Bajaj Auto Ltd | Q4FY24 Result Update | Most of the positives factored-in, valuation expensive, maintain SELL! CMP: Rs 9,018 | Target Price: Rs 8,427 | Downside: -6.6% | Rating: SELL Revenue/EBITDA/PAT is higher than our estimates by ~4%/5%/4% respectively in Q4FY24. The beat was largely on the Gross margin side vs. our estimates (healthier by 81bps, received the benefits of soft commodity prices & mix), and better realization (3.6% higher than our estimates) was supportive for the margin. On the guidance, domestic volumes continue to remain healthy, new launches in ICE/EVs including 3Ws & CNG 2W will sustain outperformance in FY25 across segments. Mix, Scale, PLI benefits & operating leverage to improve EBITDA Margin going ahead. Exports improvement is on the cards as markets are gradually recovering. Total volume growth is anticipated at 12.4% CAGR FY24-FY26e to touch ~5.48mn units. Domestic/Exports volume is expected to grow by 11.5%/13.9% respectively. We expect Volumes/Revenue/EBITDA/PAT to grow at a CAGR ~12%/20%/23%/21% respectively FY24-FY26e. Volumes will be driven by continued strong momentum in 2W domestic, gradual recovery in exports, and this is followed by a ramp-up in Chetak and Triumph models. Based on our estimates, the stock is trading expensive at ~23x FY26e EPS of Rs 394. We maintain SELL rating with a revised fair value of Rs 8,427 per share as most of the near term triggers looks to be priced-in. Domestic 2W industry is on uptrend, momentum to sustain, Bajaj to outperform Domestic two-wheeler industry is in the cyclical recovery phase, anticipated to grow in low double-digit in FY25, before it cools-off to high single digit in FY26. As per our on-ground checks, inquiries/walk-ins are healthy, further lifted by wedding season in some parts of the country. Bajaj Auto should able to outperform the industry led by 1) good performance in the 125cc+ portfolio, 2) expectation of the success of upcoming CNG motorcycle which can disrupt the entry-level market, 3) the launch of the Pulsar 400cc is on cards, 4) pick-up in Triumph models, and 5) fast gaining share in e2W driven by network expansion & new model launches ahead. We have projected domestic two-wheeler volumes to report 12.0% CAGR FY24-FY26e to touch ~2.8mn units by FY26. It improved market share in the total 2W industry by 109bps YoY to 12.4% in FY24 due to superior show of the 125cc+ portfolio and excellent performance of Chetak (retail share improved from ~4% in FY23 to ~11% in FY24). Exports 2Ws should gradually get better, but still away from FY22 peak Currency depreciation, FX availability and high inflation remain key concerns specially in the African countries and South Asian region, while recovery is visible in other markets. However, we trust that the worst seems to be behind with the expectation of continued QoQ recovery on cards. YoY growth will be higher on a low base of last year. Bajaj Auto is expanding in newer markets viz. Brazil and Europe to diversify, de-risk & growth. This, along with Triumph’s exports pick-up will be supportive in growing 2W export volumes. We have factored in monthly ~145K 2W exports in FY25 vs. ~123K units in FY24, and will touch ~160K units in FY26, but still far away from its peak of ~183K units clocked in FY22. Electric vehicles, Three-wheelers, Triumph and Quadricycle Chetak is well accepted by customers, the company gained share in FY24 and anticipate to continue this trend driven by new launches/refreshers ahead along with expansion of touch points (from 200 to 600 showrooms in H1FY25). We have projected Chetak will be able to increase sales from 9.6K units per month in FY24 to 15K/20K per month in FY25/FY26 respectively. On three-wheelers, expect 3W industry to see mid-to-single digit growth on a high base, while Bajaj’s 3W should outperform led by eAutos expansion and CNG network increase. The company targets to replace e-ricks in North/East/Central India w

Swaraj Engines Ltd | Q4FY24 Result Update | Extensively outperformed industry, Accumulate! CMP: Rs 2,396 | Target Price: Rs 2,713 | Upside: 13.2% | Rating: ACCUMULATE Swaraj Engines Ltd.’s (SWE) FY24 ended on a strong note and Q4 numbers are much stronger vs. estimates, driven by some market share gains, and shift of business from Kirloskar may have played its part. This, along with softer input costs supported in getting margins better YoY. The company continued its good performance and reported 8th successive quarter of engine sales growth (YoY). Considering high-capacity utilization and future demand scenario, the company plans to increase the capacity from 150K units annually to 195K units through internal accruals. Recent on ground dealers check suggests that tractors are on the edge of picking-up driven by expectation of better monsoon ahead & subsidies. We anticipate a gradual possible shift of business from Kirloskar to SWE in the