India Equity Analytics Today:Buy Stock of Tata Steel Ltd, V-Guard Industries Ltd and Infosys

India Equity Analytics
Daily Fundamental Report on Indian Equities

IEA-Equity Strategy 14th Mar, 2014 Edition : 225
14th Mar 2014

AXIS BANK :

"BOOK PROFIT"

Recent rally in Axis Bank is fundamentally not justified but is the result of sentiment boost up lead by Modi effect. Opinion poll suggests BJP led NDA would come to power after the general election. NDA prime ministerial candidate Narendra Modi is perceived by foreign investor as a decisive and development making leader. Market participates have hope for revival in economy and business growth opportunity to start again. This would be result of diminishing NPA buffer and profitability boost up. We advice our clients to book part profit. ....................................................................................... ( Page : 2- 4)

Infosys: "Recovery delayed, but not denied"

"BUY"

14th Mar 2014

Addressing an Investor Con Call, Infosys management has expressed its cautious view on earnings outlook as well as clients spending for near term. They indicated that FY14E would be a year of lower earnings than NASSCOM guidance followed by FY13 and FY12. The company’s knee jerk has not associated with single factor; these are partly company specific and partly external factors. .......................................................................................................... ( Page : 5 - 6)

V-Guard Industries Ltd: "Colling Gun……..."

"BUY"

14th Mar 2014

On recent interview management expect a sales growth of around 10% in 4QFY14 on back of strong sales growth of 12-12.5% in January and February month of 2014. Last financial year for Q4 company had very low margins because of two reasons, higher ad spend and one-off items. As Vguard product portfolio consist of 65-70% summer facing in nature and we believe that the strong summer expectation in 2014 and low base of FY14 would lead a revenue growth of at least 18% in FY14E. ....................................................................... ( Page : 7-9)

TATA STEEL Ltd :

"BUY"

14th Mar 2014

At current market capitalization of Rs. 23444 Crores, the stock is trading at a forward P/B of just 0.9. Tata Steel is a blue chip stock and is available at a very cheap valuation. But if we look at its historical stock performance, in the past three years it had continued to trade between 0.6 to 1.9 P/B range.With the European crisis behind us, US economy getting stronger and better outlook for Indian economy on the expectation of stable government at the Center, We feel Tata Steel share price may have some more price appreciation left given the improvement in financial performance and Outlook. We recommend Buy on the stock at a medium term target price of Rs.401. ............................................................................ ( Page : 10-12)

Shakti Pumps (India) Ltd : "Turnarround Counter"

"BUY"

13th Mar 2014

The company was the first to get 5 star rating for energy efficiency for its products from BEE. In addition to submersible pumps, company also producing Vertical Multistage Centrifugal pumps, Pressure booster pumps, Open well pumps, End suction pumps etc. Recently company introduced pumps working with solar power. In next three years company incline to achieve sale revenue of Rs. 600 crore with the net margin of 9-10%. Company is planning to increase the Branch Network to 30 and Dealer network to 3 fold in coming few year. Further, Company have plans to register our presence in all BRICS, G20 and European Union and in other growing countries in coming years. On valuation front shakti pump is available at a single digit PE and EV/EBIDTA of 5.6x/4.1x and 4.7x/3.8x of its FY14E/15E estimates. In a volatile market, a company available at single digit valuations certainly looks up for grabs .................................................................... ( Page : 13-15)

HCLTECH :"Retain confidence"

"BUY"

12th Mar 2014

On performance front, it continues to be bullish on the rebid market and bullish on short-term to medium term, momentum on deals pipeline also looking robust. Considering the increasing discretionary spends across the geographies like US and Europe, we expect healthy earnings performance ahead. ...................................................................... ( Page : 16- 17 )

BANKBARODA

"BUY"

11th Mar 2014

On fundamental wise, we are not very impressed with bank but in recent market rally, PSB as well as private banks participated more than any sector likely due to outcome of exit poll for the coming election. We believe bank would rally more because of trading at lower side despite of index is running at all time high. But with this fundamental Bank of Baroda would trade in range of Rs.635 to Rs.700 depending upon sentiment as per our view. .................................................................... ( Page : 18-20)
Narnolia Securities Ltd,

AXIS BANK
Company Updated CMP Target Price Previous Target Price Upside Change from Previous Market Data BSE Code NSE Symbol
Mkt Capital (Rs Cr) Average Daily Volume Nifty
BOOK PART PROFIT

"BOOK PART PROFIT "
14th March, 2014

1385 1340 1220 -3 10

532215 AXISBANK 64823 26.18 cr 6493

In last one month, Axis Bank has outperformed Bank Nifty and CNX Nifty by 6% and 18% respectively and is now trading at more than 1.7 times of FY14E book value which is above of our upper side of valuation band. We value bank in the range of 1.5 to 1.7 times of book lower than its peers group largely due to some exposure in stress sector specially in infra and power companies where slippage risk are relatively high. We value bank in the range of Rs.1220 to Rs.1340 per share that implying book value multiple of 1.5 to 1.7 based on current fundamental and return ratios. The rise of stock price is supported by opinion poll result which suggests BJP led NDA would come in power. NDA prime ministry candidate Narendra Modi is perceived by foreign investor as a decisive and development making leader and would rescue economy. Domestic equity market boost-up by economy revival sentiment We believe market sentiment in recent days are boosted up on the hope that BJP led NDA would come to power after the general election and revive economy. The domestic equity market is supported by opinion poll result which suggests BJP led NDA coming to power after the forthcoming election. Over the last few months, the estimated numbers of seat, the NDA may win has increased from 165-175 to 220230 seats. The prime ministerial candidate of NPA Narendra Modi is known for his development in Gujarat. Domestic as well as foreign investors are in hope that Indian economy would come at track and business opportunity would start again. Banking

Stock Performance 1M Absolute 25.2 Rel.to Nifty 17.9

1yr -1.9 -11.1

YTD -1.9 -11.1

Share Holding Pattern-%
Promoters FII DII Others 33.9 43.2 9.7 13.2 33.9 43.4 4.9 17.8 33.9 40.7 8.8 16.6

