India I Equities

Jamna Auto

Vijay Sarthy T S
Research Analyst
+9122 6626 6569
vijaysarthy@rathi.com

Mayank Agarwal
mayanakagarwal@rathi.com

14 February 2018
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Jamna Auto Industries Auto
14 February 2018

Springing for growth

Rating Buy An undisputed leader in the OEM segment, Jamna Auto’s OEM business is expected to grow in line with OEM
growth and we expect gradual upswing in parabolic springs.
Target price `96
After hitting its target of 33% revenue from new products (parabolic springs, lift axels and air suspensions), the
Share price `79
company plans to diversify its market and aims at 33% revenue from the domestic after-market, export after-market
and original equipment exports in the next 4-5 years.

Key data JMNA IN /JMNA.BO It aims to bring its breakeven volume level to 33% in the next three years (from 50% now) through operational
efficiencies and market diversification. We believe that, in the next three years, the margin will expand 200bps from
52-week high / low `91 / `36 FY17’ss 14.1%.
FY17
Sensex / Nifty 34156 / 10501
Backed by a widening distribution network, more tie-ups with retailers and garage personnel, OEM growth and
3-m average volumes $5.2m aftermarket exports, we expect revenue to clock a 15% CAGR over FY17-20 to `19.64bn. Because of this growth
Market cap `32bn / $493m and cost efficiencies, we expect the EBITDA margin to expand from the current 12.3% to 15% by FY20.
Shares outstanding
Accordingly, we expect earnings to register an 18% CAGR to `1.73bn leading to an EPS of `4.35.
398m
Valuation. The stock trades at 21x FY19e EPS and 18x FY20e EPS. We initiate coverage with a Buy, and a price
target of `96, assigning 22x FY20e EPS. Risks. Steep decline in M&H CV growth, delay in expanding its dealer
network in the replacement market .
Shareholding (%) Dec’17 Sep’17 Jun’17
Promoters 47.9 47.9 47.9 Financials ((YE Mar)) FY16 FY17 FY18e FY19e FY20e
- of which Pledged 7.3 8.8 9.6 Sales (` m) 12,558 12,995 15,304 17,212 19,644
Free float 52.1 52.1 52.1 Net profit (` m) 715 1,047 988 1,489 1,732
- Foreign inst. 6.0 4.5 5.4 EPS (`) 1.8 2.6 2.5 3.7 4.3
- Domestic inst. 5.7 5.8 3.8 PE (x) 43.3 30.0 31.8 21.1 18.1
- Public 40 41.8 42.9 EV / EBITDA (x) 19.3 17.4 16.5 12.0 10.2
PBV (x) 13.0 9.4 7.9 6.3 5.1
RoE (%) 33.0 36.4 27.0 33.2 31.1
RoCE (%) 34.6 35.5 25.1 30.3 31.1
Dividend yield (%) 1.1 0.9 1.0 1.6 1.8
Net debt / equity (x) 0.0 0.1 0.2 -0.1 -0.2
Source: Company, Anand Rathi Research
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 Quick Glance – Financials and Valuations
Income statement (` m) Balance sheet (` m)
Year-end: Mar FY16 FY17 FY18e FY19e FY20e Year-end: Mar FY16 FY17 FY18e FY19e FY20e
Net revenue (` m) 12,558 12,995 15,304 17,212 19,644 Share capital 397 398 398 398 398
Growth (%) 14.7 3.5 17.8 12.5 14.1 Net worth 2,425 3,331 3,992 4,990 6,151
Direct costs 8,867 9,022 10,825 11,761 13,423 Total debt 98 623 836 0 0
SG&A 2,059 2,142 2,523 2,871 3,277 Minority interest 0 0 0 0 0
EBITDA 1 632
1,632 1 830
1,830 1 957
1,957 2 579
2,579 2 944
2,944 DTL / (assets) 57 -32
32 - - -
EBITDA margin (%) 13.0 14.1 12.8 15.0 15.0 Capital employed 2,580 3,921 4,828 4,991 6,151
- Depreciation 452 478 551 582 599 Net tangible assets 2,100 2,832 2,988 2,607 2,207
Other income 83 239 160 130 130 Net intangible assets 6 8 7 7 7
Interest expenses 203 148 155 - - Goodwill
Extraordinaryy items -10 - - - - CWIP (tang. & intang.) 655 199 - - -
PBT 1,050 1,444 1,411 2,128 2,475 Investments (strategic)
Effective tax rate (%) 32 27 30 30 30 Investments (financial) - 5 5 5 5
+ Associates / (minorities) - - - - - Current assets (ex cash) 1,998 2,364 3,546 3,827 4,240
Net Income 715 1,047 988 1,489 1,732 Cash 80 145 28 366 1,492
Adjusted income 725 1,047 988 1,489 1,732 Current liabilities 2,259 1,632 1,745 1,821 1,799
WANS 398 398 398 398 398 Working capital -261 732 1 801
1,801 2 007
2,007 2 441
2,441
FDEPS (` / sh) 1.8 2.6 2.5 3.7 4.35 Capital deployed 2,580 3,921 4,828 4,991 6,151

