AUGUST 2, 2017 - Kotak Securities · 3QFY19 net profits of the Nifty-50 Index increased 2.1% yoy...

AUGUST 2, 2017

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 2

Market Strategy March 2019

MARKET OUTLOOK FOR MARCH 2019 Market Outlook: Markets have continued to remain volatile led by mixed global cues as well as border tensions across India and Pakistan. After the IAF strikes across the LoC, the advantage is now with the ruling party as against opposition. Domestically, macros have improved in terms of lower inflation, possibility of further cut in interest rates by RBI, easing off of oil prices as well as expectations of healthy growth in profits for FY20. However, border tensions, election dates, pre-poll alliances and more importantly the government’s ability for striking a fine balance between populism and prudence will keep markets on their toes in the coming months. Globally, easing off of US-China trade spat, FOMC stance on balance sheet normalization, Brexit and oil prices will also be deciding factors for market movement.

Portfolio Strategy: Keeping in mind the volatility expected in 2019 led by factors such as developed market slowdown, US-China trade fears, Brexit, domestic elections, oil prices, it would be ideal to have a bottom up approach and pick and choose good quality, beaten down stocks from respective sectors. To weather the on-going volatility which may remain till middle of CY19 (i.e. till Central elections), it is ideal to have higher allocation into high earnings growth large caps and midcaps (with strong management pedigree and reasonable valuations). Among the large caps one can focus on select stocks from sectors like banks, select pharmaceuticals, IT services, metals & mining and oil & gas. In the mid-caps, one can focus on select stocks from sectors like capital goods, construction and auto ancillaries.

Earnings: 3QFY19 net profits of the Nifty-50 Index increased 2.1% yoy and were led by better-than-expected results of the downstream oil companies (higher-than expected refining margins). On an ex-energy basis, 3QFY19 net profits increased 11.1% yoy. Sectors that delivered strong YoY growth in earnings were banks, capital goods, and IT services. Sectors that disappointed on YoY earnings growth were automobiles, telecom, metals & mining and real estate. Based on our institutional forecast, we expect net profits to grow by 26% in FY2020 led mainly by sectors like banks, automobile, pharmaceuticals as well as consumption related sector.

Valuations: Based on 13%/26% estimated growth in earnings of FY19E/20E, the Nifty is currently trading at 21.6x/16.8x FY19E/20E, respectively (free float basis). Valuation of Nifty looks reasonable when viewed against recent historical valuations of ~18-20x on forward PE basis (mainly due to high earnings growth expectation). However, considering the border tensions coupled with election uncertainty, we expect volatility to continue and would recommend a bottom-up approach across large cap and mid-cap.

TOP INVESTMENT IDEAS Recommended Stocks

Company CMP* Target Price Potential Upside 52 Week H/L Market Cap (Rs) (Rs) (%) (Rs) (Rs mn)

HDFC Life Insurance 352 435 23.5 548 / 344 710,579 LIC Housing Finance Ltd 476 590 24.1 584 / 388 239,967 Bharat Electronics 83 100 21.2 158 / 73 201,019 Aegis Logistics 199 250 25.7 300 / 170 66,433 Suven Life Sciences 241 425 76.5 338 / 161 30,656 Surya Roshini Ltd 224 330 47.4 454 / 185 12,185

Source: Kotak Institutional Equities; Kotak Securities – Private Client Research; *CMP as on 28 February 2019.

Teena Virmani [email protected]

+91 22 6218 6432



1-month performance of benchmark global indices (%) - (February 2019)

Source: Bloomberg

Market performance – sector wise (February 2019)

Source: Bloomberg

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GLOBAL MARKETS Global markets moved up during the month post FOMC’s stance to keep rates unchanged as well as positive hopes on resolution of US-China trade spat. However, uncertainty regarding Brexit is still weighing on the markets and it is important to see how balance sheet normalization is going to be done in US.

US – Balance sheet normalization and rate decisions For United States, the year started off with a partial government shutdown, which is costing the economy $11 billion along with the lower reading for US consumer confidence in January which although rebounded in the month of February. Domestic economic data points such as inflation, unemployment, GDP growth rate along with global uncertainties pertaining to growth slowdown, trade impasse and government budget negotiations are likely to weigh on the FOMC decision on rate hikes going forward.

Along with FOMC meet, it is important to see how the central bank plans to proceed with the reduction of bonds upto $4 trillion it holds on its balance sheet. In August 2007, before the financial crisis hit, the Fed’s balance sheet totaled about $870 billion. By January 2015, after large-scale asset purchases, its balance sheet had swelled to $4.5 trillion (currently ~$4 trillion). Balance sheet normalization paired with interest rate hikes will cause the economy to slow so it is important to see at what level it is going to end. While Fed officials expect it to happen smoothly but it has become a matter of concern as financial conditions weakened during fourth quarter.

US CPI inflation (%) US unemployment (%)

Source: Bloomberg Source: Bloomberg

US GDP growth – Slowing global manufacturing activity, tighter financial conditions, sluggish business equipment spending, and lackluster federal government spending (due in part to the government shutdown in January) all contributed to the weakest quarter for U.S. growth in two years. US GDP grew at a 2.6 percent annual rate in the final three months of last year which marked a significant slowdown from the middle of the year, when tax cuts and government spending increases had briefly pushed growth above 4 percent. However, it stood better than the industry estimates. For the full year, growth topped at 3.1% for 2018. Going forward, FOMC expects US GDP growth to slow to 2.3% and 1.8% in 2020 and 2021 respectively.

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US china trade agreement timeline - US has delayed additional tariffs on China on substantial progress on bilateral trade talks between the two largest economies. US had planned to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports into the United States from 1st March if an agreement between the world's two largest economies were not reached. Progress had been made in divisive areas including intellectual property protection, technology transfers, agriculture, services and currency between the two nations. Settlement of trade dispute between the two nations would ease some uncertainty from the markets.

