Emerging Giants Day: No Dearth of Opportunities!

Emerging Giants Day
CONFERENCE TAKEAWAYS February 26, 2020
No dearth of opportunities! Accounting/forensic summary

Greatn Pre-tax CAGR (%)
Ten high-quality ‘Emerging Giants’ participated in the fifth iteration of Acctg
ess RoCE (FY17-
Name Decile
our semi-annual ‘Emerging Giants’ Day. Representatives of over 60 Score (%)* 20E)^
marquee funds attended. Market-cap of participating corporates range FY19 FY19 FY19 Sales EPS
from US$0.2bn-0.9bn, including MCX (largest), VIP Industries, MAS MCX N/A N/A 14 15 19
Financials, GMM Pfaudler, Laurus Labs, Century Plyboards India, VIP Industries D9 92 37 14 29
Garware Technical Fibres, Alkyl Amines, CCL Products and Safari
MAS Fin. Serv. N/A N/A 3 7
Industries (smallest). Interaction with managements of these corporates 31
indicates: (1) Capacity addition (debottlenecking existing/fresh GMM Pfaudler D8 100 27 21 38
additions) amid demand uptick should drive growth across companies; Laurus Labs D5 42 7 14 (0)
(2) Retail, SME, affordable housing lending to drive >20% CAGR AUM Century Ply. D7 67 17 10 1
growth (medium term) for MAS Financials; (3) Focus of luggage Garware Tech. D4 67 33 9 24
companies remains on improving profitability through in-house
Alkyl Amines D5 67 25 23 44
manufacturing, back-end efficiencies and favourable operating
leverage; and (4) Supply chain disruption for companies/customers CCL Products D4 58 18 7 10
given China coronavirus outbreak could hurt near-term revenue across Safari Ind. D10 58 17 28 50
sectors. Source: Bloomberg, Ambit Capital research; Note:
Accounting decile and greatness score not available
Company-wise takeaways for BFSI; NA stands for not applicable; *RoA for MAS ;
^consensus estimates.
MCX: Management commentary indicates increasing share of ETFs/MFs’
commodity schemes can be a key driver for surge in volumes due to their need
to enter into commodity derivatives.
VIP Industries: Management is taking internal initiatives to revive the growth;
current gross margins should sustain. However, Coronavirus breakout in China
could impact revenue for 1QFY21.
MAS Financials: MAS aspires to grow AUM at ~20% CAGR over the next 10
years driven by micro/small enterprise loans and affordable housing loans.
GMM Pfaudler: Management commentary indicates healthy order book for
the next two quarters owing to momentum in specialty chemicals and
agrochemicals. Hyderabad Pharma City clearances will spur pharma demand.
Laurus Labs: Laurus is a market leader in ARV APIs and is in the midst of
forward integrating into formulations, with initial success in TLD (18% market
share). Other segments that would contribute to growth are oncology APIs,
synthesis and non-ARV formulations, with most of these initiatives being mix-
accretive.
Century Plyboards India: Management highlighted that changes around
distribution architecture for plyboards are showing results and likely to drive
revenue growth despite slump in real estate.
Garware Technical Fibres: Management commentary indicates increasing Research Analysts
penetration of agri-nets and geo-synthetics will drive growth in India.
Nitin Bhasin
Aquaculture is driving growth in the international market.
nitin.bhasin@ambit.co
Alkyl Amines: Management highlighted that acetonitrile continues to enjoy Tel: +91 22 6623 3241
higher realizations. Further, outlook for domestic amines industry remains Karan Khanna, CFA
positive; management expects 10-15% volume growth over the next 3-5 years. karan.khanna@ambit.co
CCL Products: Management commentary indicates European business and Tel: +91 22 6623 3251
smaller packaging have evinced positive response in a few European countries. Nikhil Mathur, CFA
nikhil.mathur@ambit.co
Safari Industries: Management highlighted that Safari will continue to
Tel: +91 22 6623 3220
outpace industry growth with improvement in profitability. However,
Coronavirus breakout in China could impact revenue for 1QFY21. Udit Kariwala, CFA
udit.kariwala@ambit.co
Tel: +91 22 6623 3197
Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital
may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.
Sector Name
Exhibit 1: Financial and business snapshot of companies that participated in ‘Emerging Giants’ day
FY19 financials
Ratios (%, FY19) TTM valuations (x)
M-Cap (Rs mn)
Company Sector Summary
(Rs bn) EBITDA pre-tax EV/
Sales EBITDA PAT RoE P/E P/B
margin RoCE* EBITDA
MCX is the largest commodity exchange in India
MCX Mid-Caps 68 4,000 1,940 1,460 48% 14% 13% 29.3 5.2 23.0 with leadership position in bullion and base
metals.
VIP is India’s leading luggage brand (~55%
organized share), #1 player (value terms) in
VIP Industries Luggage 63 17,847 2,308 1,453 13% 37% 25% 35.7 10.8 26.7
backpacks and making inroads into ladies
handbags (<2% share, US$1bn market).
Gujarat-based NBFC catering to micro-
MAS Financial
BSFI 59 5,505 4,657 1,432 85% 3% 19% 38.0 6.4 15.5 enterprise/SME loans (~62%/~28% of AUM);
Services
operations across Gujarat/ Maharashtra
An MNC subsidiary, GMM is market leader
(>50% share) of the niche Rs6bn domestic GL
Capital
GMM Pfaudler 48 5,026 770 506 15% 27% 20% 65.5 17.7 60.3 equipment industry. Superior quality, given global
Goods
parentage and manufacturing experience, drives
preference for GMM vs peers.
Leader in ARV API with 50%/20% market share in

EFV/TDF APIs; currently in midst of forward
Laurus Labs Healthcare 46 22,919 3,560 938 16% 7% 6% 31.0 3.2 10.8
integration into ARV formulations, while other
APIs/CRAMS are steady growth drivers
Century ply is a leading plywood brand in India
Century Building
34 22,800 3,040 1,480 13% 17% 16% 20.4 3.2 12.6 having pan India presence. It is a leading player
Plyboards India Materials
in plyboards, MDF and laminates.
One of the leading players in technical textiles
Garware Technical providing specialist solutions to cordage and other
34 10,178 1,828 1,257 18% 33% 21% 23.9 5.2 16.4
Technical Fibres Textiles industries; product portfolio ranges across fishing
shipping, infrastructure, aquaculture and sports.
India’s second-largest manufacturer of amines,
amine derivatives and specialty chemicals; strong
Alkyl Amines Chemicals 34 8,464 1,629 861 19% 25% 24% 22.1 8.9 21.6 product portfolio of >100 SKUs which are mostly
developed in-house and primarily finds
application in pharma and agrochemicals.
CCL is world’s largest private label instant coffee
manufacturer with capacity of 35kTPA. Its recent
Consumer
CCL Products 31 10,814 2,455 1,549 23% 18% 19% 20.9 3.9 14.1 foray in the domestic coffee market with brand
staples
Continental Coffee offers products across instant
coffee, R&G coffee and premixes.
India's third-largest luggage/backpack maker in
India (revenue of Rs5.8bn, FY19) after VIP
Safari Industries Luggage 14 5,777 545 272 9% 17% 14% 51.1 6.9 26.2
Industries (market leader) and Samsonite India
(second-largest).
Source: Bloomberg, Ambit Capital research; Note: * ROA for MAS.
26 February, 2020 Ambit Capital Pvt. Ltd. Page 2

