Kotak Investment Strategist August - 2015

About the cover
Distribution of rainfall in the coming weeks is important to watch to ensure

a healthy crop yield. Any shortfall in rainfall is also likely to impact the rural
demand which is already depressed due to unseasonal rains and last year's
drought.
IN THIS ISSUE
Monthly Fundamental Outlook
One Month Portfolio
Markets remained quite volatile during last month on

the back of Grexit fears.
Latest Fundamental Stock Recommendation
12
Monthly Derivative Outlook
Preferred Picks - Fundamental
14
Monthly Technical Outlook
Yield to Maturity (YTM) of tax free bonds

Trading in secondary markets
23
Mutual Fund Recommendations
24
Company Fixed Deposits & Forthcoming IPOs
25
Caution advised around 8600.
The opening of the previous week was negative for the

market on the back of numerous negative news flow.
Forex Insight Research & Analysis
In the above graph Indian Rupee can be counted

amongst the outperformers.
RESEARCH TEAM
Fundamental Desk
Dipen Shah
IT
Ruchir Khare
Capital Goods, Engineering
Amit Agarwal
Logistics, Transportation
Jayesh Kumar
Economy
Sanjeev Zarbade
Saday Sinha
Banking, NBFC, Economy
Ritwik Rai
FMCG, Media
Sumit Pokharna
Oil and Gas
Teena Virmani
Construction, Cement
Arun Agarwal
Automobiles
Meeta Shetty, CFA

Pharmaceuticals
Jatin Damania
Metals & Mining
Pankaj Kumar
Midcap
K. Kathirvelu
Production
Technical Desk
Shrikant Chouhan
Amol Athawale
Derivative Desk
Rahul Sharma
Malay Gandhi
Prashanth Lalu
Sahaj Agrawal
MONTHLY FUNDAMENTAL OUTLOOK

Markets remained quite volatile during last month on the
back of Grexit fears. Lower than expected Q1FY16 results
and dry spell of monsoons in the month of July also
dampened the sentiments. Decline in the oil prices and other
global commodity prices was a positive for the markets,
though. Distribution of monsoons, progress on legislative
reforms in ongoing parliament session and remaining
quarterly results will remain the focus areas and may impact
sentiments in the short term. Passage of the Constitutional
Amendment Bill for GST as well as further progress on Land
Acquisition Bill would be key triggers for the markets over
this period.
In the short term, markets may react negatively in the
absence of any positive developments on the reforms front
and economic improvement at ground level. Failure of
monsoons to revive may act as an additional headwind. We
will watch out for developments on the same.
Over the medium term, markets will look out for
Government's efforts on boosting investment cycle, kick
starting stalled infrastructure projects and new project
awards. Decisions on rate hike by US Fed and growth in
China are also likely to be watched out for closely in medium
t e r m . C u r r e n t l y,
valuations of
We prefer domestic
benchmarks, at 15x
FY17 consensus
infrastructure and interestearnings, are near the
rate sensitive sectors, with
long term average.
medium to long term
We prefer domestic
perspective. Our preference
infrastructure and
stays for companies having
interest-rate sensitive
strong balance sheets and
sectors, with medium
t o l o n g t e r m
ethical managements.
perspective. Our
preference stays for
companies having strong balance sheets and ethical
managements. We are also positive on select large cap
export-oriented stocks, wherein the volatility in earnings in
limited. Key risks to our recommendation would come from
geo-political concerns globally, decline in foreign inflows,
sharp currency movements, spike in oil prices and a
prolonged delay in fiscal reforms.
Market performance - sector wise (July 2015)
Benchmark indices - India
Source: Bloomberg
Order inflow showing signs of revival;

inflow to ramp up further
Green shoots of revival in order inflow across sectors is being
witnessed led mainly by domestic Government projects.
Government spending has picked up across sectors in FY16, after
remaining muted in FY15, due to deficit considerations. The
government is targeting a 30% increase in investment spending in
FY16.
Tenders have been floated across roads, irrigation, railways, water
supply, power distribution and railways etc. These tenders are likely
to translate into healthy order inflow in the coming months. Road
sector has witnessed increased traction in both EPC and BOT side
after government addressed the issues related to environmental
clearance, land acquisition, exit policy, settlement of disputes etc.
We expect road projects to pick up pace in the coming months which
would be positive for both EPC and BOT players in the construction
sector.
While there is a pick-up in spending from the Government, private
sector investments have still not picked up. This is due to available
capacities (which are still being utilized), as well as due to stressed
balance sheets. We believe traction in private sector investments will
take some more time.
On the other hand, investment announcements in the capital goods
sector are still below expectations. Growth in capital goods index,
which is considered a barometer for investments, slowed to 1.8% in
May after rising by 6.8% in April. We do expect orders to start
flowing in due to increased Government spending.
Going forward, we believe that monetary easing is a necessary but
not sufficient condition for reviving the investment cycle. Increased
government spending coupled with easing of dispute settlement
mechanism, environment clearances and faster land acquisition are
likely to drive the investment cycle going forward.
Sectors likely to benefit from investment cycle revival would be
infrastructure, capital goods, power, steel, cement as well as metals.
Source: Bloomberg
Investment Strategist August 2015

Legislative reforms - Significant headwinds
The Monsoon Session has been a wash-out till date. With only
about a week remaining in the session, the Government is racing
against time to even debate on important legislations. The latest
developments on suspension of Congress MPs from the
Parliament may act as one more headwind for even the debates
to start. The opposition parties are already demanding
resignations of Ms. Sushma Swaraj, Ms Vasundhara Raje and Mr.
Shivraj Chouhan as a pre-condition to start proceedings in the
Parliament. Thus, significant efforts are needed from the
Government to initiate Parliament proceedings and transact
business, especially passing the GST Bill.
The Government, on its part, has made some efforts to meet the
demands on the opposing parties on both, the GST Bill and the
Land Bill. In order to meet the GST implementation deadline of
April, 2016, the government has agreed to provide
compensation to states for any revenue loss for the first five
years, thus giving in to one of the major demands from several
opposing parties.
made future action contingent on the progress of the monsoon,

inflation trajectory, transmission of earlier repo rate cuts and US
interest rate hikes.
This is almost a reiteration of the earlier statements and to that
extent, it is status quo from the RBI. We continue to maintain
that, there will be no rate cuts during September, 29 policy also
while one more rate cut of 25 bps is expected in current fiscal,
possibly in Dec/Feb policy. If monsoons turn out to be better than
expected RBI may undertake unscheduled rate cuts (between
policy meetings).
With regard to supply side bottlenecks, it is critical for the
government to get crucial legislations like land bill, and GST bill
passed in the parliament at the earliest. Given, enhanced focus of
the government on creating long term sustainable growth
environment and reducing spoilage of food products, we expect
inflationary pressures to ease going forward, barring monsoon
risks.
Rupee/US$
On the Land acquisition bill, the Government has reportedly

accepted six major amendments to the Bill. It has agreed on
contentious amendments to the Land Acquisition Act of 2013,
bringing back the crucial clauses related to consent of affected
families and social impact assessment (SIA). Post these
amendments, the Bill will be almost similar to the UPA's version
of the Bill. This may make it easier for the Bill to pass muster in the
Rajya Sabha. However, the revised Bill is not expected to find
favour with Corporate India, which has found it difficult to
acquire land under the provisions of the Bill. It may also be seen
as a regressive step by the foreign investors.
Meanwhile among all this the government plans to introduce
seven new bills and take up 10 pending bills for consideration
and passage during the Monsoon session. Other bills which are
lined up to be taken up during monsoon session include Real
Estate Bill, 2013, the Electricity (Amendment) bill 2014, Whistle
Blowers Protection (Amendment) Bill, 2015, Prevention of
Corruption (Amendment) Bill, 2013, Child Labour (Prohibition
and Regulation) Amendment Bill, 2012 etc
Source: Bloomberg
Inflation (%)
IIP growth (%)

Source: Bloomberg
Rainfall distribution important
Source: Bloomberg; Note: IIP growth since April 2009 has been recompiled using new series of WPI
Monetary policy
RBI has maintained interest rates as well as liquidity ratios in the
August policy review. However, it has reduced the projected
inflation rate in the January March 2016 period marginally by
20bps while maintaining the January 2016 rate at 6%. It has also
Distribution of rainfall in the coming weeks is important to watch

to ensure a healthy crop yield. After a good start in the month of
June, dry spell in the month of July has raised some concerns.
IMD has predicted a deficient monsoon in the remaining
monsoon season owing to strengthening of El-Nino
phenomenon. Although the country has received weak rainfall,
sowing overall has been good. As per weather officials, the
rainfall for the country as a whole during second half of the
season is likely to be 84 per cent of long period average (LPA)
Poor rainfall in the second half of the June-September monsoon
season may stoke food inflation and limit ability of India's central
bank to cut lending rates. Any shortfall in rainfall is also likely to
impact the rural demand which is already depressed due to

unseasonal rains and last year's drought. Two poor monsoons in
a row as well as the recent unseasonal rain will also certainly pose
a challenge to controlling inflation. Along with this, the lack of
rural demand may affect consumption growth, thereby pushing
back the long-awaited economic recovery.
Sectors which are partly dependent on rural demand include
automobiles, FMCG, cement and paints
Global markets
US markets may witness a rate hike in September
Positive US jobs data, declining unemployment, improving labor
market as well as incremental improvement in housing sector
indicate that rate hike can come in the month of September. Fed
would like to see continued strength in labor markets before
deciding on rate hikes. However, the markets are now almost
pricing in a rate hike in September meeting as the next couple of
months' employment data is likely to be good.
from Iran would also start hitting the markets once the
sanctions are removed. For the Iranians to win back market
share from prior customers, they may be forced to offer
discounted pricing, which could further dampen oil prices. Fall
in the Chinese stock markets and slowing Chinese / European
economies may also continue to weigh on the oil prices going
forward.
FII's net buyers for the month of July,15
FII's were net buyers for the month to the tune of Rs 55.89 bn
despite huge volatility owing to Grexit fears. FIIs have remained
net buyers for the calendar year till July,15 to the tune of Rs
436.2 bn led by fall in the crude prices, efforts by the
Government on kick-starting stalled infrastructure projects as
well as incremental liquidity from global markets. Mutual funds
have been net buyers to the tune of Rs 43.39 bn and Rs 352.1
bn for the month and CYTD respectively.
FII & Mutual Fund investment (Rs Cr)
We believe this is probably one of the factors which will engage

