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Equity | India | Cement

Company Report
Market Data

A Comparative Study : Top 3 Cement Players


Ambuja our top pick in Cement space
September 20, 2011

ACC, Ambuja and Ultratech A Comparative Study


Ambuja ACC A 500410 ACC ACC IN Ultratech A 532538 ULTRACEMCO UTCEM IN A 500425 AMBUJACEM ACEM IN

BSE Group BSE Code NSE Code Bloomberg Code

Ambuja leading the other two top cement majors

Stock Details (Ambuja Cement)


Market Cap (`mn) Free Float (%) 52wk Hi/Lo Avg. Daily Volume (NSE) Face Value (`) Dividend (` per share) Shares Outstanding (mn) 221,350 50% 166 / 112 2,727,356 2 2.6 1,531.6

Capacity utilization gives us an indication of companys position in the minds of the end users, as 64% of consumption is from individual housing segment. Historically, Ambuja cements capacity utilization has been the highest compared to ACC and Ultratech, barring FY08, where capacity utilization of ACC was highest among the three. With GOI envisaged to invest US$1tn in infrastructure in XII Five Year Plan, key beneficiaries would be the companies with larger installed capacities. With merger of Samridhi Cement with Ultratech, Ultratechs installed capacity is the highest, however ACC and Ambuja being a part of same management Holcim, combined capacity far exceeds Ultratech. Companies with larger share of trade sales in their overall sales mix tend to have a higher average realisation. Accordingly, Ambujas trade sales which accounts for over 90% of total sales vs ACC and Ultratech (70-80%) has higher net realisation per bag. Given the seasonal, cyclical and capital intensive nature of cement DuPont analysis captures the value accruable to share holders more precisely and accurately. Accordingly DuPont analysis indicates that, Ambuja with low leverage and better net profit margin scores over ACC and Ultratech. With most of the companies at their last leg of capacity expansion, which is evident from the reversal of increasing trends of Capital Work In-Progress (CWIP) during the last financial year coupled with increasing gross block over last 5-6 years. In our opinion, companies with low leverage would safe guard the share holders value from any large down trend. Cash flow analysis Indicates Ambuja and ACCs Cash Flow from Operations (CFO), were sufficient for use of funds to reduce debt and make investment. While for Ultratech, though Y-o-Y basis the figures for Ultratech in FY11 are not comparable due to merger of Samridhi with itself, however cross sectional analysis of FY11 indicates the Cash Flow from Operations (CFO) were not sufficient to cover up the Cash Flow from Financing (CFF) and Cash Flow from Investment (CFI) activities. Owing to the prevailing over supply situation across the regions and also with lack of visibility on the demand front, we have valued the cement business of Ambuja, ACC and Ultratech using replacement cost method at current market price; we observe that Ambuja trades at a premium as compared to its peers. Plotting the value of cement business over last one year also indicates that, Ambuja always trades at a premium, with premium varying somewhere between $4/MT $30/MT vs Ultratech and between $1/MT - $30/MT vs ACC.

Stock Details (ACC Ltd)


Market Cap (`mn) Free Float (%) 52wk Hi/Lo Avg. Daily Volume (NSE) Face Value (`) Dividend (` per share) Shares Outstanding (mn) 195,366 50% 1,142 / 917 371,154 10 30.5 187.7

Stock Details (Ultratech Cement)


Market Cap (`mn) Free Float (%) 52wk Hi/Lo Avg. Daily Volume (NSE) Face Value (`) Dividend (` per share) Shares Outstanding (mn) 307,815 40 1,188 / 890 157,511 10 6 274.0

Shareholding Pattern (%)


Ambuja Cement Promoters 50.39 ACC Cement Promoters 50.3 Ultratech Promoters 63.35 FIIs 13.37 DII 7.81 Others 15.47 FIIs 15.23 DII 15.31 Others 19.16 FIIs 23.74 DII 14.64 Others 11.23

Manohar Annappanavar +91-22- 66182696 manohar@geplcapital.com

Analyst

GEPL Capital Research

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Price Outlook and Valuation:

