As Slower Economic Growth Narnolia Securities Limited Recommended Buy Stock of Bank of India

BANK OF INDIA : "BUY" 18th Dec 2013

Bank of India is trading at 0.5 times of one year forward book which is the lowest in valuation band despite of performing better than

expectation largely due to lower CAR and slower economic growth. With the capital infusion to the tune of Rs.1000 cr and improving sign of

asset quality would re-rate the stock as it did previously in our view. The management guided fresh slippage in line with 2QFY and inch up

higher restructure asset for December quarter. We believe that current level is attractive entry point for the investor with time horizon more

than one year with price target of Rs.235.................................... ( Page : 2- 4)

email: [email protected], website : www.narnolia.com

Narnolia Securities Ltd,

402, 4th floor 7/1, Lords Sinha Road Kolkata 700071, Ph 033-32011233 Toll Free no : 1-800-345-4000

JLR VOLUME UPDATE : NOVEMBER 2013 16th Dec 2013

JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the company for the month sold 37403 units up by 25%

YoY. This total volume of JLR includes 6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is marked by

stellar performance by Jaguar .................................................... ( Page : 12)

IEA-Equity

Strategy

18th Dec, 2013

LUPIN : "Optimistic Guidance " "BUY" 11th Dec 2013

The management of the company in its latest interaction said that company is confident of logging 15-20 % CAGR in US and India in the days to

come on the back of rich pipeline as well as acquisition based strategy . ……………………………………… ( Page : 18-19)

COAL INDIA : "BUY" 12th Dec 2013

We expect modest increase in sales volumes growth during FY2013-15 on account of poor offtake capabilities of CIL. Also, we expect CIL’s

margins to decline during FY2014 due to lower e-auction realizations and higher staff costs/other expenses.News flows related to further

divestment in CIL by the government is likely to keep the stock price under pressure in our view. we recommend Buy rating on the stock with

our previous target price Rs.350............................................ ( Page : 15-17)

Persistent System : "Persistently innovating.." "BUY" 13th Dec 2013

With the potential revenue growth, strong deal pipeline and multi-year relationships with marquee clientele in the Infrastructure vertical, we

upgrade this stock and expect for better earning visibility across niche IT players.we rate “BUY” on the stock and we revise our target price from

Rs 890to Rs 960. At a CMP of Rs 876, stock trades at 13.8x FY14E earnings........................ ( Page : 13-14)

UCO BANK : "BUY" 17th Dec 2013

We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on account of bank’s unlikely to get benefit of western sanction against

Iran. Late last month US and six other major powers have imposed sanction against Iran for its nuclear deal. In order to quality for waiver

sanction against Iran, India has cut back sharply on purchase of oil from Iran. UCO was the major beneficiary of current account deposits of

India-Iran oil facilities. In our banking sector coverage universe, UCO bank’s cost of deposits were lowest at 6.1% whereas yield on loan was

10.1% at the end of 2QFY14. After this development, bank’s margin would be impacted and accordingly UCO bank loses the valuation premium.

Although bank’s management is focusing on other area of growth like branch expansion and customer acquisition. We slightly tweak our

earnings and reduce our book value estimate from Rs.175.5 to Rs.168.8. Now our revised price target for the stock would be Rs.84 which is 0.5

times of FY14E book value................ ( Page : 7-11)

TCS : "Positive commentary" "BUY" 18th Dec 2013

TCS on its management Interview to Media highlighted that; For earning and demand prospect, FY15 will be better than the ongoing fiscal on

account of uptick in client spending in the US and Europe and growth in demand for technologies like cloud, mobility and Big Data.We maintain"

BUY" view on the stock with a target price of Rs 2550. Taking the INR/USD (average value) at Rs60 for FY14E and Rs59.5 for FY15E, We upgrade

EPS from Rs87.4 to Rs90.7 for FY14E and from Rs99.3 to Rs 102.4 for FY15E........................ ( Page : 5-6)

India Equity Analytics

BANK OF INDIA

206

235

-

14

-

1M 1yr YTD

Absolute -14.5 -32.2 -32.2

Rel.to Nifty -13.7 -37.1 -37.1

Current 1QFY14 4QFY1

3Promoters 64.1 64.1 64.1

FII 13.2 13.6 13.5

DII 15.3 15.6 16.3

Others 7.4 6.7 6.0

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 7878 8313 9024 12110 11804

Total Income 10519 11635 12790 16672 16366

PPP 5398 6694 7458 9670 9492

Net Profit 2542 2678 2749 3533 3269

EPS 46.5 46.7 47.9 61.6 57.0

2

52wk Range H/L

Capital infusion by GoI raise CAR ratio to 8.1% from 7.75%

Bank has lower CAR to 7.75% at the end of 2QFY14 according to Basel 3 norm.

Now Bank of India has approved to initiate process to raise further capital for issue

of 4.63cr Equity Shares to GoI on Preferential basis at a price of Rs. 215.70 per

share. This capital infusion is taking CAR ratio to 8.1% and government holding rise

to 66.7% from 64.1%. Capital infusion to the tune of Rs.1000 cr diluting our FY14E’s

book value by 40 bps.

As far as restructure loan are concern, bank’s total restructure loan was about 5% of

total loan asset and bank’s management expects Rs.1000-1200 cr of restructure in

December quarter. In 2QFY14, bank sold about Rs.370 cr of bad loan to Asset

Reconstruction Company (ARC) for recovery and during quarters its plan to sell

about Rs.500 cr of bad loan to ARC.

Sequentially improving PCR provide cushion on stress asset

Despite of stable asset quality and lower slippage, Bank of India provided 24% more

provision in sequential basis which improved its provision coverage ratio(Without

technical write off) to 63.3% from 61% in preceding quarter same year. Higher

provision would provide cushion on stress asset without hurting profit going further.

