India Strategy

Recovery in sight, challenges remain

Amnish Aggarwal [email protected] 91-22-6632 2233

February 24, 2025 1

 India Strategy

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 India Strategy
February 24, 2025 Recovery in sight, challenges remain
Top Picks NIFTY has declined by 4.8% since our last report (Jan10,2025) in an
Large Cap environment of tepid consumer demand, weak currency and geopolitical
ABB India headwinds post resumption of office by President Trump in USA. Currency and
Bharat Electronics FII lead headwinds abound as trade deficit is all set to cross USD250bn while
Bharti Airtel decline in net FDI flows (USD38bn in FY22 to 0.5bn USD in FY25 YTD) is

Britannia Industries pressuring INR. While RBI has spent USD70bn+ in supporting INR, FII selling has
also led to tight liquidity in markets.
Cipla
ICICI Bank
We expect gradual recovery in domestic demand as 1) food inflation has
Infosys
peaked (declined from 10.9% in Oct 24 to 6% currently) 2) 25bps cut in repo
InterGlobe Aviation
rate by RBI and OMO will ease liquidity in next 3-6 months 3) Rs1000bn income
Kotak Mahindra Bank
tax cut for consuming class in India 4) increase in religious tourism and 5) 17%
Larsen & Toubro
higher Govt capex allocation (including PSU and allocation to states).
Mahindra & Mahindra
Maruti Suzuki India is unlikely to have any meaningful negatives of US policies as soft crude
Reliance Industries oil prices, geopolitical stability (If Russia-Ukraine war stops) and increased
Titan Company transfer of technology to India will neutralize costs of Trump tariffs. We expect
markets to remain volatile in the near term but stabilize towards the end of
Mid / Small Caps
4Q25. We expect the impact of various Govt initiatives and monsoons (normal
Aster DM Healthcare
monsoons as per APEC climate center South Korea) to start getting reflected
Astral Ltd. in improved consumer demand in 2Q26.
Chalet Hotels
Crompton Greaves Consumer Electricals We believe India Capex story (Capital Goods, Infra, Ports, EMS, New Energy,
DOMS Industries Data centers, Railways, Defense), Healthcare (Hospitals, Pharma), Tourism
Ingersoll-Rand (India) (Aviation, Hotels, Accessories), Discretionary consumption (E-com, Jewellery,
Kaynes Technology India Food Services, Retail), Financialization (Capital market entities, Digital Public
Max Healthcare Institute Infra) are some of the key themes to play for long term gains. We cut our base
Polycab India case NIFTY target to 25689 (27172 earlier) on Nifty EPS cut by 0.8/2.0/2.6% for
FY25/26/27. We recommend selective buying for LT gains.
Model Portfolio v/s Nifty
3Q25 - PL coverage PBT up 3.3%, FY25-27 EPS cut 0.8-2.6%
Model
Returns Nifty Perf.
Portfolio
▪ NIFTY EPS has seen a cut in EPS by 8.9% and 8.6% for FY25/26 since July24.
Since
128.9% 109.5% 19.4% The EPS for FY27, which was introduced in Oct24, has seen a cut of 5%. The
Nov'18
number of stocks in NIFTY, which have seen downgrades in EPS (Hurdle rate
Since
Last -5.4% -3.7% -1.6% 1% on both sides), has risen from 21 in Feb24 to 30 in 3Q25. NIFTY has shown
Report a decline of 3.5% YTD amidst heavy selling by FII’s amidst an environment of
Since slow demand, pressure on currency and tight domestic liquidity.
3.0% 2.5% 0.4%
Apr'24

Source: PL ▪ PL universe 3QFY25 numbers were in line with sales beat of 1.8% while EBIDTA
and PBT grew 5.4% and 3.3% (lower by 0.6%/ 0.8% than PLE). Ex-BFSI EBIDTA
increased 3.8% YoY while PBT increased 3.3%. Ex-O&G EBIDTA increased 7.4%
while PBT increased 8.1% YoY.
Amnish Aggarwal
[email protected] | 91-22-66322233
▪ Hospitals, Media, Telecom and O&G had beat in sales while metals, Telecom
and pharma had max beat in EBIDTA. Auto, building material, Logistics and
Travel had max miss in EBIDTA. Travel, Hospitals, EMS, Capital Goods,

February 24, 2025 3

 India Strategy

▪ Durables, Pharma and Telecom had double digit topline and EBIDTA growth.
Cement, building materials had double digit decline in EBIDTA. Margin
pressure was intense in Building Materials, cement, Consumer staples, metals
and travel. Capital Goods, consumer durables, EMS, Hospitals, Media, Pharma,
telecom and Travel had double digit PAT growth.

▪ Capital Goods have positive outlook, led by sustained GOI focus on capex.
Hospitals and Pharma continue to have growth bias. We expect pick up in
domestic demand given tax rate cuts, lower inflation and interest rate cuts
which should benefit Auto, Hotels, Airlines, Durables/ electronics, QSR,
Apparel, Footwear, Building Material, Household Goods, Paints and AMC’s.

▪ There were 27 rating upgrades and 7 rating downgrades aided by steep stock
price corrections. Capital Goods, Chemicals, Oil &Gas, Travel and EMS led with
5,4,4,3 and 3 upgrades respectively.

▪ Major Rating Upgrade: Eicher, ABB, Cummins, Havells, SRF, Keynes, Mphasis,
ONGC, GAIL, Chalet, Interglobe Aviation and VIP Inds.

▪ Major Rating Downgrade: Bharat Forge, Green Panel, Grindwell Norton, PVR.

▪ Major Estimates Upgrade – Divis, Fortis, Doms, Aarti, Navin and BPCL.

▪ Estimate Downgrade – Tata Motors, Bharat Forge, IIB, Green Panel, BEML,
BHEL, carborundum, Grindwell, Praj, Ambuja Cement, Shree Cement, RR
Kabel, Havells, SRF, RBA and Jubilant Foods.

▪ NIFTY EEPS has seen a cut of 0.8/2.0/2.6% for FY25/26/27 with 13.1% CAGR
over FY24-27 (14.1% earlier) and EPS of Rs1147/1305/1473. Our EPS estimates
are lower than consensus by 2/2.4/3.2% for FY25/26/27. NIFTY is currently
trading at 17.5x 1-year forward EPS, which is at a discount of 7.4% to 15-year
average of 18.9x.

▪ Base Case: We value NIFTY at 5% discount to 15-year average (18.9x) PE at 18

with Dec 26 EPS of 1431 and arrive at 12-month target of 25689 (27172 earlier).
Bull Case: We value NIFTY at PE of 18.9x and arrive at bull case target of 27041
(29263 earlier). Bear Case: Nifty can trade at 10% discount to LPA with a
target of 24337 (25082 earlier).

▪ Model Portfolio: We are turning overweight on Consumer on expected uptick

in demand following tax cuts, decline in food inflation and cut in repo rate. We
increase wight in Banks and Healthcare. We are adding Cipla and Astral Poly
in the Model portfolio. We are increasing weight on Maruti Suzuki, ICICI Bank,
Kotak Mahindra Bank, ABB, Bharat Electronics, Interglobe Aviation, ITC and
Bharti Airtel. We are reducing weights in L&T, Titan, HUL, RIL, HCL Tech, HDFC
AMC and small adjustment in others.

▪ High Conviction Picks: We are removing Ambuja Cement, Siemens, Lemon

Tree, Praj, Jindal Stainless, Cyient and Cyient DLM from conviction picks,
although we remain positive on Siemens, Lemon tree and Praj in LT. we are
adding ABB, Astral Poly, Chalet Hotels, Cipla, Ingersoll Rand, Keynes Tech, and
Maruti Suzuki in Conviction picks.

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 India Strategy

Poor FDI, global headwinds drive FII selloff

India has seen maximum FII selling in the entire emerging Asia YTD amounting to
USD 8.2bn. simultaneously we have seen around 5% INR depreciation against USD
in the past few months. It is like a chicken and egg situation, and it is very difficult
to ascertain the key driver of current FII selling in India. There has been continued
FII selling, with India witnessing $8.2B in outflows YTD, the highest in emerging
Asia (vs. South Korea: -$0.2B, Taiwan: -$1.3B, ASEAN: -$1.2B). We analyze the
probable angles to this entire puzzle:

▪ Indian markets have seen lower attractiveness due to 1) Lower growth and rich
valuations in comparison to other markets 2) higher return breakeven as ~4.5%
interest rates of US 10 year and natural INR depreciation have raised
breakeven returns to more than 10%.

▪ Net FDI has collapsed to a 17-year low of $10.1 Mn in FY24 ($0.5 Mn in

FY25YTD and likely to be below in single digits in full-year FY25). India’s FDI
flows are putting pressure on INR as rising repatriation and outbound direct
investment affect net FDI inflows.

▪ The RBI is expected to adopt a more intervention-light stance (USD80bn

spent to control INR Depreciation), allowing a gradual rupee adjustment while
using targeted measures (FX swap windows, export conversion rules) to
manage volatility. While the potential inclusion of India in the BBG Global Agg
Index in H2CY25 could provide a $3bn inflow, INR weakness is likely to persist
in the near term.

▪ We now forecast USD/INR at 88.50 by Q4 FY25, as persistent capital outflows

keep INR fragile.

Poor FDI inflow, stake sale/ PE exits hurt net FDI flows

India’s capital account is at the center of external imbalances, with foreign direct
investment (FDI) trends turning increasingly unfavorable at a time when the
economy needs capital to fund its current account deficit and fund its growth
plans. Historically, FDI was seen as a driver of technology transfer, productivity
gains, and local industry linkages, but over the past couple of years, these spillover
benefits have dissipated as repatriation has outpaced inflows.

▪ Gross Inward FDI Drops 8% YTD, outbound FDI Surges 73.8%: At $26.8B in
FY24, gross inward FDI has fallen to an 11-year low, falling by ~53% from a peak
of USD56.2bn in FY22. The FDI in FY25 YTD is $16.0B versus $17.4B in
FY24YTD, a decline of 8.15%. However, the real structural shift is in gross FDI
outflows, which surged to $15.5B in FY25YTD (vs. $8.9B in FY24YTD), an
increase of 73.8% (FY25E > $22B). This surge is largely driven by increased
repatriation of foreign investments by MNC’s and private equity players and a
rising trend of resident companies investing in overseas assets.

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 India Strategy

FDI Inflows Decline to $27 Bn Net FDI inflows likely to be below $10 Bn in FY25

Inflow (USD Bn) Outflow (USD Bn) Net FDI (USD Bn)

60 56 55 56 50 43 44
50 45 42 39
43 42 40 36 36
39 31 30 31
40 35 28
31 30
27 16 22
30
18 17 20
20 13 13 11 14 17 16 10
9.2 8.9 6.6 9.1 9 8.5
10 4.0 10
0.5
0 -

FY25YTD
FY14
FY15
FY16

FY18
FY19
FY17
FY25YTD
FY18
FY14

FY15

FY16

FY19
FY17

FY24YTD
FY20

FY23
FY24YTD

FY21

FY24
FY22
FY20

FY22

FY24
FY23
FY21

Source: CMIE, PL Source: CMIE, PL

▪ FY24 Net FDI at 17-Year Low, FY25YTD Net FDI turns flattish: India’s net FDI
fell to just $10 Bn in FY24, a 77% drop from its FY21 peak ($44B) and well
below the long-term average of $27B, marking its lowest level in 17 years. Net
FDI as a percentage of GDP declined to 0.27% in FY24, its lowest in 13 years,
down from 1.2% in FY12. Rising global protectionism, slowdown in global
economy and rising global interest rates led to lower FDI inflows.

Slowdown in FDI and Jump in Outflows wipe of Net FDI flows

Inflow (USD Bn) Outflow (USD Bn) Net FDI (USD Bn)
FY14 31 9.2 22
FY15 35 4.0 31
FY16 45 8.9 36
FY17 42 6.6 36
FY18 39 9.1 30
FY19 43 13 31
FY20 56 13 43
FY21 55 11 44
FY22 56 18 39
FY23 42 14 28
FY24 27 17 10
FY25YTD 16 16 0.5
FY24YTD 17 9 8.5
Source: CMIE, PL

▪ Big ticket stake sales/ Pvt equity exits inflate FDI outflows: FDI outflows
which stood at USD 6.6bn in FY17 and USD11bn in FY21 increased to USD 17bn
in FY24 and have been USD16bn in FY25YTD which is all set to cross USD20-
22bn in FY25. We note that several MNC’s parents and Private equity players
are exiting or have pruned stakes in the listed Indian companies to take
advantage of rich valuations and to reduce their debt, undertake buybacks
and expand in their home countries. This has resulted in a significant increase
in FDI outflows in FY25. We note that there have been big ticket exits like
Holcim exit from Ambuja Cement (USD 11bn), Glaxo stake sale in HUL
(Rs3.5bn), Hyundai IPO OFS (USD3.3bn), ITC Stake sale by BAT (USD2bn) etc.

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 India Strategy

Major foreign promotes/ PE players exit resulting in sharp rise in FDI outflows
Outflow
Company Details Year Sector
(US$ bn)
Jubilant Bhartia Group Coca-Cola is selling a 40% stake in its Indian bottling arm 1.47 2025 Consumer
Bharti Enterprises 24.5% stake in UK's BT Group 4.00 2024 Telecommunications
Hyundai Motor IPO - Hyundai Motor Company (HMC) by OFS of 142.2 mn shares 3.30 2024 Automobile
ITC Ltd British American Tobacco Sold a 3.5% stake (now at 25.5%) 2.00 2024 Consumer
Mankind Pharma Advent International exits via stake sale (BSV) 1.63 2024 Pharmaceuticals
Ge Vernova GVTD's sold 20.08% of their stake via Offer for Sales (OFS) 0.86 2024 Capital Goods
Reliance Industries Ltd. Acquisition of multiple foreign entities 0.66 2024 Multiple
ONGC Operating 2 oil projects in Venezuela 0.50 2024 Oil & Gas
Whirlpool Whirlpool Corporation had sold 24.7% stake in Whirlpool India 0.47 2024 Consumer Durables
Axis Bank Bain Capital sold its entire stake 0.43 2024 Bank
Ambuja Cements & ACC Ltd. Holcim Sold 63% / 4.5% of Ambuja Cement/ACC Ltd. to Adani group 10.50 2022 Cement
MAXHEALT KKR (Kohlberg Kravis Roberts & Co.) sold 27.5% of its stake 1.17 2022 Hospital
Hindustan Unilever Ltd.. GSK Sold its entire 5.7% stake 3.35 2020 Consumer
Source: PL

▪ Energy, Healthcare and Sea Transport see pick up in FDI: While broad-based
FDI trends remain weak, Renewable Power, Energy, Hospitals, Diagnostics and
Medical Equipment have seen sustained traction in FDI inflows. Infra, Software
and Hardware and Auto have seen a decline in FDI.

Top 10 High-Growth Sectors by FDI Inflows

Sectors FY24 (US$ Bn) CAGR (3%)
Computer S/W & H/W 7.97 -32.7%
Banking, Insurance etc. 6.64 9.5%
Infrastructure Activities 4.23 -18.7%
Trading 3.86 14.0%
Renewable energy 3.76 67.8%
Electricity energy 1.70 65.8%
Hospital & diagnostic centers 1.53 45.1%
Automobile 1.52 -2.4%
Sea transport 1.10 55.0%
Cement/ gypsum prod 0.61 444%
Medical and surgical appliances 0.48 91.4%
Mechanical/ engineering industries 0.42 72.0%
Source: CMIE, PL

Rising trade balance and decline in Forex reserves add to

INR volatility

▪ The broader external backdrop remains challenging, with rising global fiscal
stress, tightening US monetary conditions, and geopolitical risks. The India-
US 10-year yield spread narrowing from 450bps in 2022 to 219 bps currently,
which has further reduced INR asset attractiveness.

▪ Against this backdrop, the rupee has continued its depreciation trajectory into
2025, closing January at 86.64/USD and briefly breaching 87.5/USD in early
February before RBI interventions provided temporary relief.

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 India Strategy

RBI intervention leads to USD65bn decline in Forex reserves

Merchandise Service Trade Overall Trade
USD bn Forex Reserves
Trade deficit balance Balance
FY15 (138) 57 (81) 341
FY16 (118) 69 (49) 356
FY17 (109) 65 (44) 370
FY18 (159) 70 (89) 424
FY19 (182) 78 (104) 412
FY20 (155) 78 (76) 476
FY21 (101) 85 (16) 579
FY22 (191) 108 (84) 618
FY23 (265) 146 (118) 578
FY24 (240) 165 (75) 646
Q1FY25 (63) 38 (25) 652
Q2FY25 (74) 43 (31) 705
Q3FY25 (81) 50 (31) 640
Source: Trade Commerce, CMIE, PL

▪ RBI’s FX stance has shifted toward greater INR flexibility, likely reflecting (a)
accumulated rupee overvaluation over the past three quarters, (b) a decline in
FX import cover due to USD 80bn interventions since Oct-24, and (c) the
necessity for currency realignment given lingering rupee overvaluation. While
near-term INR volatility remains elevated, we maintain our USD/INR target of
87 by Mar-25, but FY26 forecast of INR90-92 seems more likely to post RBI’s
monetary policy easing and a more tolerant stance towards INR weakness.

▪ Merchandise trade deficit at USD215bn for 9mFY25 indicates an all-time high

number for FY25, which will be neutralized by steady growth in services
balance of USD180bn+. However, the trade balance at USD87bn seems on
the higher side with a likely deficit for the full year at USD125bn+.

▪ Trade dynamics will be crucial for FY26, with geopolitical risks and evolving
US-India trade relations shaping the outlook. The imposition of reciprocal
tariffs by the US from Apr-25 poses an external risk, though India-US trade
relations remain constructive, with the two nations working toward “Mission
500” – aiming to more than double total bilateral trade to $500B by 2030. The
upcoming Bilateral Trade Agreement (BTA), targeted for initial negotiations by
fall 2025, could provide clarity on trade flows, but near-term risks from tariff
uncertainty remain. State of global economy, more so in Europe holds key to
pick up in exports and trade balance in coming quarters.

FII’s selling amid global uncertainty, Weak INR

FIIs have pulled $20.2B from Indian equities and bonds since October 2024,
marking one of the steepest outflows in recent history. India has seen an outflow
of USD8.2bn, which is loins share of total FII outflows from emerging markets. The
lack of strong domestic buffers, persistent global uncertainty, tepid domestic
demand and sustained FDI outflows pose a near term risk to volatility in currency
and FPI flows in India.

▪ We have calculated the hurdle rate for FII investments in India and estimate
that the cut off rate has risen to 10.5% assuming 4% INR depreciation, capital
gains tax and 4.5% 10 -year US treasury rate in India.

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 India Strategy

Within EM Asia, India witnessed the largest FII outflows

FII Flows YTD ($ Billion)

-12 -10.9
-10 -8.2
-8
-6
-4
-1.3 -1.2
-2 -0.2 -0.1 -0.2 -0.2 -0.6
0

Indonesia
India

Taiwan

Philippines

ASEAN

Emerging Asia
Malaysia
South Korea

Thailand
Source: CMIE PL

▪ Historical data suggests that FII outflows peak within 4-9 months, and we
have seen one of the sharpest sell offs in recent times. Although uncertainty
with regards to global markets sustain, we believe the growth outlook in India
looks far better in FY26 than FY25. As the impact of budget starts getting
reflected in higher Capex on a low base and tax cuts and monsoons revive
consumer demand, we should see FPI flows turning positive. However, FDI
outflows remain a lingering problem which can pressurize INR and add to
volatility.

Impact of FII Outflows on Rupee Depreciation

Event Time FII Outflow ($B) Months of Selling Rupee Depreciation (%)
Global Tariff Wars/ Currency weakness Current 20.2 3 out of 4 months 2.7% (₹84.03 → ₹86.27)
Fed Tapering & Russia - Ukraine War Oct 2021- June 22 33.3 9 out of 9 4.2% (₹74.92 → ₹78.07)
COVID Crash March- May 2020 8.4 2 out of 2 Months 2.5% (₹75.35 → ₹76.24)
US - China Trade War, Domestic Slowdown Mar-19 4.1 2 out of 2 Months 3.4% (₹68.81 → ₹71.15)
Fed Tapering August - Oct 2018 5.3 3 out of 3 months 5.9% (₹69.55 → ₹73.63)
Source: PL

Nifty USD returns negative in 3Q and CYTD, forcing valuations to correct

Net FPI YE India YE US 10 India - US Nifty Return Capital Gains Return after USD Returns
USD/INR
(US$ mn) G-sec (%) Year (%) gap (%) (%) tax (%) CGT (%) (%)
FY18 3,381 65.2 7.40 2.74 4.66 10.2 10.0 9.22 8.67
FY19 1,543 69.2 7.35 2.41 4.95 14.9 10.0 13.44 6.90
FY20 (595) 75.6 6.14 0.67 5.47 -26.0 10.0 -23.43 -29.98
FY21 37,302 73.1 6.17 1.74 4.43 70.9 10.0 63.78 69.42
FY22 (17,093) 75.8 6.84 2.34 4.50 18.9 10.0 16.99 12.86
FY23 (5,971) 82.2 7.31 3.47 3.84 -0.6 10.0 -0.54 -8.27
FY24 25,267 83.4 7.06 4.20 2.86 28.6 10.0 25.75 23.90
Q1FY25 (1,009) 83.4 7.01 4.40 2.61 7.54 12.5 6.60 6.62
Q2FY25 10,569 83.8 6.75 3.78 2.97 7.50 12.5 6.56 6.04
Q3FY25 (11,788) 85.5 6.77 4.53 2.24 -8.39 12.5 -7.34 -9.22
CYTD (9,575) 88.0 6.69 4.51 2.19 -3.03 12.5 -2.65 -5.38
Source: PL

February 24, 2025 9

 India Strategy

India-US Trade: Beyond Tariffs, a Strategic Alliance

Beckons

India’s trade relationship with the US is entering a phase of recalibration, marked

by temporary tariff volatility but deepening long-term strategic relationship. The
reciprocal tariffs announced by the Trump 2.0 administration, incorporating non-
tariff barriers (NTBs), VAT structures, and exchange rate deviations, makes the
process more complex and its economic cost harder to quantify as of now. With
India's weighted average MFN tariff at 12%—the highest among G20 nations—it
is a prime candidate for scrutiny. India, alongside China, has been identified as
having some of the highest NTBs in Asia, including antidumping measures,
technical barriers, and sanitary regulations, as highlighted by the 2024 USTR
National Trade Estimate Report. However, structural factors mitigate the risk of a
major economic setback and showdown between India and USA

▪ Even if US tariffs on India rise to 15%-20% by April 2025, India’s key export
sectors—pharmaceuticals, electronics, jewelry, and textiles—operate within
low tariff differentials, reducing exposure to tariff escalation. India’s exports
are mitigated by a highly diversified export base by new trade routes through
Europe and the Middle East (IMEC).

Higher-Export Share Items to the U.S. Currently Face Lower Reciprocal Tariff Risks
FY24 Exports to USA $77.53 Exports Value Export Basket Mix (%) Tarriff Differentials
Share of above 3% in India's exports to USA
Drugs, Pharma 8.76 11.30% 9.30%
Pearls, precious, stones 6.57 8.48% 9.10%
Petroleum & crude products 5.83 7.52% 6.80%
Share of below 3% in India's exports to USA
Auto components/parts 1.86 2.40% 13.80%
Paper/wood products 0.95 1.22% 7.40%
Leather manufactures 0.85 1.10% 15.50%
Source: PL Research

▪ More importantly, broad tariff escalation contradicts US geopolitical

objectives, particularly in the Indo-Pacific strategy, which prioritizes supply
chain diversification away from China. Disrupting India’s trade flows would not
only undermine US efforts to counterbalance Chinese economic dominance
but would also destabilize US retail supply chains—especially in textiles,
where Bangladesh (Key supplier) is already in turmoil.

▪ The Modi-Trump summit underscored the broader economic and strategic

imperative - trade friction is a means to renegotiate terms, not a signal of
trade deterioration. Beyond tariffs, India and US are securing a trade deal by
end CY25 and strengthening its role as a key geopolitical and economic
partner to the US. These long-term gains outweigh short-term tariff
pressures.

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 India Strategy

▪ In a pre-emptive move, India’s FY26 Union Budget reduced import duties on

motorcycles among other items, a gesture Trump welcomed as a step toward
balanced trade. The joint statement from the US-India summit indicates that
India has committed to lowering tariffs on select US goods, including
pharmaceuticals, machinery, textiles, and farm products, while increasing
purchases of US oil, gas, and defense equipment.

Union Budget FY26 saw major reductions in custom duties

Commodities From To % Change
Precious Metals 25 6.4 -74%
IT and Electronics 9.4 3.8 -60%
Motorcycles 30 21.7 -28%
Jewelry 25 20 -20%
Motor vehicles 40 20 -50%
Laboratory Chemicals 150 70 -53%
Source: Budget Documents, PL Research

While tariff negotiations will remain a short-term market overhang, the structural
foundation of India-US trade remains intact, with high growth potential in
technology, defense, and nuclear energy. India’s ability to navigate tariff
negotiations, leverage its geopolitical positioning, and realign supply chains
ensures that this phase is a momentary recalibration, not a retreat.

Key highlights of Modi – Trump Summit: A Strengthened India-US Trade & Strategic Partnership

Source: PL

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 India Strategy

Key Sectoral Impact from Tariffs

Sector Impact Overview Key Risks Potentially Impacted Companies

Increased risk of Chinese dumping in India,

Dumping from China in industrial Apar (Cables and conductors), Praj (oil &
potential tariffs on steel. US reciprocal
consumables and machinery. gas modular process equipment), Triveni
Capital Goods tariffs and local manufacturing incentives
Reduce exports of electrical and turbine (Turbine aft mkt business), Elgi
could impact Indian exporters of industrial/
industrial goods. Equipment (oil-free air compressors).
electrical goods.

Minimal impact on Indian OEMs and 2W

Tractor OEMs (M&M) are vulnerable
manufacturers due to limited US exposure.
to customer shifts due to price rises. M&M (Tractors), Indian auto component
Tractor OEMs (M&M) face risk as US
Automobiles Component suppliers are at risk if manufacturers supplying to global
customers may switch to domestic brands.
global OEMs alter sourcing OEMs.
Auto component suppliers may be affected
strategies to avoid tariffs.
by global OEMs shifting supply chains.

Higher tariffs will increase export costs,

Increased costs and potential loss of
reducing Indian generics' competitiveness
price competitiveness in US. Higher
in the US market. Pharma companies may
operational expenses if production Indian generic drug manufacturers
Pharma consider US-based production, incurring
shifts to the US. $8.7bn pharma exporting to the US.
higher regulatory and labor costs. Market
exports to the US need strategic
adaptation through cost-cutting and
adjustments.
diversification is necessary.

US steel and aluminum tariffs raised to 25% Global trade realignment could
may disrupt global trade flows. Indian steel redirect material flows, impacting
exports to the US remain low, but improved global steel and aluminum markets. Beneficiaries: Jindal Stainless, JSW if US
US demand may benefit Indian producers. Possible price hikes in US industries, demand rises. Limited impact on coking
Metals & Mining
Aluminum price hikes may impact on US affecting automotive and beverage coal imports due to alternative sourcing
user industries. India’s coking coal imports sectors. India’s 10% tariff advantage and low duty.
from the US (8mt of 55mt total) face over China could be a competitive
minimal impact due to low 2.5% duty. edge.

Avalon Technologies (46% US revenue),

US semiconductor import tariffs could Tariff-driven cost increases in chip
Cyient DLM (major exposure to US,
EMS increase production costs for Indian imports may raise overall electronics
France, Israel) if US tariffs extend to
electronics firms. production costs.
PCBA/box build

Source: PL

February 24, 2025 12

 India Strategy

Tax Relief to Fuel Consumption

The Union Budget 2025-26 brought substantial relief to middle-income taxpayers
by restructuring personal income tax regime, raising the nil tax slab to ₹12 lakh and
rationalizing slabs, enhancing disposable incomes and reviving urban
consumption. The move reduces tax liabilities for 5.65 crore taxpayers, unlocking
~₹1 Lakh crore in savings.

Income Tax cuts likely to provide ₹3.3 Lakh Crore Consumption Boost
Total boost to consumption
Tax slabs Tax rate No. of Tax Payers (in Cr) Total tax savings (in Crore)
(in Rs Crore)
4L-8L 5% 3.73 11,222 37,032.60
8L-12L 10% 1.12 43,800 1,44,540.00
12L-16L 15% 0.42 11,589 38,243.70
16-20L 20% 0.19 13,009 42,929.70
20L-24L 25% 0.095 9,415 31,069.50
>24L 30% 0.098 10,788 35,600.40
Total - 5.658 99,103 3,29,415.9
Source: PL

▪ Income Tax Cuts to provide ₹1 Lakh Crore in Tax Relief: The policy provides
~₹1 Lakh crore in direct tax savings to 5.65 crore individuals, with the highest
individual benefit accruing to those earning above ₹24 lakh (₹1.1 lakh per
taxpayer). While this significantly enhances discretionary spending power, the
RBI’s latest monthly bulletin estimates a direct tax buoyancy of 1.25 in FY26,
down from 1.47 in FY25, reflecting revenue foregone due to tax cuts. Govt is
pinning hopes that increased consumption and secondary tax inflows will
largely compensate for the lower direct tax intake. Moreover, higher
consumption will increase capacity utilization and revive private sector capex.

▪ ₹3.3 Lakh Crore Consumption Boost: The estimated multiplier effect (3.33x,
based on MPC of 0.7) translates into a ₹3.29 lakh crore demand injection.
Taxpayers in the > 12 lakh bracket alone drive ₹1.47 lakh crore of this boost.
The effectiveness of this demand surge will depend on sectoral absorption
capacity.

▪ Progressive Increase in Per Capita Tax Savings Across Income Brackets,

Strengthening Urban Demand: Taxpayers in the ₹4-8 lakh bracket see a
modest per capita saving of ₹3,010, which escalates sharply to ₹39,107 for
those earning ₹8-12 lakh—a more than 12-fold increase. The savings continue
to rise significantly in higher brackets, reaching ₹67,056 for the ₹16-20 lakh
segment and exceeding ₹1.1 lakh per taxpayer in the >₹24 lakh category.

▪ Tax cuts could boost GST revenue by ₹40,000 crore, partially offsetting
direct tax losses: The ₹3.3 lakh crore consumption boost stemming from tax
savings will have a direct spillover into indirect tax revenues, primarily through
Goods and Services Tax (GST). Assuming an average effective GST rate of
12%, this incremental spending could generate approximately ₹40,000 crore
in additional GST collections. Of this, ₹20,000 crore would accrue to the
central government, while the remaining ₹20,000 crore would flow to the
states. Furthermore, under the devolution formula, 41% of the Centre’s
₹20,000 crore share—amounting to ₹8,000 crore—would also be transferred
to states, effectively increasing their total gain to ₹28,000 crore. This indirect
revenue boost partially offsets the ₹1 lakh crore direct tax revenue foregone,
reinforcing fiscal stability while ensuring that increased household
consumption contributes back to government finances.

February 24, 2025 13

 India Strategy

Domestic consumption on the cusp of revival

Domestic consumption has seen a tepid growth in the past few quarters as effect
of severe summer, prolonged rains and high food inflation dampened the
consumer sentiments. Rural demand has been picking up led by gains from normal
monsoons, while urban demand remains tepid. We expect demand scenario to play
out as follows:

▪ We expect the impact of tax cuts to start reflecting in improved sentiment

and sales from June 25 or from onset of festival season from Raksha Bandhan
and Ganesh Chaturthi. By that time, we expect monsoons to set in fully, giving
more clarity on inflation and rural demand. As per APEC, South Korea, India is
likely to have normal onset and progress of monsoons which can provide a big
boost to consumption.

▪ As against no marriage season from June to Nov (including south India) in

FY25, FY26 marriage season will be staggered and help boost demand in
1Q/2Q, which have a low base.

▪ Food inflation has peaked out and has declined from a peak of 10.8% to the
current 6.0% and should further moderate in coming periods given robust
harvest season. We don’t expect any external shocks in oil and other
commodities which should work to the advantage of consumers, thus
boosting demand.

▪ Given that major beneficiaries of tax cuts will be consumers with income
brackets of more than Rs. 8 lakhs, we expect a bigger demand boost for
discretionary consumption. We believe sectors like Tourism, Retail, QSR,
Housing, Durables, white Goods, Apparel, Footwear, Quick Commerce, Auto
– PV and 2W, Paints, Home décor, Jewellery as key beneficiaries.

February 24, 2025 14

 India Strategy

Capex Boost: India Bets Big on Infrastructure

The Government of India (GoI) has set an ambitious capital expenditure target of
₹11.2 trillion (excluding grants in aid) for FY2026, marking a 10.1% increase over the
revised estimate (RE) of ₹10.2 trillion in FY2025. However, this increase comes on
the back of a lower-than-initially-budgeted capex in FY2025 (₹11.1 trillion BE),
trimmed due to less spending in H1 FY25 due to elections and adverse weather
conditions.

However, the Government of India's effective capex is projected to rise by 17.4%

to ₹15.5 trillion in FY2026, significantly driven by the sharp increase in grants-in-
aid to states for the creation of capital assets. These grants, which are essentially
off-budget support to state-level capex, are budgeted at ₹4.3 trillion in FY2026,
reflecting an exceptionally high 42.4% growth, the fastest in 14 years.

Effective Capex (Including Grant-in-aid) rises by 17% in FY26 BE

Effective Capex

18000
15483
16000
14000 12531 13183
12000 10463
10000 8355
8000 6572
4995 5214
6000 3848 4503 4542
4000
2000
0
FY21A
FY16A

FY19A

FY26BE
FY24A
FY20A

FY23A

FY25RE
FY22A
FY18A
FY17A

Source: PL

▪ Emphasis on State-Led Capex Growth: The effective capex includes the ₹1.5
trillion interest-free capex loans to states, enabling a more decentralized
investment thrust. However, the extent of state-level capex acceleration will
only be clear post their budget presentations. Given that state capex accounts
for nearly 40% of total public capital formation, this move could significantly
amplify investment multipliers.

