Equity Research

September 13, 2019

INDIA
BSE Sensex: 37385
Dairy
ICICI Securities Limited
is the author and
distributor of this report
Takeaways from FY19 annual report of GCMMF (Amul)
Amul’s revenue growth was back to teens (13.4%) in FY19 after reporting the
revenue growth of just 8.1% in FY18, lowest in past decade. All consumer
Sector update products reported double-digit growth and, we believe, Amul gained market share
in almost all its segments. The company has continued to strengthen its moats in
the business, such as 1) Amul brand and sub brands like EPIC, Kool, Amulya, and
Heritage (BUY) tru , 2) distribution network of 1mn outlets, 3) strong connect with 3.6mn farmers,
1,000 and 4) 79 milk processing units pan-India. Management estimates the organised
800 industry to move from 27% now to 40% in next decade. It also believes the next
wave of growth will be from ‘out of home’ consumption and Amul has taken
600
(Rs)

multiple initiatives to gain the share of next wave of growth.

400
 Recovery in revenue growth: Amul has reported revenue growth of 13.4% in FY19.
200
Its revenue growth of 8.1% in FY18 was the slowest. We note Amul’s revenue growth
0
recovered in FY19 due to 1) 174% growth in exports (largely SMP) and 2) healthy
Sep-16

Sep-17

Sep-18

Sep-19
Mar-17

Mar-18

Mar-19

growth of 10.6% in domestic business. Volume growth was 12% in FY19. Amul has
introduced 101 new products in the past four years (two new launches every month).
Hatsun (HOLD)  Consumer products growing well: All value-added products of Amul have done
1,000 well in FY19. Revenue growth rates of key products were as follows: Cheese (17%),
800 cream (34%), paneer (23%), curd (33%), buttermilk (27%), chocolates (69%), butter
600 (14%) and ice cream (10%). Liquid milk (pouch) revenues were also up 5% YoY. We
(Rs)

400
believe Amul has gained market share in most consumer products.
200  Investments in strengthening moat: Amul has continued to invest aggressively in
0 strengthening the business moats: 1) Strong brand Amul, 2) network of 10,000
Sep-16

Sep-17

Sep-18

Sep-19

distributors with 1mn retail outlets, and 3) strong relationships with 3.6mn dairy
Mar-17

Mar-18

Mar-19

farmers. Amul has increased milk procurement outside Gujarat to 12.9% in FY19
from 8.2% in FY12. This will help reduce dependence on Gujarat and enable sale of
more fresh products outside Gujarat. The company also has 79 milk processing units
pan-India. Multiple units have helped to reduce freight cost and sell liquid milk and
fresh value-added products across India.
 Management expects steady long-term growth: Amul has indicated only 27% of
dairy industry is organised. Amul believes, as a market leader, it is responsible to
increase the share to 40% in the coming decade. It also believes that with only 35%
of Indian villages being covered under the dairy co-operative network, the promotion
of dairy co-operatives is the key to enhance farmers’ income levels as well as drive
growth of the organised sector.
Key financials of GCMMF (Amul)
Year to March FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Revenues (Rsmn) 116,680 137,351 181,435 207,504 229,851 270,625 292,463 331,943
Growth (%) 19.4 17.7 32.1 14.4 10.8 17.7 8.1 13.5
EBITDA (Rsmn) 565 541 688 1,113 1,510 1,447 1,683 2,214
Growth (%) 43.4 (4.3) 27.3 61.8 35.7 (4.2) 16.3 31.5
Research Analysts: PAT (Rsmn) 318 337 378 415 438 470 488 528
Aniruddha Joshi Growth (%) 16.2 5.8 12.3 9.9 5.4 7.4 3.7 8.3
anuruddha.joshi@icicisecurities.com EBITDA margin (%) 0.5 0.4 0.4 0.5 0.7 0.5 0.6 0.7
+91 22 6637 7249 PAT margin (%) 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Manoj Menon RoE (%) 16.1 15.5 15.8 14.7 12.8 11.9 11.3 11.4
manoj.menon@icicisecurities.com RoCE (%) 7.6 7.8 1.0 5.3 5.5 4.5 5.4 5.6
+91 22 6637 7209 Source: Company data, I-Sec research

Please refer to important disclosures at the end of this report

Dairy sector, September 13, 2019 ICICI Securities

Takeaways - FY19 annual report of GCMMF (Amul)

Our analysis of the FY19 annual report of GCMMF (Amul) leads us to various
interesting facts regarding 1) product-wise revenue growth rates, 2) efforts to
strengthen the moats, and 3) management’s vision of long-term growth.

