Market Outlook. Market Cues. News Analysis. Investor s Ready Reckoner. Top Picks. Key Upcoming Events. November 03, 2017

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1 Market Cues Indian markets are likely to open positive tracking global indices and SGX Nifty. U.S. markets closed mostly higher on Thursday after a wild session as investors examined the details of the tax-reform plan proposed by Republicans. The European markets ended Thursday's session with mixed results. Investors appear to have taken a bit of a breather after the markets flirted with 2-year highs. The FTSE 100 of the UK outperformed the rest of Europe after the Bank of England hiked interest rates. Indian markets closed Thursday's session marginally lower as muted global cues prompted traders to book some profits after strong gains in the previous session. Global markets were broadly cautious as the Federal Reserve signaled a December rate hike and investors braced for the Bank of England's interest-rate decision as well as the announcement on the nomination of the new Fed Chair. News Analysis USFDA lifts import alert on Divi's Vizag plant Godrej Agrovet: Book profit Detailed analysis on Pg2 Investor s Ready Reckoner Key Domestic & Global Indicators Stock Watch: Latest investment recommendations on 150+ stocks Refer Pg5 onwards Top Picks Company Sector Rating CMP (`) Target (`) Upside Blue Star Capital Goods Buy Dewan Housing Finance Financials Accumulate Asian Granito Other Accumulate Navkar Corporation Other Buy KEI Industries Capital Goods Accumulate More Top Picks on Pg4 Key Upcoming Events Date Region Event Description Previous Reading Consensus Expectations Nov03 US Change in Nonfarm payrolls (33.00) Nov03 China Exports YoY% Nov06 US Unemployment rate Nov08 Germany PMI Services Nov09 China Consumer Price Index (YoY) More Events on Pg7 Domestic Indices Chg (Pts) (Close) BSE Sensex (0.1) (27) 33,573 Nifty (0.2) (17) 10,424 Mid Cap ,725 Small Cap ,769 Bankex (0.2) (50) 28,803 Global Indices Chg (Pts) (Close) Dow Jones ,516 Nasdaq (0.0) (2) 6,715 FTSE ,555 Nikkei ,539 Hang Seng (0.3) (75) 28,519 Shanghai Com (0.4) (13) 3,383 Advances / Declines BSE NSE Advances 1, Declines 1, Unchanged Volumes (` Cr) BSE 5,055 NSE 33,908 Net Inflows (` Cr) Net Mtd Ytd FII 1,043 1,043 39,495 MFs (138) (138) 95,272 Top Gainers Price (`) Chg Infibeam Divislab 1, Hexaware Ghcl Hindcopper Top Losers Price (`) Chg Unionbank 171 (4.7) Idfcbank 59 (4.6) Techm 468 (4.3) Icil 112 (3.8) Hdil 59 (3.5) As on November,

2 News Analysis USFDA lifts import alert on Divi's Vizag plant The US Food and Drug Administration (USFDA) informed Hyderabad-based Divi's Laboratories Limited that it will be lifting import alert and moving to close out the warning letter issued to the company's Unit-2 at Visakhapatnam. With the latest communication the import alert issued on Divi's Vizag facility on two technical grounds comes to an end relatively quickly. The company has not suffered any significant financial losses on account of the import alert in the past seven months as the US drug regulator had exempted most of the products from its action citing their importance for an adequate supply of drugs made from these active ingredients in the US market. Earlier in July, the US drug regulator had lifted import alert 99-32, which pertains to an alleged refusal of inspection of the premises by the company. The import alert relates to the issues found in manufacturing compliance. In March, Divi's facility came under the import alert after US drug regulator had not satisfied with the remedial actions taken by the company in connection with the Form 483 observations issued by the visiting inspection team during its audit from November 29-December 6 last year. Unlike in other recent instances where the USFDA had taken punitive actions against the Indian pharma companies, Divis was able to quickly come out of the regulatory scrutiny. Godrej Agrovet: Book profit We have a subscribe rating on Godrej Agrovet IPO. The stock at the CMP of ` is yielding 22.7% returns. We have put a subscribe rating on the IPO based on its diversified business, track record of consistent profitability and strong return profile. At the CMP of `564.25, stock is trading at the PE ratio of 40x of its FY17 multiple and we advise to book profit at the CMP. Economic and Political News Govt hikes allowance for differently-abled kids of employees to `54,000 World food prices fall 1.3% in October as valuations drop: UN FAO Huge business opportunities for textile, apparel in UAE: FIEO Corporate News Glenmark Q2 net down 4.23% at `214cr Andhra Bank slips into `385cr loss on bad loan provisioning Vedanta Q2 net up 47% to `2,091cr, misses estimates Sundram Fasteners Q2 net up 17.5% to `90cr, revenue rises 10%

