Jaiprakash Power (JAIHYD) 15

Transcription

1 Result Update Rating matrix Rating : Hold Target : 15.9 Target Period : 12 months Potential Upside : 8% What s changed? Target Changed from 25.6 to 15.9 EPS FY15E Changed from 1.6 to.5 EPS FY16E Changed from 2.6 to 2.5 Rating Unchanged Quarterly performance Q2FY15 Q2FY14 YoY (%) Q1FY15 QoQ (%) Revenue EBITDA EBITDA (%) PAT Key financials Crore FY13 FY14 FY15E FY16E Net Sales 2,459 2,874 3,798 7,846 EBITDA 1,933 2,22 2,349 4,44 Net Profit EPS ( ) Valuation summary FY13 FY14 FY15E FY16E P/E Target P/E EV / EBITDA P/BV RoNW (%) RoCE (%) Stock data Particular Amount Market Capitalization ( Crore) 4,34.9 Total Debt (FY14) ( Crore) 24,464.9 Cash and Investments (FY14) ( Crore) EV ( Crore) 28, week H/L ( ) 26.6/8.6 Equity capital ( Crore) 2,938. Face value 1 Price performance 1M 3M 6M 12M JP Power 19.4 (14.1) (2.7) (22.) NHPC 1.2 (4.1) NTPC (4.2) Analyst Chirag Shah shah.chirag@icicisecurities.com Anuj Upadhyay anuj.upadhyay@icicisecurities.com Debt reduction may get delayed November 11, 214 Jaiprakash Power (JAIHYD) 15 Generation increased 37.6% YoY to crore units in Q2FY15 driven by increased generation at Bina, re-commissioning of Vishnuprayag and commencement of 66 MW unit of Nigrie STPP Sales increased 23.9% YoY to 1,2 crore, above I-direct estimate of 1,71 crore due to higher than anticipated generation (~434.6 crore unit vs. expectation of 422. crore unit) and better realisation Fuel cost increased 84.3% YoY due to increased generation from thermal based plants. This was, however, partially offset by 38.4% YoY fall in G&A expenses. Interest cost was up 33.2% YoY while depreciation declined 7.4% YoY due to a change in methodology for calculation of depreciation as mentioned in Companies Act 213 Consequently, PAT increased 19% YoY to crore (above our estimate of 246. crore) Increased debt from capacity addition impacts earnings With the initial presence across hydro segment, capacity addition remained tepid over FY4-8 with addition of only 7 MW (Baspa 3 MW & Vishnuprayag 4 MW). However, with the commissioning of Karcham Wangtoo 1 MW, the company s capacity more than doubled to 1,7 MW in FY11. This impacted JPVL s debt position (D/E of 2.3x in FY11 vs..8x in FY9). Furthermore, the promoter also securitised assets across existing plants with banks to fund its upcoming projects. JPVL s debt position was further impacted (D/E at 3.3x) due to commissioning of its 5 MW Bina thermal plant in FY13. Currently, with an installed capacity of 2,2 MW, the company s debt has swelled to ~ 25, crore as its Bina plant continued to make losses even after a year and a half of operation due to lower fuel supply and back down by SEBs. Consequently, JPVL s consolidated PAT declined 86.9% YoY to 47 crore despite 16.9% growth in topline to 2,874 crore in FY14. Signs MoU with JSW Energy to sell stake in Baspa, Bina & Karcham To reduce its mounting debt and ease pressure on cash flow, JPVL has decided to sell its entire stake in Baspa II (3 MW), Bina (5 MW) and Karcham Wangtoo (1,91 MW) to JSW Energy and, accordingly, signed a MoU. JPVL s past effort to sell these plants to TAQA and Reliance Power failed due to valuation issues. However, the management remains confident on sealing the deal with JSW Energy in a short period. The proceeds from the sale will be used to pay off JPVL s debt of ~ 8 crore. Consequently, JPVL s standalone debt is likely to decline to 11, crore while consolidated debt is expected to decline to ~ 17,5 crore. Furthermore, JPVL will also bid in the upcoming coal auction to regain its Amelia and Dongri blocks. Target price revised downward as lack of clarity persists on debt reduction While the asset sale is likely to bring down the debt burden by ~ 8, crore and ease its D/E ratio to 2.6x, execution of the same may take longer than expected. JPVL s past two attempts to sell its assets failed over valuation issues. Thus, we factor in a cautious approach this time. Furthermore, with the cancellation of coal blocks, the company s Nigrie project will have to seek fresh linkage via bidding process, which would further strain JPVL s balance sheet. Also, the Bara project is now likely to get commercialised in FY16 vs. FY15 earlier. Factoring in the same, we have revised our estimates downward. Accordingly, we now revise JPVL s target price to 15.9 (.65x FY16E P/B) vs earlier. We maintain our HOLD recommendation on the stock. ICICI Securities Ltd Retail Equity Research