▪ Targeted Infrastructure Spending - Strengthened Multi-Modal

Connectivity, Defense, and Clean Energy Transition: The Government of
India’s (GoI) infrastructure capex remains robust, with key sectors receiving
targeted allocations to enhance connectivity, security, and energy transition.
The capital goods sector, a key beneficiary of this sustained infrastructure
thrust, has already seen a strong order book uptick in H2FY2025, and this
momentum is expected to accelerate further in FY2026

▪ The defense outlay has risen to ₹1.8 trillion (vs. ₹1.6 trillion in FY2025 RE),
with notable jumps in aircraft and aeroengine procurement (₹486 billion)
and defense equipment (₹631 billion), boosting HAL and Bharat
Electronics.

February 24, 2025 15

 India Strategy

▪ A defining move is the launch of the Nuclear Energy Mission, targeting

100 GW of nuclear capacity by 2047, which will drive domestic
manufacturing of small modular reactors (SMRs), benefiting heavy
manufacturing and EPC players like L&T and BHEL.

▪ Additionally, metro and rail capex remain a key growth driver, with
sustained allocations to the Ministry of Railways supporting rolling stock
manufacturing, track renewals, and the Kavach safety system, benefiting
BEML, HBL Power, Kernex, and Bharat Electronics.

▪ The budget’s strong push for clean technology manufacturing—including

solar PV cells, electrolyzers, wind turbines, EV batteries, high-voltage
transmission, and grid-scale storage—is set to expand domestic
industrial capacity and global competitiveness, favoring firms such as
Siemens, GVTD, Suzlon, and Inox Wind.

▪ Critically, the capex-to-revenue expenditure ratio has improved to 0.39 from

0.38 in FY2025 RE.

India is in the midst of big multi decadal transitions in Renewables, EV, smart Infra,
Ports, Railways, Roads, Data Centers etc. India needs massive amounts of
investment in above mentioned areas to sustain current ~6.5% GDP growth and
accelerate it to beyond 7% in coming years. While the growth rates might
normalize in few segments, revival of private capex will further boost the
sustainability of capex story in India.

Continued strong order intakes drive robust order books of companies in the Capital Goods universe
Order Book (Rs mn) FY21 FY22 FY23 FY24 FY25E YoY gr. (%) FY26E YoY gr. (%)
ABB India (ex. Power Grid) 41,140 49,770 64,680 84,040 93,800 11.6% 1,01,636 8.4%
BEML 1,13,630 91,920 85,700 1,18,730 1,77,265 49.3% 2,76,615 56.0%
Bharat Electronics 5,34,340 5,75,700 6,06,900 7,59,340 8,17,321 7.6% 10,62,834 30.0%
BHEL 10,20,900 10,25,420 9,13,360 13,15,980 17,22,505 30.9% 18,83,585 9.4%
Engineers India 79,819 76,549 76,946 78,235 1,27,776 63.3% 1,33,742 4.7%
GE Vernova T&D 45,900 37,200 36,995 62,729 1,08,375 72.8% 1,35,923 25.4%
Hindustan Aeronautics 8,06,400 8,21,540 8,17,850 9,41,290 13,17,806 40.0% 16,70,736 26.8%
KEC International 1,91,090 2,37,160 3,05,530 2,96,440 3,32,285 12.1% 3,46,513 4.3%
Kalpataru Projects 2,78,990 3,28,980 4,37,680 5,48,740 6,07,547 10.7% 6,58,701 8.4%
Kirloskar Pneumatic 9,250 12,500 11,500 14,750 19,195 30.1% 22,765 18.6%
L&T 32,74,000 35,76,000 39,95,260 47,58,090 56,65,190 19.1% 65,02,157 14.8%
Praj Industries 17,480 28,775 34,140 38,550 44,430 15.3% 56,919 28.1%
Siemens 1,23,600 1,35,198 1,49,055 4,07,332 4,07,742 0.1% 4,14,587 1.7%
Thermax 52,270 87,983 97,520 1,01,110 1,06,646 5.5% 1,02,071 -4.3%
Triveni Turbine 6,389 9,703 13,281 15,525 21,065 35.7% 26,441 25.5%
Voltamp 6,536 6,050 6,027 8,407 13,452 60.0% 19,322 43.6%
Total 66,01,734 71,00,448 76,52,424 95,49,288 1,15,82,401 21.3% 1,34,14,547 15.8%
Source: Company, PL

February 24, 2025 16

 India Strategy

Nifty Valuation

Weight- Weight-
FY24 FY25E FY26E FY27E FY24 FY25E FY26E FY27E
age (%) age (%)
Banking & Fin. 35.5 Telecom 4.3
PER (x) 19.3 18.1 16.9 14.8 PER (x) 73.0 54.3 35.5 30.1
PAT Growth (%) 22.2 6.7 6.7 14.5 PAT Growth (%) 61.4 34.6 52.9 17.9

Technology 13.8 Cement 1.3

PER (x) 30.4 28.0 24.7 21.8 PER (x) 46.5 49.6 34.8 27.8
PAT Growth (%) 3.8 8.3 13.4 13.6 PAT Growth (%) 38.3 (6.2) 42.5 25.3

Oil & Gas 9.6 Others 1.4

PER (x) 13.7 17.3 15.7 14.6 PER (x) 47.2 31.7 26.9 24.6
PAT Growth (%) 59.9 (21.2) 10.6 7.0 PAT Growth (%) (4.6) 48.8 18.1 9.4

Consumer 10.9 Ports & Logistics 0.8

PER (x) 44.3 45.9 41.0 36.8 PER (x) 29.6 23.1 19.7 17.2
PAT Growth (%) 14.3 (3.5) 11.8 11.5 PAT Growth (%) 52.8 28.2 17.3 14.3

Auto 7.5 Nifty as on Feb 24 22,553

PER (x) 20.7 22.0 19.2 18.2 EPS (Rs) - Free Float - PL 1,018.4 1,147.6 1,304.9 1,472.7
PAT Growth (%) 154.0 (6.2) 14.6 5.5 Growth (%) 17.7 12.7 13.7 12.9
PER (x) 22.1 19.7 17.3 15.3
Eng. & Power 7.3
PER (x) 22.5 21.2 18.2 16.1 EPS (Rs) - Free Float - Nifty Cons. 1,018.4 1,170.8 1,337.3 1,521.1
PAT Growth (%) 16.9 6.3 16.2 13.7 Var. (PLe v/s Cons.) (%) - (2.0) (2.4) (3.2)

Pharma 3.9 Sensex as on Feb 24 74,454

PER (x) 35.2 30.2 27.2 25.3 EPS (Rs) - Free Float - PL 3,012.3 3,556.6 4,072.2 4,652.1
PAT Growth (%) 21.5 16.4 11.4 7.4 Growth (%) 9.8 18.1 14.5 14.2
PER (x) 24.7 20.9 18.3 16.0
Metals 3.7
PER (x) 13.3 13.6 9.7 8.5 EPS (Rs) - Free Float - Sensex Cons. 3,012.3 3,625.7 4,162.4 4,778.0
PAT Growth (%) 8.6 (1.9) 39.9 14.6 Var. (PLe v/s Cons.) (%) - (1.9) (2.2) (2.6)

Source: Company Data, PL

Note: Sector Weightages updated as on January 10, 2025

FY26: Most Sectors ex of BFSI to achieve double digit EPS growth, Cement, Metals and Telecom to lead
NIFY Sectoral EPS - PLe (Rs) % Gr. % Contribution to total EPS
2024 2025 2026 2027 2024 2025 2026 2027 2024 2025 2026 2027
Auto 88.8 91.7 104.6 110.1 142.6% 3.2% 14.1% 5.2% 8.7% 8.0% 8.0% 7.5%
BFSI 428.6 506.2 543.1 619.7 12.7% 18.1% 7.3% 14.1% 42.1% 44.1% 41.6% 42.1%
Cement 6.3 6.5 9.3 11.6 29.2% 4.0% 42.5% 25.3% 0.6% 0.6% 0.7% 0.8%
Consumer 62.1 67.0 75.1 83.8 6.2% 7.9% 12.1% 11.5% 6.1% 5.8% 5.8% 5.7%
Eng. & Power 69.8 83.0 98.9 114.5 10.3% 19.0% 19.1% 15.8% 6.8% 7.2% 7.6% 7.8%
Healthcare 26.8 34.0 37.8 39.6 15.1% 27.2% 11.2% 4.7% 2.6% 3.0% 2.9% 2.7%
Metals 57.8 67.1 97.7 113.2 -6.1% 16.1% 45.6% 15.9% 5.7% 5.9% 7.5% 7.7%
Oil & Gas 145.5 125.5 138.6 149.9 40.6% -13.8% 10.5% 8.1% 14.3% 10.9% 10.6% 10.2%
Others 8.8 11.9 15.0 17.7 -17.5% 35.9% 25.9% 18.2% 0.9% 1.0% 1.2% 1.2%
Ports & Logistics 6.3 8.9 10.4 11.9 42.7% 42.0% 17.3% 14.3% 0.9% 1.0% 1.2% 1.2%
Technology 103.4 124.3 141.5 162.0 -5.1% 20.3% 13.8% 14.5% 0.6% 0.8% 0.8% 0.8%
Telecom 14.4 21.4 32.7 38.6 50.7% 49.2% 52.9% 17.9% 10.2% 10.8% 10.8% 11.0%
Nifty 1,018.4 1,147.6 1,304.9 1,472.7 17.7% 12.7% 13.7% 12.9%
Source: PL

February 24, 2025 17

 India Strategy

Nifty trading at 7.4% discount to 15- year average 1-year forward PE

28.0
26.0
24.0 22.5
22.0 15 year Avg. 20.6
20.0 18.9x 18.2 18.8 19.4 19.3
17.5 18.1
18.0 16.1
16.0 14.1 17.5
14.0
12.0
10.0
8.0
Feb-14
Feb-12

Feb-18
Feb-17
Feb-13

Feb-15
Feb-11

Jun-20

Jun-24
Jun-23
Feb-16

Feb-19

Jun-21
Oct-13

Oct-15
Oct-11

Oct-16

Oct-19

Jun-22
Oct-18
Oct-14
Oct-12

Oct-17
Jun-14
Jun-12

Jun-13

Jun-15

Jun-17

Feb-20
Jun-11

Jun-16

Jun-19

Feb-24
Feb-22

Feb-23

Feb-25
Feb-21
Jun-18

Oct-20

Oct-24
Oct-22

Oct-23
Oct-21
Source: PL

NIFTY EPS trend – FY24-27 CAGR at 14.1%

FY25/26/27 EPS has seen a cut of
FY24 FY25E FY26E FY27E
3/1/0.6% while consensus EPS has
seen a cut of 0.3/0.5/1.1% 1,650
1,547
1,550
1,401
1,450 1,358 1,371
1,350 1,231 1,247
PL estimates for FY25/26/27 are 1,250 1,171
3.2/3.5/4.3% lower than consensus. 1,150 1,069
1,050 963
950 1,081
1,018
850

01-Jun-24
01-Jun-23

01-Aug-24
01-Aug-23

01-Dec-23
01-Feb-23

01-Feb-24

01-Feb-25
01-Oct-22

01-Oct-23

01-Oct-24

01-Dec-24
01-Dec-22

01-Apr-24
01-Apr-23

Source: PL

February 24, 2025 18

 India Strategy

Nifty 50 – Weak near-term trend

NIFTY consensus EPS for FY25/26has seen a cut of 3.2% and 4.9% since Jan24.
Nifty EPS was in an upgrade cycle since Oct22 when NIFTY EPS was introduced
at 1069 and it rose to 1251 by July24. From July until now, the cut in EPS has been
8.9% and 8.6% for FY25/26. The EPS for FY27, which was introduced in Oct24, has
seen a cut of 5%. The number of stocks in NIFTY, which have seen downgrades in
EPS (Hurdle rate 1% on both sides), has risen from 21 in Feb24 to 30 in 3Q25. For
FY26, the number of downgrades has risen from 17 stocks to 34 stocks. High QoQ
downgrades indicate deterioration in trend.

3Q25: FY25 has seen an increase in Downgrades to 30, while for FY26 downgrades increased to 34

Nifty - FY25 EPS Nifty - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

34
29 30
28
25 24
21 23
19 20 20 20
18 17
15 15 14 15 15 15
10 11 11 12
9 9
6 7
4
2

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

Downgrades continue to increase both for FY25/26, no upgrades in FY26 despite hopes of demand revival

Auto - FY25 EPS Auto - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

5 5 5 5
4 4 4
3 3 3 3
2 2 2 2
1 1 1 1 1 1 1 1
0 0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

Soft pricing results in EPS downgrades during 3Q25

Cement - FY25 EPS Cement - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

1 1 1 1 1 1 1 1 1 1

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

February 24, 2025 19

 India Strategy

Source: Company, PL

FY25 EPS trend sustains, FY26 downgrades increase from 2 to 3

Capital Goods - FY25 EPS Capital Goods - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

2 2 2 2
3

2 2 2 2
1 1 1 1 1 1 1 1 1
1 1 1 1 1 1

0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

Across the broad EPS cut in NIFTY consumer stocks as both growth and margins disappoint

Consumer - FY25 EPS Consumer - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

8 8 8 8
6 6
5
4 4
3 3 3
2 2
1 1 1 1
0 0 0 0 0 0 0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

EPS cut cycle continues for Ferrous metals, Hindalco remains lone stock with upgrades

Metals - FY25 EPS Metals - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

3 3 3

2 2 2 2 2 2 2 2 2 2

1 1 1 1 1 1 1 1 1 1 1

0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

February 24, 2025 20

 India Strategy

O&G EPS cut cycle continues – EPS cut for ONGC/RIL

O&G - FY25 EPS O&G - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

3 3

2 2 2 2 2 2 2 2

1 1 1 1 1 1 1 1

0 0 0 0 0 0 0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

EPS cuts increase for FY26 on concerns for reducing one off benefits in select generic molecules

Healthcare - FY25 EPS Healthcare - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

4 4
3 3 3

2 2 2 2 2
2 2 2 2 2
1 1 1 1
1 1 1 1 1

0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

IT services belie hopes, lower upgrades for FY25 while EPS cuts in more stocks in FY26

IT - FY25 EPS IT - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

6 6
5

3 3 3 3
2 2 2 2 2 2 2 2 2 2
1 1 1 1 1 1 1
0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

February 24, 2025 21

 India Strategy

Others - More downgrades in FY26, FY25 status quo remains

Others - FY25 EPS Others - FY26 EPS

Upgrades Downgrades Neutral Upgrades Downgrades Neutral

2 2 2 2 2 2 2 2
3

2 2 2 2 2
1 1 1
1 1 1 1 1 1

0 0 0 0 0 0 0

Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb Jan-Feb Apr-Jun Jul-Aug Oct-Nov Jan-Feb

Source: Company, PL

February 24, 2025 22

 India Strategy

Model Portfolio
Nifty PL
Model Portfolio v/s Nifty Mcap
Sectors Weightage Weightage Weights
(Rs bn)
(%) (%)
Model Automobiles 7.5 7.8 Overweight
Returns Nifty Perf.
Portfolio Mahindra & Mahindra 3,369 2.5 3.3
Maruti Suzuki 3,881 1.6 3.0
Since
128.9% 109.5% 19.4% Tata Motors 2,800 1.4 1.5
Nov'18

Since Banks 30.1 30.6 Overweight

Last -5.4% -3.7% -1.6% Axis Bank 3,127 2.8 2.8
Report HDFC Bank 12,830 12.5 12.0
ICICI Bank 8,605 8.6 9.5
Since Kotak Mahindra Bank 3,909 2.8 3.5
3.0% 2.5% 0.4% State Bank Of India 6,394 2.7 2.8
Apr'24

Source: PL Cement 1.3 1.4 Overweight

UltraTech Cement 3,188 1.3 1.4

Capital Goods & Engineering 7.3 11.8 Overweight

ABB 1,142 3.0
Larsen & Toubro 4,480 3.8 3.8
Siemens 1,735 2.5
Bharat Electronics 1,874 0.9 1.5
Polycab India 879 1.0

Consumer 10.9 12.0 Overweight

Britannia Industries 1,157 0.6 2.5
Hindustan Unilever 5,266 1.9 1.0
Interglobe Aviation 1,753 3.5
ITC 5,029 3.6 2.0
Titan Company 2,817 1.3 2.0
Astral 376 1.0

Healthcare 3.9 7.0 Overweight

Max Healthcare 960.43 3.3
Sun Pharmaceutical Industries 3,934 1.8 2.2
Cipla 1,193 0.8 1.5

IT 13.8 13.8 Equalweight

Infosys 7,325 6.4 6.4
HCL Technologies 4,461 1.7 1.7
LTI Mindtree 1,495.49 1.9
Tata Consultancy Services 13,299 3.8 3.8

Metals 3.7 1.0 Underweight

Hindalco Industries 1,442 0.9 1.0

Diversified Financials 5.4 1.2 Underweight

HDFC AMC 809 1.2

Oil & Gas 9.6 9.0 Underweight

Reliance Industries 16,436 8.2 9.0

Telecom 4.3 4.5 Overweight

Bharti Airtel 9,578 4.3 4.5

Others 2.2 - Underweight

Cash -

PL Model Portfolio has outperformed NIFTY by 19.4% since Nov 2018, 0.4%
since April 24 and -1.6% since last report.

February 24, 2025 23

 India Strategy

▪ Automobiles: overweight: We remain overweight on hopes of demand revival

as benefits of income tax cuts, lower interest rates and inflation boost
demand. M&M continues to gain from strong show in PV while Normal
monsoons can improve FY26 tractors outlook. Maruti seems well placed to
gain from revival in demand, rising share of UV, presence across power trains
and expected increase in exports (16.5% CAGR to 0.75mn units by FY27), we
are increasing weightage for Maruti by 40bps and is now 140bps overweight.

▪ Banks: Equal weight: RBI has announced 25 bps rate cut and softening
inflation shows hopes of another 25-50bps cut by end of FY26. Although
unsecured loans and MFI remain an issue, valuations remain compelling. We
are increasing weights on ICICI by 50bps and Kotak Mahinda Bank by 70bps
(Gains from removal of restrictions under 811 scheme).

▪ Capital Goods – Overweight: We remain structurally positive but cut

overweight from 570bps to 450bps. We believe sectoral EPS growth will
remain higher than NIFTY, but margins have peaked out for most players. We
cut weight in L&T, Polycab and Siemens but increase weight behind ABB post
sharp correction and Bharat Electronics (strong order book).

▪ Consumer: Overweight: We turn overweight on expectations of improved

demand due to lower inflation, interest rates and tax rates. We believe that
maximum benefit will accrue to mid income consumers (income >1.2mn)
which will improve discretionary demand. We shift 50bps weight from HUL to
ITC. We increase weight on Interglobe Aviation by 150bps to 350bps. We cut
weight on Titan Company by 50bps as the recent spike in gold prices will have
a detrimental impact on growth in the near term. We add Astral Poly as a play
on discretionary segment in building materials.

▪ Healthcare: Overweight: we increase overweight from 190bps to 310bps.

We remain structurally positive on Hospitals led by Max healthcare and Sun
Pharma, although we tinker with weights slightly. Sun pharma has strong
growth in specialty portfolio and domestics and low exposure to generics. Max
will gain from recent brownfield expansion and new acquisitions. We add Cipla
as new launch approvals provide a good entry point at current valuations.

▪ IT services: Equalweight: IT services is showing initial signs of recovery in

BFSI, telecom and manufacturing. However recent uncertainty around growth
in US and Govt actions can impede near term growth outlook. We tinker with
weights around key stocks and turn equal weight.

▪ Oil and Gas: Underweight; we remain overweight on RIL. We believe

sustained growth in retail and expected forays in new energy segments will
drive next leg of growth in the company.

▪ Telecom: we retain overweight on Bharti Airtel as a structural play on rising

data usage in telecom. While recent tariff hikes have been absorbed, we
expect strong growth in profitability and more tariff hikes after a lag.

▪ Cement and Metals - We remove Ambuja Cement from model portfolio given
lackluster performance and delay in benefits of cost cutting and margin
improvement. Hindalco remains a key pick in the metal segment and Ultratech
in the Cement segment.

February 24, 2025 24

 India Strategy

Conviction Picks Changes

High Conviction Picks: We are removing Ambuja Cement, Cyient, Cyient DLM,
Jindal Stainless, Lemon Tree Hotels, Praj Industries. Ambuja has seen
disappointment on expected margin improvements. Praj has seen lower order
inflow and initial costs with little order ramp up in Mangalore will impact
profitability till 1H26. Lemon tree remains a good play in Tourism; however, chalet
looks better at current valuations. We are adding the following stocks in conviction
picks.

ABB India: We are adding ABB India to our conviction pick given 1) the continued
premiumization trend in India set to benefit ABB, 2) increasing traction in energy
efficiency and premium products, 3) ABB's focus on high-growth areas such as
data centers, rail & metro, renewables and electronics, and 4) its strong domestic
order pipeline. We expect ABB to report Revenue/Adj. PAT CAGR of 16.0%/28.3%
over CY23-25E. We have a ‘Buy’ rating on the stock with a TP of Rs6,955, valuing
it at a PE of 63x CY26E.

Astral: ASTRAL is expanding across pipes, adhesives, bathware, and paints, with
strategic capacity additions. The bathware segment aims to contribute Rs1.2bn to
revenue in FY25, while paint expansion in Gujarat and Rajasthan shows positive
traction. Pipes capacity is set to grow further, and procurement optimization is
expected to improve cost efficiency. We estimate FY24-27E revenue/EBITDA/PAT
CAGR of 14.9%/16.3%/19.5%. Maintain ‘BUY’.

Chalet Hotels: Reported a healthy performance in 3QFY25 with EBITDA margin of

44.7% aided by 16.0% growth in RevPAR. In addition to continuing momentum in
RevPAR, near term growth in hospitality segment will be driven by
operationalization of ~125-130 rooms in Bangalore and ~65 rooms in Khandala over
the next 6 months. Pipeline for long term is stronger with plans to add to ~840
rooms at Delhi, Navi Mumbai and Goa over the next 3 years. Even annuity business
witnessed healthy traction as 0.4mn sq ft was leased out in 3QFY25. Balance
0.8mn sq ft is expected to be leased out in next 2 quarters and thus we expect
margin trajectory to improve from 2HFY26E. We expect sales/EBITDA CAGR of
17%/20% over FY25E-FY27E, as we upgrade to “BUY” with a TP of Rs1,064 valuing
the hotel business at EV/EBITDA multiple of 24x, annuity portfolio at a cap rate of
8.5% and the residential project at NAV of Rs29 per share.

Cipla: Cipla has a robust US generic pipeline with a focus on new launches. The
timely rollout of gAbraxane and gAdvair will be crucial in driving US revenue and
mitigating potential declines in gRevlimid. Domestic growth is supported by
increased branded prescriptions, a strong trade generic business, and continued
momentum in consumer health. Further, Cipla’s strong net cash position of +$1bn
provides flexibility to pursue strategic M&A opportunities. At CMP, stock is trading
22.7x FY27E EPS. We recommend ‘BUY’ rating with TP of Rs1,730/share. The timely
launch of critical high-value products in the US in FY26E/27E will be key.

Ingersoll-Rand (India): We are adding Ingersoll-Rand India to our conviction pick

given it is 1) among the top 3 air compressor players in India, 2) expanding its air
compressor manufacturing capacity by 50% which will drive volumes & scale, and
3) backed by strong global parentage of Ingersoll Rand Inc (IR Inc.), providing
access to cutting-edge R&D and technology. We expect INGR to report
revenue/Adj. PAT CAGR of 14.3%/15.7% over FY24-27E. We have a ‘Buy’ rating on
the stock with a TP of Rs4,540, valuing it at a PE of 45x on Sep’26E.

February 24, 2025 25

 India Strategy

Kaynes Technology India: KAYNES, a leading IoT-enabled ESDM manufacturer,

focuses on high-margin automotive (29%) and industrial (48%) sectors. With
capacity expansion, backward integration, and a strong order book, it aims for USD
1bn revenue by FY28, expanding into OSAT and PCB manufacturing. We estimate
FY24-27E revenue/EBITDA/PAT CAGR of 51.4%/58.3%/47.6%, with EBITDA
margins improving 200bps to 16.1%.

Kotak Mahindra Bank: KMB saw a strong Q3FY25 with beat on all fronts i.e. loan
growth, margins, opex and asset quality; despite challenging macros, earnings
quality was best-in-class. Lifting of RBI embargo could lead to better loan growth
and NIM which could drive an upgrade in core PPOP. We see a 14.5% CAGR in Core
PPOP. Bank also plans to increase share of unsecured portfolio share from current
10.5% to 15% leading to increase in the yields. Core earnings growth is expected
to be 13.4%/17.7% for FY26/27E. Likely RoA/RoE for FY26E at 2.2%/12.7%.
Maintaining multiple at 2.4x on Sept’26 core ABV, our TP is Rs2,230. Reiterate
‘BUY’.

Maruti Suzuki: We add MSIL in our model portfolio as its multi-powertrain strategy
across CNG, BEV, HEV, and ICE positions it well for diverse customer preferences,
driving a domestic volume CAGR of 3.7% over FY24-27E, with UVs offsetting
sluggishness in compact and sedan segments. Strong export growth is expected,
targeting ~300k units in FY25 and ~750k by FY30E (CAGR ~16.5%), supported by
rising UV penetration. With its product portfolio shifting towards UVs in domestic
as well as international market, it shall enable the company to deliver healthy
growth in its ASP and sustain margin profile. Factoring this, we add MSIL in our
model portfolio and recommend “BUY” with a with a TP of ₹14,154 valuing it at a
P/E of 24x on its Dec’26 earnings.

February 24, 2025 26

 India Strategy

High Conviction Picks

Revenue Gr. (%) Earnings Gr. (%) RoE (%) RoCE (%)* PER (x) P/BV (x)*
TP Mcap Mcap
CMP (Rs.) Upside
(Rs) (Rs bn) (US$ m)
2025E 2026E 2027E 2025E 2026E 2027E 2025E 2026E 2026E 2025E 2026E 2027E 2025E 2026E 2027E 2025E 2026E 2027E

Large Cap
ABB India 5,390 6,955 29.0% 1,142.1 13,170 16.7 15.4 14.5 50.2 9.0 14.5 28.8 26.5 25.7 33.2 30.4 29.4 60.9 55.9 48.8 16.1 13.7 11.6
Bharat Electronics 256 340 32.6% 1,873.9 21,608 17.3 18.9 16.2 18.0 19.5 16.7 27.0 27.1 26.7 31.5 31.9 31.4 39.5 33.1 28.3 9.8 8.3 7.0
Bharti Airtel 1,601 1,827 14.1% 9,094.4 1,04,871 14.3 16.7 9.4 34.6 52.9 17.9 19.7 23.8 22.3 14.2 16.1 16.6 50.1 32.8 27.8 8.9 7.0 5.6
Britannia Industries 4,804 5,881 22.4% 1,157.4 13,346 7.0 9.9 10.2 1.3 13.0 15.8 53.6 54.8 54.6 48.0 53.6 55.8 53.5 47.3 40.8 28.0 24.2 20.7
Cipla 1,477 1,730 17.1% 1,192.3 13,748 6.5 9.1 7.3 18.7 5.8 1.8 17.2 16.2 14.9 20.7 19.4 17.5 24.4 23.0 22.6 3.9 3.5 3.2
ICICI Bank 1,218 1,550 27.2% 8,602.2 99,195 9.2 11.9 14.0 13.4 8.5 14.6 18.1 16.9 16.8 2.3 2.2 2.2 18.5 17.0 14.8 3.2 2.7 2.4
Infosys 1,764 2,250 27.5% 7,305.9 84,247 6.4 8.5 11.8 8.4 12.8 14.7 29.8 33.6 38.4 27.6 31.2 35.7 27.8 24.6 21.4 8.3 8.3 8.2
InterGlobe Aviation 4,536 5,246 15.7% 1,750.8 20,189 15.3 14.7 16.2 (8.6) (0.8) 12.2 156.8 65.0 43.2 75.7 47.9 43.5 21.5 21.7 19.4 20.9 10.7 6.9
Kotak Mahindra Bank 1,966 2,230 13.4% 3,908.8 45,074 9.9 13.4 16.2 0.1 12.0 16.7 12.8 12.3 12.7 2.2 2.2 2.2 28.3 25.3 21.7 3.4 3.0 2.6
Larsen & Toubro 3,258 4,025 23.6% 4,479.3 51,653 17.4 14.7 13.0 13.4 33.7 25.2 15.8 18.0 19.1 10.9 13.1 14.7 30.5 22.8 18.2 4.5 3.8 3.2
Mahindra & Mahindra 2,709 3,664 35.3% 3,249.0 37,465 15.1 14.7 13.9 15.6 10.4 13.2 21.7 20.4 19.8 21.2 20.4 19.9 26.2 23.8 21.0 5.3 4.5 3.8
Maruti Suzuki 12,345 14,154 14.7% 3,881.3 44,757 8.5 8.9 9.4 10.7 16.7 11.6 16.4 17.0 16.9 17.4 16.9 16.6 26.6 22.8 20.4 4.1 3.7 3.2
Reliance Industries 1,215 1,472 21.2% 16,435.3 1,89,521 6.1 6.2 4.3 (15.4) 13.0 12.0 7.1 7.5 7.8 8.6 9.2 9.6 27.9 24.7 22.1 1.9 1.8 1.7
Titan Company 3,173 3,833 20.8% 2,824.0 32,564 14.5 19.3 14.4 7.8 26.2 16.0 24.2 25.7 24.7 21.2 22.3 22.7 75.0 59.4 51.2 16.9 13.9 11.6
Mid / Small Caps
Aster DM Healthcare 405 620 53.2% 202.3 2,333 14.1 17.1 17.6 66.6 69.4 26.9 7.5 13.5 15.4 11.3 15.9 18.6 64.5 38.1 30.0 5.4 4.9 4.4
Astral Ltd. 1,398 1,808 29.3% 376.2 4,338 7.2 19.9 18.0 0.5 33.8 27.0 15.6 17.9 19.2 21.6 24.7 26.3 68.6 51.3 40.4 10.0 8.5 7.1
Chalet Hotels 710 1,064 49.9% 154.9 1,786 19.6 21.6 12.6 33.0 35.6 19.2 13.9 14.3 14.9 11.4 14.4 15.1 46.0 33.9 28.5 5.2 4.6 4.0
Crompton Greaves Consumer Electricals 331 504 52.3% 213.0 2,456 9.1 13.3 13.3 24.0 23.9 19.9 17.2 19.3 21.0 21.3 25.1 27.6 39.0 31.5 26.3 6.3 5.8 5.2
DOMS Industries 2,532 3,370 33.1% 153.6 1,772 25.9 34.7 20.6 37.4 32.0 22.7 23.0 24.1 23.4 27.8 29.6 29.1 73.0 55.3 45.1 15.1 11.9 9.5
Ingersoll-Rand (India) 3,465 4,540 31.0% 109.4 1,261 13.0 14.1 15.8 19.6 9.9 17.9 43.0 42.2 45.0 53.8 53.0 56.7 41.1 37.4 31.7 16.7 15.0 13.6

Kaynes Technology India 4,352 5,528 27.0% 278.6 3,212 50.4 59.0 44.9 53.6 34.9 55.2 10.4 12.2 16.4 14.1 15.1 19.1 98.8 73.2 47.2 9.5 8.4 7.1
Max Healthcare Institute 988 1,300 31.6% 960.2 11,072 27.1 28.1 18.0 18.1 32.0 31.2 15.2 17.4 19.4 17.0 19.2 21.4 63.6 48.2 36.7 9.1 7.8 6.6
Polycab India 5,841 8,233 40.9% 878.6 10,132 21.2 17.6 14.9 7.9 23.6 15.6 21.3 21.8 21.0 29.7 30.2 29.1 45.6 36.9 31.9 8.9 7.4 6.2
* For Banks P/BV = P/ABV & RoCE = RoAA

Added: ABB India, Cipla, Kotak Mahindra Bank, Maruti Suzuki, Astral Ltd., Chalet Hotels, Ingersoll-Rand (India) and Kaynes Technology India
Removed: Ambuja Cement, Siemens, Cyient, Cyient DLM, Jindal Stainless, Lemon Tree Hotels and Praj Industries

February 24, 2025 27

 India Strategy

Current Valuations in 50% (48% earlier) Nifty50 companies are lower than 2023 levels
Current
12 Month Forward Average PE 2009-11 2011-13 2013-16 2016-20 2022 2023 2024
Valuations*
Nifty Index 16.3 14.7 18.8 22.0 20.4 18.4 18.4 17.8
Adani Enterprises 3.0 2.8 4.2 13.4 114.0 112.1 62.3 32.5
Adani Ports & Special Economic Zone Ltd 28.8 18.5 18.3 18.1 31.2 25.4 20.9 20.2
Apollo Hospital Enterprises 24.5 29.9 58.6 81.2 66.5 71.8 65.4 49.3
Asian Paints Ltd 21.5 30.1 39.9 51.7 82.7 61.8 61.8 46.5
Axis Bank Ltd 13.1 9.9 14.0 72.8 20.2 15.0 12.2 11.2
Bajaj Auto Ltd 9.7 15.1 17.5 17.7 17.4 15.6 20.0 24.5
Bajaj Finance Ltd 10.2 10.8 15.5 11.4 10.5 7.2 8.6 9.9
Bajaj Finserv Ltd 5.5 6.6 9.9 26.9 43.2 32.4 28.3 27.1
Bharat Electronics Ltd 15.8 12.7 14.4 17.8 16.8 19.7 23.8 34.6
Bharat Petroleum Corp Ltd 15.6 13.7 8.6 11.0 15.3 7.5 4.8 8.0
Bharti Airtel Ltd 20.9 45.4 29.3 72.6 57.3 54.2 40.5 34.3
Britannia Industries Ltd 28.8 23.3 28.3 47.3 46.9 44.5 53.4 46.7
Cipla Ltd/India 23.5 19.3 34.3 29.8 28.3 24.1 21.1 23.2
Coal India Ltd 2.9 13.7 15.8 14.2 4.0 3.8 5.4 6.5
Dr Reddy's Laboratories Ltd 27.6 16.8 26.8 30.2 24.3 14.3 16.5 16.7
Eicher Motors Ltd 7.0 12.0 NA 34.7 31.9 24.8 23.1 26.7
Grasim Industries Ltd 6.0 8.2 19.1 20.0 14.5 17.1 23.4 23.8
HCL Technologies Ltd 13.3 9.0 14.1 12.9 21.3 18.4 21.3 24.3
HDFC Bank Ltd 20.7 18.5 18.0 21.5 19.9 17.3 17.4 16.9
HDFC Life Insurance Co. Ltd. NA NA - 42.8 103.0 80.4 73.9 55.6
Hero MotoCorp Ltd 16.0 17.5 17.4 18.0 20.4 15.4 15.7 15.5
Hindalco Industries Ltd 9.9 9.0 17.2 9.9 8.6 9.4 8.6 9.6
Hindustan Unilever Ltd 24.3 25.2 37.1 50.1 60.2 58.1 57.9 47.1
ICICI Bank Ltd 19.5 13.6 15.0 30.5 17.7 16.0 15.7 17.6
IndusInd Bank Ltd 12.3 14.4 17.6 26.4 13.0 10.1 14.4 9.8
Infosys Ltd 20.5 16.0 16.5 16.4 29.9 25.2 22.7 25.6
ITC Ltd 19.4 22.9 30.5 24.2 16.1 19.0 25.4 22.7
JSW Steel Ltd 16.2 25.2 25.6 10.2 15.7 26.1 27.6 19.9
Kotak Mahindra Bank Ltd 17.6 18.6 25.9 29.1 27.1 21.8 19.8 21.2
Larsen & Toubro Ltd 20.9 18.0 26.2 19.8 24.7 22.6 28.5 24.3
Mahindra & Mahindra Ltd 12.0 13.5 22.6 34.4 17.5 16.5 16.2 24.7
Maruti Suzuki India Ltd 17.2 15.9 17.5 31.9 38.1 24.5 22.6 23.4
Nestle India Ltd 32.3 40.5 63.5 55.6 78.7 65.4 71.3 60.4
NTPC Ltd 17.9 11.9 10.8 10.7 7.2 8.3 11.2 13.4
Oil & Natural Gas Corp Ltd 10.8 9.2 17.1 10.4 4.3 4.3 5.3 6.1
Power Grid Corp of India Ltd 17.6 12.5 11.5 10.5 8.1 10.0 12.6 14.8
Reliance Industries Ltd 13.5 10.5 9.4 13.4 21.9 22.8 23.9 19.9
SBI Life Insurance Co. NA NA - 32.4 68.3 66.2 62.7 57.5
State Bank of India 11.9 8.9 25.1 200.4 8.9 7.8 7.9 7.7
Sun Pharmaceutical Industries Ltd 18.1 20.6 37.2 42.0 32.8 25.1 26.8 30.7
Tata Consultancy Services Ltd 16.3 16.9 20.1 20.7 32.0 27.5 27.0 25.2
Tata Consumer Products 19.9 18.1 3.7 32.6 65.2 60.5 70.0 57.5
Tata Motors Ltd 5.3 6.5 11.6 -0.8 -13.5 14.7 9.9 10.4
Tata Steel Ltd -6.7 -1,397.8 -13.6 7.5 7.2 -1.0 23.9 14.3
Tech Mahindra Ltd 12.9 7.2 15.6 13.4 23.0 27.7 33.2 27.1
Titan Co Ltd 21.2 29.4 38.8 56.5 67.8 64.1 81.0 60.4
Trent Ltd NA -117.4 81.6 36.7 140.2 52.5 54.0 81.3
UltraTech Cement Ltd 13.7 16.1 28.4 35.4 33.5 31.7 37.3 36.3
UPL Ltd 5.9 6.7 13.3 33.9 48.6 34.7 30.0 26.0
Wipro Ltd 15.6 13.2 15.1 14.8 27.7 20.3 18.7 23.7
Source: PL * as of February 24, 2025

February 24, 2025 28

 India Strategy

Tepid demand, weak BOP adds to FII selling

▪ NIFTY EPS has seen a cut in EPS by 8.9% and 8.6% for FY25/26 since July24.
The EPS for FY27, which was introduced in Oct24, has seen a cut of 5%. The
number of stocks in NIFTY, which have seen downgrades in EPS (Hurdle rate
1% on both sides), has risen from 21 in Feb24 to 30 in 3Q25. NIFTY has shown
a decline of 3.5% YTD amidst heavy selling by FII’s in an environment of slow
demand, pressure on currency and tight domestic liquidity.

