Economy News. Corporate News JUNE 9, 2016

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1 JUNE 9, 2016 Economy News The government plans to scrap four special purpose vehicles (SPVs) set up for ultra-mega power plants (UMPP) in Chhattisgarh, Karnataka, Maharashtra and Odisha due to lack of interest from the host states, a top government official said. (ET) Incentives that the government plans to offer to people scrapping their old polluting cars for new ones are unlikely to be given to those buying fuel guzzlers, a senior transport ministry official dealing with the matter said. (ET) 1% tax on car sales to only apply on retail transactions. 1% tax on cars valued over Rs10 lakh will not apply to sales by manufacturers to dealers and distributors, says income tax department (ET) Corporate News Bharti Infratel is in talks to acquire Tower Vision India, a company owned by a group of international financial investors. (ET) Lupin is recalling over 54,000 vials of anti-bacterial injection Ceftriaxone, which were manufactured at the company's Mandideep facility in Madhya Pradesh. (ET) Adani Enterprises is in the process of setting up a copper smelter project with a capacity of one mmtpa at an investment of Rs 100 bn at Adani Port Special Economic Zone (APSEZ) in Gujarat, says report. (ET) IOC and MRPL have made a second tranche payment using Germanybased EIH bank to help clear past oil dues to Iran, according to reports. (IE) HCL enhances its smart Vehicle Offerings With two Strategic Partnerships. (Hindu) Central Bank said it proposes to raise up to Rs.30 bn from the public, including the rights issue. (BS) Rajesh Exports has announced that it has bagged Rs bn worth export order. (ET) Sun Pharmaceutical Industries announced its entry into the dermatology segment with the launch of its sunscreen product Suncros, as it seeks to expand its over-the-counter business. (ET) Syndicate Bank is planning to raise up to Rs. 17 bn from public issue, including Qualified Institutional Placement or QIP. (BL) UK-based online fashion store Koovs said HT Media invested 3 mn (around Rs 290 mn) in the company for an 8.2 per cent stake. (ET) Infosys Ltd would provide its core banking solution Finacle to e- commerce platform Paytm for its payments bank business, the firm said. (BS) The US Consumer Product Safety Commission, a federal regulatory body, has pleaded to the US Department of Justice, seeking civil penalty against Dr Reddy's, charging that the drug maker had violated provisions related to child resistant packaging in at least five prescription drugs. (ET) Hindustan Unilever Ltd (HUL) is now splitting them into two divisions as it looks to grow these categories separately. The change in plan comes after India's largest consumer packaged goods company by sales started improving its position in categories such as coffee and ketchup in FY16. (Mint) Equity % Chg 8 Jun 16 1 Day 1 Mth 3 Mths Indian Indices SENSEX Index 27, NIFTY Index 8, BANKEX Index 20, SPBSITIP Index 11,576 (0.6) BSETCG INDEX 14, BSEOIL INDEX 9, CNXMcap Index 13, SPBSSIP Index 11, World Indices Dow Jones 18, Nasdaq 4, FTSE 6, NIKKEI 16, HANGSENG 21, Value traded (Rs cr) 8 Jun 16 % Chg - Day Cash BSE 2,381 (6.9) Cash NSE 16,621 (12.6) Derivatives 171,103 (29.1) Net inflows (Rs cr) 7 Jun 16 % Chg MTD YTD FII ,167 17,535 Mutual Fund (154) (24) (342) 9,089 FII open interest (Rs cr) 7 Jun 16 % Chg FII Index Futures 17,915 (0.3) FII Index Options 61, FII Stock Futures 52, FII Stock Options 4, Advances / Declines (BSE) 8 Jun 16 A B T Total % total Advances Declines Unchanged Commodity % Chg 8 Jun 16 1 Day 1 Mth 3 Mths Crude (US$/BBL) Gold (US$/OZ) 1, (0.3) 0.5 Silver (US$/OZ) Debt / forex market 8 Jun 16 1 Day 1 Mth 3 Mths 10 yr G-Sec yield % Re/US$ Sensex Source: ET = Economic Times, BS = Business Standard, FE = Financial Express, BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

