Nifty intra-day movement Banknifty intra-day movementapp.investmentguruindia.com/mobile/researcharticles/2017/September/...Air India ties up with Punjab National Bank, IndusInd Bank

September 28, 2017

IndianMarkets CMP %chg1d %chg3m %chg6m %chgytdNifty 9,736 (1.4) 2.6 7.0 18.9Sensex 31,160 (1.4) 1.1 6.0 17.0BSESmallCap 15,797 (2.1) 4.2 11.6 31.1Midcap 15,192 (2.0) 4.8 9.2 26.3INR/USD 65.71 (0.4) 1.8 1.0 3.4Developed/EmergingmarketsDowJones 22,341 0.3 4.1 7.9 13.0S&P500 2,507 0.4 2.7 6.3 12.0Nasdaq 5,938 1.0 3.2 9.8 22.1Nikkei 20,318 0.3 0.9 5.8 6.3HangSeng 27,510 (0.5) 7.1 13.0 25.0Bovespa 73,797 (0.7) 19.0 14.2 22.5DAX 12,657 0.4 0.1 4.2 10.2FTSE 7,314 0.4 (1.0) (0.4) 2.4SGXNifty 9,730 (0.1) 2.4 6.8 18.9Topgainers Toplosers UnderlyingSecurity CMP %chg Underlyingsecurity CMP %chgShriramTrans. 1,050 4.3 DivisLab 851 (11.4)CentralBk 74 2.3 Siemens 1,219 (7.8)Infratel 383 1.7 Relcapital 585 (5.8)GruhFin. 523 1.5 JSWEnergy 69 (5.7)AlembicPh. 498 1.1 Wockhardt 600 (5.6)

Recenteco.data Actual Cons. Upcomingeco.data Cons. PreviousCanadaWholesaleSales 1.5 (0.7) USPersonalSpending 0.1 0.3 IndiaGDP 5.7 6.5 UKFinalGDP 0.3 0.3 USIndus. Production (0.9) 0.1 USChicagoPMI 58.5 58.9 CanadaRetailSales 0.4 0.2 ChinaMfgPMI 51.8 51.7 CanadaCPI 0.1 0.2 JapanHousingStarts 0.7 (2.3) FIIs&DIIscashactivity(Rscr) Previousday MTD YTDFIIEquity (856) (6,196) 40,648DIIEquity 1,858 11,113 79,281FIIDebt (631) 2,575 130,875DIIDebt 434 33,352 294,659

Turnaround Thursday! Markets may overcome fearThebravemanisnothewhodoesnotfeelafraid,buthewhoconquersthatfear.‐NelsonMandela

Finally,themarketmaybeinamoodtoovercomeitsfears,albeitforabriefwhile.ReportsoftheIndianArmy’sretaliatoryfireoninsurgentsatthe Indo‐Myanmar international border left the domestic marketsspooked inaweekthatwasalreadyconsumedbyvolatilityandsellingpressure. Nifty rollovers into October were lower than the 3‐monthaverage,whilemarketwiderolloverswererelativelyhigherascomparedtotheprevious3months.F&Oexpiry‐relatedvolatilityinthemarketwilladdtoswingstowardstheend.BothAsianandUSmarketswelcomedthenewtaxreformunveiledbytheUS.Thetaxframeworkproposedbringingthe corporate tax rate to 20 pc from 35 pc and reducing the highestindividualincometaxrateto35pcfrom39.6pc.Theoutlookisapositivestart.

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AirIndiatiesupwithPunjabNationalBank,IndusIndBankforRs.3,250crloan

APLApolloTubesenteredintoaJVwithSingapore‐basedOnetoOneHoldingsPTE,formanufacturingofin‐linegalvanizedtubes

LakshmiVilasBankBoardapprovesraisinguptoRs.800crviarightsissue

JainIrrigationsaysMandalaRoseCo‐investmentacquired3.62croreshares(7.26%)inthecompany

IDBIBanksells9percentstakeinSIDBI

GEPowerIndiawonanorderworthRs.328crfromDoosanPowerIndia

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Fuelpricesjump8%sincedailypricerevisionintroducedinmid‐June:ICRA

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GSTmop‐updeclinesby3.6%toRs90,669croreinAugustGovernment constitutes high level forum to roll out 5G in India by2020

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Upcoming Events

Analyst:PrayeshJain

Oil Marketing Companies

Macrorisksabateoptimism

SECTOR RESEARCH September 28, 2017

WehavebeenextremelybullishonOilMarketingCompanies(OMCs)overthe past three years during whichHPCL, BPCL and IOCL deliveredhandsome returns of 307%, 127% and 133% respectively. Keydriversofthisresoundingrallyinclude1)Government’snodtomarket‐basedpricingoffuelsinlinewithglobalpractices,2)softeningcrudeoilprices, 3) steady refiningmargins, 4)more‐than‐doubled return ratios(from 8‐10% to 20%+) and 5) improved balance sheets of the saidplayers. While these factors would continue to boost OMC financials,othermacro factors are posing a palpable threat to the sector.Theseinclude1)imminentupwardbiasincrudeoilpricesinthewakeofstrong demand trend, growing geopolitical strife and reducedsupplyglut;2)mounting competition fromprivateplayers in thedomestic fuel retailing space; and 3) aggressive vehicleelectrificationplans.Crudeoilprices,followingadownwardspiralinthepastcoupleofyears(fallof73%from2014to2016),havefollowedastrongtrendinrecentpast(up20%inoneyear).ThekeydriveristhestrongOPECadherencetoproductioncutsannouncedinNovember2016thatreducedthesupplyglut from the system.Meanwhile, global oil demand has looked up asreflected by the upgrade in IEA estimates. Furthermore, risinggeopolitical tensions in Libya, Iran, Iraq andVenezuela can propel therallyincrudeprices,puttingthepricingfreedomofOMCsatrisk.In domestic fuel retailing market, private players have seen theirmarket share increasing fromnearlynil toabout7% inpast fewyears.With improvingmarketingmargins through daily and dynamicpricing,privateplayersarelikelytoincreaseinvestmentstowidentheirpresence. However, this won’t come easy considering the establishedOMCpresenceatstrategiclocationsandzoominglandpricesinpastfewyears.

Forelectrificationofvehicles,Indiahasfarmoreaggressiveplansvis‐à‐vis thedevelopedworld.Thegovernmenthasseta targetofsellingonly electric cars by 2030.With lithium ion battery prices headingsouthinthepastfewyearsandlikelytoseefurtherdeclinesastechnologyevolves,shareofelectricvehiclesinwouldriserapidly.Consequently,webelieve,demandforpetrolanddieselwouldwitnessconstrictedgrowth.

Private competition will restrict volume growth besides triggering apauseinmarketingmarginssurgeforOMCs.Risingacceptanceofgasand electricity would also hamper volume growth impactingmarketing segment performance of OMCs. Refining segmentperformance,ontheotherhand,wouldseeamarkedimprovementledby1) increasing complexities of refineries, 2) better crude oil sourcingflexibility,3)lowercrudeoilvolatilitythatwouldenticeOMCstoscaleuphedging activities akin to private refiners and 4) higher incrementaldemandvis‐à‐visincrementalrefiningcapacityadditionswouldtranslateintoimprovedGRMsglobally.

Considering the macro risks, large capex plans ahead (causinghigherborrowings)andexpected lowerdividendpayouts,wearedowngradingourviewonOMCsfromOverweighttoNeutral.Wecutour targetpriceson lowered targetmultiple for their standaloneearnings.WedowngradeHPCLfromBUYtoACCUMULATE,andBPCLandIOCLfromtheerstwhileBUYtoREDUCE.

Figure 1: Recommendation summary HPCL IOCL BPCLRating Accumulate Reduce ReduceCMP(Rs) 416 396 466Target(Rs) 470 413 483Upside(%) 13.0 4.3 3.6Source:IIFLResearch


Crude oil prices… upward bias in the offing Crude oil prices fell from a high of US$110/bbl in January 2014 toUS$30/bbl in January2016, and since thenhave rallied to the currentUS$55/bbl.Webelieve, intheneartomediumterm,there’sanupwardbiasforcrudeoilpricesbasedon1)strongdemanduptrend,2)decliningsupplyglutand3)increasinggeopoliticaltensions.Strong demand uptrend: IEA recently upgraded its CY17 crude oildemandestimatesfrom1.4mbpdto1.6mbpdonthebackofastrongerthan expected growth fromOECD nations particularly US, Europe andChina. In fact, inQ2CY17,demandgrowthstoodat2.3mbpd.Over themediumterm,India,ChinaandUSwouldcontinuetodrivedemand.Supply glut decreasing: Ever since OPEC production cuts wereannounced in November 2016, investors have been skeptical aboutadherencebymembercountries.Whilethegrouphasnotcompliedwiththeagreedcutstothetee,theadherenceismuchbettercomparedtothaton prior occasions, as also current street expectations. During thecollapseofcrudeoilprices,largeoilproducingcountrieshadannouncedcapexcuts,theimpactofwhichisnowbeingreflectedintheformoflowerproduction.Conversely,productionfromUSshalecontinuestobestrong.Overall, global oil inventories, while still above 5‐year average, havedroppedfromtheirpeaklevels.Growing geo‐political tensions: Libya, Venezuela, Iraq and Iran aregrappling with geopolitical tensions. While Libya is seeing increasedterrorismactivities,Venezuelaisgoingthroughapoliticalturmoil.Iran’snuclear deal reconsideration byUS could likely cause economic jittersagain.Together,thesecountriesproduce11‐12mbpd(12‐13%ofglobalproduction)butexport7‐8mbpdoftheirproduce(16‐17%ofglobaltradefor crudeoil). Such largequantumof global tradeat risk can trigger aspikeincrudeoilprices.

Figure 2: OECD oil inventories have started declining

Source:Bloomberg,IIFLResearchFigure 3: OPEC has raised its oil demand estimates

Source:OPEC,IIFLResearch

2,640

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mnbarrels

94.4

95.3595.56

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mbpd 2016 2017 2018


Figure 4: Libya, Venezuela and Iran production at risk

Source:Bloomberg,IIFLResearchFigure 5: OPEC production declining

Source:Bloomberg,IIFLResearch

Figure 6: US Oil production stagnating

Source:Bloomberg,IIFLResearchFigure 7: US rig count addition halted


0

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'000bpd

Libya Venezuela Iran

34,140

32,710

25,00026,00027,00028,00029,00030,00031,00032,00033,00034,00035,000

Jan‐11

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5,484

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318

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Nos


Pricing freedom of OMCs at risk Givenexpectedsurgeincrudeoilprices,generalelectionsslated1.5yearsfrom now, inflationary pressures from snowballing petrol and dieselprices and tight fiscal situation, the government may deny OMCs thepricing freedom granted currently. While the oil minister hascategorically committed to zero‐interference in day to day pricing byOMCs, a reconsideration cannot be ruled out if crude oil pricesmovesustainablybeyondUS$60‐65/bbl.Competition to rise at a brisk pace Aspermediareports,thegovernmentiskeenonincreasingprivatesectorparticipationinIndia’sfuelretailingmarket.RelianceIndustries,throughitstieupwithBP,hasevincedsignificantinterestinexpandingitslimitedpresenceinthesector.Rosneft,whichrecentlyacquiredassetsofEssarOil,willhaveaccesstoits3,500retailoutletsmakingitthelargestprivateretailoperator.WeexpectRosneft tosignificantly increasepresence inthissegment.Overthepastcoupleofyears,privateplayershavedoubledtheirmarketshare,ledbyadditionalfuelstationsandhigherdiscounts,overFY17to5.3% (FY16: 3.5%) and 6% in diesel (FY16: 3.1%). While the OMCnetwork,with about 55,000 stations, is still unmatched and cannot bereplicatedovernight,privateplayerswouldgraduallyaddnewstationsandgainmarketshare.BothRelianceIndustriesandEssarOilhavebeensteadilyaddingoutlets.Relianceadded281outletsduringFY17,takingtheoperationaloutletcount(outof1,400inplace)to1,221(asofMarch),whileEssaradded1,400outlets,primarilyinruralareas,toitsexistingbase of 2,100 in FY16. Reliance can expand to 5,000 outlets and BPanother 3,500, leading to a further increase in market share andcompetitionforOMCs.

Figure 8: Trend in retail outlets of OMC

Source:PPAC,Petroleumministry,IIFLResearch Figure 9: Trend in retail outlets of other players

Source:PPAC,Petroleumministry,IIFLResearch

8,251

13,983

8,329

14,413

17,534

26,212

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FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Nos

BPCL HPCL IOC

2,820

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6,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17


Figure 10: Amongst private retailers, Essar dominates in terms of reach but Reliance has a higher market share

Source:PPAC,Petroleumministry,IIFLResearch Figure 11: Private companies have seen improved market share

Source:Mediareports,IIFLResearch

Marketing margins to stay below global benchmarks Accordingtoindustryreports,marketingmarginsinIndiaaremorethan50%lowerthanglobalbenchmarks.Overthepastfewyears,thediscounthas narrowed down albeit only marginally. Earlier, there wereexpectations that daily and dynamic pricing mechanisms would helpnarrowdown this discount considerably.However, a reversal of thesemeasures following the spike in crude oil prices can derail theseexpectations.Incasethesemeasurescontinuetoexist,risingcompetitioncanexertsomepressureonmarketingmargins.Whileonemightconstruethat the current land prices and marketing margins may not beeconomicallyviable,webelieve,privateplayershavedeeppocketsandwouldbebetterplacedtoearnhigherrevenuesandprofitabilityfromthenon‐fuelinitiatives.

RIL,1400

MRPL,4

Essar,3499

Shell,85

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0.5%

7.0%

0.0%

2.0%

4.0%

6.0%

8.0%

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14.0%

2005 2014 2017


Natural Gas – Wider gas availability and underutilization of existing pipelines to drive demand Natural gas is considered a strong competitor to petroleum productsowingto itsenvironment‐friendly(relatively lesspolluting)properties.India is a gas starvednation, reflectedby the fact that unmet demandcontinues to form a large share in the system.Nearly 50%of existingsupplies come from imported gas. In the past, natural gas facedimpediments like1)Decliningdomesticproductionowing toageingoffields,2)India’slimitedLNGimportcapacitiesand3)inadequatepipelineinfrastructure in the country. As per the guidance provided by gasproducers, (ONGC, Oil India and Reliance Industries) domestic gasproduction is set to rise at a brisk pace in the next few years as newconventionalfieldscommenceoperations.HigherproductionfromCBMfieldswouldalsoboostsupplygrowth.IntermsofLNGcapacities,manynewterminalswouldbecomeoperationalinthenextfewyears,bringinginincrementalsuppliesintothecountry.Onpipelineinfrastructure,whileGAILisinvestingtoexpanditscapacities,utilizationofitsexistingassetscontinuestobelow.Newcitygaslicenseshavebeenissuedrecently.Withrisingpetrolanddiesel prices amidst a flattish natural gas price scenario, we expectincremental conversions of private cars from petrol and diesel tocompressed natural gas. Also, government plans to restrict the use ofliquidfuelsinindustrialapplications(banningofpetcokeandfueloil)tocurbairpollution.Thiswouldtranslateintoanincrementaldemandfornaturalgas fromthese industries.These factorscanrestrictpetroleumproductdemandinthecountry.

Figure 12: Domestic natural gas production has been declining

Source:PPAC,IIFLResearch Figure 13: Utilization of gas pipelines still abysmally low owing to lack of last mile connectivity

Source:PPAC,Petroleumministry,IIFLResearch

31.5 30.8

‐20.0%‐15.0%‐10.0%‐5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%

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bcm

Production yoy

40.1% 40.1%40.8%

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34.0%

36.0%

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40.0%

42.0%

FY15 FY16 FY17


Electric vehicles to restrict petroleum product consumption growth in the longer term Off late, there’shavebeen increasing talksof electrificationofvehiclesgloballyincludingIndia.Infact,theIndianRoadTransport&Highwaysministry is targeting that all cars sold in domestic market would beelectriccarsby2030.ThistargetisfarmoreaggressivecomparedwithdevelopedcountriessuchasUK,whichhaveatargettosellonlyelectriccarsfrom2040.Intheshorterterm,theelectriccarscaleuphastolockhornswithseveralheadwinds.However,overthelongerterm,wereckonpetroleumproductconsumptionwillfacesubstantialthreatfromelectricvehicles.Global outlook on electric vehicles According toBritishPetroleum,numberof electric vehicles is likely tosurge from1.2mnin2015toaround100mnby2035.AsperOPEC,by2040,around266mnelectricvehicleswouldplyontheroads.TheseareOPEC’srevisedestimates.(from46mnayearago)Otherentitiesendorsingsimilarexpectations: TheInternational Energy Agencymore than doubled its central

forecastforEVs,raisingits2030EVfleetsizeestimatefromto58mnfrom23mn.

ExxonMobilboostedits2040estimatetoabout100mnfrom65mn.

BPanticipates100mnEVsontheroadby2035,a40%increaseinitsoutlookcomparedwithayearago.

StatoilASA,theNorwegianstateoilcompany,saysEVswillaccountfora30%ofnewsalesby2030

In2015,carsaccountedfor19mbpdoftheliquidfueldemand,afifthofglobaldemand.However,improvementsinfuelefficiencywillreducethispotentialgrowthsignificantly(by17mbpd)asmanufacturersrespondto

stricter vehicle emission standards. This alongwith electrification cansignificantlydentoildemand.Figure 14: Short term impediments for electrification of vehicles in India Impediment Rationale

Scale

Asperthetarget,Indiawouldneedtosellmorethan10mnelectricvehiclescomparedto1.3mnvehiclesontheroadworldwidein2015.In2015,Indiahadjust5,000electricvehiclesin2015whileitsoldmorethan3mnpassengervehicles.

Policy

Consistentandfirmpoliciesareneededtoexecuteandachievesuchlargetargets.Inthepastpolicieshavebeenvolatile.Hybridcarspolicieshaveseenmarkedchangeswithinitialfavorablemeasuresbutabruptincreaseintaxesnow.

Infrastructure

Comparedtomorethan58,000fueloutlets,Indiahasjust206carchargingstations.Largeinfrastructurewillneedtobebuiltifthetargetsmustbemet.Thiswouldbeamajorchallengeas24x7electricitysupplyisstillnotavailableinmanyruralpartsofthecountry

Jobs

Acombustion‐enginecarhas1,400componentstobuildthemotor,exhaustsystemandtransmission.Anelectricvehicle’sbatteryandelectricmotorhasonly200components.Theaveragecombustionenginetakesabout3.5hourstobebuilt,GermanautoindustryassociationVDAclaimsabanoncombustion‐enginevehiclesin2030wouldthreatenmorethan600,000Germanindustrialjobs,ofwhich436,000pertaintocarcompaniesandsuppliers.Indiatoowouldsuffersubstantialjoblosses.