September 20, 2011

With Jindal and Jaypee to hit the AP market in Oct 2011, with additional capacities of 5mtpa each and no revival in demand expected over Telangana issue, as a result we believe cement prices would decline in AP. While prices in rest of India are expected to improve post monsoon with pick up in demand, positively impacting the valuation of cement companies. Ambuja having no exposure to AP is well positioned vs ACC and Ultratech, hence we believe the increasing trend of premium for cement business of Ambuja vs Ultratech & ACC to increase from current levels over next 3-4 months, however the long term sustainability depends on overall growth of economy. In addition to this Ambuja with 8 ships and 2 new ships expected by year end coupled with 3 bulk handling terminal gives its an edge over others. All this facility not only provides Ambuja an access to export markets for cement / import of coal but also gives an access to cheapest mode of transport i.e., sea route, Ambuja is the only company in the domestic cement industry to use sea route with 10% of total cement shipped through sea form Ambujanagar to Surat and Mumbai markets.

Scoring based on objective analysis


Scores Parameter Installed Capacity Net Additions Since 2004 Debt to Equity Net Profit Margin Asset Turnover Leverage Capacity Utilization Cash flow from Operations Cash flow from Investment Activities Cash flow from Financing Activities Net Realisation per Bag Valuation of Cement Business (Using Replacement Cost method -Refer Annexure I($/MT)) Total Scores
* values are post merger of Samridhi Cement

ACC 30 13.8 0.08 13.0% 0.74 1.8 79% 19,410 (20,950) (6,567) 179 117

Ambuja 25 12.1 0.01 17.1% 0.71 1.4 81% 18,740 (5,271) (4,735) 204 142

Ultratech 52 7.6 0.52* 9.9% 0.63 2.0 68% 20,702 (22,399) 2,481 165 126

ACC 3 4 3 3 4 3 3 3 3 2 31

Ambuja 3 4 4 4 3 4 4 4 4 4 38

Ultratech 4 3 2 2 2 2 2 2 2 2 23

Scoring based on subjective analysis


Other Parameters Access to high growth Areas like North, East, West and North East Inconsistent domestic coal linkage to help cos with access to Imported Coal Access to Export Market Use of cheapest mode of transport - Sea transport Total Scores Grand Total
Source: Capitaline, Company data, GEPL Capital Research

Scores ACC 3 NA NA NA 3 34 Ambuja 4 3 4 10% of Sales 11 49 Ultratech 3 3 4 Nil 10 33

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Historical comparison of Top 3 companies in detail:
Capacity Utilization:

September 20, 2011

Cement with a very short shelf life of 3 months, production follows consumption very closely. In our opinion, given the current over supply situation capacity utilization gives us an indication of companys position in the minds of the end users, as 64% of consumption is from individual housing segment. Hence, companies with better capacity utilization would benefit the most. Historically, Ambuja cements capacity utilization has been the highest compared to ACC and Ultratech, barring FY08, where capacity utilization of ACC was highest among the three. Capacity Utilization ACC Ambuja Ultratech*
* values are for financial year

Mar-04 91% 81% 78%

Dec-05 68% 96% 78%

Dec-06 94% 139% 86%

Dec-07 89% 91% 83%

Dec-08 92% 81% 72%

Dec-09 82% 86% 76%

Dec-10 79% 81% 68%

Capacity Utilization
160% 140% 120% 100% 80% 60% 40% M ar-04 Dec-05 Dec-06 ACC Dec-07 Ambuja Dec-08 Dec-09 Ultratech Dec-10

Source: Capitaline, Company data, GEPL Capital Research

Installed Capacity (in mn MT)


With government envisaged to invest $1tn over next five year plan, we believe the company with huge installed capacities to benefit over long term horizon. With merger of Samridhi Cement with Ultratech, Ultratechs installed capacity is the highest, however ACC and Ambuja being a part of same management Holcim, combined capacity far exceeds Ultratech. Installed Capacity ACC Ambuja Ultratech Mar-04 16.1 12.9 15.5 Dec-05 19.0 13.3 15.5 Dec-06 19.9 16.3 17.0 Dec-07 22.4 18.5 17.0 Dec-08 22.6 22.0 18.2 Dec-09 26.2 22.0 21.9 Dec-10 27.1 25.0 23.1 Mar-11 30.0 25.0* 52.0 Net Addition since 2004 13.8 12.1 7.6

