Siyaram Silk Mills (SIYSIL) 575

Result Update Rating matrix Rating : Buy Target : 655 Target Period : 12 months Potential Upside : 15% What s changed? Target Changed from 620 to 655 EPS FY18E Changed from 21.8 to 22.0 EPS FY19E Changed from 26.7 to 27.4 EPS FY20E Rating Quarterly performance Unchanged Unchanged Q2FY18 Q2FY17 YoY (%) Q1FY18 QoQ (%) Revenue 422.6 422.2 0.1 320.6 31.8 EBITDA 64.3 52.9 21.6 33.1 94.5 EBITDA (%) 15.2 12.5 270 bps 10.3 491 bps PAT 30.7 25.8 19.1 10.4 196.9 Key financials *EPS adjusted post stock split ( crore) FY17 FY18E FY19E FY20E Net Sales 1,574 1,698 1,949 2,217 EBITDA 197 227 274 325 Net Profit 91 103 128 162 *EPS ( ) 19.4 22.0 27.4 34.5 Valuation summary FY17 FY18E FY19E FY20E P/E 29.6 26.1 21.0 16.7 Target P/E 33.8 29.8 24.0 19.0 EV to EBITDA 15.4 13.3 11.1 9.1 Price to book 4.5 4.0 3.5 3.0 RONW (%) 15.3 15.3 16.6 18.0 ROCE (%) 15.1 15.7 17.7 20.4 Stock data Particular Amount Market Capitalisation ( Crore) 2,695.0 Debt (FY17) ( Crore) 342.4 Cash (FY17) ( Crore) 4.7 EV ( Crore) 3,032.7 52 week H/L 630 / 227 Equity Capital ( Crore) 9.4 Face Value ( ) 2 Price performance 1M 3M 6M 12M Siyaram Silk Mills 6.3 43.0 58.4 136.6 Kewal Kiran Clothing -4.4 12.4 6.1 0.6 Arvind 9.0 17.4 13.8 27.7 Research Analyst Bharat Chhoda bharat.chhoda@icicisecurities.com Cheragh Sidhwa cheragh.sidhwa@icicisecurities.com November 22, 2017 Siyaram Silk Mills (SIYSIL) 575 Strong profitability despite pressure on revenues Siyaram Silk Mills (SSML) reported a mixed set of Q2FY18 numbers. Revenues for the quarter remained flattish YoY. However, PAT rose 19% YoY during the quarter Revenues for the quarter came in at 422.6 crore vs. 422.2 crore in Q2FY17. Total fabric sales declined 7.6% YoY to 283 crore with a volume decline of 7.3% YoY to 197 lakh metre. Garments continued on their strong trajectory with 33.9% revenue growth to 125 crore, driven by 43% volume growth (22.7 lakh pieces) EBITDA margins for the quarter improved 270 bps YoY to 15.2%, mainly on account of a significant expansion in gross margins to the tune of 592 bps YoY to 56.9%. However, higher processing & employee expenses, up 56.7% & 10.0% YoY, respectively, stemmed EBITDA growth, to a certain extent. Subsequently, absolute EBITDA increased 21.6% YoY 64.3 crore Resultant PAT came in at 30.7 crore, up 19.1% YoY. Higher depreciation cost (up 15% YoY) and decline in other income (down 19.5% YoY) moderated PAT growth Strong distribution network, rigorous brand building efforts augur well Siyaram has built a strong brand portfolio, distributed through a robust network of 1600+ dealers and over 3,00,000 MBOs. The company has expanded its retail presence mainly through franchisee route taking the total store count to 200+ Siyaram fashion avenue outlets (SFA). The franchisee stores are asset light in nature (capital infused by franchisee owner) leading to healthy return ratio. Siyaram has constantly invested in brand building by spending ~8.5% of sales annually. This has led to high brand recall for SSML. Cadini brand at the forefront of premiumisation drive After successfully establishing its flagship brand Siyaram, the company has over the years constantly focused on enhancing its product portfolio. Brands such as J Hampstead and Cadini have seen healthy traction over the past couple of years. Increase in share of premium fabrics in total fabric sale is expected to lead to enhancement of gross margins. The same trend has been witnessed wherein gross margins expanded 400 bps and 520 bps YoY in FY17 and H1FY18, respectively. In H1FY18, the new brand Cadini reported strong revenue growth of 33% to 50 crore, albeit on a smaller base. Share of Cadini brand in total fabric sales has increased from 4% in FY16 to 10% in H1FY18. Vertical integration into garmenting segment to provide growth impetus After making a mark in the fabric industry, Siyaram has forayed into the readymade apparel segment. The company sells garments under the brands, Oxemberg J Hampstead and Cadini. The management is well on track to increase the proportion of garmenting in their overall revenues. In H1FY18, the garmenting segment reported robust revenue growth of 24% YoY to 198 crore driven by 34% volume growth. The shift towards garmenting is visible as share of garments has increased from 16% in FY16 to 27% in H1FY18. With a strong fabric backbone, the company is well placed to forward integrate into the garmenting segment, which would yield higher margins. Going forward, we expect revenue and earnings to grow at a CAGR of 12% and 21%, respectively, in FY17-20E. Furthermore, we expect RoCE to improve to 20% by FY20E, from current 15%. Hence, we reiterate our BUY recommendation with a revised target price of 655 (19.0x FY20E EPS of 34.5). ICICI Securities Ltd Retail Equity Research

