EARNINGS PREVIEW Q2- NO CHANGE IN THE NARRATIVE · EARNINGS PREVIEW Q2- NO CHANGE IN THE NARRATIVE ... Companies Weight in Nifty Y-o-Y ... City Union Bank GIC Housing Birla Corp JMC

EARNINGS PREVIEW Q2- NO CHANGE IN THE NARRATIVE

Edelweiss Investment ResearchInsightful. Independent. Decisive.

Shobana Krishnan

Economist

[email protected]

Sahil Kapoor

Chief Market Strategist

[email protected]

October 2017

2

Key Highlights

• The narrative continues to remain the same. GST led de-stocking has impacted month of July for most of

the sectors. Nifty could see an earnings growth of 13% in Q2 FY18.

• Recovery to still be narrow. Metals, Oil & Gas to continue to drive Nifty earnings.

• Consumer Discretionary to see some kind of revival in earnings. Pent up demand and disbursement of

HRA allowance to aid the revival in the sector.

• Telecom, Pharma and IT continue to remain a drag in Nifty earnings.

• EPS downgrades dominate Upgrades, though Buy Recommendations continue to soar.

• Cement to also witness a muted quarter on account of monsoon.

• Edelweiss Investment Research Coverage Universe earnings growth is expected to be 20%, thereby

outperforming Nifty (13%) and NSE-100 (10%) in earnings growth.

• Top Performers among our Coverage- Dilip Buildcon, Sanghi Industries and Dalmia Bharat

• Top Underperformers among our Coverage- Heritage Foods, Precision Camshafts, PNC Infra

Revenues PAT EBIDTA Margin

No of

Companies

Weight in

NiftyY-o-Y Q-o-Q Y-o-Y Q-o-Q Y-o-Y Q-o-Q Remarks

Auto 6 11% 11% 18% -2% -15% 0.3% 1.8%

Sales have witnessed an uptick in July and August.

Expect the same to reflect in topline. Bottom line still

suffering

Auto Anc 1 1% 26% 37% -35% 60% 0.8% -0.7%

Capital Goods 1 3% 11% 16% -12% 41% 0.4% 1.0% Government Push reflected in top line.

Cement 2 2% -27% -34% -44% -55% -3.8% -4.8% Monsoon to play a spoilsport

Chemicals 1 1% 17% 10% 188% 1% 0.3% -1.9%Base effect and Global tailwinds supportive of the

sector

Consumer Discretionary 1 1% 17% 14% 8% 20% -0.9% 0.8% Pent up demand and HRA allowances

Consumer Staples 2 7% 8% 1% 3% -3% -0.2% -1.6%Volume Growth to pick up in the upcoming quarter

as effect of demon fades away

Infrastructure Developers &

Operators1 2% 34% 6% 9% 69% N/A N/A Higher order book and infra push by govt.

IT 5 10% 4% 3% -1% 2% -1.0% 0.3% Strong Rupee and structural slowdown

Media 1 1% -3% 7% 42% 34% 1.8% 2.7%

Metals 4 5% 21% 7% 185% 25% 4.7% -0.3% Global Tailwinds and Base effect coming to play

NBFC 3 10% 8% 2% 16% 0% N/A N/A

O&G 6 16% 27% 21% 27% 39% 11.6% 12.2%

OMC’ to witness a stellar quarter due to inventory

gains. For the first time in history, all three OMCs are

now part of Nifty.

Pharma 5 4% 0% 13% -34% 200% -7.2% 2.8% Regulatory challenges continue to dominate

Power Distribution 3 2% 10% 5% 9% 6% 1.2% 0.8%Demand of higher thermal power to benefit some

players.

Pub. Banks 1 2% 3% 1% 50% -11% N/A N/AHigh Provisioning in Q2 FY17 to aid y-o-y growth in

PSU Bank.

