India Equity Analytics for today - Buy Stocks of Divi’s Laboratories and Godrej Consumer

DIVISLAB : Good Growth Ahead "BUY" 19th Dec 2013

The company posted strong 2QFY4 results with net sales growing to Rs 566 Cr up by 19.7% YoY on the back of good growth coming from all

business segments. The generic API grew by 18% YoY to Rs 261 Cr for the quarter and CRAMS business segment grew by 20% YoY to Rs 271

Cr............................................. ( Page : 2-4)

IEA-Equity

Strategy

19th Dec, 2013

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 :16-20)

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 : 14-15)

Godrej Consumer Product : " Strategy Shining" "BUY" 19th Dec 2013

Its strong 20%+ growth in the domestic household insecticides business is the key growth driver. We expect strong momentum to continue in

its international business led by Megasari and consolidation of Darling business. Despite some concerns related to higher leverage, lost

domestic focus and currency risk, we remain confident of achieving the 20%+ sales growth with strong PAT growth for FY14E & beyond.

........................................... ( Page : 9-10)

AXIS BANK : "Neutral" 19th Dec 2013

Axis bank is trading at 1.6 times of one year forward book which is almost upper side of bear case valuation band. We are not seeing bank’s

earnings better than expectation as bank’s has significant exposure in riskier sector like infrastructure and power as compare to its peers. We

have taken bank’s valuation multiple in bear case scenario on account of non visibility of ROE improvement and expected muted earnings

growth. We assume loan and deposits growth of 16% and 15% along with margin at 3.5%. Better than expected performance will lead price

performance and valuation multiple............................... ( Page : 5 - 8 )

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 : 11- 13)

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 : 21)

India Equity Analytics

BUY

1M 1yr YTD

Absolute 2.8 4.4 1.4

Rel. to Nifty 0.1 -1.3 -14.6

Current 1QFY14 4QFY1

3Promoters 52.1 52.2 52.2

FII 15.8 14.9 14.0

DII 12.5 12.5 13.3

Others 19.5 20.5 20.5

Financials Rs, Crore

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

Revenue 567 517 9.7 474 19.6

EBITDA 249 197 26.4 165 50.9

PAT 205 174 17.8 117 75.2

EBITDA Margin 43.9% 38.1% 580bps 34.8% 910bps

PAT Margin 36.2% 33.7% 250bps 24.7% 1150bps

2

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

Stock Performance-%

Share Holding Pattern-%

Mkt Capital (Rs, Cr)

Nifty 6217

-

Result Update

CMP 1186

One Year Price vs Nifty

(Source: Company/Eastwind)

15631

Average Daily Volume 5.43

About The Company :Divi’s Laboratories Limited is an India-based manufacturer of Active Pharmaceutical

Ingredients (APIs) and Intermediates. Divi is engaged in manufacture of generic APIs,

custom synthesis of active ingredients for innovator companies and other specialty

chemicals like peptides and nutraceuticals.

Investment Rationale :Change from Previous -

DIVISLABGood Growth Ahead

Target Price 1350

Previous Target Price

NSE Symbol DIVISLAB

Market Data

BSE Code 532488

14%Upside

The company have one more business segment ‘Nutraceuticals’ relatively smaller and

newer as compared to other business segment can act as growth driver going forward. The

management of the company is quite optimistic for this business segment and has guided

that this business at 40-50% CAGR (albeit on a low base) over the next 2-3 years.

2QFY14 Results Update.The company posted strong 2QFY4 results with net sales growing to Rs 566 Cr up by

19.7% YoY on the back of good growth coming from all business segments. The generic

API grew by 18% YoY to Rs 261 Cr for the quarter and CRAMS business segment grew by

20% YoY to Rs 271 Cr. The company derives almost 45-50% of revenues each from

CRAMS and generic API business while rest comes from ‘Nutraceuticals’.

The operating EBITDA for the quarter came at Rs 250 Cr and OPM at 43.9 %. Company’s

2QFY14 EBITDA margins were higher than 34.8% reported in Q2FY13 on account of

higher gross margins, lower power cost and forex loss in Q2FY13.The RM cost as % of net

sales stands at 50% for the 2QFY14 while employee cost as % of net sales was 10 %.

