Dalmia Bharat Ltd

BUY
Axis Annual Analysis Dalmia Bharat Ltd Target Price
16th June, 2022 Cement
1635

Gearing for the Next Phase of Growth; Cost Headwind a Concern

(CMP as of June16,2022)

Summary CMP (Rs) 1256

 Dalmia Bharat Cement (DBCL) – a wholly-owned subsidiary of the company, added 5.15 Upside /(Downside (%)) 30%
MTPA of Grinding Capacity (2.25 MTPA at Dalmia DSP Unit- II, near Cuttack (Odisha) and High/Low (Rs) 2547/1280
2.9 MTPA at Murli Plant in Maharashtra) during the year. The said expansion increased its
Market cap (Cr) 23531
total capacity to 35.9 MTPA in FY22 from 30.75 MTPA in FY21. The company also doubled
its renewable power capacity to 63 MW in FY22 from 32 MW in FY21. Furthermore, it has Avg. daily vol. (6m) Shrs. 289533
added 32 MW of thermal power through the acquisition of Murli Industries limited. No. of shares (Cr) 18.7
 The company expended Rs 1,988 Cr on capex in FY22. It lowered its Gross Debt by 586 Cr
to Rs 3,140 Cr in FY22 through pre-payments and repayments of various term loans, non- Shareholding (%)
convertible debentures, short-term loans, and buyer’s credit. Its Net debt stood at (1,421) Cr
and net debt/ EBITDA at (0.59x) as of March 31, 2022. Sept-21 Dec-21 Mar-22
 DBL aims to expand its total cement grinding capacity from the current 35.9 MTPA to 48.5 Promoter 56.0 56.0 56.0
MTPA by FY24. The company intends to spend Rs 9,000 Cr on capacity expansion and green 13.8 13.5 12.6
FIIs
initiatives to be funded through internal accruals and debt. It targets a capacity of 130 MTPA
by 2030. MFs / UTI 4.6 5.1 5.6
0.1 0.0
0.1 0.01
Banks / FIs
Key Highlights Others 25.5 25.5 25.7
 Healthy growth in the sales volumes: In FY22, the company's cement sales reported
healthy volume growth of 7.8% YoY to 22.3 MTPA from 20.7 MTPA in FY21. The volume Financial & Valuations
growth was driven by the pent-up demand and normalization of economic activity post Y/E Mar (RsCr) FY22 FY23E FY24E
lockdown relaxations.
Net Sales 11,286 12,824 14,689
 Margin contraction due to elevated costs: The company recorded an EBITDA margin of
EBITDA 2,426 2,161 3,114
21.4% against 27.2%. Elevated cost dented its margins, particularly Power & fuel costs, which
shot up 42% on a tonne basis YoY. Cost optimization measures adopted by the company Net Profit 1,171 690 1,297
greatly aided in controlling costs to a certain extent. In the absence of such initiatives, the EPS (Rs) 61 34 66
impact on margins would have been much higher. PER (x) 25 38 16
 Formal adoption of Capital Allocation Policy: During the year, the company formally EV/EBITDA (x) 9.5 11 8
adopted a Capital Allocation Policy based on the central principle of delivering predictable,
P/BV (x) 1.5 1.4 1.3
sustainable, and profitable growth over the next decade coupled with a robust balance sheet
and adherence to the highest standard of corporate governance. ROE (%) 7 4 7
 Focus on blended cement: In line with its commitment to environmental sustainability, the
company continued to focus on producing and promoting blended cement (80% of sales). It Change in Estimates (%)
aims to produce 100% blended cement in the next 5 years and 100% transition to renewable Y/E Mar FY23E FY24E
energy by 2030.
Sales 0 0
EBITDA 0 0
Outlook & Recommendation:
PAT 0 0
The company’s expansion plans are progressing well. Moreover, it is confident of better demand Volume
momentum in FY23. However, current high energy prices are posing challenges and we expect the
ESG disclosure Score**
cost to remain elevated in H1FY23, which would moderate only gradually in H2FY23. Since the
majority of the capacities are being added in the Eastern region, pricing, as well as sustenance of Environmental Disclosure Score 41
demand remain key monitorables. With attributes such as the company’s superior positioning in Social Disclosure Score 44
the key markets of East and South India, new capacity ramp-up along with its cost optimization
Governance Disclosure Score 48
measures coupled with the government’s focus on infrastructure and low-cost affordable housing
and increasing real estate demand, we expect DBL to improve its market share and deliver decent Total ESG Disclosure Score 43
performance going forward. The stock is currently trading at 11x and 8x FY23E and FY24E Source: Bloomberg, Scale: 0.1-100
EV/EBITDA. We value the company at 10x FY24E EV/EBITDA to arrive at a target price of Rs **Note: This score measures the amount of ESG data a company reports publicly
and does not measure the company's performance on any data point. All scores
1,635/share implying an upside potential of 30% from the CMP and maintain our BUY rating are based on 2020 disclosures
on the stock.
Key Financials (Consolidated) Relative performance

(Rs Cr) FY22 FY23E FY24E

325
Net Sales 11,286 12,824 14,689 275
225
EBITDA 2,426 2,161 3,114 175
Net Profit 1,171 690 1,297 125
75
EPS (Rs) 61 34 66 25
Jan-20 Aug-20 Mar-21 Nov-21 Jun-22
PER (x) 25 38 16
Dalmia BharatLtd BSE Sensex
EV/EBITDA (x) 9.5 11 8
Source: Capitaline, Axis Securities
P/BV (x) 1.5 1.4 1.3
ROE (%) 7 4 7
Uttam K Srimal
Source: Company, Axis Securities Research Analyst
Email: uttamkumar.srimal@axissecurities.in

Shika Doshi
Research Analyst
Email: shikha.doshi@axissecurities.in

1
Key Competitive Strengths
a) The 4th largest cement producer in India; b) Largest producer of slag and speciality Cement in India; c) Robust
sales and distribution network; d) Improving financial position; e) Experienced and competent management
bandwidth and f) Diverse product portfolio for Retail and Institutional clients.

Strategies Implemented During FY22

a) Efficient use of capital through judicious allocation in technology-led investments, branding and, robust trade
terms; b) Capacity expansion to capitalize on growing markets; c) Focus on selling blended Cement; d) Securing
long-term raw material security including limestone; e) Proactively investing in building competent human capital.

Growth drivers
a) Rural Housing; b) Affordable Housing; c) The government’s keen focus on infrastructure development including
roads, railways, highways, metros, airports, irrigation, and water projects; d) Real estate growth; e) Urban
infrastructure development such as Smart Cities and AMRUT Yojana.

