Bharat Petroleum Corp (BHAPET) 500

Result Update Rating matrix Rating : Hold Target : 520 Target Period : 12 months Potential Upside : 4% What s changed? Target Changed from 485 to 520 EPS FY18E Changed from 34.1 to 36.9 EPS FY19E Changed from 43.2 to 42.5 Rating Unchanged Quarterly performance Q2FY18 Q2FY17 YoY (%) Q1FY18 QoQ (%) Revenue 64,127.3 54,913.2 16.8 66,766.4-4.0 EBITDA 3,527.6 1,381.4 155.4 1,225.0 188.0 EBITDA (%) 5.5 2.5 299 bps 1.8 367 bps PAT 2,357.4 1,305.2 80.6 744.6 216.6 Key financials Crore FY16 FY17 FY18E FY19E Revenues 189,303.3 242,047.8 268,333.6 289,290.3 EBITDA 11,056.3 10,829.3 11,682.9 14,079.8 Net Profit 7,431.9 8,039.3 7,258.6 8,367.4 EPS ( ) 37.8 40.9 36.9 42.5 Valuation summary FY16 FY17 FY18E FY19E P/E 13.2 12.2 13.5 11.8 Target P/E 13.8 12.7 14.1 12.2 EV / EBITDA 10.1 11.2 10.3 9.0 P/BV 3.6 3.3 3.1 3.1 RoNW (%) 27.2 27.1 22.6 26.6 RoCE (%) 21.3 16.9 16.2 18.0 Stock data Particular Amount Market Capitalization ( Crore) 108,462.0 Total Debt (FY17) ( Crore) 23,159.2 Cash and Investments (FY17) ( Crore) 64.7 EV ( Crore) 131,556.6 52 week H/L 546/399 Equity capital ( Crore) 1,446.2 Face value ( ) 10.0 Price performance Return % 1M 3M 6M 12M HPCL 9.4 24.2 26.1 50.9 BPCL 13.4 10.6 7.6 19.9 IOCL 4.9 12.5 (6.4) 32.6 ONGC 8.1 13.0 2.7 (5.1) Research Analyst Mayur Matani mayur.matani@icicisecurities.com Akshay Gavankar akshay.gavankar@icicisecurities.com November 13, 2017 Bharat Petroleum Corp (BHAPET) 500 Marketing segment supports PAT in Q2FY18... Bharat Petroleum Corporation s (BPCL) Q2FY18 results which were below our estimates on the operational front. The revenues declined 4% QoQ to 64127.3 crore below our estimate of 67215.3 crore. GRM s stood at US$ 8/bbl below our estimate of US$ 9.2 /bbl. mainly on account of lower than expected operational performance of the refining front. The inventory gains stood at US$ 1.5/bbl. However, EBITDA at 3527.6 crore came slightly above our estimates of 3231.7 crore mainly on account of better than expected performance of marketing segment. Subsequently, the reported PAT which was contributed by higher than estimated other income stood at 2357.4 crore above our estimates of 1985.4 crore. Kochi refinery s benefits expected from H2FY18 BPCL s GRMs stood at US$ 8/barrel below our estimates of US$ 9.2/bbl mainly on account of lower core GRMs at US$ 6.5/bbl. The quarter witnessed inventory gains of US$ 1.5/bbl. The expansion project at Kochi refinery is expected to get fully completed by H2FY18 with commissioning of only one unit pending i.e Fluid catalytic cracker unit (FCCU). The higher capability of Kochi refinery to process heavy crude with better product slate will benefit the GRMs fully from Q4FY18. For Q3FY18, we expect stable GRMs due to recovery in operational efficiencies and steady global product cracks (Singapore GRMs Q3FY18- TD: US$ 7.4/bbl). On account of the same, we estimate reported GRMs of US$6.9/bbl and US$7.3/bbl for FY18E