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    SUNPHARMA :Robust Performance "NEUTRAL" 17th Feb 2014

    Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectations with total revenues including other operating incom

    at Rs 4312 Cr up 50.5 % YoY led by robust growth in US formulations and Taro business. The stellar performance of company was supporte

    well from domestic operations. The US formulation business grew by more 56 % YoY to USD 434 M

    .................................................................................................. Pa e : 7-8

    State Bank of India : "BUY" 17th Feb 2014

    SBINs profitability was declined by 34% YoY largely due to higher provisions and contingencies led by deterioration in asset quality and highe

    tax in order to create DTL special reserve as per suggestion by RBI. Banks NII grew by 13.3% YoY led by higher loan growth and stable NIMAsset quality slightly deteriorated with GNPA stood at 5.9% versus 5.8% in previous quarter and net NPA further worsen to 3.2% against 2.9

    sequentially due to lower loan loss provisions made. We value bank at Rs.1779/share which is 1.1 times of FY14E book valu

    .............................................................................................. ( Page : 2-6)

    17th Feb, 201

    Edition : 207

    IEA-Equity

    Strategy

    13th Feb 2014

    Finolex Cables(FCL) Q3FY14 PAT of Rs. 24.5 crore was below ourestimate owing to lower sales and EBITDA margin. Decline in communicatio

    cable segment segments as well as high raw material prices resulted in flat EBITDA growth of 3.2% yoy. Sales rose 5.58% to Rs. 557.55 crore i

    the quarter ended December 2013 as against Rs. 528.07 crore during the previous quarter ended December 2012. Third Quarter result wer

    marginally below our expectaton which led us to revise our estimate on stock, we cut our EPS forecast for FY14E-15E by 8.6%/4.1%. Even afte

    posting marginally below result the stock is quite attractive at current market price of Rs. 81 and left a limited upside of 11%, however w

    advised our reader to book a part profit on stock . ......................................... ( Page : 21 - 22)

    "Book Partial

    Profit "Finolex Cables Ltd:"Reasonable prospects..."

    Canara banksperformance was muted all through despite of healthy loan growth. Canara bank was unable to translate its balance sheet growt

    in profit & loos account due to lower base rate among peers. Banks asset quality was deteriorating sequentially along with higher fres

    slippage. PCR was lowest among peers (without technical write off). We are disappointed with growth parameters of the bank. We have neutra

    view on the stock. ..................................................................... ( Page : 16- 20)

    Coal India LTD :

    CIPLA : "BUY" 14th Feb 2014

    Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up 10 % YoY led by healthy growth in export business wit

    well support from India operations to. The revenues from export business including formulations and API grew by 36 % to 1509 Cr for th

    quarter while domestic business grew by 9% YoY to 1044 Cr. ................................................ ( Page : 9-10)

    "BUY" 14th Feb 2014

    Earlier we suggested, if earnings falls, then price might go beyond 256, but p/b level may be maintained , else we assume that since th

    company is a good dividend paying company with Roe above 30% we assume p/b should remain above 3. We see Coal India at a attractiv

    valuation to go long from the current dips. So we stick to our previous estimates and recommend Maintain Buy CIL at price dips with a targe

    price of Rs.307/-. ............................................................... ( Page : 13-15)

    Somany Ceremics: "Outlook Challenging in near term" "REDUCE" 14th Feb 2014

    At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY15E. The company can post RoE of 17.0% and 17.1%

    & EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY15E. We are downgrading the rating to "Reduce" and advise investors to book profits at current leve

    Over the longer term, we expect the efforts to introduce new ventures, curtail costs and the expected economic revival driven by an uptick

    demand in the latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY15E and pric

    target to Rs 115. ............................................................ ( Page : 11-12 )

    CANARA BANK : "NEUTRAL" 14th Feb 2014

    Narnolia Securities Ltd,

    India Equity Analytics aily Fundamental Report on Indian Equities

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    1473

    17791776

    21

    -

    1M 1yr YTD

    bsolute -10.2 -35.8 -35.8

    el.to Nifty -5.9 -37.9 -37.9

    Current 4QFY13 3QFY1

    omoters 62.3 62.3 62.3

    I 8.8 8.9 9.8

    I 17.9 17.7 16.7

    hers 10.9 11.1 11.2

    Financials Rs, Cr

    2011 2012 2013 2014E 2015E

    NII 32526 43291 44331 49365 58302Total Income 48351 57643 60366 65288 74225

    PPP 25336 31574 31081 29105 33401

    Net Profit 8265 11707 14105 10241 11765

    EPS 130.2 174.5 206.2 149.7 172.0

    110126

    State Bank of India

    Dur ing quar terSBIsprof i tabi l i ty decl ined by 34% largely due to high

    prov isio ns and conting encies led by deter iorat ing asset quality and higher t

    in order to create DTL special reserve as per suggestio n by RBI. Howev e

    bank has seen grow th in loan and deposits wh ich translated into growth

    prof it los s to some extent. Due to high er operat ing expenses , operat ing pro

    grow th was negativ e despite of 14% grow th in revenue. We value bank

    Rs.1779/share which would be 1.1 times of FY14Es book value.

    Moderate NII growth led by lower growth in interest earnings assets than

    interest bearing liabilities

    Bank reported NII growth of 13.4% YoY to Rs.12641 cr lower than our expectation

    Rs. 12959 cr largely due to lower interest income from advances than high

    deposits and borrowing cost. Total income was grown by 13.7% YoY to Rs.16831

    supported by other income growth of 15% YoY to Rs.4190 cr. Other income growwas led by exchange and commission income gain of Rs.2971 cr and forex incom

    Rs.643 cr.

    Operating profit reported negative growth due to higher operating expenses

    led by employee benefit provisions

    arket Data

    pside

    2469/1452

    SE Code 500112

    SE Symbol SBIN

    esult update BUY

    MP

    arget Priceevious Target Price

    kt Capital (Rs Cr)

    Please refer to the Disclaimers at the end of this Report.

