Result Update Sagar Cement Buy Better than expected cost rationalization, drives operating performance SGC reported topline growth of 6.2% YoY to ` 2.74bn (2.3% lower than D est). EBITDA at ` 364Mn (-14.2% YoY) was ahead of our estimates of `312Mn, driven by cost rationalization. APAT declined by 41.6% YoY to ` 58Mn. Volume led growth drives Topline, Realization weak SGC reported topline growth of 6.2% YoY (-6.8% QoQ). Cement dispatches at 0.74MnT (+16.2% YoY, -7.1%QoQ). Blended realization at `3,709/ton (-8.6% YoY, +0.4%QoQ). Volume growth during the quarter remained broad-based across the southern states. Management maintained its volume guidance of 3.2MnT for FY19E. Current realization are higher than the exit realization of June month. Cost/ton rationalization improves operating performance Cost/ton stood at Rs3,218/ton (-5.1% YoY, +0.3% QoQ). On the sequential front modest increase in cost/ton attributed to improvement in the P&F & Freight segment coupled with economies of scale resulting in fixed cost/ton reduction. Operating measures helped SGC report EBITDA of `364Mn (-14.2%YoY, - 6.0%QoQ). EBITDA margin at 13.3% (-316bps YoY, +11bps QoQ). EBITDA/ton came in at ` 492/ton (-26.2% YoY, +1.2% QoQ). Other details During the quarter SGC commissioned the grinding unit of Bayyavaram, Post the expansion Bayyavaram grinding unit capacity stands increased to 1.5Mtpa (0.3Mtpa). SGC capacity has increased to 5.5Mtpa post the expansion. Management expects 18MW CPP at Mattampally to be commissioned by Q4FY19E. Views and Valuation SGC s thrust on market and product diversification. Continuous focus on improving P&F cost (WHRS capacity augmented to 8.8MW), 18MW CPP addition at its Mattampally plant (expected to be commissioned by Q4FY19E) coupled with rationalization of lead distance post the grinding unit capacity enhancement at Bayyavaram will go a long way in improving the operating performance in the medium term. At CMP SGC is trading at $55/$53 FY19E/20E EV/T. We maintain BUY rating on the stock with a Target Price of ` 948/share. Q1FY19 Result (` Mn) Particulars Q1FY19 Q1FY18 YoY (%) Q4FY18 QoQ (%) Net Income 2,749 2,588 6.2 2,949 (6.8) Total Expenditure 2,385 2,163 10.3 2,561 (6.9) EBITDA 364 425 (14.2) 388 (6.0) Depreciation 136 126 7.9 142 (3.8) EBIT 228 299 (23.6) 246 (7.3) Other Income 5 23 (76.1) 17 (68.8) Interest 141 151 (6.6) 154 (8.2) PBT 92 170 (45.7) 110 (15.7) Tax 34 71 (51.5) 62 (45.0) RPAT 58 100 (41.6) 47 22.8 APAT 58 100 (41.6) 47 22.8 EPS (`) 2.9 4.9 (41.6) 2.3 22.8 Volume (MnT) 0.74 0.64 16.2 0.80 (7.1) Realisation/ton 3,709 4,058 (8.6) 3,694 0.4 Cost/ton 3,218 3,392 (5.1) 3,209 0.3 EBITDA/ton 492 666 (26.2) 486 1.2 EBITDA Margin (%) 13.3 16.4 (316) bps 13.1 11 bps CMP ` 743 Target / Upside ` 948/28% BSE Sensex 36,496 NSE Nifty 11,010 Scrip Details Equity / FV Market Cap ` 204mn/`10/- `15.2bn USD 0.22bn 52-week High/Low ` 1,161/734 Avg. Volume (no) 4,607 NSE Symbol Bloomberg Code Shareholding Pattern Mar 18(%) SAGCEM SGC IN Promoters 50.0 MF/Banks/FIs 13.8 FIIs 3.6 Public / Others 32.6 Valuation (x) FY18 FY19E FY20E P/E 57.7 51.5 32.4 EV/EBITDA 12.6 12.4 10.4 ROE 3.4 3.7 5.7 ROCE 4.7 4.9 5.6 Estimates (` mn) FY18 FY19E FY20E Net Sales 10,381 11,870 13,074 EBITDA 1,513 1,596 1,832 PAT 263 294 467 EPS 12.9 14.4 22.9 Analyst: Manish Raj Tel: +9122 4096 9725 E-mail: manishr@dolatcapital.com Associate: Bhavik Shah Tel: +9122 4096 9720 E-mail: bhaviks@dolatcapital.com July 23, 2018