Revenue growth back in teens in FY19

After reporting the weakest revenue growth of 8.1% in FY18, Amul’s revenue growth is
back in teens (13.4%) in FY19. It has reported revenue CAGR of 18.7% over FY07-19.
Key reasons for higher revenue growth in FY19 were 1) 174% growth in exports
(Mainly SMP) and 2) 10.6% growth in domestic business. The volume growth was
12% in FY19 indicating negligible price-led growth. The company has attributed its
healthy growth to fresh products such as curd, buttermilk and paneer.

The company has introduced 101 new products in the past four years. (~two products
every month).

Chart 1: Revenue growth back in teens in FY19

Revenues Growth (RHS)

350,000 35.0

300,000 30.0

250,000 25.0
(Rs mn)

(%)
200,000 20.0

150,000 15.0

100,000 10.0

50,000 5.0

- -
FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Source: Company data, I-Sec research

Product-wise revenue growth rates: We note all value-added products of Amul

reported healthy growth rates (>10%) in FY19. The key product ‘liquid milk in pouches’
reported 5% YoY revenue growth. Fresh value-added products such as dahi (curd),
buttermilk and paneer (cottage cheese) reported revenue growth of 33%, 27% and
23%, respectively.

Growth rates of other major dairy products were as follows: Cheese (17%), cream
(34%), butter (14%), ice cream (10%) and chocolates (69%). Considering market as
well as Amul growth rates, we believe, the company has gained market share in most
of its segments.

2
Dairy sector, September 13, 2019 ICICI Securities
Table 1: Product-wise revenue growth rates, YoY
Product FY18 FY19
Dairy commodities* (60.0)
Cheese 26.0 17.0
Milk based beverages 38.5
Cream 34.0 34.0
Paneer 21.0 23.0
Dahi (curd) 26.0 33.0
Buttermilk 21.0 27.0
Liquid milk 12.0 5.0
Infant milk food 11.0
Dairy whitener 11.5
Butter 17.0 14.0
Ice cream 15.0 10.0
Chocolates 69.0
Source: Company, I-Sec research *SMP

Rising milk collection of Amul and increase in procurement prices

Amul has reported 10.8% CAGR in milk procurement over FY07-19 but milk
procurement increased by 9.3% YoY in FY19. Interestingly, its milk procurement
outside Gujarat, which was growing faster than milk procurement in Gujarat reported
decline in FY19.

Milk procurement outside Gujarat declined 20%, YoY whereas milk procurement in
Gujarat increased 15.6%, YoY.

The company’s milk procurement (fats) price has also declined from Rs705/kg in FY18
to Rs690 in FY19, indicating decline of 2.1%.

Chart 2: Rising milk procurement by Amul… Chart 3: …and higher milk procurement prices

25 Gujarat Outside Gujarat 800

700
20
600
(mn ltrs/day)

500
(Rs/kg fat)

15
400
10 300

200
5
100

- 0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

Source: Company, I-Sec research

3
Dairy sector, September 13, 2019 ICICI Securities

Efforts to strengthen moats in the business

We note Amul is investing aggressively in creating and strengthening its competitive
advantages. The company has created three sturdy moats as 1) brands, 2) distribution
network, and 3) strong relationships with farmers. The company is also in the process
to de-risk the business model by focusing on milk procurement outside Gujarat.

Table 2: Key moats in the dairy business created by Amul

Moats Particulars
Amul - multiple milk & milk products
Amulya - Dairy whitener
Brands Amulspray - Infant food
Sagar – Ghee
Amul Masti – Curd
10,000 distributors
Distribution network
1mn retailors across India
Milk procurement network 3.6mn farmers
Milk processing plants 79 across India
Source: Company, I-Sec research

Healthy investments in brand building

Amul has continued to invest aggressively in brand building efforts. Its marketing
spends have increased at CAGR of 16.3% over FY07-19. Amul spends 2-3% of net
sales (~54% of gross profits) on brand building efforts.