    (Source: Company/Eastwind)

    ock Performance

    2wk Range H/L

    Operating expenses increased by 31.4% YoY to Rs.9212 cr in which employee co

    and other operating cost increased by 35% and 25.7% respectively. Employee co

    was led by higher provision for pension and gratuity to the tune of Rs. 1355 cr a

    against Rs.743 cr in 3QFY13 and Rs.1283 cr in 2QFY14. Adjusting the sam

    employee cost increased by 8% YoY. Operating profit was declined by 2.2% YoY

    Rs.7618 cr. Cost income ratio increased by 735 bps YoY to 54.7% from 47.4%

    3QFY13.

    Moderate NII growth, higher operating expenses and higher provision and tax

    rate led profit de growth of 34% YoY

    SBIs profitability was declined by 34% YoY largely due to higher provisions a

    contingencies led by deterioration in asset quality and higher tax rate in order

    create DTL special reserve as per suggestion by RBI.

    verage Daily Volume

    hange from Previous

    BIN Vs Nifty

    hare Holding Pattern-%

    9.44 lakh

    fty 6048

    "BUY"17th Feb, 2014

    Narnolia Securities Ltd,

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    State Bank of India

    Source: Esatwind/Company

    Please refer to the Disclaimers at the end of this Report.

    Moderate NII growth led by lower growthinterest earnings assets than interest bear

    liabilities

    Operating profit reported negative growth d

    to higher operating expenses led by employ

    benefit provisions

    Moderate NII growth, higher operat

    expenses and higher provision and tax rate

    profit de growth of 34% YoY

    Narnolia Securities Ltd,

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    State Bank of India

    Source: Esatwind/Company

    Please refer to the Disclaimers at the end of this Report.

    Narnolia Securities Ltd,

    arterly Performance 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E Variation(%)

    erest/discount on advances / bills 26310 25379 22800 15.4 3.7 25937 1.4

    ome on investments 8228 8137 7072 16.3 1.1 8303 -0.9

    erest on balances wi th Reserve Bank of India 92 106 110 -16.1 -13.0

    109 -15.9

    ers 241 300 362 -33.3 -19.7 349 -30.9

    al Interest Income 34870 33922 30344 14.9 2.8 34699 0.5

    ers Income 4190 3278 3648 14.9 27.8 3876 8.1

    al Income 39061 37200 33992 14.9 5.0 38575 1.3

    erest Expended 22230 21671 19189 15.8 2.6 21739 2.3

    12641 12251 11154 13.3 3.2 12959 -2.5

    er Income 4190 3278 3648 14.9 27.8 3876 8.1

    al Income 16831 15529 14803 13.7 8.4 16835 0.0

    ployee 5867 5819 4351 34.8 0.8 6364 -7.8

    er Expenses 3345 3399 2661 25.7 -1.6 3737 -10.5erating Expenses 9212 9218 7012 31.4 -0.1 10101 -8.8

    P( Rs Cr) 7618 6312 7791 -2.2 20.7 6734 13.1

    visions 4150 3029 2668 55.5 37.0 3112 33.3

    T 3469 3283 5123 -32.3 5.7 3622 -4.2

    1234 908 1727 -28.5 36.0 1087 13.6

    Profit 2235 2375 3396 -34.2 -5.9 2535 -11.9

    ance Sheet (Rs Cr)

    posits 1349940 1292456 1156691 16.7 4.4 1337803 0.9

    rowings 189969 188937 148374 28.0 0.5 202402 -6.1estments 426728 398536 359959 18.5 7.1 415135 2.8

    n 1148901 1103090 978115 17.5 4.2 1152774 -0.3

    et Quality

    PA 67799 64206 53458 26.8 5.6

    A 37167 32151 25370 46.5 15.6

    GNPA 5.9 5.8 5.5

    NPA 3.2 2.9 2.6

    R(%)(w/o technical write-off) 45.2 49.9 52.5

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    State Bank of India

    Source: Esatwind/Company

    Please refer to the Disclaimers at the end of this Report.