Cash-flow statement (` m) Ratio analysis

Year-end: Mar FY16 FY17 FY18e FY19e FY20e Year-end: Mar FY16 FY17 FY18e FY19e FY20e
PBT 1,050 1,444 1,411 2,128 2,475 P/E
/ (x)
( ) 43.33
43 30.00
30 31.88
31 21.11
21 18.11
18
+ Non-cash items 452 478 551 582 599 EV / EBITDA (x) 19.3 17.4 16.5 12.0 10.2
Oper. prof. before WC 1,502 1,922 1,962 2,709 3,074 EV / sales (x) 2.5 2.5 2.1 1.8 1.5
- Incr. / (decr.) in WC 43 -993 -1,069 -206 -434 P/B (x) 13.0 9.4 7.9 6.3 5.1
Others incl. taxes 437.09 485.45 390.99 638.34 742.42 RoE (%) 33.0 36.4 27.0 33.2 31.1
Operating cash-flow 1,108 443 502 1,865 1,897 RoCE (%) - after tax 34.6 35.5 25.1 30.3 31.1
- Capex (tang
(tang. + intang.)
intang ) 717 755 507 200 200 RoIC 34 31 23 30 35
Free cash-flow 392 -312 -5 1,665 1,697 DPS (` / sh) 0.9 0.7 0.8 1.2 1.4
Acquisitions Dividend yield (%) 1.1 0.9 1.0 1.6 1.8
- Div. (incl. buyback & taxes) 400 318 326 492 572 Dividend payout (%) - incl. DDT 56.0 30.4 33.0 33.0 33.0
+ Equity raised 1 1 - 0 -0 Net debt / equity (x) 0.0 0.1 0.2 -0.1 -0.2
+ Debt raised -165 524 213 -835 - Receivables (days) 14 10 25 25 25
- Fin investments - 5 - - - Inventory (days) 50 51 51 52 53
- Misc. (CFI + CFF) -146 -175 - -0 0 Payables (days) 72 48 35 35 30
Net cash-flow -27 65 -118 339 1,126 CFO:PAT% 152.8 42.3 50.8 125.2 109.5
Source: Company, Anand Rathi Research Source: Company, Anand Rathi Research

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Company Brief
Management in brief Shareholding pattern
F i
Foreign
institutions
Name Designation 6.0% Domestic
Institutions
5.7%
B S Jauhar Chairman

