For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES. REFER TO THE END OF THIS MATERIAL. Contents Daily Alerts Change in Reco IndusInd Bank: In a more comfortable zone; upgrade to BUY Valuations lot more comfortable today as compared to a few months back Few key headwinds to business to remain Management change is around the corner and likely to occur in FY2020 Company alerts ICICI Bank: Another chapter comes to a close Chanda Kochhar receives board approval for early retirement with immediate effect New CEO has a lower baggage to carry and to start focusing on improving return ratios Maintain BUY with unchanged TP Sector alerts Energy: This time, it's no different! Intervention in fuel prices through cut in excise duty, marketing margins and a few states' VAT Expect further interventions with OMCs requiring a hike of ~Rs3-4/liter at MTM crude and Rupee Earnings uncertainty for oil PSUs, as the government prioritizes fuel prices and fiscal receipts 9-15% cut in estimates for now; cut TPs to Rs275 for BPCL, Rs185 for HPCL and Rs120 for IOCL Economy alerts Economy: Fuel excise duty cut: Marginal impact on fiscal and inflation #1 Fiscal impact: Central excise revenue to be lower by Rs105 bn in FY2019 #2 Inflation impact: Direct impact of around 14 bps INDIA DAILY October 5, 2018 India 4-Oct 1-day 1-mo 3-mo Sensex 35,169 (2.2) (7.5) (1.1) Nifty 10,599 (2.4) (7.6) (1.4) Global/Regional indices Dow Jones 26,627 (0.7) 2.5 9.3 Nasdaq Composite 7,880 (1.8) (1.4) 3.9 FTSE 7,418 (1.2) 0.5 (2.4) Nikkei 23,864 (0.5) 5.7 10.8 Hang Seng 26,624 (1.7) (2.3) (5.5) KOSPI 2,271 (0.2) (0.9) 0.6 Value traded – India Cash (NSE+BSE) 432 419 376 Derivatives (NSE) 20,263 10,174 8,721 Deri. open interest 3,698 3,839 3,423 Forex/money market Change, basis points 4-Oct 1-day 1-mo 3-mo Rs/US$ 73.6 24 202 484 10yr govt bond, % 8.3 12 12 19 Net investment (US$ mn) 3-Oct MTD CYTD FIIs (209) (430) (2,436) MFs 121 357 13,966 Top movers Change, % Best performers 4-Oct 1-day 1-mo 3-mo WPRO IN Equity 326 (0.6) 2.1 23.3 ARBP IN Equity 757 (1.9) 8.6 22.9 JSTL IN Equity 378 (1.5) (5.2) 21.6 DIVI IN Equity 1,284 (1.9) 0.5 19.2 IDBI IN Equity 57 2.3 (4.0) 18.4 Worst performers JPA IN Equity 7 (4.2) (40.9) (56.0) YES IN Equity 215 1.1 (37.5) (38.3) IDEA IN Equity 34 (7.9) (29.4) (38.0) UT IN Equity 3 1.9 (26.0) (35.7) RCAPT IN Equity 270 (2.5) (40.7) (26.5)
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For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES. REFER TO THE END OF THIS MATERIAL.
Contents
Daily Alerts
Change in Reco
IndusInd Bank: In a more comfortable zone; upgrade to BUY
Valuations lot more comfortable today as compared to a few months back
Few key headwinds to business to remain
Management change is around the corner and likely to occur in FY2020
Company alerts
ICICI Bank: Another chapter comes to a close
Chanda Kochhar receives board approval for early retirement with
immediate effect
New CEO has a lower baggage to carry and to start focusing on improving
return ratios
Maintain BUY with unchanged TP
Sector alerts
Energy: This time, it's no different!
