09january2024 India Daily

India Daily
January 09, 2024 NIFTY-50 [Jan 08]: 21,513
Contents
Special Reports
Initiating Coverage
JSW Infrastructure: Growth momentum to sustain for long but priced to perfection
Strategy
Strategy: Privatization - the 3P challenges
Daily Alerts
Change in Reco
Colgate-Palmolive (India): Valuation re-rating overdone
Sector Alerts
Specialty Chemicals: One more quarter of pain
Private Circulation Only.

This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities A ct of 1933
INITIATING COVERAGE
JSW Infrastructure (JSWINFRA) SELL

Transportation
CMP(₹): 216 Fair Value(₹): 180 Sector View: Attractive NIFTY-50: 21,513 January 08, 2024
Growth momentum to sustain for long but priced to perfection Company data and valuation summary
JSW Infra is well placed to grow at ~1.5X the pace of the sector for a long Stock data
time, leveraging (1) its growing relationship with the parent and (2) prospects
CMP(Rs)/FV(Rs)/Rating 216/180/SELL
of reinvesting cash flows and doing so in attractive terms, given the virtual
52-week range (Rs) (high-low) 248-142
duopoly in the private sector for bulk cargo. Our DCF-based FV of Rs180
Mcap (bn) (Rs/US$) 454/5.5
implies 15.5X March 2026E EV/EBITDA and builds in ~20% boost from asset
ADTV-3M (mn) (Rs/US$) 1,433/17.2
additions. We initiate coverage with a SELL rating due to the stiff 21X one-
year forward EV/EBITDA valuation, a 35% premium to ADSEZ. Shareholding pattern (%)
Initiate with SELL and Rs180 FV, baking in ~20% boost from new assets
2.54.5
1.3
2.5
Our asset-wise DCF implies ~15.5X 2-year forward EV/EBITDA—13.5X for the 3.6
existing concessions, ~1X for known asset additions (Jatadhar, Keni, PNP and
Fujairah) and ~1X for incremental asset wins (ports and logistics). We build in
the first two opportunities in our ~10% decadal volume CAGR estimate (7% on
85.6
an organic basis) and expect 60% EBITDA margins over time. We use an 11.25%
WACC. We build in a 20-year concession extension across ports at 20% lower Promoters FPIs MFs BFI s Retail Others
EBITDA margins. We ascribe a 1.3X multiple to US$2-2.2 bn of incremental
Price performance (%) 1M 3M 12M
1933
investments possible, with a cap of 2.5X FY2030E net debt-to-EBITDA.
Absolute (5) 26 0
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities Act of
Relationship with parent is single biggest determinant of growth in volumes Rel. to Nifty (8) 17 0
We remain upbeat about the key themes that JSW Infra is a play on: (1) JSW Rel. to MSCI India (10) 14 0
Steel's operations, (2) coastal shipping of thermal coal and (3) new investments
Forecasts/Valuations 2024E 2025E 2026E
in ports and logistics. We expect the first two drivers to lend a healthy, though
EPS (Rs) 4.5 6.4 7.5
lesser, support to volume growth than seen in FY2023. We expect the third
EPS growth (%) 25.4 42.3 17.5
theme of new investments to become a lot more relevant. JSW Infra has added
P/E (X) 48.3 33.9 28.9
projects equivalent to US$200-250 mn of EV in recent times and can add 10X
P/B (X) 5.9 5.2 4.6
of such a quantum while abiding by the 2.5X net debt-to-EBITDA by FY2030. The
EV/EBITDA (X) 25.1 20.1 18.5
returns on such investments may be healthy, given the duopolistic nature of
RoE (%) 16.0 16.2 16.8
port capacities for bulk cargo. The parent’s relationship would remain the single
Div. yield (%) 0.2 0.6 0.7
largest determinant of growth, planned capacity additions in steel and the
Sales (Rs bn) 37 45 50
prospects of wallet share gains. The relationship also increases the probability
EBITDA (Rs bn) 19 23 27
of JSW Infra renewing its concession at a select port (Goa).
Net profits (Rs bn) 9 13 16
We bake in 12%/15%/18% CAGRs in volumes/revenues/EBITDA over FY2023-26 Source: Bloomberg, Company data, Kotak Institutional Equities estimates
We factor in a 12%/15%/18% support to volumes/revenues/EBITDA over Prices in this report are based on the market close of
FY2023-26E. The 18% EBITDA CAGR bakes in a 3% inorganic volume CAGR January 08, 2024
boost and 2.5% CAGR boost from a normalization in cost structure (ESOP costs
and license fees). Investments in Keni and Jatadhar should largely be funded
by internal accruals, leading to ~1X net debt to EBITDA by end-FY2026.
Risks: Volatility linked to JSW steel; weak RoIC of recent concessions added
Incremental steel capacities of the group will have a lower reliance on input port
volumes versus that of the Dolvi l plant. We still build in an 8.5% CAGR for JSW
Infra's related exposure over FY2024-31 (comparable to that of JSW Steel as
per its plan). This has downside risks from: (1) the extent of wallet share gains
and (2) any deferral in steel capacities. We also note downside risk to the 1.3X
multiple on new investments, given the modest returns made on recent
investments. Full sector coverage on KINSITE
Aditya Mongia Deepak Krishnan Sai Siddhardha Pasupuleti

3
Overview
We estimate 13%/16%/19% revenue/EBITDA CAGRs over FY2023-26E
Summary of financials of JSW Infra (consolidated), March fiscal year-ends, 2020-26E (Rs mn)
Net sales EBITDA Net profit EBITDA margin RoAE RoACE EV/EBITDA
(Rs mn) Yoy (%) (Rs mn) Yoy (%) (Rs mn) Yoy (%) (%) (%) (%) (X)
2020 11,431 6,192 1,904 54.2 7.2 8.0 77.9
2021 16,068 40.6 8,175 32.0 2,913 53.0 50.9 10.5 8.7 60.0
2022 22,734 41.5 11,100 35.8 3,285 12.8 48.8 10.7 10.7 43.9
2023 31,966 40.6 16,202 46.0 7,398 125.2 50.7 20.6 18.6 29.4
2024E 36,695 14.8 18,587 14.7 9,306 25.8 50.7 16.0 19.1 24.9
2025E 44,802 22.1 23,464 26.2 13,256 42.4 52.4 16.2 19.9 19.9
2026E 49,629 10.8 26,646 13.6 15,570 17.5 53.7 16.8 18.0 18.4
Note:
(1) EV is calculated at CMP
Source: Company, Kotak Institutional Equities
Summary of financials of JSW Infra (consolidated), March fiscal year-ends, 2020-26E (Rs mn)
2020 2021 2022 2023 2024E 2025E 2026E
Profit model (Rs mn)
Net sales 11,431 16,068 22,734 31,966 36,695 44,802 49,629
EBITDA 6,192 8,175 11,100 16,202 18,587 23,464 26,646
Other income 942 737 1,057 1,781 1,766 1,801 1,704
Depreciation (2,019) (2,707) (3,695) (3,912) (4,423) (4,708) (5,268)
Interest (2,775) (2,279) (4,196) (5,961) (3,555) (3,273) (2,937)
Profit before tax 2,341 3,927 4,265 8,110 12,375 17,284 20,145
Income tax (376) (1,082) (955) (615) (2,973) (3,905) (4,429)
Profit after tax 1,965 2,845 3,310 7,495 9,401 13,379 15,716
Other comprehensive income (61) 68 (25) (97) (96) (123) (146)
Reported profit 1,904 2,913 3,285 7,398 9,306 13,256 15,570
Balance sheet (Rs mn)
Equity 25,482 28,912 32,721 39,947 77,348 87,502 99,429
Total borrowings 31,159 39,793 44,087 42,774 38,499 37,938 56,977
Lease liabilities 6,812 8,223 8,970 5,047 5,143 5,266 5,412
Deferred tax liability 1,242 194 2,520 66 66 66 66
Total liabilities 64,695 77,122 88,298 87,835 121,057 130,773 161,884
Net fixed assets 39,480 49,240 61,339 59,748 78,470 84,269 90,835
CWIP 7,503 11,250 797 460 4,882 14,737 41,368
Non-current investments 3,638 2,955 2,830 3,993 3,993 3,993 3,993
Other long-term assets (capital advances, security deposits) 2,183 1,978 5,821 5,054 5,054 5,054 5,054
Inventories 1,252 991 854 1,022 1,173 1,432 1,586
Trade receivables 5,022 4,115 6,013 4,024 4,619 5,639 6,247
Loans and advances 2,724 2,889 2,478 585 672 821 909
Cash 1,626 3,145 10,382 16,314 26,057 19,544 17,116
Other current assets 5,032 4,863 3,779 1,988 2,282 2,786 3,086
Trade payables 799 2,615 2,748 3,020 3,467 4,233 4,689
Provisions 55 82 89 79 91 111 123
Other current liabilities 2,911 1,609 3,065 2,254 2,587 3,159 3,499
Net Current Assets 10,265 8,553 7,224 2,266 2,601 3,175 3,517
Total assets 64,695 77,122 88,394 87,835 121,057 130,773 161,884
Free cash flow (Rs mn)
Operating cash flow excl. working capital 7,105 8,912 12,156 17,827 18,587 23,464 26,646
Working capital changes (3,587) 660 783 1,952 (335) (575) (342)
Capital expenditure (including acquisitions) (6,738) (6,701) (5,068) (2,794) (27,566) (20,363) (38,464)
Income tax paid (363) (497) (1,222) (1,807) (2,973) (3,905) (4,429)
Free cash flow to firm (3,583) 2,375 6,649 15,179 (12,288) (1,379) (16,590)
Ratios
Gross margin (%) 69.8 64.0 62.3 62.2 62.7 62.5 62.5
EBITDA margin (%) 54.2 50.9 48.8 50.7 50.7 52.4 53.7
PAT margin (%) 17.2 17.7 14.6 23.4 25.6 29.9 31.7
Net debt/equity (X) 1.2 1.3 1.0 0.7 0.2 0.2 0.4
RoAE (%) 7.2 10.5 10.7 20.6 16.0 16.2 16.8
RoIC (%) 8.0 8.7 10.7 18.6 19.1 19.9 18.0
JSW Infrastructure
Transportation India Research
4
Initiate with SELL and Rs180 FV, baking in a 20% boost from new assets
Our asset-wise DCF implies ~15.5X 2-year forward EV/EBITDA, building in a 13.5X multiple for the
existing concessions, ~1X for the known asset additions (Jatadhar, Keni and Fujairah) and ~1X
for incremental asset wins (ports and logistics). We build in the first two opportunities in our ~10%
decadal volume CAGR estimate (7% on an organic basis) and expect 60% EBITDA margins over
time. We value incremental assets at 1.3X investments possible, with a cap of 2.5X FY2030E net
debt-to-EBITDA. We use an 11.25% WACC. We build in a 20-year concession extension across
ports at 20% lower EBITDA margins.
We assume 10% decadal volume CAGR, 60% EBITDA margin over time at 11% WACC
We assume 10% volume growth over the next decade, of which 3% will come from known project
wins. Our 10% decadal volume CAGR assumption relies on a 7% CAGR from existing assets. The
remaining 3% contribution comes from known asset additions in the Fujairah (UAE), Jatadhar and
Kenny ports. The 7% CAGR assumption bakes in a healthy 7% CAGR in the key assets in Maharashtra,
dependent on the capacity expansion of the Dolvi steel plant (FY2027 onward) and increasing
relevance of third-party cargo at the Jaigarh Port (liquid, bulk). The Paradip Coal terminal should grow
at a higher 9% CAGR over time, given the strong tailwinds in coastal shipping and mechanized
operations. We expect the remaining existing assets to see a 6% CAGR, in line with growth in end-
markets.
Incremental asset wins determined by investments possible with 2.5X cap on FY2030E net debt to
EBITDA. Beyond the boost to FV coming from known prospects, we also boost FV by incremental
asset wins. We envisage JSW Infrastructure to reinvest its cash flows, ensuring a cap of 2.5X net debt
to EBITDA by end-FY2030E discounted by five years. This yields a value of investments amounting to
~US$1.8 bn, assuming an equal mix of greenfield and brownfield projects. We value the same at 1.3X
investment. JSW Infrastructure may be able to deploy half of this sum into port assets getting
concessioned from the central government. We base this on a 20% market share in the annual
potential Rs60 bn per annum of monetization of assets over the next six years. We envisage the
remaining quantum to get spent on overseas assets and/or logistics assets. What limits us from
ascribing a higher multiple than 1.3X on these investments is the weak track record thus far on return
profile of recent asset additions of the company. On a pre-tax basis, the recent asset additions have
reported a high single-digit RoIC in spite of reasonable 60%+ capacity utilization.
EBITDA margin to stabilize at closer to 60% levels. We expect EBITDA margin to improve to 56%/59%
by FY2026/33 from current 51% levels, largely on account ESOP expenses becoming negligible, lower
royalty and operating leverage benefits. We expect incremental improvement in profitability to be
contained by the addition of new asset wins. The same yields a flat RoIC over the next few years in
the range of 19-21% and the same improving over time to beyond 30% as the investments in green-
field assets (Jatadhar and Keni) start contributing meaningfully to the top line (2029 onward). The
60% margin compares with 70% port-level margins of Adani Ports and SEZ. Three key differences that
we note between the two entities are: (1) negligible share of container business for JSW Infra, (2)
customer concentration for JSW infra and (3) higher share of major-ports in its portfolio where royalty
fees are higher.
WACC. We assume a WACC of 11.25%, similar to ADSEZ. On an absolute basis, the WACC benefits
on account of a 13% cost of equity and loses out on account of lower leverage levels. The 13% cost
of equity assumption factors in a high concentration and sensitivity to the steel volumes of JSW Steel.
Port concession renewal. We expect all the existing assets to get a renewal of their concession
beyond their concession period. We assume 20% lower EBITDA margin as the cost of renewing the
concession.
JSW Infrastructure
5
We expect JSW Infra to grow volumes by 10% over the next decade; margin expansion over low 51% base yields 15% EBITDA CAGR
Key assumptions for JSW Infrastructure, March fiscal year-ends, 2019-33
2023-26 2023-33
2019 2020 2021 2022 2023 2024E 2025E 2026E 2030E 2033E CAGR(%) CAGR(%)
Volume (mn ton)
Jaigarh 13.1 10.4 9.2 14.0 20.2 23.0 24.9 26.8 35.1 41.8 10 8
Dharamtar 12.9 12.8 12.9 17.2 24.0 26.0 28.3 29.4 40.6 48.4 7 7
Paradip iron-ore — 1.0 8.4 7.5 9.5 10.5 11.2 12.0 14.8 17.2 8 6
Paradip coal — — — 0.3 12.0 14.4 16.2 18.1 23.7 28.3 14 9
South West 5.3 6.6 6.8 6.9 7.1 7.1 7.5 9.5 15.0 15.0 10 8
Mangalore — — 1.0 3.8 4.5 5.0 5.8 6.0 6.7 6.7 10 4
New projects — — — — — 2.0 12.0 12.0 47.0 60.0 NA NA
Total 35.4 34.0 45.5 62.0 92.9 104.6 124.0 132.3 202.4 238.4 12 10
Realization (Rs/ton)
Jaigarh 473 559 734 674 612 630 649 668 752 822 3 3
Dharamtar 128 130 131 171 184 190 195 201 227 248 3 3
Paradip iron-ore — — 369 414 384 396 408 420 472 516 3 3
Paradip coal — — — — 274 283 291 300 338 369 3 3
South West 367 345 404 421 443 456 470 484 545 595 3 3
Mangalore — — 637 393 453 467 481 495 557 609 3 3
Total 305 336 353 367 344 351 361 375 444 493 3 4
EBITDA (Rs mn)
Jaigarh 3,111 2,948 3,320 4,924 7,038 7,847 8,672 9,722 14,690 19,461 11 11
Dharamtar 925 928 847 1,647 2,671 2,993 3,426 3,672 5,762 7,536 11 11
Paradip iron-ore (15) (5) 1,041 828 1,017 1,166 1,400 1,629 2,439 3,294 17 12
Paradip coal 74 120 106 (79) 774 1,129 1,410 1,724 2,965 4,212 30 18
South West 385 462 853 895 867 787 1,119 1,707 780 1,149 25 3
Mangalore — — 129 453 686 797 1,026 1,143 1,597 1,849 18 10
New projects — — — — — 583 2,323 2,412 14,259 20,525 NA NA
Total 6,123 6,192 8,175 11,100 16,202 18,587 23,464 26,646 49,275 66,287 18 15
EBITDA per ton (Rs)
Jaigarh 238 284 359 351 348 341 349 362 418 466
Dharamtar 72 72 66 96 111 115 121 125 142 156
Paradip iron-ore (5) 124 110 107 112 125 136 165 192
Paradip coal (281) 64 78 87 95 125 149
South West 73 70 125 129 123 111 149 179 52 77
Mangalore 129 119 153 161 177 190 238 276
New projects 293 194 202 304 342
Total 13.4 15.2 13.4 11.9 9.7 5.9 5.2 4.6 2.8 1.9
EBITDA margin (%)
Jaigarh 52.7 49.3 50.1 53.6 58.5 56.9 57.0 57.4 58.9 59.8
Dharamtar 56.6 56.5 50.9 56.4 60.8 61.2 62.4 62.4 63.0 63.3
Paradip iron-ore — (0.8) 40.5 32.4 33.7 33.9 36.7 38.5 40.6 42.7
Paradip coal — — — — 32.4 37.2 39.9 41.8 47.1 50.3
South West 22.5 22.8 34.9 34.7 31.2 27.4 35.5 41.3 13.5 17.6
Mangalore — — 38.6 40.1 44.4 45.1 47.8 49.2 53.3 55.3
New projects — — — — — 83.0 48.6 48.9 56.4 57.4
Total 56.7 54.2 50.9 48.8 50.7 50.7 52.4 53.7 54.9 56.4
RoIC (%)
Jaigarh 7.2 6.0 6.7 12.4 20.2 22.4 22.2 20.9 35.0 52.6
Dharamtar 23.1 19.5 16.8 32.7 53.6 54.8 51.8 45.7 38.2 39.3
Paradip iron-ore (0.6) (1.8) 9.6 6.7 10.2 13.4 18.0 22.7 43.4 69.2
Paradip coal 3.2 2.1 1.0 (3.3) 0.4 3.7 6.4 7.8 17.8 30.7
South West 0.7 0.7 10.2 12.9 15.8 16.0 28.1 41.5 15.0 36.3
Mangalore (12.5) 36.7 13.0 18.6 21.8 37.0 49.4
New projects 4.1 7.5 4.1 9.0 15.5
Total 8.4 8.0 8.7 10.7 18.6 19.1 19.9 18.0 21.6 31.6
Source: Company, Kotak Institutional Equities estimates
JSW Infrastructure
6
We assign a Fair Value of Rs180 calculated as the SoTP of the fair values of all assets, internal debt & reinvestments in new projects
SoTP of JSW Infra (Consol.) as of March 2025 (in Rs)
EV Implied Stake EBITDA Equity Per share

Entity (Rs mn) Net debt equity value (%) (Rs mn) Value value Method of valuation
JSW Standalone 18,628 10,846 7,783 100% 2,647 7,783 4 FCFF
Dharamtar 48,621 656 47,965 100% 3,426 47,965 23 FCFF
Jaigarh 160,561 6,752 153,809 100% 8,672 153,809 73 FCFF
Paradip Iron ore 18,294 3,308 14,986 97% 1,400 14,596 7 FCFF
Paradip East Quay Coal 24,427 9,033 15,394 97% 1,410 14,994 7 FCFF
Mangalore Coal 12,663 4,650 8,014 100% 1,026 8,014 4 FCFF
South West 9,609 (137) 9,745 90% 1,119 8,771 4 FCFF
Other investments (including
Ennore terminals and Mangalore 12,892 6 1.5X book value
Container terminal)
Known prospects (Jatadhar, Keny,
58,016 15,953 42,063 100% 2,323 42,063 20 FCFF
Fujirah)
1.3X book on new investments

Incremental project wins 36,379 17 assuming 2.5X cap on FY2030E
net debt to EBITDA
L&A from standalone to entities

Internal debt 26,635 13
valued above
Total 373,901 180
JSW Infra continues to trade at a premium versus domestic ports and overseas ports
A comparison versus other domestic ports brings out the inherent strength of JSW Infra on business
returns and higher growth prospects. This is a reflection of the strength of the good location of its assets
for serving the key customer in JSW Group. The related key assets in Jaigarh and Dharamtar have high
starting returns at moderate utilization levels and long remaining concession periods, over which the
benefits of such cost structure will sustain. The lean balance sheet and known growth prospects also
open up the prospects of reinvestment and thus higher multiples on near-term estimates.
JSW Infra trades at a 35% premium with respect to Adani Ports

EV/EBITDA multiple of JSW Infra, Adani Ports, Gujarat Pipavav, March fiscal year-ends, FY2023-26E
At CMP At FV
EV/EBITDA 2023 2024E 2025E 2026E 2023 2024E 2025E 2026E
Adani Ports 18.3 17.2 14.2 12.3 21.4 16.6 13.8 11.9
JSW Infra 29.9 25.1 19.8 18.2 25.4 21.2 16.7 15.5
GPPV 12.0 10.9 9.4 8.4 10.6 9.7 8.4 7.5
Five-year CAGR of JSW Infra has been higher at 24% compared to its peers
Operating volumes of JSW Infra, Adani Ports, Gujarat Pipavav, JM Baxi, March fiscal year-ends, FY2018-23
Volumes (MMT) 2018 2019 2020 2021 2022 2023 5- YR CAGR (in %)
Adani Ports 180 208 222 247 309 338 13.4
Gujarat Pipavav 13 15 15 14 14 16 4.2
JSW Infra 32 35 34 45 62 93 23.7
JSW Infrastructure
7
Relationship with parent the key driver of 1.5X industry growth for long time
An increase in the parent’s steel volumes, coupled with a rise in coastal volumes at the Paradip
Port, has helped JSW Infra quickly become the second largest commercial port operator in India.
Timely investments in greenfield port assets should further strengthen its relationship with the
parent while giving fillip to third-party cargo starting in 2027. This relationship should also help in
the auto renewal of the port assets of JSW Infrastructure, where the reliance for cargo on the
parent is high (Goa). JSW Infra’s strong cash generation and lean balance sheet, along with a
virtual duopoly in private sector for bulk cargo, make it a strong play on port privatization. Our
state-wise analysis suggests a limited overlap with Adani Ports and an ability to enter new states
as well.
Second-largest diversified commercial port operator in India with ten concessions

JSW Infrastructure is the second-largest diversified commercial port terminal operator in India in terms
of aggregate port capacity of 160 mn tons and throughput of 93 mn tons. It is the fastest growing port-
related infrastructure company in India in terms of installed cargo handling capacity and cargo volumes
handled in FY2020-23. Its operations have expanded from one port concession at Mormugao, Goa, which
was acquired by JSW Group in 2002 and commenced operations in 2004, to 10 port concessions across
India, as of March 31, 2023. It has a diversified presence across India with non-major ports located in
Maharashtra and port terminals located in major ports across the West Coast (Goa and Karnataka), East
Coast (Odisha and Tamil Nadu). In addition to its operations in India, the company operates two port
terminals under O&M agreements for a cargo handling capability of 41 MTPA in the UAE, as of June 30,
2023. It has recently added to its overseas portfolio, Marine Oil Terminal Corp (MROTC), which operates
a liquid storage terminal with a capacity of 465,000 cubic meters and situated at the Fujairah Oil Industry
Zone (FOIZ) in Fujairah, UAE.
Iron ore is the key commodity, with a share of 32% in overall volumes in FY2023. Along with thermal coal
and other forms of coal, the three commodities accounts for more than 85% of the overall volumes in
FY2023.
Inorganic growth has meaningfully boosted volume growth profile of JSW Infra in the past few years.
Organic growth across the four assets (Jaigarh, Dharamtar, South-West Port, standalone) has been a
healthy 17.5% CAGR over FY2020-23 versus 39% volume CAGR on an overall basis over the same period.
The addition of new assets has also helped diversify the exposure beyond captive entities of JSW Group,
which accounted for 69% of FY2023 volumes versus ~90% of volumes in FY2020.
JSW Infrastructure
8
Location of the assets and proximity to facilities of Anchor customers
JSW Infrastructure
9
Contribution of iron ore and thermal coal has increased in the past few years
Cargo mix of JSW Infra (consol.) in India, March fiscal year-ends, FY2020-23 (mn ton)
Volume handled in MT Percentage of total cargo (%)
2020 2021 2022 2023 2020 2021 2022 2023
Cargo mix
Coal (other than thermal coal) 15 20 28 24 45 43 45 25
Iron ore 9 16 20 30 25 35 32 32
Thermal coal 5 4 5 27 15 9 8 29
Liquid and gas cargo 0 0 0 1 0 1 0 1
Container 0 0 0 2 0 0 0 2
Other bulk and break bulk cargo (1) 5 6 9 10 15 13 14 10
Total 34 46 62 93
Customer mix
Anchor Customer 31 34 46 62 91 75 75 67
Third-party 3 11 16 31 10 25 25 33
Total 34 46 62 93
Channel Mix
Rail 10 15 21 34 29 31 33 37
Road 3 13 15 20 10 28 25 21
Waterways 4 4 8 14 13 9 12 15
Conveyor 16 14 19 25 48 31 30 27
Total ( 2 ) 34 46 63 93
Contract Mix
Long-term contracts 17 16 23 42 48 35 37 45
Long-term contracts under take-or-pay
14 18 23 23 40 39 37 25
agreements
Short-term contracts 3 12 15 27 9 25 24 29
Minimum commitment billed (without
1 2 2 2 4 4 3 2
actual handling)
Total ( 3 ) 35 47 64 95
Geography mix
India 34 46 62 93 100 78 82 89
UAE 0 13 14 12 0 22 18 11
Total 34 59 76 105
The company has diversified its port mix in the past few years
Port-wise cargo mix of JSW Infra (consol.) in India, March fiscal year-ends, FY2020-23 (%)
Jaigarh Dharamtar South West Standalone
Mangalore Container Mangalore Coal Paradip Iron Ore Paradip coal
Ennore Coal Ennore bulk
100% --
1.0 0.4 1.2 1.9
3.1 8.7
3.2 - 8.0
8.4 0.3 12.0
80% 6.6 7.5
1.0
- 3.8 9.5
3.6 -
3.0 4.5
60% 2.2
6.8 6.9 2.7
12.8 7.1
40%
12.9 17.2 24.0
20%
10.4
9.2 14.0 20.2
0%
2020 2021 2022 2023
JSW Infrastructure
10
Share of cargo handled via East Coast has increased in FY2023

