Stock Advisory for Today - Buy Stock of Bank of Baroda

Hindustan Zinc LTD : Good gains ahead "BUY" 6th Mar 2014
Zinc fundamentals are becoming attractive with suppotive lead prices brings a positive outlook for Hindustan Zinc.With a cash-rich balance sheet
and strong visibility over production growth of zinc, lead and silver over FY2013-15, we are positive on HZL.Being an integrated & dominant
player in the domestic industry with low cost of production, the company is poised to benefit in the long run. Now the stock is trading at 1.6x in
one year forward P/B we estimated it at 1.8x for 2015.At current level we see a significant growth in the stock. We valued & reaffirm our
positive stance on HZL and assign a BUY rating to the stock with a target price of Rs. 148/-. ....................................................... ( Page : 21-23)
Voltas Ltd : Downgrade to "Neutral" "NEUTRAL"
IEA-Equity
Strategy
11th Mar, 2014
Edition : 222
The company has been evaluating strategic alternatives since 2012, we believe the company is not inclined to sell at valuations multiple of 2
times of its FY15E book value. However, If the company if things will going positively we could rationalize valuations near Rs. 145 per share, but
we don't believe buyers would be willing to pay a premium to BVPS more than 2 times at this time. We are downgrading Voltas to Neutral given
the recent rise in its share price following 3QFY14 earnings and revised our price target to Rs. 120. ................................................................ (
Page : 24-25)
BANKBARODA "BUY" 11th Mar 2014
On fundamental wise, we are not very impressed with bank but in recent market rally, PSB as well as private banks participated more than any
sector likely due to outcome of exit poll for the coming election. We believe bank would rally more because of trading at lower side despite of
index is running at all time high. But with this fundamental Bank of Baroda would trade in range of Rs.635 to Rs.700 depending upon sentiment
as per our view. .................................................................... ( Page : 2- 4)
CAN FIN HOME "BUY" 7th Mar 2014
We have initiated coverage with Buy rating on the stock with price target of Rs.220 which implies 1 times of FY14E book value. The company has
delivered strong performance all around. During quarter, profitability was up by 60% on the back of healthy NII growth and improvement in
operating leverage. Return ratio improved from 12% in FY12 to 18% in 3QFY14 which is expected to remain healthy on the back of improving
operating leverage and aggressive branch expansion. ................................................... ( Page :12-18)
6th Mar 2014
DB CORP : "Waging war on Print media" "NEUTRAL" 7th Mar 2014
The Supreme Court upheld the constitutional validity of the November 11, 2011 Union government notifications, directing implementation of
the recommendations of the Majithia Wage Boards for journalists and non-journalists of newspapers and news agencies. This judgment will
work as a dampener for newspaper industry as well as DB CORP. Company’s EBITDA margin will be effected very negatively not only in FY15E
but also next few or more years. Therefore we downgrade DB CORP from `BUY’ to `NEUTRAL’ ........................................................................ (
Page : 19-20)
Dabur India Ltd: "Confident tone for growth" "BUY" 7th Mar 2014
Dabur expects volume growth at a range of 8-12% for FY15E led by innovation and effective distribution initiatives in chemist channels. If
discretionary demand from urban area improves, then volume growth in double digit would not be a surprise for street. Considering its expected
expressive volume growth than other peers, aggression on new launches through innovation and aggressive distribution reach energize our
positive stance on the stock. ............................................................. ( Page : 7-11)
Prestige Estates Projects: "Downgrade to Hold" "HOLD" 10th Mar 2014
The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down gradulally. The stories behind the current price
diving are the concern of price war, staggered economics, and non softening of interest rates. However given the limited upside in counter in
near term, we revise our rating on PEPL to “Hold” with a revised price target of Rs. 190. Regarding the stock's future course, our “Hold” rating
indicates that we do not recommend additional investment in this stock despite its gains in the current period.
..................................................................................... ( Page : 5-6)
Narnolia Securities Ltd,
India Equity Analytics
Daily Fundamental Report on Indian Equities

BANKBARODA
651
700
624
8
12
1M 1yr YTD
Absolute 16.6 -8.3 -8.3
Rel.to Nifty 8.7 -21.4 -21.4
Current 4QFY13 3QFY1
3Promoters 55.4 55.4 55.4
FII 15.5 15.5 15.3
DII 19.6 19.6 19.0
Others 9.5 9.5 10.3
Financials Rs, Cr
2011 2012 2013 2014E 2015E
NII 8802 10317 11315 12218 14122
Total Income 11611 13739 14946 16400 18304
PPP 6982 8581 8999 9206 10067
Net Profit 4242 5007 4481 4444 4819
EPS 108.3 121.8 106.4 105.5 114.4
2
Profit inflated due to lower provisions led by reversal of investment
depreciation
Advance growth led by SME and retail
Average Daily Volume
At the current price of Rs.651/share stock is trading at 0.77 times of FY14E
book value which is now premium over its peer group. We value bank at the
range of Rs.634 to Rs.790 implying valuation multiple of 0.75 to 0.9 times of
one year forward book. But upper side of book value multiple would be
possible only if the improvement of asset quality along with improving sign of
fundamentals. But in its quarterly result, bank’s performance was muted all
around except healthy loan and deposits growth. CASA growth was remained
muted in compare to SBI and PNB. So cost of deposits is unlikely to soften in
near term while asset quality was deteriorated higher in percentage as
compare to PNB and SBI. In the following section we will discuss the
fundamental improvement of bank during quarter.
NII growth on the back of loan growth and margin expansion
Bank’s NII grew by 7.6% YoY largely due to healthy loan growth and sequentially
margin improvement of 5 bps. Margin improve came from domestic push from 2.85%
to 2.95 while international NIM remained stable at 1.18%. Cost of fund declined by
14 bps quarterly due to lower borrowings as a percentage of percentage of NDTL.
Advances grew by 18% YoY largely came from SME and retail sector which grew by
39% and 21% YoY respectively. Bank continued to be cautions while expanding its
exposure towards large corporate owing to economy recession. Deposits grew by
21.5% YoY, added by foreign currency non- resident deposits but CASA franchise
remained flat at 26%. So in CASA front we are not impressed and going forward cost
of fund is unlike to be soften in our view.
Market Data
Upside
773/429
BSE Code 532134
NSE Symbol BANKBARODA
Result update ADD
CMP
ANNUAL REPORT UPDATE
Target Price
Previous Target Price
Mkt Capital (Rs Cr)
Please refer to the Disclaimers at the end of this Report.
(Source: Company/Eastwind)
Stock Performance
52wk Range H/L
21627
Provisions were lower by 11.5% YoY on account of reversal of investment
depreciation to the tune of Rs.120 cr offset additional provision towards non-
performing assets. But bank’s stress loan (slippage + Restructure) loans were
Rs.1275 cr which was almost in previous quarter. Lower provisions made 17% up
PBT but at operating profit level, it was down by 2.6% YoY. Tax rate was higher due
to creation of DTL as per advice by RBI.
View & Valuation
On fundamental wise, we are not very impressed with bank but in recent market rally,
PSB as well as private banks participated more than any sector likely due to
outcome of exit poll for the coming election. We believe bank would rally more
because of trading at lower side despite of index is running at all time high. But with
this fundamental Bank of Baroda would trade in range of Rs.625 to Rs.700
depending upon sentiment as per our view.
Change from Previous
BANKBARODA Vs Nifty
Share Holding Pattern-%
18.25 Cr
Nifty 6537
"ADD"
11h March. 2014