Intervention in fuel prices through cut in excise duty, marketing margins
and a few states' VAT
Expect further interventions with OMCs requiring a hike of ~Rs3-4/liter at
MTM crude and Rupee
Earnings uncertainty for oil PSUs, as the government prioritizes fuel prices
and fiscal receipts
9-15% cut in estimates for now; cut TPs to Rs275 for BPCL, Rs185 for
HPCL and Rs120 for IOCL
Economy alerts
Economy: Fuel excise duty cut: Marginal impact on fiscal and inflation
#1 Fiscal impact: Central excise revenue to be lower by Rs105 bn in FY2019
#2 Inflation impact: Direct impact of around 14 bps
INDIA DAILY October 5, 2018 India 4-Oct 1-day 1-mo 3-mo
Sensex 35,169 (2.2) (7.5) (1.1)
Nifty 10,599 (2.4) (7.6) (1.4)
Global/Regional indices
Dow Jones 26,627 (0.7) 2.5 9.3
Nasdaq Composite 7,880 (1.8) (1.4) 3.9
FTSE 7,418 (1.2) 0.5 (2.4)
Nikkei 23,864 (0.5) 5.7 10.8
Hang Seng 26,624 (1.7) (2.3) (5.5)
KOSPI 2,271 (0.2) (0.9) 0.6
Value traded – India
Cash (NSE+BSE) 432 419 376
Derivatives (NSE) 20,263 10,174 8,721
Deri. open interest 3,698 3,839 3,423
Forex/money market
Change, basis points
4-Oct 1-day 1-mo 3-mo
Rs/US$ 73.6 24 202 484
10yr govt bond, % 8.3 12 12 19
Net investment (US$ mn)
3-Oct MTD CYTD
FIIs (209) (430) (2,436)
MFs 121 357 13,966
Top movers
Change, %
Best performers 4-Oct 1-day 1-mo 3-mo
WPRO IN Equity 326 (0.6) 2.1 23.3
ARBP IN Equity 757 (1.9) 8.6 22.9
JSTL IN Equity 378 (1.5) (5.2) 21.6
DIVI IN Equity 1,284 (1.9) 0.5 19.2
IDBI IN Equity 57 2.3 (4.0) 18.4
Worst performers
JPA IN Equity 7 (4.2) (40.9) (56.0)
YES IN Equity 215 1.1 (37.5) (38.3)
IDEA IN Equity 34 (7.9) (29.4) (38.0)
UT IN Equity 3 1.9 (26.0) (35.7)
RCAPT IN Equity 270 (2.5) (40.7) (26.5)
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
Valuations lot more comfortable today as compared to a few months back
We move our rating on IIB back to BUY from REDUCE with an unchanged TP (higher cost of
equity) but roll forward our estimates to September 2020. The bank would trade at 3.3X book
and 20X September 2020E EPS for RoEs in the range of 16-17% and earnings growth of 30%
for FY2018-20 led by solid balance sheet growth and merger with BHAFIN. We do believe that
the recent correction of ~20% in the past three months and a relatively high degree of
underperformance addresses some of the concerns that we have had on valuations.
Few key headwinds to business to remain
IIB has a few short to medium term challenges that are likely to keep valuation in check: (1) NIM
pressure is likely to remain in the short term given the sharp rise in the cost of funds while the
loan book is unlikely to see a similar offset given the higher share of fixed interest rate retail
loan book. (2) Impact of overloading ban is an event to watch out for, though it is still not
visible in headline volume sales of new commercial vehicles. Adverse mix change is further NIM
dilutive. Also, fee income could slowdown primarily in investment banking and retail fees.
(3) Asset quality is stable in the retail portfolio, especially CVs despite the recent increase in fuel
costs as fleet utilization seems to be comfortable. We are not able to ascertain if the bank has a
sizeable exposure to any specific corporate, especially of the likes of IL&FS. (4) BHAFIN
acquisition is always likely to show unexpected surprises given the nature of its business. As
discussed previously, we believe that it would be incorrect to look at BHAFIN acquisition as a
RoE accretive business considering the high volatility in return ratios, especially when the sector
has a crisis.
Management change is around the corner and likely to occur in FY2020
Management change will happen considering that Mr Sobti’s term would end on March 23,
2020 and he would reach the upper limit of ~70 years. While the management has indicated
that succession planning is in place, the details are not in the public domain. As we have seen in
other banks and companies from other sectors, it is important to understand the senior
management exits that are likely to happen when a change is implemented at the leadership
level. It would not be too surprising if we see a few key members of the bank looking to step
down around the time that Mr Sobti retires. The management has a strong senior team that
can take this bank forward, in our view.
