IEA Report 27th March

IEA Report
27th Mar 2017

SADBHAV "Book Profit" 27th Mar 2017
Revenue growth in 9MFY17 remain subdued due to demonetization, slow execution of irrigation projects and delay in resolution of services tax
related issue at BCCL mining project. Work commencement of 3 new HAM projects will drive the revenue growth going forward. At the current
price level (2.95x P/B) we do not see much upside here on as the stock has discounted all near to mid term positive traits. We recommended this
stock at Rs. 277 for the target price of Rs. 315 and the stock has achieved our recommended target price. So we advice our investors to Book
profit at current level. .................................................... ( Page : 2-5)
KEC Part Book Profit 24th Mar 2017

Revenue growth for 9MFY17 was subdued due to lower commodity prices and demonetization. But the operating margin continues to accretive
during the same period. We expect 5% and 15% revenue growth in FY17E and FY18E respectively based on the strong traction in Transmission
and railway business with strong operating margin. We recommended this stock at Rs. 148 for the target price of Rs. 185 and the stock has
achieved our recommended target price. So we advise our investors to Book part profit at current levels and considering the lower interest outgo,
strong revenue growth in Q4FY17 and efficient working capital management, investors may HOLD Remaining for the revised target price of
Rs.217. ........................................................ ( Page : 6-10)
MARICO "BUY" 23th Mar 2017

The companys recent acquisition is small but a right step in right direction. This acquisition will expand companys product portfolio in male
grooming market and will enhance companys digital marketing capability going forward. Management is optimistic of clocking double digit
volume growth for Saffola in medium term which gives us confidence of high single to double digit overall volume growth for Marico going
forward. On margin front, management reiterated its previous guidance of 20% plus margin for domestic business and 18% for overall business.
Presently company trades at 16 times of FY17E book value with 35% of RoE. Considering improving business conditions after demonetization,
better medium term volume guidance for domestic business and expected recovery from international business going forward, we reiterate to
BUY this stock with the target price for Rs 330. ............................................................ ( Page : 11-13)
KALPATPOWER "BUY" 22th Mar 2017

Kalapatrus Standalone order book remains strong and advanced stage of an overseas project in transmission will help to register strong revenue
growth of 20% in FY17. Increasing opportunity in Railway segment can be a potential growth driver going forward for the Company. Based on
SOTP valuation method we have valued the standalone business at Rs. 260 per share and subsidiaries (JMC, SSL, Transmission BOT projects and
Development projects) at Rs. 60 per share. Hence, we recommend BUY on the stock with target price of Rs. 320.
................................................................. ( Page : 14)
EXIDEIND Part Book Profit 21th Mar 2017

We expect that managements strategy of cost control and technology up-gradation may improve the margin up to 100bps by 2017-18.
Technological innovation, segment branding and increased distribution reach along with GST implementation will help the company to gain
market share going forward. We recommended this stock at Rs.175 for a target price of Rs.220 and the stock has achieved our recommended
target. So we advise our investors to Book Part Profit at current levels and considering the future growth potential of the stock we revise our
target and recommend fresh BUY for a target price of Rs.240 and we value insurance business at Rs.19 per share.
............................................................ ( Page : 15-17)
IRB "BUY" 20th Mar 2017

IRB had filed draft red herring prospectus (DRHP) with SEBI and was waiting for SEBIs approval. Now, SEBI has given the nod and IRB is ready to
launch InvIT IPO of 4300 Cr in month of April. InvIT is near to become reality in Indian capital market as the SEBI gives a nod to IRB to launch its
Infrastructure Trust. IRB will launch it in April 2017. IRB is planning to raise Rs. 4300 Cr through InvIT IPO. The proceeds will be used for the debt
repayment and as a growth capital for the on-going and upcoming projects. Encouraging traffic growth and strong recovery in economic activity
nullified the demonetization impact in Q3FY17. Based on the strong order book, we expect EPC revenue to grow @ 12% in FYT17E and 30% in
FY18E. According to us, the launch of InvIT , robust EPC revenue growth and strong toll collection will be a growth driver for the company going
forward and hence, we maintain BUY on the stock with revised target price of Rs.285 from 265. ................................................ ( Page : 18-22)
Narnolia Securities Ltd IEA Edition No.- 982

BOOK PROFIT
SADBHAV ENG. 27-Mar-17
Sadbhav Eng. has reported strong numbers in Q3FY17; the top line grew by
Result Update 14.8% YoY to 864.8 Cr as compared to Rs. 753 Cr in Q3FY16 on back of
CMP 308 strong execution. EBITDA for the quarter stood at Rs. 94 Cr as against Rs.
Target Price 74 Cr in 3QFY16, 27% up YoY with 100 bps improvement in margin on
Previous Target Price - account of lower Employee and Other Expenses. PAT grew by 82.4% YoY
to Rs. 52 Cr vs Rs.29 Cr in same period last year. Higher 80 IA benefit led
Upside
to NIL effective tax rate for the quarter and it will be continue for the next 3
Change from Previous - quarters based on higher revenue contribution from road EPC and irrigation
projects. Order book stands at Rs. 7708 Cr at the end of Q3FY17 which
Market Data provides strong revenue visibility going forward. But slow execution pace of
BSE Code 532710 Irrigation projects and delay in resolution of mining project will be cause of
NSE Symbol SADBHAV concern going ahead.
52wk Range H/L 325/220 Highway & Road drives the revenue growth:-
Mkt Capital (Rs Cr) 5,295
Av. Volume 9580 Currently 5 EPC projects are under execution and another 3 HAM project
Nifty 9108 will come under execution in Q4FY17. 3 out of 5 HAM projects have
received appointment date and remaining two projects will receive by
February 2017 end. The company has already started work on these
Stock Performance
projects before getting appointment date and expects to book Rs.300 Cr
1Month 3 Month 1Year
(approx.) revenue in Q4FY17. The gross equity requirement for the HAM
Absolute 12.5 19.1 15.3 projects is 460 Cr. Management thrust on completion of lower margin
Rel.to Nifty 10.6 5.0 -2.7 irrigation projects but we do not witnessed speedy execution, irrigation
revenue has come down 26% YoY .The Service tax issue at BBCL projects
Share Holding Pattern-% has settled down for 2 blocks out of 3. Management is in talk with BCCLs
3QFY17 2QFY17 1QFY17 management and expects to reach resolution by March end. EPC (Road &
Irrigation) dominated revenue in H2FY17 will boost the bottom line by way of
Promoters 47% 47% 47%
80 IA tax benefit.
Public 53% 53% 53%
Others 0% 0% 0%
Outlook and Valuation
Total 100% 100% 100%
Revenue growth in 9MFY17 remain subdued due to demonetization, slow
Company Vs NIFTY execution of irrigation projects and delay in resolution of services tax
130
related issue at BCCL mining project. Work commencement of 3 new HAM
SADBHAV NIFTY
projects will drive the revenue growth going forward. At the current price
125
level (2.95x P/B) we do not see much upside here on as the stock has
120
discounted all near to mid term positive traits. We recommended this
115 stock at Rs. 277 for the target price of Rs. 315 and the stock has
110 achieved our recommended target price. So we advice our investors to
105 Book profit at current level.
100 Financials Q3FY17 Q2FY17 Q3FY16 YoY QoQ
95 Sales 865 616 753 Change
15% 40%
90 EBITDA 94 65 74 27% 45%
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Mar-16
Mar-17
Net Profit 52 19 29 79% 174%

EBIDTA% 10.8% 10.6% 9.8% 100 bps 20 bps
Sandip Jabuani PAT % 6.1% 3.0% 3.8% 230 bps 310 bps
sandip.jabuani@narnolia.com
Narnolia Securities Ltd 2

