NIIT Tech reported marginally lower than expected quarterly results, with revenues unchanged due to reduced purchase for resale in domestic government business, while services revenues grew 4.3% sequentially. The company has healthy order wins providing visibility for revenue growth. At the current market price of Rs 376, NIIT Tech trades at 6.9x FY15 estimated earnings. The report maintains a "Buy" rating with a revised target price of Rs 440, citing the company's focused growth story and improving margins. YES BANK reported quarterly profit higher than estimates due to lower provisions despite higher delinquencies. While deposit growth declined sequentially, advances grew strongly. The bank needs additional borrowings to fund growth, impact

1. IEA-Equity
Strategy
India Equity Analytics
16th Jan, 2014
Daliy Fundamental Report on Indian Equities
NIIT Tech :"Focused on growth story"
"BUY"
Edition : 185
16th Jan 2014
For 3QFY14, NIITTECH reported marginally below numbers than street estimates, sales was unchanged at Rs587.3cr because of reduced
purchase for resale (PFR) in domestic Government business while revenues from services grew 4.3% sequentially. Company’s Order wins in the
recent quarters have been healthy, lending visibility on revenue growth. At a CMP of Rs 376, trades at 6.9x FY15E earnings. We retain “ buy”
view on the stock with a price target of Rs 440 (revised from Rs360) ........................... ( Page :2-4)
YES BANK :
"Neutral"
16th Jan 2014
Yes Bank profit growth was higher than expectation due to lower provisions made of bank despite of reporting higher delinquencies. Balance
sheet growth on sequential basis declined led by lower incremental deposits (other than CASA) whereas advance grew handsomely. Leverage
ratio (Total asset to Net worth) has been declining from past four quarters indicating no surplus liquidity in balance sheet. Moreover bank need
additional borrowings to fund its growth trajectory, this would result of higher cost of fund and margin compression. We remain have neutral
view on the stock and reduce our target price to Rs.388 from Rs.443.................... ( Page :5-8)
CMC : "Nothing for excitement"
"Neutral"
16th Jan 2014
we expect that its earning visibility and order from government side in coming 2 quarter could be impacted because of general election
schedule in India (earns 41% revenue from India). For a near to medium -term prospect, we are not much excited on the stock taking its earning
visibility in near term. We had already advised to book profit on 9th Jan 2014 at a target price of Rs 1690, now we have a “Neutral” view on the
stock. At a CMP of Rs 1527, stock trades at 16.5X FY15E earnings ................................... ( Page : 9-11)
Coal India LTD :
"BUY"
15th Jan 2014
A Rs 1800-crore fine could possibly mean less profits for the company and less dividend income for its owners. But as the main owner, the
government, will pocket this amount in the form of a fine, it will not be poorer in any way.Recently Coalindia after a long discussion with govt
declared Rs29/share intrim dividend .which recovers our ROE estimate for FY14 to 40% from 33%.which is up 4% YOY.we revised our EPS
estimate for FY14 to 28.4 which is 3.4% YOY (including 2100 CR realization Gain).Hence we Upgrade coal india to a target price of RS.334/(previously 310)................................................ ( Page : 12- 14)
UltraTech Cement Ltd :
"BUY"
14th Jan 2014
We are expecting 8%-15% Sales growth with ~19% ROE in FY15E.We expect cement demand to pick up from 2HFY14 onwards driven by
governments pre-election spending as well as on account of rural demand pick post the good monsoon witnessed this year. UTCL is a largest
cement player in India and we expect it to maintain or increase the same through timely commissioning of capacities, which are expect to come
on stream by FY15E.We value the stock and arrive at the target price of Rs 1846. As from the current level the upside is very limited (10%), so we
recommend investors to "Buy" the stock at lower level dips to get a decent returns over a time horizon of 12-18 months
................................................. ( Page :15- 17)
DB Corp :"On strong footing"
"BUY"
14th Jan 2014
In view of upcoming general election, we expect government ad spending to go up substantially. Being one of the biggest player, company will
benefit from this. Considering its long-term growth story with favorable earning scenario and leadership position in key market, we are positive
on the stock. We initiate “BUY” view on the stock with the target price of Rs 340. At a CMP of Rs 305, stock trades at 4.3x of FY15E P/BV
............................................... ( Page : 18-19)
Zensar Tech :"Better growth trajectory"
"BUY"
14th Jan 2014
The deal booking and pipeline is good and expects to perform well going forward. It expects double digit growth in the Enterprise Services
business for the FY15E on the back of healthy pipeline. Also, it anticipates good growth from the IMS for the FY'15E. Considering healthy order
pipeline and its earning visibility in near future, we maintain “BUY” view on the stock and we revise our target price from Rs 400 to Rs 440. At a
CMP of Rs 412, stock trades at 7.2x FY14E EPS .............................................. ( Page : 20-21)
Narnolia Securities Ltd,

2. NIIT Tech
"BUY"
16th Jan' 14
"Focused on growth story"
Result update
Buy
Below than street expectations, but confident on future growth;
CMP
Target Price
Previous Target Price
Upside
Change from Previous
376
440
360
17%
22%
For 3QFY14, NIITTECH reported marginally below numbers than street estimates, sales
was unchanged at Rs587.3cr because of reduced purchase for resale (PFR) in domestic
Government business while revenues from services grew 4.3% sequentially. During the
quarter, company has been able to maintain healthy order book and eyeing on strong
order pipeline.
Post earning, management is gearing up for its paradigm shift in growth strategy for the
future and set an aspirational target to grow revenues to USD 1 bn in the next 5yrs. They
stated that, margins will start seeing improvement from Q4FY14, led by the
improvement in the margin from the Geographic Information Systems (GIS) business
and the Morris joint venture.
PAT declined by 12%(QoQ) impacted by a loss in other income as a result of revaluation
of foreign currency assets and liabilities due to period end exchange difference.
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
532541
NIITTECH
399/234
2281
20884
6321
Stock Performance
1M
12.7
10.2
Absolute
Rel. to Nifty
1yr
36.3
31.4
YTD
43.3
38.5
Share Holding Pattern-%
Promoters
FII
DII
Others
Current
31.08
32.35
17.34
19.23
1 year forward P/E
2QFY14
31.19
29.21
19.94
19.66
1QFY14
31.23
29.04
19.67
20.06
Steady margin: EBITDA Margin improved by 120bps (QoQ) to 16.2% on the back of
reduction Employee cost by 3.5%, sequentially.
Healthy growth traction from US and Europe: The contribution to the total revenues
from the U.S. increased to 44% from 41% (up 7%,QoQ) and EMEA stood at 38% from
36%( up 6%, QoQ). The revenue share from rest of the world declined from 23% to 18%
(down 22% QoQ). Post result management stated that the demand environment is
clearly showing positive signs in the US with the debt issue being the only overhang.
Slow deal execution in Government and Insurance projects: Among industry segments,
Travel and Transportation contributed to 37% (up by 3%, QoQ), BFS was 17% (up by
21%, QoQ), Government projects declined from 10% to 6% (down by 40%, QoQ) to the
revenue mix.
Healthy order addition: During the quarter, the company secured a USD 300 million
vendor consolidation deal from a top BFSI client for a period of 10 years. It has secured
fresh order of USD 377mn versus USD 84mn in 2QFY14. However, in 3Q FY14, order has
primarily been in the international market. During the quarter, NIIT Tech forayed into
Latin America through its partnership with GRU Aeroporto Internacional de São Paulo
(Sao Paolo International Airport), to implement and transform the cargo handling
system at the airport.
View and Valuation: We expect good growth from Travel & Tourism vertical in FY'14
and the BFSI expected to be softer. However, the MFG and Govt verticals expected to
improve going forward. Company’s Order wins in the recent quarters have been healthy,
lending visibility on revenue growth. At a CMP of Rs 376, trades at 6.9x FY15E earnings.
We retain “ buy” view on the stock with a price target of Rs 440 (revised from Rs360).
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
587.3
95.1
52.5
16.2%
8.9%
2QFY14
587.3
88.6
60.4
15.1%
10.3%
(QoQ)-%
0.0
7.3
(13.1)
110bps
(120bps)
3QFY13
500.1
81.3
56.6
16.3%
11.3%
Rs, Crore
(YoY)-%
17.4
17.0
-7.2
(10bps)
(140bps)
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
2

