Valuation and Recommendation: With a long run-way for growth and visible ROE stabilization at ~18% + levels in the medium term on the back of - strong AUM CAGR of 30% over FY21-25E and lower credit costs, we believe AU's valuations will gravitate towards that of leading banks and NBFCs demonstrating similar ROE, growth and asset quality profile. We value AU at PE/G of 1x at 30x Sep 2022 EPS of ~Rs. 37 at Rs. 1,100. At our target price of Rs. 1,100, AU would trade at an implied P/BV of 5.0x Sep 2022.

Valuations and Recommendations The stock has outperformed the broader indices backed by its strong and consistent financial performance. Given the resilience shown by the company in current unprecedentent times, we remain positive on the future prospects of the company for coming period. We are projecting 23% CAGR in sales between FY20-FY22E however expects EBITDA to grow faster at 31% during the same period, led by improvement in EBITDA margins to 15% in FY22E from 13.2% in FY20. The stock is currently trading at 20.7x on our FY22E earnings, which is still inexpensive as compared to other FMCG players.

Investment Picks for Diwali 2020

Valuation and Recommendation: Between FY18-20, Gland Pharma's revenues have grown at CAGR of 28% while Q1FY21's revenue grew by 31%. The company is engaged in complex products hence it has healthy profitability. Due to no debt and high cash, the company has strong PAT margins at 29.4% in FY20 which has improved from 19.8% in FY18. We believe the company is able to maintain CAGR of 25% for medium term with strong profitability. Though, Q1FY21 margins looks on the higher side, we believe EBITDA margins in the range of 35-38% are sustainable. The company intends to do capex with the IPO and cash on books, which can temporarily affect the return rations in near term however the long-term trajectory remains positive The issue price commands P/E of 31.7x FY20 and 19.5x Q1FY21 annualized earnings at the upper price of band of Rs 1490-1500, which is at upper end of Industry. However, going forward the higher revenue growth, improving profitability would make it a better choice among peers. We recommend Subscribe on the issue for long term gains.

The COVID cases at world level continue to hit new high along with US. Various European countries are seeing a second wave which is much higher than the first wave and countries like Germany, France, Italy and UK have already announced lockdowns. Though lock downs are announced with some form of support by government, it will still negatively impact confidence and spending of people. Currently. there are 10 vaccines in Phase 3 trials and we may hear positive news from few of them in next 1-3 months. Though, the implementation process of the vaccine may be longer but it will create positive sentiment among people. We had seen economies bouncing back in different parts of world with the support of stimulus by Governments and Central banks but to come back on sturdy growth path, we need to have resolution of problem which is still in process. We expect Market in November series would be volatile and events like this could create excessive volatility. Considering increasing lockdowns in some parts of the world and higher valuation in Indian market, the chances of decline in the market have increased. We believe it is difficult to give any range in such type of market conditions and advise to be cautious at current point of time.

GLOBAL METAL DYNAMICS Ferrous Chinese steel (HRC) export price sustain upward trajectory in September 2020 to ~US$ 517/tonne. (up by 0.4% mom),However the prices are down 8.8% on FY20YTD (April-Oct'20) basis. Chinese crude steel production declined by 2.4%mom to 92.6mnt in September'20, the production for YTD (April-Sep 2020) stood at 550 mn tonnes up 12% YoY. The production surge coupled with rising demand from housing and infrastructure activity supported by raft of economic stimulus measures provided by the Chinese government led to an improvement in Chinese steel output on yearly basis. China recorded iron ore production at 73.4 mnt in Sep'20, down 4.5% MoM, The output for FY20 (April-Sep) recorded ~3% rise to 450mnt. The output on YTD basis picked up amid high Chinese demand. Iron ore prices (CFR China 63% Fe) plunged by 3% on mom basis to US$120/tonne as buying interest weakend among steel players. Australian coking coal (HCC Premium) fell by 7% MoM to $119/tonne as demand sentiments weakened amid growing panic over the impact of possible coal import restrictions in china, the prices are down by 40% on FY20YTD basis. India crude steel production up by 2.6% on mom basis to 8.6mnt on improved capacity utilization and pick up in downstream demand from construction, auto & white goods sector, however the production is down by 3.8% on yearly premises The production for YTD (April-September 2020) stood at 39mnt down by 27% YoY. Domestic steel players continue to increase the steel prices given the pick-up in domestic demand and firm trend in international...

