IndianHotelsCompany

Recommendation:STRONGBUY
CurrentPrice:`59.65
Targetprice:`81

Analyst:NehaMajithia
nmjaithia@microsec.in
+03330512176

IndianHotelsCompanyLimited
STRONGBUY

SectorHotels
We rate Indian Hotels Company Ltd a STRONG BUY. Indian Hotels Company Limited (IHCL) and its subsidiaries
collectively known as Taj Hotels Resorts and Palaces is one of Asia's largest and finest hotel company, with an
inventory of 13629 rooms and 115 hotels across India and internationally. It has presence across different chain
segments like Luxury, Upper Upscale, upper scale and Budget segment with various brands named Taj, Vivanta,
Gateway and Ginger Hotels. With its active capacity addition in rooms and hotels, solid entry barriers in Luxury
segment,improvedoccupancyrates,amplifyinghoteltariffsandfocusonboostingupthecashflows,weseeIndian
HotelsCompanytogrowataCAGRof10.28%intermsofrevenueandmarginsimprovingsubstantiallyby~160bpsfor
thenextfiveyears.

InvestmentRationale
Highcapacityofexpansioninhotel andRooms: IHCLcameupwithtotal27hotelsand3042roomsinlastfive
years,bothinitsdomesticandinternationalportfolio.Itcameupwith7hotelsand971roomsinFY12.Thereare18
hotelsand2040roomsinpipelineinFY13and20hotelsand2573roomsinFY14.Thecompanyisplanningtodouble
itshotelsunderitsbrandnamedVivantabyTajto50fromthecurrent23hotelsinthenext4years.Itisalsogoing
toaddanother22hotelsunderthebrandnamedGatewayandnew55hotelsunderGingerinnextfouryears.

Companys focus on Cash Flows: The company is on verge of improving its Cash flows by focusing on interest
expenses,employeecosts,totaldebtandcashbalances.IthasstrongaveragecashearningspershareofINR3.49per
shareforlastfiveyearsandispoisedtoachievethehistoricallevelbygivinganext5yearaverageof~INR5.46per
share.

Riseinoccupancyrates,roomtariffsandARRstodrivetoplinegrowth:Thegradualriseinoccupancyrates,
hotel tariffs and average room rates (ARRs) is likely to drive the topline growth and also increase the margins. The
companyexpectstheoccupancyratestoreach~78%withimproveddomestictourismandweakrupee.Themarginal
hikesinhoteltariffwouldbenefittheARRsandturnoverofIHCLincomingyears.Therewasamarginalriseinhotel
tariffsof2%inFY12inIndiaand4%globally.

StrongentrybarrierinLuxurysegment:ThecompanyisexpectedtooutperformintheLuxurysegmentspaceon
accountofstrongentrybarrierinitsLuxurysegment.Thereasonisescalatinglandprices,highestablishingcostsinthe
currentscenario asacorefactorfortheupcominghotels.

Valuation

-225thJune,2012

MicrosecResearch

Companyprofile

Indian hotels company (IHCL) jointly with its subsidiaries is known as Taj Hotels Resorts and Palaces, which is one of Asias largest and finest hotel
company.Itgotincorporatedin1902,bythefounderoftheTatagroup,Mr.JamshedjiNTata,anditopeneditsfirsthotelTheTajMahalPalace&
TowerinMumbai.

Taj Hotels Resorts and Palaces comprises 93 hotels in 55 locations across India with an additional 16 international hotels inthe Maldives, Malaysia,
Australia,UK,USA,Bhutan,SriLanka,AfricaandtheMiddleEast.

IHCLoperatesitsportfolioofhotelsunder4 clearandwelldefinedbrands,namelyTajLuxuryHotels,VivantabyTaj,theGatewayhoteland Ginger

hotels,eachaddressingopportunitiesatvaryingpricepointsandprovidingtoguestswelldefinedandconsistentproducts,servicesandexperiences.

CompanyStructure
IndianHotelsCompanyLtd

Subsidiaries

Domestic:

TIFCOHoldingsLimited
KTCHotelsLimited
UnitedHotelsLimited
TajSATSAirCateringLimited
RootsCorporationLimited
ResidencyFoodsandBeveragesLimited

International:

InternationalHotelManagementServices
Inc.
TajInternationalHotels(HK)Limited
St.JamesCourtHotelLimited
ChieftainCorporationNV
IHOCOBV
TajInternationalHotelsLimited
SamsaraPropertiesLimited
IHMS(Australia)PtyLimited
ApexHotelManagementServicesPte
Limited

Associates

Domestic:

TaidaTradingandIndustriesLimited
OrientalHotelsLimited
TajMaduraiLimited
TajAirLimited
LandsEndPropertiesPrivateLimited
Luthria&LalchandaniHotel&PropertiesPvt.Ltd.
SkydeckPropertiesandDevelopersPrivate
Limited
SheenaInvestmentsPrivateLimited
ELELHotels&InvestmentsLimited
BusinessJets(India)Pvt.Ltd.
PrestigeGardenResortsPrivateLimited

International:

TALLankaHotelsPLC
LankaIslandResortsLimited
BjetsPteLimited
BAHC1PteLimited
BAHC2PteLimited
CullenOakesCorp
BusinessJetsPteLimited
BjetsAssetHoldingsPteLimited
PlatinumLeasingLimited
OHLInternational(HK)Limited
TALMaldivesResortsPvtLimited
GoodhopePalaceHotelsPvt.Ltd.

JointVentures

Domestic:

TajMadrasFlightKitchenPvt.Ltd.
TajKarnatakaHotels&ResortsLtd.
TajKeralaHotels&ResortsLtd.
TajGVKHotels&ResortsLimited
TajSafarisLtd.
KaveriRetreats&ResortsLimited

International:

