Maruti Suzuki India (MARUTI) 4095

Transcription

1 Result Update Rating matrix Rating : Buy Target : 4940 Target Period : 12 months Potential Upside : 21% What s Changed? Target Changed from 5090 to 4940 EPS FY16E Changed from to EPS FY17E Changed from to EPS FY18E Introduced at Rating Unchanged Quarterly Performance ( Crore) Q3FY16 Q3FY15 YoY (%) Q2FY16 QoQ (%) Revenue 15, , , EBITDA 2, , , EBITDA (%) bps bps Reported PAT 1, , Key Financials Crore FY15 FY16E FY17E FY18E Net Sales 48,606 57,071 67,085 79,129 EBITDA 6,606 9,228 10,998 12,162 Net Profit 3,711 5,104 6,714 7,854 EPS ( ) Valuation summary FY15 FY16E FY17E FY18E P/E (x) Target P/E (x) EV/EBITDA (x) P/BV (x) RoNW (%) RoCE (%) Stock data Particular Amount Market Capitalization ( Crore) Crore Total Debt (FY15) ( Crore) Crore Cash and Investments (FY15) ( Crore) Crore EV ( Crore) Crore 52 week H/L ( ) 4790 / 3360 Equity capital ( crore) 151 Crore Face value ( ) 5 Price performance (%) 1M 3M 6M 12M Maruti Suzuki India Ltd M&M Ltd Tata Motors Ltd Research Analyst Nishit Zota nishit.zota@icicisecurities.com Vidrum Mehta vidrum.mehta@icicisecurities.com January 29, 2016 Maruti Suzuki India (MARUTI) 4095 Quarterly blip does not disturb growth story... Maruti Suzuki Ltd (MSIL) reported its Q3FY16 numbers with a miss on the margins. Revenues came in at 15,082 crore, up 19.9% YoY, 8.2% QoQ, below our estimate of 15,197 crore. The topline growth was driven by 15.5% YoY volume growth ( units) and 2.7% ASP growth. Revenues came in below our estimates mainly due to lower than estimated ASPs (2.7% QoQ growth vs. our estimate of 3%) Reported EBITDA margins came in at 14.4%, up 172 bps YoY, down 190 bps QoQ, much below our estimates of 16.5%. The reported margins came lower on account of 1) adverse fixed cost incidence due to depletion of inventory (impact ~100 bps), 2) higher employee cost to sales (~15 bps impact due to provisioning on account of New Bonus Act), 3) higher discounting (~12.4% QoQ increase) & 4) higher advertisement & repair and maintenance expense (Gurgaon plant) PAT came in at 1,019 crore, up 27.1% YoY, down 16.8%, below our expectations of 1,400 crore. PAT came in below our estimates on account of lower than estimated EBITDA margins & other income MSIL- Biggest beneficiary of Seventh Pay Commission We believe there are a lot of favourable demand variables with the Seventh Pay Commission being a significant one. The Seventh Central Pay Commission (CPC) has recommended 23.5% pay hike, which is expected to influence ~1.4 crore employees across the government resulting in an increase in wage bill to the tune of trillion. With the increase in income, there will be an exponential jump in money spent on purchase of cars (car purchase forms 8% of incremental expenditure). Given that a first time buyer (government employee) will most likely opt for a small car (~19% of PV sales) or compact hatchback/sedan (~46% of PV sales), MSIL will benefit the most as MSIL has ~81%, 39% market share in the small car, compact hatchback & sedan segment, respectively, as on FY15. We believe the Seventh CPC will result in incremental demand of 16.6% spread over FY17, FY18. At the time of the Sixth CPC, Maruti Suzuki (MSIL) sales grew at 25% CAGR in FY09-11 while their sales to government employees increased from 4% in FY08 to 14% in FY11. Strong portfolio, new launches & reach ensures dominance Maruti has entered a strong product cycle and is looking to plug the gaps in its product portfolio. MSIL has already addressed the upper segment sedan with its product Ciaz. Its recent launch S-cross and upcoming compact SUV Vitara Brezza will help MSIL create a presence in the SUV segment. Introduction of Baleno in the fastest growing premium hatchback segment is a step in the right direction as it provides support to the nascent Nexa dealership. MSIL has already gained 200 bps in market share (47% YTD). Going ahead, we believe the success of new launches and relatively less competitive pressure in compact car segment will lead MSIL to retain its dominance (in terms of market share). Growth story intact We prefer the four-wheeler auto segment to the two-wheeler segment as low penetration levels still provide headroom for sustained growth. We expect volumes to grow at a CAGR of ~14% for FY15-18E. The 15%+ EBITDA margins are expected to sustain based on operating leverage benefit and richer product mix. We ascribe a multiple of 19x its FY18E EPS of 260 and recommend BUY with a target price of ICICI Securities Ltd Retail Equity Research

