Gujarat State Petronet Ltd Initiating Coverage

Transcription

1 Industry Gas Transmission Recommendation Accumulate CMP (INR) 94 Target Price (INR) 105 Upside / (Downside) % 11.5% Market Cap (INR in Mn) week High/Low (INR) 105 / 26 3M Average Daily Volume Sensex / Nifty / 4953 Bloomberg Code GUJS IN Reuters Code GSPT.BO Shareholding Pattern (%) Pure Gas Transmission Strong Growth Accumulate Incorporated in December 1998, Gujarat State Petronet Ltd (GSPL) is a gas distribution subsidiary of state-owned Gujarat State Petroleum Corporation (GSPC). With its leadership position in India s fast-growing gas market, GSPL strongly claims its perceptible volume-led growth. INVESTMENT RATIONALE Major beneficiary from Gujarat s huge demand potential: GSPL is strategically located in the Industrial clusters of Gujarat (largest gas consuming state) driving volume growth through preeminent pipeline connectivity, favourable regulation policies, and its reach within Gujarat. High supply volumes giving edge to GSPL growth: With increase in gas supplies from Reliance KG basin D6 and Petronet LNG, gas transmission volumes are expected to reach 55% CAGR over FY09-FY12E. Impact of this increase will be reflected as growth from FY09-10 onwards for GSPL. (As on September 30 th, 2009) Stock Performance (One Year Chart) Company NIFTY Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Performance (%) 1M 3M 12M Company NIFTY Source: Unicon Research Analyst: Arvind Rana Focus on expansion of network outside Gujarat: Mounting market potential beyond Gujarat drove GSPL to file Expression of Interest (EOI) with regulator for four new routes to grab more pipelines in its pocket. The decision on this is expected in January-February Thus stronger growth scenario outside Gujarat may appear for GSPL before the end of FY10E. Benefit by bidding through SPVs: To extract benefit from Sec 35AD, GSPL is expected to bid for the new pipeline outside Gujarat through special purpose vehicles (SPV), which ensures, capex on pipelines could be charged as deductible expense. This would contribute to the bottom line through lower taxes. Advantage from Price Economics of Naphtha: Naphtha prices have risen lately, rendering Regassified Liquefied Natural Gas (RLNG) competitive, which enable the volumes to pick up from Q4 FY09, with a visible improvement from Q1 FY10. Valuation & Recommendation GSPL is expected to see a huge jump in its EPS of INR 2.2 for FY09 to INR 12.6 for FY12. Revenues are expected to grow at a CAGR of 51% over FY09-FY12. Based on DCF calculations, stock has an intrinsic value of INR 105. At current market price of INR 94, we give Accumulate rating to the stock, with a time horizon of 12 months. Year Revenue EBIDTA EBIDTA (%) PAT PAT (%) EPS P/E (x) RoE (%) RoCE (%) FY FY FY10E FY11E FY12E Source: Unicon Research 1

2 CONTENTS Company Background 03 Business Model / Manufacturing Process 04 Management Brief 05 Industry Overview 05 Investment Rationale and recommendation 06 Major beneficiary from Gujarat s huge demand potential 06 High supply volumes giving edge to GSPL growth 06 GSPL looking forward to grab new pipelines by bidding through SPVs 06 Operation & Maintenances Activities 06 Price Economics of Naphtha 06 Growing Demand Of Natural gas in India 07 Tariff Regulations 07 Favourable Gas Pipeline Policy for GSPL 08 Concerns 09 Financial analysis 09 Peer Analysis 10 Valuations & Outlook 10 Financial Tables & Ratios 11 2

