Colgate-Palmolive India (COLPAL) 971

Transcription

1 Result Update Rating matrix Rating : Hold Target : 971 Target Period : 12 months Potential Upside : % What s changed? Target Changed from 94 to 971 EPS FY17E Changed from 23.5 to 22.1 EPS FY18E Changed from 26.9 to 27. Rating Changed from Buy to Hold Quarterly performance Q1FY17 Q1FY16 YoY (%) Q4FY16 QoQ (%) Sales EBITDA EBITDA (%) bps bps PAT Key financials Crore FY FY16 FY17E FY18E Net Sales 3, , ,75.3 5,29. EBITDA ,169.8 PAT EPS ( ) Valuation summary FY FY16 FY17E FY18E P/E Target P/E Div. Yield Mcap/Sales RoNW (%) RoCE (%) Stock data Particular Amount Market Capitalization ( Crore) 26,41.7 Total Debt (FY16) ( Crore). Cash and Investments (FY16) ( Crore) EV ( Crore) 26, week H/L 133 / 788 Equity capital 27.2 crore Face value 1 Price performance 1M 3M 6M 12M Colgate Dabur HUL Gillette Research Analyst Sanjay Manyal sanjay.manyal@icicisecurities.com Parth Joshi parth.joshi@icicisecurities.com High ad-ex trims margins August 9, 216 Colgate-Palmolive India (COLPAL) 971 Colgate-Palmolive (CPIL) posted healthy topline growth led by strong 6% volume growth. Domestic volume growth was at 5% in the quarter. Net sales grew 12.5% to crore (I-direct estimate: crore) EBITDA margins contracted 6 bps to 18.4% (I-direct estimate: 2.9%) largely due to a steep increase in advertisement spend by 126 bps as percentage of sales. This was on the back of already high spend in base quarter. Savings due to benign RM cost (down 24 bps as percentage of sales) and lower overheads (down 44 bps as percentage of sales) provided some support to margins Earnings increased 8.4% YoY to crore (I-direct estimate: 14.9 crore) mainly due to higher tax rate and lower EBITDA. Tax rate increased sharply from 25.3% to 33.7% owing to phasing out of fiscal benefits in Himachal Pradesh Continues to be market leader despite category disruption in toothpaste CPIL is the largest player in oral care in India with a market share (June 216) of 55.9% in toothpaste and 46.8% in toothbrush category. Despite Procter & Gamble s (P&G) re-entry into the toothpaste segment in India in June, 213 (brand: Oral B), CPIL s market share only strengthened. CPIL has increased its volume market share in toothpaste from 55% in June 212 to 55.9% in June 216. Similarly, the market share in toothbrush has also increased from 39% to 46.8% for the same period. FMCG player Patanjali s entry has disrupted the toothpaste category, denting CPIL s market share by ~13 bps from 57.2% in 2. We believe HUL, the second largest player in the toothpaste segment, has been more adversely affected than CPIL with market share loss of ~3 bps between 213 & 2. However, CPIL has an edge over its indigenous rival in the form a strong brand equity forged upon 8 years of presence in the Indian market along with a vast distribution network covering over 5 lakh outlets. We believe CPIL s renewed focus on the naturals segment under toothpaste (Colgate Sensitive Clove, Cibaca Vedshakti launched in Q1FY17), alongside its presence in traditional segments (family, whitening, freshness, gum care, sensitive), would aid the company in fending off disruptive competition, given CPIL s historical expertise in launching innovative product offerings in the market. Innovation at forefront Over the years, Colgate has built an extensive oral care portfolio through constant innovation, thereby offering products across value pyramid & within each sub-category (sensitive, gum care, electric brush, kids brush). Lately, it has been aggressive on extension of its premium portfolio to capture uptrading consumers. In FY16, it launched Pain Out for express toothache relief, Palmolive hand wash as well as toothpastes (Total Charcoal Deep Clean, Active Salt Neem) & 36 range of toothbrushes (Charcoal Gold, Whole Mouth Clean, Visible White, Floss-Tip). Hence, with constant innovation & higher A&P spends, we believe Colgate would continue to remain the dominant player. It would be the largest beneficiary of increasing penetration levels in India (currently at ~8%). High advertisement spend to keep a check on margins We estimate sales and PAT CAGR of 13.1% and 12.8%, respectively, in FY16-18E. We believe most major positives have been discounted for in the stock price that is currently trading at 36x its FY18E EPS of 27.. We ascribe a target price of 971/share with a HOLD recommendation. ICICI Securities Ltd Retail Equity Research