Key focus areas in FY23:

a) To be a pan-India pure cement company; b) Establish a significant presence in every market in the company’s
operating region; c) Grow capacity at 14-15% CAGR over the next decade to reach 130 MTPA by 2030; d) Emerge
as one of the most profitable and environment-friendly company in India; e) Maintain robust balance sheet; f) Build
a great organizational culture and robust value system.

2
Company Overview
Dalmia Bharat Limited (DBL) started its journey in 1939 and emerged as one of the fastest-growing players in the
Indian cement sector. It commands a 5% share of all of India's capacity in the areas where it operates. DBL has a
total cement production capacity of 35.9 MTPA, clinker capacity of 18.9 MTPA, and a power generation capacity of
272MW. The company’s operations span 14 locations in India through its 10 integrated plants and 4 grinding Units
and a robust network of over 35,000 channel partners spread across the country. DBL is the pioneer in the
production of not only slag cement but also speciality cement in India. The company has more than doubled its
capacity in the last 10 years through both organic and inorganic routes to 35.9 MTPA in FY22 from 14 MTPA in
FY11. Today, it stands as the 4th largest cement-producing company in India.

Product & Brand Portfolio

DBL’s brand portfolio comprises an ordinary and premium range of products assuring superior quality for general
as well as for specialized construction and environments. The company produces all three cement variants namely
OPC, PPC, and PSC. Apart from these, it also produces PCC (Portland Composite cement). At present, it sells
cement under two categories – Retail and Institutional, comprising 6 brands namely Dalmia DSP, Dalmia cement,
Konark cement, Dalmia Infrapro, Dalmia Infragreen, and Dalmia Instapro.

Exhibit 1: Product Mix

Product Mix (%)

40
36 18
30
21
20 25

10

OPC PPC PCC PSC

Source: Company, Axis Securities

3
FY22 Performance Round-up
 Encouraging financial performance: The company reported revenue of Rs 11,280 Cr in FY21, up 12%

YoY, owing to rising Cement demand in its key markets of East, South, and Nort-East India. However,

its Q3FY22 performance got impacted, especially in the Eastern region, owing to floods, a ban on sand

mining, and labour issues. The company reported an EBITDA margin of 21.4% in FY22 against 27.3% in

FY21. EBITDA/tonne stood at Rs 1,084 during the year against Rs 1,336 in FY21. EBITDA margin was

impacted due to the elevated cost of input materials.

 Improvement in blended realization and volumes: The company’s blended realization for the year

went up 3.5% to Rs 5,060/tonne owing to better prices in the South region. The cement volume grew by

7% YoY (FY22 – 22.30 MTPA vs FY21– 20.7MTPA) as demand in its operating region picked up post

lockdown relaxations both in trade and non-trade segments. Had Q3FY22 not been impacted, volume

growth could have been much better. Capacity utilization during the year stood at 62% on the expanded

base.

 Cost/tonne increased: The cost/tonne in FY22 increased by 6% to Rs 3,977/tonne against Rs

3742/tonne in FY21. This was led by the higher cost of power & fuel which was up by 42% on a tonne

basis YoY.

 Improvement in blended cement and premium product sales: The company’s focus on increasing

blended Cement paid off well and it increased to 80% during FY22. The share of a premium product

(Dalmia DSP) in trade sales increased to 31% from 26% in FY21. Since its launch, Dalmia DSP has been

immensely successful in the East and North-East regions.

 Reduction in gross debt: In FY22, the company reduced its gross debt to Rs 3,140 Cr, net debt to

(1,421) Cr, and net debt/EBITDA stood at (0.59x).

 Healthy dividend payout: The company paid an interim dividend of Rs 4/ per share and declared Rs

5/share as the final dividend as per the guidelines of its newly adopted Capital Allocation Policy.

4
Key Operational activities during the year

Commercial operation of Murali Industries Limited

 During the year, Murli Industries Limited (MIL) commenced commercial production at its cement plant in
Chandrapur district, Maharashtra with a 2.9 MTPA cement capacity. The plant was acquired for Rs 410
Cr and a further Rs900 Cr was spent on the revival modernisation, expansion and installation of green
manufacturing equipment such as waste heat recovery systems, solar power, green fuel systems and
robotic labs, for enhanced quality monitoring.

Capacity enhancements

 During the year under review, Dalmia Cement (Bharat) Limited wholly-owned subsidiary of the company,
added 5.15 MTPA of Grinding Capacity (2.25 MTPA at Dalmia DSP Unit- II, near Cuttack, Odisha and 2.9
MTPA at Murli Plant in Maharashtra) which led to increasing in its capacity from 30.75 MTPA in FY21 to
35.9 MTPA in FY22.

 During the year, DCBL also doubled its renewable energy capacity from 32 MW in FY21 to 63 MW in
FY22. This included 9.4 MW of Waste Heat Recovery System (WHRS) at Kadapa; 17.5 MW of Solar
Power at Kapilas cement works, and 4.6 MW of Solar Power at the Bengal plant. In addition to the above,
DCBL has added 32 MW of Thermal Power through the acquisition of Murli Industries Limited.

 Dalmia Bharat Green Vision Limited, a wholly-owned subsidiary of the Dalmia Cement (Bharat) Limited,
was incorporated to set up three green field cement projects in Tuticorin, South Chennai and North Bihar
to add 5.5 MTPA cement capacity. The said capacity is expected to be added in FY24.

 During the year, the company spent Rs 1,988 Cr on overall capex.

Sale of Hippo Stores and stake sale in IEX

 In a bid to exit from the non-core business areas, DCBL has completed the sales of Hippo Stores,
generating cash of `155 Cr. Besides, a 5.2% stake in India Energy Exchange (IEX) was disposed of by
the subsidiaries for 614 Cr

Capital allocation

 The company has announced a capital allocation plan and laid down its vision to be a pan-India pure-play
cement company with a capacity of 130 MTPA by 2030. To meet this objective, its immediate focus will
be on consolidating its presence in the existing region in the next 2-3 years. In line with its recently
announced capacity expansion plan, DBL plans to expand its current capacity of 35.9 MTPA to 48.5 MTPA
by FY24. The company will be spending ~Rs 9,000 Cr on the ongoing expansion which also includes
green initiatives. It plans its capacity expansion through the organic route as it offers a more predictable
and cost-efficient way of growing capacity and aims to grow its proposed capacity at 15% CAGR, financed
through a prudent mix of debt and equity.

5
Sustainability Commitment

 The company is committed to becoming a carbon negative by 2040 and in FY21, it further made a bold
commitment to become a 100% blended cement producer in the next 5 years. These commitments are
expected to substantially reduce the company’s clinker factor and carbon footprint in the years ahead.
Currently, while its facilities in Eastern India are dedicated to producing 100% blended cement, it now
aims to maximise blended cement production across all its operations.

