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2. company
3. merger and acquisition

Result Update
February 13, 2015
Rating matrix
Rating
Target
Target Period
Potential Upside
:
:
:
:
Bosch Ltd (MICO)
Hold
| 24000
12 months
-4%
Ancillary king needs a breather!
What’s Changed?
Target
EPS CY15E
EPS CY16E
Rating
Changed from | 18500 to | 24000
Changed from | 494.1 to | 463
Unchanged
Changed from Buy to Hold
Quarterly Performance
Revenue
EBITDA
EBITDA (%)
PAT
Q4CY14
2,458.2
228.0
9.3
110.9
Q4CY13
2,162.0
213.4
9.9
139.0
YoY (%)
13.7
6.8
-60 bps
-20.2
Q3CY14 QoQ (%)
2,555.8
-3.8
438.3
-48.0
17.2 -788 bps
306.4
-63.8
Key Financials
| Crore
CY13
CY14E
CY15E
CY16E
Net Sales
8,541
9,574
11,449
14,133
EBITDA
1,291
1,532
2,080
2,655
Net Profit
885
1,072
1,454
1,884
EPS (|)
281.8
341.2
463.0
600.0
CY14E is of ~12 month duration for like to like comparison
Valuation summary
P/E (x)
EV / EBITDA (x)
Tgt EV/E (x)
P/BV (x)
RoNW (%)
RoCE (%)
CY13
88.4
58.6
56.4
12.4
14.1
14.1
CY14E
73.0
49.6
47.7
11.0
15.0
15.7
CY15E
53.8
36.2
34.8
9.4
17.5
18.8
CY16E
41.5
27.9
26.8
7.9
19.1
21.2
Stock data
Particular
Market Capitalization (| Crore)
Total Debt (CY13) (| Crore)
Cash and Investments (CY13) (| Crore)
EV (| Crore)
52 week H/L (|)
Equity capital (| crore)
Face value (|)
Amount
78,186.0
131.6
2,641.6
75,676.0
25899 / 8867
31.4
10.0
Price performance (%)
Bosch Ltd
Wabco India Ltd
Motherson Sumi Systems Ltd
1M
24.8
9.3
7.2
3M
58.4
32.9
8.9
| 24946
6M
87.0
56.5
32.3
12M
180.1
182.2
103.9
Research analyst
Nishant Vass
nishant.vass@icicisecurities.com
ICICI Securities Ltd | Retail Equity Research
• Bosch Ltd’s (Bosch) Q4CY14 results were in-line with expectations on
the sales front however margins were below than what we expected
• Reported revenues were at ~| 2458 crore vs. our estimate of | 2444
crore, with automotive revenues at | 2138 crore, up 14% YoY while
non-automotive revenues at | 339 crore grew 15% YoY
• Operating margins at 9.3% were lower than our estimate of 13.1%
primarily due to one time one-off costs on the employee front after
the wage negotiation and retirement benefits
• Thus, lower other income (| 90 crore) and exceptional cost of ~| 28
crore impacted PAT more leading to ~| 111 crore came lower
Bosch attractive play on automotive recovery; emissions change!
Bosch India (Bosch) with its strong technology leadership and market
share (>70%), is one of the few ancillary companies with significant
bargaining power with original equipment manufacturers (OEMs). Thus,
in an automotive market (ex-2-Ws/inclusive of tractors) that has witnessed
paltry ~4.9% CAGR (FY11-14) (to 5.2 million units) we feel both latent
consumptive & necessary commercial could spur growth faster than
expectations. We forecast the CV segment will grow at ~14% CAGR in
FY14-17E (owing to weaker base) while in the PV space we expect ~13%
CAGR in FY14-17E on the back of new products. The tractor segment is
likely to grow at ~8-9% CAGR (FY14-17E) on increasing mechanisation of
farms on paucity of rural labour and steady replacement demand.
Another revenue trigger may emanate from pending emission changes in
CY16E/17E on the CV, PV front which could aid value improvement.
Engine business remains one of the most lucrative ancillary segments!