Figure 15: Battery prices for electric vehicles are likely to decrease significantly

Source:BritishPetroleum,IIFLResearchFigure 16: OPEC has significantly increased its estimates for electric vehicle population


Figure 17: Demand estimates of electric vehicles by IEA

Source:IEA,IIFLResearch Figure 18: List of OEMs announcements on electric car ambitions, as of April 2017 OEM Announcement

BMW 0.1mnelectriccarsalesin2017and15‐25%oftheBMWgroup’ssalesby2025

Chevrolet(GM) 30thousandannualelectriccarsalesby2017ChineseOEMs 4.52mnannualelectriccarsalesby2020Daimler 0.1mnannualelectriccarsalesby2020Ford 13newEVmodelsby2020

Honda Two‐thirdsofthe2030salestobeelectrifiedvehicles(includinghybrids,PHEVs,BEVsandFCEVs)

Renault‐Nissan 1.5mncumulativesalesofelectriccarsby2020

Tesla 0.5mnannualelectriccarsalesby2018and1mnannualelectriccarsalesby2020

Volkswagen 2‐3mnannualelectriccarsalesby2025Volvo 1mncumulativeelectriccarsalesby2025Source:IEA,IIFLResearch


REFINING SEGMENT – to act as a cushion Ramp up of refinery complexity Empirically, refineries of OMCs have been earning GRMs significantlybelowthedomesticprivateplayersandregionalbenchmarks.Theprimereasonistheweakcomplexityofrefineries.However,inrecenttimes,themanagement of these companies, cognizant of this fact, are makinginvestmentstoscaleupthecomplexityindexoftheirrefineries.Addingsecondary processing units to existing units and setting up of newcomplex refineries are the two ways out. HPCL has commencedoperationsat itsBhatindarefineryunder itsJVwithMittalEnergy.IOChas recently commenced operations at its Paradip refinery, which isamongstthemostcomplexrefineriesinthecountry.BPCLhasscaledupcapacities at its Kochi refinery along with increasing the complexity.Goingforwardtoo,thesaidcompanieswouldaddsecondaryprocessingcapabilities to their existing refineries to improve their product slatetowardsmorevalue‐addedproducts likepetrolanddiesel, resulting inbetterGRMs. Figure 19: Possible shift of production from low value products to high value products

Source:ATMA,SIAM,IIFLResearch

Figure 20: Refinery complexity

Source:MediaReports,Company,IIFLResearchFigure 21: Current production profile of OMCs

Source:Companies,Petroleumministry,IIFLResearch

12.0 12.5 11.7

0.7

(6.0)(10.0)

(5.0)

‐

5.0

10.0

15.0

Gasoline Diesel JetKero Naphtha FuelOil

US$/bbl

6.0

9.6

5.4 5.7

11.8 12.6

8.1 7.7 7.810.4 10.0

8.410.5

12.2

6.5

14.0

11.3

8.0

‐2.04.06.08.010.012.014.016.0

BPCLBina

BPCLKochi

BPCLMum

bai

CPCL

EssarO

ilVadinar

HPCLBhatinda

HPCLMum

bai

HPCLVisakhapatnam

IOCBarauni

IOCHaldia

IOCKoyali

IOCMathura

IOCPanipat

IOCParadip

MRPL

RIL‐Jam

nagar2

RIL‐Jamnagar1

WorldAverage

0%10%

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100%

HPCL BPCL IOC

MS HSD LPG SKO ATF Naphtha Others


Better crude sourcing freedom In April 2016, the government empowered boards of OMCs andMangaloreRefineriesandPetrochemicalsLtd(MRPL)tomakequickspotpurchases of crude oil on their own and take advantage of temporarymarketdiscounts,insteadofissuingtenderslikebefore.Spotpurchasescurrentlyform15‐30%oftheoverallcrudeprocurementofOMCs.Thegovernmentmovewasaimedatmakingstate‐refinersmorecompetitiveliketheirprivatepeers.OfficialsatallthreeOMCsstatethatwithboard‐level committees in place, spot crude purchases now happen in hoursagainst days earlier, helping themavail of somediscounts. The earliertender method would take nearly a week, shutting them out of dealswhichhad tobe struckquickly.While theapprovalsare inplace sincemorethanayear,it’sonlyrecentlythatthesecompaniesaresettinguptrading offices in Singapore, the trading hub of Asia. Shortfall ofadequatelytrainedstaffandfluidpolicieswerethekeyhindrances.TheFlexibility in sourcing of crude is reflected in the change in sourcingcountries aswell. Share of Iranhas increased after the sanctions havebeenlifted,whileIOChasaddedRussiatoitslistofsuppliers.Refineriesequipped with higher complexities as mentioned above have alsoprovidedtheseOMCsthemuscletobargainharder.

Risk management will only improve from hereon OMCshaveshiedawayfromhedgingcrudeoilprices,currencyorcrackspreadscitingheaviercosts,lackofexpertiseandhugevolatilityasprimereasons. Private refiners, in the past, have used hedging strategies toreduce the impact of gyrations in crude oil prices, exchange rates andcrackspreadsontheirfinancialperformance.Volatilityincrudeoilpriceshasreducedconsiderablyintherecentpastasittradesinanarrowbandof US$45‐55/bbl.We expect this trend to sustain in the near term assupplysidepressurescreatedbyproductioncutsbyOPECmembers isoffsetbyhigherproduction inUS.Reducedvolatilitywill lead to lowerhedgingcostsforOMCs.Thus,webelieve,OMCswillincrementallyhedgetheirexposures.

Figure 22: Change in import source of crude oil

Source:BPStatisticalreview,IIFLResearch

Figure 23: Volatility in crude oil prices has receded


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3mchangeincrudeoilprice


Aggressive capex plans to hamper balance sheet strength Empirically,OMCshadhighdependenceoncashflowsfromgovernmentfor compensation of under recoveries, which were sporadic.Consequently,companieshadtoborrowlargequantumoffunds.Infact,priortoFY10,thecompensationwasintheformofoilbondsthatfacedliquidityconstraints.Hence,debtonthebookshadpeakedtosignificantlyhigher levels. However, with de‐regulation of diesel and petrol prices,balance sheets have improved considerably. This coupled with lowerinterestratesintheeconomyhascausedlowerinterestexpenditureforcompanies.However,going forward, thesecompaniesareaggressively investing inexpanding their capacities, and fordiversification.All three companieshaveplannedcapacityexpansionoftheirexistingrefineriesandsetupofnew refineries. Together these companies are setting up 60mn tonrefinery in Maharashtra. Also, these companies are expanding theirmarketinginfrastructuretocountertherisingcompetitionfromprivateplayers. In terms of diversification, investments are directed towardspetrochemicals,pipelinesandhydrocarbonexploration.TogetherthesecompanieshavelinedupacapitalexpenditureofRs3.7to4.0trillionoverthenextfiveyears.Whilecashflowswouldimproveconsideringstrongrefiningsegmentperformance,webelievethecompanieswouldhavetoresorttoborrowingstofundtheirprojects.

Figure 24: Large capital expenditure plans over the next 5 years

Source:Mediareports,IIFLResearchFigure 25: Large capex plans will lead to higher leverage on balance sheet (D/E)


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x

FY16 FY19E


High dividend payouts may not sustain Overthepastcoupleyears,stronggrowthinprofitabilityforOMCshasledtohighdividendpayoutsbythem.Goingahead,weexpectearningsgrowth to be muted. This coupled with large capex plans, will meaninadequatecashflowstosustainhighdividendpayouts. Valuations in line with global peers, we Downgrade our rating Oilmarketingcompaniesareexpected toseea flattishearningsprofileoverthenextcoupleofyears.Highercapexwouldlikelyincreaseleverageonthebalancesheet.Returnratiosareforecastedtodeclinebutwouldremain in top quartile.Valuations,however,are in linewithglobalpeersandhencepresentacaseforasectorratingdowngradefromOverweighttoNeutral.Amongststocks,wedowngradeHPCL fromBUYtoACCUMULATE,andBPCLandIOCLfromBUYtoREDUCE.Figure 26: Peer comparison

Marketcap(US$mn)

EV(US$mn)

P/E(x)

EV/EBIDTA(x)

RoE(%)

Caltex 6,717 7,287 13.9 7.9 19.9ShowaShell 4,362 5,571 11.8 7.0 14.1SKInnovation 15,818 17,495 8.1 5.0 11.8ThaiOil 5,731 6,195 10.8 6.5 14.6Formosa 33,073 30,070 18.5 9.4 17.1HPCL 9,677 12,284 9.6 7.8 23.4BPCL 15,554 20,197 9.5 9.3 24.4IOCL 29,653 38,497 9.6 7.0 19.0Source:Company,Bloomberg,IIFLResearch

HPCL - Accumulate

Undervaluedvis‐à‐vispeers

COMPANY RESEARCH

CMP(Rs)(AsonSep20,2017) 416 SECTOR:Oil&Gas

12‐mtsTarget(Rs) 470 Marketcap(Rsmn) 635,510

Upside 13.0% Enterprisevalue(Rsmn) 804,510

Figure 1: Financial summary (Standalone) Y/e31Mar(Rsmn) FY16 FY17 FY18E FY19ERevenues 1,795,716 1,870,237 1,926,595 2,153,642yoygrowth(%) (13.1) 4.1 3.0 11.8OPM(%) 4.4 5.7 5.6 5.2ReportedPAT 38,627 62,088 61,362 65,045yoygrowth(%) 41.3 60.7 (1.2) 6.0EPS(Rs) 25.3 40.7 40.3 42.7P/E(x) 16.4 10.2 10.3 9.7Price/Book(x) 3.5 3.1 2.7 2.4EV/EBITDA(x) 11.0 8.7 8.9 8.8Debt/Equity(x) 1.3 1.4 1.4 1.3RoE(%) 22.5 32.1 28.0 25.9RoCE(%) 13.8 18.8 16.5 15.6Source:Company,IIFLResearch

Most leveraged to marketing weakness HPCL,withthehighestmarketingtorefiningvolumeratioamongstOMCs,isthemostleveragedtoweaknessinmarketingmarginswith.Overthepastdecade,thecompanyhasseena73%jumpinthenumberofretailoutletscompared to69%forBPCLand49%for IOC.However,amidstrisingcompetitionfromprivateplayers,HPCLhasdonewellbycedingleast amount of market share. Pressure on marketing margins couldmeanhigherimpactonHPCL’searningsvis‐à‐visBPCLorIOCL.Large capex plan ahead Toimproveitsrefiningtomarketingmix,HPCLisexpandingitsrefiningcapacity.It’smodernizingitsVisakhrefineryandexpandingitsMumbairefinery capacity. In a joint venture with Rajasthan government, it’ssettingupa9mntonperannumrefinery,whichislikelytobecompletedinfiveyears.Also,HPCLaspartofconsortiumwithIOCandBPCL,willsetupamegaUS$40bnrefineryofcapacityof60mntonsonIndia’swesterncoast.Itwouldalsoinvestinexpandingandupgradingitsretailnetwork.Overall,HPCLwouldspendRs600bntowardscapexinthenextfiveyears.Additionalborrowingswouldbeneededtofundthislargecapex.

Valuations hold the key to ONGC – HPCL deal GovernmentofIndiahasdecidedtosellits51%stakeinHPCLtoONGC.Thedealvaluationwillhaveakeybearingonthestockpricemovement.Recentmedia reports suggest ONGCmay acquire the stake atmarketpriceratherthanatthirdpartyvaluation.NothingchangesmateriallyforHPCLsaveforthechangeinpromoterholdingfromoneentitytoanother.Overthemediumterm,crudeoilprocurementcostscouldcomedown.Ontheflipside,HPCL’sboardwouldhavetogothroughONGCformajorgovernmentapprovals,whichcouldinvitedelay.

Still preferred over other two OMCs HPCLtradesatFY19EP/Eof10xonitsstandaloneearnings,whichisinlinewithglobalpeers.However,consideringearningscontributionfromitsJVrefineryandMRPL,valuationsareatadiscounttoBPCLandIOCL.We believe, this discount will narrow down as the gap betweenperformancesonoperationalparametersreduces.WedowngradeourratingfromBUYtoAccumulatewitharevised1‐yearpricetargetofRs470.

HPCL

Refinery complexity at all-time high InFY17,Bhatindarefinery(HMELJV)andMRPLaccountedfor18.4%and7.2% of the consolidated profit respectively. Bhatinda refinery has anelson complexity index of 12.6 compared to 8.1 and 7.7 for HPCL’serstwhilerefineriesinMumbaiandVisakhapatnamrespectively.MRPL’scomplexity factor has moved up from 6.5 to 9.5 post expansion. Thecompany is expanding operations at existing refineries and scaling upcomplexities through fresh investments. In a likely scenario of risingglobal GRMs and more freedom to OMCs for crude sourcing and riskmanagement, we reckon improvement in profitability from refiningassetswouldcushiontheimpactofweaknessinmarketingsegment. Figure 2: SOTP Valuation for HPCL Component ValueHPCLStandalone 363HMEL 73MRPL 31OilIndiaholding 3Total 470CMP 416Upside(%) 13.0Source:IIFLResearch

Figure 3: Trend in market sales

Source:Company,IIFLResearch

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FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E

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Sensex: 31,16052Weekh/l(Rs) 493/2696mAvgt/o(Rsmn): 1,736FV(Rs): 10Divyield(%): 4.8Bloombergcode: HPCLISBSEcode: 500104NSEcode: HINDPETRO

1M 3M 1YAbsolutereturn(%) (10.5) 24.5 47.2

Shareholdingpattern(%)Promoter 51.1

FII+DII 27.0

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60

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210

Sep-16 Jan-17 May-17 Sep-17

HINDPETRO Sensex

HPCL

Figure 4: Trend in refining throughput


Figure 5: Trend in marketing to refining mix


Figure 6: Trend in GRMs

Source:Company,IIFLResearchFigure 7: Trend in RoE and RoCE


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%

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HPCL

Financials (Standalone)

Figure 8: Balance sheet Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EEquitycapital 3,390 10,163 15,244 15,244Reserves 180,171 193,311 219,319 252,256Networth 183,561 203,474 234,563 267,500Debt 239,726 281,755 319,760 358,865Deferredtaxliab(net) 48,105 58,956 58,956 58,956Totalliabilities 471,392 544,185 613,279 685,321 Fixedassets 353,227 379,424 432,388 483,670Investments 109,947 113,756 128,756 143,756Networkingcapital 8,021 50,669 48,761 55,473Inventories 127,091 185,763 191,361 213,912Sundrydebtors 41,927 40,642 41,867 46,801Othercurrentassets 72,321 64,718 71,190 78,309Sundrycreditors (65,871) (126,581) (130,395) (145,762)Othercurrentliabilities (167,447) (113,873) (125,260) (137,786)Cash 197 337 3,374 2,423Totalassets 471,392 544,185 613,279 685,321

Figure 9: Income statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19ERevenue 1,795,716 1,870,237 1,926,595 2,153,642Operatingprofit 79,069 105,771 106,937 113,012Depreciation (26,668) (25,353) (27,035) (28,718)Interestexpense (6,401) (5,357) (6,199) (7,041)Otherincome 11,381 15,147 15,451 17,251Profitbeforetax 57,381 90,208 89,154 94,504Taxes (18,753) (28,120) (27,792) (29,459)Adj.profit 38,627 62,088 61,362 65,045Netprofit 38,627 62,088 61,362 65,045Figure 10: Cash flow statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EProfitbeforetax 57,381 90,208 89,154 94,504Depreciation 26,668 25,353 27,035 28,718Taxpaid (18,753) (28,120) (27,792) (29,459)Workingcapital∆ 8,758 (42,648) 1,907 (6,712)Operatingcashflow 74,053 44,793 90,305 87,051Capitalexpenditure (54,523) (51,549) (80,000) (80,000)Freecashflow 19,531 (6,756) 10,305 7,051Equityraised 2,238 (318) ‐ ‐Investments 2,468 (3,809) (15,000) (15,000)Debtfinancing/disposal (13,754) 42,029 38,005 39,105Dividendspaid (17,525) (41,857) (30,273) (32,108)Otheritems 7,069 10,851 ‐ ‐Net∆incash 26 140 3,037 (951)

HPCL

Figure 11: Ratio analysis

Y/e31Mar FY16 FY17 FY18E FY19EGrowthmatrix(%) Revenuegrowth (13.1) 4.1 3.0 11.8Opprofitgrowth 39.6 33.8 1.1 5.7EBITgrowth 31.2 49.8 (0.2) 6.5Netprofitgrowth 41.3 60.7 (1.2) 6.0Profitabilityratios(%) OPM 4.4 5.7 5.6 5.2EBITmargin 3.6 5.1 4.9 4.7Netprofitmargin 2.2 3.3 3.2 3.0RoCE 13.8 18.8 16.5 15.6RoNW 22.5 32.1 28.0 25.9RoA 5.6 8.3 7.4 7.1Pershareratios(Rs) EPS 25.3 40.7 40.3 42.7Dividendpershare 9.6 22.8 16.5 17.5CashEPS 42.8 57.4 58.0 61.5Bookvaluepershare 120.4 133.5 153.9 175.5Valuationratios(x) P/E 17.0 10.6 10.7 10.1P/CEPS 10.1 7.5 7.4 7.0P/B 3.6 3.2 2.8 2.5EV/EBIDTA 11.3 8.9 9.1 9.0Payout(%) Dividendpayout 45.4 67.4 49.3 49.4Taxpayout 32.7 31.2 31.2 31.2Liquidityratios Debtordays 8.5 7.9 7.9 7.9Inventorydays 25.8 36.3 36.3 36.3Creditordays 13.4 24.7 24.7 24.7Leverageratios Interestcoverage 10.0 17.8 15.4 14.4Netdebt/equity 1.3 1.4 1.3 1.3Netdebt/op.profit 3.0 2.7 3.0 3.2

Figure 12: Du-Pont analysis Y/e31Mar FY16 FY17 FY18E FY19ETaxburden(x) 0.67 0.69 0.69 0.69Interestburden(x) 0.90 0.94 0.93 0.93EBITmargin(x) 0.04 0.05 0.05 0.05Assetturnover(x) 2.60 2.51 2.33 2.34Financialleverage(x) 4.01 3.85 3.77 3.66RoE(%) 22.5 32.1 28.0 25.9

IOC - Reduce

Marketingpangsforlargestmarketer

COMPANY RESEARCH


12‐mtsTarget(Rs) 413 Marketcap(Rsmn) 1,921,239

Upside 4.3% Enterprisevalue(Rsmn) 2,494,590


Marketing margins at risk IOChas43%and47%marketshareindomesticpetrolanddieselsales.Intermsofnumberofretailoutlets,itcommandsa44%marketshare.Ithasthewidestreachonhighways,enablingeffectiveservicetotruckfleetoperators.ItalsohasanestablishedpresenceinruralIndiathroughitscommendablenetworkofKisanSevakKendras.Consequently,IOCcouldbe at the receiving end if marketing margins fall due to competitivepressures. Diversification will provide some respite IOC is the most diversified player in terms of revenue contributionamongstOMCs.While57%oftheEBIDTAisderivedfromrefiningandmarketing businesses, pipelines (crude and products) andpetrochemicals contribute 17% and 21% respectively. In terms ofpipelines, it’s the largest player in crude and product pipelines.Profitability of the petrochemical segment is in the top quartile. Thecompanyhasplanstoexpandoperationsinbothsegments.Thisreducesthecyclicalityriskofrefiningandmarketingdivisions.Huge capex spends ahead Over the next five to seven years, IOC has lined up expansion ofRs2,000bn. In the oil exploration, it has earmarked almost Rs300bnwhereas another Rs300bn is allocated for the petrochemical segment.For the refining segment, Rs520bn has been lined up for variousexpansion and upgradation projects. This excludes investment in theWest Coast Refinery. Another Rs400bn would be spent on marketingfacilitiesandaroundRs220bnwillbe spentonexpanding thepipelinenetwork. These spends would be funded by incremental borrowings,whichwouldreversethedeclineinleverageratiosofthepastfewyears.

