Apollo Tyres (APOTYR) 172

Transcription

1 Result Update Rating matrix Rating : Hold Target : 180 Target Period : 12 months Potential Upside : 5% What s Changed? Target Changed from 160 to 180 EPS FY17E Changed from 18.8 to 20.3 EPS FY18E Changed from 19.6 to 22.2 Rating Unchanged Quarterly Performance ( Crore) Q1FY17 Q1FY16 YoY Q4FY16 QoQ Revenues 3, , , EBITDA EBITDA (%) bps bps Reported PAT Key Financials Crore FY15 FY16 FY17E FY18E Net Sales 12,726 11,708 12,852 14,071 EBITDA 1, , , ,161.4 Net Profit , , ,130.1 EPS ( ) Valuation summary FY15 FY16 FY17E FY18E P/E (x) Tgt P/E (x) EV/EBITDA (x) P/BV (x) RoNW (%) RoCE (%) Stock data Particular Amount Market Capitalization ( Crore) 8756 Crore Total Debt (FY16) ( Crore) 1350 Crore Cash & Investments (FY16) ( Crore) 716 Crore EV ( Crore) 9390 Crore 52 week H/L ( ) 215 / 128 Equity capital ( crore) 50.4 Crore Face value ( ) 1 Price performance (%) 1M 3M 6M 12M Apollo Tyres Ltd JK Tyres CEAT Ltd MRF Ltd Balkrishna Industries Ltd Research Analyst Nishit Zota nishit.zota@icicisecurities.com Vidrum Mehta vidrum.mehta@icicisecurities.com Strong (revenue + margin) performance! August 11, 2016 Apollo Tyres (APOTYR) 172 Apollo Tyres (ATL) consolidated revenues grew 16.1% YoY to 3,304 crore (vs. our estimate of 2,923 crore). Growth was primarily volume driven, up 13% YoY & 8% YoY for Indian & European operations, respectively Revenues from Asia Pacific Middle East & Africa (APMEA) increased 4.7% YoY to 2,554 crore while revenue from Europe & America (EA) increased 23.5% YoY to 1058 crore. Its acquisition of Reifencom clocked revenue of ~ 310 crore in Q1FY17 Consolidated EBITDA margins were at 16.3% (up 34 bps QoQ) vs. our estimate of 15.2% mainly on the back of gross margin expansion of 56 bps QoQ (despite higher NR prices) & lower employee expense Higherthanexpected revenue & margins improved profitability, with PAT at 315 crore (up 8.3% YoY) vs. our estimate of 220 crore The management expects volume driven double digit revenue growth. The company is also expanding its capacity at its Chennai & Hungary plant with an investment of > 3,000 crore in FY17E Play on CV radialisation remains key catalyst for domestic business ATL is well placed to benefit from the radialisation story in India. At present, the company enjoys a market share of ~28% in TBR and is likely to improve radial volumes though capacity constraint would hinder immediate growth possibilities. Phase 1 of radial capacity (to add incremental 3,000 units) is likely to come on stream in Q4CY16, thus driving its growth, going forward. The domestic tyre industry continues to face challenges from imported Chinese tyres that enjoy ~35% market share in the domestic TBR replacement segment. Any positive action from the government, which has initiated a probe into dumping of radial tyres from China, would be positive for ATL. The management expects healthy double digit volume growth (largely volume driven) from the domestic market on the back of capacity expansion & demand recovery in both OEM & replacement segment, going forward. Strong brand + acquisition = Support its European performance! In FY16, ATL s European operations largely faced challenges from its internal operations (implementation of SAP increased the inventory level & its working capital requirement). Further damage was also due to external factors like unfavourable winter & currency movement. However, now internal issues have largely been solved & the management expects volumes to recover in FY17E. The positive outcome of the tyre test result is likely to enhance the Vredestein brand. Also, the acquisition of Reifencom, which is one of the leading tyre retail organisation in Germany (with >37 stores) would also allow further brand visibility. The acquired company Reifencom posted revenue of 310 crore in Q1FY17 vs. 171 crore in Q4FY16. Overall utilisation level was ~90% in FY16. Hence, ATL has planned a greenfield plant in Hungary worth ~ 500 million over the next two to three years with phase 1 likely to commence in Q1CY17. Demand to revive but margins to decline! ATL is investing in more diversified, rapid growth areas coupled with a larger scale of business in coming years. Going forward, the management expects demand to recover. Hence, we build in revenue CAGR of 10% in FY1618E. However, profitability is likely to get impacted mainly on account of 1) rising input price (NR) & 2) huge capacity expansion to result in higher interest outgo. Thus, we retain our HOLD rating, valuing the stock at 8x FY18E EPS to arrive at a target of 180. Any positive development from the government in terms of restricting import of Chinese tyres, will be a key upside risk for ATL. ICICI Securities Ltd Retail Equity Research

