Abg ship

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Abg ship

  1. 1. February 20, 2012ICICI Securities Ltd | Retail Equity ResearchResult UpdateWHAT’S CHANGED…PRICE TARGET…………………………………………….Changed from | 373 to | 427EPS (FY12E)……………………………………………...Changed from | 43.6 to | 35.2EPS (FY13E)……………………………………………...Changed from | 51.6 to | 49.1RATING……………………………………………………………………...UnchangedCore EBITDA margin, order book qualityimproving…ABG Shipyard (ABG) reported a better-than-expected performance inQ3FY12 on the topline front while net profit was marginally lower thanour estimates. ABG reported revenues of | 619.3 crore vs. ourexpectation of | 609 crore and net profit of | 46.5 crore (I-direct estimate:| 51.6 crore) for Q3FY12. EBITDA margin (including subsidy) improved by75 bps QoQ and was higher than our estimate of 23.5% at 24.6%. Theheartening factor in ABG’s performance is the improvement in the coreEBITDA margin (excluding subsidy), which has improved by 100 bps on aQoQ basis to 23.5%. However, higher depreciation (up by 5% QoQ) andinterest cost (up by 18% QoQ) continue to dampen the net profit. OverQ1FY12 to Q3FY12, ABG’s core EBITDA margin has risen by 430 bpssignifying an improvement in the core operational performance. Withexecution also picking up gradually, profitability is expected to seeaccelerated growth in FY13.Order book quality improvingABG’s total order book stands at ~ | 15500 crore, of which theunexecuted order book is at ~ | 10500 crore. Though more than 20% ofthe order book comprises orders placed by ABG’s group companies,recently, the heartening factor has been ABG’s ability to bag prestigiousorders. During Q1FY12, the company had secured an order of | 970crore for construction of two cadet training ships for the Indian Navy. InJanuary 2012, ABG bagged an order worth | 500 crore from ShippingCorporation of India for construction of six anchor handling tugs cumsupply vessels (AHTS). These orders from top notch Indian PSU clientsbode well for potential order inflows from these marquee clients andprovides strong revenue visibility, going ahead.ValuationAt the CMP of | 434, the stock is trading at 8.8x FY13E EPS of | 49.1 and1.32x FY13E book value of | 328. Considering the improvement in coreEBITDA margin and order book quality, we have valued the stock at 1.3xFY13E book value (Q1FY12: 1.1x) to arrive at a price target of | 427 andrecommend a HOLD rating. Existing investors can also continue to holdthe stock.Exhibit 1: Financial Performance(| cr) Q3FY12 Q3FY12E Q3FY11 Q2FY12 YoY Gr. (%) QoQ Gr.(%)Net Sales 619.3 609.3 540.2 581.6 14.6 6.5EBITDA 152.1 143.2 139.2 138.5 9.3 9.8EBITDA Margin (%) 24.6 23.5 25.8 23.8 (121 bps) 75 bpsDepreciation 25.6 25.0 17.4 24.4 47.4 5.0Interest 51.4 43.0 40.2 43.4 27.6 18.4Reported PAT 46.5 51.6 53.5 48.4 -13.1 -3.9EPS (|) 9.1 10.1 10.5 9.5 -13.1 -3.9Source: Company, ICICIdirect.com ResearchABG Shipyard (ABGSHI)| 434Rating matrixRating : HoldTarget : | 427Target Period : 12 monthsPotential Upside : -2%Key Financials(| cr) FY10 FY11 FY12E FY13ENet Sales 1812.4 2136.9 2352.0 2698.2EBITDA 472.5 518.1 560.1 661.8Net Profit 218.1 194.0 179.2 250.2EPS (|) 42.8 38.1 35.2 