Fairly valued, stake sale by ONGC will be a key overhang IOCLtradesatFY19EP/Eof9xonitsstandaloneearnings,whichisinlinewithglobalpeers.Marketingmarginsbeingatriskwouldbeathreattoearnings growth estimates. Furthermore, ONGC to fund acquisition ofgovernment’sstakeinHPCLmayresorttosellingofitsstakeinIOC.ThiswillbeakeyoverhangonthestockpricemovementasONGCholds13.8%stakeinIOC.Consideringthis,wedowngradeourratingonthestockfromBUYtoReducewitharevisedoneyearpricetargetofRs413.

IOCL

Possible merger with Oil India FollowingtheONGC–HPCLdeal,aspermediareports,governmentmayconsidersellingits66%stakeinOilIndiatoIOC.Atcurrentprice,thedealwill require IOC to spend Rs163bn, which can be financed throughincrementalborrowingsorthroughsaleofoilbondsworthRs100bn.Themerger would be as a part of government’s large scale initiative ofcreating integrated companies in the oil sector. IOC has stakes in 17explorationblocks(8domesticand9international).OilIndia’sexpertiseinthefieldwillhelpIOCreapbettervaluefromthoseassets.Paradip refinery catapults refining complexity IOCrecentlycommencedoperationsatitsgreenfieldrefineryinParadip.Thecapacityoftherefineryis15mntonswithanelsoncomplexityindexof 12.2. It has capabilities to process 100% high sulphur crude oil, ofwhich40%canbeheaviergrades.Distillateyieldoftherefinerywillbe81% as compared to 76% of its existing refineries. This will lead tosignificant improvement in overall refining basket for IOC. Also it hasplans to expand capacities of existing refineries with increase incomplexity.ThiswillleadtohigherproductionofvalueaddedproductsandtranslateintohigherGRMs. Figure 2: SOTP Valuation for IOCL Component ValueStandalone 362Listedinvestments 41Otherinvestments 10Total 413CMP 399Upside(%) 3.5Source:IIFLResearch



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Sensex: 31,16052Weekh/l(Rs) 463/2826mAvgt/o(Rsmn): 2,040FV(Rs): 10Divyield(%): 4.8Bloombergcode: IOCLISBSEcode: 530965NSEcode: IOC



FII+DII 17.4

Others 25.3

6080

100120140160

Sep-16 Jan-17 May-17 Sep-17

IOC Sensex

IOCL


Source:Company,IIFLResearchFigure 5: Trend in marketing to refining volume ratio



Source:Company,IIFLResearchFigure 7: Trend in pipelines throughput


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IOCL

Figure 8: Trend in EBIDTA/ton for pipeline division

Source:Company,IIFLResearchFigure 9: Trend in petrochemical volumes


Figure 10: Trend in EBIDTA/ton for petrochemical division



528.2

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RoE(%) RoCE(%)

IOCL


Figure 12: Balance sheet Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EEquitycapital 23,697 47,393 47,393 47,393Preferencecapital Reserves 857,646 949,894 981,974 1,028,691Networth 881,343 997,287 1,029,367 1,076,084Minorityinterest Debt 606,403 713,483 823,483 933,483Deferredtaxliab(net) 68,590 67,592 67,592 67,592Totalliabilities 1,556,336 1,778,363 1,920,442 2,077,160 Fixedassets 1,123,721 1,186,173 1,316,769 1,440,192Intangibleassets Investments 371,814 473,046 473,046 473,046Deferredtaxasset(net) Networkingcapital 54,772 118,179 121,603 143,461Inventories 387,391 624,011 654,582 715,882Sundrydebtors 74,586 85,024 89,189 97,541Othercurrentassets 241,501 222,914 238,697 256,058Sundrycreditors (223,318) (301,075) (315,825) (345,401)Othercurrentliabilities (425,388) (512,695) (545,040) (580,619)Cash 6,029 965 9,024 20,461Totalassets 1,556,336 1,778,363 1,920,442 2,077,160

Figure 13: Income statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19ERevenue 3,506,031 3,598,732 3,775,035 4,128,557Operatingprofit 200,818 317,811 340,206 376,995Depreciation (48,528) (62,230) (69,404) (76,578)Interestexpense (30,001) (34,454) (43,349) (51,117)Otherincome 22,463 42,086 52,035 52,035Profitbeforetax 144,753 263,212 279,489 301,336Taxes (54,405) (72,148) (92,231) (99,441)Minoritiesandother Adj.profit 90,348 191,064 187,258 201,895Exceptionalitems 13,643 ‐ ‐ ‐Netprofit 103,990 191,064 187,258 201,895Figure 14: Cash flow statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EProfitbeforetax 144,753 263,212 279,489 301,336Depreciation 48,528 62,230 69,404 76,578Taxpaid (54,405) (72,148) (92,231) (99,441)Workingcapital∆ 65,740 (63,407) (3,425) (21,858)Otheroperatingitems Operatingcashflow 204,616 189,887 253,237 256,615Capitalexpenditure (147,487) (124,682) (200,000) (200,000)Freecashflow 57,129 65,205 53,237 56,615Equityraised (59,495) 63,432 (0) (0)Investments 63,337 (101,232) ‐ ‐Debtfinancing/disposal (47,102) 107,080 110,000 110,000Dividendspaid (38,794) (138,552) (155,178) (155,178)Otheritems 29,799 (998) ‐ ‐Net∆incash 4,873 (5,064) 8,059 11,437

IOCL


Y/e31Mar FY16 FY17 FY18E FY19EGrowthmatrix(%) Revenuegrowth (19.9) 2.6 4.9 9.4Opprofitgrowth 97.9 58.3 7.0 10.8EBITgrowth 79.0 70.3 8.5 9.2Netprofitgrowth 150.6 111.5 (2.0) 7.8Profitabilityratios(%) OPM 5.7 8.8 9.0 9.1EBITmargin 5.0 8.3 8.6 8.5Netprofitmargin 2.6 5.3 5.0 4.9RoCE 11.1 17.9 17.5 17.6RoNW 10.3 20.3 18.5 19.2RoA 4.1 8.0 7.0 7.0Pershareratios(Rs) EPS 19.1 40.3 39.5 42.6Dividendpershare 7.0 25.0 28.0 28.0CashEPS 29.3 53.4 54.2 58.8Bookvaluepershare 186.0 210.4 217.2 227.1Valuationratios(x) P/E 20.9 9.9 10.1 9.4P/CEPS 13.6 7.5 7.4 6.8P/B 2.1 1.9 1.8 1.8EV/EBIDTA 12.4 8.2 8.0 7.4Payout(%) Dividendpayout 42.9 72.5 82.9 76.9Taxpayout 37.6 27.4 33.0 33.0Liquidityratios Debtordays 7.8 8.6 8.6 8.6Inventorydays 40.3 63.3 63.3 63.3Creditordays 23.2 30.5 30.5 30.5Leverageratios Interestcoverage 5.8 8.6 7.4 6.9Netdebt/equity 0.7 0.7 0.8 0.8Netdebt/op.profit 3.0 2.2 2.4 2.4


BPCL - Reduce

Upstreamconcerns&marketingwoes

COMPANY RESEARCH


12‐mtsTarget(Rs) 483 Marketcap(Rsmn) 1,010,004

Upside 3.6% Enterprisevalue(Rsmn) 1,311,371


E&P project delays Bharat PetroResources (BPRL), a wholly‐owned BPCL subsidiary, hasparticipatinginterestin17upstreamexplorationblocks‐seveninIndia,sixinBrazilandoneeachinMozambique,Indonesia,AustraliaandEastTimor.Ofthese,BrazilandMozambiquearethebiggestdiscoverieswithlargereservesofoilandgasrespectively.However,thedevelopmentoftheseblockshasseensignificantdelaysinthepastfewyears.Givensoftcrudeoilpriceoutlookandoversupplyofgasglobally,theseassetsmaynotcreateincrementalvalueinnearfuture. Highest throughput per outlet but marketing margins at risk WhileBPCL lagsHPCL intermsofretailoutletsaddedacross India, itsthroughputperoutletis14%higherthanthatofHPCLand4%highervis‐à‐vis IOCL. The company now intends to increase non‐fuel revenuesthrough pioneering initiatives like rural marketplace, integrated fleetmanagementprograms,personal travelofferingsandurbanhouseholdsolutions.Withmarketingmargins likely to be flattish owing to risingcompetition,webelieve,BPCLakintootherOMCswillfeelthepaininitsmarketingsegment.Higher borrowings needed to fund huge capex plan BPCLtooisspendingheavilyonincreasingitsrefiningcapacityaswellasmarketingandupstreamactivities.Totaloutlayoverthenextfiveyearsis estimated to be in excess of Rs1,000bn. Major projects include 1)raisingcapacityofBinarefineryto320,000bpd from120,000bpd.,2)furtherexpansionofKochiplant to400,00bpdby2022,and3)raisingMumbai refinery capacityby17% to280,000bpd.Apart from this, thecompany would invest in marketing activities, E&P investments andsettinguppetrochemicalplants.Theseprojectswillneedtobefundedviaincrementaldebt.

Upsides restricted by upstream assets BPCLtradesatFY19EP/Eof10.7xonitsstandaloneearnings.Withriskstoearningsgrowth fromthemarketingsegmentalongwitherosion invalue of upstream assets through constant delays, we believe thevaluations are fair at current levels.Wedowngradeourrating fromBUYtoReducewitharevised1‐yearpricetargetofRs483.

BPCL

Possible takeover of GAIL Underthegovernment’sstrategyofcreatingintegratedoilcompanies,atakeoverofgovernment’sstakeinGAILbyBPCLisunderconsideration.At CMP, BPCLmay have to payRs180bn to buy out the government’sstake for theplannedmerger.BPCLandGAILalreadyoperatetogetherthroughafewJVsinthecitygasbusinessincludingIGL,CentralUPGas,MaharashtraNatural Gas and GoaNatural Gas. This acquisitionwouldsupportBPCL’saggressiveplanstoincreaseitsgassectorpresence.Kochi refinery expansion to drive up overall refining complexity BPCL recently completed its expansion project at its Kochi refinery,scaling up capacity from 9.5mtpa to 15.5mtpa and modernizing it toproduceauto‐fuelsinlinewithEuro‐IV/Euro‐Vspecifications.Giventhattheprojectunitshavetheflexibilitytoprocesshighsulphurcrudes,thecomplexity index of the refinery would likely rise from 6.4 to 10.2,enablinghighershareofvalueaddedproductsthroughalowercostcrudediet(fromheavierandsourervarietiesofcrudeintake)leadingtohigherGRMs.TheBinarefineryalsohasahighnelsoncomplexityindexof9.1enablingittoearnhigherGRMsvis‐à‐visMumbairefinery. Figure 2: SOTP Valuation for BPCL Component ValueStandalone 373E&P 50Listedinvestments 60Total 483CMP 468Upside(%) 3.2Source:IIFLResearch



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Sensex: 31,16052Weekh/l(Rs) 546/3896mAvgt/o(Rsmn): 1,755FV(Rs): 10Divyield(%): 4.7Bloombergcode: BPCLISBSEcode: 500547NSEcode: BPCL



FII+DII 30.1

Others 15.0

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BPCL Sensex

BPCL


Source:Company,IIFLResearchFigure 5: Trend in marketing to refining volume ratio





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25.0

30.0

35.0

40.0

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50.0


mntons

1.5

1.4

1.4

1.4

1.5

1.5

1.6

1.6

1.7


x

2.3

5.8

‐

1.0

2.0

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4.0

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US$/bbl

8.8

28.5

9.8

22.0

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15.0

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25.0

30.0

35.0


%

RoE(%) RoCE(%)

BPCL


Figure 8: Balance sheet Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EEquitycapital 7,231 13,113 19,669 19,669Preferencecapital Reserves 264,356 283,571 279,647 286,151Networth 271,587 296,684 299,316 305,819Minorityinterest Debt 137,704 211,490 261,490 291,490Deferredtaxliab(net) 22,289 35,017 35,017 35,017Totalliabilities 431,580 543,191 595,823 632,326 Fixedassets 360,857 430,598 484,760 542,567Intangibleassets Investments 129,737 146,015 146,015 146,015Deferredtaxasset(net) Networkingcapital (79,688) (35,869) (42,234) (60,790)Inventories 136,963 197,980 214,455 215,003Sundrydebtors 21,650 45,782 49,592 49,718Othercurrentassets 90,014 97,075 105,170 114,076Sundrycreditors (84,308) (113,598) (123,051) (123,365)Othercurrentliabilities (244,007) (263,108) (288,400) (316,222)Cash 20,674 2,447 7,283 4,535Totalassets 431,580 543,191 595,823 632,326

Figure 9: Income statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19ERevenue 1,893,033 2,022,106 2,190,374 2,195,971Operatingprofit 110,563 108,293 120,262 134,746Depreciation (18,543) (18,913) (23,671) (27,192)Interestexpense (5,629) (4,959) (10,704) (11,935)Otherincome 20,122 26,007 27,743 27,743Profitbeforetax 106,512 110,428 113,630 123,361Taxes (32,193) (30,035) (34,089) (37,008)Minoritiesandother Adj.profit 74,319 80,393 79,541 86,353Exceptionalitems 0 0 0 0Netprofit 74,319 80,393 79,541 86,353Figure 10: Cash flow statement Y/e31Mar(Rsm) FY16 FY17 FY18E FY19EProfitbeforetax 106,512 110,428 113,630 123,361Depreciation 18,543 18,913 23,671 27,192Taxpaid (32,193) (30,035) (34,089) (37,008)Workingcapital∆ 22,598 (43,819) 6,365 18,556Otheroperatingitems Operatingcashflow 115,459 55,488 109,578 132,101Capitalexpenditure (99,593) (88,654) (77,833) (85,000)Freecashflow 15,867 (33,167) 31,745 47,101Equityraised (1,407) (5,105) 2,941 0Investments (5,826) (16,278) ‐ ‐Debtfinancing/disposal 19,231 73,786 50,000 30,000Dividendspaid (26,000) (50,191) (79,850) (79,850)Otheritems 5,206 12,728 ‐ ‐Net∆incash 7,071 (18,227) 4,836 (2,748)

BPCL


Y/e31Mar FY16 FY17 FY18E FY19EGrowthmatrix(%) Revenuegrowth (20.5) 6.8 8.3 0.3Opprofitgrowth 33.0 (2.1) 11.1 12.0EBITgrowth 40.2 2.9 7.8 8.8Netprofitgrowth 46.2 8.2 (1.1) 8.6Profitabilityratios(%) OPM 5.8 5.4 5.5 6.1EBITmargin 5.9 5.7 5.7 6.2Netprofitmargin 3.9 4.0 3.6 3.9RoCE 28.3 23.7 21.8 22.0RoNW 30.0 28.3 26.7 28.5RoA 10.2 9.6 8.3 8.3Pershareratios(Rs) EPS 37.8 40.9 40.4 43.9Dividendpershare 11.4 22.0 35.0 35.0CashEPS 47.2 50.5 52.5 57.7Bookvaluepershare 138.1 150.8 152.2 155.5Valuationratios(x) P/E 12.4 11.4 11.6 10.7P/CEPS 9.9 9.3 8.9 8.1P/B 3.4 3.1 3.1 3.0EV/EBIDTA 9.4 10.4 9.8 9.0Payout(%) Dividendpayout 35.0 62.4 100.4 92.5Taxpayout 30.2 27.2 30.0 30.0Liquidityratios Debtordays 4.2 8.3 8.3 8.3Inventorydays 26.4 35.7 35.7 35.7Creditordays 16.3 20.5 20.5 20.5Leverageratios Interestcoverage 19.9 23.3 11.6 11.3Netdebt/equity 0.4 0.7 0.8 0.9Netdebt/op.profit 1.1 1.9 2.1 2.1


Analyst:HemantNahata,NavneetDaga

DERIVATIVES STRATEGY

Rollovers (D–1) September’17

September 28, 2017

A sharp sell‐off woke up Indian equity traders from their summerslumber.Nifty/BankNiftylostgroundlowerby~1.44/2%onEoEbasis(D‐1 days) as FPIs continued their relentless selling spree. Month’shighlights included: a) Sharp depreciation of INR, b) Heavy shorts onindexfuturesandcash‐basedsellingbyFIIsc)near‐termconcernarisingfrom markets having bucked the global trend of continuing elevatedlevels.MarketsselloffintensifiedasoptionswritersscrambledtocovershortputswrittenatlowerIVs.Rollover for Nifty stood at 46%, (1.2cr shares) as against 37% (1crshares)onpreviousmonthanda6Maverageof52%(1.5crshares).RollsforBankNiftystoodat42%,(1.2crshares)asagainst37%(1crshares)onpreviousmonthanda6Maverageof49%(17lacsshares).Market‐widerolls stood at 55% (vs 56% for prior month), however, rolls weresignificantlyhigherwhencomparedinshareterms.COCforNifty/Bankniftystoodat31/22bpsasagainst6Maverageof43/23bps.VWAPexpectedflows:Buy:SrtfinanceSell:OILIndia