Please refer to the Disclaimers at the end of this Report
Demonetization impact on execution: NOT A MATERIAL ONE
Demonetization will not have any material impact on Sadbhavs standalone working is concerned. In concall, management has
clarified that from the raw material procurement to wages of labour and other related expense are channelized directly through
banking system. Though this currency clean up drive will surely have impact on different economic activities with different degree
in near term moving forward, management has indicated that Sadbhavs BOT business will not be spared from this, as traffic
growth may hamper.
Concall Update :-
Expect 5000-6000 Cr of new orders in FY18 from Road segment
Post demonetization toll collection is down by 1-1.15% YoY in January, but witness recovery in taffies in February
Equity requirement for 5 HAM project is 460 Cr
Company has received appointment date for 3 HAM projects in Guajarat and Puna and work will start in Q4FY17.
Mgt. expect to receive appointment date on reaming 2 HAM projects by Feb 2017
The work on BCCL project has been stopped and expect to resolve it by March end.
Loan to SIPL at the end of Q2FY17 is 300 Cr
Company has repaid mobilization advances of 109 Cr to NHAI and further looking to repay 160 Cr, which will be resulted into
increment in debt in Q4FY17
Tax rate will be remain NIL in FY17 and H1FY18 as the company enjoying 80 IA benefit
No impact of demonetization on execution of the project
Debt on Standalone books is 1400 Cr at the end of the Q3FY17.
Company expect to reduce debt post receipt of mobilization advances on HAM project around 300 Cr in Q1FY18
Segmental Order Book
BOT EPC Irrigation Minning
10,000
9,000
8,000 2,153
7,000 2,724 2,392 2,273 2,061
2,728
1,733 1,975 1,753
6,000 1,902
1,749 1,644 1,836
5,000 2,015 1,442 1,113
1,919 2,226
4,000 1,276
1,187
3,000 1,136 4,430 2,436
1,097 1,982 3,021
3,995
2,000 3,837 3,477 3,054
1,000 2,567 2,193 2,046
1,811 1,404 990 573
- 233 174 156
2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Order book Book to Bill

3.79
9,500 4.00
3.50
9,000
2.76 3.00
8,941
8,500 2.35
2.50
8,000 8,200 2.00
Maintain order Intake guidence of
7,500
1.50 Rs. 5000-7000 Cr
7,487 1.00
7,000
0.50
6,500 -
FY14 FY15 FY16

Segmental Revenue
BOT EPC Irrigation Minning Power Generation
1,200
1,000
1
2 1 1
800 2
1 166 2 1 74
204 168
600 1 201 31 100 2
189 132
138 132 160 90
35 100
400 147 72
449 648
470 461 428 424
200 374 407 402
300
111 33 42
-
Toll Collection
250
208 214
200
200
165 173
155 162
139 147
150
100
50
-
2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
EBITDA EBITDA M
120 11%
11% 11% 11% 11%
11%
100 11%
11%
80
10% 10%
10%
60 10%
9% 10%
40
9%
20
60 78 96 89 81 74 81 87 65 94
- 9%

Financials Snap Shot
INCOME STATEMENT RATIOS
FY14 FY15 FY16 FY17E FY14 FY15 FY16 FY17E
Revenue 2733 3447 3878 4487 EPS 2.9 -10.2 -2.7 3.9
Other Income 30 44 45 45 Book Value 82.4 89.6 104.8 107.9
Total Revenue 2762 3491 3922 4532 DPS 0.7 0.8 0.8 0.8
COGS 2064 2576 2730 0 Payout (incl. Div. Tax.) 24% -8% -30% 21%
GPM 1 1 1 0 Valuation(x)
Other Expenses 153 164 192 0 P/E 53.1 -15.2 -56.9 75.1
EBITDA 436 580 803 929 Price / Book Value 1.9 1.7 1.5 2.7
EBITDA Margin (%) 16% 17% 21% 21% Dividend Yield (%) 0.45% 0.53% 0.53% 0.28%
Depreciation 127 219 287 304 Profitability Ratios
EBIT 309 361 516 625 RoE 4% -11% -3% 4%
Interest 449 615 726 581 RoCE 5% 4% 5% 6%
PBT -110 -210 -165 89 Turnover Ratios
Tax -14 34 17 21 Asset Turnover (x) 0.3 0.3 0.2 0.3
Tax Rate (%) 13% -16% -10% 24% Debtors (No. of Days) 76.9 72.4 77.4 77.0
Reported PAT 44 -175 -47 67 Inventory (No. of Days) 29.0 30.2 18.9 18.9
Dividend Paid 11 14 14 0 Creditors (No. of Days) 51.8 50.1 37.5 38.0
No. of Shares 15 17 17 0 Net Debt/Equity (x) 3.88 4.07 4.49 4.25
BALANCE SHEET CASH FLOW

FY14 FY15 FY16 FY17E FY14 FY15 FY16E FY17E
Share Capital 15 17 17 17 OP/(Loss) before Tax 26 -233 -165 89
Reserves 1235 1520 1781 1848 Depreciation 130 223 287 304
Net Worth 1250 1537 1798 1865 Direct Taxes Paid 56 68 17 21
Long term Debt 4848 6256 8069 7869 Op. before WC Change 469 596 890 974
Short term Debt 468 411 601 601 CF from Op. Activity 786 385 2130 657
Deferred Tax 36 24 23 23 0 0 20 0
Total Capital Employed 6098 7793 9867 9734 Capex 225 158 7300 1417
Net Fixed Assets 6007 9598 13527 11805 CF from Inv. Activity (1441) (1357) 9330 1417
Capital WIP 1 1 0 1 Repayment of LTB 0 0 0 0
Debtors 576 684 822 951 Interest Paid 455 615 726 581
Cash & Bank Balances 128 205 126 0 Divd Paid (incl Tax) 11 13 14 0
Trade payables 388 473 399 461 CF from Fin. Activity 706 1037 1580 (781)
Total Provisions 174 271 357 332 Inc/(Dec) in Cash 52 64 13041 1294
Net Current Assets 548 760 477 435 Add: Opening Balance 58 110 205 126
Total Assets 7871 11933 15809 14132 Closing Balance 110 174 13245 1420

BOOK PART PROFIT
KEC International 24-Mar-17
Result Update
CMP 190 KEC has reduced gross debt by Rs. 562 Cr as compared to March 2016
Target Price 217 level backed by better Working capital management especially account
Previous Target Price 185 receivables. Account Receivables days went down from 246 days at the end
Upside 14% of March to 218 days at the end of Q3FY17 and further management has
guided to bring it down to 180 days level by the year end. The continuous
Change from Previous 17%
effort on improvement of working capital requirement will result into lower
interest outgo going forward. Management has guided that interest cost in
Market Data FY18 will be around 2.5% of sales as compare to 3.3% of sales in 9MFY17.
BSE Code 532714 Recently, KEC has won orders worth of Rs. 1943 Cr in transmission (1408
NSE Symbol KEC Cr), EHV Cables (85 Cr) and Solar (450 Cr), which will further strengthen its
52wk Range H/L 156/97 order book position.
Mkt Capital (Rs Cr) 4,900
Av. Volume 107057 Healthy Order Book:-
Nifty 9086
Current order book stands at Rs. 11175 Cr i.e. 1.3x of the trailing twelve
Stock Performance months revenue with Rs. 3800 Cr of orders in L1 position. Order intake
1Month 3 Month 1Year during the 9 months stood at Rs. 8634 Cr, up by 26% YoY. Management
Absolute 15.1 41.6 59.5 expects healthy orders from SEBs and railways which will provide robust
revenue visibility going ahead. Currently, SEA plant (Brazil) is running at
Rel.to Nifty 13.5 27.8 41.7
100% capacity utilization with 2 years orders in hand.
Share Holding Pattern-%
Operating Margin continues to be strong:-
3QFY17 2QFY17 1QFY17
Promoters 51% 51% 51% EBITDA margin in Q3FY17 has improved by 135 bps YoY to 9.3%. The
Public 49% 49% 49% Improvement in EBITDA margin was attributable to strong performance by
SAE (500 bps up YoY), railway business (negative in Q3FY16) and cable
business (negative in Q3FY16). Management is working on cost front in
cable business to improve margin and we expect margin improvement in
railway business as the revenue increase. Management has guided 9%
Company Vs NIFTY EBITDA margin in FY17 and improves further in FY18. KEC has bring down
160 KEC NIFTY account receivables days from 246 days in FY16 to 218 days at the end of
140 the Q3FY17 and we anticipate it to improve further based on retention
money release from Saudi project which result into improvement in bottom
120
line going forward.
100
80 In Rs. Cr.
Financials Q3FY17 Q2FY17 Q3FY16 YoY % QoQ %
60
Sales 1965 2121 2101 -7% -7%
40
EBITDA 182 185 167 9% -2%
Net Profit* 47 72 23 102% -35%
EBIDTA% 9.3% 8.7% 8.0% 130 bps 60 bps
Sandip Jabuani PAT 3.2% 3.1% 1.2% 200 bps 10 bps
* Net profit is excluding other comprehensive income