Public
R SJauhar Vice-chairman and Executive director 40.4%

P S Jauhar Managing director and CEO

H S Gujral Executive director

Promoter
47.9%
Pankaj Gupta CFO

Source: Company Source: Company

Particulars FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Revenue ((net of excise)) 2,780
, 4,704
, 4,593
, 6,131
, 9,033
, 11,197
, 9,802
, 8,333
, 10,951
, 12,558
, 12,995
,
EBIDTA 250 608 295 771 1,065 1,037 855 482 945 1,632 1,830
EBIDTAmargin (%) 9 13 6 13 12 9 9 6 9 13 14
PAT 63 170 -126 188 372 422 277 -26 294 725 1,047
PAT margin (%) 2 4 -3 3 4 4 3 0 3 6 8
N worthh
Net 638 1,037 95 143 320 322 289 259 311 452 478
Net debt 1,573 1,584 200 628 745 716 566 223 634 1,180 1,353
Depreciation 38 83 1,237 1,256 1,344 1,561 1,745 1,816 1,964 2,425 3,331
Capital employed 1,637 2,794 2,710 368 1,101 1,275 1,077 748 156 18 477
EBIT 212 525 2 849
2,849 2 444
2,444 2 697
2,697 3 125
3,125 3 162
3,162 2 891
2,891 2 387
2,387 2 580
2,580 3 921
3,921
RoE 10 20 -11 15 29 29 17 -1 16 33 36
RoCE 33 63 6 18 20 20 16 7 15 35 36
Source: Company
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Global manufacturers, in brief
Leading global spring manufacturers

Leaf-spring capacity
The automotive leaf-springs market, globally, is expected to Manufacturer Base Country
(tonnes)
touch $12.8bn in 2021, according to Stratview Research. The
p
automotive composite leaf-spring
p g market is a niche one but Rassini Mexico 250,000
has significant growth potential in coming years. It is forecast
to register an attractive 10% CAGR in the next five years, to Hendrickson Canada & Mexico 216,000
$72.3m in 2022
Jamna Auto Industries. India 210,000
The global
Th l b l leaf-spring
l f i sector has
h evolved
l d over time
i with
ih
latest technologies, and manufacturers have diversified their NHK Springs Japan & Thailand 150,000
product range (Rassini: coil springs and brakes; NHK:
seating units and components units) Dong Feng China 105,000
Rassini, the global leader in capacity, even at 90%
utilisation,has very little operations in after-market sales (91% FAW China 100,000
to OEM, 2% to the after-market)
MBHA Spain 60,000
JJamna
m is i the
th third largest
l r t ini the
th world
rld and
d is
i an uncontested
t t d
leader in the home market Toyo Spring India 54,000*

Olgen Turkey 40,000

LPDN Europe 26,500

Source: Company * 2016 audit report of Toyo Springs

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Global manufacturers - Healthy profitability and free-cash generating

Rassini, at~90% utilisation, has a healthy, 19.5%, EBITDA margin (91% of its revenue arises from global OEMs, 2% from the
after-market, 1% from trailers (Brazil) and 6% from others, and enjoys higher return ratios (a 31% RoE and a 16% RoCE)
JJamna, with
i h lower
l asset utilisation
ili i andd higher
hi h overheads,
h d hash a smaller
ll EBITDA margin i than
h Rassini.
R i i We
W believe
b li that
h iti would
ld be
b
able to reach the latter’s margin levels as volumes increase (with the increasing proportion of parabolic springs), and the
proportion of the replacement market increases.

Brief financial s of global manufacturers

Jamna Auto Rassini(listed) NHK Springs (listed) LPDN(Sogefi)