Pvt. Bank 6 22% 6% 4% 21% 10% N/A N/A Lower credit offtake to effect banking sector

Telecom 1 1% -11% -1% -80% -22% -3.3% -0.3% Price War to continue to linger on numbers

Nifty 50 100% 13% 15%

ex Financials 40 67% 8.4% 13%

ex Financials and Metals 36 62% 5% 12%

ex Financials , Metals and O&G 30 46% 2% 8%

Nifty- An Overview

4

EPS Upgrades Versus Downgrades

EPS Downgrades once again supersede Upgrades for NSE 100

0 1 2 3 4 5 6 7 8 9 10

Auto

Auto Anc

Capital Goods

Cement

Chemicals

Consumer Discretionary

Consumer Staples

Diversified

IT

Metals

NBFC

O&G

Pharma

Pub. Banks

Pvt. Banks

Power Distribution

Real Estate

Telecom

Tyres

Health Care

Infrastructure

49 Downgrades versus 41 Upgrades for NSE 100 Universe

Upgrades Downgrades Neutral

… However Buy Recommendations are more in number for the same universe

0 2 4 6 8 10

Auto

Auto Anc

Capital Goods

Cement

Chemicals

Consumer Discretionary

Consumer Staples

Diversified

Heathcare

Infrastructure Developers & Operators

IT

Media

Metals

NBFC

O&G

Pharma

Power Distribution

Pub. Banks

Pvt. Bank

Telecom

Telecom Infra

Tyres

Real Estate

78 Buy Recommendations versus 9 Sell and 12 Hold for NSE

100

Buy Sell Hold

Markets have acknowledged short term pain in their earnings expectations, however remain bullish over longer term horizon.Source: Edelweiss Investment Research, Bloomberg

5

Lower Credit Disbursements To Continue To Effect The Profitability of Banking Sector

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Au

g-1

6

Se

p-1

6

Oc

t-1

6

No

v-1

6

De

c-1

6

Ja

n-1

7

Fe

b-1

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Ma

r-17

Ap

r-1

7

Ma

y-1

7

Ju

n-1

7

Ju

l-17

Au

g-1

7

%,

y-o

-y

Broad Based Slowdown in Credit Disbursement

Agriculture and allied activities Industry

Services Personal loans

Total Credit

-13%

-2.20%

0%

-17%

0.50%

-0.30%

SBI KOTAK

MAHINDRA

ICICI AXIS HDFC Bank IDFC

Change in EPS Estimates over last quarter

Credit to Industry accounts for about 50% of the total credit. Industry credit has been suffering for almost a year

now.

Additionally, Services loans and agricultural loan have also witnessed slower growth. Farm loan waiver and

slowdown in MSME have effected these sectors too.

We expect a rather muted quarter for Financials. However, favorable base effects on account of higher NPA recognition in Q2 FY17, could

play a significant role in driving growth.

Source: Edelweiss Investment Research, BloombergSource: Edelweiss Investment Research, RBI

6

-5

0

5

10

15

20

Ma

y-1

6

Ju

n-1

6

Ju

l-16

Au

g-1

6

Se

p-1

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Oc

t-1

6

No

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6

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c-1

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Ja

n-1

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Ap

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Ma

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g-1

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%,

y-o

-y

Growth in Consumption of Finished Steel outpaced

Production in August

Production Consumption

-5%

0%

5%

10%

15%

20%

25%

30%

Tata Steel JSW SAIL

EBIDTA Margins of Some of the Steel Companies

201606 201703 201706

India is the fourth third producer of steel in the world after China and US.

China contributed about 52% to the total world steel production. With imposition of anti-dumping duties on

Chinese Steel, Indian companies have benefitted.

Also, domestic consumption has been witnessing growth on account of infra push by government.

We expect Steel sector to sustain the momentum. Lower capacity utilization than 2008 levels continues to be deterrents for bottom line

expansion . We expect margins to improve in Q2 FY18 results.

Steel Companies Likely To Continue To See Improvements In EBIDTA Margins

Source: Edelweiss Investment Research, CMIE Source: Edelweiss Investment Research, Bloomberg

7

Auto Sector To Add Top Line Growth

Class 8 Trucks new orders in USA also seeing growth Synchronous Growth in Domestic Auto Sales