IndusInd Bank (IIB) Banks
In a more comfortable zone; upgrade to BUY. We upgrade IIB to BUY from
REDUCE with an unchanged TP to factor the recent correction in stock price. Our
concern on a few headwinds to business remains as the business is not at its sweetest
spot in the interest rate/loan growth cycle but we derive greater comfort in the
valuation, underlying growth opportunity given the bank’s relatively small share in
business and the impressive execution of their business plan.
BUY
OCTOBER 05, 2018
CHANGE IN RECO.
Coverage view: Attractive
Price (`): 1,590
Target price (`): 1,900
BSE-30: 35,169
M B Mahesh CFA
Nischint Chawathe
Dipanjan Ghosh
IndusInd Bank
Stock data Forecasts/Valuations 2019E 2020E 2021E
52-week range (Rs) (high,low) EPS (Rs) 69.6 86.5 101.2
Constn related to infra.- EPC 2.8 2.5 1.9 1.5 2.4 1.6 1.7 2.8 2.5
Steel 1.1 1.3 1.4 1.4 1.4 1.7 1.8 1.6 2.5
Petroleum and products 1.1 0.9 1.2 1.9
Food beverages and processing 1.6 NA NA 1.4 1.3
Telecom 2.0 3.1 3.5 NA 1.2
Roads/other infra 1.1
Power distribution NA NA 0.7
NBFCs (other than HFCs/HFIs) 6.8 5.4 3.3 2.6 2.3 2.2 1.3 NA NA
Pharma 3.5 3.3 1.9 1.2 NA 0.9 NA NA NA
Paper 0.9 NA NA NA NA NA
Food credit 1.3 1.6 NA NA 1.0 NA
Plastic & Plastic Products 1.2 NA NA
Auto ancilliaries NA NA
Hospital and medical services NA NA
Contract construction-civil 1.0 1.1 NA
Media, entertainment and adv. 1.2 NA NA
Power transmission 0.9 NA
Engineering and machinery 0.8 NA
Other Industry 32.8 31.4 37.1 38.7 33.1 31.2 30.9 26.1
Banks IndusInd Bank
4 KOTAK INSTITUTIONAL EQUITIES RESEARCH
Exhibit 3: Real estate exposure has dropped to 5% of from ~11% in FY2017 Break-up of exposure in the real estate sector, March fiscal year-ends, 2010-2018 (Rs mn)
Source: Company, Kotak Institutional Equities
Exhibit 4: IIB is trading at 3.1X one-year forward book March fiscal year-ends, Oct 2011 –2018 (X)
Borrowings and bills payable 255,159 230,540 389,567 431,048 407,396 432,501
Other liabilities 66,848 83,760 71,886 71,886 71,886 71,886
Total liabilities 1,252,010 1,580,023 1,977,845 2,650,253 3,324,975 4,135,570
Paid-up capital 5,950 5,981 6,002 7,096 7,096 7,096
Reserves and surplus 171,022 200,495 232,268 337,897 391,168 453,453
Total shareholders' equity 176,972 206,476 238,271 344,994 398,264 460,549
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
Chanda Kochhar receives board approval for early retirement with immediate effect
As per the latest press release, the BoD of ICICI Bank has accepted the request of Chanda Kochhar
for early retirement with immediate effect. She will also relinquish office from the BoD of the
bank’s subsidiaries. Her tenure as MD and CEO of ICICI Bank was until March 31, 2019. The
board has appointed Sandeep Bakshi as the new CEO and MD of the bank for a period of five
years up to October 3, 2023, subject to regulatory and other approvals. The other terms and
conditions of his appointment, such as remuneration, would remain unchanged.
Mr Bakhshi (58) started his career in 1986 and has experience in corporate and retail
businesses. He was the MD and CEO of ICICI Lombard General Insurance between 2002 and
2009. He later moved back to the bank as deputy MD overlooking the wholesale and SME
business. He became the MD of ICICI Prudential Life Insurance on August 1, 2010.
New CEO has a lower baggage to carry and to start focusing on improving return ratios
Similar to the appointment of a new CEO at Axis Bank, we believe that Mr Bakhshi has a relatively
lower headwind to start off. Any residual risk is likely to be negligible and mostly within the
watch-list that the bank has shared in the past. The bank would look to improve its coverage
ratio on bad loans at the earliest to put this episode of corporate cycle behind and focus on
getting the organization back on track.