3
BANKBARODA
Source: Eastwind/Company
Quarterly Result (Rs Cr) 3QFY14 2QFY14 3QFY13 % YoY Gr % QoQ Gr 3QFY14E
Interest/discount on advances / bills 7061 6832 6485 8.9 3.3 7173
Income on investments 2175 2220 1898 14.6 -2.0 2350
Interest on balances with Reserve Bank of India 245 281 403 -39.2 -12.8 397
Others 209 140 58 258.2 50.1 173
Total Interest Income 9691 9473 8845 9.6 2.3 10092
Others Income 932 974 841 10.9 -4.3 1102
Total Income 10623 10447 9686 9.7 1.7 11194
Interest Expended 6634 6579 6004 10.5 0.8 6792
NII 3057 2895 2841 7.6 5.6 3300
Other Income 932 974 841 10.9 -4.3 1102
Total Income 3989 3869 3681 8.4 3.1 4402
Employee 1056 1030 798 32.3 2.5 1189
Other Expenses 736 714 627 17.3 3.1 792
Operating Expenses 1792 1744 1426 25.7 2.7 1981
PPP( Rs Cr) 2197 2125 2256 -2.6 3.4 2421
Provisions 762 861 1029 -26.0 -11.5 897
Exceptional Items 16 16 12 25.0 0.0 0
PBT 1436 1264 1227 17.0 13.6 1524
Tax 372 80 203 83.7 364.7 457
Net Profit 1048 1168 1012 3.6 -10.3 1067
Balance Sheet Date( Rs Cr)
Equity Capital 423 423 412 2.5 0.0
Reserve & Surplus 35232 35127 30966 13.8 0.3
Net Worth 35654 35549 31379 13.6 0.3
Total Deposits 503772 484931 414733 21.5 3.9
Borrowings 29304 28558 27899 5.0 2.6
Other liabilities and provisions 18638 13995 14552 28.1 33.2
Total Liability 587368 563033 488563 20.2 4.3
Cash in hand 16742 15681 17147 -2.4 6.8
Cash and balances with RBI 87599 79980 58295 50.3 9.5
Total Investment 115210 111840 101848 13.1 3.0
Advances 352446 339855 299318 17.7 3.7
Fixed Assets 2562 2498 2399 6.8 2.6
Others Assets 12809 13179 9557 34.0 -2.8
Total Assets 587368 563033 488563 20.2 4.3
Asset Quality
GNPA( Rs Cr) 11926 10888 7321
NPA(Rs Cr) 6624 6316 3363
% GNPA 3.4 3.2 2.4
% NPA 1.9 1.9 1.1
% PCR (without technical writeoff) 44.5 42.0 54.1

4
BANKBARODA
Income Statement 2011 2012 2013 2014E 2015E
Interest Income 21886 29674 35197 39065 45206
Interest Expense 13084 19357 23881 26847 31084
NII 8802 10317 11315 12218 14122
Change (%) 48.2 17.2 9.7 8.0 15.6
Non Interest Income 2809 3422 3631 4182 4182
Total Income 11611 13739 14946 16400 18304
Change (%) 32.8 18.3 8.8 9.7 11.6
Operating Expenses 4630 5159 5947 7194 8237
Pre Provision Profits 6982 8581 8999 9206 10067
Change (%) 41.5 22.9 4.9 2.3 9.4
Provisions 1331 2555 4168 3559 4043
PBT 5650 6026 4831 5647 6024
PAT 4242 5007 4481 4444 4819
Change (%) 38.7 18.0 -10.5 -0.8 8.4
Balance Sheet
Deposits( Rs Cr) 305439 384871 473883 521272 573399
Change (%) 27 26 23 10 10
of which CASA Dep 87589 103524 119981 135531 149084
Change (%) 23 18 16 13 10
Borrowings( Rs Cr) 22308 23573 26579 33273 36600
Investments( Rs Cr) 71261 83209 121394 122000 134200
Loans( Rs Cr) 228676 287377 328186 367568 404325
Change (%) 31 26 14 12 10
Ratio
Avg. Yield on loans 8.0 8.7 8.4 8.6 9.3
Avg. Yield on Investments 7.0 7.8 6.4 7.3 8
Avg. Cost of Deposit 4.3 5.1 5.2 5.2 5.4
Avg. Cost of Borrowings 5.5 6.7 5.4 5.5 5.5
Valuation
Book Value 536 668 759 846 929
CMP 963 794 652 513 513
P/BV 1.8 1.2 0.9 0.61 0.6

V- Prestige Estates Projects Ltd.
Key Points
CMP 169
Target Price 190
165
Upside 12%
15%
BSE Code 533274
NSE Symbol
5,717
161,912
Nifty 6,401
1M 1yr YTD
Absolute 15.6 0.4 0.4
Rel. to Nifty 9.3 (11.5) (12.2)
3QFY14 2QFY14 1QFY14
Promoters 75.0 75.0 75.0
FII 17.4 17.4 17.2
DII 6.3 6.3 6.1
Others 1.3 1.3 1.7
Valuation:
5
1 yr Forward P/B
Stock Performance-%
Market Data
• The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down
gradulally. The stories behind the current price diving are the concern of price war, staggered
economics, and non softening of interest rates. The heat wave in economy have affected
complete sector, this hurt the real estate companies' revenue and the revival which were
expected by us in previous year cannot be seen in the manner in which we expect.
• Earlier in our 3QFY14 result update we had given a buy rating on stock when the price was
Rs. 145, with the next 5-6 month price target of Rs. 165. However seeing the current rally in
stock post 3QFY14 result and on back of guidance for FY14 at Rs. 4300 crore sales booking as
the management commentary on the result call regarding launches in Q3FY14 as well as
through the year remained extremely positive. However given the limited upside in counter in
near term, we revise our rating on PEPL to “Hold” with a revised price target of Rs. 190.
• Regarding the stock's future course, our “Hold” rating indicates that we do not recommend
additional investment in this stock despite its gains in the current period.
Mkt Capital (Rs Crores)
52wk Range H/L
At the current CMP of Rs. 165, the stock is trading at a PE of 16.0x FY14E & 13.6x FY15E . The
company can post EPS of Rs. 10.3 & Rs. 12.1 in FY14E & FY15E and RoE of 11.3% & 12.0%.
Prestige Estates Projects said it sold 1,204 residential units and 0.026 million square feet (Mnsft)
of commercial space, aggregating to 2.075 Mnsft, amounting to Rs 1262 crore of sales in Q3
December 2013. Of the above, Prestige share is 904 units -1.55 Mnsft amounting to Rs 940.20
crore of sales, up by 24.69% from that of Q3 December 2012.In Q3 December 2012, the company
had sold 682 units aggregating 1.44 Mnsft of residential and commercial space, amounting to Rs
754 crore of sales - Prestige share. (Overall sales of 1.69 Mnsft of area amounting to Rs 873.90
crore). Collections rose 16.69% to Rs 592.30 crore in Q3 December 2013 over Q3 December 2012
- Prestige share. (Overall collections for the Q3 December 2013 - Rs 713.30 crore). In Q3
December 2013, the company launched the first phase of its largest residential project- Prestige
Lakeside Habitat in Bangalore aggregating to 2.79 million square feet of total developable area.
The project is spread across 102 acres in area and consists of apartments and villas with total
developable area of 8.40 Mnsft.
Management Guidence FY14E
Company will exceed its presales guidance. Company has already done sales to the extent of Rs
1,200 crore plus and now it is just a question of production and these numbers getting
recognised because company need to touch the trigger of 30 percent to recognise these
numbers. During the year, company has made Rs 3,700 crore and guidance was Rs 4,300 crore.
On his outlook for the company's business, Prestige Estates Projects, says there is no slowdown
in the Bangalore market and aims to concentrate on the phase 2 and 3 of its Lakeside Habitat
project newt quarter
Result Highlights 3QFY14
"Downgrade to Hold………..."
Hold
102/195
Result update
PRESTIGE
"Hold"
10th Mar' 14

