IEA Report: 1st Dec, 2016

IEA Report
1st Dec 2016

ASIANPAINT
"NEUTRAL"
1st Dec 2016
Management remained silent on volume growth improvement (which indicates lower double digit volume growth going ahead) but did hint at
margin pressures. We do not see significant improvement in volume growth, margin risks (due to high input cost) and peak valuations (trades at
FY18 P/E of 45x) make the risk-reward unfavorable. We see downside risks to our estimates due to an unfavorable H2FY17 base with top line and
gross margins peaking out.It also expects paint companies to register flat growth in sales during Q3FY17 compared Q3FY16, following the
government's move to scrap old Rs 500 and 1,000 notes. While the month of October saw significant jump in sales during festive season, November
has seen a significant fall on account of the demonetization announcement.
While the paint industry is 80-85 per cent cash-driven with the paint retailers accepting only cash payments for the sales, is now shifting over to
digitized payments to keep the business going. We maintain Neutral rating with a target price of Rs.1015. ......................................................... (
Page : 2-3)
KEC
"HOLD"
30th Nov 2016
Efficient working capital management boosted earnings and strengthened balance sheet position and we expect it to continue going forward.
Considering the ramp up in execution of substation (T&D) project, healthy SAE order book & margin level and huge potential in railway business will
help KEC to perform better in H2FY17. But considering the current macroeconomic condition we recommend HOLD on the stock with unchanged
target price of Rs. 164/-. ................................................ ( Page : 4-7)
KNRCON
"HOLD"
29th Nov 2016
Going forward, we expect KNR to perform better based on strong execution of orders received in the last year and huge opportunities in terms of
new order intake. Considering a) companys strategic decision to exit from BOT assets and focus on EPC project to keep balance sheet assets light,
b) strong bid pipeline of 20 projects and robust order inflow during the H1FY17 will help KNR to register strong growth. Considering the current
uncertain macroeconomics we recommend HOLD on the stock with unchanged target price of Rs. 815/share.
......................................................... ( Page : 8-11)
BEML
"HOLD"
28th Nov 2016
As the company is having healthy order book worth Rs 6500 cr, so going forward we expect the company to register decent topline as well as
bottom line. Increased road construction activity, Railway projects and work on dedicated freight corridors will drive demand growth in FY17E.
With respect to defense verticals the business will be back on track. Company guided Rs 3300 cr topline for FY17E but after seeing 1st and 2nd
quarter results we revised our revenue estimate from Rs 2900 cr to Rs 2500 cr and We expect decent growth in rest of the two quarters. We have
positive view on this stock in long term but due to below expected sales number this quarter we maintain our HOLD rating to the stock. We will
review target price post further clarity from management on near term business condition. ........................................................... ( Page : 12-15)
IRB
"HOLD"
25th Nov 2016
IRB posted moderate set of numbers in Q2FY17 due to heavy and extended monsoon. But current order book provides strong construction revenue
visibilities going forward. We expect better construction revenue growth in H2FY17 based on ramp up of Agra-Etwah project and robust growth in
toll collection. Company will resume its toll collection operations from 24th November. But considering the current volatile macro economy
condition we recommend HOLD on the stock and we will review our rating in January once we have more clear view on macro economy.
............................................... ( Page : 16 - 19)
ALLCARGO
"BUY"
24th Nov 2016
Strong volume growth in MTO segment despite muted global trade growth and falling freight rates, helped the company to perform better in
Q2FY17. In Q2FY17 gross margin improved by 50 bps on account of operating efficiency and companys focus on improve operating efficiency by
better use of technology will help to improve EBITDA margin going forward. No immediate and direct effect of demonetization of currency on
companys business operation but we expect it will slow down economic activities which will effect ALLCARGO. So, based on the above arguments
we maintain BUY with a reduce target price of Rs. 190 from Rs.215. ............ ( Page : 20-23)
IGL
"NEUTRAL"
23th Nov 2016
IGL is expanding its distribution network through a stake in Central UP Gas (CUGL), which is engaged in CGD in the cities of Kanpur and Bareilly,
Unnao and Jhansi in Uttar Pradesh where demand of CNG is growing rapidly. Managements aggressive strategy to expand its footprint beyond
Delhi NCR will open up new opportunities for the company in long run. Considering recent rally restrict upside potential of the stock. We
recommend buying on declines. At current price of Rs.828, we remain Neutral. ............................. ( Page : 24-26)
Narnolia Securities Ltd
IEA Edition No.-
896
Neutral
Asian Paints Ltd.
1-Dec-16
View & Valuations :
Company Update
CMP
970
Target Price
1015
Previous Target Price
1100
Upside
5%
Change from Previous
NA
Market Data
BSE Code
500820
NSE Symbol
ASIANPAINT
1230/825
52wk Range H/L

Mkt Capital (Rs Cr)
93,027
Av. Volume(,000)
140.4
Nifty
8224.5
Management remained silent on volume growth improvement (which indicates

lower double digit volume growth going ahead) but did hint at margin
pressures. We do not see significant improvement in volume growth, margin
risks (due to high input cost) and peak valuations (trades at FY18 P/E of 45x)
make the risk-reward unfavourable. We see downside risks to our estimates
due to an unfavourable H2FY17 base with topline and gross margins peaking
out.It also expects paint companies to register flat growth in sales during
Q3FY17 compared Q3FY16, following the government's move to scrap old Rs
500 and 1,000 notes. While the month of October saw significant jump in sales
during festive season, November has seen a significant fall on account of the
demonetization announcement.
While the paint industry is 80-85 per cent cash-driven with the paint retailers
accepting only cash payments for the sales, is now shifting over to digitized
payments to keep the business going. We maintain Neutral rating with a target
price of Rs.1100.
Stock Performance
1Month
1Year
YTD
Absolute
-8.7
12.6
17.9
Rel.to Nifty
-5.3
8.2
13.0
Q2FY17 Result Update :
Share Holding Pattern-%

Q2FY17 Q1FY17 4QFY16
Promoter
52.8
52.8
52.8
Public
Others
Total
47.2
47.2
47.2
100.0
100.0
100.0
Bhabani Prasad Dehury

bhabani.dehury@narnolia.com
(Source: Company/Eastwind)
ASIANPAINT
NIFTY
140
130
120
110
100
90
Oct-16
Nov-16
Sep-16
Jul-16
Aug-16
Jun-16
Apr-16
May-16
Feb-16
Mar-16
Jan-16
Dec-15
80
Nov-15
Investment Rationals :
Double digit volume growth in decorative business in Q2FY17, but, a

prolonged monsoon did affect demand in West and Central India.
No price revision for this quarter. Asian Paints will closely monitor movement
of input prices and GST rate before deciding on price revision, if any.
In the standalone business, the company will incur capex of INR6bn in FY17
for its Mysore and Vizag facilities. Of this, capitalisation will be INR2bn in FY17.
Full Vizag and Mysore plants will be capitalised in FY18.
Financials
Q2FY17
Q1FY17
Q2FY16
QoQ
YoY
Sales
4232
4082
3779
3.7%
12.0%
EBITDA
713
820
621
-13.1%
14.8%
Net Profit
507
622
399
-18.5%
27.0%
Gross %
51%
53%
46%
(231Bps)
444.87
EBIDTA %
17%
20%
16%
-324.84
41.95
PAT %
12%
15%
11%
-325.86
141.80
Company Vs NIFTY
150
Consolidated net profit grew 18.1% to Rs494.76 Cr YoY in Q2FY17, while

consolidated income from operations rose 10.2% to Rs4,232 Cr YoY.
Consolidated EBIDTA margins improved by more than 100bps to 16.85% YoY,
but on a sequential basis, gross margins declined. 271bps QoQ dip in gross
margin was purely owing to increase in raw material cost not due to a change
in the product mix. We see further drop in margins as crude price is bottoming
out.
Narnolia Securities Ltd,

Please refer to the Disclaimers at the end of this Report.
Brief Highlights Q4FY16 Results :

