) in 4QFY23,
EBIT 3,310 3,191 2,836 (14.3) (11.1)
largely due to lower ARV pricing. Compared to ~US$40-45 mn Paxlovid intermediate sales in 3QFY23,
PBT 3,017 2,779 2,695 (10.7) (3.0) we build in just ~US$5 mn Paxlovid sales in this quarter. Owing to a sharp drop in Paxlovid sales, we
Tax 698 748 625 (10.5) (16.4) bake in a 49% qoq sales decline in the Synthesis segment to Rs3.3 bn in 4QFY23.
Reported PAT 2,305 2,030 2,043 (11.4) 0.6
We expect the company to report 340 bps yoy and 170 bps qoq compression in EBITDA margin to 24.4%
Adjusted PAT 2,305 2,030 2,043 (11.4) 0.6
in 4QFY23.
EPS (Rs/share) 4.3 3.8 3.8 (11.4) 0.6
Lupin
Net sales 38,830 43,222 42,817 10.3 (0.9)
EBITDA 2,678 5,327 5,370 100.5 0.8 We expect Lupin to report US$175 mn US sales in 4QFY23, tad lower than US$177 mn in 3QFY23 due to
EBIT (594) 3,123 3,135 NM 0.4 lower seasonality benefit as well as lower gSuprep sales being offset by greater stability in pricing. We
PBT (852) 2,461 2,635 NM 7.1 expect domestic sales to grow 9% yoy for Lupin. We expect Lupin's overall sales in 4QFY23 to grow 10%
Tax 4,267 885 264 (93.8) (70.2) yoy (flat qoq).
Reported PAT (5,180) 1,535 2,332 NM 51.9
Extraordinaries — — — — — On the gross margin front, we expect 120 bps qoq compression to 59.3% (up 130 bps yoy). We expect
Adjusted PAT (5,180) 1,535 2,332 NM 51.9 EBITDA margins to expand 20 bps qoq to 12.5% in 4QFY23 despite higher staff costs on account of the
EPS (Rs/share) (11.5) 3.4 5.2 NM 51.9 MR additions in the domestic business. We expect Lupin's 4QFY23 EBITDA to grow 100% yoy (flat qoq)
EBITDA margin (%) 6.9 12.3 12.5 564 bps 21 bps to Rs5.4 bn.
Sun Pharmaceuticals
Net sales 94,468 112,410 106,300 12.5 (5.4)
EBITDA 21,794 30,069 26,799 23.0 (10.9) We expect SUNP to deliver a steady 4QFY23 with 12.5% yoy topline growth, albeit 5% qoq decline due to
lower US sales from Halol, impact of seasonality as well some impact of the IT security incident. We are
EBIT 16,229 23,469 20,099 23.8 (14.4)
building in US$405 mn US sales (down 4% qoq) in 4QFY23, due to lower Halol sales as well as lower
PBT 16,991 24,715 21,129 24.4 (14.5) specialty sales. Ilumya, Winlevi and Odomzo have continued to scale up well in 4QFY23. We build in 8%
Tax 1,468 2,834 2,530 72.4 (10.8) and 14% yoy growth respectively in India and ROW/EMs in 4QFY23.
Reported PAT (24,333) 21,660 18,300 NM (15.5)
We expect SUNP's EBITDA to grow 23% yoy to Rs26.8 bn, with margin of 25.2% in 4QFY23. We bake in
Adjusted PAT 16,584 21,660 18,300 10.3 (15.5)
150 bps EBITDA margin compression on a qoq basis (up 210 bps yoy) for Sun in 4QFY23, driven by
EPS (Rs/share) 6.9 9.0 7.6 10.3 (15.5) lower sales and higher R&D.
Torrent Pharmaceuticals
Net sales 21,040 24,910 24,283 15.4 (2.5)
EBITDA 5,340 7,240 7,327 37.2 1.2 We build in strong 18% yoy domestic growth for Torrent in 4QFY23, aided by contribution from the
EBIT 3,720 5,310 5,377 44.6 1.3 Curatio portfolio. In the US, we bake in tad lower sales sequentially at US$34 mn. We expect 8% yoy
PBT 3,710 4,190 4,827 30.1 15.2 growth in Brazil in 4QFY23 on a high base of 33% yoy growth in 4QFY22. In Germany, we build in 12%
Tax 310 1,360 1,569 406.1 15.4 yoy growth in 4QFY23 on a low base of 18% yoy decline in 4QFY22.
Reported PAT (1,450) 2,830 3,259 NM 15.1
Extraordinaries — — — — — There was a one-off hit of ~60 bps on 3QFY23 gross margins due to the under-absorption of
Adjusted PAT 3,400 2,830 3,259 (4.2) 15.1 manufacturing costs, which will reverse in 4QFY23. Accordingly, we bake in 80 bps gross margin
EPS (Rs/share) 10.0 8.4 9.6 (4.2) 15.1 expansion in 4QFY23 to 71.5%. We factor in 480 bps yoy EBITDA margin expansion to 30.2% for TRP in
EBITDA margin (%) 25.4 29.1 30.2 479 bps 111 bps 4QFY23. On a sequential basis, we build in an expansion of 110 bps.
Real Estate
Brigade Enterprises
Net sales 9,423 8,203 9,314 (1.2) 13.5
EBITDA 2,052 2,079 2,730 33.1 31.3
We estimate revenue recognition of Rs6.1 bn at a 30% gross profit margin for the real estate business.
EBIT 1,144 1,298 1,906 66.6 46.8
Pre-sales will likely remain strong due to new launches.
PBT 274 497 967 253.2 94.7
Tax 192 70 309 61.3 341.4
Reported PAT 524 569 789 50.5 38.7
Rentals are expected to increase to Rs2 bn (+12% yoy) owing to commissioning of new assets.
Adjusted PAT 325 569 789 143.1 38.7
Improving ARRs in the hospitality portfolio is likely to result in no losses at PBT in 4QFY23.
EPS (Rs/share) 1.4 2.5 3.4 142.2 38.7
Brookfield India Real Estate Trust
Net sales 2,509 2,999 3,080 22.7 2.7
EBITDA 1,747 2,012 2,081 19.1 3.4
We factor a rental of Rs2.1 bn in 4QFY23 owing to the inclusion of the acquired asset at N2, partially in
EBIT 1,082 1,293 1,359 25.6 5.1
the base quarter.
PBT 386 250 326 (15.5) 30.4
Tax (59) 3 54 NM 1,558.7
Reported PAT 445 247 273 (38.7) 10.4
Adjusted PAT 445 247 273 (38.7) 10.4 We factor NOI margin of 75% for 4QFY23 compared with 77% for FY2022.
EPS (Rs/share) 1.5 0.8 0.9 (38.7) 10.4
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DLF
Net sales 15,473 14,948 12,698 (17.9) (15.0)
EBITDA 3,675 4,772 3,010 (18.1) (36.9)
Strong pre-sales numbers, with a contribution of Rs8 bn from Arbour and the launch of the last tower in
EBIT 3,306 4,386 2,628 (20.5) (40.1)
Mid-Town. We estimate revenue recognition of Rs12.6 bn owing to moderated delivery during 4QFY23.
PBT 3,073 4,080 2,142 (30.3) (47.5)
Tax 203 113 534 163.3 372.6
Reported PAT 4,690 6,158 4,771 1.7 (22.5)
DCCDL likely to report 16% yoy growth in rentals at Rs10.2 bn due to recently added assets and
Adjusted PAT 4,055 5,192 4,771 17.6 (8.1)
improvement in mall earnings.
EPS (Rs/share) 1.6 2.1 1.9 17.6 (8.1)
Embassy Office Parks REIT
Net sales 7,488 8,654 8,815 17.7 1.9
EBITDA 5,741 6,552 6,546 14.0 (0.1)
EBIT 3,717 3,726 3,668 (1.3) (1.6) We expect revenue from the commercial business at Rs7.6 bn (+12% yoy) with an NOI margin of 86%.
PBT 2,129 1,686 1,479 (30.5) (12.3)
Tax (404) 264 177 NM (32.8)
Reported PAT 2,792 1,632 1,581 (43.4) (3.1)
Adjusted PAT 2,792 1,632 1,581 (43.4) (3.1) Contribution from the hotel business is likely to improve owing to stabilization of Hilton at Manyata.
EPS (Rs/share) 2.9 1.7 1.7 (43.4) (3.1)
Godrej Properties
Net sales 13,306 1,962 6,921 (48.0) 252.7
EBITDA 2,580 (168) 2,104 (18.5) NM
EBIT 2,523 (233) 2,040 (19.2) NM Revenue recognition is expected to improve to Rs6.9 bn due to strong project delivery.
PBT 4,013 1,394 4,389 9.4 214.8
Tax 984 644 1,540 56.5 139.3
Reported PAT 2,560 370 3,717 45.2 905.5
Cash flows are expected to remain weak/negative, with aggressive construction activity and outflows
Adjusted PAT 2,587 564 3,717 43.7 559.1
pertaining to new business development.
EPS (Rs/share) 9.3 2.0 13.4 43.7 559.1
EBITDA margin (%) 19.4 (8.6) 30.4 1101 bps 3895 bps
Macrotech Developers
Net sales 34,446 17,738 26,654 (22.6) 50.3
EBITDA 8,713 4,038 5,922 (32.0) 46.7
EBIT 8,523 3,821 5,690 (33.2) 48.9 We estimate revenues of Rs26 bn, as we see a, improvement in deliveries in 4QFY23.
PBT 8,023 3,931 5,738 (28.5) 46.0
Tax 2,643 (119) 988 (62.6) NM
Reported PAT 5,355 4,050 4,715 (12.0) 16.4
Adjusted PAT 5,355 4,050 4,715 (12.0) 16.4 We estimate EBITDA margin of 22% in 4QFY23, with adjusted margin of 28%.
EPS (Rs/share) 13.5 10.2 11.9 (12.0) 16.4
Mindspace REIT
Net sales 4,703 5,603 5,813 23.6 3.7
EBITDA 3,543 4,076 4,238 19.6 4.0
EBIT 2,687 3,151 3,295 22.6 4.6 We factor revenues of Rs5.8 bn (+23% yoy) in 4QFY23 on 24 mn sq. ft of leasable area.
PBT 2,045 2,292 2,470 20.8 7.8
Tax 1,198 1,027 1,056 (11.8) 2.8
Reported PAT 1,262 1,159 1,263 0.1 9.0
Extraordinaries 489— — — — —
Adjusted PAT 1,262 1,159 1,263 0.1 9.0 We factor NOI margin of 81% for 4QFY23.
EPS (Rs/share) 2.1 2.0 2.1 0.1 9.0
Phoenix Mills
Net sales 4,954 6,838 7,219 45.7 5.6
EBITDA 2,411 3,845 4,071 68.9 5.9
We factor revenues of Rs7.2 bn in 4QFY23—a substantial improvement over 4QFY22, aided by
EBIT 1,970 3,275 3,405 72.8 4.0
normalization of consumer spends and the commissioning of two new malls.
PBT 1,431 2,757 2,694 88.2 (2.3)
Tax 257 633 801 211.2 26.6
Reported PAT 1,048 1,764 1,641 56.6 (7.0)
Adjusted PAT 1,048 1,764 1,641 56.6 (7.0) We factor EBITDA margin of 56% for 4QFY23, similar to levels seen in 3QFY23.
EPS (Rs/share) 6.1 10.3 9.5 56.6 (7.0)
Oberoi Realty
Net sales 8,235 16,295 12,012 45.9 (26.3)
EBITDA 3,518 9,404 4,248 20.8 (54.8)
Revenue recognition of Rs10.4 bn for the real estate business owing to higher sales traction across key
EBIT 3,421 9,302 4,129 20.7 (55.6)
micro-markets in MMR. Sales traction at 360 West will be a key monitorable.
PBT 3,300 9,141 3,852 16.7 (57.9)
Tax 1,706 1,942 2,998 75.8 54.4
Reported PAT 1,594 7,200 855 (46.4) (88.1)
Investment properties (hotel+commercial) will yield revenues of Rs1.4 bn, with improved prospects for
Adjusted PAT 2,324 7,026 2,917 25.5 (58.5)
Westin Goregaon and higher contribution from Oberoi Mall.
EPS (Rs/share) 6.4 19.3 8.0 25.5 (58.5)
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Prestige Estates Projects
Net sales 24,003 23,170 25,889 7.9 11.7
EBITDA 4,995 5,742 7,208 44.3 25.5
EBIT 3,690 4,044 5,501 49.1 36.0 We factor growth of 8% yoy in revenues, aided by strong delivery in the development business.
PBT 2,844 2,340 3,962 39.3 69.3
Tax 874 678 1,127 29.0 66.3
Reported PAT 1,967 1,304 2,522 28.2 93.4
Revenue from the residential segment is estimated to moderate to Rs17 bn owing to an unfavorable
Adjusted PAT 1,967 1,304 2,522 28.2 93.4
base of 4QFY22.
EPS (Rs/share) 0.5 0.3 0.6 28.2 93.4
Sobha
Net sales 7,313 8,682 10,724 46.6 23.5
EBITDA 2,043 888 2,067 1.2 132.8
We estimate EBITDA margin of 19% for 4QFY23, as we factor a ramp-up in revenue recognition due to
EBIT 1,854 713 1,858 0.2 160.6
higher project delivery.
PBT 364 351 1,540 323.0 338.7
Tax 114 33 564 394.6 1,608.7
Reported PAT 250 318 976 290.4 206.9
We expect sales momentum to remain strong on account of new launches.
Adjusted PAT 250 318 976 290.4 206.9
Sunteck Realty
Net sales 1,560 893 2,645 69.6 196.1
EBITDA 34 180 1,217 NM 574.6
EBIT 9 158 1,190 NM 652.0 Completion of the project at Naigaon is likely to yield strong revenue recognition during 4QFY23.
PBT (132) 44 1,128 NM 2,489.4
Tax (51) 13 326 NM 2,503.4
Reported PAT (26) 50 823 NM 1,554.4
Adjusted PAT (43) 49 823 NM 1,594.7 Sales likely to benefit from new phases in Vasai and the launch of projects in Mira Road.
EPS (Rs/share) (0.3) 0.3 5.9 NM 1,594.7
Retailing
Avenue Supermarts
Net sales 87,865 115,691 111,324 26.7 (3.8)
EBITDA 7,393 9,653 8,572 16.0 (11.2) We model consolidated revenue growth of 27% yoy in 4Q with the addition of 10 stores. Revenue
EBIT 5,929 7,972 6,811 14.9 (14.6) throughput of Rs34.6k is 8% higher yoy, yet below the pre-Covid 4Q peak of Rs36k. A sequential decline
PBT 6,089 8,118 6,952 14.2 (14.4) is also expected due to seasonality (3Q witnesses incremental festive season demand).
Tax 1,821 2,221 1,780 (2.3) (19.9)
Reported PAT 4,267 5,896 5,172 21.2 (12.3)
We expect consolidated EBITDA margin of 7.7%, down 60 bps qoq on account of higher employees,
Adjusted PAT 4,267 5,896 5,172 21.2 (12.3)
utilities expenses, etc. expected due to the higher number of store openings in 4QFY23.
EPS (Rs/share) 6.6 9.1 8.0 21.2 (12.3)
Titan Company
Net sales 72,760 108,750 79,758 9.6 (26.7) We model (1) 15% yoy growth in standalone jewelry sales (+15.4% 4-year CAGR versus
EBITDA 7,820 13,300 9,601 22.8 (27.8) +19.4%/19.1/20.8% in 3QFY23/2QFY23/1QFY23) on LFL basis (excluding sale of gold bullion). We
gather that the quarter started on a strong note (favorable base) but demand moderated a bit in the
EBIT 6,940 12,370 8,676 25.0 (29.9)
month of March (high base + perhaps, some impact of sharp 8-10% increase in gold price), (2) we
PBT 7,160 12,670 8,675 21.2 (31.5) expect 16% yoy growth in watches (versus +14.5% in 3Q) and 22.5% yoy growth in the eyewear (aided by
Tax 1,740 3,160 2,497 43.5 (21.0) store growth) segment.
Reported PAT 4,910 9,510 6,178 25.8 (35.0)
Extraordinaries (510—) — — — — We expect EBITDA margin to improve 130 bps yoy to 12%, as the base quarter margin was partly
impacted by an ex-gratia payout to employees. On the segmental front, we expect (1) EBIT margin of
Adjusted PAT 5,420 9,510 6,178 14.0 (35.0)
12% for the Jewelry business (versus 13% adj. EBIT margin in 3Q), (2) 11.2% EBIT margin for watches,
EPS (Rs/share) 6.1 10.7 7.0 14.0 (35.0) and (3) 17.7% EBIT margin for eyewear.
Trent
Net sales 11,853 21,715 20,203 70.5 (7.0)
EBITDA 1,523 3,356 2,222 45.9 (33.8)
We bake in revenue growth of 70% yoy but 7% qoq decline coming off festive-season partially offset by
EBIT 715 2,250 1,083 51.6 (51.9)
new store additions in Zudio.
PBT 949 2,095 881 (7.2) (58.0)
Tax 199 486 225 13.6 (53.6)
Reported PAT 749 1,610 655 (12.5) (59.3)
Sequential GM decline and negative operating leverage will lead to decline in EBITDA margin to 11%
Adjusted PAT 749 1,610 655 (12.5) (59.3)
(down 450 bps qoq).
EPS (Rs/share) 2.1 4.5 1.8 (12.5) (59.3)
Speciality Chemicals
Aarti Industries
Net sales 20,178 16,350 16,514 (18.2) 1.0
EBITDA 3,391 2,863 2,884 (14.9) 0.8 We expect Aarti to report a steady quarter qoq in terms of EBITDA, consistent with management
guidance. Please note that yoy comparison is not meaningful because of the demerger of the Pharma
EBIT 2,619 2,043 2,054 (21.6) 0.6
segment, which took place with effect from 1QFY23. We do not expect significant incremental revenues
PBT 2,314 1,593 1,757 (24.1) 10.3 on a qoq (sequential) basis from growth projects; those are likely to kick in from FY2024.
Tax 377 240 317 (16.0) 31.9
Reported PAT 1,938 1,353 1,440 (25.7) 6.4 Management has guided for Rs11 bn of EBITDA for the full year (FY2023), and a steady qoq
Extraordinaries — — — — — performance in 4QFY23 should help the company slightly exceed that target. We do expect the slight
Adjusted PAT 1,938 1,353 1,440 (25.7) 6.4 appreciation of the INR versus the USD in 4QFY23 to help reduce Aarti's finance cost, which in recent
EPS (Rs/share) 5.3 3.8 4.0 (25.7) 5.5 quarters has risen due to mark-to-market losses on the company's unhedged ECBs. The qoq decline in
finance cost may drive modest sequential growth in PBT and PAT.
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Atul
Net sales 13,704 12,683 12,020 (12.3) (5.2) We expect Atul to report another quarter of weak earnings. We expect EPS to fall 7% yoy, though it does
EBITDA 2,052 1,723 1,975 (3.8) 14.7 rise 20% qoq on a very weak base, particularly for the Performance & Other Chemicals segment, which
EBIT 1,612 1,219 1,470 (8.8) 20.6 reported only 2.6% EBIT margins in 3QFY23. We expect revenues to decline 12% yoy amid falling prices
PBT 1,800 1,425 1,646 (8.5) 15.5 and weak demand, while the yoy decline in EBITDA may be relatively more modest (we estimate -4%)
against a favorable base and supported by declining costs.
Tax 452 394 413 (8.7) 4.8
Reported PAT 1,363 1,051 1,263 (7.3) 20.2 The yoy revenue decline should be driven primarily by the Performance & Other Chemicals segment. On
Extraordinaries — — — — — the margin front, the Life Science Chemicals segment's margins should moderate qoq, as prices of 2,4-D
Adjusted PAT 1,363 1,051 1,263 (7.3) 20.2 (Atul's most important product in this segment) are declining. In contrast, we expect the Performance &
EPS (Rs/share) 46.1 35.6 42.8 (7.1) 20.2 Other Chemicals segment to report improved margins qoq versus the very depressed base of 3QFY23,
though there is limited visibility here.
Clean Science & Technology
Net sales 2,046 2,374 2,450 19.7 3.2
EBITDA 837 1,082 1,122 34.0 3.6 CST's revenue growth on a yoy basis is driven by higher realizations as well as increased volumes on the
back of an expansion in capacities of the existing products and launches of new products (PBQ, TBHQ).
EBIT 767 993 1,034 34.7 4.1
On a sequential basis, we expect revenues to be only modestly higher, with flat exports qoq, offset by
PBT 842 1,119 1,104 31.1 (1.4) higher domestic sales of import-substitute products.
Tax 215 280 285 32.1 1.6
Reported PAT 627 839 819 30.8 (2.4) We expect margin to remain stable qoq versus the elevated base of 3QFY23, when margins surged on
Extraordinaries — — — — — the back of declining input costs. We expect the company to be largely able to retain these margin
Adjusted PAT 627 839 819 30.8 (2.4) benefits in 4QFY23. We build in lower other income on a qoq basis against the high base of 3QFY23,
EPS (Rs/share) 5.9 7.9 7.7 30.8 (2.4) leading to a modest qoq dip in PAT. However, on a yoy basis, Clean Science should report 30%+ growth
in PAT.
Navin Fluorine
Net sales 4,089 5,636 6,050 47.9 7.3
EBITDA 943 1,556 1,755 86.2 12.8 We expect NFIL to report a sharp yoy increase in revenues for the second successive quarter, driven
largely by the scale-up of recently-commissioned growth projects (HFO for Honeywell, agrochemical
EBIT 824 1,306 1,500 82.1 14.8
intermediate for Bayer and multi-purpose plant). We expect the Specialty Chemicals and CDMO
PBT 888 1,313 1,505 69.4 14.6 business units to maintain their quarterly revenue run-rates relative to 3QFY23 levels.
Tax (190) (247) (301) 58.5 21.7
Reported PAT 752 1,066 1,204 60.2 13.0 Aided by the further increase in revenues, EBITDA margin could potentially expand further on the back of
Extraordinaries 53 — — — — the already sharp uptick witnessed in 3QFY23. The revenue increase should help absorb continued scale-
Adjusted PAT 709 1,066 1,204 69.7 13.0 driven increases in operating expenses. We would also expect the tax rate to remain low, given that the
EPS (Rs/share) 14.3 21.5 24.3 69.7 13.0 tax-advantaged new product unit (NFASL, which houses most of the new projects) is likely to contribute
a larger proportion of earnings in 4QFY23.
PI Industries
Net sales 13,952 16,132 15,310 9.7 (5.1) We expect PI's revenue growth to slow in 4QFY23 as export growth decelerates (we estimate 10% yoy
EBITDA 3,050 4,151 3,669 20.3 (11.6) growth in CSM exports) versus what is now a relatively more difficult base; pyroxasulfone shipments
EBIT 2,514 3,584 3,094 23.1 (13.7) also appear to have slowed qoq. For the domestic business, which is anyway less than 20% of the
PBT 2,687 3,997 3,394 26.3 (15.1) company's revenues, 4QFY23 is a seasonally slow period, and we estimate 7.5% yoy growth amid a
channel inventory overhang and falling prices.
Tax 649 484 509 (21.5) 5.2
Reported PAT 2,044 3,518 2,890 41.4 (17.8) We expect EBITDA margin to moderate to 24% in 4QFY23 (down from the very strong levels of 25.7%
Extraordinaries — — — — — reported in 3QFY23) due to the qoq decline in revenues, which should lead to less efficient absorption of
Adjusted PAT 2,044 3,518 2,890 41.4 (17.8) overhead expenses. Other income is likely to remain sharply higher yoy due to the buildup in cash
EPS (Rs/share) 13.5 23.2 19.1 41.4 (17.8) balances, while the effective tax rate may remain low, helping PAT register strong growth yoy. However,
the PAT base will turn sharply more difficult starting in 1QFY24.
Pidilite Industries
Net sales 25,071 29,976 27,171 8.4 (9.4)
EBITDA 4,011 4,959 5,031 25.4 1.5 We model 15.5% yoy reported standalone revenue growth; LFL growth, adjusted for CIPY/PAPL merger,
is expected at 8% yoy. On a reported basis, we expect 15.5% yoy growth in domestic C&B sales and
EBIT 3,389 4,272 4,343 28.2 1.7
10.3% yoy growth in B2B sales which on LFL basis (excluding PAPL/CIPY), translate to 7.6% and 4.8%,
PBT 3,407 4,173 4,498 32.1 7.8 respectively. We expect aggregate revenues of subsidiaries (ex-PAPL/CIPY) to grow 11% yoy.
Tax 915 1,111 1,148 25.4 3.3
Reported PAT 2,544 3,042 3,537 39.1 16.3
Extraordinaries — — — — — We expect gross margin to expand 455 bps qoq (+290 bps yoy), led by a steep correction in VAM (45%
Adjusted PAT 2,544 3,042 3,537 39.1 16.3 decline in spot versus 3Q consumption cost) and a moderation in other crude-linked inputs. EBITDA
EPS (Rs/share) 5.0 6.0 7.0 39.1 16.3 margin is expected to expand 200 bps/250 bps qoq/yoy, largely due to GM expansion.
SRF
Net sales 35,494 34,697 36,897 4.0 6.3
EBITDA 9,480 8,335 8,634 (8.9) 3.6 We expect SRF to report a good performance in the Chemicals segment, though continued weakness in
EBIT 8,164 6,829 7,078 (13.3) 3.6 the other two segments (Packaging Films and Technical Textiles) will likely result in a continuation of
PBT 7,879 6,309 6,578 (16.5) 4.3 yoy declines in EBITDA and PAT.
Tax 1,823 1,200 1,381 (24.2) 15.1
Reported PAT 6,056 5,109 5,196 (14.2) 1.7
Extraordinaries — — — — — We expect Chemicals segment revenues to grow 15%/28% qoq/yoy. We expect segment margins to
remain strong at ~30%, albeit possibly moderating qoq due to lower domestic prices of HFC134A.
Adjusted PAT 6,056 5,109 5,196 (14.2) 1.7
Margins in Packaging Films and Technical Textiles are likely to remain under pressure amid
EPS (Rs/share) 20.4 17.2 17.5 (14.3) 1.7 overcapacity and weak demand, respectively.
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Vinati Organics
Net sales 4,861 5,087 5,270 8.4 3.6
EBITDA 1,388 1,638 1,538 10.8 (6.1)
We expect Vinati to report steady revenues on a qoq basis, consistent with management guidance
EBIT 1,271 1,507 1,408 10.8 (6.6)
provided last quarter. On a yoy basis, revenue growth should be modest due to a difficult year-ago base.
PBT 1,420 1,675 1,618 13.9 (3.4)
Tax (409) (421) (404) (1.1) (3.9)
Reported PAT 1,011 1,254 1,213 20.0 (3.3)
Extraordinaries — — — — — We model for a modest reduction in margin from the high levels of 3Q due to a slight qoq dip in ATBS
Adjusted PAT 1,011 1,254 1,213 20.0 (3.3) prices and increase in prices of acryonitrile (the company's key raw material for ATBS), which may lead
EPS (Rs/share) 9.8 12.2 11.8 20.0 (3.3) to lower spreads on a qoq basis.
Telecommunication Services
Bharti Airtel
Net sales 315,003 358,044 363,574 15.4 1.5
EBITDA 160,403 184,532 186,258 16.1 0.9 We expect ~2% qoq growth in India wireless business revenue/EBITDA, as 1% qoq ARPU uptick (on
EBIT 74,577 91,555 90,767 21.7 (0.9) hikes in minimum recharge plans) to Rs197 is offset by likely paying subscriber decline (-2.5 mn qoq)
PBT 34,170 47,275 44,214 29.4 (6.5) and lower days in the quarter (90 versus 92 in 3Q).
Tax 14,003 10,756 13,264 (5.3) 23.3
Reported PAT 20,078 15,882 24,602 22.5 54.9
Extraordinaries 9,847 (6,698) — — — Among the other business segments, we model sequential revenue growth, as (1) 5% for Homes
Adjusted PAT 10,231 22,580 24,602 140.5 9.0 Broadband, (2) 1% for Enterprise and (3) largely flat for Airtel Africa. Overall, we expect 1-2% qoq growth
EPS (Rs/share) 1.8 4.0 4.4 140.5 9.0 in consolidated revenue/EBITDA.
Indus Towers
Net sales 65,407 67,444 67,453 3.1 0.0
EBITDA 34,864 34,121 34,544 (0.9) 1.2 We expect EBITDA (adjusted for one-offs and provision write-offs) to increase 1% qoq, reflecting a
modest increase in tenancies. Reported EBITDA would likely be impacted by continued provisions for
EBIT 21,215 20,544 20,884 (1.6) 1.7
bad debts. We assume modest ~Rs5 bn bad debt provisions in 4QFY23 (versus Rs22.5 bn/Rs17.8
PBT 18,558 17,902 18,033 (2.8) 0.7 bn/Rs12.3 bn in 3Q/2Q/1Q).
Tax 6,029 (2,439) 3,333 (44.7) NM
Reported PAT 18,285 (7,082) 9,904 (45.8) NM
Extraordinaries 5,756 (27,423) (4,797) (183.3) (82.5)
Adjusted PAT 18,285 (2,154) 9,904 (45.8) NM We model net tenancy addition of 1,650 and tower addition of 1,500 for the quarter.
EPS (Rs/share) 6.8 (0.8) 3.7 (45.8) NM
Tata Communications
Net sales 42,630 45,283 46,056 8.0 1.7
EBITDA 10,453 10,774 10,819 3.5 0.4
We expect data gross revenue to inch up 2.5% qoq (~12% yoy), driven by robust growth in DPS and also
EBIT 4,566 5,225 5,196 13.8 (0.6)
boost from rupee depreciation.
PBT 6,304 4,306 4,246 (32.6) (1.4)
Tax 2,179 436 849 (61.0) 94.9
Reported PAT 3,651 3,939 3,467 (5.0) (12.0)
Extraordinaries (463) — — — —
Adjusted PAT 4,113 3,939 3,467 (15.7) (12.0) We model ~30 bps qoq decline in overall EBITDA margin to 23.5% due to higher staff expenses.
EPS (Rs/share) 14.4 13.8 12.2 (15.7) (12.0)
Vodafone Idea
Net sales 102,395 106,206 104,403 2.0 (1.7)
EBITDA 46,490 41,808 41,059 (11.7) (1.8)
We expect revenues and EBITDA to decline by ~2% qoq, driven largely by lower days in 4Q (90 versus 92
EBIT (12,640) (17,052) (18,572) NM NM
in 3Q) and continued decline in subscriber base.
PBT (65,479) (79,899) (82,550) NM NM
Tax 18 3 — — —
Reported PAT (65,631) (79,900) (82,550) NM NM
Extraordinaries (137) — — NM NM We model (1) EoP subscriber base to decline by 4 mn qoq (versus -5.8 mn in 3Q) to 224.6 mn and (2)
Adjusted PAT (65,494) (79,900) (82,550) NM NM ARPU to remain flat qoq at ~Rs135/month, as improved subscriber mix is offset by lower days in the
EPS (Rs/share) (1.3) (1.6) (1.7) NM NM quarter.
Transportation
Adani Ports and SEZ
Net sales 38,450 47,862 50,285 30.8 5.1
EBITDA 23,827 30,114 32,090 34.7 6.6 We model 19%/31% yoy improvements in volumes/revenues, driven by a combination of (1) organic
volume growth (mid single-digit), (2) realization growth (high single-digit), and (3) boost from
EBIT 17,077 21,277 23,719 38.9 11.5
Gangavaram volumes (high single-digit). Underlying comparable volume growth continues to be
PBT 16,134 18,479 20,683 28.2 11.9 impacted by the weakness in country-level demand and export curbs.
Tax 2,648 3,040 3,259 23.1 7.2
Reported PAT 10,240 13,155 18,428 80.0 40.1
Extraordinaries (3,781) (2,273) 1,428 NM NM
We model a marginal 100 bps yoy reduction in EBITDA margin qoq, assuming negligible low-margin SEZ
Adjusted PAT 13,486 15,439 17,424 29.2 12.9
income.
EPS (Rs/share) 6.3 7.2 8.1 29.2 12.9
Strategy
India Research
43

Change (%)
Container Corp.
Net sales 20,430 19,884 20,122 (1.5) 1.2
EBITDA 4,127 4,264 4,707 14.1 10.4 The EXIM container handling tonnage-km for Indian Railways has growth of ~6% yoy/qoq based on the
run-rate for January and February. We build in 5%/6% yoy/qoq growth exim volumes for Concor, and
EBIT 2,818 2,907 3,344 18.7 15.0
factor in steady qoq market share. We expect an overall revenue decline of 2%, which accounts for the
PBT 3,372 3,901 3,703 9.8 (5.1) impact of low-realization last mile business in the volume print.
Tax 804 936 885 10.1 (5.4)
Reported PAT 2,568 2,965 2,818 9.7 (5.0)
We expect weakness in the margin in 4Q to account for incentive schemes introduced to curb loss of
Adjusted PAT 2,568 2,965 2,818 9.7 (5.0)
market share. The yoy improvement in margin reflects a low base in 4Q last year.
EPS (Rs/share) 4.2 4.9 4.6 9.7 (5.0)
Delhivery
Net sales 20,718 18,238 20,506 (1.0) 12.4
EBITDA 601 (733) (124) (120.6) (83.1)
We assume 3%/21% yoy decline in Express Parcel/PTL segment volumes. The overall decline in
EBIT (1,625) (2,806) (2,106) 29.6 (25.0)
revenues will be limited due to the scale-up in other segments.
PBT (1,305) (2,077) (1,579) 21.0 (24.0)
Tax (107) (134) — — —
Reported PAT (1,198) (1,957) (1,579) 31.8 (19.3)
Extraordinaries — — — — — We expect Delhivery to report a small positive adjusted EBITDA due to a qoq increase in the PTL
Adjusted PAT (1,198) (1,957) (1,579) 31.8 (19.3) business. Essentially, we build in a 50% gross margin on Rs1.3 bn additional qoq volumes in the Express
EPS (Rs/share) (1.7) (2.7) (2.2) 31.8 (19.3) Parcel and PTL segments, and modest add-on benefit from normalizing lost shipment expenses.
EBITDA margin (%) 2.9 (4.0) (0.6) -351 bps 341 bps
Gateway Distriparks
Net sales 3,590 3,411 3,453 (3.8) 1.2
EBITDA 949 909 917 (3.3) 0.9
We expect sequential improvement in volumes, in line with the movement in Indian Railways' rail
EBIT 660 651 637 (3.6) (2.2)
volumes.
PBT 678 574 629 (7.2) 9.7
Tax (174) 36 83 NM 128.9
Reported PAT 852 553 525 (38.5) (5.1)
Adjusted PAT 852 553 525 (38.5) (5.1) We expect stable EBITDA margin qoq.
EPS (Rs/share) 1.7 1.1 1.0 (38.5) (5.1)
GMR Airports
Net sales 12,836 17,664 18,028 40.5 2.1
EBITDA 5,342 5,300 5,563 4.1 5.0
EBIT 2,743 2,629 2,951 7.6 12.3 We factor in airport volumes at 95% of pre-Covid levels, yielding a 2% qoq growth in revenues.
PBT (1,974) (2,038) (2,226) 12.8 9.2
Tax (423) 223 (742) 75.1 (432.8)
Reported PAT (1,096) (4,663) (2,746) 150.7 (41.1)
Extraordinaries 159 (3,288) (139) (187.4) (95.8)
We expect consolidated EBITDA to fall short of the cash interest outflow for GMR. Net debt would also
Adjusted PAT (1,096) (4,663) (2,746) 150.7 (41.1)
increase due to the airport capex.
EPS (Rs/share) (0.2) (0.8) (0.5) 150.7 (41.1)
Gujarat Pipavav Port
Net sales 2,207 2,506 2,546 15.4 1.6
EBITDA 1,290 1,417 1,449 12.4 2.3 We expect a 20/11% yoy improvement in container/overall volumes. GPPV has seen an improving yoy
EBIT 982 1,121 1,149 17.0 2.5 trend in container volumes until February, and would be starting to see benefit of the VLCC-linked Liquid
PBT 1,040 1,220 1,201 15.4 (1.6) volumes.
Tax 376 282 321 (14.6) 13.5
Reported PAT 612 1,081 558 (8.8) (48.4)
Extraordinaries (53) 144 (322) 513.1 (323.6)
We model the margin to improve to 57% on tariff hikes taken by the company and healthy cargo mix for
Adjusted PAT 665 937 880 32.4 (6.1)
the quarter.
EPS (Rs/share) 1.4 1.9 1.8 32.4 (6.1)
InterGlobe Aviation
Net sales 80,207 149,330 141,646 76.6 (5.1)
EBITDA 357 31,136 32,833 NM 5.4 We expect a 3.5% qoq increase in passenger count, largely driven by higher ASK and flat load factor at
85%. However, we build in a 5% qoq decline revenues due to contracting yields. On a yoy basis, we factor
EBIT (12,336) 17,718 18,606 NM 5.0
in 77% higher revenues, largely driven by a sharp improvement in passenger levels by ~63% yoy and 11%
PBT (16,798) 14,182 13,580 NM (4.2) yoy increase in overall yields for the company to Rs4.9/RPK.
Tax — — (600) — —
Reported PAT (16,798) 14,182 14,180 NM (0.0)
Extraordinaries — — — — — We expect the ~48 bps qoq decline in yields to be offset by a ~20 bps decline in fuel cost, similar to the
Adjusted PAT (16,798) 14,182 14,180 NM (0.0) benefit from a nil forex cost. This coupled, with a qoq uptick in volumes, will drive a qoq flat positive PAT,
EPS (Rs/share) (43.9) 37.1 37.0 NM (0.0) in our view.
Mahindra Logistics
Net sales 10,727 13,296 13,748 28.2 3.4
EBITDA 550 627 527 (4.1) (16.0)
We expect a 28% yoy improvement in revenues, driven by strong mid-teens growth in the M&M business
EBIT 176 129 (15) (108.5) (111.5)
and 10% boost from the Rivigo acquisitions.
PBT 142 36 (147) (203.5) (513.8)
Tax 31 19 (122) (496.1) (749.0)
Reported PAT 122 14 1 (99.0) (91.2)
We expect sequentially stable profitability trends for the base business. Full quarter consolidation of the
Adjusted PAT 122 14 1 (99.0) (91.2)
loss-making Rivigo business would yield a loss for MLL.
EPS (Rs/share) 1.7 0.2 0.0 (99.0) (91.2)
Strategy
India Research
UPDATE

India
Sector View: Cautious NIFTY-50: 17,557 April 05, 2023
Favorable mix and RM tailwinds to aid profitability

We forecast revenues for auto stocks under our coverage to increase 6% qoq
in 4QFY23, led by a double-digit increase in CV and PV production volumes,
partly offset by continued weakness in the 2W export market. We expect
EBITDA for companies under our coverage to increase 14% qoq due to (1) RM
tailwinds and (2) richer product mix, partly. However, we stay selective in the
sector, given concerns of a softening in demand trends in most segments.
M&M and Uno Minda remain our top picks in the sector.
We expect automotive OEM revenues to increase 7% qoq, mainly due to (1) a

10-12% qoq increase in PV volumes, driven by strong sales of the SUV segment,
and (2) a >20% qoq increase in CV volumes due to resilient replacement
segment demand and pre-buy before BS-VI Phase II transition, partly offset by
(1) a single-digit decline in the 2W segment’s volumes, as demand in the export
market remained sluggish, and (2) a double-digit decline in the tractor
segment’s volumes owing to seasonality. We expect the EBITDA margin to
improve 100 bps qoq in 4QFY23 for auto OEMs, mainly led by (1) operating
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities Act of 1933
leverage benefits for PV and CV OEMs, and (2) gross margin expansion on lower
commodity prices (especially for CV and tractor OEMs) and a richer product
mix.
We expect MSIL’s EBITDA to increase 23% qoq in 4QFY23, led by (1) 11% qoq
increase in volumes, leading to operating leverage benefits, (2) 40 bps rise in
the gross margin, driven by richer product mix and price increases, partly offset
by an adverse forex movement (appreciation of Yen), and (3) lower discounts,
partly offset by higher ad spends due to newer launches.
In the 2W segment, we expect Bajaj Auto’s EBITDA to decline 11% qoq, mainly
owing to a 13% qoq decline in volumes, partly offset by a richer product mix. We
are building Hero MotoCorp’s EBITDA margin to improve 40 bps sequentially,
mainly due to price hikes taken by the company. We expect TVS Motors’ EBITDA
to decline 3% qoq, mainly on account of a decline in gross margins due to an
inferior product mix (higher mix of EV scooter and lower mix of exports) in
4QFY23. Furthermore, we reckon Eicher Motors’ (standalone business) EBITDA
to increase 3% qoq, led by a 50 bps qoq expansion in the EBITDA margin due to
RM tailwinds, price increases and richer product mix (higher mix of exports).
We forecast M&M EBITDA to increase 2% qoq, led by an inferior segmental mix
(lower mix of tractor segment), partly offset by RM tailwinds in the tractor
segment. We expect Tata Motors’ PV business EBITDA to improve 80 bps qoq.
CV OEMs will report a strong quarter sequentially in 4QFY23. We expect Ashok

Leyland to report a 70% qoq increase in EBITDA, mainly led by (1) operating
leverage benefits, (2) a richer product mix and (3) RM tailwinds. Furthermore,
Related Research
we expect Tata Motors’ standalone EBITDA to increase 50% qoq in 4QFY23.
 → Automobiles & Components: A mixed bag
→ Automobiles & Components: 3QFY23E
earnings preview - RM tailwinds to aid
profitability
Rishi Vora Praveen Poreddy

5
Steady quarter for auto suppliers sequentially; RM tailwinds to aid profitability

We expect auto component companies under our coverage to report a 3% qoq revenue increase (12%
yoy growth) due to (1) a double-digit increase in the CV and PV segment’s volumes, and (2) low single-
digit growth in the replacement segment’s volumes (batteries, tires and bearing), partly offset by (1) a
single-digit volume decline in the 2W segment’s volumes and (2) weakness in the export markets. We
expect the EBITDA margin to improve 70 bps qoq, mainly due to (1) RM tailwinds, and (2) benefit due to
a decline in energy prices for companies operating in the European geography, partly offset by a weaker
product mix (lower mix of the replacement and export segments).
For tire companies, revenues will likely increase low single-digits qoq, in line with the volume increase.
We expect gross margins to improve 70-150 bps, led by a 3-4% qoq decline in the RM basket (natural
rubber and crude oil prices).
We estimate bearing companies to report a decent quarter, led by (1) a double-digit increase in
production volumes of CVs and PVs, and (2) mid-single-digit growth in the industrial segment. We are
building in improvement in the EBITDA margin qoq, driven by operating leverage benefits. Timken
India should report stronger qoq print, given its higher exposure to the domestic CV segment.
We reckon Bharat Forge’s standalone business revenues to increase 7% qoq, led by (1) a 10% qoq
increase in the domestic segment’s revenues and (2) a 5% qoq increase in the export segment’s
revenues. The domestic segment’s revenue growth would be driven by strong growth in the domestic
CV and PV segments, whereas the export segment will witness steady recovery, driven by the PV and
CV segments. We expect the standalone EBITDA margin to decline 160 bps qoq, as 3QFY23 had an
exchange gain benefit of Rs422 mn. Adjusted for the exchange gain benefit, we expect the EBITDA
margin to improve 60 bps, driven by an operating leverage benefit, partly offset by an inferior
segmental mix (lower mix of export segment) in 4QFY23. The EU subsidiaries profitability should
improve qoq, driven by (1) an improvement in utilization levels and (2) a decline in energy prices.
We estimate SAMIL’s consolidated revenues to increase 3% qoq in 4QFY23 owing to (1) low single-
digit revenue growth qoq in the SMRPBV business (in INR terms), and (2) high single-digit qoq growth
in the wiring harness division, led by a 10-12% qoq revenue increase in domestic business due to
higher PV production volumes and high single-digit qoq increase in PKC revenues. The consolidated
EBITDA margin should continue its sequential improvement, driven by sharp decline in energy prices.
We are building Endurance Technologies’ EBITDA to increase by 5% qoq due to (1) RM tailwinds in
the domestic business and (2) recovery in EU business profitability driven by lower energy prices,
partly offset by negative operating leverage in the standalone business.
We expect Uno Minda’s consolidated revenues to increase 3% qoq in 4QFY23, led by 1) a 10-12% qoq
increase in the PV segment’s production volumes, and (2) ramp-up of new order wins in various
segments, partly offset by (1) high single-digit decline in 2W production volumes and (2) lower ASPs
due to a decline in aluminum prices (LMT division).
We expect Sona Comstar’s EBITDA margin to decline 20 bps qoq, mainly led by an unfavorable
product mix (lower mix of driveline business), partly offset by operating leverage benefits in 4QFY23.
Expect gross margins to expand for most OEMs in 4QFY23 qoq

We expect gross margins to improve for most OEMs, driven by (1) lagged benefit of the RM correction
basket, and (2) richer product mix (except for M&M and Escorts). Furthermore, we expect gross margin
to remain at 4QFY23E levels (assuming similar product mix). Although base metal prices have witnessed
an uptick over the past few months, led by reopening in China, precious metal prices continue their slide
downward.
Refer to Exhibit 4 for detailed earnings estimates of companies under our coverage.

India Research
6
Prices of steel increased 3-4% sequentially in 4QFY23; copper prices went up 12% qoq
Exhibit 1: Quarterly movement of raw material prices, March fiscal year-ends, 4QFY20-4QFY23 (%)
4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23
Domestic CRC steel price (Rs/ton) 44,879 43,163 45,261 55,658 66,372 72,372 75,372 72,372 74,500 78,757 66,900 62,600 64,500
QoQ chg (%) 12.8 (3.8) 4.9 23.0 19.2 9.0 4.1 (4.0) 2.9 5.7 (15.1) (6.4) 3.0
China CRC steel price ($/ton) 614 557 638 757 853 962 940 875 850 852 665 623 647
QoQ chg (%) 0.8 (9.3) 14.5 18.7 12.7 12.8 (2.3) (6.9) (2.9) 0.3 (22.0) (6.3) 3.9
LME aluminum ($/ton) 1,686 1,498 1,707 1,931 2,090 2,414 2,652 2,758 3,224 2,896 2,360 2,355 2,400
QoQ chg (%) (4.1) (11.2) 14.0 13.1 8.2 15.5 9.9 4.0 16.9 (10.2) (18.5) (0.2) 1.9
LME lead ($/ton) 1,855 1,678 1,874 1,917 2,007 2,141 2,284 2,297 2,318 2,197 1,975 2,093 2,131
QoQ chg (%) (9.0) (9.5) 11.7 2.3 4.7 6.7 6.7 0.6 0.9 (5.2) (10.1) 6.0 1.8
LME copper ($/ton) 5,614 5,351 6,527 7,192 8,468 9,706 9,397 9,579 9,940 9,507 7,734 8,005 8,959
QoQ chg (%) (5.1) (4.7) 22.0 10.2 17.7 14.6 (3.2) 1.9 3.8 (4.4) (18.7) 3.5 11.9
RSS4-natural rubber (Rs/kg) 134.0 120.0 131.0 151.9 158.0 169.0 173.3 177.0 166.0 173.4 163.0 147.0 142.6
QoQ chg (%) 5.1 (10.4) 9.2 16.0 4.0 7.0 2.5 2.2 (6.2) 4.5 (6.0) (9.8) (3.0)
Tokyo generic first rubber price (Rs/kg) 107.3 97.9 121.8 179.2 185.2 163.4 137.4 143.0 156.0 150.0 135.0 127.0 129.8
QoQ chg (%) 0.5 (8.7) 24.4 47.1 3.4 (11.8) (15.9) 4.1 9.1 (3.9) (10.0) (5.9) 2.2
Palladium ($/oz) 2,294 1,986 2,172 2,350 2,408 2,789 2,452 1,947 2,336 2,091 2,081 1,939 1,568
QoQ chg (%) 27.4 (13.4) 9.4 8.2 2.5 15.8 (12.1) (20.6) 20.0 (10.5) (0.5) (6.8) (19.2)
Source: Bloomberg, Kotak Institutional Equities
We expect sequential improvement in gross margins for most OEMs, driven by RM tailwinds and richer product mix in 4QFY23
Exhibit 2: Gross and EBITDA margin trajectory for select companies, March fiscal year-ends, 2022-23 (%, bps)
Mar-22 Dec-22 Mar-23 qoq (bps) yoy (bps) Mar-22 Dec-22 Mar-23 qoq (bps) yoy (bps)
Ashok Leyland Amara Raja Batteries
Gross margin (%) 21.8 23.7 24.5 76 275 Gross margin (%) 27.9 33.4 33.5 14 563
EBITDA margin (%) 8.9 8.8 11.5 263 259 EBITDA margin (%) 10.1 15.0 15.4 40 536
Bajaj Auto Apollo Tyres (consolidated)
EBITDA margin (%) 17.1 19.1 18.9 (17) 178 EBITDA margin (%) 11.2 14.2 15.0 73 372
Eicher Motors (standalone) Balkrishna Industries
Gross margin (%) 42.7 41.7 42.2 50 (47) Gross margin (%) 54.7 48.6 50.0 137 (465)
EBITDA margin (%) 23.6 23.9 24.4 57 81 EBITDA margin (%) 23.7 19.1 21.4 234 (226)
Escorts CEAT (consolidated)
Gross margin (%) 29.6 25.5 27.3 183 (228) Gross margin (%) 33.5 34.5 35.4 90 192
EBITDA margin (%) 13.1 8.4 10.0 157 (310) EBITDA margin (%) 7.2 8.7 9.9 115 263
Hero Motocorp Exide Industries
EBITDA margin (%) 11.2 11.5 11.9 44 79 EBITDA margin (%) 10.2 11.8 12.3 51 203
M&M standalone MRF
Gross margin (%) 23.6 24.0 23.3 (75) (34) Gross margin (%) 32.1 32.1 33.5 137 136
EBITDA margin (%) 11.4 13.0 12.5 (52) 112 EBITDA margin (%) 10.1 9.9 11.5 158 135
Maruti Suzuki Schaeffler India
Gross margin (%) 26.5 27.3 27.7 37 125 Gross margin (%) 39.2 39.0 39.0 (3) (25)
EBITDA margin (%) 9.1 9.8 10.8 103 171 EBITDA margin (%) 19.7 19.2 19.5 28 (17)
Tata Motors (standalone) SKF India Limited
Gross margin (%) 22.1 26.3 26.5 16 444 Gross margin (%) 37.5 41.5 41.2 (26) 375
EBITDA margin (%) 6.4 8.8 10.6 178 412 EBITDA margin (%) 15.3 17.1 17.1 (3) 171
TVS Timken India
Gross margin (%) 23.8 24.5 23.7 (78) (15) Gross margin (%) 47.7 39.5 42.0 247 (572)
EBITDA margin (%) 10.1 10.1 9.6 (49) (49) EBITDA margin (%) 26.9 17.0 20.0 298 (694)
Source: Company, Kotak Institutional Equities estimates

India Research
7
INR has depreciated 3% qoq as against GBP in 4QFY23; INR remains unchanged qoq versus USD in 4QFY23
Exhibit 3: Movement of various currencies versus INR, March fiscal year-ends, 4QFY20-4QFY23
Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
INR-USD
Average 72.5 75.9 74.4 73.8 72.9 73.8 74.1 75.0 75.2 77.2 79.8 82.1 82.2
Period-end 75.3 75.6 73.8 73.0 73.1 74.4 74.2 74.4 75.9 78.9 81.6 82.7 82.4
GBP-USD
Average 1.28 1.24 1.29 1.32 1.38 1.40 1.38 1.35 1.34 1.26 1.18 1.17 1.21
Period-end 1.24 1.24 1.29 1.37 1.38 1.38 1.35 1.35 1.31 1.21 1.11 1.21 1.23
EUR-USD
Average 1.10 1.10 1.17 1.19 1.21 1.21 1.18 1.14 1.12 1.06 1.01 1.02 1.07
Period-end 1.10 1.12 1.17 1.22 1.17 1.19 1.16 1.14 1.11 1.05 0.98 1.07 1.08
JPY-INR
Average 0.66 0.71 0.70 0.71 0.69 0.67 0.67 0.66 0.65 0.59 0.58 0.58 0.62
Period-end 0.70 0.70 0.70 0.71 0.66 0.67 0.66 0.65 0.62 0.58 0.57 0.62 0.62
GBP-CNY
Average 8.9 8.8 8.9 8.8 8.9 9.0 8.9 8.6 8.5 8.3 8.1 8.4 8.3
Period-end 8.8 8.8 8.8 8.9 9.0 8.9 8.7 8.6 8.3 8.1 7.9 8.3 8.5
GBP-RUB
Average 85.4 89.8 95.3 100.6 102.7 103.7 101.2 97.9 118.5 84.7 70.9 74.4 89.3
Period-end 97.5 88.3 100.0 101.2 104.3 101.2 98.0 101.4 107.2 63.1 64.4 89.8 95.9
GBP-INR
Average 92.7 94.2 96.1 97.5 100.5 103.2 102.1 101.1 100.9 96.9 93.9 96.6 99.9
Period-end 93.5 93.7 95.4 99.8 100.8 102.8 99.9 100.4 99.6 95.8 91.0 100.1 101.3
GBP-EUR
Average 1.16 1.13 1.10 1.11 1.14 1.16 1.17 1.18 1.20 1.18 1.17 1.15 1.13
Period-end 1.13 1.10 1.10 1.12 1.18 1.17 1.16 1.19 1.19 1.16 1.13 1.13 1.14
EUR-INR
Average 79.9 83.6 86.9 88.1 88.0 88.9 87.4 85.8 84.4 82.2 80.5 83.6 88.2
Period-end 83.1 84.9 86.2 89.2 85.8 88.3 86.1 84.2 84.0 82.4 80.4 88.1 89.4
NGN-INR
Average 0.20 0.20 0.19 0.19 0.19 0.18 0.18 0.18 0.18 0.19 0.19 0.19 0.18
Period-end 0.19 0.20 0.19 0.18 0.18 0.18 0.18 0.18 0.18 0.19 0.19 0.18 0.18
EGP-INR
Average 4.6 4.8 4.7 4.7 4.6 4.7 4.7 4.8 4.7 4.2 4.2 3.6 2.7
Period-end 4.8 4.7 4.7 4.6 4.7 4.7 4.7 4.7 4.2 4.2 4.2 3.3 2.7
LKR-INR
Average 0.40 0.40 0.40 0.40 0.37 0.37 0.37 0.37 0.35 0.22 0.22 0.22 0.23
Period-end 0.40 0.41 0.40 0.39 0.37 0.37 0.37 0.37 0.26 0.22 0.22 0.22 0.25
COP-INR
Average 0.21 0.20 0.20 0.20 0.21 0.20 0.19 0.19 0.19 0.20 0.18 0.17 0.17
Period-end 0.19 0.20 0.19 0.21 0.20 0.20 0.19 0.18 0.20 0.19 0.18 0.17 0.18
PHP-INR
Average 1.42 1.50 1.52 1.53 1.51 1.53 1.48 1.49 1.46 1.46 1.41 1.43 1.50
Period-end 1.48 1.52 1.52 1.52 1.51 1.53 1.46 1.46 1.46 1.44 1.40 1.49 1.51

India Research
8
RM tailwinds, operating leverage benefits and richer product mix to drive qoq EBITDA margin expansion for most auto OEMs
Exhibit 4: Quarterly earnings preview of auto companies
Mar-22 Dec-22 Mar-23 qoq (%) yoy (%) Comments
Auto OEMs
Ashok Leyland
Volumes (units) 48,719 47,562 59,697 25.5 22.5 We expect revenues to increase by 31% qoq in 4QFY23 led by (1) 26% qoq increase in volumes and (2) 4% qoq increase in ASPs.
We expect ASPs to increase by 4% qoq mainly on account of (1) higher mix of domestic M&HCV segment (+320 bps qoq) and (2)
Net sales 87,443 90,297 117,868 30.5 34.8 better retention of price increases taken during the quarter.
EBITDA 7,760 7,973 13,514 69.5 74.1 We expect EBITDA margin to improve by 260 bps qoq led by (1) operating leverage benefits, (2) richer product mix (higher mix of
Margin (%) 8.9 8.8 11.5 M&HCV segment) and (3) lagged benefit of RM tailwinds (correction in steel prices) in 4QFY23.
Adjusted net profit 5,487 3,561 8,074 126.7 47.1
EPS 1.9 1.2 2.8 126.7 47.1
Bajaj Auto
Volumes declined by 13% qoq in 4QFY23 led by (1) 21-22% qoq decline in export 2W and 3W segment volumes and (2) 9% qoq
Volumes (units) 976,651 983,276 857,788 (12.8) (12.2)
decline in domestic 2W segment volumes partly offset by 12% qoq increase in domestic 3W volumes. We expect revenues to
decline by 10% qoq led by (1) 13% qoq decline in volumes and (2) 4% qoq increase in ASPs due to higher mix of 3W segment, lower
Net sales 79,748 93,151 83,897 (9.9) 5.2 mix of domestic economy motorcycle segment and lower mix of export 2W segment.
EBITDA 13,656 17,768 15,857 (10.8) 16.1 We expect EBITDA margin to decline by 20 bps on a qoq basis in 4QFY23 due to negative operating leverage partly offset by richer
product mix (higher mix of domestic 3W segment and lower mix of domestic economy motorcycle segment).
Margin (%) 17.1 19.1 18.9
Adjusted net profit 12,483 14,914 13,503 (9.5) 8.2
EPS 43.1 51.5 46.7 (9.5) 8.2
Eicher Motors (standalone)
Royal Enfield volumes declined by 1% qoq in 4QFY23 led by (1) 5% qoq decline in domestic segment led by weak performance of
Sales volumes (units) 185,675 221,401 218,525 (1.3) 17.7
core portfolio (ex-Hunter) and (2) 37% qoq increase in export segment owing to launch of Super Meteor 650 and favorable base.
We expect revenues to increase by 1% qoq in 4QFY23 led by (1) 2% qoq increase in ASPs due to price increases and higher export
Net sales 31,947 35,902 36,144 0.7 13.1 mix and (2) 1% qoq decline in volumes.
EBITDA 7,550 8,569 8,833 3.1 17.0 We estimate EBITDA margin to increase by 50 bps qoq in 4QFY23 led by (1) RM tailwinds and (2) richer product mix (higher mix of
Margin (%) 23.6 23.9 24.4 exports segment).
EPS 20.4 25.1 25.8 3.0 26.7
Eicher Motors (consolidated)
Net sales 31,933 37,210 37,644 1.2 17.9
EBITDA 7,571 8,572 9,133 6.5 20.6
Margin (%) 23.7 23.0 24.3
We expect VECV to report EBITDA margin of 9% in 4QFY23 versus 6.9% in 3QFY23 due to (1) operating leverage benefits and (2)
richer product mix.
EPS 22.5 27.3 33.1 21.5 47.5
Escorts Kubota
We expect revenues to increase by 17% yoy in 4QFY23 led by (1) 51% yoy increase in railway segment revenues driven by strong
order book, (2) 21% yoy increase in construction equipment segment revenues driven by 19% yoy increase in volumes and (3) 12%
Net sales 18,614 22,637 21,730 (4.0) 16.7
yoy increase in tractor segment revenues due to 13% yoy increase in tractor volumes owing to good Rabi sowing, continued
government support and better crop realizations.
EBITDA 2,434 1,903 2,168 13.9 (10.9) We estimate EBITDA margin to increase by 160 bps on a qoq basis mainly on account of (1) RM tailwinds especially in tractor
Margin (%) 13.1 8.4 10.0 segment and (2) operating leverage benefits in railways and construction equipment businesses in 4QFY23.
EPS 19.9 16.9 18.5 9.8 (7.0)
Hero Motocorp
Volumes (units) 1,188,884 1,239,693 1,270,492 2.5 6.9 We expect revenues to increase by 5% qoq in 4QFY23 led by (1) 3% qoq increase in volumes and (2) 2% qoq increase in ASPs
Net sales 74,217 80,310 83,951 4.5 13.1 mainly on account of price hikes taken during the quarter.
We expect EBITDA margin to increase by 40 bps qoq mainly driven by (1) marginal expansion in gross margins on account of
EBITDA 8,276 9,241 10,028 8.5 21.2 decline in precious metals and (2) richer product mix (higher mix of spares) partly offset by higher other expenses on account of
newer launches.
Margin (%) 11.2 11.5 11.9
EPS 31.4 35.6 38.6 8.5 23.0
Mahindra and Mahindra (standalone)
Volumes (units) 228,784 281,859 278,958 (1.0) 21.9 We estimate a 2% qoq increase in revenues in 4QFY23 led by (1) 10% qoq increase in automotive segment revenues driven by
7.5% qoq increase in volumes and 2% qoq increase in ASPs due to price increases taken by the company and (2) 14% qoq decline
Net sales 171,240 216,537 221,773 2.4 29.5 in tractor revenues mainly due to 15% qoq decline in volumes owing to seasonality.
We estimate overall EBITDA margin to decline by 50 bps qoq led by (1) inferior segmental mix (tractor segment volume mix stood
EBITDA 19,455 28,142 27,673 (1.7) 42.2 at 32% in 4QFY23 versus 38% in 3QFY23) and (2) higher launch cost in automotive segment partly offset by RM tailwinds (lagged
benefit) in tractor segment. We are building automotive EBIT margin of 7% in 4QFY23 versus 6.7% in 3QFY23 mainly on account of
Margin (%) 11.4 13.0 12.5 (1) operating leverage benefits and (2) better pricing. Also, we are building tractor segment EBIT margin to improve by 20 bps qoq
to 16.8% despite negative operating leverage mainly on account of lagged benefit of RM movement.
EPS 10.3 17.3 13.7 (20.7) 32.6
Maruti Suzuki
Volumes (units) 488,830 465,911 514,927 10.5 5.3 We expect revenues to increase by 12% qoq led by (1) 11% qoq increase in volumes and (2) 1% qoq increase in ASPs due to price
Net sales 267,400 290,443 323,776 11.5 21.1 increases and richer product mix (especially in the month of March).
EBITDA 24,268 28,331 34,908 23.2 43.8 We estimate EBITDA margin to increase by 100 bps qoq led by (1) operating leverage benefits and (2) favorable product mix partly
Margin (%) 9.1 9.8 10.8 offset by higher advertisement spends on account of newer launches.
EPS 60.9 77.8 93.7 20.4 53.9
Tata Motors (standalone)
Volumes (units) 119,870 95,914 116,168 21.1 (3.1) We estimate standalone business revenues to increase by 25% qoq in 4QFY23 led by (1) 21% qoq increase in volumes and (2) 3%
Net sales 173,383 157,940 197,030 24.8 13.6 qoq increases in ASPs due to richer product mix.
EBITDA 11,166 13,874 20,812 50.0 86.4 Overall, we expect EBITDA margin to improve to 10.6% in 4QFY23 from 8.8% in 3QFY23 led by (1) operating leverage benefits and
Margin (%) 6.4 8.8 10.6 (2) richer product mix.
Adjusted net profit 3,445 5,563 9,946
JLR (mn pounds)
UK P&L Volumes (units) 76,526 79,591 82,000 3.0 7.2 We expect JLR volumes (excluding China JV) to increase by 3% qoq led by improvement in chip availability. Overall, we expect
Net sales 4,810 6,271 6,396 2.0 33.0 revenues (ex China JV) to increase by 2% qoq in 4QFY23.
We expect reported EBITDA margin to improve by 60 bps qoq to 12% due to favorable model mix (higher mix of Land Rover). As a
EBITDA 599 716 764 6.8 27.6
result, we expect JLR EBIT margin to come in at 4.3% in 4QFY23.
Margin (%) 12.5 11.4 12.0
Net profit (95) 261 116
Tata Motors (consolidated)
Net sales 784,391 884,886 939,404 6.2 19.8
EBITDA 87,416 96,430 116,862 21.2 33.7
Margin (%) 11.1 10.9 12.4
Net profit (2,120) 21,339 32,046 We also expect domestic PV business EBITDA to improve to 7.8% (+80 bps qoq) led by RM tailwinds in 4QFY23.
EPS (0.6) 6.3 9.4

