Cera Sanitaryware Ltd.

Transcription

1 2016 Equirus All rights reserved Rating Information Price (Rs) 1,980 Target Price (Rs) 2,312 Target Date 30th Jun'17 Target Set On 5th May'16 Implied yrs of growth (DCF) 15 Fair Value (DCF) 2,215 Fair Value (DDM) 433 Ind Benchmark BSETCD Model Portfolio Position NA Stock Information Market Cap (Rs Mn) 25,753 Free Float (%) % 52 Wk H/L (Rs) /1475 Avg Daily Volume (1yr) 14,784 Avg Daily Value (Rs Mn) 29 Equity Cap (Rs Mn) 65 Face Value (Rs) 2 Bloomberg Code CRS IN Ownership Recent 3M 12M Promoters 54.8 % 0.0 % 0.1 % DII 6.5 % -0.6 % 0.3 % FII 13.8 % 0.7 % 1.4 % Public 24.9 % 0.1 % 0.9 % Price % 1M 3M 12M Absolute 11.6 % 16.4 % % Vs Industry 11.8 % 21.4 % % Kajaria Tiles 11.7 % 11.0 % 32.5 % HSIL 2.3 % 15.4 % % Consolidated Quarterly EPS forecast Rs/Share 1Q 2Q 3Q 4Q EPS (16A) EPS (17E) Cera Sanitaryware Ltd. Absolute : LONG Relative : Overweight 4QFY16 Result: TP( ), Estimate( ), Rating( ) Regular Coverage 16% ATR in 14 months Robust earnings growth expected to continue, Upgrade to LONG Cera Sanitary-ware (CRS) delivered 12% yoy revenue growth (in-line with EE). EBITDAM improved by 274bps/184bps yoy/qoq & came at 17.2%, highest in last 15 quarters on account of lower fuel cost (down 10% yoy) & full benefits of 5% avg. price hike taken in Dec 15. Management is guiding for 20% yoy revenue growth with 100bps EBITDAM expansion in FY17E. We think major growth to come from faucet-ware & tiles products with sales CAGR of 22%/49% respectively over FY16-19E. We revise FY17/18E EPS estimates upwards by 7%/4% on account of favourable fuel prices, improvement in tiles margins, product mix shifting in favour of premium products & increasing in-house manufacturing. We rollover to Jun 17 and upgrade stock to LONG rating with TP of Rs 2,312 (earlier Rs. 1,887 based on 25x), at 27x on TTM EPS of Rs. 86 implying PEG ratio of ~1 (with FY16-19E EPS CAGR of 27%). Demand recovered marginally in Mar-Apr 16, CRS continues to outgrow others in organized segment: Company has seen merely 8% yoy revenue growth in core sanitaryware category during FY16. Our recent channel check suggests that sanitary-ware demand has been impacted by abnormally slower growth in the month of Jan, Feb especially in project segment. However dealers are seeing marginal demand improvement in Mar- Apr 16 led by higher replacement demand. We noticed that players like Jaquar and Kajaria are penetrating into sanitary-ware by leveraging on common distribution network and brand equity. Channel check also indicated that Jaquar s dealer friendly approach along with premium product positioning could help them building up in sanitary-ware and can pose threat to HSIL. Most of the dealers expect that CRS would continue to outgrow others & could face less competition from Jaquar due to 1) Better dealer satisfaction, 2) Strong presence in mass products, and 3) Deeper penetration in North-eastern markets. Non Sanitary-ware category growth momentum to continue further on account of faucets capacity ramp up & Anjani tiles JV: CRS is aggressively executing its strategy to become complete bathroom solution provider and increased its revenue contribution from non sanitary-ware category to 35% in FY16 from 15% in FY14 due to, 1) 3x capacity expansion in faucets to 7,200 pieces/day, 2) market share gain in faucets, and 3) well positioning of tiles products. We expect non sanitary-ware revenue contribution to increase further to 50% by FY19E due to faucets capacity ramp up & Anjani tiles JV. Margins improvement likely to continue in FY17E on account of 1) Better product mix as CRS is focusing more on middle-premium range of products in sanitary-ware & faucets, 2) Higher sales of high value added GVT tiles from Anjani JV, 3) Favourable fuel prices, and 4) Faucets capacity ramp up. We are building in +120bps improvement in EBITDAM and see 27% EPS CAGR over FY16-19E. Improvement in WC: CRS did commendable job by reducing non-cash working capital days from 77 days in FY15 to 55 days in FY16, against challenging demand environment. CRS has formed a JV for captive utilization with an existing vendor for corrugated packaging boxes. We seek further clarity on business strategy in a coming analyst meet. Change in Estimates Building Materials Rs. Mn FY17E Chg (%) FY18E Chg (%) Sales 11,049 2% 13,339 1% EBITDA 1,734 5% 2,133 4% EPS 81 7% 102 4% Consolidated Financials Rs. Mn YE Jun FY16A FY17E FY18E FY19E Sales 9,337 11,049 13,339 16,300 EBITDA 1,413 1,734 2,133 2,651 Depreciation Interest Expense Other Income Reported PAT 835 1,049 1,332 1,692 Recurring PAT 835 1,049 1,332 1,692 Total Equity 4,210 5,064 6,148 7,526 Gross Debt Cash 1,075 1,254 1,618 2,197 Rs Per Share FY16A FY17E FY18E FY19E Earnings Book Value Dividends FCFF P/E (x) P/B (x) EV/EBITDA (x) ROE (%) 22 % 23 % 24 % 25 % Core ROIC (%) 18 % 20 % 22 % 24 % EBITDA Margin (%) 15 % 16 % 16 % 16 % Net Margin (%) 9 % 9 % 10 % 8 % May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 1 of 9 Before reading this report, you must refer to the disclaimer on the last page.

