Company Profile. VIP Industries

Transcription

1 October 7, 2015 Buy VIP Industries Industry: Luggage and Bags Industry View: Overweight Initiating Coverage Evolutionary moves driving this revolutionary business VIP is the market leader in the organised luggage industry in India with more than 50% market share, manufacturing and supplying a wide range of hardsided and soft-sided luggage. Established in 1971, it is Asia s largest and the world s 2nd largest luggage manufacturer and is an end to end supplier catering to the needs of a diversified customer mix of value for money and mid to high end premium segments. Amongst the most recognized and trusted brands in India with its flagship VIP brand, the company has diversified to other brands as well through green-field and brown-field expansion like Carlton, Caprese, Skybags, Aristocrat and Alfa. VIP also has a moulded furniture business under the brand name Moderna. Strong brand equity to drive volume growth A combination of continual innovation and extensive advertising has led to the growth of its flagship VIP brand which is synonymous with luggage in India. The company is also developing its youth oriented brands Skybags, Carlton and Caprese which are witnessing exponential growth. This has helped VIP sustain its leadership position in the Indian organised luggage industry. Evolution of market dynamics offer significant upside potential India has the world s largest youth population with the median age being ~ 27.3 years. The intense competition between VIP and Samsonite has also led to increased advertising and promotion thereby extending the reach of the 2 brands. Rising consumer preference for branded products coupled with higher visibility of luggage brands is expected to increase the share of the organised market, directly benefiting its market leader VIP. Skybags and Caprese to begin a new chapter in VIP s heritage Skybags, targeted towards style conscious youth who desire aesthetics with functionality, has fast grown to be the 2nd most significant contributor after the flagship VIP brand. Caprese is a lifestyle brand that offers a wide range of ladies handbags where it is trying to be the first mass handbag player with a nationwide reach. We believe that both these brands are setting the stage for another high growth phase for VIP. Outlook & Valuation Considering its strong brand equity, market leadership position, potential of Skybags and Caprese, distribution strength, forward looking management and low financial risk with a debt free balance sheet, we initiate coverage on VIP with a BUY rating and a one year target price of 125 (47% upside), at which the stock will trade at ~ 24X times FY17E earnings of 5.2. At current levels, the stock is trading at ~ 16X times FY17E earnings. Stock Data Current Market Price ( ) 85 Target Price ( ) 125 Potential upside (%) 47 Reuters VIPI.BO Bloomberg VIP IN Key Data Market Cap ( bn) Week Range ( ) 130 / 71 Avg Daily Trading Value last 6 mts(.mn) 36 Promoters (%) FII Holding (%) 2.97 DII Holding (%) Public & Others Holding (%) Fiscal YE YE Mar FY14 FY15 FY16E FY17E Revenues 9,728 10,477 11,419 12,732 EBITDA Margin (%) 8.3% 7.4% 8.4% 9.0% PAT Margin (%) 5.9% 4.4% 5.2% 5.8% EPS P/E P/BV EV/EBITDA ROCE 22.9% 20.4% 26.2% 30.2% ROE 20.1% 15.2% 18.0% 20.8% Dividend payout 48.9% 59.8% 62.5% 63.6% Relative Price Performance Oct-14 Feb-15 Jun-15 Oct-15 VIP Industries Ltd. S&P Bse Sensex One Year Indexed (%) 1 Month 3 Months 12 Months Absolute 18 (13) (21) BSE Relative 10 (8) (23) Yashas Bhat yashas_bhat@lkpsec.com

2 Company Profile VIP Industries VIP is the market leader of the organised luggage industry in India with more than 50% market share. It manufactures and supplies a wide range of hard-sided and soft-sided luggage such as trolleys, suitcases, duffel-bags, backpacks, executive cases, overnight travel solutions, handbags, school bags etc. Established in 1971, it is Asia s largest and the world s 2nd largest luggage manufacturer and has sold over 60 million pieces of luggage around the world. It is an end to end supplier catering to the needs of a diversified customer mix of value for money as well as mid to high end premium segments. It has 4 plants in Maharashtra and 1 in Uttaranchal and sources most of its soft-sided luggage from China and Bangladesh. It has over 20 offices in India with a corporate presence in England, Dubai and Singapore. Its design lab in Nashik has several international patents and design registrations to its credit. Amongst the most recognized and trusted brands in India with its flagship VIP brand, the company has diversified to other brands as well through green-field and brown-field expansion such as Carlton, Caprese, Skybags, Aristocrat and Alfa. VIP also has a moulded furniture business under the brand name Moderna. VIP- A company of diversified brands LKP Research 2