Chart 4: Marketing spends as % of net sales Chart 5: Marketing spends as % of gross profits

57.0
3.5
56.0
3.0
55.0
2.5
54.0
2.0
53.0
(%)
(%)

1.5 52.0
1.0 51.0
0.5 50.0

- 49.0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

Source: Company, I-Sec research

Stronger distribution network

Apart from investing in product portfolio, Amul has created a strong distribution
network pan-India. It has 10,000 distributors which in turn cater to 1mn retail outlets.
The company runs four separate distribution networks for:

 Fresh products like milk, curd.

 Products that require ambient temperatures such as ghee, cream.
 Refrigerated products such as butter, cheese and chocolates.
 Frozen products like ice cream.

4
D
Dairy sector, September 13,
1 2019 ICICI Se
ecurities
Chart
C 3: Supply chain an
nd distributi on network of Amul

Source: Company
y, I-Sec research
h

5
Dairy sector, September 13, 2019 ICICI Securities
Plans to improve relationships with farmers
As direct milk procurement is the largest entry barrier/moat in the dairy industry, Amul
has focused aggressively on expanding relationships with farmers. We note Amul
procures milk from 3.6mn farmers across 18,559 villages. Apart from farmer education
and awareness programmes, Amul has invested in two key initiatives to strengthen
relationships with farmers. It provides organised animal feed as well as services of
artificial insemination and veterinary care.

Amul’s animal feed division has reported CAGR of 8.5% over FY08-19. Amul has also
resolved 4.3mn veterinary cases in FY19, up from 3.7mn in FY18.

Chart 6: Veterinary cases resolved by Amul Chart 7: Steady growth in animal feed sales

5.0 2.5

4.0 2.0

3.0 1.5
(mn)

(mn MT)
2.0 1.0

1.0 0.5

0.0 0.0
FY08

FY10

FY12

FY14

FY16

FY18

FY19

FY08

FY10

FY12

FY14

FY16

FY18

FY19
Source: Company, I-Sec research

Milk procurement outside Gujarat declined in FY19

In order to de-risk the business model as well as replicate the success in Gujarat,
Amul has entered other states in India to procure milk. We note Amul’s milk
procurement outside Gujarat was just 8.2% of total milk procurement in FY12.
However, it has increased to 12.9% in FY19. Steady increase in milk procurement
outside Gujarat will reduce the dependence on Gujarat and also help in selling more
fresh products out of Gujarat.

However, we note with higher availability of milk in Gujarat as well as subsidy

announcements by some states; Amul’s milk procurement outside Gujarat declined
20% in FY19 over FY18. We believe it to be a one-time issue and expect milk
procurement outside Gujarat to grow FY20 onwards.

6
Dairy sector, September 13, 2019 ICICI Securities
Chart 8: Milk procurement* outside Gujarat

20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19
Source: Company, I-Sec research *Milk procured outside Gujarat/ Total milk procurement

Management outlook over long-term growth potential

Amul has indicated only 27% of dairy industry is organised. Amul believes, as a
market leader, it has the responsibility to increase the share to 40% in the coming
decade. It also believes that with only 35% of Indian villages being covered under the
dairy co-operative network, the promotion of dairy co-operatives is the key to enhance
farmers’ income levels as well as drive growth of the organised sector.

Launch of new products

Amul has introduced multiple new variants over the past four years. It has also
introduced premium variants which will drive the overall realizations upwards. We also
note the trend of creating sub-brands such as EPIC, tru, and Kool.

Table 4: Launch of new products

Segment Brand
Dairy Whitener Amul T-Special Dairy whitener
Milk Amul Buffalo milk with A2 protein, Amul Gold milk, Amul Camel milk
Ghee Amul cow ghee
8 variants (Rajasthani, Gulkandi, Kashmiri, Kathiawadi, Nawabi, Rajwadi,
Kulfi Ratnagiri, Amul Kulfi)
Curd Amul Meetha dahi, Amul Mishti Doi
Flavored milk 4 variants (Amul tru - Apple, Lychee, Mango, Orange)
Cake Amul cake magic
Roti softner Amul roti softner
Pizza Amul pizza
Chocolates Multiple variants
Irish drink Amul Irish drink
Cold coffee Amul Kool café (3 variants)
Pina Colada Amul Pina Colada
Milk shake Amul Milk shake (Vanilla variant)
Premium ready to drink milk Amul Good milk
Ice cream Multiple variants
Mithai (Indian sweets) Multiple variants
Source: Company, I-Sec research