3. NIIT Tech
Sales and PAT growth-%(QoQ)
Company expects FY14 to be better
than FY13 with respect to both revenue
growth and EBIT margin. And also
expects stronger growth in the US and
Asian markets compared with Europe.
Management also expects to see
demand environmrnt ahead.
(Source: Company/Eastwind)
Margin-%
It expects the growth momentum will
sustain with holding the margins going
forward.
(Source: Company/Eastwind)
Clients Metrics
The 3QFY14 witnessed sustained hiring
and attrition improved from 12.44% to
13.40% on LTM basis. Managent is very
confident to maintain attrition at 12-13%
and utilization at 77-80%.
(Source: Company/Eastwind)
Clients Metrics: During the quarter, Company added 4 new clients, each in BFSI, travel
and transportation, manufacturing, and government segment.
Employee Metrics: Total headcount increased from 8017 from 8,160 at the end of the
quarter. Utilzation declined to 78.4% from 80.3%(2QFY14) because of weak quarter and
still, company is good to maintain attrition at a mark of 12-13%, which is better than its
peers.
Higher DSO: The DSO days were 98 (2QFY14 – 100) during the quarter.In general, the DSO
days are typically used to be at 80 days.
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
3

4. NIIT Tech
Operating Metrics;
.
Banking and Finacial Services
Insurance
Transport
Manufacturing
Government
Others
Sales Mix-Geography
Americas
EMEA
RoW
Revenue Concentration %
DSO-days
Top-5
Top-10
Headcounts
No of Headcounts
1QFY13
13%
21%
40%
7%
8%
11%
2QFY13
13%
20%
42%
6%
5%
14%
3QFY13
12%
19%
42%
6%
8%
13%
4QFY13
12%
19%
37%
6%
11%
15%
1QFY14
12%
18%
36%
7%
13%
14%
2QFY14
14%
19%
37%
6%
10%
14%
3QFY14
17%
18%
38%
7%
6%
14%
36%
39%
25%
38%
39%
23%
37%
40%
23%
38%
37%
25%
38%
37%
26%
41%
36%
23%
44%
38%
18%
84
30%
43%
75
32%
47%
76
34%
48%
82
32%
47%
98
31%
46%
100
36%
49%
96
37%
49%
7444
7617
7882
8158
8207
8017
8160
Financials;
Rs in Cr,
Sales
Employee Cost
Other expenses
Total expenses
EBITDA
Depreciation
Other Income
EBIT
Interest Cost
Profit (+)/Loss (-) Before Taxes
Provision for Taxes
Net Profit (+)/Loss (-)
Growth-% (YoY)
Sales
EBITDA
PAT
Expenses on Sales-%
Employee Cost
Other expenses
Tax rate
Margin-%
EBITDA
EBIT
PAT
Valuation:
CMP
No of Share
NW
EPS
BVPS
RoE-%
P/BV
P/E
FY10
913.7
503.71
239.75
743.46
170.24
35.81
7.64
134.43
0
142.07
14.42
127.65
FY11
1232.25
601.36
393.1
994.46
237.79
31.46
13.6
206.33
2.22
217.71
32.3
185.41
FY12
1576.48
891.12
415.26
1306.38
270.1
36.42
30.37
233.68
3.84
260.21
63.75
196.46
FY13
2021.36
1115.1
576.96
1692.06
329.3
56.69
22.75
272.61
1.91
293.45
75.05
218.4
FY14E
2341.54
1334.68
620.51
1955.19
386.35
65.73
46.83
320.62
2.59
364.86
103.99
260.88
FY15E
2814.74
1562.18
774.05
2336.24
478.51
73.49
56.29
405.02
1.94
459.37
133.22
326.15
-6.8%
2.3%
9.6%
34.9%
39.7%
45.2%
27.9%
13.6%
6.0%
28.2%
21.9%
11.2%
15.8%
17.3%
19.4%
20.2%
23.9%
25.0%
55.1%
26.2%
10.1%
48.8%
31.9%
14.8%
56.5%
26.3%
24.5%
55.2%
28.5%
25.6%
57.0%
26.5%
28.5%
55.5%
27.5%
29.0%
18.6%
14.7%
14.0%
19.3%
16.7%
15.0%
17.1%
14.8%
12.5%
16.3%
13.5%
10.8%
16.5%
13.7%
11.1%
17.0%
14.4%
11.6%
170.25
5.88
579.78
21.71
98.60
22.0%
1.73
7.84
184.65
5.93
752.11
31.27
126.83
24.7%
1.46
5.91
270.90
5.96
922.20
32.96
154.73
21.3%
1.75
8.22
262.35
6.02
1094.12
36.28
181.75
20.0%
1.44
7.23
376.00
6.02
1346.30
43.33
223.64
19.4%
1.68
8.68
376.00
6.02
1663.24
54.18
276.29
19.6%
1.36
6.94
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
4

5. YES BANK
Result update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
Market Data
BSE Code
NSE Symbol
Neutral
353
388
443
10
14
532648
YESBANK
52wk Range H/L
Mkt Capital (Rs Cr)
Average Daily Volume
Nifty
547/216
12729
18.04
6320
"NEUTRAL"
16th Jan, 2014
Yes bank reported better than expected profit largely due to lower provision
despite of reported higher delinquencies. This has resulted of lower provision
coverage ratio but still it is above of regulatory requirement. Incremental
deposits (other than CASA) were remained muted whereas advance reported
handsomely. Bank would face liquidity problem or would have to dependent
on additional borrowings to maintain its growth trajectory. This would result of
higher cost of fund and margin compression in our view. Leverage ratio (total
asset to net worth) has been declining from past four quarters indicated no
surplus liquidity in balance sheet. In the absence of comfortable earnings we
remain have neutral view. Also, we reduce our target price from Rs.443 to
Rs.388.
NII growth of 14% YoY led by advance growth and stable cost of fund
Bank’s NII grew by 14% YoY to Rs.665 cr largely due to stable margin and other
income. In 3QFY14, bank reported other income of Rs.388 cr up by 24% YoY
whereas margin was stable at 2.9% declined mere by 10 bps YoY. Credit deposits
Stock Performance
1M
Absolute
-2.7
1yr
-29.2
YTD
-29.2
deposits base. We observed that bank’s cost of deposits (Calculated) remain at
Rel.to Nifty
-35.4
-35.4
improved handsomely to 13.3% from 12.7% in 3QFY13.
-5.4
ratio was improved by 330 bps QOQ but was declined by 400 bps YoY due to lower
Share Holding Pattern-%
Current 4QFY13 3QFY1
3
Promoters
25.6
25.6
25.7
FII
35.1
46.0
49.0
DII
19.4
15.7
13.2
Others
20.0
12.7
12.1
1 Yr P/BV
elevated level despite of relatively have higher CASA base whereas yield on loan
Muted PPP growth due to higher CI ratio
Cost to Income ratio was highest ever to 41.6% because of bank’s strategy to
increase market share of CASA. During quarter bank hire 647 employee and opened
17branches and 36 ATMs. As the result employee cost and operating cost were
increased by 20% and 42% respectively. Due to higher operating cost, pre
provisioning profit increased by 9% YoY despite of healthy NII and other income.
Operating leverage increased to 0.41% from 0.39% in 3QFY14. We expect this ratio
to remain high because of bank would continue to increase its CASA franchise base
by opening new branches and hiring.
Stable margin on sequential basis despite of lower lending yield and marginal
increased of cost of fund
On sequential basis NIM of bank remained flat at 2.9% but declined 10 bps on YoY
basis. Lending yield declined sharply to 13.3% from 13.6% due to increased share of
low yield Corporate and Institutional banking. Cost of deposits increased to 10.9%
from 10.8% on QoQ basis. Despite of lower lending yield and higher cost of fund,
margin stable on sequential basis was probably due to lower earnings asset growth
as we get evidence from negative growth of balance sheet on QoQ basis.
Financials
NII
Total Income
PPP
Net Profit
EPS
2011
1247
1870
1190
727
20.9
2012
1616
2473
1540
977
27.7
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
Rs, Cr
2013
2014E
2015E
2219
2440
2374
3476
4217
4150
2142
2328
2614
1301
1778
1098
36.3
49.4
35.6
(Source: Company/Eastwind)
5

