FUNDAMENTALS VALUATION

Transcription

1 FUNDAMENTALS VALUATION ASAHI SONGWON COLORS LIMITED March 29, 2013

2 ANALYTICAL CONTACT Ms. Revati Kasture BUSINESS DEVELOPMENT CONTACTS MUMBAI Mr. Ankur Sachdeva KOLKATA Ms. Priti Agarwal CHENNAI Mr. V Pradeep Kumar pradeep.kumar@careratings.com AHMEDABAD Mr. Mehul Pandya mehul.pandya@careratings.com NEW DELHI Ms. Swati Agrawal swati.agrawal@careratings.com BANGALORE Mr. Dinesh Sharma dinesh.sharma@careratings.com HYDERABAD Mr. Saikat Roy saikat.roy@careratings.com PUNE Mr. Rahul Patni rahul.patni@careratings.com CARE EQUITY RESEARCH OFFERS Independent Research of equities on fundamentals or valuations or both IPO Grading White Label Research Valuation of companies for Institutional Investors, Asset Managers and Corporates Sector Write-ups for Offer Documents of securities

3 EQUI-GRADE Analytical Power for Investment Decision Asahi Songwon Colors Limited Pigments (Organic) Ushdev International Ltd March 29, 2013 Very Good Fundamentals, Considerable Upside Potential CMP: Rs 58.9/ CIV: Rs 88 Sensex: 18,835 CARE Equity Research assigns 4/5 on fundamental grade to Asahi Songwon Colors Limited (ASCL) The grading factors ASCL s established position in the pigment industry. ASCL has long-standing relationships (technical collaboration + equity participation + sourcing arrangement) with the following MNCs: DIC (Japan), the world s largest ink manufacturer, Sun Chemical Corporation (a subsidiary of DIC with key presence in USA & Europe) and Clariant Chemicals India Ltd. (CCIL). As on December 31, 2012, DIC and CCIL held equity stake of 7.05% & 5.86% respectively, in ASCL. The grading also factors in experience of ASCL s Board & Management team. Company s management is vigilant towards environmental compliance which we believe would be a key differentiator given the government s increasing focus on pollution control. With, gradual recovery in the developed economies like North America and Europe which account for around 60% of global pigment consumption, demand for downstream products like printing inks and coating paints is expected to pick up, which will benefit ASCL. ASCL generates a maximum portion of it total income (around 78%) through exports of pigments. However, the grade is constrained by 1) susceptibility of ASCL s profitability to volatile raw material prices which is partially mitigated through quarterly renegotiations with its key customers, 2) foreign exchange fluctuation risk owing to significant share of exports and 3) sales concentration risk. Valuation We have valued the equity shares of ASCL at Rs.88 per share. The valuation has been arrived at using the discounted cash flow valuation methodology. The CIV of Rs.88 per share is around 50.2% above the current market price (CMP) of Rs.58.9 per share. As per the valuation scale this results in a valuation grade of 5/5, indicating that equity shares of ASCL have Considerable Upside Potential. Financial Information Snapshot (Rs. Crores) FY11 FY12 FY13P FY14P Operating Income EBITDA PAT (After minority interest) Fully Diluted EPS* (Rs.) Dividend Per Share (Rs.) P/E (times) EV/EBITDA (times) * Calculated on Current Face Value of Rs. 10/- per share 1