6139

Mkt Capital (Rs Cr)

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

(Source: Company/Eastwind)

Stock Performance

Target Price

Despite of improving fundamental from past two quarters, Bank of India is

trading at 0.5 times of one year forward book which is the lowest level in our

valuation parameters. We believe that current level is attractive entry point for

the investor with time horizon more than one year. With the capital infusion of

Rs.1000 cr by GoI and improving sign of asset quality would re-rate the stock

in our view as it previously witnessed i.e. 0.8 to 1.2 times of book. The

management has guided fresh slippage of about Rs.1500 cr and restructures

to the tune of Rs.1000-1200 cr in 3QFY14 which is in line with 2QFY14. We

recommend buy with price target of Rs. 235

Change from Previous

BANKINDIA Vs Nifty

Share Holding Pattern-%

2271804

Nifty

NSE Symbol BANKINDIA

Most of banks especially PSUs are beaten down by the market on account of slower

economic growth and stress in asset quality. But Bank of India has witnessed

improvement in asset quality in 2QFY14 as fresh slippages were down by 26%

sequentially and 46% Year-on-year basis. Moreover bank reported reduction to the

tune of Rs.1009 cr versus Rs.1338 cr in 1QFY14. Most of reduction was due to

higher recovery and up-gradation rather than write-off. Write-off came down sharply

from Rs.598 cr 1QFY14 to Rs.120 cr in 2QFY14.

Company Update BUY

CMP

Inch up restructure guidance in 3QFY14

Shown Improving sign of asset quality with higher recovery and up-gradation

rather than write-off

Average Daily Volume

12260

Previous Target Price

Market Data

Upside

393/126

BSE Code 532149

"BUY"18th Dec, 2013


3

BANK OF INDIA



Quarterly Result 2QFY14 1QFY14 2QFY13 % YoY Gr % QoQ Gr

Interest/discount on advances / bills 6631 6190 5881 12.8 7.1

Income on investments 2129 1885 1835 16.0 12.9

Interest on balances with Reserve Bank of India 479 465 289 65.6 2.9

Others 0 0 0 42.9 36.4

Total Interest Income 9239 8541 8005 15.4 8.2

Others Income 1100 1181 894 23.1 -6.8

Total Income 10340 9722 8900 16.2 6.4

Interest on deposits 5966 5401 5154 15.8 10.5

Interest on RBI/Inter bank borrowings 414 296 536 -22.8 40.0

Others 333 308 119 179.8 8.2

Interest Expended 6712 6004 5810 15.5 11.8

NII 2527 2537 2196 15.1 -0.4

Other Income 1100 1181 894 23.1 -6.8

Total Income 3627 3718 3090 17.4 -2.4

Employee 897 963 700 28.2 -6.8

Other Expenses 628 575 536 17.1 9.3

Operating Expenses 1525 1537 1236 23.4 -0.8

PPP( Rs Cr) 2102 2180 1854 13.4 -3.6

Provisions 1232 695 1552 -20.6 77.4

Net Profit 622 964 302 106.0 -35.5

Balance Sheet Data

Equity Capital 597 575 575 3.9 3.9

Reserve & Surplus 25,686 21,774 21,774 18.0 18.0

Deposits 432,282 332,695 332,695 29.9 29.9

Borrowings 41,751 29,434 29,434 41.8 41.8

Other liabilities and provisions 12,727 11,262 11,262 13.0 13.0

Total Liability 513,042 395,739 395,739 29.6 29.6

Cash in hand 24,621 17,080 17,080 44.2 44.2

Cash and balances with reserve bank of india 34,658 19,198 19,198 80.5 80.5

Investment 107,413 90,147 90,147 19.2 19.2

Advance 332,190 256,148 256,148 29.7 29.7

Fixed Assets 2,957 2,839 2,839 4.2 4.2

Others Assets 11,203 10,327 10,327 8.5 8.5

Total Assets 513,042 395,739 395,739 29.6 29.6

Asset Quality

GNPA 9873 8765 8898 11.0 12.6

NPA 6156 5947.3 5,228 17.7 3.5

GNPA(%) 3.0 3.0 3.4

NPA(%) 1.9 2.0 2.0

PCR(%) Without technical write off 37.6 32.1 41.2

4

BANK OF INDIA

Source: Eastwind/Company



Financials & Assuption 2011 2012 2013 2014E 2015EInterest/discount on advances / bills 15570 20241 23139 29515 31171

Income on investments 5195 7142 7261 8828 10152

Interest on balances with Reserve Bank of India 798 834 1257 1889 1889

Others 295 264 251 1 1

Total Interest Income 21858 28481 31909 40233 43213

Others Income 2642 3321 3766 4562 4562

Total Income 24500 31802 35675 44795 47775

Interest on deposits 12218 17957 20238 25422 28709

Interest on RBI/Inter bank borrowings 813 1145 1489 1419 1419

Others 950 1065 1158 1281 1281

Interest Expended 13981 20167 22885 28123 31410

NII 7878 8313 9024 12110 11804

Other Income 2642 3321 3766 4562 4562

Total Income 10519 11635 12790 16672 16366

Employee 3492 3069 3131 4131 4055

Other Expenses 1629 1871 2201 3965 3892

Operating Expenses 5121 4941 5332 7002 6874

PPP( Rs Cr) 5398 6694 7458 9670 9492

Provisions 2909 4016 4709 5254 5406

Net Profit 2542 2678 2749 3533 3269

46.0 5.3 2.7 28.5 -7.5

Key Balance Sheet DataDeposits 299559 318216 381840 434075 503527

Deposits Growth(%) 30 6 20 14 16

Borrowings 22021 32114 35368 36854 37953

Borrowings Growth(%) -2 46 10 4 3

Loan 213708 248833 289367 347241 366720

Loan Growth(%) 26 16 16 20 6

Investment 86677 86754 94613 110351 126904

Investment Growth(%) 27 0 9 17 15

Eastwind CalculationYield on Advances 7.3 8.1 8.0 8.5 8.5

Yield on Investments 6.3 8.7 7.1 8.0 8.0

Yield on Funds 6.5 7.8 7.7 8.4 8.4

Cost of deposits 4.1 5.6 5.2 5.7 5.6

Cost of Borrowings 8.0 6.9 6.8 7.5 7.5

Cost of fund 4.3 5.8 5.3 6.5 6.2

ValuationBook Value 322.7 365.3 416.9 469.4 510.4

P/BV 1.5 1.0 0.7 0.4 0.4

P/E 10.3 7.7 6.3 3.8 4.1

TCS

1M 1yr YTD

Absolute 16.6 71.8 72

Rel. to Nifty 12.3 64.7 64.3


Promoters 73.96 73.96 73.96

FII 16.14 16.14 14.96

DII 5.44 5.44 6.45

Others 4.46 4.46 4.63

Financials2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 20977.24 17987.07 16.6 15621.03 34.3