US GDP growth (%) China GDP growth (%)

Source: Bloomberg Source: Bloomberg

Brexit uncertainty to weigh on markets – Uncertainty around UK’s exit from the European Union is also weighing on the market sentiment. There is a possibility that Brexit may get delayed by two months as plans are being considered to extend Article 50 after the vote on Brexit deal has been put off in the Parliament until March 12. This decision increases the chances that Brexit may be delayed beyond 29th March to avoid a potentially disastrous situation where Britain exits with no agreement at all.

Recently, Fitch also mentioned that they may downgrade the United Kingdom's 'AA' debt rating based on growing uncertainty about the negotiations between Britain and the European Union over Brexit. European commission has already downgraded growth forecasts for Euro-zone to 1.3 percent this year from 1.9 percent in 2018 and expects it to rebound in 2020 to 1.6 percent. If it’s a no-deal Brexit, the UK would sever all ties with the EU with immediate effect, with no transition period and no guarantees on citizens' rights of residence. The government fears this would cause significant disruption to businesses in the short-term.

Japan not in a hurry for normalization - Bank of Japan is not in a hurry to cut back on the stimulus and the central bank is even ready to ramp up stimulus if sharp yen rises hurt the economy and derail the path towards achieving its 2 percent inflation target. However, the hurdle for increasing the stimulus would be higher knowing that the profits of financial institutions were impacted negatively by near-zero interest rates.

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Brent - Crude prices have moved up by nearly 20 percent since the start of the year, when the Organization of the Petroleum Exporting Countries and non-member producers, such as Russia, began cutting production in an effort to reduce a global glut. Optimism about a U.S.-China trade deal also helped prices to rally. Saudi Arabia and other OPEC members are likely to be cautious about relaxing their supply-cut plan after a boost in output in the second half of last year ahead of U.S. sanctions on Iran led to a steep slide in prices.

From January 2019, OPEC, Russia and several other producers have launched new production cuts that aim to remove 1.2 million barrels per day from the market. The alliance will again meet in April, 2019 to determine whether market conditions warrant keeping the curbs in place which expire in June, 2019. This can result in some upward spurt in oil prices from the current levels. But we believe that if developed market growth slows down then it will impact oil prices negatively.

Brent crude (US$/bbl)

Source: Bloomberg

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DOMESTIC MARKETS The month started off with Union Budget announcements with a revised fiscal deficit estimate, higher borrowings for FY20, tax rebates and PM-Kisan scheme to reduce distress in the farm sector. With capital infusion announcements for public sector banks, rate changes in GST to revive real estate sector and transfer of first tranche of Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, government seems to be on track to meet its promises. After the IAF strikes across the LoC, the advantage is now with the ruling party and has enhanced the image of PM Mr Modi as a strong leader. This is also likely to reduce the political noise associated with agrarian crisis or Rafale deal and may have a possibility of making things challenging for the opposition. However, we continue to believe that in next few months with elections approaching, the markets are likely to be volatile and post that the focus is likely to shift towards earnings recovery.

GDP growth moderation GDP growth moderated further to 6.6% in Q3FY19 from a downwardly revised growth of 7% for Q2FY19. This moderation was due to slowdown in agriculture and services and also impacted to some extent by an unfavorable high base. Agriculture slowed to 2.7% in Q3FY19 from 4.2% in Q2FY19 while services moderated to 7.2% from 7.4% in Q2FY19. Industrial growth improved to 7.1% from 6.7% in Q2FY19. The CSO expects FY2019 GDP growth at 7%, implying a GDP growth of around 6.5% in 4QFY19.

Going forward, we believe that global slowdown fears as well as domestic liquidity crunch can have an adverse impact on growth numbers in the coming quarters. Our economists expect FY2020 GDP growth to improve marginally to 7.1% from 6.9% in FY2019 led by the lagged impact of a loose monetary and fiscal policy. We do expect a rate cut of 25 basis points in April from MPC but if growth momentum slows further, we do not rule out the possibility of further 25 bps rate cut post April.

GDP estimates

2016 2017 2018 2019E 2020E

Real GVA 8.0 7.9 6.9 6.7 6.9 Agriculture and allied 0.6 6.3 5.0 2.7 4.9 Industry 9.6 7.7 5.9 7.7 6.7 Services 9.4 8.4 8.1 7.2 7.5 Real GDP 8.0 8.2 7.2 6.9 7.1 Private sector GVA 10.1 8.0 6.5 7.3 7.0 Non-agriculture GVA 9.5 8.2 7.3 7.4 7.2

Source: CEIC, Kotak economics research



Results – Costs coming down 3QFY19 net profits of the Nifty-50 Index increased 2.1% yoy and were led by better-than-expected results of the downstream oil companies (higher-than expected refining margins). On an ex-energy basis, 3QFY19 net profits increased 11.1% yoy. Sectors that delivered strong YoY growth in earnings were banks, capital goods, and IT services. Sectors that disappointed on YoY earnings growth were automobiles, telecom, metals & mining and real estate. INR depreciation, government spending and GST rate cuts provided boost to sectors like pharma, IT, consumption while slowdown in global growth and trade-war fears coupled with liquidity crunch weighed on metals and mining, real estate and auto sector.

Sectoral outlook

Sector Outlook going forward

Auto Sector performance was impacted by higher raw material costs, disappointing volume numbers and increased competition. Going forward we expect moderation in costs and competition to drive growth in profitability.

IT IT sector's contribution to Nifty earnings is likely to be lower in FY20 due to more gradual depreciation of rupee vs dollar, weaker demand from customers due to global slowdown fears and lower margins.

Banks/NBFCs Banks are expected to report strong growth in net profits due to steep decline in loan loss provisions and possible recovery on loans already written off on successful resolution of a few large cases in the NCLT.

FMCG Demand conditions are likely to be positive for the sector over next 12 months with various state government and central government continuing to spend on rural India owing to election schedule. Sector is likely to benefit from steady volume growth and stable margins going forward.