$m 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016
Revenue 138 180 192 895 815 876 5395 4968 5906 1793 1664 1732
Gross profit 35 48 56 174 194 235 730 619 727 0 0 0
Gross margin % 25 27 29 19 24 27 14 12 12 0 0 0
EBIDTA margin % 58
5.8 86
8.6 13 0
13.0 13 2
13.2 16 6
16.6 19 5
19.5 10 8
10.8 98
9.8 89
8.9 81
8.1 77
7.7 97
9.7
PAT % -0.3 2.7 5.7 5.1 6.9 8.8 4.6 4.2 3.6 0.3 0.1 0.6
RoE% -1.5 15.5 33 24.7 26.1 30,7 NA NA NA NA NA NA
RoCE% 6.7 15.5 34.6 11.9 13.2 16.2 NA NA NA NA NA NA
Fixed-asset turnover ((x)) 1.79 2.32 2.60 1.04 0.98 1.02 NA NA NA NA NA NA
Operating cash-flow 7 15 17 88 149 129 NA NA NA NA NA NA
Free cash-flow 6 12 6 58 117 86 NA NA NA NA NA NA
Leaf springs (tonnes) NA NA 138,000 NA 203,095 231,706 NA NA NA NA NA NA
Revenue from leaf springs NA NA 187 NA 460 506 NA NA NA NA NA NA
Price per tonne ($) NA NA 1354 NA 2266 2184 NA NA NA NA NA NA
Source: Company * The 2016 audit report of Toyo Springs

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Revenue mix, FY17
Product -wise
wise
Lift Axle Multi-leaf Axle
8.9%

Loose Leaves
Replacement
15.0%

Parabolic Spring

Leaf Springs
76.1%

Source: Company

Segment -wise
After-market
exports
0 8%
0.8%
After-market India
16.1%
Lift Axle

OEM India Rear air-suspension

Source: Company 83.1%
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Strategically located
Jamna’ss dispersed units
Jamna

Jamna’s units at dispersed locations (near OEM units) are a Plant Location Purpose Strategic clients
long-term competitive advantage over any manufacturer.
After-market, SML Isuzu
g
Lower logistics costs and p
promptp deliveryy are the key;
y; thus,, a u a Nagar
Yamuna aga Leaf
ea sp
springs
gs
Jamna scores higher than any other manufacturer.
Malanpur Vecv, Man Trucks, Force Motors
The new plant in Hosur is to serve the export market and
multinationals such as Daimler and Volvo. Ashok Leyland, Bharat Benz, Renault,
Maraimalai Nagar Leaf springs
Nissan, Ford India

Pillaipakkam Lift axles Isuzu

Jamshedpur Tata Motors

Pune Lift axles & R&D centre Tata Motors, Mahindra Force Motors

Ashok
A h k Leyland,
L l d Kamaz
K V t
Vectra,
Hosur Leaf springs
Leyland Nissan, after-market exports

Lucknow Tata Motors

Pant Nagar Tata Motors, Ashok Leyland

Source: Company *2016 audit report of Toyo Springs

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Leader in the home market

Jamna is the sole supplier of springs to Daimler, Volvo and Home market leaf-springs
MAN Trucks and Buses. To Tata Motors and Ashok Leyland Others
2.0%
it supplies
pp respectively
p y ~73% and 90% of their consumption.
p
Toyo Spring
With a 71% market share, it is the undisputed leader and, 21.0%
given its size, location advantage and quality products, we
expect it to grow in line with OEMs.
Sonii Auto
S A t
We believe domestic commercial vehicle sales will clock a 7% 6.0%
CAGR in the next two years, driven by the continuing Jamna Auto
71.0%
vibrancy of the hub-and-spoke model. Thus, we expect
higher-ton
g volumes to increase,, addingg to demand for
parabolic springs. We expect Jamna’s domestic revenue to
Source: Company
register a 10% CAGR over FY17-20, to `14.36bn.

Brief financials,domestic manufacturers

Jamna Auto Toyo Springs Soni Auto

2014 2015 2016 2014 2015 2016 2014 2015 2016

Revenue(` m) 8,333 10,951 12,558 1,741 2,204 3,259 NA 596 773

Gross margins% 25 27 29 13 16 15 NA 28 25

EBIDTA margins% 6 9 13 4 8 7 NA 5 5

PAT% -0.3 2.7 5.8 1.1 4.3 4.6 NA 0 -1

Source: Company

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After-market business to clock a 15% CAGR over FY17-20