Mix of cargo across customers in India, March fiscal year-ends, FY2020-23 (%)
120 West coast East coast
100 3.0
26.3 27.4
80 34.6
60
97.0
40
73.7 72.6
65.4
20
0
2020 2021 2022 2023
Organic growth prospects can drive a 9% volume CAGR in the next three years
We believe that JSW Infra’s portfolio has the potential to achieve a 9% organic volume CAGR in the
next three years versus 17.5% over FY2023. The overall growth prospects could get boosted by any
acquisition that JSW Infra does from here on. For instance, the addition of the Fujairah terminal should
support a higher 12% volume CAGR for the portfolio over FY2023-26E.
Our analysis of the performance of JSW Infra in the past couple of years suggests two key volume growth
drivers. They are: (1) growth in JSW Steel’s steel production and (2) coastal shipping of thermal coal.
These two accounted for about 80% of the incremental yoy growth volumes in FY2023. Both these
effects will get diluted incrementally, given the high base of FY2023 on both counts: (1) JSW Steel will
add incremental production volumes at a slower pace than the 3 mn ton yoy increase seen in FY2023
and a minority share of it would come from the Dolvi plant and (2) the coastal shipping of thermal coal
will moderate as growth at the related Paradip Port has moderated in YTD-2024 and the share of JSW
Infrastructure is now meaningful.
Exhibit 11 depicts the split of volumes and the growth potential across the key growth drivers of JSW
Infra’s portfolio. As suggested earlier, the two key growth drivers are: JSW Steel and the coastal shipping
of thermal coal. These account for about 72% of existing volumes and a higher share of the incremental
volumes. The remaining 28% of the portfolio is a combination of several small businesses, including: (1)
coal/bulk volumes at the Ennore Port, which cannot grow due to capacity constraints (~8%), (2) container
+ coal volumes at Mangalore (7%), (3) remaining exposure to other group companies (~4%), (4)
remaining third-party exposure (~4%) and (5) iron-ore exports to China.
JSW Infrastructure
11
Two key themes impacting existing and growth volumes are JSW Steel and coastal shipping of thermal coal
Split of volumes of JSW Infrastructure across growth drivers and growth potential, March fiscal year-end, 2023 (%)
Split of port volumes across growth and growth drivers
Volume split (LHS) KIE estimate of growth potential (RHS)
120 24
100
100 20
80 14 14 16
59
60 10 12
8 9
40 6 6 8
4
20 13 4
7 8
4 4 4
0 0
JSW Steel Coastal shipping of Mangalore Ennore port (capacity- Iron-ore exports to Remaining group Remaining third-party Portfolio
thermal coal (container+coal) constrained) China exposure exposure
Legend
Group exposure
Third-party exposure
#1: JSW Steel should continue to support growth, though with a lag and at a lower sensitivity
Based on our assessment, JSW Steel accounts for about 60% of the overall volumes of JSW
Infrastructure in FY2023 and has driven 80% of its organic growth in FY2023. This is the period when
JSW Steel’s standalone deliveries grew by ~3 mn tons in a single year compared with a modest sub-0.5
mn ton run-rate of incremental volumes in the previous six years. Another point to highlight is the high
sensitivity of JSW Infra’s volumes to steel production of JSW Steel. The same 3 mn of incremental steel
production gave an uptick of almost 4.5-5X for JSW Infrastructure’s port volumes. This reflects the result
of (1) ~2.5 mn tons of input (iron ore, coking coal) to make one ton of steel and (2) double (and at times
triple-counting) of the same input across ports due to transshipment.
Against the 3 mn ton increase in production in FY2023 for JSW Steel, the KIE estimate for FY2023-26 is
a 2.3-2.4 mn annual run-rate for incremental volumes, or ~10% CAGR for JSW Steel. A large part of this
growth is going to happen at the Vijayanagar steel plant, where the (1) reliance on port volumes on inputs
is going to be lower than what it is at Dolvi and (2) JSW Infra does not have concomitant port capacities
to service demand from Vijayanagar. We still expect a reasonable 9% CAGR for the related portfolio of
JSW Infrastructure (~60%). The key driver of the 9% volume CAGR for the portfolio linked to JSW Steel
would come wallet share gains for the Dolvi steel plant—Mumbai anchorage does 10 mn tons of cargo
business for JSW Steel versus 55 mn tons of volumes JSW Infra does for JSW Steel. Another volume
support should come from an uptick in the capacity of South-West Port—improves by 3 mn tons per
annum in FY2026.
We expect JSW Infra’s portfolio linked to JSW Steel to continue growing at a healthy pace beyond
FY2026. Unlike the FY2023-26 period that was driven by wallet share gains, the period beyond FY2026
should see JSW Infrastructure expand port capacities and thus increase the throughput from the
Vijayanagar plant. Key assets that would reflect such volume boost would be Goa (after the increase in
rated capacity from FY2026) and Keni (after commissioning in FY2029). The commissioning of the
Jatadhar plant (commissioning expected in FY2027) should also give some boost to volumes on the
East Coast, where there is a 2.9 mn ton steel plant of Bhushan Steel (part of JSW Steel’s business).
JSW Infrastructure
12
JSW Steel accounted for 60% of volumes and ~80% of the organic growth volumes of JSW Infra in FY2023
Share of volumes of JSW Infrastructure related to requirement of JSW Steel, March fiscal year-
end, 2023 (%)
Share of volumes attributable to JSW Steel

100
80
80
59
60
40
20
0
In annual volumes In organic growth volumes
A single ton of steel production impacts ~5 mn tons of volumes of JSW Infra; this sensitivity should come
down as exposure to the Vijayanagar plant increases
Growth volumes for year-ending March 2023 (mn tons)
Growth volumes in FY2023

16
13.6
14
12
10
8
5.8
6
4 2.5
2
0
Increase in steel production of Related demand of input Growth volumes of JSW
JSW Steel's Dolvi plant requirements Infrastructure from JSW Steel
JSW Infrastructure
13
We expect a 12% volume CAGR over FY2023-30E

Build-up of capacity of JSW Infrastructure’s portfolio, March fiscal year-ends, 2018-30E (mn
tons)
Installed capacity (MMT) Volumes (MMT)

300 280 281
11% CAGR
250 231 233
5% CAGR 191
200 182
164 12% CAGR 206
155 160
189
150 166
121
103 12% CAGR 150
126 135
100 81 81
106
93
50 62
32 35 34 45
-
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Capacity expansion of Dolvi and Vijayanagar plants. The healthy expansion plans of the two key steel
assets of JSW Steel should drive healthy growth in the medium term for the captive portfolio and for
the overall volumes of JSW Infra—the Dolvi steel plant will expand capacity to 14 mn tons from 10 mn
tons) and the Vijayanagar steel plant will expand capacity to 18 mn tons from 13 mn tons. JSW Infra
has capacities on ground to capture the uptick in demand from the Dolvi steel plant and will invest in
capacity creation (Goa, Keni) to service the uptick in demand from the Vijayanagar steel plant.
Goa (port capacity expansion). JSW Infra should benefit from a higher wallet share in Vijayanagar’s
existing volumes as it completes the capacity expansion of the South West Port (Goa) to 14 mn tons
from 8 mn tons. The commissioning of the Keni port (FY2026) should further enhance the ability of
JSW Infra to service existing and incremental demand from the Vijayanagar steel plant.
Keni (35 mn ton capacity, 30 mn ton phase I, FY2029 commissioning) JSW Infrastructure has
recently received a letter of award from the Karnataka Maritime Board for developing the Keni port.
The port will have an initial capacity of 30 mn tons and project cost of Rs41 bn. The port will likely
take 4-5 years for commissioning, given the rocky terrain and may start contributing to JSW
Infrastructure’s top line from FY2029. JSW Infra is planning to create an all-weather, greenfield, multi-
cargo, direct berthing, deep-water commercial port at Keni for handling all types of cargo from the
North Karnataka region (Ballari, Hospete, Hubballi and Kalaburagi) and South Maharashtra.
Jatadhar (50 mn ton capacity, 30 mn ton phase I, FY2026/27 commissioning). The proposed
Jatadhar Port is part of the proposed integrated steel complex in Odisha (includes contract for setting
up a 10 mn ton steel capacity). JSW Infra has shared the prospects of JSW Steel signing the
agreement with the Odisha government and thus the port operator getting the contract to develop and
operate the Jatadhar Port. The port will take three years to get commissioned after the signing of the
contract. Apart from servicing the captive requirements of JSW Steel, the port will service third-party
cargo coming from the iron ore mines of Odisha. The port may also have a slurry pipeline coming up
in three years, making it attractive for catering to demand for steel and coastal traffic.
JSW Infrastructure
14
#2: Coastal shipping the single-largest determinant of growth volumes beyond JSW Steel
Of the remaining about 40% volumes of JSW Infra (beyond JSW Steel), the majority of the exposure is
toward thermal coal. Of this, the dominant share of the exposure is through the coastal shipping route.
We expect a moderation in growth in the key exposure of coastal shipping of thermal coal in the near
term, given the trends seen in the comparable volumes of the key Paradip Port and healthy market share
that JSW Infrastructure’s terminal has within the port. We expect a healthy 10% volume CAGR in the
coastal shipping portfolio of Paradip port and the related portfolio of JSW Infra on the government push
toward increasing reliance on domestic coal and strong past history—coastal coal volumes at the
Paradip Port have seen a higher 12% CAGR in the past decade.
Coastal shipping of thermal coal to pick up beyond a lull in FY2024

The Paradip Port accounted for 42 mn tons of coastal shipping volumes of thermal coal in FY2023, up
50% yoy. JSW Infra has leveraged this growth to go to 12 mn tons of related volumes from nil in a single
year, capturing a dominant share of the 16 mn tn yoy increase in its portfolio of the Paradip Port and
~30% of the related annual volumes of the port. FY2024 appears to be a year of growth moderation,
based on FYTD2024 data, potentially reflecting a large base (it appears that the focus is shifting for
imported coal for the year). The portfolio of coastal shipping of thermal coal at the Paradip Port has seen
14%/12% CAGRs in the past 5/10 years, reflecting the healthy medium-term prospects for JSW Infra’s
Paradip Port terminal for thermal coal. CRISIL estimates that the coastal shipping of thermal coal on the
East Coast will grow in mid-to-high single digits.
JSW Infrastructure would account for >35% of thermal coal volumes of Paradip Port shipped through the coastal route in FY2024
Quantum of thermal coal volumes shipped through the coastal shipping route from Paradip, March fiscal year-ends, 2011-
24E (mn tons)
Coastal shipping of thermal coal
Paradip Port JSW Infrastructure
50
44
42
40
30 28
26
24 22
21 20 21
19 19
20 16
14 12
9 10
10
0
0
2011
2012
2013
2014
2023
2015
2016
2017
2018
2019
2020
2021
2022
annualized
FYTD24
Source: Ministry of Ports and Shipping, Kotak Institutional Equities estimates
Coastal traffic largely flows from coal mines in the Eastern region via the Paradip Port to power plants
in the South via the Ennore Port. Coastal traffic of iron ore mainly moves from mines in Odisha and
Chhattisgarh on the East Coast via the Paradip and Vizag ports to the JSW and Essar Steel plants on the
West Coast at their captive jetties. CRISIL report expects both of these cargo classes to have a healthy
growth in the next few years. JSW Infrastructure is well placed to benefit from these trends in coastal
shipping.
JSW Infrastructure
15
Coastal coal traffic accounts for a sizeable share of thermal coal volumes at the ports and may grow at a high single-digit pace
Coastal volumes of Major & Non-Major ports, March fiscal year-ends, FY2022-28E (mn ton)
Source: IPA, CRISIL, Kotak Institutional Equities
While a smaller boost to coastal shipping volumes of JSW Infra, iron ore is another relevant cargo class.
The same accounts for about 10% of JSW Infra’s coastal shipping volumes (part of the 55 mn ton
exposure to JSW Steel). CRISIL expects this part of the portfolio to also grow at a healthy pace over time.
Coastal movement of iron ore to increase from major ports on East Coast to non-major ports on West coast
Coastal volumes of Major & Non-Major ports, March fiscal year-ends, FY2022-28E (mn ton)
Source: IPA, CRISIL, Kotak Institutional Equities
JSW Infrastructure
16
#3: Strong case of using lean balance sheet and strong cash generation to adding concessions
JSW Infra has added projects equivalent to US$200-250 mn of EV in recent terms and can add 10X of
such quantum while abiding to the 2.5X net debt to EBITDA cap on FY2030 basis. Returns on such
investments may be healthy given duopolistic nature of port capacities in bulk cargo. We bring out
growth strategies of JSW Infra, largely aligned with adding new port concessions, cargo classes and new
lines of work in logistics.
Focus fully integrated logistics solutions. It intends to focus on expansion in non-major ports where
it can broaden operations to provide fully integrated logistics solutions with an optimum cargo mix of
bulk, container, liquid and gases, while continuing to expand its presence across major ports. It
intends to increase capacity at the Jaigarh Port by developing a terminal with a proposed capacity of
up to 2 MTPA for handling LPG, propane, butane and similar products. The company believes that the
proximity of the LPG terminal to the industrial hinterlands and bottling plants of LPG, propane and
butane in Maharashtra will provide it the opportunity to increase its proportion of “sticky cargo” with
repeat customer orders. It also plans to develop a non-major port at Jatadhar (Odisha), with a
proposed capacity of up to 52 MTPA. Each of these projects will be developed in a phased manner,
and once completed, they are expected to add up to 54 MTPA of installed cargo handling capacity.
Focus on PPP projects to continue, especially along the Southern coast. It has previously
participated in PPP at major ports and was awarded concessions for two terminals from the Paradip
Port Authority (formerly Paradip Port Trust) in FY2016 and one terminal from the New Mangalore Port
Authority. It intends to similarly participate in PPP opportunities going forward and also undertake
capacity expansions at its container terminals in New Mangalore (Karnataka). It also proposes to bid
for concessions to develop greenfield ports along the Southern Coast.
Pursue acquisition opportunities in similar businesses, especially in container and liquid cargo. JSW
Infrastructure plans to further expand its asset portfolio and grow its operations by evaluating
acquisition opportunities to strengthen its presence in handling container and liquid cargo, with a
focus on increasing its third-party customer base. On November 13, 2020, it acquired a 100%
controlling stake in Southern Bulk Terminals Private Limited (SBTPL) and obtained control of SBTPL’s
three subsidiaries, through which it operates the Ennore Bulk Terminal, Ennore Coal Terminal and New
Mangalore Coal Terminal, adding an aggregate of up to 16.73 MTPA of operational capacity. This
acquisition provided it with access to third-party customers and helped spread its footprint along the
Southern coast of India. It has successfully integrated these acquired assets (such as Ennore Coal
Terminal, Ennore Bulk Terminal and New Mangalore Coal Terminal), which include operations and
administration of the port as well as integrating strategies, procedures, systems and human
resources.
Pursue opportunities in synergistic businesses to increase revenue diversification. It intends to

pursue synergistic businesses such as development of container terminals, liquid storage terminals,
container freight stations (CFS), multi-modal logistics parks (MMLP) and inland container depots
(ICD) to enable it to provide end-to-end logistics solutions to its customers.
Increase third-party customer base. The company aims to widen its mix of customers to achieve a
balanced customer base and have been focusing on strengthening its relationships with third-party
customers. It plans to achieve this by participating and bidding for new port concessions (across both
major and non-major ports). The company proposes to similarly explore further diversification
opportunities to expand its customer base.
JSW Infrastructure
17
Share of third-party cargo volume mix improved in FY2023

Mix of cargo volumes across customers, March fiscal year-ends, 2020-23 (%)
Anchor Customer Third-party

120
100
9.5
24.8 25.5
80 33.4
60
90.5
40 75.2 74.5
66.6
20
0
2020 2021 2022 2023
Low returns made thus far of recent investments limits case for large value creation
While acknowledging a strong case for privatization of new assets, we are constrained on the extent of
value creation what would want to ascribe to JSW Infra. The key reason has been the weak performance
on business returns of recent asset additions by JSW Infra. The exhibit ahead brings out these
differences in the businesses of two buckets of ports owned by JSW Ports. We classify old ports as
Jaigarh port, Dharamtar Ports, South West Port (Goa) and standalone operations (primarily Goa). We
classify the new ports as the remaining ports terminals (Mangalore, Paradip, Ennore). The new ports
have a capacity utilization higher than that of the new ports. The old ports operate at 52%/56% EBITDA
margin including/excluding ESOP expenses and new ports operate at 46%/49% levels. The new ports
account for 45%/42%/21% of consolidated fixed assets/volumes/EBITDA.
Old ports operate at higher 27% return on invested capital compared to 9.5% in new ports
Attributes of JSW Infra (Consolidated), March fiscal year-ends, FY2023 (MMT, %)
Attributes in %, FY2023 Standalone, Jaigarh, Dharamtar, South West Mangalore, Paradip, Ennore
Revenue mix 75.5 24.5
Volume mix 58.2 41.8
EBITDA mix 78.7 21.3
Capacity utilization 55.3 62.1
Net Fixed assets mix 55.1 44.9
RoIC 29.1 6.3
RoIC (adjusted for inter-party payment) 26.6 9.5
Note:
(a) RoIC is calculated as Pre Tax, excluding loans & advances
JSW Infrastructure
18
Healthy competitive positioning of JSW Infra in key markets

Maharashtra, Odisha and Tamil Nadu are key markets. JSW Infrastructure has the second largest
port portfolio in India at one-fourth of the size of market leader Adani Ports. The company is 4X the
size of the next port operator, with a bulk offering in JM Baxi. Its cargo is spread across five coastal
states, of which Maharashtra accounts for the maximum 44% share followed by Odisha at 22% share.
Its market share is material in the case of Maharashtra (20%) and even higher in the non-major ports
in the state (62%). Its market share in the second key state in Odisha is still small at 12%.
Competition from Adani Ports is limited beyond Odisha. The company has a modest overlap from a
competitive perspective with Adani Ports. Adani Ports has insignificant presence in Maharashtra,
negligible in Karnataka. It does not compete in bulk in Tamil Nadu and offers weak competition in Goa
(key customer is JSW Group there). The competition is more direct in Odisha, where Adani Ports has
a higher 18% market share through Dhamra. Even within Odisha, the competition gets diluted as bulk
of the exposure for JSW Infra is in coastal cargo, where Paradip port scores over Dhamra port in terms
of location and connectivity.
A comparison of market share across states for JSW Infra and Adani infers a low/moderate overlap of the two assets
A comparison of the presence and relevance across states of the portfolios of Adani Ports and JSW Infrastructure
Non-major Market share Market share
State Total ports JSW Infra (%) JSW Assets Adani Ports (%) Adani Assets
Gujarat 554 416 — 196 35 Mundra, Dahej, Hazira, Kandla
Maharashtra 224 71 44 20 Dharamtar, Jaigarh 2 1 Dighi
Odisha 174 39 22 12 Paradip, Jatadhar 31 18 Dhamra
Andhra Pradesh 175 101 — 80 46 Krishnapatnam, Gangavaram
Tamil Nadu 135 10 11 8 Ennore 22 16 Ennore, Kattupalli, Karaikal
West Bengal 66 — — —
Goa 17 0 9 53 Mormugao 2 9 Mormugao
Karnataka 42 1 7 16 Mangalore —
Kerala 35 0 — 6 16 Vizhinjam
Total 1,422 639 92 6 339 24
Source: Ministry of Ports and Shipping, Kotak Institutional Equities estimates
JSW Infrastructure
19
Risk factors: Concentration risk in terms of customers, cargo and geographies

We expect the exposure to JSW Steel (~60% of FY2023 volumes) to record an 8.5% CAGR over
FY2023-31E, broadly factoring in large wallet share gains in all the steel capacities as per the
plans of JSW Steel. A lack of wallet share gains could lead to a 60 bps lower CAGR for the overall
portfolio of JSW Infra; the deferment of capacity addition of JSW Steel should lead to a further
cut. The key risk to the value of future concessions emanates from the weak single-digit RoIC
profile of the recent asset additions by JSW Infra at reasonable capacity utilization levels.
In our view, the key risks for JSW Infrastructure are:
10% overall decadal volume CAGR is prone to the risk of the absence of wallet share gains and
deferment of JSW Steel’s capacity additions. We note constraints to JSW Infrastructure exposure to
JSW Steel (~60% of FY2023 volumes and 80% of growth volumes) growing at par with the 8.5% growth
in capacities targeted by JSW Steel till FY2031 - incremental steel capacities will have lower reliance
on input port volumes versus that of the Dolvi Steel plant. Our 8.5% CAGR estimate for JSW Infra's
related exposure factors in most of the wallet share gains possible and thus is exposed to downside
risks on (1) extent of wallet share gains and (2) deferment in commissioning of steel capacities versus
JSW Infra's plan.
A lack of wallet share gains could reduce the CAGR of business exposure to JSW Steel by ~100 bps and
that of JSW Infrastructure's entire portfolio by ~60 bps
Volume CAGR of JSW Infrastructure's exposure to JSW Steel March fiscal year-ends, 2023-31E
(%)
CAGR
12 10.9
9.7
10
8.6
8.1
8 7.3
6 5.2
0
No wallet share Full potential KIE estimate No wallet share Full potential KIE estimate
gains gains
2023-26 2023-31
JSW Infrastructure
20
Any deferral of JSW Steel’s capacity expansion plans until FY2031 could further reduce the volume CAGR
of JSW Infrastructure
Capacity expansion plan of JSW Steel, March fiscal year-ends, 2023-31E (mn tons)
Source: Company
Substantial portion of revenues coming from JSW Steel, which has had a cyclical past. JSW Steel
accounts for the majority share of volumes and dominant share of organic volume growth in FY2023
for JSW Infrastructure. JSW Steel’s production volumes have been cyclical, being flat over FY2014-
16, seeing a jump in 2017, having grown at a low single-digit CAGR over FY2017-20 and have recently
grown at 17-18% CAGR over FY2021-23. The revenue contribution to JSW Infra from JSW Steel is
lower (versus volume share) at 46-47%—through JSW steel (standalone) and Amba River Coke
Limited. Top-5 customers of the group account for 53.6% of revenues from operations of JSW
Infrastructure in FY2023. Its arrangements with customers are either based on long-term take-or-pay
arrangements or short-term commercial contracts that may be extended or renewed based on mutual
agreement of the parties or terminated by either party with prior notice. While it continues to earning
revenue based on its take-or-pay arrangements, there can be no assurance that its customers will
extend or renew their arrangements with the company on comparable terms or at all. For instance,
cargo volumes handled at the Dharamtar Port declined to 5.39 MT in FY2016 from 7.38 MT in FY2015
as JSW Steel was unable to produce steel at volumes in line with its historical performance.
Substantial contribution of revenues comes from top-5 customers, which are related parties as well
Contribution of top-5 customers to overall revenues of JSW Infra, March fiscal year-ends, FY2020-23 (Rs mn, %)
2020 2021 2022 2023
Revenue from As % of total Revenue from As % of total Revenue from As % of total Revenue from As % of total
Customers customer revenues customer revenues customer revenues customer revenues
JSW Steel Limited 4,465 39.0 6,466 40.3 9,989 43.9 12,944 40.5
Amba River Coke Limited 853 7.5 1,094 6.8 1,503 6.6 1,836 5.8
Karam Chand Thapar & Bros Coal Sales Limited 975 3.1
JSW Energy Limited 1,495 13.1 991 6.2 656 2.9 694 2.2
India Coke and Power Private Limited 147 0.9 445 2.0 662 2.1
Total contribution of top 5 customers 6,813 59.6 8,698 54.2 12,593 55.4 17,112 53.6
JSW Infrastructure
21
Bi-polar return profile of existing assets versus new assets. The exhibit ahead brings out these
differences in the businesses of two buckets of ports owned by JSW Ports. We classify old ports as
Jaigarh port, Dharamtar Ports, South West Port (Goa) and standalone operations (primarily Goa). We
classify the new ports as the remaining port terminals (Mangalore, Paradip and Ennore). Old Ports
operate at a higher 29% return on invested capital (pre-tax, excludes loans and advances). The new
ports operate at a lower 7% in spite of a healthy 62% utilization. In fact, the new ports have a capacity
utilization higher than that of the new ports. The old ports operate at 52%/56% EBITDA margin
including/excluding ESOP expenses and new ports operate at 46%/49% levels. New ports account for
45%/42%/21% of consolidated fixed assets/volumes/EBITDA.
Old ports operate at higher 27% return on invested capital compared to 9.5% in new ports
JSW Infra mix of volume, EBITDA, Net fixed assets, & Asset capacity utilization, RoIC profile,
March fiscal year-ends, FY2023 (MMT, %)
Attributes in %, FY2023 Standalone, Jaigarh, Dharamtar, South West Mangalore, Paradip, Ennore
Revenue mix 75.5 24.5
Volume mix 58.2 41.8
EBITDA mix 78.7 21.3
Capacity utilization 55.3 62.1
Net Fixed assets mix 55.1 44.9
RoIC 29.1 6.3
RoIC (adjusted for inter-party payment) 26.6 9.5
Note:
(a) RoIC is calculated as Pre Tax, excluding loans & advances
We note differential return profile of long-standing assets and recent asset additions
Return profile of assets of JSW Infrastructure, March fiscal year-ends, 2018-23 (%)
Pre-tax RoIC
Standalone+Jaigarh+Dharamtar+South West Remaining assets
40
31.2
29.1
30
19.4
20
11.8 11.3 10.3 11.7
10 6.3
4.4
1.8 0.6
0
(10) (14.1)
(20)
2018 2019 2020 2021 2022 2023
The concession and license agreements are entered into for limited periods. As of December 31,
2022, the capacity weighted average balance concession period of the group’s operational ports and
terminals is 25.35 years. Its subsidiary in South West Port Limited (“SWPL”) entered into a license
agreement dated April 11, 1999 with the Board of Trustees of Mormugao Port for a tenure of 30 years
from the date of handover of its operations. The date of handover is disputed, and while SWPL
believes the license is valid until 2031 and has initiated arbitration proceedings against the Board of
Trustees of Mormugao Port to determine the dispute, an adverse outcome of such proceeding may
result in the validity expiring earlier in 2029.
High exposure to select cargo types. A substantial portion of the total volume of cargo handled
comprises iron ore, thermal coal and coal (other than thermal). For FY2023, coal (other than thermal),
JSW Infrastructure
22
iron ore and thermal coal accounted for 25.4%, 32.2% and 29%, respectively. Container cargo
accounted for a minor 2.3% of the overall cargo volumes.
High exposure to select ports. The majority of its cargo is handled along the West Coast, particularly
at the Jaigarh Port and the Dharamtar Port, which are both located in Maharashtra. These ports in
Maharashtra account for 55.2 MMT and 34 MMT, respectively, out of 160 MMT overall installed
capacity as of FY2023.
Minimum commitment of volumes account for minority share of installed capacity. JSW Infra has
entered into take-or-pay contracts for cargo handling at the Jaigarh Port, Dharamtar Port, Ennore Bulk
Terminal and Ennore Coal Terminal, with some customers agreeing to provide the company with a
minimum volume of cargo to be handled and fees. Such minimum commitment accounted for 25.4
MMT over 9MFY23 versus 66.07 MMT of volumes handled.
Minimum commitment of volumes account for a minority share of installed capacity

Min. committed versus total volumes handled by JSW Infra (consol.), March fiscal year-ends
(MT)
2020 2021 2022 2023
Installed capacity 103.0 119.0 153.4 160.0
Minimum commitment 15.4 19.78 25.4 25.4
Actual volume handled 34.0 45.5 62.0 92.9
Uncertainty regarding environmental clearance for SWPL. South West Port Limited (SWPL) has
obtained an environmental clearance dated January 11, 2023 from the Ministry of Environment,
Forests and Climate Change, for capacity enhancement at the exiting berths operated by SWPL at the
South West Port in Goa. However, the EC is subject to certain conditions, including among others, the
outcome of a public interest litigation pending before the High Court of Bombay at Goa where the
petitioner has inter alia sought a direction for complete closure of and cancelling all
permissions/clearances granted for its coal/coke handling operations at the South West Port. SWPL
accounts for 8.7% of the FY2023 revenues of JSW Infra.
JSW Infrastructure
23
We estimate 12%/15%/18% volume/revenue/EBITDA CAGRs over FY2023-26

We expect JSW Infra to report 12%/15%/18% CAGRs in volumes/revenues/EBITDA over FY2023-
26E. We factor in ~500 bps improvement in EBITDA margins over FY2023-26E, reflecting the
benefits of reducing relevance of ESOP expenses, favorable verdict on royalty for the largest port
in Jaigarh and operating leverage. We expect the company to sustain RoICs in the 19-21% range
over this period. Investments in Keni and Jatadhar should get largely funded from internal
accruals, leading to ~1X net debt to EBITDA by end-FY2026.
P&L: We expect a 12% volume CAGR, driving a 15% revenue CAGR; EBITDA CAGR to be higher at 18%
Volume CAGR of 12%. We expect the portfolio to grow at a healthy pace, driven by (1) benefits from
the capacity expansion of JSW Steel’s Dolvi plant for the Dharamtar and Jaigarh ports and (2) doubling
of coastal coal volumes at the Paradip Port. The above three ports should account for 7% of the 12%
volume CAGR for the portfolio. The remaining 6% CAGR should come from the contribution of Fujairah
and PNP port (3.5%) and from other existing smaller ports gaining relevance (2.5%). Such growth
should lead to a higher capacity utilization of 71% versus the current level of 58%. This should drive a
15% CAGR in revenues for JSW Infrastructure, based on a blended 3% increase in ASP.
We expect a 3-year volume CAGR of 13% for the period 2023-26E