Net Sales from Operations
Other Income
Total Income
COGS
Employee Benefit Expenses
Excise Duty
Other Expenses
Expenditure
EBITDA
Depreciation
EBIT
Interest
PROFIT BEFORE TAX
Tax
PROFIT AFTER TAX
Margin %
EBIDTA %
EBIT %
PAT %
Cost Calculation % to Sales
COGS Cost % to Sales
Employee Cost % to Sales
Excise Duty % to Sales
Other expenses % to Sales
Q2FY16
Q3FY16
Q4FY16
3779
58
3837
2032
247
4160
36
4196
2200
247
3971
34
4005
2027
277
880
3159
621
71
550
9
598
184
415
912
3359
801
73
728
8
756
229
527
964
3268
704
75
628
15
648
225
422
Q2FY16
16.4%
14.6%
11.0%
Q2FY16
53.8%
6.5%
0.0%
23.3%
1QFY15
Q3FY16
19.2%
17.5%
12.7%
Q3FY16
52.9%
5.9%
0.0%
21.9%
2QFY15
Q4FY16
17.7%
15.8%
10.6%
Q4FY16
51.0%
7.0%
0.0%
24.3%
3QFY15
Q1FY17
Q2FY17
4082
72
4154
1919
277
445
621
3262
820
85
735
6
800
260
540
Q1FY17
4232
79
4312
2088
279
469
683
3519
713
84
629
6
702
221
481
Q2FY17
20.1%
18.0%
13.2%
Q1FY17
YoY
3.7%
10.0%
3.8%
8.8%
0.7%
5.5%
10.1%
7.9%
-13.1%
-1.3%
-14.4%
-5.0%
-12.3%
-15.2%
-10.9%
12.0%
37.6%
12.4%
2.7%
13.3%
14183
170
14353
7971
907
-22.3%
11.4%
14.8%
19.0%
14.3%
-34.5%
17.3%
20.2%
16.0%
3069
11947
2235
266
1969
35
2104
650
1395
QoQ
YoY
16.8% (325 Bps)

14.9% (315 Bps)
11.4% (186 Bps)
Q2FY17
47.0%
6.8%
10.9%
15.2%
4QFY15
QoQ
49.3%
6.6%
11.1%
16.1%
1QFY16
QoQ
42 Bps
30 Bps
39 Bps
YoY
231 Bps (445 Bps)

(20 Bps)
7 Bps
19 Bps 1108 Bps
94 Bps (713 Bps)
Q2FY16
Q3FY16
FY15
FY15
15.8%
13.9%
9.8%
FY15
56.2%
6.4%
0.0%
21.6%
Q4FY16
FY16
15843
213
16056
8049
990
1571
2463
13074
2769
276
2494
41
2666
844
1779
FY16
17.5%
15.7%
11.2%
FY16
YoY
11.7%
25.7%
11.9%
1.0%
9.1%
-19.7%
9.4%
23.9%
3.6%
26.6%
17.0%
26.7%
30.0%
27.5%
YoY
172 Bps
185 Bps
139 Bps
YoY
50.8% (540 Bps)

6.2% (15 Bps)
9.9% 992 Bps
15.5% (609 Bps)
Q1FY17
Q2FY17
Volume Growth ( % )
11%
10%
3%
4%
12%
5%
15%
13%
11%
12%
Realization Growth (%)
7%
6%
3%
3%
-4%
-1%
-1%
-1%
1%
0%
Sales Growth (%)
18%
17%
6%
7%
8%
4%
14%
12%
13%
12%
Crude Price in USD
109.8
102.1
76.0
54.0
62.1
50.0
43.4
34.4
45.5
45.8
Key Conference call Highlights :
Double digit volume growth in decorative business in Q2FY17, but, a prolonged monsoon did affect demand in West and Central
India.
Rural India still continues to grow faster than urban India. South India, post floods, has picked up. Hence, North and South have been
growing at similar pace. Overall retail demand has improved after monsoon eased out.
No price revision this quarter. Asian Paints will closely monitor movement of input prices and GST rate before deciding on price
revision, if any.
271bps QoQ dip in gross margin was purely owing to increase in raw material cost.
Good demand in auto OEM and general industrial business segment led to improved performance of automotive coatings JV. In the
industrial coatings JV, the industrial liquid paints segment continued to grow well.
Home improvement delivered good top line due to network expansion and new product launches. Good improvement in Ess Ess and
Sleek business. New products launches under Ess Ess have resulted in better traction.
International business performed well aided by good growth in markets like Nepal, UAE and Fiji. Moderate improvement in Ethiopia
too, but it was affected by adverse forex fluctuations.
In the standalone business, the company will incur capex of INR6bn in FY17 for its Mysore and Vizag facilities. Of this, capitalisation
will be INR2bn in FY17. Full Vizag and Mysore plants will be capitalised in FY18.
HOLD
KEC International
30-Nov-16
Result Update
CMP
124
Target Price
165
Upside
33%
Market Data
BSE Code
532714
NSE Symbol
KEC
164/97
3,597
142197
7966
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume
Nifty
Stock Performance
1Month
3 Month
1Year
Absolute
6.8
-1.0
-17.0
Rel.to Nifty
-7.5
-7.7
1.5

2QFY17
1QFY17 4QFY16
Promoters
51%
51%
51%
Public
49%
49%
49%
KEC reported mix set of numbers in Q2FY17. The company posted

moderate revenue growth of 5% YoY but healthy improvement in EBITDA
margin. Revenue remains flat in H1FY17 compared to H1FY16. EBITDA
margin improved by 100 bps YoY to 8.7% on account of continued better
performance of SAE and Railway business. SAE reported healthy EBITDA
margin of 14.2% in Q2FY17. PAT grew by the 47% YoY to Rs. 72 Cr as
against Rs. 44 Cr in corresponding period. Lower interest outgo helped to
post handsome growth in PAT. KEC witnessed strong order intake of Rs.
3103 Cr. Current order book stands at Rs. 10785 Cr with 3800 Cr plus L1
orders.
In Q2FY17 railway segment has shown strong revenue growth of 30% and
order intake increased around 6 times compared to Q2FY16 with increased
margin. Margin will further improve as the quantum of revenue increases. We
expect continuing healthy ordering activity from SEBs (Karnataka,
Tamilnadu, Rajasthan, West Bengal, Andhra Pradesh and Telenga).EHV
cable and solar cable is key growth drivers for the cable business going
forward. KEC is well on track to achieve its revenue guidance based on ramp
up in execution of back ended substation project worth Rs. 1500-1700 Cr
during H2FY17.
Reduction in Debt through efficient working capital management:KEC has reduced gross debt by Rs. 300 cr with the help of better AR
management (reduction of Rs 485 Cr). Working capital days improved to
229 days from 246 days. Management expects to release retention money
from project in Saudi as project gets completed in next 2-3 months. Hence, it
will lead to further reduction in working capital days. Company aims to bring it
down to 180 days by the year end.
Outlook and Valuation

Company Vs NIFTY
120
KEC
NIFTY
110
100
90
80
Efficient working capital management boosted earnings and strengthened

balance sheet position and we expect it to continue going forward.
Considering the ramp up in execution of substation (T&D) project, healthy
SAE order book & margin level and huge potential in railway business will
help KEC to perform better in H2FY17. But considering the current
macroeconomic condition we recommend HOLD on the stock with
unchanged target price of Rs. 164/-
70
In Rs. Cr
60
50
40
Sandip Jabuani
Financials
FY13
FY14
FY15
FY16
FY17E
Sales
EBITDA
Net Profit
EBIDTA%
EV/EBITDA
6979
381
65
5.5%
5.4
7902
493
67
6.2%
4.5
8468
512
161
6.0%
5.1
8516
679
192
8.0%
5.4
9369
796
287
8.5%
sandip.jabuani@narnolia.com
Result Highlights Q2FY17 & H2FY17

Revenue grew by 5% YoY and de-grew by 1% YoY in Q2FY1 and H1FY17 respectively. Delay in conversation of L1 order into
firm orders, back ended execution project and weak execution led to muted revenue growth in Q2FY17 and H1FY17.
EBITDA grew by 49% YoY and 13% to Rs. 185 cr and Rs. 335 Cr in Q2FY17 and H1FY17 respectively. Strong double digit and
increased EBITDA margin of SEA and railway business respectively support the EBITDA margin.
PAT margin reported robust growth of 47% YoY and 96% YoY to 72 Cr , 119 Cr in Q2FY17 and H1FY17 respectively. Lower
interest out go, strong performance at revenue and EBITDA level helped to grew higher.
SAE revenue grew by 30% YoY to Rs. 261 cr as compared to Rs. 201 Cr in same period last year with strong double digit
EBITDA marin. SAE business current order book stands at Rs. 1510 Cr (1.8x of FY16 revenue) and expect huge demand going
forward.
Railway business reported robust revenue growth of 94% YoY to Rs. 66 Cr as against Rs. 34 Cr in same period last year.
Railways current order book stands at Rs. 1186 Cr (7x of FY16 Revenue) and management expects to close order book around
Rs. 1200 Cr by year end.
Managment / Concall Update

