Motilal-Cement.pdf

October 2014 0

Demand recovery continues (sans south) South region to see strong price recovery in 2QFY15

Demand to grow ~6.3% YoY for MOSL universe; new capacity impacts utilization Recovery in cement demand continued in 2QFY15, though with QoQ moderation due to weaker August and September. Taking a cue from the strong IIP data on cement production (10.9% YoY growth YTD (until August 2014)), we expect demand for MOSL Cement universe to grow at 6.3% YoY (decline 8.5% QoQ) in 2QFY15. Our interaction with dealers across regions indicates continued to struggle for demand growth in the South, with likely revival from January 2015 (post monsoon season in TN). Commencement of few capacities in the North and the East (Shree Cement and JK Cement) resulted in capacity utilization declining to 68% (-7pp QoQ, -1pp YoY).

Blended realization up marginally QoQ, led by South and West Cement prices exited 1QFY15 with an increasing trend, which continued till July 2014 due to delay in the monsoon. In August and September, there was gradual moderation, before some price hike announcement in the second half of September. Overall, we estimate the national average price to be higher by INR2/bag QoQ (INR18/bag YoY). South-based players should witness maximum realization benefits, with ~INR16/bag QoQ improvement as per our calculation, followed by West-based players (especially Maharashtra). We estimate a moderation of INR20/bag in the North and East. We factor in INR13.5/INR20/INR20 per bag increase in realizations in FY15/FY16/FY17 after ~INR5/bag decline in FY14.

Flattish realizations, negative operating leverage dent profitability Profitability is likely to decline INR110/ton QoQ (increase INR166/ton YoY) to INR665/ton due to flattish realizations and negative operating leverage. Barring freight, other commodity price trends highlight no inflationary pressure on variable costs. While players focused on the South market will benefit significantly from sharp pricing recovery, North and East based players will see impact on profitability due to weak pricing. We estimate EBITDA/ton at INR795/1,069/INR1,338 for FY15/FY16/FY17, up from ~INR674/ton in FY14.

Expected quarterly performance summary (INR Million) Sector CMP

Sales (INR m)

EBDITA (INR m)

Net Profit (INR m)

(INR)

30.9.14 Reco.

Sep-14

Var % YoY

Var % QoQ

Sep-14 Var %

YoY Var %

QoQ Sep-14

Var % YoY

Var % QoQ

ACC 1,404 Buy

26,792 6.8 -11.0

2,609 15.8 -34.8

1,641 35.8 -31.9 Ambuja Cements 214 Neutral

23,143 15.4 -14.5

3,685 44.3 -35.8

2,334 73.3 -42.9

Birla Corporation 474 Buy

8,106 14.1 -5.7

745 27.3 -41.9

425 2.2 -57.3 Grasim Industries 3,550 Buy

15,634 11.2 9.8

1,493 -42.8 18.8

2,301 -41.9 117.4

India Cements 112 Neutral

11,219 3.3 -8.5

1,827 43.2 15.8

236 LP LP Jaiprakash Associates 27 Buy

35,234 10.9 17.7

9,420 19.2 24.8

435 -48.8 LP

Shree Cement 8,408 Buy

15,585 24.9 -5.6

3,388 35.8 -21.8

1,610 -7.1 -37.0 Ultratech Cement 2,625 Buy

51,878 15.2 -8.2

8,214 24.5 -18.5

3,160 19.6 -49.5

Cement Sector Aggregate

187,591 12.7 -3.9

31,381 19.4 -12.4

12,142 1.8 -26.6

Source: Company, MOSL

Jinesh Gandhi ([email protected]) / Sandipan Pal ([email protected])

Company name

ACC

Ambuja Cements

Birla Corporation

Grasim Industries

India Cements

Jaiprakash Associates

Shree Cement

Ultratech Cement

Cement

September 2014 Results Preview | October 2014

Investors are advised to refer through disclosures made at the end of the Research Report.

October 2014 1

Valuation and view Our FY15/16 large cap EPS has seen marginal to moderate upgrades due to lower than expected monsoon season price decline. Demand recovery has been faster than expected in 1HFY15. This coupled with slowing capacity addition and higher capex and opex cost would support cement prices and profitability, going forward. Sustained recovery in demand would act as a catalyst for stock performance. Any government intervention in cement pricing poses a threat to our positive view. Among large caps, we prefer ACC, and UltraTech, whereas in mid-caps we prefer Dalmia Bharat, JK Cement, and JK Lakshmi Cement.

Cement demand recovery apparent in 1HFY15 (%)

-5

0

5

10

15

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

2QFY

15

IIP Data MOSL Universe


MOSL cement universe volumes to grow 7% YoY (-8.5% QoQ)

6.4

3.6 4.3

4.0

9.4 10

.4 13.

8

8.4

2.7

1.9

-2.0 0

.4

3.3

1.5

6.1 9

.1

6.3

-2

3

8

13

18

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

2QFY

15

Volumes (MT) - RHS Volume growth (%)


Utilizations down QoQ with new capacity commencement

60%

70%

80%

90%

100%

1QFY

102Q

FY10

3QFY

104Q

FY10

1QFY

112Q

FY11

3QFY

114Q

FY11

1QFY

122Q

FY12

3QFY

124Q

FY12

1QFY

132Q

FY13

3QFY

134Q

FY13

1QFY

142Q

FY14

3QFY

144Q

FY14

1QFY

152Q

FY15


Trend in average quarterly cement price (INR/bag)

245 3

07

272 29

4

264

277

245

308

271

300

266 27

9

269

328

281

281 29

3

289

272

324

286

290 29

7

293

261

314

297 30

6

292

295

North East West South Central National Average

2QFY14 3QFY14 4QFY14 1QFY15 2QFY15


Blended realization trend

3,26

2

3,47

8

3,87

9

4,03

8

3,83

5

4,13

2

4,20

7

4,46

6

4,49

9

4,33

1

4,28

3

4,29

8

4,16

4

4,23

5

4,30

7

4,43

7

4,47

6

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

2QFY

15

Realization (INR/ton)


Weaker realizations, cost push and weak operating leverage to dent profitability

400

605 9

24 1,01

9

613 81

2 956

1,09

2

946

764

780

805

499

574 73

0

775

665

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

2QFY

15

EBITDA (INR/ton)


September 2014 Results Preview | Sector: Cement

October 2014 2

Revised EPS estimates (INR) FY15E/CY14E FY16E/CY15E Rev Old Chg (%) Rev Old Chg (%) ACC 51.7 49.4 4.6 81.6 79.3 3.0 Ambuja Cement 7.1 6.9 1.9 9.7 9.6 1.4 UltraTech 89.8 79.1 13.4 132.4 120.9 9.5 Birla Corp 40.5 38.9 4.2 60.0 58.3 2.9 India Cement 1.8 3.3 -47.0 10.7 11.5 -7.0 Shree Cement 274.7 278.0 -1.2 443.7 422.8 4.9 JK lakshmi 17.3 14.3 20.3 24.4 21.3 14.7 Ramco Cement 8.0 8.8 -9.0 15.3 15.7 -2.3 JK Cement 20.1 20.6 -2.2 47.0 47.6 -1.3 Orient Cement 7.5 7.5 0.0 6.7 6.7 0.0 Prism Cement 0.4 1.0 -56.6 5.7 6.9 -18.2 Dalmia Cement 0.6 0.6 0.0 13.4 13.4 0.0

* Profit to Loss Source: MOSL

Trend in key financial parameters (INR m) Net Sales EBITDA Margin (%) Net Profit 2QFY15 YoY (%) QoQ (%) 2QFY15 YoY (BP) QoQ (BP) 2QFY15 YoY (%) QoQ (%) ACC 26,792 6.8 -11.0 9.7 80 -360 1,641 35.8 -31.9 Ambuja Cement 23,143 15.4 -14.5 15.9 320 -530 2,334 73.3 -42.9 UltraTech 51,878 15.2 -8.2 15.8 120 -200 3,160 19.6 -49.5 Birla Corp 8,106 14.1 -5.7 9.2 100 -570 425 2.2 -57.3 India Cement 11,219 3.3 -8.5 16.3 450 340 236 -204.8 -897.7 Shree Cement 15,585 24.9 -5.6 21.7 170 -450 1,610 -7.1 -37.0 Dalmia Bharat 8,125 14.1 19.4 13.2 290 750 125 -147.9 -145.8 J K Cements 7,431 19.0 -7.3 10.6 450 -170 60 -127.8 -84.3 JK Lakshmi Cem. 5,596 24.7 -6.8 15.1 260 -380 312 203.2 -42.1 Madras Cement 9,788 8.2 5.9 14.0 -120 40 586 220.8 61.6 Orient Paper 3,494 8.8 -8.1 15.5 470 -140 289 100.1 -17.1 Prism Cement 13,557 17.7 -2.0 2.5 480 -560 -378 -67.2 -385.5

Sector Aggregate 184,715 13.9 -7.1 13.8 210 -260 10,400 75.6 -41.5


Trend in key operating parameters Volume (m ton) Realization (INR/ton) EBITDA (INR/ton) 2QFY15 YoY (%) QoQ (%) 2QFY15 YoY (INR) QoQ (INR) 2QFY15 YoY (INR) QoQ (INR) ACC 5.7 3.0 -10.1 4,397 162 -40 444 47 -168 Ambuja Cement 5.1 5.0 -12.2 4,511 408 -120 718 196 -264 UltraTech 10.2 11.0 -12.4 4,988 185 214 790 86 -62 Birla Corp 2.0 8.0 -2.7 3,788 247 -200 488 143 -270 India Cement 2.3 -5.0 -9.4 4,544 429 300 788 265 171 Dalmia Bharat 1.7 5.0 9.6 4,694 469 300 623 178 374 J K Cements 1.6 9.4 -7.8 4,645 376 29 492 232 -75 JK Lakshmi Cem. 1.4 8.0 -3.3 4,020 537 -150 608 172 -180 Madras Cement 2.1 -5.0 -2.1 4,701 622 300 787 403 268 Orient Paper 1.0 0.5 -11.9 3,678 279 150 569 201 -26 Prism Cement 1.3 10.0 -16.3 3,749 12 -150 104 347 -550

Sector Aggregate 38.2 6.3 -8.5 4,476 313 40 665 166 -110



October 2014 3

Realtive Performance - 3m (%)

Source: Bloomberg, MOSL

Realtive Performance 1 year (%)

Source: Bloomberg, MOSL

Comparative Valuation Sector / Companies CMP Reco. EPS (INR) PE (x) PB (x) RoE (%)

(INR) FY15E FY16E FY17E

FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E Cement

ACC 1,404 Buy 51.7 81.6 122.9

27.2 17.2 11.4 3.3 3.0 2.6 12.2 18.2 24.6 Ambuja Cements 214 Neutral 7.1 9.7 13.1

30.3 22.0 16.4 2.3 2.2 2.0 10.0 10.2 12.9

Birla Corporation 474 Buy 40.5 60.0 79.4

11.7 7.9 6.0 1.3 1.2 1.0 11.3 14.8 16.7 Grasim Industries 3,550 Buy 258.0 374.5 513.9

13.8 9.5 6.9 1.4 1.2 1.0 10.0 12.8 15.0

India Cements 112 Neutral 1.8 10.7 19.0

63.6 10.5 5.9 0.9 0.9 0.8 1.0 7.4 12.5 Jaiprakash Associates 27 Buy 1.3 3.9 5.2

20.3 6.7 5.1 0.4 0.4 0.4 2.1 6.1 7.7

Shree Cement 8,408 Buy 274.7 443.7 661.3

30.6 19.0 12.7 5.3 4.2 3.2 18.6 24.6 28.5 Ultratech Cement 2,625 Buy 89.8 132.4 193.2

29.2 19.8 13.6 3.7 3.2 2.6 13.6 17.4 21.3

Dalmia Bharat 430 Buy 0.6 13.4 61.9

717.4 32.1 6.9 1.1 1.1 1.0 0.2 3.5 14.8 J K Cements 558 Buy 20.1 47.0 80.1

27.7 11.9 7.0 2.1 1.9 1.5 7.8 16.5 23.7

JK Lakshmi Cem. 357 Buy 17.3 24.4 42.5

20.7 14.6 8.4 2.9 2.5 2.0 14.9 18.7 26.7 Ramco Cements 320 Buy 8.0 15.3 24.1

40.0 20.9 13.2 2.9 2.6 2.2 7.5 13.2 18.2

Prism Cement 73 Buy 0.4 5.7 10.7

175.7 12.9 6.8 3.6 2.9 2.0 2.1 24.7 35.1 Sector Aggregate

25.5 15.8 10.7

2.3 2.1 1.8

9.0 13.1 16.8


90

95

100

105

110

Jun-14 Jul-14 Aug-14 Sep-14

Sensex Index MOSL Cement Index

90

105

120

135

150

Sep-13 Dec-13 Mar-14 Jun-14 Sep-14

Sensex Index MOSL Cement Index

October 2014 4

Quarterly Performance (Standalone) (INR Million) Y/E December CY13 CY14 CY13 CY14E

1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE

Cement Sales (m ton) 6.42 6.12 5.54 5.85 6.48 6.35 5.71 6.35 23.9 24.89 YoY Change (%) -4.5 1.2 2.6 -1.5 0.9 3.8 3.0 8.6 -0.7 4.0 Cement Realization 4,269 4,290 4,235 4,307 4,304 4,437 4,397 4,591 4,278 4,433 YoY Change (%) 0.9 -5.9 -5.9 3.4 0.8 3.4 3.8 6.6 -1.8 3.6

QoQ Change (%) 2.5 0.5 -1.3 1.7 -0.1 3.1 -0.9 4.4 0.0 0.0 Net Sales 29,111 27,904 25,087 26,934 29,671 30,090 26,792 30,890 109,084 117,444 YoY Change (%) 2.4 1.2 3.2 -13.1 1.9 7.8 6.8 14.7 -2.0 7.7 EBITDA 4,468 4,335 2,254 2,626 3,653 4,000 2,609 3,737 13,683 13,999 Margins (%) 15.3 15.5 9.0 9.8 12.3 13.3 9.7 12.1 12.5 11.9 Depreciation 1,383 1,387 1,444 1,526 1,366 1,377 1,390 1,450 5,740 5,582 Interest 108 179 110 120 108 111 108 103 517 430 Other Income 1,205 908 1,023 1,438 1,668 876 1,200 1,506 4,573 5,250 PBT before EO Item 4,182 3,677 1,722 2,419 3,848 3,388 2,311 3,690 12,000 13,237 PBT after EO Item 5,861 3,677 1,722 3,178 4,975 3,388 2,311 3,690 14,437 14,364 Tax 1,484 1,086 514 396 988 978 670 1,189 3,479 3,825 Rate (%) 25.3 29.5 29.8 12.5 19.9 28.9 29.0 32.2 24.1 26.6 Reported PAT 4,377 2,591 1,208 2,781 3,987 2,410 1,641 2,501 10,958 10,540 Adjusted PAT 3,124 2,591 1,208 2,117 3,084 2,410 1,641 2,501 9,108 9,712 Margins (%) 10.7 9.3 4.8 7.9 10.4 8.0 6.1 8.1 8.3 8.3 YoY Change (%) -19.1 -38.0 -51.4 -11.5 -1.3 -7.0 35.8 18.1 -29.5 6.6 E: MOSL Estimates


ACC

CMP: INR1,404 Buy Dispatches in 3QCY14 are likely to grow 3% YoY (decline 1% QoQ) to

5.71m tons. Average realization would grow 3.8% YoY (decline 0.9% QoQ) to INR4,397/ton. QoQ improvement in South and West India would be negated by declines in North, Central, and East India.

Revenue is likely to grow 6.8% YoY (decline 11% QoQ) to INR26.8b. We estimate EBITDA margin at 9.7%, up 0.7pp YoY (down 3.6pp QoQ); the QoQ contraction would be due to QoQ decline in realization and cost push led by negative operating leverage.

We estimate cement EBITDA/ton at INR444 (up INR47 YoY; down INR168 QoQ). PAT would grow 6.1% YoY (decline 32% QoQ) to INR1.6b.

We are raising our CY14/15 EPS estimates (ex synergies) by 3-4% to factor in for moderately lower price decline assumptions to INR51.7 and INR81.6, respectively.

The stock trades at 17.6x CY15E EPS, and at an EV of 10.3x CY15E EBITDA and USD121/ton. Maintain Buy, with a target price of INR1,718 (CY15E EV of USD150/ton).

Key issues to watch for Volume growth recovery and outlook Cement pricing outlook and sustainability Progress in ongoing capex for Jamul expansion (5m tons) Update on synergies and other guided cost saving measures

Bloomberg ACC IN

Equity Shares (m) 187.9

M. Cap. (INR b)/(USD b) 264/4

52-Week Range (INR) 1,570/971

1,6,12 Rel Perf. (%) -6/ -18/-11

Financial Snapshot (INR Billion)

Y/E Dec 2013 2014E 2015E 2016E

Sales 109.1 117.4 138.1 164.2 EBITDA 13.7 14.0 23.0 34.0 NP 9.1 9.7 15.3 23.1

Adj.EPS (INR) 48.6 51.7 81.6 122.9 EPS Gr. (%) -29.3 6.4 58.0 50.6 BV/Sh (INR) 416.4 431.8 465.2 533.9

RoE (%) 12.0 12.2 18.2 24.6 RoCE (%) 15.3 15.9 24.0 32.3 Payout (%) 60.2 72.5 59.0 44.1

Valuations P/E (x) 29.7 27.9 17.6 11.7 P/BV (x) 3.5 3.3 3.1 2.7 EV/EBITDA

17.3 16.1 10.3 6.5

EV/Ton(USD) 124.9 119.2 121.2 112.2

October 2014 5

Quarterly Performance (INR Million) Y/E December CY13 CY14 CY13 CY14E 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE Sales Volume (m ton)* 5.96 5.46 4.89 5.29 6.06 5.84 5.13 5.75 21.60 22.79

YoY Change (%) -3.6 -3.1 2.0 -1.8 1.7 7.1 5.0 8.7 -1.8 5.5 Realization (INR/ton) 4,271 4,297 4,103 4,142 4,352 4,631 4,511 4,710 4,207 4,550

YoY Change (%) 0.3 -5.7 -9.2 -3.5 1.9 7.8 9.9 13.7 -4.4 8.2 QoQ Change (%) -0.5 0.6 -4.5 0.9 5.1 6.4 -2.6 4.4 0.0 0.0

Net Sales 25,448 23,457 20,049 21,913 26,378 27,064 23,143 27,098 90,868 103,682 YoY Change (%) -3.3 -8.6 -7.4 -5.3 3.7 15.4 15.4 23.7 46.1 46.5

EBITDA 5,118 4,920 2,554 2,890 5,757 5,741 3,685 5,027 15,482 20,210 Margins (%) 20.1 21.0 12.7 13.2 21.8 21.2 15.9 18.6 17.0 19.5

Depreciation 1,204 1,223 1,246 1,228 1,197 1,242 1,275 1,308 4,901 5,022 Interest 132 171 178 169 161 203 200 188 651 752 Other Income 1,339 1,051 940 1,019 1,434 1,518 1,100 1,198 4,349 5,250 PBT before EO Item 5,121 4,578 2,070 2,512 5,832 5,815 3,310 4,729 14,280 19,686 Extraordinary Inc/(Exp) 1,741 0 481 1,046 948 0 0 0 3,269 948 PBT after EO Exp/(Inc) 6,862 4,578 2,551 3,558 6,780 5,815 3,310 4,729 17,549 20,633 Tax 1,983 1,336 891 393 1,579 1,728 977 1,423 4,603 5,707

Rate (%) 28.9 29.2 34.9 11.0 23.3 29.7 29.5 30.1 26.2 27.7 Reported Profit 4,879 3,242 1,660 3,165 5,200 4,087 2,334 3,306 12,946 14,927 Adj PAT 3,641 3,242 1,346 2,234 4,473 4,087 2,334 3,306 10,464 13,979

YoY Change (%) -28.3 -30.9 -60.1 -2.8 22.9 26.1 73.3 47.9 -32.2 33.6 E: MOSL Estimates


Ambuja Cements

CMP: INR214 Neutral We expect 3QCY14 dispatches to grow 5% YoY (decline 12% QoQ) to

5.13m tons. Average realizations are likely to grow 9.9% YoY (decline 2.6% QoQ) to INR4,511/ton. We estimate revenue at INR23.1b (up 15.4% YoY; down 14% QoQ).

EBITDA margin is likely to expand 3.2pp YoY (shrink 5.3pp QoQ) to 15.9%. We estimate EBITDA/ton at ~INR718 (up INR196/ton YoY; down INR264/ton QoQ).

Adjusted PAT is likely to grow 73.3% YoY (decline 43% QoQ) to INR2.3b.

We are raising our CY14/CY15 EPS estimates (ex synergies) by 1-2% to factor in for marginally higher realizations.

Maintain Neutral, with a target price of INR238 (CY15E EV of USD160/ton).

Key issues to watch for Volume growth recovery and outlook Cement pricing outlook and sustainability Progress in ongoing mining land acquisition and capex in Nagaur

(Rajasthan) plant of 4.5m tons

Bloomberg ACEM IN

Equity Shares (m) 1,979.3


52-Week Range (INR) 244/151

1,6,12 Rel Perf. (%) 4/ -13/-21


Y/E Dec 2013 2014E 2015E 2016E

Sales 90.9 103.7 121.8 142.2 EBITDA 15.5 20.2 28.1 36.9 NP 10.5 14.0 19.2 25.9

Adj.EPS (INR) 6.8 7.1 9.7 13.1 EPS Gr. (%) -32.4 4.3 37.2 34.8 BV/Sh. (INR) 61.8 92.8 97.5 105.0

RoE (%) 11.4 10.0 10.2 12.9 RoCE (%) 16.1 14.6 15.0 18.8 Payout (%) 49.9 63.9 51.9 42.7


18.3 13.8 9.7 7.2

EV/Ton(USD) 159.8 153.0 149.2 140.8

October 2014 6

Quarterly Performance (INR Million) Y/E March FY14

FY15 FY14 FY15 1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE

Cement Sales (m ton) 1.84 1.85 1.81 1.91 2.06 2.00 1.99 2.10 7.41 8.15 YoY Change (%) 13.0 17.3 16.5 11.6 11.7 8.0 10.0 10.3 14.5 10.0 Cement Realization 3,924 3,541 3,579 3,753 3,988 3,788 3,888 4,146 3,700 3,955 YoY Change (%) -2.4 -10.0 -5.4 4.8 1.6 7.0 8.6 10.5 -3.3 6.9

QoQ Change (%) 9.6 -9.8 1.1 4.8 6.3 -5.0 2.6 6.6 0.0 0.0 Net Sales 7,720 7,107 7,098 7,780 8,593 8,106 8,261 9,383 29,705 34,344 YoY Change (%) 17.3 13.3 15.9 16.9 11.3 14.1 16.4 20.6 15.9 15.6 EBITDA 668 585 299 555 1,283 745 954 1,441 2,107 4,423 Margins (%) 8.7 8.2 4.2 7.1 14.9 9.2 11.5 15.4 7.1 12.9 Depreciation 302 311 319 393 391 395 395 395 1,326 1,576 Interest 207 249 202 198 192 205 215 213 856 826 Other Income 367 422 323 485 576 400 350 654 1,598 1,980 Profit before Tax 525 448 101 448 1,276 545 694 1,487 1,523 4,001 Tax 66 32 -59 186 281 120 153 327 225 880 Rate (%) 12.5 7.1 -58.0 41.6 22.0 22.0 22.0 22.0 14.8 22.0 Reported PAT 460 416 160 262 995 425 541 1,160 1,298 3,121 EO Income/(Expense) 0 0 0 -109 0 0 0 0 -109 0 PAT 460 416 160 326 995 425 541 1,160 1,391 3,121 Margins (%) 6.0 5.9 2.3 4.2 11.6 5.2 6.5 12.4 4.7 9.1 YoY Change (%) -45.7 -48.2 -50.4 -55.1 116.4 2.2 238.3 255.9 -48.5 124.4 E: MOSL Estimates


Birla Corporation

CMP: INR474 Buy We expect 2QFY15 volumes to grow 8% YoY (decline 2.7% QoQ) to

2m tons. Average realizations are likely to decline 5% QoQ (increase 7% QoQ) to INR3,788/ton.

EBITDA margin is likely to expand 1pp YoY (shrink 5.7pp QoQ) to 9.2%. EBITDA/ton (including non-cement business) would increase by INR56/ton YoY (decline by ~INR252/ton QoQ) to INR372/ton.

Despite overall improvement in cost efficiencies in Rajasthan plant, lower realizations and negative operating leverage would hurt profitability. PAT is likely to grow 2.2% YoY to INR425m.

We are raising our EPS estimates by 3-4% to factor in lower total cost. The stock trades at 7.9x FY16E EPS, and at an EV of 3.6x FY16E EBITDA and USD43/ton. Maintain Buy with target price of INR666 (FY16E EV of USD70/ton).

Key issues to watch for Volume growth recovery and outlook Cement pricing outlook and sustainability Timeline over clarity on Rajasthan mining permission New expansion plan

Bloomberg BCORP IN




1,6,12 Rel Perf. (%) -13/ 45/95


Y/E March 2014 2015E 2016E 2017E

Sales 29.7 34.3 39.7 44.0 EBITDA 2.1 4.4 6.8 9.3 NP 1.3 3.1 4.6 6.1

Adj.EPS (INR) 16.9 40.5 60.0 79.4 EPS Gr. (%) -51.9 140.5 48.1 32.3 BV/Sh. (INR) 328.0 358.1 406.5 474.3

RoE (%) 5.1 11.3 14.8 16.7 RoCE (%) 6.1 11.7 15.5 19.0 Payout (%) 55.5 25.8 19.4 14.6


13.5 6.1 3.6 2.1

EV/Ton(USD) 49.5 46.8 42.9 34.4

October 2014 7

Quarterly Performance (INR Million) Y/E March FY14 FY15 FY14 FY15

(Standalone) 1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE VSF Volume (ton) 77,518 93,025 97,049 99,385 86,389 100,002 106,754 110,530 366,977 403,675 YoY Change (%) 0.7 9.0 23.5 4.4 11.4 7.5 10.0 11.2 9.2 10.0 VSF Realization (INR/ton) 116,501 121,590 121,590 119,150 119,000 119,000 120,500 121,584 119,854 120,104 YoY Change (%) -9.0 -4.0 -0.1 0.0 2.1 -2.1 -0.9 2.0 -3.1 0.2 QoQ Change (%) -2.2 4.4 0.0 -2.0 -0.1 0.0 1.3 0.9 Net Sales 11,489 14,055 14,558 15,284 14,236 15,634 16,667 17,121 55,386 63,658 YoY Change (%) -7.3 4.5 19.8 11.0 23.9 11.2 14.5 12.0 6.9 14.9 EBITDA 2,025 2,613 1,945 1,382 1,257 1,493 1,815 1,817 7,964 6,381 Margins (%) 17.6 18.6 13.4 9.0 8.8 9.6 10.9 10.6 14.4 10.0 Depreciation 484 530 547 635 529 680 700 702 2,196 2,611 Interest 78 95 134 109 56 75 80 82 415 293 Other Income 958 2,213 492 835 703 2,250 750 1,047 4,497 4,750 PBT before EO Items 2,420 4,201 1,757 1,472 1,374 2,988 1,785 2,080 9,850 8,227 Extraordinary Inc/(Exp) 8 184 27 72 0 0 0 0 291 0 PBT after EO Items 2,429 4,385 1,783 1,544 1,374 2,988 1,785 2,080 10,141 8,227 Tax 167 250 522 242 316 687 410 479 1,181 1,892 Rate (%) 6.9 5.7 29.3 15.7 23.0 23.0 23.0 23.0 11.6 23.0 Reported PAT 2,261 4,135 1,261 1,303 1,058 2,301 1,374 1,601 8,960 6,335 Adj. PAT 2,254 3,962 1,242 1,242 1,058 2,301 1,374 1,601 8,703 6,335 YoY Change (%) -17.4 3.5 -37.3 -41.7 -53.0 -41.9 10.7 29.0 -18.1 -27.2 E: MOSL Estimates

-0.3252

0.016097


Grasim Industries

CMP: INR3,550 Buy We expect Vilayat expansion to drive VSF volume growth of 7.5% YoY

(16% QoQ) to 100,002 tons. VSF realizations would decline 2% YoY (remain flat QoQ) to INR119/kg.

We assume cement price/kg at INR120/124 for FY15/16. We expect standalone EBITDA margin to decline 9pp YoY (expand 0.8pp QoQ) to 9.6%; QoQ expansion would be led by moderating pulp prices.

EBITDA is likely to decline 43% YoY (grow 19% QoQ) to INR1.5b, translating into PAT of INR2.3b de-growth of 42% YoY.

The stock trades at 10.1x FY16E consolidated EPS, and at an EV of 5.9x FY16E EBITDA and USD109/ton. Maintain Buy, with a target price of INR4,729 (FY16E SOTP).

Key issues to watch for Outlook on VSF business and strategy to utilize upcoming

capacities globally Outlook on cement demand and pricing, and status of capacity

addition

Bloomberg GRASIM IN



52-Week Range (INR) 3,755/2,432

1,6,12 Rel Perf. (%) 4/ 4/-4


Y/E March 2014 2015E 2016E 2017E

Sales 290.0 337.8 403.1 470.4 EBITDA 45.9 54.3 78.8 102.2 Adj. PAT 27.6 29.5 45.3 59.9 Adj. EPS

215.1 240.4 350.7 421.6

EPS Gr. (%) -26.1 11.7 45.9 20.2 BV/Sh. (INR) 2,353 2,569 2,894 3,291

RoE (%) 9.1 9.4 12.1 12.8 RoCE (%) 12.9 13.2 17.8 22.1 Payout (%) 10.1 10.2 7.4 5.9


9.9 8.9 5.9 4.4

EV/Ton(USD) 128.0 123.9 109.5 99.2

October 2014 8

Quarterly Performance (Standalone) (INR Million) Y/E March FY14 FY15 FY14 FY15E

1Q 2Q 3Q 4QE 1Q 2QE 3QE 4QE

Sales Dispatches (m ton) 2.65 2.44 2.29 2.65 2.56 2.32 2.48 2.92 10.04 10.27 YoY Change (%) 11.3 -2.9 -5.2 -4.4 -3.4 -5.0 8.0 10.0 -0.2 2.4 Realization (INR/ton) 4,188 4,116 4,429 4,009 4,244 4,544 4,394 4,650 4,178 4,464

YoY Change (%) -6.2 -5.5 1.5 -5.0 1.4 10.4 -0.8 16.0 -4.2 6.8 QoQ Change (%) -0.8 -1.7 7.6 -9.5 5.9 7.1 -3.3 5.8 0.0 0.0

Net Sales 12,384 10,859 10,365 10,801 12,262 11,219 11,092 13,706 44,409 48,280 YoY Change (%) 3.1 -3.3 -4.2 -9.3 -1.0 3.3 7.0 26.9 -3.4 8.7 EBITDA 1,910 1,276 1,444 742 1,578 1,827 1,149 2,149 5,371 6,703 Margins (%) 15.4 11.7 13.9 6.9 12.9 16.3 10.4 15.7 12.1 13.9 Depreciation 680 682 686 716 662 680 706 748 2,764 2,796 Interest 999 988 773 778 967 860 860 868 3,537 3,555 Other Income 25 80 19 272 22 50 60 38 396 170 PBT before EO expense 257 -314 4 -480 -30 337 -357 571 -533 522 Extra-Ord expense 0 0 0 1,091 0 0 0 0 1,091 0 PBT 257 -314 4 -1,571 -30 337 -357 571 -1,624 522 Tax 89 -89 0 0 0 101 -107 162 0 157 Rate (%) 34.6 28.3 0.0 0.0 0.0 30.0 30.0 28.4 0.0 30.0 Reported PAT 168 -225 4 -1,571 -30 236 -250 409 -1,624 365 Adj PAT 168 -225 4 -480 -30 236 -250 409 -533 365 YoY Change (%) -77.5 -145.9 -98.4 -282.2

-117.6 NA NA NA -130.2 NA

Margins (%) 1.4 -2.1 0.0 -4.4 -0.2 2.1 -2.3 3.0 -1.2 0.8 E: MOSL Estimates


India Cements

CMP: INR112 Neutral We expect volumes to decline 5% YoY (9% QoQ) to 2.32m tons.

Strong pricing uptick in the South in June, with higher resilience in July and August, should support 2QFY15 realizations. We estimate 10.4% YoY (7.1% QoQ) growth in realizations to INR4,544/ton.

We estimate EBITDA at INR1.8b and expect EBITDA margin to expand by 4.6pp YoY (3.4pp QoQ) to 16.3%, translating into PAT of INR236m (v/s negative INR30m in 1QFY15). Pure cement EBITDA/ton would increase by ~INR154 QoQ to INR602/ton.

The stock trades at 10.5x FY16E EPS, and at an EV of 6.2x FY16E EBITDA and USD70/ton. Maintain Neutral, with a target price of INR114 (FY16E EV of USD70/ton).

Key issues to watch for Demand and pricing outlook, especially in South India Timeline and capex plan for TN expansion of 2.6m tons Further clarity on management thought process in IPL demerger

Bloomberg ICEM IN




1,6,12 Rel Perf. (%) -1/ 65/84


Y/E March 2014 2015E 2016E 2017E

Sales 44.4 48.3 57.4 68.6 EBITDA 5.4 6.7 9.8 13.1 NP -0.5 0.4 2.9 5.3 Adj. EPS

-7.9 1.8 10.7 19.0

EPS Gr. (%) -235.7 -122.4 504.9 78.1 BV/Sh (INR) 125.4 124.2 130.2 143.9

RoE (%) -1.3 1.0 7.4 12.5 RoCE (%) 4.2 5.8 10.2 14.4 Payout (%) 0.0 195.5 36.9 20.3

Valuations P/E (x) -14.2 63.6 10.5 5.9 P/BV (x) 0.9 0.9 0.9 0.8 EV/EBITDA

11.8 9.5 6.2 4.2

EV/Ton(USD) 74.7 75.0 70.4 63.9

October 2014 9

Quarterly Performance (INR Million)

Y/E March FY14 FY15 FY14 FY15E

1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE

Sales 33,149 31,761 31,378 34,026 29,937 35,234 37,661 44,195 129,732 147,027

Change (%) 11.9 6.5 -7.7 -11.9 -9.7 10.9 20 29.9 -1.8 13.3

EBITDA 7,847 7,904 7,189 8,718 7,550 9,420 9,451 12,174 31,080 38,595 Change (%) 1.7 2.5 -5.7 2.5 -3.8 19.2 31.5 39.6 -2.1 24.2

As of % Sales 23.7 24.9 22.9 25.6 25.2 26.7 25.1 27.5 24 26.3

Depreciation 1,943 1,962 1,968 1,862 2,146 2,150 2,175 2,198 7,736 8,669 Interest 5,900 6,542 7,515 7,564 7,896 7,000 6,800 6,232 27,521 27,928 Other Income 371 1,245 441 905 479 390 410 320 3,539 1,599

Extra-ordinary income 4,038 -4

PBT 4,327 656 -1,854 275 -2,017 660 886 4,064 3,400 3,593 Tax 982 -206 -968 -730 -1,211 224 301 1,385 -737 699

Effective Tax Rate (%) 22.7 -31.4 52.2 -265.8 60 34 34 34.1 -21.7 19.5

Reported PAT 3,345 862 -886 1,005 -806 435 585 2,680 4,138 2,894 Adj PAT 207 851 -885 927 -803 435 585 2,680 932 2,898

Change (%) -85 -33.5 -180.3 -22.3 -486.9 -48.8 -166.1 189.2 -81.1 211.1

E: MOSL Estimates


Jaiprakash Associates

CMP: INR27 Buy In 2QFY15, we expect Jaiprakash Associates (JPA) to post revenue of

INR35.2b, EBITDA of INR9.4b and net profit of INR435m. In the Cement business, we have assumed realization of INR4,593/t

v/s INR4,021/t YoY. We have estimated volumes of 3.6mt, up 6% YoY. EPC division's revenue is expected at INR14.5b, flat YoY, and EBIT

margin of 30%, flat YoY. JPA has entered into a Business Transaction Agreement (BTA) with

Shree Cement Ltd for the sale of its 1.5mtpa cement grinding unit at Panipat, Haryana. Further, as per media reports, JPA is also considering to sell its Rewa cement plant to UltraTech Cement Ltd.

JSWEL has signed a binding MoU for the 100% acquisition of three operational plants of JPAs subsidiary, JPVL.

Recently, JPA completed a QIP offering of USD250m to be utilized for debt repayment.

We expect JPA to post standalone net profit of INR2.9b in FY15E (up 2.1x YoY) and INR8.7b in FY16E (up 2x YoY). The stock trades at a reported PER of 6.9x FY16E.

Key issues to watch out Cement realizations and cost. Update on further disinvestment. EPC divisions profitability and visibility on revenue/order book. Ramp-up in real estate division, revenue recognition.

Bloomberg JPA IN

Equity Shares (m) 2,219.1



1,6,12 Rel Perf. (%) -43/ -70/-61


Y/E March 2014 2015E 2016E 2017E

Sales 131.2 147.0 167.7 181.1

EBITDA 32.5 38.6 44.7 47.2

NP 0.9 2.9 8.7 11.5

Adj. EPS (INR) 0.4 1.3 3.9 5.2

EPS Gr. (%) -81.4 210.6 201.8 31.7

BV/Sh. (INR) 61.7 62.7 65.8 69.8

RoE (%) 0.7 2.1 6.1 7.7

RoCE (%) 6.9 8.1 9.6 10.2

Payout (%) 5.14 22.8 22.8 22.8

Valuations

P/E (x) 64.6 20.8 6.9 5.2

P/BV (x) 0.4 0.4 0.4 0.4

EV/ EBITDA (x) 9.0 7.6 6.5 5.9

Div. Yield (%) 0.3 1.0 2.9 3.8

October 2014 10

Quarterly Performance (INR Million) Y/E June FY14 FY15E FY14 FY15E 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Sales Dispat. (m ton) 3.26 3.44 3.84 3.72 3.72 3.88 4.41 4.38 14.25 16.39 YoY Change (%) 7.2 14.7 17.8 17.3 14.0 13.0 15.0 17.8 14.4 15.0 Realization (INR/Ton) 3,334 3,430 3,863 3,994 3,794 3,894 4,194 4,341 3,672 4,072

YoY Change (%) -12.6 -7.9 10.4 11.6 13.8 13.5 8.6 8.7 1.2 10.9 QoQ Change (%) -6.8 2.9 12.6 3.4 -5.0 2.6 7.7 3.5 0.0 0.0

Net Sales 12,475 13,170 16,600 16,514 15,585 16,574 20,411 20,767 58,759 73,337 YoY Change (%) -3.8 -7.8 16.2 14.6 24.9 25.8 23.0 25.8 5.5 24.8 EBITDA 2,494 2,694 4,261 4,335 3,388 3,840 5,680 6,002 13,784 18,909 Margins (%) 20.0 20.5 25.7 26.2 21.7 23.2 27.8 28.9 23.5 25.8 Depreciation 1,139 1,156 1,667 1,538 1,775 1,775 1,900 2,001 5,499 7,451 Interest 312 309 363 308 325 325 320 324 1,292 1,294 Other Income 740 111 546 568 750 150 550 500 1,964 1,950 PBT before EO Exp 1,783 1,339 2,777 3,057 2,038 1,890 4,010 4,177 8,957 12,115 Extra-Ord Expense 11 32 59 -255 0 0 0 0 -154 0 PBT 1,773 1,308 2,719 3,312 2,038 1,890 4,010 4,177 9,111 12,115 Tax 50 153 494 542 428 397 842 877 1,238 2,544

Rate (%) 2.8 11.7 18.2 16.4 21.0 21.0 21.0 21.0 13.6 21.0 Reported PAT 1,722 1,155 2,225 2,770 1,610 1,493 3,168 3,300 7,872 9,571 Adj PAT 1,732 1,183 2,273 2,557 1,610 1,493 3,168 3,300 7,739 9,571 YoY Change (%) -24.3 -48.0 -17.1 -10.1 -7.1 26.2 39.4 29.1 -23.0 23.7 E:MOSL Estimates


Shree Cement

CMP: INR8,408 Buy We expect 1QFY15 cement volumes to grow 14% YoY (flat QoQ) to

3.72m tons (including clinker). Realizations are likely to grow 13.8% YoY (decline 5% QoQ) to INR3,794/ton. QoQ deterioration in realizations and negative operating leverage would lead to QoQ decline of INR298/ton in cement profitability to INR872/ton.

We expect merchant power sale of 423m units (v/s 498m units in 4QFY14 and 417m units in 1QFY14) at ~INR3.5/unit (v/s INR3.36/unit in 4QFY14 and INR3.85/unit in 1QFY14). We estimate power EBITDA contribution at INR148m (v/s -INR10m in 4QFY14 and INR310m in 1QFY14). Adjusted PAT would be INR1.6b (v/s INR2.6b in 4QFY14 and INR1.7b in 1QFY14).

We are cutting our EPS estimate by 1.2% for FY15 but raising our EPS estimate for FY16 by 4.9% to factor in marginally higher volumes and realizations.

The stock trades at 19x FY16E EPS, and at an EV of 9.8x FY16E EBITDA and USD179/ton. Maintain Buy, with a target price of INR9,130 (FY16E EV of USD200/ton).

Key issues to watch for Volume and pricing outlook for North India Pet-coke price trend and update on any forward agreements for

merchant power Update on planned expansion and progress in capex plans

Bloomberg SRCM IN



52-Week Range (INR) 8,810/3,988

1,6,12 Rel Perf. (%) 7/ 30/67


Y/E June 2014 2015E 2016E 2017E

Sales 58.8 73.3 90.9 109.0 EBITDA 13.8 18.9 27.0 35.8 NP 7.7 9.6 15.5 23.0

Adj EPS (INR) 222.2 274.7 443.7 661.3 EPS Gr. (%) -23.0 23.7 61.5 49.0 BV/Sh.(INR) 1,352 1,598 2,007 2,627

RoE (%) 18.1 18.6 24.6 28.5 RoCE (%) 19.0 21.6 28.2 33.6 Payout (%) 11.4 10.6 7.9 6.1


20.3 15.2 9.8 6.6

EV/Ton(USD) 245.0 190.9 178.5 158.6

October 2014 11

Quarterly Performance (INR Million) Y/E March FY14 FY15 FY14 FY15E 1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE Sales (m ton) 10.09 9.23 9.98 12.18 11.70 10.25 11.28 13.71 41.5 46.9 YoY Change (%) -2.3 -0.6 0.4 9.4 16.0 11.0 13.0 12.5 2.0 13.1 Grey Cem Realn.(INR/ton) * 4,120 3,973 3,936 3,974 4,117 4,177 4,327 4,543 4,000 4,305 YoY Change (%) 0.0 -5.8 -2.8 -0.9 -0.1 5.1 9.9 14.3 -2.5 7.6 QoQ Change (%) 2.7 -3.6 -0.9 1.0 3.6 1.5 3.6 5.0 Net Sales 49,575 45,021 47,864 58,319 56,495 51,878 58,903 73,535 200,779 240,810 YoY Change (%) -2.3 -4.2 -1.5 8.2 14.0 15.2 23.1 26.1 0.3 19.9 EBITDA 10,491 6,597 7,641 11,429 10,079 8,214 11,922 17,323 36,160 47,537 Margins (%) 21.2 14.7 16.0 19.6 17.8 15.8 20.2 23.6 18.0 19.7 Depreciation 2,521 2,573 2,645 2,785 2,645 3,100 3,200 3,304 10,523 12,249 Interest 660 888 905 739 1,002 1,400 1,500 1,603 3,192 5,505 Other Income 1,882 574 996 1,858 2,557 800 900 1,143 5,310 5,400 PBT before EO expense 9,192 3,711 5,088 9,763 8,989 4,514 8,122 13,558 27,755 35,182 Extra-Ord expense 0 0 0 -956 0 0 0 0 -956 0 PBT after EO Expense 9,192 3,711 5,088 10,719 8,989 4,514 8,122 13,558 28,711 35,182 Tax 2,466 1,070 1,391 2,340 2,733 1,354 2,437 4,031 7,266 10,555 Rate (%) 26.8 28.8 27.3 21.8 30.4 30.0 30.0 29.7 25.3 30.0 Reported PAT 6,726 2,641 3,698 8,379 6,256 3,160 5,685 9,527 21,445 24,628 Adj PAT 6,726 2,641 3,698 7,632 6,256 3,160 5,685 9,527 20,731 24,628 YoY Change (%) -13.6 -52.0 -38.5 5.1 -7.0 19.6 53.8 24.8 -89.3 18.8


Ultratech Cement

CMP: INR2,625 Buy We expect cement volumes to grow 11% YoY (decline 12% QoQ) to

10.25m tons. Realizations are likely to grow 5.1% YoY (1.5% QoQ) to INR4,177/ton.

White cement volumes would grow 9.1% YoY and realizations would grow 6% YoY. RMC volumes would grow 9.6% YoY but realizations would decline 7% YoY.

We estimate grey cement EBITDA at INR650/ton (-INR97/ton QoQ). EBITDA margin would decline 2pp QoQ (expand 1.1pp YoY) to 15.8%.

Overall EBITDA is likely to grow 25% YoY (decline 19% QoQ) to INR8.2b. PAT would grow 19.6% YoY to INR3.2b.

The stock trades at 19.2x FY16E EPS, and at an EV of 10.9x FY16E EBITDA and USD178/ton. Maintain Buy with a target price of INR3,219 (FY16E EV of USD200/ton).

Key issues to watch for Volume growth recovery and outlook Cement pricing outlook and sustainability Future expansion strategy and capex plan Update on financial performance of Star Cement, UAE

Bloomberg UTCEM IN



52-Week Range (INR) 2,868/1,635

1,6,12 Rel Perf. (%) 3/ 1/8


Y/E March 2014 2015E 2016E 2017E Sales 200.8 245.4 298.5 360.8 EBITDA 36.2 46.8 67.3 92.8

NP 20.7 24.7 37.5 54.5 Adj EPS (INR) 75.6 90.0 136.7 198.7 EPS Gr. (%) -21.2 19.0 52.0 45.3

BV/Sh (INR) 623.5 701.0 824.9 1006.2 RoE (%) 12.8 13.6 17.9 21.7 RoCE (%) 14.4 15.7 19.4 24.9

Payout (%) 13.5 12.9 9.3 8.8 Valuations P/E (x) 34.7 29.2 19.2 13.2

P/BV (x) 4.2 3.7 3.2 2.6 EV/EBITDA

19.2 15.7 10.9 7.3

EV/Ton(USD) 190.5 185.8 178.1 165.0

October 2014 18

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For U.S. Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.

This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

For Singapore Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:

Anosh Koppikar Kadambari Balachandran Email:[email protected] Email : [email protected] Contact(+65)68189232 Contact: (+65) 68189233 / 65249115 Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931

Motilal Oswal Securities Ltd

Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025 Phone: +91 22 3982 5500 E-mail: [email protected]

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