Prabhat Dairy Ltd BUY -...

Prabhat Dairy Ltd BUY

- 1 - Friday, 14th

October, 2016

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.

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Target Price ` 220 CMP ` 118 FY19E PE 10.7X

Index Details Prabhat Dairy Ltd (Prabhat) has established itself as a preferred

specialty ingredient supplier to top MNC clientele. Its recent shift to

focus on the B2C segment and introduction of a complete portfolio

of dairy products augurs well for the next leg of growth. The strong

outlook of the organized dairy sector and boost in consumption of

VADP is expected to drive the revenues for the company. Moderate

pricing, aggressive A&P spend (1.4% of revenues) and focus on

increasing distribution reach of B2C products is expected to help

build the brand and drive product reach. Over the period FY16-19, we

expect revenues to grow at a CAGR of 18% to Rs 1,924.6 cr while

earnings are expected to grow at a faster clip (63.7% CAGR) to Rs

107.6 cr.

We Initiate coverage on Prabhat Dairy Ltd as a BUY with a price

objective of Rs 220 representing a potential upside of 86% from the

CMP of Rs 118. At the CMP of Rs 118 the stock is trading at 10.7X its

estimated earnings for FY19. We have assigned a PE multiple of 20X

on FY19 EPS of Rs 11 to arrive at the target price.

We are optimistic about the company’s prospects given that:

India’s dairy industry is expected to maintain growth at a CAGR of

approximately 14.9% between 2015 to 2020, to reach a value of Rs

9,397 billion by 2020 from Rs 4,061 billion clocked in FY14.

Share of the high margin VADP (value added dairy products) is

expected to surge to 36% in FY19 from the existing 25%.

Commissioning of its 30 tpd cheese plant (third highest capacity

in India) is expected to be the growth lever for Prabhat going forth.

We expect Prabhat to generate Rs 104.8 crore of revenues from

cheese by FY19.

In order to downsize its dependence on B2B sales, Prabhat is

constantly ramping up its B2C business over the last couple of

years. Through new product launches and higher A&P spend,

Sensex 27,643

Nifty 8,573

Industry Packaged Foods

Scrip Details

MktCap (` cr) 1,153.6

BVPS (`) 65.7

O/s Shares (Cr) 9.77

AvVol 1,45,942

52 Week H/L 167.5/72

Div Yield (%) 0.3

FVPS (`) 10.0

Shareholding Pattern

Shareholders %

Promoters 44.2

Public 55.8

Total 100.0

Prabhat vs. Sensex

50

70

90

110

130

150

170

20000

22000

24000

26000

28000

30000

Sep

-15

Oct-1

5

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Jan

-16

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Mar-1

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Sensex Prabhat

Key Financials (` in Cr)

Y/E Mar Net

Sales EBITDA PAT

EPS

(`)

EPS

Growth (%)

RONW

(%)

ROCE

(%)

P/E

(x)

EV/EBITDA

(x)

2016 1,170.5 119.7 24.5 2.5 -31.0 4.9 9.9 47.0 10.9 2017E 1,414.8 150.0 59.3 6.1 141.7 8.7 12.3 19.4 8.6 2018E 1,659.3 187.5 82.6 8.5 39.4 11.2 15.1 13.9 7.0 2019E 1,924.6 221.3 107.6 11.0 30.3 13.3 16.7 10.7 6.0

- 2 - Friday, 14th

October, 2016


share of B2C business has risen from 11.3% in FY12 to 30% in

FY16 which is expected to scale upto 44% BY FY19.

Prabhat’s strategy of increasing its penetration in tier II and tier III

cities is a step in the right direction since the presence of top dairy

player in these cities is low. With moderate pricing policy Prabhat

is expected to gain market share at a brisk pace in key markets.

Prabhat has clocked highest EBITDA margins in the dairy space.

With steady monsoon and firm availability of milk, we expect

EBITDA margins to take an upswing 130 bps from 10.2% in FY16 to

11.5% in FY19.

