first call 11nov21

12
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited Petronet LNG - Result Update - Modest quarter; sustenance in question Petronet LNG (PLNG) reported Q2FY22 EBITDA of INR12.9bn (-4.9% YoY, +23% QoQ) ahead of our estimate due to high marketing margin (2x YoY), partially offset by modest volumes (-5.5% YoY). J Kumar Infraprojects - Result Update - Healthy performance J Kumar Infraprojects (JKIL) posted a 62% YoY jump in Q2FY22 top line (up 14% QoQ) as execution recovered post the second wave. EBITDA margin rose ~100bp YoY to 14.3% resulting in a PAT surge of 478% YoY (28% QoQ). Order book declined sequentially to INR112bn (~3.4x TTM revenue). The company has won/emerged L1 in ~INR2.7bn projects during Q3FY22. V-Mart Retail - Result Update - Good showing; inflation overhang V-Mart Retail (VMart) reported impressive revenue/SSSG recovery of 100%/85% (of Q2FY20). Including Unlimited (consolidated for Sep-21), revenue recovery stood at 108%. The pace of store expansion improved: VMart added 12 (excluding Unlimited). The company also took price hikes to mitigate the impact of recent inflation. Bank of Baroda - Result Update - Core soft; momentum build-up key Bank of Baroda (BoB) posted Q2FY22 PAT of INR20.9bn topping estimates on lower credit cost and higher other income even as core was soft. Slippages were elevated driven by a corporate account (already known), but otherwise lower across segments. Business momentum remained soft; this with lower NIMs impacted core profit. Max Financial - Result Update - Steady showing; growth resumption in H2 Max Financial Services (MFS; Max Life Insurance’s holding company) posted an 11% YoY uptick in APE to INR12.8bn for Q2FY22, below private industry growth. Its market share thus dipped to 10% within private industry. By business mix, participating products posted robust growth while sales of individual protection lagged due to supply-side challenges. Non-par savings and ULIPs posted marginal growth YoY. Hence, VNB margin improved 110bps YoY to 25.3%. India Equity Research November 11, 2021 FIRST CALL DAILY REPORT Edelweiss Research +91 22 4009 4400 [email protected] Sectoral Movements %Change Ticker 10-Nov-21 1 D 1 M 3 M 1 Y Nifty 18,044 -0.1 0.8 10.8 42.9 Banking 44,945 -0.3 4.5 9.4 37.2 IT 35,815 0.1 -1.6 12.9 70.7 Pharmaceuticals 25,301 0.5 -3.4 -4.0 33.7 Oil 18,985 0.9 0.1 22.9 48.4 Power 3,520 0.3 7.0 35.1 93.7 Auto 26,342 1.0 5.9 15.5 44.0 Metals 20,498 -0.9 0.9 1.2 129.0 Real Estate 4,425 0.0 6.9 41.2 138.4 FMCG 14,256 -0.3 -3.1 5.0 26.5 Capital Goods 28,833 1.1 9.5 23.2 86.7 MARKETS Change in % 10-Nov-21 1D 1M 1Y Nifty 50 18,044 -0.1 0.8 42.9 Nifty 200 9,602 0.1 1.1 48.2 Nifty 500 15,542 0.1 1.2 51.3 INDIA STOCK PERFORMANCE GLOBAL 10-Nov-21 1D 1M 1Y Dow 36,320 -0.3 4.5 23.4 China 3,483 -0.7 -3.0 3.7 EM Index 1,273 0.3 1.3 7.9 UPCOMING EVENTS CALENDER MACRO Change in % 10-Nov-21 1D 1M 1Y Fx (INR/USD) 74.0 0.0 1.8 0.2 !0-yr G-sec 6.3 -0.1 -0.4 7.1 Oil (USD) 85.4 0.8 3.7 95.9 Explore: Sales Traders Says Currency Conversations Bond Vectors Valuation Vista 40,000 49,000 58,000 67,000 76,000 85,000 7,000 9,800 12,600 15,400 18,200 21,000 Nov 20 Feb 21 May 21 Aug 21 (x) (x) Nifty Index MSCI EM Index - Local Currency (RHS) Event Date Affle India Results 12-11-21 Balkrishna Industries Results 12-11-21 Natco pharma Results 12-11-21 Bharat forge Results 12-11-21

Upload: others

Post on 23-Feb-2022

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

Petronet LNG - Result Update - Modest quarter; sustenance in question Petronet LNG (PLNG) reported Q2FY22 EBITDA of INR12.9bn (-4.9% YoY, +23% QoQ)

ahead of our estimate due to high marketing margin (2x YoY), partially offset by

modest volumes (-5.5% YoY).

J Kumar Infraprojects - Result Update - Healthy performance J Kumar Infraprojects (JKIL) posted a 62% YoY jump in Q2FY22 top line (up 14% QoQ)

as execution recovered post the second wave. EBITDA margin rose ~100bp YoY to

14.3% resulting in a PAT surge of 478% YoY (28% QoQ). Order book declined

sequentially to INR112bn (~3.4x TTM revenue). The company has won/emerged L1

in ~INR2.7bn projects during Q3FY22.

V-Mart Retail - Result Update - Good showing; inflation overhang V-Mart Retail (VMart) reported impressive revenue/SSSG recovery of 100%/85% (of

Q2FY20). Including Unlimited (consolidated for Sep-21), revenue recovery stood at

108%. The pace of store expansion improved: VMart added 12 (excluding

Unlimited). The company also took price hikes to mitigate the impact of recent

inflation.

Bank of Baroda - Result Update - Core soft; momentum build-up key Bank of Baroda (BoB) posted Q2FY22 PAT of INR20.9bn topping estimates on lower

credit cost and higher other income even as core was soft. Slippages were elevated

driven by a corporate account (already known), but otherwise lower across

segments. Business momentum remained soft; this with lower NIMs impacted core

profit.

Max Financial - Result Update - Steady showing; growth resumption in H2 Max Financial Services (MFS; Max Life Insurance’s holding company) posted an 11%

YoY uptick in APE to INR12.8bn for Q2FY22, below private industry growth. Its

market share thus dipped to 10% within private industry. By business mix,

participating products posted robust growth while sales of individual protection

lagged due to supply-side challenges. Non-par savings and ULIPs posted marginal

growth YoY. Hence, VNB margin improved 110bps YoY to 25.3%.