Figure 1: Nifty Options Matrix : Heavy Call Build-up

Source:NSE,IIFLResearch

Figure 2: Bank Nifty Options Matrix : 24K looks like the pain point

Source:NSE,IIFLResearch

0.5

2.5

4.5

6.5

9500 9600 9700 9800 9900 10000 10100 10200 10300 10400 10500

MnCallOI PutOI

‐3.06.09.012.015.0

23500 23600 23700 23800 23900 24000 24100 24200 24300 24400 24500

Lacs CallOI PutOI

Figure 3: Sector-wise rollovers

Source:Bloomberg,NSE,IIFLResearch

20.030.040.050.060.070.080.0

Auto&Anc. PSUBk. Prv.Bk CapitalGd Cement Fetilizers FMCG IT Infra Realty Media Metals Oil&Gas Pharma Power Textiles Telecom Others

%SeptemberD‐1 AugustD‐1 JulyD‐1


Figure 4: Strong Rollovers

Scrip LTP Roll%

changeeoe

Rollcost

Infibeam 125 87.6 (15.3) 0.52Bhartiartl 386 81.1 (10.0) 0.44Dhfl 527 80.2 4.5 0.67Jswsteel 237 76.5 (8.4) 0.46Wipro 289 75.9 (1.1) 0.00Ibrealest 204 74.5 (11.3) 0.78Tcs 2,500 74.1 0.6 0.09Dabur 306 73.9 (2.7) 0.57Ultracemco 3,806 72.3 (5.0) 0.44Yesbank 354 72.3 1.0 0.44Bharatforg 1,219 71.3 6.5 0.14Bharatfin 930 70.9 5.9 0.58Source:NSE,IIFLResearch Figure 5: Weak Rollovers

Scrip LTP Roll%

changeeoe

Rollcost

Pageind 18,557 31.5 5.4 0.47Repcohome 600 36.7 (7.6) 0.57Pvr 1,174 37.3 (10.4) 0.49Apollohosp 1,005 39.6 (7.8) 0.45Godfryphlp 994 39.7 (4.6) 0.53Cummins 906 39.8 ‐ 0.40Cipla 570 41.3 0.5 0.44Banknifty 23,830 41.6 (2.0) 0.17Hindalco 233 41.8 (1.1) 0.45Ramcocem 691 41.9 (0.3) 0.48Powergrid 208 42.4 (3.7) 0.36Ujjivan 319 42.7 (11.1) 0.47Source:NSE,IIFLResearch

Figure 6: High cost of carry

Scrip LTP Roll%

changeeoe

Rollcost

Gmrinfra 16 43.4 (7.3) 0.94Jswenergy 69 57.6 3.3 0.80Rcom 19 56.3 (15.9) 0.79Rcom 19 56.3 (15.9) 0.79Ibrealest 204 74.5 (11.3) 0.78Southbank 28 52.0 0.2 0.72Dlf 161 50.5 (12.2) 0.72Capf 719 50.7 (0.7) 0.70Adanient 114 55.3 (10.7) 0.70Divislab 851 43.5 21.0 0.68Dhfl 527 80.2 4.5 0.67Raymond 787 69.1 3.0 0.67Source:NSE,IIFLResearch Figure 7: Low cost of carry

Scrip LTP Roll%

changeeoe

Rollcost

Hdfcbank 1,774 63.0 0.5 (0.18)Wipro 289 75.9 (1.1) 0.00Oil 350 46.1 19.6 0.06Tcs 2,500 74.1 0.6 0.09Hindunilvr 1,207 55.9 0.4 0.09Canbk 318 53.4 (6.2) 0.13Bharatforg 1,219 71.3 6.5 0.14Banknifty 23,830 41.6 (2.0) 0.17Godrejind 574 54.5 (7.6) 0.26Ongc 170 65.3 7.4 0.29Voltas 513 48.5 (2.4) 0.30Suzlon 16 46.5 (3.9) 0.32Source:NSE,IIFLResearch

Figure 8: 6months Nifty movement

Source:NSE,Bloomberg,IIFLResearchFigure 9: 6months Banknifty movement

Source:NSE,Bloomberg,IIFLResearch

9200

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3‐May 31‐May 28‐Jun 26‐Jul 23‐Aug 20‐Sep

OctoberseriesVAProlls

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25500

3‐May 31‐May 28‐Jun 26‐Jul 23‐Aug 20‐Sep

OctseriesVAProlls@24,175


Figure 10: Holdings

SrNo MutualFunds Debt(Cr) Debt% Equity(Cr) Equity% Cash&CashEqu(Cr)

Cash&CashEqu%

1 AxisEnhancedArbitrageFund‐Reg(G) 232 16 599 42 585 41

2 AdityaBirlaSLEnhancedArbitrageFund(G) 654 23 2,056 72 130 5

3 DHFLPramericaArbitrageFund‐Reg(G) 59 7 345 43 406 50

4 EdelweissAbsoluteReturnFund(G) 0 0 0 0 0 0

5 EdelweissArbitrageFund‐Reg(G) 529 19 1,992 73 198 7

6 EdelweissEquitySavingsAdvantageFund(G) 0 0 0 0 0 0

7 HDFCArbitrage‐WP(G) 860 20 3,400 79 37 1

8 ICICIPruEquity‐ArbitrageFund(G) 1,552 18 6,559 76 469 5

9 IDFCArbitrageFund‐Reg(G) 368 16 1,870 83 3 0

10 IDFCArbitragePlusFund‐Reg(G) 136 25 419 77 (10) (2)

11 IndiabullsArbitrageFund‐Reg(G) 59 11 216 42 240 47

12 InvescoIndiaArbitrageFund(G) 0 0 156 45 193 55

13 JMArbitrageAdvFund(G) 0 0 1,783 78 517 22

14 KotakEquityArbitrageScheme(G) 1,297 10 5,357 42 6,134 48

15 L&TArbitrageOppFund‐Reg(G) 0 0 160 83 33 17

16 PrincipalArbitrageFund(G) 2 83 0 0 0 17

17 RelianceArbitrageAdvantageFund(G) 647 14 4,100 91 (266) (6)

18 SBIArbitrageOpportunitiesFund‐Reg(G) 147 21 524 76 23 3

19 UTISpread(G) 148 16 903 95 (97) (10)Source:ACEMF,IIFLResearch(Ason26thSeptember,2017)


Figure 11: Top 10 Holdings Buy Add Reduce Constant

SchemeName Top10HoldingsAXISEhncdArb

CENTURYTEX(6.01%) DHFL(4.49%) BHARATFORG

(3.23%) SBIN(3.1%) SIEMENS(3.07%)

TORNTPOWER(2.57%)

CASTROLIND(2.19%)

AUROPHARMA(2.18%)

MOTHERSUMI(1.98%)

PETRONET(1.88%)

AdityaBirlaSunLifeEhncdArb

VEDL(2.36%) BHARATFIN(2.33%)

MARUTI(2.21%)

RELIANCE(1.92%) DHFL(1.89%) JSWSTEEL

(1.87%)CENTURYTEX(1.85%)

SUNTV(1.66%)

FEDERALBNK(1.53%) INFY(1.36%)

DHFLPramericaArb

CENTURYTEX(7.44%)

MARUTI(4.85%)

JSWSTEEL(4.36%)

SUNTV(3.95%)

BAJFINANCE(3.63%)

POWERGRID(3.42%)

YESBANK(3.2%)

JSWENERGY(3.17%)

TATAMTRDVR(3.07%) IDFC(2.59%)

EdelweissArb

JSWSTEEL(2.89%)

BHARATFIN(2.56%) DHFL(2.44%) MARUTI

(2.15%)CENTURYTEX(1.91%)

SUNTV(1.91%)

RELCAPITAL(1.79%) DLF(1.57%) VEDL(1.52%) RELINFRA

(1.46%)

HDFCArb INFY(5.03%) SUNPHARMA(3.15%)

DRREDDY(3.11%)

ICICIBANK(2.94%)

AUROPHARMA(2.71%) VEDL(2.7%) MARUTI

(2.22%)TATASTEEL(1.89%) ITC(1.67%) RELCAPITAL

(1.46%)ICICIPruEquityArb INFY(5.86%) MARUTI

(2.71%)TATASTEEL(2.51%)

RELIANCE(2.24%)

YESBANK(2.15%) ITC(1.91%) IBULHSGFIN

(1.74%)HINDALCO(1.54%)

HINDPETRO(1.4%) M&M(1.29%)

IDFCArb INFY(4.83%) JSWSTEEL(4.09%)

YESBANK(3.25%) UPL(2.45%) SBIN(2.32%) DHFL(2.25%) TATAGLOBAL

(2.08%) CESC(2.06%) CENTURYTEX(1.93%)

ICICIBANK(1.71%)

IDFCArbPlus SUNPHARMA(6.73%)

CENTURYTEX(4.79%)

FORTIS(3.83%)

JSWSTEEL(3.57%)

JINDALSTEL(3.15%)

ICICIBANK(2.97%)

TATAMTRDVR(2.95%) SBIN(2.88%) AUROPHARMA

(2.7%) INFY(2.67%)

IndiabullsArb

SUNPHARMA(7.74%) INFY(7.69%) MARUTI

(6.56%)YESBANK(5.12%)

JSWSTEEL(4.24%)

AXISBANK(3.98%)

ICICIBANK(3.76%) DHFL(3.5%) INFIBEAM

(3.31%) ITC(3.17%)

InvescoIndiaArb IDFC(9.55%) NTPC(6.94%) UJJIVAN

(5.46%) INFY(4.54%) TATAGLOBAL(4.22%)

INFIBEAM(3.16%) HDIL(2.93%) TATAELXSI

(2.82%)RPOWER(1.74%) IRB(1.66%)

JMArbAdvantage INFY(2.85%) TATAGLOBAL

(2.75%) IDFC(2.37%) ITC(2.22%) IBULHSGFIN(1.92%)

JSWSTEEL(1.91%) DHFL(1.74%) IBREALEST

(1.65%)RELINFRA(1.53%)

JINDALSTEL(1.42%)

KotakEquityArb INFY(3.49%) SBIN(2.16%) SUNPHARMA

(2.03%)VEDL(1.66%)

BANKBARODA(1.35%) MRF(1.28%) ONGC(1.27%) HINDZINC

(1.2%) UPL(1.15%) AUROPHARMA(1.1%)

L&TArbOpportunities

INFIBEAM(6.59%)

RELINFRA(4.42%)

RPOWER(3.81%)

INDIACEM(3.16%)

FORTIS(3.16%) VEDL(2.86%) IBREALEST

(2.64%) GSFC(2.5%) TV18BRDCST(2.45%)

JISLJALEQS(2.38%)

PrincipleArb DHFL(9.73%) ONGC(9.45%) AUROPHARMA(9.31%) IDFC(8.46%) INDIACEM

(8%)RELIANCE(5.97%) IRB(5.15%) FORTIS(3.8%) JETAIRWAYS

(2.97%)ASIANPAINT(2.25%)

RelianceArbAdvantage INFY(5.11%) VEDL(3.41%) YESBANK

(2.76%)LUPIN(2.21%)

ASHOKLEY(2.15%)

BANKBARODA(1.9%)

COALINDIA(1.64%)

SUNPHARMA(1.62%) SBIN(1.62%) AUROPHARMA

(1.46%)SBIArbOpportunities

CENTURYTEX(7.16%)

TATACOMM(5.32%)

IBULHSGFIN(3.62%)

MARUTI(3.59%)

TATAMTRDVR(3.52%) CESC(2.69%) TV18BRDCST

(2.51%)AUROPHARMA(2.32%)

IDFCBANK(2.29%) CAPF(1.85%)

UTISpread SUNPHARMA(4.86%) INFY(4.04%) YESBANK

(2.56%)VEDL(2.36%) ONGC(2.19%) SUZLON

(1.99%)IDFCBANK(1.76%) DHFL(1.73%) INFIBEAM

(1.67%) NTPC(1.52%)

Source:ACEMF,IIFLResearch


New Major addition and reduction in September, 2017

Figure 12: AXIS Ehncd Arbitrage Newstocksbought Qty Stockssoldout QtySUZLON 1,530,000 M&MFIN 732,500IDFCBANK 846,000 RELCAPITAL 415,500BANKBARODA 822,500 IBULHSGFIN 127,200MANAPPURAM 540,000 DIVISLAB 85,600SOUTHBANK 497,115 HINDALCO 56,000TATAGLOBAL 454,500 DRREDDY 35,400SBIN 411,000 ICICIBANK 327,250 PETRONET 312,000 INFRATEL 299,200 ADANIPOWER 260,000 RECLTD 222,000 JPASSOCIAT 204,000 MOTHERSUMI 198,750 SIEMENS 174,500 ASHOKLEY 168,000 COALINDIA 146,200 CADILAHC 126,400 LT 124,500 SRTRANSFIN 120,000 ARVIND 94,000 GLENMARK 93,100 JETAIRWAYS 84,000 INDIACEM 77,000 ASIANPAINT 73,800 JSWENERGY 59,500 HINDPETRO 51,975 INFY 48,500 HEROMOTOCO 24,800 YESBANK 22,750 INDUSINDBK 19,800

IDFC 13,200 MARUTI 10,050

Figure 13: Aditya Birla Sun Life Ehncd Arbitrage Newstocksbought Qty Stocksoldout QtyINFIBEAM 2,664,000 ITC 1,708,800VEDL 766,500 HINDALCO 864,500BANKBARODA 630,000 BEL 576,000EXIDEIND 552,000 PETRONET 531,000BPCL 502,200 IBULHSGFIN 398,400SBIN 453,000 TATASTEEL 388,000ASHOKLEY 434,000 IOC 333,000SUNPHARMA 322,400 ENGINERSIN 273,000PCJEWELLER 312,000 RELCAPITAL 250,500FORTIS 310,500 MARICO 231,400HINDPETRO 297,675 L&TFH 216,000MOTHERSUMI 292,500 SINTEX 192,375AUROPHARMA 278,400 NTPC 184,000ICIL 273,000 APOLLOTYRE 159,000DHFL 258,000 LT 150,750AMBUJACEM 227,500 M&M 150,500TATAMOTORS 225,000 HDFC 119,000SUNTV 217,000 TECHM 101,200RECLTD 210,000 INFY 97,000COALINDIA 193,800 PFC 96,000CAPF 190,400 MARUTI 45,300LICHSGFIN 187,000 IGL 44,000INDIANB 180,000 HEROMOTOCO 32,000MFSL 177,000 INDIGO 30,600BIOCON 172,800 INFRATEL 18,700GSFC 171,000 AXISBANK 18,000UNIONBANK 140,000 ACC 17,600UJJIVAN 136,800 PIDILITIND 14,000BHARATFIN 136,000 ORIENTBANK 132,000 ZEEL 130,000


YESBANK 121,100 IDEA 119,000 CHENNPETRO 115,500 RELIANCE 108,500 BERGEPAINT 105,600 BANKINDIA 102,000 JSWSTEEL 102,000 CENTURYTEX 101,200 ICICIPRULI 89,700 ANDHRABANK 80,000 CESC 72,600 GRASIM 70,500 KOTAKBANK 60,800 NIITTECH 58,500 LUPIN 58,000 ADANIPORTS 47,500 JINDALSTEL 45,000 BATAINDIA 44,000 STAR 38,500 M&MFIN 32,500 TITAN 30,000 CANBK 24,672 BAJAJ‐AUTO 23,500 POWERGRID 20,000 CEATLTD 19,600 TATACHEM 19,500 ONGC 18,750 CASTROLIND 18,200 INDUSINDBK 16,800 BAJFINANCE 13,500 BHARTIARTL 11,900

Figure 14: DHFL Pramerica Arbitrage Newstocksbought Qty Stocksoldout QtyJPASSOCIAT 2,856,000 FEDERALBNK 352,000JSWENERGY 1,283,500 ITC 312,000FORTIS 521,100 IDFCBANK 279,000

IDFC 462,000 RELCAPITAL 169,500HINDALCO 350,000 RELIANCE 134,000INDIACEM 168,000 PFC 126,000BAJFINANCE 108,000 IBULHSGFIN 104,000YESBANK 96,950 TATACHEM 90,000BHARATFIN 77,000 INDUSINDBK 72,000JSWSTEEL 57,000 HDFC 64,500INFY 34,000 UPL 32,400 CESC 15,400 BEML 10,200

Figure 15: Edelweiss Arbitrage Newstocksbought Qty Stocksoldout QtyINFIBEAM 2,466,000 JPASSOCIAT 1,972,000VEDL 861,000 NHPC 1,566,000RECLTD 828,000 SUZLON 1,410,000JSWENERGY 799,000 BEL 972,000CGPOWER 780,000 PFC 924,000ASHOKLEY 770,000 GMRINFRA 855,000COALINDIA 725,900 L&TFH 823,500RPOWER 720,000 TATAPOWER 783,000GSFC 648,000 PETRONET 726,000SBIN 585,000 APOLLOTYRE 603,000DISHTV 546,000 JSWSTEEL 384,000TATAMOTORS 540,000 NATIONALUM 360,000ICICIBANK 382,250 IBULHSGFIN 347,200TATAGLOBAL 378,000 JINDALSTEL 319,500JISLJALEQS 351,000 ITC 304,800INFRATEL 333,200 HCC 276,000IBREALEST 320,000 EXIDEIND 260,000HINDZINC 268,800 SUNPHARMA 252,000ONGC 266,250 TATACHEM 244,500BHEL 235,000 TATASTEEL 226,000PTC 224,000 PNB 178,500BANKBARODA 189,000 FEDERALBNK 176,000IDFCBANK 189,000 RELINFRA 175,500