- 3 - Friday, 14th

October, 2016


Company Background

Prabhat, incorporated in 1998, is an integrated milk and dairy producer with

aggregate milk processing capacity of 1.5 mn litres per day. Over the years,

the company has diversified into pasteurised milk, flavoured milk, sweetened

condensed milk, ultrapasteurised or ultra-high temperature (UHT) milk,

yoghurt, dairy whitener, clarified butter (ghee), milk powder, ingredients for

baby foods, lassi and chaas. It sells these products under retail consumer

brands as well as ingredient products or as co-manufactured products to a

number of institutional and multinational companies. Prabhat commenced

commercial production of cheese, paneer and shrikhand in FY16.

Prabhat’s strong brand portfolio

Source: Prabhat, Ventura Research

- 4 - Friday, 14th

October, 2016


Key Investment Highlights

Robust sales momentum to continue over FY17-19

Aggressive growth in milk procurement volumes (CAGR 23%) has enabled

Prabhat to grow at robust revenue CAGR of 25% to Rs 1,170 cr over the

period FY12-16. This growth was spearheaded by sales of SMP and

condensed milk products and a higher penetration among institutional

clientele.

Going forth we expect sales to grow at a CAGR of 18% to Rs 1,924.6 cr by FY

19 led by a strong push across new product categories, viz curd, UHT milk,

cheese, panner and shrikhand.

Stepping up the value chain by adding VADP to product arsenal

Prabhat has a impressive list of marquee clients (Mondelez, Heritage,

Britannia, Nestle, Abbot etc) which endorses its manufacturing excellence and

quality assurance. The products primarily supplied to these clients are milk

powder for baby foods and condensed milk.

Post FY13, to reduce its dependence on institutional business and enhance its

B2C business, Prabhat forayed into Value added Dairy Products (VADP) like

Strong sales growth trajectory

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Milk Milk Powders Condensed Milk Butter+Ghee

Curd Ice Cream Flavoured Milk UHT

Cheese Paneer Shrikhand Others

Rs in crore


- 5 - Friday, 14th

October, 2016


ghee, butter and curd. Encouraged by the success of these forays it has now

also introduced paneer, cheese and shrikhand, among others, in FY16.

Capex cycle complete

To support its foray into VADP, the management incurred heavy capex of Rs

273 cr over the period FY14-16. The capex has enhanced capacities for

cheese, paneer and shrikhand which are expected to lift the revenue trajectory

higher going forth.

Entry into cheese paneer and shrikhand key to ramp up the share of

VADP to overall revenues

Cheese: Prabhat, in Q2 FY16, commissioned its 30 tonnes per day (tpd)

cheese plant (third highest capacity in India). The company is currently

targeting the HORECA (hotel, restaurants and cafe) & B2B space which

comprises ~70% of the total cheese consumption in India. This strategy goes

well with management’s blueprint of initially focusing on institutional and B2B

sales, and ultimately launching the same in the B2C segment once the

product gains steady traction. The Cheese segment offers higher gross

margins compared to other dairy products. As the capacity utilization of the

cheese plant gradually increases, it will have a positive impact on the overall

gross margin.

Recently Prabhat received its first export order for the supply of cheddar

cheese to Iraq, while the order is small (~Rs 1 cr), it is significant as it could

open up new revenue streams from geographical expansion.

Surge in gross block driven by aggressive capex in VADP capacity

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

FY12 FY13 FY14 FY15 FY16Gross Block

15%

5%

34%

38%

Rs in crore

Spurt in gross block to drive VADP revenue

growth


- 6 - Friday, 14th

October, 2016


Paneer: In order to increase its product offering, Prabhat commissioned a 5

tpd paneer plant in FY16. The company launched paneer in an attractive

thermoform packaging which has extended its shelf-life from 15 to 21 days.

Dahi: Launched Dahi with no preservatives in Mumbai. Adopted a unique

model for distribution of fresh Dahi for the first time in India under the project

called ‘Raftaar’ which delivers fresh Dahi in chilled vans / mopeds with chilled

carrier boxes to 10,000 grocery shops in Mumbai.