RBI's attention as it decides on rate cuts in the future. On fund
flows, we believe that, the event is almost well discounted in the
global markets and it may not lead to significant fund flows from
India. With a strengthened forex reserve, the impact on Rupee is
also expected to be contained.
European markets may continue to witness volatility
During last month, Greece's Parliament had voted in favor of an
austerity bill that paved the way for a third bailout. The finer
details of Greece's third aid package worth 86 billion euro ($94
billion) are currently being discussed by the IMF, European
Commission and European Central Bank, as well as the European
Stability Mechanism (which distributes bailout funds). Greek
authorities expected to conclude talks with lenders by midAugust. Greece needs to make a 3.2 billion euro payment to the
ECB by 20 August. We expect volatility to continue to remain in
European markets on account of this.
Chinese markets to remain under pressure
Chinese markets had remained under pressure during past
month on concerns of faltering growth and weakening property
market. China has seen huge build-up of debt over last few
years. It has used nearly $21 trillion in debt since 2008 to add
nearly $5 trillion to its GDP. This has also resulted in weakening
the property market which can have an adverse impact on
country's banking system. Slowdown in China also resulted in
putting pressure on the commodity prices. We believe that China
is moving away from investment led economy to consumption
led economy and hence going ahead, China can enact sizable
stimulus measures to stimulate consumption and weaken the
Yuan. As of now, India can gain from China's woes if overseas
capital relocates to India but if a domino effect occurs then the
entire global economy could take a hit.
We also note that, a Chinese Yuan devaluation can have an
impact on the export growth from India.
Oil prices may remain soft, going forward
Oil prices are likely to remain under pressure going forward as
global oversupply intensified after the head of oil producers'
cartel OPEC indicated there would be no cuts in production
despite a huge global oversupply. With the historic nuclear deal
signed on July 14th between Western powers and Iran, supply
Source: Bloomberg
Recommendation
Markets sustained at higher levels during July. There was relief
post the US Fed meeting, which did not make any hawkish
statements. There was also optimism on the Government
passing important legislations in the Monsoon Session of
parliament. Corporate results have been mixed with several
companies benefiting from falling raw material prices. On the
economic front, Government spending has risen post the pause
in 4QFY15, which has led to improving order books for some of
the mining, power and related companies.
Going ahead, there is uncertainty on the passage of important
bills in the Parliament. Moreover, the monsoon deficit forecasts
for the season remain at the previous levels of 88% of the LPA.
At 15x FY17 earnings, valuations are at the long term average.
Markets may react negatively in the absence of any positive
developments on the reforms front and improvement at ground
level. Failure of monsoons to revive may act as an additional
headwind. We will watch out for developments on the same.
We prefer domestic infrastructure and interest-rate sensitive
sectors, over the longer term period. Our preference stays for
companies having strong balance sheets and ethical
managements. We are also positive on select large cap exportoriented stocks, wherein the volatility in earnings in limited. Key
risks to our recommendation would come from geo-political
concerns globally, decline in foreign inflows, sharp currency
movements, spike in oil prices and a prolonged delay in fiscal
reforms.

Preferred picks - Domestic Cyclicals / Investment oriented sectors
Sector
Stocks
Automobiles
Maruti Suzuki
Banking, NBFCs
Axis Bank, ICICI Bank, IDFC
Greaves Cotton, Carborundum Universal, L&T, Cummins India, Blue Star
Cement
Grasim Industries, Ultratech Cements
Construction
IRB Infra, NCC, KNR Construction
Logistics, Transportation
Adani Port, Allcargo, Gateway Distriparks
Metals
JSW Steel, Nalco
Midcap
Kajaria Ceramics, Supreme Industries
Oil & Gas
Petronet LNG
Paints
Kansai Nerolac
Real Estate
Phoenix Mills
Source: Kotak Securities - Private Client Research
Preferred picks - Export oriented / Defensive sectors

Sector
Stocks\
IT
Infosys, TCS
Media
Hindustan Media Ventures,Tv18
Pharmaceuticals
DRL
Source: Kotak Securities - Private Client Research
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MONTHLY DERIVATIVE OUTLOOK

Looking Back
Looking Ahead
NIFTY began the July series on a volatile note but soon buying
emerged and it touched the 8550 mark. In the next three weeks,
NIFTY remained volatile and swung 200-250 points to end the
series on a choppy note. The rollover in the August series for the
overall market (84.09%) has been in line with the three month
averages whereas NIFTY rollover stood at 65.9%. Sector-wise
Infra, Automobile and Finance sectors saw high rollovers while
Technology, Banking and Power sectors witnessed lower
rollovers. From the Nifty 50 space, IDFC, RELIANCE and
HDFCBANK witnessed high rollovers. . IndiaVIX remained moved
lower to 14.57% as against 16.93% of previous month.
After a choppy month of July, NIFTY is expected to give a

directional move this month. The 200DMA of 8418 is expected
to provide some support for the market in the near term.
Resistance on the upside is seen at 8640 whereas double bottom
support of 8315 is expected to be the major support level for the
month. Risk-reward is more favorable for shorts in the NIFTY
above 8550. BANKNIFTY is expected to breakout if it sustains
above 19000 mark for a couple of sessions. CNXIT is expected
remain under pressure led by INFY and TCS.
BANKNIFTY and CNX IT also remained volatile for most part of

the July series and ended on a choppy note. FMCG and IT indices
were up 4.7% and 3.3% respectively. Metals index lost the
most, dragging 9%. Both Midcap and Smallcap indices
outperformed benchmark indices gaining 4% and 5.5%
respectively
Profit booking is advised in stocks in the range of 8550-8600.

From the Nifty50 space, ASIANPAINTS, BPCL and GRASIM can
do well in the August series. LUPIN, IDEA and GAIL can see
continuation of downtrend. BOSCHLTD has witnessed increase
in OI activity along with positive price movement indicating
continuation of uptrend for the same.
Nifty Options Concentration

Call option concentration is seen at 8800 call for the August
series. On the Put side, highest open interest is seen at 8200
strike price.
Nifty Options Concentration
Recommendation
Buy Nifty ATM Straddle of 8500 strike price
Source: nseindia.com
CE - Call European
PE - Put European
Strike Price - Strike price for the contract
Stock Specifics
SECTOR
POSITION
STOCK
VIEW
RATIONALE
Telecom
Sell
IDEA
Sell in the range of 165-170 with

stoploss placed at 178 and Target
of 160/150/145
Breach of major support of 166 which is

also the 200 DMA
Auto
Ancillaries
Buy
BOSCHLTD
Buy in the range of 25000 25250 with stoploss placed at

24500 and Target of
26000/26800
Higher tops and higher bottoms along

with addition in OI
For queries and feedback you can e-mail us at ksderivative.desk@kotak.com
MONTHLY TECHNICAL OUTLOOK

The opening of the previous week was negative for the market on
the back of numerous negative news flow. Nifty reacted to the
major level 8315, however due to positive outcome/clarification of
news flow has changed the direction of the bear's tide that has
helped the market to close above the psychological mark of 8500.
Monthly Snapshot
Monthly High
8655
Monthly Low
8315
Monthly Close
8533
Change
1.97%
Technically, we feel that the recent sell off from 8650 to 8320 was
steeper and the recovery is seems to be slower as compared to sell
off that has may have negative impact in the short term. To perform
further market needs to cross 8650 till then the zone of 8550 and
8650 is going to act as a wall of multi resistance. Adding trading
long positions is not advisable close to 8600 as the market may
spend more time between the range of 8570 and 8370 before
entering into any meaningful trending activity on either side.
Trend Watch
Short Term
Up
Medium Term
Up
Long Term
Up
On monthly basis, it's a classic continuation formation, which is

indicating at rally towards 8750, however, to do so it need to sustain
above 8550 for most of the part of the week. In case if nifty breaks
8300 then the market may even fall to 8100 in coming few weeks,
which is unlikely but better if we keep our self mentally prepared for
it.
Levels to Watch
Support
: 8485-8465-8445-8405-8385-8280
Resistance
: 8550-8570-8590-8615-8655-8755
Be a stock specific for the week as we are close to major hurdle of

8600/8650. We like HDFC, HDFC BANK, DR REDDY, CIPLA, JET
AIRWAYS, SIEMENS, BHEL, CEAT, UNION BANK, CENTURY TEXT,
LIC HSG FINANCE INFOSYS AND TCS at major supports.
Monthly Strategy:
Buy out of money call options if it breaks 8650 (spot basis).
Buy out of money put options around 8780/8800 with a stop loss at
8850 (spot basis).
Nifty Monthly Chart

N S E N if t y [ N 5 9 9 0 1 ] 8 4 5 6 . 1 0 , 8 5 4 8 . 9 5 , 8 4 4 8 . 0 0 , 8 5 3 2 . 8 5 ,
P r ic e
1021422400
1. 32%
8 6 5Lo
4 . g7 5
IRIS
8640
8580
7970. 99
09/07/15 Thu
Op
Hi
Lo
Cl
8364.85
8400.30
8323.00
8328.55
Qt
86.22
Rs
Rs
49.67
57.05
8520
8460
8400
8315.40 8340
3
8280
8220
8160
8100
8040
7980
S o u r c e : w w w . Sp id e r S o f t w a r e I n d ia . C o m
Vo l
Cr
150
100
50.00
R SI ( 1 4 , E, 9 )
60.00
54.00
48.00
42.00
36.00
15:J
15
22
29
13
20
27
D ly
Source: Bloomberg
For queries and feedback you can e-mail us at kstechnical.desk@kotak.com
FOREX INSIGHT RESEARCH & ANALYSIS