Company is one of the few CRAMS (Contract Research and Manufacturing Services)

players with a superior business mix comprising high-margin custom synthesis of APIs

(Active Pharma Ingredients) and intermediates for innovator companies. The company

collaborates with innovators throughout the product development cycle. Post

commercialization, company is usually the key supplier of APIs and intermediates for these

products to the innovators. In 2012-13, the company added six products to its custom

synthesis portfolio.The CRAMS business which contributes nearly 45%- 50% of the total revenues have from

Rs 560 Cr in 2009 to Rs 1000 Cr translating CAGR of 15 %.The Generic API business

which contributes another 45-50 % to the total revenues is also well track after witness

some pressure in FY10.As on FY13 this segment contributed Rs 1029 Cr to the total

revenues and this segment to more revenues to the company in the light of upcoming

patent cliff of US and new launches .

52wk Range H/L 1189/905

"BUY"19th Dec' 13


3


Company has capitalized Fixed assets to the tune of Rs120 Cr for H1 FY14. The company

will commercialize DSN SEZ by the end of the year and the FDA inspection post that. The

new DSN SEZ contribution will start in Q1 FY15E and full benefits will fructify only from Q2

FY15E.The existing DSN blocks contributed Rs125 Cr revenues in Q2 FY14 as against

Rs70.8 Cr in Q1 FY14.

Management GuidanceThe management of the company after strong 2QFY14results expects that revenue to

grow by 15-20 % (15% guided earlier), with FY15E growth expected above 20%. The

management further indicated that this high level of OPM is not sustainable but reiterated

that 38% levels OPM is quite reachable . On Power shortage ,which declined the OPM in

1QFY14 has been solved and will aid margin expansion going forward. The capex

guidance stands at INR500-600m (apart from INR2b addition from CWIP) and tax rate

guidance remains between 23-24%.

View & ValuationThe company is not only the most profitable company in the CRAMS space, but also

features among the most profitable companies in the Indian healthcare sector with EBIDTA

margin of 35-40% backed by its strong chemistry skills and custom synthesis presence.The

stock is currently trading at CMP of Rs 1186, strong 2QFY14 results ,optimistic

management guidance and better business model in comparison to its peers makes us

confident for the stock. We are positive for the stock and recommend BUY with

target price of Rs 1350.


DIVISLAB

Continued…The net profits for the 2QFY14 came at Rs 205 Cr and NPM came at 36.2%.The net profits

also include forex gain of Rs 31 Cr. The company reports its forex gain under other

income headings and forex loss under its other expenditure head. The tax rate for the

quarter stands at 22%.

Graphical Depiction

Revenue Break Up: 2QFY14


4

DIVISLAB

Sales and PAT Trend (Rs)


Net sales growing to Rs 566 Cr up by 19.7%

YoY on the back of good growth coming from

all business segments.

2QFY14 EBITDA margins were higher than

34.8% reported in Q2FY13 on account of

higher gross margins, lower power cost and

forex loss in Q2FY13.

OPM %


NPM %

The 2QFY14 PAT also include forex gain of Rs

31 Cr. The company reports its forex gain

under other income headings and forex loss

under its other expenditure head.




AXIS BANK

1286

1325

1247

3

6.3

1M 1yr YTD

Absolute 12.9 -5.2 -5.2

Rel.to Nifty 12.6 -10.9 -10.9


3Promoters 33.9 33.9 33.5

FII 40.7 4094.0 39.6

DII 8.8 8.5 10.0

Others 16.6 16.6 17.0

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 6566 8026 9666 12620 14710

Total Income 11238 13513 16217 19715 21804

PPP 6377 7413 9303 11238 12429

Net Profit 3340 4224 5179 6343 6977

EPS 81.4 102.2 110.7 135.2 149.1

5

Mkt Capital (Rs Cr)


Stock Performance

Average Daily Volume

Change from Previous

Axis Bank Vs Nifty


2066127

Nifty 6217

Company Update NEUTRAL

CMP

Target Price

Axis bank is trading at 1.6 times of one year forward book which we believe

that it is higher side of our bear case valuation band. We have neither seen

valuation band expansion nor did earnings lead price performance. Axis bank

has significant exposure in infrastructure and power (12.64% in 2QFY14) as

compare to its peer group. Asset quality pressure may persists in coming

quarters which restrict bank’s valuation multiple in the range of 1.4 to 1.6

times of book in our view. We advice our investors to book part profit at the

current level. Our valuation multiples are based upon bank’s present growth

parameters, better than expected performance and visibility of ROE

improvement will expand valuation and multiples.

