Capital Goods - Refractories. Bloomberg Code: IFGL IN Reuters Code: IFRF.NS

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1 Capital Goods - Refractories Nov 5, 214 IFGL Refractories Nov 5, 214 Ltd India Research Stock Broking Higher Profitability & Strong Return Ratios Exhibit 1: Valuation Summary (Rs. Mn) Bloomberg Code: IFGL IN Reuters Code: IFRF.NS Doubling of capacity at Kandla - Gujarat and Ohio - USA, new capacities to commence production by FY15-16E taking the total capacity to 6.65 lakh pieces in shaped refractory segment. Kandla plant to serve the European markets freeing up capacity at Odisha plant to capitalize on growth in domestic steel industry. We expect Sales, EBIDTA and PAT to grow at a CAGR of 14.4%, 1.6% and 16.5% to reach to Rs.1,179mn, Rs.1,485mn and Rs.889mn, respectively by FY16E. EBDITA and PAT margins to reach to over 14.6% and 8.7% by FY16E due to lower distribution expenses and fiscal benefits. We expect EPS to grow at a CAGR of 18.6% during FY14-16E to reach to Rs.25.7 and RoE and RoCE to reach 21.4% and 26% respectively by FY16E. Operating cash flows and free cash flows to reach Rs.1,16mn and Rs.816mn respectively, while yield on free cash flows to improve to 12% by FY16E. Cash on book and lower debt levels to support inorganic growth to access newer markets and technologies. Valuation At CMP of Rs.199, IFGL trades at 7.7x FY16E earnings per share, which appears to be attractive given the expectations over higher profitability and strong return ratios in the next two years. The capacity expansion program at Kandla and Ohio are for continuous casting products could yield higher profits and large cash flows. We recommend a BUY for a target price of Rs.26, implying 1.2x FY16E EPS, which is 21.5% discount to FY16E Industry average P/E of 13x. Key Risks 1. Fortunes of refractory industry depend on the steel industry and slowdown in the steel sector will directly affect refractory industry. 2. Global alumina, zirconium and resins price rise could adversely affect the profitability of the company. 3. Volatility in currency market will adversely affect the company. 4. Competition from cheaper Chinese supplies. YE Mar FY12 FY13 FY14 FY15E FY16E Net Sales EBIDTA EBIDTA Margin (%) Adj. Net Profit EPS (Rs.) RoE (%) PE (x) Recommendation (Rs.) Performance Source: Bloomberg BUY CMP* 199 Target Price 26 Upside (%) 31 * CMP as on Nov 3, 214 Stock Information Mkt Cap Rs. mn/us$ mn 6894 / wk H/L (Rs.) 22 / 35 3M Avg. Daily Volume (mn).1 Beta (x) 1. Sensex/Nifty 2786 / 8324 O/S Shares (mn) 34.6 Shareholding Pattern (%) Promoter 71.3 FII s 1.2 DII s 1.2 Others 26.3 Stock Performance (%) 1M 3M 6M 12M Absolute Relative to Sensex Technical View The stock is making higher highs from the last one year and has rallied significantly from 26 odd levels in the month of Aug 13 to make an all time high of Good accumulation was seen in the range of 4-6 levels. Even at current levels, the stock is witnessing sustained buying, clearly indicating that long positions are being created even at higher levels, which shows the underlying strength in the stock. The weekly RSI is trading in the overbought territory indicating a minor dip towards 16 levels is possible which shall be used to accumulate the stock from a medium to long term perspective. Analyst Contact De Arul Kaarthick , arul.kaarthick@karvy.com For private circulation only. For important information about Karvy s rating system and other disclosures refer to the end of this material. Karvy Stock Broking is also available on Bloomberg, KRVY<GO>, Thomson Publishers & Reuters Nov-13 Jan-14 Mar-14 IFGL May-14 Jul-14 Sensex Sep-14 1 Nov-14

