Table of Contents

Indian Sugar Sector - .....................................................................................................................................................

Embracing a paradigm shift - from cyclical commodity play to clean energy contributor ............................................... 2
Sectoral background....……………………………………………………………………………...……………….…..……….3

Key sector drivers ...........................................................................................................................................................

Ethanol Blending Policy (EBP), a potential game changer ........................................................................................... 5
International sugar prices – at multi-year high .............................................................................................................. 7
Improving demand-supply scenario.............................................................................................................................. 8
Massive domestic Ethanol demand ............................................................................................................................ 10
Subsidiaries for export – Implausible over next season .............................................................................................. 15
Conclusion ................................................................................................................................................................. 15

Stock Ideas* .....................................................................................................................................................................

Triveni Engineering & Industries ................................................................................................................................ 17
Dhampur Sugar Mills.................................................................................................................................................. 18
Shree Renuka Sugars ................................................................................................................................................ 19
Industry peer comparison ........................................................................................................................................... 20

*CSEC does not have active coverage on the mentioned stocks

1
Sector Report Sugar
17 September 2021
Embracing a paradigm shift – from cyclical commodity play to clean energy contributor
The incumbent government has announced to advance the obligatory use of 20% ethanol in petroleum products to 2025
from earlier 2030. We believe, the recent initiatives along with other structural changes are likely to cast long-term positive
effects on domestic sugar industry. The government seems to have taken two birds in one shot with this move. The
dynamics of sugar industry are likely to flourish going forward in the wake of rising demand for ethanol. We believe
ethanol production will add substantial value to sugar eco-system as it will create an alternative source of income to
traditional monotonic sugar industry. The profitability of sugar producers is expected to improve due to higher margins of
ethanol business. Also, India’s dependence over the fuel imports is likely to get curb by certain extent, with higher use of
domestically produced ethanol. We anticipate the recent developments in sugar industry will lead to an evolved
ecosystem as it will transition from traditional cyclical commodity play to clean energy contributor.

• Ethanol blending policy (EBP), a potential game changer – Ethanol is a viable substitute to petroleum
products and hence a boon for India to curb imports of petroleum products (~85% of total requirement is
imported). The successful implementation of EBP is expected to save USD 4 bn per annum (~8% of total cost
incurred on petroleum imports in 2020-21). The EBP is expected to give a fillip to sugar industry in India by
providing an alternate source of income. The diversion of cane production towards ethanol manufacturing will
result in moderation of sugar production thereby curbing the burgeoning inventory. Moreover, the profitability of
sugar mills is set to improve as ethanol is highly remunerative vis-à-vis sugar. Increasing proportion of B-Heavy in
ethanol production will improve the distillery margins.
• International sugar prices – at multi-year high - Sugar prices on global platform are a pure play of supply and
demand equation. The unfavorable climatic conditions in UK & Thailand (amongst largest exporters) led to lower
production during current sugar season. Brazil, the largest exporter, is in a state of dilemma over diversion of
cane production to ethanol or sugar manufacturing. Currently, the ethanol manufacturing in Brazil is highly
remunerative in comparison to sugar and hence the sugar output is on decline. Hence, the lower sugar production
has raised supply constraints implying constant surge in price in recent times. The recovery in global economies
post unlocking led to resurgence in sugar demand which supported prices. Supply situation is likely to be driven
by outcomes of sugar output from largest producers and ambiguity built over Brazil’s situation (largest producer).
The global white sugar prices in Aug-21 were trading at $504 per tonne (up ~28% YoY).
• Improving domestic demand-supply scenario – Sugar situation in India has perennially remained in a
convoluted state thereby imposing cyclical swings. Over the past 3 years, India is witnessing a surplus supply
situation in the wake of bumper crop production led by plentiful water availability. Strong monsoon & high
reservoir levels (~30% increase by SS22) in key states likely to augment the cane acreage and consequently
increase the sugar production to ~30 MnT in SS22. With rising demand of ethanol, the surplus cane production
will be diverted towards ethanol production (~3-3.5MnT) consequently attaining parity in demand and supply
scenario. On flip side, demand is expected to remain stable at ~26.5 MnT registering a 3-4% growth YoY.
• Massive domestic ethanol demand - The dynamics of ethanol production in India is expected to significantly
magnify post the recent announcements. The requirement of ethanol for blending in petrol is expected to surge to
~1,016 cr litres by 2025 from mere 173 cr litres in 2020, implying >5x growth. Despite consideration of good EV
uptake, the ethanol fuel demand is expected to touch the levels of 721 cr litres by 2025. The global ethanol
market is estimated to increase at a CAGR of ~6%, from a market size of USD 93.7 bn in 2020 to USD137 bn by
the end of 2027.
• Subsidies for export – implausible over next season – Subsidies for export in recent past have been more
than a temporary relief for sugar industry. Over the past 3 years, the glut like situation on domestic front owing to
oversupply has led to burgeoning inventory levels. Government has been proactive not only in boosting exports to
deal the higher inventory levels but also providing subsidy to sugar mills. The export equation has become viable
only under the government subsidy aid. Since the export equation turning favourable post constant rise in
international sugar prices, the subsidy offered has been tapered on periodic basis (from ₹10.5/kg in SS20 to
₹5.8/kg in SS21, and further, to ₹4/kg in May-21). International sugar prices are anticipated to trade higher hence
subsidy offered seems to be out of play from next sugar season.

