Usl ktk

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES.
REFER TO THE END OF THIS MATERIAL.
Contents
Daily Alerts
Results, Change in Reco
Info Edge: Momentum slackens, growth drivers intact; upgrade to BUY
Company alerts
United Spirits: Significant savings possible on RMs; upgrading margin
estimates
Sector alerts
Energy: Floored but may rise
INDIA DAILY
January 21, 2015 India 20-Jan 1-day 1-mo 3-mo
Sensex 28,785 1.8 5.2 8.3
Nifty 8,696 1.7 5.7 9.7
Global/Regional indices
Dow Jones 17,515 0.0 (1.6) 5.4
Nasdaq Composite 4,655 0.4 (2.3) 5.3
FTSE 6,620 0.5 1.1 3.9
Nikkei 17,273 (0.5) (2.0) 16.7
Hang Seng 23,951 0.9 3.6 3.7
KOSPI 1,919 0.0 (0.6) 0.2
Value traded – India
Cash (NSE+BSE) 214 131 45
Derivatives (NSE) 1,919 3,285 2,560
Deri. open interest 2,318 2,454 2,146
Forex/money market
Change, basis points
20-Jan 1-day 1-mo 3-mo
Rs/US$ 61.8 3 (149) 65
10yr govt bond, % 7.8 2 (22) (70)
Net investment (US$ mn)
19-Jan MTD CYTD
FIIs 68 (13) 16,162
MFs 35 (402) 4,802
Top movers
Change, %
Best performers 20-Jan 1-day 1-mo 3-mo
LICHF IN Equity 490.5 (0.7) 16.0 46.9
UBBL IN Equity 942.9 (0.8) 16.4 39.4
AL IN Equity 61.1 1.0 20.8 38.2
KMB IN Equity 1395.7 0.4 12.9 37.7
YES IN Equity 858.4 4.0 17.8 37.6
Worst performers
GMRI IN Equity 16.9 0.0 0.3 (20.8)
RCOM IN Equity 80.6 1.3 (2.8) (20.7)
SSLT IN Equity 204.2 5.7 (2.0) (17.8)
JSTL IN Equity 1005.1 2.9 (4.9) (14.5)
RELI IN Equity 495.5 1.1 0.5 (14.4)

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
Recruitment—steady growth with some deterioration in business metrics
Revenues grew by a steady 19% yoy to `1.08 bn. While the number of unique paying
customers remained steady, there was some deterioration in job-seekers’ activity (muted resume
additions, modifications), hiring interest (single-digit growth in Naukri’s job index), and margin
(partly related to seasonal factors). Revenue growth is being primarily driven by mainstay sectors
(IT and financial services) and would get a fillip from manufacturing. Naukri’s significant share in
a growing market will support price increases. Further investments in new products should start
paying off for Info Edge over the next couple of years.
99acres—soft demand takes a toll; competition i business and cost metrics
99acres reported further growth moderation in 3QFY15 (up 20% yoy). This was led by a
combination of: (1) lack of new project launches in key markets, (2) fierce competition and
(3) loss of revenues from home owners (as other sites have started offering free listings for
owners). The growth moderation is less reflective of market potential (which remains large) and
more reflective of a large share of traffic-linked income. In a weak demand environment, cash-
rich competition is undercutting and increasing the cost of customer acquisitions.
3QFY15—higher spending on new businesses raises revenue growth threshold to sustain margins
Info Edge reported 18% revenue growth with the non-recruitment businesses dragging down
an otherwise steady 19% growth in recruitment. EBITDA margin of 24.6% was impacted by (1)
a sharp increase in staff costs (mainly related to 99acres and (2) higher advertising spends (a
response to stiff competition). Continued investment in new businesses led to a sharp fall in
margins in 9MFY15 despite strong 20% revenue growth and better revenue mix.
Estimates factor stricter assumptions for 99acres and Zomato
We revise our standalone EPS estimates to `13.0/18.2/26.4 from `12.7/18.1/27.6 over FY2015-
17, at lower 35% revenue CAGR and margin (10% EBITDA margin in FY2017E at 10% cost
CAGR) for 99acres. We value investment in Zomato at 30% discount to the recent transaction.
Info Edge (INFOE)
Internet
Momentum slackens, growth drivers intact; upgrade to BUY. 3QFY15 reflects (1) a
sharp easing of growth in 99acres (soft demand, undercutting by cash-rich competition)
and (2) weakening business metrics in recruitment (moderating activity from job seekers
and companies). This weakness can continue, especially in real estate (where most of
revenue is traffic dependent). Growth drivers are intact for both sectors—for
recruitment these would be cyclical recovery, pricing uptick and new products, and for
real estate they would be concentrated in the top-four cities, mainly from developers.
Our revised SOTP target price of `960 (from `1,070) bakes in stricter assumptions for
99acres and Zomato. We upgrade to BUY from ADD after the recent price correction.
BUY
JANUARY 21, 2015
RESULT, CHANGE IN RECO.
Coverage view: Attractive
Price (`): 809
Target price (`): 960
BSE-30: 28,785
Info Edge
Stock data Forecasts/Valuations 2015 2016E 2017E
52-week range (Rs) (high,low) EPS (Rs) 10.1 15.4 23.3
Market Cap. (Rs bn) EPS growth (%) 22.5 53.5 50.5
Shareholding pattern (%) P/E (X) 80.4 52.4 34.8
Promoters 44.5 Sales (Rs bn) 6.9 8.6 11.0
FIIs 30.1 Net profits (Rs bn) 1.2 1.9 2.8
MFs 14.3 EBITDA (Rs bn) 1.0 1.8 3.1
Price performance (%) 1M 3M 12M EV/EBITDA (X) 86.9 47.4 26.4
Absolute (7.1) (3.4) 41.5 ROE (%) 11.1 12.0 16.9
Rel. to BSE-30 (10.1) (10.8) 5.4 Div. Yield (%) 0.4 0.7 1.0
Company data and valuation summary
1,015-468
97.2

Info Edge Internet
KOTAK INSTITUTIONAL EQUITIES RESEARCH 3
Exhibit 1: Weakness in top-line and margins covered by high investment income and strong other income (one-offs, QIP)
Standalone financials of Info Edge, March fiscal year-ends (` mn)
Source: Company, Kotak Institutional Equities estimates
Increased pace of investment is possibly raising threshold for revenue growth
Info Edge reported weak results in terms of revenue (up 18% yoy; 4.6% below our
estimate) and margin (24.6%; impacted by continued investment in 99acres and high
advertising costs). For 9MFY15, it reported 19% yoy growth in sales and a sharp decline in
margin to 29.2% (expanded workforce to grow its loss-making, non-recruitment
businesses).
The key change is that it has increased the pace of its investments in its non-recruitment
business, which is increasing the threshold growth for the recruitment business, thereby
sustaining margins. This threshold was close to 20%, which is what the company achieved
in 9MFY15, though it was still not able to sustain margins.
Exhibit 2: Margin declined in 9MFY15, despite 20% revenue growth
Revenue growth and EBITDA margin for Info Edge, March fiscal year-ends, 20111-9MFY15 (standalone)
Yoy growth Yoy growth
3QFY15 3QFY15E 3QFY14 2QFY15 vs est. yoy qoq 9MFY15 9MFY14 (%) FY2015E FY2014 (%)
Total operating income 1,457 1,527 1,234 1,476 (4.6) 18.1 (1.2) 4,382 3,671 19.4 5,999 5,059 18.6
Employee expenses (642) — (494) (603) 29.9 6.5 (1,834) (1,441) 27.2 (2,459) (1,966) 25.1
Network, Internet and Other direct charges (55) — (35) (46) 55.0 17.7 (141) (121) 15.9 (180) (160) 12.3
Administration and Other expenses (167) — (133) (181) 25.8 (7.8) (507) (396) 28.2 (744) (603) 23.4
Advertising and Promotion cost (231) — (149) (223) 55.2 3.3 (622) (485) 28.3 (822) (663) 24.1
Operating expenses (1,094) (1,039) (811) (1,053) 35.0 3.9 (3,104) (2,443) 27.0 (4,205) (3,391) 24.0
EBITDA 364 489 423 423 (25.6) (14.1) (14.0) 1,279 1,228 4.1 1,794 1,668 7.6
Other income 256 136 95 110 87.4 170.5 132.6 494 326 51.7 686 433 58.6
PBDIT 619 625 518 532 (1.0) 19.6 16.3 1,773 1,554 14.1 2,480 2,100 18.1
Financial charges (8) (8) (6) (7) - 20.4 5.6 (22) (18) 21.8 (30) (25) 21.5
Depreciation (48) (45) (39) (46) 5.8 22.0 2.6 (138) (118) 16.5 (187) (174) 7.5
Pre-tax profit 564 573 472 479 (1.5) 19.4 17.8 1,614 1,418 13.8 2,264 1,902 19.0
Taxation (178) (183) (150) (147) (3.1) 18.2 21.1 (497) (443) 12.1 (702) (591) 18.7
PAT (recurring) 386 389 322 332 (0.8) 20.0 16.3 1,117 975 14.6 1,562 1,311 19.1
Exceptional items — — — — NA NA NA — (26) — (26) NA
Reported PAT 386 389 322 332 (0.8) 20.0 16.3 1,117 949 17.7 1,562 1,285 21.5
Key ratios (%)
Direct cost of sales 47.8 42.9 44.0 45.1 42.6 44.0 42.0
Fixed cost of sales 27.3 22.8 27.4 25.8 24.0 26.1 25.0
EBITDA margin 24.9 32.0 34.3 28.6 29.2 33.4 29.9 33.0
PAT margin 26.5 25.5 26.1 22.5 25.5 26.6 26.0 25.9
Tax rate 31.5 32.0 31.8 30.6 30.8 31.3 31.0 31.1
% change
34.0
38.3
34.3 33.0
29.2
0
10
20
30
40
50
0
10
20
30
40
50
2011
2012
2013
2014
9MFY15
(%)(%) Revenue growth (LHS) Margin (RHS)

Internet Info Edge
4 KOTAK INSTITUTIONAL EQUITIES RESEARCH
Recruitment— steady growth with some deterioration in business metrics
Revenues grew by a steady 19% yoy to `1.08 bn. While the number of unique-paying
customers was steady, there was some deterioration in job-seekers’ activity (muted resume
additions, modifications), hiring interest (single-digit growth in Naukri’s job index), and
margins (partly related to seasonal factors). The revenue growth was driven mainly by
mainstay sectors (IT and financial services) and will get a fillip from manufacturing. Naukri’s
significant share in a growing market is expected to support price increases and investments
in new products are expected to pay off for Info Edge over the next couple of years.
Exhibit 3: Growth in Job Speak Index has weakened in 3QFY15
Yoy growth in Naukri's Job Speak Index, March fiscal year-ends, 1Q11-3Q15 (%)
Source: Company, Kotak Institutional Equities
Exhibit 4: Excluding financial services, most sectors saw muted growth in hiring interest
Segmental yoy growth in Naukri's Job Speak Index in 2QFY15, March fiscal year-end (%)
Source: Naukri's Job Speak Index, Kotak Institutional Equities
30
24
19
14
17
13
14
13
6
8 7
11
14
11
13 14
17
20
7
0
5
10
15
20
25
30
35
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
(%)
Services business
Manufacturing-domestic
Manufacturing-export
8 6
(2) (2)
23
7
3
(6)
1 4
(40)
(20)
0
20
40
60
IT-Software
BPOandITeS
Constructionand
Engineering
Autoandancillary
services
BankingandFinancial
Services
OilandGas
Telecom
Insurance
CapitalGoods
Pharma&Biotech
(%)

Info Edge Internet
Exhibit 5: Recruitment revenues have grown steadily…
Recruitment sales trajectory for Info Edge, March fiscal year-ends,
2010-3QFY15
Exhibit 6:…though margins have declined
Recruitment margin trajectory for Info Edge, March fiscal year-ends,
2010-3QFY15
Exhibit 7: Sharp decline in additions in 3QFY15
Average number of resumes added daily, March fiscal year-ends, 2007-3QFY15 ('000)
Real estate—competition outspends and takes away share
99acres reported growth moderation in 3QFY15 (up 20% yoy; was up 32% yoy in 2QFY15).
This was led by (1) lack of new project launches in Delhi (accounts for a third of sales),
(2) increased competition from peers (magicbricks gains significant market share) and (3) loss
of revenue from home owners (other sites offer owners free listings). The company has likely
increased advertising spends. Market potential is large as business is concentrated in the
top-eight cities (60-70% of revenues). Developers (new homes) support most of the
revenue.
10
24
28
24
21
2827
20
27
19
1210
4
8 8 11
1416
1819
(20)
0
20
40
60
0
200
400
600
800
1000
1200
1QFY10
3QFY10
1QFY11
3QFY11
1QFY12
3QFY12
1QFY13
3QFY13
1QFY14
3QFY14
1QFY15
3QFY15
(%)(Rs mn) Recruitment sales
3938
444442
4649
44
494951
55
5050
474950514952525149
(20)
0
20
40
60
—
100
200
300
400
500
1QFY10
3QFY10
1QFY11
3QFY11
1QFY12
3QFY12
1QFY13
3QFY13
1QFY14
3QFY14
1QFY15
3QFY15
(%)(Rs mn) Recruitment EBITDA
10
9 9
1111
12 12
14
17
14
10
12 12
11 11
1313
10
11
12 12
11
9
13
11
10
12 12
1110
11
12
13
9
0
2
4
6
8
10
12
14
16
18
1Q07
3Q07
1Q08
3Q08
2Q09
4Q09
2Q10
4Q10
2Q11
4Q11
2Q12
4Q12
2Q13
4Q13
2Q14
4Q14
2Q15
Averagenumber ofresumes added daily in '000