2 COMPANY UPDATE Amit Agarwal Summary table (Rs mn) FY16 FY17E FY18E Sales 41,222 42,106 42,673 Growth (%) (2.6) EBITDA 11,388 11,567 11,238 EBITDA margin (%) PBT 5,631 5,694 5,293 Net profit 5,068 5,125 4,764 EPS (Rs) Growth (%) (7.0) CEPS (Rs) BV (Rs/share) Dividend / share (Rs) ROE (%) ROCE (%) Net cash (debt) (33,119) (31,669) (30,175) NW Capital (Days) EV/EBITDA (x) P/E (x) P/Cash Earnings P/BV (x) Source: Company, Kotak Securities - Private Client Research SHIPPING CORPORATION OF INDIA PRICE: RS.67 RECOMMENDATION: SELL TARGET PRICE: RS.66 FY18E P/E: 6.6X Weakness continues Dry bulk index at 610 (-30% YoY) and crude tanker index 750 points (-12% YoY) continue to remain at lower levels in a weak demand environment and huge supply of ships in the markets. This has impacted the topline and earnings of all the shipping companies including SCI. The weakness has also negatively influenced the asset prices and thereby the NAV of shipping companies. There are no signs of respite for the industry in near term as business environment and sentiments to continue to remain weak. We estimate that SCI won't remain immune to the above environment and report a drop in earnings over FY16 to FY18E. Also, we are not expecting many major corporate activity, a lower capex and zero dividend payment by SCI to conserve cash. We continue to value SCI at 0.6x of its NAV of Rs 110 and maintain SELL with an unchanged TP of Rs 66. Current shape of shipping markets BULK: The Baltic Dry Index (BDI) continue to trade at lower levels primarily due to slowdown in the Chinese economy, slowing global demand for raw materials including iron ore, coal, cement and steel mismatch of demand and supply of vessels with supply far exceeding the demand. Infact, freight rates in the bulk sector are currently so low that it fails to cover even the operating cost of running a vessel. (Without taking into account possible financing). This is the only reason why many bulk companies were thrown out of business globally, while Indian companies like Mercator Limited (dedicated to bulk segment) has continued to report huge losses TANKER: On the other hand, with lower crude oil prices, net importing countries like China and India are importing more oil keeping the tanker segment more active compared to bulk segment. To conclude, bulk segment is weak and tanker/product segment continue to hold. Baltic Dry Index Baltic dirty tanker index 1,400 1,200 1, Jun-15 Aug-15 Oct-15 Jan-16 Mar-16 May-16 Source: Bloomberg 1,150 1, Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Source: Bloomberg Kotak Securities Limited has two independent equity research groups: Institutional Equities and Private Client Group. This report has been prepared by the Private Client Group. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating, target price of the Institutional Equities Research Group of Kotak Securities Limited. Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 2

3 Fresh ordering has been slow Shipping companies are placing orders under 2 circumstances; 1) If they get a committed long term business for the asset or 2) they believe that the asset is highly undervalued. The above two circumstances is translating into slow pace of fresh ordering and some business for shipbuilding companies. The slow business for new ships is also forcing yards to compete even harder and reduce new building prices even lower. Current global shipping orders Jun-15 Jun-16 Segment Tonnage Order book % Current Tonnage Order book (mn dwt) (mn dwt) (mn dwt) (mn dwt) % Bulk Tanker Product Container Source: Bloomberg While Latest data from Bloomberg (the above table) indicate that that fresh ordering continues to be slow (except crude) leading to improvement in order book to current fleet ratio. But despite subdued fresh ordering (fewer new supplies) is not getting translated into any significant improvement in freight rates primarily because of 2 reasons: 1) Weak global demand esp. from China and 2) Excess supply of ships over demand in the current market. Even SCI has a minimal capex plan over FY16 to FY18E With slow shipping markets, even Shipping Corporation of India (SCI) is going slow on ordering new vessels amid the continuing slump in business, and has earmarked only ~Rs 5 bn for planned capex over FY16 to FY18E (against historical high capex of Rs 10 bn per annum).we believe this is a prudent measure and would help SCI have a leaner BS and save on interest cost and cost associated with running the ship at sub optimal freights. Debt schedule of SCI - company moving towards a leaner Balance Sheet (Rs mn) FY12 FY13 FY14 FY15 FY16 FY17E FY18E Gross Debt 55,258 72,796 71,588 59,240 45,981 47,856 49,731 Networth 67,343 66,071 63,398 65,336 69,104 74,229 78,992 Cash 14,424 12,648 10,189 12,561 12,862 16,187 19,556 Net Debt/equity (x) CAPEX 25,000 11,000 9, ,000 2,500 2,500 Source: Company, Kotak Securities - Private Client Research Assets prices continue to move down - impacting the NAV Low demand for ships, has impacted the freight market as well as the prices of ships in the secondary markets. We had a close look at the recent deals in sales/purchase of assets in the shipping sector. We observed that the prices of all assets in the last 36 months are on a down trend though at a declining rate. The downward movement in asset prices has also impacted the NAV of shipping companies. Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 3

