IDirect_SCI_Q3FY13=23-2-13

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February 20, 2013

ICICI Securities Ltd|Retail Equity Research

Result Update

WHATS CHANGED

PRICE TARGET. ............................Unchanged

EPS (FY13E) ............................................................................ Changed from | -0.6 to | 1.7

EPS (FY14E)Unchanged

EPS (FY15E)...Introduced at | -3.6

RATING.Changed from Sell to Hold

Steering in turbulent times

Shipping Corporation (SCI) reported a loss at the PAT level. However, theoperating margin showed a marked improvement QoQ. Revenue growthfor Q3FY13 remained flattish at 0.3% at | 1031.7 crore against | 1028.7crore in Q2FY13. EBITDA doubled in Q3FY13 on a QoQ basis to | 139.7crore vis--vis | 67.3 crore in Q2FY13 on account of an improvement inEBITDA margin by 700 bps to 13.5% for the present quarter. PAT forQ3FY13 turned negative to - | 75.3 crore in the absence of anyextraordinary gain. On a segmental basis, the liner segment recorded thesteepest fall of revenue by 24% while the bulk segment revenue wasdown 11% QoQ. However, at the EBIT level, the bulk segment posted aloss of | 110.4 crore whereas the liner segment recorded a profit of | 14.1crore. The heartening factor has been the continual growth in the highmargin offshore segment where revenues grew 8% sequentially and 97%YoY. On the fleet profile front, a decline in global asset prices due toimpending tonnage addition (141 million dwt for CY12) pushed SCIs netNAV to | 79 in Q3FY13 from | 84 in Q2FY13.Planned induction of offshore vessels to improve fleet profileSCI expanded its fleet in Q3FY13 by adding a crude oil tanker, twoPanamax, one Kamsarmax bulk carrier & one platform support vesseltaking total fleet size to 79. A conscious effort is being made to increasethe fleet size in the offshore segment, which contributes ~9% of revenueand forms ~20% of the fleet size (in numbers). Going ahead, within a yearSCI is mulling adding eight offshore vessels along with two VLCC, threebulk carriers & four Liner vessels at a total outlay of $728 million. Capitalbudget for FY12-13 is | 2500 crore and FY13-14 is | 1800 crore.

High fixed cost with suppressed charter rates to depress profitSCI continues to expand its fleet amid declining time charter yield rates(TCY $/day). Further, rates are expected to remain depressed owing toexcess tonnage addition leading to insufficient revenue generation forcovering depreciation and interest charges. Consequently, we anticipateSCI will report loss at the net profit level. Rolling over to FY15 estimates,we believe charter rates will remain under pressure. Hence, we value thestock at 0.35x FY15E book value and assign a target price of | 48. Wechange our rating on the stock from SELL to HOLD.Exhibit 1:Financial Performance(| cr) Q3FY13 Q3FY13E Q3FY12 Q2FY13 YoY Gr. (%) QoQ Gr.(%)

Net Sales 1031.7 1091.0 978.9 1028.7 5.4 0.3

EBITDA 139.7 87.3 -50.6 67.3 LP 107.6

EBITDA Margin (%) 13.5 8.0 -5.2 6.5 LP 700 bpsDepreciation 193.3 210.0 158.0 196.5 22.4 -1.6

Interest 46.6 30.0 102.8 30.0 -54.7 55.5

Reported PAT -75.3 -122.7 74.1 297.2 PL PL

EPS (|) -1.6 -2.6 1.6 6.4 PL PL Source: Company, ICICIdirect.com Research

Shipping Corporation of India (SCI)