India Research
9
Diversified auto ancillaries will witness steady sequential recovery in profitability (contd)
TVS Motors
Volumes (units) 856,456 879,423 868,417 (1.3) 1.4 We estimate revenues to increase by 2% qoq in 4QFY23 led by (1) 3% qoq increase in ASPs driven and (2) 1% qoq decline in
volumes. Increase in ASPs can be attributed to (1) price hikes taken during the quarter, (2) higher mix of EV scooters and (3)
Net sales 55,303 65,454 66,574 1.7 20.4 lower mix of export segment.
EBITDA 5,568 6,589 6,378 (3.2) 14.5 We forecast EBITDA margin to decline by 50 bps qoq largely due to weaker product mix - higher mix of EV scooters and lower mix
of export and 3W segments partly offset by higher mix of ICE scooter segment in 4QFY23. We expect gross margins to decline by
Margin (%) 10.1 10.1 9.6 80 bps on a qoq basis in 4QFY23.
EPS 5.8 7.4 7.1 (4.8) 22.3
Battery companies
Amara Raja Batteries
We estimate revenues to increase by 5% qoq in 4QFY23 led by (1) 10-12% qoq increase in 4W OEM segment volumes, (2) mid
Net sales 21,807 26,372 27,691 5.0 27.0 single-digit increase in revenues in industrial segment and automotive replacement segments and (3) 3-5% qoq decline in 2W OEM
volumes
EBITDA 2,199 3,969 4,276 7.8 94.5 We expect EBITDA margin to increase by 40 bps on a qoq basis given 4QFY23 driven by (1) operating leverage benefit and (2) cost
Margin (%) 10.1 15.0 15.4 control measures
Adjusted net profit 985 2,228 2,492 11.9 152.9
EPS 5.8 13.0 14.6 11.9 152.9
Exide Industries
We estimate revenues to increase by 5% qoq in 4QFY23 led by (1) mid-single qoq increase in automotive replacement and
Net sales 34,086 34,053 35,807 5.2 5.0 industrial segment revenues and (2) 10-12% increase in 4W OEM segment volumes partly offset by low single-digit decline in 2W
OEM segment volumes.
EBITDA 3,490 4,005 4,394 9.7 25.9 We expect EBITDA margin to increase by 50 bps due to 12.3% led by (1) RM tailwinds (lagged benefit of decline in lead prices) and
Margin (%) 10.2 11.8 12.3 (2) operating leverage benefit in 4QFY23.
EPS 2.5 2.6 3.0 15.8 22.4
Tyre companies
Apollo Tyres (standalone)
We expect standalone revenues to decline by 1% qoq mainly led by volume decline. Decline in volumes would be driven by decline in
Net sales 39,880 42,466 42,041 (1.0) 5.4 replacement (weakness in PCR segment) and export segment volumes offset by sequential recovery in CV and PV OEM segment
volumes.
EBITDA 3,761 5,483 5,945 8.4 58.1 We expect standalone EBITDA margin to improve by 120 bps qoq led by RM tailwinds in 4QFY23. We expect gross margins to
Margin (%) 9.4 12.9 14.1 improve by 180 bps qoq in 4QFY23.
Adjusted net profit 544 1,376 1,851 34.5 240.3
EPS 0.9 2.2 2.9 34.5 240.3
Apollo Tyres (consolidated)
We expect Europe manufacturing operation revenues to increase by 11% yoy (in INR terms) in 4QFY23 driven by (1) 5% increase in
Net sales 55,783 64,228 61,395 (4.4) 10.1
revenues in (EUR terms) and (2) benefit of EUR appreciation versus INR.
EBITDA 6,264 9,134 9,179 0.5 46.5
We build in EBIT margin of 7.5% in our estimates in 4QFY23 (EBIT margin of 7.9% in 3QFY23 and EBIT margin of 4.9% in 4QFY22).
Margin (%) 11.2 14.2 15.0
EPS 1.8 4.6 4.8 5.5 171.6
Balkrishna Industries
Volumes (units) 77,119 66,480 67,865 2.1 (12.0) We expect volumes to decline by 12% yoy (up 2% qoq) at 67.9k MT in 4QFY23. Volumes will remain under pressure owing to
channel destocking and weak demand trends in off-highway segments. Revenues will likely decline by 2% qoq led by 4% decline in
Net sales 24,319 22,153 21,710 (2.0) (10.7) ASPs due to pass-through of freight surcharge to end-consumers.
EBITDA 5,765 4,233 4,655 10.0 (19.3) We expect EBITDA margin to increase by 230 bps qoq due to (1) RM tailwinds (lagged benefit), (2) continued decline in freight
Margin (%) 23.7 19.1 21.4 expenses and (3) cost control measures. We expect RM per kg to decline by 7% qoq in 4QFY23.
Adjusted net profit 3,943 2,231 2,809 25.9 (28.8)
EPS 20.4 11.5 14.5 25.9 (28.8)
CEAT (consolidated)
We expect consolidated revenues to increase by 4% qoq in 4QFY23 mainly led by 5% qoq increase in volumes. In standalone
Net sales 25,920 27,272 28,342 3.9 9.3 operations, we expect volume to increase by 5% on a qoq basis led by (1) increase in PCR and CV OEM segment volumes and (2)
uptick in CV replacement segment volumes.
EBITDA 1,875 2,376 2,794 17.6 49.0 We expect EBITDA margin to improve by 120 bps on a qoq basis in 4QFY23 led by RM tailwinds (2-3% qoq decline in RM basket)
partly offset by (1) weaker product mix (lower mix of exports and 2W segment). Overall, we expect consolidated gross margin to
Margin (%) 7.2 8.7 9.9 improve by 90 bps on a qoq basis in 4QFY23.
Adjusted net profit 297 357 762 113.2 156.8
EPS 7.3 8.8 18.8 113.2 156.8
MRF
We expect revenues to increase by 4% qoq in 4QFY23 led by driven by volume increase on account of (1) strong growth in PCR
Net sales 52,003 55,349 57,563 4.0 10.7
and CV OEM segment volumes and (2) uptick in CV replacement segment volumes.
EBITDA 5,275 5,486 6,616 20.6 25.4 We expect EBITDA margin to increase by 160 bps qoq due to RM tailwinds in 4QFY23.
Margin (%) 10.1 9.9 11.5
EPS 369.8 399.1 598.2 49.9 61.8
Bearing companies
Schaeffler India
We expect revenues to increase by 5% qoq in 1QCY23 led by (1) 8% qoq increase in automotive technologies segment - PVs,
trucks and tractors (39% of the revenues), (2) 4-5% qoq increase in industrial segment, which includes 2Ws and off-highway
Net sales 15,675 17,947 18,904 5.3 20.6
segments (33% of the revenues) and (3) low single-digit qoq increase in exports and automotive replacement segments (28% of
the segment).
EBITDA 3,085 3,452 3,688 6.8 19.6 We expect EBITDA margin to increase by 30 bps qoq basis in 1QCY23 mainly driven by (1) operating leverage benefit and (2) cost
Margin (%) 19.7 19.2 19.5 control measures partly offset by weaker segmental mix (lower mix of replacement and export segments).
EPS 13.3 14.8 16.0 8.3 20.7
SKF India Limited
We expect revenues to increase by 4% qoq in 4QFY23 led by (1) low single digit qoq increase in the automotive OEM segment
(26% of the overall revenues) mainly led by double-digit increase in CV and PV segments volumes, (2) 5-8% qoq increase in
Net sales 10,390 10,772 11,203 4.0 7.8
industrial OEM and railways segment (19% of the overall revenues) and (3) 3-5% qoq increase in automotive and industrial
replacement segments (47% of the overall revenues).
EBITDA 1,594 1,841 1,911 3.8 19.9
We expect EBITDA margin to remain flat on a qoq basis at 17.1% in 4QFY23.
Margin (%) 15.3 17.1 17.1
EPS 22.1 23.6 28.3 19.8 27.7
Timken India
We expect revenues to increase by 10% qoq in 4QFY23 led by (1) 20% qoq increase in CV segment revenues, (2) 5-10% qoq
Net sales 6,674 6,094 6,703 10.0 0.4 increase in replacement segment (18% of the revenues) & export segment revenues (30% of the revenues) and (3) 8% qoq
increase in railway segment revenues.
EBITDA 1,798 1,037 1,340 29.3 (25.4) We expect EBITDA margin to improve by 300 bps on a qoq basis to 20% in 4QFY23 mainly led by (1) RM tailwinds, (2) operating
Margin (%) 26.9 17.0 20.0 leverage benefits and (3) improvement in product mix.
Adjusted net profit 1,213 706 962 36.2 (20.7)
EPS 16.1 9.4 12.8 36.2 (20.7)

India Research
10
Decline in rubber prices to aid tire companies’ profitability in 4QFY23; bearing companies will report decent quarter (contd)
Diversified auto ancillaries
Bharat Forge (standalone)
We expect standalone revenues to increase by 7% qoq led by (1) 10% qoq increase in domestic segment revenues and (2) 5% qoq
Net sales 16,741 19,521 20,841 6.8 24.5 increase in export segment revenues. Domestic segment revenue growth would be driven by strong growth in domestic CV and
PV segments whereas export segment will witness steady recovery driven by PV and CV segments.
We expect EBITDA margin to decline by 160 bps on a qoq basis as 3QFY23 had exchange gain benefit of Rs422 mn. Adjusted for
EBITDA 4,312 5,351 5,387 0.7 24.9 exchange gain benefit, we expect EBITDA margin to improve by 60 bps driven by operating leverage benefit partly offset by inferior
segmental mix (lower mix of export segment) in 4QFY23.
Margin (%) 25.8 27.4 25.8
EPS 5.7 6.1 6.8 10.3 19.6
Bharat Forge (consolidated)
We estimate consolidated revenues to increase by 7% qoq in 4QFY23 led by (1) 7% qoq increase in standalone segment revenues,
Net sales 35,731 33,534 35,951 7.2 0.6
(2) 5% qoq increase in EU subsidiaries and (3) 10% qoq increase in BF Industrial business revenues.
We expect the company's consolidated EBITDA to improve by 80 bps on a qoq basis mainly led by (1) improvement in EU
EBITDA 5,539 4,693 5,327 13.5 (3.8)
subsidiares profitability and (2) operating leverage benefit in standalone business partly offset by lower forex gain in 4QFY23.
Margin (%) 15.5 14.0 14.8
Adjusted net profit 2,417 787 1,907 142.2 (21.1)
EPS 5.2 1.7 4.1 142.2 (21.1)
Endurance Technologies (consolidated)
We expect consolidated revenues to decline by 2% qoq in 4QFY23 led by (1) 5% qoq decline in standalone revenues owing to
Net sales 20,788 20,952 20,553 (1.9) (1.1) decline in 2W production volumes and (2) high single-digit qoq increase in European subsidiary revenues (in INR terms) led by
recovery in EU PV production volumes driven by improvement in supply chain.
EBITDA 2,571 2,395 2,523 5.3 (1.9) We expect consolidated EBITDA margin to improve by 90 bps qoq due to (1) RM tailwinds, (2) decline in energy cost prices as well
Margin (%) 12.4 11.4 12.3 as adjustments for EU OEMs partly offset by negative operating leverage in the standalone business in 4QFY23.
Adjusted net profit 1,362 1,082 1,172 8.3 (14.0)
EPS 9.7 7.7 8.3 8.3 (14.0)
Mahindra CIE (consolidated)
We expect consolidated revenues to increase by 4% qoq in 1QCY23 led by (1) 8% qoq increase in standalone business revenues
driven by strong growth in PV and CV segment volumes, (2) 8% qoq decline in revenues of Aurangabad Electricals and Bill Forge
Net sales 24,444 20,740 21,588 4.1 (11.7)
due to lower 2W production volumes and (3) 2-3% qoq increase in EU subsidiary revenues (in EUR terms) led by gradual recovery in
production volumes.
EBITDA 3,079 3,169 3,343 5.5 8.6 We expect consolidated EBITDA margin to improve by 20 bps qoq led by (1) cost control measures and (2) benefit of lower energy
Margin (%) 12.6 15.3 15.5 prices in EU subsidiaries in 1QCY23.
PBT 2,130 2,324 2,443 5.1 14.7
SAMIL
We estimate consolidated revenues to increase by 3% qoq in 4QFY23 owing to (1) low-single digit revenue growth on a qoq basis in
Net sales 171,848 202,262 208,795 3.2 21.5 SMRPBV business (in INR terms) and (2) high single digit qoq growth in wiring harness division led by 10-12% qoq revenue
increase in domestic business due to higher PV production volumes as well as high single-digit qoq increase in PKC revenues.
EBITDA 12,108 15,753 17,320 9.9 43.0 We estimate consolidated EBITDA margin to improve by 50 bps qoq to 8.3% led by sharp decline in energy prices resulting in lower
Margin (%) 7.0 7.8 8.3 othere expenses in 4QFY23.
EPS 0.2 0.7 0.8 25.9 269.5
Sona Comstar
We expect revenues to increase by 7% on a qoq basis led by (1) 8-10% qoq increase in starter motor business, (2) pick-up in 2W
Net sales 5,500 6,850 7,293 6.5 32.6 traction motor segment revenues led by increase in production volumes of key customers and (3) low-single digit growth in
driveline business revenues in 4QFY23.
EBITDA 1,354 1,862 1,971 5.9 45.6 We expect EBITDA margin to decline by 20 bps on a qoq basis mainly led by weaker product mix (lower mix of driveline business
Margin (%) 24.6 27.2 27.0 partly offset by (1) RM tailwinds and (2) operating leverage benefits in 4QFY23.
EPS 1.8 1.8 1.9 4.4 6.8
Uno Minda (consolidated)
We expect 4QFY23 consolidated revenues to increase by 3% on a qoq basis led by (1) 10-12% qoq increase in PV segment
Net sales 24,151 29,155 30,116 3.3 24.7 production volumes and (2) ramp-up of new order wins in various segments partly offset by (1) high single-digit decline in 2W
production volumes and (2) lower ASPs due to decline in Aluminium prices (LMT division).
EBITDA 2,755 3,384 3,543 4.7 28.6
We expect EBITDA margin to increase by 20 bps qoq due to (1) RM tailwinds and (2) cost control measures in 4QFY23.
Margin (%) 11.4 11.6 11.8
EPS 2.5 2.8 3.3 17.8 32.1
Varroc Engineering
We expect consolidated revenues to decline by 5% qoq in 4QFY23 led by high single-digit decline in domestic 2W production
Net sales 16,520 17,168 16,309 (5.0) (1.3)
volumes due to weak demand scenario especially in the export markets.
EBITDA 1,071 1,285 1,200 (6.6) 12.0 We expect EBITDA margin to decline by 10 bps qoq led by negative operating leverage partly offset by cost control measures in
Margin (%) 6.5 7.5 7.4 4QFY23.
Adjusted net profit (2,850) 218 31 (85.9)
EPS (21.1) 1.6 0.2 (85.9)

India Research
UPDATE
Banks / Diversified Financials

India
Sector View: Attractive NIFTY-50: 17,557 April 06, 2023
Strong 4Q; walking toward multiple uncertainties

We expect healthy earnings growth for banks in 4QFY23. A combination of
strong macro and seasonal strengths translates to best performance for non-
banks. Loan growth is broad-based, with contributions from public, private
banks and NBFCs. We are probably closer to the peak on NIM for banks
(mixed trends for non-banks) as the cost of funds is likely to move faster than
lending yields. The asset-quality ratio should see further improvement across
the board, leading to lower credit costs. Key conversation for the quarter:
near-term outlook on deposit mobilization, NIM, loan growth and ability to
find operating leverage if there is a challenge on multiple fronts.
Banks: Earnings recovery led by lower provisions and healthy NII growth
We expect the banks under coverage to report ~17% yoy earnings growth (Axis
Bank should report a loss on account of goodwill amortization), led by ~10%
yoy operating profit growth. We expect solid NII growth at ~25% yoy on the back
of ~16% yoy loan growth. The outlook on NIM appears to be trending on the
lines being flat sequentially. There is negligible risk on asset quality, and we
have seen a few resolutions as well, which imply credit costs will remain lower.
Banks: Discussions are less about the present and more about the future
We are seeing conversations in the following areas, similar to 3Q. (1) Driver of
near-term earnings given the headwinds on NIM, loan growth and potential NPL.
(2) We are building NIM compression for most banks that witnessed NIM
expansion in FY2023, but concerns remain on the quantum of compression for
FY2024. Additional challenges emerge from slower deposit growth, and the
quality of deposits is shifting to term/wholesale, away from CASA/retail
deposits. (3) Composition of loan growth and the possible risk of a sharp
slowdown in FY2024, led by a lower intent to borrow, especially those that had
a positive impact from inflation-led demand. (4) Ability to pull back costs, if
warranted in operating profit growth. We continue to see a scenario where there
is still strong traction in earnings growth for the mid-tier banks. However, macro
risks dominate the conversation, leading to a preference for top-tier banks. We
prefer having a combination of large and mid-caps at these levels.
Non-banks had a blast

4QFY23 was probably the best quarter for business growth for NBFCs. Market
sources suggest stellar disbursements in most below-prime segments. While the
overall year has been strong, seasonal trends suggest that activity typically builds
up in 4Q. Strong collections in March will likely lead to further improvement in
asset-quality performance, closer to pre-Covid peaks. Prime housing loan (HDFC
and LICHF) was likely the only segment with soft demand, following sharp rate
hikes. While the transmission of rate hikes is now getting clearly reflected in
borrowings costs, trends in NIM may be divergent, depending on the timing of
lending rate hikes. We expect growth guidance for FY2024E to remain strong. The
Street’s discussion likely shifts to (1) further rate hikes by NBFCs, (2) trends in NIM
and (3) the impact of rate hikes on credit demand. Chola and Shriram remain our
favored picks, while Aavas and Home First in affordable housing.
M B Mahesh, CFA Nischint Chawathe Ashlesh Sonje, CFA Abhijeet Sakhare Varun Palacharla
12
Strong earnings growth expected for PSU banks (low base), while private banks will see an earnings decline
led by loss for Axis Bank (on account of goodwill amortization)
Growth in PAT, March fiscal year-ends (%)
Public banks (LHS) Private banks (LHS)

160
80
(80)
(160)
(240)
1QFY20
2QFY20
2QFY21
3QFY22
3QFY23
4QFY23
4QFY19
3QFY20
4QFY20
1QFY21
3QFY21
4QFY21
1QFY22
2QFY22
4QFY22
1QFY23
2QFY23
Notes:
(1) For PSU banks that merged in April 2020, we have computed yoy growth for proforma merged entities.
Source: Company, Kotak Institutional Equities
NII growth to be healthy on a yoy basis Revenue growth has declined, but still strong
Growth in NII, March fiscal year-ends (%) Revenue growth, March fiscal year-ends (%)
Public banks (LHS) Private banks Sector Public banks (LHS) Private banks
28 30
21 20
14 10
7 0
0 (10)
(7) (20)
3QFY20
4QFY20
1QFY21
1QFY22
2QFY22
3QFY22
3QFY23
4QFY23
4QFY19
1QFY20
2QFY20
2QFY21
3QFY21
4QFY21
4QFY22
1QFY23
2QFY23
1QFY20
2QFY20
3QFY20
4QFY20
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
4QFY19
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
3QFY23
4QFY23
Notes: Notes:
(1) For PSU banks that merged in April 2020, we have computed yoy (1) For PSU banks that merged in April 2020, we have computed yoy
growth for proforma merged entities. growth for proforma merged entities.
Source: Company, Kotak Institutional Equities Source: Company, Kotak Institutional Equities
Banks
India Research
13
Strong NII growth yoy will continue to drive profitability

Growth in NII, PPoP and earnings yoy and qoq, March fiscal year-ends
Net int erest income Pre-provisioning prof it PAT
4QFY22 3QFY23 4QFY23E YoY QoQ 4QFY22 3QFY23 4QFY23E YoY QoQ 4QFY22 3QFY23 4QFY23E YoY QoQ
(Rs mn) (Rs mn) (Rs mn) (% ) (% ) (Rs mn) (Rs mn) (Rs mn) (% ) (% ) (Rs mn) (Rs mn) (Rs mn) (% ) (% )
Banks
Public banks
Bank of Baroda 86,117 108,183 110,347 28 2 56,351 82,322 79,690 41 (3) 17,788 38,527 42,608 140 11
Canara Bank 70,059 86,000 91,406 30 6 62,019 69,521 74,514 20 7 16,662 28,815 34,208 105 19
PNB 73,041 91,794 93,186 28 2 52,648 57,159 68,636 30 20 2,016 6,289 10,703 431 70
State Bank of India 311,979 380,686 388,560 25 2 197,168 252,193 246,394 25 (2) 91,135 142,053 158,897 74 12
Union Bank 67,694 86,281 91,260 35 6 55,201 66,192 69,298 26 5 14,396 22,448 22,937 59 2
Old privat e banks
City Union Bank 5,007 5,557 5,600 12 1 4,399 4,973 4,622 5 (7) 2,090 2,178 2,287 9 5
Federal Bank 15,252 19,565 19,430 27 (1) 7,982 12,742 11,679 46 (8) 5,405 8,036 7,626 41 (5)
Karur Vysya Bank 7,099 8,890 9,021 27 1 4,413 6,889 6,187 40 (10) 2,135 2,893 3,049 43 5
New privat e banks
Axis Bank 88,191 114,593 120,130 36 5 64,660 92,775 (21,374) (133) (123) 41,178 58,531 (54,121) (231) (192)
Bandhan Bank 25,398 20,804 22,811 (10) 10 25,214 19,222 16,789 (33) (13) 19,023 2,906 8,429 (56) 190
DCB Bank 3,805 4,460 4,626 22 4 2,208 1,941 2,214 0 14 1,134 1,139 1,367 21 20
HDFC Bank 188,727 229,878 222,904 18 (3) 163,570 190,241 184,253 13 (3) 100,552 122,595 118,706 18 (3)
ICICI Bank 126,046 164,650 167,754 33 2 102,929 132,712 136,617 33 3 70,187 83,119 90,343 29 9
IndusInd Bank 39,852 44,953 46,015 15 2 33,266 36,804 35,205 6 (4) 13,614 19,592 18,126 33 (7)
Yes Bank 18,195 19,706 19,328 6 (2) 7,742 9,136 7,600 (2) (17) 3,675 515 3,217 (12) 524
Small f inance banks
AU 9,366 11,527 11,939 27 4 4,823 5,557 5,714 18 3 3,461 3,928 3,717 7 (5)
Equitas SFB 5,525 6,475 6,885 25 6 2,839 2,791 2,920 3 5 1,195 1,701 1,624 36 (5)
Ujjivan SFB 5,440 6,970 7,361 35 6 2,172 3,889 4,033 86 4 1,265 2,932 2,592 105 (12)
Tot al banks 1,146,790 1,410,973 1,438,563 25 2 849,606 1,047,059 934,991 10 (11) 406,910 548,197 476,316 17 (13)
Public banks 608,889 752,943 774,758 27 3 423,388 527,386 538,531 27 2 141,997 238,133 269,353 90 13
Privat e banks 537,902 658,030 663,804 23 1 426,218 519,673 396,460 (7) (24) 264,914 310,064 206,963 (22) (33)
Privat e banks (ex-Axis) 449,710 543,437 543,674 21 0 361,558 426,898 417,834 16 (2) 223,736 251,534 261,084 17 4
Diversif ied f inancials
Aut o f inance
Cholamandalam 13,679 15,983 16,733 22 5 9,120 10,797 10,578 16 (2) 6,896 6,843 7,271 5 6
Mahindra Finance 14,560 15,528 16,153 11 4 8,979 9,983 9,882 10 (1) 6,008 6,290 6,812 13 8
Shriram Transport 34,874 40,620 41,715 20 3 27,068 33,016 32,762 21 (1) 13,896 17,770 16,917 22 (5)
Housing f inance
Aavas 1,804 2,082 2,227 23 7 1,357 1,415 1,540 14 9 1,157 1,073 1,231 6 15
Aptus 1,680 2,002 2,125 26 6 1,548 1,762 1,815 17 3 1,099 1,256 1,350 23 8
HDFC 46,009 48,401 48,289 5 (0) 50,235 49,818 49,902 (1) 0 37,003 36,908 37,219 1 1
Home First 851 1,083 1,193 40 10 659 817 901 37 10 602 587 636 6 8
LIC Housing Finance 16,375 16,059 17,494 7 9 15,069 13,557 14,797 (2) 9 11,186 4,804 9,561 (15) 99
Gold loans
Muthoot Finance 17,201 17,043 18,163 6 7 12,218 12,624 13,346 9 6 9,603 9,017 10,200 6 13
M ult i-product NBFCs/ot hers
Bajaj Finance 48,034 60,222 63,852 33 6 39,671 49,519 51,142 29 3 24,195 30,719 31,400 30 2
L&T Finance Holdings 13,950 16,530 17,258 24 4 10,600 (14,910) 12,783 21 3,420 4,540 4,594 34 1
SBI Cards 9,965 11,168 12,197 22 9 11,440 12,517 13,524 18 8 3,858 5,256 6,812 77 30
Tot al NBFCs/HFCs 228,611 258,829 257,399 13 (1) 193,918 187,728 212,971 10 13 121,958 128,581 134,003 10 4
Wealt h management / AM Cs
CAMS 2,432 2,436 2,533 4 4 1,007 998 963 (4) (3) 738 736 716 (3) (3)
IIFL Wealth 4,220 4,150 3,829 (9) (8) 2,140 2,232 2,048 (4) (8) 1,678 1,801 1,541 (8) (14)
HDFC AMC 5,163 5,596 5,613 9 0 4,427 5,005 4,717 7 (6) 3,436 3,692 3,496 2 (5)
UTI AMC 2,950 2,836 2,839 (4) 0 973 1,024 1,288 32 26 539 600 926 72 54
Nippon AMC 3,380 3,538 3,561 5 1 2,344 2,664 2,487 6 (7) 1,748 2,048 1,803 3 (12)
Aditya Birla AMC 3,235 3,140 3,091 (4) (2) 2,093 2,227 1,995 (5) (10) 1,585 1,663 1,501 (5) (10)
Tot al w ealt h/asset managers 21,379 21,696 21,467 0 (1) 12,984 14,150 13,498 4 (5) 9,725 10,540 9,983 3 (5)
Tot al diversif ied f inancials 249,991 280,525 278,867 12 (1) 206,902 201,878 226,470 9 12 131,683 139,121 143,985 9 3
Grand t ot al 1,396,781 1,691,498 1,717,429 23 2 1,056,509 1,248,937 1,161,461 10 (7) 538,593 687,318 620,302 15 (10)
Notes:
(1) We have assumed PBT rather than PPOP for asset managers/wealth managers and revenue from operations rather than NII.
Banks
India Research
14
PSU banks saw better yoy earnings growth due to sharp yoy decline in provisions
Growth in PAT yoy, March fiscal year-ends
4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E
Public banks
Bank of Baroda NM 79 59 75 140
Canara Bank 65 72 90 92 105
PNB (66) (70) (63) (44) 431
State Bank of India 41 (7) 74 68 74
Union Bank 8 32 21 107 59
Old private banks
City Union Bank 88 30 52 11 9
Federal Bank 13 64 53 54 41
Karur Vysya Bank 105 110 51 56 43
New private banks
Axis Bank 54 91 70 62 (231)
Bandhan Bank 1,746 138 NM (66) (56)
DCB Bank 46 188 73 51 21
HDFC Bank 23 19 20 19 18
ICICI Bank 59 50 37 34 29
IndusInd Bank 55 64 60 69 33
Yes Bank NM 50 (31) (81) (12)
Small finance banks
AU 105 32 23 30 7
Equitas SFB 6 713 183 57 36
Ujjivan SFB (7) NM NM NM 105
Total banks 85 33 61 44 17
Public sector banks 70 9 56 66 90
Private sector banks 94 48 66 30 (22)
Notes:
(1) ‘NM’ indicates loss in the base quarter and profit in current quarter.
BANKS: STRONG AND BROAD-BASED CREDIT GROWTH ACROSS SECTORS

AND LENDERS
Loan growth has stayed healthy, but uncertainty on growth outlook has increased
As per the latest available data (March 10, 2023) for the banking system, loan growth has stayed high at
~16% yoy. Loan growth is near a decadal high. Sector-wise deployment of banking credit as of February
2023 indicates that credit to large corporates is still sluggish at ~7% yoy. Credit to MSMEs has been
growing at a robust pace, but growth has normalized a bit to ~13% yoy from a peak of 37% yoy (May
2022). Services segment growth has also jumped in the past few months to ~21% yoy, with some
support from lending to NBFC/HFC sector (up ~32% yoy). In retail credit, growth was steady at 20% yoy.
Housing credit was up 15% yoy, which is in line with the 15% yoy growth pre-Covid. Growth in auto loans
has also recovered considerably to ~23% yoy. Growth in advances secured by FDs also stood at a robust
43% yoy. Consumer durable loans also grew at a healthy rate of 39% yoy, while credit card outstanding
grew 29% yoy in February 2023.
HDFC Bank delivered 17% yoy loan growth (~6% qoq). Retail segment grew by ~20% yoy (5% qoq),
commercial/rural by 30% yoy (10% qoq) and wholesale by ~13% yoy (5% qoq). We have shown the
reported/estimated credit growth data for banks in the exhibit below. Apart from the frontline banks,
even the mid-tier and smaller banks continue to show healthy credit growth numbers. Underwriting
appetite has significantly improved in the microfinance segment as borrower incomes have recovered
to a large extent.
Banks
India Research
15
We continue to see lenders being optimistic about credit growth. After several years, we are witnessing
a period where all lenders – private banks, PSU banks, mid-tier banks, regional banks, small finance
banks, NBFCs – are quite bullish about business growth. We are not highly concerned about the increase
in credit growth yet, for a few reasons: (1) the credit growth print for the banking system is near the long-
term average of ~15-16%, (2) we have not yet seen asset bubbles in the housing/real-estate spaces yet.
One potential risk to the system could emerge from the global slowdown, but we believe it would be
limited to a credit growth slowdown, rather than resulting in another asset-quality problem for the
banking system.
Fairly healthy loan growth for most banks

Loan growth for banks, March fiscal year-ends
1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E
Advances (Rs tn)
HDFCB 8.3 9.0 9.4 9.9 10.0 10.4 10.8 11.3 11.5 12.0 12.6 13.7 14.0 14.8 15.1 16.0
ICICIBC 5.9 6.1 6.4 6.5 6.3 6.5 7.0 7.3 7.4 7.6 8.1 8.6 9.0 9.4 9.7 10.3
AXSB 5.0 5.2 5.5 5.7 5.5 5.6 5.7 6.1 6.1 6.2 6.6 7.1 7.0 7.3 7.6 8.3
IIB 1.9 2.0 2.1 2.1 2.0 2.0 2.1 2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.9
FB 1.1 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.6 1.7 1.8
YES 2.4 2.2 1.9 1.7 1.6 1.7 1.7 1.7 1.6 1.7 1.8 1.8 1.9 1.9 1.9 2.0
RBK 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7
KVB 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6
CUBK 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
DCBB 0.2 0.2 0.3 0.3 0.3 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4
BANDHAN 0.4 0.6 0.6 0.7 0.7 0.7 0.8 0.8 0.7 0.7 0.8 0.9 0.9 0.9 0.9 1.0
SIB 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7
CSBBANK 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2
AUBANK 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.5 0.5 0.5 0.6 0.6
EQUITASB 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3
UJJIVANS 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
SBI 21.3 21.5 22.0 23.3 23.0 22.9 23.7 24.5 24.3 24.4 25.8 27.3 28.2 29.5 30.6 31.3
BOB 6.8 6.8 7.0 7.4 7.4 7.2 7.5 7.5 7.1 7.3 7.7 8.2 8.4 8.7 9.2 9.4
CBK 4.3 4.5 4.4 4.3 6.5 6.5 6.7 6.8 6.8 6.9 7.3 7.4 7.8 8.2 8.5 8.8
PNB 4.2 4.3 4.3 4.7 6.6 6.5 6.6 6.7 6.6 6.7 6.9 7.3 7.4 7.7 8.0 8.2
UNBK 2.9 3.0 3.1 3.2 5.8 5.8 5.8 5.9 5.8 5.8 6.2 6.6 6.8 7.3 7.6 7.6
BoMH 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.2 1.3 1.4 1.4 1.5 1.6 1.8
Yoy growth (%)

HDFCB 17.1 19.5 19.9 21.3 20.9 15.8 15.6 14.0 14.4 15.5 16.5 20.8 21.6 23.4 19.5 16.9
ICICIBC 14.7 12.6 12.6 10.0 6.5 6.4 10.0 13.7 17.0 17.2 16.4 17.1 21.3 22.7 19.7 19.4
AXSB 12.7 14.4 15.8 15.5 10.4 8.2 3.6 7.5 12.0 10.1 16.7 15.2 14.0 17.6 14.6 16.9
IIB 28.4 20.8 19.8 10.9 2.4 2.1 (0.1) 2.8 6.4 9.7 10.4 12.4 17.7 17.8 19.3 21.3
FB 17.3 14.8 13.0 10.9 8.3 6.1 5.3 7.9 8.7 11.7 14.4 12.0 17.1 19.4 19.1 20.2
YES 10.1 (6.3) (23.7) (29.0) (30.4) (25.6) (8.8) (2.7) (0.5) 3.5 3.8 8.5 13.9 11.3 10.4 11.3
RBK 34.4 28.5 19.8 7.9 1.0 (3.3) (5.5) 1.6 1.0 (2.1) 5.0 3.3 3.3 12.4 11.2 16.0
KVB 2.7 2.6 3.9 (4.2) (1.2) 2.1 5.0 8.9 7.6 6.8 7.1 9.0 13.9 14.8 12.7 11.9
CUBK 14.2 11.9 10.4 4.6 7.2 4.6 7.9 7.1 5.4 9.2 5.2 11.2 12.5 12.3 12.0 8.4
DCBB 13.2 12.4 11.1 7.5 4.2 0.3 (0.5) 2.4 1.7 7.9 9.3 12.1 16.9 16.5 19.2 21.1
BANDHAN 35.9 88.4 78.9 68.1 68.1 22.6 26.7 22.5 7.2 1.6 4.6 15.1 21.6 21.1 14.7 11.3
SIB 13.0 11.4 8.6 2.8 3.1 1.4 (4.2) (9.9) (12.5) (8.7) (6.8) 6.5 14.4 16.6 22.1 16.6
CSBBANK 16.2 23.6 25.7 30.3
AUBANK 51.3 36.9 32.9 18.3 13.6 9.8 14.0 28.2 29.4 31.6 32.6 33.2 43.3 44.4 38.4 28.3
EQUITASB 46.8 41.7 38.4 32.5 26.2 26.1 18.9 16.6 14.5 13.4 13.3 14.9 21.6 20.0 26.6 27.3
UJJIVANS 54.9 60.1 51.8 34.1 21.9 8.0 0.2 7.0 (2.3) 4.5 20.7 20.0 38.3 44.3 33.0 27.2
SBI 13.8 9.6 7.4 6.4 7.7 6.9 7.6 5.3 5.8 6.5 8.9 11.6 15.8 20.8 18.6 14.7
BOB 63.6 57.5 56.3 57.4 8.6 5.3 6.3 1.8 (3.4) 2.1 3.6 8.9 18.0 19.0 19.7 14.7
CBK 12.0 9.0 5.0 1.0 50.3 45.4 52.3 56.2 5.2 5.8 9.3 9.8 14.5 20.0 16.7 18.6
PNB 1.6 (0.7) (2.0) 3.0 55.6 52.5 55.2 42.9 0.8 3.2 4.9 8.0 12.3 14.9 15.5 12.4
UNBK 0.2 1.7 5.4 6.1 98.0 94.4 89.5 87.6 0.5 0.3 5.8 11.8 15.7 25.2 22.6 14.8
BoMH 10.6 0.9 4.8 1.5 3.9 13.1 11.8 13.4 14.5 11.4 22.9 25.7 27.2 28.7 21.8 29.6
Qoq growth (%)

HDFCB 1.3 8.1 4.4 6.2 1.0 3.5 4.2 4.7 1.3 4.5 5.2 8.6 1.9 6.1 1.8 6.2
ICICIBC 1.0 3.5 3.6 1.5 (2.2) 3.4 7.1 5.0 0.7 3.6 6.4 5.5 4.3 4.8 3.8 5.3
AXSB 0.5 4.9 5.5 3.9 (4.0) 2.9 0.9 7.8 0.1 1.1 6.9 6.4 (0.9) 4.2 4.3 8.6
IIB 3.8 1.9 5.2 (0.3) (4.2) 1.6 2.9 2.6 (0.9) 4.8 3.5 4.6 3.7 4.9 4.9 6.3
FB 1.6 3.4 2.9 2.6 (0.8) 1.3 2.1 5.1 (0.0) 4.1 4.6 2.8 4.6 6.2 4.3 3.8
YES (2.2) (5.0) (17.1) (7.9) (4.0) 1.5 1.7 (1.7) (1.9) 5.6 2.0 2.7 2.9 3.2 1.2 3.6
RBK 4.6 3.5 2.0 (2.2) (2.2) (0.9) (0.3) 5.0 (2.7) (4.0) 7.0 3.3 (2.7) 4.4 5.9 7.8
KVB (2.8) 0.4 0.4 (2.2) 0.2 3.7 3.4 1.4 (1.0) 2.9 3.6 3.1 3.6 3.7 1.7 2.4
CUBK (2.5) 3.3 1.6 2.2 (0.1) 0.8 4.8 1.4 (1.7) 4.4 1.0 7.2 (0.5) 4.3 0.7 3.7
DCBB 2.0 3.1 2.6 (0.4) (1.1) (0.7) 1.7 2.6 (1.8) 5.3 3.0 5.2 2.5 5.0 5.4 6.9
BANDHAN 4.6 44.1 1.4 9.9 4.7 5.1 4.7 6.3 (8.4) (0.4) 7.8 17.1 (3.3) (0.7) 2.1 13.6
SIB (0.1) 0.5 2.1 0.2 0.2 (1.1) (3.5) (5.8) (2.6) 3.1 (1.5) 7.7 4.7 5.1 3.1 2.8
CSBBANK 2.1 8.1 5.6 11.8
AUBANK 1.2 7.4 7.1 1.6 (2.8) 3.7 11.2 14.2 (1.9) 5.6 12.1 14.7 5.6 6.3 7.5 6.4
EQUITASB 6.4 7.5 10.1 5.1 1.3 7.4 3.8 3.2 (0.5) 6.4 3.7 4.6 5.3 5.0 9.4 5.2
UJJIVANS 11.7 9.2 5.9 3.9 1.5 (3.3) (1.8) 11.0 (7.3) 3.4 13.4 10.3 6.9 7.9 4.6 5.5
SBI (2.3) 0.5 2.5 5.7 (1.2) (0.2) 3.2 3.4 (0.7) 0.5 5.5 6.0 3.0 4.8 3.6 2.5
BOB 44.6 0.7 2.7 5.3 (0.2) (2.4) 3.7 0.8 (5.3) 3.2 5.2 6.0 2.6 4.0 5.8 1.6
CBK 1.2 3.1 (1.8) (1.4) 50.5 (0.2) 2.9 1.1 1.4 0.3 6.2 1.6 5.7 5.2 3.3 3.3
PNB (8.0) 1.4 (0.6) 10.9 39.1 (0.5) 1.2 2.1 (1.9) 1.8 2.9 5.1 2.0 4.1 3.5 2.2
UNBK (1.1) 1.4 3.2 2.4 84.6 (0.5) 0.7 1.4 (1.1) (0.6) 6.2 7.2 2.3 7.6 4.0 0.3
BoMH (0.5) (1.7) 2.7 1.0 1.8 7.0 1.6 2.5 2.8 4.1 12.1 4.8 4.0 5.4 6.0 11.5
Banks
India Research
16
Credit growth continues to be driven by retail and services (led by credit to NBFCs), while growth in credit
to industry is still quite sluggish
Credit growth by segment yoy (%)
Industry Services Retail

32
24
16
(8)
Feb-21
Feb-22
Feb-20
Feb-23
Aug-20
Aug-21
Aug-22
May-22
May-20
May-21
Nov-20
Nov-21
Nov-22
Retail credit growth is healthy across most segments

Growth in retail loan segments yoy (%)
Retail loans Housing loans Credit card Auto loans

75
60
45
30
15
0
Nov-20
Nov-21
Nov-22
Feb-20
Feb-21
Feb-22
Feb-23
May-20
Aug-20
May-21
Aug-21
May-22
Aug-22
Banks
India Research
17
Deposit growth has lagged credit growth Credit growth has been among the best in the past few years
Growth in deposits yoy, March fiscal year-ends (%) Growth in advances yoy, March fiscal year-ends (%)
2017 2018 2019 2020 2017 2018 2019 2020
2021 2022 2023 2021 2022 2023
16.0
20
12.8 16
9.6 12
6.4 8
3.2 4
0.0 0
Sep
May
Mar
Apr
Nov
Dec
Aug
Feb
Jan
Jul
Jun
Oct
May
Dec
Nov
Mar
Jan
Jul
Jun
Apr
Aug
Feb
Sep
Oct
Source: RBI, Kotak Institutional Equities

Deposit growth continues to be a challenge

As per the latest RBI release, deposit growth continues to sustain well below credit growth at ~10% yoy.
HDFC Bank reported a stronger 21% yoy (~9% qoq) growth in deposits, although growth in CASA deposits
has slowed down meaningfully to 11% yoy (up 10% qoq). Federal Bank reported 17% yoy growth (6%
qoq), but CASA growth was poor at 4% yoy (up 1% qoq). IndusInd Bank reported 15% yoy (3% qoq) growth
in deposits with CASA ratio declining sequentially by ~180 bps to ~40%. Bank of Maharashtra reported
16% yoy growth (12% qoq) in deposits, with CASA deposits growing 7% yoy (up 14% qoq). Among the
SFBs, AUBANK reported 32% yoy (14% qoq) growth in overall deposits.
CASA ratio had been improving in the past few quarters for most banks along with robust deposit growth
overall. That trend has changed decisively as systemic excess liquidity gradually declined. Weighted
average term deposit rates on outstanding book have clearly bottomed out and increased ~90-100 bps
from trough level in the past few months. Our small sample continue to indicate high competition for
deposits in the market in the past few months as banks look for funds to support their credit growth
appetite.
Banks
India Research
18
Deposit growth stands meaningfully below credit growth

Deposit growth for banks, March fiscal year-ends
Deposits (Rs tn)
HDFCB 9.5 10.2 10.7 11.5 11.9 12.3 12.7 13.4 13.5 14.1 14.5 15.6 16.0 16.7 17.3 18.8
ICICIBC 6.6 7.0 7.2 7.7 8.0 8.3 8.7 9.3 9.3 9.8 10.2 10.6 10.5 10.9 11.2 12.0
AXSB 5.4 5.8 5.9 6.4 6.2 6.2 6.4 7.0 7.1 7.4 7.7 8.2 8.0 8.1 8.5 9.6
IIB 2.0 2.1 2.2 2.0 2.1 2.3 2.4 2.6 2.7 2.8 2.8 2.9 3.0 3.2 3.3 3.4
FB 1.3 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.7 1.8 1.8 1.8 1.9 2.0 2.1
YES 2.3 2.1 1.7 1.1 1.2 1.4 1.5 1.6 1.6 1.8 1.8 2.0 1.9 2.0 2.1 2.2
RBK 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.7 0.8 0.8 0.8 0.8 0.8
KVB 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.8 0.8
CUBK 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5
DCBB 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4
BANDHAN 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.8 0.8 1.0 0.9 1.0 1.0 1.1
SIB 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9
CSBBANK 0.2 0.2 0.2 0.2 0.2
AUBANK 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.5 0.5 0.6 0.6 0.6
EQUITASB 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
UJJIVANS 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
SBI 29.5 30.3 31.1 32.4 34.2 34.7 35.4 36.8 37.2 38.1 38.5 40.5 40.5 41.9 42.1 43.2
BOB 9.0 8.9 9.0 9.5 9.3 9.5 9.5 9.7 9.3 9.6 9.8 10.5 10.3 10.9 11.5 11.6
CBK 6.1 6.1 6.3 6.3 9.1 9.5 9.7 10.1 10.2 10.3 10.4 10.9 11.2 11.3 11.6 11.8
PNB 6.7 7.0 7.1 7.0 10.7 10.7 10.8 11.1 11.0 11.2 11.3 11.5 11.4 11.9 12.1 12.2
UNBK 4.3 4.4 4.5 4.5 8.9 8.9 8.8 9.2 9.1 9.1 9.4 10.3 9.9 10.4 10.7 11.0
BoMH 1.4 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.9 2.0 2.0 2.0 2.1 2.3
Yoy growth (%)

HDFCB 34.7 36.1 36.7 40.0 24.6 20.3 19.1 16.3 13.2 14.4 13.8 16.8 19.2 19.0 19.9 20.8
ICICIBC 28.0 27.9 26.9 31.4 21.3 19.6 22.1 21.0 15.5 17.3 16.4 14.2 13.4 11.5 10.3 13.1
AXSB 22.6 28.0 24.5 29.4 13.9 6.8 8.4 9.0 16.0 18.1 20.3 17.7 12.6 10.1 9.9 16.9
IIB 33.1 27.0 25.1 8.4 5.3 10.2 10.3 26.6 26.5 20.7 19.0 14.8 13.3 14.7 14.3 14.6
FB 38.8 38.2 37.0 38.2 16.9 12.3 11.8 13.4 9.3 9.7 8.5 5.2 8.2 10.0 14.8 17.4
YES 5.2 (12.6) (32.0) (56.4) (48.0) (35.2) (11.8) 54.7 39.1 30.1 26.0 21.0 18.3 13.2 15.9 10.6
RBK 42.9 36.4 24.8 5.7 1.5 2.7 6.8 26.5 20.6 17.2 9.6 8.0 6.4 5.0 11.0 7.4
KVB 28.9 29.2 30.3 16.7 (2.7) (1.8) (0.3) 7.1 7.2 7.0 7.7 8.5 10.5 12.5 13.9 11.6
CUBK 38.5 36.0 29.9 23.5 5.0 2.4 8.7 9.1 8.7 11.8 7.9 7.1 9.3 7.7 7.0 10.0
DCBB 35.5 33.1 29.9 28.9 2.2 (2.0) (2.9) (2.2) 4.0 10.4 11.7 16.8 14.6 16.3 22.6 21.1
BANDHAN 43.1 55.0 62.1 44.0 38.7 34.4 29.6 36.6 27.6 23.8 18.7 23.5 20.3 21.3 21.0 12.6
SIB 47.4 46.6 43.2 32.4 0.9 (0.4) (1.6) (0.4) 2.6 5.1 5.8 7.8 4.2 1.9 2.6 2.8
CSBBANK 18.9 21.4
AUBANK 30.0 22.3 19.3 14.7 34.7 21.8 24.5 37.5 38.5 44.7 49.0 46.2 47.6 49.4 38.0 12.5
EQUITASB 8.7 7.1 (0.6) (7.0) 29.1 28.7 51.2 51.9 45.0 40.3 12.7 15.6 19.3 20.1 30.8 29.7
UJJIVANS 4.6 26.0 18.8 2.2 39.0 6.1 9.0 21.8 23.7 31.2 34.0 39.3 34.9 44.8 49.1 36.6
SBI 57.2 55.0 51.9 48.3 16.0 14.4 13.6 13.6 8.8 9.8 8.8 10.1 8.7 10.0 9.5 6.7
BOB 116.0 106.2 99.7 101.8 4.3 6.7 6.5 2.2 (0.3) 0.5 2.5 8.2 10.9 13.6 17.5 11.2
CBK 58.1 48.8 49.9 46.2 48.9 55.7 55.6 61.6 12.3 8.8 7.2 7.5 9.4 9.8 11.5 8.8
PNB 61.9 61.4 63.1 53.6 59.8 53.7 52.7 57.2 2.1 4.3 4.2 3.6 3.6 7.0 7.4 6.6
UNBK 46.7 51.1 52.5 51.8 107.6 100.1 98.3 105.0 1.8 3.2 6.2 11.8 9.3 14.1 13.6 6.6
BoMH 65.3 56.2 58.5 60.6 10.1 12.2 14.1 16.0 14.0 14.5 15.2 16.3 12.3 7.9 11.7 15.7
Qoq growth (%)

HDFCB 16.5 7.0 4.5 7.5 3.7 3.4 3.4 5.0 0.8 4.5 2.8 7.8 2.9 4.3 3.6 8.7
ICICIBC 12.6 5.4 2.9 7.6 4.0 3.9 5.0 6.7 (0.7) 5.5 4.1 4.6 (1.3) 3.8 2.9 7.3
AXSB 9.3 8.0 1.3 8.2 (3.8) 1.3 2.8 8.9 2.3 3.1 4.8 6.5 (2.2) 0.9 4.6 13.3
IIB 7.6 3.3 4.6 (6.8) 4.6 8.1 4.8 7.0 4.4 3.1 3.3 3.2 3.1 4.4 3.0 3.4
FB 20.2 5.3 3.6 5.3 1.7 1.2 3.1 6.8 (1.9) 1.5 2.0 3.6 0.9 3.2 6.5 5.9
YES (6.5) (7.3) (20.9) (36.4) 11.4 15.7 7.7 11.4 0.2 8.2 4.3 7.0 (2.0) 3.5 6.8 2.1
RBK 11.2 3.3 0.1 (8.1) 6.8 4.5 4.2 8.8 1.8 1.5 (2.6) 7.3 0.3 0.2 2.9 3.8
KVB 21.9 0.8 0.1 (5.1) 1.7 1.8 1.6 1.9 1.8 1.6 2.2 2.7 3.6 3.4 3.5 0.6
CUBK 18.2 3.5 (1.6) 2.6 0.5 1.0 4.5 2.9 0.2 3.8 0.9 2.1 2.3 2.3 0.2 4.9
DCBB 22.2 2.0 1.3 2.1 (3.1) (2.2) 0.3 2.9 3.0 3.8 1.5 7.6 1.1 5.4 6.9 6.4
BANDHAN 10.2 12.6 11.6 4.0 6.2 9.1 7.7 9.5 (0.8) 5.9 3.2 14.0 (3.4) 6.8 2.9 6.0
SIB 30.4 1.5 2.3 (2.2) (0.7) 0.2 1.1 (1.0) 2.3 2.6 1.7 0.9 (1.1) 0.3 2.5 1.1
CSBBANK 8.0 8.1
AUBANK (13.0) 11.6 7.7 9.6 2.2 0.9 10.1 21.1 2.9 5.5 13.4 18.8 3.9 6.8 4.7 (3.2)
EQUITASB (21.2) 9.8 4.7 2.8 9.3 9.4 23.0 3.3 4.3 5.8 (1.2) 6.0 7.6 6.6 7.7 5.0
UJJIVANS (24.6) 27.3 5.2 1.2 2.6 (2.8) 8.1 13.1 4.1 3.0 10.5 17.5 0.9 10.6 13.8 7.7
SBI 34.9 2.9 2.6 4.2 5.5 1.5 1.9 4.1 1.1 2.4 1.0 5.3 (0.1) 3.6 0.6 2.6
BOB 91.0 (0.2) 0.2 5.6 (1.2) 2.1 0.0 1.3 (3.7) 3.0 1.9 6.9 (1.3) 5.6 5.4 1.2
CBK 42.8 (0.2) 2.6 0.0 45.4 4.3 2.6 3.9 1.1 1.0 1.0 4.1 2.9 1.4 2.6 1.6
PNB 46.7 3.5 1.8 (0.7) 52.7 (0.5) 1.2 2.2 (0.8) 1.6 1.1 1.7 (0.8) 5.0 1.4 0.9
UNBK 44.8 3.0 0.5 1.3 98.0 (0.7) (0.4) 4.7 (1.7) 0.6 2.6 10.1 (3.8) 5.1 2.1 3.4
BoMH 48.7 1.8 0.4 5.7 1.9 3.7 2.1 7.4 0.2 4.1 2.8 8.4 (3.2) (0.0) 6.4 12.3
Banks
India Research
19
Margins likely to stay flat for the quarter

The frontline banks (private and PSU) have recently hiked their MCLR rates by ~150-170 bps over the
past 12 months. With the RBI hiking repo rate by ~250 bps over the past few months, the repo-linked
book is also getting re-priced gradually. Until February 2023, lending rate on outstanding book for banks
had gone up by ~90-100 bps from trough level. At the same time, we would expect CASA ratio for the
system to have declined a bit during the quarter. Given both these developments, we believe that NIM
for banks might see a mixed performance. PSU banks which have a higher share of MCLR-linked loans
in their book might see better margin performance because the yield pass-through has been slower in
their case. Margin trajectory would also be determined by the segmental focus of PSU banks; they have
been relatively more aggressive in the corporate lending space which has seen a lot of competition
recently. We are likely to see a lot of discussion around when the NIM for the system will begin declining.
Deposit growth stands meaningfully below credit growth

Trajectory of interest rates in the banking system, March fiscal year-ends
Weighted-average lending rate (WALR) on fresh loans (%) WALR on outstanding loans (%)
PSU banks Private banks Overall Banks PSU banks Private banks Overall Banks
13.5 15.0
12.0 13.5
10.5 12.0
9.0 10.5
7.5 9.0
6.0 7.5
Aug-14
Feb-19
Aug-20
Feb-22
Feb-15
Aug-15
Feb-16
Aug-17
Aug-16
Feb-17
Feb-18
Aug-18
Aug-19
Feb-20
Feb-21
Aug-21
Aug-22
Feb-23
Feb-15
Feb-16
Feb-17
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
Feb-23
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Aug-20
Aug-21
Aug-22
Weight ed-average t erm deposit rat es (WATDR, % ) Spread bet w een WATDR and out st anding WALR (% )
Repo (month end) Overall Banks PSU banks Private banks PSU banks Private banks Overall Banks
10.0 5.0
8.5 4.5
7.0 4.0
5.5 3.5
4.0 3.0
2.5 2.5
Feb-15
Feb-16
Feb-17
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
Feb-23
Aug-14
Aug-17
Aug-20
Aug-15
Aug-16
Aug-18
Aug-19
Aug-21
Aug-22
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Aug-20
Aug-21
Aug-22
Feb-19
Feb-22
Feb-15
Feb-16
Feb-17
Feb-18
Feb-20
Feb-21
Feb-23
Banks
India Research
20
Healthy NII growth across the board for most banks

Growth in NII yoy, March fiscal year-ends (%)
4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E

Public banks
Bank of Baroda 21.2 12.0 34.5 26.5 28.1
Canara Bank 24.9 10.2 18.5 23.8 30.5
PNB 5.0 4.3 30.2 17.6 27.6
State Bank of India 15.3 12.9 12.8 24.1 24.5
Union Bank 25.3 8.1 21.6 20.3 34.8
Old private banks
City Union Bank 16.8 17.3 18.7 13.4 11.9
Federal Bank 7.4 13.1 19.1 27.1 27.4
Karur Vysya Bank 15.9 16.9 20.7 29.4 27.1
New private banks
Axis Bank 16.7 20.9 31.1 32.4 36.2
Bandhan Bank 44.6 18.9 13.3 (2.1) (10.2)
DCB 22.3 21.1 27.2 29.3 21.6
HDFC Bank 10.2 14.5 18.9 24.6 18.1
ICICI Bank 20.8 20.8 26.5 34.6 33.1
IndusInd Bank 12.7 15.8 17.6 18.5 15.5
Yes Bank 84.4 32.0 31.7 11.7 6.2
Small finance banks
AU SFB 42.8 34.8 43.8 40.5 27.5
Equitas SFB 23.2 25.9 26.0 19.7 24.6
Ujjivan SFB 47.8 56.0 69.5 53.6 35.3
Total 17.3 14.4 21.2 24.8 25.4
Public banks 16.8 10.7 19.2 23.1 27.2
Private banks 17.9 18.7 23.7 26.8 23.4
CD rates have jumped swiftly, while term deposit rates have Banking system liquidity surplus has diminished
been relatively more stable Liquidity in banking system (Rs bn)
SBI term deposit rate (1-year tenor) and CD rate (12M Others
tenor) (%) SDF
O/N Repo
CD rate (12M, % ) SBI 1-year TD rate Variable rate/Term Repo
Total liquidity deficit
12.5 4000
2000
10.0
0
-2000
7.5
-4000
5.0 -6000
-8000
2.5 -10000
Jun-20
Jun-21
Jun-22
Dec-20
Dec-21
Dec-22
Mar-21
Mar-22
Mar-23
Mar-20
Sep-20
Sep-21
Sep-22
-
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Banks
India Research
21
MCLR rates have gone up by ~150 bps for SBI in the past 12 months
SBI MCLR interest rates across tenors (%)
Mar-19 Mar-20 Mar-21 Mar-22 Jun-22 Sep-22 Dec-22 Jan-23 Feb-23 Mar-23
Overnight 8.20 7.45 6.65 6.65 7.05 7.35 7.85 7.85 7.95 7.95
One month 8.20 7.45 6.65 6.65 7.05 7.35 8.00 8.00 8.10 8.10
Three month 8.25 7.50 6.65 6.65 7.05 7.35 8.00 8.00 8.10 8.10
Six month 8.40 7.70 6.95 6.95 7.35 7.65 8.30 8.30 8.40 8.40
One year 8.55 7.75 7.00 7.00 7.40 7.70 8.30 8.40 8.50 8.50
Two years 8.65 7.95 7.20 7.20 7.60 7.90 8.50 8.50 8.60 8.60
Three years 8.75 8.05 7.30 7.30 7.70 8.00 8.60 8.60 8.70 8.70
Treasury income performance to be mixed

Growth in treasury income, March fiscal year-ends (%)
Income from treasury (Rs mn) Income from treasury (% of PBT) PBT (Rs mn)
4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E
Public banks
Bank of Baroda (6,830) (7,730) (2,390) 2,880 2,240 (36) (27) (5) 5 4 29,763 18,988 28,427 44,035 58,283 58,076
Canara Bank 5,230 8,890 4,670 3,860 4,580 21 30 14 10 10 22,028 24,933 29,162 32,687 38,309 44,894
PNB 120 (8,360) 20 (1,070) 7,410 3 (142) 0 (11) 55 17,228 4,133 5,890 6,608 10,026 13,579
State Bank of India 1,780 (65,490) 4,570 29,380 1,540 1 (78) 3 15 1 115,477 124,794 83,602 180,809 194,587 205,347
Union Bank 8,350 2,700 1,700 1,680 1,620 44 12 7 5 5 25,486 19,020 21,664 25,003 35,832 33,073
Old private banks
City Union Bank 502 209 455 353 183 19 7 13 13 6 2,461 2,690 2,951 3,515 2,728 2,961
Federal Bank 110 80 230 70 20 2 1 2 1 0 7,003 7,230 8,067 9,444 10,755 10,266
New private banks
Axis Bank 2,310 (6,670) (860) 4,280 250 4 (12) (1) 5 NM 48,267 54,788 55,276 71,664 78,398 (33,948)
DCB Bank 30 (50) 37 50 63 3 (3) 3 3 4 888 1,019 1,532 1,311 1,516 1,534
HDFC Bank (403) (13,117) (2,531) 2,614 3,034 (0) (11) (2) 2 2 137,820 130,447 121,801 141,520 162,176 157,153
ICICI Bank 1,290 360 (850) 360 2,130 1 0 (1) 0 2 81,410 92,240 91,651 100,358 110,138 116,392
IndusInd Bank 2,590 1,460 1,390 1,353 797 14 7 6 5 3 15,511 18,650 21,427 23,786 26,157 24,121
Yes Bank (260) (370) 30 1,370 220 (5) (9) 1 199 5 3,560 5,032 4,151 2,076 689 4,370
Total 14,819 (88,088) 6,471 47,180 24,087 3 (19) 1 6 4 506,901 503,961 475,602 642,816 729,592 637,817
Public banks 8,650 (69,990) 8,570 36,730 17,390 5 (41) 3 11 5 209,981 191,867 168,745 289,142 337,036 354,969
Private banks 6,169 (18,098) (2,099) 10,450 6,697 2 (6) (1) 3 2 296,920 312,094 306,857 353,674 392,556 282,849
G-sec yields have increased over the past couple of years

Yield on 1-year G-Sec (%)
GIND1YR Index
12.0
10.0
8.0
6.0
4.0
2.0
Apr-12
Apr-19
Apr-22
Apr-23
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-20
Apr-21
Banks
India Research
22
Asset quality: expect another strong quarter

We expect banks to report healthy asset quality numbers for another quarter in 4QFY23. Corporate asset
quality continues to be pristine. As the appetite for lenders to lend has improved, it also tends to translate
into availability of funding for borrowers across the quality curve.
Credit quality seems to have improved as upgrades by rating agencies have outnumbered downgrades
meaningfully in the last few months. On the other hand, retail and MSME portfolios have been largely
cleansed during the multiple crises that the sector has experienced over the past few years.
Management is likely to maintain optimism on the recovery environment as recoveries/upgradations will
continue to surpass slippages. For most banks, the restructured book has seen significant seasoning
and should see fewer slippages hereon.
NACH bounce rates data for banks indicate that situation keeps improving with every passing month.
Bounce rates currently stand below pre-Covid level. We have seen the banking system report sequentially
lower slippage ratios and credit costs and that trend should continue going forward. Some of the PSU
banks with high net NPL ratios are likely to see relatively higher provisions than others in order to improve
provision coverage. Most of the SFBs focused on the under-served segments of the population have
already seen meaningful amount of slippages and credit costs in the past and should see low credit cost
in this quarter on the back of provision reversals driven by high recoveries/upgrades.
Cheque bounce rates continue to be fairly low

Bounce rates on NACH debit transactions (%)
Bounce (% ) by volume Bounce (% ) by value
50
40
30
20
10
-
Aug-16
Aug-19
Aug-22
Aug-17
Aug-18
Aug-20
Aug-21
May-18
May-21
Feb-16
May-16
May-17
Feb-19
May-19
May-20
May-22
Feb-23
Feb-17
Feb-18
Feb-20
Feb-21
Feb-22
Nov-17
Nov-20
Nov-16
Nov-18
Nov-19
Nov-21
Nov-22
Source: NPCI, Kotak Institutional Equities
Banks
India Research
23
Most banks continue to carry healthy provision coverage

