Axis Bank. Source: Company Data; PL Research

Transcription

1 Gradual strengthening of balance sheet continues January 23, 2018 R Sreesankar rsreesankar@plindia.com / Pritesh Bumb priteshbumb@plindia.com / Vidhi Shah vidhishah@plindia.com / Rating BUY Price Rs611 Target Price Rs651 Implied Upside 6.5% Sensex 35,798 Nifty 10,966 (Prices as on January 22, 2018) Trading data Market Cap. (Rs bn) 1,570.5 Shares o/s (m) 2, M Avg. Daily value (Rs m) Major shareholders Promoters 28.04% Foreign 48.06% Domestic Inst % Public & Other 9.57% Stock Performance (%) 1M 6M 12M Absolute Relative How we differ from Consensus EPS (Rs) PL Cons. % Diff Price Performance (RIC: AXBK.BO, BB: AXSB IN) (Rs) Jan 17 Mar 17 May 17 Source: Bloomberg Jul 17 Sep 17 Nov 17 Axis Bank earnings were slightly below estimates on the back of higher provisions, though higher provisions helped improve PCR (calc) by 490bps to 58%. Asset quality improved despite relatively higher slippages of Rs44.3bn on large upgrade/recoveries of Rs40.1bn from the divergence related NPAs in Q2FY18 and also partly due to high write offs. Key positives for the bank continues to be strong CASA, improving retail/sme/better rated corporate and control on opex. We believe NIM pressure should bottom out and stabilize going ahead with tailwinds if MCLR increase from here on, while we see slippages & provisions gradually trending downwards in FY19 & FY20 helping improvement in return ratios, which makes us retain our positive stance intact directionally since our upgrade last month. The stock has run up sharply and hence leaves limited upside in the near term with PT of Rs651 based on 2.3x Sep 19 ABV. Ex treasury PPOP better: Core PPOP growth of ~17% YoY was better with decent NII growth of 9% YoY and strong fee income of 25% YoY (partly on lower base). Margins were lower by 7bps at 3.3% as pressure on yields continued but bank expect margin to have bottomed out and retained guidance of 20bps decline from FY17 exit of 3.67% which currently has declined by 19bps for 9MFY18. We believe NIM pressure to subside in near term and should improve slightly in next few quarters. Slippages high but stronger recovery/upgrades: Bank continued to report relatively higher slippages of Rs44.3bn mainly from corporate book and within that from the BB & below rated pool. But asset quality improved as bank witnessed Rs40.1bn of recovery/upgrade on large upgrade in one steel a/c, recovery in one IT a/c related from the RBI divergent NPAs in Q2FY18 and one NPA a/c part of NCLT was sold to non ARC on cash basis with 40% haircut. BB & Below rated exposure which remains key a monitorable for asset quality increased QoQ to Rs161.2bn (3.8% of loans) from Rs158.2bn with overlap of restructuring dispensations & watchlist. Bank maintained its credit cost guidance of bps with suitable PCR of 60 65%. Loan book growth strong; slippages to subside gradually: Loan book growth was strong at 21% YoY mainly contributed by strong SME/Retail (+27% each) growth and working capital loans in corporate book (49% growth). Bank continues to focus on retail/sme/working capital and better rated corporate exposures helping improve overall asset quality of bank and in turn would help reduce slippages going ahead.. Key financials ( Y/e March) E 2019E 2020E Net interest income 180, , , ,556 Growth (%) Operating profit 175, , , ,812 PAT 36,793 36,577 81, ,040 EPS (Rs) Growth (%) (55.5) (4.3) Net DPS (Rs) Profitability & Valuation E 2019E 2020E NIM (%) RoAE (%) RoAA (%) P / BV (x) P / ABV (x) PE (x) Net dividend yield (%) Source: Company Data; PL Research Q3FY18 Result Update Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision. Please refer to important disclosures and disclaimers at the end of the report

