Karvy Stock Broking Research is available on Thomson ...€¦ · 1 KARVY DIWALI PICKS - NOVEMBER 2018 Karvy Stock Broking Research is available on Thomson Reuters & Bloomberg (Code:

KARVY DIWALI PICKS - NOVEMBER 2018 1 Karvy Stock Broking Research is available on Thomson Reuters & Bloomberg (Code: KRVY<GO>)

Ravi Prakash Singh040 - 3321 [email protected]

Vivek Ranjan Misra040 - 3321 6296

[email protected]

KARVY DIWALI PICKS - NOVEMBER 2018 2

MARKET OUTLOOK

We find ourselves in the optimistic camp in terms of our expectations for Samvat

2075. After the recent turmoil in financial markets, it is easy to be pessimistic.

The macro outlook for India has certainly deteriorated somewhat compared to six

months back; the outlook remains strong and gives us reason for optimism.

Growth in India is accelerating, the OECD Leading Indicator points to strong

growth ahead. More importantly, the investment cycle in India is turning. In

Q2FY 2018-19, Gross Fixed Capital Formation grew by 10% YoY. Capacity utilization

is inching upwards which should also reflect in growth and is also borne out by high-

frequency indicators like commercial vehicles sales growth, cement production and

air traffic growth.

Many investors have been rattled by the move in currency markets. The last time we

had turmoil in currency markets was during the “Taper Tantrum” in 2013. India has

made substantial progress since the taper tantrum with the fiscal deficit declining

from 4.5% to 3.5%. Similarly, the current account deficit has declined substantially

from 5.08% of GDP in October-December Quarter 2012 to 2.4% of GDP in April-

June 2018. This indicates that the Indian economy is in far better position to

withstand the headwinds from the currency markets. However, because of higher

price for imports, especially crude oil, inflation is likely to be higher by 60 to 75 bps.

We believe that the RBI is likely to increase rates by 50 bps over the next 12 months

however, this is manageable and unlikely to derail the growth story.

For Indian asset markets, the major trigger will be the upcoming general elections.

We expect some nervousness in markets ahead of the elections. The results of

the state elections next month will set the tone though we wouldn’t extrapolate

the results to general elections as the Indian electorate can vote differently in state

elections and general elections. Our expectation is that a reform oriented stable

coalition is likely to assume power. If so, a relief rally can take markets forward.

On account of the recent correction, stocks are attractive in our view, we are happy

to recommend them compared to other asset classes. In this report, we list 14

stocks that we believe can deliver good returns over a 12 month period.


India Research - Stock Broking

Recommendation (Rs.)

CMP (as on Nov 02, 2018) 334Target Price 458Upside (%) 37Stock InformationMkt Cap (Rs.Mn/US$ Mn) 659184 / 909252-wk High/Low (Rs.) 452 / 2943M Avg.daily value (Rs. Mn) 3.8 Beta (x) 1.5 Sensex/Nifty 35012 / 10553O/S Shares(mn) 2071.0 Face Value (Rs.) 2.0Shareholding Pattern (%) Promoters 62.3FIIs 22.2DIIs 11.9Others 3.6

Stock Performance (%)

1M 3M 6M 12MAbsolute 1 (16) (17) (27)Relative to Sensex 5 (11) (16) (27)Source: Bloomberg

Bloomberg Code: ADSEZ INAdani Ports & Special Economic Zone Ltd

Valuation Summary

YE Mar (Rs. Mn) FY16 FY17 FY18 FY19E FY20ENet Sales 71086 84393 113230 108559 122156

EBITDA 46272 54182 71567 67985 78544

EBITDA Margin (%) 65.1 64.2 63.2 62.6 64.3

Adj. Net Profit 28794 38856 37659 37335 45320

EPS (Rs.) 13.9 18.7 18.2 18.3 21.9

RoE (%) 24.0 25.5 19.2 17.0 17.4

PE (x)* 25.8 18.5 20.5 18.5 15.4Source: Bloomberg, Karvy Research, *Represents multiples for FY16 - FY18 are based on historic market price

Relative Performance*

Source: Bloomberg; *Index 100

India’s Largest Commercial Ports Operator

Integrated operating model across the value chain: APSEZ enjoys a unique & integrated business model with presence in ports + logistics + SEZ. It enjoys concession assets in a supportive regulatory environment with a weighted average concession period of 28 years. It operates container rail operations in ports pan India with a 20 year license along with 3 inland container depots for warehousing. APSEZ boasts of its land bank of around 8000 hectares of which the company is focusing on developing industry in a logistics hub. Recently, APSEZ closed lease agreement with Britannia and Concor for 83 acres.

Expansion to drive growth: Expansion of Dhamra to make it handle containers and making Kattupalli port a multipurpose cargo port could be the growth driving factors. Coal handling is expected to increase on the back of higher electricity demand and lower inventory at different power plants. Ennore terminal has also started operations from Jan’ 18, therefore the increasing volume can be factored in coming quarters to make all the sites operational. Company plans to incur a capex of Rs. 25000-28000 Mn. As a result of the above strategies, company expects the container and cargo volume to grow by 20% and 12% respectively.

Financial performance: FY18 revenue grew by 34% vs FY17 to reach Rs. 113 bn while the EBITDA grew by 32%. Consensus estimates revenue CAGR of 5.5% along with earnings CAGR of ~14% for FY18-20E.

Diversification aiding overall improvement: APSEZ is consistently delivering growth with gaining market share (14.8% to 15.2% as on FY18). Total cargo volumes grew by 7% for FY18 to 180 MMT while all India cargo grew by 4%. Container volume has also grown across all ports.

Valuation and Risks: Healthy growth of container and cargo volumes coming in from the expansion plans are the key positives. Stock is currently trading at 15.4x. The consensus values the company at 20.9x for a target price of Rs. 458.

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ADSEZ Sensex


Company BackgroundIncorporated as Gujarat Adani Port Ltd on May 26, 1998, Adani Ports and Special Economic Zone (APSEZ) is India’s largest private multi-port operator, post entering concession agreement with GMB to build, operate and maintain the port for a period of 30 years till 2031 extendable by another 20 years. The port is into providing cargo handling services for bulk, crude and container cargo. While the company is also bidding for other domestic and international port projects, it has also invested in value added services like logistics support, providing container rail services and inland container depots to diversify from its core port business.

ADANIPORTS : Technical View

The stock is in uptrend and making higher highs and higher lows on monthly charts and made all time high of 452.35

levels in the month of January 2018. The stock has seen profit taking from the life time high which has dragged the

stock to the low of 294.10 levels. The stock has corrected around 50 percent of previous rally from 166.17 to all

time highs of 452.35 and taken support of 314 levels which is 50 DEMA on monthly chart and resumed its up move.