Axis Bank Vs Nifty

stocks are rallied more than other sectors in hoping of reducing fresh NPA creation. Key positive trigger Axis bank’s low cost deposits CASA has grown faster than peers like ICICI bank and is stable at 43% at the end of 3QFY14. Bank’s management expects it to reach at 46% in FY15E which would help to keep cost of deposits under control and hence margin expansion. In loan growth parameter, Axis bank expects loan growth higher than industry growth by 2%. Incremental loan growth would come from SME and retail sector while corporate loan book is expected to remain sluggish. Bank’s capital adequacy ratio is close to 17% in which tier -1 capital of 12.5% much healthier than peers indicating no need to raise money for long tenure in near term. ROA at pre provisioning profit is at 3% indicating strong capability to delivered profit once asset quality issue resolve. Key negative trigger Stress loan (GNPA+ Restructure asset) is remained at 3.7% of advances but it might go up as bank has significant exposure in power (5.54%) and Infrastructure (7.33%) where slippage risk is relatively high in present economy scenario. Provision coverage ratio reported by bank is 78% with technical write off which would provides some cushion on earnings. Axis bank still have 46% of loan exposure in large corporate where profitability uncertain due to ongoing recession. Therefore on asset quality front, bank would still have to face tough time as per our view. Rs, Cr Financials 2011 2012 2013 2014E 2015E NII 6566 8026 9666 12224 14775 Total Income 11238 13513 16217 19146 21697 PPP 6377 7413 9303 11206 12367 Net Profit 3340 4224 5179 5826 6934 EPS 81.4 102.2 110.7 124.2 148.2 (Source: Company/Eastwind) 2 Narnolia Securities Ltd,

AXIS BANK
Quarterly Result

Quarterly Result Interest/discount on advances / bills Income on investments Interest on balances with Reserve Bank of India Others Total Interest Income Others Income Total Income Interest Expended NII Other Income Total Income Employee Other Expenses Operating Expenses PPP( Rs Cr) Provisions PBT Tax Net Profit Balance Sheet Date Net Worth Deposits Loan Asset qualtiy( Rs Cr) GNPA NPA %GNPA %NPA

3QFY14 5557 2110 49 73 7789 1644 4628 4805 2984 1644 4628 655 1358 2013 2615 202 2413 808 1604

2QFY14 5394 2143 35 37 7609 1766 4703 4672 2937 1766 4703 644 1309 1953 2750 687 2062 700 1362

3QFY13 % YoY Gr % QoQ Gr 3QFY14E Variation 4907 13.3 3.0 5748 3.4 2014 4.8 -1.5 2235 5.9 25 97.7 39.4 35 -29.2 19 277.1 95.6 38 -47.4 6965 11.8 2.4 8056 3.4 1615 1.8 -6.9 1774 7.9 4110 12.6 -1.6 4780 3.3 4470 7.5 2.8 5049 5.1 2495 19.6 1.6 3006 0.8 1615 1.8 -6.9 1774 7.9 4110 12.6 -1.6 4780 3.3 615 6.5 1.7 0 1134 19.8 3.8 0 1749 15.1 3.1 2008 -0.3 2362 10.7 -4.9 2772 6.0 387 -47.7 -70.5 752 271.4 1975 22.2 17.0 2020 -16.3 628 28.8 15.5 687 -15.0 1347 19.1 17.7 1333 -16.9

37649 36224 27027 262398 255365 244501 211467 201303 179504

39.3 7.3 17.8

3.9 2.8 5.0

37558 272935 214892

-0.2 4.0 1.6

3008 1003 1.4 0.5

2734 838 1.4 0.4

2275 679 1.3 0.4

32.2 47.8

10.0 19.7

-

Source: Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

3

AXIS BANK
FINANCIALS & ASSUPTION

Income Statement
Interest Income Interest Expense NII Change (%) Non Interest Income Total Income Change (%) Operating Expenses Pre Provision Profits Change (%) Provisions PBT PAT Change (%)

2011
15155 8589 6566 31.2 4671 11238 25.3 4860 6377 22.4 3033 3345 3340 34.8

2012
21995 13969 8026 22.2 5487 13513 20.2 6100 7413 16.2 3189 4224 4224 26.5

2013
27183 17516 9666 20.4 6551 16217 20.0 6914 9303 25.5 4124 5179 5179 22.6

2014E
31198 18974 12224 26.5 6922 19146 18.1 7940 11206 20.5 2402 8804 5826 12.5

2015E
38490 23716 14775 20.9 6922 21697 13.3 9330 12367 10.4 2461 9906 6934 19.0

Balance Sheet
Deposits( Rs Cr) Change (%) of which CASA Dep Change (%) Borrowings( Rs Cr) Investments( Rs Cr) Loans( Rs Cr) Change (%) 189166 34 77758 18 26268 71788 142408 36 219988 16 91412 18 34072 92921 169760 19 252614 15 112100 23 43951 113738 196966 16 290506 15 124917 11 51266 129873 228481 16 334081 15 143655 15 58956 149354 265037 16

Valuation Book Value CMP P/BV

460 1404 3.1

549 1146 2.1

708 1304 1.8

813 1174 1.4

942 1174 1.2

Source: Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

4

Infosys
"Recovery delayed, but not denied"
Company update
CMP Target Price Previous Target Price Upside Change from Previous

"BUY"
14th March' 14

BUY
3358 3760 3910 12% -4%

Market Data
BSE Code NSE Symbol 52wk Range H/L Mkt Capital (Rs Crores) Average Daily Volume Nifty 500209 INFY 3847/2190 192799 1240448 6493

Stock Performance
Absolute Rel. to Nifty 1M 4.5 0.8 1yr 30.4 21.6 YTD 53.1 49.4

A gloomy outlook by Infosys; however, the best is yet to come. Addressing an Investor Con Call, Infosys management has expressed its cautious view on earnings outlook as well as clients spending for near term. They indicated that FY14E would be a year of lower earnings than NASSCOM guidance followed by FY13 and FY12. The company’s knee jerk has not associated with single factor; these are partly company specific and partly external factors. We expect, this adverse scenario would impact its earnings growth for next couple of quarters. Key facts from Investors Con Call ■ The company might only be able to meet the lower end of its annual revenue growth guidance of 11.5-12% for FY14E, and they are expecting weakness in client spending throughout the current quarter (4QFY14E). ■ Slowdown in client sentiment in 4QFY14E could be remain continue in the next couple of the quarters of the next financial year. We expect that 1HFY15E could be a part of worrisome. Reasons behind the weak outlooks: (1) Poor response from Retail and CPG verticals: In the retail segment (contributes 25% of sales) a sluggish sales over the last 2 months, severe winter, and aggressive discounts by retailers have led to lesser profitability. In addition, this has led to capping of additional spending in CY14. Some retail clients have specific issues leading to categorization of spends. We expect this is not specific for Infosys, it could be viral for the Industry growth. (2) Portfolio related concern in Manufacturing: Recently, Manufacturing segment (contributes 22% of sales) has adversely impacted by the reduced PC sales and capex spending in networking and this will have an impact on revenue growth in this segment. Revenue contribution from manufacturing segments stands larger than other peers. (3) Challenges with skill mis-matches: Infosys CEO anticipated order cancellation from some of its clients because of its skill mis-match issue. Infosys has also seen some challenges with skill mis-matches between client’s needs and what company could have provided; this has led to slowdown in ramp-ups. Impact on Estimates: We expect that the recent developments of Infosys could adversely impact our sales guidance by 2-3% and earnings growth guidance by 3-4% for FY15E. We downgrade our revenue growth guidance from 16.5% to 13.7%. View and Valuation: Infosys seems to be on its way to rediscovering its past mojo with revenue momentum kicking, and the NRN invisible hand in play. Further announcement of strategic acquisitions, better utilization of cash balances, better deal win, consistent client traction and revenue momentum would help the company to bridge the gap with rivals such as TCS. At a CMP of Rs 3358, it trades at 16x FY15E earnings. We retain our “BUY” view on the stock with a target price of target price of Rs 3760 (revised from 3910).

