end of the week update - novadhruva pvt. ltd. · 2020/6/27 · 3 sectoral update 3.1 financial...

End of the Week Update

Weekly Dashboard

June 27, 2020

Contents

2

Section TitlePage

number

1 Our Views 3

2 Market Update 4

3 Sectoral Update

3.1 Financial Services 6

3.2 Technology, Telecom and Media 8

3.3 Pharma 10

3.4 Healthcare 11

3.5 Auto & Auto Components 12

3.6 Metals & Mining 13

3.7 Aviation 14

3.8 Power and Infrastructure 15

3.9 Consumer and Retail 17

3.10 Real Estate 19

NovaDhruva Team 20

Disclaimer: This presentation is for information and illustrative purpose only. This presentation should not be relied upon to take anydecisions, including investment decisions. Neither we nor any of our affiliates shall be liable for any damage, loss, injury, whetherdirect or indirect, that may be caused to you as a result of any investment made based on this presentation. This presentation isneither an offer to buy or sell or deal nor a solicitation of any offer to buy or sell or deal in securities, financial products, investments,etc. This information is neither addressed to nor should it be presented in any jurisdiction where such presentation will entail anyliability or requirement of registration or approval on us. Even though the information is drawn from reliable sources, we neitherguarantee nor assure the accuracy, completeness or authenticity of the information provided by us in this presentation. Informationcontained in this presentation is subject to change without any prior notice. The information provided in this presentation is notinvestment advice.

Our Views

3

Pre-insolvency resolution for a listed stressed company –bridging an important gap

The first comprehensive Indian bankruptcy law introduced in 2016, provided for several measures to facilitatequick resolution of stressed companies. It also provided concessions for listed companies from applicability ofSEBI requirements for pricing of preferential allotment and the provisions of open offer. However, oftenbankruptcy stage is too late for a company to revive as its operations and finances are already significantlyimpacted by this time. An effective pre-insolvency mechanism can prevent value erosion caused by disruption ofbusiness, de-clog the NCLTs, provide access and certainty to potential buyers, and, protect interests of allstakeholders by enabling quick resolution of companies before it is too late.

Businesses facing financial stress often require immediate infusion of capital to save themselves from beingreferred to bankruptcy. So far, one of the main challenges in capital infusion by a strategic investor into astressed listed company had been the SEBI guidelines imposing pricing restrictions on preferential allotment andthe requirement of open offer. Typically, a stressed listed company experiences progressive fall in their shareprice. Attracting capital at higher than the prevailing market price for such a company becomes an issue. Also,the requirement of making an open offer by a strategic buyer diverts funds to existing shareholders than to thecompany which requires immediate financial support.

In the past couple of years, we have had situations where inspite of adequate capital being available forinvestment, a stressed company had to file for bankruptcy as the investors were unable to meet theserequirements. In addition, the revised RBI framework for the resolution of Stressed Assets announced inFebruary 2018 further complicated the matters for stressed businesses. As per this framework, post a default, aperiod of only 180 days was allowed to restructure the stressed assets. Failing this, the company was mandatorilyrequired to be referred to IBC within 15 days. A time-bound activation of bankruptcy proceedings left very littletime for the borrowers to bring in a strategic/ financial investor.

The 2018 circular of RBI was struck down by the Hon. Supreme Court of India in 2019 thereafter RBI came outwith a new Framework for Resolution of Stressed Assets in June, 2019 which provided for a comprehensiveguidelines for resolution of stressed assets outside the IBC. Now there was a real opportunity for businesses torestructure outside the bankruptcy process.

In this backdrop, SEBI this week, has come out with certain relaxations in preferential allotment norms and openoffer obligations for stressed companies to help them raise capital from financial/strategic investors and possiblyclear the path for resolution before it goes under IBC.

SEBI has granted two key relaxations to companies with stressed assets- (a) easing of pricing guidelines forpreferential issue and (b) exemption from open offer obligations. The shares issued to the investors in such anissue need to be locked in for a period of three years. There are other checks and balances prescribed such asdisclosure of end use, barring the promoter and promoter group from participating in such an issue and therequirement of majority of minority shareholders’ approval. To avail such relaxations, the stressed companieswould need to comply with two of the three conditions laid out by SEBI – (i) disclosure of defaults in payment ofinterest or principal and continuing default for a period of at least 90 calendar days after the occurrence of suchdefault, (ii) downgrading of the credit rating of the financial instruments of the company to “D” and (iii) existenceof an inter-creditor agreement in terms of RBI (Prudential Framework for Resolution of Stressed Assets)Directions 2019.

RBI’s June 2019 guidelines and SEBI’s June 2020 announcement together bridge an important gap in thepossibility of a resolution plan outside IBC for a listed company.

18.7x, Nifty19.6x, Sensex

17.3x, Fin. Services

13.4x, Bank

31.6x, FMCG

23.8x, Pharma23.6x, Healthcare

17.6x, IT

28.4x, Auto

16.1x, Media

12.4x, Metals

22.6x, Realty

0.0x

10.0x

20.0x

30.0x

40.0x

26-Jun 07-Sep 19-Nov 31-Jan 13-Apr 26-Jun

0

500

1,000

1,500

2,000

60

80

100

120

140

26-Jun 07-Sep 19-Nov 31-Jan 13-Apr 26-Jun

0

500

1,000

1,500

2,000

60

80

100

120

01-Mar 24-Mar 16-Apr 10-May 02-Jun 26-Jun

Market Update

4

Key Market Trends

Return (%)Current

Level1D 1W 1M

Since 1

stMarch

3M 6M 1Y

Nifty 10,383 0.9% 1.4% 15.0% (7.3%) 19.9% (15.2%) (12.4%)

Sensex 35,171 0.9% 1.3% 14.9% (8.2%) 18.0% (15.4%) (11.2%)

Dow Jones 25,016 (2.8%) (3.3%) 0.1% (1.5%) 15.6% (12.7%) (5.7%)

Nasdaq 9,849 (2.5%) (1.6%) 4.9% 16.4% 29.8% 12.3% 29.1%

FTSE 6,159 0.2% (2.1%) 1.5% (6.4%) 11.8% (19.4%) (17.0%)

Nikkei 22,512 1.1% 0.1% 5.8% 6.5% 16.1% (5.6%) 6.8%

Hang Seng 24,550 (0.9%) (0.4%) 5.0% (6.0%) 4.5% (13.0%) (13.0%)

Source: Bloomberg as of June 26, 2020

Indian Sectoral Performance

Global and Indian Indices Performance

Rebased to 100 Last 1 Year Since 1st March

Return (%)Current

Level1D 1W 1M

Since 1

stMarch

3M 6M 1Y

Nifty Bank 21,592 0.4% 1.2% 23.8% (25.9%) 8.1% (33.4%) (30.7%)

Nifty Financial Services 10,588 0.0% 0.5% 22.1% (22.0%) 8.6% (27.9%) (21.8%)

Nifty FMCG 29,757 (1.2%) 3.6% 5.8% 1.5% 15.6% (1.3%) 0.8%

Nifty Pharma 10,138 (0.5%) 1.4% 6.9% 33.8% 48.8% 25.7% 25.4%

Nifty IT 14,995 4.0% 3.4% 10.5% (1.4%) 19.3% (5.0%) (6.9%)

Nifty Auto 6,731 (0.1%) 1.5% 15.0% (2.5%) 36.3% (18.0%) (14.6%)