TALHotelsandResortsLimited
IHMSHotels(SA)(Proprietary)Limited

-325thJune,2012

MicrosecResearch

CompanyBrands

-425thJune,2012

MicrosecResearch

IndianHotelsCompanyLtd
TAJLuxuryHotels

VivantabyTAJ

GatewayHotels

GingerHotels

TGHResidencyRoad,Bangalore

Bangalore

India
TheTajMahalPalace,Mumbai

VivantabyTajConnemara,Chennai

TajLandsEnd,Mumbai

TajExotica,Goa

TGHBeachRoad,Calicut

Haridwar

TheTajMahalHotel,NewDelhi

VivantabyTajFortAguada,Goa

HotelChandela,Khajuraho

Bhubaneswar

TajPalaceHotel,NewDelhi

VivantabyTajHolidayVillage,Goa

HotelSavoy,Ooty

Mysore

TajBengal,Kolkata

UshaKiranPalace,Gwalior

TGHRawalkot,Jaisalmer

Trivandrum

TheTajWestEnd,Bangalore

VivantabyTajHariMahal,Jodhpur

Kuteeram,Bangalore

PunePimpri

TajLakePalaceHotel,Udaipur

JaiMahalPalace,Jaipur

TGHGirForest,SasanGir

Nashik

TajWellingtonMews,Mumbai

VivantabyTajWhitefieldITPL,Bangalore

TGHBeachRoad,Vishakapatnam

Agartala

TajFalaknumaPalace,Hyderabad

TajResidency,Aurangabad

TGHPasumalaiHills,Madurai

Puducherry

TajCoromandel,Chennai

VivantabyTajPresident,Mumbai

TGHChurchRoad,Coonoor

Vadodara

TajKrishna,Hyderabad

VivantabyTajMGRoad,Bangalore

TGHPortRoad,Mangalore

PantNagar

RambaghPalace,Jaipur

VivantabyTajAmbassador,NewDelhi

TGHFatehabadRoad,Agra

RailYatriNiwas,Delhi

UmaidBhawanPalace,Jodhpur

TajBanjara,Hyderabad

TGHAmbad,Nasik

Goa

MahuaKothi,Bandhavgarh

TajDeccan,Hyderabad

TGHGangesVaranasi

Ludhiana

Baghvan,Pench

TajChandigarh,Chandigarh

TGHErnakulam

Ahmedabad

Pasangarh,Panna

VivantabyTajGomtiNagar,Lucknow

TGHVarkala,Janaradhanapuram

Mangalore

BanjarTola,Kanha

VivantabyTajBlueDiamond,Pune

TGHKMRoad,Chikmagalur

Guwahati

VivantabyTajFishermansCove,Chennai

TGHAthwaLines,Surat

Jamshedpur

VivantabyTajMalabar,Cochin

TGHM.G.Road,Vijaywada

PuneWakad

VivantabyTajKumarakom,Kerala

TGHUmmedAhmedabad

Surat

VivantabyTajKovalam,Kerala

TGHAkotaGardens,Vadodara

Manesar

VivantabyTajSawaiMadhopur,Ranthambore

SMS,Jaipur

ChennaiIIT

RamgarhLodge,Jaipur

TGHJodhpur

DelhiVivekVihar

VivantabyTajTrivandrum,Kerala

NadesarPalace

Indore

TajClubHouse,Chennai

-525thJune,2012

MicrosecResearch

VivantabyTajPanaji,Goa

Overseas

AirCatering

ThePierre,NewYork

TajSamudra,Colombo

AirportGardenHotel,Colombo

Mumbai

TajBoston,Boston

VivantabyTajExotica,Bentota

NewDelhi

CamptonPlace,SanFrancisco

VivantabyTajCoralReef,Maldives

Kolkata

TajExoticaResort&Spa,Maldives

RebakIslandResort,Langkawi,Malaysia

Chennai

TajPalaceHotelDubai

TajTashi,Thimphu,Bhutan

Goa

CrownPlaza/St.JamesCourt,London

TajPamodzi,Lusaka

Amritsar

51BuckinghamGate,London

Bangalore

TajCapeTown,SouthAfrica

Cochin

Blue,Sydney,Australia

HotelIndustryOverview

Occupancy(%)ofHotelsinIndia

ARR(%)ofHotelsinIndia
62%
65%

Goa
45%
44%

Jaipur
Pune

45%

49%

`/perroom

63%
63%

chennai

64%
62%

Bangalore

30%

FY201112

40%

50%

60%

10442
10638
9025
8728
9407

SouthMumbai
70%

80%

FY201011

Source:MicrosecResearch,CompanyData,STRGlobal

8327
8189

NorthMumbai

53%
54%

20%

6521
6536

chennai

Delhi

64%
65%

NorthMumbai

6143
6097

Hyderabad

Bangalore
68%
70%

Delhi

7108
7349

Kolkata

57%
60%

Hyderabad

SouthMumbai

5470
5919

Pune
71%
68%

10%

8407
8154

Jaipur

Kolkata

0%

7007
6496

Goa

2000

4000

6000

FY201112

FY201011

8000

10085

10000

12000

Source:MicrosecResearch,CompanyData,STRGlobal

-625thJune,2012

MicrosecResearch

InternationalTouristArrivals(ITAs)
12

1200

International Tourists arrivals grew by over 4% in 2011 to INR980

million, attributed by slow global economic recovery, major political

1000

The growth of International Tourist arrivals is expected to continue in

10.3

700

monthsof2012.

600

It is anticipated to hit almost one billion by the end of 2012, with

500

6.6

4.4

5.6

3.5

8
6

5.9
0.1

800

2012,butataslowerpaceof34%.ITAsgrewby5.7%inthefirsttwo

6.6

7.9

900

InMillions

changes in the Middle East and North Africa and natural disasters in
Japan.

10

1100

4
2.1

1.6

0
2
3.8

4
6

CY2000 CY2001 CY2002 CY2003 CY2004 CY2005 CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 CY2012

emerging economies regaining the lead with stronger growth in Asia

and the Pacific and Africa (4% to 6%), followed by the Americas and

InternationalTouristArrivals

%Change

Europe(2%to4%).TheMiddleEast(0%to+5%)isforecastedtorecover
Source:UNWTO,MicrosecResearch

partofitslossesfrom2011.

ForeignTouristsarrivals(FTAs)inIndia
7
The Foreign Tourist Arrivals (FTAs) continued to grow at an inactive

count,withagrowthofjust9.4%intheperiod,JanuaryAprilof2012,as

FTAsinIndiagrewbycloseto9%to6.98millionin2011ascomparedto
5.78millionin2010.Ithasexhibitedagrowthof~90%overlast6years

inMillions

against12.10%overcorrespondingperiodof2011.

fromapproximately392milliontravelersin2005.

26.8
14.3

15

11.8

8.8 9.40%

10
5
0

2.2

4.2

continued to be the major contributors to arrivals in India. Growth in

10
CY2000 CY2001 CY2002 CY2003 CY2004 CY2005 CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 JanApril
ofCY2012
ForeigntouristArrivals(FTA)
%Change

arrivalstoAfricaandtheMiddleEastwasweakwhilearrivalstoEurope,
Asia, the Pacific and Americas led the international traveler growth
duringCY2011.