| 49

ting matrix

ing : Hold

get : | 48

get Period : 12 months

ential Upside : - 2%

y Financials

cr) FY12 FY13E FY14E FY15E

t Sales 3867.6 4460.5 5078.0 6110.5

ITDA 23.4 446.0 584.0 763.8

t Profit -428.2 80.7 -291.4 -168.6

S (|) -9.2 1.7 -6.3 -3.6

luation summary

FY12 FY13E FY14E FY15E

(x) -5.3 28.3 -7.8 -13.5

rget PE (x) -5.2 27.7 -7.7 -13.3

to EBITDA (x) 272.4 18.1 14.9 11.2

ce to book (x) 0.3 0.3 0.3 0.4

NW (%) -6.4 1.2 -4.5 -2.7

CE (%) -4.7 -2.4 -2.0 -1.1

ock data

arket Cap. (| cr) 2282

bt( FY12) (| cr) 5525

sh (FY12) (| cr) 1442

(| cr) 6365

week H/L (| cr) 82 / 46

uity capital (| cr) 465.8

ce value (|) 10

Holding (%) 19.4

Holding (%) 2.1

ce movement

20

30

40

50

60

70

80

Feb-13Nov-12Aug-12May-12Mar-12

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

Price (R.H.S) Nifty (L.H.S)

alysts name

harat [email protected]

oumojeet Kr [email protected]

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ICICI Securities Ltd|Retail Equity Research Page 2

Exhibit 2:Topline performance trend

978.9 1028.7 1031.7

4460.5

5078.0

6110.5

0

1000

2000

3000

4000

5000

6000

7000

Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E

Revenue

Source: Company, ICICIdirect.com Research

Exhibit 3:Segmental analysisQ3FY13 Q2 FY13 Q3FY12 YoY(Ch %) QoQ(Ch %) 9MFY13 9MFY12 YoY(Ch %)

Revenue

Liner Segment 279.7 369.3 376.8 -25.8 -24.3 898.7 998.4 -10.0

Bulk Segment 639.2 721.3 888.7 -28.1 -11.4 2,190.3 2,197.4 -0.3

Others 112.8 104.6 57.1 97.7 7.9 298.4 148.1 101.5

EBIT

Liner Segment 14.1 31.6 (24.1) LP -55.4 5.3 (87.1) LP

Bulk Segment (110.4) (126.2) 137.9 PL NA (186.6) 124.1 PL

Others 42.8 44.8 23.0 85.7 -4.5 114.3 60.2 90.0

EBIT Margin

Liner Segment 5.0 8.6 (6.4) - -352 bps 0.6 (8.7) NA

Bulk Segment (17.3) (17.5) 15.5 PL NA (8.5) 5.6 NA

Others 37.9 42.8 40.4 -244 bps -491 bps 38.3 40.6 -232 bps Source: Company, ICICIdirect.com Research

Exhibit 4:EBITDA performance trend

67.3139.7

-50.6

446.0

584.0

763.812.5

11.510.013.5

6.5

-5.2

-100

0

100

200

300

400

500

600

700

800

900

Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E

|cr

-10

-5

0

5

10

15

%

EBITDA OPM


We expect revenue growth to pick up post completion offleet addition by end of FY14. Average TCY $/day in caseof dry bulk and product carriers have declined 44% and15%, respectively YoY whereas crude carrier rates haveimproved 8% YoY. Massive tonnage addition in the dry

bulk segment to the tune of ~106 million dwt in CY12and another 99 million dwt by end of CY13 is expectedto put pressure on freight rates

In the container segment, SCI merged the Mediterraneanand North Sea route and replaced the existing servicewith larger capacity ships. SCI also started a newcontainer service on the African sector

Both bulk and liner segments registered de-growth on aQoQ basis, declining 24% and 11%, respectively. Also,revenue in 9MFY13 declined 10% over 9MFY12. At theEBIT level, the liner segment made a modest profit of| 5.3 crore whereas the bulk segment continues toreport loss on 9M basis. However, the offshore segmentcontinues to post robust growth with revenue improving97% and EBIT increasing 86% YoY basis.

EBITDA margin for Q3FY13 improved 700 bps to 13.5%.Going ahead, the EBITDA is expected to improve thoughat a capped rate. Bunker cost and other expensescontinue to play a pivotal role in determining the EBITDAmargin.