coming years. The company’s sales outperformance vs. the industry should continue going forward as ‘Swaraj’ is known among quality names in the industry & higher flow of business due to shift will keep giving additional volumes. Considering sound fundamentals, consistent dividends and possible increase in the business makes SWE a good investment avenue. We have increased multiple from 18x to 20x considering the shift from Kirloskar to Swaraj Engine has already started, maintained Accumulate rating with a revised fair value of Rs 2,713 per share (20x FY26e EPS of Rs 136). Q4FY24 result analysis­ – strong numbers, widely outperformed industry Q4FY24 revenue, EBITDA, and PAT exceeded our estimates by 25%, 42%, and 41%, respectively, driven by market share gains and business migration from Kirloskar. Despite industry degrowth of 18.1%, SWE sold 35,344 engines, marking a 1.4% YoY growth, maintaining its outperformance. However, realization dropped by 3.8% YoY to ~Rs 99K per unit due to metal price corrections. EBITDA Margin stood at 13.7%, surpassing our estimates by 165bps. This was primarily due to a Gross Margin improvement of around 108bps YoY to ~21.4%, driven by softer input costs. However, this was offset by an increase in Other Expenses by ~70bps YoY to around 4.9%. On-ground checks indicating change in the body language of tractor dealers Despite ongoing challenges in the tractor market on a YoY basis, such as lower crop production and gradual increases in tractor prices, recent indications show a more positive outlook. Tractor dealers have displayed improved confidence recently, likely due to expectations of above-normal monsoon this year. Consequently, earlier negative YoY growth guidance for the ongoing peak season has been revised to flat YoY growth. Anticipated growth in the tractor market will be fuelled by subsidies, with rural areas expected to see a resurgence if the 2024 rainfall is normal and well-distributed across regions. Stable crop prices and discounts, coupled with improving inventory levels at the start of this peak season (from Holi through June), further support this optimistic outlook. Proved its outperformance over the long period, confident of sustaining the same Domestic tractor industry posted 3.2% CAGR FY14-FY24 vs. Swaraj's engine sales of 6.5% CAGR & revenue CAGR of 8.9% for the same period. We anticipate the continued outperformance of Swaraj due to its recognized quality, supported by the observed shift in business from Kirloskar to Swaraj following Kirloskar's exit from Swaraj Engines, leading to increased volumes compared to the previous year. Outlook and Valuations Tweaked estimates marginally, however increased multiple from 18x to 20x considering the shift from Kirloskar to Swaraj Engine has already started, maintained Accumulate rating with a revised fair value of Rs 2,713 per share (20x FY26e EPS of Rs 136). Considering the promising future demand, Swaraj Engines plans to boost engine capacity from

Yatharth Hospital & Trauma Care Services Ltd | Initiating Coverage | Quality Healthcare At Affordable Price CMP: Rs 464 | Target Price: Rs 658 | Upside: 42% | Rating: BUY Yatharth hospital is a large private multi-speciality tertiary care hospital operating in the regions of North India. The group have a network of four hospitals currently in operation (Noida, Noida Extension, Greater Noida and Jhansi-Orchha) with a total bed capacity of 1405 beds as of Dec 2023, and in Feb 2024, it acquired a hospital in Faridabad which will be operationalised in Q1FY25.The company plans to double its bed capacity to 2800 beds in next five years. We like Yatharth due to 1) Good healthcare at affordable pricing 2) expanding its presence in under-penetrated markets such as Noida 3) focusing to improve its therapy offerings (Addition of radiation and oncology block) which will result in superior case mix thus improving the ARPOB and 4) Lean cost structure due to limited dependence on star doctors which will result in improvement in EBITDA margins. Also, the company has single large hospital model wherein they build a large 400-500 bed hospital in a single unit leading to operating leverage benefits. Going ahead, as the occupancy improves, the operating leverage would play out resulting in higher margin. We forecast EBITDA CAGR of 21% over FY24E-FY26E. We assign 20x EV/EBITDA on FY26E EBITDA and arrive at a target price of Rs 658 per share, translating into an upside of 42% and hence, we assign Buy rating on the stock. One of the largest players in Delhi NCR- Yatharth is one of the largest hospital chain in the corporate healthcare sector in Delhi NCR with 1100 beds, first being Max Healthcare with 3400 beds. The area's substantial per capita income of Rs. 243,100 and a low bed density of 2.7 per 1000 people underscore a significant shortage of hospital beds. Yatharth capitalizes on this scenario, leveraging