You are on page 1of 10

Earnings Review - Q3 FY 15

29 January 2016

65, Braybrooke Place, Colombo 2, Sri Lanka


research@bartleetreligare.com, +94 11 5220200

BRS Research

The Lanka Hospital Corporation PLC (LHCL: LKR 55.00)


Up for a re-rating on higher margins in a defensive play: BUY

Head of Research - Nikita Tissera


Research Analyst - Ishanudeen Zohar

LHCL Q3 FY 2015 net profit grew 350% YoY to LKR 259mn recording an EPS of LKR 1.16. A
combination of higher occupancy coupled with cost efficiencies pushed this spike in performance. EBIT margins tripled to 16%YoY, with sliding admin expenses. GP margin was up to 58%
(from 54% YoY). Net revenue improved 14% YoY to LKR 1.4bn supported by higher inpatient
admissions during the period. The surgical unit, as the highest margin generator we believe
would continue its growth in the long run. We also believe the Govts plan to divest from the
venture would bring in some much needed liquidity to the share. Based on a free cash flow
valuation we have arrived at a target price of LKR 65 granting an upside of 18%. We upgrade
to BUY.
All figures in LKR' mn

2011

2012

2013

2014

2015E

2016E

2017E

Revenue

2,918

3,406

4,072

4,754

5,566

6,285

7,181

Revenue growth (%)

-7.6%

16.7%

19.6%

16.8%

17.1%

12.9%

Gross Profit

1,650

1,858

2,380

2,704

3,251

Gross Profit Margin (%)

56.5%

54.6%

58.5%

56.9%

58.4%

EBIT recurring

339

338

594

465

EBIT margin (%)

11.6%

9.9%

14.6%

9.8%

Profit attributable to equity holders


BRS EPS (LKR)

437

387

675

466

Trading Snapshot
Market cap (LKR mn)

12,305

Market cap (USD mn)

86

Outstanding equity shares (mn)

224

Public Holding (%) - Sep'15

16.73%

52-week High/Low (LKR)

62.50/39.50

YTD ASPI return (%)

-8.04%

14.3%

YTD Stock return (%)

-8.79%

3,727

4,271

Beta

59.3%

59.5%

897

1,154

1,346

16.1%

18.4%

18.7%

896

1,049

1,212

1.00

Valuation Summary
CMP (LKR)

55.00

Intrinsic value (LKR)

64.85

DPS (LKR)

1.00

1.95

1.73

3.02

2.08

4.00

4.69

5.42

NAV per share (LKR)

14.94

16.15

18.09

19.63

22.54

26.23

30.65

Target price based on Total return

P/E (x)

4.4 x

22.7 x

13.4 x

23.1 x

13.7 x

11.7 x

10.1 x

Valuation method

P/BV (x)

0.6 x

2.4 x

2.2 x

2.4 x

2.4 x

2.1 x

1.8 x

Return %

ROE %
ROCE %

14.4%
10.8%

11.1%
9.5%

17.6%
15.0%

11.0%
10.6%

19.0%
18.3%

19.2%
20.5%

19.1%
20.6%

Rating

EBIT grew 276% YoY to LKR 223mn


A ~23% YoY decline in other operating expenses led to a hike in EBIT growth and margin during
the period. we forecast EBIT to grow 93.1% YoY in FY 2015E and 28.7% YoY in FY 2016E. The
increase in number of surgeries, which is the highest margin generator and curbing expenses,
assisted in LHCL achieving a better than expected bottom line during the period. Rising per
capita income and an increase in medical insurance penetration will be key for the hospital to
maintain a similar performance during the forecast period.
Valuation 20% total upside on CMP
Given the healthy cash position and a zero geared balance sheet we believe LHCL is well positioned to expand its presence in private healthcare industry. Based on a free cash flow valuation we have arrived at a total return of LKR 65.85 which reflects an upside of 20% to CMP. On
relative valuation LHCL is trading at a forward PER of 13.7x based on an EPS of LKR 4.00 in
2015E. The healthcare sector trades at a PER of 28.5x.
For analyst certification and other important disclosures, please refer to the Disclosure and
Disclaimer section at the end of this report.