    Narnolia Securities Ltd,

    come Statement 2011 2012 2013 2014E 2015E

    erest/discount on advances / bills 59976 81078 90537 102590 120306

    come on investments 19826 23949 27200 32037 39720

    erest on balances with Reserve Bank of India 236 350 545 415 415

    hers 1356 1144 1374 1253 1253

    tal Interest Income 81394 106521 119657 136294 161693

    hers Income 15825 14351 16035 15923 15923

    tal Income 97219 120873 135691 152217 177616

    erest on deposits 43235 55644 67465 61066 70226

    erest on RBI/Inter bank borrowings 2562 3886 4124 10146 11668

    hers 3071 3700 3737 0 0

    erest Expended 48868 63230 75326 86929 103391

    32526 43291 44331 49365 58302

    her Income 15825 14351 16035 15923 15923

    tal Income 48351 57643 60366 65288 74225

    mployee 15212 16974 18381 22795 25719

    her Expenses 7804 9095 10904 13388 15105

    erating Expenses 23015 26069 29284 36183 40824

    P( Rs Cr) 25336 31574 31081 29105 33401ovisions 17071 13090 11131 14253 16594

    T 8265 18483 19950 14852 16808

    x 0 6776 5846 4611 5042

    et Profit 8265 11707 14105 10241 11765

    posits 933933 1043647 1202740 1383151 1590623

    ange (%) 16.1 11.7 15.2 15.0 15.0

    which CASA Dep 461521 467607 539063 580923 668062

    ange (%) 49 45 45 42 42

    rrowings 119569 127006 169183 215867 248248

    vestments 295601 312198 350927 32037 39720

    ans 756719 867579 1045617 1202459 1382828

    atio

    eld on Advances 7.9 9.3 8.7 8.5 8.7

    eld on Investments 6.9 7.9 8.0 7.4 8.0

    eld on Funds 7.0 8.4 8.0 0.0 0.0

    st of deposits 4.6 5.3 5.6 6.3 6.5

    st of Borrowings 4.7 6.0 4.6 4.7 4.7

    st of fund 4.6 5.4 5.5 5.4 5.6

    luation

    OE(%) 12.7 13.9 14.3 9.3 9.8

    ok Value 1023 1251 1446 1617 1617BV 2.7 1.7 1.4 0.9 0.9

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    1M 1yr YTD

    bsolute 1.1 57.1 82.9

    el. to Nifty 4.7 55.2 70

    Current 2QFY14 1QFY1

    omoters 63.7 63.7 63.7

    22.5 22.8 22.9

    I 5.7 3.2 3.1

    hers 8.1 10.4 10.4

    Financials Rs, Cro

    3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

    Revenue 4312 4207 2.5 2865 50.5EBITDA 2000 1843 8.5 1275 56.9

    PAT 1531 1362 12.4 881 73.8

    EBITDA Margin 46.4% 43.8% 260bps 44.5% 190bps

    PAT Margin 35.5% 32.4% 310bps 30.8% 480bps

    The stock at its CMP of Rs 609 is trading at 22.1x of one year forward FY14E EPS of 27.

    and company has posted very strong 3QFY14 results however on account stretch

    valuations we do not see much upside to stock and therefore we turn neutral with

    650.

    Please refer to the Disclaimers at the end of this Report.

    ock Performance-%

    hare Holding Pattern-%

    MP 609

    wk Range H/L 650/385

    SE Symbol SUNPHARMA

    524715

    View & Valuation

    The operating EBITDA for the quarter came at Rs 1975 Cr grew by 57 % YoY and OP

    stands at 46 %.There is improvement in OPM by 200 bps during the quarter owing

    stronger operating metrics. The RM cost as percentage of sales was 14 % versus 15 %

    the same corresponding period last fiscal. The employ cost as percentage of sales was

    % in current quarter verses 14% for 3QFY13.The company managed to control its oth

    expenses during the 3QFY14 and has dropped by 100 bps at 24 % of the sales.

    The net profit for the quarter came at Rs 1531 Cr compared to Rs. 881Cr for Q3 last ye

    up 74% YoY. The NPM for the 3QFY14 came at 36%.The other income for the 3QFY4 w

    Rs 134 Cr and Tax rate was at 12 %.

    The company on its R&D said that in the 3QFY14, ANDA for 5 products were filed. Aft

    counting these, and adjusting for filings that were dropped, cumulatively ANDAs for 4

    products have been filed with the USFDA (as on December 31, 2013). ANDAs for

    products received approvals in the third quarter, taking the total number of approvals to 3

    (as on December 31, 2013). ANDAs for 131 products now await USFDA approval, includi

    14 tentative approvals.

    kt Capital (Rs, Cr)

    The management of the company after 3QFY14 results has revised its FY14E reven

    guidance to 29 % from 25 % earlier. Guidance is at constant exchange rate. The compafurther said that capex for the FY14 would be on higher side of earlier guidance. The t

    rate for the full year would be 15 % and R&D expected to be in the range of 6-8% of t

    Sales for the FY'14.ne Year Price vs Nifty

    (Source: Company/Eastwi

    126,119

    verage Daily Volume 535293

    fty 6048

    evious Target Price

    esult Update NEUTRAL Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectatiowith total revenues including other operating income at Rs 4312 Cr up 50.5 % YoY led

    robust growth in US formulations and Taro business. The stellar performance of compa

    was supported well from domestic operations as well. The US formulation business gr

    by more 56 % YoY to USD 434 Mn while International formulation sales outside US gr

    by 16 % YoY to USD 84 Mn. Overall international revenues accounted for more than 75

    of total revenues for the quarter. The Sales of branded prescription formulations in Ind

    was Rs. 947 Cr up by 20% Yoy from Q3FY13 last year. The API business for the quart

    witness some decline with sales falls to Rs 174 Cr translating decline of 17 % YoY.arket DataSE Code

    SUNPHARMA

    Robust Performance

    arget Price 650

    7%pside

    hange from Previous

    "NEUTRAL"17th Feb' 14

    Narnolia Securities Ltd,

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    SUNPHARMA

    les and PAT Trend (Rs)

    (Source: Company/Eastwind)

    Total revenues including other operat

    income came at Rs 4312 Cr up 50.5 % YoYby robust growth in US formulations a

    Taro business.

    PM %

    (Source: Company/Eastwind)

    PM %

    (Source: Company/Eastwind)

    Please refer to the Disclaimers at the end of this Report.

    There is improvement in OPM by 200 b

    during the owing to stronger operat

    metrics.

    The NPM for the 3QFY14 came at 36%.T

    other income for the 3QFY4 was Rs 134 Cr

    Narnolia Securities Ltd,

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    BUY

    1M 1yr YTD

    bsolute -4.5 -3 -2

    el. to Nifty -1.7 -4.3 -14

    Current 2QFY14 1QFY1

    omoters 36.8 36.8 36.8

    23.8 23.8 23.1

    I 10.6 10.9 10.8

    hers 28.8 28.5 29.3

    3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

    Revenue 2282 2347 (2.8) 2070 10.2

    EBITDA 403 533 (24.4) 492 -18.1PAT 261 376 (30.6) 338 -22.8

    EBITDA Margin 17.7% 22.7% (500bps) 23.8% (610bps

    PAT Margin 11.4% 16.0% (460bps) 16.3% (490bps

    arget Price 440

    arket DataSE Code 500087

    The net profits for the quarter came at Rs 261 Cr and NPM stands at 11.43 %. The Rs

    Cr Forex gain is included in the other income during the quarter. The tax rate for the quar

    was nearly at same rate as in corresponding last quarter at 25 %.

    The Company filed 10 ANDA's in the last nine months and got 6 approvals for the sam

    period. It has 35 ANDA's under approval as on 31stDecember 2013. The few of t

    approval products are commercialized. Cipla Medpro formed as acquisition

    Medpro,South Africa last year added 500 Cr to top line and 50 Cr to the operating prof

    during the quarter.

    ne Year Price vs Nifty

    (Source: Company/Eastwi

    30,591

    verage Daily Volume 617290

    fty 6,001

    The operating EBITDA for the quarter under review came Rs 403 Cr and OPM at 17.