Variance analysis crore Q2FY18 Q2FY18E Q2FY17 YoY (%) Q1FY18 QoQ (%) Comments Revenue 422.6 N/A 422.2 0.1 320.6 31.8 Flattish topline growth owing to decline in fabric sales Other Income 5.6 N/A 7.0-19.5 4.2 33.7 Raw Material Expense 182.3 N/A 207.1-12.0 128.7 41.6 Employee Expense 46.6 N/A 42.3 10.0 44.3 5.0 Processing & Labour Expense 44.9 N/A 28.6 56.7 33.4 34.3 Other Expense 84.6 N/A 91.3-7.3 81.1 4.3 EBITDA 64.3 N/A 52.9 21.6 33.1 94.5 EBITDA Margin (%) 15.2 N/A 12.5 270 bps 10.3 491 bps Depreciation 15.3 N/A 13.3 14.9 14.9 2.6 Interest 6.6 N/A 8.7-23.4 6.2 6.9 Margin expansion on the back of decline in raw material cost and higher focus on garmenting division PBT 48.0 N/A 37.9 26.7 16.1 197.4 Tax Outgo 17.2 N/A 12.1 43.1 5.8 198.3 PAT 30.7 N/A 25.8 19.1 10.4 196.9 Strong bottomline growth of 19% Change in estimates Note: Estimates for Q2FY18 have not been published FY18E FY19E FY20E ( Crore) Old New % Change Old New % Change Old New % Change Revenue 1,743.3 1,697.7-2.6 1,948.6 1,948.6 0.0 2,300.0 2,217.0-3.6 EBITDA 227.0 227.5 0.2 269.0 273.8 1.8 325.0 325.2 0.0 EBITDA Margin (%) 13.0 13.4 38 bps 13.8 14.0 24 bps 14.1 14.7 54 bps PAT 102.0 103.1 1.0 125.0 128.2 2.6 161.5 161.8 0.2 EPS ( ) 21.8 22.0 0.9 26.7 27.4 2.5 34.5 34.5 0.1 Assumptions FY17 FY18E FY19E FY20E Cloth Volume (Lakh Mtrs) 852.7 873.2 951.6 1,030.1 Average Realisation ( ) 135 139 143 147 Readymade Garments Volume Lakh Pcs) 52.5 71.7 86.8 103.2 Average Realisation ( ) 618 568 580 591 ICICI Securities Ltd Retail Equity Research Page 2