Indian Rupee - A quiet month.
How various currencies faired against the US Dollar since beginning of the year
In the above graph Indian Rupee can be counted amongst the

outperformers. Rupee has only depreciated by 1% but if it was not
for USD 35 billion of Dollar purchases in the spot markets and some
more through the forward market, Rupee would have appreciated
instead of depreciating. Indian economy is an interesting mix of
many drivers. On one hand, there are people in rural and urban who
derive their livelihood from production and mining of commodities
and processing of same and on the other there are vast populations
whose livelihood is not directly dependent on commodity prices. At
the same time, lower oil prices help the government to lower its
deficit and country to export less of foreign currency. This interesting
mix in the economy has enabled India to stand out in this commodity
carnage. We also need to thank the central bank, who after a decade
or so has refocused on maintaining a healthy spread of interest rates
over retail inflation (a real return on savings for the capital saver).
High real rates and strong control over money supply has made
Rupee an interesting bet. Add to that the singular focus of RBI to
destroy any sign of volatility. Would not the world, awash with
artificial liquidity and running out of sensible risk adjusted investible
assets, gun for such a slum-dunk trade.
since before 2011, when very few imagined the possibility that
Rupee can weaken over the near future. As a result, a lot of out of
money call options were sold with expiries far out in the future,
which were blown to smithereens when the Rupee depreciated.
Corporates, who have foreign currency exposure, be it in the form of
net imports or in the form of foreign currency borrowings, are not
looking to hedge their currency risks. Some are assuming the low
rates on US Dollar or Euro or Yen is some kind of a way-out of the
high rates prevailing within the domestic market. Complacency
sows the seed for the unraveling of the status-quo. However, RBI has
been building its war chest, to act as a buffer is a material unwinding
risk emerges in the future. But 2008 has shown that no amount of
RBI FX buffer or rate barrier can prevent a material slide in the Rupee,
if foreign investors cue up en masse to withdraw funds out of India.
We do not know, when or if at all RBI will be tested like it was during
2008, 2011-12 and 2013. However in order to figure that one out,
one has to keep an eye on the domestic equity and debt markets,
where sizable amount of sticky and hot money, both have entered
since end of 2013.
In economics there are no free lunches and therefore there are no

economic events which are absolutely good or absolutely bad. There
are only winners and losers from such economic inter-plays. RBI, in
keeping the Indian Rupee in such a tight leash, has helped
corporates over the recent past. However, at the same time, it has
breed complacency amongst the same segment. Though one can
argue that the degree of complacency may not have reached levels
Let us turn our attention to some key economic events over the past
week. Growth in the eight core sectors coal, crude oil, natural gas,
refinery products, fertiliser, steel, cement and electricity slowed to
three per cent in June after a six-month high of 4.4 per cent in May,
mainly on account of contraction in crude oil and natural gas
production. One can blame the high base of 2014 but still the overall
data is not so impressive. Industrial economy remains weak, as weak
FOREX INSIGHT RESEARCH & ANALYSIS

consumption environment is taking a toll on corporate investments
plan and industrial consumption as well. However, there are
encouraging signs of recovery in the road sector which is spilling
over into increased demand for transport goods. However, the
recovery is not so broad based that it can negate the weakness in
other sector.
Government agreed to infuse 70,000 crore rupees of capital into
the PSU banks over a period of 4 years. Though stock markets have
cheered the move but we are not so enthused. The total stressed
assets in the banking system are between 11-13% of total
advances. Add to the need for banks to raise funds to meet Basel III
capital requirement, and the 70,000 crore rupees pales in
comparison. Govt may not be having the funds to meet such large
scale capital requirement of the PSU banks, and hence it is time to
make some bold moves. It is not a good practice that tax payer
funds should be used in such massive amounts to inject life into the
PSU banking system. Possibly it is time now to ask the question,
should government be at all in the business of running the banking

business. A mix of privatization of the public banking system and
also designing comprehensive plan for recovery of stressed assets
needs to be done. An effective bankruptcy law needs to be framed.
At the same time, recognition of bad assets and recovery of funds,
through liquidation of collateral and other assets of the borrowers
need to be undertaken. Remember, a financial system is like an
engine of the economy. Unless the engine can be brought back into
strong health, economy may face breakdown from time to time.
Over the month of August, traders do not have any high profile
monetary policy to look forward to. RBI has maintained a status quo
and the next impactful policy from US central bank which is in
September. Indian Rupee would remain a managed float,
meandering between 63.30/50 and 64.30 levels on spot. Indian 10
year government bond yields can remain 7.75% and 7.85% on the
new year.
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ONE MONTH PORTFOLIO - JULY

Nifty : 8369
Stock
Mcap
(Rs mn)
Current
Price (Rs.)
PE (x) / PABV (x)*

FY15
FY16E
Comment
Axis Bank*
1,325,389
559
3.2
2.8
Axis has consistently delivered superior NIM on back

of funding advantages. It also has favorable ALM
profile Its asset quality has been holding well contrary
to street expectations. GNPA & NNPA are at 1.34%
and 0.44% (Q4FY15).
Maruti Suzuki
1,214,946
4,023
32.7
3.4
On the back of expected recovery in the economy, the

domestic passenger car industry is likely to grow on a
strong note MSIL, being the market leader will be the
key beneficiary of this expected revival in car demand.
Larsen & Toubro
1,644,283
1,783
37.1
30.7
Strong order book

Good activity in roads and railways
Infosys
2,253,680
985
18.3
16.8
The guidance for FY16 is slightly better than our

expectations, though optimistic. We believe that, the
new strategy should allow Infosys to improve growth
rates over the long term with sustained margins.
TCS
5,059,595
2,552
25.4
20.3
TCS continues to maintain an optimistic outlook on

longer term demand. We maintain our positive view
on the stock. We believe that, the macro scenario may
not deteriorate significantly from the current levels.
Torrent Pharma
219,819
1299
29.3
22.2
Bajaj Electricals
26,972
273
NA
32.5
Allcargo Logistics Ltd
39,060
310
16.4
12.7
KNR Construction
14,763
525
20.2
20.8
Oil India
268,708
447
9.1
7.7
Tv18 Broadcast
63,332
37
46.3
28.5
The launch in US of gAbilify will lead to significant

revenue/ profit growth over next 1-2 quarters The
recent corection in stock led by Greece issues is
overdone, expect stock to bounce back
Expected revival in E&P business would boost
company's profitabilty in near to medium term.
Recently bagged orders would attract superior
margins than the legacy orders resulting in balance
sheet improvement.
Latest Acquisitions by the company in the MTO
segment would help diversify and grow Immune
nature of the key MTO (LCL) business Strong recovery
in the CFS segment
Strong order inflows of ~Rs 23.5 bn in the first two
months of FY16 resulting in strong order book
growing by 3x to ~ Rs 36.5b Order book to remain
strong considering pick up in road project awarding
by the government on EPC basisExpect Revenue and
PAT to grow at 29% and 23% CAGR in FY15-17E
For FY16E, the government has given clarity regarding
subsidy burden on upstream sector, we believe this is
positive for OINL.
Strong showing in 2HFY15 displays traction in
business new BARC ratings indicate strong viewership
trends in entertainment channels of the copmany
Source : Kotak Securities - Private Client research; * P/ABV ratio for Axis Bank
ONE MONTH PORTFOLIO - JULY

Performance of 1 month Portfolio July
Recommended Levels
Current levels
Returns%
8433
8,336
-1.15
559
574
2.68
Maruti Suzuki
4023
4336
7.78
Larsen & Toubro
1783
1785
0.11
985
1105
12.18
TCS
2552
2497
-2.16
Torrent Pharma
1299
1485
14.32
Bajaj Electricals
273
262
-4.03
Allcargo Logistics Limited
310
300
-3.23
KNR Constructions
525
619
17.90
OIL INDIA
447
425
-4.92
37
37
-0.95
NIFTY
PF
Axis Bank
Infosys
TV18 Broadcast
Cash - KNR
Cash - Infosys
Cash - Torrent
RETURNS
Nifty
Portfolio
%
1.73
3.87
10
ONE MONTH PORTFOLIO - AUGUST

Nifty : 8533
Stock
Mcap
(Rs mn)
Current
Price (Rs.)
PE (x) / PABV (x)*

FY15
FY16E
Comment
Axis Bank*
1,360,954
574
3.1
2.9
Axis has consistently delivered superior NIM on back

of funding advantages. It also has favorable ALM
profile. Its asset quality has been holding well contrary
to street expectations. GNPA & NNPA are at 1.38%
and 0.48%. (Q1FY16).
Maruti Suzuki
1,307,056
4,328
35.2
24.4
On the back of expected recovery in the economy, the

domestic passenger car industry is likely to grow on a
strong note. MSIL, being the market leader will be the
key beneficiary of this expected revival in car demand.
Dabur India
507,384
292
47.9
38.4
Infosys
2,466,464
1,078
20.1
18.9
1QFY16 results were encouraging. The 5.4% volume

growth was the highest in past 19 quarters. We
believe that, the new strategy should allow Infosys to
improve growth rates over the long term with
sustained margins.
TCS
4,976,326
2,510
25.0
20.3
TCS continues to maintain an optimistic outlook on

longer term demand. We maintain our positive view
on the stock. The significant size of revenues from
Digital initiatives boosts our optimism on the longer
term prospects of TCS.
Sun Pharma
1,981,397
823
43.6
46.2
Sun has started gaining market share in few injectable

products, pointing towards re-scaling of injectable
lines at Halol plant. Sun has corrected sinificantly in
the last one months, the stock looks attractive at
current valuations
NCC
46,140
83
41.3
28.6
Order inflow is likely to ramp up sharply going forward

for the company. Company also likely to benefit from
large EPC projects from NHAI. Stock is available at
attractive valuations.
Container Corporation
320,385
1,643
30.6
26.1
We estimate the company to report 10% volume

CAGR over FY15 to FY18E in Exim and CAGR of 5% in
the domestic segment. Company has robust
infrastructure in the container rail segment.
GSPL
72,070.43
128
14.8
15.4
We believe the Company will benefit on account of

both
1). Higher gas transmission volumes and
2). Expected upward revision in tariffs.
Time Technoplast
13,826
66
12.0
10.0
Improving cash flow. Weak material costs to aid

margin gains.
Gateway Distriparks
40,068
371
19.6
17.8
We estimate the company to report 16% volume

CAGR over FY15 to FY17E in Exim. We also expect the
CFS segment to perform strongly over FY15 to FY17E.
IPO of the rail subsidiary (GRFL) to unlock value
Consistency in revenue growth, declining raw

material prices to lead 19% CAGR in EBITDA FY15FY17E. Strong innovation pipeline to keep sentiment
positive.
Source : Kotak Securities - Private Client research; * P/ABV ratio for Axis Bank
11
LATEST FUNDAMENTAL STOCK RECOMMENDATION