Internet Info Edge
Exhibit 8: Non-recruitment revenue growth moderated…
Non-recruitment sales trajectory for Info Edge, March fiscal year-ends,
2010-3QFY15
Exhibit 9: … and losses increased
Non-recruitment margin trajectory for Info Edge, March fiscal year-
ends, 2010-3QFY15
Zomato—focus on expanding business; delay in breaking even less relevant
 Urbanspoon, a stepping stone to US market. The recent acquisition of Urbanspoon
gives Zomato a foothold in the US (where Urbanspoon is number two). Zomato has learnt
from the tough experience in the UK, where it found it difficult to expand organically. It
also comes at an attractive cost, discounting inherent weaknesses in Urbanspoon’s
business—(1) revenues limited to Google ads, (3) flattening traffic growth, (3) limited
management bandwidth and (4) not being the market leader in the US (in a “winner-
takes-all” business). In terms of business, Urbanspoon serves three million unique
monthly visitors or 1/12 of Zomato’s user base. Its valuation of US$52 mn needs to be
seen in this context (versus US$670 mn valuation of Zomato based on the recent
transaction).
 Breakeven delayed. Info Edge had expected the Zomato business to break even at a top
line of `400-500 mn. This is in contrast to the current losses at projected topline of `800-
900 mn in FY2015E. It believes Zomato will leverage its recent acquisitions to cross-sell
products and establish a presence in new markets. Presently most of the revenues of the
portal come from India and the UAE.
Revise SOTP to reflect weakness in margin assumptions for 99acres
We revise our standalone business estimates reflect lower margin assumptions for 99acres to
`13.0/18.2/26.2 from `12.7/18.1/27.8 over FY2015-17E. We revise our target price to `960
(28X FY2017E cash-stripped standalone EPS, 3X book for investments and 1X cash) from
`1,070. We assume higher discount for Zomato.
3129
33
4745
50
3433
43
35
4139
3536
42
333233
25
17
0
15
30
45
60
75
—
100
200
300
400
500
1QFY10
3QFY10
1QFY11
3QFY11
1QFY12
3QFY12
1QFY13
3QFY13
1QFY14
3QFY14
1QFY15
3QFY15
(%)(mn)
Other verticals
(51)
(36)
(44)
(24)(23)
(48)
(21)
(6)
(16)
(25)
(17)(15)
(22)(23)
(15)(15)
(29)
(7)
(10)
(22)
(11)
(30)
(44)
(60)
(45)
(30)
(15)
0
(200.0)
(160.0)
(120.0)
(80.0)
(40.0)
0.0
1QFY10
3QFY10
1QFY11
3QFY11
1QFY12
3QFY12
1QFY13
3QFY13
1QFY14
3QFY14
1QFY15
3QFY15
(%)(mn) Other verticals EBITDA

Info Edge Internet
Exhibit10: Key assumptions for Info Edge, March fiscal year-ends, 2014-17E (` mn)
Exhibit 11: SOTP valuation of Info Edge
2014 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E
Total
Sales 5,059 5,999 7,436 9,452 6,110 7,706 9,932 (1.8) (3.5) (4.8)
Sales growth (%) 15.7 18.6 23.9 27.1 20.8 26.1 28.9
EBITDA 1,668 1,794 2,566 3,822 1,983 2,874 4,427 (9.5) (10.7) (13.7)
EBITDA margin (%) 33.0 29.9 34.5 40.4 32.5 37.3 44.6
EPS (Rs) 12.0 13.0 18.2 25.8 12.7 18.1 27.8 2.6 0.5 (7.3)
EPS growth (%) (0.3) 8.5 39.9 41.5 5.7 42.8 53.5
Recruitment
Sales 3,713 4,364 5,319 6,606 4,364 5,319 6,606 0.0 0.0 0.0
Growth (%) 10.0 17.5 21.9 24.2 17.5 21.9 24.2
EBITDA 1,879 2,247 2,819 3,567 2,269 2,926 3,766 (1.0) (3.6) (5.3)
EBTDA margin (%) 50.6 51.5 53.0 54.0 52.0 55.0 57.0
Jeevansaathi
Sales 360 396 457 553 416 480 581 (4.8) (4.8) (4.8)
Growth (%) 11.5 10.0 15.5 21.0 15.5 15.5 21.0
EBITDA (67) (48) (34) 0 (42) (36) 0 14.3 (4.8) NA
EBTDA margin (%) (18.6) (12.0) (7.5) 0.0 (10.0) (7.5) 0.0
99 acres
Sales 758 955 1,304 1,848 1,035 1,536 2,282 (7.7) (15.2) (19.0)
Growth (%) 47.5 26.0 36.5 41.8 36.5 48.5 48.5
EBITDA (48) (334) (130) 277 (155) 77 685 NA NA (59.5)
EBTDA margin (%) (6.3) (35.0) (10.0) 15.0 (15.0) 5.0 30.0
Others
Sales 228 285 356 445 296 370 463 (3.8) (3.8) (3.8)
Sales growth (%) 42 25 25 25 30 25 25
EBITDA (96) (71) (89) (22) (89) (93) (23) (19.9) (3.8) (3.8)
EBITDA margin (%) (42.3) (25.0) (25.0) (5.0) (30.0) (25.0) (5.0)
New estimates Old estimates % revision
Value Multiple Valuation Stake Valuation of stake Per share value
Parameter (Rs mn) (X) Valuation basis (Rs mn) (%) (Rs mn) (Rs)
Standalone business
ex-99 acres
2017E earnings (ex
interest income)
2,231 28.0 P/E discounted to Dec-2016 62,473 100 60,593 505
99acres
30% discount to recent peer
transaction multiples (30X
FY2015E sales) 20,057 100 20,057 167
Zomato
30% discount to recent
transaction value 28,140 50 14,070 117
Other investments 2014 book 5,325 3.0 P/B 15,974 38 6,022 50
QIP issue + cash
2016E cash+financial
investments 13,780 1.0
1X cash
13,780 100 13,780 115
Total 955

Internet Info Edge
Exhibit 12: Summary financials for Info Edge (consolidated), March fiscal year-ends, 2009-17E (` mn)
2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Profit model
Total operating income 2,458 2,371 3,224 3,920 4,723 5,672 6,889 8,592 10,956
Operating expenses (1,796) (1,745) (2,390) (2,736) (3,513) (4,706) (5,914) (6,836) (7,891)
EBITDA 662 626 834 1,183 1,210 966 974 1,756 3,065
Other income 279 307 274 395 475 502 762 953 1,042
PBDIT 941 932 1,108 1,578 1,685 1,468 1,737 2,709 4,107
Financial charges (17) (20) (23) (22) (28) (30) (33) (33) (33)
Depreciation (71) (65) (80) (83) (118) (212) (193) (215) (215)
Pre-tax profit 853 848 1,005 1,473 1,540 1,227 1,511 2,461 3,859
Taxation (270) (318) (400) (529) (528) (591) (484) (787) (1,235)
Recurring PAT 570 559 581 1,043 1,153 923 1,207 1,853 2,788
Recurring EPS 5.2 5.1 5.3 9.5 10.6 8.4 10.1 15.4 23.3
Balance sheet
Equity share capital 273 273 546 546 1,092 1,092 1,199 1,199 1,199
Reserves & surplus 2,980 3,474 3,805 4,726 4,993 5,628 13,879 14,657 16,015
Minority interest — — 16 (25) 105 1,392 1,571 1,750 1,915
Shareholders funds 3,252 3,746 4,367 5,247 6,189 8,112 16,649 17,607 19,129
Total source of funds 3,256 3,753 4,374 5,250 6,194 8,116 16,649 17,607 19,149
Net fixed assets 385 363 741 643 1,620 1,588 1,588 1,673 1,758
Investments 183 1,141 2,628 3,152 2,614 5,380 7,220 7,220 7,220
Cash balances 3,221 2,791 2,076 2,855 3,466 3,072 9,905 11,360 13,709
Net current assets excluding cash (552) (577) (1,130) (1,441) (1,551) (1,987) (2,127) (2,709) (3,602)
Total application of funds 3,256 3,753 4,374 5,250 6,194 8,116 16,649 17,607 19,149
Cash flow statement
Operating profit before working capital changes 671 615 708 1,049 1,157 877 1,253 1,922 2,873
Change in working capital/ other adjustments (295) 24 553 311 110 436 140 582 893
Cash flow from operating activites 375 639 1,261 1,361 1,267 1,313 1,394 2,503 3,765
Fixed assets (75) (43) (457) 14 (1,095) (180) (193) (300) (300)
Investments 2,471 (959) (1,486) (525) 538 (2,766) (1,840) — —
Cash (used)/ realised in investing activities 2,396 (1,001) (1,944) (510) (557) (2,946) (2,033) (300) (300)
Free cash flow 2,771 (362) (683) 850 710 (1,633) (639) 2,203 3,465
Dividend paid (24) (24) (48) (127) (127) (319) (494) (759) (1,142)
Interest charges (17) (20) (23) (22) (28) (30) (33) (33) (33)
Cash (used)/realised in financing activities (17) (44) (34) (180) — 996 7,293 (928) (1,280)
Cash generated/ utilised 2,735 (430) (714) 779 611 (395) 6,833 1,455 2,350
Cash at beginning of year 486 3,221 2,791 2,076 2,855 3,466 3,072 9,905 11,360
Cash at end of year 3,221 2,791 2,076 2,855 3,467 3,072 9,905 11,360 13,709

UNSP’s RM costs are very high: significant scope for improvement exists
UNSP’s RM cost in FY2014 at `596 per case is very high and indicates a lot of inefficiencies in
the RM procurement process. As per our estimates, UNSP’s RM cost per case should not have
been more than ~`490 per case in FY2014, had the procurement process been efficient. Hence,
ideally UNSP should have made gross margins to the tune of ~50% in FY2014 versus reported
gross margins of 40%. Even tier-2 liquor companies like Radico Khaitan and Tilaknagar make
gross margins in the vicinity of 40% in their IMFL business (actual basis grossing up for tie-up
sales) at realizations in the range of `640-680 per case. UNSP’s gross margins should be
materially higher given higher realizations (net sales per case in FY2014) to the tune of `810 per
case. UNSP reporting similar gross margins as tier-2 liquor companies points towards
‘inefficiencies’ in RM procurement.
EBITDA margin should ideally have been closer to `150 versus `70 reported in FY2014
In our view, in case the RM procurement process would have been efficient in FY2014, savings
in the range of `70-80 per case (assuming 5% error in our costing data) could have been
achieved. Hence, reported EBITDA margins in FY2014 would have been `140-150 versus
reported margins of `70 per case.
We bake in full realization of RM cost efficiencies in our FY2017E numbers
We expect that the impact of cost rationalization being undertaken by Diageo should gradually
start reflecting in better margins in the coming quarters and bake in full efficiencies in our
FY2017E numbers. Time would be required (1) for due diligence of cost structure and
implementation of efficiencies and (2) as previous procurement contracts expire and new
contracts are signed. We are now modelling `170 per case margins in FY2017E versus `135
earlier. We have also reduced our volume estimates to reflect the premiumization strategy being
followed by the company. We are modelling volume growth of 5% CAGR in FY2016-17E. Our
new estimate of FY2017E EBITDA is higher by 11% versus earlier. Retain BUY with a revised target
price of `4,000 (`3,200 earlier) at 25X Dec 2016E EBITDA (multiples are unchanged from before).
United Spirits (UNSP)
Consumer Products
Significant savings possible on RMs; upgrading margin estimates. Our analysis of
UNSP’s RM costs reveals significant ‘inefficiencies’. As per our estimates, gains of
`70-80 per case are possible on the margins front as Diageo goes about rationalizing
the cost structure. Margins would take time to recover as (1) some of the RMs could be
tied through long-term contracts and (2) execution of rationalization measures could
take time. We bake in full efficiency gains in our FY2017E numbers. We have raised our
earning estimates led by higher (`170 versus `135 earlier) margins in FY2017E. Retain
BUY with a revised TP of `4,000.
BUY
JANUARY 21, 2015
UPDATE
Coverage view: Neutral
Price (`): 3,365
Target price (`): 4,000
BSE-30: 28,785
United Spirits
Stock data Forecasts/Valuations 2015 2016E 2017E
52-week range (Rs) (high,low) EPS (Rs) 23.6 68.6 96.5
Market Cap. (Rs bn) EPS growth (%) 363.1 191.1 40.6
Shareholding pattern (%) P/E (X) 142.7 49.0 34.9
Promoters 58.9 Sales (Rs bn) 93.7 103.6 113.1
FIIs 23.7 Net profits (Rs bn) 3.4 10.0 14.0
MFs 3.9 EBITDA (Rs bn) 10.7 18.3 23.4
Price performance (%) 1M 3M 12M EV/EBITDA (X) 48.3 27.6 21.2
Absolute 21.5 31.6 24.4 ROE (%) 11.1 28.1 30.5
Rel. to BSE-30 15.6 20.9 (8.3) Div. Yield (%) 0.1 0.2 0.3
Company data and valuation summary
3,448-2,225
489.0