 To achieve the committed goals, the company has proposed to allocate up to 10% of operating cash flows
towards an Innovation and Green Energy Fund to develop and adopt innovative technologies and combat
climate change. Under the Innovation and Green Energy fund, the company will be investing Rs 1,000-
1,200 Cr over the next two to three years in waste heat recovery, solar power generation systems, and
building capacity to enhance the usage of gree fuel to substitute fossil fuels and clinker. These initiatives
will not only assist in lowering the carbon footprint of its operations but also enhance the company’s
profitability moving forward.

Gross Debt & Net Debt

 The company’s gross debt declined by 586 Cr to 3,140 Cr (as of March 31, 2021), due to pre-payments
and repayments of various term loans, non-convertible debentures, and short-term loans and buyer’s
credit during the year. Net debt stood at (1421) Cr as of March 31, 2022.

6
Key Subsidiary PerformanceAnalysis

Particulars (Rs Cr) FY21 FY22 Change Comment/Analysis

Revenue

Dalmia Cement Bharat Limited 9,166 9760 6.5% Superior demand led to higher revenue during the year.

Dalmia Power Limited - - - The company has only an investment portfolio (no sales).

Calcom Cement India Limited 983 1158 18% Superior demand led to higher revenue during the year.

Alstom Industries Limited 245 261 6.5% Superior demand led to higher revenue during the year.

Dalmia DSP Limited 337 393 16.6% Superior demand led to higher revenue during the year.

Murali Industries Limited - 110 100% Recently started operation after commercialization.

The company has only an investments portfolio (no

DPVLVentures LLP - -
sales)

Net Worth

Dalmia Cement Bharat Limited 10,415 11343 9% High profits augmented the company’s Net Worth.

Dalmia Power Limited 1,039 1511 45% Owing to an increase in profit on investments.

Calcom Cement India Limited 270 366 35.5% Owing to an increase in profit of the company by 96 Cr

Alstom Industries Limited 74 100 35% Owing to increase in profit of the company by 22 Cr

Dalmia DSP Limited 56 114 103% Owing to an increase in profit of the company by 58 Cr

DPVLVentures LLP 178 - 100%

PAT

Dalmia Bharat Cement Limited 1,114 665 -40% Elevated costs dented the company’s profits

Profit on the sale of investment augmented the

Dalmia Power Limited 45 131 191%
company’s profit

Calcom Cement India Limited -235 96 Owing to higher sales and better realization

Alstom Industries Limited 10 22 120% Owing to higher sales and better realization

Dalmia DSP Limited 64 58 -9% Higher costs dented the profitability.

Profit on sale of investment augmented profit of the

DPVLVentures LLP - 106 100%
company

Source: Company; Axis Securities

7
Cost OptimizationMeasures
 Power/Fuel Cost: In FY22, the company’s Power & Fuel costs increased by 42% to Rs 1,150/tonne

against Rs 809/tonne in FY21 on account of the higher cost of Pet Coke and imported coal. The company’s

proactive procurement strategy and use of multiple fuels coupled with the higher use of alternative fuels

helped it keep fuel costs from increasing further. To reduce power & fuel costs, the company is expanding

its capacity of WHRS and other renewable energy sources such as solar and alternative fuel.

 Freight/Forwarding Cost: Freight & forwarding cost per tonne was higher by 5% at Rs 1,057 against Rs

1,009 in FY21 on account of the increase in diesel prices. The company continues to undertake several

initiatives for efficiency improvements, rationalizing routes and lead distances, enhancing direct

dispatches, and augmenting more technological tools in the supply management to keep Freight &

forwarding costs under check.

 Raw Material Cost: The cost of raw materials consumed increased by 4% in FY22 owing to higher costs.

 Other Expenses: Other expenses increased by 7% to Rs 772/tonne against Rs 719 in FY21 owing to an

increase in packing cost and normalization of other costs and increased volume.

8
Key Growth Drivers
 Affordable Housing: The affordable housing segment has been a key focus area for the government.

During the Union Budget 2022-23, the government allocated Rs 48,000 Cr for the construction of 80 Lc

houses for both PMAY-Urban and PMAY-Grameen. The Central Government will work with State

Governments to reduce the time required for approvals to promote affordable housing for mid and low-

income sections in urban areas. Though India is the second-largest cement market in terms of both

production and consumption, its per capita cement consumption stands significantly lower at 240 kg vis-à-

vis the global average of over Rs 500 kg. This provides significant growth headroom for the industry in the

years to come.

 Real-Estate: After a lull in demand for several years, the Indian real estate sector is seeing a multi-year

upcycle. Favourable interest rates and a preference for buying bigger homes are driving the industry. NITI

Aayog expects that the Indian real estate sector will reach a market size of $1 Tn by 2030 and account for

13% of India’s GDP by 2025. Already the third-largest sector to drive economic growth, the real estate

industry is expected to continue its upward trajectory in 2022. This is expected to further drive the country’s

cement sector.

 Infrastructure: The infrastructure sector is a pivotal contributor to the construction sector’s order book and

an ambitious National Infrastructure Project (NIP) launched by the government is expected to provide a

significant boost to the construction industry in India. Projects such as Bharatmala Pipeline, Metro Railway

Projects in key cities such as Mumbai, Bangalore, Chennai, and Ahmedabad, and National Airport projects

are likely to add to the country’s construction activities. Furthermore, while these construction activities

were severely impacted by the Covid-19 disruptions, they are now back on track and are now providing

thrust to the cement demand. NMP (National Infrastructure Pipeline) and Gati Shakti Master Plan will

further accelerate the pace of infra development creating more demand for cement.

 Rural Road: Pradhan Mantri Grameen Sadak Yojana is an important programme of the government to
connect habitats across the country. In a bid to accelerate rural road construction, budgetary allocation to
PMGSY in 2022 was raised by 36% to Rs 19,000 Cr.

 Rural Income: The Budget 2022 is expected to enhance rural income and revive demand for rural
consumption. This will primarily be driven by the announcement of Rs 2.37 Lc Cr towards direct payments
for minimum support price (MSP) to wheat and paddy farmers to be made in FY23.

Exhibit 2: Cement consumption trend – segment-wise: Housing remains the largest cement consumer

60% 55%

50%
40%
30% 22%
20% 13%
10%
10%
0%
Housing Industrial & Commercial Infrastructure Low Cost Housing

Source: Company, Axis Securities

9
Sales & Distribution
 Comprehensive product portfolio: Over the years, the company has introduced several brands in the

market to cater to diverse customer requirements. Brands such as ‘Dalmia DSP, ‘Konarkcement’ and

‘Dalmia cement’ command significant mind share as a qualitative products having easy availability.