2 Variance analysis Q3FY16 Q3FY16E Q3FY15 YoY (Chg %) Q2FY16 QoQ (Chg %) Comments Total Operating Income 15,082 15,197 12, , Below estimates on account of lower than estimated domestic ASPs Raw Material Expenses 10,328 10,056 8, , Employee Expenses Higher on account of ~15 bps impact (~ 25 crore) due to provision for prior quarters as per new Bonus Act Other expenses 2,080 2,148 1, , Other expenses higher on account of higher ad & maintenance expense (~50 bps impact) & higher royalty expense EBITDA 2,170 2,505 1, , EBITDA Margin (%) bps bps Margins came in lower on account of of 1) adverse fixed cost incidence due to depletion of inventory (impact ~100 bps), 2) higher employee cost to sales (~15 bps impact), 3) higher discounting ( ~12.4% QoQ increase) & 4) higher advertisement & repair and maintenance expense (Gurgaon plant) Other Income Other income came in lower than estimates on account of FMP maturity mismatch Depreciation Higher than estimates as new die added for new model requires amortisation in 48 months Interest Total Tax PAT 1,019 1, , PAT came in below estimates on account of lower margins & other income EPS Key Metrics ASP ( ) 394, , , , Lower ASPs due to higher discounting Provision for Royalty( cr) Higher royalty payout owing to product mix Discounts ( ) 21,997 19,500 21, , Higher discounts reflects subdued demand for old models & diesel variants Change in estimates FY16E FY17E FY18E ( Crore) Old New % Change Old New % Change Introduced Comments Revenue 57,378 58, ,412 68, ,186 FY16E estimates changed to reflect higher volumes. FY17E estimates unchanged & FY18E numbers introduced EBITDA 9,221 9, ,198 10, ,162 EBITDA Margin (%) bps bps 15.0 Margin estimates lowered as new platforms will yield lower margins & new launches will result in higher sales promotional expense PAT 5,385 5, ,993 6, ,854 EPS ( ) Assumptions Current Earlier Comments FY14E FY15E FY16E FY17E FY18E FY16E FY17E Total Volumes (nos) FY16 volume estimates changed based on 9MFY16 trend. FY17 estimates remain almost unchanged. Assume 15% YoY growth for FY18E Average ASPs ( ) 369, , , , , , ,079 ASPs increase assumed on change in product mix RMC/Unit ( ) 271, , , , , , ,102 Royalty rates (%) Discount ( ) 16,950 19,529 19,274 19,500 18,000 17,505 17,500 New launches & improvement in demand sentiment will lead to reduction in discount Company, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 2