India Equity Research November 11, 2021

FIRST CALL DAILY REPORT

Edelweiss Research +91 22 4009 4400 [email protected]

Sectoral Movements %Change Ticker 10-Nov-21 1 D 1 M 3 M 1 Y

Nifty 18,044 -0.1 0.8 10.8 42.9

Banking 44,945 -0.3 4.5 9.4 37.2

IT 35,815 0.1 -1.6 12.9 70.7

Pharmaceuticals 25,301 0.5 -3.4 -4.0 33.7

Oil 18,985 0.9 0.1 22.9 48.4

Power 3,520 0.3 7.0 35.1 93.7

Auto 26,342 1.0 5.9 15.5 44.0

Metals 20,498 -0.9 0.9 1.2 129.0

Real Estate 4,425 0.0 6.9 41.2 138.4

FMCG 14,256 -0.3 -3.1 5.0 26.5

Capital Goods 28,833 1.1 9.5 23.2 86.7

MARKETS Change in % 10-Nov-21 1D 1M 1Y

Nifty 50 18,044 -0.1 0.8 42.9 Nifty 200 9,602 0.1 1.1 48.2 Nifty 500 15,542 0.1 1.2 51.3

INDIA STOCK PERFORMANCE

GLOBAL 10-Nov-21 1D 1M 1Y

Dow 36,320 -0.3 4.5 23.4

China 3,483 -0.7 -3.0 3.7

EM Index 1,273 0.3 1.3 7.9

UPCOMING EVENTS CALENDER

MACRO Change in %

10-Nov-21 1D 1M 1Y

Fx (INR/USD)

74.0 0.0 1.8 0.2

!0-yr G-sec 6.3 -0.1 -0.4 7.1 Oil (USD) 85.4 0.8 3.7 95.9

Explore:

Sales Traders Says Currency Conversations

Bond Vectors Valuation Vista

40,000

49,000

58,000

67,000

76,000

85,000

7,000

9,800

12,600

15,400

18,200

21,000

Nov 20 Feb 21 May 21 Aug 21

(x)

(x)

Nifty Index MSCI EM Index - Local Currency (RHS)

EventDate

Affle India Results12-11-21

Balkrishna Industries Results12-11-21

Natco pharma Results12-11-21

Bharat forge Results12-11-21

Page 2: First Call 11Nov21

FIRST CALL

Edelweiss Securities Limited

2 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset

India Cements - Result Update - Subdued quarter; debt concerns persist India Cements (ICEM) posted Q2FY22 EBITDA of INR1.3bn (down 43% YoY/18%

QoQ), missing our estimate by 15% (and consensus by 12%). Realisation led the

disappointment, falling >4% QoQ (versus our expectation of a 2.5% drop) even as

volumes and overall costs came broadly in line. Factoring in H1FY22 performance as

well as rising fuel cost, we are cutting FY22E EBITDA by ~10%, but maintaining

FY23E’s.

Firstsource Solutions - Result Update - Revenue misses; margin beats

estimates Firstsource reported revenue growth of 20.3% YoY to USD193mn, missing our

estimate of USD206mn as well as Street’s forecast of USD199mn. EBIT margin came

in at 12.5%, higher than our estimate of 11.7% and Street’s 11.8%. Net profit at

INR1.35bn beat our estimate, but came in line with Street’s.

EPL Ltd - Result Update - Sales intact; margin under pressure

EPL (erstwhile Essel Propack) reported in-line sales with 13% YoY growth in Q2FY22.

All regions barring Europe clocked growth, while Europe continued seeing a dip

owing to softness in the personal care portfolio. Raw material price volatility and

higher freight costs resulted in a 4% YoY dip in EBITDA (10% below estimate).

Page 3: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating HOLD Sector relative Neutral Price (INR) 236 12 month price target (INR) 248 Market cap (INR bn/USD bn) 353/4.8 Free float/Foreign ownership (%) 50.0/28.1

What’s Changed

Target Price ⚊

Rating/Risk Rating ⚊

QUICK TAKE

Above In line Below

Profit

Margins

Revenue Growth

Overall

Modest quarter; sustenance in question

Petronet LNG (PLNG) reported Q2FY22 EBITDA of INR12.9bn (-4.9% YoY, +23% QoQ) ahead of our estimate due to high marketing margin (2x YoY), partially offset by modest volumes (-5.5% YoY).

Takeaways: i) The Dahej terminal clocked modest utilisation of 99%. Management refrained from giving H2 guidance given high and

volatile spot LNG prices. Recent start of the Kochi-Mangalore pipeline will lift the Kochi terminal utilisation to 35% by FY22-end and to 60% by FY24, once the Bangalore leg is connected. ii) We perceive risk to 5% p.a. tariff hike as 15-20mtpa of upcoming new LNG capacities are nearly 2x of demand growth. iii) PLNG plans a foray into LNG retailing–1,000 outlets by FY25 at high capex of INR80bn—a long-haul prospect.

FINANCIALS (INR mn)

Year to March FY21A FY22E FY23E FY24E

Revenue 2,60,229 2,91,369 3,39,513 3,86,124

EBITDA 46,995 54,654 65,205 72,516

Adjusted profit 29,494 35,634 42,351 46,646

Diluted EPS (INR) 19.7 23.8 28.2 31.1

EPS growth (%) 5.9 20.8 18.8 10.1

RoAE (%) 26.1 28.1 28.1 29.0

P/E (x) 12.0 9.9 8.3 7.6

EV/EBITDA (x) 6.3 5.2 4.4 3.3

Dividend yield (%) 1.5 1.3 1.6 1.8

PRICE PERFORMANCE

Volume momentum would take time to gather steam amid high spot

Modest volumes at 4.6MMT (-5.5% YoY, 14.8% QoQ) were primarily a result of high

spot LNG prices, which jumped ~5x YoY, and covid-led restrictions. Notably, spot LNG

prices are now ~50% higher QoQ at ~USD30/mmbtu, which would keep a check on

volumes in 2HFY22 as well. While spot LNG prices remained high, PLNG earned a

higher marketing margin of USD6.9/mmbtu (~2x YoY). Dahej volume fell 7.4% YoY

led by a modest terminal utilisation of 99%, but Kochi volumes rose 36% YoY with a

terminal utilisation of 23%.

