ACCUMULATE Rs1,700 - · PDF fileChapter heading (1St heading) ... MFs/FIs/Banks 12.6 12.7 12.3 Others 17.7 ... We are factoring in 10 years of

0

100

200

300

400

500

600

700

800

0

5,000

10,000

15,000

20,000

25,000

Jan-00 Feb-07 Jul-07 Jan-08 Jul-08

Sensex Lupin

Chapter heading (1St heading)

IndusInd Bank (IIB) reported healthy set of numbers for Q3 with PAT of Rs9.4bn (qGR - Rs9.8bn) on back accelerated growth as well as steady margins and operational performance.

Retail traction combined with steady corporate demand uptick led to ~25.1% y-y growth in loan book to Rs1285bn.

NIM remained stable sequentially at ~399bps, primarily from continued improvement in liability franchise countering yield pressure.

Against moderating deposit levels in the system, the bank delivered healthy deposit growth of 25% and further CASA improvement to ~43% as bank’s differentiated acquisition strategies and digital initiatives begin paying dividends

The bank delivered on another core strength as lower trading income, down 17% y-y, was offset by robust core fee income of 22% y-y from the strong distribution platform and other fees

C/I ratio stable sequentially at ~46%, reflecting expansionary initiatives along with technology investments.

Asset quality stable with total stress on the book increasing 6bps q-q – Fresh slippages in line with our expectations considering relatively risky retail book.

Major concerns on future credit cost trajectory alleviated by the NPA uptick being broad-based as opposed to any specific accounts and ~60% PCR.

Credit cost of ~15bps for the quarter, against ~18bps in 2QFY18, implies expected total costs for the fiscal to be stable y-y around ~60bps.

Adequacy ratios improved further due to lower risk-weights for fee income and consumer book, reducing need for additional growth capital.

We remain constructive on the bank considering healthy and stable performance outlook, high levels of product/geographic diversification, robust digital infrastructure and differentiated strategies.

Accordingly, we make minor changes to our model and keep PT intact at Rs1994, corresponding to P/ABV of ~3.2x FY19E. We maintain our ACCUMULATE rating.

Credit growth accelerating – Corporate uptick gains in strength: The bank recorded credit growth of 25.1% y-y from robust retail demand. Consumer book grew ~24% y-y as CV financing demand “boom” was supported by strong growth across the book, particularly tractors, equipment financing and credit cards. Importantly, corporate book grew 26% y-y as WC demand continued while greenfield capex requirements picked up, also reflecting sustainability of current uptick.

BFIN merger update: Management expects merger to be completed by 2QFY19 on higher side and confirmed 4QFY18 standalone reporting.

Valuation: Accordingly, we make minor modeling changes and keep PT intact at Rs1994, corresponding to P/ABV of ~3.2x FY19E (post issuance of equity to BFIN and promoters). We maintain our ACCUMULATE rating.

Risk: Slowdown in loan growth and further stress in asset quality are the key risks.

ACCUMULATE Rs1,700

Reuters : INBK.BO Bloomberg: I IB IN

Price Target Rs1,994

Rishabh Bhargava

rishabh.bhargava@quantcapita l .co.in

022 4088 0342

Market cap Rs1,019 bn (US$16.2 bn)

52-week high/Low Rs1,818/1,137

Share o/s (ful ly di luted): 600 (mn)

Avg da i ly trading vol (3m): 1,403 ('000)

Avg da i ly trading va l (3m): Rs2,332 mn (US$37 mn)

Source: Bloomberg

quant vs Consensus (Rs)

PT EPS (FY19E)

Mean 1,910 77.3

High 2,150 84.5

Low 1,310 67.5

quant 1,994 62.0

Buy(s ) Hold(s ) Sel l (s )

Nos 40 9 1

Source: Bloomberg

Shareholding pattern (%)

Dec17 Mar17 Dec16

Promoters 15.0 15.0 15.0

FIIs 54.8 54.8 55.0

MFs/FIs/Banks 12.6 12.7 12.3

Others 17.7 17.6 17.7

Source: Bloomberg

Price performance (Rs) vs the Sensex

Source: Bloomberg

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

SENSEX Index IIB IN Equity (RHS)