Engine parts constitute the largest chunk (~31%) of the auto ancillary
segment industry (~$40 billion) in value terms. The engine parts business
has much better average RoCE than closer revenue peers like tyre
companies. On top of this, the high market share commanded by Bosch
aids it to generate stable and above-average cash returns relative to both
domestic ancillary peers and even parent’s global comparables.
Strong focus on R&D and new product development!
The Bosch group spends ~$5.5 billion every year on R&D and ~8% of net
sales. It is comparable with the R&D spends of global auto OEMs like
Volkswagen, GM and Toyota. Bosch Group offers most of its technologies
at a low royalty rate (~1.5-2%) to the Indian arm. Bosch India, thus,
stands to benefit from the technology leadership profile of its parent as
implementation of new innovations pick up pace in India. A case in point
is a new product like electronically controlled fuel injection system
developed by Bosch Gmbh, which would be available to Bosch India.
Unchallenged business, unlisted behemoth parent= “scarcity premium”
We believe on the valuations front Bosch would tend to remain at a
premium to both its peers and the market. This stems from its dominant
business position as well as presence of a key behemoth foreign unlisted
promoter. On financials, we anticipate a CAGR of ~21%, ~32% in
revenues, earnings, respectively, over CY14E-16E. Return ratios are likely
to remain healthy at ~19-20%. Although valuations at ~40x CY16E PE
appear optically high, considering the strong growth potential in both the
automotive market as well as non-automotive markets (Solar) over a four
to five year timeframe. We value the stock at 40x (~1.2x PEG) CY16E PE
to arrive at a target price of | 24,000 and recommend HOLD.
Variance analysis
Q3CY14 Q4CY14E Q3CY13 YoY (%) Q2CY14 QoQ (%)
2,458
2,444
2,162
13.7
2,556
-3.8
Total Operating Income
Raw Material Expenses
Comments
In-line with expectations however on sub-segment basis automotive revenues
were lower than anticipated due to exports de-growth of ~10%.
1,308
1,271
1,160
12.7
1,318
-0.8
Weakness of automotive mix led to gross margins decline
Employee Expenses
409
342
313
30.8
343
19.3
Other expenses
EBITDA
EBITDA Margin (%)
Other Income
Depreciation
Interest
Total Tax
PAT
513
228
9.3
90
126
0
54
111
511
320
13.1
120
145
2
88
205
475
8.0
213
6.8
9.9 -60 bps
93
-3.1
124 156 bps
2
-100.0
41
31.0
139
-20.2
Higher-than-expected employee expenses due to wage hikes and one-time
expenses
Other expenses expected higher on account of annual tooling charges
Key Metrics
Automotive revneue
2,283
Non-autmotive revenue
279
Source: Company, ICICIdirect.com Research
2,283
161
1,889
263.9
20.9
5.6
456
12.6
438
-48.0
17.2 -788 bps
121
-25.2
102 2421 bps
0
-100.0
151
-64.5
306
-63.8
2,119
279
Lower than expected impacts profits
7.7
0.0
Change in estimates
(| Crore)
Revenue
EBITDA
EBITDA Margin (%)
PAT
EPS (|)
Old
12,099
2,151
17.8
1,551
494
CY15E
New % Change
11,692
-3.4
2,080
-3.3
17.8
1 bps
1,454
-6.3
463
-6.3
Old
14,372
2,643
18.4
1,884
600
CY16E
New % Change
14,434
0.4
2,655
0.5
18.4
1 bps
1,884
0.0
600
0.0
Comments
Source: Company, ICICIdirect.com Research
Assumptions
CY13
CY14E
Current
CY15E
CY16E
Revenue (| crore)
Automotive
Non- automotive
EBIT margins (%)
7,697
1,136
8,674
1,213
10,324
1,373
12,799 10,729.0 12,772.0
1,640 1,375.0 1,605.0
Automotive
Non- automotive
12.9
4.9
13.3
8.0
16.2
6.8
17.1
7.7
Earlier
CY15E
16.2
6.8
Comments
CY16E
17.1
7.7
Higher EBIT margins owing to improvement in product mix
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 2
Company Analysis
Auto segment to continue to remain key driver of sales growth…
Bosch is an attractive ancillary company due to the huge size of the fuel
injection and engine parts business, which remains one of the most
critical linkages for an OEM. We believe along with a revival in rural
demand reflected in tractor sales, we would witness a better demand
scenario in the automotive space in the coming years. This is considering
about two years of weak demand conditions entering the third year of
weak demand in CY13. In terms of financials, we expect revenue growth
to be ~19%, ~24% for CY15E, CY16E, respectively, and expect it to
touch ~| 14,434 crore in sales in CY16E.