The immediate support is at 275 levels and next support is at 217 levels which is the 200 DEMA moving average on

monthly chart. Among the indicators and the oscillators, the 14 period RSI is pointing northwards after giving positive

cross over with signal line. As far as the long-term moving averages are concerned, the stock is comfortably trading

above 50/100/200 DEMA on monthly chart. Currently, the stock is trading in a broad range of 300 to 340, where

previous major supports are also placed, indicating probable accumulation in the stock. Hence, we recommend

investors with a longer time horizon to go long in the counter around current levels, average on declines towards

300 levels.






1M 3M 6M 12MAbsolute (8) (11) (17) (28)Relative to Sensex (4) (5) (16) (30)Source: Bloomberg

Bloomberg Code: ACEM INAmbuja Cements Ltd

Valuation Summary


EBITDA 31812 38576 40400 46445 52252

EBITDA Margin (%) 15.8 16.3 15.5 16.4 17.1

Adj. Net Profit 11051 15164 17163 20195 23309

EPS (Rs.) 5.6 7.6 8.7 10.3 12.0

RoE (%) 7.3 7.5 8.0 9.0 9.6




Ensuring value creation through expansionQuarterly performance: Ambuja’s Q2FY19 revenues increased 12.7%

YoY (up 13.4% QoQ) to Rs. 2,614 crore. EBITDA margin decreased

158 bps YoY to 13.7% mainly led by 13% YoY increase in power cost

(led by higher pet coke prices), 19.5% YoY increase in freight cost (led by

higher diesel prices) and 15% increase in other costs. PAT decreased by

34.4% YoY to Rs. 179 crore due to lower other income as last year base

quarter had dividend income of Rs.103 Cr, included in the other income.

Capacity Expansion: The company has made the announcement of

expanding the capacity by 3.1 MT of clinker plant at Marwar, Rajasthan.

The company plans to invest Rs.1,391 crore towards the first phase of 1.7

MT, which is expected to be commissioned in the second half of 2020.

Supply Chain Agreement: The board has approved master supply

agreement with ACC for three years commencing from the date of

execution. Under the agreement, ACC and Ambuja can procure from each

other clinker, cement, raw materials (including fuels, fly ash, slag) & spare

parts and undertake toll grinding in certain plants. This will enable both

companies to lower their lead distance, maximize utilization of assets as

well as spare inventory.

Growth Drivers: The volume growth mainly came from healthy execution

in the infra sector & low cost housing projects. We expect cement volumes

to increase at a CAGR of 7.6% in CY17-19E. In addition, we expect prices

to improve in company’s key areas of operation, especially in the north led

by a pickup in demand.

Valuation and Risks: The demand momentum will continue to remain

healthy due to focus by governments on construction of roads and

affordable housing segment. Consensus values Ambuja Cement at 14.0x

EV/EBITDA to FY20E with a target price of Rs. 235.

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ACEM Sensex


Company BackgroundAmbuja Cements Limited is an India-based holding company which is engaged in the manufacture of clinkers and cement. The company operates in cement and cement related products. The company has a range of products for the business to business and retail markets. The company’s product, Ambuja Plus Roof Special, is suited for constructing roofs and slabs. It also offers rooftop rainwater harvesting technology. Its products also include Ambuja Powercem, which caters the ready-mix (RMX) sector; Ambuja Railcem, which is designed for railways, and Ambuja Buildcem, which serves the requirements of the mass housing segment. The company also co-owns two brands in micro materials category. These include Alccofine, which includes a range of micro slag materials and Dirk Pozzocrete, which includes superfine fly ash. Alccofine micro materials are used in construction projects, such as metro rail, dams, roads, flyovers, bridges and tunnels. Ambuja Cements Ltd, a part of the global conglomerate Lafarge Holcim, is one of the leading cement companies in India with total capacity of 29.6mt under its control. It is one of the lowest cost producers of cement, with focus on structurally sound markets of North, West and East. It is also the largest exporter of cement from India.

AMBUJACEM : Technical View

AMBUJACEM after posting a life time high of 291.50 levels on 15th September, 2018, the price corrected onaccount

of profit taking and made a 52 week low of 188.35 levels on 26th October, 2018. The stock price again found

support near similar levels in July 2018, took support twice at same levels i.e. 188 levels and act as a good support

around that levels. Post which, the stock has significant bounced more than 10% from the above said lower levels

and made a high of 208 levels, indicating positive momentum in the stock is likely to continue in the coming months

also. Among the indicators and oscillator front, 14 periods RSI is trading well above its 9-day signal line on daily chart

and poised with bullish bias, suggesting strength in the counter. The MACD has given positive crossover in negative

territory and inching towards equilibrium line, reflecting strength in the up move. On the downside, stock has an

immediate support around its 52 week low of 188-185 levels, followed by 170 levels. While on the higher side, stock

may find immediate resistance near 245-250 levels followed by 270-275 levels.






1M 3M 6M 12MAbsolute (3) (11) (21) (25)Relative to Sensex 2 (6) (21) (26)Source: Bloomberg

Bloomberg Code: HMCL INHero MotoCorp Ltd

Valuation Summary


EBITDA 44550 46348 52802 53459 61927

EBITDA Margin (%) 15.7 16.3 16.4 15.0 15.2

Adj. Net Profit 31602 33771 37972 36893 42055

EPS (Rs.) 158.2 169.1 190.1 184.7 210.6

RoE (%) 41.1 35.7 34.7 29.6 30.1




Growth Remains IntactThree new product launches planned in next three months: The Company is planning to formally launch three new models in scooter and premium bike category in the next 3 months. This includes a premium bike apart from recently launched Xtreme 200cc and two new Scooters in 125cc category. These three models are likely to be launched in domestic as well as the international market in a phased manner. The Company is expected to get higher volumes especially in scooter segment from these new models in the medium term.

Pickup in rural market: During H1Y19, HMCL has reported 9.4% volume growth. Given the Company’s robust product pipeline of three new launches within the next 2-3 months, we expect volume growth to pickup well in the rural market. During H1Y19, HMCL has reported 15.4% EBITDA margins and we expect this to be maintained on the back of higher capacity utilization.

Performing amidst tough market environment: HMCL faced major headwinds in the last three months including aggressive price cuts by its nearest competitor and five year insurance norm for two wheelers. Despite that, HMCL reported 9.4% volume growth in H1Y19. The management continues to maintain 8-10% volume growth guidance for FY19. The Company has lined up three new product launches (Premium bike and two 125+ Scooters) over the next three months. We understand, given its strong brands and robust distribution network, HMCL is in a better position to benefit from any economic recovery.