Share Holding Pattern-%
Promoters FII DII Others Current 15.94 40.65 15.35 28.06 2QFY14 1QFY14 15.94 16.04 39.93 39.55 16.16 18.28 27.97 26.13

1 year forward P/E

Financials
Revenue EBITDA PAT EBITDA Margin PAT Margin 3QFY14 13026 3258.9 2874.9 25.0% 22.1% 2QFY14 12965 2836.9 2406.9 21.9% 18.6%

(QoQ)-% 0.47 14.88 19.44 310bps 350bps

3QFY13 10424 2677 2369 25.7% 22.7%

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

Rs, Crore (YoY)-% 25.0 21.7 21.4 (70bps) (60bps) 5

Infosys.
Why the best is yet to come? Recent weak guidance given by Infosys management is not an episode of close out. The company is working on various strategies to rediscovering its past sparkle days with revenue momentum kicking. Already, company has initiated to work closely with clients and focused on building relationship for deal intake. To maintain margin stability and increase productivity, company is working efficiently on cost optimization initiative. However, the management indicated that early signs of sales effectiveness initiative would start showing from 1HFY15E. We believe that strong demand environment across the industry would offer Infosys breathing space to tide over reorganization-related challenges. Its strategies on sales effectiveness and cost optimization initiative could turn the growth story as before. Now, we are waiting for next earning outlook and guidance by management for FY15E.

Financials
Rs in Cr,
Sa l es , INR Empl oyee Cos t Other expens es Total Expens es EBITDA Depreci ati on Other Income EBIT Interes t Cos t PBT Tax PAT Growth-% Sa l es EBITDA PAT Margin -% EBITDA EBIT PAT Expenses on Sales-% Empl oyee Cos t Other expens es Tax rate Valuation CMP No of Share NW EPS BVPS RoE-% Di vi den Payout rati o P/BV P/E 2615.1 57.4 23049.0 109.1 401.7 27.2% 25.1% 6.5 24.0 2765.1 57.4 25976.0 119.0 452.4 26.3% 45.9% 6.1 23.2 2865.0 57.4 31332.0 145.1 545.6 26.6% 24.0% 5.3 19.7 2400.0 57.4 37994.0 164.2 661.7 24.8% 45.1% 3.6 14.6 3358.0 57.4 45642.7 188.2 794.9 23.7% 22.9% 3358.0 57.4 54345.7 210.1 946.5 22.2% 20.6% 53.1% 12.3% 21.2% 54.0% 13.4% 26.7% 54.4% 13.8% 28.8% 55.9% 15.5% 26.3% 56.5% 16.0% 28.0% 56.5% 16.5% 28.0% 34.6% 34.9% 27.5% 32.6% 33.9% 24.9% 31.8% 34.7% 24.7% 28.6% 31.7% 23.4% 27.5% 29.9% 21.5% 27.0% 29.3% 21.1% 4.8% 9.3% 4.6% 20.9% 14.0% 9.2% 22.7% 19.6% 21.9% 19.6% 7.6% 13.2% 24.4% 19.7% 14.6% 13.9% 11.9% 11.6%

FY10
22742 12085 2792 14877 7865 905 982 7942 0 7942 1681 6261

FY11
27501 14856 3677 18533 8968 854 1211 9325 0 9325 2490 6835

FY12
33734 18340 4671 23011 10723 928 1904 11699 0 11699 3367 8332

FY13
40352 22565 6254 28819 11533 1099 2365 12799 0 12799 3370 9429

FY14E
50217.7 28373.0 8034.8 36407.8 13809.9 1367.7 2566.1 15008.3 0.0 15008.3 4202.3 10806.0

FY15E
57222.3 32330.6 9441.7 41772.3 15450.0 1558.5 2861.1 16752.7 0.0 16752.7 4690.7 12061.9

4.2 3.5 (Source: Company/Eastwind) 17.8 16.0

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

6

VCompany update
CMP Target Price Previous Target Price Upside Change from Previous

V-Guard Industries Ltd.
"Colling Gun……..."
Buy
453 525 475 14% 10%

"Buy"
4th Mar' 14

Key Points :
• On recent interview management expect a sales growth of around 10% in 4QFY14 on back of strong sales growth of 12-12.5% in January and February month of 2014. • Last financial year for Q4 company had very low margins because of two reasons, higher ad spend and one-off items. From that level, we expect there would been improvement this quarter and margin would be somewhere around 8.51%. • Company expect the ad spends in the current quarter are likely to be Rs. 11-12 crore (2.85% of expected revenue in 4QFY14E), compared to 14 crore (3.7% of 4QFY13 revenue) which should in our view aid in the margin expansion in current quarter. • The El Niño visibility in 2014 would be the another factor for the revenue growth of companies like Vgaurd. As Vguard product portfolio consist of 65-70% summer facing in nature and we believe that the strong summer expectation in 2014 and low base of FY14 would lead a revenue growth of at least 18% in FY14E. Forecast updates strengthen El Nino fears • In its update on Thursday, the Australian Bureau of Meteorology said factors that lead to an El Nino were now increasingly visible. "The tropical Pacific Ocean subsurface has warmed substantially over the past few weeks • Indian Met officials are treating the reports with caution, saying that though chances of an El Nino developing around mid-2014 are growing, predictions made at this stage suffer from low accuracy. • US agency NOAA's Climate Prediction Center, which updated its forecast on Wednesday, said temperature anomalies associated with El Nino had strongly increased since the end of January. Further, NOAA said there was a 50% chance of El Nino developing during the summer or autumn this year.