-20%

0%

20%

40%

60%

80%

-12%

-6%

0%

6%

12%

18%

24%

Au

g-1

6

Se

p-1

6

Oc

t-1

6

No

v-1

6

De

c-1

6

Ja

n-1

7

Fe

b-1

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Ma

r-17

Ap

r-1

7

Ma

y-1

7

Ju

n-1

7

Ju

l-17

Au

g-1

7

% , 3

MM

A,

y-o

-y

%,

3M

MA

y-o

-y

Domestic Auto Sales

Domestic Two wheelers Passengar Vehicle Sales

Commercial Vehicles Three Wheelers -RHS

-60%

-40%

-20%

0%

20%

40%

60%

80%

Au

g-1

6

Se

p-1

6

Oc

t-1

6

No

v-1

6

No

v-1

6

De

c-1

6

Ja

n-1

7

Ja

n-1

7

Fe

b-1

7

Ma

r-17

Ma

r-17

Ap

r-1

7

Ma

y-1

7

Ma

y-1

7

Ju

n-1

7

Ju

l-17

Au

g-1

7

Au

g-1

7

%,

y-o

-y

Class 8 Truck New Orders

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

BAJAJ

AUTO

EICHER

MOTORS

HERO

MOTO

M & M MARUTI TATA

MOTORS

Bharat

Forge

Sales Growth Expectations in Q2 FY18

Y-o-Y Q-o-Q

Expect Strong Domestic Sales and Growth in US and EU to help Top line Growth in Auto Sales.

Source: Edelweiss Investment Research, CMIE Source: FTR, Edelweiss Investment Research

Source: Edelweiss Investment Research, Bloomberg

8

Road Sector On A Recovery Mode

Industry order-book grew at a significant pace over FY16-17

Players like Dilip Buildcon and PNC reported more than

100% growth in order-book

Q1FY17 Revenue growth-

Dilip Buildcon- 65%

Ashoka Buildcon- 54%

KNR Construction- 36%

Sadbhav- 22%

Revenue also started showing momentum

0%

5%

10%

15%

20%

25%

30%

35%

0

10000

20000

30000

40000

50000

60000

70000

FY11 FY12 FY13 FY14 FY15 FY16 FY17

(IN

R c

r)

Industry Order-book Orderbook growth

0%

5%

10%

15%

20%

25%

30%

Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17

Source: Edelweiss Investment Research, Company Reports

Source: Edelweiss Investment Research, Company Reports

9

Our Coverage Universe

-20%

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40%

60%A

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. U

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Y-o

-Y

Coverage Universe- PAT and Revenue Growth

Revenue Growth (Y-o-Y) PAT Growth (Y-o-Y)

0%

5%

10%

15%

20%

25%

Revenue Growth PAT Growth

Y-o

-Y

Our Coverage Universe to have better bottom line growth

NIfty and Broader Markets

Our Coverage Stock Nifty NSE-100

For our coverage universe, revenue growth is lower than Nifty and Broader Markets, however profit growth to

better than others.

Cement to drive growth for our Coverage Universe. GST re-stocking and Higher volume growth in east to act as a

growth driver.

Auto, IT to drag growth. Auto sector largely skewed due to poor performance of Precision Camshafts.

We expect Q2 for our coverage universe to be reasonably good and outperform the markets across most of the sectors.


166%


Revenue, Profit GrowthRevenue Growth, Profit De-growth

Manappuram

City Union Bank

GIC Housing

Birla Corp

JMC

PNC

KNR Construction

Voltamp

Finolex

Indian Terrain

ABFRL

Shankara

Heritage Food

ParagKwality

Borosil

Asian Granito

Sudarshan

Vinati Organics

SRF

SH KelkarSPAL Trident

Tata Com

Zee learn

Bharat Forge

Motherson

Jamna

Precision camshaft

Kirloskar

Ratnamani

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

-50% -30% -10% 10% 30% 50% 70% 90% 110%

Re

ve

nu

e G

row

th

PAT Growth

10

Earnings Expected To Remain Healthy Across Sectors Among Coverage Stocks

Most of the stocks under coverage are expected to have a robust earnings growth. With few exceptions like

Heritage Foods

Among the outperformers are Dilip Buildcon, Dalmia Bharat and Sanghi Industries

Revenue, Profit De-Growth

Revenue De-Growth, Profit Growth

Source: Edelweiss Investment Research

Sanghi Ind

DalmiaBharat

DilipBuildcon

CromptonSanghi Ind

5

8

11

14

17

20

23

26

Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

Nifty Forward P/E Highest P/E Lowest P/E

11

Nifty Valuation Still Comfortable Despite The Recent Run

In spite of the recent run up in Nifty, the valuations are still at a comfortable level, primarily as the earnings

outlook has also improved and as we shift to FY19 estimates for the forward year.

