INVESTMENT IDEA 10 JULY 2017

PCG RESEARCH
Berger Paints Ltd.

Industry CMP Recommendation Add on Dips to band Target Time Horizon

Paint Rs 245 Buy and Add on Dips Rs. 210-245 Rs. 289-315 4 Quarters

HDFC Scrip Code BERPAI

Incorporated in 1969 and Headquartered in Kolkata, Berger Paints India Ltd. is the second largest decorative
BSE Code 509480 paint player in India with a market share of ~19%. The company offers a variety of innovative painting
NSE Code BERGEPAINT solutions to its customers in decorative and industrial segment with its strong distribution network comprising
of 150 stock points, 25,000+ paint retailers and employee strength of above 2800. The company has
Bloomberg BRGR
international presence in 4 countries (Nepal, Bangladesh, Poland and Russia).
CMP as on 7 July 17 245
We recommend Berger Paint a Buy at CMP of Rs. 245 and add on decline of Rs. 210 for the target price of Rs
Equity Capital (Rs 289 and 315 for the time horizon of 3-4 Quarters.
95.92
Cr)
Face Value (Rs) 1 INVESTMENT RATIONALE:
Equity O/S (Cr) 95.92 Favorable Indian demographics like increasing urbanization, increase in number of nuclear families, increasing
disposable incomes will drive the demand for decorative Paint in future.
Market Cap (Rs Cr) 23,803
Book Value (Rs) 20 Government is constantly taking initiatives for making housing available for all people of India and some big
initiatives like Housing for all by 2022 and Building Smart city will bring huge demands for all building
Avg. 52 Week
731957 materials including decorative paints. We believe this will be the game changer for the whole paint industry
Volumes
and Berger paint is in the best place to ripe benefit out of it.
52 Week High 276
52 Week Low 178 Another factor boosting the paint market is the growth in the automotive industry which creates huge demand
for industrial paints. The Indian auto industry is one of the largest in the world with an annual production of
23.37 mn vehicles in FY 2014-15, following a growth of 8.68% over the last year.
Shareholding Pattern (%)
The paint industry is raw material intensive. The key two raw materials are Crude Oil and Titanium Dioxide
Promoters 75.0
(TiO2). Sustained downturn in Crude oil prices helps in reducing input cost for company and leads to
Institutions 14.1 improvement in OPMs. TiO2 has also stabilized after a recent rise. Raw material prices under control helps
Non Institutions 10.9 paint players maintain margins.

PCG Risk Rating*
* Refer Rating explanation
Nisha Sankhala
nishaben.shankhala@hdfcsec.com
Yellow Berger paint is also looking for new avenues for increasing sales. Recently company has informed that they are
planning to launch new products in home decorative segments. Company has also done several merger and
acquisition for increasing its reach. Normal monsoon is expected this time, which will boost economic growth of
the country and this will in turn help the sector in growth.

Private Client Group - PCG RESEARCH Page |1

 PCG RESEARCH
In the past 5 years the company has managed to post ~8% CAGR in sales, EBITDA has witnessed ~20%
CAGR and Net Profit at ~21% CAGR. OPM has increased 12% to 18.2% in the same time period. This shows
that Berger Paints has proved itself one of the best among the peers in the industry. We expect sale to post
13% cagr and PAT to see 18% cagr over FY17-19E.

Berger has almost 30 years for dividend pay-out history. With negligible debt on books (0.2x D/E) and Cash
& Cash Equivalents of around ~ Rs 470 cr.

View & Valuation:

Governments Push towards infra development, benign input cost, good monsoon and implementation of GST
will benefit the company in the coming years. Company has posted strong financials in the past and we
expect the trend to remain intact.
At the current price stock is trading at 36x of FY19E, this is cheaper compared to peers. We recommend
Berger Paint a Buy at CMP of Rs. 245 and add on decline of Rs. 210 for the target price of Rs 289 and 315 for
the time horizon of 3-4 Quarters.
Peer Comparison:

EPS P/E
Company CMP FY17P FY18E FY19E FY17P FY18E FY19E
Asian Paints* 1125 21 23.8 28 53.6 47.3 40.2
Berger Paints 245 4.9 5.8 6.8 50.2 42.0 36.0
Kansai Nerolac* 439 9.5 10.3 11.9 46.2 42.8 37.0
* Bloomberg Estimates

Berger has given consistent returns to investors across all business cycles.