Cement Volume growth remained strong for the sector but realizations were impacted by limited ability of companies to pass on higher costs. Costs seem to have peaked out and moderation is now being witnessed in pet coke and diesel prices which should get reflected in margins from Q4FY19 onwards.

Capital Goods Results were broadly in line with our estimates. Margins seem to have bottomed out and are expected to improve from increased public spending on infrastructure and benign raw material prices. Capacity utilization stands close to 70% across major industries. Growth going forward is likely to be led by improved execution across key segments like railways, roads, mining, defence, steel etc.

Infrastructure Strong order book, sufficient cushion on margins and healthy balance sheet has improved sector's performance. The challenge came mainly from delays in financial closure and delays in receiving appointed dates for HAM projects. However, we expect these issues to get resolved in 1-2 quarters and expect continued healthy execution performance owing to strong book to bill ratios.

Building material For Building material sector, volumes have been on an uptrend while realizations have still not seen meaningful improvement due to increased competition. Significant benefits from e-way bill implementation are yet to be reflected in volumes and market share. Going forward, gains are likely to be led by volume gains in each segment.

Pharmaceuticals Pharma sector growth going forward is going to be led by pickup in new launches of generic products in the US from 2HFY19, which will drive US generic revenues and overall, revenues and profits

Metals The metals & mining sector has seen meaningful earning downgrades on growing concerns about global economic slowdown and US-China trade spat. Going forward, earnings recovery would be contingent upon how developments span out on US-China trade spat and global economic recovery.

Oil and Gas The earnings of the downstream oil sector are somewhat uncertain given risks of possible government intervention in pricing of diesel and gasoline before elections in case oil prices were to rise sharply from here on. For upstream companies, meaningful subsidy burden is not expected in FY20.

Source: Kotak Securities, Kotak Institutional estimates



Going ahead, with reduction in brent crude prices, overall costs for various sectors have come down which should get reflected in the profitability. However, it is important to see if there is any impact on the underlying demand from global slowdown as well as liquidity crunch. With upcoming elections, shift in government’s focus from capex and infrastructure spending towards rural spending may also have a negative impact on earnings.

Based on our institutional forecast, we expect net profits of Nifty-50 to grow by 26% in FY2020 led mainly by sectors like banks, automobile, pharmaceuticals as well as consumption related sector.

RBI to cut rates by another 25 bps in April As per the minutes of February MPC meeting, subdued inflation and faltering growth may lead to MPC going ahead with another 25 bps rate cut in April. The minutes acknowledged that given that the objective of low and durable inflation has been achieved, the focus then shifts to addressing growth. Further monetary accommodation beyond April would, however, depend on the evolution of growth and inflation.

Our economists believe that softer-than-expected January CPI print of 2.05%, MPC’s downward revision of 60-80 bps to the MPC’s 1HFY20 inflation projections to 3.2-3.4% and the opening up of the output gap have improved the probability of multiple rate cuts in 2019. But it would depend on inflation trajectory as there are upside risks to inflation coming from volatility in food and fuel prices, monsoon, fiscal slippages and elevated core inflation.

MPC also noted that the slowdown in global growth may also lead to softening of crude oil prices and moderation in inflation. The downside risks to the inflation outlook also include continuing moderation in food inflation. Oil prices have stabilized currently between $60-65$ and risks of significant overshooting on a sustained basis have reduced sharply. Upside risks to inflation and oil prices would include any kind of supply disruptions in crude oil and geopolitical tensions.

FII and MF inflows Overseas funds have turned buyers again in Feb 2019 led by Fed’s stance to keep the policy rate unchanged at 2.25%-2.5%. YTD in this calendar year, FIIs have bought stocks worth Rs.159 bn whereas domestic Mutual Funds have bought stocks worth Rs.145 bn till 27th Feb, 2019. However, on a monthly basis, FII inflows stood at Rs.164 bn and MF inflows stood at Rs.73.5 bn.

Average monthly net inflows into mutual fund equity schemes have come down and it stood at Rs 61.5 bn for January 2019, down by 6.7% from December 2018 and by 60% from January 2018 inflows. This was impacted by continued volatility in markets and even political uncertainty. FII inflows are improving and going forward if we see Fed pausing sometime in the first half of CY19 then we can expect FII inflows to resume in emerging markets and India. Flows in CY19 could also be a function of the election outcome.



MF/FII flows (in crores)

Source: Bloomberg

Recommendation Based on 13%/26% estimated growth in earnings of FY19E/20E, the Nifty is currently trading at 21.5x/16.8x FY19E/20E, respectively (on free float basis). Valuation of Nifty looks reasonable when viewed against recent historical valuations of ~18-20x on forward PE basis (mainly due to high earnings growth expectation).

Based on Bloomberg consensus estimates, the one year forward PE of Mid Cap Index has now come down to 15.2x and compared to 17x of Nifty-50. We feel the froth and over valuation in the Mid Cap space has come off sharply due to the underperformance vis-à-vis Nifty. We feel there is very high probability of mid & small caps outperforming the large caps in CY19. For this thing to fully materialize in CY19, we need earnings recovery and a clear mandate or a single party led coalition Government at the Centre. Scope of valuation re-rating remains very high in host of mid & small caps provided earnings come in line with estimates.

On a 1 Year forward basis, MSCI India is trading at 17.5x Vs 11.9x of MSCI Emerging Markets. At present the premium of MSCI India over MSCI EM is 48% as compared to the 10 year average of 40%. Considering the election overhang and slightly higher premium over MSCI EM we see less room for any re-rating in India’s valuation.

Our strategy, keeping in mind the volatility expected in 2019 led by factors such as developed market slowdown, US-China trade fears, Brexit, domestic elections, oil prices, would be to have a bottom up approach and pick and choose good quality, beaten down stocks from respective sectors. To weather the on-going volatility which may remain till middle of CY19 (i.e. till Central elections), it is ideal to have higher allocation into high earnings growth large caps and midcaps (with strong management pedigree and reasonable valuations). Among the large caps one can focus on select stocks from sectors like banks, select pharmaceuticals, IT services, metals & mining and oil & gas. In the mid-caps, one can focus on select stocks from sectors like capital goods, construction and auto ancillaries.