2 Company Financial Snapshot (Y/E Mar) Profit & Loss (Rs.mn) FY14 FY15E FY16E Net sales Optg. Exp (Adj for OI) EBIDTA Depreciation Interest PBT Tax PAT Profit & Loss Ratios Ebidta margin (%) Net margin (%) P/E (x) EV/EBIDTA (x) Dividend yield (%) Company Background. (IFGL) is a manufacturer of specialised refractories and operating systems for the steel industry. IFGL Specialises in products for continuous casting of steel and offers integrated solutions in the flow control systems. The acquisition include Monocon group, U.K in 25, Hofmann Group-Germany in 28, El Ceramics-USA in 21. IFGL group s eight manufacturing facilities are spread across the globe and has nurtured long standing relationship with large integrated steel producers like Arcelor Mittal, TATA group, Jindal group, SAIL etc.,. IFGL Exports, subsidiary of IFGL, has technical collaboration with Krosaki Harima Corporation, Japan for its Kandla, Gujarat plant which will serve European markets. The company is doubling its capacity at Gujarat and US plants in next two years. Indian operations contribute close to 43% and foreign subsidiaries contribute the rest 57% of the consolidated sales during FY14. In terms of geographical sales distribution, India accounts for close to 2% and International Sales account for 8% of the consolidated sales during FY14. Balance sheet (Rs.mn) FY14 FY15E FY16E Total Assets Net Fixed assets Current assets Other assets Total Liabilities Networth Debt Current Liabilities Balance Sheet Ratios RoE (%) ROCE (%) Net Debt/Equity Equity/Total Assets P/BV (x) Cash Flow (Rs.mn) FY14 FY15E FY16E EBIDTA Other Income Interest Tax Changes in WC CF from Operations Capex Investment CF from Investing Change in Equity Debt Dividends CF from Financing Change in Cash Exhibit 2: Shareholding Pattern (%) Exhibit 3: Revenue Segmentation Others 27% DII 1% FII 1% Promoter 71% Americas 2% Europe 35% Asia excluding India 2% India 43% 2

3 Exhibit 4: Planned Expansion ( PCs/Yr) IFGL Exports EL Ceramics FY14 Phase II Phase III Exhibit 5: Volume Kandla FY14 FY15E FY16E ( PCs/Yr) Exhibit 6: Gross Block & CapEx at Kandla FY9 FFY1 FY11 FY12 FY13 FY14 FY15E FY16E Gross Fixed Assets CapEx IFGL specializes in manufacturing of continuous casting of specialized refractory and flow control products for integrated steel producers from eight manufacturing facilities built with an appropriate strategy mix of organic and inorganic expansion. In the past, IFGL has turned around itself from a loss making potential BIFR candidate in late 9 s to a global player by FY1 is worth a mention. Capacity Expansion to drive volume growth IFGL Exports Kandla plant and EL Ceramics Ohio plant are doubling the capacity by additional 75k and 85k pieces to about 1.5lakh and 1.7lakh pieces by Q1FY16. The management has confirmed that the capacity at Kandla plant to go up further by 85k pieces to about 2.45lakh pieces through FY17; hence, taking the total capacity from current 4.2lakh to 6.65lakh, thus, outlining 58% additional capacity coming on stream during FY15-FY17. We expect the cumulative utilization levels to reach between 8%-9% levels post CapEx. Kandla plant (IFGL Exports Ltd.) specializes in continuous casting product line and exports the products to European markets. Notably, the steel demand in Euro area is expected to grow by 2.2% as the Euro area GDP is estimated to grow by 2.5%, thus, reflecting good demand for specialized refractory products. Odisha Plant to Cater Domestic Market We estimate the export share from Odisha plant to reduce to 53% and 42% by FY15 & FY16 as the exports of continuous casting products could move to Kandla plant. The freed up capacity at Odisha plant will allow for capitalizing domestic steel sector growth as the integrated steel capacity coming on stream to drive volume for shaped refectories segment and could improve utilization levels to over 8% levels during FY15 & FY16. Exhibit 7: Utilization levels for Shaped Refractory at Odisha (%) Exhibit 8: Exports Share at Odisha Plant (%) Domestic Exports Exhibit 9: Upcoming Steel Projects Kandla Gujarat Maharashtra FY16 Karnataka IFGL Plants FY17 FY15 Source: CMIE Andhra Pradesh Chhattisgarh FY15 FY16 FY15 Jharkhand FY15 FY15 FY15 West Bengal Kalunga FY15 Odisha FY17 Expected Completion Co. Name Project Name FY15 JSPL Raigarh Plant Renovation&Modernisation Project FY15 SAIL Rourkela Steel Project FY15 SAIL Burnpur IISCO Modernisation&Expansion Project FY15 JSW Torangallu Cold Rolling Mill Complex Project FY15 SAIL Bhilai Steel Project FY15 SAIL Bokaro Steel Project FY15 SAIL Durgapur Steel Project FY16 RINL Visakhapatnam Steel Expansion Phase-I Project FY16 JSW Dolvi Hot Rolled Coils Expansion Project Phase I FY17 RNIL Visakhapatnam Steel Expansion Phase-II Project FY17 JSPL Angul Steel Phase-I Project 3