3 Key conference call takeaways Overall volume for Q3FY16 was up 15.5% YoY to units. Of this, domestic volumes grew 16.2% to units while exports grew 8.6% YoY to 31,187 units According to the management, work on the Gujarat plant is running as per schedule and Phase 1 with the capacity of 250,000 units/ year is likely to be commissioned by March The aggregate production capacity is at million; taking into account some short-term measures (de-bottlenecking) like balancing of production across quarters. As per the management, traditionally the H1 inventory would be carried to the H2 in order to adjust the production and cater higher demand in the latter half of the year. Average factory inventory for MSIL is 20,000-25,000 units. The strong demand mainly due to festive resulted into lower inventory at ~4,000 units at the factory level for Q3FY16 compared to the level of 32,000 units and 39,000 units in Q1FY16 & Q2FY16 respectively. The lower inventory level adversely impacted the conversion cost resulting into higher raw material cost and lower gross margins for the quarter The employee expenses were higher mainly due to higher provisioning on account of new bonus act. MSIL had provided with retrospective effect of 21 months (i.e. from April 2014). Hence, it is considered as one-time for the quarter The capex for FY16E is estimated at 3,000 crore, which would be spent on new model launches, R&D activity (likely to go up from the current 1.5% of sales), marketing expense (advertisement & sales promotion) and others The petrol: diesel mix for the industry on a YTD basis was at 56:44 vs. 54:46 earlier. The ban of diesel vehicle (> 2 mm) in NCR region has favoured demand for petrol vehicles by consumers. For MSIL, the current petrol: diesel mix stands at 68:32 while that of urban: rural stands at ~70:30. On the export front, volumes in the Sri Lankan market may be adversely impacted due to rise in duty structure. Further Baleno sales in US & Europe continue to do well for the company. The current AMT capacity stands at 10,000 units/month and could be increased adjusting to the demand scenario. The management does not see significant cannibalisation between Swift and Baleno, as consumer demand for Swift is tilted towards its mid variant while the demand for Baleno is more for its top variant. Hence, the pricing gap between both is significant The company plans to double its NEXA outlet from the current of 100 to 200 outlets by FY17E. Average discount for Q3FY16 increased and was at 21,997 per vehicle vs. 19,579 in Q2FY16 and 20,401 in Q3FY15 For Q3FY16, revenue from export was at 125 crore while royalty outgo for the quarter was at 884 crore ICICI Securities Ltd Retail Equity Research Page 3

4 Company Analysis Unique position of dominance in spite of competition MSIL has maintained its market leadership despite the increase in competitive intensity. Despite ~18 players being in the fray fighting for the 2.6 million large market, MSIL has managed to increase its market share from ~45% in FY15 to 47% in 9MFY16. The financial performance has been strong over the past years with operating margins maintained at decent levels (over 10% in the last 12 quarters). On the business levers side, all factors range from cost of car ownership to demographics to new product launches led by S-Cross & Baleno. Allied to this, on the financial levers side, better operating leverage are also in place to benefit MSIL. We expect revenue growth at ~17.6% CAGR in FY15-18E reaching ~ crore in FY18E. Margins are likely to remain on an uptrend and clock 16% in FY17E, as industry demand improves, leading to better operating leverage and also reduction in discounting levels. Also, increased traction in newer products in premium categories would lead to better ASPs and, consequently, better margins and is likely to aid profitability. For FY18E, we have assumed margins of 15% on account of higher ad spend & R&D cost & overall lower gross margins on newer platforms. We expect the bottomline to grow at ~28.4% CAGR in FY15-18E and reach ~ 7854 crore in FY17E. Exhibit 1: Topline and bottomline trends ( crore) ( crore) FY13 FY14 FY15 FY16E FY17E FY18E Topline Bottomline 0 Source: Company press release, ICICIdirect.com Research Exhibit 2: Margins to trend higher as volumes aid operating leverage ( crore) 14,000 12,000 10,000 8,000 6,000 4,000 2, , , , , , (%) - FY14 FY15 FY16E FY17E FY18E - EBITDA Margins (%) Source: Company press release, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 4