3 Investment Argument VIP enjoys strong brand equity with its flagship VIP brand and other fast growing brands as Skybags, Caprese and Carlton. Strong brand equity to drive volume growth VIP manufactured its very first suitcase in Since then, it has emerged as a category defining brand with its attention to detail and innate ability to be dynamic and progressive. It has never failed to capitalize on its innovations through advertising and promotions as well. Thus, a combination of continual innovation and extensive advertising has led to the growth of its flagship VIP brand which is synonymous with luggage in India. This has helped VIP sustain its leadership position in the organised luggage industry. The traditional brands of the company such as VIP, Alfa and Aristocrat contributed ~ 69% of its revenues in FY15. In addition to its traditional brands, the company is also looking to develop its youth oriented brands such as Skybags, Carlton and Caprese since these brands are witnessing exponential growth. The positioning of the brands mentioned is given below: Brand Year Brand Positioning VIP 1971 Mass mid-premium Alfa 1971 Carlton 2004 Mass market targeted to convert consumers purchasing unbranded luggage to VIPs products Premium international brand, targeted towards young professionals Aristocrat 2007 Value for money Skybags 1980s, re-launched in 2012 Youth oriented, stylish Caprese 2012 Mass-premium, targeted towards fashion conscious urban women We believe that the strong brand equity of all of VIPs brands, its ability to innovate and stay ahead of its competitors and focus on its newer high growth segments would drive volume growth and help support the top-line. LKP Research 3

4 Print media campaigns of VIP over the years LKP Research 4

5 Evolution of market dynamics offer significant upside potential Shift in consumer preference to The total value of the bags and luggage industry in terms of retail sales is estimated branded products and increase in to be ~ 60 bn with organised market having ~ 38% share. This industry has brand visibility to augment top-line. witnessed a healthy growth at a CAGR of ~ 13% over the past decade and a half. An oligopolistic market structure has developed in the organised market with a few notable players such as VIP, Samsonite and Safari.. Share of demand for hard-sided and soft-sided luggage Industry Hard-sided luggage Soft-sided Luggage VIP Hard-sided luggage Soft-sided Luggage 25% 30% 75% 70% Source: Company, LKP Research India has the world s largest youth population with the median age being 27.3 years. ~ 69% of the population is in the year bracket which is VIPs target audience. Also, post 1991 economic reforms, liberalization, privatization and globalization brought a new wave of international brands giving a fillip to the consumerism mindset in India. Population pyramid for India Source: World Factbook, CIA Website The organised luggage segment is currently dominated by VIP and Samsonite. The intense competition between the two companies has led to increased advertising and promotion thereby extending the reach of the 2 brands. With rising influence of media, the instinctive desire for a higher standard of living, an increased awareness of the latest global trends and a large young population with a taste for aesthetics and style with functionality, we expect the shift in preference from unbranded to branded products to gain momentum. Thus, a scenario of rising consumer preference for branded products coupled with higher LKP Research 5