Consumer Products United Spirits
UNSP’s RM costs have significant scope for improvement
UNSP’s RM cost in FY2014 at `596 per case is very high and indicates inefficiencies in the
RM procurement process. As per our estimates, UNSP’s RM cost per case should not have
been more than ~`490 per case in FY2014, had the procurement process been efficient.
Hence, ideally UNSP should have made gross margins to the tune of 50% in FY2014 versus
reported gross margins of 40%. Even tier-2 liquor companies like Radico Khaitan and
Tilaknagar make gross margins (actual basis grossing up for tie-up sales) in the vicinity of
40% in their IMFL business at realizations in the range of `640-680 per case. UNSP’s gross
margins should be materially superior given higher realizations (net sales per case in FY2014)
to the tune of `810 per case. Hence, UNSP reporting similar gross margins as tier-2 liquor
companies points towards ‘inefficiencies’ in RM procurement.
Exhibit 1: RM cost of UNSP has significant scope for improvement
Calculation of RM cost of UNSP in FY2014 (Rs per case)
Notes:
(a) We have assumed that 30% of total volumes of 120.7 mn cases in FY2014 were outsourced.
In the exhibits below, we have tried to calculate RM cost for UNSP in FY2014 on a bottom-
up basis to arrive at the difference between ideal and reported RM cost per case. We have
broken down RM cost into three elements: (1) extra-neutral alcohol or ENA, (2) packaging
and (3) cost of blend. We have calculated RM cost separately for an economy brand and a
premium brand and then arrived at the ideal cost per case for UNSP after accounting for
reported mix in FY2014. Estimates of cost of bottles, caps, labels, etc. are based on the
inputs we have gathered across a number of industry meetings. Our calculations are
presented below.
Calculation of packaging cost
As per our calculations, the cost of packaging for an economy and a prestige brand should
be in the vicinity of `200 and `430, respectively. We have used the following assumptions:
Exhibit 2: Calculation of packaging cost for an economy brand
of IMFL
Source: Kotak Institutional Equities
Exhibit 3: Calculation of packaging cost for prestige and above
category brands of IMFL
Total RM cost (Rs mn) 50,392
Total number of in-house cases (mn cases) 84
RM cost per case (Rs per case) 596
Cost of new bottle (Rs) 3.2
Cost of old bottle (Rs) 1.6
New: Old mix (%) 50
Cost of label (Rs) 0.5
Cost of cap (Rs) 0.75
Cost of bottles (Rs per case) 120
Cost of label (Rs per case) 25
Cost of cap (Rs per case) 37.5
Cost of carton (Rs per case) 18
Total cost of packaging (Rs per case) 201
Cost of new bottle (Rs) 20
New: Old mix (%) 100
Cost of label (Rs per bottle) 1
Cost of cap (Rs per bottle) 5
Cost of monocarton (Rs per bottle) 8
Cost of bottles (Rs per case) 240
Cost of label (Rs per case) 12
Cost of cap (Rs per case) 60
Cost of monocarton (Rs per case) 96
Cost of carton (Rs per case) 25
Total cost of packaging (Rs per case) 433

United Spirits Consumer Products
Economy brand
 We have assumed new and old bottle mix of 50:50 and cost of packaging at `201 per
case for economy brands. Our calculation is conservative as:
 We have assumed that all economy volumes are sold in 180 ml SKUs in which packaging
cost is higher, as higher number (50 versus 12 in case of 750 ml SKU) of labels and
caps are required. Since a reasonable proportion of 750 ml SKU is there in the bottling
mix of an economy brand, in our view, our estimate of cost is conservative and actual
packaging cost of an economy brand would likely be lower versus our estimate.
 Some low end economy brands are even sold in pouches and tamper-proof packs in
which cost of packaging is substantially lower versus our calculations.
Prestige and above category brands
 We have assumed that in prestige and above brands, all bottles are new and a bottle
costs `20 per piece. As per our understanding, cost of bottle would be in the range of
`15-16 per 750 ml bottle for the lower end (brand like McDowell’s No 1) of prestige and
above category and cost per bottle at the higher end of the spectrum (for a brands like
Antiquity) would be in the range of `25-30 per 750 ml bottle. Since McDowell’s No 1
accounts for almost 70% of volumes of UNSP in the prestige and above category, our
cost assumption is conservative.
Calculation of total cost per case for an economy and a prestige brand
As per our calculations, total cost per case for an economy and prestige and above category
brand is to the tune of `377 and `679, respectively. We have made the following
assumptions.
Exhibit 4: Calculation of total cost per case of an economy brand
in FY2014
Exhibit 5: Calculation of cost per case of a prestige and above
brand in FY2014
We have assumed cost of blend at `12 and `82 per case for economy and prestige brands,
respectively. While our estimate in case of an economy brand is based on our conversations
with various companies in the sector, our estimate of cost of blend in case of UNSP is based
on management inputs and details disclosed in the annual report of UNSP. We take comfort
from the fact:
 As per our understanding, UNSP’s cost of blend in FY2014 was to the tune of `2.7 bn.
Since most of the imported blend was bought from W&M, this cost is reflected under
related party transactions in the annual report. We have assumed that the entire
imported blend is consumed in the prestige and above category.
 Pernod India’s (PI) total expense in foreign currency in FY2014 was to the tune of `3.4
bn, as per the annual report. This expense would include cost of blend (accounting for
bulk of this expense) as well as cost of import of global brands of PI. Given this data
point, in our view, our estimate of UNSP’s blend cost is fair as:
Cost of ENA (Rs per litre) 43.5
ENA required per case at 42% (ml) 3,780
Cost of ENA (Rs per case) 164
Cost of packaging (Rs per case) 201
Cost of blend (Rs per case) 12
Total cost (Rs per case) 377
Cost of ENA (Rs per litre) 43.5
ENA required per case at 42% (ml) 3,780
Cost of ENA (Rs per case) 164
Cost of packaging (Rs per case) 433
Cost of blend (Rs per case) 82
Total cost (Rs per case) 679

 PI’s volumes in FY2014 at ~31 mn cases were similar to UNSP’s 33 mn cases in the
prestige and above category.
 PI’s portfolio in prestige and above category is superior versus UNSP as almost 50% of
total volumes of PI are contributed by Royal Stag, which is a higher-priced brand (`650
for 750 ml bottle in Mumbai) versus 70% contribution from McDowell’s No 1 in case
of UNSP, which is priced in the vicinity of ~`500.
 Even if we assume that the entire expense of Radico on malt/malt scotch/grain/grape
spirits of `113.7 mn in FY2014 is on account of blending for premium volumes (3.7 mn
cases), it would amount to `31 per case.
Exhibit 6: Calculation of ideal cost per case for UNSP in FY2014
Notes:
(a) We have assumed that manufacturing of only economy brands is outsourced to tie-up units.
We expect efficiencies of `70-80 per case (on FY2014 cost structure) to be
realized as RM costs are rationalized by Diageo
We expect UNSP to realize `70-80 per case of efficiencies on the RM cost base of FY2014,
as RM costs are rationalized by Diageo in the coming years. We are indirectly implying that
had UNSP’s RM cost structure been efficient in FY2014, it would have made EBITDA per case
in the range of `140-150 versus reported margin of `70 per case in FY2014.
We expect that cost rationalization measures being undertaken by Diageo should gradually
start reflecting in better margins in the coming quarters. We have baked in full efficiencies in
our FY2017E numbers. In our view, cost rationalization would be a comprehensive exercise
requiring due diligence of existing cost structure, followed with execution of remedial
measures and hence would be time consuming. Also, some of the RM procurement
contracts could be long term in nature and hence savings would be realized only on expiry
of existing contracts.
We have increased our margin estimate for FY2017E to `170 per case from `135 per case
earlier. We have used the following assumptions:
 We have used base margin in FY2014E, which captures full efficiencies of the business
model at `140 per case.
 We have assumed that EBITDA per case would increase 3% every year on account of
inflation or price hikes as consumer companies typically tend to maintain their % margins
in the long term.
 We have assumed 3% mix benefits every year on account of premiumization. We have
assumed that 40% of premiumization benefits will flow to EBITDA level every year. We
have made this assumption based on our understanding of the cost structure of liquor
business and inputs we have received in our industry meetings.
Total volumes (mn cases) 120
Prestige and above category volumes (mn cases) 33
Regular and below category volumes (mn cases) 87
In house volumes (mn cases) 90
Prestige and above (mn cases) 33
Regular and below (mn cases) 57
Cost of economy brand (Rs per case) 377
Cost of prestige and above brand (Rs per case) 679
Economy:prestige ratio 63
Blended cost per case (Rs) 488

United Spirits Consumer Products
As per our calculations, UNSP’s margins could possibly improve to a range of `180-190 per
case in FY2017E, assuming all efficiencies are realized in the P&L. However, we are assuming
that UNSP will increase investments into branding and operations, which would take away
~`20 per case (implying `2.7 bn of additional investments into branding and improvement
of operations) of these efficiencies. Hence, we have kept our margin assumption in FY2017E
at ~`170 per case.
Exhibit 7: Possible build-up of margins for UNSP assuming current inefficiencies are ironed out by
FY2017E
Calculation of FY2017E EBITDA margin in an ideal scenario for UNSP (Rs per case)
Source: Kotak Institutional Equities estimates
Assumptions
Exhibit 8: Our assumptions for UNSP, March fiscal year-ends, 2008-17E
Change in earnings
We have increased our earning estimates for FY2017E led by higher margin assumptions, as
explained earlier. We have reduced our volume estimates for FY2016/17E to align our
estimates with the premiumization strategy of the company. We now expect volumes to
grow at a CAGR of 5% in FY2016-17E, after 3% growth in FY2015E.
Exhibit 9: We assume that bulk of possible efficiencies in RM cost structure of UNSP would be realized in FY2017: raising our estimates on
account of that
Change in estimates for UNSP, March fiscal year-ends (Rs mn)
2014 2015E 2016E 2017E
Reported net sales per case 812 885 965 1,052
Reported margins 71
RM cost inefficiencies 69
Margin assuming efficient operations 140.0 153.9 169.2 185.8
Impact of inflation (%) 3 3 3
Addition to margins on account of inflation 4.2 4.6 5.1
Impact of price/mix (%) 6 6 6
Impact of premiumisation (%) 3 3 3
Flow-through of premiumisation to EBITDA (%) 40 40 40
Additional EBITDA on account of premiumization 9.7 10.6 11.6
74
88
100
112
120 124 121 124
131 137
-
20
40
60
80
100
120
140
160
180
0
20
40
60
80
100
120
140
160
2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Volumes (mn cases) EBITDA per case (Rs) (RHS)
New Old % chng New Old % chng New Old % chng
Revenues (Rs mn) 93,710 97,900 (4) 103,610 111,135 (7) 113,077 124,548 (10)
EBITDA (Rs mn) 10,651 10,976 (3) 18,258 18,144 1 23,405 20,921 11
PAT (Rs mn) (adj.) 3,426 3,590 (5) 9,971 9,775 2 14,019 12,149 13
EPS (Rs) (adj.) 23.6 24.8 (5) 68.8 67.4 2 96.7 83.8 13
2015E 2016E 2017E

Valuation
Exhibit 10: We value UNSP at Rs4,000 per share
Valuation table for UNSP, Dec 2016 basis, March fiscal year-ends (Rs mn)
Exhibit 11: Summary financials: United Spirits
Profit and loss model, cash flow statement and balance sheet for UNSP, consolidated, March fiscal year-ends (Rs mn)
Dec-16 EBITDA (Rs mn) 22,118
EV/EBITDA 25
EV (Rs mn) 561,809
Net debt (Rs mn) 9,083
Value of assets that could be sold 15,340
Equity value (Rs mn) 568,067
No. of shares (mn) 145.3
Per share equity value 3,910
2010 2011 2012 2013 2014 2015E 2016E 2017E
Profit model
Net revenues 63,999 74,734 92,446 104,986 106,154 93,710 103,610 113,077
EBITDA 11,498 11,620 11,184 13,183 9,856 10,651 18,258 23,405
Other income 591 2,068 2,508 1,563 6,859 1,427 1,754 1,880
Interest expense (6,187) (5,575) (8,757) (9,849) (13,226) (5,496) (3,682) (2,842)
Depreciation (950) (1,023) (1,474) (1,784) (2,026) (1,469) (1,448) (1,518)
Pretax profits 4,952 7,090 3,461 3,113 1,463 5,113 14,882 20,924
Extraordinaries (3,253) 1,246 (108) (2,383) (43,589) (2,000) — —
Tax (1,932) (2,652) (1,481) (1,781) (2,762) (1,687) (4,911) (6,905)
Net income (232) 5,683 1,872 (1,050) (44,888) 1,426 9,971 14,019
Adj. PAT 3,021 4,437 1,980 1,332 (1,299) 3,426 9,971 14,019
Adj. earnings per share (Rs) 20.8 30.6 13.7 9.2 (9.0) 23.6 68.8 96.7
Balance sheet
Total shareholder equity 37,287 41,339 46,618 47,873 30,323 31,149 39,896 52,028
Total borrowings 58,504 67,107 84,446 84,076 84,276 39,784 31,292 23,071
Deferred tax liability (715) (325) (592) (589) (967) (966) (967) (967)
Minority interest 85 175 146 111 7 7 7 7
Total liabilities and equity 95,162 108,295 130,617 131,470 113,640 69,975 70,228 74,140
Net fixed assets 18,194 20,690 28,212 27,957 29,081 14,339 14,329 14,385
Goodwill 42,444 44,320 51,674 52,045 29,019 13,019 13,019 13,019
Investments 1,265 1,544 2,358 2,179 2,380 2,380 2,380 2,380
Cash 7,686 6,370 3,632 2,816 7,047 13,719 15,390 16,262
Net current assets 25,572 35,371 44,740 46,472 46,112 26,518 25,111 28,094
Total assets 95,162 108,295 130,617 131,470 113,640 69,975 70,228 74,140
Free cash flow
Operating cash flow, excl. working capital 8,644 7,263 4,184 2,301 (921) 3,468 9,665 13,658
Working capital changes (4,741) (11,211) (5,036) 7,523 (14,146) 4,930 1,407 (2,984)
Capital expenditure (2,586) (3,519) (6,195) (1,506) (2,288) (1,726) (1,438) (1,574)
Free cash flow 1,317 (7,467) (7,047) 8,318 (17,354) 6,672 9,634 9,100
Ratios
EBITDA Margin(%) 18.0 15.5 12.1 12.6 9.3 11.4 17.6 20.7
RoAE (%) 7.1 8.0 1.2 1.4 12.2 8.0 24.8 27.8
RoACE (%) 6.8 6.5 4.7 3.7 4.5 6.7 16.1 20.3