39764


Market Data

Upside

1549/763

BSE Code 532215

NSE Symbol AXISBANK

52wk Range H/L

Healthy NII growth on the back of margin improvement and loan growth

Sequentially stable asset quality help to make lower provision

On asset quality front, Axis bank reported 10 bps deterioration in GNPA on

sequential basis to 1.4%. In absolute term GNPA increased by 10% QoQ and

provision increased by 12% QoQ. This led net NPA increased by 6% sequentially. In

percentage term NPA stood at 0.4%, flat on QoQ basis. Provision coverage ratio

(without technical write off) was improved by 100 bps to 69.3% and PCR at technical

write off was 89%. During quarter bank made loan loss provision of Rs.687 cr versus

Rs.712 cr in 1QFY14 and Rs.509 cr in 2QFY13. On sequential basis risky sector

like power and infrastructure exposure remain flat at 12.64% from 12.67% in

1QFY14.

Declined in cost income ratio led robust growth in operating profit

Operating expenses increased by 12.1% YoY to Rs.1953 cr in which employee cost

and other operating cost increased by 11.4% and 12.5% respectively. Cost income

ratio declined by 440 bps to 41.5% from 44.9% in 2QFY13. Employee cost and other

operating cost as a percentage of total assets remain flat at 0.2% and 0.4%

respectively. With the support of healthy NII, fee income and improvement of cost

income, operating profit grew by 29% YoY and -3.3% in QoQ to Rs.2750 cr.

Sequential declined of operating profit was due to gain of treasury income in

1QFY14 which was absent in 2QFY14.

During 2QFY14, Axis bank reported NII growth of 26.2% YoY largely due to 50 bps

YoY improvement of margin and 577 bps YoY increased of credit deposits ratio and

17% increased in loan growth. Axis bank’s interest earnings assets increased by

20% YoY whereas interest bearing liabilities increased by 13% YoY. Total revenue

of the bank grew by 21.3% YoY to Rs.4703 cr. Non- interest income registered

growth of 14% YoY to Rs.1766 cr.

"NEUTRAL "19th Dec, 2013


6

On business growth parameters, bank’s total business grew by 12% YoY to Rs.4567 bn

as against Rs.4077 bn. Deposits grew by moderate pace with 8% YoY while current

deposits and saving deposits grew by 9% and 18% respectively taking overall CASA ratio

to 42.9%. Bank’s strategy to focus on retail deposits seem well is shaping as share of

retail deposits in term deposits increased continuously to 45.2% from 40.3% in21QFY13.

Loan grew by 17% YoY to Rs.20130 bn. Incremental loan growth came from retail

advance and SME segment. Share of retail loan increased to 30.2% of overall loan from

25.7% in 2QFY13. Bank’s has decreased in share of risky sector (Power & Infrastructure)

exposure to 12.64% from 13.63% in 2QFY13. Credit deposits ratio improved by 577 bps

YoY to 78.8% implying best utilization of excess liquidity in balance sheet.

Sequential declined of margin owing to flat loan yield

Axis bank delivered good set of numbers during quarter but exposure to stress sector

remain at 12%+ level. Moreover Axis bank has higher exposure in small, medium

enterprises and infra segment in comparison to peers. In challenging macro environment

and tight liquidity situation, Axis bank is more vulnerable among peers. At the current

price of Rs.1286, stock is trading at 1.6 times of one year forward book which is upper

side of bear case valuation band. We advice book part profit at current level. We value

bank at multiple of 1.4 to 1.6 times of one year forward book which implies Rs. price

range of Rs.1247 to Rs.1325.

AXIS BANK


During quarter bank reported 7 bps QoQ declined in NIM to 3.79% led by 500 bps

sequentially declined of credit deposits ratio and almost flat of loan yield on QoQ basis.

Loan yield during the quarter was 10.5% and cost of deposits declined from 7.4% to

7.1% sequentially.

