Narnolia Securities Limited believe current level is attractive entry point for the investor to buy stock of Bank of India. Also buy view on TCS stock due to client spending in the US and Europe and growth in demand for technologies

1. IEA-Equity
Strategy
India Equity Analytics
BANK OF INDIA :
18th Dec, 2013
"BUY"
18th Dec 2013
Bank of India is trading at 0.5 times of one year forward book which is the lowest in valuation band despite of performing better than
expectation largely due to lower CAR and slower economic growth. With the capital infusion to the tune of Rs.1000 cr and improving sign of
asset quality would re-rate the stock as it did previously in our view. The management guided fresh slippage in line with 2QFY and inch up
higher restructure asset for December quarter. We believe that current level is attractive entry point for the investor with time horizon more
than one year with price target of Rs.235.................................... ( Page : 2- 4)
TCS : "Positive commentary"
"BUY"
18th Dec 2013
TCS on its management Interview to Media highlighted that; For earning and demand prospect, FY15 will be better than the ongoing fiscal on
account of uptick in client spending in the US and Europe and growth in demand for technologies like cloud, mobility and Big Data.We maintain"
BUY" view on the stock with a target price of Rs 2550. Taking the INR/USD (average value) at Rs60 for FY14E and Rs59.5 for FY15E, We upgrade
EPS from Rs87.4 to Rs90.7 for FY14E and from Rs99.3 to Rs 102.4 for FY15E........................ ( Page : 5-6)
UCO BANK :
"BUY"
17th Dec 2013
We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on account of bank’s unlikely to get benefit of western sanction against
Iran. Late last month US and six other major powers have imposed sanction against Iran for its nuclear deal. In order to quality for waiver
sanction against Iran, India has cut back sharply on purchase of oil from Iran. UCO was the major beneficiary of current account deposits of
India-Iran oil facilities. In our banking sector coverage universe, UCO bank’s cost of deposits were lowest at 6.1% whereas yield on loan was
10.1% at the end of 2QFY14. After this development, bank’s margin would be impacted and accordingly UCO bank loses the valuation premium.
Although bank’s management is focusing on other area of growth like branch expansion and customer acquisition. We slightly tweak our
earnings and reduce our book value estimate from Rs.175.5 to Rs.168.8. Now our revised price target for the stock would be Rs.84 which is 0.5
times of FY14E book value................ ( Page : 7-11)
JLR VOLUME UPDATE : NOVEMBER 2013
16th Dec 2013
JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the company for the month sold 37403 units up by 25%
YoY. This total volume of JLR includes 6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is marked by
stellar performance by Jaguar .................................................... ( Page : 12)
Persistent System : "Persistently innovating.."
"BUY" 13th Dec 2013
With the potential revenue growth, strong deal pipeline and multi-year relationships with marquee clientele in the Infrastructure vertical, we
upgrade this stock and expect for better earning visibility across niche IT players.we rate “BUY” on the stock and we revise our target price from
Rs 890to Rs 960. At a CMP of Rs 876, stock trades at 13.8x FY14E earnings........................ ( Page : 13-14)
COAL INDIA :
"BUY"
12th Dec 2013
We expect modest increase in sales volumes growth during FY2013-15 on account of poor offtake capabilities of CIL. Also, we expect CIL’s
margins to decline during FY2014 due to lower e-auction realizations and higher staff costs/other expenses.News flows related to further
divestment in CIL by the government is likely to keep the stock price under pressure in our view. we recommend Buy rating on the stock with
our previous target price Rs.350............................................ ( Page : 15-17)
LUPIN : "Optimistic Guidance "
"BUY"
11th Dec 2013
The management of the company in its latest interaction said that company is confident of logging 15-20 % CAGR in US and India in the days to
come on the back of rich pipeline as well as acquisition based strategy . ……………………………………… ( Page : 18-19)
Narnolia Securities Ltd,
402, 4th floor 7/1, Lords Sinha Road Kolkata 700071, Ph 033-32011233 Toll Free no : 1-800-345-4000
email: research@narnolia.com, website : www.narnolia.com

2. BANK OF INDIA
Company Update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
BUY
206
235
14
-
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Cr)
Average Daily Volume
Nifty
532149
BANKINDIA
393/126
12260
2271804
6139
Stock Performance
1M
Absolute
-14.5
Rel.to Nifty
-13.7
1yr
-32.2
-37.1
YTD
-32.2
-37.1
Share Holding Pattern-%
Current 1QFY14 4QFY1
3
Promoters
64.1
64.1
64.1
FII
13.2
13.6
13.5
DII
15.3
15.6
16.3
Others
7.4
6.7
6.0
BANKINDIA Vs Nifty
"BUY"
18th Dec, 2013
Despite of improving fundamental from past two quarters, Bank of India is
trading at 0.5 times of one year forward book which is the lowest level in our
valuation parameters. We believe that current level is attractive entry point for
the investor with time horizon more than one year. With the capital infusion of
Rs.1000 cr by GoI and improving sign of asset quality would re-rate the stock
in our view as it previously witnessed i.e. 0.8 to 1.2 times of book. The
management has guided fresh slippage of about Rs.1500 cr and restructures
to the tune of Rs.1000-1200 cr in 3QFY14 which is in line with 2QFY14. We
recommend buy with price target of Rs. 235
Shown Improving sign of asset quality with higher recovery and up-gradation
rather than write-off
Most of banks especially PSUs are beaten down by the market on account of slower
economic growth and stress in asset quality. But Bank of India has witnessed
improvement in asset quality in 2QFY14 as fresh slippages were down by 26%
sequentially and 46% Year-on-year basis. Moreover bank reported reduction to the
tune of Rs.1009 cr versus Rs.1338 cr in 1QFY14. Most of reduction was due to
higher recovery and up-gradation rather than write-off. Write-off came down sharply
from Rs.598 cr 1QFY14 to Rs.120 cr in 2QFY14.
Inch up restructure guidance in 3QFY14
As far as restructure loan are concern, bank’s total restructure loan was about 5% of
total loan asset and bank’s management expects Rs.1000-1200 cr of restructure in
December quarter. In 2QFY14, bank sold about Rs.370 cr of bad loan to Asset
Reconstruction Company (ARC) for recovery and during quarters its plan to sell
about Rs.500 cr of bad loan to ARC.
Sequentially improving PCR provide cushion on stress asset
Despite of stable asset quality and lower slippage, Bank of India provided 24% more
provision in sequential basis which improved its provision coverage ratio(Without
technical write off) to 63.3% from 61% in preceding quarter same year. Higher
provision would provide cushion on stress asset without hurting profit going further.
Capital infusion by GoI raise CAR ratio to 8.1% from 7.75%
Bank has lower CAR to 7.75% at the end of 2QFY14 according to Basel 3 norm.
Now Bank of India has approved to initiate process to raise further capital for issue
of 4.63cr Equity Shares to GoI on Preferential basis at a price of Rs. 215.70 per
share. This capital infusion is taking CAR ratio to 8.1% and government holding rise
to 66.7% from 64.1%. Capital infusion to the tune of Rs.1000 cr diluting our FY14E’s
book value by 40 bps.
Rs, Cr
Financials
2011
2012
2013
2014E
2015E
NII
7878
8313
9024
12110
11804
Total Income
10519
11635
12790
16672
16366
PPP
5398
6694
7458
9670
9492
Net Profit
2542
2678
2749
3533
3269
EPS
46.5
46.7
47.9
61.6
57.0
(Source: Company/Eastwind)
2
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