Shrikhand: Prabhat started commercial operations of its newly set up 5 tpd

capacity shrikhand plant in Q1 FY17. Products like Paneer, Dahi, Lassi and

Shrikhand are retailed in Modern Trade shelves like Big Bazaar, Star Bazaar,

Hypercity, D Mart etc which provides abundant brand recall for Prabhat.

On the back of the above product launches we expect the share of VADP in

overall revenues to propel from 25% in FY16 to 36% by FY19.

Product mix in FY16

Milk, 20.7%

Milk Powders, 28.5%

Condensed Milk, 23.0%

Butter+Ghee, 21.0%

Curd, 1.6%

Ice Cream, 1.0%

Flavoured Milk, 0.1%

UHT, 1.0%

Cheese Paneer and Shrikhand,

0.2%Others, 3.0%


Product mix in FY19

Milk, 16.7%

Milk Powders, 23.1%

Condensed Milk, 21.3%

Butter+Ghee, 23.3%

Curd, 2.2%

Ice Cream, 1.3%

Flavoured Milk, 0.3%

UHT, 2.3%

Cheese Paneer and Shrikhand,

7.1% Others, 2.4%


- 7 - Friday, 14th

October, 2016


Transformation in business mix on the back of rising share of B2C

to overall revenues

To curtail its dependence on B2B sales, Prabhat has ramped up its B2C

business over the last couple of years. Through new product launches and

higher A&P spends, the share of B2C business has risen from 11.3% in FY12

to 30% in FY16. The Management’s aspiration is to the grow share of B2C to

50% by FY20 through

1. New product launches

2. Focus on Tier II and III cities

3. Moderate pricing policy

4. Increase in A&P spend

These are expected to be the triggers.

Focus on Tier II and Tier III cities key trigger for ramp up in B2C sales

Prabhat’s strategy of focusing on tier II and tier III cities is a step in the right

direction since the presence of top dairy player in these cities is low. Citing this

business opportunity Prabhat launched various value added products like

ghee, curd, paneer, flavoured milk (Flava) in tier II markets.

Transition in product mix in

Milk, 75%

VADP, 25%

FY16


favour of value added

Milk, 64%

VADP, 36%

FY19

- 8 - Friday, 14th

October, 2016


Moderate pricing to expedite demand

Prabhat’s products are available at moderate prices as compared to peers,

which gives Prabhat products a competitive edge in the market. For instance,

Prabhat’s pure cow milk ghee is available at Rs 420 per kg as compared to

Patanjali (Rs 490 per kg), Parag’s Govardhan (Rs 460 per kg) and Dynamix

(Rs 435 per kg).

Higher A&P spend to bolster brand recall

Traditionally A&P spend have been lower for Prabhat, since the company was

focusing more on institutional business. Post the launch of B2C business in

FY12, the company has increased its A&P spends to 0.8% of its revenues in

FY16.

We expect the A&P spend to rise to 1.4% of revenues by FY19.

Low pricing strategy to help beat competition

Company Brand

Ghee

(per kg)

UHT milk

(per litre)

Paneer

(per 200 gms)

Dynamix Dynamix 435 NA NA

Patanjali Patanjali 490 NA NA

Mother Dairy Mother Dairy 400 NA 70

Parag Gowardhan, GO 460 65 79

Sagar Sagar 402 NA NA

Prabhat Prabhat 420 50 70

Parsi Parsi 740 NA NA

Amul Amul NA 65 72


Jump in A&P spend

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

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10.0

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25.0

30.0

FY15 FY16 FY17 FY18 FY19

A&P Spend As a % of sales (RHS)

Rs in crore


- 9 - Friday, 14th

October, 2016


Ramp up in distribution network to scale up revenues

Prabhat forayed into B2C in 2012 starting with a single state and 5

distributors. Today the company’s distribution network has grown by leaps and

bounds to 650 distributors in FY16 across 12 states. This is expected to

further scale up to 950 distributors by FY19.