Furthermore, its institutional offerings such as Dalmia INFRAPRO, Dalmia INFRAGREEN, and Dalmia

INSTAPRO have also been established as important brands with institutional clients. The company has a

comprehensive portfolio of super-premium and ‘green’ cement varieties that witness encouraging demand

in the markets.

 Strong distribution network: The company has built a robust network of dealers and distributors of

35,000 plus to reach target markets, leveraging which, it has emerged as a robust brand to reckon with. It

continues to strengthen its network of dealers further and strives to maintain a healthy relationship with

them by following transparency with channel partners.

 Dalmia Delight: Dalmia Delight is an exclusive reward and engagement programme targeted at dealers

from East, Northeast and South to incentivise them for driving sales, product mix, and behaviour-led

campaigns. The programme witnessed astounding results during the past year with the majority of the

dealers redeeming 18,000+ items and 30+ campaigns implemented (quiz, spin the wheel, photo contest,

live events), involving dealers and their families. The all-rounded engagement in the programme resulted

in the company winning the Dragons of Asia Award In the Best B2B/ Trade marketing campaign category

in 2021.

 Strengthening digital presence: The company strengthened its presence in the digital channel through

a focused approach. A fully integrated suite of apps was developed and deployed for the company’s

channel partners, influencers, and field force. Now, information can be shared and accessed seamlessly

across all applications. Channel partners can place and track orders, make payments, and receive their

statements of accounts through mobile applications. It has developed a WhatsApp-based tool, Sales

Buddy, to leverage a machine learning algorithm at the back end and identify sales opportunities. Machine

learning algorithms are used to develop predictive and prescriptive models focused on improving business

efficiencies.

 Dalmia Build Advisors: The company engages with masons, contractors, engineers architects, and

consultants and offers the ‘Dalmia Masters’ loyalty programme to recognise and reward the hard work of

influencers, including masons contractors, engineers, architects, and consultants.

 Strong traction witnessed in Premiumization: Premiumization witnessed strong traction in FY22 as the

sales volume of premium grade cement ‘Dalmia DSP’ increased to 31% of trade sales from 26% in FY21.

This particular product contributes 15-20% higher profitability than other products.

10
Supply Chain & Logistics
 Expanding digital adoption: The company expanded its digital adoption processes through a well-

defined digital architecture. digitalisation has increased supply chain visibility through track and trace

modes. We have an auto-replenishment model for inventory planning, along with an e-auction tool for

freight discovery. Auto order allocation system helps to further the automation of manual tasks. This helps

in improved reporting and decision-making.

 Scaling up logistics: The company scaled its logistics through increasing fleet capability by inducting

new and organised transporters across plants. It opened new depots considering demand patterns to

improve serviceability and reduce cost.

 Optimising logistics: The company is working to optimize logistics through various modes as under

a. Introduced supply chain optimiser tool to improve network

b. Used dedicated fleet model higher capacity vehicles.

c. Institutionalised reverse auction across the process.

d. Ensured stock transfer through higher-sized vehicles

e. Set up 24*7 operational depot for easy night loading

f. Opened 27+ new depots in Kerala and standardised secondary freight across 8 districts

g. Explored the idea of multi-modal dispatch through containers and CONCOR domestic containers,

leading to a reduction in freight costs and enhanced serviceability across south India

 During the year company rail/road mix for its various region stood as under:

o South: Rail-7%, Road-93%

o East: Rail-30%, Road-70%

o North East: Rail-5%, Road-95%

11
Key Strategies Moving Forward

To become a Pan-India pure-play cement company

 The company continues to focus on the cement business and accordingly has divested retail and

refractories business from DCBL.

 Strategic expansion in the regions of high and sustained demand

To achieve a significant presence in every market where Dalmia operates

 Becoming the market leader in the highly attractive East India market

 Strengthening price realization by focusing on the sale of premium cement and deepening its market

reach by expanding its distribution network and increasing retail sales.

 Continue to enhance existing brands and introduce new brands as per changing customer needs.

Grow capacity at a CAGR of 14-15% to reach 130 MTPA by 2030

 Building plants with deep technology integration for better operational efficiency and sustainability.

 Commissioned new line of Dalmia DSP Unit- II near Cuttack. Odisha and Murli cement plant in

Maharashtra

Sustainable Growth

 Conservation of natural resources and increasing the use of alternative fuels and raw materials.

 To bring acquired and brownfield expansion projects under integrated disclosure practices.

 To become 20 times water-positive by 2025

 Transition to 100% blended cement producer by 2025

Maintaining a Strong Balance Sheet with a High standard of corporate governance

 Continued focus on building enhanced transparency and embracing the highest standards of governance

 Developed a formal Capital Allocation Policy and a treasury policy.

 Released Corporate Governance Guidelines, a Code of Conduct and Financial Ethics.

Business Outlook

 The cement demand is closely linked to the overall economic growth, particularly in the housing and

infrastructure sector. Keeping this in view, the government continues to provide thrust to infrastructure

creation and development, thereby providing new growth avenues to the cement industry.

 The company strongly believes that despite challenges, the cement sector is poised to deliver robust

growth moving forward. This is driven by robust growth anticipated from the individual housing segment,

buoyed by the growth in rural income and the government’s focus on the affordable housing segment.

 The government’s push towards infrastructure and the boom in industrial sector demand, driven by

increased warehouse requirement for e-commerce and data centres for back offices are expected to

further add to cement demand in the country.

12
Risks & Mitigation
The cement industry faces various risks ranging from commodity and fuel price volatility to staying
compliant with evolving regulatory requirements, particularly related to climate change. Such risks demand
agile decision-making and effective risk management strategies to mitigate exposures and harness
opportunities.

Key risks identified, assessed, and mitigated during the year under review include:

1. Economic Slowdown: Dalmia Bharat’s performance may get adversely affected in the event of an

economic slowdown, impacting its cash flow generation abilities along with increasing RM and operational

costs.

Mitigation: The company continues to focus on cost stewardship and production efficiency improvements

to protect its margins and improve cash flow generation. Additionally, a continuous effort on brand creation

ensures that the company continuously look at improving market share.

2. Profitability Risk: The inability to compete with peers may affect the company’s profitability, leading to a

loss in market share, lower realizations, and a decline in the demand for the company’s products.

Mitigation: The company’s diversified product mix comprises value-added and branded products based

on consumer demand along with changing market dynamics and technologies. The company

differentiates itself through proactive technology-led research in product quality and customer service.

3. Climate Risk: Environmental risks such as flooding, cyclones, change in precipitation patterns, and

extreme variability in temperature impacting operations and disrupting supply chains may affect the

company’s operational continuity. Reputation risk due to changing customer or community perception

may lead to a reduction in sales, thereby affecting the company’s growth and financial performance.