Sector Name
MCX NOT RATED

Increasing ETFs can be an opportunity
Quick Insight
Increasing share of ETFs/MFs’ commodity schemes can be a key driver for
surge in volumes due to their need to enter into commodity derivatives.
Analysis
Revision in technology cost related to platform will be announced by Sep’20
and it is possible that we see a positive margin surprise regarding the same. News Note
Whilst CTT has affected volumes for MCX, approval for custodians can help Meeting Note 
drive high foreign volume on commodity exchanges. Currently, MCX is
trading close to its 5-year cross-cyclical average at 30x TTM PE. We like this
name for the possibility of surge in volumes due to increased option trading, Stock Information
increased volumes on account of ETFs/MFs and possibility of margin Bloomberg Code: MCX IN
expansion on the back of revision in platform-related technology costs. Risks:
CMP (Rs): 1,332
Any adverse regulatory change.
TP (Rs): NA
Mcap (Rs bn/US$ bn): 68/0.9
Key takeaways 6M ADV (Rs mn/US$ mn): 29/0.4
Increasing share of ETFs/MFs foray into commodities is an opportunity:

Management highlighted that increasing share of Gold/Commodity ETF is likely to be Stock Performance (%)
an opportunity as globally all commodity-linked ETFs use commodity derivatives. 1M 3M 12M YTD
Moreover, MFs like Tata and Nippon have also launched commodity funds. These two Absolute (2.4) 15.3 96.5 14.1
factors are likely to improve the volumes on MCX.
Rel. to Sensex 0.8 16.8 85.3 16.4
Decision on revision of variable costs in Sep’20: Management highlighted that Source: Bloomberg, Ambit Capital research
their current technology contract ends in Sep’22. However, they will take a decision
on the revision of this contract by Sep’20. As per the current structure, MCX pays a Key financials (Rs mn)
fixed component along with 10.4% of its yield to its technology partner. This revision FY17 FY18 FY19
of contract can positively surprise going forward. Revenue 3,590 3,500 4,000
Approval of custodians can boost foreign participation: Management EBITDA 1,790 1,620 1,940
highlighted that approval of 2 custodians by SEBI will aid foreign participation to EPS Rs 24.8 21.2 28.7
participate more onto the platform. Source: Company, Ambit Capital research
CTT has hurt volumes: Management highlighted that the high CTT costs levied by
the GOI has hurt volumes due to the surge in transaction costs.
Valuations – Rich but closer to historical averages
Currently, MCX is trading close to its cross-cyclical average at 30x TTM PE. Positives
for this company can emanate from possibility of surge in volumes on the back of
increased option trading, increased volumes on account of ETFs/MFs and possibility
of margin expansion on the back of revision in platform-related technology costs.
However, key concerns are any adverse regulatory change which will affect the
company.
Research Analysts
Nitin Bhasin
Tel: +91 22 6623 3241
Dhruv Jain
Tel: +91 22 6623 3177
dhruv.jain@ambit.co

Sector Name
VIP Industries BUY

Rising brand salience Quick Insight
VIP lost market share in 3QFY20 on ceding an institutional order, decrease in
e-commerce share and stabilization of senior management. Internal Analysis
initiatives are on to revive growth. It expects current gross margins to sustain
News Note
with increasing Bangladesh share (sub-20% now) and negotiations with
China vendors. VIP sees huge opportunity for Caprese and plans to take it Meeting Note 
international. There is possibility of supply chain disruption amid Coronavirus
breakout in China. Current inventory provides visibility till mid-April.
Meanwhile, we expect VIP to report 24% EPS CAGR over FY19-23E despite Stock Information
near-term consumption slowdown led by: (1) 11% revenue CAGR on rising Bloomberg Code: VIP IN
contribution of backpacks/handbags and (2) EBITDA margin expansion to CMP (Rs): 444
18% (12.6% in FY19) led by captive production, premiumisation and TP (Rs): 540
operating leverage. VIP trades at 27x FY21E P/E. We remain BUYers with TP
of Rs540.
6M ADV (Rs mn/US$ mn): 142/2
Key takeaways Stock Performance (%)

Near-term outlook on growth: Management attributed market share loss in 1M 3M 12M YTD
3QFY20 (revenue grew 1% YoY) to: (i) Ceding an institutional order worth Rs0.5bn Absolute (4) 2 4 3
amid lower price point; (ii) lower market share in e-commerce; and (iii) stabilization Rel. to Sensex (1) 4 (7) 5
of senior management team. Further, management is taking internal initiatives to Source: Bloomberg, Ambit Capital research
revive the growth in line with industry growth.
Margins to sustain: VIP’s 3QFY20 GM came in at 53.3% (expanded 6ppt YoY) led Key financials (Rs mn)
by: (i) increasing share of Bangladesh (sub-20% currently); and (ii) negotiations with FY19 FY20E FY21E
vendors in China. Management highlighted that these margins are sustainable. Revenue 17,847 18,649 20,244
Further, share of hard luggage increased to 30% currently versus 28% in FY19. EBITDA 2,308 2,729 3,327
Opportunity for Caprese is huge: Management highlighted that Caprese has EPS Rs 10.3 13.6 16.6
become the largest Indian brand in women’s handbags. The company is sourcing Source: Company, Ambit Capital research
Caprese handbags/luggage from China and plans to shift the sourcing to
India/Bangladesh for cost benefits. However, the company does not have
management bandwidth currently to manufacture Caprese in India/Bangladesh. The
company plans to make Caprese an international brand.
Update on Bangladesh: Management highlighted that quality of luggage
manufactured in Bangladesh is better than that sourced from China. VIP intends to
increase the share of Bangladesh hereon.
Near-term disruption amid Coronavirus breakout in China: Management
highlighted there could be supply chain disruption amid Coronavirus breakout in
China, which could impact revenue in 1QFY21 (1Q is traditionally strong for luggage
players in India). However, current inventory provides visibility till mid-April.
Valuations
Despite near-term headwinds, we remain structurally bullish on the long growth
runway for organised luggage players given GST-led tailwinds amid change in
perception from ‘commodity’ to ‘brand’.
Over FY19-23E, we expect VIP to report 24% EPS CAGR, led by: (1) 11% revenue
Research Analysts
CAGR from rising contribution of backpacks/handbags, and (2) EBITDA margin
improving to 18% (vs 12.6% in FY19) led by captive production, premiumisation and Karan Khanna, CFA
operating leverage. VIP is trading at 27x FY21 P/E; 12-month TP of Rs540 is built on karan.khanna@ambit.co
high-teen revenue growth over the next decade as penetration and brand salience Tel: +91 22 6623 3251
rise. Read here and here for more. Amandeep Singh Grover
amandeep.grover@ambit.co
Tel: +91 22 6623 3082