Calculated provision coverage ratio, March fiscal year-ends (%)
Ex technical write-off Including technical write-off
3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23
Public banks
BoB 70.6 75.3 75.9 79.1 78.8 86.0 88.7 89.4 91.7 92.3
Canara 65.2 66.5 66.2 67.1 68.1 83.3 84.2 84.5 85.4 86.3
PNB 65.2 62.2 64.8 66.3 68.5 81.9 81.6 83.0 84.0 85.2
SBI 71.2 75.0 75.1 77.9 76.1 88.3 90.2 90.1 91.5 91.5
Union 67.5 69.5 69.9 70.6 74.6 82.8 83.6 84.8 86.6 88.5
Old private banks
City Union Bank 35.2 38.4 39.0 39.4 43.5 62.0 64.0 64.0 66.0 67.0
Federal Bank 66.6 66.3 65.8 68.7 70.4 65.8 65.5 65.0 67.4 69.2
Karur Vysya Bank 65.1 63.3 64.7 66.7 67.1 78.8 80.3 82.7 86.9 90.9
New private banks
Axis Bank 72.0 74.7 77.3 79.9 80.8
Bandhan 74.4 75.5 74.9 75.5 75.4
DCB 48.0 55.6 57.8 61.3 63.0
HDFC Bank 70.8 72.7 72.9 73.3 73.2
ICICI Bank 80.2 79.5 79.9 81.3 82.6
Yes 67.5 70.7 72.0 74.7 49.4
IndusInd Bank 71.7 72.3 72.0 71.5 70.6
Small finance banks
AU SFB 50.8 75.0 71.7 71.1 72.1
Equitas SFB 46.8 42.7 48.5 50.5 50.8
Ujjivan SFB 84.4 92.2 98.4 99.2 98.7
NPL ratios have been on a declining trend over the past few quarters
Gross and net NPLs, March fiscal year-ends (%)
Gross NPL (Rs bn) Gross NPLs (%) Net NPLs (Rs bn) Net NPLs (%)
3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23
Public banks
BoB 560 541 526 464 419 7.3 6.6 6.3 5.3 4.5 165 134 127 97 89 2.3 1.7 1.6 1.2 1.0
Canara 569 557 547 525 501 7.8 7.5 7.0 6.4 5.9 198 187 185 173 160 2.9 2.7 2.5 2.2 2.0
PNB 973 924 902 870 836 12.9 11.8 11.3 10.5 9.8 339 349 317 293 264 4.9 4.8 4.3 3.8 3.3
SBI 1,200 1,120 1,133 1,068 983 4.5 4.0 3.9 3.5 3.1 345 280 283 236 235 1.3 1.0 1.0 0.8 0.8
Union 778 796 745 654 638 11.6 11.1 10.2 8.5 7.9 253 243 224 192 162 4.1 3.7 3.3 2.6 2.1
Old private
CUBK 20 19 19 19 20 5.2 4.7 4.7 4.4 4.6 13 12 12 11 11 3.4 3.0 2.9 2.7 2.7
Federal 44 41 42 40 41 3.1 2.8 2.7 2.5 2.4 15 14 14 13 12 1.1 1.0 0.9 0.8 0.7
KVB 39 34 31 25 17 7.0 6.0 5.2 4.0 2.7 14 13 11 8 6 2.6 2.3 1.9 1.4 0.9
New private
Axis 233 218 210 199 200 3.2 2.8 2.8 2.5 2.4 65 55 48 40 38 0.9 0.7 0.6 0.5 0.5
Bandhan 94 64 70 69 70 10.8 6.5 7.3 7.2 7.2 24 16 17 17 17 3.0 1.7 1.9 1.9 1.9
DCB 13 13 13 12 12 4.7 4.3 4.2 3.9 3.6 7 6 5 5 5 2.5 2.0 1.8 1.5 1.4
HDFC Bank 160 161 180 183 188 1.3 1.2 1.3 1.2 1.2 47 44 49 49 50 0.4 0.3 0.4 0.3 0.3
ICICI 371 339 332 326 325 4.1 3.6 3.4 3.2 3.1 73 70 67 61 57 0.9 0.8 0.7 0.6 0.6
IndusInd 58 55 59 56 57 2.5 2.3 2.4 2.1 2.1 16 15 17 16 17 0.7 0.6 0.7 0.6 0.6
Yes 287 280 277 274 39 14.7 13.9 13.5 12.9 2.0 93 82 78 69 20 5.3 4.5 4.2 3.6 1.0
Small finance banks
AU SFB 11 9 10 10 10 2.6 2.0 2.0 1.9 1.8 5 2 3 3 3 1.3 0.5 0.6 0.6 0.5
Equitas SFB 9 8 9 9 9 4.6 4.2 4.1 3.9 3.6 5 5 4 4 4 2.5 2.5 2.2 2.0 1.8
Ujjivan SFB 16 13 11 9 7 9.8 7.3 6.5 5.1 3.6 3 1 0 0 0 1.7 0.6 0.1 0.0 0.1
Total 5,434 5,194 5,116 4,811 4,372 5.8 5.3 5.1 4.5 4.0 1,679 1,526 1,460 1,287 1,148 1.9 1.6 1.5 1.3 1.1
Public banks 4,080 3,938 3,853 3,581 3,377 7.3 6.7 6.4 5.7 5.1 1,300 1,192 1,136 991 909 2.4 2.1 2.0 1.6 1.4
Private banks 1,354 1,256 1,263 1,230 995 3.6 3.1 3.1 2.9 2.3 380 334 325 296 239 1.1 0.9 0.8 0.7 0.6
Banks
India Research
24
Provisions are likely to be low or modest in 4QFY23E

Credit cost of banks (loan loss provisions to advances ratio), March fiscal year-ends (%)
4QFY22 1QFY23 2QFY23 3QFY23 4QFY23
Public banks
Bank of Baroda 1.8 0.8 0.7 1.0 0.9
Canara Bank 2.0 1.9 1.8 1.5 1.3
Punjab National Bank 2.7 2.6 2.5 2.4 2.7
State Bank of India 1.1 0.6 0.4 0.8 0.5
Union Bank 2.2 1.9 2.2 1.6 1.9
Old private banks
City Union Bank 1.7 1.5 1.0 2.1 1.5
Federal Bank 0.2 0.4 0.7 0.5 0.3
Karur Vysya Bank 1.0 1.0 1.5 2.3 0.8
New private banks
Axis Bank 0.6 0.2 0.3 0.8 0.6
Bandhan 0.0 2.8 5.7 6.7 2.0
DCB 0.9 0.5 0.4 0.5 0.4
HDFC Bank 1.0 0.9 0.9 0.7 0.7
ICICI Bank 0.5 0.5 0.7 0.9 0.8
IndusInd Bank 2.4 2.0 1.8 1.6 1.6
Yes Bank 0.6 0.4 1.2 1.7 0.6
Small finance banks
AU 0.8 0.3 0.3 0.2 0.4
Equitas SFB 1.9 0.7 0.8 0.6 0.9
Ujjivan SFB 2.3 0.9 1.0 0.7 1.1
Public banks are trading well below their valuation peak Private banks have also seen a drop in valuation multiples
Public banks – one-year forward PBR (X) Private banks – one-year forward PBR and PER (X)
PABR PABR PER (RHS)

2.5 3.5 50
2.0 2.8 40
1.5 2.1 30
1.0 1.4 20
0.5
0.7 10
-
0.0 -
2003
2005
2006
2008
2010
2012
2014
2015
2017
2019
2021
2023
2004
2007
2009
2011
2013
2016
2018
2020
2022
2004
2006
2009
2011
2013
2015
2017
2019
2021
2023
2003
2005
2007
2008
2010
2012
2014
2016
2018
2020
2022
Source: RBI, Kotak Institutional Equities Source: RBI, Kotak Institutional Equities
Banks
India Research
25
Valuation premium of private banks over PSU banks has declined substantially
PBR (adj.) of private banks relative to public banks (X)
4.0
3.2
2.4
1.6
0.8
0.0
Apr-08
Apr-17
Apr-18
Apr-19
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-20
Apr-21
Apr-22
Apr-23
PSU banks yielded higher RoE than private banks between 2003 PSU bank return ratios have returned to positive territory
and 2011
RoA - public and private banks, March fiscal year-
RoE – public and private banks, March fiscal year- ends, 2001 - 2022 (%)
ends, 2001 - 2022 (%)
1.8 PSU banks Private sector banks Combined
24 PSU banks Private sector banks Combined
1.2
16
0.6
8
0.0
0
(0.6)
(8)
(1.2)
2002
2003
2005
2006
2008
2009
2011
2012
2014
2015
2017
2018
2020
2021
2001
2004
2007
2010
2013
2016
2019
2022
(16)
2002
2003
2005
2008
2010
2011
2013
2016
2018
2021
2001
2004
2006
2007
2009
2012
2014
2015
2017
2019
2020
2022

Banks
India Research
26
Non-banks had a blast

NBFCs have used superlatives like ‘peak’ and ‘highest ever’ in their post quarter business releases.
4QFY23 was probably the best quarter for business growth of NBFCs. Market sources suggest
stellar disbursements in most below-prime segments during last two months of the quarter. While
the overall year has been strong, seasonal trends suggest that activity typically builds up in 4Q.
Strong collections in March will likely lead to further improvement in asset quality performance,
closer to pre-Covid peaks. Prime housing loan (HDFC and LICHF) was likely the only segment with
soft demand, following sharp rate hikes. Rise in gold prices will provide boost to otherwise weak
gold loan NBFCs. While transmission of rate hikes is now getting clearly reflected in borrowings
costs, trends in NIM may be divergent depending on timing of lending rate hikes. We expect
growth guidance for FY2024E to remain strong. The Street’s discussion likely shifts to (1) further
rate hikes by NBFCs, (2) trends in NIM and (3) impact of rate hike on credit demand.
Strong growth in core earnings

We expect non-banks under coverage to deliver -1% to +48% yoy growth in core PBT versus -15% to +56%
growth reported in 3QFY23. Key drivers (1) yoy loan growth of 16-35% (excluding LTFH’s wholesale book
and Muthoot Finance, (2) yoy compression in margins by 6-94 bps (excluding impact of LTFH’s shift to
retail business and one-off’s in Bajaj Finance’s base period). Credit costs will likely remain low following
strong collection efficiency.
Loan growth at peak

We expect NBFCs to deliver 4-35% loan growth (6-35% in 3QFY23) despite a stronger base of 4QFY22.
Sequential loan growth will likely remain high at 3-8%. Market sources suggest peak/record
disbursements in the month of March across most segments. None of the players are sounding of any
caution on asset quality and continue to invest in growth.
Bajaj Finance has reported 7% qoq loan growth (6% qoq in 3QFY23), translating to 29% core AUM growth
for the year; in line with management guidance, there is no seasonal trend anymore in the business. We
expect fast growth in consumer and unsecured loans to continue to drive loan growth and NII, even as
company goes a bit slow in the housing segment, especially post recent rate hikes.
Trends in vehicles sales have been mixed, addition of new segments (within vehicle loans, used vehicles,
dealer finance or SME loans) has augmented overall disbursements. Housing loans, in the prime
segments, is probably the only segment with some weakness likely reflecting the impact of sharp rate
hikes. Exhibit 31 shows that HDFC and LICHF passed on 225 bps of rate hikes till December 2022, as
compared to 50-160 bps by most other peers. This has likely led to some slowdown, delay in offtake by
large buyers in the prime segments. Notably, HDFC and LICHF reported +2% and -9% yoy disbursements
growth in 3QFY23 as well; we expect some pick-up due to seasonal strength, but overall momentum
should remain weak in this segment.
We expect affordable housing finance to continue maintain a strong momentum. A low base, steady
investments in expansion and benign credit cost - all of this has helped deliver 25-35% yoy loan growth
for these companies. Aavas reported disbursements of Rs15 bn (up 17% in 4QFY23).
A 9% rise in gold price will likely support loan growth of gold loan NBFCs. Competition from banks does
not nevertheless seem to recede. We model 5% qoq loan growth for Muthoot compared to -2.3% to +1%
in the preceding three quarters.
Divergent trends in NIM

Exhibit 32 shows divergent trends in margins of NBFCs under coverage. We expect borrowings cost to
report meaningfully rise in 4Q, reflecting the impact of MCLR rise and increase in incremental funding
costs. With 35 to 80 bps rise in lending rates in 3QFY23, yield will likely expand as well, thus partially
offsetting cost of funds. Incremental trends in margins will likely be an interplay of (1) further repo and
MLCR rate hikes and (2) NBFC’s policy on pass on rate hike to their borrowers. Heightened competition
and strong asset quality performance will likely prompt NBFCs to focus on growth over margins, in our
view. Incrementally, likely compression in NIM may temper NII growth even as loan growth will likely hold
on.
Banks
India Research
27
We expect divergent trends in PAT growth due to interplay of strong loan growth and margin compression
Quarterly trends in yoy PAT growth, March fiscal year-ends, 4QFY21-4QFY23E (%)
Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS
4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E
Affordable housing
Aavas Financiers 46 20 39 4 32 49 16 20 6
Aptus 29 31 47 45 62 45 24 23
Home First 337 (9) 213 189 92 46 21 28 6
Other NBFCs and HFCs
Bajaj Finance 42 4 53 85 80 159 88 45 30
Cholamandalam 470 (24) 40 28 184 73 (7) 31 (4)
Five Star NA NA NA NA NA 40 22 28 30
HDFC 42 (2) 32 11 16 22 18 13 1
LICHF (5) (81) (69) 6 180 503 23 (37) (15)
L&T Finance (consol) (31) 20 (15) 12 28 47 81 39 34
Mahindra Finance (32) (1,081) 237 NM 301 NM (56) (30) 13
Muthoot Finance 22 16 11 4 (4) (17) (13) (12) 6
Shriram Finance 175 (26) 12 (3) 34 254 48 83 21
We expect divergent trends in pre-tax earnings

Quarterly trends in yoy PBT growth, March fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aptus 29 31 46 47 60 43 28 19
Home First 283 (10) 220 179 49 39 23 28 29
Bajaj Finance 43 4 54 84 79 156 87 43 29
Cholamandalam 466 (24) 40 28 187 73 (7) 31 (4)
HDFC 46 8 32 8 18 18 16 14 4
LICHF (57) (81) (69) (1) 273 491 23 (38) (10)
L&T Finance (lending ex-defocused)
64 27 (8) 4 (46) 16 107 (497) 42
Mahindra Finance (41) (1,095) 236 NM 387 NM (56) (30) 9
Muthoot Finance 23 16 12 3 (4) (17) (13) (12) 7
Shriram Finance 142 (25) 11 (5) 33 252 48 82 28
Core earnings growth likely to remain strong for most players

Quarterly trends in yoy core PBT growth, March fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aavas Financiers 15 33 20 (7) 24 2 (2) 30 25
Aptus 35 35 58 53 56 39 24 21
Home First 43 31 44 66 59 45 52 56 48
Bajaj Finance (5) 7 6 33 26 35 37 29 32
Cholamandalam 53 55 (3) (3) 3 6 17 10 7
HDFC 15 27 13 7 13 6 11 12 (1)
LICHF 49 (5) (15) 13 12 40 (1) 3 (1)
19 11 (7) (17) (25) 1 8 9 21
Mahindra Finance 10 (28) (2) 4 (15) 28 (14) (4) 10
Muthoot Finance 25 22 21 7 (9) (22) (18) (15) 8
Shriram Finance 11 2 7 7 19 37 27 33 22
Banks
India Research
28
NBFCs have been slow in passing rate hikes to borrowers

Lending rate hikes, March fiscal year-ends, 1QFY23-3QFY23 (bps)
1QFY23 2QFY23 3QFY23 Cummulative
Repo rate 90 100 35 225
HFCs
Aavas 25 50 50 125
Aptus - - 50 50
Home First - 25 50 75
HDFC 90 100 35 225
LICHF 90 100 35 225
NBFCs
Bajaj Finance 25-40 40-50 50-70 115-160
Cholamandalam 40 40 40-80 120-160
Mahindra Finance 30-40 40 80 150-160
Shriram Finance - 25-50 - 25-50
Divergent trends in margins

Quarterly trends in NIM, March fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aavas 7.3 7.9 8.2 7.6 8.2 7.7 7.6 8.1 8.2
Aptus 12.1 11.8 12.5 13.4 13.5 13.4 13.3 13.1 13.2
Home First 7.1 7.7 7.8 7.9 8.2 8.2 8.1 8.0 8.2
Bajaj Finance 10.3 9.5 10.5 10.9 10.1 10.5 10.5 10.7 10.7
Cholamandalam 7.7 7.8 7.8 8.0 7.6 7.7 7.2 7.1 6.5
HDFC 2.9 2.9 2.7 2.6 2.7 2.6 2.6 2.6 2.6
LTFH 6.6 6.4 6.5 6.5 6.6 6.5 7.0 7.4 7.7
LIC Housing Finance 2.7 2.2 2.0 2.4 2.6 2.5 1.8 2.4 2.6
Mahindra Finance 9.0 7.0 9.1 9.6 9.0 9.1 8.2 8.2 8.1
Muthoot Finance 14.3 12.9 13.5 13.7 12.2 10.7 11.0 11.9 12.3
Shriram Finance 9.9 9.2 9.5 9.7 10.2 10.7 10.5 10.7 10.2
Yields to inch up driven by lending rate hikes of 35-80 bps in 3QFY23

Quarterly trends in yields, March fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aavas Financiers 13.6 13.8 14.0 13.6 13.9 13.5 13.4 13.9 14.2
Aptus 17.5 17.2 17.6 17.5 17.4 17.4 18.0 18.1 18.0
Home First 13.6 13.9 13.9 13.6 13.3 13.5 13.8 13.9 14.4
Bajaj Finance 16.2 15.3 16.4 16.7 15.6 15.8 16.1 16.7 17.1
Cholamandalam 14.6 14.6 14.4 14.2 13.6 13.6 13.6 14.0 13.9
HDFC 8.2 8.1 7.9 7.8 7.6 7.8 8.4 9.0 9.3
L&T Finance Holdings 13.1 13.0 13.0 13.0 13.0 12.9 13.5 14.3 15.3
LIC Housing Finance 8.7 8.3 8.0 8.3 8.4 8.3 7.8 8.8 9.3
Muthoot Finance 21.7 20.4 20.7 20.7 18.7 17.3 17.4 18.2 18.9
Shriram Finance 16.0 16.1 16.2 16.2 16.6 16.5 16.9 16.5 16.4
Banks
India Research
29
Cost of funds to inch up 30-60 bps for all players

Quarterly trends in cost of funds, March fiscal year-ends, 4QFY21-4QFY23E (%)
Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS Ind-AS
3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E
Affordable housing
Aavas Financiers 7.5 7.2 7.0 6.9 7.1 6.5 6.6 6.7 6.8 7.1
Aptus 9.9 9.0 8.8 9.2 8.6 8.1 7.7 8.0 8.3 8.7
Home First 7.8 7.3 6.9 7.1 7.2 6.6 6.7 7.2 7.2 7.6
Bajaj Finance 7.6 6.9 6.8 6.9 6.8 6.4 6.3 6.7 7.0 7.5
Cholamandalam 7.4 7.1 7.0 6.9 6.5 6.3 6.3 7.0 7.3 7.9
HDFC 6.4 6.0 5.9 5.8 5.8 5.5 5.9 6.5 7.2 7.5
LIC Housing Finance 7.5 6.7 6.9 6.8 6.7 6.5 6.5 6.8 7.2 7.6
Mahindra Finance 7.7 7.4 7.1 7.3 6.7 6.6 6.5 6.7 7.2 7.7
Muthoot Finance 8.5 8.2 8.4 8.1 7.9 7.6 7.9 7.8 8.0 8.6
Shriram Finance 9.3 9.0 9.3 9.2 8.8 8.6 7.9 8.3 8.0 8.4
We expect strong NII growth for most players

Quarterly trends in yoy NII growth, march fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aptus 33 35 47 42 45 40 29 26
Home First 24 27 45 40 45 43 44 43 40
Bajaj Finance 2 12 26 41 25 43 29 27 33
Cholamandalam 37 35 8 6 9 17 17 17 15
HDFC 14 24 14 7 14 8 13 13 5
LICHF 33 4 (6) 14 9 26 (0) 10 7
L&T Finance (lending) 8 13 5 (10) (9) (0) 13 21 24
Mahindra Finance 13 (17) 6 13 (1) 34 0 1 11
Muthoot Finance 16 18 15 6 (6) (9) (13) (10) 6
Shriram Finance 7 6 7 6 17 31 24 27 20
Loan growth to remain strong for affordable HFCs and diversified NBFCs; large HFCs a bit lower
Quarterly trends in yoy loan growth, march fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aptus 27 27 27 30 32 31 30
Home First 14 19 24 27 30 36 36 35 35
Bajaj Finance 4 15 22 25 29 28 31 27 25
Cholamandalam 16 7 4 6 10 21 25 31 33
Five Star 24 31 34
HDFC 10 8 11 12 15 17 16 13 11
LICHF 10 11 11 11 8 10 10 10 10
L&T Finance (lending) (2) (8) (10) (14) (5) 2 6 6 4
Mahindra Finance (5) (6) (6) (4) 1 6 16 21 27
Muthoot Finance 26 27 17 9 10 8 4 6 5
Shriram Finance 5 6 8 9 9 9 11 13 16
Banks
India Research
30
Loan growth to remain strong qoq for most players

Quarterly trends in qoq loan growth, march fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aptus 7.3 4.6 5.4 7.2 7.8 6.6 7.5 6.3 6.4
Home First 5.1 3.7 7.5 8.2 7.7 8.4 7.6 7.6 7.9
Bajaj Finance 5.4 4.0 5.0 8.6 8.9 3.3 7.0 5.7 7.2
Cholamandalam 1.8 (3.1) 3.2 3.9 5.8 6.5 7.0 8.9 7.2
Five Star 2.8 6.3 4.5 8.2 8.9 8.4
HDFC 3.2 0.7 4.0 3.6 5.7 2.7 2.8 1.6 3.9
LICHF 5.4 0.2 2.2 2.4 3.2 1.8 2.6 2.3 2.8
L&T Finance (lending) (5.3) (6.1) (1.5) (1.3) 4.0 1.0 2.3 (1.8) 3.0
Mahindra Finance (2.9) (1.6) 0.1 0.5 1.6 4.2 9.0 4.8 6.4
Muthoot Finance 4.4 (0.0) 4.8 (0.8) 6.2 (2.3) 1.0 0.9 5.1
Shriram Finance 2.3 1.4 2.1 3.1 2.2 1.7 3.9 4.8 4.7
Banks
India Research
31
Share of term loans in borrowing mix varies from 30% to 60% for NBFCs under coverage
Borrowing mix, March fiscal year-ends, 4QFY21-4QFY23E (% of total)
2019 2020 2021 2022 1QFY23 2QFY23 3QFY23
Aavas 36,533 53,520 63,454 79,725 82,909 85,712 91,613
Term loans 42 43 34 38 39 42 42
Assignment 28 25 24 23 23 23 22
NHB 19 14 23 22 23 21 22
NCD 11 19 19 18 16 15 14
HDFC 3,652,660 4,191,020 4,413,650 4,996,810 5,174,520 5,290,340 5,436,640
Term loans 21 25 24 28 26 27 28
Bonds/ debenture/ CPs 50 43 42 40 41 42 43
Deposits 29 32 34 32 33 31 30
LICHF 1,706,290 1,912,090 2,075,770 2,238,440 2,259,650 2,329,430 2,403,640
Bank 15 22 25 30 33 34 34
NCDs 75 65 54 53 51 52 52
Tier-II 1 1 1 1 1 1 1
Deposit 4 7 9 8 8 7 6
NHB 1 1 5 4 4 4 4
CP and others 4 4 6 4 3 2 4
L&TFH 915,070 938,940 885,560 852,010 817,780 853,430 862,320
Term loan 39 44 38 41 43 46 48
NCDs and Others 47 50 55 52 49 47 44
LOC/CC/WCL/STL NA NA NA NA NA NA NA
CP 14 6 7 7 8 7 7
Chola 505,670 550,050 637,300 691,740 739,290 793,210 893,050
Bank 49 66 61 63 60 60 56
CP 11 8 10 10 11 9 10
Debenture 21 10 15 15 17 18 18
Subordinated debt 8 8 7 7 6 6 7
Securitisation 11 8 7 5 6 7 9
Mahindra Finance 531,120 594,623 586,750 559,620 593,090 676,530 710,680
Bank loans 28 30 25 28 31 36 39
NCDs 44 35 33 37 32 33 32
FDs 11 15 16 15 13 10 8
CP/ ICD 9 0 2 2 7 7 8
Securitisation 8 15 18 14 13 12 11
Offshore borrowings 5 7 5 4 3 2
Muthoot Finance 269,223 372,264 460,196 498,701 454,267 468,095 443,046
Gold bonds 2 1 1 0 0 0 0
Listed NCDs 28 26 29 25 27 24 24
Bank loans 49 39 43 55 51 56 59
Subordinated debt 2 1 0 0 0 0 0
Others 2 24 18 17 21 19 17
Bajaj Finance 863,520 1,298,060 1,316,450 1,652,320 1,720,970 1,832,730 2,013,180
Banks 34 38 32 28 31 31 31
NCDs 38 41 44 50 46 44 47
Subordinate debt 5 4 4 3 3 3 1
Deposits 15 17 20 19 20 22 21
Banks
India Research
32
Stressed loans were down for all players in 9MFY23

Stressed loans for select NBFCs, March fiscal year-ends, 3QFY22-3QFY23 (%)
Gross stage-2 (%) Gross stage-3 (%) Restructured loans (%) Write-offs during the quarter (%) Overall stressed loans (%) YoY QoQ
3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 (bps) (bps)
Affordable housing
Aavas 3.9 3.0 2.5 2.4 2.1 1.7 1.0 1.1 1.1 1.1 1.8 1.5 1.2 1.2 1.1 0.1 0.2 0.0 0.0 0.0 5.7 4.1 3.6 3.5 3.3 (246) (23)
Aptus 10.7 8.7 4.7 5.0 4.8 1.5 1.2 1.7 1.5 1.4 1.3 1.2 1.1 1.1 1.1 (0.1) 1.0 0.0 0.0 0.1 12.1 10.9 6.5 6.5 6.3 (582) (18)
Home First 2.2 1.3 1.4 1.3 1.2 2.6 2.3 2.1 1.9 1.8 0.8 0.6 NA NA NA 0.7 0.2 0.4 0.1 0.2 5.4 3.8 3.9 3.3 3.2 (229) (15)
Bajaj Finance 3.0 2.0 1.8 1.5 1.2 1.7 1.6 1.3 1.2 1.1 0.8 0.4 0.2 0.2 0.1 3.3 1.7 2.1 1.4 1.2 8.0 5.3 5.1 4.0 3.6 (441) (39)
Cholamandalam 8.1 5.5 5.2 4.4 3.3 8.5 6.8 6.3 5.8 5.4 5.9 4.5 4.3 4.0 3.7 1.2 3.0 4.0 1.3 0.8 17.8 15.4 15.5 11.5 9.5 (828) (207)
Five Star 18.1 15.7 14.6 12.5 10.6 1.3 1.0 1.1 1.2 1.5 1.6 1.4 1.3 1.2 1.0 0.7 0.7 0.4 0.4 0.2 20.0 17.5 16.1 14.0 12.3 (773) (169)
HDFC 5.2 4.5 4.3 3.9 3.7 2.3 1.9 1.8 1.6 1.5 1.3 1.3 1.3 1.3 1.3 0.4 0.1 0.4 0.4 0.1 7.8 6.4 6.5 5.9 5.4 (246) (54)
L&TFH 5.6 NA NA NA NA NA 4.1 4.1 4.0 4.2 3.6 3.6 3.5 3.5 3.4 17.7 (3.4) 4.5 - 3.7 26.9 4.3 12.1 7.5 11.4 (1,552) 386
LIC Housing 3.8 3.1 4.0 4.0 3.9 5.0 4.6 5.0 4.9 4.8 3.0 2.9 1.2 - - (0.0) 0.1 0.0 0.3 (0.0) 11.8 10.8 10.1 9.2 8.7 (316) (52)
Mahindra Finance 17.8 14.3 11.7 9.7 6.7 11.3 7.7 8.0 6.7 7.6 6.8 6.7 5.3 4.1 3.9 3.8 7.6 3.5 3.2 2.7 32.8 29.5 23.3 19.6 17.0 (1,583) (262)
Shriram Finance 11.7 10.8 10.8 10.1 9.3 8.2 6.9 6.3 6.3 6.3 NA NA NA NA NA 0.4 1.1 0.4 0.3 0.2 20.3 18.8 17.5 16.7 15.7 (457) (98)
Notes:
(1) We have only captured restructured loans which are not already clubbed in stage-2.
(2) Stressed loans: Gross stage-2+gross stage-2+restrcutured loans (excluding those clubbed under stage-2)+write-offs during the quarter.
(3) Write-offs are annualized.
ECL coverage has moderated for most players as the excess Covid provisions are run down
ECL coverage ratio for NBFC/HFCs, March fiscal year-ends, 3QFY20-3QFY23 (%)
3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23
Housing Finance companies
Aavas 0.30 0.34 0.42 0.51 0.69 0.65 0.85 0.85 0.93 0.71 0.67 0.64 0.64
Bajaj Housing 0.19 0.43 0.57 0.78 1.06 1.04 0.97 0.96 0.99 1.00 0.92 0.86 0.84
HDFC 2.25 2.44 2.64 2.60 2.56 2.62 2.64 2.56 2.45 2.38 2.30 2.21 2.21
LIC Housing Finance 1.24 1.24 1.27 1.30 1.34 1.71 2.03 2.25 2.33 2.33 2.40 2.49 2.71
PNB Housing Finance 1.28 2.61 2.70 2.99 3.47 4.09 4.47 4.77 4.39 4.42 3.52 3.74 4.36
Auto financiers
Cholamandalam 1.85 2.68 2.41 2.64 3.09 3.58 4.37 4.09 4.00 3.05 2.28 2.13 1.93
Poonawalla Fincorp 4.18 4.39 4.48 4.79 5.34 9.46 7.00 5.40 4.90 4.20 4.57 1.88 1.88
Mahindra Finance 3.74 4.51 5.69 4.97 6.61 7.20 11.28 10.07 8.85 6.94 6.77 5.74 5.04
Shriram Transport 5.29 5.77 6.51 6.58 6.75 6.76 7.60 7.64 7.90 7.19 7.23 7.18 7.27
Gold loan companies
Muthoot 1.86 1.30 1.34 1.20 1.23 1.19 1.24 1.30 1.46 1.24 1.16 1.12 1.20
Multi-product companies
Bajaj Finance (consol) 1.90 2.54 3.60 4.43 3.51 2.82 3.21 2.87 2.50 2.25 2.03 1.91 1.88
L&TFH NA 4.09 5.09 5.62 5.36 4.96 6.27 5.41 5.41 4.07 4.83 NA NA
SCUF 6.66 7.13 7.58 7.77 7.35 6.94 7.14 6.94 6.59 6.28 6.05 5.83 5.73
Credit cost to remain muted for most players in 4QFY23E

Quarterly trends in credit cost, March fiscal year-ends, 4QFY21-4QFY23E (%)
Affordable housing
Aavas Financiers 0.3 0.7 0.2 0.4 (0.4) 0.0 0.1 0.1 (0.1)
Aptus 0.3 0.7 0.7 0.8 0.8 0.7 0.6 0.5 0.6
Home First 0.8 1.2 0.3 0.5 0.2 0.3 0.3 0.4 0.5
Bajaj Finance 3.3 4.5 3.2 2.4 1.5 1.5 1.4 1.5 1.5
Cholamandalam 3.2 3.2 0.3 1.5 (0.1) 1.5 1.3 0.7 0.3
HDFC 0.5 0.5 0.3 0.3 0.3 0.3 0.3 0.2 0.1
LICHF 1.7 1.4 1.1 0.6 0.3 0.5 0.9 1.1 0.4
L&T Finance (lending ex-defocused) 2.3 3.6 3.6 2.8 2.8 3.5 2.5 2.4 2.8
Mahindra Finance 5.4 17.6 (2.3) (0.9) 0.4 3.9 1.1 0.8 0.7
Muthoot Finance 0.1 0.3 0.6 0.6 (0.5) (0.4) (0.1) 0.4 (0.3)
Shriram Finance 2.4 4.7 2.3 3.1 2.4 2.5 2.1 2.9 2.2
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Quarterly trends in cost-to-AAUM, March fiscal year-ends, 4QFY21-4QFY23E (%)

Affordable housing
Aptus 2.9 2.7 2.9 2.3 2.4 2.4 3.1 2.7 2.9
Home First 3.1 2.7 2.9 2.7 2.8 2.8 2.9 2.7 2.7
Bajaj Finance 4.3 3.5 5.0 4.8 4.4 4.7 4.8 4.6 4.6
Cholamandalam 3.0 2.2 3.0 3.0 3.5 2.9 3.1 3.3 3.1
Five Star NA NA NA 6.2 7.8 6.8 7.2 8.0 7.8
HDFC 0.4 0.4 0.4 0.3 0.3 0.4 0.3 0.3 0.3
LICHF 0.4 0.5 0.4 0.3 0.4 0.3 0.4 0.4 0.5
1.9 2.3 2.5 2.6 2.7 2.8 3.0 3.2 3.3
Muthoot Finance 4.0 3.0 3.3 3.3 3.8 3.8 3.2 3.4 3.5
Shriram Finance 2.6 2.2 2.5 2.5 2.6 2.7 2.9 2.8 2.8
Change in estimates of PAT, March fiscal year-ends, 2023-2025E (%)

New estimates Old estimates % change % yoy
2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Affordable housing
Aavas Financiers 4,265 4,858 5,834 4,182 4,884 5,752 2 (1) 1 23 14 20
Aptus 5,027 5,617 6,506 4,837 5,553 6,458 4 1 1 4 12 16
Home First 2,279 2,546 2,993 2,188 2,533 3,040 4 1 (2) 31 12 18
Bajaj Finance 115,889 138,938 170,611 115,014 139,113 166,379 1 (0) 3 (17) 20 23
Cholamandalam 24,767 28,013 35,050 24,420 28,885 36,562 1 (3) (4) (34) 13 25
Five Star 5,878 7,015 8,814 5,907 7,194 8,999 (0) (2) (2) (11) 19 26
HDFC 155,358 172,771 197,275 150,871 173,549 199,639 3 (0) (1) (2) 11 14
L&T Finance Holdings 15,814 17,952 21,354 16,093 20,047 23,313 (2) (10) (8) (65) 14 19
LIC Housing Finance 26,668 37,245 40,533 26,243 37,686 41,304 2 (1) (2) (44) 40 9
Mahindra Finance 19,814 22,319 28,824 19,466 22,755 28,912 2 (2) (0) (46) 13 29
Muthoot Finance 35,908 44,556 52,465 35,908 44,556 52,465 - - - (33) 24 18
Shriram Finance 63,576 72,008 84,429 63,576 72,008 84,429 - - - (11) 13 17
Change in estimates of core PBT, March fiscal year-ends, 2023-2025E (Rs mn)
2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Affordable housing
Aavas Financiers 3,923 4,741 5,968 3,886 4,693 5,852 1 1 2 13 21 26
Aptus 6,436 7,444 8,721 6,323 7,359 8,657 2 1 1 33 16 17
Home First 2,588 2,948 3,620 2,393 2,826 3,573 8 4 1 48 14 23
Bajaj Finance 184,001 224,988 281,188 182,808 224,694 274,635 1 0 2 32 22 25
Cholamandalam 41,095 50,536 63,877 41,659 51,932 65,525 (1) (3) (3) 9 23 26
Five Star 8,028 10,022 12,619 8,213 10,292 12,963 (2) (3) (3) 21 25 26
HDFC 168,784 183,026 215,143 167,886 185,278 219,049 1 (1) (2) 7 8 18
L&T Finance Holdings 46,827 52,797 63,447 45,899 54,496 64,526 2 (3) (2) 3 13 20
LIC Housing Finance 52,182 60,473 65,813 51,661 61,148 66,904 1 (1) (2) 9 16 9
Mahindra Finance 37,859 47,267 60,900 37,850 47,794 61,107 0 (1) (0) 3 25 29
Muthoot Finance 47,046 59,179 71,229 47,046 59,179 71,229 - - - (12) 26 20
Shriram Finance 118,276 138,906 162,838 118,276 138,906 162,838 - - - 65 17 17
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Change in estimates of AUM, March fiscal year-ends, 2023-2025E (Rs mn)

2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Affordable housing
Aavas Financiers 141,001 173,590 213,643 137,630 168,640 206,911 2 3 3 24 23 23
Aptus 67,077 86,732 112,169 66,650 86,202 111,498 1 1 1 30 29 29
Home First 72,815 95,836 124,941 71,853 94,494 123,144 1 1 1 35 32 30
Bajaj Finance 2,473,499 3,059,012 3,780,370 2,452,695 3,033,669 3,749,494 1 1 1 25 24 24
Cholamandalam 1,023,001 1,298,214 1,602,701 1,006,233 1,238,793 1,523,766 2 5 5 33 27 23
Five Star 67,663 87,384 112,510 67,456 87,246 112,418 0 0 0 34 29 29
HDFC 6,330,708 7,204,652 8,279,744 6,415,799 7,363,774 8,506,617 (1) (2) (3) 14 14 15
L&T Finance Holdings 906,116 977,347 1,064,775 879,236 941,639 1,017,559 3 4 5 4 8 9
LIC Housing Finance 2,685,413 2,964,717 3,307,758 2,686,479 2,996,357 3,369,491 (0) (1) (2) 9 10 12
Mahindra Finance 822,973 997,980 1,204,287 808,261 969,938 1,169,973 2 3 3 27 21 21
Muthoot Finance 606,766 681,706 781,389 606,766 681,706 781,389 - - - 5 12 15
Shriram Finance 1,859,074 2,154,468 2,499,384 1,859,074 2,154,468 2,499,384 - - - 46 16 16
Change in estimates of NIM, March fiscal year-ends, 2023-2025E (%)

New estimates Old estimates Change (bps) YoY (bps)
2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Affordable housing
Aavas Financiers 7.8 7.7 7.7 7.9 7.7 7.7 -10 bps -1 bps 1 bps 0 bps -11 bps 3 bps
Aptus 13.2 12.2 11.4 13.1 12.2 11.4 4 bps 0 bps 0 bps 55 bps -94 bps -81 bps
Home First 8.1 7.2 6.9 7.8 7.1 6.8 27 bps 14 bps 11 bps 44 bps -86 bps -38 bps
Bajaj Finance 10.4 10.2 10.1 10.4 10.3 10.1 0 bps -9 bps 9 bps 44 bps -27 bps -3 bps
Cholamandalam 7.1 7.0 6.9 7.3 7.3 7.3 -20 bps -32 bps -37 bps -44 bps -12 bps -3 bps
Five Star 19.9 18.7 17.9 19.8 18.7 18.0 17 bps -3 bps -3 bps 96 bps -125 bps -76 bps
HDFC 2.8 2.7 2.8 2.7 2.7 2.7 3 bps 1 bps 2 bps 12 bps -11 bps 9 bps
L&T Finance Holdings 7.2 7.8 8.7 7.2 8.3 9.2 -7 bps -53 bps -56 bps 91 bps 65 bps 86 bps
LIC Housing Finance 2.4 2.5 2.4 2.3 2.5 2.4 2 bps -1 bps 0 bps 0 bps 10 bps -3 bps
Mahindra Finance 8.3 8.2 8.4 8.4 8.4 8.6 -9 bps -26 bps -26 bps -26 bps -13 bps 18 bps
Muthoot Finance 11.2 12.4 12.9 11.2 12.4 12.9 0 bps 0 bps 0 bps -169 bps 125 bps 46 bps
Shriram Finance 10.2 9.0 9.1 10.2 9.0 9.1 0 bps 0 bps 0 bps 280 bps -112 bps 5 bps
Change in estimates of cost-to-AAUM ratio, March fiscal year-ends, 2023-2025E (%)

New estimates Old estimates Change (bps) YoY (bps)
2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Affordable housing
Aavas Financiers 3.7 3.6 3.6 3.7 3.6 3.5 -1 bps 6 bps 4 bps 31 bps -6 bps -6 bps
Aptus 2.8 3.0 3.1 2.8 3.0 3.1 -7 bps -5 bps -1 bps 24 bps 19 bps 12 bps
Home First 2.8 2.7 2.6 2.8 2.7 2.5 -6 bps 2 bps 9 bps 5 bps -8 bps -11 bps
Bajaj Finance 4.6 4.4 4.3 4.6 4.4 4.3 -2 bps -4 bps -4 bps 26 bps -21 bps -11 bps
Cholamandalam 3.1 2.9 2.8 3.1 2.9 2.8 -5 bps -1 bps -1 bps 26 bps -16 bps -8 bps
Five Star 7.4 6.7 6.2 6.9 6.3 5.9 47 bps 35 bps 32 bps 92 bps -70 bps -47 bps
HDFC 0.4 0.4 0.4 0.4 0.4 0.3 0 bps 1 bps 1 bps -1 bps 0 bps 0 bps
L&T Finance Holdings 3.2 3.4 3.8 3.3 3.6 4.0 -11 bps -19 bps -24 bps 63 bps 22 bps 32 bps
LIC Housing Finance 0.4 0.4 0.4 0.4 0.4 0.4 0 bps 0 bps 0 bps 41 bps -1 bps 0 bps
Mahindra Finance 3.6 3.4 3.2 3.6 3.4 3.3 -2 bps -8 bps -9 bps 36 bps -21 bps -18 bps
Muthoot Finance 3.4 3.3 3.2 3.4 3.3 3.2 0 bps 0 bps 0 bps 7 bps -3 bps -10 bps
Shriram Finance 3.0 2.5 2.5 3.0 2.5 2.5 0 bps 0 bps 0 bps 130 bps -54 bps -3 bps
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4QFY23 outlook for asset and wealth managers

4QFY23 is likely to be a muted quarter for AMCs in terms of AUM growth. Broad equity indices declined
~4% during the quarter dragging equity AUM growth. Period-end equity AUM has likely grown at ~1%
sequentially. Debt MF AUM (excluding liquid, money market and overnight categories) has likely stayed
nearly flat in March versus February.
In terms of active equity market share gains we expect maximum gains for HDFC AMC followed by
Nippon which is likely to remain stable. We have seen UTI also slipping some market share whereas
ABSL continues to lose market share for a while now. These trends reflect the fund performance trends
in 1/3/5Y buckets.
While revenue yields will continue to attract maximum discussion, for HDFC AMC and Nippon AMC we
expect greater focus on flow market share trends, given the strong recent fund performance. For UTI
AMC, we look forward to management outlook on cost control and any signs of flow share trends given
weaker fund performance in early buckets. ABSL AMC will likely report weakest trends on equity market
share, given the weak fund performance, along with impact of bond flows due to higher-than-peers
exposure.
CAMS will likely report P&L trends in line with last few quarters, i.e., yield pressure offsetting AUM growth,
which along with higher expense growth, should lead to muted earnings growth. We look forward to
some guidance or revenue outlook on newer businesses such as AA and insurance repository.
IIFLW’s AUM growth is relatively tougher to predict, but we expect slowdown both in terms of returns
and flow momentum. In the current context, focus could be on management’s guidance/outlook for
FY2024 AUM growth along with the impact of recent regulatory changes for market-linked debentures
and AIFs. Transaction/broking revenues will likely decline qoq, which along with sequentially higher
expenses will push cost-income closer to 49-50% level.
AUM growth across equity categories

Month-end AUM, March 2022-March 2023 (Rs bn)
Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 YoY (%) QoQ (%)
Flexi cap 2,078 1,933 2,339 2,404 2,368 14 (2)
Large cap 2,262 2,122 2,336 2,430 2,362 4 (3)
Mid cap 1,587 1,497 1,780 1,824 1,944 22 7
Balanced advantage 1,489 1,489 1,833 1,930 1,905 28 (1)
Thematic 1,394 1,295 1,484 1,555 1,586 14 2
ELSS 1,449 1,318 1,468 1,523 1,517 5 (0)
Small cap 1,053 1,008 1,231 1,294 1,329 26 3
Large & mid cap 1,099 1,058 1,219 1,278 1,281 17 0
Focused 930 880 1,018 1,031 983 6 (5)
Value 634 598 672 723 710 12 (2)
Multi cap 277 296 346 526 631 128 20
Equity savings 171 174 177 175 166 (3) (5)
Total 14,422 13,670 15,903 16,694 16,782 16 1
Source: AMFI, Kotak Institutional Equities
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Net equity inflows have held up well in recent months SIP flows have been resilient
Net and gross inflows to actively-managed (equity- SIP inflows for mutual funds, April 2019-February
oriented) mutual funds, February 2018-February 2023 (Rs bn) 2023 (Rs bn)
140
400
300 112
200
84
100
56
0
28
(100)
(200) 0
Feb-19
Feb-20
Feb-21
Feb-22
Feb-23
Feb-18
Aug-18
Aug-19
May-18
May-19
May-20
May-21
May-22
Aug-20
Aug-21
Aug-22
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Jan-21
Jan-20
Jan-22
Jan-23
Oct-19
Oct-21
Oct-20
Oct-22
Jul-20
Jul-22
Jul-19
Jul-21
Apr-20
Apr-21
Apr-19
Apr-22
Source: AMFI, Kotak Institutional Equities Source: AMFI, Kotak Institutional Equities
Marginal increase mom in equity market share for HDFC AMC, stable for Nippon and decline for ABSL/UTI
Actively-managed equity oriented MAAUM market share, March fiscal year-ends, 2014-2023 (%)
2014 2015 2016 2017 2018 2019 2020 2021 2022 1HFY23 9MFY23 11MFY23
Market share in equity oriented MAAUM
Aditya Birla Sun Life 6.0 7.2 7.7 8.7 9.2 8.8 7.7 7.2 6.4 5.9 5.7 5.6
Axis AMC 1.5 2.3 3.1 3.3 3.6 4.6 6.8 8.0 8.4 8.1 7.6 7.2
DSP Mutual Fund 4.5 4.1 3.7 4.4 4.4 3.9 3.9 4.1 3.8 3.6 3.5 3.5
Franklin Templeton 7.1 6.8 7.5 7.5 5.6 5.2 4.3 3.7 2.8 2.7 2.7 2.6
HDFC AMC 19.9 18.5 15.1 15.8 16.2 15.6 14.4 13.0 11.4 11.6 12.0 12.1
ICICI Prudential AMC 11.2 13.5 14.2 15.2 15.0 14.3 13.5 12.5 12.4 12.3 12.7 12.9
IDFC Mutual fund 4.0 3.8 2.9 2.2 2.1 2.2 2.6 2.0 1.6 1.6 1.5 1.5
Kotak AMC 1.8 2.5 3.2 3.7 4.7 5.1 6.4 6.7 7.0 7.0 7.0 7.0
Mirae AMC 0.3 0.5 0.7 1.2 1.5 2.2 3.5 4.7 4.9 5.0 5.0 4.9
Nippon Life India AMC 12.3 12.2 11.2 9.7 9.2 8.9 7.4 6.9 6.3 6.3 6.3 6.3
SBI AMC 7.3 6.1 7.0 8.0 7.9 8.9 9.7 10.2 12.0 12.5 12.5 12.5
Tata AMC 2.2 2.0 2.5 2.1 1.7 2.3 2.3 2.5 2.9 2.7 2.7 2.8
UTI AMC 10.6 8.7 7.4 6.3 4.8 4.7 4.4 4.8 4.8 4.8 4.6 4.5
Total of above players 88.8 88.1 86.4 88.2 86.1 86.5 86.9 86.3 84.7 84.1 83.9 83.6
Top 10 85.2 83.3 80.2 82.7 80.7 79.9 78.5 78.0 77.4 77.1 76.9 76.6
Others 11.2 11.9 13.6 11.8 13.9 13.5 13.1 13.7 15.3 15.9 16.1 16.4
Source: AMFI, Kotak Institutional Equities
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Key valuation metrics for banks and non-banks, March fiscal year-ends
Fair Market
Value Price cap. EPS (Rs) PER (X) ABVPS (Rs) APBR (X) RoE (%)
Reco. (Rs) 4/5/2023 US $bn 2022 2023E 2024E 2022 2023E 2024E 2022 2023E 2024E 2022 2023E 2024E 2022 2023E 2024E
Public banks
Bank of Baroda ADD 185 167 10.5 14 26 28 11.9 6.5 5.9 133 162 183 1.3 1.0 0.9 8.9 14.7 14.2
Canara Bank BUY 340 284 6.3 31 55 62 9.1 5.2 4.6 251 306 362 1.1 0.9 0.8 9.1 14.2 14.3
PNB BUY 58 47 6.3 3 3 7 14.9 13.7 6.7 59 71 82 0.8 0.7 0.6 3.7 3.9 7.6
SBI BUY 725 523 56.9 35 53 57 10.5 7.0 6.5 267 318 368 1.5 1.2 1.0 11.9 15.8 15.1
Union Bank BUY 85 67 5.6 8 11 14 8.8 6.3 4.9 73 91 105 0.9 0.7 0.6 7.7 9.9 11.8
Old private banks
City Union Bank ADD 150 125 1.1 10 13 14 12.2 9.5 8.7 77 89 102 1.6 1.4 1.2 12.2 14.0 13.6
Federal Bank BUY 160 129 3.3 9 14 14 14.3 9.4 9.0 84 96 107 1.5 1.3 1.2 10.8 14.4 13.5
Karur Vysya Bank BUY 125 97 0.9 8 14 17 11.5 7.2 5.6 83 100 113 1.2 1.0 0.9 9.3 13.5 15.5
New private banks
Axis Bank BUY 1,100 861 32.3 42 32 78 20.3 26.7 11.0 362 394 462 2.4 2.2 1.9 12.0 8.3 18.0
Bandhan Bank BUY 250 207 4.1 1 14 27 264.7 15.2 7.7 101 114 139 2.1 1.8 1.5 0.7 11.9 20.2
DCB Bank BUY 140 105 0.4 9 15 20 11.4 7.1 5.3 109 125 144 1.0 0.8 0.7 7.4 10.9 13.2
IndusInd Bank BUY 1,350 1,067 10.1 60 92 107 17.9 11.6 9.9 601 680 766 1.8 1.6 1.4 10.1 14.0 14.5
HDFC Bank BUY 1,800 1,654 112.5 67 79 81 24.8 20.9 20.3 427 485 595 3.9 3.4 2.8 16.7 17.1 16.7
ICICI Bank BUY 1,070 885 75.3 34 46 47 22.9 16.2 16.0 233 274 312 3.2 2.7 2.4 14.7 17.5 15.7
Yes Bank REDUCE 16 15 5.3 0 0 1 35.8 52.0 27.4 11 13 14 1.4 1.1 1.1 3.2 2.3 4.1
Small finance banks
AU SFB REDUCE 575 558 4.5 18 21 24 31 27 23 116 158 181 4.8 3.5 3.1 16.4 15.0 13.8
Equitas SFB ADD 68 67 0.9 2.2 4.7 6.6 30 14 10 31 43 49 2.2 1.6 1.4 7.3 11.2 13.5
Ujjivan SFB BUY 33 27 0.6 (2.5) 5.2 5.1 (11) 5 5 15 21 26 1.8 1.2 1.0 (14.8) 30.1 21.6
NBFCs
Aavas Financiers ADD 2,150 1,670 1.6 45.2 51.6 62.1 37 32 27 356 407 469 4.7 4.1 3.6 13.7 13.5 14.2
Aptus Value Housing ADD 330 239 1.5 7.5 9.7 11.2 32 25 21 59 68 80 4.1 3.5 3.0 15.1 15.3 15.1
Bajaj Finance REDUCE 6,150 5,761 42.5 116 191 231 49.5 30.2 25.0 725 896 1,104 8.0 6.4 5.2 17.4 23.5 23.1
Bajaj Finserv ADD 1,525 1,279 24.8 29 48 60 44.7 26.5 21.2 253 260 309 5.1 4.9 4.1 12.0 18.8 21.2
Cholamandalam ADD 875 780 7.8 26 30 35 29.8 26.2 22.2 143 170 203 5.5 4.6 3.8 20.2 19.0 18.9
Five Star ADD 700 542 1.9 16 20 25 34.8 26.7 22.0 127 148 172 4.3 3.7 3.1 15.0 14.7 15.4
HDFC BUY 3,050 2,706 60.5 76 83 95 35.7 32.5 28.5 663 721 801 4.1 3.8 3.4 12.0 12.0 12.5
Home First BUY 1,000 711 0.8 21 23 29 33.5 31.5 24.6 180 202 231 4.0 3.5 3.1 11.1 13.0 13.2
LIC Hsg Fin BUY 525 328 2.2 42 48 68 7.9 6.9 4.8 448 486 541 0.7 0.7 0.6 10.1 10.2 13.3
L&T Finance Holdings REDUCE 90 84 2.5 4 14 8 19.8 6.1 9.9 81 94 102 1.0 0.9 0.8 5.4 15.6 8.7
Mahindra Finance ADD 265 240 3.6 8 16 18 29.9 15.2 13.0 127 134 148 1.9 1.8 1.6 6.5 12.1 13.1
Muthoot Finance BUY 1,225 990 4.8 99 89 111 10.0 11.1 8.9 457 529 617 2.2 1.9 1.6 23.5 18.2 19.4
SBI Cards BUY 960 740 8.5 17 23 26 43.2 31.7 28.1 82 104 129 9.0 7.1 5.7 23.0 25.0 22.7
Shriram Finance BUY 1,700 1,289 5.9 100 170 192 12.9 7.6 6.7 959 1,168 1,326 1.3 1.1 1.0 11.4 18.3 15.5
Capital market entities
HDFC AMC REDUCE 2,100 1,746 4.5 65 66 78 26.7 26.6 22.4 259 287 319 6.7 6.1 5.5 27.0 24.1 25.8
UTI AMC BUY 880 661 1.0 42 36 43 15.7 18.4 15.3 285 299 308 2.3 2.2 2.1 15.5 12.3 14.2
Nippon AMC ADD 280 219 1.7 12 11 13 18.3 20.4 16.9 56 57 58 3.9 3.9 3.8 22.6 19.0 22.5
Aditya Birla AMC ADD 460 337 1.2 23 22 25 14.4 15.6 13.5 76 85 95 4.4 4.0 3.6 34.5 26.8 27.8
IIFL Wealth BUY 2,150 428 1.9 64 72 82 6.7 6.0 5.2 327 356 377 1.3 1.2 1.1 20.0 20.8 22.5
CAMS SELL 2,050 2,160 1.3 59 58 67 36.8 37.2 32.3 132 155 180 16.3 14.0 12.0 49.3 40.5 40.0
Banks
India Research
38
Stock price performance—absolute and relative (%)
52 week 52 week
Change in price (%) Relative performance to BSE-30 Index (%) high low
1 month 3 month 6 month 12 month YTD 1 month 3 month 6 month 12 month YTD (Rs) (Rs)
Public banks
Bank of Baroda (3.4) (9.3) 24.8 44.0 (10.1) (3.2) (7.8) 21.4 46.2 (8.3) 197 90
Canara Bank (6.9) (13.2) 25.1 17.0 (14.7) (6.7) (11.8) 21.7 18.8 (13.1) 342 172
PNB (9.8) (17.7) 28.1 26.4 (17.3) (9.7) (16.4) 24.6 28.3 (15.7) 62 28
SBI (6.8) (13.6) (1.8) 2.7 (14.8) (6.6) (12.2) (4.5) 4.3 (13.1) 630 431
Union Bank (7.0) (16.5) 51.1 55.1 (16.3) (6.9) (15.1) 47.0 57.5 (14.7) 96 34
Old private banks
City Union Bank (12.1) (29.7) (27.7) (10.3) (30.7) (11.9) (28.6) (29.7) (8.9) (29.4) 205 118
Federal Bank (4.2) (6.0) 6.4 30.8 (7.6) (4.0) (4.4) 3.5 32.9 (5.8) 143 83
Karur Vysya Bank (5.2) (12.9) 19.8 93.2 (14.4) (5.0) (11.5) 16.5 96.2 (12.8) 116 42
New private banks
Axis Bank 0.9 (9.4) 15.8 9.9 (7.8) 1.1 (7.9) 12.7 11.6 (6.1) 970 618
Bandhan Bank (11.5) (14.1) (23.4) (34.5) (11.7) (11.3) (12.7) (25.5) (33.4) (10.0) 350 182
DCB (6.9) (18.9) 2.2 37.2 (16.9) (6.7) (17.6) (0.6) 39.3 (15.3) 141 70
IndusInd Bank (5.3) (12.2) (12.5) 9.7 (12.5) (5.1) (10.8) (14.9) 11.3 (10.8) 1,276 763
HDFC Bank 2.3 3.4 13.8 2.8 1.6 2.5 5.1 10.7 4.4 3.5 1,702 1,272
ICICI Bank 1.8 0.6 2.0 19.3 (0.7) 2.1 2.3 (0.8) 21.1 1.2 958 670
Yes Bank (9.5) (28.9) (5.9) 17.3 (26.0) (9.3) (27.8) (8.4) 19.1 (24.5) 25 12
Small finance banks
AU SFB (10.4) (12.2) (8.1) (15.1) (14.7) (10.2) (10.8) (10.6) (13.7) (13.0) 733 539
Equitas SFB (11.7) 13.1 34.2 21.7 14.7 (11.6) 14.9 30.6 23.6 16.9 78 37
Ujjivan SFB (2.7) (11.6) 14.7 43.5 (8.4) (2.6) (10.2) 11.6 45.7 (6.7) 34 14
Non-banks
Aavas Financiers (8.6) (3.6) (24.0) (34.0) (9.5) (8.5) (2.0) (26.0) (33.0) (7.8) 2,635 1,590
Aptus Value Housing 1.1 (21.1) (23.9) (30.6) (21.3) 1.3 (19.8) (25.9) (29.5) (19.8) 368 220
Bajaj Finance (5.6) (5.6) (23.1) (22.0) (12.4) (5.4) (4.0) (25.2) (20.8) (10.7) 7,778 5,220
Bajaj Finserv (5.6) (12.9) (24.8) (23.9) (17.3) (5.4) (11.5) (26.8) (22.8) (15.8) 1,844 1,073
Cholamandalam 4.0 14.1 5.7 10.7 7.9 4.2 16.0 2.8 12.4 10.0 818 594
Five Star (1.4) (16.5) #N/A N/A #N/A N/A (11.8) (1.2) (15.2) #VALUE! #VALUE! (10.1) 688 448
HDFC 2.3 3.2 15.2 3.1 2.6 2.5 4.9 12.0 4.7 4.6 2,780 2,026
Home First (4.4) (5.2) (19.3) (8.9) (2.8) (4.2) (3.6) (21.5) (7.5) (0.9) 1,005 652
LIC Housing Finance (8.5) (21.9) (21.4) (14.6) (20.7) (8.3) (20.6) (23.5) (13.2) (19.2) 444 292
L&T Finance Holdings (8.3) (5.4) 8.8 (2.4) (4.0) (8.1) (3.9) 5.9 (0.9) (2.1) 98 66
MMFS (5.7) 1.6 19.5 40.5 2.1 (5.5) 3.2 16.3 42.7 4.1 272 161
Muthoot Finance 4.2 (8.5) (4.8) (27.5) (6.9) 4.4 (7.0) (7.4) (26.4) (5.1) 1,384 911
SBI Cards (1.4) (5.1) (17.3) (11.8) (7.0) (1.2) (3.5) (19.5) (10.4) (5.2) 1,029 656
Shriram Finance 5.9 (2.3) 7.4 10.1 (6.4) 6.1 (0.8) 4.5 11.8 (4.6) 1,509 1,047
Capital market entities
HDFC AMC (2.8) (20.6) (7.7) (25.4) (20.0) (2.6) (19.3) (10.2) (24.3) (18.4) 2,377 1,590
UTI AMC 0.6 (21.5) (7.3) (32.1) (23.2) 0.8 (20.2) (9.8) (31.1) (21.8) 1,005 595
Nippon AMC (2.2) (13.0) (19.1) (38.2) (11.9) (2.0) (11.6) (21.3) (37.2) (10.2) 357 197
Aditya Birla AMC (10.8) (25.0) (25.2) (36.3) (25.9) (10.6) (23.8) (27.3) (35.3) (24.4) 560 307
IIFL Wealth (4.1) (4.3) (7.2) 1.9 (3.5) (3.9) (2.7) (9.7) 3.5 (1.7) 490 306
CAMS (6.6) (2.7) (12.9) (16.1) (2.8) (6.4) (1.2) (15.2) (14.8) (0.9) 2,690 2,002
Banks
India Research
39
Quarterly result expectations for banks under coverage

Change (% )
Dec-21 Sep-22 Dec-22E yoy qoq Comments
Banks
AU Small Finance Bank
Treasury income (40) 70 860 NM 1,128.6
Pre-provision profit 4,823 5,557 5,714 18.5 2.8 We expect NIM to be lower by ~20 bps qoq to ~5.8%. Strong NII will result in ~20% revenue growth with
elevated costs resulting in ~18% growth in operating profits. Some normalization in provisions will result in
Loan-loss provisions 932 326 578 (38.0) 77.2 earnings growth of ~7% yoy (low tax rate in base quarter of 4QFY22).
PBT 3,891 5,231 5,136 32.0 (1.8)
Tax 430 1,302 1,418 229.6 8.9
PAT 3,461 3,928 3,717 7.4 (5.4)
EPS (Rs/share) 5.5 5.9 5.6 1.8 (5.0)
We expect credit cost to stay low (~30 bps annualized). We expect discussion to focus on growth visibility
NIM - calc. (%) 6.0 6.0 5.7 -28 bps -22 bps
across vehicle/ SBL segments, margin trends and cost ratios.
Slippages (%) 1.9 1.8 1.2 -78 bps -62 bps
Net advances (Rs bn) 461.0 556.0 585.0 26.9 5.2
Axis Bank
Treasury income 2,310 4,280 250 (89.2) (94.2) This quarter is not a representative of the underlying business as it includes the integration of Citi's business in
Pre-provision profit 64,660 92,775 (21,374) (133.1) (123.0) the portfolio from March, 2023. The bank would be reporting a loss to mark down the goodwill on this
acquisition. We expect a like-to-like loan growth to be similar to industry average at ~15% yoy. We are
Loan-loss provisions 6,020 13,410 5,853 (2.8) (56.4) building NIM to be flat qoq but the variables driving the actual NII performance would be challenging to
PBT 54,788 78,398 (33,948) (162.0) (143.3) forecast this quarter.
Tax 13,610 19,867 20,173 48.2 1.5
PAT 41,178 58,531 (54,121) (231.4) (192.5)
EPS (Rs/share) 13.4 19.0 (17.6) (231.2) (192.5) We expect slippages of ~Rs40 bn (~2% of loans) mostly led by small ticket loans. Expect strong commentary on
asset quality performance and we see an improvement in NPL ratios aided by stronger recovery/upgradations.
NIM - calc. (%) 3.3 4.1 4.0 66 bps -14 bps
We should expect the bank to make higher provisions for expenses pertaining to the merger as well. Citi
Slippages (%) 2.3 2.0 2.1 -16 bps 9 bps integration, near term growth trends and progress of NIM would be the key discussion areas for the quarter.
Net advances (Rs bn) 7,077.0 7,620.8 8,275.5 16.9 8.6
Bandhan Bank
Net interest income 25,398 20,804 22,811 (10.2) 9.6
Pre-provision profit 25,214 19,222 16,789 (33.4) (12.7) The bank 10% yoy loan growth but a strong sequential growth at 12%. The impact on NIM would be higher
Loan-loss provisions 47 15,415 5,075 10,657.3 (67.1) on account of lower slippages coming from the restructured portfolio (mostly the last quarter of peak slippages)
PBT 25,167 3,807 11,562 (54.1) 203.7 and revision in interest rates on the MFI portfolio.
Tax 6,143 901 3,133 (49.0) 247.7

PAT 19,023 2,906 8,429 (55.7) 190.1
EPS (Rs/share) 11.8 1.8 5.2 (55.7) 190.1 We expect slippages to be sharply lower as most of the loans have slipped from the restructured loan portfolio.
The bank has sold loans to ARC this quarter, part of which would result in NPL reduction and the balance as an
NIM - calc. (%) 7.7 6.1 6.4 -133 bps 29 bps
increase in SR receipts which would also get marked down (no P&L impact). We should expect positive
Slippages (%) NA NA NA NA NA commentary on growth, recovery in business and return ratios for the bank.
Net advances (Rs bn) 939.7 920.9 1,045.8 11.3 13.6
Bank of Baroda
Treasury income (6,830) 2,880 2,240 NM (22.2)
Pre-provision profit 56,351 82,322 79,690 41.4 (3.2) We expect solid operating profits of ~40% yoy led by strong revenue growth and stable costs. We are buiding
Loan-loss provisions 52,000 8,170 16,022 (69.2) 96.1 flat NIM for the quarter. We expect loan growth to be solid at 15% yoy leading to ~30% yoy NII growth.
PBT 18,988 58,283 58,076 205.9 (0.4)
Tax 1,200 19,755 15,468 1,189.1 (21.7)
PAT 17,788 38,527 42,608 139.5 10.6
EPS (Rs/share) 3.4 7.4 8.2 139.5 10.6 We expect slippages at ~1.7% (Rs38 bn) and offset by a meaningful quantum from recoveries and upgrades
from the retail and SME portfolio. We expect to hear commentary to be quite positive on asset quality. Key
NIM - calc. (%) 3.1 3.5 3.5 35 bps -1 bps
discussion would be the sustainability of loan growth, deposit related challenges and NIM outlook in the near
Slippages (%) 3.0 1.3 1.7 -134 bps 34 bps term.
Canara Bank
Treasury income 5,230 3,860 4,580 (12.4) 18.7 We expect bank to report healthy growth of ~20% yoy in PPOP, driven by strong revenue growth, resulting in
earnings growth of >100% yoy. NIM is expected to expand only marginally qoq driven by elevated competition
Loan-loss provisions 21,300 19,200 29,619 39.1 54.3 for deposits.
PBT 24,933 38,309 44,894 80.1 17.2
Tax 8,270 9,493 10,686 29.2 12.6
PAT 16,662 28,815 34,208 105.3 18.7
EPS (Rs/share) 9.2 15.9 18.9 105.3 18.7 We expect slippages at 1.7% , but the trend of GNPL decline continues due to high recoveries and
upgradations. We expect discussion to focus on operating profit growth and its drivers given that asset quality
NIM - calc. (%) 2.8 3.0 3.2 40 bps 17 bps
has improved significantly for the bank. Provisions are likely to be lower qoq at ~1.4%, mainly towards
Slippages (%) 2.6 1.6 1.7 -88 bps 16 bps improving PCR.
City Union Bank
Treasury income 502 353 183 (63.5) (48.2)
Pre-provision profit 4,399 4,973 4,622 5.1 (7.1) We expect loan growth to be lower than industry average at 10% yoy. We expect NII growth at ~15% yoy
while non-interest growth would be muted due to lower treasury income contribution but offset partly by
Loan-loss provisions 1,600 2,450 1,456 (9.0) (40.6) higher income from written-off loans.
PBT 2,690 2,728 2,961 10.1 8.5
Tax 600 550 674 12.4 22.6
PAT 2,090 2,178 2,287 9.4 5.0
EPS (Rs/share) 2.8 2.9 3.1 9.4 5.0
We expect a slippages to be high (2.4% of loans or Rs2.5 bn) but we should see higher recovery and
NIM - calc. (%) 3.5 3.5 3.4 -6 bps -7 bps
upgradation as well. Key discussion would be on loan growth/demand, provisions and recovery in RoA/RoE.
Slippages (%) 2.3 4.1 2.4 13 bps -168 bps
Banks
India Research
40

Change (% )
DCB Bank
Treasury income 30 50 63 110.0 26.0
We expect operating profit growth to be flat yoy as non-interest income growth is still weak and the headwind
of higher investments in business continues. We see NIM at 4% (within the band at which the company
Loan-loss provisions 676 407 381 (43.7) (6.4) prefers to operate). Loan growth should be strong at ~20% yoy leading to healthy NII growth of ~20% yoy.
PBT 1,532 1,534 1,823 18.9 18.8
Tax 398 396 456 14.5 15.1
PAT 1,134 1,139 1,367 20.5 20.1
EPS (Rs/share) 3.7 3.7 4.4 20.3 20.1 We expect PAT to increase sharply on account of lower loan-loss provisions. We expect a positive commentary
NIM - calc. (%) 3.7 3.9 3.7 -2 bps -19 bps (directionally an improvement in NPL ratios from hereon) as the economy has opened up well. Key discussion:
Slippages (%) 5.5 5.2 4.4 -115 bps -80 bps loan demand and normalisation of return ratios in FY2024-25.