3. BANK OF INDIA
Quarterly Result
Interest/discount on advances / bills
Income on investments
Interest on balances with Reserve Bank of India
Others
Total Interest Income
Others Income
Total Income
Interest on deposits
Interest on RBI/Inter bank borrowings
Others
Interest Expended
NII
Other Income
Total Income
Employee
Other Expenses
Operating Expenses
PPP( Rs Cr)
Provisions
Net Profit
2QFY14
6631
2129
479
0
9239
1100
10340
5966
414
333
6712
2527
1100
3627
897
628
1525
2102
1232
622
1QFY14
6190
1885
465
0
8541
1181
9722
5401
296
308
6004
2537
1181
3718
963
575
1537
2180
695
964
2QFY13 % YoY Gr % QoQ Gr
5881
12.8
7.1
1835
16.0
12.9
289
65.6
2.9
0
42.9
36.4
8005
15.4
8.2
894
23.1
-6.8
8900
16.2
6.4
5154
15.8
10.5
536
-22.8
40.0
119
179.8
8.2
5810
15.5
11.8
2196
15.1
-0.4
894
23.1
-6.8
3090
17.4
-2.4
700
28.2
-6.8
536
17.1
9.3
1236
23.4
-0.8
1854
13.4
-3.6
1552
-20.6
77.4
302
106.0
-35.5
Balance Sheet Data
Equity Capital
Reserve & Surplus
Deposits
Borrowings
Other liabilities and provisions
Total Liability
Cash in hand
Cash and balances with reserve bank of india
Investment
Advance
Fixed Assets
Others Assets
Total Assets
597
25,686
432,282
41,751
12,727
513,042
24,621
34,658
107,413
332,190
2,957
11,203
513,042
575
21,774
332,695
29,434
11,262
395,739
17,080
19,198
90,147
256,148
2,839
10,327
395,739
575
21,774
332,695
29,434
11,262
395,739
17,080
19,198
90,147
256,148
2,839
10,327
395,739
9873
6156
3.0
1.9
37.6
8765
5947.3
3.0
2.0
32.1
8898
5,228
3.4
2.0
41.2
Asset Quality
GNPA
NPA
GNPA(%)
NPA(%)
PCR(%) Without technical write off
3.9
3.9
18.0
18.0
29.9
29.9
41.8
41.8
13.0
13.0
29.6
29.6
44.2
44.2
80.5
80.5
19.2
19.2
29.7
29.7
4.2
4.2
8.5
8.5
29.6
29.6
11.0
12.6
17.7
3.5
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
3

4. BANK OF INDIA
Financials & Assuption
Interest/discount on advances / bills
Income on investments
Interest on balances with Reserve Bank of India
Others
Total Interest Income
Others Income
Total Income
Interest on deposits
Interest on RBI/Inter bank borrowings
Others
Interest Expended
NII
Other Income
Total Income
Employee
Other Expenses
Operating Expenses
PPP( Rs Cr)
Provisions
Net Profit
2011
2012
2013
2014E
2015E
15570
5195
798
295
21858
2642
24500
12218
813
950
13981
7878
2642
10519
3492
1629
5121
5398
2909
2542
46.0
20241
7142
834
264
28481
3321
31802
17957
1145
1065
20167
8313
3321
11635
3069
1871
4941
6694
4016
2678
5.3
23139
7261
1257
251
31909
3766
35675
20238
1489
1158
22885
9024
3766
12790
3131
2201
5332
7458
4709
2749
2.7
29515
8828
1889
1
40233
4562
44795
25422
1419
1281
28123
12110
4562
16672
4131
3965
7002
9670
5254
3533
28.5
31171
10152
1889
1
43213
4562
47775
28709
1419
1281
31410
11804
4562
16366
4055
3892
6874
9492
5406
3269
-7.5
299559
30
22021
-2
213708
26
86677
27
318216
6
32114
46
248833
16
86754
0
381840
20
35368
10
289367
16
94613
9
434075
14
36854
4
347241
20
110351
17
503527
16
37953
3
366720
6
126904
15
7.3
6.3
6.5
4.1
8.0
4.3
8.1
8.7
7.8
5.6
6.9
5.8
8.0
7.1
7.7
5.2
6.8
5.3
8.5
8.0
8.4
5.7
7.5
6.5
8.5
8.0
8.4
5.6
7.5
6.2
322.7
1.5
10.3
365.3
1.0
7.7
416.9
0.7
6.3
469.4
0.4
3.8
510.4
0.4
4.1
Key Balance Sheet Data
Deposits
Deposits Growth(%)
Borrowings
Borrowings Growth(%)
Loan
Loan Growth(%)
Investment
Investment Growth(%)
Eastwind Calculation
Yield on Advances
Yield on Investments
Yield on Funds
Cost of deposits
Cost of Borrowings
Cost of fund
Valuation
Book Value
P/BV
P/E
Source: Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
4

