E N L I G H T E NY O U RI N V E S T ME N TP O R T F O L I OWI T H A X I SS E C U R I T I E SF U N D A ME N T A LMU H U R A TP I C K S Oc t o b e r10, 2019 Hi ndus t an Uni l e v e r Kot ak Mahi ndr a Bank I CI CIBank As i anPai nt s HCL SBIL i f e T e c hnol ogi e s I ns ur anc e Dr Re ddy ’ s Aar t i L ab I ndus t r i e s Mi ndt r e e RI T ES Di xon L umax T e c hnol ogi e sI ndus t r i e s ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n MUHURATPI CKSSAMVAT2076 Wi shyoual laHappyDeepawal iandpr osper ousNew Year( Samvat2076) Lastyearhasbeenqui t eat umul t uousonemar kedbyeventbasedbout sofvol at i l i t y Theyeargonebyhasbeenmar kedbyr i skaver si on atgl oball evelduet ovar i ousr easonsvi z ,sl owi nggl obalgr owt h,pol i t i caluncer t nt yi nEU,escal at i onofUSChi nat r adedi sput e,yi el d cur vei nver si oni nUSi ndi cat i ngr ecessi onahead,spi kei ncr udeoi lpr i cesduet ogeopol i t i calt ensi onsi nMEet c.USFedhasembar ked onr at ecutaf t er10year spostt heGr eatFi nanci alcr i si s.Ondomest i cf r ont ,t heyearwasmar kedbyt hegener alel ect i onst hatr esul t ed i nst r ongmandat ef orr ul i ngNDA pavi ngwayf orcont i nui t yofpol i ci esandmuchr equi r edeconomi cr ef or ms.Ot hernot abl eswer e r el at i vel yt epi dear ni ngsr epor t edbyI ndi anI nc.al ongwi t ht hesl owi ngeconomi cgr owt h,i ni t i aldel ayi nmonsoonwhi chwasl at ermor e t hancompensat ed,budget ar ypr oposal sf oraddi t i onalt axonFPI sandchangei npubl i cshar ehol di ngsal lofwhi chcont r i but edt ot he vol at i l i t yi nmar ket s.Fi nal l y ,t her ecentr educt i oni ncor por at et axwoul dposi t i onI ndi acompet i t i vel yagai nsti t sSout hAsi anpeer sof f er i ng anal t er nat i vet ot hosecompani eswhi char el ooki ngoutf orshi f t i ngt hei rpr oduct i onbasesawayf r om Chi na Thecor por at et axr at ecutannouncedr ecent l yi sexpect edt obeagamechanger ;l ow ef f ect i vet axof~17% and~25% f ort henew manuf act ur i ng compani esand exi st i ng nonexempt i on avai l i ng compani esr espect i vel ywoul d at t r actnew i nvest ment s.Ef f i cacyof st andal onecor por at et axcut sasat oolt oat t r actnew i nvest ment scanbequest i onedbuti fcoupl edwi t hl andandl abourr ef or ms,i thas pot ent i alofat t r act i nghugei nvest ment s;weexpectt hel andandl abourr ef or mst of ol l ow upshor t l y ,pr obabl yi nwi nt ersessi onof Par l i ament Thet axr at ecut sat l eastwoul dputI ndi ndi scussi oni nt heboar dr oomsofvar i ousi nt er nat i onalI ncor por at i onswhoar e l ooki ngf or war dt oexpl or edi ver si f yi ngawayf r om Chi nai nwakeofshr i l lUSChi nat r adewarr het or i c.I nbackdr opofcor por at et axcut s t ost okei nvest ment s,t her ecoul dbet weaki ngi nper sonal t axr at esont hel i nespr oposedi nt heDi r ectt axcode-t hehi ghl evel gover nment t askf or ceondi r ectt axes,pr obabl yi nBudget2020.Tweaki ngofper sonali ncomet axr at es,i fi ncor por at ed,woul daccel er at et he spendi ngondi scr et i onar yconsumpt i on Ot herr ecentmeasur est akenbyt hegover nmentt oencour agei nvest ment svi z ,al l owi ng100% FDIi ncont r actmanuf act ur i ng,r el axi ng sour ci ngnor msf orsi ngl ebr andr et l ,andt hei nt r oduct i onofanew r ef undmechani sm f orexpor t ssuggestt hatt hegover nmenti s f ocusedonmaki ngI ndi aani nvest mentf avour i t edest i nat i onf oral lt hosecompani eswhi chr el yongl obalsuppl ychai ns.Fur t herwi t h Chi nesemanuf act ur i ngandl abourcost si ncr easi ngoverI ndi ancost s,MNCsar el ooki ngatdevel opi ngt hei rmanuf act ur i ngf aci l i t i es/ suppl ychai nsi nI ndi awhi chcoul dboastI ndi a’ sexpor tbusi ness.I ncr easi ngi nvest ment swoul di mpr ovet hedemandf orl and,l abour whi chwoul dt hendr i veconsumpt i onl eddemandset t i ngt hevi r t uousci r cl eofconsumpt i onanddemandonr ol l Havi ngt akent he measur est or ect i f yl eakagesoft heeconomyi ni t sf i r stt er m,t hegover nment ,i ni t ssecondt er m,i sonanover dr i vet oensur et hatt he economi cgr owt hengi nekeepsaccel er at i ng.I ndi aneconomysof arhasbeendr i venbydomest i cconsumpt i on;expor tt houghcont r i but es ar ound10% ofGDPi spl ayi ngasecondf i ddl e.Al lt henecessar ycondi t i onsf orexpor tl edgr owt har ebei ngputt oget heratnobet t ert i me t hanwhenUSi sdeal i ngt oughwi t hal li t smaj ort r adepar t ner s ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n MUHURATPI CKSSAMVAT2076 I ndi aneconomyi sgoi ngt hr oughphaseofheal t hyt r ansf or mat i on;f i nanci al i nst i t ut i onswi t hpoorl endi ngpr act i cesar ebei ngpuni shedand onl yt hef i t t estwoul dsur vi veandt hr i ve.Ther ecentNBFC/cooper at i vebankf i ascohasexposedt hevul ner abi l i t yofI ndi a’ scooper at i ve banki ngsyst em andputt hesmal lsaver si nf i x.Weexpectt hedeposi t or st oweant hemsel vesawayf r om t hecooper at i vebanksand sl owl yshi f tt opr i vat eandpubl i csect orbankst hushel pi ngt ogar nerl ow costf unds.Fur t her ,gi vent hecont nedi nf l at i on,beni gn i nf l at i onar yout l ookandsuppor t i vecent r al bank,t hecostoff undsar eexpect edt ost ayl owandr educef ur t hert hussuppor t i ngi nst i t ut i onal capi t alexpendi t ur eandper sonalconsumpt i onovernextcoupl eofyear s.Goodmonsoon,bumpercr opscoupl edwi t hbet t erMSPsf or agr i cul t ur alpr oducewoul di mpr ovet her ur ali ncomesandconsumpt i on.Ri si ngpercapi t ncomeabove$2000woul dal sogi vean i nf l ect i onar ypusht odi scr et i onar yconsumpt i onast hebasi cnecessi t i esar et akencar eof Wi t hst abi l i t yonpol i t i calf r ont ,pr obusi nessgover nmenti npl ace,r educi ngcostofcapi t al ,andgr owi ngoppor t uni t i esast heChi nese compani esar evacat i ngt hespaceduet ol osi ngcompet ency( ei t herduet ohi ghcostofl abourort ar i f f s) ,f or ei gni nvest ment sbei tasFDI orFPIi sexpect edt oi ncr easei nI ndi awhi chwoul ddr i vegr owt hi nt heeconomy Overt hepastf ew year s,Axi sDi r ectMuhur atPi ckshaveout per f or medt heBenchmar ki ndi ces.Despi t et hevol at i l i t yi nvol vedi nSamvat 2075( Muhur atPi cks2018) ourr ecommendedpor t f ol i ohasout per f or medt hebenchmar kbymar gi n.Ourr ecommendedpor t f ol i ohas gi venar et ur nof12% f r om 23r dOct2018t i l l 9t hOct2019compar edt ot hebenchmar k( CNX500)whi chhasr et ur ned8 1% overt hesame per i od PastMuhur atPi cksPor t f ol i oPer f or mance Por t f ol i o Per f or mance Benchmar k Per f or mance( CNX500) Muhur atPi cks2014 67 50% 80% Muhur atPi cks2015 45 90% 13 40% Muhur atPi cks2016 35 10% 16 50% Muhur atPi cks2017 ( 4%) ( 3%) Muhur atPi cks2018 12 00% 10% Out per f or mance ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n MUHURATPI CKSSAMVAT2076 Hi ndust anUni l ever Kot akMahi ndr aBank I CI CIBank Asi anPai nt s HCLTechnol ogi es SBILi f eI nsur ance - - - - - - Tar get :Rs.2, 135 Tar get :Rs.1, 800 Tar get :Rs.492 Tar get :Rs.1, 935 Tar get :Rs.1, 250 Tar get :Rs.936 10% 16% 18% 12% 16% 13% Acqui si t i ongai nst oaccr uedr i vi ng ~18% EPSCAGRoverFY1921E l edbyst eadyvol umegr owt h, cont i nuedpr emi umi zat i ont r endand l ever agi ngdat aanal yt i cs KMBi swel lposi t i onedduet ohi gher capi t al i sat i on,ast r ongl i abi l i t y f r anchi seandbeni gnassetqual i t y , whi chwoul dal l owi tt ogai nf ur t her mar ketshar e Amongstt hel ar gestpr i vat ebanksi n t hecount r ywi t hst r engt heni ng l i abi l i t yf r anchi se,moder at i oni n cr edi tcost sandi mpr ovi ngasset qual i t yt osust