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

24,000

25,000

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

SENSEX Index IIB IN Equity (RHS)

India Equity Research | Banking and Financials January 11, 2018 Result Update

Firing on all cylinders

IndusInd Bank

Note: pricing as on 11 January 2018; Source: Company data, quant Global Research estimates

Exhibit 1: Financials and valuation

YE EPS Adj BV P/E P/Ad B ROE ROA

March (Rs mn) Change (%) (Rs mn) Change (%) (Rs mn) Change (%) (Rs) (Rs) (x) (x) (%) (%)

FY15 34,203 18.3 30,982 19.3 17,937 27.4 33.4 194.3 50.9 8.7 18.2 1.8

FY16 45,166 32.1 41,414 33.7 22,865 27.5 39.3 291.8 43.3 5.8 16.1 1.8

FY17 60,626 34.2 54,510 31.6 28,679 25.4 47.6 328.9 35.7 5.2 15.0 1.8

FY18E 74,446 22.8 65,593 20.3 34,377 19.9 49.4 323.6 34.4 5.3 15.6 1.8

FY19E 92,340 24.0 80,745 23.1 43,131 25.5 62.0 624.7 27.4 2.7 12.7 1.7

NII Operating Profit Net Profit

IndusInd Bank: firing on all cylinders

January 11, 2018 2

Quarterly financials Exhibit 2: 3Q FY18 results - Variation statement

Rs (mn) 3QFY18 3QFY17 % change y-y 2QFY18 % change q-q

Interest Earned 42,868 36,993 15.9 42,084 1.9

Interest Exp 23,920 21,209 12.8 23,874 0.2

Net Interest Income 18,948 15,784 20.0 18,210 4.1

NIM (reported) 4.0 4.0 (1bps) 4.0 -

Operating Exp 14,169 12,319 15.0 13,751 3.0

Non-interest Income 11,868 10,168 16.7 11,876 (0.1)

Pre Provis ioning Profi t 16,647 13,633 22.1 16,335 1.9

Provis ion & Contingencies 2,362 2,169 8.9 2,938 (19.6)

PBT 14,285 11,465 24.6 13,398 6.6

Income Tax Expense (Gain) (4,923) (3,959) 24.4 (4,597) 7.1

Net Profi t/(Loss ) 9,362 7,506 24.7 8,801 6.4

EPS 15.5 12.5 24.1 14.5 6.4

Gross NPA (%) 1.2 0.9 22bps 1.1 8bps

Net NPA (%) 0.5 0.4 7bps 0.4 2bps

Depos its (Rs in Bn) 1,461 1,192 22.5 1,414 3.3

Net Advances (Rs in Bn) 1,285 1,028 25.1 1,232 4.4

Source: Company data, quant Global Research

Exhibit 3: 3Q FY18 results – Key parameters and ratios

Ratios (%) 3QFY18 3QFY17 % change y-y 2QFY18 % change q-q

Profitability ratios

RoaA 2.0 1.9 8bps 1.9 6bps

RoaE 17.0 15.7 124bps 16.5 48bps

NIM 4.0 4.0 (1bps) 4.0 (1bps)

Yield on Advances 11.0 11.9 (83bps) 11.0 4bps

Cost of Depos its 5.8 6.4 (61bps) 5.9 (11bps)

Asset Quality

Gross NPL ratio 1.2 0.9 22bps 1.1 8bps

Net NPL ratio 0.5 0.4 7bps 0.4 2bps

Coverage ratio 60.3 58.5 183bps 59.3 109bps

% restructured adv. 0.1 0.4 (26bps) 0.2 (1bps)

Business & Other Ratios

CASA Mix 43.0 37.1 590bps 42.0 100bps

Cost-income ratio 46.0 47.5 (149bps) 45.7 27bps

Non int. inc / tota l income 21.7 21.6 12bps 22.0 (33bps)