6. YES BANK
Deposits growth moderate sequentially but advance reported handsome growth
On balance sheet front, bank’s advance grew by 14.7% YoY led by retail banking growth
followed by corporate and institutional banking. Retail loan registered growth of 47% YoY
whereas corporate banking reported 18% YoY growth. Deposits grew by 20.7% YoY led
by CASA deposits growth of 38% YoY followed by term deposits (17% YoY). We
observed that bank’s incremental deposits (other than CASA) were remained muted at
Rs.24 cr as against Rs.1708 cr in second quarter. Bank would have to depend on
additional borrowings to maintain its growth trajectory if the present trend continued which
would be the result of higher cost of fund and margin compression. Sequentially credit
deposits ratio was higher at 73.9% from 70.6% on account of lower deposits base
especially of term deposits.
Valuation & View
Yes bank reported better than expected profit largely due to lower provision despite of
reported higher delinquencies. This has resulted of lower provision coverage but it is still
above of regulatory requirement. Incremental deposits (other than CASA) were remained
muted whereas advance increased handsomely. Bank would face liquidity problem or
would have to dependent on additional borrowings to maintain its growth trajectory. This
would result of higher cost of fund and margin compression in our view. Leverage ratio
(total asset to net worth) has been declining from past four quarters indicated no surplus
liquidity in balance sheet. In the absence of comfortable earnings we reduce our target
price to Rs.388 from Rs.443.
Valuation Band ( 1 yr forward P/BV)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
6

7. YES BANK
Quarterly Result
Quarterly Result
Interest/discount on advances / bills
Income on investments
Interest on balances with Reserve Bank of India
Others
Total Interest Income
Others Income
Total Income
Interest Expended
NII
Other Income
Total Income
Employee
Other Expenses
Operating Expenses
PPP( Rs Cr)
Provisions
PBT
Tax
Net Profit
Balance Sheet Data
Advances
Shareholders’ Funds
Deposits
Asset Quality
GNPA
NPA
% GNPA
% NPA
PCR(%)
3QFY14E
1666
840
8
0
2514
388
2902
1849
665
388
1053
194
245
439
615
13
601
186
416
2QFY14
1618
875
8
0
2501
446
2947
1829
672
446
1118
185
220
405
713
179
534
163
371
3QFY13 %YoY Gr %QoQ Gr
1394
19.5
3.0
726
15.8
-4.0
4
82.6
-7.5
10
-96.4
20.0
2134
17.8
0.5
313
23.8
-13.1
2447
18.6
-1.5
1549
19.3
1.1
584
13.9
-1.0
313
23.8
-13.1
898
17.4
-5.8
162
19.8
4.7
172
42.1
11.2
334
31.3
8.2
563
9.1
-13.8
57
-76.6
-92.6
507
18.7
12.7
164
13.0
14.2
342
21.4
12.0
50,293
6,610
68,060
47717
6610
67575
43,857
5,679
56,401
14.7
5.4
16.4
0.0
20.7
0.7
195.8
42.3
0.39
0.08
78.4
132.1
19.36
0.28
0.04
85.3
76.2
15.6
0.17
0.04
79.5
157.0
48.3
171.2
118.5
Source: Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
7

8. YES BANK
Financials & Assuption
Income Statement
2011
2012
2013
2014E
2015E
Interest Income
Interest Expense
NII
Change (%)
Non Interest Income
Total Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions( Incl tax)
PAT
Change (%)
4042
2795
1247
6307
4692
1616
8294
6075
2219
11985
9544
2440
11213
8840
2374
58.2
29.6
37.3
10.0
-2.7
623
1870
857
2473
1257
3476
1776
4217
1776
4150
37.2
32.2
40.6
21.3
-1.6
680
1190
933
1540
1335
2142
1889
2328
1535
2614
37.9
29.4
39.1
8.7
12.3
463
727
563
977
841
1301
604
1778
1046
1098
52.2
34.4
33.1
36.7
-38.2
Balance Sheet
2011
2012
2013
2014E
2015E
Deposits( Rs Cr)
Change (%)
of which CASA Dep
Change (%)
Borrowings( Rs Cr)
Investments( Rs Cr)
Loans( Rs Cr)
Change (%)
45939
49152
66956
80347
96416
Ratio
71.4
7.0
36.2
20.0
20.0
4751
7392
12688
20087
28925
68.6
55.6
71.6
58.3
44.0
6691
18829
34364
14156
27757
37989
20922
42976
47000
21358
49835
54050
30447
62163
62157
54.8
10.5
23.7
15.0
15.0
2011
2012
2013
2014E
2015E
8.7
5.5
5.0
7.5
11.7
6.7
7.8
6.0
11.5
6.7
9.1
7.2
15.2
7.6
11.9
7.5
11.5
6.5
9.2
7.5
Valuation
2011
2012
2013
2014E
2015E
Book Value
CMP
P/BV
109.3
310
2.8
132.5
367
2.8
161.9
367.3
2.3
193.1
350.35
1.8
223.7
350.35
1.6
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost of Deposit
Avg. Cost of Borrowimgs
Souce: Eastwind/Company
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
8