▪ India is 2nd worst performing market led by FII selling in an environment of slow
growth and weak currency (rising trade deficit and deterioration in net FDI
flows from USD 38bn in FY22 to 0.5bn FY25 YTD). Narrower gap between US
10-year yields and Indian G-Sec and weak currency have increased hurdle rate
for FII equity investments to >10.5%. A significant increase in OFS for listings
and exits by foreign promoters and PE players has added to outflows which
has also sucked domestic liquidity in the system.

▪ Demand conditions remain weak as high inflation has put brakes on urban
demand, rural demand held steady, but the pace of recovery has slowed down
in several categories. worst seems over as 1) food inflation has peaked out and
declined from a peak of 10.9% to 6% 2) 25bps cut in repo rate by RBI, more
might follow in next 3-6 months 3) Rs1000bn income tax cut for consuming
class in India 4) sustained increase in religious tourism and 5) 17% higher Govt
capex allocation (including PSU and allocation to states) augurs well for pick-
up in growth in coming quarters (on a low base).

▪ India has not faced wrath of Trump Tariffs as both nations are aiming for a
trade deal by 3Q26. We believe that India will not any meaningful cascading
impact of US policies. Soft oil prices, geopolitical stability (If Russia Ukraine
war Stops) and increased transfer of technology to India will neutralize any
associated costs of Trump tariffs. However, we need to watch out for the
impact of trump tariffs on US inflation and consumer demand.

▪ We expect markets to remain volatile in the near term but stabilize towards
the end of 4Q25. We expect the impact of various Govt initiatives and
monsoons to start getting reflected in improved consumer demand in 2Q26.

Nifty50 down 1.9% in 3M amidst FII selling

20.0 18.3
CHG_PCT_3M 16.5
15.0
9.4
10.0 7.0
6.3
5.0 1.8 2.8
0.5 0.7
-
(0.4) (0.1)
(5.0) (1.9)
(5.0)
(10.0)
Indonesia

India

Hong Kong
Japan

S.Korea

Germany
USA

Russia
China
Australia

FTSE
S&P
Brazil

Source: PL

February 24, 2025 29

 India Strategy

All major indices decline led by Power, CG, Durables and FMCG

CHG_PCT_3M CHG_PCT_6M

(2.1)
(5.0)

(2.8)

(3.0)

(3.6)

(4.0)

(4.2)
(5.1)
(5.2)
(10.0)

(5.5)

(6.4)

(9.4)
(%)

(9.8)
(15.0)

(11.3)
(12.1)

(12.9)
(14.6)
(20.0)

(15.3)
(17.1)

(18.0)
(20.1)
(25.0)
(30.0)

(25.4)

(26.7)
Source: PL

Nifty/ Sensex outperform Mid/ small cap indices by 620/990bps

CHG_PCT_3M CHG_PCT_6M CHG_PCT_1YR

4.3

4.3
10.0

3.9
3.5

3.0
1.1

5.0
-
(5.0)

(1.9)

(1.8)
(%)

(2.9)
(4.7)

(10.0)

(6.4)
(7.5)
(8.1)

(8.8)
(15.0)
(11.2)
(11.7)

(20.0)
BSE Mid-Cap(15.4)
BSE Small-Cap(16.8)

(25.0) BSE-100

Sensex
Nifty
BSE-500

Source: PL

DII flows Rs1263bn, FII outflows at Rs929bn YTD NIFTY down 3.5% YTD amidst high volatility
5,265

DII Net Cash FII Net Cash FII Net Cash % Nifty Change
6,000
2,500 40.0%
28.1%

23.8%

5,000
31.4%

2,000
19.4%
2,767

4,000 30.0%
14.8%

1,500
1,846
1,768
1,728

11.5%

3,000 1,000
1,293

1,263

8.8%
1,094
(Rs bn)

-735

1,002

20.0%
1,113

(Rs bn)
-569

946
974

908

2,000
-342

4.1%

500
676

2.8%

2.7%
529

422

258
371
184

188

1,000
-3.5%

10.0%
-4.1%

-
- -500
0.0%
-1,000
-70

-1,000
2014 -303

2022 -1,256
2020 -362

2025-929

-2,000 -1,500 -10.0%

2023
2024
2021
2012
2013

2015
2016

2018
2019
2017

2024
2022
2023

2025
2020
2021
2018
2014
2015
2016

2019
2017

Source: PL Source: PL

February 24, 2025 30

 India Strategy

High Frequency indicators show mixed trends amid tepid demand

IIP growth falls to 3.2% YoY in Dec’24 Jan25 PMI declines to 57.7, led by services growth
25
IIP Composite PMI Manufacturing PMI Services
20
65.0
15
61.6 61.9 61.8
62.0 60.9
10 5.8 6.4 6.3
5.5 5.0 57.7
5 2.2 3.3 2.5 4.7 59.0 57
3.2 56.0 57.5
0 -4.1 56.5 56.5
-5 -0.1 53.0

-10 50.0

Sep-24
Sep-23

Jul-24
Jul-23

Jan-24
Jan-23

Jan-25
Nov-24
Nov-23

Mar-24
Mar-23

May-24
May-23
Apr-24
Apr-22

Apr-23

Aug-24
Jun-22
Aug-22

Aug-23

Jun-24
Jun-23

Feb-24
Feb-23

Dec-24
Dec-22

Dec-23
Oct-22

Oct-24
Oct-23

Source: Ministry of commerce, PL Source: Ministry of commerce, PL

Dec IIP falls 120bps to 3.22%, decline in consumer non -durables (-7.6%) neutralizes sharp uptick in CG (+10.3%)
Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24
General 4.4 4.2 5.6 5.5 5.2 6.3 4.7 4.7 -0.1 3.1 3.7 5.0 3.2
Mining 5.2 6.0 8.1 1.3 6.8 6.6 10.3 3.8 -4.3 0.2 0.9 1.9 2.6
Manufacturing 4.6 3.6 4.9 5.9 4.2 5.1 3.2 4.4 1.1 3.9 4.4 5.5 3.0
Electricity 1.2 5.6 7.6 8.6 10.2 13.7 8.6 7.9 -3.7 0.5 2.0 4.4 6.2
Use-Based
Basic goods 4.8 2.9 5.9 3.0 7.0 7.3 6.3 5.9 -2.6 1.8 2.5 2.7 3.8
Intermediate goods 3.7 5.3 8.6 6.1 3.8 3.5 3.0 6.4 3.0 3.6 4.6 4.8 5.9
Capital goods 3.7 3.2 1.7 7.0 2.8 2.6 3.8 11.8 0.5 3.6 3.1 8.8 10.3
Infra/Construction Goods 5.5 5.5 8.3 7.4 8.5 7.6 7.1 4.6 2.2 3.2 4.8 8.1 6.3
Consumer Durables 5.2 11.6 12.6 9.5 10.5 12.6 8.8 8.2 5.4 6.3 5.7 14.1 8.3
Consumer Non-durables 3.0 0.3 -3.2 5.2 -2.5 2.8 -1.5 -4.3 -4.5 2.2 2.6 0.4 -7.6
Source: MOSPI, PL

Jan’25 GST Collection at Rs.1.96bn, up 12.3% YoY, highest growth in GST and cess since April’24

2,200 GST Collections (Rs Bn)

2,000

1,800
(Rs bn)

1,600

1,400
1,409
1,446
1,490

1,870
1,495
1,459

1,496

1,649

1,785

1,955
1,436

1,750
1,559

1,720

2,103
1,675

1,679

1,769
1,683

1,823
1,873
1,477

1,738

1,732
1,627

1,727
1,601

1,821
1,741

1,200
1,615
1,517

1,651
1,591
1,571

1,000
Apr-22

Apr-24
Apr-23

Aug-23

Jun-24
Jun-22

Aug-22

Jun-23

Aug-24
Sep-22

Sep-24
Sep-23

Jul-24
Jul-23
Jan-23
Feb-23

Jan-24

Jan-25
Jul-22

Dec-24
Dec-22

Dec-23

Nov-24
Nov-23

Feb-24
Nov-22

Mar-24
Mar-23
May-22

May-24

Oct-24
Oct-22

May-23

Oct-23

Source: GOI, PL

February 24, 2025 31

 India Strategy

FEI-CCI gap at 27 in Jan’25; FY25 Avg. of 27.2 CPI at 4.3% in Jan25 vs 6.2% in Oct

Consumer Confidence Index Future Expectation Index CPI Core Inflation Food Inflation
145.0 14.0
122 123 125 121 121
117 115 113 116 12.0 11.5
125.0 10.9
103 9.4
98 95 97 95 94 10.0 8.7
105.0 92 4.7 9.5 6.0
87 8.0 7.4
81 6.2
5.2 5.2
85.0 6.0 5.1 4.8 5.1
64 4.7 5.7 4.3
56 4.0 3.7
65.0 50 4.9 3.9 3.4
2.0 6.0 3.8 3.1 3.7
45.0
0.0
Apr-24
Apr-22

Apr-23
Apr-21

Jul-22

Jul-24
Jul-23
Jul-21

Jan-24
Jan-22

Jan-23

Jan-25
Jan-21

Oct-24
Oct-22

Oct-23
Oct-21

Sep-24
Sep-23

Jul-24
Jul-23

Jan-24
Jan-23
Nov-22

Nov-24

Jan-25
Nov-23

Mar-24
May-23
Mar-23

May-24
Source: CMIE, PL
Source: MOSPI, PL

Food Inflation has fallen 490bps in 3months due to softened prices of fresh produce, core inflation remains sticky
Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25
Consumer Price Index (CPI)
Weight 5.1 5.1 4.9 4.8 4.8 5.1 3.6 3.7 5.5 6.2 5.5 5.2 4.3
Food, Beverages and Tobacco 45.9 7.6 7.8 7.7 7.9 7.9 8.4 5.1 5.3 8.4 9.7 8.2 7.7 5.7
Pan Tobacco and Intoxicants 2.4 3.3 3.1 3.1 3.0 3.0 3.1 3.0 2.7 2.5 2.5 2.3 2.5 2.3
Clothing and Footwear 6.5 3.4 3.1 3.0 2.9 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7
Housing 10.1 3.2 2.9 2.7 2.7 2.6 2.7 2.7 2.7 2.7 2.8 2.9 2.7 2.8
Fuel and Light 6.8 -0.6 -0.8 -3.4 -4.0 -3.7 -3.6 -5.5 -5.3 -1.3 -1.7 -1.8 -1.3 -1.4
Miscellaneous 28.3 3.8 3.6 3.5 3.5 3.4 3.4 3.8 3.9 4.0 4.3 4.3 4.2 4.3
Consumer Food Price Index 39.1 8.3 8.7 8.5 8.7 8.7 9.4 5.4 5.7 9.2 10.9 9.0 8.4 6.0
Source: MOSPI, PL

India’s Trade Deficit up 39% YoY, however lower by USD8.8bn than Nov24, Non oil/ Non Gold imports up 19%
Merchandise Trade
Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25
(USD bn)
Exports 37.3 41.4 41.7 35.3 39.6 35.2 33.9 34.7 34.6 39.2 32.0 38.0 36.4
YoY % 4% 12% -1% 2% 13% 2% -2% -9% 0% 17% -5% -1% -2%
Imports 53.9 60.1 57.3 54.7 62.1 56.7 57.5 64.3 55.3 66.2 63.9 59.9 59.4
YoY % 2% 12% -6% 10% 8% 7% 9% 3% 2% 4% 16% 5% 10%
- Oil 15.5 16.9 17.2 16.5 19.9 15.0 13.9 11.0 12.5 18.3 15.9 15.3 13.4
YoY % -2% 0% -4% 9% 28% 20% 18% -32% -11% 13% 7% 2% -13%
- Gold 1.9 6.1 1.5 3.1 3.3 3.1 3.1 10.1 4.4 7.1 9.8 4.7 2.7
YoY % 174% 134% -54% 178% -10% -39% -11% 104% 7% -1% 186% 55% 41%
- Non Oil Non Gold 36.4 37.1 38.5 35.1 38.8 38.6 40.5 43.3 38.4 40.8 38.1 40.0 43.3
YoY % 1% 9% -3% 4% 2% 8% 7% 5% 6% 1% 4% 2% 19%
Trade Deficit (16.6) (18.7) (15.6) (19.4) (22.5) (21.5) (23.6) (29.6) (20.7) (27.0) (31.8) (21.9) (23.0)
YoY % -3% 13% -18% 28% 0% 15% 28% 23% 3% -11% 49% 17% 39%
Source: Ministry of Commerce, PL

India’s Service exports up 18% YoY and imports 14% in Jan, Services Balance up 21% to 20.3 bn USD
Services Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25
Exports (Receipts) 32.8 32.2 28.5 29.6 30.2 30.3 28.4 30.7 30.6 34.0 35.7 32.7 38.6
YoY % 2% 17% -6% 15% 12% 9% 8% 7% 8% 21% 27% 17% 18%
Imports (Payments) 16.1 15.4 15.8 17.0 17.3 17.3 14.6 15.7 16.3 17.0 17.7 17.5 18.2
YoY % 2% 3% -7% 22% 9% 11% 6% 4% 12% 26% 29% 32% 14%
Services balance 16.8 16.8 12.7 12.6 12.9 13.0 13.9 15.0 14.3 17.0 18.0 15.2 20.3
YoY % 2% 35% -6% 7% 16% 7% 11% 10% 3% 17% 25% 4% 21%
Source: Ministry of Commerce, PL

February 24, 2025 32

 India Strategy

Crude at $76.2, up 2.5% since Jan25 Coal prices soften 9% since Nov24

Brent Crude Coal

110 200

100 95
150 130
90
108 102
87 106 94
USD/bbl

90

USD/MT
82
100
80
78 76 50
70 72 70
60 0

Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Feb-24
Feb-23

Feb-25
Dec-24
Dec-23

Oct-24
Oct-23
Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Feb-24
Feb-23

Feb-25
Dec-24
Dec-23

Oct-24
Oct-23

Source: PL Source: Bigmint, PL

Steel prices have gone up 4% since Jan’25 Prices flattish in 3m, up 5.6% since Jan’25

Steel Aluminium
70000
2900 2683
65000 59800 2532
58850 2700
60000 2500
53900
(USD/MT)
INR/MT

2300 2480
55000
48500 2100
50000 51950 2218
1900
45000
1700
40000 1500
Apr-24
Apr-23

Jun-24
Aug-24
Aug-23
Jun-23

Feb-24
Feb-23

Feb-25
Dec-24
Dec-23

Oct-24
Oct-23

Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Feb-24
Feb-23

Feb-25
Dec-24
Dec-23

Oct-24
Oct-23

Source: Bigmint, PL Source: PL

Palm oil prices down 9% from recent high SMP prices wobbles around 250-260

Palm oil Netherlands dairy SMP index

120000
110000 290
101378 258
100000 270
EUR/100kg

90000 250
Rs/MT

77814 250
80000 92884 230
233
70000 210 226
212
60000 67528 190
59999 170
50000
40000 150
Apr-24

Apr-24
Apr-23

Apr-23
Jun-24

Jun-24
Jun-23

Jun-23
Aug-24

Aug-24
Aug-23

Aug-23
Feb-24

Feb-24
Feb-23

Feb-25

Feb-23

Feb-25
Dec-24

Dec-24
Dec-23

Dec-23
Oct-23

Oct-23
Oct-24

Oct-24

Source: PL Source: PL

February 24, 2025 33

 India Strategy

Sugar prices up by 6.7% since Jan’25 Wheat prices up 32% since Harvest in May’24
3175
4400 Sugar 3300 Wheat
4200 4100
4200 3100
4050
4000
4000 2900
3850 2727

Rs/Quintal
2700
Rs/Quintal

3800 2720
3740 2500
3600
2300 2400
3400 3450 2100 2163
3200 1900
Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Feb-24
Feb-23

Feb-25
Dec-24
Dec-23
Oct-23

Oct-24

Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Feb-24

Dec-24
Dec-23
Feb-23

Feb-25
Oct-24
Oct-23
Source: PL Source: PL

C-D gr. gap increases to 110bps up 50bps during Jan25

Credit gr. (%) Deposit gr. (%)

20%
18% 16.5% 16.5% 16.2%
16%
14% 12.0% 8.6% 12.5%
12% 10.6%
10% 12.9%
11.7%
8% 9.6% 10.6%
6% 5.3%
4%
2%
0%
Apr-20

Apr-22

Apr-24
Apr-23
Apr-21

Jul-22

Jul-24
Jul-23
Jan-20

Jul-20

Jul-21

Jan-24
Jan-22

Jan-23

Jan-25
Oct-20
Jan-21

Oct-24
Oct-22

Oct-23
Oct-21

Source: RBI, PL

Agri and Retail credit growth softens by ~300/140bps in Dec’24, Industrial credit dips by a sharp 280bps YoY

Industry Retail Services Agri Credit

30% 26.8%
26% 21.4% 22.2%
22%
16.4%
18% 14.9%
19.7%
14% 18.1% 17.4% 14.0%
15.2%
10% 14.4% 12.3%
6% 8.6% 9.1%
8.0% 8.9%
7.2% 7.4%
2% 6.0% 5.5% 5.3%
-2%
Apr-24
Apr-23

Jun-24
Jun-23

Aug-24
Aug-23

Sep-23

Sep-24
Feb-24

Jul-24
Jan-23
Dec-22

Jul-23
Nov-22

Jan-24

Nov-24
Nov-23

May-24

Dec-24
May-23

Oct-24
Oct-23

Dec-23

Mar-24
Mar-23

Source: RBI, PL

February 24, 2025 34

 Demand met (MW)

400

100

0
500

200
300
7000
8000

5500
6500

5000
6000
9000

7500
8500
Dec-22 256 Nov-22 7763

220000

180000
200000
240000

120000
160000

100000
140000
260000
260 7786
Feb-23 233 Jan-23 210725 Jan-23 7178

Source: RBI, PL
264

Source: PPAC, PL
Apr-23 260 Mar-23 209017 Mar-23 7793

February 24, 2025

274 7818
Jun-23 264 May-23 221347 May-23 8214
7906
278 Jul-23 6889
Jul-23 208825

Source: CEA, PL Research

Aug-23 291 6670
275 Sep-23 Sep-23 6493
Oct-23 321 221627 7635
298 Nov-23 Nov-23 7528
Dec-23 322 213620 7605
330 Jan-24 222327 Jan-24 7426
Feb-24 312 Mar-24 8039
Diesel ('000 Tons)

345 Mar-24
Apr-24 345 249854 May-24 8412

No. of Transactions (Mn)

May-24
361 7982
Jun-24 359 Jul-24 226630 Jul-24 7193
385 6501
Aug-24 391 Sep-24 230608 Sep-24 6369
393 7645

Dec’24 Credit Card transaction up 31% YoY

Nov-24 207441 Nov-24
Oct-24 434 8057

Jan’25 Power demand rebounds, up 6.7% YoY

394 Jan-25 7739
Jan-25 237309
Diesel usage in Jan’25 is up 4.2% YoY at 7.7MMT

Dec-24 434

(bn units)

1500
1000

0
2500

500
2000
3,100

2,500
2,900
3,500

2,700
3,300
3,700

165

125

105
135
175

145

95
115

85
155
Dec-22 1269 Dec-22 10 Nov-22 2861
1281 13 2984
Feb-23 1190 Feb-23 8 Jan-23 2827

Source: RBI, PL
Source: CEA, PL
1377 -2
Source: PPAC, PL

Apr-23 1331 Apr-23 -1 Mar-23 3107

1410 1 2877
Jun-23 1376 Jun-23 4 May-23 3348
1451 8 3152
Aug-23 15 Jul-23 2984
Aug-23 1490 10
1427 3093
Oct-23 20 Sep-23 3058
Oct-23 1790 6
1610 3140
Dec-23 1
Dec-23 1655 6
Nov-23 3129
Electricity Generation in India

Feb-24 8
2990
1668 Jan-24 3100
Feb-24 1496 8.6
Apr-24 10.2
Petrol ('000 Tons)

1649 Mar-24 3324

13.7

Spends Amount (bn)

Apr-24 1570
Jun-24 8.6
1650 7.9 May-24 3463
Jun-24 1592 Aug-24 -4.3 3296
1731 1.0 Jul-24 3297
Aug-24 1686 Oct-24 2.0 3360
Energy generation up 6.2%YoY in Dec’24

1766 4.5 Sep-24 3149

Oct-24 2022 Dec-24 6.2 3412
1697 Nov-24
Jan’25 consumption rises 6.7%YoY to 3.3MMT

-
YoY Growth - RHS

Dec-24 1885 3320

10
30
50

20
40

-10

-30
-20

Jan-25 3308
India Strategy

Spending up 13.9% as ticket size declines 15% YoY

35
 ('000) ('000)

10.0%

6.0%

2.0%

0.0%
4.0%
8.0%

160

120
100

60

0
140

20
40
80
3000

1500

1000

0
500
2500

2000
Jan-23 73 Jan-23 1404 3Q23
70
93

Source: SIAM, PL
Source: SIAM, PL
Apr-23 87 4Q23

February 24, 2025

Apr-23 1597
91 1731

Source: Company, PL
107

9.5%
Jul-23 67 Jul-23 1584 1Q24
62 1857
105 2052
Oct-23 125 2Q24

3.1%
Oct-23 2187
79 1902
52 1500

2.6%
3Q24

2W

Tractors
Jan-24 63 Jan-24 1755
75 1815 4Q24
Apr-24 84 Apr-24 2072 2.0%
92 1933
FMCG YoY Sales Growth

1Q25

Jan Tractor volumes up 11% at 70k

3.7%

Jul-24 68 Jul-24 1767

59 2050

Jan’25 2W Sales up 8.6% YoY at 1.91mn

108 2398 2Q25
4.1%

Oct-24 152 Oct-24 2530

78 1967
59 1481 3Q25
FMCG sales in slow zone with 2.6% growth YoY

Jan-25 70 Jan-25 1907

2.6%

('000)
0

0
0
0
0
0
0

('000)

400

100

0
500
600

200
300
Apr-23 22%

100
50
250

0
350

200
300

150
15%
Jan-23 354
Q3FY22 221 337 Jun-23 19%
500 25%
Q4FY22 277 Apr-23 325

Source: SIAM, PL
Aug-23 23%
Source: DGCA, PL

342
Q1FY23 244 481 18%
Jul-23 362 Oct-23 11%
Q2FY23 255 378 9%
519
Q3FY23 246 Dec-23 8%
Oct-23 395
342 5%
Q4FY23 297
PV

445 Feb-24 5%
Q1FY24 231 Jan-24 389 4%

CV
Apr-24 2%
YoY (%) (RHS)

Q2FY24 265 539

Apr-24 337 4%
Q3FY24 254 355 Jun-24 6%
7%
Q4FY24 283 Jul-24 359
Aug-24 6%
PV sales are up by 5.2%YoY in Jan’25

375
Q1FY25 240 518 6%
Nov Air traffic rises by 12% YoY to 14mn

Oct-24 407 Oct-24 8%

Q2FY25 241 361
12%
492
3QFY25 CV volumes up to 260k, up 2.2% YoY

Q3FY25 260 Jan-25 409 Dec-24 8%

India Strategy

36
Source: SIAM, PL (*TATA motors only gives Quarterly numbers)
 India Strategy

3Q25 EBIDTA/PBT largely in line

▪ PL universe 3QFY25 numbers were in line with sales beat of 1.8% while EBIDTA
and PBT grew 5.4% and 3.3% (lower by 0.6%/ 0.8% than PLE). Ex-BFSI EBIDTA
increased 3.8% YoY while PBT increased 3.3%. Ex-O&G EBIDTA increased 7.4%
while PBT increased 8.1% YoY.

▪ Hospitals, Media, Telecom and O&G had beat in sales while metals, Telecom
and pharma had max beat in EBIDTA. Auto, building material, Logistics and
Travel had max miss in EBIDTA. Travel, Hospitals, EMS, Capital Goods,

▪ There were 27 rating upgrades and 7 rating downgrades aided by steep stock
price corrections. Capital Goods, Chemicals, Oil &Gas, Travel and EMS led with
5,4,4,3 and 3 upgrades. Downgrades did not show any sectoral trend.

▪ Major Rating Upgrade: Eicher, ABB, Cummins, Havells, SRF, Keynes, Mphasis,
ONGC, GAIL, Chalet, Interglobe Aviation and VIP Inds.

▪ Major Rating Downgrade: Bharat Forge, Green Panel, Grindwell Norton, PVR.

▪ Major Estimates Upgrade – Divis, Fortis, Doms, Aarti, Navin and BPCL.

▪ Estimate Downgrade – Tata Motors, Bharat Forge, IIB, Green Panel, BEML,
BHEL, carborundum, Grindwell, Praj, Ambuja Cement, Shree Cement, RR
Kabel, Havells, SRF, RBA and Jubilant Foods.

Hospitals, Media, Telecom Shine; Building Material, Logistics, Travel miss estimates
Revenue (Rs mn) EBITDA (Rs mn) PBT (Rs mn) PAT (Rs mn)
Estimate Actual % Var. Estimate Actual % Var. Estimate Actual % Var. Estimate Actual % Var.
Automobiles 24,65,447 24,27,075 -1.6% 3,52,964 3,12,328 -11.5% 2,78,992 2,48,839 -10.8% 2,04,444 1,85,241 -9.4%
Banks 13,59,536 13,34,784 -1.8% 9,53,304 9,46,923 -0.7% 5,90,125 6,26,594 6.2%
Building Materials 81,662 80,241 -1.7% 10,972 9,689 -11.7% 9,032 7,291 -19.3% 6,974 5,860 -16.0%
Capital Goods 12,11,661 11,89,467 -1.8% 1,43,637 1,38,226 -3.8% 1,32,406 1,28,626 -2.9% 92,196 89,702 -2.7%
Cement 3,68,095 3,62,985 -1.4% 60,570 53,841 -11.1% 35,672 32,467 -9.0% 26,376 33,434 26.8%
Chemicals 1,25,152 1,24,258 -0.7% 21,354 20,388 -4.5% 14,175 13,184 -7.0% 10,727 9,813 -8.5%
Consumer Durables 2,04,382 2,05,285 0.4% 19,210 19,706 2.6% 18,248 17,248 -5.5% 13,246 12,442 -6.1%
Consumer Staples 10,23,109 9,99,779 -2.3% 2,04,685 1,97,537 -3.5% 1,94,488 1,89,095 -2.8% 1,46,045 1,43,856 -1.5%
Education 8,509 8,836 3.8% 600 864 44.1% 245 414 68.8% 191 164 -13.8%
EMS 24,295 22,555 -7.2% 2,572 2,358 -8.3% 2,067 1,942 -6.0% 1,576 1,437 -8.8%
HFCs 26,052 25,982 -0.3% 22,154 22,352 0.9% 15,772 17,905 13.5%
Hospitals 1,38,312 1,42,024 2.7% 26,889 27,444 2.1% 18,406 19,094 3.7% 13,552 14,007 3.4%
Information Technology 18,93,703 18,94,423 0.0% 3,80,011 3,80,873 0.2% 4,05,933 4,08,189 0.6% 2,99,790 3,00,613 0.3%
Logistics 42,395 42,688 0.7% 2,302 2,065 -10.3% 1,050 523 -50.2% 958 366 -61.7%
Media 42,046 43,227 2.8% 9,097 9,281 2.0% 3,467 3,547 2.3% 2,507 3,118 24.3%
Metals 21,11,885 21,07,430 -0.2% 2,51,137 2,77,176 10.4% 1,12,275 1,39,974 24.7% 73,699 99,547 35.1%
Oil & Gas 72,29,916 76,70,135 6.1% 9,14,826 9,19,252 0.5% 6,10,886 5,95,272 -2.6% 4,38,698 4,13,352 -5.8%
Pharmaceuticals 5,65,223 5,75,973 1.9% 1,47,249 1,52,995 3.9% 1,26,821 1,32,195 4.2% 96,372 99,745 3.5%
Telecom 4,37,649 4,51,293 3.1% 2,30,641 2,45,966 6.6% 59,422 76,866 29.4% 48,583 72,356 48.9%
Travel & Tourism 2,49,349 2,50,921 0.6% 75,030 68,216 -9.1% 39,838 32,255 -19.0% 36,873 44,240 20.0%
PL Universe 1,96,08,376 1,99,59,360 1.8% 38,29,204 38,07,481 -0.6% 20,63,423 20,47,021 -0.8% 21,18,702 21,73,794 2.6%
PL Universe (ex-BFSI) 1,82,22,789 1,85,98,594 2.1% 28,53,746 28,38,205 -0.5% 20,63,423 20,47,021 -0.8% 15,12,805 15,29,295 1.1%
PL Universe (ex-O&G) 1,23,78,461 1,22,89,225 -0.7% 29,14,378 28,88,229 -0.9% 14,52,537 14,51,749 -0.1% 16,80,004 17,60,441 4.8%
Source: Company, PL

February 24, 2025 37

 India Strategy

3Q25 EBIDTA grows 5.4%, PAT grows 4.5% YoY

▪ PL universe 3QFY25 numbers were in line with sales growth of 4.7% YoY while
EBIDTA and PBT grew 5.4% and 3.3%. Ex-BFSI EBIDTA increased 3.8% YoY
while PBT increased 3.3%. Ex-O&G EBIDTA increased 7.4% while PBT
increased 8.1% YoY.

▪ Durables, Pharma and Telecom had double digit topline and EBIDTA growth.
Cement, building materials had double digit decline in EBIDTA. Margin
pressure was intense in Building Materials, cement, Consumer staples, metals
and travel. Capital Goods, consumer durables, EMS, Hospitals, Media, Pharma,
telecom and Travel had double digit PAT growth.