Nilesh Patil +91-44-4004 7266 nileshmp@chola.murugappa.com

2
 Sectoral background

India is hailed as a homeland to both sugarcane and sugar, thus sugar industry in India inherits a rich and long history. The
evolution of sugar industry has been illustrious and paralleled to country’s rapid industrialization spread over the decades.
The farmers, the mill owners and consumers are deemed to be the traditional stakeholders along with comparatively newer
additions of OMCs and country’s liquor manufacturers. The government plays a regulator role as it governs the industry via
nominated apex body. The government administers end-to-end activities such as licensing/capacity/cane area,
procurement/pricing/sugar pricing/distribution and Imports and exports. The industry has witnessed a phased liberalization
over the decades, yet the mandate remains solely with the government. A blend of reactive and proactive policy
implementations undertaken by government has yielded impressive results for the sugar business. The Indian sugar
industry has come a long way as it transitioned from the state of being sugar deficient producer to surplus manufacturer.

The tight gap between demand and supply undermines India’s tag of being largest sugar producer (~29.66 MnT with 18%
total sugar production) in the world. The consumption of ~25.51 MnT signifies an enormous consumer base. The periodic
fluctuations in consumption trend and weather conditions give rise to uncertainty (events of surplus or deficit situations).
Sugar business in India has perennially remained a complex & uncertain story. Every three-four year a nimiety situation
arises owing to bumper crop resulting fall in prices and margins for sugar companies followed by a couple of years of
shortfall which aids in price and margins recovery. Hence the sector is termed as cyclical in nature. Due to the political
intervention, sugar scenario in India has been a case of protectionism. The government has implemented various policies
to streamline the sugar sector but those remained largely inclined towards the welfare of farmers and consumers while
being inconsistent to mill owners. Consequently, the profitability of sugar manufacturers has deteriorated over the period.
The profitability math has worsened in recent past due to excessive debt piling and price erosion.

Domestic demand-supply scenario – in Mn Tonnes Rising cane production in recent past – in Mn Tonnes

35 500
30 450
400
25
350
20
300
15 250
10 200
5 150
0 100
SS14
SS10
SS11
SS12
SS13

SS15
SS16
SS17
SS18
SS19
SS20
SS21E
SS22E
SS16
SS10

SS11

SS12

SS13

SS14

SS15

SS17

SS18

SS19

SS20

Opening stock Sugar Production Sugar Consumption Sugarcane production (in mnt)

Source: Industry data

The cyclicality in the sugar sector seems to be subsiding since SS18 as the supply has vastly outpaced the demand
resulting in high inventories. Going forward, the trend is expected to continue owing to bumper crop production estimates
and stable demand. However, the surplus production capacity with the mills has been capping the upside in the sugar
prices even when the Fair and Remunerative Price (FRP) and operating cost for the mills continue to go up. The FRP has
doubled in past few years vis-à-vis 15% rise in sugar prices. Although the surplus situation is favourable for farmers it
disturbs mill owner’s equation as they are obliged to crush all the cane received. Resultantly, the arrears (the money owed
by mills to farmers) had swelled to decadal high of ₹229,000 mn as of Feb-21. Recently, the state governments have made
payments to farmers which has partially alleviated the situation.

3
Brazil’s ethanol story – an ideal case to replicate

Brazil & Thailand (combined export of ~28.3 MnT) followed by UK have long been the major sugar exporters to the world.
The demand supply curve has mostly remained inclined towards higher supply. Brazil has emerged on world platform as
the largest export player of sugar along with ethanol production. During mid-eighties, while sugar prices crashed and oil
crisis grappled world economy, Brazil bolstered its ethanol production capacities via lower interest rates to sugar mills, tax
incentives and fixed ethanol prices. Conscious efforts undertaken in due course of time to increase production of ethanol (in
the wake of favourable profit math) yielded impressive results for Brazil. Currently, the country accounts for 30% of ethanol
production and 17% of sugar production.

Brazil’s dominance in ethanol & sugar production Brazil – Increasing Ethanol utilization
60% 100%
48%
50% 80%

40% 60%
30%
30% 40%
20% 17% 18%
20%
8%
10% 2% 0%

2004-05
2000-01

2002-03

2006-07

2008-09

2010-11

2012-13

2014-15

2016-17

2018-19

2020-21
0%
Ethanol Sugar Ethanol blending

Brazil % of World India % World Sugar Utilization Ethanol Utilization

Source: Industry data; CSEC Source: USDA/ATO/Sau Paulo

We believe, India can replicate the success story of ethanol in Brazil and emerge as a major player in ethanol
manufacturing on global stage. Recent revisions of EBP pose major opportunities for India sugar mills to better utilize
surplus sugar proceeds & improve financials as margins from ethanol are higher than sugar.

At present, the domestic sugar market is in a glut situation from supply side inducing the prices to trade in rangebound
territory. The export subsidy allocation and MSP announcements by government bode well for the sugar industry amidst the
bumper sugarcane production and subsequently to a piled-up inventory. While the demand is stable, bumper sugar cane
crop is resulting in higher supply.

On contrary, the international sugar prices are trading near 4-year high levels owing to supply constraints across the globe.
The supply is expected to remain inadequate owing to lower output expected from leading sugar producers such as
Thailand & EU. Brazilian production is expected to remain uncertain (mostly lower) owing to lower crop yields and diversion
of crop towards ethanol production.