4 FUNDAMENTAL GRADE Very Good Fundamentals 4/5 One of the leading organic pigment manufacturing companies in India; revenue mix slowly moving towards value added products ASCL is one of the leading manufacturers of CPC Blue Crude (pigment) in India. Company has also set-up facility for manufacturing Beta Blue (value added pigment) as part of forward integration. Organic pigments are chemically manufactured non-food grade coloring agents; unlike dyes they are insoluble in water. Pigments are primarily used in manufacturing of Paints, Inks and Plastic. It s key clientele comprise leading players in inks and paint industry. In domestic pigment industry, large and organized players control around 70% of market share, while unorganized players have 30% share. Following are some of the leading players in the industry: Leading Players in Organized Pigment Industry Name of Company Pigment Capacity Net Sales of Pigment Market Share (% of Net Sales) (Metric Tonnes - MT) (Rs. Crore) Sudarshan Chemical Industries Ltd. (Mar.11)# 22, Clariant Chemicals (India) Ltd. (Dec.-11)* 12, Heubach Colour Pvt. Ltd (Mar.11) 12, Asahi Songwon Colors Ltd. (Mar-12) 12, Meghmani Organics Ltd (Mar-12)@ 25, Mazda Colours Ltd. (Mar.-11) 10, Lona Industries Ltd.(Mar.11) 7, Total 102,637 2,145 Source: CARE, Annual Reports of companies, CMIE Prowess *Includes both organic and inorganic pigment with some dyestuff proportion, exact bifurcation for pigment is not publically available. # Standalone sales after excluding inter-segment sales Lona Industries Ltd. also sells dyes, the exact bifurcation of pigment and dyes sales data was available for FY11 Experienced management The promoters of ASCL are well experienced and have been successfully running the business for more than two decades. Its Chairperson, Mrs. Paru M. Jaykrishna, is a noted industrialist and is a former President of Gujarat Chamber of Commerce & Industries (GCCI). Further, its Board of Directors comprises eminent personalities (Mr. H.K. Khan, Ex-Secretary in the Ministry of Petroleum, Government of India & Ex-Chief Secretary, Government of Gujarat; Mr. R. K. Sukhdevsinhji, Ex-CMD of BPCL) having wide industry experience. The promoters of ASCL also own Aksharchem (India) Ltd., a company engaged in manufacturing of Vinyl Sulphone (a dye-intermediate used in manufacturing reactive dyes). ASCL is well-positioned to benefit from the likely economic recovery in developed markets which would boost demand for pigments As per estimates, around 80% of the world s total production of Pigment is used for manufacturing Printing Inks and Paints, the demand for these downstream products are highly correlated to overall economic scenario in the region. Further, around 60% of global pigment production is being consumed by developed economies like North America and Europe (please refer graph below). Economic recovery in these developed regions is likely to result in higher demand for downstream products. ASCL earns around 78% of its total income through exports and is expected to benefit from the higher demand from end user industry, globally. 2

5 Sales concentration risk; albeit reduced due to strong client relation and high switching costs for the clients ASCL s clientele comprises some of the world s largest downstream colorant companies i.e. DIC Corporation (Japan), Sun Chemical Corporation (USA; part of DIC group), Clariant International Ltd (Korea) and BASF SA (Germany) etc. ASCL s adherence to consistent delivery of quality products in a timely manner has helped it to maintain strong and long-standing business relation with its key clients. ASCL has been consistently able to generate repeat orders from these companies. ASCL generated around 72% of its total income in FY12 from customers to whom it had been supplying over five years. While, major portion of ASCL s sales were concentrated in top four customers which accounted for almost 65% (75%) of total income during FY12 (FY11), the customer concentration risk is partially mitigated by: ASCL s long term relations with key customers Equity participation of its key customers in ASCL (DIC holds 7.05% and Clariant Chemical India Ltd. holds 5.86% of total shareholding as on December 31, 2012) High vendor switching cost for its customers, and need based technological support extended by them to ASCL. Proportion of Sales to its major customers 3

