Ajanta Pharmaceuticals (AJAPHA) 1701

Transcription

1 Result Update Rating matrix Rating : Buy Target : 196 Target Period : months Potential Upside : 12% What s Changed? Target Changed from 222 to 196 EPS FY17E Changed from 57.6 to 59.7 EPS FY18E Changed from 67.9 to 66.3 EPS FY19E Changed from 79.2 to 75.3 Rating Unchanged Quarterly Performance Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%) Revenue EBITDA EBITDA (%) bps bps Adj. Net Profit Key Financials ( crore) FY16 FY17E FY18E FY19E Revenues EBITDA Net Profit EPS ( ) Valuation summary FY16 FY17E FY18E FY19E PE (x) M.Cap/ Revenues (x) EV to EBITDA (x) Price to book (x) RoNW (%) RoCE (%) Stock data Particular Market Capitalisation Debt (FY16) Cash (FY16) EV 52 week H/L Amount crore 93 crore 176 crore crore 215/1158 Equity capital Face value 17.6 crore 2 crore Price performance (%) 1M 3M 6M 1Y Ajanta Pharma Alembic Pharma Torrent Pharma Research Analyst Siddhant Khandekar siddhant.khandekar@icicisecurities.com Mitesh Shah mitesh.sha@icicisecurities.com January 25, 217 Ajanta Pharmaceuticals (AJAPHA) 171 Subdued Asian sales mar strong US growth Revenues grew 12% YoY to 533 crore (I-direct estimate: 578 crore) on the back of 15% growth in domestic sales to 154 crore (Idirect estimate: 157 crore). Export formulations grew 9% YoY to 361 crore (I-direct estimate: 48 crore). The sharp growth in the US was largely offset by the decline in Asia EBITDA margins declined 1 bps YoY to 33.4% (I-direct estimate: 35.%) mainly due to higher other expenditure Net profit increased 25% YoY to 143 crore (I-direct estimate: 145 crore) mainly due to forex gain of 1 crore and lower taxation Domestic formulations - Focus on new launches and few therapies Domestic branded formulations constitute 28.7% of FY16 revenues. The main distinguishing factor is the uncanny knack of launching maximum number of first time launches with focus on new drug delivery system (NDDS). Of the 19+ actively marketed brands, 135 were introduced for the first time in India. The focus on specialty therapies and niche product led APL to post strong growth at 28.5% CAGR in FY11-16, far higher than industry growth of ~12%. Going ahead, we expect domestic formulations to grow at a CAGR of 17% in FY16-19E to 853 crore driven by a mix of existing products and new launches. Exports traction manly from emerging markets Export formulations constitute 67.2% of FY16 revenues. The company is currently deriving almost entire export revenues from emerging regions such as Africa (Franco Africa), Asia, LatAm and US having a presence in more than 35 countries. As opposed to the common practice of forging alliances with regional pharmaceutical players, APL s front-end marketing team interacts directly with doctors. The company has consistently introduced new products in these markets. Overall export formulations grew at a CAGR of 32.1% in FY11-16 to crore. We expect exports to grow at 14% CAGR in FY16-19E to 1737 crore driven by US launches. One of the best matrix among peers; US foray crucial for scalability With focus on niche therapies in domestic formulations and a calculated approach in exports market, APL remains an interesting candidate from the midcap pharma space with high growth rates, strong margins, commendable return ratios and lighter balance sheet. At this juncture, the company is well poised to foray into the US market with its own sales team in the fray. The company has filed 26 ANDAs and received 15 product approvals. US sales are likely jump from a mere 14 crore in FY16 to 511 crore by FY19 on the back of consistent launches on a lower base. Approval for the Dahej facility is also likely to support growth. US traction slows down but still strong; to complement growth US sales were down sequentially on account of competition in a couple of products but the current run rate is still strong with scores of products lined up for launches in the next months. The management expects US to contribute 8-1% to total turnover on a sustainable basis. This is also likely to make up for a slowdown in Asia and Africa. On the domestic front, the management expects growth to moderate but a guidance of low to mid teen growth still augurs well. The company is currently passing through a stretched phase of capex across two or three years to bolster the domestic business and exports, especially the US. Despite capex intensity, the company remains on track to generate similar kind of FCF, reflecting core strength. We maintain BUY with a target price of 196 based on 26x (28x earlier) of FY19E EPS of ICICI Securities Ltd Retail Equity Research