2 Variance analysis Consolidated ( crore) Q1FY17 Q1FY17E Q1FY16 YoY (%) Q4FY16 QoQ (%) Comments Total Operating Income 3, , , , Strong volume led growth in both India & European operations lifted overall volumes Raw Material Expenses 1, , , , Input prices (NR + crude derivates) remained soft Employee Expenses Other expenses EBITDA EBITDA Margin (%) bps bps EBITDA margin expanded primariliy due to higher gross margin & lower employee expense Depreciation Interest Other income Exceptional items NA 0.0 NA Tax PAT Higherthanexpected revenue and margins supported profitability, which came in higher than our estimates EPS ( ) Key Metrics Revenue ( crore) India (APMEA) 2,554 2,373 2, , Registered volume growth of 13%. However, the same was offset by price cut (of 7%) resulting in moderate revenue growth Europe (EA) 1, The company's Vredestein brand reported volume growth of ~8% YoY. Its acquisition of Reifencom (distributor) in Europe has a positive outcome; reporting sales of ~ 310 crore EBIT Margin (%) India bps bps Margins came in above our estimate Europe bps bps Change in estimates FY17E FY18E ( Crore) Old New % Change Old New % Change Comments Revenue 12,673 12, ,987 14, With the management's strong guidance on volume growth, we have revised our revenue estimate upwards EBITDA 1,903 1, ,020 2, EBITDA Margin (%) bps bps Better product mix (higher share of radial tyres) + cost efficiency in addition to some benefit of lower input cost will expand margins PAT 960 1, ,001 1, Higher revenue & margins to drive profitability EPS ( ) Assumptions Current Earlier Comments FY15 FY16 FY17E FY18E FY17E FY18E India Total Tonnage Sold (MT) 425, , , , , ,069 Volumes projection scaled upwards post management guidance Realisation per kg ( ) Higher share of radial tyres to improve the overall realisation Natural Rubber price ( /kg) According to the management, NR prices are likely to remain stable in the near term Europe Total Tonnage Sold (MT) 71, , , , , ,105.6 Volumes revised upwards Realisation per MT ('000 ) 6, , , , , ,631.3 ICICI Securities Ltd Retail Equity Research Page 2