2 Variance analysis Q1FY17 Q1FY17E Q1FY16 YoY (%) Q4FY16 QoQ (%) Comments Net Sales 1, ,87.7 1, , Net sales increased 12.5% mainly led by 6% volume growth driven by higher A&P spend. Excise duty increased 294 bps to sales due to expiry of tax holiday in its Baddi Plant in Himachal Pradesh Operating Income Raw Material Expenses Raw material cost to sales declined 24 bps benefiting from benign commodity prices Employee Expenses Employee cost to sales increased 18 bps SG&A Expenses Advertisement expenses increased 126 bps to 13.6%. Given changes in accounting from IGAAP to Ind AS, promotion expense is being netted off from gross sales Other operating Expenses Overheads decreased by 44 bps as percentage of sales EBITDA EBITDA Margin (%) bps bps Operating margins contracted 6 bps largely due to higher A&P Depreciation Interest... NA. NA Other Income PBT before exceptional Exceptional Items NA. NA Tax Outgo Income tax rate increased from 25.3% to 33.7% owing to phasing out of tax benefits in Baddi PAT PAT increased by moderate 8.4% despite low base quarter mainly due to lower EBITDA & higher tax rate Key Metrics YoY growth (%) Volume Growth overall 6. NA NA NA 6. bps Volume Growth (Toothpastes) NA NA 4. NA We believe higher promotinal spend aided domestic volume growth Volume Mkt Share (Toothpaste) 55.7 NA bps 55.7 bps Volume Mkt Share (Toothbrush) 46.2 NA bps 46.2 bps Change in estimates FY17E FY18E ( Crore) Old New % Change Old New % Change Comments Sales 4, , No significant changes in estimates EBITDA 1, EBITDA Margin (%) bps bps We further increased our advertisement expenses impacting operating margins in FY17E PAT EPS ( ) Assumptions Current Earlier Comments FY14 FY FY16E FY17E FY18E FY16E FY17E FY18E Toothpaste Vol. Growth(%) Toothpaste Value Growth(%) Toothbrush Vol. Growth(%) Toothbrush Value Growth(%) Raw Material/Sales % Marketing Exp./Sales % We expect A&P spend to remain at elevated levels due to competitive pressure ICICI Securities Ltd Retail Equity Research Page 2

3 Company Analysis Sustained market share to keep revenue growth at 13.1% CAGR CPIL has successfully maintained its market leadership in the oral care segment with 57.2% share by volume (2), YoY increase of 4 bps, in the toothpaste category and 44.5% volume share (2), YoY increase of 17 bps, in the toothbrush category. The nearest competitors in the toothpaste and toothbrush categories are at less than half the share of CPIL with 19.8% (2) and 17.8% (2) share by volume, respectively. With the ability to maintain the premium in its market share and comprehensive oral care portfolio, CPIL registered strong revenue growth of.1% CAGR (FY8-). However, due to expiry of fiscal benefits at its Baddi facility, CPIL witnessed tepid sales growth of 4.5% YoY in FY16. Going ahead, we believe that led by CPIL s strong brand equity it would continue to maintain its dominance in the segment and further boost its revenue growth through increasing presence in rural India. Hence, we expect revenue CAGR of 13.1% in FY16-18E led by a mix of volume & realisation growth. Exhibit 1: Revenue trend ( crore) FY9 FY1 FY11 FY12 FY13 FY14 FY FY16 FY17E FY18E Revenues in crore (LHS) Revenue Growth (YoY) in % (RHS) Exhibit 2: CPIL market share only strengthens over the years CY12 Mar,'13 Jun,'13 Sep,'13 CY April,'14 June,'14 Sep'14 Dec'14 Mar' Jun' Sep' FY2 Mar'16 Jun'16 Toothpastes - LHS Toothbrush - RHS ICICI Securities Ltd Retail Equity Research Page 3

