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Edelweiss Securities Limited

Dish TV (Dish) delivered Q3FY20 revenue and EBITDA in line, whereas PAT undershot our estimate. The company reported revenue in accordance with the changes in the new tariff regime, and hence, it is not comparable YoY. Revenue and EBITDA declined 2.8% QoQ and 2.9% QoQ, respectively. Subscription revenue inched up merely 0.8% QoQ owing to challenges from declining subscriber additions for the entire DTH industry. We retain our cautious stance on the cable/DTH industry owing to increased competitive intensity, challenges to ARPU growth, slow subscriber addition, and rising risks from OTT platforms. We are discontinuing our coverage on the stock. Our last rating was ‘HOLD’ with TP of INR13.

Challenges persist Revenue and EBITDA each fell about 3% QoQ. EBITDA margin remained flat QoQ at

58.3% with total expenses declining ~3% QoQ; however, other expenses dipped ~7%

QoQ. Reported PAT stood at INR(668)mn owing to a tax write-down of ~INR913mn in

Q3FY20. Management did not disclose any information pertaining to subscriber

addition, total subscriber base and ARPU for the DTH business. Hence, we cannot

ascertain the business’s Q3FY20 performance in detail. The last disclosed subscriber

count stood at 23.94mn in Q2FY20, which implies ARPU of INR111 (INR110 in Q2FY20).

Other highlights

Dish disclosed comparable YoY revenue of INR14bn (as per pre-NTO regime), implying

a YoY decline of 7.7%. Adjusting for other revenue segments, comparable ARPU is

estimated to be ~INR182 (INR200 in Q3FY19). Gross debt, as on 30 September, 2019

stood at INR19bn against INR21.5bn as on 30 June, 2019, with the company’s overall

net debt at INR17bn as on 30 September, 2019.

Outlook: Discontinuing coverage

We are discontinuing coverage on the stock. Our last recommendation was ‘HOLD/SU’

with TP of INR13. At CMP, the stock is trading at 0.8x FY21E EV/EBITDA.

COMPANY UPDATE

DISH TV INDIA Testing times

COMPANYNAME

EDELWEISS 4D RATINGS

Absolute Rating HOLD

Rating Relative to Sector Underperform

Risk Rating Relative to Sector Medium

Sector Relative to Market Overweight

MARKET DATA (R: DSTV.BO, B: DITV IN)

CMP : INR 12

Target Price : INR 13

52-week range (INR) : 42 / 10

Share in issue (mn) : 1,841.3

M cap (INR bn/USD mn) : 22 / 309

Avg. Daily Vol.BSE/NSE(‘000) : 37,518.0

SHARE HOLDING PATTERN (%)

Current Q2FY20 Q1FY20

Promoters *

54.9 55.3 57.5

MF's, FI's & BK’s 2.9 5.1 3.8

FII's 11.2 12.5 11.6

Others 30.9 27.1 27.1

* Promoters pledged shares (% of share in issue)

: 93.5

PRICE PERFORMANCE (%)

Stock Nifty

EW Media Index

1 month (7.0) (0.5) 3.0

3 months (20.0) 2.4 (2.9)

12 months (64.5) 12.6 (19.8)

Abneesh Roy +91 22 6620 3141

[email protected]

Prateek Barsagade +91 22 4063 5407

[email protected]

India Equity Research| Media

April 16, 2020

Financials (INR mn)

Year to March Q3FY20 Q3FY19 % change Q2FY20 % change FY19 FY20E FY21E

Revenues 8,678 15,175 (42.8) 8,932 (2.8) 61,661 35,218 36,484

EBITDA 5,056 5,319 (5.0) 5,205 (2.9) 20,443 20,679 21,478

Adjusted Profit (668) 1,527 (143.7) (964) NM 3,992 (3,273) 626

Adj. diluted EPS (0.4) 0.8 (0.5) 2.2 (1.8) 0.3

EV/EBITDA (x) 2.6 1.7 1.4

Media

2 Edelweiss Securities Limited

Table 1: Trends at glance

Source: Edelweiss research

Note: From Q4FY18, all the numbers are adjusted for the merger.