nst r ongper f or mance Percapi t apai ntconsumpt i onof4/ kg annual l yi nI ndi aof f er shuge penet r at i onscopef ort hedecor at i ve pai nti ndust r yl edbyAsi anPai nt s wi t h53% mar ketshar e St r ongdealwi nsal ongwi t hheal t hy out l ookf orBFSIandI MS; Management ’ sgui danceof1416% annualgr owt h Pl ayont heunder –penet r at ed I ndi an l i f eI nsur ancemar ketal ongwi t h i mpr ovi ngpr ot ect i onshar eand mar gi nst odr i veear ni ngs CMP:Rs.1, 940 CMP:Rs.1, 556 CMP:Rs.416 CMP:Rs.1, 723 CMP:Rs.1, 074 CMP:Rs.827 Dr Reddy’ sLab Aar t iI ndust r i es Mi ndt r ee RI TES Di xonTechnol ogi es LumaxI ndust r i es - - - - - - Tar get :Rs.2, 900 Tar get :Rs.875 Tar get :Rs.896 Tar get :Rs.328 Tar get :Rs.3, 649 Tar get :Rs.1, 600 11% 16% 24% 26% 23% 39% Wi t hgai ni ngt r act i oni ndomest i cbi z , keyl aunchesi nt heUSmar ket coupl edwi t hcostr at i onal i zat i on benef i t swi l lt r ansl at est r ongear ni ngs gr owt hoverFY1921E Phar masegmentt or epor t consi st ent l yhi ghergr owt hal ongsi de mul t iyeardealwi nst hatcoul d of f set t heneart er m gr owt hconcer ns Changei nLeader shi p;I ndust r y l eaderi ndi gi t alspacewi t hr obust or derbook RI TESpr esent sval uef ori nvest or s duet oi t sst r onganddi ver si f i edor der book,associ at i onwi t hMoR,heal t hy f i nanci al s,hi ghdi vi dendpayoutand at t r act i veval uat i ons CMP:Rs.2, 613 CMP:Rs.754 CMP:Rs.721 CMP:Rs.261 Leadi ngcostef f i ci entEMSpl ayer ser vi ci ngest abl i shedconsumer dur abl ebr andsacr ossvar i ous segment s CMP:Rs.2, 972 LumaxI ndust r i es,pr omot edbySC Jai ngr oup,i st hemar ketl eaderi n I ndi anAut omot i vel i ght i ngsyst ems wi t hnear l y60% mar ketshar ei nPV andt wowheel ersegment CMP:Rs.1, 150 CMPasof7t hOc t2019 Not e:c ompani esabovear ear r angedi nor derofMar ketCap ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n HI NDUSTAN UNI LEVER CMP: 1, 940 Tar get : 2, 135 % Upsi de Hi ndust anUni l ever( HUVR) ,i st hel ar gestFMCG pl ayeri nI ndi a.HUVR’ spr oductpor t f ol i oconsi st sofawi despect r um i ncl udi ng HomeCar e,Per sonalCar e,Foods&Ref r eshment sandWat erPur i f i er s.I nt er msofdi r ectdi st r i but i on,HUVRhasoneoft hel ar gest di r ectdi st r i but i onnet wor k( r et lt ouchpoi nt s)i nt heFMCG sect orser vi cedbyover3, 500di st r i but or s 10% I nvest mentRat i onal e CMPasof7t hOct2019 St ockDat a No.ofshar es 216 5cr Mar ketcap( Rs) 419, 941cr 102/ 1478 52weekhi gh/ l ow( Rs) 2, 53, 483 Avg.dai l yvol ( 6mt hs) 8, Bl oomber gcode HUVR.I N Reut er scode HLLNS Pr i cePer f or mance Per sonalandHomeCar esegment st or emai nmai nst aygr owt har eas:HUVR,hasbeengai ni ngmoment um i ni t shomeand per sonalcar esegmentbydr i vi ngpr emi umi zat i onandmar ketdevel opment I nt hehomecar espacet hecompanyr ecent l yl aunched ‘ Love&Car e’ f abr i cwashamor epr emi um pr oductf ocusi ngonsi l ks,f i necot t onsandwol l enf abr i cs.Topassonbenef i t sofbeni gn RM envi r onment ,HUVRunder t ookpr i cecut si nsoaps( LuxandLi f ebuoy)t hathaver ecei vedposi t i ver esponsef r om t r adechannel andwi l lt husdr i vet hecompanyt or egai ni t sl ostshar e.Fur t her ,duet oGSTr at ecut ,HUVR i sal sol i kel yt ogai nshar ei nt he di shwashsegmentf r om unor gani sedpl ayer st her ebyai di nggr owt hf ori t scor ecat egor i es Acqui si t i ongai nst oaccr ue:Af t eracqui si t i onofI ndul ekhai nFY17,HULacqui r edAdi t yaaMi l k( i cecr eam)f orRs.83cr GSK Consumeri st obei nt egr at edi nFY20whi chwoul dr sepr esencei nf oods( mal t edf oods)andcoul dai d~57% accr et i ont oear ni ngs uponsuccessf ul i nt egr at i onoft hemer ger Heal t hFoodsi saRs.7, 700crcat egor yi nI ndi awi t hj ust14% r ur al penet r at i on.HUVRhas 3xdi r ectdi st r i but i onr eachoverGSKConsumer FY19ROE i mpr oves:HUVR’ sROE i mpr ovedt o85% i nFY19( ~700bpsi mpr ovement )whi l et hi si sbel ow i t speak,webel i eve adj ust i ngf oraccount i ngchangesasperI ndAS( r el at edt of i nal di vi dends) ,i t sROEshoul dbenearal l t i mehi gh.I t sdi vi dendpayout hasbeenheal t hyi nFY19at79% oft henetear ni ngswi t hadi vi dendyi el dof1 29%.Fur t her ,HUVR’ sef f ect i vet axr at ecoul dst and at25 6% i nFY20/ FY21f r om t heear l i er31 5% pr i ort ocor por at et axr at ecutannouncement s i eve,HUVR of f er samongstt hemostvi si bi l i t y( ~18% CAGR overYF1921E)i nt heFMCGst apl espackswi t h Out l ook:Webel mul t i pl edr i ver sf orgr owt hoverFY20E/ 21E.Fort hi swebel i eve,i t s( a)WI MIst r at egy ,( b)st r ongexecut i on,( c)t hr ustonNat ur al s por t f ol i o,( d)f ocus on pr emi umi zat i on and mar ketdevel opmentt o dr i ve pr of i t abi l i t yi mpr ovement ,( e)ext ensi vel y empl oyi ng t echnol ogyanddat aanal yt i cst or emai naheadofcompet i t i onand( f )RM l edt l wi ndsi nFY20coul dai dGM expansi on AtCMP,t he st ockt r adesat49 8xFY21E Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) FY19 39310 6054 FY20E 42051 FY21E 48377 EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) 27 16 85 85 7167 33 19 86 93 8522 38 16 79 87 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n KOTAKMAHI NDRABANK CMP: 1, 556 Tar get : 1, 800 % Upsi de Kot akMahi ndr aBank( KMB)i spar toft hel ar gerKot akMahi ndr aGr oupl edbyMr UdayKot ak,FounderandManagi ngDi r ect orof t heBank.Thegr ouphasast r ongpr esenceacr ossf i nanci alser vi cesval uechai n.ThebankhaspanI ndi apr esencewi t h1, 503 br anchesand2, 394ATMsasonJune,2019 16% I nvest mentRat i onal e RobustNI Ms:NI MsofKMBar eamongstt hebesti nt hei ndust r yandhavebeeni nt her angeof44 6% overt hel ast3year s.I n Q1FY20,mar gi nexpansi ont o~4 5% ( +19bpsYoY)canbeat t r i but edt obet t erpr i ci ng,f ast ergr owt hi nhi gheryi el di ngsegment sand acuti nSA deposi tr at es.Themanagementexpect sbet t erpr i ci ngpoweri ncer t nhi ghyi el di ngsegment swhi chwi l lhel pi n sust ni ngNI Ms CMPasof7t hOct2019 St ockDat a No.ofshar es 191cr Mar ketcap( Rs) 2, 97, 047cr 684/ 1, 044 52weekhi gh/ l ow( Rs) 1, 07, 257 Avg.dai l yvol ( 6mt hs) 14, Bl oomber gcode KMBI N Reut er scode KTKM BO St abl eassetqual i t y:KMBhasmai nt nedbeni gnassetqual i t ywi t hl i mi t edexposur et ost r essedsect or sandconser vat i vel endi ng pr act i ces.Fur t heri mpr ovementi nassetqual i t ysi nceFY18wasseenwi t hG/ NNPAsat2 2/ 7% i nQ1FY20( Sl i ppages1 45% ann) PCRst oodat~67% whi chpr ovi descomf or t Loangr owt hset t oi mpr ove:Gr owt hoppor t uni t yf ort hebankl ooksbet t er ,asi ti sabl et ogett hepr i ci ngt hati twant s.NBFCs, whi chwer eunder cut t i ngonpr i ci ngordi l ut i ngunder wr i t i ngnor mshaver ecededf r om t hemar ketandKMB hast i ght enedi t s under wr i t i ngi nsegment sl i ket r act or s/ MSME/ et c,wher easot herbankshavebeenaggr essi veandnowf acest r ess swel lposi t i onedduet ohi ghercapi t al i sat i on( Ti erI-17 3%) ,ast r ongl i abi l i t yf r anchi se( CASA51%)andbeni gn Out l ook:KMB i assetqual i t y ,whi chwoul dal l ow i tt ogai nf ur t hermar ketshar e.Theper f or manceofnonbanki ngbusi nesses( l i f ei nsur ance,AMC busi ness)r emai nsst r ongongr owt h&pr of i t abi l i t y Thebankhasbeent r adi ngatr i chval uat i onsconsi st ent l yduet oi t ssuper i orr et ur n r at i oswi t hRoAof1 7%.Pr omot erst akedi l ut i oncoul dbeanover hang.However ,wer eckont hi swi l l beami norbl i pi nanot her wi se st r ongear ni ngst r aj ect or y BasedonSOTPval uat i ons,wear r i veatat ar getpr i ceofRs 1800 