EV/EBIDTA(x)
Name of the Company
Latest
Reco ^
Price Price as Latest Upside

as on On latest
price (Down
31-July Report target* side)
(Rs)
(Rs)
(Rs) (%)
Latest
Report
Date
(Rs)
Mkt
Cap
(Rs
mn)
EPS (Rs)
FY115
PE (x)
RoE (%)
FY16E FY15 FY16E
FY15
P/ABV(x)*
FY16E FY15 FY16E
Banking
Allahabad Bank
Andhra Bank
Axis Bank
Bank of Baroda
DCB Bank
HDFC Bank
ICICI Bank
Indian Bank
Indian Overseas Bank
Jammu & Kashmir Bank
Punjab National Bank
State Bank of India
Union Bank of India
ACCUM
ACCUM
BUY
BUY
BUY
ACCUM
BUY
BUY
REDUCE
REDUCE
ACCUM
BUY
ACCUM
92
74
574
178
132
1,112
302
132
38
104
151
270
177
87
71
581
168
133
1,098
315
139
42
103
142
283
157
97
79
685
210
150
1,165
400
180
44
108
160
355
172
5.5
30-Jul-15
6.6
28-Jul-15
19.4
27-Jul-15
18.3
31-Jul-15
13.3
16-Jul-15
4.8
22-Jul-15
32.3 23-Jun-15
36.0
27-Jul-15
15.8 19-May-15
3.6
20-May-15
6.0
29-Jul-15
31.5 25-May-15
(2.5)
29-Jul-15
45,975
41,465
1,359,482
366,005
33,127
2,645,060
1,743,230
56,902
30,286
50,537
256,096
1,812,144
97,163
10.9
10.6
31.0
16.1
6.8
40.8
19.3
20.9
NM
10.4
16.5
17.5
28.0
15.4
15.5
35.9
22.0
7.5
49.4
21.5
21.7
1.0
15.1
18.8
19.5
33.3
8.4
7.0
18.5
11.0
19.5
27.2
15.7
6.3
NM
10.0
9.2
15.4
6.3
6.0
4.8
16.0
8.1
17.6
22.5
14.1
6.1
38.0
6.9
8.0
13.8
5.3
5.5
7.1
18.0
9.5
14.0
19.4
14.5
8.3
NM
8.5
8.2
10.6
10.1
7.4
9.7
18.2
11.9
12.5
18.5
14.7
8.0
0.9
11.4
8.7
10.8
11.0
0.9
0.8
3.1
1.3
2.5
4.6
2.2
0.7
1.2
1.0
1.3
2.0
1.1
0.9
0.7
2.8
1.2
2.2
4.0
2.0
0.7
1.2
0.9
1.2
1.8
1.0
NBFCs
HDFC Ltd
IDFC
LIC Housing Finance
M&M Financial Services
Shriram Transport Finance Co
ACCUM
BUY
BUY
SELL
BUY
1,340
150
499
258
891
1,304
168
465
265
974
1,376
216
560
254
1,240
2.7
29-Jul-15
44.1 05-May-15
12.2
22-Jul-15
(1.5)
28-Jul-15
39.1 04-May-15
1,970,254
226,703
237,120
123,405
199,674
38.4
10.7
29.5
14.6
54.6
42.2
10.2
33.9
14.8
62.3
34.9
14.0
16.9
17.7
16.3
31.8
14.7
14.7
17.4
14.3
20.3
10.8
18.2
15.3
15.1
20.1
11.7
18.0
13.9
15.2
7.1
1.4
2.9
3.0
2.2
6.4
1.3
2.6
2.8
2.0
Auto & Auto Ancillary

Apollo Tyres
Ashok Leyland
Bajaj Auto Ltd
Eicher Motors Ltd #
Escorts Ltd
Hero MotoCorp Ltd
Mahindra & Mahindra
Maruti Suzuki India Ltd
Motherson Sumi Systems Ltd
Tata Motors
TVS Motors
BUY
203
BUY
84
ACCUM 2,525
ACCUM 19,071
ACCUM
141
BUY 2,683
BUY 1,364
BUY 4,331
BUY
347
BUY
384
SELL
238
14.5
(6.5)
9.1
17.5
1.8
5.6
3.5
13.4
5.0
62.6
5.0
102,085
224,721
730,822
514,922
17,299
536,540
839,978
1,308,098
459,676
1,218,340
113,074
19.2
1.2
105.3
227.0
6.4
119.5
54.1
122.9
6.5
44.0
7.3
21.1
2.5
129.7
534.0
9.5
140.8
52.0
177.3
10.1
51.0
9.7
10.5
70.4
24.0
84.0
22.1
22.4
25.2
35.2
53.2
8.7
32.6
9.6
33.8
19.5
35.7
14.9
19.1
26.2
24.4
34.3
7.5
24.5
21.5
5.6
30.0
26.9
5.2
39.3
17.2
16.6
30.9
23.0
22.7
18.8
12.7
32.1
45.8
6.0
38.9
15.6
20.7
34.2
21.7
25.3
5.9
26.4
15.6
44.7
13.1
14.3
20.1
18.4
15.6
3.8
19.4
6.3
18.2
12.6
19.8
10.9
13.1
18.8
12.6
11.6
3.4
14.6
Capital Goods
ABB Ltd *
AIA Engineering
Bajaj Electricals Ltd
Bharat Electronics
BHEL
Blue Star Ltd
Carborundum Universal Ltd
Crompton Greaves
Cummins India
Elgi Equipment Ltd
Engineers India Ltd
Greaves Cotton
Havells India Ltd
Kalpataru Power Transmission
Larsen & Toubro
Praj Industries Ltd
Siemens India * *
Suzlon Energy
Thermax
Time Technoplast Ltd
Va Tech Wabag Ltd
Voltamp Ltd
Voltas Ltd
SELL
ACCUM
ACCUM
REDUCE
ACCUM
BUY
BUY
SELL
BUY
SELL
BUY
BUY
SELL
SELL
ACCUM
ACCUM
SELL
RS
ACCUM
BUY
REDUCE
ACCUM
ACCUM
293,612 10.8
11.8 128.3 117.4
93,488 45.6
50.2 21.8
19.8
25,535
NM
8.9 NM
29.0
318,812 145.9 176.1 27.3
22.6
681,122
5.8
6.0 48.0
46.4
33,753 12.3
9.2 30.5
40.8
34,380
7.4
10.5 24.8
17.5
117,862
3.2
2.7 57.4
68.0
276,687 25.1
27.3 39.8
36.6
22,752
1.6
4.2 90.0
34.3
81,453
9.3
13.0 26.0
18.6
36,268
6.1
7.9 24.4
18.8
174,187
6.2
8.6 45.0
32.5
41,645 10.8
11.4 25.1
23.8
1,652,428 48.0
57.6 37.3
31.1
19,417
3.2
4.6 34.3
23.8
481,688 17.4
29.2 83.6
49.8
32,782
NM
NM NM
NM
124,420 17.6
25.6 59.4
40.8
13,815
5.3
6.6 12.5
10.0
40,251 27.8
34.9 27.3
21.8
7,280 46.0
72.0 15.7
10.0
104,967 10.2
12.7 31.1
25.0
8.3
22.5
NM
15.7
4.2
18.9
12.6
5.5
25.5
5.5
12.1
17.9
22.1
8.2
11.3
10.4
13.4
NM
4.3
11.2
16.0
10.0
17.1
8.7
20.8
12.2
16.7
4.3
12.6
17.0
4.5
24.9
13.5
16.0
21.2
26.3
8.2
12.5
12.2
19.9
NM
6.1
12.6
18.0
14.0
18.2
53.1
14.7
27.7
23.7
21.1
21.0
14.0
19.7
36.8
28.0
22.8
17.5
23.8
10.4
20.8
20.9
41.4
NM
30.5
6.2
13.0
12.2
21.9
44.5
12.7
9.9
18.5
22.2
21.8
9.5
25.3
32.7
16.4
12.0
12.0
18.1
10.3
17.7
15.4
25.8
NM
25.4
5.4
10.4
6.5
17.3
Cement
ACC ##
Grasim Industries
India Cements
Shree Cement
UltraTech Cement
1,386
995
258
3,985
278
375
184
184
998
144
242
149
279
271
1,791
110
1,455
22
1,046
66
759
721
318
REDUCE 1,387
ACCCUM 3,716
ACCCUM
93
ACCCUM 11,500
ACCCUM 3,149
170
232
70
79
2,500 2,756
21,110 22,415
130
144
2,355 2,832
1,258 1,412
4,274 4,913
325
365
498
624
252
250
1,386
1,140
270
3,738
235
336
180
182
918
130
200
131
282
224
1,655
100
1,359
23
1,048
65
735
710
333
13-May-15
14-May-15
27-Jul-15
23-Jul-15
13-Jul-15
08-May-15
01-Jun-15
30-Jul-15
13-May-15
27-May-15
27-Jul-15
963
1,210
295
3,900
260
404
245
155
1,050
102
250
165
270
200
1,802
111
1,150
NA
1,109
84
765
754
354
(30.5) 27-Jul-15
21.7 21-May-15
14.1 29-May-15
(2.1)
28-Jul-15
(6.6) 27-May-15
7.6
29-Jul-15
33.3 05-May-15
(15.6) 27-Jul-15
5.2
01-Jun-15
(29.2) 02-Jun-15
3.4
29-May-15
11.1 22-Jun-15
(3.3)
28-Jul-15
(26.3) 03-Jun-15
0.6
01-Jun-15
1.2
14-Jul-15
(21.0) 04-May-15
NM
03-Jun-15
6.1
30-Jul-15
27.1
31-Jul-15
0.7
27-May-15
4.6
22-May-15
11.5 12-Jun-15
1,484 1,487
3,625 4,016
91
100
10,332 11,364
3,353 3,528
7.2
20-Jul-15
8.1
05-May-15
8.0
01-Jun-15
(1.2) 30-Apr-15
12.0
21-Jul-15
260,595 62.2
56.5
340,780 189.9 275.6
28,428
1.0
2.5
400,660 160.4 298.6
862,867 76.7
95.4
22.3
19.6
92.6
71.7
41.1
24.6
13.5
37.0
38.5
33.0
14.4
7.8
0.8
11.2
11.7
12.4 18.4 15.8