2 Variance analysis Q2FY15 Q2FY15E Q2FY14 YoY (%) Q1FY15 QoQ (%) Comments Energy sales net 1,2.2 1, Revenue growth driven by 37.6% YoY increase in generation and 16.5% YoY rise in sales unit Other Income Total Income 1,21.4 1, Fuel Rise in fuel cost was primarily due to rise in thermal generation driven by the commissioning of first Unit of 66 MW Nigrie STPP G&A (38.4) 69.4 (29.7) Employee expense Other expenses Total expenses EBITDA EBITDA growth was driven by rise in revenue growth, which was further augmented by fall in G&A expenses EBITDA Margin (%) bps bps Depreciation (7.4) Fall in depreciation was due to change in methodology to charge depreciation as prescribed in Companies Act 213 Interest Rise in interest cost was due to higher interest on corporate loans facilities, which was availed to fund ongoing projects in the absence of the company's ability to raise equity due to market conditions prevailing in the recent past Other Income (2.2) 11.1 (46.9) PBT Extraordinary expenses.... Extraordinary Income (.)... Total Tax PAT Consequently, PAT came in above our and consensus estimate Key Metrics Generation (Cr Unit) Growth in generation was driven by commissioning of the 66 MW Nigrie plant in September 214 Sales (Cr Unit) Realisation ( /Kwh) Blended realisation increased due to increased generation across thermal plants Change in estimates FY15E FY16E ( Crore) Old New % Change Old New % Change Comments Revenue 5, ,797.9 (28.) 8, ,846.2 (8.1) Key estimates revised to factor in delay in commissioning of Bara project, which is now likely to get commissioned in FY16 vs. FY15 earlier EBITDA 3, ,349.5 (29.4) 4, ,43.5 (9.) EBITDA Margin (%) bps bps PAT (69.5) (3.9) EPS ( ) (69.5) (3.9) Assumptions Current Earlier Comments FY13 FY14 FY15E FY16E FY15E FY16E Generation ,34.9 1, , ,682.8 Generation growth driven by capacity addition Sales , , ,565. Tariff rate Blended tariff rate to increase as contribution of low tariff hydro capacity will decline to 1% post sale of Baspa and Karcham ICICI Securities Ltd Retail Equity Research Page 2

3 Key quarterly performances Exhibit 1: Trend in quarterly generation of operational plants (Million Units) Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Baspa II Vishnuprayag Karcham Wangtoo Bina I Exhibit 2: Share of JPVL in overall hydro generation (%) Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Bina continues to operate at low PLF but generation up YoY In Q2FY15, Bina generated ~6 crore units vs crore YoY (124.5 crore unit in H1FY15 vs crore in H1FY14). Though Bina s PLF improved during the quarter to 54.4% vs. 24.% in Q2FY14, it was still below the industry average of ~65% due to back down by discoms. Furthermore, availability also declined to 74.4% during the quarter leading to fixed cost under recovery. Bina has a risk cover for 7% of its capacity, which has a PPA of 65% capacity with Government of Madhya Pradesh (GoMP) on CERC based norms and another 5% PPA to GoMP at a variable cost. The balance 3% is sold in the open market and faces the risk of fixed cost under-recovery. The NDA government is undertaking various measures to ensure increased supply of coal to all power plants, which would enhance the PLF and PAF. This is likely to lower the under recovery faced by the power plants leading to better incentive, going ahead. Factoring in the same, we believe that Bina s performance will improve from FY16E. ICICI Securities Ltd Retail Equity Research Page 3