20

13.3 13.5

6.7

The conventional source markets of US, UK and Western Europe

25

14.3

30

Source:MinistryofTourism,GovernmentofIndia,MicrosecResearch

ForeignexchangeEarnings(FEE)inIndia

TheForeignExchangeEarnings(FEE)fromtourismduringtheperiodof

huge mismatch between footfalls and growth rates in inbound and

outbound tourism. For example, Issues like multiple taxes and

60000
INR(Cr)

17.8

50000
20.6

13.7

25

15.6

19.6

18.5

18.1

40000
30000
20000

entertainmentlicensesareslowinggrowthininboundtourism.

30

34.8

comparedtothecorrespondingperiodofpreviousyear.
Still, India is lacking behind and losing in foreign exchange because of

35

70000

JanuaryApril of 2012, addressed a handsome growth of 28.5%, as

40

37.6

15
10

7.1

3.5

0.1

10000

-7-

20
%

80000

10
CY2000 CY2001 CY2002 CY2003 CY2004 CY2005 CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 JanApril
of
CY2012
ForeignExchangeEarnings(FEE)
%Change

Source:MinistryofTourism,GovernmentofIndia,Microsec

25thJune,2012

MicrosecResearch

Indiasroomsupplypipelinecontinuestobestrong
350000

Indiasroomsupplypipelinerepresents17%oftheAsiaPacificpipeline.
ItwasmovingataCAGRof10.81%forlast10yearsandisnowpoisedto

growataCAGRof6%innext5years.

250000

The intense supply pipeline would be backed by addition of room

200000

capacitybyallthehotelsbothinIndiaandInternationally.

233850
300000

CAGRof9%
60850
173000

150000

Thesupplypipelinewouldbeefupalsoonaccountofimprovedforeign

100000

62000

touristarrivals,corporatetravels,etc.
50000

International hotels like Carlson, Strawood, Marriot, etc are the ones

2003

2012

Next5Years

which have chalked out plans to acquire the sufficient market share,
Existing

thus,givingathrusttotheIndiansupplypipeline.

Pipeline

Source:MicrosecResearch,CompanyData,

IndiasHotelPerformanceinKeyCitiesinFY12

%ChangeinIndian HotelsPerformance inKeyCities

Indianhotelsperformanceshowedanoverall6%increaseonthesupply

Hyderabad

front. New supply was witnessed mainly in new and emerging CBDs

Chennai

acrossmetros.Though,demandgrewatamoderatepace.

Bangalore

Due to the low economic sentiment, especially in the last quarter of

FY12,thereisanadditionalpressureonrates.

Jaipur

2.40%

7.40%

1.80%

6.60%

0.80%

7.40%

1.10%

8.70%
4.20%

Delhi

CitieslikeHyderabad,Chennai,Delhisawmajorpositivechangesonthe
supply performance side and others like Mumbai, Goa saw a surge on
thedemandside.

Mumbai

2.40%

Goa

5.50%

2.90%
3.90%

India
0.00%

13.40%
7.00%

2.00%

4.00%

6.00%

6.00%

Demand%Change

25thJune,2012

10.00% 12.00% 14.00% 16.00%

Supply%Change

Source:MicrosecResearch,CompanyData,

GlobalScenario

Source:MicrosecResearch,CompanyData,

8.00%

-8-

Source:MicrosecResearch,CompanyData,

MicrosecResearch

DevelopmentsinFY201112
NewHotelsinFY2011/12

Hotels

Indicativetimeline

Company

Rooms

IHCLDirect/ManagementContract
VivantabyTaj,Yeshwantpur

Launched

IHCL

327

VivantabyTaj,Srinagar

Launched

ManagementContract

88

VivantabyTaj,Bekal,Kerala

SoftOpening

ManagementContract

72

TheGatewayHotel,SasanGir

Launched

ManagementContract

28

SubTotal

515

Subsidiaries/JVs/Associates
VivantabyTaj,Begumpet,Hyderabad

Launched

TajGVK

181

VivantabyTaj,Coimbatore

Launched

OHL

180

GingerHotelsTirupur

2011/12

RootsCorporation

95

SubTotal

456
NewDevelopmentsin2011/12include7hotelsand971rooms.

UpcomingDevelopments
HotelsinPipeline2012/13
Hotels

Company

Rooms

Taj
TajPalaceMarrakech,Morocco

ManagementContract

161

ImperialClubbyTaj,Tardeo,Mumbai

ManagementContract

VivantabyTaj
VivantabyTaj,Dwarka

IHCL

250

VivantabyTaj,Coorg

KaveriResorts

VivantabyTaj,Gurgaon

ManagementContract

200

Gateway,Kolkata

ManagementContract

200

Gateway,Raipur

ManagementContract

119

Gateway,Gondia

BHL

34

Gateway,Hubli

ManagementContract

92

GatewayOMR,Chennai

ManagementContract

193

GingerHotels(EightinNumber)

RootsCorporationLtd

720

62

Gateway

NewDevelopmentsinPipeline2012/13include18Hotelsand2040rooms

-925thJune,2012

MicrosecResearch

HotelsinPipeline2013/14
Hotel

Company

Rooms

Taj
TajAirportHotel,CSIA,T1C,Mumbai

TajGVKLtd

275

TajPalace,TempleofHeaven

ManagementContract

105

VivantabyTaj,Nagpur

ManagementContract

255

VivantabyTaj,LakeEnd,Udaipur

PiemHotelsLtd

VivantabyTaj

80

Gateway
Gateway,Faridabad

ManagementContract

160

Gateway,Banerghatta

OHL

209

Gateway,Chiplun

ManagementContract

60

Gateway,Shirdi

ManagementContract

119

Gateway,Hinjewadi

ManagementContract

150

GatewayNashik(Expansion)

PiemHotelsLtd

GingerHotels(TeninNumber)

RootsCorporationLtd

67
1093

NewDevelopmentsinPipeline2013/14include20Hotelsand2573rooms

No.ofRooms(%)
15508

16000
21%

15000
32%

130
13629

14000
11754

12000
10587

11000
22%

9000

Subsidiaries

Source:MicrosecResearch,CompanyData

JointVentures

9931

12243

100

107

103

99

90

88

80

82

70
FY200607

Associates

120
110

115

8000

25%
IHCL(Standalone)

130

12795

13000

10000

140

FY200708

FY200809
Rooms

FY200910

FY201011

FY201112 FY201213(E)

Hotels

Source:MicrosecResearch,CompanyData

- 10 25thJune,2012

MicrosecResearch

SurplusInventory&supplementaryroomrateshurtsroomoccupancy
80%

The slowdown in recovery of occupancy rates in last few years was

76%

primarily due to oversupply of rooms particularly in Delhi, Chennai,

72%
68%

TheAverageroomoccupancyrateforIndianhotelsis~70%forlast5

64%

yearsandispresumedtoreach75%innext45years,withthesupport

60%

68%

bigpositiveintermsofoccupancy.Nevertheless,hikeinroomratesin
populardestinationsisajumbocountforthecompany.