    %.The OPM declines by more than 600 bps YoY due to the increase in the R&D and t

    ramp up in the Staff cost during the quarter. The employ cost as percentage of sales stan

    at 14 % while it was 12 % for the same time last fiscal. The other expenses as percenta

    of sales were 27% for the 3QFY14 versus 25 % in 3QFY13.The other expenditu

    increased largely due to rise in R&D expenses and rise in the cost owing to filings a

    setting up of the front end during the quarter. The R&D expenses 4.5% of Sales during t

    quarter.

    450/354

    SE Symbol CIPLA

    wk Range H/L

    CIPLA

    esult Update

    MP 381

    Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up

    % YoY led by healthy growth in export business with well support from India operations

    The revenues from export business including formulations and API grew by 36 % to 15

    Cr for the quarter while domestic business grew by 9% YoY to 1044 Cr.The growth

    export revenues was primarily due to growth in anti-retroviral, anti-cancer, anti-allergic a

    anti-biotic segments.15%pside

    hange from Previous

    evious Target Price

    The stock at its CMP of Rs 381 is trading at 19.58 x of one year forward FY14E EPS of R

    19.40.The stock has reacted negatively after 3QFY14 results however we dontsee a

    downside risks to our estimates. We further believe that Cipla-Medpro would be earni

    accretive in medium to long term horizons and we view the recent correction a good en

    point for the stock. We maintain our view BUY for the stock with Target Price of

    440.

    Please refer to the Disclaimers at the end of this Report.

    ock Performance-%

    hare Holding Pattern-%

    kt Capital (Rs, Cr)

    View & Valuation

    The management of the company after the results said that the Global respiratory u

    expects some of launches in the next year. It has set up new global respiratory team dur

    the quarter. The Combination inhalers planned to launch in FY'15.Company expects to

    more than 5% of Sales on the back of ramp up filings for the FY'15.The Capex is 90

    during the quarter and expects to be Rs 400 Cr FY'14. The Rollover Capex of previous ye

    is Rs 150 Cr during the year.

    "BUY"14th Feb' 14

    Narnolia Securities Ltd,

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    evenue Trend %

    (Source: Company/Eastwind)

    PM & NPM Trend %

    (Source: Company/Eastwind)

    Please refer to the Disclaimers at the end of this Report.

    Net revenues at Rs 2282 up 10 % YoY led

    healthy growth in export business with w

    support from India operations to.

    The OPM declines by more than 600 bps Y

    due to the increase in the R&D and the ra

    up in the Staff cost during the quarter.

    CIPLA

    usiness Trend

    (Source: Company/Eastwind)

    The revenues from export business includ

    formulations and API grew by 36 % to 15

    Cr for the quarter while domestic busin

    grew by 9% YoY to 1044 Cr.

    Narnolia Securities Ltd,

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    11/23

    - Soman Ceremics Ltd.

    MP 131

    rget Price 11595

    side -12.2%

    21.1%

    E Code 531548

    E Symbol

    61/155

    452

    3,109

    fty 6,001

    1M 1yr YTD

    solute 13.2 59.9 103.2

    l. to Nifty 16.0 58.1 97.6

    3QFY14 2QFY14 1QFY14

    omoters 63.3 6 3.3 63.3

    2.8 0.8 0.2

    1.7 1.9 2.0

    hers 32.2 34.0 34.5

    Valuations :

    Financials Rs, Crore3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

    Revenue 284.5 305.6 -6.9% 267.2 6.5%

    EBITDA 17.0 19.4 -12.8% 22.1 -23.3%

    PAT 4.8 6.0 -20.5% 8.2 -41.4%

    EBITDA Margin 6.0% 6.4% (40) bps 8.3% (230) b

    PAT Margin 1.7% 2.0% (30) bps 3.1% (140) b

    Management is expected to achive a top-line growth of arround 20-25% in FY14E.

    Management Guidence FY14E

    (Standalone) (Source: Company/Eastwind Resea

    Please refer to the Disclaimers at the end of this Report.

    At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY1

    The company can post RoE of 17.0% and 17.1% & EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY1

    We are downgrading the rating to "Reduce" and advise investors to book profits at curr

    level. Over the longer term, we expect the efforts to introduce new ventures, curtail costs a

    the expected economic revival driven by an uptick in demand in the latter part of FY2015

    boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY

    and price target to Rs 115.

    yr Forward P/B

    are Holding Pattern-%

    ock Performance-%

    arket Data

    erage Daily Volume

    For Quarter Ended 2QFY14

    For the quarter ended September 2013, Somany Ceramic registered 6.5% rise in sales to

    284.5 crore.

    OPM fell 230 basis points to 6.0% taking OP down 8.3% to Rs 17.0 crore.

    Other income also rise 77.8% to Rs 48 lakh and interest cost decreased 8.9% to Rs 4.6 crore. As depreciation increased 9.1% to Rs 5.7 crore, PBT fell 41.1% to Rs 7.1 crore.

    Taxation fell 40.3% to Rs 2.3 crore (tax incidence grew from 32.5% to 32.9) and PAT fell 41

    to Rs 4.8 crore.

    For Nine Month Ended 9MFY14

    For the nine month ended December 2013, Somany Ceramic registered 18.7% rise in sales to

    848.8 crore.

    However, OPM dived from 8.5% to 6.4% taking OP down 10.7% to Rs 54.5 crore.

    Other income jumped 28.1% to Rs 1 crore and interest cost decreased 8.2% to Rs 13.8 crore.

    As depreciation increased 8.7% to Rs 16.5 crore, PBT fell 20.3% to Rs 25.2 crore.

    Taxation fell to 15.5% to Rs 8.6 crore but tax incidence grew from 32.1% to 34.0% which fin

    kt Capital (Rs Crores)

    wk Range H/L

    evious Target Price

    SOMANYCERA

    ange from Previous

    "Outlook Challenging in near term.."