KEC maintain 10% revenue growth and 8.5% EBITDA margin for the FY17
Current Order book stands at Rs. 10785 Cr with 3800 cr plus L1 orders.
KEC managed to collect Rs.1000 Cr of debtors from Saudi Arabia in Q2FY17 and it overall reduced debtors by Rs. 500 Cr and
gross debt by Rs. 150 Cr. Expect to complete 3-4 projects in Saudi in coming quarter.
Working capital days reduce to 229 days from 246 days and it will further reduce to 180 days by year end. Expect to release
retention money from Saudi project. This will reduce working capital requirement.
SAE reported double digit EBITDA margin. Current order stands at Rs. 1500 Cr executable over next 2 years.
Cable Business: - Positive on EBITDA level but still negative on PBT level due to high depreciation. Management expects to turn
positive on PBT level by year and EBITDA margin will be accretive from next year. EHV and Solar cable is key driver for the future
growth.
International Orders:- Rs. 2500 Cr out of 3800 cr of L1 orders belongs to international market.
T &D:- Management see huge opportunity in domestic T&D market. Growth will driven by Karnataka, Tamilnadu, Rajasthan, West
Bengal and Telengana SEBs.
Normal tax rate in FY17 (35%-36%)
Interest cost will be 3% of sales in FY17 and 2.7% of sales in FY18
Order Book
Order Intake
Book to bill
10785
10,403
9,487
9,351
9,872
10,537
9,508
8,770
9,320
10,325
37%
2000
1500
1000
500
-5%
-13%
-37%
-7%
-8%
-33%

3103
4,000
42%
2825
63%
2500
1877
6,000
3000
2246
1506
106%
3085
Growth YoY%
3500
2423
8,000
1100
10,000
2,000
Order Intake
1892
12,000
2808
Order Book
120%
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
Segmental Revenue
Maintain 10% revenue

growth and 8.5%
EBITDA margin for the
FY17
EBITDA margin
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
8.7%
7.3%
5.9%
5.6%
7.5%
7.7%
7.8%
8.4%
8.7%
Managment guided
8.5% EBIDTA margin
for the FY17
5.1%
1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
Finance Cost As % of Sales

5%
4%
4%
4%
4%
4%
4%
3%
4%
3%
3%
3%
2.8%
3%
3%
Finance cost will be 3%

and 2.7% of sales in
Fy17 & FY18
respectively.
2%
2%
1%
1%
0%
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
About the Company

KEC International Limited is an India-based company, engaged in infrastructure engineering,
procurement and construction (EPC). The Company is also a manufacturer of power cables and
telecom cables in India. The Company operates in four business verticals, which include power
transmission and distribution, cables, railways and water. The Company is also a provider of turnkey
solution in the railway infrastructure EPC space. The Company has powered infrastructure development
across 50 countries in developed, developing and emerging economies of South Asia, the Middle East,
Africa, Central Asia, the United States and South East Asia. The Company has eight manufacturing
facilities for lattice towers, monopoles, hardware and cables. The Companys manufacturing facilities
located at Vadodara (Gujarat), Mysore (Karnataka) and Silvassa (Union Territory) in India.
Financials Snap Shot
FY13
2.5
44.6
1.4
55%
RATIOS
FY14
FY15
2.6
6.3
46.3
51.7
0.6
0.7
23%
11%
FY16
7.4
58.8
2.2
30%
23.3
1.3
2.38%
26.0
1.5
0.87%
12.8
1.5
0.88%
16.4
2.1
1.82%
6%
18%
6%
24%
12%
20%
13%
28%
1.1
151.0
37.7
129.0
0.62
1.1
175.9
45.0
148.4
0.51
1.1
166.1
38.1
143.3
0.55
1.0
192.6
37.8
126.0
0.40
INCOME STATEMENT
FY13
Revenue (Net of Excise Duty)6979
Other Income
16
Total Revenue
6996
COGS
3836
GPM
1
Other Expenses
785
EBITDA
381
EBITDA Margin (%)
5%
Depreciation
56
EBIT
325
Interest
194
PBT
147
Tax
82
Tax Rate (%)
56%
Reported PAT
65
Dividend Paid
36
No. of Shares
26
FY14
7902
14
7916
4099
1
883
493
6%
71
423
263
173
88
51%
67
15
26
FY15
8468
146
8614
4566
1
917
512
6%
88
424
309
261
100
38%
161
18
26
FY16
8516
10
8527
4148
0
975
679
8%
88
592
277
325
133
41%
192
57
26
EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
Profitability Ratios
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Net Debt/Equity (x)
Souce: Eastwind/Company
Balance Sheet
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Total Capital Employed
Net Fixed Assets
Capital WIP
Debtors
Cash & Bank Balances
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY13
51
1096
1147
708
748
80
1855
1008
30
2887
156
2467
89
1101
6253
FY14
51
1140
1192
603
1207
73
1794
992
18
3808
144
3213
125
1374
7411
FY15
51
1278
1330
737
1308
70
2067
881
16
3853
206
3325
122
1668
7745
FY16
51
1460
1512
602
1723
66
2114
860
12
4495
111
2939
114
2151
8138
Cash Flow Statement

FY13
FY14
FY15
OP/(Loss) before Tax
147
155
261
Depreciation
56
71
88
Direct Taxes Paid
98
113
122
Operating profit before working
402capital changes
499
596
CF from Op. Activity
(87)
(9)
153
FY16
325
88
135
853
(51)
Capital expenditure on fixed assets

150 including
161capital advances
90
and78
capital wor
CF from Inv. Activity
(122)
(136)
125
18
Repayment of Long Term Borrowings
125
305
640
264
Interest Paid
194
263
309
277
Divd Paid (incl Tax)
36
15
17
58
CF from Fin. Activity
161
132
(216)
(63)
Inc/(Dec) in Cash
(48)
(14)
62
(96)
Add: Opening Balance
194
146
132
194
Closing Balance
146
132
194
98

HOLD
KNR Construction
29-Nov-16
Result Update
CMP
720
Target Price
815
640
Upside
13%
27%
Market Data
BSE Code
532942
NSE Symbol
KNRCON
819/408
2025
6937
8126
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume
Nifty
Stock Performance
1Month
1Year
YTD
Absolute
-10.3
2.6
13.9
Rel.to Nifty
-2.7
10.3
12.4

2QFY17
1QFY17 4QFY16
Promoters
58%
61%
61%
Public
42%
39%
39%
Strong Execution drove Revenue and Profitability

KNR reported robust revenue growth of 72% YoY to Rs.373 Cr as compare
to Rs. 178 Cr. Revenue growth has mainly driven by the execution of the
orders received last year, is now contributing to the top line. Currently KNR
order book is Rs. 4579 Cr (5x of FY16 revenue) which provide strong
revenue visibilities and management expecting another Rs.1000-1500 Cr of
new orders in next 4-5 months. This will boost the earning and profitability of
FY17E/FY18E. Management maintains 1200 Cr plus revenue guidance for
FY17E.
KNR and its JV partner (Patel Engineering) has signed a share purchase
agreement with Essel group to sell their entire equity share in Patel KNR
infrastructure Ltd. and Patel KNR heavy infrastructure Ltd., BOT project for
enterprise value of Rs. 850 Cr put to together. KNR holds minority stake of
40% in both project. Post the deal around Rs.300 cr of debt likely to come
down on consolidated books. Sales of BOT project is part of the strategy to
focus on EPC project.
Q2FY17 Result Update : KNR reported robust revenue growth of 72% YoY to Rs.373 cr as against
Rs.217Cr. Growth driven by execution of the orders received in last year is
now contributing to the top line.
EBITDA of the company clocked 43.2% of growth to Rs.56 cr as against
Rs.39Cr in corresponding period last year led by higher revenue growth.
However EBITDA M decline by 300 bps YoY to 15% on account of high
base.
Adjusted Profit after tax grew by the 29% YoY to Rs. 39 (after adjusting
MAT credit) Cr compare to Rs. 30 Cr (after adjusting prior period item).
KNR infuse 90 cr & 130 Cr as equity in walayar BOT project respectively in
Q2FY17 and H1FY17. Out of this promoters put 40 cr and balance part is
funded by the parent company.

Company Vs NIFTY
160
KNRCON
NIFTY
140
120
100
80
60
40
Sandip Jabuani
Going forward, we expect KNR to perform better based on strong execution

of orders received in the last year and huge opportunities in terms of new
order intake. Considering a) companys strategic decision to exit from BOT
assets and focus on EPC project to keep balance sheet assets light, b)
strong bid pipeline of 20 projects and robust order inflow during the H1FY17
will help KNR to register strong growth. Considering the current uncertain
macroeconomics we recommend HOLD on the stock with unchanged target
price of Rs. 815/share.
Financials
FY13
FY14
FY15
FY16E
FY17E
Sales
EBITDA
Net Profit
EBIDTA%
P/E
765
117
49
15.2%
5.1
895
131
60
14.7%
4.0
931
127
70
13.6%
17.1
995
174
126
17.5%
9.5
1521
234
24
15.4%
Investment Argument : The ministry and NHAI has set a target of 25000 Km of road for FY17 on awarding
site and in terms of construction, NHAI is targeting to construction 8000 Km while the
Ministry is targeting 7000 Km
Company has taken strategic decision to exit from BOT asset to focus on EPC
projects, which will help company to keep balance sheet assets light. Post the recent
deal KNR debt on consolidated book will come down by 300 Cr.
Concall/ Managment Intreviwe Update :-
NHAI set to award 25000 km road project in FY17 as compare to 10000 km in FY16
KNR aims to take 1000-1500 cr of new road project in next 4-5 months
Marginal impact of demonization of currency on companys operation
Debt will be come down by Rs. 300 Cr on consolidated books post deal with Essel.
KNR infuse Rs.90 cr and Rs. 130 Cr in walayar project respectively in Q2FY17 and
H1FY17. Out of this promoter put Rs. 40 Cr and balance part was funded by parent
company.
Management maintains revenue guidance of Rs. 1200 Cr plus with 13.5-14.5% of EBITDA
Tax rate for the FY17 will be 8-10%
Company continues to have 80IA benefit on project received in FY17.Hence, FY18 tax
rate will be in range of 10-30% depending on composition of execution.
About the Company:KNR constructions Limited ( from know written as "KNRCL" ) is an ISO 9001:2000
Certified company and listed in Bombay StockExchange Limited (BSE) and National
Stock Exchange of India Limited (NSE). KNRCL is a multidomain infrastructure project
development company providing (EPC) engineering, procurement and construction
services across various fast growing sectors namely roads & highways, irrigation and
urban water infrastructure management. Our project execution strength primarily is in road
transportation engineering projects namely construction and maintenance of roads,
highways, flyovers and bridges wherever integral to the projects undertaken .
Significant experience and Strong track record in timely execution of Projects :-
Timely completion
capabilities will help
KNR construction to
grow higher in
competitive
scenario, comapny
earn bonus of 6Cr on
early completation of
Penchalakona
Yerpedu project.

Strong order book gives good Revenue visibility
(In Rs. Cr)
Road Sector
Irrigation
4,500
4,000
3,479
3,500
3,899
3,605
3,412
3,407
3,528
3,000
2,500
2,000
1,500
1,256
1,141
1,123
730
1,000
500
72
59
62
62
60
59
680
57
2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
EBIDTA %
30%
PAT %
25%
25%
20%
21%
10%
14%
14%
10%
9%
4QFY15
1QFY16
14%
15%
8%
20%
18%
18%
7%
15%
15%
14%
15%
10%
10%
1QFY17
2QFY17
5%
0%
2QFY15
3QFY15
2QFY16
3QFY16
4QFY16
Walayar BOT peoject

Provisional Completion Certificate for 100% of Project length has been issued for the
project on 31st
October
Caters 2015
to commercial traffic towards Kochi Port and Kochi International
Container Transshipment Terminal. The project road serves as an arterial link to

most of the important southern cities such as Salem, Erode, Coimbatore, Trissur,
Palakkad, Kochi, Alappuzha, Kollam, Thiruvananthapuram and Nagercoil
Current Debt is Rs.309 Cr and Toll collection in Q1FY17 is Rs.9.57 Cr
KNR infuse Rs.90 cr and Rs. 130 Cr

in walayar project respectively in
Q2FY17 and H1FY17. Out of this
promoter put Rs. 40 Cr and balance
part was funded by parent
company
Muzaffarpur - Barauni BOT peoject

Provisional Completion Certificate for 75% of Project length has been issued for the
project on 3rd June
2016
Muzaffarpur is an important place for wholesale cloth trade and the largest city of
northern Bihar while Barauni city is situated on holy river Ganga and also an important
industrial city of Bihar having major industrial units such as IOC refinery, Barauni
Thermal Power Plant, Hindustan Fertilizers Corporation and Barauni Dairy

Current Toll collection is 6lakh/day.

KNR will receive 100% COD in next
3-4 months and daily collection
likely to go upto 10lakh/day
10
FY13
17.4
164.9
1.2
7%
RATIOS
FY14
FY14
21.5
24.8
217.2
280.4
1.2
1.2
5%
5%
FY16
44.9
247.8
1.2
3%
5.1
0.5
1.31%
4.0
0.4
1.38%
17.1
1.5
0.28%
11.3
2.0
0.23%
11%
10%
10%
7%
9%
5%
18%
9%
0.7
55.3
28.7
53.3
0.56
0.6
30.8
27.4
31.8
0.85
0.5
43.2
28.1
29.6
0.91
0.5
49.4
34.0
43.6
0.82
INCOME STATEMENT
FY13
Other Income
18
Total Revenue
783
COGS
601
GPM
1
Other Expenses
18
EBITDA
117
EBITDA Margin (%)
15%
Depreciation
56
EBIT
61
Interest
12
PBT
67
Tax
16
Tax Rate (%)
23%
Reported PAT
49
Dividend Paid
3
No. of Shares
3
FY14
895
17
912
707
1
21
131
15%
59
73
18
72
7
9%
60
3
3
FY14
931
13
944
723
1
43
127
14%
55
72
13
71
0
0%
70
3
3
FY16
995
42
1038
663
1
111
174
18%
48
126
56
112
-21
-19%
126
3
3
EPS
Book Value
DPS
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Net Debt/Equity (x)
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY13
28
436
464
80
64
0
544
406
5
116
23
112
115
220
1125
FY14
28
583
611
343
50
0
954
858
2
75
57
78
57
117
1454
FY14
28
760
788
672
88
0
1460
1343
4
110
44
75
42
174
2012
FY16
28
669
697
631
106
0
1328
1263
0
135
45
119
71
260
2051
FY13
FY14
67
72
Depreciation
56
59
Direct Taxes Paid
31
24
Operating profit before working capital changes
3
239
FY14
71
55
33
FY16
112
48
21
66
285

149 including
512capital advances
548
and32
capital wor
(100)
(485)
(549)
32
89
278
342
(41)
Interest Paid
12
18
14
56
3
3
3
3
109
276
462
(83)
Inc/(Dec) in Cash
13
31
(21)
234
7
19
50
44
Closing Balance
19
50
29
278

11
HOLD
BEML LTD.
28-Nov-16
Result Update
CMP
803
Target Price
1240

Upside
54%
Market Data
BSE Code
500048
BEML
1324.40/770.15
3,348
208
8114
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Cr)
Av. Volume
Nifty
Stock Performance
BEML reported Q2FY17 result which is below than our expectations.

Revenue for the quarter decreased by 33% YoY to Rs 454 cr. EBITDA loss
for the quarter was at Rs 0.08 cr against Rs 7.64 cr EBITDA loss during the
corresponding quarter of previous year. Net loss for the quarter stood at Rs
24 cr versus Rs 30 cr net loss in Q2FY16. This was primarily driven by 14%
YoY increase in other income and 11% YoY drop in finance cost.
Management highlights:
As per the management company would be looking to double its revenue to
over Rs 6000 Cr by 2020 and Rs 3500 Cr in FY17.
Order book is roughly about Rs 6600 Cr in FY17.
Management expects Mining segment will improve in FY18E and expects
almost another Rs 800-1,000 Cr worth of mining orders.
In Defence segment, lots of opportunities are coming. Management assures
that this particular sector will take huge jump in near future. In Defence front
order inflow will be double in FY17 as compare to FY16, these would all be in
the vehicle space, the mine systems, the missile systems, the other vehicles,
etc.
1Month
1Year
YTD
Absolute
-11.7
-42.4
-5.7
In Metro segment company is having order book roughly about Rs 2000 Cr
Rel.to Nifty
-4.5
-45.4
-4.2
out of which Rs 1000 Cr will execute in FY17 and rest Rs 1000 Cr will be
executing in FY18E. In FY18E company is having another order worth Rs
2400 Cr. So, total order book in Metro is Rs 3500 Cr in FY18E.

2QFY17 1QFY17
Outlook & Valuation:
4QFY16
Promoter
54.03
54.03
54.03
Public
45.97
45.97
45.97
Others
--
--
--
100
100
100
Total
Company Vs NIFTY
120
115
110
105
100
95
90
85
80
75
70
BEML
NIFTY
Bibha Kashyap
bibha.kashyap@narnolia.com
As the company is having healthy order book worth Rs 6500 cr, so going
forward we expect the company to register decent topline as well as bottom
line. Increased road construction activity, Railway projects and work on
dedicated freight corridors will drive demand growth in FY17E. With respect
to defense verticals the business will be back on track. Company guided Rs
3300 cr topline for FY17E but after seeing 1st and 2nd quarter results we
revised our revenue estimate from Rs 2900 cr to Rs 2500 cr and We expect
decent growth in rest of the two quarters. We have positive view on this stock
in long term but due to below expected sales number this quarter we
maintain our HOLD rating to the stock. We will review target price post
further clarity from management on near term business condition.
Financials
FY13
FY14
FY15
FY16
Rs in Cr
FY17E
Sales
EBITDA
Net Profit
EBIDTA%
P/E
2801
-49
-83
-1.7%
0.0
2904
115
6
4.0%
0.0
2802
70
6
2.5%
0.0
2978
129
53
4.3%
0.0
2521
145
69
5.7%
0.0
12
Order book position:
Trend of Gross margin and EBITDA margin:

Gross Margin %
EBIDTA %
0.75
0.80
0.66
0.70
0.60
0.50
0.40
0.52 0.50 0.13
0.47
0.40 0.43
0.05 0.06 0.37
0.35
0.01 (0.00)
0.30
0.40
0.01
0.37
(0.01)
(0.07)
0.20
0.18
0.47
0.50
0.37
0.02
(0.00)
(0.09)
(0.13)
0.10
-
(0.25)
0.20
0.15
0.10
0.05
(0.05)
(0.10)
(0.15)
(0.20)
(0.25)
(0.30)
Trend of Net sales and PAT:
Net Sales(Cr)
169
155
64
-11
-55
-24

454
-115
346
1009
764
590
577
451
502
780
783
-68
-96
751
-30
676
6
-39
1279
-26
598
1400
1200
1000
800
600
400
200
0
PAT (Cr)
200
150
100
50
0
-50
-100
-150
13
Trend of Employee benefit and Other expenses:

Employee benefit Expence % as Sales
Other expenses % as Sales
60%
52%
50%
40%
38%
41%
25%
30%
39%
32%
31%
24%
19%
28%
25%
18%
16%
20%
10%
32%
39%
36%
24%
15%
15%
14%
0%
10%
13%
18%
16%
12%
13%
10%
11%
Investment Arguments:
The approval for Tatra trucks has come through with delivery commencing from August 2015. The
order backlog of ~Rs11bn-12bn from Tatra is likely to get executed in 18-24 months. which will help
improve profitability of BEMLs defence business for FY16 &FY17.
All the three segments have done well especially on the defence side it is very good. It is very
satisfied and defence for the future is going to be much more exciting because of Make in India
campaign where management is expecting exciting opportunities, which are already up and running.
That should go very well in FY16-FY17.
Coal India, in its commentary, has stated its intent to spend Rs 1500 Cr -2000Cr annually on
machinery procurement including heavy equipment, dumpers, etc segments where BEML is the
market leader.
Key Risks:
Inventory obsolescence
Metro capex cycle recovery
Production Units:
About the company:

BEML Limited is an India-based company engaged in manufacture of rail coaches and
spare parts and mining equipment. Its segment includes Mining & Construction, Rail &
Metro and Defense. The Trading Division deals in non-Company products. The
International Division exports products manufactured by all the three verticals. Under
Mining and Construction business, the Company manufactures and supplies Mining &
Construction equipment such as Bull Dozers, Excavators, Dumpers, Shovels, Loaders
and Motor Graders to various user segments and under Rail & Metro Business, it
manufactures and supplies Rail Coaches, Metro Cars, Steel and Aluminium Wagons
to the rail sector.

14
FY14
1.5
506.8
3.0
200%
RATIOS
FY15
FY16
1.4
12.8
505.8
506.6
1.2
4.7
82%
37%
FY17E
16.5
518.5
4.7
28%
196.6
0.6
1.02%
759.6
2.2
0.11%
68.8
1.7
0.53%
55.5
1.8
0.51%
0%
2%
0%
1%
3%
3%
3%
4%
0.6
122.9
271.6
48.9
0.22
0.6
129.2
250.3
70.8
0.20
0.7
148.1
208.7
50.5
0.17
0.6
150.0
209.5
40.0
0.16
INCOME STATEMENT
FY14
Other Income
64
Total Revenue
2967
COGS
1694
GPM
1
Other Expenses
373
EBITDA
115
EBITDA Margin (%)
4%
Depreciation
54
EBIT
60
Interest
111
PBT
13
Tax
4
Tax Rate (%)
29%
Reported PAT
6
Dividend Paid
12
No. of Shares
4
FY15
2802
60
2862
1564
1
393
70
2%
53
17
71
6
0
-8%
6
5
4
FY16
2978
39
3017
1703
1
373
129
4%
54
75
49
65
11
18%
53
19
4
FY17E
2521
26
2546
868
0
758
145
6%
46
99
0
125
25
20%
69
19
4
EPS
Book Value
DPS
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Net Debt/Equity (x)
BALANCE SHEET
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY14
42
2039
2081
465
441
0
2546
686
135
977
18
389
284
2420
4770
FY15
42
2035
2077
414
178
0
2491
660
150
992
145
543
290
2148
4591
FY16
42
2068
2110
363
147
0
2472
657
59
1208
66
412
317
2157
4331
FY17E
42
2117
2159
345
101
0
2504
694
150
1036
81
276
281
2096
3961
CASH FLOW STATEMENT

FY14
FY15
FY16
FY17E
10
5
65
125
Depreciation
54
53
54
46
Direct Taxes Paid
(26)
12
(15)
(25)
171capital changes
151
201
170
394
548
84
212

(43) including
(41)capital advances
(24)
and(83)
capital wor
(28)
(36)
(30)
(83)
(34)
(31)
(31)
(18)
Interest Paid
(109)
(67)
(45)
0
(12)
(5)
(5)
(19)
(427)
(384)
(134)
(84)
Inc/(Dec) in Cash
(61)
128
(79)
45
78
18
146
66
Closing Balance
18
146
66
112

15
HOLD
IRB Infrastructure Developers Ltd.
Result Update
CMP
186
Target Price
NA
Upside
Market Data
BSE Code
532947
NSE Symbol
IRB
269/177
6,544
384833
7966
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume
Nifty
1Month
3 Month
1Year
Absolute
-23.2
-20.6
-25.3
Rel.to Nifty
-15.7
-12.9
-26.8

1QFY17 4QFY16
Promoters
57%
57%
58%
Public
43%
43%
42%
Company Vs NIFTY
120
IRB
IRB reported 12.3% YoY growth in topline below than our expectation
(Estimate:- Rs. 1517 Cr) on account of muted revenue growth (7% vs 33%
our estimates) of construction segment due to heavy and extended
monsoon. EBITDA margin was improved by 220 bps to 54.9% because of
higher proportion of toll revenue. PAT de-grew by 5% YoY to Rs. 142 Cr as
compared to Rs. 150 Cr in same period last year on account of lower topline
and higher interest outgo.
Current Order book stands at Rs.11394 Cr from recently won projects
1)Gulabpur- Chittorgarh and 2) Udaipur-Guajrat border worth Rs. 3988 Cr,
which provides strong construction revenue visibility going forward. The
company recently started work on Agra- Etawah project, we expect ramp up
in H2FY17 and it has also got appointment date(1st April 2017) for these two
new projects mentioned above. Management has guided 10-12%
construction revenue growth for next 3 years based on current order book.
Demonetization does not have any impact on Revenue
Stock Performance
2QFY17
24-Nov-16
NIFTY
110
100
90
IRBs toll collections during the period of 11 to 24 November remain

suspended due to demonetization of currency. There will be no impact on
revenue. Revenue loss will be compensated by the NHAI and related state
authority by way of adjusting premium and revenue share payment. But
company might require higher working capital. The company does not face
any challenge to perform day to day activity post demonetization of currency.

IRB posted moderate set of numbers in Q2FY17 due to heavy and extended
monsoon. But current order book provides strong construction revenue
visibilities going forward. We expect better construction revenue growth in
H2FY17 based on ramp up of Agra-Etwah project and robust growth in toll
collection. Company will resume its toll collection operations from 24th
November. But considering the current volatile macro economy condition we
recommend HOLD on the stock and we will review our rating in
January once we have more clear view on macro economy.
80
70
In Rs. Cr
60
Financials
FY13
FY14
FY15
FY16
FY17E
50
Sales
EBITDA
Net Profit
EBIDTA%
EV/EBITDA
3687
1633
557
44.3%
5.5
3732
1754
459
47.0%
6.5
3847
2212
543
57.5%
7.9
5130
2661
636
51.9%
7.2
5733
3113
756
54.3%
7.2
40
Sandip Jabuani
16
Concall Highlights :-
IRB is pre-qualified in project worth Rs. 16600 Cr.

The company aims to win 300 km project (including 230 km already won)
NHAI and related State authority will compensate revenue loss by way of adjusting premium and revenue share payment.
Current Toll collection at Agra-Etwah project is 35lakh/day and likely to go up by 45-50% post full completion of the project
IRB has filed DRHP of InvIT and waiting for the Sebis replay and expect to lunch in January
The Company will have to infuse equity of Rs. 1600-1800 Cr over period of two years.
Tax reversal of Rs.15-18 Cr in Q2FY17
Construction revenue will grow at 10-12% for next 3 year based on current order book.
Solapur- Yedeshi and Kaithal Rajasthan project will gets complete by H1FY18
Company has received appointment date for the 1)Gulabpura- Chittorgarh and Udaipur- Gujarat Border project and work
will start from 1st april 2017
About the Comapny :IRB Infrastructure Developers Limited is a road buildoperatetransfer (BOT) operator. The Company's principal activity is the
construction and maintenance of roads. Its business segments include Road Infrastructure Projects, which includes development
and operation of roadways; Real Estate, which includes real estate development, and Others, which includes windmill (sale of
electricity generated by windmill), hospitality and airport infrastructure. Its construction business complements its BOT vertical by
executing engineering, procurement and construction, and operation and management (O&M) aspects of BOT concessions. It has
a portfolio of over 20 Road BOT projects. It has in-house integrated project execution capabilities in both its business verticals,
including construction, and operation and maintenance of highways.
InvIT Structure
IRB will act as Sponsor of the Trust

IRB infrastructure Pvt. Ltd. A wholly owned subsidary of the comapny Will act as Investment Manager of the Turst
17
Order Book
Order book
Book to bill
17
15
12
10
9,746
17,321
11,468
12,116
12,631
12,954
11,587
11,348
11,974
7,795
8,739
11
10
14
12
11,394
12
7,030
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
20
18
16
15
14
12
10
8
6
4
2
-
Comapny has received

appointment date and start work
from 1st April 2017
As % of Order Book
8%
Work on Agra Ethawah project

(Rs.2133 Cr) has started from
August 2016 onwards and we
expect ramp up in H2FY17
13%
Yedeshi Aurangabad
Kaithal Rajasthan Border
6%
16%
2%
2%
Solapur Yedeshi
Sindhudurg Airport
Agra Etawah
Gulabpura -Chittorgarh
18%
18%
Udaipur -Gj Border

O & M Contracts
Goa Kundapur
17%
Revenue Mix
1,200
Construction
BOT Toll
70%
EBITDA M
60%
1,000
56%
800
600
45%
50%
59%
58%
58%
57%
50%
53%
52%
48%
51%
56%
40%
30%
400
755
569
913
601
978
593
808
524
703
476
613
524
516
503
510
483
477
435
606
431
598
320
591
315
20%
690
277
200
50%
10%
0%

18
FY13
16.7
98.0
3.5
21%
RATIOS
FY14
FY15
13.8
15.4
107.1
124.1
5.9
4.7
42%
30%
FY16
18.1
137.4
4.7
26%
6.8
1.2
3.09%
7.5
1.0
5.66%
15.1
1.9
2.00%
12.9
1.7
2.01%
17%
11%
13%
9%
12%
10%
13%
10%
0.3
0.8
51.1
33.8
2.04
0.2
0.5
59.4
39.9
2.64
0.1
0.5
72.6
22.2
2.48
0.1
7.4
54.9
21.7
2.62
INCOME STATEMENT
FY13
Other Income
130
Total Revenue
3817
COGS
1776
GPM
0
Other Expenses
122
EBITDA
1633
EBITDA Margin (%)
44%
Depreciation
442
EBIT
1192
Interest
615
PBT
707
Tax
153
Tax Rate (%)
22%
Reported PAT
557
Dividend Paid
117
No. of Shares
33
FY14
3732
121
3853
1650
0
148
1754
47%
477
1277
756
642
182
28%
459
194
33
FY15
3847
113
3960
1306
0
140
2212
57%
707
1505
931
686
144
21%
543
164
35
FY16
5130
124
5254
2054
0
170
2661
52%
853
1807
1063
868
232
27%
636
164
35
EPS
Book Value
DPS
Valuation(x)
P/E
Price / Book Value
Dividend Yield (%)
RoE
RoCE
Turnover Ratios
Asset Turnover (x)
Net Debt/Equity (x)
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY13
332
2923
3256
6635
1271
33
9890
10425
35
8
1471
341
311
877
13214
FY14
332
3228
3561
9398
897
22
12959
13041
48
6
1501
408
289
879
15712
FY15
351
4009
4361
10804
631
19
15165
36599
80
5
1580
234
219
477
39393
FY16
351
4476
4827
12652
1189
16
17479
39169
78
104
1559
305
169
510
42181
FY13
FY14
FY15
FY16
707
642
686
868
Depreciation
442
477
707
853
Direct Taxes Paid
242
232
216
312
1636
capital changes
1749
2216
2719
1441
1656
1823
2342
0
0
1
0
2518 including
3002capital advances
2311
and
3161
capital wor
(2247)
(2743)
(2295)
(3175)
363
888
794
1140
Interest Paid
613
740
1317
1435
119
194
78
254
748
1274
474
667
Inc/(Dec) in Cash
(57)
186
2
(165)
355
257
443
445
Closing Balance
302
443
445
279

19
BUY
ALLCARGO LOGISTICS
24-Nov-16
Result Update
CMP
165
Target Price
190
215
Upside
15%
Market Data
BSE Code
532749
NSE Symbol
ALLCARGO
221/135
4,132
17784
8033
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume
Nifty
Stock Performance
1Month
3 Month
1 Year
Absolute
-9.6
-16.1
-14.7
Rel.to Nifty
-1.9
-9.2
-16.9

2QFY17
Promoters
Others
1QFY17 4QFY16
70%
30%
70%
30%
70%
30%
Company Vs NIFTY
140
130
120
110
100
90
80
70
60
50
40
ALLCARGO
NIFTY
ALLCARGO reported its Q2FY17 numbers i.e in line with our expectation.
Company posted top line of Rs. 1410 Cr in Q2FY17 as compared to Rs.
1456 Cr in same period last year. Decline of 3% YoY was on account of
lower freight rates and exclusion of Hindustan Cargo, Air Freight/ Freight
Forwarding and Contract logistics business (Transfer to JV Company i.e
ACCI). EBITDA for the Q2FY17 was Rs. 127 Cr as compared to Rs. 135 in
Q2FY16 i.e 6% down YoY. PAT was Rs. 64 Cr vs Rs. 60 Cr, a increase of
7% on account of lower depreciation and interest cost. Recently ALLCARGO
bagged contract to manage and operate CWCs CFS in Mundra Port and this
CFS facility is located adjacent to existing CFS of ALLCARGO. The company
is developing warehouse facility in JNPT port which helps to increase its
market share in CFS segment. We expect MTO segment volume to grow at
current pace. There is no immediate effect of demonetization of currency on
business operation.
Q2FY17 Result Performance : MTO business clocked 8.4% volume growth to 127463 TEUs i.e in line with
our estimate. EBIT was Rs. 50 Cr in Q2FY17 as compare to Rs. 48 Cr in
same period last year.
CFS business maintained total volumes at 69260 TEUs as compare to
69296 TEUs in same period last year. The total revenue for the Q2FY17 was
Rs. 111 Cr vs 106 Cr, a increase of 5% YoY on account of long standing
container and ODC bond cargo.
PE Segment revenue decline by 29% YoY to Rs. 99 Cr due to exit from
lower margin business, sales of assets and transfer of contract logistics
business to ACCI.
Gross margin for the Q2FY17 improved by 50 bps to 32% on account of
higher operating efficiency.

Strong volume growth in MTO segment despite muted global trade growth
and falling freight rates, helped the company to perform better in Q2FY17.
In Q2FY17 gross margin improved by 50 bps on account of operating
efficiency and companys focus on improve operating efficiency by better
use of technology will help to improve EBITDA margin going forward. No
immediate and direct effect of demonetization of currency on companys
business operation but we expect it will slow down economic activities which
will effect ALLCARGO. So, based on the above arguments we maintain
BUY with a reduce target price of Rs. 190 from Rs.215.
In Rs Cr.
Sandip Jabuani
Financials
FY14
FY15
FY16
FY17E
Sales
EBITDA
Net Profit
EBIDTA%
4859
391
149
8.1%
5629
475
240
8.4%
5688
522
287
9.2%
5612
492
224
9.9%
(In Rs. Cr)
20
Concall Update : Operation will start at Kolkata port from FY18

55000 TEUs/month run rate at Kolkata port
Capex for FY 17 :For Kolkata CFS 35 Cr
For Ware house facility at JNPT port is 35 Cr. No Capex required for CWCs CFS
No immediate effect of demonetization of currency on business operation
EBIT/TEU for CFS will be sustainable at current level
22-23% tax rate going forward
About the Company

Allcargo Logistics Limited (Allcargo) is engaged in providing integrated logistics solutions. Allcargo offers logistics services across
multimodal transport operations, inland container depot, container freight station operations, third party logistics operations and
project and engineering solutions. The Company has three segments: Multimodal Transport Operations, which involves non vessel
owning common carrier operations related to less than container load consolidation and full container load forwarding activities;
Container Freight Stations Operations / Inland Container Depot, which is involved in import / export cargo stuffing, de-stuffing,
customs clearance and other related ancillary services, and Project & Engineering Solutions, which provides integrated end-to-end
project, engineering and logistic services through a fleet of owned / rented special equipment to carry over dimensional cargo
(ODC) and over weight cargo (OWC) cargos, as well as project engineering solutions.
Segment Revenue (In Rs. Cr)

MTO
CFS
P&E
1,210
1,183
1,600
1,339
1,400
1,000
1,250
1,102
1,200
1,131
1,235
1,232
1,191
1,096
1,179
1,209
900
800
111
99
110
132
107
128
115
140
112
138
104
141
105
155
106
132
102
127
117
91
78
107
200
84
112
400
84
106
600
2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
EBITDA M
PAT M
12%
10%
8%
9%
9%
7%
8%
9%
8%
4%
4%
4%
4%
10%
5%
5%
9%
9%
5%
5%
10%
9%
7%
6%
4%
9%
5%
4%
4%
4%
2%
0%
1%

21
Business Performance
Realization Growth (YoY)
CFS Volume
-30%
69260
127463
120971
-20%
75118
-10%
112593
116168
117574
113410
104128
107261
108874
101937
94244
91725
76338
-23%
0%
74251
-8.80%
-11%
-16%
40000
20000
-7%
-9%
60000
74251
10%
-1%
77207
-3%
-1% -3%
71123
3%
78272
4%
80000
72302
20%
90000 33%
80000
70000
16.50%
13%
12%
60000
7% 6%
5%
4%
50000
-2%
40000
30000
-14%
-17%
20000
-22%
-24%
10000
0
75398
100000
Realization Growth (YoY)
72930
120000
45275
30%
47467
25%
140000
48350
MTO Volume
40%
30%
20%
10%
0%
-10%
-20%
-30%
* Excluding 2 ICDs Volume

120%
Regional MTO Business Revenue %

100%
80%
60%
40%
20%
0%
6%
37%
3%
5%
5%
5%
4%
35%
32%
29%
30%
2%
21%
23%
18%
2%
13%
18%
CY09
2%
26%
3%
6%
30%
3%
24%
America
3%
14%
CY10
17%
3%
16%
FY12
19%
24%
29%
3%
16%
2%
13%
0%
12%
FY13
FY14
3,000
2,000
1,000
-
3,343
3,260
3,895
3,385
3,000
2,135
Employee Exp
4,251
4,049
4,694
FY15
5,195
4,274
5,475
4,640
5,165
4,000
5,234 5,347
1,000
5,551
5,328
5,710
4,928 5,115
5,043
India
7,000
5,000
5,396
2,000
Africa
CSF EBIT/TEU
6,000
6,000
4,000
Far East
19%
MTO EBIT/TEU
5,000
ANZ
3%
25%
Mediterra
nean
Europe
4,563
4,070
4,072
20%
18%
16%
5,732 14%
12%
10%
8%
6%
4%
2%
0%
15%
14%
16% 16%
Other Exp
15% 15% 15% 16%

15%
7% 7% 6% 6% 6% 6% 7% 6% 6%
17% 17% 17% 17%
9% 9%
7% 6%

22
FY13
Revenue (Net of Excise Duty)
3927
Other Income
66
Total Revenue
3992
COGS
2699
GPM
1
Other Expenses
307
EBITDA
357
EBITDA Margin (%)
9%
Depreciation
147
EBIT
209
Interest
42
PBT
234
Tax
51
Tax Rate (%)
22%
Reported PAT
170
Dividend Paid
22
No. of Shares
13
Share Capital
Reserves
Net Worth
Long term Debt
Short term Debt
Deferred Tax
Net Fixed Assets
Capital WIP
Debtors
Trade payables
Total Provisions
Net Current Assets
Total Assets
FY13
25
1560
1586
383
75
94
1968
1383
12
382
138
313
62
1
2991

INCOME STATEMENT
FY14
FY15
FY16
4859
5629
5688
EPS
37
53
26
Book Value
4896
5681
5714
DPS
3404
3938
3812
1
1
1
Valuation(x)
337
359
428
P/E
391
475
522
Price / Book Value
8%
8%
9%
Dividend Yield (%)
175
157
153
216
318
369
RoE
56
53
42
RoCE
196
317
353
Turnover Ratios
42
70
70
Asset Turnover (x)
21%
22%
20%
149
240
287
22
29
29
13
13
25
Net Debt/Equity (x)
FY14
FY15
FY16
25
25
50
1768
1883
2156
1793
1908
2206
521
358
262
92
117
96
105
110
116
2314
2266
2468
1385
1260
1272
7
14
16
572
648
667
165
174
207
467
571
599
60
63
61
55
157
172
3630
3446
3683
FY13
13.4
125.4
1.8
13%
RATIOS
FY14
FY15
11.8
19.0
141.8
151.4
1.8
2.3
15%
12%
FY16
11.4
87.5
1.2
10%
8.6
0.9
1.52%
13.0
1.1
1.14%
16.6
2.1
0.74%
13.4
1.7
0.76%
11%
11%
8%
9%
13%
14%
13%
15%
1.3
35.5
1.5
29.1
0.24
1.3
1.6
1.5
42.9
42.0
42.8
1.2
1.1
1.1
35.1
37.0
38.4
0.29
0.19
0.12
FY13
FY14
234
196
Depreciation
147
175
Direct Taxes Paid
63
37
390capital changes
389
323
311
FY15
317
157
48
466
430
FY16
353
153
89
529
448
Capital expenditure on fixed 194

assets including
156 capital 47
advances 165
and capital w
(173)
(439)
(3)
(221)
167
404
548
336
Interest Paid
42
56
53
42
7
22
31
64
(150)
135
(396)
(218)
Inc/(Dec) in Cash
0
7
32
9
129
131
160
166
Closing Balance
131
160
166
191

23
Neutral
INDRAPRASTHA GAS LTD.
23-Nov-16
Company Update
CMP
817
Target Price
Upside
Market Data
BSE Code
532514
NSE Symbol
IGL
897/453
11439
42.21
7985
52wk Range H/L

Mkt Capital (Rs Cr)
Av. Volume(,000)
Nifty
3M
12M
Absolute
-5.5
75.1
53.9
Rel.to Nifty
3.5
73.5
44.1
2QFY17
Reported PAT for 2QFY17 is Rs. 144 Cr vs Rs. 102 Cr in the

corresponding quarter of FY16
PNG volumes increased to 1.11 MMSCMD in 2QFY17 ( increment of 13 %

on YoY basis)
1QFY17 4QFY16
45
55
45
55
45
55
100
100
100
Company Vs NIFTY
180
EBITDA for 2QFY17 is Rs. 245 Cr vs Rs. 198 Cr in the corresponding

quarter of the FY16
CNG volumes increased to 3.47 MMSCMD in 2QFY17 ( increment of 12 %

on YoY basis)
Public
Others
Total
Q2FY17_Result Update
EBITDA margin has improved by 480 bps in 2QFY17 to 25.3%
Stock Performance
1M
Promoters
IGL has reported revenue of Rs. 966 Cr in 2QFY17 vs. Rs. 969 Cr in the
corresponding quarter of FY16.Volume has grown in both the CNG and
PNG volume. CNG volume has grown up by 12% in 2QFY17 and PNG
volume has increased by 13% YoY. Volume demand of CNG is expanding
due to addition of new buses, conversion of taxis with all-India permits and
more new PNG connections in households. Managements constant focus
on the increasing the volume may boost the revenue for the longer period of
time. Looking at the future demand of CNG, company is targeting to open
104 CNG filling stations at various locations in Delhi NCR. The company is
also looking to expand its operations in Rewadi.
IGL
NIFTY
170
160
150
Realisation of CNG is Rs. 35.8 per kg in 2QFY17 vs Rs. 37.3 per kg in