5. TCS
"BUY"
18th Dec' 13
"Positive commentary"
Company update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
2047
2550
2160
25%
18%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
532540
TCS
2258/1198
400775
1011877
6139
Stock Performance
1M
16.6
12.3
Absolute
Rel. to Nifty
1yr
71.8
64.7
YTD
72
64.3
Share Holding Pattern-%
Promoters
FII
DII
Others
Current
73.96
16.14
5.44
4.46
1 year forward P/E
1QFY14 4QFY13
73.96
73.96
16.14
14.96
5.44
6.45
4.46
4.63
TCS on its management Interview to Media highlighted that
▪ For earning and demand prospect, FY15 will be better than the ongoing fiscal on
account of uptick in client spending in the US and Europe and growth in demand for
technologies like cloud, mobility and Big Data.
▪ For next 3-5 years, momentum picking for social, mobile, analytics and cloud (SMAC)
technologies could offer a "multi-billion dollar opportunity" in revenues for the
company.
▪ On the hiring front, TCS will hire about 25,000 college graduates who will join the
firm in the next fiscal. Besides, the firm will also be hiring across geographies like the
US and Europe to keep up with demand for services. During current fiscal year, TCS has
recruited 45000 head counts so far.
TCS Q3 analyst briefing key takeaways; Adversely impacted by seasonality but
nothing unexpected,
Marginal Revenue growth impacted by seasonality: TCS management has indicated
rd
that 3 quarter, FY14E will be slightly impacted by broad bases furloughs across
Industries and thin project based services. Revenue will be impacted mainly in
developed market like US and Europe region. We expect that revenue growth could be
seen at 3-3.5% for 3QFY14E.
Persistent Margin picture: The Company expects margins could be broadly stable. The
company would take a decision on reinvestment only after the Rupee stabilizes. We
expect that company could maintain EBITDA margin at 30-31% during the 3rd quarter.
Confident on IT spending: Despite furloughs impact, it remains confident of growth in
the medium term as clients were heading into their CY2014E budgeting cycle in a more
confident position than in the past 2-3 yrs. Broadly US and Europe region will play a key
role for better demand enviromnment ahead, however domestic market could be out of
race due to upcoming election.
We continue to believe that TCS will be star performer in growth sense than other
peers. Hence, we are maintaining 17% revenue growth in dollar term for FY14E
because of improved demand environment, while NASSCOM expects 12-14% for the
Industry. We continue to be positive on demand prospect for TCS.
View and Valuation: We continue to remain positive on demand outlook and margin
profile. We continue to be positive on demand environment and company’s strength of
efficient deal execution. We advise that TCS now seem to be trading ahead of
fundamentals; At a price of Rs 2047, it is trading at 22.6x FY14E earnings, We maintain"
BUY" view on the stock with a target price of Rs 2550. Taking the INR/USD (average
value) at Rs60 for FY14E and Rs59.5 for FY15E, We upgrade EPS from Rs87.4 to Rs90.7
for FY14E and from Rs99.3 to Rs 102.4 for FY15E. For FY14E and FY15E, we expect 17%
and 20% revenue growth in USD term and retain positive stance as outperformance
continues.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
2QFY14
20977.24
6632.95
4633.33
31.6%
22.1%
1QFY14
17987.07
5144.12
3839.5
28.6%
21.3%
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
(QoQ)-%
16.6
28.9
20.7
300bps
80bps
2QFY13
15621.03
4438.39
3434.65
28.4%
22.0%
Rs, Crore
(YoY)-%
34.3
49.4
34.9
320bps
10bps
5

6. TCS.
Quarterly snapshot
Qtrly,
Volume Growth
Sales Growth, USD Term
Sales Growth, INR Term
PAT Growth, INR Term
EBITDA Margin
PAT Margin
2QFY12
6.3%
4.7%
7.7%
-5%
29.1%
19.8%
3QFY12
3.2%
2.4%
13.5%
36%
31.0%
23.8%
4QFY12
3.3%
2.4%
0.4%
-7%
29.6%
22.0%
1QFY13
5.3%
3.0%
12.1%
14%
29.1%
22.3%
2QFY13
5.0%
4.6%
5.1%
4%
28.4%
22.0%
3QFY13
1.3%
3.3%
2.9%
3%
29.0%
22.1%
4QFY13
4.4%
3.1%
2.2%
2%
28.1%
22.0%
1QFY14
6.1%
4.1%
9.5%
6%
28.6%
21.3%
2QFY14
7.30%
5.4%
16.6%
21%
31.6%
22.1%
FY10
6339
30029.0
10879.6
4570.1
1262.0
4622.8
21334.4
8694.6
601.8
59.1
272.0
8033.7
16.1
8289.6
1197.0
7092.7
7000.6
FY11
8187
37325.1
13850.5
5497.7
1743.7
5054.3
26146.2
11178.9
686.2
49.1
604.0
10443.6
26.5
11021.2
1830.8
9190.3
9068.6
FY12
10171
48894.3
18571.9
6800.5
2391.3
6694.8
34458.5
14435.8
860.9
57.1
428.2
13517.9
22.2
13923.8
3399.9
10524.0
10414.0
FY13
11569
62989.5
24040.0
8701.9
3763.7
8443.9
44949.6
18040.0
1016.3
63.7
1178.2
16960.1
48.5
18089.8
4014.0
14075.7
13917.4
FY14E
13507.44
81044.64
30796.96
10941.03
4862.68
10130.58
56731.25
24313.39
1268.47
57.54
405.22
23044.92
48.53
23401.61
5616.4
17785.2
17785.2
FY15E
16202.45
96404.56
37115.76
13978.66
6748.32
12532.59
70375.33
26029.23
1508.88
76.73
1928.09
24520.35
48.53
26399.91
6336.0
20063.9
20063.9
8.0%
21.3%
31.8%
29.2%
24.3%
28.6%
29.6%
24.2%
31.0%
29.1%
14.5%
13.7%
28.8%
25.0%
33.7%
16.8%
28.7%
34.8%
26.4%
20.0%
19.0%
7.1%
12.8%
29.0%
26.8%
23.6%
30.0%
28.0%
24.6%
29.5%
27.6%
21.5%
28.6%
26.9%
22.3%
30.0%
28.4%
21.9%
27.0%
25.4%
20.8%
36.2%
15.2%
4.2%
15.4%
14.4%
37.1%
14.7%
4.7%
13.5%
16.6%
38.0%
13.9%
4.9%
13.7%
24.4%
38.2%
13.8%
6.0%
13.4%
22.2%
38.0%
13.5%
6.0%
12.5%
24.0%
38.5%
14.5%
7.0%
13.0%
24.0%
780.8
195.7
18466.7
36.2
94.4
38.4%
28.1%
8.3
21.5
1182.5
195.7
24504.8
47.0
125.2
37.5%
50.8%
9.4
25.2
1322.0
195.7
29579.2
53.8
151.1
35.6%
37.5%
8.7
24.6
1563.0
196.0
38645.7
71.8
197.2
36.4%
41.2%
7.9
21.8
2047.0
196.0
49103.5
90.7
250.5
36.2%
41.2%
8.2
22.6
2047.0
196.0
60901.0
102.4
310.7
32.9%
41.2%
6.6
20.0
Financials
Rs, Cr
Net Sales-USD
Net Sales
Employee Cost
Overseas business expenses
Services rendered by business associates and others
Operation and other expenses
Total Expenses
EBITDA
Depreciation
Amortisation
Other Income
EBIT
Interest Cost
PBT
Tax
PAT
PAT ((Reported PAT))
Growth-%
Sales-USD
Sales
EBITDA
PAT
Margin -%
EBITDA
EBIT
PAT
Expenses on Sales-%
Employee Cost
Overseas business expenses
Services rendered by business associates and others
Operation and other expenses
Tax rate
Valuation
CMP
No of Share
NW
EPS
BVPS
RoE-%
Dividen Payout ratio
P/BV
P/E
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
6

