Market Strategy

March 2021
AUGUST 2, 2017
 Market Strategy
March 2021

Arun Agarwal
[email protected]
MARKET OUTLOOK FOR MARCH 2021
+91 22 6218 6443
Rising hopes of a global economic recovery on the back of increasing vaccination supported
global equities performance in the month of February. However, last week of February month
Rusmik Oza witnessed sharp rise in bond yields which briefly led to some correction in equity market
[email protected] performance across the globe. The MSCI World Index and MSCI Emerging market Index closed
+91 22 6218 6441 the month of February with gains of 2.5% and 0.7%, respectively. Indian markets performed
strongly in February with Nifty-50 and BSE Sensex gaining 6.6% and 6.1%, respectively. Union
Budget led to renewed optimism in Indian markets with eight sectors posting more than 10%
gains in the month of February. BSE Metal Index gave highest return of 24% followed by BSE
Utilities at 18% in the month of February.

US Treasury yields have witnessed an increase in February on the back of prospects of higher
inflation from recovery in the economy and also from expectation of additional stimulus
package. The 10-year US Treasury yield increased from 0.93% at the start of the calendar year
to 1.44% towards the end of February. Bond yields are largely inversely proportional to the
returns in equity markets if the economic growth phase is not very strong. Recent and rapid
up move in U.S. Treasury yields possibly have investors concerned about rally in U.S. equities
going ahead. However, Federal Reserve Chair Jerome Powell has said that the Central Bank
will not start raising interest rates until it believes its goals on maximum employment and
inflation have been reached. Somewhere the market is pre-empting future developments much
in advance. Based on updated IMF estimates, the US economy is likely to grow by 5.1% in
CY21, as against 3.4% contraction witnessed in CY20.

Europe continues to stay impacted from coronavirus, with a number of nations still in
lockdown or with strict social restrictions in place. Eurozone GDP contracted by 0.6% in the
fourth quarter of CY20, as major economies established lockdown measures to control a spike
in the coronavirus pandemic. IMF forecasts, euro-area GDP to increase by 4.2% in CY21, after
contracting 7.2% in CY20.

India’s Real GDP in 3QFY21 grew 0.4% versus consensus estimates of 0.6%. The growth was
driven by manufacturing, construction and financial/real estate sectors. We expect FY21E GDP
growth at (-) 8% and 4QFY21E growth at (-)1.4%. Heading into FY22, we expect manufacturing
growth to remain supportive over 1HCY21 before plateauing. The services sector should see
faster normalization in 2HFY22 assuming a sizeable portion of the vulnerable population is
vaccinated by 2QFY22. For FY22E, we factor in a robust construction sector growth and faster
pace of recovery in services and revise our FY22E real GDP growth to 10.5% (earlier at 9.3%).
From a market perspective Q3 GDP numbers should not matter as corporates earnings have
been far better than expectations. The disconnect between GDP numbers and corporate
earnings also shows there is a possible shift already taking place between the unorganised
players to organised and listed players.

The monetary policy committee (MPC) complemented the Government’s agenda for growth by
keeping the repo rate unchanged at 4%. The last two RBI policy statements and the minutes
suggest that while in the near term the MPC members will remain focused on supporting
growth through accommodative stance and ample liquidity, they remain concerned on risks of
increasing inflation and financial stability. We expect economic activity to continue
normalizing as vaccine rollouts boost services sector, which has lagged industrial growth in
FY21. Inflation prints remaining well below 6% bodes well for the RBI to continue supporting
the government borrowing in the near term. We estimate average inflation at 4.7% in 4QFY21
(MPC at 5.2%) and 4.8% in 1HFY22 (MPC at 5- 5.2%). Rates will have to gradually inch higher
amid limitations to RBI interventions as recovery picks up in FY22.