Global sugar price chart – Raw Sugar Global sugar price chart – White Sugar
40 1000
35 900
30 800
700
25
600
20
500
15 400
10 300
5 200
May-14
May-12
Jan-13

May-16

May-18

May-20

May-12

May-14
Jan-15

May-16

May-18

Sep-19
May-20
Jan-21
Jan-11
Sep-11

Sep-13

Jan-15
Sep-15

Jan-17
Sep-17

Jan-19
Sep-19

Jan-21
Sep-21

Jan-11
Sep-11

Jan-13
Sep-13

Sep-15

Jan-17
Sep-17

Jan-19

Sep-21

Raw Sugar (USD/lb) White Sugar (USD/MT)

4
 Key sector drivers

1. Ethanol Blending Policy – a potential game changer

The sugar industry in India is on the cusp of a great transition, as it is envisaged to undergo a transformational change i.e.
diversion of sugar towards ethanol production. The sugar manufacturers are embracing government’s constant thrust over
incremental use of ethanol in petroleum products. The shift towards ethanol production is likely to act as a superlative
substitute for mitigating the effects of glut like scenario in domestic sugar market. The policy also presents an opportunity
for mill owners to better utilize surplus sugar proceeds & improve financials as margins from Ethanol are higher compared
to sugar.

Although a late starter, Government is now taking rapid strides towards expanding ethanol usage in petroleum products to
reduce dependency over imported oil. In past, government has taken multiple policy initiatives that have benefitted the
interest of farmers and consumers, but EBP policy seems to be beneficial for the mill owners.

In addition to earlier policy initiatives implemented, incumbent government has recently announced to advance the
obligatory use of 20% ethanol in petroleum products to 2025 from earlier 2030. We believe, the recent initiatives are likely
to cast long term positive effects on domestic sugar industry. The government seems to have taken two birds in one shot.
The dynamics of sugar industry are set to change with expected rise in ethanol demand. The ethanol production provides
alternative source of income to traditional monotonic sugar industry. The profitability of sugar producers is expected to
improve due to higher margins of ethanol business. Also, India’s dependence over the fuel imports is likely to get curb by a
certain extent with ethanol blending.

The government announced major revisions to National Bio-Fuel policy in May-2018 to increase contribution of biofuels to
overall energy pie. Historically the percentage of ethanol blending with petrol and biodiesel with diesel stood at 2% & <0.1%
respectively. Hence, to ramp up the blending (and thereby reducing the dependence over imported crude oil) government
set the indicative targets higher. To further boost ethanol production, the government relaxed norms for accredited raw
material by allowing the use of sugarcane juice, sugar containing materials (sugar beet, sweet sorghum), starch containing
materials (corn, cassava) and damaged food grains (wheat, broken rice, rotten potatoes).

Rising Ethanol production & % Blending trends

Ethanol Supply Year (ESY) Qty Supplied (crore Litre) Blending %age PSU OMCs
2013-14 38 1.5%
2014-15 67.4 2.3%
2015-16 111.4 3.5%
2016-17 66.5 2.1%
2017-18 150.5 4.2%
2018-19 188.6 5.0%
2019-20 173 5.0%
2020-21 332 8.5%

Source: Niti Aayog;MoPNG

Over the years, the trend of rising Ethanol production indicates intensive efforts and policy support provided by the
government in advocating use of Ethanol. Supply of ethanol under the EBP Programme has increased from 38 crore litres
in ESY 2013-14 to 173 crore litres during ESY 2019-20 resulting in increase in blend percentage from 1.53% to 5.00%
respectively. The pace of growth has further accelerated in ongoing ESY2020-21 the allocation has surged to 332 cr litres
up by 91% YoY. India aims to reach 10% blending goal by 2022 and ultimately 20% by 2025.

5
Ethanol production – Shift towards B-Heavy ethanol to boost profitability

Overall composition of ethanol production Rapid shift anticipated towards B-Heavy ethanol
200 6.0% 100%
5.0% 80%
150
4.0%
60%
100 3.0%
40%
2.0%
50
1.0% 20%
0 0.0% 0%
2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

SS18

SS20

SS21E

SS22P
Sugarcane Juice B-Heavy C-Heavy C-Heavy % B-Heavy % Cane Juice %
DFG/Maize Blending %
# Figures in crore litres except the blending %.
Source: Niti Aayog; OMCs

The C-Heavy molasses-based ethanol production has been the major contributor in the overall evolution of ethanol
production. Until 2017-18 ESY has been the sole contributor. Except ESY 2016-17, there has been constant growth in
ethanol production via C-Heavy molasses segment.

The B-Heavy molasses-based segment (40.3% contribution-ESY 2019-20) has also emerged as one of the major
contributors in recent years challenging the monopoly of C-Heavy segment under ethanol production. Government of India
relaxed the norms of raw materials for production of ethanol in 2018 by permitting use of sugarcane juice, sugar containing
materials (sugar beet, sweet sorghum), starch containing materials (corn, cassava) and damaged food grains (wheat,
broken rice, rotten potatoes). The effect of the same can be observed in ESY 2018-19 & 2019-20 as these newly added
constituents have started to contribute. In ESY18-19 the contribution was 10.2% that surged to 17.5% in ESY2019-20.