7. UCO BANK
Company Update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Cr)
Average Daily Volume
Nifty
Stock Performance
1M
Absolute
16.3
Rel.to Nifty
14.1
BUY
74
84
14
532205
UCOBANK
86.65/46
5561
2960821
6154
1yr
0.6
-7.0
YTD
0.6
-7.0
Share Holding Pattern-%
Current 1QFY14 4QFY1
3
Promoters
69.3
69.3
69.3
FII
4.2
3.9
3.2
DII
12.4
12.5
13.0
Others
14.2
14.3
14.6
UCO Bank Vs Nifty
"BUY"
17th Dec, 2013
We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on
account of bank’s unlikely to get benefit of western sanction against Iran. Late
last month US and six other major powers have imposed sanction against Iran
for its nuclear deal. In order to quality for waiver sanction against Iran, India
has cut back sharply on purchase of oil from Iran. UCO was the major
beneficiary of current account deposits of India-Iran oil facilities. In our
banking sector coverage universe, UCO bank’s cost of deposits were lowest
at 6.1% whereas yield on loan was 10.1% at the end of 2QFY14. After this
development, bank’s margin would be impacted and accordingly UCO bank
loses the valuation premium. Although bank’s management is focusing on
other area of growth like branch expansion and customer acquisition. We
slightly tweak our earnings and reduce our book value estimate from Rs.175.5
to Rs.168.8. Now our revised price target for the stock would be Rs.84 which is
0.5 times of FY14E book value.
Strong performance in NII on account of lower cost of deposits
During quarter UCO bank’s performance was better than expectation as bank’s NII
grew by 55% YoY to Rs.1569 Cr aided by interest income growth of 5.92% and
interest expenses de-growth of 9.68%. On yearly basis credit deposits ratio declined
to 71.6% from 72.6% but loan and deposits growth of 15% and 16% supported
overall business growth and hence margin expansion. Other income de-grew by
1.6% YoY to Rs.209 cr largely due to lower treasury gain. Total income registered
growth of 45.1% YoY to 1779 cr.
Stable asset quality on sequentially
In absolute term GNPA was flat on QoQ basis and registered mere deterioration of
3% largely due to asset quality. During quarter bank’s reported fresh slippages were
Rs.725 cr as against Rs.629 cr in 1QFY14. Out of Rs.725 cr, over Rs.400 cr
slippages came from infra segment alone. In percentage term GNPA stood at 5.3%
from 5.7% in 1QFY14. In absolute term provision increased by 6% QoQ taking net
NPA increased to 7% QoQ. In absolute term NPA was 3.1% flat on sequential basis.
Provision coverage ratio without technical write off stood at 46.6% as against 45.1%
in 1QFY14 and 41.1% in 2QFY13.
Financials
NII
Total Income
PPP
Net Profit
EPS
2011
3845
4770
2695
907
16.5
2012
3902
4868
2811
1109
17.7
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
Rs, Cr
2013
2014E
2015E
4582
4721
5533
5534
6063
6875
3357
4184
4744
618
1573
1977
9.3
23.7
29.7
(Source: Company/Eastwind)
7

8. UCO BANK
Higher earnings on account of robust growth in NII, lower CI ratio and flat
provisions
Net profit during the quarter registered growth of 286% YoY to Rs.400 cr largely due to
higher NII growth, lower cost income ratio and lower provision on account of stable asset
quality. Consequentially ROE and ROA improved to 17.4% and 0.88% from 4.5% and
0.4% in 2QFY13 respectively.
Current deposits grew almost double led CASA improvement
On balance sheet growth front, bank’s deposits grew by 16% YoY to Rs.1888 bn
supported by current account deposits growth of 173% YoY and 12% rise in saving
deposits. CASA deposits registered the growth of 56% YoY to Rs.60096 cr. In
percentage of total advances, CASA stood at 31.8% from 23.7% in 2QFY13. Growth in
current deposits was on account of providing facilities to Indo Iran trade payments which
is presently covering 45% of oil imports from Iran and India export. Going forward 100%
of oil import from Iran is to be covered and further fertilizer import from Iran is also being
considered by Government. This facilities will generated almost about 17000-18000 cr as
per management. Loan grew by 15% YoY to Rs.1352 bn.
Margin improved due to higher declined of cost of deposits than loan yield
Net interest margin of the bank improved by 11 bps YoY to 2.84% from 2.73% in 1QFY14
due to 22% YoY declined cost of deposits to 6.09% from 7.44% in 2QFY13. Lower cost
was account of higher growth in low cost current deposits. Yield on loan (EW calculated)
for the quarter stood at 10.1% from 10.1% in 1QFY14 and 10.9% in 2QFY13.
Management expects NIM of 3% at the end of year end on the back of current deposits
support.
Valuation & View
We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on account of
bank’s unlikely to get benefit of western sanction against Iran. Late last month US and six
other major powers have imposed sanction against Iran for its nuclear deal. In order to
quality for waiver sanction against Iran, India has cut back sharply on purchase of oil from
Iran. UCO was the major beneficiary of current account deposits of India-Iran oil facilities.
In our banking sector coverage universe, UCO bank’s cost of deposits were lowest at
6.1% whereas yield on loan was 10.1% at the end of 2QFY14. After this development,
bank’s margin would be impacted and accordingly UCO bank loses the valuation
premium. Although bank’s management is focusing on other area of growth like branch
expansion and customer acquisition. We slightly tweak our earnings and reduce our book
value estimate from Rs.175.5 to Rs.168.8. Now our revised price target for the stock
would be Rs.84 which is 0.5 times of FY14E book value.
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
8