Capital Goods, Pharma, Hospitals, Travel and Durables report double digit profit growth
Revenue Growth (%) EBITDA Growth (%) EBITDA Margin (bps) PBT (%) PAT (%)
YoY QoQ YoY QoQ YoY QoQ YoY QoQ YoY QoQ
Automobiles 7.3% 7.3% -0.3% 6.8% -99 -5 8.6% 1.9% -1.3% 13.7%
Banks 6.3% 0.6% 10.8% -7.0% 289 -580 0.0% 0.0% 7.3% -3.9%
Building Materials 3.5% 4.7% -12.7% 6.2% -224 17 -21.1% 1.0% -17.6% 2.8%
Capital Goods 16.8% 6.5% 15.8% 2.7% -10 -43 18.2% 1.4% 18.8% 2.3%
Cement -0.3% 11.1% -26.5% 29.5% -529 211 -36.1% 76.8% -12.0% 126.9%
Chemicals 8.8% 0.6% 5.8% -0.3% -47 -14 -0.6% -3.4% -8.1% -5.5%
Consumer Durables 14.1% 3.9% 24.1% 13.9% 77 84 16.4% 4.9% 22.5% 5.1%
Consumer Staples 8.1% 3.9% 0.0% 4.5% -160 12 -1.6% 5.2% -3.9% 5.5%
Education 25.0% 15.2% 161.0% 177.9% 510 573 -466.2% -2799.6% -254.2% -415.0%
EMS 28.8% 9.0% 51.9% 9.8% 159 7 62.9% 7.9% 58.7% 8.2%
HFCs -1.8% 1.7% -4.0% 0.5% -193 -102 0.0% 0.0% 21.3% 6.1%
Hospitals 17.8% -0.4% 24.1% -5.1% 97 -96 27.3% -8.8% 21.3% -3.7%
Information Technology 5.3% 1.1% 7.5% 2.6% 40 31 8.9% 2.3% 8.8% 2.6%
Logistics 9.4% 6.1% -0.3% 27.7% -47 82 -18.7% 16.1% 27.9% 42.2%
Media 8.6% 8.6% 24.3% 12.9% 271 83 69.2% 37.1% 92.8% 54.7%
Metals 3.8% 3.0% -2.1% 4.3% -80 17 -6.4% 2.8% -4.6% -8.7%
Oil & Gas -0.1% 6.6% -0.4% 20.0% -4 134 -6.9% 17.3% -10.8% 12.7%
Pharmaceuticals 11.4% 1.4% 17.9% 3.3% 146 50 20.9% 3.3% 18.3% 3.2%
Telecom 19.1% 8.8% 24.1% 12.6% 222 183 117.4% 35.4% 181.3% 62.7%
Travel & Tourism 13.2% 27.4% 8.8% 120.5% -110 1,148 -11.2% -954.8% 27.5% -898.5%

PL Universe 4.7% 5.2% 5.4% 6.2% 13 17 3.3% 10.3% 4.5% 7.5%

PL Universe (Ex-BFSI) 4.6% 5.6% 3.8% 11.5% -11 81 3.3% 10.3% 3.2% 13.1%
PL Universe (Ex-Oil & Gas) 7.9% 4.4% 7.4% 2.4% -10 -46 8.1% 7.6% 8.8% 6.4%
Source: Company, PL

▪ Capital Goods have positive outlook, led by sustained GOI focus on capex.
Hospitals and Pharma continue to have growth bias. We expect pick up in
domestic demand given tax rate cuts, lower inflation and interest rate cuts
which should benefit Auto, Hotels, Airlines, Durables/ electronics, QSR,
Apparel, Footwear, Building Material, Household Goods, Paints and AMC’s.

▪ Major Target Price increase – SRF, Navin, Eicher, Narayana, Max health, Fortis,
Mphasis, JSW steel, Marico and Interglobe Aviation.

▪ Major Target price Cuts – Bharat Forge, Axis Bank, SBI, Finolex Inds, Kajaria,
ABB. Siemens, BEML, Carbo, GN, RR Kabel, Voltas, Havells, RBA, APNT, PVR,
JSPL, IOC, D’Mart, Cyient DLM, Tata Motors, Ambuja Cement, Shree Cement.

February 24, 2025 38

 Q1FY19 39% Q1FY19 39% Q1FY19 39%

Q2FY19 41% Q2FY19 41% Q2FY19 41%

Q3FY19 35% Q3FY19 35% Q3FY19 35%

February 24, 2025

Q4FY19 18% Q4FY19 18% Q4FY19 18%

Source: Company, PL
Source: Company, PL
Source: Company, PL
Q1FY20 6% Q1FY20 6% Q1FY20 6%

Q2FY20 -2% Q2FY20 -2% Q2FY20 -2%

Q3FY20 0.1% Q3FY20 0.1% Q3FY20 0.1%

Q4FY20 -99.7% Q4FY20 -99.3% Q4FY20 -99.3%

Q1FY21 -78.3% Q1FY21 -49.5% Q1FY21 -31.5%

Q2FY21 -52.2% Q2FY21 -29.2% Q2FY21 -5.6%

Q3FY21 -46.0% Q3FY21 -22.5% Q3FY21 2.6%

Q4FY21 345.9% Q4FY21 55.9% Q4FY21 20.3%

Q1FY22 154.2% Q1FY22 64.7% Q1FY22 60.8%

Hospitals, CG, Telecom, EMS and Pharma boost sales

Q2FY22 64.5% Q2FY22 27.4% Q2FY22 38.8%

CG, Telecom, travel, Pharma and Hospitals led growth

Q3FY22 33.9% Q3FY22 16.9% Q3FY22 35.2%
All Sector Sales

All Sector PAT

All Sector EBITDA
2.9% Q4FY22 11.3% Q4FY22 31.1%
Q4FY22 CG, Hospitals, EMS, Durables, Telecom and Pharma power EBIDTA
Q1FY23 3.7% Q1FY23 51.4%
Q1FY23 5.0%

Q2FY23 -2.4% Q2FY23 35.9%

Q2FY23 -16.8%

6.6% Q3FY23 22.2%

3Q shows impact of tepid demand and slow Govt capex

Q3FY23 -2.2%
Q3FY23

Q4FY23 15.1% Q4FY23 17.0%

Q4FY23 26.7%

Q1FY24 48.6% Q1FY24 3.9%

Q1FY24 81.9%

Q2FY24 46.4% Q2FY24 2.3%

Q2FY24 64.5%

Q3FY24 24.8% Q3FY24 4.8%

Q3FY24 39.5%

Q4FY24 17.5% Q4FY24 5.5%

Q4FY24 23.2%

Q1FY25 -2.0% Q1FY25 4.9%

Q1FY25 -7.1%
Q2FY25 -2.4% Q2FY25 3.2%
Q2FY25 -5.5%
Q3FY25 5.4% Q3FY25 4.7%
Q3FY25 4.5%
India Strategy

39
 Q1FY19 46%
Q1FY19 46% Q1FY19 46%

Q2FY19 41%
Q2FY19 41% Q2FY19 41%

Q3FY19 39%
Q3FY19 39% Q3FY19 39%

February 24, 2025

Q4FY19 25%
Q4FY19 25% Q4FY19 25%

Source: Company, PL
Source: Company, PL
Source: Company, PL
Q1FY20 9%
Q1FY20 9% Q1FY20 9%

Q2FY20 5% Q2FY20 5%
Q2FY20 5%

Q3FY20 6.9% Q3FY20 6.9%

Q3FY20 6.9%

Q4FY20 -47.5% Q4FY20 9.5%

Q4FY20 -80.4%

Q1FY21 -89.5% Q1FY21 -54.2% Q1FY21 -16.9%

Q2FY21 -60.1% Q2FY21 -35.1% Q2FY21 9.9%

Q3FY21 -54.5% Q3FY21 -27.2% Q3FY21 18.9%

Q4FY21 140.0% Q4FY21 51.6% Q4FY21 31.1%

Q1FY22 333.2% Q1FY22 67.5% Q1FY22 51.4%

Q2FY22 55.7% Q2FY22 26.3% Q2FY22 29.1%

Q3FY22 24.0% Q3FY22 10.5% Q3FY22 23.2%

Q4FY22 11.9% Q4FY22 5.3% Q4FY22 24.0%

Q1FY23 16.0% Q1FY23 1.8% Q1FY23 35.9%

All Sector PAT - (Ex-Oil & Gas)

All Sector Sales - (Ex-Oil & Gas)

All Sector EBITDA - (Ex-Oil & Gas)

Q2FY23 -5.0% Q2FY23 -1.2% Q2FY23 28.6%

Q3FY23 9.4% Q3FY23 8.4% Q3FY23 22.7%

Q4FY23 30.9% Q4FY23 15.6% Q4FY23 22.3%

Building Materials, Cement, Metals, Auto and Consumer Staples drag EBIDTA growth

Q1FY24 61.2% Q1FY24 39.7% Q1FY24 15.5%

Q2FY24 46.9% 33.9% Q2FY24 11.7%

Q2FY24
CG, Telecom, EMS, Hospitals and Travel led growth; Metals, Cement and IT services drag sales

Q3FY24 39.7% Q3FY24 9.7%

Q3FY24 24.7%

Q4FY24 34.6% Q4FY24 7.9%

Q4FY24 23.6%

Q1FY25 7.1% Q1FY25 6.1%

Q1FY25 8.8%

Cement, Metal, Building material, consumer a drag; CG, Hospitals, Durables, EMS and Telecom lead growth
Q2FY25 9.5% Q2FY25 5.0%
Q2FY25 11.0%

Q3FY25 8.8% Q3FY25 7.9%

Q3FY25 7.4%
India Strategy

40
 India Strategy

3QFY25 Result Snapshot

Revenue EBITDA PAT
(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Automobiles
Ashok Leyland 94,787 92,730 2.2 87,688 8.1 12,114 11,139 8.8 10,173 19.1 7,617 5,804 31.2 6,793 12.1
Bajaj Auto 1,28,069 1,21,135 5.7 1,31,275 -2.4 25,807 24,299 6.2 26,522 -2.7 21,087 20,419 3.3 20,050 5.2
Bharat Forge 34,755 38,664 -10.1 36,885 -5.8 6,244 6,979 -10.5 6,473 -3.5 2,128 2,443 -12.9 2,436 -12.7
CEAT 32,999 29,631 11.4 33,045 -0.1 3,409 4,175 -18.3 3,623 -5.9 971 1,815 -46.5 1,219 -20.3
Divgi Torqtransfer Systems 525 630 -16.7 540 -2.7 86 129 -33.3 113 -24.1 52 94 -44.1 78 -33.2
Eicher Motors 49,731 41,788 19.0 42,631 16.7 12,012 10,903 10.2 10,877 10.4 11,705 9,960 17.5 11,003 6.4
Endurance Technologies 28,592 25,611 11.6 29,127 -1.8 3,725 2,990 24.6 3,820 -2.5 1,844 1,523 21.1 2,030 -9.2
Exide Industries 38,486 38,405 0.2 42,673 -9.8 4,486 4,399 2.0 4,836 -7.2 2,450 2,403 2.0 2,978 -17.7
Hero Motocorp 1,02,108 97,237 5.0 1,04,632 -2.4 14,765 13,621 8.4 15,159 -2.6 12,028 10,734 12.1 12,035 -0.1
Mahindra & Mahindra 3,05,382 2,53,829 20.3 2,75,533 10.8 43,843 32,950 33.1 39,042 12.3 29,643 24,897 19.1 38,409 -22.8
Maruti Suzuki 3,84,921 3,33,087 15.6 3,72,028 3.5 44,703 39,079 14.4 44,166 1.2 35,250 31,300 12.6 30,692 14.9
Tata Motors 11,35,750 11,05,771 2.7 10,14,500 12.0 1,30,320 1,53,333 -15.0 1,16,710 11.7 54,280 70,284 -22.8 28,560 90.1
TVS Motors 90,971 82,450 10.3 92,282 -1.4 10,815 9,244 17.0 10,798 0.2 6,185 5,934 4.2 6,626 -6.7
Total 24,27,075 22,60,971 7.3 22,62,838 7.3 3,12,328 3,13,240 -0.3 2,92,311 6.8 1,85,241 1,87,609 -1.3 1,62,910 13.7

Banks
Axis Bank 1,36,059 1,25,322 8.6 1,34,832 0.9 1,05,339 91,412 15.2 1,07,125 -1.7 63,038 60,711 3.8 69,176 -8.9
Bank of Baroda 1,14,169 1,11,013 2.8 1,16,221 -1.8 76,642 70,151 9.3 94,770 -19.1 48,373 45,793 5.6 52,379 -7.6
City Union Bank 5,877 5,159 13.9 5,825 0.9 4,360 3,640 19.8 4,282 1.8 2,860 2,530 13.0 2,852 0.3
DCB Bank 5,429 4,740 14.5 5,092 6.6 2,711 2,115 28.2 2,551 6.3 1,514 1,266 19.6 1,555 -2.6
Federal Bank 24,313 21,234 14.5 23,672 2.7 15,695 14,373 9.2 15,654 0.3 9,554 10,067 -5.1 10,567 -9.6
HDFC Bank 3,06,533 2,84,713 7.7 3,01,139 1.8 2,50,004 2,36,473 5.7 2,47,057 1.2 1,67,355 1,63,725 2.2 1,68,210 -0.5
ICICI Bank 2,03,706 1,86,786 9.1 2,00,480 1.6 1,68,866 1,47,236 14.7 1,67,232 1.0 1,17,924 1,02,715 14.8 1,17,459 0.4
IndusInd bank 52,281 52,956 -1.3 53,473 -2.2 35,989 40,022 -10.1 35,918 0.2 14,013 22,979 -39.0 13,255 5.7
Kotak Mahindra Bank 71,963 65,535 9.8 70,196 2.5 51,810 45,662 13.5 50,993 1.6 33,048 30,050 10.0 33,437 -1.2
State Bank of India 4,14,455 3,98,157 4.1 4,16,195 -0.4 2,35,508 2,03,360 15.8 2,92,937 -19.6 1,68,914 1,44,321 17.0 1,83,314 -7.9
Total 13,34,784 12,55,615 6.3 13,27,125 0.6 9,46,923 8,54,446 10.8 10,18,518 -7.0 6,26,594 5,84,158 7.3 6,52,203 -3.9

February 24, 2025 41

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Building Materials
Astral Ltd. 13,970 13,702 2.0 13,704 1.9 2,195 2,051 7.0 2,101 4.5 1,126 1,133 -0.6 1,087 3.6
Century Plyboard (I) 11,405 9,374 21.7 11,836 -3.6 1,295 1,061 22.1 1,113 16.3 588 627 -6.1 400 47.1
Cera Sanitaryware 4,523 4,389 3.1 4,926 -8.2 615 614 0.2 721 -14.6 464 515 -10.0 686 -32.4
Finolex Industries 10,012 10,197 -1.8 8,284 20.9 834 1,199 -30.4 106 689.3 940 954 -1.4 407 131.2
Greenpanel Industries 3,594 3,857 -6.8 3,369 6.7 173 600 -71.1 299 -41.9 85 277 -69.3 185 -54.0
Kajaria Ceramics 11,637 11,518 1.0 11,793 -1.3 1,487 1,788 -16.8 1,589 -6.4 787 1,045 -24.6 872 -9.7
Supreme Industries 25,099 24,491 2.5 22,730 10.4 3,088 3,788 -18.5 3,192 -3.3 1,870 2,562 -27.0 2,066 -9.5
Total 80,241 77,527 3.5 76,641 4.7 9,689 11,101 -12.7 9,121 6.2 5,860 7,112 -17.6 5,703 2.8

Capital Goods
ABB 33,649 27,575 22.0 29,122 15.5 6,573 4,172 57.6 5,402 21.7 5,319 3,452 54.1 4,405 20.8
Apar Inds Ltd 47,164 40,085 17.7 46,445 1.5 3,561 4,050 -12.1 3,565 -0.1 1,751 2,176 -19.5 1,939 -9.7
BEML 8,758 10,470 -16.4 8,598 1.9 604 559 8.0 730 -17.3 244 482 -49.4 539 -54.7
Bharat Electronics 57,561 41,367 39.1 45,834 25.6 16,533 10,494 57.5 13,885 19.1 13,161 8,933 47.3 10,913 20.6
BHEL 72,771 55,038 32.2 65,841 10.5 3,042 2,165 40.5 2,750 10.6 1,248 463 169.4 967 29.1
Carborandum Universal 12,555 11,514 9.0 12,241 2.6 1,770 1,925 -8.0 1,950 -9.2 1,389 1,113 24.8 1,159 19.9
Engineers India 7,646 8,676 -11.9 6,889 11.0 979 501 95.5 624 56.9 1,087 633 71.6 996 9.1
GE Vernova T&D India 10,737 8,390 28.0 11,078 -3.1 1,797 965 86.1 2,047 -12.2 1,427 493 189.1 1,446 -1.3
Grindwell Norton 7,026 6,599 6.5 6,939 1.3 1,234 1,278 -3.4 1,292 -4.5 868 925 -6.1 962 -9.7
Harsha Engineering 3,389 3,245 4.5 3,526 -3.9 428 398 7.6 418 2.2 267 297 -10.1 290 -7.8
Hindustan Aeronautics 69,573 60,613 14.8 59,763 16.4 16,825 14,353 17.2 16,400 2.6 14,398 12,614 14.1 15,061 -4.4
KEC International 53,494 50,067 6.8 51,133 4.6 3,745 3,079 21.6 3,202 16.9 1,296 969 33.7 854 51.7
Cummins India 30,860 25,341 21.8 24,923 23.8 6,000 5,379 11.5 4,810 24.7 5,140 4,562 12.7 4,506 14.1
Kalpataru Power Transmission 48,257 41,470 16.4 41,361 16.7 4,019 3,440 16.8 3,485 15.3 1,574 1,440 9.3 1,323 18.9
Larsen & Toubro 6,46,678 5,51,278 17.3 6,15,546 5.1 62,549 57,590 8.6 63,620 -1.7 33,588 29,474 14.0 33,953 -1.1
Praj Industries 8,530 8,286 2.9 8,162 4.5 586 965 -39.3 941 -37.8 411 704 -41.6 538 -23.6
Siemens 35,872 37,095 -3.3 44,570 -19.5 4,009 4,530 -11.5 5,448 -26.4 3,718 3,922 -5.2 4,707 -21.0
Thermax 25,078 23,244 7.9 25,456 -1.5 1,890 1,874 0.8 2,120 -10.8 1,159 1,437 -19.3 1,488 -22.1
Triveni Turbine 5,034 4,317 16.6 5,011 0.5 1,093 837 30.6 1,114 -1.9 924 682 35.5 909 1.7
Voltamp Transformers 4,835 4,085 18.4 3,977 21.6 990 819 21.0 750 32.1 734 717 2.4 757 -3.1
Total 11,89,467 10,18,755 16.8 11,16,415 6.5 1,38,226 1,19,374 15.8 1,34,554 2.7 89,702 75,487 18.8 87,711 2.3

February 24, 2025 42

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Cement
ACC 52,905 49,144 7.7 46,135 14.7 4,789 9,047 -47.1 4,364 9.7 2,294 5,376 -57.3 2,244 2.2
Ambuja Cement 48,537 44,395 9.3 40,752 19.1 4,111 8,511 -51.7 5,425 -24.2 14,507 5,137 182.4 3,981 264.4
Dalmia Bharat 31,810 36,040 -11.7 30,870 3.0 5,110 7,790 -34.4 4,340 17.7 610 2,630 -76.8 460 32.6
Nuvoco Vistas Corporation 24,094 24,210 -0.5 22,686 6.2 2,583 4,104 -37.1 2,188 18.1 -614 310 NA -852 NA
Shree Cement 42,355 49,008 -13.6 37,270 13.6 9,466 12,337 -23.3 5,925 59.8 2,294 7,342 -68.8 931 146.3
Ultratech Cement 1,63,284 1,61,342 1.2 1,49,052 9.5 27,783 31,488 -11.8 19,327 43.8 14,344 17,178 -16.5 7,969 80.0
Total 3,62,985 3,64,139 -0.3 3,26,766 11.1 53,841 73,277 -26.5 41,569 29.5 33,434 37,974 -12.0 14,733 126.9

Chemicals
Aarti Industries 18,400 17,320 6.2 16,280 13.0 2,320 2,600 -10.8 1,960 18.4 470 1,240 -62.1 510 -7.8
Clean Science and Technology 2,408 1,947 23.7 2,381 1.1 985 866 13.7 897 9.8 656 626 4.8 587 11.7
Deepak NIitrite 19,034 20,092 -5.3 20,320 -6.3 1,685 3,047 -44.7 2,975 -43.4 981 2,020 -51.4 1,942 -49.5
Fine Organic Industries 5,132 4,884 5.1 5,958 -13.9 990 1,182 -16.3 1,506 -34.3 827 952 -13.1 1,179 -29.9
Gujarat Fluorochemicals 11,480 9,917 15.8 11,880 -3.4 2,940 2,062 42.6 2,950 -0.3 1,260 801 57.3 1,210 4.1
Jubilant Ingrevia 10,568 9,664 9.4 10,452 1.1 1,383 956 44.7 1,246 11.0 694 385 80.0 590 17.6
Laxmi Organic Industries 7,863 6,936 13.4 7,713 2.0 748 516 45.0 747 0.1 293 272 7.8 281 4.2
Navin Fluorine International 6,062 5,018 20.8 5,186 16.9 1,473 757 94.7 1,074 37.2 836 780 7.2 588 42.1
NOCIL 3,181 3,406 -6.6 3,627 -12.3 240 489 -50.8 378 -36.4 129 300 -57.0 421 -69.4
SRF 34,913 30,530 14.4 34,243 2.0 6,196 5,658 9.5 5,380 15.2 2,711 2,534 7.0 2,014 34.6
Vinati Organics 5,217 4,480 16.4 5,533 -5.7 1,428 1,147 24.5 1,340 6.5 956 770 24.1 1,061 -10.0
Total 1,24,258 1,14,196 8.8 1,23,573 0.6 20,388 19,279 5.8 20,453 -0.3 9,813 10,681 -8.1 10,385 -5.5

Consumer Durables
Bajaj Electicals 12,897 12,282 5.0 11,183 15.3 874 806 8.4 516 69.4 334 374 -10.7 129 158.6
Crompton Greaves Consumer Electricals 17,692 16,927 4.5 18,960 -6.7 1,880 1,498 25.5 2,034 -7.6 1,098 860 27.7 1,249 -12.1
Havells India 48,890 44,139 10.8 45,393 7.7 4,265 4,327 -1.4 3,751 13.7 2,780 2,879 -3.5 2,678 3.8
KEI Inds 24,673 20,594 19.8 22,796 8.2 2,408 2,146 12.3 2,206 9.2 1,648 1,507 9.4 1,548 6.5
Polycab India 52,261 43,405 20.4 54,984 -5.0 7,199 5,695 26.4 6,316 14.0 4,576 4,129 10.8 4,398 4.0
R R Kabel 17,822 16,335 9.1 18,101 -1.5 1,105 1,126 -1.8 858 28.9 686 710 -3.4 495 38.4
Voltas 31,051 26,257 18.3 26,191 18.6 1,974 284 594.5 1,622 21.7 1,321 -304 NA 1,340 -1.4
Total 2,05,285 1,79,939 14.1 1,97,610 3.9 19,706 15,882 24.1 17,302 13.9 12,442 10,153 22.5 11,837 5.1

February 24, 2025 43

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Consumer Staples
Asian Paints 85,494 91,031 -6.1 80,275 6.5 16,367 20,561 -20.4 12,395 32.0 11,093 14,467 -23.3 9,111 21.7
Britannia Industries 45,926 42,563 7.9 46,676 -1.6 8,449 8,211 2.9 7,834 7.9 5,823 5,586 4.3 5,317 9.5
Colgate Palmolive 14,618 13,957 4.7 16,191 -9.7 4,544 4,684 -3.0 4,974 -8.6 3,228 3,301 -2.2 3,530 -8.6
Dabur India 33,553 32,551 3.1 30,286 10.8 6,819 6,678 2.1 5,526 23.4 5,158 5,064 1.9 4,175 23.5
Avenue Supermarts 1,59,726 1,35,725 17.7 1,44,445 10.6 12,172 11,199 8.7 10,938 11.3 7,235 6,906 4.8 6,596 9.7
Emami 10,495 9,963 5.3 8,906 17.8 3,387 3,149 7.6 2,505 35.2 2,789 2,643 5.5 2,127 31.2
Hindustan Unilever 1,54,080 1,51,880 1.4 1,55,080 -0.6 35,700 35,400 0.8 36,470 -2.1 25,410 25,410 - 26,110 -2.7
ITC 1,70,528 1,64,833 3.5 1,86,491 -8.6 58,284 60,243 -3.3 61,233 -4.8 51,225 55,776 -8.2 50,795 0.8
Jubilant FoodWorks 16,111 13,551 18.9 14,669 9.8 3,128 2,827 10.6 2,842 10.0 658 610 7.9 521 26.4
Kansai Nerolac Paints 18,422 18,149 1.5 18,638 -1.2 2,469 2,399 2.9 2,150 14.8 1,699 1,576 7.8 1,302 30.6
Metro Brands Asia 7,031 6,355 10.6 5,855 20.1 2,250 1,990 13.1 1,548 45.4 946 978 -3.3 698 35.6
Marico 27,940 24,220 15.4 26,640 4.9 5,330 5,130 3.9 5,220 2.1 4,060 3,860 5.2 3,880 4.6
Mold Tech Packaging 1,907 1,655 15.2 1,913 -0.3 338 303 11.6 336 0.8 136 142 -3.9 141 -3.3
Nestle India 47,797 46,004 3.9 51,040 -6.4 11,027 11,130 -0.9 11,677 -5.6 7,139 7,808 -8.6 7,595 -6.0
Pidilite Industries 33,689 31,300 7.6 32,349 4.1 7,984 7,425 7.5 7,688 3.8 5,571 5,109 9.0 5,403 3.1
Restaurant Brands Asia 4,956 4,454 11.3 4,922 0.7 778 708 10.0 701 11.1 -184 -64 NA -165 NA
Titan Company 1,60,970 1,30,520 23.3 1,32,150 21.8 17,630 14,570 21.0 14,230 23.9 11,800 10,400 13.5 9,225 27.9
Westlife Development 6,537 6,003 8.9 6,180 5.8 881 920 -4.2 760 15.9 70 172 -59.3 4 1,851.0
Total 9,99,779 9,24,711 8.1 9,62,706 3.9 1,97,537 1,97,526 0.0 1,89,026 4.5 1,43,856 1,49,744 -3.9 1,36,363 5.5

Education
DOMS Industries 5,011 3,716 34.9 4,578 9.5 879 693 26.7 859 2.2 507 373 35.8 513 -1.2
Navneet Education 2,823 2,588 9.1 2,718 3.9 178 40 340.9 26 596.9 -97 -131 NA -49 NA
S Chand & Co 1,002 763 31.2 374 167.5 -192 -403 NA -574 NA -246 -349 NA -517 NA
Total 8,836 7,067 25.0 7,670 15.2 864 331 161.0 311 177.9 164 -107 NA -52 NA

February 24, 2025 44

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
EMS
Avalon Technologies 2,809 2,143 31.1 2,750 2.1 346 165 109.2 301 14.9 240 66 264.7 175 37.2
Cyient DLM 4,442 3,210 38.4 3,895 14.1 281 294 -4.4 316 -11.1 110 184 -40.4 155 -28.9
Kaynes Technology India 6,612 5,093 29.8 5,721 15.6 940 699 34.6 821 14.5 665 452 47.1 602 10.4
Syrma SGS Technology 8,692 7,067 23.0 8,327 4.4 791 394 100.4 710 11.4 422 203 108.1 396 6.5
Total 22,555 17,513 28.8 20,693 9.0 2,358 1,553 51.9 2,149 9.8 1,437 905 58.7 1,328 8.2

Healthcare
Apollo Hospitals Enterprise 55,269 48,506 13.9 55,893 -1.1 7,615 6,137 24.1 8,155 -6.6 3,723 2,453 51.8 3,788 -1.7
Aster DM Healthcare 10,498 9,490 10.6 10,864 -3.4 1,938 1,580 22.6 2,247 -13.8 554 647 -14.4 958 -42.2
Fortis Healthcare 19,283 16,797 14.8 19,884 -3.0 3,752 2,840 32.1 4,348 -13.7 2,479 1,347 84.1 1,765 40.5
HealthCare Global Enterprises 5,586 4,699 18.9 5,535 0.9 884 786 12.4 1,023 -13.6 70 57 22.5 180 -61.2
Jupiter Life Line Hospitals 3,206 2,726 17.6 3,226 -0.6 750 619 21.3 750 0.0 525 437 20.3 515 2.0
Krishna Institute of Medical Sciences 7,724 6,058 27.5 7,773 -0.6 1,872 1,471 27.2 2,181 -14.2 887 718 23.5 1,074 -17.4
Max Healthcare Institute 22,810 16,890 35.1 21,250 7.3 6,220 4,720 31.8 5,660 9.9 3,150 3,390 -7.1 3,490 -9.7
Narayana Hrudayalaya 13,667 12,036 13.5 14,000 -2.4 3,070 2,790 10.1 3,084 -0.5 1,932 1,882 2.6 1,990 -2.9
Rainbow Children's Medicare 3,981 3,360 18.5 4,175 -4.6 1,344 1,181 13.8 1,471 -8.7 687 621 10.6 789 -12.9
Total 1,42,024 1,20,562 17.8 1,42,600 -0.4 27,444 22,123 24.1 28,919 -5.1 14,007 11,552 21.3 14,548 -3.7

Housing Finance
Aavas Financiers 2,533 2,208 14.8 2,418 4.8 1,945 1,577 23.3 1,948 -0.2 1,464 1,166 25.5 1,479 -1.0
Can Fin Homes 3,447 3,288 4.8 3,398 1.5 2,913 2,858 1.9 2,878 1.2 2,121 1,964 8.0 2,115 0.3
LIC Housing Finance 20,001 20,972 -4.6 19,739 1.3 17,495 18,845 -7.2 17,417 0.4 14,320 11,629 23.1 13,289 7.8
Total 25,982 26,468 -1.8 25,554 1.7 22,352 23,280 -4.0 22,244 0.5 17,905 14,759 21.3 16,883 6.1

February 24, 2025 45

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Information Technology
Cyient 19 18 5.8 18 4.2 2 3 -15.6 2 -4.9 1 2 -31.0 2 -28.4
HCL Technologies 299 284 5.1 289 3.6 58 56 3.7 54 8.6 46 44 5.5 42 8.4
Infosys 418 388 7.6 410 1.9 89 80 11.9 86 3.0 68 61 11.7 65 4.8
LTIMindtree 97 90 7.1 94 2.4 13 14 -4.1 15 -8.9 11 12 -7.2 13 -13.2
Mphasis 36 33 6.7 35 0.7 5 5 9.8 5 0.3 4 4 14.6 4 1.1
Persistent Systems 31 25 22.6 29 5.7 5 4 25.5 4 12.2 4 3 30.3 3 14.8
Tata Consultancy Services 640 606 5.6 643 -0.4 157 152 3.3 155 1.2 124 117 5.5 119 4.0
Tech Mahindra 133 131 1.4 133 -0.2 13 9 37.3 13 -2.3 9 7 23.0 13 -29.3
Wipro 223 222 0.5 223 0.1 39 33 18.6 37 4.9 34 27 24.5 32 4.5
Total 1,894 1,798 5.3 1,874 1.1 381 354 7.5 371 2.6 301 276 8.8 293 2.6

Logistics
Delhivery 23,783 21,945 8.4 21,897 8.6 1,024 1,094 -6.3 573 78.8 250 162 54.6 102 144.9
Mahindra Logistics 15,942 13,972 14.1 15,211 4.8 737 522 41.1 664 11.0 -90 -197 NA -107 NA
TCI Express 2,963 3,119 -5.0 3,115 -4.9 304 456 -33.3 381 -20.2 207 322 -35.8 263 -21.4
Total 42,688 39,036 9.4 40,223 6.1 2,065 2,072 -0.3 1,617 27.7 366 286 27.9 258 42.2

Media
Imagicaaworld Entertaintment 919 700 31.2 400 129.8 296 277 7.1 -38 NA 29 98 -70.7 -69 NA
Nazara Technologies 5,347 3,204 66.9 3,189 67.6 523 377 38.9 252 108.1 307 254 20.8 238 28.7
PVR Inox 17,173 15,459 11.1 16,221 5.9 5,277 4,724 11.7 4,793 10.1 360 128 181.3 -118 NA
Zee Entertainment 19,788 20,457 -3.3 20,007 -1.1 3,184 2,092 52.2 3,210 -0.8 2,422 1,137 113.1 1,964 23.3
Total 43,227 39,820 8.6 39,817 8.6 9,281 7,469 24.3 8,217 12.9 3,118 1,617 92.8 2,015 54.7

February 24, 2025 46

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Metals & Mining
Hindalco Industries 584 528 10.6 582 0.3 76 59 29.3 79 -3.8 38 23 63.8 49 -22.7
Jindal Stainless 99 91 8.5 98 1.3 12 12 -3.1 12 1.8 7 7 -5.4 6 7.1
Jindal Steel & Power 117 117 -0.0 111 5.0 21 28 -25.0 21 0.4 10 19 -50.7 9 10.4
JSW Steel 414 419 -1.3 397 4.3 56 72 -22.3 54 2.6 8 24 -67.0 7 10.8
National Aluminium Co. 47 33 39.3 40 16.5 23 8 200.8 15 50.3 16 5 224.1 11 49.0
NMDC 66 54 21.4 49 33.5 24 20 18.2 14 71.2 19 17 14.4 12 58.6
Steel Authority of India 245 233 4.9 230 6.3 20 21 -5.4 13 59.8 1 3 -62.0 8 -84.9
Tata Steel 536 553 -3.0 539 -0.5 45 63 -28.3 57 -21.8 1 6 -78.1 7 -81.0
Total 2,107 2,030 3.8 2,047 3.0 277 283 -2.1 266 4.3 100 104 -4.6 109 -8.7

