Country

India I Equities

Daily

1 January 2014

India Morning Bell

Sensex: 21171

All the latest research and data

Nifty: 6304

Tata Global Beverages - Costs under control, but fairly valued; downgrade to Hold. TGB has been incurring higher ad and promotion spends in the past two quarters, which has impacted its operational profitability. However, the stock price has rallied sharply in the recent past and currently leaves very little elbow room in terms of upside, from a valuation perspective. While we maintain our target price and projections for FY14 and FY15, we downgrade our recommendation to Hold, with a price target of `168. Amol Rao, [email protected] ► Cholamandalam Investment and Finance - Steady growth, higher NIM and productivity; Buy. Over the past several quarters, Chola’s disbursement growth has been higher than the industry, largely driven by product diversification and deeper penetration. Growth in tractor, LCVs, used vehicles and LAP could drive faster-than-system AUM growth of 24% over FY13-16e. Despite liquidity tightening measures introduced by RBI, Chola’s calculated NIM on AUM, at 7.6%, was stable yoy. Loan growth would continue to be healthy for the remaining fiscal despite the subdued CV and tractor cycle. Higher NIM and productivity could drive sharp improvement in profitability over FY13-16. The stock is trading at 1.3x FY15e BV, favoured by risk-reward. Our target is based on the twostage DDM. Kaitav Shah, [email protected] ►

India Research Team +9122 6626 6666 [email protected]

Markets Sensex Nifty Dow Jones S & P 500 FTSE Nikkei* Hang Seng*

31 Dec’13

1 Day

YTD

21171 6304 16577 1848 6749 16291 23306

0.1% 0.2% 0.4% 0.4% 0.3% 0.7% 0.3%

9.0% 6.8% 26.5% 29.6% 14.4% 0.0% 0.0%

31 Dec’13

1 Day

Avg '13

268 1,362 8,456

-35.1% -2.6% -21.9%

356 1,950 25,950

31 Dec’13*

MTD

YTD

250 200 50

6,358 4,916 1,442

133,120 114,254 18,902

899 930 -31

44,198 42,716 1,158

960,476 948,560 11,993

99 144 -45

823 1,004 -181

17,624 21,541 -3,878

Volumes (US$m) Cash BSE Cash NSE Derivatives (NSE)

Flows (US$m)

(`bn) 28,000

(%) 30.0

24,000

25.0 20.0

20,000

15.0 16,000 10.0 12,000

5.0

Gross domestic savings Source: RBI

YoY (RHS)

Dec-12

Dec-11

Dec-10

Dec-09

Dec-08

Dec-07

Dec-06

Dec-05

Dec-04

(5.0) Dec-03

4,000 Dec-02

Dec-01

8,000 Dec-00

Chart of the day

India: Gross domestic-savings growth declined in 2012

FII – Cash Buy Sell Net FII - Derivatives Buy Sell Net DII – Cash Buy Sell Net

Others Oil Brent (US$/bbl)* Gold (US$/oz)* Steel (US$/MT) `/US$ US$/Euro* Yen/US$* Call Rate 10-year G-Secs EMBI spreads

31 Dec’13

1 Day

YTD

110.8 1,205.9 585.0 61.80 1.38 105.37 8.75% 8.83% 334.26

-0.4% 0.0% 0.0% 0.0% -0.1% -0.1% .bps .bps -3.8bps

6.5% 0.0% 0.4% -11.0% -4.1% -17.7% -25.bps .bps 85.9bps

@7:30am *Provisional Source: BSE, Bloomberg

Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research

India Equities

1 January 2014

India Morning Bell

Market Data

Large Caps

Mid Caps

Small Caps

(>US$1bn)

(US$250m-1bn)

(US$100m-250m)

Price Performance Top-5 gainers Company

Price Performance Top-5 gainers Company

CMP (INR)

1 wk (%)

1 Mth (%)

JUST DIAL LTD

1442

9.9

18.0

KANSAI NEROLAC P

1170

8.3

APOLLO HOSPITALS

946

8.2

VEDANTA RESOURCE

957

7.7

6.0

LANCO INFRATECH

64

6.2

6.6

BALKRISHNA INDS

1 wk (%)

1 Mth (%)

TVS MOTOR CO LTD

76

16.5

38.7

11.2

BAJAJ ELECTRICAL

224

14.0

33.4

OPTO CIRCUITS

13.5

EIH LTD

63

12.2

17.7

ACCELYA KALE SOL

8

11.7

29.7

RUCHI SOYA INDUS

341

10.0

19.3

C MAHENDRA EXP L

CMP (INR)