Exhibit 1: Revenue growth trend
23.5
22.2
11000
6000
9,859
8,166
7000
14,434
11.8
8,820
8000
11,692
9000
8,659
(| crore)
20
18.6
10000
25
15
(%)
12000
10
6.0
5
1.9
-
5000
CY11
CY12
CY13
CY14E
Total operating income
CY15E
CY16E
% increase
Source: Company press release, ICICIdirect.com Research
EBITDA margins to remain modest in tough times!
Bosch has seen some EBITDA margin shave-offs from the CY11 peak but
has stabilised at ~15-16%. The company is expected to improve slightly
in the coming years. Overall, margins have remained stable. We expect
them to improve in CY15E and CY16E owing to latent demand revival
post elections and new product launches in lieu of probable emission
norm changes in CY15E, CY16E. For CY15E and CY16E, we have built in
EBITDA margins of 17.8% and 18.4%, respectively.
Exhibit 2: EBITDA margins stability key point…
17.8
18.5
18.4
15.6
16
14.6
15
2,080
1,532
1,291
500
1,350
1500
2,655
2000
1000
18
17
15.5
1,512
(| crore)
2500
19
(%)
3000
14
13
12
11
0
10
CY11
CY12
CY13
EBITDA
CY14E
CY15E
CY16E
EBITDA margins(%)
Source: Company press release, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 3
Strong operational cash flows; clean revenue accounting policies!
Bosch’s business generates strong cash flows from operations (CFO),
which stood at | 1213 crore in CY12. Strong cash inflows from operations
keep the business cash rich and debt free, something which is better than
other ancillary peers. Bosch has a strong record of accounting
conservatism as one can see the CFO (actual cash earnings) is closely
similar to the reported earnings EBITDA (accrual based earnings). The
CY11 cycle was an aberration as the automotive cycle improved suddenly
in H2CY10, CY11. This led to a sudden increase in current assets while
creditor increase could not match the pace. However, since then, it has
steadily improved and is expected to continue in the same vein.
Exhibit 3: CFO, EBITDA reflective of nature of accounting policies
89.8
100
84.1
75.8
80.1
54.2
80
60
2,128
1,576
1,289
1,213
500
1,380
1000
820
(| crore)
2000
1500
120
106.9
(%)
2500
40
20
0
CY11
CY12
CY13
CFO
CY14E
CY15E
CY16E
CFO/EBITDA
Source: Company, ICICIdirect.com Research
Return ratios commendable even as new growth capex comes on stream
Bosch has always had a history of being able to generate above normal
returns of employed capital (RoCE). Since CY08-12, it had RoCEs ranging
between 17% and 23%. The strong capital expenditure exercise started in
CY12 while the ongoing one in CY14E along with domestic automotive
weakness led to a mild reduction in these return ratios. The estimate that
we have built runs the risk of not incorporating any strong uptick in
demand and operational performance.
Exhibit 4: Return ratio profile
27
23.7
(%)
24
25.2
21
17.5
17.2
18
17.1
15
14.1
15.0
19.1
21.2
18.8
15.7
14.1
12
CY11
CY12
CY13
RoE
CY14E
CY15E
CY16E
RoCE
Source: Company press release, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 4
Net profit likely to grow moderately in CY14P-16E as depreciation rises
PAT margins would continue to remain stable in the ~10.5-11% range
between CY12 and CY16E considering improving EBITDA margins. PAT
margins have come down in CY12 due to higher depreciation charge
(they depreciate assets faster than income tax requirements causing the
incremental ~1-1.5% decline in reported PAT more than required). This
decline in non-cash would revert to normalcy in the years ahead.