4 Exhibit 3: Toothpaste revenue to grow at 12% CAGR Dominance in oral care continues with sustained market leadership Led by the dominance of CPIL in toothpastes with a presence across premium, popular and mass categories and having SKUs across variants (regular, sensitive, herbal, whitening, gum care, freshness), CPIL s market share in toothpaste has strengthened from 48.8% in CY7 to 57.2% in CY. Aided by the strengthening market share, toothpaste revenues (~75% of CPIL s revenues) and increasing penetration revenues from the segment have grown at a CAGR of.5% in FY8-. Going ahead, we believe that with toothpaste per capita consumption expected to grow at 6.5% CAGR in FY14-23E to ~24 gm by FY23E and Colgate s ability to maintain its market leadership through increasing innovation (Total Charcoal Deep Clean, Colgate Active Salt Neem toothpaste launched in FY16) and distribution, CPIL s toothpaste volume CAGR would remain at ~6% in FY16-18E. Further, with new launches both in the premium and economy segments maintaining their pace, we expect CPIL to post segment revenue growth of 12% CAGR in FY16-18E. Exhibit 4: Volume growth to remain at ~6% FY9 FY1 FY11 FY12 FY13 FY14 FYE FY16E FY17E FY18E FY1 FY11 FY12 FY13 FY14E FYE FY16E FY17E FY18E Volume Growth Value Growth Exhibit 5: Toothbrush revenue growth to remain strong at 17.4% CAGR Strengthening presence in toothbrush to sustain growth at 17.4% CAGR (FY16-18E) CPIL s undeterred market share at 44.5% (CY) in the toothbrush segment (~11% of revenues) has been led by strong volume CAGR (FY8-) of 2.4% with segmental revenues growing at 21.1% CAGR (FY8-). The company s brand strength has enabled it to grab market share of unbranded players. Further, CPIL s nearest competitor, P&G, with brand Oral-B, continues to maintain a distant No.2 position in the segment with.7% volume share in the segment. We believe that with the upgrading consumer needs in rural markets and uptrading demand by urban consumer, CPIL s revenues from the toothbrush segment would continue to grow at 17.4% CAGR (FY16-18E) led by healthy volume CAGR of ~14.5%. We expect CPIL s strong brand equity to aid in further strengthening the market share for the company in the toothbrush segment. Exhibit 6: led by volume CAGR of ~14.5% FY9 FY1 FY11 FY12 FY13 FY14 FYE FY16E FY17E FY18E FY9 FY1 FY11 FY12 FY13 FY14E FYE FY16E FY17E FY18E Volume Growth Value Growth ICICI Securities Ltd Retail Equity Research Page 4