1 wk (%)

1 Mth (%)

CMP (INR)

1 wk (%)

1 Mth (%)

183

(4.3)

(3.3)

INDIAN INFOTECH

25

(10.4)

(22.0)

1911

(4.0)

(3.2)

SKS MICROFINANCE

190

(8.1)

11.4

CROMPTON GREAVES

129

(3.8)

3.0

DEWAN HOUSING

213

(4.3)

BHARAT FORGE CO

328

(3.2)

10.0

JM FINANCIAL LTD

29

RANBAXY LABS LTD

453

(3.0)

7.4

THOMAS COOK LTD

CMP (INR)

1 wk avg

1/4 wk (%)

10,068

50,276

183.2

2,749

15,804

181.0

NEYVELI LIGNITE Top-5 losers Company MOTHERSON SUMI BAJAJ AUTO LTD

CMP (INR)

1 wk (%)

72

25.7

35.2

28

24.3

30.6

759

22.3

20.8

38

21.1

26.3

229

21.0

10.0

CMP (INR)

1 wk (%)

1 Mth (%)

101

(7.7)

(34.3)

SITI CABLE NETWO

17

(7.6)

(1.7)

25.4

ISGEC HEAVY ENGI

865

(6.5)

(1.3)

(4.3)

1.0

SUVEN LIFE SCIEN

72

(6.4)

3.9

84

(4.2)

7.3

MARKSANS PHARMA

18

(6.4)

43.7

CMP (INR)

1 wk avg

1/4 wk (%)

CMP (INR)

1 wk avg

1/4 wk (%)

PINE ANIMATION L

93

59,016

299.8

ASIAN STAR CO

609

30

300.0

KSK ENERGY VENTU

67

264,879

239.9

CLARIS LIFESC

193

8,026,202

298.6 278.8

Top-5 losers Company

Volume Volume spurts Company

Price Performance Top-5 gainers Company

CMP (INR)

Volume

BOSCH LTD SANOFI INDIA LTD APOLLO HOSPITALS

Volume spurts Company

GITANJALI GEMS L

Top-5 losers Company INDIA TOURISM

1 Mth (%)

Volume Volume spurts Company

946

734,445

150.2

RUPA & CO LTD

220

154

190.6

TD POWER SYSTEMS

237

95,201

NEYVELI LIGNITE

64

685,932

108.2

FRESENIUS KABI O

132

360,525

183.5

GREENPLY INDUS

370

58,784

267.9

ING VYSYA BANK

612

210,722

85.2

29

553,477

171.2

DHANUKA AGRITECH

204

525,491

237.9

CMP (INR)

200D Avg

(%)

263

78

242.0

HMT LTD

Technicals

Technicals

Technicals

Above 200 DMA Company

Above 200 DMA Company

Above 200 DMA Company

CMP (INR)

200D Avg

(%)

393

211

86.0

TATA COMMUNICATI TECH MAHINDRA LT

309 1,838

213 1,280

44.5 43.4

MINDTREE LTD

1,529

1,068

42.9

463

326

41.9

CMP (INR)

200D Avg

(%)

130

159

(18.2)

AUROBINDO PHARMA

BIOCON LTD Below 200 DMA Company UNION BANK INDIA

# # #

CMP (INR)

200D Avg

(%)

VAIBHAV GLOBAL L

663

231

186.9

PARAG SHILPA INV

BF UTILITIES LTD TVS MOTOR CO LTD

523 76

240 40

117.9 89.6

DHANLEELA INVEST KELVIN FINCAP LT

207 380

68 158

207.6 141.1

OUT OF CITY TRAV

291

161

81.3

CEAT LTD

321

150

115.0

INFOTECH ENT

341.4

205.5

66.0

MARKSANS PHARMA

18

8

113.0

Below 200 DMA Company

CMP (INR)

200D Avg

(%)

Below 200 DMA Company

CMP (INR)

200D Avg

(%)

360

838

(57.0)

INDIA TOURISM

101

696

(85.2)

STRIDES ARCOLAB

ESSAR OIL LTD

54

63

(14.3)

MMTC LTD

53

106

(50.2)

GITANJALI GEMS L

72

240

(70.2)

CENTRAL BK INDIA

51

59

(13.3)

WOCKHARDT LTD

453

877

(48.9)

FINANCIAL TECHNO

185

438

(57.4)