10.4 7.8 5.2
2.0 6.9 5.9
18.2 27.0 16.4
13.0 20.6 15.5
8.2
13.4
NM
13.5
3.9
22.6
4.3
6.8
12.8
NM
11.9
4.9
24.4
6.4
Construction
IL&FS Transportation Network
IRB Infrastructure Developers
Jaiprakash Associates
KNR Construction
Nagarjuna Construction
NBCC
Simplex Infrastructures
ACCUM
BUY
REDUCE
BUY
BUY
BUY
BUY
148
246
10
576
83
1,028
373
162
231
18
507
83
717
407
174
296
19
641
101
992
470
17.4 18-May-15
20.4 11-Jun-15
97.9 02-Jun-15
11.3 18-Jun-15
22.4
31-Jul-15
(3.5) 04-Jun-15
26.2 28-May-15
28,801
81,677
21,077
16,186
45,865
130,581
18,505
18.0
15.4
NM
26.0
2.0
23.0
12.6
16.5
17.6
NM
25.3
2.9
29.0
19.6
8.2
16.0
NM
22.2
41.3
44.7
29.6
9.0
14.0
NM
22.8
28.4
35.5
19.0
FMCG
Colgate Palmolive (India) Ltd
Dabur India Ltd
Godrej Consumer Products Ltd
Hindustan Unilever
ITC Ltd
Marico Ltd
SELL
ACCUM
ACCUM
REDUCE
ACCUM
ACCUM
1,990
293
1,376
922
326
440
2,074
291
1,320
891
316
401
1,910
315
1,401
895
343
436
(4.0) 20-May-15
7.4
30-Jul-15
1.8
31-Jul-15
(2.9)
22-Jul-15
5.2
31-Jul-15
(0.9) 04-May-15
270,620
509,755
445,292
1,990,764
2,522,588
283,392
41.1
6.1
27.1
17.8
12.0
8.9
47.6
7.6
34.3
22.0
13.0
11.5
48.4
48.1
50.8
51.8
27.2
49.4
41.8 72.6 76.2 32.3 26.8

38.6 31.8 31.6 38.3 30.4
40.1 21.7 22.9 32.7 26.0
41.9 104.3 118.0 36.6 32.4
25.1 33.7 33.9 18.5 17.4
38.3 34.7 34.7 32.5 26.1
10.9 10.2
7.9 7.4
10.5 9.1
12.4 9.8
10.4 9.5
41.1 30.1
7.9 7.0
*P/BV for Banking & NBFCs
12
LATEST FUNDAMENTAL STOCK RECOMMENDATION

Name of the Company
Latest
Reco ^
Price Price as Latest Upside

as on On latest
price (Down
31-July Report target* side)
(Rs)
(Rs)
(Rs) (%)
Latest
Report
Date
(Rs)
Mkt
Cap
(Rs
mn)
Information Technology
Cyient Ltd (Infotech)
Geometric Ltd
HCL Technologies
Infosys Technologies
KPIT Technologies
Mphasis Ltd
NIIT LTD
NIIT Technologies
Oracle Financial Services Soft
Tata Consultancy Services (TCS)
Wipro Technologies
Zensar Technologies
SELL
BUY
REDUCE
ACCUM
ACCUM
REDUCE
ACCUM
ACCUM
REDUCE
ACCUM
ACCUM
REDUCE
545
129
998
1,077
110
420
82
482
4,038
2,511
570
955
533
129
891
1,113
112
413
58
463
3,486
2,523
588
745
511
147
914
1,178
124
421
62
488
3,387
2,718
644
753
(6.3)
17-Jul-15
14.2
29-Jul-15
(8.4) 22-Apr-15
9.4
22-Jul-15
12.3
24-Jul-15
0.2
31-Jul-15
(23.9) 20-Jul-15
1.2
15-Jul-15
(16.1) 10-Jun-15
8.3
10-Jul-15
13.0
24-Jul-15
(21.2) 16-Jul-15
Logistics
Adani Port & Special Eco Zone
Allcargo Global Logistics
Blue Dart Express
Container Corporation of India
Gateway Distriparks Ltd
Gujarat Pipavav Port Ltd (GPPL)
BUY
BUY
SELL
BUY
BUY
BUY
325
300
6,942
1,642
370
236
297
311
6,800
1,640
360
212
390
395
5,000
1,860
440
260
20.0
04-Jun-15
31.8
07-Jul-15
(28.0) 31-Jul-15
13.3
24-Jul-15
18.8
30-Apr-15
10.3
30-Jun-15
651,138
41,066
164,528
320,151
39,987
99,937
SELL
REDUCE
REDUCE
NR
BUY
ACCUM
SELL
BUY
ACCUM
328
116
713
88
241
133
337
37
399
315
113
684
252
134
356
34
317
290
118
693
358
146
321
43
355
(11.6) 20-Jul-15
1.7
29-Jul-15
(2.8) 21-May-15
48.6
15-Jul-15
9.7
29-Jul-15
(4.7)
08-Jun-15
16.1
27-Jul-15
(11.0) 16-Jul-15
Metals & Mining

Hindustan Zinc
JSW Steel
National Aluminium Co
BUY
BUY
BUY
157
831
35
164
876
48
195
1,200
61
24.2
44.3
72.1
Mid Cap
Kajaria Ceramics Ltd
Supreme Industries Ltd
BUY
BUY
744
627
775
626
875
775
17.6
23.6
ACCUM
ACCUM
SELL
SELL
BUY
ACCUM
ACCUM
BUY
ACCUM
300
173
491
192
130
484
73
432
193
393
163
506
109
120
401
68
467
194
413
181
480
110
136
436
76
558
213
BUY
BUY
883
256
816
204
950
250
BUY
BUY
SELL
BUY
REDUCE
REDUCE
ACCUM
710
1,887
709
4,076
1,697
822
1,442
565
1,682
650
3,892
1,672
948
1,400
650
1,964
596
4,382
1,735
977
1,469
Power
NTPC
Tata Power Company Ltd
BUY
BUY
135
68
136
77
Real Estate
Phoenix Mills Ltd
BUY
359
SELL
SELL
ACCUM
347
60
65
Media
DB Corp
Dish TV India Ltd
Entertainment Network (ENIL)
HT Media
Hindustan Media Ventures Ltd
Jagran Prakashan
Sun TV Network
TV18 Broadcast
Zee Entertainment Ent
Oil & Gas

Aban Offshore Ltd
Cairn India Ltd
Castrol India Ltd* *
Chennai Petroleum Corporation
Gujarat State Petronet Ltd (GSPL)
Indraprastha Gas (IGL)
MRPL
Oil India Ltd
Petronet LNG
Paints
Asian Paints Ltd
Kansai Nerolac Paints Ltd
Pharmaceuticals
Alembic Pharma
Cadila Healthcare Ltd
Cipla
Dr Reddy's Laboratories Ltd
Lupin
Sun Pharmaceuticals
Torrent Pharmaceuticals
Shipping
GE Shipping Company
Pipavav Def & Offshore Engg
Shipping Corporation of India
EPS (Rs)
FY115
60,561 31.1
8,066
8.6
1,409,529 51.4
2,464,272 53.7
21,108 13.8
87,709 32.1
13,423
NM
28,284 31.8
338,172 140.9
4,914,542 100.3
1,394,252 35.0
41,185 58.5
PE (x)
RoE (%)
FY16E FY15 FY16E
31.5
10.2
55.4
57.0
9.7
32.4
4.8
40.4
152.3
123.4
37.7
69.1
FY15
P/ABV(x)*
FY16E FY15 FY16E
17.5
15.0
19.4
20.1
8.0
13.1
NM
15.2
28.7
25.0
16.3
16.3
17.3
12.6
18.0
18.9
11.4
13.0
17.0
11.9
26.5
20.3
15.1
13.8
20.3
14.8
20.5
24.1
20.2
12.8
NM
14.5
19.5
40.8
23.9
24.7
17.2
15.1
18.0
23.3
13.2
12.2
15.0
17.0
31.8
43.4
21.9
23.9
12.9
4.2
14.6
15.4
5.5
7.3
31.6
6.8
16.5
19.5
11.0
10.7
10.8
3.4
12.8
14.2
5.6
6.9
16.7
5.2
14.1
15.2
9.6
8.4
11.5
19.1
53.4
53.7
18.2
8.0
15.3 28.3
21.0 15.7
71.6 130.0
62.9 30.6
20.8 20.3
9.7 29.5
21.2
14.3
97.0
26.1
17.8
24.3
22.6
12.6
41.3
13.4
19.2
21.8
23.7
12.3
52.3
14.1
18.9
20.9
18.6
9.9
72.3
22.5
12.8
20.0
15.1
8.8
53.4
20.4
11.1
19.1
59,544
123,477
33,993
20,577
17,676
40,048
132,699
63,356
390,026
17.2
NM
22.2
NM
19.2
7.2
19.8
0.9
10.0
18.0
1.0
19.8
NM
23.8
9.2
21.4
1.1
11.3
19.1
18.2
NM 116.1
32.1
36.0
NM
NM
12.5
10.1
18.5
14.5
17.0
15.7
41.2
33.7
39.9
35.3
26.0
NM
16.9
NM
20.9
21.7
23.5
4.6
19.3
24.2
NM
13.1
NM
21.7
24.1
22.7
5.4
18.7
10.2
17.4
20.4
NM
8.5
8.4
NM
25.4
30.2
10.3
13.3
21.9
NM
5.8
6.8
7.3
20.4
25.8
23-Jul-15
18-May-15
02-Jun-15
663,587
200,961
91,355
19.4
74.3
4.8
17.7
70.6
5.2
8.1
11.2
7.4
8.9
11.8
6.8
18.9
7.8
9.6
16.4
6.9
9.6
4.8
6.1
1.6
4.8
5.9
1.4
21-Jul-15
27-Jul-15
56,232
79,610
22.1
24.9
30.8
28.6
33.7
25.2
24.2
21.9
27.5
29.9
28.7 16.3 9.4

28.6 12.7 11.5
37.5
4.7
(2.3)
(42.7)
4.9
(9.9)
4.5
29.1
10.2
28-May-15
22-Jul-15
30-Jul-15
26-May-15
09-Jul-15
29-May-15
25-May-15
01-Jun-15
31-Jul-15
17,423
329,885
242,904
28,593
72,762
67,781
127,370
259,886
144,975
89.8
23.9
9.6
NM
8.6
31.3
NM
43.4
11.8
98.6
21.5
12.5
5.9
8.3
33.4
4.2
56.1
13.1
3.3
7.2
51.2
NM
15.0
15.5
NM
10.0
16.4
3.0
8.0
39.3
32.5
15.6
14.5
17.4
7.7
14.8
11.1
11.8
56.3
NM
13.4
22.1
NM
11.1
16.3
10.3 6.5 6.3

6.5 2.6 3.4
73.6 32.5 24.7
5.2 NM 11.4
12.0 8.0 7.5
20.1 8.5 8.1
13.1 NM 10.8
14.1 4.8 2.8
15.9 11.6 9.9
7.6
(2.2)
22-Jul-15
17-Jun-15
846,605
137,715
15.2
5.0
20.0
5.9
58.1
51.1
44.1
43.3
29.6
17.0
30.7 36.8 28.2