Market Data
BSE Code NSE Symbol 52wk Range H/L Mkt Capital (Rs Crores) Average Daily Volume Nifty 532953 V-GUARD 390/570 1,349 59,460 6,493

Stock Performance-%
Absolute Rel. to Nifty 1M (4.5) (5.6) 1yr (9.0) (13.6) YTD 5.0 (6.7)

Share Holding Pattern-%
Promoters FII DII Others 3QFY14 65.5 18.5 2.2 13.8 2QFY14 65.5 17.4 2.5 14.5 1QFY14 65.5 14.5 3.5 16.4

1 yr Forward P/B

About El Nino El Nino — 'the boy' in Spanish — is an unusual warming of sea surface waters in eastern and central equatorial Pacific associated with changes in wind patterns that impact weather in many parts of the world. It generally has an adverse effect on the Indian monsoon.
(Source: Times of India/ Eastwind Research)

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

7

V-Guard Industries Ltd.
Strong Balance Sheet •Total Debt has been reduced significantly as on 3Q FY14 to Rs. 117.7 crore, compared to Rs. 157 crore as on 3Q FY13. Working capital loan reduced to Rs. 77.1 vrore from 134.0 crore and whereas term loan icreased to Rs. 40.6 crore from 22.9 crore. • Working capital cycle on a TTM basis improves by 9 days to 76 days. Mainly Led by 15 days reduction in debtors. Management has also guided for improvement in net working capital cycle by 5- 10 days every year going forward. This will further improve its ROCE and ROE going forward. • Strong cash generation in 9M. FY14 Cash from operations at Rs. 90 crore in 9M FY14 as compared to Rs. 14.5 crore for full year FY13

Revenue Q-o-Q

Business segments, market size and existing competition in segment
Industry Size V-Guard (crore) (Share FY13)
Sta bi l i s ers PVC Ca bl es LT Power Ca bl es Motor Pumps Wa ter Hea ters Fa ns UPS Di gi ta l UPS Sol a r Wa ter Hea ter 2100 7000 6000 2000 800 5000 3500 5500 300 201 289 64 152 72 57 42 73 26

Production Model
100% In-Hous e 100% In-Hous e 90% Outs ourced 90% Outs ourced 90% Outs ourced Ha vel l s , Fi nol ex Ha vel l s , Fi nol ex

Key Players

100% Outs ourced Bl uebi rd, Ca pri , Logi cs ta t, Premi um, everes t

Crompton Grea ves , Ki rl os ka r, CRI, Texmo A.O.Smi th,Ra col d,Ba ja j,Venus ,Crompton Crompton,Ba ja j El ectri ca l s ,Ha vel l s , Ori ent

(Source: Company/ Eastwind Research)

100% Outs ourced Numeri c,APC,Emers on 100% Outs ourced Mi crotek, Lumi nous , Su-Ka m 100% In-Hous e Ta ta BP-Sol a r

EBITDA % and PAT % Q-o-Q

(Source: Company/ Eastwind Research)

Outlook / Valuation • We expect margin to expand in 4QFY14E on back of lowered ad spends and non hoping of oneoff items which hit the p/l in past year of same quarter. However we restrict our EBITDA expectation for FY14E to 8.9% against management guidance of 9-9.5% due to significant reduction in copper prices both in dollar terms as well as in rupee terms as company value its inventory on mark-to-market basis but apart from that there are no other issues we could see. • The El Niño visibility in 2014 would be the another factor for the revenue growth of companies like Vgaurd. As Vguard product portfolio consist of 65-70% summer facing in nature and we believe that the strong summer expectation in 2014 and low base of FY14 would lead a revenue growth of at least 18% in FY14E. • At the current CMP of Rs. 452, the stock is trading at a PE of 17.0x and 13.4x of FY14E and FY15E. The company can post RoE of 24.0% and 24.1% & EPS of Rs. 26.4 and Rs. 33.6 FY14E and FY15E. We believe that from current level the growth would pick pace expected acceleration of growth momentum, given the strong outlook of summer going forward. We revised our rating to “Buy” from “Hold” with a revised price target of Rs. 525.

(Source: Company/ Eastwind Research)

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

8

V-Guard Industries Ltd.
Key financials
PARTICULAR Performance Revenue Other Income Total Income EBITDA EBIT DEPRICIATION INTREST COST PBT TAX Extra Oridiniary Items Reported PAT Dividend (INR) DPS EPS Yeild % EBITDA % NPM % Earning Yeild % Dividend Yeild % ROE % ROCE% Position Net Worth Total Debt Capital Employed No of Share (Adj) CMP Valuation Book Value P/B Int/Coverage P/E 47.4 1.9 8.4 10.4 57.6 2.9 5.7 12.9 70.6 2.6 4.9 10.9 87.6 5.0 4.9 20.7 109.9 4.1 5.6 17.1 139.5 3.2 9.4 13.5 141 81 222 3 89 172 139 311 3 168 211 109 320 3 186 261 165 427 3 435 328 125 453 3 452 416 115 531 3 452 11.1% 5.6% 9.6% 4.0% 18.0% 13.8% 10.1% 5.4% 7.8% 2.4% 22.7% 16.2% 9.4% 5.1% 9.2% 2.2% 24.1% 21.2% 8.1% 4.6% 4.8% 0.9% 24.1% 19.4% 8.9% 5.2% 5.8% 0.9% 24.0% 22.1% 9.0% 5.7% 7.4% 0.9% 24.1% 21.7% 454 1 456 50 43 7 5 40 14 NA 25 10 3.5 8.5 727 2 728 73 65 8 11 55 16 NA 39 12 4.1 13.1 994 2 996 94 84 10 17 69 18 NA 51 12 4.1 17.0 1360 4 1364 110 99 11 20 82 19 NA 63 12 4.1 21.1 1523 5 1528 136 119 12 21 102 27 NA 79 12 4.1 26.4 1752 6 1758 158 141 15 15 132 33 NA 100 12 4.0 33.6 2010A 2011A 2012A 2013A 2014E 2015E

(Source: Company/ Eastwind Research)

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

9

TATA STEEL Ltd.
Result Update
CMP Target Price Previous Target Price Upside Change from Previous

"BUY"
14th March' 14

BUY
336 401 440 19% -9%

Tata Steel is a blue chip stock and is available at a very cheap valuation. With the European crisis behind us, US economy getting stronger and better outlook for Indian economy on the expectation of stable government at the Center, We feel Tata Steel may have price appreciation. valuing the financial performance We recommend Buy on the stock at a medium term target price of Rs.401. The consolidated EBITDA of Tata Steel came in at Rs. 4006.5 crore (EBITDA margin of 10.9%) , primarily on the back of operational efficiencies realized at its European division while the ensuing consolidated PAT came in at Rs. 503.2 crore. The company incurred capex to the tune of Rs.3900 crore in Q3FY14 and Rs.12300 crore in 9MFY14 wherein majority of capex has been incurred for Kalinganagar project. Tata Steel reported a good set of Q3FY14 numbers, and positively surprised by the EBITDA/tonne of Tata Steel Europe (TSE). The company reported a consolidated net income from operations of Rs. 36735.8 crore for the quarter, higher by 0.2% QoQ and 14.4% YoY.In Q3FY14, Tata Steel India’s Steel deliveries stood at 2.1 MT while TSE deliveries stood at 3.2 MT and South East Asia at 1.09MT. In Q3FY14, TSI reported EBITDA of Rs.2936 crore while TSE reported an EBITDA of Rs.860 crore. On a consolidated basis, consolidated steel sales stood at 6.4 MT. EBITDA/tonne of Indian operations came in at Rs. 14183/tonne while that of European operations came in at US$ 43/tonne

Market Data
BSE Code NSE Symbol 52wk Range H/L Mkt Capital (Rs Crores) Average Daily Volume (Nos.) Nifty 500470 TATASTEEL 435/195 32710 22897 6493