Moderate reduction in rigs deployed in the shale regions of the US over the past two months
The weekly rig count data disclosed by Baker Hughes suggests a moderate reduction in rigs
deployed in the US over the past two months, reflecting reduction in drilling activities in the
shale regions after the recent sharp correction in global oil prices, which has deteriorated the
economics for US shale players. We expect reduction in rig deployment to continue in the near
term given lower crude prices, which will result in moderation of growth in US shale oil
production—essential to provide a balance to the global oil supply-demand. Exhibits 1-3 show
(1) 11-15% reduction in rigs deployed in key shale regions of Eagle Ford, Permian and Williston,
(2) 9% reduction in rigs deployed in horizontal drilling activities and (3) 13% reduction in rigs
deployed in oil wells, over the past two months. Exhibit 4 shows that rigs deployed in the US
shale regions had declined significantly in 1HCY09 after a sharp decline in global oil prices; we
expect a similar reduction over the next few months.
Canadian crude price have fallen to cash cost of oil sands production
We also see the possibility of curtailment of oil sands production in the near term and note that
Western Canada Select crude price has declined to US$34/bbl (see Exhibit 5), near the direct
cash cost of production of US$31-34/bbl for oil sands (Suncor’s guidance). We note that oil
sands contribute to about 2 mn b/d of crude oil production. Exhibit 6 shows Suncor’s cash cost
of production (ex-royalty) has been around US$40/bbl.
IEA estimates an increase in call on OPEC crude to nearly 30 mn b/d in 2HCY15
IEA’s supply-demand forecasts suggest an increase in call on OPEC crude production to nearly
30 mn b/d in 2HCY15, after a recent cut in non-OPEC production estimates (see Exhibit 7). We
expect moderation of growth in non-OPEC crude supply, which may increase the call on OPEC
crude. Ongoing issues in Libya and build-up of China’s strategic reserves may also help in
reducing excess barrels in the near term. Media articles suggest that crude oil production in
Libya declined to 0.2 mn b/d currently from 0.9 mn b/d in October 2014. China’s crude imports
increased sharply to 7.2 mn b/d in December 2014 versus an average of 6.2 mn b/d in CY2014,
presumably reflecting a build-up in strategic reserves.
Upstream stocks and GAIL are discounting recovery in crude prices to US$60-70/bbl
We see recovery in oil prices to US$60-70/bbl as the sweet spot for upstream companies and
GAIL, as it will provide some comfort regarding their profitability. However, current stock prices
are discounting a higher crude price scenario, in our view. Exhibit 8 shows that these stocks
have corrected modestly compared to a rather sharp decline in crude prices. Exhibit 9 shows our
FY2016 EPS estimates of ONGC, OIL, Cairn and GAIL at various levels of crude oil prices. ONGC
and OIL stocks trade at 10.6X and 8.5X FY2016E EPS, assuming Dated Brent crude price of
US$60/bbl and nil burden of subsidy. GAIL trades at 13.4X FY2016E EPS assuming Dated Brent
crude price of US$70/bbl and nil subsidies. Exhibit 10 shows our fair valuation of Cairn India at
various crude prices; the current stock price discounts US$74/bbl of Dated Brent crude price,
assuming 1.5 bn bbls of gross recoverable reserves from the Rajasthan block.
Energy
India
Floored but may rise. We believe global crude oil prices are unlikely to fall further as
we see near-term curtailment in production of high-cost shale oil in the US and oil
sands in Canada, which may reduce the current excess supply. IEA’s current supply-
demand estimates also suggest the call on OPEC crude will increase to nearly 30 mn b/d
(current production quota) in 2HCY15. We see recovery in oil prices to US$60-70/bbl
over the next 12 months; however, the stocks are already discounting that.
CAUTIOUS
JANUARY 21, 2015
UPDATE
BSE-30: 28,785
QUICK NUMBERS
 11-15% fall in rig
count in US shale
basins over the past
two months
 Canadian crude
trades at US$34/bbl,
near cash cost of
production
 IEA expects call on
OPEC crude to
increase to ~30 mn
b/d in 2HCY15

India Energy
Exhibit 1: The number of rigs deployed in key shale-oil producing basins has declined in recent weeks
Weekly rig count in key shale-oil producing basins in the US, January 2014-January 2015 (units)
Source: Baker Hughes, Kotak Institutional Equities
Exhibit 2: The number of rigs deployed in horizontal drilling has declined in recent weeks
Weekly rig count by type of drilling, January 2014-January 2015 (units)
-
100
200
300
400
500
600
700
800
900
1,000
1,100
Jan-14
Feb-14
Mar-14
Apr-14
May-
14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Eagle Ford Permian Williston
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Directional Vertical Horizontal

Energy India
Exhibit 3: The number of rigs deployed in oil wells has fallen in recent weeks
Weekly rig count across oil and gas wells, January 2014-January 2015 (units)
Exhibit 4: The number of rigs deployed in the US shale regions fell significantly in 1HCY09 after a
correction in crude prices; we expect a similar reduction over the next few months
Monthly rig count in the US shale regions versus crude price (units, US$/bbl)
Source: EIA, Kotak Institutional Equities
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Gas Oil
-
20
40
60
80
100
120
140
160
-
150
300
450
600
750
900
1,050
1,200
1,350
1,500
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
US shale rig count [LHS] Dated Brent (US$/bbl) [RHS]

India Energy
Exhibit 5: Canadian oil sands crude trades at a significant discount to WTI and Dated Brent
WTI, Western Canada Select and Dated Brent, September 2014-January 2015 (US$/bbl)
Source: Bloomberg, Kotak Institutional Equities
Exhibit 6: Direct cost of crude oil production from Suncor oil sands is US$35-40/bbl
Direct cost of crude oil production from Suncor oil sands, calendar year-ends, 2003-14YTD (US$/bbl)
0
20
40
60
80
100
120
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
WTI Western Canada crude Dated Brent
8
10
16
21
25
36
33
38
42 41 40
36
-
10
20
30
40
50
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9M14
Direct cost of production
(US$/bbl)

Energy India
Exhibit 7: IEA estimates an increase in call on OPEC crude to nearly 30 mn b/d in 2HCY15
IEA's quarterly supply-demand forecast, 2014-15
Source: IEA, Kotak Institutional Equities estimates
Exhibit 8: A modest correction in stocks compared to a sharp decline in oil prices
Dated Brent versus upstream stocks and GAIL, September 2014-January 2015 (%)
Source: Bloomberg, Kotak Institutional Equities
1QCY14 2QCY14 3QCY14 4QCY14 CY2014 1QCY15 2QCY15 3QCY15 4QCY15 CY2015
Demand (mn b/d)
Total demand 91.7 91.6 93.1 93.4 92.4 92.5 92.5 94.0 94.4 93.3
Yoy growth 1.1 0.3 0.5 0.6 0.6 0.8 0.9 0.9 1.0 0.9
Supply (mn b/d)
Non-OPEC 55.7 56.4 56.8 57.3 56.6 57.1 57.4 57.4 58.0 57.5
Yoy growth 1.9 2.3 2.0 1.5 2.0 1.4 1.0 0.6 0.7 0.9
OPEC
Crude 30.0 30.1 30.5 30.5 30.3 28.8 28.4 29.9 29.7 29.1
NGLs 6.3 6.4 6.5 6.5 6.4 6.6 6.7 6.7 6.7 6.7
Total OPEC 36.3 36.5 37.0 37.0 36.7 35.4 35.1 36.6 36.4 35.8
Total supply 92.0 92.9 93.8 94.3 93.3 92.5 92.5 94.0 94.4 93.3
Total stock change 0.4 1.3 0.7 0.9 0.8
40
50
60
70
80
90
100
110
120
Sep-14
Oct-14
Oct-14
Nov-14
Dec-14
ONGC OIL Cairn India GAIL Dated Brent

India Energy
Exhibit 9: Stocks are discounting US$60-70/bbl of crude price
Earnings sensitivity to crude prices, March fiscal year-end, 2016E
Exhibit 10: Cairn India stock is discounting US$74/bbl of crude price
Crude price discounted at various levels of stock price of Cairn
Dated Brent crude price (US$/bbl) 50 60 70
Fuel subsidies (Rs bn) 129 249 395
ONGC
Assuming 40% burden on upstream
Net realizations (US$/bbl) 46 51 55
EPS (Rs) 20 27 33
Assuming nil subsidies on upstream
EPS (Rs) 24 33 42
OIL
Assuming 40% burden on upstream
EPS (Rs) 42 51 58
Assuming nil subsidies on upstream
EPS (Rs) 48 63 78
Cairn
EPS (Rs) 14 22 29
GAIL (a)
EPS (Rs) 21 27 33
Notes:
(a) We assume nil subsidy burden on GAIL.
Stock price Crude price discounted
(Rs/share) (US$/bbl)
315 93
300 90
285 86
270 82
255 79
240 76
225 72
210 69
195 65
180 62
165 58
Notes:
(a) Long-term exchange rate assumption of Rs65/US$.
(b) We assume 2% inflation in oil price in the long term.

IndiaDailySummary-January21,2015
21KOTAKINSTITUTIONALEQUITIESRESEARCH
December 2014: Results calendar
Mon Tue Wed Thu Fri Sat Sun
19-Jan 20-Jan 21-Jan 22-Jan 23-Jan 24-Jan
GRUH BASF INGVYSYA BANK BIOCON BHARAT ELECTRONICS CITY UNION BANK
INDIABULL HOUSING FINANCE HINDUSTAN MEDIA VENTURES ITC CAIRN COLGATE-PALMOLIVE GATI
HINDUSTAN UNILVR IGARASHI L&T FINANCE DISH TV COROMANDEL PERSISTENT
HINDUSTAN ZINC KIRLOSKAR OIL RAYMOND MASTEK EDELWEISS Shriram Transport
MINDTREE KOTAK BANK ZEE ENTERTAINMENT MUTHOOTFIN ULTRATECH CEMENT TATA COFFEE
NAUKRI RALLIS POLARIS WABCO INDIA United Spirits
TATASPONGE SOUTHBANK PRESTIGE
HFCL ZEEMEDIA
26-Jan 27-Jan 28-Jan 29-Jan 30-Jan 31-Jan
AMARAJABAT ABAN ASHOK LEY ADANIENT GRASIM INDUSTRIES
CHENN PETRO Adani Port and SEZ ASIAN PAINT ANDHRABANK TORNT POWER
CHOLA FINANCE Adani Pow er Carborundum Universal BANK BARODA
GODREJ PROP HAVELLS DR REDDY BERGER PAINT
GSFC JUST DIAL HCC DABUR
IDEA JYOTHY LAB HDFC HCL TECH
KARNATAKA BANK Pidilite Industries IDFC ICICI BANK
MARUTI RANBAXY LABORATORIES KARURVYSYA JSW STEEL
TITAN STATE BANK OF BIKANER Sesa Sterlite MAHINDRA LIFESPACE
UNION BANK TORRENT PHARMACEUTICALS SHRIRAM CITY MONSANTO
SKSMICRO SHOPER STOP
TRENT SIEMENS
SSLT
SUN TV
TATA GLOBAL
TECH MAHINDRA
TERMAX
2-Feb 3-Feb 4-Feb 5-Feb 6-Feb 7-Feb
GICHSGFIN ACC Bharti Airtel GODREJ CONSUMER Apollo Tyres GIPCL
BRITANNIA CENTRALBK Balaji Tele JK CEMENT
Britannia Industries GUJARAT PIPAVAV PORT LTD CHAMBL FERT
DEEPAK FERT Magma Fincorp Tata Steel
GlaxoSmithKline Consumer NOVARTIND TATACHEM
GSKCONS TATA POWER
HERO MOTO
LUPIN
PFC
PNB
SHREE CEMENT
TBZ
TVSMOTOR
AURO LAB ABB GODREJIND GILLETTE MPHASIS
CARE RATING Mahindra & Mahindra
MOTHERSUMI
AMBUJA CEMENTS
Source: BSE, Kotak Institutional Equities