Equitas has successfully reduced the microfinance mix in its loan book from 54% in FY16 to 23% today. Its diversified loan book, adequate capital, experienced management and conservative approach to minimize risk, provides Equitas a long runway for profitable growth. Equitas' transition to a SFB during FY16-18 resulted in lower AUM growth (16% CAGR) and higher opex growth (57% CAGR), translating to lower return ratios. However, post the conversion, Equitas stepped up its loan growth to 37% CAGR over FY18-20, while opex growth remained subdued at 16% CAGR. This resulted in cost/income declining from 80%in FY18 to 66% in FY20 and a simultaneous increase in ROE from ~2% in FY18 to ~9% in FY20. We believe Equitas SFB can deliver top quartile ROE of 15%+ in the long term (by FY23E) driven by a decline in cost/Income to below 60% from 66% in FY20 and normalization of credit costs to ~1.5% from 1.9% in FY20. Equitas SFB is available at a 30% discount compared to listed peers. We recommend to Subscribe for long term'.

Saw correction in September month after a 5 long months Correction remain short lived on account of expectation of additional stimulus Liquidity will keep on supporting market Ultimate goal of full revival of economy in US is still away Covid cases are still at higher level and Europe is seeing second wave Vaccine is expected in near term but implementation can take time India has seen recovery ahead of expectation despite higher Covid cases Q2 may see Sales decline of 6% and Q3 likely to be flattish yoy Recovery more in favour of bigger players Valuation at 10 Year High Market likely to be range bound in near term Need to be careful in small cap in near term

Opportunity for healthy risk adjusted returns in a stable business ?India's first infrastructure investment trust in the power sector, IndiGrid provides investors with an opportunity to invest directly in operating power transmission assets characterized by steady cash flows due to absence of traffic risks / operating risks, minimal counter party risk and lower operating expenses. ?IndiGrid will be the beneficiary of rise in demand for transmission capacity due to rising share of renewable energy, regional power demand-supply mismatch and upgradation of existing transmission lines. ?IndiGrid plans to become a Rs. 30,000 Cr AUM trust over next two years with aggressive plans to acquire assets (from Rs. 13,600 Cr AUM today). ?Strong business fundamentals and a 530 bps spread between 10 year G-secs (6.0%) and IndiGrid (11.3%; AAA rated) is attractive. Investment Rationale Steady cash flow generating business model with minimal counter-party risk KKR & GIC reinforce IndiGrid platform's credibility; KKR's induction as co-sponsor to improve robustness of corporate governance Strong focus on growth via acquisitions No negative impact of Covid-19 Attractive risk-adjusted returns Investor return in IndiGrid which is a quasi-equity instrument will be a combination of quarterly dividend and the unit's price appreciation. The IndiGrid's beta against NSE 500 is at just 0.1 as against 0.9 for both, the Power & Utilities Index and the Infra Index. We are confident of IndiGrid's business model, which is backed by predictable cash flows and offers growth visibility. IndiGrid InvIT is AAA rated and offers 11.3% IRR, trading at a spread of ~530 bps to the 10 year...

GLOBAL METAL DYNAMICS Ferrous Chinese steel (HRC) export price sustained the price reversal in September 2020 and further increased 2.6% MoM to ~US$ 518/tonne. However, prices are down 11.6% on FY20YTD( April-Sep'20) basis. Chinese crude steel production improved by 1.6%mom to 94.8mnt in august '20, the production for YTD (April-August 2020) stood at 457 mn tonnes up 5% YoY. The production surge coupled with rising demand from housing and infrastructure activity supported by raft of economic stimulus measures provided by the Chinese government led to an improvement in Chinese steel output China recorded iron ore production at 77 mnt in Aug'20, up 5.4% MoM, The output for FY20 (April-Aug) recorded ~4.6% rise to 377mnt. Iron ore prices (CFR China 63% Fe) improved by 3.3% mom to US$124/tonne led by potential supply concern from the foreign miner. Australian coking coal prices rebounded to $124/tonne (up by 16.5% mom) with positive demand outlook in both China and India, however the prices are down by 42% on FY20YTD basis. India crude steel production up by 12.8% MoM to 8.4mnt with Pick up in downstream demand from construction, auto & white goods sector. The production for YTD (April-August 2020) stood at 31mnt down by 32% YoY. Domestic steel players continue to increase the steel prices given the pick-up in domestic demand and firm trend in international prices. HRC and Rebar price increased by 2.3% and 2.8% MoM respectively to Rs41,017/tonne and Rs38,800/tonne resp. in September 2020. Domestic iron ore prices in India remain supported on the back of tight availability,...