3 Quarterly Bloomberg Brokers Consensus Estimate Tata Power Ltd - Nov 03, 2017 Particulars ( ` cr) 2QFY18E 2QFY17 y-o-y 1QFY18 q-o-q Sales 7,280 7, , EBIDTA 1,631 1, , % PAT Titan Ltd - Nov 03, 2017 Particulars ( ` cr) 2QFY18E 2QFY17 y-o-y 1QFY18 q-o-q Sales 3,158 2, ,909 (19.3) EBIDTA (15.4) % PAT (17.3) PNB - Nov 03, 2017 Particulars ( `cr) 2QFY18E 2QFY17 y-o-y 1QFY18 q-o-q PAT (29.6) Power Finance Corporation - Nov 01, 2017 Particulars ( `cr) 2QFY18E 2QFY17 y-o-y 1QFY18 q-o-q PAT 1,770 1,873 (5.5) 1, Hindalco Ltd - Nov 03, 2017 Particulars ( ` cr) 2QFY18E 2QFY17 y-o-y 1QFY18 q-o-q Sales 10,716 9, , EBIDTA 1,314 1, , % PAT

4 Top Picks Company Market Cap (` Cr) CMP (`) Target (`) Upside Alkem Laboratories 22,733 1,901 2, Asian Granito 1, Blue Star 6, Dewan Housing Finance 20, Karur Vysya Bank 7, KEI Industries 2, Music Broadcast 2, Navkar Corporation 2, Siyaram Silk Mills 2, TV Today Network 2, Maruti Suzuki 2,48,168 8,215 8, GIC Housing 2, Rationale Strong growth in domestic business due to its leade`hip in acute therapeutic segment. Alkem expects to launch more products in USA, which bodes for its international business. We expect the company would report strong profitability owing to better product mix, higher B2C sales and amalgamation synergy. Favorable outlook for the AC industry to augur well for Cooling products business which is out pacing the market growth. EMPPAC division's profitability to improve once operating environment turns around. With a focus on the low and medium income (LMI) consumer segment, the company has increased its presence in tier-ii & III cities where the growth opportunity is immense. Loan growth is likely to pick up after a sluggish FY17. Lower credit cost will help in strong bottom-line growth. Increasing share of CASA will help in NIM improvement. High order book execution in EPC segment, rising B2C sales and higher exports to boost the revenues and profitability Expected to benefit from the lower capex requirement and 15 year long radio broadcast licensing. Massive capacity expansion along with rail advantage at ICD as well CFS augur well for the company Strong brands and distribution network would boost growth going ahead. Stock currently trades at an inexpensive valuation. Market leadership in Hindi news genre and no. 2 viewership ranking in English news genre, exit from the radio business, and anticipated growth in ad spends by corporate to benefit the stock. After GST, the company is expected to see higher volumes along with improving product mix. The Gujarat plant will also enable higher operating leverage which will be margin accretive. We expect loan book to grow at 24.3% over next two year; change in borrowing mix will help in NIM improvement.. Source: Company, Angel Research