1,029

1,161

(11.2)

JET AIRWAYS IND

292

402

(27.6)

JAYBHARAT TEXTIL

35

52

(33.5)

214

235

(8.9)

RAJESH EXPORTS

77

106

(26.8)

NCL RESEARCH & F

1,140

1,694

(32.5)

BHARAT ELECTRON INDIAN OIL CORP

Source: Bloomberg

Anand Rathi Research

India Equities

Tea & Coffee India I Equities

Company Update Change in Estimates  Target  Reco 

1 January 2014

Tata Global Beverages

Rating: Hold Target Price: `168 Share Price: `160

Costs under control, but fairly valued; downgrade to Hold Key takeaways

Key data

International tea prices hold steady. Tata Global Beverages’ (TGB) international operations, housed in Tetley, comprise 45% of its turnover and 28% of EBIDTA. A disproportionately large portion of the tea sold by Tetley consists of black tea (~85%), largely sourced from Kenya. Prices of Kenyan black tea have been trading in a band of US$ 2.1-2.2/kg this quarter. Even Ceylon (Sri Lanka) teas, comprising ~10% of Tetley’s raw material, have been range-bound at US$ 3.6-3.7/kg during the period. This is positive for Tetley as stable raw material prices are a harbinger of decent profitability, especially in the face of intensifying competition and declining volumes in the international, branded black tea market. Outlook stable for Indian tea business. Despite bountiful crop in the India during FY14, prices have held firm at `120-130/kg due to domestic trade dynamics. With the plucking season having concluded, domestic prices of black tea are expected to be stable through the remainder of the year. Thus, we expect TGB to maintain its OPM at 10% in 3QFY14 in its Indian tea business through judicious cost control and timely price hikes. Coffee business delicately poised. TGB’s domestic and international coffee businesses have been going from strength to strength, on account of a reinvigorated product portfolio and volume growth due to better distribution. However, international coffee prices have heading South in the recent past and if not nimble, TGB’s international coffee operations, housed in Eight O’ Clock Coffee (EOC) could end up being saddled with higher priced inventory. ` Our take. TGB has been incurring higher ad and promotion spends in the past two quarters, which has impacted its operational profitability. However, the stock price has rallied sharply in the recent past and currently leaves very little elbow room in terms of upside, from a valuation perspective. While we maintain our target price and projections for FY14 and FY15, we downgrade our recommendation to Hold, with a price target of `168. Key financials (YE Mar)

Sales (`m) Net profit (`m) EPS (`)

FY11

FY12

FY13e

FY14e

FY15e

59,824

66,312

73,510

77,028

79,970

2,542

3,562

3,728

5,080

5,156

TGBL IN / TACL.BO

`170 / `122 21170 / 6304 US$6m `99bn/US$1.6bn 618m

52-week high / low Sensex / Nifty 3-m average volume Market cap Shares outstanding

Shareholding pattern (%)

Sep-13

Jun-13

Mar-13

Promoters - of which, Pledged Free Float - Foreign Institutions - Domestic Institutions - Public

35.1 18.7 64.9 20.61 16.9 27.39

35.2 18.7 64.8 17.85 18.51 28.44

35.2 18.7 64.8 17.77 18.46 28.57

Relative price performance

Source: Bloomberg

4.1

5.8

6.0

8.2

8.3

(21.2)

40.1

4.6

36.3

1.5

PE (x)

39.0

27.8

26.6

19.5

19.2

PBV (x)

2.5

2.2

2.1

1.9

1.8

Amol Rao

RoE (%)

6.2

7.3

8.3

7.9

9.3

RoCE (%)

8.7

9.2

11.2

11.2

12.0

+9122 6626 6615 [email protected]

Dividend yield (%)

1.2

1.3

1.3

1.3

1.3

Deepak Agarwal

Net gearing (%)

1.1

7.3

6.6

2.6

(2.4)

+9122 6626 6520 [email protected]

Growth (%)

Source: Company, Anand Rathi Research

Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research

India Equities

1 January 2014

Tata Global Beverages – Costs under control, but fairly valued; downgrade to Hold

Quick Glance – Financials and Valuations Fig 2 – Balance sheet (`m)

Fig 1 – Income statement (`m) Key financials (YE Mar)

Net sales Sales growth (%) - Op. expenses EBIDTA EBITDA margins (%) - Interest - Depreciation + Other income - Tax Income tax rate PAT Extraordinary items Minority Interest Profit from Ass. Co.s Adjusted PAT FDEPS (Rs / share)