6 Capex being undertaken for up-gradation/de-bottlenecking of plant ASCL is implementing a capex for de-bottlenecking its existing CPC Blue Crude plant (which would result in improvement in productivity), shifting of CPC Green pigment manufacturing to new premises, setting up of waste water treatment plant (better compliance with environment norms) and new capacity for manufacturing value-added product like Beta Blue 15:4 at its existing manufacturing facility in Vadodara (Gujarat). The envisaged capex is expected to be completed by Q2FY14. ASCL has undertaken the planned partial shutdown of its Vadodara facility for debottlenecking; the partial shutdown is expected to result in marginally lower capacity utilization for CPC Blue Crude for FY13. Post successful completion, ASCL s total pigment manufacturing capacity would increase by around 2,160 MTPA. The total cost of project is estimated to be around Rs.35 crore which would be funded through a mix of debt (Rs.26 crore) and internal accruals (Rs.9 crore). The financial closure for the debt portion has already been achieved and repayment towards the same would start from June ASCL has already incurred an expenditure of around Rs.16 crore towards the said capex till January Raw material price volatility risk reduced by quarterly reset on finished goods prices As most of the raw materials used in manufacturing of pigments are derivatives of crude oil, prices of its products fluctuate in-line with international crude oil prices. To mitigate this risk, ASCL has entered into supply agreement for Phthalic Anhydride (a key raw material) with two key domestic suppliers wherein procurement quantity and prices are fixed on monthly basis. ASCL also fixes the finished goods prices with its key customers on quarterly basis and with other customers on monthly basis which mitigates the risk of volatility in raw material prices to some extent. 4

7 Comfortable profitability margins, debt coverage indicators and leverage Total income of ASCL had increased at a Compounded Annual Growth Rate (CAGR) of 29% during last five years ended March 31, The increase of 27% in total income during FY12 was attributed to increase in sales realization as well as sales volume. The increase in EBITDA margin during FY12 was attributed to higher sales realization coupled with captive consumption of CPC Blue Crude in manufacturing of highervalue pigment Beta Blue. However, marginal decline in PAT margin was attributed to higher interest expense and higher tax outgo due to expiry of tax benefit previously enjoyed by ASCL on its Export Oriented Unit located in Vadodara. After discounting the subdued performance that company is expected to report in FY13, we expect the EBITDA margin to be in line with past averages (i.e. in the range of 16%-17%) from Q1FY14. Further, with signs of economic recovery in developed markets we expect the demand for pigments to grow steadily in future. ASCL has been conservative in raising debt and has managed to operate at an average Debt to Equity (D/E) of 0.5 times during last five year. Going ahead we expect both D/E and debt coverage indicators to be comfortable. Decline in profitability during 9MFY13 due to higher raw material cost and expenditure towards proactive environmental compliance - Proactive environmental compliance a positive for long term sustainability During 9MFY13, ASCL had reported decline in profitability margin due to twin impact of rise in key raw material prices and higher effluent treatment cost. The rise in effluent treatment cost was towards disposal of one of its by-product (Ammonium Carbonate) generated during manufacturing of CPC Blue Crude. Previously, ASCL used to sell this by-product in the open market to certain chemical units in its vicinity who used it as an input in their manufacturing process. However, during H1FY13, owing to lower offtake of this product & due to stringent pollution control norms, ASCL had to get this effluent transported & treated at another unit before disposing it off as per pollution control norms, which resulted in higher operating expense. To circumvent this in the future, ASCL went in for setting-up an ammonium sulphate plant to treat the waste in-house at a cost of Rs.2 crore. The plant became operational in June 2012 resulting in higher operating cost towards effluent treatment, power and fuel etc. at the same level of output. The additional fixed operational cost emanating from setting-up of the above-mentioned effluent treatment plant was not factored in 5

8 at the time of fixing the prices with its key customers resulting in decline in profitability margin in 9MFY13. However, with prices of ASCL s products have already been revised during January 2013 and higher operating efficiency anticipated on existing capacities due to de-bottlenecking, the EBITDA margins going ahead are expected to be in line with previous averages. In compliance with listing agreement clause 49 As on December 31, 2012, ASCL s Board of Directors (BoD) consisted of eight directors of which three are Promoter - Executive Directors and five are Non-Executive and Independent Directors, i.e. more than half of the Board comprises of Non-Executive and Independent Directors. The Board is chaired by Mrs. Paru M. Jaykrishna, Promoter and Managing Director. ASCL has formed three Board level committees- Audit Committee, Shareholders /Investors Grievance Committee and Remuneration Committee. All the three committees are chaired by Independent Directors as required by the provisions of the listing agreement. ASCL s Board of Directors Mrs. Paru M. Jaykrishna Chairperson and Managing Director Mr. Gokul M. Jaykrishna Joint Managing Director Mr. Munjal M. Jaykrishna Joint Managing Director Mr. H.K. Khan Non-Executive, Independent Director Mr. R.K. Sukhdevsingji Non-Executive, Independent Director Mr. Arvind Goenka Non-Executive, Independent Director Mr. Pradeep Jha Non-Executive, Independent Director Mr. Gaurang N. Shah Non-Executive, Independent Director Source: Company 6