A combination of healthy capital expenditure, PLI schemes and privatisation/strategic

divestment of PSUs could lead to strong economic growth in future. The government also
plans to monetize 100 government-owned assets, presenting an investment opportunity of
Rs.2.5 lakh cr. In the Union budget, the government’s bigger focus was on supply-side reforms
with the objective of kick-starting the investment cycle, critical for India’s medium-term growth

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Market Strategy
March 2021

prospects. The Indian economy may be on the verge of a multi‐year investment cycle similar
to the 2003‐11 cycle (led by household and private sector). Factors such as plentiful & cheap
labour, recent labour reforms, low taxation rates for manufacturing and PLI schemes may kick
start the private sector investment cycle. Combination of factors like increase in affordability
due to stable real estate prices for past 5‐6 years, low interest rates, decline in EMIs, pent up
demand and households desire to upgrade may result in a sustained housing cycle. Although
we are anticipating a multi-year investment cycle similar to the 2003-2011 phase the one big
difference between 2003 & 2021 is that Nifty‐50 now trades at ~21.6x on forward PE while it
traded at 6‐8x on forward PE before the start of 2003‐08 bull market.

In the 3QFY21 earnings season, a large number of companies have managed to beat
expectations at revenue and earnings levels. 3QFY21 adjusted net profit of Nifty‐50 increased
by 18.5% yoy versus our expectation of 17.5%. 3QFY21 EBITDA of Nifty‐50 increased by 19.9%,
2.4% ahead of our expectation. Net profits of our covered universe of companies increased by
47% yoy in 3QFY21 versus our expectations of 43%. On the revenues front - cement, consumer
durables and retail sector beat our estimates whereas on the earnings front commodity
chemicals, pharmaceuticals & transportation sectors beat estimates. Reasons such as volume
recovery in rural and urban markets, price hikes, lower operating costs along with various cost-
cutting measures led to this strong performance. Going forward we can expect strong set of
numbers to continue for the next three quarters on the back of low base effect. Our revised
Nifty‐50 EPS estimates is Rs531 for FY21E, Rs673 for FY22E and Rs794 for FY23E. We now
expect earnings of Nifty‐50 to grow by 20% in FY21E & 25% in FY22E Vs 12% for FY21 & 28%
for FY22 seen at beginning of 3QFY21 result season.

Nifty‐50 valuation is rich on a one year forward basis at 21.6x (i.e. on FY22E) and reasonable
on two year forward basis at 18.3x (i.e. on FY23E). We are factoring in earnings growth of 25%
in FY22E and 18% in FY23E. We expect muted returns from market over next few months as
valuations are rich and possibly higher bond yields may offset potential earnings upgrades.
We expect global bond yields to gradually move higher which could impact emerging market
currencies and lead to moderation in equity valuation. We are not extremely bearish on the
market as the massive stimulus which is likely to continue in this calendar year along with
strong V shaped economic recovery should provide support to market at lower levels. For India,
most of the factors driving markets are in place except for valuations and threat of rising bond
yields. As time goes by, India’s valuations will moderate making it a good ‘buy on dips’ market
going forward. In the previous two phases of strong investment cycle (i.e. Gross Fixed Capital
Formation/GFCF) Indian equities outperformed even though bond yields kept on rising. Hence
all we need is a strong investment cycle to negate the risk of rising bond yields in India.

Since near term valuations are still very much on the higher side it is not wise to expect healthy
returns in less than one year. Market could see a consolidation phase in the next few months
and eventually start rising as investors start discounting FY23E by end of the calendar year.
Our belief in economy driven sectors has further strengthened after the budget. Few sectors
and pockets that can make money for investors given their past underperformance and
potential recovery are banks, capital goods, construction, engineering, oil & gas, cement, real
estate & metals. Hence, one can have an accumulation strategy in economy driven sectors on
every decline.

Key risks: Brent crude oil price has risen from US$ 55/bbl at the start of February to $64/bbl
on U.S. supply disruption and continued supply discipline by Organization of the Petroleum
Exporting Countries (OPEC) and allies. If crude oil prices continue to move upwards, then it
could negatively impact India’s trade deficit and INR may witness depreciation pressure. After
seeing decline in active Covid cases for days, India has once again started reporting an upward
trend raising concerns about second wave. We remain watchful of the recent surge in
infections and any restrictions across various states which may pose downside risks to
growth. The 10-year G-Sec bond yield in India has moved up from the recent low of 5.85% to
6.23%, in line with the rise in US yields. We expect 10 Yr G-Sec yields to be in the range of 6-
6.75%. However, it is hard to forecast bond yields in the current-macro-environment given the
large influence of central banks on bond yields, which distorts the ‘correct’ level of yields.