Mitigation: The company has committed to becoming a carbon-negative cement producer by 2040. It

focuses on climate-related disclosures for relevant stockholders and continues to invest in low

carbon/zero carbon assets, renewable energy, sustainable biomass use, circular economy, and achieving

energy efficiency to mitigate these risks.

4. Financial Risk: Inadequate or inefficient capital allocation by the company may lead to inadequate

growth, resulting in unaccounted losses, a weaker balance sheet, and lower margins.

Mitigation: The company’s cash management amidst the pandemic outbreak indicates its strength in

capital allocation. The company recently released its Capital Allocation policy, which details its judicious

and conservative plans for capital allocation in the future years.

5. Operational Risk: Operational defaults and bottlenecks can affect the company’s margins which may

result in increased costs, inefficiencies, and lower margins

Mitigation: The company continues to strengthen its operational checks and balances. It invested in

technology-led alerts to mitigate this risk.

6. Compliance Risk: Non-compliance with applicable regulations may lead to the imposition of penalties

and suspensions of operations, apart from reputational damage.

Mitigation: The company has proactively invested in establishing a full-fledged compliance department.

It periodically reviews the compliances for their timeliness.

13
Progress on sustainability
As a socially and environmentally responsible company, DBL consistently adopts sustainable practices. It follows
the philosophy of “Clean and Green is profitable and Sustainable” which makes Dalmia cement a powerful and
distinctive brand as an environmentally responsible group. Some of the key Sustainability practices and
achievements are as follows:

• Dalmia cement became 13.3 times water positive in FY22

• Committed to RE100 (100% renewable power by 2030), EP100 (Double energy productivity by

2030) and EV100 (100% electricity freight by 2030) collectively

• Its plants are ISO 14001 certified

• Switching of green fuels from fossil fuels including biomass and waste

• Signed an MOU with Carbon clean solution UK to set up the world's largest carbon capturing

and utilizing plant.

• Committed to becoming Carbon negative by 2040

• Transition to 100% blended cement in the next 5 years

• CSR vision 2030 plans to deliver to beneficiaries in terms of livelihoods, skill development,

Climate Action, and Social infrastructure development.

Profitability Analysis (Rs Cr)

Particulars FY21 FY22 Change Comments/Analysis
Revenue increased owing to better volume pick-up and higher price realization.
Sales 10,110 11,286 12% Demand in its primary operating region of South, East and North East India witnessed
superior traction during the year.
Raw Materials/Others 15,430 14,720 -5% Raw material costs were lower owing to the restatement of account during the year.

Gross Profits 4,835 4,889 1% Gross Profit was higher due to better volume and higher realization.
Operating expenses were higher owing to an increase in staff cost by 13% and
Operating Expenses 2,073 2,463 19%
packing material cost by 22% YoY.
Interest costs were lower on account of the lower rate and repayment of the debt leading to
Interest 295 197 -33%
gross debt reduction by Rs 586 Cr during the year.
EBIT 1,693 1,345 -20.05% EBIT was lower due to higher operating expenses and lower other income

APAT 1,171 1,144 -2% APAT was lower as the higher cost impacted the profit.

EPS 62.7 61.2 -2% EPS is in line with APAT

Source: the company; Axis Securities

Exhibit 3: Volume and Growth trend

Volume & Volume Growth

25.00 22.29 25%
19.29 20.68
20% 16.96 18.68
20.00 20%
15.30
15.00 15%
11% 10%
10.00 7% 10%
8%
5.00 3% 5%
0.00 0%
FY17 FY18 FY19 FY20 FY21 FY22

Volume (mntpa) Volume growth

Source: Company, Axis Securities

14
 Exhibit 4: Realization/tonne and Growth Trend

5200 6.0%
5,060 4.5% 5,077 5,063
5,015 4.0%
3.6%
4,889 2.0%
4,839
4800 0.3% 0.0%
-1.2%
-2.0%
-2.5%
-3.8% -4.0%

4400 -6.0%
2017 2018 2019 2020 2021

Blended Realization/tonne (Rs.) Growth (%)

Source: Company, Axis Securities

Exhibit 5: Cost/tonne Trend

4200 4,037 10.0%

4000 3,872 3,923
5.0%
3,742
3800 4.3%
3,596 0.0%
3600 7.7%
3400 -5.0%
-2.8% -4.6%
-5.0%
3200 -10.0%
2017 2018 2019 2020 2021

Cost/tonne (Rs.) Trend

Source: Company, Axis Securities

Growth Indicators (Rs Cr)

Particulars FY21 FY22 Change Comments/Analysis

Revenue increased owing to better volume pick-up and higher price realization.
Revenue 10110 11286 12% Demand in its primary operating region South, East and North East India witnessed
superior traction.
EBITDA 2762 2426 -12% EBITDA declined on account of higher costs. Cost/tonne increased by 12% YoY.

APAT 1171 1144 -2% APAT was lower due to higher costs and lower other income during the year.

-2%
EPS 62.7 61.2 EPS is in line with APAT.

Volume(MTPA) 20.7 22.3 8% Volumes were higher owing to better demand in its operating regions.

Source: Company; Axis Securities

Profitability Margins

Particulars FY21 FY22 Change Comments/Analysis

GPM declined due to elevated costs during the year, particularly power & fuel which were up
GPM 48% 43% (500)bps
42% on tonne basis YoY

EBITDAM 27% 21% (600)bps EBITDAM declined due to elevated direct as well as indirect costs.

APATM 11.6% 10.1% (150) bps APATM was lower owing to higher costs and lower other income.

Source: Company; Axis Securities

15
Exhibit 6: Revenue and Revenue Growth Trend

15000
Revenue & Revenue Growth 20%
15% 16%
11286
9484 9674 10110 15%
10000 7404 8581
11% 12%
10%
5000
2% 5%
5%
0 0%
FY17 FY18 FY19 FY20 FY21 FY22

Revenue (in crores) Revenue growth

Source: Company, Axis Securities

Exhibit 7: Blended EBITDA/Tonne Trend

Blended Ebitda & Ebitda Growth

1500 1243 1336 40%
1188 1092 1088
1040 31%
1000 20% 20%
6% 8%
500 -4% 0%
-12%
0 -20%
FY17 FY18 FY19 FY20 FY21 FY22

Blended Ebitda/ton (Rs.) Blended Ebitda/ton growth

Source: Company, Axis Securities

Exhibit 8: Blended EBITDA and Margin trend

25.7% 27.3%
3000 23.5% 30.0%
20.5% 21.8% 21.5%
2500 25.0%
2000 20.0%
1500 15.0%
1000 10.0%
500 5.0%
1902 2014 1942 2106 2762 2426
0 0.0%
2017 2018 2019 2020 2021 2022

Blended Ebitda (In crs) Ebitda Margin (%) Ebitda Margin (%)

Source: Company, Axis Securities

Exhibit 9: Net Profit (Cr) and NPM Trend

1500 11.8% 15.0%

1000 10.0%
5.8%
3.4% 3.7%
500 2.5% 5.0%
432 291 349 238 1243
0 0.0%
FY17 FY18 FY19 FY20 FY21

Net Profit NPM

Source: Company, Axis Securities

16
Financial Ratios

Particulars FY21 FY22 Change Comments/Analysis

ROE 9% 7% (200)bps ROE declined due to lower profitability.