and FY19E, respectively. Crude throughput above estimates during the quarter The crude throughput during the quarter increased 9% QoQ to 7 MMT vs our estimates at 6.6 MMT. Going forward, we estimate throughput of 27.6 MMT and 29.2 MMT for FY18E and FY19E respectively, with full capacity utilisation of Kochi refinery post its stabilisation. On the marketing front, sales during the quarter increased 8.7% YoY to 10.3 MMT and came above our estimates of 9.7 MMT. Going forward, we expect marketing sales volumes to grow 4-5% CAGR over the next two years with stable marketing margins. However, the increased competition from private players and challenge of passing higher crude oil prices to the customers in the near term will play a vital role in the performance of marketing segment. There is no uncertainty with regards to subsidy, going forward as government intends to bring kerosene under DBT similar to that of LPG. We assume nil subsidy for oil companies in future. All eyes on Kochi refinery and progress on GST Kochi refinery expansion project is expected to be fully commissioned in Q4FY18 and would lead to ~US$ 2/barrel improvement in Kochi refinery GRMs. On the GST front, OMCs will have a negative impact on profitability on account of rise in input costs which cannot be claimed against the products which are excluded from GST. However, clarity on the potential inclusion of petroleum products under GST is awaited. We have a Hold recommendation on the stock with a target price of 520 (based on average of P/BV multiple: 508/share and P/E multiple: 532/share). ICICI Securities Ltd Retail Equity Research

Variance analysis Q2FY18 Q2FY18E Q2FY17 YoY (%) Q1FY18 QoQ (%) Comments Total Revenues 64,127.3 67,215.3 54,913.2 16.8 66,766.4-4.0 Raw materials costs 17,428.5 17,628.4 16,533.9 5.4 17,159.0 1.6 Employees Cost 888.7 800.0 661.5 34.3 808.7 9.9 Other Expenses 42282.6 45555.22 36336.4 16.3643 47573.6-11.1219 Total Expenditure 60,599.7 63,983.6 53,531.8 13.2 65,541.3-7.5 The GRMs during the quarter stood at US$ 8/bbl below our estimates of US$ 3,527.6 3,231.7 1,381.4 155.4 1,225.0 188.0 9.2/bbl. However, better performance of marketing segment and lower other EBITDA expenses led to higher than estimated EBITDA EBITDA margins (%) 5.5 4.8 2.5 299 bps 1.8 367 bps Depreciation 640.6 606.5 452.4 41.6 589.2 8.7 EBIT 2,887.0 2,625.2 929.0 210.8 635.8 354.0 Interest 234.8 209.2 102.4 129.3 178.9 31.3 Other Income 800.4 547.2 1,022.3-21.7 656.6 21.9 Extra Ordinary Item 0.0 0.0 0.0 NA 0.0 NA PBT 3,452.6 2,963.2 1,848.9 86.7 1,113.6 210.0 Total Tax 1,095.2 977.9 543.7 101.4 369.0 196.8 PAT 2,357.4 1,985.4 1,305.2 80.6 744.6 216.6 Higher-than-estimated other income mainly contributed to higher profitability Key Metrics Exchange rate ( /$) 64.3 64.3 66.9-3.9 64.4-0.2 Under-recoveries ( cr) 6495.6 5,592.8 3731.3 74.1 6318.7 2.8 Downstream share (%) 0.0 0.0 0.0 NA 0.0 NA Net Under-recovery ( cr) 0.0 0.0 0.0 NA 0.0 NA Throughput (mmt) 7.0 6.6 6.4 9.5 6.4 9.0 Higher-than-estimated on account of higher throughput in Mumbai refinery Sales (mmt) 10.4 9.7 9.5 8.7 10.5-1.5 GRM ($/barrel) 8.0 9.2 3.1 158.8 4.9 63.3 Lower-than-estimated GRMs on account of ongoing stabilisation at Kochi refinery. The inventory gain stood at US$ 1.5/bbl Change in estimates FY18E FY19E ( Crore) Old New % Change Old New % Change Revenue 265,188.9 268,333.6 1.2 270,969.9 289,290.3 6.8 Upward revision in crude oil estimates led to revised revenue estimates EBITDA 10,799.1 11,682.9 8.2 13,964.1 14,079.8 0.8 EBITDA Margin (%) 4.1 4.4 25 bps 5.2 4.9-33 bps PAT 6,698.4 7,258.6 8.4 8,495.8 8,367.4-1.5 Higher depreciation expenses led to decrease in profitability in FY19E EPS ( ) 34.1 36.9 8.4 43.2 42.5-1.5 Assumptions Current Earlier FY16 FY17 FY18E FY19E FY18E FY19E Exchange rate ( /$) 65.5 67.1 64.4 64.5 64.5 65.4 Under-recoveries ( cr) 27,570.2 19,728.0 25,892.4 22,258.9 22484.3 27167.2 Downstream share (%) 0.1 0.0 0.0 0.0 0.0 0.0 Net Under-recovery ( cr) 0.0 0.0 0.0 0.0 0.0 0.0 Throughput (mmt) 24.1 25.4 27.6 29.2 27.4 29.2 Sales (mmt) 38.4 40.2 42.4 44.5 42.0 44.1 GRM ($/barrel) 6.6 5.3 6.9 7.3 6.3 7.3 Comments ICICI Securities Ltd Retail Equity Research Page 2

Company Analysis Crude throughput above estimates during the quarter The crude throughput during the quarter increased 9% QoQ to 7 MMT vs our estimates at 6.6 MMT. Going forward, we estimate throughput of 27.6 MMT and 29.2 MMT for FY18E and FY19E respectively, with full capacity utilisation of Kochi refinery post its stabilisation. On the marketing front, sales during the quarter increased 8.7% YoY to 10.3 MMT and came above our estimates of 9.7 MMT. Going forward, we expect marketing sales volumes to grow 4-5% CAGR over the next two years with stable marketing margins. However, the increased competition from private players and challenge of passing higher crude oil prices to the customers in the near term will play a vital role in the performance of marketing segment. There is no uncertainty with regards to subsidy, going forward as government intends to bring kerosene under DBT similar to that of LPG. We assume nil subsidy for oil companies in future. Exhibit 1: Crude oil throughput 30 25 23.4 24.1 25.4 27.6 29.2 20 mmt 15 10 5 0 FY15 FY16 FY17 FY18E FY19E ICICI Securities Ltd Retail Equity Research Page 3

Kochi refinery s benefits expected from H2FY18 BPCL s GRMs stood at US$ 8/barrel below our estimates of US$ 9.2/bbl mainly on account of lower core GRMs at US$ 6.5/bbl. The quarter witnessed inventory gains of US$ 1.5/bbl. The expansion project at Kochi refinery is expected to get fully completed by H2FY18 with commissioning of only one unit pending i.e Fluid catalytic cracker unit (FCCU). The higher capability of Kochi refinery to process heavy crude with better product slate will benefit the GRMs fully from Q4FY18. For Q3FY18, we expect stable GRMs due to recovery in operational efficiencies