18.2 29.4 24.3
(8.5)
16-Jun-15
4.1
18-May-15
(15.9) 01-Jun-15
7.5
31-Jul-15
2.3
27-Jul-15
18.8
21-Jul-15
1.9
29-Jul-15
134,209 15.0
386,314 55.0
570,076 14.7
693,752 130.3
760,800 53.5
1,703,190 18.9
243,639 59.3
19.9
68.1
18.7
161.2
51.8
17.8
82.4
47.3
34.3
48.2
31.3
31.7
43.5
24.3
35.7
27.7
37.9
25.3
32.8
46.2
17.5
36.3
26.3
11.1
25.0
30.4
20.2
30.4
50.0
25.4
13.2
25.3
23.6
14.9
23.6
35.2
23.0
26.3
20.0
20.5
19.7
26.0
17.7
18.6
21.1
15.8
17.9
22.5
12.8
155
97
14.8
41.7
31-Jul-15
21-May-15
1,113,622
162,432
12.3
0.8
10.5
2.7
11.0
85.6
12.9
25.4
11.6
1.7
10.3
5.3
9.6
7.3
9.6
6.8
375
424
18.0
01-Jun-15
52,030
4.3
11.6
83.5
31.0
3.3
8.5 27.8 22.8
355
61
56
330
45
61
(5.0) 11-May-15
(25.3) 02-Jun-15
(5.6) 22-May-15
52,797
41,645
27,379
50.2
NM
4.8
48.3
NM
4.2
6.9
NM
13.5
7.2
NM
15.4
9.9
NM
3.6
8.8 4.8 4.7

NM 99.0 NM
3.1 13.8 14.8
Source: Kotak Securities - Private Client Research ^ All recommendations are with a 9-12 month perspective from the date of the report/update. Investors are requested to use their discretion while deciding the timing, quantity of
investment as well as the exit. * Figures for CY14 & CY15 **Figures for CY15 & CY16 # Figures for CY14 & FY16 (15 month period) ## Figures for CY15 & CY16 - September year endin NR = Not Rated. The investment rating and target price, if
any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or
strategic transaction involving this company and in certain other circumstances. NM= Not Meaningful
13
PREFERRED PICKS - FUNDAMENTAL

GREAVES COTTON LTD
BUY
Last report on 3 August 2015 (Price:Rs.148)
CMP
Target Price (Rs)
Potential Upside (%)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
149
170
14.0%
159/103
36423
INVESTMENT ARGUMENT
1 Year Performance
The company is the sole supplier of light diesel engines to OEMs like
Piaggio, M&M and Atul Auto. Piaggio is the prime client accounting for
the bulk of automotive engines revenue.
We estimate 3W's to account for roughly 70-80% of auto revenues
and around 50% of total revenue for the company and hence is an
important variable to monitor. The company is thus a play on the 3W
segment (passenger and cargo) which in turn is driven by rising
urbanization and usage of light cargo vehicles for intra-city
transportation.
RISKS & CONCERNS
Source: Bloomberg
High dependence on single client

COMPANY BACKGROUND
Greaves Cotton Limited was established in 1859 and is one of India's
reputed engineering companies.
Share Holding Pattern (%)
The company is part of the B M Thapar group with Mr Karan Thapar as

the Non-Executive Chairman of the company
SECTOR BACKGROUND
The sector is a play on the growth of 3W demand which in turn is a play
on the economic activity in the country.
FINANCIALS (RS MN)

Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
Book value (Rs/share)
Dividend per share (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
Net Working Capital (Days)
VALUATION PARAMETERS
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
PRICE PERFORMANCE (%)
FY15
16,925
(1.5)
1,996
11.8
1,098
1,485
6.1
22.7
8.0
32.5
2.0
17.9
13.5
344
54.0
FY15
24.5
4.6
2.1
18.1
1M
18.2
FY16E
18,602
9.9
2,773
14.9
2,596
1,921
7.9
29.4
9.9
37.6
2.4
21.2
18.4
3,533
42.0
FY16E
18.9
4.0
1.8
12.0
3M
8.8
Source: Bloomberg, Company, Kotak Securities - Private Client Research
FY17E
21,501
15.6
3,191
14.8
3,125
2,281
9.3
18.7
11.5
44.1
2.4
21.8
19.0
4,682
41.0
FY17E
16.0
3.4
1.5
10.0
6M
2.4
Source: Bloomberg
Growth rate in 3W industry
Source: Company, Kotak Securities - Private Client Research
Revenue mix (%)
Source: Company
14

HINDUSTAN MEDIA VENTURES LTD
BUY
Last report on 15 July 2015 (Price:Rs.252)
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
241
358
48.5%
261 / 152
17688
INVESTMENT ARGUMENT
1 Year Performance
Fastest growing, in readership and profitability: Hindustan, the Hindi

daily HMVL, is the second-largest daily in India (IRS-2013), growing by
25% through 2010-2013. HMVLs EBITDA has grown 20% CAGR
through FY11-FY14, significantly outperforming peers.
Attractively valued, at 9X PER FY16E: At 9X PER FY16E, HMVL is the
most attractively valued stock in our coverage universe, and trades at a
discount of 50% to DB Corp. Our DCF valuation indicates a fair value of
Rs 358/ share.
RISKS & CONCERNS
Strength in competitive position, as measured by readership surveys, is
a significant factor for our thesis to play out
Source: Bloomberg
COMPANY BACKGROUND
HMVL owns Hindustan, the #2 most widely read daily newspaper in
India. The company is held 75% by HT Media (which in turn is
promoted by the Bhartias). The companys readership is largely
concentrated in four states : Bihar, Delhi, Jharkhand, and Uttar
Pradesh. Hindustan is the #1 newspaper in Bihar and Jharkhand
geographies, and is a strong #2 in Uttar Pradesh.
SECTOR BACKGROUND
Newspaper publishers are a 250Bn industry, which generates its
revenues from sales to advertisers (70% of total) and circulation (30%)
Newsprint is the primary raw material for newspaper publishers.
FINANCIALS (RS MN)
Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
PAT
EPS
Growth (%)
CEPS (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
8,186
12.2
1,665
20.3
1,881
1,409
19.2
26.7
22.5
100.6
1.2
20.9
21.7
293
8
FY15
12.6
2.4
2.1
10.4
1M
15.7
FY16E
9,316
13.8
2,262
24.3
2,493
1,745
23.8
23.9
27.6
118.6
3.0
21.7
22.5
1,440
13
FY16E
10.1
2.0
1.7
7.2
3M
9.0
FY17E
10,203
9.5
2,555
25.0
2,981
2,087
28.4
19.6
32.6
141.1
4.0
21.9
22.6
3,073
13
FY17E
8.5
1.7
1.4
5.7
6M
4.8
Source: Bloomberg
EBITDA Growth, Regional Newpapers (%) FY11-14 CAGR
EV/ Reader (Rs/Reader)
Source: Company
15

ICICI BANK LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
302
400
32.5%
393 / 280
1752812
INVESTMENT ARGUMENT
1 Year Performance
We like the quality of liability franchise - CASA mix at 44.1% (Q1FY16),

one of the best in the industry.
NIM has been on the improvement trajectory on back of strong
accretion to low cost deposits as well as better ALM.
Lower risk on SME portfolio (~5% of total portfolio). While retail piece
has witnessed insignificant net slippage, corporate segment continues
to perform well.
RISKS & CONCERNS
Retail book stands at ~43% of total book, highly vulnerable to
systemwide deterioration in retail asset quality.
Deregulation of interest rates on saving deposits (~32% of deposits)
might increase the funding costs and in turn impacting its NIM.
COMPANY BACKGROUND
Source: Bloomberg
Largest private sector banks (4052 branches in Q1FY16) with 4.2%

market share in domestic loans.
After conscious strategy of de-growing their B/S post Lehman collapse,
bank has started focusing on profitable growth
SECTOR BACKGROUND
Easing bond yield is positive for wholesale funded entities and is likely
to result into higher trading gains for banks.
FINANCIALS (RS MN)

Interest income
Interest expense
Net interest income
Growth (%)
Other income
Gross profit
Net profit
Growth (%)
Gross NPA (%)
Net NPA (%)
Net interest margin (%)
CAR (%)
RoE (%)
RoAA (%)
EPS (Rs)
Adjusted BVPS (Rs)
P/E (x)
P/BV (x)
FY15
491
300.5
190
15.6%
122
197
111.8
13.9%
3.9
1.6
3.4
17.0
14.5
1.8
5.0
19.3
136.5
FY15
15.6
2.2
1M
(0.9)
FY16E
549
328.3
221
16.0%
128
220
124.4
11.3%
3.7
1.5
3.5
17.1
14.7
1.8
5.5
21.5
151.5
FY16E
14.1
2.0
3M
(5.9)
FY17E
632
379.2
253
14.6%
148
257
148.0
19.0%
3.2
1.1
3.4
16.6
15.6
1.9
6.0
25.5
170.6
FY17E
11.8
1.8
6M
(10.1)
Source: Bloomberg
Trend in earnings (Rs bn)
Trend in Asset Quality
Source: Company
16

IDFC LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
150
215
43.3%
188 / 134
239070
INVESTMENT ARGUMENT
1 Year Performance
It is present in the niche infrastructure financing space and is well

positioned to benefit from India's large infrastructure opportunity.
IDFC is on track in setting up its banking franchise and management
has also indicated its future course of actions during next 3 months.
Although GNPA rose from 65bps in Q4FY15 to 1.5% in Q1FY16,
restructured portfolio declined by the same amount. Consequently,
stressed portfolio remained stable (~8.5% of advances).
RISKS & CONCERNS
Has a large stressed portfolio (13-14%) which included GNPA,
restructured assets, SRs and exposure to gas based projects. Of
Source: Bloomberg
Continued moderation in infrastructure capex cycle.
COMPANY BACKGROUND
Established in 1997 as a specialized Infrastructure financier to
encourage private sector investments in the infrastructure space.
Apart from lending business, it has diversified into non-fund based
product offerings like asset management, private equity and debt
finance/syndication.
SECTOR BACKGROUND
Falling bond yield is positive for NBFCs which are wholesale funded.
Source: Bloomberg
Entities having strong relationship with the bond investors are likely to
benefit more.
FINANCIALS (RS MN)
Net Interest Income
Growth (%)
Non-Int Income
Total Income
Operating Profit
Net Profit
Growth (%)
Gross NPA (%)
Net NPA (%)
NIMs (%)
RoA (%)
RoE (%)
DPS (Rs)
EPS (Rs)
BV (Rs)
Adj. BV (Rs)
P/E (x)
P/BV (x)
FY15
26,340
-2.6%
13,220
39560
33,610
17,090
-5.2%
0.70
0.20
3.6
2.0
10.5
2.6
10.7
109.2
108.4
FY15
14.0
1.4
1M
0.0
FY16E
27,564
4.6%
14,542
42106
29,646
12,922
-24.4%
1.80
1.07
3.7
1.3
7.4
2.8
8.0
106.2
101.7
FY16E
18.8
1.5
3M
(10.4)
FY17E
32,836
19.1%
15,996
48832
32,576
16,723
29.4%
2.41
1.31
3.8
1.5
9.4
2.8
10.4
113.8
107.5
FY17E
14.5
1.4
6M
(13.1)
Trend in earnings (Rs bn)
Trend in Asset Quality
Source: Company
17