Railway :- Potential Revenue growth driver
Management has cut down the revenue growth to 5% in FY17. But maintain the railway top line guidance of 450-500 Cr in FY17
and Rs.1000 Cr for the FY18E based on the huge opportunity in railway electrification project. Railway Ministry has set target to
award 2000 Km, 4000 Km and 6000 km of overhead electrification orders in FY17, FY18 and FY19 respectively. In railways, KEC
commands 20% market share, which may translate into approx.2400 Cr of expected new orders in FY18E. Railway ministrys
focus on execution helps contractor to execute project smoothly and timely. We expect improvement in EBITDA margin based on
incremental volume and speedy execution.
Result Highlights of Q3FY17
Net sales de grew by the 6.5% YoY to Rs. 1965 Cr in Q3FY17 as compared to Rs. 2101 Cr in Q3FY16
EBITDA margin has improved by 135 bsp to Rs. 182 Cr as against Rs 167 Cr on account of 10% plus margin in T&D and
improved performance of railway and SAE business.
KEC has reported 102% YoY growth in PAT with 200 bps improvement on back of higher EBITDA
During the quarter KEC has secured Rs.2706 Cr of new orders in Q3FY17 (up by 20% YoY) and Rs. 8634 Cr in 9 months of
FY17, which is up by 26% YoY
Order book as on 31st December stands at Rs.11175 Cr, ie. 1.3x of TTM revenue.
Managment / Concall Update
Demonetization, delay in conversation of L1 orders into firm order and land acquisition issue at Jammu and Kashmir project led
to de growth in revenue
Management has guided 5% and 10-15% revenue growth in FY17 and FY18 respectively.
EBITDA margin in FY17 will be 9% and it will improve further in FY18
EBITDA margin of SAE tower was 8-9% in Q3FY17
Faced some serious issue in logistic in November and December month due to demonization but now situation is under control.
Losses in Cable segment has come down significantly on YoY
Revenue loss of 50-60 Cr due to demonization
Maintain revenue guidance in railway segment of Rs. 450-500 Cr and Rs.1000 cr in FY18
Interest cost as % of sales will be 2.7% in FY18
Significant improvement in solar business from next year as the KEC is in L1 position of large project. EBITDA margin is slightly
below than normal margin but cash generating on PBT level
Expect to bring down AR collection days to 180 from 218 days based on the release of retention money from Saudi projects
Land acquisition issue at Jammu and Kashmir project has been resolved
Expect more orders from SEBs compare to PGCIL
Outlook and Valuation:-

Revenue growth for 9MFY17 was subdued due to lower commodity prices and demonetization. But the operating margin
continues to accretive during the same period. We expect 5% and 15% revenue growth in FY17E and FY18E respectively based
on the strong traction in Transmission and railway business with strong operating margin. We recommended this stock at Rs. 148
for the target price of Rs. 185 and the stock has achieved our recommended target price. So we advice our investors to Book
part profit at current levels and considering the lower interest outgo, strong revenue growth in Q4FY17 and efficient
working capital management, investors may HOLD Remaining for the revised target price of Rs.217.

Quartely Performance 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Net Sales 2,140 2,021 2,491 1,903 1,998 2,076 2,530 1,763 2,098 1,935 -7% -8%
Other Operating Income 33 32 30 20 23 25 29 22 23 30 19% 27%
Net Sales 2,173 2,053 2,521 1,923 2,021 2,101 2,559 1,785 2,121 1,965 -7% -7%
Change in Invenotry 16 41 76 (13) (1) (39) 74 (49) 8 (11)
RM Cost 1,276 1,053 1,243 900 1,025 924 1,282 870 1,014 854 -8% -16%
COGS 1,292 1,094 1,318 887 1,024 885 1,356 821 1,022 843 -5% -18%
Employee Expenses 149 145 144 158 161 155 168 173 187 186 19% -1%
Other Expenses 225 225 275 203 260 243 279 215 238 243 0% 2%
Erection & Subcontracting 386 485 599 489 421 609 533 390 441 459 -25% 4%
Excise Duty 45 41 36 47 52 27% 11%
Total Expenditure 2,052 1,949 2,336 1,782 1,866 1,934 2,336 1,635 1,936 1,783 -8% -8%
EBITDA 121 105 185 141 155 167 223 150 185 182 9% -2%
Depreciation 22 23 22 29 21 31 22 29 31 30 -5% -4%
EBIT 99 82 162 112 134 136 201 121 154 152 12% -2%
Intreset 91 81 71 71 68 69 71 72 60 58 -16% -2%
PBT 9 136 100 44 69 69 132 54 100 101 46% 0%
Tax (12) 70 37 27 25 43 52 23 35 38 -11% 8%
PAT 20 66 63 17 44 26 80 31 65 63 139% -4%
Margin Profile YoY (+/-) QoQ (+/-)

Gross Margin 40.5% 46.7% 47.7% 53.9% 49.3% 57.0% 47.0% 54.0% 51.8% 57.1% 10 530
EBIDTA 5.6% 5.1% 7.3% 7.3% 7.7% 7.8% 8.7% 8.4% 8.7% 9.3% 150 60
EBIT 4.5% 4.0% 6.4% 5.8% 6.6% 6.7% 7.9% 6.8% 7.3% 7.7% 100 40
PAT 0.9% 3.2% 2.5% 0.9% 2.2% 1.8% 3.1% 1.7% 3.1% 3.2% 140 10
Order Book 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Transmission 7,356 6,921 7,131 7,903 7,207 7,028 7,087 7,334 7,442 8,054 15% 8%
SAE 931 876 951 948 1,086 937 1,134 1,769 1,510 1,342 43% -11%
Cables 279 263 570 632 592 469 472 104 216 224 -52% 4%
Railways 279 263 475 738 691 562 567 936 1,186 1,342 139% 13%
Water 466 438 380 316 - 281 189 208 216 112 -60% -48%
Solar 9 9 - - 296 75 38 52 183 101 34% -45%
Total 9,320 8,770 9,508 10,537 9,872 9,351 9,487 10,403 10,753 11,175 20% 4%
Order Intake
Transmission 583 1,478 1,909 2,375 1,024 1,595 1,370 1,469 1,738 1,651 4% -5%
SAE 231 485 421 123 181 247 206 678 465 298 20% -36%
Cables 253 412 393 309 181 270 206 198 279 244 -10% -13%
Railways - 48 84 278 90 90 56 424 528 460 412% -13%
Water - - - - - - - - - -
Solar 11 5 3 - 30 45 38 57 93 54 20% -42%
Total 1,078 2,428 2,811 3,085 1,506 2,246 1,877 2,825 3,103 2,706 20% -13%
Narnolia Securities Ltd
Please refer to the Disclaimers at the end of this Report 8