Credit depos it ratio 88.0 86.2 (179bps) 87.1 90bps

CAR 15.8 15.3 52bps 15.6 20bps

Tier-I 15.3 14.7 59bps 15.1 24bps

Source: Company data, quant Global Research

IndusInd Bank: firing on all cylinders

January 11, 2018 3

Exhibit 4: Further acceleration in both deposits and loan book growth

22.4% 21.7%

24.8%23.1%

30.6%

28.7% 28.5%29.7%

26.4%25.1%

27.9%

24.3% 24.5% 25.1%

24.4%23.3% 22.5%

21.6% 22.5%24.6% 25.4%

31.0%

38.9%37.9%

36.1%

31.4%

25.9%

22.5%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

0%

5%

10%

15%

20%

25%

30%

35%

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Advances growth YoY(%) Deposits growth YoY (%)

Source: Company data, quant Global Research

Exhibit 5: Steady NIMs supported by shift to higher yielding retail book

34% 34% 34% 35% 35% 35% 35% 34% 37% 37% 37% 38%42% 43%

3.6%

3.7% 3.7% 3.7%

3.9%3.9%

3.9%4.0%

4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

3.4%

3.5%

3.6%

3.7%

3.8%

3.9%

4.0%

4.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

CASA deposits(%) NIM (%) - RHS

Source: Company data, quant Global Research

Exhibit 6: Marginal NPA uptick – diversified source of stress alleviates concerns

1.08% 1.05%

0.82% 0.79% 0.77% 0.82% 0.87% 0.91% 0.90% 0.94% 0.93%

1.09% 1.08%1.16%

0.33% 0.32% 0.31% 0.31% 0.31% 0.33% 0.36% 0.38% 0.37% 0.39% 0.39% 0.44% 0.44% 0.46%

70.2% 70.0%

62.6% 61.0% 60.0% 59.8% 58.6% 58.3% 58.5% 58.5% 58.4% 59.6% 59.3% 60.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Gross NPA (%) Net NPA (%) Coverage Ratio (%) - RHS

Source: Company data, quant Global Research

IndusInd Bank: firing on all cylinders

January 11, 2018 4

Valuation We value the bank on Excess Return on Equity (ERoE) basis with Cost of Equity at 13.1%. We consider risk free return at 6.75% whereas assume market risk premium of 6%. We are factoring in 10 years of growth projections and terminal growth of 3% till perpetuity.

Accordingly, we make minor changes to our model and keep PT intact at Rs2000, corresponding to P/ABV of ~3.2x FY19E. We maintain our ACCUMULATE rating.

Exhibit 7: Key assumptions Exhibit 8: PT calculation and upside

Valuation assumptions and inputs

FY19E RoE (%) 12.7

Normal ised RoE (%) 15.0

Growth in ini tia l years , g (%) 22.7

Number of high growth years , n 10.0

Cost of equity, Ke (%) 12.8

Avregae RoE (%) 14.1

PT calculation and upside

Fair price - P/ABV, Rs 1,994

Target P/ABV (x) 3.2

Target P/E (x) 32

Current price, Rs 1,700

Ups ide (%) 17.3%

Dividend yield (%) 0.4%

Tota l return (%) 17.7%

Source: quant Global Research estimates Source: quant Global Research estimates

IndusInd Bank: firing on all cylinders

January 11, 2018 5

Valuation charts Exhibit 9: One-year forward P/ABV (x) – 3 Year Average Exhibit 10: One-year forward P/ABV (x) – 5 Year Average

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Mar

-11

Sep

-11

Mar

-12

Au

g-1

2

Feb

-13

Au

g-1

3

Jan

-14

Jul-

14

De

c-1

4

Jun

-15

De

c-1

5

May

-16

No

v-1

6

May

-17

Oct

-17

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Mar

-11

Au

g-1

1

Jan

-12

May

-12

Oct

-12

Feb

-13

Jul-

13

De

c-1

3

Ap

r-1

4

Sep

-14

Jan

-15

Jun

-15

No

v-1

5

Mar

-16

Au

g-1

6

De

c-1

6

May

-17

Oct

-17

P/ABV 5 yr avg. avg. + 1 SD avg. - 1 SD

Source: Bloomberg, quant Global Research estimates Source: Bloomberg, quant Global Research estimates

