Axis Direct Gruh Finance

Gruh Finance LtdCMP: Rs 218

Target Price: Rs 266Potential Upside: 22%Absolute Rating: BUY

Stock Data

No. of shares : 17.80 CrMarket cap : Rs. 3871 Cr

Absolute Rating: BUY

Shareholding (%) Dec 12 QoQ chg

52 week high/low : Rs 250/ Rs 112Avg. daily vol. (6mth) : 165,249 sharesBloomberg code : GRFH INReuters code : Gruh.BO

Shareholding (%) Dec-12 QoQ chg

Promoters : 59.86 (0.04)FIIs : 14.34 (0.70)MFs / UTI : 1.08 (0.62)Banks / FIs : 0.02 0.00Others : 24.7 1.36 Strong Financials –Relative Performance A play on the growing rural housing demand

Financial Summary 100

200

300

10000

20000

30000

Source: Axis Securities, Bloomberg

Y/E Mar

PAT(Rs. Cr)

EPS(Rs.)

ChangeYoY (%)

P/E(x)

BV(Rs.)

P/BV(x)

Net NPA(%)

Adj BV(Rs.)

P/Adj.BV(x)

RoE(%)

RoA(%)

FY11 91.5 5.2 32.7 22.2 18.1 6.4 0.0 18.1 6.4 31.4 3.1

FY12E 120.3 6.8 31.5 22.8 21.8 7.1 0.0 21.8 7.1 34.2 3.2

FY13E 134.7 7.6 11.9 29.5 26.7 8.4 0.0 26.7 8.4 31.5 2.9

FY14E 164 9 9 3 22 4 24 1 33 2 6 8 0 0 33 2 6 8 31 2 2 8

0

100

0

10000

Jan-12 Jul-12 Jan-13

BSE_SENSEX GRUH Finance Ltd

11January 30, 2013Pankit Shah

Asst. Vice [email protected] (+91 22 6680 3623)

“The name of the company has changed to AXIS Securities Limited in the records of Registrar of Companies, Mumbai. Awaiting approval for change of name from Exchanges and SEBI”.

FY14E 164.9 9.3 22.4 24.1 33.2 6.8 0.0 33.2 6.8 31.2 2.8

Source: Company, Axis Securities Ltd.

Housing Finance–Secular Growth to Continue

India has low Mortgage Penetration as a % of GDP India’s rising work force shall lead to more demand for homes

104

8881

80

100

120

600

800

1,000(mn)

62

64

66(%)

4841 39

32 2920 20 17

9

0

20

40

60

rk UK SA ny ng an re ia ea na nd ia

0

200

400

1991 1995 2000 2001 2005 2010 2015 2020

56

58

60

Improving affordability60% of India’s population is below 30 yrs of age and that along with rising middle class -- augurs well for housing finance industry

Den

mar U US

Ger

man

Hon

gKon

Taiw

a

Sin

gapo

r

Mal

ays

Kor

e

Chi

n

Thai

lan

Ind 1991 1995 2000 2001 2005 2010 2015 2020

Working pop Ratio (RHS)

45 25

18

27

36

45(Rs lacs)

10

15

20

25(%)

900

1,200

1,500(mn)

0

91

99

5

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

0

5

0

300

600

1991 1995 2000 2001 2005 2010 2015 2020

2

Source: Company, ENAM Research, Bloomberg.

Property Cost Annual Income Affordability (RHS)0-19 20-45 46-60 61+

Niche Presence in Economically Vibrant States of Gujarat and Maharashtra Housing Price Index Holding on In spite of slowdown Maharashtra and Gujarat Continue to Witness Robust Growth

8%

10%

12%

14%

200

250

300

350

0%

2%

4%

6%

8%

FY08 FY09 FY10 FY11 FY12

0

50

100

150

hm

edab

ad

Ben

galu

ru

Bh

opal

Ch

enna

i

Jaip

ur

Kol

kata

Mu

mba

i

Pu

ne

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rat

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abad

Ben

galu

ru

Bho

pal

Che

nnai

Jaip

ur

Kol

kata

Mum

bai

Pune

Sura

t

Government’s expenditure on Rural SectorPer-Capita Income in Maharashtra and Gujarat