We witnessed a correction in Equity market after 6 months of long rally. Since, the rally was long and consistent we saw that the correction was also steep of around 8.5% from peak in Nifty. We saw correction across the world and across asset classes during last one month. The correction was also led by the appreciation of dollar against other major currencies indicating risk aversion. Economy, which had started improving from total lockdown, has reached to a level from where it is becoming difficult to further improve in the absence of solution for increasing COVID cases, fear among consumer to freely come out, reduction in spending power and intermittent lockdowns in different parts of the country. Now, the country needs a solution and a stimulus to kick start the growth in economy. As the possibility of approval for one of the Vaccines for COVID is close, we may see positive sentiment on account of the same in near term. This along with festive demand in India and some type of stimulus can help further improvement in economy. US market will also look at development on Presidential Election where the Democrat leader Joe Biden is leading as compared to Current President, Trump. Joe Biden has indicated in his Election manifesto that he will reverse the corporate tax cut bought in by Trump in 2017. This may keep the sentiment low in the Equity market in US. Till the positive news on Vaccine comes, market may continue to remain side ways. We expect NIFTY to remain in...

MDS commands a monopoly status in high value segments like submarines and destroyers (just one competitor in destroyers). Also, until now MDS has been the only player capable of manufacturing large ships with Garden Reach Shipbuilders having recently emerged in this segment. The positive factors aiding healthy prospects for MDS include indigenization push by GoI, a wide product portfolio, robust order book to sales of 10.9x, rising share of the fast growing shipbuilding business (70% vs. 33% in FY17), long credible history of proven development capabilities, strong balance sheet and healthy return ratios. MDS is being offered at an attractive valuation of 4.5x FY20 EPS vs. 9-10x commanded by other listed defense PSUs having similar financial metrics. Thus we recommend subscribe' to the issue.

Increase in market share by 2x in last five years, strong track record of introducing new technological products, proactive management and brand equity developed over last 2 decades; positions Angel well for transitioning into one of the top discount brokers in India with decent profitability in the longer term. Upon combining the financials of IIFL Securities and 5 Paisa, we observe that this entity shares identical characteristics to Angel with respect to number/market share of active clients, revenue and return on equity. However Angel's valuations compared to the hypothetical entity of IIFL + 5 Paisa is higher based on FY20 earnings. Also we believe Q1FY21 has benefits of bunching up of (i) work from home due to COVID situation & (ii) broad based buoyancy in markets. The sustenance of these dual benefits into the future is uncertain and hence we believe it would be premature to annualize Q1FY21 earnings. We thus rate the issue as NEUTRAL.

Between FY18-20 Chemcon's revenues have grown at CAGR of 29% while PAT grew at higher rate of 36% CAGR. The management believes the company can grow at 15-18% CAGR for next 2-3 years. EBITDA/ton is expected to remain steady although volumes are likely to improve on the back of (a) strong demand outlook (b) expanded capacity. The issue price commands P/E of 25.5x (FY20) at the upper price of band of Rs 338-340, which is well within the industry range. We recommend Subscribe on the issue for listing gains.