Aggressive expansion target; execution awaited

Management expects Dahej expansion to 20mtpa by FY24 and to 22.5mtpa by FY27.

Kochi sales likely to double to peak utilisation of 35% once customers fully offtake

gas along the recently commissioned Kochi-Mangalore pipeline. The Kochi-

Bangalore pipeline, when fully commissioned (by FY24), will increase Kochi’s

utilisation to ~60%. It is also in the process of adding two tanks at Dahej at INR12bn

and a jetty at INR17bn by FY25, which will be value-accretive. The company has tied

up with Gujarat Gas to set up five LNG stations between Mumbai and Delhi

highways. Besides, it has set up four LNG stations with IOC and one each with IGL

and Sabarmati Gas. PLNG declared a special interim dividend of INR7/share.

Explore:

Outlook and valuation: Risk-reward priced in; maintain ‘HOLD’

We continue to believe there is limited scope for further sharp tariff hikes in the long

term given significant upcoming LNG capacity. Meanwhile, PLNG enjoys net cash

position along with strong OCF/ FCF. We maintain ‘HOLD/SN’ with an unchanged

TP of INR248 at 8.3x FY23E PER.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 1,08,131 62,358 73.4 85,979 25.8

EBITDA 12,969 13,632 (4.9) 10,543 23.0

Adjusted Profit 8,230 9,273 (11.2) 6,357 29.5

Diluted EPS (INR) 5.5 6.2 (11.2) 4.2 29.5

42,000

46,000

50,000

54,000

58,000

62,000

200

215

230

245

260

275

Nov-20 Feb-21 May-21 Aug-21 Nov-21

PLNG IN Equity Sensex

India Equity Research Oil & Gas November 10, 2021

PETRONET LNG RESULT UPDATE

Jal Irani Shubham Mittal Iqbal Khan +91 (22) 6620 3087 +91 (22) 4063 5459 [email protected] [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 4: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Neutral Price (INR) 183 12 month price target (INR) 256 Market cap (INR bn/USD bn) 14/0.2 Free float/Foreign ownership (%) 54.7/8.2

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Healthy performance

J Kumar Infraprojects (JKIL) posted a 62% YoY jump in Q2FY22 top line (up 14% QoQ) as execution recovered post the second wave. EBITDA margin rose ~100bp YoY to 14.3% resulting in a PAT surge of 478% YoY (28% QoQ). Order book declined sequentially to INR112bn (~3.4x TTM revenue). The company has won/emerged L1 in ~INR2.7bn projects during Q3FY22.

Robust opportunities in the metro rail segment (refer to INFRA SCAPE' - Metrolution: No signs of abating) bode well for JKIL. We believe order intake will be the key stock driver going ahead. Retain ‘BUY’ with a revised TP of INR256 (INR251 earlier) while rolling forward the valuation to Mar-23E.

FINANCIALS (INR mn)

Year to March FY20A FY21E FY22E FY23E

Revenue 29,705 25,708 33,621 35,900

EBITDA 4,289 3,114 4,829 5,371

Adjusted profit 1,836 639 1,818 2,155

Diluted EPS (INR) 24.3 8.4 24.0 28.5

EPS growth (%) 3.7 (65.2) 184.5 18.5

RoAE (%) 10.5 3.4 9.4 10.3

P/E (x) 7.5 21.6 7.6 6.4

EV/EBITDA (x) 3.6 4.2 3.1 2.6

Dividend yield (%) 0.7 0.5 0.7 0.7

PRICE PERFORMANCE

Execution and margins rise YoY; working capital improves

Top line jumped 62% YoY as the pandemic’s impact faded. EBITDA margin shot up

~100bp YoY (flat QoQ). Despite interest cost rising 9% YoY, the company posted PAT

of INR411mn during the quarter. Working capital cycle improved to 122 days (from

135 in Q1FY22); consequently, net debt declined QoQ to ~INR0.5bn (~INR1bn at end-

Q1FY22). For FY22E, JKIL has guided for top line of INR32–35bn and EBITDA margin

of 14–16%. The company is targeting INR50bn in top line by FY25.

Order book remains healthy

JKIL ended the quarter with an order book of ~INR112bn (book-to-bill of 3.4x); since

the end of Q2FY22, the company has won/emerged L1 in ~INR2.7bn projects. Order

intake during Q2FY22 stood at INR3.4bn. Management is targeting upcoming

opportunities in: i) the Mumbai–Ahmedabad High Speed Rail project (refer to INFRA

SCAPE' - Inter-city rail: Set for hi-speed rush); ii) metro rail projects in Chennai, Delhi,

Kanpur, Nagpur and Agra; iii) transport projects in the MMR and building projects in

the NCR. In all, It has bid for INR110bn worth of projects (share at INR45-50bn); in

addition, it has a bid pipeline of INR150bn in the future. JKIL expects to win INR20–

25bn fresh orders during the rest of the fiscal, and to end the year with an order

book of ~INR120bn.

Explore:

Outlook and valuation: Attractive; maintain ‘BUY’

JKIL’s healthy order book and low leverage (net debt to equity at 0.03x) are the key

positives. We maintain earnings and believe fresh order accretion will determine the

stock’s trajectory going ahead. Maintain ‘BUY/SN’ with a TP of INR256 (9x EPS) while

rolling forward the valuation to Mar-23E.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 7,720 4,774 61.7 6,751 14.4

EBITDA 1,100 632 74.1 968 13.7

Adjusted Profit 411 71 477.7 321 27.9

Diluted EPS (INR) 5.4 0.9 477.7 4.2 27.9

42,000

46,000

50,000

54,000

58,000

62,000

100

125

150

175

200

225

Nov-20 Feb-21 May-21 Aug-21 Nov-21

JKIL IN Equity Sensex

India Equity Research Infrastructure November 10, 2021

J KUMAR INFRAPROJECTS RESULT UPDATE

Parvez Qazi +91 (22) 4063 5405 [email protected]

Corporate access

Financial model Podcast

Video

Page 5: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Neutral Price (INR) 4,216 12 month price target (INR) 4,701 Market cap (INR bn/USD bn) 83/1.1 Free float/Foreign ownership (%) 34.5/22.1

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Good showing; inflation overhang

V-Mart Retail (VMart) reported impressive revenue/SSSG recovery of 100%/85% (of Q2FY20). Including Unlimited (consolidated for Sep-21), revenue recovery stood at 108%. The pace of store expansion improved: VMart added 12 (excluding Unlimited). The company also took price hikes to mitigate the impact of recent inflation.

