Tata Motors (TELCO) 400

Transcription

1 Result Update Rating matrix Rating : Buy Target : 48 Target Period : 12 months Potential Upside : 2% What s Changed? Target Unchanged EPS FY16E Changed from 4.5 to 3.4 EPS FY17E Changed from 52.5 to 49.3 Rating Unchanged Quarterly Performance Q2FY16 Q2FY15 YoY (%) Q1FY16 QoQ (%) Revenue 61, , , EBITDA 7, , , EBITDA (%) bps bps PAT , , Key Financials Crore FY14 FY15E FY16E FY17E Net Sales 23,74 26, , ,783 EBITDA 37,368 42,76 38,7 47,328 Net Profit 13,944 13,986 1,323 16,728 EPS ( ) Valuation summary FY14 FY15E FY16E FY17E P/E (x) Target P/E (x) EV/EBITDA (x) P/BV (x) RoNW (%) RoCE (%) Stock data Particular Amount Market Capitalization Crore Total Debt (FY15) Crore Cash and Investments (FY15) Crore EV (FY15) Crore 52 week H/L ( ) 63 / 279 Equity capital ( crore) Crore Face value ( ) 2 Price performance (%) 1M 3M 6M 12M Tata Motors Ltd M&M Ltd Maruti Suzuki India Ltd Research Analyst Nishit Zota nishit.zota@icicisecurities.com Vidrum Mehta vidrum.mehta@icicisecurities.com Strong revival on the cards! November 17, 215 Tata Motors (TELCO) 4 Tata Motors (TML) Q2FY16 results were above our estimates. Consolidated revenues were at 61,318 crore (up 1.2% YoY,.5% QoQ), above our estimate of 58,616 crore. Net revenue of JLR was at 4831 million (up.5% YoY, down 3.4% QoQ) vs. our estimate of 444 million on account of higher than estimated volumes. (JLR wholesale: 111,16 units vs. our estimate 11,799 units) Consolidated EBITDA margins were at 12.6% (down 443 bps YoY, 349 bps QoQ) vs. our estimate of 11.8%. Reported EBITDA margins of JLR were at 12.2% (down 721 bps YoY, 421 bps QoQ) vs. our estimate of 14.3% mainly due to less favourable sales mix, higher manufacturing & launch cost and unfavourable forex revaluation. Post adjustment of forex revaluation, actual margins would be 13%.The standalone business reported a margin of 6.8% vs. our estimate of 5.3% mainly due to strong MHCV growth of 35.3% YoY & ongoing cost reduction & other margin improvement initiatives The company reported a loss of crore on account of an exceptional item of 245 million (write-down of inventory value related to Tianjin port explosion). Post adjustment for extraordinary items, adjusted PAT came in at 2,223 crore, above our estimate of 1254 crore. While JLR reported a net loss of 92 million (on account of exceptional item), standalone loss came in at crore against our estimated profit of 23.6 crore New launches to mark revival In H1FY16, JLR wholesale volumes grew 5.5% YoY, with growth in regions like UK (23%), North America (42%) & Europe (39%) offset by a steep decline of 35% in China. However, decline in JLR volumes has been arrested post two strong months of September, October. Retail volumes were up 3% YoY, 24% YoY in September & October, respectively. Going ahead, sustained positive growth in China s JLR volumes is expected post the smooth transition from imported volumes to local production of Discovery Sport in H2FY16, launch of XE in China and ramp up of volumes of Evoque. We expect a 6.4% YoY, 15% YoY growth in H2FY16, FY17E on the back of new product pipeline - 1.) XE launch in US, China, 2) Launch of Discovery Sport in US, 3) new XF in H2FY16, 4.) XJ 16 MY in Q3FY16 5) F-Pace/Evoque Convertible in Q4FY16. Standalone business improving TML s domestic business has been negatively impacted by a slowdown in the economy, which led to a sharp decline in MHCV volumes since FY12. On the PV side, TML s lack of customer mind space has probably caused it to operate much below peers on operating profitability metrics in order to claw back market share. However, demand for MHCV recovered in FY15 (17% YoY growth), and witnessed growth of 27% YoY in H1FY16. We have built in volume CAGR of 23% in FY15-17E for TML s MHCV volumes reflecting higher economic growth. Long term drivers intact We remain positive on sustained earnings growth for the JLR business as the product pipeline grows and market share increases across geographies. We value the stock on an SOTP basis, with JLR at 3.5x EV/EBIDTA basis contributing ~ 388/share while the domestic business contributes 5/share. Inclusive of other subsidiaries and China JV, we arrive at a target price to 48. ICICI Securities Ltd Retail Equity Research