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Exhibit 5:PAT performance trend

-75.3

-168.6

74.1

80.7

297.2

-291.4

-3-6

2

-7

29

8

-400

-300

-200

-100

0

100

200

300

400

Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E|cr

-10

-5

0

5

10

15

20

25

30

35

%

PAT NPM


Exhibit 6:Current fleet profile19

15

12

4

16

6

15

1

02468

101214161820

Crude

Prod

uct

Chem

ical

G

as

VLCC

Dryb

ulk

Lin

ers

O

SV

Passen

ger


Exhibit 7:Revenue expected to improve in FY14E and FY15E

3594.6 3867.6

4460.5

5078.0

6110.5

0

1000

2000

3000

4000

5000

6000

7000

FY11 FY12 FY13E FY14E FY15E

|cr

Revenue


Inadequate EBITDA generation and higher depreciation

expense owing to its new vessel induction schedule would

add to the stress on profitability and lead the company to

report loss at the net profit level in FY14E and FY15E in the

absence of any extraordinary gain

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Exhibit 8:Operating margin to recover in FY13E & FY14E824.9 763.8

23.4

584.0

446.0

22.9

0.6

10.0

11.5

12.5

0

100

200

300

400500

600

700

800

900


|cr

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

%

EBITDA EBITDA %


Exhibit 9:PAT expected to be negative in FY14E & FY15E567.3

-428.2

-168.6

-291.4

80.7

16.0

1.9

-5.8 -2.8

-11.2

-600

-400

-200

0

200

400

600

800


|cr

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

%

PAT PAT %


Conference call highlights

The industry continues to face the challenge of a downturn inglobal trade and oversupply of tonnage resulting in depressedoperating margin

There was route consolidation in major services like China,Mediterranean and North Sea segment, where existing ships werereplaced with greater capacity ones. The Asia-Europe routeremains the largest revenue generator for the liner segment

Bulk and tanker division freight rates continue to face pressure.Tanker rates saw a revival due to seasonal demand.

Offshore market has been steady compared to other segments inthe shipping sector. SCI is mulling ramping up the offshoredivision with addition of eight vessels next year & partnering withother private players besides ONGC in the offshore business

SCI is also expecting delivery of two VLCC, three bulk carrier &four liner vessels next year. Total cost was to the tune of $728

million Capital budget numbers for FY12-13 and FY13-14 stood at | 2500

crore and | 1800 crore, respectively

Significant fleet addition (~22% of current fleet) over thecoming year by SCI would lead to higher revenues in FY14Eand FY15E (to an extent also aided by exchange rate).However, revenue generation is expected to remain strained(in spite of a reduction in age of fleet) due to weak freight rates

across vessel categories. The offshore segment is expected toadd significantly (more than 8%) to revenue of SCI

Exhibit10:Tanker freight rates (yearly average) trend

-

10

2030

40

50

60

70

80

CY04

CY05

CY06

CY07

CY08

CY09

CY10

CY11

CY12

Thousands

US$/day

VLCC Suezmax Aframax

Source: Bloomberg, ICICIdirect.com Research

Globally, average tanker freight rates are near their eight yearlow and a revival in the near term seems unlikely owing to highproportion of fleet expected to be added over the next twoyears.

Exhibit 11 : Dry bulk indices trend

0

2000

4000

6000

8000

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Index

BDI BCI BPI


Dry bulk carrier freight rates continue to remain depressedunder challenging global conditions.

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Valuation

SCI continues to expand its fleet amid declining time charter yield rates(TCY $/day). Further, rates are expected to remain depressed owing toexcess tonnage addition leading to insufficient revenue generation forcovering depreciation and interest charges. Consequently, we anticipate

SCI will report loss at the net profit level. Rolling over to FY15 estimates,we believe charter rates will remain under pressure. Hence, we value thestock at 0.35x FY15E book value and assign a target price of | 48. Wechange our rating on the stock from SELL to HOLD.Exhibit 12 : Valuation parameter

Valuation based on Global average Target multiple Target pr ice (|)

- -

Price to book value (x) 0.9 0.35 48.0

Target price (|) 48.0

Current market price (|) 49.0

Upside (%) -2.0

Source: ICICIdirect.com Research

Exhibit 13: ValuationSales Sales EPS EPS PE EV/EBITDA RoNW RoCE

(| cr) Growth (%) (|) Growth (%) (x) (x) (%) (%)

FY13E 4460.5 15.3 1.7 LP 28.3 18.1 1.2 -2.4

FY14E 5078.0 13.8 -6.3 PL -7.8 14.9 -4.5 -2.0

FY15E 6110.5 20.3 -3.6 -42.1 -13.5 11.2 -2.7 -1.1 Source: Company, ICICIdirect.com Research