Outlook and valuation: Challenging times; maintain ‘HOLD’

While Dish TV has a large subscriber base of ~24mn, downtrend of ARPUs, economic stress

in Tier-II/III markets, heightened competition and cheap data constitute significant risk to

the business model. Additionally, proliferation of content and rising popularity of digital and

OTT video consumption pose as significant threats to the DTH business. We also believe that

the scope of value-add by distributors in the NTO regime has become limited and is likely to

constrict the business growth going ahead.

We maintain our cautious stance on the cable and distribution space given the challenging

environment. For Dish TV, we believe the resolution of issues at the promoter level would

be key, since promoter pledging stands at a high ~94%. Hence, we trim are cutting the

target EV/EBITDA from 2.5x to 1.8x. This along with a valuation rollover to June 2021E yields

a TP of INR13 (INR15 earlier). The stock is trading at 1.4x FY21E EV/EBITDA. Maintain

‘HOLD/SU’.

Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20

ARPU (INR) 144 201 214 207 200 - 115 110 NA

Subscription revenue 14,430 13,771 14,893 14,536 14,126 13,083 8,261 7,920 7,982

Gross subscriber (mn) 26.2 NA NA NA NA NA NA NA NA

Net subscriber (mn) 16.2 23.0 23.3 23.5 23.6 23.7 23.9 23.9 NA

Net subscriber addition (mn) 0.25 0.20 0.30 0.20 0.14 0.04 0.21 0.04 NA

Profit before tax 261 (667) 342 286 464 (823) 310 171 246

Free cash flow NA NA NA NA 2,250 950 NA NA NA

Monthly churn rate (%) 0.80 NA 1.00 1.00 1.00 - 0.90 NA NA

Gross debt (mn) NA 27,500 27,500 25,500 24,500 22,500 21,500 19,000 NA

Net debt(mn) 8,100 22,000 22,000 21,500 20,500 20,700 19,000 17,000 NA

Revenue (1.0) NA NA NA NA NA NA NA NA

EBITDA margin 27.1 26.1 33.6 33.9 34.1 29.7 57.9 58.3 58.3

Growth rate (YoY)

% of revenue

Dish TV India


Financial snapshot (Consolidated) (INR mn)

(INR mn) Q3FY20 Q3FY19 % change Q2FY20 % change YTD20 FY20E FY21E

Revenues 8,678 15,175 (42.8) 8,932 (2.8) 26,873 35,218 36,484

Total Expenditure 3,622 9,855 (63.2) 3,727 (2.8) 11,252 14,539 15,006

Total operating cost 3,161 9,252 (65.8) 3,287 (3.8) 9,902 13,165 13,583

Employee expenses 461 604 (23.6) 440 4.7 1,350 1,373 1,423

SGA expenses 1,251 1,107 13.1 1,347 (7.1) 3,719 4,156 4,305

EBITDA 5,056 5,319 (5.0) 5,205 (2.9) 15,621 20,679 21,478

D&A expense 3,472 3,532 (1.7) 3,687 (5.8) 10,789 14,668 15,806

EBIT 1,584 1,787 (11.4) 1,518 4.3 4,833 6,011 5,672

Less: Interest Expense 1,369 1,444 (5.2) 1,382 (1.0) 4,219 5,800 5,000

Add: Other Income 31 121 (74.4) 36 (13.6) 113 150 165

Add: Prior period - - - - - -

Add: Exceptional item - - - - - -

Profit before tax 246 464 (47.1) 171 43.4 726 361 837

Less: Provision for Tax 913 (1,063) (185.9) 1,135 (19.5) 2,712 3,634 211

Less: Minority Interest - - - - - -

Add: Share of profits from associates - - - - - -

Reported Profit (668) 1,527 NM (964) NM (1,986) (3,273) 626

Adjusted Profit (668) 1,527 NM (964) NM (1,986) (3,273) 626

No. of Diluted shares outstanding (mn) 1,841 1,841 NM 1,841 NM 1,841 1,841

Adjusted Diluted EPS -0.4 0.8 (0.5) (2) 0

EV/EBITDA (x) 1.7 1.4

as % of net revenues

Employee cost 5.3 4.0 134 4.9 38 5.0 3.9 3.9

SGA expenses 14.4 7.3 713 15.1 (66) 13.8 11.8 11.8

EBITDA 58.3 35.1 2,321 58.3 (1) 58.1 58.7 58.9

Net profit margins (7.7) 10.1 NA (10.8) NA (7.4) (9.3) 1.7

Media


Company Description

Dish TV is India’s largest DTH company and part of the country’s biggest media

conglomerate, the ZEE Group. Post merger with Videocon D2H, its net subscriber base now

stands at 23mn. Dish TV has on its platform more than 470 channels and services. It uses the

NSS-6 satellite platform which is unique in the Indian subcontinent owing to its automated

power control and contoured beam which makes it suitable for use in ITU K and N rain

zones, ideally suited for India’s tropical climate. The company has a vast distribution

network of more than 1,685 distributors and 201,300 dealers spanning 8,929 towns in the

country. It has six 24x7 call centres catering to 11 different languages to take care of

subscriber requirements at any point of time. Investment Theme

Delay in tariff agreements between MSOs and LCOs may result in DTH players like Dish TV

getting incremental subscriber additions during the digitisation process. As the merger with

Videocon D2H has been completed, Dish TV will have the benefit of economies of scale,

lending it higher bargaining power with broadcasters and other stakeholders, and the cost

synergies arising out of the merger will boost margin. With the impact of demonetisation

behind, we expect ARPU to catapult as the company has prudently shifted focus on HD

boxes and quality subscribers. Innovations like launch of Zing brand for regional markets,

likely entry in OTT space and reduction in debt further bolster our confidence.

Key Risks

Any adverse judgment in the ongoing DTH licence fee case in TDSAT.

Slowdown in subscriber additions.

Competition from other DTH service providers.

Limited ARPU growth.


Dish TV India

Financial Statements

Income statement (INR mn)

Year to March FY19 FY20E FY21E FY22E

Net revenue 61,661 35,218 36,484 34,990

Prog/content costs 33,918 9,010 9,278 8,844

Employee costs 2,475 1,373 1,423 1,365

Total SG&A expenses 4,825 4,156 4,305 4,129

Total operating expenses 41,219 14,539 15,006 14,337

EBITDA 20,443 20,679 21,478 20,653

Depreciation 14,409 14,668 15,806 15,694

EBIT 6,034 6,011 5,672 4,959

Less: Interest Expense 6,287 5,800 5,000 4,500

Add: Other income 521.5 150.00 165.00 182.00

Profit Before Tax (15,357) 361 837 641

Less: Provision for Tax (3,723) 3,634 211 162

Add: Exceptional items (15,625) - - -

Reported Profit (11,634) (3,273) 626 480

Exceptional Items (15,625) - - -

Adjusted Profit 3,991 (3,273) 626 480

Shares o /s (mn) 1,841 1,841 1,841 1,841

Adjusted Basic EPS 2.2 (1.8) 0.3 0.3

Diluted shares o/s (mn) 1,841 1,841 1,841 1,841

Adjusted Diluted EPS 2.2 (1.8) 0.3 0.3

Adjusted Cash EPS 10.0 6.2 8.9 8.8

Common size metrics


Pay channel cost 55.0 25.6 25.4 25.3

Staff costs 4.0 3.9 3.9 3.9

EBITDA margins 33.2 58.7 58.9 59.0

Net Profit margins 6.5 (9.3) 1.7 1.4

Growth ratios (%)


Revenues 33.1 (42.9) 3.6 (4.1)

EBITDA 55.3 1.2 3.9 (3.8)

Key Assumptions


Macro

GDP(Y-o-Y %) 6.8 5.0 5.8 6.5

Inflation (Avg) 3.4 4.3 4.8 5.0

Repo rate (exit rate) 6.3 5.2 4.5 5.0

USD/INR (Avg) 70.0 71.5 71.0 70.0

Company

Sales assumptions 1 1 1 1

Subscriber adds (mn) 0.7 0.5 0.6 0.6

ARPU (INR) 202.0 115.0 118.0 110.0

Sub rev (% of total rev) 93.9 88.2 87.4 86.9

Cont cost (% of sub rev) 55.0 25.6 25.4 25.3

Sell & dis exp(% of rev) 11.4 11.8 11.8 11.8

Personnel cost(% of rev) 4.0 3.9 3.9 3.9

Adm & othr exp(% of rev) 7.8 11.8 11.8 11.8

Capex (INR mn) 256 5,572 7,550 6,550

Debtor days 9 9 9 9

Inventory days 3 3 3 3

Payable days 50 44 44 44

Cash conversion cycle (38) (32) (32) (32)


Media

Cash flow metrics


Operating cash flow (6,186) 15,854 16,540 15,099

Financing cash flow 2,347 (12,834) (6,401) (7,800)

Investing cash flow 1,851 (14,190) (14,358) (11,450)

Net cash Flow (1,989) (11,171) (4,219) (4,151)

Capex (11,832) (6,774) (6,000) (5,200)

Profitability and efficiency ratios


ROAE (%) 6.5 (6.2) 1.2 0.9

ROACE (%) 6.8 8.0 8.9 8.0

Inventory Days 3 3 3 3

Debtors Days 8 8 8 8

Payable Days 44 44 44 44

Cash Conversion Cycle (33) (33) (33) (33)

Current Ratio 0.4 0.3 0.3 0.3

Gross Debt/EBITDA 1.7 0.7 0.6 0.5

Gross Debt/Equity 0.6 0.3 0.2 0.2

Adjusted Debt/Equity 1.2 0.3 0.2 0.2

Interest Coverage Ratio 1.0 1.0 1.1 1.1

Operating ratios


Total Asset Turnover 0.7 0.5 0.6 0.6

Fixed Asset Turnover 0.6 0.4 0.4 0.4

Equity Turnover 1.0 0.7 0.7 0.7

Valuation parameters


Adj. Diluted EPS (INR) 2.2 (1.8) 0.3 0.3

Adjusted Cash EPS (INR) 10.0 6.2 8.9 8.8

P/B (x) 0.4 0.4 0.4 0.4

EV / Sales (x) 0.9 1.0 0.8 0.8

EV / EBITDA (x) 2.6 1.7 1.4 1.4

Balance sheet (INR mn)

As on 31st March FY19 FY20E FY21E FY22E

Share capital 1,841 1,923 1,923 1,923

Reserves & Surplus 53,087 49,815 50,441 50,921

Shareholders' funds 54,929 51,737 52,364 52,844

Minority Interest (346) (346) (346) (346)

Long term borrowings 12,393 7,500 7,000 6,000

Short term borrowings 21,498 7,000 6,000 5,000

Total Borrowings 33,891 14,500 13,000 11,000

Long Term Liabilities 636 636 636 636

Def. Tax Liability (net) (9,993) (9,993) (8,366) (6,367)

Sources of funds 79,116 56,533 57,287 57,766

Gross Block 145,984 162,374 176,282 188,032

Net Block 33,489 25,522 25,409 24,613

Capital work in progress 7,666 7,000 7,000 7,000

Intangible Assets 68,863 68,863 68,863 68,863

Total Fixed Assets 110,018 101,385 101,272 100,476

Cash and Equivalents 1,707 2,074 3,954 3,637

Inventories 247 280 300 284

Sundry Debtors 1,406 1,406 1,406 1,280

Loans & Advances 354 500 450 400

Other Current Assets 19,986 17,147 16,721 16,495

Current Assets (ex cash) 21,994 19,333 18,877 18,459

Trade payable 13,899 12,899 13,999 13,198

Other Current Liab 40,703 53,309 53,609 51,609

Total Current Liab 54,602 66,208 67,608 64,807

Net Curr Assets-ex cash (32,609) (46,875) (48,731) (46,348)

