VALUEGUIDE AUGUST 2020 - SHAREKHAN

 
VALUEGUIDE AUGUST 2020 - SHAREKHAN
ValueGuide
                                                                        August 2020

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VALUEGUIDE AUGUST 2020 - SHAREKHAN
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CONTENTS

From the Editor’s Desk                                                                                         EQUITY
                                                                                                              FUNDAMENTALS
Markets have surprised
even the most optimistic                                                                                                                                            REGULAR FEATURES
of investors with the                                                                                          3R Stock Idea                                     07 Report Card      04
unrelenting rally for more                                                                                     Stock Update                                      08 Earnings Guide   49
than four months now.                                                                                          Sector Update                                     31
Given the economic fallout
of the COVID-19 pandemic,                                                                                      TECHNICALS                                       DERIVATIVES
demand destruction and
                                                                                                               Nifty                                         39 View                                              40
the pressure on businesses
globally, the surge in the equity market is intriguing to say
the least. ...
                                                                                                06
                                                                                                               ADVISORY DESK                                    DERIVATIVES
                                                                                                               MID Trades                                    44 Derivatives Ideas                                 44
PMS DESK
                                   ProPrime - Prime Picks                                         43
                                                                                                               CURRENCY
                                                                                                              FUNDAMENTALS
                                                                                                               USD-INR                                        41 GBP-INR                                           41
                                                                                                               EUR-INR                                        41 JPY-INR                                           41

                                                                                                              TECHNICALS
                                   MUTUAL FUND DESK                                               45
                                                                                                               USD-INR                                       42 GBP-INR                                           42
                                                                                                               EUR-INR                                       42 JPY-INR                                           42

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June 2017
August 2020                                                                                               3                                                                   Sharekhan ValueGuide
REPORT CARD                                                                                                    EQUITY                       FUNDAMENTALS

STOCK IDEAS STANDING (AS ON AUGUST 03, 2020)
                                      CURRENT    PRICE AS ON    PRICE       52 WEEK           ABSOLUTE PERFORMANCE                      RELATIVE TO SENSEX
COMPANY
                                       RECO     03-AUG-2020    TARGET    HIGH    LOW         1M    3M      6M    12M             1M         3M      6M     12M
Automobiles
Apollo Tyres                            Buy              108      135      197         74     -5.4     21.7    -33.0    -26.5     -7.8         4.5    -26.1    -27.0
Ashok Leyland                          Hold               49       60       88         34     0.3      -0.1    -37.6    -23.0     -2.2       -14.2     -31.1   -23.5
Bajaj Auto                              Buy             2917     3500     3315        1793    -0.6    19.5      -7.8     11.3     -3.1         2.6      1.8     10.6
Hero MotoCorp                           Buy             2631     3200     3021        1475    -3.9    31.4      6.8       9.6     -6.3        12.8     18.0     8.9
M&M                                     Buy              597      750      641        246     12.7    67.4       3.6      9.4     9.9         43.7     14.4      8.7
Maruti Suzuki                           Buy             6166     6925     7755    4002        3.9     26.1     -14.4     8.8       1.3         8.2     -5.4      8.1
TVS Motor                               Buy             396       470      503        240     0.2     27.4     -12.8      5.4     -2.3         9.4     -3.8      4.7
BSE Auto Index                                        16399              19057    10141       3.7     31.9      -9.9     6.2          1.1    13.3      -0.5     5.5
Banks & Finance
Axis Bank                               Buy              417      585      766        285     -2.6     3.6     -41.6    -37.0     -5.0        -11.0   -35.5    -37.5
Bajaj Finance                           Buy             3173     3800     4923        1783    8.2     52.5     -29.8      0.4     5.5         31.0    -22.4     -0.3
Bajaj Finserv                           Buy            6073      7500    10297    3986        -1.3    27.4     -36.4     -13.1    -3.7         9.4    -29.8    -13.7
Bank of Baroda                         Hold               47       56      108         36     -7.7      2.1    -46.2    -54.6    -10.0       -12.4    -40.6    -54.9
Bank of India                          Hold               48       53       80         30     -5.2    42.4     -26.6    -30.3     -7.6       22.2     -19.0    -30.8
Federal Bank                            Buy               52       60       99         36     -1.0     19.1    -41.6    -40.0     -3.5         2.2    -35.5    -40.4
HDFC                                    Buy             1740      2113    2500        1473    -7.7     0.9     -25.8    -19.2    -10.0       -13.3     -18.1   -19.7
HDFC Bank                               Buy             1002     1400     1304        739     -6.7     8.5     -18.5    -54.0     -9.0        -6.8    -10.0    -54.3
ICICI Bank                              Buy              343      485      552        269     -4.9      1.5    -35.3    -14.7     -7.2       -12.8    -28.5    -15.3
LIC Housing Finance                    Hold             258       285      509         186    -6.1    -0.6     -34.4    -48.0     -8.4       -14.6    -27.6    -48.4
Max Financial                           Buy              543      570       611       280     -2.3     17.3     12.4    34.3      -4.7         0.7     24.1    33.5
Punjab National Bank                   Hold               33       45       70         26     -8.5     8.8     -42.0    -50.6    -10.8        -6.6    -36.0    -50.9
SBI                                     Buy              192      280      351         150    4.0       7.4    -37.3    -36.0         1.4     -7.8    -30.7    -36.4
BSE Bank Index                                        23927              37193    18430       -3.5     5.5     -31.9    -23.4     -5.9        -9.4    -24.8    -23.9
Consumer goods
                New Ide
Asian Paints           a                Buy             1705     1987      1916       1432    0.5       1.7     -9.8     11.8     -2.0       -12.7     -0.4      11.1
Britannia                               Buy             3776     4200     4015        2101     6.7    22.1      16.8    46.8      4.0          4.8    29.0     45.8
Emami                                   Buy              241      320      357         141    4.9     27.8     -19.8    -22.6     2.3          9.7     -11.5   -23.1
Godrej Consumer Products                Buy             698       810      772        425     -2.7    32.8       6.7     13.9     -5.1        14.0     17.8     13.2
Hindustan Unilever                      Buy            2205      2550     2614        1756     1.5     5.9       2.3    26.6      -1.0         -9.1    13.0    25.8
ITC                                     Buy              193      250      266         135     -7.1    10.7    -10.7    -25.8     -9.4        -4.9     -1.4    -26.2
Jyothy Laboratories                     Buy              125      170      185         86     2.4     14.9     -18.3    -19.5     -0.2        -1.4     -9.8    -20.1
Marico                                  Buy              363      420      404        234      1.2    27.6      18.1     -2.9     -1.3         9.5    30.4      -3.5
Tata Consumer Products     New Ide
                                  a     Buy              434      522      530         214    9.5     29.6      14.3    66.4      6.8         11.3    26.2     65.3
Zydus Wellness                          Buy             1726     1780     1859        1070   30.0     32.2      14.8     13.5    26.7         13.5    26.8      12.7
BSE FMCG Index                                         11418             12378     8491       -0.1    10.3      -1.4      4.7     -2.6        -5.3     8.9      4.0
IT / IT services
HCL Technologies                        Buy              706      750      718        376     21.9    37.3     20.4     -30.2     18.9        17.9    32.9     -30.6
Infosys                                 Buy              957        **     986         511   25.5     42.1      21.5    23.3     22.4        22.0     34.2     22.5
L&T Technology services New Idea        Buy             1534     1600     1780        995     18.5    28.9      -9.6      2.6     15.6        10.7     -0.2     2.0
Persistent Systems                      Buy              978     1000     1040        420    52.6      111.1   36.6     90.0     48.8         81.3    50.9      88.7
Tata Consultancy Services              Hold             2251        **    2357        1504    2.4      16.7     6.8       0.1     -0.2         0.2     17.9     -0.5
Wipro                                  Hold              281        **     291         160   25.2     47.9       17.1     7.3     22.1        27.0    29.3       6.6
BSE IT Index                                           18133             18551    10937       17.1    34.0     12.9     15.9     14.2        15.0     24.7     15.2
Capital goods / Power
CESC                                    Buy             549       825      855        366    -12.8    -12.9    -23.1    -26.1    -15.0       -25.2     -15.1   -26.6
Finolex Cable                          Hold             269       325      433         165    -8.3    10.6     -28.7    -27.5    -10.6        -5.0    -21.2    -27.9
Greaves Cotton                         Hold               79       90      154         66     -8.5     4.0     -40.3    -32.6    -10.8       -10.7    -34.1    -33.0
Kalpataru Power Transmission            Buy             229       300      515         170    -2.4     4.5     -47.6    -49.5     -4.8       -10.3    -42.2    -49.8
KEC International                       Buy             268       370      358         155    -3.2    33.6     -19.7     -10.1    -5.6        14.7     -11.4   -10.7
Thermax                                Hold              742      815      1180       644     -3.1     5.4     -28.1    -28.1     -5.5        -9.5    -20.6    -28.5
Triveni Turbine                        Hold               64       72       115        46    -12.4    -6.2     -33.4    -37.3    -14.6       -19.5    -26.5    -37.7
V-Guard Industries                      Buy              162      200      260         149    -4.6     -5.1    -24.9    -26.7     -7.0       -18.5     -17.1   -27.2

