November 17, 2015 ICICI Securities Ltd | Retail Equity Research Result Update Power segment boosts EBITDA growth… • Shree Cement’s Q2FY16 (September quarter) revenues increased 7.2% YoY to | 1,724.3 crore (above I-direct estimate of | 1,667.6 crore) mainly due to 7.6% YoY increase in cement revenues. Cement volumes increased 10% YoY led by capacity expansion. However, realisation declined 2.4% YoY due to pricing pressure in north. Power segment reported net revenue of | 197 crore (up 4.08% YoY led by 10% YoY rise in volumes while realisation declined 5.5% YoY) • Cement EBITDA/tonne declined 6.0% YoY to | 791/tonne led by higher other expenses/tonne (up 11.5% YoY due to DMF provision of | 34.38 crore). However, 1.8x YoY rise in power EBITDA to | 58 crore led to 3.7% YoY rise in blended EBITDA/tonne to | 930/tonne • Adjusted PAT increased 13.1% YoY to | 131 crore Healthy expansion plans to fuel future growth Shree Cement would continue to remain ahead of its peers in terms of capacity expansion and operating efficiency leading to better volume growth and higher profitability. Shree Cement has commissioned 2.0 MT grinding unit in Bulandshahr, Uttar Pradesh and aims to increase the Bihar grinding unit capacity from 2 MT to 3.6 MT over the next year, thereby taking its capacity to 27 MT. We think the management’s proactive approach in cost-saving initiatives and significant expansion plans will help it to join the large capacity league sooner than later. Best player in terms of cost efficiency in northern India Shree Cement is one of the low cost producers of cement in India with total cement capacity of 25.6 MT (as on October 2015). It has been operating at over ~90% capacity utilisation in the last couple of years with healthy operating margins vs. industry. Its cost efficiency emanates from high usage of alternate fuel (pet coke), logistic advantage and self sufficiency in power with capacity of 597 MW. Due to this, it enjoys high margins in the industry. For FY15, the company generated higher EBITDA/tonne of | 835/tonne vs. industry EBITDA/tonne of | 734/tonne mainly due to an advantage of low cost production and best regional mix. Comfortable D/E along with healthy operating cash flows While the debt-equity ratio was at 2.1x in FY07, at the end of FY15, it reduced to 0.3x and is expected to remain at this level in the coming years. Operating cash flow has also remained healthy for the company with FY15 operating cash flow of | 1,350 crore. With the lower D/E ratio and healthy operating cash flow, going forward, a further expansion will not create any balance sheet burden. Correction offers good entry point; upgrade to BUY… Despite near term concern, the long term prospect of the company remains positive. Given the upcoming new capacity, we expect profitability growth to remain healthy over the next two years. On the back of timely expansion, we expect volume CAGR of 13.3% in FY15-17E to 20.7 MT with healthy realisation growth. Further, a strong balance sheet and better efficiency in terms of cost remains a key positive for this company. Hence, we maintain our target price of |12,500 on the stock and upgrade the rating from HOLD to BUY [i.e. at 20x FY17E EV/EBITDA, $250/tonne on FY17E capacity (27 MT)]. Rating matrix Rating : Buy Target : | 12,500 Target Period : 9-12 months Potential Upside : 14% What’s Changed? Target Unchanged EPS FY17E Changed from | 286.0 to | 296.8 Rating Changed from Hold to Buy Quarterly Performance Q2FY16* Q2FY15 YoY (%) Q1FY16 QoQ (%) Revenue 1,724.3 1,608.1 7.2 1,724.6 0.0 EBITDA 389.3 340.4 23.0 356.8 9.1 EBITDA (%) 22.6 21.2 141 bps 20.7 189 bps PAT 131.0 115.8 13.1 127.4 2.9 * September quarter, change in financial year Key Financials | Crore FY14^ FY15^ FY16E* FY17E Net Sales 5887.3 6453.6 5545.4 8990.1 EBITDA 1389.8 1343.9 1379.6 2303.4 Adjusted PAT 865.0 464.1 524.1 1032.7 Adjusted EPS (|) 248.6 133.3 150.6 296.8 Valuation summary FY14^ FY15^ FY16E* FY17E PE (x) 48.3 89.2 72.8 36.8 Target PE (x) 50.3 93.7 83.0 42.1 EV to EBITDA (x) 28.0 29.0 28.2 16.9 EV/Tonne(US$)** 334 301 229 213 Price to book (x) 8.1 7.2 6.6 5.7 RoNW (%) 16.7 8.1 9.1 15.4 RoCE (%) 13.0 6.2 7.8 14.9 *9M period due to change in financial year, ^June year ending **adjusted for cement business Stock data Amount Mcap | 38009 crore Debt (FY15) | 1469 crore Cash & Invest (FY15) | 476 crore EV | 39001 crore 52 week H/L | 13,345 / 8,700 Equity cap | 34.8 crore Face value | 10 Particular Price performance (%) 1M 3M 6M 12M ACC -5.0 -3.5 -10.0 -12.3 Ambuja Cement -8.5 -14.2 -17.3 -15.6 Shree Cement -8.6 -0.5 -8.0 19.5 UltraTech Cement -7.4 -11.9 -2.5 4.6 Shree Cement (SHRCEM) | 10,992 Research Analyst Rashesh Shah [email protected]Devang Bhatt [email protected]
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7.2% YoY to | 1,724.3 crore (above I-direct estimate of | 1,667.6 crore) mainly due to 7.6% YoY increase in cement revenues. Cement volumes increased 10% YoY led by capacity expansion. However, realisation declined 2.4% YoY due to pricing pressure in north. Power segment reported net revenue of | 197 crore (up 4.08% YoY led by 10% YoY rise in volumes while realisation declined 5.5% YoY)
• Cement EBITDA/tonne declined 6.0% YoY to | 791/tonne led by higher other expenses/tonne (up 11.5% YoY due to DMF provision of | 34.38 crore). However, 1.8x YoY rise in power EBITDA to | 58 crore led to 3.7% YoY rise in blended EBITDA/tonne to | 930/tonne
• Adjusted PAT increased 13.1% YoY to | 131 crore
Healthy expansion plans to fuel future growth
Shree Cement would continue to remain ahead of its peers in terms of capacity expansion and operating efficiency leading to better volume growth and higher profitability. Shree Cement has commissioned 2.0 MT grinding unit in Bulandshahr, Uttar Pradesh and aims to increase the Bihar grinding unit capacity from 2 MT to 3.6 MT over the next year, thereby taking its capacity to 27 MT. We think the management’s proactive approach in cost-saving initiatives and significant expansion plans will help it to join the large capacity league sooner than later.
Best player in terms of cost efficiency in northern India
Shree Cement is one of the low cost producers of cement in India with total cement capacity of 25.6 MT (as on October 2015). It has been operating at over ~90% capacity utilisation in the last couple of years with healthy operating margins vs. industry. Its cost efficiency emanates from high usage of alternate fuel (pet coke), logistic advantage and self sufficiency in power with capacity of 597 MW. Due to this, it enjoys high margins in the industry. For FY15, the company generated higher EBITDA/tonne of | 835/tonne vs. industry EBITDA/tonne of | 734/tonne mainly due to an advantage of low cost production and best regional mix.
Comfortable D/E along with healthy operating cash flows
While the debt-equity ratio was at 2.1x in FY07, at the end of FY15, it reduced to 0.3x and is expected to remain at this level in the coming years. Operating cash flow has also remained healthy for the company with FY15 operating cash flow of | 1,350 crore. With the lower D/E ratio and healthy operating cash flow, going forward, a further expansion will not create any balance sheet burden.
Correction offers good entry point; upgrade to BUY…
Despite near term concern, the long term prospect of the company remains positive. Given the upcoming new capacity, we expect profitability growth to remain healthy over the next two years. On the back of timely expansion, we expect volume CAGR of 13.3% in FY15-17E to 20.7 MT with healthy realisation growth. Further, a strong balance sheet and better efficiency in terms of cost remains a key positive for this company. Hence, we maintain our target price of |12,500 on the stock and upgrade the rating from HOLD to BUY [i.e. at 20x FY17E EV/EBITDA, $250/tonne on FY17E capacity (27 MT)].