6
(Ammount in crore) (Source: Company/Eastwind)
Prestige Estates Projects Ltd.
Key financials :
(Source: Eastwind Research) (Figures in crore)
PARTICULAR 2011A 2012A 2013A 2014E 2015E
Performance
Revenue 1543 1052 1948 2532 3038
Other Income 68 34 64 64 64
Total Income 1611 1086 2011 2595 3102
EBITDA 442 331 579 696 805
EBIT 381 270 511 621 722
DEPRICIATION 61 61 68 75 83
INTREST COST 123 119 149 163 163
PBT 326 185 426 522 623
TAX 91 63 131 161 199
Reported PAT 235 122 294 361 423
Dividend 39 39 39 39 39
EPS 7.2 3.7 8.4 10.3 12.1
DPS 1.2 1.2 1.1 1.1 1.1
Yeild %
EBITDA % 28.6% 31.4% 29.7% 27.5% 26.5%
NPM % 14.6% 11.3% 14.6% 13.9% 13.7%
Earning Yeild % 5.7% 3.7% 5.2% 6.2% 7.3%
Dividend Yeild % 1.0% 1.2% 0.7% 0.7% 0.7%
ROE % 11.1% 5.7% 10.7% 11.8% 12.0%
ROCE% 6.5% 3.0% 5.7% 6.6% 7.4%
Position
Net Worth 2114 2151 2743 3065 3531
Total Debt 1505 1864 2420 2420 2200
Capital Employed 3619 4015 5163 5485 5731
No of Share 33 33 35 35 35
CMP 125 100 163 165 165
Valuation
Book Value 64.4 65.6 78.4 87.6 100.9
P/B 1.9 1.5 2.1 1.9 1.6
Int/Coverage 3.1 2.3 3.4 3.8 4.4
P/E 17.5 26.8 19.4 16.0 13.6

Dabur India Ltd.
BUY
Expecting for bottomed up sign on volume growth:
1M 1yr YTD
Absolute 0.3% 30% 33.9%
Rel. to Nifty -6.03% 19% 22.0%
Promoters 68.64 68.66 68.66 Aggression on expending distribution reach:
FII 19.94 20.71 20.4
DII 4.47 3.96 3.97
Others 6.95 6.7 7
View and Valuation:
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
1904.28 1748.81 8.9 1635.98 16.4
297.59 329.24 (9.6) 274.51 8.4
243.5 249.83 (2.5) 209.87 16.0
15.6% 18.8% 220bps 16.8% 120bps
12.8% 14.3% 150bps 12.8% -
7
P/BV(x)-1year forward
Rs, Crore
Despite signs of weak discretionary demand and increased competitive intensity in the
market, Dabur India has reported comparatively better volume growth in its key
categories. On all operating parameters, its performance was satisfactory. Still,
management is cautious for margin ramp up due to high inflation in India.
"Confident tone for growth"
Company update
CMP 173
Target Price 206
Analysis on recent management interview to media :
Dabur expects volume growth at a range of 8-12% for FY15E led by innovation and
effective distribution initiatives in chemist channels. If discretionary demand from urban
area improves, then volume growth in double digit would not be a surprise for street.Previous Target Price -
Upside 19%
Change from Previous - A mature segment like Hair Oil remains a concern because of competitive intensity,
likely to grow slower than healthcare and home segments.
Consistently, Dabur is aggresively working on innovation activities to launch new
product as well as product development activities. Recently new launches would come
to the people like Vatika Enriched Coconut Oil with hibiscus, Vatika Olive Enriched Hair
Oil.
Considering its expected expressive volume growth than other peers, aggression on new
launches through innovation and aggressive distribution reach energize our positive
stance on the stock.
Post earning, management of the company expressed hypothetically its view regarding
bottoming out of urban demand. The management of other FMCG bellwether like Marico
had also stated that the trend of volume decline has bottomed out based on hypothesis.
Recent Consumer Confidence Index indicates some upward movement than previous
quarters. At a same point, recent softening in CPI and Food Inflation Index (graph on 3rd
page of this company's report) hint to improve consumer discretionary demand from rural
and urban area.
Market Data
BSE Code 500096
Stock Performance
Nifty 6401
The strong momentum in relatively low competition in the core categories with
diversified portfolio, Dabur gets a better place than other peers and its rural distribution
expansion should boost sales volumes. We retain our “Buy” view on the stock with a
target price of Rs206. At a CMP of Rs 173 stock trades at 9x FY15E P/BV.
NSE Symbol DABUR
30246
Average Daily Volume 908049
52wk Range H/L 185/128
Mkt Capital (Rs Cr)
Dabur is working on chemist channel to drive growth of its health care and Personal care
portfolio, and they are planning to distribute personal products through this channel.
Dabur had direct coverage of 55,000 chemist stores, which has now increased to 75,000;
plans to take it to 125,000 by FY15E.
PAT Margin
Financials
Revenue
EBITDA
PAT
EBITDA Margin
"BUY"
7th Mar' 14

Vatika hair oil
Honitus
8
Segment-wise snapshot
Dabur New Launches:
Ratnaprash
Fem with no ammonia Odonil Variants
Vatika Shampoo
Dabur India Ltd.
Segments Growth (YoY)-% Key takeaways (3QFY14)
Domestic Business 24%
-Launched Vatika Enriched Olive Hair Oil,
-Shampoo grew by 25%(YOY),
-Perfumed hair oils posted 8% YoY growth,
-Dabur Chyawanprash reported healthy growth with a range of 17-18% YoY,
-Launched premium health supplement – Dabur Ratnaprash,
-Dabur Honey performing well on the back of higher demand,
-Toothpastes grew by 14% with premium offerings/added market share,
-Flattish growh in Red Toothpaste,
-Meswak on new packaging launched ,
-Honitus: Honey & Tulsi variant launched,
-Ethicals portfolio grew by 15.5% YoY,
-Hajmola performed well with positve response from Anadana variants,
-Recently launched Pudin Hara Lemon Fizz has received emense response,
-Odonil 1 Touch Freshener launched in South India,
-Odonil and Sanifresh performed well during the quarter,
-Gulabari performed well during the quarter,
-Launch of Fem Fairness Naturals with No Added Ammonia,
-Fem witnessed double digit growth led by good take from Bleaches,
-Real Fruit Juice reported double digit growth,
-Real in a new Diwali Gift packaging launched,
-Organic International Business grew by 29% with 14% constant
currency(CC) growth driven by strong growth in GCC, Egypt & Nigeria,
-Namaste business registered double digit growth in CC term,
6.9%Hair Care
17.7%
13.2%OTC & Ethicals
Digestives
16.0%Home Care
Health Supplements 19.5%
Oral Care 10.4%
Skin Care 13.4%
Foods 18.0%
International Business 26.0%
Ratnaprash
Odonil Variant
Beverage variants
Vatika Shampoo variant
Vatika hair oil
Fem portfolio with no ammonia
Pudin Hara Lemon Fizz
Vatika Hair Oi l with Hibiscus
OxyLi fe Men
Odoni l re-launched with 2x perfume content
Test launched Real Mi lk Shakes in Delhi and Punjab
Oxy life Aloe Vera Gel Bleach
Real Activ Drinking Yoghurts in mango and strawberry flavours
Hajmola Anardana
Super Babool + Salt Power
New Ethnic flavour "Kokam" under Real Burrst
Fem brand was introduced in Turkey
Odoni l Gel
Dabur's New Launches
3QFY14
Q2FY14
Q1FY14
4QFY13