Equitas Small Finance Bank
Pre-provision profit 2,839 2,791 2,920 2.8 4.6 We expect NII growth of ~7% qoq (~25% yoy) in line with ~5% qoq loan growth. NIM is likely to be flat given
Loan-loss provisions 1,232 499 704 (42.8) 41.1 the low share of floating rate book and yield mix across segments. Costs will likely keep operating profit
growth muted. Credit cost should be near the bank's FY2023 guidance.
PBT 1,607 2,292 2,216 37.9 (3.3)
Tax 412 591 592 43.5 0.2
PAT 1,195 1,701 1,624 35.9 (4.5)
EPS (Rs/share) 1.0 1.4 1.5 53.3 7.9
Asset quality will continue to be strong with decline in slippages led by lower delinquencies from the
NIM - calc. (%) 8.9 8.7 8.7 -17 bps 4 bps
restructured book. Recoveries and upgradations will also continue to be strong.
Slippages (%) 8.3 5.0 3.8 -451 bps -124 bps
Federal Bank
Treasury income 110 70 20 (81.8) (71.4)
Pre-provision profit 7,982 12,742 11,679 46.3 (8.3) The bank has reported a solid loan growth at ~20% yoy but deposit growth was slower at 13% yoy. CASA
deposits is growing slower than deposit growth. We expect NII growth at ~25% yoy with NIM flat qoq to
Loan-loss provisions 550 1,927 1,328 141.5 (31.1) marginally higher. We expect operating profit growth of ~45% yoy on the back better cost ratios as well.
PBT 7,230 10,755 10,266 42.0 (4.5)
Tax 1,824 2,719 2,640 44.7 (2.9)
PAT 5,405 8,036 7,626 41.1 (5.1)
EPS (Rs/share) 2.6 3.8 3.6 41.1 (4.5) We expect slippages at ~1.5% of loans (Rs6.5 bn) with no major large ticket loans. Gross NPL ratio is expected
NIM - calc. (%) 3.1 3.5 3.3 28 bps -12 bps to be flat qoq. The key discussion points would be (a) liability side challenges, (b) near term outlook on growth
Slippages (%) 1.1 1.0 1.6 42 bps 53 bps and (c) near term normalisation of RoA and RoEs.

HDFC Bank
Treasury income (403) 2,614 3,034 NM 16.1
Pre-provision profit 163,570 190,241 184,253 12.6 (3.1) We expect NII growth at ~18% yoy led by loan growth of ~18% yoy (bank has already reported headline
Loan-loss provisions 27,782 28,064 27,101 (2.5) (3.4) business performance). We expect NIM to be stable qoq. The growth is balanced across segments.
PBT 130,447 162,176 157,153 20.5 (3.1)
Tax 29,895 39,581 38,447 28.6 (2.9)
PAT 100,552 122,595 118,706 18.1 (3.2)
EPS (Rs/share) 18.1 22.0 21.4 18.1 (2.7) We expect gross NPL ratio to be stable qoq led by lower slippages (<2%), better recovery (expect a bullish
NIM - calc. (%) 3.9 4.3 3.9 -2 bps -40 bps commentary of the situation on the ground) and strong loan growth outlook. Near term focus would be the
Slippages (%) 1.3 1.8 - -130 bps -179 bps status of the merger with HDFC Ltd (conversation on regulatory dispensations).

ICICI Bank
Treasury income 1,290 360 2,130 65.1 491.7
Pre-provision profit 102,929 132,712 136,617 32.7 2.9 We expect a PPoP to grow at ~33% yoy as we see most operating metrics to be stable to positive. Loan growth
to be solid at ~20% led by halthy contribution from all segments. The rate cycle is still favorable but scope for
Loan-loss provisions 10,689 22,574 20,225 89.2 (10.4) NIM expansion is coming to an end. We are building flat NIM at 4.7%
PBT 92,240 110,138 116,392 26.2 5.7
Tax 22,053 27,019 26,049 18.1 (3.6)
PAT 70,187 83,119 90,343 28.7 8.7
EPS (Rs/share) 10.1 11.9 12.9 28.2 8.7 We expect provisions to remain at low levels given lower slippages and better trends on recovery/upgradation.
We are building slippages of ~2% (~Rs50 bn) but we see a solid commentary on recovery to continue resulting
NIM - calc. (%) 3.9 4.7 4.6 77 bps -3 bps
in lower stress coming from asset quality perspective. Key concern would be the reversal of NIM as cost of
Slippages (%) 2.1 2.4 1.9 -13 bps -50 bps funds is starting to move up sharply for the sector, especially with slower CASA growth.
IndusInd Bank
Treasury income 2,590 1,353 797 (69.2) (41.1)
We expect a weak operating profit growth (~5% yoy) led by lower contribution from treasury and operating
Pre-provision profit 33,266 36,804 35,205 5.8 (4.3) costs growth higher led by recovery in business. Loan growth is healthy at 17% yoy while NIM (reported) is
Loan-loss provisions 11,690 10,647 9,583 (18.0) (10.0) likely to be stable at 4%. Non-interest income would be subdued due to lower treasury income. Deposit growth
at ~15% yoy is showing stable trends. We see RoE at ~15% this quarter.
PBT 18,650 26,157 24,121 29.3 (7.8)
Tax 5,036 6,565 5,995 19.0 (8.7)
PAT 13,614 19,592 18,126 33.1 (7.5)
EPS (Rs/share) 17.6 25.3 23.4 33.1 (7.4) We expect provisions to keep declining led by lower slippages and better asset quality trends. Both the MFI and
NIM - calc. (%) 4.0 4.1 4.1 5 bps -6 bps vehicle finance portfolio is showing improving trends. We are building slippages of ~2.3% (Rs14 bn). Key focus
Slippages (%) 3.7 2.3 2.0 -161 bps -22 bps area would be the cost of funds given the sharp rise in raising deposits.
Banks
India Research
41

Change (% )
Karur Vysya Bank
Pre-provision profit 4,413 6,889 6,187 40.2 (10.2) We see strong earnings on the back of lower provisions and healthy operating profit growth. Operating profits
Loan-loss provisions 1,430 2,750 1,311 (8.3) (52.3) to grow ~40% yoy on the back of 13% yoy loan growth, stable NIM and importantly, operating leverage. We
PBT 3,012 3,249 4,894 62.5 50.7 don’t see the bank having an issue at the operating level currently.
Tax 877 356 1,845 110.3 418.7

PAT 2,135 2,893 3,049 42.8 5.4
EPS (Rs/share) 2.7 3.6 - (100.0) (100.0) We expect NPLs to decline to 2.5% levels as we see lower slippages (1% of loans or Rs1.5 bn). Expect
NIM - calc. (%) 3.5 4.0 4.0 55 bps 5 bps commentary for FY2024 to be positive with greater emphasis on normalisation of return ratios. Near term
Slippages (%) 2.2 1.0 0.9 -125 bps -14 bps concern to be addressed would be on loan demand and growth outlook.
Net advances (Rs bn) 575.5 628.9 628.0 9.1 (0.1)

Punjab National Bank
Treasury income 120 (1,070) 7,410 6,075.0 NM
Pre-provision profit 52,648 57,159 68,636 30.4 20.1 We expect the bank to report healthy operating profit growth of ~14% yoy resulting in strong earnings growth
(low base) in spite of higher provisionsLoan growth trends expected to be modest (~2% qoq) with NIM up
Loan-loss provisions 45,636 43,770 57,487 26.0 31.3 maginally qoq driven by higher yields.
PBT 4,133 10,026 11,149 169.8 11.2
Tax 2,117 3,737 2,876 35.8 (23.0)
PAT 2,016 6,289 8,273 310.4 31.6
EPS (Rs/share) 0.2 0.6 0.8 310.4 31.6
We expect slippages to be broadly flat qoq at ~2.1%. Overall GNPL reduction will continue as recoveries are
NIM - calc. (%) 2.7 3.1 3.1 44 bps 2 bps
expected to be healthy. We expect incrementally positive commentary on asset quality and net NPL reduction..
Slippages (%) 6.1 2.1 2.1 -395 bps 1 bps
State Bank of India
Treasury income 1,780 29,380 1,540 (13.5) (94.8)
Pre-provision profit 197,168 252,193 246,394 25.0 (2.3) We expect a operating profit growth of ~25% yoy led by strong NII growth. We are building 25% yoy NII
growth on the back of 15% yoy loan growth. We are building stable NIM but do see a possibility of a small
Loan-loss provisions 32,617 15,865 (6,949) (121.3) (143.8) expansion given the structure of loan book and neglibile need for deposits to fund this growth.
PBT 124,794 194,587 205,347 64.5 5.5
Tax 33,659 52,534 46,449 38.0 (11.6)
PAT 91,135 142,053 158,897 74.4 11.9
EPS (Rs/share) 10.2 15.9 17.8 74.4 11.9 We expect slippages at ~1.5% of loans (~Rs115 bn) mostly driven by SME and retail while corporate will
NIM - calc. (%) 3.0 3.3 3.4 36 bps 4 bps continue to hold up relatively well. We should see further improvement in NPL ratios as recovery and upgrades
Slippages (%) 0.6 0.4 1.5 95 bps 107 bps are likely to be strong in 4Q.

Ujjivan Small Finance Bank
Pre-provision profit 2,172 3,889 4,033 85.6 3.7 We expect strong NII growth of ~6% qoq (~35% yoy) driven by AUM growth. Margin is expected to see some
Loan-loss provisions 438 (2) 395 (9.7) NM pressure, but PPOP is expected to grow ~4% qoq, which combined with low provisions will result in healthy
PBT 1,734 3,891 3,637 109.7 (6.5) earnings print for the bank.
Tax 469 960 1,045 122.7 8.9

PAT 1,265 2,932 2,592 104.9 (11.6)
EPS (Rs/share) 0.7 1.4 1.2 85.8 (10.4)
We expect credit cost to be higher qoq (~0.7% annualized) as portfolio starts to normalize. Slippages expected
NIM - calc. (%) 10.2 10.1 9.8 -39 bps -32 bps
to be at ~2.2%, but recoveries/ upgradations likely to be good.
Union Bank
Treasury income 8,350 1,680 1,620 (80.6) (3.6)
Pre-provision profit 55,201 66,192 69,298 25.5 4.7 We expect earnings to increase ~60% yoy driven by ~25% yoy growth in operating profit and flat provisions
yoy. NII growth is expected to be strong at ~35% yoy driven primarily by both growth and some improvement
Loan-loss provisions 34,600 24,431 36,224 4.7 48.3 in margin.
PBT 19,020 35,832 33,073 73.9 (7.7)
Tax 4,624 13,384 10,136 119.2 (24.3)
PAT 14,396 22,448 22,937 59.3 2.2
EPS (Rs/share) 2.1 3.3 3.4 59.3 2.2
We expect slippages to be ~1.7% and credit cost to be at ~2.0%, largely towards reducing net NPLs. Apart
NIM - calc. (%) 2.8 3.2 3.3 55 bps 12 bps
from recovery pipeline, discussion is likely to shift towards loan growth drivers, margins and capital raise.
YES Bank
Treasury income (260) 1,370 220 NM (83.9) We expect NII to grow ~6% yoy reflecting the underlying business growth. Business momentum is gaining
Pre-provision profit 7,742 9,136 7,600 (1.8) (16.8) traction across retail and MSME segments but overall loan growth to be lower than industry average at ~11%
yoy. Deposit growth at 11% yoy is meeting the business requirements but has significantly decelerated in
Loan-loss provisions (2,480) (20,580) 3,043 NM NM recent quarters. We expect NIM qoq at ~2.5% (stable qoq). Revenue growth pressure to remain high especially
PBT 5,032 689 4,370 (13.2) 534 led by weak treasury income.
Tax 1,357 174 1,153 (15.0) 564
PAT 3,675 515 3,217 (12.5) 524
We should traction on recovery and upgrades this quarter (mostly reflected in changes to the value of security
EPS (Rs/share) 0.1 0.0 1,439.7 981,580 8,035,142 receipts) but the impact on earnings is likely to be difficult to forecast given the nature of provisioning policies
NIM - calc. (%) 3.1 3.1 3.0 -20 bps -12 bps likely to be adopted and the recovery rates recorded on these transactions. Focus is shifting towards rebuilding
Slippages (%) 1.8 3.3 2.3 50 bps -102 bps the business for the bank and most conversations would be on growth and return to normalised levels of
business operations.
Banks
India Research
42
Key highlights of 4QFY23E, March fiscal year-ends, 3QFY22-4QFY23E (Rs bn)

Change (%)
4QFY22 3QFY23 4QFY23E YoY QoQ Comments
Aavas Financiers
Key P&L items
Net interest income 1,804 2,082 2,227 23 7
Operating expenses 1,059 1,201 1,308 23 9
PPOP 1,357 1,415 1,540 14 9
Aavas to reported 8% qoq AUM growth in 4QFY23, translating to
Provisions (104) 35 (23) NM (165)
24% yoy growth (23% yoy in 3QFY23). NIM will likely expand 10
PBT 1,461 1,380 1,563 7 13
bps qoq due to sharp (~50 bps) hike in lending rates in 3QFY23.
PAT 1,157 1,073 1,231 6 15
Core PBT 904 888 918 2 3
Key balance sheet items
AUM (Rs bn) 114 131 141 24 8
Key ratios (%) We expect cost-to-average AUM to remain high at 3.9% (3.5-
NIM 8.2 8.1 8.2 -7 bps 9 bps 3.9% in last four quarters) due to higher investments in
Cost-to-income 43.8 45.9 45.9 208 bps 1 bps infrastructure/IT. We model credit cost of -7 bps on the back of
Cost-to-average AUM 3.9 3.7 3.8 -1 bps 10 bps strong collections.
Credit cost (0.4) 0.1 (0.1) 31 bps -18 bps
Aptus Value Housing
Key P&L items
Operating expenses 303 414 460 52 11
We expect Aptus to deliver 6.4% qoq AUM growth (6.3-7.8% in
PPOP 1,548 1,762 1,815 17 3
last four quarters) and 30% yoy, driven by 23% disbursement
Provisions 105 78 93 (11) 20
growth in 4QFY23E and 45% yoy for FY2023E . NIM will expand
PBT 1,443 1,684 1,722 19 2
marginally (up 9 bps to 13.2%) to reflect refinance from NHB and
PAT 1,099 1,256 1,350 23 8
reduction of liquidity on balance sheet.
Core PBT 1,432 1,656 1,734 21 5
AUM (Rs bn) 52 63 67 30 6
Key ratios (%)
We expect increased business activity to keep cost-to-average
NIM 13.5 13.1 13.2 -30 bps 8 bps
AUM elevated at 2.9% (2.4-3.1% over the last four quarters).We
Cost-to-income 16.4 19.0 20.2 384 bps 120 bps
pen down credit cost of 58 bps for 4QFY23E.
Cost-to-average AUM 2.4 2.7 2.9 42 bps 14 bps
Credit cost 0.8 0.5 0.6 -26 bps 7 bps
Bajaj Finance
Key P&L items
PPOP 39,671 49,519 51,142 29 3 Bajaj Finance reported 7% qoq loan growth (6% qoq in 3QFY23)
Provisions 7,016 8,413 9,035 29 7 driving 25% yoy growth/29% yoy growth in core AUMs. We
PBT 32,655 41,106 42,107 29 2 expect almost flat NIM qoq; 54 bps yoy NIM expansion reflects
PAT 24,195 30,719 31,400 30 2 large IPO loans in the base period (March 31, 2022).
Core PBT 35,870 45,493 47,382 32 4
AUM (Rs bn) 1,975 2,308 2,473 25 7
Key ratios (%)
We expect cost-to-average AUM ratio to remain high at 4.6%,
NIM 10.1 10.7 10.7 54 bps -4 bps
similar to 3QFY23. We pen down credit costs of 1.5% for
4QFY23E, similar to 3QFY23.
Cost-to-average AUM 4.4 4.6 4.6 12 bps -4 bps
Credit cost 1.5 1.5 1.5 3 bps 1 bps
CAMS
Key P&L items
Revenue from operations 2,432 2,436 2,533 4 4
Other income 43 71 30 (30) (58)
Total income 2,474 2,507 2,563 4 2
Operating expenses 1,485 1,529 1,619 9 6 We expect ~1% qoq growth in AAUM with broadly stable share
Employee expenses 853 871 884 4 1 of equity (~46%) on a sequential basis.
PBT 989 978 944 (5) (3)
PAT 738 736 716 (3) (3)
Managed AAUM (Rs tn) 27 28 28 5 1
We build in stable calculated yields at ~2.7 bps qoq (for asset
Key ratios
linked MF revenues) reflecting impact of asset growth offset by
Revenue from operations to AAUM (bps) 3.64 3.50 3.61 -0.04 bps 0.103 bps
mix effect. We expect largely stable core cost-to-income ratio at
Cost-to-income (%) 60.0 61.0 63.2 317 bps 219 bps
~63%. We build revenue traction on non-MF businesses (off low
base) which will likely be an area of focus apart from core yields.
Share of equity-oriented AAUM (%) 41.2 46.4 46.4 519 bps -2 bps
Cholamandalam
Key P&L items
Net interest income 13,679 15,983 15,685 15 (2)
PPOP 9,120 10,797 9,783 7 (9)
Provisions (174) 1,589 835 NM (47) We expect loan growth to acclerate to 33% from 31% in 3QFY23
PBT 9,294 9,208 8,947 (4) (3) as disbursements across segments continues to remain strong.
PAT 6,896 6,843 6,634 (4) (3)
Core PBT 9,101 10,616 9,748 7 (8)
AUM (Rs bn) 769 955 1,023 33 7
Key ratios (%) Sharper rise in cost of funds due to MCLR resets will lead to 15
NIM 7.6 7.1 6.5 -111 bps -60 bps bps qoq NIM compression even as the company has recently
Cost-to-income 41.6 41.1 43.8 228 bps 278 bps raised lending rates across products. Credit cost will likely
Cost-to-average AUM 3.5 3.3 3.1 -38 bps -20 bps remain low, in line with seasonal trends.
Credit cost (0.1) 0.7 0.3 43 bps -36 bps
Banks
India Research
43

Change (%)
HDFC
Key P&L items
Net interest income 46,009 48,401 48,289 5 (0)
Core net interest income 36,972 38,292 40,289 9 5
We expect HDFC to deliver 3.7% qoq individual loan growth (16%
yoy, 3.4-4% qoq in the last three quarters) reflecting marginal
PPOP 50,235 49,818 49,902 (1) 0
weakness in retail disbursements. Overall loan growth is lower
Provisions 4,010 3,700 1,862 (54) (50)
at 11% due to slower growth in the non-individual segment. Core
PBT 46,225 46,118 48,040 4 4
NIMs will likley expand marginally (up 5 bps qoq) reflecting
PAT 37,003 36,908 37,219 1 1
recent rate hikes.
Core PBT 42,545 44,340 42,038 (1) (5)
AUM (Rs bn) 6,539 7,015 7,288 11 4
Key ratios (%)
We expect cost-to-AAUM ratio of 35 bps (35 bps in 2QFY23) and
NIM 3.3 3.2 3.1 -20 bps -11 bps
pen down credit cost of 10 bps for the quarter. HDFC reported a
Core NIM 2.7 2.6 2.6 -6 bps 5 bps
loss of Rs2.7 bn on FV changes in investments (gain of Rs2.7 bn
in 4QFY22) and dividend income of Rs2 bn (Rs1.3 bn in 4QFY22).
Credit cost 0.3 0.2 0.1 -15 bps -11 bps
HDFC AMC
Key P&L items
Total income 5,809 6,630 6,348 9 (4) We are building in ~1% qoq increase in QAAUM in 4QFY23E for
Operating expenses 1,383 1,625 1,631 18 0 the domestic MF business reflecting growth in equity indices
Employee expenses 714 790 788 10 (0) and higher equity market share. Average Nifty-50 was down ~4%
PBT 4,427 5,005 4,717 7 (6) qoq. We expect largely stable revenue yields driven by ongoing
PAT 3,436 3,692 3,496 2 (5) pressure on fees, partly offset by mix effect.
Core PBT 3,897 4,081 4,080 5 (0)
Closing MF AUM 4,076 4,481 4,563 12 2
Key ratios and yields (%) We expect ~5% sequential decline in earnings growth due to
Yields (bps)-MF QAAUM and average of PMF AUM 47.8 50.3 50.0 226 bps -27 bps lower other income, yield pressure and stable operating
Cost-to-income (%) 23.8 24.5 25.7 189 bps 118 bps expenses. Core PBT (i.e. ex other income and ESOP costs) are
RoAUM (bps) 31.9 33.5 30.7 -114 bps -274 bps expected to be flat qoq.
Core PBT (bps) 36.1 37.0 35.2 -92 bps -176 bps
Home First Finance
Key P&L items
Net interest income 851 1,083 1,193 40 10
Operating expenses 364 443 475 30 7
We expect AUM growth of 7.9% qoq (7.6-8.4% qoq growth during
PPOP 659 817 901 37 10
the last 4 quarters), thereby driving 35% yoy growth;
Provisions 27 60 83 211 39
disbursements will likely grow by 34% yoy reflecting strong
PBT 632 757 817 29 8
underlying momentum. NIM will likely expand 17 bps qoq,
PAT 602 587 636 6 8
following share rise in lending rates.
Core PBT 521 740 771 48 4
AUM (Rs bn) 54 68 73 35 8
Key ratios (%)
NIM 8.2 8.0 8.2 2 bps 17 bps We expect cost-to-average AUM to remain flat at 2.7% in
Cost-to-income 35.6 35.1 34.5 -106 bps -62 bps 4QFY23E. We pen down credit cost of 48 bps for the quarter.
Cost-to-average AUM 2.8 2.7 2.7 -10 bps -1 bps
IIFL Wealth
Key P&L items
Recurring revenues 2,520 2,757 2,783 10 1
Non-recurring revenues 1,700 1,393 1,046 (38) (25) We expect IIFL Wealth's recurring AUM growth to grow ~2% qoq
Overall revenues 4,490 4,096 4,014 (11) (2) in 4QFY23E (7% in 3QFY23) owing to fall in equity indices and
Operating expenses 2,350 1,863 1,966 (16) 6 likely slower flow momentum, especially in higher yielding
Employee expenses 1,780 1,318 1,372 (23) 4 strategies. Impact of volatile markets on flows remains a key
PBT 2,140 2,232 2,048 (4) (8) monitorable. PBT (ex other income) to fall 3% yoy due to lower
PAT 1,678 1,801 1,541 (8) (14) transactional income.
Net AUM (excluding custody) 2,327 2,471 2,475 6 0
Yields in the recurring business will likely decline qoq reflecting
Advisory and PMS AUM 327 406 409 25 1
the mix effect. We bake in lower transactional income qoq but
Key ratios and yields (%)
this line item remains volatile. We expect core cost-to-income
Recurring revenue to overall revenues 56.1 67.3 69.3 1320 bps 201 bps
(excluding other income and ESOP expenses) to be higher qoq at
Cost-to-income 52.3 45.5 49.0 -336 bps 349 bps
~50%, as we establish a new base for expense line given recent
Yields on recurring business 0.71 0.69 0.66 -5 bps -2 bps
changes in compensation structure.
Yields on PMS and advisory business 0.29 0.25 0.27 -2 bps 2 bps
L&T Finance Holdings
Key P&L items
Operating expenses 5,820 7,140 7,459 28 4 We expect LTFH to deliver 10.5% qoq retail loan growth driven by
PPOP 10,600 (14,910) 12,783 21 NM strong disbursements across product lines; overall loan book
Provisions 5,930 5,430 6,164 4 14 growth will be muted at 3% qoq due to rundown in the wholesale
PBT 4,670 (20,340) 6,619 42 NM segment. We expect NIM to expand 30 bps qoq to 7.7% (6.5-
PAT 3,420 4,540 4,594 34 1 7.4% in the last four quarters) primarily driven by the retial
Core PBT 10,600 (14,910) 12,783 21 NM segment.
AUM (Rs bn) 868 880 906 4 3
Key ratios (%) Continued investments in new business lines will lead to
NIM 6.6 7.4 7.7 117 bps 29 bps elevated cost-to-income ratio of 37% (37% in both 3QFY23 and
Cost-to-income 35.4 37.4 36.8 140 bps -53 bps 2QFY23). We build in credit cost of 2.8% as compared to 2.5-
Cost-to-average AUM 2.9 3.2 3.3 39 bps 6 bps 3.5% over the last four quarters.
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44

Change (%)
LIC Housing Finance
Key P&L items
We expect low (7% yoy) growth in retail disbursements in
PPOP 13,174 9,447 13,557 3 44
4QFY23 reflecting slowdown in demand for housing loans in
Provisions 3,556 5,658 7,626 114 35
prime segment. Recent home loan rate hike will support NIM
PBT 9,619 3,789 5,931 (38) 57
expansion (up 15 bps qoq) to 2.56%, even as the borrowings cost
PAT 7,673 3,050 4,804 (37) 58
continues to inch up.
Core PBT 13,116 9,377 13,547 3 44
AUM (Rs bn) 2,434 2,623 2,684 10 2
Key ratios (%)
NIM 2.4 1.8 2.4 0 bps 62 bps Credit costs will likley be stable at 44 bps, in line with
Cost-to-income 13.6 21.6 17.5 392 bps -415 bps management's long term guidance.
Mahindra Finance
Key P&L items
PPOP 8,979 9,983 9,882 10 (1) Mahindra Finance has reported 6% qoq and 27% yoy loan growth
Provisions 639 1,551 1,339 110 (14) in 4QFY23E. We expect NIM to compress 10 bpq qoq to 8.1%; we
PBT 8,341 8,431 9,088 9 8 expect about 50 bps qoq increase in borrowing's cost, partially
PAT 6,008 6,290 6,812 13 8 offset by recent rise in lending rates.
Core PBT 8,908 10,100 9,823 10 (3)
AUM (Rs bn) 650 773 823 27 6
Strong collection effeciency (99% in 4QFY23, 100% in 4QFY22)
Key ratios (%)
has driven reduction in gross stage-3 loans to 4.6% (5.9% in
NIM 9.0 8.2 8.1 -94 bps -12 bps
3QFY23, 7.7% in 4QFY22). We expect credit cost to remain
Cost-to-income 41.3 39.5 40.5 -80 bps 105 bps
belign at 0.67% (0.82-3.19% over the last three quarters, 0.4% in
Cost-to-average AUM 3.9 3.4 3.4 -55 bps -7 bps
4QFY23).
Credit cost 0.4 0.8 0.7 27 bps -15 bps
Muthoot
Key P&L items
Operating expenses 5,357 4,905 5,141 (4) 5
PPOP 12,218 12,624 13,346 9 6
Provisions (700) 557 (418) NM (175) Rise in gold prices (9% qoq) will likley drive 5% qoq loan growth
PBT 12,918 12,068 13,764 7 14 even as competition from banks remains high.
PAT 9,603 9,017 10,200 6 13
Core PBT 12,136 12,384 13,069 8 6
AUM (Rs bn) 581 577 607 5 5
Key ratios (%)
NIM 12.2 11.9 12.3 7 bps 41 bps Higher gold prices and buyback of high-yield bonds will drive NIM
Cost-to-income 30.5 28.0 27.8 -267 bps -17 bps (up 40 bps qoq to 12.3%).
Cost-to-average AUM 3.8 3.4 3.5 -33 bps 6 bps
Credit cost (0.5) 0.4 (0.3) 21 bps -67 bps
Shriram Finance
Key P&L items
PPOP 27,068 33,016 32,762 21 (1)
We expect loan growth to remain stable at 5% qoq, similar to
Provisions 9,380 9,173 10,144 8 11
3QFY23. Rise in borrowings cost will lead to 50 bps qoq
PBT 17,689 23,844 22,618 28 (5)
compression in NIM to 10.15%.
PAT 13,896 17,770 16,867 21 (5)
Core PBT 26,031 31,601 31,673 22 0
AUM (Rs bn) 1,602,269 1,774,982 1,859,074 16 5
Key ratios (%)
Cost-to-AAUM ratio to likely remain stable qoq at 2.8%, credit
NIM 10.2 10.7 10.2 -2 bps -51 bps
cost/AUM at 2.2%. 4QFY22 figures are proforma estimates on
merged basis.
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Change (%)
SBI Cards
Key P&L items
Net interest income 9,987 11,446 10,313 3 (10) We expect revenues to grow at ~15% yoy, while NII growth is
Non-interest income 15,842 18,983 19,507 23 3 expected to grow ~3% yoy on the back of ~25% yoy growth in
Operating expenses 15,767 19,745 18,378 17 (7) receivables (share of revolvers likely to move up from FY2022
PPOP 11,720 12,174 13,231 13 9 levels). Non-interest income growth of ~20% yoy is primarily
Provisions 3,928 5,330 5,791 47 9 driven by recovery in spends (~25% yoy). Provisions are
PBT 7,792 6,843 7,440 (5) 9 expected to increase by ~45% yoy as incremental provisions is
PAT 5,809 5,095 5,513 (5) 8 mainly on account of higher spends and normalisation of
Key balance sheet items business.
Net loans (Rs bn) 301,870 373,540 389,391 29 4
Borrowings (Rs bn) 229,820 294,030 298,977 30 2
We expect a similar commentary as of the previous quarter (a)
Key ratios (%)
positive commentary on asset quality with recovery in
Yield on advances (%) 17.4 17.4 17.0 -41 bps -42 bps
discretionary categories like travel and hospitality, and (b)
NIM 12.6 11.3 9.9 -270 bps -139 bps
positive commentary on spend growth for FY2023-24. Key
Cost-to-income 57.4 61.9 58.1 78 bps -372 bps
monitorable would be the ruling on MDR changes, if any.
Cost-to-average assets 18.9 18.7 16.9 -200 bps -178 bps
Nippon AMC
Key P&L items
We are building marginal growth QAAUM in 4QFY23E for the
Total income 3,724 4,157 3,925 5 (6)
domestic MF business reflecting decline in equity indices and
Operating expenses 1,381 1,494 1,438 4 (4)
stable equity market share. Average Nifty-50 was is down ~5%
Employee expenses 745 747 765 3 2
qoq. Focus on the quarter to remain on market share outlook
PBT 2,344 2,664 2,487 6 (7)
given improved fund performance, yield trajectory and cost
PAT 1,748 2,048 1,803 3 (12)
control.
Core PBT 1,999 2,125 2,183 9 3
Closing MF AUM 2,833 2,928 2,943 4 0
We expect ~3% yoy earnings as ~5% yoy revenue growth is
offset ~4% growth in operating expenses. Expect flat yields
Yields (bps)-average of closing MF and PMS AUM 46.4 48.3 47.9 153 bps -37 bps
sequentially on stable asset mix.
Cost-to-income (%) 37.1 35.9 36.6 -43 bps 71 bps
UTI AMC
Key P&L items
Revenue from operations 2,950 2,836 2,839 (4) 0
Total income 2,896 2,762 3,071 6 11
We are building in ~1% qoq increase in QAAUM in 4QFY23E for
Operating expenses 1,923 1,738 1,783 (7) 3
the domestic MF business reflecting growth in non-equity AUM
Employee expenses 1,151 1,041 1,093 (5) 5
while building marginal decline in equity due to MTM and decline
PBT 973 1,024 1,288 32 26
in market share.
PAT 539 600 926 72 54
Core PBT 1,027 1,098 1,113 8 1
Closing MF AUM 957 984 965 1 (2) We expect 8% yoy core PBT growth led by similar decline in
Key ratios and yields (%) operating expenses (base quarter had lumping of costs). Higher
Yields (bps)-average of closing MF and PMS AUM 16.0 16.7 16.6 66 bps -4 bps other income to support 6% income growth while operating
Cost-to-income (%) 66.4 62.9 58.1 -833 bps -487 bps revenues are expected to decline 4% yoy due to yield pressure.
Aditya Birla AMC
Key P&L items
Revenue from operations 3,235 3,140 3,091 (4) (2)
Total income 3,471 3,632 3,413 (2) (6)
We are building in ~2% qoq decline in overall and equity AUM in
4QFY23E for the domestic MF business market share loss in
Employee expenses 669 702 716 7 2
equity. We expect largely stable revenue yields with downside
PBT 2,093 2,227 1,995 (5) (10)
risks given driven by mix effect.
PAT 1,585 1,663 1,501 (5) (10)
Core PBT 1,976 1,816 1,748 (12) (4)
Closing MF AUM 2,958 2,817 2,775 (6) (2)
We expect 5% earnings decline yoy, reflecting 4% yoy growth in
fee income and 3% yoy growth in operating expenses. Focus to
Yields (bps)-average of closing MF and PMS AUM 42.1 42.9 42.8 72 bps -5 bps
remain on market share loss in equity segment.
Cost-to-income (%) 39.7 38.7 41.5 186 bps 286 bps
Banks
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UPDATE
India
Cement—4QFY23 preview Company data and valuation summary

We expect cement industry demand growth of 9-10% yoy in 4QFY23, led by Ticker CMP(Rs) FV (Rs) Rating Upside
strong growth in January-February 2023, partly offset by weakness in March ACC

ACEM
1,688
380
1,950
340
REDUCE
SELL
16%
-11%
2023. According to our channel checks, all-India prices were flat qoq in UTCEM
SRCM
7,692
26,387
6,350
16,750
REDUCE
SELL
-17%
-37%
4QFY23, whereas costs should decline sequentially by 3.3% qoq, led by lower DALBHARA
JKCE
1,980
2,951
2,075
2,300
ADD
SELL
5%
-22%
energy prices and operating leverage. We estimate cement EBITDA/ton to ORCMNT

TRCL
121
761
125
560
REDUCE
SELL
3%
-26%
increase sequentially (+23% qoq, -4% yoy) by ~Rs185/ton for our coverage, NUVOCO 344 410 ADD 19%
mainly led by lower costs. Ticker

P/B (x)
2024E 2025E
P/E (x)
2024E 2025E
EV/EBITDA (x)
2024E 2025E
ACC 1.9 1.7 12.6 10.0 9.5 7.5
ACEM 1.9 1.7 27.0 18.4 13.6 10.6
Dealer checks: Prices remain stable qoq in 4QFY23 UTCEM

SRCM
3.6
4.4
3.2
4.0
25.5
37.1
21.7
33.2
15.0
19.4
13.0
16.9
DALBHARA 2.1 1.9 26.9 20.6 10.8 8.5
According to our checks, all-India prices were flat qoq in 4QFY23, led by firm JKCE 4.1 3.5 26.4 23.4 13.2 11.2
ORCMNT 1.4 1.2 9.7 10.3 7.2 7.3
prices across regions (+1-2% qoq), offset by sharp weakness in the South (- RAMCO 2.4 2.1 25.0 18.9 12.7 10.4
NUVOCO 1.3 1.2 26.5 17.1 8.0 6.9
4.3% qoq). On a monthly basis, prices firmed up in January-February 2023.
However, sluggish demand in March 2023 resulted in price cuts toward the end Source: Bloomberg, Company data, Kotak Institutional Equities estimates
of the quarter. Historically, cement prices firm up 2-3% qoq in 4QFY23. However, Prices in this report are based on the market close of April 05,
focus on volumes and market share by large players led to stagnant prices. 2023
Cost tailwinds to aid margins
Quick Numbers
We expect cement producers to benefit from a sequential decline in energy
costs, led by partial benefits of (1) a sharp 30-40% correction in international
Average prices expected to remain flat qoq in 4QFY23
thermal coal prices, (2) lower premiums and higher availability of domestic coal,
and (3) partial 10-15% sequential reduction in petcoke prices. We expect further Average costs expected to moderate by 3.3% qoq
benefits in FY2024E, given the inventory lag. Furthermore, with 9-10% industry
demand growth, we estimate a Rs50-70/ton benefit from operating leverage. Volumes expected to grow at ~11% for the combined
KIE cement coverage universe
Demand—recovering on low base with speed bumps
Our channel checks suggest that cement demand saw a strong 12-13% growth in
January-February 2023. However, unseasonal rains, labor unavailability and delay
in payments in the non-trade segment led to demand weakness in March 2023. We
estimate 9-10% yoy industry demand growth in 4QFY23 and ~9% yoy growth in
FY2023. We estimate 9% yoy demand growth in FY2024E, factoring pre-election
tailwind and utilizations to increase to 71% versus 67% in FY2023E.
4QFY23 preview: Sequential margin recovery to continue on low base

For our coverage, we estimate an 11.3% yoy volume growth for our coverage
universe, factoring a gain in market share. We expect costs to decline
sequentially by 3.3% qoq (+6.4% yoy), led by lower energy prices and operating
leverage on higher volumes. We estimate cement EBITDA/ton to increase
sequentially (+23% qoq, -4% yoy) to Rs996/ton (+Rs184/ton qoq), mainly led by
lower costs, although the margin expansion quantum is divergent across
companies due to different regional exposures.
In our coverage universe, UTCEM should outperform and ACEM/ACC is likely to

underperform peers on volumes due to plant closure in the North during 4QFY23.
We expect companies with higher exposure to the South to underperform on
margins, led by price weakness during the quarter. Prefer UTCEM and Dalmia, SELL
Ramco and SRCM.
Sumangal Nevatia Siddharth Mehrotra

47
Current price trends suggest prices are stable qoq in 4QFY23E

Exhibit 1: Quarterly trend in cement prices in India across geographies, March fiscal year-ends, 4QFY21-23 (Rs per 50 kg bag)
4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23E 4QFY23E
North 362 364 362 377 377 410 377 376 382
Central 355 359 356 369 369 410 386 384 398
East 317 346 338 334 349 371 359 379 385
West 329 347 354 366 362 389 375 385 392
South 364 388 371 380 384 387 397 398 381
All India average 350 366 359 369 372 394 382 387 387
Change per bag (%, qoq)
North (1.4) 0.4 (0.4) 4.2 (0.0) 8.6 (8.0) (0.3) 1.6
Central (1.1) 1.2 (0.8) 3.5 0.2 11.0 (6.0) (0.4) 3.5
East (1.8) 9.0 (2.4) (1.0) 4.4 6.3 (3.2) 5.8 1.5
West (1.6) 5.7 1.9 3.4 (0.9) 7.4 (3.6) 2.8 1.6
South (3.3) 6.5 (4.1) 2.4 1.0 0.8 2.4 0.3 (4.3)
All India average (2.1) 4.5 (1.7) 2.6 0.8 5.9 (2.9) 1.2 (0.0)
Change per bag (%, yoy)
North 1.1 (1.5) 0.9 2.7 4.1 12.6 4.1 (0.4) 1.3
Central (0.3) (1.0) 0.4 2.7 4.0 14.1 8.2 4.2 7.6
East (7.3) (0.0) 1.4 3.4 9.9 7.1 6.3 13.6 10.5
West (0.7) (2.1) 3.6 9.5 10.3 12.0 6.0 5.4 8.0
South 8.5 (1.1) (2.1) 1.0 5.5 (0.1) 6.8 4.6 (0.8)
All India average 1.8 (1.2) 0.2 3.3 6.3 7.7 6.4 4.9 4.0
Source: Industry Data, Bloomberg, Kotak Institutional Equities estimates
International petcoke prices in 4QFY23 are down 7% versus 3QFY23 level

Exhibit 2: US petcoke prices (CFR basis), March 2019-23 (US$/ton)
Pet Coke Prices (US$/ton) (LHS) mom % (RHS) 3 MA % (RHS)

290 140%
120%
240 100%
80%
190 60%
40%
140 20%
0%
90 -20%
-40%
40 -60%
Jun-19
Jun-20
Jun-21
Jun-22
Dec-19
Dec-20
Dec-21
Dec-22
Sep-19
Sep-20
Sep-21
Sep-22
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
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Domestic petcoke prices in 4QFY23 are down 3% versus 3QFY23 level

Exhibit 3: Domestic petcoke prices, March 2019-23 (US$/ton)
Pet Coke Prices (Rs/ton) (LHS) Mom % (RHS) 3 MA % (RHS)
25,000 120%
100%
20,000
80%
15,000 60%
40%
10,000 20%
0%
5,000
-20%
0 -40%
Sep-19
Sep-20
Sep-21
Sep-22
Jun-19
Jun-20
Jun-21
Jun-22
Dec-19
Dec-20
Dec-21
Dec-22
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Imported coal prices continued correction in 4QFY23, but benefits will flow with lag
Exhibit 4: Coal prices at Richard Bay, March 2019-23 (US$/ton)
Richard Bay (US$/ton) (LHS)

390
340
290
240
190
140
90
40
Jun-19
Jun-20
Jun-21
Jun-22
Dec-19
Dec-20
Dec-21
Dec-22
Sep-21
Sep-22
Sep-19
Sep-20
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
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Diesel prices in India have been stable since past 8-9 months
Exhibit 5: Average retail price of diesel in major cities in India, March 2019-23 (US$/ton)
Diesel Prices (Rs/litre) Crude prices (US$/bbl) (RHS)

110 140
100 120
100
90
80
80
60
70
40
60 20
50 -
Jun-19
Jun-20
Jun-21
Jun-22
Sep-19
Sep-20
Sep-21
Sep-22
Dec-21
Dec-22
Dec-19
Dec-20
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Cement spreads recovering from low base albeit at gradual pace

Exhibit 6: Spreads and EBITDA/ton for Indian cement companies, September 2016-March 2023 (Rs/ton)
Spreads: Cement price (-) energy costs (-) freight costs (LHS) EBITDA/ton (Rs) (RHS)
4,500 1,700
4,000 1,500
1,300
3,500
1,100
3,000
900
2,500
700
2,000 500
Jun-19
Jun-22
Jun-17
Jun-18
Jun-20
Jun-21
Sep-16
Dec-16
Dec-17
Dec-18
Sep-19
Dec-19
Dec-20
Dec-21
Dec-22
Sep-17
Sep-18
Sep-20
Sep-21
Sep-22
Mar-18
Mar-22
Mar-17
Mar-19
Mar-20
Mar-21
Mar-23
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According to DIPP, cement volumes grew 7.3%/9.7% yoy in February 2023/YTD FY2023
Exhibit 7: Monthly cement production volumes in India, February 2017-23 (mn tons, %)
Demand (mn tons) (LHS) 3 MA % (RHS)

40
90
35
70
30
50
25
30
20
15 10
10 (10)
5 (30)
- (50)
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
May-17
May-18
May-19
May-20
May-21
May-22
Feb-17
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
Feb-23
Aug-22
Aug-17
Aug-18
Aug-19
Aug-20
Aug-21
We expect volumes for coverage companies to increase nearly 11% yoy in 4QFY23E
Exhibit 8: Quarterly volumes for cement companies, March year-ends, 4QFY21-23E (mn tons)
Growth %
Volumes (mn tons) 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E yoy qoq
ACC 8.0 6.8 6.6 7.5 7.8 7.6 6.9 7.7 8.3 6.0 7.4
Ambuja 7.2 6.4 6.2 7.0 7.5 7.4 6.7 7.7 7.9 6.0 3.1
Ultratech 26.6 20.5 20.4 21.4 26.3 24.1 22.1 24.7 30.5 15.8 23.7
Shree Cement 8.2 6.8 6.3 6.6 8.0 7.5 7.5 8.0 8.8 10.0 9.9
JK Cement 3.9 3.0 3.3 3.3 3.9 3.6 3.6 3.9 4.5 15.5 15.4
Nuvoco Cement 5.6 4.3 3.8 4.2 5.5 4.7 4.4 4.5 5.5 - 22.2
Dalmia Cement 6.4 4.9 5.1 5.7 6.6 6.2 5.8 6.3 7.4 12.0 17.3
Orient Cement 1.9 1.4 1.3 1.2 1.6 1.4 1.2 1.4 1.8 8.0 22.4
Ramco Cement 3.2 2.1 2.7 3.0 3.2 3.3 3.3 3.6 3.7 17.0 4.6
Total (coverage) 71.0 56.3 55.7 59.9 70.5 65.7 61.6 67.8 78.5 11.3 15.7
We expect realization/ton to remain stable on sequential basis in 4QFY23E

Exhibit 9: Quarterly realization/ton for cement companies, March year-ends, 4QFY21-23E (Rs/ton)
Growth %
Realization (Rs/ton) 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E yoy qoq
ACC 5,385 5,680 5,706 5,642 5,675 5,911 5,821 5,892 5,905 4.1 0.2
Ambuja 5,002 5,251 5,221 5,336 5,241 5,404 5,446 5,362 5,451 4.0 1.7
Ultratech 5,245 5,577 5,643 5,783 5,752 6,095 6,076 6,078 6,092 5.9 0.2
Shree Cement 4,815 5,041 5,104 5,422 5,105 5,602 5,071 5,065 5,169 1.3 2.1
JK Cement 5,270 5,407 5,545 5,842 5,773 6,084 5,878 5,821 5,853 1.4 0.6
Nuvoco Cement 4,699 5,123 5,315 5,119 5,328 5,644 5,456 5,788 5,767 8.2 (0.4)
Dalmia Cement 4,900 5,294 4,943 4,796 5,121 5,326 5,122 5,325 5,264 2.8 (1.1)
Orient Cement 4,495 5,076 4,798 5,070 4,959 5,189 4,978 5,121 4,978 0.4 (2.8)
Ramco Cement 5,090 5,767 5,547 5,163 5,368 5,376 5,419 5,635 5,449 1.5 (3.3)
Average (coverage) 5,087 5,414 5,426 5,491 5,489 5,779 5,654 5,708 5,733 4.5 0.4
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Cost/ton is expected to decline around 3% qoq in 4QFY23E as raw material prices soften further after 2QFY23 peak
Exhibit 10: Quarterly cost/ton for cement companies, March year-ends, 4QFY21-23E (Rs/ton)
Growth %
Costs (Rs/ton) 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E yoy qoq
ACC 4,307 4,401 4,623 4,901 4,863 5,348 5,798 5,401 5,229 7.5 (3.2)
Ambuja 3,653 3,756 4,087 4,525 4,185 4,478 4,994 4,549 4,433 5.9 (2.5)
Ultratech 3,889 3,987 4,318 4,717 4,605 4,848 5,260 5,168 4,986 8.3 (3.5)
Shree Cement 3,377 3,560 3,674 4,162 3,971 4,511 4,369 4,184 4,009 1.0 (4.2)
JK Cement 4,042 4,085 4,551 4,725 4,800 4,960 5,064 5,152 4,968 3.5 (3.6)
Nuvoco Cement 3,763 3,927 4,445 4,582 4,555 4,876 5,020 5,192 4,960 8.9 (4.5)
Dalmia Cement 3,712 3,863 3,867 4,075 4,088 4,376 4,472 4,302 4,191 2.5 (2.6)
Orient Cement 3,400 3,708 3,749 4,105 4,013 4,446 4,715 4,489 4,362 8.7 (2.8)
Ramco Cement 3,691 4,055 4,071 4,402 4,444 4,460 4,852 4,842 4,633 4.3 (4.3)
Average (coverage) 3,813 3,945 4,212 4,558 4,454 4,761 5,047 4,896 4,737 6.4 (3.3)
Recovery in EBITDA/ton for cement companies should further continue, led by moderating costs
Exhibit 11: Quarterly EBITDA/ton for cement companies, March year-ends, 4QFY21-23E (Rs/ton)
Growth %
EBITDA (Rs/ton) 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E yoy qoq
ACC 1,078 1,279 1,083 741 812 563 23 491 676 (16.7) 37.7
Ambuja 1,349 1,495 1,134 811 1,055 926 452 813 1,018 (3.5) 25.2
Ultratech 1,356 1,590 1,325 1,067 1,147 1,247 816 910 1,106 (3.6) 21.5
Shree Cement 1,439 1,481 1,430 1,260 1,134 1,092 701 881 1,160 2.3 31.6
JK Cement 1,228 1,323 994 1,116 974 1,124 814 669 885 (9.1) 32.4
Nuvoco Cement 936 1,196 870 536 773 768 436 596 806 4.4 35.3
Dalmia Cement 1,188 1,431 1,076 721 1,033 950 650 1,024 1,073 3.9 4.8
Orient Cement 1,095 1,368 1,048 965 946 743 263 632 616 (34.9) (2.5)
Ramco Cement 1,399 1,712 1,475 761 924 916 567 793 816 (11.7) 2.9
Average (coverage) 1,273 1,469 1,214 932 1,035 1,018 607 812 996 (3.7) 22.7
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Exhibit 12: Quarterly estimates for KIE coverage universe, 4QFY23E

Change (%)
ACC
Net sales 44,265 45,370 48,823 10.3 7.6 We estimate volume of 8.3 mn tons (+6% yoy, +7.4% qoq) during the quarter factoring strong growth in
January-February 2023 and seasonal tailwinds. We estimate blended realizations to increase by 0.2% qoq
EBITDA 6,337 3,783 5,593 (11.7) 47.8 (+4.1% yoy) led by muted prices towards the second half of the quarter.
Reported PAT 3,918 1,104 3,072 (21.6) 178.1 We estimate costs/ton to decline sequentially (+7.5% yoy, -3.2% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs676/ton (-17% yoy, +38% qoq) led by
EBITDA margin (%) 14.3 8.3 11.5 -287 bps 311 bps lower costs.
Ambuja Cements
Net sales 39,252 41,285 43,281 10.3 4.8 We estimate volume of 7.9 mn tons (+6% yoy, +3.1% qoq) during the quarter factoring strong growth in
January-February 2023 and seasonal tailwinds. We estimate blended realizations to increase by 1.7% qoq (+4%
EBITDA 7,904 6,261 8,082 2.3 29.1 yoy) led by price hikes in first half of the quarter.
Reported PAT 4,952 3,690 5,304 7.1 43.7 We estimate costs/ton to decline sequentially (+5.9% yoy, -2.5% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs1018/ton (-3.5% yoy, +25% qoq) led by
Shree Cement
Net sales 40,988 40,688 45,653 11.4 12.2 We estimate volume of 8.8 mn tons (+10% yoy, +10% qoq) during the quarter factoring strong growth in
EBITDA 9,106 7,080 10,246 12.5 44.7 (+1.3% yoy) led by price hikes in the first half of the quarter.
Reported PAT 6,452 2,768 5,120 (20.6) 85.0 We estimate costs/ton to decline sequentially (+1% yoy, -4.2% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs1160/ton (+2.3% yoy, +32% qoq) led by
EBITDA margin (%) 22.2 17.4 22.4 22 bps 504 bps higher realizations and lower costs.
UltraTech Cement (India business)
Net sales 151,500 149,890 185,794 22.6 24.0 We estimate domestic volume of 30.5 mn tons (+15% yoy, +24% qoq) during the quarter factoring strong
growth in January-February 2023 and seasonal tailwinds. We estimate blended realizations to stay stable with
EBITDA 30,210 22,440 33,725 11.6 50.3 +0.2% qoq increase (+5.9% yoy) led by muted prices towards the second half of the quarter.
Reported PAT 14,680 9,890 17,353 18.2 75.5 We estimate costs/ton to decline sequentially (+8.3% yoy, -3.5% qoq) largely led by power-fuel cost and
Orient Cement
January-February 2023 and seasonal tailwinds. We estimate blended realizations to decline by 2.8% qoq
EBITDA 1,533 903 1,078 (29.7) 19.4 (+0.4% yoy) led by muted prices towards the second half of the quarter.
Reported PAT 732 275 404 (44.9) 46.8 We estimate costs/ton to decline sequentially (+8.7% yoy, -2.8% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to decrease marginally to Rs616/ton (-35% yoy, -2.5%
EBITDA margin (%) 19.1 12.3 12.4 -671 bps 3 bps qoq) led by lower realizations and lower costs.
Dalmia Bharat
EBITDA 6,820 6,450 7,933 16.3 23.0 (+2.8% yoy) led by muted prices towards the second half of the quarter.
Reported PAT 5,950 2,040 3,246 (45.4) 59.1 We estimate costs/ton to decline sequentially (+2.5% yoy, -2.6% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs1073/ton (+3.9% yoy, +4.8% qoq) led by
EBITDA margin (%) 20.2 19.2 20.4 20 bps 116 bps lower realizations and lower costs.
J K Cement
EBITDA 3,827 2,628 4,018 5.0 52.9 (+1.4% yoy) despite muted prices towards the second half of the quarter.
Reported PAT 863 966 1,985 130.1 105.5 We estimate costs/ton to decline sequentially (+3.5% yoy, -3.6% qoq) largely led by power-fuel cost and
EBITDA margin (%) 16.9 11.5 15.1 -174 bps 364 bps higher realizations and lower costs.
The Ramco Cements
Net sales 17,134 20,116 20,350 18.8 1.2 We estimate volume of 3.7 mn tons (+17% yoy, 4.6% qoq) during the quarter factoring strong growth in
EBITDA 2,949 2,831 3,047 3.3 7.7 (+1.5% yoy) led by muted prices towards the second half of the quarter in southern region.
Reported PAT 1,233 656 815 (33.9) 24.2 We estimate costs/ton to decline sequentially (+4.3% yoy, -4.3% qoq) largely led by power-fuel cost and
operating leverage. We estimate cement EBITDA/ton to increase to Rs816/ton (-11.7% yoy, +2.9% qoq) led by
EBITDA margin (%) 17.2 14.1 15.0 -224 bps 90 bps lower realizations and lower costs.
Nuvoco Vistas Corp
EBITDA 4,249 2,683 4,436 4.4 65.3 (+8.2% yoy) led by muted prices towards the second half of the quarter.
Reported PAT 291 (753) 509 74.9 NM We estimate costs/ton to decline sequentially (+8.9% yoy, -4.5% qoq) largely led by power-fuel cost and
EPS (Rs/share) 0.8 (2.1) 1.4 74.9 NM operating leverage. We estimate cement EBITDA/ton to increase to Rs806/ton (+4.4% yoy, +35% qoq) despite
EBITDA margin (%) 14.5 10.3 14.0 -52 bps 368 bps slightly lower realizations on the back of lower costs.
Grasim Industries
Net sales 63,764 61,956 66,861 4.9 7.9 We model a 3% yoy volume decline in VSF operations and +9.4% yoy volume increase in the chemical
EBITDA 7,526 4,770 8,008 6.4 67.9 operations led by ramp-up of new capacity partly offset by near-term demand headwinds.
Reported PAT 8,136 2,574 4,041 (50.3) 57.0 We expect margins to recover from cyclical lows in the VSF division and moderate in the chemicals divison
EPS (Rs/share) 13.4 3.9 6.2 (54.2) 57.0 sequentially. We estimate (1) VSF EBITDA of Rs 3.1 bn (+25% yoy, +400% qoq) on improved realizations and
EBITDA margin (%) 11.8 7.7 12.0 17 bps 427 bps lower costs , and (2) chemicals EBITDA of Rs 4.2 bn (-16% yoy, -14% qoq) mainly on account of lower prices.
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We estimate lower EBITDA/ton in FY2023E for cement companies, led by higher costs
Exhibit 13: Realization/ton, costs/ton, EBITDA/ton and volumes, March fiscal year-ends, 2019-25E (Rs/ton, mn tons)
% Change
2019 2020 2021 2022 2023E 2024E 2025E 2020 2021 2022 2023E 2024E 2025E
Realization (Rs/ton)
ACC 5,212 5,419 5,399 5,591 5,878 6,151 6,211 4 (0) 4 5 5 1
Ambuja Cements 4,697 4,870 5,025 5,270 5,403 5,528 5,638 4 3 5 3 2 2
Ultratech Cement 4,916 5,392 5,619 6,027 6,129 6,251 6,377 10 4 7 2 2 2
Shree Cement 4,533 4,776 4,690 5,157 5,234 5,339 5,446 5 (2) 10 2 2 2
J K Cement 5,173 5,741 5,690 5,653 5,957 6,095 6,238 11 (1) (1) 5 2 2
Dalmia Bharat 5,077 5,039 4,884 5,036 5,318 5,404 5,593 (1) (3) 3 6 2 3
Orient Cement 3,925 4,171 4,599 4,959 5,083 5,185 5,288 6 10 8 2 2 2
The Ramco Cements 4,641 4,811 5,303 5,434 5,546 5,635 5,804 4 10 2 2 2 3
Nuvoco Vistas Corp 5,566 5,092 4,710 5,226 5,723 5,780 5,895 (9) (8) 11 10 1 2
Average 4,860 5,035 5,102 5,373 5,586 5,708 5,832 4 1 5 4 2 2
Costs (Rs/ton)
ACC 4,494 4,585 4,428 4,552 5,329 5,249 5,147 2 (3) 3 17 (1) (2)
Ambuja Cements 4,697 4,870 5,025 5,270 5,403 5,528 5,638 4 3 5 3 2 2
Ultratech Cement 4,046 4,244 4,195 4,726 5,064 4,913 4,979 5 (1) 13 7 (3) 1
Shree Cement 3,507 3,302 3,217 3,842 4,250 4,014 4,053 (6) (3) 19 11 (6) 1
J K Cement 4,331 4,500 4,294 4,562 5,046 4,940 5,027 4 (5) 6 11 (2) 2
Dalmia Bharat 4,037 3,942 4,323 3,951 4,323 4,245 4,313 (2) 10 (9) 9 (2) 2
Orient Cement 3,446 3,515 3,512 3,896 4,470 4,343 4,418 2 (0) 11 15 (3) 2
The Ramco Cements 3,702 3,786 3,742 4,266 4,749 4,469 4,573 2 (1) 14 11 (6) 2
Nuvoco Vistas Corp 4,842 4,121 3,791 4,387 5,029 4,849 4,957 (15) (8) 16 15 (4) 2
Average 4,122 4,096 4,059 4,384 4,852 4,728 4,789 (1) (1) 8 11 (3) 1
EBITDA (Rs/ton)
ACC 718 834 972 1,039 549 902 1,064 16 17 7 (47) 64 18
Ambuja Cements 782 897 1,170 1,210 884 1,190 1,325 15 30 3 (27) 35 11
Ultratech Cement 870 1,148 1,424 1,301 1,065 1,338 1,398 32 24 (9) (18) 26 4
Shree Cement 1,026 1,474 1,473 1,315 985 1,325 1,393 44 (0) (11) (25) 35 5
J K Cement 841 1,241 1,396 1,091 911 1,155 1,211 48 12 (22) (17) 27 5
Dalmia Bharat 1,040 1,097 1,338 1,085 995 1,160 1,280 6 22 (19) (8) 17 10
Orient Cement 487 660 1,090 1,079 630 859 887 36 65 (1) (42) 36 3
The Ramco Cements 939 1,024 1,561 1,168 797 1,166 1,231 9 52 (25) (32) 46 6
Nuvoco Vistas Corp 724 971 919 839 693 931 938 34 (5) (9) (17) 34 1
Average 825 1,039 1,260 1,125 834 1,114 1,192 26 21 (11) (26) 34 7
Volumes (mn tons)
ACC 28 29 26 29 38 34 39 2 (12) 13 32 (12) 15
Ambuja Cements 24 24 23 27 37 31 36 (1) (6) 17 39 (15) 15
Ultratech Cement 86 82 86 94 106 116 124 (4) 5 9 12 9 7
Shree Cement 25 24 26 28 32 35 38 (4) 8 7 15 10 8
J K Cement 10 10 11 14 16 17 19 (1) 17 22 14 11 11
Dalmia Bharat 19 19 21 22 26 33 38 3 8 8 16 27 15
Orient Cement 6 6 5 5 6 6 7 (10) (13) 8 5 8 7
The Ramco Cements 11 11 10 11 14 15 17 1 (11) 11 25 11 12
Nuvoco Vistas Corp 13 17 16 18 20 22 24 37 (8) 12 11 10 10
Total 222 222 223 247 293 309 341 0.2 0.5 10.9 18.5 5.3 10.4
We estimate +8.6%/9% yoy demand growth in FY2023/24E to raise industry utilization

Exhibit 14: Realization/ton, costs/ton, EBITDA/ton and volumes, March fiscal year-ends, 2019-25E (Rs/ton, mn tons)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E
Cement capacity (mtpa) 348 374 417 433 453 468 484 505 531 550 581 602 641
Cement demand 247 256 271 283 280 298 337 334 335 359 390 425 446
Growth yoy (%) 7 4 6 5 (1) 6 13 (1) 0.2 7.0 8.6 9.0 5.0
Capacity utilization (%) 71 68 65 65 62 64 70 66 63 65 67 71 70
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Exhibit 15: Valuation summary for cement companies in coverage companies