Total Operating Income 1724.3 1,667.6 1,608.1 7.2 1,724.6 0.0
Cement sales rose sharply by 7.6% YoY while power sales increased 4.1% YoY. The increase in cement revenues was due to 10.3% YoY increase in volumes. However, realisation witnessed a decline due to pricing pressure in the north
Other Income 23.0 47.0 28.1 -17.9 39.2 -41.3Raw Material Consumed 138.6 136.3 137.4 0.9 162.8 -14.8Stock Adjustment -9.8 0.0 -6.6 48.5 -38.9 -74.7Employee Expense 122.8 121.8 112.8 8.9 119.0 3.2Power, Oil & Fuel 375.4 411.9 413.5 -9.2 415.7 -9.7 Decline in pet coke prices led to lower power & fuel costFreight cost 346.8 383.8 317.0 9.4 401.1 -13.5Other Expenses 361.2 308.3 293.7 23.0 308.1 17.2 The increase in other expenses was due to DMF provision of | 34 croreEBITDA 389.3 305.4 340.4 14.3 356.8 9.1EBITDA Margin (%) 22.6 18.3 21.2 141 bps 20.7 189 bps Decline in power & fuel cost led to higher EBITDA marginInterest 23.2 37.6 35.0 -33.6 26.4 -11.9Depreciation 270.4 252.0 222.7 21.5 238.3 13.5PBT 116.6 62.8 104.1 11.9 107.4 8.5
Total Tax -12.2 11.6 -4.7 159.8 3.3 -469.6The company reported tax credit during the quarter led by deferred tax and MAT credit entitlement
PAT 131.0 51.2 115.8 13.1 127.4 2.9Lower interest cost (down 33.6% YoY) led to 13.1% YoY rise in net profit during the quarter
Key MetricsVolume (MT) 4.19 4.19 3.80 10.3 4.35 -3.8 Volume growth was led by capacity expansionRealisation/tonne (|) 3,646 3,545 3,736 -2.4 3,480 4.8 High competition in the north led to pricing decline during the quarter
Blended EBITDA per Tonne (| 930 728 897 3.7 819 13.5 The increase in blended EBITDA/tonne was led by improvement in power EBITDA
Source: Company, ICICIdirect.com Research Change in estimates
(| Crore) OLD New % Change Old New % Change Comments
Revenue NA 5,545.4 NA 8,848.7 8,990.1 1.6We expect revenues to improve in FY17E led by better realisation due to pick up in rural and government demand
EBITDA NA 1,379.6 NA 2,220.8 2,303.4 3.7
EBITDA Margin (%) NA 24.9 NA 25.1 25.6 52 bpsMargins are expected to improve led by stabilisation of new plant and lower power & fuel cost
Adjusted PAT NA 524.1 NA 995.2 1,032.7 3.8Adjusted EPS (|) NA 150.6 NA 286.0 296.8 3.8
FY16E* FY17E
Source: Company, ICICIdirect.com Research, *9M period due to change in financial year Assumptions
We broadly maintain our volume growth guidance taking into account timely commissioning of a new plant along with volume growth led by higher government spend on infrastructure
EBITDA per Tonne (|) 1,253 979 835 1,039 1,114 835 1,015 1,075We expect the company to report EBITDA/tonne of over | 1000/tonne by FY17E
EarlierCurrent
Source: Company, ICICIdirect.com Research, *9M period due to change in financial year
ICICI Securities Ltd | Retail Equity Research Page 3
Company Analysis Strong presence in northern region
The company is one of the major players in the northern region with a market share of ~20%. Rajasthan is the highest revenue generator state for the company followed by Haryana and Punjab. The company has a total capacity of 25.6 MTPA most of which is located in Rajasthan except capacity of 1.2 MTPA in Roorkee, Uttarakhand, 1.5 MTPA in Panipat, Haryana (acquisition completed on April 27, 2015), 2.6 MT in Chhattisgarh 2.0 MTPA in UP and 2.0 MTPA in Bihar. Shree Cement distributes cement under different brand names - Shree Ultra, Bangur and Rockstrong. In FY09-15, sales and PAT posted growth at a CAGR of 16% and 12%, respectively, while plants are operating at over 90% utilisation.
Power business: Not just another segment
The company is among the first companies in the cement industry to have entered the power business. Shree Cement has evolved from a mere captive power producer to a major merchant power player and is also a Category I power trading licensee. The company has increased its capacity from 560 MW in FY 12 to 597 MW in FY 15. The power business contributes more than 10% to total revenues of the company. Moreover, it is also one of the most efficient users of fuel in the industry. Captive capacity along with better efficiency results in lower P&F cost per tonne for the company. It is the first company in the world to utilise 100% pet-coke in all its operations for both cement and power plants.
Exhibit 1: Consumes lower fuel/tonne in cement industry
The company has commissioned its 2.0 MT grinding unit each in Ras, Rajasthan, and Aurangabad, Bihar. The company has also commissioned 2.5 MT integrated unit in Raipur, Chhattisgarh. Further Shree Cement has commissioned 2.0 MT grinding unit in Bulandshahr, Uttar Pradesh in October 2015 and aims to increase Bihar grinding unit capacity from 2 MT to 3.6 MT over next one year. Post these expansions, the capacity of the company will reach ~27.2 MTPA by FY17E i.e. over ~26.5% of capacity addition from FY15 levels.
Revenue share in northern region
Others (Delhi, Bihar,
J&K)14%
UP10%
Uttranchal17%
Punjab17%
Haryana20%
Rajasthan22%
ICICI Securities Ltd | Retail Equity Research Page 4
Comfortable D/E along with healthy operating cash flows
While the debt-equity ratio was at 2.1x in FY07, at the end of FY15, it has reduced to 0.3x and is expected to remain at this level in the coming years. Operating cash flow has also remained healthy for the company with FY15 operating cash flow of | 1,350 crore. With the lower D/E ratio and healthy operating cash flow, going forward, a further expansion will not create any balance sheet burden.
Source: Company, ICICIdirect.com Research, *9M period due to change in financial year
ICICI Securities Ltd | Retail Equity Research Page 5
Expect revenue CAGR of 18.0% during FY15-17E
Revenues have grown at a CAGR of ~16.4% during FY11-15 mainly led by robust growth in the power segment due to commissioning of the 300 MW power capacity at Beawar in FY12 while the cement segment’s revenue grew at a CAGR of 15.8% during the same period. Due to moderate growth in the power segment, we expect capacity expansion in cement to drive revenue CAGR of ~18.0% during FY15-17E. Shree Cement is venturing into the eastern region where cement prices have been higher than the northern region historically. This is expected to lead to an improvement in realisation for the company.
Exhibit 5: Expect expansion led revenue CAGR of 18.0% during FY15-17E
31965317 4571 5244 5752 4953
8261315
583 643 702593
730
1046
0
2000
4000
6000
8000
10000
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
(| C
rore
)
Cement Sales (| crore) Power Sales (| crore)
Source: Company, ICICIdirect.com Research,*9M period due to change in financial year
Exhibit 6: Capacity addition plans State Region MT
Current Capacity 23.6
Additions :
Bulandshahar UP North 2.0
Bihar North 1.6
Total by FY17E 27.2
Source: Company, ICICIdirect.com Research
Exhibit 7: Volume to grow at CAGR of 13.3% during FY15-17E
10.2
14.912.4
14.216.1
13.3
20.7
0.0
5.0
10.0
15.0
20.0
25.0
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
Cement Sales Volumes (In MT)
Source: Company, ICICIdirect.com Research,* 9M period due to change in financial year
Exhibit 8: Realisation to pick up from H2FY16 led by recovery in demand
31203579 3675 3696 3572 3732 3996
0
1000
2000
3000
4000
5000
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
-10
-5
0
5
10
15
20
Cement Realisation (|/tonne) -LS Growth (%) -RS
Source: Company, ICICIdirect.com Research
Exhibit 9: Merchant power sales growth to remain flat
942
2505 2610
1860 18851611
1920
0500
10001500200025003000
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
Power Sale volume (In lac units)
Source: Company, ICICIdirect.com Research, *9M period due to change in financial year
Exhibit 10: Realisation trend in merchant power segment
4.894.36 4.01
3.46 3.72 3.68 3.80
0
1
2
3
4
5
6
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
(|)
-30
-20
-10
0
10
20
Power Realisation (per unit) - LS Growth (%) -RS
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 6
Exhibit 11: Power volume increases 10.1% YoY in September 2015
417 409536 498 488 491
334
572 537
0
200
400
600
800
1000
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
Milli
on U
nits
Power Sales Volume
Source: Company, ICICIdirect.com Research
Exhibit 12: Power realisations decline 5.5% YoY in September 2015
3.85
3.38
3.31
3.36 3.
89
3.89
3.35 3.
65
3.68
0.74
0.57
0.24 0.43 0.60
0.36
1.11
1.08
-0.0
3
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
Power Realisation (|/unit) Power EBITDA (|/unit)
Source: Company, ICICIdirect.com Research
Exhibit 13: Cement volume grows 10.3% YoY in September 2015
3.20 3.443.84 3.72 3.80 3.81 4.14 4.35 4.19
0.0
1.0
2.0
3.0
4.0
5.0
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
Milli
on T
onne
s
-10
0
10
20
30
Sales volumes -LHS Growth (%) -RHS
Source: Company, ICICIdirect.com Research
Exhibit 14: Cement realisations decline 2.4% YoY in September 2015
3397 3434
38764009
3736
3551 3537 3480
3646
3050
3250
3450
3650
3850
4050
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
Cement Realisation (|/tonne) -LS
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 7
Margins to improve led by stabilisation in cost structure We expect operating margins to improve driven by an improvement in prices coupled with operating leverage benefits.
Exhibit 15: Expect EBITDA/tonne of |1040 in FY17E
754
1092 1050933
756908
1040
-100100300500700900
110013001500
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
Cement EBITDA/Tonne
Source: Company, ICICIdirect.com Research,*9M period due to change in financial year
Exhibit 16: Margins to remain healthy due to cost efficiencies
27.7 23.6 20.8 24.9 25.625.2 27.9
0
15
30
45
60
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
(%)
Total EBITDA Margin (%)
Source: Company, ICICIdirect.com Research
Exhibit 17: Quarterly trend in EBITDA
683 719
1089 1185
842 726 794673
791
0
400
800
1200
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
| pe
r ton
ne
Source: Company, ICICIdirect.com Research
Exhibit 18: Pick-up in margins expected, going forward
20.0 20.5
25.9 26.5
21.219.8
21.6 20.722.6
15
20
25
30
35
Sep-
13
Dec-
13
Mar
-14
Jun-
14
Sep-
14
Dec-
14
Mar
-15
Jun-
15
Sep-
15
(%)
Total EBITDA Margin
Source: Company, ICICIdirect.com Research
Expect net profit margin to stabilise at 11.5% in FY 17E
We expect net margins to stabilise at 11.5% due to heavy depreciation charges. Exhibit 19: Profitability trend
258
631
1005865
464 524
1033
0
200
400
600
800
1000
1200
FY11 FY12* FY13 FY14 FY15 FY16E* FY17E
| cr
ore
0.0
5.0
10.0
15.0
20.0
(%)
Net profit - LS Net profit margin -RS
Source: Company, ICICIdirect.com Research,* 9M period due to change in financial year
ICICI Securities Ltd | Retail Equity Research Page 8
Outlook and valuation Shree Cement would continue to remain ahead of its peers in terms of capacity expansion and operating efficiency leading to better volume growth and higher profitability. We think the management’s proactive approach to cost-saving initiatives and significant expansion plans will help it join the large capacity league sooner rather than later. Despite near term concern, the long term prospects of the company remain positive. Given the upcoming new capacity, we expect profitability growth to remain healthy over the next two years. On the back of timely expansion, we expect volume CAGR of 13.3% in FY15-17E to 20.7 MT with healthy realisation growth. Further, a strong balance sheet and better efficiency in terms of cost remains a key positive for this company. Hence, we maintain our target price of |12,500 on the stock and upgrade the rating from HOLD to BUY [i.e. at 20x FY17E EV/EBITDA, $250/tonne on FY17E capacity (27 MT)]. Exhibit 20: Key assumptions | per tonne FY12^ FY13^ FY14^ FY15^ FY16E* FY17E
Source: Company, ICICIdirect.com Research,* 9M period due to change in financial year
ICICI Securities Ltd | Retail Equity Research Page 10
Company snapshot
Target Price: | 12,500
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Source: Bloomberg, Company, ICICIdirect.com Research Key events Date EventFeb-09 Government announces excise duty cut of 2% to boost cement sales
Mar-09 Company completes its 1 MTPA clinkerisation unit (unit-VII) at Bangur city and starts trial production May-10 Reports surprise net loss of | 71.3 crore due to change in depreciation policyMay-12 CCI completes probe into alleged cartilsation by 39 cement companies and finds these companies including Shree Cement guilty of forming cartelisationJun-12 CCI imposes | 397 crore penalty on Shree Cement for indulging in restrictive trade practicesJul-13 Supreme Court directs six cement firms (including Shree Cement) to pay 24% interest on royalty due between 1992 and 1996 to Rajasthan state government
Jul-13 Recommends dividend of | 12/share for June year ending FY13Aug-14 To acquire 1.5 MTPA cement grinding unit of Jaiprakash Associates situated at Panipat, Haryana for consideration of | 360 croreOct-14 The company commissions 2.0 MT grinding unit each in Ras, Rajasthan and Aurangabad, BiharApr-15 The company completes accquisition 1.5 MTPA cement grinding unit of Jaiprakash Associates
May-15 The company commissions clinker manufacturing unit of 1.50 MT capacity at Baloda Bazar near Raipur in ChhattisgarhOct-15 Commissions 2.0 MT capacity at Bulandshahr in Uttar Pradesh
ICICI Securities Ltd | Retail Equity Research Page 13
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;
ICICI Securities Ltd | Retail Equity Research Page 14
ANALYST CERTIFICATION We /I, Rashesh Shah, CA, and Devang Bhatt, PGDBM 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 (ICICI Securities) is a Sebi registered Research Analyst having registration no. INH000000990.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. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com. ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. 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