5 Key Upcoming Events Result Calendar Date November 04, 2017 Company Punjab N atl.bank, Power Fin.Corpn., Union Bank, UCO Bank, Hindalco, Tata Power Co., VRL Logistics Sarda Energy, Relaxo Source: Bloomberg, Angel Research Global economic events release calendar Date Time Country Event Description Unit Period Bloomberg Data Last Reported Estimated Nov 03, :00 PMUS Change in N onfarm payrolls Thousands Oct (33.00) China Exports YoY% % Change Oct Nov 06, :00 PMUS Unnemployment rate % Oct Nov 08, :25 PMGermany PMI Services Value Oct F Nov 09, :00 AMChina Consumer Price Index (YoY) % Change Oct :00 PMUK Industrial Production (YoY) % Change Sep 1.60 Nov 10, 2017 India Imports YoY% % Change Oct India Exports YoY% % Change Oct :30 PMIndia Industrial Production YoY % Change Sep 4.30 Nov 14, :30 PMEuro Zone Euro-Zone GDP s.a. (QoQ) % Change 3Q P :30 AMChina Industrial Production (YoY) % Change Oct :00 PMUK CPI (YoY) % Change Oct : 00 PMIndia Monthly Wholesale Prices YoY% % Change Oct : 30 PMGermany GDP nsa (YoY) % Change 3Q P 0.80 US Producer Price Index (mom) % Change Oct 0.80 Source: Bloomberg, Angel Research ngelbr oki ng.c o m

6 Macro watch Exhibit 1: Quarterly GDP trends Exhibit 2: IIP trends QFY QFY QFY QFY QFY QFY QFY QFY QFY QFY QFY QFY (1.0) 4.2 Oct Nov Dec Jan Feb Mar Apr May-17 (0.2) Jun Jul Aug-17 Source: CSO, Angel Research Source: MOSPI, Angel Research Exhibit 3: Monthly CPI inflation trends Exhibit 4: Manufacturing and services PMI Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug-17 Sep Sep-16 Oct-16 Nov-16 Dec-16 Mfg. PMI Jan-17 Feb-17 Mar-17 Apr-17 Services PMI May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Source: MOSPI, Angel Research Source: Market, Angel Research; Note: Level above 50 indicates expansion Exhibit 5: Exports and imports growth trends Exhibit 6: Key policy rates 60.0 Exports yoy growth Imports yoy growth 6.50 Repo rate Reverse Repo rate CRR Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Nov-16 Dec-16 Jan-17 Jan-17 Feb-17 Mar-17 Mar-17 Apr-17 May-17 May-17 Jun-17 Jul-17 Aug-17 Aug-17 Sep-17 Oct-17 Source: Bloomberg, Angel Research Source: RBI, Angel Research ngelbr oki ng.c o m

7 Global watch Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries Brazil Russia India China South Africa Indonesia Malaysia Thailand UK USA Germany France Japan Source: Bloomberg, Angel Research Exhibit 2: 2017 GDP Growth projection by IMF (%, yoy) across select developing and developed countries Brazil Russia India China South Africa Indonesia Malaysia Thailand UK USA Germany France Japan Source: IMF, Angel Research Exhibit 3: One year forward P-E ratio across select developing and developed countries (x) Brazil 13.4 Russia 5.4 India China South Africa Indonesia Malaysia Thailand UK USA Germany France Japan Source: IMF, Angel Research ngelbr oki ng.c o m

8 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) Agri / Agri Chemical ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E Rallis Reduce ,699 1,873 2, United Phosphorus Accumulate ,571 18,922 21, Auto & Auto Ancillary Ashok Leyland Neutral ,567 23,339 27, Bajaj Auto Neutral 3,239-93,712 23,936 27, Bharat Forge Buy ,398 7,637 8, Eicher Motors Neutral 31,140-84,772 19,043 22, , Gabriel India Neutral 198-2,851 1,782 2, Hero Motocorp Accumulate 3,733 4,129 74,548 32,239 36, Jamna Auto Industries Neutral 65-2,600 1,441 1, Mahindra and Mahindra Neutral 1,335-82,931 46,971 53, Maruti Accumulate 8,215 8, ,168 81, , Minda Industries Neutral 901-7,788 4,328 5, Motherson Sumi Neutral ,491 55,937 64, Tata Motors Neutral , , , TVS Motor Neutral ,646 13,992 16, Amara Raja Batteries Buy ,822 6,140 7, Exide Industries Neutral ,761 8,689 9, Apollo Tyres Neutral ,066 15,739 17, Ceat Neutral 1,688-6,827 6,661 7, JK Tyres Neutral 145-3,289 8,318 9, Swaraj Engines Neutral 1,996-2, Subros Neutral 258-1,546 1,855 2, Capital Goods BEML Neutral 1,720-7,164 4,286 5, Bharat Electronics Neutral ,516 10,258 12, Voltas Neutral ,048 6,778 8, BHEL Neutral 98-35,833 33,200 39, Blue Star Buy ,894 5,220 6, CG Power and Industrial Neutral 85-5,356 6,555 7, , Solutions Greaves Cotton Neutral 128-3,130 1,778 1,

