Narnolia Securities Limited positive to buy stocks of Prestige Estates, Tech Mahindra and Lupin with target price of Rs. 165, Rs 2130 and Rs. 1000 respectively. Also sell with a revised price target of Rs. 400 Cummins stock

1. IEA-Equity
Strategy
India Equity Analytics
6th Feb, 2014
Daily Fundamental Report on Indian Equities
LUPIN : Strong Results
"BUY"
Edition : 200
6th Feb 2014
Lupin posted its 3QFY14 results with net sales at Rs 2983 Cr up 20.8% YoY led by strong sales growth in American as well as Indian markets. The
US formulation business sales including (IP Sales) grew by 31 % YoY to Rs 1356 Cr and it constitutes 45 % of the total sales.
........................................................... ( Page :2-3)
Tech Mahindra :"boys to men; on $5bn journey"
"BUY"
6th Feb 2014
For 3QFY14, TECHM witnessed better set of numbers than expectation and other nearest players in IT mid cap space with 2.7% sales growth in
INR term and 4.2% in USD term led by 3.3% volume, sequentially.Post merger with Satyam, strong demand traction in Telecom (Non BT) has
improved and company's attractive deal win ratios make us optimistic view on the stock and we also expect to see some improvement in margin
front. ........................................................... ( Page : 4-6 )
CUMMINS INDIA: "Margin revive….."
"REDUCE"
6th Feb 2014
At the CMP of Rs.445, the stock P/E ratio is at 20.9x/19.3xFY14-15E respectively. EPS of the company for the earnings for FY14-15E is seen at Rs.
21.3/23.0/respectively. We revised our outlook on stock from hold to sell with a revised price target of Rs. 400 .
................................................... ( Page : 7-8)
Prestige Estates: "Volume growth & sustained realization to drive out
performance "
"BUY"
6th Feb 2014
At the current CMP of Rs. 145, the stock is trading at a PE of 13.7x FY14E & 11.7x FY15E . The company can post EPS of Rs. 10.3 & Rs. 12.1 in
FY14E & FY15E and RoE of 11.3% & 12.0%. Prestige Estates remains well on track to achieve its sales guidance for FY14 at Rs. 4300 crore as the
management commentary on the result call regarding launches in Q3FY14 as well as through the year remained extremely positive. We maintain
our target price to Rs. 165 and maintain our buy rating on stock . ......................................... ( Page : 9 - 10)
DIVISLAB : Strong Results
"NEUTRAL"
5th Feb 2014
The company registered its 3QFY14 net sales at Rs 687 Cr up by up 29% YoY led by strong growth across its key molecules. There has been
recovery in ex-currency growth from the high single digits witnessed in the past two quarters. …………………. ( Page : 11-12)
Sobha Developers Ltd: "New launches to spur growth"
"BUY"
5th Feb 2014
on back of cut down by managemet of FY14E guidence (Sale volume 3.76 mnsft, earlier 4.2 mnsft and Sales value 2200 crore, earlier, 2600 crore)
we cut down our FY14-FY15E earninng estimates by 26%/15%. We expect the sales of the company to grow by 17% & by 20% yoy inFY14E &
FY15E, however operating margin will sustain at 28.0%/28.5% over the same period. At the CMP of Rs. 276 the stock is trading at PE of 11.0x
FY14E & 8.5x FY15E. We maintain our "Buy" rating on stock with revised price target of Rs. 350 per share based on P/BV of 1.5x and 1.3x of
FY14E and FY15E. ........................................ ( Page : 13-14)
Suprajit Engineering Ltd: "On top gear….."
"BUY"
5th Feb 2014
At the CMP of Rs.52, the stock P/E ratio is at 11.4x/9.9x/8.5x for FY14-16E respectively. EPS of the company for the earnings for FY14-15E is seen
at Rs. 4.3/5.3/6.2 respectively. Net Sales of the company are expected to grow at a CAGR of 15%over FY14-16E. We expect that the company
surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We maintain ‘Buy’ in this
particular scrip with a target price of Rs 65 for medium to long term investment. .................................. ( Page : 15-16)
Narnolia Securities Ltd,