4 Company Analysis Shift from hydro to thermal capacity JPVL, promoted by Jaiprakash Associates, owns and operates power plants of 2,2 MW (hydro 1,7 MW & thermal 5 MW). The company is also present in the transmission sector through its 74% owned subsidiary, Jaypee Power Grid (JPL), which operates the 217 ckm 4 k/v DC line, transmitting power from the Karcham-Wangtoo hydroelectric power plant. The company s installed capacity has grown at a CAGR of 33.1% over FY1 14 and is likely to add 3,3 MW of capacity over FY15-16 (Nigrie 1,38 MW and Bara 1,98 MW) while another 1,98 MW Karcham-I is in the development stage. However, the management has decided to hive off three of its power plants (two hydro assets Baspa 3 MW, Karcham Wangtoo 1,91 MW and a thermal unit Bina 5 MW) to JSW Energy to bring down its debt by ~ 8, crore. Considering the same, the cumulative installed capacity as on FY15 is likely to be 3,7 MW. The company s revenue and PAT have grown at a CAGR of 58.4% and 14.1%, respectively, over FY Exhibit 3: Trend in capacity addition over FY1-16E (MW) FY1 FY11 FY12 FY13 FY14 FY15E FY16E Baspa-II Vishnuprayag Karcham Bina I Nigrie Bara Exhibit 4: Thermal capacity to be ~9% in FY15E from nil in FY12 (MW) FY1 FY11 FY12 FY13E FY14 FY15E FY16E Hydro Thermal (Coal) However, with the full commissioning of the 1,32 MW Nigrie in FY15 and 1,92 MW Bara project in FY16, the share of coal projects would account for 9% of total capacity. Accordingly, EBIDTA margins are likely to decline to 56.1% in FY16E vs. 78.6% in FY13. As capacity is expected to increase from 2,2 MW to 3,7 MW, revenues and PAT are expected to grow at a CAGR of 47.2% and 26.7%, respectively, in FY13-16E. Exhibit 5: Revenue and PAT trend Exhibit 6: EBIDTA and margin trend ( Crore) 9, 8, 7, 6, 5, 4, 3, 2, 1, 1,616 2,459 2,874 3,798 7,846 FY 12 FY 13 FY 14 FY 15E FY 16E Revenue PAT ( Crore) 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 1,482 1,933 2,22 2,349 4,44 FY 12 FY 13 FY 14 FY 15E FY 16E EBITDA Margin (%) ICICI Securities Ltd Retail Equity Research Page 4