ESCORTS 179,300 HDIL 168,000ICICIPRULI 171,600 BATAINDIA 162,800TATAMTRDVR 136,500 LUPIN 160,800CENTURYTEX 133,100 LT 156,000FORTIS 129,600 INDIGO 153,000INDIACEM 129,500 SINTEX 149,625HINDALCO 126,000 DCBBANK 148,500RELCAPITAL 123,000 DLF 145,000NBCC 123,000 TITAN 138,000TV18BRDCST 119,000 IOC 121,500BALRAMCHIN 119,000 ARVIND 120,000IDFC 118,800 KPIT 92,000INFY 105,000 GRANULES 80,000BHARATFIN 103,000 IRB 70,000BPCL 93,600 GRASIM 56,250AUROPHARMA 87,200 AXISBANK 48,000NMDC 84,000 TCS 41,000KTKBANK 83,600 MGL 37,800NTPC 76,000 TATACOMM 25,200BAJFINANCE 65,500 BHARATFORG 24,000MCDOWELL‐N 64,750 SRF 22,000NCC 64,000 SRTRANSFIN 20,400YESBANK 61,950 KOTAKBANK 18,400RAYMOND 49,600 CAPF 16,000UPL 46,800 BEML 15,000DIVISLAB 44,000 JUSTDIAL 14,400MARUTI 43,050 GAIL 14,000MFSL 43,000 CEATLTD 12,600DRREDDY 41,000 WOCKPHARMA 39,200 ADANIENT 24,000 MANAPPURAM 18,000 GLENMARK 17,500 EQUITAS 12,800 RELIANCE 10,500

Figure 16: HDFC Arbitrage Newstocksbought Qty Stocksoldout QtyICICIBANK 2,593,250 TATASTEEL 1,164,000MANAPPURAM 2,148,000 PETRONET 675,000IDFC 1,993,200 BEL 634,500GSFC 1,773,000 ZEEL 587,600SAIL 1,764,000 TECHM 553,300SBIN 1,722,000 JSWSTEEL 537,000VEDL 1,505,000 ADANIPORTS 517,500RPOWER 1,056,000 APOLLOTYRE 462,000IDEA 980,000 ITC 420,000JSWENERGY 858,500 AMBUJACEM 355,000NTPC 852,000 HINDPETRO 291,375RECLTD 606,000 AXISBANK 244,800ASHOKLEY 546,000 M&M 209,000GODREJCP 395,200 BATAINDIA 144,100BALRAMCHIN 381,500 TATAPOWER 135,000TATAMOTORS 376,500 VGUARD 108,000BPCL 340,200 BAJFINANCE 83,000EQUITAS 329,600 COALINDIA 44,200MARICO 327,600 HDFC 42,000MRPL 324,000 PFC 42,000NCC 296,000 FORTIS 29,700INFRATEL 295,800 APOLLOHOSP 16,500NMDC 288,000 ACC 16,400GODREJIND 279,000 EXIDEIND 16,000SUNPHARMA 276,800 NATIONALUM 16,000INFY 276,500 LT 15,750YESBANK 250,600 GAIL 14,000HDIL 240,000 NBCC 12,000HINDZINC 214,400 MCDOWELL‐N 10,750AUROPHARMA 208,000 PCJEWELLER 207,000 LUPIN 205,200 RELINFRA 201,500 BHEL 185,000 DIVISLAB 178,400


INDIGO 176,400 INFIBEAM 176,400 GLENMARK 161,000 DHFL 139,500 JINDALSTEL 130,500 TATAGLOBAL 112,500 RELIANCE 99,000 ADANIENT 96,000 RDEL 90,000 TATAMTRDVR 81,900 JISLJALEQS 81,000 NHPC 81,000 INDIACEM 77,000 BIOCON 75,600 CANFINHOME 75,500 ESCORTS 74,800 SUNTV 73,000 CASTROLIND 67,200 BERGEPAINT 63,800 RAYMOND 62,400 TATACOMM 51,100 CAPF 50,400 TITAN 49,500 CEATLTD 47,600 M&MFIN 47,500 MOTHERSUMI 45,000 DRREDDY 44,000 ICICIPRULI 40,300 POWERGRID 40,000 BHARATFIN 38,000 MCX 36,000 BHARTIARTL 32,300 SRF 32,000 HINDALCO 31,500 WOCKPHARMA 28,800 HINDUNILVR 28,200 KOTAKBANK 25,600

BAJAJ‐AUTO 23,250 INDUSINDBK 21,600 UPL 21,600 CENTURYTEX 21,450 KPIT 20,000 LICHSGFIN 19,800 BALKRISIND 18,000 JETAIRWAYS 15,600 AMARAJABAT 10,200

Figure 17: ICICI Pru Equity Arbitrage Newstocksbought Qty Stocksoldout QtyINFY 3,785,000 NTPC 2,368,000IDFC 3,616,800 ITC 2,337,600SUZLON 2,940,000 HINDUNILVR 1,210,800JISLJALEQS 2,637,000 TATASTEEL 1,174,000JSWENERGY 2,533,000 RELCAPITAL 1,036,500MANAPPURAM 2,298,000 LT 531,000RECLTD 2,232,000 KOTAKBANK 303,200ONGC 2,160,000 BEL 279,000RCOM 2,044,000 FEDERALBNK 165,000HINDALCO 1,904,000 MCDOWELL‐N 129,750SBIN 1,569,000 YESBANK 124,600VEDL 1,547,000 PETRONET 117,000BANKBARODA 1,484,000 M&M 90,000TATAMOTORS 1,194,000 HDFC 89,500JSWSTEEL 999,000 M&MFIN 87,500ICICIBANK 943,250 ACC 87,200ADANIPORTS 862,500 IBULHSGFIN 64,000HINDPETRO 626,850 AMBUJACEM 32,500SUNPHARMA 422,400 RELINFRA 27,300LICHSGFIN 400,400 CIPLA 22,000FORTIS 356,400 TCS 21,250COALINDIA 345,100 EICHERMOT 16,525HCLTECH 345,100 BPCL 343,800 PNB 339,500


IDEA 315,000 INFRATEL 307,700 BHEL 275,000 HINDZINC 265,600 TATAMTRDVR 241,500 KTKBANK 235,600 BHARTIARTL 202,300 IOC 171,000 PFC 156,000 INDIGO 122,400 AXISBANK 121,200 ADANIENT 120,000 SUNTV 115,000 UPL 109,200 INDIACEM 108,500 GLENMARK 91,000 CAPF 73,600 AUROPHARMA 65,600 DHFL 64,500 UJJIVAN 40,800 DRREDDY 40,000 GRASIM 39,750 INDUSINDBK 39,000 ARVIND 38,000 MARUTI 37,050 MGL 27,600 BAJAJ‐AUTO 20,750 MOTHERSUMI 18,750 GAIL 16,000

Figure 18: IDFC Arbitrage Newstocksbought Qty Stocksoldout QtyASHOKLEY 1,337,000 SINTEX 1,132,875BANKBARODA 1,183,000 SUNPHARMA 894,400RPOWER 984,000 RELCAPITAL 807,000MANAPPURAM 930,000 JSWENERGY 714,000NTPC 792,000 ICICIBANK 693,000

RECLTD 756,000 HINDALCO 563,500INFRATEL 736,100 AXISBANK 540,000SBIN 708,000 ONGC 532,500INFY 498,000 PETRONET 519,000POWERGRID 452,000 DLF 375,000UPL 428,400 AMBUJACEM 360,000TATAMOTORS 394,500 JINDALSTEL 243,000DHFL 370,500 RCOM 238,000SYNDIBANK 360,000 RELIANCE 238,000BHEL 285,000 TCS 229,250BIOCON 284,400 IRB 202,500NMDC 276,000 PFC 192,000DCBBANK 274,500 HAVELLS 190,000AUROPHARMA 250,400 PNB 164,500TATAGLOBAL 247,500 ITC 163,200RELINFRA 214,500 MFSL 161,000ARVIND 182,000 IOC 151,500BHARATFIN 181,000 GRANULES 150,000INDIACEM 178,500 JSWSTEEL 135,000DIVISLAB 175,200 M&M 125,500GAIL 142,000 LUPIN 123,600EXIDEIND 140,000 PIDILITIND 116,000VEDL 136,500 TATACHEM 111,000BPCL 133,200 IBULHSGFIN 102,400BAJFINANCE 114,000 APOLLOTYRE 84,000TATACOMM 97,300 ZEEL 75,400GSFC 85,500 TATAMTRDVR 73,500CESC 81,400 BEL 72,000GLENMARK 80,500 HINDPETRO 70,875LICHSGFIN 60,500 BATAINDIA 63,800VOLTAS 60,000 HDIL 56,000CENTURYTEX 58,850 KOTAKBANK 54,400BAJAJ‐AUTO 57,250 MRPL 54,000ENGINERSIN 56,000 COALINDIA 42,500YESBANK 56,000 OIL 40,788UBL 49,700 TECHM 37,400LT 48,750 SRTRANSFIN 36,600


CUMMINSIND 45,000 CIPLA 34,000HEXAWARE 45,000 IBREALEST 30,000BHARATFORG 37,200 MUTHOOTFIN 27,000MARUTI 33,750 ULTRACEMCO 25,800TATAPOWER 27,000 ADANIENT 24,000TATASTEEL 26,000 CEATLTD 23,800STAR 25,500 FEDERALBNK 22,000SRF 24,500 CADILAHC 20,800UNIONBANK 24,000 KPIT 20,000ADANIPORTS 22,500 M&MFIN 15,000AMARAJABAT 21,600 HCLTECH 14,700BERGEPAINT 19,800 DRREDDY 11,800ACC 18,400 WOCKPHARMA 10,400ORIENTBANK 18,000 TITAN 16,500 BANKINDIA 12,000 MOTHERSUMI 11,250

Figure 19: IDFC Arbitrage Plus Newstocksbought Qty Stocksoldout QtyNTPC 500,000 BEL 405,000RPOWER 480,000 TATAMTRDVR 382,200JINDALSTEL 409,500 PFC 378,000MANAPPURAM 402,000 JSWENERGY 238,000INFRATEL 255,000 LUPIN 98,800COALINDIA 176,800 APOLLOTYRE 87,000SBIN 165,000 PETRONET 87,000AUROPHARMA 98,400 SUNPHARMA 79,200RELINFRA 91,000 TATAGLOBAL 76,500NMDC 72,000 IBULHSGFIN 58,400SRTRANSFIN 60,600 AMBUJACEM 55,000CESC 57,200 M&MFIN 55,000CENTURYTEX 44,000 M&M 42,000TATAMOTORS 22,500 LICHSGFIN 39,600TATACHEM 16,500 FEDERALBNK 33,000DRREDDY 15,200 JSWSTEEL 21,000ICICIPRULI 13,000 HINDPETRO 20,475

MOTHERSUMI 11,250 ONGC 18,750 SRF 16,000 AXISBANK 14,400 ITC 12,000 IBREALEST 10,000

Figure 20: Indiabulls Arbitrage Newstocksbought Qty Stocksoldout QtyINFIBEAM 648,000 GRANULES 345,000TATAMTRDVR 241,500 KTKBANK 212,800ICICIBANK 228,250 TATASTEEL 188,000ASHOKLEY 217,000 BEL 162,000PNB 192,500 GSFC 162,000KOTAKBANK 39,200 ZEEL 88,400INDUSINDBK 30,000 JSWSTEEL 30,000YESBANK 13,300 IRB 15,000FEDERALBNK 11,000 AXISBANK 10,800

Figure 21: Invesco India Arbitrage Newstocksbought Qty Stocksoldout QtyNTPC 928,000 IDFC 726,000INFIBEAM 476,000 NCC 504,000UJJIVAN 186,000 GRANULES 315,000TV18BRDCST 170,000 BEL 270,000GMRINFRA 135,000 HCC 204,000SOUTHBANK 66,282 NHPC 162,000PCJEWELLER 45,000 DLF 155,000ADANIPOWER 40,000 TATAMTRDVR 126,000MANAPPURAM 36,000 RCOM 112,000ICIL 28,000 BHEL 80,000KSCL 22,500 INFY 77,000IFCI 22,000 JINDALSTEL 76,500RAYMOND 18,400 HEXAWARE 75,000CEATLTD 13,300 INDIACEM 66,500STAR 13,000 MOTHERSUMI 63,750RPOWER 12,000 TATAMOTORS 63,000


SRTRANSFIN 12,000 HINDPETRO 51,975 IRB 45,000 TATASTEEL 44,000 RELIANCE 32,500 PFC 30,000 MFSL 30,000 MCX 29,500 INDIANB 28,000 JISLJALEQS 27,000 COALINDIA 25,500 FORTIS 21,600 L&TFH 18,000 GSFC 18,000 EXIDEIND 16,000 TATAELXSI 15,600 ACC 15,200 ITC 14,400 TATAGLOBAL 13,500 DIVISLAB 11,200

Figure 22: JM Arbitrage Advantage Newstocksbought Qty Stocksoldout QtySUZLON 3,870,000 DLF 705,000INFIBEAM 2,278,400 ITC 556,800PCJEWELLER 801,000 SINTEX 448,875GSFC 531,000 NATIONALUM 360,000RELINFRA 513,500 L&TFH 270,000MANAPPURAM 510,000 TATAPOWER 216,000SBIN 333,000 PETRONET 51,000SOUTHBANK 331,410 IOC 45,000TATAGLOBAL 315,000 TECHM 44,000MFSL 262,000 MARICO 36,400MRPL 261,000 TORNTPHARM 12,400DHFL 225,000 RPOWER 204,000 BHARATFIN 200,000 JINDALSTEL 184,500

POWERGRID 168,000 TATAMOTORS 157,500 TATACOMM 156,800 RECLTD 138,000 GLENMARK 131,600 TATACHEM 129,000 ANDHRABANK 120,000 JISLJALEQS 99,000 ICIL 98,000 INDIACEM 98,000 APOLLOTYRE 90,000 GMRINFRA 90,000 INDIANB 80,000 DIVISLAB 73,600 IDFCBANK 72,000 INFY 71,500 HCC 60,000 UNIONBANK 56,000 TITAN 36,000 AMARAJABAT 34,800 APOLLOHOSP 32,500 LUPIN 31,200 ICICIPRULI 27,300 BHARATFORG 25,800 BANKBARODA 24,500 BATAINDIA 22,000 BHEL 15,000 MARUTI 13,800 LICHSGFIN 11,000

Figure 23: Kotak Equity Arbitrage Newstocksbought Qty Stocksoldout QtyONGC 3,778,750 IDFCBANK 5,057,000SBIN 2,944,000 SOUTHBANK 3,521,528SUNPHARMA 2,103,200 FEDERALBNK 2,723,000RECLTD 1,830,000 JPASSOCIAT 2,716,000COALINDIA 1,707,600 SINTEX 2,208,750


NMDC 1,348,000 JSWSTEEL 1,803,000INFY 1,272,000 SUZLON 1,680,000INFRATEL 1,000,000 PFC 1,582,000VEDL 929,500 ENGINERSIN 1,302,000SAIL 864,000 NHPC 1,160,000EQUITAS 787,200 JSWENERGY 1,136,500PTC 776,000 APOLLOTYRE 1,077,000HINDZINC 700,800 TECHM 1,056,000IDFC 660,800 TATAGLOBAL 1,033,000BIOCON 633,600 PETRONET 1,014,000RELINFRA 575,900 IFCI 984,000ASHOKLEY 506,000 ITC 864,000ADANIPOWER 500,000 EXIDEIND 820,000SREINFRA 485,000 INDIACEM 801,500ALBK 470,000 TATAMTRDVR 675,800ADANIPORTS 442,500 SRTRANSFIN 638,400NTPC 404,000 NATIONALUM 608,000DHFL 394,500 GRANULES 590,000DIVISLAB 391,200 L&TFH 576,000CGPOWER 380,000 TITAN 534,000BPCL 349,200 BATAINDIA 524,700UJJIVAN 339,600 BEL 513,000RPOWER 336,000 ORIENTBANK 510,000MOTHERSUMI 333,750 JISLJALEQS 457,000BANKBARODA 306,000 KPIT 456,000UNIONBANK 304,000 IOC 444,000ICICIPRULI 282,100 TATAPOWER 441,000RCOM 268,000 IRB 425,000BHEL 245,000 NCC 400,000GMRINFRA 245,000 GRASIM 369,750CHENNPETRO 238,500 TATASTEEL 348,000ICIL 234,500 NBCC 348,000POWERGRID 224,000 GSFC 340,000BANKINDIA 180,000 BHARATFORG 325,200CAPF 178,400 IBREALEST 320,000RDEL 174,000 UBL 296,100BHARTIARTL 153,000 OIL 290,048

NIITTECH 153,000 HINDALCO 273,000GODREJCP 142,400 GAIL 272,000SYNDIBANK 136,000 TATACHEM 249,000DRREDDY 125,600 ANDHRABANK 240,000AUROPHARMA 122,400 MFSL 225,000INDIGO 119,400 CASTROLIND 194,200HDIL 112,000 UPL 186,800PNB 111,000 INDIANB 180,000YESBANK 110,600 MANAPPURAM 168,000CESC 110,000 COLPAL 163,800APOLLOHOSP 107,500 RAMCOCEM 134,400TV18BRDCST 104,000 AXISBANK 132,000GLENMARK 100,100 MUTHOOTFIN 129,000CONCOR 99,375 LUPIN 123,200BHARATFIN 95,000 IDEA 119,000STAR 83,500 TATAMOTORS 109,500ADANIENT 80,000 CADILAHC 108,800SRF 79,500 PIDILITIND 94,000MCDOWELL‐N 77,500 ACC 92,800JETAIRWAYS 73,200 RELIANCE 87,000BEML 67,200 HINDPETRO 86,625CEATLTD 65,800 AMARAJABAT 77,400LICHSGFIN 62,700 DCBBANK 75,500PCJEWELLER 60,000 PVR 68,400CUMMINSIND 57,000 HCC 68,000REPCOHOME 55,300 ULTRACEMCO 62,600M&MFIN 55,000 ESCORTS 61,600CIPLA 54,000 DLF 60,000PEL 49,800 M&M 54,500BALRAMCHIN 49,000 BERGEPAINT 46,200BAJAJ‐AUTO 46,250 CHOLAFIN 46,000INDUSINDBK 43,200 RELCAPITAL 45,000GODREJIND 42,000 TATACOMM 44,100CANBK 37,008 HEROMOTOCO 38,800ZEEL 29,900 SUNTV 38,000AJANTPHARM 29,200 IBULHSGFIN 32,800IDBI 24,000 TATAELXSI 32,400


HEXAWARE 21,000 HCLTECH 30,100KAJARIACER 20,000 RAYMOND 28,800ASIANPAINT 18,600 GODFRYPHLP 28,000MARICO 18,200 ICICIBANK 27,500TORNTPHARM 16,400 AMBUJACEM 22,500MGL 11,400 KTKBANK 21,600 MINDTREE 21,600 DISHTV 21,000 HAVELLS 20,000 JUSTDIAL 18,000 SIEMENS 17,000 LT 14,250 MRPL 13,500 BRITANNIA 13,200 FORTIS 11,500 JINDALSTEL 10,500