and steady global product cracks (Singapore GRMs Q3FY18- TD: US$ 7.4/bbl). On account of the same, we estimate reported GRMs of US$6.9/bbl and US$7.3/bbl for FY18E and FY19E, respectively. Exhibit 2: Refining margin trend 9.0 7.5 7.3 6.0 6.6 6.9 US$ / bbl 4.5 3.0 3.6 5.3 1.5 0.0 FY15 FY16 FY17 FY18E FY19E Exhibit 3: Retail sales trend 49 42 36.7 38.4 40.2 42.4 44.5 35 mmt 28 21 14 7 0 FY15 FY16 FY17 FY18E FY19E ICICI Securities Ltd Retail Equity Research Page 4

Exhibit 4: RoE and RoCE trend % 30 25 20 15 23.7 16.8 27.2 27.1 21.3 16.9 22.6 16.2 26.6 18.0 10 5 0 FY15 FY16 FY17 FY18E FY19E ROCE ROE ICICI Securities Ltd Retail Equity Research Page 5

Outlook & Valuation Kochi refinery expansion project is expected to be fully commissioned in Q4FY18 and would lead to ~US$ 2/barrel improvement in Kochi refinery GRMs. On the GST front, OMCs will have a negative impact on profitability on account of rise in input costs which cannot be claimed against the products which are excluded from GST. However, clarity on the potential inclusion of petroleum products under GST is awaited. We have a Hold recommendation on the stock with a target price of 520 (based on average of P/BV multiple: 508/share and P/E multiple: 532/share). Exhibit 5: Valuation Valuation based on Price / BV Multiple Book Value for FY19E ( Crore) 30785.4 Number of shares (Crore) 196.7 Book Value per share ( ) 156.5 Add: Listed investments (25% discount to CMP) 40.0 Book Value of core business ( per share) 196.5 Multiple 2.5 Fair value per share without investments ( ) 491 Add: E&P value 17.0 Fair Value per share ( ) 508 Valuation based on P / E multiple Profit after tax for FY19E ( Crore) 8367.4 Less: Other Income adjusted for tax ( Crore) 1762.4 Adjusted profit after tax for FY19E ( Crore) 6605.1 Number of shares (Crore) 196.7 Adjusted EPS for FY19E ( ) 33.6 Multiple 13.0 Fair value per share without investments ( ) 435 Add: Value of Investments ( per share) Listed investments (25% discount to CMP) 40.0 Bharat Oman Refinery Ltd 13.6 Numaligarh Refinery 23.1 E&P value (BPRL) 17.0 Other Investments 3.1 Fair value per share ( ) 532 Weighted Target Price ( per share) 520 Source: ICICIdirect.com Research Exhibit 6: Valuations Year Sales Sales Gr. EPS EPS Gr. PE ( Crore) (%) ( ) (%) (x) EV/EBITDA (x) RoNW (%) RoCE (%) FY16 189303.3-20.5 37.8 61.2 13.2 10.1 27.2 21.3 FY17 242047.8 27.9 40.9 8.2 12.2 11.2 27.1 16.9 FY18E 268333.6 10.9 36.9-9.7 13.5 10.3 22.6 16.2 FY19E 289290.3 7.8 42.5 15.3 11.8 9.0 26.6 18.0 ICICI Securities Ltd Retail Equity Research Page 6