4 Asset prices across categories (for 5 year old assets in USD mn) Segment Jun-16 Jun-15 Jun-14 Jun-13 Jun-12 Aframax Suezmax VLCC Handy Size Supramax Panamax Capesize Source: Bloomberg Low crude prices is positive for shipping industry and for SCI With fall in crude prices, the bunker prices have come down significantly. The fall was more significant in the last 18 months which is helping the margins of shipping companies including SCI We estimate, bunker to remain at lower levels in FY17/FY18 with crude averaging $55/barrel. The lower crude level would translate into lower bunk prices which would impact the operational margins of SCI. However, higher supply of ships compared to demand of ships would continue to put pressure on freight rates, ultimately leading to decline in earnings for SCI over FY16 to FY18. Fuel cost for SCI and bunker prices are inversely related (Rs mn) FY12 FY13 FY14 FY15 FY16 Current Sales 38,208 41,525 43,260 42,301 41,122 Fuel cost 15,543 15,816 14,778 11,843 6,375 % of Sales Avg bunker ($/tonne) Source: Company, Bloomberg Current fleet of SCI (as on June 2016) Segment No DWT Crude Oil 16 2,017,192 Product ,059 Gas 2 35,202 VLCC 5 1,591,175 Bulk Carriers 17 1,113,889 Liners 5 202,413 Offshore Supply 9 23,671 Passenger-cum-Cargo 1 5,140 Total 69 5,896,741 Source: Company Near term performance of SCI to remain weak Performance of any shipping company is a function of freight rates, placement of ships (mix of spot and contracted revenues) and bunker prices. For SCI, Freight rates remain weak - except the tanker segment (negative for SCI) Company has more ships in the spot market ( negative for SCI) Bunker prices remain at lower levels (positive for SCI) Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 4

5 SCI provided for impairment in Q4FY16 SCI made a total provision of Rs 1.36 bn towards impairment which is equal to the permanent loss in value of assets owned by the company. The company believed that the loss in value was permanent and hence it was important for the company to make provision for the same. This impacted the earnings of SCI in Q4FY16 with the company reporting net loss of Rs 72 mn. It is also important to note that with the current shape of shipping markets, market value of many shipping assets would have gone below the book value and hence, we would not be surprised to see further impairment over FY16 to FY18E. Infact, we believe that SCI has been more conservative in doing impairment test relative to GE shipping company (GESCO) in a market where asset prices continue to decline. Impairment provided by key shipping companies in a falling asset prices market (Rs mn) FY14 FY15 FY16 SCI 0 0 1,364 GESCO ,617 Source: Companies News update - would lead to increase in employee expense Around 200 sea fearers (from a total of 2500 sea fearers) on the permanent rolls of SCI have returned to work after a weeklong strike, after SCI promised 30% hike in the salaries for them. This strike had impacted the operations of 16 vessels out of a total of 69 vessels for SCI for about 10 days. We estimate this to have a marginal negative impact (3% revenue loss) for Q1FY17 for SCI. We also estimate this hike to be across board and increase the employee expense for SCI by 30% from Rs 4.6 bn (FY16 employee expense) to around Rs 6 bn for FY17 impacting EBIDTA and earnings negatively. The hike of 30% would be more than the average hike of 10% given by SCI YoY. So net negative impact would be of Rs 0.9 bn (Rs 6 bn - Rs 5.1 bn of regular hike) We maintain SELL on Shipping Corporation of India with a price target of Rs.66 Valuation and recommendation: Quarterly performance of SCI has been disappointing due to multiple reasons including poor demand esp. from china, over supply of ships and inappropriate strategy adopted by the company to counter the current slowdown, and we estimate the current trend to extend over FY16 to FY18E for SCI. We are not expecting any major corporate announcement for the company in near terms with risk of further impairment loss. We estimate business environment and sentiments to continue to remain weak with subdued financial performance by SCI. In terms of numbers, we are expecting SCI to report a negative CAGR of 4% in earnings at Rs 4.76 bn in FY18E (EPS of 10.2). Historically, SCI has traded in a range of 0.5 to 1.0x of its NAV. To factor in the weakness in the shipping markets, we continue to value SCI at 0.6x of its NAV of Rs 110 and maintain SELL with an unchanged TP of Rs 66. Upside risk Recovery in trade Lower or no Impairment Lower than estimated supply of ships Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 5