JSW Infra (consolidated) operating volumes, March fiscal year-ends, FY2020-26E (in MMT)
160
140 135
126
120
106
100 93
80
62
60
45
40 34
20
-
2020 2021 2022 2023 2024E 2025E 2026E
EBITDA margin expansion of ~500 bps. The three key drivers of margin expansion include (1) lower
ESOP expenses as a share of sales (270 bps), (2) favourable ruling on license fees for the Jaigarh
Port (150 bps) and (3) operating leverage (80 bps). On a relative basis, we expect ESOP expenses to
fall to 0.6% of sales from 3.4% levels. We assume flat levels of margins, adjusted for the change in
royalty/license fee and ESOP expenses. The concessional waterfront royalty at the Jaigarh Port is
contractually escalated by 20% every year, until the fifteenth year of operations, which expires in
October 2024. We take a 3% inflation rate beyond October 2024 every fifth year.
Operating expenses form the largest share of sales, followed by finance costs and then depreciation.
Operating expenses in FY2023 are primarily attributable to (1) fees to regulatory authorities (royalty
plus license fees), accounting for ~43% share, (2) cargo handling expenses, accounting for ~26%
share (3) power and fuel expenses, accounting for ~12% share and (4) repair and maintenance for
buildings expenses, accounting for ~8% share.
JSW Infrastructure
24
We expect an improvement in capacity utilization to 71% in 2026 from 58% levels in 2023
Capacity Utilization of JSW Infra (consolidated), March fiscal year-ends, FY2020-26E (in %)
80
69.5 70.6
70 64.7
58.0
60
50
40.0
37.7
40
33.2
30
20
10
0
2020 2021 2022 2023 2024E 2025E 2026E
We expect a 600 bps increase in EBITDA margins over 2023-26E

Break-up of sales for key cost items and EBITDA for JSW Infrastructure (consolidated), March fiscal year-ends, 2023-26
Royalty fee ESOPs Operating costs, ex royalty fee Employee costs, ex ESOP Other expenses EBITDA
54.2 50.9 48.8 50.7 50.7 52.4 53.7

As % of Revenue
6.3 6.9 4.3 4.4 4.7

4.3 3.9 3.8 4.5
9.1 6.9 4.0 3.8
6.5
23.1 21.2 21.1
22.8 23.1
24.7
24.8 2.2 3.3 3.9
1.4 0.6
-
11.2 14.6 16.6 16.2 14.7 14.4
-
5.5
2020 2021 2022 2023 2024E 2025E 2026E
Finance costs to stabilize at lower levels. We expect finance costs to show stable trends, adjusted
for forex changes from here on, as the dollar-denominated bonds get largely repaid by the proceeds
of the IPO. Finance cost for FY2023 had been impacted by exchange differences regarded as an
adjustment to borrowing costs of Rs3 bn in the P&L, primarily due to the depreciation in the value of
the Indian rupee against the US dollar.
Tax expense impacted by tax (credit) under MAT. We expect the benefits of the MAT regime to dilute
through FY2023-26 as tax benefits on select terminals in the key Jaigarh port wane off. Tax expense
is low for FY2023 on account of Tax (credit) under Minimum Alternative Tax. The Group expects to
utilize the MAT credit within a period of 15 years. The average effective tax rate during FY2023 was
7.6%. As of end-FY2023, the group had unutilized tax losses of Rs5.7 bn.
JSW Infrastructure
25
Consolidated financials of JSW Infra, March fiscal year ends, FY2020-26E (Rs mn)
2020 2021 2022 2023 2024E 2025E 2026E
Profit model (Rs mn)
Net sales 11,431 16,068 22,734 31,966 36,695 44,802 49,629
EBITDA 6,192 8,175 11,100 16,202 18,587 23,464 26,646
Other income 942 737 1,057 1,781 1,766 1,801 1,704
Depreciation (2,019) (2,707) (3,695) (3,912) (4,423) (4,708) (5,268)
Interest (2,775) (2,279) (4,196) (5,961) (3,555) (3,273) (2,937)
Income tax (376) (1,082) (955) (615) (2,973) (3,905) (4,429)
Profit after tax 1,965 2,845 3,310 7,495 9,401 13,379 15,716
Other comprehensive income (61) 68 (25) (97) (96) (123) (146)
Reported profit 1,904 2,913 3,285 7,398 9,306 13,256 15,570
Balance sheet (Rs mn)
Equity 25,482 28,912 32,721 39,947 77,348 87,502 99,429
Total borrowings 31,159 39,793 44,087 42,774 38,499 37,938 56,977
Net fixed assets 39,480 49,240 61,339 59,748 78,470 84,269 90,835
CWIP 7,503 11,250 797 460 4,882 14,737 41,368
Non-current investments 3,638 2,955 2,830 3,993 3,993 3,993 3,993
Other long-term assets (capital advances, security deposits) 2,183 1,978 5,821 5,054 5,054 5,054 5,054
Inventories 1,252 991 854 1,022 1,173 1,432 1,586
Cash 1,626 3,145 10,382 16,314 26,057 19,544 17,116
Trade payables 799 2,615 2,748 3,020 3,467 4,233 4,689
Provisions 55 82 89 79 91 111 123
Total assets 64,695 77,122 88,394 87,835 121,057 130,773 161,884
Free cash flow (Rs mn)
Operating cash flow excl. working capital 7,105 8,912 12,156 17,827 18,587 23,464 26,646
Working capital changes (3,587) 660 783 1,952 (335) (575) (342)
Capital expenditure (including acquisitions) (6,738) (6,701) (5,068) (2,794) (27,566) (20,363) (38,464)
Income tax paid (363) (497) (1,222) (1,807) (2,973) (3,905) (4,429)
Free cash flow to firm (3,583) 2,375 6,649 15,179 (12,288) (1,379) (16,590)
Ratios
Gross margin (%) 69.8 64.0 62.3 62.2 62.7 62.5 62.5
EBITDA margin (%) 54.2 50.9 48.8 50.7 50.7 52.4 53.7
PAT margin (%) 17.2 17.7 14.6 23.4 25.6 29.9 31.7
Net debt/equity (X) 1.2 1.3 1.0 0.7 0.2 0.2 0.4
RoAE (%) 7.2 10.5 10.7 20.6 16.0 16.2 16.8
RoIC (%) 8.0 8.7 10.7 18.6 19.1 19.9 18.0
JSW Infrastructure
26
Balance sheet: We expect net debt to EBITDA to be sub 1X and RoIC healthy over FY2023-26E
New projects and LPG terminal in Jaigarh to drive large capex spend. We expect Rs80 bn of capex
over the next three years getting spent in (1) new assets in Jatadhar and Kenny (Rs60 bn) and (2) 2
MTPA LPG terminal capacity at Jaigarh (Rs10 bn). We do not assume any other meaningful capacity
expansion beyond these three projects in our estimates, nor the addition of any new asset wins to the
portfolio.
Net debt to EBITDA to be contained to 1X levels. The infusion of IPO proceeds would lead to an
almost net-debt free balance sheet at end-FY2024 and a ~1X net debt to EBITDA by end-FY2026.
Net debt (including current investments) has declined to Rs22 bn from Rs34 bn in the past year on
account of healthy FCF generation and sale of investments in operationally convertible debentures in
JSW Sports. We expect net debt on an absolute basis to be lower than end-FY2023 levels over the
next three years.
RoIC to be healthy in the 19-21% range. We expect JSW Infrastructure to report healthy return on
invested capital, slightly better than the 18.6% print for FY2023. We expect business returns to further
improve over FY2024 and FY2025 on higher utilization of the existing assets. We expect the same to
fall to 20% in FY2026 on account of increase in capex spends. We envisage RoE for the company to
decline to 18% by FY2026 from 21% levels in FY2023 on account of addition of IPO proceeds.
Consolidated Balance sheet of JSW Infra, March fiscal year ends, FY2020-26E (Rs mn)
2020 2021 2022 2023 2024E 2025E 2026E
Equity & Liabilities (Rs mn)
Share capital 599 599 599 3,596 4,066 4,066 4,066
Reserves and surplus 24,883 28,312 32,122 36,351 73,282 83,436 95,363
Shareholder equity 25,482 28,912 32,721 39,947 77,348 87,502 99,429
Non-current Liabilities
Borrowings 31,159 39,793 44,087 42,774 38,499 37,938 56,977
Minority Interest 2,031 1,973 1,998 942 1,038 1,161 1,307
Total equities and liabilities 64,695 77,122 88,298 87,835 121,057 130,773 161,884
Assets (Rs mn)
Net block 39,480 49,240 61,339 59,748 78,470 84,269 90,835
Capital Work in Progress 7,503 11,250 797 460 4,882 14,737 41,368
Investments 3,638 2,955 2,830 3,993 3,993 3,993 3,993
Other non-current assets 2,183 1,978 5,821 5,054 5,054 5,054 5,054
Total non-current assets 52,804 65,424 70,788 69,255 92,399 108,054 141,250
Inventories 1,252 991 854 1,022 1,173 1,432 1,586
Cash 1,626 3,145 10,382 16,314 26,057 19,544 17,116
Total current assets 15,656 16,004 23,508 23,933 34,803 30,221 28,944
Trade payables 799 2,615 2,748 3,020 3,467 4,233 4,689
Short term provisions 55 82 89 79 91 111 123
Total current liabilities 3,765 4,306 5,997 5,353 6,145 7,502 8,311
Total assets 64,695 77,122 88,298 87,835 121,057 130,773 161,884
Ratios (%)
Debt to equity (X) 1.2 1.4 1.3 1.1 0.5 0.4 0.6
Net debt to equity (X) 1.2 1.3 1.0 0.7 0.2 0.2 0.4
RoAE (%) 7.2 10.5 10.7 20.6 16.0 16.2 16.8
RoIC (%) 8.0 8.7 10.7 18.6 19.1 19.9 18.0
JSW Infrastructure
27
Cash flows: We expect internal accruals + IPO proceeds to suffice for dominant part of impending capex
Cash from operations. We expect cash flow from operations to average ~Rs19 bn over FY2024-26
versus Rs13 bn average in the past three years. Working capital in the past three years has been a
limited quantum (Rs1 bn quantum) and we expect the same to be the case incrementally as well.
Usage of cash flow from operations. Against net cash generated from operating activities for Rs57
bn in the next three years, we expect a capex spend of ~Rs86 bn. We expect the IPO proceeds of Rs28
bn to cover up for the shortfall in funding from internal accruals.
Consolidated Cash flow statement of JSW Infra, March fiscal year-ends, 2020-26E (Rs mn)
2020 2021 2022 2023 2024E 2025E 2026E
Cash flow statement (Rs mn)
Depreciation 2,019 2,707 3,695 3,912 4,423 4,708 5,268
Finance cost 2,775 2,279 4,196 5,961 3,555 3,270 2,930
Interest income — — — (1,200) (1,767) (1,805) (1,713)
Operating cash flow before WC changes 7,105 8,912 12,156 17,827 18,711 24,073 27,336
Changes in WC (3,587) 660 783 1,952 (353) (627) (351)
Income tax paid (363) (497) (1,222) (1,807) (2,973) (3,992) (4,562)
Cash flow from operations 3,154 9,075 11,717 17,972 15,385 19,454 22,423
(Purchase) of PPE (6,738) (6,701) (5,068) (2,794) (27,566) (20,363) (38,464)
Proceeds/ (acquistion) from investments/subsidiaries 1,274 (857) (3,443) (3,027) — — —
Interest income 969 — 544 1,715 1,767 1,805 1,713
Others — (2,858) — (4,824) — — —
Cash flow from investing (4,494) (10,416) (7,968) (8,826) (25,800) (18,559) (36,751)
Change in debt 4,564 3,564 3,646 (5,054) (4,275) (561) 19,039
Change in equity 5,748 (2) — — 29,199 — —
Dividend and dividend tax paid — — — — (1,103) (3,226) (3,778)
Interest expense (2,156) (2,279) (3,621) (2,727) (3,555) (3,270) (2,930)
Cash flow from financing 8,156 1,283 26 (8,247) 20,266 (7,056) 12,331
Cash: Beginning 503 1,571 1,514 5,288 16,314 26,164 20,004
Net change in cash 6,816 (57) 3,775 899 9,850 (6,161) (1,997)
Cash: Ending 7,319 1,514 5,288 6,187 26,164 20,004 18,007
FCF (3,583) 2,375 6,649 15,179 (12,182) (909) (16,041)
Working capital of JSW Infra (consol.), March fiscal year-ends, 2020-26E (Rs mn)
2020 2021 2022 2023 2024E 2025E 2026E
Working capital (Rs mn)
Debtor 5,022 4,115 6,013 4,024 4,651 5,765 6,389
Inventory 1,252 991 854 1,022 1,181 1,464 1,622
Creditors 799 2,615 2,748 3,020 3,491 4,327 4,795
Net working capital 5,475 2,492 4,120 2,025 2,341 2,902 3,216
Working capital (days)
Debtor 160 93 97 46 46 46 46
Inventory 40 23 14 12 12 12 12
Creditors 26 59 44 34 34 34 34
Net working capital 175 57 66 23 23 23 23
JSW Infrastructure
28
Business profile: Benefiting from growth in capacity

The company is the second-largest commercial port operator in India in terms of cargo handling
capacity in FY2023 and is the fastest growing port-related infrastructure company in India in
terms of installed cargo handling capacity and cargo volumes handled during FY2020 to FY2023.
Its operations have expanded from one port concession at Mormugao, Goa acquired in 2002 and
commenced operations in 2004 to ten port concessions as of November 30, 2023 across India,
making it a diversified maritime ports company. Its installed cargo handling capacity in India saw
a CAGR of 15.8% from 102.5 MMTPA as of March 31, 2020 to 160.2 MMTPA as of March 31,
2023.
Second-largest diversified commercial port operator in India with nine concessions

JSW Infrastructure is the second-largest diversified commercial port terminal operator in India in terms
of port capacity in FY2023. It is the fastest growing port-related infrastructure company in India in terms
of installed cargo handling capacity and cargo volumes handled during FY2020-23. Its operations have
expanded from one port concession at Mormugao, Goa, which was acquired by the JSW Group in 2002
and commenced operations in 2004, to ten port concessions as of November 30, 2023, across India. Its
installed cargo handling capacity in India saw a CAGR of 15.8% to 160.2 MMTPA, as of March 31, 2023
from 102.50 MMTPA, as of March 31, 2020. It has a diversified presence across India, with non-major
ports located in Maharashtra and port terminals located in major ports across the West Coast (Goa and
Karnataka), East Coast (Odisha and Tamil Nadu). In the same period, its cargo volumes handled in India
saw a CAGR of 39.3% from 34.01 MMT to 92.87 MMT. In addition to its operations in India, the company
operates two port terminals under O&M agreements for a cargo handling capability of 41 MTPA in the
UAE, as of June 30, 2023.
Strategically located assets in close proximity to anchor customers and industrial clusters
It has a diversified presence across India with non-major ports located in Maharashtra and port terminals
located in major ports across the industrial regions of Goa and Karnataka on the West Coast, Odisha on
the East Coast and Tamil Nadu on the Southwest Coast. The majority of its assets have the natural
advantage of a deep draft, enabling direct berthing of larger vessels such as capesize and post-panamax
vessels. Its Jaigarh Port on the West Coast has a draft of 17.5 meters, which is one of the deepest draft
ports in India (Source: CRISIL report). The strategic location of the Jaigarh Port allows it to operate a
hub-and-spoke model of cargo handling with its ability to handle capesize vessels with DWT of 192,498
tons and its ability to trans-ship cargo to Dharamtar Port, which is a riverine/lower draft port located at
a distance of 18 nautical miles.
JSW Infrastructure
29
Location of assets and proximity to facilities of Anchor customers
Key aspects of port concessions

Average concession period remaining of 25 years. Its anchor customers benefit from relatively low
cost of delivery for their cargo due to the proximity of its port concessions to their facilities. As of
June, 2023, the capacity weighted average balance concession period of its operational ports and
terminals stood at 25 years, with Jaigarh Port, one of its largest assets, having a balance concession
period of 35 years.
Minimum commitment accounts for 27.37% of volumes handled in FY2023. As of March 31, 2023,
the contracted minimum commitment for cargo handling under take-or-pay provisions aggregated to
25.40 MTPA, or 23.37% of the total volume of cargo handled in FY2023.
JSW Infrastructure
30
Minimum commitment of volumes account for minority share of installed capacity

Minimum committed volumes versus total volumes handled by the company, March fiscal year-
ends, FY2020-23 (MT)
2020 2021 2022 2023
Installed capacity 103.0 119.0 153.4 160.0
Minimum commitment 15.4 19.78 25.4 25.4
Actual volume handled 34.0 45.5 62.0 92.9
Customer profile: Diversifying cargo mix

Diversifying customer base. Cargo handled for third-party customers accounted for 33.4% of overall
volumes in FY2023 compared to 25.5% in FY2022 and 26.1% in FY2020. The company aims to create
a balanced customer base by cultivating stronger relationships with third-party clients and diversifying
its cargo mix. In such direction, it is participating in new port concessions and diversifying into new
cargo classes in containers and liquid segments.
Expects to benefit from future expansions of select entities in JSW Group. JSW Infra is part of the
JSW Group, a multinational conglomerate with an international portfolio of diversified assets across
various sectors, including steel, energy, infrastructure, cement, paints, venture capital and sports. It
expects to continue to benefit from the growth of various businesses within the group. For example,
its anchor customers are in the process of achieving expanded installed capacities of up to 38.50
MTPA (JSW Steel), 21.00 MTPA (JSW Cement) and 9,896 MW (JSW Energy). Such expansions would
add to the growth of cargo volumes across its existing assets and provide a base for future growth at
new locations.
Long-term take-or-pay contracts of the company as of FY2023

Actual volume
Minimum handled during
Customer Commitment (MT) FY2023 (MT) Tenor Service Type At Port/ Terminal
JSW Steel Limited 15.0 22.9 CY2030 Cargo handling Dharamtar
JSW Steel Limited 4.0 13.8 CY2030 Cargo handling Jaigarh
JSW Energy Ltd as part of its tolling
arrangement JSW Steel, Amba River Coke
Fixed sum (2) Fixed sum (2) CY2024 Cargo handling Jaigarh
Limited, JSW Cement Limited and JSW Steel
Coated Products limited
Western Concession Private Limited
(formerly known as H-Energy Gateway Private 1.4 — CY2058 Cargo handling Jaigarh
Limited )
JSW Steel Limited 4.0 2.8 CY2035 Cargo handling Ennore Container
JSW Steel Limited 1.0 0.3 CY2035 Cargo handling Ennore Bulk
Total 25.4 39.8 — — —
Notes:
(1) Cargo commitment by the customers is for JSW Energy Limited’s power plant located in Ratnagiri
(2) Fixed sum represents commercial arrangement between parties under these contracts to provide with a fixed fee for cargo handling services and is not linked to
cargo volume
JSW Infrastructure
31
Customized service contracts entered by the company with some of the anchor customers on a take-or-pay basis
Details of contracts with customers as of FY2023
Actual volume
Minimum handled during
Customer Commitment (MT) FY2023 (MT) Tenor Service Type At Port
JSW Steel Limited 4.0 2.2 CY2031 Mini-bulk carriers Jaigarh
JSW Steel Limited 9.0 13.8 CY2030 Dredging fee Jaigarh
JSW Energy as part of its tolling
arrangements with JSW Steel Limited, Amba Fixed sum Fixed sum (1)
CY2030 Dredging fees Jaigarh
River Coke, JSW Steel Coated Products (1)
Limited
Trans Impex LLP Fixed sum (2) Fixed sum (2) CY2027 Liquid storage facility Jaigarh
Total 13.0 15.9 — — —
Notes:
(1) Fixed sum represents the commercial arrangement between the parties under these contracts to provide with a fixed dredging fee that is not linked to cargo
volume
(2) Fixed sum represents commercial arrangement between parties under these contracts to provide with a fixed fee for using liquid storage facility, that is subject
to an annual escalation of 5%
Business volume mix of JSW Infrastructure

Details of portfolio of JSW Infrastructure, March fiscal year-ends (MT, %)
Mangalore
South West Paradip Iron Paradip Coal Exports Mangalore Coal Ennore Coal Ennore Bulk Fujairah Dibba
Port Name Jaigarh Port Dharamtar Port Port Ore Terminal Terminal Container Terminal Terminal Terminal Terminal Total Terminals Terminal
Hinterland Maharashtra Maharashtra Goa Odisha Odisha, Jharkhand Karnataka Karnataka Tamil Nadu Tamil Nadu Pan-India UAE UAE
Port type Non-Major Non-Major Major Major Major Major Major Major Major N/A N/A N/A
Capacity (MT) 50 33.95 8.5 10 30 4.22 (1) 6.73 8 2 [●] 24 17
Acquired in Acquired in Acquired in
Commencement date 2010 2012 2004 2020 2021 Phase I: 2022 N/A 2017 2022
2020 2020 2020
End of Concession period 2058 2044 2029 2046 2047 2050 2047 2038 2045 N/A 2027 2028
(2)
Maximum draft (meters) 17.5 5.0 meters 14 16 15 14 14 16 14.5 N/A 14 14
Berth length (meters) 2,319 1,195.50 450 370 686 350 315 347.5 270 6,161 610 [●]
Bulk handling equipment
(MHCs, Ship Unloaders, 18 9 6 6 8 2 4 4 2 59 2 1
Stacker Reclaimer)
Tankages (kl) 56.77 — — — — — — — — 91.2 — —
Storage area (sq m) 448,126 — 44,877 82,125 145,325 — 92,640 136,800 75,750 1,025,111 — —
JSW Energy: ₹15 per MT in
the first year of operations,
As per Scale of
subject to revisions by the
Rates
Maharashtra Maritime 18% of gross
(commodity
Board revenue 52.52% of
wise) published 21% of gross 31.70% of gross ₹951 Per TEU at 31% of gross 36% of gross
Royalty/ revenue sharing excluding gross — — —
by Maharashtra revenue revenue the time of bidding revenue revenue
Other customers: ₹3 per berth hire revenue
Maritime Board
MT in the first year of income
from time to
operations, escalated by
time.
20% annually till the 15th
year of operation
Notes:
*1 million TEU is equal to 14.6 MT
1. 239,148 MTPA – Container, 0.64 MTPA – other cargo
2. Berth pocket (3.5 meters at Amba River channel)
Revenue share from forex has come down

JSW Infra’s operations have a natural hedge on US dollar borrowings through US dollar-linked revenue.
Foreign currency borrowings are designated as hedging instruments in cashflow hedges of forecast
sales in the US dollar. Such foreign currency borrowings amounted to Rs41 bn as of end-FY2023.
Revenue received in foreign currency accounts for ~8% of the total revenues from operations. The year-
end foreign currency exposures that have not been hedged as of end-FY2023 was Rs1.6bn.
JSW Infrastructure
32
Revenue earned in foreign currency has come down in the past two years
Revenues received in foreign currency, March fiscal year-ends, FY2020-23 (Rs mn, %)
FY2021 FY2022 FY2023
Percentage of Percentage of Percentage of
Revenues in Revenues in Revenues in
total revenue total revenue total revenue
forex (Rs mn) forex (Rs mn) forex (Rs mn)
(%) (%) (%)
Revenue earned in forex 2,548 15.9 3,744 16.5 5,087 15.9
Major events and milestones in the history of the company and its subsidiaries
Year Milestone
JSW Jaigarh Port Limited entered into a concession agreement dated June 24, 2008 with Maharashtra Maritime Board for common user
2008
multi-port at Dhamankhol Bay, Jaigarh, Ratnagiri, Maharashtra
2010 JSW Jaigarh Port Limited received consent to operate for an all weather green filed port facility at Jaigarh Port, Maharashtra
2012 Commencement of operations by JSW Dharamtar Port Private Limited at Dharamtar jetty, Maharashtra
JSW Paradip Terminal Private Limited entered into a concession agreement dated May 29, 2015 with Board of Trustees of Paradip Port for
2015 development of new iron ore berth for handling of iron ore exports
Cape vessel handled at Jaigarh Port
Paradip East Quay Coal Terminal Private Limited entered into a concession agreement dated May 2, 2016 with Board of Trustees of Paradip
Port Trust for mechanisation of EQ – 1, 2, 3 berths for handling of thermal coal exports at Paradip port, Odisha
2016
Entered into an agreement dated November 8, 2016 for operations and maintenance of berth 5 and berth 6 at the Fujairah Sea Port with
Port of Fujairah (United Arab Emirates) for undertaking to achieve bulk cargo handling capacity of 24 metric tonne per annum
2019 Commissioned a liquified natural gas terminal at Jaigarh Port, Maharashtra
JSW Mangalore Container Terminal Private Limited entered into a concession agreement dated January 27, 2020 with Board of Trustees
for New Mangalore Port for mechanization of berth no. 14 for handling containers and other cargo at New Mangalore Port Trust
2020 Acquired the Chettinad group’s terminal business to develop, operate, buy or bid for any terminal or berth for handling coal and general cargo
and assuming the related operations at Ennore Coal Terminal Private Limited, Ennore Bulk Terminal Private Limited, and Mangalore Coal
Terminal Private Limited
Capacity of Dolvi Port was enhanced from 9.69 to 33.95 metric tonne per annum with fully mechanized cargo handling system
2021
Commenced commercial operations at the EQ – 1, 2, 3 berths at Paradip port, Odisha
Commenced commercial operations at berth no. 14 at New Mangalore port, Karnataka
2022 JSW Terminal (Middle East) FZE entered into an agreement dated November 29, 2022 with Port of Fujairah for operations and maintenance
of a mechanized bulk handling terminal at Dibba Port, Fujairah
Details of ports and terminals of JSW Infrastructure
Details of Jaigarh Port

Particulars of Jaigarh port Details
Installed capacity 50 MTPA
LNG, LPG, molasses, sugar, steel coil, bauxite, fly ash, thermal coal, coal (other
Cargo type than thermal coal), iron ore, limestone, fertilizers, coated pipes, rock phosphate,
sulphur, steel coil, containers, gypsum, and edible oil.
Minimum throughput (annual) None
Draft 17.5 meter
Maximum vessel size 210,000 DWT
Number of berths 7
Total berth length 2319 meters
Number of cranes, ship loaders and unloaders Cranes - 4 mobile harbor cranes, 6 shiploaders, 5 ship unloaders
JSW Energy: Rs15 per MMT in the first year of operations, subject to revisions by
the Maharashtra Maritime board
Royalty/Revenue share
Other customers: Rs3 per MMT in the first year of operations, escalated by 20%
annually till 15th year of operations
JSW Infrastructure
33
Details of the Dharamtar Port

Particulars of Dharamtar port, Dolvi Details
Iron bearing raw material, coal bearing raw material, fluxes, clinker, cement, HR
Cargo type
coil, sheets, CR coils, other steel products and slag
Minimum throughput (annual) None
Draft 5.0 meters at berth pocket and 3.5 meters at the Amba river channel
Number of berths 5
Number of cranes, ship loaders and unloaders 5 ship unloaders
As per Scale of Rates (commodity wise) published by the Maharashtra Maritime
Royalty/Revenue share
Board
Details of Terminal at South West Port

Particulars of Terminal at South west port Details
Installed capacity 8.5 MTPA
Cargo type Thermal coal, coal (other than thermal coal), steel, limestone and other dry bulk
Minimum throughput (annual) 5 MT
Draft 14 meters
Maximum vessel size Handymax and Panamax vessel up to 100,000 DWT
Number of berths 2
Number of cranes, ship loaders and unloaders Cranes - 1 mobile harbor cranes, 5 gantry cranes, 2 ship unloaders
Royalty/Revenue share 18.00% of gross revenue excluding berth hire income
Details of Paradip iron ore export terminal

Particulars of Paradip iron ore export terminal Details
Cargo type Iron ore and pellets
20% of the terminal’s capacity in the first year of operations with an annual
Minimum throughput (annual) escalation of 10% of the terminal’s capacity till the sixth year; 70% of the
terminal’s capacity from the sixth year onwards
Draft 16 meters at the berth pocket
Number of berths 1
Number of cranes, ship loaders and unloaders 2 ship unloaders
Royalty/Revenue share 21% of gross revenue
JSW Infrastructure
34
Details of Paradip coal export terminal