Recommendation history vs. consensus estimate 600 100.0 ( ) 500 400 300 80.0 60.0 40.0 20.0 (%) 200 Nov-15 Jan-16 Apr-16 Jun-16 Aug-16 Nov-16 Jan-17 Apr-17 Jun-17 Aug-17 Nov-17 0.0 Price Idirect target Consensus Target Mean % Consensus with BUY Source: Bloomberg, Company, ICICIdirect.com Research Key events Jun-11 Indian government announced increase in petroleum product prices, eliminated custom duty on crude oil and reduced in excise duties on petrol and diesel Nov-11 Under recoveries on diesel remain high due to depreciation of Indian rupee. Gross under recovery on petroleum products likely to increase sharply QoQ Feb-12 Shell bids to buy Cove Energy stake in Mozambique at a valuation higher than market expectations Jan-13 The government took a brave and bold decision and asked the oil marketing companies (OMCs) to periodically hike diesel prices by 50 paise/month May-13 Finance ministry plans to implement Export Parity Pricing (EPP) for pricing of petroleum products for refiners from the current trade parity pricing model. The move if implemented would have a huge negative impact on profitability of companies Aug-13 Sharp rupee depreciation, thereby likely higher under recoveries led to decline in the stock price Oct-14 Government announces diesel deregulation Dec-14 Crude oil prices declines by nearly 50% from the 2014 high's Aug-15 Government of India caps kerosene subsidy at 12/litre, LPG at 18/kg Top 10 Shareholders Rank Name Latest Filing Date %OS Position (m) Change (m) 1 Government of India 30-Jun-17 54.93 1,191.6 0.0 2 BPCL Trust 30-Jun-17 9.33 202.4 0.0 3 Life Insurance Corporation of India 30-Jun-17 1.97 42.7 0.0 4 The Vanguard Group, Inc. 31-Aug-17 1.48 32.0-1.0 5 Fidelity Management & Research Company 31-Aug-17 1.15 25.0 2.7 6 BlackRock Asset Management North Asia Limited 31-Aug-17 1.15 24.9 1.0 7 BlackRock Institutional Trust Company, N.A. 30-Sep-17 1.03 22.3-0.2 8 Franklin Templeton Asset Management (India) Pvt. Ltd. 30-Jun-17 0.70 15.2 1.7 9 Robeco Institutional Asset Management B.V. 31-Aug-17 0.65 14.2 0.7 10 APG Asset Management 31-Mar-17 0.64 13.9 2.0 Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Promoter 54.9 54.9 54.9 54.9 54.9 FII 22.1 22.7 22.5 22.5 22.4 DII 7.9 7.5 7.6 7.6 8.0 Others 15.0 14.9 14.9 14.9 14.6 Recent Activity Investor name Investor name Investor name Value (m) Shares (m) Investor name Value (m) Shares (m) Florida State Board of Administration 42.91 6.42 Principal Global Investors (Equity) -38.27-5.73 Unigestion 25.44 3.31 Standard Life Investments Ltd. -24.04-3.60 Fidelity Management & Research Company 22.27 2.69 Lyxor Asset Management -20.63-2.69 Goldman Sachs Asset Management International 17.57 2.12 ICICI Prudential Asset Management Co. Ltd. -15.05-1.82 APG Asset Management 13.45 2.01 Amundi Asset Management -8.48-1.29 Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 7

Financial summary Profit and loss statement Crore (Year-end March) FY16 FY17 FY18E FY19E Revenue 189,303.3 242,047.8 268,333.6 289,290.3 Growth (%) -20.5 27.9 10.9 7.8 (Inc.)