FY11

FY12

FY13e

FY14e

FY15e

59,824 3.4 53,965 5,859 9.8 531 996 516 2,025 41.8 2,824 95 580 202 2,542 4.1

66,312 10.8 60,081 6,231 9.4 704 961 945 1,417 25.7 4,094 225 607 -151 3,562 5.8

73,510 10.9 65,825 7,685 10.5 844 1,051 860 1,641 24.7 5,009 -282 723 -277 3,728 6.0

77,028 4.8 68,811 8,216 10.7 759 1,105 850 2,113 29.3 5,089 1,000 710 -300 5,080 8.2

79,970 3.8 70,669 9,301 11.6 744 1,168 850 2,123 25.8 6,116 0 661 -300 5,156 8.3

FY11

FY12

FY13e

FY14e

FY15e

617 38,954 39,571 11,081 10,415 637 61,704 37,978 5,865 7,888 9,973 61,704 442 13 64.1

618 45,039 45,657 10,659 10,714 657 67,688 42,928 5,665 11,733 7,362 67,688 3,352 41 73.8

618 47,483 48,101 8,139 10,168 540 66,948 45,250 5,760 8,961 6,977 66,948 3,191 24 77.8

618 50,970 51,588 8,849 10,068 540 71,045 45,185 7,260 9,848 8,751 71,045 1,317 27 83.4

618 54,533 55,152 9,509 9,768 540 74,969 45,017 8,760 10,099 11,093 74,969 (1,325) 27 89.2

Fig 4 – Ratio analysis @ `160

Fig 3 – Cash-flow statement (`m) Consolidated PAT + Non cash items Cash profit - Incr/(Decr) in WC Operating cash flow - Capex Free cash flow - Dividend + Equity raised + Debt raised - Investments - Misc. items Net cash flow + Op. Cash & bank bal. Cl. Cash & bank bal.

Share capital Reserves & surplus Shareholders’ fund Minority interests Debt Deferred Tax Liab (net) Capital employed Net Fixed Assets Investments Net working capital Cash Misc Exp (not w/o) Capital deployed Net debt WC days BV (Rs / share)

Source: Company, Anand Rathi Research

Source: Company, Anand Rathi Research

Key financials (YE Mar)

Key financials (YE Mar)

FY11

FY12

FY13e

FY14e

FY15e

2,542 1,106 3,648 2,542 1,106 2,030 (924) 1,447 0 (7,553) 674 (1,533) (9,065) 19,038 9,973

3,562 941 4,503 3,845 658 5,911 (5,253) 1,556 0 299 (200) (3,698) (2,612) 9,973 7,361

4,451 1,169 5,619 (2,772) 8,391 3,373 5,018 1,592 0 (545) 95 3,170 (385) 7,361 6,976

5,789 1,105 6,894 887 6,007 1,040 4,967 1,592 0 (100) 1,500 0 1,775 6,977 8,751

5,489 1,168 6,985 251 6,734 1,000 5,734 1,592 0 (300) 1,500 0 2,341 8,751 11,093

Key financials (YE Mar)

FY11

FY12e

FY13e

FY14e

FY15e

P/E P / BV EV / Sales EV / EBIDTA ROAE (%) ROACE (%) CEPS (Rs/ share) DEPS (Rs/ share) Net Debt/Equity (%) Dividend yield (%) Dividend payout (%) Net profit growth (%) RM / Sales (%) Volume growth (%) (S.A) Realisation growth (%) (S.A)

39.0 2.5 1.7 15.5 6.2 8.7 6 2.0 0.0 1.2 56.9 -10.3 42.1 2.1 3.2

27.8 2.2 1.5 14.2 7.3 9.2 7 2.1 0.1 1.3 43.7 48.0 50.1 3.8 7.5

26.6 2.1 1.4 12.0 8.3 11.2 8 2.2 0.1 1.3 42.7 9.4 48.5 4.4 9.1

19.5 1.9 1.3 10.9 7.9 11.2 10 2.2 0.0 1.3 31.3 28.8 47.4 2.1 4.2

19.2 1.8 1.2 9.3 9.3 12.0 10 2.2 (0.0) 1.3 30.9 0.4 46.9 1.5 4.0

Source: Company, Anand Rathi Research

Source: Company, Anand Rathi Research

Fig 5 – PE Band

Fig 6 – Revenue breakup

200

24x

(`m) 85,000

TGBL 180 160

22x

75,000

20x

65,000 55,000

18x 140 16x 120

45,000 35,000 25,000 15,000

100

Source: Bloomberg, Anand Rathi Research

Anand Rathi Research

Dec-13

May-13

Nov-12

May-12

Oct-11

Apr-11

Oct-10

TGBL (S.A.)