5 Increasing penetration, per capita consumption to aid growth The penetration of toothpaste in India is ~8%, with ~25 crore of the population still using conventional methods of brushing. Though urban penetration is higher at 92.3% (214), rural penetration lags behind at 74.1% (214). The rural population accounts for ~35% toothpaste revenues for CPIL. It has been constantly increasing reach in rural areas by various initiatives like Rural vans (131 Colgate Rural vans in 2 vs. 951 in 214 and 34 in 212). Hence, we believe there is a huge untapped opportunity for CPIL to increase its reach and volumes being the market leader of the segment. Further, the overall per capita consumption of toothpaste in India is significantly lower at 179 gm (March 216) compared to other developing nations, China at 237 gm, Philippines at 352 gm and Brazil at 692 gm, providing enough room for CPIL to maintain its volume growth. We believe increase in volume growth & per capita consumption would come through increasing awareness on oral hygiene, change in consumer habits (brushing twice daily) and increasing penetration, aiding the company to maintain volume and value growth. Margins likely to remain under check EBITDA margins have improved significantly from.4% in FY8 to 2.6% in FY led by gross margin expansion and increasing contribution of premium products in revenues. Led by the company s strong brand equity, CPIL enjoys strong pricing power in the oral care industry enabling it to easily pass on higher raw material cost through increasing prices without impacting its volume growth and concurrently expanding its gross margins. Hence, higher gross margins have enabled the company to expand its EBITDA margins. Since Q1FY14, however, CPIL s margins witnessed moderation following the increased competitive action in the oral care industry and slowing urban consumption demand (moderating the rate of premiumisation in the segment). The increased competitive activity (HUL s aggressiveness and P&G s re-entry) pulled up the marketing & other expenditure (includes sales promotion expenses) of CPIL, thereby moderating its margins to 18.6% in FY14. With declining raw material costs and judicious A&P spend by CPIL, operating margins came in at 22.4% in FY16. However, we believe that though consumption demand would revive along with improving sales mix for CPIL (driving premiumisation), marketing spend is expected to remain at elevated levels, courtesy new launches and intense rivalry. EBITDA margins are likely to be capped at 22% by FY18E. Exhibit 7: EBITDA margin trend (%) FY9 FY1 FY11 FY12 FY13 FY14 FY FY16 FY17E FY18E EBITDA ( crore) - LHS EBITDA Margin (%) - RHS ICICI Securities Ltd Retail Equity Research Page 5

6 Exhibit 8: Marketing expenses expected to remain high FY9 FY1 FY11 FY12 FY13 FY14 FY FY16 FY17E FY18E Marketing Expenses to Sales % Other Expenditure to sales % Exhibit 9: RM cost to sales ratio to remain low at ~37% until FY18E FY FY1 FY11 FY FY FY FY Raw Material Expenses to Sales % FY16 FY17E 36.9 FY18E Brand strength to aid in fighting competition CPIL s brand strength has aided in keeping competition away and maintaining its strong dominance in toothpaste and toothbrush. However, since H1FY14 (re-entry of P&G & expanding portfolio by Dabur, GSK Consumer, HUL), competition has been getting aggressive targeting huge untapped opportunity of segment. CPIL increased A&P expense by~3% YoY pressurising margins (declined from 21% in FY13 to 18% in FY14). Though margins have been stressed, CPIL s market share has further strengthened led by CPIL s high brand equity aiding in keeping competition at bay. CPIL reduced its A&P spend in FY while still gaining market share. FMCG player Patanjali s entry has disrupted the toothpaste category, denting CPIL s market share by ~13 bps from 57.2% in 2. We believe that HUL, the second largest player in the toothpaste segment, has been more adversely affected than CPIL with market share loss of ~3 bps between 213 & 2. However, CPIL has an edge over its indigenous rival in the form a strong brand equity forged upon 8 years of presence in the Indian market along with a vast distribution network covering over 5 million outlets. We believe CPIL s renewed focus on the naturals segment under toothpaste (Colgate Sensitive Clove, Cibaca Vedshakti launched in Q1FY17), alongside its presence on the traditional segments (family, whitening, freshness, gum care, sensitive), would aid the company in fending off disruptive competition, given CPIL s historical expertise in launching innovative product offerings in the market. Higher taxes to limit PAT growth We believe that PAT growth is likely to moderate to 12.8% CAGR (FY16-18E) against 16.5% CAGR (FY8-13). The moderation in earnings growth would be led by higher tax incidence on CPIL s Baddi plant (Himachal Pradesh). CPIL s Baddi plant was under 1% tax exemption until March, 21 and enjoyed ~3% tax exemption until April 2, after which it enjoyed no further exemptions. We estimate the effective tax rate for CPIL will increase gradually (25.8% in FY14, 3.4% in FY16 and 33% in FY18E), keeping earnings growth of CPIL under check. ICICI Securities Ltd Retail Equity Research Page 6