1 State

25 Sales Professionals

5 Distributors

11 State

250 Sales Professionals

650 Distributors

55,000+ Retail Points

FY12 FY16

Changeover in business mix visible

0%

10%

20%

30%

40%

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60%

70%

80%

90%

100%

FY15 FY16 FY17 FY18 FY19

B2B B2C


- 10 - Friday, 14th

October, 2016


EBITDA margins set to surge

Despite having a dominant presence in institutional business, Prabhat has

enjoyed the highest EBITDA margins in the dairy space. However due to

drought like conditions over the last two years, average milk procurement

prices shot up. This led to slight pressure on margins which fell from 11.3% in

FY13 to 10.2% in FY16 (reaching a low of 8.5% in Q1 FY17). Nevertheless,

with a steady monsoon, availability of milk will no more be a concern.

We expect EBITDA margins to take an upswing of 130 bps to 11.5% in FY19

led by

1. Increased share of high margin B2C business

2. Increase in capacity utilization across all segments, with blended utilization

rising from 64.3% in FY16 to 88.6% in FY19.

Margin improvement on the cards

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

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100.0

150.0

200.0

250.0


EBITDA(Excl OI) EBITDA Margin (RHS)

Rs in crore


- 11 - Friday, 14th

October, 2016


IPO proceeds to help pare debt

Ahead of its IPO in Septermber 2015, Prabhat had a debt of Rs 412 cr with a

debt to equity of 1.2X. The IPO proceeds of 300 cr and internal accrual helped

Prabhat pare it’s debt by 250 cr in FY16 which lead to an improvement in the

debt to equity ratio to 0.24X in FY16. With major capex complete and cash

flows augmenting, the debt to equity ratio is expected to dip to 0.22X in FY19.

Interest cost to scale down

The Benefit of debt reduction was not visible in FY16 since the IPO proceeds

were received in Q3 and debt reduction accrued in the last quarter.

Steady solvency ratios going forth

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9.00

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450.0


Total Debt Debt to Equity (RHS) Interest Coverage (RHS)

Rs in crore no of days


Downturn in finance cost

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5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0


Rs in crore


- 12 - Friday, 14th

October, 2016


Financial Performance

Prabhat reported a mixed set of numbers for Q1 FY17. Consolidated revenues

grew 9% YoY to Rs 293.1 cr in Q1 FY17 mainly driven by the growth in the

B2C business. However EBITDA margins took a hit of 150 bps from 10% in

Q1 FY16 to 8.5% in Q1 FY17 due to

1. higher milk prices (Rs 25.72 from Rs 18.2) and increased milk

procurement efforts

2. Higher employee expenses as the new Cheese, Paneer and Shrikhand

facilities were commissioned

3. Increase in business promotion expenses for B2C sales

PAT jumped 65.4% from Rs 3.7 in Q1 FY16 to Rs 6.1 cr in Q1 FY17 owing to

a slump in finance cost which fell from Rs 13.2 cr in Q1 FY16 to Rs 7.1 cr in

Q1 FY17.

In FY16, the company’s net sales stood at Rs 1,170.5 cr registering a growth

of 16.7% YoY. EBITDA gained 15.2% YoY to Rs 119.2 cr in FY16 against Rs

103.5 crore in FY15. EBITDA margins dropped 10 bps to 10.2% as compared

to 10.3% YoY. Profit after tax fell 5.6% YoY to Rs 24.5 cr due to a 5 fold jump

in provision for tax.