Valuation & View

Healthy NII growth and controlled CI ratio along with stable margin help to boost

up profit

With the support of healthy NII growth and controlled operating expenses led net profit of

26% YoY to Rs.1362 cr from Rs.1081 cr. Consequently ROA improved by 12 bps to 1.6%

and ROE declined to 15.3% from 17.5% in 2QFY13 largely due to operating leveraging.

Modest deposits growth and strong traction in loan growth


7

AXIS BANK

Source: Eastwind/Company



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

Interest/discount on advances / bills 5394 5189 4736 13.9 4.0

Income on investments 2143 2015 1897 13.0 6.3

Interest on balances with Reserve Bank of India 35 34 22 58.9 2.6

Others 37 39 32 14.9 -5.5

Total Interest Income 7609 7278 6687 13.8 4.6

Fee Income 1432 1317 1343 6.6 8.7

Trading Income 5 440 207 -97.6 -98.9

Miscellaneous Income 329 24 0 - 1270.2

Others Income 1766 1781 1551 13.9 -0.9

Total Income 9375 9059 8238 13.8 3.5

Interest Expended 4672 4413 4360 7.2 5.9

NII 2937 2865 2327 26.2 2.5

Other Income 1766 1781 1551 13.9 -0.9

Total Income 4703 4647 3877 21.3 1.2

Employee 644 643 578 11.4 0.1

Other Expenses 1309 1160 1164 12.5 12.9

Operating Expenses 1953 1803 1742 12.1 8.3

PPP( Rs Cr) 2750 2844 2136 28.8 -3.3

Provisions 687 712 509 35.0 -3.5

PBT 2062 2131 1626 26.8 -3.2

Tax 700 722 545 28.4 -3.1

Net Profit 1362 1409 1081 26.0 -3.3

Balance Sheet Date ( Rs Bn)

Net Worth 362 349 252 43.6 3.7

Deposits 2554 2384 2356 8.4 7.1

Loan 2013 1982 1721 16.9 1.6

Asset qualtiy( Rs Cr)

GNPA 2734 2490 2191 24.8 9.8

NPA 838 790 654 28.1 6.1

%GNPA 1.4 1.3 1.3

%NPA 0.4 0.4 0.4

8

FINANCIALS & ASSUPTION

AXIS BANK




Income Statement 2011 2012 2013 2014E 2015EInterest Income 15155 21995 27183 33243 38426

Interest Expense 8589 13969 17516 20622 23716

NII 6566 8026 9666 12620 14710

Change (%) 31.2 22.2 20.4 30.6 16.6

Non Interest Income 4671 5487 6551 7095 7095

Total Income 11238 13513 16217 19715 21804

Change (%) 25.3 20.2 20.0 21.6 10.6

Operating Expenses 4860 6100 6914 8478 9376

Pre Provision Profits 6377 7413 9303 11238 12429

Change (%) 22.4 16.2 25.5 20.8 10.6

Provisions 3033 3189 4124 2176 2461

PBT 3345 4224 5179 9062 9967

PAT 3340 4224 5179 6343 6977

Change (%) 34.8 26.5 22.6 22.5 10.0

Balance SheetDeposits( Rs Cr) 189166 219988 252614 290506 334081

Change (%) 34 16 15 15 15

of which CASA Dep 77758 91412 112100 124917 143655

Change (%) 18 18 23 11 15

Borrowings( Rs Cr) 26268 34072 43951 51266 58956

Investments( Rs Cr) 71788 92921 113738 129873 149354

Loans( Rs Cr) 142408 169760 196966 228481 265037

Change (%) 36 19 16 16 16

Valuation

Book Value 460 549 708 828 957

CMP 1404 1146 1304 1288 1288

P/BV 3.1 2.1 1.8 1.6 1.3

Godrej Consumer Product

840

960

725

14%

32%

▪ Godrej Consumer aims to grow 10 times in the next 10 years.

Key updates;

1M 1yr YTD

Absolute -2.1 17.6 27.0

Rel. to Nifty -4.8 11.5 8.8


Promoters 63.3 63.3 63.5

FII 28.7 28.3 28.2

DII 1.2 1.2 1.2

Others 6.8 7.2 7.1

Financials Rs, Cr

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

Revenue 1961.7 1724.9 13.7% 1600.32 22.6%

EBITDA 299.8 225.4 33.0% 248.96 20.4%

PAT 195 133 46.6% 159.31 22.4%

EBITDA Margin 15.3% 13.1% 210bps 15.6% (30bps)

PAT Margin 9.9% 7.7% 220bps 10.0% (10bps)

9

Mkt Capital (Rs Cr)



Stock Performance

▪ The company does not see company’s margins coming under pressure going ahead,

due to heavy investments it has made in advertisements. We expect 15-15.5% EBITDA

margin for FY14E and 15.5-16% for FY15E.


