pg 29. interview: mangu singh pg 32. interview: harsh
TRANSCRIPT
1ST - 3OTH June 2016 . Vol 3 Issue 5. For Private Circulation Only
pg 29. INTERVIEW: Mangu Singh
pg 32. INTERVIEW: Harsh Dhingra
pg 35. Indian Economy – Trend indicators
pg 37. PhillipCapital Coverage Universe – Valuation Summary
3GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 2
1st May 2016 Issue 4 1st Apr 2016 Issue 3
1st Mar 2016 Issue 2 1st Jan 2016 Issue 1
1st Dec 2015 Issue 9 1st Dec 2015 Issue 8
VOL 3 . ISSUE 5 . 1ST - 30TH JUNE 2016
Vineet Bhatnagar- Managing Director and CEO
EDITORIAL BOARDNaveen Kulkarni, Manish Agarwalla, Kinshuk Bharti Tiwari
COVER & MAGAZINE DESIGN Chaitanya Modak, www.inhousedesign.co.in
EDITORRoshan Sony
RESEARCHBanking, NBFCsManish Agarwalla | Pradeep Agrawal | Paresh JainConsumerNaveen Kulkarni | Jubil Jain | Priyam ToliaCementVaibhav AgarwalEconomics Anjali Verma Engineering, Capital Goods Jonas BhuttaInfrastructure & IT ServicesVibhor Singhal | Shyamal DhruveLogistics, Transportation & MidcapVikram SuryavanshiMidcap Amol RaoMedia Manoj Behera | Naveen KulkarniMetals & AutomobilesDhawal Doshi | Nitesh Sharma | Yash DoshiOil & Gas Sabri HazarikaPharmaceuticals Surya Patra | Mehul ShethTelecomNaveen Kulkarni | Manoj Behera
PORTFOLIO STRATEGYAnindya Bhowmik
TECHNICALSSubodh Gupta
PRODUCTION MANAGERGanesh Deorukhkar
MID-CAPS & DATABASE MANAGERDeepak Agrawal
SR. MANAGER - EQUITIES SUPPORTRosie Ferns
FOR EDITORIAL QUERIESPhillipCapital (India) Private Limited No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400 013
SALES & DISTRIBUTION Ashvin Patil, Shubhangi Agrawal, Kishor Binwal, Bhavin Shah, Ashka Gulati, Archan Vyas
CORPORATE COMMUNICATIONS Zarine Damania | Bharati Ponda
Ground View - Previous Issues
3GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 2
4. COVER STORY: Digitisation in banks – Collaboration, not competition
Most banks in India believe that tie ups or collabo-ration with fin-tech firms would be an appropriate strategy to embrace digitisation
29. INTERVIEW: Mangu Singh
Managing Director of Delhi Metro Rail Corporation (DMRC) talks to us about the evolution of the Delhi metro network
32. INTERVIEW: Harsh Dhingra
Chief Country Representative, India, Bombardier Transportation takes us through the journey of the company in India
35. Indian Economy – Trend indicators
37. PhillipCapital Coverage Universe: Valuation Summary
CONTENTS
Most people in the banking industry agree that ‘digital
banking’ is the wave of the future. While digital banking is
often equated with mobile or online banking, in the banking
context, digitisation is mainly the process that all banks
need to go through in order to provide better services to
customers. Banking customers have been changing their
behaviour in line with technological developments and
increasing their demand for digital channels. Customers’
disloyalty to banks continues to increase. All of these have
created enabling conditions for fin-tech firms to target the
traditional financial sector.
The big questions are – will fin-tech firm steal a large part of
the businesses from traditional banks? Will their efforts result
in margin compression across the sector? What strategy
would banks adopt to counter the fin-tech onslaught? Will
virtual branches replace the traditional brick and mortar
branches?
Our cover story on “Digitisation in banks – collaboration not
competition” evaluates the impact of digitisation wave on
banks and analyses the strategies of various banks to combat
the new wave of digital disruption. Our analyst, Manish
Agarwalla, interacted with leading technology consultants in
the BFSI space, met up with digital heads of banks, fin-tech
firms, and regulators, to understand how prepared banks
are to take on fin-tech companies, their strategy in terms
of service delivery and product offerings, and their current
technology capability. Given the onslaught of fin-tech firms in
the world of financial services, banks run the risk of becoming
redundant if they do not adopt new technology. Most banks in
India believe that tie-ups or collaborations with fin-tech firms
would be an apt strategy to embrace digitisation. Adoption
of efficient technology will not only reduce operating costs
for banks, but would even open up new streams of revenue.
Also in this issue – an interview with Mr. Harsh Dhingra, Chief
Country Representative, India, Bombardier Transportation,
where he talks of his company’s journey in India and the
opportunity he sees in the India railways and the metro
segment, and an interview with Mr Mangu Singh, the
Managing Director of Delhi Metro Rail Corporation (DMRC),
where he talks about evolution of the Delhi Metro network,
execution challenges, and about other metro projects in the
country.
Best Wishes
Vineet Bhatnagar
Letter from the MD
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E-CASH THE ‘NEW CURRENCY’
PAYMENT VIA QR CODES
COVER STORY
BY MANISH AGRAWALLA
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pg. 6 Digitisation in banking - Brick to click
____________________________pg. 7 Fin-tech companies -
Unbundling financial services
____________________________pg. 10 Banks preparedness to combat Fin-tech
- Geared to challenge new waves
of digital disruption
____________________________pg. 22 Digitisation strategy of banks -
Collaboration with Fin-tech and co-existence
of physical with virtual
____________________________pg. 25 Challenge – Evolving the digitisation culture
The fierce invasion of fin-tech companies in the banking space shook up its very foundations. These companies brought about such a global revolution in the sector that the way people bank underwent a drastic change in the last 10 years or so. Banking continues to evolve under the advent of the technological and psychological changes that these fin-tech companies compelled the market to make. While banks quickly adopted digital technologies transactions and payments, they have lagged behind in incorporating these advancements in lending. Several young fin-tech companies have stepped into this gap and made quite a place for themselves by offering efficient lending solutions. However, in general, the trend seems to be more towards collaboration rather than rivalry, especially from the fin-tech companies. They realise that with the support of banks, they can rise to phenomenal heights. Banks will have to forge relationships with these fin-tech companies in order to innovate, and will continue to even invest in some of them. Most banks in India believe that tie-ups or collaboration with fin-tech firms would be an apt strategy to embrace digitisation.For now, multiple payment technologies will coexist in India, as it is a diverse market with different customer segments. Even globally, cards have not completely replaced cash transactions. There will be enough space and opportunity for different players – whether it is mobile wallets, payment banks, or a universal bank. Collaboration between banks and fin-tech companies would enrich customer experience while healthy competition is also necessary to evolve technology.It is clear that the digitisation journey will not be easy. However, by breaking it down into stages and taking a disciplined approach, Indian businesses can go beyond merely doing better. Ultimately, they can transform their businesses by activating new sources of revenue that take full advantage of India’s rapid digital growth.
DIGITISATIONIN BANKS –
PAYMENT VIA QR CODES
Collaboration,not competition
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Brick to click
D I G I T I S A T I O N I N B A N K I N G
Most people in the banking industry agree that ‘digital banking’
is the wave of the future. Indeed, many would contend that
it is not at all a future wave, but that it is already here. While
digital banking is often equated with mobile or online banking–
and these do involve digital applications of some sort –in the
banking context, digitisation is mainly the process that all
banks need to go through in order to provide better services
to customers. Digitisation also empowers customers with self-
sufficiency. Digital banking is so important because it allows
banks to become virtually omnipresent.
Challenges often give birth to opportunities –the major
challenge that Indian banks face today is digitisation, and
this process has given birth to many opportunities such as
netbanking, mobile banking, and insta-pay. Digitisation is
enabling banks to meet the needs of its customers across the
spectrum of age and gender.
Banking customers have been changing their behaviour in line
with technological developments and increasing their demand
for digital channels. Customers’ disloyalty to banks continues
to increase. All of these have created the enabling conditions
for start-ups to target the traditional financial sector. Backed
by venture funds, many of these start-ups, which in banking
parlance are called fin-tech companies, are providing banking
products at much lower costs and with a greater degree of
convenience. Today, fin-tech businesses are creating on-
demand credit, using self-learning models to analyse risk, or
making it easier for businesses and individuals to transact.
Globally, the financial industry is seeing unbundling of services.
The big question is – will fin-tech firm steal a large part of the
businesses from traditional banks? Will their efforts result in
margin compression across the sector? What strategy would
banks adopt to counter the fin-tech onslaught? Will the virtual
branch replace the traditional brick and mortar branch? Mr
Mahesh Makhija (Partner, Ernst &Young) believes that every
part of the financial value chain is under threat from fin-tech
companies; entire payment ecosystems have exploded and
banks are trying hard to match fin-tech offerings. Even on
the lending side, banks are trying to partner with fin-tech
on the front-end for customer engagement programmes
(need analysis, generating leads). On CASA (current account
and savings account) fin-tech companies can be a threat. He
does not see a risk to banks in the near term, but in the long
term, challenges from fin-tech companies will force banks to
collaborate with, acquire, or build these fin-tech companies.
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Unbundling the financial services
What are Fin-tech Companies?
F I N -T E C H C O M PA N I E S
Fin-tech is a short form of financial technology. These kinds
of companies, usually start-ups, use software to provide fi-
nancial services. Typically, their purpose is to disrupt incum-
bent financial systems and corporations that rely less on
software. These firms provide specialised services in areas
of payment and remittances, lending, personal finance and
retail investment, and business infrastructure. The breeding
of these companies is a manifestation of strong customer re-
quirements for specialised and customised services. In 2015
worldwide, fin-tech firms received a total financing of US$
22.3bn while Indian fin-tech companies received US$ 1.6bn.
USD BN Deal Volume
2016 (Q1) 5.7 468
2015 22.3 1108
2014 12.7 871
2013 4.6 772
2012 3.2 610
2011 2.5 459
2010 1.8 338
Source: Accenture & KPMG
Global Fin-tech financing activity
BankBazaarApna Paisa
OxigenRemit2India
Mwipe
RemitguruFreechargeCitrus
ScripboxPerfios
Creditseva
AdvicesureMedimanage
Bluechip
PayTMMobikwikPayU
Capital floatLendingKart
Idifi
i-lendingFaircent
Neogrowth
ApnapaisaSwitchmeHomeloan
CoverfoxPolicybazaar
FundsIndia
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Lending Banking infrastructure
Payment and remittance
Personal finance and retail investment
These companies allow individuals and businesses to accept payments over the web and mobiles. These start-ups aim to integrate payment processing into websites and mobile apps without having to maintain merchant accounts. To minimise fraud, transfers are made directly into the bank accounts linked to the payee.
Many lending-services companies have recently sprung up to service the demand for access to finance from consumers and businesses alike. These lending-service start-ups aim to outwit traditional lending mechanisms and use alternative credit models and data sources to provide faster access to capital.
Another breed of fin-tech companies help individuals save money and manage and invest their finances. These kinds of companies generally help people to compare different options and enable them to make more informed decisions based on their personal needs.
New-age fin-tech companies are solving infrastructure issues for traditional banks, institutions, and start-ups by effectively using technology. These companies have drastically improved access to information, analytics, and digitised data sources – in short, they have done things that weren’t even thought of until a few years ago.
TYPES OF FIN-TECH COMPANIES
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Source: MXV Consulting
“The major segments that fin-tech companies have disrupted include mobile payments (PayTM), money transfers(Western Union), loans(Capital Float), and wealth management(Policy Bazar).”
Various financial products offered by fin-tech firms are at different stages of their product life cycles. Concepts such as crowd funding and consumer lending are at a nascent stage. These products would need legitimacy and recognition by the regulator and acceptance by customers. RBI’s recent consultation paper on peer-to-peer lending provides legitimacy to the consum-er-lending marketplace model. With increased acceptance by customers, P2P lending could gain traction. Ease of transaction and enhanced customer experience has attracted potential buyers of life insurance and general insurance to fin-tech companies like Policy Bazaar and Bank Bazaar. Payment services of fin-tech companies such as Paytm, PayU, or Citrus are widely used to avail services like cabs, utility bill payments, money transfer, shopping, and movie tickets. Payment and remittance gained wide acceptance among customers due to the ease of use and low transaction costs.
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Payment solutions: Continuous innovation; nothing is sacrosanct
B A N K S P R E PA R E D N E S S T O C O M B A T F I N -T E C H
Safe, secure, sound, and efficient payment
systems for the country have been the mission
of every regulator. In order to expand the reach
of the payment system and encourage product
innovation, the Reserve Bank of India (RBI) estab-
lished an umbrella organisation called National
Payment Corporation of India (NPCI) in 2009
for all retail payment systems in India. There has
been a shift in payment mode to clicks from cards
– mainly due to new technology, improved IT
infrastructure, and high smartphone penetration.
Data indicates that the trend is towards paperless
transactions.
The proportion of these (which includes retail
electronic clearing, mobile banking, and pre-
paid payment instruments or PPIs)has increased
rapidly to 28.1% in FY16 vs. just 7.4% in FY09.
Paper-clearing and even the usage of cards are
in a decline-mode. Within cards, the fall is mostly
in debit card usage at ATMs largely because of
increased acceptance of e-money by merchant
establishment and efficient and secure payment
systems. Emerging trends suggest that the pro-
portion of mobile banking and PPI will increase
significantly, largely substituting ATM transac-
tions.