In recent past, sugar mills have identified the importance of B-heavy ethanol manufacturing over the C-heavy. Typically, B-
heavy based process (7.25% of cane & with TFS of 50%) almost doubles the ethanol output vis-à-vis C-Heavy process
along with yielding ~83% of sugar output from 1 tonne of cane. The higher margins in ethanol production offsets the
comparatively lower sugar manufacturing. B-heavy ethanol process seems to be point of equilibrium in the entire sugar and
ethanol manufacturing process. The government is constantly promoting use of B-heavy over C-heavy ethanol along with
fixing higher prices (₹57.6/litre for B-heavy against ₹45.7/litre of C-heavy in SS21). Moreover, no major additional capex is
incurred for B-Heavy production. Hence, most of the integrated leading sugar mills are adopting the B-Heavy process. We
believe, increasing proportion of B-Heavy ethanol will moderate the sugar production along with improving the margins for
sugar entities.

6
2. International sugar prices – at 4-year high

International sugar prices touched its 4-year highs in Aug-2021 owing to supply constraints raised after lower output
expectations from leading global exporters like Brazil & EU. The Raw sugar prices, after making decadal trough during
April-20 owing to covid led disruption, has sharply surged to US cent 17.4 per lb (on average). The white sugar prices too
climbed to $504 per tonne on average basis in Aug-21. The unlocking of global economies post covid situation has resulted
in consistent demand. Additionally, the expected lower output from leading global suppliers implied price appreciation.

International sugar price trend – Raw sugar international sugar price trend – White sugar
21 550
19 500
17 450
15
400
13
350
11
9 300
7 250
5 200
Jun-21
Jun-17

Jun-18

Jun-19

Jun-20

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21
Dec-17

Dec-18

Dec-19

Dec-20

Dec-17

Dec-18

Dec-19

Dec-20
Sep-17

Mar-18

Sep-18

Mar-19

Sep-19

Mar-20

Sep-20

Mar-21

Sep-21

Sep-17

Mar-18

Sep-18

Mar-19

Sep-19

Mar-20

Sep-20

Mar-21

Sep-21
Raw Sugar (USD/lb) White Sugar (USD/MT)

International demand-supply scenario (in MT)

195 4.5
190 4
185 3.5
180 3
175 2.5
170 2
165 1.5
160 1
155 0.5
150 0
SS15-16

SS16-17

SS17-18

SS18-19

SS19-20

SS20-21E

Production Consumption Inventory (in months)

Source: ISMA, Industry data

Brazil, the largest exporter, is in a state of dilemma over the use of cane production. The gradual diversion of cane
production towards Ethanol manufacturing over the years have shown good remunerative results for Brazil. Post the covid
scenario, the unlocking of economy has boosted the fuel consumption consequently higher demand for ethanol. The
ethanol production at current stage has better remunerative advantage over sugar production hence higher portion of
production is expected to be diverted to Ethanol. Moreover, unfavourable climatic conditions (deficit monsoon) are likely to
affect the sugarcane production in all the leading global suppliers. The sugarcane production in Brazil is projected to be
~635 MnMT, ~3.5% lower during 2021-22 than previous year. Several factors should weigh on cane production during the
upcoming crop. The dry weather that prevailed during 2020 (mainly August-October) and first quarter of 2021, damaged
sugarcane fields and reduced production potential. The sugar output from EU and Thailand is expected to decline by ~8-
11% in SS21 with ~6% fall in Brazilian output. Thus, the supply constraint in global market is likely to result in elevated
sugar prices. This condition augers well for higher exports from India creating supply demand parity at domestic market.

7
3. Improving demand-supply scenario –

Large swing in sugar production during past decade…

Indian sugar scenario has perennially been a game of cyclicality. The complexity and uncertainty in demand and supply
equation have led to regular swings in sugar prices. The sugar production has swung between 22-30 MnT during the last
decade due to various reasons like drought situations in key states of UP, Maharashtra & Karnataka, Covid led disruption
etc.

35 500
30 450
400
25
350
20
300
15 250
10 200
5 150
0 100

SS10
SS11
SS12
SS13
SS14
SS15
SS16
SS17
SS18
SS19
SS20
SS21E
SS22E
SS16
SS10

SS11

SS12

SS13

SS14

SS15

SS17

SS18

SS19

SS20

Opening stock Sugar Production Sugar Consumption Sugarcane production (in mnt)

Source: Industry data

…but constant high production during past 3 years

The strong monsoon seasons over the last few years has enriched water reservoirs and led to increase in land area under
cultivation. These favourable climatic conditions have resulted in surplus sugar production over the last 3 years while
implying reduction in cyclicality. During past couple of years, actual rainfall percentage (>108%) has outpaced the decadal
average of ~97% by a fair margin. Resultantly, the reservoir levels when compared with its 10-year average has bounced
back to positive territory signifying increased water levels. We believe, increased reservoir levels by ~30% in key states will
boost the planting in SS22. The higher area under cultivation will result in higher cane production.

Good monsoon seasons in recent past Improved reservoir levels during past couple of years

120 30
110 20
100 10
90 0
80 -10
70 -20
60 -30
2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21E

SS16-17
SS15-16

SS17-18

SS18-19

SS19-20

SS20-21E

Actual rainfall data (in % of long-term average) Reservoir level compared to last 10-year average in %

Source: IMD; ISMA, industry data

Furthermore, UP, one of the key cane producing state, solely contributed >50% (~5-6 MnT) of incremental production on
account of new sugarcane variety with higher yield. CO0238 variety also known as ‘early variety’ has ~40% higher yield and
recovery rate. Quick adoption of the early variety in UP has boosted the production over the last few years.