3 Key conference call takeaways The management has guided for double digit growth in FY17E and is expecting a demand recovery in both domestic as well as European operations. They expect its standalone EBITDA margin of 18% in FY16 to sustain, going forward. Imported Chinese tyres remain a key concern for the domestic tyre industry impacting its growth For Q1FY17, consolidated sales increased 16% YoY mainly due to 1) strong volume growth of 13% YoY & 8% YoY in domestic & Europe market, respectively, and 2) its acquisition of Reifencom (distributor), which clocked revenue of ~ 310 crore in Q1FY17. However, the company faced pressure in terms of lower pricing growth, thereby partially offsetting its overall revenue growth The acquisition of Reifencom, which is one of the leading tyre retail organisations in Germany (with >37 stores) is helping the company in terms of brand visibility in the region. The business is more cyclical in nature with June & December quarter being good while March & September quarter are muted ones for the company. The business is a lower margin one, with EBITDA margin in the range of 24% For FY17E, the management has planned huge capex at its Chennai and Hungary plants. Overall capex for FY17E is likely to be ~ 3,200 crore ( 1,700 crore domestic & 1,500 crore for European operations). The management has said that this is the peak year of capex and then the investment would start tapering off, going forward At present, ATL s truck bus radial (TBR) capacity is at 6,000 tyres/day (and is expected to ramp up to 12,000 tyres/day over the next 1218 months). Its truck bus bias (TBB) capacity is at 10,000 tyres/day while passenger car radial (PCR) capacity is at 32,000 tyres/day. In terms of tonnage wise breakup, domestic capacity (India) is at 1450 MT/day (with 350 working days) while European capacity is at 200 MT/day (with 340 working days) The company has taken a price cut in the TBR & TBB segment in the range of 12% in July 2016 As of June 2016, its gross & net debt are at ~ 2180 crore & ~ 1300 crore against ~ 1460 crore and ~ 700 crore in March 2016 On the raw material front, the management expects overall NR prices to remain benign in the near to medium term. The full impact of higher rubber prices (which are up since March 2016) would be seen in Q2FY17E. Hence, its margins could be impacted In the terms of revenue break up, replacement: OEM mix is at 75:25, respectively. Segment wise, 4W (Truck, bus & PV) account for 80% of revenue while the remaining 20% is from LCV and other farm tyres. The company has entered the 2W space with the launch of new tyres. The distribution of its 2W tyres is done through its own dealers, which earlier use to deal with other players 2W tyres, since ATL had not entered the space. The management has said that they would not purse 2W volume at the cost of profitability ICICI Securities Ltd Retail Equity Research Page 3

4 Company Analysis Global player with good business diversification across geographies! A quick glance at Apollo s consolidated performance shows an increase in contribution of the European subsidiary from FY10 onwards. Revenue and profit contribution from Europe has increased from ~24% in FY10 to ~30% in FY15. The share had dropped to 27% in FY16 primarily due to internal factors (namely implementation of SAP impacting sales volumes, resulting in increase in inventory and working capital) and due to external factor (unfavourable winter season and currency movement). However, the management remains optimistic that demand will recover in FY17E with a large part of internal issues sorted out. The company is also expanding its capacity with an investment of ~ 500 million in Eastern Europe over the next two to three years. For FY17E, the management has guided an investment of ~ 200 million in Europe, which would help the company to serve the increasing demand, going forward. The company has completed the restructuring of its South African operations and closed its operations in FY15. Henceforth, it would only be a trading subsidiary and would not be contributing meaningfully to its consolidated revenue. Exhibit 1: Revenue breakup Geographywise 15,000 ( crore) 12,000 9,000 6,000 3,000 1,097 1,990 5,037 1,183 2,234 5,490 1,308 2,850 8,158 1,502 2,992 8,507 1, ,943 4,032 8,712 8,938 3,284 8,682 3,569 9,363 3,771 10,389 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E India Europe South Africa Exhibit 2: Profitability contribution Geographywise 2,000 ( crore) 1,600 1, ,069 1,292 1,273 1,416 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E India Europe ICICI Securities Ltd Retail Equity Research Page 4

5 Revenue growth strong on radial TB side as overall recovery muted! We have factored in revenue growth at ~10% CAGR in FY1618E (largely in line with the management guidance of double digit growth), mainly led by volume growth. We believe the domestic market will improve but the radialisation trend in the truck bus segment would hurt companies with higher nylon capacity. The radialisation trend has promoted the companies for higher capacity within the segment in India. ATL s truck bus radial (TBR) capacity is currently operating at >90% utilisation level. Therefore, it is expanding its capacity from 6,000 units to 12,000 units in a phased manner over the next 1218 months. Phase 1, which is likely to commence in Q4CY16 would result into incremental capacity of ~3,000 TBR units will drive its growth from H2FY17 onwards. The competition from cheaper imported Chinese tyre in the M&HCV space is taking away some of the replacement demand from Indian branded tyre players, thus registering moderate growth for ATL. Any favourable step from the government, which has initiated a probe into dumping of radial tyres from China, is positive for ATL. Exhibit 3: We build modest revenue growth at 10% CAGR in FY1618E ( crore) 18,000 15,000 12,000 9,000 6,000 3, ,868 12,153 12, , ,785 11,793 12, FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E Sales % growth , (%) EBITDA margins to moderate! ATL s margins have expended from 9.6% to 15.1% from FY12 to FY15 and further increased to 16.7% in FY16 on the back of a reduction in raw material prices. Prices of natural rubber (NR account for ~40% of raw material cost) declined from 250/kg in 2011 to ~ 92/kg in February However, since then, NR prices have sharply moved northwards and are currently trading at 140/kg. Stiff competition from imported Chinese tyres is resulting in lower pricing power in addition to higher NR prices would create some pressure on margins for ATL, going forward. The management has guided that full impact of higher NR prices would be seen in Q2FY17. This will impact its margins, going forward. Therefore, we have built in lower margins estimates of ~15.3% in FY17E, FY18E, respectively. ICICI Securities Ltd Retail Equity Research Page 5