Valuation and Risk: At CMP Rs. 2893, the stock is currently quoting 13.7x FY20E earnings. We believe, given its strong brands and robust distribution network, HMCL is in a superior position to benefit from rural economic recovery. New model launches and exports are expected to aid its volume growth further. At PER of 13.7x FY20E, we see a favorable risk reward ratio. We maintain our “BUY” rating on the stock with price target of Rs. 3580 (PE of 17xFY20E earnings).

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HMCL Sensex


Company BackgroundHERO MOTOCORP (HMCL), formerly Hero Honda Ltd is the largest two wheeler manufacturing company based in New

Delhi. It is into manufacturing of motorcycles and scooters and is promoted by the Munjal Family. Some of its flagship

products are Splendor, Passion and HD Deluxe in the motorcycle segment and Duet, Pleasure and Glamour in the

scooter segment. HMCL has extensive sales and service network which spans over 6,000 customer touch points across

the country which comprise a mix of authorized dealerships, service & parts outlets and dealer appointed outlets. Apart

from domestic market, the company has been able to spread its presence in 105 countries.

HEROMOTOCO : Technical View

HERO MOTOCORP after gaining nearly 27% last calendar year is witnessing a volatile 2018 year. As on date, the

stock has lost nearly 20%.The stock has been trading in the broad range of 2648-3774 levels in the current calendar

year. On the monthly chart, the stock is in a secular uptrend making higher highs and higher lows after a strong

uptrend from 2100 to 3900 levels. The recent price action in the stock where-in it has consolidated in a range 2650-

2900 levels for the past few weeks after a correction of nearly 30% from all time high levels suggests that the stock

is forming a strong base. The stock is poised to move higher and is looking strong to break the immediate resistance

levels placed at 2950 levels in the coming weeks. From the technical perspective, the stock took the support of the

weekly lower Bollinger band (20,2) along with the confluence of swing supports at 2650 levels indicating fresh buying

interest in the counter. On the momentum oscillator front on the weekly chart, the 14 period RSI has given a positive

cross-over in the 9 period signal line indicating that the stock is likely to trade with a positive bias in the coming

weeks. The stock is trading above its Parabolic SAR which re-affirms the positive view. Hence, we recommend

investors with a longer time horizon to go long in the counter around current levels. The stock has resistance around

3300 levels, crossing and sustaining above which may take the stock near its all time high levels.




CMP (as on Nov 02, 2018) 1824Target Price 2201Upside (%) 21Stock InformationMkt Cap (Rs.Mn/US$ Mn) 3026128/4173752-wk High/Low (Rs.) 2053 / 16413M Avg.daily value (Rs. Mn) 3.7 Beta (x) 1.0 Sensex/Nifty 35012 / 10553O/S Shares(mn) 1717.4 Face Value (Rs.) 2.0Shareholding Pattern (%) Promoters 0.0FIIs 75.0DIIs 14.0Others 11.0


1M 3M 6M 12MAbsolute 1 (6) (5) (0)Relative to Sensex 5 0 (4) (1)Source: Bloomberg

Bloomberg Code: HDFC INHousing Development Finance Corp Ltd



Healthy AUM Growth and Stable NIMAUM has continued to grow and HDFC posted a PAT under IND AS of Rs. 21.8 bn, up 56% YoY aided by dividend income from subsidiaries; PAT growth adjusted for dividend income was 18%. Loan book growth at 20% (18% AUM growth) led by higher growth in individual book remains healthy and inline with consunseus. Asset quality as per IGAAP was stable QoQ at 1.18. It regained momentum in FY18, led by housing book growing at 18% and non-housing at 17% and continuing into Q1FY19.

De-risked loan portfolio: HDFC has a de-risked loan portfolio with 72% exposure towards individuals followed by construction finance with 13%. AUM has continued traction with growth of 18% for another quarter. Growth is similar across individual as well as non-individual segment. Individual loans, including loans sold over last year has grown by 25%. Spreads are stable on a sequential as well as YoY basis at 2.3%. NIMs have improved by 10 bps on a YoY basis to 3.5%.

Demand drivers: With government’s thrust on affordable housing through CLSS scheme, HDFC has also increased the focus on EWS & LIG segments. In Q1FY19, 37% of home loans in volume and 19% in value were to customers from these segments. Other drivers like improved affordability, low penetration levels, favorable demographics, urbanization are expected to work in favour of HDFC.

Institutional holding & operational highlights: Foreign investors hold 75% followed by Financial Institutions holding another 16%. Gross NPL for HDFC recorded at 1.18% as on Jun 30, 2018 with a capital adequacy ratio of 16.3% of which tier 1 capital is 15.0%.

Valuation and Risks: HDFC is the best proxy to play on Mortgage business along with Banking, Insurance and AMC through its subsidiaries. Value unlocking in subsidiaries such as HDFC AMC should support the valuation. Consensus values the stock at 5x FY20 BVPS with a “BUY” rating for a target price of Rs. 2201.

Valuation Summary

YE Mar (Rs. Mn) FY16 FY17 FY18 FY19E FY20ENet Interest Income 93854 105983 124341 154164 175259

Net Profit 70931 74426 121636 99184 110840

EPS (Rs.) 44.9 47.0 75.9 58.4 65.6

BVPS (Rs.) 215.9 249.6 366.4 406.4 443.4

P/E (x)* 31.8 28.9 36.2 31.9 28.1

P/BV (x)* 5.1 6.0 5.0 4.5 4.1

RoE (%) 21.8 20.2 24.1 14.8 15.1

RoA (%) 2.6 2.4 3.3 2.2 2.2Source: Bloomberg, Karvy Research, *Represents multiples for FY16 - FY18 are based on historic market price

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Company BackgroundIncorporated in 1977 as the first specialised mortgage company in India, now a Financial Conglomerate with interests beyond mortgages, HDFC is India’s largest provider of housing finance, primarily focusing on retail housing. HDFC’s distribution network spans over 400 outlets. In addition, HDFC covers additional locations through its outreach programmes, which has helped the corporation disburse housing loans in more than 2,500 towns and cities in India. It has also supplemented the distribution channel through the appointment of direct selling agents (DSA). Besides the core business of mortgages, HDFC has evolved into a financial conglomerate, diversifying into other businesses through its subsidiaries viz., HDFC Standard Life Insurance, HDFC Asset Management Company, HDFC Bank, and HDFC General Insurance company.