2 Variance analysis Q3FY17 Q3FY17E Q3FY16 Q2FY17 YoY (%) QoQ (%) Comments Revenue YoY growth in revenues on account of 12% growth in domestic branded formulations and sharp jump in US sales Raw Material Expenses Employee Expenses Other Expenditure YoY Increase mainly due to higher overhead expenditure of subsidiaries and R&D spend Total Operating Expenditure EBITDA EBITDA (%) bps -21 bps Reduction in EBITDA margins mainly due to higher other expenditure Interest Depreciation Other income Included forex gains of 1.1 crore PBT before EO Less: Exceptional Items PBT Tax MI & Share of loss/ (gain) asso. Adj. Net Profit Delta vis-à-vis EBITDA growth was largely due to lower taxation and higher other income Key Metrics Domestic YoY growth driven by 19% growth in dermatology segment to 38 crore. Cardio, ophthalmic and pain management segments grew 17%, 6% and 1% to 66 crore, 39 crore and 11 crore, respectively. Ophthalmic and pain management segments were impacted in Q3FY17 due to demonetisation Exports US sales increased to 59 crore against 4.3 crore in Q3FY16. Asia and Africa (ex tender) sales, on the other hand, were subdued Change in estimates FY17E FY18E ( Crore) Old New % Change Old New % Change Revenue 2,44.4 2, , , EBITDA EBITDA Margin (%) bps bps PAT EPS ( ) Assumptions Current Earlier ( crore) FY15 FY16 FY17E FY18E FY17E FY18E Branded - domestic Exports Total , ,33 1, , ,641.8 Trimmed mainly due to slower-than-expected growth in Africa (ex tender) and Asia and higher-than-expected price erosion in the US z ICICI Securities Ltd Retail Equity Research Page 2

3 Company Analysis Established in 1973, APL is mainly into exports as well as domestic formulations. As of FY16, the exports: domestic formulation ratio was at 65:35. The company owns five manufacturing facilities - four in Aurangabad, Maharashtra and one in Mauritius. Of these five facilities, only one in Aurangabad is an API facility while the rest are all formulations. Consolidated revenues, EBITDA and PAT have grown at a CAGR of 31%, 48.6% and 58%, respectively, in FY APL had come out with a maiden IPO in March 2. It raised 68 crore, which was earmarked for capacity expansion and debt repayment. Domestic formulations constitute 3.7% of the total consolidated turnover (FY16). This segment has been further segregated into two subsegments- 1) branded formulations and 2) institutional business. Initially, the company was catering to institutional business. Institutional subsegment accounts for ~7% of domestic formulations and is mainly confined to government and institutional tenders. It is only in the last 1 years that the focus shifted to the branded formulations business, which now accounts for ~93% of domestic formulations. The company focuses on only a few so called specialty therapies ophthalmology, dermatology and cardiology. Together, these therapies constitute ~85% of domestic branded formulations. The company invested heavily in the technology and field force, especially in the first five years after the changed focus. The focus was also to offer novel delivery system. From 17 crore in FY5, branded formulations have grown at 34% CAGR to crore in FY16. Till date, the company has launched ~19+ products out of which ~135 are first-time launches. The current MR strength is ~3. Overall, domestic formulations have grown at 28.5% CAGR in FY11-16 to crore. The company only has one product under the National List of Essential Medicines (NLEM) 211 list. Export formulations constitute 67.2% of the total consolidated turnover (FY16). Exports are mainly confined to emerging markets and constitute branded generics. APL exports its products in ~35 emerging markets with a significant presence in Franco African countries and Philippines. Africa accounts for ~59% of export formulations followed by Asia. The company also participates in anti-malarial tenders in Africa. It operates through 45+ MRs in these emerging markets and owns a portfolio of 1481 registered brands in these markets encompassing major therapies such as anti-infectives, anti-malarials, ophthalmic, dermatology, cardiovascular, GI, etc. The company also has a marginal presence in Latin America. It has also forayed into regulated markets like US where it has filed 32 ANDAs and received approval for 18. Overall export formulations have grown at 29% CAGR in FY11-16 to crore. Ajanta Pharma has five subsidiaries including one step-down subsidiary in Mauritius, Philippines and the US. The Mauritius subsidiary with an independent manufacturing base mainly caters to Franco African markets. The subsidiary in Philippines, which is a marketing arm, caters to the Philippines market. The US subsidiary is an administrative office to facilitate US operations. We expect revenues to grow at 15% CAGR to 2654 crore in FY16-19E, on the back of strong growth in both exports and domestic formulation segments. Exports are likely to grow at 14% CAGR to 1737 crore during the same period to be driven by growth in legacy export markets of ICICI Securities Ltd Retail Equity Research Page 3