Slowdown in Hair Oils segment remains for long term?
How chemist channel would play a role to opportune the gain of market share?
9
Dabur India Ltd.
Pace of innovation continues ‐ Vatika
Enriched Olive Hair Oil
launched during the quarter
Key Takeaways:
On 3QFY14, Hair Oils segment witnessed decline across categories. Marico reported only
2% YoY volume growth in parachute rigid packs and 8% YoY in value-added hair oils, Bajaj
Corp and Navratna oil clocked 1% YoY volume growth. While, Coconut oil segment
reported 3-4% YoY volume decline.
Importantly, Hair Oil segment is adversely impacted by high input cost pressure leading to
frequent price hike. We believe, slowdown in Hair Oil segments could be a short-term
jerk. Dabur management believes that there is some structural change in Coconut Hair Oil
because of consumption shifting from Coconut Hair Oil to Light Hair Oil. Dabur is carrying
small exposures in Coconut Oil; still there is room to report value and volume growth
because of support from new launches. Company is likely to be better placed with value-
added offerings Vatika enriched coconut oil with Hibiscus and Vatika Olive Enriched Hair
Oil.
We expect that the volume growth in Hair Oil segment has bottomed out and coming
quarter and next spell of growth would come largely from increasing per capita income.
Innovation combined with optimum pricing strategy to maintain market share will be
key growth driver of this category.
Considering the weak consumer sentiment in urban area, there was less opportunity to
invest in urban growth in the past 2 years. Now, as green shoots are visible and consumer
sentiment is improving, the company is beginning to invest in urban growth with Project
CORE—chemist outlet and range expansion. However, there could be a few quarters of
transitory period. As part of this project, Dabur has recruited 350 people in the front end
and will incur Rs15cr for the first phase.
Project CORE’s primary focus will be the health care portfolio(Chyawanprash, Honey,
Glucose), OTC products (Honitus, Lal Tel) and personal care portfolio which are more
relevant to the chemist channel than to general trade. At present, it increased its
coverage to 75000 from 55000-chemist store and, plans to take it to 125,000 by FY15E.
We expect that project CORE will be favorable to improve margin picture as well as
revenue builder.
Chemist Shope in India

21%
16% 16%
GCC EGYPT NIGERIA
10
Skin Care The company expects to see growth in mid-teens helped by the pickup in winter in Q4FY14.
For 3QFY14, The International Business (contributes around one third of consolidated
sales) grew by 26%. Organic business grew by 29% with 14% constant currency growth
rate led by strong performance in GCC, Egypt and Nigeria. The GCC business reported a
21% growth, while sales in Egypt and Nigeria both grew by 16%.
Bangladesh remains an important geography for the company, which was impacted by
political instability and economic uncertainty resulting in slow growth of 10% YoY. Dabur
has organized a strong team and product portfolio for this geography.
Dabur will expand its footprint only in adjacent geographies of its current markets like in
Iran, Iraq and Africa. It believes that Bangladesh and Pakistan together have the potential
to become Rs500cr market each over the long term.
Intl‐Business – New Launches
Oral Care:
Key Growth Markets –Q3FY14(%)
-Dabur does not believe that launching sensitive toothpaste now will drive growth of this portfolio as big
players are already present in this segment.
Dermoviva Face Wash
Fem Gold Hair Removal Cream
Dabur India Ltd.
Conference Call (Q3FY14 ): Key Facts at a glance
-Dabur expects to achieve volume growth in the range of 8-12% in FY15%E, and if urban growth revives,
volume growth could be in the range of double digit growth.
Volume Growth
-Dabur expects to improve gross margin in FY15E, its inventory that includes the high cost raw materials
(increased due to high-cost petroleum derivatives) will exist until February 2014. Dabur expects gross margin to
improve by 100bps if the inflation scenario remains benign.
Margin Growth
Dermoviva Hand Wash
(Source: Company)
International business
Hair Care -Dabur expects to maintain growth of high single-digit in this segment.
Health Care
-Dabur expects that there is huge opportunities for growth in this segment and Project CORE will help to drive
growth for the same.
Pricing Growth
Innovation and new
launches
-The company expects to continue with the new launches and innovations, but spread over the year and not
cluttered in one quarter. Dabur could launch a range of summer products in beverages and health supplements.
Ad spend -Ad expenses to be maintain within the range of 13-15% at the consolidated level for FY15E.
-For 4QFY14E, price increase could be at a range of by 1-2% YoY. The company may hike prices by 4-5% in
FY15E and focus will be on pursuing an aggressive and profitable growth strategy.
Urban and Rural
Growth
-Its rural growth has been faster than urban growth since the past few quarters but now this gap has reduced.
Now, Dabur believes that growth will be driven by the urban areas, which is witnessing an uptick. The company
will be shifting its focus to the urban area, which will drive premiumization.

11
Dabur India Ltd.
Financials
Rs in Cr, FY10 FY11 FY12 FY13 FY14E FY15E
Sales 3391.4 4104.5 5305.4 6178.9 7070.30 8203.32
RM Cost 811.0 1806.8 2278.8 2422.1 2757.42 3240.31
Purchases of stock-in-trade 750 252 509 599 742.38 820.33
WIP (10) (122) (103) (2) (71) (41)
Employee Cost 285 309 387 471 608.05 738.30
Ad Spend 493.5 534.6 659.5 837.0 996.91 1132.06
Other expenses 438.4 524.1 683.1 819.10 908.53 1066.43
Total expenses 2767.3 3304.8 4415.2 5146.6 5942.59 6956.42
EBITDA 624.1 799.7 890.2 1032.2 1127.71 1246.90
Depreciation and Amortisation 50.0 95.2 103.4 112.7 111.09 133.15
Other Income 39.4 32.2 57.4 92.0 141.41 164.07
EBIT 613.5 736.6 844.2 1011.5 1158.03 1277.82
Interest 12.3 29.1 53.8 58.9 54.69 51.95
PBT 601.2 707.5 790.4 952.6 1103.34 1225.87
Tax Exp 100.5 139.0 146.4 182.62 212.39 232.91
PAT 500.7 568.5 644.0 770.0 890.95 992.95
Volume 9.5% 10.5%
Pricing 4.5% 5.0%
Sales 20.9% 21.0% 29.3% 16.5% 14.4% 16.0%
EBITDA 33.9% 28.1% 11.3% 16.0% 9.3% 10.6%
PAT 28.1% 13.5% 13.3% 19.6% 15.7% 11.4%
RM Cost 23.9% 44.0% 43.0% 39.2% 39.0% 39.5%
Ad Spend 14.6% 13.0% 12.4% 13.5% 14.1% 13.8%
Employee Cost 8.4% 7.5% 7.3% 7.6% 8.6% 9.0%
Other expenses 12.9% 12.8% 12.9% 13.3% 12.9% 13.0%
Tax rate 16.7% 19.6% 18.5% 19.2% 19.3% 19.0%
EBITDA 18.4% 19.5% 16.8% 16.7% 16.0% 15.2%
EBIT 18.1% 17.9% 15.9% 16.4% 16.4% 15.6%
PAT 14.8% 13.9% 12.1% 12.5% 12.6% 12.1%
CMP 158.6 96.1 103.2 131 173.00 173.00
No of Share 86.8 174.1 174.2 174.3 174.30 174.30
NW 935.4 1391.1 1716.9 2124.38 2689.06 3335.36
EPS 5.8 3.3 3.7 4.4 5.11 5.70
BVPS 10.8 8.0 9.9 12.19 15.43 19.14
RoE-% 53.5% 40.9% 37.5% 36.2% 33.1% 29.8%
P/BV 14.7 12.0 10.5 10.75 11.21 9.04
P/E 27.5 29.4 27.9 29.7 33.84 30.37
Valuation:
Margin-%
Expenses on Sales-%
Growth-% (YoY)

