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Market Twitter June 2017 – Narnolia Securities Limited

We are pleased to share with you the JUNE 2017 edition of the Market Twitter . Valuable Inputs by Sri Shailendra Kumar, CIO, Narnolia Securities Ltd & Sri Dhirendra Kumar, CEO , Value Research. Please share this valuable informative market twitter with your Investors. Visit https://www.narnolia.com/.

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Market Twitter June 2017 – Narnolia Securities Limited

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  1. MARKET twitter June 2017 Investment Style -Key to Successful Equity Investing - How long should SIP be? - Focus on stock with sustainable growth - Company Updates - Index Returns Inaugurated by Mr. Ramesh Damani Mutual Fund Write-up by Dhirendra Kumar (CEO-Value Research) Inaugurated by Mr. Ramesh Damani

  2. Content INVESTMENT STYLE-KEY TO SUCCESSFUL EQUITY INVESTING 03 MUTUAL FUND WRITEUP -BY DHIRENDRA KUMAR CEO-VALUE RESEARCH 05 02 INVESTMENT STYLE-KEY TO SUCCESSFUL EQUITY INVESTING 09-12 BANKS Shailendra Kumar Chief Investment Officer of Narnolia Securities Ltd. COMPANY UPDATES HDFC BANK KNRCON LT STATE BANK OF INDIA 13-33 DAILY INVESTMENT TREND 34 NIFTY CONSTITUENTS Quarterly / Yearly Performance 35 HOW LONG SHOULD SIP BE? 05 Dhirendra Kumar CEO - Value Research 36 FORECASTING PRICES OF NIFTY & BANK NIFTY 37 ECONOMIC CALENDAR & IMPORTANT EVENTS INDEX RETURNS 38 39 CORPORATE QUARTERLY RESULTS - JUNE 2017 06 FOCUS ON STOCK WITH SUSTAINABLE GROWTH Pradeep Gokhle Head - Equity Fund Manager Tata Mutual Fund 2 MARKET twitter | June’ 17

  3. Investment Style-Key to Successful Equity Investing Market is hovering around 9700 levels. The Time –In- The -Market Strategy that was discussed in the last edition is here for a Test. Market is never the same at all times. Flavor, Likings and disliking of market change. We as investors should chose a style of investing and stick with it. It is difficult to outperform market in the long run if we keep changing our style of investment based on market cycles. We may be following Time in the market philosophy but Style drift is Timing inside Time-In the market strategy. Shailendra Kumar Chief Investment Officer of Narnolia Securities Ltd. There could be many kinds of investment style- based on Dividend Yield, Size, Sector, Growth Parameters, Value parameters, event driven, Micro Caps or Hi caps etc. Idea is to pick a style which matches your temperament and have conviction on it. Market is hovering around 9700 levels. The Time –In- The -Market Strategy that was discussed in the last edition is here for a Test. Market is at the threshold of another immediate high or will rest here for a while is the question that is haunting most of the investors. To be invested with the market at these times requires a strong conviction over the concept of Time- In The market. In a research Paper- ‘Staying the course..’ by Keith C. Brown, Professor at University of Texas, it has been ”Market is never the same at all times. Flavor, Likings and disliking of market change. We as investors should chose a style of investing and stick with it. It is difficult to outperform market in the long run if we keep changing our style of investment based on market cycles. We may be following Time in the market philosophy but Style drift is Timing inside Time-In the market strategy.” Before we develop the confidence to remain Time In, I would repeat our findings that we discussed earlier- that world over, across 23 countries for 20 years, Equity Indices have earned a CAGR higher than fixed income (except Brazil and Italy, where also the underperformance has been marginal). A good portfolio manager / Investment advisor helps us get an alpha over the benchmark returns and that may be compounded to handsome returns for us as investors. And if you attempt market timing the chances of making 20% -30% less return than simple buy and hold is very high. established that there is a high correlation between Style consistency and Performance Sustainability. The key takeaway from his research are- • a negative relationship exists between portfolio style consistency and portfolio turnover • a positive relationship exists between a fund’s style consistency and the future actual and relative returns it produces, and • a positive relationship exists between the consistency of a portfolio’s investment style and the persistence of its performance over time. To follow the Time-In theory we need to have confidence on the theory. What should give us the confidence to remain invested at such perplexing times? This will be when we have conviction over our style of Investment. 3 MARKET twitter | June’ 17

  4. In fact, we also opine that Investor not being aware of his or her specific style leads to unintentional style drift that in turn leads to inferior relative performance. kept supporting and driving this market higher for last 4 months is unprecedented. But thinking this a new normal could prove very costly later on though at least for now that possibility is not there. There are two types of Investment style which are most common in terms of fundamental analysis- Value and Growth. Most of the successful styles are a combination or extremes of these styles. Value style means buying companies with high return ratios- like High Return on Equity, High Return on Capital Employed or High Free cash Flow. It basically depends on the stability and growth of Balance sheet of a company. Growth Style means betting on a company where growth in Profitability is expected, like there is improvement or positive change in the operating drivers of the company, the revenues are increasing or Profits / Margins are growing. Last week RBI did not cut rates though drastically reduced inflation target is perplexing. Cutting risk weightage to housing loan now as real estate prices have cooled off (more time correction) is pragmatic. One of the major global developments recently was Saudi Arabia, Egypt, the United Arab Emirates and Bahrain cutting their ties with Qatar. The nations accused Qatar of meddling in their internal affairs and backing terrorism. Question is whether Qatar will decide to disrupt the production cutback deal of OPEC and creates another meltdown in commodity prices triggered by crude is a major issue for the market going forward. In another development, the European Central Bank (ECB) kept interest rates unchanged in its monetary policy meet and indicated that the ECB similar to US FED is aiming to end its ultra-easy monetary policy. If we assume the Dow Jones Industrial Index since 1995, each of the above style has outperformed the Index in a period. For eg, 1997-2000, it was a growth period, 2000-2005 was a growth Era, 05- 07 was again growth Era , 2007-15 was period for value investing, 15-17 was a blend era and again post 2017 is a phase of Growth Style companies outperforming indices. We are currently trading at 20.1 times FY18 E EPS. The growth for FY18 is expected at 14% for FY18. Considering the favorable changes in the economy and business environment and also considering the overwhelming Mar 2017 quarterly results, the growth for 2018E EPS may require positive upgrades. Though having experience of negative surprises in terms of earning growth over last three years, street has yet not materially changed Sensex EPS for FY18. Though, smooth GST transition (if that happens so) and possibility of further rate cut in the second half of the calendar year may trigger upgrades going forward. The point is, every style outperforms for a period and then does not do that good in other period. But as various empirical researches suggest changing style never helps in terms of absolute or relative performance. So the key is to pick a style and go with it. Coming to the near term market structure the way outstanding open interest of Nifty Put options has Happy Investing! 4 MARKET twitter | June’ 17

  5. How long should that SIP be? Have a chunk of money to invest? You should SIP it, but for how long a period? One elegant rule of thumb to invest a lump sum is to do an SIP over half the period that it has taken you to earn the lump sum, subject to the maximum of four to five years It's a question that vexes many mutual fund investors saw how SIP were truly safe for about four years and once they buy into the concept of investing through a above. In this study, we found that on an average, if Systematic Investment Plan (SIP): when you have a you invest in an SIP over four years, then your risk of a lump sum to invest, then over what period should you loss is negligible. It's also interesting that the risk of spread the SIP? Of course, for most SIP investments, loss and the chance of an outside gain are both higher the question does not arise. The most common type of over short periods. Over longer periods, the good SIP investment is a monthly one that goes out of a times and the bad get averaged out and minima and monthly income. the maxima converge. Consider this, for a typical fund However, occasionally, the SIP investor gets a large with a multi-decade history, over all possible one year sum of money at one go. It could be a bonus from a periods, the maximum returns are 160% and the workplace or it could be the proceeds from the sale of minimum -57%. Over two years, this becomes 82% and some asset like real estate or it could even be your -34%. Over three, 63% and -18%. Over five, 54% and retirement kitty. As every saver should know, investing 4%, meaning never any loss. Over ten years, the in an equity-backed mutual fund is the best way to get maximum is 30% and the minimum 13%. These are all great returns over a long period like five to seven years annualised figures. The trade-off is crystal clear – the or more. However, over shorter periods, equity funds shorter the period, the higher the potential gain but are dangerous. And when you invest a large sum in the worse the possible risk. one shot, then the risk is the highest. If the markets turn The straightforward answer from this data appears to turtle, you could lose 10, 20 or even higher percentage be that SIPs must last more than three years. And of your invested amount very quickly. Since the indeed, if you seek zero risk of loss, then that is the beginning of the Sensex in April 1979, of the almost correct answer. However, for many investments, this is 13,900 possible six-month periods, as many as 2,269 too long. If you are getting an annual bonus from your yielded a loss worse than 20 per cent. If you just employer, then it would be ridiculous to spread it over happened to catch a period like that at the beginning, three or four years. On the other hand, if you have sold then you would lose a large chunk of your capital right some ancestral property and the sum realised will be before it even starts growing. In theory, you could the core of your old-age income, then you need to be eventually recover, but in practice you would probably extra cautious about the risk you take. In a case like panic and pull out your money, making your loss this, you would do well to forego some potential permanent. income in order to ensure that you don't make a loss. The antidote to this is a Systematic Investment Plan. One elegant rule of thumb is that you could invest the Spread out your investment at a monthly periodicity money over half the period that it has taken you to over a certain period. Your entry price will be averaged earn it, subject to the maximum of four to five years. So out and you will be saved from the risk of a sudden the annual bonus could be invested in six months, decline. Moreover, you will end up buying more units while the ancestral property could take five years. It's of the fund when the markets are lower, which will basically a way of linking risk to how significant that further enhance the returns you will eventually get. sum of money is for you. However, the vexing question is what is this 'certain period' that I have referred to? Dhirendra Kumar Last time, I wrote about the research project on historic CEO, Value Research SIP returns that Value Research has carried out and we Powered by Value Research 5 MARKET twitter | June’ 17

  6. ‘Focus on stocks with sustainable growth’ Pradeep Gokhale of Tata Mutual Fund is in charge of the large-cap fund and an ethical-investing fund. He shares his views on large-cap valuations, four major trends in play and why he has low exposure to the metals space. Pradeep Gokhale Head - Equity Fund Manager medium-term view in terms of their What is the reason behind metals as a competitive position, expected EPS sector not finding good space in your growth, sustainability of growth, portfolio? Are large-cap valuations expensive in management track record and The main value driver for metals is historical terms? valuations. We make changes if our international commodity prices, which Large-cap indices Sensex and Nifty are investment thesis is not playing out or we find difficult to understand and trading at about 18.5x FY18 and 16x if the stock is fully priced or if there are forecast. Also, many metal companies FY19 EPS estimates. These valuation better alternatives available. have high debt levels. We have multiples are above the long-term invested in some metal companies averages but by no means are very Across the large-cap space, which which are very low-cost producers and expensive or near peak. In fact, in a sectors exhibit your ‘higher quality set have a strong balance sheet. relative sense, today, large-cap Generally, we find higher quality of businesses’ character? valuations are lower than mid-cap Tata Ethical Fund is a multi-cap fund, valuations on a P/E basis. businesses in sectors such as but its returns haven’t been greater automobiles and auto ancillaries, than, for example, the large-cap fund Do more investment opportunities banking and financial services, you manage over the long-term. come up with your growth-at consumer staples and durables, IT, Tata Ethical Fund is a thematic fund, reasonable-price (GARP) strategy vis- pharma and utilities. which essentially invests in high- a-vis one or two years ago? quality growth companies with low Relative to the last year, when Sensex Does your fund seek to maintain its debt levels. They have good return on was near 24,000 levels, there are fewer sectoral weightage within a tight capital employed and high cash- opportunities. However during the range of the sectoral allocation of its generation ability. Over a complete last 12 months, the rally was led by We follow an active fund-management benchmark index? business cycle, such a portfolio gives value stocks rather than growth stocks superior returns. Being a thematic leaving opportunities to apply the strategy and do take significant fund with sectoral investment GARP strategy. We are focusing on positions away from the benchmark, restrictions, you cannot strictly stocks with more sustainable growth, both in terms of stocks and sectors. compare it with diversified funds. as market valuations have moved up. Can you share any new trends Since banking and finance companies Over a 10-year period, your large-cap prevailing in the market that you may are not part of an ethical fund, doesn’t fund has returned nearly 12 per cent We see four broad trends playing out be considering to take advantage of? it begin with a handicap in the first annually. Do you think returns of this place? kind can be expected by investors in the economy. The ethical fund invests in several who are keen to enter markets now, 1. Higher share of capital investments high-growth sectors such as auto and when Sensex has crossed 30,000? by the public sector/PSUs as auto ancillaries, cement, capital goods, India is an economy with high growth compared to the private sector. discretionary consumption, oil and potential. It is coming out of a 2. Formalisation of the economy due gas, which are a play on economic prolonged period of weak growth. to measures such as GST and recovery and growth. The volatility in Many internal factors which impacted restrictions on cash transactions in such sectors is also much lower than growth such as high inflation, high business. This can benefit the that in the banking sector. fiscal and current-account deficits have businesses where currently the been properly addressed and have share of the unorganised sector is shown good improvement. We are high. seeing some signs of improvement in 3. Financial inclusion – a higher share global growth as well, as witnessed in of savings flowing to the financial trade and export data. We, therefore, sector as compared to real estate/ feel that investors with a long-term gold. horizon can make good returns from 4. Higher growth in household debt. equities even though the market is Indian households are trading at new highs. underleveraged even when compared to many emerging Your large-cap fund has among the economies and with rising lowest portfolio turnovers (32 per aspirations, the scope for retail cent). Are you a buy-and-hold kind of loan growth is high. fund manager? We generally look at companies with a Powered by Value Research 6 MARKET twitter | June’ 17