2 NII was decent at 9% YoY growth led by strong growth in advances; however, yields declined as more portion of book is linked to MCLR (43%) Core fee income was better at 24.5% YoY growth mainly led by retail and transaction fees. Within retail, card fees grew strong Provisions were higher than our expectations as bank strengthens the balance sheet and improves PCR by 420bps QoQ Exhibit 1: Q3FY18 Financials Core performance was better; asset quality improves (Rs m) Q3FY18 Q3FY17 YoY gr. (%) Q2FY18 QoQ gr. (%) Interest Income 1,17,216 1,11, ,12, Interest Expenses 69,900 67, , Net interest income (NII) 47,315 43, , Other income 25,931 34,002 (23.7) 25, Total income 73,246 77,339 (5.3) 71, Operating expenses 34,708 30, , Staff expenses 10,629 9, ,828 (1.8) Other expenses 24,079 21, , Operating profit 38,538 46,402 (16.9) 37, Core operating profit 36,538 31, , Total provisions 28,110 37,958 (25.9) 31,404 (10.5) Profit before tax 10,428 8, , Tax 3,163 2, , Profit after tax 7,264 5, , Advances saw better growth at 21% YoY led by retail and SME book Balance sheet (Rs m) Deposits 40,89,667 37,07, ,64,306 (1.8) Advances 42,09,227 34,71, ,01, NIMs came off further on continued pressure on yields side and slightly increased cost of funds (calc). Ratios (%) Profitability ratios RoaA NIM (5) 3.5 (7) Cost of Funds (43) 5.2 (10) Asset quality improved as bank saw huge recoveries/upgrades including 2 A/cs which fell in Q2FY18 due to RBS; however slippages were slightly higher than our expectations Asset Quality Gross NPL 2,50,005 2,04, ,74,023 (8.8) Net NPL 1,17,695 82, ,40,523 (16.2) Restructured Assets (Rs m) Gross NPL ratio (62) Net NPL ratio (56) Coverage ratio (Calc) (655) Rest. assets/ Total adv. CRAR improved significantly due to raising of equity capital and AT1 Bonds Business & Other Ratios Low cost deposit mix (100) Cost income ratio Non int. inc / total income (856) 36.3 (89) Credit deposit ratio CAR Tier I January 23,

3 Key Q3FY18 conference call highlights: Balance sheet growth & outlook: Loan book Advances grew by 21% YoY as SME and retail book grew strong while corporate loan growth was mainly working capital led. Retail loan book Book has become more diversified growing at 29% YoY led by auto (33% YoY) and personal loans (36% YoY). Bank continues to see strong traction in growth (smaller base) in credit cards, small business banking and education loans segments. Retail book has become more granulized and mainly growth is coming from existing customers. Corporate loan book Continue to grow robust at 49% YoY in working capital loans, whereas term loans were flat YoY. Focus is on moving to deeper corporate bond market, better rated corporate, reduce risk by concentration and improve transaction banking. SME loan book Book has grown at 27% YoY led by both working capital and term loans and the growth momentum continues to be the same from hereon. Liabilities: CASA Ratio stands at 49% for Q3FY18 mainly led by SA deposits. Daily avg CASA continues show strong growth. NIMs: Margins came off further by 7bps QoQ to 3.38% mainly on increase in cost of funds and yields on advances were flat sequentially. Outlook Continue to maintain compression of ~20bps in range of % (19bps in 9MFY18) over the FY from exit at 3.67% in FY17. Fees: Fee Fees growth was driven by retail which constitutes 49% of fees and grew by 35% YoY and transaction fees which now constitute 28% of fees grew by 23% YoY. Within retail, card fees continue to show strong traction. Asset Quality: Stressed asset accretion Bank witnessed Rs44.3bn of slippages of which 67% came from corporate book of Rs29.3bn of which ~68% of slippages belonged to watchlist & 93% from the BB & below pool. Retail slippages were slightly higher on some seasonality. Bank witnessed cash recovery from IT/ITES A/c and one steel A/c got upgraded during the quarter which was recognized as NPA as per RBI divergence in Q2FY18. Bank also sold one NPA a/c from the NCLT list to non ARC on cash basis with 40% haircut. Watch list Details Watch list has reduced from 1.5% to 1.3% of loan book (2.5% as on FY17). Rs20bn slippages were seen from the watch list and the funded watch list currently stands at Rs53bn. Power sector continues to dominates the watch list with 67% share. Non Fund watch list stands at Rs8.1bn. January 23,