3 GSPL Gas Transmission Network- Gujarat Company Background Gujarat State Petronet Ltd (GSPL), a subsidiary of Gujarat State Petroleum Corporation (GSPC), is the first pure transmission player in the gas sector. It is the largest gas transmission player with outstanding connectivity and reach in the largest gas consuming state of India, i.e. Gujarat. GSPL is well-known as an open access / contract carrier gas transmission pipeline operator, which means that it offers the service of transporting gas to customers who have the demand and have tied up the supply source for a transportation fee. Thus commodity price risk does not impact GSPL and its revenue growth mainly comes from Volume game. GSPL is going to increase its pipeline from 1,420 km to 1,870 km by Current capacity 45 mmscmd (million metric standard cubic meters per day) Current utilization 35 mmscmd It has signed a 15 year agreement with Reliance Industries Ltd (RIL) to transport 11 mmscmd. It also signed a 20 year agreement with Torrent Power (Torrent) to transport 4.5 mmscmd. GSPC (Parent co) is expected to start production in KG Basin by 2010 with a volume of mmscmd. Previous year: GSPL GTAs MMSCMD & interruptible GTAs 7.53 MMSCMD Gas transmission volumes Gas Transportaion Volumes (MMSCMD) FY06 FY07 FY08 FY09 FY10EFY11EFY12E The Company has signed firm Gas Transmission Agreements (GTA) for transporting mmscmd of gas to various customers and interruptible / short term GTA for mmscmd. Also boost in re-gasification capacity at Dahej & Hazira, and commissioning of the new R-LNG terminal at Dabhol are expected to provide an opportunity to GSPL to transmit additional R-LNG volumes going ahead. The major customers of GSPL include RIL, Essar group, Torrent Power, Shell, Petronet LNG, Cairn India and GSPC. GSPL has acquired strategic stakes in Krishna Godavari Gas Network Limited (planning to develop gas transmission) CGD (Compressed Gas Distribution) network in Andhra Pradesh & Gujarat. GSPL has successfully commissioned various pipeline projects like Bhadbhut- Gana, Rajkot-Jamnagar, Padmala Halol, and Suzlon Spur. Further, the company also continues to develop several spur lines to connect industrial clusters and medium size customers along the pipeline network, which include regions like Tarapur, Vilayat, Dahej, Silvasa, Bhavnagar, Amreli, Veraval, Gandhidham, Anjar, Mundra, Jafrabad region. GSPL has expanded its gas pipeline network beyond the traditional markets of South Gujarat and extended it to the Central and Northern parts of Gujarat. It is currently building a pipeline to Mundra and Pipavav ports, which will improve its presence in the Western parts of the State. 3

4 Business Model GTA GTA Marketers Producers LNG Terminals (GSPL) Bulk Customers Local Distribution Companies Overview: GSPL s customer space includes both suppliers as well as users of natural gas. Suppliers of natural gas include marketers, producers of natural gas and LNG terminals. Producers/suppliers of gas have direct Gas Sale Agreements (GSA) with the buyers and either of the parties can enter the Gas Transmission Agreement (GTA) with GSPL to use its network for gas shipment. Users of natural gas comprise bulk customers (power and fertilizer companies) and local distribution companies. GSPL operates as a pure natural gas transmission company and as such does not own any natural gas transported through its network which insulates it from the fluctuations of the prices in natural gas. GTA The GTA designates the entry and exit points for the natural gas as it travels through the gas transmission network. GTA also lays down the terms including the tariffs, tenure and capacity reserved in the gas transmission network. A typical contract period varies between 5 and 25 years. Long term agreement accounts for major portion of revenue for GSPL. GSPL's GTAs include "ship or pay" provisions, which require its customers to pay the capacity charges for the capacity reserved by them, regardless of the amount of natural gas they transport. GTAs also include provisions for payment security mechanisms, such as bank guarantees and letters of credit. 4