Price CAGR 1 Yr 5 Yr 10 Yr 15 Yr 20 Yr
ASIAN PAINT 10 23 30 30 25
BERGER PAINT 25 38 30 36 30

Risk & Concerns:

Fluctuations in raw material prices.
Paint industry itself is seasonal in nature.
Highly competitive business, so company has to spend big consistently on the Advertisements to
maintain the market share.

Private Client Group - PCG RESEARCH Page |2

 PCG RESEARCH

Quarter Update:
(Rs Cr) Q4 FY17 Q4 FY16 YoY Q3 FY16 QoQ FY16 FY17 FY18E FY19E
Sales 1112.9 1028.5 8.2 1174.55 -5.2 4223 4552 5067 5771
EBITDA 181.6 168.4 7.9 193.1 -5.9 685 828 963 1123
Net Profit 105.5 92.0 14.7 109.1 -3.3 383 489 577 676
EPS (Rs) 5.3 4.9 5.8 6.8
P/E 46.0 50.2 42.0 36.0
EV/EBITDA 34.9 28.9 24.9 21.3
Source: Company, HDFC sec Research

Highlights of the Concall:

Decorative business showed improved performance for the quarter over corresponding quarter in the
aftermath of demonetization.

Decorative paint segment is expected to look upon forecast of good monsoon.

Robust value growth in decorative business expected riding on price increases with effect from 1st
March 2017 and 1st May 2017.

Infrastructure segment is expected to improve on the back of increased spending in government

projects.

Material cost as a % of sales was higher over corresponding quarter due to impact of price decrease in
4FY2016 and increasing trend for certain raw materials.

Company's wholly owned subsidiary BJN Nepal and BOLIXS showed robust performance. Company's
JV, Berger Becker Coatings showed impressive performance after a sluggish FY16.

Upward trend in key RM prices and short term impact of GST may remain concern

Private Client Group - PCG RESEARCH Page |3

 PCG RESEARCH

INDUSTRY OVERVIEW:
The Indian paint industry can be categorized into two broad categories viz, decorative and industrial paints.
Decorative category accounts for 70% of the overall paints market in India in value terms while Industrial
category accounts for rest.

Decorative Paints:
Decorative paints' segment includes exterior & interior wall paints, varnishes, enamels, primers, putties,
distempers, etc. The demand for decorative paints is a direct demand and mainly arises from household &
building painting. Demand in the festive season (September-December) is significant, as compared to other
periods.

Enamels are the most widely used followed by distempers and emulsions. Interior and exterior paints
account for 75% and 25% of the decorative paints respectively. The main growth drivers for this segment
have been shortening of repainting cycle and better demand from smaller towns. Another important driver
for decorative paint segment is the rise in number of new homes underpinned by rising income levels and
shift from joint families to nuclear families.

Industrial Paints:

This segment includes paints used in automobiles, auto ancillaries, consumer durables, containers, etc. User
industries for industrial paints include automobiles engineering and consumer durables. The industrial paints
segment is far more technology intensive than the decorative segment.

Indian organised paint industry is an oligopolistic market, as the industry is dominated by 5 players

Market Share of Leading Players in 2008 Market Share of Leading Players in 2016

Berger Kansai Berger

Paints Kansai
Paints Nerolac
19% Nerolac
17% 16% 15%
Akzo Akzo
Noble Noble
11%
Asian 11%
Asian
Paints Shalimar Paints
52% 53% Shalima
Paints
r Paints
4%
2%

Private Client Group - PCG RESEARCH Source: Company, HDFC sec Research Page |4
 PCG RESEARCH

The latest report India Paint Industry Outlook 2022 of Indian Paint Association (IPA) says that
the Indian paint market is expected to reach Rs.70875 cr by 2019-20 from around Rs.40300 cr in
2014-15. The decorative paint market is expected to witness CAGR of 12.7% and the industrial
paint market to post CAGR of 9.5%.

BUSINESS BACKGROUND:
Incorporated in 1969 and Headquarters in Kolkata, Berger Paints India Ltd. is the second largest decorative
paint player in India with a market share of 19%. The company offers a variety of innovative painting
solutions to its customers in decorative and industrial segment with its strong distribution network
comprising of 150 stock points, 25,000+ paint retailers and employee strength of above 2800. Around 70%
of the Bereger s revenue comes from the decorative paints, 20% from the Industrial paints and remaining
from the other business. The company also has an international presence in 4 countries (Nepal, Bangladesh,
Poland and Russia). Berger has total 12 plants across the country with a combined capacity of 600,000
tonnes per annum.