6 Exhibit 4: EBITDA margins to remain strong over FY1518E ( crore) 2,500 2,000 1,500 1, ,166 1,457 1,876 1,931 1,968 1,976 2,161 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E (%) EBITDA EBITDA Margins (%) Exhibit 5: Margin movement with RM trend (%) Q4FY Q1FY Q2FY Q3FY Q4FY Q1FY Q2FY Q3FY Q4FY Q1FY Q2FY15 Raw materials/sales Contribution 52.4 Q3FY Q4FY Q1FY Q2FY Q3FY16 OPM (LHS) 49.9 Q4FY Q1FY (%) Exhibit 6: Declining trend of rubber prices! ( /Kg) Jun11 Aug11 Oct11 Dec11 Feb12 Apr12 Jun12 Aug12 Oct12 Dec12 Feb13 Apr13 Jun13 Aug13 Oct13 Dec13 Feb14 Apr14 Jun14 Aug14 Oct14 Dec14 Feb15 Apr15 Jun15 Aug15 Oct15 Dec15 Feb16 Apr16 Jun16 Aug ICICI Securities Ltd Retail Equity Research Page 6

7 Strong capital structure in capital intensive, cyclical business! Despite the capital intensiveness and cyclicality of the business, ATL has managed to maintain decent balance sheet strength. With FY16, net D/E at comfortable ~0.1x levels, we believe this is the company s greatest strength in the good RoCE business. We believe that as the company has a huge expansion plan of ~ 3200 crore in FY17E, debt levels are likely to increase, going forward. Despite this, we believe it would be maintained at a decent level of D/E of 0.3x. This is since CFO generation remains strong and would contribute to the bulk of the expenditure. Exhibit 7: Comfortable debt position in high RoCE business! (x) FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E (%) Nebt Debt/Equity RoCE Strong CFO generation with manageable debt levels, despite capex plans! From ~ 295 crore in FY11, the CFO has increased to ~ 1396 crore in FY16, mainly due to lower input cost (natural rubber) and more price discipline maintained by domestic players in the past. With OEM demand soon likely to revive, we expect volumes to improve, going forward. This would further sustain CFOs even as ATL embarks on a capex in FY17E in Eastern Europe and on enhancing capacity in the domestic business. Exhibit 8: CFOs on up trend! 2,800 2,400 2,000 ( crore) 1,600 1, ,222 2,550 1, ,282 1, , ,396 1, ,055 3,200 1,460 1,399 1, FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E CFO Capex Debt ICICI Securities Ltd Retail Equity Research Page 7

8 Profitability to remain at elevated levels as demand returns! With the expected demand revival, we believe volumes will improve as OEM demand is likely to increase, thereby driving its revenue going forward. However, we have revised and moderated our PAT estimates as the higher debt for funding the capacity expansion programme and lower margins (rise in raw material cost) is likely to bring down profitability. Despite the same, profitability is likely to remain at decent levels, with PAT margins likely to come in at 8% each for FY17E & FY18E. Exhibit 9: Profit margins to remain as operational improvement kicks in!!! 1, ( crore) 1, , ,015 1, , , (%) FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E PAT PAT Margin (%) 2 Source: Company press release, ICICIdirect.com Research Exhibit 10: EBITDA growth vs. interest/depreciation trend 2,500 2,000 ( crore) 1,500 1, , ,457 1,876 1,931 1,968 1,976 2, FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E EBITDA Interest Depreciation ICICI Securities Ltd Retail Equity Research Page 8