Gujarat Maharashtra All

5000080000

A

July-Sept 2010 Index Oct-Dec 2010 Index Jan-Mar 2011 Index Apr-Jun 2011 Index Jul-Sept 2011 IndexOct-Dec 2011 Index Jan-Mar 2012 Index Apr-Jun 2012 Index Jul-Sep 2012 Index

Ah

B

20000

30000

40000

40000

60000

80000

0

10000

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13e

S i l P R l E l t Oth

0

20000

FY07 FY08 FY09 FY10 FY11 FY12

3

Source: Company, ENAM Research, Bloomberg.

Special Programmes Rural Employment OthersGujarat Maharashtra All India

Company Background

Founded in 1986 by HDFC and AKFED, Gruh Finance is one of India’s leading housing finance providers focused in the

rural and semi-urban sector.

It is recognized by NHB as an eligible housing finance company for refinance facility since 1989 and became a

subsidiary of HDFC in June 2000.

Gruh has 121 retail offices across seven states of India i.e. Gujarat, Maharashtra, Karnataka, Madhya Pradesh,

Rajasthan, Chhattisgarh and Tamil Nadu with first two forming more than 75% of total loan portfolio.

Apart from extending home loans and repair loans under its Suraksha and Sajavat schemes respectively, Gruh Finance

offers loans to families for purchase, construction, repair and renovation of non-residential properties like office

premises, clinics etc under its Samruddhi scheme.

The company has also introduced personal loans under the Sahyog scheme for its existing home loan customers with a

view to meet their other financial needs like education, hospitalization, holiday travel and wedding against the mortgage

of residential properties.

Th C h d i d i f h l d G h S idh h i f fl iblThe Company has designed a new variant of home loan product – Gruh Suvidha – to meet the requirement of a flexible

repayment plan for the self-employed and the skilled workers segment. Under this product, a customer is given an initial

monthly installment that can match his present cash flows with an annual step up for each subsequent year over the

tenure of the loan depending on likely future cash flow.

4

Source: Company, Axis Securities.

Promoters - Background

The senior management of the company is fairly experienced and is closely aligned with its parent company. The Board

of Directors comprises of nine directors - three of whom are from HDFC. The company is led by Mr. Keki Mistry (Non-

executive Chairman) and Mr. Sudhin Choksey (Managing Director).

Keki Mistry: Chairman

Mr. Mistry is the non-executive Chairman of the company and the Vice-Chairman and CEO of HDFC Ltd. He has been on the board of Gruh

since 2000 and is a member of the Audit and Compensation Committees.

Sudhin Choksey: Managing DirectorSudhin Choksey: Managing Director

Mr. Choksey has been on the board of Gruh since May 1996. He was made the CEO of the company in 1998 and the Managing Director

in 2000. He is a member of the Investors’ Grievance Committee.

Other Directors

The company has 7 other directors all of which have been associated with the company for a fairly long time. The members on the board

include Ms. Renu Karnad (Member of the Compensation Committee). Mr. K.G. Krishnamurthy (Managing Director & CEO of HDFC

Property Ventures Ltd (HPVL), Mr. S.M. Palia: (Chairman of the Audit, Compensation and Investors’ Grievance Committees), Mr. Rohit

Mehta (Member of the Audit Committee), Mr. Prafull Anubhai (Member of the Audit and Investors’ Grievance Committees), Mr. S.G.

Mankad and Mr. Kamlesh Shah.

5

Investment Rationale

Niche presence in the semi-urban and rural areas of Gujarat and Maharashtra

Overall, the company operates 121 retail offices across seven states

Gujarat and Maharashtra also accounted for +75% of the disbursements in FY12, with the balance coming from states like Madhya

Pradesh, Karnataka, Rajasthan, Tamil Nadu and Chhattisgarh

Riding on strong housing demand, the company provides sustainable growth trajectory

Disbursements have grown at a CAGR of 26% and PAT at 32% over the last 5 years.