KOTAKINSTITUTIONALEQUITIESRESEARCH22
IndiaDailySummary-January2
Kotak Institutional Equities: Valuation summary of KIE Universe stocks
Target O/S
Price (Rs) price Upside Mkt cap. shares EPS (Rs) EPS growth (%) PER (X) EV/EBITDA (X) ADVT-3mo
Company Rating 20-Jan-15 (Rs) (%) (Rs mn) (US$ mn) (mn) 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E (US$ mn)
Automobiles
Amara Raja Batteries SELL 837 550 (34.3) 142,953 2,315 171 24.4 29.9 35.4 13.6 22.5 18.4 34.2 28.0 23.6 20.7 17.2 14.9 8.5 6.9 5.6 0.6 0.7 0.8 27.4 27.2 26.3 4.2
Apollo Tyres BUY 235 250 6.3 119,748 1,939 509 22.1 23.6 24.8 4.2 6.4 5.4 10.6 10.0 9.5 6.0 6.1 5.9 2.1 1.8 1.5 0.4 0.4 0.4 22.0 19.3 17.1 12.3
Ashok Leyland SELL 61 40 (34.5) 173,883 2,816 2,848 0.4 1.9 2.7 121.2 401.7 42.0 160.7 32.0 22.6 23.2 14.8 12.1 3.3 3.1 2.9 — 1.4 2.0 2.2 10.0 13.5 16.9
Bajaj Auto ADD 2,404 2,650 10.2 695,711 11,266 289 110.5 135.0 156.4 (1.4) 22.2 15.9 21.8 17.8 15.4 15.4 13.7 12.2 6.2 5.2 4.4 1.8 2.2 2.6 30.6 31.6 31.0 15.9
Bharat Forge SELL 1,008 630 (37.5) 234,727 3,801 237 29.5 35.9 42.2 40.5 21.7 17.3 34.2 28.1 23.9 17.6 15.1 13.3 7.4 6.1 5.1 0.6 0.7 0.8 23.7 23.9 23.4 14.6
Eicher Motors SELL 15,491 9,000 (41.9) 419,872 6,799 27 238.0 380.8 483.2 63.3 60.0 26.9 65.1 40.7 32.1 36.5 23.6 18.8 16.0 11.8 8.8 0.2 0.2 0.2 27.5 33.4 31.4 13.3
Exide Industries REDUCE 180 160 (11.1) 152,915 2,476 850 7.1 8.9 10.3 24.2 24.9 15.9 25.3 20.2 17.5 15.8 13.0 11.4 3.7 3.3 2.9 1.4 1.4 1.4 15.5 17.4 17.9 7.4
Hero Motocorp BUY 2,829 3,650 29.0 564,846 9,147 200 146.2 195.5 230.6 38.4 33.8 18.0 19.4 14.5 12.3 15.0 11.2 9.9 8.3 6.8 5.5 2.6 3.5 4.1 47.0 51.6 49.7 32.5
Mahindra CIE Automotive BUY 234 280 19.6 75,581 1,224 323 1.2 5.0 9.6 (63.1) 305.0 90.5 188.9 46.6 24.5 19.3 14.0 10.3 5.4 4.8 4.0 — — — 2.9 10.9 17.9 2.3
Mahindra & Mahindra REDUCE 1,325 1,275 (3.8) 823,103 13,329 562 58.7 63.4 79.1 (14.3) 7.9 24.8 22.6 20.9 16.8 17.7 16.7 13.6 4.2 3.9 3.5 0.5 0.7 1.3 18.9 19.3 22.1 20.9
Maruti Suzuki BUY 3,606 4,000 10.9 1,089,165 17,637 302 117.2 189.4 249.5 27.2 61.6 31.7 30.8 19.0 14.4 17.8 12.0 9.3 4.6 4.0 3.3 0.8 1.3 1.7 15.9 22.4 25.0 17.7
Motherson Sumi Systems REDUCE 451 370 (17.9) 397,303 6,434 882 9.7 15.5 22.6 (4.2) 59.2 45.7 46.3 29.1 20.0 15.0 10.9 8.0 10.6 7.8 5.6 0.6 1.0 1.5 25.6 30.9 32.6 15.7
Tata Motors BUY 559 680 21.6 1,677,623 27,166 3,218 51.9 69.1 79.6 11.6 33.1 15.2 10.8 8.1 7.0 5.1 4.2 3.6 2.2 1.7 1.4 — — — 22.6 23.8 21.8 39.8
WABCO India ADD 5,133 4,900 (4.5) 97,355 1,577 19 72.7 130.4 159.9 25.3 79.5 22.6 70.6 39.4 32.1 43.3 25.1 20.5 11.2 9.3 7.7 0.2 0.6 0.8 17.0 25.9 26.3 0.6
Automobiles Attractive 6,664,783 107,925 12.7 34.1 19.9 19.4 14.5 12.1 10.2 8.2 7.0 3.9 3.2 2.6 0.7 1.0 1.3 20.1 22.2 21.9 214.0
Banks/Financial Institutions
Axis Bank ADD 551 550 (0.3) 1,303,396 21,106 2,349 31.7 35.8 41.1 19.9 12.7 14.9 17.4 15.4 13.4 — — — 2.9 2.5 2.2 1.0 1.1 1.3 18.1 17.7 17.6 32.2
Bajaj Finserv ADD 1,322 1,410 6.7 210,356 3,406 159 103.3 115.5 129.6 7.2 11.8 12.2 12.8 11.4 10.2 — — — 2.1 1.8 1.5 1.0 1.0 1.0 17.1 16.9 16.2 2.1
Bank of Baroda ADD 1,087 1,050 (3.4) 466,688 7,557 431 111.0 133.9 167.4 5.3 20.7 25.0 9.8 8.1 6.5 — — — 1.2 1.1 1.0 2.1 2.5 3.1 13.0 14.1 15.8 18.3
Bank of India ADD 297 320 7.7 190,784 3,089 643 58.6 65.7 89.9 38.0 12.1 36.8 5.1 4.5 3.3 — — — 0.6 0.5 0.5 2.3 2.6 3.6 13.5 13.5 16.2 17.1
Cholamandalam ADD 500 500 (0.1) 71,873 1,164 155 27.3 36.2 44.0 6.6 32.6 21.6 18.3 13.8 11.4 — — — 2.5 2.2 1.9 0.9 1.1 1.4 15.8 16.8 17.8 1.5
City Union Bank ADD 95 105 10.0 56,905 921 589 7.2 7.9 9.0 13.0 9.3 14.0 13.2 12.1 10.6 — — — 2.1 1.8 1.6 1.2 1.3 1.5 17.9 16.0 16.0 1.2
DCB Bank BUY 118 140 18.5 33,258 539 281 6.5 7.9 9.7 7.1 22.1 23.0 18.2 14.9 12.2 — — — 2.1 1.8 1.6 - - - 13.8 13.5 14.5 3.2
Dewan Housing Finance BUY 480 540 12.4 61,804 1,001 128 50.5 58.6 67.9 21.9 15.9 15.9 9.5 8.2 7.1 — — — 1.5 1.3 1.1 1.2 1.4 1.6 16.8 16.9 16.9 8.5
Federal Bank BUY 145 160 10.5 123,947 2,007 855 11.5 13.4 15.8 17.5 16.5 17.9 12.6 10.8 9.1 — — — 1.6 1.4 1.3 1.6 1.9 2.2 13.4 14.1 14.9 8.7
HDFC ADD 1,252 1,210 (3.3) 1,967,504 31,860 1,561 41.3 48.1 56.9 18.4 16.4 18.4 30.3 26.0 22.0 — — — 6.8 6.1 5.4 1.4 1.6 1.9 21.8 22.6 23.7 39.6
HDFC Bank ADD 1,021 1,000 (2.1) 2,468,052 39,966 2,399 43.1 51.7 60.4 22.0 19.8 16.9 23.7 19.8 16.9 — — — 4.8 4.0 3.4 0.8 1.0 1.1 21.8 22.0 21.7 29.8
ICICI Bank BUY 368 400 8.8 2,130,013 34,492 5,775 19.0 22.3 26.0 12.0 17.2 16.7 19.3 16.5 14.1 — — — 2.6 2.4 2.2 1.6 1.8 2.1 14.3 15.2 16.1 65.8
IDFC BUY 171 200 16.7 272,698 4,416 1,585 10.1 9.1 11.9 (16.0) (10.3) 31.8 17.0 18.9 14.4 — — — 1.6 1.5 1.3 1.1 0.5 0.6 10.0 8.1 9.8 17.0
IIFL Holdings BUY 171 175 2.3 52,393 848 296 14.0 16.5 19.2 49.3 17.5 16.7 12.2 10.4 8.9 — — — 2.0 1.8 1.6 2.1 2.5 2.9 18.5 19.1 19.6 0.4
IndusInd Bank ADD 840 870 3.5 444,644 7,200 526 34.0 42.0 48.6 26.8 23.7 15.6 24.7 20.0 17.3 — — — 4.2 3.6 3.0 0.5 0.7 0.8 19.3 19.9 19.5 11.5
J&K Bank REDUCE 154 135 (12.4) 74,729 1,210 485 7.3 10.0 11.5 (70.1) 37.6 14.7 21.1 15.4 13.4 — — — 1.2 1.2 1.1 1.0 1.3 1.5 6.0 7.9 8.5 1.9
Karur Vysya Bank BUY 600 620 3.3 72,536 1,175 121 48.0 65.0 77.1 19.8 35.4 18.6 12.5 9.2 7.8 — — — 1.7 1.5 1.3 2.0 2.7 3.2 15.1 16.9 17.7 1.3
L&T Finance Holdings ADD 69 80 16.5 118,041 1,911 1,718 4.9 5.6 6.9 42.9 13.6 22.1 13.9 12.2 10.0 — — — 1.9 1.6 1.4 2.2 1.2 1.2 13.9 14.2 15.3 5.2
LIC Housing Finance ADD 490 470 (4.2) 247,512 4,008 505 30.6 36.7 43.7 17.2 20.1 19.0 16.0 13.4 11.2 — — — 3.0 2.6 2.2 1.1 1.3 1.5 18.9 19.5 19.8 25.1
Magma Fincorp ADD 110 135 23.2 20,856 338 190 9.5 12.0 13.5 32.3 26.5 13.0 11.6 9.1 8.1 — — — 1.3 1.1 1.0 1.4 1.7 1.9 11.2 13.3 13.8 0.2
Mahindra & Mahindra Financial SELL 275 260 (5.6) 156,666 2,537 564 15.3 18.5 23.2 (2.8) 21.2 25.2 18.0 14.9 11.9 — — — 2.7 2.4 2.1 1.3 1.6 2.0 15.9 17.1 18.8 7.5
Max India ADD 418 450 7.6 111,407 1,804 266 7.8 10.5 13.9 48.1 35.9 31.9 53.9 39.6 30.1 — — — 3.1 2.7 2.3 1.3 1.7 2.3 6.3 7.3 8.2 3.3
Muthoot Finance BUY 217 235 8.4 86,244 1,397 397 18.3 22.5 27.7 (12.9) 23.1 23.2 11.9 9.6 7.8 — — — 1.7 1.5 1.3 2.5 3.1 3.8 15.4 16.4 18.1 1.1
Oriental Bank of Commerce ADD 329 300 (8.7) 98,545 1,596 300 42.5 51.4 61.5 11.8 20.9 19.8 7.7 6.4 5.3 — — — 0.7 0.6 0.6 2.6 3.1 3.7 9.2 10.3 11.4 10.3
PFC ADD 290 330 13.9 382,548 6,195 1,319 45.2 43.4 45.4 10.2 (4.1) 4.6 6.4 6.7 6.4 — — — 1.2 1.1 0.9 3.4 3.3 3.4 20.2 16.9 15.6 14.6
Punjab National Bank REDUCE 209 180 (14.0) 378,816 6,134 1,810 24.8 28.6 33.0 34.2 15.4 15.4 8.4 7.3 6.3 — — — 1.0 1.0 0.9 6.4 7.4 8.5 12.7 13.9 15.3 20.0
Rural Electrification Corp. ADD 322 350 8.7 317,814 5,146 987 55.1 54.0 55.4 16.1 (2.0) 2.6 5.8 6.0 5.8 — — — 1.3 1.1 1.0 3.4 3.6 3.7 23.7 19.6 17.5 15.4
Shriram City Union Finance REDUCE 2,050 1,550 (24.4) 135,106 2,188 66 89.7 113.9 131.8 4.1 26.9 15.8 22.8 18.0 15.6 — — — 3.2 2.8 2.4 0.5 0.6 0.7 16.6 16.5 16.6 1.2
Shriram Transport ADD 1,124 1,150 2.3 255,084 4,131 223 63.6 82.4 99.8 12.3 29.5 21.2 17.7 13.6 11.3 — — — 2.7 2.3 2.0 0.8 1.0 1.2 16.0 18.0 18.7 13.2
SKS Microfinance ADD 460 400 (13.1) 58,033 940 126 16.4 20.2 27.4 154.2 23.0 35.3 28.0 22.8 16.8 — — — 5.4 4.4 3.5 - - - 27.2 21.4 23.1 16.7
State Bank of India ADD 318 330 3.7 2,375,222 38,463 7,466 18.8 21.6 26.9 28.8 15.2 24.1 16.9 14.7 11.8 — — — 1.8 1.7 1.5 1.0 1.0 1.1 11.3 11.9 13.3 90.9
YES Bank ADD 858 800 (6.8) 358,151 5,800 414 48.1 53.4 63.7 7.2 11.1 19.2 17.9 16.1 13.5 — — — 3.0 2.6 2.3 1.0 1.1 1.3 21.2 17.6 18.2 34.4
Banks/Financial Institutions Attractive 15,471,412 250,534 18.2 14.5 18.4 15.6 13.7 11.5 2.2 2.0 1.8 1.4 1.6 1.9 14.2 14.6 15.3 552.3
Price/BV (X) Dividend yield (%) RoE (%)
Source: Company, Bloomberg, Kotak Institutional Equities estimates