  7. All’s not lost In spite of recent setbacks, short-term debt funds remain a good parking place for your one-year-plus money Analyst’s Choice Taking stock today, short-term these funds for their very AXIS SHORT TERM FUND income funds may not appear to conservative portfolios and low Rating ? ? ? Avg be the most attractive category of credit risk, their tight rein on 9.56 debt funds to invest in. Falling portfolio duration and their ability Risk grade 3-yr ret (%) interest rates for the last three years to deliver good returns with BIRLA SUN LIFE SHORT TERM FUND have resulted in much higher relatively low expense ratios. We Rating ? ? ? ? Avg 9.51 interest rates from medium/long- have also run the Altman-Z check term gilt funds, income funds, on these funds. It helps determine Risk grade 3-yr ret (%) credit-opportunities funds and the risk of bankruptcy (and hence HDFC SHORT TERM OPPORTUNITIES FUND other categories. Also, a few funds default) in a company. Rating ? ? ? ? -Avg 9.09 in this conservative category have Aggregate data show that short- taken exposure to lower-rated Risk grade 3-yr ret (%) term income funds managed one- corporate debt and have suffered ICICI PRU ULTRA SHORT TERM PLAN and three-year returns of 8.7 and mark downs due to defaults and 8.65 per cent on an average as on Rating ? ? ? ? Avg downgrades. 9.35 May 31, 2017. This was for the Risk grade 3-yr ret (%) But despite all this, short-term regular plans. Direct plans, with SBI SHORT TERM DEBT FUND income funds are a good parking their expense ratios 40–60 basis ground for your one-year-plus points lower, managed over 9.2 per Rating ? ? ? ? Avg 9.35 money, especially if you don’t like cent. The total assets managed by Risk grade 3-yr ret (%) big year-to-year swings in your the funds were at `1.87 lakh crore debt returns. and the funds maintained an UTI SHORT TERM INCOME FUND average maturity of 2.38 years. Rating ? ? ? ? Avg In this month’s issue, we present 9.67 short-term income funds selected Risk grade 3-yr ret (%) not for their chart-topping returns but for their ability to finely balance risks with returns. We shortlisted Short-term category vs CCIL T-Bill Liquidity Weight 22,000 Debt: Short Term CCIL T Bill Liquidity Weight 19,000 16,000 13,000 10,000 7,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year 10.53 6.02 5.06 9.11 9.74 8.02 10.37 8.16 9.87 2.80 Category (%) CCIL T-Bill 6.06 2.61 2.78 4.80 5.60 5.50 5.71 5.38 4.73 1.57 Liq Wt (%) 0.68 1.01 0.86 0.81 0.92 0.86 0.80 0.73 0.73 0.67 Expense ratio (%) Powered by Value Research 7 MARKET twitter | June’ 17

  8. Risk & return Annual returns (%) Credit Dynamic Short Ultra 5 Year Opp. Bond Income Liquid Term Short Term 2007 7.40 3.84 7.01 7.40 8.15 7.63 4 2008 7.80 10.13 14.20 8.29 10.53 8.71 Dynamic Bond 10.11 2009 6.27 1.25 0.89 4.73 6.02 5.36 2010 4.98 3.40 4.61 5.17 5.06 5.27 3 Income Risk 2011 8.77 8.73 7.98 8.56 9.11 8.76 9.75 2012 9.81 10.41 10.09 9.30 9.74 9.48 Short Term 2 8.95 2013 7.55 5.52 5.20 9.06 8.02 8.62 Ultra Short Term 2014 11.63 14.02 12.89 8.96 10.37 9.24 8.27 Credit 1 Liquid Opportunities 2015 9.59 6.84 7.04 8.21 8.16 8.48 7.84 10.07 2016 10.50 13.41 11.84 7.51 9.87 8.56 0 2017* 3.58 1.43 2.24 2.55 2.80 2.55 7.5 8.0 8.5 3-yr return (%) 9.0 9.5 10.0 10.5 * As on May 31, 2017 Credit-rating break-up (%) 0.60 0.41 0.06 0.08 4.80 8.61 16.32 AAA/A1+ 11.65 AA & below SOV 56.10 Cash equivalent 61.28 17.98 Term deposits 22.12 Unrated/others Value Research Analyst Picks Average Returns (%) Rating Regular Direct Expense Ratio (%) AUM Maturity Scheme Name Regular Direct 1 year 3 year 1 year 3 year Regular Direct (` Cr) (yrs) Axis Short Term Fund ? ? ? ? ? 8.56 8.70 9.31 9.56 0.85 0.25 6,441 2.10 Birla Sun Life Short Term Fund ? ? ? ? ? ? ? ? 9.20 9.40 9.31 9.51 0.29 0.19 17,773 2.62 HDFC Short Term Opp. Fund ? ? ? ? ? ? ? ? 8.54 8.90 8.70 9.09 0.36 0.21 9,788 1.54 ICICI Pru Ultra Short Term Plan ? ? ? ? ? ? ? 8.80 8.91 9.19 9.35 0.58 0.26 8,672 2.88 SBI Short Term Debt Fund ? ? ? ? ? ? ? 8.77 8.84 9.41 9.35 0.91 0.31 8,898 2.48 UTI Short Term Income Fund ? ? ? ? ? ? ? 9.61 9.13 10.12 9.67 0.84 0.37 9,803 1.90 Returns as on May 31, 2017; Portfolio related data as on April 30, 2017 8 MARKET twitter | June’ 17

  9. BANKS India at its decades of lowest credit growth, as per data by RBI. How long this weakness in credit appetite is going to last? India at its decades of lowest credit growth, as per data by RBI. How long this weakness in credit appetite is going to last? BANKS TARGET RATING Non-performing assets has increased by 5 times in just 5 years. Are stressed assets at peak level or how much more are still left to be recognized? YESBANK BUY 1936 Transferring power from bankers to RBI- Will lead to fast resolution of stress assets. Will this hurt banks autonomy in lending and borrowing? Capital raised creates attractive valuation. Recent weakness -an opportunity Credit Growth at its decades of low ! HDFCBANK BUY 1725 SFortnightly data by RBI on advances for Indian Banking shows the credit growth at low of 5.1% in FY17. Despite consistent healthy profitability and growth track record, best is yet to come. “Why the credit growth was in its low of decade? Does it mean that there is lack of credit appetite in Indian Economy and growth may decline further? “ INDUSINDBK NEUTRAL 1480 With strong fundamentals and higher valuation, any dips in price will give an opportunity. AXISBANK BUY 560 Near-term pressure on profitability but strong retail liability franchise give us confidence for mid-long term. DCBBANK BUY 205 Answer to this question lies in some fact which can compel us to think seriously about it. Data by RBI had not incorporated the reasons for lowest credit growth this year. Fastest growing bank in small market cap. Aggressive expan- sion will lead to better RoA in mid to long term. Loans which were given to SEBs have been converted into bonds under UDAY scheme to the tune of Rs 1.7 lakh crore. This alone had impacted the loan book by more than 2%. VIJAYABANK NEUTRAL 98 Lowest stress assets among peers with improving recovery and slippages but higher on valuation. Apart from this there was repayment of loans linked to FCNR deposits which got redeemed during December quarter which has impacted the book to decline by around 75 bps. INDIANB NEUTRAL 360 Demonetization has also certainly impacted the credit growth during second half of FY17. Healthy capitalization with focus on retail banking. Low on stress assets but high on valuation. Grappling with huge stressed assets in balance sheet, majority of public sector lenders and some corporate private lenders have applied conservative approached towards corporate lending. Due to this some of corporate borrowers has resorted to alternative channel of banking i,e bonds which is growing with a healthy rate of 15%. SBIN BUY 340 Relatively good quality of book among large players. Merger with associates will give strong liability franchise and better network coverage. Adjusting for some of facts our calculation state the credit growth will be more than 9% for FY17. 9 MARKET twitter | June’ 17

  10. Nevertheless if we ignore these facts and go by RBI data, then the main question which comes to our mind is that- has the credit growth bottomed out for system? But which are the sectors or area that will drive the credit growth? “Going by the recent interviews, results and Government initiatives we analyze that credit growth will be supported by both Capex and working capital loan demand. Under capital expenditure we analyze credit demand to be supported by areas like roads, cement, railways, renewable energy, housing, commercial durables, and rural demand. Commodity prices has also picked up which will boost the working capital demand. Despite low credit growth in system, listed private banks has grown by 12.3% YoY in December quarter which shows the continuation of gaining market share from public banks, while credit growth of public banks has declined by 2.2% for the same period. As on December 2016 private banks has gained the market share by 3% in a year to 28%. With the weak capitalization and mounted NPA issue in public banks, we analyze muted credit growth for most of the public banks. Whereas relatively strong capitalization and less stressed assets, most of the private sector banks are at sweet spot to cash the opportunity for healthy loan growth. “ Recently we interacted with management of various banks under large, mid and small market capital during latest result via concall and interviews. Their views on credit growth in respective of their banks and industry were in fact signals for strong growth going forward. vehicles, consumer Management of HDFC Bank, the largest private lenders, indicated that the best is yet to come in terms of loan growth despite growing more than 19% in FY17. Yes bank and Indusind bank is target growth of 25% each in FY18.Public Sector- Indian Bank and Vijaya bank recently declared its March result are also targeting for double digit growth in FY18. Secondly there was huge capital raised by some of the private banks and some has pipeline for it to strengthen their core capital ratio to support the loan growth. HDFC Bank despite strong capitalization position plans to raise Rs 50000 Cr of perpetual debt instrument to provide further strength to its Tier I ratio. Raising fund at this point of time shows that management is confident of strong loan growth going forward. However most of public banks are struggling with huge stress assets in their balance sheet due to which they will be unable to use their full capacity, hence we are of the opinion that the credit growth in FY18 will be supported by private banks and to some extent few public banks. Date 25-Mar-11 30-Mar-12 31-May-13 28-Mar-14 3-Apr-15 1-Apr-16 31-Mar-17 Food Credit 64,282 79,788 118,042 97,552 69,227 101,205 53,927 Non Food Credit 3,877,801 4,627,145 5,250,736 6,041,493 6,733,294 7,399,292 7,827,601 Bank Credit 3,942,083 4,706,933 5,368,778 6,139,045 6,802,521 7,500,497 7,881,528 10 MARKET twitter | June’ 17

  11. Are the Non-performing assets at peak level? Gross Non-performing assets of listed commercial banks has mounted to the level of Rs 7.14 Lakh Cr in December quarter FY17 from Rs 4, Cr a year back as per our estimates, whereas Net non-performing assets has increased to 3.95 Lakh Cr from Rs 2.55 Lakh Cr during the same period. Net NPA ratio increased to 5.5% against 3.6% a year ago. “Now the question arises are non-performing assets at peak level? If not then much more stress assets is still to be recognized?“ To answer this, first we will have to know the genesis of such mounted stress assets in Indian Economy. Our analysis shows that the bulky of stress assets were generated mainly from Iron & steel, cement, power and mining. NPA gener- ated from these sectors were structural and operational in nature while some more NPAs were recognized due to willful default in few accounts. Our analysis shows that banks have recognized most of the bulky stress assets during last 5 quarters as directed by RBI in its AQR list. While assets quality issues continued to persist in FY17 but the pace for incremental slippages has slowed down significantly for majority of banks. Gross slippages during 3Q FY17 were Rs 69,800 Cr against Rs 1,84,900 Cr in 4Q FY16. Gross slippage ratio has moderated to 96 bps in 3Q FY17 against high of 2.59% in 4Q FY16. In the latest result of Indian Bank, its management has indicated the GNPA ratio target of below 5% in FY18 against current 7.5%.Most of the results by private sector banks has indicated towards normal level of NPA going forward. However lately RBI found divergence in recognition of stress assets among banks from the list provided under AQR which may impact slippages to rise in some of banks in coming 1 or 2 quarters. However on the back of our analysis we found that most of the bulky stress assets have been recognized in the system and slippages in FY18 would be significantly lower than that of FY17. GNPA FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 3Q FY17 Private Banks 17,905 18,210 20,382 24,184 33,690 55,853 84,409 >> GNPA % 2.5% 2.1% 1.8% 1.8% 2.1% 2.8% 4.1% Public Banks 71,047 112,489 164,462 227,264 278,468 539,956 629,871 >> GNPA % 2.3% 3.2% 3.6% 4.4% 5.0% 9.3% 11.5% Total GNPA 88,952 130,699 184,843 251,447 312,158 595,809 714,280 >> GNPA % 2.3% 3.0% 3.2% 3.8% 4.3% 7.6% 9.2% Source: RBI reported excluding foreign banks (3Q FY17 data -Narnolia research) 11 MARKET twitter | June’ 17

  12. Is latest ordinance to empower RBI is the key for fast resolution? for clearance and we analyze that if resolution is delayed than ageing related NPA will badly hit the PAT in FY18 for big corporate lenders. Also one basic problem for PSU bank will even persist in terms of low capitalization and any delay or huge haircuts under resolution process will again impact the capitalization. “ “Going forward profit after tax of most of PSU banks and large corporate private lenders depends on fast resolution of stress assets otherwise it will be most hit by provisions due to ageing related NPA till FY18. Now fast resolution of stress assets is the key for most of banks. To speed up resolution process Government and RBI have introduced a series of reforms in banking sector like JLF, SDR and S4A but the result were not as per the expectations as banks were unable to find the buyers for the ownership. Apart from these reforms Government passed Insolvency and Bankruptcy code 2016. Government has also taken certain steps within steel sector to improve its efficiency like intervention in terms of minimum import price and anti-dumping duty on imports, National steel policy that favors Indian Steelmak- ers. We think this type of initiative will be more favorable for economy and needs more sector specific decision to combat stress assets. However in the latest development, Government has passed an ordinance which will empower RBI to issue borrower specific direction to banks for tackling NPA problem. Now RBI can issue instructions to banks to initi- ate the resolution under the Insolvency and Bankruptcy Code 2016. We see this ordinance as welcome step to fasten the resolutions of stress assets as earlier to this, slow decision-making process under PSU banks were hindering the resolution of large stress assets. But the basic question remains the same that how this new ordi- nance will help to get bank’s money back from stressed corporate borrower? How and when oversight commit- tee will be formed by RBI? Is there chance of conflict of interest between RBI and management of bank? How much the haircuts would be taken? Answer to these questions is uncertain as of now and will take much time We maintain our positive stance on private banks as they will continue to acquire market share from public banks thus loan growth will remain healthy going forward. This value migration from PSU to Private has more legs to go. Continuation of investment in digitization has resulted in controlled and declining operating expenses hence cost to income ratio is improving. Private Banks have comparatively much less stress assets against public banks. Healthy capitalization ratio also helps to increase the business going forward. However for many banks valuation has run ahead of their fundamentals. But decline in prices will give an opportunity. Our top picks are HDFC Bank, Federal Bank, Yes Bank and Axis Bank. Apart from this under public sector banks Indian bank and Vijaya bank were our top picks based on retail business focus, adequate capital, relatively low stress assets and higher recovery than slippages. This tactical stance of ours helped us ride the PSU banking rallies over last nine months. First we recommended Indian Bank at Rs 100 and got neutral near Rs 330 and recommended Vijaya Bank at Rs 48 and now we have changed our rating to neutral for Vijaya Bank at Rs 98. Both Indian Bank and Vijaya Bank are trading at P/B of 1.0 and do not leave much on table in context of current fundamental. At this point, we recommend Buy only on SBI among PSU Banks as it has relatively better quality of book and capital ratio than its peers. Merger will be key monitorable for the bank. 12 MARKET twitter | June’ 17