2 Variance analysis- Standalone Q2FY16 Q2FY16E Q2FY15 YoY (%) Q1FY16 QoQ (%) Comments Total Operating Income 61,318 58,616 6, ,2.5 The beat on topline is attributable to higher JLR volumes, which were at 111,16 units against our estimate of 11,799 units Raw Material Expenses 37,275 36,376 36, , Employee Expenses 7,12 6,68 6, ,979.5 Other expenses EBITDA 7, ,94.1 1, , EBITDA Margin (%) bps bps Margins came in above our estimates on account of higher than estimated gross margin expansion Depreciation Interest Product Development expenditure Tax PAT Company reported loss of crorw on account of an exceptional item of 245 million (write-down of inventory value related to Tianjin port explosion). Post adjustment for extraordinary items, adjusted PAT came in at 2,223 crore, above our estimate of 1254 crore EPS (Diluted) Key Metrics JLR sales ( mn GBP) Higher than estimates on account of higher than estimated volumes JLR margins (%) bps bps Reported EBITDA margin came at 12.2% (down 721 bps YoY, 421 bps QoQ) against our expectation of 14.3% mainly on account of less favourable sales mix, higher manufacturing & launch cost and unfavorable forex revaluation (euro payables 8 million).post adjustment of forex revaluation, actual margins would be 13% JLR PAT (mn GBP) The company reported a net loss on account of an exceptional item of 245 million recognised during the quarter for 58 vehicles involved in Tianjin port explosion. Post adjustment for extraordinary items, net profit was at 268 million Domestic revenues ( crore) Below estimates on account of lower than estimated ASPs Domestic margins (%) bps bps Beat estimates on account of strong MHCV growth of 35.3% YoY, ongoing cost reduction & other margin improvement initiatives Domestic PAT ( crore) Change in estimates FY16E FY17E ( Crore) Old New % Change Old New % Change Comments Revenue 279, , , ,16. FY16 estimates cut based on H1FY16 trend while we retain FY17 estimates EBITDA 39,544 38, ,772 47, EBITDA Margin (%) bps bps EBITDA margins have been moderated due to expected poorer geography/product mix PAT 13,742 1, ,811 16, EPS ( ) EPS cut due to the cut in revenue & margin estimates Assumptions Current Earlier Comments Units FY14 FY15E FY16E FY17E FY16E FY17E Jaguar Land Rover 429, , , , , ,33 Jaguar 8,522 76,928 94,45 158,527 98, ,924 FY17E volumes to increase on the back of new launches Land Rover 353, , , ,55 391,2 392,56 China JV N.A ,867 7,161 22,867 7,161 Avg ASP/vehicle ( ) 45, , , , , ,813.9 Reduced estimates on the back of geography & product mix RM/Unit (GBP) Capitalised expenses (mn ) 1,3 1,158 1,199 1,347 1,219 1,359 India M&HCV 121, ,49 174, ,696 17,8 29,32 LCV 299, , , , ,772 25,273 Reduced estimates on the back of weak trend in LCV industry volumes PV 145, , ,52 189,22 165, ,497 ICICI Securities Ltd Retail Equity Research Page 2

3 Key conference call takeaways Wholesale & retail volumes for Q2FY16 were at 111,16 units (down.5%yoy, 4.1% QoQ) & 11,2 units (down.5% YoY, down 4.1% QoQ). Land Rover retail volumes of 87,554 units were down.8% (Range Rover & Defender were up, decline in Evoque was offset by Discovery Sport launched this year). Jaguar retail volumes of 22,646 were up 15.3% YoY. (XF & XJ down ahead of launch of all new XF & refreshed XJ. The decline in all the models was offset by XE volumes, which were launched this year The EBITDA margin came in at 12.2% (down 721 bps YoY, 421 bps QoQ) against our expectation of 14.3% mainly on account of less favourable sales mix, higher manufacturing & launch cost and unfavourable forex revaluation (loss of 4 million on revaluation of payables. In Q2FY15, there was a 4 million gain). Post adjustment of forex revaluation, actual margins would be 13% In China, JLR sales (including China JV) were down 26.7% YoY. This was on account of 1) decline in locally manufactured Evoque under China JV and 2) lower import volumes of Discovery Sport ahead of its local production in China Some of the upcoming launches for JLR are 1) XJ 16 MY in Q3FY16, 2) F-PACE in 216 and 3.) XE launch in the US in 216 In Q2FY16, JLR took a write-down of inventory worth 245 million, related to the Tianjin port explosion (~5,8 vehicles). The process for finalising an insurance claim may take some months to conclude, so insurance and other potential recoveries will only be recognised in future periods The company reported negative free cash flow of 2 million in Q2FY16 on account of a decline in EBITDA margin and increase in working capital requirement In Q2FY16, JLR s share of loss from the China JV was at 1 million In Q2FY16, total R&D spend was 381 million while capex was 294 million. The company has guided for a capex of 3.5 billion for FY16E ICICI Securities Ltd Retail Equity Research Page 3