6 SECTOR UPDATE Teena Virmani CONSTRUCTION SECTOR REVIEW POST Q4FY16 Performance of the companies under our coverage was led by healthy revenue growth and margin improvement. Debt reduction and lower interest rates have resulted in sharp jump in profitability for few companies. Government has been increasing its focus towards EPC and hybrid annuity projects and players are confident of bagging upcoming projects in these two segments going forward. Among other segments, companies are extremely confident of bagging upcoming opportunities in irrigation, water supply and infrastructure development in AP/Telangana/UP. Over medium to long term, improvement in macro-economic environment, decline in interest rates, reduction in borrowings and improvement in payment cycle are likely to be positive for the sector Thus, we would prefer players having good balance sheet strength, ability to tap upcoming opportunities in the order inflows as well as attractive valuations. Top picks would be IRB Infra (Rs 215; TP Rs 297), NCC Ltd (Rs 75; TP Rs 95) and PNC Infratech (CMP: Rs 570; TP: Rs 671). Key highlights about the sector Upcoming opportunities in the sector Government has taken a lot of initiatives in recent past to ease the award process and improve attractiveness of the project. In terms of easing the land acquisition process particularly for PPP projects, NHAI will not award any project unless 80% of the land for BOT and 90% of the land for EPC is acquired. NHAI along with MoRTH plans to award km of projects in FY17. For initial km, NHAI has already acquired 60% of the land. Length Awarded (in Km) Source: NHAI During FY16, NHAI awarded 72 projects through a mix of EPC/BOT/Hybrid Annuity Model (HAM) with 55 EPC projects covering a length of 2560 km, 7 BOT projects with length of 873 km and 10 HAM projects with length of 377 km. Going forward, over 80% of the road projects are proposed to be awarded under EPC and Hybrid Annuity Model routes. These projects are also expected to be concentrated towards states like UP, Bihar, MP, West Bengal, Maharashtra. Thus, companies like NCC, KNR, MEP etc which have shied away from the asset heavy road BOT/annuity projects have also now turned optimistic on bagging HAM projects during FY17. Kotak Securities Limited has two independent equity research groups: Institutional Equities and Private Client Group. This report has been prepared by the Private Client Group. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating, target price of the Institutional Equities Research Group of Kotak Securities Limited. Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 6