Travel & Tourism

Chalet Hotels 4,578 3,737 22.5 3,771 21.4 2,047 1,660 23.3 1,495 36.9 965 706 36.7 -1,385 NA
InterGlobe Aviation 2,21,107 1,94,521 13.7 1,69,696 30.3 59,371 54,484 9.0 23,947 147.9 39,052 29,981 30.3 -7,461 NA
Indian Railway Catering and Tourism Corporation 12,247 11,183 9.5 10,640 15.1 4,166 3,940 5.7 3,728 11.7 3,411 3,145 8.5 3,079 10.8
Lemon Tree Hotels 3,552 2,902 22.4 2,844 24.9 1,842 1,412 30.4 1,307 40.9 625 354 76.5 296 110.8
Safari Industries (India) 4,427 3,883 14.0 4,578 -3.3 504 682 -26.1 479 5.2 311 429 -27.4 297 5.0
V.I.P. Industries 5,011 5,464 -8.3 5,443 -7.9 286 523 -45.2 -22 NA -124 72 NA -366 NA
Total 2,50,921 2,21,690 13.2 1,96,971 27.4 68,216 62,701 8.8 30,935 120.5 44,240 34,687 27.5 -5,541 NA

February 24, 2025 47

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Oil & Gas
Bharat Petroleum Corporation 1,131.4 1,154.7 -2.0 1,027.6 10.1 75.8 62.0 22.3 45.1 68.0 46.5 34.0 36.9 24.0 93.9
GAIL (India) 349.6 342.5 2.1 329.3 6.2 28.4 38.2 -25.8 37.4 -24.2 14.3 28.4 -49.8 26.7 -46.6
Gujarat Gas 41.5 39.3 5.7 37.8 9.8 3.8 4.0 -5.0 5.1 -26.0 2.2 2.2 0.6 3.1 -27.8
Gujarat State Petronet 2.4 4.6 -48.2 2.4 -0.7 1.9 3.8 -49.3 1.9 -0.2 1.4 2.6 -48.3 3.9 -65.2
Hindustan Petroleum Corporation 1,020.7 1,041.7 -2.0 916.4 11.4 59.7 21.6 175.9 27.2 119.1 30.2 5.3 471.4 6.3 378.9
Indraprastha Gas 37.6 35.5 5.9 37.0 1.7 3.6 5.6 -34.9 5.4 -32.0 2.9 3.9 -27.1 4.3 -33.5
Indian Oil Corporation 1,939.0 1,991.0 -2.6 1,738.5 11.5 71.2 154.9 -54.1 37.7 88.6 21.9 80.6 -72.8 -9.8 NA
Mahanagar Gas 17.6 15.7 12.0 17.1 2.7 3.1 4.5 -30.0 4.0 -21.2 2.2 3.2 -29.1 2.8 -20.5
Manglore Refinery Petrochemicals 218.7 246.7 -11.3 249.7 -12.4 10.3 11.8 -12.9 -4.7 NA 3.0 3.9 -21.4 -6.8 NA
Oil India 52.4 58.2 -9.9 55.2 -5.1 21.3 21.1 1.3 21.8 -2.3 12.2 15.8 -22.9 18.3 -33.4
Oil & Natural Gas Corporation 337.2 347.9 -3.1 338.8 -0.5 189.7 171.6 10.5 182.4 4.0 82.4 98.9 -16.7 119.8 -31.2
Petronet LNG 122.3 147.5 -17.1 130.2 -6.1 12.5 17.1 -26.9 12.0 3.9 8.7 11.9 -27.2 8.5 2.3
Reliance Industries 2,399.9 2,250.9 6.6 2,315.4 3.6 437.9 406.6 7.7 390.6 12.1 185.4 172.7 7.4 165.6 11.9
Total 7,670.1 7,676.0 -0.1 7,195.2 6.6 919.3 922.8 -0.4 766.0 20.0 413.4 463.4 -10.8 366.8 12.7

Pharma
Aurobindo Pharma 79,785 73,518 8.5 77,960 2.3 16,278 16,013 1.7 15,661 3.9 8,456 9,400 -10.0 8,169 3.5
Cipla 70,730 66,038 7.1 70,510 0.3 19,889 17,475 13.8 18,800 5.8 15,705 10,559 48.7 13,029 20.5
Divis Lab 23,190 18,550 25.0 23,380 -0.8 7,430 4,890 51.9 7,160 3.8 5,890 3,580 64.5 5,100 15.5
Dr. Reddy's Laboratories 83,586 72,148 15.9 80,162 4.3 22,996 20,180 14.0 21,466 7.1 14,038 13,789 1.8 13,415 4.6
Eris Lifesciences 7,275 4,863 49.6 7,412 -1.9 2,503 1,755 42.6 2,646 -5.4 836 1,027 -18.6 916 -8.7
Indoco Remedies 4,106 4,594 -10.6 4,327 -5.1 120 629 -80.9 403 -70.1 -314 238 NA -104 NA
IPCA Labs 22,454 20,529 9.4 23,549 -4.7 4,461 3,310 34.8 4,498 -0.8 2,481 1,119 121.8 2,295 8.1
JB Chem & Pharma 9,635 8,445 14.1 10,006 -3.7 2,545 2,231 14.1 2,705 -5.9 1,625 1,336 21.7 1,746 -6.9
Lupin 57,678 51,974 11.0 56,727 1.7 13,659 10,219 33.7 13,083 4.4 8,552 6,131 39.5 8,526 0.3
Sun Pharmaceutical Industries 1,36,755 1,23,807 10.5 1,32,914 2.9 41,924 33,523 25.1 38,109 10.0 29,034 25,238 15.0 30,402 -4.5
Torrent Pharma 28,090 27,320 2.8 28,890 -2.8 9,140 8,690 5.2 9,390 -2.7 5,030 4,430 13.5 4,530 11.0
Zydus Lifesciences 52,691 45,052 17.0 52,370 0.6 12,050 10,818 11.4 14,160 -14.9 8,412 7,472 12.6 8,655 -2.8
Total 5,75,973 5,16,838 11.4 5,68,207 1.4 1,52,995 1,29,733 17.9 1,48,079 3.3 99,745 84,318 18.3 96,678 3.2

February 24, 2025 48

 India Strategy

Revenue EBITDA PAT

(Rs mn)
Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%) Q3FY25 Q3FY24 YoY gr. (%) Q2FY25 QoQ gr. (%)
Telecom
Bharti Airtel 4,51,293 3,78,995 19.1 4,14,733 8.8 2,45,966 1,98,148 24.1 2,18,462 12.6 72,356 25,724 181.3 44,469 62.7
Total 4,51,293 3,78,995 19.1 4,14,733 8.8 2,45,966 1,98,148 24.1 2,18,462 12.6 72,356 25,724 181.3 44,469 62.7

Total (Rs bn) 19,917 19,029 4.7 18,926 5.2 3,805 3,610 5.4 3,585 6.1 2,173 2,081 4.5 2,021 7.5
Source: Company, PL

February 24, 2025 49

 India Strategy

Change in Estimates - Pre-Quarterly to Current

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Automobiles
Ashok Leyland Accumulate Accumulate Maintained 223 243 244 0.6 9.4 655.1 9.9 11.3 12.4 9.7 11.0 12.4 -2.2% -2.2% 0.5%
Bajaj Auto BUY BUY Maintained 8,447 10,116 9853 -2.6 16.6 2,358.2 317.0 372.3 415.4 305.1 362.5 404.7 -3.7% -2.6% -2.6%
Eicher Motors HOLD Accumulate Upgrade 5,011 5,332 5764 8.1 15.0 1,372.0 168.5 191.2 213.6 168.1 188.1 205.8 -0.3% -1.6% -3.7%
Hero Motocorp Accumulate Accumulate Maintained 3,885 4,662 4736 1.6 21.9 776.4 230.7 245.5 266.0 232.2 253.9 280.1 0.7% 3.4% 5.3%
Mahindra & Mahindra BUY BUY Maintained 2,709 3,541 3664 3.5 35.3 3,249.0 105.3 116.7 132.3 103.3 114.1 129.2 -1.9% -2.3% -2.4%
Maruti Suzuki BUY BUY Maintained 12,345 14,129 14154 0.2 14.7 3,881.3 478.8 559.1 615.3 465.0 542.6 605.5 -2.9% -3.0% -1.6%
Tata Motors HOLD HOLD Maintained 668 784 733 -6.5 9.7 2,561.1 62.0 74.6 74.9 59.2 68.4 63.9 -4.6% -8.2% -14.7%
TVS Motor Company HOLD HOLD Maintained 2,362 2,650 2461 -7.1 4.2 1,122.4 55.2 66.3 76.5 54.4 65.2 75.1 -1.3% -1.7% -1.9%

Auto Ancillary
Bharat Forge Accumulate HOLD Downgrade 1,042 1,435 1050 -26.8 0.8 485.0 30.7 43.3 52.3 25.1 36.5 43.8 -18.3% -15.7% -16.3%
CEAT HOLD HOLD Maintained 2,645 3,244 3030 -6.6 14.6 107.0 135.4 181.6 227.9 120.0 171.3 212.2 -11.4% -5.7% -6.9%
Divgi Torqtransfer Systems HOLD Reduce Downgrade 500 637 408 -35.9 (18.4) 15.3 10.1 15.6 18.4 9.6 12.4 14.0 -5.5% -20.4% -23.8%
Endurance Technologies BUY BUY Maintained 1,840 2,698 2592 -3.9 40.8 258.8 62.6 80.8 101.5 58.2 76.4 97.9 -7.0% -5.4% -3.6%
Exide Industries HOLD HOLD Maintained 365 437 350 -19.9 (4.0) 309.8 13.1 17.1 17.8 12.7 15.2 15.8 -3.3% -11.0% -11.3%

Banks
Axis Bank BUY BUY Maintained 1,010 1,530 1350 -11.8 33.7 3,117.6 84.0 92.4 108.7 83.3 89.6 102.1 -0.8% -3.1% -6.0%
Bank of Baroda BUY BUY Maintained 209 315 285 -9.5 36.6 1,080.2 34.2 34.1 38.3 36.4 34.0 38.0 6.2% -0.5% -0.9%
City Union Bank BUY BUY Maintained 148 190 200 5.3 35.2 109.6 14.6 15.8 17.6 15.3 16.1 17.9 4.6% 1.9% 2.0%
DCB Bank BUY BUY Maintained 109 155 155 0.0 42.4 34.4 19.4 21.0 25.7 19.4 21.0 25.7 0.0% 0.0% 0.0%
Federal Bank BUY BUY Maintained 181 220 210 -4.5 15.9 441.4 16.9 19.2 22.9 16.4 17.8 21.0 -3.2% -7.4% -8.5%
HDFC Bank BUY BUY Maintained 1,677 2,000 1950 -2.5 16.3 12,740.8 88.5 94.6 105.8 88.2 93.0 103.3 -0.3% -1.8% -2.4%
ICICI Bank BUY BUY Maintained 1,218 1,640 1550 -5.5 27.2 8,557.0 65.1 71.7 84.1 66.0 71.6 82.1 1.4% -0.1% -2.4%
IndusInd Bank BUY BUY Maintained 1,029 1,500 1500 0.0 45.8 801.0 84.7 119.9 147.2 82.8 114.9 142.1 -2.3% -4.1% -3.5%
Kotak Mahindra Bank BUY BUY Maintained 1,966 2,230 2230 0.0 13.4 3,908.5 69.3 76.6 87.6 69.4 77.7 90.7 0.1% 1.4% 3.5%
State Bank of India BUY BUY Maintained 716 1,025 900 -12.2 25.6 6,393.6 75.2 74.4 83.9 76.5 73.1 81.1 1.8% -1.7% -3.3%

Housing Finance
AAVAS Financiers Accumulate Accumulate Maintained 1,682 1,900 1900 0.0 12.9 199.6 73.0 87.0 102.9 73.2 87.3 103.9 0.4% 0.3% 0.9%
Can Fin Homes BUY BUY Maintained 605 1,000 860 -14.0 42.1 80.6 63.7 67.5 76.5 63.1 65.3 71.2 -1.0% -3.2% -7.0%
LIC Housing Finance HOLD BUY Upgrade 536 675 650 -3.7 21.3 442.5 91.4 90.5 94.7 96.4 94.8 100.9 5.5% 4.8% 6.6%

February 24, 2025 50

 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Building Materials
Astral Ltd. BUY BUY Maintained 1,398 1,883 1808 -4.0 29.3 376.2 21.8 30.0 37.4 20.4 27.3 34.6 -6.4% -9.0% -7.3%
Century Plyboard (I) HOLD HOLD Maintained 765 811 811 0.0 6.0 170.3 11.2 17.6 23.2 10.7 17.6 23.1 -4.3% 0.1% -0.2%
Cera Sanitaryware HOLD Accumulate Upgrade 5,576 7,712 7456 -3.3 33.7 72.5 191.0 211.9 253.7 177.8 206.0 245.3 -6.9% -2.8% -3.3%
Finolex Industries Accumulate Accumulate Maintained 182 270 229 -15.2 25.8 112.6 6.9 9.5 11.0 6.9 9.1 10.4 0.5% -4.8% -4.9%
Greenpanel Industries BUY HOLD Downgrade 294 427 373 -12.6 27.2 36.0 8.3 15.8 21.0 4.3 8.9 18.3 -48.7% -43.8% -12.8%
Kajaria Ceramics BUY BUY Maintained 863 1,545 1224 -20.8 41.9 137.4 25.1 31.8 38.6 22.1 28.8 35.0 -11.8% -9.4% -9.4%
Supreme Industries BUY BUY Maintained 3,694 5,721 5040 -11.9 36.4 469.4 89.7 108.2 127.1 78.7 99.5 118.8 -12.2% -8.0% -6.5%

Capital Goods
ABB India Accumulate BUY Upgrade 5,390 8,133 6955 -14.5 29.0 1,142.1 86.0 99.3 117.6 88.5 96.4 110.4 2.8% -2.9% -6.1%
Apar Industries Accumulate Accumulate Maintained 6,449 10,160 8219 -19.1 27.5 259.0 211.1 264.8 311.2 192.4 241.1 293.5 -8.9% -9.0% -5.7%
BEML Accumulate Accumulate Maintained 2,640 4,332 3561 -17.8 34.9 109.9 83.8 124.4 164.4 65.3 106.2 148.2 -22.1% -14.6% -9.9%
Bharat Electronics BUY BUY Maintained 256 341 340 -0.2 32.6 1,873.9 6.3 7.6 8.6 6.5 7.8 9.1 3.3% 2.5% 5.8%
BHEL Accumulate Accumulate Maintained 191 260 226 -13.3 17.9 666.6 3.0 10.4 14.1 2.1 8.2 12.3 -29.5% -21.5% -12.4%
Carborundum Universal Accumulate Accumulate Maintained 877 1,583 1114 -29.6 27.0 166.9 26.4 34.9 41.9 23.4 25.1 31.3 -11.3% -28.0% -25.3%
Elgi Equipments NA Accumulate NA 467 NA 608 NA 30.2 147.9 NA NA NA 10.8 13.3 15.6 NA NA NA
Grindwell Norton BUY Accumulate Downgrade 1,481 2,511 1890 -24.7 27.6 164.0 37.5 45.6 54.7 34.1 39.4 46.6 -9.1% -13.6% -14.8%
Cummins India Accumulate BUY Upgrade 2,833 4,139 3723 -10.0 31.4 785.2 67.7 77.0 88.5 67.5 76.8 88.7 -0.3% -0.2% 0.1%
Engineers India BUY BUY Maintained 164 247 242 -2.0 47.1 92.3 8.4 11.5 13.5 8.3 11.5 13.5 -0.1% -0.2% -0.1%
GE Vernova T&D India Accumulate Accumulate Maintained 1,444 1,962 1950 -0.7 35.0 369.8 22.3 31.0 40.4 22.3 30.8 40.1 0.2% -0.6% -0.7%
Harsha Engineers InternationalAccumulate Accumulate Maintained 390 561 440 -21.6 12.7 35.5 15.4 21.0 25.8 13.1 18.2 23.7 -14.7% -13.1% -8.2%
Hindustan Aeronautics Accumulate Accumulate Maintained 3,350 4,692 4110 -12.4 22.7 2,240.7 97.5 112.1 127.0 96.7 109.8 125.1 -0.9% -2.0% -1.5%
Ingersoll-Rand (India) NA BUY NA 3,465 NA 4540 NA 31.0 109.4 NA NA NA 84.2 92.6 109.2 NA NA NA
KEC International HOLD Accumulate Upgrade 749 997 930 -6.8 24.2 199.3 25.6 50.0 62.0 23.6 45.8 58.8 -7.8% -8.3% -5.2%
Kalpataru Projects InternationalAccumulate BUY Upgrade 928 1,306 1178 -9.8 26.9 158.5 38.0 60.0 82.0 39.4 56.4 78.7 3.6% -6.0% -4.1%
Kirloskar Pneumatic Company NA BUY NA 1,064 NA 1564 NA 47.0 69.0 NA NA NA 31.5 38.7 46.6 NA NA NA
Larsen & Toubro BUY BUY Maintained 3,258 4,088 4025 -1.5 23.6 4,479.3 114.0 146.7 174.0 106.9 143.0 179.1 -6.2% -2.5% 2.9%
Praj Industries BUY BUY Maintained 542 804 751 -6.6 38.5 99.6 16.9 23.6 31.5 11.8 17.6 27.9 -30.6% -25.7% -11.2%
Siemens Accumulate Accumulate Maintained 4,873 7,716 5902 -23.5 21.1 1,734.8 68.2 87.0 105.7 68.2 77.6 93.7 0.0% -10.8% -11.4%
Thermax Reduce Accumulate Upgrade 3,263 4,275 3857 -9.8 18.2 388.7 53.2 68.3 76.9 50.2 67.7 76.8 -5.5% -0.8% -0.2%
Triveni Turbine BUY BUY Maintained 564 800 800 0.0 41.9 179.2 12.0 16.0 21.2 11.6 16.0 21.2 -3.5% 0.3% -0.2%
Voltamp Transformers BUY BUY Maintained 6,926 12,531 11437 -8.7 65.1 70.1 311.2 333.7 382.4 314.0 333.9 380.8 0.9% 0.1% -0.4%

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 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Cement
ACC BUY BUY Maintained 1,851 3,251 2878 -11.5 55.5 348.0 97.4 119.1 131.0 87.8 102.5 113.1 -9.9% -13.9% -13.6%
Ambuja Cement BUY BUY Maintained 470 707 628 -11.2 33.5 1,033.8 11.2 21.2 22.6 10.5 18.5 19.0 -6.4% -12.8% -16.0%
Dalmia Bharat Accumulate Accumulate Maintained 1,745 2,017 1988 -1.5 13.9 327.2 38.8 65.9 75.2 36.4 61.7 75.1 -6.2% -6.5% -0.1%
Nuvoco Vistas Corporation Hold Hold Maintained 316 372 339 -8.8 7.3 112.9 1.8 9.8 14.6 -0.4 8.6 14.7 NA -12.4% 0.8%
Shree Cement Hold Hold Maintained 28,292 24,838 26190 5.4 (7.4) 1,020.8 460.5 623.0 664.8 276.4 544.3 622.0 -40.0% -12.6% -6.4%
Ultratech Cement Accumulate Accumulate Maintained 11,043 12,145 12350 1.7 11.8 3,187.9 241.8 370.2 457.8 236.7 365.6 439.2 -2.1% -1.2% -4.1%

Chemicals
Aarti Industries Reduce Reduce Maintained 406 381 411 7.7 1.1 147.1 9.3 12.1 17.2 8.4 13.1 17.9 -9.6% 7.9% 3.8%
Clean Science and Technology HOLD HOLD Maintained 1,280 1,471 1329 -9.6 3.8 136.0 23.5 30.2 33.7 24.3 31.1 35.0 3.3% 3.0% 3.8%
Deepak Nitrite Reduce HOLD Upgrade 1,948 2,295 1960 -14.6 0.6 265.8 52.9 66.9 71.7 46.9 60.7 70.0 -11.5% -9.2% -2.4%
Fine Organic Industries BUY BUY Maintained 3,700 5,765 5199 -9.8 40.5 113.4 150.1 168.0 181.4 138.9 159.0 170.5 -7.4% -5.4% -6.0%
Gujarat Fluorochemicals Reduce Reduce Maintained 3,725 3,724 3190 -14.3 (14.4) 409.2 48.1 52.4 62.2 46.4 55.2 63.8 -3.5% 5.2% 2.6%
Jubilant Ingrevia Reduce HOLD Upgrade 669 731 680 -7.0 1.6 105.7 15.4 17.5 18.1 15.7 17.7 18.4 1.9% 1.1% 1.5%
Laxmi Organic Industries Reduce HOLD Upgrade 187 213 237 11.3 26.4 51.7 4.8 6.6 7.5 4.6 6.1 7.1 -3.6% -6.9% -5.7%
Navin Fluorine International Accumulate Accumulate Maintained 3,911 3,672 4373 19.1 11.8 193.8 54.0 65.8 79.7 56.9 71.0 86.6 5.4% 7.9% 8.7%
NOCIL Reduce Reduce Maintained 189 226 209 -7.6 10.3 31.5 5.9 7.3 8.3 5.9 6.8 7.7 -0.3% -6.2% -6.7%
SRF Reduce HOLD Upgrade 2,759 2,018 2698 33.7 (2.2) 817.9 29.7 40.5 51.9 34.3 42.3 53.8 15.5% 4.3% 3.8%
Vinati Organics Accumulate Accumulate Maintained 1,535 1,925 1934 0.5 26.0 159.1 36.1 41.8 45.7 38.5 43.2 47.2 6.7% 3.4% 3.2%

Consumer Durables
Bajaj Electricals Reduce Reduce Maintained 647 676 647 -4.3 0.1 74.5 10.5 16.7 19.3 9.8 16.0 18.5 -6.8% -4.3% -4.3%
Crompton Greaves Consumer Electricals
BUY BUY Maintained 331 536 504 -6.0 52.3 212.8 9.1 11.4 13.3 8.5 10.5 12.6 -6.5% -7.6% -5.3%
Havells India Accumulate BUY Upgrade 1,523 2,036 1890 -7.2 24.1 954.4 24.9 31.7 37.6 22.2 28.4 35.2 -10.6% -10.2% -6.3%
KEI Industries BUY BUY Maintained 3,742 5,265 5041 -4.3 34.7 337.7 80.1 93.6 117.0 71.9 88.9 112.0 -10.2% -5.0% -4.3%
Polycab India BUY BUY Maintained 5,841 8,741 8233 -5.8 40.9 877.7 127.0 158.5 182.7 128.1 158.4 183.1 0.8% 0.0% 0.2%
R R Kabel BUY BUY Maintained 1,109 2,151 1812 -15.8 63.4 125.1 29.5 51.1 61.5 24.8 46.0 58.4 -15.8% -9.9% -4.9%
Voltas Accumulate BUY Upgrade 1,277 1,980 1593 -19.6 24.7 422.4 26.2 34.5 42.1 25.7 33.4 40.3 -2.1% -3.1% -4.3%

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 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Consumer Staples
Asian Paints Reduce Reduce Maintained 2,246 2,230 2123 -4.8 (5.5) 2,154.6 44.2 45.0 49.4 44.1 43.3 47.1 -0.4% -3.6% -4.6%
Avenue Supermarts Hold Hold Maintained 3,571 4,300 3964 -7.8 11.0 2,323.7 45.3 54.2 64.9 42.7 50.1 59.0 -5.7% -7.6% -9.1%
Britannia Industries BUY BUY Maintained 4,804 5,815 5881 1.1 22.4 1,157.4 85.0 99.0 116.3 89.9 101.6 117.6 5.7% 2.6% 1.1%
Restaurant Brands Asia Hold Hold Maintained 69 100 76 -23.7 10.3 34.2 -1.6 -0.5 0.2 -2.0 -1.1 -0.6 22.1% 104.6% #####
Colgate Palmolive Hold Hold Maintained 2,476 2,973 2801 -5.8 13.1 673.5 54.1 59.6 64.4 52.1 57.5 62.4 -3.7% -3.4% -3.0%
Dabur India HOLD HOLD Maintained 506 561 561 0.0 11.0 896.0 10.5 12.1 13.4 10.3 12.0 13.3 -2.0% -0.9% -0.8%
Emami Hold Accumulate Upgrade 551 761 716 -5.8 29.9 240.7 20.5 22.8 25.8 18.7 20.8 23.9 -8.9% -8.5% -7.3%
Hindustan Unilever Accumulate Accumulate Maintained 2,241 2,807 2691 -4.1 20.1 5,267.4 44.5 48.3 53.0 43.7 47.1 51.5 -1.9% -2.6% -2.8%
ITC Accumulate Accumulate Maintained 402 536 530 -1.1 31.8 5,017.6 16.3 18.4 20.1 16.2 17.8 19.4 -1.1% -3.2% -3.1%
Jubilant FoodWorks Hold Hold Maintained 675 719 672 -6.5 (0.4) 445.2 3.7 6.4 9.2 3.2 5.7 8.7 -12.1% -9.7% -5.9%
Kansai Nerolac Paints Reduce Hold Upgrade 235 274 278 1.7 18.2 190.3 8.2 9.6 10.3 8.5 9.5 10.3 3.5% -1.2% 0.3%
Marico Accumulate Accumulate Maintained 621 675 704 4.3 13.3 801.4 12.1 14.1 29.3 12.3 13.7 15.3 1.6% -3.4% -47.9%
Metro Brands Hold Hold Maintained 1,095 1,208 1177 -2.5 7.5 297.8 13.5 15.7 18.6 13.1 15.1 17.7 -2.4% -4.1% -4.5%
Mold-tek Packaging Accumulate Accumulate Maintained 503 709 621 -12.4 23.6 16.7 18.9 23.7 39.6 17.9 22.1 30.3 -5.3% -6.7% -23.6%
Nestle India Accumulate Accumulate Maintained 2,220 2,689 2606 -3.1 17.4 2,140.8 32.6 36.1 39.1 31.7 35.4 38.3 -2.8% -1.9% -2.0%
Pidilite Industries Accumulate Accumulate Maintained 2,762 3,355 3318 -1.1 20.1 1,403.8 44.1 49.8 54.1 41.8 49.2 53.5 -5.2% -1.2% -1.1%
Titan Company BUY BUY Maintained 3,173 3,882 3833 -1.2 20.8 2,824.0 41.3 54.1 64.0 42.3 53.4 62.0 2.4% -1.2% -3.2%
Westlife Foodworld HOLD HOLD Maintained 727 817 778 -4.9 6.9 113.4 1.4 4.6 6.6 0.7 4.7 6.3 -54.0% 2.3% -4.1%

Education
DOMS Industries BUY BUY Maintained 2,532 3,337 3370 1.0 33.1 153.6 34.0 44.1 55.6 34.7 45.8 56.2 2.1% 3.9% 1.0%
Navneet Education HOLD HOLD Maintained 133 139 150 7.7 12.4 30.2 7.8 9.3 10.8 8.1 9.6 11.0 3.3% 3.5% 2.2%
S Chand and Company BUY BUY Maintained 178 322 305 -5.4 71.6 6.3 19.7 25.8 27.5 20.4 25.0 27.5 3.6% -3.2% 0.1%

Electronic Manufacturing Services

Avalon Technologies HOLD BUY Upgrade 672 899 900 0.0 34.0 44.1 7.9 14.0 19.8 8.6 13.9 19.8 9.6% -0.7% 0.0%
Cyient DLM BUY BUY Maintained 418 831 692 -16.8 65.4 33.2 12.4 21.6 27.7 8.5 15.6 23.1 -31.2% -27.5% -16.8%
Kaynes Technology India HOLD BUY Upgrade 4,352 6,085 5528 -9.2 27.0 278.2 46.8 59.4 92.3 44.1 59.4 92.3 -5.9% 0.0% 0.0%
Syrma SGS Technology HOLD BUY Upgrade 427 629 629 -0.1 47.2 75.8 8.3 11.3 15.5 8.7 11.3 15.8 4.5% -0.2% 1.5%

February 24, 2025 53

 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
HealthCare
Apollo Hospitals Enterprise BUY BUY Maintained 6,251 8,000 8100 1.3 29.6 899.0 101.0 145.0 188.1 96.3 139.6 187.2 -4.7% -3.7% -0.5%
Aster DM Healthcare BUY BUY Maintained 405 620 620 0.0 53.2 202.3 6.7 10.6 13.5 6.3 10.6 13.5 -5.9% 0.1% 0.0%
Fortis Healthcare BUY BUY Maintained 599 710 760 7.0 27.0 451.9 10.1 12.7 15.8 11.1 13.2 16.4 10.2% 3.5% 4.3%
HealthCare Global Enterprises BUY BUY Maintained 510 535 535 0.0 4.9 71.1 4.8 9.2 14.7 4.8 9.2 14.7 0.0% 0.0% 0.0%
Jupiter Life Line Hospitals BUY BUY Maintained 1,458 1,660 1750 5.4 20.0 95.6 30.8 39.5 44.8 30.0 39.6 44.7 -2.4% 0.1% -0.2%
Krishna Institute of Medical Sciences
BUY BUY Maintained 524 675 725 7.4 38.3 209.7 9.5 10.8 14.3 9.2 10.8 14.8 -3.0% -0.7% 3.8%
Max Healthcare Institute BUY BUY Maintained 988 1,200 1300 8.3 31.6 960.2 15.2 20.5 26.8 15.5 20.5 26.9 2.5% -0.2% 0.2%
Narayana Hrudayalaya BUY BUY Maintained 1,393 1,420 1560 9.9 12.0 284.7 38.0 46.5 56.5 39.6 46.4 57.2 4.2% -0.2% 1.2%
Rainbow Children's Medicare BUY BUY Maintained 1,320 1,785 1785 0.0 35.2 134.0 24.7 31.0 39.0 24.3 30.8 38.8 -1.8% -0.5% -0.4%

Information Technology
Cyient BUY BUY Maintained 1,354 2,120 2010 -5.2 48.5 0.2 65.5 75.7 92.0 58.5 63.8 76.5 -10.6% -15.8% -16.8%
HCL Technologies Accumulate Accumulate Maintained 1,644 2,120 2080 -1.9 26.5 4.5 64.0 72.2 82.9 63.4 70.9 81.4 -0.9% -1.8% -1.7%
Infosys BUY BUY Maintained 1,764 2,270 2250 -0.9 27.5 7.3 63.6 72.0 82.9 63.6 71.7 82.2 0.0% -0.3% -0.8%
LTIMindtree BUY BUY Maintained 5,047 7,130 7000 -1.8 38.7 1.5 160.9 189.8 220.4 158.0 186.5 216.6 -1.8% -1.7% -1.7%
Mphasis HOLD Accumulate Upgrade 2,488 3,020 3200 6.0 28.6 0.5 89.9 106.1 123.7 90.6 105.6 123.5 0.8% -0.4% -0.2%
Persistent Systems HOLD HOLD Maintained 5,640 6,060 5970 -1.5 5.9 0.9 88.4 111.0 139.7 90.3 110.9 139.7 2.2% -0.1% 0.1%
Tata Consultancy Services BUY BUY Maintained 3,676 4,900 4810 -1.8 30.9 13.4 137.4 158.2 177.0 135.8 154.8 173.6 -1.2% -2.2% -1.9%
Tech Mahindra Accumulate Accumulate Maintained 1,614 1,790 1760 -1.7 9.1 1.4 48.1 63.0 81.3 46.6 62.5 80.1 -3.2% -0.8% -1.5%
Wipro Accumulate Accumulate Maintained 295 310 310 0.0 5.1 3.1 11.9 12.8 14.2 12.3 13.2 14.4 3.0% 3.0% 1.7%

Logistics
Delhivery HOLD HOLD Maintained 273 361 340 -5.9 24.6 201.1 2.4 4.7 8.0 1.6 4.7 7.7 -32.4% 0.0% -3.8%
Mahindra Logistics Under Review HOLD NA 277 NA 399 NA 43.8 20.0 4.3 12.5 21.8 1.8 11.3 19.9 -58.6% -9.0% -8.6%
TCI Express BUY BUY Maintained 691 1,027 1021 -0.6 47.7 26.5 27.4 36.7 48.0 24.4 35.1 42.5 -11.1% -4.2% -11.3%

Media
Nazara Technologies BUY BUY Maintained 918 1,201 1117 -7.0 21.6 70.3 17.6 20.8 23.4 11.7 17.2 21.0 -33.6% -17.4% -10.1%
PVR Inox BUY HOLD Downgrade 999 1,983 1215 -38.7 21.6 97.8 4.8 43.9 62.2 -10.8 17.7 37.2 NA -59.8% -40.1%
Zee Entertainment Enterprises HOLD HOLD Maintained 96 138 137 -0.7 42.2 92.5 8.1 11.3 13.8 8.5 11.3 13.6 4.6% -0.4% -1.0%

February 24, 2025 54

 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Metals & Mining
Hindalco Industries BUY BUY Maintained 642 682 696 2.2 8.5 1,425.0 62.9 64.6 71.4 69.1 69.0 75.5 9.7% 6.8% 5.7%
Jindal Stainless Accumulate Accumulate Maintained 616 739 715 -3.3 16.0 507.2 34.9 48.4 56.6 33.2 46.2 53.9 -4.6% -4.6% -4.9%
Jindal Steel & Power Accumulate Accumulate Maintained 862 997 847 -15.0 (1.7) 864.3 43.5 86.7 112.1 40.3 64.2 107.7 -7.5% -26.0% -3.9%
JSW Steel Hold Hold Maintained 967 872 919 5.4 (4.9) 2,337.0 16.6 55.0 73.1 18.3 56.6 72.7 10.0% 2.9% -0.6%
National Aluminium Co. Reduce Accumulate Upgrade 190 211 205 -2.7 8.4 348.1 22.8 22.7 26.9 26.4 22.4 24.1 15.4% -1.4% -10.2%
NMDC Accumulate Accumulate Maintained 66 80 70 -12.6 5.7 193.6 7.8 8.2 9.2 7.6 8.4 9.2 -2.3% 3.2% -0.5%
Steel Authority of India Reduce Hold Upgrade 108 110 107 -2.3 (0.9) 447.0 1.2 8.4 10.6 2.7 9.5 14.2 126.3% 13.3% 34.3%
Tata Steel Accumulate Accumulate Maintained 138 141 145 2.8 5.1 1,717.1 3.0 13.6 17.9 3.2 12.7 16.3 6.6% -6.6% -8.8%