Nifty Media 1,402 0.1% 1.0% 23.2% (16.1%) 32.9% (22.8%) (31.7%)

Nifty Metal 2,043 0.6% 2.3% 16.3% (9.0%) 31.4% (26.0%) (32.4%)

Nifty PSU Bank 1,503 0.9% 6.0% 37.9% (22.7%) 12.2% (41.5%) (52.8%)

Nifty Private Bank 11,855 0.6% 1.5% 24.6% (25.7%) 10.4% (33.7%) (31.3%)

Nifty Realty 211 (0.9%) (0.8%) 27.6% (24.7%) 14.1% (28.7%) (24.1%)

BSE Telecom 1,304 0.0% (0.7%) 4.4% 10.3% 32.4% 17.1% 31.5%

BSE Healthcare 16,490 (0.5%) 1.7% 7.0% 22.3% 41.8% 22.9% 28.1%

Rebased to 100

Nifty Sensex Dow Jones NASDAQ FTSE Nikkei Hang SengNIFTY Volume(RHS) -Mn

The Indian indices gained by c. 1.5%

this week led by global expectations

of an economic recovery despite a

sharp rise in the number of COVID

cases in the country

All the sectoral indices except realty

and telecom closed in the positive this

weekFMCG, IT and

metals were the best performers

while pharma, healthcare and

banks witnessed moderate gains as

well

Valuations for all the sectoral indices

except healthcare gained this week

FMCG, banks, IT, media and metals

witnessed significant

expansions in multiples

NTM PE Ratio – Last 1 YearMar 11:

WHO declaredCOVID-19 asa pandemic

Mar 24Lock-down

1.0

Apr 14Lock-down

2.0

May 01Lock-down

3.0

May 18Lock-down

4.0

Market Update

5

Key Market Trends

Yield (%) Current 1D 1W 1MSince

1st

March3M 6M 1Y

1YR AAA Rated Corp. Bond 4.95% 4.97% 4.99% 5.77% 6.08% 5.97% 6.22% 7.62%

1YR G-Sec 3.73% 3.72% 3.74% 3.87% 5.27% 4.95% 5.50% 6.13%


3YR G-Sec 4.44% 4.47% 4.48% 4.62% 5.63% 5.36% 6.21% 6.61%


5YR G-Sec 5.38% 5.36% 5.40% 5.42% 6.16% 6.15% 6.44% 6.82%10YR AAA Rated Corp. Bond

7.08% 7.06% 7.01% 7.24% 7.27% 7.53% 7.59% 8.12%

10YR G-Sec 5.92% 5.89% 5.85% 5.75% 6.35% 6.14% 6.51% 6.93%

Source: Bloomberg of June 26, 2020; 1Financial Benchmarks India Overnight Mumbai Interbank Outright Rate; 2Mumbai Interbank Forward Offer Rate

India Government and Corporate Bond Yields (%)There has not been

any significant movement in Gsec

as well as Corp bond yields this week

Currency Market Snapshot

% Change in FX Current FX Rate 1D 1W 1MSince

1st

March3M 6M 1Y

USD-INR 75.65 0.0% 0.7% 0.0% (3.9%) (1.0%) (5.7%) (8.6%)EUR-INR 84.92 0.1% 0.6% (2.5%) (5.0%) (2.9%) (6.3%) (7.5%)GBP-INR 93.84 0.3% 0.8% (1.1%) (1.1%) (2.5%) (0.6%) (6.5%)JPY-INR 0.71 (0.2%) 1.0% (0.6%) (5.2%) (1.4%) (7.6%) (9.0%)SGD-INR 54.37 (0.0%) 0.5% (2.0%) (3.8%) (4.0%) (3.0%) (6.1%)CNY-INR 10.69 0.0% 0.8% (0.8%) (2.2%) (1.3%) (4.6%) (5.9%)

Commodity Market Snapshot

% Change Current 1D 1W 1MSince

1st

March3M 6M 1Y

WTI Crude (USD/barrel) 38.03 (1.8%) (4.5%) 9.4% (19.4%) 26.6% (35.7%) (32.9%)ICE Brent Crude (USD/barrel)

40.63 (1.0%) (3.7%) 10.6% (21.4%) 22.0% (36.3%) (35.6%)

Spot Gold (USD/ounce) 1,754.01 (0.6%) 0.6% 2.5% 10.4% 7.7% 16.1% 24.5%

Oil

Gold

India InvITs and REIT Performance

% Change Current

Price1D 1W 1M

Since 1

stMarch

3M 6M 1Y

Indigrid 101.02 0.0% 0.5% 0.3% 1.3% 11.9% 4.7% 17.1% IRBInvIt 37.95 0.1% 8.1% 15.0% (17.3%) 40.6% (28.3%) (42.2%)Embassy Office Parks 348.09 (2.2%) (9.4%) 3.3% (24.3%) (6.8%) (18.1%) (5.7%)

InvITs

REIT

Oil prices fell this week on account of

a rise in COVID cases in many

countries leading to speculations of an

extended lockdown

Liquidity Position (USD mn)

Last 1 Week 25-Jun-20 24-Jun-20 23-Jun-20 22-Jun-20 21-Jun-20 20-Jun-20

Net Liquidity 46,842 50,493 50,759 42,210 47,460 47,459

Absorption through RBI Reverse Repo 82,431 86,058 86,472 77,418 82,634 82,633

MIBOR1

(%) 3.84% 3.91% 3.91% 3.91% NA NA

MIFOR2

1M 3.78% 3.68% 3.70% 3.60% NA NA

MIFOR2

3M 3.95% 3.88% 3.90% 3.87% NA NA

MIFOR2

6M 4.15% 4.15% 4.16% 4.07% NA NA

MIFOR2

12M 4.55% 4.52% 4.49% 4.47% NA NA

Trading Activity by FII/DIIs in Capital Market Segment (USD mn)Markets saw muted participation from

institutional investors this week with FIIs/FPIs being net buyers and DIIs

net sellers

FIIs were net buyers in debt segment as

well for the week

Trading Activity by FIIs in Debt Segment (USD mn)

Last 1 Week Weekly Total 26-Jun-20 25-Jun-20 24-Jun-20 23-Jun-20 22-Jun-20

FII/FPI 145.2 (16.4) 14.8 60.1 24.2 62.5

Last 1 Week Weekly Total 26-Jun-20 25-Jun-20 24-Jun-20 23-Jun-20 22-Jun-20

FII/FPI 73.1 (99.6) (138.8) 233.3 22.3 55.8

DII (172.1) 172.4 (33.8) (201.4) 60.1 (169.4)

Total (99.0) 72.8 (172.6) 32.0 82.4 (113.6)

▪ ICICI Bank mulls raising up to a total of USD 3 bn in fresh funds

− At the current price levels, this will translate into a dilution of 10%

− This will help in raising its CET 1 levels by ~300 bps (current level of 13.4%)

▪ SEBI, in its latest Board Meeting on June 25 2020, decided to provide an additional option for pricing under

preferential allotment

− Under this, the issuer may choose to follow an alternate approach of considering the highest of

average weekly high and low for 2 weeks and 12 weeks

− As the prices of NBFCs have corrected sharply, this will help them attract capital from sponsors to

fund their growth requirements

Sectoral Update – Financial Services

6

India – Bank Stocks (1m Return) India – NBFC Stocks (1m Return)

India Financial Services Update

23.9%

19.3%

16.2%

24.5%

41.5%

(2.4%)

