VIP IndustriesLtd. Change in Estimates: Rs. Mn FY19E Chg (%) FY20E Chg (%) Sales 17,916 4% 21,129 6% EBITDA 2,572-3% 3,109-1% EPS % 14.

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1 VIP IndustriesLtd. Absolute : LONG Relative : BENCHMARK 2QFY19 Result: Estimate(), TP(), Rating() Regular Coverage 17% ATR in 14months Volume growth momentum continues, demand outlook stays robust upgrade to LONG Luggage 2018EquirusAll rights reserved Rating Information Price (Rs) 469 Target Price (Rs) 558 Target Date Target Set On Implied yrs of growth (DCF) 20 Fair Value (DCF) 354 Fair Value (DDM) 176 Ind Benchmark Model Portfolio Position Stock Information 31th Dec'19 15th Nov'19 SPBSMIP No Market Cap (RsMn) 66,271 Free Float (%) 47.5 % 52 Wk H/L (Rs) 647/287.1 Avg Daily Volume (1yr) 681,379 Avg Daily Value (RsMn) 280 Equity Cap (RsMn) 283 Face Value (Rs) 2 Bloomberg Code VIP IN Ownership Recent 3M 12M Promoters % 1.0% DII 7.3% -1.2% -8.0% FII 12.1% 1.2% 6. Public 27.1% 0.0% 0. Price % 1M 3M 12M Absolute 6.2% -19.1% 53.2% Vs Industry 1.9% -11.4% 61.4% Samsonite (USD) -6.2% -18.9% -30.4% TUMI Inc (USD) NA NA NA Standalone Quarterly EPS forecast Rs/Share 1Q 2Q 3Q 4Q EPS (18A) EPS (19E) VIP s 2Q revenues grew 30% yoy to ~Rs 4.02bn, 10% above EE, with strong domestic volume growth (+3 yoy). Consolidated EBIDTA jumped 39% yoy to Rs 511mn, in line with EE, while EBIDTA margins expanded 87bps to 12.7% (-130bps vs. EE) on strong sales growth partly offset by higher other expenses (incl. forex loss). The key highlight of 2QFY19 was strong 3 volume growth. We raise FY19/FY20 sales estimates by 4%/6% to factor in the 2Q beat and a robust demand outlook. We expect pressure on gross margins from currency headwinds, a crude price rally and import duty hikes; we accordingly pare FY19/FY20 EBITDA estimates by 3%/ 1% despite raising revenue estimates. Upgrade to LONG (from ADD) post the recent price correction, with a Dec 19 TP of Rs 558 (Rs 555 earlier) at 40x TTM EPS of Rs 14. Strong volume growth momentum continues across brands: Sales grew 30% yoy to Rs 4.02bn, 10% higher than EE driven by domestic volume growth of 3. Healthy growth was seen across brands and trade channels, with institutional sales witnessing strong growth. Aristocrat and Alfa continued to deliver solid growth led by a shift from unbranded to branded luggage and a product-portfolio revamp undertaken by the company. SKYBAGS continued to see strong growth driven by backpack sales which would now account for a meaningful proportion of revenues. Caprese sales remained encouraging driven by an increase in distribution and sales from the e-commerce channel. We raise our FY19E/FY20E sales estimates by 4%/6% to factor in an improved demand scenario. We also feel VIP s recent initiatives to capture the shift in consumer preference from the unorganized to organized segment and increasing focus on institutional sales will augur well for its brands in the long term. Gross margins marginally above expectation; higher other expenses hurt margins: Consolidated 2Q gross margins stood at 49.7% (up 149bps yoy, down 63bps qoq and 38bps above EE). EBIDTAM expanded 87bps yoy to 12.7%, 130bps below EE owing to higher-than-expected other expenses which jumped 37% yoy to Rs 1bn due to a rise in freight costs and forex losses of Rs 50mn-Rs 70mn. Adjusting for forex losses, EBITDAM would have been 14% for the quarter (in line with EE). Given the recent INR depreciation and higher RM prices, we build in consolidated gross margins of 48% for 2HFY19 and FY20 (2QFY19: 49.7%). We believe any further adverse movement in currency or raw material prices could impact gross margins. Valuation & view: VIP is likely to record strong volume growth in the luggage space, and growth in brands like VIP, Caprese and SKYBAGS would help safeguard gross margins to some extent. Given the strong volume growth momentum backed by recent correction in the stock price, we upgrade VIP to LONG (from ADD) with a Dec 19 TP of Rs 558 (Rs 555 earlier) set at a 40x TTM EPS of Rs 14. Key risks: Increasing raw material costs, lower demand and currency volatility. Change in Estimates: Rs. Mn FY19E Chg (%) FY20E Chg (%) Sales 17,916 4% 21,129 6% EBITDA 2,572-3% 3,109-1% EPS % % Consolidated Financials Rs. Mn YE Mar FY18A FY19E FY20E FY21E Sales 14,096 17,916 21,129 24,946 EBITDA 1,934 2,572 3,109 3,794 Depreciation Interest Expense Other Income Reported PAT 1,251 1,698 2,064 2,525 Recurring PAT 1,268 1,698 2,064 2,525 Total Equity 4,891 5,738 6,781 8,115 Gross Debt Cash 952 1,106 1,547 2,117 Rs Per Share FY18A FY19E FY20E FY21E Earnings Book Value Dividends FCFF P/E (x) P/B (x) EV/EBITDA (x) ROE (%) 28 % 32 % 33 % 34 % Core ROIC (%) 31 % 34 % 36 % 38 % EBITDA Margin (%) 14 % 14 % 15 % 15 % Net Margin (%) 9 % 9 % 10 % 10 % November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 1 of 10 Before reading this report, you must refer to the disclaimer on the last page.

