Cipla Ltd. Absolute : ADD Relative : Benchmark. 4QFY18 Result: Estimate ( ), TP ( ), Rating ( ) Regular Coverage 5% ATR in 16 Months

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1 2018EquirusAll rights reserved Rating Information Price (Rs) 520 Target Price (Rs) 547 Target Date 30th Sep'19 Target Set On 22nd May'18 Implied yrs of growth (DCF) 20 Fair Value (DCF) 543 Fair Value (DDM) 99 Ind Benchmark BSETHC Model Portfolio Position - Stock Information Market Cap (Rs Mn) 4,21,882 Free Float (%) % 52 Wk H/L (Rs) 663.4/479 Avg Daily Volume (1yr) 16,73,717 Avg Daily Value (Rs Mn) 968 Equity Cap (Rs Mn) 1,610 Face Value (Rs) 2 Bloomberg Code CIPLA IN Ownership Recent 3M 12M Promoters 37.2% 0.0% -0.3% DII 14.2% -0.2% -1.7% FII 23.9% 0.5% 5.8% Public 24.7% -0.2% -3.9% Price % 1M 3M 12M Absolute % % -1.7 % Vs Industry -5.5 % -3.9 % 10.5 % LUPIN -8.8 % -8.3 % % SUNPHARMA % % % Consolidated Quarterly EPS forecast Rs/Share 1Q 2Q 3Q 4Q EPS (18A) EPS (19E) Cipla Ltd. Absolute : ADD Relative : Benchmark 4QFY18 Result: Estimate (), TP (), Rating () Regular Coverage 5% ATR in 16 Months A big miss assign ADD Cipla s Q4FY18 earnings disappointed with a ~27% EBITDA miss on below-expected domestic and US sales. While Q4 which sees most yearly adjustments is usually weak, we note the miss was sharp, even more on adjusting for one-offs (~Rs 300mn on net basis). While structural drivers remain intact, we feel margin expansion can be slower than expected, and accordingly cut FY19/FY20 EPS by 30%/22%. Assign ADD (Long earlier); Sep 19 TP of Rs 547 (vs. Mar 19 TP of Rs. 662) set at 22x. US revenues hit by supply disruptions, product recalls: US revenues were up only US$ 4mn qoq, below estimates considering high-value launches like gpulmicort, galoxi and gdacogen. Management stated US revenues fell short of its expectations by US$ 6mn-7mn due to product recalls, rationalization of low-margin products and supply-related issues (incl. in gdacogen, gpulmicort) which should iron out before Jun-18 end. Hence, Q1FY19 should witness moderate growth as well. Management expects double-digit growth in US revenues in FY19, which we feel is not very encouraging considering that Cipla targets at least one high-value launch every quarter. India weak, other businesses mixed: India business grew 13% yoy off a low Q4FY17 base, which was weaker than expected. Note that Q4 is seasonally a weak quarter for Cipla. Management expects India business to clock US$ 1bn in revenues in FY19, which implies a 13-14% yoy growth (in line with estimates). Other businesses were mixed with South Africa posting a strong 16% growth in CC terms but the global access business sliding 54% yoy (down more than 25% yoy due to market shrinkage and funding issues). A big margin miss: Reported margins of 15.1% missed estimates by bps vs. EE/ consensus. On net basis, EBITDA had one-off income of ~Rs 300mn (US$ 11mn milestone income from Allerga, Rs 450mn one-off costs). Adjusting for the milestone income, gross margins slid ~150bps qoq. Cipla has initiated Advair trials which should push up R&D costs on absolute basis. However, it hopes to cap R&D costs at 8% of sales and improve margins by at least 100bps next year. While structural drivers remain intact, we expect margin expansion to be gradual vs. anticipated earlier