Over the past 5 years, CAMS has strengthened its market share from 61% in March 2015 to 70% in July 2020, based on AAUM serviced. With the MF RTA industry estimated grow at a CAGR of 15% over FY20-25E, we believe CAMS can also deliver similar growth going forward. CAMS provides investors a better investment option over AMCs as (i) CAMS operates in a two player duopoly market where despite being the larger player(70% market share), it is further gaining market share consistently and (ii) being exposed to 9 of the top 15 MFs and 4 of the top 5 MFs substantially reduces the risk of market share loss by any single MF which will always be the threat in case of a standalone MF company. We recommend SUBSCRIBE to the issue from a long term perspective.

Over FY18 -20, the company has grown at a CAGR of 37.6% with organic and inorganic way and EBITDA has grown at a CAGR of 15%. Acquisition of new services and entering new geographies helps the company to be upgraded with the current requirement in the market which in turn helps the company to acquire new larger accounts. With cross sell and up sell opportunities available to its acquired clients, will help the company to grow ahead. ROCE of the company have improved to 23.6% in FY20 and ROE stands at 25.3% in FY20.PAT for FY20 stands at Rs 68.3cr. At the given upper price band of issue of Rs 350, Route Mobile is offered at PE of 19x Q1FY21 annualised EPS which is attractive. We recommend subscribing to the issue.

Over FY18-20, the company sales has grown at a CAGR of 22.8% . Going ahead, being into the digital space which is expected to grow at a CAGR of 20% over FY18-FY25, we feel Happiest Mind can sustain higher growth. Other than this, company peers revenue are growing at a Higher CAGR of 26% to 36%. With this, we feel, Happiest Minds has tremendous scope for improvement .Acquisition of new larger accounts and with cross sell and up sell opportunities available to its acquired clients , will help the company to grow ahead. Ebitda margin for FY20 was at 13.9% (expansion of 461bps over FY19) whereas Q4FY20 margin was much ahead of average margin in FY20. In Q1FY20 Ebitda margins further improved to 21.4% which is partly due to rupee appreciation, lower lease rentals etc partly also because of leveraging of SGA cost. Management indicated that core higher EBITDA margin is sustainable. ROCE of the company have improved to 23.7% in FY20 and ROE stands at 31.2% in FY20As per our rough estimates, at the given upper price band of issue of Rs 166, Happiest Mind is offered at PE of 17x FY22E which is attractive. We recommend subscribing to the issue.

With volumes target maintained at 32mnt for FY21, considering a revival in 2HFY21 and continuous increase in the prices of iron ore by NMDC, we expect improvement in revenue from Q2FY20. View the demerger of Nagarnar steel plant positive that will enable NMDC to focus on its core business. We have a buy rating on the stock with a target price of Rs130

MCL has a diversified product base and strong clientele. The management has taken bold steps to improve profitability by getting rid of the loss making German business, undertaking cost rationalization measures and improving business mix with focus on high yield products. We expect MCL's top line to grow at 1.5x the automobile industry led by (i) organic and inorganic expansion, (ii) strong relationships with OEMs, (iii) opportunities in sensors, ABS and wiring harness on the back of BS6 implementation and (iv) focus on exports. At CMP, MCL is trading at a PE of 13.0x FY22E EPS. We maintain Buy' on the stock with a target of Rs. 103 (at 18x FY22E).

We saw a V' shaped recovery in global equity markets in the last 5 months supported by aggressive liquidity infusion from various governments and central banks. In US equity markets, S&P 500 made an all-time high last month. Back in India, though the Nifty is still away by 6% from its pre-COVID high, the BSE Small Cap Index has already crossed its pre-COVID high. Economy is gradually recovering albeit with increasing COVID cases. People are gradually getting used to working in the current environment. The e-way bill generations are reaching near pre COVID levels. Also 2 Wheeler companies and the largest Passenger Vehicle company (Maruti) is expected to report YoY growth in August monthly sales. The outcome of Phase III trial of various COVID Vaccines are nearing and market sentiment may continue to remain positive approaching this event. Even the Financial sector which was underperforming the entire market has now started performing with the moratorium period getting over and most of the large banks having raised capital to absorb any higher NPA. Though valuation has already reached pre-COVID levels on the basis of FY22 earnings; and that too assuming FY22 as a normal year without any impact of COVID or any other economic disruption which has happened because of COVID; the positive sentiment may continue in the month of September.