Figure 24: L&T Arbitrage Opportunities Newstocksbought Qty Stocksoldout QtyINFIBEAM 948,000 ITC 568,800SUZLON 930,000 INDIANB 262,000JISLJALEQS 558,000 IRB 200,000INDIACEM 409,500 NMDC 162,000SOUTHBANK 397,692 IDFCBANK 162,000IDFC 356,400 FEDERALBNK 110,000MANAPPURAM 312,000 CGPOWER 48,000FORTIS 229,500 PCJEWELLER 27,000VEDL 213,500 TATAELXSI 23,600SYNDIBANK 198,000 UJJIVAN 22,800GSFC 175,500 PVR 18,400BANKBARODA 161,000 ZEEL 14,300ONGC 123,750 ADANIPORTS 12,500SBIN 108,000 HINDZINC 70,400 SUNPHARMA 61,600 RECLTD 60,000 HCC 60,000

CHENNPETRO 60,000 RELINFRA 57,200 APOLLOTYRE 45,000 NTPC 44,000 RELCAPITAL 43,500 PTC 40,000 LICHSGFIN 37,400 SUNTV 37,000 AUROPHARMA 23,200 ENGINERSIN 21,000 GRANULES 20,000 AMBUJACEM 17,500 MCDOWELL‐N 12,000 BEML 10,800 MGL 10,200

Figure 25: Reliance Arbitrage Advantage Newstocksbought Qty Stocksoldout QtyASHOKLEY 4,249,000 L&TFH 2,250,000SOUTHBANK 4,010,061 JSWENERGY 2,014,500SBIN 3,294,000 NCC 1,080,000VEDL 3,104,500 DLF 1,060,000SUZLON 2,490,000 FEDERALBNK 1,001,000IDFC 2,415,600 TECHM 788,700JINDALSTEL 2,038,500 INDIACEM 724,500IDFCBANK 1,566,000 JSWSTEEL 630,000BANKBARODA 1,466,500 BEL 553,500FORTIS 1,360,800 ITC 552,000GMRINFRA 1,170,000 BATAINDIA 502,700MOTHERSUMI 1,102,500 TATASTEEL 484,000NTPC 976,000 DISHTV 476,000SUNPHARMA 968,000 HDIL 464,000NHPC 783,000 ICICIBANK 412,500TATAMOTORS 759,000 PFC 390,000UNIONBANK 736,000 IOC 376,500RECLTD 702,000 ENGINERSIN 357,000JISLJALEQS 693,000 ONGC 348,750


BANKINDIA 690,000 CADILAHC 340,800HCC 660,000 AUROPHARMA 314,400YESBANK 635,250 SRTRANSFIN 298,200COALINDIA 603,500 MRPL 202,500INFIBEAM 582,800 IRB 175,000ADANIENT 576,000 TATACHEM 150,000TITAN 552,000 MUTHOOTFIN 145,500BHEL 545,000 INDIANB 112,000MANAPPURAM 540,000 M&MFIN 87,500LUPIN 539,200 UJJIVAN 70,800TATAGLOBAL 522,000 PIDILITIND 64,000IFCI 484,000 BHARATFIN 60,000EQUITAS 406,400 GSFC 58,500EXIDEIND 396,000 IBREALEST 50,000NMDC 360,000 DHFL 48,000BHARTIARTL 353,600 DALMIABHA 48,000DIVISLAB 309,600 HCLTECH 47,600GLENMARK 292,600 HEXAWARE 42,000MARICO 286,000 LICHSGFIN 40,700INFY 280,000 MINDTREE 31,200HINDALCO 273,000 AJANTPHARM 26,800APOLLOHOSP 249,500 AXISBANK 25,200RAMCOCEM 238,400 GAIL 22,000ADANIPOWER 220,000 CASTROLIND 21,000SUNTV 215,000 TCS 18,750PCJEWELLER 204,000 BERGEPAINT 17,600IDEA 189,000 HEROMOTOCO 13,800CAPF 185,600 ULTRACEMCO 12,800BPCL 180,000 PAGEIND 12,650ICICIPRULI 143,000 CONCOR 12,500RELIANCE 113,500 ACC 10,800HINDZINC 108,800 MARUTI 10,050SYNDIBANK 108,000 UPL 104,400 PTC 104,000 KSCL 99,000 CESC 85,800

APOLLOTYRE 78,000 ADANIPORTS 77,500 PNB 77,000 AMBUJACEM 75,000 TATACOMM 74,200 POWERGRID 64,000 WOCKPHARMA 63,200 GRASIM 61,500 TATAMTRDVR 58,800 SAIL 48,000 NIITTECH 46,500 CUMMINSIND 45,600 INDIGO 43,200 MFSL 39,000 KOTAKBANK 28,800 PEL 28,500 STAR 27,500 BHARATFORG 21,000 BAJAJ‐AUTO 17,250 BAJAJFINSV 17,000 BALRAMCHIN 14,000 CANFINHOME 12,250 AMARAJABAT 10,200

Figure 26: SBI Arbitrage Opportunities Newstocksbought Qty Stocksoldout QtyJSWENERGY 833,000 BEL 1,062,000VEDL 469,000 ITC 436,800ICICIBANK 126,500 TATAGLOBAL 76,500JINDALSTEL 112,500 BHARATFIN 75,000CAPF 82,400 PIDILITIND 68,000TATACOMM 60,900 APOLLOHOSP 45,000MARUTI 39,000 INFY 33,000BAJFINANCE 29,500 CESC 30,800RELIANCE 27,500 IOC 16,500AXISBANK 19,200 SRTRANSFIN 14,400 IBULHSGFIN 12,800


Figure 27: UTISpread Newstocksbought Qty Stocksoldout QtySUZLON 6,780,000 JPASSOCIAT 5,100,000INFIBEAM 1,532,000 JSWSTEEL 1,406,000NHPC 1,404,000 FORTIS 828,900NTPC 1,236,000 ITC 446,400SAIL 1,236,000 HCC 252,000RCOM 952,000 VEDL 175,000SBIN 615,000 M&M 171,500JINDALSTEL 589,500 SOUTHBANK 165,705TATAGLOBAL 540,000 LICHSGFIN 152,900PTC 512,000 IRB 122,500GSFC 445,500 ASHOKLEY 105,000BANKBARODA 392,000 PETRONET 93,000SUNPHARMA 321,600 TECHM 74,800TATAMOTORS 289,500 STAR 74,000HINDALCO 287,000 TATAPOWER 72,000BALRAMCHIN 273,000 MUTHOOTFIN 58,500EQUITAS 249,600 SRTRANSFIN 51,600INFRATEL 214,200 DCBBANK 49,500IDFCBANK 180,000 INDIANB 44,000INFY 166,000 KOTAKBANK 36,800EXIDEIND 160,000 MFSL 35,000NMDC 156,000 LUPIN 32,800ICICIBANK 151,250 AXISBANK 26,400YESBANK 139,300 GRASIM 23,250ICICIPRULI 132,600 DHFL 21,000MANAPPURAM 132,000 AMARAJABAT 20,400APOLLOTYRE 123,000 GLENMARK 18,200BANKINDIA 102,000 DRREDDY 17,800AUROPHARMA 88,800 RELCAPITAL 16,500ADANIENT 88,000 ULTRACEMCO 13,600COALINDIA 81,600 BPCL 12,600PCJEWELLER 78,000 ASIANPAINT 12,000NBCC 75,000 IOC 12,000REPCOHOME 74,900 PFC 12,000BIOCON 73,800

ORIENTBANK 72,000 CHENNPETRO 72,000 BAJFINANCE 64,500 PNB 63,000 ARVIND 58,000 WOCKPHARMA 57,600 ADANIPORTS 57,500 AJANTPHARM 50,400 CENTURYTEX 50,050 JETAIRWAYS 46,800 RELINFRA 44,200 HINDPETRO 40,950 PIDILITIND 40,000 VOLTAS 40,000 BHARTIARTL 39,100 TATACHEM 39,000 MOTHERSUMI 37,500 IDEA 35,000 ZEEL 31,200 TATACOMM 30,800 BHARATFORG 27,600 CESC 27,500 BHEL 25,000 CAPF 20,000 RAYMOND 20,000 CIPLA 19,000 UPL 16,800 CEATLTD 15,400 ESCORTS 15,400 GRANULES 15,000 CUMMINSIND 14,400 CANFINHOME 14,000 SRF 13,000 BALKRISIND 11,600 ENGINERSIN 10,500 TITAN 10,500 Source:ACEMF,IIFLResearch


Figure 28: Derivative rollover details SeptemberD‐1 AugustD‐1 JulyD‐1 DomesticFund

ArbPositionas%oftotalOIScripName Rolled

(%)%pricechgeoe

No.ofsharesrolled

Rolled(%)

%pricechgeoe

No.ofsharesrolled

Rolled(%)

%pricechgeoe

No.ofsharesrolled

NIFTY 46% (1.5) 12,115,125 37% (1.4) 10,032,075 49% 5.6 12,086,775 ‐BANKNIFTY 42% (2.0) 1,065,200 47% (1.5) 1,135,480 44% 6.2 1,671,200 ‐SectorAverage 46% 13,180,325 38% 11,167,555 49% 13,757,975 ‐ ‐Automobiles ‐Two&ThreeWheeler ‐HEROMOTOCO 66% (6.5) 1,288,000 59% 7.4 599,200 46% 0.7 524,400 6BAJAJ‐AUTO 64% 9.9 1,000,250 53% (3.1) 796,000 42% 2.3 504,000 18TVSMOTOR 60% 5.7 3,382,000 45% 6.6 2,702,000 39% 7.0 2,296,000 ‐EICHERMOT 55% (1.5) 87,400 47% 6.8 68,125 37% 6.8 53,525 23SectorAverage 62% 5,757,650 48% 4,165,325 40% 3,377,925 ‐ ‐FourWheeler ‐ASHOKLEY 65% 4.5 36,631,000 62% 1.2 32,347,000 57% 14.6 30,240,000 34M&M 51% (9.5) 2,810,000 42% (3.7) 1,656,000 34% 4.0 1,934,500 43MARUTI 64% 2.3 1,190,700 59% 0.0 1,186,800 62% 4.5 1,138,200 43TATAMOTORS 57% 6.9 24,504,000 62% (17.1) 25,648,500 57% 3.3 23,595,000 5TATAMTRDVR 65% 0.9 15,775,200 59% (18.4) 13,414,800 55% (1.4) 10,697,400 58ESCORTS 50% 2.5 2,073,500 53% (4.6) 2,467,300 48% (0.6) 2,534,400 38SectorAverage 61% 82,984,400 61% 76,720,400 55% 70,139,500 ‐ ‐AutoAncillaries ‐BHARATFORG 71% 6.5 3,415,800 66% 0.3 1,822,200 66% 0.3 3,495,600 52EXIDEIND 55% 3.3 7,720,000 60% (9.6) 5,928,000 60% (9.6) 8,948,000 73MOTHERSUMI 57% 7.7 7,293,750 59% (4.0) 4,402,500 59% (4.0) 6,292,500 23BOSCHLTD 60% (4.7) 63,550 71% (8.9) 28,975 71% (8.9) 69,625 14AMARAJABAT 51% (9.0) 943,200 48% (8.0) 747,600 48% (8.0) 685,800 23SectorAverage 58% 19,436,300 60% 12,929,275 60% 19,491,525 ‐ ‐Banking&FinancialServices ‐PSUBanks ‐


SeptemberD‐1 AugustD‐1 JulyD‐1 DomesticFundArbPositionas%oftotalOIScripName Rolled

(%)%pricechgeoe

No.ofsharesrolled

Rolled(%)

%pricechgeoe

No.ofsharesrolled

Rolled(%)

%pricechgeoe

No.ofsharesrolled

ALBK 50% (3.2) 7,520,000 45% (10.6) 8,480,000 45% (10.6) 7,010,000 4ANDHRABANK 47% 7.3 12,190,000 46% (11.1) 11,810,000 46% (11.1) 10,010,000 17BANKBARODA 54% (0.9) 34,310,500 60% (14.8) 24,717,000 60% (14.8) 37,684,500 36BANKINDIA 48% (3.2) 9,186,000 50% (11.3) 9,498,000 50% (11.3) 9,564,000 5CANBK 53% (6.2) 6,174,168 52% (5.2) 4,946,736 52% (5.2) 5,258,220 2ORIENTBANK 47% (3.6) 8,148,000 46% (17.1) 9,354,000 46% (17.1) 7,824,000 14PNB 43% (6.7) 13,524,000 49% (10.8) 13,370,000 49% (10.8) 12,880,000 9SBIN 58% (9.3) 58,152,000 61% (6.4) 32,157,000 61% (6.4) 49,638,000 11SYNDIBANK 46% (3.4) 8,856,000 47% (16.1) 10,287,000 47% (16.1) 8,964,000 15UNIONBANK 53% (7.1) 13,080,000 54% (14.7) 8,808,000 54% (14.7) 10,368,000 4KTKBANK 50% (5.6) 12,220,800 53% (4.2) 10,959,200 53% (4.2) 12,543,800 29INDIANB 56% (11.9) 2,506,000 55% (7.8) 1,756,000 55% (7.8) 2,150,000 50SectorAverage 52% 185,867,468 54% 146,142,936 54% 173,894,520 ‐ ‐PrivateBanks ‐AXISBANK 69% 0.6 23,871,600 60% (4.9) 13,816,800 60% (4.9) 20,305,200 9FEDERALBNK 58% 1.7 33,374,000 55% (5.3) 29,084,000 55% (5.3) 35,431,000 64HDFCBANK 63% 0.5 14,669,000 69% 1.0 7,169,500 69% 1.0 15,861,000 ‐ICICIBANK 54% (7.9) 55,753,500 53% (3.0) 41,181,250 53% (3.0) 46,816,000 9IDBI 53% (5.6) 18,712,000 55% (11.4) 16,880,000 55% (11.4) 20,496,000 2KOTAKBANK 54% 1.1 4,261,600 47% (1.8) 5,398,400 47% (1.8) 4,721,600 11INDUSINDBK 57% 0.8 2,495,400 51% 4.7 2,464,200 51% 4.7 2,597,400 15YESBANK 72% 1.0 29,349,250 50% 2.1 4,648,700 50% 2.1 4,564,700 6SOUTHBANK 52% 0.2 86,498,010 46% (8.7) 58,394,442 46% (8.7) 50,175,474 22IDFCBANK 60% 1.6 65,556,000 51% (7.9) 46,908,000 51% (7.9) 48,519,000 52DCBBANK 47% (6.8) 3,172,500 51% (4.5) 3,208,500 51% (4.5) 3,384,000 37RBLBANK 47% (6.9) 2,524,000 46% 1.9 4,559,000 46% 1.9 3,957,000 ‐SectorAverage 57% 340,236,860 52% 233,712,792 52% 256,828,374 ‐ ‐FinancialInstitution&Brokerage ‐HDFC 55% (1.9) 6,123,500 47% 7.5 5,444,000 47% 7.5 4,784,000 12IDFC 59% 7.1 98,524,800 58% (6.4) 54,621,600 58% (6.4) 76,560,000 31IFCI 52% (3.6) 48,444,000 57% (11.4) 38,060,000 57% (11.4) 50,710,000 30LICHSGFIN 57% (8.7) 6,811,200 49% (10.0) 3,564,000 49% (10.0) 3,421,000 19



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PFC 53% (1.9) 15,672,000 46% 0.2 21,036,000 46% 0.2 17,784,000 62RELCAPITAL 46% (10.5) 4,194,000 42% 18.7 5,511,000 42% 18.7 3,970,500 55SRTRANSFIN 50% 7.1 2,166,000 67% (0.5) 1,568,400 67% (0.5) 3,244,800 107M&MFIN 52% (6.7) 3,612,500 46% 6.8 4,640,000 46% 6.8 3,937,500 51L&TFH 65% (4.3) 17,892,000 50% 21.7 9,229,500 50% 21.7 9,414,000 23BHARATFIN 71% 5.9 8,967,000 63% 11.1 4,757,000 63% 11.1 8,150,000 31IBULHSGFIN 51% 1.1 3,484,800 42% 1.7 4,480,800 42% 1.7 3,186,400 59BAJFINANCE 47% 1.4 2,492,000 58% 6.0 1,752,500 58% 6.0 2,402,000 5DHFL 80% 4.5 20,827,500 74% 9.7 6,364,500 74% 9.7 18,247,500 33CAPF 51% (0.7) 1,765,600 61% (5.6) 1,411,200 61% (5.6) 2,162,400 19EQUITAS 48% (8.5) 6,073,600 57% (0.0) 3,168,000 57% (0.0) 4,227,200 30MUTHOOTFIN 62% (0.7) 1,494,000 63% (3.2) 748,500 63% (3.2) 1,293,000 51UJJIVAN 43% (11.1) 2,842,800 68% 10.2 2,632,800 68% 10.2 5,674,800 52MFSL 55% (2.0) 2,602,000 70% (0.6) 1,252,000 70% (0.6) 2,985,000 48BAJAJFINSV 60% (7.5) 407,375 57% 10.7 194,625 57% 10.7 253,125 42CANFINHOME 64% (7.0) 440,750 65% (8.1) 234,250 65% (8.1) 431,750 31CHOLAFIN 52% (9.7) 267,000 49% 3.0 145,500 49% 3.0 141,500 41ICICIPRULI 48% (8.5) 2,891,200 54% (5.3) 2,210,000 54% (5.3) 2,640,300 24MANAPPURAM 56% (0.7) 19,416,000 63% (10.4) 10,980,000 63% (10.4) 18,702,000 30REPCOHOME 37% (7.6) 393,400 63% (17.2) 275,800 63% (17.2) 463,400 2SREINFRA 49% (17.8) 5,285,000 52% (1.0) 4,665,000 52% (1.0) 5,135,000 22SectorAverage 57% 283,090,025 57% 188,946,975 57% 249,921,175 ‐ ‐Capitalgoods&Engineering ‐BHEL 52% (2.4) 18,740,000 52% (11.3) 15,030,000 52% (11.3) 16,270,000 40CROMPGREAV 48% (4.0) 13,560,000 46% (6.4) 10,296,000 46% (6.4) 8,904,000 ‐LT 69% (0.1) 7,299,750 50% (3.5) 4,771,500 50% (3.5) 4,690,500 11SIEMENS 61% (4.4) 548,000 56% (7.9) 269,000 56% (7.9) 338,500 27VOLTAS 49% (2.4) 1,528,000 36% 5.1 2,280,000 36% 5.1 1,284,000 ‐HAVELLS 54% (2.0) 1,822,000 57% 5.4 1,276,000 57% 5.4 1,690,000 15ENGINERSIN 53% (3.5) 6,100,500 55% (4.1) 4,907,000 55% (4.1) 5,890,500 33BEL 42% (7.5) 6,372,000 37% 9.0 10,246,500 37% 9.0 6,012,000 79BEML 56% (5.1) 1,311,600 51% 4.7 1,053,000 51% 4.7 1,106,400 30CUMMINSIND 40% (3.0) 264,000 46% (6.4) 352,800 46% (6.4) 297,600 ‐