Unlike Axis Bank, the new CEO is within the group and it is quite likely that the exits, if any,
at the senior leadership level are likely to be far fewer. The approach taken by the CEO is more
driven by identifying a framework to operate the business with the belief that it would take the
firm on the path to better long-term value creation. Rather than taking a very disruptive
approach towards changes, the CEO has taken a softer approach of backing a majority of his
existing team and showing his confidence to achieve the desired outcomes.
Maintain BUY with unchanged TP
We have long argued that the asset quality concerns are getting addressed and the Street has
underestimated the strength of the liability franchise. The steps taken by the firm seem to be
commonsensical at this point. We maintain our BUY rating on the bank (TP unchanged at
`400)—our top pick in the sector.
ICICI Bank (ICICIBC) Banks
Another chapter comes to a close. The ICICI Bank board of directors (BoD) has
approved Chanda Kochhar’s request for an early retirement. The ongoing inquiry to
examine a complaint by a whistleblower will maintain progress and certain benefits will
be subject to the outcome of the inquiry. Sandeep Bakhshi has been elevated as the
MD and CEO for a period of five years until October 3, 2023, subject to regulatory and
other approvals. Directionally positive and we maintain BUY rating. TP unchanged.
BUY
OCTOBER 05, 2018
UPDATE
Coverage view: Attractive
Price (`): 317
Target price (`): 400
BSE-30: 35,169
M B Mahesh CFA
Nischint Chawathe
Dipanjan Ghosh
Shrey Singh
ICICI Bank
Stock data Forecasts/Valuations 2019E 2020E 2021E
52-week range (Rs) (high,low) EPS (Rs) 7.9 25.8 30.7
Other loans under RBI schemes not included above NA 22 19
Non-fund o/s to borrowers where S4A has been implemented NA 15 15
Security receipts 34 34 34
Total 284 168 159
(% of loans) 5.6 3.3 3.1
ICICI Bank Banks
KOTAK INSTITUTIONAL EQUITIES RESEARCH 9
Exhibit 3: Contribution from retail loans has increased over the past few years Composition of loans, March fiscal year-ends, 2010-1QFY19 (%)
Source: Company, Kotak Institutional Equities
Exhibit 4: Share of A- and above rated loans in the overall portfolio has increased Rating-wise total loan portfolio, March fiscal year-ends, 2016-1QFY19 (%)
Source: Company, Kotak Institutional Equities
Exhibit 5: Retail loan growth to remain ahead of overall loan growth in the medium term Retail and overall loan growth, March fiscal year-ends, 1QFY14-1QFY19 (%)
Total shareholders' equity 897,356 999,511 1,051,589 1,090,502 1,217,736 1,368,694
For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF THIS MATERIAL.
Intervention in fuel prices through cut in excise duty, marketing margins and a few states’ VAT
The government announced a reduction in retail prices of diesel and gasoline by (1) undertaking
a cut in excise duty by `1.5/liter, (2) asking OMCs to absorb `1/liter implying a reduction in their
marketing margins and (3) urging states to cut VAT by a similar amount of ~`2.5/liter, to which
states that are being ruled by the same government as the center, have obliged. The reduction
in excise duty will reduce the government receipts by ~`105 bn and curtailment of marketing
margins will impact OMCs’ profits by ~`50 bn, for the remainder of FY2019.
Expect further interventions with OMCs requiring a hike of ~`3-4/liter at MTM crude and Rupee
Our calculations suggest that OMCs are already required to increase the price of auto fuels by
~`3-4/liter, post this cut, in order to earn even the curtailed marketing margins at current levels
of Dated Brent crude price at ~US$85/bbl and exchange rate at `73.6/US$. It remains
uncertain, if the OMCs will be able to undertake price hikes to that extent in the coming
fortnight post the current reduction. Even if the OMCs manage to realign prices gradually, (1)
expected crude spike in the short run amid a tightening global oil market due to the impact of
US sanctions on Iran’s crude exports and/or (2) persisting weakening of Rupee, will increase the
ask-rate and may compel the government to intervene yet again.