5 Export performance moderate in near-term; bigger growth post Suzuki s Gujarat plant! Suzuki is aiming to let MSIL grow as a low-cost brand to target markets such as Africa. MSIL already contributes ~45% to Suzuki s global profits. As such, Suzuki s strategy to make MSIL its global export hub for low priced products is logical. Currently, exports form ~9% of total sales for MSIL, with major export oriented product being the A-Star. Going ahead, we have taken ~8% CAGR in FY15-18E in export volumes. Exhibit 3: Export volumes ('000s) FY12 FY13 FY14E FY15E FY16E FY17E FY18E Domestic Exports Source: Company press release, ICICIdirect.com Research MSIL turns page as market share remains key focus With an increase in competitive intensity from FY10-11 onwards coupled with an increasing gap in petrol-diesel prices shifting customer preference for diesel cars in FY12-13, MSIL s market share had reduced from ~47% in FY09 to ~39% in FY13. The market share was further lost on account of persistent labour troubles at Manesar in both FY12 and FY13, which halted production. However, with the fuel price fall and domestic fuel price deregulation, there has been a recovery in petrol cars. MSIL has since then increased its presence in terms of products as well as capacity in both the petrol as well as diesel space. Launches of successful products like Ertiga and Celerio also aided growth of market share in a challenging environment. MSIL has regained the lost ground in terms of market share (YTD ~47% domestic). We expect MSIL to maintain >40% market share despite the improvement in competition and growth in the utility vehicle space in the coming years. ICICI Securities Ltd Retail Equity Research Page 5

6 Exhibit 4: Domestic PV market share for MSIL (%) FY12 FY13 FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 YTD for Q3FY15 Domestic Market Share Exhibit 5: Passenger car market share (excluding UVs) Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 (%) Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Source: Company press release, ICICIdirect.com Research MSIL's domestic share Discounting levels to decline with better demand sentiment, new launches In an intensely competitive industry struggling with demand slowdown, the increase in discounting levels to gain volumes is to be expected. As the market leader, MSIL had also been forced to give incentives to ward off competition and retain market share. However, we believe the new products launches (which do not offer any discounts) & facelifts will lead to improved product mix that will effectively reduce the discount levels. Discount on small cars (Alto, Wagon R) is broadly linked to the broad macro environment. These discounts will reduce with the improving macro economy conditions. We expect a reduction in average discounts from 19,625 in FY15 to 18,000 in FY18E. ICICI Securities Ltd Retail Equity Research Page 6

7 Exhibit 6: Discounting levels reducing ,529 19,274 19,000 18, ( ) Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 FY15E FY16E FY17E FY18E Source: Company press release, ICICIdirect.com Research Going ahead, as the industry recovers on the back of an improvement in overall economic scenario and interest rate cuts, discounting levels are likely to taper off from FY16E onwards, albeit not too sharply, thereby aiding profitability slowly. Exhibit 7: Annual discount trends and expectations ,529 19,274 19,000 18,000 ( ) FY13 FY14 FY15E FY16E FY17E FY18E ICICI Securities Ltd Retail Equity Research Page 7

8 Outlook and Valuation We prefer the four-wheeler auto segment to the two-wheeler segment as low penetration levels still provide headroom for sustained growth. We continue to remain bullish on the longer-term growth prospects of the car segment, especially MSIL, considering its dominant market share at ~47%. We expect volumes to grow at a CAGR of ~14% for FY15-18E. The 15%+ EBITDA margins are expected to sustain based on operating leverage benefit & richer product mix. We believe earnings growth trajectory would be strong (~28.4% CAGR in FY15-18E). While the downward risk for the company will be failure of new launches & sharp appreciation in JPY/INR rate, the upward risk will be commencement of Gujarat plant before the expected date of March 15, leading to up-tick in volumes. We ascribe a multiple of 19x its FY18E EPS of 260 and recommend BUY with a target price of Exhibit 8: Valuation Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY FY16E FY17E FY18E ICICI Securities Ltd Retail Equity Research Page 8