9. CMC
"Neutral"
15th Jan' 14
"Nothing for excitement"
Results update
Neutral
CMP
Target Price
Previous Target Price
Upside
Change from Previous
1527
-
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
517326
CMC
1780/1107
4736
20884
6189.35
Stock Performance
Absolute
Rel. to Nifty
1M
17.12
15.93
1yr
15.4
10.52
YTD
27.37
22
Share Holding Pattern-%
Promoters
FII
DII
Others
Current
51.12
22.63
18.26
7.99
1 year forward P/E
1QFY14 4QFY13
51.12
51.12
23.32
21.84
17.83
19.05
7.73
7.99
Witnessed inline Sales and PAT numbers;
CMC Ltd Witnessed inline set of numbers with flat sales growth than previous quarter
led by 2% sales decline in System Integration (contributes 64% of Sales) and 14%
decline in IT enabled Services (contributes 13% of Sales). PAT grew by 4.9% on
sequential basis. Usually, third quarter is not a growth quarter in the international
markets.
We believe, CMC will continue with its efforts to enhance revenue contribution of high
margin System Integration and ITES segments. Further, its high focus on education
space will also add margin in near term.
Steady Margin: Steady Margin: During the quarter EBITDA Margin inched up by 40bps
(QoQ) to 16.1%. However, Management is still confident to maintain the margin in a
range of 15-16%.
Mix growth response from segmental front: Sales from System Integration (65% of total
sales) down by 2%, IT enabled Services (15% of total sales) down by 13.6%. While the
Customer services business (18.4% of total sales) and Education and Training seen
double digit growth by 15.9% and 17.6 %(QoQ)– SEZ Sales was flat sequentially. The
company expects to see good growth traction in ITeS and System Integration.
Deal pipeline: The deal pipeline is in line with the last year. It indicated that pursuing
good number of deals in the Developed and as well emerging markets. Considering
current sound demand environment across geographies (like US and Europe) and
verticals Company is more optimistic for clients acquisition and deal executions ahead.
Now, CMC is focusing on new emerging segments like IMS (Infrastructure
Management Services), Cloud, Big data, Mobility and Analytics. Considering its
impressive client as well as market response, company is expecting to quantify into
revenue. Its new and emerging projects like Mining Management System, GPS System
and Port & Cargo Management System would play a major role for generating
revenue.
View and Valuation: CMC expects the growth momentum to improve in the 2HFY14E
than 1HFY14. The Company remains a strong with excellent earning visibility led by joint
effort of market strategy by TCS (contributes 59% of sales) in its product and solutions.
However, we expect that its earning visibility and order from government side in
coming 2 quarter could be impacted because of general election schedule in India (earns
41% revenue from India). For a near to medium -term prospect, we are not much
excited on the stock taking its earning visibility in near term. We had already advised to
book profit on 9th Jan 2014 at a target price of Rs 1690, now we have a “Neutral” view
on the stock. At a CMP of Rs 1527, stock trades at 16.5X FY15E earnings.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
560.96
90.81
70.55
16.2%
12.6%
2QFY14
560.75
88.41
67.3
15.8%
12.0%
(QoQ)-%
0.0
2.7
4.8
40bps
60bps
3QFY13
492.97
83.2
61.07
16.9%
12.4%
Rs, Crore
(YoY)-%
13.8
9.1
15.5
(70bps)
20bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
9

10. CMC
Sales and Sales growth-%(QoQ)
Second half of FY14 will be better than
the first half. And expects to sees
opportunities in the international
markets in FY15E
(Source: Company/Eastwind)
Margin-%
The management expects operating
Profit margin between 15 percent and
16 percent .
(Source: Company/Eastwind)
Clients Metrics
Despite salary hike during the quarter,
company's employee cost on sales
increased from 25.1% (2QFY14) to
25.6%.
(Source: Company/Eastwind)
Employee Metrics: The total headcount for the quarter stood at 10,890 employees out of
which 4,555were on company payrolls while the remaining 6,235 were subcontractors.
Clients Metrics: The Company added 14 clients during the quarter out of which 10 from
India and the 4 from the USA. In FY13, the company added 80 clients. During the quarter,
its DSO increased from 79days to 83days.
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
10

11. CMC
Key facts from Concall (attended on 16th Oct, 2013)
►CMC continues to target growth ahead of the overall IT industry; the company expects
to grow faster than that in the current financial year
►Expects operating Profit margin at 16 percent for FY14E,
►The company expects to maintatin its tax regime at 20-20.5% for coming quarter. For
next year tax rate could be stand at a range of 20-21%.
►Company’s hiring Plan; a net addition of 400-500 this year
► Notably, it targets revenues of Rs 250-300 crore from Education and Training business
in next two 3-4 years timeline.
Financials;
Rs, Cr
Net Sales
Purchases of stock-in-trade
Employee Cost
Subcontracting and outsourcing cost
Other expenses
Total Expenses
EBITDA
Depreciation
Other Income
EBIT
Interest Cost
PBT
Tax
PAT
Growth-%
Sales
EBITDA
PAT
Margin -%
EBITDA
EBIT
PAT
Expenses on Sales-%
Employee Cost
Subcontracting Cost
Tax rate
Valuation
CMP
No of Share
NW
EPS
BVPS
RoE-%
Dividen Payout ratio
P/BV
P/E
FY10
870.73
99.35
276.16
173.56
159.94
709.01
161.72
9.85
18.75
151.87
3.17
167.45
24.23
143.22
FY11
1084.40
99.28
345.13
262.35
170.17
876.93
207.47
10.46
11.80
197.01
0.22
208.59
32.42
176.17
FY12
1469.34
145.40
440.22
446.11
213.63
1245.36
223.98
21.37
17.46
202.61
0.02
220.05
68.59
151.46
FY13
1927.87
188.56
521.65
679.73
222.88
1612.82
315.05
23.20
13.17
291.85
0.18
304.84
76.76
228.08
FY14E
2155.00
193.95
560.30
818.90
215.50
1788.65
366.35
25.73
21.55
340.62
0.1
362.07
101.38
260.69
FY15E
2415.28
217.37
640.05
917.81
253.60
2028.83
386.44
37.23
24.15
349.21
0.25
373.11
93.28
279.84
-7.4%
27.7%
23.3%
24.5%
28.3%
23.0%
35.5%
8.0%
-14.0%
31.2%
40.7%
50.6%
11.8%
16.3%
14.3%
12.1%
5.5%
7.3%
18.6%
17.4%
16.4%
19.1%
18.2%
16.2%
15.2%
13.8%
10.3%
16.3%
15.1%
11.8%
17.0%
15.8%
12.1%
16.0%
14.5%
11.6%
31.7%
19.9%
14.5%
31.8%
24.2%
15.5%
30.0%
30.4%
31.2%
27.1%
35.3%
25.2%
26.0%
38.0%
28.0%
26.5%
38.0%
25.0%
1340.00
1.50
510.68
95.48
340.45
28.0%
18.6%
3.94
14.03
2079.55
1.50
654.02
117.45
436.01
26.9%
19.9%
4.77
17.71
994.80
3.00
772.19
50.49
257.40
19.6%
23.2%
3.86
19.70
1410.00
3.03
946.26
75.27
312.30
24.1%
19.4%
4.51
18.73
1527
3.03
1145.07
86.04
377.91
22.8%
23.7%
4.04
17.75
1527
3.03
1354.19
92.35
446.93
20.7%
25.3%
3.42
16.53
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
11

