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For Private Circulation only NameCMP*PER (x)RoE (%)PriceUpside (Rs)FY15FY16EFY17EFY15FY16EFY17Etarget (Rs)#(%)Aditya Birla Nuvo1,82348.944.040.66.87.07.1Ashok Leyland7590.723.915.74.916.221.2 Zee Entertainment36435.732.227.619.519.320.2 Absolute returns (Top Picks vs benchmark indices) SharekhanSensexNiftyCNX (Top Picks)Mid-capCY201512.11.92.15.2CY201463.629.930.955.1CY201312.48.56.4-5.6CY201235.126.229.036.0CY2011-20.5-21.2-21.7-25.0CY201016.811.512.911.5 2 July 2015Sharekhan sharekhan top picks NameCMPPER (x)RoE (%)PriceUpside (Rs)FY15FY16EFY17EFY15FY16EFY17Etarget (Rs)(%) Aditya Birla Nuvo 1,82348.944.040.66.87.07.12,15018Aditya Birla Nuvo (ABN), a conglomerate holding company, is present in different businesses ranging from lifestyle,We believe that owing to the holding company structure and composition, the underlying businesses are tradingwill pave the way for growth. Also, the company’s efforts to implement the necessary restructuring steps toenhance the shareholders’ value in this quality conglomerate business. Thus, we see scope for further re-rating ofthe stock as each of its businesses gets valued optimally, does not suffer holding structure and has a diversifiedbusiness profile (no holding discount). We, therefore, retain our positive stance on the stock and maintain our Buy Ashok Leyland 7590.723.915.74.916.221.2**-the segment had halved over FY2012-14. With the pick-up in the economy a sharp recovery is expected in theALL entered the light CV (LCV) segment with the launch of the Dost in joint venture (JV) with Nissan. The JV hasadditionally launched the Partner LCV and Stile van. Going forward, we expect ALL to gain a foothold in the LCVpresence in exports and continues to expand in newer geographies. The diesel genset business is also showingsigns of a recovery after a tepid performance in FY2013-14. Additionally, ALL’s defence business is expected to geta leg-up due to the government’s focus on indigenous manufacture of defence products and FDI in the sector.ALL’s operating profit margin (OPM) has recovered from the lows on the back of a reduction in discounts and pricehikes taken by the company. Its margins are expected to expand further, given the operating leverage. ALL hasraised Rs660 crore via a qualified institutional placement and sold non-core assets to pare its debts. With no 4 July 2015Sharekhan sharekhan top picks NameCMPPER (x)RoE (%)PriceUpside (Rs)FY15FY16EFY17EFY15FY16EFY17Etarget (Rs)(%) Century Plyboards 19729.322.617.140.836.233.729048overall market share of around 25% of the organised plyboard market and an estimated size of Rs4,500-4,800crore annually. The organised plywood and laminate segment is growing at healthy double-digit growth rates dueto an improving demand environment and a shift towards branded products. Century with its strong brand equity,Myanmar is well poised to cash in on the robust growth opportunity.The introduction of the Goods and Services Tax (GST) would create a level playing field for the organised players.The unorganised players are currently out of the tax net and thus enjoy lower costs by evading taxes. After theintroduction of GST, the tax advantage enjoyed by the unorganised players would diminish sharply and the marketshare of the organised players is likely increase significantly, benefiting Century.We believe Century with its top-of-the-mind brand recall is well positioned to ride the economic revival-drivenrecovery in demand and increase its market dominance in the plywood and laminate segments. A robust revenuegrowth and margin expansion would enable the company to deliver a strong growth ahead. We expect it to posta 31.3% earnings CAGR over FY2015- 17. The implementation of GST would provide a fillip to the revenue and Gateway Distriparks 35520.618.916.021.521.723.944525environment for the logistic companies. Gateway Distriparks being a major player in the container freight stationWe continue to have faith in the company’s long-term growth story based on the expansion of each of its threebusiness segments, ie CFS, rail transportation and cold storage infrastructure segments. The coming on stream ofoperations. Also, the expected turnaround in the global trade should have a positive impact on the CFS operations.Given the improvement in the profitability led by lower non-performing asset (NPA) provisions, a healthy growth 6 July 2015Sharekhan sharekhan top picks NameCMPPER (x)RoE (%)PriceUpside (Rs)FY15FY16EFY17EFY15FY16EFY17Etarget (Rs)(%) Maruti Suzuki 4,03432.823.417.616.620.122.54,40010Maruti Suzuki India Ltd (MSIL) is the market leader in the domestic passenger vehicle (PV) industry. In FY2015, asThe company has further strengthened its sales and service network. Additionally, the drive undertaken by itsof rising competitive intensity; this reaffirms the resilience of MSIL’s positioning and business model.The recent launches of Celerio and Alto K10 with the new automatic manual transmission have enthused themarket and the company plans to offer the same in other models too. MSIL has a pipeline of new launches over theWe expect customer sentiment to improve on the back of a strong government at the centre. Additionally the PVdue to its high market share in the entry level segment. The recent depreciation of the Japanese Yen is expectedto boost profitability. Reliance Industries 12.613.310.810.89.410.5Reliance Industries Ltd (RIL) has a strong presence in the refining, petrochemical and upstream explorationbusinesses. The refining division of the company is the highest contributor to its earnings and is operating efficientlyplant to refine more of heavier crude. However, the gas production from the Krishna-Godavari-D6 (KG-D6) fieldhas fallen significantly in the last two years. With the government approval for additional capex in its allocatedvolume from shale gas assets is playing positively for the company. Moreover, the upcoming incremental capacitiesdownstream businesses are on the driving seat and contributing the lion’s share of the profitability and cash flow.healthy improvement in the GRM of RIL too. The stock is available at attractive valuation considering the size,strong balance sheet and cash flow generating ability of the company.