Payment solution provided by banks in India are comparable to the best of fin-tech firms
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120
RTGS Retail Electronic ClearingCards Prepaid Payment Instruments (PPIs)Mobile Banking Paper Clearing
60
80
100
20
40
02015-16 2014-15 2013-14 2012-13 2011-12
Transaction volume through various payment instruments
Payments are paramount
Payments dominate the average consumer’s banking
relationship. Providing strong payment solutions
(as a part of a larger strategy for digital banking) is
imperative for banks. As per McKinsey’s report, the
average customer interacts with his or her bank at
least twice a day for payments-related matters, such as
buying a financial product, checking on a payment, or
paying a bill. These interactions represent more than
80% of customer interactions with the banks. Making
an excellent payments platform is necessary for cross-
selling other financial services.
Digital payments offer good solutions
Digital payments provide banks with a platform to boost
fee and interest income, reach out to the underserved
segment, and extend the value proposition.
• On the retail side: Mobile-payments solutions
(mobile peer-to-peer (P2P) money transfers,
international remittances, small-merchant mobile
card readers) not only increase the frequency of
consumer interactions but also boost the number of
charged transactions and the cash flowing through
the banking system (through prepaid, current
accounts, and consumption-related lending).
• On the corporate side: Transaction banks that
execute well on digital cross-selling can increase
their market share of corporate deposits and lending.
By tailoring payments solutions to the under-served
segments (small and informal merchants, youth,
international travellers, migrants, and low-income
customers), banks can shift a bigger share of
payments to bank-owned channels.
Banks should leverage data
Banks own rich reserves of raw behavioural data. Mobile
channels enhance this data pool with location and
search data, which can provide valuable insights into
future customer choices. Banks could leverage their
data strengths to create new services along the full span
of the consumer decision journey, reaching beyond
payments transactions to manage their customers’ entire
13GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 12
digital wallet (for example, by optimising loyalty awards
and special offers, payments terms, and instruments).
If banks cling to their traditional, narrow view of the
payments ecosystem, fin-tech firms will not only take
the additional revenues from these channels, but will
also enjoy prime access to a customers’ ‘digital trail’,
including essential transaction information and direct
traffic to preferred service providers within the digital
sphere.
Payment solutions have seen a sea change
The Indian market has seen the advent of fin-tech
companies – Paytm, Mobikwik, Oxigen, and Citrus Pay
– and the market share of pre-paid payment instrument
(PPIs) in total payment transactions in terms of volume
has increased to 4.8% from virtually nothing five years
ago. Increasing penetration of smartphones have
increased customers’ expectations from their bankers –
they demand efficient, safe, and cost-effective payment
solutions. Realising the gravity of the situation, most
banks now offer mobile and digital payments.
CY13 CY14 CY15
China 43 48 51
North America 57 64 69
India 9 13 17
Penetration of smart phone %
CY12 CY13 CY14 CY15
Smartphone shipment (mn) 16.3 44.0 81.5 102.6
Wireless subscriber (mn) 864.7 886.3 944.0 1010.9
Data Usage MB/user
Idea 140.0 257.0 490.0 635.0
Bharti 152.0 317.0 584.0 793.0
Smartphone shipment and data usage in India
Private banks are leaders, as alwaysPrivate banks have initiated their digital banking
transformation processes much ahead of their PSB peers.
Today, the products and features offered by private banks
are very much in line or even better than some of the
products offered by fin-tech companies. Mobile banking
commands close to double-digit share (10% of overall
transactions) for private banks while for PSB giants such
as SBI, it is just 3%. PSBs are definitely lagging behind
in their digital initiatives – the share of mobile banking
transactions is almost nil for PNB and BoI.
Not all is lost– cash is still king
At this point, not having a strong digital setup is not
necessarily the worst thing in the world. Mr. PareshRajde
(Chairman, Suvidha) pointed out in a GV conference
that in India, only 8% of the population transacts
electronically and the rest transacts in cash. Even for
a developed country like the US, 50% of transactions
still happen through cash. In India, around 90% of the
population earns their livelihood in cash. Hence, self-
service smartphone-based models cannot replace
brick-and-mortar banking models entirely, at least not
immediately.
To conclude, payment and remittance solutions
provided by private banks in India – either through net,
mobile, or phone banking platforms– are comparable
to the best of fin-tech firms. These banks have either
built technology or partnered with fin-tech firms.
Moreover, NPCI’s unified payment interface (UPI)
platform is all set to provide a payment solution based
on a virtual address, thus overcoming the need for
cumbersome bank account numbers or IFSC codes. Mr
Rajesh Prashad (Head, Rupay – NPCI) believes that card
transactions will continue in India for some more time,
“Collaboration between banks and fin-tech companies would enrich customer experience while healthy competition is also necessary to evolve technology.”
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AXIS BANK HDFC BANK ICICI BANKKOTAK MAHINDRA BANK
SBI
Digital Banking Axis Mobile - mobile banking; Ping Pay - wallet; Lime - social wallet
Mobile banking - PAYZAPP / HDFC Bank APP
iMobile/ PocketsMobile banking; Hash-tag Banking; kaypay
State Bank freedoM
No. of transactions 60 in axis mobile 100 in PAYZAPP 150 services in iMobile 70+ services na
Share of mobile banking in overall transaction volume
12% 6% 9% 14% 3%
Common Features1. View account details & transact - deposit / loan / credit card. 2. Money transfer Mobile. 3. DTH connection recharge. 4. Utility bill payment. 5. Wealth management products. 6. Demat account payment. 7. Merchant payment. 8. Account service request.
Special features Non bank customer can use PingPay to receive / request money & recharge
Lime is a social wallet - can be used to send / receive money through social media
Expense manager
Chillr is a mobile wallet can be used by bank and non bank customer
Apart from standard ser-vices, iMobile provides features like “Now block a card, stop a cheque, track your deliverables,“
Forex services, Invest-ment & Insurance
Manage payees, link accounts, cancel instructions
Pocket is a mobile wallet which can be used by bank customer as well as non bank customer also
Hashtag Banking - Banking though social media
Buddy is a wallet
Digital Solutions by Banks
even though people are moving to mobile technology.
Multiple payment technologies will coexist, as India is a
diverse market with different customer segments. Cash
transactions have not been completely replaced by cards,
even in the most advanced countries. There will be enough
space and opportunity for different players – whether it is
mobile wallets, payment banks, or a universal bank.
Unified payment interface can be a challenge to mobile
wallets
National Payment Corporation of India (NCPI) is set
to make transactions easier by introducing the Unified
Payments Interface (UPI). This interface will allow a user
to transfer money to another user in a single step. UPI
users will not need to use their credit/debit cards or net-
banking credentials to make/authenticate payments
through UPIs. Instead, users will be able to transact on
the UPI platform using a virtual address. A mobile-pin will
then be needed to authenticate the transactions. There is
NO separate or special app for UPI. It will be an update
to existing net banking apps of banks that would provide
UPI services. Initially, banks will be allowed to provide UPI
services through its net banking apps, but based on that
experience, PPIs may be included in the UPI ecosystem.
There is lot of debate about survival of wallets with the
advent of UPI services. Mr YadvendraTyagi (Director
Business development, Citrus) says that the unified
payment interface will actually help wallets, as customers
across banking channels would be able to use them.
However, their survival would depend on the product
quality and customer experience. The survival of a ‘wallet’
company would be at risk if its business model is based
around only money transfers. Fin-tech companies that are
building their business model around payment solutions
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The unique selling propositions of fin-tech companies
include:
1. Convenience: Anywhere, anytime banking
2. Faster turnaround times: Disbursement in less than a
week.100% online application. Minimum documentation
(KYC, bank statement, income tax return, VAT return).
Use algorithms and sift through data to find hidden
insights in order to make lending decisions quickly. This
ensures fast turnaround.
3. Superior credit evaluation: Use analytics and big data
scoring to evaluate client’s business. Have supply-
chain partnerships, which bring access to borrowers.
Transactional data to aid underwriting.
4. Lower operating costs: From application to collection
(through electronic repayment) the entire process is
digitised.
5. Flexible loan structure: Repayments are structured, which
suits the cash flow of the borrowers.
Digitisation in lendingPartnering can create a sea of change
Lending Business model Product loan size duration interest rate Revenue stream
Capital float
NBFC / SME loan market place
Working capital loan to online seller
1lac to 10mn 90-180 days 16-24% Spread & fee
Term finance 1lac to 5mn 6 months to 3 years 16-24% Spread & fee
Invoice finance 1lac to 10mn 30-180 days 16-24% Spread & fee
lendingkart SME loan market place Working capital loan
indifi SME loan market place Working capital loan
i-lending P2P personal loan market place
Personal loan 25k to 0.5mn 6-36 months 12%-24% Registration fee from borrow-er. Transaction fee from both borrower and lender
Faircent P2P personal loan market place
Personal loan 50k to 0.5mn 6-36 months 12% -24% Registration fee from borrow-er. Transaction fee from both borrower and lender
Neogrowth
NBFC Working capital loan to online seller
starting from 2lac
Retailer with EDC/ POS machine
Lending Solutions by fin-tech Companies
Customers have taken to digital channels like ducks
to water, compelling financial institutions to provide
the convenience of anywhere, anytime banking. While
digitisation has transformed transactional banking, it
has not made as big a mark in lending. This has led
to the rise of many online lending companies and non-
bank lenders (Lendingkart, Indifi, Iending, Faircent, and
New growth) that capitalise on the inefficient lending
process of banks.
The growth of these companies also demonstrates that
customers are looking for more convenience, which
digitisation can provide. The significant rise of non-
bank lenders has led banks to invest more in digital
technology, and form partnerships with them to retain
their positions as leading operators in the lending
market. Fin-techs are increasingly gaining legitimacy,
even with regulators, and are expected to gradually
gain customer trust.
15GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 14
Axis bank HDFC Bank ICICI Bank SBI
Loan products
Home loan Home loan Home loan Home loan
Two Wheeler/Car loan Two Wheeler/Car loan Car loan Auto loan
Credit Card Credit Card Credit Card Credit Card
Personal Loan Personal Loan/ Loan against securities Personal Loan Personal Loan
Loan against property
Education loan
Retail loan provided online by various banks
Fin-tech companies believe in symbiosisMost fin-tech companies and banks in India do not believe the disruption theory. They believe that banks and fin-tech companies need each other’s support to encourage product innovation and provide commercially viable solutions to customers.
• Banks need fin-tech companies to improve product delivery and customer experience, and enable them to not only manage increasing compliance costs, but also the risk of non-compliance.
• Fin-tech companies need banks for better customer understanding, to manage regulatory risks, and to support continuous innovation.
Mr K A Babu (Head Digital Banking, Federal Bank) calls his bank’s digital strategy 3As – Anywhere-Anytime-Any Device. He views digitisation as not just a cost-saving strategy, but also as a new revenue stream. He believes that in order to innovate, banks will collaborate with fin-tech companies and even invest in some of them in a quest to innovate.
• Introduced in India in 2006.• Hailed as an innovative way of serving the ‘un-
banked’ by allowing banks to reach them through a network of external agents. This model is very different from the conventional brick-and-mortar branch-based banking framework.
• It has seen varying degrees of success in India.
The business correspondent model
Lending game-changersThe size of fin-tech companies in the Indian lending
market may be insignificant, but the offerings they
have are noteworthy. Going forward, these offerings
could be game changers. NBFCs have already
adopted this changing face of lending into their
operations. Even banks have started disbursing some
of their retail products online, which offer twin benefits
of convenience to customers and lower underwriting
costs for the lender. Incrementally, more than 50%
of personal loans and credit cards are disbursed
online and the underwriting costs are 70-80% lower
than branch banking. Even the turnaround time has
dropped – to a few hours from a few days in the past.
Non-traditional data gatheringConsumer behaviour and marketing analytics are
driving a sustainable competitive advantage in an era
of eroding product differentiation, waning customer
loyalty, and exploding volume and variety of data.
Apart from pulling data from traditional sources
such as civil data, bank statements, and verification,
fin-tech companies are also gathering data in
non-traditional ways – such as shopping patterns,
academic records, and online footprints. Such data
is going to make credit decisions more mainstream;
banks will embrace this approach soon.
17GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 16
Banking with the underbanked – technology can disrupt micro financeThe growing influence of technology provides
a secure, efficient, and cost-effective solution
to the financial world. The much talked-about
‘underserved’ segment at the bottom of the pyramid
is still excluded from formal banking channels as
costs do not justify returns – the mathematics of high
product-delivery costs and low volumes makes the
risk-reward unfavourable. This model can provide
strong competition to micro-finance businesses,
where lending rates are very high. In fact, banks are
exploring this opportunity in a big way, as the yields
in traditional banking products are continuously
under pressure. The business-correspondent-
assisted unsecured loan distribution may not steal
a large chunk of the micro-finance market, but will
result in margin compression, which can be negative
for micro finance businesses. Data analytics and
customer’s financial transaction behaviour provides
insights into business opportunities for loan products.
Technology assistance can improve banks’ outreach
to hinterlands and create disruption in some of the
established models such as micro finance.
Suvidhaa point offering payment services
17GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 16
Suvidhaa
Suvidhaa, a PPI, acts as a business correspondent
for loan products for some large banks such
as Axis Bank. Its Chairman, Mr Paresh Rajde,
strongly advocates a collaborative approach with
banks, which can revolutionise loan products for
the underserved. This model provides last-mile
connectivity through the agent-assisted model.
Strong customer database and state-of-the-art
technology helps to underwrite unsecured loan
products much faster.
Sahaj
Just like Suvidhaa, Sahaj (an associate company
of Srei Infrastructure) provides digital services to
rural India through its 6,344 IT-backed common
service centres (CSC) across West Bengal, Bihar,
Odisha, Assam, Uttar Pradesh and Tamil Nadu.