5 Management Brief GSPL being the subsidiary of state-owned GSPC, its management is monitored by Government. Shri D Rajagopalan, IAS, the Chairman holds Master Degree in Science. He is a senior IAS officer having administrative and corporate experience spanning 25 years. During his tenure with the Central Government, he has served as the Import and Export Secretary with the Commerce and Industry Ministry, Government of India. Presently he is Additional Chief Secretary, Industry and Mines Department, Government of Gujarat. Industry Overview Prominent Demand Supply Gap Huge Demand in Gujarat itself Growing Indian Economy requires higher energy consumption, and thereby triggers development of Indian Energy Sector, and Gas sector in particular. The Supply-Demand gap for natural gas is becoming prominent in India. In the XI Plan, demand for natural gas in India is estimated to increase 36.07% lifting the mark from 179 million cubic meters per day in to 280 million cubic meters per day in the year Gujarat itself has huge demand potential. With its large industrial base, growing energy needs and proactive government approach, it has emerged as a Vibrant Hub for gas industry. As per CRISIL s report, natural gas demand in the State is expected to increase from 54.1 mmscmd in 2005 to 94.5 mmscmd by According to EIA International Energy Outlook Report 2009, Global Natural Gas consumption is estimated to 1.6% per annum from about 104 trillion cubic feet in 2006 to 153 trillion cubic feet by The Natural gas transmission industry is primarily being driven by the level of demand for natural gas and other fossil fuels in regions that lack energy resources and assets. Main factor that boosts the demand of Natural Gas is skyrocket rise in spot price of Oil from 2003 to 2008 hitting mark of $147 per barrel during mid July 2008 and its rebound trend from early Rising oil prices and pressure / incentives to shift to Natural Gas Also governments across the world encourage Industrial consumers, especially power industry and fertiliser industry players to make a move towards environment friendly fuels, such as Natural gas which is more efficient, cost effective and environment friendly over other fossil fuels Growth plans for Natural gas sector are being laid by Indian Government. Several gas pipelines are planned for development across the world in coming few years, including cross country pipelines like Iran-Pakistan- India Pipeline, Myanmar India Pipeline, Trans-Afghan Pipeline, Central Asia Gas Pipeline, Nabucco Gas Pipeline, etc. Supply mark of natural gas has taken a hike with the commencement of Reliance KG (D-6) basin natural gas production in March 2009, expansion of capacity of LNG terminals by Petronet LNG, and Hazira LNG being completed, opening doors of volume growth for transmission players. Moreover, focus on Power / fertiliser companies coming on stream in Gujarat would drive the growth for transmission players in the state. Thus with substantial demand estimated for natural gas, future of Gas Transmission Industry players, which play on volume metrics, is supposed to be bright. 5

6 Investment Rationale Major beneficiary from Gujarat s huge demand potential Gujarat is the largest gas consuming state in India. GSPL, the largest gas transmission player in Gujarat, stands to benefit from the increasing demand due to its pre-eminent pipeline connectivity and reach within Gujarat. GSPL EOI to PNGRB: As per CRISIL s report, natural gas demand in the State is expected to increase from 54.1 mmscmd in 2005 to more than 100 mmscmd by 2012 and ~ 146 mmscmd by Albeit expansion of the gas grid in state, expansion of capacities of existing projects, setting up of new Industries and development of CGD networks in Gujarat has resulted in increase in demand but overall trend of industrial players moving towards natural gas to satisfy their fuel and feedstock requirements has also played its part. High supply volumes giving growth opportunity to GSPL: GSPL being pure gas transmission is not subjected to any commodity price risk or marketing margins and revenue growth comes only from increasing transportation volume. Boost in re-gasification capacity at Dahej, Hazira and commissioning of the new R-LNG terminal at Dabhol are expected to provide an opportunity to GSPL to transmit additional R-LNG volumes going ahead. For instance increase in gas supplies from Reliance KG basin D6 and Petronet LNG gas transmission volumes are expected to reach 61.8% CAGR over FY09-FY11E. Impact of this increase will be reflected as growth from FY09-10 for GSPL. GSPL looking forward to grab new pipelines by bidding through SPVs Under Sec 35AD, capex incurred on pipelines under SPVs can be charged as deductible expense. This can give the tax benefits to the company, thereby increasing the cash inflows in the initial phases of the projects. GSPL is expected to bid for the new pipelines outside Gujarat through special purpose vehicles (SPV), which can enable it to get the tax benefits and can improve the bottom line. Operation & Maintenances Activities The Company has transported MMSCM (Previous year: MMSCM) of gas during the FY The Company will be benefited by transmission of additional volumes available on account of increase in supply of natural gas in the State 6