4 Africa, Asia and commencement of US shipments. Similarly, the domestic formulations segment is likely to register a CAGR of 17% to 853 crore during the same period, to be driven by branded formulations. Exhibit 1: Revenues growth trend ( crore) % CAGR % CAGR Revenues Domestic formulations - APL operates in the branded (Prescription: Rx, 93.4% of domestic sales) and tender business (6.6% of domestic sales). In the branded space, it has a presence in fast growing specialty therapies viz. ophthalmology, dermatology, chronic therapies like cardiovascular (CVS) while in the acute space it has a marginal presence in pain management and gastrointestinal. APL currently markets ~19+ brands through 3 medical representatives (MRs) covering 3 lakh doctors. Over the years, the company has developed a knack of launching maximum number of first launches with focus on new drug delivery system (NDDS). It was one of the very few companies to launch products such as Metoprolol (CVS), Rosuvastatin + Clopidogrel (CVS), Hydroquinone + Mometasone + Tretinoin (Derma), etc, in the Indian market. The company s first differentiated (NDDS) product Nimesulide (pain) daily once was launched under the brand name of Nimlodi in FY2. Out of ~189 actively marketed brands, ~135 brands were first launches in India. The focus on specialty therapies and niche product led APL to post a strong CAGR of 28.5% in FY11-16, which is far higher than industry growth of ~12% (AIOCD data). As per the latest AIOCD data, APL is ranked 42nd in the Indian pharmaceutical market with a market share.48%. Currently, only 12% of total domestic sales are under NLEM. They are mainly from the CVS category. The company markets CVS, ophthalmology and dermatology products under the divisions of Anvaxx, Illuma and Ansca. The company launches ~2 new products every year including line extensions. We expect the company to continue with 15-2 product launches every year. Overall, we expect domestic formulation sales to grow at 17% CAGR to 853 crore in FY16-19E. ICICI Securities Ltd Retail Equity Research Page 4

5 Exhibit 2: Domestic formulation growth likely at CAGR of 17% in FY16-19E % CAGR % CAGR Total Domestic Formulation exports Exports account for 65% of revenues. APL currently derives almost its entire export revenues from emerging regions like Africa (Franco Africa), Asia and LatAm having a presence in more than 35 countries. Exports have grown at 32% CAGR in FY The company markets its products through a team of 45+ MRs. At present, the company is marketing 2+ products in these regions. In all, the company owns 1537 registered. APL s success story in emerging markets was carved out of the so called differentiated approach. According to this, products were developed on the basis of unmet medical needs in a particular geography. As a result, the product basket varied from nation to nation. Similarly, the company resorted to a different strategy of product marketing. As opposed to the common practice of forging alliances with local/regional pharmaceutical players, APL s front-end marketing team interacts directly with doctors. The company has consistently introduced new products in these markets. Overall, we expect export sales to grow at a CAGR of 14% to 1737 crore in FY16-19E. Exhibit 3: Exports to grow at CAGR of 14% in FY16-19E Total Exports ICICI Securities Ltd Retail Equity Research Page 5

