Angel Top Picks - July 2019

Top Picks

Indian stock market closed in the red for the first time in four months. BSE 100

Company

CMP (`)

TP (`)

index was down by 1.2% for the month of May while returns for the calander year

Banking/NBFC

2019 is 6.7%. Our top picks have generated a total return of 60.2% since

Aditya Birla Capital

130

inception, an outperformance of 14.9% over BSE100.

ICICI Bank

437

490

Profit booking post election results - Major indices like the Sensex and Nifty 50

HDFC Bank

2,495

2,660

hit all-time highs by the first week of Jun’19 on the back of better than

RBL Bank

653

775

expected outcome of the general elections as the ruling NDA Government

Shriram Transport Finance

1,068

1,470

returned to power with an even bigger majority than 2014. However post the

Consumption

initial euphoria all indices came under pressure as traders used the rally to

Amber Enterprises

828

910

book profits. FII flows too slowed down to ` 2273 cr. in Jun’19 as compared

Bata India

1,459

1,643

to INR 7920 cr. in May’19 and a peak of ` 33,980 cr. in Mar’19. FII flows for

Blue Star

769

867

calendar year 2019 stands at ` 71,352 cr.

Safari Industries

663

1,000

RBI cuts rate for the third time in 2019 to counter economic slowdown - Tight

Parag Milk Foods

261

330

fiscal and monetary policy over the past few years coupled with major

TTK Prestige

6,664

7,708

structural changes have taken a toll on growth which was further exacerbated

Media/Automobiles

post the IL&FS crisis and its fallout. In order to stimulate growth the RBI in it’s

Maruti Suzuki

6,559

8,552

third bi monthly meeting for CY19 announced a 25bps rate cut in the

M&M

667

1,050

benchmark repo rate to 5.75%. Given very low inflation of ~3% we expect at

Real Estate/Infra/Logistics/Power

least another 50bps rate cuts by the RBI over the next 6-9 months.

GMM Pfaudler

1,363

1,570

Jindal Steel

141

250

Monsoon and US-China trade war are key risks - Monsoon has been delayed

this year due to formation of El Nino over the Pacific Ocean. As of the 4^th of

KEI Industries

477

612

July monsoon is deficient by 27% which is a major source of concern. However

Pharmaceutical

of late the monsoon has revived, and is expected to strengthen further which

Aurobindo Laboratories

611

890

bodes well for the rural economy. While the trade war between US and China

Source: Angel Research;

Note: CMP as of 02 July, 2019

has already taken a toll on global growth any further escalation could further

hurt global growth and is a risk to the Indian economy as well. However any

US China trade deal would be positive for both global and Indian economy.

Union Budget to be key event in first week of July - The final Union Budget for

2019-20 assumes great importance given shortfall in tax revenues in FY19.

We expect that the Government will resist cutting back on expenditure and try

and stimulate the economy by providing tax breaks to middle class which

would boost consumption. We expect fiscal slippage in FY20 unless there is a

transfer of at least some of RBI’s surplus reserves to the Government.

Top pick’s overview

We recommend our top picks as it has outperformed the benchmark BSE 100

significantly since inception. All of our top picks are backed by sound business

model and are likely to do well in coming years. We continue to remain

positive on consumer (both discretionary and non discretionary) space and

private sector banks (both corporate and retail).

Exhibit 1: Top Picks Performance

Return Since Inception (30th Oct, 2015)

Top Picks Return

60.2%

BSE 100

45.3%

Outperformance

14.9%

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

Angel Top Picks | July 2019

Aditya Birla Capital

Stock Info

CMP

 Aditya Birla Capital (ABCL) is one of the most diversified financial services

130

entities, with a presence in non-bank financing, asset management, housing

Upside

41.3%

finance, insurance and advisory businesses.

Sector

Financials

 ABFL (NBFC) business contributes highest value in our SOTP valuation. It has

Market Cap (` cr)

20,341

recorded a strong CAGR of 32% over FY14-19. Despite aggressive growth in

Beta

1.6

lending and migration to 90dpd for NPA recognition, GNPA has remained at

~1%. Banka Tie up with HDFC bank has gaining traction which is visible in

52 Week High / Low

152/78

improvement in VNB margin (FY18-4.5%, FY19-9.5%) and new business

premium.