7 Price Economics of Naphtha: In the recent past, price of alternative feedstock like Naphtha had fallen sharply due to a weak demand outlook. These competitive Naphtha prices led to some customers (with dual-feedstock capabilities) opting for the alternative feedstock, and thus, the decline in GSPL s volumes of spot RLNG in Q3 FY09. Volumes declined to 13.1mmscmd, de-growth of 25.8% YoY. Naphtha getting less attractive is pushing the demand for natural gas further up Unlike impact in Q3FY09 price economics now started tilting towards gas again Naphtha prices have risen lately, rendering RLNG competitive enabling the volumes to pick up in Q4 FY09 with a visible improvement from Q1 FY10. Growing Demand of Natural gas in India Huge appetite for cleaner fuels in India Demand from CGD growing in multiples GSPL bids for Interstate Pipelines: Pipeline Distance (kms) Mehsana - Bhatinda 900 Bhatinda - Jammu & Srinagar 300 Mallavaram - Bhilwara - Vijaipur 1585 Surat - Paradip 1600 The macro outlook is favorable given India s huge appetite for cleaner fuels like natural gas, which should get a boost from new discoveries by RIL, ONGC, GSPC and others, going ahead. Apart from power and fertilizer sector, Growth plans of compressed gas distribution (CGD) sector in India boosts the growth of Gas transmission industry. CGD sector in India currently consumes 5-6% of the total available gas, or 5-6 mmscmd, but the consumption is expected to quadruple in a few years. Petroleum and Natural Gas Regulatory Board (PNGRB) is targeting CGD bidding in 200 cities by Cities covered in the first phase of CGD were Kakinada (Andhra Pradesh), Kota (Rajasthan), Sonipat (Haryana), Mathura and Meerut (Uttar Pradesh), and Dewas (Madhya Pradesh). As of now the CGD work in progress cities toll has crossed the number 77. The company recognized the mounting market potential beyond Gujarat. GSPL has filed EOI with regulator for four new Pipelines to grab more pipelines in its pocket. A decision is expected in January-February Company expects to win Mehsana Bhatinda pipeline, as the pipeline originates in Gujarat and GSPL will be maintaining and operating the feeder pipelines to the main trunk line. Thus stronger growth scenario outside Gujarat may appear for GSPL before end of FY10E. Benefits from Take or Pay Agreements: Limited downside risk from new tariff regulations GSPL typically goes for fixed tariff component (especially in high volume gas transmission agreements) based on pipeline distance and utilization, duration of contract, tariff offered by competing pipelines and the comparative cost of alternate fuels. This tariff is there on account of the reservation of the network capacity and typically covers 90% of the customer's tariff commitment. Balance 10% is commodity charges linked to the actual transportation of natural gas through the gas transmission network. This means that if the second party fails to meet the commitments for transmission, GSPL can claim capacity charge from it (generally 90%). 7