CMP (Rs) Target price EPS (Rs) P/E (X) EV/ton of capacity (US$) EV/EBITDA (X) RoE(%)
Company 4-Apr (Rs) Rating 2021 2022 2023E 2024E 2025E 2021 2022 2023E 2024E 2025E 2021 2022 2023E 2024E 2025E 2021 2022 2023E 2024E 2025E 2021 2022 2023E 2024E 2025E
Large-cap. stocks
ACC 1,688 1,950 REDUCE 97 58 96 134 169 17 29 18 13 10 104 94 88 89 83 10.4 8.1 12.8 9.5 7.5 13.5 7.6 11.9 15.5 17.9
Ambuja Cements 380 340 SELL 13 15 13 14 21 28 26 29 27 18 202 185 172 164 142 17.9 14.3 16.2 13.6 10.6 12.0 9.5 8.4 9.7 11.2
UltraTech Cement 7,692 6,350 REDUCE 193 196 194 301 354 40 39 40 26 22 264 250 208 194 168 19.8 19.6 21.0 15.0 13.0 12.6 11.2 10.2 14.1 14.6
Shree Cement 26,387 16,750 SELL 641 659 408 711 795 41 40 65 37 33 280 261 244 223 186 22.8 24.8 28.9 19.4 16.9 16.4 14.6 8.2 13.1 13.1
Mid-cap. stocks
Dalmia Bharat 1,980 2,075 ADD 65 62 43 74 96 30 32 46 27 21 161 131 128 101 93 13.3 14.5 14.3 10.8 8.5 10.3 8.0 5.0 8.0 9.7
J K Cement 2,951 2,300 SELL 94 89 81 112 126 32 33 36 26 23 200 203 176 135 123 15.9 16.8 18.4 13.2 11.2 21.0 17.0 11.7 16.5 16.8
Orient Cement 121 125 REDUCE 10 13 8 12 12 12 9 16 10 10 77 62 57 69 83 5.6 4.6 7.1 7.2 7.3 14.2 14.5 4.5 9.9 11.9
The Ramco Cements 761 560 SELL 32 38 13 30 40 23 20 59 25 19 143 148 137 134 118 13.4 16.8 20.7 12.7 10.4 3.5 3.2 2.4 5.5 7.0
Nuvoco Vistas Corp 344 410 ADD (1) 1 (0) 13 20 -418 383 -2224 26 17 106 98 89 79 75 12.0 11.6 12.4 8.0 6.9 11.5 6.6 3.1 8.0 12.6
India Research
UPDATE
Consumer Staples
India
Staples resilient, weakness in discretionary continues

We expect (1) broadly stable growth trends for staples, with a sequential margin
improvement for most, (2) continued weakness in the discretionary pack
(especially QSR), with a few exceptions (TTAN, VBL, ITC), and (3) DD value
growth in decorative paints, partly attributable to a distorted base (2H trends
should reflect underlying demand). VBL, GCPL, ITC and TTAN should report a
good print, whereas QSR (especially JUBI), UNSP and UBBL should report a
weak quarter.
Staples—expect resilient demand with sequential improvement in margins

We expect LSD-to-MSD volume growth and HSD-to-DD value growth for FMCG
players, driven by resilient demand (rural has bottomed out but is yet to register
growth pickup). We expect GCPL to lead the pack. Growth expectations: (1) GCPL:
14%/9% value/volume growth in India, aided by strong growth in HI (weak base
and stocking on the new LUP in the channel) and robust growth across segments ;
(2) HUVR: 13% yoy revenue growth and 6% UVG; (3) BRIT: 14% yoy revenue growth,
primarily led by pricing; volume growth of 4%; (4) NEST: 13% yoy revenue growth,
entirely led by pricing (marginal decline in tonnage); (5) soft print from Dabur
(2%/6% volume/value growth in India), Marico (LSD/MSD) and CLGT (flat/1.4%) ;
and (6) decent recovery in tea volumes and resilient foods sales for TCPL.
Discretionary—weak underlying demand across the board with a few exceptions

Decorative paints had a good start to the March quarter (January 2022 was
impacted by Omicron), but growth moderated in March due to a high base. We
would focus on 2H growth as against 4Q (15% price hike last year shifted some
sales from 4QFY22 to 3QFY22, distorting the base quarter) to assess underlying
demand trends. Our 4Q forecast implies 2H decorative paints growth of : (1)
APNT: 7%/7.5% value/volume growth (reported) and LSD volume growth (ex-
putty), (2) BRGR: 9% value growth, and (3) KNPL: 8.4% value growth, in line with
industry after 3-4 years of underperformance. We estimate 8% (LFL) standalone
revenue growth in 4Q for PIDI. Higher gold prices (~8-10%) likely weighed on
jewelry demand in March; we estimate 15% jewelry sales growth for TTAN in 4Q
(implies 15.4% 4-yr CAGR in 4Q versus 19.4%/19.1%/20.8% in 3Q/2Q/1QFY23).
For ITC, we model 15% yoy cigarette volume growth (4.5% 4-yr CAGR versus
+5.2%/+4.6% in 3Q/2QFY23) and 17% cigarette EBIT growth (+17% in 3Q). Despite
the disruption of summer following hailstorms in the Delhi/NCR region, we expect
strong 27%/20.3% yoy growth in revenues/volumes for VBL (share gains, 100%+
growth in Sting). Weakness in QSR continues—we estimate (1) JUBI: 2% yoy
revenue growth (15% store growth; 9-10% SSS decline), (2) slightly higher-than-
usual seasonal qoq decline in ADS of McD and BK; we estimate 12% SSSG for
Related Research
WLDL (versus 20% in 3Q), (3) 2-3% SSSG for KFC and MSD SSS decline (yoy) for
PH. We model 47 mn cases for UBBL, up 4% yoy (similar to 3Q) after factoring in → Consumer Staples: Month in review -
some volume impact (akin to 3Q) pertaining to RTM changes in TN/AP. UNSP: We → February
Consumer2023
Staples: 3QFY23 review -
estimate 14% yoy growth in P&A (7%/7% volume/price-mix) and a 25% decline in normalization
→ Consumer of revenue
Staples: CAGR
3QFY23 trends
preview:
EBITDA (adjusted for the divested portfolio) due to GM decline and higher A&P. Discretionary growth decelerates; staples
Fullresilient
sector coverage on KINSITE
Jaykumar Doshi Umang Mehta Praneeth Reddy

56
Fair Value changes

We change the FVs of select companies to factor in earnings upside/downside risks: (1) GCPL’s FV is
revised to Rs1,075 from Rs1,020, (2) JUBI’s FV is revised to Rs500 from Rs530, (3) RBA’s FV is revised
to Rs105 from Rs115, (4) Westlife’s FV is revised to Rs790 from Rs820, (5) UNSP’s FV is revised to Rs900
from Rs925, and (6) Marico’s FV is revised to Rs515 from Rs525.
Aggregate sectoral trends (in charts)
Discretionary sector to witness deceleration in revenue growth yoy

KIE consumer universe yoy revenue growth trends for 9MFY23 and 4QFY23E (Rs mn, %)
Revenues Revenues
9MFY23 9MFY22 yoy (%) 4QFY23E 4QFY22 yoy (%)
Staples
Britannia Industries 122,774 105,858 16.0 40,347 35,505 13.6
Colgate 38,756 37,985 2.0 13,193 13,013 1.4
Dabur (standalone) 67,449 63,272 6.6 19,658 18,523 6.1
GCPL (standalone) 58,442 53,162 9.9 18,654 16,353 14.1
HUL 442,510 377,310 17.3 152,774 134,620 13.5
Jyothy Labs 18,679 16,486 13.3 6,190 5,462 13.3
Marico (standalone) 57,760 58,140 (0.7) 17,479 16,860 3.7
Nestle 128,844 110,986 16.1 44,598 39,509 12.9
Tata Consumer (standalone) 63,610 59,839 6.3 21,746 19,484 11.6
Staples 998,823 883,037 13.1 334,638 299,329 11.8
Discretionary
Asian Paints (standalone) 224,524 184,289 21.8 77,060 67,596 14.0
Berger 81,242 65,743 23.6 24,754 21,875 13.2
Devyani International 22,427 14,933 50.2 7,467 5,907 26.4
ITC 496,453 408,104 21.6 169,729 155,309 9.3
Jubilant Foodworks 38,437 32,060 19.9 11,757 11,579 1.5
Kansai Nerolac 54,759 44,709 22.5 15,948 14,071 13.3
Pidilite Industries 91,099 74,139 22.9 27,171 25,071 8.4
Restaurant Brands Asia (standalone) 10,747 6,750 59.2 3,523 2,687 31.1
Sapphire Foods 17,052 12,247 39.2 5,678 4,968 14.3
Titan 285,660 199,340 43.3 79,758 72,760 9.6
United Breweries 57,272 41,251 38.8 17,961 17,069 5.2
United Spirits 78,056 69,278 12.7 23,371 24,351 (4.0)
Varun Beverages 103,457 65,823 57.2 35,888 28,275 26.9
Westlife Foodworld 17,214 11,211 53.5 5,526 4,550 21.5
Indigo Paints 7,479 6,176 21.1 3,361 2,884 16.6
Discretionary 1,585,878 1,236,052 28.3 508,952 458,951 10.9
Total 2,584,701 2,119,089 22.0 843,591 758,280 11.3
Note: Standalone revenue considered for APNT, RBA, Dabur, MRCO, TCPL and GCPL
Consumer Staples
India Research
57
Our latest revenue estimates for 4QFY23E are lower than our post-3QFY23 estimates for most names
KIE consumer universe—old and latest net revenue estimate for 4QFY23E (Rs mn, %)
4QFY23 revenue estimate
Company
Post 3QFY23 (Rs mn) 4QFY23E Preview (Rs mn) Change (%)
Staples
Britannia Industries 40,913 40,347 (1.4)
Colgate 12,913 13,193 2.2
Dabur (standalone) 20,539 19,658 (4.3)
GCPL (standalone) 17,773 18,654 5.0
HUL 153,783 152,774 (0.7)
Jyothy Labs 6,190 6,190 0.0
Marico (standalone) 17,173 17,479 1.8
Nestle NA 44,911 NA
TataCons (standalone) 20,582 21,746 5.7
Discretionary
Asian Paints (standalone) 73,609 77,060 4.7
Berger 25,141 24,754 (1.5)
Devyani International 7,952 7,467 (6.1)
ITC 167,056 169,729 1.6
Indigo Paints 3,302 3,361 1.8
Jubilant Foodworks 12,976 11,757 (9.4)
Kansai Nerolac 15,867 15,948 0.5
Pidilite Industries 27,792 27,171 (2.2)
Restaurant Brands Asia (standalone) 3,813 3,523 (7.6)
Sapphire Foods 5,848 5,678 (2.9)
Titan recurring jewelry sales 74,705 70,577 (5.5)
United Breweries 18,539 17,961 (3.1)
United Spirits 23,503 23,371 (0.6)
Varun Beverages NA 35,888 NA
Westlife Foodworld 5,842 5,526 (5.4)
Note: Standalone revenue considered for APNT, RBA, Dabur, MRCO, and GCPL
Staples to continue growth outperformance versus discretionary sector

KIE consumer universe company-wise revenue growth estimate for 4QFY23E, yoy (%)
35
30
25
20
15 31
27 26
10 21
17 14 14 14 13 13 13 13 13 12 11
5 10 9 8 8 5 4
- 2 1
(4)
(5)
(10)
Restaurant Brands Asia…
United Spirits
Nestle
GCPL
Titan
Dabur
Varun Beverages
Marico
Colgate
Tata Consumer
Berger
HUL
United Breweries
Sapphire Foods
Indigo Paints
Jyothy Labs
Pidilite Industries
Asian Paints
ITC
Kansai Nerolac
Westlife Foodworld
Jubilant Foodworks
Consumer Staples
India Research
58
Volume growth trends

KIE consumer universe company-wise volume growth trends, yoy (%)
20
15
17
10 13 13
5 8
6 5 5 5
- 4 4 (5) (5)
2
(5) -
(10)
(15)
(20)
(26)
(25)
(30)
HUL - FMCG
Colgate - Overall
United Spirits (overall)

Britannia - Domestic
Marico - Parachute
Marico - Domestic
Asian Paints
KNPL
Marico - Saffola
Berger
Pidilite - Domestic CBP
Dabur - Domestic
Marico - VAHO
UBBL (overall)
Titan - Jewelry (tonnage)

Revenue growth for KIE consumer universe would be about 11.2%

KIE consumer universe revenue growth trends, yoy (%)
50
40
40.9
30 36.8
30.8
20
21.0 19.7
18.7
10
13.2 11.9 11.2
10.5 8.6
- 7.2 6.5 (4.7) 5.1
(10)
(20) (23.0)
(30)
4QFY23E
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
Consumer Staples
India Research
59
Staples—we expect revenue growth of 11.5% Discretionary—we expect revenue growth of 10.9% (11.7% ex-ITC)
KIE consumer staples universe revenue growth KIE consumer discretionary universe revenue growth
trends, yoy (%) trends, yoy (%)
30 80
25 60 66.9 67.2
25.2
20 40
12.6 35.4 30.8
15 20 23.1 10.9
15.6 7.2 11.5 27.8
14.8 13.1 6.4
10 13.3 13.0 11.5 7.3 13.9
-
10.5 12.0 (5.9) (1.6)
9.4 9.2
5 7.9 7.2 (20)
5.5
3.6 (43.1)
- (3.1) (40)
(5) (60)
4QFY23E
1QFY20
1QFY21
2QFY21
3QFY21
2QFY22
3QFY22
4QFY22
2QFY20
3QFY20
4QFY20
4QFY21
1QFY22
1QFY23
2QFY23
3QFY23
2QFY20
1QFY21
3QFY21
4QFY21
2QFY22
4QFY22
1QFY23
3QFY23
1QFY20
3QFY20
4QFY20
2QFY21
1QFY22
3QFY22
2QFY23
4QFY23E
Source: Company, Kotak Institutional Equities estimates Source: Company, Kotak Institutional Equities estimates
Easing-off raw material inflation to boost EBITDA growth yoy

KIE consumer universe company-wise EBITDA growth estimate for 4QFY23E, yoy (%)
100
80
60 77
71
40
48
43
20 35 34 13 9 1
26 25 23 23 21 14 16 14 11 7 1
-
(10) (19)
(20) (32) (37)
(40)
(60)
United Spirits
Nestle
GCPL
Titan
Dabur
Varun Beverages
Marico
Colgate
Berger
HUL
TataCons
United Breweries
Pidilite Industries
Sapphire Foods
Indigo Paints
Jyothy Labs
Asian Paints
ITC
Kansai Nerolac
Westlife Foodworld
Jubilant Foodworks
Consumer Staples
India Research
60
We expect reported EBITDA growth of 14.8% for KIE consumer universe

KIE consumer universe EBITDA growth trends, yoy (%)
50
40
42.1 39.8
30
20 27.9
10 16.1 16.4 14.8

11.9 13.3 12.7 11.5 10.9
(4.3) 9.2 9.4
- 5.5
(10)
(20)
(30) (35.6)
(40)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23E
Expect 14.5% yoy EBITDA growth for staples Expect 15% yoy EBITDA growth for discretionary
KIE consumer staples universe EBITDA growth KIE consumer discretionary universe EBITDA
trends, yoy (%) growth trends, yoy (%)
35 140
30 120
25 28.8 100 113.3

80
20
60 73.0
15.0 19.6
15 40 27.2 18.6 25.2
14.8 15.1 14.5 16.8 15.0
10 20 12.6 11.1 12.5
14.4 9.9 11.1 9.0
8.6 8.7 9.9 -
5 (2.3) (4.6)
5.4 6.6
5.2 5.2 (20)
- 3.7
(40)
(5) (6.9) (63.9)
(60)
(10) (80)
2QFY20
1QFY21
3QFY21
4QFY21
2QFY22
4QFY22
1QFY23
3QFY23
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
1QFY20
3QFY20
4QFY20
2QFY21
1QFY22
3QFY22
2QFY23
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23E
4QFY23E
Consumer Staples
India Research
61
PAT growth profile

KIE consumer universe company-wise recurring PAT growth estimate for 4QFY23E, yoy (%)
150
100 130
110
50
47 39 37 31
- 26 21 20 17 (17)
16 15 14 9 4 4 2 (35)
(46) (47) (52) (53)
(50)
(100)
United Spirits
GCPL
Titan
Dabur
Varun Beverages
Marico
Colgate
Berger
HUL
TataCons
Indigo Paints
United Breweries
Sapphire Foods
Pidilite Industries
Jyothy Labs
Restaurant Brands Asia
Asian Paints
ITC
Kansai Nerolac
Westlife Foodworld
Jubilant Foodworks
(Standalone)
Aggregate PAT should grow by 13.6% yoy

KIE consumer universe company-wise recurring PAT growth estimate for 4QFY23E, yoy (%)
50
40 44.0
42.8
30
31.1
20
23.2
19.8
10
13.5 13.6
12.8
(3.1) (1.6) 12.8 11.9 10.3 10.2 9.6
-
(10)
(20)
(32.8)
(30)
(40)
1QFY21
2QFY22
3QFY22
1QFY20
2QFY20
3QFY20
4QFY20
2QFY21
3QFY21
4QFY21
1QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23E
Consumer Staples
India Research
62
Staples to see 13.2% PAT growth Discretionary pack to see 13.8% PAT growth
KIE consumer staples universe PAT growth trends, KIE consumer discretionary universe PAT growth
yoy (%) trends, yoy (%)
35 150
30 32.0 128.1
25 100
20 82.0
20.4 50
15 19.1
16.1 25.3 30.5 21.0 21.4 13.8
10 14.013.4 13.2 13.5 20.3 10.7 10.4
11.7 - 13.4 9.2
10.0 10.1
5 (2.8) (12.5)
5.8 6.2
- 4.2 3.6
(3.4) 2.2 (50) (64.8)
(5)
(10) (100)
2QFY20
1QFY21
3QFY21
4QFY21
2QFY22
4QFY22
1QFY23
3QFY23
2QFY20
3QFY20
4QFY20
3QFY21
4QFY21
4QFY22
1QFY23
1QFY20
3QFY20
4QFY20
2QFY21
1QFY22
3QFY22
2QFY23
1QFY20
1QFY21
2QFY21
1QFY22
2QFY22
3QFY22
2QFY23
3QFY23
4QFY23E
4QFY23E
Aggregate EBITDA margin to increase, led by GM expansion

KIE consumer universe EBITDA margin change yoy (bps)
200
100 139
116 98 (10) 79 (16) 69
- (50) (52) (43)
9 9 14
(100)
(183) (168)
(200)
(300)
(394)
(400)
(500)
4QFY23E
4QFY20
1QFY21
4QFY22
1QFY23
1QFY20
2QFY20
3QFY20
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
2QFY23
3QFY23
Consumer Staples
India Research
63
GM to expand led by softening RM prices Pressure on A&P spends is expected to continue

KIE consumer universe gross margin change yoy (bps) KIE consumer universe A&SP change yoy (bps)
200 100
100 50
115 96 47
93 (9) 38 (13)
- - (27) (19)
11 (78) 25
7 (104) (85) (47)
(144) (50) (66) (73) (65)
(100)
(165) (87) (56)
(105) (108)
(200) (255) (100) (122)
(288)
(300) (347) (150)
(370) (376)
(400) (200) (220)
(500) (250)
1QFY20
2QFY20
3QFY20
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
1QFY20
3QFY20
1QFY21
3QFY21
1QFY22
3QFY22
1QFY23
3QFY23
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
2QFY20
4QFY20
2QFY21
4QFY21
2QFY22
4QFY22
2QFY23
4QFY23E
4QFY23E
EBITDA margin trends improving across consumer space, led by GM gains (ex-QSR and Alcobev)
KIE consumer universe company-wise EBITDA margin change estimate for 4QFY23E, yoy (bps)
600
400 528
405 352
200 316
252 201
172 144 129 118 (60) (68)
- 114 108 100 99
6 3 (241)
(200) (357)
(471)(503)
(400) (533)
(600)
(600)
(800)
GCPL
Indigo Paints
United Breweries
Nestle
Kansai Nerolac
United Spirits
Titan
Marico
Colgate
Dabur
Asian Paints
Pidilite Industries
HUL
Berger
TataCons
ITC
Jyothy Labs
Westlife Foodworld
Varun Beverages
Sapphire Foods
Jubilant Foodworks
Consumer Staples
India Research
64
Gross margin trends improving across staples and discretionary companies (ex-QSR)
KIE consumer universe company-wise GM change estimate for 4QFY23E, yoy (bps)
600
400
403 400 367
200 308 288 262
226 (30) (50)
- 156 141 132 (88)
96 (139)
49 38 25 11 (185)(205)(216)
(248)
(200)
(400) (543)
(600)

GCPL
Indigo Paints
United Breweries
Nestle
Kansai Nerolac
United Spirits
Titan
Colgate
Marico
Dabur
Asian Paints
Pidilite Industries
HUL
Berger
TataCons
ITC
Jyothy Labs
Westlife Foodworld
Varun Beverages
Sapphire Foods
Jubilant Foodworks
Consumer Staples
India Research
65
Results preview for KIE consumer universe for the quarter-ending March 2023 (Rs mn)
Company Mar-22 Dec-22 Mar-23 YoY (%) qoq (%) Comments
Asian Paints (consolidated)
We gather that March quarter started off on a strong note (on a soft base) but demand moderated towards the end
Revenues 78,927 86,367 89,715 13.7 3.9 of the quarter (perhaps, high base effect). A steep 15% price hike in 3Q last year led to some shift of sales to
3QFY22 from 4QFY22. Consequently, APNT reported flat revenues in 3QFY23 and we expect 16%/13.7% yoy
Gross margin (%) 38.7 38.6 40.3 156 bps 169 bps volume/value growth in 4QFY23 (Standalone- largely domestic decorative paints).
In our view, investors should look at 2HFY23 topline. Our 4QFY23 forecast implies 7% revenue growth, 7.5% volume
EBITDA 14,433 16,114 17,431 20.8 8.2
growth (reported) and low single digit volume growth (ex-putty)
EBITDA margin (%) 18.3 18.7 19.4 114 bps 77 bps We expect 170 bps qoq and 155 bps yoy expansion in gross margin driven by fall in crude/paint input prices (3Q
Net income 9,661 10,727 11,590 20.0 8.1 margins were impacted by consumption of high-cost inventory). We expect EBITDA margin to expand by 115 bps
yoy largely driven by GM expansion.
EPS (Rs/share) 10.1 11.2 12.1 20.0 8.1
Restaurant Brands Asia (Standalone)
Revenues 2,687 3,698 3,523 31.1 (4.7) We model 11% qoq decline in ADS of BK India to Rs107K in 4QFY23E, implying a revenue decline of 4.7% qoq to
Gross margin (%) 66.1 66.4 66.5 37 bps 9 bps Rs3.5 bn on the back of strong store additions (bulk of 3Q new stores were added towards the end of the quarter).
EBITDA 302 479 431 42.6 (9.9) We estimate 11 new BK India net additions during the quarter taking total count to 390.
EBITDA margin (%) 11.3 12.9 12.2 98 bps -71 bps We model standalone gross margin (BK India) at 66.5%, flattish qoq as high RM inflation is offset by scale-up of BK
Net income (132) (112) (194) 46.7 72.9 Cafe. We expect BK India EBITDA margin (pre Ind AS 116) at 3.5% vs 4.2% in 3QFY23 due to lower operating
EPS (Rs/share) (0.3) (0.2) (0.4) 46.7 72.9 leverage and as investments into breakfast/BK café could continue to weigh on near-term profitability.
Berger
Revenues 21,875 26,936 24,754 13.2 (8.1)
We estimate 13% yoy volume/value growth (versus +7%/+6% yoy volume/value growth in 3Q) in domestic
Gross margin (%) 38.9 34.7 38.0 -88 bps 333 bps decorative paints and about 15% yoy growth in industrial coatings (versus +20% in 3Q). Our 4QFY23 forecast
implies 9% yoy revenue growth in 2HFY23.
EBITDA 3,464 3,497 3,773 8.9 7.9
We expect 330 bps qoq expansion in gross margin (BRGR's last quarter margins were impacted by high-cost
Net income 2,207 2,009 2,249 1.9 11.9 inventory) driven by the correction in crude/paint input prices (monomers, solvents, TiO2). GM recovery will drive
EBITDA margin up by 225 bps qoq to 15.2%.
EPS (Rs/share) 2.3 2.1 2.3 1.9 11.9
Britannia Industries (consolidated)
Revenues 35,505 41,968 40,347 13.6 (3.9) We model 4% yoy growth in domestic volumes (similar to 3Q) and about 10% yoy contribution from price-mix (price-
volume growth factor in higher promotions as highlighted in 3Q earnings call), which translates to about 13.7%
Gross margin (%) 38.0 43.7 41.7 366 bps -195 bps growth in consolidated revenues (versus 16.2% in 3Q). Revenue growth will be aided by (1) market share gains from
Parle, (2) traction in new launches, (3) distribution expansion particularly in rural markets, and (4) likely bottoming of
EBITDA 5,497 8,176 6,941 26.3 (15.1) rural slowdown.
EBITDA margin (%) 15.5 19.5 17.2 172 bps -228 bps We expect consolidated GM to normalize and decline sequentially by 195 bps to 41.7% (3Q GM hit an all-time high
Net income 3,799 5,568 4,774 25.7 (14.3) of 43.7%) as BRIT's wheat covers get exhausted. GM contraction leads to EBITDA margin decline of 230 bps qoq to
17.2% even as we expect BRIT to maintain A&P intensity.
EPS (Rs/share) 15.8 23.1 19.8 25.4 (14.3)
Colgate
Revenues 13,013 12,913 13,193 1.4 2.2
We model 1.4% yoy revenue growth on flattish volume growth (versus (-) 3% in previous quarter), likely aided by
Gross margin (%) 66.8 65.9 66.5 -30 bps 66 bps
bottoming of rural slowdown (rural contributes 40% to CLGT's revenues). We expect flat volumes on yoy basis.
EBITDA 4,294 3,615 3,883 (9.6) 7.4
EBITDA margin (%) 33.0 28.0 29.4 -357 bps 143 bps We expect 65/145 bps sequential improvement in both gross/EBITDA margin led by softening RM prices (crude-
Net income 3,236 2,432 2,672 (17.4) 9.9 linked). We expect CLGT to broadly maintain the A&P intensity (% of sales at 13.0% in 4QFY23, steady versus 13.2%
EPS (Rs/share) 11.9 8.9 9.8 (17.4) 9.9 in the previous quarter).
Dabur (consolidated)
Revenues 25,178 30,432 27,197 8.0 (10.6) We model 6% yoy domestic revenue growth (2% volume growth). We expect growth to be driven by foods/home
care even as we expect health supplements growth to remain subdued (base quarter had some Omicron-led
tailwinds). We estimate 13.3% yoy reported growth in aggregate revenues of subsidiaries; adjusted for Badshah
EBITDA 4,536 6,099 5,172 14.0 (15.2) acquisition (estimated revenue contribution Rs600 mn in 4QFY23), revenue growth would be around 6%.
We estimate 60 bps qoq expansion (-130 bps yoy) in consolidated gross margin aided by softening RM prices.
Net income 3,792 4,759 4,132 9.0 (13.2) Consolidated EBITDA margin is expected to expand 100 bps yoy (despite GM decline) led by cost savings including
lower A&P spends.
EPS (Rs/share) 2.2 2.7 2.3 9.0 (13.2)
Revenues 5,907 7,906 7,467 26.4 (5.5) We model 13, 22, and 12 net new KFC, PH, Costa stores in 4QFY23 and ADS of Rs105K (-9%/-7% qoq/yoy), Rs37.5K
(-13%/-8.8% qoq/yoy), and Rs28K (-25%/-8% qoq/yoy) respectively. KFC should report low single digit SSSG
whereas Pizza Hut should report mid-single-digit SSS decline. We expect revenues from other domestic brands and
international outlets at Rs510 mn and Rs558 mn respectively. We note that most QSR players witnessed slowdown
in demand starting Nov 2022 which continued in 4QFY23E attributable to impact of broad based inflation on
EBITDA 1,397 1,739 1,414 1.2 (18.7) discretionary consumption.
EBITDA margin (%) 23.6 22.0 18.9 -471 bps -307 bps We estimate +5/(-)135/+60 bps qoq GM change in KFC/PH/Costa amidst high dairy inflation. High RM inflation and
lower operating leverage is expected to weigh on brand contribution (restaurant level) margin with KFC at 18.9% (-
Net income 786 798 378 (51.9) (52.6) 70 bps qoq), PH at 11.1% (-300 bps qoq) and Costa at 26.2% (-25 bps qoq) respectively. Pre-Ind AS 116: We expect
company-level pre-Ind AS 116 EBITDA of Rs925 mn (down 21% qoq) and EBITDA margin at 12.4% (down 240 bps
EPS (Rs/share) 0.7 0.7 0.3 (51.9) (52.6) qoq) as corporate overheads could increase to Rs333 mn versus Rs278 mn in 3Q.
GCPL (consolidated)
Revenues 29,158 35,989 32,291 10.7 (10.3)
We estimate +9%/+14% yoy volume/value growth in domestic business led by – (1) about 20% growth in HC
Gross margin (%) 49.5 51.1 52.1 262 bps 94 bps (versus +10% in 3Q) led by strong growth in HI off a weak base and aided by stocking of recently launched LUPs in
the channel, (2) 12% growth in BPC (versus 13.6% in 3Q) despite price cuts in soaps and robust growth in hair
color. We expect mixed performance in international business with some improvement in Indonesia (off a favorable
EBITDA 4,676 7,266 6,316 35.1 (13.1)
base) partly offset by softness in Africa led by demonetization in Nigeria.
EBITDA margin (%) 16.0 20.2 19.6 352 bps -64 bps We model 95 bps qoq expansion in consolidated GM to 52.1% aided by RM tailwinds in India. Despite the sequential
GM expansion, EBITDA margin (-65 bps qoq, +350 bps yoy) would moderate a bit on sequential basis owing to
Net income 3,838 5,538 4,634 20.8 (16.3)
lower operating leverage. Consolidated A&P spends are expected at 7.7% of sales in 4QFY23 versus 6.3% in
EPS (Rs/share) 3.8 5.4 4.5 20.8 (16.3) 4QFY22.
Consumer Staples
India Research
66
Results preview for KIE consumer universe for the quarter-ending Mar-2023 (cont.) (Rs mn)
Company Mar-22 Dec-22 Mar-23 YoY (%) qoq (%)
HUL (standalone)
Revenues 134,620 152,280 152,774 13.5 0.3 We model 13.5% yoy revenue growth (versus +16.3% in 3Q) with 6% yoy growth in UVG (versus 4%/5% in 2Q/3Q).
We expect— (1) continued strength in home care revenue growth on the back of price hikes in laundry, (2) some
improvement in BPC growth as spillover in winter portfolio gets offset by price cuts in skin cleansing, (3) price hikes
in MFD, and (4) some respite on GM front led by softening of crude/palm oil. We forecast – (1) 19.5% yoy growth in
Home care, (2) 11.5% yoy growth in BPC, and (3) 8.1% yoy revenue growth in F&R portfolio partly aided by an early
EBITDA 32,450 35,370 36,866 13.6 4.2 onset of summer.
EBITDA margin (%) 24.1 23.2 24.1 2 bps 90 bps We model 155 bps qoq expansion in gross margin led by correction in crude/palm oil prices which is expected to
narrow the gap between realization increase and net material inflation. We build in 24.1% EBITDA margin, up 90 bps
Net income 22,830 25,810 26,155 14.6 1.3
qoq as GM expansion is offset by (1) 45 bps increase in royalty from Feb-23 and (2) A&P intensity at 8.6% of sales
EPS (Rs/share) 9.7 11.0 11.1 14.6 1.3 (vs 7.9% in 3QFY23).
ITC (standalone)
Revenues 155,309 162,257 169,729 9.3 4.6
We model 15% yoy growth in cigarette volumes (4.5% 4-yr CAGR versus +5.2%/+4.6%/+2.5% in 3Q/2Q/1QFY23)
Gross margin (%) 53.8 59.4 56.9 307 bps -252 bps largely driving 17.9% yoy growth in cigarette sales (versus 16.7% last qtr). We forecast 17.2% yoy growth in
Cigarette EBIT (versus 16.9% growth last qtr).
EBITDA 52,244 62,232 60,501 15.8 (2.8)
In the FMCG segment (standalone), we estimate 21.8% yoy revenue growth (versus 18.4% in last qtr). We model 40
bps qoq FMCG EBIT margin to 7.6%. We expect resilient 72% growth in Hotels (Omicron-impacted base; EBIT
Net income 41,910 50,310 49,070 17.1 (2.5)
margin of 18.1%). We also forecast further moderation/ normalization in Paperboards margin to 24.2% (-210 bps
qoq) and 18.8% yoy decline in Agri sales (versus 37% decline in previous qtr).
EPS (Rs/share) 3.4 4.1 4.0 16.2 (2.5)
Jubilant Foodworks
Revenues 11,579 13,166 11,757 1.5 (10.7) We expect 9-10% SSS decline and 7-8% LFL decline (non-split restaurants) for Domino's, weakest same-store
metrics across QSR brands. We estimate 1.5% yoy growth in standalone revenues despite about 15% yoy growth in
Gross margin (%) 76.9 75.5 74.7 -216 bps -73 bps
Domino's store count to about 1,807 stores (+47 stores qoq). Our estimates imply a decline in average revenue per
EBITDA 2,897 2,900 2,350 (18.9) (19.0) store of about 12-13% yoy on account of (1) store splits and (2) subdued demand due to high consumer inflation.
We estimate 70 bps qoq decline in GM to 74.7% (high dairy/flour inflation) and 200 bps/500 bps qoq/yoy decline in
Net income 1,165 886 547 (53.1) (38.3)
reported EBITDA margin to 20% (GM pressure and adverse operating leverage).
EPS (Rs/share) 1.8 1.3 0.8 (53.1) (38.3)
Jyothy Labs
Revenues 5,462 6,123 6,190 13.3 1.1 We expect 13.3% yoy revenue growth led by 18.1% yoy growth in Fabric care (led by mid-priced detergent brands
Gross margin (%) 41.4 43.1 45.4 400 bps 232 bps and continued recovery in post-wash segment), 12.8% yoy growth in dishwashing (share/penetration gains),
EBITDA 568 840 970 70.9 15.5 flattish sales in HI and 15.4% yoy growth in personal care.
We expect gross margin to increase by 235 bps qoq led by price correction in palm and crude derivatives. EBITDA
Net income 380 674 797 109.9 18.3
margin is expected to improve by 195 bps qoq to 15.7%, after factoring in A&P spends at 7.2% of sales (flattish yoy).
EPS (Rs/share) 1.0 1.8 2.2 109.9 18.3
Kansai Nerolac (Standalone)
Revenues 14,071 17,171 15,948 13.3 (7.1) We model 13%/13% yoy volume/value growth in domestic decorative paints, broadly in line with industry growth
rate after 3-4 years of underperformance. We expect 14% yoy revenue growth in auto and non-auto coatings aided
Gross margin (%) 27.7 30.2 31.7 402 bps 150 bps
by recovery in auto volumes and price hikes. Net-net, we estimate +13.3% yoy growth in standalone revenues of
EBITDA 1,014 1,885 1,795 77.0 (4.8) KNPL.

We expect 150 bps qoq (+405 bps yoy on a low base) expansion in gross margin to 31.7% as price hikes and RM
Net income 461 1,123 1,063 130.4 (5.3) correction are offset by high-cost inventory consumption and inferior mix (higher industrial). We expect EBITDA
margin to expand only 30 bps qoq to 11.3%, factoring in higher marketing and personnel investments.
EPS (Rs/share) 0.9 2.1 2.0 130.4 (5.3)
Marico (consolidated) Comments
Revenues 21,610 24,700 22,380 3.6 (9.4) Our estimates are in line with Marico's quarter-end update. We model 3.7% yoy growth in the domestic FMCG on the
back of about 4.5% yoy volume growth. We build yoy volume/value growth of 8%/1% in parachute, 5%/10% in VAHO,
Gross margin (%) 44.5 44.9 45.8 132 bps 85 bps and (-) 5%/(-) 8% in Saffola edible oil. We expect share gains in CNO led by right pricing achieved on-ground by
MRCO. For the international business we model about 3.2% yoy growth (versus 4.9% in 3Q) as currency
EBITDA 3,460 4,560 3,848 11.2 (15.6) depreciation (Bangladesh) would weigh on reported revenues. We expect consolidated revenue growth of 3.6%.
We expect consolidated GM to expand by 85 bps qoq (+130 bps yoy) led by continued deflation in copra/edible oil
Net income 2,510 3,280 2,609 3.9 (20.5) prices. Consolidated EBITDA margin is expected to increase by 120 bps to 17.2% led by GM tailwinds, leading to
EBITDA growth of 11.2% yoy.
EPS (Rs/share) 1.9 2.5 2.0 3.9 (20.5)
Nestle
Revenues 39,509 42,333 44,598 12.9 5.4 We model 13% yoy growth in net domestic revenues entirely led by price increases. Volumes (tonnage) is likely to
Gross margin (%) 55.4 54.9 55.5 10 bps 63 bps decline marginally owing to (1) continued share loss in Maggi LUP as it increased price point to Rs7 from Rs5
EBITDA 9,308 9,769 10,532 13.1 7.8 whereas ITC Yippee! has maintained price at Rs5, and (2) weak trends in milk/nutrition portfolio.

We model 65 bps qoq GM expansion aided by deflation in edible oils, price increases, improving mix (lower margin-
Net income 5,947 6,281 6,920 16.4 10.2 dilutive LUP sales), partly offset by high inflation in dairy. We expect EBITDA margin to expand 5 bps/50 bps
yoy/qoq led by GM expansion.
EPS (Rs/share) 61.7 65.1 71.0 15.2 9.0
Westlife Foodworld
Revenues 4,550 6,113 5,526 21.5 (9.6) We expect some impact of broader discretionary slowdown on McDonald's as well-- we expect 11% qoq decline in
ADS (versus usual 6-8% qoq decline per seasonality) to about Rs173K (+10% yoy) in 4QFY23. We estimate 22.4%
Gross margin (%) 65.0 66.9 66.4 140 bps -46 bps
yoy revenue growth and about 12% SSSG (versus 20% in 3QFY23). We build in 17 new store additions during the
EBITDA 628 1,020 842 34.1 (17.4) quarter.
EBITDA margin (%) 13.8 16.7 15.2 143 bps -144 bps We model gross margin at 66.4%, down 45 bps qoq on account of product mix change (seasonality and some
downtrading). Pre-Ind AS 116: We expect company-level EBITDA of Rs705 mn (-15.5% qoq) and EBITDA margin at
Net income 153 364 210 37.3 (42.1)
12.8% (-90 bps qoq) as decline in employee cost (3QFY23 had certain one-offs) is offset by GM decline and lower
EPS (Rs/share) 1.0 2.3 1.4 37.3 (42.1) operating leverage.
Consumer Staples
India Research
67
Results preview for KIE consumer universe for the quarter-ending Mar-2023 (cont.) (Rs mn)
Company Mar-22 Dec-22 Mar-23 YoY (%) qoq (%)
Pidilite Industries (consolidated)
Revenues 25,071 29,976 27,171 8.4 (9.4) We model 15.5% yoy reported standalone revenue growth; LFL growth adjusted for CIPY/PAPL merger is
Gross margin (%) 43.5 41.8 46.4 288 bps 455 bps expected at 8% yoy. On a reported basis, we expect 15.5% yoy growth in domestic C&B sales and 10.3% yoy
growth in B2B sales which on LFL basis (excluding PAPL/CIPY), translate to 7.6% and 4.8% respectively. We
EBITDA 4,011 4,959 5,031 25.4 1.5 expect aggregate revenues of subsidiaries (ex-PAPL/CIPY) to grow 11% yoy.
EBITDA margin (%) 16.0 16.5 18.5 251 bps 197 bps We expect gross margin to expand 455 bps qoq (+290 bps yoy) led by steep correction in VAM (45% decline
Net income 2,544 3,042 3,537 39.1 16.3 in spot versus 3Q consumption cost) and moderation in other crude-linked inputs. EBITDA margin is
EPS (Rs/share) 5.0 6.0 7.0 39.1 16.3 expected to expand 200 bps/250 bps qoq/yoy largely due to GM expansion.
Sapphire Foods
Revenues 4,968 5,961 5,678 14.3 (4.8) We model 11, 7, and 1 net new KFC, PH, Sri Lanka stores in 4QFY23E and ADS of Rs124K (-8.5%/-6% qoq/yoy;
weaker versus Devyani due to higher impact of 'Navratra' in SF's regions), Rs49K (-16%/-12% qoq/yoy), and
Gross margin (%) 68.7 67.1 66.7 -206 bps -41 bps Rs70K (-6% qoq) respectively. KFC should report low single digit SSSG whereas Pizza Hut should report mid-
single-digit SSS decline. Overall, demand trends in QSR space are expected to be weak owing to slowdown in
EBITDA 998 1,167 1,003 0.5 (14.0) discretionary consumption led by inflationary pressure.
EBITDA margin (%) 20.1 19.6 17.7 -242 bps -191 bps We estimate +20/(-)150/(-)75 bps qoq change in gross margin in KFC/PH/Sri Lanka. High inflation in
cheese/flour is weighing on PH's GM. Expect the brand contribution (restaurant level) margin for KFC, PH, Sri
Net income 265 327 144 (45.8) (56.1) Lanka at 19.1% (-110 bps qoq, adverse operating leverage), 10.5% (-360 bps qoq, GM compression and lower
operating leverage), and 14.5% (-10 bps qoq) respectively. Pre-Ind AS 116: We expect company-level EBITDA
EPS (Rs/share) 4.2 5.1 2.3 (45.8) (56.1) of Rs609 mn (-17%/-4% qoq/yoy) and EBITDA margin at 10.7% (-165 bps qoq).
Tata Consumer Products (consolidated)
We model 12.2% yoy growth in consolidated revenues led by (1) 1% yoy growth in domestic tea sales (versus
Revenues 31,754 34,746 35,624 12.2 2.5
9% decline in 3Q) with 3% yoy growth in volumes (versus 5% decline in 3Q), (2) 25.3% yoy growth in India foods
business largely price/mix led with 5% volume growth, and (3) 13.1% yoy growth in subsidiaries. We model
~2.3% yoy decline in International tea (improvement versus last quarter's (-)5.1% yoy led by price hikes) and
~15.4% yoy growth in overseas coffee (EOC + Vietnam FDC) in INR terms (+16.8% in 3Q). We estimate Rs1.5
EBITDA 4,443 4,537 4,742 6.7 4.5
bn revenues for NourishCo (53.4% yoy), implying FY2023E revenue of Rs6 bn.
EBITDA margin (%) 14.0 13.1 13.3 -69 bps 25 bps India branded business (standalone): We expect flattish qoq gross margin (-125 bps yoy) as some GM
pressure in tea (consumption of high cost inventory) is offset by recovery in GM of India foods. Lower
Net income 2,362 2,732 2,450 3.7 (10.3) operating leverage can drive 20 bps qoq decline in India EBITDA margin (+20 bps yoy). Aggregate of
subsidiaries (largely overseas): We expect gross/EBITDA margin to improve 150 bps/115 bps qoq as lagged
EPS (Rs/share) 2.6 3.0 2.7 3.7 (10.3) price hikes in UK/US offset significant RM inflation/currency impact.
Titan Industries
Revenues 72,760 108,750 79,758 9.6 (26.7) We model (1) 15% yoy growth in standalone jewelry sales (+15.4% 4-year CAGR versus +19.4%/19.1/20.8% in
3QFY23/2QFY23/1QFY23) on LFL basis (excluding sale of gold bullion). We gather that the quarter started on
Gross margin (%) 24.4 23.0 24.9 49 bps 184 bps a strong note (favourable base) but demand moderated a bit in the month of March (high base + perhaps,
some impact of sharp 8-10% increase in gold price), (2) we expect 16% yoy growth in watches (versus
EBITDA 7,820 13,300 9,601 22.8 (27.8) +14.5% in 3Q) and 22.5% yoy growth in eyewear (aided by store growth) segment.
EBITDA margin (%) 10.7 12.2 12.0 129 bps -20 bps We expect EBITDA margin to improve 130 bps yoy to 12% as base quarter margin was partly impacted by an
ex-gratia payout to employees. On segmental front, we expect (1) EBIT margin of 12% for Jewelry business
Net income 5,420 9,510 6,178 14.0 (35.0)
(versus 13% adj EBIT margin in 3Q), (2) 11.2% EBIT margin for watches, and (3) 17.7% EBIT margin for
EPS (Rs/share) 6.1 10.7 7.0 14.0 (35.0) eyewear.
United Breweries
Revenues 17,069 16,110 17,961 5.2 11.5 We model 47 mn cases, up 4%/18% yoy/qoq (versus 3Q’s 4% yoy). We estimate 5.2% yoy growth (versus 3Q's
Gross margin (%) 48.7 41.8 43.3 -543 bps 141 bps 1.9%) in net operating revenues. We are modeling some volume impact (akin 3Q) pertaining to RTM change in
EBITDA 2,603 766 1,781 (31.6) 132.4 TN/AP.
EBITDA margin (%) 15.3 4.8 9.9 -534 bps 515 bps We expect gross margin to improve by 140 bps qoq but remain significantly below on yoy basis (down 540
Net income 1,630 (21) 1,067 (34.5) NA bps yoy) due to high inflation in barley/glass prices and adverse state mix. We expect EBITDA margin to
EPS (Rs/share) 6.2 1.2 4.0 (34.5) 244.5 expand by 510 bps qoq off a low base.
United Spirits (standalone)
Revenues 24,351 27,811 23,371 (4.0) (16.0) We model 10.5% yoy growth in net revenues (versus 9.7% yoy in 3Q, excl. bulk scotch sale) on LFL basis
adjusted for divestment on select popular brands. P&A segment volume is expected to grow by 7.3% yoy to
11.7 mn cases. Popular segment volume is expected to decline 4% yoy on LFL basis to 3.6 mn cases. We
EBITDA 4,267 3,678 2,694 (36.9) (26.8) model 14.4% yoy revenue growth in P&A segment.
EBITDA margin (%) 17.5 13.2 11.5 -600 bps -170 bps We model 145 bps qoq expansion in GM aided by price hikes and mix improvement (aided by resumption of
scotch supply in a few states after successful price renegotiation). We expect higher A&P spends (11.5% of
Net income 3,094 2,616 1,635 (47.2) (37.5) sales in 4QFY23E vs 10% in 3QFY23 and 5.4% in 4QFY22) and operating deleverage to weigh on EBITDA
margin (-600 bps yoy to 11.5%). We estimate EBITDA decline of 37% yoy on reported basis and about 25%
EPS (Rs/share) 4.3 3.6 2.3 (47.2) (37.5) decline (LFL basis) adjusted for divested portfolio.
Varun Beverages (consolidated)
We expect strong 27%/20.3% yoy growth in revenues/volumes (to 217 mn cases) notwithstanding disruption
Revenues 28,275 22,142 35,888 26.9 62.1
of summer in the second fortnight of March following hailstorms in Delhi/NCR region. Strong growth would be
Gross margin (%) 51.5 56.3 52.5 95 bps -380 bps driven by (1) share gains in underpenetrated markets, (2) robust 100%+ yoy growth of energy drink 'Sting. We
build 5% yoy growth in realization partly aided by superior mix (Sting's realization is 60-65% higher than
EBITDA 5,310 3,075 7,873 48.3 156.0 company average).
We model 52.5% gross margin (up 95 bps yoy, factoring in correction in crude) and EBITDA margin of 21.9%
Net income 2,542 748 4,047 59.2 441.4
(up 310 bps yoy, GM expansion + operating leverage).
EPS (Rs/share) 3.9 1.2 6.2 59.2 441.4
Indigo Paints
Revenues 2,884 2,813 3,361 16.6 19.5
We expect 16.5% yoy revenue growth in domestic decorative paints, implying 200-250 bps ahead of
APNT/BRGR, a tad lower than management guidance of 1.5X industry growth rate.
EBITDA 538 406 663 23.3 63.4
EBITDA margin (%) 18.6 14.4 19.7 107 bps 530 bps We expect 250 bps qoq (+230 bps yoy) expansion in GM led by softening RM prices and superior product mix,
Net income 346 263 452 30.7 72.1
EPS (Rs/share) 7.3 5.5 9.5 30.7 72.1 partly offset by higher trade discounts. We expect EBITDA margin to expand 110 bps yoy to 19.7%.
Consumer Staples
India Research
68
KIE consumer universe valuation summary

Upside /
FV 4-Apr-23 (dow nside) M kt cap. EPS (Rs) EPS grow t h (% ) PER (x) EPS Sales
Company Rat ing (Rs) Price (Rs) (% ) (Rs bn) (US$ m) 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E CAGR - (2022-25E), %
Consumer
Asian Paints REDUCE 2,800 2,777 1 2,664 32,683 41.9 51.8 55.0 27.8 23.6 6.2 66.3 53.6 50.5 18.8 12.6
Berger REDUCE 510 580 (12) 563 6,907 9.7 13.1 13.5 13.5 34.4 3.4 59.6 44.3 42.9 16.4 13.7
Britannia Industries ADD 4,775 4,324 10 1,042 12,781 78.6 92.2 105.9 24.1 17.3 14.9 55.0 46.9 40.8 18.7 12.0
Restaurants Brands Asia ADD 105 92 14 35 432 (1.2) (0.4) 0.5 NA NA -239.5 NA NA 170.1 NA 36.2
Colgate-Palmolive (India) ADD 1,630 1,525 7 415 5,088 36.6 42.2 46.4 -7.6 15.1 10.2 41.6 36.2 32.8 5.4 6.0
Dabur India ADD 600 548 10 968 11,875 10.5 12.2 13.8 2.0 16.1 13.0 52.0 44.8 39.7 10.2 9.5
Devyani International ADD 160 146 9 169 2,071 2.1 1.8 2.3 43.8 -13.5 24.8 69.7 80.6 64.6 15.8 27.8
Godrej Consumer Products BUY 1,075 965 11 987 12,107 17.2 21.5 24.0 -1.8 24.7 11.8 56.0 44.9 40.2 11.0 9.4
Hindustan Unilever ADD 2,825 2,536 11 5,960 73,127 42.7 50.2 56.5 15.0 17.5 12.6 59.4 50.5 44.9 15.0 12.3
ITC ADD 430 379 13 4,667 57,266 14.9 16.5 18.2 21.7 11.2 10.2 25.5 22.9 20.8 14.2 13.3
Jubilant Foodworks ADD 500 436 15 287 3,528 6.4 7.9 9.8 -2.6 23.3 23.9 67.8 54.9 44.3 14.2 13.8
Jyothy Labs ADD 220 189 17 69 849 7.0 8.8 9.6 59.1 25.9 9.2 26.9 21.3 19.5 29.8 10.1
Kansai Nerolac REDUCE 410 388 6 209 2,567 9.6 12.4 13.2 39.6 28.9 6.6 40.3 31.3 29.3 24.2 12.7
Marico REDUCE 515 480 7 619 7,593 10.0 11.5 13.0 5.3 15.1 12.7 48.0 41.7 37.0 11.0 7.7
Nestle India ADD 20,700 19,705 5 1,900 23,313 247.9 310.9 349.6 0.4 25.4 12.4 79.5 63.4 56.4 12.3 12.7
Pidilite Industries REDUCE 2,285 2,328 (2) 1,183 14,514 26.5 37.0 45.1 11.4 40.0 21.9 88.0 62.9 51.6 23.9 13.9
Sapphire Foods BUY 1,550 1,205 29 77 939 18.1 18.9 24.5 148.0 4.2 29.6 66.5 63.8 49.2 49.6 23.5
Tata Consumer Products ADD 770 717 7 661 8,108 11.2 14.5 17.3 4.7 29.6 19.0 63.9 49.3 41.4 17.3 8.3
Titan Co. ADD 2,700 2,537 6 2,253 27,640 37.9 41.4 48.6 49.5 9.2 17.5 66.9 61.3 52.2 24.2 20.5
United Breweries ADD 1,625 1,433 13 379 4,649 16.5 27.8 36.1 18.8 69.2 29.8 87.1 51.5 39.7 37.7 16.1
United Spirits ADD 900 751 20 545 6,693 12.8 15.1 18.6 -4.6 17.5 23.1 58.4 49.7 40.4 11.3 6.9
Varun Beverages BUY 1,500 1,414 6 919 11,273 23.1 30.0 36.4 115.8 30.1 21.4 61.4 47.1 38.8 50.5 27.7
Westlife Foodworld ADD 790 690 14 107 1,317 8.2 11.2 14.3 NA 36.5 28.0 84.2 61.7 48.2 NA 24.6
Indigo Paints REDUCE 1,190 1,063 12 50 616 23.1 31.3 33.8 30.6 36 8 46.0 34.0 31.4 24.1 17.7
KIE universe 26,727 327,937 19.4 17.8 12.7 49.5 42.0 37.3 16.6 13.6
KIE universe (ex-ITC) 22,060 270,671 17.7 21.2 13.9 62.1 51.2 45.0 17.6 13.7
Price perf ormance (% ) EV/EBITDA (x) EV/Sales (x) FCF yield (% ) Dividend yield (% )
1-mo 3-mo 6-mo 1-yr 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E
Asian Paints (2) (8) (16) (11) 43.4 35.5 33.0 7.7 7.1 6.5 1.2 1.7 1.7 0.9 1.2
Berger (0) 0 (4) (19) 36.7 28.3 27.3 5.3 4.8 4.3 1.7 2.6 2.7 0.8 1.0
Britannia Industries (2) 2 15 34 38.3 32.9 28.7 6.5 5.9 5.3 1.4 2.0 2.3 1.5 1.9
Restaurants Brands Asia (2) (19) (30) (18) 18.2 11.3 8.3 2.2 2 1 (4.6) (1.3) 0.5 — —
Colgate-Palmolive (India) 2 0 (3) (2) 27.6 24.3 22.0 7.8 7.2 6.6 2.9 2.9 3.3 2.3 2.7
Dabur India 2 (2) (2) 1 41.4 36.6 32.0 8.2 7.3 6.6 1.6 1.9 2.3 1.1 1.3
Devyani International (4) (18) (24) (16) 25.7 21.4 17.7 5.6 4.6 3.9 0.8 1.2 1.8 — —
Godrej Consumer Products 4 8 9 28 40.0 32.2 28.1 7.3 7 6 2.0 2.3 2.5 1.2 1.4
Hindustan Unilever 3 (0) (3) 22 41.6 35.4 31.5 9.8 8.9 8.0 1.6 2.0 2.3 1.5 1.8
ITC (2) 14 17 50 18.5 16.6 15.0 6.6 5.9 5.3 3.4 4.1 4.5 3.2 3.7
Jubilant Foodworks (1) (14) (29) (20) 23.4 19.8 16.6 5.4 4.8 4.2 1.9 0.5 0.8 1.5 1.8
Jyothy Labs 0 (8) - 26 20.8 15.6 13.5 2.7 2 2 2.8 4.3 4.7 1.6 1.9
Kansai Nerolac (5) (9) (21) (17) 24.6 19.7 18.5 2.9 2.7 2.5 0.5 2.1 2.3 1.6 1.7
Marico (4) (6) (9) (7) 33.5 29.0 25.6 6.3 5.7 5.1 2.2 2.4 2.7 1.8 2.4
Nestle India 7 (0) 4 12 51.3 42.1 37.0 11.2 10.0 9.0 1.5 1.8 2.1 1.2 1.4
Pidilite Industries 0 (8) (12) (6) 58.2 42.7 35.7 9.9 9 8 0.9 1.5 1.8 0.6 0.8
Sapphire Foods (3) (9) (19) (17) 17.0 14.0 11.6 3.3 2.7 2.3 (1.1) 0.7 1.6 — —
Tata Consumer Products 1 (7) (8) (9) 35.1 29.9 25.6 4.7 4.4 4.0 1.8 2.0 2.2 0.9 1.1
Titan Co. 6 (3) (1) 1 44.0 40.0 34.0 5.7 5.1 4.4 0.5 1.1 1.2 0.5 0.7
United Breweries (2) (14) (14) (5) 49.6 32.1 25.2 4.9 4 4 1.2 1.8 2.4 1.2 1.8
United Spirits (1) (13) (9) (17) 36.6 32.5 26.8 5.2 5.1 4.6 3.4 2.2 2.2 0.7 0.9
Varun Beverages 4 8 32 126 34.2 26.4 22.3 7.2 5.9 5.1 1.2 1.3 1.9 0.1 0.1
Westlife Foodworld 3 (10) (4) 46 27.9 22.9 19.2 4.6 4.0 3.5 0.6 0.4 0.9 — —
Indigo Paints (2) (19) (29) (34) 27.2 20.5 18.6 4.4 4 3 1.5 1.9 2.2 — 1—
KIE FM CG universe 1 (0) (1) 13 33.6 28.6 25.3 7.2 6.5 5.8 1.8 2.2 2.5
KIE universe (ex-ITC) 2 (3) (4) 7 40.2 33.5 29.4 7.3 6.6 5.9 1.2 1.5 1.7
Sensex (1) (4) 4 (0)
Consumer Staples
India Research
69
Crude oil price has corrected in the past few months Palm oil price has declined sharply since June 2022
Brent crude oil monthly price chart (INR per barrel) Palm oil monthly price chart (INR per ton)
Crude Oil Brent - INR/bbl Palm oil - INR/ton
10,000 140,000
9,000
120,000
8,000
7,000 100,000
6,000 80,000
5,000
4,000 60,000
3,000 40,000
2,000
20,000
1,000
0 0
Mar-19
Mar-22
Mar-23
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-20
Mar-21
Mar-13
Mar-15
Mar-16
Mar-18
Mar-19
Mar-21
Mar-22
Mar-11
Mar-12
Mar-14
Mar-17
Mar-20
Mar-23
Source: Bloomberg, Kotak Institutional Equities Source: Bloomberg, Kotak Institutional Equities
Consumer Staples
India Research
70
Softening RM prices are likely to benefit gross margins in 1HFY24

Quarterly movement in inputs/commodities
Inflationary = +3%
% chg - local currency % chg - currency Adj. Deflationary = -3%
No Commodity Unit 4QFY23 qoq yoy vs FY22 qoq yoy vs FY22 Companies impacted
Agri Commodities
1 Tea - India Avg. Rs/Kg 139 (22) 5 (16) (22) 5 (16) HUL, TataCons
2 Tea - World Avg. USD/MT 2,723 (11) (1) - (11) 8 10 HUL, TataCons
3 Tea - Mombassa/Kenya USD/Kg 3 (2) (10) 5 (2) (1) 16 HUL, TataCons
4 Coffee Arabica - Intl. US cents/Pound 226 0 (18) (4) 0 (10) 6 HUL, Nestle, TataCons
5 Coffee Robusta - Intl. US cents/Pound 110 5 (6) 1 5 3 11 HUL, Nestle, TataCons
6 Sugar - domestic Rs/Quintal 3,871 (4) 0 1 (4) 9 11 HUL, Nestle, ITC, Dabur, Britannia
7 Wheat Rs/Quintal 3,473 4 12 23 4 22 36 ITC, Nestle, Britannia
8 Barley Rs/Quintal 2,711 (13) 8 23 (13) 18 36 UBBL
9 Maize (corn) USD/MT 302 (6) 0 9 (6) 10 20 Colgate, HUL, Dabur (Sorbitol)
10 Liquid Milk - domestic Rs/Ltr 55 (1) 17 25 (1) 28 38 Nestle, Jubilant Foodworks, Britannia
11 Milk Powder - domestic Rs/Kg 354 7 25 19 7 37 31 Nestle, Britannia
12 Cocoa Bean USD/MT 2,331 4 1 3 4 10 13 Nestle
Oil Commodities
13 Crude Oil - Brent USD/Barrel 81 (8) (18) 2 (8) (10) 12 HUL, GCPL, Jyothy Labs, Asian Paints, Pidilite
14 Palm oil Rs/MT 86,353 (1) (34) (28) (1) (28) (20) HUL, GCPL, Jyothy Labs
15 PFAD USD/MT 720 (4) (50) (38) (4) (45) (31) HUL, GCPL, Jyothy Labs
16 Light liquid paraffin (LLP) Rs/Ltr 78 2 22 33 2 33 47 Marico, Dabur, Bajaj Consumer
17 Copra Rs/Quintal 8,885 2 (7) (17) 3 1 (9) Marico, Dabur
18 Coconut oil Rs/Quintal 13,153 (1) (13) (21) (1) (5) (12) Marico, Dabur
19 Rice Bran oil Rs/10Kg 898 (14) (20) (21) (14) (13) (13) Marico
20 Kardi oil/ Safflower oil Rs/MT 2,193 - - 2 0 9 12 Marico
21 Sunflower oil Rs/MT 107,098 (19) (24) (23) (19) (17) (16) Marico
22 Groundnut oil Rs/MT 166,918 6 18 15 6 28 27 Marico, Dabur
23 Linseed oil Rs/MT 114,873 (12) (40) (35) (12) (34) (28) Marico, Dabur, Bajaj Consumer, Asian Paints
24 Castor oil Rs/MT 140,469 (4) 2 13 (4) 12 25 Marico, Dabur, Bajaj Consumer, Asian Paints
25 Mentha oil Rs/Kg 1,251 6 8 12 6 18 23 Emami, Colgate, HUL, Dabur
Chemicals/Paints/Other Commodities
26 Caustic soda Rs/ 50Kg 2,794 (20) (11) 28 (20) (3) 41 HUL, GCPL, Jyothy Labs
27 Soda ash Rs/ 50Kg 2,300 (11) 15 40 (11) 26 54 HUL, GCPL, Jyothy Labs
28 HDPE - domestic Rs/Kg 133 2 (2) 7 2 7 18 All companies
31 Tio2 Anatese Rs/Kg 183 (20) (30) (21) (20) (24) (12) Asian Paints
32 Tio2 Rutile Rs/Kg 255 - (20) (14) 0 (13) (5) Asian Paints
33 Tio2 Dupont Rs/Kg 398 4 (11) 7 4 (2) 18 Asian Paints
34 Turpentine oil Rs/Ltr 113 4 (6) (4) 4 3 6 Asian Paints
35 Formaldehyde Rs/Kg 30 (15) (1) (14) (15) 8 (6) Asian Paints
38 Styrene - domestic Rs/Kg 104 7 (8) 1 7 0 11 Asian Paints
39 Gold Rs/10gm 56,818 9 14 18 9 25 31 Titan, Jewellery companies
40 Diamond price index USD/Carrat 138 - 1 9 0 11 20 Titan, Jewellery companies
Note: Average computation based on two months for commodities where data is unavailable
Source: Bloomberg
Consumer Staples
India Research
71
INR depreciated versus USD on yoy basis; sequential improvement in GBP positive for TCPL
Movement of rupee versus relevant international currencies for KIE consumer universe
Period end Average rate
Currency Mar-23 Dec-22 qoq (%) 4QFY23 Avg 4QFY22 Avg yoy (%) Companies impacted
Euro 89.4 88.4 1 88.2 84.4 5 Dabur, TCPL
USD 82.1 82.7 (1) 82.2 75.2 9 All Companies
GBP 101.3 100.1 1 99.9 100.9 (1) GCPL, TCPL
Canada 60.7 61.1 (1) 60.9 59.4 2 TCPL
Australia 55.1 56.2 (2) 56.3 54.5 3 TCPL
SL 0.3 0.2 11 0.2 0.3 (33) GCPL, Marico, Dabur, Asian Paints, Sapphire Foods
Bangladesh 0.8 0.8 (3) 0.8 0.9 (11) GCPL, Marico, Dabur, Asian Paints, Pidilite
Nepal 0.6 0.6 (0) 0.6 0.6 0 Dabur, Asian Paints, Devyani International
Indonesia 0.5 0.5 3 0.5 0.5 3 GCPL