4 Exhibit 1: Distribution to Sales (%) FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 Cost arbitrage at Kandla plant Volume growth to cost less as the exports to European markets will be from port based SEZ at Kandla, Gujarat which is expected to deliver dual benefit of lesser distribution expenses and significant tax benefits. Distribution expenses as a percent of sales to remain at less than 3% of Sales by FY16E since the sea route is close to European markets. We expect the impact at PAT level to be around 1-12bps during FY15 and FY16. IFGL Exports, the 51% subsidiary, to benefit by operating from SEZ as the plant got commissioned during May 13, while the other factors like income tax holiday period, tax exemption on import of raw materials, and other indirect tax exemptions are likely to act as cushion for sustaining higher margin levels. Exhibit 11: Raw Material to Sales (%) 52% 47% 41% 36% 3% FY9 FY1 FY11 FY12 FY13 FY14 FY15E Actual Average FY16E Commodity Prices to remain Stable Alumina, Zirconia and Resin constitute close to half of the raw martial cost and a quarter of the sale value; together with other raw materials the ratio of raw material to sales stood at 46.1% during FY9-14. Raw martial prices are off the mean as the expectation of proximity of commodity super-cycle driven by China remains distant. We expect the downward trend in the ratio to continue as the prices globally have normalised and also due to local sourcing of raw materials. We believe the raw material to sales ratio to reach to 39.5% of sales by FY16E. Exhibit 13: Past Acquisitions (Rs. mn.) Year Acquired Company Cost 25 Monocon UK Goricon UK 7 28 Hoffman Germany El Ceramics USA 59 Source: Company Inorganic Growth Route for New Markets and Technology Over the decade, IFGL has acquired several companies in US, UK and Germany. Brazilian operations were shut and all the other assets are running profitably. Given the excess refractory capacity across the globe, inorganic route is best suitable for entering new markets and in acquiring new technologies/ product range. As of now, there are no concrete plans for acquisition; hence, leaving larger scope for reduced debt levels and stronger balance sheet by FY16. Exhibit 14: Country wise EBIT Margin (%) FY9 FY1 FY11 FY12 FY13 FY14 Europe Americas Asia Excluding India Exhibit 15: Acquired Companies PAT Margin (%) 14.% 8.% 2.% -4.% FY9 FY1 FY11 FY12 FY13 FY14-1.% El Ceramics Hofmann Ceramic GmbH Mono Ceramics Monocoon International Tianjin Monocon Aluminous Bio-Ceramics Business Globally Bio ceramics business is estimated to be around US$3.5 billion and IFGL operates in this space through its subsidiary - IFGL Bio Creamics, manufacturing clinically proven bio ceramics products for Dental, Oral & Maxillofacial, Orthopaedic and Opthalmic segments. IFGL has built the entire product portfolio with technology assistance from Central Glass and Ceramic Research Institute - Kolkata, Sree Chitra Tirunal Institute for Medical Sciences and Technology- Trivandrum, National Metallurgical Laboratory-Jamshedpur. IFGL is currently expanding the offering and has positioning the venture as a minimal profitable venture. 4