2 Quarterly performance, consolidated % Change 2QFY19 2QFY19E 1QFY19 2QFY18 2QFY19E 1QFY19 2QFY18 Net Sales 4,018 3,647 5,178 3,092 10% -22% 30% Above EE Comments Cost of Materials Consumed , % -80% -6 Purchases of Stock - in - Trade 1,801 1,355 1, % 23% 84% Employee Benefit Expenses % 13% 23% Other Expenses , % -18% 37% Total Expenditures 3,507 3,136 4,216 2,726 12% -17% 29% EBITDA % -47% 39% Higher than expected sales offset by higher other expenses Depreciation % 6% 31% EBIT % -49% 40% Interest % 100% 100% Other Income % -2 PBT % -48% 3 Tax % -47% 31% PAT before MI & Associates % -48% 38% Minority Interest Profit from Assoc Recurring PAT % -48% 38% Extraordinaries % -400% Reported PAT % -43% 63% EPS (Rs) % -48% 38% EBITDA Margin 12.7% 14.0% 18.6% 11.8% -130 bps -587 bps 87 bps EBIT Margin 11.7% 13.0% 17.9% 10.9% -128 bps -612 bps 86 bps PBT Margin 12.2% 13.7% 18.2% 11.8% -150 bps -594 bps 48 bps PAT Margin 9.1% 9.2% % -4 bps -340 bps 186 bps Tax Rate 33.3% 33.2% 32.7% bps 57 bps -119 bps November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 2 of 11

3 Exhibit 1: A&P expense trends Advertisement and publicity expenses (Rs mn) as a % of sales 1, % 5.9% 6.0% 5.8% 6.1% % FY13 FY14 FY15 FY16 FY17 FY18 Source: Company, Equirus Securities 7% 6% 4% 3% 2% 1% 0% Exhibit 3: Margin trends 60% Gross margin (%) EBITDA margin (%) 44.6% 45.2% 46.8% % 50% % 51.0% 50.3% 49.7% 40% 30% 18.6% 20% 13.6% 15.3% 15.0% 11.8% 12.2% 12.7% % 9.8% 10% 0% 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Source: Company, Equirus Securities Exhibit 2: Freight cost trends Freight, handling and octroi (Rs mn) as a % of sales 5.3% 5.2% 5.1% 5.0% 4.8% 4.7% FY13 FY14 FY15 FY16 FY17 FY18 4% Source:Company, Equirus Securities November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 3 of 11