Sector Name
MAS Financial Services NOT RATED

Ability to scale-up while managing inherent risks key
Management maintained long term AUM growth guidance of ~20%.
Quick Insight
Long/healthy track record, PSL eligible book (~85%) and PSU bank’s
appetite for direct assignment helped sail through tight system liquidity. Analysis
Asset quality of corporate book would remain stable with low single News Note
borrower concentration and low leverage/high capital cushion. Retail book Meeting Note 
could see some deterioration given slowing macros. High dependence on
bank borrowings will enable stability of margins, driving RoA of 2.0-2.5% in
the medium term. Asset book to be split 50-50 between corporate/retail over Stock Information
long term with retail lending focused on Gujarat, Maharashtra, Rajasthan
Bloomberg Code: MASFIN IN
and Madhya Pradesh. MAS trades at 5.5x FY20E P/B and 31.3x FY20E P/E, 70-
80% premium to sector average. It reported average RoA/RoE of 2.8%/21.5% CMP (Rs): 1,074
over FY17-19, which explains the premium valuations. TP (Rs): NA
6M ADV (Rs mn/US$ mn): 27/0.4
Key takeaways
AUM growth of ~20%: MAS aspires to grow AUM at ~20% CAGR over the next 10
years driven by micro loans (up to Rs0.3mn ticket size), small enterprise loans (up to Stock Performance (%)
Rs50mn ticket size) and affordable housing loans (up to Rs1mn ticket size). AUM is 1M 3M 12M YTD
currently concentrated in Gujarat. Retail footprint is increasing across Maharashtra, Absolute 21 51 99 24
Rajasthan and Madhya Pradesh. Asset book would be split 50-50 between
Rel. to Sensex 24 52 88 26
corporate/retail over the long term.
Source: Bloomberg, Ambit Capital research
PSL eligible book and superior execution garnered liquidity: Post IL&FS default
in Sept’18, the NBFC sector was hit by a liquidity crisis. MAS’ long operating history
with superior execution, reflected in contained delinquency (GNPA in the range of
1.3-1.4%) and profitability, enabled it sail through the liquidity crisis. Large part of
the book (~85%) being PSL eligible kept the direct assignment funding (~50% of
borrowing as of Dec’19) route from PSU banks open. High dependence on bank
borrowings enabled stability of margins though the crisis. Management guided for
improving cost of funds with liquidity for well-run NBFCs gradually improving.
Asset quality contained: As of Dec’19 MAS’ asset quality in the corporate segment
remained NIL. Low single borrower concentration, high capital cushion (low leverage)
and entrenched engagement in corporate accounts (currently ~133 partners) have
been effective till date. As MAS scales up in the corporate segment, ability to manage
partner relations with similar rigour would be a key asset quality/valuation driver. As
of Dec’19, MAS reported GNPA of 1.29% on AUM and 1.89% on book assets.
Factoring NIL gross NPAs in the corporate segment implies retail gross NPA should be
~2.5% of AUM. Management guided retail book could see some cyclical
deterioration given slowing macros. Stress in MFI exposure in Assam has not had
much impact given modest state exposure of 10-15%.
ROA target of 2.0-2.5%: The management believes the company can generate
sustainable ROA of 2.0-2.5% vs 2.4-3.2% over the last 3 years.
Valuations
MAS trades at 5.5x FY20E P/B and 31.3x FY20E P/E, which is at 70-80% premium to Research Analysts
the sector average. Valuation premium is led by well-executed business strategy. Udit Kariwala, CFA
Ability to scale up its franchise across newer geographies (Karnataka, Madhya udit.kariwala@ambit.co
Pradesh, Tamil Nadu and Delhi NCT) along with expanding partnerships (currently Tel: +91 22 6623 3197
~133) while managing inherent risks in its business over economic cycles will be a Pankaj Agarwal, CFA
key valuation driver. pankaj.agarwal@ambit.co
Tel: +91 22 3043 3206
Shreya Khandelwal
shreya.khandelwal@ambit.co
Tel: +91 22 6623 3292

Sector Name
GMM Pfaudler NOT RATED

Chemicals/Pharma hold the key
Growth in GL segment (30% YoY, 9MFY20) was led by strong capex in
Quick Insight
chemicals end-market. Pharma is expected to contribute in the next 2 years.
Healthy order book lends visibility for two quarters while GL capacity Analysis
expansion should drive growth. Increasing share of HE (12% now) should News Note
reduce dependence on GL (70%). The company expects a couple of acid Meeting Note 
recovery orders to come in FY21. It guided for CHF13mn revenue from Mavag
in FY20. We appreciate GMM’s ability to deliver 30-35% FY19-22 EPS CAGR
given industry tailwinds and balance sheet strength (Rs0.9bn 1HFY20 net Stock Information
cash) which, amid positive FCF, should aid future capex. But we acknowledge
Bloomberg Code: GMM IN
current valuation of 43x FY21 EPS (consensus) is punchy. Sustenance of rich
valuations would depend on longevity of current demand uptick in chemicals CMP (Rs): 3,261
and revival of orders from pharma end-market (30% GL revenue share) and TP (Rs): NA
order pick-up in newer technologies like acid recovery and HE. Mcap (Rs bn/US$ bn): 48/0.7
6M ADV (Rs mn/US$ mn): 61/0.8
Key takeaways
Stock Performance (%)
Chemical capex is driving GL growth; Pharma to contribute in next 2 years: 1M 3M 12M YTD
GMM commands ~55% share in the ~Rs6bn domestic market. Over the last two
Absolute 29 95 199 74
years, strong capex activity in chemicals end-market amid shutdown of plants in
China was driving growth for GL (30% YoY revenue growth in 9MFY20). With the Rel. to Sensex 32 97 188 77
Centre now granting National Investment Manufacturing Zone (NIMZ) status to Source: Bloomberg, Ambit Capital research
Hyderabad Pharma City, management expects increasing demand for GLE from
pharma end-industries in the next two years.
Key financials (Rs mn)
Strong order book; capacity expansion in pipeline: Management commentary
FY17 FY18 FY19
indicates healthy order book, which lends visibility for next 2 quarters. GMM has
Revenue 3,530 4,057 5,026
ordered two new gas furnaces, which are expected to be delivered in CY20.
EBITDA 475 621 770
Bullish on HE segment; dependence on GL to reduce: Management highlighted
EPS (Rs.) 21.3 29.2 34.6
that current contribution of GL segment (70%) is expected to reduce to 60% on
Source: Company, Ambit Capital research
increasing contribution from HE segment (currently ~12%). Management expects
healthy growth in HE led by: (i) Pfaudler’s network; (ii) demand from Middle East oil
companies; and (iii) orders from domestic oil companies. GMM expects HE margins
would reach >25% vs low teens currently.
Acid recovery orders in FY21E: Management highlighted that a couple of acid
recovery orders worth Rs100-200mn are expected to materialize in FY21.
Update on Swiss subsidiary Mavag: Management guided CHF13mn revenue from
Mavag for FY20. However, EBITDA growth is likely to be disproportionately higher
owing to operating leverage.
Valuations
With 9MFY20 consolidated revenue/EBITDA/PAT growth of 26%/55%/60% YoY, GMM
continues to report healthy growth numbers. Healthy order backlog in the domestic
GL market, sustenance of volume-driven operating leverage benefits as order book
has grown substantially YoY, and uptrend in exports through both parent Pfaudler
and standalone channels imply current robust pace of growth should continue.
Research Analysts
However, we acknowledge current valuations (43x consensus FY21 EPS) are punchy.
Sustenance of rich valuations would depend on longevity of the current demand Karan Khanna, CFA
uptick in chemicals and revival of orders from pharma end-market (30% GL share) karan.khanna@ambit.co
and order pick-up in newer technologies such as acid recovery and HE. Tel: +91 22 3043 3251
Amandeep Singh Grover
Tel: +91 22 3043 3082