5 Exhibit 7: Details of projects under construction Projects under construction Capacity (MW) Fuel type Fuel Source Bina 5 Coal Equity requirement ( crore) Equity invested ( Equity untied ( crore) Financial Closure CoD ~1 MT from SECL.93 from CCL Yes Nigrie 132 Coal Amelia and Dongri Yes Bara 198 Coal Linkage from Coal India Yes Karchana Coal Linkage from Coal India Yes Total MW in August 212, 25 MW in April MW in Q2 FY15, 66MW in Q3 FY15 66 MW in Q1 FY16, 66MW in Q3 FY16, 66 MW in Q4 FY16 Land acquisition yet to be completed Exhibit 8: Debt build-up at project level for JPVL Yearly Repayment on a project basis ( crore) Project ( crore) FY12 FY13 FY14 FY15E FY16E 91 Baspa II Vishnuprayag Karcham Wangtoo Bina Phase Nigrie Bara Total Project loans Update on key projects 1,32 MW Nigrie project: JPVL declared Unit-1 66 MW Nigrie project commercial on September 3, 214 while Unit-2 66 MW is likely to achieve CoD by Q3FY15. While coal supply from the Amelia mine has already begun to the power plant and the Dongri block has received all major clearances, the recent SC order on coal block cancellation has led to de-allocation of the same. Thus, JPVL will now have to bid in the auction to regain these two blocks. This is likely to put further pressure on the company s already strained balance sheet. Any failure or delay in getting timely linkages for coal supply is likely to impact the projects PAF and PLF leading to under recovery of fixed cost. Also, with only 5% of the capacity being tied up under PPA, the balance 5% is still exposed to merchant market risk. Furthermore, high project cost of ~ 1,45 crore, ( 7.5 crore/mw) may lead to difficulties in final tariff approval and under recovery of fixed costs. 1,98 MW Bara project: Bara is now likely to get commissioned in FY16E vs. FY15E earlier. While Unit-1 66 MW is expected to achieve CoD by Q1FY16, Unit II and Unit III are likely to achieve the same by Q3FY16 and Q4FY16, respectively. Accordingly, the management has indicated that the project has witnessed 1-15% cost overrun, which would be reflected in the tariff after the approval of the regulator. Factoring the same in our assumption, we have revised our earnings estimate downward for FY15E and FY16E. The project has a coal linkage with CIL and has tied up 9% of its capacity under PPA with Madhya Pradesh at a levelised tariff of 3.2/Kwh. The balance 1% has an exposure towards the merchant market. ICICI Securities Ltd Retail Equity Research Page 5

6 Signs MoU with JSW Energy JPVL has decided to enter into an MoU with JSW Energy to sell its entire stake in Baspa II (3 MW), Bina (5 MW) and Karcham Wangtoo (1,91 MW) for an undisclosed sum. The company s past efforts to reduce its mounting debt and ease pressure on cash flow by selling these plants to TAQA and Reliance Power failed due to valuation issues. However, the management remains confident on sealing the deal with JSW Energy very shortly. The proceeds from the sale will be used to pay off JPVL s debt of ~ 8 crore. Proceeds likely to pay off debt of close to 8 crore Bina, Bara and Karcham generate close to ~76 crore units per annum and contribute ~ 45 crore to JPVL s PAT (Bina is a loss making entity). The project has a combined debt of 7,935 crore (including securitised debt). The proceeds from the asset sale will be used to pay off JPVL s debt of ~ 8 crore. Consequently, JPVL s standalone debt is likely to decline to 11, crore while consolidated debt is expected to decline to 17,465 crore. Accordingly, JPVL s D/E ratio is expected to decline to 2.7x in FY15E from the current level of 3.9x. Furthermore, with a decline in debt and, thus, interest burden, we expect JPVL s RoE to increase from the current.7% to 1.1% by FY16E. Exhibit 9: D/E and RoE trend, going ahead (x) FY 12 FY 13 FY 14 FY 15E FY 16E D/E RoE (%) SC order on coal block cancellation likely to impact JPVL s balance sheet Post the Supreme Court order on cancellation of all coal blocks allotted during , JPVL is set to lose access to its Amelia and Dongri Tal II blocks, which could hamper the coal surety for its 1,32 MW Nigrie project. The company will now have to make a bid in the upcoming coal auction to regain these blocks, which would need further funds. We believe the company would find it very difficult to raise fresh funds unless it concludes its asset sale programme. This may restrain the company from making an aggressive bid for the coal block, which would favour its competitors. Any failure or delay in getting timely linkages for the Nigrie project is likely to impact the projects PAF and PLF leading to underrecovery of fixed cost. ICICI Securities Ltd Retail Equity Research Page 6

7 Outlook and valuation We believe the asset sale will help JPVL to bring down its debt burden by ~ 8, crore, thus easing its D/E ratio to 2.6x from the current 3.9x, which would improve its cash flow position. However, the execution of the same may take longer-than-expected. JPVL s past two attempts to sell its assets failed over valuation issues. Thus, we factor in a cautious approach this time. Going ahead, the company would have ~9% of its projects based on coal. The success of the same would depend on coal supply and feasible tariff rate. However, with the cancellation of coal blocks, the company s Nigrie project will have to seek fresh linkage via bidding process, which would further strain JPVL s balance sheet. Also, the Bara project is now likely to get commercial in FY16 vs. FY15 earlier. Factoring in the same, we have revised our revenue and PAT estimate downward by 28.% and 69.5% YoY for FY15E and 8.1% and 3.9% for FY16E, respectively. Accordingly, we now revise JPVL s target price to 15.9 (.65x FY16E P/B vs. 1.x earlier) vs earlier. We maintain our HOLD recommendation. Exhibit 1: One year forward P/BV (x) Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 ICICI Securities Ltd Retail Equity Research Page 7