Sahaj’s aim is financial inclusion; about 696 of its
CSCs act as business correspondents for banks.
“Average cost of each transaction at a branch is around Rs 60 while with self-service it is as low as Rs 10”
19GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 18
“Banks run the risk of becoming redundant if they do not adopt new technology”
Deposits and borrowings are any banks’
raw material and a strong franchise in
these determines its ability to withstand
competition. Providing a strong payments
plan, as part of a comprehensive strategy for
digital banking, is therefore an imperative
for any efficient and cost-effective deposit
franchisee.
Three factors have driven CASA growth of
late – electronic payments, internet banking,
and cards. The next wave of growth will
be driven by mobile banking. Banks have
embraced digitisation in their deposit
products very well. Opening a savings
account, to transactions in deposit accounts
anytime, anywhere is a reality. Demand from
customers for anytime anywhere banking
has necessitated the inclusion of self-service
features in a deposit account, which has
tremendously increased branch productivity
and reduced costs. As per Federal bank,
the average cost of each transaction at a
branch is around Rs 60 while with self-service
(internet,mobile,or phone banking), it is as
low as Rs10. As per State Bank of India, “A
mobile banking transaction costs about 2%
of the bank branching cost, 10% of ATM-
based transaction and 50% of the Internet
banking cost”
Important question –do banks require
so many branches?
Branches are vital touch points for
customers. It acts as a point to on-board
the customer, cross-sell new products,
and provides a sense of reliability to
the customer. Globally too, there are
contrasting examples – banks follow
varied strategies when it comes to building
customer touch-points. On one end of
the spectrum we have banks like Atom
and Fidor, whose strategy is branchless
banking; on the other, we have examples
of Wells Fargo in the USA, which believes
in the coexistence of both formats, even in
a country where financial literacy is much
higher. In the Indian context, banking
penetration is still underdeveloped,
customer ignorance about financial
product is high, and physical presence
provides a great sense of reliability. In
such a scenario, coexistence of branch and
digitisation seems to be an ideal strategy,
especially for mid- to small-sized banks.
Digitising depositsDefending core competence
19GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 18
As the banking industry goes
through a digital evolution, there is
a great shift in the way services are
rendered to the customers. From
only branch banking at brick-and-
mortar locations, banks are now
transforming to a digital platform
in order to save on personnel and
infrastructure costs and to reduce
reliance on service staff.
In the US, large banks were, up
until recently, consciously reducing
the number and size of their
branches, as they were adapting
to the changing behaviour of
their customers, who started
increasingly using digital channels
for banking. Despite large banks
such as Bank of America, Merrill
Lynch, JP Morgan Chase, and HSBC
rationalising and reducing their
branches, recent Federal Deposit
Insurance corporation (FDIC) data
reveals that per-capita number of
branches in the US have actually
been growing, given that these
large banks are setting up branches
in unrepresented metropolitan
cities. This is in contrast to the
generic view that digitisation in the
financial services industry would
make branch-banking services
redundant.
This San Francisco-based giant
believes that banks need to leverage
on branch-banking services along with
digital channels in order to effectively
reach out to customers and increase
the effectiveness of financial inclusion.
Wells Fargo is trying to achieve this
by integrating technology between
branches, mobiles, online banking
apps, ATMs, and call centres.
Wells Fargo holds the view that branch
banking continues to be an integral
part of the services value-chain. In
order to make rational decisions
about branch expansion, it has
been continuously monitoring data
related to traffic/footfalls and branch
performance. This data suggests that
in any given six months, 75% of its
customers visit a branch; this shows
that branches continue to add value
to the overall banking experience.
Another interesting aspect of these
footfalls is that a large chunk of them
are from ‘millennials’, who are usually
perceived to be tech savvy; but
apparently, they still visit branches to
initiate their financial relationship with
the bank. Most of its competitors have
been encouraging their customers
to open an account through mobile
applications, but Wells Fargo has a
neutral approach as 85% of its new
account sales have been through
From branch-banking to neo-bankingThe changing phases of the industry
Wells Fargo’s balanced strategy, based on data
21GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 20
A few examples of the revolution in the industry
Atom Bank is an example of a
revolution in the banking industry
and it is challenging the conventional
set up of existing banks. The bank
received its license in June 2015 and
became UK’s first bank to operate
completely through mobiles. The bank
has already introduced residential
mortgages and by the end of 2016,
it will roll out more products such
as fixed savings, current accounts,
overdrafts, and debit and credit cards
in a phased manner, which will all be
serviced through the app.
Another example of newbanks is Fidor
Bank in Germany, which redefines
traditional banking from the ground
up. Started from scratch, it aims
to provide a truly innovative and
differentiating customer experience
that offers a comprehensive suite of
financial products and services by
owning the entire infrastructure. The
bank adheres to two main principles
of financial innovation: openness and
community. Openness is the flexibility
and agility that enables banks to create
an extensive ecosystem of partners
and capabilities, while also leveraging
APIs to develop differentiating
applications. Community is about
bringing users together and solidifying
a bond between the bank and its
customers, as well as between
customers themselves.
The bank is the primary entity in
the Fidor Group, which holds two
additional entities: FidorTecS and
Fidor Payment Services. FidorTecS
is the development branch of Fidor
Group, developing, implementing,
and maintaining the fidorOS platform
and its library of APIs. It employs
around 30 developers and has been
a standalone organisation under
Fidor Bank since 2013. Fidor Payment
Services, as a strategic business unit
within Fidor Bank, provides payment
services for more than 40 payment
methods worldwide. It is the exclusive
enabler of Fidor payment products
and transaction business. FidorPays
leverages the network to allow users
to make payments between accounts,
transact with ‘crypto-currency’, and
make real-time payments across the
globe.
branches.
Wells Fargo builds and refines its
digital channels and uses them in
conjunction with branch banking. It
does not treat this as an ‘alternate’
platform. For example, the bank
provides its branch employees with
tablets, which communicate with
nearby ATMs – the purpose of this is
to serve customers in case they run
into any problem while transacting at
the ATM. Although customers have
been using the digital channel for
banking, branches continue to play
a pivotal role in rendering the entire
range of services.
Neo-banking surges aheadThe banking space is now seeing
a remarkable transformation in
terms of neo-banking, in which
banks are just a click away, as
there are no brick-and-mortar
locations. One of the key driving
forces for neo banking would be
tech-savvy customers who prefer
not to visit branches, a higher
number of millennials in the
customer composition, and greater
penetration of smart devices.
Neo-banking aims to simplify
online transactions, while reducing
overhead costs and passing on
these benefits to customers in the
form of lower interest rates or
lower fee charges. On the flip side,
neo-banking poses few challenges
in terms of large complex
transactions, which may require to
be carried out through a branch,
which neo banks do not have.
21GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 20
Higher customer expectations, unsatisfactory
wealth management services from banks, poor
after-sale services, and lack of expertise has
warranted the need for a specialised wealth
manager. Globally, financial services saw de-
bundling due to a need for specialisation. This
led to grooming of wealth management fin-tech
companies in India such as Policy Bazar, Coverfox,
FundsIndia and Scripbox.
Wealth and asset managers have, so far, enjoyed
a level of insulation from fin-tech disruption
due to two key factors – first, wealth and asset
managers operate in a highly regulated, formal
market. As regulators apply continued pressure
on increasing fee transparency across the industry,
organisations with higher operating costs will
become less attractive to consumers. Winners will
be wealth managers who are adaptable, agile,
and have low-cost models. Wealth management
products are ‘push products’ where customer
interaction is quite essential. A mere digital
platform may not suffice in a market like India.
Moreover, the penetration level of life insurance
is just 3.9% and share of mutual funds / equity
funds is just 2.7% of household savings.
Fee income on bancassuance, Rs bn
% to PBT
Axis 8.9 7.2
HDFC BANK 8.2 4.4
ICICI 10.2 8.4
Induidns 1.5 4.3
KOTAK 2.9 5.8
SBI 4.6 3.4
YES 0.6 1.5
Cross-selling revenue of banks
Nature of business USP
Coverfox Insurance aggregator Expert advice and an informed, unbiased opinion
Post sale service - renewal to claim process
Policybazar Insurance aggregator Expert advice and an informed, unbiased opinion
Post sale service - renewal to claim process
Fundsindia Mutual fund and deposit product aggregator Advisory services & post sale service
Personal finance and retail investment by fin-tech
Wealth management: Fin-tech not yet disrupting, but making inroads
It is too early for fin-tech companies to disrupt
banks’ wealth management businesses. The greatest
likelihood in the near-term is the southward movement
in fees and commissions on these products. Wealth
management and cross-selling account for 5% of
profit before tax for private banks. Falling rates
may force banks to look out for more cost-effective
alternate models to remain relevant. Banks that rely
heavily on cross-selling as part of their overall fee,
could have a tough time.
23GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 22
“Most banks in India believe that tie ups or collaboration with fin-tech firms would be an appropriate strategy to embrace digitisation”
Collaboration with fin-tech, coexistence of physical and virtual
D I G I T I S A T I O N S T R A T E G I E S O F B A N K S
As banks revaluate their core value propositions
and contemplate their digital strategies, they
essentially have a choice between three strategic
postures:
1. Followers
They have the choice to track other banks’
progress and develop service models that can
react to customers’ needs when a new concept
stabilises. These banks can invest in competitive
innovation centres, picking up ideas after they hit
the banking market.
2. Catalysts
Under this strategy, banks can invite others
to innovate while they ensure client security,
account management, and system stability. One
way of doing this is by opening the bank’s IT
platform to a select community of developers, or
by allowing others to provide services under their
client platform.
3. Innovators
In this strategy, banks can seize the opportunity
to be leaders, competing on innovation not only
with other banks but also with digital leaders, on
banking and non-banking services. Such leaders
would stand out as delivering comprehensive
digital solutions, and while they would bear the
risk of market adoption, they would garner a
reputation for innovation and industry leadership.
Most banks are comfortable adopting the ‘catalysts’ role…
Traditionally, most financial services incumbents
have been comfortable partnering or playing the
role of catalyst in their own industry – especially
where there is an opportunity to share processes
or services that are considered ‘non-core’, and
which help all collaborators either reduce their
costs or create new market opportunities. There
are many examples of such partnerships in India
– such as CIBIL, where various banks collaborated
to create an entity that provides data about a
borrower’s credit history. It helps loan providers
manage their businesses or help consumers
secure credit faster and at better terms. The use
of CIBIL’s products has led to a massive change in
the way the credit lifecycle is managed by both
loan providers and consumers. ARCIL is another
example – it helps banks by acquiring stressed
assets, subsequently reaching a resolution or
undertaking a recovery exercise.
23GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 22
“Most banks in India believe that tie ups or collaboration with fin-tech firms would be an appropriate strategy to embrace digitisation”
Banks Fin-tech Companies Key functions
HDFC Bank Senseforth Technologies Artificial Intelligence
Tagnpin Customer engagement)
Net Vigil Software QR code based payments)
Bugclipper Technologies Quality assurance
Tapits Technologies Biometric payments
Axis Bank MSWIPE Mobile POS solutions provider
MPAY Mobile POS solutions provider
NOVOPAY Consumer payment application
Prizm Payments Mobile POS solutions provider
Vayana Network End-to-end digital invoicing and payment solution
Fastacash Multi-social payment app
HDFC Bank Chillr Smartphone application for P2P money transactions
Safe 2 Pay A point of sale-free payment system
Taptis Technology A biometric payment company
Tagnpin Marketing and customer engage-ment tool
List of bank tie up with fin-tech companies
Coexistence of physical and virtual branches in India
Due to financial and social reasons, the con-
cept of branch banking in India cannot be
done away with. While setting up and running
a physical branch is undoubtedly expensive,
the situation in India is not as bad as it is in
the US or Europe. In the last few years, Bank
of America has reduced its branch strength
to 4,789 from 5,328 while JPMorgan Chase
slashed its branch count by 2% to 5,504. For
both organisations, the savings were sub-
stantial. While BofA’s workforce came down
by roughly 15%, JPMorgan Chase pruned
its staff strength by 6,000, leading to savings
worth US$500mnin H1 2015.
…but in the future, collaboration will need to go a step furtherIn order to maintain and grow value in these
times of change, established players will have
to keep looking at collaborating more closely
with those in different industries and outlooks.
Most banks in India believe that tie ups or
collaboration with fin-tech firms would be an
appropriate strategy to embrace digitisation.
There are several examples: ICICI Bank has
tied up with FinoPaytech, State Bank has tied
up with Reliance JIO, Kotak Mahindra Bank
has tied up with BhartiAirtel. The increasing
number of traditional banks tying up with
payment banks or fin-tech companies is a
testament to the collaborative approach.
SBI EZETAP Mobile POS solutions provider
Paytm Online and Mobile wallet
Bank Bazzar Online financial product aggregator
PayPal Digital payments company
ICICI Bank Paytm Online and Mobile wallet
Eko India Financial Services
Prepaid wallet service
Yes Ultracash Technologies Payments processing through sound waves.
Eko India Financial Services
Prepaid wallet service
Click & Pay Mobile-based payment solutions enterprise
IndusInd Bank
Eko India Financial Services
Prepaid wallet service
PayU Online payment solution
25GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 24
Banks in the US or in Europe are facing the heat of dwindling spreads in their
intermediation businesses. Moreover, high penetration of smartphones and financially
literate customers provide opportunities for fin-tech companies to disrupt the system.
This is not the case in India. Another important differentiator is social – in India, people
would not be inclined towards trusting a ‘faceless’ bank. They would want to know who
their banker is. Therefore, the idea of not having branches and physical presence for
assisting customers may not be a wise strategy for this country.