2 Quarterly Result Table (Standalone) % Change Rs Mn Q4FY16 Q4FY16E Q3FY16 Q4FY15 Q4FY16E Q3FY16 Q4FY15 Net Sales 2,806 2,820 2,335 2,504 0% 20% 12% Comments Raw Material Consumption 1,380 1,348 1,073 1,257 2% 29% 10% Power & Fuel % 10% -10% Employee cost % 6% 43% Other Exp % 3% -4% Total Expenditures 2,325 2,392 1,978 2,143-3% 18% 8% EBITDA % 35% 33% Depreciation % -5% -5% EBIT % 40% 39% Interest % 30% -42% Other Income % 142% 63% PBT % 45% 47% Tax % 39% 76% Recurring PAT % 48% 35% Extraordinaries Reported PAT % 48% 35% EPS (Rs) % 48% 35% EBITDA Margin 17.2% 15.2% 15.3% 14.4% 195 bps 184 bps 274 bps EBIT Margin 15.6% 13.6% 13.4% 12.6% 208 bps 223 bps 301 bps PBT Margin 16.4% 13.8% 13.6% 12.5% 265 bps 279 bps 388 bps PAT Margin 10.6% 9.2% 8.6% 8.8% 140 bps 201 bps 178 bps Tax Rate 35.3% 33.0% 36.8% 29.5% 230 bps -152 bps 583 bps May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 2 of 9

3 Company Snapshot How we differ from Consensus EPS Sales PAT - Equirus Consensus % Diff Comment FY17E % We are assuming margin expansion due FY18E % to change in product mix & lower fuel costs. FY17E 11,049 11,339-3 % FY18E 13,339 13,454-1 % FY17E 1,049 1,001 5 % FY18E 1,332 1,234 8 % Key Investment arguments: Sales growth led by secular trend of rising consumption, reduction in capacity constraint in faucets and premium products With its increasing penetration into faucet segment which is a high growth low competition segment, Cera stands a better chance to meet excess demand & improve upon its growth trajectory with sufficient capacity. Along with the brand focus on premium category segment we believe the company should comfortably achieve revenue CAGR of 20% over FY16-19E. Key Estimates: Particulars ( in Millions ) FY16A FY17E FY18E FY19E Faucetware Revenue 1,857 2,372 2,932 3,421 Tiles Revenue 1,378 2,067 3,101 4,652 Sanitaryware Revenue 4,596 4,987 5,535 6,255 Allied Products Revenue 1,505 1,623 1,770 1,972 Total Sales 9,337 11,049 13,339 16,300 EBITDAM (%) 15% 16% 16% 16% PATM (%) 9% 9% 10% 10% Key Triggers Pick up Real Estate Market, Volume and Price Realization Sensitivity to Key Variables % Change % Impact on EPS Sanitaryware sales 1 % 0.7 % Faucet ware sales 1 % 0.3 % Tiles sales 1 % 0.2 % DCF Valuations & Assumptions Rf Beta Ke Term. Growth Debt/IC in Term. Yr 7.5 % % 5.0 % 5.0 % - FY17E FY18E FY19-21E FY22-26E FY27-31E Sales Growth 18 % 21 % 19 % 12 % 10 % NOPAT Margin 9 % 10 % 10 % 10 % 10 % IC Turnover RoIC 19.6 % 21.6 % 24.7 % 26.7 % 26.5 % Years of strong growth Valuation as on date (Rs) 941 1,093 1,477 1,768 1,938 Valuation as of 30 st Jun'17 1,076 1,249 1,688 2,021 2,215 Based on DCF, assuming 15 years of 12% revenue CAGR growth and 25.45% average ROIC, we derive current fair value of Rs.1,938 and Jun 17 fair value of Rs. 2,215. Company Description: Cera is one of the leading players in the sanitary-ware industry India. With a myriad products in the building products segment, Cera has created a brand for itself in an consolidated industry. Comparable valuation Mkt Cap Price Target EPS P/E BPS P/B RoE Div Yield Company Reco. CMP Rs. Mn. Target Date FY16A FY17E FY18E FY16A FY17E FY18E FY16A FY17E FY16A FY17E FY18E FY16A FY17E Cera Sanitaryware LONG 1,980 25,753 2,312 30th Jun % 23 % 24 % 0.5 % 0.6 % Kajaria Tiles TRADE 1,053 83,689 1,052 31st Mar' % 28 % 28 % 0.4 % 0.4 % HSIL LONG , st Mar' % 8 % 9 % 1.1 % 1.2 % May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 3 of 9