9. UCO BANK
Fundamental through graph
Source:Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
9

10. UCO BANK
Quarterly Result
Interest/discount on advances / bills
Income on investments
Interest on balances with Reserve Bank of India
Others
Total Interest Income
Others Income
Total Income
Interest Expended
NII
Other Income
Total Income
Employee
Other Expenses
Operating Expenses
PPP( Rs Cr)
Provisions
PBT
Tax
Net Profit
2QFY14
3396
1026
8
14
4444
209
4653
2875
1569
209
1779
382
230
612
1166
759
408
7
400
1QFY14
3152
968
37
49
4207
462
4669
2843
1364
462
1826
376
185
562
1264
741
523
12
511
2QFY13
3230
897
32
37
4196
213
4409
3183
1013
213
1226
332
180
512
714
597
116
13
104
Balance Sheet
Equity Capital
Reserve & Surplus
Net Worth
Deposits
Borrowings
Other Liabilities & Provisions
Total Liabilities
Cash & Balance with Bank
Balance with bank & money at call
Investments
Advances
Fixed Assets
Other Assets
Total Assets
2576
8195
10770
188779
6605
6262
212416
7081
8045
55193
135233
977
5887
212416
2576
7719
10295
177050
6462
6566
200373
7600
8218
52999
125141
926
5489
200373
2488
6644
9132
162567
6601
4773
183073
7585
1957
49589
118045
815
5082
183073
Asset Quality
GNPA
NPA
% GNPA
% NPA
% PCR(Without technical writeoff)
7,376
4228
5.3
3.1
46.6
7,178
3939
5.7
3.1
45.1
% YoY
% QoQ
5.1
7.7
5,888
3468
5.0
2.9
41.1
14.4
5.9
-73.7
-77.3
-61.9
-71.6
5.9
5.6
-1.6
-54.7
5.6
-0.3
-9.7
1.1
54.9
15.1
-1.6
-54.7
45.1
-2.6
15.2
1.6
27.7
24.2
19.6
9.1
63.4
-7.8
27.1
2.3
249.9
-22.1
-42.5
-39.0
285.9
-21.7
3.5
0.0
23.3
6.2
17.9
4.6
16.1
6.6
0.1
2.2
31.2
-4.6
16.0
6.0
-6.6
-6.8
311.1
-2.1
11.3
4.1
14.6
8.1
19.9
5.5
15.8
7.2
16.0
6.0
25.3
2.8
21.9
7.3
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
10

11. UCO BANK
Income Statement
2011
2012
2013
2014E
2015E
Interest Income
Interest Expense
NII
Change (%)
Non Interest Income
Total Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions
PBT
PAT
Change (%)
11371
7526
3845
65.4
925
4770
45.0
2075
2695
58.0
1788
907
907
-10.4
14632
10730
3902
1.5
966
4868
2.0
2056
2811
4.3
1661
1150
1109
22.3
16752
12170
4582
17.4
952
5534
13.7
2177
3357
19.4
2710
647
618
-44.2
20313
15592
4721
3.0
1342
6063
9.6
1880
4184
24.6
2596
1588
1573
154.5
24333
18800
5533
17.2
1342
6875
13.4
2131
4744
13.4
2548
2196
1977
25.6
99071
32031
6
5475
42927
99071
20
115540
17
34403
7
12901
45771
115540
17
128283
11
55733
62
9492
52245
128283
11
153939
20
67707
21
12315
62692
153939
20
184727
20
81249
20
14777
75231
184727
20
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost of Deposit
Avg. Cost of Borrowimgs
8.6
6.6
4.7
12.5
9.9
7.1
6.5
6.1
10.0
7.1
6.6
7.0
10.0
7.5
7.0
6.0
10.0
7.5
7.1
6.0
Valuation
Book Value
CMP
P/BV
135
107
0.8
137
79
0.6
146
50.1
0.3
169
74.55
0.4
183
74.55
0.4
Balance Sheet
Deposits( Rs Cr)
Change (%)
of which CASA Dep
Change (%)
Borrowings( Rs Cr)
Investments( Rs Cr)
Loans( Rs Cr)
Change (%)
Ratio
Source: Company/Eastwind
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
11

12. JLR VOLUME UPDATE : NOVEMBER 2013
Strong Performance For The Month.
JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the
company for the month sold 37403 units up by 25% YoY. This total volume of JLR includes
6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is
marked by stellar performance by Jaguar with volume growth of almost 55 % YoY while the
Land Rover portfolio has grown by 20 % YoY.The new F type Jaguar is getting good
response.Company manage to sell 557 units of F-Type this month.
The volumes for JLR across geographies came relatively, good all the geographies have
done well except for UK where volume de grew by 1%YoY. The markets of china continues
to do well for the company. The Chinese market have grown over 40% YoY for the JLR
followed by ROW markets.
The performance of JLR on Geography Wise has been Tabulated as under :
Monthly Performance of JLR : Geography Wise
Model
Nov-13
Nov-12
Change % (YoY)
UK
5231
5276
-1%
North America
6657
4843
37%
Europe
7300
6829
7%
China
9751
6879
42%
Asia Pacific
1882
1428
32%
All other markets
6582
4638
42%
(Source: Company/Eastwind)
The various models under JLR portfolio have grown well for the company however Jaguar
XJmodel has done exceptionally well .The company has sold 6244 units of Jaguar for the
Nov2013.The Land Rover is also growing good for the company. The Range Rover Evoque has
grown by 10% YoY to 10953 units for the month.
The Table shows the Performance of Jaguar Portfolio : Model Wise.
Monthly Performance of Jaguar : Model Wise
Model
Nov-13
Nov-12
Change % (YoY)
XF
3825
2743
39%
XJ
1628
1004
62%
XK
234
284
-18%
F-TYPE
557
NA
(Source: Company/Eastwind)
The Table shows the Performance of Land Rover Portfolio : Model Wise.
Monthly Performance of Land Rover: Model Wise
Model
Nov-13
Nov-12
Change % (YoY)
Defender
1615
1274
27%
Freelander
4124
4517
-9%
Discovery
3424
3683
-7%
New Range Rover Sport
6833
0
NA
Range Rover Sport
106
4909
NA
Range Rover
2
1417
NA
Range Rover Evoque
10953
9919
10%
New Range Rover
4102
143
NA
(Source: Company/Eastwind)
Earlier management said that company would invest 1.5 billion pounds for new technicallyadvanced aluminum vehicle architecture in forthcoming models. The first new model to
utilize this innovative architecture will be an all-new mid-sized sports sedan from Jaguar.
The product will be launched by 2015.
We continue to like Tata Motors, led by strong volume traction at JLR to continue over the
coming months as new Range Rover Sport get rolled out across more geographies, in
addition to continued traction from RR and F-Type, which in turn will boost realisation and
margin.
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