Overall, we remain constructive on VMart given its long-term growth visibility along with a cash-rich balance sheet. Maintain ‘BUY’ with a revised TP of INR4,701 (30x FY23E EV/EBITDA). The next re-rating trigger would be Unlimited’s operational turnaround. Impending risks remain current inflation and potential GST hike, which could impact affordability quotient for retailers such as VMart.

FINANCIALS (INR mn)

Year to March FY21A FY22E FY23E FY24E

Revenue 10,755 15,664 23,092 25,775

EBITDA 1,312 2,083 3,210 3,686

Adjusted profit (62) 210 918 1,165

Diluted EPS (INR) (3.1) 10.7 46.6 59.1

EPS growth (%) nm nm 336.2 26.9

RoAE (%) (1.0) 2.5 10.3 11.8

P/E (x) nm 325.9 74.7 58.9

EV/EBITDA (x) 50.5 32.4 21.0 18.1

Dividend yield (%) 0 0 0.1 0.1

PRICE PERFORMANCE

Solid performance; Unlimited business improve recovery

VMart reported 93% YoY growth in revenue to INR3.4bn (Q1FY22: 127%), i.e. a

recovery of 108% of Q2FY20. This includes the benefit of consolidation of Arvind

Fashion’s Unlimited business for one month, without which recovery stood at 100%

of pre covid levels. Decoding the growth, while footfalls were up 89% YoY (6.6mn

versus 3.5mn), a higher conversion rate (65% versus 60%) along with a similar

transaction size (INR838 versus INR844) contributed to revenue growth. ASP

improved by 8% YoY for Q2FY22 with VMart having taken an average hike of 8%. The

company opened 86 new stores during the quarter, including the 74 Unlimited stores

acquired in South India. Overall, the company reported a marginal EBITDA of

INR206mn (INR83mn due to rental waivers), with margin at 6% (Q2FY20:8.4%).

Q2FY22: Conference call takeaways

i) 95% operational days during the quarter, but it was impacted by limited

operational hours and footfalls were close to 80% of 2019. ii) The company has taken

an 8% price hike to mitigate cost inflation and has been able to pass it on entirely.

iii) The target of 20–25% store addition remains. The plan is to open 40+ stores, out

of which 24 have already opened. iv) H2FY22 capex includes new store addition and

INR200–250mn for the warehouse.

Explore:

Outlook and valuation: Integration next lever; maintain ‘BUY’

We are rolling forward the valuation to FY23E, keeping our target EV/EBITDA

unchanged at 30x, which yields a revised TP of INR4,701 (INR4,142 earlier). Maintain

‘BUY’. The rext re-rating trigger would be the turnaround of Unlimited’s operations.

We have not yet consolidated the acquisition of Unlimited stores.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 3,380 1,755 92.6 1,774 90.5

EBITDA 206 ( 3) NM ( 20) NM

Adjusted Profit ( 141) ( 190) NM ( 287) NM

Diluted EPS (INR) ( 7.8) ( 10.4) NM ( 15.8) NM

43,000

46,800

50,600

54,400

58,200

62,000

1,950

2,460

2,970

3,480

3,990

4,500

Nov-20 Feb-21 May-21 Aug-21 Nov-21

VMART IN Equity Sensex

India Equity Research Retail November 10, 2021

V-MART RETAIL RESULT UPDATE

Nihal Mahesh Jham Abneesh Roy Yash Mehta +91 (22) 6623 3352 +91 (22) 6620 3141 [email protected] [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 6: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Neutral Price (INR) 101 12 month price target (INR) 130 Market cap (INR bn/USD bn) 521/7.0 Free float/Foreign ownership (%) 28.4/11.7

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Above In line Below

Profit

Margins

Revenue Growth

Overall

Core soft; momentum build-up key

Bank of Baroda (BoB) posted Q2FY22 PAT of INR20.9bn topping estimates on lower credit cost and higher other income even as core was soft. Slippages were elevated driven by a corporate account (already known), but otherwise lower across segments. Business momentum remained soft; this with lower NIMs impacted core profit.

Even though uncertainty over subsequent covid waves and their potential impact persists, we believe lower probability (versus earlier), better recovery and a reducing stress pool imply lower earnings volatility. This coupled with 0.5x FY23E P/BV lends comfort. Factoring in better recovery, we are revising the target to 0.7x P/BV (from 0.5x), leading to a revised TP of INR130 (earlier INR98). Maintain ‘BUY’.

FINANCIALS (INR mn)

Year to March FY20A FY21A FY22E FY23E

Revenue 274503 288090 319193 365732

PPoP 196901 206298 243470 273668

Adjusted profit 5448 8289 85912 112656

Diluted EPS (INR) 1.2 1.6 16.6 21.8

EPS growth (%) nm 36.0 936.4 31.1

RoAE (%) 0.8 1.1 10.8 12.6

P/E (x) 85.5 62.9 6.1 4.6

P/ABV (x) 0.9 0.9 0.8 0.6

Dividend yield (%) 0 0 0 0

PRICE PERFORMANCE

Asset quality improves; sustenance key

Slippages though elevated at INR58bn (3.5%), it was largely driven by corporate (one

account), excluding which slippages were much lower. Within segments, slippages

improved all over—retail, MSME and agriculture. This coupled with higher

recoveries/upgrades pushed GNPLs down to 8.11% (8.86% QoQ). The restructuring

pool stands at sub-3% with >30% coming from MSME. Also, the SMA pools (1 and 2,

for exposure above INR50mn) dipped to 1.9% from 2.7% in Q1FY22, taking overall

stress pool at a lower level. Going forward, given uncertainty on subsequent covid

waves, absence of a material provision buffer and impending provisions on slipped

NBFC (50% provided for as of now) will likely lead to elevated credit cost, in our view.