Kotak Securities – Private Client Group Please see the Disclosure/Disclaimer on the last page For Private Circulation 3
Market Strategy
March 2021

Global Indices Performance (in %) - for February 2021

MSCI World 2.5

MSCI EM 0.7
S&P 500 2.6
Dow Jones Indl 3.2
NASDAQ COMP. 0.9
Germany 2.6
France 5.6
UK 1.2
BSE Sensex 6.1
Nifty 50 6.6
NIFTY Midcap 100 11.3
S&P BSE SmallCap 12.0
Taiwan 5.4
Japan 4.7
S.Korea 1.2
Hong Kong 2.5
Shanghai 0.7
Singapore 1.6
Indonesia 6.5
Thailand 2.0
Brazil -4.4
Russia 2.1

-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

Source: Bloomberg, Kotak Securities – Private Client Group

Sectoral Indices (% Chg) - For February 2021

BSE FMCG -2.1%

BSE IT -1.6%
BSE Healthcare 1.1%
BSE Telecom 3.7%
BSE Auto 3.7%
BSE Consumer Durables 5.5%
BSE Capital Goods 10.5%
BSE Oil & Gas 12.5%
BSE Bankex 12.5%
BSE Energy 13.9%
BSE Realty 15.2%
BSE Industrials 15.3%
BSE Utilities 17.5%
BSE Metals 24.4%

-25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0%

Source: Bloomberg, Kotak Securities – Private Client Group

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Market Strategy
March 2021

TOP INVESTMENT IDEAS

Price Fair Upside/ Mkt EPS
Rating (Rs) Value Downside cap. EPS (Rs) growth (%) P/E (x) P/BV (x) RoE (%)
Company 26 Feb 21 (Rs) (%) (Rs Cr) FY22E FY23E FY22E FY23E FY22E FY23E FY22E FY23E FY22E FY23E

Bajaj Consumer Care ADD 243 300 23.5 3,582 16.3 17.6 6.7 7.8 14.9 13.8 4.0 3.5 29.3 27.4

Cipla Limited BUY 787 950 20.7 63,472 34.3 49.8 7.6 45.0 22.9 15.8 3.1 2.7 13.6 17.0

DCB Bank BUY 116 150 29.3 3,614 12.2 16.3 15.0 33.3 9.5 7.1 1.0 0.9 10.4 12.5

Escorts BUY 1311 1700 29.7 11,651 88.9 99.8 14.8 12.3 14.7 13.1 2.2 1.9 15.1 14.8

ITC BUY 204 265 29.9 2,50,845 12.3 13.3 18.7 8.1 16.6 15.3 3.8 3.6 22.4 23.8

L&T Ltd BUY 1443 1720 19.2 2,02,590 80.5 99.5 60.4 23.5 17.9 14.5 2.6 2.4 15.5 17.3

Petronet LNG BUY 255 300 17.7 38,272 21.3 23.3 3.9 9.4 12.0 11.0 3.1 3.0 26.5 27.6

Source: Kotak Institutional Equities. The above valuation summary is based on closing prices as on 26th February 2021.

Kotak Securities – Private Client Group Please see the Disclosure/Disclaimer on the last page For Private Circulation 5
 Dated: 27 February 2021

Bajaj Consumer Care (BAJAJCON) - ADD

Result Update
Current Market Price (CMP) Target Price
Rs.243 Rs.300

Our fair value of Rs 300 offers upside of 23.5% from the current market price.

Rationale:
• Hair oil category growth has nearly normalized.
• New CEO’s single-minded focus & initiatives on reviving growth yielding results.
• We expect earnings to grow by 6.7% in FY22E & grow by 7.8% in FY23E.
• Stock is currently trading at valuation of 13.8x P/E FY23E EPS.
• We value BAJAJCON on Discounted Cash Flow (DCF) based fair value of Rs 300.

Q3FY21 Earnings update:

Positives:
• Net operating revenues were up 18% yoy to Rs243 crs (KIE Rs229crs) in Q3FY21.
• ADHO (Almond Hair oil) reported 14% yoy growth in Q3FY21 led by large packs.
• Both urban and rural markets saw pick-up in market share in Q3FY21.
• BAJAJCON continues to invest towards rural distribution expansion.
• E-Commerce channel continues to gain salience growing ~3X yoy in Q3FY21.

Negatives:
• Management highlighted short-term input cost inflation.
•Click
Sharphere To read the detailed report dated 5th February 2021. Note: CMP and Valuation may differ due to difference in dates.