4 Standalone Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q16A 2Q16A 3Q16A 4Q16A 1Q17E 2Q17E 3Q17E 4Q17E 1Q18E 2Q18E 3Q18E 4Q18E FY16A FY17E FY18E FY19E Revenue 1,943 2,253 2,335 2,806 2,180 2,596 2,784 3,490 2,605 3,136 3,374 4,224 9,337 11,049 13,339 16, Raw Material Consumption 877 1,077 1,073 1, ,194 1,281 1,745 1,120 1,442 1,586 2,112 4,407 5,185 6,260 7,778 Power & Fuel Employee cost ,110 1,318 1,538 1,792 Other Exp ,094 2,449 2,967 3,542 EBITDA ,413 1,734 2,133 2,651 Depreciation EBIT ,250 1,537 1,914 2,407 Interest Other Income PBT ,295 1,585 1,988 2,521 Tax PAT bef. MI & Assoc ,078 1,372 1,740 Minority Interest Profit from Assoc Recurring PAT ,049 1,332 1,692 Extraordinaries Reported PAT ,049 1,332 1,692 EPS (Rs) Key Drivers Faucetware Revenue ,857 2,372 2,932 3,421 Tiles Revenue ,378 2,067 3,101 4,652 Sanitaryware Revenue ,596 4,987 5,535 6,255 Allied Products Revenue ,505 1,623 1,770 1, Sequential Growth (%) Revenue -22 % 16 % 4 % 20 % -22 % 19 % 7 % 25 % -25 % 20 % 8 % 25 % Raw Material Consumption -30 % 23 % 0 % 29 % -30 % 24 % 7 % 36 % -36 % 29 % 10 % 33 % EBITDA -22 % 3 % 23 % 35 % -33 % 14 % 20 % 36 % -30 % 17 % 4 % 38 % EBIT -22 % 3 % 24 % 40 % -37 % 16 % 23 % 40 % -33 % 19 % 4 % 42 % Recurring PAT -29 % 14 % 12 % 48 % -37 % 18 % 21 % 40 % -32 % 22 % 4 % 41 % EPS -29 % 14 % 12 % 48 % -37 % 18 % 21 % 40 % -32 % 22 % 4 % 41 % Yearly Growth (%) Revenue 20 % 13 % 12 % 12 % 12 % 15 % 19 % 24 % 20 % 21 % 21 % 21 % 14 % 18 % 21 % 22 % EBITDA 17 % 6 % 21 % 33 % 14 % 26 % 24 % 25 % 31 % 34 % 16 % 18 % 20 % 23 % 23 % 24 % EBIT 18 % 4 % 23 % 39 % 12 % 27 % 25 % 25 % 34 % 37 % 16 % 18 % 22 % 23 % 24 % 26 % Recurring PAT 15 % 14 % 24 % 35 % 20 % 23 % 33 % 25 % 35 % 40 % 19 % 21 % 23 % 26 % 27 % 27 % EPS 15 % 14 % 24 % 35 % 20 % 23 % 33 % 25 % 35 % 40 % 19 % 21 % 23 % 26 % 27 % 27 % Margin (%) EBITDA 15 % 13 % 15 % 17 % 15 % 14 % 16 % 17 % 16 % 16 % 15 % 17 % 15 % 16 % 16 % 16 % EBIT 13 % 11 % 13 % 16 % 13 % 12 % 14 % 16 % 14 % 14 % 14 % 15 % 13 % 14 % 14 % 15 % PBT 12 % 12 % 14 % 16 % 13 % 13 % 15 % 16 % 15 % 15 % 14 % 16 % 14 % 14 % 15 % 15 % PAT 8 % 8 % 9 % 11 % 9 % 8 % 10 % 11 % 10 % 10 % 9 % 11 % 9 % 9 % 10 % 10 % May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 4 of 9