12. Coal India LTD.
Company Update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
289
334
310
16%
NA
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
533278
COALINDIA
372/238
176226
17622
6308
Stock Performance-%
1M
-1.3
2.8
Absolute
Rel. to Nifty
1yr
-21.2
8.8
YTD
-21.4
8.6
"Buy"
15th Jan' 14
Cash Deployment : Dividend at Rs 29/- per share
Competition Appellate Tribunal stays Rs 1,773 crore fine on CIL , and will decide on the
matter on next hearing feb 11 2014. We believe , A Rs 1800-crore fine could possibly
mean less profits for the company and less dividend income for its owners. But as the
main owner, the government, will pocket this amount in the form of a fine, it will not be
poorer in any way.Recently Coalindia after a long discussion with govt declared
Rs29/share intrim dividend .which recovers our ROE estimate for FY14 to 40% from
33%.which is up 4% YOY.we revised our EPS estimate for FY14 to 28.4 which is 3.4%
YOY (including 2100 CR realization Gain).Hence we Upgrade coal india to a target price
of RS.334/- (previously 310).
Coal India to get Rs 2,119 cr extra on coal price revision :
Coal India Ltd is likely to get additional revenue of Rs 2,119 cr in this fiscal on account of
revision in dry fuel prices.CIL (Coal India Ltd) has revised and rationalized the basic
notified prices of all the grades of non-coking coal except GI, G2 and G5.The estimated
additional revenue due to revision of basic notified price for the current financial year is
Rs 2,119 cr.CIL had revised the prices of all grades of coal, barring three, for all its eight
producing subsidiaries with effect from May 28 this year. Mahanadi Coalfields which is
expected to contribute Rs 686 crore, followed by Rs 664 crore from Northern Coalfields
and Rs 495 crore from South Eastern Coalfields.
Share Holding Pattern-%
Promoters
FII
DII
Others
2QFY14
90.0
5.5
5.3
2.2
1QFY14 4QFY13
90.0
90.0
5.4
5.4
2.3
2.0
2.4
2.6
1 yr Forward P/B
Source - Comapany/EastWind Research
Q2FY14 :
The company’s net sales grew 5.8% yoy to 15,411cr (above our estimate of 15,083cr).
Sales volumes stood at 109mn ton in 2QFY2014 compared to 102mn ton in 2QFY2013.
The blended realizations declined by 1.4% yoy to 1,414/ton (despite price hike) due to
lower realization on FSA coal.Despite 5.8% yoy growth in top-line, EBITDA decreased by
8.2% yoy to 3,176cr due to higher raw material costs (18.1% yoy to 2,251cr) and
contractual expenses (27.6% yoy to 1,394cr). The depreciation expenses increased by
27.8% yoy to 495cr; hence, adjusted net profit was flat yoy at 3,043cr .
Management Corner : Management is confident about their coal production target and
coal off take target for FY2014E, which is 482 mmt and 492 mmt respectively. Till now in
the H1FY14 the company cpmpleted 400 mmt production and 424 mmt offtake. The
company is not sure about the production target but very sure abot the offtake .
Financials :
Q2FY14
Y-o-Y %
Q-o-Q %
Q2FY13
Q1FY14
Net Revenue
15411
5.8
-6.4
14573
16472
EBITDA
2794
-2.4
-29.4
2862
3958
Depriciation
495
27.8
4.1
387
476
Interest Cost
8
-22.2
7.0
10
7
Tax
1412
-4.2
-27.9
1475
1958
PAT
3052
-0.8
-18.2
3078
3731
(In Crs)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
12

13. Coal India LTD.
E-auction prices remain under pressure: E-auction prices for Nov’13 were at Rs 2,117/t
(-15% YoY/-8% MoM). YTD, weighted average e-auction prices were at Rs 2,238/t, lower
16% YoY. Weakness in sponge iron and cement industry, the two key end-users of eauction coal, has impacted E-auction realisations.
CIL’s e-auction realizations have declined over the past one year on account of decline
in international coal price coupled with weak domestic demand. Going forward, we
expect CIL’s profitability to be affected due to lower e-auction realizations, sticky staff
costs and other expenses. Moreover, given the price hike taken during 4QFY2013, we
do not expect CIL to undertake any further price hikes in the near-term.
OUTLOOK:
We expect modest increase in sales volumes growth during FY2013-15 on account of
poor offtake capabilities of CIL. Also, we expect CIL’s margins to decline during FY2014
due to lower e-auction realizations and higher staff costs/other expenses.Recently
Coalindia after a long discussion with govt declared Rs29/share intrim dividend .which
recovers our ROE estimate for FY14 to 40% from 33%.which is up 4% YOY.we revised
our EPS estimate for FY14 to 28.4 which is 3.4% YOY (including 2100 CR realization
Gain).Hence we Upgrade coal india to a target price of RS.334/- (previously 310).From
the CMP the target price is up by ~15% .
OPERATING MATRIX
Coal Production in MT
Coal Offtake in MT
Revenue Generation From unit Ton
Avg Man Power (in numbers)
Productivity Per Man
FY10
431
416
1073
404744
1066
FY11
431
425
1183
390243
1105
FY12
436
433
1441
377447
1155
Source - Comapany/EastWind Research
FY13
452
465
1468
364736
1240
Source - Comapany/EastWind Research
P/L PERFORMANCE
Net Revenue from Operation
Cost Of Projects & Contractual
Power and fuel
contractual expenses
Employee benefit Expence
Expenditure
EBITDA
Depriciation
Interest Cost
Tax
PAT
ROE %
FY11
50234
7573
1755
4580
20481
40390
9843
1673
79
5595
10868
33
FY12
62415
5123
2013
4901
26705
40857
21558
1969
54
6484
20588
51
FY13
68303
6556
2333
5802
27943
50219
18084
1813
45
7623
17356
36
Narnolia Securities Ltd,
FY14E
69960
8372
2591
6049
28943
53705
16255
1860
34
7310
17921
40
13

14. Coal India LTD.
B/S PERFORMANCE
Share capital
Reserve & Surplus
Total equity
Long-term borrowings
Short-term borrowings
Long-term provisions
Trade payables
Short-term provisions
Total liabilities
Intangibles
Tangible assets
Capital work-in-progress
Long-term loans and advances
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Total Assets
RATIOS
P/B
EPS
Debtor to Turnover%
Creditors to Turnover%
Inventories to Turnover%
CASH FLOWS
Cash from Operation
Changes In Working Capital
Net Cash From Operation
Cash From Investment
Cash from Finance
Net Cash Flow during year
Trading At :
FY10
6316
20956
27273
343
1620
2545
772
1404
5443
0
12035
2211
610
4402
2169
39078
8066
17921
FY10
0.0
0.0
4.9
1.7
1.0
FY11
6316
26998
33314
1334
33
22461
645
12387
8490
779
12065
2057
845
5586
3419
45806
11180
21646
FY11
5.7
17.3
22.8
4.3
3.7
FY12
6316
34137
40453
1305
0
28271
829
15595
9785
759
12681
1848
1017
6071
5663
58203
13478
24688
FY12
5.5
32.6
29.2
4.3
3.1
FY13
6316
42156
48472
1078
0
31144
837
20447
12385
712
12754
3496
1181
5618
10480
62236
16189
25479
FY13
4.0
27.5
52.7
4.2
2.8
FY10
FY11
FY12
10727
12819
16323
-131
-3822
3565
10596
8997
19888
950
697
-10410
2163
2911
-7382
13708
12606
2095
Down 21% from its 52week High
Up 14% from its 52 week Low
FY13
15948
-6839
9109
-1833
-7852
-575
Narnolia Securities Ltd,
Source - Comapany/EastWind Research
14