9 Annual Financials Peer Comparison Sudarshan Chemical Industries Ltd. (Standalone) Meghmani Organics Ltd. (Stadalone) Asahi Songwon Colors Ltd. Units Financial Statements FY11 FY12 FY11 FY12 FY11 FY12 Net Operating Income Rs. Crores EBITDA Rs. Crores EBIT Rs. Crores PAT* (Excluding Exceptional Items) Rs. Crores Margins EBITDA Margin % 12.5% 10.8% 11.3% 10.1% 16.3% 18.7% PAT Margin % 6.6% 4.9% 5.5% 2.0% 10.9% 9.6% Per Share Data Fully Diluted EPS Rs Dividend Per Share Rs Book value Per Share Rs Valuations Ratios (Trailing) Price / Earnings (P/E) Ratio times Price /Sales (P/S) Ratio times Price / Book Value (P/BV) times Enterprise Value (EV)/EBITDA times Profitability Ratios RoCE % 27.8% 18.1% 13.8% 3.5% 32.6% 23.8% RoE % 27.1% 17.4% 9.2% 3.1% 23.2% 21.6% *Pigment income for Sudarshan Chemicals Industries Ltd includes sale from both Organic and Inorganic pigments Year to Date Results (Rs Crore) Quarterly Sudarshan Chemical performance Industries Ltd Meghmani Organics Ltd Asahi Songwon Colors Ltd. 9MFY12(UA) 9MFY13(UA) 9MFY12(UA) 9MFY13(UA) 9MFY12(UA) 9MFY13(UA) Total Income EBITDA EBIT PAT Ratios EBITDA Margin (%) PAT Margin (%) EPS

10 VALUATION GRADE Considerable Upside Potential 5/5 CARE Equity Research assigns a valuation grade of 5/5 to ASCL We have valued the equity shares of ASCL at a Current Intrinsic Value of Rs.88 per share. The valuation has been arrived by using the discounted cash flow valuation methodology based on five year financial projections. Since, ASCL is in the business of manufacturing and sale of pigments, with relatively stable cash flows, we have used the discounted cash flow methodology to arrive at valuation of the equity shares of the ASCL. The following are the key inputs for arriving at the valuation. ASCL: Valuation Assumptions Cost of Equity 15.40% Cost of Debt 9.8% Tax Rate 32.50% D/E Ratio 0.67 WACC 11.9% Source: CARE Equity Research ASCL: Valuation based on DCF methodology (Rs. Crore except per share data) FY13E FY14E FY15E FY16E FY17E PAT (After Minority Interest) Depreciation Interest (1-Tax Rate) Capital Expenditure (27) (8) (0) (0) (0) Increase in Working Capital (15) (14) (17) (16) 3 Free Cash Flow (FCF) (19) Discount Factor PV of FCF (19) Terminal Value (based on P/E multiple) 164 PV of Terminal Value 105 Total Discounted Value of Firm 174 Less: Net Debt (FY13E) 65 Present Value of equity 109 No of Equity Shares (Crores) 1.2 CIV 88 Source: CARE Equity Research At the current market price of Rs.58.9 per share the equity shares of ASCL are trading a one year forward rolling EV/EBITDA multiple of 2.6 times and 0.5 times the adjusted book value per share. Historically, ASCL s equity shares have traded at one year 8