* Current Capacity is 26.9 mtpa

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Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Installed Capacity (In mn MT)
60.0 50.0 40.0 30.0 20.0 10.0 0.0 Mar-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Mar-11

September 20, 2011

ACC

Ambuja

Ultratech

Source: Capitaline, Company data, GEPL Capital Research

Net Realisation per Bag


Companies in cement sector operate in two segments, trade and non-trade, trade sale is generally characterized by low volume and high realisation per transaction and on the contrary non-trade is characterized by high volume but sold at a discount of `10 to ` 30 per bag depending on the brand, season, size of order, region of operation and client. Companies with larger share of trade sales in their overall sales mix tend to have a higher average realisation. Accordingly, Ambujas trade sales which accounts for over 90% of total sales vs ACC and Ultratech (70-80%) has higher net realisation per bag. Realisation (`/ Bag) ACC Ambuja Ultratech*
* values are for financial year

Mar-04 93 110 91

Dec-05 110 119 109

Dec-06 145 155 147

Dec-07 164 190 161

Dec-08 170 201 171

Dec-09 184 205 171

Dec-10 179 204 165

Net Realisation per Bag


230 210 190 170 150 130 110 90 70 Mar-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

ACC

Ambuja

Ultratech

Source: Capitaline, Company data, GEPL Capital Research

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Capital Work In Progress:

September 20, 2011

With most of the companies at their last leg of capacity expansion, which evident from reversal of increasing trends of CWIP during the last financial year coupled with increasing gross block over last 5-6 years. In our opinion companies with low debt to equity would safe guard the share holders value from any large down trend. CWIP ACC Ambuja Ultratech Mar-04
967.9 1,503.3 277.1

Dec-05
2,177.5 ,1195.6 1,411.7

Dec-06
5,515.1 6,355.2 6,971.9

Dec-07
6,452.8 6,969.0 22,834.1

Dec-08
16,114.0 19,472.3 6,782.4

Dec-09
21,574.7 27,144.4 2,603.8

Dec-10
15,641.5 9,307.1 12,019.3*

* values are post merger of Samridhi Cement

Capital Work In Progress


30000 25000 20000 15000 10000 5000 0 M ar-04 Dec-05 Dec-06 ACC Dec-07 Ambuja Dec-08 Dec-09 Dec-10

Ultratech

Source: Capitaline, Company data, GEPL Capital Research

Debt to Equity ratio:


Given the over supply scenario in cement industry, higher inflationary pressures and with no significant development on the Government investment, we believe company such as Ambuja and ACC with low debt to equity ratio are better positioned compared to Ultratech. Debt to Equity ACC Ambuja Ultratech# Mar-04 1.09 0.83 1.58 Dec-05 0.55 0.48 1.39 Dec-06 0.29 0.22 0.89 Dec-07 0.08 0.07 0.64 Dec-08 0.10 0.05 0.59 Dec-09 0.10 0.03 0.35 Dec-10 0.08 0.01 0.52*

* values are post merger of Samridhi Cement

# values are for financial year

Debt to Equity ratio


1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 M ar-04 Dec-05 ACC Dec-06 Dec-07 Ambuja Dec-08 Dec-09 Ultratech Dec-10

Source: Capitaline, Company data, GEPL Capital Research

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


DuPont Analysis

September 20, 2011

Well known DuPont analysis, with Net Profit margin, Asset Turnover ratio and Leverage explains the operational, asset utilization and financial capabilities of a company over a long term horizon. Given the seasonal, cyclical and capital intensive nature of cement DuPont analysis captures the value accruable to share holders more precisely and accurately. Accordingly DuPont analysis indicates that, Ambuja with low leverage and better net profit margin scores over ACC and Ultratech.