Sector Name
Laurus Labs NOT RATED

Mix accretion on the cards
Quick Insight
Process innovation and integrated operations are indispensable levers to
gain market share in ARV. Backward integration into KSMs has ensured 18%
Analysis
market share in TLD within 12 months of launch. Post current Rs60mn
brownfield expansion in formulations by June-2020, Laurus would require News Note
further capex to support volume gains in products like TEE and TLE, which Meeting Note 
could be in the range Rs2-3bn annually in FY21/22. Laurus has better control
on gross margins now owing to backward integration and most initiatives
being mix-accretive in nature. Working capital would remain elevated due to Stock Information
Laurus’ foray into formulations, which entails low inventory turnover ratio. Bloomberg Code: LAURUS IN
Laurus’ franchise is built on Dr. Satyanarayana’s process-chemistry skills and
CMP (Rs): 431
experienced professionals across functions like R&D, quality, US generics,
TP (Rs): NA
synthesis and regulatory affairs. Stock trades at 22x FY20 EPS.
Mcap (Rs bn/US$ bn): 46/641
6M ADV (Rs mn/US$ mn): 56.3/0.8
Key takeaways
LMIC ARV market size is USD1.8bn: Sovereign and philanthropic agencies fund Stock Performance (%)
the LMIC ARV market, with 2016-19 spend being flat. Funding constraints necessitate 1M 3M 12M YTD
price controls, which would be achieved over FY20-22 via usual tender rollouts and Absolute 5 28 28 20
transition to low-cost DTG regimen from EFV. Hence, process innovation and
integrated operations are indispensable levers to gain market share.
Early signs in API-to-formulations transition in ARV are encouraging: Laurus is
leveraging its process leadership in EFV/TDF (50%/20% market share) in 1L adult TLD Key financials (Rs mn)
combination. Backward integration into KSMs has ensured 18% market share within FY17 FY18 FY19
12 months of launch. Laurus would partly displace incumbents like Mylan, Aurobindo
Revenue 19,315 20,690 22,919
and Hetero with regards to market share.
EBITDA 4,076 4,133 3,560
Non-LMIC segments would also be growth contributors: Non-LMIC revenue
growth hinges on: (i) EU formulations uptick; (ii) steady synthesis growth as Aspen EPS Rs 17.9 15.7 8.8
sales stabilizes at Rs1.6-1.7bn; and (iii) gemcitabine backward integration-led Source: Company, Ambit Capital research
oncology sales reversal.
Capex needs would remain significant: Post current Rs60mn brownfield
expansion in formulations, Laurus would require further capex to support volume
gains in TEE and TLE. This could be in the range Rs2-3bn annually in FY21/22.
FY19 like margin disruption is unlikely now: Margin pressure witnessed in FY19
was due to Chinese input supply disruption and negative operating leverage
stemming from heightened capex. Capex would continue for formulations, but the
company has better control on gross margins now and most of the initiatives are mix-
accretive in nature.
Growth in synthesis would stem from non-Aspen programs: Laurus’ synthesis
topline is currently split 50/50 into Aspen/others. Management comments from
recent earnings call indicate that revenue from Aspen will peak out at Rs1.6-1.7bn.
However, current programs would move from development to commercialization
stage, which would ensure growth over FY20-22.
Working capital would remain elevated: This is owing to Laurus’ foray into
formulations, which entails low inventory turnover ratio. Research Analysts
Oncology growth reversal on the cards: The company is backward integrated now Nikhil Mathur, CFA
in a key API gemcitabine and expects growth reversal in FY21. Tel: +91 22 6623 3220
nikhil.mathur@ambit.co
Kushagra Bhattar
Tel: +91 22 6623 3062
kushagra.bhattar@ambit.co

Sector Name
Century Plyboards NOT RATED

Improving things which are under control
Quick Insight
Changes around distribution architecture for ply boards are showing result
and are likely to drive revenue growth despite real estate slump. MDF is
Analysis
growing steadily and competitive intensity has modetrated as supplies of last
year were absorbed, thus margin in this segment will improve steadily. News Note
Management expects capex of ~Rs4.5bn on MDF plant which is expected to Meeting Note 
be operational in 18-24 months having capacity of 600,000cbm. Laslty,
company is planning to implement similar incentive schemes (as in ply) for
laminates retailers to boost sales. Currently, the stock trades at depleted Stock Information
multiples of 16x one-year forward P/E (consensus earnings), one of the Bloomberg Code: CPBI IN
lowest multiples seen in the last 6-7 years. Limited benefits of GST, real
CMP (Rs): 155
estate slump and unsuccessful international investments led to weak stock
TP (Rs): NA
performance. Very well knowing limited chances of immediate demand
revival, we urge investors to keep this stock on radar as Century can post 10- Mcap (Rs bn/US$ bn): 34/0.5
15% revenue growth from volumes and realisations leading to some 6M ADV (Rs mn/US$ mn): 41.7/0.6
EBITDAM improvement.
Key takeaways 1M 3M 12M YTD