Oil & Gas

Bharat Petroleum Corporation HOLD HOLD Maintained 251 301 286 -5.0 13.9 1,089.0 29.7 23.1 24.1 25.7 23.2 24.2 -13.4% 0.4% 0.5%
Gujarat Gas SELL SELL Maintained 407 362 395 9.1 (2.9) 279.9 16.2 17.5 18.7 15.8 18.7 19.7 -2.5% 6.8% 5.7%
GAIL (India) HOLD Accumulate Upgrade 165 203 204 0.3 23.8 1,082.1 13.8 13.9 14.2 12.7 14.8 15.2 -8.3% 6.4% 7.3%
Gujarat State Petronet HOLD HOLD Maintained 279 351 327 -6.7 17.5 157.0 15.3 15.5 16.4 15.4 15.8 16.6 1.0% 2.2% 0.9%
Hindustan Petroleum CorporationHOLD HOLD Maintained 319 391 373 -4.6 16.7 679.4 31.5 44.5 44.9 23.4 44.3 44.7 -25.8% -0.5% -0.4%
Indian Oil Corporation HOLD HOLD Maintained 120 152 124 -18.5 3.3 1,655.6 8.2 14.4 15.8 3.6 14.5 15.7 -55.8% 0.3% -0.5%
Indraprastha Gas SELL SELL Maintained 198 157 151 -4.3 (23.8) 276.7 9.2 11.2 11.9 9.0 10.2 11.0 -2.8% -8.8% -8.0%
Mahanagar Gas SELL Accumulate Upgrade 1,317 984 1412 43.5 7.2 130.1 98.9 106.0 112.6 103.4 114.5 128.4 4.6% 8.0% 14.0%
Mangalore Refinery & Petrochemicals
Accumulate HOLD Downgrade 114 168 137 -18.5 20.0 200.4 -2.2 13.1 13.1 -1.1 13.2 13.2 -52.0% 0.7% 0.8%
Oil & Natural Gas Corporation Accumulate BUY Upgrade 234 295 288 -2.7 22.7 3,007.6 39.2 44.5 45.2 39.2 44.0 44.7 0.0% -1.0% -1.2%
Oil India BUY BUY Maintained 379 691 711 2.9 87.8 616.2 41.3 58.3 63.5 39.0 56.8 63.2 -5.8% -2.7% -0.4%
Petronet LNG Sell Reduce Upgrade 305 268 276 3.2 (9.3) 457.0 22.0 26.8 27.5 23.8 26.9 27.6 8.0% 0.3% 0.4%
Reliance Industries Accumulate Accumulate Maintained 1,215 1,453 1472 1.3 21.2 16,435.3 43.5 49.2 55.1 43.5 49.2 55.1 0.0% 0.0% 0.0%

February 24, 2025 55

 India Strategy

Sector / Rating Current Rating Price Target Target Change Upside M/Cap EPS (Rs) - Pre Quarterly EPS (Rs) - Current % Change
Company Name Pre-Quarterly Rating Change (Rs) Pre Quarterly (Rs) % (%) (Rs bn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Pharma
Aurobindo Pharma Accumulate BUY Upgrade 1,102 1,475 1510 2.4 37.0 645.5 60.6 74.7 83.6 61.3 75.1 84.6 1.1% 0.5% 1.3%
Zydus Lifesciences Accumulate Accumulate Maintained 891 1,050 1050 0.0 17.8 896.6 45.4 47.2 41.7 46.6 46.2 41.2 2.7% -2.1% -1.3%
Cipla BUY BUY Maintained 1,477 1,730 1730 0.0 17.1 1,192.3 56.9 63.6 63.4 60.6 64.1 65.2 6.5% 0.8% 2.8%
Dr. Reddy's Laboratories Reduce Reduce Maintained 1,165 1,335 1335 0.0 14.6 971.2 67.2 74.2 53.4 65.1 69.4 54.0 -3.1% -6.4% 1.1%
Divi's Laboratories Accumulate Accumulate Maintained 5,703 6,000 6250 4.2 9.6 1,511.2 76.7 97.9 119.4 81.7 102.1 124.9 6.5% 4.3% 4.6%
Eris Lifesciences BUY BUY Maintained 1,259 1,420 1450 2.1 15.1 171.3 28.0 39.9 54.7 25.7 38.5 53.5 -8.4% -3.4% -2.2%
Indoco Remedies Accumulate Hold Downgrade 223 320 325 1.6 45.7 20.5 3.4 12.5 19.6 -6.0 3.2 15.0 NA -74.3% -23.5%
Ipca Laboratories Accumulate Accumulate Maintained 1,439 1,700 1700 0.0 18.2 365.0 33.2 43.6 53.5 33.6 43.8 54.9 1.3% 0.6% 2.7%
J.B. Chemicals & Pharmaceuticals BUY BUY Maintained 1,570 2,250 2075 -7.8 32.2 243.7 45.0 56.0 67.1 43.2 53.8 64.9 -4.0% -3.9% -3.3%
Lupin BUY BUY Maintained 1,903 2,420 2420 0.0 27.2 867.1 70.2 83.5 95.0 70.5 84.5 94.6 0.4% 1.2% -0.4%
Sun Pharmaceutical Industries BUY BUY Maintained 1,640 2,100 2275 8.3 38.8 3,933.7 45.5 54.6 65.1 49.0 54.8 65.0 7.6% 0.4% -0.2%
Torrent Pharmaceuticals Accumulate Accumulate Maintained 3,023 3,600 3750 4.2 24.0 1,021.9 59.2 77.6 95.9 58.4 77.2 95.6 -1.4% -0.5% -0.3%

Real Estate
Sunteck Realty BUY BUY Maintained 389 670 700 4.5 79.9 57.0 9.8 32.3 39.4 10.4 30.0 39.4 6.2% -7.0% 0.0%

Travel & Tourism

Chalet Hotels Accumulate BUY Upgrade 710 1,076 1064 -1.1 49.9 145.9 16.4 22.0 26.4 15.4 20.9 25.0 -5.9% -4.8% -5.4%
Imagicaaworld Entertainment BUY BUY Maintained 66 108 97 -10.2 47.4 31.8 1.5 1.7 2.2 1.3 1.6 2.0 -11.8% -7.0% -7.1%
InterGlobe Aviation Accumulate BUY Upgrade 4,536 4,919 5246 6.7 15.7 1,750.8 200.2 230.3 250.2 210.5 208.9 234.3 5.2% -9.3% -6.3%
Indian Railway Catering and Tourism
HOLDCorporation HOLD Maintained 720 835 809 -3.2 12.3 576.3 16.1 17.6 18.9 16.4 17.6 19.2 1.5% -0.2% 1.5%
Lemon Tree Hotels BUY BUY Maintained 128 179 175 -2.5 36.2 101.6 2.6 3.6 4.4 2.3 3.5 4.3 -13.8% -4.3% -1.8%
Safari Industries (India) BUY BUY Maintained 2,200 2,939 2783 -5.3 26.5 107.3 28.9 50.6 65.3 29.0 47.3 62.0 0.3% -6.6% -5.0%
V.I.P. Industries HOLD BUY Upgrade 326 483 463 -4.3 42.0 46.2 -3.7 13.3 16.1 -2.8 12.8 15.4 -24.1% -3.6% -4.3%

Telecom
Bharti Airtel Accumulate Accumulate Maintained 1,601 1,783 1827 2.5 14.1 9,094.4 32.7 47.8 56.5 31.9 48.8 57.6 -2.4% 2.1% 1.9%

Source: Company, PL

February 24, 2025 56

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3Q Sectoral
Snapshot

February 24, 2025 57

 India Strategy

AMCs
Conviction Picks: ▪ Coverage AMCs saw a good quarter; core PAT at Rs9.9bn was 5.2% above PLe
due to higher revenue and lower opex. QAAuM growth was broadly in-line,
HDFC Asset Management Company
while blended yields were a beat.
UTI Asset Management Company
▪ QAAuM growth for coverage AMCs was 3.5% QoQ with NAM/HDFCAMC
growing by +3.8%/+3.7% QoQ in-line with industry (3.6% QoQ).

▪ Equity + bal QAAuM for the industry grew by 3.1% QoQ to Rs37.8trn.
HDFCAMC/NAM/UTIAM grew by 2.2%/3.7%/(0.2)% QoQ.

▪ Revenue yield was a beat at 44.4bps (PLe 44bps) mainly led by HDFCAMC
led by rationalization of distributor commission.

▪ Opex was 4.4% lower than PLe due to lower staff cost & other opex. Core
income was higher at Rs13.0bn (PLe Rs12.6bn).

▪ Other income was ahead at Rs1.5bn (PLe Rs0.8bn) led by MTM gains.

▪ Tax rate for coverage AMCs was lower at 23.6% (PLe 25.0%); it normalized
QoQ for HDFCAMC to 23.6% from 32.8% (one-time DTL impact due to
withdrawal of indexation benefit last quarter).

▪ While we remain structurally positive on the AMC space, we turn slightly

cautious for the short term given the recent correction in equity markets.
HDFCAMC/NAM continue to maintain market share in net flows due to better
past performance and reach.

Q3FY25 Result Snapshot

Revenue Opex Core PAT AAuM
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3Y25 YoY gr. QoQ gr.
HDFCAMC IN 9,344 39.2% 5.3% 1,872 6.9% -6.0% 5,706 50.0% 23.4% 78,73,645 42.8% 3.7%
NAM IN 5,879 38.9% 2.9% 2,116 22.8% 2.7% 2,836 42.5% 4.8% 56,99,024 50.9% 3.8%
UTIAM IN 3,754 29.4% 0.6% 1,993 5.2% -2.5% 1,382 76.3% 4.6% 35,24,116 29.2% 2.5%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
HDFC Asset
We expect core PAT to grow at a CAGR of 15% over FY25-27E as net flows remain positive and equity performance has been
Management
best-in-class in 3-yr bucket leading to steady market share in net flows.
Company
UTI Asset
Performance in 1-yr bucket has been improving since Mar’24 and net flows have turned positive since Aug’24. Sustained
Management
performance could lead to higher market share over FY25-27E which may lead to core PAT upgrade.
Company
Source: PL

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 India Strategy

Automobiles
Conviction Picks: ▪ Q3FY25 volume growth for our coverage universe was 5.9% as compared to
the same period last year. The dispatches were lower owing to inventory
Maruti Suzuki
rationalization and lower than anticipated sales during the festive period.
Mahindra & Mahindra However, MSIL, TVSL, M&M and EIM reported healthy volume growth owing
to exports and strong demand in the domestic market.
Bajaj Auto

▪ Revenue for our coverage OEM universe increased by 8.6% YoY (excl JLR),
however, the revenue growth was marginally below PLe. Our coverage Auto
Ancs revenue witnessed marginal revenue growth of 1.8% YoY, lower than our
expectation impacted by slow order execution and sluggish demand.

▪ A large part of the raw material basket remained stable for OEMs which led to
a healthy gross margin expansion on a consolidated basis. Despite rise in staff
and other expenses, EBITDA increased by 16.8% YoY while margin contracted
by 94bps YoY (incl JLR) owing to lower than anticipated performance from
TTMT, excl. JLR business our OEM coverage universe margin expanded by
94bps YoY. Auto Ancs EBITDA declined by 3.9% YoY, impacted by higher
expenses and lower operating leverage.

▪ OEMs have indicated that the rural market has outpaced the growth of urban
market and expect the growth momentum to continue owing to marriage
season demand, positive cashflow momentum from Rabi crop harvest and
consumption boost provided by government by lowering income tax. These
factors shall lift the subdued momentum of sales with PV (UV) and 2W being
the large beneficiary. Above normal level monsoon and favorable reservoir
levels are expected to keep the demand momentum steady for Tractors’
volume. Improved fleet utilization and pick-up in infrastructure activities shall
aid in volume recovery for M&HCV from Q4FY25.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q2FY25 YoY gr. QoQ gr. Q2FY25 YoY gr. QoQ gr. Q2FY25 YoY gr. QoQ gr. Q2FY25 YoY gr. QoQ gr.
AL IN 94,787 2.2% 8.1% 12,114 8.8% 19.1% 9,938 9.9% 13.1% 7,617 31.2% 12.1%
BHFC IN 34,755 -10.1% -5.8% 6,244 -10.5% -3.5% 3,485 -11.4% -9.6% 2,128 -12.9% -12.7%
BJAUT IN 1,28,069 5.7% -2.4% 25,807 6.2% -2.7% 28,015 4.7% -4.2% 21,087 3.3% 5.2%
CEAT IN 32,999 11.4% -0.1% 3,409 -18.3% -5.9% 1,278 -43.9% -21.2% 971 -46.5% -20.3%
DIVGIITT IN 525 -16.7% -2.7% 86 -33.3% -24.1% 71 -43.9% -32.6% 52 -44.1% -33.2%
EIM IN 49,731 19.0% 16.7% 12,012 10.2% 10.4% 12,973 9.6% 3.9% 11,705 17.5% 6.4%
ENDU IN 28,592 11.6% -1.8% 3,725 24.6% -2.5% 2,466 22.9% -7.2% 1,844 21.1% -9.2%
EXID IN 38,486 0.2% -9.8% 4,486 2.0% -7.2% 3,253 1.4% -18.5% 2,450 2.0% -17.7%
HMCL IN 1,02,108 5.0% -2.4% 14,765 8.4% -2.6% 15,916 12.3% -0.5% 12,028 12.1% -0.1%
MM IN 3,05,382 20.3% 10.8% 43,843 33.1% 12.3% 39,679 25.2% -19.5% 29,643 19.1% -22.8%
MSIL IN 3,84,921 15.6% 3.5% 44,703 14.4% 1.2% 46,019 13.5% -9.8% 35,250 12.6% 14.9%
TTMT IN 11,35,750 2.7% 12.0% 1,30,320 -15.0% 11.7% 77,380 2.1% 37.7% 54,280 -22.8% 90.1%
TVSL IN 90,971 10.3% -1.4% 10,815 17.0% 0.2% 8,367 8.0% -6.7% 6,185 4.2% -6.7%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 59

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Conviction Picks Commentary

Name Commentary
We expect MSIL to report a volume growth of 4.2% over FY24-27E, with UVs offsetting a consistent decline in compact car
segment in the domestic market. Exports continue to be amongst the major growth drivers with mix of UVs improving on a
Maruti Suzuki
consistent basis. Its presence in Hybrid, Petrol, CNG and EVs makes it an overall player in the industry. We expect it to deliver an
EPS growth of 13% over FY24-27E.
M&M is well-positioned to outpace industry growth in UVs, with strong demand driving a ~10% CAGR in automotive volumes
Mahindra &
over FY24-27E. The tractor segment is expected to grow at ~7% CAGR, supported by favorable monsoons, higher MSP, and
Mahindra
international expansion.
The consumption boost in the form of tax relief shall benefit BJAUT as it has a presence across different price points in the 2W
category. Additionally, the recovery in key international markets and further expansion shall lead to healthy overall volume growth
Bajaj Auto
of 7.4% over FY24-27E. Better mix and PLI benefits shall improve its overall profitability leading to an EPS CAGR of 14.7% over
FY24-27E.
Source: PL

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Banks
Conviction Picks: ▪ Coverage banks saw a soft quarter; core PAT at Rs579.4bn was 4.6% higher
than PLe, however, core PPoP was 2.3% lower at Rs884bn. While private banks
ICICI Bank
were slightly better operationally, PSU banks saw superior asset quality.
Kotak Mahindra Bank
▪ Loan growth was-in-line at 2.6% QoQ and 10.6% YoY, tad lower than the
system (11.1%). Private banks saw slightly weaker loan growth at 7.8% YoY (PLe
8.2%) due to AXSB, FB and ICICIB; KMB beat PLe by 65bps. Growth for PSU
banks was higher at 13.5% YoY (PLe 12.9%) mainly led by SBI.

▪ System deposits grew by 9.9% YoY and deposit accretion for covered banks
was lower at 1.9% QoQ and 11.9% YoY. CASA ratio fell QoQ to 36.8% from
37.6%. LDR for Q3FY25 increased by 56bps QoQ to 85.0% and all banks
reported a higher than estimated LDR except HDFCB and BOB.

▪ NIM for coverage banks fell by 7bps QoQ to 3.44% (7bps lower to PLe) largely
led by SBI, BOB and AXSB. Drivers for NIM decline QoQ within large banks
were (1) fall in CASA resulting in funding cost and (2) lower loan yields due to
slower offtake in unsecured. KMB and HDFCB were outliers on NIM.

▪ Other income was a beat at Rs 456bn due to higher treasury/TWO recovery;

fees was 2.3% lower at Rs360bn offset by tad lesser opex at Rs844bn. SBI
dragged opex due to higher staff cost (change in interest rate assumptions).
KMB, ICICB, HDFCB, CUB and DCB were positive outliers on core PPoP.

▪ Asset quality was steady QoQ with GNPA at 1.91% due to controlled slippages
at 1.24% (PLe 1.31%) while provisions were a beat at 43bps (PLe 62bps) and
reduced by 18bps QoQ mainly led by PSU banks. Barring AXSB, FB and DCB,
all banks saw lower credit costs. KMB and CUB reported higher provisions due
to increase in PCR which was a positive.

Q3FY25 Result Snapshot

NII Operating Profit Adj. PAT
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
AXSB IN 1,36,059 8.6% 0.9% 1,05,339 15.2% -1.7% 63,038 3.8% -8.9%
BOB IN 1,14,169 2.8% -1.8% 76,642 9.3% -19.1% 48,373 5.6% -7.6%
CUBK IN 5,877 13.9% 0.9% 4,360 19.8% 1.8% 2,860 13.0% 0.3%
DCBB IN 5,429 14.5% 6.6% 2,711 28.2% 6.3% 1,514 19.6% -2.6%
FB IN 24,313 14.5% 2.7% 15,695 9.2% 0.3% 9,554 -5.1% -9.6%
HDFCB IN 3,06,533 7.7% 1.8% 2,50,004 5.7% 1.2% 1,67,355 2.2% -0.5%
ICICIBC IN 2,03,706 9.1% 1.6% 1,68,866 14.7% 1.0% 1,17,924 14.8% 0.4%
IIB IN 52,281 -1.3% -2.2% 35,989 -10.1% 0.2% 14,013 -39.0% 5.7%
KMB IN 71,963 9.8% 2.5% 51,810 13.5% 1.6% 33,048 10.0% -1.2%
SBIN IN 4,14,455 4.1% -0.4% 2,35,508 15.8% -19.6% 1,68,914 17.0% -7.9%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
Core PPoP could see an upgrade due to better NIM and opex; it is well poised to sustainably deliver core RoA of 2.1%
ICICI Bank
over FY25-27E.
Kotak Mahindra Bank Lifting of RBI embargo could lead to better loan growth and NIM which could drive upgrade in core PPoP.
Source: PL

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 India Strategy

Building Materials
Conviction Picks: ▪ Revenue grew by 3.5% YoY, EBITDA margin contracted by 220bps YoY: In
Q3FY25, aggregate revenue grew by 3.5% (PLe: +5.3%), whereas EBITDA/PAT
Supreme Industries
declined by 12.7%/17.6% YoY in our coverage universe (PLe: -2.2%/-4.4%). All
segments faced challenges due to weak demand and volatility in raw material
prices, except plywood. Plastic pipe companies’ volume grew by 3.5% YoY,
CPBI plywood /MDF volume grew by 15.6%/63.2%, Greenpanel volume
declined by 1.9% YoY, and Kajaria tiles volume increased 6.7% YoY (PLe: 5.2%).
EBITDA margin of our coverage universe contracted by ~220bps to 12.1% on
account of higher timber prices in the woodpanel segment, volatility in PVC
resin prices in the plastic pipe segment, and increase in brass prices in the
faucetware segment.

▪ Plastic pipes reported poor volume: Our plastic pipes universe sales volume
grew 3.5% YoY (PLe: 5.5% YoY) on account of low demand and delay in ADD
on PVC resin, which resulted de-stocking in the channels. Pipe companies
have revised their volume growth guidance for FY25: Astral, SI and Finolex
have adjusted their growth forecasts from 10-15%, 16-18%, and 10-12%,
respectively, to >10%, 15-16%, and single digits for FY25. Meanwhile, Astral
has maintained its volume growth guidance for the P&F business at 10-15%
for FY26. Plastic pipe companies’ revenue grew by 1.4% YoY led by poor
volume growth. EBITDA margins contracted by ~210bps YoY to 12.5% (PLe:
13.4%) because of inventory loss and volatility in PVC resin prices. Finolex Ind
outperformed the sector with healthy volume growth of 5.5% YoY.

▪ Tiles & bathware – soft performance: Cera Sanitaryware (CRS) revenue

increased by 3.1% YoY due to subdued demand. EBITDA/PAT stood at +0.2%/-
10.0%, due to increase in brass prices and higher discounts offered. KJC
reported volume growth of 6.7% due to continued slowdown in demand. The
tiles & bathware segment is anticipated to see a gradual increase in volume in
FY26 with a revival in demand, driven by the anticipated rate cut by the RBI
and expected increase in disposable income due to the restructured personal
income tax regime in Union Budget 2025-2026. Additionally, the company
plans to intensify its focus on the projects business and expand its product
portfolio.

▪ Woodpanel – margin pressure continues: CPBI outperformed the segment

with better performance in plywood (revenue/volume up +20.2%/15.6% YoY)
and MDF (revenue/volume up +46.0%/63.2% YoY). EBITDA margin contracted
by ~10bps to 11.4%YoY (PLe: 12.0%) due to increase timber cost and flat
realization. Greenpanel delivered weak performance (revenue/PAT down
6.8%/69.3% YoY), due to rising domestic competition, correction in MDF
realization and higher timber prices. Further, exports were impacted as the
company operated on an FOB basis and halted shipments to customers
unwilling to absorb the significant rise in timber prices.

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Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
ASTRA IN 13,970 2.0% 1.9% 2,195 7.0% 4.5% 1,543 0.3% 3.7% 1,126 -0.6% 3.6%
CPBI IN 11,405 21.7% -3.6% 1,295 22.1% 16.3% 799 -5.0% 37.7% 588 -6.1% 47.1%
CRS IN 4,523 3.1% -8.2% 615 0.2% -14.6% 610 -7.9% -20.3% 464 -10.0% -32.4%
FNXP IN 10,012 -1.8% 20.9% 834 -30.4% 689.3% 945 -21.1% 57.7% 940 -1.4% 131.2%
GREENP IN 3,594 -6.8% 6.7% 173 -71.1% -41.9% 52 -85.9% -61.1% 85 -69.3% -54.0%
KJC IN 11,637 1.0% -1.3% 1,487 -16.8% -6.4% 1,107 -24.2% -10.3% 787 -24.6% -9.7%
SI IN 25,099 2.5% 10.4% 3,088 -18.5% -3.3% 2,235 -29.5% -7.6% 1,870 -27.0% -9.5%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
SI revised the guidance of 16-18% volume growth in plastic pipe system to 15-16% for FY25 due to low spending on infrastructure
by governments and extended winter rainfall. We estimate volume CAGR of 14.6% in the pipe segment over FY24-27E due to
Supreme
extension of Jal Jeevan Mission till FY28. Piping segment, capacity is expected to reach 900,000MTPA by FY25 from current
Industries
820,000MTPA. Additionally, SI is planning 3 greenfield expansions in Jammu, Bihar and Madhya Pradesh. SI expects revenue CAGR
of 12.8% over FY24-27E, with a margin of 15%.
Source: PL

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 India Strategy

Capital Goods
Conviction Picks: ▪ Overall mixed quarterly performance in our coverage universe with revenue
growth of 16.6% YoY to Rs1.2trn (15.9% YoY ex. L&T) and EBITDA/Adj. PAT
Kirloskar Pneumatic growth of 15.6%/18.2% YoY to Rs140.0bn/Rs91.3bn. While Industrial and
Bharat Electronics electrical equipment companies delivered decent performance, industrial
consumables & EPC faced the headwinds. While Order inflow grew 36.7% YoY
ABB India
to ~Rs1.7bn largely driven by electronics, data center, power T&D, renewable
Voltamp Transformers energy and O&G.

▪ Product/consumables companies reported decent cumulative revenue

growth (+12.2% YoY) led by robust domestic demand. Exports were largely
impacted by Chinese dumping and geopolitical uncertainties. Global tariff
wars further fuel the uncertainty around exports. EBITDA margin was largely
flat due to the unfavorable product mix which was offset by operating
leverage improvement in most companies. Order inflows were driven by
sectors like data centers, T&D and O&G.

▪ Project companies reported healthy cumulative revenue growth of 17.8% YoY

(18.8% YoY ex. L&T) aided by healthy execution in Power T&D and
infrastructure segments while PSUs lagged in execution pick up. L&T’s adj.
revenue growth of 17.3% YoY was largely driven by better execution in
international business. EBITDA margins for project companies largely
improved during the quarter owing to the benefits of operating leverage and
better revenue mix. Meanwhile, project companies continued to face
headwinds from labor shortages, delays and deferment in water projects.

▪ Order enquiries/tendering pipeline continue to remain healthy across areas

such as renewable energy, data centers, rail & metro, oil & gas, electronics,
metals & mining, commercial and residential infrastructure in the domestic
market as well as in Middle East, Latin America and Southeast Asia.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
ABB IN 33,649 22.0% 15.5% 6,573 57.6% 21.7% 7,051 55.4% 18.1% 5,319 54.1% 20.8%
APR IN 47,164 17.7% 1.5% 3,561 -12.1% -0.1% 2,386 -16.1% -7.1% 1,751 -19.5% -9.7%
BHE IN 57,561 39.1% 25.6% 16,533 57.5% 19.1% 17,542 49.6% 20.9% 13,161 47.3% 20.6%
BEML IN 8,758 -16.4% 1.9% 604 8.0% -17.3% 296 -55.8% -46.0% 244 -49.4% -54.7%
BHEL IN 72,771 32.2% 10.5% 3,042 40.5% 10.6% 1,688 139.5% 28.0% 1,248 169.4% 29.1%
CU IN 12,555 9.0% 2.6% 1,770 -8.0% -9.2% 1,369 -10.6% -9.1% 1,389 24.8% 19.9%
ENGR IN 7,646 -11.9% 11.0% 979 95.5% 56.9% 1,258 76.1% 27.0% 1,087 71.6% 9.1%
GVTD IN 10,737 28.0% -3.1% 1,797 86.1% -12.2% 1,899 160.3% -2.0% 1,427 189.1% -1.3%
GWN IN 7,026 6.5% 1.3% 1,234 -3.4% -4.5% 1,158 -5.2% -9.2% 868 -6.1% -9.7%
HARSHA IN 3,389 4.5% -3.9% 428 7.6% 2.2% 373 -1.8% -8.9% 267 -10.1% -7.8%
HNAL IN 69,573 14.8% 16.4% 16,825 17.2% 2.6% 20,368 21.0% 1.6% 14,398 14.1% -4.4%
KECI IN 53,494 6.8% 4.6% 3,745 21.6% 16.9% 1,598 32.4% 40.9% 1,296 33.7% 51.7%
KKC IN 30,860 21.8% 23.8% 6,000 11.5% 24.7% 6,702 11.1% 12.7% 5,140 12.7% 14.1%
KPIL IN 48,257 16.4% 16.7% 4,019 16.8% 15.3% 2,177 12.2% 18.6% 1,574 9.3% 18.9%
LT IN 6,46,678 17.3% 5.1% 62,549 8.6% -1.7% 53,330 11.8% -4.0% 33,588 14.0% -1.1%
PRJ IN 8,530 2.9% 4.5% 586 -39.3% -37.8% 588 -36.0% -21.0% 411 -41.6% -23.6%
SIEM IN 35,872 -3.3% -19.5% 4,009 -11.5% -26.4% 5,009 -4.8% -20.7% 3,718 -5.2% -21.0%
TMX IN 25,078 7.9% -1.5% 1,890 0.8% -10.8% 1,568 -14.5% -21.7% 1,159 -19.3% -22.1%
TRIV IN 5,034 16.6% 0.5% 1,093 30.6% -1.9% 1,245 31.2% 0.3% 924 35.5% 1.7%
VAMP IN 4,835 18.4% 21.6% 990 21.0% 32.1% 1,022 -1.2% -1.3% 734 2.4% -3.1%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 64

 India Strategy

Conviction Picks Commentary

Name Commentary
We believe KKPC is well placed for healthy long-term growth driven by 1) products launches in air compression
(Tezcatlipoca, ARiA) to capture centrifugal and low-end screw compressor markets that are import-dominated, 2)
market leadership in up/mid/downstream oil & gas and CNG mother stations, where the investment pipelines are
Kirloskar Pneumatic robust, 3) new products – Calana and Jarilo – to address opportunities in CNG daughter stations and CBG plants
respectively, 4) launch of Khione and acquisition of S&C India to enhance penetration in commercial and industrial
refrigeration, 5) focus on building in house IP and backward integration capabilities, and 6) strong cash flows and
balance sheet.
We remain positive on long-term growth story of BEL given 1) strong order backlog & strong multi-year order pipeline
Bharat Electronics 2) diversification in newer business verticals like Kavach, fiber optics, anti-drone tech, data centers etc., to aid non-
defence growth and 3) govt’s focus on product indigenization.
We remain positive on ABB given 1) increasing traction for energy efficient and premium quality products, 2) resilient
ABB India business model, 3) focus on high-growth areas such as data centers, rail & metro, renewables and electronics, and 4)
strong domestic order pipeline.
We remain positive on VAMP considering its 1) strong market position in industrial transformers, 2) healthy demand
momentum, 3) debt-free balance sheet, 4) consistent free cash flow generation, and 5) growing high-margin services
Voltamp Transformers
business 6) Capacity expansion of additional 6,000 MVA to drive additional opportunities and larger addressable
market in the near future
Source: PL

Strong domestic demand led to cumulative order inflow growth of 6.7% YoY to Rs1.5trn
Order Inflow (Rs mn) Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q3FY25 YoY gr. QoQ gr.
ABB India 31,470 36,070 34,350 33,420 26,950 -14.4% -19.4%
Apar Industries 18,960 30,180 17,940 22,340 30,770 62.3% 37.7%
BEML 5,280 11,260 6,130 4,440 45,470 761.2% 924.1%
Bharat Electronics 116,091 80,341 48,761 23,153 21,483 -81.5% -7.2%
BHEL 25,690 418,590 94,880 315,990 68,600 167.0% -78.3%
Engineers India 6,371 3,597 23,791 27,577 18,784 194.8% -31.9%
GE Vernova T&D 23,681 13,349 10,290 46,824 20,758 -12.3% -55.7%
KEC International 38,500 52,520 76,640 58,180 85,180 121.2% 46.4%
Kalpataru Projects 74,490 119,570 31,820 86,830 83,160 11.6% -4.2%
Kirloskar Pneumatic 3,900 5,200 4,210 6,120 4,670 19.7% -23.7%
L&T 759,900 721,500 709,360 800,450 1,160,360 52.7% 45.0%
Praj Industries 10,370 9,240 8,880 9,210 10,530 1.5% 14.3%
Siemens 59,710 51,840 62,450 61,640 42,580 -28.7% -30.9%
Thermax 25,060 23,090 25,690 33,530 22,960 -8.4% -31.5%
Triveni Turbine 5,313 4,351 6,363 5,719 5,264 -0.9% -8.0%
Voltamp 4,890 4,740 6,390 3,697 6,483 32.6% 75.3%
Total 1,209,676 1,585,438 1,167,945 1,539,120 1,654,001 36.7% 7.5%
Source: Company, PL

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Cement
Conviction Picks: ▪ Earnings of cement companies under coverage were below our estimates due
to weak pricing across regions. On QoQ basis, EBITDA/t improved by just
Ambuja Cement
Rs85 in Q3FY25 as average NSR declined 0.3%. Volumes grew 11% YoY/QoQ
ACC during the seasonally strong quarter, driven by aggressive selling strategies
adopted by ACC and ACEM in certain regions. However, factors such as GRAP
Ultratech Cement
3 restrictions in Delhi, monsoon in the southern regions, subdued construction
activity, and assembly elections in Maharashtra, Jharkhand and Haryana
hindered further volume growth.

▪ Recent channel checks indicate a gradual uptick in demand post-festivities,

which led to some price hike across regions. Likely acceleration in government
projects till next monsoon would drive volumes and keep pricing stable.

▪ Average realization declined by 0.3% as cement prices remained under

pressure. Price hikes undertaken during the quarter could not be sustained due
to tepid demand amidst festivities and lower-than-expected government
infrastructure spending. Nuvoco was the most affected, as prices fluctuated
the most in the eastern region. ACC’s and ACEM’s realizations were impacted
by their aggressive selling strategies, prioritizing volume over value.

▪ Power and fuel costs softened further by 6% QoQ (majorly swayed by SRCM’s
lower P&F costs), driven by increased green energy share, soft pet coke prices
and increased operational efficiencies.

▪ Freight costs/t for coverage companies declined by an average of 3% QoQ,

due to reduced lead distance, improved plant network, and flat diesel prices.
Only DALBHARA saw 2% QoQ increase due to servicing of central markets
from eastern plants.

▪ EBITDA/t increased 13% QoQ to Rs723 for the universe due to strong
operating leverage and lower operating costs. Average EBITDA/t improved by
Rs85 QoQ. EBITDA for the coverage universe grew 28% QoQ to Rs58.6bn.

▪ Capex plans of the industry players remain on track with leaders adopting
aggressive strategies to gain market share. However, brownfield expansion
was subdued during the quarter with just 1.2mtpa added by UTCEM.

▪ With sector headwinds behind and GRAP 3 restrictions revoked in Delhi, labor
availability is no longer a concern. However, higher supplies and stiff
competition remain a challenge. While demand recovery may support slight
price improvements, intense competition will likely limit gains. Government
capex acceleration should keep pricing stable, with some fluctuations in the
East and South.

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▪ We maintain a positive outlook on industry leaders (UTCEM and ACEM) taking

into consideration their proactive capacity expansion plans and focus on cost
optimization. ACEM’s EBITDA/t was impacted by weak utilization and higher
operating costs at acquired plants, which is expected to improve gradually as
per the management. Companies within the universe have reiterated their
confidence in cost optimization and efficiency improvements, supported by
the increasing share of green power in their energy mix and improving plant
network.