Tetly + Others sub.

TCL (S.A.)

FY15e

FY14e

FY13

FY12

FY11

FY10

FY09

80

FY08

FY07

5,000

8'O Clock+ Others

Source: Company, Anand Rathi Research

2

1 January 2014

Tata Global Beverages – Costs under control, but fairly valued; downgrade to Hold

Key highlights Fig 7 – Segment-wise results (`m)

Net Revenues Tea Coffee & Other Produce Others Unallocated Total Revenues of Comp. Segment PBIT Tea Coffee & Other Produce Others Less : Interest: Other Un-Allocable Exp Total PBT of Comp. PBIT Margin (%) Tea Coffee & Other Produce Total PBIT Margin of Comp.

2QFY13

2QFY14

% Change

1H FY13

1H FY14

% Change

13,143 5,350 154 3 18,650

13,702 5,397 235 0 19,335

4 1 53 (88) (3.5)

25,446 10,056 396 3 35,901

26,876 10,083 510 0 37,469

6 0 29 (88) 4.4

946 842 (65) 110 133 1,481

1,218 602 (64) 181 (751) 2,326

29 (29) (2) 65 (667) 57.1

2,195 1,468 (110) 322 273 2,959

2,660 1,442 (192) 385 (780) 4,305

21 (2) 74 20 (386) 45.5

7.2 15.7 7.9

8.9 11.1 12.0

-

8.6 14.6 8.2

9.9 14.3 11.5

-

Source: Company, Anand Rathi Research

Fig 8 – Kenya tea prices

Fig 9 – Sri Lanka tea prices (US Cents/kg)

(US Cents/kg) 330

400

300

370

270 340 240 310

210

CY11

CY12

Week 1 Week 3 Week 5 Week 7 Week 9 Week 11 Week 13 Week 15 Week 17 Week 19 Week 21 Week 23 Week 25 Week 27 Week 29 Week 31 Week 33 Week 35 Week 37 Week 39 Week 41 Week 43 Week 45 Week 47 Week 49 Week 51

280 Week 1 Week 3 Week 5 Week 7 Week 9 Week 11 Week 13 Week 15 Week 17 Week 19 Week 21 Week 23 Week 25 Week 27 Week 29 Week 31 Week 33 Week 35 Week 37 Week 39 Week 41 Week 43 Week 45 Week 47 Week 49 Week 51

180

CY13

CY11

Source: Industry

Source: Industry

Fig 10 – Indian tea – CTC leaf & all dust

Fig 11 – Indian tea prices

(`/kg)

CY12

CY13

(`/kg) 150

140

140

130

130

120

120 110 110 100

100

90

90

80

Source: Company, Anand Rathi Research

Anand Rathi Research

Dec-13

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

Aug-11

Apr-11

Dec-10

Aug-10

Dec-09

Dec-13

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

Aug-11

Apr-11

Dec-10

Aug-10

Apr-10

60 Dec-09

70

60

Apr-10

80

70

Source: Company, Anand Rathi Research

3

1 January 2014

Tata Global Beverages – Costs under control, but fairly valued; downgrade to Hold

Fig 12 – Tetley - Revenue Trend

Fig 13 – Tetley - EBITDA and OPM Trend

(`bn) 10

50%

8.1 40%

8

(`m) 1,000

18.0% 16.0%

800

14.0%

30% 6

20%

4

10%

12.0% 600

10.0% 8.0%

400

271 6.0% 4.0%

0% 200

2

-10%

2.0%

Growth YoY (RHS)

EBITDA

Source: Company, Anand Rathi Research

Fig 14 – Arabica coffee prices

Fig 15 – Robusta coffee prices (US$/ton)

220

2,300

2QFY14

4QFY13

2QFY13

OPM (RHS)

Source: Company, Anand Rathi Research

(US$/lb)