4 Earnings call takeaways VIP Industries Ltd. Absolute LONG Relative Benchmark 17% ATR in 14 Months During 2QFY19, E commerce and Institutional delivered strong sales growth. Sales from modern trade and general trade channels also grew well on a high base. Management indicated that the momentum in the institutional business would continue in coming quarters. Volume growth during the quarter stood at 3 yoy. As per management, Volume growth was higher than sales growth (+30% yoy) due to sales from smaller items All brands grew well during the quarter. Latest collections of VIP, Skybags, Aristocrat and Caqprese were well received by the consumers. During 2QFY19, gross margins improved by 149bps yoy on account of improved product mix and higher sales. Management indicated that the preference shift of consumers from unorganized to organized sector is benefiting all the luggage players across industry VIPI plans to take further price increases if the current headwinds continue to persist VIPI is cautious on taking price increases in Aristocrat, entry-level segment. As consumer preference starts to change from unorganized to organized, the entry level segment has started to grow at a faster rate. During 2QFY19, other expenses grew by 37% yoy mainly on account of increase in freight costs, forex loss (Rs 50mn-Rs 70mn). VIPI in investing in machinery and plants in India after a long time. Management indicated that the sales momentum would likely continue in 2HFY19 but there could be pressure on margins owing to INR depreciation against USD and rise in crude prices. During 2QFY19, Caprese grew well on the back of increase in distribution and sales from E commerce channel. Management indicated that higher sales from Aristocrat would have an impact on the margins Caprese has been growing at a rate of 47% CAGR since FY13. November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 4 of 11

5 Company Snapshot How we differ from Consensus EPS Sales PAT Key Estimates: - Equirus Consensus % Diff Comment FY19E % We expect margins to improve. This FY20E % results in variance versus consensus FY19E 17,916 16, % FY20E 21,129 18, % FY19E 1,698 1,581 7 % FY20E 2,064 1,955 6 % (Rs. Mn) FY16A FY17A FY18A FY19E FY20E FY21E Sales 12,165 12,515 14,096 17,916 21,129 24,946 Sales growth(%) 16% 3% 13% 27% 18% 18% EBITDA 1,079 1,323 1,934 2,572 3,109 3,794 EBITDA Margin (%) 8.9% 10.6% 13.7% 14.4% 14.7% 15.2% PAT ,251 1,698 2,064 2,525 PAT Margin(%).5 6.8% 9.0% % 10.1% Risk to Our View: Dependency on China for sourcing of soft luggage. Intense competition from Samsonite will put pressure on any price hike. Appreciation of Chinese Yuan and depreciation of the Indian Rupee may adversely impact the company s margins. Increase in raw material prices. Delay in payments by CSD. Key Triggers Stable raw material prices and INR appreciation. Increasing demand for premium products. Sensitivity to Key Variables % Change % Impact on EPS EBITDA Margin 1 % 10 % DCF Valuations & Assumptions Rf Beta Ke Term. Growth Debt/IC in Term. Yr 7.8 % % 3.0 % 0.0 % - FY19E FY20E FY21-28E FY29-33E FY34-38E Sales Growth 27 % 18 % 13 % 8 % 6 % NOPAT Margin 9 % 9 % 13 % 12 % 10 % IC Turnover RoIC 34.5 % 35.5 % 53.2 % 46.9 % 38.5 % Years of strong growth Valuation as on date (Rs) Valuation as of Dec' Based on DCF, assuming 20 years of 11% CAGR growth and 41% average ROIC, we derive our current fair value of Rs306 and a Dec 19 fair value of Rs354. Company Description: Headquartered in Mumbai, VIP Industries Ltd is in the business of plastic-moulded suitcases, handbags, briefcases, vanity cases and luggage. It has acquired UK luggage brand Carlton in It provides travel products, hard and softsided luggage, bags, backpacks, duffels, shoulder bags, waist pouches, sling bags, duffel trolleys, vanity cases, office bags and satchels, suitcases, and briefcases. The company offers its products primarily under the VIP, Carlton, Footloose, Alfa, Aristocrat, Skybags, and Buddy brands. Comparable valuation Mkt Cap Price Target EPS P/E BPS P/B RoE Div Yield Company Reco. CMP Rs. Mn. Target Date FY18A FY19E FY20E FY18A FY19E FY20E FY18A FY19E FY18A FY19E FY20E FY18A FY19E VIP Ind. (Rs Mn) LONG , th Dec' % 32 % 33 % 0.6 % 1.1 % Samsonite (USD) NR 3 4,121 NR NR % 14 % 15 % % TUMI Inc (USD) NR - - NR NR % November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 5 of 11