11 Rs/share Rs Crore forward rolling average EV/EBITDA multiple of 3.8 times and an average price to book multiple of 0.8 times. The CIV of Rs.88 per share as arrived by using the DCF methodology results in 0.8 times the FY13 estimated book value per share, which is in line with its historical traded multiple. ASCL: Price to Book Value ASCL: One year forward rolling EV/EBITDA Jun-07 8-Jun-08 8-Jun-09 8-Jun-10 8-Jun x 0.4x 0.6x 0.8x 1.0x Price Jun-07 8-Jun-08 8-Jun-09 8-Jun-10 8-Jun-11 2x 3x 4x 5x 6x EV Source: BSE and CARE Equity Research The CIV of Rs. 88 per share is around 50.2% above the current market price (CMP) of Rs.58.9 per share. As per the valuation grade scale this results in valuation grade of 5/5 for the equity shares of ASCL, indicating that equity shares of ASCL have Considerable Upside Potential. For last fifteen trading days, average closing price of ASCL equity shares have been around Rs 63.6 per share, with average daily volumes of 11,185 shares. Market price of ASCL s equity share had reached a high of Rs 70 per share and low of Rs 58 per share during the same period. 9

12 COMPANY BACKGROUND ASCL, incorporated in December 1990 is promoted by the Jaykrishna family of Ahmedabad. ASCL is engaged in manufacturing and sale of Copper Phthalocyanine (CPC) pigments mainly Green, CPC Blue Crude and Beta Blue from its two plants located at Mehsana and Vadodara districts of Gujarat. CPC Blue Crude is also used in manufacturing of Beta Blue (a downstream product), around 24% of total production during FY12 was used for captive consumption. ASCL has an installed capacity of 1440 Metric Tonnes Per Annum (MTPA) of CPC Green, 10,200 MTPA of CPC Blue Crude and 1,200 MTPA of Beta Blue. ASCL is presently undertaking a capex for debottlenecking its operations along with augmenting capacity for manufacturing of Beta Blue pigments. ASCL: Trends in Revenue Composition 10

13 SNAPSHOT OF THE INDUSTRY The colorant industry comprises of dyes, pigments and intermediates. The basic difference between dyes and pigments are that dyes are soluble in water and find application in textile and leather industry, whereas, pigments are insoluble in water (pigments are either in powdered or granular form) and primarily used in Inks, Paint, Plastic industry etc. The world market for colorant industry is estimated to be valued at $27 billion (Source: Planning Commission s Working Group on Chemicals for formulation of XII th Five Year Plan). During the last decade, the industry grew at an average rate of 2-3% per annum. India is estimated to account for approximately 12.5% of the global colorant industry. Size of the Indian colorant industry was $3.4 billion in FY10 with exports accounting for around 68% share. Domestic colorant industry Domestic colorant industry comprises of 50 large organized players and over 1000 small and medium players under unorganized sector. As per government estimates, overall production capacity of dyestuff was 200,000 MT per annum of which around 45% was for reactive dyes mainly due to easy availability of key raw material vinyl sulphone. Indian dyestuff industry meets more than 95% of the domestic requirement, out of which textile industry consumes nearly 60% and the remaining is shared by paper, leather & other consumer industries. As far as pigments are concerned, the market size is approximately 115,000 MT. The main consumer industries are printing inks, paints, plastics, rubber, etc., accounting for 70% of the end use. Gujarat and Maharashtra account for nearly 95% of the colorant production in the country. During last two decades India and China have emerged as key destinations for pigment manufacturing Owing to high manufacturing cost and stringent environmental control regulations implemented in developed regions like North America and Europe, the production of pigments have gradually shifted to the Asia (especially China and India). All the major players in downstream / pigment consuming industry are either based in Asia or have significant manufacturing setup in the region. 11