HDFC Bank

ICICI Bank

KMB

Axis Bank

Indusind

Yes Bank

17.8%

31.0%

33.2%

34.6%

8.0%

HDFC

Bajaj Finance

Shriram Transport

Mahindra Finance

L&T Finance

Shriram City Union

Trading Comps (USD mn)

Name M.capNet Income ROE P/E P/BV

Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22

Banks Comps

HDFC Bank 76,675 3,562 4,494 15.4% 17.2% 20.9x 16.1x 2.9x 2.5x

Kotak Mahindra Bank 35,055 1,054 1,368 11.0% 12.3% 31.7x 25.7x 3.3x 3.1x

ICICI Bank 29,884 2,353 3,417 9.4% 15.1% 14.1x 9.6x 1.8x 1.6x

Axis Bank 15,849 1,525 1,892 12.3% 14.1% 9.6x 8.4x 1.3x 1.1x

Indusind Bank 4,516 654 844 13.3% 14.9% 7.0x 5.5x 0.9x 0.8x

Median 12.3% 14.9% 14.1x 9.6x 1.8x 1.6x

NBFC Comps

HDFC 40,519 2,403 2,878 13.4% 14.4% 19.0x 14.1x 2.7x 2.5x

Bajaj Finance 23,093 631 977 13.5% 18.0% 36.2x 23.4x 4.8x 4.0x

Shriram Transport 2,114 284 386 12.0% 13.9% 7.6x 6.1x 0.8x 0.7x

L&T Finance 1,819 226 294 11.1% 12.9% 8.0x 6.2x 0.8x 0.8x

Mahindra Finance 1,445 147 214 7.2% 11.2% 10.5x 6.9x 0.9x 0.8x

Shriram City Union 608 120 122 14.0% 13.5% 4.3x 3.9x 0.6x 0.5x

Median 12.7% 13.7% 9.3x 6.5x 0.8x 0.8x

Source: Bloomberg as at 4pm IST, June 26, 2020; Note: All values on consolidated basis

Commentary

Sectoral Update – Financial Services

India – Insurance and Asset Management Update

7

India – Life Insr. (1m Return)

India – General Insr. (1m Return)

India – AMCs (1m Return)

6.8%

4.0%

21.9%

HDFC Life

SBI Life

ICICI Pru

2.4%

(0.5%)

ICICI Lomb.

New India

1.9%

33.4%

HDFC AMC

Nippon

Trading Comps (USD mn)

Life M. Cap. P/BV P / EV1 RoA RoE


HDFC Life 14,464 14.3x 12.4x 4.3x 3.5x 1.0% 1.0% 17.1% 17.9%

SBI Life 10,369 7.8x 6.7x 2.5x 2.2x 0.7% 0.8% 13.5% 14.3%

ICICI Pru 8,036 7.6x 6.8x 2.1x 1.8x 0.7% 0.8% 17.1% 16.1%

General M. Cap. P/BV P / E RoA RoE


ICICI Lomb. 7,585 7.9x 6.7x 40.3x 31.3x 3.4% 3.6% 20.9% 22.1%

New India 2,485 0.5x 0.5x NA NA NA NA 6.1% 7.1%

Asset Mgmt. Co.

M. Cap. P / AUM P / E RoA RoE


HDFC AMC 7,000 11.5% 10.0% 47.4x 41.0x 25.8% 26.5% 28.3% 27.9%

Nippon 2,531 7.7% 6.7% 36.7x 32.4x 18.8% 21.0% 19.7% 21.5%

Source: Bloomberg as at 4pm IST, June 26, 2020; 1 EV refers to Embedded Value

Commentary

▪ ICICI Bank divested 1.5% stake in ICICI Prudential Life Insurance on the exchange for a total consideration

of USD 110 mn

− Following this stake sale, its shareholding in ICICI Lombard stands at approximately 51.4%

− This is in-line with the bank’s strategy of strengthening its core balance sheet (as per the Q4 results)

Sectoral Update –Technology, Telecom and Media

8

India Technology Update

Source: Bloomberg as at 4pm IST on June 26, 2020; News run, VCCircle¹ Financial year ending March

Industry Update

1 Month Share Price Performance

▪ NASSCOM said that the move by the U.S. to bar the entry of certain non-immigrants into America was “misguided and harmful to the U.S. economy

▪ InfoEdge board approved raising of funds via QIP for an aggregate amount not exceeding USD 250 mn

▪ Bond Capital, a venture capital firm co-founded by Mary Meeker, has put in an investment under USD 100 mn in Byju’s, valuing Byju’s at c.USD 10.5 bn

▪ Nextbillion.ai which builds mapping and other AI-based services for emerging markets has raised USD 7 mn in Series A funding, led by Lightspeed India Partners and Falcon Edge Capital

▪ E-commerce platforms like Amazon India and Bigbasket have started asking sellers and brands to put ‘country of origin’ for the products on their platforms

Trading Comparables¹

Market capUSD mn

EVUSD mn

EV/Sales EV/EBITDA P/E Sales 3 yr. Fwd CAGR

EBITDA Margin

FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22

Large Cap IT

TCS 105,102 101,561 4.8x 4.4x 18.4x 16.5x 25.3x 22.5x 6% 26% 27%

Infosys 42,126 39,710 3.2x 3.0x 13.5x 11.9x 19.9x 17.6x 7% 24% 25%

HCL 20,175 19,277 2.0x 1.8x 8.4x 7.7x 13.9x 12.4x 7% 24% 24%

Wipro 17,031 13,924 1.7x 1.7x 9.0x 8.4x 14.6x 13.4x 3% 19% 20%

Tech Mahindra 7,163 6,377 1.3x 1.2x 8.6x 7.4x 14.7x 12.3x 6% 15% 16%

Midcap IT and BPO

Larsen & Toubro Infotech 4,441 4,199 2.7x 2.4x 14.5x 12.7x 21.3x 18.3x 11% 19% 19%

Mphasis 2,202 2,095 1.7x 1.6x 9.6x 8.6x 14.8x 13.1x 7% 18% 18%

Mindtree 2,065 1,970 1.9x 1.7x 12.3x 10.7x 21.3x 17.4x 7% 15% 16%

L&T Tech Services 1,792 1,736 2.3x 2.1x 12.2x 10.8x 17.4x 15.4x 7% 19% 20%

Hexaware 1,292 1,342 1.7x 1.5x 11.3x 9.7x 16.3x 14.1x 9% 15% 16%

NIIT Tech 1,207 1,087 1.8x 1.7x 10.7x 9.5x 19.5x 16.7x 14% 17% 17%

Firstsource Solutions 351 437 0.8x 0.7x 5.4x 4.8x 8.3x 7.1x 5% 15% 15%

Software

Oracle Financial Services 3,110 2,516 3.9x 3.6x 8.5x 7.7x 15.3x 13.7x na 46% 46%

Intellect Design 191 211 1.2x 1.0x 10.7x 7.1x 25.8x 12.7x 8% 11% 15%

Newgen Software 139 117 1.2x 1.0x 5.8x 4.9x 9.9x 8.0x na 21% 21%

Consumer Internet

InfoEdge 4,464 4,370 25.0x 20.8x nm nm nm nm 9% 31% 34%

MakeMyTrip 1,716 1,526 2.5x 2.0x nm nm nm nm 17% nm nm

IndiaMart 917 810 9.0x 8.0x 37.1x 28.6x 42.4x 33.0x 6% 24% 28%

JustDial 337 339 3.1x 2.7x 12.5x 10.0x 12.1x 9.9x 5% 25% 27%

13%

6%

6%

6%

4%

Wipro

TechM

Infosys

TCS

HCL

31%

23%

15%

8%

6%

6%

(1%)