8 Favourable Gas Pipeline Policy for GSPL ROE (%) ROCE (%) FY08 FY09 FY10E FY11E FY12E Sole Operator Rights Recent Petroleum and Natural Gas Regulatory Board (PNGRB) Regulations have provided pipeline operators exclusivity (from the date of commencement of respective pipeline) for 25 years. GSPL is benefited from early mover's advantage in Gujarat and after undergoing process of authorisation will be the sole operator in its current areas of operation for the next around years as most of its assets are not too old. 12% post-tax RoCE With PNGRB allowing 12% post-tax RoCE on gas transportation pipelines. GSPL s tariffs jumped from around INR 0.7 per scm (FY09) to INR 0.9 per scm (Q1FY10) and INR 0.89 (Q2 FY10). GSPL ROE will increase on account of it being benefited from higher leveraging to fund its expansion plans. Source: Company, Unicon Investment Solutions Higher returns in Initial years of operation Act corresponding to Depreciation leads to Benefits: Schedule VI of The Companies Act, 1956 is in place for the calculation of capital employed. The same is applicable to GSPL. According to current figures stated GSPL currently depreciates its plant & machinery at a rate of 8.33%. This being high implies that GSPL would benefit from higher capital employed and earn higher returns in the initial years of operation. Benefit from Tariff Computation Policy: According to PNGRB Gas Pipeline Policy pipeline tariffs are computed on the basis of lower volumes in the initial four years of operations. The volumes for the first year shall be taken as 60% of the firmed-up contracted capacity, increasing 10% every year to reach 100% in the fifth year for computing the tariffs. This would benefit company in terms of higher returns in the initial years of operation. Benefit from Regulation Return Computation Policy According to PNGRB policy contracted volumes should be used for computing pipeline tariffs/regulated returns. Also, the additional returns from spot volumes will not be used for determination of regulated returns the spot volumes is considered in contracted volumes only after the initial tariff period of five years. This way there is possibility GSPL to generate more than 11% returns after two years. 8

9 Concerns Regulatory delays can slow the growth plans Revenue (INR Million) 20,000 15,000 10,000 5,000 - FY08 FY09 FY10E FY11E FY12E EBIDTA (INR Million) 16,000 92% 14,000 91% 12,000 90% 10,000 89% 8,000 6,000 88% 4,000 87% 2,000 86% 0 85% FY08 FY09 FY10E FY11E FY12E EBIDTA Margins Regulatory risk: Board appointed for the determination of transmission tariffs and authorisation of gas transportation pipelines is Petroleum and Natural Gas Regulatory Board (PNGRB). It also dictates technical operating parameters for gas transporting companies. GSPL s failure to abide by the dictations would lead to heavy fine and it would come under the scanner of the regulator. Competitive prices of substitute products: In the recent past, price of alternative feedstock like Naphtha had fallen sharply due to a weak demand outlook. These competitive Naphtha prices could have led to some customers (with dual-feedstock capabilities) opting for the alternative feedstock, and thus, the decline in GSPL s volumes of spot RLNG in Q3 FY09. Although price economics now started tilting towards gas again Naphtha prices have risen lately but any reduction in prices of Naphtha in future would impact the demand of Natural Gas adversely. Social contribution: In July 2008, Government of Gujarat directed all the profit making state PSUs to contribute 30% of pre-tax profit to newly formed Gujarat Socio- Economic Development Society (GSEDS) for welfare activities. In case of GSPL, on February 2, 2009, shareholders approved the contribution of INR 644 mn for FY09 to GSEDS. However, there have been no eligible projects this year to entail a meaningful contribution out of profits. Any hit on the bottom line this year is escaped but the risk of such contributions from the future earnings will still be there. Financial Analysis For H1FY10, GSPL generated net revenue of INR 4.7 bn, showing a growth of 95.56% on YoY basis, as a result of increasing gas transportation volumes. During the period under review, the operating profit jumped from INR 2.2 bn in H1FY09 to INR 4.5 bn in H1FY10. Net income jumped even higher INR 1.9 bn for H1FY10 from INR 610 mn in H1FY09, showing the effect of rise in volumes and better capacity utilisation. The transportation charges are not dependent on natural gas prices and company is expected to maintain the EBIDTA margins at ~ 91% going forward. FY12E FY11E FY10E FY09 FY08 EPS (INR) During FY09-12, gas transmission volumes are expected to increase from 15 mmscmd for FY09 to 54 mmscmd for FY12 at a CAGR of 53%. Over FY09-12, revenue is expected to grow at a CAGR of ~50%, operating profit is expected to grow at a CAGR of ~53% and Net Profit is expected to grow at a CAGR of 72%. Going forward we expect the company to continue to maintain the momentum seen over the last two quarters. We expect the company to achieve revenues of INR 15.8 bn and INR 16.6 bn in FY11 and FY12 respectively. The net margins of the company are expected to improve from 25.3% (INR 1.2 bn) in FY09 to 43% (INR 7.1 bn) by FY