CY11
CY12
CY13E
Capex
CY14E
CY15E
10.0
10.9
600
400
8
6
4
2
-
0
CY16E
12
(%)
1,884
1000
1,454
200
13.1
10
800
CY10
11.1
1200
200
0
14
1400
100
100
12.9
1,072
600
500
391
200
300
392
300
258
679
254
431
400
277
384
12.3
16
12.4
885
400
1600
13.7
958
367
500
1800
500
(| crore)
600
2000
1,123
404
600
(| crore)
700
(| crore)
559
508
859
800
Exhibit 6: Strong profitability consistency
591
Exhibit 5: Higher depreciation charge owing to increased capex
CY09 CY10 CY11 CY12 CY13E CY14E CY15E CY16E
PAT
PAT margin(%)
Depreciation
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
Outlook and valuation
We believe the CV and tractor segments will be strong growth drivers for
the company’s earnings in CY14E, CY15E. We also expect the
dieselisation trend in the PV space to continue. As PV volumes pick up,
the segment is likely to add to Bosch’s revenues. An increase in the nonautomotive business also lends earnings stability across cycles. With a
strong balance sheet supported by robust FCFs, strong return ratios and
stable high margin profile, the financials are impressive.
We believe on the valuations front Bosch would tend to remain at a
premium to both its peers and the market. This stems from its dominant
business position as well as presence of a key behemoth foreign unlisted
promoter. On financials, we anticipate a CAGR of ~21%, ~32% in
revenues, earnings, respectively, over CY13-15E. Return ratios are likely
to remain healthy at ~19-20%. Although valuations at ~40x CY16E PE
appear optically high, considering the strong growth potential in both the
automotive market as well as non-automotive markets (Solar) over a four
to five year timeframe. We value the stock at 40x (PEG ~1.2x) CY16E PE
to arrive at a target price of | 24,000 and recommend HOLD.
Exhibit 7: Valuation
CY13
CY14E
CY15E
CY16E
Revenues
(| cr)
8820.1
9858.8
11691.9
14433.9
Growth
(%)
11.8
18.6
23.5
EPS
(|)
281.8
341.2
463.0
600.0
Growth
(%)
21.1
35.7
29.6
PE
(x)
88.4
73.0
53.8
41.5
EV/EBITDA
(x)
58.6
49.6
36.2
27.9
RoNW
(%)
14.1
15.0
17.5
19.1
RoCE
(%)
14.1
15.7
18.8
21.2
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 5
Company snapshot
30,000
Target Price 24000
25,000
20,000
15,000
10,000
5,000
Dec-15
Sep-15
Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
0
Source: Bloomberg, Company, ICICIdirect.com Research
Key events
Date
Event
Mar-08
Bosch plans to turn India into a hub for its packaging business
Sep-08
Buyback of shares approved by board for a maximum price of | 4500 per share
Dec-08
Indefinite lockout imposed at Jaipur plant as a result of indefinite strike by workers
Apr-09
Buyback fails to enthuse investors as financials dip on demand slowdown
Jan-10
Bosch announces investment of | 2000 crore in India between 2010 and 2012
Mar-10
Lockout declared at Bangalore plant as wage negotiations with worker unions fail
Mar-11
Increasing trend of dieselation in Indian passenger vehicles space aids Bosch considering it is the market leader in diesel injection systems
Feb-12
Strong Q4CY11 results given a strong thumbs-up by markets
Jun-12
Bosch begins to rationalise production as inventory piles up on slow demand
Dec-12
Senior management rejigged as Dr Stepehn Berns takes over as MD from long standing MD VK Vishwanathan
Jun-13
Commercial vehicle industry witnesses unprecendented fall in volumes affects Bosch's results significantly
Source: Company, ICICIdirect.com Research
Top 10 Shareholders
Name
Robert Bosch GmbH
General Insurance Corporation of India
Aberdeen Asset Management (Asia) Ltd.
The New India Assurance Co. Ltd.
UTI Asset Management Co. Ltd.