Company Analysis Revenue mix (H1FY18) Garment 27% Yarn 2% Furnishing 2% Fabrics 69% Revenue growth in FY18E to be driven by garmenting segment FY17 saw a decline in revenue growth by 2.2% YoY on the back of poor consumer sentiments and demonetisation disrupting trade channels in Tier II, Tier III towns. Total fabric sales declined 4.2% YoY to 1150.7 crore led by a fall in volumes (down 6.2% YoY). However, the garmenting segment continued on its strong growth trajectory registering robust revenue growth of 22.5% to 324 crore in FY17. The same trend was visible in H1FY18, with 24.2% revenue growth in the garmenting segment. The strong trajectory was derived by 33.5% volume growth. Revenues from the fabric division continued to remain under pressure owing to various trade channels getting disrupted owing to GST transition. Since multi brand outlets (MBO) are the largest distribution channel, the quantum of the impact was significant. Total fabric sales grew marginally by 2.4% YoY to 513 crore for H1FY18 (69% of overall sales). Accordingly, we revise our revenue estimates marginally downwards. Going forward, we expect the fabrics division to return to its original growth trajectory and register revenue CAGR of 9.7% in FY17-20E while we expect the garments segment to record 23.5% CAGR in FY17-20E. Exhibit 1: Revenue trend crore 2,500 2,000 1,500 1,000 500-1,041 251 338 308 405 1,303 301 394 328 479 1,510 297 393413502 1,609 283 422 529 338 1,574 321 423 1,698 1,949 2,217 FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17 Q1FY18 Q2FY18 FY18E FY19E FY20E Exhibit 2: Segmental revenue contribution 2,200.0 1,900.0 1,600.0 1,300.0 1,000.0 700.0 400.0 100.0 72 548 90 117 113 717 749 822 213 995 272 265 1,126 1,201 324 1,151 407 1,214 503 1,362 610 1,519 (200.0) FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E Fabric Segment RMG Segment ICICI Securities Ltd Retail Equity Research Page 3

Higher share of garments and premium fabric brands to enhance margins Though overall revenues de-grew in FY17, gross margins expanded 400 bps YoY owing to an increase in share of garmenting segment in the total revenue mix and higher share of premium brands in fabric segment (Cadini). However, on account of a decline in fabric volumes (down 6.2% YoY), EBITDA margins expanded a mere 50 bps YoY to 12.5% in FY17 (negative operating leverage). Going forward, we expect EBITDA margins to improve to 14.7% by FY19E due to SSML s focus on enhancing share of garments in overall revenue while EBITDA is expected to grow at 18% CAGR in FY17-19E. Driven by strong EBITDA generation, we expect PAT to grow at a CAGR of 21% over FY17-20E. Exhibit 3: Consistent growth in EBITDA, EBITDA margin crore 350.0 300.0 250.0 200.0 150.0 100.0 50.0-140 10.7 10.6 12.3 26 40 10.5 12.2 31 58 11.5 174 10.4 12.7 31 50 11.4 47 12.0 60 12.0 10.6 193 30 12.5 53 12.4 42 13.7 73 12.5 197 10.3 33 15.2 13.4 14.0 64 227 274 14.7 325 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 - FY14 Q1FY15 Q2FY15 % Q3FY15 Q4FY15 FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17 Q1FY18 Q2FY18 FY18E FY19E FY20E EBITDA EBITDA Margin Exhibit 4: PAT to grow at steady pace 170 162 crore 150 130 110 90 70 50 30 10 84 79 64 55 11 19 14 20 12 22 32 25 28 21 13 13 8 128 103 91 44 26 31 14 10 (10) FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17 Q1FY18 Q2FY18 FY18E FY19E FY20E ICICI Securities Ltd Retail Equity Research Page 4