DCF valuation
19.7%
BUY

LHCL Price Vs ASPI Movement

Source: Company data and BRS Equity Research

Healthy performance in heart centre and cost efficiency pushed bottom line
Higher occupancy rates during the quarter and margins generated from surgical segment
boosted NP margin to 18.8% from 4.7% previously. LHCL enjoyed an occupancy rate of 98% in
Q3 FY 2015 and we forecast it to remain at current levels given a rapid increase in Non communicable Disease (NCD) in the country. Surgical, the highest margin generator for the hospital
contributed 52% to the top line and we expect this segment to continue to drive the hospitals
performance going forward. The drop in admin cost by 1.6% YoY to LKR 593mn reflects the cost
efficiency strategies implemented by the newly appointed management. We expect these
strategies to pay off dividends for the hospital in the long run, giving a competitive edge over
its peers.

65.85

ASPI

ASPI

LHCL

LKR
70

7,500

60
7,000
50
6,500

40

6,000

30

Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16

EPS
LKR
6.00
5.00
4.00
3.00
2.00
1.00
2011

2012

2013

2014 2015E 2016E 2017E

Page 1

Company Information Note


65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

29 January 2016

The Lanka Hospital Corporation PLC (LHCL)


Company profile
The Lanka Hospitals Corporation PLC (LHCL) is
a multi speciality tertiary care hospital indirectly owned by the Government of Sri Lanka,
focusing on providing affordable healthcare.
Cardiology, Fertility and Kidney transplants
are fast becoming specialty areas of the hospital.
Revenue LKR mn % Growth (2011-17E)
7,181

14%
13%
17%
17%
20%
2,918

17%

2011

2012

2013

2014

2015E

2016E

2017E

2017E

Gross Profit LKR mn % Growth (2011-17E)


4,271

15%
15%
20%
14%
28%
13%
1,650

2011

2012

2013

2014

2015E

2016E

2017E

2017E

Recurring EBIT LKR mn % Growth (2011-17E)


17%

1,346

29%
93%

339

-0.4%

2011

2012

EBITDA
margin %

76%

-22%

2013

2014

EBITDA margin (%)

2015E

2016E

2017E

EBIT margin (%)

2017E

EBIT margin
%

24.0%

22.0%

22.0%

20.0%
18.0%

20.0%

16.0%

18.0%

14.0%
12.0%

16.0%

10.0%

14.0%

8.0%
2011 2012 2013 2014 2015E 2016E 2017E

Year Ending 31 Dec


Summary Information
BRS EPS (LKR)
BRS EPS growth (%)
P/E (x)
Sector P/E (x)
Reported EPS (LKR)
P/E on reported EPS (x)
NAV per share (LKR)
P/BV (x)
Sector P/BV (x)
DPS (LKR)
Dividend yield (%)
FCFF (LKR mn)
FCFE (LKR mn)
CFPS (LKR)
P/CFPS (x)
Mkt price
Weighted average shares (mn)
Average mkt cap (LKR mn)
Enterprise value (LKR mn)
EV/Sales
EV/EBITDA
Income Statement (LKR mn)
Revenue
Gross Profit
EBITDA recurring
Depreciation and amortisation
EBIT recurring
Finance cost
Exceptionals/non-recurrings
Tax expense
Net income
Minorities & preference dividends
Profit attributable to equity holders
Statement of Financial Position (LKR mn)
Cash and cash equivalents
Inventories
Trade receivables
Fixed assets
Goodwill
Intangible assets
Investments
Associates
Total assets
Trade payables
Interest bearing debt -short term
Interest bearing debt -long term
Total liabilities
Shareholders equity
Minorities
Total equity
Net debt (cash)
Total capital employed
Cash flow (LKR mn)
Cash flow from operations
Net working capital
Capital expenditure
Free cash flow
Investing cash flows
Equity capital
Dividends paid
Net borrowings
Net cash flow
Key ratios
Revenue growth (%)
EBIT growth (%)
Gross Profit Margin (%)
EBITDA margin (%)
EBIT margin (%)
ROCE %
ROE %
Debt/equity (%)
Net debt/equity (%)
Gearing (%)
Interest cover (x)
Payout ratio (%)