Quarterly Financial Performance (Rs crores)

Description Q1FY17 Q1FY16 FY16 FY15

Net Sales 293.1 268.9 1,170.5 1,003.4

Growth (%) 9.0 16.7

Total expenditure 268.3 241.9 1,051.3 899.9

EBITDA 24.8 27.0 119.2 103.5

Margin (%) 8.5 10.0 10.2 10.3

Depreciation 10.4 8.2 39.9 34.4

EBIT (Ex. OI) 14.4 18.8 79.3 69.1

Non-Operating Income 0.2 0.5 1.5 1.0

EBIT 14.6 19.3 80.8 70.1

Margin (%) 5.0 7.2 6.9 7.0

Finance Cost 7.1 13.2 42.7 41.2

Exceptional Items - - - -

PBT 7.5 6.1 38.1 28.9

Margin (%) 2.5 2.3 3.3 2.9

Provision for Tax 1.4 2.4 13.6 2.9

Profit after Tax 6.1 3.7 24.5 26.0

Margin (%) 2.1 1.4 2.1 2.6


- 13 - Friday, 14th

October, 2016


Financial Outlook

The revenue growth trajectory is expected to continue going forward as

Prabhat is boosting its penetration in the B2C business across newer

territories. We expect the brisk pace of growth to be sustained, albeit at a

slightly lower CAGR of 18% to Rs 1,924.6 cr by FY19 mainly driven by strong

presence in the institutional business, new product launches and rising

penetration of VADP products. Consolidated net earnings are expected to

grow at a swift CAGR of 64% from 24.5 crore in FY16 to Rs 107.6 cr in FY19.

The EBITDA and PAT margin are expected to reach to 11.6% and 5.6%

respectively.

Revenue growth trajectory to continue

0%

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6%

8%

10%

12%

14%

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000


Net Sales EBITDA Margin PAT margin

Rs in crore


Return ratios set to improve

4%

6%

8%

10%

12%

14%

16%

18%


RoCE RoE


Steady working capital cycle

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20.0

30.0

40.0

50.0

60.0

70.0

80.0


Credit Days Inventory days Debtor Days

no of days


- 14 - Friday, 14th

October, 2016


Valuation

We initiate coverage on Prabhat Dairy Ltd as a BUY with a price objective of

Rs 220 representing a potential upside of 86% from the CMP of Rs 118. At the

CMP of Rs 118 the stock is trading at 10.7X its estimated earnings for FY19.

We have assigned a PE multiple of 20X on FY19 EPS of Rs 11 to arrive at the

target price. Despite the low RoE we are assigning a high PE multiple given

the

High earnings growth of 63.7% CAGR over FY16-19

Transition in product mix towards high margin VADP brand portfolio

Margins is expected to regain to 11.6% (Best in class) from 10.2% in

FY16

Substantial reduction in debt is expected to pare interest cost

(* Although we have projections till FY19, we have considered 2 yrs data in the chart for data

symmetry)

Prabhat looks attractively poised*

Heritage

Kwality

Hatsun

ParagPrabhat

10%

15%

20%

25%

30%

35%

40%

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

2 yr Fwd RoE

2 Yr Fwd PEG ratio


- 15 - Friday, 14th

October, 2016


Financials and Projections

Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E

Profit & Loss Statement Per Share Data (Rs)

Net Sales 1170.5 1414.8 1659.3 1924.6 Adj. EPS 2.5 6.1 8.5 11.0

% Chg. 20.9 17.3 16.0 Cash EPS 6.6 10.7 13.3 16.1

Total Expenditure 1051.3 1264.9 1471.8 1703.2 DPS 0.4 1.0 1.4 1.8

% Chg. 20.3 16.4 15.7 Book Value 65.7 71.9 78.7 87.5

EBDITA 119.2 150.0 187.5 221.3 Capital, Liquidity, Returns Ratio

EBDITA Margin % 10.2 10.6 11.3 11.5 Debt / Equity (x) 0.2 0.2 0.2 0.2

Other Income 1.5 1.4 1.7 1.9 Current Ratio (x) 2.1 2.2 2.2 2.3

PBDIT 120.7 151.4 189.2 223.3 ROE (%) 4.9 8.7 11.2 13.3

Depreciation 39.9 45.1 47.2 49.4 ROCE (%) 9.9 6.5 12.5 16.3

Interest 42.7 19.6 19.9 20.4 Dividend Yield (%) 0.3 0.8 1.1 1.4

Exceptional items 0.0 0.0 0.0 0.0 Valuation Ratio (x)