SGC per ton matrix Particulars Q1FY19 Q1FY18 YoY (%) Q4FY18 QoQ (%) Net Sales per ton 3,709 4,058 (8.6) 3,694 0.4 Cost per ton 3,218 3,392 (5.1) 3,209 0.3 Cost of Material Consumed 460 490 (6.1) 486 (5.3) Purchase of Stock in trade 89 51 73.7 49 79.8 Change in Inventories 227 38 503.4 64 255.4 Raw Material Cost 776 579 34.1 599 29.5 Employee benefit expenses 191 173 10.3 199 (4.1) Power and Fuels 1020 1,284 (20.6) 1,106 (7.8) Freight and forwarding expenses 793 805 (1.5) 794 (0.2) Other expenses 438 551 (20.4) 511 (14.2) EBITDA per ton 492 666 (26.2) 486 1.2 SGC s cost as a % of Net Sales Particulars Q1FY19 Q1FY18 YoY (bps) Q4FY18 QoQ (bps) Cost of Material Consumed 12.4 12.1 33 13.2 (74) Purchase of Stock in trade 2.4 1.3 113 1.3 105 Change in Inventories 6.1 0.9 519 1.7 439 Raw Material Cost 20.9 14.3 666 16.2 470 Employee benefit expenses 5.1 4.3 88 5.4 (24) Power and Fuels 27.5 31.7 (416) 29.9 (245) Freight and forwarding expenses 21.4 19.8 155 21.5 (12) Other expenses 11.8 13.6 (175) 13.8 (200) Segmental Revenue & EBIT Particulars (in Mn) Q1FY19 Q1FY18 YoY (%) Q4FY18 QoQ (%) Segmental Revenue Cement 2,741 2,962 (7.5) 2,940 (6.8) Power 211 184 14.6 227 (7.0) Segmental Results (EBIT) Cement 233 310 (24.9) 246 (5.4) Power (5) (12) (58.5) (0) 2,350.0 Plant-wise Utilisation (%) Particulars Q1FY19 Q4FY18 Q3FY18 Q2FY18 Q1FY18 Mattampally Plant 64 69 58 52 56 Gudipadu Plant (BMM) 80 84 70 63 64 Logistics mix (%) Particulars Q1FY19 Q4FY18 Q3FY18 Q2FY18 Q1FY18 Rail 100.0 100.0 100.0 97.7 97.8 Road 0.0 0.0 0.0 2.3 2.2 July 23, 2018 2
Coal Cost (Rs) & Coal mix (%) Particulars Q1FY19 Q1FY18 YoY (%) Q4FY18 QoQ (%) Coal Cost (average / ton) Indigenous 5,146 4,871 5.6 5,101 0.9 Imported 8,577 6,714 27.7 8,155 5.2 Coal Mix (%) Indigenous 64 7 59 Imported 36 93 41 Key Concall Highlights Key highlights Demand in South (especially AP/Telangana) remained strong, realization improved marginally on QoQ basis. SGC s expansion at Bayyavaram was concluded in June 2018 and the unit s capacity augmented to 1.5MnT (0.3MnT). EBITDA margins for the quarter was impacted due to higher input cost, lower realization and shut down of WHRS plant (from 9th June to 30th June) to enable its upgradation from 6MW to 8.8MW. Volume guidance for FY19E stands at 3.2MnT. The management expects capacity utilization of Bayyavaram plant to be at 70% in FY19E. SAGAR Cement intends to expand its capacity to 10MnT capacity by 2025. Current Capacity addition pipeline in South India: Sr. No. Company Name Capacity (MnT) Expected completion 1 Shree Cement in Karnataka 3MnT next 1 or 2 quarters 2 Pennar 3MnT (clinkerisation) next 15-18months 3 Chettinad in AP 3.5MnT (IU) next 9-12months 4 KCP 1.5MnT Q3FY19 or Q4FY19 5 Ramco Cement 1MnT (existing location at Vizag)) and 1MnT (greenfield expansion) Q3FY19 or Q4FY19 In Q1FY19, TN & Kerala markets registered single digit growth rate. However, management volume growth guidance for FY19E remains intact. Region Volume Growth Guidance for FY19E Tamil Nadu & Kerala Degrowth of 5% AP & Telangana +15% Maharashtra +10% Karnataka +5% July 23, 2018 3