August 2020                                                                       4                                                   Sharekhan ValueGuide
EQUITY                                    FUNDAMENTALS                                                                                     REPORT CARD
STOCK IDEAS STANDING (AS ON AUGUST 03, 2020)
                                                    CURRENT    PRICE AS ON     PRICE       52 WEEK           ABSOLUTE PERFORMANCE                  RELATIVE TO SENSEX
COMPANY
                                                     RECO     03-AUG-2020     TARGET    HIGH    LOW         1M    3M      6M    12M           1M       3M      6M     12M
BSE Power Index                                                      1528                2057     1275      -4.9     5.6    -19.7     -19.1    -7.3      -9.4    -11.3    -19.6
BSE Capital Goods Index                                              12751              19428    9499        -2.7   10.1    -24.4    -24.9    -5.2       -5.5    -16.5    -25.4
Infrastructure / Real estate
Larsen & Toubro                                       Buy              916      1250     1554         661    -3.0    7.6    -29.1    -31.9     -5.4      -7.6    -21.7    -32.4
Sadbhav Engineering                                   Buy               43        75      148         23     -5.0   -12.1   -62.7    -64.5     -7.4     -24.5    -58.8    -64.7
CNX Infra Index                                                       3113               3392    2073        0.2    16.7     -4.3      3.1     -2.3      0.2       5.7      2.4
BSE Real estate Index                                                1557                2565     1259       -2.3   15.3    -35.8    -21.7    -4.8       -1.0    -29.1    -22.2
Oil & gas
Mahanagar Gas         New Ide
                             a                        Buy              972      1380     1247        666     -9.2    3.3    -19.0    20.6     -11.5      -11.3   -10.5     19.8
Oil India Ltd                                         Buy               95        115     175         66     -2.5    0.4    -26.4    -37.3     -4.9     -13.8    -18.8    -37.7
Petronet LNG                                          Buy             250        300      302         171    -8.4    8.2     -7.4      5.6    -10.7       -7.1     2.2      4.9
Reliance Ind                                          Buy            2008       2400     2199        868     12.4   39.9    40.9      75.7     9.6       20.1    55.5      74.6
BSE Oil and gas Index                                               12980               15772    8724        -0.3   12.0     -7.6      1.3     -2.7      -3.9     2.0       0.7
Pharmaceuticals
Aurobindo Pharma                                     Hold             868          **     968         281    11.5   32.9     75.3    58.3       8.7       14.1   93.5      57.2
Cadila Healthcare                                    Hold             395        445      412        206      7.9   19.6    49.6      76.7     5.2        2.7    65.2     75.5
Cipla                                                 Buy               711      875      814        357     11.2    16.1   58.4     36.9      8.5       -0.3    74.9     36.0
Divi's Labs                                           Buy            2632       3400     3228        1467   20.2     15.1   34.2     66.9      17.2      -1.2    48.2     65.8
IPCA Lab                                              Buy             1888      2365     2175        844     13.5   17.0    60.2     98.9      10.7       0.5    76.9      97.6
Lupin                                                Hold              927       965      978        505      3.1   10.2    28.5     22.5      0.5       -5.4     41.9     21.7
Sun Pharmaceutical Industries                        Hold             520        575      551         315    9.0     11.8    22.1     24.7     6.3       -4.0    34.9     23.9
Torrent Pharma                                       Hold             2731      2780     3029        1555    14.0   15.0     41.6    63.6      11.2       -1.3   56.4     62.5
BSE Health Care Index                                               18388               19720    10948      12.5    19.7    32.4      47.8      9.7       2.7    46.2     46.8
Building materials
Grasim                                               Hold              634       704      837        380     0.8    32.0    -20.2    -15.4      -1.7     13.4     -11.9   -16.0
                           New Ide
JK Lakshmi Cement                    a                Buy              294       372      389         180    6.6    51.6     -17.7   -12.4     3.9      30.2       -9.1   -13.0
                        New Ide
Pidilite Industries              a                    Buy             1345      1645      1710       1186    -3.2   -5.4    -13.6      5.7     -5.6     -18.8     -4.6      5.0
Shree Cement                                         Hold            21761     23453    25341    15500       -4.9   16.8     -11.2     8.9     -7.3       0.3      -1.9     8.2
The Ramco Cements                                     Buy              676       740      883        457     5.4    31.5    -15.9     -5.0     2.8       12.9      -7.1    -5.6
UltraTech Cement                                      Buy            4044      5000      4753        2913     4.1   20.8     -9.6     -4.7      1.5       3.7     -0.2     -5.4
Discretionary consumption
Arvind@                                               Buy               28        43       59          19   -14.9   18.8    -35.6    -50.2    -17.0       2.0    -28.9    -50.5
Century Plyboards (India)                             Buy              129       145      182         95     2.9    10.6    -24.0     12.2     0.3       -5.0     -16.1    11.5
Info Edge (India)                                    Hold             3155         **    3575     1580       14.0   26.2      6.4     46.7     11.2       8.3     17.5     45.7
Inox Leisure                                         Hold              231       270       511        158    -1.2    11.5   -44.1    -20.0     -3.6      -4.3    -38.2    -20.5
Relaxo Footwear #                                     Buy             594        825      830         410    -9.4    -2.1   -19.6    35.8     -11.6     -16.0     -11.2   34.9
Titan Company Limited                                 Buy             1076      1200     1390        720      7.3   20.8    -15.6      3.8     4.6        3.7     -6.8       3.1
Wonderla Holidays                                    Hold              137       162      300         105    3.8     7.8    -43.6    -45.0      1.2      -7.4    -37.7    -45.3
Diversified / Miscellaneous
Bajaj Holdings                                        Buy            2600       3345     3949        1472    2.0    37.3    -30.6    -25.0     -0.6      17.9    -23.4    -25.5
Bharat Electronics                                    Buy               97       110      122         56     -0.5   43.4      14.1     4.7     -2.9      23.1    26.0       4.0
Bharti Airtel                                         Buy              547       710      612        326     -5.8    2.8      5.4    53.3      -8.2      -11.7    16.4    52.3
                                         New Ide
Coromandel International                        a     Buy              780      1000      830        337      4.1    37.1    26.1    115.3      1.5      17.7    39.2     113.9
Gateway Distriparks                                   Buy               83       110      138          71    -4.6   -4.2    -36.0    -16.5     -6.9      -17.7   -29.4     -17.1
PI Industries                                         Buy             1841      2250     2154        974     16.8   21.7     19.0     70.1     13.9       4.5     31.4    69.0
Ratnamani Metals and Tubes                            Buy             1132      1250     1384         716    6.6    29.3     -11.5    25.1     3.9       11.0     -2.3    24.3
Supreme Industries Limited                            Buy             1294      1350      1414        791    14.0   30.9      -4.1    25.7     11.2      12.4      5.9    24.9
UPL                                                   Buy             452        550      618        240      1.8   17.2    -13.4    -16.4     -0.7       0.6     -4.4     -17.0
BSE500 Index                                                        14183               16158    9758        2.8    17.7     -9.3      1.4     0.2        1.0     0.2       0.7
CNX500 Index                                                         8932               10175     6152       2.7    17.6     -9.3       1.1    0.2       0.9       0.1      0.5
CNXMCAP Index                                                       15469               18496    10750       2.8    19.8    -13.6      -0.1    0.3       2.9      -4.6     -0.8
** Price under review                @ Reco price adjusted for demerger              # Reco price adjusted for bonus		         ^ Reco price adjusted for stock split
* Price targets will be reviewed after we get further clarity on operations from companies post Q4FY2020 result announcements.
New Idea: We have converted the existing Viewpoint under our active coverage into a Stock Idea