We expect Nifty to continue the run up as the valuations are at a comforting level

Source: Bloomberg, Edelweiss Investment Research

0%

10%

20%

30%

40%

50%

60%

70%

Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

Nifty 1yr fwd P/E Premium over MSCI Index 4 year moving average

+1 SD -1 SD

20%

40%

60%

80%

100%

120%


Nifty 1yr fwd P/B Premium over MSCI Index 4 year moving average

+1 SD -1 SD

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0


Nifty 1 year fwd P/B 4 Yr moving average +1 SD -1 SD

12

Earning Estimates

BFSI

Manappuram

(INR cr) Q2 FY18 Q2 FY17 Y-o-Y Q1 FY18 Q-o-Q Notes

NII + OI 676 553 22% 598 13%

NII growth yoy will be driven by fall in CoF. Gold disbursal volume

will improve qoq but value of disbursal will be held back

somewhat by tepid gold prices yoy. Non Gold AUM growth will be

strong.

Pre Provisioning Operating Profit 364 313 16% 315 16%Higher security costs, among other reasons, will leading to

relatively high opex growth.

PAT 211 192 10% 155 36% Residual provisions on MFI book will hold back PAT growth.

City Union Bank


NII + OI 493 405 21% 478 3%

GST to have both positive and negative impact due to

formalisation and compliance issues, respectively with overall

impact being neutral. GST long-term positive.

Pre Provisioning Operating Profit 294 237 24% 297 -1%Operating costs to grow slower than Total Income due to best-in-

class opex management.

PAT 141 124 14% 140 0%NPA provisions to be on the higher side as limited stressed pipeline

to give rise to recognition.

GIC Housing Finance


Net Revenue 107 79 35% 107 1% We expect loan growth of 18% and margin is 4.2%. Loan growth is likely to

remain below expectation because lower clarity on RERA in West which

contribute 50% of GIC’s loan book and Maharashtra alone contribute 25% of

entire sector disbursement. Consequently lower clarity is expected to dent

the growth in Q2FY18 for entire sector.Operating Profit 89 59 49% 87 1%

PAT 47 34 36% 40 16%

13

Earning Estimates

Infra

Dilip Buildcon

(INR cr) Q2 FY18 Q2 FY17 Y-o-Y Q1 FY18 Q-o-Q

Net Revenue 1,145 916 25% 1,664 -31%

EBITDA 206 155 33% 300 -31%

PAT 32 7 385% 123 -74%

JMC Projects


Revenue 611 531.1 15% 667 -8%

EBITDA 58 52 12% 65 -11%

PAT 17 12 36% 21 -22%

PNC Infra


Revenue 357 360 -1% 357 0%

EBITDA 48 46 4% 52 -7%

PAT 27 35 -24% 30 -10%

KNR Construction


Revenue 449 374 20% 481 -7%

EBITDA 72 56 28% 85 -15%

PAT 68 44 54% 68 0%

14

Earning Estimates

Power T&D

Voltamp


Net Revenue 169 161 5% 130 30%

EBITDA 14 12 15% 10 40%

PAT 18 14 29% 14 25%

Quick Heal


Revenue 105 107 -2% 30 246%

EBITDA 52 54 NA -16 NA

PAT 35 35 NA -11 NA

IT

Finolex Industries


Revenue 580 523 11% 824 -30%

Post GST expected to pickup in volume in pipe segment,

assume 15% YoY growth in pipe volume and PVC resin by

10% volume growth.

EBITDA 88 87 1% 131 -32%With the increase in PVC resin prices, expected to impact

EBITDA margin, prices pass-on with lag

PAT 51 51 0% 80 -35%

Consumer Durable

15

Earning Estimates

Consumption

Indian Terrain


Net Revenue 143 124 15% 85 68%

EBITDA 17 15 13% 8 113%

PAT 10 8 17% 4 145%

ABFRL


Revenue 2150 1887 14% 1769 22%

EBITDA 174 172 1% 74 135%

PAT 60 65 -8% -20 NA

Shankara


Revenue 654 602 9% 592 10% Store addition has been robust in Q2 as already 65% of the

planned stores in FY18 have been opened. However these will

not significantly flow through into numbers and therefore we

expect the previous trend of revenue growth and margins to

continue. Margins will improve y-o-y due to higher share of

retail revenues.