Malaysia 18.6 18.8 (1) 18.7 17.9 4 Marico (Revenue), GCPL/HUL (Palm oil imports)
Vietnam 0.4 0.4 (0) 0.3 0.3 6 Marico
South Africa 4.6 4.9 (5) 4.6 4.9 (6) GCPL, Marico, TCPL
Nigeria 0.2 0.2 (1) 0.2 0.2 (1) GCPL, Dabur, Devyani International
Kenya 0.6 0.7 (8) 0.7 0.7 (1) GCPL, TCPL
Turkey 4.3 4.4 (3) 4.4 5.4 (19) Dabur, Jubilant foods
Egypt 2.7 3.3 (21) 2.7 4.7 (41) Marico, Dabur, Pidilite
Middle East (AED) 22.4 22.5 (1) 22.4 20.5 9 GCPL, Marico, Dabur, Asian Paints, Pidilite
Argentina 0.4 0.5 (16) 0.4 0.7 (39) GCPL

Uruguay 2.1 2.1 2 2.1 1.7 21 GCPL
Chile 1.0 1.0 7 1.0 0.9 9 GCPL
Poland 19.1 18.9 1 18.7 18.3 2 TCPL
Czech 3.8 3.7 4 3.7 3.4 8 TCPL
Russia 1.1 1.2 (8) 1.1 0.9 28 TCPL
Consumer Staples
India Research
UPDATE
Metals & Mining

India
4QFY23 preview—margins to recover sequentially Company data and valuation summary

We expect a sequential recovery in domestic steel margins in 4QFY23, Ticker CMP(Rs) FV (Rs) Rating Upside
benefiting from price hikes during the quarter. Steel volumes should see HZ
JSP
306
543
270
580
SELL
REDUCE
-12%
7%
moderate (3% yoy) growth on a high base. Base metal producers should JSTL
VEDL
687
286
685
240
SELL
SELL
0%
-16%
benefit from higher commodity prices during the quarter and lower energy TATA
HNDL
105
403
130
455
BUY
ADD
24%
13%
costs, with lower coal prices. We continue to prefer ferrous stocks over base SAIL
NACL
83
79
55
70
SELL
SELL
-33%
-11%
metals in our metal coverage, given cost support and higher leverage to NMDC 112 150 BUY 34%
Chinese economic recovery. Ticker

P/B (x)
2024E 2025E
P/E (x)
2024E 2025E
EV/EBITDA (x)
2024E 2025E
HZ 5.3 5.3 13.8 14.0 7.6 7.6
JSP 1.2 1.0 9.5 6.3 6.1 4.3
Steel margins recover sequentially, led by improved realizations JSTL

VEDL
2.0
2.2
1.6
2.1 10.1
9.7 7.6
9.5
6.6
5.9
5.3
5.6
TATA 1.0 0.9 11.7 8.7 6.2 5.4
We estimate margins to increase ~Rs2,600/ton qoq in 4QFY23, led by price HNDL 1.4 1.2 10.5 10.4 5.4 5.2
SAIL 0.6 0.6 13.7 12.7 7.0 6.7
hikes during the quarter. We expect (1) an average increase in steel realization NACL 1.0 1.0 7.8 9.8 4.7 5.9
NMDC 1.7 1.6 6.3 6.6 4.2 4.3
of ~Rs2,750/ton qoq (~4.5% qoq), driven by price hikes and contract resets
during the quarter, (2) a US$15-20/ton increase in coking coal costs in the Source: Bloomberg, Company data, Kotak Institutional Equities estimates
quarter and Rs500-750/ton increase in iron ore costs for non-integrated Prices in this report are based on the market close of April 05,
producers, assuming a consumption lag, and (3) we estimate ~3% yoy volume 2023
growth during the quarter for our coverage companies.
For Tata Steel’s Europe division, we estimate EBITDA loss of US$111/ton
(-US$95/ton in 2QFY23), led by weaker prices and stable costs.
NMDC—estimate EBITDA/ton to increase sequentially to Rs 1,614/ton (-26%
yoy, +35% qoq), mainly due to price hikes and operating leverage.
Non-ferrous: Stable aluminum, but weak zinc

We see an improved quarter sequentially for base metal companies in 4QFY23.
Aluminum companies should see sequential improvement in prices, aided by
lower coal costs, whereas higher zinc prices and volume uptick should aid
margins for zinc producers. Zinc/aluminum/alumina prices increased
4%/2.2%/13.5% qoq in 4QFY23 in US$ terms, while INR was stable versus US$.
Hindalco: We estimate India EBITDA to increase sequentially to Rs 23.6 bn (-

42% yoy, +26% qoq), whereas Novelis’ EBITDA should see recovery (US$
420/ton, -3.8% yoy, +11.8% qoq) after hitting a trough in 3QFY23.
Nalco: We estimate EBITDA of Rs 6.4 bn (-60% yoy, +40% qoq), mainly due to
higher commodity prices during the quarter.
HZ: We estimate EBITDA to increase 12.2% qoq (-16.2% yoy), mainly due to
higher metal prices, partly offset by lower hedging gains.
Vedanta: We forecast a 30% qoq increase in EBITDA (-36% yoy) due to
sequentially stronger commodity prices across its key segments—zinc,
aluminum and oil.
Prefer ferrous over base metals in our coverage universe

We expect the tug of war between a slowdown in the west and Chinese recovery Related Research
to continue to weigh on Indian metal equities. Steel margins in 4QFY23 should → Metals & Mining: Aluminum - bleak demand
recover to mid-cycle levels and risk-reward attractive at current valuations. We
→ and fading
Hindalco cost support
Industries: Scaling down growth
expect the aluminum market to remain in surplus, whereas cost support is fading
capexSteel:
→ Tata amidAttractive
market headwinds
risk-reward, upgrade to
with declining coal prices. We forecast aluminum prices to remain range-bound
BUY
and find risk-reward unfavorable for aluminum producers.
Sumangal Nevatia Siddharth Mehrotra

73
Commodity prices in 4QFY23 increased sequentially across the board

Exhibit 1: Price comparison of key commodities on qoq and yoy basis
Change Change
4QFY22 3QFY23 4QFY23 yoy qoq 4QFY22 3QFY23 4QFY23 yoy qoq
(US$/ton) (US$/ton) (US$/ton) (%) (%) (Rs/ton) (Rs/ton) (Rs/ton) (%) (%)
Non Ferrous
Zinc 3,721 3,003 3,122 (16) 4 279,933 246,785 256,497 (8) 4
Aluminum 3,272 2,344 2,395 (27) 2 246,160 192,657 196,811 (20) 2
Lead 2,322 2,123 2,120 (9) (0) 174,707 174,496 174,210 (0) (0)
Copper 10,007 8,054 8,928 (11) 11 752,928 661,852 733,581 (3) 11
Alumina 421 317 360 (14) 13 31,657 26,071 29,581 (7) 13
Silver 24 21 23 (6) 6 1,809 1,756 1,858 3 6
Ferrous
Hard coking coal - spot 494 279 340 (31) 22 37,169 22,960 27,918 (25) 22
Global HRC prices - China export 819 573 661 (19) 15 61,653 47,088 54,269 (12) 15
Iron Ore 62% Fe CFR China 138 101 125 (10) 23 10,389 8,323 10,231 (2) 23
Domestic Steel HRC - Mumbai 65,908 55,677 59,228 (10) 6

Domestic Steel - Rebar 58,650 53,757 56,692 (3) 5
NMDC Iron Ore (Fines) 4,527 2,810 3,743 (17) 33
INR/USD (average) 75.2 82.18 82.2 9 (0.0)
Brent Crude Oil (US$/bbl) 100 89 81 (19) (9)
LME aluminum prices increased 2.2% qoq in 4QFY23 LME zinc prices increased 4% qoq in 4QFY23
Exhibit 2: LME aluminum prices, March 2021-23 (US$/ton) Exhibit 3: LME zinc prices, March 2021-23 (US$/ton)
LME Aluminium price (US$/ton) LME Zinc price (US$/ton)
4,000 5,000
3,500 4,500
3,000 4,000
2,500 3,500
2,000 3,000
1,500 2,500
Sep-21
Sep-22
Jun-22
Jun-21
Dec-21
Dec-22
Mar-21
Mar-23
Mar-22
Sep-21
Sep-22
Jun-22
Jun-21
Dec-21
Dec-22
Mar-21
Mar-23
Mar-22
Source: Bloomberg, Kotak Institutional Equities Source: Bloomberg, Kotak Institutional Equities
Metals & Mining

India Research
74
Average domestic HRC/rebar prices have increased around 6% qoq

Exhibit 4: Domestic prices of HRC and rebar (secondary), March 2021-23 (Rs/ton)
Secondary rebar 12mm (Rs/ton) HRC prices (Rs/ton) (2.5mm)
80,000
75,000
70,000
65,000
60,000
55,000
50,000
45,000
40,000
May-21
May-22
Mar-21
Mar-22
Mar-23
Nov-22
Nov-21
Jan-22
Jan-23
Jul-21
Jul-22
Sep-22
Sep-21
Source: Steelmint, Kotak Institutional Equities
HRC prices across regions improved on China reopening sentiment in 4QFY23

Exhibit 5: HRC steel prices for US, UK, Germany and China, March 2021-23 (US$/ton)
China US UK Germany
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
Jun-21
Jun-22
Nov-21
Nov-22
Sep-21
Sep-22
Jul-21
Jul-22
May-21
Dec-21
May-22
Dec-22
Oct-21
Feb-22
Apr-22
Feb-23
Apr-21
Oct-22
Aug-21
Jan-22
Aug-22
Jan-23
Mar-22
Mar-23
Mar-21
Metals & Mining

India Research
75
International iron ore prices increased 23% qoq Domestic iron ore prices increase after removal of export duty
Exhibit 6: Iron ore (Fe 62%) prices, March 2021-23 (US$/ton) Exhibit 7: NMDC iron ore prices, March 2021-23 (Rs/ton)
China Iron Ore Prices (Fe 62%) NMDC-Fines (Rs/ton)

225 NMDC-Lumps (10-150 mm) (Rs/ton)
7,800
200
6,800
175
5,800
150 4,800
125 3,800
100 2,800
75 1,800
Mar-21
May-21
Mar-22
May-22
Mar-23
Jan-22
Jan-23
Nov-21
Nov-22
Jul-21
Jul-22
Sep-21
Sep-22
Mar-21
Mar-22
Mar-23
Dec-21
Dec-22
Jun-21
Jun-22
Sep-21
Sep-22
Source: Bloomberg, Kotak Institutional Equities Source: Steelmint, Kotak Institutional Equities
Average coking coal prices rise nearly 20% in 4QFY23 sequentially

Exhibit 8: Australian coking coal spot prices, March 2021-23 (US$/ton)
Hard Coking Coal - Spot prices, Australia (US$/ton)
800
700
600
500
400
300
200
100
-
Sep-21
Sep-22
Jun-21
Jun-22
Dec-21
Dec-22
Mar-21
Mar-22
Mar-23
Metals & Mining

India Research
76
Steel spreads rose due to price hikes in Asia, partially offset by input costs
Exhibit 9: Asia and India spreads, March 2021-23 (US$/ton)
Asia Spreads (US$/ton) (LHS) India Spot Spreads (US$/ton) (RHS)

700 750
600 650
500
550
400
450
300
350
200
100 250
- 150
Sep-21
Sep-22
Nov-21
Nov-22
May-21
May-22
Jul-21
Jul-22
Mar-21
Mar-22
Mar-23
Jan-22
Jan-23
European steel spreads continue to rise on moderating energy costs

Exhibit 10: Australian coking coal spot prices, March 2021-23 (US$/ton)
UK Spot Spread (US$/ton) Germany Spot Spread (US$/ton)

1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
-
Nov-21
Nov-22
Sep-21
Sep-22
May-21
May-22
Jul-21
Jul-22
Jan-22
Jan-23
Mar-21
Mar-22
Mar-23
Metals & Mining

India Research
77
We expect steel margins to further strengthen due to prices hikes, partially offset by input cost increases in 4QFY23
Exhibit 11: Ferrous coverage—volumes, realization/ton, EBITDA/ton, March fiscal year-ends, 4QFY21-23E, 2022-25E (‘000 tons, Rs/ton)
Growth (%)
4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23E YoY QoQ 2022 2023E 2024E 2025E
Volumes (000 tons)
JSW Steel 4,060 3,610 3,790 4,000 5,110 4,030 5,010 4,950 5,693 11 15 16,520 20,064 21,979 24,106
Tata Steel - India 4,500 3,990 4,420 4,250 4,970 3,886 4,760 4,590 4,970 - 8 17,630 18,330 18,830 20,830
Jindal Steel 1,910 1,611 2,130 1,820 2,080 1,740 2,010 1,900 2,000 (4) 5 7,640 7,835 8,780 10,998
SAIL 4,350 3,327 4,280 3,840 4,710 3,150 4,210 4,151 4,700 (0) 13 16,150 16,300 16,750 17,000
Realisation/ton (Rs)
JSW Steel 60,094 71,909 73,879 72,125 70,472 77,184 64,858 62,495 65,923 (6) 5 70,780 65,918 59,537 58,642
Tata Steel - India 60,790 69,163 73,716 75,210 73,805 82,401 67,742 66,373 69,302 (6) 4 73,183 70,390 63,367 62,098
Jindal Steel 54,606 64,461 62,259 65,686 66,494 73,842 65,209 62,275 63,957 (4) 3 64,701 66,326 61,732 61,721
SAIL 53,531 62,045 62,680 65,745 65,304 74,728 62,343 60,109 63,476 (3) 6 63,383 63,353 58,197 56,555
EBITDA/ton (Rs)
JSW Steel 19,756 26,291 22,884 17,633 13,517 11,754 4,834 8,141 10,685 (21) 31 19,291 8,950 12,249 13,189
Tata Steel - India 25,977 33,395 31,828 28,659 23,415 21,246 8,124 9,997 13,242 (43) 32 29,002 12,740 14,171 14,538
Jindal Steel 25,568 28,080 21,216 17,404 14,791 16,464 7,093 11,381 12,965 (12) 14 19,682 12,047 11,950 13,272
SAIL 16,778 19,728 16,395 9,990 8,801 5,751 1,740 4,785 7,967 (9) 67 12,525 4,190 4,792 4,904
Exhibit 12: 4QFY23E estimates for ferrous metals coverage universe

3QE Calc Change (%)
4QFY22 3QFY23 4QFY23E yoy qoq

FERROUS
Jindal Steel and Power - consolidated
Net Sales 143,395 124,524 129,882 (9) 4
EBITDA 34,202 22,955 26,177 (23) 14
We estimate steel volumes to increase sequentially to 2 mn tons (-3.8% yoy, +5.3% qoq ) led by recovery
Net profit (adjusted) 19,194 8,151 11,602 (40) 42 in domestic demand during the quarter.
Steel deliveries - Standalone ('000 tons) 2,080 1,900 2,000 (3.8) 5.3
Steel EBITDA/ton (Rs) (standalone) 14,791 11,381 12,965 (12.3) 13.9
JSW Steel - Consolidated
Net Sales 460,260 386,780 474,282 3 23 We expect JSTL to report standalone volume of 4.85 mn tons (+10% yoy, -2% qoq) on a low base and
EBITDA 91,840 47,050 72,749 (21) 55 ramp-up of volumes at Dovli phase II. We estimate steel realization to decline by -12.1% yoy and -2.3%
qoq led by price cuts during the quarter and contract resets.
Net profit (adjusted) 39,750 6,480 24,982 (37) 286
Steel deliveries - Standalone ('000 tons) 5,110 4,950 5,693 11.4 15.0 We estimate standalone EBITDA/ton to recover by 31% qoq to Rs10,685/ton (-21% yoy) led by higher
realisations partly offset by higher input costs
EBITDA/ton - Standalone (Rs) 13,517 8,141 10,685 (21) 31
Tata Steel - Standalone
Net Sales 366,809 304,653 344,429 (6) 13
EBITDA 116,373 45,887 65,813 (43) 43 We estimate steel realization to decline by -2.2% qoq (-11.9% yoy) led by price cuts and contract resets
during the quarter. We expect standalone volumes to increase by 9.8% yoy (-2% qoq) at 4.67 mn tons on a
Net profit (adjusted) 73,189 21,397 37,323 (49) 74 low base. India EBITDA/ton to recover by 54% qoq to Rs 12,495/ton (-56% yoy) led by lower coal costs
Steel deliveries ('000 tons) 4,970 4,590 4,970 - 8 partly offset by lower realizations
EBITDA/ton (Rs) 23,415 9,997 13,242 (43) 32
Tata Steel - Consolidated
Net Sales 693,235 570,836 604,584 (13) 6
EBITDA 157,466 40,478 58,998 (63) 46
We estimate Europe to report EBITDA loss of US$111/ton (-US$95/ton in 3QFY23) led by weak demand
Net profit 97,562 (22,238) 9,557 (90) (143) resulting in adverse product mix partly offset sequentially moderating costs.
Adjusted net profit 107,475 (23,842) 9,557 (91) (140)
Europe - EBITDA/ton (US$) 241 (95) (111) (146) 17
SAIL
Net Sales 307,581 249,514 298,337 (3) 20
We expect SAIL to report a qoq increase of 13.2% (-0.2% yoy) in volumes. We estimate steel realization
EBITDA 41,451 19,863 37,447 (10) 89 to increase by 5.6% qoq (-2.8% yoy) led by price hikes during the quarter.
Net profit (adjusted) 22,216 747 14,791 (33) 1,881
Steel deliveries ('000 tons) 4,710 4,151 4,700 (0) 13 We estimate EBITDA/ton to recover sequentially (+67% qoq) to Rs 7,967/ton (-9.5% yoy) mainly led by
prices hikes partially offset by higher input costs during the quarter.
EBITDA/ton (Rs) 8,801 4,785 7,967 (9) 67
NMDC
Net Sales 67,022 37,200 57,894 (14) 56 NMDC's iron-ore sales declined -4% yoy to 9.5 mn tons during the quarter due to weak demand and export
EBITDA 26,844 11,434 20,108 (25) 76 duty during the first half of the quarter. We estimate blended iron-ore realizations to decline by -39% yoy
led price cuts during the quarter.
Sales volumes ( mn tons) 12.3 9.6 12.5 1 30 We estimate EBITDA/ton to increase sequentially to Rs 1,614/ton (-26% yoy, +35% qoq) mainly on
account of higher prices and operating leverage
EBITDA/ton (Rs) 2,186 1,193 1,614 (26) 35
Metals & Mining

India Research
78
Exhibit 13: 4QFY23E estimates for non-ferrous metals coverage universe

Change (%)
4QFY22 3QFY23 4QFY23E yoy qoq
NON - FERROUS
Hindalco Industries - India
EBITDA 40,510 18,710 23,560 (42) 26
Aluminium sales (tons) 336,000 346,000 346,000 3 -
We estimate India EBITDA (standalone + Utkal) at Rs 23.6 bn (-42% yoy, +26%
Aluminium EBITDA/ton (US$) 1,449 466 637 (56) 37 qoq) with (1) aluminum EBITDA (including Utkal) of Rs 18.1 bn (-51% yoy, +37%
qoq) led by lower costs and (2) Copper EBITDA of Rs 5.5 bn (+41% yoy, flat qoq)
Aluminum EBITDA (Rs mn) 36,640 13,250 18,106 (51) 37
with volumes at 105,000 tons (flat yoy, -3.7% qoq).
Copper sales (tons) 105,000 109,000 105,000 - (3.7)
Copper EBITDA (Rs mn) 3,870 5,460 5,454 40.9 (0.1)
Novelis
Adjusted EBITDA (US$ mn) 431 341 415 (3.8) 21.6 We estimate Novelis EBITDA of US$ 394 mn (-22% yoy, -22% qoq) with
Shipments ('000 t) 987 908 987 - 8.7 EBITDA/ton of US$ 415 (-24% yoy, -19% qoq) led high cost inflation in developed
markets.
Adj. EBITDA/ton (US$) 437 376 420 (3.8) 11.8
Hindalco Industries - Consolidated
Net Sales 557,640 531,510 527,843 (5) (1)
EBITDA 73,050 36,090 56,142 (23) 56 Our consol EBITDA weakness is primarily led by weak earnings at Novelis.
Hindustan Zinc
Net Sales 87,970 78,660 86,252 (2) 10
We estimate zinc/lead/silver sales volume to increase nearly 0.5%/10.2%/12.3%
EBITDA 49,620 37,070 41,594 (16.2) 12.2 yoy respectively on the back of record yearly production numbers
Net profit 29,280 21,560 24,621 (16) 14
Refined Zinc Sales ('000 tons) 214 210 215 0.5 2
We estimate EBITDA to decrease by 16.2% yoy (+12.2% qoq) mainly on the back
Refined Lead Sales ('000 tons) 49 46 54 10.2 17 of lower commodity prices.
Silver Sales (tons) 162 161 182 12.3 13
National Aluminium Co.
Net Sales 43,096 32,900 28,831 (33) (12)
EBITDA 15,874 4,598 6,417 (60) 40 We build in (1) Alumina sales at 300,000 tons, an increase of 10.3% yoy and (2)
5% yoy decline in aluminum sales to 120,000 tons during the quarter
Net profit 10,051 2,739 4,100 (59) 50
Aluminium deliveries ('000 tons) 126 114 120 (5.0) 5.0
Alumina deliveries ('000 tons) 272 287 300 10.3 4.5 Sequential improvement in EBITDA by 40% (-60% yoy) led by volume growth of
Aluminum EBITDA/ton (US$/ton) 1,264 365 420 (67) 15 5%/4.5% qoq in aluminium/alumina and marginal improvement in LME Aluminum
prices by 2.2% qoq (-27% yoy)
Alumina EBITDA/ton (US$/ton) 190 50 93 (51) 85
Vedanta
Net Sales 398,220 341,020 350,724 (12) 3
We forecast a 36% yoy decline in EBITDA(+30% qoq) due to weaker yoy
EBITDA 136,330 67,340 87,759 (36) 30
commodity prices across segements. Sequential improvement led by moderation in
Net profit 57,990 17,990 26,183 (55) 46 costs
Adjusted net profit 61,350 12,290 26,183 (57) 113
EBITDA- Zinc India 49,620 35,750 41,594 (16) 16
EBITDA- Zinc International 4,670 3,100 3,445 (26) 11 We forecast (1) Aluminum EBITDA to decline by -68% yoy but increase +76% qoq
mainly led by lower costs and marginal improvement in realizations/volumes (2) Oil
EBITDA- Iron Ore 5,490 540 3,206 (42) 494
and Gas division to witness -7.6% qoq drop in EBITDA due to windfall tax and lower
EBITDA- Oil and Gas 20,520 16,710 15,442 (24.7) (7.6) crude prices during quarter and (3) Zinc India division to see 16% qoq increase in
EBITDA on the back of record yearly volumes
EBITDA- Aluminum 52,180 9,640 16,945 (68) 76
EBITDA- Steel 2,390 (660) 2,404 1 (464)
Exhibit 14: Indian metals and mining coverage—valuation snapshot

Market cap. CMP (Rs) Fair P/E (X) EV/EBITDA (X) Price/BV (X) RoE (%)
Company (US$ mn) 5-Apr value (Rs) Rating 2022 2023E 2024E 2025E 2022 2023E 2024E 2025E 2022 2023E 2024E 2025E 2022 2023E 2024E 2025E
NMDC 3,988 112 150 BUY 3.5 6.8 6.3 6.6 2.1 4.5 4.2 4.3 1.9 1.8 1.7 1.6 37.0 24.7 25.2 23.0
Hindustan Zinc 15,751 306 270 SELL 13.3 11.8 13.8 14.0 6.7 6.6 7.6 7.6 3.8 5.3 5.3 5.3 29.4 37.4 38.6 38.0
Jindal Steel and Power 6,759 543 580 REDUCE 6.3 11.3 9.5 6.3 4.3 6.4 6.1 4.3 1.5 1.4 1.2 1.0 24.8 13.0 13.5 17.7
JSW Steel 20,237 687 685 SELL 7.8 28.6 9.7 7.6 5.6 11.4 6.6 5.3 2.5 2.4 2.0 1.6 37.1 8.4 22.1 23.3
National Aluminium Co. 1,765 79 70 SELL 4.9 7.9 7.8 9.8 2.5 4.4 4.7 5.9 1.2 1.1 1.0 1.0 27.5 10.7 9.1 6.9
Vedanta 12,976 286 240 SELL 5.4 10.8 10.1 9.5 3.8 6.1 5.9 5.6 1.6 2.4 2.2 2.1 30.7 17.8 22.6 22.7
Tata Steel 15,627 105 130 BUY 3.0 9.7 11.7 8.7 2.8 6.1 6.2 5.4 1.1 1.0 1.0 0.9 45.3 11.0 8.4 10.5
Hindalco Industries 11,052 403 455 ADD 6.6 9.7 10.5 10.4 4.5 5.1 5.4 5.2 1.9 1.5 1.4 1.2 18.8 11.1 9.3 8.7
SAIL 4,155 83 55 SELL 2.7 21.3 13.7 12.7 2.4 8.2 7.0 6.7 0.6 0.6 0.6 0.6 25.3 2.9 4.5 4.8
Metals & Mining

India Research
UPDATE

India
Sector View: Neutral NIFTY-50: 17,557 April 06, 2023
4QFY23 qoq likely better for all except upstream Company data and valuation summary
After a weak 3Q, 4Q should be sequentially better for most names. For RIL, Price (Rs) Fair Value Upside
we expect qoq better earnings in all key segments. OMCs should benefit from Company Rating
Oil, gas and consumable fuels
05-Apr-2023 (Rs) (%)
fuel over-recoveries and resilient refining margins. After a very weak 3Q, Reliance Industries BUY 2,326 2,900 25
ONGC ADD 153 165 8
GAIL’s earnings should look optically stronger qoq but still be down sharply Oil India ADD 262 265 1
BPCL SELL 328 315 (4)
yoy. For CGDs, while volume will likely be flat qoq, margins should improve. HPCL SELL 226 210 (7)
IOCL REDUCE 77 80 4
For PLNG and GSPL, volumes should likely recover qoq. For upstream, while Gas Utilities
net realization would be flat, volumes will be weaker qoq. GAIL (India)
GSPL
REDUCE
BUY
105
266
95
375
(10)
41
Indraprastha Gas BUY 444 495 12
Mahanagar Gas BUY 958 1,100 15
RIL: Better 4Q for all key segments Petronet LNG REDUCE 236 215 (9)
We expect RIL’s consolidated EBITDA to increase 4% qoq and 16% yoy. In O2C, Source: Bloomberg, Company data, Kotak Institutional Equities estimates
refining margins remain resilient, windfall tax impact should be further reduced,
Prices in this report are based on the market close of April
and there would be marginal recovery in petchem. We expect standalone
05, 2023
EBITDA to increase 7% qoq (10% yoy). For Jio, we estimate EBITDA to rise 2%
qoq (16% yoy), driven by higher net adds and qoq stable APRU at ~Rs178. For
Retail, we expect EBITDA to grow 2% qoq (on festive quarter) and 19% yoy.
Upstream: Realizations flat but volumes likely weaker
In 4Q, upstream continued to benefit from high APM prices of US$8.6/mmbtu.
While oil prices were lower by 8%, due to lower windfall taxes, we expect net oil
realization to be 1-2% higher. However, due to qoq weaker volumes (fewer days
in 4Q), we expect EBITDA to decline 2% qoq for both ONGC and Oil India.
OMCs: 4Q should be strong on fuel over-recoveries, resilient GRMs

With no retail price cut, despite a moderation in oil prices and diesel cracks,
OMCs likely made high over-recoveries on transport fuels. In addition, refining
margins remained resilient. SG complex margins of US$8.3/bbl (versus
US$6.3/bbl) stood stronger, though Kotak India complex margins at US$14/bbl
(versus US$16.8/bbl in 3Q) moderated. But despite a strong 4Q, OMCs will have
a weak full-year result, and HPCL will likely report a loss and BPCL a marginal
profit in FY2023.
Gas: after a weak 3Q, 4Q to look optically strong qoq, but weak yoy
GAIL: After a very weak 3Q (EBIT loss in LPG, petchem and marketing), we
expect a better 4Q. Marketing should be strong, driven by high arbitrage on oil-
indexed sales versus HH-linked LNG purchase. LPG should benefit from
improved realization. But petchem will likely remain in losses. Despite qoq
recovery (EBITDA up over 6X qoq), we expect 4Q EBITDA to be down 55% yoy.
PLNG/GSPL: With a moderation in LNG prices, we expect volume recovery for

both. PLNG will also benefit from 5% annual tariff increase at Dahej. For PLNG,
Related Research
adjusted for ship-pay-gain, we expect EBITDA to increase 27% yoy, but down 4%
yoy. We expect GSPL’s EBITDA to increase 2% qoq but down 10% yoy. → Correction makes RIL compelling BUY
→ GAIL: Integrated tariff in line; catalyst behind
CGDs: With elevated prices hurting demand, we expect qoq flat volumes. → OMCs: Low oil and strong refining ease pain
However, margins should improve sequentially for both IGL and MGL on lower
gas costs (HPHT tie-up) and the full benefits of price hikes taken in 3Q. Full sector coverage on KINSITE
Anil Sharma Aditya Bansal

80
We expect qoq improved earnings for all names except upstream (likely flat)
4QFY23E earnings summary, March fiscal year-ends (Rs mn, %)
Change Change
EBITDA qoq yoy Net income qoq yoy
Oil, gas & consumable fuels
RIL 365,276 4 16 167,002 6 3
BPCL 75,203 78 77 46,280 136 117

HPCL 42,365 153 102 21,771 1,163 21
IOCL 122,481 241 5 67,707 1,411 12
ONGC 199,351 (2) 7 109,579 (1) 24

OIL 28,097 (2) 43 54,417 (4) 3
Gas utilities
GAIL 16,655 537 (55) 12,164 395 (55)
GSPL 2,749 2 (10) 1,786 4 (12)
Petronet LNG 10,458 27 (4) 6,535 238 (2)
IGL 4,730 10 (5) 3,388 22 (6)

MGL 2,912 14 35 1,938 13 47
After 11-14% decline in 3Q, oil prices further declined 6-8% in 4QFY23
Brent and Dubai crude oil prices, January 2017 onward (US$/bbl)
(US$/bbl) Brent Dubai

160
140
120
100
80
60
40
20
0
Jan-21
Jan-22
Jan-23
Jan-17
Jan-18
Jan-19
Jan-20
Jul-20
Jul-17
Oct-17
Jul-18
Oct-18
Jul-19
Oct-19
Apr-20
Oct-20
Jul-21
Jul-22
Apr-21
Oct-21
Apr-22
Oct-22
Apr-23
Apr-17
Apr-18
Apr-19
Brent crude price (US$/bbl) Dubai crude price (US$/bbl)

FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023
1Q 68.5 31.6 68.6 112.9 67.2 31.7 66.3 109.0
2Q 61.8 42.7 73.0 99.5 60.8 42.5 71.4 98.3
3Q 62.7 44.5 79.2 88.3 61.5 43.9 77.8 84.6
4Q 50.7 60.6 99.3 81.4 50.9 59.4 96.3 79.6
Average 60.9 44.8 80.0 95.6 60.1 44.4 77.9 93.0
Source: Bloomberg, Kotak Institutional Equities estimates

India Research
81
Windfall taxes averaged ~US$5/bbl in 4Q (versus ~US$15/bbl in Post-windfall tax upstream realization capped at ~US$75/bbl
3Q)
Windfall tax and net realization; from July 2022 (
Windfall tax rates; from July 2022 (Rs/ton, US$/bbl) US$/bbl)
(Rs/ton) Windfall tax (US$/bbl) (US$/bbl) Net realisation Windfall tax
27,500 50 120.0
25,000 40 45 105.0
22,500 40
90.0
20,000 31 35
29
17,500 75.0
30
15,000 2223
25 60.0
12,500 18 18 17
16 20 45.0
10,000 13
7,500 15
8.2 8.5 7.4 30.0
7.2 5.8 10
5,000 3.5
2.8 3.2 15.0
2,500 - 5
- - -
2-Nov
16-Oct
2-Oct
3-Jan
4-Apr
1-Sep
21-Mar
20-Jul
17-Sep
1-Jul
4-Mar
16-Dec
2-Dec
19-Aug
16-Feb
17-Jan
17-Nov
3-Aug
4-Feb
1-Jul
2-Nov
2-Oct
1-Sep
4-Mar
3-Aug
03-Jan
02-Dec
04-Feb
04-Apr
Source: Ministry of Finance, Kotak Institutional Equities estimates Source: Ministry of Finance, Kotak Institutional Equities estimates
Russian oil imports rose to ~30% of imports in January 2023 Discounts on Russian crude imports have narrowed recently
Exhibit 5: Monthly petroleum crude imports from Russia, April Exhibit 6: Price of Russian/ ex-Russian oil imports, from May-
2021 onward (mn ton) 2022 (US$/bbl)
(mt) Imports from Russia (US$/bbl) ex-Russia Russia
7.0 120
6.0
110
5.0
100
4.0
90
3.0
80
2.0
1.0 70
0.0 60
Feb-22
Dec-22
Dec-21
Mar-22
Jan-22
Aug-22
Aug-21
Jan-23
May-22
May-21
Oct-21
Jun-21
Oct-22
Jun-22
Jul-21
Apr-22
Jul-22
Apr-21
Nov-22
Nov-21
Sep-21
Sep-22
Jan-23
Aug-22
May-22
Oct-22
Jul-22
Dec-22
Jun-22
Nov-22
Sep-22
Source: Commerce Ministry, Kotak Institutional Equities


India Research
82
So far in FY2023, Russia’s share of oil imports has been 20%, India's average crude purchase cost has been at ~US$1/bbl
with average discounts of US$10-11/bbl discount to Dubai versus premium in the last 5 years
Exhibit 7: Russia's share of oil imports, till January in FY2023 Exhibit 8: India's avg. crude import cost less Dubai crude (1M
lag), US$/bbl
mn ton US$ bn US$/bbl
Break-up of imports avg import cost less Dubai 1M lag
US$/bbl
Russia 38 25 88
4.0
Ex-Russia 156 114 100
3.0 2.5
Total 194 138 98
2.0 1.5
Russia share % 20 18 0.9
1.0 0.1 0.3
Savings from Russian imports -
Disount US$/bbl 11 (1.0)
Potential savings US$bn 3.2 (2.0) (1.2)
(3.0)
(4.0)
FY23TD
FY18
FY19
FY22
FY20
FY21
Arab Light-Heavy differential further increased in 4Q Saudi Aramco's OSP premiums further moderated in 4Q
Exhibit 9: Arab Light-heavy crude differentials, 1QFY21 onward Exhibit 10: Saudi Aramco's OSP differential for Asia, 2QFY22
onward (US$/bbl)
(US$/bbl) Light-heavy crude differential
4.5 4.1 (US$/bbl) Light Medium Heavy
4.0 3.8 10.0 8.5
3.5 3.2 7.0
8.0
3.0 6.2
6.0 5.4 5.7
2.5 4.8
2.0 1.5 1.5 1.5 1.4 3.8
4.0
1.5 2.3 2.4
1.6
1.0 2.0
0.5
-
-
(0.5) (2.0)
(1.8)
1QFY21
3QFY21
1QFY22
3QFY22
1QFY23
3QFY23
4QFY23
2QFY21
4QFY21
2QFY22
4QFY22
2QFY23
(4.0)
2QFY22
3QFY22
2QFY23
3QFY23
4QFY22
1QFY23
4QFY23
Source: Reuters, Kotak Institutional Equities

Source: Reuters, Kotak Institutional Equities

India Research
83
Reuters complex margins moved up as gasoline, light distillates cracks improved qoq, but Indian complex margins moderated qoq as
diesel cracks moderated in 4QFY23
Exhibit 11: Refining margins, March fiscal year-ends, January 2020 onward (US$/bbl)
(US$/bbl) Singapore refining margins Kotak India refining margins

40
35
30
25
20
15
10
(5)
Jan-20
Jan-21
Jan-22
Jan-23
Mar-20
May-20
Mar-21
May-21
Mar-22
May-22
Mar-23
Jul-20
Jul-21
Jul-22
Nov-20
Nov-21
Nov-22
Sep-20
Sep-21
Sep-22
Kotak India refining margins (a) (US$/bbl) Singapore refining margins (US$/bbl)
2020 2021 2022 2023 2020 2021 2022 2023
1Q 3.7 0.8 1.9 23.2 3.5 (1.0) 2.1 21.5
2Q 6.4 1.1 3.4 11.4 6.6 0.0 3.8 7.1
3Q 6.8 2.3 7.5 16.8 1.7 1.2 6.1 6.3
4Q 4.0 2.1 9.0 13.7 1.2 1.8 8.0 8.3
Average 5.2 1.6 5.5 16.3 3.2 0.5 5.0 10.8
Notes:
a) adjusted for export tax on diesel/petrol from July 1, 2022
Source: Reuters, Kotak Institutional Equities estimates
Diesel crack spreads moderated but still relatively high Kerosene/ATF cracks also moderated but still high
Exhibit 12: Diesel crack spreads, 1QFY18 onward (US$/bbl) Exhibit 13: Jet-kero crack spreads, 1QFY18 onward (US$/bbl)
(US$/bbl) Diesel cracks (US$/bbl) Kerosene cracks
45 42 45
40 39
40 40
34
34 35
35 28
30 26 30
25 25
18 20 15
20
15 12 15
10 10 6
6
5 5
0 0
(5)
2QFY18
3QFY18
2QFY19
3QFY19
1QFY20
2QFY20
1QFY21
2QFY21
4QFY21
1QFY22
4QFY22
1QFY23
3QFY23
4QFY23
1QFY18
4QFY18
1QFY19
4QFY19
3QFY20
4QFY20
Q3FY21
2QFY22
3QFY22
2QFY23
2QFY18
3QFY18
2QFY19
3QFY19
1QFY20
2QFY20
1QFY21
2QFY21
4QFY21
1QFY22
4QFY22
1QFY23
3QFY23
4QFY23
1QFY18
4QFY18
1QFY19
4QFY19
3QFY20
4QFY20
Q3FY21
2QFY22
3QFY22
2QFY23
Source: Reuters, Kotak Institutional Equities estimates Source: Reuters, Kotak Institutional Equities estimates

India Research
84
Gasoline cracks sharply moved up Naphtha cracks further recovered in 4Q

Exhibit 14: Gasoline crack spreads, 1QFY18 onward (US$/bbl) Exhibit 15: Naphtha crack spreads, 1QFY18 onward (US$/bbl
(US$/bbl) Gasoline cracks (US$/bbl) Naphtha cracks
40 10
34 4
35 5 2
1
30 0
25
19.3 (5)
20 (4.1)
1616 (10)
15 12 12 (11)
10 (15)
10 (13)
(20)
5
(25) (21)
0
2QFY18
3QFY18
1QFY19
3QFY19
4QFY19
2QFY20
4QFY20
1QFY21
Q3FY21
1QFY22
2QFY22
4QFY22
2QFY23
3QFY23
1QFY18
4QFY18
2QFY19
1QFY20
3QFY20
2QFY21
4QFY21
3QFY22
1QFY23
4QFY23
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
Q3FY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
Source: Reuters, Kotak Institutional Equities estimates Source: Reuters, Kotak Institutional Equities estimates
FO cracks remained weak, but recovered from lows LPG cracks also further recovered in 4Q
Exhibit 16: Fuel oil crack spreads, 1QFY18 onward (US$/bbl) Exhibit 17: LPG crack spreads, 1QFY18 onward (US$/bbl
(US$/bbl) Fuel oil cracks (US$/bbl) LPG cracks
5 0
(5)
0
(10)
(5) (10)
(15)
(4) (4)
(10) (20)
(10) (25) (22) (22.7)
(15)
(30)
(16.0) (29)
(20) (35)
(40) (39)
(25) (23)
(24) (45) (40)
(30)
2QFY18
3QFY18
1QFY19
3QFY19
4QFY19
2QFY20
4QFY20
1QFY21
Q3FY21
1QFY22
2QFY22
4QFY22
2QFY23
3QFY23
1QFY18
4QFY18
2QFY19
1QFY20
3QFY20
2QFY21
4QFY21
3QFY22
1QFY23
4QFY23
2QFY18
3QFY18
1QFY19
3QFY19
4QFY19
2QFY20
4QFY20
1QFY21
Q3FY21
1QFY22
2QFY22
4QFY22
2QFY23
3QFY23
1QFY18
4QFY18
2QFY19
1QFY20
3QFY20
2QFY21
4QFY21
3QFY22
1QFY23
4QFY23

Export tax significantly declined but recent further extension of Export tax impact on GRMs likely higher as OMCs negotiate
this tax adds to uncertainty lower refinery transfer prices (versus trade parity price)
Exhibit 18: Export tax on diesel, petrol and ATF, from July 1, Exhibit 19: GRM impact of export tax based on trade parity
2022 (Rs/liter) pricing, from July 1, 2022 (US$/bbl)
(US$/bbl)
(Rs/liter) Diesel Petrol ATF GRM impact
2.9
3.0
14.0 2.5
13.5 2.3
13.0 13.0 2.5
12.0 12.0 2.2
2.0 2.0
11.0 1.9
10.5 2.0
10.0 10.0 1.5
1.5 1.3 1.4 1.4
8.0 8.0
7.5 7.5 0.9 0.9 0.9 0.9
7.0
6.0 1.0
0.5
5.0 5.0 5.0 5.0 0.5
4.0 0.10.20.1
2.0 2.5 -
16-Oct
17-Sep
1-Sep
2-Oct
20-Jul
1-Jul
17-Nov
02-Nov
02-Dec
19-Aug
16-Dec
3-Aug
4-Mar
1.0
04-Feb
16-Feb
03-Jan
17-Jan
04-Apr
21-Mar
- 0.5 0.5
- - - - - - - - - - - - - - - - -
20-Jul
2-Oct
16-Oct
17-Sep
1-Jul
1-Sep
4-Mar
21-Mar
19-Aug
03-Jan
16-Dec
17-Jan
02-Dec
3-Aug
16-Feb
04-Feb
02-Nov
17-Nov
04-Apr
Source: Ministry of Finance, Kotak Institutional Equities estimates Source: Ministry of Finance, Kotak Institutional Equities estimates

India Research
85
Export tax has led to a wide variance in reported GRM of Indian refiners; OMCs have benefitted at the
expense of independent refiners
Exhibit 20: GRM comparison domestic refiners; March fiscal-ends, 1QFY23 onward (US$/bbl)
1QFY23 2QFY23 3QFY23

(US$/bbl)
35 31.8
30 27.5
24.5 25.0
25
20 19.0 18.5
16.7 16.8 15.9
15 12.9
11.2
8.6
10 8.4 9.1
5.7
4.5 3.9 4.4
5
0
MRPL CPCL RIL* HPCL BPCL IOCL
Notes:
1) HPCL, BPCL, IOCL reported 2Q/3Q GRMs are before the impact of export tax
2) RIL's GRMs are our estimates. The company reported export tax impact of Rs40 bn/Rs19 bn (US$4/bbl and ~US$2/bbl) in 2Q and
3Q, respectively
Diesel: retail prices remain frozen; with decline in international Petrol: With increased gasoline cracks, the over-recoveries on
prices, OMCs have made over-recoveries recently petrol declined qoq but remained high
Exhibit 21: Diesel retail versus international price, since April- Exhibit 22: Petrol retail versus international price, since April-
2019 (Rs/liter, US$/bbl) 2019(Rs/liter, US$/bbl)
(Rs/liter) (US$/bbl) (Rs/liter) (US$/bbl)
120 Diesel Intl. diesel (RHS) 180 Petrol Intl. gasoline (RHS)
120 180
100 150
100 150
80 120
80 120
60 90
60 90
40 60 40 60
20 30 20 30
- -
- -
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Jul-19
Jul-20
Oct-20
Jul-21
Oct-22
Oct-19
Oct-21
Jul-22
Jan-20
Jan-22
Jan-21
Jan-23
Oct-19
Oct-20
Oct-21
Oct-22
Jul-20
Jul-21
Jul-22
Jul-19
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Jan-21
Jan-20
Jan-22
Jan-23
Source: PPAC, Reuters, Kotak Institutional Equities estimates


India Research
86
After losses over last several quarters, OMCs made near- Over-recoveries on gasoline moderated, but still high
normative margins on diesel in 4Q
Exhibit 24: Gross marketing margins on gasoline, 1QFY19
Exhibit 23: Gross marketing margins on diesel, 1QFY19 onward onward (Rs/liter)
(Rs/liter)
(Rs/liter) Marketing margins on gasoline
12
(Rs/liter) Marketing margins on diesel 10 8.9
10 8 6.8
8 5.9 6 3.4
6 5.6 4
3.1
4 2
2 0
0 (2) (0.7) (0.5)
(2) (4)
(0.8) (6)
(4)
(6) (8)
(8) (5.5) (10)
(10) (12)
(14) (11.2)
(12) (9.5)
2QFY19
1QFY20
3QFY20
4QFY20
2QFY21
3QFY21
1QFY22
4QFY22
3QFY23
1QFY19
3QFY19
4QFY19
2QFY20
1QFY21
4QFY21
2QFY22
3QFY22
1QFY23
2QFY23
4QFY23
(14)
(16) (14.9)
(18)
1QFY19
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
2QFY19
3QFY19
4QFY19
1QFY20
3QFY21
4QFY21
1QFY22
3QFY23
4QFY23
Notes:
(a) from 2QFY23 margins are including impact of export tax
Notes:
(a) from 2QFY23 margins are including impact of export tax
With losses reducing, trend of declining private players market With over-recoveries on petrol, private players market share
share reversed in 3QFY23 increased in 3QFY23
Exhibit 25: Diesel sales by private players, 1QFY20 onward Exhibit 26: Petrol sales by private players, 1QFY20 onward
(mmt, % market share) (mmt, % market share)
(mmt) HSD volume (LHS) (% ) (mmt) MS volume (LHS) (% )

HSD market share (RHS) MS market share (RHS)
3.0 15.0 1.2 12.0
12.5 10.7 9.9
11.4 11.7 11.6 9.4 9.6
2.5 12.5
10.3
0.9 9.0
2.0 10.0 6.7 7.0
5.9
1.5 5.8 7.5 0.6 6.0
5.4
1.0 3.6 5.0
0.3 3.0
0.5 2.5
0.0 0.0 0.0 0.0

2QFY20
4QFY20
3QFY21
1QFY22
4QFY22
2QFY23
1QFY20
3QFY20
1QFY21
2QFY21
4QFY21
2QFY22
3QFY22
1QFY23
3QFY23
3QFY20
4QFY20
3QFY21
4QFY21
3QFY22
4QFY22
3QFY23
1QFY20
2QFY20
1QFY21
2QFY21
1QFY22
2QFY22
1QFY23
2QFY23
Source: PPAC, Companies, Kotak Institutional Equities estimates Source: PPAC, Companies, Kotak Institutional Equities estimates

India Research
87
After 8 months of pause, domestic LPG prices increased by Saudi LPG prices inched up ~12% qoq for 4QFY23, but sharply
Rs50/cylinder in March 2023 declined in April 2023
Exhibit 27: Domestic LPG price in Delhi, March 2017 onward Exhibit 28: Saudi Aramco’s average LPG prices, from January
(Rs/cylinder) 2019 (US$/ton)
Rs/cylinder (US$/ton) Saudi Aramco's LPG price
domestic LPG
1,200 1,000
1,100 900
1,000
800
900
800 700
700
600
600
500 500
400
400
Mar-19
Mar-21
Mar-23
Mar-17
Mar-18
Mar-20
Mar-22
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
300
200
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Jul-22
Jul-19
Jul-20
Jul-21
Oct-19
Oct-20
Oct-21
Oct-22
India’s petroleum product demand likely at all-time high levels in 4QFY23E

Exhibit 29: Petroleum consumption volumes and growth, 1QFY20 onward
Consumption (mn tons)
MS 7.8 7.5 7.5 7.1 5.0 7.1 8.0 7.8 6.8 7.9 8.2 7.9 8.8 8.6 8.8 8.7
HSD 22.6 18.8 21.5 19.8 15.0 15.8 21.2 20.6 18.4 17.3 20.4 20.6 22.2 19.2 22.5 21.9
LPG 5.7 6.8 7.0 6.9 6.5 6.8 7.3 7.0 6.5 7.1 7.3 7.4 6.6 7.3 7.4 7.5
ATF 2.0 2.0 2.1 1.9 0.4 0.8 1.2 1.3 0.9 1.1 1.5 1.4 1.7 1.8 1.9 2.0
FO & LSHS 1.5 1.6 1.6 1.5 1.2 1.4 1.5 1.5 1.5 1.6 1.6 1.5 1.6 1.8 1.7 1.8
Others 14.7 13.9 14.5 15.2 12.7 13.2 16.2 14.7 14.2 13.8 14.2 13.4 14.3 14.0 14.4 15.7
Domestic consumption 55.1 51.1 54.7 52.8 40.8 45.1 55.4 52.9 48.5 48.7 53.3 52.2 55.1 52.6 56.8 57.6
Grow th (% )
MS 10.1 8.1 7.1 (1.2) (35.9) (5.0) 6.3 9.8 35.0 11.6 2.3 1.4 29.4 9.1 7.6 9.4
HSD 2.2 (0.2) 0.5 (7.1) (33.3) (15.7) (1.1) 4.3 22.5 9.0 (3.8) (0.2) 20.3 11.4 10.2 6.6
LPG (1.7) 9.2 14.7 1.3 12.6 (0.1) 4.8 2.0 1.1 4.1 0.2 6.0 0.3 2.8 1.9 1.6
ATF (4.1) (3.2) 1.5 (8.6) (80.4) (59.4) (45.6) (29.7) 143.0 38.0 32.0 5.9 85.3 59.4 23.3 38.8
FO & LSHS (8.7) (4.5) (6.5) (9.0) (18.2) (12.6) (4.2) 1.9 27.0 14.4 6.5 0.4 3.2 11.5 9.4 19.6
Others (0.9) 4.8 0.7 (3.3) (13.7) (5.0) 12.1 (3.6) 12.4 4.4 (12.5) (8.8) 0.4 1.4 1.4 17.3
Domestic consumption 1.1 2.7 2.2 (4.8) (25.9) (11.8) 1.4 0.2 18.8 8.0 (3.9) (1.3) 13.7 8.0 6.7 10.3
Source: PPAC, Kotak Institutional Equities estimates

India Research
88
Petchem—Naphtha-based petchem margins recovered in 4QFY23

Exhibit 30: Asia petchem margins and prices, 1QFY21 onward (US$/ton)
Change (%)
1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 yoy qoq
Global margins
HDPE – naphtha 473 424 496 456 531 371 379 290 192 231 225 253 (13) 12
LLDPE – naphtha 469 427 538 512 544 400 449 398 302 275 253 299 (25) 18
PP – naphtha 539 513 593 574 614 440 448 338 246 241 236 247 (27) 5
PVC – naphtha 430 415 475 474 530 436 493 276 395 340 348 414 50 19
PSF – naphtha 670 436 439 421 493 444 466 485 432 519 506 552 14 9
PFY – naphtha 913 676 698 695 731 683 646 654 624 771 673 692 6 3
PSF – 0.85 x PTA – 0.34 x MEG 401 292 289 234 260 256 319 373 327 328 307 387 4 26
PFY – 0.85 x PTA – 0.34 x MEG 644 532 548 508 498 495 498 542 520 580 474 528 (3) 11
PX – naphtha 239 138 131 146 238 229 151 158 270 373 324 286 81 (12)
Global prices
HDPE 729 809 880 969 1,119 1,034 1,117 1,073 1,119 993 908 932 (13) 3
LLDPE 724 812 914 1,025 1,131 1,063 1,187 1,180 1,229 1,037 937 979 (17) 5
PP 795 898 950 1,088 1,202 1,103 1,186 1,120 1,173 1,003 920 927 (17) 1
PVC 722 807 989 1,175 1,403 1,278 1,541 1,313 1,317 984 808 862 (34) 7
PSF 926 821 814 934 1,081 1,107 1,204 1,267 1,359 1,281 1,190 1,231 (3) 3
PFY 1,169 1,061 1,089 1,208 1,319 1,346 1,383 1,436 1,552 1,533 1,357 1,372 (4) 1
PX 495 523 525 659 826 892 889 940 1,197 1,135 1,008 966 3 (4)
Source: Platts, Kotak Institutional Equities estimates
Spot LNG, US LNG and Oil-linked LNG prices cooled off sharply qoq in 4QFY23
Exhibit 31: Comparative price of LNG contracts, spot LNG and fuel oil, January 2020 onward (US$/mmbtu)
(US$/mmbtu) Spot LNG RasGas LNG Gorgon LNG US LNG Fuel oil
80
70
60
50
40
30
20
10
0
Jan-22
Jan-23
Jan-20
Mar-20
Jan-21
Mar-21
Mar-22
Mar-23
May-21
May-22
May-20
Jul-22
Jul-20
Jul-21
Nov-21
Nov-20
Nov-22
Sep-20
Sep-21
Sep-22
Source: Bloomberg, ICIS, Reuters, Kotak Institutional Equities estimates

India Research
89
Domestic APM gas prices remained unchanged at HPHT ceiling price cut marginally to US$12.1/mmbtu for
US$8.57/mmbtu for 1HFY24 for now 1HFY24
Exhibit 32: Domestic gas price trend, March fiscal year-ends, Exhibit 33: HPHT ceiling price trend, March fiscal year-ends,
2HFY15 onward (US$/mmbtu) 1HFY17 onward (US$/mmbtu)
US$/mmbtu domestic APM gas (GCV) (US$/mmbtu) HPHT ceiling price
10 14 12.5
8.57 12.1
8.57 12
8 9.9
10
6.1 8
6 6.1
6
3.6
4 4
2.90
1.79 2
2
0
1HFY18
1HFY19
2HFY20
2HFY21
1HFY22
1HFY23
1HFY17
2HFY17
2HFY18
2HFY19
1HFY20
1HFY21
2HFY22
2HFY23
1HFY24
0
2HFY15
2HFY16
1HFY17
1HFY18
1HFY19
2HFY20
2HFY21
1HFY16
2HFY22
2HFY17
1HFY24
2HFY18
2HFY19
1HFY20
1HFY21
1HFY22
1HFY23
2HFY23
HH settlement prices declined sharp 45% qoq and ~31% yoy US LNG prices fell sharply (-28% qoq) versus RasGas (-10%
Exhibit 34: Henry Hub settlement prices, from 1QFY20 qoq), improving the spreads on GAIL’s oil-linked US LNG sales
(US$/mmbtu) Exhibit 35: Estimate of RasGas and US LNG prices into India,
from 1QFY20 (US$/mmbtu)
US$/mmbtu HH Settlement price
9.0 8.2 RasGas US LNG
US$/mmbtu
8.0
16.0
7.0 6.3
5.8 14.0
6.0
5.0 12.0
4.0 3.4 10.0

3.0 8.0
2.0 6.0
1.0 4.0
-
2.0
1QFY20
2QFY20
3QFY20
2QFY21
3QFY21
4QFY21
4QFY22
1QFY23
2QFY23
4QFY20
1QFY21
1QFY22
2QFY22
3QFY22
3QFY23
4QFY23
-
1QFY20
4QFY20
1QFY21
4QFY21
3QFY22
4QFY22
2QFY23
3QFY23
2QFY20
3QFY20
2QFY21
3QFY21
1QFY22
2QFY22
1QFY23
4QFY23


India Research
90
We expect ONGC/OIL’s gas production to decline ~1%/4% yoy, KG-D6 production likely to inch up further
Exhibit36: India's gas production trend, April 2018 onward (mmscmd)
mmscmd ONGC Oil India Others Eastern offshore (private)
140
120
100
80
60
40
20
Jan-21
Jan-22
Jan-23
Jan-19
Jan-20
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Source: MoPNG, Kotak Institutional Equities
With cooling of LNG prices, India’s LNG imports recovered in February 2023 (up ~10% mom)
Exhibit 37: LNG imports in India, July 2020 onward (mmscmd)
(mmscmd) LNG import Quarterly avg

110
105
100
95
90
85
80
75
70
May-22
May-21
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-20
Nov-20
Mar-21
Mar-22
Nov-21
Nov-22
Sep-20
Sep-21
Sep-22
Source: MoPNG, Kotak Institutional Equities

India Research
91
PLNG’s Dahej terminal utilization likely inched up to ~76% in January 2023 (versus 68% in 3QFY23)
Exhibit 38: Year-to-date cumulative utilization of Dahej terminal, April 2021 onward (%)
(%) Dahej Hazira Kochi Ennore Mundra

120
100
80
60
40
20
0
Feb-21
Feb-22
Dec-20
Dec-21
Dec-22
Mar-21
Mar-22
Jan-23
Aug-20
Jan-21
Aug-21
Jan-22
Aug-22
May-21
May-22
Oct-20
Jun-21
Oct-21
Jun-22
Oct-22
Jul-20
Jul-21
Jul-22
Apr-21
Apr-22
Nov-20
Nov-21
Nov-22
Sep-20
Sep-21
Sep-22
Source: MoPNG, Kotak Institutional Equities estimates
CGD’s gas costs peak likely behind with HTHP allocation, As MGL was more proactive (versus IGL) in taking price hikes, it
declining LNG prices and likely cut in APM gas prices reduced CNG prices after getting HPHT gas allocation in
Exhibit 39: CGD's input gas cost, from December 2019 February 2023
(Rs/scm) Exhibit 40: IGL and MGL's retail CNG prices (ex-VAT), from
December 2019 (Rs/kg)
(Rs/scm) Input gas cost
35
(Rs/kg)
30 IGL MGL
85
25
20 75
15 65
10 55
5 45
0
35
Dec-19
Dec-20
Mar-21
Dec-21
Dec-22
Mar-23
Mar-20
Mar-22
Jun-21
Jun-20
Jun-22
Sep-20
Sep-21
Sep-22
Dec-19
Dec-20
Dec-21
Dec-22
Mar-21
Mar-22
Mar-20
Mar-23
Jun-21
Jun-22
Jun-20
Sep-20
Sep-21
Sep-22


India Research
92
We expect IGL’s margins to recover in 4QFY23 (after a weak 3Q) We expect MGL’s margins to recover further qoq in 4QFY23
Exhibit 41: IGL’s gross margins on CNG/domestic PNG from Exhibit 42: MGL’s gross margins on CNG/domestic PNG from
December 2018 (Rs/scm) December 2018 (Rs/scm)
(Rs/scm) CNG Domestic PNG (Rs/scm) CNG Domestic PNG

30 30.0
25 25.0
20 20.0
15 15.0
10 10.0
5 5.0
0 0.0
Dec-18
Dec-19
Dec-20
Dec-21
Mar-21
Dec-22
Mar-19
Mar-20
Mar-22
Mar-23
Jun-21
Jun-19
Jun-20
Jun-22
Sep-19
Sep-20
Sep-21
Sep-22
Jun-20
Jun-21
Jun-19
Jun-22
Dec-18
Mar-19
Dec-19
Mar-20
Dec-20
Dec-21
Dec-22
Mar-23
Mar-21
Mar-22
Sep-19
Sep-20
Sep-21
Sep-22
Oil prices further declines, SG complex margins inch up while India refining margins decline marginally,
LNG prices cool off sharply qoq
Exhibit 43: Key energy prices/margins quarterly trends, from 1QFY22
Change qoq
1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 value %
Crude price (US$/bbl)
Brent 68.6 73.0 79.3 99.3 112.9 99.5 88.3 81.4 (6.9) (8)
Inventory movement
Last 45 days 71.5 73.0 75.0 110.6 118.6 93.0 82.6 79.7 (2.9) (3)
Last 30 days 73.4 75.0 74.5 116.2 120.1 90.3 81.0 78.5 (2.5) (3)
Last 15 days 74.8 76.9 75.7 113.9 116.6 88.3 81.7 74.9 (6.8) (8)
Exchange rate (Rs/US$)
USD / INR 73.8 74.1 75.0 75.2 77.2 80.0 82.1 82.2 0.1 0.1
Refining margins (US$/bbl)
Kotak India 1.9 3.4 7.5 8.8 22.6 13.6 18.4 14.4 (4.0) (22)
Export tax adjusted 3.4 7.5 8.8 22.6 11.4 16.7 13.7 (3.0) (18)
Reuters Singapore complex 2.1 3.7 6.1 7.5 21.2 7.1 6.3 8.2 2.0 32
Light-heavy differential 1.1 1.5 1.5 1.5 1.4 3.2 3.8 4.1 0.3 9
Marketing margin (Rs/liter)
Diesel 4.1 5.6 5.9 (0.8) (14.9) (9.6) (5.5) 3.3 8.8 (160)
Gasoline 1.0 3.0 3.4 (0.7) (11.2) (0.6) 8.9 6.8 (2.1) (24)
Gas price (US$/mmbtu)
Domestic GCV 1.8 1.8 2.9 2.9 6.1 6.1 8.6 8.6 — —
Ceiling GCV 3.6 3.6 6.1 6.1 9.9 9.9 12.6 12.6 — —
RasGas 9.0 9.9 10.6 11.1 14.2 15.1 12.9 11.7 (1.3) (10)
US LNG 7.8 9.1 11.2 10.2 12.7 13.9 11.7 8.4 (3.3) (28)
Spot LNG 10.3 18.9 36.3 31.7 28.4 47.9 26.9 15.8 (11.1) (41)
LPG (US$/ton) 517 647 804 802 853 713 607 680 73.3 12
Source: Bloomberg, Reuters, PPAC, Kotak Institutional Equities estimates

India Research
93
RIL’s consolidated EBITDA likely to increase 4% qoq (9% yoy), driven by improvement across all key segments
Exhibit 44: 4QFY23E preview for RIL (Rs mn)
Change (%)
4QFY22 3QFY23 4QFY23E yoy qoq Comments
Reliance Industries (Standalone)
Net sales 1,294,790 1,259,870 1,228,901 (5) (2) We expect RIL’s standalone EBITDA to
EBITDA 145,810 150,340 160,195 10 7 improve 7% qoq reflecting (1) resilient GRM
PBT 132,040 117,320 127,635 (3) 9 and improvement in petchem margins, (2)
Reported PAT 110,940 83,730 95,726 (14) 14 higher E&P profitability on slightly higher gas
EPS (Rs/share) 18.4 13.2 15.1 (18) 14 production.
R-Jio
Net sales 209,010 229,980 232,999 11 1
EBITDA 105,100 120,090 121,996 16 2
We expect EBITDA for R-Jio to increase 2%
qoq largely driven by 5.7mn overall net adds.
EBIT 67,660 71,990 73,415 9 2
We expect blended ARPU to be flat qoq at
PBT 55,920 62,220 63,703 14 2
Rs178.
Reported PAT 41,730 46,380 47,484 14 2
EPS (Rs/share) 4.4 4.9 5.0 14 2
Retail
Net sales 580,170 676,230 692,534 19 2 We expect retail segment EBITDA to increase
EBITDA 35,910 46,570 48,385 35 4 by 19% yoy (2% qoq) driven by increased
EBITDA margin (%) 6.2 6.9 7.0 80 bps 10 bps store footprint and benefits of operating
Reliance Industries (Consolidated)
Net sales 2,073,750 2,171,640 2,268,725 9 4
EBITDA 313,660 352,470 365,276 16 4
We expect consolidated EBITDA to increase
EBIT 233,650 250,600 262,675 12 5
4% qoq (9% yoy) due to sequential
PBT 222,660 230,060 245,349 10 7
improvements across all the key segments.
Reported PAT 162,030 157,920 167,002 3 6
EPS (Rs/share) 25.5 24.9 26.3 3 6
Key Assumptions
O2C
Exchange rate (Rs/US$) 75.0 82.1 82.2 10 0
Refining throughput (mn tons) NA 16.8 17.2 2
Refining GRM* (US$/bbl) NA 11.2 11.0 (1)
E&P
KG-D6 volumes (mmscmd) 19.0 20.5 21.1 11 3
Gas realisation (US$/mmbtu) 6.1 11.5 11.6 90 1
R-Jio
End-period subscriber base (# mn) 410.2 432.9 438.6 6.9 1.3
Average subscriber base (# mn) 415.7 430.3 436.6 5.0 1.5
ARPU (Rs/month) 167.6 178.2 178.2 6.3 0.0
Notes:
a) Refining throughput and GRMs for past periods are our assumptions

India Research
94
OMCs should have strong 4Q, driven by fuel over-recoveries and resilient refining margins
Exhibit 45: 4QFY23E preview for oil marketing companies (OMCs) (Rs mn)
Change (%)
BPCL
Net sales 1,087,736 1,191,581 1,127,576 4 (5) We expect BPCL to report sharp qoq improvement
EBITDA 42,493 42,339 75,203 77 78 in earnings driven by further recovery in auto-fuel
marketing margins. OMCs' marketing margins on
EBIT 29,758 26,519 59,224 99 123 diesel turned positive in 4Q compared to losses in
PBT 30,395 21,258 61,847 103 191 3Q.
Reported PAT 21,305 19,596 46,280 117 136 We assume:

EPS (Rs/share) 10.2 9.4 22.1 117 136 (1) GRM of US$12.5/bbl (versus US$15.9/bbl in
3Q)
Assumptions
(2) Crude throughput 9.5 mmt (+1% qoq)
Crude throughput (mn tons) 8.1 9.4 9.5 17 1 (3) Fuel over-recoveries of ~Rs20.4 bn (versus
Domestic sales (mn tons) 11.8 12.8 12.6 7 (2) ~Rs32 bn under-recovery in 3Q), and
(4) inventory loss of ~Rs12 bn (US$1.25/bbl in
Reported refining margin (US$/bbl) 15.3 15.9 12.5 (18) (21) refining, US$0.6/bbl in marketing).
Fuel under-recovery (Rs mn) (71,738) (31,857) 20,440
HPCL
Net sales 975,727 1,096,032 1,018,944 4 (7) We expect HPCL to report sharp qoq improvement
EBITDA 20,986 16,716 42,365 102 153 in earnings driven by recovery in auto-fuel
marketing margins. OMCs' marketing margins on
EBIT 10,154 5,612 31,093 206 454 diesel turned positive in 4Q compared to losses in
PBT 22,850 1,684 29,093 27 1,627 3Q.
Reported PAT 17,953 1,724 21,771 21 1,163 We assume:

(1) Reported GRM US$10/bbl (versus US$9.1/bbl
EPS (Rs/share) 12.7 1.2 15.3 21 1,163
in 3Q)
Assumptions (2) crude throughput up 1% qoq at 4.9mmt
Crude throughput (mn tons) 4.7 4.8 4.9 4 1 (3) fuel over-recoveries of ~Rs18 bn ( ~Rs24 bn
under-recovery in 3Q), and
Domestic sales (mn tons) 10.3 11.0 10.7 5 (2)
(4) inventory loss of ~Rs7 bn (US$1/bbl in refining;
Reported refining margin (US$/bbl) 12.4 9.1 10.0 (20) 9 US$0.6/bbl in marketing).
Fuel under-recovery (Rs mn) (67,940) (24,651) 17,980 (126) (173)
IOCL
Net sales 1,772,873 2,047,402 2,014,810 14 (2)
We expect IOC to report sharp qoq improvement
EBITDA 116,275 35,934 122,481 5 241 in earnings driven by further recovery in auto-fuel
EBIT 87,402 4,944 90,481 4 1,730 marketing margins. OMCs' marketing margins on
diesel turned positive in 4Q compared to losses in
PBT 80,846 2,567 90,481 12 3,425
3Q.
Reported PAT 60,218 4,480 67,707 12 1,411
EPS (Rs/share) 4.4 0.3 4.9 12 1,411 We assume
Assumptions (1) GRM of US$11.5/bbl (versus US$12.9/bbl in
3Q)
Crude throughput (mn tons) 18.3 18.2 19.2 5 5
(2) qoq 6% higher throughput of 19.2mmt
Domestic sales (mn tons) 20.1 21.6 21.2 6 (2) (3) fuel over-recoveries of ~Rs31bn (versus ~Rs57
bn under-recovery in 3Q), and
Reported refining margin (US$/bbl) 18.5 12.9 11.5 (38) (11)
(4) inventory loss of ~Rs26bn (US$1.5/bbl in
Fuel under-recovery (Rs mn) (119,790) (57,989) 30,779 (126) (153) refining, US$0.6/bbl in marketing).