Particulars of Paradip coal export terminal Details
Cargo type Coal
20% of the terminal’s capacity in the first year of operations with an annual
Minimum throughput (annual) escalation of 10% of the terminal’s capacity till the sixth year; 70% of the
terminal’s capacity from the sixth year onwards
Number of berths 2
Number of cranes, ship loaders and unloaders 2 ship loaders
Royalty/Revenue share 31.7% of gross revenue
Details of new Mangalore coal terminal

Particulars of New Mangalore Coal Terminal Details
Installed capacity 6.73 MTPA
Cargo type Coal, limestone, and dolomite cargo
2.02 MMT in the first year of operations with an annual escalation for five years;
Minimum throughput (annual)
3.70 MMT from the fifth year of operations onwards
Number of berths 1
Details of new Mangalore container terminal

Particulars of New Mangalore Container TerminalDetails
Installed capacity 4.2 MTPA including 0.6 MTPA for bulk cargo
Cargo type Container
91,000 TEU in the first year of operations with an annual escalation throughout the
term of concession leading to 228,000 TEU in the 29th year of operations
Maximum vessel size 9,000 TEUs
Number of berths 1
Number of cranes, ship loaders and unloaders 2 mobile harbour cranes
Royalty/Revenue share Rs951/TEU at the base year
JSW Infrastructure
35
Details of Kamrajar Port

Particulars of Kamrajar port Details
Cargo type Coal
Rs50 mn in the first year of operations with an annual escalation throughout the
term of concession leading to ₹206.00 million in the 15th year of operations.
Number of berths 1
Total berth length 347.5 meters
Royalty/Revenue share 52.52% of gross revenue
Details of Ennore bulk terminal

Particulars of Ennore bulk terminal Details
Cargo type Dry bulk cargo (clean cargo other than coal, iron ore, POL and automobile units)
No minimum throughput for the first two years of operations; 0.6 MMT in the
third year; 1.00 MMT in the fourth year; and 1.40 MMT in the fifth year onwards
Draft 14.5 meters at the berth pocket
Number of berths 1
Number of cranes, ship loaders and unloaders 2 mobile harbour cranes
JSW Infrastructure
ANNEXURE
36
A1
Appendix 1: Background of the board of directors of the company
JSW Infrastructure: A brief background of the board of directors of the company

Name Age (years) Position Remarks
Sajjan Jindal, aged 63 years, is the Chairman and Non-Executive Director and the Individual Promoter of the
company. He holds a bachelor’s degree in mechanical engineering from Bangalore University. He has been
associated with JSW Steel Limited as its managing director since 1997 and is currently the chairperson and
managing director of JSW Steel Limited. He is the vice chairman of the World Steel Association and is also
Chairman and Non-
Sajjan Jindal 63 on the board of directors of JSW Holdings Limited and JSW Energy Limited. He was previously associated
Executive Director
as a director with JSW Bengal Steel Limited, National Skill Development Corporation and The Associated
Chambers of Commerce and Industry of India. He is a recipient of the EY Entrepreneur of the Year 2022
award, Business Standard CEO of the Year award in 2018 and the IIM JRD Tata award for Excellence in
Corporate leadership in Metallurgical Industries, 2017
Nirmal Kumar Jain, aged 76 years, is the Vice Chairman and Independent Director of the company. He holds
a bachelors’ degree in commerce from Jiwaji University, Gwalior. He has passed the final examination held
Nirmal Kumar Vice Chairman and
76 by the Institute of Chartered Accountants of India and has passed the final examination held by the Institute
Jain Independent Director
of Company Secretaries in India. He joined Jindal Iron & Steel Company Limited in 1992 as general manager -
finance. He has significant years of experience in the area of finance.
Arun Sitaram Maheshwari, aged 53 years, is the Joint Managing Director and Chief Executive Officer of the
company. He holds a bachelors’ degree in commerce from Ajmer University. He has passed the final
examination of master of business administration held by Mohanlal Sukhadia University, Udaipur. He has
Arun Sitaram Joint Managing
53 previously been associated with Jindal Strips Limited, Jindal Iron & Steel Company Limited and Jindal
Maheshwari Director and CEO
Vijaynagar Steel Limited. He has over 30 years of experience in the areas of marketing, import (raw
materials), corporate strategy and infrastructure. He has been associated with our Company since April 18,
2019
Lalit Chandanmal Singhvi, aged 59 years, is the Whole Time Director and Chief Financial Officer of the
company. He holds a bachelor’s degree in commerce (honours) from University of Jodhpur and is a fellow
member of the Institute of Chartered Accounts of India. He has been associated with our Company since
Lalit Chandanmal Whole Time Director
59 January 15, 2015 as senior vice president – finance and commercial. He has previously been associated
Singhvi and CFO
with Shree Shubham Logistics as a president -commercial, Sterlite Industries (India) Limited as a chief
executive officer for Fujairah Gold FZE, Suhail Bahwan Group (Holding) LLC as a general manager (finance).
He has significant years of experience in the areas of management and finance.
Kantilal Narandas Patel, aged 71 years, is the Non-Executive Director of the company. He holds a bachelor’s
degree in commerce from University of Bombay and participated in the management development
programme on general management (strategic issues) from the Indian Institute of Management, Calcutta.
Kantilal Narandas
71 Non-Executive Director He has passed the final examination held by the Institute of Chartered Accountants of India. He joined the
Patel
Jindal Iron & Steel Company Limited in 1995 as vice president - finance. He was previously associated with
JSW Holdings Limited as joint managing director and chief executive officer and is currently associated with
JSW Holdings Limited as a nonexecutive director.
Ameeta Chatterjee, aged 50 years, is the Independent Director of the company. She holds a bachelor’s
degree in commerce (honours course) from University of Delhi, where she was awarded the M. C. Shukla
Ameeta Prize in 1993 for securing the highest marks in aggregate in the business law and company law. She also
50 Independent Director
Chatterjee holds a post graduate diploma in management from the Indian Institute of Management, Bangalore. She
was previously associated with Leighton Contractors (India) Private Limited, a division of Leighton
International Limited as a general manager, investments and acquisitions.
Gerard Earnest Paul Da Cunha, aged 68 years, is the Independent Director of the company. He holds a
bachelor’s degree in architecture from University of Delhi. He is the founder of the architecture firm,
Architecture Autonomous. He has won the first prize for the “Prime Minister’s National Award for Excellence
Gerard Earnest
68 Independent Director in Urban Planning and Design, 1998-99” for the project Jindal Vijaynagar Steel Limited Township, Bellary by
Paul Da Cunha
the Ministry of Urban Development, Government of India. He is also credited with winning the
“Commendation Award, 1990” for rural architecture for his project “Nrityagram” at Bengaluru, Karnataka. He
has won the “Man of the Year” award, 2003 by Goa Today.
Amitabh Kumar Sharma, aged 51 years, is the Independent Director of the company. He has passed the
examination for the bachelor’s degree in law. He has been enrolled as an advocate with the Bar Council of
Amitabh Kumar Delhi since August 31, 1995. He was previously associated with HSA Advocates as a managing partner and
51 Independent Director
Sharma as a partner with Khaitan & Co and J. Sagar & Associates. He is currently associated with NorthExcel
Associates, Advocates & Legal Consultants as a partner. He has significant years of experience in general
corporate, mergers and acquisitions, private equity, projects and financing matters.
JSW Infrastructure
UPDATE
Strategy
January 08, 2024
Privatization—the 3P challenges Key estimates summary

We find the Street’s hopes about privatization of PSUs quite misplaced given 2023 2024E 2025E
the issues of (1) policy, (2) practice and (3) price. (1) The government’s stated Nifty estimates
policy on privatization of PSUs, (2) practical issues seen in previous attempts Earnings growth (%) 11.3 18.4 11.0
to privatize PSUs and (3) high prices of PSUs should provide plentiful caution Nifty EPS (Rs) 813 974 1,089
against making privatization as an investment thesis for PSUs. Nifty P/E (X) 26.5 22.1 19.8
Macro data
Sharp run-up in PSU stock prices; don’t bank on privatization Real GDP (%) 7.2 7.0 6.3
We are not sure if the privatization thesis for PSUs is an ex ante reason for or a Avg CPI inflation (%) 6.7 5.4 4.5
post facto justification for the sharp run-up in stock prices of PSUs in the past
Source: CEIC, Kotak Institutional Equities estimates
few months (see Exhibit 1). We are surprised by the privatization argument for
PSUs in light of (1) stated policy of the government for PSUs, (2) practical
challenges seen in the attempts to privatize BPCL, CCRI and (3) high prices
(inflated valuations) of the PSUs with many PSUs trading at a large premium to Quick Numbers
their private sector counterparts, presumably the bidders for the PSUs.
BSE PSU Sector Index is up 29%, 42% and 56% in the
Policy—one or more PSUs in four broad strategic sectors
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities Act of 1933
past three, six and 12 months
We rule out privatization of most of the larger PSUs (see Exhibit 2 for a list of
Four broad sectors and 10 sectors classified as
PSUs and their respective sectors) given the stated policy of the government to strategic by the Indian government
retain control over one or more PSUs in a strategic sector. Under its New Public
CCRI trades at 38% premium to ADSEZ, NALCO at 21%
Sector Enterprise Policy of February 2021, the government has classified premium to Hindalco and SAIL at 2.5% premium to
certain sectors as strategic for national security, energy security, critical TATA on 12-month forward P/E basis
infrastructure, etc. reasons. These four broad sectors include (1) atomic energy,
space and defense, (2) banking, insurance and financial services, (3) power,
petroleum, coal and other minerals and (4) transport and communication.
Practice—not easy
We note severe practical challenges that have stymied and may stymie the
government’s privatization efforts. The case of CCRI is noteworthy, as the
government had to rework several agreements between CCRI and Indian
Railways (see Exhibit 3 for details) to enable the privatization of CCRI, which is
yet to take place despite being cleared for privatization in November 2019 .
BPCL did not see much interest among potential bidders given the sunset
nature of the oil refining and marketing sector. BPCL is a good example of the
difference in approach to investment and ownership between strategic (long-
term view of sector) and financial (relatively short-term view) investors.
Price—PSUs are trading at a premium to their private sector peers

We note that valuations of most PSUs have expanded sharply over the past few
months (see Exhibit 4, which compares current, six-month ago and 12-month
ago 1-year forward P/E or P/B of select PSUs). The high valuations of the PSUs
may reduce the interest of potential bidders even assuming that the
government was keen to privatize some of the PSUs. In fact, some of the
possible candidates for privatization in the non-strategic sectors (metals,
transportation) now trade at a large premium to their private sector peers (see
Exhibit 5).
Full sector coverage on KINSITE
Sanjeev Prasad Anindya Bhowmik Sunita Baldawa

38
PSU stocks have seen sharp increase in their prices over the past few months
Performance of PSU stocks (sorted on market cap. basis) (%)
Performance (%)
Company Sector 1M 3M 6M 12M
NTPC Electric Utilities 11 34 64 87
ONGC Oil, Gas & Consumable Fuels 11 20 33 48
Coal India Oil, Gas & Consumable Fuels 8 32 63 78
Power Grid Corp. Electric Utilities 6 23 26 55
Hindustan Aeronautics Capital goods 10 53 59 140
IOCL Oil, Gas & Consumable Fuels 12 48 34 66
Bharat Electronics Capital goods 16 32 48 86
GAIL (India) Gas Utilities 14 29 45 65
BPCL Oil, Gas & Consumable Fuels (3) 31 16 32
IRCTC Commercial & Professional Services 22 27 45 44
NHPC Electric Utilities 12 33 53 78
BHEL Capital goods 10 51 113 139
NMDC Metals & Mining 17 48 101 77
Container Corp. Transportation 3 22 30 18
Fertilizers & Chemicals Travancore Fertilizers & Agricultural Chemicals 6 51 72 129
SAIL Metals & Mining 17 29 32 33
Mazagon Dock Capital goods 8 3 68 176
Oil India Oil, Gas & Consumable Fuels 17 27 48 79
Rail Vikas Nigam Construction & Engineering 6 7 49 151
SJVN Electric Utilities 7 30 97 174
Bharat Dynamics Capital goods 30 72 56 83
Neyveli Lignite Corp. Electric Utilities 21 59 105 166
ITI IT services 3 58 179 195
Hindustan Copper Metals & Mining 44 73 124 131
National Aluminium Co. Metals & Mining 27 30 49 52
KIOCL Metals & Mining (0) 16 102 75
Cochin Shipyard Capital goods 2 21 123 158
IRCON International Construction & Engineering 12 27 119 206
NBCC Construction & Engineering 8 39 112 120
NMDC Steel Metals & Mining 7 (3) 14 NA
GMDC Oil, Gas & Consumable Fuels 9 37 172 203
BEML Capital goods 29 36 106 113
RITES Commercial & Professional Services 7 6 35 52
Railtel Corp. Telecommunication Services 21 59 161 175
Engineers India Construction & Engineering 30 39 64 137
CPCL Oil, Gas & Consumable Fuels 5 48 62 246
Garden Reach Shipbuilders & Engineers Capital goods 4 6 50 81
MMTC Capital goods 15 14 107 87
Rashtriya Chemicals & Fertilizers Fertilizers & Agricultural Chemicals 8 32 41 26
Shipping Corp. Transportation 4 14 68 52
Mishra Dhatu Nigam Metals & Mining 3 (3) 32 84
MOIL Metals & Mining 2 44 72 86
HMT Capital goods (3) (10) 78 51
National Fertilizer Fertilizers & Agricultural Chemicals 26 39 35 34
Hemisphere Prop Real Estate 20 50 66 60
MSTC Capital goods 45 49 75 115
ITDC Hotels & Restaurants 6 17 39 33
MTNL Telecommunication Services 17 22 79 44
Andrew Yule & Co. Consumer Staples 24 15 54 49
Madras Fertilizers Fertilizers & Agricultural Chemicals 5 45 42 52
State Trading Corp. Capital goods 10 20 79 59
Scooters India Automobiles & Components 4 102 127 121
Hindustan Organic Chemicals Commodity Chemicals 66 66 107 83
Bharat Immunolog Pharmaceuticals 33 46 54 10
Punjab Communications IT services 21 7 50 63
Hindustan Fluorocarbons Commodity Chemicals 55 50 119 85
Banks/Finance
State Bank of India Banks 2 6 6 4
LIC Insurance 7 28 32 16
PFC Diversified financials 5 65 129 223
IRFC Diversified financials 30 34 202 206
Bank of Baroda Banks 5 4 7 22
Punjab National Bank Banks 10 24 57 68
Union Bank Banks 5 16 53 52
Canara Bank Banks 3 20 35 41
Indian Overseas Bank Banks 1 (7) 63 39
Indian Bank Banks (0) 0 38 45
GIC Insurance 2 38 69 72
Bank of India Banks 4 9 48 27
UCO Bank Banks 2 (6) 40 30
Central Bank of India Banks 7 1 63 60
New India Assurance Insurance (3) 59 87 74
Bank of Maharashtra Banks (1) (5) 44 50
Punjab & Sind Bank Banks (0) (5) 31 35
IREDA Diversified financials 47 NA NA NA
HUDCO Diversified financials 37 35 113 139
J&K Bank Banks 11 11 85 128
IFCI Diversified financials 11 23 140 118
Gujarat State Financial Corp. Diversified financials 122 104 256 209
Source: Capitaline, Kotak Institutional Equities
Strategy
India Research
39
Many of the larger PSUs fall in the category of strategic sectors

List of PSUs with more than 51% government holding (sorted on market cap.)
Market Cap. Govt holding Stake sale
Company Sector (Rs bn) (US$ bn) (%) Entire up to 51%
Non-financial PSUs
NTPC Electric Utilities 3,069 37 51.1 1,568 3
ONGC Oil, Gas & Consumable Fuels 2,742 33 58.9 1,615 216
Coal India Oil, Gas & Consumable Fuels 2,344 28 63.1 1,480 284
Power Grid Corp. Electric Utilities 2,254 27 51.3 1,157 8
Hindustan Aeronautics Capital goods (defense) 2,003 24 71.6 1,435 413
IOCL Oil, Gas & Consumable Fuels 1,873 23 51.5 965 9
Bharat Electronics Capital goods (defense) 1,342 16 51.1 686 2
GAIL (India) Gas Utilities 1,057 13 51.5 544 5
BPCL Oil, Gas & Consumable Fuels 987 12 53.0 523 20
IRCTC Commercial & Professional Services 733 9 62.4 458 84
NHPC Electric Utilities 709 9 71.0 503 141
BHEL Capital goods 680 8 63.2 429 83
NMDC Metals & Mining 631 8 60.8 383 62
Container Corp. Transportation 531 6 54.8 291 20
Fertilizers & Chemicals Travancore Fertilizers & Agricultural Chemicals 522 6 90.0 470 204
SAIL Metals & Mining 472 6 65.0 307 66
Mazagon Dock Capital goods 448 5 84.8 380 151
Oil India Oil, Gas & Consumable Fuels 406 5 56.7 230 23
Rail Vikas Nigam Construction & Engineering 380 5 72.8 277 83
SJVN Electric Utilities 371 4 81.9 304 115
Bharat Dynamics Capital goods (defense) 315 4 74.9 236 75
Neyveli Lignite Corp. Electric Utilities 306 4 79.2 242 86
ITI IT services 291 3 90.3 263 114
Hindustan Copper Metals & Mining 259 3 66.1 171 39
KIOCL Metals & Mining 228 3 99.0 226 109
National Aluminium Co. Metals & Mining 227 3 51.3 117 1
Cochin Shipyard Capital goods (defense) 170 2 72.9 124 37
IRCON International Construction & Engineering 169 2 73.2 124 37
NBCC Construction & Engineering 153 2 61.8 95 16
NMDC Steel Metals & Mining 146 2 60.8 89 14
GMDC Oil, Gas & Consumable Fuels 144 2 74.0 106 33
BEML Capital goods 132 2 54.0 71 4
RITES Commercial & Professional Services 122 1 72.2 88 26
Railtel Corp. Telecommunication Services 111 1 72.8 81 24
Engineers India Construction & Engineering 112 1 51.3 57 0
CPCL Oil, Gas & Consumable Fuels 107 1 51.9 55 1
MMTC Capital goods 101 1 89.9 90 39
Garden Reach Shipbuilders & Engineers Capital goods (defense) 99 1 74.5 74 23
Rashtriya Chemicals & Fertilizers Fertilizers & Agricultural Chemicals 91 1 75.0 68 22
Shipping Corp. Transportation 78 1 63.8 50 10
Mishra Dhatu Nigam Metals & Mining 75 1 74.0 56 17
MOIL Metals & Mining 63 1 64.7 41 9
HMT Capital goods 61 1 93.7 58 26
Hemisphere Prop Real Estate 49 1 51.1 25 0
National Fertilizer Fertilizers & Agricultural Chemicals 48 1 74.7 36 11
MSTC Capital goods 44 1 64.8 29 6
ITDC Hotels & Restaurants 39 0 87.0 34 14
MTNL Telecommunication Services 22 0 56.3 13 1
Andrew Yule & Co. Consumer Staples 19 0 89.3 17 7
Madras Fertilizers Fertilizers & Agricultural Chemicals 18 0 59.5 10 1
Total 27,373 329 16,766 2,806
Financial PSUs
State Bank of India Banks 5,596 67 56.9 3,185 331
LIC Insurance 5,211 63 96.5 5,028 2,371
PFC Diversified financials 1,339 16 56.0 750 67
IRFC Diversified financials 1,306 16 86.4 1,128 462
Bank of Baroda Banks 1,156 14 64.0 739 150
Punjab National Bank Banks 1,046 13 73.2 765 232
Union Bank Banks 908 11 77.0 699 236
Canara Bank Banks 817 10 62.9 514 97
Indian Overseas Bank Banks 816 10 96.4 786 370
Indian Bank Banks 574 7 73.8 424 131
GIC Insurance 546 7 85.8 468 190
Bank of India Banks 539 6 73.4 395 121
UCO Bank Banks 484 6 95.4 461 215
Central Bank of India Banks 438 5 93.1 407 184
New India Assurance Insurance 366 4 85.4 313 126
Bank of Maharashtra Banks 325 4 86.5 281 115
Punjab & Sind Bank Banks 292 4 98.3 287 138
IREDA Diversified financials 282 3 75.0 212 68
HUDCO Diversified financials 249 3 81.8 203 77
J&K Bank Banks 139 2 59.4 83 12
IFCI Diversified financials 75 1 70.3 53 15
Total 22,517 271 17,192 5,708
Total 49,890 600 33,958 8,514
Source: Capitaline, Kotak Institutional Equities
Strategy
India Research
40
Several hurdles had to be overcome to enable privatization of CCRI

Key events in the timeline of proposed divestment of stake in Concor
Event Impact
Ministry of Railways decided to levy land license fee (LLF) at Land license fee (LLF) for Concor increased manifold, lowering
Mar-20
6% of market value and 7% annual inflation the cost disadvantage for its peers in the private sector
Concor's results release suggests Indian Railways' demand of The formula for calculating market value of land in select
Nov-20 LLF of Rs7.6 bn for two terminals against Rs2 bn of LLF terminals became a matter of discussion between Concor and
payment Concor made for all its terminals in the previous year Indian Railways
Ministry of Railways decided to (1) give option to Concor to
The endeavour was to enable Concor's peers to bid for
lower land license fee to 1.5% from 6% in lieu of it letting the
incremental concessions. Concor decided to hold on to most
concession to be rebid on parameter of terminal charges (out
Sep-22 terminals to start with. However, it let go of the key
of handling income earned from customers), (2) follow a
Tughlakabad terminal in Delhi while setting a substitute facility
process of bidding incremental concessions of railway land on
to cater to related traffic
similar terms
Source: Industry reports, Kotak Institutional Equities
Sharp rerating in most non-financial PSU stocks over the past year
Valuation of PSU stocks (sorted on mcap.) over the past 12 months (X)
P/E (X) P/B (X)
Company Sector 12-m prior 6-m prior Current Sector 12-m prior 6-m prior Current
Non-financial companies Banks/Finance
NTPC Electric Utilities 9.0 9.7 14.6 State Bank of India Banks 1.6 1.5 1.4
ONGC Oil, Gas & Consumable Fuels 3.9 4.4 5.7 LIC Insurance 12.9 5.1 5.0
Coal India Oil, Gas & Consumable Fuels 5.7 6.5 8.8 PFC Diversified financials 0.6 0.8 1.5
Power Grid Corp. Electric Utilities 9.8 11.5 13.9 Bank of Baroda Banks 1.0 1.0 1.0
Hindustan Aeronautics Capital goods 16.9 23.1 33.9 Punjab National Bank Banks 0.7 0.7 1.0
IOCL Oil, Gas & Consumable Fuels 6.9 6.3 6.8 Union Bank Banks 0.8 0.7 1.0
Bharat Electronics Capital goods 22.0 25.5 34.2 Canara Bank Banks 0.8 0.8 0.9
GAIL (India) Gas Utilities 8.4 8.5 11.5 Indian Overseas Bank Banks 2.5 NA NA
BPCL Oil, Gas & Consumable Fuels 11.4 8.1 6.8 Indian Bank Banks 0.8 0.8 1.0
IRCTC Commercial & Professional Services 50.6 44.2 56.5 GIC Insurance 0.8 0.7 1.0
NHPC Electric Utilities 9.6 10.8 15.8 Bank of India Banks 0.7 0.5 0.8
BHEL Capital goods 32.5 37.9 71.9 Central Bank of India Banks 0.9 NA NA
NMDC Metals & Mining 7.0 6.1 10.0 New India Assurance Insurance 0.7 0.6 1.1
Container Corp. Transportation 29.6 29.1 36.4 Bank of Maharashtra Banks NA NA 1.5
SAIL Metals & Mining 7.2 8.7 13.4 J&K Bank Banks NA NA 1.1
Mazagon Dock Capital goods 16.9 23.9 30.0
Oil India Oil, Gas & Consumable Fuels 3.9 4.6 6.3
Rail Vikas Nigam Construction & Engineering NA NA 25.2
SJVN Electric Utilities 11.2 12.5 22.3
Bharat Dynamics Capital goods 22.4 30.0 41.5
Neyveli Lignite Corp. Electric Utilities NA NA 14.2
National Aluminium Co. Metals & Mining 8.6 7.3 14.2
Cochin Shipyard Capital goods 12.6 15.8 27.4
IRCON International Construction & Engineering 8.3 10.8 19.8
NBCC Construction & Engineering 19.4 16.5 32.1
GMDC Oil, Gas & Consumable Fuels 5.2 7.8 22.0
BEML Capital goods 27.4 24.7 31.6
RITES Commercial & Professional Services 13.2 15.4 21.8
Engineers India Construction & Engineering 11.6 14.5 23.1
CPCL Oil, Gas & Consumable Fuels 2.2 6.1 6.9
Garden Reach Shipbuilders & Engineers Capital goods 10.8 15.2 20.5
Mishra Dhatu Nigam Metals & Mining 18.9 30.4 38.0
MOIL Metals & Mining 9.6 8.5 13.3
Source: Factset, Kotak Institutional Equities
Strategy
India Research
41
A number of PSU stocks are trading at a premium to their private sector counterparts
1-year forward P/E of PSU stocks versus their private peers, January 2024 (X)
1-year forward P/E (X)

40 36.4
35
30 26.4
25
20
13.4 13.1 14.2
15 11.7
10
5
0
SAIL Tata Steel NALCO Hindalco Container Corp. Adani Ports and
SEZ
Metals & mining Metals & mining Transportation
Source: Factset, Kotak Institutional Equities estimates
Strategy
India Research
CHANGE IN RECO.
Colgate-Palmolive (India) (CLGT) REDUCE

Consumer Staples
CMP(₹): 2,501 Fair Value(₹): 2,325 Sector View: Attractive NIFTY-50: 21,513 January 09, 2024
Valuation re-rating overdone Company data and valuation summary

CLGT stock has delivered a 55% return in the past seven months, driven by a Stock data
10% EPS upgrade (entirely margin-led) and a 30% re-rating to 48X 1-yr
CMP(Rs)/FV(Rs)/Rating 2,501/2,325/REDUCE
forward PE from 37X. We expect EPS growth to moderate to high-single digits
52-week range (Rs) (high-low) 2,546-1,435
following 20%+ growth in FY2024E. Even as management has called out
Mcap (bn) (Rs/US$) 680/8.2
volume growth as its #1 priority, we see an overarching focus on pricing and
ADTV-3M (mn) (Rs/US$) 950/11.4
margins that could weigh on market development, volume growth and
premiumization and scale-up of the Palmolive portfolio. We expect CLGT to Shareholding pattern (%)
continue to underperform the FCMG industry on volume growth. We tweak
estimates, roll over and revise FV to Rs2,325 (from Rs2,075), valuing CLGT
2.6
at 41X FY2026E PE (38X earlier). Downgrade to REDUCE from ADD. 16.9
Overarching focus on pricing and profitability could weigh on volume growth 3.0
2.4
51.0
Even as CLGT management has called out volume growth as its #1 priority, we
are not sure if it is prepared to prioritize growth over profitability. Take these 24.1
examples. (1) CLGT has used the inflationary cycle to push disproportionate
price increases and expand GMs by 350-400 bps to about 69% (industry Promoters FPIs MFs BFIs Retail Others
1933
leading). While RM prices have eased, CLGT continues to take price hikes. (2)
Price performance (%) 1M 3M 12M
The premium segment in the toothpaste category is under-indexed, with 15%
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities Act of
Absolute 9 26 65
salience versus 25% for similar BPC categories. CLGT has taken steeper price
Rel. to Nifty 6 16 44
increases in the premium portfolio, widening the gap between base and Rel. to MSCI India 5 13 42
premium brands (Exhibit 2). The intent is to maximize monetization from
consumers who have enough money (pricing inelastic demand). (3) In the case Forecasts/Valuations 2024E 2025E 2026E
of Palmolive, CLGT has restricted its focus to premium bodywash/handwash EPS (Rs) 47.0 51.4 56.3
as against building a broader portfolio spanning categories and price points. In EPS growth (%) 20.7 9.5 9.6
nutshell, we believe that the organization/group DNA is unlikely to change to P/E (X) 53.2 48.6 44.4
volume growth from pricing/margins. P/B (X) 37.4 35.5 33.6