10 One Year forward Earning P/E Graph Price 5x 10x 20x 30x 42x Peer Analysis Being a pure gas transmission player, GSPL is not comparable to other companies in natural gas transmission / distribution business. The closest peers to GSPL are Gujarat Gas Company Ltd (GGCL) and Indraprastha Gas Ltd (IGL) Feb-06 Feb-07 Feb-08 Feb-09 Source: Company, Unicon Investment Solutions GGCL is India s largest private sector player in the natural gas transmission and distribution segment and supplies gas to more than domestic, commercial, industrial customers and serve over compressed natural gas users. IGL is the sole supplier of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in the National Capital Region of Delhi and supplies CNG to automotive, PNG to domestic and commercial sectors. At current market price (CMP) of INR 94.2, GSPL is trading at 13.9x its annualised EPS (INR 6.8) of H1FY10, as compared to 17.1x for GGCL, and 12.4x for IGL. On P/BV basis, GSPL (4.4x) seems to be expensive as compared to its peers, GGCL (4.3x), GAIL (3.4x), IGL (3.8x) and RIL (2.9x). As compared to peers, GSPL has more visibility of future revenues as well as margins, due to mix of long term and short term gas supply agreements, make it worthy of higher valuations than its peers. Peer Group Comparison Company CMP Mkt. Cap EPS (INR) PE(x) P/BV(x) EV/EBIDTA(x) EV/Sales(x) Dividend Yield INR in Mn FY09 FY10E* FY09 FY10E* (%) GSPL GGCL GAIL IGL RIL *Annualised figures on stand alone basis Sensitivity Analysis Valuations & Outlook DCF Terminal Growth Rate Discount Rate for Equity 14% 15% 16% 17% 18% 2.0% % % % % With more pipelines (450 km) coming on-stream by the end of FY11 and demand for natural gas increasing rapidly in the Gujarat region, GSPL would experience exponential growth. The company would improve its Return on Equity to 36.6% in FY11 from the 8.8% in FY09. On an equity base of INR 12.2 billion, its EPS would jump from INR 2.2 for FY09 to INR 12.2 and INR 12.6 by FY11E and FY12E respectively. As per DCF* calculations, the intrinsic value of the stock works out to INR 105, implying an upside of ~ 11.5% from the current level. We have assumed a discount rate for equity of 16.2%, tax rate of 35% and terminal growth rate of 3%. Source: Unicon Investment Solutions At the current market price, the stock can be Accumulated for 12 months time horizon. * Refer Appendix 10