Theafter-market in India, at a 15% CAGR Domestic market leaf-springs

The domestic after-market is estimated at `20bn and Jamna’s share is

10-12%, per the company. The after-market is dominated by After-market India FY17 FY18e FY19e FY20e
unregulated players, with a 50% share
Relatively lower pricing,of around 10-15%, is the primary reason for Revenue (` m) 2,088 2,443 2,809 3,231
the huge dominance of unregulated players
Jamna, a few years ago, was unable to address demand, Later, though, it
took corrective actions such as 1) a dedicated facility and 2) KRAs % growth 15 15 15
aligned to the dynamics of the replacement market. This resulted in
significant reduction in the waiting period, from 25 days to three Source: Company

The company is currently working on an ERP system that will integrate

The companyhas 150 dealer and 250 dealer touch-points ,and plans to increase
p y, dealers and retailers in assessingg real-time replacement-
the company, p the number of its dealers by 50 in the next 22-33 years.
years
market demand. This, we believe, will help the company’s replacement
market to grow strongly It has tie-ups with 8,000 mechanics and aims at a figure of 20,000in the next 2-3
years

Domestic market leaf-springs

leaf springs
Export after-market to clocka 10% CAGR
At present, Jamna exports to the United States of America (USA), West
Asia (the Middle East), Bangladesh and Nepal and plans to enter other After-market exports (` m) FY17 FY18e FY19e FY20e
markets such as Russia
The Hosur plant is strategically located near sea ports and has been Revenue 108 119 131 144
established to cater to exports
.We expect Jamna’s after-market exports to register a nominal
10%CAGR over FY17
FY17-20
20 % growth 10 10 10

Source: Company

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Channel check takeaways

Dealers
 In the last two years, Jamna increased its supplies and has successfully catered to demand in the replacement market
 It has always been ahead in product development and improvement. Other brands copy changes introduced by Jamna
 Post-GST, Jamna reduced the MRP by 5-7% (per our checks, local brands have not lowered prices, both MRP and to
garage owners/retailers)
 To improve relationships with mechanics/garage-owners, Jamna had started a scratch-card scheme, through which
mechanics
h i get incentives
i i byb scratching
hi a card
d and
d scanning
i the
h attached
h d code
d for
f every loose
l l f
leaf-spring
i sold
ld

Retailers
 R t il prefer
Retailers f unregulated
l t d manufacturers,
f t who
h offer
ff higher
hi h margins
i than
th those
th given
i b Jamna
by J
 20-25% of customers prefer Jamna’s products despite higher pricing as, for them, quality is of prime importance.
Truckers, typically, are customers in this case
 Jamna’s dealers do not offer credit to retailers; other unregulated dealers provide it and, thus, retailers prefer to sell other
brand-named products
 Retailers do not have fixed selling prices of those products purchased from unregulated players. Prices vary according to
knowledge of customers and their bargaining,
bargaining whereas Jamna
Jamna’ss prices and,
and thus,
thus margins are fixed

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Channel check takeaways

Garage owners
 Jamna and Toyo have their own brands and the quality of their products is better. Jamna offers lower margins to retailers
and garage owners
 ASL, Unique are others in the replacement market
 Many manufacturers sell springs under different brand-names to avoid competitive pricing by retailers. Many mechanics
prefer such products to avoid bargaining by customers. While there are customers who prefer only Jamna’s springs, driven
by quality perception and past experience, price sensitiveness in the market plays a pivotal role in choosing a brand, per our
channel check
 Prices of products or unregulated manufacturers are 10-20% less expensive than those of Jamna, the key difference in
purchaser preference
 Parabolic springs are used at the front of a vehicle but are less preferred by truckers due to higher cost. These springs have
a longer life but if broken are costlier to replace
 In winter, demand for springs is 10-20% higher. In the cold they contract, then expand due to heat, increasing chances of
b k
breakage