1 yr Forward P/B


120012

Nifty 6217

▪ Godrej Consumer's management is hopeful of seeing an uptick in the urban demand

and the rural demand is expected to be strong due to good harvest. We expect 20-22%

(YoY) sales growth for 3QFY14.

" Strategy Shining"

CMP

Upside

Key facts from recent Management Comments:

Target Price

Company update BUY


28593


977/693

BSE Code 532424

NSE Symbol GODREJCP

Market Data

52wk Range H/L

View and Valuations: Its strong 20%+ growth in the domestic household insecticides

business is the key growth driver. We expect strong momentum to continue in its

international business led by Megasari and consolidation of Darling business. Despite

some concerns related to higher leverage, lost domestic focus and currency risk, we

remain confident of achieving the 20%+ sales growth with strong PAT growth for FY14E

& beyond. At a CMP of Rs840, stock trades at 5.7x FY15E P/BV. We retain BUY with a

price target of Rs 960.

▪ On International revenue front, Godrej Consumer could see some threads in certain

areas especially Indonesia (18% of sales) and Nigeria (13% of sales), Indonesia is going

into election next year and in Nigeria, there have been wage hikes.

Demand Pickup scenario: On demand side scenario, we expect that the strong

agricultural season leading to strong rural GDP growth would support to improve

demand environment very soon. Considering recent GDP growth and Current Account

Deficit (CAD) numbers, we are expecting that the economy is moving to track and urban

demand will see some picking up.

Strong focus on driving growth with 10x10 strategy: Its strong focus on driving growth

in the domestic and international market by expansion of products and distribution

reach, we expect strong earning in near future. With launching new products in

domestic as well as international mkt, Godrej CP will explore organic & inorganic growth.

Along with its 3x3 strategy, it has 10x10 strategy also, which refers to 10x growth in 10

yrs.

Products strategy: The company continues to gain and enjoy market leader ship position

across all three formats. The company is driving increase in penetration with launch of

"Goodknight Advanced colour play". The company has launched Goodknight aerosol and

coil in Nigeria.

Recent developments: The Company has entered into an agreement on Oct 7, 2013, to

acquire a 30% stake in Bhabani Blunt Hair Dressing Pvt Ltd, a premier hair salon

company with one of the strongest consumer franchises in this space.

"BUY"19th Dec' 13


10

Godrej Consumer Product

Regionwise margin:

Quaterly snapshot:

-1

-2


Financials and Valuation



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

Sales Gr(YoY) 23% 36% 31% 39% 35% 26% 30% 23.9% 22.6%

PAT Gr(YoY) -2.6% 68.3% 36.0% -45.5% 24.7% 3.1% 58.7% 1.8% 22.4%

EBITDA Margin 18.0% 20.1% 18.9% 14.5% 15.6% 16.8% 16.2% 13.1% 15.3%

PAT Margin 12.0% 13.9% 13.5% 12.1% 10.8% 11.3% 13.3% 9.0% 10.9%

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

India 18.9% 20.4% 20.2% 15.1% 17.6% 18% 16.7% 15.8% 18.9%

Indonesia 19.4% 20.6% 20.7% 18% 19% 20% 19% 15% 17%

Africa 26.0% 31% 19.3% 19% 16% 20% 7% 13% 14%

Latin America 7.4% 9% 16.3% 3% 4% 8% 9% 3% 7%

Europe 11% 5% 10.5% 13% 9% 5% 13% 9% 10%

Rs, in Cr FY10 FY11 FY12 FY13 FY14E FY15E

Sales 2041.2 3693.6 4866.16 6390.79 7823.32 9198.58

Other Operating Income 2.5 28.11 45.93 16.58 20.30 23.86

Total income from operations 2043.7 3721.71 4912.09 6407.37 7843.62 9222.44

RM Cost 619.59 1458.28 2174.67 2640.31 3176.67 3781.20

Purchases of stock-in-trade 367.16 294.12 356.11 451.03 552.13 649.19

WIP -40.45 -45.22 -212.26 -118.06 -183.50 -224.07

Employee Cost 151.81 284.51 391.91 590.68 723.08 850.19

Ad Spend 132.8 352.85 449.86 660.35 902.02 1014.47

Other expenses 402.98 695.96 850.47 1196.46 1459.0 1689.7

Total expenses 1633.89 3040.5 4010.76 5420.77 6629.4 7760.7

EBITDA 409.81 681.21 901.33 986.6 1214.2 1461.7

Depreciation and Amortisation 23.6 49.92 64.44 77 94.3 102.1

Other Income 44.81 24.13 6.07 67.78 47.8 56.2

Exceptional Item 0 41.14 200.17 96.12 78.4 92.2

EBIT 386.21 631.29 836.89 909.6 1119.9 1359.6

Interest 11.1 43.64 65.84 77.45 61.1 53.2

PBT 419.92 652.92 977.29 996.05 1185.1 1454.9

Tax Exp 80.33 138.21 226.05 179.18 225.17 290.98

PAT 339.59 514.71 751.24 816.87 959.9 1163.9

Growth-% (YoY)

Sales 46.3% 81.0% 31.7% 31.3% 22.4% 17.6%

EBITDA 95.2% 66.2% 32.3% 9.5% 23.1% 20.4%

PAT 97.0% 51.6% 46.0% 8.7% 17.5% 21.3%

Expenses on Sales-%

RM Cost 30.3% 39.2% 44.3% 41.2% 40.5% 41.0%

Ad Spend 6.5% 9.5% 9.2% 10.3% 11.5% 11.0%

Employee Cost 7.4% 7.6% 8.0% 9.2% 9.2% 9.2%

Other expenses 19.7% 18.7% 17.3% 18.7% 18.6% 18.3%

Tax rate 19.1% 21.2% 23.1% 18.0% 19.0% 20.0%

Margin-%

EBITDA 20.1% 18.3% 18.3% 15.4% 15.5% 15.8%

EBIT 18.9% 17.0% 17.0% 14.2% 14.3% 14.7%

PAT 16.6% 13.8% 15.3% 12.7% 12.2% 12.6%

Valuation:

CMP 261.0 365.0 559.0 836.0 840.0 840.0

No of Share 30.8 32.4 34.0 34.0 34.0 34.0

NW 954.7 1725.2 2815.2 3313.0 4073.9 5038.8

EPS 11.0 15.9 22.1 24.0 28.2 34.2

BVPS 31.0 53.2 82.8 97.4 119.7 148.1

RoE-% 35.6% 29.8% 26.7% 24.7% 23.6% 23.1%

Div- Payout-% 30.6% 38.3% 22.6% 23.0% 20.7% 17.1%

P/BV 8.4 6.9 6.8 8.6 7.0 5.7

P/E 23.7 23.0 25.3 34.8 29.8 24.6

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


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

11

CMP


Upside


BANKINDIA Vs Nifty


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.

Inch up restructure guidance in 3QFY14

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

rather than write-off


12260

Market Data



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

Company Update BUY

393/126

BSE Code 532149

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)

"BUY"18th Dec, 2013


12

BANK OF INDIA



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



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

Others 0 0 0 42.9 36.4


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

13

BANK OF INDIA




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


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

14

1011877

NSE Symbol TCS

52wk Range H/L

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.


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 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.


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.

Nifty 6139

Stock Performance

"BUY"18th Dec' 13


15


Financials


Quarterly snapshot

TCS.


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

16

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



Average Daily Volume 2960821

Nifty 6154

NSE Symbol UCOBANK

52wk Range H/L 86.65/46

Mkt Capital (Rs Cr) 5561

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

"BUY"17th Dec, 2013


17

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.


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.


18

UCO BANK

Fundamental through graph

Source:Eastwind/Company



19

UCO BANK



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



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

Others 14 49 37 -61.9 -71.6


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

20

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


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

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.

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.


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

22

Risk Disclosure & Disclaimer: This report/message is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you.

Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any action based upon it. This report/message is not for public distribution and has been furnished to you solely for your

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

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

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

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

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

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

Economy & Finance

India Equity Analytics for today - Buy Stocks of Divi’s Laboratories and Godrej Consumer