FY201314E

FY201213E

ThemajorreinforcementinitsbudgetspacesegmentalloverIndiaisa

FY201112A

FY201011A

expansionofdifferentchainsegmenthotelsinIndiaandabroad.

FY200910A

oforderlysupply ofrooms, revampedforeigntourist arrivalsinIndia,

FY200809A

66%

FY200607A

showedanimprovementinoccupancyevenwithflatroomrates.

75%

70%

73%

Hyderabad, Bangalore and Pune. Mumbai was the only metro, which

78%

73%

73%

FY200708A

RoomOccupancy

Source:MicrosecResearch,CompanyData

10000
9000

TheARRsarelikelytoshapeupinfutureonbackofincreaseinhotel
tariffs,riseindomesticandinternationaltourism.

FY201314E

FY201213E

Source:MicrosecResearch,CompanyData

tariffs,whichoflategaveaboosttotheARRs.

FY201112A

6000
FY201011A

international travelers. Globally, there was a jump of 4% in the hotel

FY200607A

7000
FY200910A

8000

in hotel tariffs of 2%, which attracted both the domestic and

FY200809A

marginalimprovementonthedomesticfrontwasduetomarginalrise

FY200708A

ThegrowthinARR/OccupancywasrelativelymutedinFY12.TheARRs

11566

11000

10860

travel.

9873

12000

8975

growth of ~10%, owing to improved domestic tourism and corporate

10709

13000

9234

The average room rates (ARRs) remained steady for FY12, with a

INR(Cr)

10674

12433

AverageRoomRatestogaingroundonprolongedhoteltariffs

AverageRoomRate(ARR)

Source:MicrosecResearch,CompanyData

Revenueperavailableroomtogetaboost

7000

hoteltariffs.

8615

7977

7386

6714

It is expected to forge ahead on account of higher occupancies and

INR

8000

6104

by10%,asaresultofsupplementaryroomratesduringtheyear.

7842

9000

TheRevenueperavailableroom(RevPar)increasedsignificantlyinFY12

6723

7084

10000

6000

FY201314E

FY201213E

FY201112A

FY201011A

FY200910A

FY200809A

FY200708A

FY200607A

5000

RevPAR

- 11 25thJune,2012

Source:MicrosecResearch,CompanyData

MicrosecResearch

RoomIncomeisanticipatedtoclimbup~18%byFY14,ongroundof
favorableAverageroomrates(ARRs)andincidentalroomcapacityin

FY201314E

FY201213E

surmountinaveragedailyroomssoldincludingcapacityincrease.

FY201112A

500
FY201011A

slowdowninbusiness,theabovementionedrisewasonbackof8%

FY200910A

600

FY200809A

In FY12, the growth contracted to 6% over FY11. Despite the

FY200708A

700

FY200607A

1049.32

800

TAJFalaknama,Hyderabad.

953.93

900

attributedtoreopeningofTAJMahalPalace,Mumbaiandlaunchof

883.27

room rates and occupancies. Besides, the surge can also be

834.52

1000

699.63

drasticallyinFY11,withajumpof19%overFY10,byvirtueofhigher

843.19

1100
845.1

The Room Income (~50% of the total revenue), has moved up

INR(Cr)

978.71

RoomIncomeelevatesonbackoftoweringincreaseinroomcapacity

RoomIncome

different chain segments, especially in Vivanta by TAJ and Ginger

Source:MicrosecResearch,CompanyData

hotels.

Heftyfood&beverageIncomeonbackofstablebanquetingincome

TheFood&BeverageincomewasupinFY12againstFY11,butata
passiverateof11%,becauseofsuperiorgrowthinrestaurantsales

INR(Cr)

822.77

754.83

705.45

500

andbulkybanquetingincome.

FY201314E

FY201213E

FY201112A

thecompanysportfolio.

FY201011A

years withthelaunchofforthcominghotelsandrestaurantsacross

FY200910A

The Food and beverage income is expected to improve in coming

FY200809A

400
FY200607A

600

FY200708A

700

636.7

800

of22%.

536.34

900

compared to FY10, owning to sturdy growth of banqueting income

508.99

The Food and Beverage Income honored by 19% in FY11 as

521.2

585.32

1000

Food&BeverageIncome

112.17

128.41
FY201314E

66.46

118.90
FY201213E

hotelsunderthecompanysinternationalportfolio.

FY201112A

straighten up more in near future, considering the turnover in the

FY201011A

by 17%. The major income in terms of management fee would

59.97

Though,inFY11,themanagementfeewashigherthanFY10figures

FY200910A

FY200809A

profitabilityinNonIHCLhotels.

58.62

The other judgment for the higher management fee was the
INR(Cr)

FY200708A

turnoverofbothIHCLandNonIHCLHotels.

140
130
120
110
100
90
80
70
60
50

74.2

The Management fee for FY12 was up by 6% owing to higher

FY200607A

106.12

Source:MicrosecResearch,CompanyData

Managementfeeyettoaugmentgrowth

ManagementFee

- 12 25thJune,2012

Source:MicrosecResearch,CompanyData

MicrosecResearch

FinancialAnalysis(Consolidated)Radiantoutlookwithmountedmargins

4500

5.36%forlast6years.Priortolastsixyears,thecompanygrewat

4000

a CAGR of 18.36%. The company witnessed a major slowdown in

3500

FY09,FY10&FY11onthegroundsof1)slowdowninUSeconomy

3000

which blemished the performance of the hotels internationally 2)

2500

21.47%

15.90%

14.73%
16.21%

0.48%

15.00%

0.09%

5.57%

1.60%
3.26%

5.00%
0.00%

NetSales

EBITDA

PAT

EBITDAMargin(%)

FY201314E

FY200910A

FY200809A

5.00%
FY200708A

500

20.00%
10.00%

4.07%

FY200607A

registeringasurgeof19.92%againstFY11.Thiswasmainlybecause

managementfee.

17.50%

1500

salesduetosurgeinrestaurantsalesandbanquetingbusinessand

15.96%

12.16%

2000

IHCL posted Consolidated net sales of INR3432.71 crores in FY12,

roomssoldincludingcapacityaddition2)higherfoodandbeverage

25.00%

15.80%

500

of1)roomrevenuegrowthdrivenby8%increaseinaveragedaily

30.00%

1000

ratesandfinacialoperationsofthecompany.