9 Company snapshot 6,000 5,000 Target Price: ,000 ( ) 3,000 2,000 1,000 0 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Event Feb-10 Largest recall in Maruti's history for 1 lakh A-star's for faulty parts. Maruti plans to double petrol capacity and investments to ~ 2,500 crore Jul-10 Q1FY10 marks the change in royalty rates for Maruti from 3.3% to 5.9%, market disappointed Mar-11 Auto stocks rebound as Union Budget witnesses no change of excise duties. Manesar workers go on strike for first time in May for two weeks Aug-11 Labour trouble again brews up, production halted. Maruti Q2FY12 skids due to labour problems and high forex impacts as JPY unfavourable Jan-12 Maruti witnesses strong valuation based bargain hunting as management expects worst to be over Apr-12 Maruti launches the much awaited MPV product "Ertiga". Maruti announces merger with SPIL to consolidate business on the diesel side Jul-12 Maruti stock tumbles as workers in Manersar facility turn violent, causes tragic death of HR manager Awanish Kumar Dev Aug-12 Management lifts lockout post violence receding; production starts albeit slowly Apr-13 Yen moving beyond 100 vis-à-vis US$ aids Q4FY13 profits as EBIDTA margins rise to 10.4% Oct-13 Localisation and cost reduction initiatives Maruti surprise on Q2FY14 financials as margins surprise Jan-14 MSIL board approves Gujarat plant expansion by way of 100% subsidiary of Suzuki Motor Corporation; institutional investors perturbed; stock falls Mar-14 Management alleviates concerns of minority shareholders and removes uncertainty over the "mark-up" issue Oct-14 Maruti launches a new product in the sedan segment "Ciaz" Apr-15 MSIL reports bumper margins of 15.9% in Q4FY15. Announces dividend of 25 per share May-15 Maruti Suzuki 'Swift' completed 10 years of debut. The company has sold over 1.3 million car over the last 10 years Jun-15 Company launches Celerio's diesel variant at 4.65 lakh Jul-15 Maruti opens booking for premium crossover S-CROSS which is likely to to sold through its NEXA (premium) showrooms Oct-15 Maruti launches its premium hatchback Baleno to be sold through its NEXA (premium) showrooms Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 Suzuki Motor Corp 30-Sep Life Insurance Corporation of India 30-Sep Capital World Investors 31-Dec HDFC Asset Management Co., Ltd. 30-Nov ICICI Prudential Life Insurance Company Ltd. 30-Sep Fidelity Management & Research Company 30-Nov BlackRock Institutional Trust Company, N.A. 31-Dec Norges Bank Investment Management (NBIM) 31-Dec UTI Asset Management Co. Ltd. 30-Nov HSBC Global Asset Management (Hong Kong) Limited 31-Aug Source: Reuters, ICICIdirect.com Research Recent Activity (in %) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Promoter FII DII Others Buys Sells Investor name Value Shares Investor name Value Shares William Blair Investment Management, LLC William Blair & Company, L.L.C Capital World Investors ICICI Prudential Asset Management Co. Ltd BlackRock Institutional Trust Company, N.A Life Insurance Corporation of India Lyxor Asset Management ICICI Prudential Life Insurance Company Ltd State Street Global Advisors (UK) Ltd Columbia Threadneedle Investments (US) ICICI Securities Ltd Retail Equity Research Page 9