Stock Performance-%
Absolute Rel. to Nifty 1M -9.3 -16.4 1yr -4.5 -14.7 YTD -3.0 -14.2

Share Holding Pattern-%
3QFY14 Promoters FII DII Others 31.4 16.1 25.4 27.2 2QFY14 1QFY14 31.4 13.6 26.1 29.0 31.4 13.2 26.3 29.2

1 yr Forward P/B

Source - Comapany/EastWind Research

Critical Debt Level On the back of a consistent operational improvement at the company’s European operations We are positive on the stock in long run .However, on the back of ongoing capacity expansion, the gross debt is expected to increase from 66074 crore (FY13) to 76919 crore (FY14E) and 77543 crore (FY15E). Odisha Project could provide further upside in long-term: The Company aims to make value added steel products at the new facility in Odisha (3mtpa) where the blended realizations could be potentially higher than existing products by 2015. We believe timely clearance for expansion of iron ore mine is critical for the plant. The company's Odisha plant is highly automated and will require fewer employees/ton compared to its Jamshedpur facility. In our view, unlike Karnataka and Goa, Odisha is very critical for the Indian steel industry. We estimate Odisha iron ore production in FY13 stood at 62MT (accounting for ~45% of India’s production). Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY14 Net Revenue 36736 14.4 0.2 32107 36645 Depriciation 1522 4.0 5.4 1463 1444 Interest Cost 1108 7.3 3.9 1032 1067 EBIDTA% 10.9 290bps 80bps 7.0 10.1 OPM% 6.8 430bps 70bps 2.4 6.1 NPM% 1.4 370bps (110bps) -2.3 2.5
(In Crs)

Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

10

TATA STEEL
Business Outlook TATA Steel India The ministry of coal deallocated two of TATA coal blocks at pachmo and Kotre Basantpur. Tata steel appealed in the high court for this concern and waiting for the hearing of high courts hearing on 26th march. Sentiment has improved; though sectors like construction and auto continue to be under pressure. Rupee depreciation is helping to restore balance in the market Tata Steel Europe Liquid steel production improved further 1% QoQ to 3.91m tons. Sales volumes however declined 8% QoQ (+5.6% YoY) to 3.19m tons due to seasonal factors leading to increase in inventories by 300kt to 2.6m tons. Operating leverage helping EBIDTA margin to improve.(EBIDTA /ton increased 72% to Rs.273.) EU steel demand expected to show signs of gradual recovery in Q4 (+3.3%) from a low base and could translate into a recovery in end user sectors in 2014. TSE will ramp up production from currently operating facilities. TSE expects to liquidate inventories in 4QFY14 leading to sales volumes surpassing production. South East Asia Operation Construction sector outlook remains positive in the region, hence showing a positive signal for steel. The political uncertainty still continues in Thailand with no clear solution at sight. However, the business is focusing on customer relationships and service levels to drive performance. Recommendation At current market capitalization of Rs. 23444 Crores, the stock is trading at a forward P/B of just 0.9. Tata Steel is a blue chip stock and is available at a very cheap valuation. But if we look at its historical stock performance, in the past three years it had continued to trade between 0.6 to 1.9 P/B range. After bottoming out in August 2013 at a stock price of just under Rs. 200, Tata Steel stock have more than doubled in the past few months. Since January 2014, the stock had corrected slightly but still it is available at a low P/B (very much closer to the lower end of its P/B range). With the European crisis behind us, US economy getting stronger and better outlook for Indian economy on the expectation of stable government at the Center, We feel Tata Steel share price may have some more price appreciation left given the improvement in financial performance and Outlook. We recommend Buy on the stock at a medium term target price of Rs.401.

Indian Turnover and Realization Indian Turnover and Realization Indian Turnover and Realization

Indian Steel Deliveries Indian Steel Deliveries

Europe Turnover and Realization

Europian Steel Deliveries

Southeast Asia Turnover and Realization

Southeast Asia Steel Deliveries
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11

TATA STEEL
Financials

Global Up & Downs China's industrial output rose 8.6% in the first two months of 2014 from a year earlier, the National Bureau of Statistics said on Thursday, missing market expectations for a 9.5% rise.

One year Stock Performance

One year LME Steel Price

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12

VCompany update
CMP Target Price Previous Target Price Upside Change from Previous

Shakti Pumps (India) Ltd.
"Turnarround Counter………..."
Buy
76 105 NA 38% 0%

"Buy"
13th Mar' 14

Key Points : • The company was the first to get 5 star rating for energy efficiency for its products from BEE. In addition to submersible pumps, company also producing Vertical Multistage Centrifugal pumps, Pressure booster pumps, Open well pumps, End suction pumps etc. Recently company introduced pumps working with solar power. • In next three years company incline to achieve sale revenue of Rs. 600 crore with the net margin of 9-10%. • Company is planning to increase the Branch Network to 30 and Dealer network to 3 fold in coming few year. Further, Company have plans to register our presence in all BRICS, G20 and European Union and in other growing countries in coming years. • On valuation front shakti pump is available at a single digit PE and EV/EBIDTA of 5.6x/4.1x and 4.7x/3.8x of its FY14E/15E estimates. In a volatile market, a company available at single digit valuations certainly looks up for grabs. • Pledging of shares by promoters is the only reason for some concern.But ,since its financial performance is improving quarter over quarter ,I don’t expect much issues from this angle.Moreover pledge is not with any NBFC but with one of its bankers - Axis Bank.

Market Data
BSE Code NSE Symbol 52wk Range H/L Mkt Capital (Rs Crores) Average Daily Volume Nifty 531431 SHAKTIPUMP 38/88 116 13,645 6,518

Stock Performance-%
Absolute Rel. to Nifty 1M 1.5 (6.0) 1yr 44.2 31.5 YTD 72.4 57.8

Share Holding Pattern-%
Promoters FII DII Others 3QFY14 45.0 0.0 9.9 45.2 2QFY14 1QFY14 44.9 44.9 0.0 0.0 10.5 10.5 44.7 44.7

1 yr Forward P/B

Company Profile Shakti is a manufacturer of stainless steel submersible pumps and motors ranging from 0.5 HP to 255 HP used in domestic, industrial, irrigation, and fire-fighting and located at Pithampur Madhya Pradesh. Company is the first five star rated pump manufacturer in India. In addition to submersible pumps ,company also producing Vertical Multistage Centrifugal pumps, Pressure booster pumps, Open well pumps, End suction pumps. The company is mainly focused on the export market and sup-plies its products to around 50 countries, such as US, UK, Turkey, Spain, Netherlands, Germany, France, Italy, Australia, Sri Lanka, etc. Nearly 58 per cent of its revenues are from exports. Of the balance 42 per cent of domestic revenues, 60 per cent come from supply to farmers, 20 per cent from domestic demand, 12 per cent from government institutions, and the balance 8 per cent from various industrial sectors. Industry Structure and Development The Indian pump industry is estimated to be Rs. 8000 crores in 2012-13. It is likely to grow at 8% and expected to reach Rs. 18000 crores by 2017-18. The market demand is driven by infrastructure based spending, urbanisation, growth in manufacturing activity, refurbishment & upgradation and overall increase in the population, insufficient rains and falling water tables have led to demand for improvement in hydraulics and pump efficiency. The rising cost of oil has positively influenced the demand for energy conservative pumps and pumps driven by renewable energy sources. There will be strong demand for pumps from developing countries like China and India due to industrialisation and investment in water and power segments. The developed nations propose to repair and upgrade their old water infrastructure. This will lead to good replacement demand for pumps in developed countries.