189
220
-
16
-
1M 1yr YTD
Absolute 8.7 26.9 26.9
Rel.to Nifty 3.1 15.0 15.0
3Promoters 42.4 42.4 42.4
FII 0.6 0.6 0.6
DII 0.5 0.5 0.5
Others 56.5 56.5 56.5
Financials Rs, Cr
2010 2011 2012 2013 2014E
NII 63 72 84 96 162
Total Income 71 77 91 110 162
PPP 54 60 68 74 114
Net Profit 39 42 44 54 80
EPS 19.1 20.5 21.4 26.4 39.3
12
CANFINHOME Vs Nifty
15.59 Lakh
Nifty 6401
Stock Performance
52wk Range H/L
Funding composition of the company continued to be rate MAA+ by ICRA indicating
high credit quality and carried low risk. The composition comprises 50% from NHB
and 45% from banks, altogether account for 95% of total funding while remaining
come from deposits. Average tenure of funding is 7-10 years due to its loan tenure
portfolio of 10-15 years. From year FY12 to FY13, source of funding composition
saw dramatically changed as share of NHB increased to 50% from previous year of
23% while loan from related party declined to 45% from 70% in FY12. The benefit
was also come at effect as blended borrowing cost came down to 9.2% in FY13 from
9.8% in FY12. At the end of 3QFY14, borrowing cost stood at 9.3% from 9.4% in last
quarter.
Funding compositions have high credit quality and carried low risk
CANFINHOME
Company UPDATE BUY
Mkt Capital (Rs Cr)
Loan book grew by 49.1% YoY led by strong disbursement in retail segment. The
company’s exposure to non house loan was about 7% of total loan which grew from
Rs.138 cr in 3QFY13 to Rs.400 cr in 3QFY14. The company remains focus on
salaried segment which account about 90% of loans. Average ticket size loan is Rs.
16 lakhs. Concentration of individual loan segment declined to 92% of total loan
from 94% in March 2013 and this segment shifted towards non housing. Although
revenue contribution from this segment is very low but spread is relatively thicker
than housing segment.
CAN FIN HOME
389
Market Data
Upside
196/113
BSE Code 511196
NSE Symbol
CMP
Target Price
We have initiated coverage with Buy rating on the stock with price target of
Rs.220 which implies 1 times of FY14E book value. The company has
delivered strong performance all around. During quarter, profitability was up
by 60% on the back of healthy NII growth and improvement in operating
leverage. Return ratio improved from 12% in FY12 to 18% in 3QFY14 which is
expected to remain healthy on the back of improving operating leverage and
aggressive branch expansion.
Healthy NII growth on the back of robust loan growth
The company’s NII grew by 39% YoY to Rs.40.2 Cr which came from impressive
loan growth of 49% YoY. Margin of the company was however declined by 13 bps
sequentially on account of higher cost of fund. Yield on loan remained same
sequentially which restricted NII growth below than previous quarter (49% YoY).
CanFin Home has about 16-17% of exposure in rural area where spread is lower.
From last two quarters, yield on loan remained same while cost of borrowing
increased by 10 bps which made margin lower sequentially.
Loan book continued to be healthy on account of higher non housing loan
growth
"BUY"
7th March 2014

13
CAN FIN HOME
Source:Company/Eastwind
Aggressive branch expansion drives incremental business growth
The company has opened almost 40 branches from last two years and it became double
to 81 from 41 in March 2011. The company has planned to open 85 braches at the end
of FY14. The incremental business came from additional branches as we got evidence
from revenue growth. The company revenue was Rs.72 cr in FY11 which increased to
Rs.96 cr in FY13 and in 9MFY14, it reached to Rs.115 cr while cost to income ratio was
remained flat at 30% level. The company is planning to open other 25 branches by 2015
in north area which would cater for incremental loan growth outside of southern state.
Being presence in Bangalore would help to get benefit naturally in realty boom
The reality volume in Bangalore is higher than Mumbai, Pune and Delhi-NCR region
according to our real estate analyst as we got evidence from recent result publish. Can
Fin Home’s 16% total branches are in Bangalore region, so it will be natural beneficiary of
this realty boom in Bangalore. At present 4 southern states constitute about 70% of loan
book.
Strong profit growth due to healthy NII growth and improvement in operating
leverage
During quarter, the company reported healthy net profit growth of 60% YoY on the back
of robust loan growth of 50% YoY and declined cost income which led by improvement in
operating leverage. With the improvement in operating leverage, the company’s return
ratio ROE improved from 12.6% in FY12 to 18% in 3QFY14. As discuss above, the
company is more aggressive in branch expansion which would increase incremental
business and profitability and hence return ratio.
Asset quality continues to be healthy.
On asset quality front, the company continues to remain healthy with gross NPA level
came down to 0.3 during quarter from 1.6 in FY07. With the strong recovery and high
coverage ratio, net NPA level has been 0% since FY11. During quarter, Can Fin’s GNPA
was declined to 0.32% from 0.34% in previous quarter whereas net NPA level was at 0%
led by almost 100% provision provided by the company. Asset quality is expected to
remain healthy going forward on the back of strict lending practice and 90%+ exposure to
salaried personal where chances of slippage is relatively low.

14
CAN FIN HOME
About the company
Can Fin Homes Ltd was promoted in 1987 by Canara Bank in association with reputed
financial institutions including HDFC and UTI. Canara Bank holds 42.4% stake in CFHL.
Today, CFHL offers a range of products on housing, such as loans for home purchase,
home construction, home improvement/extension and site purchase as well as non-
housing finance. The company has 81 branches at present with a large presence in
South India.
Concern
Any sharp increase in the interest rate would discourage consumers to purchase home
and thus demand could be impacted. Around 45% of funding source come from banking
and any adverse regulation like hike of interest rate could impact borrowing cost. This
would impact company’s NII, NIM and profitability.
View & Valuation
We have initiated coverage with Buy rating on the stock with price target of Rs.220 which
implies 1 times of FY14E book value. The company has delivered strong performance all
around. During quarter, profitability was up by 60% on the back of healthy NII growth and
improvement in operating leverage. Return ratio improved from 12% in FY12 to 18% in
3QFY14 which is expected to remain healthy on the back of improving operating leverage
and aggressive branch expansion.

15
CHART FOCUS
CAN FIN HOME

16
Valuation BaND
CAN FIN HOME

17
CAN FIN HOME
Quarterly Result 3QFY14 2QFY14 3QFY13 % YoY Gr % QoQ Gr
Interest Earned 151.7 137.9 102.8 47.5 10.0
Interest Expenses 111.5 99.8 73.9 51.0 11.8
NII 40.2 38.1 29.0 38.7 5.4
Other Income 0.1 0.0 0.1 36.4 144.2
Total Income 40.3 38.2 29.0 38.7 5.5
Operating Expenses 11.4 12.4 11.3 1.3 -8.3
PPP 28.9 25.7 17.8 62.4 12.2
Provisions 0.0 0.0 0.0
PBT 28.9 25.7 17.8 62.4 12.2
Tax Expenses 8.5 7.0 5.1 66.1 22.0
PAT 20.3 18.7 12.6 60.9 8.6
Balance Sheet
Capital 20 20 20 0.0 0.0
Reserves and surplus 428 407 366 17.0 5.2
Net Worth 448 427 386 16.1 4.9
Borrowings 4817 4315 3144 53.2 11.6
TOTAL LIABILITIES 5265 4742 3530 49.2 11.0
Loans 5355 4864 3592 49.1 10.1
TOTAL ASSETS 5355 4864 3592 49.1 10.1
Spread Analysis
Yield On Advances 11.3 11.3 11.5
Cost of Borrowings 9.3 9.2 9.4
Spread 2.1 2.1 2.1
NIM 3.0 3.1 3.2
ROE% Break-Up
ROA 1.5 1.5 1.5
Total Assets/ Total Equity 12.2 11.6 10.3
ROE(%) 18.2 17.6 15.9