Segment Revenue 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Transmission-Rest 1,692 1,531 1,976 1,355 1,506 1,557 1,887 1,184 1,529 1,273 -18% -17%
Transmission SAE 184 214 222 187 201 177 266 255 261 227 28% -13%
Total Transmission 1,876 1,745 2,198 1,542 1,707 1,734 2,153 1,439 1,790 1,500 -13% -16%
Cables 237 254 217 259 262 230 292 245 228 278 21% 22%
Railway 29 22 58 45 34 81 50 70 66 105 30% 59%
Water 30 32 38 32 21 13 37 18 19 20 54% 5%
Solar 9 0 - 40 52 14 26 59 48% 127%
Total 2,172 2,053 2,520 1,878 2,024 2,098 2,584 1,786 2,129 1,962 -6% -8%
Order Book Order Intake
Order Book Book to bill Order Intake Growth YoY%

12,000 2.00 10000 0.3
1.80 9000
10,000 0.25
1.60 8000
8,000 1.40 7000 0.2
1.20 6000 0.15
6,000 1.00 5000
0.80 4000 0.1
4,000 0.60 3000 0.05
2,000 0.40 2000
0.20 0
1000
- - 0 -0.05
FY12 FY13 FY14 FY15 FY16 Till FY12 FY13 FY14 FY15 FY16 Till
Q3FY17 Q3FY17
Strong Growth in Railway Segment :- Margin Trend :-
Railway Order Book Growth YoY%

EBITDA M % PAT M %
1,600 160%
1342 140% 10%
1,400
1,186 120% 9%
1,200 8%
100%
1,000 936 7%
80%
800 738 691 60% 6%
562 567 40% 5%
600 475
20% 4%
400 279 263 3%
0%
200 2%
-20%
1%
- -40%
0%

About the Company :-
KEC International Limited is an India-based company, engaged in infrastructure engineering, procurement and construction
(EPC). The Company is also a manufacturer of power cables and telecom cables in India. The Company operates in four
business verticals, which include power transmission and distribution, cables, railways and water. The Company is also a provider
of turnkey solution in the railway infrastructure EPC space. The Company has powered infrastructure development across 50
countries in developed, developing and emerging economies of South Asia, the Middle East, Africa, Central Asia, the United
States and South East Asia. The Company has eight manufacturing facilities for lattice towers, monopoles, hardware and cables.
Power Transmission
Cabels Railways Water
& Distribution
Transmission Lines Substations Power Cabels

Civil & Track Work Water Resource
LT/HT/EHV
Managment
Lattice Distribution Platforms &
Network Telecom Cabel : Buildings
Towers/Poles
Optical Fiber and Water & Waste
Telecom/Tower/ Jelly filled Signalings Water Treatment
Hardware EPC/OPGE
Electrification
Supply EPC
Manufacturing Facilities
Tower Manufacturing
India, Brazil and Vadodara (Gujarat)
Mexico Mysore (Karnataka)
(SAE Annual Silvassa (Union
production capacity Territory)
100000 MTs)

Revenue 7902 8468 8516 8943 EPS 2.6 6.3 7.4 11.5
EBITDA 493 512 679 760 Payout (incl. Div. Tax.) 23% 11% 30% 30%
EBITDA Margin (%) 6% 6% 8% 9% Valuation(x)
Depreciation 71 88 88 84 P/E 26.0 12.8 16.4 16.0
EBIT 423 424 592 676 Price / Book Value 1.5 1.5 2.1 2.8
Interest 263 309 277 274 Dividend Yield (%) 0.87% 0.88% 1.82% 1.86%
PBT 173 261 325 412 Profitability Ratios
Tax 88 100 133 144 RoE 6% 12% 13% 17%
Tax Rate (%) 1 0 0 0 RoCE 24% 20% 28% 31%
Reported PAT 67 161 192 268 Turnover Ratios
Dividend Paid 15 18 57 80 Asset Turnover (x) 1.1 1.1 1.0 1.1
No. of Shares 26 26 26 26 Debtors (No. of Days) 176 166 193 193
Inventory (No. of Days) 45 38 38 38
Creditors (No. of Days) 148 143 126 126
Net Debt/Equity (x) 0.51 0.55 0.40 0.35

Share Capital 51 51 51 51 OP/(Loss) before Tax 155 261 325 412
Long term Debt 603 737 602 602 Op. before WC Change 499 596 853 770
Short term Debt 1207 1308 1723 1723 CF from Op. Activity (9) 153 (51) 478
Deferred Tax 73 70 66 66 Capex 161 90 78 0
Total Capital Employed 1794 2067 2114 2302 CF from Inv. Activity (136) 125 18 0
Net Fixed Assets 992 881 860 860 Repayment of LTB 305 640 264 0
Capital WIP 18 16 12 0 Interest Paid 263 309 277 274
Debtors 3808 3853 4495 4729 Divd Paid (incl Tax) 15 17 58 80
Cash & Bank Balances 144 206 111 0 CF from Fin. Activity 132 (216) (63) (354)
Trade payables 3213 3325 2939 3087 Inc/(Dec) in Cash (14) 62 (96) 124
Total Provisions 125 122 114 114 Add: Opening Balance 146 132 194 111
Net Current Assets 1374 1668 2151 2187 Closing Balance 132 194 98 235
Total Assets 7411 7745 8138 8322

BUY
MARICO 23rd March 2017
Company Update
Acquires 45% stake in Zed Life Style
CMP 285
Marico has recently agreed to acquire 45% stake in Zed Life Style for an
Target Price 330 undisclosed amount. Marico will gradually increase its stake in next two
Previous Target Price 330 years. Zed Life Style sells men grooming products in the brand name
Upside 16% `Beardo. `Beardo has strong presence in the online channel and salons
Change from Previous NA and 75% of its revenue comes from online channel orders. This acquisition
will give Marico a much needed diversification of products portfolio. Marico
is present in Rs3,200 cr mens grooming market with its mens hair gel and
Market Data mens deodorant under the brand name 'Set Wet'. This acquisition will help
BSE Code 531642 Marico to access the emerging niches at premium end and will enhance
NSE Symbol MARICO companys digital marketing and social media engagement capability going
forward.
52wk Range H/L 307/235
Mkt Capital (Rs Cr) 36,795 Managements short and medium term focus areas
Av. Volume(,000) 1260 Management is targeting 14-15% revenue growth from Indian business in
Nifty 9,030 next 5 years. The company is concentrating on 5 point agenda to improve
its business performance going forward which are innovation, go to the
Stock Performance market, cost management, talent & culture and IT. Immediate target for
1M 3M 12M Maricos management is to get back to 10% volume growth for Indian
business. However medium term expectation for organizations blended
Absolute 3.8 14.3 15.4
margin is 18% and Indian business margin is 20%plus.Food business is
Rel.to Nifty 2.4 2.3 -3.4 also expected to become Rs 300-500 cr in next 5 years. As far as
international business is concern, Management sees minimum15%
Share Holding Pattern-% constant currency (CC) organic growth upcoming 4-5 years.
3QFY17 2QFY17 1QFY17 Outlook and Valuation
Promoters 59.7 59.7 59.7 The companys recent acquisition is small but a right step in right direction.
Public 40.1 40.0 40.0 This acquisition will expand companys product portfolio in male grooming
market and will enhance companys digital marketing capability going
Others 0.2 0.3 0.3 forward. Management is optimistic of clocking double digit volume growth for
Total 100 100 100 Saffola in medium term which gives us confidence of high single to double
digit overall volume growth for Marico going forward. On margin front,
management reiterated its previous guidance of 20% plus margin for
Company Vs NIFTY
domestic business and 18% for overall business. Presently company trades
125 MARICO NIFTY at 16 times of FY17E book value with 35% of RoE. Considering improving
120
business conditions after demonetization, better medium term volume
115
guidance for domestic business and expected recovery from international
110
business going forward, we reiterate to BUY this stock with the target price
105
for Rs 330.
100
Rs,Cr
95
Financials 3QFY17 2QFY17 (QoQ)-% 3QFY16 (YoY)-%
90
85 Sales 1417 1443 -2% 1530 -7%
80 EBITDA 272 253 8% 290 -6%
Net Profit 192 181 6% 206 -7%
EBITDA% 19% 18% 169 Bps 19% 28 Bps
Rajeev Anand PAT% 14% 13% 100 Bps 13% 9 Bps
rajeev.anand@narnolia.com
Concall Highlights(Q3FY17)
The company sees inflation led value growth going ahead.
South and West impacted less due to demonetization.
Company sees much better traction from Bangladesh going forward.
Management expects recovery from MENA region in 2HFY18.
The company expects 18% overall margin in the medium term.
Management guided for 6-8% near term volume growth for overall business.
The company is diversifying its products portfolio.
GST will lead to improvement in market share for Marico going forward.
A&P Expenses will be in the range of 10% going forward.
In the month Jan, company witnessed 90% of its demand recovery.
The company may initiate pricing growth for Egypt.
In medium term, the company would be comfortable at 20%+ EBITDA margin.
Parachute and Nihar: Despite headwinds of demonetization and steep increase in inputs costs, near term volume growth
prospects remain promising.
Copra prices went up by 17%on sequential basis and YoY decline of 5%. The company expects the copra prices to go up further
in Q4FY17.
Company will take prices up in near term considering the inflation in commodity prices.
Net Sales and PAT(in cr.)
2000 300
Sales(in cr) PAT(in cr)
1800 268
250
1600
229
1400 206 200
185 192
1200 181
160 153
1000 150
138
800 118 110
100
600
400
50
1623
1431
1452
1226
1750
1454
1530
1307
1754
1443
1417
200
0 0
1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
EBITDA and PAT Margin