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months / Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27 February 2021

Cipla Limited (Cipla) – BUY

Result Update
Current Market Price (CMP) Target Price
Rs. 787 Rs. 950

Our price target of Rs.950 offers upside of 20.7% from current market price.

Rationale:
• Domestic leads sales growth; strong cost controls drive margin outperformance
• Strong execution in respiratory franchise positions Cipla well over medium term
• Raise FY22/23 earnings estimate by 2-3%; Stock trades at 15.8x FY23E earnings.
• Revise Fair Value to Rs950 (Rs915 earlier) as we roll forward to FY23E. BUY.

Q3FY21 Result update:

Positives:
• Sales and profit for Q3FY21 exceeded our estimates by 5% & 24% respectively.
• Gross margins remained steady qoq at 61.4% benefitting from favorable mix.
• Cost optimization initiatives to provide strong support to margins& return ratios
• Cipla well-positioned to deliver robust earnings growth over the medium term.
• Proventil has now achieved 12% market share in total albuterol market.

Negative:
• Other income was boosted by one-time income on account of lenalidomide
settlement.
Click here For detailed report dated 31st Jan 2021. Note: CMP & valuation may differ due to difference in dates.

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period – 12 Months; Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27 February 2021

DCB Bank (DCBB) – BUY

Result Update
Current Market Price (CMP) Target Price
Rs.116 Rs.150

We see 29.3% upside in the stock at our Fair Value of Rs.150

Rationale:
• Reported flat earnings on the back of building provisions for Covid-related NPLs.
(NPL – non-performing loans)

• Recovery in macro would be factor for re-rating; Revised earnings upward for FY21
• DCBB trading at significant discount to peers at 0.9x FY23 expected book value.
• We value DCBB at 1.3x book & 12x FY23E EPS for RoEs of 11% in the medium term
(EPS – Earnings per share; RoEs – Return on equities)

Q3FY21 Earnings update:

Positives:
• Revenues grew 18% yoy led by treasury income; operating profits grew ~45% yoy.
• Cost-to-income ratio was lower ~4% qoq; NII up 4% yoy; NIM was flat qoq at 3.7%
(NIM – Net Interest Margin; NII – Net Interest Income)

• Current account & saving account ratio is at 23%, largely unchanged.

• GNPL & NNPL ratios down ~0.3% & ~0.2% qoq to 2.0% & 0.6%, respectively.
(GNPL – Gross non-performing loans; NNPL – Net non-performing loans)

Negatives:
• PAT down ~1% yoy led by strong provision; Deposits declined 3% yoy and flat qoq
• Building higher slippages of ~6.5% & loan-loss provisions of ~3.3% for FY21/22E
Click here For detailed report dated 24th January 2021. Note: CMP & valuation may differ due to difference in dates

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months / Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27th February 2021

Escorts (ESC) - BUY

Result Update
Current Market Price (CMP) Target Price
Rs.1311 Rs.1700

Our fair value of Rs.1700 offers 29.7% upside from the current market price.

Rationale:
• We expect the tractor industry to show strong growth over the next two years.
• We estimate Esc tractor volumes to grow at 14.5% yoy in FY21E & 10.7% in FY22E.
• We expect earnings per share (EPS) to grow by 14.8% in FY22E and 12.3% in FY23E.
• Stock is trading at a PE of 13.1x FY23E EPS; we value the stock at 17x Mar’23E EPS.

Q3FY21 Earnings update:

Positives:
• Net revenues increased by 24% yoy to Rs2,017 cr; tractor volumes grew 25.7% yoy.
• Tractor EBIT (Earnings before interest & depreciation) margin was 20.1%, +560 bps yoy.
• Construction segment EBIT margin came in a 7.5% (+270 bps yoy, +580 bps qoq).

Negatives:
• Railway segment EBIT margin came in 12.7% (-570bps yoy, -760 bps qoq).
• Esc lost 24 bps market share yoy in Q3FY21 due to adverse geographical mix.
• Esc expects 200-300 bps commodity headwinds impact on gross margins in Q4FY21.

Click here For detailed report dated 2nd Feb 2021. Note: CMP & valuation may differ due to difference in dates.

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months / Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27 February 2021

ITC (ITC) – BUY

Result Update
Current Market Price (CMP) Target Price
Rs.204 Rs.265

Our fair value of Rs 265 offers upside of 29.9% from the current market price.