Diversified Business Segments:

Private Client Group - PCG RESEARCH Page |5

 PCG RESEARCH

Product Portfolio:

Source: Company, HDFC sec Research

INVESTMENT RATIONALE:

Favourable Environment for growth

The paint industry continues to outperform the overall GDP growth, mainly because of the continued thrust of
the major paint manufacturers to popularize paints and the still relatively low per capita paint consumption of
around 2.7 kg in India. However, India has been one of the few countries where there has been a consistent
overall GDP growth (at 5-year CAGR of more than 6%) and an industrial GDP growth (of about 8.5%). These
have helped the paint industry to increase its volume. Monsoon is expected to be Normal this time which will
boost economic growth and will ultimately help the sector in growth.

Favorable Indian demographics like increasing urbanization, increase in number of nuclear families,
increasing disposable incomes etc. will drive demand for decorative Paint in future.

In the medium-term, we believe implementation of the Seventh Pay Commission (would boost discretionary
expenditure) coupled with expectations of better monsoons (would help in improving rural income) would be
a strong trigger for the paint industry. This is evident from the history that the paint industry recorded strong
volume growth of ~15% post implementation of the Sixth Pay Commission.

More than 65% of decorative paints demand contributed by repainting demand, a reduction in duration of
repainting activity from eight or nine years to four or five years has also been a reason for strong decorative
paints demand.

Private Client Group - PCG RESEARCH Page |6

 PCG RESEARCH

Another factor boosting the paint market is the growth in the automotive industry which creates huge
demand for industrial paints. The Indian auto industry is one of the largest in the world with an annual
production of 23.37 mn vehicles in FY 2014-15, following a growth of 8.68% over the last year.

The Company believes that continued urbanization, with support for the agriculture sector, will continue to
provide the right impetus for the industry to perform even better in the future.

Government Initiatives
Government is constantly taking initiatives for making house available for all people of India and this has
fueled all the housing ancillary including decorative paint industry. Some big steps includes,
Housing for all by 2022: The government has launched the 'Housing for All by 2022' programme for the
rehabilitation of slum-dwellers and promotion of affordable housing for the urban poor. The target is to
provide nearly 20mn houses over 7 years. The scheme envisages rehabilitation of slum dwellers with
participation of private developers, promotion of affordable housing for weaker section through credit-linked
subsidy, affordable housing in partnership with public and private sectors, and subsidy for beneficiary-led
individual house construction or enhancement.

Smart City Mission: The government of India has a vision of developing 100 smart cities as satellite towns
of larger cities and by modernizing the existing mid-sized cities. A total of Rs 98000 Cr has been approved by
the Indian Cabinet for development of 100 smart cities and rejuvenation of 500 others.

These steps will bring huge demands for all building materials including decorative paints. We believe this will
be the game changer for the whole paint industry and Berger paint is in the best place to ripe benefit out of
it.

GST to have neutral to positive impact on the Industry

Implementation of Goods and Services Tax (GST) is unlikely to have any significant impact on the price of
paints for end-consumers. As paint is in the tax slab of 28% under GST, which is closer to the effective rate
of tax that the industry is paying at present. However, GST remains a concern as it is expected to
temporarily impact operations during the transition. Management announced a 2.5% price hike effective 1-
May17 across the decorative paint portfolio.
The positive impact would be reduced tax arbitrage for the unorganized segment (30-35% of total industry).
This will provide additional benefit to organized players in the long run (shift in demand of branded product
category).

Raw material prices trend

The paint industry is raw material intensive. Around 300-400 raw materials are required to manufacture
different kinds of paints. But out of them Crude Oil and Titanium Dioxide remains two main products, which

Private Client Group - PCG RESEARCH Page |7

 PCG RESEARCH

constitutes almost ~70% of total input costs. So any price change in these two affects the most to the gross
margin of the company.

The Crude prices have been seeing significant decline trend nowadays. So this can create a very positive
impact on the coming quarter numbers as almost 50% of raw material in paints is dependent on crude oil.
The price of Titanium Dioxide (TiO2), the other important raw material which constitutes almost 10-12% of
total input costs has also stabilized after showing a rise earlier this year. This rise has lead company to rise
the paint prices and even margins also declined in the Q4FY17, but going further we do not expect any sharp
rise in the price of TiO2.