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13

Shakti Pumps (India) Ltd.
Reasons of laggard performance : Having said that, there are reasons we believe this scrip may not perform as per the expectations on the bourses. First and foremost, one should note that Shakti is in a business domain that has low entry barriers and the products can be easily manufactured. Currently, Shakti manufactures only steel sub-mersible pumps and though it posi- tions itself as an energy-efficient pump manufacturer, there are other players too who manufacture such energy-effi-cient pumps. However, the company is increas-ing its product line by adding boost-er pumps, mono-block, and open well pumps to its portfolio. “Shakti is installing a new 65,000 unit per annum capacity for booster pumps at a cost of Rs 35 crore, which is being funded through a combination of debt (Rs 25 crore) and internal accruals (Rs 10 crore). This expansion is expected to come on stream and start generat-ing revenues in coming periods Outlook : It is one of the fastest growing companies from this sector .From Rs.41 Cr sales in 2006 it reached a top line of Rs.210 Cr in 2013. Its export thrust and improvement in India’s rural economy is expected to drive further growth .Company is targeting a turnover of Rs.600 Cr in next three years. To drive its domestic growth, Shakti has already strength-ened its marketing team and domestic dealer network to 650 from 192 just two years back. Though this renewed focus should help generate revenues for Shakti, the new product portfolio isn’t a unique one and is already manufactured across the country. Thus Shakti seems to be a late entrant in these products and therefore one will have to wait and watch the kind of growth it posts in these segments. Besides, there is a huge unorganised market on the domestic front which firstly eats into the market share (according to the management, Shakti’s market share is 3 per cent in the overall pump industry i.e. includ-ing the unorganised market) and sec-ondly, it reduces the pricing power of the organised players, thus impacting realisations and margins. However, Most Governments are insisting on the use of Star-rated pumps wherever it is subsidising their purchase on account of higher energy efficiency. With labour getting scare and expensive, there is a greater preference among agriculturist to work with branded models that promise a higher uptime, circumventing the need to invest in submersible pump extraction, repair or replacement. The result is that the market share of the country’s unorganised sector has steadily declined from 95% to 80%; the performance of the organised sector growth over the unorganised provides the industry optimism. Valuation : At current price of Rs. 75, the stock is trading at P/E of 5.5 x for FY14E and 5.0 x the FY15E. Escorts could post EPS of Rs. 13.6 for FY14E and Rs. 18.7 for FY15E. Considering management’s aggressive expansion in production capacity and marketing network, I believe company can deliver good growth in coming years. Further, we expect the company to benefit immensely from the subdued steel prices currently. We expect the benefit to flow in for the next coming quarters as well. We recommend a "Buyrating on stock with price target of Rs. 105 Revenue Q-Q (In Crores)

(Source: Eastwind Research)

Operating Profit Q-Q (In Crores)

(Source: Eastwind Research)

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14

Shakti Pumps (India) Ltd.
Key financials :
PARTICULAR Performance Revenue Other Income Total Income EBITDA EBIT DEPRICIATION INTREST COST PBT TAX Reported PAT Dividend EPS DPS Yeild % EBITDA % NPM % Earning Yeild % Dividend Yeild % ROE % ROCE% Position Net Worth Total Debt Capital Employed No of Share CMP Valuation Book Value P/B Int/Coverage P/E
(Source: Eastwind Research)

2011A 9M

2012A

2013A

2014E

2015E

2016E

135 1 136 25 22 3 6 17 3 13 2 10.8 1.4

192 1 193 31 27 4 9 18 4 14 2 9.1 1.1

209 7 215 30 25 5 12 20 3 17 2 11.0 1.2

270 7 277 41 34 7 14 26 6 21 2 13.6 1.3

338 7 344 51 43 7 14 36 8 28 2 18.7 1.3

422 7 429 63 55 8 15 47 10 37 2 24.1 1.3

18.4% 9.9% 20.6% 2.6% 20.5% 9.2%

16.0% 7.2% 19.5% 2.4% 15.9% 8.2%

14.4% 7.8% 25.5% 2.7% 15.5% 8.8%

15.0% 7.5% 18.0% 1.7% 16.3% 10.0%

15.0% 8.3% 24.6% 1.7% 18.5% 12.2%

15.0% 8.6% 31.8% 1.7% 19.5% 13.7%

65 81 147 1 52

87 83 170 2 47

109 82 191 2 43

128 80 208 2 76

154 80 234 2 76

189 80 269 2 76

52.6 1.0 3.6 4.9

57.3 0.8 2.9 5.1

71.3 0.6 2.1 3.9

83.7 0.9 2.4 5.6

101.1 0.8 3.1 4.1

123.9 0.6 3.6 3.1
(Figures in crore)

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15

HCLTECH
"Retain confidence"
Company update
CMP Target Price Previous Target Price Upside Change from Previous

"BUY"
12th Mar' 14

Buy
1454 1650 1560 13% 5.8%

Market Data
BSE Code NSE Symbol 52wk Range H/L Mkt Capital (Rs Crores) Average Daily Volume Nifty 532281 HCLTECH 1589/674 101643 1193062 6512

Stock Performance
Absolute Rel. to Nifty 1M 2.6 -5 1yr 85.5 75.9 YTD 135 122.9

Share Holding Pattern-%
Promoters FII DII Others Current 61.75 28.05 4.20 6 1QFY14 4QFY13 61.84 61.92 26.01 24.45 5.70 6.49 6.45 7.14