▪ Share of RE in DALBHARA and SRCM is expected to reach 40-45% by the end

of FY25 and 60% by Q1FY26, respectively.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
ACC IN 52,905 7.7% 14.7% 4,789 -47.1% 9.7% 3,090 -57.2% -3.3% 2,294 -57.3% 2.2%
ACEM IN 48,537 9.3% 19.1% 4,111 -51.7% -24.2% 8,945 31.5% 67.0% 14,507 182.4% 264.4%
DALBHARA IN 31,810 -11.7% 3.0% 5,110 -34.4% 17.7% 830 -77.0% 13.7% 610 -76.8% 32.6%
NUVOCO IN 24,094 -0.5% 6.2% 2,583 -37.1% 18.1% -847 -249.1% -28.0% -614 -297.8% -27.9%
SRCM IN 42,355 -13.6% 13.6% 9,466 -23.3% 59.8% 2,590 -73.2% 478.6% 2,294 -68.8% 146.3%
UTCEM IN 1,63,284 1.2% 9.5% 27,783 -11.8% 43.8% 17,859 -22.3% 81.9% 14,344 -16.5% 80.0%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
In the past 2 years, ACEM has grown its capacity by 15%+ CAGR to 97mtpa through inorganic expansions. Ongoing projects will
add 33mtpa by FY27E, targeting 140mtpa by FY28E, with a focus on maximizing throughput for above-industry volume growth.
Ambuja
Cement ACEM targets cost savings of ~Rs500/t by FY28E through initiatives like 1) increasing green power mix, 2) utilizing captive coal
mines, 3) securing long-term raw material supplies, and 4) enhancing logistics with more railway wagons and an expanded plant
network.
With Adani Group’s execution capabilities, we expect faster capacity additions, higher capex on efficiency improvements, and
margin-accretive projects at ACC, leading to a gradual improvement in operating performance over the next 2 years.
ACC
WHRS projects at various clinker units and 100MW solar capacity addition will drive cost reductions over the next 2 years, while
upgradation of older plants could deliver significant EBITDA improvement.
UTCEM’s power & fuel cost is expected to decline over the next few quarters as high-cost contracts are coming to an end. RE
power share is expected to improve to >50% by FY27E and well-connected plants to further enhance cost efficiency.
UltraTech
Cement With ongoing organic expansion, UTCEM’s capacity would cross ~210mtpa by FY27E (~185mtpa by end-FY25, including India
Cement & Kesoram deals). We expect UTCEM to grow faster than the industry as demand improves. Cost efficiencies are expected
to improve for UTCEM over the next few years led by increase in green power mix, AFR %, blending ratio, and higher volumes
driving operating leverage (targeting Rs300/t savings).
Source: PL

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Chemicals
Conviction Picks: ▪ YoY performance improved, while sequential performance remained flat:
Chemical companies under our coverage showed a YoY growth due to lower
Fine Organic Industries
base in FY24, while most of the companies under our coverage showed a
Navin Fluorine International sequential decline or modest improvement in performance. Low price
inventory is no longer an issue for most of the companies. Except for
Vinati Organics
refrigerants and pyridines realizations have majorly remained stable or have
decreased sequentially. Prices are still much lower than the historical higher
realization. Pricing pressure is expected to continue, as low-price dumping
from China remains a major concern for many companies. For Q3FY25, the
chemical companies under our coverage reported an aggregate sale of
Rs124bn, reflecting a 1% increase in QoQ but a 9% increase YoY. The
aggregate EBITDA stood at Rs20bn, flat QoQ but increased by 6% YoY. The
aggregate EBITDAM came in at 18.8%, marking an decrease of 30bps YoY,
while remaining flat QoQ. Among the companies, NOCIL reported the lowest
EBITDAM at 7.6%, while Clean Science recorded the highest margins at 40.9%.

▪ YoY volume growth visible: Management across most companies indicated

that despite ongoing pricing pressures, they have seen an improvement in
volumes and expect growth momentum to continue in Q4FY25. However, a
few companies like NOCIL and Deepak Nitrate witnessed decline in sequential
volumes. Agrochemical-focused companies remain uncertain about demand
revival and anticipate poor sector performance at least until the end of FY25.
Many companies expect sequential improvement in the performance in
Q4FY25.

▪ Favorable refrigerant price environment to boost earnings: Key refrigerants

such as R-22 and R-32 have witnessed more than 50-60% price increase
compared to FY24, with prices expected to remain elevated in the near term.
Companies with significant exposure to refrigerants, including SRF, Navin
Fluorine, and Gujarat Fluorochemicals, are well-positioned to benefit from this
price surge. The sustained high pricing is likely to drive higher margins and
improve earnings for these companies’ refrigerants segment.

▪ Competition from China to continue: Companies like NOCIL, Laxmi Organics,

SRF, Aarti Industries, Deepak Nitrate and Jubilant Ingrevia continue to face
threat from Chinese competition, impacting both prices & volumes.

▪ CAPEX Updates:

▪ Jubilant Ingrevia has initiated capex to upgrade Agrochem facility, this plant
will cater to the USD300mn multiyear CDMO agreement with the global agro
chem giants, the company is also expected to announce another leg of capex
soon. Deepak Nitrate has multiple projects ongoing with Nitric acid plant to
be commercialized in this quarter. Fine Organic has applied for EC for the
Rs7.5bn capex at SEZ land. Vinati Organics ATBS expansion is anticipated by
the end of this quarter or early Q1FY26.

▪ Clean Science Rs1.5bn investment in performance chemical 1 remains on

track, with commercialization expected in July’25. Additionally, construction
for a second performance chemical plant focused on water treatment started
this month and is scheduled to be operational by Jan’26.

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▪ Navin Fluorine new R-32 plant is expected to be commissioned this month,

other projects like AHF project is on track to commission in early FY26, while
phase 1 of cGMP4 is expected to commission by Q3FY26. Gujarat
Fluorochemicals has guided cumulative capex for battery chemical segment
is expected to be Rs50bn by FY27 and Rs60bn by FY28. Laxmi Organics
previously announced Rs914mn capex to set up 70ktpa n-butyl acetate and
Rs905mn capex to expand ethyl acetate capacity by 70ktpa plant to be
operational in Q4FY26 which are on track. SRF has previously announced
Rs11bn capex to establish next-generation refrigerants and Rs4.45bn capex to
establish a hybrid BOPP-BOPE film line in India.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
ARTO IN 18,400 6.2% 13.0% 2,320 -10.8% 18.4% 410 -65.0% 32.3% 470 -62.1% -7.8%
CLEAN IN 2,408 23.7% 1.1% 985 13.7% 9.8% 853 2.8% 2.5% 656 4.8% 11.7%
DN IN 19,034 -5.3% -6.3% 1,685 -44.7% -43.4% 1,352 -50.6% -48.8% 981 -51.4% -49.5%
FINEORG IN 5,132 5.1% -13.9% 990 -16.3% -34.3% 1,146 -4.8% -28.2% 827 -13.1% -29.9%
FLUOROCH IN 11,480 15.8% -3.4% 2,940 42.6% -0.3% 1,750 58.7% 1.7% 1,260 57.3% 4.1%
JUBLINGR IN 10,568 9.4% 1.1% 1,383 44.7% 11.0% 956 73.6% 18.9% 694 80.0% 17.6%
LXCHEM IN 7,863 13.4% 2.0% 748 45.0% 0.1% 471 59.2% 1.7% 293 7.8% 4.2%
NFIL IN 6,062 20.8% 16.9% 1,473 94.7% 37.2% 1,080 139.9% 40.7% 836 7.2% 42.1%
NOCIL IN 3,181 -6.6% -12.3% 240 -50.8% -36.4% 191 -53.1% -41.0% 129 -57.0% -69.4%
SRF IN 34,913 14.4% 2.0% 6,196 9.5% 15.2% 3,687 5.9% 30.0% 2,711 7.0% 34.6%
VO IN 5,217 16.4% -5.7% 1,428 24.5% 6.5% 1,289 24.9% -5.0% 956 24.1% -10.0%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
Fine Organics witnessed a decrease in its margins due to a sharp increase in vegetable prices which are its key raw material. There
was a slight drop in export demand while domestic demand remained steady. We expect growth in export volumes going ahead
as global demand for the company’s product portfolio remains robust. The company is also undertaking Rs7.5bn green field capex
Fine Organic
at SEZ land allotted to the company at Jawaharlal Nehru Port Authority. This facility will manufacture products similar to the
Industries
company’s current portfolio and is expected to start commercial production by FY27. We believe the new facility will be a key
driver of future growth for the company and is expected to have a peak revenue of Rs26bn at 3.5x asset turnover and will start
contributing to the topline majorly from FY28.
Vinati Organics witnessed expansion in its margins as revenue contribution from its key high margin product ATBS increased to
39%. ATBS demand continues to remain robust with the company also expanding its capacity from 40,000mtpa to 60,000mtpa
Vinati
by the end of FY25, in line with demand. The management has maintained 20% revenue growth guidance for FY25. Antioxidants
Organics
revenue, projected to double in FY25 from Rs1.3bn in FY24, reached Rs1.6bn in 9MFY25. MEHQ and guaiacol, launched in Mar’24,
are expected to make a meaningful revenue contribution from FY26, with a peak potential of Rs4bn.
Navin Fluorine guided for a strong H2FY25 performance, this was visible in its stellar Q3FY25 by driven by higher volumes for HFO
and R32 and improved price realization across products. Navin’s expansion of R-32 capacity, in line with demand is on track and is
Navin Fluorine
expected to be commissioned this month, while AHF capex shall be commissioned by early FY26. Specialty segment has started
International
gaining traction with strong order book visibility for this segment Q4FY25 and beyond.in FY26. CDMO vertical revenue is targeted
to reach USD100mn in FY27, with order received from EU major and a scale order received from US major.
Source: PL

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 India Strategy

Consumer
Conviction Picks: ▪ Consumption across FMCG, QSR and retail remained tepid despite the festive
season. Rural demand continues to improve while urban demand remains
Titan Company
under pressure on account of food inflation and late onset of winter. However
Britannia Industries recent relief in income tax coupled with declining food inflation could boost
consumer sentiment in the near term. Aggregate sales grew 5.4% YoY
whereas EBIDTA and PBT de-grew by 2.9% & 4.1% YoY.

▪ FMCG universe earnings missed estimates due to the dual impact of demand
slowdown across urban & metro cities and escalating input cost inflation.
Muted demand conditions coupled with margin pressures impacted overall 3Q
performance. Rural demand continued to improve steadily & outpaced urban
growth. BRIT, Emami outperformed.

▪ Paint companies reported muted quarter with tepid volumes and margin
pressure. APNT reported a decline in volumes by 1.6% while most others
reported 2-7% volume growth. Industrial Paints continue to support demand
with growth across automotive & general Industrial paints. Birla Opus’s gained
200bps market share in 3Q and it is yet to play out fully as we expect
competitive intensity to remain elevated.

▪ QSR – Consumer demand remains subdued; however, some positive signs are
emerging, driven by an improving geopolitical environment and a reduction in
food inflation. Overall, companies reported mixed results, with WFL/BK
experiencing modest growth, while JFL saw decent growth with 12.5% LFL
growth. We believe the recent tax relief announced in the Union Budget is
expected to boost consumer sentiment in the near term.

▪ Retail companies reported muted earnings growth amid persistent tepid

demand environment across Apparel and footwear. However, Jewellery saw
encouraging demand amid festive/marriage season, although recent run up in
gold prices (~9% MoM) remain key headwind for the demand in near term

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Q3FY25 Result Snapshot

Vol. Gr.
Sales EBITDA PBT Adj. Pat
(Rs mn) (%)
Q3FY25 Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
APNT IN 1.6 85,494 -6.1% 6.5% 16,367 -20.4% 32.0% 14,683 -23.5% 32.5% 11,093 -23.3% 21.7%
BRIT IN 6.0 45,926 7.9% -1.6% 8,449 2.9% 7.9% 7,804 2.4% 8.6% 5,823 4.3% 9.5%
CLGT IN 5.0 14,618 4.7% -9.7% 4,544 -3.0% -8.6% 4,325 -2.5% -8.7% 3,228 -2.2% -8.6%
DABUR IN 1.2 33,553 3.1% 10.8% 6,819 2.1% 23.4% 6,571 -0.7% 20.4% 5,158 1.9% 23.5%
DMART IN 1,59,726 17.7% 10.6% 12,172 8.7% 11.3% 9,950 4.9% 10.2% 7,235 4.8% 9.7%
HMN IN 4.0 10,495 5.3% 17.8% 3,387 7.6% 35.2% 3,059 8.1% 35.9% 2,789 5.5% 31.2%
HUVR IN 0 1,54,080 1.4% -0.6% 35,700 0.8% -2.1% 34,690 0.2% -2.3% 25,410 0.0% -2.7%
ITC IN 5.5 1,70,528 3.5% -8.6% 58,284 -3.3% -4.8% 65,456 -2.7% -1.1% 51,225 -8.2% 0.8%
JUBI IN 12.5 16,111 18.9% 9.8% 3,128 10.6% 10.0% 788 -3.8% 12.9% 658 7.9% 26.4%
METROBRA IN 7,031 10.6% 20.1% 2,250 13.1% 45.4% 1,593 17.2% 69.5% 946 -3.3% 35.6%
KNPL IN 4.0 18,422 1.5% -1.2% 2,469 2.9% 14.8% 2,281 7.2% 18.7% 1,699 7.8% 30.6%
MRCO IN 6.0 27,940 15.4% 4.9% 5,330 3.9% 2.1% 5,180 4.6% 1.6% 4,060 5.2% 4.6%
MTEP IN 7.5 1,907 15.2% -0.3% 338 11.6% 0.8% 182 -4.1% -2.7% 136 -3.9% -3.3%
NEST IN 47,797 3.9% -6.4% 11,027 -0.9% -5.6% 9,400 -7.1% -7.9% 7,139 -8.6% -6.0%
PIDI IN 9.7 33,689 7.6% 4.1% 7,984 7.5% 3.8% 7,522 9.5% 3.6% 5,571 9.0% 3.1%
RBA IN 4,956 11.3% 0.7% 778 10.0% 11.1% -184 187.6% 11.8% -184 187.6% 11.8%
TTAN IN 1,60,970 23.3% 21.8% 17,630 21.0% 23.9% 15,730 17.0% 28.6% 11,800 13.5% 27.9%
WESTLIFE IN 6,537 8.9% 5.8% 881 -4.2% 15.9% 65 -71.9% 819.7% 70 -59.3% NA
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
Margins near bottom across segments, We expect recovery in demand to continue as lower tax rates are likely to increase
Titan discretionary income in coming quarters. However recent runup in gold prices remain key risk to overall sentiments. We expect
Company TTAN’s expansion strategy in Tier2/3 cities will help gain market share from unorganized segment. We estimate 16.8%/21%
Sales/EPS CAGR over FY25-27.
BRIT’s long-term drivers remain intact given 1) Sustained leadership in Biscuits and Bakery 2) No incremental threat from B2C
Britannia players in its business as this market segment always had large number of local, and regional players 3) innovation pipeline remains
Industries strong with 4 new launches 4) cost saving and GTM initiatives are on track. We estimate just 1.2% EPS growth in FY25 but 15% PAT
CAGR over FY25-27. We believe BRIT provides an attractive entry price post ~24% correction from all-time high.
Source: PL

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Consumer Durables
Conviction Picks: ▪ Revenue in line with estimates: Aggregate sales / EBITDA / Adj PAT in our
coverage universe grew 14.1% /25.9% /22.5% YoY (PLe: 13.6%/24.0%/35.7%
Polycab India
YoY), led by healthy growth in revenue, largely from the C&W and UCP
segments, which grew by 13.4% and 17.9% YoY, respectively. FMEG segment
grew by 11.0% YoY. Bajaj Electricals, Havells and RR Kabel were the major
underperformers in our coverage universe, reporting PAT decline of 10.7%,
3.5% and 3.4% YoY, respectively. Voltas outperformed with positive PAT,
despite margin pressure in the UCP segment. Crompton reported 27.7% YoY
growth.

▪ Steady growth in cables, wires impacted by RM fluctuations:

Polycab/Havells/KEI/RR Kabel reported 11.9% /7.3% /25.8%/7.6% YoY growth
in the W&C segment with EBIT margin change of -60bps/+70bps/-60bps/-
100bps. Cables segment reported healthy volume growth supported by
strong demand from emerging sectors and international markets. Pick-up in
infrastructure activity and private capex is expected to boost further cable
demand. Impacted by the fluctuation in RM prices, wires segment is expected
to see recovery with the stabilization of copper prices and pickup in real estate
demand.

▪ FMEG growth driven by small domestic appliance & premium fans:

Havells/Crompton/Polycab/RR Kabel/Bajaj reported revenue growth of
13.1%/6.0%/44.6%/19.5%/5.0% YoY. Overall coverage segment reported
11.0% YoY growth, driven by: 1) strong demand in appliances, particularly small
domestic appliances, 2) continued growth momentum in premium fans and
BLDC models, 3) investments in premiumization, innovation, and GTM
expansion, and 4) increased consumer demand for seasonal products.

▪ RAC delivers moderate growth before onset of summer: Voltas has reported
healthy volume growth in the UCP segment (42% YoY in 9MFY25) and expects
continued strong demand driven by the upcoming summer season. Voltas
sustained its market share in the RAC segment (exit market share 20.5%).
Havells’ Lloyd reported revenue growth of +13.1% YoY in Q3FY25.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
BJE IN 12,897 5.0% 15.3% 874 8.4% 69.4% 454 -38.2% 208.6% 334 -10.7% 158.6%
CROMPTON IN 17,692 4.5% -6.7% 1,880 25.5% -7.6% 1,512 34.4% -11.5% 1,098 27.7% -12.1%
HAVL IN 48,890 10.8% 7.7% 4,265 -1.4% 13.7% 3,773 -3.4% 3.9% 2,780 -3.5% 3.8%
KEII IN 24,673 19.8% 8.2% 2,408 12.3% 9.2% 2,212 9.3% 6.4% 1,648 9.4% 6.5%
POLYCAB IN 52,261 20.4% -5.0% 7,199 26.4% 14.0% 6,166 12.8% 4.4% 4,576 10.8% 4.0%
RRKABEL IN 17,822 9.1% -1.5% 1,105 -1.8% 28.9% 900 -6.1% 50.3% 686 -3.4% 38.4%
VOLT IN 31,051 18.3% 18.6% 1,974 594.5% 21.7% 2,231 272.1% -6.2% 1,321 -534.5% -1.4%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 72

 India Strategy

Conviction Picks Commentary

Name Commentary
Polycab reported double-digit volume growth in its cables segment. Wires business reported single-digit growth, due to high
channel inventory and fluctuating copper prices, but is expected to recover in Q4FY25 with the stabilization of copper prices and
Polycab India pickup in infrastructure activity. Polycab aims to achieve 1.5x sector growth in volume and EBITDA margin of 11-13% over the next 5
years through its Project Spring, aiming for Rs400-500bn revenue during this period. We expect revenue/EBITDA/PAT CAGR of
17.9%/17.3%/15.6% over FY24-27E
Source: PL

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Education
Conviction Picks: ▪ Both Navneet Education (NELI) and S Chand (SCHAND) reported strong
numbers in 3QFY25. NELI’s performance was boosted by an institutional order
DOMS Industries in the publishing segment, while SCHAND benefited from the introduction of
semester system for grades 11 and 12 in West Bengal. Meanwhile, DOMS
posted a strong performance, driven by robust growth in the hygiene
business.

▪ DOMS: DOMS reported strong performance in 3QFY25, driven by robust

growth in the hygiene business. With the third diaper production line now
operational, installed capacity has increased to 650mn pieces annually, which
is expected to boost growth in FY26E. The core stationery business also
remains on a steady growth path, with ongoing expansion in pens and pencils.
Progress over the new development plan on the 44-acre land parcel at
Umbergaon, is on track and the first building is expected to be ready by
3QFY26E. Led by the ongoing expansion of product basket and distribution
network, we expect sales and PAT CAGR of 27% over FY25E-FY27E. Retain
‘BUY’ with a TP of Rs3,370 (60x FY27E EPS).

▪ NELI: NELI reported strong performance in 3QFY25 with an EBITDA margin of

6.3% aided by an institutional order of Rs150mn in the publication segment.
PAT was buoyed by a Rs255mn FV gain arising from revaluation of the K-12
business; however, adjusting for this, bottom-line was in red at Rs97mn. The
publishing division has been facing growth challenges due to increasing usage
of second-hand books. While institutional orders will provide temporary
cushion, material growth in volumes is expected only after higher grades
undergo a syllabus change. Additionally, declining ASP in the domestic
stationery market indicates rising competitive pressure, while slow offtake in
channel inventory reflects a weak demand environment. We expect sales/PAT
CAGR of 11%/17% over FY25E-FY27E. Retain ‘HOLD’ with a revised SOTP-
based TP of Rs150 as we roll forward our valuation to FY27E.

▪ SCHAND: SCHAND reported strong performance in 3QFY25 with GM of

70.3% and EBITDA loss of Rs192mn led by 1) introduction of semester system
(aids in volume & realization) for grades 11 and 12 in West Bengal and 2)
multiple content syndication deals. The management reaffirmed its FY25E
guidance of double-digit revenue growth with EBITDA margin of 17-19%
supported by 1) single-digit price hike, 2) RM cost stabilization, and 3)
anticipated volume delta arising from phased rollout of the new NCF.
Although the adoption of NCF-aligned content has been gradual, with NCERT
announcing new syllabus books only for grades K-to-3 and 6 so far, further
announcements during the year will drive higher adoption rate and aid
revenue. Backed by these factors, we expect sales/PAT CAGR of 12%/16%
over FY25E-FY27E. Retain ‘BUY’ with a TP of Rs305 valuing the stock at 11x
(earlier 12x) as we roll forward our valuation to FY27E.

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Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
DOMS IN 5,011 34.9% 9.5% 879 26.7% NA 730 39.3% NA 507 NA NA
NELI IN 2,823 9.1% 3.9% 178 340.9% NA -5 -96.4% NA -97 -26.2% NA
SCHAND IN 1,002 31.2% 167.5% -192 -52.3% NA -311 -38.7% NA -246 -29.4% NA
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
The core stationery business of DOMS is on a steady growth path (revenue was up 21.4% YoY excluding the
consolidation impact of Uniclan) with the ongoing expansion in pens and pencils. In addition, the hygiene
DOMS Industries business is also undergoing capacity expansion with the installation of a 3rd diaper manufacturing line. Led
by the ongoing expansion of product basket and distribution network, we expect sales and PAT CAGR of
27% over FY25E-FY27E. Retain BUY with a TP of Rs3,370 (60x FY27E EPS).
Source: PL

February 24, 2025 75

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Electronic Manufacturing Services

Conviction Picks: ▪ EMS companies grow 28.8% YoY, margins Expand: Revenue of EMS
companies in our coverage universe grew by 28.8% YoY (PLe: 38.7%), with a
Kaynes Technologies margin expansion of 160bps to 10.5% (PLe: 10.6%). The coverage order book
grew by 24.1% YoY to Rs151bn. Avalon/KAYNES/Syrma order book grew by
25%/59.6%/10.4% to Rs16/60/53bn, whereas Cyient DLM order book declines
by 6.6% YoY to Rs21bn.

▪ Avalon’s strong growth continues, Cyient DLM bets on strategic deals:

Avalon has outperformed in the EMS segment, driven by higher growth in the
industrials segment, and margin expansion of ~460bps YoY to 12.3%, led by
improved segment mix and increased domestic manufacturing. AVALON's
revenue grew by 31.1% YoY, supported by ~320% YoY increase in the
industrials segment (contributed ~34% to revenue), and 28.9% YoY growth in
the clean energy segment (~22% to revenue). AVALON has increased its
revenue growth guidance to 22-24% (earlier 16-20%) for FY25 and GM to 34-
36% from 33-35%. However, Cyient DLM had reported low margins due to ECL
provision in Q3FY25, M&A expenses, and delay in order inflow from major
clients, However, the company is expecting three large deals, the benefit of
which will be visible from H2FY26. CYIENTDL has formed a strategic
partnership with Arcedo to establish a 500kWp rooftop solar power plant at
its Mysuru facility. Avalon/Cyient DLM exports segment contributed 56%/61%
to the topline in Q3FY25.

▪ Strong order book for KAYNES & Syrma adds new clients: KAYNES
unperformed in the EMS segment due to delay in order execution. However,
KAYNES has maintained a strong outlook for FY26, expecting revenue of
Rs45bn with EBITDA margin of 15-16%. The OSAT facility development is on
track, with estimated revenue starting in Q4FY26, while PCB manufacturing is
expected to begin as planned, contributing to revenue from FY27. For FY25,
KAYNES has lowered its FY25 revenue guidance to Rs28bn from Rs30bn, with
EBITDA margin of 15%. Syrma revenue grew by 23% YoY driven by
37.8%/36.8% YoY increase in the auto/industrial segment. Syrma has added
new clients in the automotive and industrial segments and expects Rs2bn in
revenue from them in FY26. The company has reduced its consumer
contribution target, from 40% to 35% for the coming years, due to lower
margins. With this, the margin will improve in coming years. The company’s
order book stood at Rs53bn in Q3FY25, with auto/consumer/industrial/IT &
railways contributing 30%/38-40%/22%/8%.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
AVALON IN 2,809 31.1% 2.1% 346 109.2% 14.9% 327 260.7% 39.6% 240 264.7% 37.2%
CYIENTDL IN 4,442 38.4% 14.1% 281 -4.4% -11.1% 150 -39.2% -28.2% 110 -40.4% -28.9%
KAYNES IN 6,612 29.8% 15.6% 940 34.6% 14.5% 808 38.2% -4.8% 665 47.1% 10.4%
SYRMA IN 8,692 23.0% 4.4% 791 100.4% 11.4% 657 143.6% 29.6% 422 108.1% 6.5%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 76

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Conviction Picks Commentary

Name Commentary
Kaynes is targeting Rs45bn revenue with 15-16% margin in FY26, despite short-term execution delays. In the
smart metering segment, the company has received orders from 3 states and from AMISP. Kaynes has
commenced construction of its OSAT factory at Gujarat, and HDI PCB factory at Tamil Nadu. In Q3FY25, the
Kaynes Technologies
company order book grew by 60% YoY to Rs60bn.The company is expecting order book CAGR of 37.2% over
FY24-27E and revenue CAGR of 51.4%, driven by automotive/industrial segments which are likely to
contribute 20%/60%.
Source: PL

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 India Strategy

Information Technology
Conviction Picks: ▪ Q3FY25 performance was relatively better than that in the same quarter last
year. Median CC revenue growth witnessed significant recovery, up 1.8% QoQ
Infosys
CC vs 1.0% QoQ CC reported in Q3FY24. The recovery was aided by higher
LTIMindtree passthrough, improvement in revenue conversion, recovery in pockets
beyond BFSI, and slight uptick in discretionary activities.

▪ While cross-currency headwinds presented challenges to reported growth in

select segments, constant currency performance demonstrated broad-based
growth across the BFSI, Retail/CPG, and Hi-Tech sectors on a year-over-year
basis.

▪ Tier-2 companies continued to outperform Tier-1, with former reporting

median CC growth of 2.8% QoQ compared to 1.5% for the latter. Further,
depreciation of major currencies against the US dollar significantly impacted
reported revenue with Tier-1 companies reporting 0.2% QoQ decline.

▪ Margin recovery continued in Q3 with 40bps QoQ/30bps YoY improvement,

achieving 20% for the sector. EBIT margin improved by 30bps QoQ for both
Tier-1 and Tier-2 companies. Tier-1 companies achieved a margin of 20.4%,
while Tier-2 companies saw their margin improve to 14.3% (after a 50bps QoQ
decline in Q2FY25).

▪ Deal wins were strong during the quarter, reaching ~USD22.7bn (up +10.5%
QoQ/11.7% YoY), indicating an improvement in client sentiment and faster
decision-making. LTM BTB stood at 1.0x vs 1.1x in Q3FY24, despite marked
improvement in deal TCV.

▪ Net headcount increased by 300 in Q3, down from strong growth in Q2,
primarily due to seasonality.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs bn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
CYL IN 19 5.8% 4.2% 2 -15.6% -4.9% 2 -27.1% -28.3% 1 -31.0% -28.4%
HCLT IN 299 5.1% 3.6% 58 3.7% 8.6% 61 4.4% 7.8% 46 5.5% 8.4%
INFO IN 418 7.6% 1.9% 89 11.9% 3.0% 97 12.2% 4.5% 68 11.7% 4.8%
LTIM IN 97 7.1% 2.4% 13 -4.1% -8.9% 15 -4.7% -12.7% 11 -7.2% -13.2%
MPHL IN 36 6.7% 0.7% 5 9.8% 0.3% 6 14.2% 1.2% 4 14.6% 1.1%
PSYS IN 31 22.6% 5.7% 5 25.5% 12.2% 5 23.8% 10.9% 4 30.3% 14.8%
TCS IN 640 5.6% -0.4% 157 3.3% 1.2% 167 5.0% 4.0% 124 5.5% 4.0%
TECHM IN 133 1.4% -0.2% 13 37.3% -2.3% 12 35.1% -30.5% 9 23.0% -29.3%
WPRO IN 223 0.5% 0.1% 39 18.6% 4.9% 45 25.4% 4.1% 34 24.5% 4.5%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 78

 India Strategy

Conviction Picks Commentary

Name Commentary
With strong performance in deal wins and an improving discretionary spending environment, coupled with
Infosys positive momentum in FS and Retail, we expect Infosys to be a leading beneficiary in the sector through
FY26 & FY27.
Despite productivity pressures from rising GenAI demand, we believe LTIM will see increased client volume.
LTIMindtree The record $1.7 billion in deal wins signals improved decision-making, and we anticipate continued growth as
revenue conversion accelerates..
Source: PL

February 24, 2025 79

 India Strategy

Hospitals
Conviction Picks: ▪ Despite a seasonally weak quarter for hospital companies, our coverage
universe saw a strong EBITDA growth of 24% YoY in Q3FY25. However,
Max Healthcare Institute
EBITDA declined 5% QoQ, in line with seasonal trends. Excluding 24x7 losses
Krishna Institute of Medical Sciences in APHS, EBITDA growth across the coverage companies was 22% YoY (down
5% QoQ).
Aster DM Healthcare

Forits Healthcare ▪ Hospital companies reported healthy revenue growth of 18% YoY, driven by
higher ARPOB and steady occupancy. QoQ occupancy levels declined,
reflecting the impact of seasonality. KIMS saw a sharp decline in occupancy,
both YoY and QoQ, attributed to the integration of new clusters and
expansion of its units.

▪ Capex plans for KIMS, RAINBOW and APHS faced delays of a quarter or two,
whereas other companies under coverage remain largely on track with their
capex execution.

▪ KIMS, ASTERDM, JLHL and FORH recorded double-digit YoY ARPOB growth
benefiting from a favorable payor and case mix. RAINBOW’s ARPOB declined
4% YoY on account of increased ALOS and new bed additions.

▪ Revenue from international patients was impacted, with MAXHEALT, APHS,

RAINBOW, NARH and HCG witnessing softer inflows. This was due to the
political unrest in Bangladesh, which impacted patient travel. In case of
ASTERDM, Kerala cluster saw lower volumes driven by decline in footfalls from
Maldives and GCC region given the leadership changes. The management
have guided revenue from international patients to recover from Q4.

▪ The managements have guided YoY ARPOB growth to range from lower single
digits to mid-high single digits in FY26, driven by higher surgical volumes and
improved case and payor mix.

▪ Expansion and capex plans for hospital companies under coverage are largely
on track. Given the strong cash flow generation, companies will continue to
explore inorganic greenfield expansion. We remain structurally positive on the
hospitals’ space over the medium term and expect the momentum to continue
with improvement in occupancy and case-payor mix, and new capacity
additions.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
APHS IN 55,269 13.9% -1.1% 7,615 24.1% -6.6% 5,309 46.7% -3.8% 3,723 51.8% -1.7%
ASTERDM IN 10,498 10.6% -3.4% 1,938 22.6% -13.8% 1,338 56.6% -19.5% 554 -14.4% -42.2%
FORH IN 19,283 14.8% -3.0% 3,752 32.1% -13.7% 2,536 48.4% -19.9% 2,479 84.1% 40.5%
HCG IN 5,586 18.9% 0.9% 884 12.4% -13.6% -42 -137.9% -115.2% 70 22.5% -61.2%
JLHL IN 3,206 17.6% -0.6% 750 21.3% 0.0% 666 14.3% -3.4% 525 20.3% 2.0%
KIMS IN 7,724 27.5% -0.6% 1,872 27.2% -14.2% 1,346 31.2% -17.0% 887 23.5% -17.4%
MAXHEALT IN 22,810 35.1% 7.3% 6,220 31.8% 9.9% 4,810 15.6% 3.7% 3,150 -7.1% -9.7%
NARH IN 13,667 13.5% -2.4% 3,070 10.1% -0.5% 2,188 4.9% -5.6% 1,932 2.6% -2.9%
RAINBOW IN 3,981 18.5% -4.6% 1,344 13.8% -8.7% 943 11.3% -10.5% 687 10.6% -12.9%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 80

 India Strategy

Conviction Picks Commentary

Name Commentary
Strong quarter (despite seasonality) aided by ramp-up in new units. Occupancy flat QoQ despite seasonality and
Max Healthcare consolidation of new units. ARPOB de-grew YoY due to new additions; however, base business ARPOB healthy, up ~7%
Institute YoY. Dwarka unit loss reduced to Rs50mn in Q3 vs Rs180mn in Q2 and achieved breakeven for 141 beds in Dec’24, within 6
months of operations. Expansion plan largely on track; ~1,891 beds will be operational by end-FY27E
Reported robust EBITDA growth of 27% YoY. 25% YoY ARBOB growth (Rs38,472/day) aided by improved payor & case mix
Krishna Institute of
and lower ALOS. Nashik, Vizag and Kannur consolidated in Q3. Kannur unit achieved breakeven within 3 months of
Medical Sciences
operations. Plans to add 2,370 beds across clusters by FY27 end. Net debt to EBITDA guidance retained at ~2x
In-line quarter led by higher ARPOB growth and improved margins. Hospital margins guided to reach ~24% over 2 years
with improvement in operational efficiencies, higher ARPOB, reduction in ALOS, and strategic cost control. Kerala cluster’s
occupancy saw recovery in Jan’25. The management plans to improve case and payor mix further through strategic focus
Aster DM Healthcare
on insurance business and reduction in scheme patients. Consol margin guidance at +21% by FY27. Expansion plan of 1,700
beds with key brownfield expansion at Medcity, CMI and Whitefield, on track. ASTERDM and QCIL merger awaiting
regulatory approvals from CCI, NCLT and stock exchanges
Divested another non-performing unit at Richmond Road in Bengaluru, which incurred Rs80mn EBITDA loss in FY24. New
Manesar unit guided to break even from Q1FY26. The management guided for 350-400 brownfield bed expansion annually
Fortis Healthcare
for the next 2 years. ARPOB guided at 5-6% YoY and occupancy levels will continue improving, supported by bed
expansions, better case mix, and increased patient demand. Branding expenses from Agilus guided to reduce from Q1FY26
Source: PL

February 24, 2025 81

 India Strategy

HFCs
▪ Our coverage HFCs saw a soft quarter; while AuM growth and NII were
marginally lower, NIM was-in-line. However, PAT was higher as provisions
were lower for LICHF.

▪ AuM growth was a slight miss at 7.3% YoY. Disbursals were 6.3% lower at
Rs189.5bn (PLe Rs202.2bn) due to state specific issues in Karnataka (related
to E-Khaata registrations) and Telangana. Repayments were lower at
Rs129.9bn (PLe Rs135.2bn).

▪ NII at Rs26bn was a slight miss due to lower disbursals in case of LICHF and
CANF. AAVAS reported better NIMs due to lower funding cost.

▪ Other income was a beat at Rs1.97bn due to LICHF. Opex was higher at
Rs5.6bn (PLe Rs5.3bn) due to increased staff cost for LICHF. PPoP at
Rs22.4bn was 1% ahead of PLe led by higher other income.

▪ Provisions were negative at Rs0.16bn mainly led by impairment write-back in

case of LICHF due to improvement in asset quality; CANF saw a blip in asset
quality. Overall PAT at Rs17.9bn was 14% ahead of PLe.

▪ Stage-3 was better at 2.46% (PLe 2.82%) due to improved Stage-3 for LICHF;
AAVAS/CANF saw an increase in stage-3 by 6bps/4bps QoQ.

Q3FY25 Result Snapshot

NII Operating Profit PAT
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
AAVAS IN 2,533 14.8% 4.8% 1,945 23.3% -0.2% 1,464 25.5% -1.0%
CANF IN 3,447 4.8% 1.5% 2,913 1.9% 1.2% 2,121 8.0% 0.3%
LICHF IN 20,001 -4.6% 1.3% 17,495 -7.2% 0.4% 14,320 23.1% 7.8%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 82

 India Strategy

Logistics
▪ Logistic companies under our coverage universe reported subdued
performance in 3QFY25. TCI Express saw the 5th consecutive quarter of
volume de-growth, while Delhivery's B2C express volume growth was in low
single digits for the fourth quarter in a row. Meanwhile, Mahindra Logistics
faced ongoing profitability challenges in B2B express business, although its
3PL performance was satisfactory.

▪ Delhivery: Delhivery reported weak performance with an EBITDA miss,

impacted by high fleet cost inflation due to festive demand and increased
fixed overheads arising from operationalization of the new Bengaluru facility.
This marks the 4th consecutive quarter of low single-digit B2C volume
growth. Near-term growth headwinds are likely to persist as competition
among 3PL players has intensified. While growth in the B2C express segment
remains a challenge, the PTL business continues to perform steadily. Retain
HOLD with a TP of Rs340 (35x FY27E EBITDA).

▪ TCI Express: TCI Express reported weak results as volumes declined for the
5th consecutive quarter. Pricing pressure was also evident as realization was
down 1.8% YoY. While price hike in Jan’25 lends some comfort, we believe
volume growth challenges are expected to persist due to weak consumer
demand. However, as recovery gathers momentum and utilization levels
improve to ~84%, operating leverage benefits can be significant, resulting in
sales/PAT CAGR of 11%/32% over FY25E-FY27E. Retain BUY with a TP of
Rs1,021 (24x FY27E EPS).

▪ Mahindra Logistics: Mahindra Logistics’ operating performance was broadly

in line with our estimates led by decent performance in the 3PL business.
However, turnaround in the B2B express business continues to remain a cause
of concern. While the management expects EBITDA break-even in 2 quarters,
incremental volumes of 6-7k tons per month would be required to achieve the
same. We believe this could be challenging given the overall demand scenario
and prevailing competitive landscape. In addition, unabsorbed white space
has increased to ~1.5mn sq ft, making fixed cost absorption a challenge unless
demand revives soon. We maintain HOLD rating on the stock with a TP of
Rs399 (20x FY27E EPS) given the ongoing challenges in the B2B express
business.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
DELHIVER IN 23,783 8.4% 8.6% 1,024 -6.3% 78.8% 260 -26.4% 72.8% 250 54.6% 144.9%
MAHLOG IN 15,942 14.1% 4.8% 737 41.1% 11.0% -11 -91.6% -77.5% -90 -54.2% -16.0%
TCIEXP IN 2,963 -5.0% -4.9% 304 -33.3% -20.2% 274 -35.4% -21.6% 207 -35.8% -21.4%
Source: Company, PL *Hyperlink on Bloomberg Code

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Media & Entertainment

Conviction Picks: ▪ Media: Within our media universe, PVR-Inox reported in-line performance led
by strong performance from movies like Pushpa-2, Bhool Bhulaiya-3, and
Imagicaaworld Entertainment Singham Again. On the other hand, ZEEL reported better-than-expected
performance with an EBITDA margin of 16.1%, despite a weak ad-environment,
led by cost optimization efforts and narrowing losses in ZEE5.

▪ Entertainment: In our entertainment universe, Nazara posted a revenue beat,

driven by change in revenue recognition policy of Space & Time (S&T);
however, operational performance was impacted by losses in Nodwin. In order
to boost organic growth, Nazara has signed partnerships with popular IPs like
Little Angel, Barbie, Slinky and Big Boss, while inorganic expansion is likely to
continue given the recent fund raise of Rs4,950mn. On the amusement parks
side, Imagicaaworld Entertainment Ltd (IEL) reported subdued operational
performance, due to pressure on footfalls and pricing. However, we expect a
recovery in FY26E, driven by new rides & attractions, and the inauguration of
a new water park in Indore.

▪ PVR-Inox: PVR-Inox reported in-line performance with a pre-IND AS EBITDA

margin of 13.8%, driven by strong performances from movies like Pushpa-2,
Bhool Bhulaiya-3, and Singham Again. However, footfall growth remains a
challenge with occupancy hovering at 22-25% since the last few quarters. To
drive footfalls, PVR-Inox is figuring innovative ways like 1) scheduling re-runs,
2) broadcasting trailers, 3) offering passport plans and 4) providing private
screening options. While its focus on rationalizing cost, and reducing capex
(adoption of FOCO & asset light model) and debt is commendable, footfall
recovery remains key to re-rating. Retain HOLD with a TP of Rs1,215 (11x
Sep’26 EBITDA).

▪ ZEEL: ZEEL reported better-than-expected performance with an EBITDA

margin of 16.1%, led by cost optimization efforts and narrowing losses in ZEE5.
However, we believe the benefits of cost optimization are being
overshadowed by a weak ad-environment as evident from the decline in
domestic ad-revenue since 2QFY23, barring one quarter. While cost frugality
is commendable, ad-market recovery is crucial for re-rating. Retain HOLD with
a TP of Rs137 (12x Sep’26E EPS).

▪ Nazara Technologies: Nazara reported a revenue beat as the new policy of

S&T recognizes revenues on either gross or net basis, depending on client
agreements. However, operational performance was lower than expected due
to losses in Nodwin and weak performance in the Ad-Tech segment. We
expect sales CAGR of 23% over the next 2 years with an EBITDA margin of
10.1%/12.5%/13.7% in FY25E/FY26E/FY27E aided by efforts taken to boost
organic growth through signing partnerships with popular IPs like Little Angel,
Barbie, Slinky and Big Boss. Retain BUY with an SOTP-based TP of Rs1,117.

▪ Imagicaaworld Entertainment Limited: IEL reported subdued operational

performance with an EBITDA margin of 32.2% amid pressure on footfalls and
pricing. Nonetheless, we expect recovery in FY26E backed by 1) addition of 8
new rides at Lonavala, 2) launch of 2 new shows at Sai Teertha, 3) inauguration
of a new trampoline park at Khopoli with 15+ new attractions, and 4) launch
of a new water park in Indore. We have incorporated the dilution impact arising
from preferential allotment and expect sales/EBITDA CAGR of 15%/20% over
FY25E-FY27E. Retain BUY on the stock with an SOTP-based TP of Rs97.

February 24, 2025 84

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Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
IMAGICAA IN 919 31.2% 129.8% 296 7.1% -882.6% 41 -67.4% -116.6% 29 -70.7% -141.4%
NAZARA IN 5,347 66.9% 67.6% 523 38.9% 108.1% 257 -30.6% 11.7% 307 20.8% 28.7%
PVRINOX IN 17,173 11.1% 5.9% 5,277 11.7% 10.1% 463 164.6% -415.0% 360 181.3% -405.1%
Z IN 19,788 -3.3% -1.1% 3,184 52.2% -0.8% 2,786 95.7% 1.2% 2,422 113.1% 23.3%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
We believe IEL is a classic turnaround candidate post BS restructuring and takeover by the Malpani Group. IEL
is on a strong growth path led by the consolidation of parks at Lonavala and Shirdi. Beyond the inorganic
growth catalyst, plans to launch new parks in Indore and Ahmedabad will drive organic growth from here on.
Imagicaaworld Entertainment
Further, the recent fund raise of Rs3,451mn via preferential allotment indicates leverage risk is likely to be
miniscule in the near to medium term. We expect sales/EBITDA CAGR of 15%/20% over FY25E-FY27E and
retain BUY on the stock with an SOTP-based TP of Rs97.
Source: PL

February 24, 2025 85

 India Strategy

Metals & Mining

Conviction Picks: ▪ Metals coverage universe reported ~4% YoY increase in revenue during the
quarter affected by weak steel pricing. Domestic steel demand started
Hindalco Industries
improving in Q3, which led to decent 9.6% YoY volume growth. Steel NSR was
Jindal Stainless affected by weakness in flat products pricing. While flats pricing has started
improving post Dec’24, we expect flattish QoQ NSR for steel companies
Jindal Steel & Power
during Q4. Steel imports came down substantially during Q3, down 26%/25%
YoY/QoQ to 2.06mt, which aided recent uptick in pricing.

▪ Steel companies’ average realizations declined by ~2% QoQ. Flat steel average
prices declined 5% QoQ to ~Rs47.8k/t, while long steel average prices
increased by ~5% to Rs53.8k/t. Apart from increasing demand in the domestic
markets, steel prices would be determined by measures undertaken by GoI to
curb cheaper imports, viz., safeguard duty or temporary tax, which would
create a floor for pricing of imports.

▪ Trump government has imposed 25% tariff on steel and aluminum across
trading partner countries and additional 10% on all imports from China. We
believe the situation would evolve and actions from China can affect global
steel pricing. Direct exports to the US from India are immaterial and from
China are also just ~3mt. Material flow redirection of indirect exports, if it
happens, can put pressure on global steel pricing.

▪ For steel companies, average coking coal prices declined 4% QoQ to

USD203/t. As per companies, consumption cost is expected to decline by
USD10-15/t in Q4FY25, aiding margins.

▪ Two iron ore price hikes in Oct’24, totaling Rs1,000/t for lumps and Rs800/t
for fines, led to an 11% QoQ increase in NMDC’s NSR, while volumes grew 5%
YoY to 11.9mt, driven by rising domestic demand. In Jan’25, NMDC reduced
prices by Rs350/t for both fines and lumps and is expected to implement
further smaller cuts in the coming months.

▪ Jindal Stainless reported 14% QoQ decline in EBITDA/t due to weak exports
markets. Volumes grew 15% YoY led by strong domestic markets, which grew
at 20% YoY. JDSL has maintained volume growth of ~10% for FY25, but
lowered EBITDA/t guidance to Rs17k from Rs18k earlier.

▪ HNDL and NACL delivered strong results, driven by 35% QoQ rise in alumina
prices to USD737/t and 8% QoQ increase in LME aluminum prices to
USD2,574/t. Alumina prices rose due to disruptions in Guinea bauxite supply
and Australia refinery. The situation appears to be easing, having declined 15%
QTD to c. USD465/t, while aluminum prices remain flat QTD.

▪ EBITDA for our metals coverage universe declined 2% YoY to Rs277bn,

whereas PAT declined by 5% YoY at Rs100bn. On QoQ basis, EBITDA margins
grew by just 17bps QoQ to 13.2% affected by steel realizations, while lower
coking coal prices provided some relief.

▪ JSP’s Angul blast furnace, expected to be commissioned in Q4FY25, is

projected to aid volumes in FY26.

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▪ All eyes are on the implementation of safeguard duty, with steel players
demanding a 25% levy. If enforced, it would provide relief to domestic steel
producers from cheap Chinese imports and support price increases. Primary
steel producers raised prices in January, which the market has absorbed well.
The uptick in domestic demand, coupled with a further decline in coal
consumption costs, is expected to aid Q4 industry performance. We maintain
a positive stance on Hindalco, JDSL and JSP.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs bn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
HNDL IN 583.9 10.6% 0.3% 75.8 29.3% -3.8% 53.4 60.4% -13.3% 38.2 63.8% -22.7%
JDSL IN 99.1 8.5% 1.3% 12.1 -3.1% 1.8% 9.0 0.1% 8.4% 6.5 -5.4% 7.1%
JSP IN 117.0 0.0% 5.0% 21.3 -25.0% 0.4% 11.5 -40.4% 1.0% 9.5 -50.7% 10.4%
JSTL IN 413.8 -1.3% 4.3% 55.8 -22.3% 2.6% 12.8 -61.6% 6.9% 8.0 -67.0% 10.8%
NACL IN 46.6 39.3% 16.5% 23.3 200.8% 50.3% 21.2 217.5% 47.7% 15.8 224.1% 49.0%
NMDC IN 65.7 21.4% 33.5% 23.7 18.2% 71.2% 25.8 15.9% 60.1% 19.0 14.4% 58.6%
SAIL IN 244.9 4.9% 6.3% 20.3 -5.4% 59.8% 2.9 -24.7% -155.2% 1.3 -62.0% -84.9%
TATA IN 536.5 -3.0% -0.5% 44.9 -28.3% -21.8% 3.4 -84.5% -80.9% 1.3 -78.1% -81.0%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
Indian operations are expected to benefit from higher LME and upcoming coal supplies from captive mines,
which would reduce its coal cost by ~30% from current levels. Over the last few quarters, EBITDA
contribution from India business has improved from 31% in FY24 to ~45% in FY25.
Hindalco Industries
We expect Novelis to deliver ~3.5% volume CAGR over the next 3 years as the beverage can segment, which
accounts for 58-60% of volume, remains strong. Its long-term mitigation efforts to reduce the impact of
lower scrap spread will aid Novelis EBITDA/t.
As India progresses toward a USD10trn economy, rising stainless steel demand across industries benefits
JDSL. With strong domestic demand, railway modernization, metro expansion, and GoI’s push for replacement
of carbon steel with stainless steel in coastal area projects, JDSL is expected to achieve 12%+ volume CAGR.
Ramp-up of Chromeni plant over FY26-27E would aid cold rolled volume growth.
Jindal Stainless

Stainless steel demand is set to rise in process industries like ethanol, hydroelectric, and nuclear power. With
India's long-term goal of setting up 100GW nuclear capacity, SS consumption is expected to grow
significantly.
The 6.3mtpa expansion at Angul is on track and expect volume ramp-up by Q1FY26, which should drive
double-digit volume growth.

JSP has enough levers to drive margin expansion over the next 2 years, including 2 more captive coal mines,
Jindal Steel & Power upcoming slurry pipeline, and HSM ramp-up, which will improve the product mix by reducing the proportion
of semis.

It is best placed to play the domestic infrastructure story with limited debt on balance sheet. As it has higher
longs products exposure, strong infra demand would keep its NSR healthy vs peers.
Source: PL

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Oil & Gas

Conviction Picks: ▪ In Q3FY25, oil and gas sector reported an EBITDA/PAT of Rs919.2bn (up 20%
QoQ)/Rs413.3bn (up 12.7% QoQ) primarily led by strong OMC earnings
Oil India
although CGD results declined sequentially
Oil & Natural Gas Corporation
▪ RIL’s standalone segment reported an EBITDA of Rs152.1bn, up 13.3% QoQ on
account of sequentially stronger refining margins and PP and PVC deltas.
Retail EBITDA grew 19.7% QoQ with a margin of 8.3%. Jio EBITDA grew 4%
QoQ aided by tariff hikes undertaken, with a 4.2% QoQ increase in ARPU, net
subscriber addition came in at 3.3mn.

▪ On the upstream front, ONGC’s EBITDA grew 4% QoQ, oil production rose
1.5/0.3% QoQ/YoY while gas production fell 0.3% YoY but grew 1% QoQ.
OINL’s operating profit declined 2.3% QoQ, oil production grew 1.4% QoQ but
fell 0.8%YoY while gas production increased 0.9/3.8% QoQ/YoY.

▪ OMCs’ operating profit at Rs206.7bn improved remarkably sequentially on

account of better refining margins amid rise in product cracks, and strong
marketing performance. IOCL reported a GRM of ~US$3/bbl(up 88%QoQ,
down 78%YoY) with GMM of Rs7.1/ltr (up 8%/36% QoQ/YoY). BPCL reported
a GRM of US$5.6/bbl (up 27% QoQ, down 58% YoY) and GMM of Rs7.4/ltr (up
28% QoQ, up 113%YoY). Similarly, HPCL reported a GRM of US$6/bbl(up 93%
QoQ, down 29%YoY) and GMM of Rs5.7/ltr (up 33% QoQ, up 113% YoY).

▪ CGDs reported weak set of numbers- CGD players’ operating profit came in
at Rs10.6bn, down 27% QoQ due to APM de-allocation and rise in spot LNG
prices. MGL reported a volume growth of 12.1% YoY, however EBITDA/scm
declined 22.5% QoQ to Rs8.3. Similarly, IGL’s volume grew 7.4% YoY but
EBITDA/scm fell 32.8% QoQ to Rs4.3. On the other hand, Gujarat Gas reported
a volume growth of 3.4% amid recovery in Morbi sales, however EBITDA/scm
declined 31.6% QoQ to Rs4.4

▪ Going forward, we expect OMCs’ refining margins to weaken amid decline in

Singapore GRM and marketing margins on petrol/diesel to moderate with rise
in international petrol/diesel prices and under-recoveries on LPG to persist.
Ramp up in production would be key monitorable for Oil India and ONGC. For
CGD companies, any price hike/cuts undertaken by them would remain a key
monitorable.

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Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs bn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
BPCL IN 1,131.4 -2.0% 10.1% 75.8 22.3% 68.0% 61.8 34.8% 93.4% 46.5 36.9% 93.9%
GAIL IN 349.6 2.1% 6.2% 28.4 -25.8% -24.2% 25.9 -29.9% -25.0% 14.3 -49.8% -46.6%
GUJGA IN 41.5 5.7% 9.8% 3.8 -5.0% -26.0% 3.0 1.3% -27.7% 2.2 0.6% -27.8%
GUJS IN 2.4 -48.2% -0.7% 1.9 -49.3% -0.2% 1.8 -48.2% -58.2% 1.4 -48.3% -65.2%
HPCL IN 1,020.7 -2.0% 11.4% 59.7 175.9% 119.1% 40.1 422.2% 380.0% 30.2 471.4% 378.9%
IGL IN 37.6 5.9% 1.7% 3.6 -34.9% -32.0% 3.7 -28.5% -34.6% 2.9 -27.1% -33.5%
IOCL IN 1,939.0 -2.6% 11.5% 71.2 -54.1% 88.6% 27.9 -74.1% -383.4% 21.9 -72.8% -324.5%
MAHGL IN 17.6 12.0% 2.7% 3.1 -30.0% -21.2% 2.8 -34.8% -25.6% 2.2 -29.1% -20.5%
MRPL IN 218.7 -11.3% -12.4% 10.3 -12.9% -317.6% 4.7 -20.6% -145.1% 3.0 -21.4% -144.6%
OINL IN 52.4 -9.9% -5.1% 21.3 1.3% -2.3% 15.5 -19.8% -32.8% 12.2 -22.9% -33.4%
ONGC IN 337.2 -3.1% -0.5% 189.7 10.5% 4.0% 110.0 -12.8% -26.8% 82.4 -16.7% -31.2%
PLNG IN 122.3 -17.1% -6.1% 12.5 -26.9% 3.9% 11.7 -26.8% 2.5% 8.7 -27.2% 2.3%
RELIANCE IN 2,399.9 6.6% 3.6% 437.9 7.7% 12.1% 286.4 10.9% 14.4% 185.4 7.4% 11.9%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
Oil India Significant volume CAGR of 7%/15% in oil/gas expected over FY25-27E
Oil & Natural Gas
Peak production from KG Basin expected by FY25 end. We build in 4%/6% CAGR oil and gas volume growth over FY25-27E
Corporation
Source: PL

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Pharma
Conviction Picks: ▪ Pharmaceutical coverage universe registered healthy revenue growth of 11.4%
YoY. The domestic formulations segment is on a continued growth trajectory.
Sun Pharmaceutical Industries
US revenue remained steady, supported by increased contribution from
Lupin complex generics/specialty molecules.

Cipla ▪ The domestic formulations business was steady, led by growth across the
Eris Lifesciences chronic portfolio. Acute growth was a mixed bag with the anti-infectives
segment continuing to be a drag. Performance was also enhanced by an
expanded sales force and improved productivity of MRs.

▪ The US business remained steady, with broadly flat growth YoY in constant
currency terms. Certain niche launches complemented by ANDA approvals,
aided growth. Price erosion in the base business remained limited to mid-
single digits. DRRD and SUNP saw QoQ decline due to lower gRevlimid sales,
while LPC saw QoQ growth aided by gMirabegron 50mg launch.

▪ API business growth continues to be driven by volume, while pricing was

largely stable QoQ.

▪ On the operational front, EBITDA margins increased 140bps YoY to 26.6% for
our coverage universe. Factors that played out are: 1) continued traction from
niche launches aiding better product mix in the US, 2) benign price of raw
materials, 3) steady domestic business, and 4) currency tailwinds. In terms of
value, it grew 17.4% YoY. However, PAT growth was higher at 27.1% YoY, aided
by higher other income and lower interest charges.

▪ The US business is likely to remain steady in the coming quarters with

products like gRevlimid, gSpiriva and gMirabegron still contributing
meaningfully. Domestic formulations business is poised to sustain steady
growth at 8-10% in the coming quarters.

▪ R&D expenses are expected to remain stable as companies optimize

spending, prioritizing complex molecules and specialty products over
traditional generics, which should support long-term revenue growth.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
ARBP IN 79,785 8.5% 2.3% 16,278 1.7% 3.9% 12,979 2.6% 10.2% 8,456 -10.0% 3.5%
CIPLA IN 70,730 7.1% 0.3% 19,889 13.8% 5.8% 19,161 14.8% 7.4% 15,705 48.7% 20.5%
DIVI IN 23,190 25.0% -0.8% 7,430 51.9% 3.8% 7,260 48.5% 0.6% 5,890 64.5% 15.5%
DRRD IN 83,586 15.9% 4.3% 22,996 14.0% 7.1% 18,696 1.9% -6.7% 14,038 1.8% 4.6%
ERIS IN 7,275 49.6% -1.9% 2,503 42.6% -5.4% 1,162 0.2% -10.1% 836 -18.6% -8.7%
INDR IN 4,106 -10.6% -5.1% 120 -80.9% -70.1% -320 -203.6% 560.1% -314 -232.2% 201.6%
IPCA IN 22,454 9.4% -4.7% 4,461 34.8% -0.8% 3,679 66.6% 6.7% 2,481 121.8% 8.1%
JBCP IN 9,635 14.1% -3.7% 2,545 14.1% -5.9% 2,180 18.5% -7.8% 1,625 21.7% -6.9%
LPC IN 57,678 11.0% 1.7% 13,659 33.7% 4.4% 10,713 45.5% 1.6% 8,552 39.5% 0.3%
SUNP IN 1,36,755 10.5% 2.9% 41,924 25.1% 10.0% 39,759 35.0% 14.6% 29,034 15.0% -4.5%
TRP IN 28,090 2.8% -2.8% 9,140 5.2% -2.7% 6,910 27.3% 4.5% 5,030 13.5% 11.0%
ZYDUSLIF IN 52,691 17.0% 0.6% 12,050 11.4% -14.9% 10,015 10.7% -18.3% 8,412 12.6% -2.8%
Source: Company, PL *Hyperlink on Bloomberg Code

February 24, 2025 90

 India Strategy

Conviction Picks Commentary

Name Commentary
Growth trajectory to be sustained on the back of specialty portfolio with 6 products under clinical trials with
Sun Pharma Industries
competitive profile. Strong growth visibility continues in ROW and domestic business
Performance largely aided by higher US and India sales. Margins continued to improve with better product
mix and cost optimization measures. Continued niche launches in the US, clearance from USFDA for
Lupin
facilities, domestic formulations regaining momentum and cost optimization measures to help sustain
performance
Strong US generic pipeline, focusing on new launches. Timely introduction of gAbraxane and gAdvair key to
Cipla boosting US revenue and offsetting potential decline in gRevlimid. Domestic growth driven by stronger
branded prescriptions, solid trade generic business, and momentum in consumer health
Multiple growth levers such as broad-based offerings in the derma segment, opportunities in the cardio
Eris Lifesciences metabolic market with patent expirations, and benefits of operating leverage, as revenue from acquisitions
scales up
Source: PL

February 24, 2025 91

 India Strategy

Telecom
▪ In Q3FY25, Bharti Airtel reported an EBITDA/PAT of Rs245.9bn (up 12.6%QoQ)
and Rs72.3bn (up 62.7% QoQ)

▪ Subscribers stood at ~352mn, with a net subscriber addition of 4.9mn QoQ.

ARPU increased to Rs 245, up 5.3% QoQ on the back of tariff hikes

▪ India mobile Q3 revenue/EBITDA was Rs262.6bn (+5.8%QoQ) and Rs154.5bn

(+9.1%QoQ). 4G net customer addition was an impressive 6.5mn. ARPU of
Rs245 (+18%YoY), for comparison, Jio’s ARPU came in at Rs203.3, up
4.2%QoQ while net subscriber addition was 3.3mn QoQ.

▪ Enterprise segment’s revenue came in flat QoQ to Rs56.5bn while EBITDA fell
1.8% QoQ to Rs19.8bn with 50bps decline in margins to 35.2%. DTH revenue
remained flat QoQ to Rs7.6bn, similarly EBITDA at Rs4.4bn was up 4.3%QoQ.
Home services revenue grew steadily by 5.4% QoQ to Rs15bn with an EBITDA
of Rs7.4bn (+3.6% QoQ) and margin of 49.5%.

▪ Africa mobile revenue grew 4.4% QoQ to USD1.3bn with an ARPU of USD2.4
and subscriber additions of 6.4mn

▪ Airtel enterprise remains a leader in B-B space, by gaining revenue market

share. Company sees lots of opportunities in IOT, CPaaS and cyber security.

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
BHARTI IN 4,51,293 19.1% 8.8% 2,45,966 24.1% 12.6% 76,866 117.4% 35.4% 72,356 181.3% 62.7%
Source: Company, PL *Hyperlink on Bloomberg Code

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 India Strategy

Travel & Tourism

Conviction Picks: ▪ Luggage: VIP reported mixed performance with a revenue miss, while
operating performance was better than our estimate with EBITDA margin of
Interglobe Aviation 5.7% as other expenses were at a 7-quarter low of Rs1.5bn (down 18.3% YoY).
Chalet Hotels Warehousing & freight cost is undergoing a downward reset given the
liquidation of slow-moving SL inventory worth Rs2.2bn in 9MFY25. Once SL
Lemon Tree Hotels liquidation exercise is over in a quarter or two, capacity utilization at the
Bangladesh unit will also rise aiding profitability. We expect sales CAGR of 12%
over the next 2 years with EBITDA margin of 5.6%/15.6%/15.7% in
FY25E/FY26E/FY27E. Upgrade to BUY with a TP of Rs463 (30x FY27E EPS).

▪ Safari reported in-line performance with EBITDA margin of 11.4% as pricing

pressure persisted amid rising competition. We believe price pressure may
persist in the near term, given one leading player is undergoing inventory
liquidation and the e-com channel is becoming increasingly relevant to gain
market share. Nonetheless, Safari’s new Jaipur plant is now operational, and
progress on the utilization front will be key for growth and margin expansion.
Retain BUY with a TP of Rs2,783 (45x FY27E EPS).

▪ Hotels: Chalet Hotels reported healthy performance with EBITDA margin of

44.7% aided by 16.0% YoY growth in RevPAR to Rs9,090. In addition to
continuing momentum in RevPAR, near-term growth in the hospitality
segment will be driven by the operationalization of 125-130 rooms in
Bengaluru and ~65 rooms in Khandala over the next 6 months. Even annuity
business witnessed healthy traction as 0.4mn sq ft was leased out in 3QFY25.
We expect sales/EBITDA CAGR of 17%/20% over FY25E-FY27E. Upgrade to
BUY with an SoTP based TP of Rs1,064.

▪ Even Lemon Tree reported healthy operational performance led by 21%

growth in RevPAR to Rs5,018. We expect Lemon Tree’s performance to
improve led by stabilization of Aurika, MIAL, and improvement in RevPAR amid
the ongoing renovation exercise. Retain BUY on the stock with a TP of Rs175
(24x FY27E EBITDA).

▪ Aviation: IndiGo reported better-than-expected performance with FX-

adjusted EBITDAR margin of 33.4% led by lower fuel cost and stable pricing
environment. FX loss of Rs14.5bn impacted profits due to sharp rupee
depreciation; however, adjusting for the currency impact, PAT was at a record
level of Rs39.1bn. We expect the overall pricing environment to remain stable
with yield of Rs5.1/Rs5/Rs5 in FY25E/FY26E/FY27E, while the cost structure
problem will get resolved soon as AoG count reduces from ~60 to 40 by
FY26E. Plans to deepen international presence and focus on premiumization
can be additional margin levers. Upgrade to BUY with a TP of Rs5,246 (11x
FY26E EBITDAR).

▪ IRCTC: IRCTC’s operational performance was broadly in line with our estimate
with EBITDA margin of 34.0%. Internet ticketing EBIT margin was at a 7-
quarter high of 84.7%, presumably led by an improvement in yield (realization
per ticket was Rs20). As e-ticketing penetration has reached ~87%, we expect
non-convenience pie to drive revenue growth in the internet ticketing
division. As for Rail Neer, addition of 3 new plants will provide the growth fillip,
while the catering division has embedded optionality arising from 1) rising e-
catering volumes, 2) potential in non-railway catering and 3) launch of Vande
Bharat trains. We expect sales/PAT CAGR of 9%/8% over FY25E-FY27E and
retain HOLD on the stock with a TP of Rs809 (44x Sep’26E EPS).

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 India Strategy

Q3FY25 Result Snapshot

Sales EBITDA PBT Adj. Pat
(Rs mn)
Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr. Q3FY25 YoY gr. QoQ gr.
CHALET IN 4,578 22.5% 21.4% 2,047 23.3% 36.9% 1,184 33.5% 49.0% 965 36.7% -169.7%
INDIGO IN 2,21,107 13.7% 30.3% 59,371 9.0% 147.9% 25,271 -15.7% -378.6% 39,052 30.3% -623.4%
IRCTC IN 12,247 9.5% 15.1% 4,166 5.7% 11.7% 4,566 8.5% 9.6% 3,411 8.5% 10.8%
LEMONTRE IN 3,552 22.4% 24.9% 1,842 30.4% 40.9% 994 80.1% 120.4% 625 76.5% 110.8%
SII IN 4,427 14.0% -3.3% 504 -26.1% 5.2% 408 -27.9% 7.8% 311 -27.4% 5.0%
VIP IN 5,011 -8.3% -7.9% 286 -45.2% NA -167 -226.5% -66.1% -124 -273.7% -66.1%
Source: Company, PL *Hyperlink on Bloomberg Code

Conviction Picks Commentary

Name Commentary
IndiGo reported better-than-expected performance with FX-adjusted EBITDAR margin of 33.4% led by lower fuel cost and
stable pricing environment (yield was flat at Rs5.4 despite high base). We expect the overall pricing environment to remain
stable with yield of Rs5.1/Rs5/Rs5 in FY25E/FY26E/FY27E as the aviation market is now a duopoly with limited threat of
Interglobe Aviation
predatory pricing. On the other hand, we believe the cost structure problem will get resolved soon as the AoG count is
expected to reduce from ~60 to 40 by the start of FY26E. We expect sales CAGR of 16% over the next 2 years with EBITDAR
margin of 23.1%/23.3% in FY26E/FY27E. Upgrade to BUY with a TP of Rs5,246.
Chalet Hotels reported healthy performance in 3QFY25 with EBITDA margin of 44.7% aided by 16.0% growth in RevPAR.
Near-term growth in the hospitality segment will be driven by the operationalization of 125-130 rooms in Bengaluru and ~65
rooms in Khandala over the next 6 months. Pipeline for the long term is stronger with plans to add to ~840 rooms at Delhi,
Chalet Hotels
Navi Mumbai and Goa over the next 3 years. Traction in the annuity business is expected to pick up as the balance 0.8mn sq
ft is expected to be leased out in the next 2 quarters. We expect sales/EBITDA CAGR of 17%/20% over FY25E-FY27E and
upgrade the stock to BUY with a TP of Rs1,064.
Performance of Aurika, MIAL, improved significantly during the quarter with occupancy hovering in the early 70’s and an ARR
of Rs9,000 odd. Initial trends in 4QFY25E are even better and the management expects the hotel to stabilize by 2HFY26E,
Lemon Tree Hotels indicating further headroom for improvement in KPIs. Led by the stabilization of Aurika, MIAL, and improvement in RevPAR
amid the ongoing renovation exercise, which is expected to be completed by the end of FY26E, we estimate revenue/EBITDA
CAGR of 11%/15% over FY25E-FY27E. Retain BUY with a TP of Rs175.
Source: PL

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 India Strategy

PL’s Recommendation Nomenclature

Buy : > 15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly

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 India Strategy

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