Lower NIM impacts core; business momentum improvement key

BoB reported softer traction in business with loan growth of sub-4% YoY and deposit

growth of sub-1% YoY. Add to that, lower NIMs (down 19bps QoQ, impact of higher

interest income reversal pertaining to an NBFC account) and higher opex (up >6% QoQ)

impacted core profitability. That said, recovery from Dewan (INR9bn) supported

overall profitability. Armed with a strong franchise and slackened competition, BoB

aspires for an ambitious build-up. However, we need more evidence of sustained

execution and successful integration before conviction truly sets in.

Explore:

Outlook and valuation: Valuation comfort; maintain ‘BUY’

Demonstration of the merger value-add and, indeed, getting through the current

crisis without deep earnings erosion are key. Promised rationalisation benefits post-

merger are not a foregone conclusion given complexity of the task at hand. Valuation

at 0.5x FY23E P/BV lends some comfort. We maintain ‘BUY/SN’.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 1,11,452 1,03,098 8.1 1,08,615 2.6

Pre-provisioning Profits 56,696 55,518 2.1 57,074 (0.7)

Reported Profits 20,879 16,786 24.4 12,086 72.7

EPS 4.0 3.6 2.3

43,000

46,800

50,600

54,400

58,200

62,000

25

45

65

85

105

125

Nov-20 Feb-21 May-21 Aug-21 Nov-21

BOB IN Equity Sensex

India Equity Research Banks November 10, 2021

BANK OF BARODA RESULT UPDATE

Prakhar Agarwal Parth Sanghvi +91 (22) 6620 3076 [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 7: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Outperformer Price (INR) 1,001 12 month price target (INR) 1,360 Market cap (INR bn/USD bn) 345/4.7 Free float/Foreign ownership (%) 85.3/28.7

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Steady showing; growth resumption in H2

Max Financial Services (MFS; Max Life Insurance’s holding company) posted an 11% YoY uptick in APE to INR12.8bn for Q2FY22, below private industry growth. Its market share thus dipped to 10% within private industry. By business mix, participating products posted robust growth while sales of individual protection lagged due to supply-side challenges. Non-par savings and ULIPs posted marginal growth YoY.

Hence, VNB margin improved 110bps YoY to 25.3%.

In light of slow APE growth, we are cutting FY22 and FY23 estimates by 4–5% each; however we remain hopeful of a pickup as MFS launches products over the next few quarters. Maintain ‘BUY’ with a TP of INR1,360 (up from INR1,290) as we roll over the valuation to Dec-22E.

FINANCIALS (INR mn)

Year to March FY20A FY21E FY22E FY23E

APE 41,490 49,570 70,094 80,432

EV 99,780 1,18,350 1,41,096 1,67,746

PAT 5,394 5,230 8,034 9,432

Diluted EPS (INR) 12.8 12.4 19.0 22.4

EPS growth (%) (3.1) (3.0) 53.6 17.4

VNB margin (%) 21.6 25.2 25.2 25.4

RoEV (%) 20.3 18.6 24.1 23.7

P/E (x) 77.5 79.9 52.0 44.3

P/EV (x) 4.2 3.5 3.0 2.5

PRICE PERFORMANCE

Steady business performance

MFS reported growth of 11% YoY in APE to INR12.8bn in Q2FY22 driven by an uptick

in primarily participating products offset by weak sales in individual protection. Non-

par savings and ULIPs logged moderate growth. Business mix improved in favour of

higher-margin products such as non-par savings and participating. However,

individual protection’s share came down due to supply-side challenges. As these

abate, this segment should come back strongly given medium-term opportunity.

VNB margin was back at 25% after a temporary hit in Q1. Persistency ratio saw

marginal improvements in key cohorts of 13M/61M.

Growth and margins should pick up in H2

After consistently outperforming industry over the last few quarters, MFS

underperformed in Q2. As a result, its market share among private insurers came

down to 10%. However, given several product launches are planned over the next

few quarters, we expect growth and market share gains to be back. Agency channel

has come back strongly in Q2 as Q1 was affected by the second covid wave Usually,

agency channel has sharper focus on traditional products and protection, and

therefore this should further boost margins in H2. Willingness to underwrite

protection is also improving as the trajectory of covid cases comes down.

Explore:

Outlook and valuation: Growth at reasonable price; maintain ‘BUY’

Crystallisation of merger with Axis Bank is likely to yield multiple benefits on

distribution and branding This along with several product launches expected over

the next few quarters should help to recoup market share loss. Valuation at 2.5x

FY23E P/EV appears reasonable. Maintain ‘BUY/SO’.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

APE 12,830 11,540 11.2 8,750 46.6

PAT 477 811 (41.2) 358 33.1

Diluted EPS (INR) 1.2 2.1 (45.2) 0.6 91.7

VNB margin – YTD (%) 25.3 24.2 19.7

Above In line Below

Profit

Margins

Revenue Growth

Overall

42,000

46,000

50,000

54,000

58,000

62,000

600

710

820

930

1,040

1,150

Nov-20 Feb-21 May-21 Aug-21 Nov-21

MAXF IN Equity Sensex

India Equity Research Insurance November 10, 2021

MAX FINANCIAL RESULT UPDATE

Prakhar Agarwal Vinayak Agarwal +91 (22) 6620 3076 +91 (22) 6620 3020 [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 8: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating REDUCE Sector relative Underperformer Price (INR) 210 12 month price target (INR) 152 Market cap (INR bn/USD bn) 65/0.9 Free float/Foreign ownership (%) 71.6/12.0

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Above In line Below

Profit

Margins

Revenue Growth

Overall

Subdued quarter; debt concerns persist

India Cements (ICEM) posted Q2FY22 EBITDA of INR1.3bn (down 43% YoY/18% QoQ), missing our estimate by 15% (and consensus by 12%). Realisation led the disappointment, falling >4% QoQ (versus our expectation of a 2.5% drop) even as volumes and overall costs came broadly in line. Factoring in H1FY22 performance as well as rising fuel cost, we are cutting FY22E EBITDA by ~10%, but maintaining FY23E’s.