and thus cut FY19/FY20 EPS by 30%/22%. Other takeaways: (1) Cipla filed 24 products in FY18 and aims to file ~20 ANDAs in FY19. (2) 1Q would not fully reflect gpulmicort and gdacogen sales due to supply issues, which should resolve by Q2FY19. (3) Albuterol launch is expected in early-fy20 vs. a FY19 launch earlier. (4) gadvair is unlikely to be filed in FY19. (5) The current depreciation run-rate is likely to continue in ensuing quarters as Invagen-related intangibles are written off with the commercialization of new products. (6) Cipla believes price erosion is in the US market is close to bottoming out. Change in Estimates: Pharmaceutical Rs. Mn FY19E Chg (%) FY20E Chg (%) Sales 1,72,554-8% 1,98,466-6% EBITDA 33,775-18% 40,402-13% EPS (Rs.) 21-30% 27-22% Consolidated Financials Rs. Mn YE Mar FY18A FY19E FY20E FY21E Sales 1,52,193 1,72,554 1,98,466 2,25,070 EBITDA 28,264 33,775 40,402 48,110 Depreciation 13,228 12,269 13,602 14,898 Interest Expense 1,142 1, Other Income 2,396 1,880 1,993 2,469 Reported PAT 11,806 17,277 21,806 27,178 Recurring PAT 13,761 17,277 21,806 27,178 Total Equity 1,42,292 1,57,143 1,75,888 1,99,250 Gross Debt 40,980 30,980 20,980 10,980 Cash 24,203 32,030 42,371 50,130 Rs. Mn YE Mar FY18A FY19E FY20E FY21E Earnings Book Value Dividends FCFF P/E (x) P/B (x) EV/EBITDA (x) ROE (%) 10 % 12 % 13 % 14 % Core ROIC (%) 7 % 10 % 16 % 17 % EBITDA Margin (%) 19 % 20 % 20 % 21 % Net Margin (%) 9 % 10 % 11 % 12 % May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / ) Page 1 of 10 Before reading this report, you must refer to the disclaimer on the last page.

2 Quarterly performance, consolidated % Change Q4FY18 Q4FY18E Q3FY18 Q4FY17 Q4FY18E Q3FY18 Q4FY17 Net Sales 36,980 38,774 39,138 35,820-5% -6% 3% Comments Cost of Goods Sold (COGS) 13,303 13,717 13,784 13,155-3% -3% 1% Employees' Cost 6,990 6,700 6,573 6,389 4% 6% 9% Other Expenditure 8,308 7,620 7,620 8,133 9% 9% 2% R&D Expenses 2,810 3,102 2,975 3,081-9% -6% -9% Total Expenditures % 1% 2% EBITDA % -32% 10% Depreciation 2,848 3,500 5,224 6,322-19% -45% -55% EBIT 2,721 4,135 2,963-1,260-34% -8% -316% Interest % 285% 5% Other Income % -24% 76% PBT 2,769 4,306 3,401-1,366-36% -19% -303% Tax % -172% -161% PAT before MI & Associates % -43% -479% Minority Interest Profit from Assoc % -107% -103% Recurring PAT 2,308 3,427 4, % -43% -473% Extraordinaries Reported PAT 1,532 3,427 4, % -62% -348% EPS (Rs) % -43% -473% Gross Margin 64% 65% 65% 63% EBITDA Margin 15% 20% 21% 14% EBIT Margin 7% 11% 8% -4% ,087 PBT Margin 7% 11% 9% -4% ,130 PAT Margin 4% 9% 10% -2% Tax Rate 17% 20% -19% 55% ,556-3,876 May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 2 of 9

3 Company Snapshot How we differ from Consensus EPS Sales PAT - Equirus Consensus % Diff Comment FY19E % FY20E % FY19E 1,72,554 1,56, % FY20E 1,98,466 1,77, % FY19E 17,277 16,395 5 % FY20E 21,806 20,883 4 % Investment Argument Mainly because we are expecting operational efficiencies in the business Key launches like gnasonex, grenagel, gtamiflu, gviread and gsustiva to aid revenues Ramp-up of gseretide in the European market Margin improvement on the back of new high-value launches in the US Risk to Our View Delay in approvals in the US market Unexpected adverse actionbyregulators Key Triggers: Launch of combination inhaler (Advair MDI) in