/(Dec.) in stock in trade 724.4-5577.6 1467.7 0.0 Raw material Costs 61032.4 67710.7 75038.3 83180.4 Purchase of Products 100732.0 114220.1 125898.7 138978.6 Employee Costs 2879.1 3429.5 3297.3 3396.2 Other Expenditure 12879.2 51435.9 50948.7 49655.3 Op. Expenditure 178247.1 231218.5 256650.7 275210.4 EBITDA 11,056.3 10,829.3 11,682.9 14,079.8 Growth (%) 33.1-2.1 7.9 20.5 Depreciation 1854.3 1891.3 2495.5 3145.2 EBIT 9202.0 8938.0 9187.4 10934.7 Interest 562.9 495.9 891.9 1076.4 Other Income 2012.2 2600.7 2474.6 2630.4 PBT 10651.2 11042.8 10770.1 12488.7 Growth (%) 43.6 3.7-2.5 16.0 Tax 3219.3 3003.5 3511.5 4121.3 Reported PAT 7,431.9 8,039.3 7,258.6 8,367.4 Growth (%) 46.2 8.2-9.7 15.3 EPS 37.8 40.9 36.9 42.5 Cash flow statement Crore (Year-end March) FY16 FY17 FY18E FY19E Profit after Tax 7,431.9 8,039.3 7,258.6 8,367.4 Less: Dividend Paid 2,632.6 5,499.0 3,451.9 4,142.2 Add: Depreciation 1,854.3 1,891.3 2,495.5 3,145.2 Add: Others 913.6 879.8 50.0 50.0 Cash Profit 7,567.2 5,311.4 6,352.2 7,420.4 Increase/(Decrease) in CL -2,900.8 6,105.6 5,275.7 3,650.9 (Increase)/Decrease in CA 3,389.9-9,656.7 551.2-2,994.9 CF from Operating Activities 8056.3 1760.3 12179.2 8076.3 Purchase of Fixed Assets 9,745.7 9,079.1 9,964.1 10,500.0 (Inc)/Dec in Investments -419.9-1,790.5 447.4 1,000.0 Others 0.0 0.0 0.0 0.0 CF from Investing Activities -10,165.6-10,869.5-9,516.8-9,500.0 Inc/(Dec) in Loan Funds 2,760.4 7,301.7 1,500.0 4,500.0 Inc/(Dec) in Sh. Cap. & Res. 1,068.5-194.9-1,411.8-4,811.1 Others 1.0 2.0 2.0 2.0 CF from financing activities 3,828.9 7,106.8 88.2-311.1 Change in cash Eq. 1,719.5-2,002.4 2,750.6-1,734.8 Op. Cash and cash Eq. 347.5 2,067.1 64.7 2,815.3 Cl. Cash and cash Eq. 2,067.1 64.7 2,815.3 1,080.5 Balance sheet Crore (Year-end March) FY16 FY17 FY18E FY19E Source of Funds Equity Capital 655.6 1,311.3 1,966.9 1,966.9 Preference capital 0.0 0.0 0.0 0.0 Reserves & Surplus 26,667.3 28,357.1 30,096.4 29,510.5 Shareholder's Fund 27,323.0 29,668.3 32,063.3 31,477.4 Loan Funds 15,857.5 23,159.2 24,659.2 29,159.2 Deferred Tax Liability 2,621.9 3,501.7 3,551.7 3,601.7 Minority Interest 0.0 0.0 0.0 0.0 Source of Funds 45,802.3 56,329.3 60,274.2 64,238.3 Application of Funds Gross Block 25,251.1 35,544.1 43,544.1 53,544.1 Less: Acc. Depreciation 1,828.1 3,701.0 6,232.3 9,377.5 Net Block 23,423.0 31,843.1 37,311.7 44,166.6 Capital WIP 12,449.1 11,216.7 13,216.7 13,716.7 Total Fixed Assets 35,872.1 43,059.8 50,528.5 57,883.3 Investments 12,811.0 14,601.5 14,154.1 13,154.1 Inventories 13,792.9 19,798.0 19,114.2 20,607.0 Debtor 2,189.0 4,758.2 3,675.8 3,962.9 Cash 2,067.1 64.7 2,815.3 1,080.5 Loan & Advance, Other CA 8,625.1 9,707.5 10,922.5 12,137.5 Total Current assets 26,674.0 34,328.3 36,527.7 37,787.8 Current Liabilities 26,645.4 33,288.6 36,758.0 39,628.8 Provisions 2,909.3 2,371.7 4,178.0 4,958.1 Total CL and Provisions 29,554.7 35,660.3 40,936.1 44,586.9 Net Working Capital -2,880.7-1,332.0-4,408.3-6,799.1 Miscellaneous expense 0.0 0.0 0.0 0.0 Application of Funds 45,802.3 56,329.3 60,274.2 64,238.3 Key ratios (Year-end March) FY16 FY17 FY18E FY19E Per share data ( ) Book Value 138.9 150.8 163.0 160.0 Cash per share 10.5 0.3 14.3 5.5 EPS 37.8 40.9 36.9 42.5 Cash EPS 47.2 50.5 49.6 58.5 DPS 11.4 23.9 15.0 