However, despite India’s peculiar predispositions, the fact is – the face of traditional
branch banking is already seeing a change and will continue to evolve. There can be
several innovative formats – from being ‘pure digital’ or ‘pure traditional’, branches
could end up being mixed models– where they offer the best of both. For instance,
a ‘single-employee’ branch model could work (especially for smaller coverage areas)
where most services would be digital, but a person would always be available for
support and assistance. Bank branches are not going to totally disappear – but they are
going to transform. Multi-formats would most certainly be the way ahead.
Here are two examples of co-existence strategies:
• New-age private bank IndusInd believes in the co-existence of the physical and
virtual. Physical branches are essential to ‘on-board’ a customer and cross-sell a
product, while virtual branches take care of the transactional needs of a customer
by providing them the option of anytime and anywhere banking.
• DCB Bank has initiated an aggressive branch expansion drive. It plans to add 150
branches in two years, thus doubling its network. This bank believes that a physical
footprint is essential to on-board customers and cross-sell new products. From a
customer’s perspective, DCB believes that the physical branch’s presence provides
a sense of reliability and trust, which is a key factor in banking.
“Bank branches are not going to totally disappear – but they are going to transform. Multi-formats would most certainly be the way ahead”
“As per State Bank of India, “A mobile banking transaction costs about 2% of the bank branching cost, 10% of ATM-based transaction and 50% of the In ternet banking cost”
25GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 24
Banks can attract the digital talent needed to evolve their offerings, but do they really have the culture?
C H A L L E N G E – E V O L V I N G T H E D I G I T I S A T I O N C U L T U R E
Internal structures and processes can often
prove to be restrictive, making it hard to
innovate from within. Instead, many banks are
looking at how they can work in conjunction
with external companies by using ‘lab’-type
formats – empowering digital teams to develop,
experiment, and evolve propositions before
integrating them back into the larger corporate
structure in a manner that is aligned with the
wider digital strategy of the business.
Rather than piloting a project and then facing
insurmountable obstacles, these experiments
provide ‘risk-free play grounds’ to try out new
technologies and provide the company with
the option of mainstreaming them only if they
become viable. This significantly reduces the
risks associated with large-scale changes and
increases the chances of delivering a favourable
outcome.
Major consulting firm Accenture suggests
following this ‘path’ to profitable digitization:
1. Awareness and ownership around
digitisation.
Throughout the organisation, people should
understand what digitalisation is and what
advantages it offers – this fosters a sense of
ownership about this process.
2. Design a digitisation roadmap.
Customers should be at the centre of this
roadmap. The design should include tactics for
using digital technologies to strengthen a bank’s
understanding of existing and future customers.
In this model, fostering participation of leaders
from all ranks, by designing a ‘digital business
value tree’ and considering potential digital
operating models is important. In this roadmap,
technology and skills required to harness the
true power of digital assets to deliver the desired
customer value has to be demonstrated.
3. Digitise the business model.
In this approach, it is necessary to make the
right choices about customer-value proposition,
resources, profit formula, and performance
metrics, and to nurture capabilities and culture
needed to support the business model and
transform digitisation into a driver of profitable
growth.
It is clear that the digitisation journey will not
be easy. However, by breaking it down into
stages and taking a disciplined approach, Indian
businesses can go beyond merely doing better.
Ultimately, they can transform their businesses by
activating new sources of revenue that take full
advantage of India’s rapid digital growth.
27GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 26
I N A B O X : A P P - O N L Y B A N K S
• This mobile-only bank was set up in 2009 in the middle of the financial crisis. It quickly established a very different approach to conventional banking, encouraging a two-way conversation about what features to offer and how to improve things.
• It was very early into the whole social finance thing too.
• Customers can sign in to their accounts via Facebook, but Fidor stresses that the social interaction is all about listening, and not just a gimmick. It’s even launched a ‘like’ interest rate: the more likes the bank gets on its Facebook pages, the higher the interest rate goes.
• Last year, Fidor proved its innovative quality again when it teamed up with Ripple to use blockchain-type protocol to power money transfer. The bank has about 300,000 users in Germany, and is also live in Russia. It’s now going to new markets like the UK and US.
• Entirely digital, but not entirely independent, Hello bank!was created by Europe’s BNP Paribas Group in 2013 at a reported cost of €80mn, and is now live in France, Italy, Belgium and Germany.
• The mobile-only bank provides a range of dedicated apps supported by extended-hours access to an account manager by video call, online chat, or phone. It offers a fee-free current account and even a savings account that comes with an Amazon voucher for €100.
• The app also includes a lot of social and gamification elements – savers can receive contributions from friends and family members through social networks; and there are tools that provide visual representations of an individual’s financial situation.
• The bank has said that it want to acquire 1.4 million customers by 2017.
• Simple was one of the first pioneers of digital-only banking. It made such an impact that it was sold to Spain’s second-largest bank, BBVA, in February 2014, for a US$117mn.
• By that point, US-based Simple had 100,000 users.
• Some of its eye-catching ideasincluded the ‘Goals’ tool, which lets users designate money for desired purchases, and Safe-to-Spend, which reveals how much is available to spend without affecting long-term goals.
• US-based GoBank competes closely with others such as Moven and Simple, but with one big difference – cus-tomers can deposit cash at branches of Wal-Mart.
• The bank was jointly created by prepaid card pioneer Green Dot Corporation and retail giant Wal-Mart, and launched last year. Shoppers can sign up for the bank in a branch, and deposit cash there too. Otherwise, the bank is entirely mobile.
• There are no minimum balance fees, monthly fees, or overdraft charges, provided customers have a minimum of US$500 in the account. Account holders can also use 42,000 ATMs without incur-ring any fees.
• As with other mobile banks, users can send P2P payments, set up alerts, manage their money and gauge spend against income in a user-friendly ‘Balance Bar’.
• France’s AXA Banque responded to the rise of mobile-only banks by starting its own – Soon – in June 2013.
• The new bank revolves around a radically re-imagined interface. The main emphasis is on past and future spending, which is illustrated by a vertically scrolling dial. In this way, the app also encourages users to think responsibly about their outgoing.
• It also embraces the social side of finances, giving users the chance to take pics of what they’ve brought and reveal them to friends via social media.
• This Berlin-based mobile-only bank received US$2mn in funding last year and is now live (by invitation) in Germany and Austria. It started out as a pre-paid card for kids, but changed its approach when it saw just how many adults sought it out.
• Its service is based around an app with a linked Mastercard.
• It also supports P2P payments to other mobile users and displays charts to help regulate spending.
• Everything is customisable – a user can set limits or even disable payments. Interestingly, it charges no extra fees for paying for overseas goods in foreign currencies.
• Its banking partner is Wirecard Bank, which holds all the appropriate licences.
• US-based BankMobile’s parent, Customers Bank, have 1.2 million student checking accounts.
• BankMobile aims to go after Millennials and be the ‘Uber’ of banking. Everything is done through the app, which is powered by Malauzai Software.
• Signing up for an account can be done in five minutes with a photo capture of official ID. Bills and cheques can also be photo scanned.
• There’s a Venmo-style P2P transfer feature, and customers get an ATM card they can use at 55,000 locations, but they can switch it off from their app as an added security measure.
• BankMobile doesn’t charge any fees on checking and savings accounts and offers a personal line of credit (max value of US$5,000).
• The firm says it’s targeting 25,000 customers in a year and 250,000 in five.
Bank-Mobile
27GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 26
Name Sector Key People Description
Funding Circle (US)
Founded in 2010
SME lending market place
Samir Desai • Funding Circle was created with one big idea – to revolutionise the out-dated banking system and secure a better deal for everyone
• With offices in the UK, US, Germany, Spain and in the Netherlands, it is the world’s leading marketplace exclusively focused on small businesses, providing a platform where investors can browse businesses that Funding Circle has credit-assessed and approved for lending.
• Once approved, businesses post their loan request on the Funding Circle marketplace. Here, investors choose which type of business to lend to, the amount of money they wish to lend, and the interest rate they want to earn.
Wealthfront (US)
Founded in 2011
Wealth management
Adam Nash • An automated investment service that combines financial expertise and technology to provide sophisticated investment management at prices that are affordable for everyone.
• Wealthfront makes it easy for anyone to get access to excellent, long-term investment management without the high fees or steep account minimums.
• Its mission is to provide access to the same high-quality financial advice offered by major financial institutions and private wealth managers (such as tax-loss harvesting), without high account minimums or costs.
Kreditech (Germany)
Founded in 2012
Retail banking Alexander Graubner Muller
• Kreditech is a technology company that delivers a range of custom-tailored financial services with a focus on under-banked consumers across the globe.
• It uses big data, proprietary algorithms, and automated workflows to acquire, identify and underwrite customers within seconds.
• Automated processes combined with self-learning algorithms ensure fast and convenient customer service, minimising cost and human error, while continually improving by incorporating new customer data.
Some of the flourishing fin-tech companies globally
• The mobile-only bank was launched in 2011, well ahead of the competition, and soft launched in mid-2013.
• Its features include some of the ideas that every mobile-only bank now deploys – real-time spending alerts, budget visualisations, and linked debit card. Last year, Moven bagged an US$8mn‘Series A’ led by SBT Venture Capital. It is now targeting an international rollout.
• In January, Moven confirmed it would roll out wearable banking on the Moto 360 smart watch. It was an example of the US firm’s desire to lead from the front in disruptive banking.
• UK-based Atom was formed in 2014 by Anthony Thomson, the man behind Metro Bank, and Mark Mullen, the former boss of First Direct.
• Atom is a low-cost app-based bank. It uses biometric security: face and voice recognition (with fingerprint ID coming soon) to log-in to its app.
• Based in Durham, Atom Bank has no branches or vast call centres. All contact with this bank is via an app, through which customers are able to talk to its 30-member service team.
• It plans to launch current accounts, loans, and mortgages by the end of 2016.
• A little different from the other banks in the list:Osper is a UK start-up targeted at children. This mobile-only bank service is built around an app and linked prepaid debit card (from MasterCard).
• Parents can top up the app with funds and set parameters for how it is used. They can use separate logins too. Kids can use the card for physical spend and the app for digital.
• Osper was a ‘graduate’ of the TechStars accelerator and closed a US$10mn (£6mn) funding round last year, led by London’s Index Ventures. The firm has some competition – it is very similar to another UK startup, GoHenry.
29GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 28
Name Sector Key People Description
Avant (US)
Founded in 2012
Consumer lending market place
Al Goldstein • Avant is a fast-growing marketplace-lending platform that is lowering the costs and barriers of borrowing for consumers.
• Through big data and machine-learning algorithms, the company offers a unique and highly customised approach to streamlined credit options.
• At its core, Avant is a tech company that is dedicated to creating innovative and practical financial products for all consumers.
ZhongAn (China)
Founded in 2013
Property Insurance
Jack Ma / Pony Ma
• ZhongAn is an innovative online property insurance company. It uses big-data technology to assist product design, automatic underwriting, auto claims, precision marketing, and risk management.
• It is the first company in China to be issued an internet (online) insurance license. The company is a joint venture between Alibaba Group Holding (an e-commerce company), Tencent Holdings (an online gaming and social networking company), and Ping An Insurance.
• ZhongAn offers a wide range of online insurance services to the Chinese market, catering to all socio-economic groups, with a major focus on travel, accident, and health.
Oscar (US)
Founded in 2013
Health insurance Joshua Kushner
• Oscar is focused on using technology to simplify the entire healthcare experience.
• A team of technology and healthcare experts looked at the current state of the US healthcare system and were frustrated by the horrible consumer experience. In response, they decided to reinvent how healthcare is delivered.
• They are reinventing how to manage care, process medical claims, control healthcare costs, and provide transparency.
• All this complexity will be hidden behind an easy experience for its members.
• Oscar is making the healthcare system simple, smart, and friendly.
Qufenqi (China)
Founded in 2014
Consumer durable finance
Min Luo(Co-founder and CEO)
• Electronics retailer that offers monthly instalment payment solutions to students and professionals in China.
• Primarily offers smartphones, laptops, and other consumer electronics online, allowing customers to choose their own down-payment option and the period for making regular monthly instalments.
• Customers have to close instalments within two years of the purchase.
• The business model is tailored for students and young white-collar workers, with the final price and monthly required payments shown transparently on the product page.
Some of the flourishing fin-tech companies globally
29GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 28
Mangu SinghMANAGING DIRECTORDelhi Metro Rail Corp
In an extensive interview with Mr Mangu Singh, the Managing Director of Delhi Metro Rail Corporation (DMRC), he talks about the evolution of the Delhi metro network, the executionchallenges it faced, and also about other metro projects in the country.
BY VIBHOR SINGHAL
Q: DMRC is currently implementing phase-3 of the
Delhi Metro, which will make it the fifth largest metro
network in the world. For a network that started just
15 years ago, it has come quite far. What are the key
features of this phase?
Phase-3, with its extensions, involves constructing about
160km of metro network in one go – something that
probably nobody anywhere in the world has done before.
If you remember, phase-1 was executed over seven years
and three months while phase-2 took less than five years
and covered 125km. In Phase 3, apart from just catering to
central Delhi, we have taken a quantum jump in technology
– we have used new coaches, signalling systems, and
automated driverless trains. (Phase-3 is essentially phase
1 + 2 put together.)
In phase 3, 90km will be ‘unattended train operations’ –
where there is no human intervention. Trains operating on
phase-1 and 2 lines cannot be shifted to driverless trains
because that will require technology upgradation. Phase
3 will decongest stations like Rajiv Chowk and Kashmere
Gate. With this phase providing more interchange options,
congestion at these stations will reduce significantly.
31GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 30
Q: What is the current passenger traffic and where do
you expect it to go after phase-3 is complete?
Current passenger traffic is 2.8mn per day. In 2015, we had
crossed 3.2mn in a day. After phase-3 is done, we expect it
to rise to 4mn.
Q: What will phase - 4 be about and what is its current status?
The DPR for phase - 4 is ready; it will comprise of 103km and
will be concentrated in the central part of the city. It will consist
of (1) Azadpur to RK Ashram – covering Sadar Bazar, Karol
Bagh – the third line for Old Delhi and (2) criss-crossing from
Inderlok to Indraprastha via Paharganj and ITO among others.
These two lines will be completely underground and there
will be two more lines. Phase-4 will provide more interchange
stations. Execution on this phase will start anytime now. We
will begin the preliminary work even before funding is secured.
Q: We have seen DMRC slipping into the red over the last
two years even though it is still profitable operationally.
While this is because of the expansion, do you see DMRC
returning to profit after phase-3 is over?
As you said, we are still profitable at the operational level;
however, our margins are shrinking. DMRC has always been
a lean organisation; earlier, we had set a target of employing
40 people per kilometre, which we are further tightening
to 34. We are constantly trying to improve this parameter.
Staff cost (salary) is not in our hands as it is decided by the
government, but we can control the number of people that
we employ. We are also concentrating on operational- and
energy-efficiency to reduce costs.
Q: DMRC has always been at the forefront of adopting
new technologies (incremental launching method, NATM).
Would you like to highlight anything on these lines in
phase 3?
Tunnelling is one subject where bookish knowledge doesn’t
work. Every project has something new. For example, in
phase-3, TBMs (tunnel boring machines) were not working
in a few places, hence we improvised. We don’t expect
any significant new technology adoption ahead; it is more
learning-based, gained through experience.
Let me give you another example – in phase 3, we used ‘U
girders’. We realised that girders that were being cast in
casting yards, in a factory environment, were superior to ones
assembled at the site. So we transported pre-fabricated ‘pier
to pier - U girders’ that were fabricated in casting yards, to
the site and just placed them on the piers.
In phase-3 our focus was primarily on reduction of labour
as skilled labour availability is very limited. In the harvesting
season, especially, we did not get any labour; so, we
mechanised many processes.
Q: DMRC has also been a consultant to all metro projects
in the country. How has your experience been with those
projects in terms of interference by state governments,
pace of execution, etc.?
DPRs and first-section tenders of all metro projects were
finalised by DMRC. We also built some of these metros
(Jaipur and Kochi). We built Jaipur within three years and
Kochi in less than four years – we have recently started trials
in Kochi. DMRC’s track record has been great. We are also
in the process of building Vijaywada and Mumbai Metro 2A.
Whenever DMRC takes a new project, we take full
responsibility for all the decisions about finalisation of
tenders, management of contracts, and decision about
developers. State support is always needed in areas such as
land acquisition, and law and order. The DPR is also prepared
in consultation with the state government authorities. Our
reputation has resulted in full support from government
agencies. Be it Jaipur or Kochi, we have had a complete free
hand. We expect this in Mumbai and Vijaywada too.
Q: The DPRs for Chandigarh and Ludhiana prescribe the
use of LRT (Light Rail Transit). How do you see that as an
option, especially for tier-2 cities in India?
Fundamentally, there is no difference between LRT and MRT.
In Europe, LRT means trams that run on surface. LRT is nothing
but a metro – if you run trains at lower frequencies or with
lesser coaches, it becomes an LRT. All these terminologies are
interchangeable.
If you expect lighter traffic, you can have lighter civil structures
– to run fewer trains with lesser coaches. Stations become
small, but it is still a metro – there is no fundamental difference.
Everything else including power supply remains the same.
Only if coach sizes are different, then you have a fundamentally
different model, but that will give you a maximum saving of
10%, not more than that. However, these coaches are not
upgradable to a higher capacity in the future. So, you cannot
run a five-coach train on infrastructure that was designed to
run a three-coach one – this is because the power supply and
station size would not be adequate. You can only increase the
frequency.
31GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 30
Q: What about monorail?
Monorail is completely different. Its only selling point is that
you can build it along sharper curves, and connect places
that have narrow roads. But the experience is highly inferior
because of single wheel. Another argument is that since the
structures needed for monorail are sleek, they do not obstruct
the skyview. However, the modern concept of life saving
/ rescue system for passengers means that the certifying
authorities will insist on a walkway along the monorail
corridors for passenger evacuation, thereby defeating the
skyview argument – and we are back to square one. We do
not consider monorail a proper solution for urban transport.
The biggest problem with monorail is the proprietary
technology. Therefore, if you want to extend a monorail even
by 5km, you have to go to the same rolling-stock vendor who
has supplied the earlier phase. Even for existing rolling stock,
spare parts can be procured only from the same vendor. On
the other hand, metro technology is so open that you can
add as many vendors as you like with the same specifications.
Q: Our interaction with many rolling stock manufacturers
suggests that the tender-award process in India is quite
different from global norms. Globally, tenders are
awarded on LCC (lifecycle cost), but in India we seem to
use only upfront purchase price as the bidding criterion;
the fear is that this renders companies with superior-
quality coaches (which would be initially expensive, but
with lower maintenance costs later) unable to win many
contracts. What are your views on this?
This is not 100% true. Different practices exist worldwide.
For the first five years, rolling stocks do not require any
major maintenance, largely because specifications are very
stringent. Metros like those in Russia go for complete lifecycle
cost, but having five or ten years does not make sense
We do not include maintenance cost, as we believe that the
vendors’ costs will be much higher than our departmental
cost. Our maintenance would be much cheaper.
In the last tender for Phase 3 – we included energy consumption
in the bidding process for rolling stock. Anybody proposing
inferior energy consumption was loaded with a penalty on
the submitted bid, and the winner was decided on this basis.
This is going to result in significant cost saving as energy cost
is 40% of our total operational costs.
Q: How has your experience been with developers
– foreign and domestic? Do Indian developers have
sufficient delivery capabilities? What is a concern in this
area according to you?
The Delhi metro project was so large that players from
over the world worked on it; we never had any problem of
capability deficiency. The problem is that the window of work
is very small – we are building 160km over 3-4 years – they
ALL have to work in that time frame.
Since the employment of contractors is for a limited period
only, once execution on a specific stretch is over, the
developer has to wait for the next contract to be awarded.
Resources are limited. Even if we want contractors to grow
and become big in this domain, it is difficult, as this is not a
regular job for them. They cannot be asked to bring in huge
resources in terms of the viability of their contracts.
Most of the tunnelling work is done by international players.
In phase-2, we saw Indian players taking on important
roles, although in JVs with international players, mainly for
consumables and spare parts for TBMs that are not available
in India and therefore easier to procure with a partner.
Q: In your opinion (personal or professional), does
investment of this magnitude in metro projects make
sense, especially for tier-2 cities that do not require
metros today?
If you have the scope to widen roads, there is no question,
right? You should do it! Most of our cities – even tier-2 cities
– have populations of more than 4-5 million. They are not
tier-2 cities in the global sense of the definition. My point
is, if you delay making metros for these cities today, and
start building them after 10 years, it is just going to be more
costly and more difficult to build. I think it is more prudent
to plan a better public transport system today, as the return
to society is much higher in terms of man-hours saved, and
lesser pollution and fuel consumption.
You see, we need to move to an ecosystem where public
will not mind paying for high-quality infrastructure. However,
we have made a system where we don’t charge people
adequately for obvious reasons. Still, our cost of construction
is 50% lower than most metro projects across the world, even
Kuala Lampur and Shanghai Beijing. While the investment
might appear huge in absolute terms, it is still much less
when compared globally.
Overall, I believe that investment in metro projects has many
more tangential benefits than the ones that are easily visible.
If you include them all, these investments are a very small
price to pay.
33GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 32
BY VIBHOR SINGHAL
Q: Could you talk a bit about Bombardier’s global
operations?
Bombardier is a Canadian company, headquartered in
Montréal. In FY15, we posted revenues of US$ 18.2bn. We
are the best in class in the transportation industry with 61
production and engineering sites in 28 countries, and a one-
stop solutions provider for sustainable modern mobility in
the 21st century. We move millions of people every day in
countries around the world; today, over 110,000 Bombardier
rail vehicles operate globally.
As a global leader in rail technology, we have significant
international experience in manufacturing, engineering,
technological innovation, services and fleet management –
and we plan to bring all of these aspects to India.
Q: How about Bombardier’s India operations? Could you
tell us about those?
India is one of the world’s most important railway markets
for us. In India, we have a well-established manufacturing
operation. Additionally, we have engineering capabilities and
a supplier and employee base, which consists of over 1900
highly skilled employees. We see huge opportunity in India
what with Mass Transit systems planned in over 50 cities by
2050, the modernisation of the Indian Railways’ network, and
plans for semi high-speed and high-speed trains.
In India, we have a railway vehicle manufacturing site and
bogie assembly hall at Savli near Vadodara in Gujarat state.
Our propulsion systems manufacturing facility is also in
Vadodara at Maneja. We have a rail control solutions centre for
project delivery and product engineering, and an information
services hub near Gurgaon. And we also have an Engineering
Centre in Hyderabad.
In 2007, we invested ~€ 33mn in a state-of-the-art railway-
vehicle manufacturing facility at Savli in Gujarat. Overall, we
have invested ~US$ 100mn over the last two decades in
Indian manufacturing sites, people, engineering, the local
supplier network, and in proven technologies.
We are actively contributing to the ‘Make in India’ program
by delivering rail vehicles, products, and solutions that are
developed locally, for both Indian and foreign markets. We
also support the Indian government’s vision on ‘Skill India’ with
locally-grown talent now delivering projects, as well
as the ‘Clean India Movement’ by regularly
arranging clean up drives in Vadodara.
Bombardier truly incorporates “Make
in India for India” and “Make in India
Mr. Harsh Dhingra, Chief Coun-
try Representative, India, Bom-
bardier Transportation, takes GV
through his company’s journey
in India, its operations here, and
talks about the opportunity he
sees in the Indian rail segment
(railways and metros).
Harsh DhingraCHIEF COUNTRY REPRESENTATIVE, INDIA
Bombardier Transportation
33GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 32
for the World”.
Q: How has your relationship been with Delhi Metro
Rail Corporation (DMRC)?
Bombardier is the Delhi Metro’s largest supplier of
signalling systems and one of its largest suppliers of rolling
stock with more than US$ 1.2bn worth of orders placed
since 2007. We have delivered 614 BOMBARDIER MOVIA
metro cars and recently we have received an additional
order of 162 cars from DMRC – this makes it one of the
largest operating fleets in the world for Bombardier. We
have also delivered signalling solutions for more than
120km track length for Lines 5, 6 and 7.
Q: What has your relationship been with Indian
Railways (IR)?
Bombardier’s long-standing relationship with IR began
in 1993, with a design-and-build contract for electric
mainline passenger and freight locomotives. We now
supply propulsion equipment to IR for locomotives. In
June 2016, we completed in-house production for the
supply of propulsion and electrical equipment to Mumbai
Railway Vikas Corporation (MRVC) for 72 twelve-car trains.
Q: What is the potential opportunity in India, in the
metro segment, over the next five years?
Over the next 5-7 years, various cities in India will procure
approximately 3000 metro cars and 20 signalling lines. The
Indian government expects 50 cities to have a population
of over 2mn each by 2050, and is encouraging them to
develop mass transit systems. This will generate demand
for urban transit solutions, in which we excel.
We are focused on projects that we consider strategic
with long-term prospects for our operations in India. We
are closely pursuing various metro projects in the cities of
Delhi, Ahmedabad, Mumbai, Nagpur, Pune, Vijayawada,
Vizag, and Bengaluru, along with light rail projects in
Kerala state.
Q: How much localisation of technology have you
achieved at your India plant?
Bombardier’s investment in Gujarat has attracted global
“I appreciate the efforts of Bombardier Transportation to invest in India through the FDI route. We acknowledge the contribution of Bombardier in supporting India’s “Make in India” and “Skill India” programme by producing trains for India and for exports from India” – Mr. Narendra Modi, Honourable Prime Minster, India. at a meeting with Bombardier officials in May 2016
vendors to set up production facilities, within Gujarat
around our sites. This has increased the local content
considerably from the time manufacturing started at the
site in 2008. Currently the local content is at around 70%.
This means an increasing amount of our product is truly
Indian, with components available in INR, and not subject
to the volatility of international currency markets.
Q: What is the competitive landscape like in this
segment?
In terms of manufacturing facilities, three companies
have a base in India – Bombardier, BEML, and Alstom.
Along with these companies, we compete with Korean,
Japanese, Chinese and a host of other European players
in the Indian rail market.
Q: How have exports been from your Indian factories?
Our Savli site has developed extensive export-oriented
activities. We are currently supplying bogie components
for Adelaide EMUs, Victoria trains, Riyadh Metro and
São Paulo monorail and 75 six-car trains with bogies
for Queensland New Generation Rolling stock (QNGR)
project. Vehicle assembly and bogie manufacturing for
QNGR is taking place at the Savli facility while the Maneja
facility is supplying a portion of the propulsion equipment.
Three six-car trains have been delivered to date and they
are undergoing testing at our Wulkuraka Maintenance
Facility in Ipswich, Australia. These trains have travelled
more than 10,500km by road and sea from Savli to the
Port of Brisbane.
Q: Have you seen any changes with the new government
at the centre taking charge since 2014?
The Indian government, formed after the 2014 general
election, is actively pursuing a long-term vision for
sustainable and stable railways in India. Its ambitions are
huge and focused, with emphasis on improving safety,
expanding rail infrastructure, increasing track capacity,
reducing congestion, raising passenger comfort levels,
technological innovations, and faster train speeds.