13. Persistent System.
"BUY"
13th Dec' 13
"Persistently innovating.."
Company update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
BUY
876
960
890
10%
8%
533179
PERSISTENT
906/477
3505
12139
6237
Stock Performance
Absolute
Rel. to Nifty
1M
7.5
4.9
1yr
83.5
77.8
YTD
126.6
107.9
Share Holding Pattern-%
Current
Promoters
FII
DII
Others
38.96
15.28
21.23
24.53
1 year forward P/E-x
1QFY14 4QFY13
38.96
14.84
19.31
26.89
38.96
12.39
21.59
27.06
Persistent Sytem’s management remains confident of FY14 with deal pipeline being
strong and remains focused on increasing the share of IP-led revenues in its portfolio.
The management expects to see more than 15% dollar revenue growth, more than
NASSCOM guidance of 12-14 % for FY14E.
With the potential revenue growth, strong deal pipeline and multi-year relationships
with marquee clientele in the Infrastructure vertical, we upgrade this stock and expect
for better earning visibility across niche IT players.
Recently , Persistent System reported superlative set of numbers during the 2QFY14
with 21%(QoQ) sales growth in INR term and 8.6%(QoQ) growth in USD term led by
38%(QOQ) growth on the intellectual property (IP) revenues. PAT growth was at 6.5%
(QoQ).
Margin ramp up: During the quarter, Its EBITDA margin improved by 180bps to 23.3%,
positively impacted by currency gain(270bps), while during the quarter company wage
hike to its off shore employee at a range of 8-9% was impacted margin by 310 bps
adversely. However, management expects to maintain margin at a range of 24-25% for
FY14E.
On segmental front: The Company’s cash cow segment Infrastructure and System,
which contributes 69% on sales, grew by 21% and life science (13% contribution on
sales) was up by 57% sequentially. While, Telecom space (17.6% contribution on sales)
increased marginally by 3% (QoQ).
Clients Metrics: During the quarter, company added 2 clients at 32 under medium
category( >$1mn to $3mn) and 1 client at 16 from large ( > $ 3Mn) . Revenue from top-1
client was improved from 21.2% (1QFY14) to 22.5% . DSO at 62days, almost 12
quarters low.
Persistent's management suggests that deal pipeline are looking strong and seeing
good activity and traction in the market across the board. Its focus on some of newer
technologies like cloud, analytics and mobility are gaining a lot of traction because of
pickup in demand environment. The emerging themes, (CAMB) Cloud, Analytics,
Mobility, and Big data could also see strong demand traction ahead. Because of
actively investment in these themes, management is very confident to see healthy
growth and also they expressed their confidence to beat the NASSCOM guidance (1214% revenue growth for FY14E).
View and Valuation: The company’s focus is shifting greater proportion to IP led services
and company has marquee clientele in cutting-edge technologies around cloud,
mobility, collaboration and analytics; witnessing faster growth. Considering the
company’s ability to achieve scale and growth, we rate “BUY” on the stock and we revise
our target price from Rs 890 to Rs 960. At a CMP of Rs 876, stock trades at 13.8x FY14E
earnings.
Financials
Rs, Crore
2QFY14
1QFY14
(QoQ)-%
2QFY13
(YoY)-%
Revenue
432.37
357.29
21.0
326.86
32.3
EBITDA
100.8
76.8
31.3
89.06
13.2
PAT
60.8
57.1
6.5
44.71
36.0
EBITDA Margin
23.3%
21.5%
180bps
27.2%
(390bps)
PAT Margin
14.1%
16.0%
(190bps)
13.7%
40bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
13

14. Persistent System.
Operating Metrics
2QFY12
Client Concentration
Top1
Top 5
Top 10
Billing Rate-USD/ppm
Onsite - Linear
Offshore - Linear
Yeild per Employee(excld- Trainee)
Employee Metrics
Total Employee
Attrition
Utilization rate %(xclude IP Led )
3QFY12
4QFY13 1QFY13 QFY13
3QFY13 4QFY13
16.0%
38.6%
49.4%
15.9%
37.0%
48.3%
17.2%
36.6%
48.8%
17.8%
33.5%
45.3%
20.7%
36.3%
47.0%
21.1%
37.3%
49.4%
12665
3803
3208
12387
3778
3247
12603
3895
3350
12789
3898
3345
12863
3978
3746
12772
4032
3817
6900
17.7%
73.8%
6706
17.4%
74.1%
6628
18.3%
71.7%
6536
18.9%
74.1%
6370
16.9%
75.2%
6719
16.0%
77.3%
1QFY14
2QFY14
21.2%
34.7%
46.0%
22.5%
36.4%
47.3%
14014
4143
3769
14567
4111
3602
14283
4109
3919
6970
14.4%
72.5%
7144
14.2%
70.0%
7457
14.0%
71.7%
21.6%
36.7%
47.9%
Financials
Rs in Cr,
Sales
Employee Cost
Cost of technical professionals
Other expenses
Total expenses
EBITDA
Depreciation
Other Income
EBIT
Interest Cost
Profit (+)/Loss (-) Before Taxes
Provision for Taxes
Net Profit (+)/Loss (-)
Growth-% (YoY)
Sales
EBITDA
PAT
Expenses on Sales-%
Employee Cost
Other expenses
Tax rate
Margin-%
EBITDA
EBIT
PAT
Valuation:
CMP
No of Share
NW
EPS
BVPS
RoE-%
P/BV
P/E
FY10
601.16
368.74
0
86.05
454.79
146.37
33.52
11.23
112.85
0
124.08
9.05
115.03
FY11
775.84
481.62
30.67
105.24
617.53
158.31
42.39
34.44
115.92
0
150.36
10.62
139.74
FY12
1000.3
599.05
41.68
135.2
775.93
224.37
61.1
34.44
163.27
0.00
197.71
55.09
142.62
FY13
1294.5
719
54
218
990.78
303.72
78
34.44
225.44
0.03
259.851
75.37
184.481
FY14E
1657.54
895.07
82.88
290.07
1268.02
389.52
93.54
66.30
295.98
0.00
362.29
108.69
253.60
FY15E
2053.93
1119.39
102.70
379.98
1602.06
451.86
84.18
71.89
367.68
0.00
439.57
131.87
307.70
1.2%
60.2%
74.1%
29.1%
8.2%
21.5%
28.9%
41.7%
2.1%
29.4%
35.4%
29.4%
28.0%
28.3%
37.5%
23.9%
16.0%
21.3%
61.3%
14.3%
7.3%
62.1%
13.6%
7.1%
59.9%
13.5%
27.9%
55.5%
16.9%
29.0%
54.0%
17.5%
30.0%
54.5%
18.5%
30.0%
24.3%
18.8%
19.1%
20.4%
14.9%
18.0%
22.4%
16.3%
14.3%
23.5%
17.4%
14.3%
23.5%
17.9%
15.3%
22.0%
17.9%
15.0%
310.0
4.0
639.0
28.8
159.7
18.0%
1.9
10.8
366.7
4.0
747.1
34.9
186.8
18.7%
2.0
10.5
409.2
4.0
840.5
35.7
210.1
17.0%
1.9
11.5
541.0
4.0
1018.3
46.1
254.6
18.1%
2.1
11.7
876.0
4.0
1234.4
63.4
308.6
20.5%
2.8
13.8
876.0
4.0
1504.7
76.9
376.2
20.4%
2.3
11.4
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
14