August 2020                                                                                      5                                                 Sharekhan ValueGuide
From the Editor’s Desk
From the Editor’s Desk   Gush of money, wave of hope

                         Markets have surprised even the most optimistic of investors with the unrelenting rally for
                         more than four months now. Given the economic fallout of the COVID-19 pandemic, demand
                         destruction and the pressure on businesses globally, the surge in the equity market is intriguing
                         to say the least.

                         But the equity market rally globally can be explained by two simple words: money and hope.

                         Yes, it is all about money. Policymakers have been quite aggressive and swift this time around.
                         Globally, the central bankers have cut interest rates sharply and kept liquidity conditions
                         comfortable. Governments have also played their part with aggressive fiscal stimulus packages
                         to support accommodative monetary policy. Globally, policymakers have pumped in $10-12
                         trillion into financial markets in the past few months. Ample low-cost liquidity conditions create
                         a fertile ground to plant seeds for a new equity rally.

                         Hope is another key factor behind the equity rally. Hope that the Coronavirus vaccine will be
                         available sooner than later. Hope that the economic growth will stabilise and latent demand
                         will drive a smart recovery in the global economy next year and also boost corporate earnings.
                         The sharp dip in bond yields and falling returns in the fixed income market has also resulted in
                         money moving into equity in hope of better returns.

                         The consensus view will get tested over the next few months. Moreover, only time will tell
                         if reality matches up to hope. This is because the quick recovery in global economy is built
                         into the current equity rally. The valuations are also not cheap anymore. Thus, it could create
                         volatility in the near term.

                         However, there is an important lesson for investors here. It is futile to time the market and catch
                         the bottom. The idea should be to accumulate gradually during deep corrections. Eventually
                         markets do recover and handsomely reward investors over the next 12-18 months. So it is
                         important to keep the larger picture in mind and stay calm as equities eventually bounceback
                         in the long run.

                         Happy Investing!

  August 2020                                               6                                      Sharekhan ValueGuide
EQUITY                FUNDAMENTALS                                                                        STOCK IDEA

                                            Tata Consumer Products Ltd.
Date: July 23, 2020                         A wholesome basket

                                                                                                          Reco Price

                   Buy                                     PT : Rs. 484                                    Rs. 405

 Summary
 • Initiating coverage on Tata Consumer Products Limited (TCPL) — earlier named Tata Global Beverages — with a Buy rating and
   PT of Rs. 484.
 • TCPL will become strong play with integration of Tata Chemicals’ consumer business; share of consistently-performing India
   business in revenue to rise to 61% from 48%, margins too can rise 60-80 bps in the near term.
 • Appointment of consumer expert Mr. Sunil D’Souza as MD & CEO improves earnings visibility; consolidated revenue and
   earnings (including TCL’s consumer business) to clock CAGR of 10% and 20% over FY2020-23E.
 • Balance sheet strengthening despite commodity-linked business; FCF rose to Rs. 711 crore in FY2020 from negative Rs. 103
   crore in FY2019; debt/equity ratio at 0.1x.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TataConsumer-July23_2020_StockIdea.pdf

                                            Pidilite Industries Limited
Date: August 07, 2020                       Investment ka mazboot jod

                                                                                                          Reco Price

                   Buy                                     PT : Rs. 1,645                                  Rs. 1,377

 Summary
 • We initiate coverage on Pidilite Industries Limited (Pidilite) with Buy recommendation and assigning a price target of Rs. 1,645.
 • Pidilite leads domestic market for adhesives, sealants and construction chemicals. Strong brands (including Fevicol, Dr.Fixit and
   Fevikwik) give it a competitive edge over peers.
 • FY2021 will be affected by impact of Covid-19 spread resulting into a wash-out Q1FY21. With recovery started flowing in
   (especially in tier-III and IV towns), FY2022 is expected to witness strong bounceback. Fall in VAM prices would help margins
   continue rise.
 • Launch of premium products in core categories, foray into new categories (largely consumer-centric), wider distribution reach
   and expansion into international markets remain key growth drivers in the medium to long term.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Pidilite-Aug07_2020_3R_StockIdea.pdf

August 2020                                                      7                                          Sharekhan ValueGuide
Stock Update                                                                                                   EQUITY             FUNDAMENTALS

                                                                                                                                 Price Target/ Upside
                                                                                    Recommendation                 Reco Price
       Date         Company                                   Report Type                                                                 (%)
                                                                                                                     (Rs.)
                                                                                      Latest              Chg                        Latest       Chg
July 01, 2020       Finolex Cables Ltd.                       Stock Update            HOLD                             291           325         

    Summary
    • We reiterate our Hold rating with a revised PT of Rs. 325, due to muted outlook in user industries.
    • Finolex posted lower revenues for Q4FY20 led by weak performance in electrical and communication business, with a decline
      in OPM y-o-y. Net profit was higher due to higher other income and lower ETR.
    • We expect slowdown in construction and postponement of projects by the Government to limit its revenue growth along with
      shortage of skilled labourers in the near term to weigh on performance.
    • Company focuses on containing costs and enhances manufacturing efficiencies. Capex plans remains intact attributable
      towards backward integration and capacity expansion helping enhancing revenues at full capacity utilization.

    Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Finolex-Jul01_2020.pdf

July 01, 2020       Arvind Limited                            Stock Update             BUY                             33            43          

    Summary
    • Q4FY2020 revenue fell by 11.7% y-o-y due to COVID-19 disruptions; revenue grew by 6.7% for January-February and OPM
      declined by just 27 bps to 9.6% in Q4FY2020 due to lower operating leverage (despite a significant fall in gross margins).
    • Efficient working capital management helped Arvind reduce net debt by Rs. 248 crore in FY2020; we expect balance sheet to
      remain stable in FY2021 though operating performance is likely to be sluggish during H1FY2021.
    • FY2021 to be impacted by COVID-19, faster recovery in export markets, good growth in garment volumes and sustained growth
      in AMD business will help company post good recovery in FY2022; soft cotton prices to help margins sustain.
    • We maintain our Buy rating with a revised PT of Rs. 43 due to discounted valuation of 6.6x its FY2022E earnings and 4.1x its
      FY2022E EV/EBITDA (trading at a discount of ~28% since its listing last year).

    Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Arvind-July01_2020.pdf

July 01, 2020       Oil and Natural Gas Corporation Ltd.        Viewpoint          BOOK OUT                -            81             -          -

    Summary
    • We drop our coverage on ONGC and recommend Book Out as valuations are pricing in a crude oil price of $50/bbl (as
      compared to current Brent price of $42/bbl) and expect profitability of gas business to be stressed amid weak domestic gas
      prices.
    • Q4FY20 net loss stood at Rs. 3,098 crore (versus PAT of Rs. 4,240 crore in Q4FY19) due to impairment charge of Rs. 4,899
      crore and a forex loss of Rs. 1,113 crore partially offset by a deferred tax benefit of Rs. 1,642 crore. Adjusted standalone PAT of
      Rs. 802 crore (down 81.1% y-o-y) was below our estimates.
    • For FY2020, ONGC’s consolidated reported PAT declined sharply by 64% to Rs10907 crore due to impairment charge of Rs.
      8,025 crore and an inventory loss of Rs. 1,003 crore for its subsidiary HPCL.
    • We expect the gas business to report losses in FY2021 given expectation of further downward revision in domestic gas prices
      to $1.9-2.1/mmBtu for H2FY2021E as against break-even gas price of $3-3.5/mmBtu.

    Read report - https://www.sharekhan.com/MediaGalary/Equity/ONGC-Jul01_2020.pdf

Š      Upgrade                                       Š    No change                                      Š      Downgrade                 
Š      Note: The arrow indicates change in call and price target, if any, vis-à-vis the previous report

August 2020                                                                   8                                                 Sharekhan ValueGuide
EQUITY               FUNDAMENTALS                                                                    Stock Update
                                                                                                            Price Target/ Upside
                                                                      Recommendation          Reco Price
    Date        Company                            Report Type                                                       (%)
                                                                                                (Rs.)
                                                                       Latest         Chg                       Latest       Chg
July 08, 2020 Polyplex Corporation Limited          Viewpoint         POSITIVE                  536              15%           

 Summary
 • Stay positive on Polyplex Corp (PCL) and expect a 15% upside as valuation of 4.6x FY22E EPS is at a 45% discount to historical
   average PE, given earnings growth visibility (expect 16% PAT CAGR over FY20-FY22E), robust balance sheet and healthy
   dividend yield of 4%.
 • Higher exposure to consumer staple packaging (71% of sales) and increased focus on health & hygiene packaging bodes well
   for BOPET volumes. Recent BOPET capacity expansion to drive 7% volume CAGR over FY20-FY22E.
 • Sharp fall in PTA and MEG prices (key raw material for BOPET films) and lagged impact in correction of BOPET prices bodes
   well for margin in Q1FY2021.
 • Steady rise in share of specialty films in revenue mix (33% in FY2020 versus 24% in FY2017) to structurally drive margin in
   medium to long term.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/Polyplex-July08_2020.pdf

July 09, 2020 Tata Consultancy Services           Stock Update         HOLD                    2,204            2,250          

 Summary
 • We downgrade TCS to Hold from Buy with a revised PT of Rs. 2,250.
 • Q4 was weak due to supply-side constraints and subdued demand; OPM severely lagged estimates, pulling down PAT by
   12.9%.
 • Management expects revenue to recover from Q2FY2021E as supply-side constrains evaporate and demand surges for digital
   infrastructure solution core transformation; deal wins remained strong.
 • Though FY2021 looks to be a weak year, we assume strong revenue growth in FY2022E given pent-up demand and market
   share gains.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCS-July09_2020.pdf

July 10, 2020   Sadbhav Engineering               Stock Update          BUY                      49               75           

 Summary
 • We maintain our Buy rating on Sadbhav Engineering Limited (SEL) with a revised PT of Rs. 75, factoring lower valuation of its
   listed subsidiary Sadbhav Infrastructure Projects Limited (SIPL).
 • SEL reported weak execution during Q4FY2020, led by issues plaguing Right of Way in HAM projects and COVID-19 led
   lockdown. Adjusted for exceptional gain, SEL posted standalone net loss.
 • Management expects to revert to normal quarterly revenue run-rate from Q3FY2021 and strong jump in revenue in FY2022.
   Stake sale in assets leads to meaningful de-leveraging.
 • Merger of SIPL with SEL isexpected to complete by March 2021. Receives appointed dates for all HAM projects.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Sadbhav-July10_2020.pdf

August 2020                                                      9                                         Sharekhan ValueGuide
Stock Update                                                                              EQUITY               FUNDAMENTALS

                                                                                                              Price Target/ Upside
                                                                       Recommendation          Reco Price
    Date        Company                             Report Type                                                        (%)
                                                                                                 (Rs.)
                                                                        Latest         Chg                        Latest       Chg
July 14, 2020   Wipro                              Stock Update         HOLD                      225              250           

 Summary
 • We maintain our Hold rating on Wipro with a PT of Rs. 250 given low visibility on growth recovery.
 • Wipro reported constant currency (CC) revenue decline of 7.5%, in-line with our expectations; margins improved 146bps q-o-q
   to 19.1% , resulted in 9% beat in net profit.
 • Management expects stability would return in communication, consumer and technology vertical in Q2FY2021E, which together
   contribute 34.5% of the total revenue; margin likely to remain in narrow band in Q2FY2021.
 • Though new CEO would focus on a potential turnaround strategy, we believe it would be a tough task given existing execution
   issues, absence of large-deal engines and challenging demand environment.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wipro-July14_2020.pdf

July 15, 2020   Infosys                            Stock Update          BUY                      831              920           

 Summary
 • We maintain our Buy rating on Infosys with a revised price target of Rs. 920.
 • Infosys reported better-than-expected results on all financial fronts despite supply-side constraints, with strong deal wins and
   FCF generation; EBIT margin improved by 150 bps q-o-q to 22.7%, way ahead of our estimates.
 • Management has resumed guidance with FY2021E revenue growth guidance of 0-2% in CC; margins are likely to be at 21-23%
   (EBIT margin was 21.3% in FY2020).
 • Even as reduction of IT spending is expected during 2020, Infosys is well poised to gain share in the recessionary environment
   and outperform peers in terms of revenue growth in FY2021E.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Infosys-July15_2020.pdf