2011

2012

2013

2014

2015E

2016E

2017E

1.95
44.3%
4.4 x
34.4 x
1.95
4.4 x
14.94
0.6 x
2.1 x
0.0%
257.34
238.51
1.12
7.6 x
8.50
223.73
1,902
1,313
0.4 x
2.3 x

1.73
-11.4%
22.7 x
14.8 x
1.73
22.7 x
16.15
2.4 x
2.3 x
0.50
1.3%
328.76
328.76
1.35
29.1 x
39.20
223.73
8,770
7,879
2.3 x
13.3 x

3.02
74.4%
13.4 x
16.3x
3.08
13.1 x
18.09
2.2 x
2.5 x
2.00
4.9%
359.79
359.79
0.17
239.4 x
40.50
223.73
9,061
8,132
2.0 x
10.0 x

2.08
-31.0%
23.1 x
14.8 x
2.06
23.3 x
19.63
2.4 x
2.8 x
1.00
2.1%
(72.81)
(72.81)
(0.31)
nm
48.00
223.73
10,739
9,944
2.1 x
14.1 x

4.00
92.4%
13.7 x
na
na
na
22.54
2.4 x
na
1.00
1.8%
853.18
853.18
2.67
20.6 x
55.00
223.73
12,305
10,918
2.0 x
9.3 x

4.69
17.1%
11.7 x
na
na
na
26.23
2.1 x
na
1.00
1.8%
989.78
989.78
3.70
14.9 x
55.00
223.73
12,305
10,090
1.6 x
7.1 x

5.42
15.6%
10.1 x
na
na
na
30.65
1.8 x
na
1.00
1.8%
1,082.48
1,082.48
4.11
13.4 x
55.00
223.73
12,305
9,170
1.3 x
5.6 x

2,918
1,650
561
(222)
339
(3)
59
437
437

3,406
1,858
593
(255)
338
(1)
(53)
387
387

4,072
2,380
815
(221)
594
2
(67)
675
675

4,754
2,704
708
(243)
465
(4)
(68)
466
466

5,566
3,251
1,169
(272)
897
(0)
(126)
896
896

6,285
3,727
1,427
(273)
1,154
(185)
1,049
1,049

7,181
4,271
1,625
(278)
1,346
(214)
1,212
1,212

672
145
245
2,825
4,009
311
82
665
3,344
3,344
(589)
3,426

1,002
149
260
2,818
1
4,366
340
111
753
3,613
3,613
(891)
3,723

1,064
176
472
3,233
6
5,096
551
135
1,049
4,047
4,047
(929)
4,182

995
310
549
3,589
9
5,610
566
199
1,217
4,393
4,393
(795)
4,592

1,557
338
645
3,699
63
6,421
676
170
1,377
5,043
5,043
(1,387)
5,213

2,384
381
726
3,745
63
7,439
761
170
1,571
5,869
5,869
(2,215)
6,038

3,305
435
831
3,831
63
8,620
870
170
1,762
6,858
6,858
(3,135)
7,027

522
1
(268)
254
(248)
(23)
251

579
(250)
329
(165)
(112)
302

777
(417)
360
(292)
(447)
38

531
(604)
(73)
(552)
(112)
(69)