EBITDA 6632.95 5144.12 28.9 4438.39 49.4

PAT 4633.33 3839.5 20.7 3434.65 34.9

EBITDA Margin 31.6% 28.6% 300bps 28.4% 320bps

PAT Margin 22.1% 21.3% 80bps 22.0% 10bps

5

Nifty 6139

Stock Performance

1 year forward P/E

Rs, Crore


View and Valuation: We continue to remain positive on demand outlook and margin

profile. We continue to be positive on demand environment and company’s strength of

efficient deal execution. We advise that TCS now seem to be trading ahead of

fundamentals; At a price of Rs 2047, it is trading at 22.6x FY14E earnings, We maintain"

BUY" view on the stock with a target price of Rs 2550. Taking the INR/USD (average

value) at Rs60 for FY14E and Rs59.5 for FY15E, We upgrade EPS from Rs87.4 to Rs90.7

for FY14E and from Rs99.3 to Rs 102.4 for FY15E. For FY14E and FY15E, we expect 17%

and 20% revenue growth in USD term and retain positive stance as outperformance

continues.


Company update Buy TCS on its management Interview to Media highlighted that

Previous Target Price 2160

Upside 25%

▪ For earning and demand prospect, FY15 will be better than the ongoing fiscal on

account of uptick in client spending in the US and Europe and growth in demand for

technologies like cloud, mobility and Big Data.

▪ For next 3-5 years, momentum picking for social, mobile, analytics and cloud (SMAC)

technologies could offer a "multi-billion dollar opportunity" in revenues for the

company.

2258/1198

Mkt Capital (Rs Crores) 400775

Confident on IT spending: Despite furloughs impact, it remains confident of growth in

the medium term as clients were heading into their CY2014E budgeting cycle in a more

confident position than in the past 2-3 yrs. Broadly US and Europe region will play a key

role for better demand enviromnment ahead, however domestic market could be out of

race due to upcoming election.

We continue to believe that TCS will be star performer in growth sense than other

peers. Hence, we are maintaining 17% revenue growth in dollar term for FY14E

because of improved demand environment, while NASSCOM expects 12-14% for the

Industry. We continue to be positive on demand prospect for TCS.

"Positive commentary"

CMP 2047

Target Price 2550

Change from Previous 18%

Market DataBSE Code 532540

▪ On the hiring front, TCS will hire about 25,000 college graduates who will join the

firm in the next fiscal. Besides, the firm will also be hiring across geographies like the

US and Europe to keep up with demand for services. During current fiscal year, TCS has

recruited 45000 head counts so far.

Marginal Revenue growth impacted by seasonality: TCS management has indicated

that 3rd

quarter, FY14E will be slightly impacted by broad bases furloughs across

Industries and thin project based services. Revenue will be impacted mainly in

developed market like US and Europe region. We expect that revenue growth could be

seen at 3-3.5% for 3QFY14E.

TCS Q3 analyst briefing key takeaways; Adversely impacted by seasonality but

nothing unexpected,

Persistent Margin picture: The Company expects margins could be broadly stable. The

company would take a decision on reinvestment only after the Rupee stabilizes. We

expect that company could maintain EBITDA margin at 30-31% during the 3rd quarter.

Average Daily Volume 1011877

NSE Symbol TCS

52wk Range H/L

"BUY"18th Dec' 13


6


Quarterly snapshot

TCS.


Financials


Rs, Cr FY10 FY11 FY12 FY13 FY14E FY15E

Net Sales-USD 6339 8187 10171 11569 13507.44 16202.45

Net Sales 30029.0 37325.1 48894.3 62989.5 81044.64 96404.56

Employee Cost 10879.6 13850.5 18571.9 24040.0 30796.96 37115.76

Overseas business expenses 4570.1 5497.7 6800.5 8701.9 10941.03 13978.66

Services rendered by business associates and others 1262.0 1743.7 2391.3 3763.7 4862.68 6748.32

Operation and other expenses 4622.8 5054.3 6694.8 8443.9 10130.58 12532.59

Total Expenses 21334.4 26146.2 34458.5 44949.6 56731.25 70375.33

EBITDA 8694.6 11178.9 14435.8 18040.0 24313.39 26029.23

Depreciation 601.8 686.2 860.9 1016.3 1268.47 1508.88

Amortisation 59.1 49.1 57.1 63.7 57.54 76.73

Other Income 272.0 604.0 428.2 1178.2 405.22 1928.09

EBIT 8033.7 10443.6 13517.9 16960.1 23044.92 24520.35

Interest Cost 16.1 26.5 22.2 48.5 48.53 48.53

PBT 8289.6 11021.2 13923.8 18089.8 23401.61 26399.91

Tax 1197.0 1830.8 3399.9 4014.0 5616.4 6336.0

PAT 7092.7 9190.3 10524.0 14075.7 17785.2 20063.9

PAT ((Reported PAT)) 7000.6 9068.6 10414.0 13917.4 17785.2 20063.9

Growth-%

Sales-USD 29.2% 24.2% 13.7% 16.8% 20.0%

Sales 8.0% 24.3% 31.0% 28.8% 28.7% 19.0%

EBITDA 21.3% 28.6% 29.1% 25.0% 34.8% 7.1%

PAT 31.8% 29.6% 14.5% 33.7% 26.4% 12.8%

Margin -%

EBITDA 29.0% 30.0% 29.5% 28.6% 30.0% 27.0%

EBIT 26.8% 28.0% 27.6% 26.9% 28.4% 25.4%

PAT 23.6% 24.6% 21.5% 22.3% 21.9% 20.8%

Expenses on Sales-%

Employee Cost 36.2% 37.1% 38.0% 38.2% 38.0% 38.5%

Overseas business expenses 15.2% 14.7% 13.9% 13.8% 13.5% 14.5%

Services rendered by business associates and others 4.2% 4.7% 4.9% 6.0% 6.0% 7.0%