15. UltraTech Cement Ltd.
Company Update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
1675
1846
1875
10%
-2%
Market Data
BSE Code
NSE Symbol
532538
ULTRACEMCO
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
2066/1404
45942
18377
6272
Stock Performance-%
1M
-7.3
-9.0
Absolute
Rel. to Nifty
1yr
-14.8
-19.9
YTD
-10.2
-14.3
Share Holding Pattern-%
Promoters
FII
DII
Others
2QFY14
62.0
20.7
4.8
12.6
1QFY14 4QFY13
62.0
62.0
20.7
20.6
4.6
4.6
12.7
12.7
1 yr Forward P/B
1x
3x
5x
7x
Aug-04
Mar-05
Oct-05
May-06
Dec-06
Jul-07
Feb-08
Sep-08
Apr-09
Nov-09
Jun-10
Jan-11
Aug-11
Mar-12
Oct-12
May-13
Price
2x
4x
6x
Source - Comapany/EastWind Research
"BUY"
14th Jan' 14
The outlook continues to remain challenging. Demand growth in FY14 is likely to be around 5 %,
though in the long term growth is likely to be over 8 % - 15% . Government initiatives to
expedite large infrastructure projects have yielded little so far and this is putting pressure on
cement makers, especially those with debt that has become expensive to service due to high
interest rates.We believe that UltraTech will maintain its healthy debt protection metrics ,
supported by its earnings and cash flows.At present Ultratech is running at 79% of its capacity
utilization.The utilization levels will decline due to stabilization of supply from new capacities,
owing to insufficient demand in the domestic market. UltraTech plans to strengthen its logistics
infrastructure and increase its captive power plant capacity, which will help to reduce its
operational cost.We value the stock at the target price of Rs 1846. From the current level the
upside is very limited (10%), so we recommend investors to "Buy" the stock at dips to get a
decent returns. : Ultratech Cement reported a 52 per cent dip in net profit for the July-September
Q2FY14 Update
quarter at Rs 264. Net sales were down 4 per cent at Rs 4,502 crore .Cement and clinker sales
remained unchanged compared with last year at 9.1 million tonnes while white cement and wallcare putty sales were up 15 per cent at 2.75 lakh tonnes (2.39 lakh tonnes). Despite flat cement
sales, overall cost increased 4 per cent to Rs 4,100 crore (Rs 3,927 crore) on the back of high
logistics cost.Overal realisation during the quarter was down 5 per cent at Rs 239 per 50 kg bag
compared with Rs 252 in last year.The company’s long-term borrowings stood lower at Rs 3,841
crore (Rs 3,893 crore), while deferred tax liabilities increased 9 per cent to Rs 2,073 crore (Rs
1,906 crore). EBITDA slipped 34.3 percent on yearly basis to Rs 660 crore and operating profit
margin declined 670 basis points Y-o-Y to 14.7 percent in the quarter.
Struggle for beter Manufacturing : Financial performance impacted by lower selling price and
subdued demand. The demand remained sluggish due to prolonged monsoon across the country,
resulted in reduced offtake by infrastructure and real estate companies. During the quarter
,benefit of lower imported coal prices was get cancelled due to sharp depreciation of the rupee
against the dollar. Logistics and raw material costs continued to rise given the high diesel prices.
However, optimisation of fuel mix i.e use of pet coke helped to lower power and fuel costs to an
extent.
Capacity Addition : Meanwhile, UltraTech Cement agreed to purchase debt-laden Jaiprakash
Associates' Gujarat cement unit having a capacity of 4.8 million tonnes for Rs 3,800 crore. Gujarat
cement unit comprises of an integrated cement unit at Sewagram and grinding unit at Wankbori.
With this acquisition of 4.8 million tonnes per annum, the company's current capacity increases to
59 million tonnes per annum. The transaction implies a valuation of $124 per tonne of cement,
which is lower than the existing benchmark of around $140 per tonne, and is a positive for
UltraTech.Currently, UltraTech’s debt is around Rs.4,500 crore. After the transaction is completed,
the company’s net debt-to-equity ratio will increase to around 0.45 from 0.27. Debt will increase
to 2 times EBIDTA. With projects underway it will stand raised to 70 million tonnes by 2015.
Financials :
Net Revenue
EBITDA
Depriciation
Interest Cost
Tax
PAT
Q2FY14
4522
679
257
89
107
264
Y-o-Y %
-4.3
-34.4
10.8
48.3
-54.1
-52.0
Q-o-Q %
-9.2
-36.7
2.0
34.8
-56.7
-60.8
Q2FY13
4727
1035
232
60
233
550
Q1FY14
4980
1072
252
66
247
673
(In Crs)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
15

16. UltraTech Cement Ltd.
On The Expansion Front : Setting up a cement plant with 5.5 MMTPA cement and a 75 mega
watt (MW) captive power plant, with an investment of Rs 2,500 crore. The company has
received approval from Expert Appraisal Committee (EAC), under the Ministry of Environment,
for the proposed facility. The cement plant will be based on the dry process technology for
cement manufacturing with pre-heater and pre-calciner technology and the coal requirement for
the project will be met by importing it from Indonesia and South Africa, as an interim basis.
Petcoke will be procured from Reliance Industries Limited, Jamnagar.
Company Description :
UltraTech had an estimated market share of around 18 per cent, with presence across regions north being the largest, contributing 33 per cent to its sales, followed by west (31 per cent),
south (20 per cent), and east (16 per cent) - thereby insulating it from downtrends in any single
region. The company has a strong focus on improving operating efficiencies; it has 529
megawatts (MW) of captive power generation capacity, which meets 80 per cent of its power
requirement and also maintains power consumption norms in line with the other players in the
industry.
P/L PERFORMANCE
Net Revenue from Operation
Other Income
Total Income
Power and fuel
Freight and forwarding
EBITDA
Depriciation
Interest Cost
Tax
PAT
ROE%
P/B
FY11
13798
154
13952
3280
2881
2696
813
292
384
1367
13
2.9
FY12
19232
371
19603
4639
3741
4194
963
256
948
2403
19
3.2
FY13
21319
304
21623
4646
4243
4839
1023
252
1179
2678
18
3.4
Narnolia Securities Ltd,
FY14E
21267
363
21630
4607
4586
3791
1110
325
775
1934
11
2.9
Net Revenue from Operation
6,000
Sales Growth
160.0
140.0
5,000
120.0
4,000
100.0
80.0
3,000
60.0
2,000
40.0
20.0
1,000
(20.0)
Q4FY14E
Q2FY14
Q3FY14E
Q1FY14
Q4FY13
Q3FY13
Q2FY13
Q1FY13
Q4FY12
Q3FY12
Q2FY12
Q1FY12
Q4FY11
Q3FY11
-
Q2FY11
Q1FY11
OUT LOOK :
Ultratech's EBIDTA growth has been consistently beats the industry average as well as its peers
ACC and Abuja cements. In last few years it also led the industry and its peers on PAT growth .It
beats its peers on account of cement realization and volume sales. Additionally Ultratech has
also been increasing the usage of low cost pet coke in its fuel mix there by moderating its cost
pressure. Strong Brand premium and operational efficiency drives its industry leading
profitability . With the overall slow down in demand, Ultratech will continue to loose its market
share in FY14E on capacity delay. Hence, We are expecting 8%-15% Sales growth with ~19% ROE
in FY15E.We expect cement demand to pick up from 2HFY14 onwards driven by governments
pre-election spending as well as on account of rural demand pick post the good monsoon
witnessed this year. UTCL is a largest cement player in India and we expect it to maintain or
increase the same through timely commissioning of capacities, which are expect to come on
stream by FY15E.We value the stock and arrive at the target price of Rs 1846. As from the
current level the upside is very limited (10%), so we recommend investors to "Buy" the stock
at lower level dips to get a decent returns over a time horizon of 12-18 months.
Source - Comapany/EastWind Research
60
50
Capacity Of Cement Production (in MT) 85
Cement Production
Cement Capacity Utilisation in %
80
40
75
30
70
20
65
10
0
60
FY09
FY10
FY11
FY12
FY13
Source - Comapany/EastWind Research
30
NPM %
OPM %
EBITDA %
27
25
24
22
20
21
19
19
15
16
15
14
13
10
12
22
18
12
10
5
FY09
FY10
FY11
FY12
FY13
16