ROCE 10% 7% (300)bps ROCE declined as EBIT margin tanked from 17% to 12% in FY22 owing to higher costs during the year.

Asset Turn 0.5x 0.5x - Asset-turn remained the same as new capacity was added in Q3FY22.

Net Debt/Equity 0.0x -0.6x - Net debt declined to owe to the repayment of debt
EV/EBITDA was higher owing to higher prices and lower EBITDA.
EV/EBITDA 10.3x 11.4x -

Exhibit 10: EV/EBITDA, ROE & ROCE Trend

14.0 12.0 11.4

12.0 10.6 10 10.4
9.5
10.0
6.9 7 7.3
8.0 6 5.8
5.3 5.0
6.0
4.0 2.7 3 3
1.7 2
2.0
0.0
2017 2018 2019 2020 2021 2022

EV/EBITDA (x) ROE (%) ROCE(%)

Source: Company, Axis Securities

Exhibit 11: Book Value (Rs)

1000 Book Value (In Rs.)

844
800 678
627
535 552 548
600

400

200

0
FY17 FY18 FY19 FY20 FY21 FY22

Source: Company, Axis Securities

Exhibit 12: Leverage Ratio

3.00 2.75
2.50
2.00 1.74 1.59
1.44 1.35
1.50 0.94
1.00 0.71 0.55 0.56
0.34 0.29 0.27 0.29 0.23
0.50 0.00 0.02
0.00
-0.50 -0.06
-1.00 -0.37
FY17 FY18 FY19 FY20 FY21 FY22

Total debt/Equity (x) Net debt/Equity (x) Net debt/EBITDA (x)

Source: Company, Axis Securities

17
Key Balance Sheet Takeaways

Working Capital Management

 The working capital intensity increased in FY22 as the cash conversion cycle deteriorated to 27 days in

FY22 from 19 days in FY21. This was on account of higher debtors and inventory and lower creditors

during the year. During the year, OCF to EBITDA conversion stood at 80% against 130% in FY21 owing

to lower PBT and higher working capital requirements.

 From FY17-FY22, the company generated a total OCF of Rs 13,284 Cr and 47% of the total OCF (Rs

6,257 Cr) was utilized towards the company’s Capex program. This indicates normal Capex intensity and

the ability of the company to add capacity at a low cost on a tonne basis. The company increased its

capacity by 44% from 25 MTPA to 35.9 MTPA between FY17-FY22. While CFO remained the major source

of funding for the company during FY17-FY22, it generated a healthy FCF of Rs 7,028 Cr during the period.

Cash Conversion Cycle

Particulars FY21 FY22 Change Comments/Analysis

Inventory Days 64 54 -10 Inventory days declined due to a better procurement strategy

Trade Receivables 25 22 -3 Receivable days declined due to better monitoring of credit drivers.

Trade Payables 73 48 25 Trade payable days reduced due to payment to suppliers.

Cash Conversion Cycle 16 27 11 Overall CCC increased to 11 days due to higher working capital requirements.

Source: the company; Axis Securities

Exhibit 13: Cash Conversion Cycle

Cash Conversion Cycle

120
96
100
75 70 73
80 66 63 60 66 64
56 54 48
60
40 29 32 27
22 21 25 25 22
10 15 16
20
0
-20 FY17 -2 FY18 FY19 FY20 FY21 FY22

Trade Receivable Days Inventory Days Trade Payable Days Cash Coversion Cycle

Source: Company, Axis Securities

18
Key Balance Sheet Takeaways (Cont...)
 Debt Levels: The company reduced its long-term debt by 17% from Rs 3,772 Cr to Rs 3,140Cr owing to

the repayment of debt during the year. The net debt/Ebitda stood at (0.59x) during the year.

 Fixed capital formation: Gross fixed capital formation improved from Rs 14,070 Cr in FY21 to Rs 16,153

Cr in FY22, an improvement of 15% as the company added new capacity to sustain growth and increase

its market share.

 Capex plans: During FY22, the company expanded its grinding capacity from 30.75 MTPA to 35.9 MTPA.

It aims to expand its total capacity to 48.5 MTPA by FY24. It has announced a capital allocation plan for

the same which entails a total Capex of Rs 9,000 Cr to be funded through judicious use of equity and debt.

 Cash and liquidity position: The cash/cash equivalent including bank balance stood at Rs 4,561 Cr (as

of 31stMar’22) compared to Rs 3,604 Cr in FY21, an increase of 26%. This includes the MTM value of IEX

Investment of Rs 2,991 Cr.

Exhibit 14: Cash & Cash Equivalent (Rs Cr)

Cash/ Cash Equivalent (Rs.Cr)

5000 4,559
3,762 3,604
4000
3,101
2,816 2,784
3000

2000

1000

0
FY17 FY18 FY19 FY20 FY21 FY22

Source: Company, Axis Securities

Exhibit 15: Gross & Net Block

20000
16,153
16000 14,071
11,570 11,764 11,568
12000 10,947 10,860
9,293 9,587 9,988

8000

4000

0
FY18 FY19 FY20 FY21 FY22

Gross Block (Rs.Cr) Net Block (Rs. Cr)

Source: Company, Axis Securities

19
Key Cash Flow Takeaways
Particulars (RsCr) FY21 FY22 Change Comments/Analysis

PBT 1361 1156 15% PBT was lower due to subdued operating performance as costs escalated during the year.

Non-cash expenses

Depreciation 1250 1237 -1% Depreciation is as per the depreciation policy of the company.

Finance Cost 319 193 -40% Finance costs were lower owing to the repayment of debt and lower interest costs.

Others -1510 -1580 5% Higher owing to profit on the sale of investment and assets

Working Capital Adjustments 781 -515 % WC adjustment was higher owing to increased WC requirement.

CFO 3604 1937 -46% Lower owing to lower profitability and higher WC requirement.

CFI -301 -1048 238% Higher owing to the addition of PPE during the year.

CFF -3375 -942 -72% Lower owing to the repayment of debt.

Capex 1035 1769 71% Higher as the company is expanding its capacity.