HDFC : Technical View

HDFC Ltd after gaining around 50% last calendar year is witnessing a volatile 2018. As on date the stock is trading

near flat line. However, the stocks weekly and monthly chart depicts clear long term secular Bull Run in the counter.

In the recent past, the stock has corrected from all time highs of 2050 to the recent lows of 1650 zone, where its

long term moving averages are placed. Since 2009, the stock has respected its 50 months moving averages and

resumed its up move, even now also, the said moving averages are placed around 1500-1600 levels, which can

be utilised to add more into portfolio. On the weekly charts also, the stock has respected its 100 weekly moving

averages, and now the stock is placed at the same levels, indicating good levels to accumulate. Currently the stock

is trading in a broad range of 1650 to 1800, where previous major supports are also placed, indicating probable

accumulation into the stock by strong participants. For now, supports for the stock are placed near 1600-1650

levels and below it at 1450-1500 zone, while resistance may be assumed around all time highs of 2000-2050 levels,

and above it at 2250-2300 levels.






1M 3M 6M 12MAbsolute (5) (6) (2) 4 Relative to Sensex (1) 0 (1) 2 Source: Bloomberg

Bloomberg Code: ITC INITC Ltd



Diversification of Business Paying Off Non Cigarette business picking up: Strong growth in packaged branded foods, better portfolio mix and improved operational efficiencies have led to 10.3% growth in the last 8 quarters for the FMCG segment. The company is expected to further leverage its strong brand building track record, and pan India distribution channel to scale up the existing portfolio and also launch brand extensions. Hotel and paperboard business are also on strong footing albeit at a lower base, has potential to significantly contribute towards the bottomline in the coming years.

Cigarette segment stable: Despite continuous hike in the taxes on cigarettes, ITC has managed to grow at 9% CAGR in the last 5 fiscals. The latest GST hike was in July 2017 (which brought taxation in line to its global peers), and the street does not expect further hikes in the coming fiscal. Backed by increasing consumer sentiment and pickup in rural economy, volumes and revenue for this segment are expected to be on a strong growth trajectory in the next two fiscals. Cigarette segment contributes 52.5% of revenue and 85.9% of the operating profit for the company.

Q2FY19 highlights: Revenues improved 7.3% to Rs. 111 bn, led by 6% volume growth in cigarettes, 12.7% growth in the FMCG business, 8.8% growth in agri business and 20.8% growth in paper and paperboard business. On the profitability front, FMCG EBIT doubled to Rs. 585 Mn and EBIT of hotel business came in at Rs.156 Mn, backed by higher occupancy rate (67-68%), strong F&B sales.

Valuation and Risks: Increasing private consumption on the back of better monsoons and increasing rural incomes is expected to lead to revenue growth of 10.8% and margin improvement of 50 bps, resulting in PAT growth of 11.7% CAGR over FY18-20E. The stock currently trades at average 1 year forward P/E of 26x and consensus values it 30x on FY20E EPS of Rs.11.47 and recommends ‘BUY’, with a target price of Rs. 340. Key risks to the call are further increase in tax on cigarettes and lower consumer demand for the FMCG products.

Valuation Summary


EBITDA 145094 154494 164955 182824 205363

EBITDA Margin (%) 37.4 36.5 38.2 38.2 38.7

Adj. Net Profit 93827 102989 112800 125034 140778

EPS (Rs.) 5.2 8.5 9.2 10.2 11.5

RoE (%) 25.1 23.1 22.8 23.1 24.1


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Company BackgroundEstablished in 1910, ITC Limited has a diversified presence in FMCG (25 mother brands with an annual consumer spend

of Rs. 16,000 Cr.), Hotels, Paperboards, Paper and Packaging, and Agri Business. The company has an annual turnover

of Rs. 443 bn (as of FY18), and a market capitalization of Rs. 3466 bn and is ranked 77th in the Forbes 2000 list (the

world’s largest public companies).

Some of the well established brands of ITC are Aashirvaad, Sunfeast, Dark Fantasy in the Branded Foods space, Fiama,

Vivel, Engage, Savlon, etc in the Personal Care products segment, Classmate and Paperkraft in Education & Stationery

products; Wills Lifestyle and John Players in the Lifestyle Apparel business and Mangaldeep in Agarbattis and Aim in the

Safety Matches segment.

ITC : Technical View

The overall long term chart structure of the index heavyweight looks good as it has been consolidating between a

wide range of 370-250 with good accumulation in the counter. The price volume activity in the stock is one of india’s

largest conglomerates has been pretty good despite the steep correction in the broader markets in the recent past.

Technically, it has been witnessing good support around the rising trend line drawn in the medium term as it has

respected the said trend line on multiple occasions. As far as technical parameters are concerned, though the longer

term ADX(40.6) of the stock is concerned, it is in a comfortable zone. Though the DMI+ is trading much below the

ADX, there are good chances of a convergence between the two in the time to come. As far as the RSI(53.85) is

concerned, it is trading just a tad below the RSI Avg(55.76) and is pointing upwards, indicating that a positive trend

in the medium to long term is intact. Hence, we recommend medium term traders and investors to go long in the

counter around current levels and remain bullish for a potential upside target of Rs.350 in the long term, with a stop

loss placed below Rs. 250.







Bloomberg Code: LTFH INL&T Finance Holdings Ltd



Aggressive Growth Story, Likely To ContinueLTFH reported strong set of nos for Q2FY19, PAT grew by ~62.6% YoY to Rs. 5.6 bn due to a restatement of the previous year’s PAT and healthy growth in advances and lower provisions. Retail assets formed~47% of AUM while retail disbursements for the quarter grew by ~31% YoY to ~Rs.72.9 bn driven by ~59% YoY growth in rural finance, however loan book grew by ~29% YoY as wholesale finance disbursement declined ~3% YoY.

NIIM to remain stable with the rising interest rate scenario: Total share of NIIM plus fees for Q2FY19 improved further to 6.8% vs 5.7% last year and 6.5%for Q1FY19, supported mainly by the rising share of relatively superior yield retail portfolio, comfortable liquidity positioning and cushion earned through the recent QIP infusion. As the company continues to shift its focus from wholesale based lending to retail based lending, the overall margin trend to remain steady. RoE for the current quarter stood at 18.5% and expected to maintain same with a consensus estimated RoE of 18.4% and RoA of 2.3%. LTFH has positive ALM of 58% for the next 1 year along with Rs.61 bn of liquid investment, Rs. 42 bn worth investment in mutual fund and Rs. 20 bn of back up liquidity from L&T, which puts it in a sweet spot against the current liquidity crunch scenario of NBFCs.