2. LUPIN
Result Update
BUY
CMP
Target Price
Previous Target Price
Upside
Change from Previous
915
1000
9%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs, Cr)
Average Daily Volume
Nifty
500257
LUPIN
951/569
41,018
395892
6022
Stock Performance-%
1M
Absolute
Rel. to Nifty
-2
1
1yr
53.4
52.8
YTD
48.3
35.9
"BUY"
06th Feb' 14
Strong Results
Lupin posted its 3QFY14 results with net sales at Rs 2983 Cr up 20.8% YoY led by strong
sales growth in American as well as Indian markets. The US formulation business sales
including (IP Sales) grew by 31 % YoY to Rs 1356 Cr and it constitutes 45 % of the total
sales. The Indian formulation business grew by 14% YoY to Rs 650 Cr and it contributed
22% of the company’s overall revenue for the quarter .The business from other geographies
viz Japan and South Africa also have grown well with registering growth of 10% and 18%
respectively.API (Active Pharmaceutical Ingredient) net sales grew by 26% to Rs 297.3 Cr
during the quarter as compared to Rs 235.3 Cr for 3QFY13 and contributed 10% of
company’s consolidated revenues.
The operating EBITDA for the quarter came at Rs 773 Cr and OPM at 25.6%.The material
cost during the quarter decreased by 30bps to Rs 1121 Cr and this constitutes 37.6%
of net sales. The manufacturing and other expenses decreased by 90 bps to Rs 749 Cr for
the quarter while employ cost deceased by 30 bps to Rs 387 Cr. The revenue expenditure
on R&D stands at Rs 271 Cr which is 9.1 % of the 3QFY14 sales.
The net profits for the quarter came at Rs 484 Cr and NPM at 15.8 % .The overall impact of
Forex on net profits was a loss of Rs 68.8 Cr of which Rs 25.5 Cr forex gain is reflected in
other income while the corresponding forex loss is captured across various other P&L
Lines.
Balance Sheet Highlights
st
Share Holding Pattern-%
Promoters
FII
DII
Others
Current 2QFY14 1QFY1
4
46.8
46.8
46.8
31.9
31.5
30.7
11.3
12.1
12.4
10.0
9.7
10.1
One Year Price vs Nifty
> Operating WC increased to Rs 2769.5 Cr as on 31 Dec 2013 as against Rs 2674.3 Cr as
St
on September 2013.The working capital number of days stood at 94 days as on 31 Dec
2013.
> Capital Expenditure was Rs 104.1 Cr in the quarter
Recent Developments
Company filed 5 ANDA approvals in the quarter .Cumulative ANDA filings with US FDA now
stands at 186 with the company having received 96 approvals till date. The company
received 5 approvals from European regulatory authorities in the quarter.
Company acquired Nanomi B.V of Netherlands and with this acquisition company has
forayed into technology intensive complex injectables space. As per management with the
use of Nanomi’s proprietary technology platform, Lupin would be able to make significant in
roads into the niche area of complex injectables.
View & Valuation
The company at its CMP of Rs 915 is trading at 23 times of one year forward FY14 EPS of
Rs 39.In the light of strong results ,management commentary and strong business
outlook going forward we maintain BUY for the stock with Target price 1000.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
3022
773
484
25.6%
16.0%
2QFY14
2668
660
417
24.7%
15.6%
(QoQ)-%
13.3
17.1
16.1
80bps
40bps
3QFY13
2501
606
342
24.2%
13.7%
Rs, Crore
(YoY)-%
20.8
27.6
41.5
130bps
230bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
2

3. LUPIN
Sales and PAT Trend (Rs)
Company posted its 3QFY14 results with net
sales at Rs 2983 Cr up 20.8% YoY led by
strong sales growth in American as well as
Indian markets.
(Source: Company/Eastwind)
OPM %
The material cost during the quarter
decreased by 30bps to Rs 1121 Cr and this
constitutes 37.6% of net sales.
(Source: Company/Eastwind)
NPM %
The overall impact of Forex on net profits
was a loss of Rs 68.8 Cr of which Rs 25.5 Cr
forex gain is reflected in other income while
the corresponding forex loss is captured
across various other P&L Lines.
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
3

4. Tech Mahindra
"BUY"
6th Feb' 14
"boys to men; on $5bn journey"
Result update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
BUY
1838
2130
1875
16%
14%
532755
TECHM
1906/895
42876
191827
6022
Stock Performance
Absolute
Rel.to Nifty
1M
0.12
3.26
1yr
89.77
88.67
YTD
51.9
51.8
Share Holding Pattern-%
Current
2QFY14 1QFY14
Promoters
36.34
36.46 47.17
FII
40.42
32.59 26.79
DII
9.08
15.13 15.83
Others
14.16
15.82 10.21
1 year forward P/E-x
Broad-based performance with positive outlook, positive view retained;
For 3QFY14, TECHM witnessed better set of numbers than expectation and other
nearest players in IT mid cap space with 2.7% sales growth in INR term and 4.2% in
USD term led by 3.3% volume, sequentially. Net profit increased to Rs 1,001cr from Rs
718.4cr including exceptional gains. After excluding that, net profit stood at Rs 663.22
cr for the quarter.
The company remains confident on better demand and expects healthy client budgets
in FY15E. The number of large deals in the pipeline is 6-8 at any point of time in the
past few quarters, but the decision-making is unpredictable to tell about the future
deal wins in the near term.
EBITDA margin at steady mark: During the quarter, its EBITDA margin was unchanged at
23.2% on Sequential basis, while improved 230bps on YoY basis. Management is very
confident to retain same level of margin picture in near future despite salary hike at a
rate of 7-8% in next quarter.
US revenue at nascent stage: During the quarter, revenue from US increased by 10%,
while revenue from Europe and RoW declined by 3.6% and 1.8% on QoQ basis. US
contribute 47%, Europe 31% and RoW 22% on sales. Post earning management quoted
for better outlook in Asian markets with greater traction in Australia and Africa in near
term.
Best performance across all verticals: During the quarter, Except Technology, Media
and Entertainment all verticals reported good growth. BFSI was up by 14% and Telecom,
Manufacturing, retail and others reported 2.7% growth each in INR term. While,
Technology, Media and Entertainment dipped by 6%, sequentially. The company is
focusing on BFSI, manufacturing and telecom.
Employee Metrics: The Total headcount for the year is at 87399 with QoQ net addition
of 2165 as on 31st December 2013.The attrition has been slightly inching up in the last 3
quarters. However, wage hike could counter this.
View and Valuation: Management is pitching an aspiration goal of USD 5bn revenue by
2015(CAGR at 24% for FY13-16E) through organic and inorganic initiatives and looking
for USD 0.5bn to USD 0.8bn as acquisition target going forward. Company is focussed
on its 6-pillar strategy i.e., selling 6 service lines of IT, infr- management, network
management, security services, value added services and services such as analytics to
telcos. On emerging space, mobility and digital would emerge as bigger bang for the
buck.
Post merger with Satyam, strong demand traction in Telecom (Non BT) has improved
and company's attractive deal win ratios make us optimistic view on the stock and we
also expect to see some improvement in margin front. At a CMP of Rs 1838, relatively
the stock is trading at a fair valuation, 12.2x of FY15E earnings . We maintain “BUY” on
the stock with a price target of Rs 2130.
Financials
Rs, Crore
3QFY14
2QFY14
(QoQ)-%
3QFY13
(YoY)-%
Revenue
4898.6
4771.5
2.7
3799.1
28.9
EBITDA
1136.3
1110.85
2.3
795.7
42.8
PAT
674.3
718.2
(6.1)
626.4
7.6
EBITDA Margin
23.2%
23.3%
(10bps)
20.9%
230bps
PAT Margin
13.8%
15.1%
(130bps)
16.5%
(170bps)
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
4

5. Tech Mahindra.
Sales (USD) and Sales growth-%(QoQ)
On $term, Sales growth was up by 4.4%
(QoQ) and 2.7% on INR term,
(Source: Company/Eastwind)
Margin-%
(Source: Company/Eastwind)
Employee Metrics-%
Attrition increased at 17%. still, lower than
other peers
(Source: Company/Eastwind)
Key Facts from Cnference Call (attended on 4th Feb 2014)
(1)The Company aspires revenues of USD 5 billion by 2015. This expects to be through
organic and inorganic initiatives (looking for USD 0.5 billion to 0.8 billion as acquisition
targets) going forward.
(2) Year 2014 would be better year than FY13, demand environment and Order pipeline is
looking good. They are more focus for mobility and digital projects.
(3) Despite salary hike in 4Q, margin would be on place. Wage hike in 4Q could impact
200bps in margin front, but management is confident to mitigate.
(4)Expecting utilisation rate to 77% from 75%(3QFY14) in near term.
(5)The tax rate expected to be 26% for the FY'14.
(6) Cash utilization only for acquisition and investment in emerging space.
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
5

6. Tech Mahindra.
Operating Metrics
Client contribution to revenue-%
Customer Active
Top 10 clients
Top 5 clients
Top client
Revenue mix - onsite/offshore (%)
Onsite
Offshore
Employee Metrics
Utilisation %
Attrition %
1QFY13
484.00
50.0%
40.0%
17.0%
2QFY13
475.00
51.0%
41.0%
14.0%
3QFY13
475.00
50.0%
39.0%
15.0%
4QFY13
516.00
50.0%
37.0%
13.0%
1QFY14
567.00
49.0%
37.0%
12.0%
2QFY14
576.00
48.0%
36.0%
12.0%
3QFY14
605
49%
37%
12.0%
48.0%
52.0%
48.0%
52.0%
48.0%
52.0%
48.0%
52.0%
51.0%
49.0%
51.0%
49.0%
52%
48%
75.0%
17.0%
74.0%
16.0%
76.0%
16.0%
77.0%
16.0%
76.0%
15.0%
75.0%
16.0%
75.0%
17.0%
Financials
Rs, Cr
Net Sales(mn)-USD
Net Sales
Employee Cost
Operation and other expenses
Subcontracting Cost
Total Expenses
EBITDA
Depreciation
Other Income
EBIT
Interest Cost
PBT
Tax
PAT
Growth-%
Sales-USD
Sales
EBITDA
PAT
Margin -%
EBITDA
EBIT
PAT
Expenses on Sales-%
Employee Cost
Subcontracting Cost
Operation and other expenses
Tax rate
Valuation
CMP
No of Share
NW
EPS
BVPS
RoE-%
Dividen Payout-%
P/BV
P/E
FY12
1157
11702.4
6591.9
2210.1
948.6
9750.6
1951.8
319.0
501.3
1632.80
107.3
2026.8
228.9
1797.9
FY13
2633
14332.0
8099.5
2287.3
882.0
11268.8
3063.2
389.6
212.2
2673.60
92.1
2793.7
647.9
2145.8
FY14E
3099.98
18817.38
9709.77
3198.95
1599.48
14508.2
4309.18
511.53
254.03
3797.65
93.14
3958.5
1078.7
2879.8
FY15E
3595.98
21396.09
11061.78
3530.36
1711.69
16303.8
5092.27
581.63
320.94
4510.64
86.80
4744.8
1257.4
3487.4
FY16E
4099.42
24801.49
12896.77
4216.25
1984.12
19097.1
5704.34
674.20
372.02
5030.14
82.58
5319.6
1383.1
3936.5
2.7%
13.8%
11.9%
9.6%
127.6%
22.5%
56.9%
19.4%
17.7%
31.3%
40.7%
34.2%
16.0%
13.7%
18.2%
21.1%
14.0%
15.9%
12.0%
12.9%
16.7%
14.0%
15.4%
21.4%
18.7%
15.0%
22.9%
20.2%
15.3%
23.8%
21.1%
16.3%
23.0%
20.3%
15.9%
56.3%
8.1%
18.9%
11.3%
56.5%
6.2%
16.0%
23.2%
51.6%
8.5%
17.0%
27.3%
51.7%
8.0%
16.5%
26.5%
52.0%
8.0%
17.0%
26.0%
652.5
23.2
4815.8
77.4
207.3
37.3%
3.3%
3.1
8.4
1081.7
23.2
5529.1
92.4
238.0
38.8%
2.8%
4.5
11.7
1838.0
23.2
8273.0
124.0
356.1
34.8%
4.7%
5.2
14.8
1838.0
23.2
11624.6
150.1
500.4
30.0%
3.9%
3.7
12.2
1838.0
23.2
15425.2
169.5
664.0
25.5%
3.5%
2.8
10.8
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
6

7. CUMMINS INDIA Ltd.
CUM
"Reduce"
6th Feb' 14
"Margin revive….."
Result update
Reduce
CMP
Target Price
Previous Target Price
Upside
Change from Previous
445
400
510
-10%
-22%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
500480
CUMMINSIND
396/550
12334
83995
6022
Stock Performance-%
1M
-3
(0)
Absolute
Rel. to Nifty
1yr
-11
(12)
YTD
-10
(16)
Share Holding Pattern-%
Promoters
FII
DII
Others
4QFY14
51.0
17.0
18.2
13.8
1 yr Forward P/B
3QFY14 2QFY14
51.0
51.0
15.5
16.2
19.8
19.5
13.7
13.3
Strong operating performance, but weak below the line;
Cummins has registered 6% fall in revenue to Rs 1023.01 crore. But the operating margin has
expanded by modest 20 bps to 19.3% and that has marginally limited the impact at operating
level restricting the de-growth at operating profit to 5% to Rs 197.56 crore. Eventually the net
profit was lower by 37% to Rs 147.23 crore. The sharp fall in bottom-line came on escalated
based as the bottom-line of corresponding previous period is boosted by an EO income of Rs
47.50 crore compared to nil in Q3FY14. But for lower other income, absence of any EO item
and higher tax incidence the fall in bottom-line would have not been this steeper. downgrade
to SELL after KKC’s recent un and maintain our business view on (1) lack of growth in powergen
after a sharp decline, (2) weak nearterm exports outlook, (3) potential margin risk and (4)
limited upside from a cyclical upturn.
Result Highlights;
• The Value of production for the quarter was lower by 3% to Rs 1001.97 crore. However the
operating sales (excluding other operating income) was down by 7% to Rs 1000.57 crore.
Subdued revenue growth seems largely on account of dip in demand for power gen-sets as there
is considerable improvement in power situation in South Indian States, which hitherto drove the
demand for this segment. Moreover lower realization on exports with new prices being relatively
lower than corresponding previous period.
• Operating margin expanded by 20 bps to 19.3% and this is largely on account of pruning of
costs. Cost of traded goods as % to sales was lower by 200 bps to 4%. But all cost heads have
seen an increase with material cost (excluding cost of traded goods) was higher by 80 bps to
56.1%, the staff cost was up by 50 bps to 8.5% and the other expenses was up by 130 bps to
12.1%.
• Other income was lower by 64% to Rs 23.63 crore. The interest cost was up by 14% (to Rs 0.97
crore) and the depreciation cost was up by 13% to Rs 13.31 crore on the back of capacity
augmentation programme. Thus the PBT (before EO) was down by 21% to Rs 206.91 crore.
• EO for the quarter was nil compared to Rs 47.50 crore in the corresponding previous period.
Thus on escalated base the PBT (after EO) was lower by 33% to Rs 206.91 crore. Taxation in
absolute terms was lower by 21% to Rs 59.68 crore and the effective tax rate was higher at
28.8% compared to 24.4% in the corresponding previous period. Thus the net profit was down by
Valuations
At the CMP of Rs.445, the stock P/E ratio is at 20.9x/19.3xFY14-15E respectively. EPS of the
company for the earnings for FY14-15E is seen at Rs. 21.3/23.0/respectively. We revised our
outlook on stock from hold to sell with a revised price target of Rs. 400
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
1023.0
197.6
147.2
19.3%
14.1%
2QFY14
932.7
152.6
144.8
16.4%
14.6%
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
(QoQ)-%
9.7
29.4
1.7
(290)bps
(50)bps
Rs, Crore
3QFY13
(YoY)-%
1089.5
-6.1
208.6
-5.3
234.1
-37.1
19.1%
20 bps
20.3%
(620)bps
(Source: Company/Eastwind)
7

8. CUMMINS INDIA Ltd.
Key financials :
PARTICULAR
2010A
2011A
2012A
2013A
2014E
2015E
2845
122
2966
527
491
36
2
611
167
0
444
311
11.2
16.0
4043
80
4123
763
727
37
5
802
211
0
591
345
12.5
21.3
4117
123
4241
697
655
42
5
773
233
51
591
354
12.8
21.3
4589
207
4796
835
788
47
5
990
287
62
765
421
15.2
27.6
4120
207
4327
680
628
52
5
830
241
0
589
421
15.2
21.3
4532
207
4739
759
697
62
5
899
261
0
638
487
17.6
23.0
18.5%
15.0%
4.4%
3.1%
28.4%
28.6%
18.9%
14.3%
4.4%
2.5%
32.7%
33.0%
16.9%
13.9%
4.3%
2.6%
28.9%
29.2%
18.2%
15.9%
6.0%
3.3%
32.0%
32.2%
16.5%
13.6%
4.8%
3.4%
23.1%
23.2%
16.8%
13.5%
5.2%
3.9%
23.6%
23.8%
1561
0
1561
28
367
1806
0
1806
28
489
2043
0
2043
28
497
2387
0
2387
28
456
2555
0
2555
28
445
2706
0
2706
28
445
56.3
6.5
239.6
22.9
65.2
7.5
153.0
22.9
73.7
6.7
121.1
23.3
86.1
5.3
170.9
16.5
92.2
4.8
136.2
20.9
97.6
4.6
151.2
19.3
Performance
Revenue
Other Income
Total Income
EBITDA
EBIT
DEPRICIATION
INTREST COST
PBT
TAX
Extra Oridiniary Items
Reported PAT
Dividend (INR)
DPS
EPS
Yeild %
EBITDA %
NPM %
Earning Yeild %
Dividend Yeild %
ROE %
ROCE%
Position
Net Worth
Total Debt
Capital Employed
No of Share (Adj)
CMP
Valuation
Book Value
P/B
Int/Coverage
P/E
Ammount in crores
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
8

9. Prestige Estates Projects Ltd.
V-
"Buy"
6th Feb' 14
"Volume growth & sustained realization to drive out performance……."
Result update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
145
165
195
14%
0%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume
Nifty
533274
PRESTIGE
102/195
4,947
161,912
6,022
Stock Performance-%
1M
(10.1)
(7.1)
Absolute
Rel. to Nifty
1yr
(21.5)
(21.9)
YTD
(13.1)
(19.1)
Share Holding Pattern-%
Promoters
FII
DII
Others
4QFY14
75.0
17.4
6.3
1.3
1 yr Forward P/B
3QFY14 2QFY14
75.0
75.0
17.4
17.2
6.3
6.1
1.3
1.7
Prestige Estates posted muted revenue recognition trajectory, degrowing 12.5% yoy to Rs.
430.5 crore. On a sequential basis, the decline was 9.4%. EBITDA margins expanded by 570bps
qoq to 30.6%. PAT surged by 3.8% QoQ to Rs. 80.6 crore, increased by 12.5% yoy.. Volumes for
the quarter stood at 2.075 mn sft, to Rs. 1262 crore on the back of three new residential
launches in Bengaluru to the tune of 4.09 mn sft. Prestige Estates remains well on track to
achieve its sales guidance for FY14 at Rs. 4300 crore as the management commentary on the
result call regarding launches in Q2FY14 as well as through the year remained extremely
positive. We maintain our target price to Rs. 165 and maintain our buy rating on stock.
Result Highlights 3QFY14
Prestige Estates Projects said it sold 1,204 residential units and 0.026 million square feet (Mnsft)
of commercial space, aggregating to 2.075 Mnsft, amounting to Rs 1262 crore of sales in Q3
December 2013. Of the above, Prestige share is 904 units -1.55 Mnsft amounting to Rs 940.20
crore of sales, up by 24.69% from that of Q3 December 2012.In Q3 December 2012, the company
had sold 682 units aggregating 1.44 Mnsft of residential and commercial space, amounting to Rs
754 crore of sales - Prestige share. (Overall sales of 1.69 Mnsft of area amounting to Rs 873.90
crore). Collections rose 16.69% to Rs 592.30 crore in Q3 December 2013 over Q3 December 2012
- Prestige share. (Overall collections for the Q3 December 2013 - Rs 713.30 crore). In Q3
December 2013, the company launched the first phase of its largest residential project- Prestige
Lakeside Habitat in Bangalore aggregating to 2.79 million square feet of total developable area.
The project is spread across 102 acres in area and consists of apartments and villas with total
developable area of 8.40 Mnsft.
Management Guidence FY14E
Company will exceed its presales guidance. Company has already done sales to the extent of Rs
1,200 crore plus and now it is just a question of production and these numbers getting
recognised because company need to touch the trigger of 30 percent to recognise these
numbers. During the year, company has made Rs 3,700 crore and guidance was Rs 4,300 crore.
On his outlook for the company's business, Prestige Estates Projects, says there is no slowdown
in the Bangalore market and aims to concentrate on the phase 2 and 3 of its Lakeside Habitat
project newt quarter
Valuation:
At the current CMP of Rs. 145, the stock is trading at a PE of 13.7x FY14E & 11.7x FY15E . The
company can post EPS of Rs. 10.3 & Rs. 12.1 in FY14E & FY15E and RoE of 11.3% & 12.0%.
Prestige Estates remains well on track to achieve its sales guidance for FY14 at Rs. 4300 crore as
the management commentary on the result call regarding launches in Q3FY14 as well as through
the year remained extremely positive. We maintain our target price to Rs. 165 and maintain our
buy rating on stock
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
430.5
131.9
80.6
30.6%
17.5%
2QFY14
475.3
118.7
77.6
25.0%
15.4%
(Source: Company/ Eastwind Research)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
(QoQ)-%
-9.4%
11.1%
3.8%
560 bps
210 bps
3QFY13
492.1
142.4
92.1
28.9%
18.0%
Rs, Crore
(YoY)-%
-12.5%
-7.4%
-12.5%
170 bps
(50) bps
(Standalone)
9

10. Prestige Estates Projects Ltd.
Key financials :
PARTICULAR
2011A
2012A
2013A
2014E
2015E
1543
68
1611
442
381
61
123
326
91
235
39
7.2
1.2
1052
34
1086
331
270
61
119
185
63
122
39
3.7
1.2
1948
64
2011
579
511
68
149
426
131
294
39
8.4
1.1
2532
64
2595
696
621
75
163
522
161
361
39
10.3
1.1
3038
64
3102
805
722
83
163
623
199
423
39
12.1
1.1
28.6%
14.6%
5.7%
1.0%
11.1%
6.5%
31.4%
11.3%
3.7%
1.2%
5.7%
3.0%
29.7%
14.6%
5.2%
0.7%
10.7%
5.7%
27.5%
13.9%
7.3%
0.8%
11.8%
6.6%
26.5%
13.7%
8.6%
0.8%
12.0%
7.4%
2114
1505
3619
33
125
2151
1864
4015
33
100
2743
2420
5163
35
163
64.4
1.9
3.1
17.5
65.6
1.5
2.3
26.8
78.4
2.1
3.4
19.4
Performance
Revenue
Other Income
Total Income
EBITDA
EBIT
DEPRICIATION
INTREST COST
PBT
TAX
Reported PAT
Dividend
EPS
DPS
Yeild %
EBITDA %
NPM %
Earning Yeild %
Dividend Yeild %
ROE %
ROCE%
Position
Net Worth
Total Debt
Capital Employed
No of Share
CMP
(Ammount in crore)
3065
3531
2420
2200
5485
5731
35
35
141
141
(Source: Company/Eastwind)
Valuation
Book Value
P/B
Int/Coverage
P/E
(Source: Eastwind Research)
87.6
1.6
3.8
13.7
100.9
1.4
4.4
11.7
(Figures in crore)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
10

11. DIVISLAB
"NEUTRAL"
05th Feb' 14
Strong Results
NEUTRAL
1337
1420
1350
6%
5%
Result Update
CMP
Target Price
Previous Target Price
Upside
Change from Previous
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs, Cr)
Average Daily Volume
Nifty
532488
DIVISLAB
1390/905
17842
5.43
6000
Stock Performance-%
1M
Absolute
Rel. to Nifty
7.6
11
1yr
26.2
26.17
YTD
15.5
3.5
Share Holding Pattern-%
Promoters
FII
DII
Others
Current 2QFY14 1QFY1
4
52.1
52.1
52.2
16.3
15.8
14.8
13.2
12.5
12.5
18.5
19.5
20.5
One Year Price vs Nifty
The company registered its 3QFY14 net sales at Rs 687 Cr up by up 29% YoY led by strong
growth across its key molecules. There has been recovery in ex-currency growth from the
high single digits witnessed in the past two quarters.
The operating EBITDA for the quarter under review came at Rs 288 Cr and OPM at
41.7%.The operating margins improve by almost 760bps on the back of improvement in
company’s operating metrics, currency benefits and lower power cost . The RM cost to
sales for the quarter came at 36% while it was 49 % for the same time last fiscal. The
employ cost as percentage of sales also showed improvement of 100 bps on yearly basis.
The company has cut down its other expenses for the quarter to Rs 88 and it stands at 13
% of the net sales from 8% a year ago.
The profits after tax came at Rs 218 Cr and NPM at 31.7 %.The other income for the
quarter came at Rs 8 Cr verses 22 Cr for the same time last fiscal. The tax rate for the
quarter was lower on yearly basis at 20 %.Forex Loss for the current quarter amounted to
Rs 5 Cr while there was a forex gain of Rs 16 Cr during the corresponding quarter last year.
Key takeaways from management interaction
> Sales from DSN SEZ (all 5 units) are at of Rs 3.3 Bn for 9MFY14 (versus Rs 2.2 Bn in
FY2013). The company has total investments of Rs 6.0 Bn in the DSN SEZ and expects the
asset turnover to be 1.8-2.0 times.
> Carotenoid sales for 9MFY14 are at Rs 910 Mn and expected to reach Rs1.5 Bn for
FY2015.
>The company expects the inspection (by regulatory/customers) for the 3 additional units at
DSN SEZ in 4QFY14. Sales from these units are expected to ramp up in 2QFY15.
> There has been reduction in power and fuel cost since August 2013 with 160 bps decline
on a sequential basis.
>CWIP is at Rs1.8 Bn at the end of 9MFY14. There has been a sharp increase in
receivables at Rs 7.1 Bn – 108 days versus 86 days in FY2013. Inventory days have
improved to 140 days in 9MFY14 versus 161 days in 1HFY14.
View & Valuation
The stock at CPM of Rs 1337 is trading at 22.05 x of one year forward FY14E EPS of Rs
61.The stock has achieved our recommended Target price of Rs 1350 and therefore
we change our view to Neutral from BUY. The strong 3QFY14 results ,improvement in
operating metrics, Currency movement are few factor which still provide some upsides. We
have slightly revised our target price upwards to Rs 1420 based on our analysis.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
689
287
218
41.7%
31.6%
2QFY14
567
249
205
43.9%
36.2%
(QoQ)-%
21.5
15.3
6.3
(230bps)
(450bps)
3QFY13
534
182
143
34.1%
26.8%
Rs, Crore
(YoY)-%
29.0
57.7
52.4
760bps
490bps
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
11

12. DIVISLAB
Sales and PAT Trend (Rs)
Net sales at Rs 687 Cr up by up 29% YoY led
by strong growth across its key molecules.
(Source: Company/Eastwind)
OPM %
Operating margins improve by almost 800bps
on the back of improvement in company’s
operating metrics, currency benefits and
lower power cost .
(Source: Company/Eastwind)
NPM %
The tax rate for the quarter was lower on
yearly basis at 20 %.Forex Loss for the current
quarter amounted to Rs 5 Cr
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
12

13. Sobha Developers Ltd.
"Buy"
5th Feb' 14
"New launches to spur growth….."
Result update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
276
350
460
27%
-24%
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
532784
SOBHA
282/472
3052
105448
6002
Stock Performance-%
1M
-17
(14)
Absolute
Rel. to Nifty
1yr
-36
-35
YTD
-21
(27)
Share Holding Pattern-%
Promoters
FII
DII
Others
3QFY14
60.6
32.7
2.9
3.9
1 yr Forward P/B
2QFY14 1QFY14
60.6
60.6
33.2
33.5
2.6
2.8
3.7
3.1
Despite of week volume numbers in NCR & Chennai Sobha reported its Q3FY14 numbers with a
topline that was inline street expectations at Rs. 544.3 crore. EBITDA for the quarter stood at
Rs. 149.0 crore, growing 8.4% yoy. The EBITDA margin were down 460 bps, yoy and stands at
27.4% during the quarter mainly on account of higher proportion of contractual projects
segment (this segment fetches about 20 per cent margins compared with property
development business’ 35 per cent and increase in input costs. However managemnet assures
that goinf forward margins should be around 28 percent and at profit before tax (PBT) and
profit after tax (PAT) level we are at 10 percent to 11 percent level. We maintain our "Buy"
rating on stock, however on back of cut down by managemet of FY14E guidence (Sale volume
3.76 mnsft, earlier 4.2 mnsft and Sales value 2200 crore, earlier, 2600 crore) we cut down our
FY14-FY15E earninng estimates by 26%/15% and also reduce our price target to Rs. 350
Lowered FY14E sales volume & revenue Guidence
Sobha had at the begning of the fiscal set guidence of new sales area of 4.20 mnsft at Rs. 2600
crore for the current fiscal. At the close of 3 quarters of FY14, the company has registered a new
sales area of 2.66 mnsft valued at 1737 crore. However, post 3QFY14 result, management had
lowered his sales volume and booking guidence to 3.76 mnsft and Rs. 2200 crore largely
attributed to delay in approvels
Growth story remain intact;
The firm had launched two new projects: 0.66 mnsft of developable area and 0.46 mnsft of
saleable area in 3QFY14 and six new projects: 3.38 mnsft of developable area and 2.01 mnsft of
saleable area in 9MFY14. In CY14, the firm has plans to launch 11 mnsft, and out of which 3
mnsft in 4QFY14 especially in the Rs7.5-15mn price bracket that continues to see stable demand
as a result we able to belive that company will able to achive is revised sales volume guidence for
FY14E.
Valuations;
on back of cut down by managemet of FY14E guidence (Sale volume 3.76 mnsft, earlier 4.2 mnsft
and Sales value 2200 crore, earlier, 2600 crore) we cut down our FY14-FY15E earninng estimates
by 26%/15%. We expect the sales of the company to grow by 17% & by 20% yoy inFY14E &
FY15E, however operating margin will sustain at 28.0%/28.5% over the same period. At the CMP
of Rs. 276 the stock is trading at PE of 11.0x FY14E & 8.5x FY15E. We maintain our "Buy" rating
on stock with revised price target of Rs. 350 per share based on P/BV of 1.5x and 1.3x of FY14E
and FY15E.
Financials
Revenue
EBITDA
PAT
EBITDA Margin
PAT Margin
3QFY14
544.3
149.0
58.3
27.4%
10.7%
2QFY14
540.8
143.3
56.6
26.5%
10.8%
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
(QoQ)-%
0.6
4.0
3.0
90 bps
(10) bps
Rs, Crore
3QFY13
(YoY)-%
429.8
26.6
137.4
8.4
52.6
10.8
32.0%
(460) bps
12.2%
(150) bps
(Source: Company/Eastwind)
13

14. SOBHA DEVELOPERS Ltd.
Key financials :
PARTICULAR
2010A
2011A
2012A
2013A
2014E
2015E
1130
4
1134
264
231
32
69
166
27
NA
139
25
2.4
13.6
1394
5
1400
360
332
28
86
251
67
NA
185
29
3.0
18.8
1408
6
1414
467
428
39
117
318
108
NA
210
49
5.0
21.4
1865
6
1870
548
489
59
171
324
107
NA
217
69
7.0
22.1
2180
6
2186
610
542
68
175
373
126
NA
247
69
7.0
25.2
2616
6
2622
746
674
72
200
479
162
NA
317
69
7.0
32.3
23.3%
12.2%
5.0%
0.9%
8.1%
6.5%
25.8%
13.2%
6.9%
1.1%
10.0%
8.7%
33.1%
14.9%
6.5%
1.5%
10.5%
10.1%
29.4%
11.6%
6.3%
2.0%
10.2%
11.1%
28.0%
11.3%
9.1%
2.5%
10.7%
11.1%
28.5%
12.1%
11.7%
2.5%
12.4%
11.8%
Performance
Revenue
Other Income
Total Income
EBITDA
EBIT
DEPRICIATION
INTREST COST
PBT
TAX
Extra Oridiniary Items
Reported PAT
Dividend (INR)
DPS
EPS
Yeild %
EBITDA %
NPM %
Earning Yeild %
Dividend Yeild %
ROE %
ROCE%
Ammount in crores
(Source: Company/Eastwind)
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
14

15. Suprajit Engineering Ltd.
"Buy"
5th Feb' 14
"On top gear….."
Result update
Buy
CMP
Target Price
Previous Target Price
Upside
Change from Previous
52
65
NA
25%
NA
Market Data
BSE Code
NSE Symbol
52wk Range H/L
Mkt Capital (Rs Crores)
Average Daily Volume (Nos.)
Nifty
532509
SUPRAJIT
32/62
624
10772
6002
Stock Performance-%
1M
-3
1
Absolute
Rel. to Nifty
1yr
56
57
YTD
57
51
Share Holding Pattern-%
Promoters
FII
DII
Others
3QFY14
51.8
1.9
1.6
44.7
1 yr Forward P/B
2QFY14 1QFY14
51.8
51.8
1.4
0.9
1.7
1.4
45.1
45.9
Despite adverse market conditions, for the quarter ended December 2013, Suprajit Engineering
registered a good 30% rise in consolidated sales (including other operating income) to Rs
159.53 crore. OPM jumped 260 basis points to 18.8% which lifted OP growth to 50% to Rs
30.02 crore. Other income stood at negative Rs 68 lakh (against Rs 29 lakh) and interest cost
jumped 27% to Rs 3.43 crore. After providing for depreciation (up 14% to Rs 2.26 crore), PBT
jumped 51% to Rs 23.65 crore. Whereas tax grew 62% to Rs 7.50 crore after which PAT grew
47% to Rs 16.1 crore. Aftermarket and non-automotive exports business clocked robust
growths of 35% and 45% respectively. Suprajit Engineering (SEL) continues to deliver robust
margins (at 16-17%) despite weakness in the automotive space. With healthy return ratios (RoE
~30%, RoCE ~25%) and strong balance sheet. We expect a revenue growth for FY14-16E by 15%
on back of strong capacity expansion plan abd growth potential in the business. We modelled
our valuation parameteres, which make us believe that share is trading at lower then fair value
at current market price. We have "Buy" rating on stock with a Target price of Rs. 65.
Capex will see the company having the world's largest cable capacities
The Board of Directors critically assessed the business prospects for the next two years and have
approved the following capex plans considering the business growth in the next two years.
• A new cable plant, measuring 80,000 sf.ft at Narsapura Industrial area, Karnataka, on the land
already in possession.
• A new cable plant measuring 50,000 sq.ft to meet the customer requirements in Chennai at the
recently allotted land at Vallam-Vadagal Industrial Park, Tamilnadu.
• Significant capacity expansion at the existing Pathredi plant, Rajasthan, with an additional plant
measuring 110,000 sq.ft.
• Complete renovation and refurbishing of an existing plant in Bommasandra, Bangalore to
relocate the aftermarket manufacturing facility to meet increased demand.
• Several balancing equipment and buildings in other existing units to fine-tune the capacities to
meet additional customer requirements.
• Additional equipments to add capacity at its 100% owned subsidiary, Suprajit Automotive.
• The capex for the above plans would be approximately Rs. 60 crore.
With these capex plans spread over the next 18-24 months, the company's standalone cable
capacity will exceed 200 mn cables / year and on a consolidated basis will exceed 225 mn cables
year. This would be one of the world's largest cable capacities.
Valuations
At the CMP of Rs.52, the stock P/E ratio is at 11.4x/9.9x/8.5x for FY14-16E respectively. EPS of
the company for the earnings for FY14-15E is seen at Rs. 4.3/5.3/6.2 respectively. Net Sales of
the company are expected to grow at a CAGR of 15%over FY14-16E. We expect that the company
surplus scenario is likely to continue for the next three years, will keep its growth story in the
coming quarters also. We maintain ‘Buy’ in this particular scrip with a target price of Rs 65 for
medium to long term investment.
Financials
Rs, Crore
3QFY14
2QFY14
(QoQ)-%
3QFY13
(YoY)-%
Revenue
159.5
123.1
29.6
123.1
29.5
EBITDA
30.0
21.0
43.0
20.0
49.9
PAT
16.2
13.9
16.2
10.8
49.1
EBITDA Margin
18.8%
17.1%
170 bps
16.3%
250 bps
PAT Margin
10.2%
11.1%
(90) bps
8.8%
140 bps
(Consolidated)
(Source: Company/Eastwind)
15
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.

16. SOBHA DEVELOPERS Ltd.
Key financials :
PARTICULAR
2010A
2011A
2012A
2013A
2014E
2015E
2016E
248
0
249
47
40
7
6
34
11
0
24
6
0.5
2.0
347
5
351
57
50
7
7
47
13
0
34
6
0.5
2.8
424
3
427
69
61
7
9
55
15
0
40
9
0.8
3.3
463
3
465
77
69
8
10
67
20
5
47
10
0.9
3.9
540
7
547
92
84
8
13
78
23
0
55
15
1.2
4.6
637
7
644
107
97
10
15
89
26
0
63
17
1.4
5.3
752
7
759
127
115
12
17
105
31
0
74
19
1.6
6.2
19.0%
9.4%
12.2%
3.1%
33.5%
22.5%
16.5%
9.6%
15.1%
2.8%
34.8%
25.3%
16.2%
9.3%
16.8%
3.8%
30.8%
23.2%
16.7%
10.1%
11.8%
2.6%
28.3%
20.6%
17.0%
10.0%
8.8%
2.4%
26.5%
19.6%
16.9%
9.8%
10.1%
2.7%
25.0%
18.9%
16.9%
9.7%
11.8%
3.0%
24.1%
18.7%
70
62
132
12
16
97
66
163
12
19
129
82
212
12
20
167
111
278
12
33
207
252
307
140
160
180
347
412
487
12
12
12
52 (Source:52
52
Company/Eastwind)
5.9
2.7
6.5
8.2
8.1
2.3
6.8
6.6
10.8
1.8
6.6
6.0
13.9
2.4
6.8
8.5
17.2
3.0
6.4
11.4
Performance
Revenue
Other Income
Total Income
EBITDA
EBIT
DEPRICIATION
INTREST COST
PBT
TAX
Extra Oridiniary Items
Reported PAT
Dividend (INR)
DPS
EPS
Yeild %
EBITDA %
NPM %
Earning Yeild %
Dividend Yeild %
ROE %
ROCE%
Position
Net Worth
Total Debt
Capital Employed
No of Share (Adj)
CMP
Ammount in crores
Valuation
Book Value
P/B
Int/Coverage
P/E
21.0
2.5
6.5
9.9
25.6
2.0
6.7
8.5
Narnolia Securities Ltd,
Please refer to the Disclaimers at the end of this Report.
16

17. N arnolia Securities Ltd
402, 4th floor 7/ 1, Lord s Sinha Road Kolkata 700071, Ph
033-32011233 Toll Free no : 1-800-345-4000
em ail: research@narnolia.com ,
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should use their own judgment for taking any investment decisions keeping in mind that
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otherwise in the recommended/mentioned securities/mutual funds/ model funds and
other investment products which may be added or disposed including & other mentioned
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