European countries Approval and launch of any limited competition product in the US Sensitivity to Key Variables % Change % Impact on EPS Revenue -1 % -8 % DCF Valuations & Assumptions Rf Beta Ke Term. Growth Debt/IC in Term. Yr 6.9 % % 2.5 % 18.4 % - FY19E FY20E FY21-23E FY24-28E FY29-38E Sales Growth 13 % 15 % 9 % 9 % 7 % NOPAT Margin 10 % 13 % 13 % 14 % 14 % IC Turnover RoIC 9.8 % 15.8 % 17.4 % 18.3 % 18.3 % Years of strong growth Valuation as on date (Rs) Valuation as of Sep ' Based on DCF, assuming 20 years of ~11% CAGR growth and 17.5% average ROIC, we derive current fair value of Rs. 510 and a 31 st Sep 19 fair value of Rs 554. Company Description: Cipla is one of the oldest and most diversified pharma companies in India. The company is present in India, Africa, Europe and US as key markets along with presence in more than 120 emerging and underdeveloped countries. It ranks third with a 5.3% market share in domestic pharma market with leadership in respiratory segment (~60% market share). Cipla is also most penetrated company in the Indian Territory with a sales force of 7,000, largest among peers. It has a strong presence in South Africa where it ranks second in generic segment with ~14% market share. With launch of generic Seretide in 2HFY15, Cipla is going to make big strides in European respiratory market. Comparable valuation Mkt Cap Price Target EPS P/E BPS P/B RoE Div Yield Company Reco. CMP Rs. Mn. Target Date FY18A FY19E FY20E FY18A FY19E FY20E FY18A FY19E FY18A FY19E FY20E FY18A FY19E Cipla ADD 520 4,21, th Sep' % 12 % 13 % 0.6 % 0.5 % Lupin Reduce 740 3,34, st Mar % 11 % 12 % 0.7 % 0.7 % Sun Pharma ADD ,86, st Mar % 8 % 14 % 0.6 % 0.6 % May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 3 of 9

4 Consolidated Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q18A 2Q18A 3Q18A 4Q18A 1Q19E 2Q19E 3Q19E 4Q19E 1Q20E 2Q20E 3Q19E 4Q20E FY18A FY19E FY20E FY21E Revenue 35,251 40,824 39,138 36,980 39,936 46,151 43,800 42,667 46,783 52,752 50,184 48,746 1,52,193 1,72,554 1,98,466 2,25,070 Cost of Goods Sold (COGS) 11,767 15,531 13,784 13,303 14,100 16,309 15,424 14,984 16,909 19,061 18,097 17,545 54,384 60,816 71,613 81,323 Employees' Cost 6,729 6,608 6,573 6,990 7,133 7,137 7,165 7,549 7,846 7,850 7,882 8,304 26,901 28,984 31,883 35,071 Other Expenditure 8,170 8,192 7,620 8,308 8,578 8,847 8,610 9,139 9,436 9,732 9,471 10,052 32,289 35,174 38,692 42,561 EBITDA 6,465 8,044 8,187 5,569 6,930 10,166 9,097 7,582 8,849 11,889 10,720 8,945 28,264 33,775 40,402 48,110 Depreciation 2,134 3,022 5,224 2,848 3,067 3,067 3,067 3,067 3,400 3,400 3,400 3,400 13,228 12,269 13,602 14,898 EBIT 4,330 5,022 2,963 2,721 3,862 7,099 6,030 4,515 5,448 8,488 7,319 5,544 15,036 21,506 26,800 33,211 Interest ,142 1, Other Income 334 1, ,396 1,880 1,993 2,469 PBT 4,386 5,735 3,401 2,769 4,023 7,259 6,190 4,675 5,737 8,777 7,608 5,832 16,290 22,147 27,954 34,841 Tax 1,308 1, ,597 1,362 1,029 1,262 1,931 1,674 1,283 2,501 4,872 6,150 7,665 PAT bef. MI & Assoc. 