PBT 38.1 86.7 122.0 153.5 P/E 47.0 19.4 14.0 10.7

Tax Provisions 13.6 27.4 39.4 45.9 P/BV 1.9 1.7 1.6 1.4

Reported PAT 24.5 59.3 82.6 107.6 EV/Sales 1.1 0.9 0.8 0.7

Minority Interest 0.0 0.0 0.0 0.0 EV/EBIDTA 10.9 8.6 7.0 6.0

PAT 24.5 59.3 82.6 107.6 Efficiency Ratio (x)

PAT Margin (%) 2.1 4.2 5.0 5.6 Inventory (days) 27.4 28.5 36.5 43.8

Other opr Exp / Sales (%) 0.0 0.0 0.0 0.0 Debtors (days) 70.6 72.3 73.7 74.8

Tax Rate (%) 35.7 31.6 32.3 29.9 Creditors (days) 19.8 17.7 19.9 21.8

Balance Sheet Cash Flow Statement

Share Capital 97.7 97.7 97.7 97.7 Profit Before Tax 38.1 86.7 122.0 153.5

Reserves & Surplus 557.2 604.7 670.8 757.2 Depreciation 39.9 45.1 47.2 49.4

Minority Interest 0.0 0.0 0.0 0.0 Working Capital Changes -76.9 -68.7 -109.8 -118.3

Long Term Borrowings 38.8 33.8 28.8 25.8 Others 27.6 -6.4 -15.5 -24.1

Deferred Tax Liability 23.6 25.1 29.1 30.4 Operating Cash Flow 28.7 56.6 44.0 60.4

Other Non Current Liabilities 1.4 1.7 2.0 2.3 Capital Expenditure -32.2 -20.5 -22.0 -33.0

Total Liabilities 718.8 762.9 828.4 913.5 Other Investment Activities 7.9 0.4 0.4 0.4

Gross Block 591.5 626.5 646.5 676.5 Cash Flow from Investing -24.3 -20.1 -21.6 -32.6

Less: Acc. Depreciation -161.7 -206.8 -254.0 -303.4 Changes in Share Capital 300.0 0.0 0.0 0.0

Net Block 429.7 419.6 392.4 373.1 Changes in Borrowings -253.2 5.0 10.0 12.0

Capital Work in Progress 24.5 10.0 12.0 15.0 Dividend and Interest -59.8 -31.4 -36.4 -41.6

Non Current Investments 0.1 0.1 0.1 0.1 Cash Flow from Financing -13.0 -26.4 -26.4 -29.6

Net Current Assets 217.3 274.9 351.9 436.3 Net Change in Cash -8.6 10.2 -4.0 -1.8

Long term Loans & Advances 47.2 58.3 72.0 89.0 Opening Cash Balance 20.2 11.7 21.8 17.8

Total Assets 718.8 762.9 828.4 913.5 Closing Cash Balance 11.6 21.8 17.8 16.0

- 16 - Friday, 14th

October, 2016


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The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. We do not provide tax advice to our clients, and all investors are strongly advised to consult regarding any potential investment. VSL, the RA involved in the preparation of this research report and its associates accept no liabilities for any loss or damage of any kind arising out of the use of this report. This report/document has been prepared by VSL, based upon information available to the public and sources, believed to be reliable. No representation or warranty, express or implied is made that it is accurate or complete. VSL has reviewed the report and, in so far as it includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject to change without notice and have no obligation to tell you when opinions or information in this report change. This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the public media without the express written consent of VSL. This report or any portion hereof may not be printed, sold or distributed without the written consent of VSL. This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to the press or other media and may not be reproduced or redistributed to any other person. The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions, estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by Securities and Exchange Board of India before investing in Securities Market. Ventura Securities Limited

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