Pr i cePer f or mance Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne NI I( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) BookVal ue( Rs) RoE( %) RoA( %) FY19 1259 4865 25 18 224 12 1 FY20E 13551 6183 32 27 257 13 FY21E 16166 7605 39 20 295 14 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n I CI CIBANK CMP: 416 Tar get : 492 % Upsi de 18% I CI CIBank( I CI CI BC)i samongstt hel ar gestpr i vat esect orbanksi nI ndi awi t hbusi nessoper at i onsspr eadacr ossRet l ,Cor por at e, I nsur ance,et c.I ti ssuppor t edbya st r ongl i abi l i t yf r anchi seandRet l / Cor por at el oanmi xof~61/ 24%.I t ssubsi di ar i esI CI CIvent ur e f unds,Pr uI CI CIAMC,I CI CISecur i t i es,I CI CIPr udent i al ,andI CI CILombar dar eamongstt hel eadi ngcompani esi nt hei rr espect i ve segment s I nvest mentRat i onal e CMPasof7t hOct2019 St ockDat a No.ofshar es 645cr Mar ketcap( Rs) 268, 471cr 295 52weekhi gh/ l ow( Rs) 459/ 88, 502 Avg.dai l yvol ( 6mt hs) 94, Bl oomber gcode I CI CI BCI B Reut er scode I CBKBO Pr i cePer f or mance St r ongl oangr owt hl edbyr et l :Loangr owt hhasst eadi l ypi ckedupovert hel astni nequar t er s.I nQ1FY20,over al ll oangr owt h st oodst r ongat~15/ 1% YoY/ QoQ t oRs5, 92, 415crl edbycont i nuedt r act i oni nr et ll oans( ~61% ofl oans) Ret ll oansgr ew by ~22% YoYpr i mar i l yl edby19% YoYgr owt hi nhomel oans,54% YoYi nper sonall oans( PL)and46% YoYi nbusi nessbanki ng.The unsecur edPLbookhasi nchedupt o9 5% f r om 5% i nFY16.Domest i ccor por at el oansgr ewby~7% YoY.I ncr ement al l y ,85% oft he cor por at edi sbur sal sar er at edA-orabove.Weexpectl oanmoment um t ocont i nueonhi gherr et l i sat i onandbet t err at edcor por at e book Deposi t sgr owt hl edbyt er m deposi t s:Deposi t shavepi ckedupi nt hel ast2quar t er s,up+20% l edbyheal t hygr owt hi nt er m deposi t s.Ter m deposi t sgr ew at34/ 10% YoY/ QoQ whi l eCASAdeposi t sgr owt hmoder at edat8% YoY( ~7 7%QoQ decl i ne)l edby ~16% QoQ decl i nei nCAdeposi t sand4% QoQ decl i nei nSAdeposi t s.Thus,CASAr at i odecl i nedby440bpQoQ t o45 2% Aver age CASAmi xhasdecl i nedby120bpQoQ t o43 4% vs44 6% i nFY19 Sl i ppagescont i nuet obel ower :Si nceQ4FY18,whensl i ppagesr eachedapeakof~12 4% annual i sed,i ncr ement aladdi t i ons havecomedownsi gni f i cant l yl eadi ngt osl i ppagecomi ngdownt o~1 9% i nQ1FY20.BBandbel owr at edexposur esst oodat2 6% ofl oansr ef l ect i ngani mpr ovedpoolofasset s RobustPCR:Af t erasust nedr i seoverFY19,pr ovi si ons i nQ1FY20di pped~42/ 36% t o~Rs3, 496cr( 4% ann.vs.3 8% QoQ and4 6% YoY) NNPAssequent i al l ycamedown~50% t oRs1 1, 857cr ( 8% vs4 2% QoQ) Thi sr esul t edi na340bpsr i sei n cover aget o~74% whi chi samongstt hebestvi sàvi s peer s t ei ncr easi ngst r nsonl oangr owt h,CASAandmar gi ns,I CI CI BC’ sassetqual i t yt r endshavest abi l i sed.Thebank Out l ook:Despi i sadequat el ycapi t al i zed f orgr owt h and pr ovi si oni ng and i t sRoE i sl i kel yt oi mpr ove st eadi l y Cont r i but i on f r om subsi di ar i es, especi al l yi nsur anceandassetmanagement ,r emai nsst r ong.BasedonSOTP val uat i ons,wear r i veatat ar getpr i ceofRs492 ( assi gni ng2 1xFY21Ecor eABVandsub.val ueofRs1 17) Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne NI I( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) BookVal ue ( Rs) RoE( %) RoA( %) FY19 27015 3363 ( 50 6) 168 2% 4% FY20E 31601 13762 21 31 182 12 1% 3% FY21E 37281 17775 27 30 205 14 0% 5% Sour ce:Reut er s,ConsensusEst i mat es,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n ASI AN PAI NTS CMP: 1, 723 Tar get : 1, 935 % Upsi de 12% Asi an Pai nt s Lt d( APNT)i sI ndi a’ sl ar gest( 53% mar ketshar e)andAsi a’ s 3r dl ar gestPai ntcompany APNT has 27 pai nt manuf act ur i ngpl ant sser vi ci ngcust omer si nover65count r i esgl obal l y APNT al sohasawi despr eaddi st r i but i onnet wor kwi t h 65, 000+deal ert ouchpoi nt s.OfFY19r evenues,Decor at i vePai nt shad83% cont r i but i on,I nt er nat i onal( 12%) ,I ndust r i al s( 3%)and HomeI mpr ovement( 2%) I nvest mentRat i onal e Decor at i vePai nt si ndust r ysi gni f i cantgr owt hpot ent i al :Percapi t apai ntconsumpt i oni nI ndi ast andsat4kgannual l yvsGl obal aver ageof1315kgannual l y Gi vent hel ow penet r at i on,t her ei si mmensescopef orgr owt hi nt hedecor at i vepai nt ssegment Fur t her ,si gni f i cantr educt i onofr epai nt i ngcycl et o3–4year sf r om ear l i er78year swi l lf ur t herai dvol umegr owt hf orcompani es l i keAsi anPai nt s CMPasof7t hOct2019 St ockDat a No.ofshar es 95 9cr Mar ketcap( Rs) 165, 231cr 120 52weekhi gh/ l ow( Rs) 1820/ 96, 558 Avg.dai l yvol ( 6mt hs) 6, Bl oomber gcode APNTI N Reut er scode ASPNNS Pr i cePer f or mance Pai ntI ndust r ynotshar pl yi mpact edbyRealEst at esl owdown:Wenot et hatI ndi anPai nti ndust r ywi l l cont i nuet oout per f or mt he bui l di ngmat er i al ssegmentwhi chhasbeeni mpact edbyt hesever esl owdowni nReal Est at esect or Ther el at i vei nsul at i onofPai nt s sect ori sowi ngt o1)hugescopet ogr ow penet r at i ondeeperi nt oTi er2/ 3t ownsaswel lasr ur alar eas,2)Pai ntuni ver seofdeal er s i s1 5l akht ouchpoi nt sandAPNThas65, 000+deal er st hathasconsi st ent l yi ncr eased10% onannualbasi st odeal ernet wor k) ,3) buoyancyi nr epai nt i ngdemandf or mi ng~85% ofpai ntdemand( f uel l edbyhi gherdemandf orr ent alhomes) Vol umegr owt hai dedbycapex;RM t l wi ndst oboostpr of i t abi l i t y:APNTadded2newcapaci t i esatVi zag&Mysur uof3l akh KL/ annum i nFY19.Rampi ngupofut i l i zat i onl evel scoupl edwi t hchangei npr oductmi x wi l lenabl eAPNTt or epor t+13% vol umes gr owt hi nFY20.Fur t herwi t h beni gnRM envi r onment ,APNTi sexpect edt or epor texpansi oni ni t soper at i ngpr of i t abi l i t y by100bps overFY1921E st onar r ow gapv/ sunor gani zedpl ayer s:Wi t hpr i ci ngpr emi um bet weenunor gani zed( 30% ofpai nti ndust r y)and GSTTaxcut or gani zedpl ayer shasnow nar r owedt o10% f r om ear l i er2025% owi ngt oGSTt axr at ecutt o18% f r om 28% pr evi ousl y Thi shas al l owedbr andedpai ntcompani esl i keAPNTt ocapi t al i zeont hedemandf r om bot hB2B( i nst i t ut i onal )andB2C ( r et lhousehol d) segment scausedbyt hi st r ansi t i oni npostGSTper i od Out l ook:Wer emai nconst r uct i veont heI ndi anPai nt si ndust r ywi t hourbacki ngf orAsi anPai nt st hel eader ,owi ngt oshi f t i ng consumpt i onpat t er ns,f ast ergr owt hi nr ur alar easandsat el l i t et owns( Ti er2/ 3t ownsandr ur alar eas)asagai nstur banmet r os, di st r i but i onexpansi onoppor t uni t y ,pr i ci ngpower ,pr oductpor t f ol i ost r addl i ngacr osspr i ce/val uechai nandpr oductpr emi umi zat i on AtCMP,st ockt r adesat50 5xFY21EEPS Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) FY19 19350 2156 FY20E 2201 FY21E 25227 EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) 22 24 29 2692 28 26 26 30 321 34 19 27 32 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n HCLTECHNOLOGI ES CMP: 1, 074 Tar get : 1, 250 % Upsi de 16% HCLTechnol ogi esLi mi t edi sanI ndi anmul t i nat i onali nf or mat i ont echnol ogy( I T)ser vi ceandconsul t i ngcompanyheadquar t er edi n Noi da,Ut t arPr adesh i sanext gener at i ongl obalt echnol ogycompanyt hathel psent er pr i sesr ei magi ngt hei rbusi nessesf ort he di gi t alage.HCLt echnol ogypr oduct s,ser vi cesandengi neer i ngar ebui l tonf ourdecadesofi nnovat i on,wi t hawor