3,078 4,361 4,043 2,307 3,138 5,662 4,828 3,647 4,475 6,846 5,934 4,549 13,789 17,274 21,804 27,176 Minority Interest Profit from Assoc Recurring PAT 3,069 4,350 4,035 2,308 3,138 5,663 4,829 3,647 4,475 6,846 5,935 4,550 13,761 17,277 21,806 27,178 Extraordinaries 1, , Reported PAT 1,889 4,350 4,035 1,532 3,138 5,663 4,829 3,647 4,475 6,846 5,935 4,550 11,806 17,277 21,806 27,178 EPS (Rs) Key Drivers Domestic Formulations 16,519 16,724 16,051 16,295 18,831 19,065 18,298 18,576 21,468 21,734 20,860 21,177 65,588 74,771 85,239 97,172 Export Formulations 22,550 23,855 20,605 22,100 23,015 24,524 23,013 24,399 28,008 28,514 26,849 28,379 89,110 94,952 1,11,750 1,23,128 API (Domestic + Export) 1,300 2,145 1,495 1,350 1,365 2,252 1,570 1,418 1,433 2,365 1,648 1,488 6,290 6,605 6,935 7, Sequential Growth (%) Revenue -2 % 16 % -4 % -6 % 8 % 16 % -5 % -3 % 10 % 13 % -5 % -3 % Cost of Goods Sold (COGS) -11 % 32 % -11 % -3 % 6 % 16 % -5 % -3 % 13 % 13 % -5 % -3 % EBITDA 28 % 24 % 2 % -32 % 24 % 47 % -11 % -17 % 17 % 34 % -10 % -17 % EBIT -444 % 16 % -41 % -8 % 42 % 84 % -15 % -25 % 21 % 56 % -14 % -24 % Recurring PAT -454 % 42 % -7 % -43 % 36 % 80 % -15 % -24 % 23 % 53 % -13 % -23 % EPS -597 % 42 % -7 % -43 % 36 % 80 % -15 % -24 % 23 % 53 % -13 % -23 % Yearly Growth (%) Revenue -2 % 9 % 7 % 3 % 13 % 13 % 12 % 15 % 17 % 14 % 15 % 14 % 4 % 13 % 15 % 13 % EBITDA 6 % 18 % 21 % 10 % 7 % 26 % 11 % 36 % 28 % 17 % 18 % 18 % 14 % 19 % 20 % 19 % EBIT -4 % 11 % -29 % -316 % -11 % 41 % 103 % 66 % 41 % 20 % 21 % 23 % 26 % 43 % 25 % 24 % Recurring PAT -13 % 22 % 67 % -367 % 2 % 30 % 20 % 58 % 43 % 21 % 23 % 25 % 71 % 26 % 26 % 25 % EPS -16 % 23 % 8 % -473 % 2 % 30 % 20 % 58 % 43 % 21 % 23 % 25 % 33 % 26 % 26 % 25 % Margin (%) EBITDA 18 % 20 % 21 % 15 % 17 % 22 % 21 % 18 % 19 % 23 % 21 % 18 % 19 % 20 % 20 % 21 % EBIT 12 % 12 % 8 % 7 % 10 % 15 % 14 % 11 % 12 % 16 % 15 % 11 % 10 % 12 % 14 % 15 % PBT 12 % 14 % 9 % 7 % 10 % 16 % 14 % 11 % 12 % 17 % 15 % 12 % 11 % 13 % 14 % 15 % PAT 9 % 11 % 10 % 6 % 8 % 12 % 11 % 9 % 10 % 13 % 12 % 9 % 9 % 10 % 11 % 12 % May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 4 of 9

5 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Consolidated Financials Cipla Ltd Absolute ADD Relative Benchmark 5% ATR in 16 Months P&L (Rs Mn) FY18A FY19E FY20E FY21E Balance Sheet (Rs Mn) FY18A FY19E FY20E FY21E Cash Flow (Rs Mn) FY18A FY19E FY20E FY21E Revenue 1,52,193 1,72,554 1,98,466 2,25,070 Equity Capital 1,610 1,610 1,610 1,610 PBT 16,290 22,147 27,954 34,841 Op. Expenditure 1,23,929 1,38,779 1,58,064 1,76,961 Reserve 1,40,682 1,55,533 1,74,277 1,97,640 Depreciation 13,228 12,269 13,602 14,898 EBITDA 28,264 33,775 40,402 48,110 Networth 1,42,292 1,57,143 1,75,888 1,99,250 Others -1, Depreciation 13,228 12,269 13,602 14,898 Long Term Debt 40,980 30,980 20,980 10,980 Taxes Paid 2,501 4,872 6,150 7,665 EBIT 15,036 21,506 26,800 33,211 Def Tax Liability 7,846 7,846 7,846 7,846 Change in WC -8,068 3, ,497 Interest Expense 1,142 1, Minority Interest 3,524 3,524 3,524 3,524 Operating C/F 16,994 32,780 35,406 33,577 Other Income 2,396 1,880 1,993 2,469 Account Payables 21,191 15,829 18,639 21,166 Capex -11,536-9,005-12,005-15,579 PBT 16,290 22,147 27,954 34,841 Other Curr Liabi 12,772 12,772 12,772 12,772 Change in Invest -1, ,574 Tax 2,501 4,872 6,150 7,665 Total Liabilities & Equity 2,28,606 2,28,094 2,39,649 2,55,539 Others PAT bef. MI & Assoc. 