4 BB & Below book Exposure slightly increased to Rs161.2bn from Rs158.2bn in Q2FY18 which is funded exposure and ~Rs50.0bn of non funded exposure. This includes 100% of watch list and ~35% of Restructured Dispensations (incl SDR, 5:25 & S4A). Top 3 sectors that constitute 60% of this stressed asset book are Power (35%), Infra Construction (30 35%), and Iron and Steel. Bank has been seeing as a trend of Rs20 30bn down gradation to BB & Below since past 5 quarters Power exposure has reduced to Rs160bn of which 36% is in BB & below category and 30% is in BBB Category. Credit Cost Bank has done incremental provisioning of Rs2.4bn on the IBC accounts taking PCR on IBC accounts to 68%. Bank continues to expect LGD to remain elevated in this cycle and could be around 65%. Bank has no contingent provisions. Outlook & guidance Bank maintains the credit cost guidance at bps for FY18 and expect it to improve in the latter half of FY19. Others: Bank has raised Rs86.8bn equity capital and Rs35bn AT1 bonds thus improving Tier 1 Ratio to 14.13% from 12.36% in Q2FY18. The warrants issued at Rs565 in Q3FY18 have validity of 18 months and the same will expire on June, The management expects the credit costs to start moving towards the normalised levels by the second half of FY19. Exhibit 2: Growth is led by retail mainly from Auto and unsecured segments and SME; while corporate book growth also picked up with demand in working capital (Rs m) Q3FY18 Q3FY17 YoY gr. (%) Q2FY18 QoQ gr. (%) Large & mid corporate 17,27,430 15,44, ,31,970 (0.3) SME Advances 5,48,840 4,32, ,27, Retail 19,32,960 14,95, ,42, Housing Loans & LAP 8,11,843 7,02, ,92, Personal loans 1,93,296 1,79, ,65, Auto loans 1,93,296 1,49, ,84, January 23,

5 Exhibit 1: Margins saw pressure on continued decline in yields 4.1% 4.0% 3.9% 3.8% 3.7% 3.6% 3.5% 3.4% 3.3% NIM (%) 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 ibit 2: 52% 50% 48% 46% 44% 42% 40% CASA ratio was stable influenced by demonetisation effect Low Cost deposits(%) 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Exhibit 3: MCLR linked loans has made big shift from base rate partly impacting yields Base Rate MCLR Fixed LIBOR 14% 14% 15% 16% 14% 14% 14% 14% 17% 17% 17% 16% 15% 16% 17% 19% 4% 11% 18% 29% 36% 40% 43% 69% 65% 57% 50% 42% 34% 29% 24% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Exhibit 4: Retail fees dominate and continues to see strong growth mainly led by TPP and card related fees; transaction fees also grew better Retail (non card) Retail (card) Transc. Bnking SME Treasry & DCM Corp Fees 25% 26% 25% 25% 20% 24% 18% 21% 17% 1% 4% 1% 5% 4% 4% 5% 2% 1% 2% 1% 10% 10% 5% 4% 5% 6% 6% 27% 26% 29% 26% 26% 28% 22% 20% 16% 14% 13% 16% 15% 17% 16% 19% 18% 19% 26% 29% 26% 28% 28% 30% 29% 30% 30% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 January 23,