KANSAI NEROLAC PAINTS LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
256
290
13.3%
269 / 153
137963
INVESTMENT ARGUMENT
1 Year Performance
KNPL is the market leader in the Industrial Paint Segment with 42%
market share, with automotive segment contributing 75% of the
industrial segment revenues.
Company which currently has 15% market share in the decorative
paint segment is also looking to expand aggressively in the segment.
We expect revival in auto sales and capex cycle to pick up from here.
RISKS & CONCERNS
Prolong slowdown in the automotive segment.
Source: Bloomberg
Prolong slowdown in the economy leading to weak capex cycle

impacting industrial demand.
COMPANY BACKGROUND
Kansai Nerolac Paints Ltd. (KNPL), a subsidiary of Kansai Paint, Japan, is
one of India's leading paint companies and the largest player in the
industrial segment.
The company is the market leader in the automotive coating segment
in India with a dominant market share
SECTOR BACKGROUND
The paint sector is broadly divided into two areas: Decorative segment
with 80% market share and Industrial Segment with 20% market
share.
FINANCIALS (RS MN)
Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
35,421
11.3
4,449
12.6
3,989
2,716
5.0
21.7
6.3
29.7
1.1
17.0
16.9
2,216
43.2
FY15
50.8
8.6
3.8
30.3
1M
12.7
FY16E
42,227
19.2
5,636
13.3
5,200
3,536
6.6
30.2
7.8
33.3
1.1
19.7
19.7
2,609
42.2
FY16E
39.0
7.7
3.2
23.9
3M
15.1
FY17E
47,889
13.4
6,541
13.7
6,091
4,142
7.7
17.1
9.0
37.9
1.1
20.3
20.3
2,846
42.5
FY17E
33.3
6.8
2.8
20.5
6M
7.5
Source: Bloomberg
Volume in million litres for KNPL
Average price increase for KNPL in %
Source: Company
18

LARSEN & TOUBRO LTD
ACCUMULATE
Last report on 3 August 2015 (Price: Rs.1789)
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
1791
1870
4.4%
1894 / 1400
1666166
INVESTMENT ARGUMENT
1 Year Performance
Diversified play on the Indian infrastructure and Industrial sector.

Order backlog of Rs 2.39 trn remains strong providing visibility of 34
months of trailing four quarter revenue.
The company has given revenue growth guidance in FY16 of 15%.
We expect stock to respond favourably to any reforms moves to
address the issues that have plagued the power sector.
RISKS & CONCERNS
Source: Bloomberg
Mainly project execution and commodity price risks.

Project investments has slowed down in recent quarters, which may
impact order flow in the coming quarters.
COMPANY BACKGROUND
Professionally managed engineering company.
Presence across Middle East and Central Asia
Diversified across Power, Infrastructure, Hydrocarbons, Railways,
Shipbuilding, Nuclear etc
SECTOR BACKGROUND
The sector is a play on the growth of industrial and infrastructure
investment in India as well as abroad
FINANCIALS (RS MN)
Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
BV (Rs/share)
Dividend / share (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
NW Capital (Days)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
918,340
7.9
113,484
12.4
72,172
47,648
48.0
(2.3)
76.3
440.0
16.3
11.3
3.7
(765,110)
114.7
FY15
37.3
4.1
0.9
7.3
1M
(1.6)
FY16E
1,028,541
12.0
137,975
13.4
81,112
53,601
57.8
20.5
92.3
478.8
17.0
12.6
4.0
(869,295)
107.1
FY16E
31.0
3.7
0.7
5.3
3M
9.0
FY17E
1,182,822
15.0
163,262
13.8
100,624
66,495
71.7
24.1
112.4
530.4
18.0
14.2
4.2
(951,659)
102.6
FY17E
25.0
3.4
0.5
3.7
6M
3.3
Source: Bloomberg
Order Intake (Rs bn)
Revenue Mix (%)
Source: Company
19

MARUTI SUZUKI INDIA LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
4331
4913
13.4%
4439 / 2571
1308309
INVESTMENT ARGUMENT
1 Year Performance
MSIL is expected to benefit from multiple earnings growth lever in the

next 2-3 years.
On the back of expected recovery in the economy, the domestic
passenger car industry is likely to grow on a strong note. MSIL, being
the market leader will be the key beneficiary of this expected revival in
car demand.
Factors such as expected recovery in small car demand, preference shift
towards petrol cars due to fall in fuel prices and strong urban centric
new product pipeline should lead to market share gain for the
company.
Source: Bloomberg
RISKS & CONCERNS

Lower than anticipated growth will jeopardize our revenue and profit
Estimates.
COMPANY BACKGROUND
MSIL, India's largest passenger car company, is a subsidiary of Suzuki
Motor Corporation of Japan. Formed as a government owned
company (Maruti Udyog Limited), it entered into a JV with Suzuki
Motor Corporation. Over the years the company has been one the most
successful player in the Indian car market.
SECTOR BACKGROUND
Indias passenger vehicle industry sold ~3mn vehicles in FY14. While
80% of sales happened in the domestic market, balance 20% were
exported. Top five players account for ~80% of industry sales volumes.
FINANCIALS (RS MN)
Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
499,706
14.3
67,130
13.4
48,682
37,112
122.9
34.2
180.1
784.7
25.0
16.6
21.4
126,521
(7.2)
FY15
35.3
5.5
2.4
17.6
1M
10.6
FY16E
586,736
17.4
95,460
16.3
73,376
53,564
177.3
44.3
241.6
924.4
35.0
20.7
27.6
143,923
(7.9)
FY16E
24.4
4.7
2.0
12.2
3M
18.7
FY17E
709,701
21.0
113,492
16.0
91,167
67,463
223.3
25.9
291.8
1,095.1
45.0
22.1
28.3
201,759
(10.3)
FY17E
19.4
4.0
1.6
9.7
6M
22.6
Source: Bloomberg
Sales Volumes (Units)
Market Share (%)
Source: Company
20

NAGARJUNA CONSTRUCTION COMPANY LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
83
101
21.7%
118 / 34
46142
INVESTMENT ARGUMENT
1 Year Performance
Companys numbers for Fy16 were ahead of our estimates with strong
revenue growth coupled with improvement in margins. Borrowings
have further come down during the quarter post rights issue.
Net profit performance was thus boosted by strong revenues and lower
than expected interest expenses.
With the recent order inflows coming in at higher margins, company
expects to improve margins from current levels going forward.
RISKS & CONCERNS
Delays in order inflow across verticals may impact revenue growth
going forward.
Delays in stake sale in road/power/real estate may keep debt at
higher levels.
Source: Bloomberg
COMPANY BACKGROUND
Order book currently is diversified across roads, building, oil and gas
(45%), water and railways (20%), irrigation (4%), electrical (7%),
mining (1%), international (16%), metals (nil) and power (6%).
SECTOR BACKGROUND
Order inflow is likely to increase going forward during the fiscal due to
improvement in macro-economic climate. We expect buildings, water
supply, and irrigation to continue to witness increased activity thereby
leading to better order inflows.
FINANCIALS (RS MN)

Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
82,918
35.5
6,442
7.8
1,590
1,118
2.0
27.1
4.0
58.0
0.1
3.9
14.1
(19,470)
147.0
FY15
41.3
1.4
0.8
10.2
1M
2.1
FY16E
87,064
5.0
6,965
8.0
2,443
1,613
2.9
44.3
5.0
60.8
0.1
4.9
12.9
(18,908)
147.0
FY16E
28.6
1.4
0.7
9.3
3M
(10.7)
FY17E
94,029
8.0
7,522
8.0
3,670
2,422
4.4
50.2
6.5
65.1
0.1
6.9
13.4
(18,623)
147.0
FY17E
19.0
1.3
0.7
8.6
6M
11.7
Source: Bloomberg
Order book break up (%)
Segmentwise Revenue Break up (%)
Source: Company
21

SUPREME INDUSTRIES LTD
BUY
CMP
Target Price (Rs)
52 Week H/L (Rs)
Mkt Cap (Rs mn)
627
775
23.6%
747 / 552
79646
INVESTMENT ARGUMENT
1 Year Performance
SIL has track record of generating high ROCE of ~35% with strong
positive operating cash flows driven by 1) efficiently utilizing assets 2)
diverse products mix with increasing share of high margins value added
products 3) better working capital management v/s its peers.
We believe that the recent correction in the raw material prices will
have positive impact on demand and margins across segments
RISKS & CONCERNS

High volatility in raw material prices
Source: Bloomberg
Slowdown in building and real estate sector

COMPANY BACKGROUND
Supreme Industries Ltd (SIL) is one of the major players in the plastic
pipes business with established brand equity. The company
manufactures and sells diverse range of plastic products broadly
categorized across 5 different verticals, plastic piping system, consumer
products, industrial products, packaging products and composite
products
SECTOR BACKGROUND
The demand of plastics in India has grown at a CAGR of 13% in volume
terms from 6 MTPA in FY08 to 11 MTPA in FY13. The demand is
expected to grow at a CAGR of 10% from FY13 to Fy18 to reach 18
MTPA.
FINANCIALS (RS MN)
Sales
Growth (%)
EBITDA
EBITDA margin (%)
PBT
Net profit
EPS (Rs)
Growth (%)
CEPS (Rs)
ROE (%)
ROCE (%)
Net cash (debt)
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY15
42,547
7.4
6,659
15.7
4,758
3,157
24.9
12.2
35.8
90.3
9.0
29.9
37.1
(791)
32.8
FY15
25.2
6.9
1.9
12.1
1M
(10.5)
FY16E
48,961
15.1
7,317
14.9
5,470
3,630
28.6
15.0
40.7
109.5
9.0
28.6
38.5
(1,678)
31.6
FY16E
21.9
5.7
1.7
11.1
3M
(8.4)
FY17E
58,400
19.3
8,650
14.8
6,740
4,472
35.2
23.2
48.8
135.4
9.0
28.8
40.5
(669)
34.1
FY17E
17.8
4.6
1.4
9.3
6M
1.4
Source: Bloomberg
High RoCE and RoE business
Plastic demand in India to grow at 10% CAGR
Source: FICCI Report