Rail is considered a significant engine of inclusive growth
35GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 34
for India, with the potential to contribute up to 2% of
GDP, compared to current 1% levels. To maintain historic
levels of national growth at 7-8%, railway needs to grow by
~9.5% every year. This will create new jobs, save energy,
and improve the environment, while moving people, raw
materials, and goods more efficiently nationwide.
Q: Where will the money to transform India’s rail
transportation come from?
The Ministry of Railways has outlined its vision of railways
becoming a key provider of connectivity and enablers
of economic development, with a proposed US$ 125bn
investment over the next five years (2014-2019).
During its initial days in office, the government introduced
a plan for 100% FDI in the railways. In all, 17 areas have
been identified where industry players can invest up to
100% from which IR expects to collect around US$ 13bn.
In funding mass-transit systems, both the state and central
governments contribute ~20-25%, while the rest is funded
by outside agencies such as Japan’s JICA, Germany’s KfW,
the French AFD, European Investment Bank, and Export
Import Bank of India.
Q: Are you looking to bid for Mumbai Line 3 (MM3);
what is the timeline that you’re expecting for it?
We are interested in bidding for MM3 for Rolling stock
and Signalling contracts. We understand civil contracts for
MM3 will be awarded soon. The RFQ for rolling stock is
already out and we expect RFQ for signalling shortly. We
expect contract finalisation by Q2/2017, with supplies to
be made in 2019.
Q: Have tenders been invited for Phase 2 for the Jaipur
metro?
There are ongoing feasibility and alignment studies for
Phase 2 of Jaipur. Once we have more clarity on Phase 2
with detailed specifications, we will be able to comment
further.
Q: What is the scope of driverless trains, which will
be used in DMRC Phase 3? Does it require superior
technology? Who, apart from Bombardier, has that
technology?
The driverless technology goes back 40 years – Bombardier
was among the first companies to start implementing
this technology in 1983. The key advantage of driverless
technology is that it brings down the headway to 90
seconds from the current levels of around 2 minutes,
which is a welcome introduction for the commuters.
Driverless technology has two parts – rolling stock and
signalling, which have to be properly interfaced. For the
Phase-3 of the Delhi Metro, 60% of signalling has been
done by Bombardier, whereas trains are supplied by Rotem.
Q: It has been often cited that standardisation of
contracts/specifications is required in India – do you
agree with that?
Yes, standardisation helps in reducing costs. The
Indian market is maturing; things are moving towards
standardisation, and we strongly support this. We have
also been recommending that the authorities change the
bidding parameter to LCC (life-cycle cost) from acquisition
cost – this will help bring in international practice of
procurement.
Q: In its last Phase 3 bids, DMRC included a penalty
for energy efficiency. How was that received by the
industry?
Yes, the DMRC had proposed levying a penalty in the bid
on energy efficiency. Energy efficient products are always
preferred and I am sure that the industry welcomes it.
The understanding on evaluation methodology amongst
supplier and buyer is a key.
Q: What is opportunity for a player like Bombardier
from freight corridors, being developed by Indian
Railways?
If you see the current Indian Railways network, the average
speed of passenger trains on “A” routes (7,000-8,000km,
connecting important cities), is very low, due to movement
of freight trains. Freight trains move at ~25km/hr while
passenger trains move at ~40 km/hr (max 75km/hr). With
DFC in operation, the freight traffic will migrate to DFC
from the “A” routes. This will increase freight movement
speeds to 80km/hr and decongest the “A” routes. Hence,
IR can not only introduce more passenger trains on the “A”
routes, but can also increase their average speeds. This
migration will create demand for locomotives, coaches,
semi high-speed trains, as well as wagons.
35GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 34
Indian Economy – Trend Indicators
Monthly Economic Indicators
Quarterly Economic Indicators
Growth Rates (%) Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16
IIP 4.8 2.5 3.0 2.5 4.2 4.3 6.3 3.7 9.9 -3.4 -0.9 -1.5 2.0 0.1
PMI 51.2 52.1 51.3 52.6 51.3 52.7 52.3 51.2 50.7 50.3 49.1 51.1 51.1 52.4
Core sector 2.3 -0.7 -0.4 4.4 3.0 1.1 2.6 3.2 3.2 -1.3 0.9 2.9 5.7 6.4
WPI -2.1 -2.3 -2.4 -2.2 -2.1 -4.0 -5.1 -4.6 -3.7 -2.0 -0.7 -0.9 -1.0 -0.9
CPI 5.4 5.3 4.9 5.0 5.4 3.7 3.7 4.4 5.0 5.4 5.6 5.7 5.3 4.8
Money Supply 11.2 10.8 10.8 11.0 11.0 11.5 11.3 11.0 10.9 10.7 11.0 11.1 11.3 10.3
Deposit 11.2 10.7 10.7 11.5 11.4 11.8 11.9 11.3 11.1 10.4 10.9 11.1 11.0 9.9
Credit 7.2 8.7 9.2 8.8 9.5 9.4 9.0 7.5 9.0 9.8 11.1 11.4 11.6 11.3
Exports -13.3 -20.8 -14.0 -20.2 -15.8 -10.3 -20.7 -24.3 -17.5 -24.4 -14.7 -13.6 -5.7 -5.5
Imports -14.7 -14.2 -7.5 -16.5 -13.4 -10.3 -9.9 -25.4 -21.2 -30.3 -3.9 -11.0 -5.0 -21.6
Trade deficit (USD Bn) -6.7 -11.4 -11.0 -10.4 -10.8 -12.8 -12.5 -10.5 -9.8 -9.8 -11.7 -7.6 -6.5 -5.1
Net FDI (USD Bn) 3.2 2.7 3.3 3.8 1.7 1.7 2.2 2.8 4.9 2.7 3.6 4.1 2.8 1.5
FII (USD Bn) 3.8 2.0 3.1 -2.8 -2.0 -0.7 -3.5 -2.4 4.5 -3.8 -2.6 -1.5 -2.4 4.3
ECB (USD Bn) 2.3 2.7 7.3 2.4 3.2 2.1 0.8 2.6 2.1 3.2 3.0 1.4 1.4 1.5
NRI Deposits (USD Bn) 61.8 62.5 63.4 63.8 63.7 64.1 66.5 65.6 65.3 66.7 66.2 67.8 68.4 66.2
Dollar-Rupee 338.1 341.4 344.6 352.5 355.2 353.3 355.4 350.0 353.6 351.6 352.1 349.2 346.8 355.6
FOREX Reserves (USD Bn) 295.8 291.9 293.4 296.4 287.9 284.6 280.2 275.5 276.3 283.0 291.3 295.7 292.2 294.4
Balance of Payment (USD Bn) Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16Exports 79.8 83.7 81.7 85.3 79.0 70.8 68.0 67.6 64.9Imports 112.9 114.3 116.3 123.9 118.3 102.5 102.2 105.0 98.9Trade deficit -33.2 -30.7 -34.6 -38.6 -39.3 -31.7 -34.2 -37.4 -34.0Net Invisibles 29.1 29.3 26.7 28.5 30.9 30.2 28.0 29.2 26.9CAD -4.1 -1.3 -7.9 -10.1 -8.4 -1.5 -6.1 -8.2 -7.1CAD (% of GDP) 0.9 0.3 1.6 2.0 1.7 0.3 1.2 1.6 1.3Capital Account 23.8 9.2 19.2 16.5 23.6 30.7 18.1 7.2 10.5BoP 19.1 7.1 11.2 6.9 13.2 30.1 11.4 -0.9 4.1
GDP and its Components (YoY, %) Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16Agriculture & allied activities 3.8 4.4 2.6 2.8 -2.4 -1.4 1.6 2.0 -1.0Industry 5.5 5.5 8.1 6.2 3.4 7.2 7.1 8.4 11.0Mining & Quarrying 4.2 11.5 4.3 7.0 9.1 2.3 8.6 5.0 6.5Manufacturing 5.9 4.4 8.4 5.8 1.7 8.4 7.3 9.0 12.6Electricity, Gas & Water Supply 3.9 5.9 10.1 8.8 8.8 4.2 4.0 7.5 6.0Services 8.3 5.6 8.4 9.9 11.7 8.0 8.5 8.3 8.6Construction 3.8 1.2 6.5 5.3 4.9 1.4 6.0 1.2 4.0Trade, Hotel, Transport and Communications 12.4 9.9 12.1 8.4 6.2 14.1 10.5 8.1 10.1Finance, Insurance, Real Estate & Business Services 5.7 5.5 9.3 12.7 12.1 10.2 9.3 11.6 9.9Community, Social & Personal Services 9.1 2.4 2.8 10.3 25.3 0.1 6.1 7.1 7.5GDP at FC 6.6 5.3 7.4 8.1 6.7 6.1 7.2 7.5 7.1
37GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 36
Annual Economic Indicators and Forecasts Indicators Units FY8 FY9 FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E
Real GDP growth % 9.3 6.7 8.6 8.9 6.7 4.5 4.7 7.2 6.8 7.5
Agriculture % 5.8 0.1 0.8 8.6 5.0 1.4 4.7 0.2 2.0 4.0
Industry % 9.2 4.1 10.2 8.3 6.7 0.9 -0.1 6.6 5.7 6.7
Services % 10.3 9.4 10.0 9.2 7.1 6.2 6.0 9.4 8.5 8.8
Real GDP Rs Bn 38966 41587 45161 49185 52475 54821 91698 98271 104953 112825
Real GDP US$ Bn 967 908 953 1079 1096 1008 1517 1611 1615 1684
Nominal GDP Rs Bn 49864 56301 64778 77841 90097 101133 113451 126538 137626 153212
Nominal GDP US$ Bn 1237 1229 1367 1707 1881 1859 1876 2074 2117 2287
Population Mn 1138 1154 1170 1186 1202 1219 1236 1254 1271 1302
Per Capita Income US$ 1087 1065 1168 1439 1565 1525 1518 1655 1666 1757
WPI (Average) % 4.7 8.1 3.8 9.6 8.7 7.4 6.0 2.0 -2.0 4.0
CPI (Average) % 6.4 9.0 12.4 10.4 8.3 10.2 9.5 6.0 5.0 5.0
Money Supply % 22.1 20.5 19.2 16.2 15.8 13.6 13.5 12.0 12.0 13.0
CRR % 7.50 5.00 5.75 6.00 4.75 4.00 4.00 4.0 4.0 4.0
Repo rate % 7.75 5.00 5.00 6.75 8.50 7.50 8.00 7.50 6.75 6.25-6.5
Reverse repo rate % 6.00 3.50 3.50 5.75 7.50 6.50 7.00 6.50 5.75 5.25-5.5
Bank Deposit growth % 22.4 19.9 17.2 15.9 13.5 14.4 14.6 11.4 12.0 13.5
Bank Credit growth % 22.3 17.5 16.9 21.5 17.0 15.0 14.3 9.5 10.0 12.0
Centre Fiscal Deficit Rs Bn 1437 3370 4140 3736 5160 5209 5245 5107 5351 5339
Centre Fiscal Deficit % of GDP 2.9 6.0 6.4 4.8 5.7 5.2 4.6 4.1 3.9 3.5
Gross Central Govt Borrowings Rs Bn 1681 2730 4510 4370 5098 5580 5641 5920 5850 6000
Net Central Govt Borrowings Rs Bn 1318 2336 3984 3254 4362 4674 4536 4531 4406 4252
State Fiscal Deficit % of GDP 1.5 2.4 2.9 2.1 1.9 2.0 2.5 2.4 2.0 1.5
Consolidated Fiscal Deficit % of GDP 4.4 8.4 9.3 6.9 7.6 6.9 7.1 6.6 5.9 5.0
Exports US$ Bn 166.2 189.0 182.4 251.1 309.8 306.6 318.6 316.7 270.0 283.5
YoY Growth % 28.9 13.7 -3.5 37.6 23.4 -1.0 3.9 -0.6 -14.8 5.0
Imports US$ Bn 257.6 308.5 300.6 381.1 499.5 502.2 466.2 460.9 406.0 428.3
YoY Growth % 35.1 19.7 -2.5 26.7 31.1 0.5 -7.2 -1.1 -11.9 5.5
Trade Balance US$ Bn -91.5 -119.5 -118.2 -129.9 -189.8 -195.6 -147.6 -144.2 -136.0 -144.8
Net Invisibles US$ Bn 75.7 91.6 80.0 84.6 111.604 107.5 115.2 116.2 118.8 121.1
Current Account Deficit US$ Bn -15.7 -27.9 -38.2 -45.3 -78.2 -88.2 -32.4 -27.9 -17.2 -23.7
CAD (% of GDP) % -1.3 -2.3 -2.8 -2.6 -4.2 -4.7 -1.7 -1.4 -0.8 -1.0
Capital Account Balance US$ Bn 106.6 7.8 51.6 62.0 67.8 89.3 48.8 90.0 50.4 75.5
Dollar-Rupee (Average) 40.3 45.8 47.4 45.6 47.9 54.4 60.5 61.2 65.0 67.0
Source: RBI, CSO, CGA, Ministry of Agriculture, Ministry of commerce, Bloomberg, PhillipCapital India Research
37GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 36
Note
: For
ban
ks, E
BITD
A is
pre-
prov
ision
pro
fit
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Cham
bal F
ertil
isers
Agri
Inpu
ts 6
4 2
6,76
0 1
06,6
26
105
,340
8
,258
8
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3
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3
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9
9
3
6.9
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7
.4
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1
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3 6
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6.9
Zuar
i Agr
oche
mica
lsAg
ri In
puts
197
8
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3
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iaAg
ri In
puts
210
4
0,77
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8
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mica
ls Lt
dAg
ri In
puts
411
1
04,5
90
181
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40
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.5
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ri Se
eds
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ts 4
05
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d Ph
osph
orus
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Inpu
ts 5
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1
28,9
03
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sant
o In
dia
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ts 2
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dustr
ies
Agri
Inpu
ts 6
36
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158
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6
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man
del I
ntl
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Inpu
ts 2
28
66,
392
98,
386
105
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7
,489
9
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3
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4
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1
2 1
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.4
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1
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Deep
ak Fe
rtilis
ers
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Inpu
ts 1
67
14,
752
33,
995
n.a
. 5
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n
.a.