49.1Valuation summaryFY10 FY11 FY12E FY13EPE (x) 10.1 11.4 12.3 8.8Target PE (x) 10.0 11.2 12.1 8.7EV to EBITDA (x) 10.7 7.9 6.7 3.1Price to book (x) 2.0 1.7 1.5 1.3RoNW (%) 19.6 15.3 12.7 15.3RoCE (%) 10.9 12.2 13.5 16.6Stock dataMarket Cap. (| cr) 2209Debt( FY11) (| cr) 2391Cash (FY11) (| cr) 664EV (| cr) 393652 week H/L (| cr) 463 / 322Equity capital (| cr) 50.9Face value (|) 10DII Holding (%) 6.4FII Holding (%) 11.3Price movement150250350450550Feb-12Nov-11Aug-11May-11Mar-114,0004,5005,0005,5006,0006,500ABG Shipyard (R.H.S) Nifty (L.H.S)Analyst’s nameBharat Chhodabharat.chhoda@icicisecurities.com
  2. 2. ICICI Securities Ltd | Retail Equity Research Page 2Exhibit 2: Topline performance trend540.2 581.6 619.31723.52352.02698.2050010001500200025003000Q3FY11 Q2FY12 Q3FY12 9MFY12 FY12E FY13E|cr RevenueSource: Company, ICICIdirect.com ResearchExhibit 3: EBITDA performance trend152.1406.4560.1661.8138.5139.224.523.823.624.623.825.8080160240320400480560640Q3FY11 Q2FY12 Q3FY12 9MFY12 FY12E FY13E|cr05101520253035%EBITDA OPMSource: Company, ICICIdirect.com ResearchExhibit 4: PAT performance trend53.5 48.4 46.5134.9179.2250.29.57.87.87.58.39.9050100150200250300Q3FY11 Q2FY12 Q3FY12 9MFY12 FY12E FY13E|cr0.05.010.015.020.025.0%PAT NPMSource: Company, ICICIdirect.com ResearchABG Shipyard recorded its highest ever quarterly turnoverin Q3FY12 signifying a pick-up in executionCore EBITDA margin (excluding subsidy) has seen a 430bps improvement over Q1FY12-Q3FY1297128 14336919.222.5 23.521.9050100150200250300350400Q1FY12 Q2FY12 Q3FY12 9MFY120510152025EBITDA excl subsidyEBITDA margin excl subsidy (%)Source: Company, ICICIdirect.com Research
  3. 3. ICICI Securities Ltd | Retail Equity Research Page 3Exhibit 5: Revenue expected to improve in FY12, FY131413.01812.42136.92352.02698.2050010001500200025003000FY09 FY10 FY11 FY12E FY13E|cr RevenueSource: Company, ICICIdirect.com ResearchExhibit 6: Subsidy accounted182985191010.14.0 3.61.7 1.40.020.040.060.080.0100.0120.0140.0160.0180.0200.0FY10 FY11 Q1FY12 Q2FY12 Q3FY120.02.04.06.08.010.012.0Subsidy subsidy as % of revenuesSource: Company, ICICIdirect.com ResearchExhibit 7: Operating margin to stabilise after declining in FY12331.6472.5518.1560.1661.824.523.824.226.123.50100200300400500600700FY09 FY10 FY11 FY12E FY13E|cr05101520253035%EBITDA EBITDA %Source: Company, ICICIdirect.com Research
  4. 4. ICICI Securities Ltd | Retail Equity Research Page 4Exhibit 8: PAT expected to improve in FY13171.2218.1194.0179.2250.21212989050100150200250300FY09 FY10 FY11 FY12E FY13E|cr036912151821%PAT PAT %Source: Company, ICICIdirect.com ResearchExhibit 9: Debt equity ratio to improve, going ahead1770.92897.42542.42285.31915.51.92.62.01.61.10500100015002000250030003500FY09 FY10 FY11 FY12E FY13E|cr0.00.51.01.52.02.53.0Debt Debt-EquitySource: Company, ICICIdirect.com ResearchExhibit 10: Shareholding pattern61.811.36.420.519.56.512.361.7010203040506070Promoters FII DII Others%Sep-11 Dec-11Source: Company, ICICIdirect.com Research
