Greaves Cotton (GREAVE) 138

Error! Not a valid link. Result Update Rating matrix Rating : Hold Target : 145 Target Period : 12 months Potential Upside : 5% What s Changed? Target EPS FY19E Unchanged Unchanged EPS FY2E Chnaged from 9.1 to 8.9 Rating Quarterly Performance Unchanged Q4FY18 Q4FY17 YoY (%) Q3FY18 QoQ (%) Revenue 486.2 39.7 24.4 447.3 8.7 EBITDA 69.9 53.3 31. 62.2 12.2 EBITDA (%) 14.4 13.6 72 bps 13.9 45 bps PAT 57.3 46.8 22.4 55.6 2.9 Key Financials Crore FY17E FY18E FY19E FY2E Net Sales 1,632.3 1,792.1 1,922.5 2,15.5 EBITDA 244.9 255.3 287.5 34.6 Net Profit 179. 28.2 28.2 217.2 EPS ( ) 7.3 8.5 8.5 8.9 Valuation summary FY17E FY18E FY19E FY2E P/E 19.1 17.9 15.4 15.4 Target P/E 24. 2.6 2.6 19.8 EV / EBITDA 1.4 11.5 1.4 9.2 P/BV 3.7 3.8 3.6 3.5 RoNW (%) 2.5 21.2 19.9 22.9 RoCE (%) 31.2 28.7 28.2 32. Stock data Particular Market Capitalization Total Debt (FY17) Cash and Investments (FY17) EV Amount 3199 Crore Crore 395 Crore 3667 Crore 52 week H/L 178 / 57 Equity capital 48.8 Crore Face value 2 Price performance (%) 1M 3M 6M 12M Greaves Cotton 2.2 24.1 28.8 3.5 Cummins India 1 19.2 27.9 24.2 Kirloskar Oil Engines 8.3 39.6 38.5 92.6 Research Analyst Chirag J. Shah shah.chirag@icicisecurities.com Amit Anwani amit.anwani@icicisecurities.com Low base YoY buoys growth in Q4FY18 May 7, 218 Greaves Cotton (GREAVE) 138 Greaves Cotton (GCL) reported strong Q4FY18 numbers higher than our estimates on the topline and EBITDA margin front. The company reported revenues of 486.2 crore, up 24.4% YoY (higher than our estimate of 422.7 crore). The engine segment revenue came in at 465 crore while other segments revenue was at 2.8 crore During Q4FY18, EBITDA was at 69.9 crore with higher-thanexpected EBIDTA margin of 14.4% (our estimate of 13.3%), which improved 8 bps YoY due to lower-than-expected employee cost and other operating cost PAT was at 57.3 crore (our estimate of 43.2 crore), up 22% YoY due to better operational results and one off gains to the tune of 13.3 crore from profit on sale of properties/intangibles. For FY18, revenue grew 1% to 1792 crore, EBITDA grew 5% while PAT grew 12% YoY GCL s net working capital (NWC) days have reduced from 4 days in FY17 to 18 days in FY18. It reported a sharp reduction in NWC from 18 crore to 89 crore due to operational efficiencies. The fixed asset turnover has also improved from 5x in FY17 to 6x in FY18 Low base drives volume growth across all segments In Q4FY18, GCL s engine volume (3W, 4W) has grown 3.6% YoY to 81 units. The power genset segment has shown good traction registering 33.3% volume growth on a YoY basis to 12 units. The agri pumpset volume remained subdued during the quarter at 2 units with YoY decline of 9.1% mainly impacted by rural demand. Power tiller volumes were at 15 units vs. 5 units in Q4FY17, led by incremental volumes coming from the sales of newly launched Bahubali power tillers in Q3FY18. For FY18, engines volume were at 318, up 7.9% YoY. Power genset volumes grew 41% to 45 units YoY (given market share gains of 2% in FY18). As a part of its strategy, GCL is likely to develop >5 KVA range gensets for industrial applications clean energy solutions where the company has seen good traction. Strategy to de-risk auto engine business taking gradual shape The company has entered into a technological collaboration for single cylinder and multi cylinder engines with Pinnacle Engines for CNG and petrol segment and with Altigreen for electric powertrain solutions. The Pinnacle engines are BSVI compliant and come with revolutionary piston technology that has 3% more fuel efficient engines. It has planned a capital expenditure of 1 crore each in FY19E and FY2E. With respect to Altigreen tie-up, the company has entered the Phase 2 (validation stage) wherein they will try to get OEMs on board with their offering on the EV power train platform. We believe the economics and scalability of the above tie ups will take time to fructify and meaningfully add to growth, going ahead. Moving on right track but patience required; maintain HOLD Segments such as aftermarket sales (including multi brand spares and Greaves care business) will provide the much needed growth uptick coupled with new launches in the power gensets and farm equipment segments. We believe this will lead to 8% revenue CAGR in FY18-2E. At 15x FY2E, the stock reasonably discounts medium term prospects coupled with superior dividend yield. Any positives on the new technology tie-up can re-rate the stock. Till then, we maintain our HOLD recommendation on the stock with a target price of 145/share. ICICI Securities Ltd Retail Equity Research

Variance analysis Q4FY18 Q4FY18E Q4FY17oY (Chg %) Q3FY18Q (Chg %) Comments Revenue 486.2 422.7 39.7 24.4 447.3 8.7 Revenues were ahead of estimates on account of higher growth in aftermarket business Other Income 15. 12. 15.8-5. 9. 67.5 Employee Expenses 38. 42.3 37.1 2.6 42.4-1.3 Raw Material Expenses 332.2 28. 26.6 27.5 31.6 1.1 Other operating Expenses 46.1 44. 39.7 16. 41. 12.4 EBITDA 69.9 56.4 53.3 31. 62.2 12.2 EBITDA Margin (%) 14.4 13.3 13.6 72 bps 13.9 45 bps Margins were higher than estimates on account of higher revenue growth and lower-than-expected employee expenses Depreciation 13.1 8.2 12.5 5. 13.2 -.1 Interest....2 -.2 Exceptional Item 13.3.. 22. PBT 85. 6.2 62.8 35.5 8.5 5.7 Total Tax 27.8 18.7 16. 73.5 24.9 11.7 Effective tax rate was higher on account of lower tax shield on R&D expenses incurred PAT 57.3 43.5 46.8 22.4 55.6 2.9 Key Metrics Segmental Performance Engine Segment 465.3 415. 412.3 12.9 433.9 7.2 Infrastructure & others segment 2.8 7.7 22.7-8.2 18.5 12.4 Change in estimates FY19E ( Crore) Old New % Change Old New % Change Revenue 1,892.7 1,922.5 1.6 2,73. 2,15.5 - Growth in non-auto segment revenues will be higher EBITDA 283. 287.5 1.6 299.9 34.6 - EBITDA Margin (%) 15. 15. bps 14.5 14.5 - PAT 26.7 28.2.7 221.6 217.2 - PAT is declining on account of higher effective tax rate EPS ( ) 8.5 8.5.3 9.1 8.9 - Assumptions Current FY2E Earlier FY17 FY18E FY19E FY2E FY19E FY2E 3W Volumes (units) 286,9. 32,182.9 325,93.8 347,669.9 32,762. 342,17. 4W Volumes (Units) 3,. 4,. 42,. 5,. 42,. 5,. Infrastructure revenues...... ICICI Securities Ltd Retail Equity Research Page 2

Company Analysis Low base drives volume growth across all segments In Q4FY18, GCL s engine volume (3W, 4W) grew 3.6% YoY to 81 units. The power genset segment has shown good traction registering 33.3% volume growth on a YoY basis to 12 units. The agri pumpset volume remained subdued during the quarter at 2 units with YoY decline of 9.1% mainly impacted by rural demand. Power tiller volumes were at 15 units vs. 5 units in Q4FY17, led by incremental volumes coming from sales of newly launched Bahubali power tillers in Q3FY18. For FY18, GCL s engines volume were at 318, which grew 7.9% on a YoY basis. Power genset volumes grew 41% to 45 units YoY (given market share gains of 2% in FY18). As a part of its strategy, GCL is likely to develop >5 KVA range gensets for industrial applications clean energy solutions where the company has seen good traction. Going ahead, we build in 3W volumes of ~326 and ~345 units in FY19E and FY2E, respectively, while for the 4W side, we build in estimates of 42 and 5 units, respectively. Exhibit 5: GCL commands dominating position across 3W Exhibit 1: Trend in auto engine segment sales (Engines) 45 4 35 3 25 2 15 1 5 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E 4 Wheelers Segment (in units) 3 Wheelers Passenger Segment (in units) FY2E 3 Wheeler Goods Segment (in units) Exhibit 2: Trend in 4W SCV sales in FY12-2E 7 5 (Engines) 3 6 55 41 3 3 4 42 5 1 FY13 FY14 FY15 FY16 FY17E FY18E FY19E FY2E ICICI Securities Ltd Retail Equity Research Page 3

Technological collaborations for fuel agnostic engines Today, GCL has a wide range of fuel agnostic engine range of powertrain solutions and services. Currently, the company makes engines with diesel, petrol, CNG, hybrid and electric variants making its engine portfolio fuel agnostic. The company has entered into technological collaborations for single cylinder and multi cylinder engines with Pinnacle Engines for CNG & petrol segment and with Altigreen for Electric Powertrains solutions. The Pinnacle engines is BSVI compliant and comes with revolutionary piston technology that is 3% more fuel efficient engines than convention engines giving economic benefits. The company has planned a capital expenditure of 1 crore each in FY19E and FY2E of which majority will be spent on R&D and technological collaboration. Non-auto segment will grow at 12% CAGR over FY18E-FY2E. The company has been deliberately trying to de-risk its auto segment revenues and boost the share of non-auto segment, which is currently at 5%. The company is focusing on the farm equipment, multiple spares business to grow at a healthy pace. In the farm equipment segment, the company is planning to launch new products across the segment for growth while the multi spare business is expected to be scaled back by a strong dealer network albeit on a low scale. Going ahead, we expect non-auto segment revenues at 937 crore and 156 crore for FY19E and FY2E, respectively. Exhibit 3: Non auto engine segment to grow on low base, going ahead ( crore) 12 1 8 6 4 2 1-1 -2 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17EFY18EFY19EFY2E Non Auto Engine revenues YoY Growth (%) 7 6 5 4 3 (%) 2 Margins to remain stable in 14.5-15% range over FY18E-2E EBITDA margins for Q4FY18 came in at 14.4% vs. our estimate of 13.5%. The key impact came in from the higher YoY growth in volumes (low base effect across product segments) and higher share of aftermarket business (high margin business). The management is trying to contain the rise in input costs by achieving other operational efficiencies, which can cushion the impact on margins, to some extent. Going ahead, with increasing share of aftermarket business coupled with scale benefits of the multi brand spares and Greavescare business, we expect margins to recover to the 14.5-15% range over FY19E-2E. ICICI Securities Ltd Retail Equity Research Page 4

Exhibit 4: Trend in EBITDA margins 19 17 15 13 11 11. 15.3 15.8 13.7 12.7 11.3 11.9 16.8 15. 14.2 15. 14.5 9 7 5 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E FY2E Cash flow profile to remain strong despite capex requirements The company has pegged a capex requirement of 1 crore each in FY19E (R&D capex) and FY2E (capacity creation). Despite the same, we expect GCL to generate FCF of 177 crore and 2 crore in FY19E and FY2E, respectively. In terms of return ratios, we expect the company to generate RoEs of 2% and 22.9% over the respective periods. The company, as of now, has in excess of 5 crore of cash & liquid investments and has been a liberal dividend payer (FY18 dividend at 6/share, implying a 4.5% dividend yield on the stock). Exhibit 5: GCL commands superior return ratios Exhibit 6: GCL generates strong cash flows over the years (%) 45 4 35 3 25 2 15 1 5 35.3 29.4 FY8 19.7 13.8 FY9 4.1 26.5 FY1 24.1 33.2 28.5 31. FY11 FY12 17.8 26.4 13.8 18.3 1.5 19.1 19.6 26.6 21.1 23.5 FY13 ROE FY14 FY15 ROCE FY16 FY17E 23.7 23.6 22.9 25.9 22.9 25.8 FY18E FY19E FY2E ( crore) 4 3 2 1-1 CFO FCF 366 334 233 243 244 26 26 212 16 163 177 156 125 83 97 59 72 13 31 254 177 297 22 FY9-17 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17FY18EFY19EFY2E Source: Company, ICICI Direct, Research ROE= Return on Equity, ROCE= Return on capital employed * CFO= Cash flow from operations, ** FCF = Free cash flow from operations ICICI Securities Ltd Retail Equity Research Page 5

Outlook and Valuation Segments such as aftermarket sales (including multi brand spares and Greavescare business) will provide the much needed growth uptick coupled with new launches in the power gensets and farm equipment segments. We believe this will lead to 8% revenue CAGR in FY18-2E. At 15x FY2E, the stock reasonably discounts medium term prospects coupled with superior dividend yield. Any positives on the new technology tie-up can re-rate the stock. Till then, we maintain our HOLD rating on the stock with a target price of 145/share. ICICI Securities Ltd Retail Equity Research Page 6

( ) (%) Recommendation History vs. Consensus 2 18 16 14 12 1 8 6 4 2 Apr-15 Jul-15 Sep-15 Nov-15 Feb-16 Apr-16 Jul-16 Sep-16 Dec-16 Feb-17 May-17 Jul-17 Sep-17 Dec-17 Feb-18 12. 1. 8. 6. 4. 2.. May-18 Source: Bloomberg, Company, ICICI Direct Research Series1 Idirect target Consensus Target Mean % Consensus with Buy Key events Date Apr-12 Jul-12 Apr-13 Sep-13 Event Commences supply of engines to sub one-tonne category of 4W SCVs to Tata Motors for its Tata Magic and Tata Iris products. In the first year of operation, Greaves supplied 39 engines to Tata Motors GCL enters into a long term supply agreement with Atul Auto for supply of diesel engines for their 3W diesel vehicles. The agreement was signed for seven years. Currently, Greaves' engines will power Atul Smart, Atul Shakti and Atul Gem vehicles plying across the country GCL's farm equipment business launches its first ever, compact, mini - tractor, Ustad. Greaves Ustad is present in the 11-12 HP range of entry level tractors and caters to a land holding size of 3-5 acres Adds TVS Motors as its clients in the automotive engine segment Apr-14 Reports FY14 results that were disappointing as the company witnessed a volume decline across segments. The 3W volumes stood at 3,, units while that of 4W SCVs declined 12% YoY to 55, units. Infrastructure segment EBIT losses widened to 27 crore Sep-14 Shuts down infrastructure division as revenues were not picking up Apr-15 FY15 results saw exceptional losses to the tune of 65 crore on account of write-offs pertaining to infrastructure division and inventory write-off of 9 crore in Q4FY15 in oil gensets on the back of new CPCB II norms Sep-15 The company post closing the infrastructure business regain its EBITDA margins at 16% May-16 Greaves forays into multi brand spares business. The scope of this opportunity is 35 crore business and the company expects to add 15 outlets to capitalise on the opportunity. Top 1 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 DBH International Pvt. Ltd. 31-3-218 4.32% 98.47M 2 Bharat Starch Products, Ltd. 31-3-218 5.64% 13.78M 3 Karun Carpets Pvt. Ltd. 31-3-218 5.4% 12.31M 4 IDFC Asset Management Company Private Limited 31-3-218 4.2% 1.27M 5 Reliance Nippon Life Asset Management Limited 31-12-217 3.4% 8.31M -1.66M 6 The New India Assurance Co. Ltd. 31-3-218 2.95% 7.21M +.83M 7 General Insurance Corporation of India 31-3-218 2.46% 6.M 8 Life Insurance Corporation of India 31-3-218 2.43% 5.93M 9 L&T Investment Management Limited 31-3-218 2.2% 5.37M +.93M 1 SBI Funds Management Pvt. Ltd. 31-12-217 1.54% 3.76M -3.55M Source: Reuters, ICICI Direct Research Shareholding Pattern (in %) Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Promoter 51. 51. 51. 51. 51. FII 6.56 7.15 7.29 7.26 6.72 DII 26.96 26.89 25.52 22.12 18.93 Others 15.48 14.96 16.19 19.62 23.35 Recent Activity Buys Sells Investor Name Value Shares Investor Name Value Shares L&T Investment Management Limited +1.63M +.93M Franklin Templeton Asset Management (India) Pvt. Ltd. -8.61M -3.95M The New India Assurance Co. Ltd. +1.44M +.83M SBI Funds Management Pvt. Ltd. -7.63M -3.55M Armor Capital Management, L.L.C. +.16M +.8M Reliance Nippon Life Asset Management Limited -3.56M -1.66M BOI AXA Investment Managers Private Limited +.3M +.2M Tata Asset Management Limited -2.1M -1.7M BNY Mellon Asset Management North America Corporation +.M +.M IDBI Asset Management Limited -.36M -.19M Source: Reuters, ICICI Direct Research ICICI Securities Ltd Retail Equity Research Page 7

Financial summary Profit and loss statement Crore (Year-end March) FY17E FY18E FY19E FY2E Total operating Income 1,632.3 1,792.1 1,922.5 2,15.5 Growth (%) 1.2 9.8 7.3 9.5 Raw Material Expenses 1,67.5 1,29.9 1,299.6 1,419.5 Employee Expenses 159.3 167.3 169.4 187.6 Other Operating Expenses 164.1 159.7 166. 193.8 Administrative Expenses.... Other expenses.... Total Operating Expenditure.... EBITDA 244.9 255.3 287.5 34.6 Growth (%) 164.1 4.3 12.6 6. Depreciation 45.2 47.4 52. 59.1 Interest.8.2.. Other Income 49. 45.3 62. 66. PBT 247.1 31.2 297.4 311.5 Others.... Total Tax 68.1 93. 89.2 94.3 PAT 179. 28.2 28.2 217.2 Growth (%) 6.9 16.3. 4.3 EPS ( ) 7.3 8.5 8.5 8.9 Cash flow statement Crore (Year-end March) FY17E FY18E FY19E FY2E Profit after Tax 179. 28.2 28.2 217.2 Add: Depreciation 45.2 47.4 52. 59.1 (Inc)/dec in Current Assets -66.8 4.8-15.7-27.1 Inc/(dec) in CL and Provisions 85.8 15.4 9.9 47.6 Others.... CF from operating activities 244. 366. 254.4 296.8 (Inc)/dec in Investments -3. -12. -2. -4. (Inc)/dec in Fixed Assets -32. -32. -77. -77. Others.... CF from investing activities -62. -152. -97. -117. Issue/(Buy back) of Equity.... Inc/(dec) in loan funds.... Dividend paid & dividend tax -162.4-177.2-177.2-177.2 Inc/(dec) in Sec. premium.... Others. 7.6.. CF from financing activities -186.7-177.4-177.2-177.2 Net Cash flow -4.7 36.6-19.8 2.7 Opening Cash 17. 12.3 49. 29.2 Closing Cash 12.3 49. 29.2 31.9 Balance sheet Crore (Year-end March) FY17E FY18E FY19E FY2E Liabilities Equity Capital 48.8 48.8 48.8 48.8 Reserve and Surplus 799.6 83.6 861.6 91.7 Total Shareholders funds 848.4 879.5 91.5 95.5 Total Debt.... Deferred Tax Liability 18.7 18.7 18.7 18.7 Minority Interest / Others.... Total Liabilities 867.1 898.1 929.2 969.2 Assets Gross Block 682. 714. 791. 868. Less: Acc Depreciation 392. 439.3 491.4 55.5 Net Block 29. 274.6 299.6 317.5 Capital WIP.... Total Fixed Assets 3. 284.6 39.6 327.5 Investments 383. 53. 523. 563. Inventory 129.7 19.5 11.6 115.4 Debtors 27.6 252.9 263.4 288.4 Loans and Advances 155.1 188.2 192.3 189.5 Other Current Assets 165. 218. 237. 259.6 Cash 12.3 49. 29.2 31.9 Total Current Assets 567.7 599.5 595.4 625.2 Creditors 22. 272.5 263.4 288.4 Provisions 165. 218. 237. 259.6 Total Current Liabilities 385. 49.5 5.4 548. Net Current Assets 182.6 19. 95.1 77.2 Others Assets.... Application of Funds 867.1 898.1 929.2 969.2 Key ratios (Year-end March) FY17E FY18E FY19E FY2E Per share data ( ) EPS 7.3 8.5 8.5 8.9 Cash EPS 9.2 1.5 1.7 11.3 BV 34.7 36. 37.3 38.9 DPS 5.5 5.5 6. 6. Cash Per Share.5 2. 1.2 1.3 Operating Ratios (%) EBITDA Margin 15. 14.2 15. 14.5 PBT / Total Operating income 1.9 11.6 1.8 1.3 PAT Margin 1.9 11.6 1.8 1.3 Inventory days 29. 22.3 21. 2. Debtor days 6.5 51.5 5. 5. Creditor days 49.2 55.5 5. 5. Return Ratios (%) RoE 2.5 21.2 19.9 22.9 RoCE 31.2 28.7 28.2 32. RoIC 45.8 43.3 62.1 64.4 Valuation Ratios (x) P/E 19.1 17.9 15.4 15.4 EV / EBITDA 1.4 11.5 1.4 9.2 EV / Net Sales 1.8 1.7 1.5 1.4 Market Cap / Sales 2. 2. 1.8 1.7 Price to Book Value 3.7 3.8 3.6 3.5 Solvency Ratios Debt/EBITDA.... Debt / Equity.... Current Ratio 1.6 1.4 1.1 1.1 Quick Ratio 1.3 1.1.9.9. ICICI Securities Ltd Retail Equity Research Page 8

ICICI Direct coverage universe (Capital Goods) CMP M Cap EPS ( ) P/E (x) RoCE (%) RoE (%) ( ) TP( ) Rating ( Cr) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E L&T (LARTOU) 138 1,7 Buy 19182 33.9 42. 47.2 4.7 32.9 29.2 1.2 12.1 13.1 11.4 13.3 14. Bhel (BHEL) 85 81 Hold 4168 1.2 3.4 4.8 68.5 25.3 17.8.6.5 3. 1.3 3.6 4.9 AIA Engineering 145 1,52 Hold 1334 43.9 39.4 49.8 33. 36.8 29.1 24.1 19.6 22.7 22.1 17.6 19.4 Thermax (THERMA) 118 1,335 Buy 1223 12.2 25.1 33.1 96.7 47. 35.6 11.6 12. 14.5 5.6 1.6 12.6 KEC International (KECIN) 41 45 Buy 81 12.8 15.3 21. 32. 26.8 19.5 16.3 17.8 2.3 17.4 17.6 19.7 Kalpataru Power(KPP) 49 6 Buy 7522 18.4 21.2 23.5 26.6 23.1 2.9 13.6 14.9 15. 1.5 11.6 11.5 Greaves Cotton (GREAVE) 135 145 Hold 3294 7.3 8.3 8.7 18.5 16.3 15.5 28.7 31.1 31.7 21.2 22.1 22.6 Bharat Electronics (BHAELE) 13 155 Hold 34621 6.5 7.4 8.2 23.2 2.4 18.3 23.8 23.1 22.9 17.2 17.4 17.2 Engineers India (ENGIND) 167 195 Buy 13141 5.8 6.5 7.8 3.5 27.2 22.6 18. 18.4 2.2 12.5 13.2 14.8 VaTech Wabag (VATWAB) 51 67 Buy 3638 35. 4.1 47.9 16. 14. 11.7 26.4 26.2 27.1 17.8 18. 19. ICICI Securities Ltd Retail Equity Research Page 9

RATING RATIONALE ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct 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%/2% for large caps/midcaps, respectively, with high conviction; Buy: >1%/15% for large caps/midcaps, respectively; Hold: Up to +/-1%; Sell: -1% or more; Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 4 93 research@icicidirect.com ICICI Securities Ltd Retail Equity Research Page 1

Disclaimer ANALYST CERTIFICATION We /I, Chirag Shah PGDBM, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a Sebi registered Research Analyst with Sebi Registration Number INH99. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on www.icicibank.com. ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This 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 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 Chirag Shah PGDBM; 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 Chirag Shah PGDBM;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. ICICI Securities Ltd Retail Equity Research Page 11