Operation and other expenses 15.4% 13.5% 13.7% 13.4% 12.5% 13.0%

Tax rate 14.4% 16.6% 24.4% 22.2% 24.0% 24.0%

Valuation

CMP 780.8 1182.5 1322.0 1563.0 2047.0 2047.0

No of Share 195.7 195.7 195.7 196.0 196.0 196.0

NW 18466.7 24504.8 29579.2 38645.7 49103.5 60901.0

EPS 36.2 47.0 53.8 71.8 90.7 102.4

BVPS 94.4 125.2 151.1 197.2 250.5 310.7

RoE-% 38.4% 37.5% 35.6% 36.4% 36.2% 32.9%

Dividen Payout ratio 28.1% 50.8% 37.5% 41.2% 41.2% 41.2%

P/BV 8.3 9.4 8.7 7.9 8.2 6.6

P/E 21.5 25.2 24.6 21.8 22.6 20.0

Qtrly, 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14

Volume Growth 6.3% 3.2% 3.3% 5.3% 5.0% 1.3% 4.4% 6.1% 7.30%

Sales Growth, USD Term 4.7% 2.4% 2.4% 3.0% 4.6% 3.3% 3.1% 4.1% 5.4%

Sales Growth, INR Term 7.7% 13.5% 0.4% 12.1% 5.1% 2.9% 2.2% 9.5% 16.6%

PAT Growth, INR Term -5% 36% -7% 14% 4% 3% 2% 6% 21%

EBITDA Margin 29.1% 31.0% 29.6% 29.1% 28.4% 29.0% 28.1% 28.6% 31.6%

PAT Margin 19.8% 23.8% 22.0% 22.3% 22.0% 22.1% 22.0% 21.3% 22.1%

74

84

-

14

1M 1yr YTD

Absolute 16.3 0.6 0.6

Rel.to Nifty 14.1 -7.0 -7.0


3Promoters 69.3 69.3 69.3

FII 4.2 3.9 3.2

DII 12.4 12.5 13.0

Others 14.2 14.3 14.6

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 3845 3902 4582 4721 5533

Total Income 4770 4868 5534 6063 6875

PPP 2695 2811 3357 4184 4744

Net Profit 907 1109 618 1573 1977

EPS 16.5 17.7 9.3 23.7 29.7

7

UCO BANK

Company Update BUY We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on

account of bank’s unlikely to get benefit of western sanction against Iran. Late

last month US and six other major powers have imposed sanction against Iran

for its nuclear deal. In order to quality for waiver sanction against Iran, India

has cut back sharply on purchase of oil from Iran. UCO was the major

beneficiary of current account deposits of India-Iran oil facilities. In our

banking sector coverage universe, UCO bank’s cost of deposits were lowest

at 6.1% whereas yield on loan was 10.1% at the end of 2QFY14. After this

development, bank’s margin would be impacted and accordingly UCO bank

loses the valuation premium. Although bank’s management is focusing on

other area of growth like branch expansion and customer acquisition. We

slightly tweak our earnings and reduce our book value estimate from Rs.175.5

to Rs.168.8. Now our revised price target for the stock would be Rs.84 which is

0.5 times of FY14E book value.

CMP

Target Price


Upside


Market Data

BSE Code 532205

NSE Symbol UCOBANK

52wk Range H/L 86.65/46

Mkt Capital (Rs Cr) 5561


Nifty 6154

Strong performance in NII on account of lower cost of deposits

Stock Performance During quarter UCO bank’s performance was better than expectation as bank’s NII

grew by 55% YoY to Rs.1569 Cr aided by interest income growth of 5.92% and

interest expenses de-growth of 9.68%. On yearly basis credit deposits ratio declined

to 71.6% from 72.6% but loan and deposits growth of 15% and 16% supported

overall business growth and hence margin expansion. Other income de-grew by

1.6% YoY to Rs.209 cr largely due to lower treasury gain. Total income registered

growth of 45.1% YoY to 1779 cr.


Stable asset quality on sequentially

In absolute term GNPA was flat on QoQ basis and registered mere deterioration of

3% largely due to asset quality. During quarter bank’s reported fresh slippages were

Rs.725 cr as against Rs.629 cr in 1QFY14. Out of Rs.725 cr, over Rs.400 cr

slippages came from infra segment alone. In percentage term GNPA stood at 5.3%

from 5.7% in 1QFY14. In absolute term provision increased by 6% QoQ taking net

NPA increased to 7% QoQ. In absolute term NPA was 3.1% flat on sequential basis.

Provision coverage ratio without technical write off stood at 46.6% as against 45.1%

in 1QFY14 and 41.1% in 2QFY13.

UCO Bank Vs Nifty



"BUY"17th Dec, 2013


8

Current deposits grew almost double led CASA improvement

UCO BANK

Higher earnings on account of robust growth in NII, lower CI ratio and flat

provisions

Net profit during the quarter registered growth of 286% YoY to Rs.400 cr largely due to

higher NII growth, lower cost income ratio and lower provision on account of stable asset

quality. Consequentially ROE and ROA improved to 17.4% and 0.88% from 4.5% and

0.4% in 2QFY13 respectively.

On balance sheet growth front, bank’s deposits grew by 16% YoY to Rs.1888 bn

supported by current account deposits growth of 173% YoY and 12% rise in saving

deposits. CASA deposits registered the growth of 56% YoY to Rs.60096 cr. In

percentage of total advances, CASA stood at 31.8% from 23.7% in 2QFY13. Growth in

current deposits was on account of providing facilities to Indo Iran trade payments which

is presently covering 45% of oil imports from Iran and India export. Going forward 100%

of oil import from Iran is to be covered and further fertilizer import from Iran is also being

considered by Government. This facilities will generated almost about 17000-18000 cr as

per management. Loan grew by 15% YoY to Rs.1352 bn.

Margin improved due to higher declined of cost of deposits than loan yield

Net interest margin of the bank improved by 11 bps YoY to 2.84% from 2.73% in 1QFY14

due to 22% YoY declined cost of deposits to 6.09% from 7.44% in 2QFY13. Lower cost

was account of higher growth in low cost current deposits. Yield on loan (EW calculated)

for the quarter stood at 10.1% from 10.1% in 1QFY14 and 10.9% in 2QFY13.

Management expects NIM of 3% at the end of year end on the back of current deposits

support.

Valuation & View

We have the reduce the target price of UCO bank from Rs.94 to Rs. 84 on account of

bank’s unlikely to get benefit of western sanction against Iran. Late last month US and six

other major powers have imposed sanction against Iran for its nuclear deal. In order to

quality for waiver sanction against Iran, India has cut back sharply on purchase of oil from

Iran. UCO was the major beneficiary of current account deposits of India-Iran oil facilities.