6 visibility of luggage brands is expected to increase the share of the organised market, directly benefiting its market leader VIP Upside potential for VIP Increasing focus to youth oriented and ladies handbag segments expected to set the stage for another high growth phase. Skybags and Caprese to begin a new chapter in VIP s heritage Fast growing brands Skybags, Carlton and Caprese contributed ~ 31% revenues in FY15. These brands have posted a stellar growth on a yoy basis, demonstrating a gradual shift from being a heritage company to a more vibrant and youth centric image. Skybags, which constituted the largest share in revenues amongst the emerging brands, has witnessed ~ 40% growth while Carlton and Caprese grew at ~ 30% and ~ 25% respectively. Share of Traditional and Newer Brands of VIP in the top-line Carlton 6% Caprese 2% Skybags 23% VIP, Aristocrat and Alfa 69% Source:Company, LKP Research Skybags, re-launched in 2012, is a brand that is targeted to style conscious youth who desire stylish aesthetics with functionality. The first Indian brand to manufacture printed polycarbonate luggage, it has fast grown to be the 2nd most significant contributor after the flagship VIP brand. We believe that this brand will continue on its high growth trajectory. VIP has roped in actor Varun Dhawan to enhance its youth appeal. VIP made a foray into the ladies handbag segment in 2012 with Caprese. With over 250 designs available in 22 cities, Caprese offers a wide range of ladies handbags and has positioned itself as a lifestyle brand for the fashion conscious urban woman. LKP Research 6

7 Currently, the ladies handbag industry is predominantly unorganized with several private labels dotting the competitive landscape. Rising disposable income, increase in the number of working women, widening exposure through internet, development of retailing and specialty stores and growing acceptance of handbags as a lifestyle product presents a significant opportunity for VIP. Even though the brand is at a nascent stage, Caprese is poised to grow into one of the most significant contributors to VIPs top-line and bottom-line. It is the management s vision to replicate the success it achieved with luggage in the 1970s with its handbags business and develop Caprese into a brand that contributes significantly to its turnover in the foreseeable future. VIP has also brought Alia Bhatt on board as The Caprese Girl for establishing its brand with the masses. A 10,000+ point of sale network and improved inventory management expected to economize inventory cost and ensure product availability. Economic recovery and increasing spend on travel and discretionary products expected to drive volumes. Distribution strength and improved inventory management to ensure better demand-supply integration One of the USPs of VIP lies in its distribution strength. Its 10,000+ point of sale network enhances brand visibility and reach for the product range of all its brands. While its traditional network of dealers has been the foundation of its distribution prowess, the modern markets segment which comprise of hypermarkets and online sales have gained significant momentum in FY15. Revenues from sales through hypermarkets like Shoppers Stop, Lifestyle, Pantaloons and Central, which comprise ~ 20% of its operational revenues in FY15, have witnessed a growth of ~ 20%. We expect that hypermarket segment will continue its high growth phase as hypermarkets offer comfort, convenience and choice of different products and brands to the consumer with a higher propensity for impulse purchases. In addition to this, online sales have risen ~ 200% in FY15, albeit on a small base, the same being well under 5% of revenues in FY15. VIP has its own E-comm website buytravelbags.com and is also selling its products on all the major online marketplaces like Flipkart, Amazon and Snapdeal. The management identifies the potential of the online marketplace, but has to still finalize its policy on discounting and payment practices in order to keep a check on a possible negative impact of cannibalization on its offline stores. VIP has also adopted a new inventory management system which is based on the Theory of Constraints (TOC). TOC is an overall inventory management philosophy introduced by Mr. Eliyahu M. Goldratt since the 1970s to help organizations continually achieve their goals by better availability of supplies in tandem with demand. We expect that better inventory management of its raw materials and finished stock will help minimize loss of sales enhancing product availability and ensuring optimal inventory costs due to operational efficiencies. Economic recovery, increasing travel and discretionary spend to spur revenue growth The Indian economy is poised for another high growth phase with GDP growth rates estimated at ~ %. We believe that a strong expansion in the country, coupled with favorable oil prices would accelerate growth in India. The economic fundamentals of the country are strong with the government giving a fillip to growth through several initiatives like Make in India, clearance of big ticket infrastructure projects, focus on proper governance and adopting measures to ensure ease of doing business. The RBI is also partaking in the efforts to fuel economic growth through policy rate cuts by as much as 125 basis points in the past 3 quarters and working with banks to make sure the benefits of lower rates are passed on to businesses and the public at large. LKP Research 7