8
UP scenario - Quicker adoption of ‘Early variety’ and increased production

Increased use of ‘Early variety’ from SS16-17 Increased sugar production in SS16-17
2500 14

2000 12
10
1500
8
1000 6
500 4

0 2

SS19-20
SS09-10

SS10-11

SS11-12

SS12-13

SS13-14

SS14-15

SS15-16

SS16-17

SS17-18

SS18-19

SS20-21E
SS13-14

SS14-15

SS15-16

SS16-17

SS17-18

Early variety Others SS18-19 UP - increased sugar production in MnT

Source: Industry data

…. which is expected to remain at elevated levels in SS22

According to the data from Indian Sugar Mills Association (ISMA), the sugar crop output increased by 14.4% YoY to 30.4
MnT during October 20 - May 21 period. The growth was led by robust production in Maharashtra (up 73% to 10.6 MnT). In
addition to the current output, the opening stock of 10.5 MnT resulted in cumulative stock of ~40.9 MnT sugar. Even after
considering domestic consumption of ~26 MnT (as per ISMA) and exports of ~6 MnT, India is likely to have closing stock of
around 9 MnT for SS2020-21. In SS22, the sugar production is expected to remain at elevated levels (~30.5 MnT) in the
wake of strong monsoon estimates and high reservoir levels. Diversion of cane towards Ethanol manufacturing (3-3.5 MnT)
is likely to moderate the sugar stock. We believe, the diversion of cane production towards ethanol is expected to be key
trigger in managing the high inventory and to ease the glut like situation up to certain extent.

…with demand remaining stable

On demand side, the overall demand is expected to remain subdued owing to delay in recovery observed under HoReCa
(Hotels, Restaurants, Cafes) which are a key categorization under industrial demand segment. Steady discretionary
consumption is likely to support demand in SS2021-22 alleviating the downside risk.

9
4. Ethanol – Massive domestic demand

Rising production trends…

Particulars 2015 2016 2017 2018 2019

Beginning stock 75 61 128 146 222
Production 2292 2061 1671 2693 3000
Imports 204 432 718 633 750
Exports 165 136 141 130 100
Total Consumption 2345 2290 2230 3120 3820
Fuel consumption 685 1110 675 1600 2400
Ending stock 61 128 146 222 52
Source: fas.usda.gov report; industry data

…Yet underutilization of ethanol capacity (in mn litres)

The Ethanol capacity has remained underutilized (~50%) over the last half decade. Although the total production capacity
has grown the supplies by sugar mills have remained moderate. The capacities are used for sugar manufacturing over
Ethanol production. With the favourable policies announced for Ethanol production the sugar mills are expected to intensify
ethanol manufacturing along with traditional sugar production. Multiple sugar mills have announced greenfield capacity
addition post the favourable government announcements that is expected to increase the ethanol production.

4500 5.5
4000
3500 5
3000
4.5
2500
2000
4
1500
1000 3.5
500
0 3
2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20

Supplies by sugar mills (Mn Lit.) total capacity (Mn Lit.) Blending target achieved (%)

Source: MoPNG,ISMA

…along with enormous rise projected in demand of ethanol

Projected petrol sales Ethanol requirement for

ESY Blending (%)
(in cr litres) blending in petrol (cr litres)
2019-20 3413 5 173
2020-21 3908 8.5 332
2021-22 4374 10 437
2022-23 4515 12 542
2023-24 4656 15 698
2024-25 4939 20 988
2025-26 5080 20 1016
Source: Niti Aayog;MoPNG

With Government’s ambitious plans to blend 20% ethanol in petrol by 2025, the Ethenol requirement in country is expected
to reach to levels of 1016 cr litre by 2025. The demand is expected to multi-fold (~5x) in next 5 years from the base of 2019-
20.

10
Ethanol fuel demand 2025 - under various scenarios – (in cr litres)

1000

800

600

400

200

0
Conservative (Low EVs) BAU (Medium EVs) Low carbon (good EV uptake)

E10 E20

Source: Niti Aayog;MoPNG

…results in Ethanol capacity augmentation – more than double in next half-decade

ESY Capacity augmentation (in cr litres)

Grain Molasses Total
2019-20 258 426 684
2020-21 260 450 710
2021-22 300 519 819
2022-23 350 625 975
2023-24 450 725 1175
2024-25 700 730 1430
2025-26 740 760 1500
Source: Niti Aayog

Capacity augmentation (20% blending by 2025-26)

Ethanol capacity (cr Litres) Molasses based Grain based Total
Existing ethanol/alcohol capacity 258 (113
426 (231 distilleries) 684
distilleries)
capacity addition from sanctioned 93 (will be added by
projects 0 93
March 2022)
new capacity to be added 241 482 723
Total capacity required by 2026 760 740 1500
Source: Niti Aayog

With the recent announcement of advancing the timeline to 2025 the government’s rapid strides are clearly visible. To
reach to 20% blending of Ethanol a requisite infrastructure is a necessity and the roadmap projected by government clearly
guides about the same. The Ethanol capacity is likely to cross the 1500 cr litre mark by 2025-26 from current capacity of
684 cr litres. The government, in 2018 & 2019 notified two interest subvention schemes for molasses-based distilleries. The
central government carried interest subvention at the rate of 6% per annum or 50% of the rate of interest charged,
whichever is lower, on the loan sanctioned for a term of 5 years under Department of Food and Public Distribution (DFPD)
plan. DFPD approved 368 projects for setting up of new distilleries / expansion of existing distilleries.