l dr enowned managementphi l osophy ,ast r ongcul t ur eofi nvent i onandr i skt aki ng,andar el ent l essf ocusoncust omerr el at i onshi ps I nvest mentRat i onal e I mpr ovedvi si bi l i t yduet ost r ongdealwi ns:St r ongdealwi nsal ongwi t hheal t hyout l ookf orBFSIandI MSi sexpect edt odr i ve gr owt hgoi ngf or war d.Recedi ngheadwi ndsi nBFSI ,sust nedmoment um i nI MSandr ampupofdeal pr ovi der evenuevi si bi l i t y The companysi gned17t r ansf or mat i onaldeal si nQ4.Dealpi pel i nehasi mpr ovedQoQ whi chl eadst obet t err evenuemoment um/ vi si bi l i t yi nFY20 CMPasof7t hOct2019 St ockDat a No.ofshar es 135 6cr Mar ketcap( Rs) 144, 482cr 190/ 920 52weekhi gh/ l ow( Rs) 98, 835 Avg.dai l yvol ( 6mt hs) 10, Bl oomber gcode HCL TI N Reut er scode HCL TNS Pr i cePer f or mance I mpr ovi ngr evenuet r aj ect or y:Management ’ sgui danceof1416% gr owt hi si nl i newi t hpeer s,whi l ei t sor gani cgr owt hat79% i s mar gi nal l yhi ghert hanl astyear ’ sgr owt hof6 5%.Weexpectst eadyi mpr ovementofr evenuegr owt hduet o( a)r ecor ddeal sover pastf ew quar t er sTCV( USD 23bn/ quar t er ),( b)br oadbasedgr owt hacr osskeyser vi cesegment sand( c)I MSsegmentr egai ni ng moment um wi t h~21% yoygr owt h I BM par t ner shi p–dr i vi nggr owt handear ni ngsmoment um:HCLTechhascompl et edt heacqui si t i onof7pr oduct sf r om I BM out ofwhi ch5pr oduct swer eear l i erunderI Ppar t ner shi pand2pr oduct sar enew.Companyhasal r eadypai d$81cr sonJune30,2019, andwi l ll i kel ypay$81 25Cr saf t eroneyear Thedealal sohasanear noutcomponentof$15cr st obepai di nt hr eei nst al l ment s Thi spar t ner shi pwi l ll eadt ogoodwi l lof$92cr sandi nt angi bl eassetof$125cr saddi ngt oamor t i zat i on.I BM pr oductpor t f ol i ohas EBI TDAmar gi nof50%+wi t hamor t i zat i onof~20%,yi el di ngEBI Tmar gi nof~30% oi mpr ovegoi ngf or war d:Weexpecti mpr ovementi nmar gi nt r aj ect or yf r om H2FY20l edbyr evenuecont r i but i onf r om Mar gi nst I BM deal ,whi chi sahi ghmar gi nbusi ness,wani ngseasonal i t yi mpactofMode3busi nesst hathasl owerI Pr evenuei nQ4and st r ongergr owt hi nMode2dr i vi ngoper at i ngl ever age Out l ook:Weexpectst r onggr owt hi nkeysegment svi z, Mode2&Mode3busi ness,ER&D out sour ci ngl edbyst r ongor derbook Wemai nt nabuywi t hat ar getpr i ceofRs1250 Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) FY19 60427 13926 FY20E 70074 FY21E 77304 EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) 73 18 26 25 15904 75 22 23 17870 84 1 22 23 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n SBILI FEI NSURANCE CMP: 827 Tar get : 936 % Upsi de 13% SBILi f eI nsur ance( SBI LI FE)wasest abl i shedasaJVbet weenSt at eBankofI ndi aandBNPPC,ani nsur ancesubsi di ar yofBNP Par i bas.I ti sr ankedf i r sti nI ndi vi dualRat edPr emi um wi t hPr i vat eMar ketshar eof21 5% andr ankedsecondi nTot alNewBusi ness Pr emi um wi t hPr i vat emar ketshar eof~20%.SBI LI FEhasdevel opedamul t i channeldi st r i but i onnet wor kcompr i si nganexpansi ve bancassur ancechannel ,i ncl udi ngSt at eBankofI ndi a,t hel ar gestbancassur ancepar t neri nI ndi aandal ar geandpr oduct i ve i ndi vi dualagentnet wor k I nvest mentRat i onal e Hugegr owt hpot ent i al :Penet r at i onanddensi t yofl i f ei nsur ancei nI ndi sl ow ( ~2 7%) ,whi chpr ovi desampl escopef orgr owt h Combi nedwi t hbet t erdemogr aphi csandl owersoci alsecur i t ybenef i t s( vs.devel opedeconomi es) ,t hi st r ansl at esi nt oopt i mi st i c out l ookf orsavi ngspr oduct si nl i f ei nsur ance.I nadequat ecover agewi t hi nt hepopul at i on,asr ef l ect edbyhugepr ot ect i ongap ( ~92%)i nt hecount r ywi l lbenef i tt heI ndi ani nsur ancesect orandSBI LI FEi npar t i cul art oi t sdi st r i but i onnet wor k CMPasof7t hOct2019 St ockDat a No.ofshar es 100cr Mar ketcap( Rs) 82, 778cr 516 52weekhi gh/ l ow( Rs) 862/ 14, 774 Avg.dai l yvol ( 6mt hs) 7, Bl oomber gcode SBI LI FEI N Reut er scode SBI LBO Pr i c ePe r f or manc e Gr owt hdr i ver si npl acewi t hst r ongbancaanddi gi t aldi st r i but i onf ocus:Shar eofbusi nessf r om bancassur ancecont i nuest o r emai nr obustwi t hi mpr ovi ngbr anchpr oduct i vi t yandgr owt hi ni ndi vi dualpr ot ect i onpol i ci es.Pr ot ect i onandannui t ybusi nessar e expect edt or emai ni nf ocusahead,wi t hgr owt hi nhi ght i cketUl i ppr oduct s.SBI LI FE i susi ngdi gi t alt osel li ndi vi dualsmal lt i cket pr ot ect i onpol i ci es,t her ebycont r ol l i ngcost sandi mpr ovi ngr each.I ncr easi ngshar eofact i vebr anches,r i sei nbusi nessperbr anch andgr owi ngdi gi t alf oot pr i ntar eexpect edt oaugurwel lf orhi gherpenet r at i onofbusi ness I ncr easi ngshar eofpr ot ect i onandr i sei nper si st encyt osuppor tmar gi n:Pr ot ect i onbusi ness( i ndi vi dual &gr oup)cont i nuest o wi t nessr obustt r act i on.I nQ1FY20,f ocusonpr ot ect i onbusi nessl edt or obustt r act i onof106% YoYt oRs440cr ,l eadi ngt or i sei n shar eofpr ot ect i ont o~14% vs.12% i nFY19&10% i nQ1FY19.Shar eoft ot alpr ot ect i oni sonacont i nuousr i sef r om ~6% i nFY18 t o~14% i nQ1FY20.I mpr ovi ngper si st ency ,hi ghmar gi npr ot ect i onbusi nessandcostcont r oli fsust nedwi l lwor ki nf avourof i mpr ovi ngVNBmar gi ns LI FE i sapl ayont heunder –penet r at edLi f eI nsur ancemar ket ,wi t hast r ongdi st r i but i onf oot pr i ntofi t spar entSBI Out l ook: SBI Gi vent heunt appeddi st r i but i onr each,al ongwi t ht l wi nds f r om f i nanci al i sat i onofsavi ngs,i mpr ovi ngpr ot ect i onshar e,l owest oper at i ngcostr at i os,andi mpr ovi ngmar gi ns( VNBmar gi ns-19 9%) ,weexpectSBI LI FEt odel i verst eadyper f or mance.I nI ndi a,l i f e i nsur ancecompani esar ebei ngval uedatabr oadmul t i pl eupwar dsof~3xt heEmbeddedVal ue( EV)i mpl yi ngabul l i shout l ook f act or i ngst r onggr owt hi nt hi ssect orgi vent heunderpenet r at i onofl i f ei nsur ancei nt hecount r y Wear r i veatat ar getpr i ceofRs 936val ui ngt hest ockat3xFY21EEV Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne NetPr emi um ( RsCr ) PAT( Rscr ) Val ueofNew Embedded DPS( EPS( Rs ) ChangeYoY( %) Bu Rs) si ness( Rscr ) Val ue ( Rscr ) FY19 32890 1327 13 15 1920 22400 FY20E 40780 1514 15 13 2221 26557 FY21E 49934 1757 17 15 2695 31 183 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n DR REDDY’ SLABORATORI ES CMP: 2, 613 Tar get : 2, 900 % Upsi de 11% Dr Reddy' sLabor at or i esLt d.( DRRDI N)i sani nt egr at edphar maceut i calcompanyf ocusedonpr ovi di ngmedi ci nest hr oughi t st hr ee busi nessver t i cal s–Phar maceut i cal Ser vi ces&Act i veI ngr edi ent s( PSAI ) ,Gl obal Gener i csandPr opr i et ar ypr oduct s.DRRDpr ovi des awi der angeofpr oduct sandser vi cesi ncl API s,cust om phar maceut i calser vi ces,gener i c,bi osi mi l ar sandcompl exf or mul at i ons DRRDhasgl obalf oot pr i ntspanni ngUS,Eur ope,Russi a&CI Scount r i es,andI ndi a I nvest mentRat i onal e CMPasof7t hOct2019 St ockDat a No.ofshar es 16 61cr Mar ketcap( Rs) 43, 392cr 965/ 2, 065 52weekhi gh/ l ow( Rs) 2, 20, 971 Avg.dai l yvol ( 6mt hs) 2, Bl oomber gcode DRRDI N Reut er scode REDYNS Pr i cePer f or mance Robustgr owt hengi nes:Dr Reddy’ sLab.