Free Cash Flow Generation 2569 168 -93% Higher owing to lower CFO and higher Capex during the year.
Source: the company; Axis Securities

Exhibit 16: OCF, Capex, FCF Trend(in Cr)

OCF.CAPEX, FCF (Rs. crores)

3560
4000 2404 2525
1773 1692 2114 1913
1418 1290 1054
2000 780
144
0
-2000 -356 -402
-1334 -1350 -1035
-1769
-4000
FY17 FY18 FY19 FY20 FY21 FY22

OCF Capex FCF

Source: Company, Axis Securities

Exhibit 17: OCF, EBITDA & Conversion ratio trend (Cr)

130%
4000 140%
108% 111%
3500 120%
90% 80%
3000 100%
80%
2500
80%
2000
60%
1500
1000 40%
500 20%
1718 1902 1606 2014 2090 1942 2338 2106 3604 2762 1937 2426
0 0%
FY17 FY18 FY19 FY20 FY21 FY22

OCF EBITDA Conversion Ratio

Source: Company, Axis Securities

20
Forex Analysis

 Foreign currency risk is the risk that the fair value or future cash flows of exposure will fluctuate because
of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange
rates relates primarily to the Group’s operating and financing activities and the same are hedged in line
with established risk management policies of the Group including the use of foreign exchange forward
contracts, and options and interest rate swaps.

 During the year, Forex earnings were nil and the outgo was Rs2.52 Cr against Rs2.47 Cr outgo in FY21.
No hedging activity was undertaken during the year under review. There is no outstanding forward contract
and unhedged foreign currency exposure at the year-end

Contingent Liability Analysis

Particulars (Rs Cr) FY21 FY22 Change Comments/Analysis

Claims against the group not No provision has been made based on the legal opinion gathered by the
219 218 -1
acknowledged as debt company.
No provision has been made based on the legal opinion gathered by the
Excise and Service tax 54 58 4
company.
No provision has been made based on the legal opinion gathered by
Customs 18 18 -
the company.
Sales tax/ Entry tax/ Purchase tax/ No provision has been made based on the legal opinion gathered by the
167 148 -19
Market fee company.
No provision has been made based on the legal opinion gathered by the
Income tax 50 50 -
company.
Total 508 492 --16 Any adverse decision may impact the company’s operations.

Source: the company, Axis Securities

21
Corporate Social Responsibility
 The Corporate Social Responsibility of the Group is based on the principle of Gandhian Trusteeship. For

over eight decades, the Group has addressed the issues of health care and sanitation, education, rural

development, women empowerment and other social development issues.

 The prime objective of the company’s Corporate Social Responsibility policy is to hasten social, economic

and environmental progress. The company remain focused on generating systematic and sustainable

improvement for local communities surrounding the company’s plants and project sites.

 Empowering unemployed youth by transforming them into a skilled workforce. Overall income

enhancement through livelihood creation.

 Water Harvesting and Conserving Water for Productive Use, facilitating access to clean lighting solutions,

facilitating clean cooking solutions in rural India.

 During FY22, the company spent Rs 13 Cr on CSR against Rs 8 Cr in FY21.

Corporate Governance Philosophy

 Corporate Governance is considered one of the most important elements that catalysis the growth cycle.

The Corporate Governance philosophy is aimed at creating and nurturing a valuable bond with

stakeholders and creating maximum value for them.

 Corporate governance is based on principles such as conducting the business with integrity, fairness and

transparency with regard to all transactions, making all the necessary disclosures and decisions in

compliance with the laws of the land, accountability and responsibility towards the stakeholders and

commitment to conduct business ethically.

 Its corporate structure, business, operations, disclosure practices and systems have been strictly aligned

to its corporate governance principles. The company believes in system-driven performance and

performance-oriented systems which protect the interests of all stakeholders.

22
Exhibit 18: Company’s manufacturing location

Source: Company, Axis Securities

23
Financials (Consolidated)
Profit & Loss (Rs Cr)
Y/E Mar, Rs Cr FY21 FY22 FY23E FY24E
Net sales 10,110 11,286 12,824 14,689
Other operating income 0 0 0 0
Total income 10,110 11,286 12,824 14,689

Raw Material 1,543 1,472 1,565 1,690

Power & Fuel 1,659 2,570 3,608 3,896
Freight &Forwarding 2,073 2,355 2,862 3,091
Employee benefit expenses 659 744 761 806
Other Expenses 1,414 1,719 1,868 2,092

EBITDA 2,762 2,426 2,161 3,114

Other income 181 155 179 191

PBIDT 2,943 2,581 2,340 3,305

Depreciation 1,250 1,236 1,217 1,355
Interest & Fin Chg. 295 197 230 236
E/o income / (Expense) 34 2 - -
Pre-tax profit 1,364 1,146 893 1,714
Tax provision 178 -14 232 446
RPAT 1,186 1,160 661 1,268
Minority Interests 12 29 29 29
Associates -3 13 - -
APAT after EO item 1,171 1,144 690 1,297
Source: Company, Axis Securities

Balance Sheet (Rs Cr)

Y/E Mar, Rs Cr FY21 FY22 FY23E FY24E
Total assets 21,810 24,871 26,495 27,992
Net Block 14,553 14,942 16,674 18,258
CWIP 938 1,036 500 500
Investments 121 1,305 1,305 1,305
Wkg. cap. (excl cash) 561 768 751 862
Cash / Bank balance 311 160 149 344
Misc. Assets 5,326 6,660 7,115 6,723

Capital employed 21,810 24,871 26,495 27,992

Equity capital 37 37 37 37
Reserves 12,586 15,650 16,254 17,463
Minority Interests 37 72 72 72
Borrowings 3,627 3,519 4,104 4,217
Def tax Liabilities 1,634 2,034 2,034 2,034
Other Liabilities and Provision 3,889 3,559 3,993 4,168
Source: Company, Axis Securities

24
Cash Flow (Rs Cr)
Y/E Mar, Rs Cr FY21 FY22 FY23E FY24E
Profit before tax 1,361 1,156 893 1,714
Depreciation 1,250 1,237 1,217 1,355
Interest Expenses 319 193 230 236
Non operating/ EO item -178 -157 -179 -191
Change in W/C 634 -515 17 -111
Income Tax -44 -24 -232 -446
Operating Cash Flow 3,604 1,937 1,932 2,545
Capital Expenditure -1,035 -1,769 -2,949 -2,938
Investments - 545 500 550
Others 189 123 179 191
Investing Cash Flow -301 -1,048 -2,270 -2,197
Borrowings 1,159 -1,236 585 113
Interest Expenses -396 -232 -230 -236
Dividend paid - -100 -28 -30
Others -45 -35 - -
Financing Cash Flow 72 -160 33 -15
Change in Cash -72 -53 -11 195
Opening Cash 266 195 140 129
Closing Cash 195 140 129 324
Source: Company, Axis Securities