We maintain ‘REDUCE’ on ICEM owing to long-standing concerns of a low future RoE (5–6% range) and high net debt/EBITDA (>3x for FY22E). Rolling over the valuation to Q4FY23E yields a TP of INR152 (up from INR145), valuing the stock at 7.5x EV/EBITDA.

FINANCIALS (INR mn)

Year to March FY20A FY21A FY22E FY23E

Revenue 50,575 44,367 55,116 60,716

EBITDA 5,852 8,061 7,954 9,875

Adjusted profit 164 2,232 2,661 3,767

Diluted EPS (INR) 0.5 7.2 8.6 12.2

EPS growth (%) (76.4) 1,259.5 19.2 41.5

RoAE (%) 0.3 4.2 4.8 6.4

P/E (x) 396.4 29.2 24.5 17.3

EV/EBITDA (x) 16.9 11.8 11.6 8.9

Dividend yield (%) 0.3 0.5 0.5 0.5

PRICE PERFORMANCE

A seasonally weak quarter

Q2 is a seasonally weak quarter owing to monsoon, and rising cost as well as weak

cement prices amplified the impact this year. On a low base, while volumes rose 12%

YoY/21% QoQ (broadly in line), realisation plunged 4% QoQ (down 1% YoY)

undershooting the estimate by ~1.5%. With variable cost/t rising 15% YoY (3.5%

QoQ) and fixed cost normalising, blended EBITDA/t at INR566 is the lowest in past

six quarters (down 49% YoY/32% QoQ). While EBITDA dipped 43% YoY, reported PAT

plunged 69% YoY.

Pruning FY22E EBITDA, retaining FY23 estimates

While rising fuel cost remains a concern, management appeared confident of passing

it on to consumers. However, factoring in the H1FY22 performance as well as the

impact of North-East monsoons in the state of Tamil Nadu in Q3FY22, we are

lowering our FY22 EBITDA estimate by ~10%. Even so, we are retaining FY23

estimates assuming moderation in energy cost.

Meanwhile, EBITDA/t for H1FY22 stands at INR687 versus our estimates of INR780

for FY22 and INR896 for FY23.

Explore:

Outlook and valuation: Debt concerns persist; maintain ‘REDUCE’

While ICEM is unlikely to pursue any capacity expansion in the immediate future, its

debt is likely to stay elevated. Increase in working capital (compared with Q4FY21)

and rising fuel cost raise concerns over management guidance of paring debt by

INR5bn in FY22. All in all, we maintain ‘REDUCE/SU’ with a TP of INR152.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 11,902 10,697 11.3 10,225 16.4

EBITDA 1,336 2,347 (43.1) 1,620 (17.5)

Adjusted Profit 220 714 (69.2) 374 (41.3)

Diluted EPS (INR) 0.7 2.3 (69.2) 1.2 (41.3)

43,000

46,800

50,600

54,400

58,200

62,000

100

125

150

175

200

225

Nov-20 Feb-21 May-21 Aug-21 Nov-21

ICEM IN Equity Sensex

India Equity Research Cement November 10, 2021

INDIA CEMENTS RESULT UPDATE

Navin Rameshwar Sahadeo Shubham Mittal +91 (22) 4088 6242 +91 (22) 4063 5459 [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 9: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Outperformer Price (INR) 180 12 month price target (INR) 251 Market cap (INR bn/USD bn) 125/1.7 Free float/Foreign ownership (%) 43.4/10.6

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Revenue misses; margin beats estimates

Firstsource reported revenue growth of 20.3% YoY to USD193mn, missing our estimate of USD206mn as well as Street’s forecast of USD199mn. EBIT margin came in at 12.5%, higher than our estimate of 11.7% and Street’s 11.8%. Net profit at INR1.35bn beat our estimate, but came in line with Street’s.

The miss on revenue growth to our estimate is due to lower refinancing volume, which is unpredictable on a quarterly basis, and talent shortages in global markets. We reiterate Firstsource remains on track to transform its business from pure-play BPM to a digital and platform company. We are keeping the TP at INR251 as the long-term story remains intact and on a rollover to Q4FY23E. Retain ‘BUY’.

FINANCIALS (INR mn)

Year to March FY21A FY22E FY23E FY24E

Revenue 50,780 58,995 72,967 80,264

EBITDA 8,042 10,078 13,996 13,565

Adjusted profit 3,617 5,756 8,633 8,813

Diluted EPS (INR) 5.1 8.2 12.2 12.5

EPS growth (%) 4.9 59.2 50.0 2.1

RoAE (%) 13.0 19.8 26.5 23.9

P/E (x) 35.1 22.1 14.7 14.4

EV/EBITDA (x) 16.1 12.5 8.6 8.6

Dividend yield (%) 1.6 1.9 2.7 3.3

PRICE PERFORMANCE

Healthcare and Communication segments drive growth

Firstsource delivered revenue growth of 18.5% YoY in cc. It was driven by the Healthcare vertical (32% YoY in cc), followed by CMT (18.3% YoY in cc) and BFSI (12.3% YoY in cc). Revenue growth in Healthcare was strong despite public health emergency continues to remain in effect in the US, which is impacting elective procedure volumes at hospitals. Additionally, the company won its first USD100mn deal in healthcare segment—to be precise, a USD110mn multiyear deal, which will contribute USD15-16mn in revenue each year. Revenue growth in BFS was weaker due to lower refinancing volume, which depends on prevailing interest rates, although the company continues to gain market share in this category.

Revenue growth outlook revised down

Firstsource has revised down revenue growth outlook to 14.5–15.5% YoY in cc from 15–18% YoY in cc. This comes in the wake of challenges in collection business and talent shortage in onshore markets. Margin guidance remains the same at 11.8–12.3% for FY22. We believe the challenges in mortgage business are transitory and talent shortage will impact it in the short term, however, it will lead to higher offshoring going forward, which would be margin accretive. The company continues to progress towards its digital journey as 17% of deal-wins this quarters were digital in nature.