Bank financing plays a pivotal role – During the last 3 years, installed capacity of molasses-based distilleries have grown
to 426 cr litres from 278 litres. The capacity growth is largely on account of government aid in form of discounted bank
funding. 70 sugar mills received loans amounting to ₹ 36,000 mn that resulted in completion of 31 projects creating
additional capacity of 102 cr litres as a result. Furthermore, 39 more projects with capacity of 93 crore litres are likely to be
completed by Mar-22 which will bring cumulative capacities to about 519 crore litres via bank funding.
11
Status of application - capacity addition – till Oct-20

MH UP Karnataka Others India

In principal approval by
182 60 64 36 342
DFPD
Sanctioned & disbursed 19 20 2 7 48
Sanctioned but not
2 0 3 0 5
disbursed
Approached to bank but
11 3 8 1 23
pending
Rejected 6 7 - 0 13
Information not received 140 30 51 28 249

Likely to be processed
(disbursed+ sanctioned+ 32 23 13 8 76
approached but pending)
% of total 18% 38% 20% 22% 22%
Source: ISMA presentation

Government has also introduced modified interest scheme to enhance production capacity of ethanol. OMCs are planning
to set up about 10-15 new grain-based distilleries thereby adding capacity by 100-150 crore litres. The Grain segment is
likely to witness maximum capacity augmentation as the capacity is expected to triple in next 5 years.

Availability of feedstock for Ethanol in the country - FY20(Lakh Ton)

Feed Stock Annual Production Annual Consumption Surplus

Sugar 320 260 60
FCI Rice 520 350 309
Maize 285 165 103
Source: Niti Aayog report

Ethanol production projection

ESY For blending Blending Total (including other uses)

Grain Sugar Total % Grain Sugar Total
2019-20 16 157 173 5 166 257 423
2020-21 42 290 332 8.5 192 400 592
2021-22 107 330 437 10 267 440 707
2022-23 123 425 548 12 293 535 828
2023-24 208 490 698 15 388 600 988
2024-25 438 550 988 20 628 660 1288
2025-26 466 550 1016 20 666 684 1350
Source: Niti Aayog;MoPNG
The Ethanol production projections are based on 20% ethanol requirement by 2025.

OMCs & Auto industry-

The prime reason for emphasizing on boosting ethanol production is to reduce the dependency of India over the massive
crude imports. India imported petroleum products of 185 MT worth US $55 bn in 2020-21. Government is resolutely
attempting to curb down the net petroleum imports. Hence, a successful E20 program can save the country US $4 billion
per annum, i.e. Rs. 30,000 cr. Besides, ethanol is a less polluting fuel, and offers equivalent efficiency at lower cost than
petrol. Government has recently approved interest subvention incentives for grain-based distilleries. OMCs have prepared
their plans for phased rollout along with vehicle manufacturers that too have similar plans to roll out.

12
Being a growing economy, India is set to have higher growth in car sales in comparison to other developed countries.
According to SIAM, apex body of auto industry, the vehicle population till date stands at around 22 cr for 2/3 wheelers &
another 3.6 cr for 4-wheelers in India. The 2-wheelers account for 74% and passenger cars around 12% of the total vehicle
population on the road. The two-three wheelers consume 2/3rd of the gasoline by volume, while 4 wheelers consume
balance 1/3rd by volume. The growth rate of vehicles in this segment is pegged at around 8-10% per annum.

Projected addition of gasoline vehicles in lk

Year 2-wheelers passenger vehicles
FY21 139 20
FY22 167 22
FY23 181 24
FY24 195 26
FY25 211 28
FY26 227 30
FY27 246 33
FY28 265 35
FY29 287 38
FY30 309 41
Source: Niti Aayog;SIAM

Based on expected growth in vehicle population the demand projections for gasoline in India too expected to register
incremental growth in consumption. Citing these enormous projected assumptions and over dependency on the exports,
Ethanol production proliferation seems to be the only available and feasible alternative.

The obligatory use of incremental ethanol in petrol is likely to result in higher ethanol demand consequent to underlying
rising petrol demand.

Demand projection of Ethanol

Projected petrol sales Blending Ethanol requirement for

ESY
(in cr litres) (%) blending in petrol (cr litres)
2019-20 3413 5 173
2020-21 3908 8.5 332
2021-22 4374 10 437
2022-23 4515 12 542
2023-24 4656 15 698
2024-25 4939 20 988
2025-26 5080 20 1016
Source: Niti Aayog;MoPNG

With Government’s ambitious plans to blend 20% ethanol in petrol by 2025, the Ethanol requirement in country is expected
to reach to levels of 1016 cr litres by 2025. The demand is expected to multi-fold (~5x) in next 5 years from the base of
2019-20.