Hexaware

FirstSource

L&T Services

L&T Infotech

Mindtree

Mphasis

NIIT Tech

10%

10%

7%

6%

4%

2%

Intellect

Newgen

Oracle

Infoedge

MakeMyTrip

Just Dial

IndiaMart

Large Cap IT Midcap IT and BPO Software and Consumer Internet

Sectoral Update –Technology, Telecom and Media

India Telecom and Media Update

9

Source: Bloomberg as at 4pm IST on June 26, 2020; News run, VCCircle¹ Financial year ending March

Industry Update

1 Month Share Price Performance

▪ Competition Commission of India (CCI) approved Facebook’s purchase of 9.99% stake in Jio Platforms for USD 5.7 bn

▪ Delhi High Court declined to entertain PIL for direction to TRAI and the Department of Telecommunications (DoT) to ensure that operators do not block incoming services of subscribers during the COVID-19 pandemic

▪ TRAI has announced the launch of a new channel selector app for all television subscribers across DTH and cable services to be able to view, modify and optimize channel packs irrespective of their distribution platform

▪ Bharti Infratel said in a stock-exchange filing that the deadline to complete the merger with Indus Towers has been extended to 31-Aug-20 from 24-Jun-20

▪ RIL said that is working to complete the contours of a strategic partnership with Saudi Aramco and said that it will hold its 43rd

annual general meeting on 15-Jul-20 on an online platform

▪ Vodafone Idea expanded its cellular service for Apple Watch users to the Punjab circle. The service was launched earlier this month to Mumbai, Delhi, and Gujarat circle

Trading Comparables¹

`Market cap

USD mnEV

USD mn

EV/Sales EV/EBITDA P/E Sales 3 yr. Fwd CAGR

EBITDA Margin

FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22

Telecom

Reliance Industries 145,954 183,549 2.6x 2.1x 14.6x 11.5x 24.5x 17.4x 7% 18% 19%

Bharti Airtel 40,415 59,391 4.4x 3.9x 9.9x 8.2x nm 36.8x 14% 45% 48%

Bharti Infratel 5,394 5,492 2.8x 2.7x 5.6x 5.4x 13.1x 12.8x 3% 50% 50%

Vodafone Idea 3,951 17,570 2.7x 2.5x 7.4x 5.8x nm nm 13% 36% 42%

Media and Entertainment

Sun TV 2,238 2,113 1.9x 1.7x 6.5x 5.8x 10.0x 8.7x 6% 29% 29%

Zee Entertainment 2,194 1,841 3.8x 3.4x 6.0x 5.5x 11.4x 10.2x na 63% 61%

PVR 697 1,298 5.8x 2.7x 72.5x 10.0x nm 34.3x 36% 8% 26%

Network18 567 1,333 na na na na na na na na na

Inox 333 695 4.7x 2.6x 24.5x 9.7x nm 29.1x 29% 19% 27%

Dish TV 208 546 1.1x 1.1x 1.9x 1.9x 13.5x 9.8x 2% 60% 58%

79%

18%

(0%)

(1%)

Vodafone Idea

Reliance Industries

Bharti Airtel

Bharti Infratel

Telecom

92%

70%

17%

16%

8%

(2%)

Dish TV

Network18

INOX

PVR

Sun TV

Zee

Media and Entertainment

▪ Based on media reports, the Government is planning to take additional measures to facilitate reduction of import

dependence on China

– Imposition of higher import duties on Chinese products including APIs

– Exploring options in EU markets such as Germany, Sweden and Italy to source APIs and other raw materials

▪ India’s pharma exports grew by 17% in May 2020, over the earlier year period, based on data from Pharmaceuticals

Export Promotion Council of India

– Exports were at USD 1,977 mn as against USD 1,685 mn achieved in May 2019

– Cumulative growth of 9.2% for April-May 2020 with exports of USD 3,508 mn

▪ Piramal’s Board has approved PE firm Carlyle’s proposal to acquire a 20% stake in the pharma business for USD 490 mn

– Piramal Pharma valued at EV of USD 2.7 bn with upside of USD 360 mn contingent on FY21 performance

– Implied LTM EV/Sales of 3.8x and LTM EV/EBITDA of 14.5x based on revenue of USD 723 mn and EBITDA of USD

191 mn in FY20

– Piramal’s pharma division consists of contract development and manufacturing (58% revenues), complex hospital

generics (34% revenues), consumer healthcare (8% revenues) and a JV with Allergan in ophthalmic formulations

Sectoral Update – Pharma

10

India Pharmaceuticals Update

Source: Company news, Bloomberg as on June 26, 2020. FX rate: USD 1 = INR 75

Industry Update

All amounts in USD mn EV/Sales EV/EBITDA PER

Company Name% change in MCapfrom prev. week M. Cap EV LTM 1 Yr Fwd LTM 1 Yr Fwd LTM 1 Yr Fwd