    The Q3FY2014 results were weak marked by a double-digit decline in the profit after tax on

    back of subdued increase in fuel cost, dollar v/s rupee volatility and a pressure on the mar

    The management expect improvement in the demand conditions in the near term and guide

    revenue growth of 20% in FY14E-15E, however we expect the revenue growth to

    somewhere arround 12-15% and financial performance to remain weak on account of mar

    pressure. Consequently, we are downgrading the rating to "Reduce" and advise investors

    book profits at current level. Over the longer term, we expect the efforts to introduce n

    ventures, curtail costs and the expected economic revival driven by an uptick in demand in

    latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our tar

    multiple to 10x of FY15E and price target to Rs 115.

    Reduce

    Result highlights :

    esult update

    "Reduce"13th Feb' 14

    Narnolia Securities Ltd,

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    12/23

    Please refer to the Disclaimers at the end of this Report.

    mmount in crore) (Source: Company/Eastwind)

    Soman Ceremics Ltd.

    y financials :

    urce: Company/Eastwind Research) (Figures In crore)

    Narnolia Securities Ltd,

    ARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E

    erformance

    evenue 446 542 720 879 1054 1250 1438

    ther Income 2 3 1 1 3 3 3

    otal Income 448 545 721 880 1056 1253 1440

    BITDA 42 56 68 74 86 83 95

    BIT 28 41 50 56 65 59 75

    EPRICIATION 14 15 17 18 21 24 26

    TREST COST 16 13 17 21 20 17 17

    BT 14 31 34 36 48 44 60

    AX 5 10 11 11 15 14 19

    eported PAT 9 20 24 25 33 30 41

    vidend 1 2 3 3 5 6 6

    PS 2.5 5.9 6.9 7.3 9.4 8.7 11.9

    PS 0.4 0.7 0.8 0.9 1.4 1.9 1.9

    eild %

    BITDA % 9.5% 10.3% 9.4% 8.4% 8.1% 6.6% 6.6%

    BT % 3.0% 5.6% 4.8% 4.1% 4.5% 3.5% 4.2%

    PM % 2.0% 3.8% 3.3% 2.9% 3.1% 2.4% 2.9%

    arning Yei ld % 28.5% 18.8% 18.0% 19.5% 14.6% 6.6% 9.1%

    vidend Yeild % 3.9% 2.2% 2.1% 2.5% 2.2% 1.4% 1.4%

    OE % 13.5% 24.6% 23.0% 20.1% 21.3% 17.0% 19.4%

    OCE% 12.3% 13.8% 15.7% 16.6% 17.8% 9.8% 12.0%

    osition

    et Worth 65 83 104 126 153 177 211

    otal Debt 138 162 158 151 142 130 130

    apital Employed 202 245 262 276 295 307 341

    o of Share 3 3 3 3 3 3 3

    MP 9 31 38 38 65 131 131

    aluation

    ook Value 18.8 24.0 30.1 36.5 44.4 51.2 61.2

    /B 0.5 1.3 1.3 1.0 1.5 2.6 2.1

    t/Coverage 1.7 3.1 2.9 2.7 3.3 3.4 4.4

    /E 3.5 5.3 5.6 5.1 6.8 15.0 11.0

    et Sales/CE 2.2 2.2 2.8 3.2 3.6 4.1 4.2

    et Sales/Equity 6.9 6.6 6.9 7.0 6.9 7.1 6.8

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    Coal India LTD.

    261

    307

    33018%

    -7%

    533278

    176226 Fluctuation in Domestic and international coal price impacted coal offtake

    17622

    6001

    1M 1yr YTD

    solute -1.3 -21.2 -21.4

    l. to Nifty 2.8 8.8 8.6

    Rescheduling Date of hearing stands a key concern

    3QFY14 2QFY14 1QFY14

    omoters 90.0 90.0 90.0

    5.5 5.5 5.4

    2.4 2.3 2.3

    hers 2.1 2.2 2.4

    Realization gain on Revised Coal Price

    Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY1

    Net Revenue 16928 -2.3 9.8 17325 1541

    EBITDA 4104 -4.3 46.9 4288 279Depriciation 442 5.2 -10.7 420 49

    Interest Cost 10 0.0 25.6 10

    Tax 1930 4.9 36.6 1839 141

    PAT 3894 -11.4 27.6 4395 305(In Cr

    1

    kt Capital (Rs Crores)

    372/238

    fty

    Meanwhile, Coal India Ltd is likely to get additional revenue of Rs 2,119 Crore in this fisca

    on account of revision in dry fuel prices.CIL (Coal India Ltd) has revised and rationalize

    the basic notified prices of all the grades of non-coking coal except GI, G2 and G5.Th

    estimated additional revenue due to revision of basic notified price for the curren

    financial year is Rs 2,119 cr. Though the incremental revenue is a positive sign but it fai

    to change our previous valuation.

    erage Daily Volume (Nos.)

    Please refer to the Disclaimers at the end of this Report.

    ock Performance-%

    are Holding Pattern-%

    yr Forward P/B

    Source - Comapany/EastWind Research

    In this quarter the international coal price were relatively down by 9% against Q2FY1

    while the domestic coal price were showed upward movement. So the Major domesti

    consumers of coal imported coal at lower price, hence it impacted the off takes anrevenue of CIL slipped -2% YOY and unable to meet the target off takes. Govt decisio

    related labor strikes impacted the productions of CIL too. Sequential increase in tax rat

    further contracted the NPM%. From January we have seen a recovery in internationa

    coal price which is positive sign for CIL.