Exhibit 11: One-year forward P/ABV

-200

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mar

-08

Oct

-08

May

-09

De

c-0

9

Jun

-10

Jan

-11

Au

g-1

1

Mar

-12

Sep

-12

Ap

r-1

3

No

v-1

3

Jun

-14

De

c-1

4

Jul-

15

Feb

-16

Au

g-1

6

Mar

-17

Oct

-17

Price, Rs. 0.8x 1.8x 2.8x 3.8x

Exhibit 12: One-year forward P/E

-200

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mar

-08

Oct

-08

May

-09

De

c-0

9

Jun

-10

Jan

-11

Au

g-1

1

Mar

-12

Sep

-12

Ap

r-1

3

No

v-1

3

Jun

-14

De

c-1

4

Jul-

15

Feb

-16

Au

g-1

6

Mar

-17

Oct

-17

Price, Rs. 8x 14x 20x 26x

Source: Bloomberg, quant Global Research estimates Source: Bloomberg, quant Global Research estimates

IndusInd Bank: firing on all cylinders

January 11, 2018 6

Key financials Exhibit 13: Financial statements (YE March)

Profit & Loss (Rs mn) FY15 FY16 FY17 FY18E FY19E Balance Sheet (Rs mn) FY15 FY16 FY17 FY18E FY19E

Net interest income 34,203 45,166 60,626 74,446 92,340 Share Capita l 5,435 6,088 6,133 6,133 7,127

growth (%) 18.3 32.1 34.2 22.8 24.0 Reserves 1,01,010 1,70,884 2,00,343 2,28,852 4,38,221

NIM (%) 3.9 4.0 4.2 4.2 4.1 Depos its 7,41,344 9,30,003 12,65,722 15,55,708 20,09,613

Operating expenses 28,701 36,721 47,831 60,096 74,188 Borrowings 2,06,181 2,49,959 2,24,537 2,32,436 2,82,689

Other Operating Income 25,480 32,969 41,715 51,242 62,593 Other Liabi l i ties 63,904 72,048 89,764 1,07,717 1,23,874

Operating profit 30,982 41,414 54,510 65,593 80,745 Total Liabilities 11,17,874 14,28,982 17,86,499 21,30,846 28,61,525

growth (%) 19.3 33.7 31.6 20.3 23.1

Provis ion 3,891 6,722 10,913 13,109 14,896 Cash Balances 40,351 45,210 77,487 1,01,731 1,74,808

PBT 27,092 34,693 43,597 52,483 65,849 Bal . with banks 66,463 84,308 1,08,795 83,235 1,43,025

Taxes (9,155) (11,828) (14,918) (18,107) (22,718) Investments 2,28,783 3,12,155 3,67,036 4,21,859 4,96,410

Net profit 17,937 22,865 28,679 34,377 43,131 Advances 6,87,882 8,84,193 11,30,805 14,08,915 19,18,498

Adjusted net profit 17,937 22,865 28,679 34,377 43,131 Other Assets 81,841 90,561 89,023 99,751 1,11,126

Shares o/s (mn nos) 536.9 582.4 603.0 696.1 696.1 Total assets 11,17,874 14,28,982 17,86,499 21,30,846 28,61,525

RoA/RoE Analysis FY15 FY16 FY17 FY18E FY19E Asset Quality FY15 FY16 FY17 FY18E FY19E

Yield on Loans and Advances (%) 12.5 11.8 11.4 10.9 10.5 Gross NPA (Rs mn) 5,629 7,768 10,549 14,065 17,955

Yield on Investments (%) 7.1 7.6 7.3 7.0 6.8 Gross NPA (%) 0.81 0.88 0.93 1.00 0.94

Cost of Funds (%) 6.6 6.2 5.6 5.4 5.2 Net NPA (Rs mn) 2,105 3,218 4,389 5,824 6,947

Net Interest Margin (%) 3.9 4.0 4.2 4.2 4.1 Net NPA (%) 0.31 0.36 0.39 0.41 0.36

Advances (Rs bn) (A) 687.9 884.2 1,130.8 1,408.9 1,918.5 % coverage of NPA 66 63 59 58 59