EV/EBITDA (X) 36.3 33.4 30.5
We expect CLGT to underperform FMCG industry on volume growth RoE (%) 72.3 74.9 77.7
CLGT’s new CEO has stepped up focus on a few fronts: (1) premiumization Div. yield (%) 1.8 2.0 2.1
supported by adequate A&P investments; (2) in-store digitization (GT+MT) to Sales (Rs bn) 56 61 66
drive data-led decision-making on product assortments, pricing and promotions EBITDA (Rs bn) 18 20 22
using AI-led assortment recommendation and AI-based image recognition Net profits (Rs bn) 13 14 15
tools; (3) push for twice a day brushing habit (it is difficult/time-consuming to
Source: Bloomberg, Company data, Kotak Institutional Equities estimates
change consumer behavior, according to management); and (4) build personal
Prices in this report are based on the market close of
care through Palmolive. This, coupled with the likely plateauing of market share January 08, 2024
of Naturals segment, augurs well for CLGT. The weak rural demand would weigh
on growth (rural salience at 40%). Overall, we expect CLGT to deliver a 3-3.5%
volume CAGR in the next couple of years, weaker than the FMCG industry.
Downgrade to REDUCE from ADD with a revised FV of Rs2,325

The stock is up 55% in the past seven months, driven by a 10% EPS upgrade
(entirely margin-led as CLGT retained benefit of easing RM prices) and 30% re-
rating to 48X 1-yr forward PE (attributable to 20% EPS growth in FY2024E on a
low base and the expectation of accelerated premiumization/better execution
on volume growth under the new CEO). We expect CLGT’s volume growth lag
FMCG industry. We tweak estimates, roll over and revise FV to Rs2,325
(from Rs2,075) valuing CLGT at 41X FY2026E PE (38X earlier). Full sector coverage on KINSITE
Jaykumar Doshi Umang Mehta Praneeth Reddy

43
Key changes to estimates, Colgate-Palmolive India, March fiscal year-ends, 2024-26E

Revised Earlier Change (%)
2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E
Net operating revenues (Rs mn) 56,305 60,824 65,611 56,385 61,150 65,982 (0.1) (0.5) (0.6)
Revenue growth (%) 7.7 8.0 7.9 7.9 8.5 7.9
Gross profit (Rs mn) 38,781 42,046 45,519 38,611 41,935 45,314 0.4 0.3 0.5
Gross margin (%) 68.9 69.1 69.4 68.5 68.6 68.7 40 bps 54 bps 69 bps
EBITDA (Rs mn) 18,395 19,987 21,802 18,181 19,742 21,447 1.2 1.2 1.7
EBITDA margin (%) 32.7 32.9 33.2 32.2 32.3 32.5 42 bps 57 bps 72 bps
Net income (Rs mn) 12,778 13,986 15,325 12,616 13,795 15,047 1.3 1.4 1.8
Recurring EPS (Rs/share) 47.0 51.4 56.3 46.4 50.7 55.3 1.3 1.4 1.8
Source: Kotak Institutional Equities estimates
CLGT’s price increases post-Covid is higher than peers and ~5X of price hikes executed during 2015-20
A comparison of normalized prices of key SKUs across companies (per 100 gms)
Normalized price (Rs per 100 gms)
% change % change
Key SKUs Dec-15 Jan-20 Dec-23 2015-19 2019-23
Colgate
Colgate Cdc 150gm 40 43 61 8.3 41.5
Colgate Cibaca 175gm 25 29 36 13.6 26.0
Colgate Active Salt 100gm 48 52 73 8.3 40.4
Colgate Herbal 200G 43 49 78 15.3 58.2
Colgate Maxfresh Blue 150gm 59 61 91 4.5 47.8
Colgate Sensitive 80gm 125 124 138 (1.0) 11.1
Colgate Total Adv Health 120gm 73 81 158 10.9 95.9
Average price increase (%) 10.2 51.8
Other players
Pepsodent 2 In 1 150gm (HUVR) 59 65 69 10.2 6.2
Pepsodent Germicheck 200gm (HUVR) 43 43 61 (1.2) 43.5
Close Up Red 150gm (HUVR) 54 57 79 4.9 38.8
Lever Ayush Anti-cavity 150gm (HUVR) NA 53 63 NA 17.5
Sensodyne Fresh Gel 75gm (HUVR) 125 147 173 17.3 18.2
Babool 175gm (Dabur) 23 25 34 7.1 34.4
Dabur Red 200gm (Dabur) 44 48 63 8.0 31.6
Meswak 200gm (Dabur) 45 48 65 6.7 35.4
Patanjali Dant Kanti 200gm (Patanjali) NA 48 58 NA 21.1
Average price increase (%) 7.6 27.4
Notes:
(a) Prices as of Dec 2015, Jan 2020, and Dec 2023 are considered for comparison purpose.
Source: Kotak Institutional Equities
Colgate-Palmolive (India)
Consumer Staples India Research
44
CLGT’s volume growth is the weakest and margin expansion the highest among peers (FY2020-24E)
A comparison of volume CAGR, value CAGR and margin change of select FMCG companies, March
fiscal year-end, 2020-24E
FY2020-24E / CY2019-23E
Volume CAGR Value CAGR Gross margin EBITDA margin
(%) (%) change (bps) change (bps)
Colgate 1.8 6 363 bps 611 bps

HUVR 3.6 9 -352 bps -196 bps
GCPL India 5.4 12 -117 bps 12 bps
Dabur India 7.2 10 -234 bps -139 bps
Marico India 4.8 6 -51 bps 71 bps
Britannia 4.1 10 219 bps 223 bps
Nestle 5.5 12 -234 bps 12 bps
Notes:
(a) HUVR's volume CAGR, value CAGR and margin change is LFL adjusted for GSK-CH acquisition.
Colgate: Profit model, balance sheet and cash flow (based on Ind-AS), 2017-2026E, March fiscal year-ends (Rs mn)
2017 2018 2019 2020 2021 2022 2023 2024E 2025E 2026E
Profit model
Net sales 39,515 41,594 44,324 44,876 48,105 50,665 51,879 55,884 60,361 65,100
Other operating income 304 285 300 375 307 333 383 422 464 510
Net operating revenues 39,818 41,880 44,624 45,251 48,412 50,998 52,262 56,305 60,824 65,611
EBITDA 9,435 11,124 12,361 12,017 15,096 15,659 15,470 18,395 19,987 21,802
Other income 411 388 377 492 304 263 536 622 728 815
Interest — — (25) (96) (73) (59) (49) (49) (49) (49)
Depreciation (1,332) (1,565) (1,592) (1,979) (1,825) (1,773) (1,748) (1,817) (1,893) (1,998)
Pretax profits 8,514 9,947 11,121 10,434 13,502 14,090 14,209 17,151 18,773 20,570
Tax (2,902) (3,480) (3,844) (2,730) (3,148) (3,307) (3,625) (4,374) (4,787) (5,245)
PAT 5,613 6,467 7,277 7,704 10,354 10,783 10,584 12,778 13,986 15,325
Extraordinary items 162 267 479 461 — — (112) — — —
Reported Net profit 5,774 6,734 7,756 8,165 10,354 10,783 10,471 12,778 13,986 15,325
Earnings per share (Rs) 20.6 23.8 26.8 28.3 38.1 39.6 38.9 47.0 51.4 56.3
Balance sheet
Total equity 12,738 15,246 14,468 15,942 11,659 17,347 17,164 18,186 19,172 20,256
Total borrowings — — 777 — — — — — — —
Deferred tax liabilities (net) 275 355 309 50 — — — — — —
Total liabilities and equity 13,013 15,601 15,553 15,992 11,659 17,347 17,164 18,186 19,172 20,256
Net fixed assets (Incl CWIP) 12,747 13,045 13,896 13,129 12,096 10,848 9,759 8,764 8,404 8,011
Investments 312 312 312 186 186 — — — — —
Cash 2,943 4,562 3,994 4,213 8,676 7,547 9,230 11,510 13,156 14,964
Net current assets (excl cash) (2,989) (2,317) (2,647) (1,536) (9,300) (1,049) (1,825) (2,088) (2,388) (2,718)
Total assets 13,013 15,601 15,553 15,992 11,659 17,347 17,164 18,186 19,172 20,256
Free cash flow
Operating cash flow (excl working capital) 6,569 7,828 8,336 8,934 11,665 12,107 11,852 14,021 15,200 16,557
Working capital 311 (889) 1,494 (35) (3,826) 4,151 (89) 263 300 330
Capital expenditure (3,212) (2,087) (1,042) (604) (573) (496) (695) (822) (1,533) (1,605)
Free cash flow 3,668 4,852 8,788 8,295 7,266 15,762 11,068 13,463 13,966 15,282
Key assumptions, growth (%)
Volume growth (1.9) 3.0 5.8 0.6 3.3 3.3 (2.5) 2.0 3.6 3.9
Net operating revenue growth 2.9 5.2 6.6 1.4 7.0 5.3 2.5 7.7 8.0 7.9
EBITDA growth 0.5 17.9 11.1 (2.8) 25.6 3.7 (1.2) 18.9 8.7 9.1
EPS growth (8.4) 15.2 12.5 5.9 34.4 4.1 (1.9) 20.7 9.5 9.6
EBITDA margin (%) 23.7 26.6 27.7 26.6 31.2 30.7 29.6 32.7 32.9 33.2
Gross margin (%) 62.9 64.4 65.1 65.2 68.0 67.3 65.7 68.9 69.1 69.4
A&SP (% of sales) 12.9 12.6 12.7 13.8 12.9 12.6 12.1 13.5 13.5 13.5
Employee cost (% of sales) 7.2 7.3 6.6 7.3 7.6 7.6 7.2 7.3 7.2 7.2
Tax rate (% of PBT) 34.1 35.0 34.6 26.2 23.3 23.5 25.5 25.5 25.5 25.5
Ratios (%)
ROE (%) 48.7 46.2 49.0 50.7 75.0 74.4 61.3 72.3 74.9 77.7
ROCE (%) 67.9 65.7 68.2 60.7 88.2 89.7 75.9 89.5 92.3 95.6
Source: Kotak Institutional Equities estimates
Colgate-Palmolive (India)
Consumer Staples India Research
UPDATE
Specialty Chemicals
India
Sector View: Neutral NIFTY-50: 21,513 January 08, 2024
One more quarter of pain

3QFY24 is likely to have been another painful quarter for both chemical
intermediate makers and crop-protection chemical companies. We see high
risk of earnings downgrades for several companies including NFIL, RALI, SRF
and UPLL (versus KIE estimates) and ATLP, DN and TTCH (versus
consensus). Given rich valuations and recent strength in stock prices, we
remain cautious on the sector and see risks of disappointing returns from
most leading stocks.
Customer destocking, unfavorable Rabi season to hurt crop chemicals sector

3QFY24 was likely a difficult quarter for the crop-protection chemicals industry,
with exports likely hurt more than domestic sales amid continued destocking by
customers. That said, even the domestic Rabi season was challenging amid low
water levels, elevated channel inventories and intense competition. Some
companies again cut prices during the quarter; margins likely remained under
pressure. UPLL may be the worst-hit amid customer destocking and pricing
pressures. RALI is also likely to report sharply lower earnings owing to a collapse
in export revenues. GOAGRO will likely report a subdued quarter, with strength in
its domestic crop protection business offset by continued agony at Astec. BYRCS’
earnings growth may once again be supported by lower employee costs, although
revenue growth may be lackluster.
No signs of recovery yet for chemical intermediate makers

We expect another weak quarter for most chemical companies due to continued
destocking, demand weakness across certain important end-use industries, and
price erosion amid intense competition from China. In most cases, both revenues
and margins are likely to remain under pressure. The best results may again come
from PI, which continued to benefit from robust demand for its biggest product,
pyroxasulfone. Other companies under our coverage are all likely to post yoy
declines in earnings. We think TTCH, SRF, NFIL and ATLP are likely to register the
largest declines on a yoy basis, and all of them may also report qoq declines. Given
that stock prices of most chemical companies have run up into the results, we
think negative surprises on the earnings front could potentially spark corrections.
Most companies remain at risk of earnings downgrades

Companies for which the highest risk of downgrades to our FY2024E EPS are NFIL,
RALI, SRF and UPLL. As Exhibit 2 shows, in all of these cases, the asking rate for
earnings in 4QFY24 is likely to be almost impossibly high. Besides, our FY2024E
and FY2025E estimates are already significantly below consensus in the cases of
NFIL and UPLL, and so downgrade risk versus our estimates implies even greater
downgrade risk versus consensus. Separately, other companies for which our Related Research
FY2025E estimates are significantly below consensus are ATLP, DN and TTCH; we → Specialty Chemicals: Crop & Chemical
continue to see risks to consensus here. The only company for which our FY2024E
→ Dashboard: Recovery KIE
Specialty Chemicals: unlikely to be Forum
Chemical sharp
EPS seem conservative and likely to be upgraded is CLEAN; however, here our takeawaysChemicals: Crop & Chemical
→ Specialty
FY2025E EPS is in line with consensus and implies sharp yoy growth, and hence
Dashboard: Bottom is near, recovery unclear
seems unlikely to move up materially.
Full sector coverage on KINSITE
Abhijit Akella, CFA Sumit Kumar Eesha Mohanty

46
3QFY24 revenue, EBITDA and PAT growth

Summary of quarterly estimates, March fiscal year-ends (%)
yoy (in %) qoq (in %)
Revenues EBITDA PAT Revenues EBITDA PAT
Chemicals
ARTO IN Equity (4.1) (7.7) (24.5) 10.0 13.8 12.1
ATLP IN Equity (7.0) (11.9) (17.1) (1.2) (2.2) (3.6)
BYRCS IN Equity 5.0 42.6 39.8 (32.6) (60.0) (61.9)
CLEAN IN Equity (19.3) (27.1) (33.9) 5.7 5.4 5.3
DN IN Equity (9.0) (1.3) (0.1) 1.9 2.7 1.8
GOAGRO IN Equity 3.8 7.0 52.6 (6.1) (27.6) (34.0)
NFIL IN Equity (13.3) (34.9) (55.8) 3.6 3.0 (22.2)
PI IN Equity 18.9 18.0 8.4 (9.4) (11.2) (20.6)
RALI IN Equity (17.9) (43.0) (82.1) (37.8) (77.1) (95.0)
SRF IN Equity (13.0) (31.9) (49.6) (5.0) (9.3) (14.4)
TTCH IN Equity (13.7) (27.7) (40.3) (10.5) (18.7) (31.2)
UPLL IN Equity (30.4) (63.6) (138.7) (6.3) (20.8) 122.7
VO IN Equity 0.6 (26.7) (28.6) 14.2 8.4 6.3
Source: Companies, Kotak Institutional Equities estimates
3QFY24 and FY2024-25 EPS estimates: KIE versus consensus

EPS in Rs, March fiscal year-ends
KIE Consensus % deviation

3QFY24 9MFY24 FY2024 FY2025 3QFY24 9MFY24 FY2024 FY2025 3QFY24 9MFY24 FY2024 FY2025
ARTO IN Equity 2.8 7.2 10.6 16.0 3.4 8.5 10.9 18.0 -18% -15% -2% -12%
ATLP IN Equity 29.5 95.1 134.4 167.0 — — 153.2 197.2 NA NA -12% -15%
BYRCS IN Equity 18.9 141.6 188.2 209.7 15.2 109.3 178.6 200.7 24% 30% 5% 4%
CLEAN IN Equity 5.2 15.7 18.2 31.7 6.1 18.2 23.7 31.0 -15% -13% -23% 2%
DN IN Equity 15.3 41.3 59.8 69.0 18.0 46.7 61.2 83.8 -15% -11% -2% -18%
GOAGRO IN Equity 4.2 14.6 16.8 22.6 4.2 14.8 18.4 23.4 0% -1% -9% -3%
NFIL IN Equity 9.4 33.9 69.4 98.7 19.2 59.7 75.5 108.0 -51% -43% -8% -9%
PI IN Equity 25.1 82.1 103.4 110.1 25.6 74.9 102.0 117.4 -2% 10% 1% -6%
RALI IN Equity 0.2 7.6 9.1 10.9 1.5 7.9 8.5 11.0 -86% -3% 7% -1%
SRF IN Equity 8.7 31.0 50.4 73.0 18.0 45.6 55.8 73.9 -52% -32% -10% -1%
TTCH IN Equity 9.2 42.9 52.6 39.0 16.2 59.3 69.1 67.6 -43% -28% -24% -42%
UPLL IN Equity (5.5) (5.8) 27.4 40.0 10.8 20.7 39.2 54.2 -151% -128% -30% -26%
VO IN Equity 8.6 24.9 36.3 48.9 — — 37.0 50.2 NA NA -2% -3%
Source: Companies, Bloomberg, Kotak Institutional Equities estimates
Specialty Chemicals
India Research
47
The INR modestly depreciated versus the USD on a qoq basis in 3QFY24
USD-INR, March fiscal year-ends
84.0
83.2
82.7
82.1
81.0
79.7
78.0
75.0
2QFY23 1QFY24 2QFY24 3QFY24
Price tracker for key products of leading chemical intermediate manufacturers
3QFY24 2QFY24 3QFY23 qoq yoy Product of

Chemicals
ATBS 215 214 269 0.3% -20.3% VIN
BHA 841 840 944 0.2% -10.9% CLEAN, CFIN
Guaiacol 307 306 381 0.4% -19.3% CLEAN, CFIN
MEHQ 615 625 771 -1.5% -20.2% CLEAN, CFIN
Meta phenylene diamine 431 487 496 -11.5% -13.1% ARTO
Para dichlorobenzene 80 85 102 -6.3% -21.6% ARTO
P-Cresol 218 220 301 -0.9% -27.3% ATLP
Refrigerants
HFC 134A 467 627 1,028 -25.6% -54.6% SRF
HFC 125 899 937 1,378 -4.1% -34.7% SRF
R 22 290 311 340 -6.9% -14.6% GFL, NFIL, SRF
Agrochemicals
Acephate 493 512 659 -3.7% -25.2% BYRCS, INST, RALI, UPLL
Glufosinate 748 1,119 1,520 -33.2% -26.3% UPLL
Hexaconazole 883 940 1,004 -6.0% -6.4% BRSN, RALI
Mancozeb 149 170 240 -12.3% -29.0% CRIN, RALI, UPL
2,4-D 153 139 268 10.2% -42.9% ATLP
Source: Kotak Institutional Equities, Trade data
Specialty Chemicals
India Research
48
Quarterly earnings preview for specialty chemical companies

Change (%)
Dec-22 Sep-23 Dec-23E yoy qoq Comments
Speciality Chemicals
Aarti Industries
Net sales 16,680 14,540 15,994 (4.1) 10.0
EBITDA 2,884 2,340 2,663 (7.7) 13.8 For Aarti, we expect a 10% qoq pickup in revenues on a sequential basis versus what is a fairly easy
EBIT 2,064 1,410 1,713 (17.0) 21.5 base. On a yoy basis, though, we see revenues declining 4%. A more substantial recovery in demand
PBT 1,596 830 1,213 (24.0) 46.1 may have to wait until 4QFY24 at the earliest.
Tax 230 (90) 182 (20.9) NM
Reported PAT 1,366 920 1,031 (24.5) 12.1
Extraordinaries — — — NM NM On the margin front, we estimate a 50 bps qoq improvement driven by operating leverage, even as
Adjusted PAT 1,366 920 1,031 (24.5) 12.1 gross margins remain stable. While EBITDA rises 14% qoq in our estimates, it remains lower by 8%
EPS (Rs/share) 3.8 2.5 2.8 (25.7) 12.1 yoy. We see PAT rising 12% qoq but falling 25% yoy.
EBITDA margin (%) 17.3 16.1 16.6 -65 bps 55 bps
Atul
Net sales 12,683 11,937 11,788 (7.0) (1.2)
EBITDA 1,723 1,552 1,518 (11.9) (2.2) We expect another weak quarter for Atul, without any qoq improvement. Demand remains soft for
EBIT 1,219 1,012 968 (20.5) (4.3) now across the company’s business divisions. Prices of 2,4-D herbicide have picked up modestly of
PBT 1,275 1,215 1,171 (8.2) (3.6) late, but these may be largely offset by pressure on prices of para-cresol.
Tax 394 325 313 (20.5) (3.5)
Reported PAT 1,051 903 871 (17.1) (3.6) Competition from low-priced imports remains heavy, especially in the Colors division, while the recent
Adjusted PAT 1,051 903 871 (17.1) (3.6) commissioning of Grasim’s epoxy resin capacity expansion may further intensify competition in the
EPS (Rs/share) 35.6 30.6 29.5 (17.1) (3.6) Indian epoxies market as well. Overall, we expect revenues tick down 1% qoq (7% yoy). We expect
EBITDA margin (%) 13.6 13.0 12.9 -71 bps -13 bps margins to remain under pressure, leading to a 2% qoq and 12% yoy dip in EBITDA.
Revenue breakdown
Life Science chemicals 4,917 3,620 3,439 (30.1) (5.0)
Performance chemicals 8,280 8,684 8,684 4.9 0.0
Others 159 165 165 3.8 0.0
Inter segmental revenue (674) (532) (500) (25.8) (6.1)
EBIT breakdown
Life Science chemicals 1,107 417 431 (61.1) 3.2
Performance chemicals 213 722 722 239.5 0.0
Others 26 41 41 62.4 0.0
Unallocable expenses 102 52 52 (48.6) 0.0
Clean Science & Technology
Net sales 2,374 1,811 1,915 (19.3) 5.7
EBITDA 1,082 748 789 (27.1) 5.4 At Clean Science, we expect only a modest qoq improvement in performance. Export demand for the
EBIT 993 637 674 (32.1) 5.9 company’s key products remains subdued and a recovery may need to wait until the new calendar
PBT 1,119 700 737 (34.2) 5.4 year. We also do not expect a significant ramp up in revenues yet from the HALS product category.
Tax 280 173 182 (35.0) 5.4
Reported PAT 839 527 555 (33.9) 5.3
Adjusted PAT 839 527 555 (33.9) 5.3 However, we expect EBITDA margins to remain healthy at around 41% as price weakness in the
EPS (Rs/share) 7.9 5.0 5.2 (33.9) 5.3 company’s most important product, MEHQ is offset by operating leverage.
EBITDA margin (%) 45.6 41.3 41.2 -440 bps -13 bps
Deepak Nitrite
Net sales 19,910 17,781 18,117 (9.0) 1.9
EBITDA 3,145 3,023 3,103 (1.3) 2.7 For Deepak Nitrite, we expect this quarter to be stable on a sequential basis, with Phenolics spreads
EBIT 2,734 2,628 2,703 (1.1) 2.8 largely around the levels of 2QFY24, although sales volumes are expected to be higher. The Advanced
PBT 2,810 2,772 2,823 0.5 1.8 Intermediates segment is likely to remain under pressure amid continued demand softness.
Tax 720 721 735 2.1 1.8
Reported PAT 2,090 2,051 2,089 (0.1) 1.8
Extraordinaries — — — Margins should remain stable on a qoq basis across both segments. Overall, we expect consolidated
Adjusted PAT 2,090 2,051 2,089 (0.1) 1.8 revenues and EBITDA to fall 9% and 1%, respectively, on a yoy basis but rise 2% and 3%, respectively,
EPS (Rs/share) 15.3 15.0 15.3 (0.1) 1.8 on a qoq basis.
EBITDA margin (%) 15.8 17.0 17.1 133 bps 12 bps
Revenue breakdown
Advanced Intermediates 8,178 6,702 6,702 (18.0) 0.0
Phenolics 11,816 11,201 11,537 (2.4) 3.0
Others unallocable — — —
Intersegment revenue (83) (123) (123) (47.8) 0.0
EBIT breakdown
Advanced Intermediates 1,475 1,034 1,034 (29.9) 0.0
Phenolics 1,270 1,704 1,755 38.2 3.0
Others unallocable 124 61 61 (50.6) 0.0
Specialty Chemicals
India Research
49
Quarterly earnings preview for specialty chemical companies

Change (%)
Navin Fluorine
Net sales 5,636 4,718 4,887 (13.3) 3.6
For Navin Fluorine, we expect a 13% yoy decline in revenues driven by a high base, continued technical
EBITDA 1,556 983 1,013 (34.9) 3.0
challenges in ramping up capacity utilization in the Honeywell project, and sluggish ordering by
EBIT 1,306 741 761 (41.8) 2.7
customers in the CDMO business, although the company should benefit from deferred orders worth
PBT 1,313 772 629 (52.1) (18.6) Rs180 mn from the previous quarter.
Tax (247) (166) (157) (36.4) (5.4)
Reported PAT 1,066 606 472 (55.8) (22.2)
We expect EBITDA to fall 35% yoy due to operating leverage. In addition, higher depreciation and
Adjusted PAT 1,066 606 472 (55.8) (22.2)
interest expenses on the back of recent capacity commissioning is likely to exert further pressure on
EPS (Rs/share) 21.5 12.1 9.4 (56.1) (22.2)
PAT, which we see falling 56% yoy.
Revenue breakdown
HPP 2,530 2,380 2,261 (10.6) (5.0)
Speciality Chemicals 1,860 1,860 1,860 0.0 0.0
CDMO 1,250 480 768 (38.6) 60.0
Others (4) (2) (2) NM NM
PI Industries
Net sales 16,132 21,169 19,184 18.9 (9.4)
We expect agrochemical CSM revenues to grow by 11% yoy (down 6% qoq) whereas the domestic
EBITDA 4,151 5,514 4,896 18.0 (11.2)
business may grow only a modest 5% yoy amid a challenging Rabi season. We estimate that Pharma
EBIT 3,584 4,711 4,073 13.7 (13.5)
business revenues return to normal levels of Rs1.5 bn versus the depressed levels of 1HFY24, when
PBT 3,997 5,102 4,464 11.7 (12.5) PI booked IndAS adjustments of Rs471 mn.
Tax 484 317 670 38.4 111.2
Reported PAT 3,518 4,805 3,815 8.4 (20.6)
We expect EBITDA margins to remain healthy at ~25%, although down 50 bps qoq due to sequential
Adjusted PAT 3,518 4,805 3,815 8.4 (20.6)
decline in CSM revenues. Overall EBITDA growth is expected to be 18% yoy and PAT growth to be 8%
EPS (Rs/share) 23.2 31.7 25.1 8.3 (20.7)
yoy.
Revenue breakdown
CSM 13,286 16,329 16,196 21.9 (0.8)
Domestic 2,846 4,840 2,988 5.0 (38.3)
SRF
Net sales 34,697 31,774 30,200 (13.0) (5.0)
EBITDA 8,335 6,262 5,680 (31.9) (9.3) For SRF, we expect a weak quarter amid deferrals of specialty chemical orders from customers and
EBIT 6,829 4,650 4,028 (41.0) (13.4) softness in the refrigerants business as well. We also do not expect any meaningful pickup in the
PBT 6,309 4,148 3,478 (44.9) (16.2) packaging films segment, which continues to grapple with industry overcapacity.
Tax 1,200 1,140 904 (24.7) (20.7)
Reported PAT 5,109 3,008 2,574 (49.6) (14.4)
On the margin front, Chemicals segment margins may remain under pressure owing to operating
Adjusted PAT 5,109 3,008 2,574 (49.6) (14.4)
leverage created by revenue weakness. Overall, we expect EBITDA/PAT to fall 9%/14% on a qoq basis
EPS (Rs/share) 17.2 10.2 8.7 (49.6) (14.5)
and 32%/50% on a yoy basis.
Revenue breakdown
Technical textiles 4,259 5,062 5,062 18.8 0.0
Chemicals 17,566 14,263 12,124 (31.0) (15.0)
Packaging films 12,027 11,215 11,776 (2.1) 5.0
Others 923 1,269 1,269 37.4 0.0
EBIT breakdown
Technical textiles 342 750 750 119.2 (0.0)
Chemicals 5,639 3,478 2,835 (49.7) (18.5)
Packaging films 1,186 773 752 (36.6) (2.6)
Others 91 331 331 262.0 (0.0)
Other unallocable expenses (330) (390) (390) 18.1 0.0
Vinati Organics
Net sales 5,087 4,481 5,116 0.6 14.2
EBITDA 1,638 1,108 1,201 (26.7) 8.4 We expect additional revenues of Rs500 mn from the newly-amalgamated Veeral Additives (effective
EBIT 1,507 971 1,034 (31.4) 6.5 from October 1, 2023) in the quarter. Aside from this, we expect core business revenues to grow a
PBT 1,675 1,130 1,193 (28.8) 5.6 modest 3% qoq amid subdued demand for its key product, ATBS.
Tax (421) (289) (298) (29.1) 3.3
Reported PAT 1,254 842 895 (28.6) 6.3
Adjusted PAT 1,254 842 895 (28.6) 6.3 We expect gross and EBITDA margins to decline 60 bps and 120 bps qoq, respectively, due to slightly
EPS (Rs/share) 12.2 8.2 8.6 (29.2) 5.4 lower ATBS prices qoq and shift in product mix toward the lower margin business of Veeral Additives.
Specialty Chemicals
India Research
50
Quarterly earnings preview for Tata Chemicals