EBITDA 47 39 21% 39 21%

PAT 20 14 43% 17 18%

Heritage Foods


Revenue 571 641 (11%) 617 (7*)Reported nos of last year would include Retail, the dairy

business is expected to grow 20% yoy

EBITDA 23 3 (30*) 27 (14%)Like to Like EBITDA as well as EBITDA of acquired Reliance

business, Behaviour of milk procurement prices

PAT 10 15 (37*) 10 (7%)

For branded apparel and retail players, July sales

were preponed into Q1 due to early EOSS on

account of GST and hence we expect revenue

growth of Indian Terrain and ABFRL to be subdued.

As these businesses have high operating leverage,

we will not witness any margin improvement.

ABFRL’s margins in particular will be impacted by

losses in fast fashion and innerwear which will

reverse soon

16

Earning Estimates

Parag Foods


Revenue 511 473 8% 413 24% Topline growth impact on account of demonetization

EBITDA 43 38 15% 31 40% Procurement price trend along with impact of the product

mix on EBITDA

PAT 18 14 28% 11 73%

Kwality Ltd


Revenue 1,663 1,540 8% 1,572 6% Growth in the B2C category; Revenue coming from the

Kwality brand

EBITDA 132 105 25% 110 20% Improvement in the Product mix, eye on overhead

expenses

PAT 47 42 11% 28 68%

Crompton


Revenue 993 890 12% 1,055 -6%With the shift of festival in Q2FY18 and sales improvement

post GST - expected healthy sales growth

EBITDA 130 97 33% 129 0.1% Expecting EBITDA margin to improve with pick in sales

PAT 77 55 41% 80 -4%

17

Earning Estimates

Borosil Glass Works Ltd.


Revenue 79 67 17% 50 57%

With the shift of festival in Q2FY18 and sales improvement

post GST, Borosil has seen pickup in sales - mainly in its CPD

segment.

EBITDA 10 7 35% 3Expecting 160bps YoY improvement in margin, with the

improvement in consumer segment business.

PAT 11 11 -2% 5 101%

Asian Granito India Ltd


Revenue 259 264 -2% 225 15%

AGL has seen pickup in sales volume post GST in July &

August, however with account change YoY number

showing de-growth.

EBITDA 36 31 16% 29 24%Expecting 130bps YoY improvement in margin, with the

improvement in value added products & B2C sales

PAT 13 10 34% 10 27%

18

Earning Estimates

Sudarshan Chemical


Revenue 380 339 12% 335 13%Lost JNPT ransomware sttack sales to come in Q2 while

some of the lost GST sales are also expected to be back

EBITDA 58 49 19% 46 26% Slight gross margin expansion on mix change

PAT 31 27 18% 23 34%

Vinati Organics Ltd.


Revenue 184 140 32% 184 0%Expect sales to be significantly higher yoy due to low base

effect, higher end product prices and better volumes

EBITDA 50 46 8% 50 -1%Higher raw material prices leading to squeezed gross

margins

PAT 31 30 3% 31 0%Higher depreciation costs yoy

Chemicals

19

Earning Estimates

SRF Ltd.


Revenue 1335 1144 17% 1293 3%Slight rebound in the specialty agrochemical space

expected

EBITDA 248 240 4% 209 19% Higher raw material prices reflecting in lower gross margins

PAT 128 119 7% 104 23%

S H Kelkar


Revenue 260 245 6% 235 11%

EBITDA 44 42 6% 43 4%

PAT 29 25 18% 27 6%

20

Earning Estimates

Textile

S P Apparel


Net Revenue 174 167 4% 151 15%

EBITDA 30 29 3% 28 7%

PAT 14 15 -7% 11 27%

Trident


Net Revenue 1250 1170 7% 1168 7%

EBITDA 240 235 2% 230 4%

PAT 90 80 13% 89 1%

We are expecting a subdued quarter. Demand from end clients has been subdued. Also cotton sourced for Q2 sales was at a high price and INRalso appreciated in this quarter. This is likely to not result in any major margin expansion for SP Apparels and Trident. However H2FY18 will be strong,especially for SP Apparels.

21

Earning Estimates

Cement

Dalmia Bharat


Net Revenue 2007 1683 19% 2059 -3% We expect loan growth of 18% and margin is 4.2%. Loan

growth is likely to remain below expectation because lower

clarity on RERA in West which contribute 50% of GIC’s loan

book and Maharashtra alone contribute 25% of entire sector

disbursement. Consequently lower clarity is expected to dent

the growth in Q2FY18 for entire sector.