25.0%
EBITDA Margin% PAT Margin%
21.3%
18.9% 19.2%
20.0% 18.2% 17.5%
16.4% 16.3% 16.6%
15.7% 15.3%
13.6% 14.0% 13.4% 13.5%
15.0% 13.1% 12.5%
11.4% 11.0% 10.5% 10.6%
9.0%
10.0% 8.3%
5.0%
0.0%
1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17

Revenue 4687 5733 6132 5929 EPS(adjusted) 8 9 6 6
Other Income 58 59 93 101 Book Value(adjusted) 21 28 16 18
Total Revenue 4744 5792 6225 6029 DPS 2 5 4 4
COGS 2399 3119 3061 2849 Payout (incl. Div. Tax.) 29% 52% 72% 60%
GPM 48.8% 45.6% 50.1% 51.9% Valuation(x)
Other Expenses 1255 1419 1644 1537 P/E 15.7 23.1 46.5 45.1
EBITDA Margin (%) 16.0% 15.2% 17.3% 19.4% Dividend Yield (%) 1.9% 2.3% 1.6% 1.3%
EBIT 671 786 961 1052 RoE 35.7% 31.4% 34.6% 34.7%
Interest 34 23 20 15 RoCE 41.6% 39.4% 45.8% 45.3%
PBT 695 822 1034 1138 Turnover Ratios
Tax 190 237 297 328 Asset Turnover (x) 1.6 1.8 1.8 1.6
Tax Rate (%) 27.4% 28.8% 28.7% 28.8% Debtors (No. of Days) 17 11 15 20
Reported PAT 485 573 725 807 Inventory (No. of Days) 121 116 110 105
Dividend Paid 142 300 522 484 Creditors (No. of Days) 39 36 40 42
No. of Shares 64 64 129 129 Net Debt/Equity (x) 0.2 0.1 0.0 0.0
BALANCE SHEET CASH FLOW STATEMENT

Share Capital 64 65 129 129 OP/(Loss) before Tax 695 822 1,034 1,135
Net Worth 1361 1825 2097 2323 Direct Taxes Paid (181) (210) (246) (328)
Long term Debt 252 169 0 0 Op. profit bef. WC changes 754 891 1,079 1,246
Deferred Tax 10 8 10 10 Non Current investments (155) (121) (33) -
Capital Employed 1612 1994 2097 2323 Capital expenditure (785) (48) (7) (18)
Net Fixed Assets 638 590 583 565 CF from Inv. Activity (204) (179) (235) (220)
Capital WIP 4 0 0 0 Repaym of L T Borrowings (181) (83) (168) -
Debtors 223 177 252 325 Interest Paid (35) (23) (20) (15)
Cash & Bank Balances 406 205 310 382 Divd Paid (incl Tax) (142) (300) (502) (581)
Trade payables 503 564 669 682 CF from Fin. Activity (339) (625) (580) (609)
Total Provisions 86 104 115 115 Inc/(Dec) in Cash 144 (147) 17 72