2 year-Chart

 We expect financialization of savings, increasing penetration in Insurance &

250

Mutual funds would ensure steady growth. Further, Banca tie-up with HDFC

200

Bank, DBS and LVB should restore insurance business.

150

Key Financials

100

Y/E

Op. Inc

PAT

EPS

ABV

ROE

P/E

P/ABV

Op. Inc

PAT

March

(` cr)

(`)

(%)

(x)

(` cr)

FY2020E

2,368

1,281

5.8

49.1

1.9

2,368

1,281

FY2021E

3,032

1,699

7.7

56.8

1.6

3,032

1,699

Source: Company, Angel Research

Amber Enterpries

Stock Info

 Amber Enterprises India Ltd. (Amber) is the market leader in the room air

CMP

828

conditioners (RAC) outsourced manufacturing space in India. It is a one-stop

910

solutions provider for the major brands in the RAC industry and currently

Upside

10.0%

serves eight out of the ten top RAC brands in India.

Sector

Electronics

 In line with its strategy to capture more wallet share, it has made 2 acquisitions

Market Cap (` cr)

2,593

in the printed circuit board (PCB) manufacturing space over the last 1 year

which will boost its manufacturing capabilities.

Beta

0.9

 We expect Amber to report consolidated revenue/PAT CAGR of 23%/41%

52 Week High / Low

1,121/621

respectively over FY2018-20E. Its growing manufacturing capabilities and

scale put it in a sweet spot to capture the underpenetrated RAC market in

1 year-Chart

India.

1,400

1,200

Key Financials

1,000

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

800

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

600

FY2019

2,752

8.1

93.6

29.7

9.8

27.9

2.6

12.5

1.0

400

200

FY2020E

3125

7.5

114.4

36.4

10.7

22.7

1.9

8.2

0.6

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Aurobindo Pharma

Stock Info

 Aurobindo Pharmaceuticals is an India-based leading global generic

CMP

611

company. It’s predominately formulations Export Company, with USA &

Europe contributing ~80% of sales (FY2018).

890

 Recently it acquired dermatology and oral solids businesses from Sandoz Inc.,

Upside

45.7%

USA. With this acquisition, Aurobindo adds sales of US$0.9bn and would

Sector

Pharmaceuticals

become the 2nd largest generic player in the US by number of prescriptions.

Market Cap (` cr)

34,926

Beta

1.2

 Aurobindo has a robust pipeline (has filed 519 ANDA’s; second highest

52 Week High / Low

838/566

amongst Indian companies) & is investing to enhance its foray into complex

generic (mainly injectables, ophthalmic etc.) & biosimilar, which will drive its

next leg of growth.

3 year-Chart

1,000

 We expect Aurobindo to report net revenue CAGR of ~22% & net profit to

900

800

grow at ~19% CAGR during FY2018-20E, aided by acquisitions. Valuations of

700

the company are cheap V/s its peers and own fair multiples of 17-18x.

600

500

Key Financials

400

300

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

200

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

100

FY2019

19,226

20.4

2,365

41.5

17.1

14.7

2.6

10.3

2.1

FY2020E

24,234

21.9

3,438

58.9

22.2

10.4

2.4

7.2

1.6

Source: Company, Angel Research

Bata India

Stock Info

 Bata India Ltd (BIL) is the largest footwear retailer in India, offering footwear,

CMP

1,459

accessories and bags across brands like Bata, Hush Puppies, Naturalizer,

1,643

Power, etc. BIL’s ~70% revenue is derived from Men & Kids segment and

Upside

12.7%

balance from women’s segment. BIL has over 1,400 Bata retail stores across

Sector

Footwear

India.

Market Cap (` cr)

18,829

 Further, over the last 3 years, the company has added 135 stores (net

Beta

0.9

addition). Going forward, the company has plans to open 500 stores (already

52 Week High / Low

1,478 / 813

identified 435 cities) mainly in tier-II and tier-III cities over the next 4-5 years.

 We expect BIL to report net revenue CAGR of ~17% to ~`4,100cr over

3 year-Chart

FY2019-21E mainly due increasing brand consciousness amongst Indian

1,600

consumers, new product launches and focus on women’s segment (high

1,400

growth segment). Further, on the bottom-line front, we expect CAGR of ~18%

1,200

`422cr over the same period on the back of margin improvement

1,000

800

(increasing premium product sales).