1,099
(245)
853
(237)
(336)
598

1,304
(314)
990
(253)
(224)
828

1,442
(359)
1,082
(298)
(224)
920

-7.6%
16.7%
56.5%
19.2%
11.6%
10.8%
14.4%
2.5%
-17.6%
2.4%
104.4 x
0.0%

16.7%
-0.4%
54.6%
17.4%
9.9%
9.5%
11.1%
3.1%
-24.7%
3.0%
na
28.9%

19.6%
75.6%
58.5%
20.0%
14.6%
15.0%
17.6%
3.3%
-23.0%
3.2%
na
66.3%

16.8%
-21.7%
56.9%
14.9%
9.8%
10.6%
11.0%
4.5%
-18.1%
4.3%
na
48.0%

17.1%
93.1%
58.4%
21.0%
16.1%
18.3%
19.0%
3.4%
-27.5%
3.3%
na
25.0%

12.9%
28.7%
59.3%
22.7%
18.4%
20.5%
19.2%
2.9%
-37.7%
2.8%
na
21.3%

14.3%
16.6%
59.5%
22.6%
18.7%
20.6%
19.1%
2.5%
-45.7%
2.4%
na
18.5%

Page 2
Source: LHCL Annual Reports and BRS Equity Research

BRS Equity Research

Q3 FY 15 Performance

Q3 FY 15

Q3 FY 14

Q2 FY 15

Revenue

1,381

1,215

1,348

YoY growth (%)

13.6%

24.9%

26.9%

QoQ growth (%)

2.5%

14.4%

3.6%

Recurring Net profit

259

58

209

BRS EPS as adjusted (LKR)

0.93

0.26

0.93

YoY growth (%)

350.4%

-52.9%

191.5%

QoQ growth (%)

24.1%

-19.7%

28.1%

NAV per share (LKR)

22.36

19.29

21.20

ROCE %

16.9%

21.2%

13.9%

ROE %

17.7%

11.6%

13.8%

Net debt/equity (%)

-29.1%

-17.0%

-22.7%

3.3%

4.4%

5.4%

8.7

8.5

6.5

41.1

82.3

30.2

All figures in LKR mn

Gearing (%)
EV/Sales
EV/EBITDA

Valuation estimates

Based on a free cash flow valuation we have arrived at a target price of LKR 64.85. Our
valuations are based on the following estimates.

WACC 13.1%
Terminal Growth rate 3%
Risk-free rate 9.60% (Five year bond rate)
Beta 1
Equity risk premium 5%

www.bartleetreligare.com

Page 3

BRS Equity Research

Sensitivity of Target Price to Risk Free Rate

Risk free rate - 5 year treasury bond rate


64.85

7.88%

8.38%

9.60%

9.38%

9.88%

Terminal

2%

69.40

66.96

61.71

62.59

60.63

growth rate

3%

73.77

70.91

64.85

65.86

63.61

4%

79.26

75.84

68.67

69.86

67.23

Peer Comparison
Relative Valuations
Peer Companies

CHL

NHL

ASIR

AMSL

LHCL *

8.13

0.08

1.34

0.67

3.68

96.28

2.78

5.94

6.41

22.36

11.2 x

37.5 x

17.1 x

17.9 x

14.9 x

0.9 x

1.1 x

3.9 x

1.9 x

2.5 x

8.59

9.20

57.63

40.46

29.40

11.4%

12.0%

14.7%

9.7%

16.9%

9.5%

3.1%

16.4%

10.7%

17.7%

91.30

3.00

22.90

12.00

55.00

TTM Earnings Per Share (EPS) LKR


2015-16

Latest Net Asset Value (NAV) LKR


2015-16

Price-to-Earnings (x)
2015-16

Price-to-Book (x)
2015-16

EV/No of Rooms (x)


2015-16

ROCE (%)
2015-16

ROE (%)
2015-16

MPS (LKR)
29.01.2016

* LHCL's financial year ends on 31st Dec.

www.bartleetreligare.com

Page 4

BRS Equity Research

Financial Analysis
Income Statement - The Lanka Hospitals Corporation PLC
Year Ending 31st Dec (LKR mn)

2011

2012

2013

2014

2015E

2016E

2017E

Revenue

2,918

3,406

4,072

4,754

5,566

6,285

7,181

YoY growth %

-7.6%

16.7%

19.6%

16.8%

17.1%

12.9%

14.3%

Cost of Services Rendered

(1,268)

(1,548)

(1,692)

(2,050)

(2,315)

(2,559)

(2,910)

