PCG RESEARCH INVESTMENT IDEA 31 MARCH 2017

MULTI COMMODITY EXCHANGE (MCX) (

Private Client Group - PCG RESEARCH P a g e | 1

Industry CMP Recommendation BUY on Dips to band Target Time Horizon

EXCHANGES Rs. 1204 BUY on declines Rs. 1150 - 1080 Rs. 1505 1 Year

HDFC Scrip Code MCXLTDEQNR

BSE Code 534091

NSE Code MCX

Bloomberg MCX

CMP as on 31 Mar 17 1204

Equity Capital (Rs mn)

510

Face Value (Rs) 10

Equity O/S (mn) 51

Market Cap (Rs mn) 61382

Book Value (Rs) 257

Avg. 52 Week Volumes

411813

52 Week High 1420

52 Week Low 814

Shareholding Pattern (%)

Promoters 15.0

Institutions 46.2

Non Institutions 39.8

Total 100.0

PCG Risk Rating* Red * Refer Rating explanation

Devarsh Vakil devarsh.vakil@hdfcsec.com

Multi Commodity Exchange of India (MCX) is engaged in Facilitating Trading, and Clearing and Settlement of

Commodity Derivatives. It operates as a commodity futures exchange. It offers its products in various

segments, such as Bullion, including Gold, Gold Mini, Gold Petal and Silver; Base Metals, including, Aluminum,

Copper, Lead, Nickel and Zinc; Energy, including Crude Oil, Brent Crude Oil and Natural Gas, and Agro

Commodities, including Cardamom, Cotton, Crude Palm Oil, Kapas and Mentha Oil. Its MCXCOMDEX is a real-

time commodity index based on commodity futures price of an exchange. Other commodity indices developed

by the Company include MCXAgri, MCXEnergy and MCXMetal. Its online trading platform is accessible to its

members through its trader workstation or computer-to-computer link (CTCL) using multiple connectivity

media, including point of presence (POP) connectivity, very small aperture terminal (VSATs) and the Internet.

Investment Rationale:

SEBI on its 1st anniversary as a regulator, allowed options trading in the commodity derivative segment. It

was a keenly discussed, awaited and a critical reform required to drive overall commodity derivative market

development. Options will help in attracting more hedgers and retail clients; bring more liquidity and depth in

the market.

The circular states that exchanges that are willing to start options trading could do so but after taking

approval from the regulator. However the circular has not mentioned (1) commodities that have been

allowed, (2) date for commencement of trading and (3) the pricing mechanism. SEBI said that detailed

guidelines will be issued in relation to this, shortly.

We expect options to start trading by Q4 FY18E and initially option contracts will commence trading in highly

liquid commodities like Crude, gold and silver. Currently Bullions and Energy constitute for ~70% of total

turnover.

Globally, option contracts constitute ~42% of the total contracts traded (both equities and commodities). If

we consider only commodities derivative market, options constitute only ~6% of the total traded volume.

This low contribution of options to overall volume is primarily because options are not traded in China. Dalian

commodity exchange (China), The Shanghai Futures (China) and CME group account for ~70% of the total

traded volume globally for commodities.

The Multi Commodities Exchange (MCX) has set its sights on strengthening its position in the agri

commodities segment and consolidating its presence in the non-agri segment.

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Private Client Group - PCG RESEARCH P a g e | 2

It has plans to introduce many products that are not available for derivatives trading so far. The

products include robusta coffee, whose exports are rising. The MCX found a large number of people

interested in hedging the crop or consumers and exporters looking for hedging coffee procurement

price risks with the expansion of retail coffee chains.

The exchange is said to be exploring futures in tea but the issue is that there are several varieties and

grades and standardising contracts is not so easy. So, the move is likely to boost further MCX’s

positioning in terms of revenues and profitability.

As far as Non-Agri is concerned, company intends to consolidate its position with contracts in precious

metals and bullion, deliverable contracts in base metals and some more in the energy sector, all aimed

at increasing connectivity with the physical markets in metals & energy.

Multiple Positive Triggers to drive revenues and PAT

We expect options trading in commodities to start by Q1 FY18E

We have incorporated options volumes in our ADTV (Average Daily Trading Volume) estimates

and have assumed options ADTV to be ~50% of current futures turnover in 4QFY17E and will

gradually increase to ~75% by FY18E.

Total ADTV is expected to increase by 33/71% to Rs 292/500bn in FY17/18E respectively. We

have assumed ADTV to reach the pre-CTT level by FY18E and can cross that significantly in

subsequent years.

The realisation from options is only ~20% of futures realisation as the transaction charges in

options is levied on the premium turnover which is only ~2-3% of notional turnover.

We assume that options trading will boost ADTV by 11/43% while realisation will be impacted by

-9%/-34% in FY17/18E respectively.

Due to lower options realisation the blended realisations to fall 20.5% in FY18E offset by hike in

transaction charges.

This ADTV assumption isn’t contingent on successful forays of the company in any new

commodity areas, which can pose upside risks to our assumptions.

PCG RESEARCH

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MCX signed MoU with Singapore Diamond Exchange

In Feb 2017, Multi Commodity Exchange of India (MCX) and Singapore Diamond Investment Exchange

(SDiX), the world’s first and only commodity exchange trading in physically settled diamonds, have signed a

Memorandum of Understanding (MoU) for establishing areas of cooperation between the two exchanges. The

MoU is intended to facilitate cooperation between the two exchanges in areas such as knowledge sharing and

research, standardization of the product for Indian markets and enhancing transparency in pricing, as well as

to explore areas for further collaboration between the exchanges.

MCX Version 2.0; Recommend BUY with TP of Rs 1505

We expect MCX to post robust 41% EBITDA CAGR driven by revenue CAGR of 25% and EBITDA margin

expansion (48% in FY19E vs. 32.6% in FY16) over FY16-19E. Considering the asset-light nature of the

business, we expect RoE to expand to 15% in FY19E vs. 9.0% in FY16.

MCX had a decent run up after the hike in transaction charges and regulatory approvals (options trading).

MCX currently trades at 46.5x FY17E and 35.2x FY18E EPS. We still see significant value in MCX considering

its (1) Strong business franchise, (2) Recent top-level management rationalisation, (3) Favorable regulatory

environment and (4) Long term growth prospects. Since, Stock has run up a lot, we recommend investors to

BUY on MCX on declines to Rs 1080-1150 with target price of Rs 1505 implying a P/E of 38x FY19E EPS.

Key Risks

Competition from other exchanges (universal exchange)

Regulatory delays

Higher regulatory risks due to speculative nature of trades: i) Delay in implementation of proposed

policy measures; ii) Ban on trading in certain commodities; iii) Revision in open position limits, higher

margin requirement, CTT imposition etc.

Significant dependence on a few commodities: Top four commodities—gold, silver, crude oil and

copper—accounted for more than 85% of total volumes on MCX

Long‐term pricing pressure likely in commodities futures

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Financial Summary (Standalone) Year Ending March (Rs

mn) Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%) FY15 FY16 FY17E FY18E FY19E

Net Revenues 686 570 20.4 652 5.1 2,225 2,349 2,832 3,556 4,478

EBITDA 193 205 -6.2 252 -23.5 876 767 930 1,528 2,147

APAT 339 236 43.9 376 -9.9 1,251 1,085 1,418 1,624 2,021

Diluted EPS (Rs) 6.7 4.6 43.9 7.4 -9.9 24.6 21.3 27.8 31.8 39.6

P/B (x) 5.1 5.1 4.8 4.6 4.2

P/E (x) 48.8 56.5 43.2 37.7 30.3

EV / EBITDA (x) 55.1 65.6 53.4 33.4 23.3

RoE (%) 10.7 9.0 11.5 12.4 14.5

Source: Company, HDFC sec Research

Quarterly Financials Snapshot

(Rs mn) Q3FY17 Q3FY16 YoY (%) Q2FY17 QoQ (%)

Operating income 686 570 20.4 652 5.1

Software service expenses 112 88 26.7 107 4.1

Employee Expenses 198 100 97.9 144 37.5

Other Operating Expenses 184 176 4.5 150 22.8

EBITDA 193 205 -6.2 252 -23.5

Interest Cost 0 0 NM 0 2.2

Depreciation 45 64 -29.9 42 6.2

Other Income 312 205 52.2 302 3.3

PBT 459 346 32.6 511 -10.1

Tax 119 110 8.5 134 -11.0

APAT 339 236 43.9 376 -9.9

E/o gains (adj for tax) 0 -56 NM 0 NM

RPAT 339 292 16.1 376 -9.9

Source: Company, HDFC sec Research

PCG RESEARCH

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India’s Exchange Traded Commodity Derivatives (ETCD)

17.6

15.6 16.3

18.0 18.3

15.1

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2Q

FY1

6

3Q

FY1

6

4Q

FY1

6

1Q

FY1

7

2Q

FY1

7

3Q

FY1

7

Trading value (Rs tn)

Source: Company, HDFC sec Research

Composition of India’s ETCD

31 29 36 36 35 29

28 29 30 29 29

31

24 23 21 22 23 31

17 18 13 13 13 9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2Q

FY1

6

3Q

FY1

6

4Q

FY1

6

1Q

FY1

7

2Q

FY1

7

3Q

FY1

7

Bullion Energy Base Metals Agri

Source: Company, HDFC sec Research

Market Share of Key Commodity Exchanges

84 83 89 89 89 93

15 16 10 11 10 6

30%

40%

50%

60%

70%

80%

90%

100%

2Q

FY1

6

3Q

FY1

6

4Q

FY1

6

1Q

FY1

7

2Q

FY1

7

3QFY

17

MCX NCDEX Others

Source: Company, HDFC sec Research

PCG RESEARCH

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MCX: Quarterly Trading Value Analysis

150

170

190

210

230

250

270

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2QFY

16

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

Trading value (Rs tn): LHS ADTV (Rs bn): RHS

Source: Company, HDFC sec Research

MCX’s Traded Value: Sectoral Composition

37 35 40 40 39 30

33 35 34 32 33

34

29 28 24 25 26 34

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2Q

FY1

6

3Q

FY1

6

4Q

FY1

6

1Q

FY1

7

2Q

FY1

7

3Q

FY1

7

Bullion Energy Base Metals Agri

Source: Company, HDFC sec Research

MCX: Market Share

86

87

85

84

84

87

81

82

83

84

85

86

87

88

FY12 FY13 FY14 FY15 FY16 9M FY17

%

Source: Company, HDFC sec Research

PCG RESEARCH

Private Client Group - PCG RESEARCH P a g e | 7

Valuation – Global Exchanges

Country

M-Cap

(US$

mn)

Forward P/E (x) EPS growth (2-yr

CAGR)

PEG

(x)

Forward P/B (x) EV/EBITDA (x) ROE (%)

1-yr fwd 2-yr fwd 1-yr fwd 2-yr fwd 1-yr fwd 2-yr fwd 1-yr fwd 2-yr fwd

Emerging markets

MCX (HDFC Sec estimates) India 898 43.2 37.7 22.3 1.7 4.8 4.6 53.4 33.4 11.5 12.4

Bloomberg Consensus estimates

BM&F Bovespa SA Brazil 10,196 15.0 15.5 1.5 10.4 1.7 1.7 13.5 11.3 10.1 10.6

Bursa Malaysia Bhd Malaysia 1,070 22.2 20.9 7.6 2.8 6.1 5.7 9.8 9.2 25.0 26.0

Bolsa Mexicana Mexico 751 15.7 14.4 9.2 1.6 3.0 2.8 9.3 8.7 17.5 19.4

Multi Commodity Exchange India 898 42.0 29.9 37.5 0.8 4.4 4.0 47.5 28.1 10.9 14.1

EM average

23.7 20.2 14.0 3.9 3.8 3.5 20.0 14.3 15.9 17.5

Developed markets

CME Group USA 39,511 24.3 22.6 55.9 0.4 1.9 1.9 15.0 15.1 7.4 7.7

Hong Kong Exchanges Hong Kong 29,444 32.4 29.2 13.4 2.2 7.3 7.2 4.7 4.2 22.8 24.5

Intercontinental Exchange USA 33,787 18.8 17.2 0.6 29.3 2.2 2.5 13.3 11.9 10.6 11.2

Deutsche Boerse Germany 15,994 17.0 15.2 8.0 1.9 3.3 2.9 11.4 10.4 19.5 19.4

Nasdaq OMX USA 11,135 15.9 14.8 10.3 1.4 1.9 1.9 10.5 10.0 12.4 13.0

Japan Exchange Group Japan 8,103 22.5 21.8 2.9 7.4 3.6 3.2 12.3 12.1 14.8 14.0

Singapore Exchange Singapore 5,546 20.5 19.4 7.0 2.8 9.0 7.2 13.8 13.1 36.2 35.7

ASX Australia 7,215 21.1 20.0 5.2 3.9 2.5 2.5 13.8 13.2 11.8 12.2

CBOE Holdings USA 6,001 27.6 22.8 7.7 3.0 20.7 5.6 13.7 12.1 28.5 25.5

Hellenic Exchanges Greece 335 29.0 21.7 13.8 1.6 2.1 2.1 12.6 9.2 7.4 10.3

NZX Ltd New Zealand 201 18.6 16.6 31.7 0.5 3.9 4.1 9.5 9.0 21.1 23.5

Developed markets average

22.5 20.1 14.2 4.9 5.3 3.7 11.9 10.9 17.5 17.9

Global average

22.8 20.1 14.1 4.7 4.9 3.7 14.0 11.8 17.1 17.8

Source: Company, HDFC sec Research

PCG RESEARCH

Private Client Group - PCG RESEARCH P a g e | 8

Income Statement (Standalone)

YE March (Rs mn) FY15 FY16 FY17E FY18E FY19E

Net Revenues (Rs mn) 2,225 2,349 2,832 3,556 4,478

Growth (%) (34.7) 5.6 20.5 25.6 25.9

Software support charges 384 374 417 483 568

Employee Expenses 349 406 622 598 658

SG&A Expenses 228 307 326 345 366

Other Operating Expenses 388 497 537 602 739

EBITDA 876 767 930 1,528 2,147

EBITDA Margin (%) 39.4 32.6 32.8 43.0 48.0

EBITDA Growth (%) (39.9) (12.5) 21.3 64.3 40.6

Depreciation 259 246 190 317 328

EBIT 616 521 739 1,210 1,819

Other Income (Including EO Items) 1,098 311 1,231 1,038 995

Interest 14 0 0 0 0

PBT 1,701 831 1,970 2,248 2,815

Tax (Incl Deferred) 450 413 552 624 793

Minority Interest 0 0 0 0 0

RPAT 1,251 418 1,418 1,624 2,021

EO (Loss) / Profit (Net Of Tax) 0 (667) 0 0 0

APAT 1,251 1,085 1,418 1,624 2,021

APAT Growth (%) (18.1) (13.2) 30.7 14.5 24.5

Adjusted EPS (Rs) 24.5 21.3 27.8 31.8 39.6

EPS Growth (%) (18.1) (13.2) 30.7 14.5 24.5

Source: Company, HDFC sec Research

Balance Sheet (Standalone)

YE March (Rs mn) FY15 FY16 FY17E FY18E FY19E

SOURCES OF FUNDS

Share Capital - Equity 510 510 510 510 510

Reserves 11,512 11,529 12,190 12,955 13,927

Total Shareholders’ Funds 12,022 12,039 12,700 13,465 14,437

Settlement guarantee fund 1,871 1,879 1,973 2,072 2,175

Total Debt 0 0 0 0 0

Net Deferred Taxes (Net) 97 49 49 49 49

Long Term Provisions & Others 246 234 234 234 234

TOTAL SOURCES OF FUNDS 14,236 14,201 14,955 15,819 16,894

APPLICATION OF FUNDS

Net Block 1,451 1,401 1,352 3,489 3,384

Investments 132 2,230 2,230 2,229 2,230

LT Loans & Advances 382 310 325 341 358

Total Non-current Assets 1,965 3,941 3,907 6,059 5,973

Debtors 107 42 54 68 86

Other Current Assets 786 737 918 1,137 1,415

Cash & Equivalents 15,385 13,448 14,510 13,870 15,845

Total Current Assets 16,278 14,227 15,482 15,074 17,345

Trading margin from members 2,389 2,473 2,865 3,667 4,693

Other Current Liabilities & Provns 1,617 1,495 1,569 1,648 1,730

Total Current Liabilities 4,007 3,967 4,435 5,315 6,423

Net Current Assets 12,271 10,260 11,048 9,760 10,922

TOTAL APPLICATION OF FUNDS 14,236 14,201 14,955 15,819 16,895

Source: Company, HDFC sec Research

PCG RESEARCH

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Cash Flow (Standalone)

YE March (Rs mn) FY15 FY16 FY17E FY18E FY19E

Reported PBT 1,701 831 1,970 2,248 2,815

Non-operating & EO items (1,075) (927) (1,231) (1,038) (995)

Interest expenses 14 0 0 0 0

Depreciation 259 246 190 317 328

Working Capital Change 207 518 258 632 796

Tax Paid (409) (290) (552) (624) (793)

OPERATING CASH FLOW ( a ) 696 378 636 1,535 2,150

Capex (84) (202) (142) (2,453) (224)

Free cash flow (FCF) 613 175 494 (918) 1,926

Investments 1 (2,098) 0 0 0

Non-operating Income 310 92 1,231 1,038 995

INVESTING CASH FLOW ( b ) 227 (2,209) 1,089 (1,415) 772

Debt Issuance/(Repaid) 0 0 0 0 0

Interest Expenses (14) (0) 0 0 0

FCFE 599 175 494 (918) 1,926

Share Capital Issuance 0 0 0 0 0

Dividend (179) (614) (664) (760) (946)

FINANCING CASH FLOW ( c ) (193) (614) (664) (760) (946)

NET CASH FLOW (a+b+c) 731 (2,445) 1,061 (640) 1,975

EO Items, Others 536 509 0 0 0

Closing Cash & Equivalents 15,385 13,448 14,510 13,870 15,845

Source: Company, HDFC sec Research

Key Ratio (Standalone)

FY15 FY16 FY17E FY18E FY19E

PROFITABILITY (%)

GPM 82.7 84.1 85.3 86.4 87.3

EBITDA Margin 39.4 32.6 32.8 43.0 48.0

APAT Margin 56.2 46.2 50.1 45.7 45.1

RoE 10.7 9.0 11.5 12.4 14.5

RoIC (or Core RoCE) 42.5 22.0 28.1 21.7 26.4

RoCE 7.1 6.0 7.6 8.0 9.1

EFFICIENCY

Tax Rate (%) 28.0 30.8 30.5 30.0 30.0

Fixed Asset Turnover (x) 0.1 0.1 0.1 0.2 0.2

Debtors (days) 17 7 7 7 7

Other Current Assets (days) 118 104 110 110 110

Other Current Liab & Provns

(days) 590 463 447 420 378

Cash Conversion Cycle (days) (455) (353) (330) (303) (261)

Debt/EBITDA (x) (15) (14) (13) (7) (5)

Net D/E (x) (1) (1) (1) (1) (1)

Interest Coverage (x) 124 3,941 NM NM NM

PER SHARE DATA (Rs)

EPS 24.6 21.3 27.8 31.8 39.6

CEPS 29.7 26.1 31.5 38.1 46.1

Dividend 10.0 6.5 11.1 12.7 15.9

Book Value 235.7 236.1 249.0 264.0 283.1

VALUATION

P/E (x) 48.8 56.5 43.2 37.7 30.3

P/BV (x) 5.1 5.1 4.8 4.6 4.2

EV/EBITDA (x) 55.1 65.6 53.4 33.4 23.3

OCF/EV (%) 1.4 2.1 1.3 3.0 4.3

FCF/EV (%) 1.3 1.7 1.0 (1.8) 3.8

FCFE/Mkt Cap (%) 0.1 (0.2) 0.3 0.0 0.5

Dividend Yield (%) 0.8 0.5 0.9 1.1 1.3

Source: Company, HDFC sec Research

PCG RESEARCH

Private Client Group - PCG RESEARCH P a g e | 10

Rating Chart

R E T U R N

HIGH

MEDIUM

LOW

LOW MEDIUM HIGH

RISK

Ratings Explanation:

RATING Risk - Return BEAR CASE BASE CASE BULL CASE

BLUE LOW RISK - LOW RETURN STOCKS

IF RISKS MANIFEST PRICE CAN FALL 20% OR MORE

IF RISKS MANIFEST PRICE CAN FALL 15%

& IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 15%

IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 20% OR

MORE

YELLOW MEDIUM RISK - HIGH RETURN STOCKS

IF RISKS MANIFEST PRICE CAN FALL 35% OR MORE

IF RISKS MANIFEST PRICE CAN FALL 20%

& IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 30%

IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 35% OR

MORE

RED HIGH RISK - HIGH RETURN STOCKS

IF RISKS MANIFEST PRICE CAN FALL 50% OR MORE

IF RISKS MANIFEST PRICE CAN FALL 30%

& IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 30%

IF INVESTMENT RATIONALE

FRUCTFIES PRICE CAN RISE BY 50%

OR MORE

PCG RESEARCH

Private Client Group - PCG RESEARCH P a g e | 11

Price Chart

100

300

500

700

900

1100

1300

1500

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year. Sell: Stock is expected to decline by 10% or more in the next 1 Year.

PCG RESEARCH

Private Client Group - PCG RESEARCH P a g e | 12

I, Devarsh Vakil, MBM, author and the name 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. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. Any holding in stock – No Disclaimer: This report has been prepared by HDFC Securities Ltd and is meant for sole use by the recipient and not for circulation. The information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject HDFC Securities Ltd or its affiliates to any registration or licensing requirement within such jurisdiction. If this report is inadvertently send or has reached any individual in such country, especially, USA, the same may be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published for any purposes without prior written approval of HDFC Securities Ltd . Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. HDFC Securities Ltd may from time to time solicit from, or perform broking, or other services for, any company mentioned in this mail and/or its attachments. HDFC Securities and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. HDFC Securities Ltd, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. HDFC Securities Ltd and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report. HDFC Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. HDFC Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HDFC Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HDFC Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HDFC Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report. HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475 HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042

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Website: www.hdfcsec.com Email: pcg.advisory@hdfcsec.com