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Strong financials

 We expect revenues to grow 12.5% in the next three Revenue andgrowth

(` m)
years, driven by a 12% CAGR in OEM and 15% in the 20,000
(%)
35.0
aftermarket 18,000
30.0
16,000
 We expect profitability to expand following higher 14 000
14,000 25.0

replacement growth and cost efficiencies, and thus the 12,000 20.0
10,000
EBITDA margin to expand from 12.3% now to 15% by 8,000 15.0
FY20 6,000 10.0
4,000
 Return ratios would come at a healthy 25-28%, driven 2,000
5.0

by strong margin expansion and stable fixed-asset 0 0.0

turnover

FY15

FY16

FY17

FY18e

FY19e

FY20e
Net revenues Growth(RHS)
Source: Company

EBITDA and EBITDA margin Return ratios (%)

(` m) (%) (%)
3,500 18.0 45
16.0 40
3,000
14.0 35
2,500 30
12.0
2,000 10.0 25

8.0 20
1 500
1,500
6.0 15
1,000
4.0 10
500 5
2.0
0 0.0 0
Y15

Y16

Y17

FY118e

FY119e

FY220e
FY115

FY116

FY117

FY188e

FY199e

FY200e

FY

FY

FY
EBIDTA EBIDTA Margin(RHS) RoE RoCE - After tax RoIC - After tax
Source: Company Source: Company

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Strong financials

 The company has been generating free cash in the past, Increasing operating and free-cash flows
except in FY17, due to lower operating cash-flows (` m)
2,000

 Henceforth, we expect it to continue to post positive

1,500
cash-flows
cash flows
1,000
 We expect the cash-conversion cycle to be well under
35 days for the forecast period, and the company to 500
fund capex through internal accruals
0

-500

FY15

FY16

FY17

FY18e

FY19e

FY20e
Free cash Flow Operating cash
cash-flow
flow
Source: Company

Net debt / equity (x) Cash-conversion cycle(days)

(x) (Days)
0.2 180
160
0.1
140
120
0.0
100
-0.1 80
60
-0.2
40

-0.3 20
0
Y15

Y16

Y17

FY18e

FY19e

FY220e
-0.4
0.4
FY

FY

FY
FY15

FY16

FY17

FY18e

FY19e

FY20e

Receivables Inventory Payables

Source: Company Source: Company

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Strong financials
PE band (one-year forward)
100
 We expect the company’s revenue to clock a 15% 90
23x
CAGR over FY17-20, driven by a 16% CAGR in the 80
after-market, and 15% in the OEM business 70 18x
60
 Against the backdrop of higher after after-market
market and
50
operating efficiencies, we expect the EBITDA margin 13x
40
to expand 220bps to 15% by FY20
30 8x
 Accordingly, we expect earnings to register an 18.5% 20
CAGR to `1.73bn, leading to an EPS of `4.35 10
0
 The stock trades at 21x FY19e EPS and 18x FY20e

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18
Apr-13
Jul-13
Oct-13

Apr-14
Jul-14
Oct-14

Apr-15
Jul-15
Oct-15

Apr-16
Jul-16
Oct-16

Apr-17
Jul-17
Oct-17
EPS. We initiate coverage with a Buy and a price target
of `96, assigning 22x FY20e EPS Source: Company

 Key risks: Steep decline in M&H CV growth, delay in Price Movement

expanding its dealer network in the replacement market (`)
100
90
JMNA
80
70
60
50
40
30
20
10
0 Jul-13

Jul-14

Jul-15

Jul-16

Jul-17
Oct-13

Oct-14

Oct-15

Oct-16

Oct-17
Apr-13

Apr-14

Apr-15

Apr-16

Apr-17
Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18
Source: Company

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 Anand Rathi Research
Appendix
Analyst Certification
The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific
recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and
the analysts’ compensation are completely delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report.
The research analysts, strategists, or research associates principally responsible for the preparation of Anand Rathi Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking,
competitive factors, firm revenues and overall investment banking revenues.