5 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Consolidated Financials Cera Sanitaryware Ltd. Absolute LONG Relative Overweight 16% ATR in 14 Months P&L (Rs Mn) FY16A FY17E FY18E FY19E Balance Sheet (Rs Mn) FY16A FY17E FY18E FY19E Cash Flow (Rs Mn) FY16A FY17E FY18E FY19E Revenue 9,337 11,049 13,339 16,300 Equity Capital PBT 1,295 1,585 1,988 2,521 Op. Expenditure 7,924 9,315 11,206 13,649 Reserve 4,145 4,999 6,083 7,461 Depreciation EBITDA 1,413 1,734 2,133 2,651 Networth 4,210 5,064 6,148 7,526 Others Depreciation Long Term Debt Taxes Paid EBIT 1,250 1,537 1,914 2,407 Def Tax Liability Change in WC Interest Expense Minority Interest Operating C/F 1, ,211 1,493 Other Income Account Payables ,027 Capex -1, PBT 1,295 1,585 1,988 2,521 Other Curr Liabi 1,579 1,578 1,906 2,329 Change in Invest Tax Total Liabilities & Equity 8,036 8,954 10,549 12,585 Others PAT bef. MI & Assoc ,078 1,372 1,740 Net Fixed Assets 2,298 2,601 2,982 3,339 Investing C/F -1, Minority Interest Capital WIP Change in Debt Profit from Assoc Others Change in Equity Recurring PAT 835 1,049 1,332 1,692 Inventory 1,357 1,574 2,010 2,456 Others Extraordinaires Account Receivables 1,884 2,180 2,485 2,903 Financing C/F Reported PAT 835 1,049 1,332 1,692 Other Current Assets Net change in cash FDEPS (Rs) Cash 1,075 1,254 1,618 2,197 RoE (%) 22 % 23 % 24 % 25 % DPS (Rs) Total Assets 8,036 8,954 10,549 12,585 RoIC (%) 17 % 17 % 19 % 20 % CEPS (Rs) Non-cash Working Capital 1,400 1,801 2,180 2,670 Core RoIC (%) 18 % 20 % 22 % 24 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 16 % 19 % 19 % 19 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 15 % 16 % 16 % 16 % FA Turnover P/B PATM (%) 9 % 9 % 10 % 10 % Net D/E P/FCFF Tax Rate (%) 36 % 32 % 31 % 31 % Revenue/Capital Employed EV/EBITDA Sales Growth (%) 14 % 18 % 21 % 22 % Capital Employed/Equity EV/Sales FDEPS Growth (%) 23 % 26 % 27 % 27 % Dividend Yield (%) 0.5 % 0.6 % 0.8 % 1.0 % TTM P/E vs. 2 yr forward EPS growth TTM P/B vs. 2 yr forward RoE TTM EV/EBITDA vs. 2 yr forward EBITDA EPS Growth 120% 100% 40x 80% 30x 60% 40% 20x 20% 12x 0% 5x -20% RoE 34% 9x 32% 30% 5x 28% 26% 3x 24% 2x 22% 1x 20% EBITDA Growth 40% 35% 30% 25% 20% 15% 10% 5% 0% 20x 14x 10x 6x 2x May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 5 of 9