35.00%

FY2001213E

foreigntouristarrivalsinIndiainreturnhammeringtheoccupancy

40.00%
33.72%

FY2001112A

terrorist attack in TAJ Mahal Palacein FY10, which impacted

34.64%

FY201011A

In terms of revenue, the company is growing at a CAGR of just

INR(Cr)

10.00%

PATMargin(%)

Source:MicrosecResearch,CompanyData

TheEBITDAforFY12arrivedatINR545.70crores,whichwasupby
13.31% against FY11. The 6% hike in management fee due to
toweringturnoverandprofitabilityinNonIHCLhotelscontributed
to these earnings. The EBITDA Margins for the year was 15.90%,
which was merely down by 93bps. We expect the margins to
improve, though not identical to its historic levels, but, at a swift
pace because of enduring growth in revenue, other operating
incomeanddecreaseinexpenditurewithrespecttototalincome.

TheexpenditurefortheFY12wasINR2887.01,whichwas84.10%of
total income. It increased by 76bps against FY11, because of 1)
increase in raw material cost in line with 11% hike in food and
beverages revenue and rising commodity input cost 2) annual
increments, launch of new hotels in Bangalore and Hyderabad 3)
riseinemployeecosts4)surmountvariablecostslinkedtobusiness
commensuratecostsofnewpropertiesandhigheradvertisingcosts
onaccountofongoingexpansionofVivantabyTAJ.

Source:MicrosecResearch,CompanyData

The company barged in with consolidated net profit of INR3.06 crores, after posting losses for last 2 consecutive years. The net profit showed a
growthof96.49%againstalossofINR87.26croresinFY11.ThePATmarginfortheyearwas0.09%whichwasupby314bps.

We expect the company to grow at a CAGR of 10.28% in terms of revenue for the next 5 years on back of 1) matured growth rates in foreign
touristarrivalsandcorporatetravelwhichwouldsubstanciallyimpacttheARRsandoccupancies,notjustacrossthecompanysportfolio,butalso
the hotels in its Joint ventures, subsidiaries and associates 2) expansion of hotels in various hotel chain segments, like luxury, upper upscale,
upscaleandbudgetsegment,thus,cateringtotheneedsofallclassofpeople3)Weakrupeewhichwouldbringcoercionamongthecostconcious
indianstotravelwithinthecountryandresultinrisingroomratesnotonlyinpopulardestinations,but,alsointhemetrocities4)favourableARRs

- 13 25thJune,2012

MicrosecResearch

whichwouldboostthedemandoftheallgradesofpeople5)boostupinturnoverandprofitsmainlyfrombyPiem,TajSats,BenaresHotelsLtd
,etcinthedomesticportfolio6)turnovergrowthinRootsCorporationLimited7)growthinturnoverandprofitabilitybyStJames,TIHL,IHMS(A)
andTALHotels&ResortsLtdininternationalportfolio8)fullyretirementofdebtofSamsarapropertiesLtdtwhichwouldboostupprofitmargins,
thoughnotsignoficantly9)growth,butatagradualrate,intheUShotels.

5%

1091

997

1073

160

9%

10%

20%

15%

120
15%
INR(Cr)

10%

80

261

254

81.05

132

300

Revenue

PAT

FY201213E

19

0%

30%
FY200708A FY200809A FY200910A FY201011A FY201112A

5%
9.32

210

51.07

3%

2%
4

102

40

25%

5%

34

24%
24%

10%
7%

5.32

20%

11

600
300

15%

15

900

21%

FY200708A FY200809A FY200910A FY201011A FY201112A FY201213E FY201314E

FY201314E

Revenue

PATMargin(%)

Source:MicrosecResearch,CompanyData

25%

128

9%

PAT

PATMargin(%)

Source:MicrosecResearch,CompanyData

The companys subsidiaries, joint ventures and associates jointly

70

contribute ~41% revenue to the standalone IHCL. We expect ~45%

60

growth in coming years on back of 1) growth in UK, US subsidiary in

50

international portfolio and also in domestic portfolio 2) substantial

40

contribution from the reopening of The Pierre after renovation 3)

30

expansioninGingerhotelsthroughitssubsidiaryTheRootsCorporation

20

Ltd 4) major geographical expansion both in India and abroad 5) large

INR(Cr)

INR(Cr)

1104

177.45

23%

5%
1200

169

200
153

3%

1500

0%

156

1702.26

1621

1544

146

1800

186.32

Subsidiaries/Associates/JointVenturesOnthetrailofconcreteturnover

62 62

25 25

20

15

20

16
10

25
15

10

scale expansion in its Upper Upscale segmentVivanta by Taj through

managementcontractsandsubsidiaries6)improvementinperformance

10

of hotels under joint ventures and associates 7) better occupancy rates

20

5
FY200708A

andARRs.

20

FY200809A

FY200910A

7
FY201011A

FY201112A

FY201213E

FY201314E

Revenue PAT

Source:MicrosecResearch,CompanyData

- 14 25thJune,2012

MicrosecResearch

DomesticandInternationalSubsidiaries

ARR(%)InternationalHotelsofTaj

80

600

CamptonPlace,San
Francisco

300

52

54

St.JamesCourt,
London

200

Blue,Sydney

100

40
38

30
FY200910A

FY201011A

FY2001112A

RevPAR(%)InternationalHotelsofTaj

337

351.23

InternationalHotelManagementServices
Inc.
St.JamesCourtHotelsLtd

TajBoston

IHMS(Australia)PtyLtd

57
11

5.8
2.5

IHOCOBV

202

221
149

197

168

St.JamesCourt,London

FY2001112A

FY200910A

Source:MicrosecResearch,CompanyData

FY201011A

FY2001112A

Source:MicrosecResearch,CompanyData

InternationalHotelManagement
ServicesInc.