( DRRD I N)cont i nuest of ocusonsi xkeyar eas( namel yUS,I ndi a,Chi na,Russi a,API andGl obalhospi t al si ncl Bi ol ogi cs)f ort opl i negr owt h.Despi t eofdel ayi ngNuvar i ngandgCopaxoneappr oval / l aunch,companyi s conf i dentt ogr owUSbusi nessst eadi l yi nFY20/ 21E,l ar gel ydr i venbyover30l aunchescoupl edwi t hst r engt heni ngexi st i ngpor t f ol i o I naddi t i on,I ndi af or mul at i onbusi nesswi l lbekeyar eaf ort hegr owt h.Managementi ndi cat est oout paceover al lI PM gr owt hby 200300bpsgoi ngf or war d,pr i mar i l ydr i venbynewpr oductl aunchesandr ampupexi st i ngpor t f ol i o.Mor eover ,Russi abusi nesswi l l getbenef i t t edf r om t enderbusi nessofbi osi mi l ar / hospi t al s Benef i t sf r om costcont r olmeasur es:DRRDhasunder t akencostr at i onal i zat i onofi t sR&Dspendi ngandS&GAexpenses.Goi ng ahead,managementgui dedf orf ur t hercostr at i onal i zat i onofR&D,over headscost ,pr oductpor t f ol i oaswel l asopt i mi zat i onofMR’ s Recent l y ,DRRD hasdi vest ed noncor e asset s( t hr ee manuf act ur i ng uni t s)and al so sol dt hr ee der ma br andst o monet i ze i t s pr opr i et ar ypr oduct s.Wet hi nkcostcont r oli ni t i at i veswi l lshor eupover al lEBI TDAmar gi nandi mpr over et ur nr at i osi nFY20/ 21E St r ongbal ancesheetposi t i on:I nQ1FY20,DRRD hasgener at edf r eecashf l ow ofRs85Crandnetdebtt oequi t yst oodat0 04 Goi ngf or war d,DRRD wi l lf ocusoni mpr ovi ngpr of i t abi l i t y ,cont r olspendi ngandcapex,whi chwi l lst r engt henbal ancesheetand i mpr over et ur nr at i os Out l ook:Wi t hgai ni ngt r act i oni ndomest i cf or mul at i on,keyhi ghval uel aunchesi nt heUSmar ketcoupl edwi t hcostr at i onal i zat i on benef i t swi l l t r ansl at e~17% CAGRear ni ngsgr owt hoverFY1921E.Wear econst r uct i veonDRRD,gi veni mpr ovi ngFCFgener at i on andhi ghear ni ngsgr owt hvi si bi l i t y i sks:Regul at or yhur dl es,del ayi nUSappr oval sofni chepr oduct s( l i kegNuvar i ngandgCopaxone) ,andsl owdowni ndomest i c Keyr f or mul at i onbusi ness&ot herkeymar ket s Fi nanci alSummar y Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Y/ EMar ch Sal es( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) FY19 15385 1731 104 84 12 1 FY20E 16873 1948 17 12 13 12 FY21E 18840 2391 144 23 14 14 Sour ce:Company ,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n AARTII NDUSTRI ES CMP: 754 Tar get : 875 % Upsi de Aar t iI ndust r i es Lt d.( AI L)i st he l ar gestpr oducer s ofBenzene based basi c and i nt er medi at e chemi cal si nI ndi a.I thas 17 manuf act ur i ngpl ant sand3R&Dcent r esi nI ndi aand+200pr oduct s.TheseputAI Laheadoft hepeer si nt heBenzenechemi st r yi n I ndi a.AI Li sapr ef er r dpar t nerofchoi cef or+1000cust omer sgl obal l y I t sexpor t sf or m 60% oft ot alr evenues 16% I nvest mentRat i onal e CMPasof7t hOct2019 St ockDat a No.ofshar es 17 42cr Mar ketcap( Rs) 13, 132cr 564 52weekhi gh/ l ow( Rs) 909/ 993 Avg.dai l yvol ( 6mt hs) 53, Bl oomber gcode ARTO I N Reut er scode ARTINS Pr i cePer f or mance Heal t hygr owt hi nSpeci al t yChemi cal si ndust r y:Gl obalandI ndi anSpeci al t yChemi cal s( SC)i ndust r yi sexpect edt ogr ow at 6%/ 13% CAGR r espect i vel yoverFY1725E.Wi t h cr ackdown i n Chi na owi ng t o pol l ut i on nor msand cor por at esl ooki ng f or geogr aphi calder i ski ng,I ndi ahasbecomeapr ef er r edmar ketf orsuppl i esofSC;hence,ahi gherdemandf ort hesechemi cal s.We expect AI L’ sSCsegmentt or epor ta22% CAGRoverFY1821E.However ,i nt heneart er m somevol at i l i t ycoul dbewi t nessedowi ng t oer r at i cweat hercondi t i onsi nUS andgl obalsl owdowni nAut oi ndust r ywhi chi mpact edi t sr evenuesf r om Agr ochemi cal sand Aut omobi l esegmentbot ht oget herf or mi ng~50% oft ot alr evenues Phar masegmentatani nf l ect i onpoi nt :Wi t hf i xedcost sal r eadyf act or edi n,anyr i sei nvol umeswi l l boostt hesegmentpr of i t abi l i t y whi chhadbeenl owerovert hel ast5year sdespi t ei t st opl i negr owi ngat24% CAGR overt hesameper i od.However ,wi t hAI L consi st ent l yi nvest i ngi nR&D duet oi ncr easedAPIdemandonaccountofr evi vali ndomest i cPhar mai ndust r y Weexpectt he Phar masegmentt ogr owat30% CAGRoverFY1821E Hi gh Ent r ybar r i er s:Gi vent hespeci al i zednat ur eoft hesechemi cal s,appr ovalcycl et i mesar el ongerandst r et chanywher e bet ween3mont hsupt o2year sdependi ngoncust omer ’ sr equi r ement s.Forcompl expr oduct st heappr oval t i mecanbeevenl onger t husnecessi t at i ngast r ongbal ancesheet Fur t her ,amanuf act ur i ngpl antr equi r esanumberofendpr oduct st omakei teconomi cal l y vi abl ewhi chi samongstt hekeyst r engt hsofAI Lowi ngt oi t sover35year sexper i encei nt hei ndust r y t hought hemanagementhasshar pl yl ower edi t sgr owt hgui dance,webel i evet hesamehasbeenf act or edi nt heCMP Out l ook:Al Themul t i yearcont r act swonbyAI Lshal lbei ngcont r i but i ngf r om FY21Eonwar dswhi chcoul dof f sett heheadwi ndsf r om Aut oand Agr ochem sect or si nt he neart er m.Phar ma segmentwi l lt ake t he dr i ver sseatwi t h sust nabl e mar gi n pr of i l e of+20% over FY1921E.AtCMP,st ockt r adesat18xi t sSept21EEPS Fi nanci alSummar y Y/ EMar ch PAT( Rscr ) EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) FY19 4706 492 28 38 22 23 FY20E 5095 505 29 17 19 723 41 43 21 24 FY21E Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) 6043 Sour ce:Company ,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n MI NDTREE CMP: 721 Tar get : 896 % Upsi de Mi ndt r ee del i ver s di gi t alt r ansf or mat i on and t echnol ogy ser vi ces f r om i deat i on t o execut i on,enabl i ng Gl obal2000 cl i ent st o out per f or mt hecompet i t i on.Mi ndt r eet akesanagi l e,col l abor at i veappr oacht ocr eat i ngcust omi zedsol ut i onsacr osst hedi gi t al val ue chai n.Mi ndt r eedeepexper t i sei ni nf r ast r uct ur eandappl i cat i onsmanagementt ur nsI Ti nt oast r at egi casset 24% I nvest mentRat i onal e CMPasof7t hOct2019 St ockDat a No.ofshar es 16 46cr Mar ketcap( Rs) 1, 898cr 075/ 652 52weekhi gh/ l ow( Rs) 1, 81, 773 Avg.dai l yvol ( 6mt hs) 6, Bl oomber gcode MTCLI N Reut er scode MI NTNS St r ong managementand di gi t alsupr emacyt o dr i vegr owt h:Mr Chat t er j ee,t henewl yappoi nt edMD atMi ndt r eei sanex Cogni zant ,Di gi t alser vi ceswi t hexempl ar yt r ackr ecor d;weexpecthi spr of oundexper i encet owor ki nMi ndt r ee’ sf avour Expecta si mi l art ur nar ound atMi ndt r ee once t he cur r entdustset t l es whi ch has er upt ed due t ot he exi tofMi ndt r ee’ s er st whi l et op management Thi sexoduscoul dl eadt osomenear t er m di sr upt i on,whi chweexpectt oset t l edowni naf ew quar t er s.Once nor mal cyr et ur ns,weexpectt hest ockt or er at ef r om t hecur r entl evel Ar ecentZi nnovst udyf eat ur edMi ndt r eeasal eaderi ndi gi t al ser vi ces and I oT t echnol ogy ser vi ces i n 2019.Thi s posi t i oni ng r ei nf or ces t he company’ s abi l i t yt o del i verhol i st i c di gi t al t r ansf or mat i onser vi cest ocl i ent s Top10cl i ent ssetf orar obustFY20:SuccessofMi cr osof tdeal sdemonst r at est hatMi ndt r eei scapabl eofser vi ci ngandwi nni ng l ar gedeal sagai nstt opt i erpl ayer s.Af t eranuncer t nFY19i ni t st op210cl i entbaseowi ngt oar ampdowni nani nsur ancecl i ent ( t op10) ,Mi ndt r eedoesnotexpectanyf ur t herdi sr upt i onsi nt het op10;t heaf or ement i onedcl i enti snol ongerpar tofMi ndt r ee’ s t op10cl i ent sl i st I nf act ,gr owt hhaspi ckedupwel li nt op210cl i ent s,wi t hdoubl edi gi tgr owt hl ooki ngsust nabl e.Wedobel i eve t hatMi ndt r eehast heabi l i t yt oscal eupandt heagi l i t yt