8 Company snapshot Target Price: 15.9 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Mar-9 The company's installed capacity stood at 7 MW hydro project (Baspa - 3 MW & Vishnuprayag - 4 MW) Aug-11 1 MW Karcham Wangtoo hydro-electric project commissioned in Kinnaur of Himachal Pradesh, taking the overall capacity of the group to 17 MW Aug-12 First unit of 25 MW of Phase-I (2 x 25 MW = 5 MW) of Bina Thermal Power Plant commenced commercial operations Feb-13 JPVL closed a QIP of 95 crore to shore up its net worth to meet future equity requirements of close to 2 crore for upcoming projects (Nigrie, -132 MW, Feb-13 Overburden removal from Amelia (North) coal block associated with Jaypee's Nigrie Super Thermal Power Project starts Mar-13 Debt increases significantly in FY13 to ~ 2,85 crore vs. 15,7 crore YoY due to commissioning of Bina phase 1 25 MW and delay in Nigrie project Apr-13 Unit II of 25 MW of Phase-I of Bina plant commenced commercial operations taking Bina's overall capacity to 5 MW & group's capacity to 2,2 MW Jun-13 4 MW Vishnuprayag hydro plant halts operation as Uttarakhand flood damages plant equipment Mar-14 JPVL announces its plan to sell its entire stake in Baspa and Karcham Wangtoo at $1.6 billion (~ 1,29 crore) to a consortium led by TAQA by November 214 Jul-14 TAQA calls off deal with the company due to a change in the business strategy and priorities of their group. Jul-14 JPVL enters into agreement with Reliance Power to sell its entire hydro assets (1,791 MW) for a consideration of ~ 12, crore Sep-13 Reliance Power calls off deal to purchase JPVL's assets over valuation issues Sep-13 JPVL signs MoU with JSW Energy to sell its entire stake in Bina (5 MW), Baspa (4 MW) and (Karcham Wangtoo (1,91 MW) for an undisclosed sum Top 1 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) (in %) Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 1 Jaypee Group 3-Sep ,98.7. Promoter Talwar (Naresh Chander) & Chadha (Ravinder Mohan) 3-Sep FII HDFC Asset Management Co., Ltd. 3-Sep DII Temasek Holdings Pte. Ltd. 3-Sep Others HSBC Global Asset Management (Hong Kong) Limited 3-Sep Norges Bank Investment Management (NBIM) 31-Dec Van Eck Associates Corporation 31-Oct HSBC Global Asset Management (UK) Limited 3-Sep Dimensional Fund Advisors, L.P. 3-Sep Birla Sun Life Asset Management Company Ltd. 3-Sep Source: Reuters, ICICIdirect.com Research Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares Norges Bank Investment Management (NBIM) 4.86m 15.89m DSP BlackRock Investment Managers Pvt. Ltd m -13.7m JM Financial Asset Management Pvt. Ltd..85m 4.22m Tata Asset Management Limited -2.31m -11.5m Sundaram Asset Management Company Limited.51m 2.8m ICICI Prudential Asset Management Co. Ltd m -8.12m Birla Sun Life Asset Management Company Ltd..39m 1.35m SBI Funds Management Pvt. Ltd m -7.6m TIAA-CREF.27m.98m L&T Investment Management Limited -1.34m -6.66m Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 8