4QFY12

2QFY12

4QFY11

2QFY11

4QFY10

2QFY10

2QFY09

2QFY14

4QFY13

2QFY13

4QFY12

2QFY12

4QFY11

2QFY11

4QFY10

2QFY10

4QFY09

2QFY09

Sales

0.0%

0

-20%

4QFY09

0

2,200 2,100

190

2,000 1,900 160 1,800 1,700 130

1,600 1,500

100

Source: Industry

Source: Industry

Fig 16 – 8 o’Clock - Revenue Trend

Fig 17 – 8 o’Clock - EBITDA and OPM Trend

400

10%

300

0%

200

Anand Rathi Research

25%

478 20% 15% 10%

EBITDA

2QFY14

0% 4QFY13

5%

2QFY13

100 4QFY12

2QFY14

4QFY13

2QFY13

4QFY12

2QFY12

4QFY11

2QFY11

4QFY10

2QFY10

4QFY09

-20% 2QFY09

0.0

Growth YoY (RHS)

Dec-13

20%

-10%

Sales

Oct-13

500

0.5

Source: Company, Anand Rathi Research

Nov-13

30%

2QFY12

1.0

600

4QFY11

1.5

30%

40%

2QFY11

2.0

700

4QFY10

2.5

35%

50%

2QFY10

3.0

(`m) 800

4QFY09

3

60%

2QFY09

(`bn) 3.5

Sep-13

Aug-13

Jul-13

Jun-13

May-13

Apr-13

Mar-13

Feb-13

Jan-13

Dec-12

Nov-12

Oct-12

Sep-12

Aug-12

Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13

1,400

OPM (RHS)

Source: Company, Anand Rathi Research

4

1 January 2014

Tata Global Beverages – Costs under control, but fairly valued; downgrade to Hold

Fig 18 – TCL standalone - Revenue trend

Fig 19 – TCL standalone - EBITDA and OPM trend (`m) 30.0%

500 450 400 350 300 250 200 150 100 50 (50)

391 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

EBITDA

Source: Company, Anand Rathi Research

2QFY14

4QFY13

2QFY13

4QFY12

2QFY12

4QFY11

2QFY11

4QFY10

2QFY10

4QFY09

2QFY09

-5.0%

OPM (RHS)

Source: Company, Anand Rathi Research

Fig 20 – TGB consolidated – Geographical revenue break-up Particulars (`bn)

2QFY14

2QFY13

% Change

1HFY14

1HFY13

% Change

South Asia Brands

6.32

5.26

20%

12.95

10.75

20%

EMEA

5.89

5.78

2%

10.92

11.28

-3%

CAA

4.85

5.47

-11%

9.27

9.82

-6%

-

-

-

-

17.06

16.51

3%

33.14

31.85

Total Non-Branded Operations

1.93

1.91

1%

3.75

3.63

3%

Other and Eliminations

0.34

0.23

48%

0.57

0.42

36%

19.33

18.65

4%

37.46

35.9

4%

Other Beverages Total Brands

TOTAL OPERATING INCOME

4%

Source: Company, Anand Rathi Research

Anand Rathi Research

5

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. Important Disclosures on subject companies Rating and Target Price History (as of 31 December 2013)

200 180 160 140 120 100 80 60 40 20 0

TGBL

1

1 2 3 4

2 3

Date 12-Dec-12 4-Jan-13 1-Feb-13 1-Mar-13

Rating Hold Hold Hold Buy

TP (`) 169 176 168 168

Share Price (`) 173 168 150 125

Sep-13

May-13

Jan-13

Sep-12

May-12

Jan-12

Sep-11

May-11

Jan-11

Sep-10

May-10

Jan-10

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

4

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) Mid/Small Caps (
Buy >15% >25%

Anand Rathi Research Ratings Distribution (as of 28 Feb 2013) Buy Anand Rathi Research stock coverage (184) 65% % who are investment banking clients 4%

Hold 5-15% 5-25%

Sell <5% <5%

Hold 27% 2%

Sell 8% 0%

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. 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. ARSSBL accepts responsibility for its 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. © 2013 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.

Financials India I Equities

Company Update 1 January 2014

Cholamandalam Investment and Finance

Rating: Buy Target Price: `309 Share Price: `245

Steady growth, higher NIM and productivity; Buy Key takeaways Steady credit growth to continue, higher NIM on the cards. Over the past several quarters, Chola’s disbursement growth has been higher than the industry, largely driven by product diversification and deeper penetration. Growth in tractor, LCVs, used vehicles and LAP could drive faster-thansystem AUM growth of 24% over FY13-16e. Despite liquidity tightening measures introduced by RBI, Chola’s calculated NIM on AUM, at 7.6%, was stable yoy . We expect NIM to improve in 2HFY14 as the product-mix alters in favour of higher-yielding tractors and used CV finance.