  13. HDFC BANK HDFCBANK remains one of the best in the industry with stable perfor- mance and healthy growth of over 20% CAGR over a long period of time. Key Highlights of the report Company Data CMP 1699 • HDFCBANK remains one of the best in the industry with stable performance and healthy growth of over 20% CAGR over a long period of time. Target Price 1758 Previous Target Price • Strategically growing the business as per the growth of economy and diversification of portfolio has paid with the finest return ratios in the industry. Upside 3% Change from Previous 52wk Range H/L 1582/1134 • Healthy CRAR of 14.6%, Tier I of 12.8% and CASA at 48% level augurs well for strong growth opportunity and gaining the market share from its peers. Mkt Capital (Rs Cr) 402344 Av. Volume (,000) 80 • HDFCBANK has one of the best assets quality in the banking industry with the GNPA ratio of just 1.05% and PCR at 69%. Share Holding Pattern % 4QFY17 3QFY17 2QFY17 Promoters 26.0 26.1 26.2 • Healthy NII growth coupled with strong other income led the profitability to grow by 18% 4Q FY17. DII 12.9 15.0 14.3 FII 42.1 39.2 39.4 • HDFCBANK is currently trading at 3.5x P/B FY19 and we value it (3.9x P/B, EPS growth 20% FY19) at Rs 1758 and recommend BUY. Others 18.9 19.7 20.1 Financials/Valuation FY15 FY16 FY17 FY18E FY19E At FY19 B/V, HDFCBANK is trading below its historical trend NII 22,396 7,592 33,139 39,009 45,302 PPP 17,404 21,364 25,732 30,313 35,887 PAT 10,216 12,296 14,550 17,281 20,809 NIM % 4.5 4.5 4.4 4.4 4.3 EPS (Rs) 40.8 48.6 56.8 67.4 81.2 EPS growth (%) 15.3 19.3 16.7 18.8 20.4 ROE (%) 19.4 18.3 17.9 18.3 19.3 ROA (%) 2.0 2.0 1.9 2.0 2.0 BV 245 285 347 386 451 P/B (X) 4.2 3.8 4.2 4.1 3.5 P/E (x) 25.1 22.0 25.4 23.3 19.4 Stock Performance % Recent Development : Key Highlights of Result Update 1Mn 1Yr YTD Absolute 2.1 37.6 31.0 • HDFCBANK reported strong growth of 27% in its operating profit backed by cost control and healthy growth in NII and other income. However increased provisioning resulted in 18% PAT growth YoY. Rel.to Nifty 1.3 16.4 16.3 • Staff count reduce by 6k in 4Q FY17 and by 10K in latter half part of FY17. • Advances grew with the robust rate of 19.4% YoY and 12% QoQ despite one time hit in previous quarter due to loan repayment linked to FCNR deposits. Domestic loan was even stronger with 23.3% YoY. Domestic corporate loan book saw some traction with gain in market share from other banks. • Tier I capital of bank declined to 12.8% against 13.2% on FY16 due to increase in risk weighted assets. • Slippages ratio was 1.5% in which around Rs 250 Cr was related to RBI dispensation. Provision coverage ratio was 69% against 70% QoQ. 13 MARKET twitter | June’ 17

  14. Quarterly Performance Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY % Interest Inc. 15,997 16,516 17,070 17,606 18,114 13.2% 2.9% 60,221 69,306 15.1% Interest Exp. 8,543 8,735 9,076 9,297 9,059 6.0% -2.6% 32,630 36,167 10.8% NII 7,453 7,781 7,994 8,309 9,055 21.5% 9.0% 27,592 33,139 20.1% Other Income 2,866 2,807 2,901 3,143 3,446 20.3% 9.7% 10,752 12,296 14.4% Total Income 10,319 10,588 10,895 11,452 12,501 21.1% 9.2% 38,343 45,436 18.5% Ope Exp. 4,584 4,769 4,870 4,843 5,222 13.9% 7.8% 16,980 19,703 16.0% PPP 5,735 5,819 6,025 6,609 7,279 26.9% 10.1% 21,364 25,732 20.4% Provisions 662 867 749 716 1,262 90.5% 76.3% 2,726 3,593 31.8% PBT 5,072 4,952 5,276 5,893 6,018 18.6% 2.1% 18,638 22,139 18.8% Tax 1,698 1,714 1,820 2,028 2,028 19.4% 0.0% 6,342 7,589 19.7% Net Profit 3,374 3,239 3,455 3,865 3,990 18.3% 3.2% 12,296 14,550 18.3% Operating profit remained healthy despite tumultuous last quarter • HDFCBANK reported strong growth of 27% in its operating profit backed by cost control and healthy growth in NII and other income. However increased provisioning resulted in 18% PAT growth YoY. • NII grew by 21.5% YoY due to strong loan growth and NIM expansion of 20 bps QoQ to 4.3%. NIM expansion was mainly benefitted from spike in CASA ratio during demonetization period. • Other income grew by 20.3% of which fee income registered growth of 17% YoY, whereas profit on sale of investment saw 56% of growth YoY. Recovery from written-off accounts was strong this quarter with 31% YoY growth. • Cost to income ratio declined to 41.8% against 44.4% a year back. Employee cost increased by just 3% YoY whereas it declined by 8% QoQ on the back of reduction in staff count by 6k in 4Q FY17. As a whole in the latter half of the year it reduced around 10k employee. However management continuous to invest in digital strategy to improve productivity. Overall operating expenses grew by only 14% YoY. • Provision increased by 90% YoY due to increase in standard assets provisioning and on account of NPA that received RBI dispensation in 3Q FY17. Profitability Metrix 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY % C/I Ratio % 44.4 45.0 44.7 42.3 41.8 -2.65 -0.52 46.4 45.6 -0.83 Empl. Cost/ Tot. Exp. % 32.7 33.2 34.0 34.9 29.7 -2.94 -5.14 33.6 32.9 -0.68 Other Exp/Tot. Exp.% 67.3 66.8 66.0 65.1 70.3 2.94 5.14 66.4 67.1 0.68 Provision/PPP % 11.6 14.9 12.4 10.8 17.3 5.78 6.50 12.8 14.0 1.21 Provision/Avg. Advances % 0.6 0.7 0.6 0.6 1.0 0.37 0.38 0.7 0.7 0.05 Tax Rate % 33.5 34.6 34.5 34.4 33.7 0.21 -0.72 34.0 34.3 0.25 Int Exp./Int Inc. (%) 53.4 52.9 53.2 52.8 50.0 -3.40 -2.79 54.2 52.2 -2.00 Other Inc./Net Inc. % 27.8 26.5 26.6 27.4 27.6 -0.21 0.12 28.0 27.1 -0.98 PAT/ Net Income % 32.7 30.6 31.7 33.8 31.9 -0.78 -1.84 32.1 32.0 -0.05 PAT Growth % 20.2 20.2 20.4 15.1 18.3 -1.96 3.10 20.4 18.3 -2.04 NII Growth % (YoY) 24.0 21.8 19.6 17.6 21.5 -2.46 3.94 23.2 20.1 -3.09 Operating Profit Growth YoY % 21.5 20.0 19.5 15.2 26.9 5.48 11.70 22.7 20.4 -2.30 RoE % 18.7 17.4 17.6 18.7 18.3 -0.36 -0.38 18.3 17.9 -0.31 RoA % 1.9 1.7 1.8 1.9 1.9 0.01 -0.03 2.0 1.9 -0.04 14 MARKET twitter | June’ 17

  15. NIM expanded, benefitting from declining cost • NIM improved from 4.1% a quarter back to 4.3% benefitted from increased CASA level. NIM remained at the higher range of guidance given by management. • Intensive competition in retail lending has resulted in NIM pressure but strategically mix of loan portfolio and improved CASA has helped HDFCBANK to maintain its margin. • Going forward we margin to sustain at current level due to improvement in CASA level despite reduction in yields due to MCLR. Margin Performance Margin % 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY % Yield (Total Assets) 10.0 9.8 9.7 9.7 9.7 -0.38 -0.01 9.7 9.2 -0.47 Cost Of Funds 5.4 5.6 5.6 5.3 4.9 -0.55 -0.45 5.6 5.2 -0.44 NIM 4.3 4.4 4.2 4.1 4.3 0.00 0.20 4.5 4.4 -0.03 Other Income growth remained healthy • Other income grew by 20% YoY given the pickup in fee income. Core fee income grew by 16.1% YoY, Forex and derivatives segment grew by 26.1% • Due to increase in G-Sec bond yield of around 18 bps during the quarter trading gain declined by more than 50% QoQ as per the expectation. Other Income Break Up 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY(+/-) Fees & Commissions 2,172 1,978 2,104 2,207 2,523 16.1% 14.3% 7,759 8,812 13.6% FX & Derivatives 283 315 295 297 357 26.1% 20.0% 1,228 1,263 2.9% Profit / (loss) on Investments 116 277 284 399 180 56.2% -54.7% 732 1,139 55.7% Miscellaneous Income Includ- ing Recoveries 295 237 219 240 386 30.8% 60.9% 1,033 1,082 4.7% Other Income 2,866 2,807 2,901 3,143 3,446 20.3% 9.7% 10,752 12,297 14.4% 15 MARKET twitter | June’ 17

  16. Healthy Balance sheet growth • Advances grew with the robust rate of 19.4% YoY and 12% QoQ despite one time hit in previous quarter due to loan repayment linked to FCNR deposits. Domestic loan was even stronger with 23.3% YoY. • Advances growth was backed by healthy growth in retail assets which grew by 27% YoY as per regulatory classification. However HDFCBANK also saw pick up in its domestic corporate lending by 20% YoY due to gain in market share from other banks. • Strong retail assets growth was spread over the book with 35% in personal loan, 43% in business banking, 27% credit cards, 20% home loan, 24% auto loan and 31% CV/CE segment. • Vehicle segment growth (auto, cv/ce, 2wheeler) picked upto 25% growth this year. Whereas, unsecured loan contributed 32% growth in overall book. Share of unsecured loan is at 13.7% against 12.4% a year back. • As per the regulatory classification, domestic retail loan book constitute 53% and wholesale segment is 47% against 51% and 49% a year back. • It is notable that the deposits were impacted in 3Q FY17 due to FCNR redemption; however HDFCBANK saw tremendous growth in deposits of 14% QoQ and 18% YoY. • CASA registered healthy growth of 31% YoY backed by strong growth in both SA and CA of 31% eventually. This increase in CASA was mainly attributed to demonetization exercise. CASA ratio now stands at 48% from 45% in 3Q FY17. • Stable Assets Quality • Assets quality remains intact for HDFCBANK this quarter. GNPA was flat on sequential basis with 1.05% and NNPA was 0.33% against 0.32%. • Slippages ratio was 1.5% in which around Rs 250 Cr was related to RBI dispensation. Provision coverage ratio was 69% against 70% QoQ. • Assets quality of HDFCBANK remains one of the best in the industry. Going forward we are less concerned about the assets quality given its portfolio mix towards secured retail loans and better rated corporate loan. 16 MARKET twitter | June’ 17

  17. 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY % GNPA (Rs) 4,393 4,921 5,069 5,232 5,886 34.0% 12.5% 4,393 5,886 34.0% GNPA % 0.9 1.0 1.0 1.1 1.1 0.11 0.00 0.9 1.1 0.11 NNPA (Rs) 1,320 1,493 1,489 1,564 1,844 39.7% 17.9% 1,320 1,844 39.7% NNPA % 0.3 0.3 0.3 0.3 0.3 0.05 0.01 0.3 0.3 0.05 Slippages (Rs) 1,700 1,761 1,440 1,700 2,100 23.5% 23.5% 5,941 7,001 17.8% Restructured Assets % 0.1 0.1 0.1 0.1 0.1 0.00 0.00 0.1 0.1 0.00 Specific PCR % 69.9 69.7 70.6 70.1 68.7 -1.27 -1.43 69.9 68.7 -1.27 Concall Highlights • Provisons spiked due to incremental provisions on NPA related to dispensation provided by RBI in last quarter. Standard assets provisioning also increased due strong assets growth. • Will open 100 to 200 branch per year going forward as against 300-400 earlier. • Corporate loan picked up in the quarter. Gaining market share from both public as well as private banks. • The bank managed recoveries from about 25% of accounts that benefited from RBI dispensation in the prior quarter • Slippage was at 1.5% excluding RBI dispensation of Rs 245 Cr. • Floating Provisions were Rs 1248 Cr as on 4Q FY17. • No ARC sale in this quarter. CASA ratio was higher due to some traction from capital market. • View and Valuation We continue to like HDFC Bank given its strong fundamentals, steady loan growth, adequate capital, best in assets quality, strong branch network and intensive digitalization initiatives. With all levers set, HDFCBANK is poised for strong business growth from the expected upturn in economy. Continuation of strong loan growth has resulted in gain of market share from its peers. Due to intensive investment in digitalization and slow down in employee expenses, we expect productivity to improve further and hence will result in cost reduction. Increase in CASA during demonetization period will help NIM to sustain at current levels despite reduction in rates due to MCLR. With the healthy capitalization ratio of Tier 1 at 12.8% we expect RoE in the range of 19%-19.5% and RoA of 2% in FY19. HDFCBANK is currently trading at 3.5x P/B FY19 and we value it (3.9x P/B, EPS growth 20% FY19) at Rs 1758 and recommend BUY. 17 MARKET twitter | June’ 17

  18. KNRCON KNRCON has clocked 63% YoY revenue growth to Rs. 482 Cr ahead of our estimate. Strong execution of orders received in previous year has helped to post robust growth in FY17 Key Highlights of the report Company Data CMP 208 • KNRCON has clocked 63% YoY revenue growth to Rs. 482 Cr ahead of our estimate. Strong execution of orders received in previous year has helped to post robust growth in FY17. Target Price 230 Previous Target Price • EBITDA and PAT margin are in line with our expectation in Q4FY17 and FY17. Management has guided EBITDA margin of 13.5-14.5% going ahead. Upside 11% 52wk Range H/L 215/104 Mkt Capital (Rs Cr) 2,823 • Considering the current market scenario management is open to take HAM projects and expects to win Rs. 2000 Cr of new projects in FY18 (50% from HAM and rest from EPC). Av. Volume (,000) 60 Av. Volume (,000) 80 • Currently, stock is trading at 12.3x EV/EBITDA of FY18. We have positive stance on the stock and we recommend “BUY” with target price 230. Share Holding Pattern % 4QFY17 3QFY17 2QFY17 Promoters 58.0 58.1 58.1 Financials/Valuation FY14 FY15 FY16 FY17 FY18E DII 42.1 41.9 41.9 Net Sales 835 876 903 1,541 1,760 FII 100.0 100.0 100.0 EBITDA 126 126 153 230 259 Others 18.9 19.7 20.1 EBIT 69 72 111 166 197 PAT 61 73 161 158 175 Stock Performance % EPS (Rs) 4 5 11 10 12 1Mn 1Yr YTD EPS growth (%) 17% 20% 121% -2% 11% Absolute 1.0 11.6 86.2 ROE (%) 12% 13% 22% 18% 16% Rel.to Nifty (2.4) 3.2 68.6 ROCE (%) 12% 11% 13% 16% 16% BV 34 38 48 60 71 P/B (X) 0.4 1.4 2.2 2.4 2.9 P/E (x) 3.4 11.0 9.9 13.5 17.8 Recent Development • KNRCON has received appointment date for the Hubali hospet project in Karnataka on 15th march and work has started on it. Management has expects revenue contribution from Q1FY17. • KNR has signed stake sell agreement with Essel group and presently waiting for NHAI approval for the deal. Management of the company expects approval in month time. • Earlier Management is reluctant to take HAM projects but considering the current market scenario, management is open to take HAM and expects Rs. 1000 Cr of orders in FY18 via HAM mode. • Management expects to complete Thiruvananthapuram Bypass and Madurai -Ramanathpuram Section of NH-49 by January 2018 and April 2018 respectively. 18 MARKET twitter | June’ 17