Low Exposure to ILFS and Supertech: LTFH has an exposure to IL&FS group in six SPVs which are fully secured operational projects. Management also remains confident of recovering Rs. 8 bn exposure to Supertech Developers through granular project realization.

Valuation and Risks: The rising liquidity crisis is expected to slow down the wholesale segment but rural and housing to drive the growth forward for LTFH. At CMPRs. 134, the stock is trading at a P/BV of 1.7x FY20E BVPS, while the consensus has valued the same at P/BV of 2.1x FY20E BVPS to arrive at a target price of Rs.160, with a potential upside of 20%. A slowdown in the NBFC sector and higher cost to income ratio remains key risks to watch.

Valuation Summary

YE Mar (Rs. Mn) FY16 FY17 FY18 FY19E FY20ENet Interest Income 27732 31705 36650 - -

Net Profit 8567 10422 14595 21987 26049

EPS (Rs.) 3.8 5.2 7.5 10.9 13.0

BVPS (Rs.) 41.0 45.0 62.9 65.5 77.9

P/E (x)* 16.8 23.7 21.0 12.4 10.5

P/BV (x)* 1.6 2.8 2.5 2.1 1.7

RoE (%) 9.7 12.1 13.4 17.2 18.4


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LTFH Sensex


Company BackgroundL&T Finance Holdings Limited (LTFHL) was originally incorporated as L&T Capital Holdings Ltd in May 2008 and its name

was subsequently changed in September 2010. The company is registered as an NBFC-Core Investment Company with

the RBI. The company is promoted by Larsen & Toubro Limited (L&T) as the holding company of the group’s financial

services companies. LTFHL has three wholly owned subsidiaries namely, L&T Infrastructure Finance Company Limited,

L&T Finance Limited and L&T Housing Finance Limited which undertake lending operations for the group. L&T Infra

Debt Fund, an NBFC-IDF, was incorporated in 2013 with LTFHL and its subsidiaries together holding 100% stake in the

company. LTFHL, through its subsidiaries, offers a diverse range of financial products and services across rural, housing

and wholesale finance businesses. LTFHL, through its subsidiaries, also offers fund management and other non-fund

based services such as insurance and mutual fund distribution and financial advisory services (project finance and

pre-bid advisory).

L&TFH : Technical View

L&TFH has been trading in the broad range of 110-214 levels in the current calendar year. The counter has built

good support around 110-118 levels which is acting as a good base in the medium term. On the other hand, the

stock has hurdle around 155-160 levels surpassing which it may see a rally towards 185 levels. On the monthly

chart, the stock seems to be consolidating and is attracting buyers on every dip after a strong uptrend from 110-

120 levels indicating large-scale accumulation in the stock. As per the price and volume study last year, the stock is

poised to move higher and is looking strong to break the immediate resistance levels in the coming weeks. From the

technical perspective, the stock took the support of the weekly lower Bollinger band (20,2) along with the confluence

of swing supports at 110-120 levels indicates that the stock may renew in its buying interest. On the other hand, the

long-term trend line support for the stock is pegged at 110-120 levels is a good level to accumulate further into the

counter. Analyzing the recent volume price action at 135 levels, the volumes have been encouraging in the recent

consolidation indicating strong hands have started accumulating the stock at lower levels. Considering all the data

facts, one may go long in the counter on any dip towards the mentioned support zone for an immediate upside

target towards the said resistance zones, breaching which the stock might move towards its all-time highs in the

long-term perspective.






1M 3M 6M 12MAbsolute (12) (5) (13) (18)Relative to Sensex (8) 0 (12) (20)Source: Bloomberg

Bloomberg Code: ONGC INOil & Natural Gas Corp Ltd



Higher Crude Oil Prices Help ONGC Cut BorrowingsONGC reported a net profit of INR 6,144 crore, up by 58.1% QoQ. The revenue of Rs. 27,123 crore, up by 42.7% QoQ and VAP production increased by 12% for Q1FY19. Thus, the increase in EBITDA was largely driven by higher crude oil prices and depreciating rupee. If oil prices stay above USD 70 per barrel for the rest of the year, ONGC can create consolidated cash flow of more than Rs. 20,000 crore which in return can help in cutting borrowings spent to acquire 51.11% stake in Hindustan Petroleum Corp (HPCL).

The ONGC stock declined 19% in 2018 but that was due to the reason where the government did not want to cut excise duty and was looking at alternate means of asking ONGC & Oil India to share the subsidy burden. But later the government dropped the plan of asking ONGC to resume sharing its fuel subsidy burden if the Indian basket of crude breaches USD 70 a barrel.

ONGC acquisition of HPCL, integration a win- win deal: ONGC is the largest oil and natural gas producer with its diversification into refining business, it has become the third-largest refiner in the country. Post acquisition, the company has plans to achieve proper synergies like use of Naphtha and other liquid hydrocarbon with ONGC Petro-additions Ltd, and to maximize value, optimize cost and enhance efficiency.

ONGC already is the majority owner of MRPL we believe that the strategy is to strengthen the integration further so that business growth is well diversified and risk well distributed to tide over the volatility due to fluctuations in global crude oil prices.

Valuation and Risks: Synergies in ONGC’s business and likely consolidation in downstream business with merger of HPCL will ensure uptick in growth for the company. Following the Bloomberg consensus target price of Rs. 218, the stock has been valued at PE 8.5x of FY20E EPS which gives potential upside of 39%. However, subsidy sharing, volatility in oil prices and Indian rupee will be detrimental to ONGC’s performance.

Valuation Summary


EBITDA 404214 528037 568657 764443 790588

EBITDA Margin (%) 30.0 16.3 15.8 20.0 20.9

Adj. Net Profit 128752 244193 221059 318148 331548

EPS (Rs.) 6.7 19.0 17.2 24.7 25.6

RoE (%) 6.8 12.5 11.1 14.1 13.3


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Company BackgroundOil and Natural gas Corporation (ONGC) was incorporated in 1956 and it is the largest crude oil and natural gas Company in India contributing around 70% to Indian domestic production. It ranks 11th among global energy majors (Platts). In a government survey for fiscal year 2016-17, it was ranked as the largest profit making PSU in India. It is involved in exploring and exploiting hydrocarbons in 26 sedimentary basins of India and owns and operates over 11,000 kilometers of pipelines in the country. ONGC has discovered 6 of the 7 commercially producing Indian Basins in the last 50 years, adding over 7.1 billion tonnes of In-place Oil & Gas volume of hydrocarbons in Indian basins. It has to its credit more than 570 discoveries of oil and gas with ultimate reserves of 3.02 Billion Metric tonnes (BMT) of Oil Plus Oil Equivalent Gas (O+OEG) from domestic acreages.