2QFY16
IGL is expanding its distribution network through a stake in Central UP Gas

(CUGL), which is engaged in CGD in the cities of Kanpur and Bareilly,
Unnao and Jhansi in Uttar Pradesh where demand of CNG is growing
rapidly. Managements aggressive strategy to expand its footprint beyond
Delhi NCR will open up new opportunities for the company in long run.
Considering recent rally restrict upside potential of the stock. We
recommend buying on declines. At current price of Rs.828, we remain
Neutral.
140
Financials
2012
2013
2014
2015
Rs,Cr
2016
Sales
EBITDA
Net Profit
EPS
P/E
2517
633
306
22
17.3
3367
758
354
25
11.0
3914
782
360
26
11.6
3681
793
438
31
13.4
3686
772
415
30
14.1
130
120
110
100
90
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Dec-15
Nov-15
80

24
Management Speak/ Key take aways From Management Interview

Management expect the growth to be in double digit around 10 percent for the next two quarters also and we will be ending the
year with the double digit growth
IGL expects robust volume growth in near term driven by addition of buses, conversion of taxis with all-India permits and more PNG
coverage in households
Management expect to close the year at a rate of Rs 5.5 per scm
Delhi Development Authority (DDA) has arbitrarily increased the lease rent for our CNG stations so we have represented
to them to review the increase and then we decided to have a provision for this year
Management expect EBITDA may come down going forward in Q3 and Q4 because of the cost pressures and lower
volumes because Q3 and Q4 are normally more subdued than Q1 and Q2
EBITDA margin declined to INR5.9/scm (from INR6.7/scm last quarter) due to higher commission to OMCs for new outlets (90 new
CNG stations)
For the next two half yearly reviews, management is expecting the price of the domestic gas may come down
Company is also looking at expanding the operations in Rewadi.
Financial Performance
Gross Margin %
50%
44%
45%
40%
36%
40%
35%
30%
25%
EBIDTA %
29%
26%
23%
20%
37%
23%
36%
24%
36%
24%
38%
34%
22%
34%
21%
34%
21%
31%
31%
30%
20%
19%
20%
24%
36%
23%
38%
34%
34%
20%
19%
22%
39%
41%
36%
20%
20%
22%
38%
22%
36%
20%
15%
10%
5%
0%
1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
About the Company
Business Segment Overview
Indraprastha Gas Ltd (IGL) is the sole supplier of Compressed Natural Gas (CNG)
and Piped Natural Gas (PNG) in the National Capital Region. The company is a joint
venture between GAIL (India) Ltd and Bharat Petroleum Corporation Ltd. Its unique
business model is a result of various business transfers, strategic modifications and
client acquisitions giving the company an early-bird advantage in the market.The CNG
business, which, involves distribution of CNG to automobiles through gas stations.
Through its PNG business, the company supplies natural gas to homes and
commercial and industrial establishments.The Company has two associates which
also operate as City Gas Distribution companies. One, Central UP Gas Limited
(CUGL), which caters to the cities of Kanpur, Bareilly, Unnao and Jhansi in Uttar
Pradesh and second, Maharashtra Natural Gas Limited (MNGL), which caters to the
city of Pune and nearby areas of Pimpri, Chinchwad, Chakan, Talegaon and
Hinjewadi in the State of Maharashtra

25

INCOME STATEMENT
FY13
FY14
FY15
FY16
Revenue (Net of Excise Duty)3,367
3,914
3,681
3,686
EPS
Other Income
13
21
35
30
Book Value
Total Revenue
3,380
3,935
3,716
3,716
DPS
COGS
2,197
2,629
2,341
2,276
GPM
65%
67%
64%
62%
Valuation(x)
Other Expenses
355
443
481
558
P/E
EBITDA
758
782
793
772
Price / Book Value
EBITDA Margin (%)
23%
20%
22%
21%
Dividend Yield (%)
Depreciation
187
220
149
158
EBIT
571
563
644
614
RoE
Interest
56
44
30
9
RoCE
PBT
528
540
649
635
Turnover Ratios
Tax
174
180
211
219
Asset Turnover (x)
Tax Rate (%)
33%
33%
33%
35%
Reported PAT
354
360
438
415
Dividend Paid
81
90
90
98
No. of Shares
14
14
14
14
Net Debt/Equity (x)
Share Capital
Reserves and surplus
Shareholders' funds
Long term Debt
Total Borrowings
Non Current liabilities
Long term provisions
Short term Provisions
Current liabilities
Total liabilities
Net Fixed Assets
Non Current Investments
Other non Current assets
Current assets
Total Assets
FY13
140
1,353
1,493
303
46
84
1796
2,139
291
179
51
212
98
(210)
2,628
BALANCE SHEET
FY14
FY15
140
140
1,623
1,958
1,763
2,098
288
145
34
96
127
2051
2243
2,158
2,210
262
254
220
235
251
231
184
189
100
116
(49)
(90)
2,852
3,073
FY16
140
2,273
2,413
165
2413
2,305
295
240
454
205
116
15
3,366
FY13
25
107
6
23%
RATIOS
FY14
FY15
26
31
126
150
6
6
25%
21%
FY16
30
172
7
24%
11
3
2%
12
2
2%
13
3
2%
14
2
2%
24%
32%
20%
27%
21%
29%
17%
25%
1.28
19
4
23
0
1.37
20
3
17
0
1.20
23
4
19
0
1.09
26
4
19
-
CASH FLOW STATEMENT

FY13
FY14
FY15
FY16
528
540
649
629
Depreciation
187
220
149
158
Direct Taxes Paid
(153)
(170)
(177)
(188)
765
capital changes
787
800
781
643
648
664
661
Proceeds from sale of Current(372)
investments
(249)
(215)
(241)
(362) including
(300)capital(364)
advances
(225)
and capit
75
149
(145)
(150)
(243)
(173)
Interest Paid
(56)
(45)
(30)
(9)
(81)
(90)
(90)
(101)
(218)
(241)
(327)
(255)
Inc/(Dec) in Cash
63
106
(27)
181
130
193
299
272
Closing Balance
193
299
272
453

26
Narnolia Securities Ltd

201 | 2nd Floor | Marble Arch Building | 236B-AJC Bose Road |
Kolkata-700 020 , Ph : 033-40501500
email: narnolia@narnolia.com, website
: www.narnolia.com
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.

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IEA Report

1st Dec 2016

1st Dec 2016

30th Nov 2016

29th Nov 2016

28th Nov 2016

25th Nov 2016

24th Nov 2016

23th Nov 2016

IEA Edition No.-

Asian Paints Ltd.

Previous Target Price

Change from Previous

52wk Range H/L

Management remained silent on volume growth improvement (which indicates

Q2FY17 Result Update :

Share Holding Pattern-%

Bhabani Prasad Dehury

Double digit volume growth in decorative business in Q2FY17, but, a

Consolidated net profit grew 18.1% to Rs494.76 Cr YoY in Q2FY17, while

Narnolia Securities Ltd,

Brief Highlights Q4FY16 Results :

16.8% (325 Bps)

231 Bps (445 Bps)

50.8% (540 Bps)

Previous Target Price

Change from Previous

52wk Range H/L

Share Holding Pattern-%

KEC reported mix set of numbers in Q2FY17. The company posted

Outlook and Valuation

Efficient working capital management boosted earnings and strengthened

Result Highlights Q2FY17 & H2FY17

Managment / Concall Update

Narnolia Securities Ltd,

Maintain 10% revenue

Finance Cost As % of Sales

Finance cost will be 3%

About the Company

Financials Snap Shot

Cash Flow Statement

Capital expenditure on fixed assets

Narnolia Securities Ltd,

Previous Target Price

Change from Previous

52wk Range H/L

Share Holding Pattern-%

Strong Execution drove Revenue and Profitability

Outlook and Valuation

Going forward, we expect KNR to perform better based on strong execution

Narnolia Securities Ltd,

Concall/ Managment Intreviwe Update :-

Significant experience and Strong track record in timely execution of Projects :-

Narnolia Securities Ltd,

Strong order book gives good Revenue visibility

(In Rs. Cr)

2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17

Walayar BOT peoject

Container Transshipment Terminal. The project road serves as an arterial link to

Current Debt is Rs.309 Cr and Toll collection in Q1FY17 is Rs.9.57 Cr

KNR infuse Rs.90 cr and Rs. 130 Cr

Muzaffarpur - Barauni BOT peoject

Narnolia Securities Ltd,