opr ovi dequal i t ydel i ver yacr osst heser vi cesval uechai n RobustOr der book:Thecompany’ sor derbooki ncr eased33 9% QoQ t oUS$324mi l l i on.Thedi gi t alor derbooki ncr eased8 7% QoQ t oUS$137mi l l i on.Di gi t alor derbookaccount sf or42% ofover al lor derbook.Basedont heor derbook,t hecompanyi s conf i dentofi ncur r i ngi mpr ovi ngr evenuegr owt hi ncomi ngquar t er s.Ont her evenuef r ont ,gi vent heheal t hypi pel i neandt her ampi ng ofpr oj ect sonschedul e,gr owt hshoul dr emai nabovei ndust r yaver age Pr i cePer f or mance Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) FY19 7022 754 45 34 25 30 FY20E 7670 626 37 ( 17 0) 19 21 FY21E 8537 803 48 28 21 24 Sour ce:Reut er s,ConsensusEst i mat es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n RI TES CMP: 261 Tar get : 328 % Upsi de 26% RI TES,i saMi ni r at na( Cat egor y–I )Schedul e‘ A’Publ i cSect orEnt er pr i se.I ti sal eadi ngpl ayeri nt het r anspor tconsul t ancyand engi neer i ngsect ori nI ndi awi t hdi ver si f i edser vi cesandgeogr aphi calr eachunderoner oof RI TES hasanexper i enceofover44 year sandhasunder t akenpr oj ect si n55+count r i esi ncl udi ngAsi a,Af r i ca,Lat i nAmer i ca,Sout hAmer i caandMi ddl eEast RI TESi s t heonl yexpor tar m ofI ndi anRai l waysf orpr ovi di ngr ol l i ngst ockover seas( ot hert hanThai l and,Mal aysi aandI ndonesi a) I nvest mentRat i onal e St r onganddi ver si f i edor derbook:RI TES st andal oneor derbookst andatRs6, 052cr or e( ~3xFY19r evenue) Or derbooki s expect edt ogr ow by+17% i nFY20overFY19whi chpr ovi desst r ongr evenuevi si bi l i t yf ornext23year s Or derbooki swel l di ver si f i edwi t hhi ghmar gi nconsul t ancyandl ow mar gi nt ur nkeybusi nesscont r i but i ng41% each.16% per t nst oexpor t sor der wher easasl easi ngbusi nesscont r i but esl eastat2 5% CMPasof7t hOct2019 St ockDat a No.ofshar es 25cr Mar ketcap( Rs) 6, 534cr 160 52weekhi gh/ l ow( Rs) 282/ Avg.dai l yvol ( 6mt hs) 206640 Bl oomber gcode RI TESI N Reut er scode RI TESNS Pr i cePer f or mance Gover nment ’ spush on I nf r ast r uct ur edevel opment :GoIi sexpect edt oi nvestheavi l yi nt hei nf r ast r uct ur esect or ,mai nl yf or hi ghways,r l ways,r enewabl eener gyandur bant r anspor t Rs5 97l akhcr or ehasbeenal l ocat edt ot hei nf r ast r uct ur esect ori nt he Uni onbudget201920.Tr anspor tI nf r ast r uct ur esect ori sexpect edt ogr ow atCAGR of5 9% overFY1721.I ndi ahasr equi r ement ofi nvest mentwor t h Rs50 l akh cr or ei ni nf r ast r uct ur e by2022 t o have sust nabl e devel opmenti nt he count r y Gover nment i nvest menthaswi t nessedst eepr i seovert hel astf ew year s,wi t hcont i nuat i onofpol i ci eswi t hi nt r anspor t at i oni nf r ast r uct ur e,t he sect ori ssett oopenupl ar geaddr essabl emar ketf orRI TES Out l ook:RI TEShascompet i t i veedgei nwi nni ngor der sowi ngt oi t s4+decadeofexper i encei nt r anspor ti nf r ast r uct ur econsul t ancy andi t sassoci at i onwi t hMoR Ampl eoppor t uni t i eswi t hi nr l ways( ~50% r evenueshar e)bei ngcapt ur edbyRI TESvi avent ur i ngi nt o t ur nkeypr oj ect sandr l wayst at i ondevel opmenti si ncr easi ngi t sscal eofoper at i ons.RI TES haspai ddi vi dendsr egul ar l yt ot he equi t yshar ehol der sandpayoutr at i ohasbeen+50% f orFY17FY19.Thecompany’ sst abl ef i nanci alposi t i onenabl esi tt osat i sf y t hemi ni mum f i nanci alel i gi bi l i t ycr i t er i af orbi ddi ngi npr oj ect sandassetl i ghtbusi nessmodelensur esheal t hyr et ur nr at i oswi t hRoE orFY19.Weest i mat eRI TESt opostr evenue/ PATgr owt hataCAGR of18 5%/ 21% r espect i vel yover at19% andRoCEat27% f FY1921E.FocusonSt r engt heni ngEPCbusi ness,di ver si f i cat i onandcont i nuousi nf r ast r uct ur epushbygover nmenti sexpect edt o augerwel lf orRI TES Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) FY19 2047 470 18 37 19 28 FY20E 2436 584 23 24 21 29 FY21E 2875 685 27 17 22 30 Sour ce:Company ,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n DI XONTECHNOLOGI ES CMP: 2, 972 Tar get : 3, 649 % Upsi de 23% Di xonTechnol ogi es( Di xon)i sal eadi ngmanuf act ur erofpr oduct sf orconsumerdur abl ebr ands.I thas~9 3% shar ei nEl ect r oni c Manuf act ur i ngSer vi cespr ovi di ngcostef f i ci ent ,endt oendsol ut i onst oMNC’ sanddomest i cOEM’ s.Di xon’ spr oduct si ncl ude ( i ) consumerel ect r oni cs-LEDTVs,( i i )homeappl i ances-Washi ngMachi nes,( i i i )l i ght i ngpr oduct s-LED bul bs( i v)mobi l ephones and( v)CCTV’ s&DVR’ s.Thecompanyal sopr ovi desr epai r s&r ef ur bi shmentser vi cest hr oughi t sRever sel ogi st i cssegment I nvest mentRat i onal e Leadi ngEMSpl ayerwi t hhugeoppor t uni t i es:Di xoni sal eadi ngpl ayeri nFl atPanelDi spl ay( FPD)TVwi t h50%+mar ketshar e, i nLEDLi ght i ngi taccount sf or~35%+domest i cvol umesandcommands40%+shar ei nt heWashi ngMachi nesEMSmar ket I ndi an ConsumerEl ect r oni csandAppl i ancesmar keti sexpect edt ogr ow atf ast erpaceof~19% CAGR bet weenFY1921Eascompar ed t ogl obalCEAmar ketgr owt hat8% CAGRi nt hesameper i od.Hi ghgr owt hi nconsumerel ect r oni csandi ncr easi ngEMSpr esent sa hugeoppor t uni t yf orpl ayer sl i keDi xon CMPasof7t hOct2019 St ockDat a No.ofshar es 13cr Mar ketcap( Rs) 3, 368cr 059/ 1831 52weekhi gh/ l ow( Rs) 3, Avg.dai l yvol ( 6mt hs) 6742 Bl oomber gcode DI XON.I N Reut er scode DI XO NS I ncr easi ngt r endt owar dsODM manuf act ur i ngt oaugurwel lf orDi xon:OEM’ spr ef erEMSpl ayer st ocat ert ol ocaldomest i c needsasODMscostef f ect i vesol ut i onsandval ueaddedpr oduct s.Thi sai dsOEM’ st of ocusondi f f er ent i at i onvi anew pr oduct i nnovat i on,Br andbui l di ng, Mar ket i nganddi st r i but i on.Di xon,acostef f i ci entsol ut i onpr ovi derandal eaderi nODM i swel l equi pped t ocapi t al i zeonr i si ngOEM’ sdemandf orODM.ODM busi nessf et ches~200300bpshi ghermar gi nst hanOEM busi ness Backwar di nt egr at ed costef f ect i ve manuf act ur er and di ver se pr oductof f er i ngs:Di xon has devel oped capabi l i t yi n manuf act ur i ng cr i t i calcomponent s due t o backwar di nt egr at i on.Thi s has st r engt hened r el at i onshi p wi t h cust omer s,r educed dependencyont hi r dpar t ysuppl i er sandl edt ocostef f i ci enci es.Mor eover ,i thasenabl ed Di xon t oi ncr easet henumberofpr oduct of f er i ngswi t hi nkeysegment sl i keLEDl i ght i ng,washi ngmachi nesandFPDTV’ s r onggr owt hi nkeysegment svi z,ConsumerEl ect r oni cs,Li ght i ngandHomeAppl i ancesl edbyst r ongor der Out l ook:Weexpectst book Addi t i onofnewcl i ent s,r ecover yi nmobi l esegmentandr obustgr owt hi nSecur i t ysur vei l l ancesegmentt oai dr evenuegr owt h goi ngf or war d.Wemai nt nabuywi t hat ar getpr i ceofRs3649 Pr i cePer f or mance Fi nanci alSummar y Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne Sal es( Rscr ) PAT( Rscr ) EPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) FY19 2984 63 55 18 32 FY20E 3868 98 86 54 22 35 FY21E 4754 129 14 31 24 35 Sour ce:Company ,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n LUMAXI NDUSTRI ES CMP: 1, 150 Tar get : 1, 600 % Upsi de LumaxI ndust r i esLi mi t ed( Lumax) ,pr omot edbySCJai ngr oup,i st hemar ketl eaderi nI ndi anAut omot i vel i ght i ngsyst emswi t hnear l y 60% mar ketshar ei nPVand2wheel ersegment I thashadsever aldecadesoff i nanci alandt echni calcol l abor at i onwi t hSt anl ey , Japan( wor l dl eaderi naut omot i