Target O/S
Cement
ACC SELL 1,544 1,280 (17.1) 289,935 4,695 188 50.4 68.8 90.5 7.6 36.6 31.5 30.7 22.4 17.1 17.4 12.1 9.0 3.4 3.1 2.7 1.5 1.5 1.5 11.6 14.6 17.1 8.3
Ambuja Cements SELL 247 205 (17.1) 383,097 6,204 1,522 9.1 11.5 14.3 35.2 26.3 23.5 27.0 21.4 17.3 17.2 13.6 10.6 3.5 3.3 2.8 1.2 1.4 1.6 13.3 15.7 17.4 6.2
Grasim Industries ADD 3,692 3,590 (2.8) 339,065 5,491 92 203.9 260.2 355.0 (4.0) 27.6 36.4 18.1 14.2 10.4 7.3 5.2 3.5 1.5 1.3 1.2 1.0 1.0 1.0 8.4 9.9 12.2 4.2
India Cements REDUCE 102 100 (1.7) 31,255 506 307 2.8 6.2 12.8 224.0 126.9 104.4 37.0 16.3 8.0 8.5 7.0 5.6 0.8 0.8 0.8 2.7 2.6 2.6 2.2 5.0 9.8 4.6
Shree Cement SELL 10,500 6,400 (39.0) 365,791 5,923 35 255.1 374.3 480.5 8.1 46.7 28.4 41.2 28.1 21.9 20.6 15.5 12.5 6.9 5.6 4.6 0.2 0.2 0.2 18.0 22.1 23.1 1.6
UltraTech Cement SELL 3,096 2,300 (25.7) 849,677 13,759 274 81.6 103.4 141.7 9.2 26.7 37.1 38.0 29.9 21.9 20.3 15.0 11.5 4.5 3.9 3.4 0.3 0.3 0.3 12.4 14.0 16.6 10.5
Cement Cautious 2,258,821 36,578 11.4 31.7 33.9 30.4 23.1 17.3 14.7 11.0 8.3 3.2 2.9 2.5 0.8 0.8 0.8 10.5 12.5 14.6 35.5
Consumer products
Asian Paints REDUCE 839 750 (10.6) 804,959 13,035 959 16.4 21.9 24.9 27.7 33.7 13.9 51.3 38.4 33.7 32.5 24.1 21.2 16.6 13.3 10.9 0.8 0.9 1.1 35.3 38.4 35.5 20.5
Bajaj Corp. BUY 420 495 17.8 61,994 1,004 148 14.9 19.0 22.3 23.6 27.4 17.7 28.3 22.2 18.8 24.8 18.8 14.9 12.6 10.7 8.9 2.7 2.0 2.6 43.3 52.1 51.5 2.7
Britannia Industries BUY 1,921 2,050 6.7 230,348 3,730 120 48.3 61.0 70.8 46.5 26.1 16.2 39.7 31.5 27.1 25.5 20.2 17.3 17.9 13.2 10.2 0.8 1.0 1.2 55.6 48.2 42.4 4.7
Colgate-Palmolive (India) ADD 1,926 1,970 2.3 261,922 4,241 136 42.2 51.0 60.3 16.9 20.9 18.2 45.7 37.8 32.0 31.2 25.2 20.8 40.2 35.8 31.7 1.7 1.9 2.3 91.7 100.2 105.2 5.9
Dabur India ADD 254 260 2.3 446,418 7,229 1,744 6.1 7.8 9.0 18.0 26.6 15.3 41.5 32.7 28.4 32.7 25.8 22.0 13.4 10.9 8.9 0.9 1.1 1.3 35.9 36.7 34.5 5.2
GlaxoSmithKline Consumer REDUCE 5,672 5,800 2.3 238,543 3,863 42 142.1 166.7 192.6 (11.5) 17.4 15.5 39.9 34.0 29.4 29.7 24.0 20.1 11.0 9.3 8.0 0.9 1.1 1.3 30.0 29.7 29.2 1.1
Godrej Consumer Products REDUCE 1,082 960 (11.3) 368,343 5,965 340 26.1 32.7 38.3 17.0 25.3 16.8 41.4 33.0 28.3 27.9 22.1 18.5 8.3 7.1 6.1 0.6 0.7 0.9 21.7 23.2 23.2 2.8
Hindustan Unilever REDUCE 895 800 (10.7) 1,937,066 31,368 2,163 18.1 21.4 23.8 10.1 18.0 11.5 49.5 41.9 37.6 36.1 29.5 26.0 47.8 40.6 35.1 1.6 1.7 1.9 106.9 104.7 100.2 20.4
ITC ADD 371 410 10.5 2,967,106 48,047 8,096 12.2 14.1 16.1 14.1 15.4 14.4 30.4 26.4 23.1 20.0 17.0 14.5 10.3 9.2 8.2 2.0 2.2 2.6 31.8 33.0 36.1 43.2
Jubilant Foodworks SELL 1,382 1,100 (20.4) 90,605 1,467 66 18.0 25.8 36.2 17.4 43.2 40.3 76.8 53.6 38.2 35.0 25.1 18.1 13.6 10.9 8.5 — — 0.1 19.5 22.6 25.2 5.8
Jyothy Laboratories REDUCE 274 250 (8.7) 49,555 802 181 9.5 11.6 15.2 102.4 22.2 30.2 28.8 23.5 18.1 26.7 19.0 16.1 6.1 5.3 5.1 1.1 1.3 1.5 22.3 24.1 28.8 0.9
Marico BUY 351 370 5.4 226,458 3,667 645 9.2 11.9 13.6 16.1 30.3 14.0 38.3 29.4 25.8 25.4 19.5 16.8 12.8 9.9 7.9 0.7 0.9 1.1 37.8 38.0 34.2 7.0
Nestle India REDUCE 7,075 5,950 (15.9) 682,093 11,045 96 121.9 159.4 185.9 6.5 30.8 16.6 58.0 44.4 38.1 32.8 25.9 23.2 22.8 17.8 14.4 0.7 0.9 1.1 46.0 46.9 43.4 2.6
Page Industries SELL 11,601 7,500 (35.4) 129,399 2,095 11 180.6 223.2 273.6 31.0 23.6 22.6 64.2 52.0 42.4 40.2 32.6 26.6 33.0 24.4 17.8 0.7 0.7 0.7 59.2 54.0 48.6 3.0
Pidilite Industries ADD 579 540 (6.7) 296,678 4,804 513 11.4 15.7 18.3 27.7 38.1 16.9 50.9 36.9 31.6 34.6 24.7 20.7 12.8 10.5 8.8 0.6 0.8 1.0 27.3 31.4 30.3 4.0
Speciality Restaurants REDUCE 187 175 (6.4) 8,783 142 47 2.6 4.0 6.3 (34.8) 53.6 55.8 71.3 46.4 29.8 24.3 16.6 11.5 2.8 2.6 2.4 0.5 0.5 0.7 4.0 5.8 8.4 0.3
Tata Global Beverages REDUCE 156 160 2.3 96,687 1,566 631 6.5 7.7 8.8 18.3 18.1 15.0 24.1 20.4 17.7 12.4 10.9 9.5 1.6 1.5 1.5 1.4 1.6 1.9 6.9 7.8 8.5 6.2
Titan Company REDUCE 394 350 (11.1) 349,433 5,658 888 9.4 11.1 13.0 11.1 18.4 16.8 42.0 35.5 30.4 28.6 22.7 19.4 11.4 9.6 8.2 0.7 1.0 1.3 29.7 29.4 29.2 6.6
United Breweries SELL 943 650 (31.1) 249,308 4,037 264 10.1 13.6 17.4 18.1 34.0 28.7 93.2 69.6 54.1 38.1 31.8 26.6 13.5 11.6 9.9 0.2 0.2 0.3 15.0 17.9 19.7 3.4
United Spirits BUY 3,365 4,000 18.9 489,028 7,919 145 23.6 68.6 96.5 363.1 191.1 40.6 142.7 49.0 34.9 48.3 27.6 21.2 15.7 12.3 9.4 0.1 0.2 0.3 11.1 28.1 30.5 14.3
Consumer products Neutral 9,984,725 161,686 17.7 23.7 16.4 41.5 33.6 28.9 27.5 22.1 18.8 13.5 11.6 9.9 1.3 1.5 1.7 32.6 34.5 34.5 160.5
Energy
Aban Offshore RS 507 — — 28,851 467 57 99.6 106.8 110.5 18.8 7.2 3.5 5.1 4.8 4.6 6.7 6.2 5.9 0.6 0.5 0.5 1.4 1.2 1.2 12.3 11.4 10.7 15.6
Bharat Petroleum ADD 648 800 23.5 468,306 7,583 723 44.2 56.3 58.8 (21.2) 27.3 4.4 14.6 11.5 11.0 7.6 6.1 5.9 2.2 1.9 1.7 2.1 2.6 2.7 15.6 17.9 16.7 19.4
Cairn India REDUCE 240 255 6.4 449,116 7,273 1,875 40.4 28.6 25.8 (38.0) (29.1) (9.8) 5.9 8.4 9.3 4.3 5.3 4.5 0.7 0.7 0.7 3.4 2.5 2.5 12.8 8.6 7.3 11.4
Castrol India SELL 500 300 (39.9) 247,033 4,000 495 10.0 11.4 12.6 (0.2) 14.3 10.5 50.2 43.9 39.7 33.3 29.1 26.2 46.0 43.7 41.5 1.6 1.8 2.0 76.5 102.1 107.3 4.0
GAIL (India) ADD 431 460 6.6 547,158 8,860 1,268 27.8 26.9 34.4 (14.9) (3.2) 27.9 15.5 16.0 12.5 11.0 10.2 8.0 1.9 1.8 1.6 1.9 2.0 2.8 12.5 11.3 13.4 14.4
GSPL ADD 122 105 (13.9) 68,636 1,111 563 7.5 8.7 10.0 0.9 15.5 15.3 16.2 14.0 12.2 7.6 6.7 5.8 1.9 1.7 1.6 1.2 2.1 3.3 12.1 12.7 13.6 3.6
Hindustan Petroleum REDUCE 565 540 (4.4) 191,341 3,098 339 46.3 57.8 58.2 (9.6) 24.9 0.7 12.2 9.8 9.7 10.2 7.4 6.6 1.2 1.1 1.0 2.5 3.1 3.1 10.1 11.8 11.0 19.5
Indian Oil Corporation ADD 337 375 11.4 817,613 13,240 2,428 16.2 34.1 37.0 (33.2) 110.5 8.6 20.8 9.9 9.1 11.1 5.8 4.9 1.2 1.1 1.0 1.8 3.3 3.6 5.8 11.5 11.5 7.8
Oil & Natural Gas Corporation ADD 350 365 4.2 2,996,988 48,531 8,556 28.8 33.0 38.4 (7.4) 14.8 16.4 12.2 10.6 9.1 5.2 4.4 3.8 1.6 1.5 1.4 2.9 3.6 4.1 13.6 14.5 15.5 30.5
Oil India ADD 537 615 14.5 322,900 5,229 601 49.5 58.3 65.3 (0.3) 18.0 12.0 10.9 9.2 8.2 7.1 5.7 5.1 1.5 1.3 1.2 3.7 4.5 5.0 13.8 15.2 15.7 4.0
Petronet LNG REDUCE 196 190 (2.9) 146,813 2,377 750 10.9 12.5 15.4 14.8 14.9 23.0 18.0 15.6 12.7 9.9 9.2 7.6 2.6 2.3 2.1 1.1 1.7 2.3 15.4 15.9 17.4 5.1
Reliance Industries ADD 903 1,000 10.7 2,653,175 42,964 3,233 68.4 73.4 87.4 0.6 7.3 19.1 13.2 12.3 10.3 10.2 9.3 6.4 1.4 1.2 1.1 1.0 1.1 1.4 10.7 10.5 11.4 51.9
Energy Cautious 8,937,930 144,735 (12.2) 13.1 13.9 12.5 11.0 9.7 7.5 6.4 5.2 1.4 1.3 1.2 2.1 2.6 3.0 11.3 11.8 12.3 187.1