Declining Crude prices (INR/barrel) Stable TiO2 Prices (INR/kg)

Source: Bloomberg, HDFC sec Research Source: Bloomberg, HDFC sec Research

New Product launch- Diversification beyond paints

Recently company has announced that it is planning to foray into the home decor business vertical and
launch a basket of products other than paints which has so far been its sole focus area since the
company's inception in India. Under consideration is the entry into segments such as sealants, adhesives,
doors, windows, wooden floor and laminates, tiles, decorative items made of brass and copper, industrial
flooring and various items made of wood, board, aluminums and other materials.

Private Client Group - PCG RESEARCH Page |8

 PCG RESEARCH

Although the company is seeking shareholders' approval to enter a basket of new segments, it is not
expected to enter more than 2-3 segments in the initial days.
The company will be leveraging its existing manufacturing facilities and the marketing network to take this
new venture forward.

Acquisition of Saboo Coatings, an industrial coatings company

Berger paints had acquired Saboo Coatings Pvt. Ltd. (SCPL) at a consideration of Rs 818mn to foray into
specialty liquid coating segment. SCPL is in manufacturing of specialty liquid coating in segments of
agriculture & construction equipment, consumer electronics, automotive, general industrial, hardware and
home furnishing. The total revenue of the company was Rs 894mn in FY17.

Strong Financials and Healthy growth outlook

In the past 5 years the company has posted~8% CAGR in sales while EBITDA has grown faster at ~20% and
Net Profit at ~21% CAGR. OPM has surged from 12% to 18.2% in the same time period. This shows that
Berger Paints has proved itself one of the best among the other players in the industry. We expect sales to
post 13% CAGR and NP to witness 18% cagr over FY17-19E.

Berger has almost 30 years for dividend pay-out history. With negligible debt on books (0.2x D/E) and Cash
& Cash Equivalents of around ~ Rs 470 cr.
We recommend Berger Paint a Buy at CMP of Rs. 245 and add on decline of Rs. 210 for the target price of Rs
289 and 315 for the time horizon of 3-4 Quarters.

Private Client Group - PCG RESEARCH Page |9

 PCG RESEARCH

Housing for all initiative to drive volume growth Price hike and reducing crude prices will help in
improving margin

Source: Company, HDFC sec Research Source: Company, HDFC sec Research

Reducing Debt trend Robust Return Ratios

Source: Company, HDFC sec Research

Source: Company, HDFC sec Research

Private Client Group - PCG RESEARCH P a g e | 10

 PCG RESEARCH

Balance Sheet (Consolidated)

Income Statement (Consolidated) As at March FY15 FY16 FY17 FY18E FY19E
SOURCE OF FUNDS
(Rs Cr) FY15 FY16 FY17 FY18E FY19E
Share Capital 69.3 69.4 97.1 97.1 97.1
Net Revenue 4322 4223 4552 5067 5771 Reserves 1191 1493 1804 2145 2548
Other Income 36.0 40.3 108.8 110.0 118.0 Shareholders' Funds 1260.6 1562.1 1901.6 2242.4 2645.0
Total Income 4358 4263 4661 5177 5889 Long Term Debt 251.2 210.8 262.1 269.9 291.5
Growth (%) 11.6 -2.2 9.3 11.1 13.8 Net Deferred Taxes 57.9 68.4 81.5 73.0 65.0
Long Term Provisions & Others 13.9 12.4 15.8 15.8 15.8
Operating Expenses 3811.3 3578.1 3832.9 4213.7 4765.7
Minority Interest 0.0 0.0 0.0 0.0 0.0
EBITDA 546.7 685.1 828.2 963.0 1123.2 Total Source of Funds 1584 1854 2261 2601 3017
Growth (%) 17.0 25.3 20.9 16.3 16.6 APPLICATION OF FUNDS
EBITDA Margin (%) 12.6 16.2 18.2 19.0 19.5 Net Block 1031 828 1019 1207 1329
Deferred Tax Assets (net) 0.0 0.5 0.8 0.8 0.8
Depreciation 92.5 98.7 108.1 112.1 128.6
Long Term Loans & Advances 46.4 309.8 352.5 348.8 350.3
EBIT 454 586 720 851 995 Total Non Current Assets 1078 1138 1373 1557 1680
Interest 50.1 27.3 16.2 20.7 22.0 Current Investments 134.5 299.9 367.3 442.3 501.3
PBT 404 559 704 830 973 Inventories 719.5 733.2 935.5 902.3 1027.7
Tax 139.4 176.2 214.8 253.2 296.6 Trade Receivables 535.2 545.4 578.1 624.7 711.5
Short term Loans & Advances 60.8 4.7 11.3 21.0 31.4
RPAT 265 383 489 577 676
Cash & Equivalents 169.8 105.3 102.5 223.5 352.8
Growth (%) 6.1 40.0 28.1 19.5 16.6 Other Current Assets 11.7 41.8 63.1 78.8 94.6
EPS 3.8 5.3 4.9 5.8 6.8 Total Current Assets 1631 1730 2058 2293 2719
Source: Company, HDFC sec Research Short-Term Borrowings 357.6 98.8 144.1 151.3 166.5
Trade Payables 559.7 669.9 761.2 808.1 900.9
Note: Financials for FY16 onwards are based on Ind-AS and hence FY15 numbers
are not strictly comparable.
Other Current Liab & Provisions 143.9 231.7 244.4 256.7 264.4
Short-Term Provisions 71.2 23.4 29.7 32.2 35.0
Total Current Liabilities 1132.3 1023.8 1179.5 1257.2 1390.6
Net Current Assets 499.1 706.7 878.2 1035.3 1328.6
Other Assets 7.0 9.0 10.1 9.0 9.0
Total Application of Funds 1584 1854 2261 2601 3017