11 Company Financials and Ratios (INR in Mn) Income Statement FY08 FY09 FY10E FY11E FY12E Balance-sheet FY08 FY09 FY10E FY11E FY12E Net Sales Net Assets 15,371 17,686 23,407 28,207 30,073 Operating Expenses CWIP 5,888 6,446 4,500 4,500 4,500 EBITDA Investments EBITDA Margin (%) 87% 87% 89% 91% 91% C. Assets & Loans & Adv 5,497 5,615 5,522 9,370 11,316 Depreciation Inventories ,000 1, EBIT Sundry Debtors ,089 1,736 1,819 Interest Expenses Cash & Bank Balances 2, ,240 2,163 1,918 Other Income Loans and Advances 1,880 3,018 1,852 3,776 6,019 PBT Total assets 21,070 23,661 25,339 31,399 36,645 Tax Provision Shareholders' Fund 11,410 12,152 14,339 18,399 22,646 PAT Share Capital 5,620 5,621 5,621 5,621 5,621 Reserves 5,789 6,531 8,718 12,778 17,024 Minority Interest Total Debt 9,660 11,509 11,000 13,000 14,000 Current Liab. & Provisions 5,106 5,331 7,306 9,889 8,455 Current Liabilities 4,199 3,742 4,745 6,030 4,467 Provisions 907 1,590 2,561 3,860 3,988 Def. Tax Liabilities 1,002 1,144 1,144 1,144 1,144 Total Equities & Liabilities 21,070 23,661 25,339 31,399 36,645 Cash flow Statement FY08 FY09 FY10E FY11E FY12E Key Ratios FY08 FY09 FY10E FY11E FY12E PBT Profitability & Return (%) Add: Depreciation EBITDA (%) 87% 87% 89% 91% 91% Interest EBIT (%) 48% 52% 63% 71% 69% Less: Direct Taxes Paid Pre-tax (%) 36% 39% 57% 67% 67% Change in Working Capital PAT (%) 24% 25% 37% 43% 43% Other Miscellaneous Basic EPS CF from Operations Growth % 10% 22% 199% 86% 5% (Pur) / Sale of Fixed Assets RoE (Pur.) / Sale of Investments RoCE Other Miscellaneous CF from Investments Leverage (x) Change in Net worth Debt / Equity Change in Loan Fund Interest Coverage Less: Interest Paid Current Ratio Dividend Paid Other Miscellaneous Valuations (x) CF from Fin. activities EV/Sales Net Change in Cash EV/EBITDA P/E (Standalone) P/BV (Source: Company, Unicon Investment Solutions) 11

12 Appendix DCF Discounted cash flow (DCF) is a method of valuing a company using the concept of time value of money. All future cash flows are estimated and discounted to give their present values. The discount rate used is generally a weighted average cost of capital (WACC) that reflects the risk of the cash flows. Cash flows after the projected period are estimated using the Terminal value equation. This equation uses a geometric series to determine the value of a series of growing future cash flows into perpetuity. Unicon Investment Ranking Methodology Rating Buy Accumulate Hold Reduce Sell Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20% Disclaimer This document has been issued by Unicon Securities Private Limited ( UNICON ) for the information of its customers only. UNICON is governed by the Securities and Exchange Board of India. This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. The information and opinions contained herein have been compiled or arrived at based upon information obtained in good faith from public sources believed to be reliable. Such information has not been independently verified and no guarantee, representation or warranty, express or implied is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document has been produced independently of any company or companies mentioned herein, and forward looking statements; opinions and expectations contained herein are subject to change without notice. This document is for information purposes only and is provided on an as is basis. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer, or solicitation of an offer, to buy or sell or subscribe to any securities or other financial instruments. We are not soliciting any action based on this document. UNICON, its associate and group companies its directors or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this document, including but not restricted to, fluctuation in the prices of the shares and bonds, reduction in the dividend or income, etc. This document is not directed to or intended for display, downloading, printing, reproducing or for distribution to or use by any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or would subject UNICON or its associates or group companies to any registration or licensing requirement within such jurisdiction. If this document is inadvertently sent or has reached any individual in such country, the same may be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published for any purpose without prior written approval of UNICON. This document is for the general information and does not take into account the particular investment objectives, financial situation or needs of any individual customer, and it does not constitute a personalised recommendation of any particular security or investment strategy. Before acting on any advice or recommendation in this document, a customer should consider whether it is suitable given the customer s particular circumstances and, if necessary, seek professional advice. Certain transactions, including those involving futures, options, and high yield securities, give rise to substantial risk and are not suitable for all investors. UNICON, its associates or group companies do not represent or endorse the accuracy or reliability of any of the information or content of the document and reliance upon it is at your own risk. UNICON, its associates or group companies, expressly disclaims any and all warranties, express or implied, including without limitation warranties of merchantability and fitness for a particular purpose with respect to the document and any information in it. UNICON, its associates or group companies, shall not be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the document. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Unicon Securities Private Limited. 12