vel i ght i ng)gi vi ngi tahuget echnol ogi caledgeovercompet i t or s 39% I nvest mentRat i onal e Mar ketLeaderandpr esenceacr ossal lOEM’ s:Lumaxi snotj ustt hemar ketl eaderbuthasr el at i onshi pswi t h90% ofal lOr i gi nal Equi pmentManuf act ur er s( OEM’ s)i nI ndi a.I t ’ st opcl i enti sMar ut i( mar ketl eaderi nPVsegment )whi chcont r i but edabout36% t o i t sr evenuei nFY19.Ot hermaj orr evenuecont r i but or si ncl udeM&M,Her oMot ocor p,Honda2wheel erandHondaCar saccount i ng f or40% ofr evenues.Thecompanyal sosuppl i est osomel uxur ycarmaker sl i keAudiandJLR.I thast i edupwi t hot herOEM l i ke Dai ml er ,Ni ssan,KI Amot or s,MG mot or s CMPasof7t hOct2019 St ockDat a No.ofshar es 93cr Mar ketcap( Rs) 1, 083cr 969/ 910 52weekhi gh/ l ow( Rs) 1, 888 Avg.dai l yvol ( 6mt hs) 1, Bl oomber gcode LUMXI N Reut er scode LUMABO Pr i cePer f or mance LEDi f i cat i onofaut omot i vel i ght s: Ther ehasbeenagr owi ngshi f tf r om hal ogenl i ght st oLED l i ght si nt wowheel er sandPV segmenti nt hepast23year s.I thasbeenl edbypr emi um car sbuti ssl owl ybei ngadopt edbyaf f or dabl ecar ssegmentaswel l The LEDl i ght shavemar gi nof33 5t i mest hatofhal ogenl i ght sandLumaxi sexpect i ngnear l y50% shar eofr evenuecomi ngf r om LED ( f r om cur r ent35% shar e)i nt henextyearorso.Thi swoul dhel pLumaxr eal i zehi ghermar gi nsandbeati ndust r ygr owt h I nsour ci ng ofel ect r oni c component s:Lumaxhasconsci ousl ydeci ded t o cutcost sand capi t alexpendi t ur ei nt he pr esent si t uat i onofdemanddownt ur n.Theyhaveputi npl aceapl ant oi nsour ceel ect r oni ccomponentt oi ncr easeoper at i onalef f i ci ency andcutcost s.I nQ1FY20,t heyi ncr easedEBI DTAmar gi nsby~50bpsbyi nsour ci ngPCBuni t( acqui r edf r om LumaxAut omot i ve t echnol ogi es) Thi st r endwoul dhel psuppor tmar gi nsi nt hemi dstofdemandsl ump nmaj orupcomi ngmodel s:Lumaxhasbaggednew or der sf r om MG mot or s( f ort hever ywel lr ecei vedMG Hect orcar ) I nr oadsi f orbot hheadandt ll i ght s.I nQ1FY20al one,i tcont r i but edt o2Crofr evenueandmor ecol l abor at i oni sexpect edwi t ht hem.They haveal sobaggedor der sf orMar ut i ’ snewl auncht hi squar t erandonei nQ4FY20.I nt wowheel ersegmenti thasbaggedor der sf or TVS’ snew l aunch.I t ssubsi di ar ySLLumax( 21% st ake)hasmadei nr oadswi t hKI AMot or sandt hi sshoul dal sodr i ver evenue si gni f i cant l ygoi ngf or war d Fi nanci alSummar y Sal es( Rscr ) Adj PAT( Rscr ) FY19 1851 76 81 24 23 FY20E 1844 73 78 ( 1) 15 20 FY21E 21 15 88 94 20 16 22 Y/ EMar ch Sour ce:Axi sSecur i t i esLt d,Capi t al i ne FDEPS( Rs ) ChangeYoY( %) RoE( %) RoCE( %) Sour ce:Company ,Axi sSecur i t i es ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n Di scl osur es: Thef ol l owi ngDi scl osur esar ebei ngmadei ncompl i ancewi t ht heSEBIResear chAnal ystRegul at i ons2014( her ei naf t err ef er r edt oast heRegul at i ons) sSecur i t i esLt d.( ASL)i saSEBIRegi st er edResear chAnal ysthavi ngr egi st r at i onno.I NH000000297.ASL,t heResear chEnt i t y( RE)asdef i nedi nt heRegul at i ons,i sengagedi nt hebusi nessofpr ovi di ng 1.Axi St ockbr oki ngser vi ces,Deposi t or ypar t i ci pantser vi ces&di st r i but i onofvar i ousf i nanci al pr oduct s ASLi sasubsi di ar ycompanyof Axi sBankLt d Axi sBankLt d.i sal i st edpubl i ccompanyandoneofI ndi a’ sl ar gest pr i vat esect orbankandhasi t svar i oussubsi di ar i esengagedi nbusi nessesofAssetmanagement ,NBFC,Mer chantBanki ng,Tr ust eeshi p,Vent ur eCapi t al ,St ockBr oki ng,t hedet l si nr espectofwhi char e avai l abl eonwww axi sbank com 2.ASLi sr egi st er edwi t ht heSecur i t i es&ExchangeBoar dofI ndi a( SEBI )f ori t sst ockbr oki ng&Deposi t or ypar t i ci pantbusi nessact i vi t i esandwi t ht heAssoci at i onofMut ualFundsofI ndi a( AMFI )f ordi st r i but i on off i nanci alpr oduct sandal sor egi st er edwi t hI RDAasacor por at eagentf ori nsur ancebusi nessact i vi t y 3.ASLhasnomat er i aladver sedi sci pl i nar yhi st or yasont hedat eofpubl i cat i onoft hi sr epor t / We,aut hor / s( Resear chTeam)andt hename/ ssubscr i bedt ot hi sr epor t ,her ebycer t i f yt hatal loft hevi ewsexpr essedi nt hi sr esear chr epor taccur at el yr ef l ectmy/ ourvi ewsaboutt hesubj ecti ssuer ( s)or 4.I secur i t i es.I / We( Resear chAnal yst )al socer t i f yt hatnopar tofmy/ ourcompensat i onwas,i s,orwi l l bedi r ect l yori ndi r ect l yr el at edt ot hespeci f i cr ecommendat i on( s)orvi ew( s)i nt hi sr epor t I / weormy/ ourr el at i ve orASLori t sAssoci at edoesnothaveanyf i nanci ali nt er esti nt hesubj ectcompany Al soI / weormy/ ourr el at i veorASLori t sAssoci at esmayhavebenef i ci alowner shi pof1% ormor ei nt hesubj ectcompanyat t heendoft hemont hi mmedi at el ypr ecedi ngt hedat eofpubl i cat i onoft heResear chRepor t Si nceassoci at esofASLar eengagedi nvar i ousf i nanci alser vi cebusi nesses,t heymi ghthavef i nanci ali nt er est sor benef i ci alowner shi pi nvar i ouscompani esi ncl udi ngt hesubj ectcompany/ compani esment i onedi nt hi sr epor t I / weormy/ ourr el at i veorASLori t sassoci at edoesnothaveanymat er i alconf l i ctofi nt er est I / we havenotser vedasdi r ect or/of f i cer ,et c.i nt hesubj ectcompanyi nt hel ast12mont hper i od PankajBobade Resear chAnal yst pankaj bobade@axi ssecur i t i es i n Suvar naJoshi Resear chAnal yst suvar na j oshi @axi ssecur i t i es i n Si j iPhi l i p Resear chAnal yst Si j iPhi l i p@axi ssecur i t i es i n OmkarTanksal e Resear chAnal yst omkar t anksal e@axi ssecur i t i es i n Vi shal Advani Resear chAnal yst vi shal advani @axi ssecur i t i es i n Anki tSuchant i Resear chAssoci at e anki t suchant i @axi ssecur i t i es i n Hi r enTr i vedi Resear chAssoci at e hi r en t r i vedi @axi ssecur i t i es i n KumarNi hal Resear chAssoci at e kumar ni hal @axi ssecur i t i es i n TanviShet t y Resear chAssoci at e TanviShet t y@axi ssecur i t i es i n 5.ASLori t sAssoci at eshasnotr ecei vedanycompensat i onf r om t hesubj ectcompanyi nt hepastt wel vemont hs.I / WeorASLori t sAssoci at ehasnotbeenengagedi nmar ketmaki ngact i vi t yf ort hesubj ect company 6.I nt hel ast12mont hper i odendi ngont hel astdayoft hemont hi mmedi at el ypr ecedi ngt hedat eofpubl i cat i onoft hi sr esear chr epor t ,ASLoranyofi t sassoci at esmayhave: i Recei vedcompensat i onf ori nvest mentbanki ng,mer chantbanki ngorst ockbr oki ngser vi cesorf oranyot herser vi cesf r om t hesubj ectcompanyoft hi sr esear chr epor tand/or ; i i Managedorcomanagedpubl i cof f er i ngoft hesecur i t i esf r om t hesubj ectcompanyoft hi sr esear chr epor tand/or ; i i i Recei vedcompensat i onf orpr oduct sorser vi cesot hert hani nvest mentbanki ng,mer chantbanki ngorst ockbr oki ngser vi cesf r om t hesubj ectcompanyoft hi sr esear chr epor t ; ASLoranyofi t sassoci at eshavenotr ecei vedcompensat i onorot herbenef i t sf r om t hesubj ectcompanyoft hi sr esear chr epor toranyot hert hi r dpar t yi nconnect i onwi t ht hi sr epor t Ter m&Condi t i ons: epor thasbeenpr epar edbyASLandi smeantf orsol eusebyt her eci pi entandnotf orci r cul at i on.Ther epor tandi nf or mat i oncont nedher ei ni sst r i ct l yconf i dent i alandmaynotbeal t er edi nanyway , Thi sr t r ansmi t t edt o,copi edordi st r i but ed,i npar tori nwhol e,t oanyot herper sonort ot hemedi aorr epr oducedi nanyf or m,wi t houtpr i orwr i t t enconsentof ASL.Ther epor ti sbasedont