4 Company Analysis Revenues to remain upbeat as domestic improves, JLR sustains! We expect consolidated revenues to grow at ~1.7% CAGR in FY15-17E to ~ 322,16 crore driven by JLR s revenue CAGR of ~6.9% during the same period at ~ 25 billion (~ 2,51,186 crore). On the India side, we expect revenues to rise to ~ 54,24 crore by FY17E at a CAGR of ~22% led by the M&HCV recovery in FY16E, FY17E on the back of volume growth of ~22.8% to ~2.1 lakh units. Exhibit 1: We build revenue growth at 16% CAGR in FY14-16E 35 CAGR 1.7 % FY15-17E 322, , , , , , , FY11 FY12 FY13 FY14 FY15E FY16E FY17E JLR product story to continue in coming years! The management has guided a capex of 3.5 billion for FY16E. The management expects capex to remain in the range of 15-17% of sales in the medium term on significant investments in platform development. Thus, we believe the roadmap for new product launches (Evoque 216 MY, XJ 216MY, new XF, F-PACE) and refreshes over the next four years looks clear. We expect the China JV to ramp up through FY16E, FY17E. This could impact ASPs adversely. Exhibit 2: JLR volumes trend ('s) Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Jaguar LandRover ICICI Securities Ltd Retail Equity Research Page 4

5 Exhibit 3: Jaguar market mix movement ROW, 14% Europe, 23% Q2FY16 UK, 36% Europe, 12% ROW, 1% China, 31% Q2FY15 UK, 26% N America, 21% China, 11% N America, 16% Source: Company press release, ICICIdirect.com Research Retail sale volumes referred Exhibit 4: Land Rover market mix movement Q2FY16 Q2FY15 UK, 18% ROW, 21% Europe, 2% China, 2% N America, 21% Europe, 18% ROW, 18% China, 28% UK, 2% N America, 16% Source: Company press release, ICICIdirect.com Research Retail sale volumes referred Exhibit 5: Product & geography mix (%) Q2FY Q2FY16 XF XJ XK F-Type (%) Q2FY15 Q2FY16 Defender Discovery Freelander Evoque Range Rover RRSport Source: Company press release, ICICIdirect.com Research retail volumes referred RR ~ Range Rover ICICI Securities Ltd Retail Equity Research Page 5

6 EBITDA margins to trend lower Tata Motors remains a unique case that in India has a combination of high leverage CV business along with a financial dragger on the PV side. On the other hand, on the global front with JLR, it has been one of the most profitable luxury carmakers in the world. The variation is mind boggling in itself with the number of levers towards EBITDA ranging from financial leverage to operating leverage to FX to product mix as well as market mix. Thus, in a nutshell, it remains a company that can have large variations from analyst estimates on a quarterly basis. On the China JV, the management has indicated that the ramp up has been slower-than-expected. Start-up of the new plant in China along with a series of new launches could dent EBITDA margins in FY16. However, once the ramp up happens, operating leverage will kick in and the margin is likely to trend upwards. Thus, on a more steady state annual basis, we expect the JLR EBITDA margins to fall on account of poorer market/product mix, increasing marketing costs, industry volume slowdown and start-up costs for engine facility & newer products. In the domestic business, we expect operational positivity to emerge (6% in FY16E and 7% in FY17). Exhibit 6: Consolidated EBITDA margins to decline 5 17 ( crore) , , ,368 42,76 38, , (%) FY12 FY13 FY14 FY15E FY16E FY17E 13 Exhibit 7: Margins trend on standalone and JLR (%) FY9 FY11 FY12 FY13 FY14 FY15E FY16E FY17E (%) EBITDA margins (Standalone) EBITDA margins (JLR) ICICI Securities Ltd Retail Equity Research Page 6