Sun Pharma* (1.7%) 15,354 15,361 3.6x 3.2x 16.5x 14.1x 29.2x 22.8x

Dr. Reddy’s* (0.2%) 8,859 8,810 3.8x 3.5x 26.6x 15.0x 30.0x 25.2x

Divi’s Labs 2.0% 8,321 8,179 11.4x 9.7x 32.9x 26.9x 45.3x 37.9x

Cipla* (0.2%) 6,825 6,971 3.1x 2.8x 16.3x 13.9x 33.1x 25.8x

Biocon* 5.4% 6,429 6,536 7.7x 5.8x 30.6x 20.3x 68.8x 39.8x

Aurobindo Pharma* (0.4%) 6,095 6,474 2.1x 1.9x 10.0x 9.0x 16.1x 14.3x

Lupin* 1.3% 5,598 5,537 2.6x 2.4x 16.3x 13.7x NM 30.2x

Torrent Pharma* (2.8%) 5,576 6,073 5.8x 5.2x 21.2x 18.8x 40.8x 35.9x

Cadila Healthcare* 0.5% 4,967 5,926 3.2x 2.8x 16.2x 14.4x 31.1x 22.2x

Alkem Labs* 1.9% 3,745 3,819 3.4x 3.1x 19.4x 16.7x 24.7x 22.1x

IPCA Labs* 5.2% 2,865 2,866 4.6x 4.0x 23.7x 18.6x 35.6x 25.9x

Alembic Pharma* (4.7%) 2,267 2,498 4.1x 3.6x 15.3x 15.6x 20.5x 22.1x

Syngene Intl.* 7.7% 2,170 2,087 7.8x 6.6x 25.9x 21.6x 39.5x 41.8x

Glenmark Pharma 14.0% 1,756 2,224 1.6x 1.4x 10.4x 8.9x 18.5x 16.0x

Ajanta Pharma* (0.3%) 1,683 1,653 4.8x 4.3x 18.1x 14.9x 27.0x 22.9x

Natco Pharma 0.9% 1,539 1,570 6.2x 5.3x 20.2x 15.6x 25.1x 20.6x

Jubilant LS* 1.3% 1,390 1,813 1.5x 1.4x 7.0x 6.5x 11.6x 10.2x

Eris Lifesciences* (0.4%) 847 829 5.8x 5.2x 16.9x 15.4x 21.4x 19.3x

Laurus Labs* 1.3% 772 900 2.4x 2.0x 12.0x 9.6x 22.7x 17.4x

JB Chemicals (4.7%) 698 654 2.8x 2.4x 12.9x 11.2x 19.3x 16.7x

Abbott India* 1.9% 4,521 4,228 7.7x 6.8x 41.9x 33.5x 57.2x 48.4x

GSK Pharma* 8.3% 3,345 3,201 7.4x 6.5x 34.8x 29.6x NM 41.0x

Sanofi India* 2.3% 2,513 ,363 5.6x 5.6x 25.8x 23.8x 46.3x 34.2x

Pfizer Ltd* 2.6% 2,502 2,206 7.7x 6.8x 28.9x 23.0x 36.9x 32.9x

AstraZeneca 2.4% 1,116 1,084 9.8x NA 67.3x NA 115.9x NA

Novartis India (7.2%) 184 116 2.0x NA 37.8x NA 136.9x NA

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Trading Comparables

* Announced 4QFY20 results. LTM multiples are for period ending March 2020.

Sectoral Update – Healthcare

11

India Healthcare Update

Industry Update

Trading Comparables

All amounts in USD mn EV/Sales EV/EBITDA PER

Company Name M. Cap EVNet Debt /

EBITDA LTM 1 Yr Fwd LTM 1 Yr Fwd LTM 1 Yr Fwd

Apollo Hospitals* 2,575 2,957 1.7x 2.0x 1.8x 14.0x 14.3x 42.7x 53.2x

Fortis Healthcare* 1,242 1,483 2.1x 2.4x 2.5x 18.2x 19.4x 130.4x 147.7x

Narayana Hrudayalaya* 748 728 (0.4x) 1.7x 1.8x 12.9x 17.2x 47.1x 143.6x

Aster DM Healthcare* 837 1,552 3.9x 1.3x 1.2x 9.3x 9.6x 21.8x 23.9x

Healthcare Global 144 238 4.2x 1.7x 1.4x 10.7x 9.6x NM NM

Shalby1* 103 102 (0.1x) 1.6x 1.3x 9.3x NA 27.9x 12.5x

Dr Lal Pathlabs1* 1,733 1,638 (2.1x) 9.2x 8.6x 35.8x 34.0x 57.4x 55.1x

Metropolis1* 955 935 (0.7x) 8.2x 7.6x 29.7x 29.4x 56.2x 48.4x

Thyrocare1* 356 346 (0.4x) 6.0x 5.7x 15.0x 14.9x 30.2x 24.6x

Poly Medicure* 357 374 0.8x 4.1x NA 17.1x NA 27.9x NA

▪ India likely to re-open the export of Personal Protective Equipment (PPE), five months after the ban on exports was established due to the pandemic. There is demand from various markets and India has a disposable surplus of around 5 million PPEs that can be exported every month.

▪ State governments including Delhi, Tamil Nadu, Karnataka, Telangana and Maharashtra, have moved to cap charges on COVID treatment in a bid to keep treatment costs affordable. Hospitals including Apollo are calling this move ‘unfair’ given hospitals cannot afford to lose more money in the current situation. Apollo also raised the issue of higher import duties and the need for more investments in the healthcare sector

1 Net Debt is negative, EBITDA is positive, 2 Med. Dev. is Medical Devices* Announced 4QFY20 results. LTM multiples are for period ending March 2020.

Source: Company news, Bloomberg as on June 26, 2020. FX rate: USD 1 = INR 75

Share Price Performance

Share Price Return

Company Name 1w 1m 3m 6m 1y

Apollo Hospitals 1.3% 3.8% 19.0% (2.1%) 6.1%

Fortis Healthcare 0.8% 7.7% (4.3%) (6.1%) (4.7%)

Narayana Hrudayalaya 0.7% 3.8% 15.5% (8.7%) 11.9%

Aster DM Healthcare 4.8% 39.7% 35.1% (18.7%) 4.6%

Healthcare Global 0.1% 22.0% 60.5% 18.7% (25.8%)

Shalby 3.4% 8.8% 53.3% (24.4%) (36.1%)

Dr Lal Pathlabs 2.1% 0.3% 3.8% 4.2% 38.0%

Metropolis (4.4%) 7.0% 3.0% (0.5%) 46.1%

Thyrocare (1.2%) (1.5%) (2.7%) (6.8%) 6.2%

Poly Medicure 1.9% 4.7% 28.6% 41.7% 70.2%

Hospitals

Diagnostic

Med. Dev.2

Hospitals

Diagnostic

Med. Dev.2

Sectoral Update – Auto & Auto Components

12

India Auto & Auto Components Update

Share Price (INR) 1W 1M 3M 6M 1Y

Maruti Suzuki 5,754.9 (2.4%) 9.7% 18.0% (20.5%) (11.2%)

Bajaj Auto 2,867.6 7.2% 11.8% 36.1% (11.2%) (0.0%)

M&M 501.4 0.3% 16.8% 75.6% (5.1%) (22.1%)

Hero MotoCorp 2,540.5 7.8% 20.2% 41.0% 4.2% (1.3%)

Tata Motors 101.4 (1.1%) 22.0% 43.2% (41.9%) (37.1%)

Motherson Sumi Systems 96.0 (1.4%) 13.5% 49.6% (34.6%) (19.2%)

Bosch 11,213.5 2.4% 19.4% 13.6% (26.8%) (32.1%)

MRF 66,457.7 5.6% 15.1% 20.1% 5.3% 18.5%

Key Listed Auto Companies in India (1Y Return)

M. Cap. (USD mn)

EV(USD mn)

EV/NTM Revenue EV/NTM EBITDA P/NTM EPS

Maruti Suzuki 22,992 22,854 2.2x 19.5x 25.2x

Bajaj Auto 10,975 10,565 2.6x 15.6x 16.1x

M&M 8,244 15,651 1.2x 8.6x 17.6x

Hero MotoCorp 6,711 6,109 1.3x NA 14.1x

Tata Motors 4,421 12,972 0.4x 3.6x NA

Motherson Sumi Systems 4,009 5,559 0.6x 6.5x 16.2x

Bosch 4,374 4,046 2.3x 14.6x 20.6x

MRF 3,728 3,622 1.6x 10.3x 22.7x

Trading Comparables

▪ According to ACMA (Automotive Component Manufacturers Association), China made up 27% of the USD 17.6bn

automobile components import. The industry has started to take steps towards "deep localization" in order to de-risk

business from Chinese imports

▪ Automakers currently face the issue of importing key spare parts from China which are critical for vehicles to meet

the BS-VI emission norms. Indian makers lack the capability in various segments like electronics, batteries and BS-VI

components. China, along with technical competence and sheer price advantage, has a near monopoly in battery cell

production globally

(11.2%)

(0.0%)

(22.1%)

(1.3%)

(37.1%)

(19.2%)

(32.1%)

18.5%

Maruti Suzuki Bajaj Auto M&M HeroMotoCorp

Tata Motors MothersonSumi Systems

Bosch MRF

Share Price Returns

Industry News

Auto Makers

Auto Components

Tyres

Source: Bloomberg as on June 26, 2020, Company Information, News run; Note: USD 1 = INR 75

Sectoral Update – Metals & Mining

13

India Metals & Mining Update

Key Listed Metals & Mining Companies in India (1Y Return)