13
Ethanol fuel demand 2025 - under various scenarios – (in cr litres)

1000

800

600

400

200

0
Conservative (Low EVs) BAU (Medium EVs) Low carbon (good EV uptake)

E10 E20

Source: Niti Aayog;MoPNG

Ethanol storage capacities of OMC - current vs planned (in cr litres) by 2025

Company Current tankage WIP/additional planned Total capacity

IOC 6.5 12.5 19
BPCL 4.5 7.4 11.9
HPCL 6.8 6.9 13.7
Total 17.8 26.8 44.6

Source: Niti Aayog; OMCs

OMCs have aligned their capex in accordance with Ethanol policy. The recent infrastructure will have multi-useability that
includes the facilities of ethanol storage, handling, blending and dispensing. Capacity augmentation process under OMCs
will be carried on under a phased manner as guided by government starting from high blending states to cover all locations
by 2025.

All the major OMCs on domestic front are expected to almost double their tankage capacity by 2025 for ethanol storage.
IOC, major OMC on domestic platform, will lead the capacity augmentation with 2x capacity addition. The total storage
capacity is expected to reach to 44.6 cr litres by 2025 from 17.8 cr litre of current tankage.

14
5. Sugar subsidies for export – a helping hand under deprived situation yet implausible over next season

Over the years the export contribution of India to the world has remained miniscule owing to high consumption. The
domestic sugar prices have largely remained uncompetitive to global sugar prices on account of higher sugarcane cost
coupled with production cost. Until SS18, higher consumption and production cost had made the exports unviable for sugar
mills. During the last 3 seasons, the oversupply had hinted in reduced cyclicality of sugar sector and thus implying
prospects for sugar exports. However, the uncompetitiveness of sugar prices acted as a spoilsport. The government has
swiftly handled the situation by permitting the subsidies for exports. Incumbent government has remained proactive in
identifying the problems of sugar industry and has allocated an export subsidy that makes the arithmetic barely viable for
sugar manufacturers. Sugar exports that had remained uncertain and miniscule during the last decade has shown a
constant surge since SS18 (0.5MnT – SS18 to 5.7MnT in SS20) following introduction of export quotas and export subsidy.

Sugar exports during the last decade Exports turning viable without subsidy
6 40

5 35

4 30

3 25

2 20

1 15

0 10
SS19 SS20 SS21P SS22P
SS10

SS11

SS12

SS13

SS14

SS15

SS16

SS17

SS18

SS19

SS20

Export realisation without subsidy (₹/kg)

Global white sugar prices (₹/kg)
Exports MT Domestic sugar prices (₹/kg)

Source: ISMA, industry data Source: Industry data

At the end of 2020, government approved ₹35,000 mn towards sugar exports of up to 6 MT for SS2020-21. The
government has granted ₹ ~5.8/kg in SS20-21 as export subsidy that covers expenses incurred on marketing, handling,
upgrading and other international and internal transport and freight costs). In recent times, the export subsidy has brought
down to Rs4/kg in May-21, but the industry has already contracted export of 95% of total sugar export quota of ~6MT.

Going forward, the government is expected to withhold the subsidies as the export equation has become economically
viable owing to sharp rise in international sugar prices. With international white sugar prices crossing the barrier of ₹500/tn
in Aug-21, the sugar exporters managed to trade at ₹37/kg without any subsidy. Concurrently, the domestic sugar prices
traded at ₹31-32/kg which seems inferior to international prices. The favourable export equation has led to signing of
additional export contracts above the threshold of 6MT set by government for S21. Hence, with exports turning viable, we
anticipate no aid from the government from next sugar season.

Conclusion – The extensive efforts taken by government to promote incremental use of ethanol can deemed as a game-
changer move to traditional monotonic sugar business in India. Although, the incumbent government’s target for ethanol
use is slightly optimistic the adaption to ethanol use seems evident. Drop in surplus inventory will create the demand-supply
parity. The cyclicality is expected to subside eventually giving rise to a healthier eco-system. The higher margins of Ethanol
in comparison to sugar will boost the cash flows of sugar manufacturers making them steadier than earlier. We believe the
well-managed sugar companies will improve their cash flow generation thereby further cementing their market share. The
mounting arrears are expected to subside over the years as the improved profitability will assist the sugar mills in making
timely payments to cane farmers. Favourable export policies and strong international sugar prices will aid in curbing the
inventory under glut like situation. Hence, with all tailwinds turning positive, we believe the sugar industry in India is at the
cusp of paradigm shift to become a strong clean energy contributor.

15
Company Section

Stock ideas –

Triveni Engineering
Dhampur Sugar
Shree Renuka Sugar

*CSEC does not have active coverage on the mentioned stocks

16
Triveni Engineering CMP: ₹178.3 M.Cap: ₹43,100 mn (as on 16th Sept 21)

Company profile-
Triveni Engineering has a diverse business profile with products ranging from sugar & ethanol to auto components & other
miscellaneous products that cater to demands of varied industries. The company operates via 7 sugar mills, 6 generation
units and 2 distilleries with a capacity of 320 KLPD. Triveni manufacturers specialized high & low speed gear & gear boxes
along with other equipment that cater the demands of Defence forces. The company operates a water treatment solution
business via its wholly owned subsidiary Mathura Wastewater Pvt. Ltd.

In FY20, company entered manufacturing of B-heavy Ethanol and commissioned a new ethanol distillery (~160 KL).
Resultantly, Triveni reported strong performance for FY20 as sugar production and sales volumes reached the highest
mark. The water business too posted record performance of ~₹2.9bn. Despite challenging environment, the company
reported good performance in FY21 as topline has increased by 6% YoY. Power Transmission & Water business has
combined outstanding order book of ₹1,0780mn.