17. UltraTech Cement Ltd.
B/S PERFORMANCE
Share capital
Reserve & Surplus
Total equity
Long-term borrowings
Short-term borrowings
Long-term provisions
Trade payables
Short-term provisions
Total liabilities
Intangibles
Tangible assets
Capital work-in-progress
Long-term loans and advances
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Total Assets
RATIOS
P/B
EPS
Debtor to Turnover%
Creditors to Turnover%
Inventories to Turnover%
CASH FLOWS
Cash from Operation
Changes In Working Capital
Net Cash From Operation
Cash From Investment
Cash from Finance
Net Cash Flow during year
FY10
124
4495
4620
857
750
32
683
133
8375
6
4953
260
146
827
210
112
219
8375
FY10
3.1
88.1
2.9
9.5
1.2
FY10
1673
-79
1593
-843
-740
10
FY11
274
10373
10647
3295
727
113
1830
473
21630
39
12265
760
583
2094
825
190
873
21630
FY11
2.9
49.9
6.0
13.3
1.5
FY11
2195
-197
1998
-2240
248
6
FY12
274
12550
12824
4843
705
121
2207
709
24904
40
12729
1940
1544
2198
1089
214
1041
24904
FY12
3.2
87.7
5.7
11.5
1.1
FY12
3482
-96
3385
-3050
-353
-18
FY13
274
14955
15230
5169
1227
135
2338
949
29590
62
14254
3601
1066
2541
1376
185
1048
29590
FY13
3.4
97.7
6.5
11.0
1.2
FY13
4122
-481
3641
-4407
715
-51
Trading At :
7000
6000
5000
4000
3000
2000
1000
0
2500
2000
1500
1000
NIFTY
ULTRACEMCO
500
0
Narnolia Securities Ltd,
Source - Comapany/EastWind Research
17

18. DB Corp
"BUY"
14th Jan' 14
"On strong footing"
Company update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
BUY
302
340
13%
-
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Cr)
Average Daily Volume
Nifty
533151
DBCORP
318.65/210
5502
25750
6273
Stock Performance
1M
Absolute
11.5
Rel. to Nift
14.0
1yr
25.0
21.6
YTD
-
Share Holding Pattern-%
Current
Promoters
FII
DII
Others
74.96
17.7
2.95
4.36
2QFY14 1QFY14
74.97
16.5
4.00
4.57
Stock Performace with Nifty
75.0
14.7
5.34
5.02
Festive season coupled with the recently held state assembly elections in 4 states
(Rajasthan, M.P, Chhattisgarh, and Delhi) will likely drive revenue growth for print
media companies. Across the print media players, DB Corp will be one of the strong
beneficiaries for prospect of revenue generation. These 4 states contribute almost 60%
of its revenue.
Recently, Print media companies decided to hike its cover prices selectively in its
mature market to maintain its margin due to increase in news print cost. Going
forward, improving ad revenue, cost control measures and expanding into new area
would energize its revenue visibility in near future.
About the Company: DB Corp, the publisher of Dainik Bhaskar, is a leading publishing
house with its highest readership in the country. It publishes 8 newspapers, 65
newspaper editions and around 200 sub-editions in 4 languages (Hindi, Gujarati, English
and most recently Marathi) in 13 Indian states.
Earning Preview (3QFY14E): DB Corp is like to report 19% (YoY) revenue growth to Rs
366cr led by 18% of revenue growth and 15% of subscription revenue. PAT is expected
to grow by 17% (YoY) to Rs 85Cr. We expect to see EBITDA margin up by 100-150bps
(YoY) to 28-28.5% because of benign RM cost.
Key facts to watch out: Commentary on response of new editions (Patna, Akola and
Amravati), new expansion plan, trend of ad revenue from 4 states poll and from
governments.
Fit well on strong footing: Management is very confident of achieving 17% to 20%
growth rate in upcoming quarter. The Company is following principle of launching at
least 2 editions in a year and enter into at least one 1 market in every 2 years. Company
launched Akola edition in July and Amravati edition in August. Recently company has
launched its Patna edition. According to the company, the initial response in Bihar is
quite encouraging and as per booking, record of new subscription makes it no.1 in the
first day of its launch.
Expanding into new exposure: The company has interest in radio under the MY FM
brand (94.3), operating in 17 FM radio stations across mini metros and small towns. The
company also has exposure to new media with internet and short messaging service
(SMS) portals.
View and Valuation: In view of upcoming general election, we expect government ad
spending to go up substantially. Being one of the biggest player, company will benefit
from this. Considering its long-term growth story with favorable earning scenario and
leadership position in key market, we are positive on the stock. We initiate “BUY” view
on the stock with the target price of Rs 340. At a CMP of Rs 305, stock trades at 4.3x of
FY15E P/BV.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
2QFY14
437.98
112.45
63.24
25.7%
14.4%
1QFY14
449.4
135.38
77.71
30.1%
17.3%
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
Rs, Cr
(QoQ)-%
2QFY13
(YoY)-%
-2.5%
378.37
15.8%
-17%
81.36
38%
-19%
45.41
39%
(440 bps)
21.5%
420 bps
(290 bps)
12.00%
220 bps
(Source: Company/Eastwind)
18

19. DB Corp
Revenue Segments
Revenue Geography-wise
Financials
Rs,cr
Sales
RM Cost
WIP
Employee Cost
Ad Spend
Event Expenses
consumption of store & spare
Distribution expenses
Other expenses
Total expenses
EBITDA
Depreciation and Amortisation
Other Income
EBIT
Interest
PBT
Tax Exp
PAT
Growth-% (YoY)
Sales
EBITDA
PAT
Expenses on Sales-%
RM Cost
Employee Cost
Other expenses
Tax rate
Margin-%
EBITDA
EBIT
PAT
Valuation:
CMP
No of Share
NW
EPS
BVPS
RoE-%
P/BV
P/E
FY10
1062.1
327.87
-0.0016
131.81
12.98
11.83
51.49
22.81
161.24
720.0284
342.0716
37.83
11.15
304.2416
35.69
279.7016
105.72
173.9816
FY11
1265.18
383.91
-0.06
184.56
12.52
16.02
58.7
21.28
185.2
862.13
403.05
43.28
14.18
359.77
15.3
358.65
99.97
258.68
FY12
1451.51
508.04
-0.04
242.93
15.04
15.04
83.62
24.34
216.06
1105.03
346.48
50.57
24.02
295.91
9.23
310.7
98.32
212.38
FY13
1592.32
544.54
0.03
279.5
17.21
12.08
94.81
28.01
234.07
1210.25
382.07
58.06
21.34
324.01
7.99
337.36
113.18
224.18
FY14E
1865.97
653.09
0.04
335.88
22.39
18.66
115.69
33.59
279.90
1459.2
406.7
64.6
24.3
342.1
8.0
358.4
120.2
238.2
FY15E
2182.15
763.75
0.04
403.70
28.37
21.82
150.57
41.46
329.51
1739.2
442.9
75.6
28.4
367.4
5.1
390.7
131.1
259.6
10.5%
132.2%
265.4%
19.1%
17.8%
48.7%
14.7%
-14.0%
-17.9%
9.7%
10.3%
5.6%
17.2%
6.5%
6.2%
16.9%
8.9%
9.0%
30.9%
12.4%
15.2%
10.0%
30.3%
14.6%
14.6%
7.9%
35.0%
16.7%
14.9%
6.8%
34.2%
17.6%
14.7%
7.1%
32.0%
16.6%
15.0%
6.4%
34.3%
17.0%
15.1%
6.0%
32.2%
28.6%
16.4%
31.9%
28.4%
20.4%
23.9%
20.4%
14.6%
24.0%
20.3%
14.1%
21.8%
18.3%
12.8%
20.3%
16.8%
11.9%
239.15
18.15
648.7
9.59
35.74
26.8%
6.7
24.9
246.25
18.3
828.87
14.14
45.29
31.2%
5.4
17.4
219.45
18.3
927.08
11.61
50.66
22.9%
4.3
18.9
212.1
18.33
1029.15
12.23
56.15
21.8%
3.8
17.3
302.0
18.3
1160.1
12.99
63.29
20.5%
4.8
23.2
302.0
18.3
1301.7
14.16
71.02
19.9%
4.3
21.3
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
(Source: Company/Eastwind)
19