EBITDA 513 421 22% 557 -8%

PAT 185 46 299% 200 -8%

Sanghi Industries Limited


Net Revenue 243 207 17% 288 -16% Sanghi industries Limited is likely to report subdued cement

sales volume due to flooding but restocking protected

marginally, hence we expect 5% y-o-y decline in price but

price per bag remained firm. Consequently, Revenue is likely

to grow 17% y-o-y to INR 243crs. We expect EBITDA per to

report INR 1,058 on account of cost control.

EBITDA 58 47 23% 66 -12%

PAT 18 9 116% 32 -42%

Birla Corp


Revenue 1207 769 57% 1459 -17%

EBITDA 219 77 186% 240 -9%

PAT 56 58 -5% 43 29%

22

Earning Estimates

Tata Communication


Revenue 4428 4509 -2% 4310 3%

EBITDA 576 662 -13% 559 3%

PAT 49 40 21% 36 34%

Telecom

Education

Zee Learn

(INR cr) Q2 FY18 Q2 FY17 Y-o-Y Q1 FY18 Q-o-Q Note

Revenue 40 34 19% 52 -23%

With the shift of festival in Q2FY18 and sales

improvement post GST, Borosil has seen

pickup in sales - mainly in its CPD segment.

EBITDA 14 12 19% 19 -26%

Expecting 160bps YoY improvement in margin,

with the improvement in consumer segment

business.

PAT 8 8 10% 12 -28%

23

Earning Estimates

Bharat Forge


Revenue 891 1,201 30% 1,158 -4%

EBITDA 248 333 31% 324 -3%

PAT 127 175 37% 174 -1%

Auto

Motherson Sumi


Revenue 10,137 13,129 25% 12,671 -3%

EBITDA 1,007 1186 26% 1273 7%

PAT 426 560 28% 545 -3%

Jamna Auto


Revenue 275 271 18% 325 20%

EBITDA 35 31 26% 44 44%

PAT 21 17 18% 25 43%

Precision Camshaft


Revenue 107 102 2% 109 7%

EBITDA 26 20 -20% 20 5%

PAT 13 9 -22% 10 14%

24

Earning Estimates

Kirloskar Brothers


Revenue 454 371 22% 444 2%Growth in projects business should be watched as

execution progresses in projects in Africa

EBITDA 41 33.1 23% 18 131% Slight gross margin expansion on mix change

PAT 21 16.7 26% 5 284%

Ratnamani Metals


Revenue 386 322 20% 295 31%Execution is key as the order booking has been strong in

the last 6--9 months

EBITDA 71 52 38% 47 52% Growth should be followed with improvement in margins

PAT 41 29 44% 22.8 81%

Engineering

Metals

25

Disclaimer

Edelweiss Broking Limited (“EBL” or “Research Entity”) is regulated by the Securities and Exchange Board of India (“SEBI”) and is licensed to carry on the business of broking, depository services and related activities. The business of EBL and its Associates (list available on www.edelweissfin.com) are organized around five broad business groups – Creditincluding Housing and SME Finance, Commodities, Financial Markets, Asset Management and Life Insurance.Broking services offered by Edelweiss Broking Limited under SEBI Registration No.: INZ000005231; Name of the Compliance Officer: Mr. Brijmohan Bohra, Email ID: [email protected] Office: Edelweiss House, Off CST Road, Kalina, Mumbai - 400098; Tel. 18001023335/022-42722200/022-40094279

Disclosures under the provisions of SEBI (Research Analysts) Regulations 2014 (Regulations)Edelweiss Broking Limited ("EBL" or "Research Entity") is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. The business of EBL and its associates are organized around five broad business groups – Credit including Housing and SME Finance,Commodities, Financial Markets, Asset Management and Life Insurance. There were no instances of non-compliance by EBL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years. This research report has been prepared and distributed by Edelweiss Broking Limited ("Edelweiss") in thecapacity of a Research Analyst as per Regulation 22(1) of SEBI (Research Analysts) Regulations 2014 having SEBI Registration No.INH000000172

This Report has been prepared by Edelweiss Broking Limited in the capacity of a Research Analyst having SEBI Registration No.INH000000172 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of anytransaction. The information contained herein is from publicly available data or other sources believed to be reliable. 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 shouldmake such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not besuitable for all investors.