15. Coal India LTD.
Company Update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
289
350
350
21%
NA
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
533278
COALINDIA
372/238
176226
17622
6308
Stock Performance-%
1M
-1.3
2.8
Absolute
Rel. to Nifty
1yr
-21.2
8.8
YTD
-21.4
8.6
"Buy"
12nd Dec' 13
CCI’s Rs 1,773-crore penalty:
The Competition Commission of India (CCI) imposed a Rs 1,773 cr fine on Coal India, the
country' monopoly commercial coal miner, based on a complaint filed by two power
companies that India's monopoly producer of coal abused its dominance. The
government owns 90% stake in Coal India, and has traditionally drawn hefty dividend
income from the cash rich coal company. In 2012-13, the company paid a total dividend
of Rs 8,843 cr out of which the government's share was Rs 7,959 cr. A Rs 1800-crore fine
could possibly mean less profits for the company and less dividend income for its owners.
But as the main owner, the government, will pocket this amount in the form of a fine, it
will not be poorer in any way.
Coal India to get Rs 2,119 cr extra on coal price revision :
Coal India Ltd is likely to get additional revenue of Rs 2,119 cr in this fiscal on account of
revision in dry fuel prices.CIL (Coal India Ltd) has revised and rationalized the basic
notified prices of all the grades of non-coking coal except GI, G2 and G5.The estimated
additional revenue due to revision of basic notified price for the current financial year is
Rs 2,119 cr.CIL had revised the prices of all grades of coal, barring three, for all its eight
producing subsidiaries with effect from May 28 this year. Mahanadi Coalfields which is
expected to contribute Rs 686 crore, followed by Rs 664 crore from Northern Coalfields
and Rs 495 crore from South Eastern Coalfields.
Share Holding Pattern-%
Promoters
FII
DII
Others
2QFY14
90.0
5.5
5.3
2.2
1QFY14 4QFY13
90.0
90.0
5.4
5.4
2.3
2.0
2.4
2.6
1 yr Forward P/B
The company’s net sales grew 5.8% yoy to 15,411cr (above our estimate of 15,083cr).
Sales volumes stood at 109mn ton in 2QFY2014 compared to 102mn ton in 2QFY2013.
The blended realizations declined by 1.4% yoy to 1,414/ton (despite price hike) due to
lower realization on FSA coal.Despite 5.8% yoy growth in top-line, EBITDA decreased by
8.2% yoy to 3,176cr due to higher raw material costs (18.1% yoy to 2,251cr) and
contractual expenses (27.6% yoy to 1,394cr). The depreciation expenses increased by
27.8% yoy to 495cr; hence, adjusted net profit was flat yoy at 3,043cr .
Coal India 2QFY2014 top-line was above our estimate. The company’s net sales grew
5.8% yoy to 15,411cr. Sales volumes stood at 109mn ton in 2QFY2014 compared to
102mn ton in 2QFY2013. The blended realizations declined by 1.4% yoy to 1,414/ton
despite price hikes. Its FSA coal’s realizations were lower than expected due to lower
grade coal. The company liquidated 11mn ton of old stock.
Source - Comapany/EastWind Research
Financials :
Net Revenue
EBITDA
Depriciation
Interest Cost
Tax
PAT
Q2FY14
15411
2794
495
8
1412
3052
Y-o-Y %
5.8
-2.4
27.8
-22.2
-4.2
-0.8
Q-o-Q %
-6.4
-29.4
4.1
7.0
-27.9
-18.2
Q2FY13
14573
2862
387
10
1475
3078
Q1FY14
16472
3958
476
7
1958
3731
(In Crs)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
15

16. Coal India LTD.
Coal India 2QFY2014 top-line was above our estimate. The company’s net sales grew
5.8% yoy to 15,411cr. Sales volumes stood at 109mn ton in 2QFY2014 compared to
102mn ton in 2QFY2013. The blended realizations declined by 1.4% yoy to 1,414/ton
despite price hikes. Its FSA coal’s realizations were lower than expected due to lower
grade coal. The company liquidated 11mn ton of old stock.
CIL’s e-auction realizations have declined over the past one year on account of decline
in international coal price coupled with weak domestic demand. Going forward, we
expect CIL’s profitability to be affected due to lower e-auction realizations, sticky staff
costs and other expenses. Moreover, given the price hike taken during 4QFY2013, we
do not expect CIL to undertake any further price hikes in the near-term.
OUTLOOK:
We expect modest increase in sales volumes growth during FY2013-15 on account of
poor offtake capabilities of CIL. Also, we expect CIL’s margins to decline during FY2014
due to lower e-auction realizations and higher staff costs/other expenses.News flows
related to further divestment in CIL by the government is likely to keep the stock price
under pressure in our view. we recommend Buy rating on the stock with our previous
target price Rs.350.
OPERATING MATRIX
Coal Production in MT
Coal Offtake in MT
Revenue Generation From unit Ton
Avg Man Power (in numbers)
Productivity Per Man
FY10
431
416
1073
404744
1066
FY11
431
425
1183
390243
1105
FY12
436
433
1441
377447
1155
FY13
452
465
1468
364736
1240
P/L PERFORMANCE
Net Revenue from Operation
Cost Of Projects & Contractual
Power and fuel
contractual expenses
Employee benefit Expence
Expenditure
EBITDA
Depriciation
Interest Cost
Tax
PAT
ROE
FY11
50234
7573
1755
4580
20481
40390
9843
1673
79
5595
10868
33
FY12
62415
5123
2013
4901
26705
40857
21558
1969
54
6484
20588
51
FY13
68303
6556
2333
5802
27943
50219
18084
1813
45
7623
17356
36
FY14E
69864
8383
2595
6057
28943
53738
16126
1860
34
7332
15870
33.1
Narnolia Securities Ltd,
16