KOTAKINSTITUTIONALEQUITIESRESEARCH24
IndiaDailySummary-January2
Target O/S
Industrials
ABB SELL 1,274 700 (45.1) 270,035 4,373 212 11.6 24.0 32.2 38.6 107.4 34.3 110.2 53.1 39.5 58.8 33.5 26.4 9.5 8.3 7.0 0.3 0.3 0.3 8.9 16.7 19.2 2.5
Bharat Heavy Electricals SELL 281 200 (28.9) 688,388 11,147 2,448 11.6 13.7 15.9 (18.1) 18.0 16.6 24.3 20.6 17.6 16.0 12.4 9.3 2.0 1.8 1.7 0.9 1.0 1.2 8.3 9.2 10.0 21.2
Crompton Greaves BUY 193 210 8.8 120,962 1,959 627 5.7 9.2 13.1 45.7 61.3 42.5 34.0 21.1 14.8 17.0 12.3 9.2 3.1 2.6 2.3 0.7 0.8 0.9 9.4 13.4 16.3 19.4
Cummins India REDUCE 885 720 (18.7) 245,405 3,974 277 26.7 32.6 43.7 25.3 21.9 34.2 33.1 27.2 20.3 30.2 21.6 15.8 8.3 7.1 6.0 1.3 1.5 2.0 26.7 28.1 32.0 3.0
Kalpataru Power Transmission ADD 233 200 (14.2) 35,772 579 153 9.9 8.7 11.6 24.3 (12.4) 33.3 23.5 26.9 20.2 9.1 7.7 6.7 1.6 1.5 1.4 0.6 0.6 0.6 7.0 5.8 7.4 2.0
KEC International ADD 92 115 25.7 23,524 381 257 4.5 8.5 12.1 37.6 87.6 41.8 20.1 10.7 7.6 7.9 6.1 4.9 1.6 1.5 1.3 1.1 2.2 3.1 8.9 14.5 18.2 0.7
Larsen & Toubro ADD 1,630 1,650 1.3 1,513,606 24,510 927 40.7 58.6 78.8 (16.3) 43.8 34.4 40.0 27.8 20.7 20.6 15.8 13.5 3.9 3.6 3.2 1— 1— 1— 10.4 13.5 16.2 43.4
Siemens SELL 953 600 (37.0) 339,364 5,495 356 17.8 24.3 29.9 104.7 36.2 23.1 53.5 39.2 31.9 30.3 23.2 18.7 7.5 6.7 5.9 0.6 0.8 0.9 14.3 18.0 19.6 5.2
Thermax REDUCE 1,061 850 (19.9) 126,472 2,048 119 22.7 33.5 45.9 10.1 47.5 36.8 46.7 31.7 23.1 32.5 20.9 14.8 5.8 5.2 4.5 0.8 1.0 1.3 12.8 17.2 20.8 1.0
Voltas REDUCE 254 260 2.4 83,979 1,360 331 8.7 12.0 14.2 16.9 38.4 18.6 29.2 21.1 17.8 24.0 15.7 12.9 4.1 3.7 3.2 0.9 1.4 1.7 14.9 18.5 19.4 11.4
Industrials Neutral 3,447,506 55,827 (5.8) 35.7 29.0 36.6 27.0 20.9 21.0 15.9 13.2 3.6 3.3 2.9 0.8 0.9 1.2 9.8 12.2 14.1 109.9
Infrastructure
Adani Port and SEZ REDUCE 331 300 (9.2) 684,152 11,079 2,084 12.0 16.5 21.2 43.4 37.8 28.7 27.6 20.0 15.6 17.3 13.3 10.7 5.8 4.7 3.8 0.6 0.7 0.9 24.2 25.9 26.8 13.4
Container Corporation REDUCE 1,388 1,330 (4.2) 270,644 4,383 195 48.9 55.4 70.4 (3.1) 13.2 27.0 28.4 25.1 19.7 19.4 16.3 12.5 3.5 3.2 2.9 0.8 0.9 1.2 13.0 13.4 15.3 2.5
Gujarat Pipavav Port REDUCE 201 200 (0.5) 97,196 1,574 483 7.1 9.7 12.6 94.6 37.3 30.3 28.5 20.7 15.9 24.3 17.8 13.6 5.6 4.4 3.4 — — — 21.7 23.6 24.0 4.6
IRB Infrastructure REDUCE 254 210 (17.2) 84,271 1,365 332 13.3 15.3 20.9 (3.8) 15.4 36.4 19.1 16.5 12.1 8.9 7.8 7.7 2.2 2.0 1.8 1.6 1.6 1.6 11.9 12.7 15.5 11.7
Sadbhav Engineering buy 259 275 6.3 44,352 718 171 8.3 9.3 10.9 24.6 12.1 17.6 31.2 27.8 23.7 15.9 13.1 11.5 3.2 2.9 2.6 — — — 12.1 10.8 11.4 1.1
Infrastructure Cautious 1,180,615 19,118 26.4 29.3 28.9 27.0 20.9 16.2 15.8 12.5 10.4 4.5 3.8 3.2 0.6 0.7 0.9 16.5 18.2 19.6 33.4
Infrastructure
Info Edge BUY 807 960 18.9 97,038 1,571 120 10.1 15.4 23.3 22.5 53.5 50.5 80.2 52.3 34.7 86.7 47.3 26.3 6.4 6.1 5.6 0.4 0.7 1.0 11.1 12.0 16.9 2.2
Just Dial ADD 1,541 1,650 7.1 108,462 1,756 70 20.6 28.6 51.7 20.0 38.5 81.0 74.7 53.9 29.8 57.1 38.7 19.4 17.4 14.6 11.3 0.5 0.6 1.2 25.1 29.5 42.9 8.0
Internet Attractive 205,501 3,328 26.2 45.3 66.4 77.4 53.3 32.0 67.6 42.2 22.0 9.7 8.8 7.7 0.5 0.7 1.1 12.5 16.6 24.0 10.3
Media
DB Corp. ADD 405 425 4.9 74,370 1,204 183 18.4 23.2 27.2 10.4 25.9 17.1 22.0 17.4 14.9 12.3 10.0 8.5 5.7 5.0 4.4 2.2 2.7 3.5 27.7 30.7 31.5 0.2
DishTV ADD 70 70 0.4 74,281 1,203 1,065 (0.1) 1.4 3.2 93.5 1,516.7 135.4 (730.0) 51.5 21.9 11.6 9.4 7.2 4.5 4.5 4.5 — — — (0.6) 8.7 20.4 4.2
Jagran Prakashan ADD 135 150 10.9 44,215 716 311 7.7 9.7 11.5 2.6 26.1 18.5 17.6 13.9 11.7 9.6 8.0 6.8 4.0 3.6 3.2 3.0 3.7 4.4 23.8 27.1 28.7 0.6
Sun TV Network ADD 410 385 (6.0) 161,456 2,615 394 20.2 22.7 26.5 6.2 12.7 16.6 20.3 18.0 15.5 12.9 11.3 9.4 4.7 4.3 3.9 2.5 3.0 3.5 24.4 25.0 26.4 6.4
Zee Entertainment Enterprises ADD 391 375 (4.0) 375,247 6,077 960 8.6 10.4 12.8 (6.8) 21.4 23.4 45.6 37.6 30.5 26.8 22.6 18.7 7.2 6.5 5.8 1.1 1.4 1.7 16.5 18.2 20.2 18.6
Media Neutral 729,570 11,814 8.5 26.6 25.5 33.4 26.4 21.0 16.6 14.0 11.6 5.8 5.3 4.8 1.3 1.7 2.0 17.3 20.0 22.8 30.1
Metals & Mining
Coal India ADD 382 360 (5.8) 2,414,746 39,103 6,316 22.5 28.1 23.7 (5.9) 24.7 (15.5) 17.0 13.6 16.1 10.4 9.0 10.0 4.8 4.2 3.8 3.0 3.7 3.2 29.8 32.8 24.6 16.8
Hindalco Industries REDUCE 145 165 14.0 298,803 4,839 2,065 16.3 16.6 20.4 31.0 1.9 22.5 8.9 8.7 7.1 7.7 6.3 5.4 0.7 0.6 0.6 1.0 1.0 1.0 8.0 7.6 8.7 22.1
Hindustan Zinc BUY 162 205 26.6 684,079 11,078 4,225 19.6 21.5 22.9 18.9 9.6 6.7 8.3 7.5 7.1 5.1 3.7 2.7 1.6 1.3 1.2 2.2 2.2 2.2 20.3 19.0 17.5 3.8
Jindal Steel and Power REDUCE 155 160 3.0 142,130 2,302 915 15.9 21.6 25.6 (23.8) 35.9 18.6 9.8 7.2 6.1 8.1 6.2 5.6 0.7 0.6 0.6 1.2 1.2 1.2 6.6 8.9 9.7 18.9
JSW Steel BUY 1,005 1,490 48.2 242,955 3,934 242 111.0 140.2 160.0 67.8 26.3 14.1 9.1 7.2 6.3 5.6 5.0 4.4 1.0 0.9 0.8 1.2 1.2 1.2 11.6 13.1 13.3 9.9
National Aluminium Co. SELL 48 56 17.8 122,548 1,984 2,577 5.0 5.1 5.4 88.9 2.4 6.7 9.6 9.3 8.8 3.7 3.5 2.9 0.9 0.9 0.8 3.2 3.2 2.1 10.2 9.8 9.7 1.4
NMDC ADD 141 185 31.5 557,836 9,033 3,965 18.4 18.5 17.5 15.3 0.5 (5.6) 7.6 7.6 8.1 4.1 4.3 4.3 1.7 1.5 1.4 6.0 6.0 6.0 23.1 21.0 18.2 7.0
Sesa Sterlite BUY 204 250 22.5 605,241 9,801 2,965 21.3 17.4 21.6 25.9 (18.6) 24.3 9.6 11.8 9.5 5.4 5.2 4.1 0.8 0.7 0.7 1.6 1.6 1.6 8.4 6.5 7.7 17.7
Tata Steel REDUCE 402 495 23.1 390,429 6,322 971 38.9 45.6 56.2 4.4 17.0 23.4 10.3 8.8 7.2 6.4 6.1 5.5 0.9 0.8 0.7 2.0 2.0 2.0 8.9 9.7 11.0 35.6
Metals & Mining Cautious 5,458,766 88,396 11.1 10.6 2.7 11.2 10.1 9.9 6.6 5.9 5.2 1.6 1.4 1.3 2.7 3.1 2.8 13.9 14.0 13.1 133.1
Pharmaceutical
Biocon SELL 429 360 (16.1) 85,780 1,389 200 20.6 21.8 23.4 (0.5) 5.7 7.6 20.8 19.7 18.3 13.0 11.9 10.7 2.7 2.5 2.3 1.7 1.8 1.9 13.1 13.2 13.0 6.5
Cipla BUY 662 680 2.8 531,373 8,605 803 17.3 24.2 32.3 0.3 39.5 33.4 38.2 27.4 20.5 22.3 17.2 12.8 4.8 4.2 3.6 0.5 0.8 1.0 13.1 16.3 18.9 17.7
Dr Reddy's Laboratories ADD 3,306 3,175 (4.0) 563,071 9,118 170 135.2 141.6 154.6 7.5 4.7 9.2 24.5 23.3 21.4 16.1 14.7 12.9 5.1 4.3 3.7 0.6 0.6 0.7 22.8 19.9 18.5 18.4
Lupin BUY 1,476 1,600 8.4 662,902 10,735 450 53.9 59.5 71.0 32.1 10.4 19.2 27.4 24.8 20.8 16.7 14.7 12.0 7.3 5.9 4.7 0.5 0.6 0.7 30.2 26.3 25.1 11.6
Sun Pharmaceuticals SELL 872 790 (9.4) 1,806,624 29,255 2,072 31.2 34.0 37.9 13.2 8.7 11.5 27.9 25.7 23.0 20.4 17.1 15.3 7.4 5.9 4.8 0.8 1.0 1.1 30.1 25.4 22.9 30.1
Pharmaceuticals Neutral 3,649,750 59,102 13.1 11.5 15.4 28.1 25.2 21.8 18.8 16.1 13.6 6.2 5.1 4.3 0.7 0.8 1.0 22.1 20.3 19.5 84.3