6 Historical Consolidated Financials P&L (Rs Mn) FY13A FY14A FY15A FY16A Balance Sheet (Rs Mn) FY13A FY14A FY15A FY16A Cash Flow (Rs Mn) FY13A FY14A FY15A FY16A Revenue 4,879 6,637 8,217 9,337 Equity Capital PBT ,009 1,295 Op. Expenditure 4,125 5,688 7,042 7,924 Reserve 1,732 2,176 3,452 4,145 Depreciation EBITDA ,175 1,413 Networth 1,795 2,240 3,517 4,210 Others Depreciation Long Term Debt Taxes Paid EBIT ,021 1,250 Def Tax Liability Change in WC Interest Expense Minority Interest Operating C/F ,338 Other Income Account Payables Capex ,260 PBT ,009 1,295 Other Curr Liabi ,219 1,579 Change in Invest Tax Total Liabilities & Equity 3,796 4,532 6,442 8,036 Others PAT bef. MI & Assoc Net Fixed Assets 1,251 1,517 2,147 2,298 Investing C/F ,173-1,260 Minority Interest Capital WIP Change in Debt Profit from Assoc Others Change in Equity Recurring PAT Inventory 940 1,046 1,259 1,357 Others Extraordinaires Account Receivables 831 1,066 1,612 1,884 Financing C/F Reported PAT Other Current Assets Net change in cash EPS (Rs) Cash ,075 RoE (%) 29 % 26 % 24 % 22 % DPS (Rs) Total Assets 3,797 4,532 6,442 8,036 RoIC (%) 20 % 18 % 18 % 17 % CEPS (Rs) Non-cash Working Capital 1,124 1,281 1,740 1,400 Core RoIC (%) 20 % 19 % 19 % 18 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 13 % 14 % 14 % 16 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 15 % 14 % 14 % 15 % FA Turnover P/B PATM (%) 9 % 8 % 8 % 9 % Net D/E P/FCFF Tax Rate (%) 32 % 37 % 33 % 36 % Revenue/Capital Employed EV/EBITDA Sales growth (%) 53 % 36 % 24 % 14 % Capital Employed/Equity EV/Sales FDEPS growth (%) 44 % 12 % 30 % 23 % Dividend Yield (%) 0.0 % 0.0 % 0.0 % 0.0 % May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 6 of 9

7 Equirus Securities Pankaj Sharma Executive Director /41 Research Analysts Sector/Industry Equity Sales Anirvan Sarkar Banking & Financial Services Vishad Turakhia Ashutosh Tiwari Auto, Metals & Mining Vibhor Rastogi Devam Modi Power & Infrastructure Subham Sinha Dhaval Dama FMCG, Mid-Caps Sweta Sheth Maulik Patel Oil and Gas Dealing Room Nimish Mehta Pharma Ashish Shah Umesh Raut Industrials Ilesh Savla Associates Jigar Chokshi Ankit Choudhary Manoj Kejriwal Manoj Gori Sandip Amrutiya Meet Chande Compliance Officer Parva Soni Smita Sharma Pranav Mehta Raj Kantawala Ram Varun Saylee Warade Vikas 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 SHORT: ATR <= negative 5% over investment horizon TRADE: Stocks that do not meet the criteria for either LONG or SHORT Relative Rating OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon BENCHMARK: likely to perform in line with the benchmark UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon Target Price and Investment Horizon Target Price is a point value for stocks with Absolute rating of LONG or SHORT and a range value for stocks rated TRADE. Investment Horizon is set at a minimum 3 months to maximum 15 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) May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 7 of 9

8 2016 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, Umesh Raut, 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. Disclaimers 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 ). There are no disciplinary actions that have been taken by any regulatory authority. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker. ESPL/its affiliates provide investment banking services including but not limited to Private Equity, Mergers & Acquisitions, Structured Finance and Institutional Equities. ESPL/its affiliates might have, managed or co-managed public offering of securities of the subject company or have received a mandate from the subject company or might have received compensation from the subject company for investment banking or brokerage services in the past twelve months. ESPL & its affiliates, 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 or its Analyst 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. Research Analyst might have served as an employee of the subject company in the past. 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9 Disclosures Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest Analyst/ESPL/Associate/Relatives financial interest Analyst/ESPL/Associate/Relatives actual/beneficial ownership of 1% or more Analyst/ESPL/Associate/Relatives material conflict of interest Whether ECPL managed any public offering in past 12 months * Associate means individual who assist Analyst No No No No May 6, 2016 Analyst: Umesh Raut umesh.raut@equirus.com ( ) Page 9 of 9