7 Exhibit 1: PAT growth to moderate following higher tax incidence FY1 FY11 FY12 FY13 FY14 FY FY16E FY17E FY18E PAT ( crore) Tax Rate (% of PBT) High dividend payout, strong return ratios Return ratios for CPIL have remained on a higher trajectory of ~1% since FY8 following the capital reduction by the company in FY8 and reducing the face value to 1/share from 1/share. This improved the RoE from 57.1% in FY7 to 142.8% in FY8. The company incurred a capex of 4 crore in FY for its toothbrush facility in Sri City Andhra Pradesh. CPIL has further capex plan of ~ 4 crore in FY17E. Given these spends towards increasing its own capacity, return ratios of CPIL are expected to moderate in next two years. However, we expect the company to be able to increase its dividend payout to ~63% in FY18E. Exhibit 11: Return ratios to witness downtrend in near term Exhibit 12: Dividend payout to reach ~63% by FY18E FY1 FY11 FY12 FY13 FY14 FY FY16E FY17E FY18E 3 FY1 FY11 FY12 FY13 FY14 FY FY16 FY17E FY18E RoCE (%) - LHS RoNW(%) - RHS Dividend Per share ( ) - RHS Dividend Payout (%) - LHS ICICI Securities Ltd Retail Equity Research Page 7

8 Outlook & valuation With Colgate s strengthening presence in toothpastes in spite of fierce competition in the segment, we remain positive on the long term growth driven by increasing per-capita consumption and premiumisation in the segment. The company s unmatched product portfolio would continue to maintain its dominance in the oral care segment. Though there are few near term concerns for margins given the increased competitive intensity in the segment and expired excise benefits, we believe CPIL s high focus on innovation and strengthening market share would continue to yield positive long term returns for the company. Considering the lead in market share of CPIL over its rivals, strong brand equity, ability to drive innovation as well as increasing premiumisation with gradual urban recovery, robust margins, sturdy return ratios & stable earnings visibility, we value CPIL at 36x its FY18E price to earnings and arrive at a target price of 971 per share. However, we believe that most of the major positives are discounted for in the stock price of CPIL that is currently trading at 36x its FY18E EPS. Hence, we change our recommendation for the stock to HOLD. Exhibit 13: Valuations Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY FY FY17E FY18E ICICI Securities Ltd Retail Equity Research Page 8

9 Recommendation history vs. Consensus ( ) 1,2 1,1 1, Jul-14 Oct-14 Dec-14 Mar- May- Aug- Oct- Dec- Mar-16 May-16 Aug (%) Source: Bloomberg, Company, ICICIdirect.com Research Price Idirect target Consensus Target Mean % Consensus with SELL Key events Date Event Rise in share price aided by a special dividend of 8/share and the increasing attractiveness of the defensives (FMCG Index) following the economic downturn Jul-9 Nov-9 Second interim dividend of 7/share taking the total dividend in H1FY1 to /share May-1 Did not pay any final dividend keeping the dividend per share for FY1 restricted at 2/share Jul-1 First interim dividend for FY11 of 1/share Mar-11 Lacklustre performance of the stock following lower sales growth of ~13% and a decline in margins and net profit following increased competition May-12 Significant jump in performance with reported sales growth of ~21% YoY, volume growth of ~12% and improvement in margins. Also, with a run up in FMCG stocks, following the robust growth and subdued performance in other sectors, the stock price witnessed significant gains Jan-13 Stock gains significantly mirroring the FMCG Index led by the preference of defensives with strong market leadership in a weak economic scenario Jun-13 Re-entry of P&G in oral care market in the country increased pressure on the stock considering the concerns of increasing competition from a fierce player. Also, following the entry, Colgate's marketing expenses were expected to increase, pressurising margins Concerns on subdued FMCG volume growth with softening consumer demand impacted the performance of the complete FMCG Index also impacting the stock Nov-13 performance Apr- Announces voluntary retirement scheme at toothpowder manufacturing plant in Waluj Sep- Announces bonus issue in the ratio 1:1 Top 1 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 Colgate-Palmolive Co 31-Mar Life Insurance Corporation of India 31-Mar ARISAIG Partners (Asia) Pte. Ltd. 31-Mar Vontobel Asset Management, Inc. 3-Apr Fidelity Management & Research Company 3-Jun The Vanguard Group, Inc. 3-Jun Columbia Wanger Asset Management, LLC 31-Mar UTI Asset Management Co. Ltd. 3-Jun Mirae Asset Global Investments (Hong Kong) Limited 3-Jun Wasatch Advisors, Inc. 31-Mar Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Jun- Sep- Dec- Mar-16 Jun-16 Promoter FII DII Others Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares Life Insurance Corporation of India 46.58m 3.71m Grantham Mayo Van Otterloo & Co LLC m -1.42m Fidelity Management & Research Company 8.12m.6m Kotak Mahindra Asset Management Company Ltd m -.71m Stewart Investors 7.24m.49m BNP Paribas Investment Partners Asia Ltd. -6.7m -.56m Caisse de Depot et Placement du Quebec 3.95m.27m ARISAIG Partners (Asia) Pte. Ltd m -.43m Kotak Mahindra (UK) Ltd 2.52m.2m Amundi Hong Kong Limited -3.85m -.3m Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 9