6 Exhibit 5: C/I ratio slightly spiked up on lower total income led by lower treasury gains whereas opex has improved to 12% YoY 50% 48% 46% 44% 42% 40% 38% 36% 34% cost income 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Exhibit 6: Asset quality improved on higher recoveries/upgrades in spite of high slippages Gross NPA (%) Net NPA (%) Coverage Ratio (%) RHS 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 80% 70% 60% 50% 40% 30% 20% 10% 0% Exhibit 7: Incremental loans going towards better rated corporate AAA/AA/A BBB <BB or unrated 7% 7% 9% 8% 9% 9% 9% 11% 11% 11% 12% 16% 15% 14% 12% 10% 11% 9% 32% 31% 30% 31% 30% 31% 29% 29% 28% 27% 26% 20% 22% 23% 22% 22% 19% 17% 62% 62% 61% 61% 61% 60% 62% 60% 61% 62% 62% 64% 63% 63% 66% 68% 70% 74% 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 January 23,

7 Exhibit 8: SME profile dominated towards better rated SME 1 3 SME 4 SME 5 8 7% 7% 8% 8% 7% 7% 8% 7% 8% 8% 9% 8% 7% 7% 6% 5% 5% 12% 13% 14% 12% 11% 9% 9% 8% 8% 8% 8% 8% 8% 9% 9% 8% 8% 81% 80% 78% 80% 82% 84% 83% 85% 84% 84% 83% 84% 85% 84% 85% 86% 87% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Exhibit 9: High impairment of assets from BB and Below book makes asset quality outlook still look grim (Rs Mn) 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Gross slippages 7,080 6,650 11,850 5,830 20,820 14,740 36,380 87,720 45,600 48,110 35,190 89,360 44,280 Recoveries+ Up gradations 2,250 1,880 1,200 1,800 1,560 7,800 1,400 10,730 3,500 28,040 3,060 10,480 40,080 Write offs 1,940 2,140 9,250 2,574 6,530 3, ,730 1,220 11,940 24,620 25,170 28,220 Slippages (%) 1.13% 0.98% 1.68% 0.80% 2.72% 1.80% 4.26% 10.05% 5.21% 5.34% 3.71% 8.98% 4.26% BB & Below Book 158, ,200 % of loans 3.9% 3.8% Of which Total Restructured Dispensation 104, ,200 96,450 73,900 69,850 % of loans 3.0% 2.7% 2.5% 1.8% 1.7% Corp watch list for potential stress 226, , , ,910 94,360 79,410 60,520 53,090 % of loans 6.7% 5.9% 3.9% 3.2% 2.5% 2.1% 1.5% 1.3% IBC Exposure 78,530 68,890 70,410 60,740 Provision Coverage (%) 43% 49% 55% 68% January 23,

8 Exhibit 10: Watch list contribution was higher this quarter in accretion of stressed assets Watch list sectors (Rs mn) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Power 54,307 54,797 56,535 54,346 56,616 54,793 38,733 35,570 Iron & Steel 52,044 52,767 16,547 16,637 6,605 6,353 6,657 6,371 Textiles 15,840 14,207 Infra Construction 11,314 12,177 11,031 8,873 4,718 3,971 3,631 3,716 Oil and Gas 13,577 12,177 17,926 6,655 6,605 CRE 9,051 8,118 Cement 9,051 6,089 6,895 6,655 5,662 1,588 Shipping 6,788 6,089 2,218 1,887 Mining 11,314 6,089 Industrials 6,089 5,516 1, Engineering 4,137 4,436 3,774 3,971 4,236 1,593 Infrastructure Roads 4,137 4,436 3,774 3,176 3,026 3,185 Construction other than Infra 2,758 3,327 3,774 2, Telecom 2,758 2,421 2,124 Services 13,577 Trade Retail & Wholesale 794 1,210 TOTAL 226, , , ,910 94,360 79,410 60,520 53,090 % of loans 6.7% 5.9% 3.9% 3.2% 2.5% 2.1% 1.5% 1.3% Slippages from watch list 25,790 72,880 25,790 35,660 7,970 24,300 20,124 Slippages from outside watch list 3,340 9,050 11,070 7,540 15,200 56,800 9,676 Watch list slippages to total 71% 83% 57% 74% 34% 30% 68% Outside watch list corporate slippages to total 9% 10% 24% 16% 66% 70% 32% Exhibit 11: ~54% of watchlist has overlap with restructured dispensations (incl. SDR, 5:25, S4A) Various stressed assets overlapping with Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 watchlist Normal Watch list 52.0% 49.8% 42.7% 44.6% 45.7% Overlapped watch list 48.0% 50.2% 57.3% 55.4% 54.3% SDR & Restructured Overlap 2.4% 1.9% 2.2% 5/25 & Restructured Overlap 1.2% 4.5% SDR 5.3% 12.6% 15.3% 5/25 Refinancing 9.0% 2.8% 3.0% Restructured 31.3% 31.8% 34.6% January 23,