    Competition Appellate Tribunal stays Rs 1,773 Crore fine on CIL, and will decide on th

    matter on next hearing 16th April 2014 (Rescheduled from 11th Feb 2014). The quantum

    of penalty Rs 1,773.05 Crore is equal to three per cent of the PSU's average turnover fo

    the last three years. We believe, A Rs 1800-crore fine could possibly mean less profits fo

    the company and less dividend income for its owners. But as the main owner, th

    government, will pocket this amount in the form of a fine, it will not be poorer in an

    way.

    arket Data

    E Code

    COALINDIA

    CIL reported Rs.16928 Cr Sales (-2% YOY) against Rs.17325 Cr in Q3FY13 due to poor o

    takes of the coal during the quarter. Q3FY14 PAT slipped to -11% to Rs.3894 Cr again

    Rs.4395 Cr in Q3FY13.Q3FY14 EBIDTA/ton remained flat YOY at Rs.350/ton while it

    increased 36% through QOQ. EBIDTA margin corrected in this quarter to 24% from 18% iQ2FY14.Depriciation slipped 11% to 442Cr against 495 Cr in Q2FY14, moderating th

    burden on EBIDTA.

    On the expenditure side contractual expenses increased ~20% to Rs.154/ton from

    Rs.128/ton in Q2FY14.Powerfuel cost and other expenses per ton remained flat, whil

    cost of project per ton decreased to Rs149/ton from Rs.206/ton in the previous quarter

    Poor Realization of Coal India showed little uptick like 2% to Rs.1445/ton.E Symbol

    wk Range H/L

    side

    ange from Previous

    esult Update

    MP

    rget Price

    evious Target Price

    "Buy"14th Feb' 14

    Narnolia Securities Ltd,

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    FY11 FY12 FY13 FY14E

    50234 62415 68303 69960

    7573 5123 6556 8372

    1755 2013 2333 2591

    4580 4901 5802 604920481 26705 27943 28943

    40390 40857 50219 53705

    9843 21558 18084 16255

    1673 1969 1813 1860

    79 54 45 34

    5595 6484 7623 7310

    10868 20588 17356 17921

    33 51 36 40

    FY10 FY11 FY12 FY13

    431 431 436 452

    416 425 433 4651073 1183 1441 1468

    404744 390243 377447 364736

    1066 1105 1155 1240

    14

    vg Man Power (in numbers)

    oductivity Per Man

    oal Offtake in MT

    epriciation

    terest Cost

    x

    AT

    OE %

    PERATING MATRIX

    al Production in MT

    venue Generation From unit Ton

    ew & Outlook

    L PERFORMANCE

    et Revenue from Operation

    ost Of Projects & Contractual

    wer and fuel

    ntractual expensesmployee benefit Expence

    penditure

    ITDA

    Coal India LTD.

    e revised our estimates due to sequential poor production and off takes of CIL. We

    pect modest increase in sales volumes growth during FY2013-15 on account of poor

    f take capabilities of CIL. Management showed his confidence about their coal

    oduction target and coal off take target for FY2014E, in previous quarter, which is2mt and 492mt respectively. But Due to sequential poor production and off take we

    vised the target to 464mt and 475mt respectively. Also, we expect CILsmargins to

    cline during FY2014 due to lower e-auction realizations and higher staff costs/other

    penses. We are expecting flat sales growth for 2014.Coal India Ltd sprang a positive

    rprise by reporting higher-than-expected realizations as well as earnings before

    terest, tax, depreciation and amortization (Ebitda). Average price realizations

    creased by 2.3% sequentially to Rs.1,444.87 per tonne which is positive sign for future

    owth.

    arlier we suggested, if earnings falls, then price might go beyond 256, but p/b level

    ay be maintained , else we assume that since the company is a good dividend paying

    mpany with Roe above 30% we assume p/b should remain above 3. We see Coal India

    a attractive valuation to go long from the current dips. So we stick to our previous

    timates and recommend Maintain Buy CIL at price dips with a target price of Rs.307/-.

    ecommendation

    Narnolia Securities Ltd,

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    FY10 FY11 FY12 FY13

    6316 6316 6316 6316

    20956 26998 34137 42156

    27273 33314 40453 48472

    343 1334 1305 10781620 33 0 0

    2545 22461 28271 31144

    772 645 829 837

    1404 12387 15595 20447

    5443 8490 9785 12385

    0 779 759 712

    12035 12065 12681 12754

    2211 2057 1848 3496

    610 845 1017 1181

    4402 5586 6071 5618

    2169 3419 5663 10480

    39078 45806 58203 62236

    8066 11180 13478 16189

    17921 21646 24688 25479

    FY10 FY11 FY12 FY13

    0.0 5.7 5.5 4.0

    0.0 17.3 32.6 27.5

    4.9 22.8 29.2 52.7

    1.7 4.3 4.3 4.2

    1.0 3.7 3.1 2.8

    FY10 FY11 FY12 FY13

    10727 12819 16323 15948-131 -3822 3565 -6839

    10596 8997 19888 9109

    950 697 -10410 -1833

    2163 2911 -7382 -7852

    13708 12606 2095 -575

    Down 21% from its 52week High

    Up 14% from its 52 week Low

    15

    sh from Operation

    rading At :

    anges In Working Capital

    et Cash From Operation

    sh From Investment

    sh from Finance

    et Cash Flow during year

    ATIOS

    B

    S

    ASH FLOWS

    ebtor to Turnover%

    editors to Turnover%

    ventories to Turnover%

    sh and bank balances

    S PERFORMANCE

    are capital

    serve & Surplus

    tal equity

    ng-term borrowingsort-term borrowings

    ng-term provisions

    ngible assets

    pital work-in-progress

    ng-term loans and advances

    ventories

    ade receivables

    Coal India LTD.

    ade payables

    ort-term provisions

    tal liabilities

    tangibles

    ort-term loans and advances

    tal Assets

    Narnolia Securities Ltd,

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    CANARA BANK

    anksloan grew by 32% YoY led by retail sector growth of 55% YOY followed by SME

    6% YoY), Infrastructure (24% YoY). Within infrastructure loan growth, power generation

    nd transmission growth was strong at 63% YoY. Deposits grew by 1% YoY and 4% QoQ

    which current and saving account deposits grew by 19% and 16% YoY respectively. In

    eposits profile, term deposits de-grew by 3% YoY which was took flat growth in overall

    eposits as share of term deposits reduce to 77% from 80% in last quarter. CASA ratio

    as declined by 123 bps QoQ to 23%. Credit deposits ratio for the quarter stood at