Key data

Improvement in productivity key to RoA expansion. Chola invested significantly in its branch network in FY11-13, which more than doubled to 513 at end Mar’13. However, over the past two quarters the NBFC has been consolidating. Consequently, cost assets declined 70bps yoy to 3.3% during Sep’13. The NBFC expects the focus on improving efficiency to continue, driving RoA to 2.3% by FY15 from 1.9% in FY13.

Shareholding pattern (%)

Key financials (YE Mar)

FY12

FY13

FY14e

FY15e

FY16e

Net interest income (`m)

7,421

11,014

14,684

18,230

22,744

Net profit (`m)

1,725

3,065

4,124

5,539

7,245

13.0

21.4

28.8

38.7

50.6

149.7

64.6

34.5

34.3

30.8 4.8

EPS (`) Growth (%) PE (x)

18.8

11.4

8.5

6.3

PABV (x)

2.4

1.8

1.6

1.3

1.1

RoE (%)

13.9

18.1

19.3

21.7

23.3

RoA (%)

1.5

1.9

2.0

2.2

2.3

Dividend yield (%)

1.0

1.4

1.5

1.8

2.4

Net NPA (%)

0.3

0.3

0.3

0.3

0.3

Source: Company, Anand Rathi Research

Sep-13 Jun-13 Mar-13

57.8 42.2 23.1 11.6 7.5

57.7 42.3 23.1 12.2 7.0

57.7 42.3 22.8 12.6 6.8

Relative price performance 320 300 Sensex

280 260 240 220

Oct-13 Nov-13

Jul-13

Mar-13 Apr-13 May-13 Jun-13

Aug-13 Sep-13

Chola

200 Jan-13 Feb-13

Our take. Loan growth would continue to be healthy for the remaining fiscal despite the subdued CV and tractor cycle. Higher NIM and productivity could drive sharp improvement in profitability over FY13-16 (33.2% CAGR). The stock is trading at 1.3x FY15e BV, favoured by risk-reward. Our target is based on the two-stage DDM (CoE: 16%; beta: 1.1; Rf: 8%). Risks. Persistent slowdown in the rural economy could lead to below expected growth and higher NPA.

`310/`202 21170 / 6304 US$0.2m `35bn/US$566m 143.1m

Promoters - of which, Pledged Free Float - Foreign Institutions - Domestic Institutions - Public

Dec-12

Credit cost to remain elevated, high NPA coverage offers comfort. On account of a stressed CV cycle, Chola’s asset quality has slipped. However, the NBFC has judiciously shored up its NPA coverage to 73% against 48% a year ago. Going forward, we have conservatively built into our estimates higher credit costs of 95bps over FY13-15 (30bps in FY12) to factor in the stress in CV finance and a greater share of used CVs and tractor.

CIFC IN / CHLA.BO

52-week high / low Sensex / Nifty 3-m average volume Market cap Shares outstanding

Source: Bloomberg

Kaitav Shah +9122 6626 6545 [email protected]

Clyton Fernandes +9122 6626 6744 [email protected]

Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix Anand Rathi Research

India Equities

1 January 2014

Cholamandalam Investment and Finance – Steady growth, higher NIM and productivity; Buy

Quick Glance – Financials and Valuations Fig 1 – Income statement (`m)

Source: Company, Anand Rathi Research

10x

350 300

8x

250 6x

200

CIFC 4x

150 100 50 Jun-13

Dec-13

0

Source: Bloomberg, Anand Rathi Research

Fig 2 – Balance sheet (`m) Year-end: Mar

400

Dec-12

22,744 24.8 412 23,157 24.7 10,189 12,968 24.7 2,391 10,577 3,332 7,245 30.8 50.6 6.0

Jun-12

18,230 24.1 342 18,572 24.1 8,172 10,400 24.1 2,314 8,086 2,547 5,539 34.3 38.7 4.5

Dec-11

14,684 33.3 286 14,970 31.5 6,587 8,383 45.8 2,318 6,065 1,941 4,124 34.5 28.8 3.7

Jun-11

11,014 48.4 367 11,381 45.0 5,630 5,751 58.3 1,243 4,508 1,443 3,065 77.7 21.4 3.3