7
D
Dairy sector, September 13,
1 2019 ICICI Se
ecurities
Chart
C 5: New
w product lau
unches by A
Amul …1

Source: Company
y, I-Sec research
h

8
D
Dairy sector, September 13,
1 2019 ICICI Se
ecurities
Chart
C 6: New
w product lau
unches by A
Amul… 2

Source: Company
y, I-Sec research
h

9
Dairy sector, September 13, 2019 ICICI Securities
Chart 9: Key financial ratios of GCMMF (Amul)

Gross margin PAT margin

7.0 0.40

6.0 0.35

5.0 0.30
0.25
4.0

(%)
(%)

0.20
3.0
0.15
2.0
0.10
1.0
0.05
-
-
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
8,000 OCF FCF 18.0 RoE RoCE
16.0
6,000
14.0
4,000
12.0
(Rs mn)

2,000 10.0
(%)

8.0
0
6.0
(2,000)
4.0
(4,000) 2.0
-
(6,000)
FY08 FY10 FY12 FY14 FY16 FY18
FY07 FY09 FY11 FY13 FY15 FY17 FY19

600 PAT Growth (RHS)

45.0 10 Net working capital days

40.0
500 5
35.0
400 30.0
(Rs mn)

25.0 0
300
(days)
(%)

20.0
200 15.0 (5)
10.0
100
5.0 (10)
0 0.0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

(15)
FY07 FY09 FY11 FY13 FY15 FY17 FY19

Source: Company, I-Sec research

10
Dairy sector, September 13, 2019 ICICI Securities
Table 7: Profit & loss statement
(Rs mn)
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Gross Sales 97,825 116,767 137,520 181,715 207,809 230,170 271,016 292,618 331,943
Less: Excise Duty 84 87 168 280 304 319 392 155 -
Net Sales 97,741 116,680 137,351 181,435 207,504 229,851 270,625 292,463 331,943
Growth (%) 22.2 19.4 17.7 32.1 14.4 10.8 17.7 8.1 13.5
Expenditure
Cost of Goods Sold 93,230 111,395 130,558 173,120 197,732 219,043 258,198 279,116 316,447
Staff Cost 683 729 751 1,123 1,206 1,049 1,635 1,545 1,742
Manufacturing expenses 393 611 960 1,103 1,349 1,415 1,498 1,687 2,006
Marketing & selling expenses 2,486 2,843 3,816 4,512 5,142 5,914 6,913 7,429 8,378
Other Expenses 555 537 726 888 961 921 932 1,003 1,157
EBITDA 394 565 541 688 1,113 1,510 1,447 1,683 2,214
EBITDA margin (%) 0.4 0.5 0.4 0.4 0.5 0.7 0.5 0.6 0.7
Depreciation 251 407 361 659 799 871 883 944 1,248
EBIT 143 158 179 29 314 639 564 739 966
Interest Expense & Bank Exps 7 4 21 82 86 327 188 297 464
Other Income 240 305 341 629 406 355 340 307 297
Profit Before Tax 376 459 499 575 634 667 717 749 799
Income Taxes 102 140 162 197 218 230 246 262 271
Effective tax rate (%) 27.1 30.6 32.5 34.3 34.4 34.4 34.4 34.9 33.9
Profit After Tax 274 318 337 378 415 438 470 488 528
Source: Company data, I-Sec research