This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any personor entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject EBL and associates / group companies to any registration or licensing requirements within such jurisdiction. The distribution of this report incertain jurisdictions may be restricted by law, and persons in whose possession this report comes, should observe, any such restrictions. 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. This information is subject to change without any priornotice. EBL reserves the right to make modifications and alterations to this statement as may be required from time to time. EBL or any of its associates / 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. EBL is committed toproviding independent and transparent recommendation to its clients. Neither EBL nor any of its associates, 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 theinformation. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Past performance is not necessarily a guide to future performance .The disclosures of interest statements incorporated in this report are provided solely to enhance the transparency and shouldnot be treated as endorsement of the views expressed in the report. The information provided in these reports remains, unless otherwise stated, the copyright of EBL. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of EBL and may not be used in any form or for any purpose whatsoever by anyparty without the express written permission of the copyright holders.

EBL shall not be liable for any delay or any other interruption which may occur in presenting the data due to any reason including network (Internet) reasons or snags in the system, break down of the system or any other equipment, server breakdown, maintenance shutdown, breakdown of communication services or inability of the EBL to present the data. Inno event shall EBL be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with the data presented by the EBL through this report.We offer our research services to clients as well as our prospects. Though this report is disseminated to all the customers simultaneously, not all customers may receive this report at the same time. We will not treat recipients as customers by virtue of their receiving this report.

EBL and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies), mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as amarket maker in the financial instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of publicappearance. EBL may have proprietary long/short position in the above mentioned scrip(s) and therefore should be considered as interested. The views provided herein are general in nature and do not consider risk appetite or investment objective of any particular investor; readers are requested to take independent professional advice before investing. Thisshould not be construed as invitation or solicitation to do business with EBL.EBL or its associates may have received compensation from the subject company in the past 12 months. EBL or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. EBL or its associates may have received compensation for investment banking or merchant banking or brokerage servicesfrom the subject company in the past 12 months. EBL or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EBL or its associates have not received any compensation or other benefits from the Subject Companyor third party in connection with the research report. Research analyst or his/her relative or EBL’s associates may have financial interest in the subject company. EBL, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the timeof publication of research report or at the time of public appearance.Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i) exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by numerous market factors, including world and national economic, political and regulatory events, events in equity and debtmarkets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.

Research analyst has served as an officer, director or employee of subject Company: NoEBL has financial interest in the subject companies: NoEBL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: NoEBL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: NoSubject company may have been client during twelve months preceding the date of distribution of the research report.

There were no instances of non-compliance by EBL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years.A graph of daily closing prices of the securities is also available at www.nseindia.com

Analyst Certification:The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.

Additional Disclaimer for U.S. PersonsEdelweiss is not a registered broker – dealer under the U.S. Securities Exchange Act of 1934, as amended (the“1934 act”) and under applicable state laws in the United States. In addition Edelweiss is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts),and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by Edelweiss, including the products and services described herein are not available to or intended for U.S. persons.This report does not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services and/or shall not be considered as an advertisement tool. "U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of theUnited States. US Citizens living abroadmay also be deemed "US Persons" under certain rules.Transactions in securities discussed in this research report should be effected through Edelweiss Financial Services Inc.

Additional Disclaimer for U.K. PersonsThe contents of this research report have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA").In the United Kingdom, this research report is being distributed only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005 (the “Order”); (b) persons falling within Article 49(2)(a) to (d) of the Order (including high net worth companiesand unincorporated associations); and (c) any other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”).This research report must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this research report relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this research report or any of itscontents. This research report must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person.

Additional Disclaimer for Canadian PersonsEdelweiss is not a registered adviser or dealer under applicable Canadian securities laws nor has it obtained an exemption from the adviser and/or dealer registration requirements under such law. Accordingly, any brokerage and investment services provided by Edelweiss, including the products and services described herein, are not available to or intendedfor Canadian persons.This research report and its respective contents do not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services.

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EARNINGS PREVIEW Q2- NO CHANGE IN THE NARRATIVE · EARNINGS PREVIEW Q2- NO CHANGE IN THE NARRATIVE ... Companies Weight in Nifty Y-o-Y ... City Union Bank GIC Housing Birla Corp JMC