20. Zensar Tech
Company update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
412
440
400
7%
10%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
504067
ZENSARTECH
424/181
1800
20884
6273
Stock Performance
1M
29.1
28.5
Absolute
Rel. to Nifty
1yr
49
43.6
YTD
23.99
21.42
Share Holding Pattern-%
Current
Promoters
FII
DII
Others
1QFY14
48.27
11.99
0.96
38.78
48.35
11.68
1.26
38.71
1 year forward P/E
4QFY13
48.36
10.75
1.28
39.61
"BUY"
14th Jan' 14
Management expects good growth starting from 4QFY14E with its Infrastructure
Management (IM) business gaining momentum. The deal booking and pipeline is good
and expects to perform well going forward. It expects double-digit growth in the
Enterprise Services business for the FY15 on the back of healthy pipeline. In addition, it
anticipates good growth from the IMS for the FY'15.
Zensar is on the way to shut down few if its data centre in on site business, and
entering into new emerging space in Social networking, Mobility, Analytics and Cloud
because of good demand. We expect that order pipeline could be healthier on the
back of good demand seen in these emerging areas.
3QFY14E earnings preview: Zensar Tech is likely to report 5-6% (QoQ) sales growth led
by healthy growth across all geographies and PAT growth could be seen at 4-5% (QoQ).
We expect that EBITDA margin could be down by 100-150bps (QoQ) to 16%.
Key things to watch: Updates on new deal win, revenue traction from all geographies &
inorganic initiatives.
Key Facts
Strong geographical footing: Given the order book Enterprise, business expects to grow
robustly going forward. It consciously slowed down in the Japan market as it is not
profitable and closed one account in Singapore as well. The Chosen markets to perform
are the Middle East, China and Africa going forward.
Healthy order Pipeline: We are positive on the future prospects on back of the order
bookings and pipeline. The recent measures like lean execution, improved efficiencies,
and best practices are targeted at improving the profitability profile of the company in
FY14E. Recent Management comments also revealed favourable scenario of order
booking.
Inspirational revenue level of $1bn by FY16: The management has detailed the 4 focus
areas, which are expected to take Zensar to an inspirational revenue level of $1bn by
FY16. They will expect to grow its existing US relationships and growing the RIMS
business in European nation like UK, Germany and Benelux.
View and Valuation: The deal booking and pipeline is good and expects to perform well
going forward. It expects double digit growth in the Enterprise Services business for the
FY15E on the back of healthy pipeline. Also, it anticipates good growth from the IMS for
the FY'15E.
Order pipeline continues to be stable at $ 200 mn mainly on the back of good demand
seen in Mobility, Cloud Computing and social networking side. Considering healthy
order pipeline and its earning visibility in near future, we maintain “BUY” view on the
stock and we revise our target price from Rs 400 to Rs 440. At a CMP of Rs 412, stock
trades at 7.2x FY14E EPS.
Rs, Crore
Financials
2QFY14
1QFY13
(QoQ)-%
2QFY13
(YoY)-%
Revenue
599.7
533.5
12.4
545.05
10.0
EBITDA
102.54
74.1
38.4
81.05
26.5
PAT
70.6
60.9
15.9
32.17
119.5
EBITDA Margin
17.1%
13.9%
320bps
14.9%
220bps
PAT Margin
11.8%
11.4%
40bps
5.9%
590bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
20

21. Zensar Tech
Clients/Headcounts Metrics;
Number of million dollar
$1mn+
$5mn+
$10mn+
$20mn+
47
6
1
1
43
7
2
1
41
7
2
1
40
8
2
1
49
6
1
1
47
6
1
1
35%
40%
69
35%
42%
59
35%
42%
56
35%
43%
55
37%
43%
66
39%
46%
61
69%
31%
81%
7286
72%
28%
82%
6825
70%
30%
83%
6504
69%
31%
82%
6508
68%
32%
81%
6519
67%
33%
80%
6657
FY10
497.08
0.00
497.08
0.00
393.17
0.00
393.17
103.91
24.92
8.15
0.00
78.99
0.55
86.59
2.43
84.16
FY11
562.56
15.03
577.59
0.00
343.12
135.71
478.83
98.76
25.88
14.20
0.00
72.88
0.85
86.23
-2.24
88.47
FY12
700.15
12.57
712.72
0.00
411.36
165.98
577.34
135.38
25.05
27.91
0.00
110.33
1.03
137.21
42.67
94.54
FY13
2114.52
13.95
2128.47
236.86
1177.83
418.73
1833.42
295.05
33.16
8.66
0.00
261.89
9.95
260.60
86.07
174.53
FY14E
2403.19
16.82
2420.01
269.30
1258.40
532.40
2060.11
359.90
38.59
72.60
0.00
321.31
9.61
384.30
134.50
249.79
FY15E
3205.99
22.44
3228.44
359.27
1678.79
710.26
2748.31
480.13
51.48
80.71
0.00
428.65
7.69
501.67
175.58
326.08
17.8%
28.7%
38.9%
13.2%
-5.0%
5.1%
24.5%
37.1%
6.9%
202.0%
117.9%
84.6%
13.7%
22.0%
43.1%
33.4%
33.4%
30.5%
20.9%
15.9%
16.9%
17.6%
13.0%
15.7%
19.3%
15.8%
13.5%
14.0%
12.4%
8.3%
15.0%
13.4%
10.4%
15.0%
13.4%
10.2%
79.1%
0.0%
2.8%
59.4%
23.5%
-2.6%
57.7%
23.3%
31.1%
55.3%
19.7%
33.0%
52.4%
11.2%
35.0%
52.4%
11.2%
35.0%
272.10
2.16
293.93
38.96
136.08
28.6%
16.4%
2.00
6.98
157.85
4.34
366.96
20.38
84.55
24.1%
19.9%
1.87
7.74
180.00
4.34
417.42
21.78
96.18
22.6%
37.3%
1.87
8.26
248.58
4.36
751.69
40.03
172.41
23.2%
21.9%
1.44
6.21
412.00
4.37
958.03
57.16
219.23
26.1%
17.4%
1.88
7.21
412.00
4.37
1238.10
74.62
283.32
26.3%
14.1%
1.45
5.52
Client Contribution to Business
top 5 clients
top 10 clients
DSO
Effort & Utilization
Onsite
Offshore
Utilization (Including Trainees)
Headcount
Financials;
Rs, Cr
Net Sales
Other Operating Income
Total income from operations (net)
Purchases of stock-in-trade
Employee Cost
Other expenses
Total Expenses
EBITDA
Depreciation
Other Income
Extra Ordinery Items
EBIT
Interest Cost
PBT
Tax
PAT
Growth-%
Sales
EBITDA
PAT
Margin -%
EBITDA
EBIT
PAT
Expenses on Sales-%
Employee Cost
Other expenses
Tax rate
Valuation
CMP
No of Share
NW
EPS
BVPS
RoE-%
Dividen Payout ratio
P/BV
P/E
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
21

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