  19. Quarterly Performance Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY % Sales 294 317 371 423 485 65% 15% Other come Operating In- 1.52 (0.47) 10.26 1.73 (3.01) -299% -274% Company's share in JV - 14 8 43 - -100% Net Sales 296 303 373 382 482 63% 26% 903 1,541 71% Other Income 16 6 13 10 1 -94% -90% 32 30 -5% COGS 203 217 271 277 349 72% 26% 606 1,115 84% Employee Expenses 11 13 13 15 15 27% -2% 43 55 28% Other Expenses 39 29 33 32 47 21% 44% 100 142 41% Total Expenditure 253 259 318 325 410 62% 26% 750 1,311 75% EBITDA 43 44 56 58 72 69% 25% 153 230 50% EBITDA M% 14.5% 14.4% 15.0% 15.1% 15.0% 17% 15% Depreciation 11 13 15 17 19 81% 17% 42 64 51% EBIT 32 31 41 41 53 64% 28% 111 166 50% Intreset 4 4 6 7 5 31% -18% 13 22 65% Exceptional Item - - - 11 - - 11 PBT 44 32 49 45 48 11% 8% 129 163 26% Tax (14) 2 5 3 (4) -70% -232% (32) 6 -119% PAT 57 30 44 31 53 -7% 74% 161 158 -2% PAT % 19.4% 9.9% 11.7% 8.0% 11.0% 18% 10% Strong Execution capabilities led to robust revenue growth • HKNRCON has posted strong top line growth of 59% YoY to Rs.482 Cr ahead of our estimate. We are expecting slower execution because of delay in quarry approval on account of unstable political situation in state of Tamil Nadu. • For the full year FY17 KNRCON revenue clocked by 71% YoY to Rs. 1541 Cr as compared to Rs. 903 Cr a year back. Strong ordering momentum in FY16 has helped to post robust revenue growth. • EBITDA during the quarter grew by 65% YoY to Rs. 72 Cr as against Rs. 43 Cr in same period last year. For the full year EBITDA stood at Rs. 230 Cr compared to 153 Cr. • However, PAT during the Q4FY17 down by 7% YoY to Rs. 53 Cr compared to Rs.57 Cr on account of lower tax reversal. In Q4FY16 KNRCON has tax reversal of 14 Cr on back of 80IA benefit. • During the quarter KNRCON does not witness any new order and order book at the end of the Q4FY17 stand at Rs. 3762 Cr. Management expects to receive new orders in Q2FY18 and Q3FY18. Healthy order book, 2.4x of TTM Order Book Break Up 19 MARKET twitter | June’ 17

  20. Advances Performance YoY(+/-) Margin % 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 9.20 Gross Margin 76.10 73.80 79.20 78.90 79.80 3.70 0.90 69.1 78.3 -2.00 EBITDA Margin 14.50 14.40 15.00 15.10 15.00 0.50 -0.10 16.9 14.9 PAT Margin 19.40 9.90 11.70 8.00 11.00 -8.40 3.00 17.8 10.2 -7.60 EBITDA and PAT margin in line with Our estimate • EBITDA margin has improved by 50 bps to 15% in Q4FY17 v/s 14.5% in same period last year on account of operational efficiency. • KNR has reported PAT margin of 11% in line with our expectation. PAT margin down by 840 bps YoY on account of tax reversal of Rs. 18 Cr in Q4FY16. • For the full year FY17 KNRCON’s EBITDA and PAT margins are in line with our expectation. • Management exepects to maintain EBITDA margin in range of 13.5-14.5% going ahead. Robust Revenue growth Strong Debt to Equity EBITDA (cr) and EBITDA margin trend PAT (cr) and PAT margin trend 20 MARKET twitter | June’ 17

  21. Investment Argument • Healthy Order Book :- Order book at the end of the FY17 stands at Rs. 3762 Cr with 2.4x of TTM, which provides revenue visibilities of more than two years. Strong growth in orders inflow in FY16 resulted into robust revenue growth of 71% in FY17. Management is expecting to receive Rs. 2000 Cr of new orders which gives us confidence of healthy revenue growth in FY19. Smooth progress of current order book ensures the 14% revenue growth in FY18 and management expects to complete couple of projects ahead of its schedule time line. • Strong Debt to Equity :- Superior execution capabilities have resulted into combatable Debt to Equity position. Now, management is ready to take up HAM projects and expects to win Rs.1000 Cr of new orders in FY18 via HAM mode. KNRCON’s strong debt to equity position will help to leverage its balance sheet and help to take up HAM projects in bigger way. Currently KNRCON’s debt to equity is 0.15x and it will remain in the same range going ahead(without considering HAM projects). Concall Highlight • HKNManagement has guided for Rs.1700-1800 Cr and Rs.2000 Cr of top line in FY18 and FY19 respectively • Company target to win new projects worth of Rs.2000 Cr. Management expect order inflow from Q2FY18. Out of which Rs.1000 Cr of orders from HAM projects. • Unexecuted portion of Arcot Villupuram project is 30%. • Tax Rate in FY18 will be around 7-8% and 15% in FY19. • FY20 will attract full tax rate. • KNR has received appointment date on Hubli Hospet road project in Karnataka and work has started from 15th March 20147. • Gross debt as on 31st March 2017 on standalone books is Rs.144 Cr and out of this 120 Cr loan from promoter of the company. • Rs. 100 Cr of capex is requires in FY18 and FY19 each. • Except Chittagong ORR project in Bangladesh project all other projects are progressing well. • Unexecuted portion of Chittagong ORR project is around 200 Cr (KNR Share) • Management expects to complete Thiruvananthapuram Bypass in January 2018 and Madurai Ramanathpuram ij April 2018 • KNR has received Rs. 21 cr of arbitration award in Q1FY18. Which will directly contributes 75-80% in EBITDA. • Till date KNR has invested equity of Rs. 397 Cr in Walayar BOT and Rs. 52 Cr in Muzaffarpur Barauni BOT toll project. Need further equity of Rs. 25 Cr in Muzaffarpur project. • Toll collection on Muzaffarpur will go upto 17 lakh/day post 100% CoD. • Other Income will be in range of 25-30 Cr going forward. • KNR has signed share purchase agreement for sell of equity stake in PKIL and PKHIL, presently KNR waiting for NHAI approval and expects to complete transaction in a month time period. View and Valuation KNRCON has outpaced all the infrastructure development players in terms of revenue growth in FY17. KNRCON has clocked 71% YoY top line growth in FY17 on account of strong execution of orders received in previous year. All the projects are progressing well, which gives us confidence of better revenue growth in FY18. Earlier Management is reluctant to take HAM projects but considering the current market scenario, management is open to take HAM (Hybrid annuity model) projects and expectation of healthy order flow from it with strong debt to equity position will help to grow KNRCON going forward. We expect 14% YoY revenue growth in FY18 and 11% EPS growth. Currently, stock is trading at 12.3x EV/EBITDA of FY18. We have positive stance on the stock and we recommend “BUY” with target price 230. 21 MARKET twitter | June’ 17

  22. LT KNRCON has clocked 63% YoY revenue growth to Rs. 482 Cr ahead of our estimate. Strong execution of orders received in previous year has helped to post robust growth in FY17 Key Highlights of the report Company Data CMP 1736 • KInfrastructure, Financial Services and and IT business lead to revenue growth of 12% YoY in Q4FY17. Target Price 1860 Previous Target Price 1780 • Higher provision at L&T Financial Holding and impairment of sea woods and Hazira yard depressed EBITDA. EBITDA margin down by 190 bps YoY in Q4FY17. Upside 7% 52wk Range H/L 1834/1295 • Strong opening order book ensures healthy revenue growth on 10- 11% in FY18 with improvement in EBITDA margin. Mkt Capital (Rs Cr) 164,895 Av. Volume (,000) 60 • Management expect 10-15% growth in order inflow in FY18. Av. Volume (,000) 80 • Considering the strong revenue growth along with margin and working capital improvement we recommend “HOLD” with revised target price of 1860. RoE will maintain over 13% Financials/Valuation FY15 FY16 FY17 FY18E FY19E Net Sales 92,005 101,975 110,011 121,562 135,069 EBITDA 11,336 10,465 11,075 12,642 14,047 EBIT 8,713 8,678 8,705 10,418 11,575 PAT 4,765 4,547 6,485 6,771 7,523 EPS (Rs) 51 49 70 73 81 EPS growth (%) -3% -5% 42% 4% 11% ROE (%) 11.6% 10.3% 14.7% 13.1% 13.4% ROCE (%) 7.1% 6.4% 7.2% 7.8% 8.3% Share Holding Pattern % BV 440 473 474 538 553 4QFY17 3QFY17 2QFY17 P/B (X) 3.9 2.6 3.3 3.3 3.2 Promoters - - - P/E (x) 33.5 24.9 22.4 24.3 21.9 Public 100.0 100.0 100.0 Recent Development Total 100.0 100.0 100.0 Others 18.9 19.7 20.1 • The construction arm of L&T has secured orders worth of 5146 Cr across various business segments on 30th May 2017. These orders are over and above of 2613 bn of order book at the end of the year. Stock Performance % 1Mn 3Mn 1Yr • Power Transmission & Distribution segment has secured major orders worth of 2780 Cr from domestic and international markets. Absolute 1.1 20.2 19.8 Rel.to Nifty (2.4) 11.8 1.8 • Another big order of 1292 Cr from Government of Gujarat for EPC work for Sauni Yojana link 2 package. • L&T has secured small orders of 221 Cr in smart world & communication, 534 Cr in B&F, 319 Cr in Metallurgical and material and rest from the ongoing jobs. • Board of directors has approved issue of bonus share to the equity share holders in the ratio of 1:2, which is the subject of shareholders approval. 22 MARKET twitter | June’ 17

  23. Quarterly Performance Financials 4QFY16 1QFY16 2QFY17 3QFY17 Q4FY17 YoY % QoQ% FY16 FY17 YoY % Sales 32,876 21,719 24,924 26,018 36,828 12% 42% Other Operating Income - 155 98 269 - Net Sales 32,876 21,874 25,022 26,287 36,828 12% 40% 1,020 1,100 8% Other Income 145 302 470 257 399 175% 56% 9 14 55% COGS 12,539 7,576 9,082 9,495 13,101 4% 38% 366 388 6% Finance cost of Fin. Services 3,429 3,420 3,437 3,497 3,500 2% 0% 50 54 8% Employee Expenses 1,341 1,322 1,355 1,332 1,340 0% 1% 133 139 4% Sub contracting 6,497 3,562 4,879 5,148 8,346 28% 62% 208 226 9% Other Mfg. Con.Exp. 3,038 2,515 2,521 2,640 3,807 25% 44% 100 113 13% Other Exp. 1,535 1,574 1,452 1,652 2,398 56% 45% 58 70 22% Total Expenditure 28,381 19,969 22,725 23,764 32,492 14% 37% 915 989 8% EBITDA 4,495 1,905 2,297 2,523 4,336 -4% 72% 105 111 6% EBITDA M% 13.7 8.7 9.2 9.6 11.8 -14% 23% 10.3 10.1 -2% Depreciation 424 465 460 722 723 70% 0% 18 24 33% EBIT 4,070 1,440 1,837 1,800 3,613 -11% 101% 87 87 0% Intreset 439 338 340 379 297 -32% -22% 17 13 -19% Exceptional Item (49) - (402) - 281 1 1 28% PBT 3,776 1,405 1,967 1,678 3,716 -2% 121% 80 89 11% Tax 1,009 549 681 440 337 -67% -23% 25 20 -19% PAT 2,590 494 1,513 812 3,405 31% 319% 45 65 43% Higher provision at L&T Finance Holding and Impairment depressed EBITDA Total consolidated sales in Q4FY17 up by 12% YoY to 36828 Cr on back of strong growth in Infrastructure ( 9% YoY), Financial Services (11% YoY) and IT business (8% YoY) LT has reported EBITDA of 4336 Cr down by 3.5% YoY. EBITDA was impacted due by 630 Cr of provision in L&T Finance holding and 240 Cr of impairment in seawoods and Hazira Yard. EBITDA margin during the quarter stood at the 11.8%, down 190 bps YoY. However, PAT has grown by 29.5% YoY to 3405 Cr as compared to 2590 Cr a year back. Higher other income and lower tax has helped to post 8.2% PAT margin as against 7.1% (up by 110 bps). Analyst Meet Highlights • • • • • • • • • • • • • Management targeting 12% Revenue growth in FY18 Order inflow during the Q4FY17 was 47300 Cr and 14300 Cr in FY17. Management expects 12-15% growth in FY18 EBITDA margin will improve by 25 bps in FY18 Working capital improved from 23% of sales at the start of the year to 19% of sales at the end of Q4FY17 LT will focus submarine building through strategic partnership LT looking to sales some of the assets to improve RoCE. Companies aim is to grow at a 12-15% CAGR to achieve 2 tn sales by 2021 Mgt. expects to pick up in Power business after two years once manufacturing picks up Sharp margin improvement in Hydrocarbon business from -1.7% to 9.8% in Q4FY17 Heavy Eng. margin improved to 27.6% from 2.5% in Q4FY17 based on operational efficiency and closure of legacy projects Order book at the end of the year stands at 261300 Cr (5% Up YoY) post cancellation of 18000 Cr of slow moving orders. Recently LT has secured order worth of 5146 Cr across various vertical. • 23 MARKET twitter | June’ 17