5 Growth Driven by Currency Volatility Nov 5, 214 Volatility in the currency markets caused sale value to be inflated by a CAGR of 4.6% and the adjusted sales growth stands at 8.9% during FY9-14. Significant of it came from US subsidiary El Ceramics while Chinese operations slowed compared to FY9. Exhibit 16: Currency Adjusted Sales Indexed for FY9 Prices 3 2 Exhibit 17: Sales Growth In value terms 2% 15% 1 FY9 FY1 FY11 FY12 FY13 FY14 Base Value Europe Americas Asia Excluding India 1% 5% % 2.% 15.% FY11-14 Domestic 17.% 1.4% FY14-16E Overseas Steel and Refractory Sector Outlook The demand for specialized refractory products had grown significantly due to use of advanced technology in production processes leading to reduced per tonne usage of refractory products for steel production from 3kg to less than 15kg. We believe the demand for non-conventional refractory and flow control systems to grow which could expand margins going forward for the companies. Exhibit 18: World GDP & World Steel Production Exhibit 19: Euro Area GDP & Euro Steel Production FY9 FY1 FY11 FY12 FY13E FY14F FY15F FY16F FY9 FY1 FY11 FY12 FY13E FY14F FY15F FY16F Steel Prod. (Mn tns-rhs) World GDP(%-LHS) Steel Prod. (' tns-rhs) Euro Area GDP(%-LHS) Exhibit 2: India GDP & India Steel Production FY9 FY1 FY11 FY12 FY13E FY14F FY15F FY16F Steel Prod. (' tns-rhs) India GDP (%-LHS) Exhibit 21: World and India - Refractory Production (Mn. tns) FY9 FY1 FY11 FY12 FY13E FY14F FY15F World refractory prod. (LHS) India refractory prod. (RHS) FY16F Source: World Bank - Global Economic prospectus report June 214, World Steel, Ministry of Steel, Planing Commission, Bloomberg, Karvy Research; Note: E-Estimates, F: Forecast 5

6 Exhibit 22: Business Assumptions Y/E Mar (Rs. Mn) FY13 FY14 FY15E FY16E Comments India Business (Consolidated) Revenue Revenue Growth (%) We have factored in volume growth after currency adjustments EBITDA EBITDA Margins (%) PAT (normalized) Combined Normalized PAT We expect margins to sustain at current levels Fully Diluted EPS Fully Diluted EPS Growth (%) CapEx (ex. Acquisition) We assume CapEx at Gujarat & Ohio slightly higher than management guidance Net CFO Net Debt Free Cash Flow Exhibit 23: Karvy vs Consensus Revenues (Rs. mn) Karvy Consensus Divergence (%) Comments FY15E FY16E EBIDTA (Rs. mn) Factoring in higher volume growth FY15E Factoring operating cost at slightly lower FY16E levels EPS (Rs.) FY15E FY16E , Bloomberg Factoring in high margin business growth 6

7 Operating and Financial Highlights Sales to grow over 14.5% during FY14-16E Sales grew from Rs6bn to Rs.7.8bn representing a CAGR growth of 18% during FY El Ceramics & CUSU were acquired during FY11 causing spike in growth rates. We believe the sales to grow at a CAGR of 14.5% to reach to Rs.1.2bn by FY16E primarily driven by volumes from IFGL Exports. Exhibit 24: Consolidated - Sales & Sales Growth FY9 FY1 FY11 FY12 FY13 FY14 FY15E FY16E Sales (Rs. bn) Growth 3% 2% 1% % Exhibit 25: Standalone Sales - Domestic & Exports (Rs.bn) Domestic Sales Exports Exhibit 26: Consolidated - India & International Sales (Rs.bn) India Sales International Sales Exhibit 27: Geographic Mix of Subsidary Sales (Rs.bn) Europe Americas India EBIDTA Margin to Expand to 14.4% EBIDTA grew from Rs.491mn to Rs.1,219mn, representing a CAGR growth of 35% during FY11-14, while the margins averaged around 12.5% due to volume growth through acquisition of high margin continuous casting products business in the US on one hand and broad based slow down across steel industry. We believe the EBIDTA to reach Rs.1485mn, representing a CAGR growth of 1.4% and margins to sustain over 14% during FY14-16E. Exhibit 28: Consolidated EBIDTA Exhibit 29: EBIDTA Margin 16% 14.7% 12.9% 14.6% 12% 11.2% 13.3% 8.2% 8% 7.6% 7.3% 4% Standalone Consolidated 7