Return ratios to pick up, going forward Due to a subdued operational performance in FY17 on account of demonetisation effect, SSML witnessed a drop in its return ratios. However, in anticipation of a strong bottomline trajectory, we expect return ratios to also pick up, going forward. We expect return on capital employed (RoCE) to increase from 15% in FY17 to 20% in FY20E. Exhibit 5: Debt-equity ratio trend 2.5 2.0 2.0 1.6 x 1.5 1.0 0.5 1.1 1.3 1.0 1.0 0.9 0.7 0.9 0.6 0.5 0.5 0.3 - FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E Exhibit 6: Return ratios to improve, going forward 30.0 26.2 % 25.0 20.0 15.0 10.0 7.0 8.0 19.8 13.9 21.2 17.6 17.9 17.5 17.2 14.4 15.5 18.1 17.9 16.6 15.3 15.3 14.9 15.1 15.7 17.7 16.6 20.4 18.0 5.0 6.2-3.8 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E RoE RoCE ICICI Securities Ltd Retail Equity Research Page 5

Valuation After making a mark in the fabric industry, Siyaram has forayed into the readymade apparel segment. The company sells garments under the brands, Oxemberg J Hampstead and Cadini. The management is well on track to increase the proportion of garmenting in their overall revenues. In H1FY18, the garmenting segment reported robust revenue growth of 24% YoY to 198 crore driven by 34% volume growth. The shift towards garmenting is visible as the share of garments has increased from 16% in FY16 to 27% in H1FY18. With a strong fabric backbone, the company is well placed to forward integrate into the garmenting segment, which would yield higher margins. Going forward, we expect revenue and earnings to grow at a CAGR of 12% and 21% respectively in FY17-20E. Furthermore, we expect RoCE to improve to 20% by FY20E, from current 15%. Hence we reiterate our BUY recommendation with a revised target price of 655 (19.0x FY20E EPS of 34.5). Exhibit 7: Valuations Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY17 1,573.9 (2.2) 19.4 8.3 29.6 15.4 15.3 15.1 FY18E 1,697.7 7.9 22.0 13.2 26.1 13.3 15.3 15.7 FY19E 1,948.6 14.8 27.4 24.4 21.0 11.1 16.6 17.7 FY20E 2,217.0 13.8 34.5 26.2 16.7 9.1 18.0 20.4 ICICI Securities Ltd Retail Equity Research Page 6

(%) ( ) Recommendation history vs. consensus estimate 670 620 570 520 470 420 370 320 270 220 170 120 Nov-15 Jan-16 Apr-16 Jun-16 Sep-16 Nov-16 Feb-17 Apr-17 Jun-17 Sep-17 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Nov-17 Source: Bloomberg, Company, ICICIdirect.com Research Price Idirect target Consensus Target Mean % Consensus with BUY Key events Date Event Jul-10 Revenues grow 22% YoY for FY10 to 796 crore and net profit almost tripled from 11.44 crore to 33.66 crore Jan-11 Continues its momentum of revenue and earning growth with YoY revenue and PAT growth of 38% and 139%, respectively, for Q3FY11 Jul-11 After strong growth over FY09-11, Q1FY12 records slower YoY growth in sales and PAT of 7% and 12%, respectively Jan-12 Revenue and net profit decline YoY by 3% and 17%, respectively, for the quarter ended December 2011 Jul-12 Revenue growth revives with double digit YoY growth while net profit grew 8% Jan-13 Though the company reported strong YoY revenue growth of 26%, lower EBITDA margin led to net profit growth being restricted to 5% YoY May-13 In spite of 9% YoY growth in revenues, net profit declined 26% on account of lower EBITDA margins Sep-13 After two quarters of de-growth, revenues increased 19.6% YoY to 76.8 crore Nov-13 Subdued EBITDA margin keep net profit subdued (YoY growth of 3%), despite revenue increasing 22% May-14 Strong revenue growth of 40% YoY leads net profit to grow 56% YoY Sep-15 Siyaram announces a JV with Italian brand Cadini Sep-17 Share of garmenting segment enhanced from 16% in FY16 to 27% in H1FY18 Top 10 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 PKP Enterprises, L.L.P. 30-Sep-17 23.7 11.12 0.00 2 Poddar (Ashadevi Rameshkumar) 30-Sep-17 6.9 3.23 0.00 3 DSP BlackRock Investment Managers Pvt. Ltd. 30-Sep-17 5.3 2.50 0.04 4 Poddar (Vibhadevi Shrikishan) 30-Sep-17 4.6 2.16 0.00 5 Poddar (Gaurav Pramod) 30-Sep-17 4.2 1.95 0.00 6 Poddar (Ankit Pramodkumar) 30-Sep-17 4.2 1.95 0.00 7 Poddar (Rameshkumar D) 30-Sep-17 3.6 1.67 0.00 8 Poddar (Avnish Pawankumar) 30-Sep-17 3.5 1.65 0.00 9 Poddar (Anurag Pawankumar) 30-Sep-17 3.5 1.65 0.00 10 Poddar (Shrikishan Dharaprasad) 30-Sep-17 3.3 1.54 0.00 Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Promoter 67.1 67.1 67.1 67.1 67.1 FII 0.7 0.8 1.4 1.5 1.6 DII 7.6 8.5 8.5 8.5 9.4 Others 24.7 23.7 23.0 23.0 21.9 Recent Activity Buys Sells Investor name Value (Mn) Shares(Mn) Investor name Value (Mn) Shares (Mn) DSP BlackRock Investment Managers Pvt. Ltd. 0.25 0.04 Dimensional Fund Advisors, L.P. -0.02 0.00 Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 7