ONGC has won 115 out of a total 254 Blocks (more than 50%) in 8 rounds of bidding under the New Exploration Licensing Policy (NELP) of the Indian Government. ONGC’s wholly-owned subsidiary ONGC Videsh Ltd. (OVL) is the biggest Indian multinational with 41 oil & gas projects in 20 countries.

ONGC : Technical View

ONGC has witnessed a rally from 112.05 levels to 210.9 levels followed by correction during which stock has retraced

to around 61.8% Fibonacci retracement levels of the said rally and again bounced back from those levels of that rally

indicating a fresh leg of rally on the monthly charts. On weekly chart, stock has formed bullish harami candlestick

pattern. 14 day RSI is trading at 46.75 above its 9 period averages of 42.84 suggesting positive momentum in the

counter and positive crossover. Among other indicators, Heiken candlestick indicate bullish trend in the counter in

daily charts. On Bollinger band monthly chart, the price has tested the lower band and has formed a primary reversal

candle indicating trend reversal in the counter. Expanding bands also suggest positive momentum in the counter.

The stock is hovering above a trend line drawn from 75 levels in monthly chart and is poised to move upwards further

supporting our bullish bias in the counter. Technically, stock has immediate supports around 144 levels followed by

a multi support zone from 112-130. Immediate resistance is seen around 168 levels followed by strong resistance

around 185 levels where huge supply of the stock can be expected.






1M 3M 6M 12MAbsolute (1) 1 (7) (12)Relative to Sensex 3 7 (7) (15)Source: Bloomberg

Bloomberg Code: PWGR INPower Grid Corp of India Ltd



Increase in Power Demand will Drive InvestmentsData from developed countries shows that transmission infrastructure

increases with demand growth. Electricity demand in our country has been

increasing rapidly and is expected to rise further in the near term on the

back of government’s ambitious mission of providing 24x7 “Power for All”

at affordable prices. Addition of renewable energy generation capacities

will also aid investment in transmission infrastructure. In the next five years,

Rs. 2.6 tn is expected to be invested in the sector and PWG expects to

spend Rs. 1 tn.

Capitalisation concerns however, healthy order book: Capex

for Q1FY19 stood at Rs. 64 bn (up 1.1% YoY) and Asset Capitalization for

the quarter was at Rs. 37 bn (up 4.5% YoY). PWG has guided for capex

of Rs. 250 bn and Capitalization of ~Rs. 280 bn in FY19. The company’s

ongoing and future projects order book is worth Rs. 885 bn and the

company also has Rs. 150 bn worth of Consultancy assignments with

GoI. Strong project execution capabilities, history of meeting targets and

high CWIP gives comfort on earnings visibility which could lead to strong

cash flow and increased dividend pay-out.

Valuation: PWG has an order book of ~Rs. 1 tn which provides strong

earnings visibility for next 3 years. At CMP, the stock is trading attractively

at 1.5x FY20E P/BV for an RoE of ~16%. Consesus values PWG at 1.8x

FY20E P/BV and arrived at a target price of Rs. 230.

Risks: yy Increased competition in tarrif based-competitive bidding (TBCB)

projects may impact RoE.

yy The company may participate in intra-state transmission capex.

However, poor Discom finances, lack of coordination and historic

failures imply road blocks in this segment.

Valuation Summary


EBITDA 182699 225895 261155 298934 331020

EBITDA Margin (%) 88.8 88.7 87.3 88.1 87.5

Adj. Net Profit 59133 74108 81699 96673 106953

EPS (Rs.) 11.3 14.2 15.6 18.7 20.7

RoE (%) 14.5 15.9 15.7 16.2 16.1


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Company BackgroundPower Grid was incorporated in October 1989 as a public limited company wholly owned by GoI. It started functioning

on management basis with effect from August 1991 and subsequently it took over transmission assets from NTPC,

NHPC, NEEPCO, NLC, NPC, THDC, SJVNL, etc. in a phased manner and it commenced commercial operation in

1992-93. In addition to this, it also took over the operation of existing Regional Load Despatch Centers (RLDCs) from

Central Electricity Authority (CEA) in a phased manner from 1994 to 1996, which have been upgraded and modernized with

State of-the-art Unified Load Despatch and Communication (ULDC) schemes. Consequently, National Load Despatch

Centre (NLDC) was established in 2009 for overall coordination at National level. Recently, under the Rajiv Gandhi

Grameen Vidyutikaran Yojana, PGCIL is mandated to implement the electrification of rural households in association with

the Rural Electrification Corporation, SEBs, and the respective state governments.

POWERGRID : Technical View

POWERGRID has been trading in the broad range of 170-210 levels for more than 24 months. The stock has clocked

an all time high of around 220 levels in the month of August 2018 and witnessed good round of accumulation in

the above mentioned range. The counter is currently trading in the mid of the range is and is well poised to move

higher towards the upper end of the range in the coming trading months. Being one of the slow mover as per the

price movement, we expect the stock to move gradually higher and may be picked as a defensive player with a

long term investment perspective. The stock price is currently trading in the cluster of major short and medium term

moving averages and is all set to move higher towards the higher targeted range. On the Bollinger band (20,2), the

stock is trading in the mid of the range of the band indicating further consolidation to continue in the near term. On

the technical oscillator front, 14-day RSI is trading in the comfortable zone of 50-52 levels indicating further upside

potential in the stock. Long term investors may start accumulating the stock at current levels and even on any

corrections with time frame of 9-12 months.






1M 3M 6M 12MAbsolute (4) 14 16 12 Relative to Sensex 1 21 16 4 Source: Bloomberg

Bloomberg Code: WPRO INWipro Ltd



Past Tense, Future Ready?Wipro has been a victim of events, some of which were not under its control. Be it crude price crash, issue with a utility client in the US or restructuring of India operations or subdued financial performance, it never lost sight of its future strategy. With a combination of inorganic growth and capabilities built in house, Wipro has built its digital capabilities. We believe Wipro is ready to take on the new reality of the changing IT business model. While all the events were a thing of past, we believe Wipro’s financial performance should start improving.

Focus on value added business: Wipro has changed strategy to focus more on opportunities where it can add value and showcase its capabilities. Its divestment in data centre business and spin off of India government business are part of the same strategy. This strategy should help it to free up the management bandwidth to channelize it towards more profitable projects that should help it in client mining and cross selling opportunities

Inorganic route to make it future ready: Wipro’s inorganic strategy to fill the gaps in its effort to building digital capabilities to make it future ready appears to be working. For instance, while Appirio enhanced its Saas capabilities, Designit enhanced its UI/UX capabilities significantly and is integral to its delivery of all major transformational deals.