In our banking sector coverage universe, UCO bank’s cost of deposits were lowest at

6.1% whereas yield on loan was 10.1% at the end of 2QFY14. After this development,

bank’s margin would be impacted and accordingly UCO bank loses the valuation

premium. Although bank’s management is focusing on other area of growth like branch

expansion and customer acquisition. We slightly tweak our earnings and reduce our book

value estimate from Rs.175.5 to Rs.168.8. Now our revised price target for the stock

would be Rs.84 which is 0.5 times of FY14E book value.



9

UCO BANK

Fundamental through graph

Source:Eastwind/Company



10

UCO BANK



Quarterly Result 2QFY14 1QFY14 2QFY13 % YoY % QoQ

Interest/discount on advances / bills 3396 3152 3230 5.1 7.7

Income on investments 1026 968 897 14.4 5.9

Interest on balances with Reserve Bank of India 8 37 32 -73.7 -77.3

Others 14 49 37 -61.9 -71.6

Total Interest Income 4444 4207 4196 5.9 5.6

Others Income 209 462 213 -1.6 -54.7

Total Income 4653 4669 4409 5.6 -0.3

Interest Expended 2875 2843 3183 -9.7 1.1

NII 1569 1364 1013 54.9 15.1

Other Income 209 462 213 -1.6 -54.7

Total Income 1779 1826 1226 45.1 -2.6

Employee 382 376 332 15.2 1.6

Other Expenses 230 185 180 27.7 24.2

Operating Expenses 612 562 512 19.6 9.1

PPP( Rs Cr) 1166 1264 714 63.4 -7.8

Provisions 759 741 597 27.1 2.3

PBT 408 523 116 249.9 -22.1

Tax 7 12 13 -42.5 -39.0

Net Profit 400 511 104 285.9 -21.7

Balance Sheet

Equity Capital 2576 2576 2488 3.5 0.0

Reserve & Surplus 8195 7719 6644 23.3 6.2

Net Worth 10770 10295 9132 17.9 4.6

Deposits 188779 177050 162567 16.1 6.6

Borrowings 6605 6462 6601 0.1 2.2

Other Liabilities & Provisions 6262 6566 4773 31.2 -4.6

Total Liabilities 212416 200373 183073 16.0 6.0

Cash & Balance with Bank 7081 7600 7585 -6.6 -6.8

Balance with bank & money at call 8045 8218 1957 311.1 -2.1

Investments 55193 52999 49589 11.3 4.1

Advances 135233 125141 118045 14.6 8.1

Fixed Assets 977 926 815 19.9 5.5

Other Assets 5887 5489 5082 15.8 7.2

Total Assets 212416 200373 183073 16.0 6.0

Asset Quality

GNPA 7,376 7,178 5,888 25.3 2.8

NPA 4228 3939 3468 21.9 7.3

% GNPA 5.3 5.7 5.0

% NPA 3.1 3.1 2.9

% PCR(Without technical writeoff) 46.6 45.1 41.1

11

UCO BANK

Source: Company/Eastwind



Income Statement 2011 2012 2013 2014E 2015EInterest Income 11371 14632 16752 20313 24333

Interest Expense 7526 10730 12170 15592 18800

NII 3845 3902 4582 4721 5533

Change (%) 65.4 1.5 17.4 3.0 17.2

Non Interest Income 925 966 952 1342 1342

Total Income 4770 4868 5534 6063 6875

Change (%) 45.0 2.0 13.7 9.6 13.4

Operating Expenses 2075 2056 2177 1880 2131

Pre Provision Profits 2695 2811 3357 4184 4744

Change (%) 58.0 4.3 19.4 24.6 13.4

Provisions 1788 1661 2710 2596 2548

PBT 907 1150 647 1588 2196

PAT 907 1109 618 1573 1977

Change (%) -10.4 22.3 -44.2 154.5 25.6

Balance SheetDeposits( Rs Cr) 99071 115540 128283 153939 184727

Change (%) 17 11 20 20

of which CASA Dep 32031 34403 55733 67707 81249

Change (%) 6 7 62 21 20

Borrowings( Rs Cr) 5475 12901 9492 12315 14777

Investments( Rs Cr) 42927 45771 52245 62692 75231

Loans( Rs Cr) 99071 115540 128283 153939 184727

Change (%) 20 17 11 20 20

RatioAvg. Yield on loans 8.6 9.9 10.0 10.0 10.0

Avg. Yield on Investments 6.6 7.1 7.1 7.5 7.5

Avg. Cost of Deposit 4.7 6.5 6.6 7.0 7.1

Avg. Cost of Borrowimgs 12.5 6.1 7.0 6.0 6.0

Valuation

Book Value 135 137 146 169 183

CMP 107 79 50.1 74.55 74.55

P/BV 0.8 0.6 0.3 0.4 0.4

JLR VOLUME UPDATE : NOVEMBER 2013

The performance of JLR on Geography Wise has been Tabulated as under :

The various models under JLR portfolio have grown well for the company however Jaguar

XJmodel has done exceptionally well .The company has sold 6244 units of Jaguar for the

Nov2013.The Land Rover is also growing good for the company. The Range Rover Evoque has

grown by 10% YoY to 10953 units for the month.

The Table shows the Performance of Jaguar Portfolio : Model Wise.

Strong Performance For The Month.

The volumes for JLR across geographies came relatively, good all the geographies have

done well except for UK where volume de grew by 1%YoY. The markets of china continues

to do well for the company. The Chinese market have grown over 40% YoY for the JLR

followed by ROW markets.

Earlier management said that company would invest 1.5 billion pounds for new technically-

advanced aluminum vehicle architecture in forthcoming models. The first new model to

utilize this innovative architecture will be an all-new mid-sized sports sedan from Jaguar.

The product will be launched by 2015.


JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the

company for the month sold 37403 units up by 25% YoY. This total volume of JLR includes

6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is

marked by stellar performance by Jaguar with volume growth of almost 55 % YoY while the

Land Rover portfolio has grown by 20 % YoY.The new F type Jaguar is getting good

response.Company manage to sell 557 units of F-Type this month.


The Table shows the Performance of Land Rover Portfolio : Model Wise.



We continue to like Tata Motors, led by strong volume traction at JLR to continue over the

coming months as new Range Rover Sport get rolled out across more geographies, in

addition to continued traction from RR and F-Type, which in turn will boost realisation and

margin.