1.23

0.17
0
0

0.07

0.01
0
0.17

11.67

15.65

27.23

50

0.93
0.01
0.06
0.02

FY201011A

Blue,Sydney

100

0
FY200910A

CamptonPlace,San
Francisco

35

53

40.89

1.55
0.04

49.83
20.63

38.98
19.64
0.12
40.92
1.28
0.19

ChieftainCorporation NV

186

200

ApexHotelManagementPTELtd
100

139

TajInternationalHotelsLtd

150

153

SamsaraPropertiesLtd

193
168

USD

210

195.7

197.63

TajInternational(H.K.)Ltd

240

300

133
158

300
INR(Cr)

ThePierre,NewYork

377

400

350

50

FY2001112A

Source:MicrosecResearch,CompanyData

450

417.39

450

200

FY201011A

TotalIncome ofMajorIndian subsidiaries

500

250

St.JamesCourt,London

Blue,Sydney
FY200910A

Source:MicrosecResearch,CompanyData

400

CamptonPlace,San
Francisco

400
252

61

190

60

273
296

63

59

252

72
64

USD

70

50

TajBoston
500

75

171

78

74

TajBoston

78

260
259

81

80

256
250
209
188

84

ThePierre,NewYork
598

90

700

620

ThePierre,NewYork

632

Occupancy(%)InternationalHotelsofTaj

0.1

4.25

0.03

St.JamesCourtHotelsLtd
IHMS(Australia)PtyLtd
TajInternational(H.K.)Ltd

INR(Cr)

56.25

50

TajInternationalHotelsLtd

86.16

100

SamsaraPropertiesLtd

115.69

107.39

ApexHotelManagementPTELtd
ChieftainCorporation NV

150

200

168.16

183.79

IHOCOBV

FY200910A

FY201011A

Source:MicrosecResearch,CompanyData

25thJune,2012

FY2001112A

- 15 MicrosecResearch

SubsidiaryCompanies
NameofCompany

Associates

CountryofOperation

Holding(%)

NameofCompany

Domestic

TIFCOHoldingsLtd.

India

100%

KTCHotelsLtd.

India

100%

UnitedHotelsLtd.

India

55%

RootsCorporationLtd.

India

100%

TajSATSAirCateringLtd.

India

51%

ResidencyFoods&BeveragesLtd.

India

98.68%

CountryofOperation

Holding(%)

International

Domestic

IdealIce&ColdStorageCo.Ltd.

India

34.99%

BenaresHotelsLtd.

India

49.53%

PiemHotelsLtd.

India

46.20%

TajTradeandTransportCo.Ltd.

India

46.62%

TajEnterprisesLtd.

India

44.60%

TaidaTradingandIndustriesLtd.

India

41.50%

TajInternationalHotels(H.K.)Ltd.(TIHK)

HongKong

100%

ChieftainCorporationNV

NetherlandsAntilles

100%

InditravelPvt.Ltd.

India

47.08%

IHOCOBV

Netherlands

100%

OrientalHotelsLtd.

India

33.80%

St.JamesCourtHotelsLtd.

UnitedKingdom

54.01%

TajMaduraiLtd.

India

26.00%

TajInternationalHotelsLtd.

UnitedKingdom

100%
KaveriRetreats&ResortsLimited

India

22.73%

InternationalHotelManagementServicesInc.

USA

100%

SamsaraPropertiesLtd.

BritishVirginIslands

100%

IHMS(Australia)PtyLtd.

Australia

100%

LankaIslandResortsLtd.

SriLanka

24.16%

ApexHotelManagementServices(Pte)Ltd.

Singapore

100%

TALLankaHotelsPLC

SriLanka

24.62%

International

JointlyControlledEntities
NameofCompany

CountryofOperation

Holding(%)

Domestic

TajMadrasFlightKitchenPvt.Ltd.

India

50.00%

TajKarnatakaHotels&ResortsLtd.

India

38.81%

TajKeralaHotels&ResortsLtd.

India

28.30%

TajGVKHotels&ResortsLtd.

India

25.52%

TajSafarisLtd

India

22.98%

International
TALHotels&ResortsLtd.

HongKong

27%

IHMSHotels(SA)(Proprietary)Ltd.

SouthAfrica

50%

- 16 25thJune,2012

MicrosecResearch

QuarterlyAnalysis:MarginsdiponbackofunexpectedsluggishnessinOccupanciesandARRs

Particulars(INRinCrores)

Q4FY12A

Q3FY12A

560.15

521.48

530.87

ShareofProfitsinAssociates

OtherOperatingIncome

TotalIncome

560.15

521.48

530.87

5.52%

TotalExpenditure

400.96

380.78

345.25

16.14%

as%ofsales

71.58%

73.02%

65.03%

EBITDA

159.19

140.70

185.62

14.24%

EBITDAMargin(%)

28.42%

26.98%

34.97%

31.89

26.51

EBIT

127.30

EBITMargin(%)

NetSales

Q4FY11A

YoY(%)

QoQ(%)

YoYChange(%)

2862.47

29.24

7.42%

3432.71

2891.71

18.71%

5.30%

2887.01

2410.09

19.79%

84.10%

84.20%

13.14%

545.7

481.62

13.31%

(655)bps

144bps

15.90%

16.83%

(93)bps

27.98

13.97%

20.29%

255.07

227.89

11.93%

114.19

157.64

19.25%

11.48%

290.63

253.73

14.54%

22.73%

21.90%

29.69%

(396)bps

83bps

8.47%

8.86%

(39)bps

29.53

30.35

26.53

11.31%

2.70%

193.38

251.17

23.01%

9.9

8.59

15.43

35.84%

15.25%

50.78

35.73

42.12%

107.67

92.43

146.54

26.53%

16.49%

148.03

38.29

286.60%

1.11

14.81

1.94

42.78%

92.51%

0.46

15.74

102.92%

PBTafterexceptionalitems

106.56

77.62

144.60

26.31%

37.28%

147.57

54.03

173.13%

PBTMargin(%)

19.02%

14.88%

27.24%

(822)bps

414bps

4.30%

1.89%

241bps

41.35

27.14

50.67

18.39%

52.36%

121.75

93.66

29.99%

38.80%

34.97%

35.04%

82.50%

173.35%

65.21

50.48

93.93

25.82

39.63

65.21

50.48

93.93

25.82

39.63

165.15%

MinorityInterest

38.4

11.66

229.33%

SharesofProfit&LossinAssociates

15.64

35.97

143.48%

65.21

50.48

93.93

30.58%

29.18%

3.06

87.26

103.51%

11.64%

9.68%

17.69%

(605)bps

196bps

0.09%

3.05%

314bps

75.95

75.95

75.95

75.95

75.95

BasicEPS

0.86

0.66

1.24

30.58%

29.18%

0.04

1.15

103.51%

AdjustedEPS

0.86

0.66

1.24

30.58%

29.18%

0.04

1.15

103.51%

Interest
OtherIncome
PBTbeforeexceptionalitems
exceptionalitems

Tax
Tax(%)
PATbeforeextraordinaryitems
Extraordinaryitem
PATafterextraordinaryitems

PATafterminorityinterest
PATMargin(%)
PaidupEquityShareCapital

7.42%

FY11A

3432.71

Depreciation

5.52%

FY12A

30.58%

29.18%

30.58%

29.18%

19.92%

165.15%

Source:MicrosecResearch,CompanyData

The Q4FY12 arrived with net sales of INR560.15 crore, which was reasonably up by 7.42% sequentially and 5.52% on YoY basis. This was mainly
throughthemediumofthetoplinegrowthdrivenbynewcapacityandFood&beveragesales.