  5. 5. ICICI Securities Ltd | Retail Equity Research Page 5ABG’s total order book stands at ~ | 15500 crore, of which theunexecuted order book is at ~ | 10500 crore. Though more than 20% ofthe order book comprises orders placed by ABG’s group companies,recently, the heartening factor has been ABG’s ability to bag prestigiousorders. During Q1FY12, the company had secured an order of | 970 crorefor construction of two cadet training ships for the Indian Navy. InJanuary 2012, ABG bagged an order worth | 500 crore from ShippingCorporation of India for construction of six anchor handling tugs cumsupply vessels (AHTS). These orders from top notch Indian PSU clientsbode well for potential order inflows from these marquee clients andprovides strong revenue visibility, going ahead.ValuationAt the CMP of | 434, the stock is trading at 8.8x FY13E EPS of | 49.1 and1.32x FY13E book value of | 328. Considering the improvement in coreEBITDA margin and order book quality, we have reduced the discount tothe CY12E global average price to book value multiple from 32% to 28%while valuing ABG. We have valued the stock at 1.3x FY13E book value(Q2FY12: 1.1x) to arrive at a price target of | 427 and recommend a HOLDrating. Existing investors can also continue to hold the stock.Exhibit 11: Valuation parameterValuation based on Global average Target multiple Target price (|)Price to book value (x) 1.81 1.30 427Average target price (|) 427Current market price (|) 434Upside (%) (1.6)Source: ICICIdirect.com ResearchExhibit 12: ValuationSales Sales EPS EPS PE EV/EBITDA RoNW RoCE(| cr) Growth (%) (|) Growth (%) (x) (x) (%) (%)FY11 2136.9 17.9 38.1 -11.1 11.4 7.9 15.3 12.2FY12E 2352.0 10.1 35.2 -7.6 12.3 6.7 12.7 13.5FY13E 2698.2 14.7 49.1 39.7 8.8 3.1 15.3 16.6Source: Company, ICICIdirect.com ResearchExhibit 13: Revised estimates(| cr) FY12E FY13E FY12E FY13ESales 2420.4 2698.2 2352.0 2698.2EBITDA 559.7 619.8 560.1 661.8Net Profit 221.8 262.5 179.2 250.2EPS 43.6 51.6 35.2 49.1Old NewSource: Company, ICICIdirect.com Research
  6. 6. ICICI Securities Ltd | Retail Equity Research Page 6Financial summaryProfit and loss statement(| Crore)(Year-end March) FY10 FY11 FY12E FY13ETotal operating Income 1,812.4 2,136.9 2,352.0 2,698.2Growth (%) 28.3 17.9 10.1 14.7Raw Material Expenses 1,162.1 884.7 1,140.3 1,248.2Employee Expenses 48.1 72.9 82.3 94.4Mfg & Other expenses 275.6 386.9 369.3 458.7Incr/Decr in WIP -145.8 274.4 200.0 235.0Other expenses 0.0 1.0 2.0 3.0Total Operating Expenditure 1,340.0 1,618.8 1,791.9 2,036.3EBITDA 472.5 518.1 560.1 661.8Growth (%) 26.1 24.2 23.8 24.5Depreciation 38.7 68.5 103.2 122.9Interest 161.4 145.8 185.9 168.0Other Income 14.9 5.4 8.0 10.0PBT 287.3 309.3 279.0 380.9Others 29.3 -23.9 -5.0 -5.0Total Tax 98.4 91.4 94.9 125.7PAT 218.1 194.0 179.2 250.2Growth (%) 27.4 -11.1 -7.6 39.7EPS (|) 42.8 38.1 35.2 49.1Source: Company, ICICIdirect.com ResearchCash flow statement(| Crore)(Year-end March) FY10 FY11 FY12E FY13EProfit after Tax 218.1 194.0 179.2 250.2Add: Depreciation 38.7 68.5 103.2 122.9(Inc)/dec in Current Assets 189.2 -1,712.6 -103.7 -82.0Inc/(dec) in CL and Provisions -229.9 2,429.8 -154.1 -5.8Others 225.8 4.3 5.0 5.0CF from operating activities 441.9 984.0 29.6 290.3(Inc)/dec in Investments -546.6 408.7 0.0 0.0(Inc)/dec in Fixed Assets -519.0 -405.5 0.0 0.0Others 0.0 0.0 0.0 0.0CF from investing activities -1,065.5 3.2 0.0 0.0Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0Inc/(dec) in loan funds 594.3 -355.1 -257.1 -369.8Dividend paid & dividend tax 11.9 23.8 23.7 23.8Inc/(dec) in Sec. premium 0.0 0.0 0.0 0.0Others 0.0 0.0 0.0 0.0CF from financing activities 606.2 -331.2 -233.4 -345.9Net Cash flow -17.5 655.9 -203.8 -55.6Opening Cash 50.6 28.4 664.9 413.7Closing Cash 28.4 664.9 413.7 310.4Source: Company, ICICIdirect.com ResearchBalance sheet(| Crore)(Year-end March) FY10 FY11 FY12E FY13ELiabilitiesEquity Capital 50.9 50.9 50.9 50.9Reserve and Surplus 1,060.3 1,239.8 1,395.2 1,621.6Total Shareholders funds 1,111.3 1,290.7 1,446.1 1,672.5Total Debt 2,897.4 2,542.4 2,285.3 1,915.5Deferred Tax Liability 315.8 403.3 403.3 403.3Minority Interest / Others 0.0 4.3 9.3 14.3Total Liabilities 4,324.5 4,240.7 4,144.1 4,005.7AssetsGross Block 737.7 1,365.4 1,715.4 2,065.4Less: Acc Depreciation 138.0 342.2 445.4 568.3Net Block 599.8 1,023.3 1,270.1 1,497.2Capital WIP 1,375.4 1,357.5 1,007.5 657.5Total Fixed Assets 1,975.22 2,380.75 2,277.54 2,154.66Investments 609.3 200.6 200.6 200.6Inventory 1,066.1 2,489.5 2,255.3 2,217.7Debtors 72.0 163.6 193.3 221.8Loans and Advances 1,620.7 1,818.4 2,126.5 2,217.7Other Current Assets 0.0 0.0 0.0 0.0Cash 28.4 664.9 413.7 310.4Total Current Assets 2,787.23 5,136.42 4,988.82 4,967.55Creditors 970.0 1,137.0 1,224.3 1,404.5other curr liab & Provisions 77.2 2,340.0 2,098.5 1,912.6Total Current Liabilities 1,047.23 3,477.01 3,322.87 3,317.11Net Current Assets 1,740.00 1,659.41 1,665.95 1,650.44Others Assets 0.0 0.0 0.0 0.0Application of Funds 4,324.5 4,240.7 4,144.1 4,005.7Source: Company, ICICIdirect.com ResearchKey ratios(Year-end March) FY10 FY11 FY12E FY13EPer share data (|)EPS 42.8 38.1 35.2 49.1Cash EPS 50.4 52.1 56.4 74.3BV 218.2 253.5 284.0 328.5DPS 4.0 4.0 4.0 4.0Cash Per Share 5.6 130.6 81.2 61.0Operating Ratios (%)EBITDA Margin 26.1 24.2 23.8 24.5PBT / Total Operating income 17.5 13.5 11.9 14.1PAT Margin 12.0 9.1 7.6 9.3Inventory days 214.7 425.2 350.0 300.0Debtor days 14.5 27.9 30.0 30.0Creditor days 195.3 194.2 190.0 190.0Return Ratios (%)RoE 19.6 15.3 12.7 15.3RoCE 10.9 12.2 13.5 16.6RoIC 6.5 6.5 5.7 8.1Valuation Ratios (x)P/E 10.1 11.4 12.3 8.8EV / EBITDA 10.7 7.9 7.3 5.8EV / Net Sales 2.8 1.9 1.7 1.4Market Cap / Sales 1.2 1.0 0.9 0.8Price to Book Value 2.0 1.7 1.5 1.3Solvency RatiosDebt/EBITDA 6.1 4.9 4.1 2.9Debt / Equity 2.6 2.0 1.6 1.1Current Ratio 2.9 2.5 2.0 2.0Quick Ratio 1.8 2.3 2.2 2.0Source: Company, ICICIdirect.com Research
  7. 7. ICICI Securities Ltd | Retail Equity Research Page 7ICICIdirect.com coverage universe (Shipping)Essar Ports Sales (| Crore) EPS (|) PE (x) EV/EBITDA (x) RoNW (%) RoCE (%)Idirect Code ESSSHI CMP (|) 70 FY12E 1103.7 2.9 20.3 8.1 6.5 9.9Target (|) 107 FY13E 1392.6 5.8 10.2 6.2 11.7 12.0MCap 2916 % Upside 53G.E ShippingIdirect Code GESHIP CMP (|) 274 FY11 2432.9 30.8 7.3 8.4 7.8 4.4Target (|) 238 FY12E 2889.6 32.3 6.9 7.5 7.7 4.4MCap 4165 % Upside -13 FY13E 3248.7 36.9 6.1 6.0 8.2 5.8Mercator LinesIdirect Code MERLIN CMP (|) 32 FY11 2828.9 1.9 11.5 4.8 2.0 5.7Target (|) 34 FY12E 3690.5 2.3 8.1 5.2 2.9 5.1MCap 755 % Upside 6 FY13E 4462.2 4.6 4.0 3.7 5.6 