600

Key Financials

400

200

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

3,497

16.4

358

27.9

17.6

52.7

9.3

31.4

5.1

FY2021E

4,100

16.5

422

32.9

17.7

44.6

7.9

26.4

4.4

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Stock Info

Blue Star

CMP

769

 BSL is one of the largest air-conditioning companies in India. With a mere 3%

867

penetration level of ACs vs 25% in China, the overall outlook for the room air-

Upside

12.9%

conditioner (RAC) market in India is favorable.

Sector

Cons.Durable

 BSL's RAC business has been outgrowing the industry by ~10% points over the

Market Cap (` cr)

7,362

last few quarters, resulting in the company consistently increasing its market

share. This has resulted in the Cooling Products Division (CPD)'s share in

Beta

0.2

overall revenues increasing from~23% in FY2010 to ~50% in FY2018

52 Week High / Low

825/507

(expected to improve to ~50-55% in FY20E). With strong brand equity and

higher share in split ACs, we expect the CPD to continue to drive growth.

3 year-Chart

 Going Aided by increasing contribution from the Unitary Products, we expect

900

the overall top-line to post revenue CAGR of ~13% over FY2018-20E and

800

700

margins to improve from 5.8% in FY2018 to 6.2% in FY2020E.

600

500

Key Financials

400

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

300

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

200

100

FY2020E

5,891

6.5

205

21.3

20.9

32.7

6.8

17.8

1.2

FY2021E

6,680

6.8

246

25.6

22.8

27.2

6.2

15.0

1.0

Source: Company, Angel Research

GMM Pfaudler Ltd.

Stock Info

 GMM Pfaudler Limited (GMM) is the Indian market leader in glass-lined (GL)

CMP

1,363

steel equipment used in corrosive chemical processes of agrochemicals,

1,570

specialty chemical and pharma sector. The company is seeing strong order

Upside

15.2%

inflow from the user industries which is likely to provide 20%+ growth outlook

for next couple of years.

Sector

Machinery

Market Cap (` cr)

1,993

 GMM has also increased focus on the non-GL business, which includes mixing

Beta

0.7

equipment, filtration and drying equipment for the chemical processing

industry. It is expecting to increase its share of non-GL business to 50% by

52 Week High / Low

1,483/780

2020.

3 year-Chart

 GMM is likely to maintain the 20%+ growth trajectory over FY18-20 backed

1,600

by capacity expansion and cross selling of non-GL products to its clients.

1,400

1,200

Key Financials

1,000

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

800

600

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

400

FY2019

502

16.99

50.5

34.6

19.0

39.4

7.4

22.3

3.8

200

FY2020E

591

17.1

47.3

20.4

28.8

5.2

17.9

3.0

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

HDFC Bank

Stock Info

CMP

2,495

 Bank has planned to improve business with digital platform and engaging with

2,660

mid market client. Banks next leg of growth road map 1) increasing branch

Upside

6.6%

opening number from 300 current to 600 annually in non urban area. 2)

Increase POS 4x to 4mn by FY21 and double the virtual relationship manager

Sector

Banking

client in 3 years.

Market Cap (` cr)

680,334

 Asset Strong and steady NIM of 4.4% on the back of lower cost of funds and

Beta

0.8

lower credit cost will ensure healthy return ratios for the company. Despite

52 Week High / Low

2,502/1,884

strong growth, the company has maintained stable asset quality (GNPA/NPA -

1.3%/0.4%).

3 year-Chart

 HDFC bank’s subsidiaries, HDB Financial Services (HDBFS) and HDFC

3,000

Securities continue to contribute well to the banks overall growth. Strong loan

2,500

book, well-planned product line and clear customer segmentation aided this

2,000

growth.

1,500

 We We expect the company’s loan growth to remain 22% over next two years

1,000

and earnings growth is likely to be more than 21%.

500

Key Financials

Y/E

NII

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

58,049

4.4

25,611

94.0

605

1.9

16.5

26.5

4.1

FY2021E

70,343

4.4

31,312

115.0

701

1.9

17.5

21.7

3.6

Source: Company, Angel Research

ICICI Bank

Stock Info

CMP

437

 ICICI bank has taken a slew of steps to strengthen its balance sheet. Measures

490

such as Incremental lending to higher rated corporate, reducing concentration

Upside

12.2%

in few stressed sectors and building up the retail loan book. The share of retail

loans in overall loans increased to 60% (Q4FY19) from 38% in FY12.