Investments (Rs bn) (B) 228.8 312.2 367.0 421.9 496.4 Del inquencies (%) 1.13 1.29 0.96 1.26 1.10

Interest Earning Asset (C=A+B) 916.7 1,196.3 1,497.8 1,830.8 2,414.9 Loan loss prov (bps) 64.4 69.5 92.9 90.0 75.0

Average Interest Earning Assets (D) 916.7 1,056.5 1,347.1 1,664.3 2,122.8

NII/Avg Int Earning Assets (%) 3.7 4.3 4.5 4.5 4.3 Capital Adequacy Ratio FY15 FY16 FY17 FY18E FY19E

Non Int Inc/Avg Int Earning Assets (%) 2.8 3.1 3.1 3.1 2.9 RWA (Rs . bn) 889.0 1,162.9 1,436.3 1,704.7 2,289.2

Tot Inc/Avg Int Earning Assets (%) 6.5 7.4 7.6 7.6 7.3 Tier I (%) 11.2 14.9 14.7 14.1 19.7

Op. Costs/Avg Int Earning Assets (%) 3.1 3.5 3.6 3.6 3.5 Tier I I (%) 0.9 0.6 0.6 0.6 0.6

PPI/Avg Int Earning Assets (%) 3.4 3.9 4.0 3.9 3.8 Tota l CAR (%) 12.1 15.5 15.3 14.7 20.3

Provis ions/Avg Int Earning Assets (%) 0.4 0.6 0.8 0.8 0.7

Taxes/Avg Int Earning Assets (%) (1.0) (1.1) (1.1) (1.1) (1.1) Key assumptions FY15 FY16 FY17 FY18E FY19E

Return on Avg Int Earning Assets (%) 2.0 2.2 2.1 2.1 2.0 Depos i t growth (%) 22.5 25.4 36.1 22.9 29.2

Extraordinary i tem (%) - - - - - Cost of funds (%) 6.6 6.2 5.6 5.4 5.2

Adj Return on Avg Int Earning Assets (%) 2.0 2.2 2.1 2.1 2.0 Advances growth (%) 24.8 28.5 27.9 24.6 36.2

Productivi ty (D/Avg Tota l Assets ) 0.9 0.8 0.8 0.8 0.9 Yield on advances (%) 12.5 11.8 11.4 10.9 10.5

Return on Avg Total Assets (RoA) (%) 1.8 1.8 1.8 1.8 1.7 Investment growth (%) 24.8 28.5 27.9 24.6 36.2

Leverage 10.1 9.0 8.4 8.9 7.3 Yield on Inv (%) 7.1 7.6 7.3 7.0 6.8

Return on Avg Equity (RoE) (%) 18.2 16.1 15.0 15.6 12.7 Borrowings Growth(%) 39.7 21.2 (10.2) 3.5 21.6

Note: pricing as on 11 January 2018; Source: Company data, quant Global Research estimates

IndusInd Bank: firing on all cylinders

January 11, 2018 7

Rating history – IndusInd Bank

Source: quant Global Research estimates

Institutional Equities Research coverage universe – distribution of ratings

RATINGS AND OTHER DEFINITIONS

STOCK RATING SYSTEM

BUY. We expect the stock to del iver >15% absolute returns .

ACCUMULATE. We expect the stock to del iver 6-15% absolute returns .

REDUCE. We expect the stock to del iver +5% to -5% absolute returns .

SELL. We expect the stock to del iver negative absolute returns of >5%.

Not Rated (NR). We have no investment opinion on the stock. SECTOR RATING SYSTEM

Overweight. We expect the sector to relatively outperform the Sensex.

Underweight. We expect the sector to relatively underperform the Sensex.

Neutral. We expect the sector to relatively perform in l ine with the Sensex.

0

500

1000

1500

2000

2500

Oct

-13

No

v-1

3

De

c-1

3

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

De

c-1

4

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

LTP (Rs) Buy Accumulate Reduce Sell PT (Rs)

30%

39%

18%

14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Buy Accumulate Reduce Sell

IndusInd Bank: firing on all cylinders

January 11, 2018 8

DISCLOSURES AND DISCLAIMER

quant Broking Private Limited, Mumbai, India (Hereinafter referred to as “QBPL”) is Registered Member of National Stock Exchange of India Limited and Bombay Stock

Exchange Limited. QBPL is also registered as Depository Participant with NSDL. QBPL is an registered entity as Research Analyst under SEBI (Research Analyst)

Regulations, 2014. QBPL or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market.