9 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) Capital Goods ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E KEC International Accumulate ,859 9,779 11, KEI Industries Accumulate ,623 3,001 3, Thermax Neutral ,615 4,125 4, VATech Wabag Buy ,210 3,867 4, Cement ACC Neutral 1,799-33,782 12,255 13, Ambuja Cements Neutral ,509 10,250 11, India Cements Neutral 189-5,838 6,135 6, JK Cement Neutral 1,004-7,021 4,150 4, J K Lakshmi Cement Neutral 437-5,142 3,422 3, Orient Cement Neutral 179-3,657 2,215 3, UltraTech Cement Neutral 4, ,740 28,250 35, Construction KNR Constructions Neutral 277-3,892 1,846 2, Larsen & Toubro Neutral 1, ,613 95, , Gujarat Pipavav Port Neutral 138-6, PNC Infratech Neutral 204-5,230 2,040 2, Simplex Infra Neutral 527-2,607 6,012 6, Sadbhav Engineering Neutral 311-5,328 3,823 4, NBCC Neutral ,630 9,099 12, MEP Infra Neutral 106-1,724 2,403 2, SIPL Neutral 127-4,484 2,060 2, (5.8) (3.1) (14.2) (2.3) Engineers India Neutral ,369 1,795 2, Financials Axis Bank Accumulate ,097 32,558 35, Bank of Baroda Neutral ,032 22,533 26, Canara Bank Neutral ,050 17,925 20, Can Fin Homes Buy 473 2,128 6, Cholamandalam Inv. & Neutral Fin. Co. 1,244-19,442 2,826 3, Dewan Housing Finance Accumulate ,373 2,676 3, Equitas Holdings Buy ,891 1,125 1, Federal Bank Accumulate ,035 4,896 5,

10 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) Financials ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E GIC Housing Buy , HDFC Bank Neutral 1, ,856 55,236 63, ICICI Bank Neutral ,167 42,361 51, Karur Vysya Bank Buy ,714 3,289 3, LIC Housing Finance Neutral ,550 4,895 6, Punjab Natl.Bank Neutral ,985 23,708 25, RBL Bank Neutral ,613 2,309 2, Repco Home Finance Buy , South Ind.Bank Neutral 31-5,530 3,195 3, St Bk of India Neutral , , , Union Bank Neutral ,411 14,650 16, Yes Bank Neutral ,364 11,088 13, FMCG Akzo Nobel India Neutral 1,923-9,223 3,164 3, Asian Paints Neutral 1, ,041 17,603 20, , , Britannia Neutral 4,658-55,922 9,690 11, Colgate Neutral 1,039-28,263 4,420 5, Dabur India Neutral ,297 8,346 9, GlaxoSmith Con* Neutral 5,360-22,543 5,072 5, Godrej Consumer Neutral ,634 10,171 11, HUL Neutral 1, ,352 37,077 41, , , ITC Neutral ,509 44,588 49, Marico Neutral ,321 6,788 7, Nestle* Neutral 7,268-70,076 10,083 11, Tata Global Neutral ,286 7,121 7, Procter & Gamble Hygiene Neutral 8,795-28,549 3,034 3, IT HCL Tech^ Buy 856 1, ,107 50,009 54, Infosys Buy 923 1, ,989 70,333 75, TCS Neutral 2, , , , Tech Mahindra Accumulate ,648 30,545 32,