Financial summary Profit and loss statement Crore (Year-end March) FY17 FY18E FY19E FY20E Total operating Income 1,573.9 1,697.7 1,948.6 2,217.0 Growth (%) -2.2 7.9 14.8 13.8 Raw Material Expenses 738.6 770.8 861.9 961.8 Employee Expenses 168.6 183.4 206.9 233.9 Manufacturing & Other Expenses 470.0 516.1 606.0 696.1 Total Operating Expenditure 1,377.2 1,470.3 1,674.9 1,891.8 EBITDA 196.8 227.5 273.8 325.2 Growth (%) 1.8 15.6 20.3 18.8 Depreciation 54.6 64.4 73.4 78.5 Interest 31.7 32.4 32.4 28.0 Other Income 25.5 25.5 26.3 26.6 PBT 136.0 156.2 194.3 245.2 Growth (%) 7.0 14.8 24.4 26.2 Total Tax 45.0 53.1 66.0 83.4 PAT 91.0 103.1 128.2 161.8 Growth (%) 8.3 13.2 24.4 26.2 EPS ( ) 19.4 22.0 27.4 34.5 Cash flow statement Crore (Year-end March) FY17 FY18E FY19E FY20E PAT 91.0 103.1 128.2 161.8 Add: Depreciation 54.6 64.4 73.4 78.5 (Inc)/dec in Current Assets 62.3-77.0-126.9-125.8 Inc/(dec) in CL and Provisions -24.3 6.4 17.8 21.6 Others 0.0 0.0 0.0 0.0 CF from operating activities 183.5 96.9 92.5 136.2 (Inc)/dec in Investments 0.9-2.8-3.3-4.0 (Inc)/dec in Fixed Assets -51.0-71.9-75.8-40.8 (Inc)/dec in CWIP -31.5 7.2 8.7 10.1 Others 0.0 0.0 0.0 0.0 CF from investing activities -81.5-67.5-70.5-34.7 Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0 Inc/(dec) in loan funds -102.1 17.2 0.6-48.7 Others -1.1-22.8-28.3-37.6 CF from financing activities -103.2-5.6-27.7-86.4 Net Cash flow -1.16 23.82-5.74 15.11 Opening Cash 5.8 4.7 28.5 22.7 Closing Cash 4.7 28.5 22.7 37.8 Balance sheet Crore (Year-end March) FY17 FY18E FY19E FY20E Liabilities Equity Capital 9.4 9.4 9.4 9.4 Reserve and Surplus 587.3 666.4 764.8 889.0 Total Shareholders funds 596.6 675.7 774.1 898.4 Total Debt 342.4 359.6 360.2 311.5 Deferred Tax Liability 19.8 21.0 22.5 22.5 Minority Interest / Others - - - - Total Liabilities 958.8 1,056.3 1,156.8 1,232.3 Assets Gross Block 480.6 552.5 628.3 669.1 Less: Acc Depreciation 85.7 150.1 223.5 302.0 Net Block 394.8 402.4 404.8 367.1 Capital WIP 36.1 28.8 20.2 10.1 Total Fixed Assets 430.9 431.2 425.0 377.2 Investments 14.0 16.7 20.1 24.1 Inventory 315.6 344.2 400.4 455.5 Debtors 304.6 348.9 405.7 461.6 Loans and Advances 89.3 93.4 107.2 121.9 