Change (%)
Tata Chemicals
Net sales 41,480 39,980 35,786 (13.7) (10.5)
We expect a weak quarter for Tata Chemicals, with consolidated revenues falling 14% yoy due to
EBITDA 9,220 8,190 6,662 (27.7) (18.7)
price erosion in soda ash as well as volume weakness amid demand softness. In addition, Rallis will
EBIT 6,950 5,850 4,322 (37.8) (26.1)
experience its usual seasonal slowdown and besides faces sharp declines in exports due to
PBT 6,250 5,250 3,372 (46.0) (35.8) destocking in the agrochemical industry.
Tax 1,020 1,200 776 (24.0) (35.4)
Reported PAT 3,980 4,280 2,376 (40.3) (44.5)
We see EBITDA plunging 28% yoy on the back of softness across all businesses except the UK.
Adjusted PAT 3,980 3,455 2,376 (40.3) (31.2)
Meanwhile, interest expense has risen sharply yoy, contributing to an even sharper 40% yoy drop in
EPS (Rs/share) 16 13 9 (41.0) (31.5)
consolidated PAT.
Revenue breakdown
India 12,180 10,660 10,541 (13.5) (1.1)
US 13,230 13,260 12,597 (4.8) (5.0)
UK 7,390 6,080 6,144 (16.9) 1.1
Kenya 2,410 1,560 1,326 (45.0) (15.0)
Rallis 6,300 8,330 5,178 (17.8) (37.8)
EBITDA breakdown
India 2,840 1,880 2,070 (27.1) 10.1
US 3,260 3,190 2,905 (10.9) (8.9)
UK 1,500 1,140 1,152 (23.2) 1.1
Kenya 1,240 510 332 (73.3) (35.0)
Rallis 530 1,350 304 (42.6) (77.5)
Specialty Chemicals
India Research
51
Quarterly earnings preview for agrochemical companies

Change (%)
Fertilizers & Agricultural Chemicals
Bayer Cropscience
Net sales 10,379 16,172 10,898 5.0 (32.6) We anticipate a modest 5% yoy increase in revenues due to high inventory levels in the channel and
EBITDA 854 3,049 1,218 42.6 (60.0) unfavorable weather conditions in the Rabi season, such as low water levels in reservoirs and
EBIT 711 2,933 1,068 50.2 (63.6) damage to horticultural crops in Maharashtra: horticulture is Bayer's biggest segment. Corn
PBT 829 3,057 1,163 40.3 (62.0) cultivation has remained stable in the Rabi season, whereas glyphosate prices are significantly lower
Tax 491 828 314 (36.0) (62.1) than last year.
Reported PAT 1,345 2,229 849 (36.9) (61.9)

Gross margins are expected to decline yoy as a result of lower glyphosate prices. On the other hand,
Adjusted PAT 607 2,229 849 39.8 (61.9)
employee cost may remain significantly lower yoy due to the reduction of employee incentives by the
EPS (Rs/share) 13.5 49.6 18.9 39.8 (61.9)
global parent. This should lead to a higher adjusted PAT yoy.
EBITDA margin (%) 8.2 18.9 11.2 294 bps -768 bps
Godrej Agrovet
Net sales 23,235 25,709 24,129 3.8 (6.1) We expect GAVL to report a subdued quarter with mid-single-digit revenue growth and flattish PBT
EBITDA 1,363 2,014 1,459 7.0 (27.6) yoy. Animal feed volume growth may remain in the single-digits but margins may be under pressure
amid losses in aqua feed. The palm oil business should remain fairly steady. In crop protection, the
EBIT 893 1,485 928 3.9 (37.5)
standalone business should continue to perform well amid good demand for in-licensed products but
PBT 720 1,317 728 1.1 (44.8) Astec will remain under pressure due to subdued demand. The Dairy segment should perform fairly
Tax 334 368 183 (45.2) (50.3) well, while Poultry may come under pressure amid weakness in the live bird business.
Reported PAT 1,163 1,053 695 (40.3) (34.0)
While animal feed margins may dip qoq, oil palm margins should remain steady and dairy segment
Extraordinaries 708 — — NM NM
margins may improve amid cost optimization initiatives. The standalone crop protection business
Adjusted PAT 456 1,054 696 52.6 (34.0)
should continue to report strong margins, whereas Astec will probably report another loss. Poultry
EPS (Rs/share) 2.4 5.5 3.6 52.4 (34.0) segment margins are expected to drop sequentially due to oversupply of live birds.
EBITDA margin (%) 5.9 7.8 6.0 18 bps -179 bps
Revenue breakdown
Animal feeds 12,724 12,420 13,343 4.9 7.4
Vegetable oil 3,625 4,474 3,806 5.0 (14.9)
Crop protection 2,157 3,790 2,308 7.0 (39.1)
Dairy 3,478 3,901 3,721 7.0 (4.6)
Others 2,923 2,459 2,251 (23.0) (8.5)
Elimination (1,672) (1,335) (1,300) (22.2) (2.6)
EBIT breakdown
Animal feeds 578 571 575 (0.6) 0.7
Vegetable oil 794 687 647 (18.6) (5.9)
Crop protection 86 649 398 363.8 (38.6)
Dairy (136) 29 59 NM 100.0
Others 105 63 — (100.0) (100.0)
Unallocable expenses 2 (681) (650) NM (4.6)
Rallis India
Net sales 6,304 8,320 5,178 (17.9) (37.8)
We expect an 18% yoy decline in overall revenues for Rallis, primarily due to continued weakness in
EBITDA 533 1,330 304 (43.0) (77.1)
export revenues, which we estimate will fall 40% yoy amid continued channel destocking in the global
EBIT 313 1,070 44 (85.9) (95.9)
agrochemical industry. We expect domestic revenues to also drop 5% yoy given a challenging Rabi
PBT 300 1,090 54 (82.0) (95.0) season. For the seeds business, 3Q is seasonally a slow quarter.
Tax 74 280 13 (81.8) (95.2)
Reported PAT 225 820 40 (82.1) (95.1)
We expect Rallis to maintain gross margins around the levels of 2QFY24 (as well as 1HFY24).
Adjusted PAT 225 813 40 (82.1) (95.0)
However, the expected yoy decline in revenues should weigh on EBITDA margins. Consequently, we
EPS (Rs/share) 1.2 4.2 0.2 (82.1) (95.0)
expect EBITDA and PAT to decline 43% and 82% yoy, respectively.
Revenue breakdown
Crop care 6,060 7,384 4,926 (18.7) (33.3)
Domestic 3,685 5,809 3,501 (5.0) (39.7)
International 2,375 1,575 1,425 (40.0) (9.5)
Seeds 240 944 252 5.0 (73.3)
EBITDA breakdown
Crop care 710 1,265 454 (36.1) (64.1)
Seeds (180) 60 (150) (16.7) (350.0)
Specialty Chemicals
India Research
52
Quarterly earnings preview for agrochemical companies

Change (%)
UPL
Net sales 136,790 101,700 95,248 (30.4) (6.3) We expect UPL to report yet another weak quarter due to continued destocking of channel
EBITDA 28,840 13,250 10,489 (63.6) (20.8) inventories across world markets and pricing pressure emanating from China. We see consolidated
EBIT 22,600 6,680 3,739 (83.5) (44.0) revenues falling 30% yoy, driven by particularly sharp declines across North America, Brazil, Europe
PBT 14,810 (980) (4,232) (128.6) 331.9 and India. LatAm ex-Brazil and RoW may perform relatively better, with flattish-to-slightly lower
Tax 1,350 (960) (695) (151.5) (27.6) revenues on a yoy basis.
Reported PAT 10,870 (1,890) (4,209) (138.7) 122.7 We expect EBITDA margins to remain under severe pressure, driven by both gross margin declines
Extraordinaries (200) (870) (400) 100.0 (54.0) (amid increased rebates) as well as operating leverage. SG&A expenses should be lower yoy due to
Adjusted PAT 10,870 (1,890) (4,209) (138.7) 122.7 lower A&P spends versus the high base of 3QFY23, when UPL was a sponsor for the FIFA World Cup
EPS (Rs/share) 14.2 (2.5) (5.5) (138.7) 122.7 (December 2022). Finance cost is likely to stay elevated amid the higher interest rate regime. The
EBITDA margin (%) 21.1 13.0 11.0 -1008 bps -202 bps company is likely to report a large net loss for the quarter.
Revenue breakdown
India 10,750 13,870 8,063 (25.0) (41.9)
North America 27,450 5,070 13,176 (52.0) 159.9
Europe 14,440 12,630 7,942 (45.0) (37.1)
Rest of the world 24,410 19,800 22,457 (8.0) 13.4
LATAM 59,740 50,330 43,610 (27.0) (13.4)
Specialty Chemicals
India Research
53
Price tracker for leading basic chemicals

Product name Latest % change
Basic Chemicals Unit Region Price 1W 1M 3M 12M Relevant for
Acetic acid, local Rs/kg India 52 -2% -20% -26% -20% LXCHEM, JUBLINGR (RM)
Acetone US$/ton China 1,053 -6% -9% 1% -26% DN (FG)
Acrylonitrile US$/ton SE Asia 1,240 0% -3% 0% -16% VO (RM)
Bromine, int'l US$/ton China 3,489 -1% -1% 5% -46% NEOGEN (RM)
Benzene US$/ton India 895 1% -2% 9% 5% ARTO (RM)
BOPP film Rs/kg India 124 -1% -1% -5% -26% SRF (FG)
Caprolactam US$/ton Taiwan, S Korea 1,710 0% -6% -11% 2% CENK, SRF (RM), GSFC (FG)
Chloroform US$/kg India 11 0% -6% -49% -77% NFIL (RM)
Ethyl acetate US$/ton China 902 -4% -5% -12% -8% GNFC, JUBILINGR, LXCHEM (FG)
Ethylene dichloride US$/kg India 0.3 0% 6% 20% -7% CHEMPLAS, FINOLEX, RIL (RM)
Fluorospar USD/tonne China 461 -5% -7% -5% -7% NFIL (RM)
Isopropyl alcohol US$/ton China 982 -3% -2% -13% 16% DN, DFCPL (FG)
Phenol US$/ton China 1,028 -5% -7% -18% -6% VO, CLEAN (RM), DN (FG)
PVC Rs/kg India 79 0% -4% -7% -17% CHEMPLAS, DCM, DCW, FINOLEX, RIL (FG)
Soda ash (China FOB) US$/ton China 347 0% 9% -7% 3% TTCH (FG)
Sodium nitrite US$/kg India 0.5 0% -25% -7% -33% DN (FG)
Toluene US$/ton China 930 0% 0% -13% 1% ARTO (RM)
Vinyl acetate monomer US$/ton China 1,021 0% 24% 4% -6% PIDI (RM)
Fe r t ilize r s
Ammonia, local US$/ton India 500 0% -12% -2% -42%
Ammonia, int'l US$/ton US 525 0% -16% -9% -49% DFPC, CRIN (RM)
Phosphoric acid, local US$/ton India 985 0% 0% 0% -14% CRIN (RM)
Rock phosphate Index Index 348 0% 0% 0% 16% CRIN (RM)
DAP US$/ton Morocco 578 1% -2% 3% -25%
DAP US$/ton Global 575 1% 6% 9% -7%
Urea, local US$/ton India 402 0% 0% 0% -30% CHMB (FG)
Urea, int'l US$/ton US 300 -1% 1% -24% -35%
Muriate of Potash CNY/ton China 2,960 0% 0% 6% -21%
A gr oc he m ic a ls
Glyphosate US$/ton China 3,697 0% -5% -12% -48% BYRCS (FG)
Che m ic a l s pr e a ds
Phenol USD/tonne China 451 -3% -16% -38% 20% DN (FG)
PVC - VCM Rs/kg India 264 -7% -18% -37% -37% CHEMPLAS (FG)
Ene r gy pr ic e s
Brent crude US$/bbl 79 1% 2% -6% -5%
Coal US$/ton Indonesia 117 -16% -39% -39% -58%
Natural Gas US$/mn BTU US 3 16% 7% -9% -48%
Natural Gas GBP/ mn BTU UK 11 -4% -7% 2% -73%
Notes: RM = Raw material, FG = Finished Good
Source: Bloomberg, Kotak Institutional Equities
Specialty Chemicals
India Research
54
Chemicals valuation summary, March fiscal year-ends

MCap Upside P/E (X) EV/EBITDA (X) RoE (%) CAGR 2023-25E (%) Share price performance (%)
(US$ mn) Rating FV (Rs) (%) 2023 2024E 2025E 2023 2024E 2025E 2023 2024E 2025E Revenue EBITDA EPS 1W 1M 3M 1Y
Basics
Chemplast Sanmar 953 NR NA NA 36.6 385.3 16.7 14.9 49.2 9.5 13.1 (0.6) 20.9 4.3 25.1 47.9 2.6 4.5 1.1 NA
DCM Shriram 1,996 NR NA NA 3.4 12.1 (2.3) 20.1
Deepak Fertilisers 1,017 NR NA NA 7.2 13.9 10.7 5.3 8.8 6.8 26.2 10.1 12.5 (4.9) (11.4) (17.9) (2.6) 3.9 4.1 (4.0)
GNFC 1,385 NR NA NA (6.7) 3.1 20.2 26.1
GACL 685 NR NA NA (4.4) 4.1 6.8 3.3
GHCL 686 NR NA NA 5.1 6.6 6.0 3.4 4.5 4.1 27.7 21.9 19.8 (9.2) (8.9) (7.3) (1.6) 4.1 (3.9) 16.3
Tata Chemicals 3,386 SELL 790 (28.1) 12.1 21.0 28.3 7.1 8.3 9.5 12.3 6.6 4.7 (3.2) (14.9) (34.7) (1.7) 10.3 8.5 15.9
Non-Basics/Specialties/Diversified
Aarti 2,745 SELL 540 (9.8) 41.9 59.2 39.4 23.5 26.1 20.6 11.6 7.6 10.5 9.8 8.7 3.0 (8.1) 5.2 22.5 (0.1)
Aether Industries 1,428 NR NA NA 84.3 70.0 47.0 61.8 58.1 33.6 17.2 10.0 11.1 30.7 35.7 33.9 1.5 13.5 (6.9) 6.4
Alkyl Amines 1,565 NR NA NA 57.9 69.9 46.3 40.2 46.1 30.8 25.0 15.5 19.5 12.8 14.3 11.8 (5.8) 10.3 10.2 (6.4)
Archean chemicals 945 NR NA NA 18.4 19.0 22.0 14.7 8.6 7.1 (1.7) 2.3 8.3
Atul 2,496 SELL 4,070 (40.6) 40.0 52.3 42.1 24.6 29.3 24.0 11.4 8.2 9.5 1.2 0.7 (2.5) (4.4) 1.6 (2.4) (12.4)
Balaji Amines 1,003 NR NA NA 20.9 12.6 23.4 17.0 23.3 (5.6) (14.1) (4.6) 12.0 16.0 0.9
BASF India 1,589 NR NA NA 28.0 24.9 22.5 18.4 17.6 6.0 21.3 (0.7) 1.2 21.7 11.2
Clean Science 2,009 ADD 1,480 (3.2) 56.6 86.5 49.5 41.5 61.9 36.0 33.2 17.7 25.8 12.4 7.3 6.8 (3.9) 7.9 8.4 NA
Deepak Nitrite 3,988 REDUCE 2,120 (12.8) 39.1 40.9 35.5 25.9 27.6 24.9 22.9 18.4 18.0 (3.0) 5.1 5.0 (1.7) 9.7 15.3 25.5
Gujarat Fluorochem 4,646 NR NA NA 28.8 58.0 36.7 19.9 35.4 23.5 28.9 11.4 15.9 0.9 (8.0) (11.3) (7.8) 23.7 23.6 20.0
Himadri specialty chemical 2,056 NR NA NA 97.0 64.6 8.0 17.0 30.5 56.9 304.4
Jubilant Ingrevia 922 NR NA NA 20.9 30.6 22.1 12.2 16.4 12.5 14.5 8.9 11.0 4.0 (1.2) (2.8) (5.6) 5.5 (0.6) (9.4)
Laxmi Organics 942 NR NA NA 33.3 54.7 39.3 26.8 27.2 20.3 12.4 9.9 12.3 5.4 14.8 (8.0) (2.6) 2.0 1.5 (2.7)
Meghmani organics 1,428 NR NA NA
NFIL 2,280 ADD 3,620 0.3 50.5 55.1 38.7 35.9 33.9 23.7 18.6 14.7 18.0 20.9 24.6 14.2 (6.4) (5.1) (2.8) (6.5)
Neogen 466 NR NA NA 62.1 63.1 41.0 37.8 33.7 23.7 12.3 9.8 12.6 27.3 26.4 23.0 (0.2) (1.2) (16.7) 17.7
Nocil 538 NR NA NA 30.3 32.4 24.5 17.5 19.3 15.3 9.9 8.5 10.4 6.2 7.0 11.2 (2.1) 3.9 18.8 16.1
Sudarshan 447 NR NA NA 108.1 35.3 22.9 22.8 13.9 11.3 3.6 10.5 13.9 13.1 42.2 117.3 (3.4) 10.1 11.8 42.1
Supreme Petro 1,252 NR NA NA
Tanfac Industries ltd 286 NR NA NA
Vinati 2,153 SELL 1,530 (11.4) 39.1 48.0 35.6 29.7 35.0 25.1 22.6 15.4 17.6 10.1 7.8 11.5 (1.6) (0.4) (7.1) (14.3)
Vishnu chemicals 266 NR NA NA
SRF 8,847 BUY 2,660 11.0 34.0 49.2 34.0 21.8 26.3 19.5 22.9 13.7 17.4 6.8 6.1 0.1 (2.9) (1.1) 6.7 7.0
HPC
Fine Organics 1,773 NR NA NA 25.6 36.6 36.4 18.0 26.3 26.1 47.1 23.7 19.9 (13.3) (16.9) (16.2) (3.1) 7.9 (2.3) (13.8)
Galaxy surfactants 1,177 NR NA NA 26.0 29.8 25.7 17.1 18.8 16.5 21.7 16.6 17.0 (0.7) 1.8 0.7 (0.5) 0.2 3.2 13.3
Agrochemicals
Anupam Rasayan 1,360 NR NA NA 58.2 54.7 37.6 30.3 26.3 20.1 9.2 8.1 10.5 23.0 22.8 24.4 (2.1) 1.4 17.9 52.4
Astec LifeScience 253 NR NA NA 35.5 (86.0) 91.8 21.0 176.1 36.3 11.8 2.5 9.8 0.1 (23.9) (37.8) (0.3) (9.5) (21.4) (36.8)
Bayer CropSc 3,024 REDUCE 5,080 (9.5) 37.0 29.7 26.7 26.3 20.5 18.4 25.9 30.4 32.4 9.4 10.9 17.8 2.1 3.5 6.2 18.6
Bharat Rasayan 460 NR NA NA 1.8 (1.7) (1.2) (3.4)
Best Agro 233 NR NA NA (2.5) (7.6) (26.0) (43.6)
Chambal Fertlizers 1,895 NR NA NA 13.5 11.8 11.2 6.2 6.2 5.6 17.7 16.7 16.7 (15.4) 5.2 9.8 (0.4) 10.7 37.9 20.8
Coromandel Intl 4,251 NR NA NA 16.8 18.3 16.0 10.7 11.8 10.6 28.9 21.9 20.4 (9.0) 0.4 2.5 (3.8) (2.0) 2.5 33.1
Godrej Agrovet 1,306 ADD 530 (4.2) 47.0 33.6 25.0 23.2 19.3 14.8 8.5 11.4 14.1 9.0 26.2 37.1 (0.7) 6.4 7.4 18.6
PI Industries 6,317 ADD 3,630 6.6 42.6 33.5 31.4 32.6 26.0 22.6 18.5 19.9 17.9 16.1 18.9 16.5 (2.1) (11.4) (0.5) 3.6
Rallis 614 REDUCE 210 (19.2) 55.2 29.0 24.0 23.7 15.3 13.3 5.4 9.9 11.1 3.4 31.4 51.5 2.8 2.6 20.9 9.1
Sharda Cropchem 476 NR NA NA 11.5 25.4 13.3 5.2 8.0 5.2 16.8 7.1 12.2 2.6 (0.4) (6.8) (2.9) 2.9 2.7 (11.1)
Sumitomo Chemicals 2,521 NR NA NA 40.8 53.8 39.2 28.5 39.5 28.9 23.1 15.7 18.7 0.7 (0.7) 2.1 2.4 0.6 (4.2) (14.8)
UPL 5,250 REDUCE 550 (1.9) 12.7 21.2 14.5 6.2 6.9 5.9 14.2 7.4 10.1 1.0 (0.1) (6.5) (5.4) (4.2) (8.4) (21.9)
Source: Bloomberg, Kotak Institutional Equities estimates
Specialty Chemicals
India Research
55
December 2023: Results calendar

Mon Tue Wed Thu Fri Sat
8-Jan 9-Jan 10-Jan 11-Jan 12-Jan 13-Jan
HDFC AMC HCL Technologies Avenue Supermarts
Infosys HDFC Life Insurance
TCS Just Dial
Wipro
Angel One Bank of Maharashtra Asian Paints 360 One Atul ICICI Bank
Jio Financial Services Federal Bank Happiest Minds Polycab CreditAccess Gramin J K Cement
HDFC Bank ICICI Prudential Life Poonawalla Fincorp Hindustan Unilever Persistent Systems
ICICI Lombard LTIMindtree Tata Communications One 97 Communications
ICICI Securities Supreme Industries
L&T Technology Services UltraTech Cement
Coforge Axis Bank Bajaj Auto Cholamandalam Capri Global
Zensar Technologies ICRA Blue Dart Expres Cipla YES Bank
Indus Towers Container Corp. Cyient
Pidilite Industries Exide Industries JSW Steel
Tech Mahindra Kfin Technologies
TVS Motor Shriram Finance
Syngene International
29-Jan 30-Jan 31-Jan 1-Feb 2-Feb 3-Feb
Bajaj Finance Apar Industries Amara Raja Batteries Castrol India Bikaji Foods
Bharat Electronics Bajaj Finserv Dabur India Mphasis
Nippon AMC Bajaj Holdings & Investment IDFC Sumitomo Chemical
Petronet LNG Blue Star Jubilant Foodworks Titan Company
UTI AMC Dr Reddy's Laboratories Motherson Sumi Wiring V-Guard Industries
KPIT Technologies Shree Cement
Mahindra & Mahindra Financial
Star Health and Allied Insurance
5-Feb 6-Feb 7-Feb 8-Feb 9-Feb 10-Feb
Kansai Nerolac Computer Age Management Services Nestle India
Endurance Technologies
Max Financial Services
Navin Fluorine
GlaxoSmithkline Pharma Bosch
Lakshmi Machine Works Hindalco Industries
ABB
Source: BSE, NSE, Kotak Institutional Equities
India Research
56
Kotak Institutional Equities: Valuation summary of KIE Universe stocks