Uses of funds 79,116 56,533 57,287 57,766

BVPS (INR) 29.8 28.1 28.4 28.7

Free cash flow (INR mn)


Reported Profit (11,634) (3,273) 626 480

Add: Depreciation 14,409 14,668 15,806 15,694

Interest (Net of Tax) 6,287 5,800 5,000 4,500

Others (3,985) 2,995 (2,512) 4,332

Less: Changes in WC 11,263 4,337 2,380 9,907

Operating cash flow (6,186) 15,854 16,540 15,099

Less: Capex 11,832 6,774 6,000 5,200

Free Cash Flow (18,019) 9,080 10,540 9,899


Dish TV India

Insider Trades

Reporting Data Acquired / Seller B/S Qty Traded

08 Apr 2019 Direct Media Distribution Ventures Pvt Ltd Sell 1800000.00

01 Apr 2019 Direct Media Distribution Ventures Pvt Ltd Sell 2711500.00

08 Mar 2019 Siddharth Kabra & Relatives Sell 25000.00

07 Mar 2019 Veena Investments Private Limited Sell 475000.00

07 Mar 2019 Direct Media Distribution Ventures Pvt Ltd Sell 10195000.00

*in last one year

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

22 May 2019 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND SELL 12075386 28.73

*in last one year

Holding – Top10 Perc. Holding Perc. Holding

Pricomm media distri 29.07 World crest advisors 27.3

Direct media dist ve 19.99 Veena investments pv 4.24

East bridge capital 2.61 Direct media solutio 2.56

Agrani holdings maur 1.91 Ivy icon solutions l 1.74

Aditya birla sun lif 1.59 Arbitrage bnp pariba 1.36

*in last one year

Additional Data

Directors Data Subhash Chandra Non-Executive Chairman Jawahar Lal Goel Managing Director

Ashok Kurien Non-Executive Director Bhagwan Dass Narang Independent Director

Arun Duggal Independent Director Eric Zinterhofer Independent Director

Lakshmi Chand Independent Director Mintoo Bhandari Non-Executive Nominee Director

Utsal Baijal Alt.Director to Mintoo Bhandari Dr. Rashmi Aggarwal Independent Director

Auditors - M/s B S R & Co., Gurgaon

*as per last annual report


Company Absolute

reco

Relative

reco

Relative

risk

Company Absolute

reco

Relative

reco

Relative

Risk

DB Corp HOLD SU M DEN Networks HOLD SU H

Dish TV India HOLD SU M Hathway Cable & Datacom HOLD SP M

Inox Leisure BUY SO L Jagran Prakashan HOLD SU M

PVR BUY SO M Sun TV Network BUY SO H

Zee Entertainment Enterprises BUY SO M

RATING & INTERPRETATION

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria

Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe

within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria

Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return


Dish TV India

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098.

Board: (91-22) 4009 4400, Email: [email protected]

Aditya Narain

Head of Research

[email protected]

Coverage group(s) of stocks by primary analyst(s): Media

Dish TV India, INOX Leisure, PVR, Sun TV Network, Zee Entertainment Enterprises

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe

Rating Distribution* 161 67 11 240 * 1stocks under review

Market Cap (INR) 156 62 11

Date Company Title Price (INR) Recos

Recent Research

08-Apr-20 Media COVID-19: A costly interval Sector Update

12-Mar-20 DB Corp Mired amidst challenges; Company Update

100 Hold

05-Mar-20 Media Coronavirus: Minor sting in otherwise structural story; Sector Update

> 50bn Between 10bn and 50 bn < 10bn

Buy Hold Reduce Total

Rating Interpretation

Buy appreciate more than 15% over a 12-month period

Hold appreciate up to 15% over a 12-month period

Reduce depreciate more than 5% over a 12-month period

Rating Expected to

-

149

297

446

594

743

Jan

-14

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-14

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-14

Ap

r-1

4

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-14

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-14

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14

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g-1

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0

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-19

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Dish TV India


Media

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Dish TV India

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ESL has 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

Subject company may have been client during twelve months preceding the date of distribution of the research report.

There were no instances of non-compliance by ESL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years except that ESL had submitted an offer of settlement with Securities and Exchange commission, USA (SEC) and the same has been accepted by SEC without admitting or denying the findings in relation to their charges of non registration as a broker dealer.

A graph of daily closing prices of the securities is also available at www.nseindia.com

Analyst Certification:

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.

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Disclaimer for U.S. Persons

This research report is a product of Edelweiss Securities Limited, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account.

This report is intended for distribution by Edelweiss Securities Limited only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor.


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In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Edelweiss Securities Limited has entered into an agreement with a U.S. registered broker-dealer, Edelweiss Financial Services Inc. ("EFSI"). Transactions in securities discussed in this research report should be effected through Edelweiss Financial Services Inc. Disclaimer for U.K. Persons

The contents of this research report have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). In the United Kingdom, this research report is being distributed only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005 (the “Order”); (b) persons falling within Article 49(2)(a) to (d) of the Order (including high net worth companies and unincorporated associations); and (c) any other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This research report must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this research report relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this research report or any of its contents. This research report must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. Disclaimer for Canadian Persons

This research report is a product of Edelweiss Securities Limited ("ESL"), which is the employer of the research analysts who have prepared the research report. The research analysts preparing the research report are resident outside the Canada and are not associated persons of any Canadian registered adviser and/or dealer and, therefore, the analysts are not subject to supervision by a Canadian registered adviser and/or dealer, and are not required to satisfy the regulatory licensing requirements of the Ontario Securities Commission, other Canadian provincial securities regulators, the Investment Industry Regulatory Organization of Canada and are not required to otherwise comply with Canadian rules or regulations regarding, among other things, the research analysts' business or relationship with a subject company or trading of securities by a research analyst. This report is intended for distribution by ESL only to "Permitted Clients" (as defined in National Instrument 31-103 ("NI 31-103")) who are resident in the Province of Ontario, Canada (an "Ontario Permitted Client"). If the recipient of this report is not an Ontario Permitted Client, as specified above, then the recipient should not act upon this report and should return the report to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any Canadian person. ESL is relying on an exemption from the adviser and/or dealer registration requirements under NI 31-103 available to certain international advisers and/or dealers. Please be advised that (i) ESL is not registered in the Province of Ontario to trade in securities nor is it registered in the Province of Ontario to provide advice with respect to securities; (ii) ESL's head office or principal place of business is located in India; (iii) all or substantially all of ESL's assets may be situated outside of Canada; (iv) there may be difficulty enforcing legal rights against ESL because of the above; and (v) the name and address of the ESL's agent for service of process in the Province of Ontario is: Bamac Services Inc., 181 Bay Street, Suite 2100, Toronto, Ontario M5J 2T3 Canada. Disclaimer for Singapore Persons

In Singapore, this report is being distributed by Edelweiss Investment Advisors Private Limited ("EIAPL") (Co. Reg. No. 201016306H) which is a holder of a capital markets services license and an exempt financial adviser in Singapore and (ii) solely to persons who qualify as "institutional investors" or "accredited investors" as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore ("the SFA"). Pursuant to regulations 33, 34, 35 and 36 of the Financial Advisers Regulations ("FAR"), sections 25, 27 and 36 of the Financial Advisers Act, Chapter 110 of Singapore shall not apply to EIAPL when providing any financial advisory services to an accredited investor (as defined in regulation 36 of the FAR. Persons in Singapore should contact EIAPL in respect of any matter arising from, or in connection with this publication/communication. This report is not suitable for private investors.

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