Exhibit 14 : Revised estimates

(| cr) FY14E FY15E FY14E FY15E

Sales 4729.8 0.0 5078.0 6110.5

EBITDA 595.2 0.0 584.0 763.8

Net Profit -198.6 0.0 -291.4 -168.6

EPS -4.3 0.0 -6.3 -3.6

Old New


Rolling over to FY15 we have revised our estimates to factor inthe fleet addition, higher depreciation charges and challengingfreight rate scenario

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Financial summary

Profit and loss statement

(| Crore)

(Year-end March) FY12 FY13E FY14E FY15E

Total operating Income 3,867.6 4,460.5 5,078.0 6,110.5Growth (%) 9.1 15.3 13.8 20.3

Direct Operating Expenses 597.5 857.1 847.5 980.1

Bunker Cost 1,560.3 1,605.8 1,929.6 2,322.0

Hire of chartered ships 402.1 401.4 406.2 488.8

Administration expenses 101.6 133.8 152.3 183.3

Other expenses 923.1 1,025.9 1,025.8 1,179.3

Total Operating Expenditure 3,844.2 4,014.4 4,494.0 5,346.7

EBITDA 23.4 446.0 584.0 763.8

Growth (%) -97.2 1,808.6 30.9 30.8

Depreciation 608.7 766.2 868.0 915.2

Interest 387.3 210.6 176.9 190.3

Other Income 599.6 188.8 157.9 179.7

PBT -373.0 -341.9 -303.0 -162.1

Others 33.0 500.0 100.0 100.0

Total Tax 88.2 77.4 88.4 106.5

PAT -428.2 80.7 -291.4 -168.6

Growth (%) PL NA NA NA

EPS (|) -9.2 1.7 -6.3 -3.6 Source: Company, ICICIdirect.com Research

Cash flow statement

(| Crore)


Profit after Tax -428.2 80.7 -291.4 -168.6

Add: Depreciation 608.7 766.2 868.0 915.2

(Inc)/dec in Current Assets 440.3 222.7 -175.6 282.6

Inc/(dec) in CL and Provisions -19.2 161.6 117.0 211.9

Others 0.0 0.0 0.0 0.0

CF from operating activities 601.6 1,231.2 518.0 1,241.1

(Inc)/dec in Investments -19.1 0.0 0.0 0.0

(Inc)/dec in Fixed Assets -1,524.6 -2,500.0 -1,500.0 -500.0

Others 0.0 0.0 0.0 0.0

CF from investing activities -1,543.6 -2,500.0 -1,500.0 -500.0

Issue/(Buy back) of Equity -1.9 0.0 0.0 0.0

Inc/(dec) in loan funds 1,469.5 981.5 1,137.2 -62.8

Dividend paid & dividend tax 0.0 0.0 0.0 0.0

Inc/(dec) in Sec. premium 0.0 0.0 0.0 0.0Others 0.0 0.0 0.0 0.0

CF from financing activities 1,467.6 981.5 1,137.2 -62.8

Net Cash flow -355.0 -732.7 506.4 113.2

Opening Cash 2,466.7 1,442.4 702.3 1,221.5

Closing Cash 1,442.4 702.3 1,221.5 1,334.7


Balance sheet

(| Crore)


Liabilities

Equity Capital 465.8 465.8 465.8 465.8

Reserve and Surplus 6,268.5 6,349.2 6,057.8 5,889.2

Total Shareholders funds 6,734.3 6,815.0 6,523.6 6,355.0

Total Debt 5,525.8 6,507.3 7,644.5 7,581.7

Long term Provisions 77.4 0.0 17.0 17.0

Other Long term liabilities 10.0 0.0 0.0 0.0

Total Liabilities 12,347.6 13,322.3 14,185.1 13,953.7

Assets

Gross Block 13,271.2 15,883.2 17,183.2 17,683.2

Less: Acc Depreciation 4,399.6 5,165.8 6,033.7 6,949.0

Net Block 8,871.6 10,717.4 11,149.4 10,734.2

Capital WIP 362.0 250.0 450.0 450.0

Total Fixed Assets 9,233.6 10,967.4 11,599.4 11,184.2Intangible assets 41.2 0.0 0.0 0.0