H2FY19 to be better than H1: During our interaction with Wipro’s management, it said that H2 would be better than H1FY19 on the back of large deals it won. It was confident that Q3FY19 will buck the seasonality factor of being a weak quarter. We believe that Wipro should exihibit strong H2 in the fiscal on the back of large deals won in the recent past including its biggest ever Alight deal.

Valuation and Risks: We remain positive on future prospects of Wipro. We issue a “BUY” rating on the stock with a target price of Rs. 387 an upside potential of 22%. Consesus values Wipro at PE of 18x on FY20E consensus EPS of Rs. 21.5.

Valuation Summary


EBITDA 107958 112699 103930 113670 127731

EBITDA Margin (%) 21.1 20.5 19.1 19.1 19.9

Adj. Net Profit 89075 84895 80081 87717 98723

EPS (Rs.) 18.1 17.5 16.9 19.3 21.5

RoE (%) 20.4 17.2 16.0 17.1 17.4


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Company BackgroundWipro is a leading global information technology, consulting and business process services company. It harnesses the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help clients adapt to the digital world and make them successful. Wipro is recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship. Wipro has over 160,000 dedicated employees serving clients across six continents. It offers among the widest range of IT and ITeS services. Wipro’s corporate governance and transparency are at highest level in the industry.

WIPRO : Technical View

WIPRO, after placing a swing low near 204 in mid of Nov’16, post which it witnessed gradual recovery towards 334

levels which was made in the mid of Jan’18, wherein from it again corrected. From the highs of 334 stock prices

corrected towards 254 levels which happen to be 61.8% Fibonacci Retracement projected from the swing low of

204 to high of 334. The low of 204 was made in the end of June’18 post which it started recovering and retested

the highs once again and attempted to move higher above that. Technically, stock price is well poised above its

major 200-DEMA which is currently placed near 295 levels, while its 21 & 50-DEMA is placed near 322 & 315 levels

respectively. On the weekly momentum setup, 14-pd RSI found support near 37-level in a price correction mode,

while in recent past it climbed towards overbought territory, reaffirming underlying strength in the counter. Going

forward, stock has important support near 300-305 levels, followed by 250-255 levels. On the higher-side, stock

is likely to find immediate resistance near 335-340 levels, moving above which stock will enter into an uncharted

territory towards 380-400 mark.







Bloomberg Code: YES INYes Bank



Odds In favour of Yes

Signs of recovery despite asset quality worries,: 2QFY19 PAT declined 4% YoY toRs. 9.6 bn on account of elevated provisions/MTM losses. This quarter performance disappointed on asset quality notwithstanding the healthy business momentum. The slippages were much higher than anticipated nevertheless, the miss was led by concentrated exposure and the bank continues to see good possibility of recovery.

Outperformance on margins: The NIMs were stable QoQ at 3.3% notwithstanding high capital consumption as against our expectation of a sequential decline. We believe the outperformance against the retail peers is led by higher proportion of variable book and less competitive pressure on retail book.

Loan growth remains strong; expect it to remain healthy (~20/25%) notwithstanding capital and transition issue: The loan growth for the quarter was quite strong at 12%/61% QoQ/ YoY. The same was led by the branch banking, 9.5%/57% QoQ/ YoY and corporate banking, 12.6%/63% QoQ/ YoY. Within the Branch Banking, Retail Banking the most granular of the segment continues to show the strongest momentum at 14%/102% QoQ/ YoY. We expect most of the pressure on growth because of constrained capital and we estimate loan growth at 25%/21% FY19E/FY20E.

Valuation: We maintain “BUY” on the stock with the Target Price of Rs. 410 valuing the stock at 2.67x FY20E P/B.

Risks: Further rise in provisioning, higher NPAs owing to any divergence against the RBI risk assessment report for FY18, failure to find a suitable replacement for current CEO and capital constraints impacting loan growth.

Valuation Summary

YE Mar (Rs. Mn) FY16 FY17 FY18 FY19E FY20ENet Interest Income 45667 57973 77371 99294 113656

Net Profit 25394 33301 42246 43745 58762

EPS (Rs.) 12.0 15.0 18.0 19.0 26.0

BVPS (Rs.) 66 97 112 130 154

P/E (x)* 16.4 13.6 10.8 10.4 7.8

P/BV (x)* 3.0 2.1 1.8 1.5 1.3

RoE (%) 19.9 18.6 17.7 15.7 18.0


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Company BackgroundYes bank is a private bank set-up in 2004.Over the years, the bank’s strong business growth, healthy net interest margins, stable profitability, healthy capitalization have made it one of the top five private sector banks in India. It has steadily built a Corporate, Retail & SME banking franchise, with a comprehensive product suite of Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and Transaction Banking, and Wealth Management business across the country. Its Treasury segment includes investments and financial markets activities undertaken on behalf of the Bank’s customers, trading, maintenance of reserve requirements and resource mobilization. The Corporate/Wholesale Banking includes lending, deposit taking and other services offered to corporate customers. The Retail Banking includes lending, deposit taking and other services offered to retail customers. The Other Banking Operations segment includes Para banking activities such as third party product distribution and merchant banking among others. Yes Bank has adopted knowledge driven approach to offer financial solutions which go beyond the traditional realm of banking.

YESBANK : Technical View

YESBANK has been falling continuously after making lifetime high of 404.00 levels clocked in the month of August

2018. On weekly charts, the stock has found primary reversal candlestick near the weekly lower Bollinger band (20,

S, 2) indicating early reversal signal on the stock and is ripe for the retracement of the entire fall. On price charts,

the stock is the stock is making a prospective double bottom pattern the break out of which is placed around

268 levels. Among the indicators and the oscillators, the 14 period RSI on the daily and weekly charts is oversold

showing a divergence between price and the said indicator. However on the price chart the stock is approaching

a key support levels placed around 160 levels which is 61.80% retracement levels from the swing low of 8.12 levels

cloaked in 2009 to the high of 404 levels registered in August 2018; while the stock 78.60% retracement from the

lows of 43.22 levels made in the month of August 2013 to the high of 404 levels cloaked on August 2018 stands at

180; this cluster of Fibonacci support zone seems to be working for the reversal in the stock. The stock has support

around 185 levels followed by 165 levels while resistance is placed around 265 levels followed by 310 levels.


AUROPHARMA : Technical View

AUROPHARMA has witnessed stellar rally from the low of 496 levels till it clocked its recent high of 827 levels on 7th

September, 2018. Post which the stock witnessed some profit taking from the above said higher levels and made a

low of 708 levels. After that, the stock rallied more than 13% in the last couple of trading session, reflecting positive

momentum in the stock is likely to continue in the coming months as well.