Price (Rs) Fair Value Upside Mkt cap. O/S shares EPS (Rs) P/E (X) P/B (X) EV/EBITDA (X) RoE (%) Dividend yield (%) ADV-3M (US$ mn)
Company Rating 8-Jan-24 (Rs) (%) (Rs bn) (US$ bn) (mn) 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E Traded Delivered
Automobiles & Components
Apollo Tyres SELL 455 345 (24) 289 3.5 638 27 27 28 17 17 16 2.0 1.9 1.7 7 7 7 13 11 11 1.1 1.3 1.5 17 7
Ashok Leyland REDUCE 178 170 (5) 523 6.3 2,936 9 9 9 19 19 19 5.0 4.3 3.8 11 12 12 29 25 21 2.1 2.1 2.1 27 14
Bajaj Auto SELL 6,984 4,900 (30) 2,021 24 283 258 270 295 27 26 24 7.4 7.0 6.6 21 20 18 28 28 29 3.0 3.1 3.4 36 20
Balkrishna Industries SELL 2,545 1,900 (25) 492 5.9 193 68 78 89 38 33 29 5.8 5.1 4.5 22 18 16 16 17 17 0.7 0.8 0.8 9 4
Bharat Forge SELL 1,256 760 (39) 585 7.0 466 24 34 40 51 37 32 7.7 6.6 5.7 24 20 18 16 19 19 0.5 0.5 0.6 14 7
CEAT SELL 2,411 1,400 (42) 98 1.2 40 149 118 117 16 20 21 2.5 2.3 2.1 7 8 8 16 12 11 1.5 1.2 1.2 9 4
CIE Automotive SELL 475 470 (1) 180 2.2 378 22 26 29 22 18 16 3.0 2.7 2.4 12 11 10 15 15 16 1.1 1.4 1.5 4 2
Eicher Motors SELL 3,884 2,900 (25) 1,063 12.8 272 145 147 160 27 26 24 6.9 6.1 5.4 23 21 19 28 25 24 1.2 1.3 1.5 27 13
Endurance Technologies SELL 2,092 1,280 (39) 294 3.5 141 46 57 65 46 37 32 6.0 5.3 4.7 23 19 16 13 14 15 0.5 0.6 0.7 4 2
Escorts Kubota SELL 2,854 2,100 (26) 315 3.8 111 98 107 111 29 27 26 3.4 3.0 2.8 25 22 21 12 11 11 0.5 0.6 0.6 14 5
Exide Industries REDUCE 324 250 (23) 275 3.3 850 12 15 16 26 22 20 2.3 2.1 1.9 15 12 11 9 10 10 0.8 0.8 0.8 10 4
Hero Motocorp REDUCE 4,010 3,475 (13) 801 9.6 200 205 227 240 20 18 17 4.5 4.2 3.9 13 11 10 24 25 24 3.6 4.0 4.2 32 15
Mahindra & Mahindra BUY 1,616 1,680 4 2,010 24.2 1,159 89 90 103 18 18 16 3.6 3.1 2.6 15 13 10 22 18 18 0.8 0.8 1.0 47 27
Maruti Suzuki SELL 9,947 8,450 (15) 3,127 37.6 314 377 385 420 26 26 24 4.6 4.2 3.8 17 17 15 19 17 17 1.5 1.5 1.7 66 39
MRF SELL 131,921 77,500 (41) 559 6.7 4 4,961 4,567 4,935 27 29 27 3.4 3.0 2.7 13 13 12 13 11 11 0.3 0.3 0.3 10 3
Samvardhana Motherson ADD 106 100 (5) 716 8.6 6,776 4 5 6 29 20 18 3.0 2.6 2.3 10 8 7 10 14 14 0.7 0.7 0.8 16 8
Schaeffler India SELL 3,166 2,720 (14) 495 6.0 156 61 69 78 52 46 41 10.3 9.1 8.1 35 30 27 21 21 21 0.1 0.1 0.0 3 2
SKF SELL 4,625 3,925 (15) 229 2.8 49 107 138 158 43 34 29 8.5 7.3 6.3 31 24 21 20 22 21 0.7 0.9 1.0 2 1
Sona BLW Precision REDUCE 638 520 (19) 374 4.5 583 9 12 14 71 54 45 13.8 11.6 9.7 41 32 27 21 23 23 0.3 0.4 0.5 12 7
Tata Motors REDUCE 789 630 (20) 3,022 36.4 3,829 52 64 67 15 12 12 4.8 3.4 2.6 6 5 4 37 32 25 0.3 0.3 0.3 97 40
Timken SELL 3,190 2,450 (23) 240 2.9 75 55 69 88 58 46 36 9.9 8.2 6.8 39 31 24 19 19 20 0.1 0.1 0.0 4 2
TVS Motor SELL 2,038 1,150 (44) 968 11.7 475 42 47 53 48 44 39 13.0 10.7 9.0 28 25 23 30 27 25 0.5 0.6 0.6 21 10
Uno Minda ADD 707 600 (15) 405 4.9 571 15 17 19 48 42 38 8.2 7.0 6.0 27 24 21 17 17 16 0.3 0.4 0.4 4 2
Varroc Engineering SELL 556 420 (25) 85 1.0 153 16 25 30 36 22 19 6.8 5.2 4.1 12 10 9 19 24 22 — — — 5 2
Automobiles & Components Cautious 19,309 232.4 24.3 22.1 20.3 4.9 4.2 3.7 12.5 11.3 10.2 20 19.2 18.1 1.1 1.2 1.3 494 242
Banks
AU Small Finance Bank SELL 802 615 (23) 536 6.5 667 24 33 44 33 25 18 4.3 3.6 3.0 — — — 14 16 18 — — — 17 8
Axis Bank BUY 1,122 1,100 (2) 3,460 41.6 3,077 79 84 94 14 13 12 2.4 2.1 1.8 — — — 18 17 16 1.1 1.1 1.3 106 58
Bandhan Bank BUY 233 270 16 376 4.5 1,611 23 26 30 10 9 8 1.7 1.5 1.3 — — — 17 17 17 1.5 1.7 1.9 29 13
Bank of Baroda ADD 223 250 12 1,156 13.9 5,178 30 29 32 7 8 7 1.2 1.0 0.9 — — — 15 13 13 2.7 2.6 2.9 48 20
Canara Bank ADD 451 500 11 817 9.8 1,814 79 91 100 6 5 5 1.2 1.0 0.8 — — — 18 18 17 3.6 4.2 4.5 36 13
City Union Bank ADD 149 140 (6) 111 1.3 740 12 14 17 12 11 9 1.5 1.3 1.2 — — — 12 12 13 1.7 1.9 2.2 10 5
DCB Bank BUY 160 150 (6) 50 0.6 312 19 21 26 9 8 6 1.1 1.0 0.9 — — — 12 12 14 1.2 1.6 2.4 6 3
Equitas Small Finance Bank ADD 112 110 (2) 127 1.5 1,122 7 10 12 15 12 9 2.2 1.9 1.7 — — — 15 17 19 — — — 7 4
Federal Bank BUY 150 170 13 365 4.4 2,419 13 16 18 11 10 8 1.3 1.2 1.1 — — — 13 13 13 1.8 2.1 2.4 22 11
HDFC Bank BUY 1,663 1,800 8 12,630 152.0 7,580 87 99 113 19 17 15 3.0 2.6 2.3 — — — 19 16 16 1.2 1.3 1.5 309 189
ICICI Bank BUY 982 1,150 17 6,889 82.9 6,984 53 56 61 18 18 16 3.1 2.7 2.4 — — — 17 16 15 1.1 1.1 1.2 161 89
IndusInd Bank BUY 1,627 1,600 (2) 1,265 15.2 776 110 123 141 15 13 12 2.1 1.9 1.6 — — — 15 14 15 1.0 1.1 1.3 67 32
Karur Vysya Bank BUY 164 170 4 131 1.6 802 17 20 23 10 8 7 1.4 1.2 1.1 — — — 15 16 16 2.7 3.1 3.6 7 4
Punjab National Bank REDUCE 95 95 - 1,046 12.6 11,011 8 13 14 12 7 7 1.1 1.0 0.9 — — — 8 13 13 2.3 3.8 4.3 56 16
SBI Cards and Payment Services BUY 768 925 20 730 8.8 946 25 31 46 31 25 17 6.1 5.0 3.9 — — — 22 22 26 0.4 0.5 0.6 17 10
State Bank of India BUY 627 760 21 5,596 67.3 8,925 61 63 71 10 10 9 1.7 1.4 1.3 — — — 16 14 14 1.9 1.9 1.9 109 50
Ujjivan Small Finance Bank ADD 58 58 0 113 1.4 1,928 6 6 7 10 9 9 2.0 1.7 1.4 — — — 24 20 18 0.0 0.0 0.0 12 5
Union Bank ADD 123 135 10 908 10.9 7,412 18 22 23 7 6 5 1.1 1.0 0.8 — — — 16 16 15 3.6 4.3 4.5 29 13
YES Bank REDUCE 24 17 (30) 696 8.4 31,315 0 1 1 86 28 18 1.8 1.7 1.5 — — — 2 6 9 0.0 0.0 0.0 71 21
Banks Attractive 37,001 445.3 14.3 12.8 11.3 2.1 1.8 1.6 14.5 14.3 14.3 1.4 1.5 1.7 1,120 561
Source: Company, Bloomberg, Kotak Institutional Equities estimates
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57

Building Products
Astral SELL 1,808 1,600 (12) 486 5.8 269 23 29 35 78 62 52 14.9 12.4 10.3 46 38 32 21 22 22 0.2 0.2 0.3 12 6
Building Products Cautious 486 5.8 77.6 62.3 51.6 14.9 12.4 10.3 46.2 38.4 32.5 19.2 19.9 19.9 0.2 0.2 0.3 12 6
Capital goods
ABB REDUCE 4,753 4,200 (12) 1,007 12.1 212 58 66 80 82 72 60 16.6 13.7 11.4 65 57 46 22 21 21 0.1 0.1 0.1 13 6
Bharat Electronics SELL 184 118 (36) 1,342 16.2 7,310 5 5 6 39 37 33 8.7 7.9 7.1 28 26 22 24 23 23 1.2 1.3 1.4 34 18
BHEL SELL 195 65 (67) 680 8.2 3,482 (1) (0) 2 NM NM 95 2.5 2.5 2.5 NM 100 37 NM NM 3 0.0 0.0 (0.1) 65 20
Carborundum Universal REDUCE 1,132 1,120 (1) 215 2.6 190 24 32 41 47 36 28 6.8 5.9 5.0 29 22 17 15 18 20 0.4 0.6 0.7 3 2
Cochin Shipyard REDUCE 1,294 1,060 (18) 170 2.0 132 46 48 64 28 27 20 3.5 3.3 2.9 20 16 12 13 13 15 1.1 1.2 1.3 37 9
Cummins India ADD 2,004 2,040 2 556 6.7 277 51 59 68 40 34 30 9.4 8.5 7.7 37 32 27 25 26 27 1.4 1.6 1.9 11 6
Dixon Technologies SELL 6,325 4,200 (34) 378 4.6 59 76 99 129 83 64 49 21.6 16.1 12.1 48 37 29 30 29 28 0.0 0.0 0.0 37 11
G R Infraprojects SELL 1,099 1,010 (8) 106 1.3 97 77 81 99 14 14 11 1.8 1.6 1.4 10 9 8 13 12 13 0.0 0.0 0.0 1 1
IRB Infrastructure ADD 42 46 9 255 3.1 6,039 1 2 2 32 20 17 1.9 1.9 1.9 11 10 9 6 10 11 3.9 4.7 5.4 18 7
Kalpataru Projects BUY 738 745 1 120 1.4 160 37 55 68 20 13 11 2.2 1.9 1.7 8 7 6 12 16 17 0.4 0.6 0.7 4 2
KEC International REDUCE 612 610 (0) 157 1.9 257 19 34 47 33 18 13 3.8 3.2 2.6 13 9 7 12 19 22 0.3 0.6 0.8 3 2
L&T REDUCE 3,501 2,700 (23) 4,812 57.9 1,373 93 111 131 38 31 27 6.9 6.1 5.4 25 21 18 18 21 21 0.8 0.9 1.1 70 42
Siemens SELL 4,016 3,500 (13) 1,430 17.2 356 62 75 84 64 54 48 9.7 8.6 7.6 48 40 36 16 17 17 0.4 0.5 0.5 16 8
Thermax ADD 3,200 3,150 (2) 381 4.6 113 53 63 77 61 51 41 49.1 38.6 29.5 49 39 29 15 16 17 0.4 0.4 0.5 4 2
Capital goods Cautious 11,610 139.7 45.6 37.6 31.1 6.4 5.8 5.2 28.2 23.6 20.1 14.0 15.4 16.7 0.7 0.8 1.0 316 136
Commercial & Professional Services
SIS BUY 457 500 9 67 0.8 147 23 28 35 20 16 13 2.5 2.2 1.9 12 10 9 13 14 15 0.0 0.0 0.0 1 0
TeamLease Services REDUCE 3,224 2,430 (25) 54 0.7 17 70 96 125 46 33 26 6.5 5.5 4.5 39 29 23 14.4 17.8 19.2 — — — 2 1
Commercial & Professional Services Neutral 121 1.5 26.8 21.0 16.7 3.5 3.0 2.5 17.1 13.9 11.5 12.9 14.1 15.1 0.0 0.0 0.0 3 1
Commodity Chemicals
Asian Paints REDUCE 3,298 3,050 (8) 3,164 38.1 959 59 60 62 56 55 53 16.9 14.8 13.2 39 37 36 32 29 26 0.9 1.0 1.1 34 19
Berger Paints SELL 579 500 (14) 675 8.1 1166 11 11 12 53 52 48 12.9 11.3 9.9 33 33 31 26 23 22 0.8 0.8 0.8 8 3
Indigo Paints REDUCE 1,485 1,375 (7) 71 0.9 48 33 37 40 45 40 37 7.9 6.8 6.1 28 24 23 19 18 17 0.5 0.6 0.9 2 1
Kansai Nerolac REDUCE 337 295 (12) 272 3.3 808 9 9 10 37 37 35 5.4 5.0 4.7 23 24 22 15 14 14 1.0 1.4 1.4 1 1
Tata Chemicals SELL 1,099 790 (28) 280 3.4 255 53 39 42 21 28 26 1.4 1.3 1.3 8 9 9 7 5 5 1.7 1.3 1.4 13 5
Commodity Chemicals Cautious 4,462 53.7 48.9 49.6 47.6 8.8 8.1 7.5 30.0 30.1 28.6 18.0 16.3 15.7 0.9 1.0 1.1 58 30
Construction Materials
ACC REDUCE 2,355 1,970 (16) 442 5.3 188 92 111 130 25 21 18 2.8 2.6 2.3 14 12 10 12 13 13 0.8 0.9 1.1 14 6
Ambuja Cements SELL 530 350 (34) 1,053 12.7 2,463 14 19 20 37 29 26 2.6 2.4 2.3 12 10 9 9 9 9 0.4 0.6 0.6 22 10
Dalmia Bharat ADD 2,330 2,350 1 437 5.3 185 55 102 126 43 23 18 2.6 2.4 2.1 15 10 9 6 11 12 0.4 0.7 0.8 11 5
Grasim Industries NR 2,068 - (100) 1,361 16.4 658 124 133 145 17 16 14 1.6 1.4 1.3 8 7 6 10 10 10 0.5 0.7 0.8 16 8
J K Cement SELL 4,007 2,600 (35) 310 3.7 77 103 127 152 39 32 26 5.8 5.0 4.2 16 14 12 16 17 17 0.4 0.4 0.4 5 2
Nuvoco Vistas Corp ADD 360 365 1 129 1.5 357 5 11 15 70 33 24 1.4 1.4 1.3 10 9 8 2 4 5 0.0 0.0 0.0 2 1
Orient Cement REDUCE 280 200 (29) 57 0.7 205 11 14 16 25 20 18 3.2 2.8 2.5 11 10 8 14 15 15 0.7 0.7 0.7 5 3
Shree Cement SELL 27,330 17,900 (35) 986 11.9 36 643 753 867 43 36 32 4.9 4.4 3.9 21 18 16 12 13 13 0.4 0.5 0.6 7 3
The Ramco Cements SELL 997 690 (31) 236 2.8 236 27 36 48 37 28 21 3.2 2.9 2.6 15 13 11 9 11 13 0.3 0.4 0.5 6 3
UltraTech Cement SELL 9,935 7,200 (28) 2,868 34.5 289 277 357 405 36 28 25 4.7 4.2 3.7 21 17 15 14 16 16 0.4 0.5 0.3 39 23
Construction Materials Cautious 7,879 94.8 29.6 24.0 21.2 2.9 2.6 2.4 13.5 11.5 9.9 9.8 10.9 11.2 0.5 0.6 0.5 127 64
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58

Consumer Durables & Apparel
Aditya Birla Fashion and Retail REDUCE 231 200 (13) 219 2.6 998 (8) (6) (4) NM NM NM 5.8 5.0 5.4 17 12 10 NM NM NM — — — 10 4
Campus Activewear ADD 289 290 0 88 1.1 304 4 5 6 79 64 49 13.2 11.0 9.3 35 30 25 18 19 20 — — 0.5 4 2
Eureka Forbes BUY 500 670 34 97 1.2 208 4 6 10 116 78 51 2.5 2.4 2.3 55 41 28 2 3 5 — — — 1 0
Havells India SELL 1,376 1,140 (17) 862 10.4 628 20 25 30 68 55 46 11.9 10.7 9.5 45 37 31 18 20 22 0.6 0.7 0.9 12 6
Page Industries SELL 37,693 34,500 (8) 420 5.1 11 539 663 778 70 57 48 25.3 20.9 17.5 43 36 30 40 40 39 0.8 1.0 1.2 11 5
Polycab SELL 5,344 4,120 (23) 803 9.7 150 116 128 149 46 42 36 10.2 8.7 7.4 32 29 24 24 22 22 0.5 0.6 0.7 38 16
TCNS Clothing Co. REDUCE 388 420 8 25 0.3 69 (3) 1 4 NM 458 110 4.2 4.0 3.6 19 14 12.1 NM 1 3 — — — 1 0
Vedant Fashions REDUCE 1,210 1,200 (1) 294 3.5 248 18 22 27 67 55 45 17.9 14.6 11.8 41 34 28 29 29 29 — — — 3 2
Voltas SELL 990 770 (22) 328 3.9 331 11 22 27 93 46 37 5.8 5.3 4.8 66 34 30 6 12 14 0.4 0.7 0.8 17 9
Whirlpool SELL 1,360 1,020 (25) 173 2.1 127 20 28 39 67 49 35 4.6 4.3 3.9 36 27 19 7 9 11 0.3 0.3 0.4 3 1
Consumer Durables & Apparel Cautious 3,508 42.2 75.6 56.3 44.7 8.7 7.7 6.9 35.5 28.0 23.4 11.5 13.6 15.42 0.5 0.6 0.7 106 51
Consumer Staples
Britannia Industries ADD 5,177 4,800 (7) 1,247 15.0 241 88 98 110 59 53 47 31.8 28.7 25.8 41 37 33 57 57 58 1.5 1.7 1.9 19 11
Colgate-Palmolive (India) REDUCE 2,501 2,325 (7) 680 8.2 272 47 51 56 53 49 44 37.4 35.5 33.6 36 33 31 72 75 78 1.8 2.0 2.1 11 6
Dabur India ADD 553 590 7 980 11.8 1,772 11 13 14 50 44 39 9.8 8.8 7.9 39 34 30 21 21 21 1.0 1.1 1.3 14 9
Godrej Consumer Products ADD 1,175 1,150 (2) 1,202 14.5 1,023 19 23 26 62 51 44 7.9 7.3 6.7 42 35 31 13 15 16 0.6 0.9 1.1 13 8
Hindustan Unilever ADD 2,578 2,775 8 6,058 72.9 2,350 45 50 57 58 51 46 11.8 11.3 10.9 41 36 32 21 23 24 1.6 1.7 1.9 49 33
ITC ADD 466 470 1 5,807 69.9 12,428 16 18 20 29 26 24 8.2 7.9 7.5 22 20 18 27 30 32 3.0 3.3 3.6 57 35
Jyothy Labs REDUCE 508 370 (27) 187 2.2 367 10 11 13 49 45 40 10.6 9.4 8.4 38 34 30 23 22 22 0.9 1.1 1.2 6 2
Marico REDUCE 524 550 5 678 8.2 1,290 12 13 14 45 42 37 15.0 12.8 11.0 32 29 26 36 33 32 1.1 1.3 1.4 9 6
Nestle India ADD 2,619 2,450 (6) 2,525 30.4 964 31 37 42 84 71 63 88.3 83.4 81.0 56 48 42 113 120 130 1.0 1.3 1.6 27 14
Sula Vineyards ADD 662 600 (9) 56 0.7 84 11 13 15 60 52 44 9.3 8.2 7.2 32 29 25 16 17 17 0.4 0.5 0.7 3 2
Tata Consumer Products ADD 1,105 915 (17) 1,027 12.4 929 15 18 20 76 62 54 6.1 5.9 5.6 45 39 34 8 10 11 0.8 0.9 1.0 18 10
United Breweries ADD 1,863 1,675 (10) 493 5.9 264 19 31 38 98 60 49 11.5 10.5 9.6 58 38 32 12 18 21 0.8 1.2 1.5 6 3
United Spirits ADD 1,098 1,075 (2) 798 9.6 727 16 19 22 70 57 51 11.3 10.3 9.4 46 38 34 17 19 19 0.2 0.9 1.1 13 7
Varun Beverages ADD 1,270 1,250 (2) 1,649 19.9 1,299 16 20 24 81 65 52 24.0 18.1 13.9 47 37 30 34 32 30 0.1 0.2 0.2 29 17
Consumer Staples Attractive 23,387 281.5 48.9 42.9 38.3 11.8 11.1 10.4 34.9 30.5 27.0 24 26 27 1.6 1.8 2.0 274 163
Diversified Financials
360 One BUY 672 750 12 241 2.9 355 21 24 30 32 28 23 7.0 6.6 6.1 — — — 23 24 28 2.3 2.7 3.3 6 3
Aavas Financiers BUY 1,552 2,025 30 123 1.5 79 64 78 95 24 20 16 3.3 2.8 2.4 — — — 14 15 16 0.0 0.0 0.0 5 3
ABSL AMC REDUCE 472 480 2 136 1.6 288 24 25 27 20 19 18 4.9 4.4 4.0 — — — NM NM NM 3.0 3.2 3.4 1 0
Aptus Value Housing Finance ADD 328 330 1 163 2.0 498 12 14 17 28 24 20 4.4 3.7 3.1 — — — 17 17 17 1.2 0.0 0.0 3 2
Bajaj Finance REDUCE 7,736 7,400 (4) 4,781 57.5 617 234 294 363 33 26 21 6.3 5.2 4.3 — — — 22 22 22 0.4 0.5 0.6 101 48
Bajaj Finserv ADD 1,696 1,725 2 2,707 32.6 1,593 67 84 98 25 20 17 5.0 4.2 3.9 — — — 21 22 23 0.1 0.1 0.1 28 13
Cholamandalam ADD 1,231 1,250 1,034 12.4 839 40 50 61 31 25 20 5.6 4.7 3.7 — — — 20 20 20 0.2 0.3 0.3 26 15
Computer Age Management Services ADD 2,764 2,800 1 136 1.6 49 67 79 93 41 35 30 14.9 12.9 11.1 — — — 39 40 40 1.6 1.9 2.2 16 9
CRISIL SELL 4,072 3,300 (19) 298 3.6 73 87 93 105 47 44 39 — — — 33 32 32 1.4 1.5 1.7 2 1
Five Star Business Finance ADD 722 840 16 211 2.5 291 26 32 39 27 23 19 4.1 3.5 2.9 — — — 16 17 17 — — — 7 4
HDFC AMC ADD 3,350 3,500 4 715 8.6 214 82 98 109 41 34 31 10.8 10.0 9.2 — — — 27 30 31 1.8 2.2 2.4 19 9
Home First Finance BUY 936 1,175 26 83 1.0 88 33 40 49 29 23 19 4.0 3.4 3.0 — — — 15 16 17 — — 0.5 5 3
ICRA REDUCE 5,590 5,100 (9) 54 0.6 10 162 180 201 35 31 28 — — — 15 16 17 — — 0 0 0
Kfin Technologies ADD 511 520 2 87 1.0 169 13 15 18 38 33 28 8.1 6.7 5.9 — — — 17 17 18 — 0.9 1 8 4
L&T Finance Holdings SELL 168 100 (41) 419 5.0 2,480 8 10 12 21 17 14 1.8 1.7 1.6 — — — 9 10 12 1.5 1.8 2.1 18 8
LIC Housing Finance BUY 562 650 16 309 3.7 550 88 82 85 6 7 7 1.2 1.1 0.9 — — — 17 14 13 2.5 2.4 2.5 14 6
Mahindra & Mahindra Financial ADD 276 310 12 341 4.1 1,234 14 20 26 19 14 11 2.0 1.8 1.6 — — — 10 13 15 1.0 1.5 1.9 13 6
Muthoot Finance ADD 1,489 1,500 1 598 7.2 401 100 122 144 15 12 10 2.5 2.1 1.8 — — — 18 19 19 1.3 1.6 1.9 9 3
Nippon AMC ADD 470 500 6 294 3.5 623 15 17 19 32 28 25 8.1 7.9 8.1 — — — 26 29 32 2.8 3.2 3.6 7 3
SBFC REDUCE 89 75 (16) 95 1.1 1,091 2 3 3 43 32 26 3.9 3.5 3.1 — — — 10 10 12 0.0 0.0 0.0 3 2
Shriram Finance BUY 2,196 2,300 5 825 9.9 376 187 224 263 12 10 8 1.7 1.5 1.3 — — — 15 16 17 1.3 1.5 1.8 29 17
UTI AMC REDUCE 873 900 3 111 1.3 127 46 42 46 19 21 19 2.8 2.7 2.6 — — — 15 13 14 4.2 3.9 4.2 2 1
Diversified Financials Attractive 13,760 165.6 24.4 20.2 17.0 4.1 3.5 3.1 16.7 17.4 18.0 0.7 0.8 1.0 322 161
India Research
59