Absolute (9.8) (8.1) (6.5) (3.5)
New initiatives for plyboards showing results: Management highlighted that new
Rel. to Sensex (6.6) (6.6) (17.7) (1.1)
market strategy for plyboards to incentivize contractors directly (and not through
dealers) adopted through external agency ‘Vector consulting’ is showing positive
results. Cities where they have implemented this scheme have seen growth of 15% in Key financials (Rs mn)
plyboard segment vs pan-India growth of 2%. This scheme will be implemented
FY17 FY18 FY19
across network by FY22 which will drive plyboard revenue growth going forward. The
success of this initiative has also led to marginal price increases in a few markets. Revenue 18,180 20,240 22,800
EBITDA 3,120 3,310 3,040
Overall ply market remains tepid: Ply demand remains tepid due to the slump in
real estate demand; however, Century is attempting to gain market share from EPS Rs 8.56 7.33 6.67
weaker unorganized players through new incentive initiatives. Source: Company, Ambit Capital research
MDF growing at a brisk pace; new supply now absorbed: Management

indicated that MDF demand is growing at a brisk pace at 20-25%. Management
highlighted that whilst excessive competitive intensity ensured that margins remained
depressed last year, new supply has been absorbed and margins are expected to
remain steady.
MDF plant likely to be operational in 18-24 months: Management indicated that
new MDF plant will be operational in ~24 months. Whilst the development period for
the plant is likely to be only 15 months, government approvals due to NGT order
might delay the plant. Management expects to incur capex of ~Rs4.5bn on this plant
which will produce 600,000cbm of MDF with an optionality of doubling the capacity
at minimum capex going forward.
Plan to launch incentive scheme for laminates: Century has been gaining
traction in their laminates business through launch of new designs. Management
indicated they plan to launch similar incentive schemes for laminates through
targeting retailers.
Valuations – Difficult for them to go lower
Currently, Century ply is trading at 16x one-year forward P/E (consensus earnings) Research Analysts
which is the lowest in the last 6-7 years. Whilst the stock has corrected on the back of
Nitin Bhasin
tepid real estate demand and write-offs taken in Laos, we urge investors to keep this
Tel: +91 22 6623 3241
stock on radar as new strategic initiatives and MDF plant capacity addition can drive
10-15% revenue growth and 18-20% PAT growth
Dhruv Jain
Tel: +916 22 6623 3177
dhruv.jain@ambit.co

Sector Name
Garware Technical Fibres NOT RATED

Sustained thrust on innovations
Quick Insight
Thrust remains on product innovation. GTFL has filed ~45 patents and was
granted ~11 over the last five years. It is a dominant player in domestic
Analysis
fisheries (60% share). The company is a significant player in international
aquaculture with 90-95% share in Canada, 25% in Chile, 30-35% in Norway News Note
and 70%+ in Scotland. Management sees huge opportunity in domestic Meeting Note 
(agriculture, geosynthetics) and international (aquaculture) businesses.
Capex guidance is Rs0.4-0.5bn. The company is scouting for inorganic growth
opportunities. We believe current valuations (24x TTM P/E) reflect superior Stock Information
balance sheet strength (Rs2.6bn net cash 1HFY20, 21% FY19 RoE) and strong Bloomberg Code: GTFL IN
technical capabilities (~45 patents over the years). Re-rating hinges on
CMP (Rs): 1,543
ability to expand domestic (via rising penetration) and international
(market-share gains and newer SKUs’ success) businesses. TP (Rs): NA
Thrust remains on product innovation: Management highlighted that mission is to
provide innovative applications and focused solutions to enhance value for customers Stock Performance (%)
globally. Currently, the company has >20k SKUs. It has filed ~45 patents and has
1M 3M 12M YTD
been granted ~11 over the last five years. Further, recent products (V2 nets/
Sapphire Sealpro) witnessed good traction amongst the customers. Absolute 1 33 48 28
Dominant player in domestic fisheries market: Domestic fisheries accounts for
~20% of GTFL’s revenue. Further, the company has ~60% market share in domestic
fisheries. Globally, GTFL is present in Russia, America, Canada and Northern Europe
in the fisheries segment. Key financials (Rs mn)
Significant player in international aquaculture business: Aquaculture accounts FY17 FY18 FY19
for 30-35% of GTFL’s revenue. The company’s focus is on Salmon farming in Revenue 8,459 8,846 10,178
aquaculture, which is the most premium end of the business. Canada, Northern
EBITDA 1,347 1,453 1,828
Europe, Australia, and South American (Chile) are the key geographies. GTFL has 90-
95% share in Canada, 25% in Chile, 30-35% in Norway and 70%+ in Scotland. EPS (Rs.) 38.6 48.1 57.4
Huge opportunity in domestic (agriculture, geosynthetics) and international
business (aquaculture): Management highlighted that domestically, increasing
penetration of agri-nets, geo-synthetics will drive growth. Further, in defence, GTFL
makes a lot of tech textile based fabric solutions. Furthermore, aquaculture is driving
growth in the international market. Management highlighted that Canada and Chile
have large scope for salmon production and Norway is expected to increase salmon
farming by 5x over the next 5 years. Management also highlighted that no single
customer contributes to >5% of total revenue.
Steady capex and scouting for inorganic growth opportunity: Management
guided for Rs0.4-0.5bn capex per year. Further, the company is constantly scouting
for inorganic growth opportunities.
Valuations
Management reiterated stance of improving profitability over FY18-23 (envisions to
doubling profits over FY18-23) led by expanding distribution reach in newer markets
(like Chile) and maintaining market share in existing markets/segments through
newer, differentiated value-added solutions.
Current valuations (24x TTM P/E) reflect the company’s superior balance sheet Research Analysts
strength (net cash of Rs2.6bn in 1HFY20, 21% FY19 RoE) and strong technical Karan Khanna, CFA
capabilities (cumulative 40+ patents over the years). Valuation re-rating hinges on karan.khanna@ambit.co
GTFL’s ability to expand domestic business (through rising penetration of technical Tel: +91 22 6623 3251
textiles in agri nets, defence) and international business (through market-share gains
and success in newer SKUs, such as X12, V2 and Sapphire Ultracore).
Tel: +91 22 6623 3082

Sector Name
Alkyl Amines NOT RATED

Capacity addition + mix improvement Quick Insight
Acetonitrile continues to enjoy higher realizations at Rs250-300 per kg vs
Rs125-150 per kg earlier given global acrylonitrile plant shutdown. Focus on Analysis
R&D remains intact; company targets to launch two new products each year.
News Note
Capex guidance is Rs2.5bn over the next three years. Outlook for domestic
amines industry remains positive; management expects 10-15% volume Meeting Note 
growth over next 3-5 years. There could be near-term impact amid
Coronavirus breakout in China given supply chain disruption for Alkyl’s
customers. Capacity addition (debottlenecking existing/fresh additions) amid Stock Information
demand uptick and improving product mix (higher share of derivatives) Bloomberg Code: AACL IN
should drive 25-30% earnings CAGR over FY19- 23E. Current valuations (22x CMP (Rs): 1,651
TTM adj. EPS) are attractive given favourable industry dynamics (duopolistic
TP (Rs): NA
industry, huge import substitution and high fixed costs), healthy 25% pre-tax
RoCE (FY19) and strong cash conversion (113% 1HFY20 CFO-EBITDA) to fund Mcap (Rs bn/US$ bn): 34/0.5
future capex. 6M ADV (Rs mn/US$ mn): 24/0.3