Dec-10

7,421 24.7 428 7,848 27.4 4,216 3,632 21.2 731 2,901 1,176 1,725 177.4 13.0 2.3

Jun-10

FY16e

Dec-09

FY15e

Jun-09

FY14e

Dec-08

FY13e

Jun-08

Net interest income NII growth (%) Non-interest inc Total income Total Inc growth (%) Op. expenses Operating profit Op profit growth (%) Provisions PBT Tax PAT PAT growth (%) FDEPS (`/share) DPS (`/share)

Fig 4 – PE band

FY12

Dec-07

Year-end: Mar

Fig 5 – Price-to-book band

FY12

FY13e

FY14e

FY15e

FY16e

Share capital Reserves & surplus Borrowings Current liab. & prov. Minority interest Total liabilities

1,326 12,847 114,441 5,689 134,303

1,432 18,216 152,890 9,310 181,848

1,432 21,731 189,771 12,103 225,037

1,432 26,529 240,482 15,734 284,177

1,432 32,786 290,663 20,454 345,335

Advances Investments Cash & bank bal Fixed & other assets Total assets No. of shares (m) Borrowings growth (%) Advances growth (%)

123,299 617 8,126 2,260 134,303 133 44.0 43.2

166,259 2,245 10,882 2,461 181,848 143 33.6 34.8

209,487 949 12,987 1,614 225,037 143 24.1 26.0

261,859 1,202 19,272 1,844 284,177 143 26.7 25.0

319,467 1,453 22,189 2,226 345,335 143 20.9 22.0

400 2x

350 300

1.5x

CIFC

250 200

50

Dec-13

Jun-13

Dec-12

Jun-12

Dec-11

Jun-11

Dec-10

Jun-10

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

0

320

Chola

300 280 260 240 220 200 Bankex Nov-13

Oct-13

180 Sep-13

7.4 1.8 44.0 77.5 11.9 91.0 n.a 1.1 0.3 239.0 233.2 17.0 23.3 2.3 2.6

Aug-13

7.4 1.8 44.0 77.0 11.6 91.8 n.a 1.0 0.3 195.3 190.6 17.2 21.7 2.2 1.9

Jul-13

7.4 1.9 44.0 75.9 12.8 90.6 n.a 1.0 0.3 161.8 158.0 17.9 19.3 2.0 1.6

Jun-13

7.2 3.2 49.5 73.9 15.5 92.0 n.a 0.9 0.3 137.2 134.1 17.7 18.1 1.9 1.4

May-13

6.7 5.5 53.7 62.7 18.1 92.8 n.a 0.8 0.3 106.9 103.8 17.4 13.9 1.5 1.0

Apr-13

FY16e

Mar-13

FY15e

Feb-13

FY14e

Jan-13

FY13e

Dec-12

FY12

Source: Company, Anand Rathi Research

Anand Rathi Research

0.5x

Fig 6 – Chola vs. Bankex

Fig 3 – Key ratios NIM (%) Other inc / total inc (%) Cost-income (%) Provision coverage (%) Dividend payout (%) Borrowing-loans (%) Investment-deposit (%) Gross NPA (%) Net NPA (%) BV (`) Adj BV (`) CAR (%) RoE (%) RoA (%) Dividend Yield (%)

100

Source: Bloomberg, Anand Rathi Research

Source: Company, Anand Rathi Research

Year-end: Mar

1x

150

Source: Bloomberg

2

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. Important Disclosures on subject companies Rating and Target Price History (as of 31 December 2013)

420

CIFC

370 4

320 3

270 220

5

1 2 3 4 5

Date Rating 12-Dec-11 Buy 25-Sep-12 Buy 21-Jan-13 Buy 25-Feb-13 Buy 31-Oct-13 Buy

TP (`) 181 269 343 351 309

Share Price (`) 133 217 282 286 230

2

170 120

1

70 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

20

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) Mid/Small Caps (
Buy >15% >25%

Anand Rathi Research Ratings Distribution (as of 28 Feb 2013) Buy Anand Rathi Research stock coverage (184) 65% % who are investment banking clients 4%

Hold 5-15% 5-25%

Sell <5% <5%

Hold 27% 2%

Sell 8% 0%

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. 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. ARSSBL accepts responsibility for its 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. © 2013 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.

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) Mid/Small Caps (
Buy >15% >25%

Anand Rathi Research Ratings Distribution (as of 28 Feb 2013) Buy Anand Rathi Research stock coverage (184) 65% % who are investment banking clients 4%

Hold 5-15% 5-25%

Sell <5% <5%

Hold 27% 2%

Sell 8% 0%

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. 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