Cash 4.7 28.5 22.7 37.8 Total Current Assets 714.1 814.9 936.1 1,076.9 Current Liabilities 186.0 191.7 208.7 229.6 Provisions 14.1 14.8 15.6 16.4 Total Current Liabilities 200.1 206.5 224.3 245.9 Net Current Assets 514.0 608.4 711.8 831.0 Others Assets - - - - Application of Funds 958.8 1,056.3 1,156.8 1,232.3 Key ratios (Year-end March) FY17 FY18E FY19E FY20E Per share data ( ) EPS 19.4 22.0 27.4 34.5 Cash EPS 31.1 35.7 43.0 51.3 BV 127.3 144.2 165.2 191.7 DPS 0.0 4.4 5.5 6.9 Cash Per Share 1.0 6.1 4.9 8.1 Operating Ratios EBITDA Margin (%) 12.5 13.4 14.0 14.7 PBT Margin (%) 8.6 9.2 10.0 11.1 PAT Margin (%) 5.8 6.1 6.6 7.3 Inventory days 73.2 74.0 75.0 75.0 Debtor days 70.6 75.0 76.0 76.0 Creditor days 69.3 68.0 67.0 67.0 Return Ratios (%) RoE 15.3 15.3 16.6 18.0 RoCE 15.1 15.7 17.7 20.4 RoIC 16.1 17.0 18.7 21.7 Valuation Ratios (x) P/E 29.6 26.1 21.0 16.7 EV / EBITDA 15.4 13.3 11.1 9.1 EV / Net Sales 1.9 1.8 1.6 1.3 Market Cap / Sales 1.7 1.6 1.4 1.2 Price to Book Value 4.5 4.0 3.5 3.0 Solvency Ratios Debt/EBITDA 1.7 1.6 1.3 1.0 Debt / Equity 0.6 0.5 0.5 0.3 Current Ratio 3.6 3.9 4.2 4.4 Quick Ratio 2.0 2.3 2.4 2.5. ICICI Securities Ltd Retail Equity Research Page 8

ICICIdirect.com coverage universe (Apparel) 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 Kewal Kiran Clothing 1880 2260 Buy 2308 69.2 75.8 96.3 23.4 21.2 16.8 4.8 4.5 3.8 23.8 23.6 25.6 23.8 22.7 24.5 Page Industries 22724 22920 Hold 25380 238.7 299.9 395.1 95.2 75.8 57.5 59.8 47.3 36.5 51.6 55.8 61.0 40.0 41.8 44.9 Rupa & Company 445 505 Buy 3498 9.1 10.6 13.6 49.0 41.9 32.6 25.1 22.3 17.8 23.6 25.0 28.9 16.4 17.5 20.0 Vardhman Textiles 1295 1440 Buy 7453 118.1 139.9 160.2 11.0 9.3 8.1 8.1 6.8 5.9 12.6 14.1 15.1 13.5 14.1 14.5 Arvind Ltd 432 480 Buy 11205 12.3 12.4 14.0 35.3 34.8 30.9 14.5 13.8 12.7 11.0 9.9 10.4 11.9 9.0 9.6 ICICI Securities Ltd Retail Equity Research Page 9

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: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% 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 400 093 research@icicidirect.com ICICI Securities Ltd Retail Equity Research Page 10

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