July 15, 2020   Federal Bank                       Stock Update          BUY                       50              60           

 Summary
 • Federal Bank (FB) posted operationally strong performance for Q1FY2020, helped mainly by treasury gains, cost control and
   sequentially lower slippages which helped offset elevated provisions and lower fee income.
 • The moratorium book (net) now stands at 24%, PCR stands at 58.5% with stressed book at 1.14%, which provides support.
 • Management indicated that headwinds would continue and may see a spike in NPAs in Q3, growth outlook is likely to be
   cautious.
 • We maintain our Buy rating on the stock with an unchanged price target (PT) of Rs. 60.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/FederalBank-July15_2020.pdf

July 16, 2020   L&T Technology Services            Stock Update          BUY                      1,439           1,600         

 Summary
 • We maintain a Buy on L&T Technology Services (LTTS) with an unchanged PT of Rs. 1,600.
 • Q1 revenue met our modest expectations, while margins missed mark; revenue affected by scrapping of aerospace project and
   softness in plant engineering vertical.
 • Management expects USD revenue to fall 9-10%, as anticipated for FY2021 that translates into a 2.3-3% q-o-q growth for
   remaining quarters.
 • We expect growth to normalise in FY2022E on account of catch-up effects and strong demand for digital engineering.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/LTTS-July16_2020.pdf

August 2020                                                       10                                        Sharekhan ValueGuide
EQUITY               FUNDAMENTALS                                                                      Stock Update
                                                                                                                Price Target/ Upside
                                                                        Recommendation           Reco Price
    Date         Company                             Report Type                                                         (%)
                                                                                                   (Rs.)
                                                                         Latest         Chg                         Latest       Chg
July 16, 2020    Larsen & Toubro Infotech             Viewpoint         NEUTRAL                    2,291            5-7%           

 Summary
 • We maintain our Neutral stance on L&T Infotech (LTI) given unfavorable risk-reward ratio and expect upside potentialof 5-7%.
 • Revenue in-line, margin beat our estimates; however, revenue decline from the top 5 accounts decelerated to 9.8% q-o-q;.
 • Despite delay in decision making, LTI won a large deal (TCV of $20 million) with BFS logo in UK. TCV of deal was significantly
   smaller compared to usual run-rate in earlier quarters.
 • Consistency in deal wins, new logo openings and prudent client mining would position the company in the leader’s quadrant
   in term of revenue growth in FY2021.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/LTI-July16_2020.pdf

July 17, 2020    HDFC Bank                          Stock Update          BUY                      1,099            1,400         

 Summary
 • HDFC Bank reported Q1FY21 results, with Operational performance largely in line with expectations; PAT was boosted by
   higher treasury income even though Core fee income declined.
 • Though asset quality deteriorated slightly as GNPA rose sequentially, a confident management stated that moratorium pie has
   fallen to ~9% of the total book, which is positive. Balance sheet stays robust, with provision buffer (total provisions at 149% of
   GNPAs).
 • The succession of Mr. Puri, the MD & CEO, will be keenly watched, but the bank has hinted the successor is likely to be an
   internal candidate. The bank clarified well on most other uncertainties (recent events, management exits).
 • We retain our Buy rating on the stock with unchanged price target (PT) of Rs. 1,400.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFCBank-July17_2020.pdf

July 17, 2020    HCL Technologies                   Stock Update          BUY                      623               750           

 Summary
 • We maintain our Buy rating on HCL Technologies (HCL Tech) with a revised PT of Rs. 750.
 • Revenue was inline and margins were ahead of our expectations; deal signings and FCF generation remained strong.
 • Management provided revenue growth in the range of 1.5% - 2.5% q-o-q for the remaining quarters, translates -3.3% to -0.8%
   revenue growth in FY2021E. It expects EBIT margin to be in the range of 19.5-20.5% for FY2021.
 • Strong demand for infrastructure business, higher spending on digital infrastructure and emergence of new business models
   is expected to create new growth opportunities for the company.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HCLTech-July17_2020.pdf

August 2020                                                        11                                         Sharekhan ValueGuide
Stock Update                                                                            EQUITY               FUNDAMENTALS

                                                                                                            Price Target/ Upside
                                                                      Recommendation          Reco Price
    Date        Company                            Report Type                                                       (%)
                                                                                                (Rs.)
                                                                       Latest         Chg                       Latest       Chg
July 17, 2020   Britannia Industries              Stock Update          BUY                     3,784           4,200          

 Summary
 • Q1FY2020 numbers were strong with revenues growing 26% and OPM stable at 21% (up 634 bps). PAT surged 110% led by
   strong operating performance, higher other income and lower tax incidence.
 • Hindi-speaking belt performed well with double-digit revenue growth. Adjacent categories (including rusk, bread and cheese)
   clocked double-digit revenue growth and higher profitability.
 • Sustained demand from in-house consumption and large shift towards branded products and better growth in the rural markets
   will help Britannia to maintain growth momentum.
 • We have raised earnings estimates by 5% and 4%, respectively, for FY2021 and FY2022 to factor a strong improvement in OPM.
   We maintain our Buy rating on stock with a revised price target of Rs. 4,200.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Britannia-July17_2020.pdf

July 17, 2020   ICICI Lombard General Insurance     Viewpoint         POSITIVE                  1,288           15-18%         

 Summary
 • ICICI Lombard General Insurance (ILGI) reported strong Q1FY2021 results with gross direct premium income (GDPI) coming
   higher than expectations and encouraging improvement in combined ratio, and solvency ratio, which was positive.
 • ROAE jumped to 25.1% in Q1FY2021 from 20.8% in FY2020 due to strong cost control and better profitability; and solvency ratio
   also improved to 2.5x in June 2020 (from 2.17x in March).
 • We find the general insurance space attractive with strong growth potential; and ILGI with its focus on higher-margin business
   andstrong operating metrics make ILGI an attractive franchise for the long term.
 • We maintain our Positive view and see 15-18% upside potential for the stock.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICILombard-July17_2020.pdf

July 17, 2020   L&T Finance Holding                 Viewpoint         NEUTRAL                    62             3-5%           

 Summary
 • L&T Finance Holdings (LTFH) posted weak results for Q1FY2021, where its operational performance was below expectations,
   but the company saw a one-time stake sale benefit, which was a one-off.
 • Due to the provisions of Rs. 577 crore over and above GS3 provisioning, not only the NS3 declined, but PCR also increased
   from 58% to 69%.
 • Lower disbursals will impact interest and fee income growth, and higher liquidity on the balance sheet may crimp medium-term
   profitability.
 • We have fine tuned our estimates for FY2021E and FY2022E and the target multiples. We maintain our view as Neutral on the
   stock.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/LnTFinance-July17_2020.pdf