18.0 Profitability & Operating Ratios EBITDA Margin (%) 5.8 4.5 4.4 4.9 PAT Margin (%) 3.9 3.3 2.7 2.9 Fixed Asset Turnover (x) 5.3 5.6 5.3 5.0 Inventory Turnover (Days) 26.6 29.9 26.0 26.0 Debtor (Days) 4.2 7.2 5.0 5.0 Current Liabilities (Days) 51.4 50.2 50.0 50.0 Return Ratios (%) RoE 27.2 27.1 22.6 26.6 RoCE 21.3 16.9 16.2 18.0 RoIC 25.6 18.6 18.4 19.5 Valuation Ratios (x) PE 13.2 12.2 13.5 11.8 Price to Book Value 3.6 3.3 3.1 3.1 EV/EBITDA 10.1 11.2 10.3 9.0 EV/Sales 0.6 0.5 0.4 0.4 Leverage & Solvency Ratios Debt to equity (x) 0.6 0.8 0.8 0.9 Interest Coverage (x) 16.3 18.0 10.3 10.2 Debt to EBITDA (x) 1.4 2.1 2.1 2.1 Current Ratio 0.9 1.0 0.9 0.8 Quick ratio 0.4 0.4 0.4 0.4. ICICI Securities Ltd Retail Equity Research Page 8

ICICIdirect.com coverage universe (Oil & Gas) CMP M Cap EPS ( ) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E Bharat Petroleum (BHAPET) 500 520 Hold 54,231 40.9 36.9 42.5 12.2 13.5 11.8 11.2 10.3 9.0 16.9 16.2 18.0 27.1 22.6 26.6 Castrol India (CASIND) 400 385 Hold 19,041 13.6 13.2 13.8 29.3 30.3 29.1 18.9 20.0 18.9 161.1 187.7 204.0 113.3 133.7 143.4 GAIL (India) (GAIL) 470 440 Buy 79,489 15.5 25.9 27.9 30.3 18.1 16.8 17.1 10.7 10.5 11.7 13.3 12.6 9.2 10.7 10.7 Gujarat Gas (GUJGAS) 924 900 Hold 12,722 16.2 27.1 40.0 57.0 34.1 23.1 20.0 15.3 12.2 12.3 17.0 21.0 13.6 19.6 23.7 Gujarat State Petronet (GSPL) 210 205 Buy 11,830 8.8 12.4 13.1 23.8 16.9 16.0 14.0 10.2 9.8 13.8 18.7 17.5 11.0 13.8 13.1 Gulf Oil Lubricants (GULO) 825 900 Hold 4,090 24.4 29.8 32.1 33.8 27.7 25.7 22.1 17.8 15.7 32.5 38.0 37.2 34.2 34.7 30.3 Hindustan Petroleum (HINPET) 422 425 Hold 64,378 13.6 11.2 12.4 10.4 12.6 11.4 8.1 9.8 8.5 19.3 13.1 14.6 30.5 22.6 22.3 Indraprastha Gas (INDGAS) 310 315 Hold 21,700 8.2 9.7 10.3 38.0 31.8 30.1 21.9 18.1 16.6 27.2 28.0 25.2 19.5 19.8 18.0 Mahanagar Gas Ltd (MAHGAS) 1,157 1,200 Hold 11,429 39.8 50.9 53.3 29.0 22.7 21.7 17.5 13.4 12.6 29.8 34.0 31.4 21.4 24.1 22.4 Mangalore Refinery (MRPL) 135 149 Buy 23,661 20.8 11.5 14.0 6.5 11.7 9.6 5.5 4.6 4.0 21.6 16.8 19.6 36.2 17.9 19.2 Petronet LNG (PETLNG) 206 310 Buy 40,500 6.1 11.4 15.5 23.7 19.9 17.4 NA NA NA 21.4 28.4 33.5 21.1 23.1 24.1 ICICI Securities Ltd Retail Equity Research Page 9

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Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report. It is confirmed that Mayur Matani, MBA and Akshay Gavankar, PGDM Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report., Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that Mayur Matani, MBA and Akshay Gavankar, PGDM. Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. 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 ICICI Securities and affiliates 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 certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that Mayur Matani, MBA and Akshay Gavankar, PGDM, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities Ltd Retail Equity Research Page 11