7 Return ratios to decline to reflect falling margins Return ratios witnessed a decline since FY12 primarily due to the significant investment in both JLR and domestic business, the latter of which failed badly in generating strong returns. Going ahead, we expect declining JLR margins to adversely impact return ratios. Return ratios in FY16E, FY17E are expected to appear lower on account of the recent rights issue, which led to an equity dilution of ~5%. On a consolidated level, we expect PAT to grow at 9.4% CAGR to crore. Exhibit 8: Returns ratios trend 3 (%) FY13 FY14 FY15E FY16E FY17E RoCE RoE Exhibit 9: Trend in net profit ( crore) ,517 9,861 13,944 13,986 1,323 16,728 2 FY12 FY13 FY14 FY15E FY16E FY17E Source: Company press release, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 7

8 Outlook and valuation Tata Motors business has been increasingly polarised towards the global business of JLR as weakness in Indian domestic demand has led to a drag in the performance of the standalone business. We believe that with JLR s strong product line-up and planned product refreshes, the market share march is likely to continue. We remain positive on sustained earnings growth for the JLR business as the product pipeline grows and market share increases across geographies. We value the stock on an SOTP basis, with JLR on 3.5x EV/EBIDTA basis contributing ~ 388/share while the domestic business contributes 5/share. Inclusive of other subsidiaries and the China JV, we arrive at a target price of 48. Exhibit 1: Valuation on SOTP method Parameters Basis Multiple Per Share Tata Motors Core business FY17E EPS JLR FY17E Adj EV/EBITDA 36, China stake FY17E EPS Subsidiary valuation Tata Daewoo FY17E EPS Tata Motor Finance FY17E Adj BV Tata Technologies FY17E EPS Value of investments.1x BV of unquoted invst 3 Value of subsidiaries, investments 23 Value post discount Holding co 2% 19 Total value per share 48 TML DVR inferred target 3% discount 336 Exhibit 11: Valuation Revenues Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY14 23, FY15E 26, FY16E 271, (26.2) FY17E 321, ICICI Securities Ltd Retail Equity Research Page 8

9 Company snapshot Target price: 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 Dec-14 Mar -15 Jun-15 Sep-15 Dec-15 Mar-16 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Jan-8 Much touted "Nano" is unveiled at Auto Expo along with new 1 tonne LCV's "ACE". Jun-8 Acquisition of Jaguar & Land Rover for $2.3 billion Jan-9 Tata Motors posts losses as domestic economy sales weaken and global foray causes drag Jul-9 Tata Motors' Q1FY1 results rise 58% YoY beat estimates,early signs of recovery of economy. Nano dispathces rise to 9, units May-1 JLR turns profitable for Tata Motors with FY1 PAT of 32 million, big earnings beat Dec-1 Nano sales fall 85% to 59 units on unavailability of vehicle financing options amid fire incidents Jun-11 JLR announces 1.5 billion capex spends, Tatat Motors CDS rises as European region problems flare up Oct-11 JLR launches its path breaking mini-suv "Evoque" Aug-12 Karl Slym becomes MD of Tata Motor's domestic business Jan-12 JLR reports highest rise in sales since June 21 on the back of "Evoque" May-12 JLR reports tax credits to boost profit amid weaker than estiimated JLR margins Oct-12 Siam cuts India auto sales forecast second time in a year Aug-13 JLR reports stronger than estimated margins in Q1FY14 even as domestic business struggles in losses Feb-14 JLR outlines timelines for new engine plant, new launches, China JV Top 1 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 Tata Group of Companies 13-May Life Insurance Corporation of India 13-May ICICI Prudential Life Insurance Company Ltd. 13-May Carmignac Gestion 31-Mar The Vanguard Group, Inc. 31-Jul ICICI Prudential Asset Management Co. Ltd. 3-Jun William Blair & Company, L.L.C. 3-Jun Fidelity Worldwide Investment (UK) Ltd. 31-Jul Comgest S.A. 31-Dec BlackRock Institutional Trust Company, N.A. 31-Jul Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Promoter FII DII Others Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares Tata Group of Companies m 52.8m Life Insurance Corporation of India -19.1m m ICICI Prudential Asset Management Co. Ltd m 11.39m Comgest S.A m -5.83m HDFC Asset Management Co., Ltd m 1.62m Pioneer Investment Management Ltd m -5.5m Norges Bank Investment Management (NBIM) 49.43m 6.29m BlackRock Investment Management (UK) Ltd m -1.99m Reliance Capital Asset Management Ltd m 6.7m Pyramis Global Advisors, LLC m -1.5m Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 9