14 Significant increase in pigment export from India; also an opportunity for future As manufacturing of pigments have shifted to relatively low cost manufacturing countries (like India and China), exports of organic pigment provides a huge growth potential in future. During the decade ended in March 2012, total revenue from export of Pigments to various countries had contributed around Rs.12,846 crore to the nation s exchequer. Of the total export income generated during the last decade, around 36% of the revenue was generated during last two years which was primarily attributed to significant increase in sales realizations in line with increase in crude oil prices. Although, export sales volume declined marginally during FY12 due to subdued demand from developed countries, given the early signs of economic recovery seen in developed nations, pigment export is again expected to pick-up primarily driven by increased demand for printing inks. Challenges faced by Pigment industry Although, India has emerged as a global supplier of dyestuffs, intermediates, pigments and pigment preparations the key challenges faced by the industry are compliance with stricter environmental norms, increased competition from China and excess capacity in the international market resulting in pressure on margins. With stricter implementation of pollution control norms, the large players in the organized segment of the industry are likely to benefit in the long-run. 12

15 FINANCIAL ANALYSIS Income Statement (Rs. Crores) FY10 FY11 FY12 FY13 P FY14 P FY15 P Operating Income EBITDA Depreciation and amortisation EBIT Interest PBT PAT (After minority interest) Fully Diluted Earnings Per Share* (Rs.) Dividend, including tax * Calculated based on ordinary PAT on Current Face Value of Rs. 10/- per share Balance Sheet (Rs. Crores) FY10 FY11 FY12 FY13 P FY14 P FY15 P Tangible Net worth Debt (incl. Preference Shares) Deferred Liabilities / (Assets) Total Liability Net Fixed Assets, incl. Capital WIP, net of reval reserve Investments Loans and Advances Inventory Receivables Cash and Cash Equivalents Other current Assets Current Assets, Loans and Advances Less: Current Liabilities and Provisions Net Working Capital Total Assets Ratios based on Financials FY10 FY11 FY12 FY13 P FY14 P FY15 P Growth in Operating Income 5.2% 44.7% 27.1% -1.6% 24.3% 6.2% Growth in EBITDA 44.0% 51.4% 45.4% -31.0% 65.7% 13.8% Growth in PAT 288.3% 110.0% 12.3% -45.1% 97.0% 21.2% EBITDA Margin 15.6% 16.3% 18.7% 13.1% 17.5% 18.7% PAT Margin 7.5% 10.9% 9.6% 5.4% 8.5% 9.7% RoCE 13.6% 18.8% 23.8% 12.6% 19.7% 21.6% RoE 13.0% 23.2% 21.6% 10.5% 18.6% 19.4% Net Debt-Equity (times) Interest Coverage (times) Current Ratio (times) Inventory Days Receivable Days Price / Earnings (P/E) Ratio Price / Book Value(P/BV) Ratio Enterprise Value (EV)/EBITDA Source: Company, CARE Equity Research 13

16 EXPLANATION OF GRADES CARE EquiGrade Grid (CEG) Through CEG, CARE Equity Research addresses two critical factors considered by an investor while investing in a particular company s equity shares: 1. Fundamentals: Whether the company is fundamentally sound with respect to its business, its financial position, its management and its prospects. 2. Valuation: What is the Current Intrinsic Value (CIV) of the stock and how it compares vis-a-vis its Current Market Price (CMP). These factors are answered assigning quantitative grades to both these parameters. CEG is the snapshot of Fundamental Grade and Valuation Grade assigned by CARE Equity Research. Fundamental Grade This grade represents how sound the company is fundamentally, vis-à-vis other listed companies in India. This grade captures: 1. Business Fundamentals and Prospects 2. Financial Soundness 3. Management Quality 4. Corporate Governance Practices The grade is assigned on a five-point scale as under: CARE Fundamental Grade Evaluation 5/5 Strong Fundamentals 4/5 Very Good Fundamentals 3/5 Good Fundamentals 2/5 Modest Fundamentals 1/5 Weak Fundamentals Valuation Grade This grade represents the potential value in the company s equity share for the investor over a 1-year period. The Current Intrinsic Value (CIV) or the price arrived by CARE Equity Research on fundamental basis is compared with the Current Market Price (CMP) of the stock and the grade is assigned based on the gap between CIV and CMP of the stock. The grade is assigned on a five-point scale as under: CARE Valuation Grade Evaluation 5/5 Considerable Upside Potential (>25% upside from CMP) 4/5 Moderate Upside Potential (10-25% upside from CMP) 3/5 Fairly Priced (+/-10% from CMP) 2/5 Moderate Downside Potential (10-25% downside from CMP) 1/5 Considerable Downside Potential (>25% downside from CMP) Grading determination is a matter of experienced and holistic judgment, based on relevant quantitative and qualitative factors of the company in relation to other listed companies 14