2,6
10
n.a
. 3
0 n
.a.
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0 n
.a.
5.7
-
0.8
-
3.7
-
15.
2 -
11.
6 -
Tata
Mot
ors
Auto
mob
iles
387
1
,258
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2
,582
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2
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3
85,5
05
456
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1
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25
158
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3
7 4
9 -1
4.9
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3 1
0.4
7.9
1
.8
1.5
4
.7
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1
7.4
18.
7 8
.2
9.4
Bhar
at Fo
rge
Auto
mob
iles
774
1
80,2
76
75,
839
85,
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970
17,
919
8,5
56
10,
428
37
45
19.
2 2
1.9
21.
1 1
7.3
4.4
3
.7
12.
0 1
0.4
21.
0 2
1.4
15.
4 1
7.3
Mah
indr
a & M
ahin
dra
Auto
mob
iles
1,3
34
828
,786
3
83,8
40
426
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5
2,58
6 5
9,71
6 3
3,77
6 3
9,06
9 5
7 6
6 9
.4
15.
7 2
3.4
20.
2 3
.5
3.2
1
5.9
13.
8 1
5.2
15.
6 1
2.9
13.
8
Asho
k Ley
land
Auto
mob
iles
104
2
96,3
98
175
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12,2
76
19,
077
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825
8,9
08
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375
3
4
280
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38.
9 3
3.3
24.
0 5
.1
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1
6.1
12.
7 1
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17.
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15.
5
Apol
lo Ty
res
Auto
mob
iles
159
8
0,73
1 1
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04
118
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1
9,24
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9 9
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2
0 1
8 -3
.1
-11.
3 7
.8
8.8
1
.3
1.2
4
.5
4.9
1
8.6
14.
1 1
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12.
3
Mar
uti S
uzuk
iAu
tom
obile
s 3
,854
1
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57,9
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8
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52
47,
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2
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29.
3 3
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3
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9 1
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3 2
0.0
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Mah
indr
a CIE
Auto
mob
iles
186
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j Aut
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tom
obile
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1
50
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Mot
oCor
pAu
tom
obile
s 2
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5
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78
283
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3
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724
49,
335
31,
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1
75
24.
1 1
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18.
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7.3
6
.1
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1 1
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38.
9 3
6.1
38.
7 3
6.0
Cum
min
s Ind
iaCa
pita
l Goo
ds 8
65
239
,792
4
8,07
4 5
6,01
4 8
,184
1
0,07
4 7
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9
,102
2
9 3
3 1
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13.
9 3
0.0
26.
3 7
.5
6.8
2
9.2
23.
7 2
5.1
25.
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7
Engi
neer
s Ind
iaCa
pita
l Goo
ds 1
86
62,
653
15,
978
15,
186
1,7
36
2,1
95
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2,8
03
8
8
-17.
6 3
.0
23.
0 2
2.3
2.3
2
.3
22.
0 1
7.9
10.
1 1
0.1
10.
2 1
0.3
Siem
ens
Capi
tal G
oods
1,1
73
417
,604
1
03,6
09
112
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8
,137
1
0,25
9 6
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8
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1
7 2
4 7
3.7
39.
1 6
7.7
48.
6 8
.8
8.1
4
8.2
37.
3 1
3.0
16.
6 1
0.6
13.
6
Crom
pton
Gre
aves
Capi
tal G
oods
64
39,
861
127
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1
42,4
59
6,2
20
8,7
09
1,4
86
3,5
78
2
6
-19.
3 1
40.8
2
6.8
11.
1 1
.0
0.9
9
.1
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3
.7
8.4
3
.2
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VA Te
ch W
abag
Capi
tal G
oods
592
3
2,27
5 2
8,94
2 3
3,62
2 2
,388
2
,883
1
,225
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2
3 2
7 9
.6
21.
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7 3
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1
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13.
4 9
.8
10.
6
Volta
sCa
pita
l Goo
ds 3
26
107
,819
5
5,46
8 5
8,40
1 3
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2
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1
1 -1
8.5
36.
1 3
9.8
29.
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4.2
3
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6 1
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9
BHEL
Capi
tal G
oods
126
3
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258
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31
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904
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5
n.a
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.a.
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2 2
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0.9
0
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-14.
9 1
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2
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m T&
DCa
pita
l Goo
ds 3
53
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333
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950
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904
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8
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6 4
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5
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24.
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1.1
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4 1
3.1
39GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 38
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
ABB
Indi
aCa
pita
l Goo
ds 1
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en &
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l Goo
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rnat
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ds 1
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Ther
max
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tal G
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768
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Alsto
m In
dia
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ia B
hara
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ent
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gala
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ent
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emen
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Indi
a Cem
ent
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ent
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n
.a.
151
.7
29.
3 1
1.7
0.8
0
.7
6.9
5
.2
2.7
6
.0
4.6
6
.4
Ambu
ja C
emen
tCe
men
t 2
21
342
,969
2
17,5
73
257
,518
2
8,95
5 4
1,40
1 1
3,50
6 1
8,53
1 7
9
-2
9.3
37.
2 3
2.5
23.
7 2
.3
2.3
1
1.2
7.7
7
.2
9.5
1
0.4
10.
7
ACC
Cem
ent
1,4
62
274
,559
1
14,3
28
126
,246
1
1,73
0 1
5,91
7 7
,520
9
,415
4
0 5
0 -3
5.3
25.
2 3
6.5
29.
2 3
.3
3.1
2
2.3
16.
7 8
.9
10.
8 8
.1
9.7
Ultra
tech
Cem
ent
Cem
ent
3,2
28
885
,764
2
69,1
93
323
,990
4
8,32
1 6
5,05
6 2
2,32
1 3
3,55
7 8
1 1
22
6.4
5
0.3
39.
7 2
6.4
4.2
3
.7
20.
0 1
4.3
10.
6 1
4.1
8.2
1
1.0
LIC H
ousin
g Fin
ance
Finan
cials
469
2
36,7
88
124
,490
1
47,1
47
25,
186
29,
807
16,
280
19,
248
32
38
17.
4 1
8.2
14.
6 1
2.3
2.6
2
.2
9.4
7
.9
19.
2 1
9.4
1.3
1
.3
DCB
Bank
Finan
cials
92
26,
122
6,2
08
7,6
81
3,5
53
3,2
10
1,6
23
1,2
98
6
5
-15.
1 -2
0.0
15.
9 1
9.9
1.7
1
.5
7.4
8
.1
10.
0 7
.4
0.9
0
.6
Indu
sind
Bank
Finan
cials
1,0
66
634
,375
4
5,34
7 5
4,52
6 4
2,49
3 5
0,35
2 2
2,78
3 2
6,94
8 3
9 4
6 1
4.1
18.
3 2
7.6
23.
3 3
.7
3.3
1
4.9
12.
6 1
6.6
14.
6 1
.9
1.8
Repc
o Ho
me
Finan
ce
Finan
cials
648
4
0,55
2 2
,508
1
0,98
7 2
,508
3
,196
1
,492
1
,901
2
4 3
0 2
0.7
- 2
7.2
21.
4 4
.3
0.1
1
6.2
16.
1 1
7.0
18.
4 2
.2
2.2
Punj
ab N
atio
nal B
ank
Finan
cials
79
155
,811
1
72,7
75
195
,620
1
27,1
47
140
,053
3
1,25
9 4
3,19
5 1
6 2
1 -3
.9
31.
7 5
.0
3.8
0
.5
0.5
1
.2
1.1
7
.9
9.8
0
.5
0.6
Bank
of I
ndia
Fin
ancia
ls 8
7 7
1,04
0 1
13,0
51
127
,049
6
3,90
2 7
4,17
6 -3
1,88
7 1
1,07
6 -2
1 1
7 -1
82.5
-1
78.1
-4
.1
5.3
0
.6
0.5
1
.1
1.0
-1
1.5
3.8
-0
.5
0.2
Corp
orat
ion
bank
Finan
cials
38
38,
343
43,
730
49,
080
32,
989
36,
350
-1,9
21
2,6
48
22
26
28.
4 1
5.1
1.7
1
.5
0.1
0
.1
1.2
1
.1
-1.8
2
.3
-0.1
0
.1
Bank
of B
arod
a Fin
ancia
ls 1
58
363
,251
1
23,9
08
144
,969
8
5,90
3 1
03,2
71
-15,
488
35,
224
10
17
-33.
2 6
5.5
15.
4 9
.3
1.1
0
.9
4.2
3
.5
-4.0
8
.8
-0.2
0
.5
Stat
e Ba
nk o
f Ind
iaFin
ancia
ls 1
89
1,4
63,2
84
761
,480
8
65,2
03
504
,778
5
04,6
29
126
,779
1
45,0
77
24
28
4.2
1
5.1
7.9
6
.8
1.0
0
.9
2.9
2
.9
7.3
7
.6
0.4
0
.7
Unio
n Ba
nk
Finan
cials
118
8
1,15
2 8
2,19
4 9
0,63
5 5
8,33
3 6
3,77
4 1
2,76
2 1
1,36
5 3
4 4
3 1
9.7
26.
8 3
.5
2.8
0
.5
0.5
1
.4
1.3
6
.6
5.4
0
.3
0.3
39GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 38
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
ABB
Indi
aCa
pita
l Goo
ds 1
,284
2
72,1
65
81,
403
92,
625
7,1
25
8,6
33
2,9
99
3,8
85
14
18
15.
8 2
9.6
90.
8 7
0.1
9.0
8
.5
38.
2 3
1.5
10.
0 1
2.1
9.5
1
1.0
Lars
en &
Toub
roCa
pita
l Goo
ds 1
,316
1
,226
,388
1
,017
,884
1
,127
,411
1
19,2
64
138
,973
4
4,07
9 5
4,79
3 4
7 5
9 -0
.2
24.
3 2
7.9
22.
5 2
.8
2.6
1
8.5
15.
7 1
0.0
11.
4 4
.4
4.9
KEC
Inte
rnat
iona
lCa
pita
l Goo
ds 1
31
33,
563
87,
242
93,
074
6,7
69
7,5
31
1,8
07
2,2
90
7
9
59.
4 2
6.7
18.
6 1
4.7
2.3
2
.0
8.1
7
.1
12.
2 1
3.8
9.5
1
0.3
Ther
max
Capi
tal G
oods
768
9
1,52
4 5
4,82
8 5
1,41
6 4
,676
4
,543
2
,825
2
,720
2
4 2
3 2
1.0
-3.7
3
2.4
33.
7 3
.9
3.7
1
9.9
19.
6 1
2.2
11.
0 9
.6
8.6
Inox
Win
dCa
pita
l Goo
ds 2
37
52,
539
42,
332
49,
830
6,7
64
8,5
19
4,5
31
5,7
15
20
26
71.
0 2
6.1
11.
6 9
.2
3.0
2
.4
8.9
7
.0
26.
1 2
6.3
18.
0 1
8.3
Alsto
m In
dia
Capi
tal G
oods
618
4
1,53
6 2
3,14
4 2
7,90
0 1
,174
1
,741
9
18
1,4
70
14
22
-33.
8 6
0.1
45.
2 2
8.3
3.6
2
5.5
16.
3 8
.0
8
.5
25.
8
Dalm
ia B
hara
t Ltd
Cem
ent
880
7
8,17
8 6
5,28
8 8
0,83
0 1
3,49
5 2
0,02
0 1
,308
5
,202
1
5 5
9 1,
205.
6 2
97.7
5
9.7
15.
0 1
.7
1.7
1
0.6
7.1
2
.9
11.
6 5
.0
7.7
Shre
e Ce
men
tCe
men
t13
469
469
,221
6
0,80
3 8
8,59
1 1
4,34
0 2
5,23
4 5
,323
1
1,14
6 2
04
320
6
6.5
57.
1 6
6.1
42.
1 8
.2
7.0
3
2.0
17.
7 1
2.4
16.
7 1
1.8
17.
1
Man
gala
m C
emen
tCe
men
t 2
64
7,0
55
8,4
61
9,6
55
513
1
,075
-1
87
220
-7
8
n
.a.
n.a
. -3
7.7
32.
1 1
.4
1.3
2
4.5
11.
1 -3
.7
4.2
0
.9
4.6
OCL I
ndia
Cem
ent
507
2
8,82
0 2
5,12
1 2
9,24
5 4
,144
5
,573
1
,878
3
,025
3
3 5
3 3
8.2
61.
0 1
5.3
9.5
2
.1
1.8
7
.0
4.7
1
3.5
18.
7 1
1.1
16.
5
JK La
kshm
i Cem
ent
Cem
ent
344
4
0,52
0 2
5,75
4 3
2,67
1 4
,009
5
,450
7
05
1,9
04
6
16
-57.
9 1
70.2
5
7.5
21.
3 2
.9
2.6
1
4.9
10.
4 5
.0
12.
4 5
.5
8.4
JK C
emen
tCe
men
t 5
90
41,
226
34,
229
40,
965
4,5
96
6,5
98
638
1
,910
9
2
7 -4
8.9
199
.5
64.