(45.4%)(38.2%)

(25.1%)(17.4%)

(30.5%)(36.6%)

1.2%

(27.5%)

Coal India Vedanta NMDC Hindustan Zinc JSW Steel Tata Steel Jindal Steel &Power

HindalcoIndustries

Share Price (INR) 1W 1M 3M 6M 1Y

Coal India 142.1 3.5% 11.7% 15.3% (28.0%) (45.4%)

Vedanta 110.0 4.5% 25.1% 67.1% (27.0%) (38.2%)

NMDC 84.2 2.1% 11.0% 20.5% (33.3%) (25.1%)

Hindustan Zinc 199.0 11.7% 19.4% 42.9% (6.2%) (17.4%)

JSW Steel 192.7 (0.8%) 9.3% 28.6% (28.4%) (30.5%)

Tata Steel 323.9 1.0% 15.5% 13.9% (30.8%) (36.6%)

Jindal Steel & Power 153.2 5.1% 40.4% 72.4% (6.3%) 1.2%

Hindalco Industries 151.1 0.0% 17.0% 59.8% (29.7%) (27.5%)

M. Cap. (USD mn)

EV(USD mn)

EV/NTM Revenue EV/NTM EBITDA P/NTM EPS

Coal India 11,582 7,581 0.6x 3.0x 5.9x

Vedanta 5,405 9,340 0.9x 4.1x 25.3x

NMDC 3,408 3,161 2.3x 4.8x 7.0x

Hindustan Zinc 11,118 8,256 3.6x 7.9x 14.4x

JSW Steel 6,159 11,776 1.0x 5.4x 9.0x

Tata Steel 4,860 17,730 1.0x 8.7x NA

Jindal Steel & Power 2,067 5,896 1.1x 4.9x 15.8x

Hindalco Industries 4,488 9,826 0.6x 6.0x 11.6x

Trading Comparables

Share Price Returns

Industry News

▪ 3 opposition ruled states (Maharashtra, Chhattisgarh and Jharkhand) have expressed reservations against the launch

of coal block auction. The Jharkhand government moved the Supreme Court seeking postponement of the proposed

commercial auction of coal mines citing need for fair assessment of the social and environmental impact

▪ India announced anti-dumping duty on steel products originating or exported from China, Vietnam and South Korea

▪ India was net exporter of steel to China both in April and May, which is a first and a temporary phenomenon as China

once again ramps up production

Integrated Mining &

Metals

Steel

Other Metals


Sectoral Update – Aviation

14

India Aviation Update

Source: Bloomberg as on June 26, 2020, Company Information, News run; Note: USD 1 = INR 75; 1Rebased to 100

1W 1M 3M 6M 1Y

Interglobe Aviation 0.1% 9.2% 1.9% (22.2%) (34.7%)

SpiceJet 0.3% 16.1% 44.1% (46.9%) (60.4%)

Delta Airlines (5.1%) 9.2% (11.6%) (53.0%) (50.3%)

Air China (5.8%) (0.8%) (11.0%) (38.1%) (38.7%)

IAG (16.4%) (2.9%) (1.9%) (63.7%) (49.5%)

Southwest Airlines (4.6%) 1.4% (20.0%) (39.9%) (35.0%)

Ryanair (8.3%) (11.0%) 8.8% (27.3%) 5.7%

EasyJet (16.0%) 0.7% 2.7% (52.8%) (22.3%)

Air Asia Group (4.5%) 13.3% 16.4% (50.6%) (69.1%)

M. Cap. (USD mn)

EV(USD mn)

EV/NTM Revenue

EV/NTM EBITDA P/NTM EPS

Interglobe Aviation 5,235 5,500 0.9x 5.0x 14.5x

SpiceJet 406 524 0.3x 2.0x 11.0x

Trading Comparables

Share Price Returns

Industry News

▪ USA, UAE and France have restricted Air India from flying inbound passengers under the Vande Bharat Mission. Post

these restrictions, MOCA (Ministry of Civil Aviation) stated that India is looking at the prospect of establishing

individual bilateral bubbles between select countries

▪ The Vande Bharat Mission had brought back 125K+ to India and carried 43K+ on outbound flights so far

▪ DGCA (Directorate General of Civil Aviation) has decided to suspend all commercial international flight operations in

India till July 15. However, India may allow some international flights on selected routes on a case to case basis

▪ DCGA has allowed airlines permission to operate up to 45% of their total capacity from the current 33%


0

20

40

60

80

100

120

Jun-19 Sep-19 Nov-19 Jan-20 Apr-20 Jun-20

Last 1 year Last 1 month

90

100

110

120

130

140

26-May-20 02-Jun-20 10-Jun-20 18-Jun-20 26-Jun-20

Price (SpiceJet)Price (Indigo)

1 1

Indian LCCs

Global FSCs

Global LCCs

Sectoral Update – Power and Infrastructure

India Power Update

15

Key Listed Power Companies in India (1Y Return)

Trading Comparables

Listed Power Companies in India (Operations and Share Price Performance)

Business Share Price Return

Company Generation Transmission Distribution 1w 1m 3m 6m 1y

Adani Trans. - ✓ ✓ 25.1% 52.3% 48.3% (16.1%) 25.2%

Torrent Power ✓ ✓ ✓ 1.4% 6.4% 19.7% 16.0% 13.7%

Tata Power ✓ ✓ ✓ 7.3% 29.7% 36.5% (17.4%) (32.5%)

CESC ✓ ✓ ✓ 1.0% 8.1% 55.9% (18.8%) (22.4%)

NTPC ✓ - - 4.3% 2.4% 16.9% (17.0%) (30.8%)

Adani Green ✓ - - (5.5%) 63.9% 167.3% 163.3% 838.7%

NHPC ✓ - - 4.8% 4.8% 7.5% (13.1%) (16.4%)

Adani Power ✓ - - (3.3%) (0.7%) 33.2% (39.0%) (28.6%)

JSW Energy ✓ - - 1.8% 19.2% 9.8% (29.7%) (29.6%)

Azure Power ✓ - - 0.0% 8.5% 14.6% 28.0% 51.7%

Power Grid - ✓ - 4.6% 14.0% 12.0% (5.2%) (13.7%)

Company Share Price (LC)M. Cap.

(USD mn)EV

(USD mn)EV /

FY21E EBITDAEV /

FY22E EBITDAP / E

(FY21E)P / E

(FY22E)

Adani Trans. 277 4,060 7,523 11.9x 10.4x 31.7x 25.5x

Torrent Power 325 2,085 3,012 6.2x 5.9x 12.7x 11.3x

Tata Power 46 1,672 8,023 7.8x 7.5x 9.9x 8.3x

CESC 607 1,073 2,560 5.9x 6.0x 6.3x 5.7x

NTPC 97 12,797 34,072 7.9x 7.1x 7.1x 6.2x

Adani Green 398 8,290 10,043 NA NA NA NA

NHPC 20 2,793 5,204 6.9x 6.5x 7.5x 7.1x

Adani Power 37 1,890 8,622 8.8x 7.9x NM NM

JSW Energy 49 1,068 2,042 5.1x 4.9x 9.6x 8.3x

Azure Power 16 768 1,892 11.9x 7.8x NM 45.2x

Power Grid 179 12,500 30,231 6.5x 6.2x 7.8x 7.1x

25.2%13.7%

(32.5%)(22.4%)

(30.8%)

838.7%

(16.4%)(28.6%) (29.6%)

51.7%

(13.7%)

AdaniTrans.