6 Exhibit 4: Derma sales(domestic) to grow at CAGR of 17.5% in FY16-19E Exhibit 5: Cardio sales(domestic) to grow at CAGR of 2.1% in FY16-19E Dermatology Cardiology Source: Company, ICICIdirect.com, Research Exhibit 6: Ophthalmic sales (domestic) at CAGR 15.4% in FY16-19E Exhibit 7: Institutional domestic business Ophthalmology Institutions- domestic Source: Company, ICICIdirect.com, Research Source: Company, ICICIdirect.com, Research Exhibit 8: Africa sales exports growth at CAGR 4.5% in FY16-19E Exhibit 9: Asia exports growth at CAGR -2% in FY16-19E Afr ic a Asia Source: Company, ICICIdirect.com, Research Source: Company, ICICIdirect.com, Research ICICI Securities Ltd Retail Equity Research Page 6

7 Exhibit 1: EBITDA to grow at CAGR of 16% in FY16-19E ( crore) EBITDA EBITDA Margins (%) (%) Exhibit 11: Net profit to grow at CAGR of 24% in FY16-19E ( crore) FY1 1 FY12 FY13 FY 14 FY15 FY16 FY17E FY18 E FY19E Net Profit Net Profit Margins (%) (%) Exhibit 12: Trends in return ratios 58 (%) RoCE (%) RoNW (%) ICICI Securities Ltd Retail Equity Research Page 7

8 Exhibit 13: Trends in quarterly financials ( crore) Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 YoY (%) Net Sales Other Operating Income Total Operating Income Raw Material Expenses % of Revenue bps Gross Profit Gross Profit Margin (%) bps Employee Expenses % of Revenue bps Other Expenditure % of Revenue bps Total Expenditure % of Revenue bps EBITDA EBITDA Margin (%) bps Other Income Interest Depreciation PBT (bef Excep's) Less: Exceptional Items 8.5 PBT Total Tax Tax rate (%) bps PAT PAT Margin (%) bps SWOT Analysis Strengths - Industry beating growth on a consistent basis, focused approach in the exports space, high return ratios, knack of launching new products on a consistent basis. Weakness - High product concentration. Opportunities - The US generics space. Threats- Increased USFDA scrutiny across the globe regarding cgmp issues, pricing pressure due to client consolidation in the US, pricing probe by the Department of Justice (DoJ) in the US, proposed tightening by the new regime by adapting to the bidding process and imposition of border adjustment tax on imported drugs in the US. Also, increased competition in the domestic formulations space. ICICI Securities Ltd Retail Equity Research Page 8

9 Conference call Highlights The Africa business included 14 crore from anti-malarial tenders for Q3FY17 vs. 9 crore in Q2FY17 The company felt the marginal impact of demonetisation on the domestic formulation front, primarily in the ophthalmology and pain management segments The company has filed six ANDAs in the US market in Q3FY17, taking the 9MFY17 cumulative ANDA filings to six for the company. Total 32 ANDAs have been filed cumulatively in the US market including 14 pending approvals It has guided for 24-25% of tax rate in FY17E. For capex, the company has guided for 3 crore annual capex for the next three years. The 9MFY17 capex numbers was at 215 crore It reported higher other expenses due to planned budgetary expenses in its subsidiaries, which follow calendar year for accounting purposes The Dahej (Gujarat) facility has triggered USFDA inspection, which can happen any time The company has informed there was no import alert by USFDA on any of its facility and it will continue to supply products to US. The company sells Sildenafil in India and other emerging markets, but it does not have approval for the same by the USFDA Paithan (Aurangabad) facility was last inspected by USFDA in March 215 The company expects price erosion in the US to continue in the near future The company has guided for mid to high teen growth in the domestic cardiology segment For FY17E, the company has guided for low to mid teen revenue growth and EBITDA margins at 34-35% Exhibit 14: Brand introduction in export markets Region Brands Registered Major Segments Africa 1183 Antibiotic, Anti-malaria, Cardiac, Gynocology Asia 354 Antibiotic, Derma, Pain, OTC, Ophthal, Cardiac, GI Exhibit 15: Facilities Location Segment Regulatory Approvals Type Paithan, India (3 Aurangabad facilities) Formulations Mauritius Formulations Dahej (upcoming) Formulations Guwahati (upcoming) Formulations Aurangabad API WHO US FDA, UK MHRA, health authorities of Brazil and Colombia, WHO prequalification tablets, capsules, ointments, injections and dry powder ICICI Securities Ltd Retail Equity Research Page 9