  24. Order Book Break Up Order Book 4QFY16 1QFY16 2QFY17 3QFY17 Q4FY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY(+/-) Infrastructure 1,875 1,906 1,863 1,940 1,934 3% 0% 1,875 1,934 3% Power 200 180 176 155 131 -35% -16% 200 131 -35% Metallurgical 100 - - - - 100 - Heavy Engineering 75 77 76 78 131 74% 68% 75 131 74% E&A 25 26 25 26 26 5% 1% 25 26 5% Hydrocarbon 150 206 201 207 261 74% 26% 150 261 74% Others 75 180 176 181 131 74% -28% 75 131 74% Total 2,500 2,575 2,518 2,586 2,613 5% 1% 2,500 2,613 5% Strong Order Book led by Hydrocarbon and Heavy Eng • LT ends the FY17 with orders of 2613 bn in hands, which is up by 5% YoY. Strong order inflow in Hydrocarbon and Heavy Engineering helped to grow order book in FY17 • Order inflow is up by 9% and 4% YoY in Q4FY17 and FY17 respectively. Order inflow in Hydrocarbon and Heavy Engineering increased 2x and 1.45x respectively in FY17. • Order inflow in Infrastructure segment remained depressed during FY17. Order inflow was down by 5% YoY to 726 bn as compared to 767 bn a year ago. • Strong Order Book : Order book at the end of the FY17 stands at 2613 bn, which is the 2.3x of TTM revenue. Strong order book at the end of the year provides healthy revenue visibilities going ahead. Management has guided for the 10-12% revenue growth in FY18 with 25 bps improvement in EBITDA margin and it will be achievable considering the healthy order book at the start of the year. LT expects 10-15% order inflow in FY18. • Working Capital Improvement : Management’s continuous focus on working capital management has resulted into lower interest outgo during the year. Interest cost has come down by 19% YoY despite growth in top line on consolidated basis. Working capital has come down from 23% to 19% of sales in FY17 and management has guided for 18% in FY18. View and Valuation LT’s continuous focus on improving RoE and its strategic five years plan to grow at 12-15% CAGR to achieve 2 trillion sales by 2021 with improvement in EBITDA margin. Strong order book at the opening of the year ensures the healthy revenue growth going ahead. We expect 10-11% revenue growth in FY18 and FY19 considering the current order book and healthy order inflow. EPS will grow 4% and 11% in FY18 and FY19 respectively. We expect RoE to remain over 13% going ahead. Considering the strong revenue growth along with margin and working capital improvement we recommend “HOLD” with revised target price of 1860. 24 MARKET twitter | June’ 17

  25. SHREECEM SHREECEM to enter eastern India with two projects worth Rs 500 Cr each. The company has targeted to reach a 33.6 MTPA capacity.... Key Highlights of the report Company Data CMP 17305 • SHREECEM to enter eastern India with two projects worth Rs 500 Cr each. The company has targeted to reach a 33.6 MTPA capacity from the current 23.6 MTPA by the end of 2019. Target Price 19805 Previous Target Price • Volume increased 11% YoY & 21% QoQ to 5.9MT, on the back of capacity ramp ups in eastern India. Realization improve 14% YoY & 2% QoQ with increase in prices in its focus market, North. Upside 14% 52wk Range H/L 20560/12555 Mkt Capital (Rs Cr) 62,637 • EBITDA for the quarter fell 4% YoY due to 42% spurt in freight & forwarding expenses. Spurt in freight & forwarding expenses was mainly due to higher freight cost for servicing the Bihar market as its unit in that state was shut for 15 days. Av. Volume (,000) 18 Av. Volume (,000) 2224 • Deepening its rich in eastern region and price improvement in North region will be a key positive for the company. Recommend BUY with TP of Rs 19805. Improving Assets Turnover Ratio Financials/Valuation FY14 FY15 FY16 FY17 FY18E Net Sales 5,887 6,454 5,514 8,429 10,406 EBITDA 1,390 1,317 1,407 2,367 2,845 EBIT 840 392 579 1,152 1,665 PAT 787 426 1,143 1,339 1,768 EPS (Rs) 226 122 328 384 505 ROE (%) 17% 8% 17% 17% 17% Share Holding Pattern % ROCE (%) 16% 7% 8% 14% 18% 4QFY17 3QFY17 2QFY17 BV/share 1,346 1,508 1,956 2,199 2,705 Promoters 64.8 64.8 64.8 P/B (X) 4.2 7.1 6.3 5.6 6.3 Public 35.2 35.2 35.2 EV/Ton (Cap-USD) 562 420 385 350 322 Total 100.0 100.0 100.0 P/E (x) 16.0 22.0 22.1 21.2 13.8 Others 9.6 8.7 9.7 Stock Performance % SHREECEM to enter eastern India with two projects worth Rs 500 Cr each 1Mn 3Mn 1Yr Absolute (9.0) 2.8 34.4 • Each new unit will have 2 MTPA capacity, limestone to be sourced from firm’s Chhattisgarh plant. Rel.to Nifty (11.6) (2.5) 16.6 • After North, SHREECEM is on the way to capture a large slice of the pie in the eastern part of the country. The company has taken 2 Greenfield projects, one in Raghunathpur region in West Bengal and the other near Cuttack in Odhisa. • The investment needed for these units is Rs 500 Cr. The company has already acquired 120-130 acres of land in West Bengal and the deal to acquire 150 acres in Odhisa is underway. • Commissioning of these units, expected to take place in late 2018, will help the company take up its presence from one state to three in East India. 25 MARKET twitter | June’ 17

  26. Quarterly Performance Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY % 2,249 2,468 2,254 2,091 2,683 19% 28% Net Sales 6,190 9,497 53% Other Income 475 97 123 136 151 -68% 11% 673 508 -25% COGS 154 178 88 144 216 40% 50% 453 627 39% Employee Cost 127 133 138 131 135 6% 3% 370 537 45% Other Expenses 380 388 361 379 451 19% 19% 1,020 1,579 55% EBITDA 532 731 656 469 511 -4% 9% 1,407 2,367 68% Depreciation 306 154 432 318 311 2% -2% 828 1,215 47% Interest 29 28 29 41 31 9% -23% 76 129 71% PBT 672 646 318 246 320 -52% 30% 1,176 1,531 30% Tax 9 139 26 10 15 67% 47% 33 192 479% PAT 669 508 290 232 309 -54% 33% 1,143 1,339 17% • The company reported Net sales of Rs 2683 Cr, up 19% YoY and 28% QoQ driven by 11% YoY volume growth and 14% YoY realization growth. Volume increased 11% YoY & 21% QoQ to 5.9MT, on the back of capacity ramp ups in eastern India. Realization improve 14% YoY & 2% QoQ due to increase in prices in its focus market, North. Cement revenue increased 25% YoY to Rs 2539 Cr in 4QFY17 as compared to Rs 2036 Cr in 4QFY16 whereas Power revenue decline 3% YoY to Rs 412 Cr as compared to Rs 423 Cr in 4QFY16. EBITDA for the quarter fell 4% YoY due to 42% spurt in freight & forwarding expenses. Spurt in freight & forwarding expenses was mainly due to higher freight cost for servicing the Bihar market as its unit in that state was shut for 15 days, higher freight cost in eastern units due to lower availability of rakes and due to increase in diesel cost. PAT for the quarter declined by 54% YoY to Rs 309 Cr due to lower other income but grew 33% QoQ. Other income YoY declined by 68% due to higher bas effect. (Change in accounting as per IND AS), however, Other income grew by 11% QoQ. • • • • 11% YoY volume growth led by capacity ramp up in East. 14% YoY improvement in Realization due to price hike in North. 26 MARKET twitter | June’ 17

  27. Operating Margins impacted by higher costs YoY(+/-) Margin % 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 1% Gross Margin 93.1% 92.8% 96.1% 93.1% 91.9% -1% -1% 92% 93% 3% EBITDA Margin 23.7% 29.6% 29.1% 22.4% 19.0% -5% -3% 26% 28% PAT Margin 29.8% 20.6% 12.9% 11.1% 11.5% -18% 0% 21% 16% -5% Margins was impacted due to higher Freight costs and Power & Fuel costs. Freight cost/tonne increased 20% QoQ mainly due to due to higher freight cost for servicing the Bihar market as its unit in that state was shut for 15 days. Freight cost for the quarter stood Rs 1023 per tonne as compared to Rs 856 per tonne in the previous quarter. Petcoke prices have also increased from $88 per tonne in the month of Mar 17 to $95 per tonne in Apr 17. Further, any increase in Petcoke price can put cost pressure on the company. Power & Fuel cost for the quarter stood Rs 776 per tonne as compared to Rs 609 per tonne in the previous quarter. Capacity Expansion Plan : Focus in Eastern India SHREECEM plans to expand from its Bihar base across the east, SHREECEM has undertaken construction of two Greenfield projects; one in Raghunathpur region in West Bengal and the other near Cuttack in Odisha with 2 MTPA capacity. Recently, in Bihar it scaled up its Portland Slag Cement plant to 3.6 mtpa from the previous 2 MTPA. As per the Mgt of the company, the eastern part of the country is immensely underserved by the cement companies and has a 30% growth potential over the immediate next few years. Alongwith investment of Rs 500Cr in above new units, It is investing another Rs 700 crore to construct 2 new units near Raipur in Chattisgarh which will take up the current capacity from 2.6 mtpa to 5.4 mtpa. Another plant in Karnataka is underway. The total capital investment in FY18 will be Rs 2,000 crore. As part of its expansion plans, SHREECEM has targeted to reach a 33.6 MTPA capacity from the current 23.6 MTPA by the end of 2019. Management Takeaways • Average cement prices for FY18 would move higher by 3-4% less than inflation but in the short term, they could move up or down dramatically. The prices would range in Rs 250-300 per bag but it differs from city to city. • FY18 EBITDA/tonne would beat FY17 EBITDA/tonne because there would be 2-3% growth in EBITDA per tonne. • Lower EBITDA margins in the East India led to a drag on EBITDA per tonne. • FY18 volume growth will surely be similar to FY17 levels of around 11%. • Power Business : The company is not very bullish on this segment because power capacity is a surplus in the country and rates are coming down. So only expect to maintain power margins. • For 1QFY18, expected volume is 5.5 MTPA. View & Valuation Aggressive capacity expansion plan will help company in gaining market share (targeted to reach a 33.6 MTPA capacity by the end of 2019). Deepening its rich in eastern region and price improvement in North region will be a key positive for the company. Going ahead, improvement in Cement prices will help in absorbing spurt in operating costs. Better cost efficiencies, lower capital cost for expansion and planned capacity addition in next few years without leveraging its Balance sheet makes SHREECEM one of the best Company in our universe. We remain convinced on cash generating abilities of the company. Thus, we recommend “BUY” rating on the stock with the TP of Rs 19805. 27 MARKET twitter | June’ 17

  28. Margin contraction led by higher costs. PAT Margin remain flat during the quarter. Higher freight cost for servicing the Bihar market due to shut down of unit. 15% YoY increase in Power & Fuel Cost due to spurt in Petcoke prices. Increasing Petcoke price can put pressure on the margins going forward. 28 MARKET twitter | June’ 17

  29. STATE BANK OF INDIA Despite of challenging environment SBIN has been able to report the improved set of numbers in all parameters Key Highlights of the report Company Data CMP 308 • Despite of challenging environment SBIN has been able to report the improved set of numbers in all parameters. Target Price 340 Previous Target Price • Loan growth of 7.8% vs system growth of 5.1% signifies the continuous gain in market share. Upside 10% 52wk Range H/L • With the healthy PCR at 66%, relatively lower GNPA of 6.90% and healthy capitalization at 13.1%, SBIN remains one of the best large lenders among PSBs. Mkt Capital (Rs Cr) 315/166 Av. Volume (,000) 249905 • With the bulk of stressed assets recognised, assets quality is on improving trend; however we have cautious view on merged entity. Av. Volume (,000) 2224 • Strong liability franchise of CASA at 44% level will support the margins where as strong network coverage augurs well for the business growth. SBIN is trading at its low end of P/B • SBIN is currently trading at 1.3x P/B FY19, we maintain our target price of Rs 340 and recommend BUY. Financials/Valuation FY15 FY16 FY17 FY18E FY19E NII 55015 56882 61859 68045 74849 PPP 38913 43258 50847 52545 56849 PAT 13102 9951 10484 11580 17721 NIM % 3.1 3.0 2.8 2.9 3.0 Share Holding Pattern % EPS (Rs) 17.5 12.8 13.1 14.5 22.2 4QFY17 3QFY17 2QFY17 EPS growth (%) 20.3 -27.0 2.6 10.5 53.0 Promoters 62.2 62.2 61.2 ROE (%) 11.0 7.2 6.8 7.0 9.2 Public 18.8 19.7 19.6 ROA (%) 0.7 0.6 0.4 0.4 0.5 Total 9.5 9.4 9.5 BV 165 176 190 207 230 Others 9.6 8.7 9.7 P/B (X) 1.7 1.6 1.5 1.5 1.3 P/E (x) 16.0 22.0 22.1 21.2 13.8 Stock Performance % 1Mn 1Yr YTD Absolute 9.2 71.0 26.5 Recent Development Rel.to Nifty 3.4 19.8 15.3 • SBI posted the healthy set of performance in 4Q FY17. PAT grew by 123% backed by healthy NII growth of 18% YoY. • Assets quality of SBI has shown the sign of improvement with GNPA ratio at 6.90% against 7.23% QoQ whereas NNPA improved to 3.71% from 4.24% on sequential basis. • Gross advances grew by 7.8% YoY which was more than the credit growth of 5.1% of the industry. • CASA increased by 24% YoY backed by healthy growth in saving deposits which grew by 27.8%. • Merged entity will be come under the list of top 50 banks globally with 2nd largest physical network presence. 29 MARKET twitter | June’ 17

  30. Quarterly Performance Financials 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY % QoQ% FY16 FY17 YoY % 42,831 41,594 42,319 43,926 47,393 10.6% 7.9% Interest Inc. 163,685 175,231 7.1% Interest Exp. 27,541 27,281 27,881 29,174 29,322 6.5% 0.5% 106,803 113,658 6.4% NII 15,290 14,313 14,438 14,752 18,071 18.2% 22.5% 56,882 61,573 8.2% Other Income 10,696 7,335 8,424 9,662 10,328 -3.4% 6.9% 28,158 35,749 27.0% Total Income 25,986 21,648 22,862 24,414 28,398 9.3% 16.3% 85,040 97,321 14.4% Ope Exp. 11,794 10,594 11,637 11,870 12,372 4.9% 4.2% 41,782 46,473 11.2% PPP 14,191 11,054 11,225 12,543 16,026 12.9% 27.8% 43,258 50,849 17.5% Provisions 13,174 7,413 7,897 8,943 11,740 -10.9% 31.3% 29,484 35,993 22.1% PBT 1,017 3,641 3,328 3,600 4,286 321.3% 19.0% 13,774 14,856 7.9% Tax (246) 1,120 789 990 1,472 -698.3% 48.6% 3,823 4,371 14.3% Net Profit 1,263 2,521 2,539 2,610 2,815 122.8% 7.8% 9,951 10,485 5.4% Healthy performance in tough environment • • SBI posted the healthy set of performance in 4Q FY17. PAT grew by 123% backed by healthy NII growth of 18% YoY. NII growth was backed by higher interest income in this quarter. Other income declined by 3% YoY but fee income registered the growth of 5% YoY. Operating expenses grew by only 5% YoY signifying stringent control over the cost, hence cost to income ratio improved by 182 bps YoY to 43.6%. Operating profit remained healthy at 13% YoY growth. Provisions declined by 11% YoY but remained elevated and grew by 3% QoQ. • • Profitability Metrix 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY % 45.4 48.9 50.9 48.6 43.6 -1.82 -5.06 C/I Ratio % 49.4 48.0 -1.44 Empl. Cost/ Tot. Exp. % 58.9 59.1 58.9 60.1 50.5 -8.41 -9.67 60.2 57.1 -3.04 Other Exp/Tot. Exp.% 41.1 40.9 41.1 39.9 49.5 8.41 9.67 39.8 42.9 3.04 Provision/PPP % 92.8 67.1 70.4 71.3 73.3 -19.6 1.96 65.4 70.5 5.09 Tax Rate % -24.2 30.8 23.7 27.5 34.3 58.51 6.82 17.9 29.1 11.20 Int Exp./Int Inc. (%) 64.3 65.6 65.9 66.4 61.9 -2.43 -4.55 65.3 64.9 -0.32 Other Inc./Net Inc. % 70.0 51.2 58.3 65.5 57.2 -12.80 -8.35 49.0 58.1 9.09 PAT/ Net Income % 4.9 11.6 11.1 10.7 9.9 5.05 -0.78 12.3 10.8 -1.43 PAT Growth % -66.2 -31.7 -34.6 134.0 122.8 189.0 -11.2 -23.1 47.6 70.76 NII Growth % (YoY) 3.9 4.2 1.3 8.4 18.2 14.25 9.77 3.4 8.0 4.61 Operating Profit Growth YoY % 14.4 20.1 9.3 30.7 12.9 -1.43 -17.76 11.1 18.3 7.21 RoE % 7.7 7.4 7.4 7.5 7.3 -0.49 -0.21 10.6 7.4 -3.21 RoA % 0.5 0.4 0.4 0.4 0.4 -0.05 0.00 0.6 0.4 -0.19 30 MARKET twitter | June’ 17