1 year forward P/E

Key takeaways from recent Investors Conference in Mumbai: Trump Card on rebid Market: HCL Tech Management expressed its optimistic tone for rebid opportunity with a deal of $45bn for negotiation in CY14E. Most of rebid would be come from Infrastructures and traditional IT segments. Across the tier-1 IT space, HCL Tech will be most beneficiary because of large exposures in Infrastructures space (36% of sales). Visionary approach to changing market dynamics: Forward looking statement from the desk of BoD (Given on annual report 12-13) reveals 5 major strategies to compete market dynamics and company is focused for the same. 5 major technological changes are expected to open up new opportunities for service providers: (1) Smart Computing: Consulting Solution for next-generation IT infrastructure to maximize workforce. The aggregation and management of Cloud services is executed through HCL's proprietary MyCloud platform. (2) Software-as-a-Service (SaaS): software that is owned, delivered and managed remotely by one or more providers. (3) Social Technologies: Technology that facilitates social interactions and is enabled by a communications capability, such as the Internet or mobile device. (4) Mobility: Mobility offering services from mobile application development and integration to mobile application services, to fully managed mobility including provisioning, hosting, and end-user support. (5) Analytics: End-to-end life cycle of services including management and hosting of customer assets, consolidation and migration services, virtualization and design and management of green data centers. Looking for strategic partnership with CSC: HCLTech is looking an opportunity of strategic partnership to transform client’s services from legacy to cloud based technologies. As per IT based Gartner survey, clients are looking to retire, replace, and revise 80-85% of their applications over the next 2 years. The company expects to acquire and quantify of this opportunity with CSC (Nasdaq-listed IT services firm Computer Sciences Corporation, CSC). View and Valuation: HCL tech’s decent level of utilization, focused on cost control and utilization of new market opportunities through vendor’s consolidation would provide a new shape to the company in near future. On performance front, it continues to be bullish on the rebid market and bullish on short-term to medium term, momentum on deals pipeline also looking robust. Considering the increasing discretionary spends across the geographies like US and Europe, we expect healthy earnings performance ahead. At a CMP of Rs 1454, stock trades at 17.4x of FY14E earnings, We retain BUY on the stock and revised our target price from Rs 1560 to Rs1650. Financials 2QFY14 1QFY14 (QoQ)-% Revenue 8184 7961 2.8 EBITDA 2125 2093 1.5 PAT 1495 1416 5.6 EBITDA Margin 26.0% 26.3% (30bps) PAT Margin 18.3% 17.8% 50bps
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1QFY13 6273.8 1417 965 22.6% 15.4%

Rs, Crore (YoY)-% 30.4 50.0 54.9 340bps 290bps
16

(Source: Company/Eastwind)

HCLTECH
Healthy deal pipeline:
During the quarter, HCL Tech reported an addition of 15 transformational deals in the US and Europe for the December quarter. These wins have been in the momentum markets of manufacturing and Financial Services as well as the emerging momentum markets of life sciences & Healthcare and Public Services. Across the geographies, USA and Europe remain best to drive deal wins during the quarter because of healthy scenario of demand environment.

Financials;
Rs, Cr Net Sales-USD Net Sales Raw Materials Cost Employee Cost Operation and other expenses Total Expenses EBITDA Depreciation Other Income Extra Ordinery Items EBIT Interest Cost PBT Tax PAT Growth-% Sales-USD Sales EBITDA PAT Margin -% EBITDA EBIT PAT Expenses on Sales-% Employee Cost RM Cost Operation and other expenses Tax rate Valuation CMP No of Share NW EPS BVPS RoE-% Dividend Payout ratio P/BV P/E FY10 2704.6 12136.3 443.6 6253.7 3498.5 10195.7 1940.6 418.1 154.1 0.0 1522.5 204.1 1472.4 213.4 1259.0 24.1% 18.6% 5.9% -4.6% 16.0% 12.5% 10.4% 51.5% 3.7% 28.8% 14.5% 364.9 67.9 6288.8 18.5 92.6 20.0% 25.0% 3.9 19.7 FY11 3545.3 15730.3 522.1 8589.6 4163.2 13274.9 2455.4 459.7 299.7 0.0 1995.7 142.6 2152.8 488.5 1664.3 31.1% 29.6% 26.5% 32.2% 15.6% 12.7% 10.6% 54.6% 3.3% 26.5% 22.7% 493.5 68.9 7653.0 24.2 111.1 21.7% 31.5% 4.4 20.4 FY12 4151.5 20830.6 612.0 11104.6 5418.8 17135.3 3695.2 549.2 206.5 0.0 3146.0 142.6 3209.8 782.7 2427.1 17.1% 32.4% 50.5% 45.8% 17.7% 15.1% 11.7% 53.3% 2.9% 26.0% 24.4% 490.0 69.3 9837.9 35.0 141.9 24.7% 33.1% 3.5 14.0 FY13 4686.5 25581.1 959.3 12574.2 6386.4 19919.9 5661.2 636.8 306.6 44.5 5024.4 105.6 5269.9 1225.3 4044.6 12.9% 22.8% 53.2% 66.6% 22.1% 19.6% 15.8% 49.2% 3.8% 25.0% 23.3% 759.5 69.6 13164.0 58.1 189.1 30.7% 20.0% 4.0 13.1 FY14E 5464.6 32787.8 983.6 16066.0 7213.3 24262.9 8524.8 742.5 460.5 -491.8 7782.3 79.2 7671.8 1841.2 5830.5 16.6% 28.2% 50.6% 44.2% 26.0% 23.7% 17.8% 49.0% 3.0% 22.0% 24.0% 1454.0 69.6 17854.4 83.8 256.5 32.7% 19.6% 5.7 17.4 FY15E 6484.1 39229.0 1176.9 19418.3 8826.5 29421.7 9807.2 881.0 590.2 78.5 8926.2 59.4 9535.5 2336.2 7199.3 18.7% 19.6% 15.0% 23.5% 25.0% 22.8% 18.4% 49.5% 3.0% 22.5% 24.5% 1454.0 69.6 23913.5 103.4 343.5 30.1% 15.8% 4.2 14.1

(Source: Company/Eastwind)

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17

BANKBARODA
ANNUAL REPORT UPDATE

"ADD"
11h March. 2014

Result update CMP Target Price Previous Target Price Upside Change from Previous Market Data BSE Code NSE Symbol
52wk Range H/L Mkt Capital (Rs Cr) Average Daily Volume Nifty

ADD 651 700 624 8 12

532134 BANKBARODA 773/429 21627 18.25 Cr 6537

At the current price of Rs.651/share stock is trading at 0.77 times of FY14E book value which is now premium over its peer group. We value bank at the range of Rs.634 to Rs.790 implying valuation multiple of 0.75 to 0.9 times of one year forward book. But upper side of book value multiple would be possible only if the improvement of asset quality along with improving sign of fundamentals. But in its quarterly result, bank’s performance was muted all around except healthy loan and deposits growth. CASA growth was remained muted in compare to SBI and PNB. So cost of deposits is unlikely to soften in near term while asset quality was deteriorated higher in percentage as compare to PNB and SBI. In the following section we will discuss the fundamental improvement of bank during quarter. NII growth on the back of loan growth and margin expansion Bank’s NII grew by 7.6% YoY largely due to healthy loan growth and sequentially margin improvement of 5 bps. Margin improve came from domestic push from 2.85% to 2.95 while international NIM remained stable at 1.18%. Cost of fund declined by

Stock Performance 1M Absolute 16.6 Rel.to Nifty 8.7

1yr -8.3 -21.4

YTD -8.3 -21.4

Share Holding Pattern-% Current 4QFY13 3QFY1 3 Promoters 55.4 55.4 55.4 FII 15.5 15.5 15.3 DII 19.6 19.6 19.0 Others 9.5 9.5 10.3 BANKBARODA Vs Nifty