8 Expected GDP growth rates for FY16E and FY17E FY16E FY17E 7.8% 7.8% 7.5% 7.5% 7.5% 7.4% ADB World Bank IMF Source:ADB, WB,IMF The Indian aviation industry has also seen significant growth since the 21 st century. It is the 9 th largest civil aviation market in the world which is set out to grow to the 3 rd largest by Total passenger traffic increased by 12.47% yoy to mn in FY15. Rise in income levels, increased utilisation of air travel for business and leisure as well as low fuel costs is expected to help aviation grow at ~ 18-20% till FY17E. With economic growth expected to be back on track by H2 FY16E, we believe that there would be a rise in discretionary spending leading to growth in demand for branded long haul luggage and short haul products such as handbags and backpacks. We believe there is a high direct correlation between growth in airline passenger traffic and luggage demand. An increase in demand for check-in bags, soft-sided and hard- sided polycarbonate luggage is expected on account of greater domestic and international air travel. This would help drive volumes for VIP thereby improving profitability of its soft-sided and hard-sided luggage brands such as VIP, Aristocrat and Skybags. Financial Performance Revenues Economic recovery, better performance of VIP brand, and sustained growth of youth oriented brands to drive revenues. VIPs revenues have grown steadily at a CAGR of ~ 6.7% during the period FY11 - FY15 which experienced muted economic growth. The company experiences seasonality in demand for its product. Historically, Q1 has always been the strongest quarter for VIP with ~ 31% of operational revenues being earned in Q1FY15. This can be attributed to this period coinciding with the peak wedding season and increased traveling due to the holidays. Q3 also is an important contributor to VIP on the advent of the festive season. We expect revenues from operations to grow ~ 9% and ~ 11.5% in FY16E and FY17E on the back of a turnaround of the Indian economy, better sales performance of its flagship VIP brand and persistent high growth of its other youth oriented brands. LKP Research 8

9 Trend of quarterly operational revenues 4,000 3,500 3,107 3,293 3,544 3,000 2,500 2,000 1,983 2,360 2,275 2,187 2,532 2,461 1,500 1, Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Op. Revenue ( mn) Source:Company, LKP Research Rationalising input costs, increased sourcing from Bangladesh plant to help improve absolute EBITDA and EBITDA margins. EBITDA and EBITDA Margins In spite of an uptrend in revenues, a decline has been observed in absolute EBITDA and EBITDA margins in the past half-decade. From EBITDA level highs of ~ 1.2 bn (~ 15.9%) in FY11, EBITDA has fallen to ~ mn (~ 7.4%) in FY15. Rise in input costs has been a major reason for thinning of margins. The proportion of inputs to sales has increased from ~ 46.5% of revenues in FY11 to ~ 54.7% in FY15. The 2 major categories of inputs i.e. sourced soft-sided luggage from China and polypropylene, a primary raw material for hard-sided luggage both exhibited an uptick in prices. There has also been a higher spend on branding due to aggressive advertising and promotion which is expected to continue at 5-7% of revenues. The reorganization of the sales function to 2 teams: traditional channels and modern markets increased employee costs by 17.5% in FY15. This has been done to increase focus and accountability for both traditional and fast growing modern markets segments. We expect that input costs would rationalise on the back of softening exchange rates, reducing dependency on China for its soft-sided luggage supply due to increasing production from its manufacturing facility in Mongla SEZ, Bangladesh and cut in polypropylene prices which generally lag to crude oil prices. We estimate absolute EBITDA levels to rise to ~ 964 mn (~ 8.4%) and ~ 1,145 mn (~ 9%) in FY16E and FY17E respectively. Trend in absolute EBITDA 1,400 1,200 1,203 1,186 1,145 1, FY11 FY12 FY13 FY14 FY15 FY16E FY17E EBITDA ( ( Mn)) Source:Company, LKP Research LKP Research 9

10 Operational leverage, lower depreciation and negligible interest burden expected to improve absolute PAT and PAT margins. PAT and PAT Margins The adjusted PAT for FY14 is 419 mn in FY14 excluding profit of 158 mn from sale of old investments and property in Bhandup. Similarly, in FY15, the sale of Jalgaon plant also led to an exceptional income of 43 mn, the adjusted PAT being 423 mn. The flat trend in adjusted PAT in FY15 was mainly on account of high depreciation which can be attributed to the commissioning of the Bangladesh plant. Going forward, improved operational performance together with lower interest and depreciation burden is expected to improve PAT and PAT margins to 591 mn (5.2%) and 737 mn (5.8%) in FY16E and FY17E respectively Trend in absolute adjusted PAT 1, FY11 FY12 FY13 FY14 FY15 FY16E FY17E Adj PAT o( ( Mn) Source:Company, LKP Research Risks The flagship VIP brand is currently experiencing a phase of sluggish growth and cannibalization from its fast growing Skybags brand. Since it contributes ~ 50% of revenues, a slow pace of growth for VIP brand would hurt the operational performance of the company. With the rising prominence of Skybags, the company is attempting to support the heritage VIP brand by its repositioning as a go to aspirational travel brand with its new TVC ad campaign. VIP faces intense competition from its rival Samsonite through its Samsonite (high end premium), American Tourister (mass premium) and AT (value for money) brands. Safari is also gaining momentum in the value for money segment. As regards to short haul products like backpacks there are several branded and unorganized players like Wildcraft, Tommy Hilfiger, Delsey, Nike etc. Since strong competitive forces exist in each segment, both from the unorganized and organised markets, VIP faces the risk of losing volumes to competitors as well as margins to increasing discounts in order to protect its leadership position. The traditional dealer network which includes own stores, dealers, franchisees and CSD segments has faced a sub optimal yoy growth in FY15 which was under 5%. Since ~ 75% of sales come from the traditional segment, stagnation in these channels may significantly impact the top-line. In order to mitigate this risk, VIP is in the process of introducing new models of Skybags and VIP in the CSD segment which would help regain the ground it lost to Safari in CSD. The reorganization of its sales team into traditional and modern markets segments is also expected to help sales teams focus and accountability in both these segments LKP Research 10

11 With forex outgo 3.6X times its forex earnings, VIP is not naturally hedged and exchange rate variation is a significant concern for VIP which may adversely affect it operational margins. In addition to currency volatility, rising manpower cost is impacting the cost of soft-sided luggage sourced from China. In order to reduce dependency on Chinese imports, VIP commissioned its Bangladesh facility which is expected to run at 85%-90% capacity in FY16E. The Bangla operations broke even and started earning profits in Q4FY15. Outlook & Valuation Considering its strong brand equity, market leadership position, potential of Skybags and Caprese, distribution strength, forward looking management and a debt free balance sheet, we initiate coverage on VIP with a BUY rating and a one year target price of 125 (47% upside), at which the stock will trade at ~ 24X FY17E earnings of 5.2. At current levels, the stock is trading at ~ 16X FY17E earnings. LKP Research 11