18
CAN FIN HOME
Financials & Assumption
PROFIT &LOSS ACCOUNT(RsCr) 2010 2011 2012 2013 2014E
InterestEarned 208 226 279 379 586
InterestExpenses 145 154 196 283 424
NII 63 72 84 96 162
Other Income 9 5 8 14 0
Total Income 71 77 91 110 162
Operating Expenses 17 17 23 36 48
PPP 54 60 68 74 114
Provisions -1 1 7 -1 0
PBT 55 58 61 75 114
Tax Expenses 16 16 17 21 34
PAT 39 42 44 54 80
BALANCESHEET ITEMS(RsCr)
NetWorth 275 311 348 392 463
Borrowings 1865 1904 1982 3073 5309
Loans 2167 2250 2673 4012 6600
SPREAD ANALYSIS(%)
YieldOnAdvances 10.7 10.5 10.7 9.8 11.3
Costof Borrowings 9.9 8.1 9.9 9.2 9.3
Spread 0.8 2.4 0.8 0.6 2.0
NIM 3.1 3.2 3.1 2.4 3.0
EFFICENCY RATIO(%)
Operating Expenses toTotal Income ( CI Ratio) 24.4 22.3 25.2 32.8 30.0
NII toLoanfund 2.9 3.2 3.1 2.4 0.8
Loantoborrowings 116.2 118.2 134.8 130.6 111.2
VALUATION
Book Value(Rs) 134 152 170 191 226
P/B(x) 0.6 0.7 0.7 0.7 0.8
P/E(x) 4.2 5.2 5.2 5.2 4.8

DB CORP
1M 1yr YTD
Absolute -6 22 0
Rel. to Nifty -7.32 11.3 -0.002
Promoters 74.96 74.97 74.98
FII 17.73 16.46 14.66
DII 2.95 4.00 5.34
Others 4.36 4.57 5.02
Financials
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 518.2 438 18.3 438.9 18.1
EBITDA 153.8 112.5 36.7 122.8 25.2
PAT 93.57 63.2 48.0 73.2 27.9
EBITDA Margin 29.7% 25.7% 400bps 28.0% 170bps
PAT Margin 18.1% 14.4% 370bps 16.7% 140bps
19
This judgment will work as a dampener for newspaper industry as well as DB CORP.
Company’s EBITDA margin will be effected very negatively not only in FY15E but also
next few or more years. Therefore we downgrade DB CORP from `BUY’ to `NEUTRAL’
6261.65
Stock Performance During the quarter, company has seen 18.2% revenue growth from its advertisement,
14% from circulation and 25% from Radio business on YoY basis. Management
expressed its interest regarding inorganic expansion in near future to maintain its
healthy growth across all segments.
Average Daily Volume 25750
Nifty
3QFY14E Earning Performance:
Stock Performace with Nifty
Rs, Crore
Management Commentary:
According to management, Company will maintain a pragmatic approach towards
operational controls and higher efficiency. DBCORP will continue to capitalize its
consumption potential of Tier 2 and 3 cities. And they are studying on marketing
strategies of niche brands in Tier 2 and 3 cities. Company is expected to launch its Bihar
edition on 19 Jan, 2014, and we expect to see some part of additional revenue from
Bihar edition by 4QFY14E and also expect to see breakeven in 3 to 4 years.
View and Valuation:
In view of upcoming general election, we expect government ad spending to go up
substantially. Provision of TRAI’s 12 minutes ad cap would provide revenue visibility to
print media players, being one of the largest players DB Corp will be strong beneficiary
in near future. But Considering latest update regarding directing implementation of
the recommendations of the Majithia Wage Boards for journalists and non-journalists
of newspapers and news agencies, earning visibility could not be promising. Wages
hike and payment of arrers will create huge burden to the profit and loss A/C of the
company as well as margin shape. And it may hamper company's plan for investing in
regional market in future because it needs internal cash flow. Therefore we are
downgrading this stock from`BUY' to `Neutral'.
This would create huge financial burden to a industry already facing problems of rising
raw material prices. One the other hand most of newspaper venturing into reginal
market in search for better sales volume and margin.
Previous Target Price 340
Upside -
Latest update Neutral
"Waging war on Print media"
The Supreme Court upheld the constitutional validity of the November 11, 2011 Union
government notifications, directing implementation of the recommendations of the
Majithia Wage Boards for journalists and non-journalists of newspapers and news
agencies.
This will act as a huge negative for newspaper industry. They have to pay all arrears up
to March 2014.It will be paid in four equal installments within one year from
November 11, 2011.
CMP 301
Target Price
52wk Range H/L 321.50/210
5521Mkt Capital (Rs Crores)
Market Data
BSE Code 533151
NSE Symbol DBCORP
"Neutral"
7th March' 14

20
DB CORP
Revenue Geography-wise Revenue Segments
Financials;
Rs,cr FY10 FY11 FY12 FY13 FY14E FY15E
Sales 1062.1 1265.18 1451.51 1592.32 1861.91 2176.94
RM Cost 327.87 383.91 508.04 544.54 623.74 740.16
WIP -0.0016 -0.06 -0.04 0.03 -1.86 -2.18
Employee Cost 131.81 184.56 242.93 279.5 307.21 380.97
Ad Spend 12.98 12.52 15.04 17.21 22.34 23.95
Other expenses 161.24 185.2 216.06 234.07 260.67 315.66
Total expenses 720.03 862.13 1105.03 1210.25 1371.5 1656.7
EBITDA 342.07 403.05 346.48 382.07 490.5 520.3
Depreciation and Amortisation 37.83 43.28 50.57 58.06 64.5 75.4
Other Income 11.15 14.18 24.02 21.34 27.9 28.3
EBIT 304.24 359.77 295.91 324.01 426.0 444.9
Interest 35.69 15.3 9.23 7.99 8.0 5.1
PBT 279.70 358.65 310.7 337.36 445.9 468.1
Tax Exp 105.72 99.97 98.32 113.18 156.1 163.8
PAT 173.98 258.68 212.38 224.18 289.8 304.3
Growth-% (YoY)
Sales 10.5% 19.1% 14.7% 9.7% 16.9% 16.9%
EBITDA 132.2% 17.8% -14.0% 10.3% 28.4% 6.1%
PAT 265.4% 48.7% -17.9% 5.6% 29.3% 5.0%
Expenses on Sales-%
RM Cost 30.9% 30.3% 35.0% 34.2% 32.0% 34.3%
Employee Cost 12.4% 14.6% 16.7% 17.6% 16.6% 17.0%
Ad Spend 1.2% 1.0% 1.0% 1.1% 1.2% 1.1%
Event Expenses 1.1% 1.3% 1.0% 0.8% 0.8% 1.0%
consumption of store & spare 4.8% 4.6% 5.8% 6.0% 6.0% 6.2%
Distribution expenses 2.1% 1.7% 1.7% 1.8% 1.8% 1.9%
Other expenses 15.2% 14.6% 14.9% 14.7% 14.0% 14.5%
Tax rate 10.0% 7.9% 6.8% 7.1% 8.4% 7.5%
Margin-%
EBITDA 32.2% 31.9% 23.9% 24.0% 26.3% 23.9%
EBIT 28.6% 28.4% 20.4% 20.3% 22.9% 20.4%
PAT 16.4% 20.4% 14.6% 14.1% 15.6% 14.0%
Valuation:
CMP 239 246 219 212.1 301 301
No of Share 18 18 18 18.33 18.33 18.33
NW 649 829 927 1029 1180 1344
EPS 9.6 14.1 11.6 12.2 15.8 16.6
BVPS 36 45 51 56 64 73
RoE-% 27% 31% 23% 22% 25% 23%
P/BV 6.7 5.4 4.3 3.8 4.7 4.1
P/E 24.9 17.4 18.9 17.3 19.0 18.1