August 2020                                                      12                                        Sharekhan ValueGuide
EQUITY               FUNDAMENTALS                                                                     Stock Update
                                                                                                              Price Target/ Upside
                                                                       Recommendation          Reco Price
    Date         Company                            Report Type                                                        (%)
                                                                                                 (Rs.)
                                                                        Latest         Chg                        Latest       Chg
July 17, 2020    Granules India Limited              Viewpoint         POSITIVE                   264            18-20%          

 Summary
 • We maintain our Positive view on Granules India and expect an upside potential of 18-20%.
 • Granules reported an impressive performance for Q1FY21 with revenues at Rs 735.6 cr, up by 23.6% yoy, on the back of a
   double digit growth in lucrative PFI and FD segments. PAT at Rs 111.4 cr was up 34% yoy.
 • Granules is witnessing strong demand traction across segments, which is expected to sustain going ahead as well. Tapping
   new geographies for growth, strong product pipeline, growth in existing core molecules would drive the revenues. Favorable
   mix, benefits of operating efficiencies accruing would lead to OPM expansion.
 • Management has revised upwards its earnings growth guidance of FY2021 to 30% while it has retained FY2022 guidance at
   25% growth. This compares with earlier guidance of 25% CAGR over FY2020-FY2022.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/Granules-July17_2020.pdf

July 17, 2020    Bosch Limited                       Viewpoint         POSITIVE                  13,184          18-20%          

 Summary
 • Bosch would gain from an increase in content per vehicle under the BS-VI emission norms and has a strong order book of Rs
   24,000 cr, which provides visibility for next 2-3 years.
 • Bosch has invested heavily into manufacturing of new age sensors, softwares and services to capture emerging areas of
   connected and electric vehicles.
 • Bosch is adopting a technology-agnostic approach for growth and stated it will recover faster than the automotive industry .
   Bosch has a strong technological parentage, debt-free balance sheet and robust return ratios.
 • Valuations at 25.7x FY22 earnings are below long term historical average of 31-32x. Hence, we stay positive on the stock and
   expect an 18-20% upside from current levels.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/Bosch-July17_2020.pdf

July 20, 2020 Hero MotoCorp                        Stock Update          BUY                     2,858            3,200          

 Summary
 • We retain Buy rating on Hero Motocorp (Hero) with revised PT of Rs 3,200. Buoyant rural sentiments would lead to faster
   recovery for Hero given its higher rural exposure.
 • While near term demand would be impacted by COVID-19; management expects recovery from H2FY21 driven by strong rural
   sentiments, pent up demand and preference for personal transport in post COVID era.
 • Long term growth levers for 2W industry are intact. Hero is focusing on export markets and premiumisation of product portfolio
   to drive growth.
 • Valuations at 16.1x FY22 earnings are lower than its long-term historical average. Hero remains our preferred pick in automotive
   space.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HeroMoto-July20_2020.pdf

August 2020                                                       13                                        Sharekhan ValueGuide
Stock Update                                                                                EQUITY                FUNDAMENTALS

                                                                                                                 Price Target/ Upside
                                                                        Recommendation           Reco Price
    Date        Company                              Report Type                                                          (%)
                                                                                                   (Rs.)
                                                                          Latest         Chg                         Latest       Chg
July 21, 2020   Bajaj Finance                       Stock Update           BUY                      3,293           3,800           

 Summary
 • Bajaj Finance Ltd (BFL) reported mixed Q1FY20 numbers, with tepid business growth, but asset quality improved sequentially,
   and the moratorium share fell to 15.7% of AUM from 27% which is a positive.
 • Adopting a conservative and prudent provision policy, creating additional reserves will help the bank meet challenges on asset
   quality going forward. Hence, an additional Rs. 1,450 crore COVID-19 provisions (total COVID19 provisions stands at 1.7% of
   AUM as of June 2020) provides comfort.
 • Asset quality improved sequentially with gross NPA and net NPA at 1.40% and 0.50% respectively, from 1.61% and 0.65% in
   Q4FY20. With a strong balance sheet, robust risk management and prudent management, BFL is a strong franchise for the long
   term and is well-placed to ride over medium term challenges.
 • We maintain a Buy rating on Bajaj Finance with a revised price target of Rs. 3,800.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinance-July21_2020.pdf

July 21, 2020   Hindustan Unilever                  Stock Update           BUY                      2,319           2,550           

 Summary
 • Q1FY2021 performance was better than our as well as the street’s expectation with revenue and PAT growing by ~4% and ~8%,
   respectively. Core business performed well with just a 7% decline compared to ours as well as street’s assumption of 12-13%
   decline.
 • OPM was affected by unfavourable mix and higher COVID-19-related expenses. However, the same is expected to recover in
   coming quarters as business normalises (skin care and personal care regaining momentum).
 • Recovery in rural demand, strong demand for hygiene and nutritional products and market share gains in key categories will
   be key revenue drivers in the near term. The company paid special dividend of Rs. 9.5 per share.
 • We have raised earnings estimates by ~5% and ~4% for FY2021 and FY2022. We retain our Buy recommendation on the stock
   with a revised PT of Rs. 2,550.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-July21_2020.pdf

July 21, 2020   Axis Bank                           Stock Update           BUY                      446              585            

 Summary
 • We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 585.
 • Axis Bank posted strong results Q1FY2020 with Operating results better than expectations and adopting a conservative
   provision policy and slow growth on business impacted the fee income.
 • Notably, the moratorium book has declined to 9.7% from ~26% earlier, which is a positive.
 • With a decent CRAR (CET1 of 13.5%) the bank is well capitalised and plans for additional capital raise. If these plans fructify, it
   will help improve the capital base and augur well for the bank.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AxisBank-July21_2020.pdf

August 2020                                                        14                                         Sharekhan ValueGuide
EQUITY                    FUNDAMENTALS                                                                    Stock Update
                                                                                                                 Price Target/ Upside
                                                                                 Recommendation    Reco Price
    Date        Company                                       Report Type                                                 (%)
                                                                                                     (Rs.)
                                                                                  Latest     Chg                     Latest       Chg
July 21, 2020   ICICI Prudential Life Insurance Company Ltd    Viewpoint         POSITIVE            443            18-20%        

 Summary
 • The operational performance of ICICI Prudential Life Insurance (IPRU) was reasonable even as the decline in business was
   largely expected, due to the impact of the lockdown during the quarter as well as due to shift in customer preferences.
 • Cost management (Cost/TWRP) improved to 14.8% for Q1FY2021 from 17% in Q1FY2020, helped by higher renewal premium
   and lower first income premium growth. VNB margin was 24.4% for Q1FY2021 as compared to 21.7% for FY2020, helped by
   increased protection mix.
 • Going forward, we expect protection and annuity products to continue to see higher growth. We find the insurance space
   attractive, given a long runway for growth and believe that players with a strong balance sheet and business metrics would be
   able to tide over the crisis.
 • We maintain a Positive view on the stock and expect an upside of 18-20%.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/ICICIPru-July21_2020.pdf

July 22, 2020 Bajaj Auto                                      Stock Update         BUY              2,985           3,500         

 Summary
 • We maintain Buy rating on Bajaj Auto Ltd (Bajaj) with an upgraded PT of Rs 3,500.
 • Bajaj’s operating results were ahead of our as well as street estimates as better product mix, favourable currency realisations,
   and cost-control measures led to better-than-anticipated margins.
 • Bajaj is witnessing fast recovery in both the domestic (due to strong rural sentiments) as well as overseas markets (due to
   opening of economies and bounce back in crude prices). Management has stated demand recovery is faster than expected.
 • We have fine tuned our earnings estimates. Valuations at 16x FY22 earnings are lower than long term historical average.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajAuto-July22_2020.pdf