Well managed Asset Quality with 100% Loan coverage (Gross NPA of 0 52% and Net NPA – Nil)Well managed Asset Quality with 100% Loan coverage (Gross NPA of 0.52% and Net NPA – Nil)

Robust NIMs backed by consistent operating performance

NIMs at ~ 5% in the last 2 years are amongst the best in the industry

Cost to Income Ratio at less than 20% is lowest among its peers following branch based business modelCost to co e at o at ess t a 0 s o est a o g ts pee s o o g b a c based bus ess ode

Best in class Return Ratios

ROA in excess of 3%

ROEs of ~ 30%

Stable Borrowing Mix

Apart from conventional bank borrowings and re-finance facilities from NHB, the company has regularly tapped other financing sources

such as NCDs, commercial paper and public deposits. In the last few years, GRUH has reduced its reliance on bank borrowings in favor of

facilities from NHB The change in composition of the borrowing mix will help in drastically bringing down the borrowing cost for the

6

facilities from NHB. The change in composition of the borrowing mix will help in drastically bringing down the borrowing cost for the

company and hence aid the company in maintaining its robust margins in the years to follow.Source: Company, Axis Securities.

Niche Presence in the Semi-urban and Rural Areas

Customer Profile

Employed -Govt. Sector

38%

Self Employed20%

Gruh Finance is a small-sized, niche player in the housing finance

market providing low ticket housing loans to customers from semi-

urban and rural areas.

Gruh is primarily concentrated in the fast growing states of Gujarat

and Maharashtra which account for more than 75% of disbursements.

Professionals

Businessmen 18%

and Maharashtra which account for more than 75% of disbursements.

After the success in these 2 states, it has now commenced lending

operations in Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh

and Tamil Nadu.

Overall, the company operates 121 retail offices across seven states.

Given its pricing power in predominantly rural and semi-urban

Primary presence in fast growing states of Maharashtra and GujaratMajority of loan book for Housing Finance to Salaried Individuals

Employed -Private Sector

22%

Professionals 2%

120%

Given its pricing power in predominantly rural and semi-urban

markets, Gruh is able to maintain its spread which protects its

margins.

Maharashtra, 37.94%

Gujarat,39.67%

33% 37% 39% 39% 36.50%

4% 4% 3% 3% 4%

60%

80%

100%

120%

Karnataka 3.75%

Rajasthan3 68%

Madhya Pradesh

Chhattisgarh,1.88%

Tamil Nadu2.28%

61% 57% 56% 56% 58%

0%

20%

40%


7


3.68%Pradesh10.79%


Salaried Self Employed Others - Individuals Developer Loans

Sustainable Growth Trajectory…

Healthy Disbursement and Loan Book

6000

8000

Gruh Finance is likely to continue benefiting from rising rural cashflows on back of its expertise in semi-urban and rural areas and provenbusiness model.

Over 90% of loan portfolio comprises of individual housing loans withrural loans contributing 43%.

0

2000

4000

FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E

Expansion into newer territories coupled with Maharashtra andGujarat’s growing economy has helped Gruh Finance to step up itsloan book .

During FY07-12, the disbursements increased at a CAGR of 26% whileloan assets grew at CAGR of 24%.

Client Relations across most of the districts and TalukasWell Capitalized Balance Sheet

357400


O/S Loan Book Disbursements

18 220 0

Considering growth potential in newly entered states and Gruh’sbuilding capability, we expect loan book growth of ~26% over FY13-15with steady NIMs at ~5%.

224 259

175

240

89

209215

291

120

63 66100

200

300

18.216.2 16.6

13.3 14.015.0 15.0

10.0

15.0

20.0

25 22

0

Guj

arat

ahar

asht

ra MP

Kar

nata

ka

Raj

asth

an

hhat

tisga

rh TN0.0

5.0

FY08 FY09 FY10 FY11 FY12 FY13E FY14E

8


Ma

Ch

Taluka Gruh Presence

CAR

Well Managed Asset Quality with 100% Loan Coverage

Gruh’s loan book is characterized by middle-income borrowers, withmodest ticket loans and comfortable Loan to Value Ratio.

Given its large concentration in Tier II and Tier III city, the average size ofloans offered by Gruh is small with more than 70% of the propertiesfinanced with loans of less than Rs. 10 lakhs.GIC Housing

Dewan Housing

GNPA (%)

Over past 5 years, Gruh Finance has maintained Gross NPAs at ~1 alongwith 100% provisional coverage ratio.

Efficient credit approval and recovery mechanisms along with strong cashflows have helped the company to keep Net NPAs at Nil, despite exposureto a risky segment.GRUH Finance

HDFC

LIC Housing

Most loan approvals passed stringent ratio criteria such as healthy loan-to-value and installment to income ratios.0 0.2 0.4 0.6 0.8 1

Well managed asset Quality (100% PCR and NIL Net NPAs)Provisional Coverage (%)

100 100 100 100 100 100 100 100

100

83.5

81

LIC Housing

GIC Housing

Dewan Housing

1.4

1.10.9

1.1

0.81.0 1.0 1.0

100 100 100 100 100 100 100 100

80.0

90.0

100.0

1.2

1.6

2.0

100

100

100

GRUH Finance

HDFC

LIC Housing

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.050.0

60.0

70.0

0.0

0.4

0.8


9


0 20 40 60 80 100 120 Net NPAs (%) Gross NPAs (%) PCR (%)

Robust NIMs Backed by Consistent Operating Performance

Gruh Finance enjoys pricing power in rural and semi-urban market due to low competition and low interest rate

sensitivity.

The company has been able to pass on increased cost of funds to borrowers and maintain its NIMs at ~5% during past 2

years. We expect the trend to continue going forward .

Moreover the company faces limited competition risk in the markets in which it is already operational as the lower to

middle housing finance segment entails high cost of operation.

Operations in rural and semi-urban areas entail significant cost in terms of client assessment and customer acquisition

due to small ticket loans and servicing of customers at rural locations.

Besides, cost of collection is higher as repayment through outstation cheques delay actual realization of funds. Due to

such entry barriers, Gruh Finance faces limited competition from small number of PSU banks and local money lenders.

On demand side, interest rate sensitivity is lower for middle to low income group since effective interest rates are lesser

due to tax benefits of upto 2.5 lacs per annum.

Besides, more than 98% of its loan book comprises of floating rate loans. Consequently, Gruh Finance has been able to

pass on increased cost of funds to borrowers and maintain its NIMs at ~5% during last 2 years.

10


Robust NIMs Backed by Consistent Operating Performance

4

5

6

12

16

22.420 4

23.6 24.8

33.1

30

40

Robust NIMs Strong Business per Employee

0

1

2

3

0

4

8


11.3 12.6 12.8 13.7 15.517.6

13.4 14.718.5 20.4

0

10

20

FY08 FY09 FY10 FY11 FY12 FY13E FY14EFY08 FY09 FY10 FY11 FY12 FY13E FY14E

Avg yield on adv Avg Cost of Loan Funds NIM (Calculated)


Business/Employee (Rs Cr) Profit/Employee (Rs. Lakh)

145 145 16010023 225

Strong Business per BranchLowest Operating Cost in the industry

87.5

82 89 95

115130

80

120

60

80

23.222.0 22.1

19.7 19.5 19.5 19.1 18.4

10

15

20

25

43.3 48.7 50.3 53.460.9

68.8

0

40

20

40

FY08 FY09 FY10 FY11 FY12 FY13E FY14E0

5

10


11


Business/Branch (Rs. Cr)Operating Cost as % of Net Income

Best in Class Return Ratios

23.9 24.528.4

31.434.2 33.2

35.1

4.0

5.0

30.0

40.0

Return ratios to remain healthy We expect Gruh Finance to report strong earnings over the next 3years aided by solid loan book growth, stable NIMs and loweroperating expenses.

Consistent improvement in profit metrics is a reflection of strongtraction in margins and tight control by the management over

2.5 2.32.7

3.1 3.2 3.0 3.2

1.0

2.0

3.0

10.0

20.0


traction in margins and tight control by the management overoperating and credit costs.

ROE has improved from 24% in FY07 to 34% in FY12 while ROA hasexpanded from 2.2% to 3.1% during this period.

These best-in-class financial metrics reflect management quality and

ROE (%) ROA (%) [RHS]

RoA (%)

These best-in-class financial metrics reflect management quality andHDFC’s philosophy, which is centered on achieving healthy metricswithout taking undue risks and compromising on balance sheetquality.

Gruh Finance has always been gradual in expanding its branchnetwork We expect the company to add 15 branches and 60

1.6

3.25

1.6

LIC Housing

GIC Housing

Dewan Housingnetwork. We expect the company to add 15 branches and 60employees every year.

The company is likely to witness steady improvement in operationalefficiency over FY12-14.

Productivity ratios such as business per branch business per

3.2

2.9

0 0 5 1 1 5 2 2 5 3 3 5

GRUH Finance

HDFC

Productivity ratios such as business per branch, business peremployee and profit per employee too would continue its steadygrowth path demonstrated over last 5 years.

Consequently, return ratios would remain attractive.

12


0 0.5 1 1.5 2 2.5 3 3.5

Stable Borrowing Mix

Borrowing Profile - Tenure

Short Term6.07%

GRUH Finance enjoys a stable and diversified funding profile, which iswell supported by its parentage.

Apart from conventional bank borrowings and re-finance facilitiesfrom NHB, the company has regularly tapped other financing sourcessuch as NCDs commercial paper and public deposits

Long Term 93.93%

such as NCDs, commercial paper and public deposits.

In the last few years, GRUH has reduced its reliance on bankborrowings in favor of facilities from NHB. The proportion of bankborrowings in total funding mix declined from 52.5% in FY07 to 34%in FY12.

Source of Borrowing

Public Deposits

Moreover, the share of loans from NHB has increased from 17.4% to49.0% during this period.

The change in composition of the borrowing mix will help in drasticallybringing down the borrowing cost for the NBFC and hence aid the

National Housing Bank

49.40%

Subordinated Debt

1.04%

Public Deposits 11.88% NCD

3.70%

g g gcompany in maintaining its robust margins in the years to follow.

Promoter backing ensures that GRUH is comfortably placed in termsof its financing requirements from both commercial banks and marketinstruments. Re-financing facilities from NHB provide further comfort.

Banks 33.98%

GRUH’s strong credit ratings (AA+ - ICRA; AA+ - CRISIL), along withdemonstrated support from the parent HDFC Ltd., enables it to raisefunds at competitive rates.

GRUH predominantly lends on floating rates (~99% of loan book is onfloating basis) which provides a significant leeway in passing on

13


floating basis), which provides a significant leeway in passing oninterest rate hikes to customers and hence, mitigates interest raterisks.

Valuation and Risk Factors

8x

11x

14x

200

300

400Gruh Finance- P/BV band Valuation

The stock trades at premium valuation of 8x FY13E and 6.3x FY14EP/ABV. Due to consistent growth prospects, stable performance,healthy margins and well managed asset quality, we believe that thestock would continue to trade at a premium multiplier.

2x

5x

0

100

200

0070

4

0080

4

0090

4

0100

4

0110

4

0120

4

0130

1

Gruh Finance’s operating performance in last 2 years has been quiteremarkable delivering the best return ratios in the industry.

The company has outperformed its parent company HDFC onparameters like return ratios and loan growth.

8

20 20 20 20 20 20

Monthly Price

20

Gruh Finance-12mth fwd P/B (x)

We have valued the stock at 8x FY14E P/ABV which gives us the pricetarget of Rs. 266 reflecting an upside of 22% to CMP.

We expect the company’s loan book to witness healthy CAGR of 24%during FY12-14 with steady NIMs at ~5%.

We initiate coverage with a BUY rating on the stock.

2

4

6

We initiate coverage with a BUY rating on the stock.

Any unfavorable change in policies such as cost of refinancing by NHBwould adversely affect rural demand leading to rise in NPAs.

The stock currently trades at premium valuation on account of best in

Risk Factors

0

2

Ap

r-0

7

Ap

r-0

8

Ap

r-0

9

Ap

r-1

0

Ap

r-1

1

Ap

r-1

2

Jan-

13

y pclass NIMs. Any increase in funding costs may adversely impact NIMsand hence reduce the target multiple.

Sharp deterioration in asset quality

Sharp slowdown in loan growth

14

Gruh F inance Mean +1 STDDEV -1 STDDEV


Regulatory developments which may enhance the competitivepressure in the housing finance market

Company Financials

Profit & Loss (Rs cr) Key Ratios (%)

Y/E March FY11 FY12 FY13E FY14E

Interest Earned (A) 346 491 647 812


Valuations

Interest Expended 201 309 434 548

Net Interest Income 145 182 213 264

Non-Interest Income (B) 15 23 27 32

- Sale of Investments 1 6 6 6

EPS (Rs.) 5 7 8 9

ROA 3.1 3.2 2.9 2.8

ROE 31.4 34.2 31.5 31.2

BV (Rs.) 18 22 27 33

Adj. BV (Rs.) 18 22 27 33

- Other income 14 17 21 27

Net Total Income 159 205 240 296

Total Income (A+B) 360 514 674 844

Operating Expenses 31 40 47 59

j ( )

Yields & Margins

Average Yield on Advances 11.9 13.1 13.5 13.7

Average Cost of Borrowing 7.6 9.1 8.5 9.0

Operating Expenses 31 40 47 59

- Staff Costs 16 20 25 31

Operating Profit 127 159 187 232

Profit including extraordinary income

128 165 193 238

NIM 5.1 5.0 4.6 4.6

Asset Quality

Net NPAs (Rs. Cr) 0.0 0.0 0.0 0.0

Net NPAs (%) 0.0 0.0 0.0 0.0Provisions 3 2 6 9

Profit after Provisions 126 163 187 229

Tax 34 42 52 64

PAT 92 120 135 165

Net NPAs (%) 0.0 0.0 0.0 0.0

Provisioning Coverage (%) 100 100 100 100

Capital

Others

Operating Cost as % of Net Income 20 20 20 20

15

Source: Company, Axis Capital

…Company Financials

Balance Shet (Rs cr)


Capital 35 35 35 35

Reserves and Surplus 283 350 435 551

Networth 318 386 471 586

Borrowings 2,966 3,837 4,719 5,899

Total Liabilities 3,284 4,222 5,190 6,485

A tAssets

Cash with RBI and Call Money 51 97 70 70

Investments 35 24 31 38

Advances 3,177 4,077 5,064 6,350

Fixed Assets 12 12 13 15 Fixed Assets 12 12 13 15

Other Assets 9 12 12 12

Total Assets 3,284 4,222 5,190 6,485

Growth (%)

Growth in NII 25 26 17 24

Growth in Net profit 33 32 12 22

Growth in borrowings 28 29 23 25

Growth in advances 29 28 27 27

16

Growth in investment 6 -30 25 25

Source: Company, Axis Capital

Axis Securities Limited *Regd Office: Axis House, C2, Wadia International Centre, P.B Marg, Worli, Mumbai 400 025, India.

Corporate Office: 201-A Laxmi Towers, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051 (+91-22) 6680 3600 Axis Securities Limited Branch Details

Mumbai201-A Laxmi Towers, Bandra-Kurla Complex,

BangaloreUnit No.10/3, Ground Floor, Empire Infantry, , p ,

Bandra (E), Mumbai - 400 051 (+91-22) 6680 3600

/ , , p y,29 Infantry Road, Bangalore – 560 001

(+91-80) 4033 3200 - 212BarodaGF 9 Silverline, Sayajiganj, – 390 005

(+91-265) 302 6945

Chennai11 Vijay Delux Apts., 7/4 First CIT Colony, Mylapore, Chennai– 600 004

(+91-44) 3918 4228 / 3989 3626Delhi

81 & 816

Hyderabad21 CUnit No. 815 & 816, Ambadeep Building,

Kasturba Gandhi Marg, New Delhi - 110001 (+91-11) 9818263885

217 B Maheshwari ChambersSomajiguda, – 500 082

(+91-40) 3065 8501

Indore320 City Centre, 570, M.G. Road, Indore (M.P.) - 452 001

(+91-0731) 3916601

KolkataOm Towers, 4th Floor, 401, 32 Chowringhee RoadKolkata – 700 071

(+91-33) 4005 6201( )Pune (Shivajinagar)1248 A , Goodluck Chowk Gymkhana, Shivajinagar, Pune – 411 004

(+91-20) 3054 7125

RajkotToral Building, Office no 308, 3rd Floor, Near Galaxy Hotel, – 360001

(+91-281) 3200170

Website: www.axissecurities.in ● Email: [email protected] document has been prepared by AXIS Securities Ltd * – Privileged Client Group. Affiliates of AXIS Securities Ltd * focused on Institutional Equities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in thisreport. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating and target price of the Affiliates research report.

Th i d / d ti d i thi t b d T h i l A l i t h i d ld b t i ith th ’ / ’ i b d f d t l hThe views expressed / recommendations made in this report are based on Technical Analysis techniques and could be at variance with the company’s / group’s views based on fundamental research.

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Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its ownadvisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions ‐including those involving futures, options and other derivatives as well as non investment grade securities ‐involve substantial risk and are not suitable for all investors.

AXIS Se u itie Ltd * ha ot i depe de tly e ified all the i fo atio i e i thi do u e t A o di ly o ep e e tatio o a a ty e p e o i plied i ade a to the a u a y o plete e o fai e of the i fo atio a d opi io o tai ed i thi do u e tAXIS Securities Ltd * has not independently verified all the information given in this document. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document.

The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Companyreserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval.

AXIS Securities Ltd *, its affiliates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investmentbanking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting thedocument.

This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of AXIS Securities Ltd *. The views expressed are those of the analyst and the Company may or may not subscribe to all the viewsexpressed therein.

This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. Neither this document nor any copy of it may be takenor transmitted into the United State (to U S Persons) Canada or Japan or distributed directly or indirectly in the United States or Canada or distributed or redistributed in Japan or to any resident thereof

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or transmitted into the United State (to U.S. Persons), Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in Japan or to any resident thereof.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation orwhich would subject AXIS Securities Ltd * to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document maycome are required to inform themselves of and to observe such restriction.

Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.

Copyright in this document vests exclusively with AXIS Securities Ltd *.* The name of the company has changed to Axis Securities Limited in the records of Registrar of Companies, Mumbai. Awaiting approval for change of name from Exchanges and SEBI.

Disclaimer of Axis Capital Limited:The document has been prepared by Axis Securities Limited (formerly Enam Securities Direct Private Limited) (the company). Axis Capital Limited (hereinafter referred to as ʺACLʺ) has been permitted by the company to use the same and circulate it to its clients. This documentis not, and should not be construed, as an offer to sell or solicitation to buy any securities in any jurisdiction. This document may not be reproduced, distributed or published, in whole or in part, without prior permission from the Company. ACL does not guarantee that thedocument is complete or accurate and it should not be relied on as such. Investors should make his/her own research, analysis and investigation as he/she deems fit and reliable to come at an independent evaluation of an investment (including the merits, demerits and risksinvolved), and should further take opinion of their own consultants, advisors to determine the advantages and risks of investment. ACL, its affiliates, group companies, directors, employees, agents or representatives shall not be held responsible, liable for any kind ofconsequential damages whether direct, indirect, special or consequential including but not limited to losses, lost revenue, lost profits, notional losses that may arise from or in connection with the use of the information in the document.

Registered office address:Axis House, 8th Floor, Wadia International Center, Pandurang Budhkar Marg, Worli, Mumbai 400 025.SEBI Registration no : NSE (CM)‐INB 231387235, (FO)‐INF 231387235, (CDS)‐INE 231387235,BSE(CM)‐INB 011387330,(FO)‐INF011387330, ARN No. 51485

Main/Dealing office:Solaris,ʺCʺ Bldg., 6th floor, Opp. L&T Gate No. 6, Saki Vihar Road, Powai, Mumbai‐400072, Tel No.‐18001030808,

Compliance Officer Details:Name: Anand Shaha, E‐Mail ID: [email protected],Tel No: 022‐40754152.

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