Hindustan Zinc LTD.
123
148
148
20%
0%
500188
51929
5192
6329
Robust Q3FY14 Performance :
1M 1yr YTD
Absolute 4.3 -1.7 -3.4
Rel. to Nifty 0.0 9.2 11.3
Promoters 64.9 64.9 64.9
FII 1.8 1.8 1.5
DII 31.4 31.4 31.5
Others 1.8 1.8 2.1
Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY14
Net Revenue 3450 8.6 -9.8 3178 3826
EBITDA 1824 22.1 -3.1 1494 1883
Depriciation 210 18.6 12.9 177 186
Tax 305 50.2 20.1 203 254
PAT 1723 6.8 5.1 1613 1640
(In Crs)
21
Good gains ahead
Stock Performance-%
1 yr Forward P/B
Source - Comapany/EastWind Research
Nifty
BUY
Market Data
Average Daily Volume (Nos.)
BSE Code
Result Update
52wk Range H/L
CMP
Target Price
NSE Symbol
Mkt Capital (Rs Crores)
142/94
Upside
Hindustan Zinc’s (HZL) Q3FY14 performance was inline to our estimates on the back of
healthy zinc sales volumes and higher metal premiums. Total operating income for
Q3FY14 stood at Rs. 3450.1 crore higher by 8.6% YoY but lower by 3.1% QoQ. Total zinc
sales in Q3FY14 came in at 196,000 tonne, up 17% YoY and 2% QoQ . The company
realised premium on metal sales amounting to $241/tonne for zinc (Zn) & $305/tonne for
lead (Pb) . Lead sales volume for the quarter stood at 23500 tonnes (lower by 24% QoQ
and 22% YoY), while silver sales volumes stood at 78500 kg (lower by 31% YoY and 14%
QoQ) . EBITDA came in at Rs.1823.8 crore and inline to our estimate of Rs. 1829.6 crore.
Subsequently, net profit stood at Rs. 1722.7 crore .
HINDZINC
Zinc fundamentals are becoming attractive with suppotive lead prices brings a positive
outlook for Hindustan Zinc.With a cash-rich balance sheet and strong visibility over
production growth of zinc, lead and silver over FY2013-15, we are positive on HZL.Being
an integrated & dominant player in the domestic industry with low cost of production,
the company is poised to benefit in the long run. Now the stock is trading at 1.6x in one
year forward P/B we estimated it at 1.8x for 2015.At current level we see a significant
growth in the stock. We valued & reaffirm our positive stance on HZL and assign a BUY
rating to the stock with a target price of Rs. 148/-.
Zinc market was bearish during last consecutive years having surplus in inventory, but
now sentiment is slowly turning positive showing some uptrends in Zinc LME prices.
Visible inventories on the London Metals Exchange, as well as on the Shanghai Futures
Exchange, are down about 30% over the last year. And zinc demand is increasing steadily.
We believe Zinc price will be the core fundamental behind the Hindustan zinc’s bull story
in the coming years. We see a improving volume of production through FY15.More So
Govt. The attorney-general’s clearance for the Centre’s proposal to divest its residual
stake in Hindustan Zinc Ltd (HZL) lifted the Street’s mood. Again the board delayed this
process and guided investors that disinvestment of government's remaining stake in
Hindustan Zinc will happen next fiscal year. Stake sale in HZL again seems to be back
burner now. We also see gradual and sustainable recovery in global macro Scenario
which supports a positive cycle in industrial metals. So, we believe there exists a strong
case for significant earnings estimate for Hind Zinc in coming months.
Valuation & Recommendation
"BUY"
6th March' 14
0
50
100
150
200
250
300
350
400
450
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14

Lower Production Guideline LME Price/Ton
Key Concerns
A.
B.
C.
LME Price/Ton
D.
E.
Key Triggers for Growth
A. Company is tracking on 95% capacity utilization.
B.
C.
D. LME Price/Ton
E.
F.
G.
H. Zinc premium reaches six year high as inventories shrink
I. Fees that zinc smelter charge to refine the metat that probably to increase 5%.
22
Hindustan Zinc LTD.
Volatile Desel Price and high Sulphuric acid price affecting the company,s PAT adversly.
A reason to wait and watch , is since the government is looking at auction, how much
will Vedanta be able to garner and what price it is willing to pay is not known.
HZL has marginally downward revised its mined metal production guidance for FY14 from
950,000 tonnes earlier to 900,000 tonnes. This reflects slower-than-expected ramp up of
underground mining projects and some changes in mining sequence wherein preference
has been given to primary mine development during this period.
HZL’s revenues are directly linked with the global market for products essentially, Zinc
and Lead which are priced with reference to LME prices and Silver to LBMA (London
Bullion Metal Association) prices.
Lower than expected demand by galvanizing industries for zinc and industrial batteries,
car batteries industries for lead would affect the company estimates.
Disruptions in mining due to equipment failures, unexpected maintenance problems ,
non-availability of raw materials of appropriate price, quantity and quality for energy
requirements, disruptions to or increased cost of transport services or strikes and
industrial actions or disputes.
Captive plants enjoy the lower Tax rate and company enjoys zero tax from tax free
geographycal areas.
The Rampura Agucha underground mine project is operational via ramps (tunnel driven
downward from the surface) and commercial production already ramp up in Q3 and will
in Q4 of FY14 . The Kayad mine project will also commence commercial production in
the current fiscal year.
A cash-rich balance sheet, low cost of production and inexpensive valuations make HZL
an attractive bet at the current price levels.
Disinvestment of government's remaining stake in Hindustan Zinc and Bharat
Aluminium (Balco) will happen next fiscal year .
In the past Vedanta Group has said it wanted majority control when Vedanta had earlier
offered Rs 149 a share . If this is any benchmark,then investors will stand to gain.
Smelting Plants are improvised and management is confident that the smelting plants
will maintain their stance for the coming quarters also.
0
200
400
600
800
1000
1200
1400
1600
1800
Jan-13
Feb-13
Mar-13
Apr-13
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Jun-13
Jul-13
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Sep-13
Oct-13
Nov-13
Dec-13
Silver(rs/ounce)
0
20000
40000
60000
80000
100000
120000
140000
160000
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Lead
90000
95000
100000
105000
110000
115000
120000
125000
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Zinc

FY11 FY12 FY13 FY14E
9912 11405 12700 13577
979 1543 2032 1787
10891 12948 14732 15364
1023 1228 1070 1291
492 568 696 707
4417 5336 6218 6484
5496 6069 6482 7093
475 611 647 718
19 14 29 37
1059 1419 921 1097
4900 5526 6899 6967
22.0 21.0 21.0 19.0
FY10 FY11 FY12 FY13
423 845 845 845
17701 21688 26036 31431
18124 22533 26881 32276
478 475 410 484
340 567 504 825
20238 25053 29485 35465
109 109 47 10
6071 7145 8466 8474
1113 875 445 1082
361 594 876 1898
452 762 798 1111
152 209 332 403
928 5633 5255 6942
96 158 233 373
20238 25053 29485 35465
FY10 FY11 FY12 FY13
3.2 2.2 2.1 1.7
95.6 11.6 13.1 16.3
1.9 2.1 2.9 3.2
6.0 4.8 3.6 3.8
0.6 0.8 0.7 0.9
FY10 FY11 FY12 FY13
4001 4483 4553 4935
77 -212 -61 -183
4077 4272 4492 4752
-3881 -3658 -3499 -3234
-187 -363 -1242 -1257
8 250 -248 262
23
Short-term loans and advances
Total Assets
P/B
EPS
RATIOS
EBIDTA & Margin :
Inventories
Trade receivables
Cash and bank balances
CASH FLOWS
Debtor to Turnover%
Cash From Investment
Cash from Finance
Net Cash Flow during year
Creditors to Turnover%
Inventories to Turnover%
Cash from Operation
Changes In Working Capital
Net Cash From Operation
Total liabilities
Intangibles
Tangible assets
Capital work-in-progress
Long-term loans and advances
ZinC Productions:
Expenditure
Trade payables
Short-term provisions
B/S PERFORMANCE
Share capital
Depriciation
PAT
ROE%
Hindustan Zinc LTD.
Reserve & Surplus
Total equity
Interest Cost
Net tax expense / (benefit)
Repairs
EBITDA
P/L PERFORMANCE
Net Revenue from Operation
Other Income
Total Income
Power, fuel & water
43 43
41
49
42
49
47
0
10
20
30
40
50
60
0
500
1000
1500
2000
2500
EBIDTA
EBIDTA %
0
50000
100000
150000
200000
250000
Zinc Production
(tons)
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
500
1000
1500
2000
2500
3000
3500
4000
4500 Net
Revenue
from
Operatio
n
Revenue
Growth