Table 8: Balance sheet

(Rs mn)
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Sources of Funds
Share Capital 1,000 1,000 1,000 1,000 1,500 1,900 2,401 2,401 2,401
Reserves and Surplus 930 1,095 1,279 1,504 1,692 1,855 1,983 2,111 2,638
Deferred Tax Liability (29) (34) (1) (4) (42) (87) (163) (119) (142)
Net Worth 1,901 2,062 2,278 2,500 3,151 3,668 4,221 4,392 4,897
Secured Loans 72 90 157 1,042 4,282 10,338 4,708 11,369 12,236
Unsecured Loans - - - - 848 1,085 1,276 1,263 451
Total Loans 72 90 157 1,042 5,130 11,422 5,984 12,633 12,686
Total 1,973 2,152 2,435 3,542 8,281 15,090 10,205 17,024 17,583
Application of Funds
Fixed Assets
Gross Block 4,452 5,233 6,230 7,794 8,583 10,081 10,896 12,451 16,031
Less: Depreciation 3,006 3,389 3,715 4,158 4,832 5,646 6,487 7,343 8,582
Net Block 1,447 1,845 2,515 3,636 3,751 4,435 4,409 5,109 7,450
Capital WIP 99 68 164 38 76 573 499 1,832 135
Gross Block-Brand value 4,452 5,233 6,230 7,794 8,583 10,081 10,896 12,451 16,031
Other Investments 7 7 7 7 1,553 1,568 1,682 713 844
Current Assets 4,021 9,957 12,212 12,089 17,882 23,244 19,992 29,318 39,582
Inventories 2,668 5,345 8,693 4,412 9,069 11,898 10,414 14,448 16,208
Sundry Debtors 316 564 1,127 932 1,371 2,089 2,269 3,415 5,427
Cash & Bank Balances 963 3,848 1,894 6,267 3,474 3,848 4,753 6,937 8,840
Loans & Advances 74 200 498 478 3,968 5,409 2,555 4,518 9,107
Current Liabilities 3,601 9,725 12,463 12,229 14,982 14,730 16,377 19,948 30,428
Liabilities 3,266 9,311 12,064 11,805 14,605 14,296 15,854 19,420 30,143
Provisions 336 414 399 424 377 435 523 527 285
Net Current Assets 420 232 (251) (140) 2,900 8,514 3,615 9,371 9,154
Total 1,973 2,152 2,435 3,542 8,281 15,090 10,205 17,024 17,583
Source: Company data, I-Sec research

11
Dairy sector, September 13, 2019 ICICI Securities
Table 9: Cashflow statement
(Rs mn)
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
OCF before W/C changes 496 684 717 930 1,205 1,210 1,268 1,582 1,704
W/c Changes (519) 3,050 (1,457) 4,365 (2,347) (3,106) 3,076 (1,287) 4,296
OCF After W/C Changes (23) 3,734 (740) 5,296 (1,142) (1,895) 4,344 294 6,000
Cash Flow from Investing
Capital Expenditure (291) (779) (1,209) (1,759) (1,009) (2,107) (1,047) (3,148) (1,776)
Disposal 2 1 78 102 18 10 20 37 2
Investments - - - - (1,600) (1,637) 2,499 (2,494) (3,778)
Acquisitions - - - - - - - - -
Net Cash used in Investing (289) (778) (1,131) (1,657) (2,591) (3,734) 1,473 (5,606) (5,553)
Cash Flow from Financing
Changes in Share Capital 250 0 0 0 500 400 500 - -
Changes in Loans (13) 18 68 884 3,780 5,764 (5,614) 6,208 (51)
Dividends & change in reserves (75) (90) (150) (150) (150) (213) (275) (341) (360)
Net Cash used in Financing 162 (71) (82) 734 4,130 5,951 (5,389) 5,866 (412)
Extraordinary Items - - - - - - - - -
Changes in Cash & Equivalents (150) 2,884 (1,953) 4,373 398 322 429 555 36
Opening Cash & Equivalents 1,113 963 3,848 1,894 1,609 2,007 2,329 2,758 3,312
Closing Cash & Equivalents 963 3,848 1,894 6,267 2,007 2,329 2,758 3,312 3,348
Free Cash Flow (312) 2,956 (1,871) 3,639 (2,133) (3,992) 3,318 (2,817) 4,225
Source: Company data, I-Sec research

Table 10: Ratio analysis

(Rs mn)
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Profitability Ratios (%)
Gross margin 4.6 4.5 4.9 4.6 4.7 4.7 4.6 4.6 4.7
EBITDA Margin 0.4 0.5 0.4 0.4 0.5 0.7 0.5 0.6 0.7
EBIT Margin 0.1 0.1 0.1 0.0 0.2 0.3 0.2 0.3 0.3
PBT Margin 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.2
PAT Margin 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Income Tax Rate 27.1 30.6 32.5 34.3 34.4 34.4 34.4 34.9 33.9
Excise Duty Rate 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1 -
RoE 16.1 16.1 15.5 15.8 14.7 12.8 11.9 11.3 11.4
RoCE 8.0 7.6 7.8 1.0 5.3 5.5 4.5 5.4 5.6