- 17 25thJune,2012

MicrosecResearch

TheEBITDAforthequarterturnedupatINR159.19crore,whichwasupby13.14%sequentially,but,cascadedby14.24%onyearlybasis.TheEBITDA
Margincameat28.42%,whichwasagainupby144bpssequentially,but,downby655bpsonyearlybasis.

The fall in EBITDA Margins on yearly basis was due to a) abrupt sluggishness in occupancies and ARRs b) increase in staffing costs and operating
expendituretothenewlylaunchedVivantabytajatBengaluruandc)noncashforeignexchangelossduetoadversecurrencymovements.

IHCLpostedaNetprofitofINR65.21crores,whichwasdescendedsharplyby30.58%onyearlyground,butoutperformedsequentiallybymarching
upby29.18%.Q4FY12attainedanetprofitmarginof11.64%,whichwasupby196bpssequentially,butdownby605bpsonyearlybasis.

TheEPSforthequarterwasINR0.86pershareascomparedtoINR0.66pershareinQ3FY12andINR1.24pershareinQ4FY11.

PeerComparison

Source:CompanyData,MicrosecResearch,Bloomberg,INRinCrores

KeyRisks&Concerns

HeavyCredenceonIndianoperations:IHCLheavilydependsonIndiasoperationsonforeigntouristarrivals,Foreignexchangeearningsandvisa
ontravels,etc,whichmakesitinclinedtothedomesticeconomicconditions.Moreover,theoperationsandearningsareessentiallyconcentratedin
keycities,mainlymetrocities.

CompetitionfromInternationalChain:TheIndiansubcontinent,SouthEastAsiaandAsiaPacificwithhighgrowthrateshavebecomethefocus
areaofmajorinternationalchains.SeveralofthesechainslikeCarlson,Starwood,MarriotInternational,Accor,HiltonandIntercontinentalHotels
have announced their plans to establish hotels to take advantage of the demand supply imbalance. These entrants are expected to intensify the
competitiveenvironmentinthecomingyears.ThesuccessofTajGroupwillbedependentuponitsabilitytocompeteinareassuchasroomrates,
quality of accommodation, brand recognition, service level, and convenience of location and to a lesser extent, the quality and scope of other
amenities,includingfoodandbeveragefacilities.

Foreign exchange fluctuation risks: IHCL has a portfolio of foreign currency debt, in respect of which it faces exposure to fluctuations in
currencyaswellasinterestraterisks.

Dependence on the highend Luxury segment: Luxury hotels contribute a significant proportion of the total revenue and earnings of the
Company.Thissegmentisaffectedbytheinternationaleventsandtravelbehaviorandsuffersfromhighoperatingleverage.Adversedevelopment
affectingthesehotelsorthecitiesinwhichtheyoperatecouldhaveamateriallyadverseeffectonIHCL.

- 18 25thJune,2012

MicrosecResearch

Valuation

WefollowedDiscountedCashFlow(DCF)approachtovalueIndianHotelsCompanyLimited(IHCL).Adescriptionofthevaluationisasfollows:

DiscountedCashFlow(DCF)

We utilized Weighted Average Cost of Capital (WACC) of 7.98% to discount the future earnings of Indian hotels Company Ltd (IHCL). In
addition, we applied a terminal growth rate of 2.50% for the earnings beyond FY2016E. We arrived at the WACC with a Cost of Equity of
11.69%,posttaxCostofDebtof4.45%,andDebttoEquityof1.05x.ByadoptingCapitalAssetPricingModel (CAPM),wearriveatCostto
Equity based on Market Return of 12.28%, Risk Free Rate of 8.06% and Beta of 0.86x. Furthermore, the Cost of Debt represents expected
interestcostafterdeductingthetaximpact.Withthis,ourDCFvaluationreflectsatargetpriceof`80.62forthestockwithaperiodof1year,
whichreflectsanupsideof35.15%fromtheCMPof`59.65.

- 19 25thJune,2012

MicrosecResearch

IncomeStatement

Source:CompanyData,MicrosecResearch,Note:TataSonsLimiteddatedJune22,2012,hasexercisedtheoptiontoconvert4,80,00,000Warrantswhereeach
WarrantentitledTataSonsLimitedtosubscribetooneOrdinaryShareoftheCompanyofINR1/eachoftheCompanyatINR103.64pershare

- 20 25thJune,2012

MicrosecResearch

BalanceSheet

Source:CompanyData,MicrosecResearch,INRinCrores,Note:TataSonsLimiteddatedJune22,2012,hasexercisedtheoptiontoconvert4,80,00,000Warrants
whereeachWarrantentitledTataSonsLimitedtosubscribetooneOrdinaryShareoftheCompanyofINR1/eachoftheCompanyatINR103.64pershare

- 21 25thJune,2012

MicrosecResearch

CashFlowAnalysis

CashFlowFortheYearEndedMarch,31st
Particulars(INRinCrores)
A.CashFlowFromOperatingActivities

FY200809A

FY200910A

FY201011A

FY201112A

FY201213E

FY201314E

NetProfitBeforeTax

158.51

33.73

24.75

147.57

182.33

304.60

Depreciation

188.46

218.54

227.95

255.07

254.97

271.36

2.71

4.49

0.82

0.3

0.04

39.16

4.08

20.9

2.39

14.08

4.5

8.22

4.15

ImpairmentofGoodwill

3.26

Expensesondiscountedprojectwrittenoff

5.2

2.03

5.72

4.29

230.46

306.14

251.15

0.02

48.74

20.08

17.89

Contingentprovisionagainststandardassets

0.12

Provisionforcontingentclaims

0.64

5.32

1.61

2.2

0.19

0.2

11.09

0.66

9.03

562.51

430.83

473.06

596.02

630.90

767.55

9.22

2.48

6.20

27.82

2.60

4.45

71.47

9.56

59.53

81.80

16.90

39.09

(Increase)/Decreaseinloansandadvances

0.00

0.00

0.00

19.80

68.35

48.25

Increase/(Decrease)inCurrent&Liabilities

48.50

56.55

12.49

58.28

130.91

73.32

(Increase)/DecreaseinOtherCurrentAssets

64.74

64.74

Cashgeneratedfromoperations

530.32

480.30

526.30

460.14

875.40

845.58

Directtaxespaid

191.42

53.19

13.61

121.75

127.63

152.30

338.9

427.11

512.69

338.39

747.77

693.28

Loss/(Profit)onassetssoldordiscarded
AmortizationofVRSexpenditure
profitonsaleofinvestments
Unrealizedexchangegainonfinancingactivities
ProvisionforDoubtfuldebts