Model Nov-13 Nov-12 Change % (YoY)

UK 5231 5276 -1%

North America 6657 4843 37%

Europe 7300 6829 7%

China 9751 6879 42%

Asia Pacific 1882 1428 32%

All other markets 6582 4638 42%

Monthly Performance of JLR : Geography Wise


Defender 1615 1274 27%

Freelander 4124 4517 -9%

Discovery 3424 3683 -7%

New Range Rover Sport 6833 0 NA

Range Rover Sport 106 4909 NA

Range Rover 2 1417 NA

Range Rover Evoque 10953 9919 10%

New Range Rover 4102 143 NA

Monthly Performance of Land Rover: Model Wise


XF 3825 2743 39%

XJ 1628 1004 62%

XK 234 284 -18%

F-TYPE 557 NA

Monthly Performance of Jaguar : Model Wise

Persistent System.

BUY

8%

1M 1yr YTD

Absolute 7.5 83.5 126.6

Rel. to Nifty 4.9 77.8 107.9


Promoters 38.96 38.96 38.96

FII 15.28 14.84 12.39

DII 21.23 19.31 21.59

Others 24.53 26.89 27.06

Financials

2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 432.37 357.29 21.0 326.86 32.3

EBITDA 100.8 76.8 31.3 89.06 13.2

PAT 60.8 57.1 6.5 44.71 36.0

EBITDA Margin 23.3% 21.5% 180bps 27.2% (390bps)

PAT Margin 14.1% 16.0% (190bps) 13.7% 40bps

13

52wk Range H/L 906/477

Market Data

BSE Code 533179

NSE Symbol


Previous Target Price 890

Upside 10%

"Persistently innovating.."

Company update

CMP 876

Target Price 960

Persistent Sytem’s management remains confident of FY14 with deal pipeline being

strong and remains focused on increasing the share of IP-led revenues in its portfolio.

The management expects to see more than 15% dollar revenue growth, more than

NASSCOM guidance of 12-14 % for FY14E.

PERSISTENT


3505


Mkt Capital (Rs Crores)

Nifty


6237

Stock Performance

1 year forward P/E-x

Rs, Crore


View and Valuation: The company’s focus is shifting greater proportion to IP led services

and company has marquee clientele in cutting-edge technologies around cloud,

mobility, collaboration and analytics; witnessing faster growth. Considering the

company’s ability to achieve scale and growth, we rate “BUY” on the stock and we revise

our target price from Rs 890 to Rs 960. At a CMP of Rs 876, stock trades at 13.8x FY14E

earnings.

Persistent's management suggests that deal pipeline are looking strong and seeing

good activity and traction in the market across the board. Its focus on some of newer

technologies like cloud, analytics and mobility are gaining a lot of traction because of

pickup in demand environment. The emerging themes, (CAMB) Cloud, Analytics,

Mobility, and Big data could also see strong demand traction ahead. Because of

actively investment in these themes, management is very confident to see healthy

growth and also they expressed their confidence to beat the NASSCOM guidance (12-

14% revenue growth for FY14E).

With the potential revenue growth, strong deal pipeline and multi-year relationships

with marquee clientele in the Infrastructure vertical, we upgrade this stock and expect

for better earning visibility across niche IT players.

Recently , Persistent System reported superlative set of numbers during the 2QFY14

with 21%(QoQ) sales growth in INR term and 8.6%(QoQ) growth in USD term led by

38%(QOQ) growth on the intellectual property (IP) revenues. PAT growth was at 6.5%

(QoQ).

Margin ramp up: During the quarter, Its EBITDA margin improved by 180bps to 23.3%,

positively impacted by currency gain(270bps), while during the quarter company wage

hike to its off shore employee at a range of 8-9% was impacted margin by 310 bps

adversely. However, management expects to maintain margin at a range of 24-25% for

FY14E.

On segmental front: The Company’s cash cow segment Infrastructure and System,

which contributes 69% on sales, grew by 21% and life science (13% contribution on

sales) was up by 57% sequentially. While, Telecom space (17.6% contribution on sales)

increased marginally by 3% (QoQ).

Clients Metrics: During the quarter, company added 2 clients at 32 under medium

category( >$1mn to $3mn) and 1 client at 16 from large ( > $ 3Mn) . Revenue from top-1

client was improved from 21.2% (1QFY14) to 22.5% . DSO at 62days, almost 12

quarters low.

"BUY"13th Dec' 13


14

Persistent System.


Operating Metrics

Financials



2QFY12 3QFY12 4QFY13 1QFY13 QFY13 3QFY13 4QFY13 1QFY14 2QFY14

Top1 16.0% 15.9% 17.2% 17.8% 20.7% 21.1% 21.6% 21.2% 22.5%

Top 5 38.6% 37.0% 36.6% 33.5% 36.3% 37.3% 36.7% 34.7% 36.4%

Top 10 49.4% 48.3% 48.8% 45.3% 47.0% 49.4% 47.9% 46.0% 47.3%

Onsite - Linear 12665 12387 12603 12789 12863 12772 14014 14567 14283

Offshore - Linear 3803 3778 3895 3898 3978 4032 4143 4111 4109

Yeild per Employee(excld- Trainee) 3208 3247 3350 3345 3746 3817 3769 3602 3919

Total Employee 6900 6706 6628 6536 6370 6719 6970 7144 7457

Attrition 17.7% 17.4% 18.3% 18.9% 16.9% 16.0% 14.4% 14.2% 14.0%

Utilization rate %(xclude IP Led ) 73.8% 74.1% 71.7% 74.1% 75.2% 77.3% 72.5% 70.0% 71.7%

Billing Rate-USD/ppm

Employee Metrics

Client Concentration

Rs in Cr, FY10 FY11 FY12 FY13 FY14E FY15E

Sales 601.16 775.84 1000.3 1294.5 1657.54 2053.93

Employee Cost 368.74 481.62 599.05 719 895.07 1119.39

Cost of technical professionals 0 30.67 41.68 54 82.88 102.70

Other expenses 86.05 105.24 135.2 218 290.07 379.98

Total expenses 454.79 617.53 775.93 990.78 1268.02 1602.06

EBITDA 146.37 158.31 224.37 303.72 389.52 451.86

Depreciation 33.52 42.39 61.1 78 93.54 84.18

Other Income 11.23 34.44 34.44 34.44 66.30 71.89

EBIT 112.85 115.92 163.27 225.44 295.98 367.68

Interest Cost 0 0 0.00 0.03 0.00 0.00

Profit (+)/Loss (-) Before Taxes 124.08 150.36 197.71 259.851 362.29 439.57

Provision for Taxes 9.05 10.62 55.09 75.37 108.69 131.87

Net Profit (+)/Loss (-) 115.03 139.74 142.62 184.481 253.60 307.70

Growth-% (YoY)