8 Exhibit 3: EBIDTA Margin - Country wise India Europe Americas EBIDTA margins of Indian and American operations to remain healthy as the utilization levels of upcoming facilities at Kandla and Ohio to remain between 8%-9% levels. Exhibit 31: Consolidated PAT PAT and PAT Margin PAT grew from Rs.237mn to Rs.655mn, representing a CAGR growth of 4% while the margin fluctuated in a range averaging to 5.8% during FY We believe the PAT to reach to Rs.889mn, representing a CAGR growth of 16.5% and margins to sustain over 8% during FY14-16E due to cost savings in the form of distribution cost and fiscal benefits for port based SEZ facility. Exhibit 32: PAT Margin % 6% 3% 8.1% 5.% 6.3% 8.4% 8.3% 3.6% 8.7% 2 FY9 FY1 FY11 FY12 FY13 FY14 FY15EFY16E % 1.3% Standalone Consolidated Exhibit 12: Cash Flow & Yield on FCF % 11% 12% FY14 FY15E FY16E OCF FCF 15% 1% 5% Robust Operating Cash flow and Free Cash Flow The company is expected to maintain CapEx at Rs.159mn for FY15 and Rs.283mn for FY16 which is a minimal outgo for de-bottlenecking the manufacturing facilities; allowing for faster ramp-up of production. Cash flow is expected to improve on the back of strong revenue growth driven by sustained utilization levels at existing facilities and volume growth from upcoming high margin production facilities. Cash flow from operations to reach to Rs.1,9mn by FY16E and the FCF yield to be higher at 12%. The management has not indicated any new capacity additions beyond Gujarat & Ohio plant expansion. Return ratios RoE to reach to 21% and RoCE to reach to 26% by FY16E, an improvement driven by higher growth in continues casting refectories and operational efficiency across plants. Exhibit 33: Return Ratios RoE (%) RoCE (%) 8

9 Valuation At CMP of Rs.199, IFGL trades at 7.7x FY16E earnings per share, which appears to be attractive given the expectations over higher profitability and strong return ratios in the next two years. The capacity expansion program at Kandla and Ohio for continuous casting products could yield higher profits and large cash flows. We recommend a BUY for a target price of Rs.26, implying 1.2x FY16E EPS which is 21.5% discount to FY16E Industry average P/E of 13x. On EV/EBIDTA basis IFGL has traded around a mean of 6.4x over five year period and the stock is currently trading at 4.3xFY15 EV/EBIDTA. Exhibit 34: P/E Sep-1 Dec-1 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 P/E ~Mean ~+1SD ~-1SD Exhibit 35: EV/EBIDTA Sep-1 Dec-1 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 EV/EBDITA ~Mean ~+1SD ~-1SD 9

10 Exhibit 36 (a): Comparative Valuation Summary (US $) CMP Mcap EV/EBIDTA (x) P/E (x) EPS (Mn) FY14 FY15 FY16 FY14 FY15 FY16 FY14 FY15 FY Vesuvius India Ltd Orient Refractories Ltd Average of Domestic Peers Global Peers RHI AG Vesuvius PLC Magnesita Refratarios SA Average of Global Peers Source: Bloomberg Exhibit 36 (b): Comparative Valuation Summary (US $) CAGR % (FY14-16) RoE (%) Price Perf (%) Sales EBIDTA EPS FY14 FY15 FY16 3m 6m 12m Vesuvius India Ltd Orient Refractories Ltd Average of Domestic Peers Global Peers RHI AG Vesuvius PLC Magnesita Refratarios SA Average of Global Peers Source: Bloomberg Exhibit 37: Sensitivity of Earnings and Target Price to Change in Volumes EBIDTA margin (%) Base Case assumption Change in volume growth from Base Case -1% -8% -5% % 15% 18% 2% FY15 BPS FY16 BPS EPS (Rs.) FY FY Target price Change in TP (%) , NA: Not Applicable We assume higher volume and marginal pricing power in our growth estimates for FY15 and FY16, implying a CAGR growth of 14.3% in revenue. Our Operating Profit and EPS could vary in different scenarios from the base case as we incorporate change in volume assumptions thus reflecting change in target price in a band of -8.8% to 8.2%. We believe our base case is fairly weighted for risks. 1