Torrent Tata CESC NTPC AdaniGreen

NHPC AdaniPower

JSW Azure PowerGrid

Integrated

Generation

Transmission

Source: Bloomberg as on June 26, 2020 (as on June 25, 2020 for Azure Power), Company Information, News run; Note: USD 1 = INR 75

Sectoral Update – Power and Infrastructure

India Infrastructure Update

16

Trading Comparables

Infra - Share Price Performance

Share Price Return

Company 1w 1m 3m 6m 1y

APSEZ (1.6%) 5.1% 36.6% (5.6%) (15.6%)

GMR Infra (5.6%) 18.3% 28.3% (3.1%) 33.3%

IRB Infra 26.9% 56.4% 66.2% 29.8% (7.1%)

Ashoka Build (2.8%) 25.4% 43.5% (35.9%) (55.2%)

IGL (1.2%) (3.1%) 23.7% 3.9% 41.4%

Gujarat Gas 4.9% 30.5% 34.4% 35.9% 76.6%

Adani Gas 16.5% 44.5% 87.4% 6.5% (1.0%)

MGL 0.1% 17.4% 32.2% 3.0% 25.1%

Perf. of Listed Infra. InvITs

FY20 Dividends (INR)

TrustShare Price

(INR)Q1 Q2 Q3 Q4

India Grid 101.2 3.0 3.0 3.0 3.0

IRB InvIT 38.1 3.0 2.5 2.7 1.8

Recent Developments – Power and Infra

Company Share Price (LC)M. Cap.

(USD mn)EV

(USD mn)EV /

FY21E EBITDAEV /

FY22E EBITDAP / E

(FY21E)P / E

(FY22E)

APSEZ 343 9,297 12,069 12.0x 10.1x 16.9x 14.0x

GMR Infra 20 1,642 5,063 16.7x 13.7x NM NM

IRB Infra 90 422 1,254 3.9x 3.6x 13.8x 9.3x

Ashoka Build 63 236 927 5.2x 4.3x NM 29.8x

IGL 442 4,126 3,838 18.2x 15.0x 26.1x 21.2x

Gujarat Gas 307 2,817 2,969 14.8x 11.7x 25.7x 18.6x

Adani Gas 166 2,432 2,471 26.3x 23.6x 38.4x 34.1x

MGL 1,077 1,419 1,247 9.4x 8.1x 15.5x 13.3x

Key Listed Power Companies in India (1Y Return)

(15.6%)

33.3%

(7.1%)

(55.2%)

41.4%

76.6%

(1.0%)

25.1%

APSEZ GMR IRB AshokaBuildcon

IGL Gujarat Gas Adani Gas MGL

Ports

Airports

Roads

City Gas Dist.

▪ CERC announced New Tariff Regulations for Renewable Energy Projects, to come into force from Jul-20, up to Mar-23

▪ Tata Power Delhi Distribution(which supplies electricity to a population of 7 mn in North Delhi, with 1.7 mn consumers) announced that it installed 200,000 smart meters across its consumer segments

▪ Government is planning to impose a basic customs duty in the range of 20-25% on imported solar modules from which would eventually be raised to 40%; for solar cells, the customs duty is planned to be at 15% levels, and will be raised to 30%

▪ Petrol price ( at INR 80.13 / litre) crossed INR 80-mark in Delhi for first time since 2018; Diesel price (at INR 80.19 / litre) reached a new all-time high rate; Diesel became costlier than Petrol for the first time on Wednesday (Jun 24, 2020)

▪ Regular passenger train services (with a few exceptions) have been further cancelled till Aug 12, 2020


▪ COVID-19 led disruption resulted in doubling of online sales for several e-commerce companies including Hindustan Unilever, ITC, Parle Products, LG, Vivo and Godrej.

▪ According to the latest Nielsen report, online contribution to India's FMCG sales rose nearly 50% Y-o-Y in the March quarter as consumers increasingly shopped from e-grocers, while local grocers’ share fell 220 bps.

▪ FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) reported several cases of seizures of smuggled imported cigarettes in the last few months indicating a spike in cigarette smuggling during lockdown.

Sectoral Update – Consumer and Retail

India Consumer Update

17


Trading Comparables

Share Price Return


HUL 2.9% 7.8% (1.9%) 10.8% 22.3%

Dabur 3.9% 7.3% 8.1% 0.6% 16.8%

Godrej Consumer 5.4% 19.2% 36.9% 0.3% 2.2%

Marico 3.8% 6.5% 29.1% 1.5% (7.1%)

Colgate India 2.5% 8.8% 18.5% (4.6%) 23.1%

Emami 9.5% 12.9% 38.2% (27.4%) (30.5%)

Zydus Wellness 0.8% 4.3% 5.4% (11.7%) (5.1%)

Nestle India 3.6% (0.2%) 11.8% 14.2% 41.3%

Britannia 0.5% 7.3% 33.5% 12.9% 26.5%

Tata Consumer 2.2% 4.6% 38.2% 23.3% 41.4%

ITC 6.1% 1.6% 24.8% (17.6%) (29.6%)

United Spirits (4.3%) 2.3% 20.5% 1.4% 4.4%

United Breweries (0.1%) 9.4% 13.9% (20.0%) (23.7%)

VST Industries 1.6% 4.9% (8.4%) (27.8%) (11.3%)

Godfrey Philips 3.2% 0.6% 11.5% (22.8%) 14.3%

Diversified, Wellness

and Personal

Care

Food

Tobacco and

Alcohol

Source: Bloomberg as on June 26, 2020, Company information, News run, FY – For the year end March – Nestle India calendarized toMarch year end, FX rate: USD 1 = INR 75

Recent Developments – Consumer Sector

All amounts in USD mn EV/Sales EV/EBITDA P/E

Company Name Share Price (INR) M. Cap EV FY21 FY22 FY21 FY22 FY21 FY22

HUL 2,154.2 67,436 66,589 9.9x 8.8x 36.6x 32.1x 51.8x 43.8x

Dabur 460.4 10,846 10,620 8.0x 7.2x 36.8x 31.6x 44.1x 38.8x

Godrej Consumer 685.5 9,343 9,518 6.4x 5.8x 28.0x 24.3x 39.0x 33.3x

Marico 344.4 5,928 5,854 5.3x 4.9x 25.9x 22.9x 36.8x 32.4x

Colgate India 1,391.3 5,045 4,989 8.1x 7.4x 29.4x 26.5x 45.4x 40.2x

Emami 221.0 1,326 1,313 3.4x 3.2x 12.4x 11.6x 18.0x 16.3x

Zydus Wellness 1,275.8 981 1,158 4.2x 3.8x 22.9x 19.4x 29.0x 23.3x

Nestle India 16,677.5 21,440 21,138 11.8x 10.5x 49.7x 42.7x 73.0x 61.6x

Britannia 3,456.4 11,086 11,149 5.9x 5.3x 34.3x 29.2x 44.7x 38.3x

Tata Consumer 385.7 4,711 4,732 3.2x 3.0x 21.9x 20.4x 37.0x 34.2x

ITC 195.2 31,995 29,732 4.4x 4.0x 11.8x 10.3x 17.1x 14.8x

United Spirits 591.5 5,730 5,957 4.7x 4.1x 25.0x 22.0x 40.3x 33.8x

United Breweries 1,018.9 3,592 3,604 3.5x 3.3x 22.2x 20.2x 39.9x 36.1x

VST Industries 3,133.0 645 540 2.9x NA 8.4x NA 13.3x NA

Godfrey Philips 996.6 691 664 1.5x 1.4x 6.8x 5.9x 10.6x 9.0x

Sectoral Update – Consumer and Retail

India Retail Update

18


Trading Comparables

Share Price Return


Jubilant Foodworks 4.8% 4.8% 25.2% 8.8% 41.7%

Westlife Development 5.3% 13.9% 5.8% (4.6%) 5.5%

Avenue Supermarts (2.9%) (0.6%) 10.3% 19.2% 65.4%

Future Retail 27.6% 76.1% 64.3% (58.2%) (70.5%)