its operational bed share and competitive pricing to secure and maintain its leadership in the competitive healthcare landscape. Headroom to grow in home market Yatharth holds a strong brand positioning in Noida. By leveraging its brand, it can achieve higher sales merely by improving its occupancy and expanding in current market only. Low bed density (2.7 per 1000 people) in its core Delhi-NCR market allows it to remain focused in this market. Unlike, other peers such as KIMS and Medanta, which are exploring into other market, Yatharth plans to expand in its home market only which reduces the execution risks. Affordable Pricing Model Yatharth have successfully implemented its affordable pricing model in the hospitals in Tier 1-2 markets, even though hospitals in different markets face different competitive landscapes and pricing pressures. Yatharth serve patients from different economic backgrounds and offer a different mix of specialty offerings. In Tier 1 cities, the prices across medical procedures are on average 10% to 20% lower than other private hospitals in Delhi NCR. This helps to attract high inpatient volume. Focusing on improving the case mix Company’s 33% of revenues comes from Internal medicine (lifestyle diseases like diabetes, cough, cold, fever, and dengue) which has a low ARPP. To improve the ARPOB, the company is adding radiation therapy and organ transplant in two of its hospital which would lead to higher ARPOB and ARPP for the company. Currently, the company has ARPOB of Rs. 26,538 in FY23, going forward we expect it to grow at a CAGR of 4.5% from FY23-FY26E on the back of improved case mix and price hike. Robust return ratios Yatharth has one of the best return ratios amongst its peers in the range of 20%-22%. Going ahead, these return ratios will be maintained as major capex is through brownfield only which means growth will be achieved without diluting the ROE. Valuation is in comfort zone Currently, the stock is trading at comforting valuation on FY26E EV/EBITDA of 13.8x. Yatharth's s

I G Petrochemicals Ltd. | Q3FY24 Result Update | Bottomed out PAN-Ox spreads, New capex gives visibility beyond FY26E, Upgrade to BUY CMP: Rs 461 | Target Price: Rs 580 | Upside: 26% | Rating: BUY The company reported a very weak operational performance. Revenue de-grew by ~6% YoY & ~3% QoQ. Gross margins contracted by steep 960bps YoY & 618bps QoQ to ~11.7% in Q3FY24. The decline in gross margins was because of sharp decline in spreads of PAN-Ox & MAN. Higher raw material prices of Ox & flat prices of PAN led to sharp contraction in spreads during the quarter. Management stated that despite weak spreads in Q3, current spreads are quoting at $100-110/ton because of upward movement in PAN prices. We feel the company has witnessed the worst ever PAN-Ox spreads & no new negative surprises is further expected. Recently, the company started commercialization on its PA5 capacity of 53,000 tonnes. This capacity addition would witness volume growth in FY25E. Inching up of non phthalic business revenue share to 15-25% of revenues by FY27E (vs ~8.5% of 9MFY24 revenue) might provide some stability in the margins which remains a key factor of company’s further expansion in downstream derivatives of non phthalic businesses. The company has announced new leg of capacity expansion for addition of greenfield expansion of advance plasticizers of 1 lakh tons capacity with a capex of Rs1.65bn (excluding GST). The company has also stated its intent to venture into new businesses like green chemicals, ethanol derivatives, CBG etc however specific details has not been shared. We feel most negatives have been factored in PAN-Ox spreads, new leg of capex gives visibility beyond FY26E, although demand uncertainty & declining MAN realization still remain a cause of concern but we feel it’s mostly transitory in nature. The concerns might subside in a couple of quarter’s post which we see a blue sky scenario, hence, we upgrade to BUY rating on the stock. New brownfield capacity commercialization indicates strong volume growth in FY25E, next leg of new capex announced • Since, the existing capacity of PAN was operating at peak utilization levels, hence, the company resorted for another brownfield expansion of 53,000 TPA at a capex of Rs3.5bn in 2022 which has started commercialization. We anticipate at peak utilization levels this will add Rs4.5-5bn to the topline. • The company has also announced new leg of capacity expansion for setting up new greenfield capacity expansion in plasticizers of 1 lakh tonnes with a capex Rs1.65bn expected to complete in next 15-18 months. At peak utilization, expect Rs5-6bn addition to topline. Sharp contraction in gross margins on YoY & QoQ basis mainly due to decline in PAN-Ox spreads, might remain at the lower end unless material uptick in demand is witnessed • The company reported steep gross