hef act s,f i gur esandi nf or mat i on t hatar econsi der edt r ue,cor r ect ,r el i abl eandaccur at e.Thei nt entoft hi sr epor ti snotr ecommendat or yi nnat ur e.Thei nf or mat i oni sobt nedf r om publ i cl yavai l abl emedi aorot hersour cesbel i evedt ober el i abl e Suchi nf or mat i onhasnotbeeni ndependent l yver i f i edandnoguar ant y ,r epr esent at i onofwar r ant y ,expr essori mpl i ed,i smadeast oi t saccur acy ,compl et enessorcor r ect ness.Al lsuchi nf or mat i onandopi ni ons ar esubj ectt ochangewi t houtnot i ce.Ther epor ti spr epar edsol el yf ori nf or mat i onalpur poseanddoesnotconst i t ut eanof f erdocumentorsol i ci t at i onofof f ert obuyorsel lorsubscr i bef orsecur i t i esorot her f i nanci ali nst r ument sf ort hecl i ent s.Thoughdi ssemi nat edt oal lt hecust omer ssi mul t aneousl y ,notal lcust omer smayr ecei vet hi sr epor tatt hesamet i me.ASLwi l lnott r eatr eci pi ent sascust omer sbyvi r t ueof t hei rr ecei vi ngt hi sr epor t ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n Di scl mer : Not hi ngi nt hi sr epor tconst i t ut esi nvest ment ,l egal ,account i ngandt axadvi ceorar epr esent at i ont hatanyi nvest mentorst r at egyi ssui t abl eorappr opr i at et ot her eci pi ent ’ sspeci f i cci r cumst ances.Thesecur i t i es andst r at egi esdi scussedandopi ni onsexpr essed,i fany ,i nt hi sr epor tmaynotbesui t abl ef oral li nvest or s,whomustmaket hei rowni nvest mentdeci si ons,basedont hei rowni nvest mentobj ect i ves,f i nanci al posi t i onsandneedsofspeci f i cr eci pi ent Thi sr epor tmaynotbet akeni nsubst i t ut i onf ort heexer ci seofi ndependentj udgmentbyanyr eci pi ent Eachr eci pi entoft hi sr epor tshoul dmakesuchi nvest i gat i onsasi tdeemsnecessar yt oar r i veatan i ndependenteval uat i onofani nvest menti nt hesecur i t i esofcompani esr ef er r edt oi nt hi sr epor t( i ncl udi ngt hemer i t sandr i sksi nvol ved) ,andshoul dconsul ti t sownadvi sor st odet er mi net hemer i t sandr i sksof suchani nvest ment Cer t nt r ansact i ons,i ncl udi ngt hosei nvol vi ngf ut ur es,opt i onsandot herder i vat i vesaswel lasnoni nvest mentgr adesecur i t i esi nvol vesubst ant i alr i skandar enotsui t abl ef oral li nvest or s ASL,i t sdi r ect or s,anal yst sorempl oyeesdonott akeanyr esponsi bi l i t y ,f i nanci alorot her wi se,oft hel ossesort hedamagessust nedduet ot hei nvest ment smadeoranyact i ont akenonbasi soft hi sr epor t , i ncl udi ngbutnotr est r i ct edt o,f l uct uat i oni nt hepr i cesofshar esandbonds,changesi nt hecur r encyr at es,di mi nut i oni nt heNAVs,r educt i oni nt hedi vi dendori ncome,et c.Pastper f or mancei snotnecessar i l ya gui det of ut ur eper f or mance.I nvest or sar eadvi cenecessar i l yagui det of ut ur eper f or mance.I nvest or sar eadvi sedt oseeRi skDi scl osur eDocumentt ounder st andt her i sksassoci at edbef or ei nvest i ngi nt he secur i t i esmar ket s.Act ualr esul t smaydi f f ermat er i al l yf r om t hosesetf or t hi npr oj ect i ons.For war dl ooki ngst at ement sar enotpr edi ct i onsandmaybesubj ectt ochangewi t houtnot i ce ASLandi t saf f i l i at edcompani es,t hei rdi r ect or sandempl oyeesmay;( a)f r om t i met ot i me,havel ongorshor tposi t i on( s)i n,andbuyorsel lt hesecur i t i esoft hecompany( i es)ment i onedher ei nor( b)beengaged i nanyot hert r ansact i oni nvol vi ngsuchsecur i t i esorear nbr oker ageorot hercompensat i onoractasamar ketmakeri nt hef i nanci ali nst r ument soft hecompany( i es)di scussedher ei noractasanadvi soror i nvest mentbanker ,l ender / bor r owert osuchcompany( i es)ormayhaveanyot herpot ent i alconf l i ctofi nt er est swi t hr espectt oanyr ecommendat i onandot herr el at edi nf or mat i onandopi ni ons.Eachoft hese ent i t i esf unct i onsasasepar at e,di st i nctandi ndependentofeachot her Ther eci pi entshoul dt aket hi si nt oaccountbef or ei nt er pr et i ngt hi sdocument ASLand/ori t saf f i l i at esdoandseekt odobusi nessi ncl udi ngi nvest mentbanki ngwi t hcompani escover edi ni t sr esear chr epor t s.Asar esul t ,t her eci pi ent soft hi sr epor tshoul dbeawar et hatASLmayhavea pot ent i al conf l i ctofi nt er estt hatmayaf f ectt heobj ect i vi t yoft hi sr epor t Compensat i onofResear chAnal yst si snotbasedonanyspeci f i cmer chantbanki ng,i nvest mentbanki ngorbr oker ageser vi cet r ansact i ons ASLmayhavei ssuedot herr epor t st hatar ei nconsi st entwi t handr eachdi f f er entconcl usi onf r om t hei nf or mat i onpr esent edi nt hi sr epor t Nei t hert hi sr epor tnoranycopyofi tmaybet akenort r ansmi t t edi nt ot heUni t edSt at e( t oU S.Per sons) ,Canada,orJapanordi st r i but ed,di r ect l yori ndi r ect l y ,i nt heUni t edSt at esorCanadaordi st r i but edor r edi st r i but edi nJapanort oanyr esi dentt her eof I ft hi sr epor ti si nadver t ent l ysentorhasr eachedanyi ndi vi duali nsuchcount r y ,especi al l y ,USA,t hesamemaybei gnor edandbr oughtt ot heat t ent i onoft he sender Thi sr epor ti snotdi r ect edori nt endedf ordi st r i but i ont o,oruseby ,anyper sonorent i t ywhoi saci t i zenorr esi dentoforl ocat edi nanyl ocal i t y ,st at e,count r yorot herj ur i sdi ct i on,wher esuchdi st r i but i on, l abi l i t yorusewoul dbecont r ar yt ol aw,r egul at i onorwhi chwoul dsubj ectASLt oanyr egi st r at i onorl i censi ngr equi r ementwi t hi nsuchj ur i sdi ct i on.Thesecur i t i esdescr i bedher ei nmayormaynot publ i cat i on,avai beel i gi bl ef orsal ei nal lj ur i sdi ct i onsort ocer t ncat egor yofi nvest or s TheDi scl osur esofI nt er estSt at ementi ncor por at edi nt hi sdocumenti spr ovi dedsol el yt oenhancet het r anspar encyandshoul dnotbet r eat edasendor sementoft hevi ewsexpr essedi nt her epor t TheCompany r eser vest her i ghtt omakemodi f i cat i onsandal t er nat i onst ot hi sdocumentasmayber equi r edf r om t i met ot i mewi t houtanypr i ornot i ce.Thevi ewsexpr essedar et hoseoft heanal yst ( s)andt heCompanymay ormaynotsubscr i bet oal lt hevi ewsexpr essedt her ei n Copyr i ghti nt hi sdocumentvest swi t hAxi sSecur i t i esLi mi t ed i t i esLi mi t ed,Cor por at eof f i ce:Uni tNo.2,Phoeni xMar ketCi t y ,15,LBSRoad,NearKamani Junct i on,Kur l a( west ) ,Mumbai 400070,Tel No.–022-40508080/ 022-61480808,Regd.of f -Axi sHouse, Axi sSecur 8t hFl oor ,Wadi aI nt er nat i onalCent r e,Pandur angBudhkarMar g,Wor l i ,Mumbai–400025.Compl i anceOf f i cer :AnandShaha,Emai l :compl i ance of f i cer @axi sdi r ect i n,TelNo:02242671582 ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n Formor eupdat es , f ol l owuson F ac e book T wi t t e r Y out ube L i nk e di n FORMOREDETAI LS: Vi s i t : www ax i s di r e c t i n E mai l : he l pde s k @ax i s di r e c t i n Phone: 02240508080/ 02261480808 ©Axi sSecur i t i esLi mi t ed.2019|www axi sdi r ect i n ... wowheel ersegment CMP:Rs.1, 150 CMPasof7t hOc t2019 Not e:c ompani esabovear ear r angedi nor derofMar ketCap ©Axi sSecur i t i esLi mi t ed .2019| www axi sdi r ect i n HI NDUSTAN UNI LEVER... kbymar gi n.Ourr ecommendedpor t f ol i ohas gi venar et ur nof12% f r om 23r dOct2018t i l l 9t hOct2019compar edt ot hebenchmar k( CNX500)whi chhasr et ur ned8 1% overt hesame per i od PastMuhur... cks2017 ( 4%) ( 3%) Muhur atPi cks2018 12 00% 10% Out per f or mance ©Axi sSecur i t i esLi mi t ed .2019| www axi sdi r ect i n MUHURATPI CKSSAMVAT2076 Hi ndust anUni l ever Kot akMahi ndr aBank I