Sales 1.2% 29.1% 28.9% 29.4% 28.0% 23.9%

EBITDA 60.2% 8.2% 41.7% 35.4% 28.3% 16.0%

PAT 74.1% 21.5% 2.1% 29.4% 37.5% 21.3%

Expenses on Sales-%

Employee Cost 61.3% 62.1% 59.9% 55.5% 54.0% 54.5%

Other expenses 14.3% 13.6% 13.5% 16.9% 17.5% 18.5%

Tax rate 7.3% 7.1% 27.9% 29.0% 30.0% 30.0%

Margin-%

EBITDA 24.3% 20.4% 22.4% 23.5% 23.5% 22.0%

EBIT 18.8% 14.9% 16.3% 17.4% 17.9% 17.9%

PAT 19.1% 18.0% 14.3% 14.3% 15.3% 15.0%

Valuation:

CMP 310.0 366.7 409.2 541.0 876.0 876.0

No of Share 4.0 4.0 4.0 4.0 4.0 4.0

NW 639.0 747.1 840.5 1018.3 1234.4 1504.7

EPS 28.8 34.9 35.7 46.1 63.4 76.9

BVPS 159.7 186.8 210.1 254.6 308.6 376.2

RoE-% 18.0% 18.7% 17.0% 18.1% 20.5% 20.4%

P/BV 1.9 2.0 1.9 2.1 2.8 2.3

P/E 10.8 10.5 11.5 11.7 13.8 11.4

Coal India LTD.

CCI’s Rs 1,773-crore penalty:289

350

350

21%

NA

533278

176226 Coal India to get Rs 2,119 cr extra on coal price revision :17622

6308

1M 1yr YTD

Absolute -1.3 -21.2 -21.4

Rel. to Nifty 2.8 8.8 8.6

2QFY14 1QFY14 4QFY13

Promoters 90.0 90.0 90.0

FII 5.5 5.4 5.4

DII 5.3 2.3 2.0

Others 2.2 2.4 2.6

Financials : Q2FY14 Y-o-Y % Q-o-Q % Q2FY13 Q1FY14

Net Revenue 15411 5.8 -6.4 14573 16472

EBITDA 2794 -2.4 -29.4 2862 3958

Depriciation 495 27.8 4.1 387 476

Interest Cost 8 -22.2 7.0 10 7

Tax 1412 -4.2 -27.9 1475 1958

PAT 3052 -0.8 -18.2 3078 3731(In Crs)

15

The company’s net sales grew 5.8% yoy to 15,411cr (above our estimate of 15,083cr).

Sales volumes stood at 109mn ton in 2QFY2014 compared to 102mn ton in 2QFY2013.

The blended realizations declined by 1.4% yoy to 1,414/ton (despite price hike) due to

lower realization on FSA coal.Despite 5.8% yoy growth in top-line, EBITDA decreased by

8.2% yoy to 3,176cr due to higher raw material costs (18.1% yoy to 2,251cr) and

contractual expenses (27.6% yoy to 1,394cr). The depreciation expenses increased by

27.8% yoy to 495cr; hence, adjusted net profit was flat yoy at 3,043cr .1 yr Forward P/B

Coal India 2QFY2014 top-line was above our estimate. The company’s net sales grew

5.8% yoy to 15,411cr. Sales volumes stood at 109mn ton in 2QFY2014 compared to

102mn ton in 2QFY2013. The blended realizations declined by 1.4% yoy to 1,414/ton

despite price hikes. Its FSA coal’s realizations were lower than expected due to lower

grade coal. The company liquidated 11mn ton of old stock.

Source - Comapany/EastWind Research


Mkt Capital (Rs Crores)

Average Daily Volume (Nos.) Coal India Ltd is likely to get additional revenue of Rs 2,119 cr in this fiscal on account of

revision in dry fuel prices.CIL (Coal India Ltd) has revised and rationalized the basic

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

additional revenue due to revision of basic notified price for the current financial year is

Rs 2,119 cr.CIL had revised the prices of all grades of coal, barring three, for all its eight

producing subsidiaries with effect from May 28 this year. Mahanadi Coalfields which is

expected to contribute Rs 686 crore, followed by Rs 664 crore from Northern Coalfields

and Rs 495 crore from South Eastern Coalfields.

Nifty

Stock Performance-%


Company UpdateCMP The Competition Commission of India (CCI) imposed a Rs 1,773 cr fine on Coal India, the

country' monopoly commercial coal miner, based on a complaint filed by two power

companies that India's monopoly producer of coal abused its dominance. The

government owns 90% stake in Coal India, and has traditionally drawn hefty dividend

income from the cash rich coal company. In 2012-13, the company paid a total dividend

of Rs 8,843 cr out of which the government's share was Rs 7,959 cr. A Rs 1800-crore fine

could possibly mean less profits for the company and less dividend income for its owners.

But as the main owner, the government, will pocket this amount in the form of a fine, it

will not be poorer in any way.

Target Price


Upside


Market DataBSE Code

NSE Symbol COALINDIA


"Buy"12nd Dec' 13


OUTLOOK:

FY10 FY11 FY12 FY13

431 431 436 452

416 425 433 465

1073 1183 1441 1468

404744 390243 377447 364736

1066 1105 1155 1240

FY11 FY12 FY13 FY14E

50234 62415 68303 69864

7573 5123 6556 8383

1755 2013 2333 2595

4580 4901 5802 6057

20481 26705 27943 28943

40390 40857 50219 53738

9843 21558 18084 16126

1673 1969 1813 1860

79 54 45 34

5595 6484 7623 7332

10868 20588 17356 15870

33 51 36 33.1

16

ROE

Cost Of Projects & Contractual

Power and fuel

contractual expenses

Employee benefit Expence

Expenditure

EBITDA

Depriciation

Interest Cost

Tax

PAT

Net Revenue from Operation

OPERATING MATRIX

Coal Production in MT

Coal Offtake in MT

Revenue Generation From unit Ton

Avg Man Power (in numbers)

Productivity Per Man

P/L PERFORMANCE

Coal India LTD.