17. Coal India LTD.
B/S PERFORMANCE
Share capital
Reserve & Surplus
Total equity
Long-term borrowings
Short-term borrowings
Long-term provisions
Trade payables
Short-term provisions
Total liabilities
Intangibles
Tangible assets
Capital work-in-progress
Long-term loans and advances
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Total Assets
RATIOS
P/B
EPS
Debtor to Turnover%
Creditors to Turnover%
Inventories to Turnover%
CASH FLOWS
Cash from Operation
Changes In Working Capital
Net Cash From Operation
Cash From Investment
Cash from Finance
Net Cash Flow during year
Trading At :
FY10
6316
20956
27273
343
1620
2545
772
1404
5443
0
12035
2211
610
4402
2169
39078
8066
17921
FY10
0.0
0.0
4.9
1.7
1.0
FY11
6316
26998
33314
1334
33
22461
645
12387
8490
779
12065
2057
845
5586
3419
45806
11180
21646
FY11
5.7
17.3
22.8
4.3
3.7
FY12
6316
34137
40453
1305
0
28271
829
15595
9785
759
12681
1848
1017
6071
5663
58203
13478
24688
FY12
5.5
32.6
29.2
4.3
3.1
FY13
6316
42156
48472
1078
0
31144
837
20447
12385
712
12754
3496
1181
5618
10480
62236
16189
25479
FY13
4.0
27.5
52.7
4.2
2.8
FY10
FY11
FY12
10727
12819
16323
-131
-3822
3565
10596
8997
19888
950
697
-10410
2163
2911
-7382
13708
12606
2095
Down 21% from its 52week High
Up 14% from its 52 week Low
FY13
15948
-6839
9109
-1833
-7852
-575
Narnolia Securities Ltd,
17

18. LUPIN
"BUY"
11th Dec' 13
"Optimistic Guidance "
Result Update
BUY
CMP
Target Price
Previous Target Price
Upside
Change from Previous
873
1006
15%
-
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs, Cr)
Average Daily Volume
Nifty
500257
LUPIN
946/569
39101
395892
6332
Stock Performance-%
1M
Absolute
Rel. to Nifty
1yr
-1
-4
46
39
YTD
41
23
Share Holding Pattern-%
Promoters
FII
DII
Others
Current 1QFY14 4QFY1
3
46.8
46.8
46.8
31.5
30.7
28.8
12.1
12.4
14.3
9.7
10.1
10.0
One Year Forward P/E
The management of the company in its latest media interaction stated that the company is
confident of logging 15-20 % CAGR in US and India in the days to come on the back of rich
pipeline as well as acquisition based strategy. Management further said that company is
expecting to launch about 100 new drugs in next three years. This new launch will include
an entire range of oral contraceptives and opthal products.
Lupin earlier posted slightly better than expected 2QFY14 results ,the company reported
its net sales at Rs 2631 Cr up by 18 % YoY on the back of‐ strong business performance
from US and Europe formulation segment. The segment grew by 31% YoY to Rs. 1108.9
Cr during 2Q FY14, against Rs. 844.4 Cr for Q2, FY 2012 13.This segment contributes
42% to overall Company sales.US brands business contributed 10% of total US sales,
whereas the generics business contributed 90% for the quarter under review.
The
Indian
formulation
business
contributed ‐ 25%
of the
Company’s
overall revenues for the quarter.Company’s India formulation business grew by 9%
‐
recording revenues of Rs. 6,635 m. during Q2, FY 2013 14, as compared to Rs. 6,064 m.
for Q2, FY 2012 13. The company’s rest other business geographies to have performed
relatively good for the company.
The operating EBITDA for the 2QFY14 came at Rs 660 Cr and OPM stands at 24.7%.The
RM cost decreased by 7.7% to 32.0% of net sales at Rs. 841.3 Cr during 2QFY14 as
compared to Rs. 889.8 Cr for 2Q FY 13.Manufacturing & other expenses increased by to
30.4% of net sales at Rs. 798.8 Cr during 2Q FY14 as compared to Rs. 591.7 Cr for the
same period last fiscal.Revenue expenditure on R&D stood at 8.3% of net sales at Rs.
217.2 Cr.
The Net profits for 2QFY14 came at Rs 417 Cr. The higher incidence of tax during the
quarter is due to tax provision of Rs 51 Cr made on dividends received from subsidiaries
The company has filed 7 ANDAs and received 6 ANDA approvals in the quarter. Cumulative
ANDA filings with the US FDA now stand at 183 with the company having received 92
approvals to date.
We have slightly raise our TP to Rs 1006 on the back management guidance post the
results. The management is quite optimistic for its business outlook going forward and
believes that the company will achieve its set target going forward.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
2QFY14
2668
660
417
24.7%
15.6%
1QFY14
2476
590
405
23.8%
16.4%
(QoQ)-%
7.8
11.9
3.0
90bps
(70bps)
2QFY13
2301
515
297
22.4%
12.9%
Rs, Crore
(YoY)-%
15.9
28.2
40.4
240bps
270bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
18

19. LUPIN
Sales and PAT Trend (Rs)
company reported its net sales at Rs 2631 Cr
up by 18 % YoY on the back of strong
business
performance
from
US and Europe formulation segment.
(Source: Company/Eastwind)
OPM %
(Source: Company/Eastwind)
NPM %
The higher incidence of tax during the
quarter is due to tax provision of Rs 51 Cr
made on dividends received from subsidiaries
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
19

20. Risk Disclosure & Disclaimer: This report/message is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you.
Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any action based upon it. This report/message is not for public distribution and has been furnished to you solely for your
information and should not be reproduced or redistributed to any other person in any from. The report/message is based upon publicly available information, findings of our research wing
“East wind” & information that we consider reliable, but we do not represent that it is accurate or complete and we do not provide any express or implied warranty of any kind, and also
these are subject to change without notice. The recipients of this report should rely on their own investigations, should use their own judgment for taking any investment decisions keeping
in mind that past performance is not necessarily a guide to future performance & that the the value of any investment or income are subject to market and other risks. Further it will be safe
to assume that NSL and /or its Group or associate Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise, individually or otherwise in
the recommended/mentioned securities/mutual funds/ model funds and other investment products which may be added or disposed including & other mentioned in this report/message.
20