Sector

Banking

 ICICI bank’s slippages remained high during FY18 and hence GNPA went up

Market Cap (` cr)

281,314

to 8.8% vs. 5.8% in FY16. We expect addition to stress assets to reduce and

Beta

1.7

credit costs to further decline owing to incremental lending to higher rated

52 Week High / Low

443/257

corporate and faster resolution in Accounts referred to NCLT under IBC.

 The gradual improvement in recovery of bad loans would reduce credit costs

3 year-Chart

that would help to improve return ratio. The strength of the liability franchise,

500

shift in loan mix towards retail assets and better rated companies, and

450

400

improvement in bad loans would be a key trigger for multiple expansion.

350

300

250

Key Financials

200

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

150

100

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

31,749

3.4

12,600

169

1.2

2.6

FY2021E

37,524

3.5

15,448

188

1.3

2.3

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Stock Info

Jindal Steel & Power Ltd.

CMP

141

 The company has increased its crude steel capacity more than double in last

250

five years from 3.6 MTPA to 8.6 MTPA and currently running at ~65%

Upside

77.5%

utilization.

 Owing to continuous demand of steel from infrastructure, housing and auto

Sector

Steel & Power

sectors along with limited addition of steel capacity in near term and favorable

Market Cap (` cr)

14,650

government policies augur well for JSPL to perform well going forward, we

Beta

2.6

expect JSPL’s utilization to improve to 80-85% by FY20 along with reduction in

52 Week High / Low

246/123

debt led by improving in profitability.

 From April 2019, power segment has seen improvement in PLF and now

3 year-Chart

producing 1,700 megawatts, up from the average 1,400 megawatts, this will

350

lead improvement in PLF from 34% to 50%.

300

 Expect 515MW of PPA from NHPC currently, JPL emerged as L1 bidder.

250

200

 JSPL is trading at attractive valuation to its peer, we value the stock based on

150

asset based approach of Steel segment on EV/Tone basis and Power segment

100

on EV/MW basis.

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

45,561

22.4

2,076

7.0

6.7

0.5

3.9

0.9

Source: Company, Angel Research

FY2021E

47,450

24.1

3,239

9.0

4.3

0.4

3.2

0.8

Source: Company, Angel Research

KEI Industries

Stock Info

CMP

477

 KEI’s current order book (OB) stands at `3,866cr (segmental break-up: out

which EPC is around `1,508cr and balance from cables, substation & EHV). Its

612

OB grew by ~28% in the last 3 years due to strong order inflows from State

Upside

28.5%

Electricity Boards, Power grid, etc.

Sector

cable

 KEI’s consistent effort to increase its retail business from 30-32% of revenue in

Market Cap (` cr)

3,778

FY18 to 40-45% of revenue in the next 2-3 years on the back of strengthening

Beta

1.3

distribution network (currently 926 which is expect to increase `1,500 by FY20)

52 Week High / Low

532/248

and higher ad spend.

 KEI’s export (FY19 - 16% of revenue) is expected to reach a level 20% in next

3 year-Chart

two years with higher order execution from current OB and participation in

600

various international tenders. We expect KEI to report net revenue CAGR of

500

~1% to ~`5,610cr and net profit CAGR of ~25% to `276cr over FY2019-

400

21E.

300

200

Key Financials

100

Y/E

Sales

OPM

PAT

EPS ROE P/E

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

4,878

10.5

233

30.2

3.7

15.8

8.4

0.9

FY2021E

5,610

10.5

276

35.8

22.3

13.3

7.1

0.8

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Maruti Suzuki

Stock Info

CMP

6,559

 Maruti Suzuki continues to hold ~52% market share in the passenger vehicles.

8,552

The launch of exciting models has helped the company to ride on the

Upside

30.4%

premiumization wave that is happening in the country. In the last two years,

Sector

Automobile

company has seen improvement in the business mix with the pie of the utility

vehicles growing from ~4% to current 15%. The 2-3 months of waiting period

Market Cap (` cr)

197,264

of new models, launch of Swift Hatchback in January, 2018 and headroom

Beta

1.0

for more capacity utilization at Gujarat plant is the near term earning triggers.