6 2
1.6
2.5
2
.3
14.
9 1
0.2
3.8
1
0.6
4.6
6
.9
Heid
elbe
rgCe
men
tCe
men
t 9
9 2
2,41
2 1
8,15
1 2
0,06
1 2
,156
2
,962
3
62
989
2
4
n
.a.
173
.3
61.
9 2
2.7
2.5
2
.2
14.
5 9
.8
4.0
9
.8
4.2
6
.8
Indi
a Cem
ent
Cem
ent
92
28,
322
58,
814
65,
319
8,2
24
9,9
26
966
2
,430
3
8
n
.a.
151
.7
29.
3 1
1.7
0.8
0
.7
6.9
5
.2
2.7
6
.0
4.6
6
.4
Ambu
ja C
emen
tCe
men
t 2
21
342
,969
2
17,5
73
257
,518
2
8,95
5 4
1,40
1 1
3,50
6 1
8,53
1 7
9
-2
9.3
37.
2 3
2.5
23.
7 2
.3
2.3
1
1.2
7.7
7
.2
9.5
1
0.4
10.
7
ACC
Cem
ent
1,4
62
274
,559
1
14,3
28
126
,246
1
1,73
0 1
5,91
7 7
,520
9
,415
4
0 5
0 -3
5.3
25.
2 3
6.5
29.
2 3
.3
3.1
2
2.3
16.
7 8
.9
10.
8 8
.1
9.7
Ultra
tech
Cem
ent
Cem
ent
3,2
28
885
,764
2
69,1
93
323
,990
4
8,32
1 6
5,05
6 2
2,32
1 3
3,55
7 8
1 1
22
6.4
5
0.3
39.
7 2
6.4
4.2
3
.7
20.
0 1
4.3
10.
6 1
4.1
8.2
1
1.0
LIC H
ousin
g Fin
ance
Finan
cials
469
2
36,7
88
124
,490
1
47,1
47
25,
186
29,
807
16,
280
19,
248
32
38
17.
4 1
8.2
14.
6 1
2.3
2.6
2
.2
9.4
7
.9
19.
2 1
9.4
1.3
1
.3
DCB
Bank
Finan
cials
92
26,
122
6,2
08
7,6
81
3,5
53
3,2
10
1,6
23
1,2
98
6
5
-15.
1 -2
0.0
15.
9 1
9.9
1.7
1
.5
7.4
8
.1
10.
0 7
.4
0.9
0
.6
Indu
sind
Bank
Finan
cials
1,0
66
634
,375
4
5,34
7 5
4,52
6 4
2,49
3 5
0,35
2 2
2,78
3 2
6,94
8 3
9 4
6 1
4.1
18.
3 2
7.6
23.
3 3
.7
3.3
1
4.9
12.
6 1
6.6
14.
6 1
.9
1.8
Repc
o Ho
me
Finan
ce
Finan
cials
648
4
0,55
2 2
,508
1
0,98
7 2
,508
3
,196
1
,492
1
,901
2
4 3
0 2
0.7
- 2
7.2
21.
4 4
.3
0.1
1
6.2
16.
1 1
7.0
18.
4 2
.2
2.2
Punj
ab N
atio
nal B
ank
Finan
cials
79
155
,811
1
72,7
75
195
,620
1
27,1
47
140
,053
3
1,25
9 4
3,19
5 1
6 2
1 -3
.9
31.
7 5
.0
3.8
0
.5
0.5
1
.2
1.1
7
.9
9.8
0
.5
0.6
Bank
of I
ndia
Fin
ancia
ls 8
7 7
1,04
0 1
13,0
51
127
,049
6
3,90
2 7
4,17
6 -3
1,88
7 1
1,07
6 -2
1 1
7 -1
82.5
-1
78.1
-4
.1
5.3
0
.6
0.5
1
.1
1.0
-1
1.5
3.8
-0
.5
0.2
Corp
orat
ion
bank
Finan
cials
38
38,
343
43,
730
49,
080
32,
989
36,
350
-1,9
21
2,6
48
22
26
28.
4 1
5.1
1.7
1
.5
0.1
0
.1
1.2
1
.1
-1.8
2
.3
-0.1
0
.1
Bank
of B
arod
a Fin
ancia
ls 1
58
363
,251
1
23,9
08
144
,969
8
5,90
3 1
03,2
71
-15,
488
35,
224
10
17
-33.
2 6
5.5
15.
4 9
.3
1.1
0
.9
4.2
3
.5
-4.0
8
.8
-0.2
0
.5
Stat
e Ba
nk o
f Ind
iaFin
ancia
ls 1
89
1,4
63,2
84
761
,480
8
65,2
03
504
,778
5
04,6
29
126
,779
1
45,0
77
24
28
4.2
1
5.1
7.9
6
.8
1.0
0
.9
2.9
2
.9
7.3
7
.6
0.4
0
.7
Unio
n Ba
nk
Finan
cials
118
8
1,15
2 8
2,19
4 9
0,63
5 5
8,33
3 6
3,77
4 1
2,76
2 1
1,36
5 3
4 4
3 1
9.7
26.
8 3
.5
2.8
0
.5
0.5
1
.4
1.3
6
.6
5.4
0
.3
0.3
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Cana
ra B
ank
Finan
cials
188
1
02,2
72
91,
757
99,
117
69,
458
71,
508
10,
027
14,
946
48
65
-15.
4 3
5.3
3.9
2
.9
0.5
0
.4
1.5
1
.4
3.7
5
.1
0.2
0
.2
Indi
an B
ank
Finan
cials
86
41,
401
44,
674
48,
420
31,
614
33,
215
7,3
86
9,1
03
22
28
5.3
2
8.6
3.9
3
.0
0.4
0
.4
1.3
1
.2
5.7
6
.7
0.4
0
.4
Orie
ntal
Ban
k of C
omFin
ancia
ls 8
4 2
7,09
4 5
3,53
8 5
9,12
6 3
8,91
3 4
1,59
6 5
47
4,2
62
31
43
86.
7 3
8.7
2.7
2
.0
0.3
0
.2
0.7
0
.7
0.4
3
.0
0.0
0
.2
ICIC
I Ban
kFin
ancia
ls 2
32
1,3
48,0
40
211
,212
2
43,0
27
250
,632
2
56,0
01
120
,868
1
30,5
80
21
22
7.9
7
.8
11.
1 1
0.3
1.7
1
.6
5.4
5
.3
14.
3 1
4.0
1.8
1
.7
Shrir
am Tr
ansp
ort F
inFin
ancia
ls 1
,120
2
54,0
29
50,
117
58,
103
36,
904
43,
284
13,
587
14,
911
60
66
9.8
9
.7
18.
7 1
7.0
112
.0
112
.0
6.9
5
.9
13.
9 1
3.5
2.1
2
.0
Shrir
am C
ity U
nion
Fin
Finan
cials
1,6
44
108
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6
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.2
AXIS
Ban
kFin
ancia
ls 4
93
1,1
74,5
97
163
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6
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1
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CIFC
Finan
cials
894
1
39,5
63
20,
710
24,
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12,
220
14,
700
5,3
04
7,2
24
34
46
12.
5 3
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26.
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3.8
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HDFC
Lim
ited
Finan
cials
1,1
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1,8
89,2
52
311
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38
17.
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4
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Mah
& M
ah Fi
naFin
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ls 2
99
169
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3
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7
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HDFC
Ban
kFin
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ls 1
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2
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324
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5
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1
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SKS
Micr
ofina
nce
Finan
cials
598
7
6,12
2 1
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4 1
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6
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4
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2
4 3
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8.5
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Andh
ra B
ank
Finan
cials
51
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59,
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18
32.
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2
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0.4
0
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1.0
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8
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Indi
an O
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eas B
ank
Finan
cials
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7.1
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-
Asia
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FMCG
929
8
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21,
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19
22
25.
9 1
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49.
7 4
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32.
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9 3
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Hind
usta
n Un
ileve
rFM
CG 8
53
1,8
45,8
38
317
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3
50,5
77
63,
333
71,
861
41,
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46,
775
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22
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1
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3 5
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7 2
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Baja
j Cor
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CG 3
93
57,
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17
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CG 3
18
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60,6
21
360
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4
04,2
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143
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1
65,7
20
96,
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111
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2 1
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7 7
.3
6.3
1
7.1
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7.8
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5
Emam
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CG 1
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2
43,8
77
26,
597
32,
691
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71
9,6
52
5,7
37
7,6
02
25
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18.
2 3
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5 3
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16.
6 1
3.7
34.
7 2
5.2
39.
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2.8
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6 2
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Nestl
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CG 5
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5
50,5
63
81,
236
99,
957
16,
018
21,
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10,
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12,
236
108
1
27
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8 4
8.0
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5 4
9.1
Jubi
lant
Food
work
sFM
CG 1
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7
7,50
7 2
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8,92
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3
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1
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1
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1
7 2
3 -1
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38.
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51.
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0
Mar
ico In
dustr
ies
FMCG
254
3
28,0
91
61,
223
66,
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10,
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12,
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7,2
50
8,6
61
6
7
30.
1 1
9.5
45.
3 3
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15.
2 1
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Colg
ate
FMCG
837
2
27,6
38
40,
943
45,
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9,4
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10,
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6,2
25
6,6
81
23
25
11.
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36.
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23.
7 2
1.1
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9 7
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2 7
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Agro
Tech
Food
sFM
CG 4
83
11,
765
7,8
02
8,4
15
543
6
38
235
3
37
10
14
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9 4
3.4
50.
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3.5
3
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21.
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9
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7.5
9
.4
Dabu
r Ind
ia Lt
dFM
CG 2
91
512
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8
4,36
0 9
6,11
2 1
5,19
9 1
7,39
9 1
2,52
8 1
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8
1
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14.
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35.
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10.
4 3
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28.
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2
Godr
ej C
onsu
mer
Pro
dFM
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4
90,1
13
89,
573
99,
180
16,
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18,
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11,
312
12,
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33
38
24.
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9.4
7
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31.
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Brita
nnia
FMCG
2,9
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5
41GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 40
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
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) EV
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TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
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16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Apco
tex I
ndus
tries
FMCG
288
5
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2
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5
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4
06
531
2
26
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1
1 1
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32.
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20.
1 5
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1
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11.
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24.
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9
Glax
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Cons
FMCG
6,0
83
255
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4
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1 4
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7
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1
67
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2
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3
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6
J Kum
ar In
frapr
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tsIn
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re 2
49
18,
829
14,
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18,
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14
15
21
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1
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6.7
6
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1 1
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10.
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PNC
Infra
tech
Ltd
Infra
struc
ture
534
2
7,42
1 1
9,51
2 2
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3
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1
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1
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2
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29.
8 2
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1.9
1
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9.5
1
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3
GMR
Infra
struc
ture
Infra
struc
ture
12
72,
431
108
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9
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8 4
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GVK
Powe
rIn
frastr
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1
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7 1
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MBL
Infra
struc
ture
s Ltd
In
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31
5,4
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21,
433
24,
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9
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KNR
Cons
tructi
onIn
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re 5
18
14,
569
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12,
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7
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5 1
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4.6
NCC
Infra
struc
ture
78
43,
168
79,
658
83,
644
7,1
29
7,7
37
2,1
77
3,0
03
4
5
94.
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8 1
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1
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8.6
7
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6.4
8
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10.
0 1
0.4
ITD C
emen
tatio
n In
frastr
uctu
re 1
33
20,
566
36,
304
41,
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3,0
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3,9
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1,0
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1,5
32
7
10
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50.
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2.8
9
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1
7.2
20.
6 1
4.1
15.
8
Asho
ka B
uild
con
Infra
struc
ture
139
2
6,04
2 2
6,75
8 3
3,20
1 7
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1
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9 9
63
1,3
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5
7
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4
4.5
27.
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1
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8.5
6
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6
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4.5
6
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Adan
i Por
ts &
SEZ
Infra
struc
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195
4
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46
69,
353
71,
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49,
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26,
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29,
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13
14
15.
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12.
4 1
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4 1
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10.
7 1
1.0
IRB
Infra
struc
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Infra
struc
ture
220
7
7,21
4 4
9,10
4 5
5,49
2 2
6,35
5 3
1,49
5 5
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6
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1
7 1
8 2
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8.0
1
3.1
12.
1 1
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1.2
8
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7.4
1
1.2
10.
1 3
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3.5
Min
dtre
e Lt
dIT
Serv
ices
660
1
10,8
09
46,
896
55,
710
8,2
99
10,
163
6,0
33
7,2
72
36
43
12.
3 2
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18.
3 1
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4.6
3
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13.
1 1
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25.
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5.0
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5 2
6.3
Wip
roIT
Serv
ices
542
1
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5
12,4
40
560
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1
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86
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8
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NIIT
Tech
nolo
gies
IT Se
rvice
s 4
74
29,
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26,
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29,
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4,7
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5,0
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3
Info
sys T
echn
olog
ies
IT Se
rvice
s 1
,210
2
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6
24,4
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1
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90
198
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6
Tata
Con
sulta
ncy
IT Se
rvice
s 2
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5
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1
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1
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3
06,7
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HCL T
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IT Se
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Pers
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tem
sIT
Serv
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737
5
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KPIT
Tech
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IT Se
rvice
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65
32,
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33,
766
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Tech
Mah
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481
4
66,9
07
263
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DB C
orp
Limite
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330
6
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Jagr
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41GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 40
Phill
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43GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 42
CMP
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Cap
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43GROUND VIEW GROUND VIEW 1 - 30 JUNE 2016 1 - 30 JUNE 2016 42
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