IEA Report 2nd May 2017.

IEA Report
2th May 2017

BIOCON "Neutral" 2th May 2017
Biocon has discontinued drug Ambraxane from Indian and European markets which impacted 4QFY17s sales. On-going pricing pressure in US
market and rupee appreciation are key concerns for the company going forward. In last Dec. 2016, fire broke out at one of its facilities has
adversely impacted the EBITDA margin of the company by 130bps. Commercial sales of Insulin to US from Malaysian facility has started but we do
not have any clarity on the revenue front in this quarter. We do not expect any sharp improvement in revenue in near term. Currently, the stock is
trading at 4.74x FY17 P/BV. Considering the growth un-certainities in near term, we maintain Neutral rating in this stock.
............................................ ( Page : 2-5)
MARUTI "Neutral" 28th Apr 2017

Successful new launches in the recent past have kept Maruti on the driving seat with the market share of 47%. With the commissioning of Gujarat
facility in the 4QFY17 waiting period for Baleno will reduce going forward. However, we expect that it will ramp up only by the second half of FY18
and till then the company has to incur high depreciation and fixed cost on the plant which may result in negative operating leverage for Maruti. We
expect 120 bps deterioration in RoE from 20.2% in FY17 to 19% in FY19E. Going ahead lower PAT growth compared to previous years gives us a
very little cushion on the valuation front and at the present price level valuation is little stretched. Hence, we change our rating from BUY to
Neutral with the target price of Rs. 6450 . ......................................... ( Page : 6-10)
GODREJCP "HOLD" 27th Apr 2017

Recent commentary by management is very encouraging which indicates better recovery after demonetization in Q4FY17E. GODREJCP is present in
less penetrated segment as compared to other FMCG players such as Hair color and Home Insecticide. It will give it enough room to grow further.
As far as international business in concern, we expect better revenue growth from Indonesian market going forward as company is expanding its
distribution reach and launching new products. GODREJCP has achieved our price target of Rs 1760 on 26 April 2017. As GODREJCP is one of
fastest growing company with stable ROE of ~ 20% and now it is recovering after demonetization, Hence before revising our estimates we need to
go through Q4FY17 result which is due on 9May, 2017. At present we recommend `HOLD on this stock. .................................................. ( Page :
11-15)
S CHAND AND COMPANY LIMITED "AVOID" 26th Apr 2017

S Chand and Company is raising funds to retire its debts in its subsidiaries . The company is being offered at post IPO valuations of 2.3 times P/b
and Return on Equity of 5.5% while its comparable peer Navneet Education Limited is being traded at 5times P/b and has return on Equity of 20%.
We recommend AVOID. .................................................. ( Page : 16-18)
ULTRACEMCO "Neutral" 26th Apr 2017

Major negative came from contraction in EBITDA margin which declined by 186bps YoY led by rise in power and fuel cost. Although managements
tone was bullish and is expecting above than industry growth going forward but we need to see how management maintains margins going
forward. On the other hand, company clocked better volume growth (20% QoQ) in this quarter but it will be too early to draft conclusions based
on that, so we will be watchful about volume growth in upcoming quarters to get more clearer view. Presently company is trading at 4.5x times of
FY18E book value of Rs 950. Considering a slightly stretch valuation we hold Neutral view on this stock with TP of Rs 4260.
................................................... ( Page : 19-22)
RELIANCE "HOLD" 25th Apr 2017

Commissioning of Ethane project and commercialization of Jio has paved a way for long term growth of the company. With the rapid growing
customer base of jio by adding 6 mn customers daily to its network, Jio ha successfully added 100 million customers and it is continuously adding
new customers. Jio can improve the revenue of the company upto a large extent. Growing demand of petro-chemicals products and re-
commissioning of petroleum outlets will further improve the volume of refining segment. Reliance has also added 63 stores across various store
concepts. At the end of the year, Reliance Retail operated 3,616 stores across 702 cities with an area of over 13.5 million square feet which will
improve revenue of organized retail.We expect company to maintain ROE of 13% in FY18. Currently, the stock is trading at 1.89x FY17 P/BV. We
maintain HOLD' with the target price of Rs. 1680. .................................................................. ( Page : 23-27)
Narnolia Securities Ltd IEA Edition No.- 1004

INDUSTRY - BIOTECHNOLOGY
BSE Code - 532523
NSE Code - BIOCON
2-May-17 NIFTY - 9304
Comapany Data Key Highlights of the Report:

CMP 1112
Marketing Authorization application for Bio-similar Trastuzumab,
Target Price 970 pegfilgrastim and insulin Glargine were accepted by European Medical
Previous Target Price 15% agency for review.
Upside Discontinuance of Ambraxane drug, and fire broke down at one of its facility
52wk Range H/L 1188/564 in Dec. 2016 has impacted the revenue of the company in the last quarter.
Mkt Capital (Rs Cr) 22,107 Biocon plans to file Marketing Authorization application for Bio-similar
Av. Volume (,000) 128 Trastuzumab with USFDA in FY18.
RoE declines to 12.7% in FY17

Biocon has made 5 regulatory filings with USFDA in FY17.
Malasiyan faciltity has been Commercialised and revenue will start coming
20.0% from 1QFY18.
18.9%
18.0%
16.0%
15.2%
14.0%
13.7% 13.6%
12.7%
12.0%
11.3%
Financials/Valu FY15 FY16 FY17 FY18E FY19E
10.0% 9.7% ation
Net Sales 3,090 3,347 3,891 5,026 5,964
8.0% EBITDA 564 636 851 1,148 1,363
FY13 FY14 FY15 FY16 FY17 FY18E FY19E
EBIT 343 387 574 604 793
Share Holding patterns % PAT 497 550 612 512 653
4QFY17 3QFY17 2QFY17 EPS (Rs) 25 28 31 26 33
Promoters 60.7 60.7 60.7 EPS growth (%) 20% 11% 11% -16% 27%
Public 37.2 37.2 37.2 ROE (%) 15% 14% 13% 10% 11%
Others 1.8 1.8 1.8 ROCE (%) 8% 6% 8% 8% 9%
Total 100.0 100.0 100.0 BV 3,271 4,034 4,838 5,253 5,782
Stock Performance % P/B (X) 2.9 2.4 4.6 4.2 3.8
1Mn 3Mn 1Yr P/E (x) 20.0 20.0 20.0 20.0 20.0
Absolute (3.7) 8.5 93.5
Rel.to Nifty (5.4) 0.7 76.9 RECENT DEVELOPMENT:
Mylan got a nod for breast cancer tablets -Exemestane tablets. U.S. sales
200
BIOCON NIFTY of approximately $100 million for the 12 months ending Jan. 31, 2017,
180 according to IMS Health
160 US FDA accepts Biocon-Mylan biosimilar application for proposed anti-

cancer bio-similar. The market size of Trastuzumab injection is valued at
140
about $6.5 billion, according to IMS data
120
Biocon has partnered with Japanese drug firm Eisai Pharma to market the
100
latter's anti-ulcer drug rabeprazole in India.Market size for rabeprazole and
rabeprazole-D is roughly Rs 950 crore in India
80
Mylan has inked a settlement pack with Genentech and Roche in relation to
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
patents for cancer drug Herceptin (Trastuzumab).The settlement gives

Mylan global licence to commercialise its Trastuzumab product in various
ADITYA GUPTA markets around the world.
adityagupta@narnolia.com
Please refer to the Disclaimers at the end of this Report
Narnolia Securities Ltd
Quarterly Performance
Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY %
Biopharma(CORE 531 464 501 582 699 32% 20% 1,879 2,246 20%
BIOPHARMA)
India(BRANDED 101 138 137 123 105.5 4% -14% 436 503.5 15%
FORMULATIONS)
CRAMS 316 263 286 317 363 15% 15% 1,061 1,229 16%
Licensing income 23 17 24 79 23 0% -71% 76 143 88%
Net Sales 957 982 946 1,038 931 -3% -10% 3,347 3,891 16%
Other Income 16 41 38 47 43 170% -9% 79 157 98%
COGS 334 357 301 330 336 0% 2% 1,290 1,447 12%
Employee Cost 167 179 180 194 194 16% 0% 610 747 22%
Other Expenses 251 184 224 237 214 -15% -10% 811 846 4%
EBITDA 205 263 240 276 188 -8% -32% 636 851 34%
Depreciation 65 66 68 70 73 12% 3% 249 277 11%
Interest 21 6 7 9 5 -76% -43% 29 26 -11%
PBT 135 232 204 244 153 13% -37% 569 833 46%
Tax 55 55 42 54 10 -81% -81% 142 162 14%
PAT 333 167 147 171 128 -62% -26% 550 612 11%
Margins under pressure

Margin % 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY15 FY16 YoY(+/-)
Gross Margin 65% 64% 68% 68% 64% -0.01 -0.04 30% 33% 0.03
EBITDA Margin 21% 27% 25% 27% 20% -0.01 -0.06 13% 16% 0.02
PAT Margin 35% 17% 16% 17% 14% -0.21 -0.03 7% 8% 0.01
Gross Margin contracted by 100bps YoY and 400bps QoQ due to higher purchase of stock in trade
and cost of material consumed.
EBITDA degrew by 8%YoY to Rs.188 crore. EBITDA Margin also declined by 130bps YoY to 20.1%
on account of higher employee cost.
PAT degrew by 61%YoY to Rs.128 crore. In 4QFY16, there was an exceptional item of Rs. 268 Cr.
which has inflated profit in 4QFY16.
EBITDA( Rs.Crore) EBITDA Margin PAT( Rs.Crore) PAT Margin

400 40%
300 27% 27% 30% 35%
25% 25%
350 35%
250 22% 23% 25%
21% 21% 21%
20% 300 30%
24%
200 20%250 25%
15%200
17% 16% 17% 20%
150 15%
276
263
14%
333
13%
240
150 12% 15%

212
205
188
185
185
100 10%
169
160
202
100 10%
171
167
147
128
126
50 5%
104
50 5%
91
-1%
0 0% 0 0%
-11
-50 -5%

Concall Highlights:
Biocon Malaysian Insulin plant has started commercial sales, but management refrains from giving any
revenue guidance
Marketing Authorization application for Bio-similar Trastuzumab, pegfilgrastim and insulin Glargine were
accepted by European Medical agency for review.
Biocon has received approval for Rosuvastatin Calcium from USFDA. This is the first ANDA approval for
Biocon. This will further strengthen the companys API business.
Discontinuance of Ambraxane drug, and fire broke down at one of its facility in Dec. 2016 has impacted
the revenue of the company in the last quarter.
Capex guidance for FY18 is Rs. 700 Cr. This does not include capex planned by Syngene.
Biocon Insulin Disposable pens were highly appreciated in the International markets.
R&D exp. for 4QFY17 is Rs. 98 Cr. Out of which Rs. 64 Cr is reflected in P&L A/C. Guidance for FY18 is
12-15% of its revenue.
Biocon has completed ROW phase-3 clinical trial of its Bio-similar Bevacizumab for metastatic colorectal
cancer.
Plans to file Marketing Authorization Application with USFDA for insulin Glargine very soon.
Biocon has made 5 regulatory filings with USFDA in FY17.
Syngene has continued to expand its manufacturing facility by setting up new API facility in Mangalore
and new Biologics facility in Bangalore.
Investment Arguments:
Delay in Copaxone approval: Biocon has received queries from the USFDA relating to its ANDA for
generic Copaxone 20 mg and 40mg. The company is yet to respond to these queries
Discontinuance of Ambraxane: Biocon has discontinued Ambraxane drug from its portfolio which is a major
set back for the company.
Waiting for EMA Nod:Marketing Authorization application for Bio-similar Trastuzumab, pegfilgrastim
and insulin Glargine were accepted by European Medical agency for review. Company is still waiting for
approval which usually takes 12-18 months.
Commercialization of Malaysian facility : The facility manufactures the Drug Substance for Biocons
range of rh-insulin and insulin analogs as well as Drug Products in vials, cartridges and devices. This
facility supplies drug to the US market.This facility has been set up at an investment of over USD 250
million
View & Valuation
Biocon has discontinued drug Ambraxane from Indian and European markets which impacted 4QFY17s
sales. On-going pricing pressure in US market and rupee appreciation are key concerns for the company
going forward. In last Dec. 2016, fire broke out at one of its facilities has adversely impacted the EBITDA
margin of the company by 130bps. Commercial sales of Insulin to US from Malaysian facility has started
but we do not have any clarity on the revenue front in this quarter. We do not expect any sharp
improvement in revenue in near term. Currently, the stock is trading at 4.74x FY17 P/BV. Considering
the growth un-certainities in near term, we maintain Neutral rating in this stock.

Financials Snap Shot
Income Statement Rs in Crores Curr Assets 3,971 4,048 4,880 5,832
Y/E March FY16 FY17E FY18E FY19E Creditors 610 740 916 1,086
Revenue from Operation 3,347 3,891 5,026 5,964 Provisons 67 83 92 103
Change (%) 8% 16% 29% 19% Other Curr Liab 316 366 475 564
EBITDA 636 851 1,148 1,363 Curr Liabilities 1,271 1,581 1,876 2,146
Change (%) 13% 34% 35% 19% Net Curr Assets 2,700 2,467 3,004 3,687
Margin (%) 19% 22% 23% 23% Total Assets 8,458 9,394 10,478 11,578
Depr & Amor. 249 277 544 570
EBIT 387 574 604 793 Cash Flow Statement in Rs Crores
Int. & other fin. Cost 29 26 30 33 Y/E March FY16 FY17E FY18E FY19E
Other Income 79 157 104 105 PBT 1,227 833 678 864
EBT 569 833 678 864 (inc)/Dec in Working Capital (45) (186) (13) (100)
Exp Item 161 - - - Non Cash Op Exp 242 277 544 570
Tax 142 162 166 211 Int Paid (+) 10 26 30 33
Minority Int & P/L share of Ass. (59) (76) - - Tax Paid (247) (162) (166) (211)
Reported PAT 550 612 512 653 others (652) 26 30 33
Adjusted PAT 430 612 512 653 CF from Op. Activities 526 881 1,074 1,156
Change (%) 11% 11% -16% 27% (inc)/Dec in FA & CWIP (811) (754) (796) (718)
Margin(%) 16% 16% 10% 11% Free Cashflow (284) 127 277 438
(Pur)/Sale of Inv (197) - - -
Balance Sheet Rs in Crores others 495 - - -
Y/E March FY16 FY17E FY18E FY19E CF from Inv. Activities (954) (754) (796) (718)
Share Capital 100 100 100 100 inc/(dec) in NW - - - -
Reserves 3,934 4,738 5,153 5,682 inc/(dec) in Debt 1,346 (262) 322 250
Networth 4,034 4,838 5,253 5,782 Int. Paid 10 26 30 33
Debt 2467.3 2,205.4 2,527.0 2,777.0 Div Paid (inc tax) 20 - - -
Other Non Cur Liab 371 352 352 352 others (262) (142) (127) (157)
Total Capital Employed 6,501 7,043 7,780 8,559 CF from Fin. Activities 1,087 (404) 194 93
Net Fixed Assets (incl CWIP) 3,961 4,438 4,690 4,837 Inc(Dec) in Cash 659 (276) 472 531
Non Cur Investments - 146 146 146 Add: Opening Balance 463 761 710 810
Other Non Cur Asst 229 278 278 278 Closing Balance 1,127 485 1,182 1,341
Goodwill 26 26 26 26
Investment in associates & joint ventures26 42 42 42 Key Ratios
Derivative assets 61 109 109 109 FY16 FY17 FY18E FY19E
Other financial assets 26 20 20 20 ROE 14% 13% 10% 11%
Income tax assets 85 90 90 90 ROCE 6% 8% 8% 9%
Non Curr Assets 4,487 5,347 5,598 5,746 Asset Turnover 0.4 0.4 0.5 0.5
Current investments 875 1,065 1,065 1,065 Debtor Days 78 78 78 78
Inventories 542 635 814 966 Inv Days 59 59 59 59
Trade receivables 715 883 1,073 1,273 Payable Days 66 66 66 66
Cash and bank balances 761 710 810 815 Int Coverage 13.21 22.08 19.91 23.79
Other bank balance 777 334 759 1,336 P/E 18 36 43 34
Derivative assets 51 106 106 106 Price / Book Value 2.4 4.6 4.2 3.8
Other financial assets 184 155 155 155 EV/EBITDA 17 28 21 18
Other current assets 65 159 98 116 FCF per Share (14) 6 14 22
Div Yield 1.0% 0.5% 0.4% 0.5%

INDUSTRY - AUTOMOBILE
BSE Code - 532500
NSE Code - MARUTI
28-Apr-17 NIFTY - 9342
Comapany Data Key Highlights of the Report:

CMP 6371
Higher fixed cost and depreciation on Gujarat plant will lead to further
Target Price 6450 deteriorationin the margins because of gradual ramp up in the volumes.
Previous Target Price EBITDA margin contracted by 300bps in last 3 quarters.
Upside 1% Continued support from higher other income has helped company to post
52wk Range H/L 6444/3730 over 9% PAT margin.
Mkt Capital (Rs Cr) 192,460 We expect 120 bps deterioration in RoE in FY19E from 20.2% in FY17.
Av. Volume (,000) 39 Going ahead lower PAT growth compared to previous period gives us very
little cushion on the valuation front and at the present price level valuation
RoE to decline by 120bps
is little stretched. Hence, we change our rating from BUY to Neutral with
25% the target price of Rs. 6450 .
20%
19% 19%
20% 18%
16%
15% 13% 13%
10%
5%
Financials/Valu FY15 FY16 FY17 FY18E FY19E
ation
Net Sales 50,801 57,589 68,085 71,496 79,796
0%
EBITDA 6,844 8,768 10,358 10,848 12,231
EBIT 4,329 5,947 7,754 7,878 9,621
Share Holding patterns % PAT 3,807 5,377 7,511 7,449 9,188
4QFY17 3QFY17 2QFY17 EPS (Rs) 126 178 249 247 304
Promoters 56.2 56.2 56.2 EPS growth (%) 33% 41% 40% -1% 23%
Public 43.8 43.8 43.8 ROE (%) 16% 19% 20% 18% 19%
Total 100.0 100.0 100.0 ROCE (%) 18% 21% 21% 19% 20%
BV 805 919 1,227 1,384 1,598
1Mn 3Mn 1Yr P/E (x) 29.3 20.9 25.6 25.8 20.9
Absolute 6.6 7.6 64.7
Rel.to Nifty 4.0 (0.5) 47.3 RECENT DEVELOPMENT: Commencement of Gujarat Plant
170
MARUTI NIFTY Gujarat plant has started production of first phase from February 2017 with
160 total capacity of 250000 units per annum and initially, it will produce 20,000
150 units per month.
140 Suzuki Motor Corporation had plans to spent around Rs.8500 crore on the

130 Gujarat plant. The plant will become operational in three phases.
120 Suzuki Motor Corporation will sell the production on cost to Maruti once its

110 gets completed.
100
Baleno will be first model to be produced and later on depending on the
90
demand scenario other models can also be produced from same plateform.
80
The plant will take care of new models and exports. It will also reduce the

Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
logistics cost of Maruti.
NAVEEN KUMAR DUBEY

Naveen.dubey@narnolia.com
Higher other Total Volumes ('000) 360 348 418 387 414 15% 7% 1,429 1,568 10%
income Realization(Rs./ car) 424372.8 428400.1 426381.8 435500.5 442420 4% 2% 402932.2 434062.5 8%
supporting Net Sales 15,294 14,927 17,843 16,865 18,333 20% 9% 57,589 68,085 18%
PAT Other Income 537 483 813 592 445 -17% -25% 1,481 2,290 55%
COGS 10,095 10,125 12,074 11,674 12,767 26% 9% 38,706 46,742 21%
Employee Cost 603 579 519 617 616 2% 0% 2,000 2,360 18%
Other Expenses 2,258 2,007 2,212 2,085 2,402 6% 15% 8,054 8,728 8%
EBITDA 2,339 2,216 3,037 2,489 2,549 9% 2% 8,768 10,358 18%
Depreciation 761 639 630 635 701 -8% 10% 2,822 2,604 -8%
Interest 20 18 20 29 23 13% -21% 8 9 9%
PBT 2,095 2,042 3,200 2,417 2,270 8% -6% 7,419 10,035 35%
Tax 557 556 802 673 573 3% -15% 2,087 2,616 25%
PAT 1,538 1,486 2,398 1,745 1,709 11% -2% 5,451 7,591 39%
Results in-line, posted strong double digit revenue growth
Maruti reported results in line with our estimates. Net sales stood at Rs.18333 crore in 4QFY17 a
Utility Vehicles growth of 20% over same quarter previous year. This was driven by 15% volume growth and 4.5%
volume grew realization growth YoY.
by 72% Domestic volumes grew by 15%YoY to 382618 units during 4QFY17. Compact segment saw a
growth of 21% and utility vehicle segment grew by 72% YoY during the quarter. Fast growing UV and
Compact segment demand is driven by Vitara Brezza and Baleno. These two models enjoys a waiting
period of 5 and 7 months waiting period respectively.
Exports volumes have seen growth of 18%YoY backed by exposure in the new geographies and
increase in the Baleno volumes exported to Japan.
Realization improved by 4.6%YoY to Rs.442000 per car on account of better product mix and price
increases taken during the quarter.
Royalty rate for the quarter stood at Rs.948 crore.
Volume (in No.) Growth YoY Realization (Rs./car) Realization Growth (QoQ)
450,000 18% 20% 450,000 7%

17% 16%
400,000 14% 18% 440,000 6%
15% 430,000
350,000 10% 16%
13% 12% 420,000 2% 5%
300,000 14% 6%
410,000 0% 0% 2% 0% 4%
12% 1%
250,000 400,000
7% 2% 10% 2% 1% 3%
200,000 390,000 2% 1% 2%
4% 3% 8% 380,000 2%
150,000 6% 370,000
401,227
424,373
428,400
426,382
435,500
379,138
382,216
388,243
392,973
393,313
392,013
1%
299,894
323,911
346,712
341,329
353,335
360,402
348,443
418,470
387,251
321,898
374,182
414,389
442420
100,000 4% 360,000
50,000 2% 350,000 0%
- 0% 340,000 -1%

Higher Other income supported PAT
Gross Margin 34% 32% 32% 31% 30% -0.04 0.00 33% 31% -0.01
EBITDA Margin 15% 15% 17% 15% 14% -0.01 -0.01 15% 15% 0.00
PAT Margin 10% 10% 13% 10% 9% -0.01 -0.01 9% 11% 0.02
Gross Margin contracted by 360bps YoY and 40bps QoQ due to increasing commodity prices and
higher discounts on the mini segment cars during the quarter.
EBITDA Margin also declined by 130bps YoY to 13.9% on account of higher marketing and
promotional expenses. New launches and Ciaz movement to Nexa also led to increase in the other
expenses.
PAT grew by 15.8%YoY to Rs.1709 crore on account of higher other income. PAT margin declined by
40bps YoY and 100bps QoQ in 4QFY17.
EBITDA (Rs. Crore) EBITDA Margin PAT (Rs. Crore) PAT Margin
17%
3,500 16% 16% 16% 18% 3,000 16%
15% 15% 15% 13%
3,000
14% 14% 16% 14%
12% 13%
2,500
12% 14% 11% 10% 12%
2,500 10% 10%
2,000 9% 9%
12% 9%
10%
8%
2,000 10% 7% 7%
1,500 6% 8%
1,500 8%
6%
6% 1,000
1,000
1,284
1,193
1,497
1,183
1,538
1,486
2,398
1,745
1,709
4%
4%
762
863
802
500
1,328
1,521
2,164
2,189
2,245
2,339
2,216
2,489
2,549
1,593
2,145
3,037
500 2%
2%
- 0% - 0%
Concall Highlights:
Confident of double digit growth in next fiscal.
Confident of The management do not see any kind of slow down in demand for next financial year.
double digit Exports Revenue in FY17 stood at Rs. 6000 crore.
volume growth in The company will maintain its market share going forward.
domestic market. Capex plan-Rs.4500 crore; large chunk of it would be for new models and rest is for R&D expenses
and maintenance of old plants.
Gujarat plant started production in 4QFY17 and initially, it will produce 20,000 units per month.
Management expects that the industry is going to benefit hugely from GST.
Maruti have been working with its suppliers and dealers to make sure that they are absolutely ready
for GST.
The company has asked its vendors to work with their tier II and tier III suppliers to make sure that
they also become GST compliant by July 1.
There is no improvement in the sales from government employees.
Export outlook Tax rate will be same as FY17
subdued in Exports outlook remain subdued because of dollar avaiability issue in African countries and change in
FY18. the duty structure in Sri-Lanka which was bigger market for Maruti.
Fleet segment is 6% of overall sales for Maruti.

Higher fixed cost and depreciation on Gujarat Plant- Gujarat plant has already started production
and it will take atleast 6-9 months to fully ramp up. Till the time plant gets ramp up the company has to
incur high fixed cost and depreciation on the plant. Thus the company can get the benefit of operating
leverage from FY19 only.
Increasing Annual Budget on Old Plants- Plants and machineries at Gurugram and Manesar plants
more than 25 years older so the maintenance cost of these plants are high and the manegement has
stated that the capex would be 800 crore for FY18 but it may go up going ahead.
International market to remain subdued- Maruti is facing challenges in establishing its footprint in
the exports. Africa market is facing dollar availability issue from last one and half years and Another big
market for Maruti was Sri-Lanka where the government has changed the duty structure. Japan and
Europe are the two markets where Maruti is exporting significant volumes.
New Launches by rivals in the premium segment- Maruti has taken the benefit of selling preimium
segment cars as a market leader in the Indian market but going forward competitors like Tata Motors,
Honda and Ford will share the pie with Maruti. These companies have been started spending huge
amount on R&D to take advantage of future demand.
Reducing dependency on Yen to improve profitability- Maruti is also aggressively working towards
bringing down the import content in its cars from an average 16% at the end of FY16 to 10% as part of
its vision 2.0 plan. Currently about 14 percent of imports are yen denominated. Management expects
to bring it down to 5 percent and typically, 1% movement in yen leads to around 1% change in the
operating profit of Maruti. The company also have rupee denominated Royalty contracts with the
parent Suzuki Motors for new models.
Mix changes towards Utility Vehicles Capacity and Utilization Trend

Mini Compact Super Compact Mid size Total Capacity(in units) Utilization Trend
Utility Vehicles Vans Export 2000000 120%
1800000 93%
97% 95%
120% 90% 90% 100%
1600000 86%
76%
100% 8% 7% 7% 8%
1400000 80%
10% 9% 8%
10% 10% 10% 10% 10% 10% 9% 10% 1200000
80% 5% 6% 7% 8% 11% 13% 13% 13%
4% 3% 4% 4% 0% 1000000 60%
4% 4% 4% 4%
60% 800000
38% 38% 38% 37% 40%
38% 35% 37% 39% 600000
40%
1260000
1260000
1510000
1510000
1510000
1650000
1760000
400000 20%
20% 31% 31% 30% 30% 27% 27% 27% 25% 200000
0% 0 0%
View & Valuation

Successful new launches in the recent past have kept Maruti on the driving seat with the market
share of 47%. With the commissioning of Gujarat facility in the 4QFY17 waiting period for Baleno will
reduce going forward. However, we expect that it will ramp up only by the second half of FY18 and
till then the company has to incur high depreciation and fixed cost on the plant which may result in
negative operating leverage for Maruti. We expect 120 bps deterioration in RoE from 20.2% in FY17
to 19% in FY19E. Going ahead lower PAT growth compared to previous years gives us a very little
cushion on the valuation front and at the present price level valuation is little stretched. Hence, we
change our rating from BUY to Neutral with the target price of Rs. 6450 .

Income Statement Rs in Crores Key Ratios
Y/E March FY16 FY17 FY18E FY19E Y/E March FY16 FY17 FY18E FY19E
Revenue from Operation 57,589 68,085 71,496 79,796 ROE 19% 20% 18% 19%
Change (%) 13% 18% 24% 17% ROCE 21% 21% 19% 20%
Other Operating Income Asset Turnover 1.4 1.3 1.3 1.3
EBITDA 8,768 10,358 10,848 12,231 Debtor Days 8.79 6.45 6.45 6.45
Change (%) 28% 18% 24% 18% Inventory Days 20.3 17.5 17.5 17.5
Margin (%) 15% 15% 15% 15% Payable Days 45 45 45 45
Dep & Amortization 2,822 2,604 2,970 2,610 Interest Coverage 0.0 0.0 0.0 0.0
EBIT 5,947 7,754 7,878 9,621 P/E 21 26 26 21
Interest & other finance cost 82 89 156 166 Price / Book Value 4.0 5.2 4.6 4.0
Other Income 1,481 2,290 2,293 2,863 EV/EBITDA 13 19 18 16
EBT 7,345 9,954 10,016 12,318 FCF per Share 1,265 2,517 2,937 2,896
Exceptional Item - - - - Dividend Yield 0.9% 1.2% 1.2% 1.2%
Tax 2,087 2,616 2,739 3,303
Minority Int & P/L share of Ass. 119 173 173 173 Assumptions
Reported PAT 5,377 7,511 7,449 9,188 Y/E March FY16 FY17 FY18E FY19E
Adjusted PAT 5,377 7,511 7,449 9,188 Volume ('000) 1,429 1,569 1,724 1,886
Change (%) 41% 40% 39% 22% Volume Growth 11% 10% 10% 9%
Margin(%) 9% 11% 10% 12% Realization(Rs./vehicle) 402,932 434,062 414,710 423,094
Realization Growth 3% 8% -4% 2%
Capex(Rs crore) 3,249 3,500 2,000 2,000
Balance Sheet Rs in Crores Cash Flow Statement Rs in Crores

Y/E March FY16 FY17 FY18E FY19E Y/E March FY16 FY17E FY18E FY19E
Share Capital 151 151 151 151 PBT 6,630 9,954 10,016 12,318
Reserves 27,598 36,924 41,647 48,108 (inc)/Dec in Working Capital 9,089 14,348 11,264 15,267
Networth 27,749 37,075 41,798 48,259 Non Cash Op Exp 2,867 2,604 2,970 2,610
Debt 237.8 483.6 484.0 484.0 Interest Paid (+) 94 89 156 166
Other Non Current Liab 900 1,633 1,085 1,085 Tax Paid (1,948) (2,616) (2,739) (3,303)
Total Capital Employed 27,987 37,559 42,282 48,743 others 941 358 (108) 926
Net Fixed Assets (incl CWIP) 13,989 14,563 13,370 12,442 CF from Op. Activities 8,584 11,917 8,243 12,717
Non Current Investments 17,512 26,972 28,950 35,398 (inc)/Dec in FA & CWIP (2,424) (3,178) (1,777) (1,682)
Other Non Current Assets 9 1,603 1,862 1,862 Free Cashflow 6,160 8,739 6,467 11,035
Non Current Assets 32,866 43,162 44,220 49,740 (Pur)/Sale of Investment (4,785) (1,304) (1,551) (1,691)
Inventory 3,200 3,264 3,427 3,825 others (110) (8,095) (1,978) (6,448)
Debtors 1,387 1,203 1,263 1,410 CF from Inv. Activities (7,319) (9,399) (5,306) (9,821)
Cash & Bank 77 24 79 83 inc/(dec) in NW
Other Current Assets 270 1,541 1,583 1,583 inc/(dec) in Debt (226) 246 0 -
Current Assets 7,404 8,798 10,343 12,582 Interest Paid (104) (89) (156) (166)
Creditors 7,127 8,369 8,788 9,809 Dividend Paid (inc tax) (909) (2,727) (2,727) (2,727)
Provisions 2,137 472 491 546 others
Other Current Liabilities 2,408 1,828 1,919 2,142 CF from Fin. Activities (1,239) (2,570) (2,882) (2,892)
Curr Liabilities 11,369 12,753 11,180 12,478 Inc(Dec) in Cash 26 (53) 55 4
Net Current Assets (3,965) (3,955) (838) 104 Add: Opening Balance 43 77 24 79
Total Assets 40,270 51,961 54,563 62,322 Closing Balance 69 24 79 83

INDUSTRY - Con. Staples
BSE Code - 532424
NSE Code - GODREJCP
27-Apr-17 NIFTY - 9352
Company Data Key Highlights of the Report:

CMP 1725 GODREJCP is one of the fasted growing company in our FMCG universe
Target Price HOLD
with 28% CAGR revenue growth and 22% PAT growth in last 6 years.
Previous Target Price GODREJCP is present in less penetrated segment as compared to other
Upside FMCG players such as hair color.It will give it enough room to grow further.
52wk Range H/L 1771/1286 Recent commentary by management is very encouraging which indicates
Mkt Capital (Rs Cr) 58,766 better recovery after demonetization in Q4FY17E.
Av. Volume (,000) 165 GODREJCP has achieved our price target of Rs 1760 on 26 April 2017. As
it is one of fastest growing company with stable ROE of ~ 20% and now it is
RoE & ROCE recovering after demonetization, Hence before revising our estimates we
need to go through Q4FY17 result of it which is due on 9May, 2017. At
ROE ROCE
present we recommend `HOLD on this stock.
25% 22%
21% 21%
20% 19%
20%
20% 20% 21%
19%
15% 18%
10%
Financials/Valu FY15 FY16 FY17E FY18E FY19E
5%
ation
Net Sales 8,276 8,968 9,523 10,592 11,853
FY15 FY16 FY17E FY18E FY19E EBITDA 1,365 1,639 1,857 2,050 2,235
EBIT 1,275 1,536 1,714 1,886 2,075
Share Holding patterns % PAT 907 1,119 1,251 1,413 1,590
3QFY17 2QFY17 1QFY17 EPS (Rs) 27 33 37 41 47
Promoters 63.3 63.3 63.3 EPS growth (%) 19% 23% 12% 13% 13%
Public 36.7 36.7 36.7 ROE (%) 21% 22% 21% 20% 19%
Total 100.0 100.0 100.0 ROCE (%) 20% 20% 18% 19% 21%
BV 127 150 177 210 246
1Mn 3Mn 1Yr P/E (x) 30.2 44.3 44.6 39.5 35.1
Absolute 3.6 11.9 26.2
Rel.to Nifty 0.9 3.2 7.8 RESULT PREVIEW:
Overall revenue is expected to grow by 9%YoY to Rs 2473 cr whereas PAT

140 GODREJCP NIFTY will remain to Rs 352.
130
We expect 1% overall volume growth and 3.5% realization growth for
120
GODREJCP in Q4FY17.
110 We expect deterioration in gross margin by 14 bps YoY and 46 bps QoQ in

100 Q4FY17E. Gross margin is expected to remain 57% in Q4FY17E.
EBITDA margin will remain 19.9% in Q4FY17E, an improvement of 6 bps
90
YoY led by better cost management.
80
PAT margin is expected to improve by 55 bps YoY to 14.2%on the back of

lower Tax out go in Q4FY17E.
RAJEEV ANAND
rajeev.anand@narnolia.com
Net Sales 2,286 2,269 7
2,123 2,439 2,486 9% 2% 8,276 8,968 8%
Other Income 17 14 14 17 19 10% 13% 92 67 -27%
COGS 992 973 982 1,059 1,057 7% 0% 3,842 3,846 0%
Ad & P Expenses 172 215 168 203 192 12% -6%
Employee Cost 236 246 249 241 256 8% 6% 777 960 24%
Other Expenses 345 386 343 391 381 10% -3% 2,293 2,523 10%
EBITDA 455 449 381 466 517 14% 11% 1,365 1,639 20%
Depreciation 26 29 33 36 36 41% 1% 91 103 14%
Interest 30 24 33 35 40 34% 13% 100 100 0%
PBT 427 410 330 412 447 5% 9% 1,266 1,503 19%
Tax 94 98 75 91 99 4% 9% 272 317 16%
PAT 368 310 244 318 352 -4% 11% 907 1,119 23%
International Better revenue growth led by robust international business performance

business grew
by 19% YoY.
Revenue for Q3FY17 grew by 9% YoY to Rs 2486 cr led by 19% YoY growth in the international
business.
Africa business including Strength of Nature grew by strong 54% in constant currency term.
Indonesian business which contributes approx. 17% of total revenue remained flat while Latin
America and Europe grew by 24% and 16% in Constant currency terms in this quarter.
Domestic sales remained flat YoY due to demonetization and domestic volume declined by 3% YoY.
Gross margin improved by 88 bps YoY to 57.5% supported by lower input prices.
EBITDA for this quarter grew by 14% YoY to Rs 517 cr. EBITDA margin improved by 91
bps YoY 20.8%.
PAT declined by 4% YoY to Rs 352 cr and PAT margin contracted by 194 bps in Q3FY17.
3000 400
Sales(in cr) 368 PAT(in cr) International Business Revenue(in cr.)
352350
2500 1400
310 318
300
1200
2000 264 266
244 250
235 1000
222
1500 200 800
143 150 600

1000
117 400
100
1018
1078
1120
1029
1013
1028
1086
1220
500 200
920
910
889
50
1889
2060
2236
2092
1988
2197
2286
2269
2123
2439
2486
0
0 0

Gross Margin 56.6% 57.1% 53.8% 56.6% 57.5% 0.9% 0.9% 53.6% 57.1% 3.5%
EBITDA Margin 19.9% 19.8% 17.9% 19.1% 20.8% 0.9% 1.7% 16.5% 18.3% 1.8%
PAT Margin 16.1% 13.7% 11.5% 13.0% 14.2% -1.9% 1.1% 11.0% 12.5% 1.5%
Gross margin improved by 88 bps YoY to 57.5% supported by lower input prices.
EBITDA grew by 14% YoY to Rs 517 cr in Q3FY17.EBITDA margin improved by 91 bps YoY to 20.8%
on the back of lower COG and employee cost.
PAT de-grew by 4% YoY to Rs 352 cr. PAT margin for this quarter remained 14.2% ,declined by 194 bps
YoY.
Domestic Soap Revenue growth YoY Segments Penetration
Domestic Soap Revenue growth YoY Penetration
20% 120%
15% 100%
15% 13% 13%
100%
11%
10% 80%
5% 2%
3%
2%
60% 48%
1% 38%
40%
0%
-6% -6% 20%
-5%
-10%
0%
-10%
Hair colour Household Soap
-15% Insecticides(HI)
Concall Highlights(Q3FY17):
Indonesian business: Non HI (Home Insecticide) portfolio performed better. Improved market share in HI
business. Management is hopeful for better growth from Indonesia next year.
The management is Confident to outpace industry growth going forward(domestic market).
Management is confident of EBITDA growth ahead of the sales growth.
After demonetization, recovery is much faster than what was expected. It will be back to normal in couple
Took price of month.
hike of 2% in Ad&P Expenses will be in the range of 11%.
domestic Going forward, the company will maintain innovation, launch new products, intensify introduction on Lower
soap Unit Pack(LUP), expand direct reach and work for brand building.
business. Price hike of 2% taken in the domestic soaps business in 3QFY17.Gained market share in Cinthol.
Scope of Margin improvement in International Market: for Indonesia still chance of some margin expansion,
LA(Latin America) scope of more margin expansion and for African business potential of significant margin
improvement in next 3-5 years.
SON supply issue will be short term issue. The company will localize its factory there in CY2017.Capex in
Africa will be very low.
MT(Modern Trade) grew by 33% in this quarter.
Margin expansion: Gross margin will not as good as this quarter going forwards.

Innovation and new product launches: The Company gets 25% to 40% of sales growth from
launch of new products historically. Going forward, the company will maintain innovation, launch new
products, intensify introduction on Lower Unit Pack (LUP) which will deliver better growth going
forward.
Lower penetration gives opportunity: GODREJCP is present in less penetrated segment as

compared to other FMCG players like Hair Colour(38%) and HI(48%). It will give it enough room to
grow further.
Relatively less impacted by Patanjali: If we see our FMCG basket, GODREJCP has minimum
overlap of products with Patanjali than any other players. Hence we expect very less impact on the
volume of GODREJCP due to expansion of Patanjali.
Expectation of better revenue from Indonesian market: Indonesian market contributes approx.
17% of companys revenue. We expect it to improve going forward as company has plans to launch
several hair care and personal care products in Indonesian market in next 6-12 months which will
improve companys volume going forward. Secondly company is planning to ramp up its distribution
reach to double in next 3-5 year which will translate into better volume growth from Indonesia going
forward.
African business (Potential growth driver): African business grew by 19% YoY in constant
currency (CC) terms and 54%YoY including Strength of Nature in Q3FY17. We expect similar growth
in Q4FY17.Although African business is facing some currency headwinds but by localizing production
facility and increasing prices company is expected to counter it.Going forward management sees
continuous margin improvement from African business in next 3-5 years.
Indonesian Market Constant Currency(CC) growth Africa Constant Currency(CC) growth

Indonesian Market (CC) growth YoY Africa (CC) growth YoY
75%
25% 80%
70%
21%
20% 54%
19% 60% 52%
15% 15%
50%
36%
13% 40% 32% 33%
26%
10% 30% 23%
8% 15% 16%
7% 20% 12%
6%
5%
3% 3% 10%
0% 0% 0%
-2%
-5%
View & Valuation

Recent commentary by management is very encouraging which indicates better recovery after
demonetization in Q4FY17E. GODREJCP is present in less penetrated segment as compared to
other FMCG players such as Hair color and Home Insecticide. It will give it enough room to grow
further. As far as international business in concern, we expect better revenue growth from Indonesian
market going forward as company is expanding its distribution reach and launching new products.
GODREJCP has achieved our price target of Rs 1760 on 26 April 2017. As GODREJCP is one of
fastest growing company with stable ROE of ~ 20% and now it is recovering after demonetization,
Hence before revising our estimates we need to go through Q4FY17 result which is due on 9May,
2017. At present we recommend `HOLD on this stock.

Y/E March FY16 FY17E FY18E FY19E Y/E March FY16 FY17E FY18E FY19E
Change (%) 8% 6% 11% 12% ROCE 20% 18% 19% 21%
Other Operating Income Asset Turnover 0.9 0.8 0.8 0.9
EBITDA 1,639 1,857 2,050 2,235 Debtor Days 45.50 45.50 45.50 45.50
Change (%) 20% 13% 10% 9% Inventory Days 53.2 53.2 53.2 53.2
Margin (%) 18% 20% 19% 19% Payable Days 42 42 42 42
Dep & Amortization 103 143 165 160 Interest Coverage 15.34 13.19 17.85 25.52
EBIT 1,536 1,714 1,886 2,075 P/E 44 45 40 35
Interest & other finance cost 100 130 106 81 Price / Book Value 9.7 9.2 7.8 6.7
Other Income 67 52 61 71 EV/EBITDA 31 32 28 25
EBT 1,503 1,636 1,841 2,065 FCF per Share 19 34 45 48
Exceptional Item (27) - - - Dividend Yield 0.4% 0.4% 0.4% 0.5%
Tax 317 345 388 436
Minority Int & P/L share of Ass. 39 39 39 39 Assumptions
Reported PAT 1,119 1,251 1,413 1,590 Y/E March FY16 FY17E FY18E FY19E
Adjusted PAT 1,140 1,251 1,413 1,590 Volume Growth(domestic) 10% 2% 6% 7%
Change (%) 24% 10% 13% 13% Realization Growth(domestic) -1% 0% 4% 5%
Margin(%) 13% 13% 13% 13% Capex(Rs crore) 391 262 100 100
Balance Sheet Rs in Crores Cash Flow Statement Rs in Crores

Y/E March FY16 FY17E FY18E FY19E Y/E March FY16 FY17E FY18E FY19E
Share Capital 34 34 34 34 PBT 1,503 1,557 1,762 1,986
Reserves 5,064 6,007 7,137 8,357 (inc)/Dec in Working Capital (482) (21) (40) (47)
Networth 5,098 6,041 7,171 8,391 Non Cash Op Exp 116 143 165 160
Debt 2631 3517 2617 1717 Interest Paid (+) 100 130 106 81
Other Non Current Liab 37 37 37 37 Tax Paid (336) (345) (388) (436)
Total Capital Employed 7,729 9,558 9,788 10,108 others (41) - - -
Net Fixed Assets (incl CWIP) 1,780 3,495 3,401 3,312 CF from Op. Activities 839 1,459 1,657 1,748
Non Current Investments 34 34 34 34 (inc)/Dec in FA & CWIP (208) (286) (126) (127)
Other Non Current Assets 4,792 4,845 4,845 4,845 Free Cashflow 631 1,173 1,531 1,622
Non Current Assets 6,606 8,375 8,281 8,192 (Pur)/Sale of Investment (330) (147) (150) (200)
Inventory 1,307 1,388 1,544 1,727 others 43 (61) (1) (2)
Debtors 1,118 1,187 1,320 1,478 CF from Inv. Activities (495) (2,059) (222) (273)
Cash & Bank 746 569 688 812 inc/(dec) in NW - - - -
Other Current Assets 376 537 714 945 inc/(dec) in Debt 157 886 (900) (900)
Current Assets 3,547 3,681 4,266 4,962 Interest Paid (119) (130) (106) (81)
Creditors 1,037 1,101 1,225 1,371 Dividend Paid (inc tax) (225) (263) (297) (334)
Provisions 65 69 77 86 others - (70) - -
Other Current Liabilities 1,202 1,276 1,419 1,588 CF from Fin. Activities (187) 424 (1,302) (1,315)
Curr Liabilities 2,303 2,446 2,721 3,044 Inc(Dec) in Cash 157 (177) 133 124
Net Current Assets 1,244 1,235 1,546 1,917 Add: Opening Balance 404 746 569 688
Total Assets 10,153 12,056 12,547 13,154 Closing Balance 561 569 702 812

"AVIOD "
S CHAND AND COMPANY LIMITED
25th Apr 2017
IPO Note
Issue Detail Company Overview
Type 100% Book Building S Chand And Company Limited was incorporated in 1970 which operates as an education content
Issue Size Rs. 700 Crore company in India. The company develops and delivers content, solutions, and services in the
Offer Price *Rs (660-670)/Equity Share education K-12, higher education, and early learning segments
Company is involved in publishing, printing, sale, purchase, export, and import of various books and
Min App Size 22 Shares
other literary work; agency ship and distribution of publishers for books and other literary work;
Issue Open 26-Apr-17 selling of educational toys; and publishing books for children, schools, colleges, and universities, as
Issue Close 28-Apr-17 well as digital content and interactive learning systems to schools and running pre-schools.
Shares Offer 1.05 Cr.
Face Value Rs 5 The company also provides digital data management services and digital content books to schools
JM Financial Institutional and colleges; solutions for higher education in colleges, universities, and technical institutes; and
Securities Ltd , Axis Capital Ltd , DTP printing, DTP jobs, page making, editing and proof reading, and cover designing services of
Lead Mgrs
Credit Suisse Securities (India) books, journals, tabloids, magazines, bulletins, brochures, and periodicals in the form of hard copy,
Pvt Ltd compact disks, and e-forms. S Chand And Company Ltd offers 53 consumer brands across
Listing BSE, NSE knowledge products and services including S.chand, Vikas, Madhubun, Saraswati, Destination
Success and Ignitor. The company also exports its printed and digital content to Asia, the Middle
Registrar Link Intime India Pvt Ltd
East, Africa, and internationally.
Market Cap
2304.1 Company Strategies
(Post Issue)
> Company has strong presence in the CBSE/ICSE affiliated schools and increasing presence in the
No of shares ( Post & Pre Issue) state board affiliated schools across India. It works closely with the educators and authors, and
No of Shares (Pre Issue) 29,844,496 regularly integrates feedback received from authors, educators and students Company
Comprehensive consumer focused education content player with touch points across education
Offer for Sale 6,023,236 lifecycle
Fresh Issue made 4545455 > Company has Strong integrated in-house printing and logistic capabilities . The printing
capacity was enhanced from 15 tons to 55 ton paper per day from in FY 14 to FY16. By integrating
No of Shares (Post Issue) 34389951
and expanding the printing capabilities, they reduced dependence on third-party vendors, thereby
achieving cost savings and operational efficiencies.
Bid allocation pattern > Company has Pan-India sales and distribution network which driving deep market reach. They
QIB 50% sold their content in 29 states and 7 union territories through their distribution channels. Its
Non-Institutional 15% acquisition of NSHPL enhanced its distribution network in southern India, and acquisition of VPHPL
added to its distribution network in north India
Retail 35% > Company Focused digital and technology platform . The digital offerings are focused on
supplementing our existing strengths in the K-12 and higher education businesses.
Objects of the Issue:

Particulars
Repayment of loans availed by the Company and one of their Subsidiaries, EPHL, which were
utilized towards funding the acquisition of Chhaya
Rubi Burman Repayment/prepayment in full or in part, of certain loans availed of by the Company and their
rubi.burman@narnolia.com Subsidiaries, VPHPL and NSHPL
General corporate purpose
Recommendation
S Chand and Company is raising funds to retire its debts in its subsidiaries . The company is being offered at post IPO valuations of 2.3 times
P/b and Return on Equity of 5.5% while its comparable peer Navneet Education Limited is being traded at 5times P/b and has return on
Equity of 20%. We recommend AVOID.
Please refer to the Disclaimers at the end of this Report.

S Chand Organization Structure
Competitive Risks
> The high degree of seasonality of our K-12 business materially affects operating revenue, margins and cash
flow from quarter to quarter. Company business and the newly acquired business of Chhaya is linked to the
academic cycle. Chhayas sales season has traditionally been across first and fourth quarters of the financial
year with the main sales season starting in December. The the working capital cycle for print content in the
CBSE/ICSE K-12 education industry tends to be unduly high at the fiscal year end on account of high sales in the
last quarter
> Company operate in a highly-competitive and fragmented industry, and our business, results of operations
and financial condition may be adversely affected if we are not able to compete effectively.
> For the past two years, CBSE has issued an advisory circular advising CBSE schools to use only NCERT print
content for all classes and may issue similar advisory circulars in the future. These circulars may reduce demand
for its educational content amongst the CBSE affiliated schools and, accordingly, may adversely affect its
business, results of operations, cash flows and financial condition.
> A significant portion of the companys revenues are derived from titles of its top authors. The loss of all or any
of its top authors could adversely affect its business, results of operation, cash flows and financial condition.
Please refer to the Disclaimers at the end of this Report.

INCOME STATEMENT RATIOS
31 March 31 March 31 31 Dec 31 March 31 March 31
2014 2015 March 2016 2014 2015 March
Revenue (Net) 370.0 476.7 537.8 149.5 EPS 12.2 9.8 14.1
Other Income 0.9 1.8 2.9 1.3 Book Value Per share 6.0 6.7 9.7
Total Revenue 371.0 478.5 540.6 150.8 Valuation(x)
Raw materials Cost 149.2 178.2 175.7 98.7 P/E ( Upper Band ) 54.7 68.2 47.4
Purchase and implementation cost 0.3 1.7 4.9 3.7 P/E ( Lower Band ) 53.9 67.1 46.7
Publicationdecrease
Increase)/ expensesin 42.3 48.2 50.3 22.3 Price / Book Value 112.6 100.4 69.3
inventories of finished goods, -13.8 -24.3 -27.9 -68.1 EV 2337 2463 2438
Selling and distribution expenses 34.4 45.6 52.7 40.6 EV/Sales 6.3 5.2 4.5
Employee benefit expenses 52.7 80.3 94.2 83.6 EV/EBITDA 8.0 6.6 5.9
Other expenses 26.2 44.7 62.6 53.5 Profitability Ratios
Total Expenses 291.2 374.5 412.4 234.4 RoE 11% 8% 8%
EBITDA 79.8 104.0 128.2 -83.6 RoCE 18% 20% 17%
Depreciation 12.3 22.5 25.9 20.3 Liquidity Ratios
EBIT 67.5 81.5 102.3 -103.8 Net Debt/Equity 0.043 0.285 0.113
Finance Costs 9.5 28.3 30.6 22.7 Interest Coverage Ratio 6.5 4.6 4.9
Profit before Tax 58.0 53.2 71.7 -126.6 Current Ratio 1.86 1.75 1.87
Total Tax 16.0 19.5 23.3 -39.5
PROFIT AFTER TAX 42.0 33.7 48.4 -87.0
31 March 31 March 31 31 Dec 31 March 31 March 31 31 Dec
2014 2015 March 2016 2014 2015 March 2016
Share Capital 0.2 0.2 0.2 14.9 Net Profit/(loss) before tax 58.6 53.7 72.7 (126.3)
Reserves 367.5 394.1 599.0 494.2 Adjustments for:
Minority Interest 3.0 21.5 3.1 8.8 Depreciation and Amortisation 12.3 22.5 25.9 20.3
Net Worth 370.8 415.9 602.3 518.0 Interest expense 9.1 27.4 29.3 20.5
Long-term borrowings 16.0 118.5 67.9 59.5 Amortisation of ancillary borrowing cost 0.0 0.5 0.6 1.8
Trade payables 0.0 0.2 0.9 1.3 Interest income (0.6) (0.4) (0.9) (0.2)
Other non-current liabilities 0.3 0.3 0.1 0.0 Loss/(profit) on sale of fixed assets (0.1) 0.0 0.2 0.5
Long-term provisions 2.1 4.6 5.0 7.0 Loss/(profit) on sale of investments (0.1) (0.0) (1.7) (1.4)
Non - current liabilities 389.1 539.5 676.2 585.7 Provision for sales return 0.0 1.6 4.6 0.0
Short-term borrowings 69.5 96.5 125.8 183.1 Employee stock options expense 0.0 0.0 0.5 0.9
Trade payables 99.2 135.8 151.1 140.1 Provision for bad debts and advances 1.9 1.0 4.6 6.8
Other current liabilities 14.9 40.9 23.2 200.0 Operating profit before working capital 81.2 106.2 135.7 (77.2)
Short-term provisions 4.3 13.3 17.2 31.0 Movements in working capital
Current liabilities 187.9 286.5 317.3 554.1 (Increase)/ decrease in loans and advances 30.3 1.7 (5.7) (10.8)
Total Liabilities 576.9 826.0 993.5 1139.9 (Increase)/ decrease in trade receivables (59.2) (113.5) (59.7) 195.3
Fixed assets 197.5 278.9 337.4 492.9 (Increase)/ decrease in inventories (23.9) (36.0) (20.1) (110.8)
Non Current Investments 7.4 13.0 25.4 25.4 Decrease in other assets 0.0 (0.0) 0.0 (0.0)
Deferred tax assets 5.4 10.4 12.4 56.3 Increase/ (decrease) in provisions 0.5 11.7 (10.2) (2.2)
Loans and advances 15.9 18.7 17.8 25.8 Increase/ (decrease) in trade payables 32.3 36.9 16.0 (10.6)
Other non-current assets 1.7 2.3 3.3 1.2 Increase/ (decrease) in other liabilities 1.1 4.4 (0.5) 10.2
Non-current assets 227.8 323.4 396.2 601.7 Cash flows from operations 62.2 11.4 55.5 (6.0)
Current investments 0.6 4.7 16.4 4.3 Direct taxes paid (net of refunds) 19.8 29.3 18.0 28.5
Inventories 83.9 119.7 139.8 250.6 Net cash flows from operating activities (39.5) (101.6) (136.1) (159.4)
Trade receivables 230.9 341.7 395.1 195.6 Cash flows from investing activities 0.5 122.7 100.9 190.7
Cash and bank balances 17.6 21.3 24.4 24.4 Net cash generated financing activities 5.1 1227.1 1009.3 1906.7
Short-term loans 16.0 13.2 18.5 62.4 Net in cash and cash equivalents (33.9) 1248.2 974.1 1937.9
Current assets 349.0 500.7 594.2 537.4 Cash & cash equivalents at the beginning 13.6 17.4 20.9 23.8
TOTAL Assets 576.8 824.1 990.4 1139.1 Cash & cash equivalents at the end of Year (20.2) 1265.6 995.1 1961.8
INDUSTRY - CEMENT
BSE Code - 532538
NSE Code - ULTRACEMCO
26-Apr-17 NIFTY - 9307

CMP 4,235
Target Price 4260
The EBITDA margin contracted by 186bps YoY from 18.9% to 17.04% led by
155bps increase in Power & Fuel cost and 83bps increase in other expenses.
Previous Target Price
Upside 1% The company reported 20% QoQ growth in sales volume in 4QFY17 due to low
52wk Range H/L 4260/3050 base, demand recovery and capacity additions.
Mkt Capital (Rs Cr) 116,249 White cement and wall care putty volumes were at 3.86 lakh tonnes against 3.85
Av. Volume (,000) 235 lakh tonnes in same quarter last year. Grey Cement volumes increased 0.2% to
13.35 MT against 13.32 MT YoY.
ULTRACEMCO is trading at its higher range
of P/B Presently company is trading at 4.5x times of FY18E book value of Rs 950.
Considering a slightly stretch valuation we hold Neutral view on this stock with TP
P/B(x)
6.0
of Rs 4260.
5.2
4.8 5.0
5.0 4.3
4.0
3.0
2.0
Financials/Valuation FY14 FY15 FY16 FY17 FY18E
1.0
Net Sales 21,652 24,349 28,392 28,646 25,941
- EBITDA 4,035 4,425 4,901 5,212 5,010
FY14 FY15 FY16 FY17
EBIT 2,896 3,222 3,524 3,864 4,002
4QFY17 3QFY17 2QFY17 EPS (Rs) 76 73 84 94 110
Promoters 62.2 62.3 62.3 EPS growth (%) -21% -3% 15% 11% 17%
Public 37.8 37.8 37.8 ROE (%) 13% 11% 11% 13% 13%
Total 100.0 100.1 100.1 ROCE (%) 14% 14% 13% 16% 19%
BV 624 687 756 850 950
1Mn 3Mn 1Yr EV/Ton (Cap-USD) 240 217 200 194 183
Absolute 4.3 10.0 29.9
Rel.to Nifty 3.1 6.5 14.4 Acquisition of JP Associates
The company is in process to acquire 21.1 MT of cement capacity. It is at its last
130 ULTRACEMCO NIFTY stage. All approval is done. Once completed it will have capacity expansion of
125 :
120 6.5 MT in UP and Uttrakhand (Infrastructure development will pick up
115 momentum)
110 5 MT in Coastal Andhra Pradesh (well positioned)
105
4.9 MT in Central India
100
5 MT in Himachal Pradesh
95
90 The company is setting up 3.5 MTPA integrated cement plant at Dhar, Madhya
85 Pradesh is on track and commercial production is expected to commence from
80 Q4FY19. During the year, it has commissioned grinding units in Maharashtra and
Bihar.
Jul-16
Apr-16
Feb-17
Apr-17
Sep-16
Mar-17
Jan-17
Dec-16
Jun-16
Aug-16
Oct-16
May-16
Nov-16
With this expansion and the acquisition of cement plants of Jaiprakash

Bineeta Kumari Associates, company's cement capacity will stand augmented to 95.4 MTPA,
bineeta.kumari@narnolia.com including its overseas operations in FY19.

It includes Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY %
Rs.138 crore
Net Sales 7,700 7,400 6,446 6,690 7,924 3% 18% 28,392 28,646 1%
of provisions
Other Income 141 151 159 97 241 71% 147% 464 648 40%
which is no
COGS 1,244 1,209 931 1,047 1,308 5% 25% 4,418 4,493 2%
longer
required. Employee Cost 365 373 384 392 373 2% -5% 1,445 1,522 5%
Other Expenses 979 982 987 938 1,066 9% 14% 3,837 3,972 4%
EBITDA 1,464 1,475 1,219 1,182 1,336 -9% 13% 4,901 5,212 6%
Depreciation 379 323 334 336 356 -6% 6% 1,377 1,348 -2%
Interest 128 180 150 144 167 30% 16% 566 640 13%
PBT 1,097 1,124 894 800 1,054 -4% 32% 3,421 3,872 13%
Tax 279 344 280 206 329 18% 59% 942 1,159 23%
PAT 819 763 614 673 682 -17% 1% 2,478 2,715 10%
Reported Net sales for the quarter stood at Rs 7924 Cr (Up 3% YoY) as compared to Rs 7700 Cr in
4QFY16, and Rs 6690 Cr (Up 18% QoQ) in 3QFY17.
Other income for the quarter stood at Rs 241 Cr (71% up YoY & 147% up QoQ). It includes Rs 138
Cr of provisions which is no longer required. This provision was related to royalty on limestone for AP
for last several years for conversion factor.
On the volume front, white cement and wall care putty volumes were at 3.86 lakh tonnes against 3.85
lakh tonnes in same quarter last year.
Grey Cement volumes increased 0.2% to 13.35 MT against 13.32 MT YoY.
Other expenses for the quarter was Rs 1066 Cr (Up14% QoQ) driven by sales volume (20% up
sequentially). The YoY growth of 9% was due to variable expenses.
Tax rate for the quarter stood 329 Cr as compared to Rs 279 Cr in the same quarter of the previous
year. Expected tax rate for FY18 is 32%.
PAT for the quarter declined 17% QoQ to Rs 682 Cr as compared to Rs 819 Cr in the same quarter of
the previous year.
Margins Dissapointed
Gross Margin 81.8% 81.7% 83.9% 82.5% 81.4% 0% -1% 84% 84% 0%
EBITDA Margin 21.5% 22.4% 21.1% 19.7% 19.0% -2% -1% 17% 18% 1%
PAT Margin 12.0% 11.6% 10.6% 11.2% 9.7% -2% -2% 9% 9% 1%
Gross Margin declined by 39bps YoY to 81.4% from 81.8% due to inflation in input prices.
The EBITDA margin contracted by 186bps YoY from 18.9% to 17.04% led by 155bps increase in
Power & Fuel cost and 83bps increase in other expenses.
PAT margin deteriorated by 230bps on the back of higher tax provisioning of 577bps (31.2% Vs
25.4%).

EBITDAM% PATM%
23.0% 22.4% 14.0%
12.0% 11.6% 11.2%
22.0% 21.5% 12.0% 10.6%
21.1% 9.7%
10.0%
21.0%
19.7% 8.0%
20.0%
19.0% 6.0%
19.0%
4.0%
18.0% 2.0%
17.0% 0.0%
4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17
View & Valuation
Major negative came from contraction in EBITDA margin which declined by 186bps YoY led by rise
in power and fuel cost. Although managements tone was bullish and is expecting above than
industry growth going forward but we need to see how management maintains margins going
forward. On the other hand, company clocked better volume growth (20% QoQ) in this quarter but
it will be too early to draft conclusions based on that, so we will be watchful about volume growth
in upcoming quarters to get more clearer view. Presently company is trading at 4.5x times of FY18E
book value of Rs 950. Considering a slightly stretch valuation we hold Neutral view on this stock
with TP of Rs 4260.
Concall Highlights:
Housing sector has started coming back (Correction in prices of real estate sector, reduction in
interest rate has also made housing finance attractive, 1st home buyer are getting in investment
mode again).
Infrastructure segment continues to grow at robust. However overall demand driver remained to
be small (contributing 20% of overall demand). Roads (3-4%) growing robustly. Irrigation picking
up, Metro, Rail, Inland waterways picking up.
Region Split :
Tamil Nadu, Kerala : Due to Drought it remain under pressure. Also political uncertainties there.
Not positive.
Western market : Demand seen, volume picking up.
North Market : Slow demand, Pressure of liquidity crisis followed by eastern market.
Rural market up due to good monsoon, good crops, Pay commission disbursement.
Affordable Housing Scheme: Very positive move for cement industry.
Commitment of Zero debt: The year ended with negative debt of 2004 Cr and cash surplus of
2004 Cr. Robust Working capital Management anf prudence capex plan has helped to achieve
the goal. Helped in reducing leverage position from day 1 of acquisition.
Indian economy to grow 70% in coming years. Cement industry to sustained this growth and
ultratech is well positioned to take advantage of this growth.
Capex for Dhar project : 2600 Cr.

Sales break up : For 4QFY17 White cement: 500 Cr Ready concrete mix: 480 Cr and For FY17
White cement: 1700 Cr Ready concrete Mix: 2000 Cr.
JP Associates operating at 42% of capacity utilization. Target for 1st 12 months is to cross 60%
utilization and for next 12 months is to cross 75% utilization.
Expected Tax rate for FY18 is 32%.
Andhra Pradesh & Telangana can show double digit growth.
Ultratech to grow higher than industry growth.
Incremental capacity for next 3 Years : 40MT
North : In FY17 it is 145 MT will be reaching to 160 MT by FY21
South : In FY17 it is 147 MT will be reaching to 155 MT by FY21
East : In FY17 it is 72 MT will be reaching to 88 MT by FY21
West : In FY17 it is 54 MT will be reaching to 65 MT by FY21
White Putty & cement sales in Cr (14% up QoQ) RMC Sales in Cr (1% up QoQ)
700 560 550
600 575 540

500
500 440 440 520
500 500
400 375 500
480
300 480 475
200 460
100 440
0 420
20% QoQ growth in sales volume Realization declined 2% sequentially
Volume (MT) Realisation (INR/ton)

16 5350 5314
13.6 13.68 5300
14 12.9 5242 5257
11.4 5250
12 10.9
5200
10 5127
5150
8 5100
6 5050 5014
5000
4
4950
2
4900
0 4850

INDUSTRY - OIL & GAS
BSE Code - 500325
NSE Code - RELIANCE
25-Apr-17 NIFTY - 9217

CMP 1417
Reliance commenced commercial production from its Coal Bed Methane
Target Price 1680 (CBM) block Sohagpur (West) and it will gradually ramp-up in the next 15-18
Previous Target Price months.
Upside 19% Continuing to re-commission Petroleum outlets improves the marketing
52wk Range H/L 1448/925 volume of Petroleum products.
Mkt Capital (Rs Cr) 460,518 Reliance out-performed Singapore GRM by 5.1 USD/BBL and reported GRM
Av. Volume (,000) 409 of 11.5 USD/BBL.
RoE to maintain over 13%

Reliance Retail added 63 stores across various store concepts and now it is
operating 3616 stores in 702 cities.
ROE(%) Currently, the stock is trading at 1.89x FY17 P/BV. We maintain HOLD' with
14.0% 13.1% 13.0%
the target price of Rs. 1680
12.9%
13.0%
11.5% 11.3% 11.3%
12.0%
10.8%
11.0%
10.0% Financials/Valu FY15 FY16 FY17 FY18E FY19E
9.0% ation
Net Sales 375,435 293,298 330,180 443,483 493,634
8.0%
EBITDA 37,364 41,704 46,194 68,392 76,153
FY13 FY14 FY15 FY16 FY17 FY18E FY19E
EBIT 31,114 33,927 40,142 54,437 60,833
4QFY17 3QFY17 2QFY17 EPS (Rs) 73 92 92 124 138
Promoters 46.3 46.5 46.5 EPS growth (%) 5% 27% 0% 34% 12%
Public 53.7 53.5 53.5 ROE (%) 11% 13% 11% 13% 13%
Total 100.0 100.0 100.0 ROCE (%) 8% 8% 8% 11% 11%
BV 675 715 814 941 1,062
1Mn 3Mn 1Yr P/E (x) 11.3 11.3 13.5 10.1 9.0
Absolute 10.1 36.4 42.6
Rel.to Nifty 8.9 19.7 34.8 RECENT DEVELOPMENT: Commencement of Ethane Project
Reliance commissions ethane receipt & handling facilities , at its Dahej

140 RELIANCE NIFTY
Manufacturing Facility in Gujarat in a world record time of less than three
130
years
120 RIL commissions final phase of Jamnagar paraxylene project at a cost of $

16 million
110
100 Commercial production of natural gas from coal seams or CBM from its
Madhya Pradesh blocks.Company is targeting 3.5 million SCM per day of
90 peak output from two adjacent CBM blocks in Sohagpur
Reliance Retail may spend Rs 2,500 cr for business expansion in next 3
80
years.The company also has plans to add 500 to 600 fuel stations.
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
Reliance Industries has completed sale of its entire 76 percent interest in its
East African company GAPCO to Total SA of France for an undisclosed
sum.
ADITYA GUPTA
aditya.gupta@narnolia.com
Total Volumes ('000) 18 17 18 18 18 -2% -2% 70 70 1%
GRM(USD/BBL) 10.8 11.5 10.1 10.8 11.5 6% 6% 11 11 2%
Net Sales 59,671 71,451 81,651 84,189 92,889 56% 10% 293,298 330,180 13%
Other Income 1,953 2,378 2,393 2,736 1,936 -1% -29% 7,479 9,443 26%
COGS 37,309 49,519 59,396 60,486 67,697 81% 12% 208,113 237,098 14%
Employee Cost 1,838 2,111 2,017 1,894 2,366 29% 25% 7,407 8,388 13%
Other Expenses 9,321 8,598 9,062 10,257 10,593 14% 3% 36,074 38,500 7%
EBITDA 11,203 11,223 11,176 11,552 12,233 9% 6% 41,704 46,194 11%
Depreciation 3,110 2,725 2,774 2,793 3,354 8% 20% 11,565 11,646 1%
Interest 842 1,206 893 1,209 556 -34% -54% 3,691 3,849 4%
PBT 9,204 9,670 9,902 10,286 10,259 11% 0% 33,927 40,142 18%
Tax 2,351 2,581 2,708 2,719 2,201 -6% -19% 8,876 10,201 15%
PAT 6,930 7,113 7,206 7,506 8,053 16% 7% 29,861 29,833 0%
Robust volume growth accompanied by highest GRM of 11 USD/BBL
Reliance Reliance reported Rs.92889 crore of net sales in 4QFY17 a growth of 56% over same quarter previous
year. This was driven by growth across all business segments.
outperformed
Singapore GRM EBITDA for 4QFY17 is Rs. 12233 Cr. a growth of 9% over same quarter previous year.EBITDA margin
by 5.1 USD/BBL in 4QFY17 stood at 13.2%
Reliance has reported Gross refining margin of 11.5 USD/BBL in 4QFY17 vs 10.8 USD/BBL as
compared to the same quarter previous year.
Profit after tax for 4QFY17 is Rs. 8053 Cr a growth of 16% over same quarter previous year.
Exports increased by 25.2% to Rs. 38,718 crore in 4QFY17.
The capital expenditure for the year ended 31st March 2017 was Rs. 114,742 crore
Reliance Jamnagar refineries processed 17.5 MMT crude in 4Q FY17, vs 17.8 MMT crude processed in
the previous quarter..
Reliance operated 1,221 petroleum retail outlets in the country in 4QFY17
Refining EBIT(Rs in CR) EBIT Margins(%) RIL GRM(USD/bbl) Singapore GRM(USD/bbl)

7,000 14% 14.0
6,000 12% 11.5 11.5 11.5
12.0 10.8 10.8
10.1 10.4 10.6 10.1
5,000 10% 10.0 8.7 8.3 8.6
8.0 8.0 7.7
4,000 8% 8.0 7.3
6.3 6.3 6.5 6.7
5.8 6.0
3,000 6% 6.0 4.8 5.1
2,000 4% 4.0
1,000 2% 2.0
- 0% 0.0

Higher expenses and depreciation pressurizes PAT
Gross Margin 37% 31% 27% 28% 27% -0.10 -0.01 29% 28% -0.01
EBITDA Margin 19% 16% 14% 14% 13% -0.06 -0.01 14% 14% 0.00
PAT Margin 12% 10% 9% 9% 9% -0.03 0.00 10% 9% -0.01
Gross Margin contracted to 27% due to mediocre performance of the Oil & Gas exploration business in
4QFY17
EBITDA grew by 9%QoQ to Rs.12233 crore. But EBITDA Margin declined by 50bps QoQ to 13.2% on
account of higher purchase cost of raw material.
PAT margin degrew by 30bps to 8.7%QoQ on account of higher depreciation cost in 4QFY17
EBITDA(Rs in CR) EBITDA Margins(%) PAT(Rs in CR) PAT Margins(%)

14,000 20%
12,233 10,000 9,345 14%
11,248 11,223
11,203 11,552
11,176 18%
12,000
9,959 16% 9,000 8,053 12%
10,000 9,301 8,000 7,2456,9307,1137,2067,506
14%
7,000 6,024 10%
8,000 12%
6,000 8%
10%
6,000 5,000
8% 4,000 6%
4,000 6% 3,000 4%
4% 2,000
2,000 2%
2% 1,000
- 0% - 0%
Volume Trend
Petrochemicals volume (MMT) Crude Oil Refined
19 18
6.5 6.4 6.4 18
6.4 18 18 18 18
6.3 18
6.3 6.2 6.2 6.2 18 17
6.2 17
6.1 17
6.1 17 17 17
6.0 17 16
5.9 5.8
5.8 16
5.7 16
5.6
15
5.5
Petro-chemicals volume remain flat QoQ to 6.2 MT in 4QFY17 but it slightly degrew by 2% YoY primarily
due to increase in prices across polymers and polyester chain.
Crude oil refined in 4QFY17 is 17.5 MT vs 17.8 MT in the previous quarter of FY17.

Expanding organised retail base- During the quarter, Reliance Retail added 63 stores across various
store concepts. At the end of the year, Reliance Retail operated 3,616 stores across 702 cities with an
area of over 13.5 million square feet.
Re-commissioning of Petroleum outlets- Reliance continue to re-commission its retail petroleum
network; 1221 outlets are now operational. Further,growing Trans-connect customer base, credit
solutions, and e-cash loading facilities have helped Reliance to more than double sales volume in FY17.
Strong Petro-chemicals Demand- polymer demand registered growth of 7% during FY17.PVC demand
registered highest growth rate of 10% YoY
Commercialisation of Jio- Jio reached 100 Million subscribers in 170 days. This is the fastest
achieved by any start-up technology company in the world.Reliance Retails device distribution business
sold 2.6 million LYF and JioFi devices during the quarter and nearly 10 million units in the financial year.
Attractive pricing policy of Jio can boost revenue- Within a month of announcing the Jio Prime Offer,
over 72 million Jio customers signed up for JIO PRIME. Recently Jio launched Jio Dhan Dhana Dhan.
The plans start with the most affordable Rs. 309 , which provides Unlimited SMS, calling and data (1GB
per day at 4G speed) for 3 months on first recharge.
Segment performance
Refining business Petro-chemicals business
EBIT Margins(%) Refining EBIT(Rs in CR) EBIT Margins(%) Petro-chemicals EBIT
7,000 14% 4,000 18%

6,000 12% 3,500 16%
3,000 14%
5,000 10%
12%
4,000 8% 2,500
10%
2,000
3,000 6% 8%
1,500
2,000 4% 6%
1,000 4%
1,000 2%
500 2%
- 0% - 0%
View & Valuation

Commissioning of Ethane project and commercialization of Jio has paved a way for long term growth of
the company. With the rapid growing customer base of jio by adding 6 mn customers daily to its
network, Jio ha successfully added 100 million customers and it is continuously adding new customers.
Jio can improve the revenue of the company upto a large extent. Growing demand of petro-chemicals
products and re-commissioning of petroleum outlets will further improve the volume of refining
segment. Reliance has also added 63 stores across various store concepts. At the end of the year,
Reliance Retail operated 3,616 stores across 702 cities with an area of over 13.5 million square feet
which will improve revenue of organized retail.We expect company to maintain ROE of 13% in FY18.
Currently, the stock is trading at 1.89x FY17 P/BV. We maintain HOLD' with the target price of Rs.
1680.

Y/E March FY16 FY17 FY18E FY19E FY16 FY17 FY18E FY19E
Change (%) -22% 13% 34% 11% ROCE 8% 8% 11% 11%
EBITDA 41,704 46,194 68,392 76,153 Asset Turnover 0.5 0.5 0.6 0.6
Change (%) 12% 11% 48% 11% Debtor Days 5.56 5.56 5.56 5.56
Margin (%) 14% 14% 15% 15% Inv Days 57.9 57.9 57.9 57.9
Depr & Amor. 11,565 11,646 17,357 19,861 Payable Days 75 75 75 75
EBIT 30,139 34,548 51,035 56,291 Int Coverage 8.17 8.98 12.96 14.29
Int. & other fin. Cost 3,691 3,849 3,939 3,939 P/E 11 14 10 9
Other Income 7,479 9,443 7,341 8,480 Price / Book Value 1.5 1.5 1.3 1.2
EBT 33,927 40,142 54,437 60,833 EV/EBITDA 11 12 8 7
Exp Item 4,574 - - - FCF per Share (30) (204) 26 39
Tax 8,876 10,201 14,388 16,077 Div Yield 1% 1% 1% 1%
Minority Int & P/L share of Ass. 236 (108) - -
Reported PAT 29,861 29,833 40,049 44,755 Assumptions
Adjusted PAT 26,484 29,833 40,049 44,755 FY16 FY17 FY18E FY19E
Change (%) 27% 0% 34% 12% Crude Refined(Million Tonnes) 70 70 74 80
Margin(%) 10% 9% 9% 9% Petrochemicals Production(MMT) 25 25 25 26
Total Oil volume(PMT+KD-D6)(MMBBL)8 8 8 8
Total Gas volume(PMT+KD-D6)(BCF)208 174 174 174
Balance Sheet Rs in Crores
Y/E March FY16 FY17 FY18E FY19E
Share Capital 2,948 2,959 2,948 2,948 Cash Flow Statement Rs in Crores
Reserves 228,608 260,750 301,918 341,128 Y/E March FY16 FY17E FY18E FY19E
Networth 231,556 263,709 304,866 344,076 PBT 35,979 40,142 54,437 60,833
Debt 165192 183676 181182 181182 (inc)/Dec in Working Capital 41,285 55,529 75,733 84,633
Other Non Cur Liab 2,249 9,025 3,401 3,785 Non Cash Op Exp 12,916 11,646 17,357 19,861
Total Capital Employed 396748 447385 486047.89 525257.82 Int Paid (+) 3,849 3,939 3,939 -
Net Fixed Assets (incl CWIP) 409353 518471 537523.25 564661.96 Tax Paid (10,201) (14,388) (16,077) -
Non Cur Investments 41,512 25,639 25,639 25,639 others 7,128 9,331 (16,410) (8,942)
Other Non Cur Asst 14,061 8,279 8,279 8,279 CF from Op. Activities 39,811 54,659 44,934 59,614
Non Curr Assets 471,212 559,989 579,041 606,180 (inc)/Dec in FA & CWIP (49,662) (120,764) (36,409) (47,000)
Inventory 46,486 53,460 70,289 78,238 Free Cashflow (9,851) (66,105) 8,525 12,614
Debtors 4,465 8,177 6,751 7,515 (Pur)/Sale of Inv 6,471 - - -
Cash & Bank 11,028 3,023 6,223 9,352 others 3,775 - - -
Other Curr Assets 16,345 19,871 24,715 27,509 CF from Inv. Activities (38,338) (120,764) (36,409) (47,000)
Curr Assets 127,785 146,813 170,536 195,316 inc/(dec) in NW 284 - - -
Creditors 60,296 76,595 91,171 101,481 inc/(dec) in Debt 13,345 18,484 (2,494) -
Provisons 3,006 4,120 5,035 5,338 Int. Paid (9,115) (3,849) (3,939) (3,939)
Other finicial liabilities 89,533 104,543 104,543 104,543 Div Paid (inc tax) (7,259) (3,697) (4,962) (5,546)
Other Curr Liab 10,005 20,882 15,128 16,839 others (14) - - -
Curr Liabilities 161,609 203,789 213,526 225,850 CF from Fin. Activities (2,759) 10,938 (11,395) (9,485)
Net Curr Assets (33,824) (56,976) (42,990) (30,535) Inc(Dec) in Cash (1,286) (55,167) (2,870) 3,129
Total Assets 598997 706802 749577.22 801495.69 Add: Opening Balance 12,476 11,028 3,023 6,223
Closing Balance 11,190 (44,139) 153 9,352

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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
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IEA Report 2nd May 2017.

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IEA Report 2nd May 2017.

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IEA Report

2th May 2017

MARUTI "Neutral" 28th Apr 2017

GODREJCP "HOLD" 27th Apr 2017

S CHAND AND COMPANY LIMITED "AVOID" 26th Apr 2017

ULTRACEMCO "Neutral" 26th Apr 2017

RELIANCE "HOLD" 25th Apr 2017

Narnolia Securities Ltd IEA Edition No.- 1004

Comapany Data Key Highlights of the Report:

RoE declines to 12.7% in FY17

160 US FDA accepts Biocon-Mylan biosimilar application for proposed anti-

patents for cancer drug Herceptin (Trastuzumab).The settlement gives

Margins under pressure

EBITDA( Rs.Crore) EBITDA Margin PAT( Rs.Crore) PAT Margin

150 12% 15%

Please refer to the Disclaimers at the end of this Report

View & Valuation

Please refer to the Disclaimers at the end of this Report

Please refer to the Disclaimers at the end of this Report

Comapany Data Key Highlights of the Report:

logistics cost of Maruti.

NAVEEN KUMAR DUBEY

Results in-line, posted strong double digit revenue growth

450,000 18% 20% 450,000 7%

Please refer to the Disclaimers at the end of this Report

Please refer to the Disclaimers at the end of this Report

Mix changes towards Utility Vehicles Capacity and Utilization Trend

View & Valuation

Please refer to the Disclaimers at the end of this Report

Balance Sheet Rs in Crores Cash Flow Statement Rs in Crores

Please refer to the Disclaimers at the end of this Report

Company Data Key Highlights of the Report:

Overall revenue is expected to grow by 9%YoY to Rs 2473 cr whereas PAT

International Better revenue growth led by robust international business performance

143 150 600

Please refer to the Disclaimers at the end of this Report

Domestic Soap Revenue growth YoY Segments Penetration

Domestic Soap Revenue growth YoY Penetration

Please refer to the Disclaimers at the end of this Report

Lower penetration gives opportunity: GODREJCP is present in less penetrated segment as

Indonesian Market Constant Currency(CC) growth Africa Constant Currency(CC) growth

View & Valuation

Please refer to the Disclaimers at the end of this Report

Balance Sheet Rs in Crores Cash Flow Statement Rs in Crores

Please refer to the Disclaimers at the end of this Report

Objects of the Issue:

Narnolia Securities Ltd

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

S Chand Organization Structure

Narnolia Securities Ltd

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

Company Data Key Highlights of the Report:

With this expansion and the acquisition of cement plants of Jaiprakash

Please refer to the Disclaimers at the end of this Report

Please refer to the Disclaimers at the end of this Report

View & Valuation

Please refer to the Disclaimers at the end of this Report

600 575 540

20% QoQ growth in sales volume Realization declined 2% sequentially

Volume (MT) Realisation (INR/ton)

Please refer to the Disclaimers at the end of this Report

Company Data Key Highlights of the Report:

RoE to maintain over 13%

Reliance commissions ethane receipt & handling facilities , at its Dahej