Target O/S
Real Estate
DLF BUY 146 210 44.2 259,538 4,203 1,781 2.9 4.1 6.0 (21.0) 42.0 48.5 50.8 35.8 24.1 15.7 13.6 9.7 0.9 0.9 0.9 2.0 1.4 1.4 1.8 2.5 3.6 30.1
Godrej Properties REDUCE 269 225 (16.5) 53,695 869 198 9.7 11.2 17.4 20.7 14.9 56.4 27.7 24.1 15.4 22.1 13.9 9.0 2.8 2.5 2.2 0.7 0.9 0.9 10.3 10.9 15.4 1.1
Oberoi Realty BUY 280 325 15.9 92,020 1,490 328 8.9 24.9 54.9 (6.1) 179.7 120.8 31.5 11.3 5.1 8.2 4.6 3.3 2.0 1.7 1.3 0.7 0.7 0.7 6.5 16.4 29.0 1.3
Prestige Estates Projects REDUCE 279 240 (14.0) 104,700 1,695 375 11.2 15.8 14.8 8.5 40.4 (6.0) 24.9 17.7 18.8 14.0 10.7 9.9 2.6 2.3 2.1 0.4 0.4 0.4 12.1 14.0 11.7 1.3
Sobha ADD 501 540 7.8 49,120 795 98 23.0 36.2 67.1 (3.9) 57.2 85.3 21.7 13.8 7.5 10.4 8.0 5.1 2.0 1.8 1.5 1.4 1.4 1.4 9.6 13.8 21.9 1.6
Sunteck Realty ADD 219 410 87.2 13,790 223 60 10.7 81.2 88.8 (57.4) 656.7 9.3 20.4 2.7 2.5 21.5 2.4 1.1 1.9 1.1 0.8 5.0 5.0 — 9.7 52.7 37.5 0.3
Real Estate Attractive 572,862 9,277 (8.5) 87.7 55.5 33.6 17.9 11.5 13.9 9.5 7.2 1.3 1.3 1.2 1.1 1.1 1.0 4.0 7.1 10.0 35.6
Technology
HCL Technologies REDUCE 1,672 1,575 (5.8) 1,174,470 19,019 707 101.8 108.1 120.2 12.9 6.2 11.1 16.4 15.5 13.9 11.6 10.4 8.8 4.6 3.7 3.1 1.4 1.7 1.8 31.1 26.6 24.2 24.4
Hexaware Technologies SELL 215 195 (9.4) 64,774 1,049 302 11.1 13.4 15.6 (12.4) 20.7 16.9 19.4 16.1 13.8 13.0 11.1 9.5 6.8 6.1 5.4 4.1 3.7 4.4 31.0 39.8 41.5 6.8
Infosys ADD 2,124 2,350 10.6 2,439,585 39,505 1,143 108.4 123.1 146.0 14.0 13.6 18.5 19.6 17.2 14.6 14.0 11.8 9.6 4.7 4.0 3.4 1.7 1.9 2.2 25.7 25.0 25.3 112.2
Mindtree ADD 1,356 1,425 5.1 113,527 1,838 84 65.6 76.2 89.1 22.3 16.1 16.9 20.7 17.8 15.2 14.6 12.0 9.8 5.6 4.6 3.8 1.2 1.4 1.6 30.1 28.4 27.2 3.9
Mphasis SELL 369 400 8.3 77,605 1,257 210 33.0 34.4 37.9 124.5 4.2 10.2 11.2 10.7 9.7 6.0 5.5 4.8 1.4 1.4 1.3 4.5 4.7 5.1 13.2 13.0 13.6 0.5
TCS ADD 2,500 2,700 8.0 4,897,701 79,310 1,959 107.8 122.9 145.5 10.4 14.0 18.4 23.2 20.3 17.2 17.1 14.3 11.9 7.8 6.5 5.5 2.4 2.0 2.3 35.8 35.0 34.6 46.1
Tech Mahindra ADD 2,802 3,000 7.1 672,417 10,889 214 136.6 168.6 199.0 6.7 23.4 18.0 20.5 16.6 14.1 14.5 11.7 9.7 5.2 4.2 3.3 0.9 1.1 0.7 28.4 28.0 26.4 23.2
Wipro ADD 590 650 10.1 1,457,537 23,602 2,467 34.4 38.4 44.8 8.8 11.5 16.6 17.1 15.4 13.2 11.5 9.9 8.1 3.6 3.1 2.6 1.5 1.7 1.7 22.7 21.5 21.4 17.2
Technology Attractive 10,897,616 176,469 12.0 12.9 17.1 20.3 18.0 15.3 14.5 12.3 10.2 5.4 4.6 3.8 1.9 1.8 2.1 26.8 25.4 25.0 234.2
Telecom
Bharti Airtel BUY 355 430 21.2 1,418,677 22,973 3,997 15.5 17.1 21.1 85.8 10.2 24.0 22.9 20.8 16.8 6.8 6.0 5.3 2.2 2.0 1.9 0.6 1.0 1.5 9.9 10.1 11.7 27.0
Bharti Infratel REDUCE 358 270 (24.6) 676,818 10,960 1,889 11.2 13.0 15.7 38.9 16.3 20.7 32.1 27.6 22.9 13.4 11.8 10.2 3.8 3.8 3.7 3.1 2.7 3.3 11.8 13.8 16.3 6.3
IDEA BUY 158 192 21.6 567,863 9,196 3,595 8.4 9.5 9.4 41.3 13.5 (0.7) 18.8 16.6 16.7 8.5 7.1 6.2 2.5 2.2 2.0 0.4 0.5 0.6 15.2 13.9 12.3 11.3
Reliance Communications SELL 81 90 11.7 193,626 3,135 2,467 3.5 5.3 8.8 8.8 50.0 66.8 22.8 15.2 9.1 6.5 6.1 5.2 0.6 0.6 0.5 — — — 2.8 3.8 6.0 10.4
Tata Communications ADD 424 435 2.5 120,897 1,958 285 3.4 7.5 12.6 171.9 122.3 69.3 126.3 56.8 33.6 7.4 6.7 5.9 8.1 7.0 5.7 1.1 1.3 1.5 8.3 13.2 18.8 4.1
Telecom Cautious 2,977,882 48,222 63.4 15.8 22.1 24.3 21.0 17.2 7.7 6.8 5.9 2.1 2.0 1.8 1.1 1.2 1.6 8.7 9.4 10.7 59.1
Utilities
Adani Power SELL 47 36 (22.7) 133,688 2,165 2,872 (6.9) (4.2) (4.3) (577.9) 38.1 (0.6) (6.8) (11.0) (10.9) 10.7 9.3 9.8 2.8 3.8 5.8 — — — (34.9) (29.5) (42.2) 3.2
CESC ADD 725 695 (4.1) 96,084 1,556 133 28.1 55.5 70.4 (28.5) 97.2 27.0 25.8 13.1 10.3 11.3 8.0 7.2 1.1 1.1 1.0 1.0 1.0 1.1 4.6 8.4 9.9 5.3
JSW Energy SELL 110 73 (33.6) 180,324 2,920 1,640 9.5 9.2 8.0 37.8 (3.8) (12.4) 11.6 12.0 13.7 6.9 6.4 6.6 2.2 1.9 1.6 — — — 21.2 16.9 12.8 6.0
NHPC REDUCE 19 22 15.2 211,450 3,424 11,071 1.6 1.9 2.0 (1.1) 21.4 2.2 12.1 10.0 9.8 8.7 7.5 7.6 0.7 0.7 0.7 2.2 2.6 2.7 6.0 7.0 6.8 1.8
NTPC REDUCE 143 140 (2.0) 1,177,865 19,074 8,245 10.7 13.1 14.8 (16.7) 22.5 13.6 13.4 10.9 9.6 11.3 8.7 7.2 1.3 1.2 1.1 2.2 2.7 3.1 9.9 11.3 11.9 11.9
Power Grid BUY 147 160 8.5 771,136 12,487 5,232 9.8 12.4 15.6 14.0 26.4 25.8 15.0 11.9 9.4 10.6 9.4 8.0 2.0 1.8 1.6 2.0 2.6 3.2 14.3 16.3 18.4 8.9
Reliance Power SELL 62 62 (0.7) 175,180 2,837 2,805 3.7 4.1 6.2 (11.9) 11.5 50.5 16.9 15.1 10.1 21.3 10.9 8.2 0.9 0.8 0.7 — — — 5.2 5.5 7.7 8.1
Tata Power ADD 82 96 16.9 222,050 3,596 2,800 1.5 4.4 5.6 (28.3) 187.7 27.7 53.4 18.6 14.5 8.2 6.7 6.0 1.6 1.5 1.4 1.5 1.5 1.5 3.2 8.5 10.1 5.1
Utilities Cautious 2,967,776 48,058 (13.9) 33.3 18.0 17.3 13.0 11.0 10.6 8.6 7.6 1.4 1.3 1.2 1.7 2.1 2.4 8.0 9.9 10.8 50.3
Others
Carborundum Universal ADD 175 200 14.2 32,928 533 188 5.9 11.3 14.4 20.6 92.6 27.4 29.8 15.5 12.1 13.0 8.6 6.9 2.8 2.4 2.1 0.9 1.3 1.6 9.6 16.8 18.7 0.4
Coromandel International SELL 302 210 (30.5) 86,394 1,399 283 16.5 18.6 21.6 36.7 13.1 16.0 18.4 16.2 14.0 10.4 9.4 8.3 3.3 2.9 2.5 1.5 1.5 1.5 19.1 18.8 18.9 1.1
Godrej Industries ADD 311 345 11.0 104,393 1,690 331 14.6 18.0 20.2 48.6 22.7 12.2 21.2 17.3 15.4 18.5 13.2 9.3 3.3 2.8 2.4 0.6 0.6 0.6 16.5 17.4 16.8 2.0
Havells India ADD 271 310 14.3 169,424 2,744 624 9.0 11.2 13.2 12.8 24.5 17.7 30.1 24.2 20.5 18.5 14.8 12.5 8.7 7.4 6.2 1.2 1.6 1.9 31.2 33.1 32.8 14.3
Jaiprakash Associates RS 27 — — 64,947 1,052 2,432 1.1 4.5 4.5 120.0 306.6 (0.1) 24.0 5.9 5.9 12.2 9.3 9.0 0.6 0.5 0.5 0.0 0.0 0.0 2.5 9.0 8.5 16.9
Rallis India BUY 229 230 0.4 44,543 721 194 9.1 11.5 14.5 16.7 26.1 25.8 25.1 19.9 15.8 14.8 11.5 9.1 5.3 4.4 3.7 1.1 1.1 1.2 22.8 24.3 25.3 1.0
Tata Chemicals BUY 445 520 16.9 113,303 1,835 255 32.0 41.0 46.7 110.1 28.0 13.9 13.9 10.8 9.5 7.4 6.2 5.3 1.9 1.7 1.5 2.2 2.2 2.2 14.1 16.3 16.5 4.4
UPL ADD 371 370 (0.4) 159,162 2,577 429 27.7 32.9 37.5 13.7 19.1 13.7 13.4 11.3 9.9 7.9 7.0 6.0 2.6 2.2 1.9 1.2 1.3 1.5 20.7 20.9 20.2 10.5
Others 775,094 12,551 153.7 42.8 12.6 19.0 13.3 11.8 11.4 9.2 8.2 2.3 2.0 1.8 1.2 1.3 1.4 12.1 15.3 15.3 50.5
KIE universe 76,180,609 1,233,618 8.2 18.2 16.7 18.9 16.0 13.7 11.2 9.4 8.0 2.7 2.4 2.2 1.5 1.7 1.9 14.3 15.1 15.7
KIE universe (ex-energy) 67,242,679 1,088,883 13.9 19.3 17.3 20.3 17.0 14.5 12.2 10.2 8.8 3.1 2.7 2.4 1.4 1.6 1.8 15.1 16.1 16.7
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2015 means calendar year 2014, similarly for 2016 and 2017 for these particular companies.
(c) Exchange rate (Rs/US$)= 61.75
Price/BV (X) RoE (%)Dividend yield (%)

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 target prices are also on a 12-month horizon basis.
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 target price, 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 price target, if any, for this stock, because there is not a sufficient
fundamental basis for determining an investment rating or target. The previous investment rating and price target, 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.
Kotak Institutional Equities Research coverage universe
Distribution of ratings/investment banking relationships
Source: Kotak Institutional Equities As of September 30, 2014
Percentage of companies covered by Kotak Institutional
Equities, within the specified category.
Percentage of companies within each category for which
Kotak Institutional Equities and or its affiliates has provided
investment banking services within the previous 12 months.
* The above categories are defined as follows: 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 less than -5% returns
over the next 12 months. Our target prices are also on a 12-
month horizon basis. These ratings are used illustratively to
comply with applicable regulations. As of 30/09/2014 Kotak
Institutional Equities Investment Research had investment
ratings on 154 equity securities.
22.1%
36.4%
22.1%
19.5%
4.5% 4.5%
1.9% 0.6%
0%
10%
20%
30%
40%
50%
60%
70%
BUY ADD REDUCE SELL

Corporate Office Overseas Offices
Kotak Securities Ltd.
27 BKC, Plot No. C-27, “G Block”
Bandra Kurla Complex, Bandra (E)
Mumbai 400 051, India
Tel: +91-22-43360000
Kotak Mahindra (UK) Ltd
8th Floor, Portsoken House
155-157 Minories
London EC3N 1LS
Tel: +44-20-7977-6900
Kotak Mahindra Inc
50 Main Street, Ste. 890
Westchester Financial Centre
White Plains, New York 10606
Tel:+1-914-997-6120
Copyright 2015 Kotak Institutional Equities (Kotak Securities Limited). All rights reserved.
1. Note that the research analysts contributing to this report may not be registered/qualified as research analysts with FINRA; and
2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions on
communications with a subject company, public appearances and trading securities held by a research analyst account.
3. Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak Mahindra Inc
and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak Mahindra Inc at
nilesh.jain@kotak.com.
Kotak Securities Limited and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We along with our
affiliates are leading underwriter of securities and participants in virtually all securities trading markets in India. We and our affiliates have investment banking and other
business relationships with a significant percentage of the companies covered by our Investment Research Department. Our research professionals provide important input
into our investment banking and other business selection processes. Investors should assume that Kotak Securities Limited and/or its affiliates are seeking or will seek
investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in
preparing this material may participate in the solicitation of such business. Our research professionals are paid in part based on the profitability of Kotak Securities Limited,
which include earnings from investment banking and other business. Kotak Securities Limited generally prohibits its analysts, persons reporting to analysts, and members of
their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, Kotak Securities Limited generally
prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our
salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the
opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed
herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest.
Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein.
This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be
illegal. We are not soliciting any action based on this material. It is for the general information of clients of Kotak Securities Limited. It does not constitute a personal
recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation
in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the
investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not
a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Kotak Securities Limited does not provide tax advise to its clients,
and all investors are strongly advised to consult with their tax advisers regarding any potential investment.
Certain transactions -including those involving futures, options, and other derivatives as well as non-investment-grade securities - give rise to substantial risk and are not
suitable for all investors. The material is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied
on as such. Opinions expressed are our current opinions as of the date appearing on this material only. We endeavor to update on a reasonable basis the information
discussed in this material, but regulatory, compliance, or other reasons may prevent us from doing so. We and our affiliates, officers, directors, and employees, including
persons involved in the preparation or issuance of this material, may from time to time have “long” or “short” positions in, act as principal in, and buy or sell the securities
or derivatives thereof of companies mentioned herein. Kotak Securities Limited and its non US affiliates may, to the extent permissible under applicable laws, have acted on
or used this research to the extent that it relates to non US issuers, prior to or immediately following its publication. Foreign currency denominated securities are subject to
fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the investment. In addition, investors in securities such as
ADRs, the value of which are influenced by foreign currencies affectively assume currency risk. In addition options involve risks and are not suitable for all investors. Please
ensure that you have read and understood the current derivatives risk disclosure document before entering into any derivative transactions.
Kotak Securities Limited established in 1994, is a subsidiary of Kotak Mahindra Bank Limited. Kotak Securities is one of India’s largest brokerage and distribution house.
Kotak Securities Limited is a corporate trading and clearing member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited (NSE), MCX Stock
Exchange Limited (MCX-SX), United Stock Exchange of India Limited (USEIL) and a dealer of the OTC Exchange of India (OTCEI). Our businesses include stock broking,
services rendered in connection with distribution of primary market issues and financial products like mutual funds and fixed deposits, depository services and Portfolio
Management.
Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).Kotak
Securities Limited is also registered with Insurance Regulatory and Development Authority as Corporate Agent for Kotak Mahindra Old Mutual Life Insurance Limited and is
also a Mutual Fund Advisor registered with Association of Mutual Funds in India (AMFI)
We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in last five years.
However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on KSL
for certain operational deviations. We have not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has our certificate of
registration been cancelled by SEBI at any point of time.
We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us
Details of Associates are available on our website ie www.kotak.com
Research Analyst has not served as an officer, director or employee of Subject Company. We or our associates have received compensation from the subject company in the
past 12 months. We or our associates have managed or co-managed public offering of securities for the subject company in the past 12 months. We or our associates have
received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. We or our associates have
received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12
months. We or our associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
Research Analyst or his/her relative’s may have financial interest in the subject company. Kotak Securities Limited or its associates have financial interest in the subject
company. Research Analyst or his/her relatives does not have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month
immediately preceding the date of publication of Research Report: Kotak Securities Limited does not have actual/beneficial ownership of 1% or more securities of the
subject company at the end of the month immediately preceding the date of publication of Research Report. Associates of Kotak Securities Limited may have
actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report.
Subject Company has been client during twelve months preceding the date of distribution of the research report.
A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company
from the list on the browser and select the “three years” icon in the price chart).
Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051, Telephone No.:
+22 43360000, Fax No.: +22 67132430. Website: www.kotak.com. SEBI Registration No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230, OTCINB
200808136, MCXSX INE 260808130/INB 260808135/INF 260808135, AMFI ARN 0164 and PMS INP000000258. NSDL: IN-DP-NSDL-23-97. CDSL: IN-DP-CDSL-158-2001.
Compliance Officer Details: Mr. Sandeep Chordia. Call: 022- 6605 6825 or Email: sandeep.chordia@kotak.com

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