10 Valuation The US sales were down sequentially on account of competition in a couple of products but the current run rate is still strong with scores of products line up for launches in the next months. The management expects the US to contribute 8-1% to the total turnover on a sustainable basis. This is also likely to make up for the slowdown in Asia and Africa. On the domestic front, the management expects growth to moderate but a guidance of low to mid teen growth still augurs well. The company is currently passing through a stretched phase of capex across two to three years to bolster the domestic business as well as exports, especially the US. Despite capex intensity, the company remains on track to generate similar FCF, reflecting the core strength. We maintain BUY with a target price of 196 based on 26x (28x earlier) of FY19E EPS of Exhibit 16: One year forward PE [ ( ) Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Price 48.3x 38.3x 28.3x 18.2x Exhibit 17: One year forward PE of company vs. CNX Pharma Index Premium 27% Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Ajanta CNX Pharma Exhibit 18: Valuation Revenues Growth EPS Growth P/E EV/EBITDA RoNW RoCE ( crore) (%) ( ) (%) (x) (X) (%) (%) FY FY17E FY18E FY19E ICICI Securities Ltd Retail Equity Research Page 1

11 Recommendation history vs. Consensus 2,5 8 2, 7 6 ( ) 1,5 1, (%) Jan-15 Mar-15 Jun-15 Aug-15 Oct-15 Jan-16 Mar-16 Jun-16 Aug-16 Nov-16 Jan-17 Price Idirect target Consensus Target Mean % Consensus with BUY Source: Reuters, Company, ICICIdirect.com Research; Initiated on September 22, 214 Key events Date Event Jun-8 Commissions dedicated R&D facility in Kandivali, Mumbai Mar-9 Enters the Philippines market via incorporation of a subsidiary Mar-9 USFDA approves Paithan faciliy Mar-1 Acquires formulation facility near Aurangabad to cater to ROW markets Dec-12 Enters regulated markets with first product approval in the US and one for Europe. Mar-13 Launches first product in the US Jan-15 Board approves subdivision of sharesfrom 5 to 2 Top 1 Shareholders Rank Investor Name Latest Filing Date % O/S Position Position Change 1 Agrawal (Rajesh) 3-Sep m 3.7m 2 Agrawal (Yogesh Mannalal) 3-Sep m 3.8m 3 Agrawal (Ravi P) 3-Sep m 7.4m 4 Agrawal (Ayush Madhusudan) 3-Sep m 7.6m 5 Gabs Investments Pvt. Ltd. 3-Sep m m 6 Agrawal (Mannalal B) 3-Sep m m 7 Agrawal (Mansiha Yogesh & Richa Ravi & Aayu 3-Sep m m 8 Matthews International Capital Management, L. 3-Jun m -.1m 9 Agrawal (Purushottam B) 3-Sep m -2.7m 1 Agrawal (Madhusudan B) 3-Sep m -2.7m Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Promoter Others Recent Activity Buys Sells Investor name Value ($) Shares Investor name Value ($) Shares Agrawal (Ayush Madhusudan) 228.3m 7.6m Agrawal (Manisha Yogesh) -25.6m -6.8m Agrawal (Ravi P) 222.6m 7.4m Agrawal (Madhusudan B) HUF -92.7m -3.1m Agrawal (Yogesh Mannalal) 113.5m 3.8m Agrawal (Mannalal B) HUF -92.3m -3.1m Agrawal (Rajesh) 112.7m 3.7m Agrawal (Purushottam B) HUF -91.6m -3.m Invesco Hong Kong Limited 3.5m.2m Agrawal (Purushottam B) -81.m -2.7m Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 11