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MSCI Emerging Market Vs MSCI India 1 Yr rolling FW PE

Source: Bloomberg

MSCI India Vs MSCI EM - Premium (on FW PE basis)

Source: Bloomberg

One Yr Fw PE chart: Nifty Vs Mid Cap Index

Source: Bloomberg

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HDFC Life Insurance Co Ltd

CMP (Rs) 52 Week H/L (Rs) Mkt Cap (Rs mn) 352 548 / 344 710579

Financials (Rs mn)* FY18 FY19E FY20EAPE 55,300 64,100 75,700 Growth (%) 32.0% 16.0% 18.0%VNB 12,800 15,700 18,200 Growth (%) 39.1% 22.8% 15.6%EVOP 26,800 33,700 39,200 Closing EV 152,100 183,100 220,800 Price/EV (X) 5.1 4.2 3.5 Price/EVOP (X) 29.0 23.0 20.0

VNB Margin (%) 23.1% 24.5% 24.0% Source: BloombergRoEV (%) 22.0% 20.4% 20.6%Operating RoEV (%) 21.5% 22.1% 21.4%

Source: Kotak Institutional Equities; *StandaloneFinancials (Rs mn)* 9M-FY18 9M-FY19 % ChgNet Premium 144,710 186,765 29.1%Benefits Paid 87,004 92,990 6.9%Total Income 1,959 2,449 25.0%PBT 7,878 9,446 19.9%PAT 7,622 9,128 19.8%

Source: Kotak Institutional Equities; *Standalone Source: Bloomberg

This one pager on the company is extracted from last KIE update dated January 22, 2019 and it does not contain events beyond that date. We take no obligation to update the KIErecommendations. While source of all other information is taken from Kotak Institutional Equities, the price performance and shareholding pattern chart is inputted by Kotak PCGresearch team (with source as Bloomberg). It is advisable to read the full KIE report before taking any investment decision on the above company recommendation.

Share Holding Pattern (%)

Analyst: Nischint Chawathe/M B Mahesh/Dipanjan Ghosh/ Shrey Singh (Email: [email protected]; Contact: +91 22 6218 6427)

Price Performance (3 Years)

Target Price (Rs)435 23.5%

Potential Upside (%)

Promoter81.0%

FII8.3%

DII2.7%

Others8.1%

Key Highlights: HDFC Life reported 41% growth in new business premium and 29% growth in overall premium in 9MFY19. The

company increased its protection business to 17.3% of APE in 3QFY19 from 11.3% in 3QFY18. Individual protectioncontributed to about 48% of protection APE in 3QFY19, of the balance 95% was credit protect and 5% was groupprotection.

HDFC Life’s VNB margins expanded 175 bps yoy to 23.4%, down 90 bps qoq. Yoy margin expansion was driven by anincrease in the share of high-margin products (non-par savings and protection).

ULIP, a segment in which new business strain is typically high, was 48% of total APE, lower than 53% in 2QFY19. HDFC Life is the most profitable life insurance company with about 22% operating RoEV and 18% EVOP CAGR during

FY19-21E supported by VNB margins of 24-25%. Bancassurance business continues to be strong at 67% of individual APE in 3QFY19; HDFC group was 56% of

individual APE. Share of direct business is at 16.6% (up 50 bps qoq and 300 bps yoy). HDFC Life continues to investrapidly in the agency business with number of individual agents increasing to 97,483 in 9MFY19 from 71,430 in9MFY18.

HDFC Life reported 11% growth in APE in 3QFY19 to Rs15.4 bn on the back of (1) 70% yoy growth in protectionbusiness and (2) 71% growth in non-par savings. We expect HDFC Life to deliver 25.4% VNB margin and 25.5%operating RoEV in 4QFY19E. This compares with 23.4% VNB margin and 19.8% operating RoEV in 3QFY19.

We expect HDFC Life to deliver overall VNB margin of 24-25%. HDFC Life will trade at 3.4X EV at our appraisal value-based price target.

With most medium-term trends on track (increasing share of protection business, stable persistency, positivevariance in mortality), we retain our positive stance and roll over our fair value to Rs.435.

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HDFC Life

Nifty

LIC Housing Finance Ltd


Financials (Rs mn)* FY18 FY19E FY20ENet Interest Income 37,014 41,614 46,845 Non interest income 1,500 969 1,056 Total Income 38,514 42,583 47,901 Growth (%) 0.1% 10.6% 12.5%PBT 30,619 32,084 37,554 Net profit 22,041 23,100 27,039 EPS (Rs.) 39 46 54 Book value (Rs.) 251 313 356 P/B (x) 1.9 1.5 1.3

NIM (%) 2.4 2.3 2.2 Source: BloombergDebt/equity 11 11 11 RoE (%) 13.5 17.1 17.0 RoA (%) 15.4 19.8 21.1 Disbursements 493,773 552,237 649,736 Source: Kotak Insitutional Equities; *StandaloneFinancials (Rs mn)* 9M-FY18 9M-FY19 % ChgNet operating income 26,514 32,138 21 PBT 19,446 23,940 23 PAT 14,009 17,380 EPS (Rs.) 27.8 34.4 24 NIM 2.28% 2.41%

Source: Kotak Insitutional Equities; *Standalone Source: Bloomberg

This one pager on the company is extracted from last KIE update dated January 30, 2019 and it does not contain events beyond that date. We take no obligation to update the KIErecommendations. While source of all other information is taken from Kotak Institutional Equities, the price performance and shareholding pattern chart is inputted by Kotak PCGresearch team (with source as Bloomberg). It is advisable to read the full KIE report before taking any investment decision on the above company recommendation.


Analyst: Nischint Chawathe/M B Mahesh/Dipanjan Ghosh/ Shrey Singh (Email: [email protected]; Contact: +91 22 6218 6427)




Promoter40.3%

FII28.8%

DII11.0%

Others19.9%

Key Highlights: We expect LIC Housing Finance (LICHF) to deliver 17% loan book CAGR over the next two years, a tad higher than

current growth of 16%. Lower competition from other Housing Finance Company (HFC) and stabilization in overallreal estate markets, coupled will lower interest rates will help inch up core growth for the company.

We are building 20 bps NIM compression for 4QFY19 from 3QFY19 levels, to reflect the impact of increase inincremental cost of funding. We expect NIM to remain a bit muted and expand in 2HFY20 as the bond market rallyeffectively benefits LICHF as well.

Typically, prepayments tend to be high and hence the company’s liquidity position will be better than what isreflected in its ALM. However given its high credit standing in the debt market, strong parentage and comfort ofPSU banks/lenders, the company may not face liquidity challenges, in our view.

The company has revisited its calculations and reduced stage 1 and 2 Expected Credit loss (ECL), passing the sameon to stage 3. Effective stage- 1 ECL is now near zero (17 bps in 2QFY19), stage 2 ECL is about 2 bps (1.52% in2QFY19). Consequently, stage 3 coverage will be 69% up from 59% in 2QFY19.

LICHF’s cost-to-average AUM remained broadly stable at 0.3% (up 2 bps qoq) driven by 16% rise in loan book. Thecompany has slowed down expansion with no new addition of marketing offices for the previous two quarters. Thetotal number of employees (net) increased by 18 qoq in 3QFY19 taking the total employee count to ~2,060.

We are cutting our estimates by 3-6% to reflect marginally lower NIM and regrouping of other income. Post ourrevision, we expect the company to deliver 17% CAGR in loans driving 17% earnings CAGR during FY2019-21E and16-17% medium-term RoE. We retain our December 2020E-based fair value at Rs. 590 (1.5X book).

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LIC Housing Finance Ltd Nifty

Bharat Electronics Ltd


Financials (Rs mn)* FY18 FY19E FY20ESales 104,008 118,692 132,016 Growth (%) 21.0 14.1 11.2 EBITDA 20,352 22,129 23,358 EBITDA margin (%) 19.6 18.6 17.7 PBT 19,570 19,112 19,600 Net profit 14,073 13,665 14,014 Adjusted EPS (Rs) 5.9 5.7 5.8 Growth (%) (7.0) (3.4) 1.8 P/E (x) 14.0 14.5 14.2 BV (Rs/share) 33.0 36.0 40.0 Dividend / share (Rs) 3.40 2.40 2.50 Source: BloombergROE (%) 17.9 16.2 15.2 ROCE (%) 18.8 16.9 15.7 Net cash (debt) 8,411 4,937 30,052 Source: Kotak Insitutional Equities; *Consolidated

Financials (Rs mn)* 9M-FY18 9M-FY19 % ChgRevenues 65,786 80,166 21.9 EBITDA 13,760 19,738 43.4 EBITDA Margin (%) 20.9% 24.6%PAT 8,406 12,586 49.7 PAT Margin (%) 12.8% 15.7%EPS (Rs) 4.5 6.9 53.3 Source: Kotak Insitutional Equities; *Consolidated Source: Bloomberg

This one pager on the company is extracted from last KIE update dated February 14, 2019 and it does not contain events beyond that date. We take no obligation to update the KIErecommendations. While source of all other information is taken from Kotak Institutional Equities, the price performance and shareholding pattern chart is inputted by Kotak PCGresearch team (with source as Bloomberg). It is advisable to read the full KIE report before taking any investment decision on the above company recommendation.


Analyst: Ajinkya Bhat / Aditya Mongia (Email: [email protected]; Contact: +91 22 6218 6427)




Promoter61.9%

FII7.1%

DII20.8%

Others10.2%

Key Highlights: Bharat Electronics is uniquely positioned to benefit from India’s defence modernization and indigenization. Over the years, it has expanded its offerings and now produces a wide range of equipment across communication products,

radars, naval systems, C4I systems, weapon systems, telecom and broadcast, electronic warfare, electro-optics, componentsand turnkey system solutions

It will benefit from (1) its PSU status to get contracts of strategic importance, repeat orders for legacy weapon systems, highlevel of R&D, collaborations and establishment of new facilities, limited domestic competition, and (5) diversification into non-defence areas.

BEL has a significant lead over private players in terms of capability as well as experience in defence electronics It can thusemerge as a key component supplier and collaborator to OEMs as defence privatization in India improves.

We expect 20% CAGR in indigenous defence production over FY2020E -30E led by higher budgetary allocation to defencecapex and reduction in import content.

Since FY2016, BEL has stepped up capital expenditure and it is expected to remain at elevated levels due to several newfacilities being established for capability expansion.

In the past five years, non-defence business has accounted for 15-17% of the overall topline of BEL. The company plans toincrease this share as a diversification strategy. Key nondefence areas where BEL has a presence include electronic votingmachines, e-governance systems, homeland security, civilian radars, turnkey projects such as traffic management, solarpower solutions, telecom systems, and other components

We model order inflows over the next three years based on recent approvals worth ~Rs250 bn given by the DefenceAcquisition Council in BEL’s core areas

Key risks to the company’s growth and profitability include (1) slow pace of capital outlay by armed forces, (2) unavailabilityof suitable indigenous systems, (3) policy changes on indigenization and privatization, (4) policy changes on awardingmethodology and pricing, (5) competition from private players and (6) company-specific risk around performance of newlyestablished facilities

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Bharat Electronics Ltd Nifty

Aegis Logistics Ltd


Financials (Rs mn)* FY18 FY19E FY20ESales 47,910 56,676 65,244Growth (%) 21.9 18.3 15.1EBITDA 2,660 3,921 4,678EBITDA margin (%) 5.6 6.9 7.2PBT 2,252 3,332 4,092Net profit 2,142 2,599 3,192Adjusted EPS (Rs) 6.4 7.8 9.6Growth (%) 61.2 21.3 22.8P/E (x) 3.3 9.3 8.7 BV (Rs/share) 53.3 62.5 72.9Dividend / share (Rs) 0.9 1.0 1.0 Source: BloombergROE (%) 19.6 19.7 19.8ROCE (%) 15.0 19.4 20.5Net cash (debt) (1,498) 106 3,693 Source: Company; Kotak Securities - Private Client Research *Consolidated

Financials (Rs mn)* 9M-FY18 9M-FY19 % ChgRevenues 35,391 37,632 6.3 EBITDA 33,428 34,954 4.6 EBITDA Margin (%) 5.5% 7.1%PAT 1,594 1,820 14.2 PAT Margin (%) 4.5% 4.8%EPS (Rs) 4.8 5.4 14.2 Source: Kotak Securities - Private Client Research; *Consolidated Source: Bloomberg

This one pager on the company is extracted from last Kotak Securities – Private Client Research update dated 8 February 2019 and it does not contain events beyond that date.Above company recommendation is of Kotak Securities – Private Client Research. Detailed rating scale and disclaimer is provided at the end of this report. It is advisable to readthe last report of Kotak Securities – Private Client Research before taking any investment decision on the above company recommendation.


Analyst: Amit Agarwal (Email: [email protected]; Contact: +91 22 6218 6439)




Promoter60.6%FII

11.9%

DII2.7%

Others24.8%

Key Highlights: We expect domestic production of LPG to record a CAGR of 5.2% over the next 12 years to FY30 at 25 mmtpa, while demand

is estimated to grow at 6.5% CAGR to 50 mmtpa. This mathematics suggest that India would have to import 25 mmtpaof LPG by 2030 at an implied CAGR of 6.8%

With petrochemical industry growing at ~9-10% per annum, demand for POL products would remain strong for the company.Aegis is well positioned to handle imported LPG and POL with its terminals at key ports.

Aegis currently has three operational LPG terminals with static capacity of around 63,000mt and throughput capacity ofaround 5.0 mmtpa. In FY18, Aegis doubled its static capacity to 63,300 MMT (and quadruple its throughput capacity to 5 mnMMT) with an investment of Rs 3.68 bn

We estimate the company to double its through-put capacity from here to 10 mmtpa with an investment of Rs 10-12 bn overthe next 5/6 years. A capacity of 10 mmtpa would enable the company to capture a market share of around 40% in the LPGimport business.

Aegis is also a leading liquid terminal operator with six terminals strategically located Pan India with a total capacity of689,000 KL.

We forecast an EBITDA CAGR of ~27% for FY18-21E and a net profit CAGR of ~21% for the same period. We expect EBITDAmargins to improve on an increase in utilization levels at the Haldia LPG and Pipavav liquid terminals

With improvement in utilization at its new and existing terminals, we estimate the return ratios of the company to improvegoing forward

We value Aegis using a DCF methodology, assuming a WACC of 11% and a terminal growth rate of 5% to FY30. Our pricetarget implies a FY21E PE of 22x and EV/EBITDA of 15x, close to its three-year one-year-forward average multiples. Weforecast EBITDA CAGR of 27% and EPS CAGR of 20% during FY18-21E.

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Aegis Logistics LtdNifty

Suven Life Sciences


Financials (Rs mn)* FY18 FY19E FY20ESales 6,253 6,377 7,253 Growth (%) 15.0 2.0 13.7 EBITDA 1,982 1,924 2,541 EBITDA margin (%) 31.7 30.2 35.0 PBT 1,955 1,870 2,448 Net profit 1,237 1,253 1,640 Adjusted EPS (Rs) 9.7 9.8 12.9 Growth (%) 41.8 1.3 30.9 P/E (x) 17.2 19.0 14.5 BV (Rs/share) 59.2 66.1 75.1 Dividend / share (Rs) 2.4 2.5 3.2 Source: BloombergROE (%) 17.4 15.7 18.3 ROCE (%) 25.6 22.4 26.4 Net cash (debt) 2,733 3,506 4,149 Source: Company; Kotak Securities - Private Client Research * Consolidated

Financials (Rs mn)* 9M-FY18 9M-FY19 % ChgRevenues 4,115 4,102 (0.3) EBITDA 1,417 1,182 (16.5) EBITDA Margin (%) 34.4 28.8 PAT 959 821 (14.4) PAT Margin (%) 23.3 20.0 EPS (Rs) 7.5 6.5 (14.4) Source: Kotak Securities - Private Client Research; * Standalone Source: Bloomberg

This one pager on the company is extracted from last Kotak Securities – Private Client Research update dated January 29, 2019 and it does not contain events beyond that date.Above company recommendation is of Kotak Securities – Private Client Research. Detailed rating scale and disclaimer is provided at the end of this report. It is advisable to readthe last report of Kotak Securities – Private Client Research before taking any investment decision on the above company recommendation.


Analyst: Cyndrella Carvalho / Ledo Padinjaratahala (Email: [email protected]; Contact: +91 22 6218 6426)




Promoter60.0%

FII6.1%

DII2.4%

Others31.5%

Key Highlights: The CRAMS business is the bread earner for the company and has grown strongly over last three years (CAGR 9 % FY15-18).

This business has established a new base with the help of increased number of projects in phase II and Phase I coupled withcommercial/ pre-commercial supplies from FY14 onwards.

Our analysis highlights that company’s earnings have reached a sustainable base (three drugs commercialized over last threeyears) and will continue to improve on this base going ahead.

The company has a strong balance sheet with the support of best management team. It has followed a unique path with thedream of new drug development (via using cash generated from its base CRAMS business) with its own efforts and focus onAlzheimer and central nervous system diseases, an investment opportunity with focused return.

SUVN 502 -The molecule is currently in Phase II studies and the company has finished recruiting 563 patients closing therecruitment for phase II trial, taking the phase two trials to final stage of completion. This process can reach to final dataoutput by 2QFY20.If data points turn positive, then this can be a huge opportunity for out-licensing. If out-licensed we expectit could garner an upfront of ~ USD 150-200mn.

Suven life sciences also announced the demerger of its CRAMS Business from Suven Life Sciences Limited (SLSL) into SuvenPharmaceutical Limited (SPL). SLSL shareholders will receive 1 share each of SPL for 1 share held of SLSL. The demergerexercise will be subject to NCLT approvals which should tentatively require 6 to 9 months’ time.

We like Suven for its high margin profile (EBITDA margin of >30% and net margin of ~20%). After a soft FY19, we expectearnings to grow by 25-30% in the next two years. The Company shows steady return ratios of 22-25% ROIC and 18% ROE.

We have valued the stock at 18x FY21E core EPS of Rs.19 (excluding the R&D spend) fetching a price of Rs.354. We haveadded the value of upfront from SUVN 502 and other 3 molecules put together at Rs 71 (i.e. Net Present Value of thesemolecules).

Hence, on an aggregate basis we derive our target price of Rs.425. There could be upside risk to the price target coming fromcompany’s R&D pipeline.

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Surya Roshni Limited


Financials (Rs mn)* FY18 FY19E FY20ESales 49,312 59,196 64,876 Growth (%) 27.0 20.0 9.6 EBITDA 3,459 3,758 4,248 EBITDA margin (%) 7.0 6.3 6.5 PBT 1,561 1,708 2,255 Net profit 1,080 1,178 1,556 Adjusted EPS (Rs) 19.9 21.7 28.6 Growth (%) 25.2 9.1 32.0 P/E (x) 11.3 10.3 7.8 BV (Rs/share) 192.5 211.6 237.6 Dividend / share (Rs) 2.0 2.0 2.0 Source: BloombergROE (%) 10.8 10.7 12.7 ROCE (%) 11.8 12.1 13.2 Net cash (debt) (10,458) (11,471) (10,151) Source: Company; Kotak Securities - Private Client Research * Standalone

Financials (Rs mn)* 9M-FY18 9M-FY19 % ChgRevenues 35,053 42,706 21.8 EBITDA 2,442 2,539 4.0 EBITDA Margin (%) 7.0% 5.9%PAT 710 768 8.1 PAT Margin (%) 2.0% 1.8%EPS (Rs) 13.1 14.1 8.1 Source: Kotak Securities - Private Client Research; * Standalone Source: Bloomberg

This one pager on the company is extracted from last Kotak Securities – Private Client Research update dated January 14, 2019 & February 19, 2019 and it does not contain eventsbeyond that date. Above company recommendation is of Kotak Securities – Private Client Research. Detailed rating scale and disclaimer is provided at the end of this report. It isadvisable to read the last report of Kotak Securities – Private Client Research before taking any investment decision on the above company recommendation.


Analyst: Ruchir Khare (Email: [email protected]; Contact: +91 22 6218 6431)




Promoter62.9%

FII1.3%

DII2.3%

Others33.4%

Key Highlights: Surya Roshni is India’s second largest player in the lighting industry with dominating presence in tier-ii/iii cities and rural

areas. Various welfare schemes, introduced by the Indian government and rural electrification drive could potentiallybenefit company’s operations going ahead. We tend to believe that this will help Surya Roshni outpacing the industrygrowth over next few years.

Leveraging on its strong brand equity, SURL has also entered into consumer durable (CD) market in the fans (Domestic’ &Industrial) category in FY14. Commendably, in a short period of four years it could gain No. 6 position in the fan market.

In FY15 company expanded its CD portfolio to include other contemporary electrical appliances (mainly brown goods) like-water heaters, room heaters, dry irons, steam irons, immersion heater and kitchen appliances like mixer grinder, inductioncookers, toasters, glass cooktops etc.

The company has a strong distribution reach spread across India. Distribution franchise includes a wide network of over2500 distributors and 2.5 lakh country wide retailers. This facilitates the company in rapidly scaling-up of new product intothe market.

SURL has over four decades of presence and owns ‘Prakash Surya’ brand in the steel pipe industry. The company holdsleadership position in ERW and Spiral API grade pipes which are used in transportation of oil and natural gas, city gasdistribution, oil exploration, water pipeline etc.

Exports contributes to c.20% of Steel Pipes division revenues. While it has presence in more than 50 countries, it holdsindomitable position in the GCC countries backed by ‘Prakash Surya’ Brand.

As per management, though at the nascent stage, company has been exploring the potential benefits/opportunities thatcan be achieved by the demerger of these two unrelated business. We believe that the corporate action would likely providean enhanced focus on both the businesses and narrow the valuation gap of the B2C business vis-à-vis peer group.

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RATING SCALE (KOTAK SECURITIES – PRIVATE CLIENT RESEARCH) / KOTAK INSTITUTIONAL EQUITIES Definitions of ratings BUY – We expect the stock to deliver more than 15% returns over the next 12 months ADD – We expect the stock to deliver 5% - 15% returns over the next 12 months REDUCE – We expect the stock to deliver -5% - +5% returns over the next 12 months SELL – We expect the stock to deliver < -5% returns over the next 12 months NR – Not Rated. Kotak Securities is not assigning any rating or price target to the stock. The report has been prepared for

information purposes only. SUBSCRIBE – We advise investor to subscribe to the IPO. RS – Rating Suspended. Kotak Securities has suspended the investment rating and price target for this stock, either because there

is not a Sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, 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. NOTE – Our target prices are with a 12-month perspective. Returns stated in the rating scale are our internal benchmark.

FUNDAMENTAL RESEARCH TEAM (PRIVATE CLIENT RESEARCH) Rusmik Oza Arun Agarwal Amit Agarwal Nipun Gupta Deval Shah Head of Research Auto & Auto Ancillary Transportation, Paints, FMCG Information Tech, Midcap Research Associate [email protected] [email protected] [email protected] [email protected] [email protected] +91 22 6218 6441 +91 22 6218 6443 +91 22 6218 6439 +91 22 6218 6433 +91 22 6218 6423

Sanjeev Zarbade Ruchir Khare Jatin Damania Cyndrella Carvalho Ledo Padinjarathala Cap. Goods & Cons. Durables Cap. Goods & Cons. Durables Metals & Mining, Midcap Pharmaceuticals Research Associate [email protected] [email protected] [email protected] [email protected] [email protected] +91 22 6218 6424 +91 22 6218 6431 +91 22 6218 6440 +91 22 6218 6426 +91 22 6218 7021

Teena Virmani Sumit Pokharna Pankaj Kumar Krishna Nain K. Kathirvelu Construction, Cement, Buildg Mat Oil and Gas, Information Tech Midcap M&A, Corporate actions Support Executive [email protected] [email protected] [email protected] [email protected] [email protected]+91 22 6218 6432 +91 22 6218 6438 +91 22 6218 6434 +91 22 6218 7907 +91 22 6218 6427

TECHNICAL RESEARCH TEAM (PRIVATE CLIENT RESEARCH) Shrikant Chouhan Amol Athawale Siddhesh Jain [email protected] [email protected] Research Associate +91 22 6218 5408 +91 20 6620 3350 [email protected]

+91 22 62185499

Faisal Shaikh, FRM, CFTe Research Associate [email protected] +91 22 62185498

DERIVATIVES RESEARCH TEAM (PRIVATE CLIENT RESEARCH) Sahaj Agrawal Malay Gandhi Prashanth Lalu Prasenjit Biswas, CMT, CFTe [email protected] [email protected] [email protected] [email protected] +91 79 6607 2231 +91 22 6218 6420 +91 22 6218 5497 +91 33 6625 9810

mailto:[email protected]







Disclosure/Disclaimer – Kotak Securities Ltd

Following analysts: Ajinkya Bhat, Aditya Mongia Nischint Chawathe, M B Mahesh, Dipanjan Ghosh, Shrey Singh of Kotak Institutional Equities and Amit Agarwal, Ruchir Khare, Cyndrella Carvalho, Ledo Padinjaratahala of Kotak Securities – Private Client Research hereby certify that all of the views expressed in this report accurately reflect their personal views about the subject company or companies and its or their securities. They also certify that no part of their compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. 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), Metropolitan Stock Exchange of India Limited (MSE), National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX). 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 are registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. 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/warning/deficiency 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 clients as well as our prospects. This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This report is not to 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. It is for the general information of clients of Kotak Securities Ltd. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable though its accuracy or completeness cannot be guaranteed. Neither Kotak Securities Limited, nor any person connected with it, accepts any liability arising from the use of this document. The recipients of this material should rely on their own investigations and take their own professional advice. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. Certain transactions -including those involving futures, options and other derivatives as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. Reports based on technical analysis centers on studying charts of a stock's price movement and trading volume, as opposed to focusing on a company's fundamentals and as such, may not match with a report on a company's fundamentals. Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Kotak Securities Limited has two independent equity research groups: Institutional Equities and Private Client Group. This report has been prepared by the Private Client Group. We and our affiliates/associates, officers, directors, and employees, Research Analyst(including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company/company (ies) discussed herein or act as advisor or lender / borrower to such company (ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of Research Report or at the time of public appearance. Kotak Securities Limited (KSL) may have proprietary long/short position in the above mentioned scrip(s) and therefore may be considered as interested. The views provided herein are general in nature and does not consider risk appetite or investment objective of particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business with KSL. Kotak Securities Limited is also a Portfolio Manager. Portfolio Management Team (PMS) takes its investment decisions independent of the PCG research and accordingly PMS may have positions contrary to the PCG research recommendation. Kotak Securities Limited does not provide any promise or assurance of favourable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and take professional advice before investing. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. No part of this material may be duplicated in any form and/or redistributed without Kotak Securities' prior written consent. Details of Associates are available on www.kotak.com 1. “Note that the research analysts contributing to the research 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 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. (Member FINRA/SIPC) and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak Mahindra Inc. (Member FINRA/SIPC)at 369 Lexington Avenue 28th Floor NY NY 10017 USA (Tel:+1 212-600-8850). 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. 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. This research report and its respective contents do not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services. Accordingly, any brokerage and investment services including the products and services described are not available to or intended for Canadian persons or US persons.” Research Analyst has served as an officer, director or employee of subject company(ies): No We or our associates may have received compensation from the subject company(ies) in the past 12 months. We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past 12 months: No We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months. We or our associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months. We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report. Our associates may have financial interest in the subject company(ies). Research Analyst or his/her relative's financial interest in the subject company(ies): No Kotak Securities Limited has financial interest in the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report: Bharat Electronics, LIC Housing Finance - Yes Nature of financial interest is holding of equity shares or derivatives of the subject company.

Our associates may have actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report.

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Research Analyst or his/her relatives has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report: No. Kotak Securities Limited has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report: No Subject company(ies) may have 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 https://www.nseindia.com/ChartApp/install/charts/mainpage.jsp 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/www.kotaksecurities.com. Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097. Telephone No: 42856825. SEBI Registration No: INZ000200137 (Member of NSE, BSE, MSE, MCX & NCDEX), AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. NSDL/CDSL: IN-DP-NSDL-23-97. Our research should not be considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and the like and take professional advice before investing. Investments in securities market are subject to market risks, read all the related documents carefully before investing. Derivatives are a sophisticated investment device. The investor is requested to take into consideration all the risk factors before actually trading in derivative contracts. Compliance Officer Details: Mr. Manoj Agarwal. Call: 022 - 4285 8484, or Email: [email protected]. In case you require any clarification or have any concern, kindly write to us at below email ids: Level 1: For Trading related queries, contact our customer service at '[email protected]' and for demat account related queries contact us at

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AUGUST 2, 2017 - Kotak Securities · 3QFY19 net profits of the Nifty-50 Index increased 2.1% yoy...

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