Electric Utilities
CESC BUY 136 105 (22) 180 2.2 1,326 11 14 14 13 10 9 1.3 1.3 1.2 7 6 6 11 13 13 3.8 3.9 4.2 15 7
JSW Energy SELL 419 225 (46) 690 8.3 1,640 10 15 18 43 28 23 3.5 3.1 2.8 17 12 11 8 12 13 0.5 0.5 0.5 23 9
NHPC ADD 71 55 (22) 709 8.5 10,045 4 5 6 16 15 12 1.8 1.7 1.6 17 10 7 12 12 14 3.3 3.6 4.3 20 9
NTPC ADD 316 260 (18) 3,069 36.9 9,895 19 22 24 16.3 14.3 13 1.9 1.8 1.6 11 9 8 12 13 13 2.3 2.5 2.7 48 26
Power Grid ADD 242 220 (9) 2,254 27.1 9,301 18 19 20 13.2 12.7 12 2.5 2.3 2.1 8 7 7 20 19 18 4.5 4.7 4.8 46 29
Tata Power SELL 339 245 (28) 1,083 13.0 3,196 9 8 10 38 42 33 3.4 3.2 2.9 14 14 12 9 8 9 — — — 66 25
Electric Utilities Attractive 7,984 96.1 17.2 15.6 14.2 2.2 2.1 1.9 10.5 9.2 8.3 13.0 13.3 13.4 2.6 2.8 3.0 218 106
Fertilizers & Agricultural Chemicals
Bayer Cropscience REDUCE 5,613 5,080 (10) 252 3.0 45 188 210 232 30 27 24 8.9 8.5 8.0 21 19 17 30 32 34 2.8 3.2 3.5 2 1
Godrej Agrovet ADD 553 530 (4) 106 1.3 192 17 23 30 33 24 18 3.6 3.3 2.9 19 15 11 11 14 17 1.3 1.7 2.3 1.6 0.8
Rallis India REDUCE 260 210 (19) 51 0.6 195 9 11 13 29 24 21 2.7 2.6 2.4 15 13 12 10 11 12 1.3 1.5 1.7 5 2
UPL REDUCE 561 550 (2) 421 5.1 751 27 40 52 20 14 11 1.5 1.4 1.2 7 6 5 7 10 12 1.1 1.6 2.0 17 9
Fertilizers & Agricultural Chemicals Cautious 830 10.0 24.4 18.1 14.3 2.3 2.1 1.9 9.1 7.8 6.6 9.4 11.7 13.4 1.7 2.1 2.5 25 13
Gas Utilities
GAIL (India) SELL 161 125 (22) 1,057 12.7 6,575 12 13 13 13 13 12 1.8 1.7 1.6 11 10 9 14 14 14 4.7 5.0 5.3 39 19
GSPL BUY 327 375 15 184 2.2 564 22 17 19 15 19 17 1.8 1.8 1.7 8 9 8 13 9 10 2.5 2.7 2.9 4 2
Indraprastha Gas REDUCE 425 375 (12) 298 3.6 700 30 28 30 14 15 14 3.6 3.2 2.9 10 11 10 27 23 21 2.4 2.5 2.6 14 7
Mahanagar Gas REDUCE 1,203 975 (19) 119 1.4 99 111 88 85 11 14 14 2.4 2.2 2.0 7 8 8 24 17 15 3.0 2.6 2.5 7 3
Petronet LNG SELL 226 175 (23) 339 4.1 1,500 23 23 24 10 10 9 2.0 1.7 1.5 5 6 6 21 19 17 4.4 2.2 1.1 15 9
Gas Utilities Cautious 1,997 24.0 12.6 12.8 12.3 2.0 1.9 1.7 9.1 8.8 8.4 16.0 14.6 14.2 4.0 3.8 3.8 79 40
Health Care Services
Apollo Hospitals BUY 5,682 5,900 4 817 9.8 144 64 103 135 89 55 42 11.7 9.9 8.3 35 26 21 14 19 21 0.2 0.3 0.4 28 13
Aster DM Healthcare ADD 409 415 2 204 2.5 498 9 13 16 45 31 26 4.2 3.8 3.4 12 10 8 10 13 14 — — — 5 2
Dr Lal Pathlabs SELL 2,506 1,850 (26) 209 2.5 83 42 49 56 60 51 45 11.4 10.3 9.3 33 28 24 20 21 22 0.9 1.0 1.2 8 3
Global Health REDUCE 1,000 885 (12) 268 3.2 268 18 20 25 57 49 40 9.5 8.1 6.9 31 27 23 18 18 19 0.3 0.3 0.4 4 2
KIMS ADD 1,998 2,075 4 160 1.9 80 45 55 68 44 36 29 7.9 6.5 5.3 23 19 15 20 20 20 0.0 0.0 0.0 3 2
Max Healthcare REDUCE 704 630 (11) 685 8.2 971 13 16 20 53 45 35 7.3 6.4 5.4 37 30 23 15 15 17 0.2 0.2 0.2 11 7
Metropolis Healthcare REDUCE 1,651 1,425 (14) 85 1.0 51 30 43 52 55 38 32 7.8 6.9 6.0 27 22 19 15 19 20 0.5 0.8 0.9 8 3
Narayana Hrudayalaya REDUCE 1,234 1,170 (5) 252 3.0 204 39 42 49 32 29 25 8.6 6.7 5.3 21 18 15 31 26 24 — — — 5 3
Rainbow Children's Medicare REDUCE 1,290 1,100 (15) 131 1.6 102 22 28 31 58 46 41 10.5 8.8 7.5 30 24 21 20 21 20 0.3 0.4 0.4 3 2
Health Care Services Cautious 2,811 33.8 56.1 43.9 35.4 8.5 7.3 6.2 27.7 22.4 18.5 15.1 16.6 17.4 0.2 0.3 0.3 75 37
Hotels & Restaurants
Chalet Hotels ADD 706 660 (6) 145 1.7 205 12 19 29 57 38 25 8.1 6.6 5.2 27 20 15 15 19 24 0.0 0.0 0.0 2 1
Devyani International ADD 186 195 5 224 2.7 1,204 1 2 3 131 88 70 20.5 18.3 16.2 31 24 21 17 22 25 0.0 0.0 0.0 6 3
Indian Hotels ADD 452 460 2 642 7.7 1,420 9 14 17 50 33 27 7.0 5.8 4.8 29 20 16 15 19 19 0.1 0.1 0.2 14 8
Jubilant Foodworks REDUCE 534 500 (6) 353 4.2 660 5 8 10 99 69 56 15.2 12.8 10.8 29 23 20 16 20 21 0.2 0.3 0.4 15 8
Lemon Tree Hotels REDUCE 127 105 (17) 101 1.2 792 3 5 6 40 26 22 10.4 8.5 6.9 18 12 11 28 36 34 1.1 1.4 1.6 9 4
Restaurant Brands Asia REDUCE 116 110 (5) 58 0.7 495 (1) (1) 0 NM NM 1,474 3.1 3.2 3.2 22 17 13 NM NM 0 0.0 0.0 0.0 3 2
Samhi Hotels BUY 179 230 29 39 0.5 218 (8) 6 9 NM 30 19 3.6 3.2 2.8 21 12 11 NM 11 15 0.0 0.0 0.0 2
Sapphire Foods BUY 1,401 1,700 21 89 1.1 64 15 20 26 96 69 53 6.6 6.0 5.4 18 15 12 7 9 11 0.0 0.0 0.0 3 2
Westlife Foodworld REDUCE 824 845 3 128 1.5 156 7 9 12 118 89 66 19.6 16.9 14.1 31 25 21 18 20 23 0.0 0.0 0.0 2 1
Hotels & Restaurants Attractive 1,779 21.4 77.9 46.2 36.2 8.8 7.5 6.4 26.4 19.7 16.3 11.3 16.3 17.6 0.1 0.2 0.2 57 29
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Insurance
HDFC Life Insurance BUY 646 830 29 1,389 16.7 2,020 8 9 10 84 71 62 10.1 9.5 8.9 — — — 12 14 15 0.3 0.4 0.4 24 13
ICICI Lombard REDUCE 1,396 1,300 (7) 687 8.3 491 41 49 57 34 29 25 5.8 5.0 4.3 — — — 18 19 19 0.7 0.9 1.0 9 5
ICICI Prudential Life BUY 542 650 20 780 9.4 1,439 6 7 8 91 80 67 7.2 6.7 6.2 — — — 8 9 10 0.6 0.6 0.6 14 8
LIC BUY 824 1,040 26 5,211 62.7 6,325 47 47 51 18 17 16 7.6 5.7 4.5 — — — 51 37 31 — — — 30 14
Max Financial Services BUY 911 1,100 21 314 3.8 345 2 2 2 549 489 426 — — — — — — 1 1 1 — — — 10 6
PB Fintech ADD 813 850 5 367 4.4 450 0 6 12 7,812 141 67 — — — 0 5 9 — — — 13 9
SBI Life Insurance BUY 1,421 1,625 14 1,423 17.1 1,004 19 20 21 76 72 67 11.0 9.7 8.7 — — — 15 14 14 0.2 0.2 0.2 19 11
Star Health and Allied Insurance ADD 550 550 (0) 321 3.9 582 12 18 23 45 31 24 5.2 4.5 3.8 — — — 12 16 17 — — — 4 3
Insurance Attractive 10,493 126.3 28.5 27.2 24.6 7.7 6.3 5.3 27 23 22 0.1 0.1 0.1 122 67
Internet Software & Services
Cartrade Tech SELL 712 460 (35) 33 0.4 51.5 8 11 13 84 64 56 1.8 1.7 1.7 50 32 25 2.1 2.7 3.0 0.0 0.0 0.0 3 1
FSN E-commerce Ventures ADD 177 170 (4) 505 6.1 2,875.0 0 1 2 486 188 109 34.6 29.3 23.1 132 78 53 7.3 16.9 24 — — — 13 6
Indiamart SELL 2,674 2,700 1 160 1.9 60.7 57 70 83 47 38 32 8.5 6.9 5.7 38 29 24 17.6 20.0 19.6 0.1 0.1 0.1 8 4
Info Edge ADD 5,145 5,360 4 666 8.0 129.0 62 69 81 83 75 63 5.8 5.5 5.2 68 59 50 7.1 7.5 8.4 0.3 0.3 0.4 16 7
Just Dial BUY 817 920 13 70 0.8 85.0 39 47 54 21 18 15 1.7 1.6 1.4 14 9 6 8.7 9.4 10.0 — — — 2 1
Zomato BUY 133 130 (2) 1,157 13.9 9,131 0 1 3 799 98 48 6.0 5.6 4.9 (20,577) 92 41 0.8 5.9 10.9 0.0 0.0 0.0 104 46
Internet Software & Services Attractive 2,591 31.2 146 79 51 6.3 5.8 5.2 124 65 42 4.3 7.4 10.3 0.1 0.1 0.1 146 65
IT Services
Cyient BUY 2,243 2,400 7 249 3.0 111 70 87 98 32 26 23 5.5 4.9 4.4 18 16 14 19 20 20 1.6 2.1 2.3 12 5
HCL Technologies ADD 1,448 1,600 11 3,929 47.3 2,714 57 65 72 25 22 20 5.8 5.5 5.2 15 14 13 24 25 27 3.5 3.8 4.0 40 23
Infosys BUY 1,523 1,870 23 6,320 76.1 4,146 60 69 78 26 22 20 7.8 7.1 6.5 17 15 13 31 34 35 3.0 3.4 3.8 106 65
KPIT Technologies SELL 1,506 940 (38) 413 5.0 273 21 28 36 71 54 42 18.7 14.9 11.8 41 32 26 30 31 31 0.4 0.5 0.7 25 10
L&T Technology Services SELL 5,159 4,600 (11) 545 6.6 106 123 142 161 42 36 32 9.5 8.3 7.3 28 24 21 24 24 24 0.8 1.0 1.2 11 4
LTIMindtree REDUCE 5,846 5,910 1 1,730 20.8 296 166 197 233 35 30 25 8.9 7.6 6.4 24 20 17 27 28 28 1.2 1.4 1.5 28 12
Mphasis REDUCE 2,580 2,590 0 487 5.9 188 83 97 114 31 27 23 5.8 5.4 5.0 19 17 14 19 21 23 2.3 2.5 2.7 16 7
Persistent Systems REDUCE 7,286 6,985 (4) 561 6.7 77 145 183 227 50 40 32 12.0 10.1 8.3 31 25 21 26 28 28 0.7 0.9 1.1 40 16
RateGain ADD 739 650 (12) 87 1.0 109 12 15 17 62 49 42 9.5 7.9 6.6 44 36 29 17 18 17 0.0 0.0 0.0 5 2
Tata Elxsi SELL 8,584 5,450 (37) 535 6.4 62 132 157 185 65 55 46 21.7 18.5 15.8 48 40 34 36 37 37 0.8 1.0 1.2 16 7
TCS ADD 3,678 4,115 12 13,459 162.0 3,649 127 142 157 29 26 23 14.0 12.5 11.3 20 18 16 49 51 51 1.6 3.1 3.4 92 55
Tech Mahindra REDUCE 1,229 1,300 6 1,081 13.0 890 35 59 72 36 21 17 3.9 3.9 3.6 19 12 10 11 19 22 2.4 3.6 3.8 31 15
Wipro REDUCE 450 430 (5) 2,353 28.3 5,287 21 23 25 21 19 18 3.2 2.7 2.5 13 11 10 15 15 15 0.2 0.2 2.0 35 16
IT Services Neutral 31,749 382.1 28.3 24.7 22.0 8.0 7.3 6.6 18.5 16.2 14.5 28.4 29.5 30.1 1.9 2.7 3.1 456 238
Media
PVR INOX ADD 1,583 1,700 7 155 1.9 98 18 41 56 86 39 28 1.9 1.8 1.7 20 14 12 2 5 6 0.1 0.3 0.4 11 5
Sun TV Network BUY 720 725 1 284 3.4 394 49 52 55 15 14 13 2.8 2.5 2.3 10 9 8 20 19 19 3.5 3.8 4.2 9 3
Zee Entertainment Enterprises REDUCE 278 275 (1) 267 3.2 960 7 8 9 39 33 31 2.4 2.4 2.3 22 20 18 6 7 7 1.1 1.4 1.4 51 19
Media Attractive 706 8.5 25.2 21.7 19.7 2.4 2.3 2.1 15.3 13.3 11.9 9.5 10.4 10.8 1.8 2.1 2.3 71 27
Metals & Mining
Hindalco Industries ADD 578 535 (7) 1,298 15.6 2,220 38 41 45 15 14 13 1.3 1.2 1.1 7.2 6.7 6.0 9 9 9 0.7 0.7 0.8 36 16
Hindustan Zinc SELL 315 265 (16) 1,333 16.0 4,225 20 20 20 16 16 16 10.3 10.3 10.3 9.3 9.0 8.7 65 64 66 6.3 6.2 6.4 3 2
Jindal Steel and Power BUY 717 800 12 732 8.8 1,020 48 60 83 15 12 9 1.7 1.5 1.3 7.9 6.9 5.2 12 13 16 0.3 0.8 1.7 19 7
JSW Steel REDUCE 822 820 (0) 2,010 24.2 2,417 53 69 89 16 12 9 2.6 2.2 1.8 8.5 6.9 5.6 18 20 22 1.0 1.3 1.6 20 9
National Aluminium Co. SELL 124 75 (39) 227 2.7 1,837 7 7 7 19 19 18 1.6 1.5 1.5 9.5 9.1 8.7 9 9 8 2.1 2.2 2.2 30 12
NMDC ADD 215 200 (7) 631 7.6 2,931 20 20 20 11 11 11 2.5 2.2 2.0 7.0 7.0 6.8 24 21 20 4.6 4.6 4.7 35 15
SAIL SELL 114 60 (48) 472 5.7 4,130 4 6 7 26 20 17 0.8 0.8 0.8 8.6 8.1 7.8 3 4 5 1.4 1.8 2.1 38 15
Tata Steel REDUCE 132 145 10 1,623 19.5 12,224 5 11 16 26 12 8 1.6 1.4 1.3 9.8 6.7 5.5 6 13 17 1.0 2.2 3.0 52 24
Vedanta SELL 259 220 (15) 961 11.6 3,717 17 20 21 15 13 12 2.3 2.2 2.2 5.3 4.9 4.6 15 18 18 5.7 6.7 7.0 29 13
Metals & Mining Cautious 9,287 111.8 16.6 13.0 10.8 2.0 1.8 1.6 7.8 6.7 5.9 11.8 13.7 14.9 2.4 2.9 3.2 262 114
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Oil, Gas & Consumable Fuels
BPCL SELL 455 400 (12) 987 11.9 2,093 121 47 49 4 10 9 1.4 1.3 1.2 3.0 6.1 5.6 43 14 14 11.9 4.7 4.8 38 18
Coal India REDUCE 380 275 (28) 2,344 28.2 6,163 33 28 31 11 13 12 3.6 3.3 3.0 10.9 15.0 12.9 34 26 26 5.3 5.3 5.3 54 24
HPCL SELL 429 310 (28) 609 7.3 1,419 100 59 57 4 7 8 1.7 1.5 1.3 4.9 7.8 7.7 44 21 19 9.3 5.5 5.3 39 15
IOCL SELL 133 100 (25) 1,873 22.5 14,121 24 15 14 6 9 10 1.2 1.2 1.1 4.3 5.6 5.6 23 14 12 8.9 5.8 5.2 38 18
Oil India ADD 374 335 (10) 406 4.9 1,084 53 55 56 7 7 7 1.1 1.0 0.9 5.8 5.5 5.3 16 15 14 3.6 5.4 5.7 18 9
ONGC ADD 218 210 (4) 2,742 33.0 12,580 41 41 39 5 5 6 0.9 0.8 0.7 3.3 3.3 3.1 17 15 13 5.7 6.0 5.6 31 16
Reliance Industries BUY 2,587 2,725 5 17,506 210.7 6,766 109 130 138 24 20 19 2.2 2.0 1.8 12.4 10.5 9.4 10 11 10 — 0.3 0.4 179 113
Oil, Gas & Consumable Fuels Neutral 26,467 318.5 11.8 13.1 12.9 1.8 1.7 1.5 7.4 7.7 7.2 15.4 12.6 11.7 2.6 2.1 2.0 398 213
Pharmaceuticals
Aurobindo Pharma SELL 1,115 840 (25) 653 7.9 586 52 60 69 21 18 16 2.3 2.1 1.9 12 10 9 11 12 12 1.4 1.6 2.0 25 11
Biocon REDUCE 281 235 (16) 337 4.1 1,202 4 9 16 64 31 18 1.5 1.4 1.3 15 12 9 2 5 8 0.5 1.1 2.0 13 6
Cipla ADD 1,272 1,320 4 1,027 12.4 806 49 55 59 26 23 21 3.8 3.4 3.0 16 14 13 16 16 15 0.9 1.0 1.1 26 14
Concord Biotech REDUCE 1,550 1,300 (16) 162 2.0 105 29 38 49 53 41 32 10.7 8.9 7.4 37 29 23 22 24 25 0.5 0.6 0.8 3 2
Divis Laboratories SELL 3,934 2,775 (29) 1,044 12.6 265 64 83 102 61 47 39 7.7 7.2 6.5 43 33 27 13 16 18 1.0 1.0 1.2 20 9
Dr Reddy's Laboratories REDUCE 5,761 5,375 (7) 961 11.6 166 323 339 322 18 17 18 3.4 2.9 2.6 11 10 10 21 18 15 0.7 0.8 0.8 30 16
Gland Pharma SELL 1,930 1,365 (29) 318 3.8 164 54 65 72 36 30 27 3.6 3.2 2.9 22 18 16 11 11 11 - - - 8 4
Laurus Labs SELL 419 270 (36) 226 2.7 536 7 12 16 59 34 26 5.1 4.4 3.8 23 17 14 9 14 16 - - - 11 5
Lupin SELL 1,382 1,005 (27) 629 7.6 455 39 45 56 36 31 25 4.5 4.0 3.5 17 15 13 13 14 15 0.5 0.6 0.7 20 9
Mankind Pharma ADD 2,000 2,000 0 801 9.6 401 45 56 69 44 36 29 9.1 7.7 6.4 32 26 21 22 23 24 0.6 0.7 0.9 24 13
Sun Pharmaceuticals ADD 1,305 1,280 (2) 3,132 37.7 2,399 38 46 53 34 28 25 5.0 4.4 3.8 22 19 16 15 16 16 0.6 0.7 0.8 27 16
Torrent Pharmaceuticals REDUCE 2,325 1,950 (16) 787 9.5 338 49 60 76 48 39 31 10.4 8.5 6.9 23 20 17 24 24 25 0.4 0.4 0.6 8 4
Pharmaceuticals Neutral 10,164 122.3 32.7 27.5 23.9 4.4 3.9 3.5 19.2 16.4 14.2 13.5 14.2 14.5 0.5 0.6 0.7 218 109
Real Estate
Brigade Enterprises BUY 940 780 (17) 217 2.6 231 14 21 28 69 44 33 6.2 5.5 4.8 21 14 11 9 13 16 0.3 0.3 0.3 5 3
Brookfield India Real Estate Trust ADD 245 280 14 108 1.3 439 6 12 17 44 20 14 1.0 1.1 1.1 17 12 11 2 4 6 7.6 9.3 10.2 1 1
DLF ADD 759 590 (22) 1,880 22.6 2,475 13 16 20 60 47 39 4.7 4.3 3.9 67 54 42 8 10 10 0.3 0.3 0.3 34 15
Embassy Office Parks REIT ADD 329 360 10 312 3.7 948 10 14 17 33 23 19 1.3 1.4 1.5 15 12 11 4 6 8 6.7 7.8 9.0 17 15
Godrej Properties SELL 2,161 1,370 (37) 601 7.2 278 21 43 50 103 50 43 6.1 5.4 4.8 (263) 168 192 6 11 12 — — — 18 7
Macrotech Developers ADD 1,124 910 (19) 1,084 13.0 964 17 50 59 64 23 19 7.5 5.7 4.4 42 16 13 12 29 26 — — — 20 9
Mindspace REIT ADD 325 350 8 193 2.3 593 10 13 15 32 26 22 1.3 1.3 1.4 14 13 12 4 5 6 6.4 6.8 7.2 1 1
Nexus Select Trust ADD 136 135 (0) 206 2.5 1,515 5 5 6 29 25 22 6.9 8.6 11.2 16 14 13 28 30 44 6.8 6.8 7.3 1 1
Oberoi Realty REDUCE 1,491 1,080 (28) 542 6.5 364 47 57 103 32 26 15 3.9 3.4 2.7 22 16 9 13 14 21 0.1 0.1 0.1 14 6
Phoenix Mills ADD 2,534 2,190 (14) 453 5.4 179 49 74 85 51 34 30 4.9 4.3 3.8 21 17 15 10 13 14 0.1 0.2 0.2 9 5
Prestige Estates Projects ADD 1,329 910 (32) 533 6.4 401 41 14 22 32 96 60 4.6 4.4 4.1 24 22 18 15 5 7 0.1 0.1 0.1 18 7
Signature Global ADD 1,088 910 (16) 153 1.8 141 14 24 30 78 45 36 18.1 12.9 9.5 59 32 24 44 33 30 — — — 4— 2
Sobha BUY 1,296 835 (36) 123 1.5 95 29 66 50 44 20 26 4.5 3.7 3.3 23 11 12 11 21 14 0.3 0.3 0.4 14 4
Sunteck Realty BUY 446 520 17 65 0.8 140 20 23 58 22 19 8 2.1 1.9 1.5 18 15 6 10 10 22 0.2 0.2 0.2 6 3
Real Estate Attractive 6,467 77.8 49.1 34.0 26.4 4.0 3.7 3.4 31.2 21.1 16.6 8.2 11.0 12.9 1.0 1.1 1.2 162 79
Retailing
Avenue Supermarts SELL 3,804 3,600 (5) 2,476 29.8 648 41 54 68 93 70 56 13.2 11.1 9.2 58 45 36 15 17 18 — — — 18 11
Metro Brands REDUCE 1,290 1,250 (3) 351 4.2 272 14 17 21 95 74 60 19.4 16.3 13.6 46 38 31 22 24 24 — — 1— 2 1
Titan Company ADD 3,706 3,775 2 3,290 39.6 888 41 50 62 89 74 59 34.6 26.2 19.9 60 48 39 34 40 38 0.4 0.4 0.5 34 18
Trent ADD 3,045 2,700 (11) 1,082 13.0 356 25 36 51 120 84 59 31.0 22.6 16.4 62 45 35 30 31 32 — — — 21 11
Retailing Neutral 6,117 86.6 94.6 73.9 58.3 21.5 17.2 13.8 58.7 45.7 36.9 23 23 24 0.2 0.2 0.2 75 41
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Specialty Chemicals
Aarti Industries SELL 599 540 (10) 217 2.6 363 11 16 25 56 38 24 4.1 3.8 3.4 25 20 14 8 11 15 0.3 0.4 0.8 14 6
Atul SELL 6,855 4,070 (41) 202 2.4 30 134 167 203 51 41 34 4.0 3.7 3.4 29 23 20 8 9 11 0.3 0.4 0.6 4 2
Castrol India ADD 181 150 (17) 179 2.2 989 9 10 10 21 19 17 8.7 8.1 7.5 14 13 12 43 45 45 3.9 4.4 4.7 11 5
Clean Science & Technology ADD 1,528 1,480 (3) 162 2.0 106 18 32 53 84 48 29 13.9 11.2 8.5 60 35 21 18 26 34 0.2 0.4 0.6 3 1
Deepak Nitrite REDUCE 2,431 2,120 (13) 332 4.0 136 60 69 79 41 35 31 6.9 5.9 5.0 27 25 22 18 18 18 0.3 0.3 0.3 12 4
Navin Fluorine ADD 3,610 3,620 0 179 2.2 50 69 99 143 52 37 25 7.2 6.1 5.0 32 22 16 15 18 22 0.2 0.2 0.3 10 5
Pidilite Industries ADD 2,715 2,750 1 1,381 16.6 508 38 45 52 71 61 52 16.8 14.9 13.3 48 42 36 25 26 27 0.7 0.9 1.1 12 7
PI Industries ADD 3,405 3,630 7 517 6.2 152 103 110 124 33 31 27 6.0 5.2 4.4 26 22 20 20 18 17 0.4 0.4 0.6 18 10
SRF BUY 2,396 2,660 11 710 8.5 296 50 73 102 48 33 23 6.2 5.3 4.5 25 19 14 14 17 21 0.5 0.6 — 12 6
Vinati Organics SELL 1,727 1,530 (11) 178 2.1 104 36 49 62 48 35 28 6.7 5.8 4.9 35 25 20 15 18 19 0.3 0.4 0.5 1 1
Specialty Chemicals Neutral 4,056 48.8 48.5 39.0 31.1 7.8 6.9 5.9 31.0 25.1 20.4 16.2 17.6 19.1 0.6 0.8 0.8 97 48
Telecommunication Services
Bharti Airtel ADD 1,049 1,050 0 6,157 74.1 5,967 26 39 51 41 27 21 7.1 5.4 4.4 10 8 6 18 23 23 0.5 0.5 0.6 61 40
Indus Towers ADD 213 200 (6) 574 6.9 2,695 19 21 13 11 10 16 2.2 1.8 1.8 4 4 5 22 20 11 0.7 6.1 3.5 23 8
Vodafone Idea RS 17 — — 835 10.0 48,680 (7) (6) (7) NM NM NM NM NM NM 20 19 22 NM NM NM — — — 68 18
Tata Communications SELL 1,719 1,400 (19) 490 5.9 285 37 44 64 46 39 27 24.9 17.4 11.8 14 11 9 61 52 53 0.8 0.9 1.4 23 11
Telecommunication Services Attractive 8,056 97.0 NM 5,010.9 261.5 85 60 108 10.7 8.9 8.0 NM 1.2 41 0.5 0.9 0.8 175 77
Transportation
Adani Ports and SEZ BUY 1,169 1,340 15 2,525 30.4 2,160 44 52 62 27 22 19 4.7 3.9 3.3 17 15 12 19 19 19 0.3 0.3 0.5 80 31
Container Corp. SELL 871 660 (24) 531 6.4 609 21 24 28 42 36 31 4.5 4.3 4.0 26 22 19 11 12 13 1.1 1.3 1.5 12 6
Delhivery BUY 402 410 2 296 3.6 729 (5) (1) 1 NM NM 282 3.2 3.1 3.0 1,519 71 40 NM NM 1 — — — 8 5
Gateway Distriparks BUY 110 98 (11) 55 0.7 500 6 6 7 20 17 15 2.8 2.5 2.2 14 12 10 15 16 16 1.5 1.7 1.9 2 1
GMR Airports REDUCE 87 55 (37) 525 6.3 6,036 (1) (0) 0 NM NM 418 NM NM NM 28 16 13 83 16 NM — — — 36 15
Gujarat Pipavav Port ADD 156 140 (10) 76 0.9 483 8 9 10 20 18 15 3.1 3.0 2.8 12 10 9 16 17 19 3.4 3.8 4.3 6 3
InterGlobe Aviation BUY 2,952 3,300 12 1,139 13.7 383 179 175 199 17 17 15 190.4 15.5 3.3 6 4 3 NM 170 68 — — — 25 14
JSW Infrastructure SELL 216 180 (17) 454 5.5 2,100 4 6 7 48 34 29 5.9 5.2 18.5 25 20 19 16 16 17 0.2 0.6 0.7 17 8
Mahindra Logistics REDUCE 447 340 (24) 32 0.4 71 3 10 20 139 43 23 5.6 5.1 4.3 14 11 8 4 12 21 — — — 2 1
Transportation Attractive 5,632 67.8 31.0 26.2 22.1 6.5 5.3 4.3 15.1 12.0 10.1 21 20 19.6 0.3 0.4 0.5 188 83
KIE universe 259,789 3,127 24.0 21.5 19.2 3.8 3.4 3.0 14.1 12.7 11.4 15.7 15.6 15.7 1.3 1.5 1.6
Notes:
(a) We have used adjusted book values for banking companies.
(b) 2022 means calendar year 2021, similarly for 2023 and 2024 for these particular companies.
(c) Exchange rate (Rs/US$)= 83.1
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Distribution of ratings/investment banking relationships

Kotak Institutional Equities Research coverage universe
Percentage of companies covered by Kotak Institutional

70%
Equities, within the specified category.
60%
Percentage of companies within each category for which
Kotak Institutional Equities and or its affiliates has
50%
provided investment banking services within the previous
12 months.
40% * The above categories are defined as follows: Buy = We
expect this stock to deliver more than 15% returns over
29.0% the next 12 months; Add = We expect this stock to deliver
30% 25.3%
24.5% 5-15% returns over the next 12 months; Reduce = We
21.2%
expect this stock to deliver -5-+5% returns over the next
20% 12 months; Sell = We expect this stock to deliver less than
-5% returns over the next 12 months. Our target prices
10% 6.1% are also on a 12-month horizon basis. These ratings are
3.7% 2.4% used illustratively to comply with applicable regulations. As
0.4%
of 30/09/2023 Kotak Institutional Equities Investment
0%
Research had investment ratings on 245 equity securities.
BUY ADD REDUCE SELL

As of September 30, 2023
Ratings and other definitions/identifiers
Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our Fair Value estimates are also on a 12-month horizon basis.Our Ratings System does not take into account short-term volatility in stock prices related
to movements in the market. Hence, a particular Rating may not strictly be in accordance with the Rating System at all times.
Other definitions
Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the
following designations: Attractive, Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable
regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or
strategic transaction involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a
sufficient fundamental basis for determining an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in
effect for this stock and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
India Research
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January 09, 2024 NIFTY-50 [Jan 08]: 21,513

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JSW Infrastructure (JSWINFRA) SELL

Aditya Mongia Deepak Krishnan Sai Siddhardha Pasupuleti

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities estimates

EV Implied Stake EBITDA Equity Per share

1.3X book on new investments

L&A from standalone to entities

Source: Company, Kotak Institutional Equities

JSW Infra trades at a 35% premium with respect to Adani Ports

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Second-largest diversified commercial port operator in India with ten concessions

Location of the assets and proximity to facilities of Anchor customers

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Share of cargo handled via East Coast has increased in FY2023

120 West coast East coast

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities estimates

Share of volumes attributable to JSW Steel

Source: Company, Kotak Institutional Equities estimates

Growth volumes in FY2023

Source: Company, Kotak Institutional Equities estimates

We expect a 12% volume CAGR over FY2023-30E

Installed capacity (MMT) Volumes (MMT)

Source: Company, Kotak Institutional Equities estimates

Coastal shipping of thermal coal to pick up beyond a lull in FY2024

Source: Ministry of Ports and Shipping, Kotak Institutional Equities estimates

Source: IPA, CRISIL, Kotak Institutional Equities

Source: IPA, CRISIL, Kotak Institutional Equities

Pursue opportunities in synergistic businesses to increase revenue diversification. It intends to

Share of third-party cargo volume mix improved in FY2023

Anchor Customer Third-party

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Healthy competitive positioning of JSW Infra in key markets

Source: Ministry of Ports and Shipping, Kotak Institutional Equities estimates

Risk factors: Concentration risk in terms of customers, cargo and geographies

In our view, the key risks for JSW Infrastructure are:

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

Minimum commitment of volumes account for a minority share of installed capacity

Source: Company, Kotak Institutional Equities

We estimate 12%/15%/18% volume/revenue/EBITDA CAGRs over FY2023-26

We expect a 3-year volume CAGR of 13% for the period 2023-26E

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities

We expect a 600 bps increase in EBITDA margins over 2023-26E

54.2 50.9 48.8 50.7 50.7 52.4 53.7

6.3 6.9 4.3 4.4 4.7

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities