INDIA Cement

Shree Cement
Result update

Hold
26 October 2013
Target Price CMP* Upside Previous Target Previous Rating Price Performance (%)* 1M 6M SRCM NIFTY 10.0 4.6 1.5 3.9 Rs4,530 Rs4,431 2.2% Rs4,666 Buy Key Data Bloomberg Code Curr Shares O/S (mn) Diluted Shares O/S(mn) Mkt Cap (Rsbn/USDbn) 52 Wk H / L (Rs) 1Yr 5 Year H / L (Rs) 5.5 7.7 Daily Vol. (3M NSE Avg.) SRCM IN 34.8 34.8 154.4/2.5 5384/3400 5384/308.4 19736

Realization fall drags OPM; downgrade to Hold

We downgrade our rating on Shree Cement to Hold from Buy with a revised price target of Rs4,528 (earlier: Rs4,666) due to a) earnings cut of 13.7%/8.7% for FY14E/FY15E considering the steep decline in realization and hence, lower realization assumptions going forward b) disappointment in current quarters earnings and c) expensive valuations post run-up in the stock price in the past 1.5 months. The company posted lower-than-estimated EBITDA of Rs2.5bn (est. Rs3bn) and OPM was at 20% (est. 22.4%) primarily due to sharp drop in cement realization (14.6% YoY vs. est. 8.9%). Going forward, we expect earnings to improve on the back of recent price hikes taken by cement manufacturers. Though we prefer the company due to its ability to generate industry leading op. margin (20.1% in Q1FY14) in the cement business compared to 9%/12.7%/14.7% of ACC/Ambuja/UltraTech, we believe that the current valuation at 7.4x FY15E EV/EBITDA (implied cement business EV/EBITDA at 7.8x) is expensive. We downgrade our rating to Hold and await better entry points. OPM impact led by fall in cement segments margins: Revenue of the company declined 5.7% YoY to Rs12.5bn led by 8.4% YoY decline in cement segments revenue. Revenue from the power segment increased 17.6% YoY to Rs1.6bn. Led by 39.3% YoY fall in op. profit from the cement business, the company reported 36.5% YoY decline in op. profit to Rs2.5bn and OPM declined 9.7pp YoY to 20%. Cement segments profitability impacted due to lower realization: Revenue from the cement segment declined 8.4% YoY to Rs10.9bn driven by 14.6% YoY decline in blended realization to Rs3,334/tonne. Sales volume was up 7.2% YoY to 3.26mt. Operating cost/tonne declined 2.1% YoY to Rs2,664/tonne primarily due to decline in energy cost. OPM of the cement segment declined 10.2pp YoY to 20.1%. EBITDA/tonne was at Rs670 against Rs1,184/tonne in Q1FY13. Earnings estimates revised downwards due to lower cement realization: We have revised realization estimates downwards by 2.9%/1.3% to Rs3,668/Rs4,001/tonne for FY14E/FY15E considering steep 14.9% YoY decline in realization during the quarter. Factoring in lower cement realization going forward, our EPS stands revised downwards by 13.7%/8.7% to Rs225.4/Rs297.1 for FY14E/FY15E. Valuation and key risks: At the CMP, the stock trades at 14.9x FY15E EPS, 7.4x EV/EBITDA (implied EV/EBITDA for cement business at 7.8x), and EV/tonne of US$141.9 (considering cement business only). We downgrade our rating on the stock to Hold (from Buy) considering limited upside from current levels. We have valued the cement business at 7x Sep-15E EBITDA and power business at 0.8x BV. Key upside risk could be better-than-expected realizations. Key downside risks are a) higher energy costs and b) fall in cement prices.
Y/E Jun (Rsmn) Y/E M (R ) Net Sales Op. cost EBITDA EBITDA margin (%) Depreciation Interest Other Income Adjusted PAT Adj PAT margin (%) Q1FY14 12,745 9,981 2,494 20.0 1,139 312 740 1,729 13.9 Q1FY13 13,230 9,300 3,930 29.7 942 543 300 2,288 17.3 YoY (%) (5.7) 7.3 (36.5) (9.7pp) 20.9 (42.6) 146.6 (24.4) (3.4pp) Q4FY13 14,414 10,618 3,796 26.3 1,332 378 916 2,843 19.7 QoQ (%) (13.5) (6.0) (34.3) (6.4pp) (14.5) (17.5) (19.3) (39.2) (5.9pp) Q1FY14E 13,496 10,472 3,024 22.4 1,190 380 420 1,536 11.4 Var (%) (7.6) (4.7) (17.5) (2.4pp) (4.3) (17.9) 76.1 12..6 2.5pp

*as on 25 October2013; Source: Bloomberg, Centrum Research Shareholding pattern (%) Sep-13 Promoter FIIs Dom. Inst. Public & Others Source: BSE Lower real. impacts op. performance of cement business (Rs mn) Volume (mt) Real./tonne (Rs) Revenue EBITDA) OPM (%) Opex/ tn (Rs) EBITDA/tn (Rs) Q1FY14 Q1FY13 3.3 3,334 10,872 2,184 20.1 2,664 670 3.0 3,905 11,874 3,600 30.3 2,721 1,184 Q4FY13 3.2 3,602 11,407 2,956 25.9 2,668 934 YoY (%) 7.2 (14.6) (8.4) (39.3) (10.2pp) (2.1) (43.4) QoQ (%) 3.0 (7.4) (4.7) (26.1) (5.8pp) (0.2) (28.3) 64.8 8.2 5.7 21.3 Jun-13 64.8 8.1 5.9 21.2 Mar-13 64.8 7.8 5.6 21.8 Dec-12 64.8 6.8 6.2 22.2

Source: Company, Centrum Research Earning Revision FY14E Particulars (Rs bn) Sales EBITDA EBITDA Margin (%) PAT New 60.3 14.6 24.2 7.9 Old 60.7 16.3 26.9 9.1 Chg (%) (0.6) (10.4) (2.7pp) (13.7) New 68.0 17.9 26.4 10.3 FY15E Old 68.8 19.3 28.1 11.3 Chg (%) (1.1) (7.3) (1.7pp) (8.7)

Source: Centrum Research Estimates Centrum vs. Bloomberg Consensus* FY14E Particulars (Rs bn) Net Sales EBITDA PAT Centrum BBG Var (%) 60.3 14.6 7.9 62.0 16.7 9.2 (2.7) (12.6) (14.7) Centrum 68.0 17.9 10.3 FY15E BBG 70.2 19.3 11.0 Var (%) (3.1) (6.9) (5.7)

*as on 25 October2013; Source: Bloomberg, Centrum Research Centrum Variance Bloomberg Consensus Target (%) Price Target Price BUY SELL HOLD (Rs) (Rs) 26 11 7 4,704 4,528 (3.7)

Source: Bloomberg, Centrum Research Estimates

Sanjeev Singh, sanjeev.singh@centrum.co.in 91 22 4215 9643

Source: Company, Centrum Research Estimates Y/E Jun (Rsbn) FY12* FY13 FY14E FY15E FY16E Revenue YoY (%) EBITDA EBITDA (%) APAT YoY (%) 58.0 16.5 6.1 67.9 28.4 134.8 55.9 15.6 10.0 (3.6) 27.9 65.5 60.3 14.6 7.9 7.9 24.2 (21.7) 68.0 17.9 10.3 12.7 26.4 31.8 75.8 20.3 12.2 11.5 26.8 18.3 Source: Company, Centrum Research Estimates, * Accounting year changed to June and hence the data is for 15 months DEPS Rs. 174.0 287.9 225.4 297.1 351.5 RoE (%) 25.7 30.5 18.8 20.8 20.5 RoCE (%) 17.1 22.4 14.7 16.6 16.6 P/E (x) 25.5 15.4 19.7 14.9 12.6 EV/EBITDA (x) 8.6 8.8 9.3 7.4 5.8

Centrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet

Exhibit 1: Sensitivity Analysis to FY14E

Sensitivity to key variables Cement sales volume Cement realization Fuel cost Power sales volume Power realization Source: Company, Centrum Research Estimates % increase 1 1 1 1 1 %impact on EBITDA 1.7 2.5 (0.36) 0.07 0.42 %impact on EPS 2.4 3.7 (0.55) 0.09 0.62

Exhibit 2: 1 year forward P/E chart

x 35 30 25 20 15 10 5 0

Exhibit 3: 1 year forward EV/EBITDA chart

x 12.0 10.0 8.0 6.0 4.0 2.0 0.0

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Oct-12

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Jun-12

Feb-08

Feb-09

Feb-10

Feb-11

Feb-12

P/E

Mean

Mean + Std Dev

Mean - Std Dev

Feb-13

Jun-13

Oct-13

Source: Bloomberg, Company, Centrum Research Estimates

Source: Bloomberg, Company, Centrum Research Estimates

Exhibit 4: Comparative Valuations

Company Shree Cement ACC Ambuja UltraTech Mkt Cap (Rs bn) 154 214 296 535 CAGR FY13-FY16E (%) Rev. 10.7 9.0 6.5 11.7 EBITDA 9.2 8.4 3.1 12.4 PAT 6.9 4.5 4.4 8.4 EBITDA Margin (%) PE (x) EV/EBITDA (x) RoE (%) Div Yield (%) FY14E FY15E FY16E FY14E FY15E FY16E FY14E FY15E FY16E FY14E FY15E FY16E FY14E FY15E FY16E 24.2 14.1 18.1 20.1 26.4 15.9 20.7 22.2 26.8 17.4 22.7 23.0 19.7 21.8 27.1 23.3 14.9 16.3 21.3 18.6 12.6 13.2 17.3 15.3 9.3 12.0 15.8 13.0 7.4 9.1 12.2 9.7 5.8 7.2 9.8 8.0 18.8 13.0 12.1 14.2 20.8 16.4 14.6 15.5 20.5 18.6 16.9 16.4 0.6 2.6 1.8 0.5 0.7 2.8 2.5 0.5 0.8 3.5 2.9 0.6

Source: Company, Centrum Research Estimates

Exhibit 5: Target price calculation

Particulars Cement- EBITDA (Sep-15E) EV Cement (7x EBITDA) EV Power (0.8x Equity) Total EV Less: Net Debt Equity Value No of Eq shares (mn) Target Price (Rs) CMP (Rs) Upside % Source: Company, Centrum Research Estimates Rs mn 16,367 114,570 14,400 128,970 (28,783) 157,753 35 4,530 4,431 2.2

Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13
EV/EBITDA Mean Mean + Std Dev Mean - Std Dev

Shree Cement

Exhibit 6: Quarterly Financials

Particulars/ Rs mn Revenue (Inc)/dec in inventory Raw mat. Cost Employee cost Power & fuel cost Freight cost Other exps EBITDA Depreciation EBIT Other income Interest PBT Tax Reported PAT EO Items Adj. PAT Growth (%) Revenue EBITDA Adj PAT On per tonne basis- chg Raw material cost Employee cost Power & fuel cost Freight cost Other exps EBITDA EBITDA- Cement EBITDA- power (Rs/unit) Margin (%) EBITDA m EBIT m PBT m Adj PAT m Key drivers Cement vol. growth YoY Cement real. growth YoY Power vol growth YoY Power real. Growth YoY Seg.-wise EBITDA break-up EBITDA cement bus. (Rs mn) EBITDA/tonne (Rs) EBITDA power bus. (Rs mn) EBITDA/unit (Rs) Q2FY12 8,546 107 954 593 2,033 1,919 936 2,004 1,619 385 203 468 119 (277) 11 385 393 Q3FY12 12,586 (154) 1,090 638 3,254 2,655 1,777 3,324 2,351 974 168 519 622 30 0 592 592 Q4FY12 13,762 12 1,457 605 3,611 2,459 1,887 3,730 2,346 1,384 774 411 1,747 576 28 1,143 1,162 Q5FY12* 14,553 39 1,324 746 3,415 2,355 1,863 4,812 818 3,994 322 480 3,836 320 1 3,515 3,516 Q1FY13 13,230 25 1,275 704 3,290 2,130 1,875 3,930 942 2,989 300 543 2,745 454 10 2,281 2,288 Q2FY13 14,281 (148) 1,284 749 4,227 2,284 2,167 3,717 818 2,899 323 563 2,659 365 120 2,174 2,254 Q3FY13 14,568 5 1,407 747 3,545 2,395 2,416 4,054 1,265 2,789 576 447 2,918 176 1 2,741 2,741 Q4FY13 14,414 (36) 1,415 942 4,066 2,341 1,890 3,796 1,332 2,465 916 378 3,003 159 0 2,843 2,843 Q1FY14 12,475 (48) 1,045 1,013 3,005 2,493 2,474 2,494 1,139 1,355 740 312 1,783 50 11 1,722 1,729

19.1 40.5 153.3 15.6 10.7 5.8 7.4 (6.1) 28.8 38.0 (45.1) 23.5 4.5 1.4 4.6 9.0 13.3 (86.5) 1.2 2,020 813 10 0.61

61.4 111.0 88.5 9.0 22.4 44.6 21.0 107.3 93.9 98.3 (60.4) 26.4 7.7 4.9 4.7 8.8 33.2 247.4 (4.0) 3,191 1,120 133 0.52

28.6 26.1 31.3 7.8 (6.5) (0.8) (11.8) 69.0 4.6 17.7 (68.9) 27.1 10.1 12.7 8.4 20.5 3.8 67.1 (6.3) 3,460 996 270 0.63

40.7 85.7 481.0 9.5 (2.6) 0.0 (15.6) 43.1 48.4 50.9 (5.5) 33.1 27.4 26.4 24.2 25.1 11.8 63.5 4.1 4,470 1,326 340 0.87

54.8 96.1 482.8 9.2 (2.9) 32.2 (9.3) 63.7 60.2 45.6 75.0 29.7 22.6 20.8 17.3 22.4 14.5 4,419.1 5.3 3,600 1,184 330 1.07

13.5 11.8 280.7 12.0 11.5 23.5 (18.2) 15.9 6.3 (9.2) 64.0 26.0 20.3 18.6 15.8 5.2 (1.9) 207.1 (9.0) 3,047 1,017 670 0.85

5.9 8.7 136.0 2.9 31.5 4.6 3.8 36.4 15.8 4.5 45.6 27.8 19.1 20.0 18.8 (6.1) 6.0 67.9 (8.2) 3,394 1,041 660 0.91

(1.0) (21.1) (19.1) 13.7 34.3 26.7 5.7 8.0 (16.0) (29.6) 21.2 26.3 17.1 20.8 19.7 (6.0) (5.3) 103.8 (12.6) 2,956 934 840 1.06

(5.7) (36.5) (24.4) (23.5) 34.1 (14.8) 9.2 23.0 (40.8) (43.4) (30.8) 20.0 10.9 14.3 13.9 7.2 (14.6) (100.0) (9.9) 2,184 670 310 0.74

Source: Company, Centrum Research, * accounting year changed to June

Shree Cement

Exhibit 7: Key Performance Indicators

Particulars Revenue (Rs mn) a) Cement (Rs mn) b) Power (Rs mn) Sales Volume a) Cement (mn tonnes) b) Power (mn units) Realization a) Cement (Rs/tonne) b) Power (Rs/unit) Operating cost/tonne Raw material YoY chg (%) Employee YoY chg (%) Power & fuel YoY chg (%) Freight YoY chg (%) Other expense YoY chg (%) EBITDA break-up a) Cement (Rs mn) b) Power (Rs mn) Cement EBITDA/tonne (Rs) Power EBITDA/unit (Rs) EBITDA margin (%) Cement Power FY12* 57,995 53,823 5,745 14.2 1,322 3,789 4.3 421 6.6 225 6.8 1,056 10.0 709 10.9 514 (7.7) 15,485 973 1,090 1.11 28.8 16.9 FY13 55,903 45,475 10,428 12.3 2,610 3,704 4.0 424 0.7 255 13.3 1,227 16.2 742 4.7 620 20.6 12,998 2,500 1,059 0.96 28.6 24.0 FY14E 60,303 49,860 10,443 13.6 2,611 3,668 4.0 454 7.1 297 16.5 1,185 (3.4) 777 4.7 651 4.9 12,102 2,496 890 0.96 24.3 23.9 FY15E 67,987 56,882 11,106 14.2 2,776 4,001 4.0 470 3.5 303 2.0 1,231 3.9 819 5.4 689 5.8 15,183 2,747 1,068 0.99 26.7 24.7 FY16E 75,786 63,674 12,112 15.0 2,884 4,248 4.2 488 3.8 305 0.8 1,306 6.0 869 6.1 723 4.9 17,552 2,780 1,310 0.96 27.6 23.0

Source: Company, Centrum Research Estimates * Accounting year changed to June and hence, not comparable with FY13 numbers

Shree Cement

Financials
Exhibit 8: Income Statement
Y/E June (Rs mn) Net Sales Raw Materials as % of sales Power & Fuel as % of sales Freight cost as % of sales EBITDA EBITDA margin (%) Depreciation EBIT Interest Other Income PBT Tax Tax rate (%) Min Int & associates Rep PAT EO items Adj PAT FY12* 57,995 5,977 10.3 14,999 25.9 10,064 17.4 16,458 28.4 8,731 7,727 2,354 1,628 7,001 693 9.9 6,185 (123) 6,062 FY13 55,903 5,226 9.3 15,129 27.1 9,150 16.4 15,609 27.9 4,356 11,253 1,931 1,883 11,205 1,155 10.3 10,040 (11) 10,029 FY14E 60,303 5,761 9.6 16,103 26.7 10,963 18.2 14,598 24.2 5,446 9,152 1,406 2,070 9,816 1,963 20.0 7,853 7,853 FY15E 67,987 6,252 9.2 17,505 25.7 12,065 17.7 17,930 26.4 6,268 11,662 1,166 2,440 12,937 2,587 20.0 10,349 10,349 FY16E 75,786 6,858 9.0 19,570 25.8 13,471 17.8 20,332 26.8 6,948 13,384 926 2,850 15,309 3,062 20.0 12,247 12,247

Exhibit 10: Balance Sheet

Y/E June (Rs mn) Sources of Funds: Share Capital Reserves Shareholders Fund Debt Net deferred tax Total Liabilities Application of Funds: Gross Block Accumulated Depn Net Fixed Assets Capital WIP Investments Current Assets Inventories Sundry Debtors Cash & Bank balances Loans & Advances Total Current Assets Sundry creditors Other liabilities & provisions Total Current Liabilities Net Current Assets Total Assets FY12* 348 26,991 27,339 17,042 (697) 43,684 52,450 37,240 15,211 967 25,352 5,033 1,811 4,590 5,178 16,612 10,815 1,067 14,458 2,154 43,684 FY13 348 38,088 38,436 8,967 (938) 46,465 59,403 41,584 17,819 1,333 22,033 5,305 3,147 3,694 7,333 19,478 10,707 1,050 14,198 5,280 46,465 FY14E 348 44,922 45,270 8,967 (938) 53,299 68,736 47,029 21,707 2,000 26,033 6,367 2,229 2,144 7,553 18,294 11,143 1,150 14,734 3,560 53,299 FY15E 348 53,967 54,316 5,859 (938) 59,236 78,736 53,297 25,439 4,000 25,033 7,030 2,460 2,928 8,339 20,757 12,302 1,250 15,993 4,764 59,236 FY16E 348 64,747 65,095 3,859 (938) 68,016 84,736 60,245 24,492 2,000 35,033 7,878 2,757 4,289 9,345 24,269 13,786 1,550 17,778 6,492 68,016

Source: Company, Centrum Research Estimates * Accounting year changed to June and hence, the data is for 15 months

Exhibit 9: Key Ratios

Y/E June Growth Metrics (%) Net Sales EBITDA Adj. Net Profit Profitability Metrics EBIT margin (%) EBITDA per Tonne (Rs) EBIT margin (%) Adj Net Profit margin (%) Return Ratios RoE (%) RoCE (%) RoIC (%) Turnover ratios (no of days) Inventory period Collection period Creditors period Net WC days Solvency Ratio D/E (x) Net D/E (x) Interest coverage (x) Current Ratio (x) Dividend DPS (Rs) Dividend yield (%) Dividend pay-out (%) Per share (Rs) Basic EPS- reported Basic EPS- adjusted FDEPS- reported FDEPS- adjusted CEPS BVPS Valuations Metrics P/E (x) Price/BV (x) EV/Sales (x) EV/EBITDA (x) M-Cap/Sales (x) EV/tonne (USD) FY12* 67.9 86.0 134.8 13.3 1,056 12.1 10.5 25.7 17.1 15.0 40 41 106 (19) 0.6 (0.5) 3.3 1.1 20.0 0.5 13.2 177.5 174.0 177.5 174.0 424.6 784.8 25.5 5.6 2.4 8.6 2.7 169.9 FY13 (3.6) (5.2) 65.5 20.1 1,091 20.0 17.9 30.5 22.4 19.2 34 47 84 10 0.2 (0.4) 5.8 1.4 20.0 0.5 8.1 288.2 287.9 288.2 287.9 412.9 1,103.3 15.4 4.0 2.5 8.8 2.8 164.7 FY14E 7.9 (6.5) (21.7) 15.2 890 16.3 13.0 18.8 14.7 13.6 40 47 85 9 0.2 (0.4) 6.5 1.2 25.0 0.6 13.0 225.4 225.4 225.4 225.4 381.7 1,299.5 19.7 3.4 2.2 9.3 2.6 145.4 FY15E 12.7 22.8 31.8 17.2 1,068 19.0 15.2 20.8 16.6 15.2 40 47 84 10 0.1 (0.4) 10.0 1.3 32.0 0.7 12.6 297.1 297.1 297.1 297.1 477.0 1,559.1 14.9 2.8 1.9 7.4 2.3 141.9 FY16E 11.5 13.4 18.3 17.7 1,310 20.2 16.2 20.5 16.6 15.6 40 47 82 11 0.1 (0.5) 14.5 1.4 36.0 0.8 12.0 351.5 351.5 351.5 351.5 550.9 1,868.6 12.6 2.4 1.6 5.8 2.0 125.8

Source: Company, Centrum Research Estimates * Accounting year changed to June and hence, the data is for 15 months

Exhibit 11: Cash flow

Y/E June (Rs mn) PBT & extraordinary Items Add: Depreciation Add: Interest Add: Others Cash from operating activities Trade receivables Inventories Trade payables Net changes - WC Interest Paid Direct taxes Paid Extraordinary Items Net cash from operating Capital expenditure Others Net Cash from investing Net free cash flows Debt change Dividend paid Net cash from financing Net change in cash Closing Cash Balance FY12* 7,001 8,731 2,354 (1,204) 16,882 (1,894) (991) 2,049 (836) (2,085) 87 (123) 13,924 (4,694) (12,395) (16,774) 9,186 1,428 (764) 2,767 (83) 4,904 FY13 FY14E FY15E FY16E 11,205 9,816 4,356 5,446 1,931 1,406 (1,831) (1,202) 15,662 15,466 (1,196) 697 (272) (1,063) 823 536 (644) 171 (2,236) (1,406) (2,410) (1,963) (11) 10,361 12,268 (8,935) (10,000) 5,259 (2,798) (2,697) (12,798) 1,390 2,268 (8,761) 0 (690) (1,019) (7,581) (1,019) 83 (1,549) 4,987 3,438 12,937 15,309 6,268 6,948 1,166 926 (1,277) (1,502) 19,093 21,680 (1,017) (1,303) (662) (848) 1,259 1,785 (421) (367) (1,166) (926) (2,587) (3,062) 14,920 17,326 (12,000) (4,000) 2,277 (8,498) (9,723) (12,498) 2,920 13,326 (3,108) (2,000) (1,304) (1,467) (4,412) (3,467) 784 1,360 4,222 5,582

Source: Company, Centrum Research Estimates * Accounting year changed to June and hence, the data is for 15 months

Source: Company, Centrum Research Estimates * Accounting year changed to June and hence, the data is for 15 months

Shree Cement

Appendix A
Disclaimer
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Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this report are organized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. Any such person shall be responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document. The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accented accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. 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. Centrum does not provide tax advice to its clients, and all investors are strongly advised to consult regarding any potential investment. Centrum and its affiliates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Foreign currencies denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the investment. In addition, investors in securities such as ADRs, the value of which are influenced by foreign currencies effectively assume currency risk. Certain transactions including those involving futures, options, and other derivatives as well as non-investment-grade securities give rise to substantial risk and are not suitable for all investors. Please ensure that you have read and understood the current risk disclosure documents before entering into any derivative transactions. This report/document has been prepared by Centrum, based upon information available to the public and sources, believed to be reliable. No representation or warranty, express or implied is made that it is accurate or complete. Centrum has reviewed the report and, in so far as it includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject to change without notice and have no obligation to tell you when opinions or information in this report change. This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the public media without the express written consent of Centrum. This report or any portion hereof may not be printed, sold or distributed without the written consent of Centrum.

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The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Neither Centrum nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to the press or other media and may not be reproduced or redistributed to any other person. The distribution of this report in other jurisdictions may be restricted by law and persons into whose possession this report comes should inform themselves about, and observe any such restrictions. By accepting this report, you agree to be bound by the fore going limitations. No representation is made that this report is accurate or complete. The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and are given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions, estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. Centrum and its affiliates have not managed or co-managed a public offering for the subject company in the preceding twelve months. Centrum and affiliates have not received compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for service in respect of public offerings, corporate finance, debt restructuring, investment banking or other advisory services in a merger/acquisition or some other sort of specific transaction. As per the declarations given by them, Mr. Sanjeev Kumar Singh, research analyst and and/or any of his family members do not serve as an officer, director or any way connected to the company/companies mentioned in this report. Further, as declared by him, he has not received any compensation from the above companies in the preceding twelve months. He does not hold any shares by him or through his relatives or in case if holds the shares then will not to do any transactions in the said scrip for 30 days from the date of release such report. Our entire research professionals are our employees and are paid a salary. They do not have any other material conflict of interest of the research analyst or member of which the research analyst knows of has reason to know at the time of publication of the research report or at the time of the public appearance. While we would endeavour to update the information herein on a reasonable basis, Centrum, its associated companies, their directors and employees are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent Centrum 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 Centrum policies, in circumstances where Centrum is acting in an advisory capacity to this company, or any certain other circumstances. Rating Criteria Buy: TP upside of >15% (>25% for stocks with market cap <Rs20bn) Hold: TP upside of between -15% and +15% (-25% to +25% for stocks with market cap <Rs20bn) Sell: TP downside of 15% or more (more than 25% for stocks with market cap of <Rs20bn)
Member (NSE, BSE, MCX-SX), Depository Participant (CDSL) and SEBI registered Portfolio Manager Registration Nos. CAPITAL MARKET SEBI REGN. NO.: BSE: INB011454239, NSE: INB231454233 DERIVATIVES SEBI REGN. NO.: NSE: INF231454233 (TRADING & SELF CLEARING MEMBER) CDSL DP ID: 12200.SEBI REGISTRATION NO.: IN-DP-CDSL-661-2012 PMS REGISTRATION NO.: INP000004383 MCX SX (Currency Derivative segment) REGN. NO.:INE261454230 Website: www.centrum.co.in Investor Grievance Email ID: investor.grievances@centrum.co.in Compliance Officer Details: Mr. Ashok Devarajan; Tel: (022) 4215 9000; Email ID: compliance@centrum.co.in

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Registered Office Address BombayMutualBuilding , 2nd Floor, Dr. D. N. Road, Fort, Mumbai - 400 001 Correspondence Address Centrum House 6th Floor, CST Road, Near VidyaNagariMarg, Kalina, Santacruz (E), Mumbai 400 098. Tel: (022) 4215 9000

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