10 Financial summary Profit and loss statement Crore (Year-end March) FY14 FY15E FY16E FY17E Total operating Income 232, , , ,16 Growth (%) Raw Material Expenses 143, ,92 167,663 22,688 Employee Expenses 21,518 25,549 3,91 35,841 Marketing Expenses 3,224 35,251 55,586 62,17 Capitalised Expenses -19,197-25,768 Total Operating Expenditure 195,493 22,72 234, ,778 EBITDA 37,368 42,76 38,7 47,328 Growth (%) Product development Expenses Depreciation Interest Other Income PBT Minority Interest Total Tax PAT 13,944 13,986 1,323 16,728 Growth (%) EPS ( ) Cash flow statement Crore (Year-end March) FY14 FY15E FY16E FY17E Profit after Tax 13, , , ,727.8 Add: Depreciation 11,12 13,389 14,819 16,97 (Inc)/dec in Current Assets -11,65 1, ,878 Inc/(dec) in CL and P rovisions 7,735 4,472-12,353 22,259 Ot hers CF from operating activities 21,716 32,862 13,54 35,78 (Inc)/dec in Investments -1,922-4,65-1, -1, (Inc)/dec in Fixed Assets -38,615-28,436-33,565-36,5 Others 2,216 11, CF from investing activities (38,321) (21,312) (35,68) (37,98) Issue/(Buy back) of Equity 6 35 Inc/(dec) in loan funds 11,178 14,257 4, 4, Dividend paid & dividend tax -769 Inc/(dec) in Sec. premium 355 8,361 Others 14,431-23,328 21,128 CF from financing activities 25,21 (9,71) 33,524 4, Net Cash flow 8,596 2,479 11,996 1,98 Opening Cash 21,115 29,711 32,19 44,187 Closing Cash 29,711 32,19 44,187 45,285 Balance sheet Crore (Year-end March) FY14 FY15E FY16E FY17E L iabil it ies Equity Capital Reserve and Surplus 64,96 55,618 95,43 112,158 Total Shareholders funds 65,64 56,262 96,19 112,837 Total Debt 54,954 69,211 73,211 77,211 Deferred Tax Liability 1,572 1,343 1,343 1,343 Long term provisions Minority Interest / Others 3,18 9,649 9,747 9,867 Total Liabilities 137, ,6 197,45 219,393 Assets Gross Block 132, , , ,261 Less: Acc Depreciation 68,815 83,11 1, ,825 Net Block 64,113 79,16 97,96 117,436 Capital WIP 33,263 33,263 33,263 33,263 Total Fixed Assets 97, , ,169 15,699 Investments 1,687 15,337 16,337 17,337 Inventory 27,271 29,272 24,317 42,685 Debtors 1,574 12,58 11,164 14,16 Loans and Advances 14,55 1,746 14,878 15,216 Other Current Assets 4,661 2,948 4,437 3,667 Cash 29,711 32,19 44,187 45,285 Total Current Assets 86,273 87,736 98,982 12,958 Creditors 57,316 57,47 52,844 62,593 Provisions 7,971 6,36 5,556 6,581 Total Current Liabilities 82,66 87,132 74,779 97,38 Net Current Assets 3, ,23 23,921 Deferred Tax Asset 2,347 2,733 2,733 2,733 Application of Funds 137, ,6 197,45 219,392 Key ratios (Year-end March) FY14 FY15E FY16E FY17E Per share data ( ) EPS Cash EPS BV DP S Cash Per Share Operating Ratios EBITDA Margin (%) PBT / Net sales (%) PAT Margin (%) Inventory days Debtor days Creditor days R eturn 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 1

11 ICICIdirect.com coverage universe (Auto & Auto Ancillary) CMP M Cap EPS ( ) P/E (x) EV/ EBITDA (x) RoCE (% ) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E Amara Raja (AMARAJ) Buy Apollo Tyre (APOTYR) Buy Ashok Leyland (ASHLEY) 9 9 Hold Bajaj Auto (BAAUTO) Buy Balkrishna Ind. (BALIND) Hold Bharat Forge (BHAFOR) Buy Bosch (MICO) Buy Eicher Motors (EICMOT) Hold Escorts (ESCORT) Hold Exide Industries (EXIIND) Buy Hero Mototcorp (HERHON) Hold JK Tyre & Ind (JKIND) Buy M&M (MAHMAH) Buy Mahindra CIE (MAHAUT) Buy NA Maruti Suzuki (MARUTI) Buy Motherson (MOTSUM) Hold Tata Motors (TELCO) 4 48 Buy Wabco India (WABTVS) Hold ICICI Securities Ltd Retail Equity Research Page 11

12 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 12

13 ANALYST CERTIFICATION We /I, Nishit Zota, MBA & Vidrum Mehta, MBA Research Analyst, 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. INH99. 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 is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. 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