22
YIELD TO MATURITY (YTM) OF TAX FREE BONDS

TRADING IN SECONDARY MARKETS
Company Name
NHPC Limited
Series
Rating
Tenure
Int Date
CMP Accrued Int
Yield
N1
AAA
10
1st April
1026.60
27.24
8.18%
N4
AAA
15
15th October
1070.00
58.22
7.62%
N4
AAA
15
1st December
1020.00
45.71
7.61%
NB
AAA
10
15th April
1060.01
24.25
7.59%
N7
AAA
20
24th March
5800.00
31.97
7.58%
AA+
10
25th October
1114.05
64.25
7.54%
AA+
15
25th October
1174.99
67.09
7.44%
AAA
20
16th November
1209.49
62.94
7.42%
AA+
20
13th January
1209.00
49.25
7.38%
N2
AAA
15
13th January
5750.00
47.18
7.38%
N3
AAA
20
13th January
5915.00
47.89
7.38%
AA+
20
13th January
1185.00
41.16
7.36%
AAA
15
28th March
998.00
24.21
7.35%
N6
AAA
15
24th March
5830.00
31.51
7.32%
N6
AAA
20
1st April
1190.00
29.70
7.29%
N2
AAA
10
24th March
5445.00
-53.51
7.28%
N9
AAA
15
1st December
1175.88
57.87
7.27%
AAA
15
4th January
1047.99
42.05
7.27%
N6
AAA
20
16th December
1217.85
55.54
7.27%
AAA
15
16th November
1189.90
62.02
7.24%
INE848E07518
Indian Railway Finance Corporation Limited
INE053F07579
Rural Electrification Corporation Limited
INE020B07GZ9
Indian Railway Finance Corporation Limited
INE053F07710
National Housing Bank
INE557F07199
Housing & Urban Development Corp Ltd
INE031A07931
INE031A07949
Power Finance Corporation Limited
INE134E07463
INE031A07AB2
INE557F07090
INE557F07108
INE031A07980
INE134E07364
INE557F07181
NHPC Limited
INE848E07567
INE557F07140
Rural Electrification Corporation Limited
INE020B07HS2
INE134E07349
NTPC Limited
INE733E07JJ9
INE134E07448
As on 31st July, 2015
Disclaimers:
1
2
3
4
5
6
7
Kotak Securities Limited (KSL) may have taken proprietary long/short position in the above mentioned scrip and therefore should be considered as interested. Analyst holding: Nil. The views provided herein are
general in nature and does not consider risk appetite or investment objective of particular investor; clients are requested to take independent professional advice before investing. This should not be construed as
invitation or solicitation to do business with KSL. For more details please refer the issue document.
Debt investments are subject to risk. Past performance is no guarantee for future performance. This document has been prepared by Kotak Securities Limited and is meant for sole use by the recipient and not for
circulation. This document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained
herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such
YTM (Yield To Maturity): Annualized yield that would be realized on a bond if the bond was held until maturity date
Accrued Interest: Interest earned on a bond till date for the current financial year from the date of allotment/last interest payment date
Please note that the face value of the above mentioned bonds is Rs 1000 respectively
Record Date for the above mentioned bonds in most cases is 15 days prior to interest payment date. To know record date for a specific bond, please refer offer document.
CMP (Current Market Price) is the closing price as on 31st July, 2015
23
MUTUAL FUND RECOMMENDATIONS
CAGR (%)
Recommended Equity Funds
Corpus (In Crs.)
1 Year
3 Years
5Years
Absolute Returns for period less than 1 year, CAGR for 1 year & above
Large Cap Funds
Birla Sun Life Top 100 Fund
1,768
21.65
26.26
15.55
Franklin India Prima Plus Fund
4,582
33.10
28.30
16.34
Kotak Select Focus Fund
2,922
33.84
28.94
15.85
SBI Bluechip Fund
2,349
28.24
27.54
14.97
Franklin India Prima Fund - Growth
3,576
37.32
36.59
19.91
ICICI Prudential MidCap Fund
1,297
35.61
36.97
16.89
703
46.51
35.10
17.37
3,002
43.78
40.64
21.18
Mid Cap Funds
Kotak Emerging Equity Scheme - Reg

UTI Mid Cap Fund
Opportunistic Funds
Birla Sun Life Equity Fund
2,148
22.48
29.06
13.39
Franklin India High Growth Companies Fund - Growth
2,934
38.48
36.51
19.47
ICICI Prudential Value Discovery Fund
9,770
29.12
33.42
20.06
ELSS Funds
Axis Long Term Equity Fund - Growth
5,437
34.28
34.76
21.77
Birla Sun Life Tax Relief 96
1,952
36.50
30.75
14.06
Franklin India Taxshield
1,767
33.15
27.61
17.37
AUM is as of June 2015. Average Maturity of Schemes are as of June 2015.

Tracker as on August 04, 2015.
For any queries and feedback you can email us at service.securities@kotak.com
24
COMPANY FIXED DEPOSITS

COMPANY'S NAME
NON CUMULATIVE INTEREST RATE

1YR
BAJAJ FINANCE LIMITED
2YRS
3YRS
5YRS
8.75(M)
8.90(M)
8.90(M)
8.90(M)
8.80(Q)
8.95(Q)
8.95(Q)
8.95(Q)
8.90(H)
9.05(H)
9.05(H)
9.05(H)
9.10(Y)
9.25(Y)
9.25(Y)
9.25(Y)
HDFC LIMITED Regular Deposits
8.35(M)
8.35(M)
8.35(M)
8.35(M)
(Maximum Limit: Less than Rs. 1 Crore)
8.40(Q)
8.40(Q)
8.40(Q)
8.40(Q)
8.50(H)
8.50(H)
8.50(H)
8.50(H)
8.70(A)
8.70(A)
8.70(A)
DEEWAN HOUSING FIN. LTD (Aashray Deposits)
LIC HOUSING FINANCE LTD
8.85(M)
9.10(M)
9.10(M)
9.10(M)
8.95(Q)
9.15(Q)
9.15(Q)
9.15(Q)
9.05(H)
9.30(H)
9.30(H)
9.30(H)
8.60
8.60(18 months)
8.75
9.00
8.70(24 months)
MAHINDRA & MAHINDRA FINANCE SERV LTD
SHRIRAM Trans FINANCE CO.LTD.

(Maximum Limit: Less than Rs. 10 Crore)
PNB Housing Finance Limited
8.40(Q)
9.15(Q)
9.15(Q)
8.90(Q)
8.50(H)
9.25(H)
9.25(H)
9.00(H)
9.00(Y)
8.81(H)
8.71(Q)
8.65(M)
9.25(Y)
9.05(H)
8.95(Q)
8.88(M)
9.50(Y)
9.28(H)
9.18(Q)
9.11(Q)
9.50(Y)
9.28(H)
9.18(Q)
9.11(Q)
8.80(M)
8.80(M)
8.80(M)
8.80(M)
8.85(Q)
8.85(Q)
8.85(Q)
8.85(Q)
8.95(H)
8.95(H)
8.95(H)
8.95(H)
9.15(Y)
9.15(Y)
9.15(Y)
9.15(Y)
The Fixed Deposits list is not comprehensive but contains few Fixed Deposits currently available for Public. Investors should read the fixed deposit application forms before
applying for the same.
Capital Gain Bonds
INTEREST RATE / TENURE
REC 54EC Capital Gain Bonds (Series X)
6.00% payable annually, 3 year
NHAI 54EC Capital Gain Bonds (SERIES XVI)
6.00% payable annually, 3 year
IPO
Lead Manager/ Lead Broker
SADBHAV INFRASTRUCTURE PROJECT LIMITED
Kotak Securities Limited is the Lead Manager
25
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Kotak Investment Strategist August - 2015

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Kotak Investment Strategist August - 2015

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About the cover

Distribution of rainfall in the coming weeks is important to watch to ensure

One Month Portfolio

Markets remained quite volatile during last month on

Latest Fundamental Stock Recommendation

Monthly Derivative Outlook

Preferred Picks - Fundamental

Monthly Technical Outlook

Yield to Maturity (YTM) of tax free bonds

Mutual Fund Recommendations

Company Fixed Deposits & Forthcoming IPOs

Caution advised around 8600.

The opening of the previous week was negative for the

Forex Insight Research & Analysis

In the above graph Indian Rupee can be counted

Meeta Shetty, CFA

MONTHLY FUNDAMENTAL OUTLOOK

medium to long term

Market performance - sector wise (July 2015)

Benchmark indices - India

Order inflow showing signs of revival;

Investment Strategist August 2015

MONTHLY FUNDAMENTAL OUTLOOK

made future action contingent on the progress of the monsoon,

On the Land acquisition bill, the Government has reportedly

IIP growth (%)

Rainfall distribution important

Distribution of rainfall in the coming weeks is important to watch

Investment Strategist August 2015

MONTHLY FUNDAMENTAL OUTLOOK

FII & Mutual Fund investment (Rs Cr)

We believe this is probably one of the factors which will engage

Investment Strategist August 2015

MONTHLY FUNDAMENTAL OUTLOOK

Axis Bank, ICICI Bank, IDFC

Capital Goods, Engineering

Greaves Cotton, Carborundum Universal, L&T, Cummins India, Blue Star

Grasim Industries, Ultratech Cements

IRB Infra, NCC, KNR Construction

Adani Port, Allcargo, Gateway Distriparks

JSW Steel, Nalco

Kajaria Ceramics, Supreme Industries

Oil & Gas

Source: Kotak Securities - Private Client Research

Preferred picks - Export oriented / Defensive sectors

Hindustan Media Ventures,Tv18

Source: Kotak Securities - Private Client Research

Is your profile up to date?

Investment Strategist August 2015

MONTHLY DERIVATIVE OUTLOOK

After a choppy month of July, NIFTY is expected to give a

BANKNIFTY and CNX IT also remained volatile for most part of

Profit booking is advised in stocks in the range of 8550-8600.

Nifty Options Concentration

Nifty Options Concentration

Strike Price - Strike price for the contract

Sell in the range of 165-170 with

Breach of major support of 166 which is

Buy in the range of 25000 25250 with stoploss placed at

Higher tops and higher bottoms along

For queries and feedback you can e-mail us at ksderivative.desk@kotak.com

Investment Strategist August 2015

MONTHLY TECHNICAL OUTLOOK