13,789 17,274 21,804 27,176 Net Fixed Assets 1,09,315 1,06,046 1,04,444 1,01,546 Investing C/F -12,616-9,005-12,005-12,005 Minority Interest Capital WIP Change in Debt ,000-10,000-10,000 Profit from Assoc Others 11,150 11,154 11,159 11,164 Change in Equity 8, Recurring PAT 13,761 17,277 21,806 27,178 Inventory 40,447 41,655 49,050 55,701 Others -6,221-2,423-3,059-3,813 Extraordinaires 1, Account Receivables 31,025 28,365 32,625 36,998 Financing C/F 1,685-12,423-13,059-13,813 Reported PAT 11,806 17,277 21,806 27,178 Other Current Assets 15,991 8, Net change in cash 6,062 11,352 10,342 7,759 FDEPS (Rs) Cash 20,678 32,030 42,371 50,130 RoE (%) 10 % 12 % 13 % 14 % DPS (Rs) Total Assets 2,28,606 2,28,094 2,39,649 2,55,539 RoIC (%) 8 % 9 % 11 % 13 % CEPS (Rs) Non-cash Working Capital 53,499 50,263 50,263 58,760 Core RoIC (%) 7 % 10 % 16 % 17 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 24 % 14 % 14 % 14 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 19 % 20 % 20 % 21 % FA Turnover P/B PATM (%) 9 % 10 % 11 % 12 % Net D/E P/FCFF Tax Rate (%) 15 % 22 % 22 % 22 % Revenue/Capital Employed EV/EBITDA Sales Growth (%) 4 % 13 % 15 % 13 % Capital Employed/Equity EV/Sales FDEPS Growth (%) 33 % 26 % 26 % 25 % Dividend Yield (%) 0.6 % 0.5 % 0.6 % 0.8 % TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE EPS Growth 40% 30% 20% 10% 0% -10% -20% 55x 32x 24x 16x 8x EBITDA Growth 30% 28x % x 20% % 12x % 8x % 4x 0 0% 1500 RoE 40% 6x % 4x 900 3x 20% 600 2x % 1x 0 0% May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 5 of 9

6 Historical Consolidated Financials Cipla Ltd Absolute ADD Relative Benchmark 5% ATR in 16 Months P&L (Rs Mn) FY15A FY16A FY17A FY18A Balance Sheet (Rs Mn) FY15A FY16A FY17A FY18A Cash Flow (Rs Mn) FY15A FY16A FY17A FY18A Revenue 1,13,454 1,36,783 1,45,740 1,52,193 Equity Capital 1,606 1,606 1,609 1,610 PBT 16,543 20,070 12,651 16,290 Op. Expenditure 91,837 1,11,772 1,20,984 1,23,929 Reserve 1,06,409 1,16,968 1,23,645 1,40,682 Depreciation 5,047 5,417 12,799 13,228 EBITDA 21,617 25,011 24,756 28,264 Networth 1,08,015 1,18,574 1,25,254 1,42,292 Others 2,739-1, ,955 Depreciation 5,047 5,417 12,799 13,228 Long Term Debt 17,018 51,914 41,126 40,980 Taxes Paid 3,083 3,083 1,953 2,501 EBIT 16,570 19,594 11,956 15,036 Def Tax Liability 5,327 6,348 10,361 7,846 Change in WC -5,619-5,619 2,337-8,068 Interest Expense 1,683 1,613 1,592 1,142 Minority Interest 1,805 2,696 4,382 3,524 Operating C/F 15,627 15,627 25,834 16,994 Other Income 1,656 2,089 2,287 2,396 Account Payables 15,772 14,095 15,711 21,191 Capex -5,666-5,666-20,595-11,536 PBT 16,543 20,070 12,651 16,290 Other Curr Liabi 9,239 15,299 12,866 12,772 Change in Invest -7,758-7,758 3,965-1,080 Tax 4,000 4,396 1,953 2,501 Total Liabilities & Equity 1,57,175 2,08,926 2,09,701 2,28,606 Others PAT bef. MI & Assoc. 12,542 15,674 10,698 13,789 Net Fixed Assets 74,105 1,10,786 1,11,567 1,09,315 Investing C/F -12,499-12,499-16,631-12,616 Minority Interest Capital WIP Change in Debt , Profit from Assoc Others 2,498 6,458 9,509 11,150 Change in Equity 0 0-1,766 8,052 Recurring PAT 12,771 16,101 10,326 13,761 Inventory 37,806 38,080 34,853 40,447 Others -3,240-3,240 3,447-6,221 Extraordinaires ,955 Account Receivables 20,043 23,593 28,898 31,025 Financing C/F -2,807-2,807-9,107 1,685 Reported PAT 12,771 16,101 10,326 11,806 Other Current Assets 13,181 15,489 10,257 15,991 Net change in cash ,062 EPS (Rs) Cash 9,543 14,520 14,616 20,678 RoE (%) 12 % 14 % 8 % 10 % DPS (Rs) Total Assets 1,57,175 2,08,926 2,09,701 2,28,606 RoIC (%) 10 % 10 % 6 % 8 % CEPS (Rs) Non-cash Working Capital 46,018 47,768 45,431 53,499 Core RoIC (%) 11 % 11 % 6 % 7 % FCFPS (Rs) Cash Conv Cycle Div Payout (%) 15 % 12 % 18 % 24 % BVPS (Rs) WC Turnover P/E EBITDAM (%) 19 % 18 % 17 % 19 % FA Turnover P/B PATM (%) 10 % 11 % 7 % 9 % Net D/E P/FCFF Tax Rate (%) 24 % 22 % 15 % 15 % Revenue/Capital Employed EV/EBITDA Sales growth (%) 12 % 21 % 7 % 4 % Capital Employed/Equity EV/Sales FDEPS growth (%) -15 % 28 % -32 % 33 % Dividend Yield (%) 0.4 % 0.4 % 0.4 % 0.6 % May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 6 of 9

7 Equirus Securities Research Analysts Sector/Industry Equity Sales Abhishek Shindadkar IT Services VishadTurakhia Ashutosh Tiwari Auto, Metals & Mining SubhamSinha DepeshKashyap Mid-Caps Viral Desai Dhaval Dama FMCG, Mid-Caps Viraj Mehta Maulik Patel Oil and Gas Dealing Room Pranav Mehta Building Materials Ashish Shah PrafulBohra Pharmaceuticals IleshSavla Rohan Mandora Banking & Financial Services Manoj Kejriwal Associates Dharmesh Mehta Ankit Choudhary Bharat Celly Compliance Officer Harshit Patel Jay Soni Hetal Bhatia Corporate Communications Meet Chande MahdokhtBharda Nishant Bagrecha Parva Soni Ronak Soni Samkit Shah Shreepal Doshi Varun Baxi Vikas Jain Rating & Coverage Definitions: Absolute Rating LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion and ATR >= 20% for rest of the companies ADD: ATR >= 5% but less than Ke over investment horizon REDUCE: ATR >= negative 10% but <5% over investment horizon SHORT: ATR < negative 10% over investment horizon Relative Rating OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon BENCHMARK: likely to perform in line with the benchmark UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon Investment Horizon Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a calendar quarter. Lite vs. Regular Coverage vs. Spot Coverage We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we would have access to the company and we would maintain detailed financial model for Regular coverage companies. We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot coverage is meant to stimulate discussion rather than provide a research opinion. Registered Office: Equirus Securities Private Limited Unit No. 1201, 12th Floor, C Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai Tel. No: +91 (0) Fax No: +91- (0) Corporate Office: 3rd floor, House No. 9, Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge, S.G. Highway Ahmedabad Gujarat Tel. No: +91 (0) Fax No: +91 (0) May 23, 2018 Analyst: PrafulBohra( / ), Bharat Celly ( / Page 7 of 9

8 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited Analyst Certification I, PrafulBohra/Bharat Celly, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Disclosures Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the Capital Market (Reg. No. INB ), Futures & Options Segment (Reg. No.INF ) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB ) of Bombay Stock Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH ), as a Portfolio Manager under SEBI (Portfolio Managers Regulations, 1993 (Reg. No.INP ) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP ). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers & acquisitions and structured finance. 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