Earnings uncertainty for oil PSUs, as the government prioritizes fuel prices and fiscal receipts
We see negative implications for the earnings of oil PSUs and more important, uncertainty
around that in the near term, as the government attempts to prioritize between (1) lower fuel
prices for end-consumers before state/central elections, (2) management of fiscal receipts amid
continuing shortfall in GST collections and (3) profitability of oil PSUs. The government’s ad-hoc
interventions in fuel prices and subsidy sharing historically suppressed earnings and return ratios
for these companies, while limiting visibility on profits until the end of every year during that
time.
9-15% cut in estimates for now; cut TPs to `275 for BPCL, `185 for HPCL and `120 for IOCL
We cut our FY2019-20 EPS estimates for OMCs by 9-15% for now, factoring in (1) lower
marketing margins on auto fuels for FY2019, (2) our assumptions of higher crude prices and a
weaker Rupee, (3) lower underlying refining margins and (4) other minor changes. In our view,
the earnings estimates for OMCs lose significance now given the material sensitivity to modest
changes in marketing margins, which becomes tough to predict in the current environment.
A further `0.5/liter reduction in marketing margins on auto fuels, will impact FY2019-20 EPS of
BPCL by 18%, HPCL by 24-25% and IOCL by 14%. We cut our TPs to `275 for BPCL, `185 for
HPCL and `120 for IOCL from `375, `285 and `150 respectively valuing the stocks at 5X
EV/EBITDA multiples instead of 5.5X earlier. Our fair valuation corresponds to 0.9-1.3X forward
book value for these companies, which is perhaps more reliable than earnings estimates.
A sharp moderation in crude price can ease out concerns for OMCs and is a key risk to our
negative stance, but it seems unlikely in the near term.
Energy India
This time, it’s no different! The government’s decision to curtail marketing margins
on auto fuels by `1/liter brings to fore the earnings uncertainty for oil PSUs, associated
with an environment of higher crude prices amid the government’s socio-economic
compulsions. We reiterate our negative stance on OMCs, while seeing a possibility of
further curtailment of profitability given the rising ask-rate of fuel prices hikes amid
higher crude and a weaker Rupee. We also see negative implications for upstream
PSUs, but retain ADD on ONGC with the stock discounting lowest crude price realized
over the past decade. A sharp crude moderation may help, but seems unlikely in the
Exhibit 1: OMCs need to raise auto fuel prices by ~5% to earn curtailed margins at spot crude price
and exchange rate Calculation of marketing margins on auto fuels (Rs/liter)
Source: Kotak Institutional Equities estimates
Exhibit 2: We cut our FY2019-20 EPS estimates for OMCs by 9-15% and TPs by 20-35% Standalone EPS estimates and target price for OMCs, March fiscal year-ends, 2019-20E (Rs)
Source: Kotak Institutional Equities estimates
Exhibit 3: Earnings of OMCs have high sensitivity to changes in refining and marketing margins Change in earnings estimates (standalone), March fiscal year-end, 2019-20E (Rs)
Source: Kotak Institutional Equities estimates
Diesel Petrol
Based on fortnightly average prices
Dated Brent crude price - fortnightly average (US$/bbl) 80.4 80.4
C&F price - fortnightly average (US$/bbl) 95.7 89.9
Exchange rate - fortnightly average (Rs/US$) 72.4 72.4
Refinery transfer price of BS-IV equivalent 44.2 41.4
Specific excise duty 13.8 18.0
Dealer commission 2.5 3.6
VAT/cess in Delhi 10.7 17.3
Retail selling price in Delhi 73.0 81.6
Price charged to dealer (excluding duties) 45.9 42.6
Gross marketing margins 1.7 1.3
Based on current global prices
Dated Brent crude price - current (US$/bbl) 85.0 85.0
C&F price - current (US$/bbl) 100.3 94.6
Exchange rate - current (Rs/US$) 73.6 73.6
Refinery transfer price of BS-IV equivalent 47.1 44.2
Price charged to dealer (excluding duties) 45.9 42.6
#1 Fiscal impact: Central excise revenue to be lower by `105 bn in FY2019
The central government expects revenue loss on account of the announcement at `105 bn
(0.06% of GDP), which translates into a GFD/GDP slippage of around 3.7 bps only. We note
that the states will have an equivalent impact. We continue to believe that the GST run-rate
poses far more significant challenges to the fiscal math, as of now. The government is looking
to bridge the shortfall through higher-than-budgeted (1) direct taxes (possible), and
(2) divestments (difficult). We believe that without expenditure cuts, it will be difficult to stick to
the budgeted target. We maintain our GFD/GDP estimate at 3.5% factoring in reduction in
capital expenditure and some increase in revenue expenditure to factor for higher food and fuel
subsidy (see Exhibit 1).