Birla Sun Life Asset Management Company Ltd.
Franklin Advisers, Inc.
The Blackstone Group
Columbia Wanger Asset Management, LLC
SBI Funds Management Pvt. Ltd.
Shareholding Pattern
Latest Filing Date % O/S
31-Dec-14 71.18
31-Dec-14
3.15
31-Dec-14
2.98
31-Dec-14
2.83
31-Dec-14
0.83
31-Dec-14
0.52
30-Nov-14
0.45
30-Jun-13
0.43
31-Dec-14
0.39
31-Dec-14
0.28
Position (m)
22.4
1.0
0.9
0.9
0.3
0.2
0.1
0.1
0.1
0.1
Change (m)
0.00
0.00
-0.13
0.00
0.01
0.00
0.02
0.00
-0.02
0.00
(in %)
Promoter
FII
DII
Others
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
71.2
71.2
71.2
71.2
71.2
7.3
7.2
7.4
7.1
6.9
11.7
11.7
11.5
11.9
11.8
9.8
9.9
9.9
9.9
10.2
Source: Reuters, ICICIdirect.com Research
Recent Activity
Buys
Investor name
Franklin Advisers, Inc.
Sydinvest
DSP BlackRock Investment Managers Pvt. Ltd.
Excel Funds Management Inc.
Axis Asset Management Company Limited
Value
7.00m
4.25m
4.07m
2.67m
2.47m
Shares
0.02m
0.01m
0.01m
0.01m
0.01m
Sells
Investor name
Aberdeen Asset Management (Asia) Ltd.
Sundaram Asset Management Company Limited
First State Investment Management (UK) Limited
Capital Investment Trust Corporation
Columbia Wanger Asset Management, LLC
Value
-40.25m
-23.43m
-14.26m
-6.22m
-5.77m
Shares
-0.13m
-0.08m
-0.05m
-0.04m
-0.02m
Source: Reuters, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 6
Financial summary
Profit and loss statement
(Year-end March)
| crore
CY13
CY14E
CY15E
CY16E
8,820.1
9,858.8
11,691.9
14,433.9
1.9
11.8
18.6
23.5
Raw Material Expenses
4,782.3
5,220.6
6,152.1
Employee Expenses
1,191.2
1,413.5
1,546.4
Other Expenses
1,424.6
1,712.4
Total operating Income
Growth (%)
Cash flow statement
| crore
(Year-end March)
CY13
CY14E
CY15E
CY16E
Profit after Tax
884.7
1,071.5
1,453.7
1,884.0
Add: Depreciation
384.1
404.2
507.6
559.5
7,617.0
(Inc)/dec in Current Assets
-202.5
-337.6
-651.3
-930.0
1,844.7
Inc/(dec) in CL and Provisions
310.7
148.7
265.7
614.2
1,935.9
2,316.8
CF from operating activities
1,377.0
1,286.8
1,575.7
2,127.7
Total Operating Expenditure
7,529.1
8,326.4
9,612.3
11,778.4
(Inc)/dec in Investments
-681.5
-513.8
-625.0
-725.0
EBITDA
1,291.0
1,532.3
2,079.6
2,655.4
(Inc)/dec in Fixed Assets
-482.5
-391.9
-500.0
-600.0
-4.3
18.7
35.7
27.7
-41.7
96.6
-32.3
-50.6
384.1
404.2
507.6
559.5
-1,205.7
-809.1
-1,157.3
-1,375.6
2.9
2.1
0.8
0.5
0.0
0.0
0.0
0.0
352.6
436.1
496.1
591.6
-53.4
-57.5
-20.0
-20.0
1,256.6
1,534.1
2,067.3
2,687.0
-203.5
-240.5
-277.5
-314.5
0.0
0.0
-57.7
0.0
36.9
-2.1
-0.8
-0.5
-335.0
Growth (%)
Depreciation
Interest
Other Income
PBT
Exceptional items
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Dividend paid & dividend tax