Explore:

Outlook and valuation: Favourable tailwinds; maintain ‘BUY’

FSOL is trading at a sharp discount to IT mid-caps, and an increase in digital revenue contribution would drive multiple re-rating for the stock. The stock is trading at 14.7x FY23E. Retain ‘BUY/SO’ with a TP of INR251 (20x Q4FY23E) based on strong growth and the rollover to Q4FY23E.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 14,286 11,877 20.3 14,848 (3.8)

EBITDA 2,388 1,876 27.3 2,383 0.2

Adjusted Profit 1,350 1,053 28.2 1,336 10.3

Diluted EPS (INR) 2.0 1.5 30.7 1.9 2.6

Above In line Below

Profit

Margins

Revenue Growth

Overall

43,000

46,800

50,600

54,400

58,200

62,000

50

90

130

170

210

250

Nov-20 Feb-21 May-21 Aug-21 Nov-21

FSOL IN EQUITY Sensex

India Equity Research IT November 10, 2021

FIRSTSOURCE SOLUTIONS RESULT UPDATE

Sandip Agarwal Pranav Kshatriya Nikhil Choudhary Ayur Bohra +91 (22) 6623 3474 +91 (22) 4040 7495 [email protected] [email protected] [email protected] [email protected]

Corporate access

Financial model Podcast

Video

Page 10: First Call 11Nov21

Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited

KEY DATA

Rating BUY Sector relative Outperformer Price (INR) 222 12 month price target (INR) 271 Market cap (INR bn/USD bn) 70/0.9 Free float/Foreign ownership (%) 18.5/15.3

What’s Changed Target Price

Rating/Risk Rating ⚊

QUICK TAKE

Sales intact; margin under pressure

EPL (erstwhile Essel Propack) reported in-line sales with 13% YoY growth in Q2FY22. All regions barring Europe clocked growth, while Europe continued seeing a dip owing to softness in the personal care portfolio. Raw material price volatility and higher freight costs resulted in a 4% YoY dip in EBITDA (10% below estimate).

Despite a slightly weak H1FY22, pipeline across geographies remains strong. While cost headwinds remain, hikes across the portfolio will gradually mitigate impact on margins. In the interim, with sales and margin pressure in Europe (24% of sales), we are cutting FY22/23E EPS by 10%/4%. However, in light of a 14% EPS CAGR over FY21–23E, we retain ‘BUY’ with a revised TP of INR271 (12.6x Dec-22E EV/EBITDA).

FINANCIALS (INR mn)

Year to March FY21A FY22E FY23E FY24E

Revenue 30,916 33,886 36,795 39,636

EBITDA 6,111 6,270 7,187 7,852

Adjusted profit 2,514 2,505 3,091 3,496

Diluted EPS (INR) 8.0 7.9 9.7 11.0

EPS growth (%) 14.3 (1.1) 23.4 13.1

RoAE (%) 14.9 14.2 16.1 16.5

P/E (x) 27.8 28.1 22.8 20.2

EV/EBITDA (x) 6.3 6.0 4.9 4.2

Dividend yield (%) 1.8 1.7 1.8 2.0

PRICE PERFORMANCE

Headwinds impact profitability

Q2FY22 revenue rose 13% YoY (10% organic), however, EBITDA dipped 4% YoY,

although EPL delivered a sequential improvement of 20bps on margins—despite

challenges on raw materials and supply chains exacerbated by labour shortages in

Americas and Europe. AMESA: Revenue jumped 19% YoY with the acquisition of

Creative StyloPacks. EBIT margin contracted 338bps YoY. EAP: Revenue grew 12%

YoY, while EBIT margin dipped 418bps YoY. Europe: Revenue again declined 3% YoY

due to closure of Russia plant and EBIT margin dipped 416bps YoY. Americas:

Revenue rose healthy 22% YoY, while EBIT margin contracted 111bps YoY due to

covid-related expenses.

Margin improvement measures in place

While H1FY22 has seen the impact of raw material price volatility and supply chain

challenges, the sharp increase remains a concern. Thus, the company’s focus

remains on prioritising service to customers over cost and management. Under the

new MD, Mr. Anand Kripalu, EPL has a comprehensive mitigation plan including

further price hikes, product mix improvement and cost optimisation initiatives. By

partnering an oral MNC for 100% usage of Platina, sustainability remains at the core

of EPL’s strategy for competitive advantage, along with delivering top-line growth.

ever Explore:

Outlook and valuation: Growth trajectory intact; maintain ‘BUY’

EPL’s growth prospects remain firm with management’s commitment to double-digit

market leading sales and capital efficient earnings growth. We estimate 9%/8%/14%

CAGR over FY21–23E in revenue/EBITDA/EPS. Maintain ‘BUY’ with a revised TP of

INR271 (INR280 earlier), valuing the stock at 12.6x Q3FY22E EV/EBITDA.

Financials Year to March Q2FY22 Q2FY21 % Change Q1FY22 % Change

Net Revenue 8,701 7,703 13.0 7,991 8.9

EBITDA 1,594 1,662 (4.1) 1,449 10.0

Adjusted Profit 507 664 (23.7) 579 (12.4)

Diluted EPS (INR) 1.6 2.1 (23.7) 1.8 (12.4)

Above In line Below

Profit

Margins

Revenue Growth

Overall

43,000

46,800

50,600

54,400

58,200

62,000

200

220

240

260

280

300

Nov-20 Feb-21 May-21 Aug-21 Nov-21

EPLL IN EQUITY Sensex

India Equity Research Miscellaneous November 10, 2021

EPL LTD RESULT UPDATE

Corporate access

Financial model Podcast

Video

Shradha Sheth Meera Midha +91 (22) 6623 3308 +91 (22) 4088 5804 [email protected] [email protected]

Page 11: First Call 11Nov21

Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL <GO>, Thomson FirstCall, Reuters and Factset Edelweiss Securities Limited

DISCLAIMER Edelweiss Securities Limited (“ESL” or “Research Entity”) is regulated by the Securities and Exchange Board of India (“SEBI”) and is licensed to carry on the business of broking, Investment Adviser, Research Analyst and related activities.

This Report has been prepared by Edelweiss Securities Limited in the capacity of a Research Analyst having SEBI Registration No.INH200000121 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 includes Financial Instruments and Currency Derivatives. The information contained herein is from publicly available data or other sources believed to be reliable. This report is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this report should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in Securities referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not be suitable for all investors.