  31. Improving Assets Quality, Slippages remained flat • Assets quality of SBI has shown the sign of improvement with GNPA ratio at 6.90% against 7.23% QoQ whereas NNPA improved to 3.71% from 4.24% on sequential basis. • In absolute terms GNPA increased by only 4% QoQ. • Slippage number remained flat QoQ and slippage ratio improved to 2.58% against 2.70% a quarter back. Out of the total corporate slippages of Rs 7785 Cr, 70% slipped from watch list of the bank. • Watch list assets declined to 1.6% as on FY17 from 2.3% in FY16. However watch list of merged entity as disclosed by management is at Rs 32427 Cr which left us with cautious stance going forward. • Restructured advances increased to 6% QoQ. While other stress assets like SDR is at Rs 4281 Cr and S4A is Rs 5935 Cr. • Due to increased credit cost PCR increased to 65.95% against 62.87% QoQ. CASA growth remained healthy, Advances growth gaining market share • Gross advances grew by 7.8% YoY which was more than the credit growth of 5.1% of the industry, hence signifying gain in market share. • SBIN domestic market share in advances stands at 17.02% against 16.37% a year ago. • Growth in advances was led by both domestic as well as foreign advances growth of each more than 7%. • Advances growth was backed by 21% retail growth. Agri grew by 7.5%, SME grew by 3.4% and large corporate grew by 3.59%. • Retail advances growth was backed by 17% YoY growth in home loan, 21% YoY growth in auto loan and 34% YoY growth in personal loan. • The share of retail advances increased from 21.6% a year ago to 24.3% on FY17. • Management disclosed the 84% of the new corporate loans are PSUs or A & above A rated companies which remains one of the key positive points for the bank. • The stock of A and above A rated corporate loans has improved from 65% a year ago to 72% in FY17 signifying improving risk profile of the bank. • Deposits also remained healthy with the growth of 18% YoY backed by excess liquidity in the system due to demonetization drive. • Domestic deposit market share of SBIN has increased by 38 bps to 18.05% YoY. • CASA increased by 24% YoY backed by healthy growth in saving deposits which grew by 27.8% while current deposits grew by 8.4%. Domestic CASA ratio stands at 45.58% against 43.84% a year back. • Term deposits also registered the healthy growth of 15.65% YoY. Excluding One-offs other income grew by 11%. • Other income declined by 3% YoY due to non recognition of repatriation of surplus profits from overseas branches which was recognised in the corresponding quarter previous year. • Excluding all one offs item in both the quarter growth would have been around 11% YoY. • Fee income grew by 5% YoY. Under fee income cross sell was robust with growth of 44.5% YoY, however loan processing fee declined by 8.3% YoY. Trading income grew by 25% YoY, and dividend remained flat YoY at Rs 394 Cr while miscellaneous income declined by 40% YoY. 31 MARKET twitter | June’ 17

  32. Non-Performing Assets 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 YoY(+/-) QoQ(+/-) FY16 FY17 YoY % 98,173 101,541 105,783 108,172 112,343 14.4% 3.9% 98,173 112,343 14.4% GNPA (Rs) GNPA % 6.5 6.9 7.1 7.2 6.9 0.40 -0.33 6.5 6.9 0.40 NNPA (Rs) 55,807 57,421 60,013 61,430 58,277 4.4% -5.1% 55,807 58,277 4.4% NNPA % 3.8 4.1 4.2 4.2 3.7 -0.10 -0.53 3.8 3.7 -0.10 Slippages (Rs) 30,313 10,797 11,852 10,357 10,368 -65.8% 0.1% 64,198 43,374 -32.4% Restructured Ast.(Rs) 39,055 36,551 36,570 34,628 36,634 -6.2% 5.8% 39,055 36,634 -6.2% PCR % 60.7 61.6 62.1 62.9 66.0 5.26 3.08 60.7 66.0 5.26 Concall Highlights • Other income declined by 3% YoY due to non-recognition of repatriation of surplus profit from overseas branches which was recognised in 4Q FY16. • There still remains lot of growth potential in home and auto loan segment • 47% of the loans of associates are corporate and rest are retail. • Gross NPA of merged entity as on 1st April is 9.11%. NNPA is 5.19% and PCR is 61.53%. Total market share of advances and deposits is 21.16% and 23.07% respectively. • Credit cost will remain elevated in FY18 and it will be much better in FY19. • SBIN has Rs 1700 Cr of excess provision over the regulatory requirement. • There is no material divergence in assets quality as per RBI directory. • CRAR of merged entity is 12.85% and tier I is 10.05% as on 1st April 2017. • Government holding of merged entity is 60.75%. 32 MARKET twitter | June’ 17

  33. View and Valuation Despite of challenging environment SBIN has been able to report the improved set of numbers in all parameters. We like SBIN due to its improving risk profile of assets where the bank has shown 84% of the incremental loans towards A or above A rated companies. With the healthy capitalization ratio and divestments in non-core assets dilution risks remains on the lower side among its PSU peers. Strong liability franchise will continue to support the margins. Merged entity will further expand the network presence of the bank. However cost related to merger is expected to increase the opex in coming years. On standalone basis assets quality has shown impressive improvement in this tough environment. Watch list has reduced significantly in 4Q FY17. But the risk lies in increased stress assets of merged entity with GNPA ratio crossing 9% as on FY17. Credit cost is likely to remain elevated in FY18 but we expect much better scenario in terms of credit cost and slippages in FY19. However the risk also lies in the uncertainty of merged entity. We maintain of target price of Rs 340 and recommend BUY. Advances Performance 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1300026 1280127 1337153 1391258 1463700 1416485 1433554 Advances (Rs in Cr) 1447824 1571078 Adv. Growth YoY % 7.5 6.8 10.5 12.9 12.6 10.7 7.2 4.1 7.3 >> Growth QoQ % 5.5 -1.5 4.5 4.0 5.2 -3.2 1.2 1.0 8.5 Deposits Performance 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1576793 1613545 1634115 1671416 1730722 1782371 1858999 Deposits (Rs in Cr) 2040778 2044751 Growth YoY % 13.1 13.7 10.9 10.7 9.8 10.5 13.8 22.1 18.1 >> Growth QoQ % 4.4 2.3 1.3 2.3 3.5 3.0 4.3 9.8 0.2 CASA (Rs) 637760 635895 651430 674303 717332 726766 755805 908536 890409 >>CASA Growth YoY % 9.9 9.8 10.1 11.7 12.5 14.3 16.0 34.7 24.1 >> Growth QoQ % 5.7 -0.3 2.4 3.5 6.4 1.3 4.0 20.2 -2.0 CASA % 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 CA % 32.6 33.4 33.7 34.0 33.6 34.6 34.5 37.8 36.4 SA % 7.9 6.0 6.2 6.3 7.8 6.2 6.1 6.7 7.2 Credit Deposit Ratio 82.4 79.3 81.8 83.2 84.6 79.5 77.1 70.9 76.8 33 MARKET twitter | June’ 17

  34. Daily Investment Trend FII MF FII MF DATE DEBT DATE DEBT EQUITY DEBT EQUITY EQUITY DEBT EQUITY 1034.07 203.64 240.40 5146.80 26-Apr-17 325.98 (91.18) 743.27 (299.30) 1-Mar-17 2-Mar-17 (97.21) 210.15 (168.90) 3235.10 27-Apr-17 (64.29) (184.56) 258.35 1014.36 3-Mar-17 24.21 (773.46) (419.90) 5613.40 28-Apr-17 (22.80) 894.51 1326.72 (2041.42) 6-Mar-17 1427.91 44.57 7.20 206.70 2-May-17 (1113.53) (282.57) 561.70 4019.42 7-Mar-17 840.92 525.12 (848.00) 1363.00 3-May-17 (333.24) 560.18 393.69 895.32 8-Mar-17 888.73 205.91 (844.40) 2265.30 4-May-17 (93.47) 152.98 1216.45 721.46 9-Mar-17 3572.73 141.02 304.30 2553.80 5-May-17 (140.16) 746.94 316.65 331.04 10-Mar-17 1937.16 102.89 632.90 6099.00 8-May-17 (248.25) 1903.47 924.29 (1438.59) 14-Mar-17 344.01 337.24 (162.60) 3607.20 9-May-17 (581.35) 1040.04 189.54 (4603.03) 15-Mar-17 4309.49 (9.21) 235.40 2111.90 10-May-17 (227.91) (13.04) 16-Mar-17 1418.11 194.16 113.20 (364.70) 11-May-17 1364.92 116.21 (719.83) (4636.61) 17-Mar-17 1424.24 3768.43 (286.60) 931.40 12-May-17 1434.88 790.92 (293.96) 1393.92 20-Mar-17 1600.02 336.22 57.80 (8374.10) 15-May-17 916.05 1844.51 273.06 (2473.57) 21-Mar-17 618.91 1255.91 (94.60) (4281.80) 16-May-17 384.73 2463.62 182.78 (4035.45) 22-Mar-17 1617.31 5126.93 (299.20) 3889.20 17-May-17 1044.19 993.75 978.90 838.46 23-Mar-17 210.57 5045.10 (174.50) 3,251.70 18-May-17 1162.98 2051.85 1141.29 (1014.47) 24-Mar-17 1096.87 (537.56) 691.80 2140.20 19-May-17 359.72 559.31 709.41 (231.71) 27-Mar-17 583.62 914.73 (423.70) 5303.30 22-May-17 3172.65 678.89 415.85 5056.86 29-Mar-17 7351.95 6960.19 360.70 (28.00) 23-May-17 894.88 693.02 663.45 2093.32 30-Mar-17 680.06 1032.90 1586.70 4055.50 24-May-17 (366.08) 1649.41 726.51 2132.61 31-Mar-17 442.78 532.57 1859.60 1360.30 25-May-17 358.76 13.29 287.57 4255.58 3-Apr-17 3489.57 680.07 196.22 10714.33 26-May-17 789.20 (206.71) 770.89 3343.42 5-Apr-17 584.40 5415.22 (476.57) 6745.99 29-May-17 (316.10) 1927.66 449.40 1582.67 6-Apr-17 481.12 3386.73 90.10 3591.36 30-May-17 (807.60) 292.38 662.13 1701.81 7-Apr-17 440.37 1399.65 505.31 5048.33 31-May-17 (171.77) 1165.60 (264.18) (405.05) 10-Apr-17 (141.74) 745.94 435.18 4532.77 1-Jun-17 1131.84 760.60 463.82 5237.60 11-Apr-17 (635.79) 686.93 1141.90 3817.61 2-Jun-17 (450.81) 1159.25 588.16 2753.42 12-Apr-17 (724.78) (205.24) 1280.93 7644.19 5-Jun-17 113.37 2600.91 114.69 (552.86) 13-Apr-17 (495.60) 1422.23 511.09 6282.02 6-Jun-17 (111.74) 364.84 (51.67) 2502.92 17-Apr-17 (312.26) 1767.53 407.59 474.79 7-Jun-17 (3133.63) 787.74 328.49 1944.90 18-Apr-17 (67.27) 1480.04 803.62 1461.72 8-Jun-17 89.34 2723.99 977.47 993.41 19-Apr-17 (812.15) 253.24 986.18 2330.88 9-Jun-17 2072.65 3336.64 470.39 259.50 20-Apr-17 (564.82) 598.91 450.39 1240.31 12-Jun-17 (69.05) 3509.04 177.08 3543.74 21-Apr-17 (109.24) 126.44 1077.46 2636.06 13-Jun-17 (4.66) 116.87 329.00 815.11 24-Apr-17 1250.68 204.21 848.38 (1335.91) 14-Jun-17 4909.37 2212.08 238.23 145.34 25-Apr-17 (226.89) 1783.08 658.13 2074.81 15-Jun-17 86.11 763.94 34 MARKET twitter | June’ 17