Others
Total Tax
371.9
462.6
613.6
803.0
-220.0
-300.1
-298.3
PAT
884.7
1,071.5
1,453.7
1,884.0
Net Cash flow
-45.7
179.6
120.9
417.7
Growth (%)
EPS (|)
-7.7
281.8
21.1
341.2
35.7
463.0
29.6
600.0
Opening Cash
Closing Cash
1,487.2
1,441.5
1,441.5
1,621.1
1,621.1
1,742.0
1,742.0
2,159.7
CY14E
CY15E
CY16E
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
Balance sheet
(Year-end March)
| crore
CY13
CF from financing activities
CY14E
CY15E
CY16E
Key ratios
(Year-end March)
CY13
Per share data (|)
Liabilities
31.4
31.4
31.4
31.4
EPS
281.8
341.2
463.0
600.0
Reserve and Surplus
6,262.9
7,093.9
8,270.1
9,839.7
Cash EPS
404.1
470.0
624.6
778.2
Total Shareholders funds
6,294.3
7,125.3
8,301.5
9,871.1
BV
2,004.6
2,269.2
2,643.8
3,143.7
131.6
74.1
54.1
34.1
55.0
65.0
75.0
85.0
459.1
516.3
554.8
687.8
Equity Capital
Total Debt
Other non-current Liabilities
DPS
Cash Per Share
290.8
432.1
472.1
512.1
6,716.7
7,631.5
8,827.7
10,417.2
EBITDA Margin
14.6
15.5
17.8
18.4
Gross Block
4,299.0
5,090.8
5,590.8
6,190.8
PBT / Net sales
14.7
16.0
18.1
19.0
Less: Acc Depreciation
3,377.0
3,781.2
4,288.8
4,848.3
PAT Margin
10.0
10.9
12.4
13.1
Net Block
922.0
1,309.6
1,302.0
1,342.5
Inventory days
51.6
46.8
46.0
46.0
Capital WIP
456.8
56.8
56.8
56.8
Debtor days
45.5
44.7
40.4
40.4
Total Fixed Assets
1,378.8
1,366.4
1,358.8
1,399.3
Creditor days
45.9
44.7
45.5
45.5
Investments
2,201.3
2,715.1
3,340.1
4,065.1
Return Ratios (%)
Inventory
1,207.2
1,228.4
1,442.8
1,781.2
RoE
14.1
15.0
17.5
19.1
14.1
15.7
18.8
21.2
25.1
21.4
27.3
33.7
Total Liabilities
Assets
Operating Ratios (%)
1,073.5
1,171.5
1,427.2
1,761.8
RoCE
Loans and Advances
913.2
1,124.7
1,276.2
1,490.7
RoIC
Other current assets
144.3
151.3
180.9
223.3
Debtors
Valuation Ratios (x)
Cash
1,441.5
1,621.1
1,742.0
2,159.7
P/E
88.4
73.0
53.8
41.5
Total Current Assets
4,779.7
5,296.9
6,069.1
7,416.7
EV / EBITDA
58.6
49.6
36.2
27.9
Creditors
1,064.6
1,171.3
1,265.6
1,562.4
EV / Net Sales
8.9
7.9
6.6
5.2
Provisions
473.2
521.1
563.1
695.1
Market Cap / Sales
9.2
8.2
6.8
5.5
Other Current Liabilities
666.7
660.8
790.2
975.5
Price to Book Value
12.4
11.0
9.4
7.9
Total Current Liabilities
2,204.5
2,353.2
2,618.8
3,233.0
Solvency Ratios
Net Current Assets
2,575.2
2,943.7
3,450.3
4,183.7
Debt/Equity
0.0
0.0
0.0
0.0
Deferred Tax Asset
Other non-current Assets
Application of Funds
298.9
262.6
6,716.7
390.2
216.0
7,631.5
420.2
258.3
8,827.7
450.2
318.9
10,417.2
Current Ratio
Quick Ratio
2.2
1.6
2.3
1.7
2.3
1.8
2.3
1.7
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Source: Company, ICICIdirect.com Research
.