July 22, 2020 HDFC Life Insurance                              Viewpoint         POSITIVE            610           12%-15%        

 Summary
 • HDFC Life Insurance (HLIC) Q1 FY21 quarter was impacted by the pandemic as expected, however, better premium recoveries
   m-o-m were a silver lining, hinting that business is normalizing fast.
 • Total annualized premium equivalent (APE) fell by 30% y-o-y in Q1FY21, impacted by a lockdown and weak buyer sentiment
   towards ULIPs; but individual protection and PAR showed strong traction.
 • Given strong structural fundamentals such as a robust balance sheet, strong brand image and high long-term growth potential
   for the Indian insurance industry we see HDFC Life as attractive option for long-term investors. Its inclusion in Nifty benchmark
   index is another positive.
 • We maintain our Positive view and expect a potential upside of 12-15%.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/HDFCLife-July22_2020.pdf

August 2020                                                                 15                                  Sharekhan ValueGuide
Stock Update                                                                               EQUITY                FUNDAMENTALS

                                                                                                                Price Target/ Upside
                                                                        Recommendation           Reco Price
    Date        Company                              Report Type                                                         (%)
                                                                                                   (Rs.)
                                                                         Latest         Chg                         Latest       Chg
July 22, 2020 Tata Elxsi Limited                      Viewpoint         POSITIVE                   915             18-20%          

 Summary
 • We stay Positive on Tata Elxsi Limited (TEL) and expect an upside of 18-20%.
 • Revenue in-line, margins beat our expectations; constant currency revenue grew 4.1% y-o-y, led by strong growth in non-
   automotive verticals.
 • TEL’s diversification strategy in service offering (in media and communications and healthcare verticals) and geography (in the
   US) has been progressing well and would help the company to tide out the current challenging situation.
 • Management expects recovery in revenues from 2HFY2021 led by new deal wins, addition of new logos, anticipated recovery
   in auto segment and continued growth momentum in media and medical devices verticals.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/TataElxsi-July22_2020.pdf

July 22, 2020 Indian Oil Corporation Ltd              Viewpoint         POSITIVE                    92              25%            

 Summary
 • We upgrade our view on IOCL to Positive and expect 25% upside given its attractive valuation of 6.1x FY22E EPS (40% discount
   to historical average PE and 61% to that of BPCL). Recovery in earnings and high dividend yield of ~8% would narrow valuation
   gap with peers.
 • We expect strong earnings recovery for OMCs over FY21E-FY22E led by above-average auto fuel marketing margins of ~Rs.
   4.5/litre (Rs. 2-2.5/litre historically) and a sharp recovery in petroleum consumption (recovered to ~88% of pre-COVID-19 levels).
 • IOCL is biggest beneficiary of a sharp fall in crude oil prices given high fuel & loss of 8.8% (versus 5.4% for BPCL and 7.2% for
   HPCL) that would result into highest improvement in IOCL’s refining margins.
 • Sharp 27% correction in IOCL’s stock price in CY2020 YTD ignores potential improvement in earnings prospects over FY21E-
   FY22E (we expect standalone EBITDA/PAT to clock CAGR of 29%/19% over FY20-FY22E).

 Read report - https://www.sharekhan.com/MediaGalary/Equity/IndianOil-July22_2020.pdf

July 22, 2020 Polycab India Limited                   Viewpoint         POSITIVE                   824             14-15%          

 Summary
 • We maintain our Positive view on Polycab India Limited (Polycab) with 14-15% upside, given attractive valuation post factoring
   COVID-19 impact and expecting strong bounce back in FY2022.
 • Q1FY2020 revenue declined sharply, which came in below estimates, affected by COVID-19 led shutdown and adverse
   operating leverage resulting in lower OPM. Adjusting for write-back of income tax provision and exceptional gain from Ryker
   stake acquisition and interest on income tax refund, adjusted PAT came in at Rs. 7.5 crore.
 • We expect H2FY2021 to be better than H1FY2021, while demand is likely to normalise over one to two quarters. We expect
   Polycab to bounce back in FY2022, owing to its leadership position in key business verticals.
 • Polycab’s strong balance sheet and net cash position provide comfort in the present challenging environment.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/Polycab-July22_2020.pdf

August 2020                                                       16                                          Sharekhan ValueGuide
EQUITY                FUNDAMENTALS                                                                   Stock Update
                                                                                                             Price Target/ Upside
                                                                      Recommendation          Reco Price
    Date        Company                            Report Type                                                        (%)
                                                                                                (Rs.)
                                                                       Latest         Chg                        Latest       Chg
July 23, 2020 Bajaj Finserv                       Stock Update          BUY                    6,390            7,500          

 Summary
 • Bajaj Finserv (holding company) saw its consolidated net profit rise by 43.7% to Rs 1,215 crore, while revenue increased 15.6%
   y-o-y to Rs 14,190 crore in Q1 FY21 mainly helped by strong earnings from its insurance subsidiaries.
 • Bajaj Finance (lending subsidiary) saw tepid AUM growth, but asset quality improved q-o-q and moratorium book share declined
   to 15.7% (from 27% earlier). Insurance arms saw strong PAT growth helped by lower claims and strong cost management. Even
   though Q1 topline was impacted by COVID-19 as expected, pick-up on a month-on-month basis on premiums is encouraging,
   reflecting rapid normalisation.
 • All subsidiaries are well-capitalised with strong operating metrics, which will enable them withstand and tide over near-term
   challenges.
 • We maintain our Buy recommendation on Bajaj Finserv with a revised SOTP-based price target of Rs. 7,500.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BajajFinserv-July24_2020.pdf

July 23, 2020 Larsen and Toubro                   Stock Update          BUY                     916             1,250         

 Summary
 • We maintain our Buy rating on Larsen and Toubro (L&T) with an unchanged PT of Rs. 1,250, considering undemanding valuation
   and healthy fundamentals to ride the current uncertainties.
 • L&T’s Q1FY2021 performance remained resilient in the given conditions with inline revenue, marginally lower operating profit
   margin (OPM) with estimates, and slip in earnings due to higher interest cost and depreciation.
 • Management has refrained from providing any revenue or order inflow guidance as it is too early to quantify the same and
   highlighted that the situation is expected to improve in the latter part of FY2021.
 • Order book remains strong and diversified. International order book provides cushion despite lower new order prospects from
   the Middle East.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnT-July24_2020.pdf

July 24, 2020 Asian Paints                        Stock Update          BUY                     1,711           1,987         

 Summary
 • Though Q1 saw the impact of the April lockdown that hit around 30-40 days of business, sales improved post Unlocking 1.0, and
   June saw double-digit volume growth for Asian Paints (APL) in decorative paints segment.
 • Sharp recovery in June helped APL post better-than-expected performance in Q1FY2021 with revenues declining by 43% y-o-y
   (against street expectation of 55-60%) and OPM standing at 16.6% (as against our as well street expectation of 9.5%).
 • We maintain that FY2022 would see strong recovery on back of pent-up demand for painting activities, shift to trusted brands
   and higher construction activities.
 • We have increased our earnings estimates by 6% and 4% for FY2021 and FY2022, respectively. We maintain our Buy
   recommendation on the stock with a PT of Rs. 1,987.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/AsianPaint-July24_2020.pdf