52 Week High / Low

9,923/6,324

 Due to the favorable business mix, company has also been seeing

3 year-Chart

improvement in the margins. Company has already moved from ~11-12%

12,000

Together with higher operating leverage at Gujarat plant, increasing Nexa

10,000

outlets, and improving business mix, we believe that company has further

8,000

room to improve its margins.

6,000

4,000

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

2,000

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020

94,790

14.2

8,670

287.1

16.7

23.2

4.52

11.5

1.6

FY2021E

107,896

14.5

9,970

330.1

17.2

20.2

3.78

9.4

1.4

Source: Company, Angel Research

Mahindra & Mahindra Ltd.

Stock Info

 M&M is an India-based company, operating in nine segments: automotive,

CMP

667

farm equipment, IT services, financial services, steel trading & processing,

1,050

infrastructure, hospitality, Systech and Others (comprising logistics, after-

Upside

57.6%

market, two wheelers and investment).

Sector

Automobile

 IMD has predicted a near normal monsoon for 2019 for the third consecutive

year which should be a strong trigger for tractor sales growth. In our view,

Market Cap (` cr)

83,325

strong growth in tractor industry would benefit M&M the most due to strong

Beta

0.8

brand recall and leadership position in farm tractor.

52 Week High / Low

992/598

 We expect M&M to report net revenue CAGR of ~9% to ~`63,184cr over

3 year-Chart

FY2019-21E mainly due to healthy growth in automobile segment like Utility

1,200

Vehicles (on the back of new launches and facelift of some models) and strong

1,000

growth in Tractors segment driven by strong brand recall and improvement in

800

rural sentiment. Further on the bottom-line front, we expect CAGR of ~9% to

600

`5,107cr over the same period on the back of margin improvement.

400

Key Financials

200

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

57,337

12.4

4,756

40.0

12.6

16.7

2.1

8.5

1.0

Source: Company, Angel Research

FY2021E

63,184

12.4

5,107

42.9

13.9

15.5

2.2

7.8

1.0

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Stock Info

Parag Milk Foods

CMP

261

 Parag Milk Foods (PARAG) is one of the leading dairy products companies in

330

India. The company has been successful in creating strong brands like GO,

Upside

26.8%

Gowardhan and in introducing new products like Whey Protein. It has become

Sector

Dairy

the 2nd player in processed cheese (after Amul) in a short span of 10 years

Market Cap (` cr)

2,264

and commands 33% market share.

Beta

1.1

 Value Added Products like cheese, whey protein enjoy higher gross margins of

52 Week High / Low

344/197

25-45% versus 6-8% entailed in liquid milk. VAP forms ~66% to its revenue

(the highest among the listed players versus 25-30% for others). Driven by

3 year-Chart

recently launched products and higher share of VAP, its operating margins

400

would improve in next few years.

350

300

 Thus we expect PARAG to report net revenue/PAT CAGR of

18%/19%

250

200

respectively over FY2019-21E.

150

100

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

2,822.9

10.6

150.9

17.9

14.9

14.5

2.1

7.8

0.8

FY2021E

3,246.3

9.8

163.7

19.5

13.9

13.4

1.8

7.3

0.7

Source: Company, Angel Research

RBL Bank

Stock Info

CMP

653

 RBL Bank (RBK) has grown its loan book at healthy CAGR of 53% over FY10-

775

19. We expect it to grow at 35% over FY19-21E. With adequately diversified,

Upside

18.7%

well capitalised B/S, RBK is set to grab market share from corporate lenders

Sector

Banking

(esp.PSUs).

Market Cap (` cr)

27,872

 The retail loan portfolio grew 57% YoY to `16,467cr and now constitutes 30%

Beta

0.9

of the loan book (18% share in 4QFY17).NIM has expanded to 4.23%, up

52 Week High / Low

716/439

25bps YoY, despite a challenging interest rate scenario on the back of a

changing portfolio mix and lower cost of deposits. The management stated

2 year-Chart

that the bank is slated to breach 4% NIM early in FY19.