Anand Rathi Ratings Definitions

Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (<US$1bn) as described in the Ratings Table below:

Other Disclosures
This report has been issued by ARSSBL which is a SEBI regulated entity, and which is in full compliance with all rules and regulations as are applicable to its functioning and governance. The investors should note that ARSSBL is one of the companies
comprising within ANAND RATHI group, and ANAND RATHI as a group consists of various companies which may include (but is not limited to) its subsidiaries, its affiliates, its group companies who may hold positions, views, stakes and may service the
companies covered in this report independent of ARSSBL. Investors are cautioned to be aware that there could arise a potential conflict of interest in the views held by ARSSBL and other companies of Anand Rathi who maybe affiliated, connected or catering
to the companies mentioned in the Research Report; even though, ARSSBL and Anand Rathi are fully complaint with all procedural and operational regulatory requirements. Thus, investors should not use this as a sole basis for making their investment
decision and should consider the recommendations mentioned in the Research Report bearing in mind the aforementioned.

Further, the information herein has been obtained from various sources which we believe is reliable, and we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make
an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (hereinafter referred to as “Related Investments”). ARSSBL and/or Anand Rathi may trade for their own accounts as market maker / jobber and/or
arbitrageur in any securities of the companies mentioned in the Research Report or in related investments, and may be on taking a different position from the ones which haven been taken by the public orders. ARSSBL and/or Anand Rathi and its affiliates,
directors, officers, and employees may have a long or short position in any securities of the companies mentioned in the Research Report or in Related Investments. ARSSBL and/or Anand Rathi, may from time to time, perform investment banking, investment
management, financial advisory or any other services not explicitly mentioned herein, or solicit investment banking or other business from, any entity and/or company mentioned in this Research Report; however, the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the other companies of Anand Rathi, even though there might exist an inherent conflict of interest.

Furthermore, this Research Report is prepared for private circulation and use only. It does not have regard to the specific investment objectives, financial situation and the specific financial needs or objectives of any specific person who may receive this
Research Report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this Research Report, and, should understand that statements regarding future
prospects may or may not be realized, and we can not guarantee the same as analysis and valuation is a tool to enable investors to make investment decisions but, is not an exact and/or a precise science. Investors should note that income from such
securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or
related investments mentioned in this report.

Other Disclosures pertaining to distribution of research in the United States of America

This material was produced by ARSSBL, solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the
United States of America by Enclave Capital LLC (19 West 44th Street, Suite 1700, New York, NY 10036) and elsewhere in the world by ARSSBL or an authorized affiliate of ARSSBL (such entities and any other entity, directly or indirectly, controlled by
ARSSBL, the “Affiliates”). This document does not constitute an offer of, or an invitation by or on behalf of ARSSBL or its Affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from
published information and other sources, which ARSSBL or its Affiliates consider to be reliable. None of ARSSBL or its Affiliates accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates,
expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic
environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be
bound by all the foregoing provisions.
1 ARSSBL or its Affiliates may or may not have been beneficial owners of the securities mentioned in this report.
1. report
2. ARSSBL or its affiliates may have or not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months.
3. ARSSBL or its affiliates may have or not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these
securities within the next three months.
4. However, one or more of ARSSBL or its Affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon, either on their own account or on behalf of their clients.
5. As of the publication of this report, ARSSBL does not make a market in the subject securities.
6. ARSSBL or its Affiliates may or may not, to the extent permitted by law, act upon or use the above material or the conclusions stated above, or the research or analysis on which they are based before the material is published to recipients and from time to
time, provide investment banking, investment management or other services for or solicit to seek to obtain investment banking, or other securities business from, any entity referred to in this report.
Enclave Capital LLC is distributing this document in the United States of America.
America ARSSBL accepts responsibility for its contents.
contents Any US customer wishing to effect transactions in any securities referred to herein or options thereon should do so only by
contacting a representative of Enclave Capital LLC.
© 2018 Anand Rathi Shares and Stock Brokers Limited. All rights reserved. This report or any portion thereof may not be reprinted, sold or redistributed without the prior written consent of Anand Rathi Shares and Stock Brokers Limited.
Additional information on recommended securities/instruments is available on request

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