August 2020                                                      17                                        Sharekhan ValueGuide
Stock Update                                                                                EQUITY                FUNDAMENTALS

                                                                                                                 Price Target/ Upside
                                                                        Recommendation           Reco Price
    Date        Company                              Report Type                                                          (%)
                                                                                                   (Rs.)
                                                                          Latest         Chg                         Latest       Chg
July 24, 2020 ICICI Bank                            Stock Update           BUY                      382              485            

 Summary
 • ICICI Bank posted good numbers for Q1FY2021, where operating performance was better than expectations, even though
   higher provisions (partly due to COVID-19) resulted in lower-than-expected PAT. Moratorium book stood at 17.5% (from 30% at
   Q4FY2020) which is positive.
 • Asset quality improves with GNPA/NNPA ratio decreasing by 5 bps/18 bps, respectively, to 5.99%/1.23% vis-à-vis Q4FY2020.
   Even gross slippages declined significantly to Rs. 1,160 crore, which was a 20-quarter low.
 • The bank is adequately capitalised (Tier-1 at 14.9%) and a successful equity-raising plan will further add to balance sheet
   strength. We like the prudent and cautious approach of the bank in building provision buffers, cautious loan book growth, and
   healthy capitalisation levels.
 • We maintain our Buy rating on the stock with a revised SOTP-based price target (PT) of Rs. 485.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ICICIBank-July24_2020.pdf

July 24, 2020 ITC Limited                           Stock Update           BUY                      200              250            

 Summary
 • Cigarette sales volumes declined by ~38% in Q1FY2021 affected by lockdown (gross revenues fell by 29%); better than ours as
   well as street’s expectation of a 50-55% decline.
 • Non-cigarette FMCG business grew by 12.2% on comparable basis (18.8% excluding education and stationery segments);
   essentials segment grew by 34%.
 • Non-cigarette FMCG business will continue to grow strongly while cigarette sales would improve sequentially; Paperboard,
   paper & packaging segment (excluding stationery) would perform stably in the coming quarters.
 • We have revised our earnings estimates by 4-5% for FY2021/22. We maintain our Buy recommendation on the stock with
   revised PT of Rs. 250.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ITC-July24_2020.pdf

July 24, 2020 Biocon                                  Viewpoint         POSITIVE                    415             10-12%          

 Summary
 • Biocon clocked a strong performance for Q1FY21. Revenues at Rs 1672 cr grew 14.6% YoY and were ahead of estimates. Strong
   double digit growth in the Biologics as well as generics segment aided the topline growth. PAT at Rs 152 cr was ahead of
   estimates.
 • Biocon is expected to significantly benefit from the opportunities in the Biologics space. Strong traction in existing products,
   healthy new product pipeline, innovative products / therapies, tapping new geographies would be key growth drivers.
 • Management expects to have a total of 8 biosimilar products in the US markets by end of FY2022 as against 3 now. It has
   retained its guidance of $1bn revenues from the biologics segment by FY2022.
 • Possible listing of subsidiary - Biocon Biologics provides a significant value unlocking opportunity. We stay Positive on the stock
   and expect an upside of 10-12%.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/Biocon-Jul24_2020.pdf

August 2020                                                        18                                         Sharekhan ValueGuide
EQUITY                FUNDAMENTALS                                                                   Stock Update
                                                                                                            Price Target/ Upside
                                                                      Recommendation          Reco Price
    Date        Company                            Report Type                                                       (%)
                                                                                                (Rs.)
                                                                       Latest         Chg                       Latest       Chg
July 24, 2020 JSW Steel Limited                     Viewpoint         POSITIVE                  205              20%           

 Summary
 • JSW Steel’s consolidated EBITDA at Rs. 1,341 crore (down 55% q-o-q) was above our estimates, led by higher-than-expected
   EBITDA/tonne at Rs. 4,806/tonne (down 41% q-o-q) due to lower cost of production by 4% q-o-q.
 • Sales volume declined by 23.6% q-o-q to 2.8 million tonne (mt) with export volume at 1.8mt (57% of volumes) but weak domestic
   volumes at 1.2 mt (43% share in sales volume), which was impacted by COVID-19 led lockdown.
 • FY2021E sales volume guidance of 15mt implies 9% y-o-y growth in 9MFY2021E. Likely higher domestic steel price, lower
   coking coal price, improvement in revenue mix (with ramp-up in domestic sales), and higher plant utilisation to aid earnings
   recovery.
 • Valuation of 6.1x its FY2022E EV/EBITDA is at 12% discount to its historical average one-year forward multiple EV/EBITDA
   multiple of 7x. Hence, we maintain our Positive view on JSW Steel and expect a 20% upside potential.

 Read report - https://www.sharekhan.com/MediaGalary/Equity/JSW_Steel-Jul24_2020.pdf

July 27, 2020   Coromandel International Limited   Stock Update         BUY                     790             1,000         

 Summary
 • We maintain our Buy rating on Coromandel International with unchanged PT of Rs. 1,000.
 • Company set to report healthy revenue and earnings CAGR of 11% and 17.5%, respectively, over FY2020-22E.
 • Coromandel to speed up investments in high-growth crop protection business which is expected to enhance profitability.
 • Q1 performance strong with revenue, EBITDA and PAT rising 51%, 111% and 4x y-o-y, respectively.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Coromandel-July27_2020.pdf

July 27, 2020   Marico                             Stock Update         BUY                     350              420           

 Summary
 • Marico’s Q1FY2021 performance was better than our as well street expectations, largely led by ~300 bps expansion in
   consolidated OPM, resulting in 4% growth in adjusted PAT to Rs. 340.8 crore (better our expectation of Rs. 283.4 crore).
 • Domestic sales volume decreased by ~14%, led by 11% volume decrease in parachute rigid packs and 30% volume decline in
   value-added hair oil (VAHO) portfolio. Saffola edible oil registered 16% volume growth.
 • The month of June saw recovery in sales of Parachute rigid pack and VAHO portfolio, Saffola edible oil is expected to maintain
   the good run, while margin expansion is expected to sustain due to benign input prices and lower ad spends.
 • We have revised upwards our earnings estimates by ~6% and ~4% for FY2021 and FY2022, respectively. We maintain our Buy
   recommendation on the stock with a revised price target of Rs. 420.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Marico-July27_2020.pdf

July 27, 2020   Persistent Systems                 Stock Update         BUY                     856             1,000          

 Summary
 • We retain our Buy rating on Persistent Systems Limited (PSL) with a revised PT of Rs. 1,000.
 • PSL delivered a strong set of numbers, with beat on all financial fronts; deal signings remained strong.
 • We believe growth momentum in Technology Services would continue in FY2022Eled by large deal signings, new logo addition,
   prudent client mining strategy and a healthy deal pipeline.
 • Cash and cash equivalents account for 23% of its current market capitalisation; strong balance sheet and potential strong
   earnings growth potential provide us comfort on the stock.

 Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Persistent-July27_2020.pdf

August 2020                                                      19                                        Sharekhan ValueGuide
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