Technically, the stock is trading well above its 21/50/100/200 DEMA on daily chart as well as on weekly chart with

positive price structure, exhibiting strength in the counter in all time frame.

Among the indicators and oscillators front, 14-day RSI is trading well above its 9-day signal line and poised with

bullish bias clearly indicating the bullish trend in the stock is likely to continue and the counter is expected to head

higher in the coming trading sessions.

We recommend medium to long term investors to initiate long position in the stock at the current levels for the target

of 1,150 levels keeping stop loss placed below 590 levels.

Stock Name Action Closing as on 2nd Nov 2018 Stop Loss Target TF

AUROPHARMA BUY 781.40 590 1,150 12 Months

Stock Recommendation Based on Techincal Research


HINDUNILVR : Technical View

HINDUNILVR is the largest market cap company in FMCG ( Consumer Staples) space, and second largest free float

market cap company from FMCG sector in India.

The stock has gained around 18% for the current calendar year of 2018 and has also gained more than 60% last

year, which depicts the secular Bull Run in the stock.

In the recent past, the stock has corrected around 50% of the rally starting from 1280 to its all time highs of 1810,

and now witnessing a positive traction, indicating renewed buying in the counter.

The stock is currently placed at its 50 weekly moving averages and 200 days moving averages, and the stock being

in secular Bull Run, the current dip can be utilized to add into portfolio.

The stock has major supports at 1450 and below it at 1370-1400 levels, while resistance is placed at all time highs

zone of 1800 and above it can be projected around 1950-2145 zone.


HINDUNILVR BUY 1638.45 1370 2145 12 Months


MARUTI : Technical View

MARUTI has been one of the major contributors for the benchmark Index Nifty to climb and sustain above the five

digit mark in the recent years.

The counter made a peak of 9996.40 levels in the month of December 2017 and witnessed a steep round of profit

booking in line with the broader market conditions.

At current juncture, the stock corrected and retraced almost 61.8% of the total up move which started from 4765.30

levels towards all time highs. The stock is expected to form good base around the said levels and regain bullish

momentum towards 8700-8900 plus levels in the coming year.

The next medium term support for the stock is placed around 5900 followed by 5500 while resistance is pegged

around 8700 and 8950 levels on the long term charts.

We recommend medium to long term traders to buy the stock at current levels keeping stop loss placed below 5500

for the potential upside targets of 9999 levels.


MARUTI BUY 7135.45 5500 9999 12 Months


TECHM : Technical View

TECHM after clocking an all time high of 780 in the start of Sep’18 witnessed a correction towards 640 levels made

in the end of Oct’18 which happens to be 38.20% Fibonacci Retracement projected from the swing low of 356 to

an all time high of 780 levels. Subsequently in last few sessions stock price recovered swiftly.

Technically, in the recent pullback, stock price found support near its major 200-DEMA which was also supported

by its 50-WEMA which was well respected in past.

On the momentum setup, 14-period weekly RSI found support near 40-levels during recent correction phase and

currently inching higher from equilibrium level, indicates accumulation in the stock on corrections.

Going forward, stock price may find immediate resistance near life time high of 780, moving above which stock

may potentially rise in an uncharted territory towards 925 levels, with a stop loss placed below 590 levels. Current

consolidation provides an excellent buying opportunity for long term investing in the counter.


TECHM BUY 690.90 590 925 12 Months


Diwali Picks is an investment product of Karvy Stock Broking Ltd formulated by our Equity Fundamental & Technical Research, based on Techno-Funda Analysis. It enlists 14 stocks from the Karvy Large-cap stock universe. The objective of ‘Diwali Picks’ is to deliver superior returns over next 12 months. The investment philosophy works on simple but superior fundamental and technical research.

The 14 large cap companies detailed in this product in our opinion, reflect superior businesses with operating efficiency and growth potential.

We also track short-term price distortions that create long-term value, driven by sound economic fundamentals of the company. This reflects stocks that have margin of safety will converge to their intrinsic value over a period of time and will reflect superior returns.

This is also a part of managing the overall risk, the objective is to attain higher risk adjusted returns and deliver consistent out-performance.

The stocks’ performance will be assessed on an ongoing basis and the composition of the stocks in the product will be altered based on target achievement, changes in the fundamentals of the stocks, industry position, market performance and broad macro-economic factors.

The product is being given to the clients in the form of non-binding investment recommendations so that they can decide to capitalize on the robust fundamentals and future plans of the company which are being discussed in the report.


Disclaimer y Analyst certification: The following analyst(s), Vivek Ranjan Misra & Dr. Ravi Singh who is (are) primarily responsible for this report and

whose name(s) is/are mentioned therein, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.

y Disclaimer: Karvy Stock Broking Limited [KSBL] is registered as a research analyst with SEBI (Registration No INH200003265). KSBL is also a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. The subsidiaries and group companies including associates of KSBL provide services as Registrars and Share Transfer Agents, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, financial consultancy and advisory services, realty services, data management, data analytics, market research, solar power, film distribution and production, profiling and related services. Therefore associates of KSBL are likely to have business relations with most of the companies whose securities are traded on the exchange platform. The information and views presented in this report are prepared by Karvy Stock Broking Limited and are subject to change without any notice. This report is based on information obtained from public sources , the respective corporate under coverage and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of KSBL. While we would endeavor to update the information herein on a reasonable basis, KSBL is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent KSBL from doing so. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. KSBL will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither KSBL nor any associate companies of KSBL accepts any liability arising from the use of information and views mentioned in this report. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Past performance is not necessarily a guide to future performance. Forward-looking statements are not predictions and may be subject to change without notice. Actual results may differ materially from those set forth in projections.

y Associates of KSBL might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.

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y KSBL encourages independence in research report preparation and strives to minimize conflict in preparation of research report.

y Compensation of KSBL’s Research Analyst(s) is not based on any specific merchant banking, investment banking or brokerage service transactions.

y KSBL generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.

y KSBL or its associates collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.

y KSBL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report and have no financial interest in the subject company mentioned in this report.

y Accordingly, neither KSBL nor Research Analysts have any material conflict of interest at the time of publication of this report.

y It is confirmed that KSBL and Research Analysts, primarily responsible for this report and whose name(s) is/ are mentioned therein of this report have not received any compensation from the subject company mentioned in the report in the preceding twelve months.

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Karvy Stock Broking Research is available on Thomson ...€¦ · 1 KARVY DIWALI PICKS - NOVEMBER 2018 Karvy Stock Broking Research is available on Thomson Reuters & Bloomberg (Code: