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02nd June, 2017

A well-diversified product portfolio with a strong customer base

ENDU is a prominent player in 2W auto ancillary space with exposure to the critical components of castings, suspension, transmission and braking. Notably, suspension, transmission and braking are

termed as proprietary products. These products are proprietary in nature as ENDU continually focus on developing innovative, lean and cost competitive designs to maintain a technological edge across this product range. Importantly, global tie-ups have allowed it to gain access to technology for each of the stated segments. The broad-based product portfolio caters to nearly 45% (in value terms) of the total auto component industry requirement for 2Ws & 3Ws. This makes ENDU a Tier-1 supplier to most of the OEMs. Notably, the client base is impressive with all large OEMs (Bajaj Auto, Royal Enfield, and Yamaha) under its kitty. Although Bajaj Auto (revenue contribution @38%) remains its key client yet ENDU is reducing its dependence on Bajaj by making inroads with other large OEMs like Hero Motocorp (HMCL) & Honda Motorcycle & Scooter India (HMSI).

Revival in domestic 2W market to aid growth ahead The 2W segment contributes ~80% to ENDU’s standalone revenue and ~55% to its consolidated revenue. With the impact of demonetisation fading away gradually, we believe the 2W demand in India to steadily recover in FY18E. The prospects of the domestic two wheeler industry are expected to improve from mere 5% volume CAGR over FY12-16 to healthy volume CAGR of ~9.5% over FY17-19E on account of several factors: 1) pick-up in economic activity, 2) full impact of normal monsoon this year coupled with 7th Pay commission benefits, 3) government’s thrust on rural development & 4) favorable demographics. Being a tier-one supplier to most of the OEMs in 2W space, we expect ENDU to be one of the biggest beneficiaries of a pick-up in 2W industry demand. Exploring opportunity in CVT market coupled with wholesome shift to telescopic front fork suspension would drive content per vehicle We expect content per vehicle to increase driven by exploring opportunities in CVT (Continuous Variable Transmission) space & cross selling opportunity among existing customers. We expect HMSI to shift from conventional shock absorbers to telescopic front forks by FY19 in all the scooters. Currently, ‘Activa 110cc’ scooters which account for ~50% of total scooter industry volumes use conventional shock absorbers. This would bode well for ENDU as realisations for telescopic front fork is approximately twice when compared to conventional shock absorbers. Thus, we expect suspension segment to register a CAGR of 16% over FY17-19E also aided by the supply of the suspension products to the new Halol plant of HMCL. With scooter segment continuing to outperform the motorcycle segment, CVT is a huge opportunity and focus area for ENDU. It would start supplying CVT to HMCL in H2FY18. Importantly, CVT is about 70% higher in value when compared to manual clutch assembly. Hence, we expect transmission segment to register a CAGR of 15% over FY17-19E.

Valuations ENDU is better placed than peers given its scalable business model, diversified offerings, Tier-1 supplier status & superior return ratios with RoCE of more than 20%. Notably, the balance sheet remains healthy with D/E ratio declining from 0.4x in FY16 to 0.1x by FY19E owing to strong free cash flow generation to the tune of Rs732cr over FY17-19E. We expect revenue/PAT to grow at a CAGR of 14%/26% over FY17-19E. Further, EBITDA margin is expected to expand by 100bps over FY17-19E to 14.3% in FY19E driven

by rising contribution of proprietary products which enjoy better realisation when compared to casting business. We initiate ENDU with an ACCUMULATE rating with a TP of Rs927 at 25x FY19E EPS.

RETAIL EQUITY RESEARCH

Endurance Technologies Ltd. Rating as per Mid Cap 12 month investment period Auto Ancillary

BSE CODE: 540153 NSE CODE: ENDURANCE CMP Rs839 TARGET Rs927 RETURN 11%

Bloomberg CODE: ENDU:IN SENSEX: 31,138

Company Data

Market Cap (cr) Rs11,798

Enterprise Value (cr) Rs11,847

Outstanding Shares (cr) 14.1

Free Float 18%

Dividend Yield 0.2%

52 week high Rs855

52 week low Rs518

6m average volume (cr) 0.08

Beta 1.0

Face value Rs10

Shareholding % Q2 FY17 Q3 FY17 Q4 FY17

Promoters - 82.5 82.5

FII’s - 8.6 8.7

MFs/Insti - 4.6 4.8

Public - 2.0 1.6

Others - 2.3 2.4

Total - 100.0 100.0

Price Performance 3mth 6mth 1 Year

Absolute Return 16% 44% -

Absolute Sensex 7% 17% -

Relative Return* 9% 27% -

*over or under performance to benchmark index

Y.E Mar (Rs cr) FY17 FY18E FY19E

Sales 5,574 6,299 7,202

Growth (%) 6.6 13.0 14.3

EBITDA 739 865 1,033

EBITDA Margins % 13.3 13.7 14.3

PAT Adj. 330 411 521

Growth (%) 10.3 24.4 26.9

Adj.EPS 23.5 29.2 37.1

Growth (%) 10.3 24.4 26.9

P/E 35.7 28.7 22.6

P/B 6.8 5.6 4.6

EV/EBITDA 16.4 13.7 11.2

ROE (%) 20.8 21.4 22.2

D/E 0.3 0.2 0.1

COMPANY INITIATING

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COMPANY INITIATING REPORT

ACCUMULATE

Sunny days ahead… Endurance Technologies Ltd (ENDU) is one of the largest 2W & 3W automotive component manufacturers in India (70% of overall revenue). Its India business is focused on aluminium die castings & proprietary products (suspension, transmission and braking systems). It also supplies high-value machined aluminium die castings and sub-assemblies for PVs in Europe.

Experienced top management, geographic diversity, long-standing relationship with major OEMs & strong technological capabilities are key strengths of ENDU.

We expect ENDU to be one of the biggest beneficiaries of recovery in 2Ws (rev. contribution @55%) demand as industry is estimated to post healthy 9.5% volume CAGR over FY17-19E.

Content per vehicle is expected to rise with scooters’ wholesome shift to telescopic front fork suspension along with foraying into CVT (Continuous Variable Transmission) space.

Bajaj Auto’s plan to double export volume over the next 4-5 years augurs well for base volumes of ENDU.

Revenue/PAT to grow at 14%/26% CAGR over FY17-19E due to ramp-up of business with other large OEMs like HMCL & HMSI & increase in content per vehicle.

We initiate ENDU with an “ACCUMULATE” rating valuing the stock at 25x FY19E EPS arriving at a target price (TP) of Rs927.

Valuations At CMP, the stock is quoting at P/E multiple of 22.6x FY19E earnings versus a range of 17x to 27x for leading auto ancillary companies (barring Bosch & Wabco). We assign a target multiple of 25x to FY19E EPS of Rs37.1 and arrive at a target price of Rs927. We believe the stock deserves premium valuations on account of several factors: a) ENDU’s more diversified product portfolio in terms of its presence in four critical components as against the presence of peer group in maximum 2 categories, b) ENDU has facilities in all major auto hubs in India (8 in Aurangabad, 5 in Pune, 2 in Pantnagar, 1 each in Manesar, Gujarat & Chennai) which lowers logistics cost for ENDU, given the proximity to customers, c) robust 26% earnings CAGR over FY17-19E, d) content per vehicle is expected to rise with scooters’ wholesome shift to telescopic front fork suspension along with addressable opportunity in CVT space, e) operating margin of ENDU is amongst the highest in the auto ancillary industry, f) ENDU has been generating superior return ratios in excess of 20% over the years & g) experienced management.

Peer comparison

Company Sales (cr) EBITDA Margin %

FY17 FY18E FY19E FY17 FY18E FY19E

ENDU 5,574 6,299 7,202 13.3% 13.7% 14.2%

Gabriel India 1529 1718 1986 9.4% 10% 10%

Minda Ind. 3,519 4,217 5,008 10.2% 11.0% 11.2%

Company P/E ROE%

FY17 FY18E FY19E FY17 FY18E FY19E

ENDU 34.4 28.7 22.6 20.8 21.4 22.0

Gabriel India 22.7 18.3 14.9 18.5 18.9 19.8

Minda Ind. 26.3 16.4 12.9 22.4 22.2 22.9 Source: Bloomberg, Geojit Research;

Investment Rationale A well-diversified product portfolio

India business contributes ~70% to the overall consolidated revenue of the company. Notably, India business is well-diversified across four product segments namely (a) Aluminum castings (since 1985 including high-pressure, low-pressure and Aluminium alloy wheels for motor cycles), (b) Suspension (since 1996 including shock absorbers for scooters, motorcycles & three-wheelers, front forks for motorcycles and scooters), (c) Transmission ( since 1998 including clutch assemblies, cork and paper-based friction plates for motorcycles & three wheelers and CVT for scooters), (d) Braking Systems (since 2004

including such as hydraulic disc brake assemblies including calipers, master cylinders and rotary disc brakes for motorcycles). Commencing with a single manufacturing facility in 1985, the company currently has 18 manufacturing facilities in India. More importantly, ENDU has evolved from a single customer/single segment player to a multiproduct, multi-customer business entity. Castings form the biggest chunk of ENDU’s revenue (62.8%), followed by suspensions (23.3%), transmission (5.5%), braking systems (4.6%) & aftermarket segment (3.8%). Aided by its technology partnerships, we expect the share of proprietary products (suspension, transmission and braking systems) to increase going forward. Consequently, the share of the transmission segment is estimated to rise from 23.3% in FY16 to 25.1% in FY19E.

Consolidated revenue break-up by product (%)

Source: Company, Geojit Research

Diversified across segments (%)


Impressive Clientele - Reducing dependence on Bajaj Auto Limited (BAL) Over the years, the revenue contribution of BAL dropped to 37% of ENDU’s revenue in FY17 from 48.1% in FY14.BAL still remains the largest customer of ENDU. However, ENDU has successfully diversified its customer base by making inroads with other large OEMs like HMCL & HMSI. While HMCL & HMSI hold 60% of the two wheeler market share, their contribution

to ENDU’s revenue hovers around 10%. ENDU started its business with HMSI way back in 2005 with aluminium die-castings and later made in-roads into suspension for Karnataka and Haryana plants in 2013. It is also a major supplier to HMSI’s Gujarat plant for suspensions & castings. Recently, Hero Motocorp Ltd (HMCL) has commenced production (500 vehicles per day) at its Halol manufacturing facility in Gujarat & ENDU would be supplying for their 100% requirement related to front forks & shock absorbers. HMCL targets to attain production levels of 6500 vehicles a day by FY19. Currently, ENDU is catering to HMCL’s Halol plant by supplying suspension products from the Waluj facility as ENDU’s new facility at Halol would commence production by Q4FY18. Thus, the higher exposure to HMCL & HMSI would help in diversifying its customer base.

Customer wise revenue split (%)

FY14 FY15 FY16

Bajaj Auto 48.1 43.2 40.8

FCA Italy S.p.A 14.0 14.2 15.3

Royal Enfield 3.3 4.4 6.0

Next 5 largest customers 18.3 19.0 19.2

Remaining Customers 16.3 19.2 18.7


Robust R&D and technological capabilities

ENDU is an innovation-driven company with strong focus on research and development (R&D), which allows it to develop new products suited to customer requirements. Importantly, global tie-ups have allowed it to gain access to technology for each of the segments. For instance, it has made agreement with WP Performance Systems GmbH and Adler SPA for suspension & transmission products respectively. It owns four dedicated R&D centres in India, one for each of the four product categories. Till date, ENDU has been granted four patents in India, of which two relate to clutch assemblies and the balance two relate to shock absorbers. Further, ENDU has one design registered for an aluminium alloy wheel casting. Besides, it has applied for 39 patents and three designs registrations for a wide range of products.

Strong Technology Tie-Ups

Partner Technology Valid Till

WP Performance Systems GmbH

Suspension component related to new series of motorcycle

2025

Adler SpA Transmission Products related to 2Ws & 3Ws 2018

Leading global brake and suspension company

Braking systems and parts for use in LCVs and 4W passenger vehicles

2017

European brakes technology provider

Design, manufacture, use and sell combined braking systems (CBS) & related assemblies for 2Ws

2020

Magnetti Marelli Shock absorbers and struts for Bajaj 4Ws -


Pick-up in 2W demand to benefit ENDU

During FY12-16, domestic 2W industry volumes grew at a CAGR of just 5%. As the impact of demonetisation wanes away gradually, we expect the 2W demand in India to steadily recover in FY18E. Going forward, 2W segment in India is expected to grow at a CAGR of ~9.5% over FY17-19E. The prospects of the domestic two wheeler industry are expected to improve on account of several factors: 1) pick-up in economic activity, 2) full impact of normal monsoon this year coupled with 7th Pay commission benefits, 3) government’s thrust on rural development, 4) favorable demographics. Notably, the 2W segment contributes ~80% to ENDU’s standalone revenue and ~55% to its consolidated revenue.

ENDU’s revenue growth has consistently outperformed the 2W industry volumes


Rising content per vehicle

Cross-selling opportunity among existing customers

We expect content per vehicle to increase driven by exploring opportunities in CVT (Continuous Variable

Transmission) space & cross selling opportunity among existing customers. We expect HMSI to shift from conventional shock absorbers to telescopic front forks by FY19 in all the scooters manufactured at the new Gujarat plant. Currently, ‘Activa 110cc’ scooters which account for ~50% of total scooter industry volumes use conventional shock absorbers. This would provide a major boost to ENDU’s suspension content per scooter as realisations for telescopic front fork is approximately twice when compared to conventional shock absorbers. Thus, we expect suspension segment to register a CAGR of 16% over FY17-19E.

…Exploring opportunities in CVT & ABS space to drive content per vehicle

With scooter segment continuing to outperform the motorcycle segment, CVT is a huge opportunity and focus area for ENDU. Importantly, CVT is about 70% higher in value when compared to manual clutch assembly. It would start supplying CVT to HMCL in H2FY18. Further, it is in advanced talks with HMSI and Yamaha for tapping the CVT opportunity. Hence, we expect transmission segment to register a CAGR of 15% over FY17-19E. Moreover, the upcoming safety regulations of making ABS mandatory in 2Ws from FY19 would provide another leg to growth. Recently, ENDU has tied up with BWI, USA for ABS technology for 2Ws. However, we haven’t factored its impact onto the financials as ENDU highlighted that it would be ready with the ABS product by Jan-19.

India revenue to grow at 13.8% CAGR over FY17-19E


European business – 30% of sales The company entered Europe by acquiring a pressure die casting and machining company, Endurance Amann (German subsidiary) in FY07 and Endurance Fondalmec (Italian subsidiary) in FY08. It further expanded its European operations with the acquisition of a 15% stake in Endurance FOA in FY13 (acquired the remaining 85% in FY15) and Grana's moulded plastic components

business in FY15. ENDU’s aluminum castings business in Europe (Italy and Germany) supplies engine and transmission components to PVs. ENDU also manufactures components for turbocharged engines based on Euro VI emissions standards. In Europe, the largest customer is FCA (Fiat Chrysler Group) Italy S.p.A. which contributes nearly 50% to Europe revenues. The company is also supplying to Daimler & other reputed 4W OEMs (General Motor, Volkswagen). Currently, ENDU has 3 plants in Germany & 5 in Italy.

Revenue mix by geography (%)


Growth momentum to sustain in Europe With ~85% of castings in machined form, ENDU’s focus in Europe is on profitability. European PV demand has been on a recovery path as it has grown at 4.2% CAGR over 2012-15. Interestingly, the Europe business grew by ~7% YoY in FY17 when compared to European PV market growth of 6.8% YoY. Recently, the company has commissioned a new machining plant in Germany which would mainly cater to Daimler & will help ENDU in diversifying its customer base in Europe. As it makes inroads with German OEMs, the share of FCA is expected to come down. Currently, the order backlog stands at Euro280mn. We expect Europe business to grow at a CAGR of 12.2% over FY17-19E, faster than the European PV market, with incremental revenues coming from the new machining plant in Germany.

Europe revenue to grow at 12% CAGR over FY17-19E


Financials

Recovery in 2W segment to aid ENDU’s overall revenue growth

Overall financial performance remained healthy with revenue registering a CAGR of 8% over FY12-16 as against two wheeler production growth of just 5.1%. The outperformance was backed by the addition of new clients during the period under review. We expect ENDU’s consolidated revenue to witness a CAGR of 13.7% over FY17-19E driven by the uptick in domestic 2W vehicle sales as well as healthy order book position in its Europe business. We expect domestic (standalone) revenue to post 13.8% CAGR in FY17-19E on the back of a) rising market share with HMCL/HMSI & b) new product launches & higher content per vehicle with OEMs. Likewise, Europe business is expected to grow at a CAGR of 12% over FY17-19E due to strong order book of Euro280mn & improving profitability in Europe.

Overall revenue to grow at 14% CAGR during FY17-19E


EBITDA margin to head towards 14%… During FY12-16, the company has consistently maintained EBITDA margin in the range of 12-13%, reflecting its operational efficiency. Going ahead, we expect EBITDA margin expansion by 100bps over FY17-19E to 14.3% in FY19E on account of higher contribution of proprietary products & continued focus on innovations.

EBITDA to grow at 18.2% CAGR over FY17-19E


PAT margin to improve by 130bps In FY16, Adj. PAT stood at Rs299cr, reporting a growth of ~13% CAGR over FY12-16. PAT margin improved by 60bps to 5.7% YoY in FY16. We expect Adj. PAT to grow at a CAGR of 25.6% over FY17-19E led by lower interest cost & higher EBITDA.

PAT to grow at 26% CAGR over FY17-19E


Healthy balance sheet ENDU has been generating strong operating cash flows (OCF) over the years. During FY13-16, OCF has grown at a CAGR of ~24%. Even the working capital position witnessed healthy improvement with cash conversion cycle declining from 27 days in FY13 to 21 in FY16. While the debtor days have reduced from 56 in FY13 to 39 in FY16, creditor days have remained stable at 59 days. Notably, ENDU improved its solvency ratios significantly over FY13-16. Net debt to equity ratio declined from 1.3x in FY13 to 0.4x in FY16. Further, we expect it to reduce further to 0.1x by FY19E owing to strong free cash flow generation to the tune of Rs732cr over FY17-19E (despite annual capex requirement of ~Rs400cr). During FY13-16, ENDU has consistently posted strong return on equity of more than 20% as profitability grew at a healthy CAGR of 19%. Likewise, RoCE rose from 20.4% in FY13 to 23.6% in FY16.

RoE to remain above 20% levels, led by strong free cash flow generation


Endurance Technologies Ltd: Business overview Incorporated in the year 2000, Endurance Technologies Ltd (ENDU) is mainly a 2W and 3W component supplier in India. It also supplies 4W auto component in Europe. It derives 70% & 30% revenues from India & Europe respectively. ENDU is a Tier one supplier to OEMs for most of its products. Currently, the company operates in five segments namely Die-casting (62.8% of revenues), Suspension (23.3%), Transmission (5.5%), Brake systems (4.6%) & Aftermarket (3.8%). Moreover, it is the number one die-casting company in India in terms of actual output and installed capacity as per the Aluminium Casters’ Association of India. Domestically, the company’s prominent customers include - Bajaj, Royal Enfield, Honda Motorcycle and Yamaha, while in Europe its largest customer is FCA Italy S.p.A. Endurance also supplies to Daimler and other reputable four-wheeler OEMs operating from Europe. It has 26 manufacturing facilities of which 18 are in India and 8 are in Europe.

Consolidated revenue break up by product (%)


Manufacturing plants


Key Risks: Higher dependence on Bajaj Auto (accounts for

~40% of revenue).

Any slowdown in automobile sales may weigh on demand

Adverse exchange rate fluctuations.

Country Place No. of plants

India (18

plants)

Aurangabad 8

Pune 5

Pantnagar 2

Manesar 1

Chennai 1

Sanand 1

Germany Massenbachhausen 3

Italy Torino 5

Total - 26

Consolidated Financials

Profit & Loss Account

Y.E March (Rs cr) FY15A FY16A FY17A FY18E FY19E

Sales 4,917 5,230 5,574 6,299 7,202

% change 16.7% 6.4% 6.6% 13.0% 14.3%

EBITDA 605 679 739 865 1,033

% change 11.8% 12.3% 8.8% 17.0% 19.4%

Depreciation 227 243 291 323 352

EBIT 378 436 449 542 681

Interest 51 49 32 21 13

Other Income 32 33 48 54 60

PBT 359 420 465 575 729

% change 28.1% 17.0% 10.5% 23.7% 26.9%

Tax 105 120 134 164 208

Tax Rate (%) 29.3% 28.5% 28.9% 28.5% 28.5%

Reported PAT 252 299 330 411 521

Adj.* - - - - -

Adj. PAT 252 299 330 411 521

% change 20.6% 18.6% 10.3% 24.4% 26.9%

No. of shares (cr) 4.4 4.4 14.1 14.1 14.1

Adj EPS (Rs) 17.9 21.3 23.5 29.2 37.1

% change 20.6% 18.6% 10.3% 24.4% 26.9%

DPS (Rs) 0.9 1.3 1.8 2.0 2.3

Cash flow


Pre-tax profit. 359 414 465 575 729

Depreciation 227 251 291 323 352

Changes in W.C (43) 33 (184) (131) (85)

Others 23 100 (8) (33) (48)

Tax paid (109) (105) (134) (164) (208)

C.F.O 457 692 429 571 741

Capital exp. (355) (524) (289) (360) (360)

Change in inv. (11) (80) 24 - (80)

Other invest.CF 68 59 48 54 60

C.F - investing (299) (546) (217) (306) (380)

Issue of equity (2) - 123 (0) -

Issue/repay debt (82) (1) (87) (150) (150)

Dividends paid (6) (30) (30) (34) (39)

Other finance.CF (49) (33) (165) (21) (13)

C.F - Financing (139) (64) (159) (205) (201)

Chg. in cash 19 83 53 60 160

Closing cash 94 167 220 280 440

Balance Sheet Y.E March (Rs cr) FY15A FY16A FY17A FY18E FY19E

Cash 94 167 220 280 440

Accounts Receivable 579 593 761 860 983

Inventories 386 410 444 492 562

Other Cur. Assets 132 125 145 164 188

Investments 1 62 38 38 118

Gross Fixed Assets 2,989 3,331 3,679 4,039 4,399

Net Fixed Assets 1,342 1,440 1,498 1,535 1,543

CWIP 22 103 44 44 44

Intangible Assets 111 147 135 135 135

Def. Tax (Net) 21 19 18 18 18

Other Assets 97 215 205 205 205

Total Assets 2,784 3,281 3,509 3,771 4,236

Current Liabilities 827 1,189 1,227 1,262 1,395

Provisions - - - - -

Debt Funds 764 603 516 366 216

Other Liabilities 41 39 37 37 37

Equity Capital 18 18 141 141 141

Reserves & Surplus 1,124 1,432 1,589 1,966 2,448

Shareholder’s Fund 1,142 1,450 1,729 2,106 2,589

Minority Interest 11 - - - -

Total Liabilities 2,784 3,281 3,509 3,771 4,236

BVPS (Rs) 81.2 103.1 122.9 149.8 184.1

Ratios


Profitab. & Return

EBITDA margin (%) 12.3 13.0 13.3 13.7 14.3

EBIT margin (%) 7.7 8.3 8.1 8.6 9.5

Net profit mgn.(%) 5.1 5.7 5.9 6.5 7.2

ROE (%) 23.8 23.1 20.8 21.4 22.2

ROCE (%) 22.8 23.6 23.1 25.3 28.1

W.C & Liquidity

Receivables (days) 41.0 38.5 46.5 46.5 46.5

Inventory (days) 41.5 41.6 42.9 42.5 42.6

Payables (days) 56.4 59.2 65.2 59.8 59.8

Current ratio (x) 1.4 1.1 1.3 1.4 1.6

Quick ratio (x) 1.0 0.7 0.9 1.0 1.2

Turnover &Levg.

Gross asset T.O (x) 1.7 1.7 1.6 1.6 1.7

Total asset T.O (x) 1.8 1.7 1.6 1.7 1.8

Adj. debt/equity (x) 0.7 0.4 0.3 0.2 0.1

Valuation ratios

EV/Sales (x) 2.6 2.3 2.2 1.9 1.6

EV/EBITDA (x) 20.6 18.0 16.4 13.7 11.2

P/E (x) 46.7 39.4 35.7 28.7 22.6

P/BV (x) 10.3 8.1 6.8 5.6 4.6

Recommendation Summary

Dates Rating Target

02-June-2017 ACCUMULATE 927

Source: Bloomberg, Geojit BNP Paribas Research

Large Cap Stocks; Mid Cap and Small Cap;

Buy - Upside is 10% or more. Hold - Upside or downside is less than 10%. Reduce - Downside is 10% or more.

Buy - Upside is 15% or more. Accumulate* - Upside between 10% - 15%. Hold - Absolute returns between 0% - 10%. Reduce/Sell - Absolute returns less than 0%. To satisfy regulatory requirements, we attribute ‘Accumulate’ as Buy and ‘Reduce’ as Sell.

The recommendations are based on 12 month horizon, unless otherwise specified. The investment ratings are on absolute positive/negative return basis. It is possible that due to volatile price fluctuation in the near to medium term, there could be a temporary mismatch to rating. * For reasons of valuations/return/lack of clarity/event we may revisit rating at appropriate time. Please note that the stock always carries the risk of being upgraded to BUY or downgraded to a HOLD, REDUCE or SELL.

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information.

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research and information services essential for business intelligence to global companies and financial institutions. Dion is listed on BSE Limited (BSE) and is also

registered under the SEBI (Research Analyst) Regulations, 2014 (SEBI Regulations) as a Research Analyst vide Registration No. INH100002771. Dion’s activities were

neither suspended nor has it defaulted with requirements under the Listing Agreement and / or SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 with the BSE in the last five years. Dion has not been debarred from doing business by BSE / SEBI or any other authority.

In the context of the SEBI Regulations, we affirm that we are a SEBI registered Research Analyst and in the course of our business, we issue research reports /research

analysis etc that are prepared by our Research Analysts. We also affirm and undertake that no disciplinary action has been taken against us or our Analysts in

connection with our business activities.

In compliance with the above mentioned SEBI Regulations, the following additional disclosures are also provided which may be considered by the reader before

making an investment decision:

1. Disclosures regarding Ownership

Dion confirms that:

(i) It/its associates have no financial interest or any other material conflict in relation to the subject company (ies) covered herein at the time of publication of

this report.

(ii) It/its associates have no actual / beneficial ownership of 1% or more securities of the subject company (ies) covered herein at the end of the month

immediately preceding the date of publication of this report.

Further, the Research Analyst confirms that:

(i) He, his associates and his relatives have no financial interest in the subject company (ies) covered herein, and they have no other material conflict in the

subject company at the time of publication of this report.

(ii) He, his associates and his relatives have no actual/beneficial ownership of 1% or more securities of the subject company (ies) covered herein at the end of the

month immediately preceding the date of publication of this report.

2. Disclosures regarding Compensation:

During the past 12 months, Dion or its Associates:

(a) Have not managed or co-managed public offering of securities for the subject company (b) Have not received any compensation for investment banking or

merchant banking or brokerage services from the subject company (c) Have not received any compensation for products or services other than investment banking or

merchant banking or brokerage services from the subject. (d) Have not received any compensation or other benefits from the subject company or third party in

connection with this report

3. Disclosure regarding the Research Analyst’s connection with the subject company:

It is affirmed that I, Rohit Joshi employed as Research Analyst by Dion and engaged in the preparation of this report have not served as an officer, director or

employee of the subject company

4. Disclosure regarding Market Making activity:

Neither Dion /its Research Analysts have engaged in market making activities for the subject company.

Copyright in this report vests exclusively with Dion.

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