margin contraction of 960bps YoY & 618bps QoQ to 11.7% in Q3FY24. The sharp margin contraction was due to decline in the spreads of PAN-Ox. • Despite weakness in spreads in quarter gone by, current month spreads are quoting at $100-100/ton which indicates swift revival compared with Q3. We anticipate that spreads might remain in the same range unless material uptick in demand is witnessed. Factors like inventory re-stocking, improvement in pigments demand & robust exports market might have positive effect on the spreads, which would largely be visible from Q1FY25E. • Management believe that PAN-OX spreads average between $150-250/ton in the long term, however it remains volatile & depends on demand, supply & other factors. Valuation • We roll forward our valuations & value the stock on March 26E earnings. Currently, the stock is trading at March 26E P/E of ~8.7x. We upgrade our forward multiple to 11x (earlier 9x) because of new capex announcement, most negatives factored in PAN-Ox spreads & stronger visibility of volume growth beyond FY26E also. We arrive at a target price of Rs 580, thereby, which offers

Buy-rated Rajesh Exports [RJEX_IN; Rs. 89 billion and US$1.1 billion market cap] reported weak results, below our expectations, both in terms of revenues as well as profits, for the fiscal third quarter [ended December]. For the third quarter, revenues were down –31% YoY, but were up +72% sequentially QoQ. The steep revenue decline led to negative operating leverage, producing slightly positive earnings. Volatility in gold prices, global macro uncertainty, and timing of orders and shipments have led to variability of near-term earnings, in our opinion. More details on the quarter in our report.

Narayana Hrudayalaya Ltd | Q3FY24 Result Update | India business to drive strong growth CMP: Rs 1,366 | Target Price: Rs 1,669 | Upside: 22% | Rating: BUY Narayana Hrudayalaya (NARH) missed our estimates due to weak revenue in the North and West India business accompanied by seasonally weak quarter. Jaipur had the weakest revenue in the quarter affected due to change in govt scheme business and price negotiations, which is expected to normalize going forward. Cayman business registered revenue growth of 5.9% YoY driven improvement in footfalls. The growth prospects for the India business appear promising, thanks to anticipated advancements in case mix, enhanced throughput, and a reduction in ALOS. We expect minimal greenfield Capex, excluding the Kolkata and Bangalore project, the Indian business is poised to raise EBITDA margins to 25%-26% by FY25, surpassing the current 23%. The overall group margin is expected to continue its upward trend. Going ahead, we anticipate growth driven by a structural rebound in footfalls at flagship hospitals, where capacity optimizations are underway with improvement in case mix. We expect EBITDA CAGR of 24% from FY24E to FY26E driven by cost optimizations initiatives and improvement in occupancy. Due to strong performance in the India business, along with a sector re-rating, the EV/EBITDA multiple for the India segment is being revised to 22x, up from the previous 20x, aligning it with industry peers. In the Cayman Islands, the operational oncology unit has initiated patient treatments, and an additional block is scheduled to be introduced in Q1FY25, contributing to sustained revenue growth in the future. On an overall basis, the growth prospects of Narayana look good. We maintain our BUY view with a target price of 1,669 per share. Muted performance affected due to seasonality • In Q3FY24, India business reported revenue growth of 6.9% YoY but has seen decline of 8.9% QoQ to Rs. 9,590 Mn. The sequential decline was mainly due to underperformance of Gurugram and Jaipur hospitals accompanied with festive season. • ARPOB for India business witnessed growth of 10.6% YoY and 5.2% QoQ to Rs. 38,630 with occupancy level of 52%. However, we believe occupancy was flat on YoY basis to 52% in Q3FY24. • Cayman business recorded revenue of 5.9% YoY but has seen decline of 3.1% QoQ to Rs. 2,446 Mn. This was mainly due to 25% decline in ARPP. • ARPP for IP in Cayman was USD 30,700 in Q3FY24 which has witnessed decrease of 25% YoY. Outlook and Valuation: Anticipating positive performance in both Cayman and India operations moving forward, we expect improvements in patient mix and case mix, leading to a rise in EBITDA. The turnaround of previously loss-making facilities and the maturation of recently established hospitals are expected to be key drivers of EBITDA growth. Additionally, a higher surgical mix and enhancements in payor mix are poised to contribute further to overall growth. Due to healthy return ratios as compared to peers and steady growth in India business, we value India business at 22x and Cayman at 14x (EV/EBITDA with respect to FY26E EBITDA to arrive at a target price of Rs 1,669. Buy.