Spencer’s Retail (2.3%) (0.1%) 27.5% 61.4% (14.5%)

Trent 20.6% 48.5% 42.2% 26.0% 59.0%

Aditya Birla Fashion & Retail (2.9%) 9.3% (22.6%) (44.5%) (38.3%)

Future Lifestyle Fashions 1.3% 3.0% 14.7% (62.4%) (67.5%)

Vmart Retail (4.7%) 7.4% 16.5% 4.3% (23.9%)

Shoppers Stop 0.5% 35.7% (13.4%) (49.7%) (62.5%)

Restaurant

Grocery Retailers

Source: Bloomberg as on June 26, 2020, Company information, News run, FY – For the year end March, FX rate: USD 1 = INR 75

Recent Developments – Retail Sector

▪ E-commerce giants Amazon, Flipkart along with a dozen other online retailers including Jio Platforms have agreed to compel merchants to start prominently displaying “country of origin“ for all goods sold online in India, bowing to regulatory demands as tensions with China escalate.

▪ During Unlock 1.0, consumer trends suggest that internal dwell time has reduced for customers as they are now coming in for focused shopping. Also, Tier II cities are seeing higher footfall compared to metros and Tier I cities.

▪ Revenue of the USD 22.6bn organized apparel retail sector is set to plummet 30-35% in FY21 because of temporary store closures, restricted mobility and low-income visibility for consumers.



Jubilant Foodworks 1,769.9 3,114 3,244 7.1x 5.4x 34.4x 23.4x 98.3x 52.2x

Westlife Development 326.2 677 784 4.7x 3.4x 55.9x 25.4x NM 104.2x

Avenue Supermarts 2,294.4 19,817 19,840 5.3x 4.1x 67.9x 47.2x 103.6x 72.0x

Future Retail 142.5 1,030 1,337 0.4x 0.4x 5.9x 5.2x 10.6x 8.5x

Spencer’s Retail 88.2 94 94 NA NA NA NA NA NA

Trent 687.4 3,258 3,197 8.0x 5.5x 59.8x 36.0x NM 79.9x

Aditya Birla Fashion & Retail 129.3 1,334 1,950 NA NA NA NA NA NA

Future Lifestyle Fashions 149.8 403 488 0.6x 0.5x 3.8x 3.2x 34.4x 16.6x

Vmart Retail 1,710.1 414 413 1.5x 1.3x 18.2x 14.8x 31.1x 25.9x

Shoppers Stop 180.8 212 490 1.0x 0.9x 7.9x 7.5x 71.2x 19.7x

Lifestyle Retailer

Sectoral Update – Real Estate

India Real Estate Update

19

Trading Comparables

Recent Developments – Real Estate

Key Listed Real Estate Companies in India (1Y Return)

(16.4%)(5.7%) (9.6%)

(35.2%)

(6.2%)(15.6%)

(55.3%)

(22.7%)

(56.9%)

(42.7%)

DLF EmbassyOffice Parks

REIT

GodrejProperties

OberoiRealty

PhoenixMills

PrestigeEstatesProjects

ChaletHotels

Nesco SunteckRealty

BrigadeEnterprises

▪ As per the survey conducted by the Retailers Association of India (RAI), malls witnessed 77% degrowth while high

street retail showed a decline of 61% in business in the first half of June, as compared to last year, with consumer

sentiment remaining low even after lockdown relaxations

▪ An industry reports showed that residential property sales in the top 7 Indian cities plunged 81% (13K units compared

to 68K) in the 2nd quarter of 2020 as compared to the previous year. Data was collected from MMR, NCR, Bengaluru,

Chennai, Hyderabad, Pune and Kolkata where only 1.4K new units were launched compared to 69K units in the same

period in 2019

Source: Bloomberg as on June 26, 2020, Company information, News run, 1USD = 75 INR


Share Price Return


DLF (4.6%) 12.9% 11.8% (31.9%) (16.4%)

Embassy Office Parks REIT (9.4%) 3.3% (6.5%) (17.5%) (5.7%)

Godrej Properties (2.9%) 44.1% 24.7% (8.6%) (9.6%)

Oberoi Realty 0.1% 24.3% (2.7%) (27.8%) (35.2%)

Phoenix Mills (0.8%) 20.9% 5.5% (25.6%) (6.2%)

Prestige Estates Projects 6.5% 63.6% 18.1% (33.0%) (15.6%)

Chalet Hotels (3.2%) 34.7% (35.1%) (59.8%) (55.3%)

Nesco (2.9%) 12.4% (10.5%) (33.5%) (22.7%)

Sunteck Realty 6.7% 23.9% (10.4%) (57.0%) (56.9%)

Brigade Enterprises 1.2% 48.4% 15.7% (33.0%) (42.7%)



DLF 154.4 5,096 5,562 5.9x 5.6x 16.0x 14.3x 18.3x 16.5x

Embassy Office Parks REIT 348.1 3,581 4,467 14.3x 12.3x 17.3x 15.3x 27.8x 24.7x

Godrej Properties 868.3 2,918 3,004 13.0x 12.8x 75.6x 74.0x 40.3x 50.0x

Oberoi Realty 375.4 1,820 1,929 4.7x 4.0x 10.5x 8.5x 12.8x 11.7x

Phoenix Mills 600.2 1,228 1,895 6.6x 5.9x 12.7x 10.8x 23.6x 18.5x

Prestige Estates Projects 224.0 1,197 2,251 2.4x 2.4x 7.5x 7.6x 16.2x 15.6x

Chalet Hotels 136.8 374 584 3.7x 3.1x 9.6x 7.5x 17.6x 12.6x

Nesco 441.3 415 409 6.3x 5.2x 9.3x 7.5x 13.8x 10.9x

Sunteck Realty 183.1 357 412 2.2x 2.1x 5.2x 5.1x 6.9x 6.7x

Brigade Enterprises 144.1 393 893 2.2x 1.9x 7.6x 6.1x 15.2x 10.4x

Sunil SanghaiFounder & [email protected]

Rikin SanghviExecutive [email protected]

Dhruv BhatiaVice [email protected]

Anirban BharVice [email protected]

Mohit BhutdaSenior [email protected]

Stuti [email protected]

Piyush [email protected]

Neel [email protected]

Swahum MukherjeeSenior [email protected]

Ponmathi [email protected]

Mandvi DixitExecutive [email protected]

Vishal [email protected]

NovaDhruva Capital Private Limited902 One Indiabulls Centre, Tower 2A; Elphinstone Road (West), Mumbai 400 013; : +91 22 6246 6000www.novadhruva.com

NovaDhruva Team

mailto:[email protected]












end of the week update - novadhruva pvt. ltd. · 2020/6/27 · 3 sectoral update 3.1 financial...

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