Source: Company, HDFC sec Research

Private Client Group - PCG RESEARCH P a g e | 11

 PCG RESEARCH

Cash Flow Statement (Consolidated) Key Ratios

(Rs Cr) FY15 FY16 FY17 FY18E FY19E FY15 FY16 FY17 FY18E FY19E
Reported PBT 404.1 559.1 703.9 830.2 972.6 EBITDA Margin 12.6 16.2 18.2 19.0 19.5
Non-operating & EO items -77.7 18.5 -89.3 -110.0 -118.0 EBIT Margin 10.5 13.9 15.8 16.8 17.2
Interest Expenses 50.1 27.3 16.2 20.7 22.0 APAT Margin 6.1 8.8 10.4 11.2 11.5
Depreciation 92.5 98.7 108.1 112.1 128.6 RoE 22.2 26.3 27.4 27.4 27.0
Working Capital Change -216.5 -272.1 -174.4 -44.9 -179.1 RoCE 28.7 31.6 31.9 32.7 33.0
Tax Paid -139.4 -176.2 -214.8 -253.2 -296.6 Solvency Ratio
OPERATING CASH FLOW ( a ) 113.1 255.4 349.6 554.9 529.5 Net Debt/EBITDA (x) 0.6 -0.1 -0.1 -0.3 -0.4
Capex -106.5 104.9 -299.8 -300.0 -250.0 D/E 0.5 0.2 0.2 0.2 0.2
Free Cash Flow 6.6 360.3 49.8 254.9 279.5 Net D/E 0.2 -0.1 0.0 -0.1 -0.1
Investments 4.0 -263.9 -42.9 3.7 -1.5 Interest Coverage 9.1 21.5 44.4 41.1 45.2
PER SHARE DATA
Non-operating income 36.0 40.3 108.8 110.0 118.0
EPS 3.8 5.3 4.9 5.8 6.8
INVESTING CASH FLOW ( b ) -66.5 -118.6 -233.9 -186.3 -133.5
CEPS 5.2 6.8 6.0 7.0 8.1
Debt Issuance / (Repaid) 97.8 -31.5 67.8 -0.6 13.6
BV 18.2 21.3 19.6 23.1 27.2
Interest Expenses -50.1 -27.3 -16.2 -20.7 -22.0
Dividend 1.3 1.7 1.8 2.0 2.3
FCFE 54.3 301.5 101.4 233.6 271.1
Turnover Ratios (days)
Share Capital Issuance 0.0 0.0 27.8 0.0 0.0
Debtor days 45.2 47.1 46.4 45.0 45.0
Dividend -108.7 -142.4 -197.9 -226.2 -258.3
Inventory days 59.8 62.8 66.9 65.0 65.0
FINANCING CASH FLOW ( c ) -61.0 -201.2 -118.6 -247.5 -266.7
Creditors days 53.6 68.3 72.5 70.0 69.0
NET CASH FLOW (a+b+c) -14.3 -64.4 -2.9 121.1 129.2
Working Capital Days 51.4 41.6 40.8 40.0 41.0
Closing Cash 169.8 105.3 102.5 223.5 352.8
VALUATION
Source: Company, HDFC sec Research
P/E 64.1 46.0 50.2 42.0 36.0
P/BV 13.5 11.5 12.5 10.6 9.0
EV/EBITDA 43.8 34.9 28.9 24.9 21.3
EV / Revenues 5.5 5.7 5.3 4.7 4.1
Dividend Yield (%) 0.5 0.7 0.7 0.8 0.9
Source: Company, HDFC sec Research