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VGUARD 47% (3.0) 1,203,000 52% (3.1) 1,209,000 52% (3.1) 1,311,000 4SectorAverage 51% 58,748,850 48% 51,690,800 48% 47,794,500 ‐ ‐Cement ‐ACC 60% (12.2) 1,329,200 56% 6.2 580,000 56% 6.2 746,400 22AMBUJACEM 50% (6.7) 7,145,000 48% 5.7 5,730,000 48% 5.7 5,352,500 22GRASIM 63% (5.4) 2,598,000 58% 10.0 1,053,750 58% 10.0 1,447,500 35INDIACEM 56% (4.6) 14,098,000 58% (18.1) 11,130,000 58% (18.1) 15,445,500 47ULTRACEMCO 72% (5.0) 928,600 59% (1.7) 599,400 59% (1.7) 848,600 32DALMIABHA 63% (4.0) 389,400 59% 3.5 324,300 59% 3.5 467,400 65SHREECEM 51% 1.2 16,550 50% 1.0 13,900 50% 1.0 13,700 28RAMCOCEM 42% (0.3) 189,600 52% 3.8 328,800 52% 3.8 354,400 ‐SectorAverage 56% 26,504,750 56% 19,431,350 56% 24,321,600 ‐ ‐Fertilizers&Chemicals ‐TATACHEM 56% 5.3 3,241,500 55% (5.6) 2,049,000 55% (5.6) 2,554,500 63UPL 47% (8.0) 4,357,200 62% (4.0) 2,002,800 62% (4.0) 3,298,800 33KSCL 66% (7.4) 2,766,000 69% (17.0) 1,170,000 69% (17.0) 2,616,000 17GSFC 55% (11.8) 9,288,000 67% 5.9 6,183,000 67% 5.9 12,645,000 53SectorAverage 54% 19,652,700 154% 5,221,800 154% 21,114,300 ‐ ‐FMCG ‐COLPAL 51% (3.8) 823,900 54% 3.8 499,100 54% 3.8 583,100 20DABUR 74% (2.7) 10,112,500 80% 2.7 2,692,500 80% 2.7 11,045,000 ‐HINDUNILVR 56% 0.4 5,383,800 67% 3.4 2,986,800 67% 3.4 6,193,200 13ITC 55% (8.1) 32,918,400 41% (4.1) 26,109,600 41% (4.1) 18,314,400 40TATAGLOBAL 64% 0.7 18,544,500 65% 14.3 11,722,500 65% 14.3 22,153,500 65TITAN 46% (3.7) 2,253,000 34% 13.7 3,211,500 34% 13.7 1,633,500 29BATAINDIA 52% (1.0) 1,010,900 42% 17.4 1,537,800 42% 17.4 1,093,400 113JUBLFOOD 50% (0.7) 1,085,000 42% 6.6 1,109,500 42% 6.6 820,000 ‐BRITANNIA 33% 1.4 183,800 35% 10.2 297,600 35% 10.2 161,400 35MARICO 54% (0.2) 2,665,000 46% (3.6) 2,626,000 46% (3.6) 2,217,800 22PIDILITIND 62% (6.5) 727,000 41% 3.4 535,000 41% 3.4 377,000 42ASIANPAINT 55% 0.8 1,825,800 52% 1.5 1,526,400 52% 1.5 1,669,800 5



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UBL 50% 2.6 431,900 48% (2.0) 397,600 48% (2.0) 361,900 45MCDOWELL‐N 63% (5.9) 1,217,750 61% (0.9) 740,000 61% (0.9) 1,135,000 63PCJEWELLER 64% (7.3) 5,883,000 67% 41.7 2,463,000 67% 41.7 4,893,000 15BERGEPAINT 45% 0.5 1,040,600 57% (4.8) 732,600 57% (4.8) 974,600 27GODFRYPHLP 40% (4.6) 223,000 47% (10.3) 324,500 47% (10.3) 291,000 46NESTLEIND 50% 0.7 49,900 57% 3.5 58,600 57% 3.5 77,800 27KAJARIACER 53% (1.3) 467,200 42% 8.6 330,400 42% 8.6 240,000 18SectorAverage 59% 86,379,750 55% 59,570,600 55% 73,995,400 ‐ ‐IT ‐HCLTECH 61% 3.0 4,353,300 71% (4.8) 1,874,600 71% (4.8) 4,597,600 3OFSS 46% 3.5 24,000 54% (5.2) 34,500 54% (5.2) 40,950 101INFY 65% (2.9) 27,542,000 65% (6.8) 14,642,500 65% (6.8) 26,762,500 33TCS 74% 0.6 4,646,000 75% (2.9) 1,513,250 75% (2.9) 4,461,750 5TECHM 61% 5.7 7,498,700 60% 11.9 3,969,900 60% 11.9 5,963,100 22WIPRO 76% (1.1) 26,460,000 56% 0.6 11,376,000 56% 0.6 14,474,400 ‐HEXAWARE 43% (4.7) 969,000 40% 6.7 1,287,000 40% 6.7 873,000 10MINDTREE 64% (0.6) 2,722,800 69% (3.9) 1,323,600 69% (3.9) 2,880,000 13KPIT 54% 1.7 6,048,000 54% (8.4) 5,228,000 54% (8.4) 6,088,000 50NIITECH 28% 4.2 250,500 64% (4.0) 423,000 64% (4.0) 736,500 ‐TATAELXSI 49% (2.5) 784,000 52% (1.1) 493,200 52% (1.1) 536,400 35INFIBEAM 88% (15.3) 39,472,000 67% 6.8 1,581,600 67% 6.8 3,253,600 1SectorAverage 72% 120,770,300 62% 43,747,150 62% 70,667,800 ‐ ‐Infrastructure ‐GMRINFRA 43% (7.3) 167,400,000 45% (10.4) 171,180,000 45% (10.4) 141,210,000 21ADANIPORTS 45% (4.6) 3,365,000 50% (0.4) 4,052,500 50% (0.4) 4,062,500 16IRB 57% (3.3) 10,652,500 66% (0.5) 6,287,500 66% (0.5) 12,360,000 55NCC 46% (4.1) 12,320,000 49% (5.8) 11,824,000 49% (5.8) 11,184,000 49HCC 56% (7.1) 16,104,000 52% (17.6) 11,880,000 52% (17.6) 12,912,000 32SectorAverage 44% 193,737,500 47% 193,344,000 47% 168,816,500 ‐ ‐Construction ‐DLF 51% (12.2) 22,160,000 62% (6.6) 17,115,000 62% (6.6) 28,340,000 30



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HDIL 53% (13.0) 18,752,000 53% (27.9) 12,816,000 53% (27.9) 14,712,000 39IBREALEST 74% (11.3) 29,010,000 75% 2.5 9,840,000 75% 2.5 29,240,000 37JPASSOCIAT 50% (35.1) 104,856,000 64% (17.4) 76,432,000 64% (17.4) 135,048,000 20GODREJIND 55% (7.6) 1,776,000 51% (8.2) 1,222,500 51% (8.2) 1,294,500 28NBCC 63% 0.4 2,154,000 50% (2.0) 1,668,000 50% (2.0) 1,671,000 40SectorAverage 53% 178,708,000 64% 119,093,500 64% 210,305,500 ‐ ‐Media&Entertainment ‐DISHTV 53% (7.1) 8,946,000 42% 1.0 10,367,000 42% 1.0 7,539,000 15SUNTV 56% 5.9 3,569,000 62% (12.8) 2,853,000 62% (12.8) 4,577,000 59ZEEL 52% 0.7 2,866,500 30% (2.1) 4,732,000 30% (2.1) 2,039,700 68TV18BRDCST 54% 3.4 54,842,000 63% (8.8) 34,527,000 63% (8.8) 58,497,000 44SectorAverage 54% 70,223,500 58% 52,479,000 58% 72,652,700 ‐ ‐Metals ‐HINDALCO 42% (1.1) 15,484,000 34% 6.8 26,733,000 34% 6.8 13,639,500 25HINDZINC 52% (0.5) 4,806,400 61% 3.7 4,473,600 61% 3.7 6,931,200 77JINDALSTEL 44% (2.5) 17,122,500 56% (9.5) 17,725,500 56% (9.5) 22,896,000 36JSWSTEEL 76% (8.4) 41,217,000 69% 18.0 17,265,000 69% 18.0 38,472,000 53SAIL 56% (12.3) 42,168,000 67% (3.4) 18,372,000 67% (3.4) 37,812,000 2VEDL 59% 1.7 28,392,000 56% 8.7 21,224,000 56% 8.7 26,936,000 34TATASTEEL 53% 1.4 13,662,000 60% 13.0 9,598,000 60% 13.0 14,474,000 38NMDC 56% (6.5) 17,592,000 67% 2.1 8,970,000 67% 2.1 17,940,000 27COALINDIA 54% 7.9 12,574,900 51% (7.4) 14,708,400 51% (7.4) 15,570,300 28NATIONALUM 53% 7.5 11,160,000 48% (1.8) 5,512,000 48% (1.8) 5,104,000 19SectorAverage 56% 193,018,800 58% 139,069,500 58% 194,671,000 ‐ ‐Oil&Gas ‐GAIL 66% 5.5 7,862,000 67% 0.7 3,274,000 67% 0.7 6,550,000 4ONGC 65% 7.4 31,110,000 54% (3.4) 26,478,750 54% (3.4) 31,327,500 43PETRONET 62% (0.2) 8,361,000 58% 8.7 4,605,000 58% 8.7 6,330,000 45RELIANCE 64% 2.4 25,858,000 55% (3.7) 7,526,500 55% (3.7) 9,239,000 6BPCL 53% (10.5) 8,411,400 51% 10.3 6,832,800 51% 10.3 7,156,800 3HINDPETRO 69% (13.7) 19,552,050 57% 30.6 12,058,200 57% 30.6 16,211,475 10



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IOC 63% (12.5) 11,317,500 59% 20.9 8,124,000 59% 20.9 11,596,500 9IGL 53% 12.1 671,550 51% 10.9 503,800 51% 10.9 515,350 44OIL 46% 19.6 1,438,910 63% 3.5 663,938 63% 3.5 1,121,670 19CASTROLIND 66% (7.5) 6,554,800 78% (4.6) 2,115,400 78% (4.6) 7,565,600 59MGL 46% 2.3 369,000 54% 6.1 316,200 54% 6.1 370,200 31MRPL 58% (8.5) 4,243,500 44% 9.1 4,779,000 44% 9.1 3,789,000 42CHENNPETRO 46% (9.0) 1,261,500 61% 11.0 940,500 61% 11.0 1,474,500 12SectorAverage 63% (7.5) 127,011,210 57% 78,218,088 57% 103,247,595 ‐ ‐Pharma ‐AUROPHARMA 69% (6.3) 11,565,600 67% (1.5) 4,775,200 67% (1.5) 9,581,600 41BIOCON 66% (1.9) 6,444,000 62% (14.9) 4,120,200 62% (14.9) 6,768,000 1CIPLA 41% 0.5 3,336,000 38% (1.5) 5,247,000 38% (1.5) 3,153,000 22DIVISLAB 44% 21.0 3,095,200 75% 3.6 1,895,200 75% 3.6 5,613,600 42DRREDDY 58% 13.0 2,231,200 44% (24.5) 2,652,800 44% (24.5) 2,118,200 34LUPIN 56% 1.2 4,358,800 52% (12.2) 3,864,000 52% (12.2) 4,137,200 37SUNPHARMA 71% 2.0 28,033,600 65% (16.3) 14,232,000 65% (16.3) 26,792,000 30GLENMARK 69% (2.4) 4,351,900 77% (12.9) 1,428,700 77% (12.9) 4,750,900 37WOCKPHARMA 61% (1.8) 1,772,800 57% (1.8) 1,431,200 57% (1.8) 1,922,400 38STAR 58% (3.5) 1,353,000 76% (16.4) 513,500 76% (16.4) 1,589,000 42AJANTPHARM 53% (4.3) 496,000 57% (16.8) 278,000 57% (16.8) 361,600 15CADILAHC 44% (10.0) 1,582,400 45% (7.9) 1,352,000 45% (7.9) 1,113,600 33GRANULES 45% (10.1) 6,670,000 58% (9.5) 5,150,000 58% (9.5) 7,055,000 18TORNTPHARM 52% 0.6 141,600 42% (5.2) 156,800 42% (5.2) 114,000 8PEL 55% (4.1) 644,100 56% (6.6) 351,300 56% (6.6) 452,100 22SectorAverage 61% (10.0) 76,076,200 61% 47,447,900 61% 75,522,200 ‐ ‐Power ‐CESC 47% (3.4) 2,690,600 67% 13.8 2,181,300 67% 13.8 4,500,100 44NTPC 52% (1.3) 13,084,000 31% 0.4 42,048,000 31% 0.4 18,996,000 30POWERGRID 42% (3.7) 6,272,000 37% (0.6) 8,016,000 37% (0.6) 4,612,000 12PTC 46% 1.7 7,440,000 58% (1.0) 5,856,000 58% (1.0) 7,960,000 26RECLTD 60% (8.7) 27,720,000 69% (5.5) 10,860,000 69% (5.5) 24,732,000 9RELINFRA 57% (8.6) 6,453,200 68% (0.6) 3,166,800 68% (0.6) 6,685,900 43



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JSWENERGY 58% 3.3 35,368,500 70% (1.6) 20,026,000 70% (1.6) 45,755,500 23RPOWER 68% 1.6 43,848,000 65% (9.0) 22,500,000 65% (9.0) 41,208,000 45TATAPOWER 47% 0.5 20,034,000 58% (6.2) 13,275,000 58% (6.2) 18,234,000 27ADANIPOWER 65% (8.6) 81,960,000 70% (8.8) 33,500,000 70% (8.8) 79,360,000 11NHPC 53% (7.9) 20,169,000 58% (5.0) 10,827,000 58% (5.0) 15,012,000 22TORNTPOWER 46% (1.0) 3,120,000 62% 18.3 2,535,000 62% 18.3 4,131,000 ‐SUZLON 46% (3.9) 233,730,000 47% (13.6) 278,040,000 47% (13.6) 243,900,000 22SectorAverage 52% (7.9) 501,889,300 53% ‐ 452,831,100 53% 515,086,500 ‐ ‐Textile ‐ARVIND 56% (0.5) 4,266,000 48% (0.6) 3,136,000 48% (0.6) 2,906,000 25PAGEIND 32% 5.4 8,100 48% 4.8 15,400 48% 4.8 14,300 70SRF 53% 2.8 348,500 57% (5.0) 296,500 57% (5.0) 396,000 10ICIL 54% (16.6) 5,677,000 64% (26.4) 4,056,500 64% (26.4) 7,287,000 10RAYMOND 69% 3.0 2,412,800 65% (5.1) 722,400 65% (5.1) 1,360,800 25SectorAverage 57% 2.8 12,712,400 59% ‐ 8,226,800 59% 11,964,100 ‐ Telecom ‐BHARTIARTL 81% (10.0) 21,290,800 71% 0.6 8,809,400 71% 0.6 21,253,400 0IDEA 51% (14.1) 32,172,000 38% (6.9) 34,636,000 38% (6.9) 21,525,000 17RCOM 56% (15.9) 75,586,000 72% (11.8) 30,786,000 72% (11.8) 77,252,000 17TATACOMM 52% 2.2 4,097,100 71% (3.8) 2,637,600 71% (3.8) 6,526,100 45INFRATEL 65% (0.5) 3,974,600 18% (6.9) 9,069,500 18% (6.9) 2,050,200 14SectorAverage 58% (0.5) 137,120,500 60% ‐ 85,938,500 60% 128,606,700 ‐ ‐Others CENTURYTEX 71% 0.3 5,224,450 76% 2.5 1,894,750 76% 2.5 5,992,250 60ASIANPAINT 55% 0.8 1,825,800 52% 1.5 1,526,400 52% 1.5 1,669,800 5ADANIENT 55% (10.7) 17,272,000 63% (9.1) 11,064,000 63% (9.1) 18,800,000 8APOLLOTYRE 48% (2.8) 5,322,000 60% (6.6) 4,440,000 60% (6.6) 6,660,000 70JISLJALEQS 63% (3.4) 25,668,000 66% (9.8) 12,915,000 66% (9.8) 24,966,000 28MRF 58% (2.0) 32,835 54% (10.2) 24,090 54% (10.2) 28,380 47UBL 50% 2.6 431,900 48% (2.0) 397,600 48% (2.0) 361,900 45APOLLOHOSP 40% (7.8) 631,500 58% (15.4) 666,500 58% (15.4) 932,500 7



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%pricechgeoe

No.ofsharesrolled

JUSTDIAL 55% (1.9) 2,523,600 22% 1.3 3,272,400 22% 1.3 914,400 18CEATLTD 49% 0.2 931,700 44% (11.4) 973,700 44% (11.4) 759,500 4JETAIRWAYS 48% (16.1) 2,414,400 59% (4.3) 1,555,200 59% (4.3) 2,248,800 22CONCOR 50% (3.7) 659,375 58% 11.8 496,250 58% 11.8 672,500 16RNAVAL 53% (2.3) 7,452,000 1% (12.6) 8,676,000 1% (12.6) 72,000 ‐PVR 37% (10.4) 307,600 35% (3.4) 427,600 35% (3.4) 226,800 40INDIGO 54% (11.7) 1,792,200 56% (3.1) 762,000 56% (3.1) 957,600 8BALKRISIND 62% 7.2 320,800 62% (3.7) 211,200 62% (3.7) 350,000 49BALRAMCHIN 51% (3.2) 6,114,500 65% 5.9 4,515,000 65% 5.9 8,379,000 10FORTIS 66% (5.9) 27,108,000 73% (7.5) 11,191,500 73% (7.5) 29,762,100 47MCX 47% (3.1) 548,500 47% (7.4) 677,000 47% (7.4) 606,000 62SectorAverage 59% ‐ 106,581,160 61% ‐ 65,686,190 61% ‐ 104,359,530 ‐ ‐StockTotal 55% 2,826,507,623 56% 2,058,168,781 56% 2,591,502,244 ‐GrandTotal 55% 2,839,687,948 56% 2,076,338,286 56% 2,602,669,799 ‐Source:IIFLResearch,Bloomberg,NSE