25
Ratio Analysis (%)
Y/E Mar FY21 FY22 FY23E FY24E
Operational Ratios
Sales growth 5% 12% 14% 15%
OPM 27% 21% 17% 21%
Op. profit growth 31% -12% -11% 44%
COGS / Net sales 52% 57% 63% 59%
Overheads/Net sales 21% 22% 20% 20%
Depreciation / G. block 6.1% 7.7% 6.2% 6.0%
Effective interest rate 10% 6% 6% 6%

Efficiency Ratios
Total Asset turnover (x) 0.46 0.45 0.48 0.52
Sales/Gross block (x) 0.70 0.65 0.65 0.65
Sales/Net block(x) 0.69 0.76 0.77 0.80
Working capital/Sales (x) 0.13 0.23 0.15 0.10

Valuation Ratios
P/BV (x) 2.30 1.52 1.46 1.36
EV/Ebitda (x) 25 21 38 19
EV/Sales (x) 10.6 9.5 11.1 7.9
EV/Tonne $ (x) 2.9 2.0 1.9 1.7
128 86 81 68
Return Ratios
ROE
ROCE 9% 7% 4% 7%
ROIC 10 7 5 9
13 10 7 11
Leverage Ratios
Debt / equity (x) 0.29 0.23 0.25 0.24
Net debt/ Equity (x) 0.00 -0.06 0.01 0.03
Debt service coverage ratio (x) 0.47 0.38 0.27 0.46
Interest Coverage ratio (x) 5.74 6.83 4.89 8.26

Cash Flow Ratios

OCF/Sales 0.36 0.17 0.15 0.17
OCF/Ebitda 1.30 0.80 0.89 0.82
OCF/Capital Employed 0.22 0.10 0.09 0.12
FCF/Sales 0.20 -0.02 -0.08 -0.03

Payout ratio (Div/NP) 0.00 2.4 4.4 2.4

AEPS (Rs.) 62.7 61.2 33.8 66.4
AEPS Growth 440.1 -2.3 -44.8 96.1
CEPS (Rs.) 130 127 99 139
DPS (Rs.) 0 2 2 2
Source: Company, Axis Securities

26
 Dalmia Bharat Price Chart and Recommendation History

(Rs)

Date Reco TP Research

17-Sep-20 BUY 966 Initiating Coverage
06-Nov-20 BUY 1,083 Diwali Picks
09-Nov-20 BUY 1,083 Result Update
08-Feb-21 BUY 1,400 Result Update
05-Mar-21 BUY 1,710 Company Update
03-May-21 BUY 1,800 Result Update
28-Jul-21 BUY 2,370 Result Update
27-Sep-21 BUY 2,450 AAA
28-Oct-21 BUY 2,520 Result Update
01-Nov-21 BUY 2,520 Top Picks
03-Dec-21 BUY 2,520 Top Picks
31-Jan-22 HOLD 1,945 Result Update
11-May-22 BUY 1,635 Result Update
16-Jun-22 BUY 1,635 AAA

Source: Axis Securities

27
 About the analyst

Analyst: Uttam Kumar Srimal

Email: uttamkumar.srimal@axissecurities.in

Sector: cement/Infra

Analyst Bio: Uttam K Srimal is PGDBF from NMIMS with 20 years of experience in Equity
Market/Research.

About the analyst

Analyst: Shikha Doshi

Email: shikha.doshi@axissecurities.in

Sector: Cement/Infra

Analyst Bio: Shikha Doshi is Master of Science in Finance from Illinois Institute of Technology, Chicago,
currently handling Cement/infra sector.

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
1. Axis Securities Ltd. (ASL) is a SEBI Registered Research Analyst having registration no. INH000000297. ASL, the Research Entity (RE) as defined in
the Regulations, is engaged in the business of providing Stock broking services, Depository participant services & distribution of various financial products.
ASL is a subsidiary the company of Axis Bank Ltd. Axis Bank Ltd. is a listed public the company and one of India’s largest private sector bank and has its
various subsidiaries engaged in businesses of Asset management, NBFC, Merchant Banking, Trusteeship, Venture Capital, Stock Broking, the details in
respect of which are available on www.axisbank.com.
2. ASL is registered with the Securities & Exchange Board of India (SEBI) for its stock broking & Depository participant business activities and with the
Association of Mutual Funds of India (AMFI) for distribution of financial products and also registered with IRDA as a corporate agent for insurance business
activity.
3. ASL has no material adverse disciplinary history as on the date of publication of this report.
4. I/We, Uttam Srimal, MBA-Finance and Shikha DoshiMBA-Finance, author/s and the name/s subscribed to this report, hereby certify that all of the views
expressed in this research report accurately reflect my/the company’s views about the subject issuer(s) or securities. I/We (Research Analyst) also certify
that no part of my/the company’s compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
I/we or my/the company’s relative or ASL does not have any financial interest in the subject the company. Also I/we or my/the company’s relative or ASL
or its Associates may have beneficial ownership of 1% or more in the subject the company at the end of the month immediately preceding the date of
publication of the Research Report. Since associates of ASL are engaged in various financial service businesses, they might have financial interests or
beneficial ownership in various companies including the subject the company/companies mentioned in this report. I/we or my/the company’s relative or
ASL or its associate does not have any material conflict of interest. I/we have not served as director / officer, etc. in the subject the company in the last
12-month period.Any holding in stock – No
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for the subject the company.
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This report has been prepared by ASL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not
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28
 DEFINITION OF RATINGS

Ratings Expected absolute returns over 12-18 months

BUY More than 10%

HOLD Between 10% and -10%

SELL Less than -10%

NOT RATED We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation

UNDER REVIEW We will revisit the company’s recommendation, valuation and estimates on the stock following recent events

NO STANCE We do not have any forward looking estimates, valuation or recommendation for the stock

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especially, USA, the same may be ignored and brought to the attention of the sender. 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 ASL 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.

The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. The the company reserves the right to make modifications and alternations to this document as may be required from time to time without
any prior notice. The views expressed are those of the analyst(s) and the the company may or may not subscribe to all the views expressed therein.
Copyright in this document vests with Axis Securities Limited.
Axis Securities Limited, Dealing office: 1st Floor, I-Rise Building, Q Parc, Loma Park, Thane, Ghansoli, Navi Mumbai-400701, Regd. off.- Axis House,8th Floor, Wadia
International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025. Compliance Officer: Anand Shaha, Email: compliance.officer@axisdirect.in, Tel No: 022-
49212706

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