Coal India 2QFY2014 top-line was above our estimate. The company’s net sales grew

5.8% yoy to 15,411cr. Sales volumes stood at 109mn ton in 2QFY2014 compared to

102mn ton in 2QFY2013. The blended realizations declined by 1.4% yoy to 1,414/ton

despite price hikes. Its FSA coal’s realizations were lower than expected due to lower

grade coal. The company liquidated 11mn ton of old stock.

CIL’s e-auction realizations have declined over the past one year on account of decline

in international coal price coupled with weak domestic demand. Going forward, we

expect CIL’s profitability to be affected due to lower e-auction realizations, sticky staff

costs and other expenses. Moreover, given the price hike taken during 4QFY2013, we

do not expect CIL to undertake any further price hikes in the near-term.

We expect modest increase in sales volumes growth during FY2013-15 on account of

poor offtake capabilities of CIL. Also, we expect CIL’s margins to decline during FY2014

due to lower e-auction realizations and higher staff costs/other expenses.News flows

related to further divestment in CIL by the government is likely to keep the stock price

under pressure in our view. we recommend Buy rating on the stock with our previous

target price Rs.350.


FY10 FY11 FY12 FY13

6316 6316 6316 6316

20956 26998 34137 42156

27273 33314 40453 48472

343 1334 1305 1078

1620 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

17

Net Cash Flow during year

Trading At :

Net Cash From Operation

Cash From Investment

Cash from Finance

CASH FLOWS

Cash from Operation

Changes In Working Capital

Creditors to Turnover%

Inventories to Turnover%

Debtor to Turnover%

Total Assets

RATIOS

P/B

EPS

Trade receivables

Cash and bank balances

Short-term loans and advances

Capital work-in-progress

Long-term loans and advances

Inventories

Tangible assets

Long-term borrowings

Short-term borrowings

Long-term provisions

Trade payables

Short-term provisions

Total liabilities

Intangibles

Total equity

Coal India LTD.

B/S PERFORMANCE

Share capital

Reserve & Surplus


BUY

1M 1yr YTD

Absolute -1 46 41

Rel. to Nifty -4 39 23


3Promoters 46.8 46.8 46.8

FII 31.5 30.7 28.8

DII 12.1 12.4 14.3

Others 9.7 10.1 10.0

Financials Rs, Crore

2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%

Revenue 2668 2476 7.8 2301 15.9

EBITDA 660 590 11.9 515 28.2

PAT 417 405 3.0 297 40.4

EBITDA Margin 24.7% 23.8% 90bps 22.4% 240bps

PAT Margin 15.6% 16.4% (70bps) 12.9% 270bps

18

LUPIN"Optimistic Guidance "

Target Price 1006

Previous Target Price -

Result Update

CMP 873

The management of the company in its latest media interaction stated that the company is

confident of logging 15-20 % CAGR in US and India in the days to come on the back of rich

pipeline as well as acquisition based strategy. Management further said that company is

expecting to launch about 100 new drugs in next three years. This new launch will include

an entire range of oral contraceptives and opthal products.15%Upside

One Year Forward P/E


39101



We have slightly raise our TP to Rs 1006 on the back management guidance post the

results. The management is quite optimistic for its business outlook going forward and

believes that the company will achieve its set target going forward.

The Net profits for 2QFY14 came at Rs 417 Cr. The higher incidence of tax during the

quarter is due to tax provision of Rs 51 Cr made on dividends received from subsidiaries

Lupin earlier posted slightly better than expected 2QFY14 results ,the company reported

its net sales at Rs 2631 Cr up by 18 % YoY on the back of strong business performance

from US and Europe formulation segment. The segment grew by 31% YoY to Rs. 1108.9

Cr during 2Q FY14, against Rs. 844.4 Cr for Q2, FY 2012

‐

13.This segment contributes

42% to overall Company sales.US brands business contributed 10% of total US sales,

whereas the generics business contributed 90% for the quarter under review.

The Indian formulation business contributed 25% of the Company’s

overall revenues for the quarter.Company’s India formulation business grew by 9%

recording revenues of Rs. 6,635 m. during Q2, FY 2013

‐

14, as compared to Rs. 6,064 m.

for Q2, FY 2012

‐

13. The company’s rest other business geographies to have performed

relatively good for the company.

The company has filed 7 ANDAs and received 6 ANDA approvals in the quarter. Cumulative

ANDA filings with the US FDA now stand at 183 with the company having received 92

approvals to date.

Stock Performance-%


Mkt Capital (Rs, Cr)

The operating EBITDA for the 2QFY14 came at Rs 660 Cr and OPM stands at 24.7%.The

RM cost decreased by 7.7% to 32.0% of net sales at Rs. 841.3 Cr during 2QFY14 as

compared to Rs. 889.8 Cr for 2Q FY 13.Manufacturing & other expenses increased by to

30.4% of net sales at Rs. 798.8 Cr during 2Q FY14 as compared to Rs. 591.7 Cr for the

same period last fiscal.Revenue expenditure on R&D stood at 8.3% of net sales at Rs.

217.2 Cr.

Nifty 6332

Change from Previous -


NSE Symbol LUPIN

Market Data

BSE Code 500257

"BUY"11th Dec' 13


19


LUPIN

Sales and PAT Trend (Rs)


OPM %

NPM %

company reported its net sales at Rs 2631 Cr

up by 18 % YoY on the back of strong

business performance from

US and Europe formulation segment.

The higher incidence of tax during the

quarter is due to tax provision of Rs 51 Cr

made on dividends received from subsidiaries




20

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information and should not be reproduced or redistributed to any other person in any from. The report/message is based upon publicly available information, findings of our research wing

“East wind” & information that we consider reliable, but we do not represent that it is accurate or complete and we do not provide any express or implied warranty of any kind, and also

these are subject to change without notice. The recipients of this report should rely on their own investigations, should use their own judgment for taking any investment decisions keeping

in mind that past performance is not necessarily a guide to future performance & that the the value of any investment or income are subject to market and other risks. Further it will be safe

to assume that NSL and /or its Group or associate Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise, individually or otherwise in

the recommended/mentioned securities/mutual funds/ model funds and other investment products which may be added or disposed including & other mentioned in this report/message.

Economy & Finance

As Slower Economic Growth Narnolia Securities Limited Recommended Buy Stock of Bank of India