Acetonitrile continues to enjoy higher realizations: Management highlighted Absolute 27 62 130 52
that acetonitrile continues to enjoy high realizations in global markets led by supply Rel. to Sensex 30 64 119 55
constraint amid global acrylonitrile plant shutdown by INEOS. Current realizations of
acetonitrile are at Rs250-300 per kg versus Rs125-150 per kg earlier. Management
expects current realizations to sustain in the near term.
Focus on R&D remains intact: Management intends to double R&D spend (Rs37mn Key financials (Rs mn)
in FY19). Further, company targets to launch two new products every year. FY17 FY18 FY19
Dependence on a single customer is low: Aurobindo, Dr. Reddy’s and Mylan are Revenue 5,006 6,162 8,464
amongst the large customers; however, no single customer contributes >5% of total EBITDA 936 1,168 1,629
revenue. Further, revenue contribution from top 10 customers is ~40% and the EPS (Rs.) 24.6 31.2 40.2
company currently has 350-400 customers. Source: Company, Ambit Capital research
Outlook for domestic amines industry remains positive: Management

highlighted that the outlook for the domestic amines industry remains strong given
turnaround in domestic pharma and agrochem sectors. Management guided for 15%
YoY volume growth for FY20E and 10-15% volume growth over next 3-5 years.
Increasing capacity and capex guidance: Management intends to incur Rs2.5bn
capex over the next three years for new products and infrastructure development.
Capex for FY20E/21E is expected to be ~Rs0.8bn/Rs1.2bn respectively. Near term
expansions include debottlenecking of methylamine capacity from 30ktpa to 45ktpa
and putting up a new acetonitrile plant (15ktpa) at Dahej.
Near-term impact amid Coronavirus breakout in China: Alkyl does not source
RM from China. However, end-user industries (pharma and agri-chemicals) would
face supply chain disruption amid sourcing of ingredients from China, which could
impact amine players in the near term.
Valuations
Alkyl currently trades at 22x TTM adj. EPS, which is at 79% premium to Balaji’s 12x.
Premium valuations to Balaji are justified given superior technical capabilities, strong Research Analysts
cash conversion and better capital allocation.
Karan Khanna, CFA
Despite the premium, Alkyl’s current valuations are reasonable in light of favourable karan.khanna@ambit.co
industry dynamics (duopolistic industry, huge import substitution and high fixed costs) Tel: +91 22 3043 3251
and potential to report 25-30% earnings CAGR over FY19-23E led by capacity
expansion at Dahej and rising share of value-added products such as derivatives and
specialties.
Tel: +91 22 3043 3082
Click here for our 08 September, 2017 beachcombing note for more details.

Sector Name
CCL Products NOT RATED

Using product experience to build a brand Quick Insight
Management highlighted that they are witnessing strong traction in their
European business and small-size packaging has seen positive response in a Analysis
few European countries. Further, the Swiss subsidiary is also helping in
News Note
servicing the European institutional clients better. CCL is presently carrying a
strong orderbook (~75% plus of capacity for next year) and additional capex Meeting Note 
will be incurred if the momentum continues. Focus on building domestic
business remains high with product knowledge helping in building a variety
of new SKUs and institutional tie-ups (private labels); high brandex will Stock Information
continue to build scale given precedence over near-term profitability. At 20x Bloomberg Code: CCLP IN
TTM PAT, CCL trades at the lower end of last four-year valuation. With CMP (Rs): 237
median pre-tax RoCE >22% over FY16-19, we maintain positive stance and
TP (Rs): NA
believe higher multiples are justified given strong B2B coffee business and
transition to B2C that could enjoy FMCG-like characteristics (higher gross
margin, shorter WC cycle). 6M ADV (Rs mn/US$ mn): 73.8/1.0

Strong traction witnessed in Europe, a validation of product quality: Absolute 21.2 12.3 (16.3) 17.5
Management highlighted that their efforts to improve offering by putting up Rel. to Sensex 24.4 13.8 (27.5) 19.9
packaging units is yielding positive results. They have forayed into supplying to 4
super markets in Europe which have witnessed stock-out situation due to positive
response, especially in small-size packaging. Incrementally, management converted
the Swiss facility into a custom-bound warehouse which is leading to better overall Key financials (Rs mn)
margins for them apart from ability to service the customer locally. Freeze-dried
FY17 FY18 FY19
offering and granulation are helping in offering better quality premium products.
Revenue 9,832 11,380 10,814
Currently sitting on a strong orderbook; incremental capex if momentum EBITDA 2,321 2,389 2,455
continues: Management highlighted that they are currently sitting on a strong
EPS (Rs.) 10.1 11.1 11.6
orderbook of 7,500 ton for FY21, implying 83% capacity utilization. Incrementally, if
this strong momentum continues, they could incur capex in the range of ~Rs1-1.5bn
to put in additional capacity of ~1,500-2,000 ton.
Efforts to build a strong B2C brand: Management is innovating a lot more on their
B2C offering through new SKUs. CCL has introduced 4 new flavours in pre-mixed
coffee at lower price point. CCL is also doing significant brandex in the range of
Rs120-150mn in FY20. Management guided that they would close FY20 with ~Rs1bn
of revenue of which 65% will be brand and rest will be private label.
Valuations – lack of a brand is keeping multiples low despite high RoCE
CCL has built a credible business in the coffee processing given its knowledge of
product, value addition offering and cost structure. Steadily growing EBITDA from this
business is being utilized to build a credible Instant Coffee business in India which
can become a large business gradually; opportunity and product knowledge (the
most difficult bit) instill confidence that they will build a credible 2nd brand in India.
From a small base, Continental could grow faster than overall category to achieve
potential retail sales of ~Rs1,500-2,000mn and contribute ~10-15% of consolidated
sales by FY23 and thereon continue with this pace and add some profits. Multiples
today are not building in any benefit for the B2C success.
Research Analysts
At 20x TTM PAT, we see potential for the stock to re-rate given: (i) volume growth and
market share gains in global instant coffee processing; (ii) improvement in margins Nitin Bhasin
(by ~5ppt) from higher share of premium freeze-dried coffee and small-packs; and Tel: +91 22 6623 3241
iii) increasing retail sales under Continental that could transform CCL’s profile from a nitin.bhasin@ambit.co
pure B2B to a combination of B2B-cum-B2C business. Dhruv Jain
Tel: +916 22 6623 3177
dhruv.jain@ambit.co