7 Among other segments, companies are extremely confident of bagging upcoming opportunities in irrigation, water supply and infrastructure development in AP/Telangana/UP. Q4FY16 performance review Performance of the companies during Q4FY16 was better than our expectations in terms of improved execution and strong margins. Order inflow was not very strong during the quarter but companies are confident of sharp jump in order inflows for FY17 led mainly by hybrid annuity road projects, irrigation and water supply projects from AP/Telangana and other infrastructure projects from UP/ West Bengal and Tamil Nadu. Urban infra, industrial and power segment are also likely to see increased traction going forward. Companies like NCC/KNR/PNC Infratech witnessed healthy execution while Simplex Infra is still cautious on the payment cycle and correspondingly its execution has slowed down to keep pace with the payment cycle. Execution improvement was witnessed in both IRB and ILFS Transportation networks led by ramp up in its under-construction projects. Operating margins remained a mixed bag depending upon project execution mix but most of the EPC players were able to improve margins on yearly basis. Going ahead, for upcoming projects from AP/Telangana, companies are expecting better margins as these projects would not have large customer advances. We expect companies to benefit from reduction in the interest rates coupled with reduced borrowings from FY17 onwards. Measures are already in place for debt reduction for most of the companies including asset sales, securitization, land monetization etc Fund raising through stake sale/invit and claim settlements from NHAI are likely to be positive for the sector Land monetization/stake sale in BOT projects/identification of assets for InVIT listing are being utilized by players to unlock value from assets for further equity investments and debt reduction. NCC had been able to finalize sale of two of its road BOT projects and one power project during the quarter while land monetization is expected in coming quarters. IL&FS transportation network sold stake in one of its road project during Q1FY17 and is also looking to securitise its annuity assets along with InVIT listing going forward. KNR construction is also looking to sell stake in one of its road BOT project while IRB Infra is also looking for value unlocking through InVIT listing. Post clearances from SEBI, company is expected to file for InVIT listing which we believe is expected to materialize during Q3FY17/Q4FY17. Players like MEP Infra, GMR infra have also taken board approval for raising funds through InVIT. Claims settlement with NHAI in near to medium term is likely to be positive for players like HCC, ILFS Transportation network, NCC, MEP infra etc for projects where cost escalation or lower than expected toll collection was being witnessed. Along with this, improvement in working capital cycle led by higher customer advances (on account of order inflow revival) and reduction in loans and advances (on account of stake sale in projects) is expected to be positive for the sector. Maintain positive outlook for the sector In the near term, increased ordering activity from NHAI/MoRTH, claim settlements as well as measures to complete projects on a fast track are likely to be positive for the companies. Over medium to long term, sector is likely to benefit from improvement in macro-economic environment leading to higher order inflows especially from private segment. Along with this, with debt reduction, lower interest rates and improvement in payment cycle, companies will be able to improve net profit margins in near to medium term. Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 7

8 Thus, we would prefer players having good balance sheet strength, ability to tap upcoming opportunities in the order inflows as well as attractive valuations. Following companies would remain in focus going forward - Road BOT projects - Likely beneficiary IRB Infrastructure and IL&FS Transportation networks Road EPC projects - Likely beneficiary NCC, Simplex Infrastructure, KNR Constructions, PNC Infratech Hybrid annuity projects - Likely beneficiary NCC, KNR Constructions, PNC Infratech Deleveraging via stake sale- Likely beneficiary NCC, IL&FS Transportation networks Order inflow revival across sectors - Likely beneficiary NCC, Simplex Infrastructure InVIT listing - IRB, ILFS Transportation networks We continue to maintain our positive bias for IRB Infra (Rs 215; TP Rs 297), NCC Ltd (Rs 75; TP Rs 95) and PNC Infratech (CMP: Rs 570; TP: Rs 671) as we believe that these companies are ideally positioned to benefit from revival in road BOT/ EPC and hybrid annuity projects. Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 8

9 Bulk deals Trade details of bulk deals Date Scrip name Name of client Buy/ Quantity Avg. Sell of shares price (Rs) 08-Jun AFEL Nishil Surendrabhai Marfatia S 31, Jun AMRAAGRI Yashwant Amratlal Thakkar B 4,725, Jun AMRAAGRI Akshar Entertainment Pvt Ltd S 4,725, Jun CATVISION Ashok Kumar Agrawal S 29, Jun CATVISION Camel Foods Pvt. Ltd., B 27, Jun FRASER Slesha Pradeep Ghosh S 29, Jun FRASER Slesha Pradeep Ghosh B 29, Jun GOKUL Ridhikripa Trading Pvt Ltd B 1,000, Jun INFODRIVE Bridge India Fund S 3,400, Jun KUBERJI Vaibhav Babanrao Badavate B 19, Jun MALWACOTT Ifci Ltd. S 46, Jun NFIL Ashishbhai Jitendrabhai Joshi B 105, Jun NFIL Sajjan Devi Anjana S 80, Jun RCCL Aum Capital Market Private Limited B 20, Source: BSE Gainers & Losers Nifty Gainers & Losers Price (Rs) chg (%) Index points Volume (mn) Gainers Tata Power NA 4.1 HCL Tech NA 1.9 Power Grid Corp NA 2.1 Losers Kotak Mahindra Bank 759 (1.6) NA 1.2 Infosys Ltd 1,238 (1.5) NA 4.4 Zee Entertainment 456 (1.5) NA 0.7 Source: Bloomberg Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 9