Net Profit Margin:


Historically, Ambuja enjoys better net profit margin owing to larger proportion of sales to high realization segment (Selling 90% of Cement in to a retail segment) and also on account better product mix Portland Pozzolana Cements(PPC) Share of total accounts for more than 80%). Net Profit Margin ACC Ambuja Ultratech* Net Profit Margin
35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% M ar-04 Dec-05 ACC Dec-06 Dec-07 Ambuja Dec-08 Dec-09 Ultratech Dec-10

Mar-04 6.3% 16.0% 0.8%

Dec-05 15.4% 17.4% 6.7%

Dec-06 21.5% 26.2% 15.8%

Dec-07 20.6% 32.5% 18.0%

Dec-08 14.5% 22.4% 14.9%

Dec-09 18.4% 17.2% 15.3%

Dec-10 13.0% 17.1% 9.9%

* values are for financial year

Source: Capitaline, Company data, GEPL Capital Research

Asset Turnover Ratio:


On account of recent capacity addition by most of the players the total asset turnover ratio is on the declining trend since Dec-06. Going forward with government envisaged to invest US$1 trn in XIIth plan we believe this would help the companies such as Ambuja and ACC who are at their fag end of expansion plan as evident from declining CWIP. Asset Turnover ACC Ambuja Ultratech* Mar-04 0.84 0.58 0.61 Dec-05 0.67 0.70 0.93 Dec-06 0.95 1.08 1.06 Dec-07 0.97 0.84 0.90 Dec-08 0.87 0.79 0.85 Dec-09 0.83 0.80 0.86 Dec-10 0.74 0.71 0.63

* values are for financial year

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Asset Turnover Ratio
1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40 M ar-04 Dec-05 ACC Dec-06 Dec-07 Ambuja Dec-08 Dec-09 Ultratech Dec-10

September 20, 2011

Source: Capitaline, Company data, GEPL Capital Research

Leverage:
Ambuja enjoys the lowest leverage compared to Ultratech and ACC, on account of low debt. Leverage ACC Ambuja Ultratech* Mar-04 2.95 2.38 3.55 Dec-05 2.32 1.83 3.50 Dec-06 1.92 1.50 2.65 Dec-07 1.72 1.39 2.32 Dec-08 1.79 1.38 2.15 Dec-09 1.73 1.37 1.82 Dec-10 1.79 1.42 2.04

* values are for financial year

Leverage Ratio
4.00 3.50 3.00 2.50 2.00 1.50 1.00 M ar-04 Dec-05 Dec-06 ACC Dec-07 Ambuja Dec-08 Dec-09 Ultratech Dec-10

Source: Capitaline, Company data, GEPL Capital Research

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Cash flow analysis:

September 20, 2011

Cash flow analysis since FY05 indicates, that on account of overall pick up in economy the cash flow from operations of cement companies are more stable, as most of the expansions were funded internally. Ambuja and ACCs cash flow from operations were sufficient for use of funds to reduce debt and make investment. Though Y-o-Y basis the figures for Ultratech in FY11 are not comparable due to merger of Samridhi with itself, however cross sectional analysis of FY11 indicates the Cash Flow from Operations (CFO) were not sufficient to cover up the Cash Flow from Financing (CFF) and Cash Flow from Investment (CFI).

Cash Flow Analysis Ambuja Cement:


The Companys Cash flow from operation has declined in 2010 vs 2009. Ambuja has been able to fund its expansion repay the debt through internal accruals. Cash Flow Statement Analysis (Ambuja) Mar-04 CFO CFI CFF Cash Flow Ambuja Cement:
25.0 20.0 15.0
( '000s)

Dec-05 7,293.1 (2,989.5) (4,122.3)

Dec-06 18,409.4 (5,891.0) (9,672.9)

Dec-07 15,441.9 (1,624.8) (11,178.1)

Dec-08 9,752.4 (9,124.2) (4,990.7)

Dec-09 21,263.9 (11,941.6) (4,659.4)

Dec-10 18,739.7 (5,270.8) (4,734.5)

5,924.3 (2,697.7) (2,747.0)

Cash Flow - ACC


30.0 20.0 10.0 0.0 (10.0) (20.0) (30.0)

10.0 ( '000s) 5.0 0.0 (5.0) (10.0) (15.0) Mar-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

Mar-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

CFO

CFI

CFF

CFO

CFI

CFF

Source: Capitaline, Company data, GEPL Capital Research

Cash Flow Statement Analysis (ACC)


The Companys Cash flow from operation has declined in 2010 vs 2009. ACC has been able to fund its expansion repay the debt through internal accruals. Mar-04 CFO CFI CFF 5,200.8 (4,053.2) (494.1) Dec-05 6,742.7 (2,370.7) (4,180.5) Dec-06 14,110.4 (4,677.4) (4,272.5) Dec-07 20,423.1 (10,749.2) Dec-08 17,079.3 (2,975.1) Dec-09 23,756.3 (4,546.3) Dec-10 19,409.6 (6,566.6)