800

700

 RBL Bank currently trades at 2.8x its FY2021E price to book value, which we

600

believe is reasonable for a bank in a high growth phase with stable asset

500

quality.

400

300

200

Key Financials

100

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

3,500

3.9

1,291

200

1.4

3.3

FY2021E

4,804

4.0

1,861

235

1.5

2.8

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Safari Industries

Stock Info

CMP

663

 Safari Industries Ltd (Safari) is the third largest branded player in the Indian

1,000

luggage industry. Post the management change in 2012, Safari has grown its

Upside

50.8%

revenue by 6x in the last 7 years. This has been achieved by foraying in many

Sector

Luggage

new categories like back pack, school bags (via acquisition of Genius and

Genie) and improvement in distribution networks.

Market Cap (` cr)

1,476

Beta

0.3

 Its margins have more than doubled from 4.1% in FY2014 to 9.8% in FY2018,

52 Week High / Low

1,005/608

driven by launch of new product categories and business. We expect it to

maintain 9%+ margins from FY2018 onwards led by regular price hikes, shift

3 year-Chart

towards organized player and favorable industry dynamics.

1,200

 We expect its revenue to grow by a CAGR of ~37%/49% in revenue/ earnings

1,000

over FY2018-20E on the back of growth in its recently introduced new

800

products.

600

400

Key Financials

200

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2019

577

9.3

26.9

13.9

55.3

7.4

2.8

FY2020E

785

10.4

47.0

21.1

19.1

31.4

7.3

2.0

Source: Company, Angel Research

Shriram Transport Finance

Stock Info

CMP

1,068

 SHTF's primary focus is on financing pre-owned commercial vehicles. We

1,470

expect AUM to grow at CAGR of 15% over FY2019-21E led by pick up in

Upside

37.7%

infra/ construction Post 2019 elections, macro revival and Ramping up in rural

distribution.

Sector

Financials

Market Cap (` cr)

24,619

 In last three year SHTF, GNPA and credit cost has been increased primarily

Beta

0.9

due to the transition of NPA recognition from 180DPD to 90DPD (Q4FY18).

52 Week High / Low

1,476/904

Q1FY19 onwards asset quality started witnessing steady improvement, and we

expect this trend to continue.

3 year-Chart

 We expect STFC to report RoA/RoE to2.7%/17.6% in FY2021E respectively. At

1,800

1,600

CMP, the stock is trading at 1.3x FY2021E ABV and 7x FY2021E EPS, which

1,400

we believe is reasonable for differentiated business model with return ratios.

1,200

1,000

800

Key Financials

600

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

400

200

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2020E

8,804

8.2

2,910

128

813

2.6

1.5

FY2021E

10,305

8.3

3,531

156

953

2.7

1.3

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

TTK Prestige

Stock Info

CMP

6,664

 TTK Prestige (TTK) is the leading brands in kitchen appliances with 40%+

7,708

market share in organized market. It has successfully transformed from a

Upside

15.7%

single product company to a multi product company offering an entire gamut

of kitchen and home appliances (600+ products).

Sector

Houseware

Market Cap (` cr)

9,328

 It has also launched an economy range - ‘Judge Cookware’ to capture the

Beta

1.2

untapped demand especially at the bottom end of the pyramid. It is expecting

good growth in cleaning solution.

52 Week High / Low

7,738/4,581

 It expects to double its revenue in the next five years backed by revival in

3 year-Chart

consumption demand, new 6 cr LPG connections under the Ujjawala Scheme,

10,000

inorganic expansion and traction in exports. We expect TTK to report a CAGR

9,000

8,000

of 16%/22% in revenue/PAT respectively over FY2018-20E.

7,000

6,000

5,000

Key Financials

4,000

3,000

Y/E

Sales

OPM

PAT

EPS

ROE P/E P/BV EV/Sales

2,000

1,000

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2019

2,106

15.1

192.4

138.7

16.7

48.0

7.9

4.4

FY2020E

2,648

14.3

246.3

213.4

17.7

31.2

5.5

2.9

Source: Company, Angel Research

July 4, 2019

Angel Top Picks | July 2019

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

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Ratings (Based on expected returns

Buy (> 15%)

Accumulate (5% to 15%)

Neutral (-5 to 5%)

over 12 months investment period):

Reduce (-5% to -15%)

Sell (< -15)