10 Financial summary Profit and loss statement Crore (Year-end March) FY15 FY16E FY17E FY18E Total operating Income 49,874 58,498 68,829 81,186 Growth (%) Raw Material Expenses 35,008 39,435 46,112 55,164 Employee Expenses 1,607 1,902 2,281 2,690 Marketing Expenses Administrative Expenses Other expenses 6,654 7,932 9,438 11,169 Total Operating Expenditure 43,268 49,269 57,831 69,024 EBITDA 6,606 9,228 10,998 12,162 Growth (%) Depreciation 2,470 2,791 3,106 3,076 Interest Other Income ,332 1,673 PBT 4,868 7,127 9,198 10,759 Others Total Tax 1,157 2,023 2,483 2,905 PAT 3,711 5,104 6,714 7,854 Growth (%) EPS ( ) Cash flow statement Crore (Year-end March) FY15 FY16E FY17E FY18E Profit after Tax 3,711 5,104 6,714 7,854 Add: Depreciation 2,470 2,791 3,106 3,076 (Inc)/dec in Current Assets ,213-1,023 Inc/(dec) in CL and Provisions 1, ,471 1,622 Others CF from operating activities 7,668 7,952 9,078 11,530 (Inc)/dec in Investments 5,817-1,000-1,000-1,000 (Inc)/dec in Fixed Assets -3,201-3,000-3,000-3,000 Others -8,403-1, ,415 CF from investing activities -5,787-5,353-4,964-5,415 Issue/(Buy back) of Equity Inc/(dec) in loan funds Dividend paid & dividend tax ,233-1,479-1,479 Inc/(dec) in Sec. premium Others -1, CF from financing activities -2,385-1,133-1,379-1,379 Net Cash flow ,466 2,735 4,735 Opening Cash ,591 4,326 Closing Cash 125 1,591 4,326 9,061 Balance sheet Crore (Year-end March) FY15 FY16E FY17E FY18E Liabilities Equity Capital Reserve and Surplus 23,658 27,528 32,764 39,138 Total Shareholders funds 23,809 27,679 32,915 39,289 Total Debt Deferred Tax Liability Others Liabilties Total Liabilities 24,868 28,889 34,274 40,799 Assets Gross Block 25,636 28,936 31,936 34,936 Less: Acc Depreciation 14,115 16,906 20,012 23,087 Net Block 11,521 12,030 11,924 11,848 Capital WIP 2,621 2,321 2,321 2,321 Total Fixed Assets 14,142 14,351 14,246 14,170 Investments 12,814 14,814 16,814 18,814 Inventory 2,615 1,763 3,383 3,337 Debtors 1,069 1,954 2,389 2,927 Loans and Advances 1,172 1,217 1,457 1,697 Other Current Assets Cash 125 1,591 4,326 9,061 Total Current Assets 5,307 7,105 12,053 17,811 Creditors 5,561 5,863 6,433 7,588 Provisions 1,361 1,493 1,703 2,084 Other current Liabilities 1,867 1,821 2,514 2,600 Total Current Liabilities 8,789 9,178 10,649 12,271 Net Current Assets -3,481-2,073 1,404 5,539 Other Assets 1,393 1,796 1,810 2,275 Application of Funds 24,868 28,889 34,274 40,799 Key ratios (Year-end March) FY15 FY16E FY17E FY18E Per share data ( ) EPS Cash EPS BV , ,300.6 DPS Cash Per Share Operating Ratios EBITDA Margin (%) PBT / Net sales (%) PAT Margin (%) Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE RoIC Valuation Ratios (x) P/E EV / EBITDA EV / Net Sales Market Cap / Sales Price to Book Value Solvency Ratios Debt/EBITDA Debt / Equity Current Ratio Quick Ratio ICICI Securities Ltd Retail Equity Research Page 10

11 ICICIdirect.com coverage universe (Auto & Auto Ancillary) CMP M Cap EPS ( ) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E Amara Raja (AMARAJ) Buy Apollo Tyre (APOTYR) Buy Ashok Leyland (ASHLEY) Hold Bajaj Auto (BAAUTO) Buy Balkrishna Ind. (BALIND) Hold Bharat Forge (BHAFOR) Buy Bosch (MICO) Buy Eicher Motors (EICMOT) Hold Exide Industries (EXIIND) Buy Hero Mototcorp (HERHON) Hold JK Tyre & Ind (JKIND) Buy M&M (MAHMAH) Buy Mahindra CIE (MAHAUT) Buy NA Maruti Suzuki (MARUTI) Buy Motherson (MOTSUM) Hold Tata Motors (TELCO) Buy Wabco India (WABTVS) Hold ICICI Securities Ltd Retail Equity Research Page 11

12 RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target 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.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai research@icicidirect.com ICICI Securities Ltd Retail Equity Research Page 12

13 ANALYST CERTIFICATION We /I, Nishit Zota, MBA & Vidrum Mehta, 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 views about 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 this report. Terms & conditions and other disclosures: ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. 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