11 Exhibit 38: Company Snapshot (Ratings) Nov 5, 214 Low High Quality of Earnings 99 Domestic Sales 99 Exports 99 Net Debt/Equity 99 Working Capital req 99 Quality of Management 99 Depth of Management 99 Promoter 99 Corporate Governance We believe earning quality to be fair and we do not observe any adverse standards or practices that could impact quality of earnings. 99 Consolidated revenues during FY14 between Domestic and Exports were at 2:8. Exports business is geographically diverse between UK, America, Germany and China. 99 Manageable borrowing levels and working capital practices best reflects the financial strength of the company that has successfully acquired businesses from diverse geographies. 99 The depth and quality of management in choosing strategic fit in terms of geographical and product diversity with focus on technology base is best in the industry while the M&A trend in Indian refractories business is quite opposite. Key Risks Dependence on Steel Industry Over 7% of the refractory product finds its use in the steel sector for use in furnace and steel flow control systems. Slower than expected economic recovery could impact the global steel demand by an elasticity of.95x leading to slow down in the refractory segment which is inevitable for the sector as a whole. Excessive Capacity Globally refractory industry suffers from excessive capacity and under utilisation of capacity across geographies in the traditional refractory product segment. Utilisation in this segment stands at less than 6% levels and China supplies crowding the market on the back of cost arbitrage hammering pricing power of suppliers from other countries. Imported Raw Material Raw Materials constitute close to 52% of the total raw material used by the company for manufacturing of the refractory products. Alumina, Zirconium, Graphite, Magnesia and resins constitute major portion of the raw material bill and volatility in the commodity prices could directly impact operating profit. ForEx Fluctuations Primary transactions of imports (5%) and revenues (8%) are recorded other than Indian rupees involving US Dollar, Euro, Pound. We have factored in reasonable volatility into our analysis yet excesses could become new normal which could be significant. 11

12 Financials Exhibit 39: Income Statement YE Mar (Rs. Million) FY12 FY13 FY14 FY15E FY16E Revenues Growth (%) Operating Expenses EBIDTA Growth (%) Depreciation & Amortization Other Income EBIT Interest Expenses PBT Tax Adjusted PAT Growth (%) Exhibit 4: Balance Sheet YE Mar (Rs. Million) FY12 FY13 FY14 FY15E FY16E Cash & equivalents Sundry Debtors Inventory Loans & Advances Investments Gross Block Net Block CWIP Miscellaneous Total Assets Current Liabilities & Provisions Debt Other Liabilities Total Liabilities Shareholders Equity Reserves & Surplus Total Networth Minority Interest reserve Total Networth & Liabilities

13 Exhibit 41: Cash Flow Statement YE Mar (Rs. Million) FY12 FY13 FY14 FY15E FY16E PBT Depreciation Interest Tax Paid Inc/dec in Net WC Other Income Other non cash items Cash flow from operating activities Inc/dec in capital expenditure Inc/dec in investments Others Cash flow from investing activities Inc/dec in borrowings Issuance of equity Dividend paid Interest paid Others Cash flow from financing activities Net change in cash Exhibit 42: Key Ratios YE Mar (%) FY12 FY13 FY14 FY15E FY16E EBIDTA Margin (%) EBIT Margin (%) Net Profit Margin (%) Dividend Payout ratio Net Debt/Equity RoE (%) RoCE (%) Exhibit 43: Valuation Parameters YE Mar FY12 FY13 FY14 FY15E FY16E EPS (Rs.) DPS (Rs.) BV (Rs.) PE (x) P/BV (x) EV/EBIDTA (x) EV/Sales (x)

14 Stock Ratings Absolute Returns Buy : > 15% Hold : 5-15% Sell : <5% Connect & Discuss More at For further enquiries please contact: research@karvy.com Toll Free: Analyst certification Disclosures Appendix The following analyst(s), who is (are) primarily responsible for this report, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report. Disclaimer The information and views presented in this report are prepared by Karvy Stock Broking Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Stock Broking nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies are required to disclose their individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures nor other derivatives related to such securities. Karvy Stock Broking Limited Karvy Centre, Avenue-4, 2nd Floor, Road No: 1, Banjara Hills, Hyderabad India. Tel: ; Fax: For More updates & Stock Research, visit 14