BUY
Kalpatru Power Transmission Ltd. 22-Mar-17
Result Update Kalapatru Powers standalone order book stands at Rs8300 Cr at the end of
CMP 286 Q3FY17 with Rs3000 Cr plus orders in L1. Management expects to convert
Target Price 320 Rs1500-2000 Cr of L1 orders into firm order in Q4FY17. Out of the total
Previous Target Price order book, 55% comes from overseas orders and rests are from the
domestic market. Kalapatru has received its 90% of the overseas order in
Upside 12%
last six months and a company is fully ready to execute it going forward
Change from Previous
which will drive revenue growth in Q4FY17 and FY18.Management has
guided for 15-20% revenue growth in FY17, which implies more than 20%
Market Data growth in Q4FY17. The company has witnessed delay in orders from PGCIL
BSE Code 522287 but healthy traction from SEBs, Africa, and CIS countries. Management
NSE Symbol KALPATPOWER expects to win at least 2500-3000 Cr of a new order in Q4FY17. Continuous
52wk Range H/L 186/299 focus on improvement in working capital resulted in lower interest, 2.3% of
Mkt Capital (Rs Cr) 4,388 sales in 9MFY17 against 3.4% of sales in 9MFY16 and it will be around
Av. Volume 4520 2.5% of sales in Q4FY17
Nifty 9121
Strong Opportunity in Infra Segment:-
Stock Performance Currently, Infra segment (Pipeline and Railway) contributes only 10% of the
1Month 3 Month 1Year Order book but we see huge opportunity going forward especially in Railway
Absolute 1.6 21.4 48.8 segment. KALAPTPOWER has strong order pipeline of 3000 Cr and 1500
Rel.to Nifty -0.8 8.2 28.9 Cr in Railway and Pipeline business respectively. Railway Ministry has set a
target to award 2000 Km, 4000 Km and 6000 km of overhead electrification
orders in FY17, FY18 and FY19 respectively which provides huge
Share Holding Pattern-%
opportunity going forward. Shri Shubham logistics business remained
3QFY17 2QFY17 1QFY17
muted in Q3FY17 due to demonization and we do not expect significant
Promoters 59% 59% 59% improvement in it inFY17
Public 41% 41% 41%
Others 0% 0% 0%
Outlook & Valuation:-
Total 100% 100% 100%
Kalapatrus Standalone order book remains strong and advanced stage of
Company Vs NIFTY an overseas project in transmission will help to register strong revenue
160 growth of 20% in FY17. Increasing opportunity in Railway segment can be a
KALPATPOWR NIFTY
potential growth driver going forward for the Company. Based on SOTP
140
valuation method we have valued the standalone business at Rs. 260 per
120 share and subsidiaries (JMC, SSL, Transmission BOT projects and
100
Development projects) at Rs. 60 per share. Hence, we recommend BUY
on the stock with target price of Rs. 320.
80
60
Financials Q3FY17 Q2FY17 Q3FY16 YoY % QoQ %
Sales 1158 1143 899 29% 1%
40
EBITDA 119 122 90 32% -2%
Net Profit 47 58 28 68% -19%
EBIDTA% 10.3% 10.7% 10.0% 30 bps (40 bps)
Sandip Jabuani PAT 4.1% 5.1% 3.1% 100 bps (100 bps)
Part Book Profit
EXIDE INDUSTRIES LTD 21-Mar-17
Result Update Exide Industries Limited is well placed to take advantage of growing mobility
CMP 218 demand in the country. The company has plans to invest Rs 1,400 crore
Target Price 240 over the next two years to introduce more durable automotive batteries in
Previous Target Price 220 India. Batteries with the new technology will be initially rolled out from our
Haldia plant and gradually, other facilities will also start producing the same.
Upside 10%
Unorganized players constitute over 35% market share in the Indian battery
Change from Previous - industry and introduction of Goods and Services Tax in FY18 will play a
major role in the growth of Exide. We expect that the industrial battery
Market Data segments demand will pick up gradually in line with the economic
improvement going ahead. To promote eco-friendly vehicles, the
BSE Code 500086
government has been offering incentives on electric and hybrid vehicles
NSE Symbol EXIDEIND under the National Electric Mobility Mission Plan which will also boost
52wk Range H/L 225/130 demand for Exide. The nation-wide rollout of this scheme is scheduled from
Mkt Capital (Rs Cr) 1 April, 2017.
18,607
Av. Volume 2,00,169
Nifty 9,127 Result Update
Stock Performance Revenue grew by 12.6%YoY to Rs. 1729 crore in 3QFY17. The growth in
1Month 3Month 1Year top-line was supported by higher sales of Passenger vehicles and 2
wheelers segment.
Absolute 1.7 25.9 60.9
Rel.to Nifty -1.0 13.0 40.9 EBITDA Margin decreased by 230 bps YoY. Other expenses remain higher
due to sales and promotion expenses.
Share Holding Pattern-% PAT Margin decreased by 20 bps YoY. Company reported Rs.2.63 crore of
3QFY17 2QFY17 1QFY17 other comprehensive income under the new IndAS.
Promoter 45.99 45.99 45.99
Outlook and Valuation
Public 54.01 54.01 54.01
Others -- -- -- We expect that managements strategy of cost control and technology up-
Total 100.00 100.00 100.00 gradation may improve the margin up to 100bps by 2017-18. Technological
innovation, segment branding and increased distribution reach along with
GST implementation will help the company to gain market share going
Company Vs NIFTY forward. We recommended this stock at Rs.175 for a target price of Rs.220
160 EXIDEIND NIFTY and the stock has achieved our recommended target. So we advise our
150 investors to Book Part Profit at current levels and considering the future
growth potential of the stock we revise our target and recommend fresh
140
BUY for a target price of Rs.240 and we value insurance business at Rs.19
130
per share.
120
110 Rs. In crore
100 Financials 3QFY17 2QFY17 3QFY16 QoQ YoY
90 Sales 1729 1929 1536 -10% 13%
80 EBITDA 230 293 239 -22% -4%
Jul-16
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Mar-17
Mar-16
Net Profit 154 182 140 -15% 10%

EBIDTA% 13.3% 15.2% 15.6%
Naveen Kumar Dubey PAT % 8.9% 9.4% 9.1%
naveen.dubey@narnolia.com
EXIDEIND
Investment Arguments
Capex in new technology - Exide has planned to invest Rs.1400 crore over the next two years to introduce more durable
automotive batteries in India. Out of total Rs.1400 crores, Rs 700 crore has been invested in its plant at Haldia in West Bengal from
where batteries with punch-grid technology have started rolling out this year. The remaining Rs 700 crore of the planned capex will
be invested across the rest of the four automotive battery manufacturing plants over 2017-18. The plant will roll-out 1 mn batteries
and these batteries would be targeting primarily aftermarket.
Technological Innovation- Exide has tie ups with technological partners like East Penn Inc. USA, Hitachi chemicals Japan,
Furukawa Battery Co.Ltd Japan which provides requisites technology to develop better products. These companies have technical
expertise in 2Ws, 4Ws and Industrial segments batteries and they provide technological edge to the Exide over its peers and
unorganized players.
Market share shift towards organized from unorganized - Unorganized players constitutes over 35% market share in the
Indian battery industry.major unorganized players operate in Tractor, 3Ws and CV space. We believe that the introduction of GST
will bring down the price differential between organized and unorganized players, so there could be a prompt shift of market share
towards the organized players from unorganized players.
Telecom a big opportunity- Exide has 10% market share in the telecom segment, and it is very small portion of total revenue.
The teleocom industry has started data escalation and tower companies offer immense potential for industrial batteries. So it can be
a good opportunity for Exide to capture more market share. According to the management, industrial segment should grow over
15% in next two years.
Life Insurance business remains profitable for last consecutive 3 years. The company has started investing on branding and
promotion of its insurance arm to make it one of the big insurance companies of India.
Plant Location and Capacity
Capacity
Auto MC Industrial HUPS Systems
Plant Location mn units mn units Mah mn units
Shamnagar (1946) 1.6 636
Chinchwad (1969) 2.9
Haldia (1981) 2.1 1102 adding 1 mn capacity in auto space in FY17
Hosur (1997) 2.8 1086
Taloja (1998) 2.8 0.6
Bawal (2003) 8.4
Ahmednagar (2010) 8.9
Roorkee (2011) 0.5
Haridwar (2012) 0.5
Total 12.2 17.9 2824.0 1.0
Key Risk
Increase in Lead prices can affect the margins because of competitive replacement market.
Power defict in the country has reduced from 3.6% to 2.1% in FY16, so improving power condition in the country can hamper fast
growing inverter segment growth.
Economic slowdown in the country can negatively impact both the industrial and automotive segments.

EXIDEIND

Revenue (Net of Excise Duty)
8309 9535 9479 10155 EPS 6.4 7.2 8.4 9.3
COGS 4014 4652 4429 4753 Payout (incl. Div. Tax.) 33% 36% 33% 33%
GPM 48% 49% 47% 47% Valuation(x)
Other Expenses 2466 2959 2550 2742 P/E 18.9 24.6 16.6 18.9
EBITDA Margin (%) 10% 10% 11% 11% Dividend Yield (%) 1.74% 1.45% 2.02% 1.77%
EBIT 721 782 875 941 RoE 16% 16% 16% 16%
Interest 8 3 2 3 RoCE 21% 20% 20% 19%
PBT 787 874 1009 1123 Turnover Ratios
Tax 241 257 292 337 Asset Turnover (x) 0.7 0.7 0.6 0.6
Tax Rate (%) 31% 29% 29% 30% Debtors (No. of Days) 29 26 28 28
Reported PAT 545 615 714 786 Inventory (No. of Days) 118 129 103 103
Dividend Paid 179 219 239 263 Creditors (No. of Days) 48 40 44 44
No. of Shares 85 85 85 85 Net Debt/Equity (x) 0 0 0 0
BALANCE SHEET CASH FLOW STATEMENT

Net Worth 3460 3841 4330 4854 Direct Taxes Paid (235) (253) (278) (337)
Long term Debt 4 3 2 2 Operating profit before working
950capital changes
831 1298 1338
Deferred Tax 112 131 131 131
Total Capital Employed 3464 3844 4332 4856 Capex (158) (332) (423) (263)
Capital WIP 63 115 192 192 Repayment of Long Term Borrowings
(38) (2) (1) 0
Debtors 658 690 722 774 Interest Paid (8) (3) (1) (3)
Cash & Bank Balances 287 207 294 194 Divd Paid (incl Tax) (171) (223) (238) (263)
Trade payables 1101 1046 1132 1213 CF from Fin. Activity (215) (199) (182) (259)
Total Provisions 245 292 327 350 Inc/(Dec) in Cash 55 (74) 83 (100)