Growth rates (%)

Revenues 22.2 19.4 17.7 32.1 14.4 10.8 17.7 8.1 13.5
EBITDA 0.7 43.4 (4.3) 27.3 61.8 35.7 (4.2) 16.3 31.5
PAT 14.7 16.2 5.8 12.3 9.9 5.4 7.4 3.7 8.3

Major Costs as % of Net Sales

Cost of Goods Sold 95.4 95.5 95.1 95.4 95.3 95.3 95.4 95.4 95.3
Staff Cost 0.7 0.6 0.5 0.6 0.6 0.5 0.6 0.5 0.5
Manufacturing expenses 0.4 0.5 0.7 0.6 0.7 0.6 0.6 0.6 0.6
Marketing & selling expenses 2.5 2.4 2.8 2.5 2.5 2.6 2.6 2.5 2.5
Other Expenses 0.6 0.5 0.5 0.5 0.5 0.4 0.3 0.3 0.3

Turnover ratios (%)

Debtors Turnover ratio 0.3 0.5 0.8 0.5 0.7 0.9 0.8 1.2 1.6
Current Liabilities Turnover Ratio 3.3 8.0 8.8 6.5 7.0 6.2 5.9 6.6 9.1
Inventory Turnover Ratio 2.7 4.6 6.3 2.4 4.4 5.2 3.8 4.9 4.9
Fixed Assets Turnover Ratio 1.6 1.6 2.0 2.0 1.8 2.2 1.8 2.4 2.3

Other ratios (%)

Net debt/Equity (x) (0.5) (1.8) (0.8) (2.1) 0.5 2.1 0.3 1.3 0.8
FCF/EPS (114.0) 928.5 (555.8) 962.3 (513.3) (911.8) 705.4 (577.8) 800.5
OCF/Sales (0.0) 3.2 (0.5) 2.9 (0.6) (0.8) 1.6 0.1 1.8
Source: Company data, I-Sec research

12
 Dairy sector, September 13, 2019 ICICI Securities

“In case of industry/sector reports or a report containing multiple stocks, the rating/recommendation for a particular stock may be based on the last released stock
specific report for that company.”

This report may be distributed in Singapore by ICICI Securities, Inc. (Singapore branch). Any recipients of this report in Singapore should contact ICICI Securities,
Inc. (Singapore branch) in respect of any matters arising from, or in connection with, this report. The contact details of ICICI Securities, Inc. (Singapore branch) are
as follows: Address: 10 Collyer Quay, #40-92 Ocean Financial Tower, Singapore - 049315, Tel: +65 6232 2451 and email: navneet_babbar@icicisecuritiesinc.com,
Rishi_agrawal@icicisecuritiesinc.com.

"In case of eligible investors based in Japan, charges for brokerage services on execution of transactions do not in substance constitute charge for research reports
and no charges are levied for providing research reports to such investors."

New I-Sec investment ratings (all ratings based on absolute return; All ratings and target price refers to 12-month performance horizon, unless mentioned otherwise)
BUY: >15% return; ADD: 5% to 15% return; HOLD: Negative 5% to Positive 5% return; REDUCE: Negative 5% to Negative 15% return; SELL: < negative 15% return

ANALYST CERTIFICATION
I/We, Aniruddha Joshi, CA; Manoj Menon, MBA, CMA; 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. Analysts are not registered as research analysts by FINRA and are not associated persons of the
ICICI Securities Inc. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report
in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the 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 – INH000000990. ICICI Securities Limited SEBI
Registration is INZ000183631 for stock broker. ICICI Securities is a 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.
Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc
as opposed to focusing on a company's fundamentals and, as such, may not match with the recommendation in fundamental reports. Investors may visit icicidirect.com
to view the Fundamental and Technical Research Reports.
Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.
ICICI Securities Limited has two independent equity research groups: Institutional Research and Retail Research. This report has been prepared by the Institutional
Research. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating, target price of the Retail
Research.
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.
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.
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.
This report has not been prepared by ICICI Securities, Inc. However, ICICI Securities, Inc. 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.

13