Private Client Group - PCG RESEARCH P a g e | 12

 PCG RESEARCH

Rating Chart

R HIGH
E
T
U MEDIUM
R
N LOW
LOW MEDIUM HIGH
RISK

Ratings Explanation:

RATING Risk - Return BEAR CASE BASE CASE BULL CASE

IF RISKS MANIFEST
IF INVESTMENT
PRICE CAN FALL 15%
IF RISKS MANIFEST RATIONALE
LOW RISK - LOW & IF INVESTMENT
BLUE PRICE CAN FALL FRUCTFIES PRICE
RETURN STOCKS RATIONALE
20% OR MORE CAN RISE BY 20% OR
FRUCTFIES PRICE
MORE
CAN RISE BY 15%
IF RISKS MANIFEST
IF INVESTMENT
PRICE CAN FALL 20%
MEDIUM RISK - IF RISKS MANIFEST RATIONALE
& IF INVESTMENT
YELLOW HIGH RETURN PRICE CAN FALL FRUCTFIES PRICE
RATIONALE
STOCKS 35% OR MORE CAN RISE BY 35% OR
FRUCTFIES PRICE
MORE
CAN RISE BY 30%
IF RISKS MANIFEST
IF INVESTMENT
PRICE CAN FALL 30%
IF RISKS MANIFEST RATIONALE
HIGH RISK - HIGH & IF INVESTMENT
RED PRICE CAN FALL FRUCTFIES PRICE
RETURN STOCKS RATIONALE
50% OR MORE CAN RISE BY 50%
FRUCTFIES PRICE
OR MORE
CAN RISE BY 30%

Private Client Group - PCG RESEARCH P a g e | 13

 PCG RESEARCH

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year.

Sell: Stock is expected to decline by 10% or more in the next 1 Year.

Private Client Group - PCG RESEARCH P a g e | 14

 PCG RESEARCH

Disclosure:
I, Nisha Sankhala, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL
has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific
recommendation(s) or view(s) in this report.
Research Analyst or her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or her relative or HDFC Securities Ltd. or its Associate may have beneficial
ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its
associate does not have any material conflict of interest.
Any holding in stock No
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.

Disclaimer:
This report has been prepared by HDFC Securities Ltd and is meant for sole use by the recipient and not for circulation. The information and opinions contained herein have been compiled or arrived at, based upon
information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its
accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document is for information purposes only. Descriptions of any company or companies or their
securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments.
This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident or located in any locality, state, country or
other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject HSL or its affiliates to any registration or licensing requirement
within such jurisdiction.
If this report is inadvertently send or has reached any individual in such country, especially, USA, the same may be ignored and brought to the attention of the sender. This document may not be reproduced,
distributed or published for any purposes without prior written approval of HSL.
Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or the income derived from them. In addition,
investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk.
It should not be considered to be taken as an offer to sell or a solicitation to buy any security. HSL may from time to time solicit from, or perform broking, or other services for, any company mentioned in this mail
and/or its attachments.
HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) 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 company(ies) discussed herein or act as an advisor or
lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.
HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report,
including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc.
HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report, or may make sell or purchase or other
deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report.

HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve
months.
HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this report for services in respect of managing or
co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business.
HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HSL nor
Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or
brokerage service transactions. HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any
compensation/benefits from the Subject Company or third party in connection with the Research Report.

HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022)
2496 5066
Compliance Officer: Binkle R. Oza Email: complianceofficer@hdfcsec.com Phone: (022) 3045 3600

HDFC Securities Limited, SEBI Reg. No.: NSE-INB/F/E 231109431, BSE-INB/F 011109437, AMFI Reg. No. ARN: 13549, PFRDA Reg. No. POP: 04102015, IRDA Corporate Agent License No.: HDF 2806925/HDF
C000222657, SEBI Research Analyst Reg. No.: INH000002475, CIN - U67120MH2000PLC152193

Private
MutualClient Group - PCG
Funds Investments RESEARCH
are subject to market risk. Please read the offer and scheme related documents carefully before investing. P a g e | 15