  35. Nifty Constituents : Quarterly / Yearly Performance Nifty Heatmap in Last 3 months (As on 31st May 2017) ITC MARUTI 19.87% ICICIBANK 17.92% HINDUNILVR 17.03% HEROMOTOCO 16.25% BPCL 14.28% HDFCBANK 13.42% ACC 13.21% INFRATEL 12.49% LT 11.24% 11.0% EICHERMOT 11.13% KOTAKBANK 10.16% GRASIM 10.11% M&M 10.11% GAIL 9.83% ASIANPAINT 7.24% BHARTIARTL 6.14% POWERGRID 5.40% ULTRACEMCO 5.28% AXISBANK 4.74% BANKBARO- DA 2.95% TCS 4.72% TATASTEEL 4.56% HDFC 4.51% INDUSINDBK 3.90% WIPRO 3.84% HINDALCO 2.90% BOSCHLTD 2.58% TATAMOTORS 2.21% TATAMTRDVR 2.04% AMBUJACEM 1.94% AMBUJACEM 1.50% BAJAJ-AUTO 1.44% ADANIPORTS -0.18% HCLTECH -1.20% SBIN -1.74% NTPC -3.49% ZEEL -3.87% DRREDDY -4.12% ONGC -4.32% INFY -4.42% IDEA -6.81% YESBANK -7.46% COALINDIA -10.29% TATAPOWER -10.35% CIPLA -12.92% AUROPHARMA -14.97% TECHM -15.06% BHEL -15.14 LUPIN -19.67% SUNPHARMA -27.11 Nifty Heatmap in Last 1 Year ( As on 31st May 2017) ADAN- IPORTS 76.42% HINDALCO 90.69% MARUTI 73.27% EICHERMOT 53.82% TATASTEEL 50.95% SBIN 40.67% RELIANCE 39.97% POWERGRID 38.63% YESBANK 38.56% YESBANK 38.44% HEROMOTOCO 20.86% INDUSINDBK 34.26% ICICIBANK 33.44% ULTRACEMCO 30.02% KOTAKBANK 29.40% HDFC 26.84% HINDUNILVR 25.80% BANKBARODA 24.68% LT ASIANPAINT 16.89% 19.49% HCLTECH 16.82% ZEEL 16.13% BHEL 14.69% NTPC 11.91% GAIL 11.76% TATAPOWER 9.83% CIPLA 9.25% BAJAJ-AUTO 8.69% M&M 7.16% ACC 7.06% AMBUJA- CEM 5.63% BHARTIARTL 5.73% BOSCHLTD 4.43% TATAMOTORS 3.59% AXISBANK -0.22% TCS -0.89% WIPRO -1.82% INFRATEL -2.12% INFRATEL -8.46% COALINDIA -9.90% ITC -11.18% ONGC -16.01% DRREDDY -20.71% LUPIN -21.27% INFY -21.75% BPCL -24.26% AUROPHARMA -26.89% TECHM -27.82% IDEA -30.40% SUNPHARMA -34.24% GRASIM -73.49% Nifty stock sector wise heatmap Sector Wise Av. of 3 Month Return Av. of 12 Month Return Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Utilities 3.47% 0.40% 6.03% 6.80% 8.69% -11.17% 6.73% 1.17% 3.44% -1.50% 12.79% 16.22% 21.02% 47.93% 32.90% 27.22% 28.48% 24.92% -9.06% 41.37% -4.89% -1.61% 23.12% 35 MARKET twitter | June’ 17

  36. Forecasting prices of Nifty & Bank Nifty Technical Analysis with the help of Elliott Wave Technique /Principles Nifty Period View Starting strategy date Target Value Trailing Stop-Loss Remarks Very short term Bullish/ Trend 24.05.17 9800 Lower SL 9495 1st Target 9700 Meet Short term Bullish/ Trend 03.03.17 9800 2nd Rev Lower SL 9075 5th Tgt 9500 Meet Medium term Bullish/ Trend 26.12.16 10000 5th Rev Lower SL 8712 4th Tgt 9500 Meet Long term Bullish/ Trend 29.02.16 10000 5th Rev Lower SL 8537 2nd Tgt 9500 Meet The Nifty has seen a continuous rise from 24th May and move towards our 2nd very short term target of 9800. Very short term rise continue follow lower SL of 9495. After Completion of Wave – c of Cycle Degree Wave 2. New Wave -3 or wave B start from 6825.80. Subordinate wave 1 of Wave 3 or wave B most likely to continue. Chart 2: Nifty showing Leading Diagonal at Wave ‘C’ of Cycle Degree Wave – 2 & showing Break out channel of leading Diagonal at Wave A of Wave ‘C’ of Cycle Degree Wave – 2 Bank Nifty Period View Starting strategy date Target Value Trailing Stop-Loss Remarks Very short term Bullish/ Trend 24.05.17 23900 3rd Rev Lower SL 23092 2nd Target 23500 Meet Short term Bullish/ Trend 21.04.17 24200 4th Rev Lower SL 21396 5th Target 23500 Meet Medium term Bullish/ Trend 16.02.17 24500 3rd Rev Lower SL 20753 4th Target 23500 Meet Long term Bullish/ Trend 29.02.16 24500 5th Rev Lower SL 20088 3rd Target 23500 Meet Chart 3: Bank Nifty showing rising trend continue, we maintain buy on every de- cline, follow lower SL 23092 for the price target of 23900. 36 MARKET twitter | June’ 17

  37. Economic Calender & Important Events Date India Europe US MPC Official Bank Rate Votes , Monetary Policy Summary, Official Bank Rate, Asset Purchase Facil- ity, MPC Asset Purchase Facility Votes. Unemployment Claims, Empire State Manufacturing Index, Import Prices m/m, Philly Fed Manufacturing Index, Capacity Utilization Rate, Industrial Production m/m. 15-Jun-2017 Building Permits, Housing Starts , Prelim UoM Consumer Sentiment , Labor Market Conditions Index m/m , Prelim UoM Inflation Expectations , FOMC Member Kaplan Speaks. Final CPI y/y, German WPI m/m , ECOFIN Meetings BOE Quarterly Bulletin , 16-Jun-2017 CBI Industrial Order Expectations , German Buba Monthly Report , Consumer Confidence. 19-Jun-2017 German PPI m/m , Current Account , Inflation Report Hearings . 20-Jun-2017 Current Account , Fed Monetary Policy Report . Public Sector Net Borrowing , German 30-y Bond Auction. 21-Jun-2017 Crude Oil Inventories , Existing Home Sales , CPI m/m , Belgian NBB Business Climate , Com- mon CPI y/y , 23-Jun-2017 New Home Sales. Core Durable Goods Orders m/m , Durable Goods Orders m/m. 26-Jun-2017 German Ifo Business Climate French Prelim CPI m/m , BBA Mortgage Approvals , Italian 10-y Bond Auction , CBI Realized Sales. S&P/CS Composite-20 HPI y/y , CB Consumer Confi- dence , Richmond Manufacturing Index. 27-Jun-2017 German Prelim CPI m/m , French Consumer Spending m/m , Spanish Flash CPI y/y , M3 Money Supply y/y , Private Loans y/y. Goods Trade Balance , Prelim Wholesale Inventories m/m , Pending Home Sales m/m , Crude Oil Inventories , Bank Stress Test Results. 28-Jun-2017 German Retail Sales m/m , German Import Prices m/m , German Unemployment Change ,Current Account , Final GDP q/q , Index of Services 3m/3m , Revised Business Investment q/q , CPI Flash Estimate y/y , Core CPI Flash Estimate y/y , Italian Prelim CPI m/m. Core PCE Price Index m/m, Personal Spending m/m , Personal Income m/m, Chicago PMI , Revised UoM Con- sumer Sentiment, Revised UoM Inflation Expectations. 30-Jun-2017 Spanish Unemployment Change , Italian Manufac- turing PMI, French Final Manufacturing PMI, Ger- man Final Manufacturing PMI, Final Manufacturing PMI, Manufacturing PMI, Unemployment Rate, Spanish 10-y Bond Auction, French 10-y Bond Auc- tion, BOE Financial Stability Report. Auto no, Nik- kei Manufac- turing PMI. Final Manufacturing PMI , ISM Manufacturing PMI, Con- struction Spending m/m, ISM Manufacturing Prices , Total Vehicle Sales. 3-Jul-2017 Construction PMI, PPI m/m, BRC Shop Price Index y/y, 4-Jul-2017 Spanish Services PMI , Italian Services PMI , French Final Services PMI , German Final Services PMI , Fi- nal Services PMI , Services PMI, 10-y Bond Auction. ADP Non-Farm Employment Change , Final Services PMI, ISM Non-Manufacturing PMI, Factory Orders m/m , Crude Oil Inventories, FOMC Meeting Minutes. Nikkei Servic- es PMI 5-Jul-2017 German Factory Orders m/m, French Trade Bal- ance, ECB Monetary Policy Meeting Accounts, Housing Equity Withdrawal q/q Challenger Job Cuts y/y , Unemployment Claims, Trade Balance, Natural Gas Storage. 6-Jul-2017 German Final CPI m/m, German Trade Balance, French Industrial Production m/m, Italian Industrial Production m/m, JOLTS Job Openings , Labor Market Conditions Index m/m, Consumer Credit m/m, BRC Retail Sales Monitor y/y, RICS House Price Balance. 10-Jul-2017 Final Wholesale Inventories m/m, NFIB Small Business Index, Federal Budget Balance, TIC Long-Term Purchases. 11-Jul-2017 CB Leading Index m/m. French Final CPI m/m, Average Earnings Index 3m/y, Claimant Count Change, Unemployment Rate, Industrial Production m/m, German 10-y Bond Auction 12-Jul-2017 IIP Data Crude Oil Inventories , 10-y Bond Auction, Beige Book. Italian Trade Balance , BOE Credit Conditions Survey PPI m/m , Unemployment Claims, Core PPI m/m, Natural Gas Storage, 30-y Bond Auction. 13-Jul-2017 CPI m/m , Core CPI m/m, Core Retail Sales m/m, Retail Sales m/m, Capacity Utilization Rate, Industrial Production m/m, Prelim UoM Consumer SentimentBusiness Invento- ries m/m, Prelim UoM Inflation Expectations. 14-Jul-2017 WPI Data Trade Balance , Manufacturing Sales m/m. 37 MARKET twitter | June’ 17

  38. Index Return Return % Index 1 month 3 month 1 year 5 year Sensex 4.10 8.36 16.79 92.04 S& P CNX Nifty 3.41 8.35 17.91 95.39 C N X Midcap -3.67 7.17 32.91 126.11 EW Series Of Indices All Share 0.63 6.84 24.44 99.90 Hi Cap 2.07 5.84 19.53 79.35 Mid Cap -2.25 8.96 33.34 139.04 Small Cap -1.85 10.20 40.67 191.91 Micro Cap -3.66 6.06 96.27 395.53 EW Sector Indices Energy -2.49 4.69 47.93 80.62 Materials -1.55 1.84 32.91 55.86 Industrials -1.60 14.36 27.23 87.51 Consumer Discretionary 2.66 11.37 28.48 195.61 Consumer Staples 6.45 14.51 24.93 128.14 Health Care -9.13 -11.01 -9.06 117.31 Financials 1.34 12.68 41.38 131.28 Information Technology 7.86 1.27 -4.89 88.47 Telecom 0.80 -0.20 -1.62 32.55 Utilities -3.04 1.95 23.13 32.10 EW Style Indices Top- 500 Growth -1.96 3.13 21.20 81.76 Top- 500 Blend 2.09 8.36 26.56 102.70 Top- 500 Value 0.34 6.64 16.88 64.55 Top- 1000 Growth -5.60 6.32 41.92 198.83 Top- 1000 Blend -3.24 6.32 63.65 338.26 Top- 1000 Value -4.79 8.05 43.06 120.76 EW Thematic Indices EW India Consumer Opportunity Index 3.26 13.27 32.77 137.97 EW India Global Opportunity Index 0.91 0.00 2.16 80.61 EW India Global Cyclical Index -1.44 4.55 39.32 120.53 EW Industry Indices Airlines -1.04 27.64 6.26 44.11 Auto Components 1.42 15.19 40.46 285.06 Automobiles 7.04 12.80 27.37 207.71 Building Products 4.84 22.05 59.27 208.84 Capital Markets 0.19 18.29 65.88 211.01 Chemicals 1.20 12.77 32.96 204.56 Commercial Banks 2.10 11.87 34.19 103.34 Computers & Peripherals 0.00 0.00 58.88 389.25 Construction & Engineering -1.13 16.03 25.61 96.58 Construction Materials -0.87 12.25 35.73 179.22 Consumer Finance 3.46 19.18 51.14 559.55 Consumer Services 2.66 13.53 19.73 62.76 Containers & Packaging -6.54 11.82 50.98 207.03 Diversified Financial Services -0.65 12.14 53.10 164.80 Diversified Telecommunication Services 0.80 -0.20 -1.62 32.55 Electrical Equipment -3.32 9.63 21.98 77.24 Energy Equipment & Services -10.71 -11.61 23.34 -10.05 Food Products -1.73 7.47 23.23 108.60 Household & Personal Products 6.71 14.70 19.77 164.35 Household Durables -3.86 8.83 23.58 317.11 Logistics -4.82 12.29 1.45 149.56 Machinery -1.61 11.85 36.41 147.63 Marine -10.19 4.14 18.20 17.05 Media -6.33 2.65 24.97 158.69 Metals/Mining/Minerals -3.72 -10.33 30.26 -6.82 Oil, Gas & Consumable Fuels -2.47 4.74 48.01 81.04 Paper & Forest Products 0.68 3.46 40.68 189.76 Pharmaceuticals -9.32 -11.41 -10.35 114.63 Real Estate -1.19 24.92 34.89 41.08 Retailing -6.30 -2.24 15.39 90.88 Software & Services 7.92 1.21 -5.04 88.65 Textiles, Apparel & Luxury Goods -0.15 12.13 30.70 145.03 Tobacco 11.64 18.89 33.60 102.41 Trading Companies & Distributors 6.10 20.30 65.91 144.76 Transportation Infrastructure -0.35 8.16 55.51 102.21 Utilities Industry -3.04 1.95 23.13 32.10 38 MARKET twitter | June’ 17