ANALYST(S) CERTIFICATION

“I, Rishabh Bhargava, Research Analyst hereby certify that all of the views expressed in this Research Report accurately reflect my personal views about all

of the issuers and their securities and no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views

expressed in this research report.”

As per the declarations given by the Research Analyst(s) and/or any of his family members do not serve as an officer, director or any way connected to the company/companies mentioned in this report. Further, he/they has/have not received any compensation neither for investment banking/merchant banking/brokerage services or other products/services nor for benefit of him/them or third party in connection with research report and also have not managed or co-managed public offering of securities from the company or its associates in the preceding twelve months. The Research Analysts or company or its associates do not have actual/beneficial ownership of one per cent or more securities of the company. Our entire research professionals are our employees and are paid a salary and they are not engaged in any market making activity. The Reserch Analyst or company or its associates do not have any financial interest in the company. They do not have any other material conflict of interest of the Research Analyst or member of which the Research Analyst knows of has reason to know at the time of publication of the research report or at the time of the public appearance.

The Research Analyst(s) are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely delinked from all the other companies and/or entities of quant Broking Private Limited (QBPL), and have no bearing whatsoever on any recommendation that they have given in the Research Report.

This Research Report (hereinafter called “Report”) is meant solely for use by the recipient and is not for circulation. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This document does not solicit any action based on the material contained herein.

This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by QBPL to be reliable. QBPL or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information, opinions/views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of QBPL shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/opinions/views contained in this Report. This Report is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this Report should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this report (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. Though disseminated to clients simultaneously, not all clients may receive this report at the same time. The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. This information is subject to change without any prior notice. QBPL or any of its affiliates/group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. QBPL is committed to providing independent and transparent recommendation to its clients. Neither QBPL nor any of its affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including loss of revenue or lost profits that may arise from or in connection with the use of the information. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information.

The price and value of the investments referred to in this Report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. QBPL does not provide tax advice to its clients, and all investors are strongly advised to consult with their tax advisers regarding taxation aspects of any potential investment. Opinions expressed are our current opinions as of the date appearing on this Research only. We do not undertake to advise you as to any change of our views expressed in this Report.

QBPL and/or its associates and/or employees and/or Clients may; (a) from time to time, have long or short positions in and buy or sell the investments in/security of Company(ies) mentioned herein or (b) be engaged in any other transaction involving such investments/securities of company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) these and other activities of QBPL and its associates or employees may not be construed as potential conflict of interest with respect to any recommendation and related information and opinions. Without limiting any of the foregoing, in no event shall QBPL and its associates or employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind.

Regn. No.:

CAPITAL MARKET SEBI REGN. NO.: BSE: INB011419430 EQUITY DERIVATIVES SEBI REGN. NO.: BSE: INF011419430

CAPITAL MARKET SEBI REGN. NO.: NSE: INB231419434 FUTURES AND OPTIONS SEBI REGN. NO.: NSE: INF231419434

CURRENCY DERIVATIVES SEBI REGN. NO.: NSE: INE231419434

Member (NSE and BSE)

Depository Participant (DP) NSDL DP ID: IN303614

Website www.quantcapita l .co.in

Drishti Shah

Tel : (022) 4088 0100; Emai l : drishti .shah@quantcapita l .co.inCompliance Officer Details:

Registered Office 612, Maker Chambers IV, Nariman Point, Mumbai 400 021, India | phone 91 22 4088 0100 | fax 91 22 4088 0249-250

QUANT BROKING PRIVATE LIMITED (CIN: U67110MH2007PTC291657)

IndusInd Bank: firing on all cylinders

January 11, 2018 9

612, maker chambers IV, nariman point, Mumbai 400 021, india

phone 91 22 4088 0100, 3025 0100 fax 91 22 4088 0198, 3025 0198