Price & Volume commentary Exit price (June) of Hyderabad was at ` 280/bag while current price are at +/- ` 2/bag, Bangalore at ` 295/bag (improvement of ` 5/bag) and Chennai at ` 295/bag (decline of ` 5/bag from June to July). The company caters to only South Odisha markets where realization stands at ` 270-280/per bag presently. The management expects realization to remain stable in Q2FY19. However, improvement in prices could be seen from Q3FY19. The trade: non-trade mix for this quarter stands at 65: 35. In Q1FY19, Mattampally Plant operated at 64% utilization and Gudipadu Plant at 80%. Raw Material cost commentary During the quarter, RM cost has gone up by around 5%. Management expects RM cost to moderate going forward. Average slag cost stands at ` 550/ton. The management stated fresh slag prices have increased by ` 250/ton on QoQ basis to ` 650/ton. The old slag: fresh slag mix stands at 60:40 (previous 75:25). The old slag which has been lying with RINL (Vizag Steel plant) is more than 8years old and costs around ` 450/ton. Freight commentary Average freight cost per ton stood at ` 793/ton (` 805/ton in Q1FY18). Despite increase in fuel cost, optimization of lead distance helped SGC report lower freight cost per ton. Increase in capacity utilization of Gudipadu and Bayyavaram plant has led to lower lead distance thereby savings in freight cost. During the quarter, bulk of south volumes have been optimized from Gudipadu plant which was earlier supplied from Mattampally. Average lead distance for the quarter stood at 357kms. Power and Fuel cost commentary Average fuel cost per ton stood at ` 878/ton (` 923/ton in Q1FY18). Despite increase in pet coke& coal prices, stabilization of Gudipadu plant led to lower fuel cost per ton on YoY basis. During the quarter, BMM plant used 100% domestic pet coke and the Mattampally plant used domestic singareni coal majorly. The gap between singareni coal prices and pet coke prices has narrowed down on kcal basis. P&F cost has decreased due to the reduction in fuel cost (and not power). In Q1FY18, average fuel cost of Gudipadu plant stood at ` 1,235/ton which has reduced to ` 852/ton in this quarter. However, average fuel cost of Mattampally plant has increased from ` 812/ton to ` 897/ton. Debt commentary As of Q1FY19, gross debt level on standalone basis was at ` 3.12bn (includes long term debt of ` 1.74bn and working capital of ` 1.38bn). On consol level, gross debt stood at ` 5.50bn (includes long term debt of ` 3.70bn and working capital of ` 1.80bn). July 23, 2018 4
Management expects debt level to stand close to ` 5.5bn in FY19. Capex and upcoming projects commentary Captive Power Plant of 18MW at Mattampally is under progress & is expected to be commissioned by March 2019. Till date, the company has spent ` 0.55bn out of total capex of ` 1bn. The company will be shutting down its Gudipadu plant for 40days starting from 28 th July for cooler replacement. However, the management said it will not impact its volume but will provide incremental savings of ` 10-15/ton of clinker. The management had provided maintenance capex of ` 150mn out of which ` 75-80mn has already being spent at BMM and ` 40mn at Mattampally. The management guided capex of ` 500mn which would be spent over the next 9months including CPP investment of ` 450mn. In FY19, the no other investment outlay for Mattampally plant is planned. Other Details Bayyavaram plant will be producing 70-75% PSC cement and rest will be GGBS and SFC or 53S. Currently, the plant is producing 10,000-12,000 tons per month GGBS which could go upto 20,000-24,000 tons per month going forward. The management expects product mix in the Southern markets to be 60: 40 (OPC: PPC) since demand is driven by government orders. Views and Valuation SGC s thrust on market and product diversification. Continuous focus on improving P&F cost (WHRS capacity augmented to 8.8MW), 18MW CPP addition at its Mattampally plant (expected to be commissioned by Q4FY19E) coupled with rationalization of lead distance post the grinding unit capacity enhancement at Bayyavaram will go a long way in improving the operating performance in the medium term. At CMP SGC is trading at $55/$53 FY19E/20E EV/T. We maintain BUY rating on the stock with a Target Price of ` 948/share. July 23, 2018 5
Income Statement (` mn) Particulars Mar17 Mar18 Mar19E Mar20E Net Income 8,138 10,381 11,870 13,074 Total Expenditure 7,035 8,868 10,275 11,242 Raw Materials Consumed 1,045 1,451 1,678 1,894 Employees Cost 431 513 604 672 Power & fuel 2,719 3,314 3,885 4,232 Freight & Forwarding exp 1,511 2,179 2,552 2,746 Other expenses 1,329 1,411 1,555 1,700 EBIDTA 1,104 1,513 1,596 1,832 Depreciation 476 536 574 583 EBIT 628 977 1,021 1,249 Interest 621 593 592 583 Other Income 35 73 30 32 PBT 42 457 459 697 Tax 81 194 165 230 PAT (39) 263 294 467 APAT (39) 263 294 467 Balance Sheet (` mn) Particulars Mar17 Mar18 Mar19E Mar20E Sources of Funds Equity Capital 204 204 204 204 Other Reserves 7,426 7,588 7,845 8,276 Net Worth 7,630 7,792 8,049 8,480 Long Term borrowing 3,497 3,297 3,797 3,797 Short Term borrowing 1,369 1,153 1,787 1,704 Loan Funds 4,866 4,450 5,584 5,501 Long-term provisions 24 39 45 50 Net Deferred Tax Liability 307 426 426 426 Other Long-term liabilities 482 529 605 667 Total Capital Employed 13,307 13,237 14,710 15,124 Applications of Funds Gross Block 12,757 13,813 15,663 15,913 Less: Acc. Depreciation 3,139 3,675 4,249 4,832 Net Block 9,618 10,138 11,414 11,081 Capital Work in Progress 553 1,254 600 600 Goodwill 387 387 387 387 Non-Current Investments 3 0 0 0 Other non-current assets 436 684 783 862 Deferred Tax Assets 256 326 326 326 Current Assets, Loans & Advances Inventories 1,104 949 1,496 1,648 Sundry Debtors 808 926 1,398 1,469 Cash & Bank Balance 1,705 581 936 1,604 Other Current Assets 462 461 576 634 sub total 4,078 2,916 4,406 5,355 Less: Current Liabilities & Provisions Other Current Liabilities 526 1,078 1,233 1,358 Trade payable 1,478 1,368 1,946 2,101 Provisions 21 23 26 29 sub total 2,025 2,469 3,205 3,488 Net Current Assets 2,053 447 1,201 1,867 Total Assets 13,307 13,237 14,710 15,124 E Estimates Cash Flow (` mn) Particulars Mar17 Mar18 Mar19E Mar20E Profit before tax and EOI (39) 457 459 697 Net Interest Exp 621 593 592 583 Depreciation. 476 536 574 583 Direct taxes paid (53) (194) (165) (230) Change in Working Capital (58) 499 (399) 2 Other 63 0 0 0 (A) CF from Opt. Activities 1,010 1,891 1,062 1,635 Capex (1,452) (1,757) (1,196) (250) Free Cash Flow (442) 134 (135) 1,385 (Inc.)/ Dec. in Investments 0 3 0 0 Other (55) (318) (98) (79) (B) CF from Inv. Activities (1,506) (2,072) (1,294) (329) Issue of Equity/ Preference 2,218 0 0 0 Inc./(Dec.) in Debt 497 (416) 1,135 (83) Interest exp net (571) (593) (592) (583) Dividend Paid (Incl. Tax) 0 (37) (37) (37) Other 28 103 82 66 (C) CF from Fin. Activities 2,171 (943) 588 (637) Net Change in Cash 1,675 (1,124) 355 669 Opening Cash balances 30 1,705 581 936 Closing Cash balances 1,705 581 936 1,604 Important Ratios Particulars Mar17 Mar18 Mar19E Mar20E (A) Measures of Performance (%) EBIDTA Margin 13.6 14.6 13.4 14.0 EBIT Margin 7.7 9.4 8.6 9.6 Interest / Sales 7.6 5.7 5.0 4.5 Gross Profit Margin 87.2 86.0 85.9 85.5 Tax/PBT 111.1 35.9 33.0 33.0 APAT Margin (0.5) 2.5 2.5 3.6 (B) As Percentage of Net Sales Raw Materials Consumed 12.8 14.0 14.1 14.5 Employees Cost 5.3 4.9 5.1 5.1 Manufacturing & other exp 68.3 66.5 67.3 66.4 (C) Measures of Financial Status Debt / Equity (x) 0.6 0.6 0.7 0.6 Interest Coverage (x) 1.0 1.6 1.7 2.1 Average Cost of Debt (%) 13.5 12.7 11.8 10.5 Debtors Period (days) 36.3 32.6 43.0 41.0 Closing stock (days) 49.5 33.4 46.0 46.0 Creditor (days) 516.4 344.1 423.2 404.8 Inventory Turnover Ratio(x) 7.4 10.9 7.9 7.9 Fixed Assets Turnover (x) 0.8 1.0 1.0 1.2 WC Turnover (x) 4.0 23.2 9.9 7.0 (D) Measures of Investment Adjusted EPS (`) (1.9) 12.9 14.4 22.9 CEPS (`) 21.4 39.2 42.6 51.5 DPS (`) 1.5 1.5 1.5 1.5 Dividend Payout (%) (78.1) 11.7 10.4 6.5 BV / share (`) 374.0 382.0 394.6 415.7 RoE (%) (0.6) 3.4 3.7 5.7 RoCE (%) (0.6) 4.7 4.9 5.6 RoACI (%) (0.7) 1.9 2.0 3.5 (E) Valuation Ratios CMP (`) 743 743 743 743 P/E (x) (386.7) 57.7 51.5 32.4 Market Cap. (` mn) 15,157 15,157 15,157 15,157 MCap/ Sales (x) 1.9 1.5 1.3 1.2 EV (` mn) 18,318 19,026 19,806 19,054 EV/Sales (x) 2.3 1.8 1.7 1.5 EV/EBDITA (x) 16.6 12.6 12.4 10.4 P/BV (x) 2.0 1.9 1.9 1.8 Dividend Yield (%) 0.2 0.2 0.2 0.2 E Estimates July 23, 2018 6
Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 DART RATING MATRIX Total Return Expectation (12 Months) Buy > 20% Accumulate 10 to 20% Reduce 0 to 10% Sell < 0% Rating and Target Price History 1300 1200 1100 1000 900 800 700 600 Month Rating TP (`) Price (`)* Sep-17 Buy 940 825 Jan-18 Buy 1,039 839 Jan-18 Buy 1,240 1,040 Jun-18 Buy 1,063 830 * As on Recommendation Date Sagar Cement Target DART Team Purvag Shah Managing Director purvag@dolatcapital.com +9122 4096 9747 Amit Khurana, CFA Head of Equities amit@dolatcapital.com +9122 4096 9745 CONTACT DETAILS Equity Sales Designation E-mail Direct Lines Dinesh Bajaj VP - Equity Sales dineshb@dolatcapital.com +9122 4096 9709 Kartik Sadagopan VP - Equity Sales kartiks@dolatcapital.com +9122 4096 9762 Kapil Yadav VP - Equity Sales kapil@dolatcapital.com +9122 4096 9735 Kartik Mehta Asia Head Derivatives kartikm@dolatcapital.com +9122 4096 9715 Derivatives Strategist Designation E-mail Bhavin Mehta VP - Derivatives Strategist bhavinm@dolatcapital.com +9122 4096 9705 Equity Trading Designation E-mail P. Sridhar VP and Head of Sales Trading sridhar@dolatcapital.com +9122 4096 9728 Chandrakant Ware AVP - Equity Sales Trading chandrakant@dolatcapital.com +9122 4096 9707 Derivatives Trading Designation E-mail Shirish Thakkar AVP - Derivatives shirisht@dolatcapital.com +9122 4096 9702 Hardik Mehta Sales Trader hardikm@dolatcapital.com +9122 4096 9748 Dolat Capital Market Private Limited. 20, Rajabahadur Mansion, 1st Floor, Ambalal Doshi Marg, Fort, Mumbai - 400 001
Analyst(s) Certification The research analyst(s), with respect to each issuer and its securities covered by them in this research report, certify that: All of the views expressed in this research report accurately reflect his or her or their personal views about all of the issuers and their securities; and No part of his or her or their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report. I. Analyst(s) and Associate (S) holding in the Stock(s): (Nil) II. Disclaimer: This research report has been prepared by Dolat Capital Market Private Limited. to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies) solely for the purpose of information of the select recipient of this report. This report and/or any part thereof, may not be duplicated in any form and/or reproduced or redistributed without the prior written consent of Dolat Capital Market Private Limited. This report has been prepared independent of the companies covered herein. Dolat Capital Market Private Limited. and its affiliated companies are part of a multi-service, integrated investment banking, brokerage and financing group. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have provided or may provide services in respect of managing offerings of securities, corporate finance, investment banking, mergers & acquisitions, financing or any other advisory services to the company(ies) covered herein. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have received or may receive compensation from the company(ies) mentioned in this report for rendering any of the above services. Research analysts and sales persons of Dolat Capital Market Private Limited. may provide important inputs to its affiliated company(ies) associated with it. While reasonable care has been taken in the preparation of this report, it does not purport to be a complete description of the securities, markets or developments referred to herein, and Dolat Capital Market Private Limited. does not warrant its accuracy or completeness. Dolat Capital Market Private Limited. may not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This report is provided for information only and is not an investment advice and must not alone be taken as the basis for an investment decision. The investment discussed or views expressed herein may not be suitable for all investors. The user assumes the entire risk of any use made of this information. The information contained herein may be changed without notice and Dolat Capital Market Private Limited. reserves the right to make modifications and alterations to this statement as they may deem fit from time to time. Dolat Capital Market Private Limited. and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. This report is neither an offer nor solicitation of an offer to buy and/or sell any securities mentioned herein and/or not an official confirmation of any transaction. This report is not directed or intended for distribution to, or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Dolat Capital Market Private Limited. and/or its affiliated company(ies) to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this report may come, are required to inform themselves of and to observe such restrictions. For U.S. Entity/ persons only: This research report is a product of Dolat Capital Market Private Limited., which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by Dolat Capital Market Private Limited. only to "Major Institutional Investors" as defined by Rule 15a- 6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person or entity. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Dolat Capital Market Private Limited. has entered into an agreement with a U.S. registered broker-dealer Ltd Marco Polo Securities Inc. ("Marco Polo"). Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer/entity as informed by Dolat Capital Market Private Limited. from time to time. Dolat Capital Market Private Limited. Corporate Identity Number: U65990DD1993PTC009797 Member: BSE Limited and National Stock Exchange of India Limited. SEBI Registration No: BSE - INB010710052 & INF010710052, NSE - INB230710031& INF230710031, Research: INH000000685 Registered office: Office No. 141, Centre Point, Somnath, Daman 396 210, Daman & Diu Board: +9122 40969700 Fax: +9122 22651278 Email: research@dolatcapital.com www.dolatcapital.com Our Research reports are also available on Reuters, Thomson Publishers, DowJones and Bloomberg (DCML <GO>)