9 Outlook and valuation ATL s revenue growth prospects remained subdued in the past. However, it is expected to improve assuming the demand recovery from the OEM space. The company is further investing in its TBR capacity (where its current utilisation is >90% and there is a shift in trend from bias to radial tyres in India). This is likely to drive its volume growth, going forward. Similarly, in Europe, its new facility is slated to aid the current capacity crunch faced by Vredestein coupled with strong domestic demand, which is expected to improve from FY17E. The initial sign of the demand recovery was witnessed from strong volume growth of 13% YoY & 8% YoY in domestic & European operations, respectively, in Q1FY17. With a decent D/E profile, return ratios and strong operating cash flow, the company is much better placed in this business cycle visàvis previous up cycles due to its largely diversified and global scale of business. The management has guided for double digit growth couple with stable margins in FY17E. Hence, we have built in revenue CAGR of 10% in FY16 18E. However, we believe its profitability is likely to get adversely impacted mainly on account of 1) rising raw material cost (NR prices) & 2) huge capacity expansion plan (~ 3200 crore for FY17E) resulting in higher interest outgo impacting the profitability. Thus, we retain our HOLD rating, valuing the stock at 8x FY18E EPS to arrive at a target price of 180. Any positive development from the government in terms of restricting imports of Chinese tyres, will be the key upside risk for ATL. Exhibit 11: Valuation Revenues Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY FY FY FY17E FY18E ICICI Securities Ltd Retail Equity Research Page 9

10 Recommended history vs. consensus chart ( ) (%) 0 Jul14 Nov14 Mar15 Jul15 Nov15 Mar16 Jul Price Idirect target Consensus Target Mean % Consensus with BUY Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Oct10 Rubber prices start moving up on production concerns in Thailand on excessive rains Aug11 Rubber prices begin to stabilise as production picks up Jun13 Apollo announces Cooper Tire deal acquisition Oct13 Cooper deal under pressure on China labour strike Oct13 Cooper Tire files suit against Apollo Dec13 Cooper Tire terminates deal with Apollo; court dismisses Cooper appeal Feb14 Cooper Tire files suit against Apollo Jun14 Apollo to invest ~ 400 crore at its Kerala facility to expand its Offhighway tyre capacity Sep14 Company to invest greenfield facility at Hungary and is likely to invest Euro 475 million over next 4 to 5 years Sep14 Apollo Tyre Africa voluntarily decides to cease its business operations Oct14 RBI hikes FII limit for investment upto 45% of paid up capital in Apollo Tyre May15 Apollo plans to invest 1500 crore to expand its Truck bus radial (TBR) capacity at its Chennai plant from 6000 units/ day to 9000 units/day Aug15 Board approves ATL's plans to raise debt of 2,000 crore by way of rupee term loan, foregin currency term loan, NCDs from time to time Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) (in %) Jun15 Sep15 Dec15 Mar16 Jun16 1 Apollo Finance, Ltd. 30Jun Promoter Neeraj Consultants Pvt. Ltd. 30Jun FII Sunrays Properties & Investment Company Pvt. Ltd. 30Jun DII Constructive Finance Pvt. Ltd. 30Jun Others Templeton Asset Management Ltd. 30Jun Classic Auto Tubes, Ltd. 30Jun Mehta (Ashwin Shantilal) 30Jun Skagen AS 30Jun Motlay Finance Pvt. Ltd. 30Jun Franklin Templeton Asset Management (India) Pvt. Ltd. 31May Source: Reuters, ICICIdirect.com Research Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares Goldman Sachs Asset Management (US) JP Morgan Asset Management SBI Funds Management Pvt. Ltd Birla Sun Life Asset Management Company Ltd Franklin Templeton Asset Management (India) Pvt. Ltd ICICI Prudential Asset Management Co. Ltd Templeton Asset Management Ltd Goldman Sachs Asset Management International J O Hambro Capital Management Limited JM Financial Asset Management Pvt. Ltd Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 10