Rationale:
• ITC offer a combination of decent growth and inexpensive valuation.
• There is promise of solid long term growth in FMCG.
• We expect earnings to grow by 18.7% in FY22E & grow by 8.1% in FY23E.
• Stock is currently trading at valuation of 15.3x P/E FY23E EPS.
• We value ITC using Sum of the Parts (SoTP) methodology.

Q3FY21 Earnings update:

Positives:
• Operating profit declined 7% yoy to Rs4281 cr (KIE: Rs4246 cr) in Q3FY21.
• Cigarettes reported 92% recovery in net sales & earnings before interest & tax.
• Discretionary/out of home segment in other FMCG have recovered.
• Agri business registered 18% yoy revenue growth led by trading opportunities.

Negatives:
• Hotels segments’ performance was a shade weaker than expected in Q3FY21.
• Paperboards witnessed 5% yoy sales decline with subdued domestic demand.
Click here To read detailed report dated 12th February 2021. Note: CMP and Valuation may differ due to difference in dates.

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months / Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27 February 2021

L&T Ltd (LT) - BUY

Company Update
Current Market Price (CMP) Target Price
Rs. 1443 Rs. 1720

Our fair value of Rs 1720 implies an upside of 19.2% from current market
price.

Rationale:
• Government’s impetus on infrastructure spending bodes well for L&T.
• This should lead to quick order realization and eventual scale-up in execution.
• EPS growth of 60.4% and 23.5% in FY22E and FY23E, respectively.
• Trading at P/E of 17.9x and 14.5x on FY22E and FY23E EPS, respectively.
• We raise our target multiple P/E to 17x from 15x earlier.

Company update:
Positives:
• We envisage an uptick in infrastructure spending from FY23.
• Volume boost with benign competition may yield pricing gains.
• We see meaningful gains for L&T in overseas markets beyond Middle East.
• In Defense, we note scope for exports becoming a good opportunity.

Negatives:
• State budgeted spending has not matched with actual spending in recent years.

Click here For detailed report dated 1st February 2021. Note: CMP & valuation may differ due to difference in dates

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months / Disclaimer: http://bit.ly/2n5AxIE
 Dated: 27th February 2021

Petronet LNG (PLNG) – BUY

Result Update
Current Market Price (CMP) Target Price
Rs.255 Rs.300

Our fair value of Rs.300 offers an upside of 17.65% from current market price.

Rationale:
• Robust results despite lower volumes.
• Lower-than-anticipated volume at Dahej terminal offset by higher margins.
• Prudent capital allocation policy; Kochi utilization to rise to ~35% in a year.
• Expect earnings to grow by 3.9% in FY22E and 9.4% in FY23E.
• We value PLNG stock at Rs300 using discounted cash flow methodology.

Q3FY21 Earnings update:

Positives:
• Higher gross contribution led by increase in trading profits & adventitious gains.
• Operating profit up 21% yoy to Rs1335 cr in Q3FY21, 6% above our estimate.
• Net income up 30% yoy to Rs879 cr (EPS of Rs5.9), 11% above estimates.
• It is facilitating setup of 12 LNG retail outlets in a year.

Negatives:
• Overall volumes were 10% below estimates, up 1% yoy, but down 7% qoq.
Click here For detailed report dated 14th February 2021. Note: CMP & valuation may differ due to difference in dates

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 months. Disclaimer: http://bit.ly/2n5AxIE
Market Strategy
March 2021

RATING SCALE (KOTAK SECURITIES – PRIVATE CLIENT GROUP) / KOTAK INSTITUTIONAL EQUITIES
Definitions of ratings
BUY – We expect the stock to deliver more than 15% returns over the next 12 months
ADD – We expect the stock to deliver 5% - 15% returns over the next 12 months
REDUCE – We expect the stock to deliver -5% - +5% returns over the next 12 months
SELL – We expect the stock to deliver < -5% returns over the next 12 months
NR – Not Rated. Kotak Securities is not assigning any rating or price target to the stock. The report has been prepared for
information purposes only.
SUBSCRIBE – We advise investor to subscribe to the IPO.
RS – Rating Suspended. Kotak Securities has suspended the investment rating and price target for this stock, either because there
is not a Sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing,
an investment rating or target. The previous investment rating and price target, 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.
NOTE – Our target prices are with a 12-month perspective. Returns stated in the rating scale are our internal benchmark.