India Research
95
GAIL should have better 4Q after very weak 3Q (still yoy EBITDA down 55%); volumes should be qoq better for GSPL and PLNG
Exhibit 46: 4QFY23E preview for GAIL, GSPL and PLNG (Rs mn)
Change (%)
GAIL (India)
Net sales 269,619 353,654 364,521 35 3
We expect a 55% yoy decline in EBITDA (qoq
EBITDA 37,145 2,613 16,655 (55) 537
growth sharp due to low base)
EBIT 31,685 (3,612) 10,355 (67) We expect petchem segment to remain in EBIT
PBT 35,459 2,227 16,355 (54) 635 loss, while LPG should return back to profits.
Driven by increased oil index – HH spreads,
Reported PAT 26,831 2,457 12,164 (55) 395
GAIL can surprise on marketing earnings.
EPS (Rs/share) 4.1 0.4 1.8 (55) 395
Segment EBIT
Transmission - Natural Gas 8,733 4,260 4,658 (47) 9
Tranmsission - LPG 852 917 1,000 17 9
Marketing 17,259 (860) 10,000 (42)
Petchem 3,790 (3,489) (2,327) (33)
LPG-LHC 7,283 (292) 1,725 (76)
Assumptions
We assume:
Transmission volumes (mmscmd) 107.6 103.7 108.0 0 4
Gas sales volumes (mmscmd/d) 94.7 89.9 95.0 0 6 (1) a 4% qoq rise in gas transmission volumes
Transmission tariff (Rs/scm) 1.64 1.76 1.77 8 1 to 108 mmscmd;
Transmission tariff (Rs/mmbtu) 43.6 46.6 46.9 8 1
(2) petchem volumes to nearly double qoq (but
Polymers sales ('000 tons) 216 65 140 (35) 115 down 35% yoy), flat realization of Rs115/kg.
PE realisation (Rs/kg) 116 115 115 (1) (0)
LPG volumes ('000 tons) 217 248 246 13 (1) (3) a 12% increase in LPG/LHC realizations to
Rs61/kg.
LPG-LHC realisation (Rs/kg) 55.6 54.6 61.0 10 12
GSPL
Net sales 4,331 4,024 4,231 (2) 5.1
EBITDA 3,062 2,699 2,749 (10) 1.8 We expect modest 2% qoq uptick in EBITDA as
qoq higher volume would likely be offset by
EBIT 2,568 2,210 2,249 (12) 1.8 lower ship-or-pay gains.
PBT 2,598 2,329 2,387 (8) 2.5
Reported PAT 2,020 1,709 1,786 (12) 4.5 We assume
EPS (Rs/share) 3.6 3.0 3.2 (12) 4.5 (1) 12% qoq uptick in gas transmission
volumes to 25 mmscmd, driven by correction
Assumptions
in spot LNG prices,and
Volumes (mcm/d) 29.3 22.3 25.0 (15) 11.9 (2) 8% qoq lower realized tariff at
Transmission tariff (Rs/scm) 1.39 1.68 1.54 10 (8.3) Rs40.8/mmbtu on lower ship-or-pay gains.
Transmission tariff (Rs/mmbtu) 37.0 44.5 40.8 10 (8.3)
Petronet LNG
Net sales 110,771 149,270 138,279 25 (7) We expect a sharp 27% qoq improvement in
Use or pay gains 832 8,489 - (100) NM core EBITDA (3Q was very weak) driven by
recovery in volumes amid correction in LNG
Adjusted EBITDA 10,858 8,264 10,458 (4) 27
prices and 5% tariff hike at Dahej from Jan-
Reported EBITDA 11,691 16,754 10,458 (11) (38) 2023.
EBIT 9,794 14,830 8,508 (13) (43)
PBT 9,844 15,063 8,733 (11) (42) In 3QFY23 reported numbers were boosted by
PLNG accounting for take-or-pay gains of
Reported PAT 7,501 11,805 6,535 (13) (45) Rs8.5 bn for entire CY2022.
Adjusted PAT 6,669 1,933 6,535 (2) 238
EPS (Rs/share) 5.00 7.87 4.36 (13) (45)
Assumptions
Total volumes (tn BTUs) 190 167 189 (1) 13
We assume overall volumes at 189tbtu up 13%
Dahej (tn BTUs) 178 154 176 (1) 14
qoq (but flat yoy), as volumes likely recovered
Kochi (tn BTUs) 12 13 13 8 0 with cooling of spot LNG prices.
Dahej utilisation % 80 68 79 (0.9) 10.6
We assume Dahej utilization to recover to
Kochi utilisation % 19 20 20 1.6 0.2
~79% in 4Q (from ~68% in 3Q).
Blended gross margin (Rs/mmbtu) 68.1 64.1 69.6 2.2 8.6
EBITDA margins (Rs/mmbtu) 57.1 49.5 55.3 (3) 12

India Research
96
CGDs: we expect qoq flat volumes, but unit margins should recover on lower gas cost, full benefit of price increases in 3Q
Exhibit 47: 4QFY23E preview for CGDs (Rs mn)
Change (%)
Indraprastha Gas
Net sales 24,059 37,108 35,886 49.2 (3.3)
We expect IGL's EBITDA to increase 10% qoq.
EBITDA 5,005 4,285 4,730 (5.5) 10.4 The benefit of lower LNG prices, HPHT gas tie-
EBIT 4,252 3,360 3,790 (10.9) 12.8 up, and full impact of price hikes taken in
PBT 4,977 3,891 4,529 (9.0) 16.4 3QFY23, will be part offset by increased APM
short-fall.
Reported PAT 3,616 2,783 3,388 (6.3) 21.8
EPS (Rs/share) 5.2 4.0 4.8 (6.3) 21.8
Assumptions
Volumes (mmscmd) 7.7 8.1 8.2 6.2 1.3
CNG sales (mn kgs.) 357 391 386 8.0 (1.3) We assume
CNG (mmscmd) 5.7 6.1 6.1 8.0 0.6 (1) overall volumes to increase 6% yoy and 1%
qoq to 8.2mmscmd, and
PNG sales (mscm) 188 188 190 1.2 1.1 (2) unit EBITDA margins to recover to
PNG sales (mmscmd) 2.1 2.0 2.1 1.2 3.3 Rs6.4/scm from Rs5.7/scm in 3QFY23.
Gross margin (Rs/scm) 12.7 11.3 12.3 (3.6) 8.3
EBITDA margin (Rs/scm) 7.2 5.7 6.4 (11.0) 11.4
Mahanagar Gas
Net sales 10,868 16,714 15,725 45 (5.9) We expect MGL’s EBITDA to increased 14%
EBITDA 2,155 2,561 2,912 35 13.7 qoq.
We assume volumes to be flat qoq, but gas
EBIT 1,600 1,976 2,312 45 17.0
cost should be lower driven by lower LNG
PBT 1,804 2,274 2,612 45 14.9 prices and tie-up of HPHT gas from early
Reported PAT 1,318 1,721 1,938 47 12.6 February.
EPS (Rs/share) 13.3 17.4 19.6 47 12.6
Assumptions
Volumes (mcm/d) 3.17 3.41 3.42 8.0 0.4
CNG sales (mscm) 205 228 223 9.0 (1.9) We assume
CNG (mmscmd) 2.28 2.47 2.48 9.0 0.3 (1) overall volumes to be flat qoq at
3.4mmscmd
PNG sales (mscm) 80 86 85 5.6 (1.7) (2) unit EBITDA to increase sequentially to
PNG sales (mmscmd) 0.89 0.94 0.94 5.6 0.5 Rs9.5/scm from Rs8.2/scm in 3QFY23.
Gross margin (Rs/scm) 13.3 13.7 15.5 16.3 12.8
EBITDA margin (Rs/scm) 7.6 8.2 9.5 25.1 15.8

India Research
97
For upstream, we estimate 1-2% higher net oil realization; but expect EBITDA to decline 2% qoq on lower volumes
Exhibit 48: 4QFY23E preview for upstream companies (Rs mn)
Change (%)
ONGC
Net sales 344,972 385,833 357,725 4 (7)
EBITDA 185,902 204,112 199,351 7 (2) We expect 2% qoq decline in EBITDA driven
by ~4% qoq lower oil sales. A 8% qoq
EBIT 109,504 139,502 133,529 22 (4)
decline in crude oil prices would likely be
PBT 117,143 146,720 146,496 25 (0) offset by a reduction in windfall taxes.
Reported PAT 88,596 110,447 109,579 24 (1)
EPS (Rs/share) 7.0 8.8 8.7 24 (1)
We model
Assumptions (1) overall crude sales of 4.5mmt (down
Total crude sales (mn tons) 5.1 4.7 4.5 (12) (4) ~4% qoq and 12% yoy)
Total gas sales (bcm) 4.1 4.2 4.2 2 (1) (2) natural gas sales to decline ~1% qoq but
up 1% yoy to 4.16bcm
Gross crude realisation (US$/bbl) 95.0 87.1 80.3 (15) (8)
3) Gross crude price realization of
Net crude realization (US$/bbl) 65.6 52.3 52.8 (20) 1 US$80/bbl (-8% qoq) and;
Windfall tax, royalty and cess (US$/bbl) 29.4 34.9 27.6 (6) (21) 4) Net oil realization (post royalty, windfall
tax, and cess) of US$53/bbl (+1% qoq).
Gas price realization (US$/mmbtu) 3.2 8.6 8.6 170 0
Oil India
Net sales 44,786 58,794 54,417 22 (7)
EBITDA 19,585 28,553 28,097 43 (2) We expect modest 2% qoq decline in
EBIT 17,471 24,017 23,097 32 (4) EBITDA as ~8% qoq lower oil price is largely
PBT 20,421 23,029 22,347 9 (3) offset by reduction in windfall taxes.
Reported PAT 16,300 17,461 16,722 3 (4)

EPS (Rs/share) 15.0 16.1 15.4 3 (4)
Assumptions
Total crude sales ('000 tons) 734 806 775 6 (4)
Total gas sales (mcm) 557 640 615 10 (4) We model
Gross crude realisation (US$/bbl) 98.1 88.3 81.5 (17) (8) (1) Crude oil sales to decline 1.5% qoq but
up ~4% yoy at 761kt;
Net crude realization (US$/bbl) 64.9 50.0 50.8 (22) 2 (2) natural gas sales to be down ~4% qoq
Windfall tax, royalty and cess (US$/bbl) 33.2 38.4 30.8 (7) (20) but up ~10% yoy at 615mmscm.
Gas price realization (US$/mmbtu) 3.2 8.6 8.6 166 0

India Research
UPDATE
Pharmaceuticals / Health Care Services

India
Steady quarter in store Company data and valuation summary

Price (Rs) Fair Value
We expect steady performance for our pharma coverage in 4QFY23, with Rating 05-04-2023 (Rs)
Pharmaceuticals
stable US sales and healthy domestic growth, amid lower cost pressures Aurobindo Pharma ADD 522 525
Biocon REDUCE 213 210
driving 14% yoy EBITDA growth (ex-BIOS). We expect a sequentially stronger Cipla BUY 896 1,135
print for hospitals and an uptick in non-Covid B2C volumes for diagnostics Divis Laboratories SELL 2,890 2,380
Dr Reddy's Laboratories ADD 4,683 4,725
companies in 4QFY23. SUNP and CIPLA are our top picks in Pharma, whereas Gland Pharma REDUCE 1,267 1,375
Laurus Labs REDUCE 306 295
APHS, KIMS and RAINBOW are our top picks in Health Care Services. Lupin REDUCE 659 720
Sun Pharmaceuticals ADD 997 1,140
Torrent Pharmaceuticals REDUCE 1,578 1,600
Pharma: Steady US, healthy domestic and yoy margin expansion in store Health Care Services
Apollo Hospitals BUY 4,201 5,520
We expect a steady 4QFY23 for our pharma coverage, with greater stability in the Aster DM Healthcare BUY 240 285
Dr Lal Pathlabs SELL 1,854 1,610
base US portfolio, healthy domestic sales amid gradual easing of cost pressures. KIMS BUY 1,415 1,735
Max Healthcare ADD 419 490
Nonetheless, there have not been any big-ticket launches in the US by any Metropolis Healthcare REDUCE 1,252 1,340
Narayana Hrudayalaya ADD 760 815
company under our coverage in 4QFY23, which will restrict any meaningful uptick Rainbow Children's Medicare ADD 743 840
in US sales sequentially. We expect DRRD and CIPLA to report US$85 mn and

Source: Bloomberg, Company data, Kotak Institutional Equities estimates
US$26 mn sales from gRevlimid, respectively. Despite the NLEM impact, we build
in a healthy 5-18% yoy domestic growth for our coverage in 4QFY23. For the API Prices in this report are based on the market close of April 05,
2023
segment, we build in a sequential volume-led recovery. We expect lower CDMO
sales for DIVIS and LAURUS due to lesser contribution from Covid drugs. We
factor in elevated R&D expenses toward specialty for SUNP and ARBP. Owing to Quick Numbers
acquisitions by BIOS and TRP, their yoy performance is not comparable. Overall,
ex-BIOS, we expect 7.4% yoy sales growth (-1.5% qoq) in 4QFY23 for our pharma Ex-BIOS, we expect a 14% yoy growth (-8.5% qoq) in
coverage. On the operating front, we expect 14% yoy growth in EBITDA (-8.5% EBITDA for our pharma coverage in 4QFY23.
qoq) for our pharma coverage (ex-BIOS). The sequential drop is largely owing to
We expect an EBITDA growth of 23% yoy and 5% qoq
lower gRevlimid sales, lower Covid contribution and seasonality. for our hospital coverage in 4QFY23.
Hospitals: Seasonally strong quarter ahead For DLPL and METROHL, we bake in a healthy 12-20%
In a seasonally strong quarter, we expect a sequentially better print for the India - yoy non-Covid growth, aided by a low non-Covid base.
based hospitals (except for RAINBOW), led by higher occupancies. The

sequential improvement in sales (+2.4% qoq) will be despite a slightly slower
January than usual. On the other hand, we expect sequentially flat or lower trends
in ARPOB. Overall, for the India-based hospitals (except KIMS), we forecast
growth of 20-26% yoy in 4QFY23. For KIMS, financials are not comparable on a
yoy basis due to the integration of Sunshine and Nagpur in 1HFY23. For
ASTERDM, we expect GCC to do well in a seasonally strong quarter. Overall, we
expect EBITDA growth of 23% yoy and 5% qoq for our hospital coverage.
Diagnostics: We expect uptick in B2C volume growth

For diagnostic companies, we expect non-Covid realizations per patient to be
largely flat qoq, and non-Covid volumes to improve qoq. For DLPL and METROHL,
we bake in a healthy 12-20% yoy non-Covid growth, aided by a low non-Covid base
due to the Omicron wave. We note there is no incremental adjustment for the
Related Research
Suburban and Hitech acquisitions from 4QFY23, as they are now fully in the base.
We build in sequentially lower Covid sales for DLPL and METROHL. Overall, we → LAURUS: Not the right time yet
bake in 12% qoq and 4% qoq EBITDA growth rates for DLPL and METROHL, → BIOS: Insulin saga adds to the uncertainty
respectively, in 4QFY23. The lower growth in METROHL is largely owing to loss → MAX: What if Max becomes the CARE-taker
of the NACO contract (used to be 4-5% of sales) from February 2023.
Alankar Garude, CFA Samitinjoy Basak

99
Fair value revisions: Lower estimates and FV for LPC and GLAND; rest unchanged
We lower our FY2024E and FY2025E EPS for LPC by 3% each owing to lower US sales. Similarly, for
GLAND, we lower our FY2024 and FY2025E EPS by 2-3% largely on lower ROW sales and gross margins.
Accordingly, we lower LPC’s FV to Rs695/share (Rs720/share earlier) and GLAND’s FV to Rs1,335/share
(Rs1,375/share earlier). We revised our FY2023 estimates for almost all companies and maintain our
FY2024E and FY2025E EPS for our pharma and health care services coverage, barring LPC and GLAND.
Accordingly, our fair values for all companies, except LPC and GLAND, remain unchanged.
Pharmaceuticals:
We expect a steady 4QFY23 for our pharma coverage, with greater stability in the base US portfolio and
healthy domestic sales amid gradual easing of cost pressures. Nonetheless, there have not been any
big-ticket launches in the US by any company under our coverage in 4QFY23, which will restrict any
meaningful uptick in US sales sequentially. For most companies in the US, except for CIPLA and ARBP,
we build in a qoq decline or flat sales, wherein sales will be boosted by the ramp-up of Leuprolide Acetate
and specialty. gRevlimid sales for DRRD (albeit down qoq) and Cipla will also provide further respite. We
expect DRRD and CIPLA to report US$85 mn and US$26 mn sales from gRevlimid, respectively, whereas
LPC is expected to report tad lower sales sequentially from gSuprep in the quarter. Despite the NLEM
impact, we build in a healthy 5-18% yoy domestic growth for our coverage in 4QFY23. For the API
segment, we build in a sequential volume-led recovery. On the other hand, we expect lower CDMO sales
for DIVIS and LAURUS owing to lesser contribution from Molnupiravir and Paxlovid. In our coverage, we
bake in elevated R&D expenses toward specialty for SUNP and ARBP. Owing to the Viatris acquisition by
BIOS (effective November 29, 2022) and Curatio acquisition by TRP (effective October 14, 2022), their
yoy performance is not comparable. Overall, excluding BIOS, we expect 7.4% yoy sales growth (-1.5%
qoq) in 4QFY23 for our pharma coverage. On the operating front, we expect 14% yoy growth in EBITDA
(-8.5% qoq) for our pharma coverage (ex-BIOS). The sequential drop is largely due to lower gRevlimid
sales, lower Covid contribution and seasonality.
Exhibit 1: Aggregate net revenues of KIE Pharmaceuticals coverage to grow 7.4% yoy in 4QFY23
March fiscal year-ends, 2021-23E (Rs mn, %)
Pharmaceuticals revenues ex-BIOS (Rs mn, LHS) yoy growth (%, RHS)
600000 557,004 100
500000 80
77.4 402,338 405,644 399,413 60
400000 370,767 374,418 371,793 379,029
345,112 351,386 336,453
314,046 40
300000
20
200000
9.3 12.4 10.5 0
5.1 5.9 7.4 6.6 8.5 8.3 7.4
100000 (20)
0 (40)
(32.0)
2QFY21
4QFY21
1QFY22
3QFY22
1QFY23
2QFY23
1QFY21
3QFY21
2QFY22
4QFY22
3QFY23
4QFY23E
Notes:
(a) We have not considered BIOS in this calculation, owing to the recent Viatris acquisition
Pharmaceuticals
India Research
100
Exhibit 2: Aggregate EBITDA of KIE Pharmaceuticals coverage to grow 14% yoy in 4QFY23
Pharmaceuticals EBITDA ex-BIOS (Rs mn, LHS) EBITDA margin (%, RHS)
160000 30
24.5 25.3 25.1 136,348 24.8 24.5
140000 23.6 23.7 23.8
21.9 22.2 25
20.9
120000 24.5
98,582 96,676 20
100000 87,374 88,045 91,990 88,596 88,503
79,309 82,954
76,815 77,667
80000 15
60000
10
40000
5
20000
0 0
1QFY21
4QFY21
2QFY22
3QFY22
1QFY23
3QFY23
2QFY21
3QFY21
1QFY22
4QFY22
2QFY23
4QFY23E
Notes:
(a) We have not considered BIOS in this calculation owing to the recent Viatris acquisition
Exhibit 3: Aggregate adjusted PAT of KIE Pharmaceuticals coverage to grow 12% yoy in 4QFY23
Pharmaceuticals PAT ex-BIOS (Rs mn, LHS) PAT margin (%, RHS)
100000 20
86,215 17.3 16.8
90000 16.3 18
15.4 15.2
80000 14.4 14.7 14.7 14.3 16
12.7 13.2
70000 15.5 63,998 63,051 60,963 14
57,141 55,601 58,150
60000 53,063 52,841 12
49,342 47,282
50000 45,083 10
40000 8
30000 6
20000 4
10000 2
0 0
1QFY21
4QFY21
2QFY22
3QFY22
1QFY23
3QFY23
2QFY21
3QFY21
1QFY22
4QFY22
2QFY23
4QFY23E
Notes:
(a) We have not considered BIOS in this calculation owing to the recent Viatris acquisition
Pharmaceuticals
India Research
101
Exhibit 4: KIE Pharmaceuticals coverage—4QFY23 preview

4QFY22 3QFY23 4QFY23E %yoy %qoq Comments
Aurobindo Pharma
Net sales 58,094 64,071 62,745 8.0 (2.1)
EBITDA 9,744 9,544 10,014 2.8 4.9
We expect ARBP's US sales to grow 2% yoy to US$372 mn (+2% qoq) led by increasingly stable pricing, healthy demand and further uptick in specialty
EBIT 7,208 6,330 6,717 (6.8) 6.1
sales. For the ARV segment, we bake in a sequential decline of 21%. We expect EU and ROW markets both to report 5% yoy growth in 4QFY23.
PBT 7,408 6,686 7,077 (4.5) 5.9
Tax 175 1,891 1,741 895.3 (7.9)
Adjusted PAT 7,344 4,913 5,663 (22.9) 15.3
We expect ARBP's gross margins to increase marginally by 20 bps qoq to 54.8% due to stable pricing and an improved product mix. Despite elevated
EPS (Rs/share) 12.5 8.4 9.7 (22.9) 15.3
R&D spends at 6.4% of sales, we expect ARBP's 4QFY23 EBITDA margins to expand 110 bps qoq to 16.0% on account of lower freight costs.
Biocon
Net sales 24,088 29,411 36,475 51.4 24.0
We note yoy and qoq estimates are not comparable due to the Viatris' acquisition effective November 29, 2022. We forecast ~US$252 mn biosimilars
EBITDA 5,919 6,443 8,191 38.4 27.1
sales for BIOS in 4QFY23, in line with management's guidance of exiting FY2023 at a US$1 bn annualized biosimilars sales mark. On an overall basis, we
EBIT 3,793 3,428 3,997 5.4 16.6
build in 51% yoy top-line growth to Rs36.5 bn. We factor in 19% yoy growth for Syngene (seasonally strongest quarter) and 6% yoy growth for generics,
PBT 3,831 2,455 1,742 (54.5) (29.0) respectively.
Tax 586 (48) 396 (32.5) NM
Adjusted PAT 2,796 2,296 1,000 (64.2) (56.5)
We build in 130 bps qoq compression in gross margins to 65.4% for BIOS in 4QFY23. On an overall basis, we build in 60 bps qoq expansion in EBITDA
EPS (Rs/share) 2.3 1.9 0.8 (64.2) (56.5)
margins at 22.5%. Absolute EBITDA increases by 38% yoy and 27% qoq to Rs8.2 bn on account of the Viatris acquisition.
Cipla
Net sales 52,603 58,101 55,276 5.1 (4.9)
EBITDA 7,497 14,076 10,795 44.0 (23.3) In a seasonally weak quarter, we expect Cipla to report 5% yoy growth (down 5% qoq) in domestic sales in 4QFY23. We build US sales of US$198 mn,
EBIT 4,594 11,354 8,115 76.6 (28.5) up 1.5% qoq, led by marginally higher gRevlimid sales at US$26 mn and ramp-up of Leuprolide Acetate. We build in 16% yoy decline in South Africa
PBT 5,053 12,181 8,395 66.1 (31.1) (recovery expected from 1QFY24) and 19% yoy decline in ROW in 4QFY23.
Tax 711 4,100 2,769 289.4 (32.5)
Adjusted PAT 4,196 8,008 5,502 31.1 (31.3) To recall, Cipla's operating performance in 4QFY22 was impacted due to Covid charges as well as restructuring of its South Africa business. Adjusted
for these factors, Cipla's 4QFY22 EBITDA stood at Rs9.5 bn. On a reported basis, we expect Cipla's gross margins to decline 210 bps sequentially to
EPS (Rs/share) 5.2 9.9 6.8 31.1 (31.3)
63.4%. After factoring in slightly higher R&D (6.1% of sales), we expect 470 bps qoq compression in EBITDA margins to 19.5%. We expect adjusted
EBITDA margin (%) 14.3 24.2 19.5 527 bps -470 bps EBITDA to grow 14% yoy to Rs10.8 bn.
Divis Laboratories
Net sales 25,184 17,077 18,163 (27.9) 6.4
We build in 28% yoy overall sales decline for Divi's in 4QFY23 due to a high Molnupiravir-led base. Compared to ~US$95 mn sales in 4QFY22, we
EBITDA 11,044 4,083 5,102 (53.8) 25.0
estimate nil Molnupiravir sales by Divi's in 4QFY23. On an ex-Molnupiravir basis, we build in overall flattish yoy sales. We note CSM sales in 4QFY23
EBIT 10,234 3,215 4,252 (58.5) 32.3
would be partially benefitted by initial sales from the fast-track projects. We expect generic API and nutraceutrical sales to grow 26% yoy and 5% yoy
PBT 10,757 4,356 5,091 (52.7) 16.9 respectively in 4QFY23.
Tax 1,811 1,288 1,273 (29.7) (1.2)
Adjusted PAT 8,946 3,068 3,818 (57.3) 24.4
Post reporting all-time low margins in 3QFY23, we factor in a sequential improvement of 420 bps in Divi's EBITDA margin to 28.1% in 4QFY23. On the
EPS (Rs/share) 33.7 11.6 14.4 (57.3) 24.4
gross margin front, we bake in a 340 bps qoq improvement (albeit down 660 bps yoy) to 60.1% due to lower incremental impact of high cost inventory.
Dr Reddy's Laboratories
Net sales 54,367 67,700 63,105 16.1 (6.8)
EBITDA 11,701 20,582 16,715 42.9 (18.8) We expect North America base business (ex-Revlimid) sales to stay flattish at US$245 mn. In our estimates, we factor in ~US$85 mn of gRevlimid
EBIT 8,742 17,291 13,415 53.5 (22.4) sales in US in 4QFY23 for DRRD, lower than ~US$115 mn and ~US$130 mn in 2QFY23 and 3QFY23 respectively. We expect DRRD's domestic sales to
PBT 9,892 16,420 13,655 38.0 (16.8) grow 11% yoy in 4QFY23. We expect 2% yoy growth and 20% yoy decline in Europe and Russia respectively in 4QFY23.
Tax 1,608 3,875 3,532 119.7 (8.8)
Adjusted PAT 8,389 12,605 10,203 21.6 (19.1)
Owing to lower gRevlimid sales, we expect a sequential decline of 300 bps and 390 bps in DRRD's 4QFY23 gross and EBITDA margins to 56.2% and
EPS (Rs/share) 50.5 75.9 61.5 21.6 (19.1)
26.5%, respectively. On a yoy basis, though, we expect DRRD's EBITDA margin to improve 500 bps in 4QFY23.
Gland Pharma
Net sales 11,030 9,383 10,132 (8.1) 8.0
EBITDA 3,484 2,896 3,122 (10.4) 7.8 We expect another muted quarter for Gland, although marginally better sequentially on an improved supply scenario. We build in a 8% yoy decline in
Gland's overall sales in 4QFY23. We expect increased competitive intensity in US amidst absence of meaningful launches to weigh in on Gland's
EBIT 3,173 2,520 2,732 (13.9) 8.4
4QFY23 performance. Accordingly, we bake in a 4% yoy decline in US sales to US$76 mn. We build in a 10% yoy growth in ROW in 4QFY23 aided by GCC,
PBT 3,805 3,109 3,387 (11.0) 9.0 Asia, CIS and South Africa. On a high base amidst the NLEM impact, we estimate a 54% yoy decline in India sales in 4QFY23.
Tax 946 789 915 (3.3) 15.9
Adjusted PAT 2,859 2,319 2,473 (13.5) 6.6
Owing to a higher regulated market mix, we factor in 400 bps yoy expansion in gross margins to 54.6% in 4QFY23. Our EBITDA margin estimate of
EPS (Rs/share) 17.4 14.2 15.1 (13.3) 6.6
30.8% for Gland in 4QFY23 is down 80 bps yoy.
Laurus Labs
Net sales 14,248 15,448 15,265 7.1 (1.2)
EBITDA 3,967 4,036 3,728 (6.0) (7.6) On a low base, led by volume uptick, we expect ARV API sales to grow 34% yoy in 4QFY23. We build increased volumes for the ARV formulation
business as Laurus bids for winner-takes-all tenders amid lower pricing. Overall, we expect a 16% yoy decline in formulation sales (albeit up 65% qoq) in
EBIT 3,310 3,191 2,836 (14.3) (11.1)
4QFY23 largely due to lower ARV pricing. Compared to ~US$40-45 mn Paxlovid intermediate sales in 3QFY23, we build in just ~US$5 mn Paxlovid sales
PBT 3,017 2,779 2,695 (10.7) (3.0) in this quarter. Owing to sharp drop in Paxlovid sales, we bake in a 49% qoq sales decline in the Synthesis segment to Rs3.3 bn in 4QFY23.
Tax 698 748 625 (10.5) (16.4)
Adjusted PAT 2,305 2,030 2,043 (11.4) 0.6
EPS (Rs/share) 4.3 3.8 3.8 (11.4) 0.6 We expect the company to report 340 bps yoy and 170 bps qoq compression in EBITDA margin to 24.4% in 4QFY23.
Lupin
Net sales 38,830 43,222 42,817 10.3 (0.9)
EBITDA 2,678 5,327 5,370 100.5 0.8 We expect Lupin to report US$175 mn US sales in 4QFY23, tad lower than US$177 mn in 3QFY23 due to lower seasonality benefit as well as lower
EBIT (594) 3,123 3,135 NM 0.4 gSuprep sales being offset by greater stability in pricing. We expect domestic sales to grow 9% yoy for Lupin. We expect Lupin's overall sales in
PBT (852) 2,461 2,635 NM 7.1 4QFY23 to grow 10% yoy (flat qoq).
Tax 4,267 885 264 (93.8) (70.2)
Adjusted PAT (5,180) 1,535 2,332 NM 51.9 On the gross margin front, we expect 120 bps qoq compression to 59.3% (up 130 bps yoy). We expect EBITDA margins to expand 20 bps qoq to 12.5%
EPS (Rs/share) (11.5) 3.4 5.2 NM 51.9 in 4QFY23 despite higher staff costs on account of the MR additions in the domestic business. We expect Lupin's 4QFY23 EBITDA to grow 100% yoy
EBITDA margin (%) 6.9 12.3 12.5 564 bps 21 bps (flat qoq) to Rs5.4 bn.
Sun Pharmaceuticals
Net sales 94,468 112,410 106,300 12.5 (5.4)
We expect SUNP to deliver a steady 4QFY23 with 12.5% yoy topline growth, albeit 5% qoq decline due to lower US sales from Halol, impact of
EBITDA 21,794 30,069 26,799 23.0 (10.9)
seasonality as well some impact of the IT security incident. We are building in US$405 mn US sales (down 4% qoq) in 4QFY23, due to lower Halol sales
EBIT 16,229 23,469 20,099 23.8 (14.4)
as well as lower specialty sales. Ilumya, Winlevi and Odomzo have continued to scale up well in 4QFY23. We build in 8% and 14% yoy growth respectively
PBT 16,991 24,715 21,129 24.4 (14.5) in India and ROW/EMs in 4QFY23.
Tax 1,468 2,834 2,530 72.4 (10.8)
Adjusted PAT 16,584 21,660 18,300 10.3 (15.5)
We expect SUNP's EBITDA to grow 23% yoy to Rs26.8 bn, with margin of 25.2% in 4QFY23. We bake in 150 bps EBITDA margin compression on a qoq
EPS (Rs/share) 6.9 9.0 7.6 10.3 (15.5)
basis (up 210 bps yoy) for Sun in 4QFY23 driven by lower sales and higher R&D.
Torrent Pharmaceuticals
Net sales 21,040 24,910 24,283 15.4 (2.5)
EBITDA 5,340 7,240 7,327 37.2 1.2 We build in strong 18% yoy domestic growth for Torrent in 4QFY23 aided by contribution from the Curatio portfolio. In US, we bake in tad lower sales
EBIT 3,720 5,310 5,377 44.6 1.3 sequentially at US$34 mn. We expect 8% yoy growth in Brazil in 4QFY23 on a high base of 33% yoy growth in 4QFY22. In Germany, we build in 12% yoy
PBT 3,710 4,190 4,827 30.1 15.2 growth in 4QFY23 on a low base of 18% yoy decline in 4QFY22.
Tax 310 1,360 1,569 406.1 15.4
Adjusted PAT 3,400 2,830 3,259 (4.2) 15.1 There was a one-off hit of ~60 bps on 3QFY23 gross margins due to the under-absorption of manufacturing costs, which will reverse in 4QFY23.
EPS (Rs/share) 10.0 8.4 9.6 (4.2) 15.1 Accordingly, we bake in 80 bps gross margin expansion in 4QFY23 to 71.5%. We factor in 480 bps yoy EBITDA margin expansion to 30.2% for TRP in
4QFY23. On a sequential basis, we build in an expansion of 110 bps.
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Exhibit 5: Aurobindo Pharma received maximum number of low competition final ANDA approvals in 4QFY23
List of low competition final approvals in 4QFY23, March fiscal year-end, 2023E
Generic Name Treatment Company Name No. of Approval Opportunity
Final approvals
Fetzima
20,40,80,120mg Levomilnacipran Major Depressive There are 8 FTFs for this product and all were litigated. Litigation with
Aurobindo 1st
Capsule, extended hydrochloride Disorder Aurobindo settled. Aurobindo may launch in CY2031.
release
Briviact Partial-onset Total US sales - US$279 mn. There are 7 Para-IV filers and all are FTFs.
Brivaracetam Aurobindo 2nd
50, 100mg Tablet seizures No generic launch before Feb 2026 (compound patent expiry)
Nasal symptoms
Astepro Allergy
Azelastine such as Total US sales - US$18 mn. There are 3 Para-IV filers and litigation is
(OTC) Nasal spray Aurobindo 1st
Hydrochloride runny/itching/stuffy settled with all. No generic launch before Nov 2025.
205.5mcg/spray
nose
Linzess Irritable bowel Total US sales - US$761 mn. There are 5 Para-IV filers and litigation is
145mcg, 290 mcg Linaclotide syndrome with Aurobindo 1st settled with all. According to settlement agreement, Aurobindo can
Capsule constipation launch its generic on Aug 05, 2030.
Truvada
100;150mg, Emtricitabine and
HIV and hepatitis B All patents have expired. Amneal and Zydus have launched already.
133;200mg, Tenofovir Disoproxil Aurobindo 3rd
virus infection Aurobindo can launch generic anytime.
167;250mg Fumarate
Tablet
Ibuprofen and All patents have expired. OHM labs have launched the generic OTC
Advil cold and sinus Reduce nasal and
pseudoephedrine Aurobindo 4th already. Dr Reddy’s and J&J have not launched despite an approval.
200;30mg Tablet sinus congestion
hydrochloride Aurobindo can launch anytime.
Arthritis, blood
Delta-Cortef All patents have expired. Watson has launched already. Aurobindo can
Prednisolone problems, immune Aurobindo 2nd
5mg Tablet launch generic anytime now.
system disorders
Emtriva Total US sales - US$18 mn. All patents have expired. Cipla has launched
Emtricitabine HIV infection Aurobindo 2nd
200mg Capsule already. Aurobindo also launched in the week 15th-21st Mar, 2023.
Claritin All patents have expired. Bionpharma and Marksans have launchd
Loratadine Antihistamine Aurobindo 3rd
10mg Capsule already. Aurobindo can launch generic anytime.
Timoptic-xe
Ocular hypertension
0.5% All patents have expired. Dr.Reddy’s, Alembic and Gland pharma have
(high pressure in
Solution, gel Timolol maleate Aurobindo 4th launched already. Eugia also launched its generic in the week 22nd-28th
the eye)/ open-
forming / Mar, 2023.
angle glaucoma
ophthalmic drops
Jevtana Kit Metastatic Total US sales - US268 mn. There are multiple Para-IV filers for this
60mg/1.5mL Cabazitaxel castration-resistant Dr Reddy’s 3rd product and litigation is settled with most. No generic launch before
Injection prostate cancer Dec 2023.
Total US sales - US$15 mn. There are 3 Para-IV filers including Dr

Vascepa Lower blood levels Reddy’s. Teva has already launched its generic; Hikma also holds a final
Icosapent Ethyl Dr Reddy’s 3rd
500mg Capsule of triglycerides approval. Litigation ongoing with Dr Reddy’s but they may launch ‘at-risk’
anytime.
Ketalar Induction and

Ketamine All patents have expired. Hikma, Hospira and Eugia have launched
100mg/mL maintenance of Gland Pharma 4th
hydrochloride already. Gland can launch generic anytime.
Injection anesthesia
Timoptic-XE Ocular hypertension

All patents have expired. Dr Reddy’s and Alembic have launched already.
0.25%, 0.5% (high pressure in
Timolol maleate Gland Pharma 3rd Gland Pharma also launched its generic in the week 15th-21st Feb,
Opthalmic solution; the eye)/ open-
2023.
Gel forming/Drops angle glaucoma
Ganirelix Acetate Total US sales - US$67 mn. All patents have expired. Sun pharma,
Controlled ovarian
250mcg base/ Ganirelix Acetate Gland Pharma 4th Meitheal and Amphaster have launched already. Gland pharma also
stimulation
0.5mL Injection launched generic in the week 1st-7th Mar, 2023.
Retin-A Acne and acute

All patents have expired. Mylan launched as authorized generic. Padagis
0.025% Topical Tretinoin promyelocytic Taro 3rd
also launched the generic. Taro can launch anytime now.
cream leukemia
Orfadin Hereditary All patents have expired. Novitium and Medunik have launched already.
Nitisinone Torrent 3rd
2,5,10 mg Capsule tyrosinemia type 1 Torrent also launched its generic in the week 11th-17th Jan, 2023.
Orfadin Hereditary All patents have expired. Torrent launched its generic in the week 11th-
Nitisinone Torrent 1st
20 mg Capsule tyrosinemia type 1 17th Jan, 2023.
Source: US FDA, Kotak Institutional Equities
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Exhibit 6: Tentative ANDA approvals received by companies under our coverage in 4QFY23
List of low competition tentative approvals in 4QFY23, March fiscal year-end, 2023E
Generic Name Treatment Company Name No. of Approval Opportunity
Tentative approvals
Uncontrollable Total US sales - US$1,081 mn. There are only 4 Para-IV filers including
Ingrezza Valbenazine
movements of Lupin 1st Lupin. Zydus, Teva and Sandoz also hold a tentative approval. No
40, 80mg Capsule Tosylate
tardive dyskinesia generic launch before Oct 06, 2029 (compound patent)
Uncontrollable Total US sales - US$1,081 mn. There are only 2 Para-IV filers including
Ingrezza Valbenazine
movements of Lupin 1st Lupin. Zydus, also holds a tentative approval. No generic launch before
60mg Capsule Tosylate
tardive dyskinesia Oct 06, 2029 (compound patent)
Juluca Total US sales - US$470 mn. Lupin is the only FTF and has settled
Dolutegravir Sodium
50mg;25mg HIV-1 Lupin 1st litigation with innovator. No generic launch before Oct 2027 (compound
and Rilpivirine
Tablet patent expiry)
Total US sales - US$260 mn. There are multiple Para-IV filers including
Ocaliva Primary biliary
Obeticholic acid Lupin 2nd Lupin and litigation is settled with all. According to agreement, Lupin can
5, 10mg Tablet cholangitis
launch generic on Feb 28, 2034
Total US sales - US$3,400 mn. There are multiple Para-IV filers including
Jardiance Control blood sugar
Empagliflozin Sun Pharma 1st Sun and litigation is settled with all. 9 other companies hold a tentative
10, 25mg tablet levels
approval; no generic launch before Aug 2028 (compound patent expiry)
Xiidra Total US sales - US$192 mn. There are only 4 Para-IV filers (all FTFs)
5% Ophthalmic Lifitegrast Dry eye disease Sun Pharma 2nd and litigation is ongoing with all. No generic launch before Nov 2024
solution (compound patent expiry)
Source: US FDA, Kotak Institutional Equities
Exhibit 7: Summary of changes in annual net revenues estimates for KIE Pharmaceuticals coverage
New estimates Old estimates Change (%)
FY2023E FY2024E FY2025E FY2023E FY2024E FY2025E FY2023E FY2024E FY2025E
Revenues (Rs mn)
Aurobindo Pharma 246,570 266,610 282,155 246,369 266,610 282,155 0.1 — —
Biocon 110,478 169,272 198,046 110,807 169,272 198,046 (0.3) (0.0) (0.0)
Cipla 225,414 256,210 284,982 230,071 256,210 284,982 (2.0) 0.0 0.0
Divis Laboratories 76,330 81,882 95,583 76,517 81,882 95,583 (0.2) — —
Dr Reddy's Laboratories 246,016 265,086 294,496 245,273 265,086 294,496 0.3 — —
Gland Pharma 38,528 43,440 51,380 39,038 43,996 52,277 (1.3) (1.3) (1.7)
Laurus Labs 61,862 61,726 71,492 61,862 61,726 71,492 — — —
Lupin 164,933 191,684 211,939 167,307 192,459 212,986 (1.4) (0.4) (0.5)
Sun Pharmaceuticals 435,851 491,449 538,850 442,407 491,449 538,850 (1.5) (0.0) (0.0)
Torrent Pharmaceuticals 95,573 111,562 124,752 96,798 111,562 124,752 (1.3) (0.0) (0.0)
Pharmaceuticals 1,701,554 1,938,922 2,153,674 1,716,449 1,940,253 2,155,619 (0.9) (0.1) (0.1)
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Exhibit 8: Summary of changes in annual EBITDA estimates for KIE Pharmaceuticals coverage
EBITDA (Rs mn)
Aurobindo Pharma 37,575 47,465 51,970 38,081 47,465 51,970 (1.3) (0.0) (0.0)
Biocon 23,335 39,598 50,572 23,277 39,598 50,572 0.2 (0.0) (0.0)
Cipla 49,327 61,145 69,889 50,019 61,145 69,889 (1.4) 0.0 0.0
Divis Laboratories 23,862 26,471 34,212 23,835 26,471 34,212 0.1 0.0 0.0
Dr Reddy's Laboratories 65,478 71,251 80,515 65,141 71,251 80,515 0.5 0.0 0.0
Gland Pharma 11,686 12,657 15,227 11,729 13,008 15,724 (0.4) (2.7) (3.2)
Laurus Labs 16,795 14,837 19,051 16,795 14,837 19,051 — — —
Lupin 17,550 29,523 36,132 17,813 30,143 36,981 (1.5) (2.1) (2.3)
Pharmaceuticals 390,320 478,591 554,653 397,320 479,563 556,001 (1.8) (0.2) (0.2)
Exhibit 9: Summary of changes in annual EBITDA margin estimates for KIE Pharmaceuticals coverage
March fiscal year-ends, 2023-25E (%)
EBITDA margin (%)
Aurobindo Pharma 15.2 17.8 18.4 15.5 17.8 18.4 -22 bps 0 bps 0 bps
Biocon 21.1 23.4 25.5 21.0 23.4 25.5 11 bps 0 bps 0 bps
Cipla 21.9 23.9 24.5 21.7 23.9 24.5 14 bps 0 bps 0 bps
Divis Laboratories 31.3 32.3 35.8 31.1 32.3 35.8 11 bps 0 bps 0 bps
Dr Reddy's Laboratories 26.6 26.9 27.3 26.6 26.9 27.3 6 bps 0 bps 0 bps
Gland Pharma 30.3 29.1 29.6 30.0 29.6 30.1 28 bps -43 bps -44 bps
Laurus Labs 27.1 24.0 26.6 27.1 24.0 26.6 0 bps 0 bps 0 bps
Lupin 10.6 15.4 17.0 10.6 15.7 17.4 -1 bps -26 bps -32 bps
Sun Pharmaceuticals 26.7 28.8 29.4 27.4 28.8 29.4 -73 bps 0 bps 0 bps
Torrent Pharmaceuticals 29.8 30.6 31.0 30.4 30.6 31.0 -57 bps 0 bps 0 bps
Pharmaceuticals 22.9 24.7 25.8 23.1 24.7 25.8 -21 bps -3 bps -4 bps
Exhibit 10: Summary of changes in annual adjusted PAT estimates for KIE Pharmaceuticals coverage
Adjusted PAT (Rs mn)
Aurobindo Pharma 19,875 27,126 30,260 20,116 27,126 30,260 (1.2) (0.0) (0.0)
Biocon 5,379 9,355 15,324 5,373 9,355 15,324 0.1 (0.0) (0.0)
Cipla 28,263 38,748 45,176 29,142 38,748 45,176 (3.0) 0.0 0.0
Divis Laboratories 18,842 19,345 24,739 18,771 19,345 24,739 0.4 (0.0) (0.0)
Dr Reddy's Laboratories 40,271 45,573 52,779 40,375 45,573 52,779 (0.3) 0.0 0.0
Gland Pharma 9,496 10,609 12,726 9,594 10,872 13,095 (1.0) (2.4) (2.8)
Laurus Labs 8,914 6,959 9,428 8,914 6,959 9,428 — — —
Lupin 4,273 13,883 18,545 4,394 14,337 19,167 (2.8) (3.2) (3.2)
Pharmaceuticals 231,253 286,414 342,621 237,144 287,131 343,613 (2.5) (0.2) (0.3)
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Exhibit 11: Valuation summary for KIE Pharmaceuticals coverage

Price (Rs) Fair Value Upside Mkt cap. EPS (Rs) P/E (X) EV/EBITDA (X) P/B (X)
Rating 05-04-2023 (Rs) (%) (Rs bn) (US$ bn) 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Pharmaceuticals
Aurobindo Pharma ADD 522 525 1 306 3.7 34 46 52 15.4 11.3 10.1 7.4 5.8 5.1 1.2 1.1 1.0
Biocon REDUCE 213 210 (1) 255 3.1 4 8 13 47.5 27.3 16.7 17.6 10.5 8.1 2.1 2.0 1.8
Cipla BUY 896 1,135 27 723 8.8 35 48 56 25.6 18.6 16.0 13.5 10.5 8.7 3.1 2.7 2.4
Divis Laboratories SELL 2,890 2,380 (18) 767 9.4 71 73 93 40.7 39.6 31.0 30.7 27.3 21.0 5.9 5.4 4.8
Dr Reddy's Laboratories ADD 4,683 4,725 1 780 9.5 243 275 318 19.3 17.1 14.7 11.4 10.1 8.5 3.3 2.9 2.4
Gland Pharma REDUCE 1,267 1,375 5 209 2.5 58 65 77 21.9 19.6 16.4 14.6 13.0 10.4 2.6 2.3 2.0
Laurus Labs REDUCE 306 295 (4) 165 2.0 17 13 18 18.4 23.6 17.4 10.8 12.4 9.7 3.9 3.3 2.8
Lupin REDUCE 659 720 5 300 3.7 9 31 41 69.4 21.4 16.0 16.3 9.7 7.7 2.4 2.2 1.9
Sun Pharmaceuticals ADD 997 1,140 14 2,392 29.2 35 41 47 28.8 24.4 21.2 19.3 15.4 13.1 4.4 3.8 3.3
Torrent Pharmaceuticals REDUCE 1,578 1,600 1 534 6.5 38 48 60 41.9 32.8 26.3 19.5 15.8 13.7 7.6 6.4 5.3
Pharmaceuticals Cautious 6,430 78.4 27.8 22.5 18.8 16.1 12.8 10.7 3.5 3.1 2.7
Health Care Services:
In a seasonally strong quarter, we expect a sequentially improved performance for the India-based
hospitals (except for Rainbow, wherein 4Q was a seasonally weak quarter), led by higher occupancies.
The sequential improvement in sales (+2.4% qoq) will be despite a slightly slower January than usual.
On the other hand, we expect sequentially flat or lower trends in ARPOB. Overall, for the India-based
hospitals (except KIMS), we forecast growth of 20-26% yoy in 4QFY23. For KIMS, financials are not
comparable on yoy basis due to integration of Sunshine and Nagpur in 1HFY23. For Aster DM, GCC is
expected to do well in a seasonally strong quarter. Overall, we expect an EBITDA growth of 23% yoy and
5% qoq for our hospital coverage. For the diagnostic companies, we expect non-Covid realizations per
patient to be largely flat qoq, and non-Covid volumes to improve qoq. For DLPL and METROHL, we bake
in a healthy 12-20% yoy growth for the non-Covid business, aided by a low non-Covid base due to the
Omicron wave. We note there is no incremental adjustment for the Suburban and Hitech acquisitions
from 4QFY23, as they are now fully in the base. We build in sequentially lower Covid sales for DLPL and
METROHL. Overall, we bake in 12% qoq and 4% qoq EBITDA growth rates for DLPL and METROHL,
respectively, in 4QFY23. The lower growth in METROHL is largely owing to loss of the NACO contract
(used to be 4-5% of sales) from February 2023.
Exhibit 12: Aggregate net revenues of KIE Health Care Services coverage to grow ~22% yoy in 4QFY23
Health Care Services revenues (Rs mn, LHS) yoy growth (%, RHS)
140000 81.0 90
119,751 80
120000 113,921 116,911
103,966 70
99,618 99,849 99,704 98,114
100000 60
80,818 84,232
76,306 50
80000 40
55,038 30
60000
30.5 30.9 20
40000 20.4 23.0 23.4 22.1 10
16.5 14.1 17.3
0
20000 4.4
(10)
0 (7.0) (20)
4QFY23E
2QFY21
3QFY21
1QFY22
2QFY22
1QFY23
1QFY21
4QFY21
3QFY22
4QFY22
2QFY23
3QFY23
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Exhibit 13: Aggregate EBITDA of KIE Health Care Services coverage to grow ~23% yoy in 4QFY23
Health Care Services EBITDA (Rs mn, LHS) EBITDA margin (%, RHS)
25000 25
21,565
20,126 20,548
19,287 18,983
20000 17.8 17.6 18,041 17,581 20
17,478
14.3 14,801 19.3 19.0
14,362 18.1 17.9 17.7 18.0
15000 16.8 17.6 15
10,924
10000 10
5000 5
1,565
0 2.8 0
4QFY23E
2QFY21
3QFY21
4QFY21
3QFY22
4QFY22
1QFY23
1QFY21
1QFY22
2QFY22
2QFY23
3QFY23
Exhibit 14: Aggregate adjusted PAT of KIE Health Care Services coverage to grow ~57% yoy in 4QFY23
Health Care Services PAT (Rs mn, LHS) PAT margin (%, RHS)
14,000 12,035 15
12,000 11,047
9,608 9,749 9,332 9,528
10,000 7.6 7.7 9,013 10
8,000 9.8 7,039 10.6
4.3 6,152 6,468 9.0 9.6 9.0 9.2
6,000 8.1 5
7.2
3,294
4,000
2,000 0
0
(2,000) (5)
(4,000) (9.0)
(6,000) (4,926) (10)

4QFY23E
1QFY22
2QFY22
3QFY22
4QFY22
1QFY21
2QFY21
3QFY21
4QFY21
1QFY23
2QFY23
3QFY23
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Exhibit 15: KIE Health Care Services coverage—4QFY23 preview