(8,434.7) (11,653.5)

(26,252.0) (20,949.7)

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Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Cash Flow Analysis- Ultratech:

September 20, 2011

In case of Ultratech the Cash flow from operations were not sufficient to make up for cash required for investments hence the same has been sourced from financing activities which is evident from increasing debt on the balance sheet. Dec-05 CFO CFI CFF 3,464.3 (905.2) (2,438.8) Dec-06 5,638.8 (3,645.9) (1,910.6) Dec-07 11,189.4 (10,466.3) (405.9) Dec-08 13,858.1 (14,419.1) 702.9 Dec-09 14,515.5 (16,526.9) 1,915.2 Dec-10 15,905.0 (8,431.2) (7,403.7) Mar-11 20,702.4 (22,399.0) 2,480.7

Cash Flow - Ultratech


25.0 20.0 15.0 10.0 5.0 ( '000s) 0.0 (5.0) (10.0) (15.0) (20.0) (25.0) Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11

CFO

CFI

CFF

Source: Capitaline, Company data, GEPL Capital Research

Replacement Cost method :


Given the over supply situation in the domestic cement sector and also with no significant reforms in the end user segment around the corner. Companies in the asset based sectors like Cement, tend to trade near its replacement cost or even below. On the contrary, an indication of expectation of pick up in volume or a sharp price increase in the near term, takes the valuation of cement business above their replacement cost maintaining a gap of premium between the companies (Refer Chart below). However the long term sustainability of value of cement business above replacement cost depends on the overall growth of the economy. Trends in valuation of cement business (US$/MT) over last one year
160

150

140

130

120

110

100 Jul-11 Nov-10 Sep-10 May-11 Dec-10 Mar-11 Oct-10 Oct-11 Nov-11 Apr-11 Aug-11 ACC Jan-11 Jun-11 Feb-11 Sep-11

Ultratech

Ambuja

Source: Capitaline, Company data, GEPL Capital Research

GEPL Capital Research | Company Report

Equity | India | Cement

A Comparative Study : Top 3 Cement Players

September 20, 2011

We have valued the assets of ACC, Ambuja and Ultratech, by assuming replacement cost of thermal captive power plant at ` 50 mn/MW, wind power at ` 120mn/MW and valuing other assets based on the historical cost method. It can be inferred that Ambuja currently trading at a premium compared to both ACC and Ultratech. Plotting the valuation of cement business over last one year also indicates that Ambuja commands a premium over ACC and Ultratech with variation in premium depending on variation in regional demand supply and prices at any given point in time. With Ambuja having no exposure to oversupply regions like South and also with demand expected to pick up in regions like West, North and East post monsoon, where it gets the most of its revenue from, we believe Ambuja to be a clear winner.

Price Outlook and View point:


Cement prices in Southern India (AP, Karnataka, Kerala and TN) are the highest in India on account of production discipline being followed by most of the players since September 2010.With new capacities of Jindal and Jaypee to hit the AP market with additional capacities of 5mtpa starting October 2011 and also with consumption showing a de- growth of 7.5% as against flat growth in all India cement consumption of 0.4% in Q1FY12, we believe the upside for cement price as well as volume is not very significant. Accordingly, the potential upside for companys valuation is also not very significant, particularly for companies operating in AP. On the contrary with demand expected to pickup in rest of India and no huge capacity to hit the markets in the short term, we believe the potential upside for price as well as volume is very high. Ambuja having no exposure to AP is well positioned vs. ACC and Ultratech, hence we believe the increasing trend of premium for cement business of Ambuja vs. Ultratech & ACC to increase from current levels over next 3-4 months and however the long term sustainability depends on overall growth of economy.