Gross Profit

1,650

1,858

2,380

2,704

3,251

3,727

4,271

Gross Profit margin %

56.5%

54.6%

58.5%

56.9%

58.4%

59.3%

59.5%

YoY growth %

17.7%

12.6%

28.1%

13.6%

20.2%

14.6%

14.6%

23

25

30

53

41

40

40

Total SG & A expenses

(1,333)

(1,546)

(1,815)

(2,297)

(2,396)

(2,612)

(2,965)

YoY growth %

18.4%

15.9%

17.4%

26.6%

4.3%

9.0%

13.5%

Other operating Income

Total depreciation and amortisation

(222)

(255)

(221)

(243)

(272)

(273)

(278)

EBIT including non-recurring items

339

337

595

461

897

1,154

1,346

Non-recurring items

(1)

(4)

(0)

EBIT excluding non-recurring items

339

338

594

465

897

1,154

1,346

YoY growth %

16.7%

-0.4%

75.6%

-21.7%

93.1%

28.7%

16.6%

EBIT margin %

11.6%

9.9%

14.6%

9.8%

16.1%

18.4%

18.7%

561

593

815

708

1,169

1,427

1,625

YoY growth %

14.3%

5.7%

37.4%

-13.1%

65.2%

22.1%

13.8%

EBITDA margin %

19.2%

17.4%

20.0%

14.9%

21.0%

22.7%

22.6%

Finance income

42

102

148

69

125

80

80

Finance Cost

(3)

378

440

742

534

1,022

1,234

1,426

24.7%

16.4%

68.6%

-28.0%

91.4%

20.8%

15.6%

59

(53)

(67)

(68)

(126)

(185)

(214)

437

387

675

466

896

1,049

1,212

YoY growth %

44.3%

-11.4%

74.4%

-31.0%

92.4%

17.1%

15.6%

NP Margin

15.0%

11.4%

16.6%

9.8%

16.1%

16.7%

16.9%

EBITDA excluding non-recurring items

Recurring profit before tax


YoY growth %
Income tax expense
Recurring Profit After Taxation

Earnings per share - BRS adjusted (1)

1.95

1.73

3.02

2.08

4.00

4.69

5.42

Earnings per share - unadjusted (2)

1.95

1.73

3.02

2.06

4.00

4.69

5.42

Source: Company Financial Reports and BRS Equity Research


Note 1: EPS adjusted for share split, consolidations and non recurring information
Note 2: Based on earnings as reported (unadjusted for non-recurring) share data adjusted for splits
www.bartleetreligare.com

Page 5

BRS Equity Research

Financial Analysis
Statement of Financial Position - The Lanka Hospitals Corporation PLC
As at 31st Dec

2011

2012

2013

2014

2015E

2016E

2017E

2,825

2,817

3,226

3,580

3,636

3,682

3,767

63

63

63

Non Current Assets


Property, plant and equipment
Intangible Assets

Advance lease premium

120

134

148

162

175

189

203

2,945

2,952

3,380

3,750

3,874

3,934

4,034

Inventories

145

149

176

310

338

381

435

Trade and other receivables

245

260

472

549

645

726

831

Current Assets

Amounts due from related parties

14

16

672

1,002

1,064

995

1,445

2,272

3,193

1,064

1,414

1,716

1,860

2,434

3,393

4,474

4,009

4,366

5,096

5,610

6,309

7,328

8,508

Share Capital

2,672

2,672

2,672

2,672

2,672

2,672

2,672

Retained earnings

(203)

96

355

731

1,227

2,053

3,042

3,344

3,613

4,047

4,393

4,931

5,757

6,746

43

52

67

105

124

138

151

Cash and cash equivalents

Total assets
Equity and liabilities

Total Equity
Non-Current Liabilities
Retirement benefit obligations
Interest bearing borrowings

Deferred tax liabilities

225

246

278

294

332

332

332

268

297

345

399

456

470

483

311

340

551

566

676

761

870

14

49

70

163

232

Current Liabilities
Trade and other payables
Amounts due to related parties
Income tax payable

Dividend Payable

Interest bearing borrowings (Bank OD)