  39. Corporate Quarterly Results - March 2017 As on 30th June 2017 For Mar’16 Quarter Annual For FY17/CY16 "Mkt Cap (Rs Cr) as on 15th June 17" "Mkt Cap (Rs Cr) as on 15th June 17" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" Company Name Company Name 3M India Ltd 15646 624 90 11 41 Bharti Infratel Ltd 69323 1605 597 13 (17) Aarti Industries Ltd 7482 834 74 12 7 Biocon Ltd 20304 919 128 -2 (62) ABB India Ltd 32024 2146 88 8 3 Birla Corporation Ltd 7108 932 59 6 (44) Abbott India Ltd 8958 731 42 8 (29) Blue Dart Express Ltd 9970 682 27 8 (37) ACC Ltd 30718 3663 211 25 (7) Blue Star Ltd 6409 1391 35 22 134 Adani Enterprises Ltd 14386 12195 219 50 72 Bombay Burmah Trad- 6410 61 5 12 (131) Adani Ports & Special 75103 2554 1164 37 27 Bosch Ltd 74547 2529 440 6 (10) Adani Power Ltd 10626 6352 (4961) -13 (523) Britannia Industries 42808 2230 211 6 6 Aditya Birla Fashion & 13808 1643 16 15 (115) Can Fin Homes Ltd 8369 361 71 22 49 Aditya Birla Nuvo Ltd 21738 4387 130 -31 (60) Canara Bank 21028 2708 214 14 (105) Aegis Logistics Ltd 6735 1268 30 190 (6) Capital First Ltd 7031 752 70 35 48 AIA Engineering Ltd 13385 645 115 11 (14) Carborundum Univer- 6344 593 44 20 10 Ajanta Pharma Ltd 13661 476 114 14 6 Castrol India Ltd 20312 882 179 3 4 Akzo Nobel India Ltd 8921 782 72 18 38 CEAT Ltd 7527 1458 66 5 (33) Alembic Pharmaceuti- 9849 741 94 20 3 Central Bank of India 18965 1715 (591) 10 Allahabad Bank 5206 1361 111 7 (119) Century Plyboards 6816 540 56 20 38 Alstom T&D India Ltd 8645 1196 46 27 71 Century Textiles & 12416 2261 37 5 (1701) Amara Raja Batteries 14349 1527 99 31 (9) CESC Ltd 11697 1572 295 7 19 Ambuja Cements Ltd 47109 6530 399 8 41 Chambal Fertilisers & 5126 1073 27 -24 (121) Apollo Hospitals 17916 1671 44 20 (42) Chennai Petroleum 5713 9486 171 64 (34) Apollo Tyres Ltd 13000 3589 127 21 (49) Cholamandalam 17036 1216 221 7 14 Arvind Ltd 9802 2493 111 8 0 Cipla Ltd 43206 3487 (62) 7 (33) Asahi India Glass Ltd 6166 597 51 4 114 Coal India Ltd 158537 24780 2716 19 (36) Ashok Leyland Ltd 27574 6618 476 11 (438) Colgate-Palmolive 29795 1177 143 8 (2) Asian Paints Ltd 109809 4487 480 24 11 Container Corporation 27695 1558 336 -2 10 Atul Ltd 7361 781 63 18 (2) Coromandel Interna- 12653 2302 (85) -23 (192) Aurobindo Pharma Ltd 38238 3641 721 -1 28 Corporation Bank 6171 934 160 -6 (131) Avanti Feeds Ltd 6192 699 84 51 169 CRISIL Ltd 13428 401 73 12 (7) Axis Bank Ltd 122147 4729 1225 4 (43) Crompton Greaves Ltd 5199 1710 (444) -8 378 Bajaj Auto Ltd 81282 5212 910 -1 (9) Cummins India Ltd 25491 1318 156 27 (7) Bajaj Corp Ltd 5549 204 53 -2 (3) Cyient Ltd 5696 972 77 19 17 Bajaj Finance Ltd 77367 2461 449 37 43 D B Corp Ltd 6878 517 65 2 2 Bajaj Finserv Ltd 66692 7043 535 12 3 Dabur India Ltd 50908 1915 333 -3 0 Bajaj Holdings & 23585 180 563 48 (0) Dalmia Bharat Ltd 21964 2504 208 33 81 Balkrishna Industries 14890 1003 137 15 2 DCB Bank Ltd 6457 221 53 30 (24) Bank of Baroda 38721 3582 155 8 (105) DCM Shriram Ltd 5924 1709 156 32 143 Bank of India 14560 3469 (1055) 9 (71) Dewan Housing 14216 2375 2218 21 1069 BASF India Ltd 7071 1394 45 21 (43) Dish TV India Ltd 8544 719 (28) -10 (106) Bata India Ltd 6931 591 36 9 27 Divis Laboratories Ltd 17047 1066 260 -3 (19) Bayer CropScience 16364 253 (52) -49 (417) DLF Ltd 34476 2225 143 -13 (168) Berger Paints India Ltd 24401 1254 106 23 13 Dr Reddys Laborato- 44371 3632 338 -3 175 Bharat Electronics Ltd 37871 4227 791 35 7 eClerx Services Ltd 5305 332 67 -3 (38) Bharat Financial Inclu- 9833 368 (235) 12 (378) Edelweiss Financial 17297 1929 170 30 40 Bharat Forge Ltd 27538 1205 208 22 26 Eicher Motors Ltd 78155 2128 412 39 15 Bharat Heavy Electri- 33899 10157 216 4 (71) EID Parry (India) Ltd 5784 3478 247 -21 7 Bharti Airtel Ltd 145805 21935 471 -12 (69) EIH Ltd 7399 416 51 -1 119 39 MARKET twitter | June’ 17

  40. "Mkt Cap (Rs Cr) as on 15th June 17" "Mkt Cap (Rs Cr) as on 15th June 17" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" Company Name Company Name Emami Ltd 25268 577 83 -4 4 Indiabulls Housing 47879 3225 841 44 24 Engineers India Ltd 10614 443 66 47 (15) Indiabulls Real Estate 9525 545 70 -26 113 Escorts Ltd 8697 1022 59 30 224 Indiabulls Ventures Ltd 6547 118 54 27 2181 Exide Industries Ltd 18857 1964 165 11 (6) Indian Bank 14745 1403 320 24 241 Fag Bearings India Ltd 7691 513 57 24 35 Indian Hotels Co Ltd 12589 1049 40 -2 (300) Federal Bank Ltd 20844 842 257 23 2401 Indian Oil Corpora- 196446 3721 28 85 Finolex Cables Ltd 7570 785 63 16 (25) Indian Overseas Bank 6530 1324 (647) 1 (31) Finolex Industries Ltd 7680 1016 123 10 50 Indraprastha Gas Ltd 14869 1002 134 13 23 Force Motors Ltd 5580 828 55 -7 (25) IndusInd Bank Ltd 89737 1667 752 31 21 Future Consumer 5511 533 (10) 27 (66) Info Edge (India) Ltd 12240 208 33 2 (42) Future Lifestyle Fash- 5995 969 19 16 263 Infosys Ltd 216028 17120 3603 3 0 GAIL (India) Ltd 63906 13674 260 18 (66) Ipca Laboratories Ltd 5953 666 44 6 35 Gillette India Ltd 15659 534 106 -3 31 IRB Infrastructure 8013 1657 206 8 36 GlaxoSmithkline Con- 22542 1042 176 2 8 ITC Ltd 372074 11126 2669 14 12 Glaxosmithkline 20859 763 113 11 6 J K Cements Ltd 7078 1241 91 31 30 Glenmark Pharmaceu- 18014 2424 184 10 23 Jet Airways (India) Ltd 6133 5449 37 13 (91) Godfrey Phillips India 6405 761 56 15 18 Jindal Steel & Power 11397 6756 (98) 42 (74) Godrej Consumer 63611 2380 390 12 212 JK Lakshmi Cement 5829 807 21 10 (19) Godrej Industries Ltd 21478 2026 95 -20 (18) JM Financial Ltd 9582 671 151 59 33 Godrej Properties Ltd 12095 465 62 19 (672) JSW Energy Ltd 10332 1862 25 -28 (91) Grasim Industries Ltd 52251 9995 1064 6 1 JSW Steel Ltd 47148 17973 1417 73 492 Great Eastern Ship- 6081 746 (127) -14 (318) Jubilant Foodworks 6181 616 6 0 (78) GRUH Finance Ltd 16205 416 110 13 26 Jubilant Life Sciences 11083 1641 113 12 31 Gujarat Fluorochemi- 7517 1917 (109) -19 (174) Jubilant Life Sciences 11083 1641 149 12 209 Gujarat Pipavav Port 7416 175 66 16 31 Jyothy Laboratories 6811 468 107 5 202 Gujarat State Petronet 9561 245 127 5 28 K E C International Ltd 6536 2849 146 11 90 Hatsun Agro Product 8825 998 32 17 4 K P R Mill Ltd 6285 790 72 14 32 Havells India Ltd 30643 1873 95 28 (74) Kajaria Ceramics Ltd 11229 812 72 24 5 HCL Technologies Ltd 119707 13183 2339 23 21 Kalpataru Power 5314 1479 90 12 37 HDFC Bank Ltd 427433 9055 3990 21 18 Kansai Nerolac Paints 22478 1085 112 25 (82) Hero MotoCorp Ltd 75453 7606 718 3 (14) Kirloskar Oil Engines 5568 775 44 18 (18) Hexaware Technolo- 7434 961 114 17 35 Kotak Mahindra Bank 187553 2162 976 16 40 Hindalco Industries 43788 11969 1317 40 270 KRBL Ltd 9299 913 110 22 (2) Hindustan Copper Ltd 5977 514 41 58 6919 L&T Finance Holdings 26754 2238 315 14 33 Hindustan Petroleum 53796 51414 1819 25 31 Lakshmi Machine 5705 712 68 -5 22 Hindustan Unilever Ltd 236250 8969 1183 18 6 Larsen & Toubro Ltd 161100 23844 1407 14 (45) Hindustan Zinc Ltd 101809 7237 3056 136 42 LIC Housing Finance 39253 3643 529 12 18 Hitachi Home & Life 5728 578 25 41 90 Lupin Ltd 51073 4253 380 4 (49) Honeywell Automa- 10293 592 22 5 (29) Mahindra & Mahindra 19833 2123 278 13 (32) Housing Development 260399 18040 3079 10 (11) Mahindra & Mahindra 86242 12319 722 16 19 ICICI Bank Ltd 184345 5962 2024 10 188 Mahindra CIE Auto- 9027 516 17 38 9 IDBI Bank Ltd 12126 1633 (3200) 14 84 Mahindra Holidays & 5294 311 32 32 (1) Idea Cellular Ltd 28031 8195 (326) -13 (157) Manappuram Finance 7792 899 201 38 53 IDFC Bank Ltd 19536 502 176 20 7 Mangalore Refinery 22232 13326 1942 44 43 IDFC Ltd 9113 2577 135 24 3 Marico Ltd 40372 1315 171 2 26 IIFL Holdings Ltd 19129 1404 186 28 37 Maruti Suzuki India Ltd 219503 18005 1709 20 16 India Cements Ltd 6763 1524 34 33 (33) Max Financial Services 16199 7 (20) -46 (14) 40 MARKET twitter | June’ 17

  41. "Mkt Cap (Rs Cr) as on 15th June 17" "Mkt Cap (Rs Cr) as on 15th June 17" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" "Sales" (Rs Cr) "PAT" (Rs Cr) "Sales Gr (%)" "PAT Gr (%)" Company Name Company Name Mindtree Ltd 8653 1318 97 0 (27) SRF Ltd 9364 1306 129 20 16 Monsanto India Ltd 5079 145 30 66 25 State Bank of India 227923 18072 2814 17 123 Motherson Sumi 66597 11100 706 15 20 Steel Authority of 23503 14234 (771) 27 (37) Motilal Oswal Finan- 18042 375 102 62 134 Sterlite Technolo- 6096 701 69 15 19 MphasiS Ltd 12681 1506 184 -1 18 Strides Shasun Ltd 8426 961 131 0 2857 MRF Ltd 30513 3778 286 10 (24) Sun Pharma Advanced 7432 45 32 10 (437) Multi Commodity Ex- 5646 63 10 12 (61) Sun Pharmaceuticals 126958 7137 1224 -4 (29) Muthoot Finance Ltd 18843 1696 322 19 21 Sun TV Network Ltd 33085 582 236 2 (0) National Aluminium 12583 2423 268 28 25 Sundaram Clayton Ltd 8182 385 38 14 (56) NCC Ltd 5017 2186 64 -11 (9) Sundram Fasten- 8625 775 88 12 1 Nestle India Ltd 65169 2592 307 13 18 Supreme Industries 15090 1283 148 7 29 Network 18 Media & 5502 435 (33) -9 85 Suzlon Energy Ltd 9615 4999 579 54 (350) NMDC Ltd 35546 2871 512 88 12 Symphony Ltd 8987 184 47 34 0 NTPC Ltd 132134 20886 1995 16 (27) Syndicate Bank 7087 1861 104 27 (105) Oberoi Realty Ltd 12828 302 102 34 57 Tata Chemicals Ltd 15603 2919 343 -16 32 OCL India Ltd 6720 1010 113 23 (15) Tata Communica- 20992 4395 (260) -15 26 Oil & Natural Gas 214123 21714 4340 36 (6) Tata Global Beverages 9984 1674 51 5 (119) Oil India Ltd 23629 2511 669 32 42 Tata Motors Ltd 131519 77217 4336 -3 (17) Oracle Financial Ser- 31379 1052 228 -1 2 Tata Power Company 21057 7167 (247) -2 (398) Oriental Bank of Com- 5175 1307 (1218) -3 (5734) Tata Steel Ltd 48765 35305 1168 21 (136) P I Industries Ltd 11197 627 135 9 43 Tech Mahindra Ltd 38038 7495 590 9 (33) Page Industries Ltd 18492 499 67 13 18 The Ramco Cements 16509 1013 134 5 (26) PC Jeweller Ltd 9003 2155 110 15 40 Thomas Cook (India) 8263 2059 (6) 10 (93) Persistent Systems Ltd 5332 704 73 30 (6) Titan Company Ltd 45788 3487 201 43 6 Petronet LNG Ltd 32021 6365 471 5 92 Torrent Pharmaceuti- 20478 1381 206 -6 (27) Pfizer Ltd 7889 453 68 -11 (22) Torrent Power Ltd 8853 2453 136 1 92 Phoenix Mills Ltd 6884 454 51 -2 (611) Trent Ltd 8258 454 25 20 28 Pidilite Industries Ltd 41791 1404 157 14 3 Tube Investments of 12939 1027 73 1 (89) Piramal Enterprises 51042 2451 311 46 61 TV18 Broadcast Ltd 6463 298 8 -2 (91) Prism Cement Ltd 5904 1419 70 2 (7) TVS Motor Company 26139 2845 127 2 (7) Procter & Gamble 25651 624 99 2 2 UCO Bank 5560 609 (588) -35 66 Punjab National Bank 31377 3684 262 33 (105) UltraTech Cement Ltd 112978 8164 725 19 0 Rajesh Exports Ltd 20329 54270 332 -3 32 Union Bank of India 10411 2387 108 15 13 Redington India Ltd 5364 10795 153 3 11 United Breweries Ltd 20764 1113 7 -8 (87) Relaxo Footwears Ltd 5834 498 34 3 5 UPL Ltd 44012 5341 741 20 303 Reliance Capital Ltd 15230 5033 417 79 0 Vardhman Textiles Ltd 7103 1609 159 -3 (3) Reliance Industries Ltd 451229 84823 8053 42 12 Vedanta Ltd 70115 24612 2060 55 (118) Reliance Infrastruc- 12600 4993 41 -10 (113) V-Guard Industries Ltd 7693 623 42 22 (0) Reliance Power Ltd 11249 2456 276 14 14 Vijaya Bank 7986 989 204 48 186 Repco Home Finance 5575 266 51 15 20 Voltas Ltd 16180 2058 201 10 14 Sanofi India Ltd 9336 513 60 -1 (27) VST Industries Ltd 5019 228 45 -15 (9) Shree Cement Ltd 61918 2380 305 19 (54) Welspun India Ltd 7967 1328 65 7 16 Shriram City Union 16095 1178 16 15 (73) Whirlpool of India Ltd 14380 1114 74 19 10 Shriram Transport 22307 2712 150 -7 4 Wipro Ltd 123952 12267 2396 2 20 Siemens Ltd 46869 3051 186 12 5 Wockhardt Ltd 6991 864 (175) -15 3148 SKF India Ltd 8406 654 58 11 12 Yes Bank Ltd 65816 1640 914 32 30 South Indian Bank Ltd 5318 439 76 17 4 Zee Entertainment Enterprises Ltd 48820 1528 1514 0 568 SREI Infrastructure 5484 1103 63 39 205 41 MARKET twitter | June’ 17

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