Technical Track

Thecurrentequitycarnageremindsusofthefamousadage:Itneverrainsbutitpours.Mumbaistreetsfacedthewrathofharshweatherinthelastfewweeks.A4.5%fallfromthepeakof10179inamatterofseventradingsessions hasmimicked the fall of August 2017. InWednesday’s trade,Nifty completed theAB=CDpattern and, in the process, fell below the9750mark,itformedlargebearishbeltholdcandle(identicalopen&highwithclosenearday’slow).Peakofsuchpatternusuallyactsasahurdlepoint.Moreover,pointofpolarityandthree‐digitgannnumberisplacedat 993(0). So, a break above 9930 is essential to void its negativeimplications.Thecurrentdeclinehasbroughttheindextoaconfluenceofsupportzonewitha)Pointofpolarityaround9700B)Four‐digitgannnumberof9703C)A360degreemovefromall‐timehighplacedaround9770andD).PriorAugustlowof9685.So,onlyabreakbelow9680wouldbreaktheseriesofrisinglows(inplacesincetheyear'sstart). Fund action Westbridge Crossover Fund LLC sold ~0.9mn shares of Kajaria

CeramicsatRs720 Leaders Laggards

CompanyCMP(Rs)

52‐wkhigh

Deviation% Company

CMP(Rs)

52‐wkLow

Deviation%

BharatFo. 1,217 645 88.7 Videocon 16 16 0.0BHEL 125 122 2.6 ApolloH. 1,006 998 (0.8) P&G 8,392 8,500 (1.3) AjantaPh. 1,145 1,135 (0.9) BEL 177 181 (2.2) Crisil 1,803 1,785 (1.0)Britannia 4,302 4,409 (2.4) AmaraRaj. 711 697 (2.0)

*Basedondeviationfrom52‐weekhigh/low

Proximity to 20-DMA Proximity to 50-DMA

CompanyCMP(Rs)

20‐DMA

Deviation% Company

CMP(Rs)

50‐DMA

Deviation%

BharatFo. 1,217 602 102.2 BharatFo. 1,217 587 107.3BHEL 125 87 43.7 OIL 351 298 17.8IpcaLabs 497 473 5.1 Divis Lab 851 731 16.4Divis Lab 851 820 3.8 IGL 1,409 1,281 10.0ABB 1,440 1,393 3.4 Rajesh Exp. 790 731 8.1

*Basedondeviationfrommovingaverages

High delivery stocks Low delivery stocks

Company%

DeliveryCMP(Rs)

%chg Company

%Delivery

CMP(Rs) %chg

HDFCBank 100.0 1,777 (0.9) JetAirways 9.0 470 (2.5)Redington 90.0 149 (1.6) CanaraBank 11.0 318 (3.0)HCLTech 80.0 875 0.1 GMRInfra 12.0 16 (3.6)Emami 79.0 1,092 (0.2) DivisLab 13.0 851 (11.4)InfoEdge 78.0 1,029 (3.0) CenturyTex. 14.0 1,220 (3.0)

Spurt in volumes

Company(mn) Day'sVol.2‐weekAvg.

Vol 10‐DMA CMP(Rs) %chgGMRInfra 30 25 17 16 (3.6)ICICIBank 18 15 286 276 (2.2)SBI 17 13 265 250 (3.0)ITC 18 13 267 259 (1.5)JSWEnergy 16 13 76 69 (5.7)

Index PivotIndex Lastclose Support Pivot ResistanceNifty 9,736 9,659 9,790 9,866Sensex 31,160 30,909 31,353 31,605NiftyBank 23,813 23,610 23,971 24,175NiftyIT 10,544 10,511 10,549 10,582

Intra-day advance decline Sectoral trend

50

350

650

950

1,250

1,550

09:15 11:20 13:25 15:30

Advance Decline

(5.9)(4.1)(3.6)(3.3)(3.2)(3.2)(3.2)(3.1)(3.0)(2.8)

(0.5)

(7.5) (5.5) (3.5) (1.5) 0.5

RealtyInfraMediaBankMetal

FinServicesPharmaEnergyFMCGAutoIT

(%)

*Calculationsbasedon10‐DMA

Derivatives Diary

Index snapshot

Futures %Chg Spot BasisNext

Month OIinshs OI%Chg PCROI PCRVol ATMIV's RolloversMaxcallbuild‐up

Maxputbuild‐up

Nifty 9,740 (1.3) 9,736 4.00 9,772 189,700 (24.0) 1.00 0.90 12.3 46.0% 9,900 9,700BankNifty 23,830 (1.6) 23,813 17.00 23,872 37,331 (21.9) 0.67 0.89 13.6 41.6% 24,500 24,000

Niftycontinued its sharpselloff leadbyrelentless sellingpressure

fromFII’s.SGXNiftyindicatesmildnegativestartfortheday.

OptionswritersscramblingacrossthestrikestocoverthepositionsasexpiryweekselloffleadtomassiveunwindingonITMputsandcallwritingacrossOTMstrikes.

RolloversforD‐1daysonNifty/BankNiftystoodat46/41.5%higherthancomparedtopreviousmonth.

FII’s index futures long/short ratio nowbelow .99x vs 1.02xwithmassiveputlongsandcallswritingseen.

Nifty open interest distribution

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

9100

9200

9300

9400

9500

9600

9700

9800

9900

10000

10100

10200

10300

10400

(mn) Call Put

Securities in ban period: Dhfl, Ibrealest, Gmrinfra, Dlf, Jpassociat,Jswenergy,Rcom

Futures open interest gainersScrip OI(lacs) %OIChg CMP(Rs) %Chg ActionSiemens 9 26.4 1,222 (7.8) ShortBuildupBharatforg 96 17.8 1,219 91.4 LongBuildupGmrinfra 3,861 11.2 16 (5.9) ShortBuildupCanbk 116 8.4 318 (3.0) ShortBuildupIrb 186 7.4 206 (1.9) ShortBuildupAcc 22 6.9 1,592 (2.5) ShortBuildupUpl 94 6.5 773 (1.0) ShortBuildupFutures open interest losersScrip OI(lacs) %OIChg CMP(Rs) %Chg ActionUbl 9 (13.1) 823 (3.1) LongUnwindingSrtransfin 43 (11.4) 1,047 3.9 ShortCoveringNtpc 251 (11.2) 165 (1.2) LongUnwindingRelcapital 91 (10.0) 586 (5.5) LongUnwindingTatachem 58 (9.5) 622 (0.6) LongUnwindingBel 165 (8.7) 177 6.6 ShortCoveringBataindia 19 (8.6) 681 (1.3) LongUnwindingFIIsderivativeactivityTradingturnover IndexFut* StockFut* IndexCalls* IndexPuts*FIIs (4,406) 8,303 (13,373) 23,614DIIs 26 2,396 0 784

Prop 1,610 (587) (52,070) 22,846HNIClients 2,770 (10,112) 65,443 (47,244)

*Noofcontracts

Commodities & Currencies Cues

Commodities Goldpricesmovedfurtherlower,dentedbygrowingnarrativeofrisinginterest rates inUSandstrongergreenback.Moreover, relativelyquietsituationonNorthKoreanfronthasalsodilutedthebuyingappetiteinthepreciouspack.Oilfuturesscaledlower,witnessingboutofprofittakingafterasharpriseduring past few trading sessions. Nevertheless, the complex remainsunderpinnedbyTurkey'sthreatofshuttingdownitsportforoilexportsfrom Kurdistan region in light of Kurds overwhelming voting forindependencefromIraqduringtherecentlyconductedreferendum.Non‐ferrouspackremainsunderpinnedbyChina’sresolveandtargetedmeasures to combat pollution and curtail output in various metals.However,questionremainsonthesustainabilityoftheseproductioncuts. FX USdollar’strajectoryisreminiscentofaPhoenixrisingfromtheashes.Afteramulti‐month lowagainst thebasketof currencies, greenback isnowsoaringinthewakeofTrumpadministrationandfellowRepublicansaccentuatingfocusontaxreforms.Disappointmentoverfailedoverhaulofhealthcarebill isnomorea fretting themarkets. Investors arenowlooking forward to much anticipated and more important legislativeissues like tax cuts. Apparently, the tax reformswill encompass lowerincome taxes for corporates andbusinessesand.The taxproposalwillalsosimplifythetaxcodes,consolidatingtheexistingseventaxbracketsinto threeof 12%, 25%and35%.Tax cuts is expected to significantlyincrease the fiscal deficit and compel Fed to aggressively normalisepolicy. In credit markets, rising bond yields and interest rate futuresconveythataratehikeinDecemberisalmostacertainty.ItisestimatedthatlowertaxeswillreducefederalrevenuebyUS$5‐6trillionoverthenext ten years. However, there is an argument that resulting highereconomicgrowthwillfacilitatehigherrevenuesandbridgethefiscalgap.

Commodities(US$terms)

LastPrice

%chg1d

%chgytd Currencies

Lastprice

%chg1d

%chgytd

Gold(troyoz) 1,283 0.0 11.8 USD/INR 65.70 0.0 3.4Silver(troyoz) 16.8 0.0 5.3 EUR/INR 77.10 0.0 (7.1) Copper(MT) 6,459 0.3 16.7 GBP/INR 88.10 0.0 (5.3) Aluminium(MT) 2,135 0.1 26.1 JPY/INR 0.58 0.5 (0.2)

Zinc(MT) 3,125 0.6 21.3 EUR/USD 1.17 0.0 11.6Lead(MT) 2,475 0.5 22.7 GBP/USD 1.34 0.0 8.5Nickel(MT) 10,330 0.9 3.1 USD/JPY 112.90 0.0 3.6WTICrude(bbl) 52.0 (0.3) (3.2) USD/CNY 6.65 0.0 4.4

Br.Crude(bbl) 57.7 (0.4) 1.5 USD/Real 3.19 (1.0) 1.9NG(mmBtu) 3.10 (0.2) (17.9) USDIndex 93.50 0.0 (8.5)

CommodityDynamics Latest Weekago 1mago 6mago 1yragoSPDRGoldETF(tonnes) 865 846 805 835 949iSharesSilverETF(mnoz) 327 325 333 334 363LMECuStocks('000MT) 302 314 241 311 371LMEAlStocks('000MT) 1,280 1,304 1,322 1,936 2,126LMEZnStocks('000MT) 259 266 246 375 441LMEPbStocks('000MT) 158 163 148 190 191LMENiStocks('000MT) 385 381 387 382 362USCrudestocks(mnbbl) 471 473 463 533 474USOilRigCount 744 749 763 631 416

Commodity v/s Currency Speculative positions on CME

91

93

95

97

99

101

103

160

170

180

190

200

Apr‐17

Apr‐17

May‐17

Jun‐17

Jul‐17

Aug‐17

Aug‐17

Sep‐17

CRBIndex(LHS)DollarIndex(RHS)

(100)

0

100

200

300

400

Apr‐17

Apr‐17

May‐17

Jun‐17

Jul‐17

Aug‐17

Sep‐17

('000lots)

Gold SilverCopper Crude

Allocation & View – Assets & Sectors

Strategic and Tactical Asset Allocations across Model Portfolios StrategicAssetAllocation(SAA)isthelongtermassetallocationstrategyfor a client that is arrived at on the basis of risk assessment andinvestment objectives. There are fivemodel portfolios that have assetallocationstosuitdifferentriskprofiles.Themodelportfolioshavebeenoptimized using historical risk and returns across asset classes. Everymonth the IIFLW investment Committee formalizes monthly tacticalviewsonthemarketsandtheirimpactonvariousassetclasses.TacticalviewsoneachassetarewithaoneyeartimehorizonandTacticalAsset Allocation (TAA) is a +/‐ 5%‐10% change to a Client’s broaderStrategicAssetAllocation.

Asset Class View AssetClass TacticalView

FixedIncome NeutralEquity OverweightRealEstate NeutralUSDollar NeutralGold UnderweightLiquidAssets UnderweightSector View for listed equities Sector WeightAgriculture OverweightAutomobile NeutralCapitalGoods‐BTG UnderweightCapitalGoods–T&D OverweightCement UnderweightConsumerDiscretionary OverweightHousingfinance OverweightMFI's NeutralPrivateBank OverweightPSUBank NeutralFMCG NeutralInfrastructure OverweightIT UnderweightMetals&Mining NeutralOil&GasE&P NeutralOilMarketing NeutralGasUtilities NeutralPharma UnderweightTelecom UnderweightPowerUtilities Neutral

Asset Allocation

ModelPortoliosConservative Balanced Aggressive

(%) (%) (%)AssetAllocations SAA TAA SAA TAA SAA TAAEquity 14 14 49 49 76 76FixedIncome 76 76 40 46 8 20RealEstate 0 0 5 0 10 0Alternatives 5 0 5 0 5 0LiquidAssets 5 10 1 5 1 4Total 100 100 100 100 100 100

SAA–StrategicAssetAllocation;TAA–TacticalAssetAllocationSource:IIFLResearch

IIFL Wealth Research bags 2 Best Analyst Awards

IIFLWealthResearchhasbaggedtwoprestigiousawardsattheZeeBusinessMarketExcellenceAwards2016.

PrayeshJainwasconferredtheBestAnalystAwardforAutosectorandBhaveshGandhibaggedtheBestAnalystAwardforPharmasector.

Besidesthetwinawards,IIFLWealthResearchwasalsonominatedinthecategoriesofOil/Gas,BankingandIndustrials.

IIFLWealthResearch,asyouknow,hasalwaysprideditselfonitsuniquevaluepropositioninaswarmingmarketspaceofcut‐throatcompetition,amongotherthings,onourwealthofactionableideas,tailoredportfolioapproachandthoroughresearchinlinewithclientneedsandpriorities,distinctivepracticeoffollowingupwithCallSuccesspostrecommendationsandavastcoverageuniverseofasmanyas300companies(comprising70%ofIndia'sequitymcap).

Inthepast,theresearchteamhaswonZeeBizAwardsunderdifferentcategories;Bloomberghasratedourresearchasthemostaccurate,whilewehavetwicebeenwinnersofBusinessStandardSmartPortfolios,havingreceivedawardsatthehandsofluminariesincludingPresidentPranabMukherjee,PrimeMinisterNarendraModiandMinisterofStatePiyushGoyal.

Recommendation parameters for fundamental reports:

Buy=>15%+

Accumulate=5%to15%

Reduce=‐10%to5%

Sell=>‐10%

ABOUT IIFL Wealth Management Limited IIFLWealthManagementLimited(hereinafterreferredasIIFLW),aCompanyincorporatedunderCompaniesAct,1956,isregisteredwithSEBIasPortfolioManagerandasaStockBroker.IIFLWisalsoregisteredwithAMFIasadistributorofmutualfunds.IIFLWprovideswealthmanagementservicestovariousHNI/UltraHNIclientsandinteraliadistributesvarioussecuritiesandfinancialproducts,includingmutualfunds,alternativeinvestmentfunds,debenturesandstructuredproducts.IIFLWhasmadenecessaryapplicationforregisteringitselfasaDepositoryParticipant.Contact Details -CorporateOffice–IIFLCentre,KamalaCity,SenapatiBapatMarg,LowerParel,Mumbai–400013,Regd.Office–IIFLWHouse,SunInfotechPark,RoadNo.16V,PlotNo.B‐23,MIDC,ThaneIndustrialArea,WagleEstate,Thane–400604Tel:(91‐22)39585600.Fax:(91‐22)46464706E‐mail:[email protected]:www.iiflw.com.Registration Details - 1]CINNo.:U74140MH2008PLC177884;2]SEBIPMSRegn.NoINP000002676:3]NationalStockExchangeofIndiaLtd.SEBIRegn.No.:INZ000011437,BombayStockExchangeLtd.SEBIRegn.No.:INZ0000114374]AMFIRegnNo.:59563

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(a)receivedanycompensation(exceptinconnectionwiththepreparationofthisReport)fromthesubjectcompanyinthepasttwelvemonths;(b)managedorco‐managedpublicofferingofsecuritiesforthesubjectcompanyinthepasttwelvemonths;(c)receivedanycompensationforinvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths;(d)receivedanycompensationforproductsorservicesotherthaninvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths;(e)engagedinmarketmakingactivityforthesubjectcompany;IIFLWanditsassociatescollectivelydonotown(intheirproprietaryposition)1%ormoreoftheequitysecuritiesofthesubjectcompany/iesmentionedinthereportasofthelastdayofthemonthprecedingthepublicationoftheresearchreportanddoesnothavematerialconflictofinterestattimeofpublicationoftheresearchreport;

i) TheResearchAnalyst/sengagedinpreparationofthisReportorhis/herdependentrelative;

(a)doesnothaveanyfinancialinterestsinthesubjectcompany/iesmentionedinthisreport;(b)doesnotown1%ormoreoftheequitysecuritiesofthesubjectcompanymentionedinthereportasofthelastdayofthemonthprecedingthepublicationoftheresearchreport;(c)doesnothaveanyothermaterialconflictofinterestatthetimeofpublicationoftheresearchreport.

j) TheResearchAnalyst/sengagedinpreparationofthisReport:‐

(a)hasnotreceivedanycompensationfromthesubjectcompanyinthepasttwelvemonths;(b)hasnotmanagedorco‐managedpublicofferingofsecuritiesforthesubjectcompanyinthepasttwelvemonths;(c)hasnotreceivedanycompensationforinvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths;(d)hasnotreceivedanycompensationforproductsorservicesotherthaninvestmentbankingormerchantbankingorbrokerageservicesfromthesubjectcompanyinthepasttwelvemonths;(e)hasnotreceivedanycompensationorotherbenefitsfromthesubjectcompanyorthirdpartyinconnectionwiththeresearchreport;(f)hasnotservedasanofficer,directororemployeeofthesubjectcompany;(g)isnotengagedinmarketmakingactivityforthesubjectcompany.

WesubmitthatnomaterialdisciplinaryactionhasbeentakenonIIFLWbyanyregulatoryauthorityimpactingEquityResearchAnalysis.Agraphofdailyclosingpricesofsecuritiesisavailableathttp://www.nseindia.com/ChartApp/install/charts/mainpage.jsp,www.bseindia.comandhttp://economictimes.indiatimes.com/markets/stocks/stock‐quotes.(Chooseacompanyfromthelistonthebrowserandselectthe“threeyears”periodinthepricechart).ForResearchrelatedqueries,writeto:AmarAmbani,[email protected].

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