17 DISCLOSURES Each member of the team involved in the preparation of this grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company. This report has been sponsored by the company. DISLCLAIMER This report is prepared by Credit Analysis & REsearch Limited [CARE]. CARE has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain or from sources considered reliable. However, neither the accuracy nor completeness of information contained in this report is guaranteed. Opinions expressed herein are our current opinions as on the date of this report. CARE s valuation of the security is mainly based on company specific fundamental factors. Equity prices are affected by both fundamental factors as well as market factors such as liquidity, sentiment, broad market direction etc. The impact of market factors can distort the price of the security thereby deviating from the intrinsic value for extended period of time. This report should not be construed as recommendation to buy, sell or hold a security or any advice or any solicitation, whatsoever. It is also not a comment on the suitability of the investment to the reader. The subscriber / user assumes the entire risk of any use made of this report or data herein. CARE specifically states that it or any of its divisions or employees have no financial liabilities whatsoever to the subscribers / users of this report. This report is for personal information only of the authorised recipient in India only. This report or part of it should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person, especially outside India or published or copied for any purpose. Published by Credit Analysis & REsearch Ltd., 4th Floor Godrej Coliseum, Off Eastern Express Highway, Somaiya Hospital Road, Sion East, Mumbai CARE is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE (including all divisions) has no financial liability whatsoever to the user of this product. This report is for the information of the intended recipients only and no part of this report may be published or reproduced in any form or manner without prior written permission of CARE. 15

18 z ABOUT CARE Credit Analysis & REsearch Ltd. (CARE) is a full-service rating company that offers a wide range of rating and grading services across sectors. CARE has an unparallel depth of expertise. CARE Ratings methodologies are in line with the best international practices. CREDIT ANALYSIS & RESEARCH LTD HEAD OFFICE Mr. Ankur Sachdeva Cell: Tel: ankur.sachdeva@careratings.com 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai Tel: care@careratings.com Fax: KOLKATA Ms. Priti Agarwal Cell: Tel: / 1602 E- mail: priti.agarwal@careratings.com 3rd Flr., Prasad Chambers (Shagun Mall Bldg), 10A, Shakespeare Sarani, Kolkata CHENNAI Mr. V Pradeep Kumar Cell: Tel: / Fax: pradeep.kumar@careratings.com Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai AHMEDABAD Mr. Mehul Pandya Cell: Tel: Fax: E- mail:mehul.pandya@careratings.com 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad NEW DELHI Ms. Swati Agrawal Cell: Tel: / swati.agrawal@careratings.com 3 rd Floor, B -47, Inner Circle, Near Plaza Cinema, Connaught Place, New Delhi BENGALURU Mr. Dinesh Sharma Cell: Tel: dinesh.sharma@careratings.com Unit No. 8, I floor, Commander's Place, No. 6, Raja Ram Mohan Roy Road, (Opp. P F Office), Richmond Circle, Bangalore HYDERABAD Mr. Saikat Roy Cell: Tel: saikat.roy@careratings.com 401, Ashoka Scintilla , Himayat Nagar Hyderabad PUNE Mr. Rahul Patni Cell: Tel: rahul.patni@careratings.com 9th Floor, Pride Kumar Senate, Plot No. 970, Bhamburda, Senapati Bapat Road, Shivaji Nagar, Pune JAIPUR Mr. Rahul Jain Cell: Tel: /14 rahul.jain@careratings.com 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road, Near Collectorate Circle, Bani Park, Jaipur