Voltas Ltd.
CMP 139
Target Price 125
Previous
Target Price
95
Upside -10%
Change from
Previous
32%
BSE Code 500575
NSE Symbol VOLTAS
52wk Range
H/L
65/143
Mkt Capital
(Rs Crores)
4,609
Nifty 6,329
1M 1yr YTD
Absolute 28.5 75.2 84.2
Rel. to Nifty 23.1 64.0 72.9
Promoters 30.3 30.2 30.2
FII 15.2 14.5 18.1
DII 29.8 29.8 25.6
Others 24.8 25.6 26.1
24
Management comment on above JV :
Downgrade to "Neutral"…….
What New...???
Market Data
Company update Neutral
Voltas Ltd has proposed to form a new joint venture (JV) company named –“ Voltas Water
Solutions” which will have equal capital contribution from “Voltas” and “Dow Chemical Pacific”
(Singapore) Pte (Dow). This JV company will market and distribute standard packaged Water
Treatment Systems and Waste Water Treatment Systems of capacity up to 20 m 3/hour, to
residential and commercial complexes and light industrial markets in the Indian subcontinent.
The entity's operations would include designing, procuring, testing, marketing, selling and
servicing of such standard water treatment systems and waste water treatment systems.
1 yr Forward P/B
Stock Performance-%
About Dow Group :
Dow Chemical Pacific (Singapore) Pte Ltd was established in 1992. Catering to customers in Asia
Pacific, particularly South East Asia, Dow Group combines the power of science and technology to
passionately innovate what is essential to human progress. The company is driving innovations
that extract value from the Intersection of chemical, physical and biological sciences to help
address many of the world's most challenging problems such as the need for clean water, clean
energy generation and conservation, and increasing agricultural productivity. The company's
integrated, market-driven, industry-leading portfolio of specialty chemical, advanced materials,
agrosciences and plastics businesses delivers a broad range of technology-based products and
solutions to customers in high growth sectors such as packaging, electronics, water, coatings and
agriculture.
Valuation :
The company has been evaluating strategic alternatives since 2012, we believe the company is
not inclined to sell at valuations multiple of 2 times of its FY15E book value. We estimate that at
the lower end of management's guidance this translates into a 12.1%/12.7% RoE forFY14/15E.
We believe management is attempting to be conservative regarding the guidance for FY14 &
FY15, but even with a 60/90 bps improvement in the operating margin the RoE would be
approximately 12.1%/12.7% for FY14/15E , which we believes would translate into a P/B multiple
of approximately 2.0x – to 2.2x. This translates to a 12 month price target of approximately Rs.
120 based on our FY14E BVPS of Rs. 59. However, If the company if things will going positively we
could rationalize valuations near Rs. 145 per share, but we don't believe buyers would be willing
to pay a premium to BVPS more than 2 times at this time. We are downgrading Voltas to Neutral
given the recent rise in its share price following 3QFY14 earnings and revised our price target
to Rs. 120.”
Water has been identified as a key focus area for the Tata group. With its unrivalled know-how
and technological leadership in the water treatment space, the partnership, will help Voltas
Water Solutions cater to the growing water treatment requirements of the Indian subcontinent.
They further believe that partnership will simultaneously leverage the brand and distribution
strength of Voltas, along with the technology prowess of the water and process solutions division
of the Dow Group.
Our View on said JV :
In today scenario major Water and Waste Water Treatment market is mostly and largely catered
by unorganized players. And the market which is targeted by this new joint venture will provide a
branded and differentiated product line in the sector, with a focus on quality and service
delivery.
Average Daily Vol. (Nos.) 624,126
"Neutral"
6th Mar' 14

25
Ammount in crore
INR in crores (Source: Company/Eastwind)
Voltas Ltd.
Key financials :
Ammount in crores (Source: Company/Eastwind)
Ammount in crores (Source: Company/Eastwind)
PARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E
Performance
Revenue 4326 4757 5191 5186 5531 5320 5852
Other Income 94 78 58 98 90 84 100
Total Income 4420 4836 5250 5284 5621 5404 5952
EBITDA 283 460 463 336 245 261 296
EBIT 262 438 442 303 217 237 268
DEPRICIATION 21 21 21 34 28 24 28
INTREST COST 11 10 17 31 40 35 42
PBT 372 532 524 219 280 286 326
TAX 117 147 172 57 73 74 85
Extra Oridiniary Items 26 25 40 -150 12 0 0
Reported PAT 255 385 352 162 207 211 241
Dividend (INR) 73 73 73 73 73 54 54
DPS 2.2 2.2 2.2 2.2 2.2 61.5 61.5
EPS 7.7 11.6 10.6 4.9 6.3 6.4 7.3
Yeild %
EBITDA % 6.5% 9.7% 8.9% 6.5% 4.4% 4.9% 5.1%
NPM % 5.8% 8.0% 6.7% 3.1% 3.7% 3.9% 4.0%
Earning Yeild % 16.2% 6.5% 6.2% 4.4% 8.3% 4.4% 5.0%
Dividend Yeild % 4.7% 1.2% 1.3% 2.0% 2.9% 42.4% 42.4%
ROE % 32.2% 35.4% 25.8% 11.0% 12.7% 11.9% 12.3%
ROCE% 27.3% 35.2% 24.6% 11.4% 13.1% 12.3% 13.0%
Position
Net Worth 790 1085 1362 1478 1626 1775 1955
Total Debt 181 35 137 223 261 225 225
Capital Employed 971 1120 1498 1701 1887 2000 2180
No of Share (Adj) 33 33 33 33 33 33 33
CMP 48 178 172 112 75 145 145
Valuation
Book Value 23.9 32.8 41.2 44.7 49.1 53.7 59.1
P/B 2.0 5.4 4.2 2.5 1.5 2.7 2.5
Int/Coverage 23.8 44.5 26.7 9.6 5.5 6.8 6.4
P/E 6.2 15.3 16.1 22.9 12.1 22.7 19.9

Narnolia Securities Ltd
402, 4th floor 7/ 1, Lords Sinha Road Kolkata 700071, Ph
033-32011233 Toll Free no : 1-800-345-4000
email: research@narnolia.com,
website : www.narnolia.com
Risk Disclosure & Disclaimer: This report/message is for the personal information of
the authorized recipient and does not construe to be any investment, legal or taxation
advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any
action based upon it. This report/message is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or
redistributed to any other person in any from. The report/message is based upon publicly
available information, findings of our research wing “East wind” & information that we
consider reliable, but we do not represent that it is accurate or complete and we do not
provide any express or implied warranty of any kind, and also these are subject to change
without notice. The recipients of this report should rely on their own investigations,
should use their own judgment for taking any investment decisions keeping in mind that
past performance is not necessarily a guide to future performance & that the the value of
any investment or income are subject to market and other risks. Further it will be safe to
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