11 Financial summary Profit and loss statement Crore (Yearend March) FY15 FY16 FY17E FY18E Total operating Income 12, , , ,163.8 Growth (%) Raw Material Expenses 7, , , ,464.8 Employee Expenses 1, , , ,720.1 Other Expenses 2, , , ,817.5 Total Operating Expenditure 10, , , ,002.4 EBITDA 1, , , ,161.4 Growth (%) Depreciation Interest Other Income PBT 1, , , ,569.6 Exceptional items Total Tax PAT , , ,130.1 Growth (%) EPS ( ) Cash flow statement Crore (Yearend March) FY15 FY16 FY17E FY18E Profit after Tax , , ,130.1 Add: Depreciation (Inc)/dec in Current Assets Inc/(dec) in CL and Provisions CF from operating activities 1, , , ,399.2 (Inc)/dec in Investments (Inc)/dec in Fixed Assets , , ,000.0 Others CF from investing activities , , ,000.0 Issue/(Buy back) of Equity Inc/(dec) in loan funds Dividend paid & dividend tax Others CF from financing activities 1, Net Cash flow Opening Cash Closing Cash Balance sheet Crore (Yearend March) FY15 FY16 FY17E FY18E Liabilities Equity Capital Reserve and Surplus 4, , , ,692.6 Total Shareholders funds 5, , , ,743.5 Total Debt , , ,549.7 Deferred Tax Liability Total Liabilities 6, , , ,091.2 Assets Gross Block 8, , , ,067.0 Less: Acc Depreciation 4, , , ,028.7 Net Block 4, , , ,620.7 Capital WIP Total Fixed Assets 4, , , ,395.7 Investments Goodwill on consolidation Inventory 1, , , ,326.3 Debtors , , ,233.6 Loans and Advances Other current assets Cash Total Current Assets 3, , , ,551.2 Creditors , , ,850.4 Provisions Total Current Liabilities 1, , , ,648.3 Net Current Assets 2, , , ,902.9 Application of Funds 6, , , , Key ratios (Yearend March) FY15 FY16 FY17E FY18E Per share data ( ) EPS Cash EPS BV DPS Cash Per Share Operating Ratios (%) EBITDA Margin PBT / Net sales PAT Margin Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE RoIC Valuation Ratios (x) P/E EV / EBITDA EV / Net Sales Market Cap / Sales Price to Book Value Solvency Ratios Debt/Equity Current Ratio Quick Ratio ICICI Securities Ltd Retail Equity Research Page 11

12 ICICIdirect.com coverage universe (Auto & Auto Ancillary) CMP M Cap EPS ( ) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E Amara Raja (AMARAJ) Hold Apollo Tyre (APOTYR) Hold Ashok Leyland (ASHLEY) Hold Bajaj Auto (BAAUTO) Buy Balkrishna Ind. (BALIND) Hold Bharat Forge (BHAFOR) Hold Bosch (MICO) Buy Eicher Motors (EICMOT) Buy Exide Industries (EXIIND) Buy Hero Mototcorp (HERHON) Hold JK Tyre & Ind (JKIND) Hold M&M (MAHMAH) Buy Mahindra CIE (MAHAUT) Buy Maruti Suzuki (MARUTI) Buy Motherson (MOTSUM) Hold Tata Motors (TELCO) Buy Wabco India (WABTVS) Hold ICICI Securities Ltd Retail Equity Research Page 12

13 RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/10%; Sell: 10% or more; Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai research@icicidirect.com ICICI Securities Ltd Retail Equity Research Page 13

14 ANALYST CERTIFICATION We /I, Nishit Zota, MBA & Vidrum Mehta, MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited is a Sebi registered Research Analyst having registration no. INH ICICI Securities Limited (ICICI Securities) is a fullservice, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. 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