Maintain BUY
IRB Infrastructure Developers Ltd. 20-Mar-17
Result Update IRB will Launch InvIT in April:-

CMP 244 IRB had filed draft red herring prospectus (DRHP) with SEBI and was waiting
Target Price 285 for SEBIs approval. Now, SEBI has given the nod and IRB is ready to launch
Previous Target Price 265 InvIT IPO of 4300 Cr in month of April. InvIT are the trust that manages the
income generating assets of 6 SPVs. IRB will transfer 6 project namely Surat
Upside 17%
Dahisar, Bharuch Surat, Jaipur- Deoli, Tumkar Chaitradurg, Omalur Salem
Change from Previous 8% and Talegaone Amravati to trust at mutually agreed valuation. IRB values its
transferring assets at 8000 Cr Enterprise Value (EV) and 3000 Cr of equity
Market Data valuation. Trust will acquire 100% equity stake from IRB and issue units of
BSE Code 532947 trust as consideration. Then the Trust will offer fresh units worth of Rs. 4300
NSE Symbol IRB Cr to investors through Offer for Sale and the proceed from it will infuse as
52wk Range H/L debt into six SPVs. IRB and other sponsors can also sell its units through
266/177
Offer for sale. Post this transaction IRBs debt to equity will improve
Mkt Capital (Rs Cr) 8,577 significantly from 2.8x to 2.2X, which will result in lower interest outgo and
Av. Volume 203192 improvement in the bottom line.
Nifty 9160
Robust construction revenue visibility:-
Stock Performance Currently, 5 projects are under construction and in next 8-10 months time
1Month 3 Month 1Year period another 3 projects in Rajasthan namely Gujarat/Rajasthan, Kishangarh
Absolute 6.9 26.7 5.9 - Udaipur and Kishangarh - Gulabpura will come under execution. Recently,
company has executed concession agreement with NHAI for the Kishangarh
Rel.to Nifty 3.1 14.2 -16.3
to Gulabpura road project. We expect work will start on Gujarat Rajsthan and
Kishangarh Udaipur projects from April and June 2017 respectively. Order
Share Holding Pattern-% book stands at Rs. 12011 Cr i.e. 3.45x of TTM EPC revenue. All the projects
3QFY17 2QFY17 1QFY17 are well on track and management confident to complete projects on time.
Promoters 57% 57% 57% Current on-going projects will drive the revenue growth and we expect
Public 43% 43% 43% revenue growth of 40-45% in FY18E.
Other 0% 0% 0%
Total 100% 100% 100% Strong Recovery in Toll Collection :-
IRB has witnessed encouraging traffic growth post the demonization. Average
Company Vs NIFTY daily toll collection in month of December has grown by 3% to Rs. 7.79 Cr
130
compared to Rs. 7.53 Cr in month of October. IRB's most of the operation
IRB NIFTY
120 road projects are in western part of the country which is seeing good recovery
110 in traffic movement. Management expects 10-12% growth in BOT revenue
100 including 5-6% traffic growth.
90
80
70 In Rs. Cr
60
Financials Q3FY17 Q2FY17 Q3FY16 YoY (+/-) QoQ (+/-)
50
40
Sales 1411 1291 1333 6% 9%
EBITDA 743 709 688 8% 5%
PAT 184 142 170 8% 30%
EBIDTA% 52.7% 54.9% 51.6% 110 bps (220) bps
Sandip Jabuani PAT 13.1% 11.0% 12.7% 40 bps 210 bps
19
Structure of theTrust :- Socure :- InvIT DRHP
Projects transfer to Trust :-
IRB Length Annual Toll Debt as on Concession Remaing Concession

Projects State
Holding (Kms) Collection 31st Dec Period(In Years) Period (In Years)
Surat-Dahisar 100% Maharstra 239 613 2016
742 12 5
Tumkar Chitradurga 100% Karnataka 114 202 926 26 21
Baruch - Surat 100% Gujarat 65 194 503 15 6
Jaipur - Deoli 100% Rajsthan 146 121 869 25 20
Omalur Salem Namakkal74% Tamil Nadu 69 75 206 20 10
Talegaon Amravati 100% Maharstra 67 47 479 22 16
Trust will receive interest on debt infuse inform of equity into SPVs and the interest income will be a tax exempted for the trust.
Trusts will also received dividend from SPVs. Trust has to distribute dividend to its unit holder based on net distributable cash
flow available and not on the basis of accounting profit.
IRB Infrastructure Developers is the Sponsor of the Trust
IRB Infrastructure (Standalone Company) is act as project Manager
IDBI Trusteeship Services will act as Trustee of the Trust (InvIT)
Outlook and Valuation :-

InvIT is near to become reality in Indian capital market as the SEBI gives a nod to IRB to launch its Infrastructure Trust. IRB will
launch it in April 2017. IRB is planning to raise Rs. 4300 Cr through InvIT IPO. The proceeds will be used for the debt repayment
and as a growth capital for the on-going and upcoming projects. Encouraging traffic growth and strong recovery in economic
activity nullified the demonetization impact in Q3FY17. Based on the strong order book, we expect EPC revenue to grow @ 12% in
FYT17E and 30% in FY18E. According to us, the launch of InvIT , robust EPC revenue growth and strong toll collection will be a
growth driver for the company going forward and hence, we maintain BUY on the stock with revised target price of Rs.285
from 265

Quartely Performance 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Net Sales 883 964 990 1,109 1,149 1,333 1,537 1,517 1,291 1,411 6% 9%
Other Operating Income - - - - - - - - - -
Net Sales 883 964 990 1,109 1,149 1,333 1,537 1,517 1,291 1,411 6% 9%
Contarct Site Exp 193 240 239 273 314 488 597 553 379 447 -8% 18%
RM Cost 75 75 103 126 138 64 51 76 82 85 31% 3%
COGS 268 314 341 399 452 552 648 629 461 532 -4% 15%
Employee Expenses 50 45 53 48 60 57 81 64 60 67 17% 11%
Other Expenses 42 49 25 33 32 36 68 50 60 69 89% 14%
Total Expenditure 360 408 420 480 544 646 797 743 582 667 3% 15%
EBITDA 523 555 571 629 605 688 740 774 709 743 8% 5%
Depreciation 180 179 172 202 203 226 222 221 227 180 -20% -21%
EBIT 343 377 399 427 402 461 517 553 482 563 22% 17%
Intreset 227 237 251 235 240 264 327 328 340 339 28% 0%
PBT 145 169 176 220 192 229 225 256 176 254 11% 45%
Tax 23 35 40 55 43 61 73 74 33 70 15% 109%
PAT 122 133 138 165 150 170 151 182 142 184 9% 30%
Margin Profile YoY (+/-) QoQ (+/-)

Gross Margin 69.60% 67.38% 65.53% 63.99% 60.65% 58.57% 57.86% 58.54% 64.28% 62.31% 374 (197)
EBIDTA 59.2% 57.6% 57.6% 56.7% 52.7% 51.6% 48.1% 51.0% 54.9% 52.7% 110 (220)
EBIT 38.9% 39.1% 40.2% 38.5% 35.0% 34.6% 33.7% 36.5% 37.3% 39.9% 530 260
PAT 13.8% 13.8% 14.0% 14.9% 13.0% 12.7% 9.8% 12.0% 11.0% 13.1% 40 210
Opearting Matrix YoY% QoQ%

Construction Order 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Ongoing BOT Projects 4,254 3,776 3,219 8,136 7,503 6,675 5,810 4,818 5,634 4,826 -28% -14%
Construction yet to comm. 5,402 5,403 7,551 2,133 2,133 8,828 2,133 2,133 3,987 5,436 -38% 36%
9,656 9,178 10,770 10,269 9,636 15,503 7,943 6,951 9,621 10,262 -34% 7%
BOT Projects in O&M 1,932 3,776 1,861 1,847 1,832 1,818 1,803 1,788 1,773 1,750 -4% -1%
Total 11,587 12,954 12,631 12,116 11,468 17,321 9,746 8,739 11,394 12,011 -31% 5%
Toll Collection at Major Projects YoY% QoQ%