FUNDAMENTAL RESEARCH TEAM (PRIVATE CLIENT GROUP)

Rusmik Oza Arun Agarwal Amit Agarwal, CFA Priyesh Babariya
Head of Research Auto & Auto Ancillary Transportation, Paints, FMCG Research Associate
[email protected] [email protected] [email protected] [email protected]
+91 22 6218 6441 +91 22 6218 6443 +91 22 6218 6439 +91 22 6218 6433

Jatin Damania Purvi Shah K. Kathirvelu

Metals & Mining, Midcap Pharmaceuticals Support Executive
[email protected] [email protected] [email protected]
+91 22 6218 6440 +91 22 6218 6432 +91 22 6218 6427

Sumit Pokharna Pankaj Kumar Krishna Nain

Oil and Gas, Information Tech Midcap M&A, Corporate actions
[email protected] [email protected] [email protected]
+91 22 6218 6438 +91 22 6218 6434 +91 22 6218 7907

TECHNICAL RESEARCH TEAM (PRIVATE CLIENT GROUP)

Shrikant Chouhan Amol Athawale Sayed Haider
[email protected] [email protected] Research Associate
+91 22 6218 5408 +91 20 6620 3350 [email protected]
+91 22 62185498

DERIVATIVES RESEARCH TEAM (PRIVATE CLIENT GROUP)

Sahaj Agrawal Prashanth Lalu Prasenjit Biswas, CMT, CFTe
[email protected] [email protected] [email protected]
+91 79 6607 2231 +91 22 6218 5497 +91 33 6625 9810

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Market Strategy
March 2021

Disclosure/Disclaimer (Private Client Group)

Kotak Securities Limited established in 1994, is a subsidiary of Kotak Mahindra Bank Limited. Kotak Securities is one of India's largest brokerage and distribution house.
Kotak Securities Limited is a corporate trading and clearing member of BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Metropolitan Stock Exchange
of India Limited (MSE), National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX). Our businesses include stock broking, services
rendered in connection with distribution of primary market issues and financial products like mutual funds and fixed deposits, depository services and Portfolio
Management.
Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
Kotak Securities Limited is also registered with Insurance Regulatory and Development Authority as Corporate Agent for Kotak Mahindra Old Mutual Life Insurance
Limited and is also a Mutual Fund Advisor registered with Association of Mutual Funds in India (AMFI). We are registered as a Research Analyst under SEBI (Research
Analyst) Regulations, 2014.
We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in last five years.
However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise/warning/deficiency letters/ or
levied minor penalty on KSL for certain operational deviations. We have not been debarred from doing business by any Stock Exchange / SEBI or any other authorities;
nor has our certificate of registration been cancelled by SEBI at any point of time.
We offer our research services to clients as well as our prospects.
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of Kotak Securities Ltd. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of
individual clients.
We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable though its accuracy or completeness cannot be
guaranteed. Neither Kotak Securities Limited, nor any person connected with it, accepts any liability arising from the use of this document. The recipients of this material
should rely on their own investigations and take their own professional advice. Price and value of the investments referred to in this material may go up or down. Past
performance is not a guide for future performance. Certain transactions -including those involving futures, options and other derivatives as well as non-investment
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movement and trading volume, as opposed to focusing on a company's fundamentals and as such, may not match with a report on a company's fundamentals.
Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed
in this material, there may be regulatory, compliance or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-
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decisions that are inconsistent with the recommendations expressed herein.
Kotak Securities Limited has two independent equity research groups: Institutional Equities and Private Client Group. This report has been prepared by the Private Client
Group.
We and our affiliates/associates, officers, directors, and employees, Research Analyst(including relatives) worldwide may: (a) from time to time, have long or short
positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn
brokerage or other compensation or act as a market maker in the financial instruments of the subject company/company (ies) discussed herein or act as advisor or
lender / borrower to such company (ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions
at the time of publication of Research Report or at the time of public appearance. Kotak Securities Limited (KSL) may have proprietary long/short position in the above
mentioned scrip(s) and therefore may be considered as interested. The views provided herein are general in nature and does not consider risk appetite or investment
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to do business with KSL. Kotak Securities Limited is also a Portfolio Manager. Portfolio Management Team (PMS) takes its investment decisions independent of the
PCG research and accordingly PMS may have positions contrary to the PCG research recommendation. Kotak Securities Limited does not provide any promise or
assurance of favourable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors
including their financial condition, suitability to risk return profile and take professional advice before investing.
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies
and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this
report.
No part of this material may be duplicated in any form and/or redistributed without Kotak Securities' prior written consent.
Details of Associates are available on www.kotak.com
1. “Note that the research analysts contributing to the research report may not be registered/qualified as research analysts with FINRA; and
2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions on communications
with a subject company, public appearances and trading securities held by a research analyst account
Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak Mahindra Inc. (Member
FINRA/SIPC) and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak Mahindra Inc. (Member
FINRA/SIPC) at 369 Lexington Avenue 28th Floor NY NY 10017 USA (Tel:+1 212-600-8850).
Kotak Securities Limited and its non US affiliates may, to the extent permissible under applicable laws, have acted on or used this research to the extent that it relates
to non US issuers, prior to or immediately following its publication. This material should not be construed as an offer to sell or the solicitation of an offer to buy any
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to purchase or subscribe for any securities or solicitation of any investments or investment services. Accordingly, any brokerage and investment services including the
products and services described are not available to or intended for Canadian persons or US persons.”
Research Analyst has served as an officer, director or employee of subject company(ies): No
We or our associates may have received compensation from the subject company(ies) in the past 12 months.
We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past 12 months: No
We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past
12 months. We or our associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage
services from the subject company(ies) in the past 12 months. We or our associates may have received compensation or other benefits from the subject company(ies)
or third party in connection with the research report. Our associates may have financial interest in the subject company(ies).
Research Analyst or his/her relative's financial interest in the subject company(ies): No
Kotak Securities Limited has financial interest in the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report:
Cipla, ITC, L&T, Petronet LNG - Yes
Nature of financial interest is holding of equity shares or derivatives of the subject company.
Our associates may have actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of
publication of Research Report.
Research Analyst or his/her relatives has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately
preceding the date of publication of Research Report: No.