10 Financial summary Profit and loss statement Crore (Year-end March) FY FY16 FY17E FY18E Total Operating Income Growth (%) Raw Material Expenses 1, , , ,952.5 Employee Expenses Marketing Expenses Administrative Expenses Other expenses Total Operating Expenditure 3,9.7 3,231. 3, ,6.8 EBITDA ,169.8 Growth (%) Depreciation Interest.... Other Income PBT ,95.1 Exceptional items Total Tap PAT Growth (%) EPS ( ) Cash flow statement Crore (Year-end March) FY FY16 FY17E FY18E Profit/Loss after Tap Add: Depreciation Add: Interest.... (Inc)/dec in Current Assets Inc/(dec) in Current Liabilities CF from operating activities (Inc)/dec in Investments (Inc)/dec in Fixed Assets Others CF from investing activities Issue/(Buy back) of Equity Inc/(dec) in loan funds.... Dividend paid & dividend tap Inc/(dec) in Sec. premium.... Others CF from financing activities Net Cash flow Opening Cash Closing Cash Balance sheet Crore FY FY16 FY17E FY18E Liabilities Equity Capital Reserve and Surplus , ,361. Total Shareholders funds ,19.5 1,22.4 1,388.2 Total Debt.... Long Term Provisions Other Non-current Liabilities Total Liabilities ,17.1 1, ,448.6 Assets Gross Block 1, , , ,127.3 Less: Acc Depreciation Net Block ,8.1 1, ,322.5 Capital WIP Deferred Tap Asset.... Non Current Investments LT Loans & Advances/Others Current Assets Inventory Debtors Cash Loans & Advances Other Current Assets Current Liabilities Creditors Provisions Other CL Net Current Assets Total Assets ,17.1 1, ,448.6 Key ratios (Year-end March) FY FY16 FY17E FY18E Per share data ( ) EPS Cash EPS BV DPS Cash Per Share Operating Ratios (%) EBITDA Margin PBT / Net Sales PAT Margin Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE 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 (FMCG) CMP M Cap EPS ( ) P/E (x) Price/Sales (x) RoCE (%) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E Colgate (COLPAL) Hold 26, Dabur India (DABIND) Buy 2, GSK CH (GLACON) 6,266 6,765 Buy 25, Hindustan Unilever (HINLEV) 934 1, Buy 195, ITC Limited (ITC) Buy 31, Jyothy Lab (JYOLAB) Hold 5, Marico (MARIN) Buy 37, Nestle (NESIND) 6,892 7,133 Hold 67, Tata Global Bev (TATTEA) Hold 7, VST Industries (VSTIND) 1,975 1,931 Buy 2, 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: >%/2% for large caps/midcaps, respectively, with high conviction; Buy: >1%/% 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, Sanjay Manyal, MBA (Finance) and Parth Joshi, MBA (Finance), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a Sebi registered Research Analyst having registration no. INH99. ICICI Securities is full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. 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