6 Standalone Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q18A 2Q18A 3Q18A 4Q18A 1Q19A 2Q19A 3Q19E 4Q19E 1Q20E 2Q20E 3Q20E 4Q20E FY18A FY19E FY20E FY21E Revenue 3,998 3,092 3,380 3,626 5,178 4,018 4,260 4,460 6,128 4,543 5,282 5,177 14,096 17,916 21,129 24,946 Cost of Materials Consumed ,230 2,276 3,064 3,493 Purchases of Stock - in - Trade 1,633 1,027 1,543 1,916 1,717 2,062 1,661 1,739 2,390 1,772 2,060 2,019 6,119 7,180 8,240 9,729 Employee Benefit Expenses ,532 1,797 2,102 2,432 Other Expenses , ,044 1,070 1,409 1,022 1,204 1,191 3,413 4,274 4,826 5,698 EBITDA ,802 2,389 2,897 3,594 Depreciation EBIT ,694 2,267 2,765 3,454 Interest Other Income PBT ,795 2,383 2,918 3,637 Tax ,236 Recurring PAT ,186 1,576 1,926 2,400 Extraordinary Reported PAT ,176 1,575 1,926 2,400 EPS (Rs) Key Drivers Sequential Growth (%) Revenue 32 % -23 % 9 % 7 % 43 % -22 % 6 % 5 % 37 % -26 % 16 % -2 % Cost of Materials Consumed -478 % -2 % -70 % -188 % -693 % -94 % 981 % -2 % 42 % -26 % 16 % -2 % EBITDA 136 % -39 % 6 % 37 % 79 % -48 % -4 % 23 % 70 % -43 % 31 % -3 % EBIT 154 % -41 % 5 % 40 % 84 % -50 % -4 % 25 % 74 % -44 % 33 % -4 % Recurring PAT 145 % -36 % -1 % 35 % 85 % -48 % -4 % 24 % 72 % -43 % 32 % -4 % EPS 145 % -36 % -1 % 35 % 85 % -48 % -4 % 24 % 72 % -43 % 32 % -4 % Yearly Growth (%) Revenue 9 % 10 % 12 % 20 % 30 % 30 % 26 % 23 % 18 % 13 % 24 % 16 % 13 % 27 % 18 % 18 % EBITDA 21 % 57 % 51 % 110 % 59 % 35 % 22 % 10 % 4 % 16 % 58 % 23 % 52 % 33 % 21 % 24 % EBIT 24 % 66 % 57 % 122 % 61 % 35 % 23 % 10 % 4 % 17 % 62 % 24 % 58 % 34 % 22 % 25 % Recurring PAT 27 % 57 % 52 % 110 % 58 % 28 % 24 % 14 % 6 % 16 % 59 % 24 % 55 % 33 % 22 % 25 % EPS 27 % 57 % 52 % 110 % 58 % 28 % 24 % 14 % 6 % 16 % 59 % 24 % 55 % 33 % 22 % 25 % Margin (%) EBITDA 14 % 11 % 11 % 14 % 18 % 12 % 11 % 13 % 16 % 12 % 14 % 13 % 13 % 13 % 14 % 14 % EBIT 14 % 10 % 10 % 13 % 17 % 11 % 10 % 12 % 15 % 11 % 13 % 13 % 12 % 13 % 13 % 14 % PBT 14 % 12 % 11 % 14 % 17 % 12 % 11 % 13 % 16 % 12 % 14 % 13 % 13 % 13 % 14 % 15 % PAT 9 % 8 % 7 % 9 % 12 % 8 % 7 % 8 % 10 % 8 % 9 % 9 % 8 % 9 % 9 % 10 % November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 6 of 11