#2 Inflation impact: Direct impact of around 14 bps
Petrol (2.19%) and diesel (0.15%) together have 2.34% weightage in the CPI basket. If we
assume around `5/liter reduction (center+states), the direct impact is around 14 bps.
Accounting for indirect impact, which will be lagged and staggered, the total impact of price
reduction by center and states would be around 20 bps. We maintain our March 2019 CPI
inflation estimate at 4.9% and core inflation at 5.7% (see Exhibit 2). We maintain our call of
25 bps hike in the October RBI MPC policy.
Economy Public Finance
Fuel excise duty cut: Marginal impact on fiscal and inflation. The government has
reduced excise duty by `2.5/liter each for petrol and diesel with `1.5/liter through the
budget and `1/liter through the OMCs. Further, the central government would be
requesting the state government to pass on similar benefit to consumers. We estimate
that this move will reduce excise duty revenues by `105 bn (0.06% of GDP) in FY2019
and reduce inflation by around 14 bps point through direct impact. States will see an
equivalent fiscal impact assuming all states reduce VAT rates to the tune of `2.5/liter.
INDIA
OCTOBER 05, 2018
UPDATE
BSE-30: 35,169
QUICK NUMBERS
Center and states
both likely to lose
`105 bn of revenues
for the rest of
FY2019
Overall reduction in
Inflation could be
around 20 bps
including direct
impact of 14 bps
Suvodeep Rakshit
Upasna Bhardwaj
Economy India
KOTAK ECONOMIC RESEARCH 23
Exhibit 1: Expenditure cuts are likely in order to maintain GFD/GDP at 3.3% Major central government budgetary items, March fiscal year-ends, 2016-19E (Rs bn)
Source: Union Budget, Kotak Economics Research estimates
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our target prices are also on a 12-month horizon basis.
Other definitions
Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following
designations: Attractive, Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and target price, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s)
and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction
involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient
fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock
and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
Kotak Institutional Equities Research coverage universe
Distribution of ratings/investment banking relationships
Source: Kotak Institutional Equities As of June 30, 2018
Percentage of companies covered by Kotak Institutional
Equities, within the specified category.
* The above categories are defined as follows: Buy = We
expect this stock to deliver more than 15% returns over
the next 12 months; Add = We expect this stock to
deliver 5-15% returns over the next 12 months; Reduce
= We expect this stock to deliver -5-+5% returns over
the next 12 months; Sell = We expect this stock to deliver
less than -5% returns over the next 12 months. Our
target prices are also on a 12-month horizon basis.
These ratings are used illustratively to comply with
applicable regulations. As of 31/03/2018 Kotak
Institutional Equities Investment Research had
investment ratings on 207 equity securities.
Percentage of companies within each category for
which Kotak Institutional Equities and or its affiliates has
provided investment banking services within the
previous 12 months.
21.4%
31.3%
25.4%21.9%
2.0%5.0% 4.5%
0.5%
0%
10%
20%
30%
40%
50%
60%
70%
BUY ADD REDUCE SELL
Corporate Office Overseas Affiliates
Kotak Securities Ltd.
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Bandra Kurla Complex, Bandra (E)
Mumbai 400 051, India
Tel: +91-22-43360000
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London EC3N 1LS
Tel: +44-20-7977-6900
Kotak Mahindra Inc
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28th Floor, New York
NY 10017, USA
Tel:+1 212 600 8856 Copyright 2018 Kotak Institutional Equities (Kotak Securities Limited). All rights reserved.
1. Note that the research analysts contributing to this report may not be registered/qualified as research analysts with FINRA; and
2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
3. Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak Mahindra Inc and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak Mahindra Inc at [email protected].
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