10 RATING SCALE Definitions of ratings BUY We expect the stock to deliver more than 12% returns over the next 9 months ACCUMULATE We expect the stock to deliver 5% - 12% returns over the next 9 months REDUCE We expect the stock to deliver 0% - 5% returns over the next 9 months SELL We expect the stock to deliver negative returns over the next 9 months NR Not Rated. Kotak Securities is not assigning any rating or price target to the stock. The report has been prepared for information purposes only. RS Rating Suspended. Kotak Securities has suspended the investment rating and price target for this stock, either because there is not a sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. NA Not Available or Not Applicable. The information is not available for display or is not applicable NM Not Meaningful. The information is not meaningful and is therefore excluded. NOTE Our target prices are with a 9-month perspective. Returns stated in the rating scale are our internal benchmark. Fundamental Research Team Dipen Shah Information Technology dipen.shah@kotak.com Sanjeev Zarbade Capital Goods, Engineering sanjeev.zarbade@kotak.com Teena Virmani Construction, Cement teena.virmani@kotak.com Saday Sinha Banking, NBFC, Economy saday.sinha@kotak.com Arun Agarwal Auto & Auto Ancillary arun.agarwal@kotak.com Ruchir Khare Capital Goods, Engineering ruchir.khare@kotak.com Ritwik Rai FMCG, Media ritwik.rai@kotak.com Sumit Pokharna Oil and Gas sumit.pokharna@kotak.com Amit Agarwal Logistics, Transportation agarwal.amit@kotak.com Meeta Shetty, CFA Pharmaceuticals meeta.shetty@kotak.com Jatin Damania Metals & Mining jatin.damania@kotak.com Pankaj Kumar Midcap pankajr.kumar@kotak.com Nipun Gupta Information Technology nipun.gupta@kotak.com Jayesh Kumar Economy kumar.jayesh@kotak.com K. Kathirvelu Production k.kathirvelu@kotak.com Technical Research Team Shrikant Chouhan shrikant.chouhan@kotak.com Amol Athawale amol.athawale@kotak.com Derivatives Research Team Sahaj Agrawal sahaj.agrawal@kotak.com Rahul Sharma sharma.rahul@kotak.com Malay Gandhi malay.gandhi@kotak.com Prashanth Lalu prashanth.lalu@kotak.com Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 10

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"A graph of daily closing prices of securities is available at and (Choose a company from the list on the browser and select the "three years" icon in the price chart)." Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai CIN: U99999MH1994PLC134051, Telephone No.: , Fax No.: Website: Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai Telephone No: SEBI Registration No: NSE INB/INF/INE , BSE INB /INF , MSEI INE /INB /INF , AMFI ARN 0164, PMS INP and Research Analyst INH NSDL/CDSL: IN- DP-NSDL Our research should not be considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and the like and take professional advice before investing. 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In case you require any clarification or have any concern, kindly write to us at below ids: Level 1: For Trading related queries, contact our customer service at 'service.securities@kotak.com' and for demat account related queries contact us at ks.demat@kotak.com or call us on: Online Customers (by using your city STD code as a prefix) or Toll free numbers / , Offline Customers Level 2: If you do not receive a satisfactory response at Level 1 within 3 working days, you may write to us at ks.escalation@kotak.com or call us on and if you feel you are still unheard, write to our customer service HOD at ks.servicehead@kotak.com or call us on Level 3: If you still have not received a satisfactory response at Level 2 within 3 working days, you may contact our Compliance Officer (Name: Manoj Agarwal ) at ks.compliance@kotak.com or call on 91- (022) Level 4: If you have not received a satisfactory response at Level 3 within 7 working days, you may also approach CEO (Mr. Kamlesh Rao) at ceo.ks@kotak.com or call on 91- (022) Kotak Securities - Private Client Research Please see the disclaimer on the last page For Private Circulation 11