14 bps quarterly due to lower borrowings as a percentage of percentage of NDTL. Advance growth led by SME and retail Advances grew by 18% YoY largely came from SME and retail sector which grew by 39% and 21% YoY respectively. Bank continued to be cautions while expanding its exposure towards large corporate owing to economy recession. Deposits grew by 21.5% YoY, added by foreign currency non- resident deposits but CASA franchise remained flat at 26%. So in CASA front we are not impressed and going forward cost of fund is unlike to be soften in our view. Profit inflated due to lower provisions led by reversal of investment depreciation Provisions were lower by 11.5% YoY on account of reversal of investment depreciation to the tune of Rs.120 cr offset additional provision towards nonperforming assets. But bank’s stress loan (slippage + Restructure) loans were Rs.1275 cr which was almost in previous quarter. Lower provisions made 17% up PBT but at operating profit level, it was down by 2.6% YoY. Tax rate was higher due to creation of DTL as per advice by RBI. View & Valuation On fundamental wise, we are not very impressed with bank but in recent market rally, PSB as well as private banks participated more than any sector likely due to

outcome of exit poll for the coming election. We believe bank would rally more because of trading at lower side despite of index is running at all time high. But with this fundamental Bank of Baroda would trade in range of Rs.625 to Rs.700 depending upon sentiment as per our view.

Financials
NII Total Income PPP Net Profit EPS 2011 8802 11611 6982 4242 108.3 2012 10317 13739 8581 5007 121.8

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Rs, Cr 2013 2014E 2015E 11315 12218 14122 14946 16400 18304 8999 9206 10067 4481 4444 4819 106.4 105.5 114.4 (Source: Company/Eastwind) 18

BANKBARODA
Quarterly Result (Rs Cr) Interest/discount on advances / bills Income on investments Interest on balances with Reserve Bank of India Others Total Interest Income Others Income Total Income Interest Expended NII Other Income Total Income Employee Other Expenses Operating Expenses PPP( Rs Cr) Provisions Exceptional Items PBT Tax Net Profit 3QFY14 7061 2175 245 209 9691 932 10623 6634 3057 932 3989 1056 736 1792 2197 762 16 1436 372 1048 2QFY14 6832 2220 281 140 9473 974 10447 6579 2895 974 3869 1030 714 1744 2125 861 16 1264 80 1168 3QFY13 % YoY Gr 6485 8.9 1898 14.6 403 -39.2 58 258.2 8845 9.6 841 10.9 9686 9.7 6004 10.5 2841 7.6 841 10.9 3681 8.4 798 32.3 627 17.3 1426 25.7 2256 -2.6 1029 -26.0 12 25.0 1227 17.0 203 83.7 1012 3.6 % QoQ Gr 3QFY14E 3.3 7173 -2.0 2350 -12.8 397 50.1 173 2.3 10092 -4.3 1102 1.7 11194 0.8 6792 5.6 3300 -4.3 1102 3.1 4402 2.5 1189 3.1 792 2.7 1981 3.4 2421 -11.5 897 0.0 0 13.6 1524 364.7 457 -10.3 1067

Balance Sheet Date( Rs Cr) Equity Capital Reserve & Surplus Net Worth Total Deposits Borrowings Other liabilities and provisions Total Liability Cash in hand Cash and balances with RBI Total Investment Advances Fixed Assets Others Assets Total Assets

423 35232 35654 503772 29304 18638 587368 16742 87599 115210 352446 2562 12809 587368

423 35127 35549 484931 28558 13995 563033 15681 79980 111840 339855 2498 13179 563033

412 30966 31379 414733 27899 14552 488563 17147 58295 101848 299318 2399 9557 488563

2.5 13.8 13.6 21.5 5.0 28.1 20.2 -2.4 50.3 13.1 17.7 6.8 34.0 20.2

0.0 0.3 0.3 3.9 2.6 33.2 4.3 6.8 9.5 3.0 3.7 2.6 -2.8 4.3

Asset Quality GNPA( Rs Cr) NPA(Rs Cr) % GNPA % NPA % PCR (without technical writeoff)

11926 6624 3.4 1.9 44.5

10888 6316 3.2 1.9 42.0

7321 3363 2.4 1.1 54.1

Source: Eastwind/Company
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19

BANKBARODA
Income Statement
Interest Income Interest Expense NII Change (%) Non Interest Income Total Income Change (%) Operating Expenses Pre Provision Profits Change (%) Provisions PBT PAT Change (%)

2011
21886 13084 8802 48.2 2809 11611 32.8 4630 6982 41.5 1331 5650 4242 38.7

2012
29674 19357 10317 17.2 3422 13739 18.3 5159 8581 22.9 2555 6026 5007 18.0

2013
35197 23881 11315 9.7 3631 14946 8.8 5947 8999 4.9 4168 4831 4481 -10.5

2014E
39065 26847 12218 8.0 4182 16400 9.7 7194 9206 2.3 3559 5647 4444 -0.8

2015E
45206 31084 14122 15.6 4182 18304 11.6 8237 10067 9.4 4043 6024 4819 8.4

Balance Sheet
Deposits( Rs Cr) Change (%) of which CASA Dep Change (%) Borrowings( Rs Cr) Investments( Rs Cr) Loans( Rs Cr) Change (%) 305439 27 87589 23 22308 71261 228676 31 384871 26 103524 18 23573 83209 287377 26 473883 23 119981 16 26579 121394 328186 14 521272 10 135531 13 33273 122000 367568 12 573399 10 149084 10 36600 134200 404325 10

Ratio
Avg. Yield on loans Avg. Yield on Investments Avg. Cost of Deposit Avg. Cost of Borrowings 8.0 7.0 4.3 5.5 8.7 7.8 5.1 6.7 8.4 6.4 5.2 5.4 8.6 7.3 5.2 5.5 9.3 8 5.4 5.5

Valuation Book Value CMP P/BV

536 963 1.8

668 794 1.2

759 652 0.9

846 513 0.61

929 513 0.6

Source: Eastwind/Company
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20

N arnolia Securities Ltd
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Risk Disclosure & Disclaimer: This report/message is for the personal information of
the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any action based upon it. This report/message is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any from. The report/message is based upon publicly available information, findings of our research wing “East wind” & information that we consider reliable, but we do not represent that it is accurate or complete and we do not provide any express or implied warranty of any kind, and also these are subject to change without notice. The recipients of this report should rely on their own investigations, should use their own judgment for taking any investment decisions keeping in mind that past performance is not necessarily a guide to future performance & that the the value of any investment or income are subject to market and other risks. Further it will be safe to assume that NSL and /or its Group or associate Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise, individually or otherwise in the recommended/mentioned securities/mutual funds/ model funds and other investment products which may be added or disposed including & other mentioned in this report/message.