12 . Financials (consolidated) Income statement YE Mar ( Mn) FY14 FY15 FY16E FY17E Revenues 9, , , ,731.7 Raw Materials Cost 5, , , ,839.5 Freight and Forwarding Charges Discount and Rebates Advertising and Marketing Employee Benefit Expenses , , ,209.3 Others 1, , , ,693.2 EBITDA ,144.7 EBITDA Margin (%) 8.3% 7.4% 8.4% 9.0% Depreciation Other Income EBIT ,070.9 EBIT Margin (%) 6.7% 5.9% 7.5% 8.4% Interest PBT ,052.9 PBT Margin (%) 6.6% 5.8% 7.4% 8.2% Exceptional Items Tax PAT PAT Margin (%) 5.9% 4.4% 5.2% 5.8% Adj PAT Adj PAT Margin (%) 4.3% 4.0% 5.2% 5.8% EPS Key Ratios YE Mar FY14 FY15 FY16E FY17E Per Share Data (Rs) EPS CEPS BVPS DPS Growth Ratios(%) Revenues from operations 11.2% 7.7% 9.0% 11.5% EBITDA 17.3% -3.5% 24.5% 18.7% PAT 82.9% -19.2% 26.9% 24.7% Valuation Ratios (X) P/E P/CEPS P/BV EV/Sales EV/EBITDA FCF/EBITDA Profitability Ratios (%) ROCE 22.9% 20.4% 26.2% 30.2% ROE 20.1% 15.2% 18.0% 20.8% Dividend payout 48.9% 59.8% 62.5% 63.6% Dividend Yield 2.3% 2.3% 3.1% 3.9% Source: Company, LKP Research Balance sheet YE Mar ( Mn) FY14 FY15 FY16E FY17E SOURCES OF FUNDS Equity Share Capital Reserves and Surplus 2, , , ,264.8 Total Net Worth 2, , , ,547.4 Total Debt Total Liabilities 2, , , ,547.4 APPLICATION OF FUNDS Fixed Asset Investments Others Current Assets Cash and Bank Inventories 1, , , ,721.8 Sundry Debtors , , ,416.5 Current Investments Loans & Advances Others Current Liabilities and Provisions Current Liabilities 1, , , ,988.0 Provisions Net Current Assets 1, , , ,715.8 Deferred Tax Assets Other Long Term Liabilities (39.0) (45.4) (50.0) (50.0) Total Assets 2, , , ,547.4 Cash Flow YE Mar ( Mn) FY14 FY15 FY16E FY17E PBT ,052.9 Exceptional Items Depreciation Interest Other income (25.5) (24.9) (34.5) (54.0) Change in Working Capital (280.1) (355.2) (124.9) (194.2) Less: Tax (221.1) (189.0) (253.4) (315.9) CF from Operations (a) Capital Expenditure (211.8) (43.0) (50.0) (75.0) Change in /Investments (150.0) (100.0) Other income CF from Investing (b) (183.3) (18.1) (165.5) (121.0) Free Cash Flow (a+b) Dividend paid (281.7) (278.6) (369.3) (469.0) Interest paid (18.0) (12.8) (15.0) (18.0) CF from Financing (c) (299.7) (291.4) (384.3) (487.0) Net Change in cash and CE (23.7) (35.7) Closing Cash and CE LKP Research 12

13 . DISCLAIMERS AND DISCLOSURES LKP Sec. ltd. (CIN-U67120MH1994PLC080039, www. Lkpsec.com) and its affiliates are a full-fledged, brokerage and financing group. LKP was established in 1992 and is one of India's leading brokerage and distribution house. LKP is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited(NSE), MCX Stock Exchange Limited (MCX-SX).LKP along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail), merchant banking, commodity broking, depository participant, insurance broking and services rendered in connection with distribution of primary market issues and financial products like mutual funds etc. LKP hereby declares that it has not defaulted with any stock exchange nor its activities were suspended by any stock exchange with whom it is registered in last five years. However, SEBI and Stock Exchanges have conducted the routine inspection and based on their observations have issued advice letters or levied minor penalty on LKP for certain operational deviations in ordinary/routine course of business. LKP has not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by SEBI at any point of time. LKP offers research services to clients. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Other disclosures by LKP and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company(s) covered in this report-: Research Analyst or his/her relative s financial interest in the subject company. (NO) LKP or its associates may have financial interest in the subject company. LKP or its associates and Research Analyst or his/her relative s does not have any material conflict of interest in the subject company. The research Analyst or research entity (LKP) has not been engaged in market making activity for the subject company. LKP or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report. Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report: (NO) LKP or its associates may have received any compensation including for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. LKP or its associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. LKP or its associates may have received any compensation or other benefits from the Subject Company or third party in connection with the research report. Subject Company may have been client of LKP or its associates during twelve months preceding the date of distribution of the research report and LKP may have co-managed public offering of securities for the subject company in the past twelve months. Research Analyst has served as officer, director or employee of the subject company: (NO) LKP and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, 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 or regulation or which would subject LKP or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of LKP or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read Risk Disclosure Document for Capital Market and Derivatives Segments as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. All material presented in this report, unless specifically indicated otherwise, is under copyright to LKP. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of LKP LKP Securites Ltd, 13th Floor, Raheja Center, Free Press Road, Nariman Point, Mumbai Tel Fax