Sector Name
Safari Industries BUY

Value + aspirational brand => profitability
Quick Insight
Management remains positive on growth outlook, guiding 15-20% revenue
expansion over next 2-3 years led by hypermarkets and e-commerce. Safari
Analysis
expects to be debt-free by end-1HFY21 (debt of Rs0.8bn, Sep’19) with WC
improvement. Outsourcing from Bangladesh (Mar’20) would help expand News Note
GM. Given transition from commodity to brand, ad-spends would increase to Meeting Note 
4.5-5% vs 2.5% average over FY15-19. There is possibility of supply chain
disruption amid Coronavirus breakout in China; current inventory provides
visibility till May. We continue to expect Safari to report 29% EPS CAGR over Stock Information
FY19-23E led by 22% revenue CAGR with success in economy Bloomberg Code: SII IN
SKUs/backpacks. Stock trades at 30x FY21 P/E. We remain BUYers with 12-
CMP (Rs): 622
month TP of Rs850.
TP (Rs): 850
Growth outlook remains positive: Safari’s revenue grew 25% YoY in 9MFY20 (>2x
industry growth). Management guided for 15-20% revenue growth over the next 2-3 Stock Performance (%)
years. Growth would be led by hypermarkets and e-commerce, the fastest growing 1M 3M 12M YTD
channels for the industry. Further, market share of Safari in these channels is Absolute 0 11 (15) 1
relatively high.
Increasing focus on profitability: Safari’s 3QFY20 GM was 45.5% (up 6ppt YoY) Source: Bloomberg, Ambit Capital research
led by better product mix (share of hard luggage increased to 35% in 9MFY20 versus
25% in FY19) and better pricing from vendors in China. Management highlighted that Key financials (Rs mn)
these margins are sustainable. Further, management expects to be debt-free by end- FY19 FY20E FY21E
1HFY21 (debt of Rs0.8bn as on Sep’19) amid WC improvement. Revenue 5,777 7,056 8,591
Sourcing from Bangladesh to drive GM expansion: Management highlighted EBITDA 545 649 804
that the company will start outsourcing part of soft luggage from vendors in EPS Rs 12.2 16.4 20.6
Bangladesh (from Mar’20). This would further expand GM given sourcing from Source: Company, Ambit Capital research
Bangladesh is 15-20% cheaper than that from China.
Transitioning from a commodity to brand: Management guided ad-spends to be
at 4.5-5% of revenue hereon versus 2.5% average over FY15-19. Increasing brandex
should drive successful evolution of Safari from commodity to brand.
Near-term disruption amid Coronavirus breakout in China: Management
highlighted there could be supply chain disruption amid Coronavirus breakout in
China, which could impact revenue in the near term. 1Q is traditionally strong for
luggage players in India. However, current inventory provides visibility till May.
Valuations
Despite near-term headwinds, we remain structurally bullish on the long growth
runway for organised luggage players given GST-led tailwinds amid change in
perception from ‘commodity’ to ‘brand’.
We expect Safari to deliver 29% EPS CAGR over FY19-23E led by 22% revenue CAGR
through success in economy SKUs/backpacks. Safari remains a secular play on rising
penetration of luggage amidst shift in favour of branded players post GST. Safari is
trading at 30x FY21E P/E. Our 12-month TP of Rs850 is built on high-teen revenue
growth over the next decade as Safari transitions from commodity to value-yet- Research Analysts
aspirational brand for masses.
Karan Khanna, CFA
karan.khanna@ambit.co
Tel: +91 22 3043 3251
Tel: +91 22 3043 3082

Sector Name
Institutional Equities Team

Research Analysts
Name Industry Sectors Desk-Phone E-mail
Nitin Bhasin - Head of Research E&C / Infra / Cement / Home Building / Aviation (022) 66233241 nitin.bhasin@ambit.co
Ajit Kumar, CFA, FRM Banking / Financial Services (022) 66233252 ajit.kumar@ambit.co
Amandeep Singh Grover Mid-Caps / Hotels / Real Estate (022) 66233082 amandeep.grover@ambit.co
Ashish Kanodia, CFA Consumer Discretionary (022) 66233264 ashish.kanodia@ambit.co
Ashwin Mehta, CFA Technology (022) 6623 3295 ashwin.mehta@ambit.co
Basudeb Banerjee Automobiles / Auto Ancillaries (022) 66233141 basudeb.banerjee@ambit.co
Darshan Mehta E&C / Infrastructure / Aviation (022) 66233174 darshan.mehta@ambit.co
Deep Shah Media / Telecom / Oil & Gas (022) 66233064 deep.shah@ambit.co
Dhruv Jain Mid-Caps (022) 66233177 dhruv.jain@ambit.co
Karan Khanna, CFA Mid-Caps / Hotels / Real Estate (022) 66233251 karan.khanna@ambit.co
Karan Kokane Automobiles / Auto Ancillaries (022) 66233028 karan.kokane@ambit.co
Kushagra Bhattar Healthcare (022) 66233062 kushagra.bhattar@ambit.co
Nikhil Mathur, CFA Healthcare (022) 66233220 nikhil.mathur@ambit.co
Pankaj Agarwal, CFA Banking / Financial Services (022) 66233206 pankaj.agarwal@ambit.co
Prateek Maheshwari Cement (022) 66233234 prateek.maheshwari@ambit.co
Ritesh Gupta, CFA Consumer Discretionary / Agri & Chemicals (022) 66233242 ritesh.gupta@ambit.co
Satyadeep Jain, CFA Metals & Mining (022) 66233246 satyadeep.jain@ambit.co
Shreya Khandelwal Banking / Financial Services (022) 6623 3292 shreya.khandelwal@ambit.co
Sumit Shekhar Economy / Strategy (022) 66233229 sumit.shekhar@ambit.co
Udit Kariwala, CFA Banking / Financial Services (022) 66233197 udit.kariwala@ambit.co
Varun Ginodia, CFA E&C / Infrastructure / Aviation (022) 66233174 varun.ginodia@ambit.co
Vinit Powle Strategy / Forensic Accounting (022) 66233149 vinit.powle@ambit.co
Vivekanand Subbaraman, CFA Media / Telecom / Oil & Gas (022) 66233261 vivekanand.s@ambit.co
Sales
Name Regions Desk-Phone E-mail
Dhiraj Agarwal - MD & Head of Sales India (022) 66233253 dhiraj.agarwal@ambit.co
Bhavin Shah India (022) 66233186 bhavin.shah@ambit.co
Dharmen Shah India / Asia (022) 66233289 dharmen.shah@ambit.co
Abhishek Raichura UK & Europe (022) 66233287 abhishek.raichura@ambit.co
Pranav Verma Asia (022) 66233214 pranav.verma@ambit.co
USA / Canada
Hitakshi Mehra Americas +1(646) 793 6751 hitakshi.mehra@ambitamerica.co
Achint Bhagat, CFA Americas +1(646) 793 6752 achint.bhagat@ambitamerica.co
Singapore
Srinivas Radhakrishnan Singapore +65 6536 0481 srinivas.radhakrishnan@ambit.co
Sundeep Parate Singapore +65 6536 1918 sundeep.parate@ambit.co
Production
Sajid Merchant Production (022) 66233247 sajid.merchant@ambit.co
Sharoz G Hussain Production (022) 66233183 sharoz.hussain@ambit.co
Jestin George Editor (022) 66233272 jestin.george@ambit.co
Richard Mugutmal Editor (022) 66233273 richard.mugutmal@ambit.co
Nikhil Pillai Database (022) 66233265 nikhil.pillai@ambit.co
Babyson John Database (022) 66233209 babyson.john@ambit.co

Sector Name
GMM Pfaudler Ltd (GMM IN, NOT RATED) Alkyl Amines Chemicals (AACL IN, NOT RATED)
3,500 1,800
3,000 1,600
1,400
2,500 1,200
2,000 1,000
1,500 800
1,000 600
400
500 200
0 0
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Aug-17
Aug-18
Aug-19
GMM Pfaudler Ltd Alkyl Amines Chemicals
Source: Bloomberg, Ambit Capital research Source: Bloomberg, Ambit Capital research
Garware Technical Fibres Ltd (GTFL IN, NOT RATED) CCL Products India Ltd (CCLP IN, NOT RATED)
1,800 400
1,600
350
1,400
1,200 300
1,000
250
800
600 200
400
150
200
0 100
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Aug-17
Aug-18
Aug-19
Garware Technical Fibres Ltd CCL Products India Ltd
Safari Industries India Ltd (SII IN, BUY) Century Plyboards (CPBI IN, UNDER REVIEW)
1,200 400
1,000 350
300
800 250
600 200
400 150
100
200 50
0 0
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Aug-17
Aug-18
Aug-19
Safari Industries India Ltd Century Plyboards India Ltd

Sector Name
MAS Financial Services Ltd (MASFIN IN, NOT RATED) Multi Commodity Exchange (MCX IN, NOT RATED)
1,300 1,500
1,300
1,100
1,100
900 900
700 700
500
500
300
300 100
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Jun-18
Dec-17
Feb-18
Oct-18
Jun-19
Dec-18
Feb-19
Oct-19
Dec-19
Feb-20
Apr-18
Aug-18
Apr-19
Aug-19
MAS Financial Services Ltd Multi Commodity Exchange of India Ltd
Laurus Labs Limited (LAURUS IN, NOT RATED) VIP Industries Ltd Ltd (VIP IN, BUY)
700 700
600 600
500 500
400 400
300 300
200 200
100 100
0 0
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Feb-17
May-17
Nov-17
Feb-18
May-18
Nov-18
Feb-19
May-19
Nov-19
Feb-20
Aug-17
Aug-18
Aug-19
Laurus Labs Limited VIP Industries Ltd

Sector Name
Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >10%
SELL <10%
NO STANCE We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation
UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events
NOT RATED We do not have any forward looking estimates, valuation or recommendation for the stock
POSITIVE We have a positive view on the sector and most of stocks under our coverage in the sector are BUYs
NEGATIVE We have a negative view on the sector and most of stocks under our coverage in the sector are SELLs
* In case the recommendation given by the Research Analyst becomes inconsistent with the rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures (like
change in stance/estimates) to make the recommendation consistent with the rating legend.
Disclaimer
This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Ambit Capital Private Ltd. AMBIT Capital Private Ltd. research is disseminated and available
primarily electronically, and, in some cases, in printed form.
Additional information on recommended securities is available on request.
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Emerging Giants Day: No Dearth of Opportunities!

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Emerging Giants Day: No Dearth of Opportunities!

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Emerging Giants Day

CONFERENCE TAKEAWAYS February 26, 2020

No dearth of opportunities! Accounting/forensic summary

indicates: (1) Capacity addition (debottlenecking existing/fresh GMM Pfaudler D8 100 27 21 38

Leader in ARV API with 50%/20% market share in

26 February, 2020 Ambit Capital Pvt. Ltd. Page 2

MCX NOT RATED

Key takeaways 6M ADV (Rs mn/US$ mn): 29/0.4

Increasing share of ETFs/MFs foray into commodities is an opportunity:

26 February, 2020 Ambit Capital Pvt. Ltd. Page 3

VIP Industries BUY

Key takeaways Stock Performance (%)

26 February, 2020 Ambit Capital Pvt. Ltd. Page 4

MAS Financial Services NOT RATED

26 February, 2020 Ambit Capital Pvt. Ltd. Page 5

GMM Pfaudler NOT RATED

26 February, 2020 Ambit Capital Pvt. Ltd. Page 6

Laurus Labs NOT RATED

26 February, 2020 Ambit Capital Pvt. Ltd. Page 7

Century Plyboards NOT RATED

Key takeaways 1M 3M 12M YTD

MDF growing at a brisk pace; new supply now absorbed: Management

26 February, 2020 Ambit Capital Pvt. Ltd. Page 8

Garware Technical Fibres NOT RATED

26 February, 2020 Ambit Capital Pvt. Ltd. Page 9

Alkyl Amines NOT RATED

Stock Performance (%)

Outlook for domestic amines industry remains positive: Management

26 February, 2020 Ambit Capital Pvt. Ltd. Page 10

CCL Products NOT RATED

Stock Performance (%)

26 February, 2020 Ambit Capital Pvt. Ltd. Page 11

Safari Industries BUY

Key takeaways 6M ADV (Rs mn/US$ mn): 16/0.2

26 February, 2020 Ambit Capital Pvt. Ltd. Page 12

Institutional Equities Team

26 February, 2020 Ambit Capital Pvt. Ltd. Page 13

Safari Industries India Ltd Century Plyboards India Ltd

26 February, 2020 Ambit Capital Pvt. Ltd. Page 14

MAS Financial Services Ltd Multi Commodity Exchange of India Ltd

26 February, 2020 Ambit Capital Pvt. Ltd. Page 15

Explanation of Investment Rating

Ownership & Material Conflicts of Interest:

Additional Disclaimer for Canadian Persons

Additional Disclaimer for Singapore Persons

26 February, 2020 Ambit Capital Pvt. Ltd. Page 16

Additional Disclaimer for UK Persons

Additional Disclaimer for U.S. Persons

© Copyright 2020 AMBIT Capital Private Limited. All rights reserved.

26 February, 2020 Ambit Capital Pvt. Ltd. Page 17

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