4QFY22 3QFY23 4QFY23E %yoy %qoq Comments
Apollo Hospitals
Net sales 35,464 42,636 44,389 25.2 4.1
EBITDA 4,633 5,054 5,506 18.8 8.9 We expect healthcare revenues to grow 4% qoq on account of seasonality (despite slightly softer footfalls in Jan-2023) in 4QFY23. We expect
EBIT 2,969 3,520 3,936 32.6 11.8 HealthCo sales to grow 33.5% yoy, driven by growth in offline pharmacy sales (+4% qoq) and increased traction in 24/7 (+6% qoq). For AHLL, we
PBT 2,327 2,874 3,366 44.7 17.1 forecast 7% yoy sales growth in 4QFY23 despite a high Covid base.
Tax 1,387 1,035 786 (43.3) (24.1)
Adjusted PAT 902 1,535 2,410 167.3 57.0 We build 6% qoq growth in healthcare EBITDA with healthcare EBITDA margin at 25.4% (up 60 bps qoq). Consolidated EBITDA will continue to be
EPS (Rs/share) 6.3 10.7 16.8 167.3 57.0 impacted by higher marketing spends and discounting in 24/7. We factor in Rs2.1 bn opex for 24/7 in 4QFY23, marginally higher than Rs2 bn in 3QFY23.
We expect overall EBITDA margin to be up 55 bps qoq at 12.4%.
Aster DM Healthcare
Net sales 27,278 31,921 32,200 18.0 0.9
EBITDA 4,625 4,487 4,715 1.9 5.1 We expect 14% yoy growth and flattish qoq performance in overall GCC sales, driven by a seasonally strong 2H in the hospital segment (+5% qoq),
EBIT 2,922 2,512 2,648 (9.4) 5.4 offset by lower sales in pharmacies (-9% qoq). On the other hand, led by a healthy performance in its key clusters of Kerala and Karnataka, we expect
PBT 2,519 1,725 2,128 (15.5) 23.4 India hospitals to continue to do well with 20% yoy (flat qoq) topline growth.
Tax 42 144 170 305.3 17.9
Adjusted PAT 2,263 1,394 1,798 (20.5) 29.0 We build in +2% yoy growth in consolidated EBITDA to Rs4.7 bn for Aster DM in 4QFY23. Owing to strength in the GCC business and continued
EPS (Rs/share) 4.5 2.8 3.6 (20.5) 29.0 resilience in India, we factor in 5% higher EBITDA sequentially with consolidated EBITDA margin of 14.6% (down 230 bps yoy and up 60 bps qoq) in
EBITDA margin (%) 17.0 14.1 14.6 -232 bps 58 bps 4QFY23.
Dr Lal Pathlabs
Net sales 4,855 4,894 5,110 5.3 4.4
EBITDA 1,211 1,130 1,266 4.6 12.0 On an overall basis, we expect DLPL’s 4QFY23 revenues to grow 5% yoy. For the non-Covid business, we build in a 20% yoy sales growth and
EBIT 834 751 871 4.5 16.0 sequentially flattish realisations. Compared to Rs658 mn and Rs113 mn in 4QFY22 and 3QFY23, we bake in Rs90 mn Covid revenues for DLPL in
PBT 835 765 876 4.9 14.5 4QFY23.
Tax 214 229 245 14.6 7.1
Adjusted PAT 613 528 623 1.6 18.0
We expect DLPL's EBITDA at Rs1.27 bn in 4QFY23 to increase 12% qoq with EBITDA margin of 24.8% (up 170 bps qoq, down 20 bps yoy). We note
EPS (Rs/share) 7.4 6.3 7.5 1.6 18.0
there is no incremental adjustment for the Suburban acquisition from 4QFY23 as it is now fully in the base.
KIMS
Net sales 3,723 5,622 5,881 57.9 4.6
EBITDA 1,136 1,512 1,655 45.7 9.5 We build 58% yoy overall topline growth for KIMS in 4QFY23. The yoy numbers aren't exactly comparable due to Sunshine being consolidated from
EBIT 949 1,179 1,300 36.9 10.3 1QFY23 (Rs1.17 bn sales expected in 4QFY23) and Nagpur being consolidated from 1st September, 2022 (Rs390 mn sales expected in 4QFY23). For
PBT 993 1,128 1,264 27.3 12.0 the Telangana mature cluster, we build in a 8% qoq sales growth in 4QFY23.
Tax 235 310 322 37.2 4.0
Adjusted PAT 807 760 877 8.7 15.4 We expect KIMS' consolidated EBITDA to grow 46% yoy and 9.5% qoq in 4QFY23. We bake in 26.5% (down 190 bps qoq) and 10.3% (up 560 bps qoq)
EPS (Rs/share) 10.1 9.5 11.0 8.7 15.4 post-Ind AS-116 EBITDA margins for Sunshine and Nagpur respectively. Overall, we expect KIMS' EBITDA margins to decline 240 bps yoy and grow 125
bps qoq respectively in 4QFY23 to 28.1%.
Max Healthcare
Net sales 12,203 14,638 15,080 23.6 3.0
Given 4Q is the seasonally strongest quarter, we expect Max's 4QFY23 occupancies to improve qoq. In 4QFY23, we expect Max's scheme mix to
EBITDA 2,996 4,050 4,211 40.5 4.0
decline from 29% in 3QFY23, thereby aiding ARPOB growth. We build in 24% yoy and 23% yoy growth for the overall business and the network hospitals
EBIT 2,341 3,416 3,541 51.3 3.7
business, respectively. On a sequential basis, we bake in a 3% growth in both overall sales and network hospital sales. We expect Max Lab and
PBT 2,125 3,478 3,441 61.9 (1.1) Max@Home to post 24% yoy and 37% yoy sales growth, respectively.
Tax 342 608 506 47.9 (16.7)
Adjusted PAT 1,772 2,837 2,917 64.6 2.8
Overall, we are building in a 40.5% yoy growth in EBITDA (+4% qoq) for Max in 4QFY23. We expect Max's 4QFY23 EBITDA margin to expand 340 bps yoy
EPS (Rs/share) 1.8 2.9 3.0 64.6 2.8
to 27.9%.
Metropolis Healthcare
Net sales 3,059 2,855 2,893 (5.4) 1.3
EBITDA 748 705 734 (2.0) 4.1 We expect Metropolis' 4QFY23 non-Covid revenues to grow 12% yoy in 4QFY23 on higher volumes, both on the B2C and on the B2B front. We expect
EBIT 569 475 499 (12.3) 5.0 the Mohalla clinic sales to fully compensate for loss of the NACO contract from Feb-2023 only over the next few quarters. Compared to Rs512 mn and
PBT 565 480 504 (10.8) 5.0 Rs77 mn in 4QFY22 and 3QFY23, we bake in Rs40 mn Covid revenues for Metropolis in 4QFY23.
Tax 163 121 127 (22.2) 4.8
Adjusted PAT 400 358 376 (6.1) 4.9 We expect Metropolis' EBITDA of Rs734 mn in 4QFY23 to decline 2% yoy. We build in an EBITDA margin expansion of 90 bps yoy to 25.4% for
EPS (Rs/share) 7.9 7.1 7.4 (6.1) 4.9 Metropolis in 4QFY23 as nil NACO sales (lower margins) will offset lower Covid contribution and increased investments. We note there is no
incremental adjustment for the Hitech acquisition from 4QFY23 as it is now fully in the base.
Narayana Hrudayalaya
Net sales 9,407 11,282 11,528 22.5 2.2
EBITDA 1,751 2,544 2,623 49.8 3.1
We build in 22.5% yoy and 2% qoq growth respectively in overall sales for NARH in 4QFY23. For India hospitals, we build in a 23% yoy growth and 2.5%
EBIT 1,283 1,971 2,038 58.8 3.4
qoq growth in 4QFY23. We expect 20% yoy sales growth in Cayman in 4QFY23.
PBT 1,218 1,899 2,018 65.6 6.3
Tax 503 360 404 (19.7) 12.0
Adjusted PAT 689 1,538 1,614 134.1 4.9 We expect NARH's consolidated EBITDA to grow 50% yoy (+3% qoq) at Rs2.6 bn in 4QFY23. We build 22.8% EBITDA margin in 4QFY23 (+20 bps qoq,
EPS (Rs/share) 3.4 7.5 7.9 134.1 4.9 +410 bps yoy). We expect the yoy improvement in profitability to be led by both the segments, with India pre-Ind AS-116 EBITDA margins to expand 560
bps yoy (+50 bps qoq) and Cayman pre-Ind AS-116 EBITDA margins to improve +20 bps yoy (-50 bps qoq) respectively.
Rainbow Children's Medicare
Net sales 2,124 3,064 2,670 25.7 (12.9)
EBITDA 481 1,068 856 77.8 (19.8)
Owing to a seasonally weak 4Q for pediatric hospitals, we bake in overall sales decline of 13% qoq for Rainbow. On a yoy basis, we expect mature
EBIT 259 836 646 149.9 (22.7)
hospitals and new hospitals to grow at 26% yoy and 25% yoy, respectively in 4QFY23.
PBT 158 783 591 275.0 (24.5)
Tax 35 201 152 333.7 (24.4)
Adjusted PAT 122 579 434 256.1 (25.0)
We expect Rainbow's gross margins to contract by 20 bps qoq to 86.7%. On the EBITDA front, we expect a sequential decline of 20% with margins of
EPS (Rs/share) 1.3 5.7 4.3 235.8 (25.0)
32.1% (-280 bps qoq). Overall, we bake in an EBITDA of Rs856 mn for Rainbow in 4QFY23.
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Exhibit 16: Summary of changes in annual net revenues estimates for KIE Health Care Services coverage
Revenues (Rs mn)
Apollo Hospitals 167,492 195,648 233,808 167,862 195,648 233,808 (0.2) — —
Aster DM Healthcare 118,906 128,601 140,135 118,943 128,601 140,135 (0.0) — —
Dr Lal Pathlabs 20,369 23,335 26,921 20,559 23,335 26,921 (0.9) — —
KIMS 22,098 26,051 31,248 22,108 26,051 31,248 (0.0) — —
Max Healthcare 58,339 65,193 77,103 57,922 65,193 77,103 0.7 — —
Metropolis Healthcare 11,549 13,029 14,852 11,534 13,029 14,852 0.1 — —
Narayana Hrudayalaya 44,560 48,459 52,865 44,635 48,459 52,865 (0.2) — —
Rainbow Children's Medicare 11,236 13,371 15,833 11,323 13,371 15,833 (0.8) — —
Health Care Services 454,549 513,687 592,765 454,887 513,687 592,765 (0.1) — —
Exhibit 17: Summary of changes in annual EBITDA estimates for KIE Health Care Services coverage
EBITDA (Rs mn)
Apollo Hospitals 21,120 26,998 32,725 21,947 26,998 32,725 (3.8) — —
Aster DM Healthcare 15,311 17,960 20,471 15,458 17,960 20,471 (0.9) — —
Dr Lal Pathlabs 5,009 5,775 6,892 5,143 5,775 6,892 (2.6) 0.0 0.0
KIMS 6,063 7,557 8,676 6,112 7,557 8,676 (0.8) — —
Max Healthcare 15,936 18,431 20,764 15,844 18,431 20,764 0.6 — —
Metropolis Healthcare 2,914 3,308 3,941 2,913 3,307 3,941 0.0 0.0 0.0
Narayana Hrudayalaya 9,524 9,661 11,072 9,221 9,662 11,073 3.3 (0.0) (0.0)
Rainbow Children's Medicare 3,840 4,460 5,222 3,841 4,460 5,222 (0.0) — —
Health Care Services 79,717 94,150 109,764 80,479 94,149 109,763 (0.9) 0.0 0.0
Exhibit 18: Summary of changes in annual EBITDA margin estimates for KIE Health Care Services coverage
March fiscal year-ends, 2023-25E (%)
EBITDA margin (%)
Apollo Hospitals 12.6 13.8 14.0 13.1 13.8 14.0 -46 bps 0 bps 0 bps
Aster DM Healthcare 12.9 14.0 14.6 13.0 14.0 14.6 -12 bps 0 bps 0 bps
Dr Lal Pathlabs 24.6 24.7 25.6 25.0 24.7 25.6 -43 bps 0 bps 0 bps
KIMS 27.4 29.0 27.8 27.6 29.0 27.8 -21 bps 0 bps 0 bps
Max Healthcare 27.3 28.3 26.9 27.4 28.3 26.9 -4 bps 0 bps 0 bps
Metropolis Healthcare 25.2 25.4 26.5 25.3 25.4 26.5 -3 bps 0 bps 0 bps
Narayana Hrudayalaya 21.4 19.9 20.9 20.7 19.9 20.9 71 bps 0 bps 0 bps
Rainbow Children's Medicare 34.2 33.4 33.0 33.9 33.4 33.0 25 bps 0 bps 0 bps
Health Care Services 17.5 18.3 18.5 17.7 18.3 18.5 -15 bps 0 bps 0 bps
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Exhibit 19: Summary of changes in annual adjusted PAT estimates for KIE Health Care Services coverage
Adjusted PAT (Rs mn)
Apollo Hospitals 9,155 14,004 18,911 9,599 14,004 18,911 (4.6) (0.0) (0.0)
Aster DM Healthcare 4,339 6,015 7,661 4,484 6,015 7,661 (3.2) (0.0) (0.0)
Dr Lal Pathlabs 2,445 3,062 3,946 2,532 3,062 3,946 (3.4) 0.0 0.0
KIMS 3,160 3,842 4,426 3,198 3,842 4,426 (1.2) — —
Max Healthcare 12,902 12,108 13,857 12,631 12,108 13,857 2.2 0.0 0.0
Metropolis Healthcare 1,471 1,826 2,362 1,477 1,826 2,361 (0.4) (0.0) 0.0
Narayana Hrudayalaya 5,945 5,300 6,182 5,584 5,300 6,182 6.5 (0.0) (0.0)
Rainbow Children's Medicare 2,007 2,317 2,633 2,028 2,317 2,634 (1.1) (0.0) (0.0)
Health Care Services 41,424 48,475 59,978 41,532 48,475 59,979 (0.3) (0.0) (0.0)
Exhibit 20: Valuation summary for KIE Health Care Services coverage
Price (Rs) Fair Value Upside Mkt cap. EPS (Rs) P/E (X) EV/EBITDA (X) P/B (X)
Rating 05-04-2023 (Rs) (%) (Rs bn) (US$ bn) 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E
Apollo Hospitals BUY 4,201 5,520 31 604 7.4 64 97 132 66.0 43.1 31.9 29.0 22.5 18.2 9.4 7.9 6.6
Aster DM Healthcare BUY 240 285 19 120 1.5 9 12 15 27.6 19.9 15.6 8.8 7.3 6.0 2.8 2.5 2.2
Dr Lal Pathlabs SELL 1,854 1,610 (13) 155 1.9 29 37 47 63.2 50.4 39.1 29.8 25.5 21.0 9.4 8.5 7.6
KIMS BUY 1,415 1,735 23 113 1.4 39 48 55 35.8 29.5 25.6 19.3 15.3 13.0 6.6 5.4 4.5
Max Healthcare ADD 419 490 17 407 5.0 14 13 15 30.3 32.3 28.3 25.1 21.6 19.0 5.1 4.4 3.8
Metropolis Healthcare REDUCE 1,252 1,340 7 64 0.8 29 36 46 43.5 35.0 27.1 21.9 18.9 15.4 6.5 5.8 5.1
Narayana Hrudayalaya ADD 760 815 7 155 1.9 29 26 30 26.1 29.3 25.1 16.8 16.7 14.4 7.5 5.9 4.8
Rainbow Children's Medicare ADD 743 840 13 75 0.9 21 24 28 35.4 30.7 27.0 18.9 15.9 13.4 9.2 7.4 6.0
Health Care Services Attractive 1,693 20.6 40.4 34.6 28.0 21.5 18.0 15.2 6.5 5.6 4.8
Pharmaceuticals
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Kotak Institutional Equities: Valuation summary of KIE Universe stocks
Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3M
Company Rating 5-Apr-23 (Rs) (%) (Rs bn) (US$ bn) (mn) 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E 2023E 2024E 2025E (US$ mn)
Apollo Tyres SELL 322 285 (11) 204 2.5 638 15 20 23 53 28 19 21 16 14 8 6 6 1.6 1.5 1.4 8 10 11 1.1 1.3 1.4 10
Ashok Leyland ADD 135 160 19 396 4.8 2,936 3 7 9 516 113 30 40 19 15 17 11 9 4.8 4.2 3.6 12 24 26 1.0 2.1 2.7 17
Bajaj Auto REDUCE 4,023 3,625 (10) 1,164 14 283 202 219 237 22 8 8 20 18 17 15 14 12 4.6 4.4 4.2 22 24 25 4.0 4.3 4.7 16
Balkrishna Industries SELL 1,960 1,650 (16) 379 4.6 193 59 75 83 (21) 27 11 33 26 24 19 15 14 5.0 4.5 4.0 16 18 18 1.3 1.4 1.5 8
Bharat Forge REDUCE 758 850 12 353 4.3 466 13 32 40 (45) 150 24 58 23 19 22 14 12 5.1 4.4 3.7 9 20 21 0.8 0.9 1.0 12
CEAT SELL 1,414 1,200 (15) 57 0.7 40 42 85 109 115 102 28 34 17 13 9 6 6 1.7 1.6 1.4 5 10 12 0.8 1.3 1.4 2
Eicher Motors SELL 2,934 2,825 (4) 802 9.8 272 105 123 142 71 17 16 28 24 21 20 18 15 6.3 5.3 4.6 24 24 24 0.9 0.9 0.9 22
Endurance Technologies SELL 1,260 1,150 (9) 177 2.2 141 33 49 60 (3) 46 24 38 26 21 17 13 10 4.1 3.7 3.2 11 14 15 0.6 0.8 1.0 1
Escorts Kubota SELL 1,843 1,650 (10) 204 3.0 111 55 74 88 (27) 34 19 33 25 21 26 21 17 2.4 2.2 2.1 7 9 10 0.4 0.6 0.7 7
Exide Industries REDUCE 181 175 (3) 154 1.9 850 11 12 13 25 8 10 16 15 14 9 8 7 1.4 1.3 1.2 9 9 9 1.4 1.4 1.4 5
Hero Motocorp REDUCE 2,432 2,400 (1) 486 5.9 200 137 161 177 11 18 10 18 15 14 10 8 7 2.9 2.8 2.6 17 19 20 3.9 4.6 5.1 11
Mahindra CIE Automotive ADD 366 380 4 139 1.7 378 18 20 24 69 13 17 20 18 15 12 10 9 2.7 2.4 2.1 13 14 15 1— 1— 2— 9
Mahindra & Mahindra BUY 1,155 1,475 28 1,437 17.5 1,159 61 67 75 40 9 13 19 17 15 13 12 10 3.0 2.6 2.3 17 16 16 0.8 0.9 1.0 38
Maruti Suzuki SELL 8,447 7,850 (7) 2,552 31.1 302 264 314 357 112 19 13 32 27 24 20 16 14 4.3 4.0 3.6 14 15 16 1.3 1.5 1.7 47
MRF SELL 83,967 63,000 (25) 356 4.3 4 1,621 3,091 3,940 3 91 27 52 27 21 16 11 9 2.4 2.2 2.0 5 9 10 0.1 0.2 0.2 9
Samvardhana Motherson ADD 68 95 41 458 5.6 6,776 2 4 5 175 77 33 31 17 13 9 7 5 2.1 1.9 1.7 7 12 14 0.9 1.0 1.1 21
Schaeffler India SELL 2,953 2,660 (10) 462 5.6 156 56 66 74 38 18 13 53 45 40 34 29 26 10.8 9.4 8.2 22 22 22 0.1 0.1 0.1 3
SKF SELL 4,331 3,550 (18) 214 2.6 49 111 126 140 38 14 11 39 34 31 26 24 21 9.2 7.5 6.3 23 22 20 0.4 0.4 0.5 1
Sona BLW Precision ADD 422 500 19 247 3.0 583 7 9 13 9 38 37 62 45 33 36 26 20 10.6 9.0 7.5 18 22 25 0.3 0.5 0.7 20
Tata Motors ADD 427 450 5 1,633 18.6 3,829 (5) 31 42 84 787 35 NM 14 10 8 4 3 3.7 2.9 2.3 NM 24 25 0.0 0.0 0.0 69
Timken SELL 2,880 2,400 (17) 217 2.6 75 51 68 82 18 34 20 56 42 35 40 29 24 10.9 9.0 7.4 21 23 23 0.1 0.1 0.1 3
TVS Motor SELL 1,090 830 (24) 518 6.3 475 31 36 42 67 16 16 35 30 26 19 17 15 8.9 7.4 6.2 28 27 26 0.8 0.8 1.0 18
Uno Minda BUY 471 545 16 270 3.3 571 12 14 17 87 19 20 40 34 28 22 19 16 6.6 5.6 4.7 16 17 17 0.3 0.4 0.4 4
Varroc Engineering ADD 254 350 38 39 0.5 153 (54) 17 24 26 131 42 NM 15 11 9 7 5 3.3 2.7 2.1 NM 18 20 — — — 1
Automobiles & Components Cautious 13,016 157.9 128.5 64.8 19.6 34.6 21.0 17.5 13.4 9.8 8.3 3.9 3.5 3.0 11.3 16.5 17.2 1.1 1.3 1.5 356
Banks
AU Small Finance Bank REDUCE 558 575 3 372 4.5 664 21 24 32 16 17 31 27 23 18 — — — 3.5 3.1 2.6 15 14 16 — — — 10
Axis Bank BUY 861 1,100 28 2,647 32.3 3,070 70 78 84 65 12 7 12 11 10 — — — 2.2 1.9 1.6 18 18 17 0.6 1.4 1.5 102
Bandhan Bank BUY 207 250 21 333 4.1 1,611 14 27 28 1,672 95 3 15 8 7 — — — 1.8 1.5 1.2 12 20 18 0.3 2.0 2.0 22
Bank of Baroda ADD 167 185 11 864 10.5 5,178 26 28 31 84 9 11 6 6 5 — — — 1.0 0.9 0.8 16 15 15 3.1 3.4 3.8 61
Canara Bank BUY 284 340 20 516 6.3 1,814 55 62 66 75 12 7 5 5 4 — — — 0.9 0.8 0.7 14 14 14 4.0 4.5 4.8 33
City Union Bank ADD 125 150 20 93 1.1 740 13 14 17 28 9 20 10 9 7 — — — 1.4 1.2 1.1 14 14 15 2.1 2.3 2.7 7
DCB Bank BUY 105 140 33 33 0.4 311 15 20 23 60 35 16 7 5 5 — — — 0.8 0.7 0.6 11 14 14 2.2 3.0 3.5 2
Equitas Small Finance Bank ADD 67 68 2 74 0.9 1,110 5 7 9 110 40 43 14 10 7 — — — 1.6 1.4 1.2 11 13 17 — — — 5
Federal Bank BUY 129 160 24 272 3.3 2,103 14 14 18 52 5 22 9 9 7 — — — 1.3 1.2 1.1 14 13 15 2.1 2.2 2.7 19
HDFC Bank BUY 1,654 1,800 9 9,227 112.5 5,546 79 82 105 19 4 28 21 20 16 — — — 3.4 2.8 2.5 17 17 16 1.1 1.2 1.5 186
ICICI Bank BUY 885 1,070 21 6,177 75.3 6,950 46 47 53 38 2 13 19 19 17 — — — 3.2 2.8 2.5 18 16 16 1.0 1.1 1.2 164
IndusInd Bank BUY 1,067 1,350 26 828 10.1 775 92 107 125 54 17 17 12 10 9 — — — 1.6 1.4 1.2 14 15 15 1.2 1.4 1.7 53
Karur Vysya Bank BUY 97 125 29 77 0.9 800 14 17 20 61 27 15 7 6 5 — — — 1.0 0.9 0.8 14 15 16 3.6 4.6 5.3 4
Punjab National Bank BUY 47 58 24 514 6.3 11,011 3 7 9 8 106 33 14 7 5 — — — 0.7 0.6 0.5 4 8 9 1.5 3.0 4.0 43
SBI Cards and Payment Services BUY 740 960 30 700 8.5 943 23 27 40 37 15 49 32 27 18 — — — 7.1 5.7 4.4 25 23 27 0.2 0.2 0.3 9
State Bank of India BUY 523 725 39 4,668 56.9 8,925 55 59 61 55 7 4 10 9 9 — — — 1.6 1.4 1.2 16 15 14 1.7 2.1 2.4 109
Ujjivan Small Finance Bank BUY 27 33 24 52 0.6 1,926 5 5 6 307 (1) 14 5 5 5 — — — 1.2 1.0 0.8 30 22 20 0.0 0.0 0.0 3
Union Bank BUY 67 85 26 460 5.6 6,835 11 14 15 39 29 10 6 5 4 — — — 0.7 0.6 0.6 10 12 12 3.9 5.1 5.6 13
YES Bank REDUCE 15 16 5 439 5.3 28,751 0 1 1 (31) 90 84 52 27 15 — — — 1.1 1.1 1.0 2 4 7 0.0 0.0 0.0 41
Banks Attractive 28,346 345.7 45.4 18.7 15.7 14.1 11.8 10.2 2.0 1.6 1.4 14.0 13.5 13.9 1.3 1.6 1.9 887
Source: Company, Bloomberg, Kotak Institutional Equities estimates
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Capital goods
ABB BUY 3,374 3,425 2 715 8.7 212 33 49 60 69 49 23 103 69 56 71 51 41 14.5 12.2 10.2 15 19 20 0.1 0.1 0.2 13
Bharat Electronics REDUCE 98 98 (0) 718 8.8 7,310 4 4 5 17 10 7 26 23 22 17 15 14 5.1 4.7 4.3 21 21 20 1.8 2.0 2.1 19
BHEL SELL 68 37 (46) 237 2.9 3,482 (0) 1 3 (137) 238 386 NM 113 23 (67) 44 13 0.9 0.9 0.9 NM 1 4 (0.2) 0.3 1.2 15
Carborundum Universal BUY 992 1,070 8 188 2.3 190 20 28 35 16 38 25 49 35 28 30 22 17 7.0 6.1 5.2 15 18 20 0.4 0.6 0.7 2
Cochin Shipyard BUY 492 900 83 65 0.8 132 42 43 48 (6) 3 12 12 11 10 6 5 5 1.4 1.3 1.2 12 12 12 2.8 3.0 3.2 4
Cummins India BUY 1,569 1,810 15 435 5.3 277 43 52 63 43 22 22 37 30 25 34 28 22 8.2 7.4 5.8 23 26 26 1.5 1.8 0.0 13
G R Infraprojects SELL 1,028 1,070 4 99 1.2 97 87 91 107 11 5 18 12 11 10 8 8 7 1.9 1.6 1.4 18 16 16 0.0 0.0 0.0 1
IRB Infrastructure BUY 26 35 37 154 1.9 6,039 1 2 2 128 27 28 19 15 11 9 8 8 1.3 1.6 2.2 7 10 16 10.3 16.0 20.9 10
Kalpataru Power Transmission BUY 519 640 23 84 1.0 164 27 43 56 39 57 29 19 12 9 7 6 5 1.8 1.6 1.4 10 14 16 0.5 0.7 0.9 3
KEC International BUY 455 530 16 117 1.4 257 8 28 39 (45) 254 36 57 16 12 18 9 8 3.1 2.6 2.2 6 18 20 0.2 0.7 0.9 2
L&T ADD 2,257 2,260 0 3,172 38.7 1,405 76 101 122 25 33 20 30 22 18 20 17 14 4.3 3.9 3.6 15 18 20 1.4 1.9 2.2 60
Siemens SELL 3,351 2,900 (13) 1,193 14.6 356 51 58 70 43 15 20 66 57 48 47 40 33 9.2 8.2 7.3 15 15 16 0.4 0.5 0.5 15
Thermax BUY 2,325 2,470 6 277 3.4 113 42 60 73 53 43 20 55 39 32 42 29 24 42.1 29.3 24.1 13 18 20 1.1 1.5 1.9 2
Capital goods Attractive 7,455 90.9 22.8 30.9 22.6 35.8 27.4 22.3 22.3 17.9 15.2 4.3 4.0 3.7 11.9 14.6 16.4 1.2 1.6 1.9 158
SIS BUY 352 480 36 51 0.6 147 22 24 29 (1) 11 21 16 15 12 12 9 8 2.2 1.9 1.6 14 14 15 0.0 0.0 0.0 0
TeamLease Services REDUCE 2,156 2,275 6 37 0.4 17 68 77 101 197 12 32 32 28 21 28 23 18 4.5 3.9 3.3 15.6 15.0 16.8 — — — 1
Neutral 88 1.1 19.7 11.3 24.1 20.2 18.1 14.6 14.7 12.0 9.7 2.8 2.4 2.1 13.7 13.2 14.1 0.0 0.0 0.0 1
Commodity Chemicals
Asian Paints REDUCE 2,809 2,800 (0) 2,694 32.9 959 42 52 55 28 24 6 67 54 51 44 36 33 17.5 15.6 17.6 28 30 32 0.9 1.2 1.3 39
Berger Paints REDUCE 592 510 (14) 575 7.0 971 10 13 14 13 34 3 61 45 44 38 29 28 12.8 11.0 9.6 22 26 23 0.7 0.9 0.9 5
Indigo Paints REDUCE 1,060 1,190 12 50 0.6 48 23 31 34 31 36 8 46 34 31 27 21 19 6.7 5.8 5.1 16 18 17 0.5 0.7 0.8 1
Kansai Nerolac REDUCE 390 410 5 210 2.6 539 10 12 13 40 29 7 41 31 29 25 20 19 4.7 4.4 4.2 12 15 15 1.2 1.7 2.0 1
Tata Chemicals BUY 976 1,210 24 249 3.0 255 85 88 89 71 4 1 11 11 11 6 5 5 1.2 1.1 1.1 11 11 10 1.7 1.9 2.0 10
Commodity Chemicals Cautious 3,778 46.1 36.2 19.9 4.6 48.7 40.6 38.8 30.0 25.3 24.0 8.4 7.6 7.4 17.2 18.7 19.1 0.9 1.2 1.3 55
ACC REDUCE 1,688 1,950 16 317 3.9 188 58 96 134 (40) 65 39 29 18 13 13 10 7 2.1 2.0 1.9 8 12 15 1.7 2.9 4.0 25
Ambuja Cements SELL 380 340 (11) 754 9.2 2,105 13 14 21 (10) 8 47 29 27 18 11 7 6 2.5 1.9 1.7 9 8 10 0.6 0.8 1.1 88
Dalmia Bharat ADD 1,980 2,075 5 371 4.5 185 43 74 96 (30) 70 30 46 27 21 14 11 9 2.2 2.1 1.9 5 8 10 0.3 0.6 0.7 6
Grasim Industries ADD 1,659 1,700 2 1,093 13.3 658 114 135 149 5 18 10 15 12 11 8 7 6 1.3 1.2 1.1 9 10 10 0.4 0.7 0.8 12
J K Cement SELL 2,951 2,300 (22) 228 2.8 77 69 110 131 (22) 60 19 43 27 23 18 13 11 4.8 4.1 3.5 12 16 17 0.3 0.3 0.3 4
Nuvoco Vistas Corp ADD 344 410 19 123 1.5 357 (0) 13 20 (117) 8,503 54 NM 26 17 13 8 - 1.4 1.3 1.2 NM 5 7 0.0 0.0 0.0 0
Orient Cement REDUCE 121 125 3 25 0.3 205 6 12 12 (53) 105 (5) 20 10 10 7 6 7 1.5 1.4 1.2 8 15 12 1.7 1.7 1.7 2
Shree Cement SELL 26,387 16,750 (37) 952 11.6 36 408 711 795 (38) 74 12 65 37 33 30 20 18 5.1 4.6 4.1 8 13 13 0.2 0.4 0.5 17
The Ramco Cements SELL 761 560 (26) 180 2.2 236 13 30 40 (66) 136 33 59 25 19 21 13 10 2.6 2.4 2.1 4 10 12 0.2 0.4 0.5 3
UltraTech Cement REDUCE 7,692 6,350 (17) 2,221 27.1 289 194 301 354 (1) 55 17 40 26 22 21 15 13 4.0 3.6 3.2 11 15 15 0.4 0.6 0.7 35
Construction Materials Cautious 6,263 76.4 (12.0) 44.1 21.0 31.0 21.5 17.8 14.2 10.5 8.7 2.6 2.2 2.0 8.3 10.3 11.3 0.5 0.7 0.9 192
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Consumer Durables & Apparel
Aditya Birla Fashion and Retail BUY 207 345 67 196 2.4 965 1 4 6 182 311 48 217 53 36 12 9 8 5.5 3.8 3.5 3 9 10 — — — 7
Crompton Greaves Consumer ADD 300 340 13 191 2.3 636 7 9 11 (27) 30 21 44 34 28 28 23 20 7.0 6.1 5.2 17 19 20 0.8 0.8 0.8 7
Havells India SELL 1,201 1,075 (10) 752 9.2 627 17 23 29 (12) 38 27 72 52 41 48 35 28 11.5 10.3 9.1 17 21 24 0.6 0.8 1.0 11
Page Industries SELL 37,374 35,000 (6) 417 5.1 11 559 683 831 16 22 22 67 55 45 45 37 30 33.1 28.7 25.1 53 56 60 1.1 1.4 1.8 11
Polycab REDUCE 2,938 2,810 (4) 440 5.4 149 82 92 106 44 12 16 36 32 28 24 22 18 6.9 6.0 5.2 20 20 20 0.7 0.8 0.9 11
TCNS Clothing Co. SELL 441 460 4 27 0.3 69 2 10 15 313 452 53 242 44 29 18 13 9.7 4.4 3.9 3.3 2 9 12 — — — 1
Vedant Fashions REDUCE 1,134 1,150 1 275 3.4 248 16 19 23 30 16 20 69 60 50 42 36 30 20.6 16.4 13.0 33 31 29 — — — 2
Voltas SELL 818 800 (2) 271 3.3 331 12 19 24 (22) 59 26 69 43 34 46 31 26 4.8 4.5 4.2 7 11 13 0.6 0.7 0.9 15
Whirlpool SELL 1,325 1,240 (6) 168 2.1 127 19 26 37 2 32 44 68 52 36 37 28 20 4.7 4.4 4.0 7 8 11 0.2 0.3 0.4 2
Consumer Durables & Apparel Cautious 2,738 33.4 9.0 34.8 25.0 61.1 45.3 36.2 32.1 25.4 20.9 8.6 7.4 6.5 14.1 16.3 18.03 0.6 0.7 0.9 67
Consumer Staples
Britannia Industries ADD 4,328 4,775 10 1,042 12.7 241 79 92 106 24 17 15 55 47 41 38 33 29 37.4 30.3 25.6 70 71 67 1.5 1.8 2.1 16
Colgate-Palmolive (India) ADD 1,541 1,630 6 419 5.1 272 37 42 46 (8) 15 10 42 37 33 28 25 22 24.0 22.8 21.7 57 64 67 2.3 2.6 2.9 5
Dabur India ADD 548 600 9 971 11.8 1,768 11 12 14 2 16 13 52 45 40 42 37 32 10.6 9.6 8.7 21 22 23 1.1 1.3 1.4 11
Godrej Consumer Products BUY 970 1,075 11 992 12.1 1,023 17 21 24 (2) 25 12 56 45 40 40 32 28 8.2 7.7 7.3 15 18 19 1.2 1.5 1.8 12
Hindustan Unilever ADD 2,583 2,825 9 6,068 74.0 2,350 43 50 56 15 18 13 60 51 46 42 36 32 12.0 11.5 11.0 20 23 25 1.5 1.7 1.9 48
ITC ADD 386 430 11 4,802 58.6 12,412 15 17 18 22 11 10 26 23 21 19 17 15 7.5 7.5 7.1 28 31 34 3.3 3.7 4.1 62
Jyothy Labs ADD 196 220 12 72 0.9 367 7 9 10 59 26 9 28 22 20 22 16 14 4.5 4.0 3.6 17 19 19 1.5 1.8 2.3 1
Marico REDUCE 482 515 7 624 7.6 1,290 10 12 13 5 15 13 48 42 37 34 29 26 18.4 18.2 18.0 38 44 49 2.0 2.3 2.6 7
Nestle India ADD 19,822 20,700 4 1,911 23.3 96 248 311 350 0 25 12 80 64 57 52 42 37 77.7 68.8 68.9 105 115 121 1.1 1.4 1.8 13
Tata Consumer Products ADD 727 770 6 676 8.2 922 11 15 17 5 30 19 65 50 42 36 31 26 4.3 4.1 3.9 7 8 10 0.9 1.0 1.2 10
United Breweries ADD 1,422 1,625 14 376 4.6 264 16 28 36 19 69 30 86 51 39 49 32 25 9.2 8.4 7.7 11 17 20 0.9 1.5 1.9 4
United Spirits ADD 756 900 19 550 6.7 727 13 15 19 (5) 17 23 59 50 41 37 33 27 8.2 7.5 6.9 16 16 18 0.7 0.9 1.3 10
Varun Beverages BUY 1,454 1,500 3 944 11.5 650 23 30 36 116 30 21 63 48 40 35 27 23 18.5 13.9 10.7 33 33 30 0.2 0.3 0.3 24
Consumer Staples Attractive 19,448 237.2 16.4 16.6 12.6 45.4 38.9 34.6 32.0 27.5 24.3 10.8 10.3 9.7 24 27 28 1.8 2.1 2.3 224
Diversified Financials
360 One BUY 428 530 24 153 1.9 359 19 20 24 13 9 17 23 21 18 — — — 4.7 4.3 4.1 21 22 23 3.3 3.5 4.1 1
Aavas Financiers BUY 1,670 1,950 17 132 1.6 79 54 62 74 20 14 20 31 27 23 — — — 4.1 3.5 3.1 14 14 15 0.0 0.0 0.0 3
ABSL AMC ADD 337 370 — 97 1.2 288 21 20 22 (9) (4) 9 16 17 15 — — — 4.0 3.6 3.3 NM NM NM 3.8 3.6 4.0 0
Aptus Value Housing Finance ADD 239 330 — 119 1.5 497 10 11 13 34 12 16 24 21 18 — — — 3.5 3.0 2.6 16 15 15 0.0 0.0 0.0 2
Bajaj Finance REDUCE 5,761 6,150 7 3,488 42.5 603 192 230 283 65 20 23 30 25 20 — — — 6.4 5.2 4.2 24 23 23 0.3 0.4 0.5 88
Bajaj Finserv ADD 1,279 1,525 19 2,038 24.8 1,592 48 60 75 69 25 24 27 21 17 — — — 4.9 4.1 3.5 19 21 22 0.1 0.1 0.1 38
Cholamandalam ADD 780 875 12 641 7.8 821 31 35 44 18 12 27 25 23 18 — — — 4.9 4.2 3.4 20 18 20 0.3 0.3 0.4 14
Computer Age Management Services SELL 2,160 2,050 (5) 106 1.3 49 57 68 81 (2) 18 20 38 32 27 — — — 14.0 12.0 10.3 40 41 42 1.7 2.0 2.4 2
Five Star Business Finance ADD 542 700 29 158 1.9 291 20 24 30 30 19 26 27 23 18 — — — 3.7 3.2 2.7 15 15 16 — — — —
HDFC BUY 2,706 3,050 13 4,964 60.5 1,813 86 94 107 13 10 13 32 29 25 — — — 3.7 3.4 3.0 12 12 13 1.0 1.1 1.2 97
HDFC AMC ADD 1,746 1,800 3 373 4.5 214 65 69 77 0 6 12 27 25 23 — — — 6.1 5.5 5.1 24 23 23 2.4 2.6 2.9 11
Home First Finance BUY 711 1,000 41 63 0.8 88 26 29 34 22 12 18 27 24 21 — — — 3.5 3.0 2.6 14 13 14 — — — 3
L&T Finance Holdings REDUCE 84 90 7 208 2.5 2,474 8 7 9 85 (9) 19 10 12 10 — — — 1.0 0.9 0.8 8 8 9 0.0 1.7 2.0 8
LIC Housing Finance BUY 328 525 60 181 2.2 550 48 68 74 17 40 9 7 5 4 — — — 0.8 0.8 0.7 10 13 13 3.0 4.2 4.6 8
Mahindra & Mahindra Financial ADD 240 265 11 296 3.6 1,233 16 17 24 100 8 40 15 14 10 — — — 1.9 1.7 1.6 12 12 16 3.0 1.4 2.0 11
Muthoot Finance BUY 990 1,225 24 397 4.8 401 89 111 131 (9) 24 18 11 9 8 — — — 1.9 1.6 1.4 18 19 20 1.8 2.2 2.6 6
Nippon AMC ADD 219 240 9 137 1.7 622 11 12 13 (5) 3 8 19 19 17 — — — 3.8 3.8 3.7 20 20 21 4.7 4.8 5.2 1
Shriram Finance BUY 1,289 1,700 32 483 5.9 373 170 192 224 70 13 16 8 7 6 — — — 1.1 1.0 0.9 18 15 16 2.0 2.3 2.6 15
UTI AMC BUY 661 800 21 84 1.0 127 35 38 43 (16) 6 15 19 18 15 — — — 2.2 2.2 2.1 12 12 14 3.2 4.6 5.2 2
Diversified Financials Attractive 14,116 172.1 35.7 15.9 19.1 23.6 20.4 17.1 3.5 3.1 2.7 14.8 15.0 15.6 0.8 0.9 1.1 310
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Electric Utilities
CESC BUY 69 100 44 92 1.1 1,326 10 12 14 (7) 29 10 7 6 5 6 5 4 0.7 0.7 0.6 10 12 12 5.8 7.2 7.7 2
JSW Energy SELL 253 142 (44) 416 5.1 1,640 7 8 11 12 12 38 35 31 23 15 13 9 2.3 2.1 2.0 7 7 9 0.8 0.8 0.8 4
NHPC ADD 40 47 17 404 4.9 10,045 4 4 5 6 11 17 11 10 8 10 9 6 1.1 1.1 1.0 11 11 12 5.6 6.0 7.0 6
NTPC ADD 176 186 6 1,706 20.8 9,895 18 20 23 9 9 13 9.6 8.8 8 8 7 6 1.2 1.1 1.0 13 13 13 3.9 4.3 4.6 26
Power Grid BUY 226 260 15 1,574 19.2 6,975 22 24 24 12 11 2 10.4 9.4 9 7 6 6 1.9 1.8 1.6 19 20 18 6.0 6.3 6.5 29
Tata Power SELL 195 192 (1) 622 7.6 3,196 11 8 10 44 (26) 22 18 25 20 12 12 11 2.4 2.2 2.0 14 9 10 — — — 24
Electric Utilities Attractive 4,814 58.7 11.6 7.8 10.3 11.2 10.4 9.4 7.9 7.4 6.4 1.5 1.4 1.3 13.2 13.2 13.4 4.0 4.3 4.6 92
Fertilizers & Agricultural Chemicals
Bayer Cropscience REDUCE 4,129 4,050 (2) 186 2.3 45 141 159 176 5 13 11 29 26 23 20 18 17 7.0 6.7 6.4 24 26 28 3.1 3.3 3.6 1
Godrej Agrovet REDUCE 424 440 4 81 1.0 192 13 18 24 (40) 40 32 32 23 17 18 14 11 2.8 2.6 2.4 9 12 14 1.8 1.8 2.4 0
Rallis India REDUCE 200 220 10 39 0.5 195 8 11 12 (1) 31 12 24 18 16 13 11 9 2.2 2.0 1.9 9 11 12 1.8 2.0 2.3 1
UPL ADD 732 830 13 550 6.7 751 60 64 77 21 5 20 12 11 10 7 6 5 2.1 1.9 1.6 17 16 16 1.4 1.7 2.0 17
Fertilizers & Agricultural ChemicalsCautious 856 10.4 9.6 10.4 17.5 16.7 15.1 12.8 8.1 7.1 6.1 2.6 2.3 2.0 15.5 15.2 15.9 1.8 2.1 2.4 19
Gas Utilities
GAIL (India) REDUCE 105 95 (10) 693 8.5 6,575 9 10 9 (43) 9 (4) 12 11 11 10 9 9 1.2 1.1 1.1 10 11 10 4.4 4.7 5.1 21
GSPL BUY 266 375 41 150 1.8 564 14 12 13 (20) (11) 3 19 21 21 8 8 8 1.7 1.6 1.5 9 8 7 1.2 1.3 1.5 3
Indraprastha Gas BUY 444 495 12 311 3.8 700 25 28 31 14 12 10 18 16 14 13 11 10 3.9 3.4 3.0 24 23 22 1.5 2.0 2.5 8
Mahanagar Gas BUY 958 1,100 15 95 1.2 99 77 80 82 27 4 2 12 12 12 8 7 7 2.3 2.1 1.8 20 18 17 2.8 2.9 3.1 6
Petronet LNG REDUCE 236 215 (9) 354 4.3 1,500 17 20 23 (17) 17 15 14 12 10 8 7 6 2.3 2.2 2.0 18 19 20 4.1 4.7 5.9 7
Gas Utilities Attractive 1,601 19.5 (29.6) 9.5 3.3 13.8 12.6 12.2 9.4 8.5 8.0 1.7 1.6 1.5 12.3 12.6 12.3 3.4 3.8 4.3 44
Apollo Hospitals BUY 4,201 5,520 31 604 7.4 144 64 97 132 8 53 35 66 43 32 29 22 18 9.4 7.9 6.6 15 20 22 0.2 0.3 0.5 23
Aster DM Healthcare BUY 240 285 19 120 1.5 500 9 12 15 (8) 39 27 28 20 16 9 7 6 2.8 2.5 2.2 10 13 15 — — — 1
Dr Lal Pathlabs SELL 1,854 1,610 (13) 155 1.9 83 29 37 47 (34) 25 29 63 50 39 30 26 21 9.4 8.5 7.6 16 18 21 0.7 0.9 1.2 5
KIMS BUY 1,415 1,735 23 113 1.4 80 39 48 55 (5) 22 15 36 29 26 19 15 13 6.6 5.4 4.5 20 20 19 0.0 0.0 0.0 1
Max Healthcare ADD 419 490 17 407 5.0 970 14 13 15 53 (6) 14 30 32 28 25 22 19 5.1 4.4 3.8 18 15 14 0.0 0.0 0.0 9
Metropolis Healthcare REDUCE 1,252 1,340 7 64 0.8 51 29 36 46 (26) 24 29 44 35 27 22 19 15 6.5 5.8 5.1 16 18 20 0.7 0.9 1.1 3
Narayana Hrudayalaya ADD 760 815 7 155 1.9 204 29 26 30 74 (11) 17 26 29 25 17 17 14 7.5 5.9 4.8 33 23 21 — — — 1
Rainbow Children's Medicare ADD 743 840 13 75 0.9 96 21 24 28 45 15 14 35 31 27 19 16 13 9.2 7.4 6.0 29 27 24 0.4 0.5 0.6 1
Health Care Services Attractive 1,693 20.6 17.1 16.7 23.6 40.4 34.6 28.0 21.5 18.0 15.2 6.5 5.6 4.8 16.2 16.2 17.0 0.2 0.3 0.3 44
Hotels & Restaurants
Devyani International ADD 147 160 9 177 2.2 1,204 2 2 2 44 (14) 25 70 81 65 27 22 18 18.8 15.2 13.6 31 21 22 0.0 0.0 0.0 4
Jubilant Foodworks ADD 435 500 15 287 3.5 660 6 8 10 (3) 23 24 68 55 44 23 20 17 12.5 10.4 8.6 20 21 21 0.2 0.2 0.2 12
Lemon Tree Hotels REDUCE 78 82 5 62 0.8 791 1 2 4 226 51 92 56 37 19 18 14 8 7.2 6.7 5.6 13 19 31 1.1 1.4 1.9 4
Restaurant Brands Asia ADD 95 105 11 47 0.6 493 (1) (0) 1 36 68 239 NM NM 174 25 15 11 2.5 2.5 2.5 NM NM 1 0.0 0.0 0.0 1
Sapphire Foods BUY 1,199 1,550 29 76 0.9 64 18 19 24 148 4 30 66 63 49 17 14 12 6.8 6.1 5.5 11 10 12 0.0 0.0 0.0 2
Westlife Foodworld ADD 720 790 10 112 1.4 156 8 11 14 7,755 37 28 88 64 50 29 24 20 19.0 14.7 11.3 24 26 25 0.0 0.0 0.0 2
Hotels & Restaurants Attractive 761 9.3 104.0 21.9 39.0 78.4 64.3 46.2 23.3 18.8 14.7 9.9 8.7 7.6 12.6 13.6 16.4 0.2 0.2 0.2 24
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Insurance
HDFC Life Insurance BUY 508 660 30 1,091 13.3 2,020 6 8 9 15 28 11 78 61 55 — — — 6.8 6.5 6.2 9 11 11 0.3 0.4 0.5 32
ICICI Lombard ADD 1,093 1,200 10 537 6.5 491 36 41 47 40 14 13 30 26 23 — — — 5.1 4.5 3.9 18 18 18 0.8 0.9 1.1 9
ICICI Prudential Life BUY 438 575 31 630 7.7 1,437 6 7 8 20 14 15 69 61 53 — — — 6.4 5.9 5.4 10 10 11 0.7 0.7 0.7 11
LIC BUY 550 975 77 3,478 42.4 6,325 47 35 42 268 (26) 19 12 16 13 — — — 10.3 6.9 5.0 133 53 44 — — — 13
Max Financial Services BUY 619 925 49 214 2.6 345 11 12 13 281 8 8 55 51 47 — — — — — — 6 6 6 — — — 12
PB Fintech BUY 601 700 16 271 3.3 450 (13) (8) (2) 32 33 76 NM NM NM — — — NM NM NM — — — 16
SBI Life Insurance BUY 1,105 1,450 31 1,106 13.5 1,003 17 19 20 14 12 6 65 58 54 — — — 8.6 7.7 6.9 14 14 13 0.2 0.3 0.3 21
Star Health and Allied Insurance BUY 554 715 29 322 3.9 576 10 17 21 156 71 24 55 32 26 — — — 6.2 5.2 4.3 12 18 18 — — — 4
Insurance Attractive 7,649 93.3 409.1 (17.2) 18.4 21.2 25.6 21.6 7.6 6.3 5.1 36 24 24 0.1 0.2 0.2 117
Internet Software & Services
Cartrade Tech REDUCE 403 500 24 19 0.2 51.5 6 9 12 122 56 30 70 45 35 30 18 11 1.0 1.0 1.0 1.5 2.3 2.9 0.0 0.0 0.0 1
FSN E-commerce Ventures BUY 137 215 57 390 4.8 2,875.0 0 1 1 15 253 97 828 234 119 142 86 53 28.3 25.3 20.8 3.5 11.4 19.2 — — — 24
Info Edge ADD 3,742 4,400 18 483 5.9 128.7 52 57 69 213 10 22 72 66 54 59 54 43 3.4 3.3 3.1 4.7 5.0 5.9 0.2 0.4 0.5 15
Just Dial BUY 594 800 35 50 0.6 83.6 16 31 37 93 89 20 36 19 16 13 7 3 1.4 1.3 1.2 3.8 6.9 7.7 — — — 2
Zomato BUY 52 82 59 442 5.4 8,966 (1) (1) (1) 6 13 55 NM NM NM (22) (24) (46) 2.3 2.4 2.4 NM NM NM 0.0 0.0 0.0 46
Internet Software & Services Neutral 1,384 16.9 80 128 972 NM 1,355 126 (473) 603 84 3.3 3.3 3.2 NM 0.2 2.5 0.1 0.1 0.2 87
IT Services
HCL Technologies BUY 1,111 1,235 11 3,015 36.8 2,714 54 60 67 9 10 13 21 19 17 12 11 10 4.4 4.2 4.0 23 23 25 4.0 4.5 4.9 43
Infosys BUY 1,424 1,700 19 5,906 72.0 4,184 58 66 76 11 14 15 24 21 19 16 14 12 8.1 7.2 6.5 33 35 37 2.5 3.2 4.0 118
L&T Technology Services SELL 3,653 3,000 (18) 386 4.7 106 111 122 142 23 9 17 33 30 26 21 20 17 7.7 6.6 5.6 26 24 23 0.8 0.8 1.0 12
LTIMindtree REDUCE 4,833 4,350 (10) 1,430 17.4 296 151 175 204 13 16 17 32 28 24 22 19 16 8.2 6.8 5.7 28 27 26 0.9 1.1 1.3 25
Mphasis ADD 1,816 1,950 7 342 4.2 189 90 94 112 18 4 19 20 19 16 13 12 10 4.5 4.1 3.7 23 22 24 3.0 3.3 3.6 13
RateGain BUY 348 450 29 38 0.5 109 4 7 10 384 68 36 78 46 34 42 23 18 5.6 4.9 4.3 7 11 13 0.0 0.0 0.0 2
TCS ADD 3,240 3,320 2 11,855 144.6 3,660 116 131 148 12 13 13 28 25 22 19 17 15 12.7 11.5 10.4 46 49 50 3.4 3.2 3.7 76
Tech Mahindra ADD 1,104 1,200 9 967 11.8 889 57 65 79 (9) 13 22 19 17 14 11 10 8 3.5 3.4 3.1 19 20 23 3.6 3.8 4.0 38
Wipro REDUCE 370 370 0 2,029 24.7 5,487 21 24 26 (7) 13 10 18 16 14 10 9 8 2.7 2.5 2.2 16 16 16 1.4 2.4 2.4 20
IT Services Attractive 25,967 316.7 7.5 12.4 14.0 24.6 21.9 19.2 16.1 14.3 12.6 7.1 6.4 5.8 28.6 29.3 30.3 2.9 3.1 3.5 347
Media
PVR ADD 1,514 1,800 19 204 2.5 61 4 29 41 105 676 41 405 52 37 53 33 28 3.8 3.6 3.3 1 7 9 0.0 0.2 0.3 13
Sun TV Network ADD 421 555 32 166 2.0 394 44 51 54 5 16 5 10 8 8 6 5 4 1.8 1.6 1.5 20 21 20 4.7 5.9 7.1 3
Zee Entertainment Enterprises ADD 214 255 19 206 2.5 960 7 12 14 (40) 72 19 31 18 15 18 12 10 1.9 1.8 1.6 6 10 11 1.2 1.4 1.9 21
Media Attractive 575 7.0 3.8 37.8 11.5 23.9 17.3 15.5 14.6 10.9 9.6 2.6 2.4 2.2 10.7 13.6 14.0 1.8 2.2 2.8 37
Metals & Mining
Hindalco Industries ADD 403 455 13 906 11.1 2,220 41 38 39 (32) (7) 1 10 11 10 5.1 5.5 5.3 1.0 0.9 0.9 11 9 9 1.0 1.0 1.0 38
Hindustan Zinc SELL 306 270 (12) 1,292 15.8 4,225 26 22 22 13 (14) (2) 12 14 14 6.8 7.8 7.8 5.3 5.3 5.3 37 39 38 16.2 7.3 7.1 6
Jindal Steel and Power REDUCE 543 580 7 554 6.8 1,011 48 57 86 (44) 19 52 11 10 6 6.1 5.9 4.1 1.4 1.2 1.0 13 13 18 0.4 0.5 0.8 18
JSW Steel SELL 687 685 (0) 1,660 20.2 2,417 24 71 91 (73) 195 28 29 10 8 11.5 6.7 5.4 2.4 2.0 1.6 8 22 23 0.8 1.5 1.9 17
National Aluminium Co. SELL 79 70 (11) 145 1.8 1,837 8 7 6 (56) (9) (20) 10 11 14 5.1 5.9 7.1 1.1 1.0 1.0 11 9 7 2.9 2.6 2.1 14
NMDC BUY 112 150 34 327 4.0 2,931 16 18 17 (49) 7 (4) 7 6 7 4.5 4.2 4.3 1.7 1.6 1.6 26 26 24 11.8 12.6 12.1 13
SAIL SELL 83 55 (33) 341 4.2 4,130 4 6 6 (87) 55 8 21 14 13 8.1 6.9 6.7 0.6 0.6 0.6 3 5 5 4.1 4.1 4.1 21
Tata Steel BUY 105 130 24 1,281 15.6 12,224 11 9 12 (69) (17) 36 10 12 9 5.9 6.0 5.1 1.0 1.0 0.9 11 8 11 1.5 1.7 2.0 69
Vedanta SELL 286 240 (16) 1,064 13.0 3,717 27 28 30 (50) 7 7 11 10 9 5.1 4.9 4.6 2.4 2.2 2.1 18 23 23 28.3 7.4 7.6 44
Metals & Mining Attractive 7,570 92.3 (56.1) 15.4 16.9 12.3 10.6 9.1 6.5 6.0 5.3 1.6 1.4 1.3 12.8 13.6 14.4 8.1 3.8 4.0 239
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Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3mo
BPCL SELL 328 315 (4) 712 8.7 2,093 (15) 34 45 (135) 332 30 NM 10 7 25.0 5.7 4.8 1.4 1.3 1.2 NM 14 17 (1.7) 4.0 5.2 15
Coal India REDUCE 223 225 1 1,371 16.7 6,163 40 23 26 42 (43) 12 6 10 9 4.6 8.1 6.8 2.5 2.4 2.3 50 25 27 9.0 9.0 9.0 20
HPCL SELL 226 210 (7) 320 3.9 1,419 (80) 58 62 (282) 172 7 NM 4 4 (10.4) 6.7 6.4 1.2 1.0 0.9 NM 28 25 - 10.3 11.0 13
IOCL REDUCE 77 80 4 1,089 13.3 14,121 (0) 14 16 (103) 2,903 18 NM 6 5 16.6 4.6 4.1 0.8 0.8 0.7 NM 14 16 - 8.8 10.4 11
Oil India ADD 262 265 1 284 3.5 1,084 61 48 47 73 (22) (2) 4 6 6 4.2 4.7 4.6 0.8 0.8 0.7 21 15 13 9.3 7.3 7.1 6
ONGC ADD 153 165 8 1,924 23.5 12,580 39 32 33 3 (18) 2 4 5 5 3.0 3.0 2.7 0.7 0.6 0.6 18 13 13 10.8 8.8 8.6 23
Reliance Industries BUY 2,326 2,900 25 14,767 180.1 6,352 101 123 139 11 21 13 23 19 17 11.9 10.2 8.9 1.8 1.6 1.5 8 9 9 0.4 0.4 0.4 209
Oil, Gas & Consumable Fuels Neutral 20,468 249.6 (22.0) 33.1 11.0 15.8 11.9 10.7 9.2 7.0 6.2 1.4 1.3 1.2 9.1 11.2 11.4 2.0 2.6 2.7 297
Pharmaceuticals
Aurobindo Pharma ADD 522 525 1 306 3.7 586 34 46 52 (24) 36 12 15 11 10 7 6 5 1.2 1.1 1.0 8 10 10 2.1 2.5 3.0 11
Biocon REDUCE 213 210 (1) 255 3.1 1,202 4 8 13 (27) 74 64 48 27 17 18 11 8 2.1 2.0 1.8 5 7 11 0.7 1.3 2.1 14
Cipla BUY 896 1,135 27 723 8.8 806 35 48 56 12 37 17 26 19 16 14 11 9 3.1 2.7 2.4 12 15 15 0.7 1.0 1.2 22
Divis Laboratories SELL 2,890 2,380 (18) 767 9.4 265 71 73 93 (36) 3 28 41 40 31 31 27 21 5.9 5.4 4.8 15 14 16 0.9 0.9 1.1 18
Dr Reddy's Laboratories ADD 4,683 4,725 1 780 9.5 166 243 275 318 29 13 16 19 17 15 11 10 8 3.3 2.9 2.4 17 17 17 0.7 0.7 0.8 17
Gland Pharma REDUCE 1,267 1,335 5 209 2.5 164 58 65 77 (22) 12 20 22 20 16 15 13 10 2.6 2.3 2.0 12 12 12 — — — 11
Laurus Labs REDUCE 306 295 (4) 165 2.0 536 17 13 18 8 (22) 35 18 24 17 11 12 10 3.9 3.3 2.8 21 14 16 — — — 5
Lupin REDUCE 659 695 5 300 3.7 450 9 31 41 (60) 225 34 69 21 16 16 10 8 2.4 2.2 1.9 3 10 12 — 0.7 0.9 8
Sun Pharmaceuticals ADD 997 1,140 14 2,392 29.2 2,406 35 41 47 6 18 15 29 24 21 19 15 13 4.4 3.8 3.3 15 16 16 0.7 0.8 0.9 27
Torrent Pharmaceuticals REDUCE 1,578 1,600 1 534 6.5 338 38 48 60 9 28 25 42 33 26 20 16 14 7.6 6.4 5.3 18 20 20 0.4 0.5 0.7 4
Pharmaceuticals Cautious 6,430 78.4 (3.8) 23.9 19.6 27.8 22.5 18.8 16.1 12.8 10.7 3.5 3.1 2.7 12.6 13.8 14.6 0.5 0.7 0.8 137
Real Estate
Brigade Enterprises BUY 469 560 19 108 1.3 230 13 11 17 272 (17) 56 36 44 28 15 10 7 3.4 3.3 3.0 10 8 11 0.5 0.5 0.5 1
Brookfield India Real Estate Trust ADD 279 310 11 94 1.1 335 4 8 8 (56) 122 5 77 35 33 16 14 13 1.1 1.1 1.2 1 3 3 4.6 5.1 5.4 0
DLF BUY 367 430 17 909 11.1 2,475 7 22 19 8 216 (11) 54 17 19 72 19 23 2.4 2.1 1.9 5 13 11 0.5 0.5 0.5 15
Embassy Office Parks REIT ADD 313 390 25 297 3.6 948 8 11 16 (18) 42 44 41 29 20 15 13 11 1.2 1.3 1.3 3 4 6 6.0 7.5 9.5 3
Godrej Properties SELL 1,057 1,100 4 294 3.6 278 31 43 85 143 39 99 34 25 12 86 127 21 3.1 2.7 2.2 9 12 20 — — — 6
Macrotech Developers BUY 903 1,300 44 435 5.3 482 32 53 87 27 69 62 29 17 10 22 12 7 3.5 2.9 2.3 12 19 24 — — — 8
Mindspace REIT ADD 318 360 13 189 2.3 593 8 12 14 (7) 53 11 40 26 24 15 14 13 1.2 1.3 1.3 3 5 5 6.6 7.1 7.4 1
Oberoi Realty ADD 860 910 6 313 3.8 364 42 43 62 46 3 43 20 20 14 15 12 8 2.6 2.3 2.0 14 12 16 0.2 0.2 0.2 5
Phoenix Mills ADD 1,296 1,605 24 231 2.8 179 39 57 80 124 45 41 33 23 16 16 10 7 3.0 2.6 2.3 10 12 15 0.2 0.3 0.3 6
Prestige Estates Projects BUY 414 560 35 166 2.0 401 11 27 30 26 155 10 39 15 14 11 8 5 1.8 1.6 1.4 5 11 11 0.4 0.4 0.4 2
Sobha BUY 442 830 88 42 0.5 95 17 46 79 40 170 71 26 10 6 10 6 3 1.6 1.4 1.2 6 16 23 1.6 1.6 1.6 3
Sunteck Realty BUY 291 500 72 43 0.5 140 10 23 38 942 130 70 30 13 8 22 8 6 1.4 1.3 1.1 5 10 16 0.3 0.3 0.3 1
Real Estate Attractive 3,119 38.0 29.6 82.9 29.3 36.1 19.7 15.3 21.2 13.3 10.0 2.1 2.0 1.8 5.9 10.1 11.9 1.4 1.6 1.8 51
Retailing
Avenue Supermarts SELL 3,655 3,550 (3) 2,369 28.9 648 39 45 58 69 17 28 95 81 63 62 50 40 14.6 12.4 10.4 17 17 18 — — — 16
Titan Company ADD 2,573 2,700 5 2,284 27.9 888 38 41 49 49 9 17 68 62 53 45 41 34 19.6 16.6 14.1 32 29 29 0.5 0.7 0.9 32
Trent REDUCE 1,365 1,300 (5) 485 5.9 356 13 16 22 647 25 32 105 84 63 43 33 26 17.2 14.2 11.6 18 19 20 — — — 10
Retailing Neutral 4,653 62.7 66.7 13.3 23.0 81.2 71.7 58.3 51.1 43.5 35.6 16.8 14.2 11.9 21 19.7 20 0.2 0.3 0.4 58
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Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) EPS growth (%) P/E (X) EV/EBITDA (X) P/B (X) RoE (%) Dividend yield (%) ADVT-3mo
Specialty Chemicals
Aarti Industries REDUCE 526 520 (1) 191 2.3 363 8 18 24 (65) 136 32 69 29 22 27 18 14 4.0 3.6 3.1 5 13 15 0.1 0.4 1— 5
Atul SELL 6,945 6,720 (3) 205 2.5 30 185 247 299 (10) 34 21 38 28 23 25 18 15 4.2 3.8 3.3 12 14 15 0.3 0.5 0.8 3
Castrol India BUY 114 130 14 113 1.4 989 9 10 11 14 12 14 13 12 10 8 7 6 6.7 6.4 5.9 52 57 60 7.5 7.9 8.3 1
Clean Science & Technology ADD 1,376 1,600 16 146 1.8 106 28 34 46 30 22 35 49 40 30 36 30 22 14.3 11.0 8.4 33 31 32 0.3 0.4 0.5 1
Navin Fluorine ADD 4,244 4,550 7 210 2.6 50 75 107 143 43 43 33 57 40 30 39 27 20 9.8 8.1 6.5 19 22 24 0.4 0.4 0.4 8
Pidilite Industries REDUCE 2,322 2,285 (2) 1,181 14.4 508 26 37 45 11 40 22 88 63 51 58 43 36 16.9 14.9 12.8 20 25 27 0.6 0.8 0.9 9
PI Industries ADD 3,029 3,550 17 460 5.6 152 79 97 118 42 23 21 38 31 26 29 23 19 6.4 5.4 4.5 18 19 19 0.3 0.4 0.4 13
SRF BUY 2,376 2,800 18 704 8.6 296 71 83 100 12 17 21 33 29 24 21 18 15 6.8 5.6 4.6 22 21 21 0.4 0.5 - 15
Vinati Organics ADD 1,810 2,250 24 186 2.3 104 45 62 78 34 36 26 40 29 23 31 22 18 8.0 6.6 5.4 22 25 25 0.4 0.7 0.9 1
Specialty Chemicals Attractive 3,395 41.4 8.0 29.8 22.7 45.4 35.0 28.5 30.0 23.5 19.2 8.2 7.0 5.9 18.1 20.1 20.8 0.7 0.8 0.8 56
Telecommunication Services
Bharti Airtel ADD 763 830 9 4,405 53.7 5,661 15 24 40 231 56 70 50 32 19 8 7 6 6.0 4.6 3.9 12 16 22 0.3 0.5 0.9 51
Indus Towers REDUCE 143 140 (2) 386 4.7 2,695 7 13 16 (69) 77 25 20 11 9 5 3 3 1.8 1.7 1.5 9 16 18 3.5 4.2 4.9 11
Vodafone Idea RS 6 — — 304 3.7 48,680 (6) (7) (7) NM NM NM NM NM NM 15 17 18 (0.4) (0.3) (0.2) NM NM NM — — — 16
Tata Communications ADD 1,271 1,150 (10) 362 4.4 285 59 55 63 22 (7) 16 22 23 20 10 9 8 18.2 12.6 8.9 114 64 52 1.8 1.7 2.0 6
Telecommunication Services Attractive 5,458 66.6 NM 27 72 NM NM NM 9.0 8.0 6.8 29 36 162 NM NM NM 0.6 0.9 1.2 85
Transportation
Adani Ports and SEZ BUY 637 810 27 1,375 16.8 2,157 34 38 45 31 10 20 19 17 14 14 12 10 3.1 2.7 2.3 18 17 17 0.1 0.5 0.5 137
Container Corp. REDUCE 573 610 6 349 4.3 609 19 21 23 10 8 13 30 28 24 17 16 14 3.1 3.0 2.9 11 11 12 2.0 2.2 2.5 12
Delhivery BUY 324 395 22 236 2.9 725 (15) (8) (5) 10 49 32 NM NM NM (45) 272 40 2.6 2.6 2.6 NM NM NM — — — 10
Gateway Distriparks BUY 65 90 39 32 0.4 500 4 5 6 (3) 4 23 15 14 12 10 8 6 1.8 1.7 1.5 13 12 14 2.4 2.6 2.9 0
GMR Airports BUY 44 45 3 264 3.2 6,036 (1) (1) (1) (66) (19) (3) NM NM NM 27 20 15 (22.8) (16.6) (20.9) 51 44 43 — — — 6
Gujarat Pipavav Port BUY 116 117 1 56 0.7 483 7 7 8 62 12 12 18 16 14 9 8 7 2.8 2.8 2.8 16 18 20 5.4 6.0 6.5 3
InterGlobe Aviation BUY 1,928 2,550 32 743 9.1 383 (10) 122 150 94 1,268 23 NM 16 13 9 4 3 (11.5) (41.9) 2.7 6 NM 519 — — — 24
Mahindra Logistics REDUCE 374 430 15 27 0.3 71 4 9 18 16 132 102 100 43 21 13 9 7 4.4 4.1 3.6 4 10 18 — — — 1
Transportation Neutral 3,084 37.6 2,280.3 90.8 23.2 43.2 22.6 18.4 15.1 9.8 7.8 5.0 4.2 3.5 11.6 18.6 18.8 0.4 0.6 0.6 193
KIE universe 195,568 2,384 5.6 23.0 16.9 23.6 19.2 16.4 13.4 11.0 9.5 3.1 2.8 2.5 13.2 14.4 15.2 1.7 1.8 2.0
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2022 means calendar year 2021, similarly for 2023 and 2024 for these particular companies.
(c) Exchange rate (Rs/US$)= 81.36
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117
DISCLAIMERS, DISCLOSURES & LEGAL

Distribution of ratings/investment banking relationships
Kotak Institutional Equities Research coverage universe
Percentage of companies covered by Kotak Institutional

70%
Equities, within the specified category.
60%
Percentage of companies within each category for which
Kotak Institutional Equities and or its affiliates has
50%
provided investment banking services within the previous
12 months.
40% * The above categories are defined as follows: Buy = We
30.7% expect this stock to deliver more than 15% returns over
30% 27.2% the next 12 months; Add = We expect this stock to deliver
22.8% 5-15% returns over the next 12 months; Reduce = We
19.3% expect this stock to deliver -5-+5% returns over the next
20% 12 months; Sell = We expect this stock to deliver less than
-5% returns over the next 12 months. Our target prices
10% are also on a 12-month horizon basis. These ratings are
4.4% 4.4%
2.2% used illustratively to comply with applicable regulations. As
1.3%
of 31/12/2022 Kotak Institutional Equities Investment
0%
Research had investment ratings on 228 equity securities.
BUY ADD REDUCE SELL
Source: Kotak Institutional Equities

As of December 31, 2022
Ratings and other definitions/identifiers

Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our Fair Value estimates are also on a 12-month horizon basis.Our Ratings System does not take into account short-term volatility in stock prices related
to movements in the market. Hence, a particular Rating may not strictly be in accordance with the Rating System at all times.
Other definitions
Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the
following designations: Attractive, Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable
regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or
strategic transaction involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a
sufficient fundamental basis for determining an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in
effect for this stock and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
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India Daily

April 06, 2023 NIFTY-50 [Apr 05]: 17,557

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March 2023 quarter earnings preview Key estimates summary

Source: Kotak Institutional Equities estimates

Related Res earch

→ Strategy: Addressing India's 'core' problem

Full sector coverage on KINSITE

Sanjeev Prasad Sunita Baldawa Anindya Bhowmik

Source: Kotak Institutional Equities estimates

Source: Kotak Institutional Equities estimates

Source: Kotak Institutional Equities estimates

Source: Kotak Institutional Equities estimates

Jun-19 Jun-19 Jun-19

Dec-19 Dec-19 Dec-19

Jun-22 Jun-22 Jun-22

Mar-23E Mar-23E Mar-23E

Source: Companies, Kotak Institutional Equities estimates

Source: Companies, Kotak Institutional Equities estimates

Source: Companies, Kotak Institutional Equities estimates

Source: Companies, Kotak Institutional Equities estimates

Source: Kotak Institutional Equities estimates

4QFY23/1QCY23 earnings preview for KIE universe

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Loan-loss provisions 932 326 578 (38.0) 77.2

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Loan-loss provisions 676 407 392 (42.1) (3.7)

Loan-loss provisions 752 1,987 1,413 87.8 (28.9)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

LIC Housing Finance

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

SBI Life Insurance

PAT 3,436 3,692 3,496 1.8 (5.3)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)

Source: Companies, Kotak Institutional Equities estimates

Company-wise earnings of the KIE universe (Rs mn)