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Equity | India | Cement

A Comparative Study : Top 3 Cement Players


Valuation Snapshot
PE Ambuja Cement Ultratech Cem. ACC Cem. 13 13 14 CMP 144 1,123 1,039 Mcap (mn `) 221,350 307,815 195,366 Cap (mn) 27 52 30 EV/MT ($) 182 154 141 PBIDT Margins Quarter Ending ( %) FY11 26.0% 20.1% 22.1% Jun'10 30.8% 25.7% 28.8% Sep'10 19.1% 13.5% 13.1% Dec'10 19.3% 19.6% 13.6% Mar'11 28.2% 23.9% 23.9% Jun'11 27.3% 27.9% 23.8% FY11 16.8% 10.5% 14.2%

September 20, 2011

PAT Margins Quarter Ending ( %) Jun'10 18.7% 13.9% 17.4% Sep'10 9.6% 3.6% 5.9% Dec'10 13.8% 8.5% 12.6% Mar'11 18.3% 16.0% 14.5% Jun'11 15.9% 15.5% 13.8%

Source: Capitaline, Company data, GEPL Capital Research, EV=Mcap+debt-Cash& Cash equivalent-Minority interest.

Stock Performance vs Sensex


115

Relative Performance Ambuja

1 Month 8.7% 3.5% 15.1% 3.7%

3 Months 8.7% 1.4% 9.6% (6.3)%

6 Months 9.7% 3.1% 11.7% (12.3)%

1 Year (0.9)% 4.2% 5.4% (15.9)%

110

ACC
105

Ultratech
100

SENSEX
95 90 85 80 Apr-11 Jul-11 Aug-11 Feb-11 Oct-10 Nov-10 Dec-10 Sep-10 Jan-11 Mar-11 Jun-11 May-11 Sep-11

Ultratech

Ambuja

ACC

Sensex

Source: Capitaline

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Equity | India | Cement

A Comparative Study : Top 3 Cement Players


NOTES

September 20, 2011

Recommendation rationale
Recommendation BUY ACCUMULATE NEUTRAL REDUCE SELL Expected absolute return (%) over 12 months >20% <20% and >10% <-10% and <10% >-10% and <-20% >-20%

Expected absolute returns are based on share price at market close unless otherwise stated. Stock recommendations are based on absolute upside (downside) and have a 12-month horizon. Our target price represents the fair value of the stock based upon the analysts discretion. We note that future price fluctuations could lead to a temporary mismatch between upside/downside for stock and our recommendation.
GEPL CAPITAL Pvt Ltd (formerly known as Gupta Equities Pvt. Ltd.) Head Office: D-21/22 Dhanraj mahal, CSM Marg, Colaba, Mumbai 400001 Reg. Office : 922-C, P.J. Towers, Dalal Street, Fort, Mumbai 400001 Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Name : Manohar Annappanavar Sector : Cement Disclaimer: This report has been prepared by GEPL Capital Private Limited ("GEPL Capital "). GEPL Capital is regulated by the Securities and Exchange Board of India. This report does not constitute a prospectus, offering circular or offering memorandum and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities. This report is for distribution only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment strategy, recommendation or any other content contained herein is suitable or appropriate to a recipients individual circumstances or otherwise constitutes a personal recommendation. All investments involve risks and investors should exercise prudence in making their investment decisions. The report should not be regarded by the recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of GEPL Capital as a result of using different assumptions and criteria. GEPL Capital is under no obligation to update or keep current the information contained herein. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related instrument mentioned in this report. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments. There is no representation that any transaction can or could have been effected at those prices and any prices do not necessarily reflect GEPL Capitals internal books and records or theoretical model-based valuations and may be based on certain assumptions. Different assumptions, by GEPL Capital or any other source may yield substantially different results. GEPL Capital makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. Further, GEPL Capital assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events, or otherwise. Neither GEPL Capital nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. In no event shall GEPL capital be liable for any direct, special indirect or consequential damages, or any other damages of any kind, including but not limited to loss of use, loss of profits, or loss of data, whether in an action in contract, tort (including but not limited to negligence), or otherwise, arising out of or in any way connected with the use of this report or the materials contained in, or accessed through, this report. GEPL Capital and its affiliates and/or their officers, directors and employees may have similar or an opposite positions in any securities mentioned in this document (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). The disclosures contained in the reports produced by GEPL Capital shall be strictly governed by and construed in accordance with Indian law. GEPL Capital specifically prohibits the redistribution of this material in whole or in part without the written permission of GEPL Capital and GEPL Capital accepts no liability whatsoever for the actions of third parties in this regard.

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