Total liabilities
Total equity and liabilities

82

111

135

199

170

170

170

398

456

704

819

922

1,101

1,280

665

753

1,049

1,217

1,377

1,571

1,762

4,009

4,366

5,096

5,610

6,309

7,328

8,508

Source: Company Financial Reports and BRS Equity Research


www.bartleetreligare.com

Page 6

BRS Equity Research

Financial Analysis
Statement of Cash flow - The Lanka Hospitals Corporation PLC
As at 31st Dec

2011

2012

2013

2014

2015E

2016E

2017E

EBIT including non-recurring items

339

337

595

461

897

1,154

1,346

Depreciation

222

255

220

241

267

268

273

Cash flow from operating activity

Amortisation of advance lease premium


Amortisation of government grants

Amortisation of Intangible Assets

profit/loss on sale of Property,plant and Equipment

(2)

Provision/(reversal of provision) for inventories

Provision/(reversal of provision) for doubtful debts

Provision for obsolete stocks

Gratuity

13

Other

10

18

33

14

31

22

22

Operating Profit/(loss) before Working Capital Changes

582

612

838

756

1,206

1,449

1,647

Changes in working capital

(59)

(8)

(28)

(206)

(81)

(46)

(51)

Cash generated from operations

523

604

810

550

1,126

1,404

1,596

Finance cost paid

(1)

Gratuity paid

(1)

(9)

(5)

(4)

(13)

(8)

(9)

Income taxes paid

(16)

(28)

(15)

(14)

(92)

(145)

522

579

777

531

1,099

1,304

1,442

(268)

(250)

(417)

(604)

(245)

(314)

(359)

Cash generated from operations


Cash flow from investing activity
Acquisition of Property, plant and equipment
Purchases of intangible assets

(1)

(6)

(4)

(36)

Disposal of property, plant & equipment

Advance lease premium paid

(19)

(19)

(19)

(19)

(19)

(19)

(19)

Interest income

39

102

148

69

61

80

80

(248)

(165)

(292)

(552)

(237)

(253)

(298)

(8)

Repayment of Syndicate loan

(15)

Dividend paid

(112)

(447)

(112)

(447)

(224)

(224)

Net cash flow from financing activities

(23)

(112)

(447)

(48)

(375)

(224)

(224)

Net Increase/(Decrease) in Cash & Cash Equivalents

251

302

38

(69)