Lumax Auto Technologies Ltd | Q3FY24 Result Update | Impressive operational performance & robust guidance, Strong BUY! CMP: Rs 460 | Target Price: Rs 578 | Upside: 25.7% | Rating: BUY Lumax Auto Technologies Ltd (LATL) posted highest Consolidated Revenue/EBITDA/PAT in Q3FY24 driven by exceptional performance at IAC India and Standalone business. The robust outlook given: 1) Consolidated EBITDA Margin will further improve & IAC’s 18% margin is sustainable, 2) Total order book of Rs 11bn, faster order execution for new JVs to start from next fiscal, 3) Lower effective tax rate of 25-26%, 4) Consolidated revenue to grow by 20%, 5) Standalone to grow at double-digit with further improvement in margins. 6) Generating strong CFs, the debt will reduce further. Our belief is strong that LATL is a robust re-rating candidate, supported by its collaboration with eight well-established global partners, a track record of well-executed past financial performance, plans for debt reduction, and a reputation for clean management. In our view, the eight international partners represent hidden gems, providing strong support to LATL with their robust technical capabilities. Some of these partners have proven to be valuable assets, evident in their impressive past performance and business wins. Additionally, the five emerging subsidiaries are poised for significant growth. We maintain BUY rating with a revised fair value of Rs 578 per share (maintained 16x FY26e EPS). Upgraded EPS led by strong execution in Q3, inclusion of Lumax Ancillary Ltd and robust guidance ahead. Strongly recommend BUY! Q3FY24 result analysis – Impressive operational performance! • LATL reported highest Consolidated Revenue/EBITDA/PAT in Q3FY24. • Revenue is lower than our estimates by ~6% to Rs 7,325mn, however EBITDA/PAT numbers surpassed expectations by 7.1%/7.5% respectively. • This is driven by superior improvement in the EBITDA Margin at 14.5% - the highest ever reported in any quarter. • Consolidated EBITDA Margin exceeded our projection by 181bps majorly led by exceptional performance at IAC India and Standalone business. Both the business segments posted its best EBITDA Margin. • Standalone PAT was higher than our estimates by ~5% to Rs 180mn as it showcased on of the best EBITDA Margin at ~9.4%. • Margin improvement was largely because Bajaj/HMSI & other key customers posted high double-digit growth & increase in the higher margin Aftermarket. Key growth drivers ahead • IAC India – the acquisition strengthened LATL’s plastics business, existing clients along with expected new business from anchor clients to support growth, joint sourcing & scale to improve margins. In talks with TaMo for business. • Lumax Mannoh – gradual shifting to high margin automatic gear shifters & further export opportunities from the JV partner bodes well, • Lumax Cornaglia – anchor client TaMo outperforming, along with other clients, coupled with localization, & the introduction of Plastic fuel product to drive business, • Standalone – increasing contribution of higher margin aftermarket, LED and the anticipated rebound in Bajaj’s export to push growth ahead, • Emerging subsidiaries – With a robust order book featuring promising products like Sensors, Telematics, Antennas, among others., the emerging subsidiaries are poised for higher growth in the upcoming years starting FY25. They currently hold strong orders amounting to ~Rs 3bn+, and the potential market size is estimated to be around Rs 93bn. The next partnership is anticipated to focus on pure-play EV components, in our view. Expect higher growth in financials • Financials set to fly higher with the expected Adj. EPS growth of ~35% CAGR FY23-FY26e driven by high margin IAC India & Automatic gear shifters, a rising contribution from emerging subsidiaries, reinforced by the Aftermarket, a rebound in key clients' business momentum, and a reduction in finance costs due to debt repayment. • We have inc