11 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) IT ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E Wipro Neutral ,618 54,164 56, Media D B Corp Neutral 367-6,742 2,404 2, HT Media Neutral 103-2,386 2,589 2, Jagran Prakashan Buy ,860 2,541 2, Sun TV Network Neutral ,661 3,238 3, Hindustan Media Ventures Neutral 234-1,719 1,002 1, TV Today Network Buy , Music Broadcast Limited Accumulate , Metals & Mining Coal India Neutral ,039 82,301 91, Hind. Zinc Neutral ,886 22,108 24, Hindalco Neutral , , , JSW Steel Neutral ,395 64,500 68, NMDC Neutral ,862 10,209 11, SAIL Neutral 80-32,979 54,100 63, (10.0) Vedanta Neutral ,682 81,206 87, Tata Steel Neutral , , , Oil & Gas GAIL Neutral ,762 53,115 52, ONGC Neutral ,265 83,111 84, Indian Oil Corp Neutral , , , Reliance Industries Neutral , , , Pharmaceuticals Alembic Pharma Buy ,684 3,903 4, Alkem Laboratories Ltd Accumulate 1,901 2,079 22,733 6,320 7, Aurobindo Pharma Neutral ,235 17,086 19, Aventis* Neutral 4,674-10,764 2,508 2, Cadila Healthcare Sell ,098 11,584 13, Cipla Sell ,981 16,619 19, Dr Reddy's Neutral 2,405-39,880 15,844 17, GSK Pharma* Neutral 2,616-22,161 3,260 3, Indoco Remedies Sell ,395 1,154 1,

12 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) Pharmaceuticals ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E Ipca labs Neutral 527-6,645 3,593 4, Lupin Buy 1,061 1,467 47,931 18,657 21, Natco Pharma Accumulate 997 1,057 17,373 1,886 2, Sun Pharma Neutral ,126 32,899 36, Syngene International Accumulate ,033 1,402 1, Power Tata Power Neutral 85-22,936 32,547 33, NTPC Neutral ,831 86, , Power Grid Neutral ,479 29,183 32, Real Estate Prestige Estate Neutral ,207 4,607 5, MLIFE Buy , Telecom Bharti Airtel Neutral ,099 97, , Idea Cellular Neutral ,431 35,012 37, (4.4) (2.7) (6.8) (4.6) zothers Abbott India Neutral 4,326-9,193 3,244 3, Asian Granito Accumulate ,512 1,169 1, Bajaj Electricals Neutral 392-3,977 4,646 5, Banco Products (India) Neutral 218-1,559 1,530 1, Coffee Day Enterprises Ltd Neutral 223-4,594 3,494 3, Elecon Engineering Neutral Garware Wall Ropes Neutral 923-2, , Goodyear India* Neutral 811-1,871 1,717 1, Hitachi Neutral 2,341-6,366 2,355 2, HSIL Neutral 418-3,022 2,240 2, Interglobe Aviation Neutral 1,248-45,136 22,570 27, Jyothy Laboratories Neutral 390-7,090 1,781 2, Linc Pen & Plastics Neutral M M Forgings Neutral 839-1, Mirza International Neutral 165-1,987 1,148 1, Navkar Corporation Buy , Nilkamal Neutral 1,620-2,417 2,317 2,

13 Stock Watch Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM EPS ( ) PER(x) P/BV(x) RoE EV/Sales(x) ( ) Price ( ) ( cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E zothers Parag Milk Foods Neutral 271-2,283 1,987 2, Radico Khaitan Neutral 212-2,819 1,811 1, Relaxo Footwears Neutral 587-7,046 1,981 2, Siyaram Silk Mills Accumulate ,791 1,769 1, Styrolution ABS India* Neutral 950-1,671 1,800 1, Surya Roshni Neutral 369-1,618 4,870 5, TVS Srichakra Neutral 3,180-2,435 2,729 2, Visaka Industries Neutral 666-1,058 1,104 1, VIP Industries Accumulate ,958 1,450 1, Navin Fluorine Neutral 734-3, , Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on November 02, 2017

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