487

828

920

Net cash out flow from investing activities


Cash flow from financing activity
Repayment of NDB loan

Source: Company Financial Reports and BRS Equity Research


www.bartleetreligare.com

Page 7

BRS Equity Research

Top 20 Shareholders as of 30.09.2015

Shareholder

No. of Shares

% holding

Sri Lanka Insurance Corporation Ltd - Life Fund

66,097,350

29.54

Fortis Global Healthcare Holdings Pte Ltd

64,120,915

28.66

Sri Lanka Insurance Corporation Ltd - General Fund

56,080,643

25.07

Property Development PLC

21,329,000

9.53

HSBC INTL NOM LTD - BBH - Grandeur Peak Emerging Markets Opportunities Fund

1,640,200

0.73

Bank of Ceylon A/c Ceybank Unit Trust

1,178,731

0.53

Bank of Ceylon A/a Ceybank Century Grwoth Fund

559,690

0.25

Ceylon Investment PLC A/c # 01

448,000

0.20

Carlines Holdings (Private) Limited

380,000

0.17

10

Mr. T.L.M. Imtiaz

280,820

0.13

11

Mr. H.W.M.Woodward

220,300

0.10

12

Mr. A.H Munasinghe

179,471

0.08

13

Ms.F.A.A Mack

175,800

0.08

14

Life Insurance Corporation (Lanka) Ltd

159,379

0.07

15

Dr.S.M.T.B. Samarakoon

151,656

0.07

16

Mr.M.R.Rasheed

146,776

0.07

17

Mr.W.W.B.R.V.Wijekoon

124,289

0.06

18

Mr.M.R.Rasheed

123,852

0.06

19

Mr.B.M.G.Rathnasiri

120,733

0.05

20

Dr.D.Rajakanthan

115,000

0.05

Source: Company interim financial statements

www.bartleetreligare.com

Page 8

BRS Equity Research

DISCLAIMER
Important Disclosures
This report was prepared by Strategic Research Limited for clients of Bartleet Religare Securities.
Special Disclosures
Special Disclosures for certain additional disclosure statements (if applicable).
Intended Recipients
This report is intended only for the use of the individual or entity named above and may contain information that is confidential and privileged. It is intended only
for the perusal of the individual or entity to whom it is addressed and others who are authorized to receive it. If you are not the intended recipient of this report,
you are hereby on notice that any disclosure, dissemination, distribution, copying or taking action relying on the contents of this information is strictly prohibited
and illegal.
BRS, is not liable for the accurate and complete transmission of the information contained herein nor any delay in its receipt. If you have received this email in
error, please notify us immediately by return email and please destroy the original message
This report is not intended for citizens (individual or corporate) based in the United States of America.
Analyst Certification
Each of the analysts identified in this report certifies, with respect to the companies or securities that the individual analyses, that the views expressed in this report
reflect his or her personal views about all of the subject companies and all of the securities and No part of his or her compensation was, is or will be directly or
indirectly dependent on the specific recommendations or views expressed in this report. If the lead analyst holds shares of the coverage; that will be listed here.
Stock Ratings
Recommendation
Expected absolute returns (%) over 12 months
Buy
More than 10%
Hold
Between 10% and 0
Sell
Less than 0%
Expected absolute returns are based on the share price at market close unless otherwise stated. Stock recommendations are based on absolute upside (downside)
and have a 12-month horizon. Our target price represents the fair value of the stock based upon the analysts discretion. We note that future price fluctuations
could lead to a temporary mismatch between upside/downside for a stock and our recommendation.
General Disclaimers

This report is strictly confidential and is being furnished to you solely for your information purposes.
The information, tools and material presented in this report are not to be used or considered as an offer or solicitation of an offer to sell or to purchase
or subscribe for securities.
SRL has not taken any measures to guarantee in any way that the securities referred to herein are suitable investments for any particular investor. SRL
will not under any circumstance, consider recipients as its customers by virtue of them receiving the report. The investments or services contained or
referred to in this report may not be suitable for you and it is highly recommended that you consult an independent investment advisor if you are in
any doubt about such investments or related services.
Further, nothing in this report constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or
appropriate to your individual circumstances, investment needs or otherwise construes a personal recommendation to you.
Information and opinions presented herein were obtained or derived from sources that SRL believes to be relied upon, but SRL makes no representations or warranty, express or implied, as to their accuracy or completeness or correctness.
SRL accepts no liability whatsoever for any loss arising from the use of the material presented in this report.
This report is not to be relied upon as a substitute for the exercise of independent judgment. SRL may have issued, and may in the future issue, a
trading call regarding this security. Trading calls are short term trading opportunities based on market events and catalysts, while stock ratings reflect
investment recommendations based on expected absolute return over a 12-month period as defined in the disclosure section. Because trading calls
and stock ratings reflect different assumptions and analytical methods, trading calls may differ directionally from the stock rating.
Past performance should not be taken as any indication or guarantee of future performance, and no representation or warranty, express or implied, is
made regarding future performance.
Information, opinions and estimates contained in this report reflect a judgment of its original date of publication by SRL and are subject to change
without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The
value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of
such securities.
SRL may or may not seek to do business with companies covered in our research report. As a result, investors should be aware that the firm may have
a conflict of interest that could affect the objectivity of research produced by SRL. Investors should consider our research as only a single factor in
making their investment decision.

Any reference to a third party research material or any other report contained in this report represents the respective research organization's estimates and views
and does not represent the views and opinions of SRL. SRL, its officers and employees do not accept any liability or responsibility whatsoever with respect to the
accuracy or correctness of such information. Further, SRL has included such reports or made reference to such reports in good faith (bona fide).

www.bartleetreligare.com

Page 9

Bartleet Religare Securities (Pvt) Ltd


www.bartleetreligare.com

BRS Equity Research - research@bartleetreligare.com

Page 10