7 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14 Jun/14 Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Dec/18 Mar/19 Jun/19 Sep/19 Dec/19 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14 Jun/14 Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Dec/18 Mar/19 Jun/19 Sep/19 Dec/19 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14 Jun/14 Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Dec/18 Mar/19 Jun/19 Sep/19 Dec/19 VIP Industries Ltd. Absolute LONG Relative Benchmark 17% ATR in 14 Months Consolidated Financials P&L (Rs Mn) FY18A FY19E FY20E FY21E Balance Sheet (Rs Mn) FY18A FY19E FY20E FY21E Cash Flow (Rs Mn) FY18A FY19E FY20E FY21E Revenue 14,096 17,916 21,129 24,946 Equity Capital PBT 1,895 2,536 3,090 3,793 Op. Expenditure 12,162 15,344 18,021 21,152 Reserve 4,608 5,456 6,499 7,833 Depreciation EBITDA 1,934 2,572 3,109 3,794 Networth 4,891 5,738 6,781 8,115 Others Depreciation Long Term Debt Taxes Paid ,027 1,268 EBIT 1,805 2,420 2,937 3,610 Def Tax Liability Change in WC Interest Expense Minority Interest Operating C/F 859 1,204 1,662 1,961 Other Income Account Payables 2,125 2,243 2,699 3,171 Capex PBT 1,895 2,536 3,090 3,793 Other Curr Liabi ,082 Change in Invest Tax ,027 1,268 Total Liabilities & Equity 7,727 8,857 10,496 12,468 Others PAT bef. MI & Assoc. 1,268 1,698 2,064 2,525 Net Fixed Assets Investing C/F Minority Interest Capital WIP Change in Debt Profit from Assoc Others Change in Equity Recurring PAT 1,268 1,698 2,064 2,525 Inventory 3,165 3,927 4,631 5,468 Others ,021-1,191 Extraordinaires Account Receivables 1,766 1,718 2,026 2,392 Financing C/F ,021-1,191 Reported PAT 1,251 1,698 2,064 2,525 Other Current Assets ,099 1,283 Net change in cash FDEPS (Rs) Cash 952 1,106 1,547 2,117 RoE (%) 28 % 32 % 33 % 34 % DPS (Rs) Total Assets 7,727 8,857 10,496 12,468 RoIC (%) 28 % 31 % 33 % 33 % CEPS (Rs) Non-cash Working Capital 2,923 3,568 4,141 4,890 Core RoIC (%) 31 % 34 % 36 % 38 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 41 % 50 % 49 % 47 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 14 % 14 % 15 % 15 % FA Turnover P/B PATM (%) 9 % 9 % 10 % 10 % Net D/E P/FCFF Tax Rate (%) 33 % 33 % 33 % 33 % Revenue/Capital Employed EV/EBITDA Sales Growth (%) 13 % 27 % 18 % 18 % Capital Employed/Equity EV/Sales FDEPS Growth (%) 49 % 34 % 22 % 22 % Dividend Yield (%) 0.6 % 1.1 % 1.3 % 1.5 % TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE EPS Growth 80% 60% 40% 32x 20% 25x 0% 15x -20% -40% 8x -60% 38x 100,000 80,000 60,000 40,000 20,000 - EBITDA Growth 90% 70% 50% 30% 10% -10% -30% 25x 20x 15x 10x 5x RoE 60% 50% 40% 30% 20% 10% 0% -10% 5x 4x 3x 2x November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 7 of 11

8 Historical Consolidated Financials P&L (Rs Mn) FY15A FY16A FY17A FY18A Balance Sheet (Rs Mn) FY15A FY16A FY17A FY18A Cash Flow (Rs Mn) FY15A FY16A FY17A FY18A Revenue 10,477 12,165 12,515 14,096 Equity Capital PBT ,256 1,895 Op. Expenditure 9,702 11,086 11,192 12,162 Reserve 2,775 3,337 3,796 4,608 Depreciation EBITDA 775 1,079 1,323 1,934 Networth 3,058 3,619 4,079 4,891 Others Depreciation Long Term Debt Taxes Paid EBIT ,187 1,805 Def Tax Liability Change in WC Interest Expense Minority Interest Operating C/F , Other Income Account Payables 1,190 1,606 1,454 2,125 Capex PBT ,256 1,895 Other Curr Liabi Change in Invest Tax Total Liabilities & Equity 4,994 5,837 6,087 7,727 Others PAT bef. MI & Assoc ,268 Net Fixed Assets Investing C/F Minority Interest Capital WIP Change in Debt Profit from Assoc Others Change in Equity Recurring PAT ,268 Inventory 2,269 2,874 2,826 3,165 Others Extraordinaires Account Receivables 1,111 1,493 1,210 1,766 Financing C/F Reported PAT ,251 Other Current Assets Net change in cash EPS (Rs) Cash RoE (%) 14 % 20 % 22 % 28 % DPS (Rs) Total Assets 4,994 5,837 6,087 7,727 RoIC (%) 13 % 19 % 21 % 28 % CEPS (Rs) Non-cash Working Capital 2,297 2,801 2,497 2,923 Core RoIC (%) 13 % 18 % 22 % 31 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 55 % 51 % 41 % 41 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 7 % 9 % 11 % 14 % FA Turnover P/B PATM (%) 4 % 5 % 7 % 9 % Net D/E P/FCFF Tax Rate (%) 31 % 30 % 32 % 33 % Revenue/Capital Employed EV/EBITDA Sales growth (%) 8 % 16 % 3 % 13 % Capital Employed/Equity EV/Sales FDEPS growth (%) 1 % 57 % 28 % 49 % Dividend Yield (%) 0.3 % 0.4 % 0.5 % 0.6 % November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 8 of 11