12 Financial summary Profit and loss statement Crore (Year-end March)/ ( crore) FY16 FY17E FY18E FY19E Total Operating Income 1, ,11.8 2,357. 2,654.3 Growth (%) Raw Material Expenses Gross Profit 1, , , ,57.1 Gross Profit Margins (%) Employee Expenses Other Expenditure Total Operating Expenditure 1, ,317. 1, ,738.5 EBITDA Growth (%) Interest Depreciation Other Income PBT before Exceptional Items Less: Exceptional Items PBT after Exceptional Items Total Tax PAT before MI PAT Growth (%) EPS (Adjusted) Cash flow statement Crore (Year-end March)/ ( crore) FY16 FY17E FY18E FY19E Profit/(Loss) after taxation Add: Depreciation & Amortization Net Increase in Current Assets Net Increase in Current Liabilities Add: Interest Paid CF from Operating activities Long term Loans & Advances Investments (Purchase)/Sale of Fixed Assets Deferred Tax Liabilities & LT Provisions CF from Investing activities (inc)/dec in Loan 2.6 Dividend & Dividend tax Other CF from Financing activities Net Cash Flow Cash and Cash Equivalent at the beginning Cash Free Cash Flow Balance sheet Crore (Year-end March)/ ( crore) FY16 FY17E FY18E FY19E Equity Capital Reserve and Surplus 1, , ,45.2 2,577.7 Total Shareholders funds 1, , ,62.9 2,595.4 Total Debt Deferred Tax Liability Long-Term Provisions Other Non Current Liabilities Source of Funds 1,288. 1, , ,737.7 Gross Block , ,374.2 Accumulated Depreciation Net Block Capital WIP Fixed Assets , ,376.5 Investments Long Term Loans and Advances Other non-current Assets Inventory Debtors Loans and Advances Other Current Assets Cash Total Current Assets ,153.4 Creditors Provisions Other Current Liabilities Total Current Liabilities Net Current Assets Application of Funds 1,288. 1, , , Key ratios (Year-end March) FY16 FY17E FY18E FY19E Per share data ( ) Reported EPS Cash EPS BV per share Cash per Share Dividend per share Operating Ratios (%) Gross Profit Margins EBITDA margins PAT Margins Inventory days Debtor days Creditor days Asset Turnover EBITDA conversion Rate 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.1.1 Current Ratio Quick Ratio ICICI Securities Ltd Retail Equity Research Page 12

13 ICICIdirect.com coverage universe (Healthcare) Company I-Direct CMP TP Rating M Cap EPS ( ) PE(x) RoCE (%) RoE (%) Code ( ) ( ) ( Cr) FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E Ajanta Pharma AJAPHA ,96 Buy Apollo Hospitals APOHOS ,44 Buy Aurobindo Pharma AURPHA ,1 Buy Alembic Pharma ALEMPHA Hold Biocon BIOCON ,3 Hold Cadila Healthcare CADHEA Buy Cipla CIPLA Hold Divi's Lab DIVLAB 687 1,415 Buy Dr Reddy's Labs DRREDD ,3 Hold Glenmark Pharma GLEPHA 858 1,2 Buy Indoco Remedies INDREM Buy Ipca Laboratories IPCLAB Buy Jubilant Life VAMORG Buy Lupin LUPIN ,89 Buy Natco Pharma NATPHA Buy Sun Pharma SUNPHA Buy Syngene Int. SYNINT Hold Torrent Pharma TORPHA ,7 Buy Unichem Lab UNILAB Hold ICICI Securities Ltd Retail Equity Research Page 13

14 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 ICICI Securities Ltd Retail Equity Research Page 14

15 ANALYST CERTIFICATION We /I, Siddhant Khandekar CA-INTER, Mitesh Shah MS (Finance) 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 (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a SEBI registered Research Analyst with SEBI Registration Number INH99. 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