9 Exhibit 12: Slippages have mainly come from watchlist for this quarter Sectoral Distribution of Corporate Slippages (Rs mn) Q2FY18 Q3FY18 % Mix Total Corporate Slippages 81,100 29, % Power Gen & Distribution 23,519 7,450 25% Iron & Steel 15,409 5,960 20% IT & ITES 11,354 Engineering & Electronics 5,677 4,470 15% Infrastructure Cons. & Roads 4,055 3,874 13% Chemicals & Chemical Products 4,055 Cement & Cement Products 4,055 Sugar 3, % Shipping Transportation 1,192 4% Trade 1,192 4% Real Estate 2,433 1,192 4% Paper & Paper Products 2,433 Food Processing 1,622 1,788 6% Mining and Mining Products 596 2% Entertainment & Media 596 2% Exhibit 13: Change in estimates table We slightly tweak our estimates on yields and treasury gains (Rs mn) Old Revised % Change FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E Net interest income 1,98,370 2,31,023 2,75,656 1,90,274 2,32,272 2,75,556 (4.1) 0.5 (0.0) Operating profit 1,92,589 2,23,703 2,66,632 1,65,333 2,02,785 2,42,812 (14.2) (9.4) (8.9) Net profit 49,360 92,346 1,29,882 36,577 81,413 1,17,041 (25.9) (11.8) (9.9) EPS (Rs) (25.9) (11.8) (9.9) ABVPS (Rs) (1.4) (2.5) Price target (Rs) (0.5) Recommendation BUY BUY January 23,

10 Exhibit 14: We maintain our BUY stance with TP of Rs651 (fromrs654) based on 2.3x Sep 19 ABV PT calculation and upside Fair price EVA 643 Fair price P/ABV 659 Average of the two 651 Target P/ABV 2.3 Target P/E 17.1 Current price, Rs 612 Upside (%) 6% Dividend yield (%) 1% Total return (%) 8% Exhibit 15: AXSB s historical P/ABV trends Trading at mean levels P/ABV 3 yr avg. avg. + 1 SD avg. 1 SD Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 January 23,

11 Income Statement (Rs m) Y/e March E 2019E 2020E Int. Earned from Adv. 331, , , ,696 Int. Earned from Invt. 96, , ,453 99,705 Others 17,944 16,347 13,223 15,197 Total Interest Income 445, , , ,599 Interest expense 264, , , ,043 NII 180, , , ,556 Growth (%) Treasury Income 31,738 15,000 15,000 15,000 NTNII 85,175 98, , ,283 Non Interest Income 116, , , ,283 Total Income 562, , , ,882 Growth (%) Operating Expense 121, , , ,027 Operating Profit 175, , , ,812 Growth (%) 9.2 (6.0) NPA Provisions 111, ,455 77,394 65,383 Investment Provisions 2, Total Provisions 121, ,145 81,273 69,418 PBT 54,676 54, , ,393 Tax Provisions 17,883 17,611 40,100 56,354 Effective Tax Rate (%) PAT 36,793 36,577 81, ,040 Growth (%) (55.3) (0.6) Balance Sheet (Rs m) Y/e March E 2019E 2020E Par Value No. of equity shares 2,395 2,570 2,616 2,616 Equity 4,790 5,140 5,231 5,231 Networth 557, , , ,532 Adj. Networth 471, , , ,306 Deposits 4,143,788 4,578,886 5,128,352 5,846,321 Growth (%) Low Cost deposits 2,130,500 2,275,706 2,559,048 2,929,007 % of total deposits Total Liabilities 6,014,677 6,813,748 7,660,626 8,717,048 Net Advances 3,730,693 4,458,179 5,216,069 6,154,962 Growth (%) Investments 1,287,934 1,407,212 1,386,146 1,376,604 Total Assets 6,014,677 6,813,748 7,660,626 8,717,048. Quarterly Financials (Rs m) Y/e March Q4FY17 Q1FY18 Q2FY18 Q3FY18 Interest Income 111, , , ,216 Interest Expense 64,396 64,364 66,955 69,900 Net Interest Income 47,286 46,161 45,396 47,315 Non Interest Income 30,132 29,998 25,855 25,931 CEB 24,229 20,029 21,700 22,460 Treasury 4,280 8,241 3,770 2,000 Net Total Income 77,418 76,160 71,252 73,246 Operating Expenses 33,670 33,248 33,478 34,708 Employee Expenses 9,480 10,883 10,828 10,629 Other Expenses 24,191 22,365 22,650 24,079 Operating Profit 43,747 42,912 37,773 38,538 Core Operating Profit 39,467 34,670 34,003 36,538 Provisions 25,813 23,419 31,404 28,110 Loan loss provisions 22,820 21,770 33,920 28,030 Investment Depreciation 2, (1,370) (90) Profit before tax 17,935 19,492 6,369 10,428 Tax 5,684 6,436 2,045 3,163 PAT before EO 12,251 13,056 4,324 7,264 Extraordinary item PAT 12,251 13,056 4,324 7,264 Key Ratios Y/e March E 2019E 2020E CMP (Rs) Equity Shrs. Os. (m) 2,395 2,570 2,616 2,616 Market Cap (Rs m) 1,463,487 1,570,500 1,598,216 1,598,216 M/Cap to AUM (%) EPS (Rs) Book Value (Rs) Adj. BV (100%) (Rs) P/E (x) P/BV (x) P/ABV (x) DPS (Rs) Dividend Yield (%) Profitability (%) Y/e March E 2019E 2020E NIM RoAA RoAE Efficiency Y/e March E 2019E 2020E Cost Income Ratio (%) C D Ratio (%) Business per Emp. (Rs m) Profit per Emp. (Rs lacs) Business per Branch (Rs m) 2,156 2,151 2,141 2,160 Profit per Branch (Rs m) Asset Quality Y/e March E 2019E 2020E Gross NPAs (Rs m) 212, , , ,821 Net NPAs (Rs m) 86, ,210 88,544 73,226 Gr. NPAs to Gross Adv. (%) Net NPAs to Net Adv. (%) NPA Coverage (%) January 23,

12 Prabhudas Lilladher Pvt. Ltd. 3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai , India Tel: (91 22) Fax: (91 22) Rating Distribution of Research Coverage PL s Recommendation Nomenclature % of Total Coverage 50% 40% 30% 20% 10% 0% 43.4% 44.2% 12.4% 0.0% BUY Accumulate Reduce Sell BUY : Over 15% Outperformance to Sensex over 12 months Accumulate : Outperformance to Sensex over 12 months Reduce : Underperformance to Sensex over 12 months Sell : Over 15% underperformance to Sensex over 12 months Trading Buy : Over 10% absolute upside in 1 month Trading Sell : Over 10% absolute decline in 1 month Not Rated (NR) : No specific call on the stock Under Review (UR) : Rating likely to change shortly DISCLAIMER/DISCLOSURES ANALYST CERTIFICATION We/I, Mr. R Sreesankar (B.Sc ), Mr. Pritesh Bumb (MBA, M.com), Ms. Vidhi Shah (CA), 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. 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