9 Equirus Securities Research Analysts Sector/Industry Equity Sales Abhishek Shindadkar IT Services Vishad Turakhia Ashutosh Tiwari Auto, Metals & Mining Subham Sinha Bharat Celly Healthcare Viral Desai Depesh Kashyap Mid-Caps Viraj Mehta Dhaval Dama FMCG, Mid-Caps Ruchi Bhadra Manoj Gori Consumer Durables Cash Dealing Room Maulik Patel Oil and Gas Ashish Shah Pranav Mehta Building Materials Manoj Kejriwal Praful Bohra Healthcare Dharmesh Mehta Rohan Mandora Banking & Financial Services Sarit Sanyal Associates Vikram Patil Ankit Choudhary Gaurav Mehta Dhairya Dhruv Compliance Officer Harshit Patel Jay Soni Nishant Bagrecha Corporate Communications Prateeksha Malpani Mahdokht Bharda Ronak Soni Quant Analyst Rushabh Shah Kruti Shah Shreepal Doshi F&O Dealing Room Varun Baxi Kunal Dand Vikas Jain Dhananjay Tiwari Mukesh Jain Rating & Coverage Definitions: Absolute Rating LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion and ATR >= 20% for rest of the companies ADD: ATR >= but less than Ke over investment horizon REDUCE: ATR >= negative 10% but < over investment horizon SHORT: ATR < negative 10% over investment horizon Relative Rating OVERWEIGHT: Likely to outperform the benchmark by at least over investment horizon BENCHMARK: likely to perform in line with the benchmark UNDERWEIGHT: likely to under-perform the benchmark by at least over investment horizon Investment Horizon Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a calendar quarter. Lite vs. Regular Coverage vs. Spot Coverage We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we would have access to the company and we would maintain detailed financial model for Regular coverage companies. We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot coverage is meant to stimulate discussion rather than provide a research opinion. Registered Office: Equirus Securities Private Limited Unit No. 1201, 12th Floor, C Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai Tel. No: +91 (0) Fax No: +91- (0) Corporate Office: 3rd floor, House No. 9, Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge, S.G. Highway Ahmedabad Gujarat Tel. No: +91 (0) Fax No: +91 (0) November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 9 of 11

10 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited Analyst Certification I, Dhaval Dama, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Disclosures Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the Capital Market (Reg. No. INB ), Futures & Options Segment (Reg. No.INF ) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB ) of Bombay Stock Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH ), as a Portfolio Manager under SEBI (Portfolio Managers Regulations, 1993 (Reg. No.INP ) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP ). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers & acquisitions and structured finance. As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or Associates did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ESPL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ESPL has not been engaged in market making activity for the subject company. The Research Analyst engaged in preparation of this Report:- (a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months; (c) has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company. This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ESPL and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession of this document are required to inform themselves of, and to observe, such applicable restrictions. Please delete this document if you are not authorized to view the same. By reading this document you represent and warrant that you have full authority and all rights necessary to view and read this document without subjecting ESPL and affiliates to any registration or licensing requirement within such jurisdiction. This document has been prepared solely for information purpose and does not constitute a solicitation to any person to buy, sell or subscribe any security. ESPL or its affiliates are not soliciting any action based on this report. The information and opinions contained herein is from publicly available data or based on information obtained in good faith from sources believed to be reliable but ESPL provides no guarantee as to its accuracy or completeness. The information contained herein is as on date of this report, and is subject to change or modification and any such changes could impact our interpretation of relevant information contained herein. While we would endeavour to update the information herein on reasonable basis, ESPL and its affiliates, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasons that may prevent ESPL and its group companies from doing so. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document including the merits and risks involved. This document is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. ESPL and its group companies, employees, directors and agents accept no liability, and disclaim all responsibility, for the consequences of you or November 16, 2018 Analyst: Dhaval Dama dhaval.dama@equirus.com ( / ) Page 10 of 11

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