Kotak Securities – Private Client Group Please see the Disclosure/Disclaimer on the last page For Private Circulation 7
Market Strategy
March 2021

Kotak Securities Limited has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date
of publication of Research Report: No
Subject company(ies) may have been client during twelve months preceding the date of distribution of the research report.
"A graph of daily closing prices of securities is available at https://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and
http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company from the list on the browser and select the "three years" icon in the price
chart)."
Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051, Telephone
No.: +22 43360000, Fax No.: +22 67132430. Website: www.kotak.com/www.kotaksecurities.com. Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City
Road, A K Vaidya Marg, Malad (East), Mumbai 400097. Telephone No: 42856825. SEBI Registration No: INZ000200137 (Member ID: NSE-08081; BSE-673; MSE-1024;
MCX-56285; NCDEX-1262), AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. NSDL/CDSL: IN-DP-NSDL-23-97. Our research should not be
considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial
condition, suitability to risk return profile and the like and take professional advice before investing. Investments in securities market are subject to market risks, read
all the related documents carefully before investing. Derivatives are a sophisticated investment device. The investor is requested to take into consideration all the risk
factors before actually trading in derivative contracts. Compliance Officer Details: Mr. Manoj Agarwal. Call: 022 - 4285 8484, or Email: [email protected].
In case you require any clarification or have any concern, kindly write to us at below email ids:
 Level 1: For Trading related queries, contact our customer service at '[email protected]' and for demat account related queries contact us at
[email protected] or call us on: Toll free numbers 18002099191 / 1860 266 9191
 Level 2: If you do not receive a satisfactory response at Level 1 within 3 working days, you may write to us at [email protected] or call us on 022-42858445
and if you feel you are still unheard, write to our customer service HOD at [email protected] or call us on 022-42858208.
 Level 3: If you still have not received a satisfactory response at Level 2 within 3 working days, you may contact our Compliance Officer (Mr. Manoj Agarwal) at
[email protected] or call on 91- (022) 4285 8484.
 Level 4: If you have not received a satisfactory response at Level 3 within 7 working days, you may also approach Managing Director / CEO (Mr. Jaideep Hansraj)
at [email protected] or call on 91-(022) 4285 8301.

Kotak Securities – Private Client Group Please see the Disclosure/Disclaimer on the last page For Private Circulation 8