Page 7
ICICIdirect.com coverage universe (Auto & Auto Ancillary)
Sector / Company
Amara Raja (AMARAJ)
Apollo Tyre (APOTYR)
Ashok Leyland (ASHLEY)
Bajaj Auto (BAAUTO)
Balkrishna Ind. (BALIND)
Bharat Forge (BHAFOR)
Bosch (MICO)
Eicher Motors (EICMOT)
Escorts (ESCORT)
Exide Industries (EXIIND)
Hero Mototcorp (HERHON)
JK Tyre & Ind (JKIND)
M&M (MAHMAH)
Maruti Suzuki (MARUTI)
Motherson (MOTSUM)
Tata Motors (TELCO)
Wabco India (WABTVS)
CMP
(|)
TP(|) Rating
887
932 Hold
182
228
Buy
67
68 Hold
2,260 2,833
Buy
694
734
Buy
1,184 1,178 Hold
24,905 24,000 Hold
16,670 15,000 Hold
128
131 Hold
176
220
Buy
2,847 3,036 Hold
119
171
Buy
1,167 1,457
Buy
3,591 4,000 Hold
466
512
Buy
562
600 Hold
5,298 6,000
Buy
M Cap
(| Cr)
15,159
9,195
18,843
65,398
6,704
27,597
78,202
45,026
1,531
14,926
56,852
2,709
68,908
108,522
41,092
170,276
10,066
FY15E
25.1
19.5
1.2
111.8
44.1
33.9
341.2
253.0
6.9
6.0
128.8
15.2
59.3
117.0
9.1
61.5
67.2
EPS (|)
FY16E
34.0
21.4
2.1
155.5
56.5
43.3
463.0
443.9
12.9
8.4
166.2
22.9
74.5
155.1
16.9
72.9
117.8
P/E (x)
EV/EBITDA (x)
RoCE (%)
RoE (%)
FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E
42.3 35.4 26.1 21.0 20.9 16.5 13.1
33.9
34.0
33.0
25.0
26.4
25.6
22.8
9.3
8.5
8.0
5.5
5.5
5.3
19.3
16.6
15.3
17.9
16.5
15.1
3.5 53.9 31.7 19.3 21.9 15.3 11.6
6.7
11.0
14.9
6.6
10.8
16.0
180.0 20.2 14.5 12.6 11.8
9.1
7.3
38.0
39.4
40.4
29.9
34.8
33.7
66.8 13.6 10.6
9.0
8.7
6.6
5.4
14.4
17.6
19.9
18.7
14.4
17.6
52.9 34.9 27.3 22.4 16.5 13.6 11.5
25.2
25.8
26.7
24.5
25.0
25.1
600.0 73.0 53.8 41.5 49.6 36.2 27.9
15.0
17.5
19.1
15.7
18.8
21.2
682.2 65.9 37.6 24.4 31.5 17.8 11.2
24.7
33.8
37.9
26.2
32.8
34.7
22.4 18.5
9.8
5.7
9.0
6.6
3.7
5.3
8.1
12.7
4.3
7.6
11.8
11.4 29.1 20.9 15.4 18.8 14.0 10.4
17.8
21.9
25.8
12.7
15.8
18.6
202.4 22.1 17.1 14.1 14.6 16.3 15.1
46.8
52.5
52.4
39.4
42.8
42.8
26.3
7.8
5.2
4.5
5.3
4.1
3.4
19.9
22.8
24.1
26.7
30.9
28.1
84.8 19.7 15.7 13.8 14.0
8.6
7.5
18.9
20.1
20.6
19.8
19.3
18.9
200.0 30.7 23.2 18.0 16.5 13.0 10.2
14.7
17.4
19.6
14.8
16.9
18.6
27.3 51.2 27.6 17.1 14.5 10.7
7.3
22.2
27.6
35.8
24.8
36.3
41.6
80.5
9.1
7.7
7.0
4.2
3.7
3.3
23.6
22.4
21.2
23.7
22.4
19.9
166.7 78.8 45.0 31.8 47.0 31.1 22.1
14.7
20.9
23.2
18.5
24.3
27.6
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 8
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey
Head – Research
pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
ICICI Securities Ltd | Retail Equity Research
Page 9
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ICICI Securities Ltd | Retail Equity Research
Page 10