    0.4% versus 71.8% in previous quarter and 67.4% in last quarter.

    argin compression on account of higher cost of fund

    M compressed by 15 bps YoY to 2.21 largely due to lower loan yield 70 bps YoY

    hereas cost of fund increased by 120 bps YoY. Higher cost of fund was due to higher

    st of bulk deposits. However declining share of bulk deposits and increasing CASA

    tio restricted to escalate funding cost. Yield on loan declined by 70 bps YoY despite of

    ealthy loan growth was due to lower base rate among peers.

    ealthy loan growth led by retail sector

    aluation & View

    anara banks performance was muted all through despite of healthy loan growth.

    anara bank was unable to translate its balance sheet growth in profit & loos account

    ue to lower base rate among peers. Banksasset quality was deteriorating sequentially

    ong with higher fresh slippage. PCR was lowest among peers (without technical write

    f). We are disappointed with growth parameters of the bank. We have neutral view on

    e stock.

    aluation Band

    Please refer to the Disclaimers at the end of this Report.

    Narnolia Securities Ltd,

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    Moderate growth in NII was due to margin

    compression

    Higher opex and moderate NII growth led

    muted operating profit growth

    Profitability declined due to moderate NII

    growth, higher provisions and higher tax rat

    CANARA BANK

    hart Focus

    Please refer to the Disclaimers at the end of this Report.

    Narnolia Securities Ltd,

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    Please refer to the Disclaimers at the end of this Report.

    CANARA BANK

    uarterly Performance

    Narnolia Securities Ltd,

    arterly Result 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E % Variation

    erest/discount on advances / bills 7360 6964 5958 23.5 5.7 7298 0.9

    ome on investments 2575 2597 2460 4.7 -0.9

    2701 -4.7

    erest on balances with Reserve Bank of India 149 93 127 17.1 60.3 216 -30.8

    ers 0 0 0 - -13.5 0 -

    al Interest Income 10084 9654 8544 18.0 4.4 10214 -1.3

    ers Income 851 773 846 0.7 10.1 1006 -15.3

    al Income 10935 10427 9390 16.5 4.9 11220 -2.5

    erest on deposits 7311 6923 6307 15.9 5.6 0

    erest Expended 7857 7463 6556 19.8 5.3 7608 3.3

    2227 2191 1988 12.0 1.6 2606 -14.5

    er Income 851 773 846 0.7 10.1 1006 -15.3

    al Income 3078 2964 2834 8.6 3.9 3612 -14.8

    ployee 873 933 831 5.1 -6.3 1127 -22.5

    er Expenses 614 607 486 26.3 1.2 751 -18.3

    erating Expenses 1488 1539 1317 12.9 -3.4 1878 -20.8

    P( Rs Cr) 1591 1425 1516 4.9 11.6 1734 -8.2

    visions 1052 674 626 68.0 56.0 700 50.3

    T 539 751 891 -39.4 -28.2 1034 -47.8

    130 125 180 -27.8 4.0 258 -49.7

    t Profit 409 626 711 -42.4 -34.6 775 -47.2

    ance Sheet

    posits 408924 391613 323963 26.2 4.4 400424 2.1

    SA(%) 23.1 24.3 20.0 0.0

    n 287700 281104 218242 31.8 2.3 291913 -1.4

    estments 130359 119481 118835 9.7 9.1 127099 2.6

    et Quality

    PA 8,074 7,475 6,090 32.6 8.0

    A 6870 6459 5134 33.8 6.4

    GNPA 2.8 2.7 2.8 NPA 2.4 2.3

    R(%) (w/o technical write-off) 14.9 13.6

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    Please refer to the Disclaimers at the end of this Report.

    CANARA BANK

    Narnolia Securities Ltd,

    come Statement 2010 2011 2012 2013 2014E 2015E

    terest Income 18752 23064 30851 34078 39193 47413

    terest Expense 13071 15241 23161 26199 30682 35244

    I 5681 7823 7689 7879 8511 12169

    hange (%) #DIV/0! 37.7 -1.7 2.5 8.0 43.0

    on Interest Income 2858 2703 2928 3153 3817 3817

    otal Income 8538 10526 10617 11032 12328 15986

    hange (%) #DIV/0! 23.3 0.9 3.9 11.8 29.7

    perating Expenses 3478 4419 4674 5142 5947 7194

    e Provision Profits 5061 6107 5943 5890 6381 8792

    hange (%) #DIV/0! 20.7 -2.7 -0.9 8.3 37.8

    ovisions 2039 2081 1860 2218 3347 3565

    BT 3021 4026 4083 3672 3034 5228

    AT 3021 4026 3283 2872 2399 3869

    hange (%) 45.8 33.2 -18.5 -12.5 -16.5 61.3

    alance Sheet

    eposits( Rs Cr) 234651 293973 327054 355856 409234 470620

    hange (%) #DIV/0! 25 11 9 15 15

    which CASA Dep 68261 83117 79611 86061 102878 118310

    hange (%) #DIV/0! 22 -4 8 20 15

    orrowings( Rs Cr) 8441 14262 15525 20283 24439 28105

    vestments( Rs Cr) 69677 83700 102057 121133 133305 168631

    ans( Rs Cr) 169335 212467 232490 242177 293034 339919

    hange (%) #DIV/0! 25 9 4 21 16

    atio

    vg. Yield on loans 8.2 8.0 10.1 10.1 9.6 10.0

    vg. Yield on Investments 6.6 6.9 6.9 7.5 7.7 7.5

    vg. Cost of Deposit 5.2 4.8 6.7 7.1 7.0 6.9

    vg. Cost of Borrowimgs 9.3 7.0 7.7 4.7 7.0 7.0

    aluation

    ook Value 358 452 512 562 639 710

    MP 410 627 474 393 214 214

    BV 1.1 1.4 0.9 0.7 0.3 0.3

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    V- Finolex Cables Ltd.

    MP 81

    rget Price 90

    evious 73

    side 11%

    ange from 0%

    E Code 500144

    E Symbol

    wk Range 41/92

    kt Capital 1,238

    erage Daily 94,300

    fty 6,084

    1M 1yr YTD

    solute (4.1) 46.7 78.0

    l. to Nifty (2.7) 43.7 71.0

    3QFY14 2QFY14 1QFY14

    omoters 35.8 35.8 35.8

    1.8 1.1 1.0

    9.8 10.2 10.5

    hers 52.5 52.9 52.8

    Financials Rs, Crore

    3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

    Revenue 563.1 593.1 -5.1% 534.3 5.4%

    EBITDA 44.3 76.4 -42.0% 42.9 3.2%

    PAT 24.5 80.0 -69.4% 24.0 2.1%

    EBITDA Margin 7.9% 9.3% (140) bps 8.0% (10) bp

    PAT Margin 4.3% 12.8% (850) bps 4.5% (20) bp

    (Standalo

    Please refer to the Disclaimers at the end of this Report.

    (Source: Company/ Eastwind Research)

    We cut our earnings estimates to factor volume decline in electrical & communication ca

    segment, margin decline in copper rod segment and losses in the others segment. Consequen

    we cut our earnings estimates by 8.6% for FY14E (Rs. 11.6/Share) and 4.1% for FY15E (

    12.6/Share). At the CMP of Rs. 81 stock is trading at PE of 7.0/6.4 of FY14E/15E. We revised o

    rating on stock from "Buy" to "Hold". However owing to slower pace of economic growth furt

    we advised our readers to book part profit on stock and hold the balance with a target price

    Rs. 90

    "Reasonable prospects..."

    esult update

    yr Forward P/B

    are Holding Pattern-%

    ock Performance-%

    Book Partial Profit

    Valuation :

    FCL being one of the leading players in the cable industry seems well placed to capture hu

    opportunities considering the strengths & the industry in which the Company is operat

    Derivative losses coupled with bleak performance by communication cable segment were

    major reasons for de-rating of the stock in past which in our view seems to have been overdo

    The companysLT division is doing very well, they have recently entered into HT and Extra H

    Voltage (EHV) cable verticals. The company has market share of around 15-16 percent in b

    electrical and telecommunication verticals. Further the company has approved setting u

    captive 5 MW solar power plant at its manufacturing facilities at Urse, Pune at an estimated c

    of Rs 40 crore.

    Outlook :

    arket Data

    Finolex Cables (FCL) Q3FY14 PAT of Rs. 24.5 crore was below ourestimate owing to lower sa

    and EBITDA margin. Decline in communication cable segment segments as well as high r

    material prices resulted in flat EBITDA growth of 3.2% yoy. Sales rose 5.58% to Rs. 557.55 cr

    in the quarter ended December 2013 as against Rs. 528.07 crore during the previous qua

    ended December 2012. Third Quarter result were marginally below our expectaton which

    us to revise our estimate on stock, we cut our EPS forecast for FY14E-15E by 8.6%/4.1%. E

    after posting marginally below result the stock is quite attractive at current market price of

    81 and left a limited upside of 11%, however we advised our reader to book a part profit

    stock

    The copper rods segment was initially set up as backward integration for the cables segment. T

    excess production after captive consumption is sold off to third parties at market price. Howev

    owing to thin and declining margins from third party transactions, FCL is gradually reducing

    exposure to the segment. The contribution of the segment to the top-line has decreased fr

    21% in FY2010 to ~5% currently. This trend is expected to continue, thereby improving toverall EBIT margin of the company.

    FINCABLES

    "Book Partial Profit"13th Feb' 14

    Narnolia Securities Ltd,

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    Please refer to the Disclaimers at the end of this Report.

    Finolex Cables Ltd.

    y financials :

    urce: Company/ Eastwind Research)

    Narnolia Securities Ltd,

    PARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E

    Performance

    Revenue 1342 1619 2036 2064 2271 2315 2500

    Other Income 51 24 26 36 24 47 42

    Total Income 1392 1643 2062 2100 2295 2362 2542

    BITDA 100 195 174 175 229 241 258

    BIT 61 157 135 135 182 191 205

    Depriciation 39 37 39 39 47 50 53

    ntrest Cost 32 19 19 26 12 14 14

    BT -30 89 107 109 171 234 233

    TAX 5 32 22 11 26 56 56

    Derrivative Loss -109 -74 -34 -36 -23 10 0

    Reported PAT -35 58 85 98 145 178 185

    Dividend 3 9 11 12 18 23 23

    PS -2.3 3.8 5.6 6.4 9.5 11.6 13.1

    DPS 0.2 0.6 0.7 0.8 1.2 1.5 1.5

    Yeild %

    BITDA % 7.4% 12.0% 8.5% 8.5% 10.1% 10.4% 10.8%

    NPM % -2.5% 3.5% 4.1% 4.7% 6.3% 7.5% 7.3%

    arning Yeild % -12.0% 7.4% 11.7% 20.6% 20.9% 14.3% 16.2%

    Dividend Yeild % 1.0% 1.2% 1.5% 2.6% 2.6% 1.9% 1.9%

    ROE % -6.0% 9.0% 11.9% 12.3% 15.7% 16.5% 15.4%

    ROCE% -4.0% 6.3% 8.7% 10.1% 13.1% 14.3% 13.7%

    Position

    Net Worth 596 643 717 800 924 1079 1249

    Total Debt 296 275 260 172 184 160 160

    Capital Employed 892 918 978 972 1109 1239 1409

    No of Share 15 15 15 15 15 15 15

    CMP 19 51 47 31 46 81 81

    Valuation

    Book Value 39.0 42.0 46.9 52.3 60.4 70.6 81.7

    /B 0.5 1.2 1.0 0.6 0.8 1.1 1.0

    nt/Coverage 1.9 8.4 7.0 5.2 14.6 13.6 14.6

    /E -8.3 13.4 8.5 4.9 4.8 7.0 6.4

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