Profitonsaleofhotels
InterestExpenses
InterestIncome
DividendIncome

ProvisionforLoyaltyprogram
Provisionforcontingencies
ProvisionforEmployeeBenefits
OperatingProfitbeforeWCchanges
(Increase)/DecreaseinInventories
(Increase)/DecreaseinSundryDebtors

NetCashfromOperatingActivities
B.CashFlowFromInvestingActivities
PurchaseofFixedAssets
SaleofFixedAssets

193.38

793.64

508.51

412.65

12.83

65.19

106.13

193.60

641.17

191.60

400.00

250.00

- 22 25thJune,2012

MicrosecResearch

SaleofInvestments

12

7720.93

3089.05

352.11

7103.27

3717.24

InterestReceived

32.55

25.35

51.53

DividendReceived

69.45

34.77

31.98

142.13

69.97

67.86

1161.05

304.43

783.34

(Purchase)ofInvestments

DepositsRefundedby/(Placedwith)OtherCompanies(Net)
NetCashusedinInvestingActivities
C.CashFlowFromFinancingActivities
DebentureIssue/Loanarrangementcosts

601.91

160.58

39.26

84.00

560.58

334.00

12.87

23.3

0.52

192.63

791.32

364.34

1287.4

1957.4

49.51

150

150

449.47

1133.59

119.51

18.4

13.4

30.67

1.89

8.66

0.15

823.9

1.02

498.04

120

230.1

324.43

290.68

DividendPaid(includingtaxondividend)

145.49

107.53

88.68

NetCashfrom/(Used)infinancingactivities

1231.56

423.64

85.82

Net(Increase)/Decreaseincash&cashequivalents

409.41

307.9

Cash&CashEquivalentsatbeginning

260.21

Repaymentoflongtermloans&debentures
Proceedsoflongtermloans&debentures
ShortTermLoansRaised/(Repaid)(Net)
LongTermTradeDepositsRaised/(Repaid)
Shareapplicationmoney
ProceedsfromissueofEquityshares
ProceedsfromissueofPreferencesharesbyasubsidiary
InterestPaid

ImpactofEx.FluctuationsonCashandCashEquivalents
Cash&CashEquivalentsatEnd

497.47

193.38

193.60

191.60

63.63

67.02

193.38

71.84

422.02

356.47

105.75

259.03

62.73

252.84

548.72

195.38

172.60

431.63

8.88

12.02

3.13

678.5

548.72

195.38

301.13

431.63

368.89

Source:MicrosecResearch,CompanyData

- 23 25thJune,2012

MicrosecResearch

RatioAnalysis

Source:MicrosecResearch,CompanyData

- 24 25thJune,2012

MicrosecResearch

MicrosecResearch:PhoneNo.:913330512100Email:microsec_research@microsec.in

AjayJaiswal:President,InvestmentStrategies,HeadofResearch:ajaiswal@microsec.in

FundamentalResearch

Name

Sectors

Designation

EmailID

NitinPrakashDaga

IT,Telecom&Entertainment

AVPResearch

npdaga@microsec.in

NaveenVyas

Midcaps,MarketStrategies

AVPResearch

nvyas@microsec.in

GargiDeb

Agriculture&Pharma

ResearchAnalyst

gdeb@microsec.in

SutapaRoy

Economy

ResearchAnalyst

sroy@microsec.in

SanjeevJain

BFSI

ResearchAnalyst

sjain@microsec.in

AnikDas

MidCap

ResearchAnalyst

adas4@microsec.in

NehaMajithia

MidCap

ResearchAnalyst

nmajithia@microsec.in

SoumyadipRaha

MidCap

ExecutiveResearch

sraha@microsec.in

SarojSingh

MidCap

ExecutiveResearch

ssingh2@microsec.in

Technical&DerivativeResearch

VinitPagaria

Derivatives&Technical

VP

vpagaria@microsec.in

RanajitSaha

TechnicalResearch

Sr.Manager

rksaha@microsec.in

InstitutionalDesk

DhruvaMittal

InstitutionalEquities

Sr.Manager

dmittal@microsec.in

PujaShah

InstitutionalDesk

Dealer

pdshah@microsec.in

PMSDivision
SiddharthSedani

PMSResearch

AVP

ssedani@microsec.in

KetanMehta

PMSSales

AVP

ksmehta@microsec.in

Research:FinancialPlanningDivision
ShrivardhanKedia

FPDProducts

ManagerResearch

skedia@microsec.in

ResearchSupport
SubhabrataBoral

ResearchSupport

Asst.ManagerTechnology

Recommendation

Expectedabsolutereturns(%)over12months

StrongBuy

>20%

Buy

between10%and20%

Hold

between0%and10%

Underperform

between0%and10%

Sell

<10%

sboral@microsec.in

MICROSECRESEARCHISALSOACCESSIBLEONBLOOMBERGAT<MCLI>
- 25 25thJune,2012

MicrosecResearch

- 26 25thJune,2012

MicrosecResearch

Disclaimer:
This document is prepared by the research team of Microsec Capital Ltd. (hereinafter referred as MCL) circulated for purely information purpose to the
authorizedrecipientandshouldnotbereplicatedorquotedorcirculatedtoanypersoninanyform.ThisdocumentshouldnotbeinterpretedasanInvestment/
taxation/legaladvice.Whiletheinformationcontainedinthereporthasbeenprocuredingoodfaith,fromsourcesconsideredtobereliable,nostatementinthe
reportshouldbeconsideredtobecompleteoraccurate.Therefore,itshouldonlyberelieduponatonesownrisk.

MCL is not soliciting any action based on the report. No indication is intended from the report that the transaction undertaken based on the information
contained in this report will be profitable or that they will not result in losses. Investors must make their own investment decisions based on their specific
investmentobjectivesandfinancialpositionandusingsuchindependentadvisors,astheybelievenecessary.

- 27
- be liable for any damages whether direct or indirect, incidental, special or
Neither the Firm, nor its directors, employees, agents nor representatives
shall
consequentialincludinglostrevenueorlostprofitsthatmayarisefromorinconnectionwiththeuseoftheinformation.

25thJune,2012

MicrosecResearch