This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. 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 or which would subject ESL and associates / group companies to any registration or licensing requirements within such jurisdiction. The distribution of this report in certain jurisdictions may be restricted by law, and persons in whose possession this report comes, should observe, any such restrictions. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. ESL reserves the right to make modifications and alterations to this statement as may be required from time to time. ESL or any of its associates / group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. ESL is committed to providing independent and transparent recommendation to its clients. Neither ESL nor any of its associates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including loss of revenue or lost profits that may arise from or in connection with the use of the information. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Past performance is not necessarily a guide to future performance .The disclosures of interest statements incorporated in this report are provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The information provided in these reports remains, unless otherwise stated, the copyright of ESL. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of ESL and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.

ESL shall not be liable for any delay or any other interruption which may occur in presenting the data due to any reason including network (Internet) reasons or snags in the system, break down of the system or any other equipment, server breakdown, maintenance shutdown, breakdown of communication services or inability of the ESL to present the data. In no event shall ESL be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with the data presented by the ESL through this report.

We offer our research services to clients as well as our prospects. Though this report is disseminated to all the customers simultaneously, not all customers may receive this report at the same time. We will not treat recipients as customers by virtue of their receiving this report.

ESL and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the

Securities, 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 subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conflict of interest with

respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance. ESL may have proprietary long/short

position in the above mentioned scrip(s) and therefore should be considered as interested. The views provided herein are general in nature and do not consider risk appetite or investment

objective of any particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business

with ESL.

ESL or its associates may have received compensation from the subject company in the past 12 months. ESL or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. ESL or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Research analyst or his/her relative or ESL’s associates may have financial interest in the subject company. ESL and/or its Group Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise in the Securities/Currencies and other investment products mentioned in this report. ESL, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance.

Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i) exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by numerous market factors, including world and national economic, political and regulatory events, events in equity and debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.

Research analyst has served as an officer, director or employee of subject Company: No

ESL has financial interest in the subject companies: No

ESL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.

Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No

ESL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No

Subject company may have been client during twelve months preceding the date of distribution of the research report.

There were no instances of non-compliance by ESL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years except that ESL had submitted an offer of settlement with Securities and Exchange commission, USA (SEC) and the same has been accepted by SEC without admitting or denying the findings in relation to their charges of non registration as a broker dealer.

A graph of daily closing prices of the securities is also available at www.nseindia.com

Analyst Certification:

The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.

Page 12: First Call 11Nov21

Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL <GO>, Thomson FirstCall, Reuters and Factset Edelweiss Securities Limited

Additional Disclaimers

Disclaimer for U.S. Persons

This research report is a product of Edelweiss Securities Limited, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account.

This report is intended for distribution by Edelweiss Securities Limited only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor.

In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Edelweiss Securities Limited has entered into an agreement with a U.S. registered broker-dealer, Edelweiss Financial Services Inc. ("EFSI"). Transactions in securities discussed in this research report should be effected through Edelweiss Financial Services Inc.

Disclaimer for U.K. Persons

The contents of this research report have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). In the United Kingdom, this research report is being distributed only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005 (the “Order”); (b) persons falling within Article 49(2)(a) to (d) of the Order (including high net worth companies and unincorporated associations); and (c) any other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This research report must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this research report relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this research report or any of its contents. This research report must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. Disclaimer for Canadian Persons

This research report is a product of Edelweiss Securities Limited ("ESL"), which is the employer of the research analysts who have prepared the research report. The research analysts preparing the research report are resident outside the Canada and are not associated persons of any Canadian registered adviser and/or dealer and, therefore, the analysts are not subject to supervision by a Canadian registered adviser and/or dealer, and are not required to satisfy the regulatory licensing requirements of the Ontario Securities Commission, other Canadian provincial securities regulators, the Investment Industry Regulatory Organization of Canada and are not required to otherwise comply with Canadian rules or regulations regarding, among other things, the research analysts' business or relationship with a subject company or trading of securities by a research analyst.

This report is intended for distribution by ESL only to "Permitted Clients" (as defined in National Instrument 31-103 ("NI 31-103")) who are resident in the Province of Ontario, Canada (an "Ontario Permitted Client"). If the recipient of this report is not an Ontario Permitted Client, as specified above, then the recipient should not act upon this report and should return the report to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any Canadian person.

ESL is relying on an exemption from the adviser and/or dealer registration requirements under NI 31-103 available to certain international advisers and/or dealers. Please be advised that (i) ESL is not registered in the Province of Ontario to trade in securities nor is it registered in the Province of Ontario to provide advice with respect to securities; (ii) ESL's head office or principal place of business is located in India; (iii) all or substantially all of ESL's assets may be situated outside of Canada; (iv) there may be difficulty enforcing legal rights against ESL because of the above; and (v) the name and address of the ESL's agent for service of process in the Province of Ontario is: Bamac Services Inc., 181 Bay Street, Suite 2100, Toronto, Ontario M5J 2T3 Canada.

Disclaimer for Singapore Persons

In Singapore, this report is being distributed by Edelweiss Investment Advisors Private Limited ("EIAPL") (Co. Reg. No. 201016306H) which is a holder of a capital markets services license and an exempt financial adviser in Singapore and (ii) solely to persons who qualify as "institutional investors" or "accredited investors" as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore ("the SFA"). Pursuant to regulations 33, 34, 35 and 36 of the Financial Advisers Regulations ("FAR"), sections 25, 27 and 36 of the Financial Advisers Act, Chapter 110 of Singapore shall not apply to EIAPL when providing any financial advisory services to an accredited investor (as defined in regulation 36 of the FAR. Persons in Singapore should contact EIAPL in respect of any matter arising from, or in connection with this publication/communication. This report is not suitable for private investors.

Disclaimer for Hong Kong persons

This report is distributed in Hong Kong by Edelweiss Securities (Hong Kong) Private Limited (ESHK), a licensed corporation (BOM -874) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to Section 116(1) of the Securities and Futures Ordinance “SFO”. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The report also does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of any individual recipients. The Indian Analyst(s) who compile this report is/are not located in Hong Kong and is/are not licensed to carry on regulated activities in Hong Kong and does not / do not hold themselves out as being able to do so. Copyright 2009 Edelweiss Research (Edelweiss Securities Ltd). All rights reserved.

Aditya Narain

Head of Research

[email protected]