Non-current Investments 192.4 192.4 192.4 192.4

Long term loans & advances 1,705.0 1,671.1 1,675.3 1,675.3

Other non-current assets 5.0 0.0 0.0 0.0

Inventory 177.5 179.1 137.7 165.9

Debtors 785.9 835.9 826.1 995.6

Loans and Advances 190.4 238.8 206.5 248.9

Other Current Assets 175.9 298.5 206.5 248.9

Cash 1,442.4 702.3 1,221.5 1,334.7

Current investments 82.3 82.3 82.3 82.3

Total Current Assets 2,854.4 2,337.0 2,680.6 3,076.3

Creditors 603.8 716.5 826.1 995.6

Other liab & Provisions 1,080.2 1,129.1 1,136.5 1,178.9

Total Current Liabilities 1,684.0 1,845.6 1,962.6 2,174.5

Net Current Assets 1,170.4 491.4 718.0 901.8

Application of Funds 12,347.6 13,322.3 14,185.1 13,953.7 Source: Company, ICICIdirect.com Research

Key ratios


Per share data (|)

EPS -9.2 1.7 -6.3 -3.6Cash EPS 3.9 18.2 12.4 16.0

BV 144.6 146.3 140.1 136.4

DPS 0.0 0.0 0.0 0.0

Cash Per Share 31.0 15.1 26.2 0.0

Operating Ratios (%)

EBITDA Margin 0.6 10.0 11.5 12.5

PBT / Total Operating income -9.6 -7.7 -6.0 -2.7

PAT Margin -11.1 1.8 -5.7 -2.8

Inventory days 17.0 15.0 10.0 10.0

Debtor days 75.1 70.0 60.0 60.0

Creditor days 57.7 60.0 60.0 60.0

Return Ratios (%)

RoE -6.4 1.2 -4.5 -2.7

RoCE -4.7 -2.4 -2.0 -1.1

RoIC -4.0 0.6 -2.3 0.0

Valuation Ratios (x)

P/E - - - -

EV / EBITDA 272.4 18.1 14.9 11.2

EV / Net Sales 1.6 1.8 1.7 1.4

Market Cap / Sales 0.6 0.5 0.4 0.4

Price to Book Value 0.3 0.3 0.3 0.4

Solvency Ratios

Debt/EBITDA 236.4 14.6 13.1 9.9

Debt / Equity 0.8 1.0 1.2 1.2

Current Ratio 1.7 1.3 1.4 1.4

Quick Ratio 4.4 3.0 3.1 0.0


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Company Description

Shipping Corporation of India is the national maritime carrier with 79vessels. It manages a fleet of bulk carriers, liquid/dry bulk service,international container service and offshore supply vessels. Thecompanys fleet primarily transports crude oil.

Exhibit 15:Recommendation History

0

10

20

30

40

50

60

70

80

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

Price Target Price


Exhibit 16: Recent Releases

Date Event CMP Target Price Rating

21-Feb-12 Q3FY12 Result update 77 57 SELL

4-Apr-12 Q4FY12 Result preview 64 57 SELL

4-Jun-12 Q4FY12 Result update 50 44 SELL

5-Jul-12 Q1FY13 Result preview 59 44 SELL14-Aug-12 Q1FY13 Result update 54 46 SELL

8-Nov-12 Q2FY13 Result update 54 48 SELL

8-Jan-13 Q3FY13 Result Preview 59 48 SELL Source: Company, ICICIdirect.com Research

Exhibit 17: Assumptions

Assumptions

FY14E FY15E

Total days 27392 33578

Avg blended rates ($ per day) 34438 34532

Dollar Rupee Exchange rate 54 54


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ICICIdirect.com coverage universe (Shipping)

CMP (|) TP (|) Rating Mcap (| Cr) FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E

Aban Offshore 323 386 BUY 1,392.0 40.2 60.4 65.5 8.9 5.9 5.4 6.0 5.7 5.3 10.4 10.5 11.0 5.5 8.1 8.5

ABG Shipyard 368 349 HOLD 2,005.5 22.2 25.6 26.5 16.6 14.4 13.9 4.4 4.0 3.6 19.4 20.6 21.8 1 1.1 11.6 11.1

G.E Shipping 243 280 HOLD 3,739.2 35.1 38.6 44.6 7.1 6.4 5.6 4.8 3.5 2.3 4.6 5.5 5.9 8.0 8.2 8.8

Global Offshore 62 85 BUY 142.8 21.8 19.8 21.1 2.8 3.1 2.9 4.6 5.8 5.6 9.0 8.7 8.3 17.1 13.5 12.6

Mercator Ltd 18 20 HOLD 441.0 0.8 1.9 3.6 23.5 - 5.4 5.0 4.3 3.8 3.5 4.7 5.6 0.8 1.9 3.5Pipavav Defence 85 89 HOLD 5,944.3 0.3 0.6 1.5 260.8 150.3 5 4.3 19.1 1 5.8 13.6 8.5 9.0 1 0.0 1.1 1.8 4.7

SCI 50 48 HOLD 2,496.7 1.7 -6.3 -3.6 28.3 -7.8 -13.5 18.1 14.9 11.2 -2.4 -2.0 -1.1 1.2 -4.5 -2.7

RoCE (%) RoE (%)EPS (|) P/E (x) EV/EBITDA (x)


Global Valuation (Shipping)

CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E

Tankers

Frontline Ltd* Norway 2.0 2.0 1.9 118.7 - 23.1 NA NA NA 2.0 -1.3 5.9

Overseas Shipholding Group* USA 0.0 0.0 0.0 - - - 34.3 16.7 10.9 -12.9 -8.8 -2.8

Teekay Corp.* USA 1.7 1.8 2.0 - 206.1 30.1 12.6 11.5 10.5 -2.9 2.5 6.0

GE Shipping# India 0.6 0.6 0.6 8.1 11.9 7.1 6.1 5.6 4.8 7.8 5.3 8.0

SCI# India 0.3 0.3 0.3 4.0 - - 4.7 272.4 18.1 7.9 -6.4 1.2

Company Country

P/BV (x) P/E (x) EV/EBITDA (x) ROE (%)


Dry Bulk

Diana Shipping* USA 0.5 0.5 0.6 12.2 NA 64.7 5.7 11.3 8.1 4.7 -0.1 0.9

DryShips* USA 0.2 0.2 0.2 NA 18.8 2.0 12.2 7.7 4.8 -4.0 0.5 7.2

Genco Shipping* USA 0.1 0.2 0.2 NA NA NA 23.0 18.3 10.1 -11.7 -11.9 -6.8

Mercator Lines# India 0.2 0.2 0.2 23.5 10.1 5.5 5.0 4.3 3.8 0.8 2.0 3.5

Company Country

P/BV (x) P/E (x) EV/EBITDA (x) ROE (%)


Offshore

Diamond Offshore* USA 2.2 2.1 1.8 15.4 14.0 9.6 7.7 7.0 5.1 15.2 17.0 19.9

ENSCO* USA 1.2 1.1 1.0 11.5 8.7 7.5 8.9 7.0 6.4 10.6 14.1 13.3

Hercules Offshore* USA 1.1 1.1 1.0 - 20.6 13.1 11.0 5.0 4.6 -12.8 5.1 6.7

Transocean* USA 1.2 1.1 1.0 15.6 11.3 8.9 8.4 6.9 6.0 3.7 10.4 12.2

Aban Offshore# India 0.9 0.6 0.6 4.8 8.9 5.9 6.9 6.0 5.7 11.5 5.5 8.1

Global Offshore# India 0.6 0.5 0.4 6.2 2.8 3.1 7.1 4.6 5.8 9.0 17.1 13.5

Company CountryP/BV (x) P/E (x) EV/EBITDA (x) ROE (%)


*consensus

# With regards to Indian companies, three year data represents FY12, FY13 and FY14 (financial year ending in March)

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ICICI S iti Ltd R il E i R h

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 [email protected] Research Desk,ICICI Securities Limited,1st Floor, Akruti Trade Centre,Road No. 7, MIDC,Andheri (East)

Mumbai 400 093

[email protected]

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