Munbai- Pune 136 147 149 160 146 162 165 188 173 137 -15% -21%
Surat - Dahisar 131 145 147 151 145 156 162 161 148 111 -29% -25%
Tumkar Chitradurga 45 47 48 50 49 51 51 53 50 40 -22% -20%
Baruch - Surat 45 49 48 49 45 49 50 49 47 37 -25% -21%
Ahem.-Vadodra (NE-1) 35 42 43 44 37 53 86 88 83 69 31% -16%
Jaipur - Deoli 24 27 29 33 26 29 32 32 27 22 -24% -16%
Pathankot - Amritsar - 8 21 23 22 27 27 29 28 24 -12% -15%
Thane- Bhiwandi Bypass 17 19 19 20 19 20 21 20 19 15 -24% -19%
Omalur Salem Namakkal 19 21 19 19 18 17 21 20 19 15 -11% -22%
Talegaon Amravati 10 11 12 12 10 12 13 13 12 10 -15% -13%

Please refer to the Disclaimers at the end of this Report 21
Order Book
Order book Book to bill
20,000 17,321 20
15,000 12,954 12,631 15

11,587 12,116 11,468 11,394 12,011
9,746
10,000 8,739 10
5,000 5
- -
Order Book break up project wise
Yedeshi Aurangabad
6% 4%
9%
2% Kaithal Rajasthan Border
12% 2%
Solapur Yedeshi
Sindhudurg Airport
Agra Etawah
15% 17%
Gulabpura -Chittorgarh
Udaipur -Gj Border
O & M Contracts
17% 16% Kishangarh Gulabpura
Goa Kundapur
Revenue Mix

Net Revenue 3732 3847 5130 5694 EPS 14 15 18 18
Other Income 121 113 124 119 Book Value 107 124 137 151
Total Revenue 3853 3960 5254 5812 DPS 6 5 5 5
EBITDA 1754 2212 2661 3041 Payout (incl. Div. Tax.) 42% 30% 26% 26%
EBITDA Margin (%) 47% 57% 52% 53% Valuation(x)
Depreciation 477 707 853 935 P/E 7 15 13 15
EBIT 1277 1505 1807 2106 Price / Book Value 1 2 2 2
Interest 756 931 1063 1346 Dividend Yield (%) 6% 2% 2% 2%
PBT 642 686 868 878 Profitability Ratios
Tax 182 144 232 246 RoE 13% 12% 13% 12%
Tax Rate (%) 28% 21% 27% 28% RoCE 9% 10% 10% 10%
Reported PAT 459 543 636 633 Turnover Ratios
Dividend Paid 194 164 164 164 Asset Turnover (x) 0.2 0.1 0.1 0.1
No. of Shares 33 35 35 35 Debtors (No. of Days) 1 0 7 7
Inventory (No. of Days) 59 73 55 55
Creditors (No. of Days) 40 22 22 22
Net Debt/Equity (x) 2.64 2.48 2.62 2.68

Long term Debt 9398 10804 12652 14192 Op. before WC change 1749 2216 2719 3159
Deferred Tax 22 19 16 16 Non Current Investment 0 1 0 0
Total CE 12959 15165 17479 19485 Capex 3002 2311 3161 2261
Capital WIP 48 80 78 78 Repayment of LTB 888 794 1140 0
Debtors 6 5 104 115 Interest Paid 740 1317 1435 1346
Cash Balances 1501 1580 1559 0 Divd Paid (incl Tax) 194 78 254 164
Trade payables 408 234 305 339 CF from Fin. Activity 1274 474 667 30
Total Provisions 289 219 169 324 Inc/(Dec) in Cash 186 2 (165) (127)

N arnolia Securities Ltd
201 | 2nd Floor | Marble Arch Bu ild ing | 236B-AJC Bose
Road | Kolkata-700 020 , Ph : 033-40501500
email: narnolia@narnolia.com,
w ebsite : w w w .narnolia.com
Risk Disclosure & Disclaimer: This report/message is for the personal information of
the authorized recipient and does not construe to be any investment, legal or taxation
advice to you. Narnolia Securities Ltd. (Hereinafter referred as NSL) is not soliciting any
action based upon it. This report/message is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or
redistributed to any other person in any from. The report/message is based upon publicly
available information, findings of our research wing East wind & information that we
consider reliable, but we do not represent that it is accurate or complete and we do not
provide any express or implied warranty of any kind, and also these are subject to change
without notice. The recipients of this report should rely on their own investigations,
should use their own judgment for taking any investment decisions keeping in mind that
past performance is not necessarily a guide to future performance & that the the value of
any investment or income are subject to market and other risks. Further it will be safe to
assume that NSL and /or its Group or associate Companies, their Directors, affiliates
and/or employees may have interests/ positions, financial or otherwise, individually or
otherwise in the recommended/mentioned securities/mutual funds/ model funds and
other investment products which may be added or disposed including & other mentioned
in this report/message.

IEA Report 27th March

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IEA Report 27th March

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IEA Report

27th Mar 2017

KEC Part Book Profit 24th Mar 2017

MARICO "BUY" 23th Mar 2017

KALPATPOWER "BUY" 22th Mar 2017

EXIDEIND Part Book Profit 21th Mar 2017

IRB "BUY" 20th Mar 2017

Narnolia Securities Ltd IEA Edition No.- 982

Net Profit 52 19 29 79% 174%

Narnolia Securities Ltd 2

Segmental Order Book

BOT EPC Irrigation Minning

Order book Book to Bill

Narnolia Securities Ltd 3

Please refer to the Disclaimers at the end of this Report

BOT EPC Irrigation Minning Power Generation

Narnolia Securities Ltd 4

Please refer to the Disclaimers at the end of this Report

BALANCE SHEET CASH FLOW

Narnolia Securities Ltd 5

Narnolia Securities Ltd 6

Result Highlights of Q3FY17

Managment / Concall Update

Outlook and Valuation:-

Narnolia Securities Ltd 7

Please refer to the Disclaimers at the end of this Report

Margin Profile YoY (+/-) QoQ (+/-)

Narnolia Securities Ltd

Please refer to the Disclaimers at the end of this Report 8

Order Book Order Intake

Order Book Book to bill Order Intake Growth YoY%

Strong Growth in Railway Segment :- Margin Trend :-

Railway Order Book Growth YoY%

Narnolia Securities Ltd 9

Please refer to the Disclaimers at the end of this Report

Transmission Lines Substations Power Cabels

Narnolia Securities Ltd 10

Please refer to the Disclaimers at the end of this Report

BALANCE SHEET CASH FLOW

Narnolia Securities Ltd 11

Please refer to the Disclaimers at the end of this Report

EBITDA and PAT Margin

Narnolia Securities Ltd 13

Please refer to the Disclaimers at the end of this Report

BALANCE SHEET CASH FLOW STATEMENT

Narnolia Securities Ltd 14

Please refer to the Disclaimers at the end of this Report

Net Profit 154 182 140 -15% 10%

Plant Location and Capacity

Narnolia Securities Ltd 17

Please refer to the Disclaimers at the end of this Report

Financials Snap Shot

BALANCE SHEET CASH FLOW STATEMENT

Narnolia Securities Ltd 18

Please refer to the Disclaimers at the end of this Report

Result Update IRB will Launch InvIT in April:-

Projects transfer to Trust :-

IRB Length Annual Toll Debt as on Concession Remaing Concession

Outlook and Valuation :-

Narnolia Securities Ltd 20

Margin Profile YoY (+/-) QoQ (+/-)

Opearting Matrix YoY% QoQ%

Toll Collection at Major Projects YoY% QoQ%

Narnolia Securities Ltd