9 Financial summary Profit and loss statement Crore (Year-end March) FY13 FY14 FY15E FY16E Total operating Income 2,459 2,874 3,798 7,846 Growth (%) Fuel Cost & Transmission Charges Operation & Maintenance cost Employee Expenses Other expenses Total Operating Expenditure , ,442.7 EBITDA 1,933 2,22 2,349 4,44 Growth (%) Depreciation ,15.5 1,698.7 Interest 1, , ,21.8 1,895.6 Other Income PBT Exceptional Items.... Total Tax PAT Growth (%) (1.8) (86.9) EPS ( ) Cash flow statement Crore (Year-end March) FY13 FY14 FY15E FY16E Profit Before Tax Add: Depreciation ,15.5 1,698.7 (Inc)/dec in Current Assets (83.3) (97.1) Inc/(dec) in CL and Provisions ,679. 2,95.2 Others 1,12. 1, ,21.8 1,895.6 CF from operating activities 2,751 3,784 4,2 7,127 (Inc)/dec in Investments (Inc)/dec in Fixed Assets (7,.) (1,451.) (65.) (1,85.) Others CF from investing activities (6,928) (6,194) 3,46 (7,644) Issue/(Buy back) of Equity Inc/(dec) in loan funds 5, , ,. 3,. Dividend paid & dividend tax.... Inc/(dec) in Sec. premium Others (1,186.8) (1,511.3) (1,21.8) (1,895.6) CF from financing activities 3,98 2,39 (8,211) 1,14 Net Cash flow (196.6) (11.1) (748.9) 587. Opening Cash Closing Cash (127) 461 Balance sheet Crore (Year-end March) FY13 FY14 FY15E FY16E Liabilities Equity Capital 2,939. 2,938. 2,938. 2,938. Reserve and Surplus 3, ,47.1 3, ,241.3 Total Shareholders funds 6, , , ,179.3 Total Debt 2, , , ,464.9 Deferred Revenue Minority Interest / Others Total Liabilities 28,138 31,975 25,181 28,969 Assets Gross Block 13, , , , Less: Acc Depreciation 1,21.5 1,7.5 2,716. 4,414.7 Net Block 12, , , ,974.3 Capital WIP 15,244. 1,97.9 6,86.8 3,654.9 Total Fixed Assets 27, , , ,629.2 Investments 1, ,986. 1,986. 1,986. Inventory Debtors ,719.7 Loans and Advances 2,41.9 1, ,41.9 2,41.9 Other Current Assets Cash Total Current Assets 3, ,82.9 3, ,722.4 Creditors 1,69.8 1,26.4 2,75.3 5,61.6 Other Liabilities 2, , , ,672.7 Provisions ,85.6 Total Current Liabilities 4, , , ,368.9 Net Current Assets (1,328.8) (3,17.) (5,489.2) (7,646.5) Others Assets.... Application of Funds 28,138 31,975 25,181 28,969 Key ratios (Year-end March) FY13 FY14 FY15E FY16E Per share data ( ) EPS Cash EPS BV DPS.... Cash Per Share Operating Ratios (%) EBITDA Margin PBT / Total Operating income PAT Margin Inventory days Debtor 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/EBITDA Debt / Equity Current Ratio Quick Ratio ICICI Securities Ltd Retail Equity Research Page 9

10 ICICIdirect.com coverage universe (Power) Sector / Company CMP Target Rating M Cap EPS ( ) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) ( ) TP( ) Rating ( Cr) FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E JP Power(JAIHYD) Hold 4, NHPC (NHPC) Buy 22, NTPC (NTPC) Buy 123, Power Grid (POWGRI) Buy 76, PTC India (POWTRA) 92 1 Buy 2, CESC (CESC) Buy 8, Tata Power (TATPOW) Buy 25,383 (1.3) NA (2.4) ICICI Securities Ltd Retail Equity Research Page 1

11 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%/2% for large caps/midcaps, respectively, with high conviction; Buy: >1%/15% for large caps/midcaps, respectively; Hold: Up to +/-1%; Sell: -1% 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 4 93 research@icicidirect.com ANALYST CERTIFICATION We /I, Chirag Shah PGDBM and Anuj Upadhyay 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 personal views about any and all of 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. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc. 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