7.8SCIIdirect Code SCI CMP (|) 77 FY10 3543.4 12.2 4.5 7.2 7.9 2.1Target (|) 59 FY11E 3946.4 -1.4 - 13.9 -1.0 -0.9MCap 3587 % Upside -23 FY12E 4254.8 0.9 63.3 9.0 0.6 0.4Aban OffshoreIdirect Code ABALLO CMP (|) 547 FY11 3347.2 33.3 11.4 6.5 6.5 11.1Target (|) 430 FY12E 3223.9 74.4 4.0 6.7 16.0 9.5MCap 2379 % Upside -21 FY13E 3296.0 99.3 3.2 6.1 16.9 10.5Global OffshoreIdirect Code GARSHI CMP (|) 88 FY11 200.5 9.3 7.8 8.8 7.9 5.5Target (|) 106 FY12E 198.1 6.7 10.9 8.4 5.5 5.3MCap 209 % Upside 20 FY13E 197.1 7.0 10.4 7.6 5.5 5.6Great OffshoreIdirect Code GREOFF CMP (|) 124 FY11 946.8 7.1 12.8 9.1 2.2 3.9Target (|) 122 FY12E 983.4 21.9 4.1 7.2 6.7 5.8MCap 460 % Upside -2 FY13E 1065.3 22.4 4.0 6.1 6.5 6.9ABG ShipyardIdirect Code ABGSHI CMP (|) 434 FY11 2136.9 38.1 11.4 7.9 15.3 12.2Target (|) 427 FY12E 2352.0 35.2 12.3 6.7 12.7 13.5MCap 2209 % Upside -2 FY13E 2698.2 49.1 8.8 3.1 15.3 16.6Bharati ShipyardIdirect Code BHASHI CMP (|) 106 FY11 1609.0 34.5 2.6 7.9 9.3 9.3Target (|) 75 FY12E 1296.0 19.2 4.7 6.9 6.9 10.0MCap 310 % Upside -29 FY13E 1329.0 5.1 17.7 9.8 0.5 7.6Pipavav ShipyardIdirect Code PIPSHI CMP (|) 75 FY10 859.9 0.7 - 43.6 2.5 4.3Target (|) 87 FY11E 1746.6 0.7 73.6 20.9 4.1 8.0MCap 4994 % Upside 16 FY12E 2350.2 2.3 28.1 13.8 9.6 12.9
  8. 8. ICICI Securities Ltd | Retail Equity Research Page 8Exhibit 14: Recommendation History050100150200250300350400450500Feb-12Jan-12Nov-11Oct-11Aug-11Jul-11May-11Apr-11Mar-11Price Target PriceExhibit 15: Recent ReleasesDate Event CMP Target Price Rating8-Apr-11 Q4FY11 Result preview 393 293 SELL3-Jun-11 Q4FY11 Result update 374 344 HOLD8-Jul-11 Q1FY12 Result preview 370 344 HOLD23-Aug-11 Q1FY12 Result update 341 338 HOLD22-Nov-11 Q2FY12 Result update 388 373 HOLD6-Jan-12 Q3FY12 Result preview 392 373 HOLDGlobal Valuation (Shipping)CY10E CY11E CY12E CY10E CY11E CY12E CY10E CY11E CY12E CY10E CY11E CY12EShipbuildingDaewoo Shipbuilding* South Korea 2.0 1.2 1.0 10.0 11.7 9.7 8.3 9.4 8.7 21.5 10.6 11.7Hyundai Heavy Industries* South Korea 3.1 1.2 1.0 11.8 8.5 8.0 11.7 6.9 6.4 30.3 14.5 13.8Keppel Corp. Ltd* Singapore 2.8 2.2 2.0 15.3 12.5 12.2 13.3 11.2 9.7 19.6 19.7 18.4Samsung Heavy Industries* South Korea 2.9 1.7 1.5 11.4 12.5 10.3 8.9 7.8 6.7 28.5 14.0 15.2Sembcorp Marine* Singapore 5.3 3.9 3.5 16.7 15.5 16.0 10.6 10.9 10.4 34.4 27.0 24.1ABG Shipyard# India 1.7 1.5 1.3 11.4 12.3 8.8 7.9 6.7 3.1 15.3 12.7 15.3Pipavav Defence & Offshore Engineering Co# India 3.1 3.0 2.7 - 73.6 28.1 43.6 20.9 13.8 2.5 4.1 9.6Bharati Shipyard# India 0.3 0.2 0.2 2.6 4.7 17.7 7.9 6.9 9.8 9.3 6.9 0.5*consensus# With regards to Indian companies, three year data represents FY11, FY12 and FY13 (financial year ending in March)EV/EBITDA (x) ROE (%)Company CountryP/BV (x) P/E (x)
  9. 9. ICICI Securities Ltd | Retail Equity Research Page 9RATING RATIONALEICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assignsratings to its stocks according to their notional target price vs. current market price and then categorises themas Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notionaltarget price is defined as the analysts valuation for a stock.Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;Buy: >10%/15% for large caps/midcaps, respectively;Hold: Up to +/-10%;Sell: -10% or more;Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.comICICIdirect.com Research Desk,ICICI Securities Limited,1stFloor, Akruti Trade Centre,Road No. 7, MIDC,Andheri (East)Mumbai – 400 093research@icicidirect.comANALYST CERTIFICATIONWe /I, Bharat Chhoda MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal viewsabout any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in thisreport. Analysts arent registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.Disclosures:ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leadingunderwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage ofcompanies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securitiesgenerally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analystscover.The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential andmeant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, withoutprior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors andemployees (“ICICI Securities and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securitiesfrom doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securitiespolicies, in circumstances where ICICI Securities is acting in an advisory capacity to this company, or in certain other circumstances.This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. Thisreport and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financialinstruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of theirreceiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specificcircumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investmentobjectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluatethe investment risks. The value and return of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities for anyloss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand therisks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject tochange without notice.ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have receivedcompensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investmentbanking or other advisory services in a merger or specific transaction. It is confirmed that Bharat Chhoda MBA research analysts and the authors of this report have not received any compensation from thecompanies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI Securities, which include earnings from Investment Bankingand other business.ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of theresearch report.It is confirmed that Bharat Chhoda MBA research analysts and the authors of this report or any of their family members does not serve as an officer, director or advisory board member of the companiesmentioned in the report.ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. ICICI Securities and affiliates may act upon or make useof information contained in the report prior to the publication thereof.This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securitiesdescribed herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of andto observe such restriction.

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