Financials-

Triveni Engineering – (Consol. in ₹ mn) 2019Y 2020Y 2021Y 2022E 2023E

Revenue 31493.9 41975.5 46741.8 48696.3 51876.3
EBITDA 4323.0 6133.6 5582.1 6789.3 8159.7
Net Income 2162.8 3351.2 2946.0 4376.0 5419.3
EPS 8.4 13.3 12.0 18.1 22.5
EV/EBITDA 7.3 3.8 5.3 7.4 6.1
PE 7.3 2.7 7.0 9.4 7.6
ROE 20.7 27.0 20.4 23.5 23.7
ROA 6.3 8.5 7.7 - -
Source: Bloomberg Estimates

60000.0 9000.0 20%

50000.0
7000.0 16%
40000.0
5000.0 12%
30000.0
3000.0 8%
20000.0

10000.0 1000.0 4%
2019Y 2020Y 2021Y 2022Y 2023Y 2019Y 2020Y 2021Y 2022Y 2023Y

Revenue (In ₹ mn) EBITDA (In ₹ mn) EBITDA margin (%) RHS

17
 Dhampur Sugar CMP: ₹301.9 M.Cap: ₹20,040 mn (as on 16th Sept 21)

Company profile-
Dhampur Sugar Mills is a prominent player in India’s organized sugar business. The company has diversified its business
portfolio beyond the sugar by venturing into renewable power, fuel ethanol, alcohol and bio-fertilizers. The company has an
aggregate manufacturing capacity of 45,500 TCD.

Company has reported decent performance in FY21 as revenue and EBITDA grew by 19% & 25% YoY respectively. PAT
showed muted growth of 5% YoY. Overall debt gearing has improved to 0.73x in FY21 from 2.04x in FY17. Dhampur has
crushed 80 Lk tonnes of sugarcane (16% higher on YoY basis) while Ethanol production came at 1,124 Lk BL (7% higher
on YoY basis).

Financials-

Dhampur Sugar – (Consol. 2019Y 2020Y 2021Y 2022E 2023E

in ₹ mn)
Revenue 28922.9 34853.2 41566.0 43687.5 44261.0
EBITDA 4741.7 3621.5 4553.8 5154.5 5839.0
Net Income 2510.4 2165.2 2292.0 3057.0 3500.0
EPS 37.8 32.6 34.5 46.1 52.7
EV/EBITDA 6.8 6.0 4.8 5.7 5.0
PE 5.8 2.4 5.3 6.4 5.6
ROE 22.6 16.7 15.7 17.0 16.9
ROA 7.1 5.6 6.2 - -
Source: Bloomberg Estimates

50000.0 7000.0 20%

6000.0 16%
40000.0
5000.0
12%
30000.0 4000.0
8%
3000.0
20000.0
2000.0 4%

10000.0 1000.0 0%
2019Y 2020Y 2021Y 2022Y 2023Y 2019Y 2020Y 2021Y 2022Y 2023Y

Revenue (In ₹ mn) EBITDA (In ₹ mn) EBITDA margin (%) RHS

18
 Shree Renuka Sugars CMP: ₹30.1 M.Cap: ₹64,060 mn (as on 16th Sept 21)

Company profile-
Shree Renuka Sugars is a global agri-business & bio-energy company with a presence across sugar, ethanol, co-
generation and trading. The company is the leading manufacturer of sugar & ethanol in India. Company holds the tag of
being only MNC sugar company in India (International giant Wilmar holds 62.48% stake). Shree Renuka Sugars has
pioneered sugar refining and the concept of leasing out sugar manufacturing units in India.

The business operations are on a verge of turnaround, as standalone PAT turned positive in FY21, after 7 consecutive
years of losses. The company is expanding distillery capacity from 720 KLPD to 1,400 KLPD that is expected to be
commissioned by Oct-22. The capacity expansion will be the highest in the industry. Total capex worth 2bn will be funded
through soft loan scheme announced by GOI.

Financials-

Renuka Sugar – (Consol. in ₹ mn) 2019Y 2020Y 2021Y

Revenue 45080.9 48812.0 56485.2
EBITDA 2499.5 1924.1 5345.7
Net Income -14483.7 20991.7 -1147.7
EPS -7.6 11.0 -0.6
EV/EBITDA 8.3 16.0 11.6
ROA -14.8 25.8 -1.7
Source: Bloomberg

60000.0 6000.0 10%

50000.0 5000.0 8%

40000.0 4000.0 6%

30000.0 3000.0 4%

20000.0 2000.0 2%

10000.0 1000.0 0%
2019Y 2020Y 2021Y 2019Y 2020Y 2021Y

Revenue (In ₹ mn) EBITDA (In ₹ mn) EBITDA margin (%) RHS

19
Peer Comparison

Company CMP M.Cap Revenue EBITDA PAT EPS EV/EBITDA

(₹) (₹ mn)
FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E FY2 FY22E FY23E FY21 FY22 FY23
1 E E
Balrampur
Chini 358.9 75,360 48,117 50,048 55,583 7,138 8,480 10,743 4,798 5,877 7,493 22.5 28.5 36.1 8.0 9.1 7.1
EID Parry
444.4 78,700 1,51,033 2,11,965 2,30,985 21,735 25,665 28,806 4,474 10,603 11,918 25.3 59.9 67.3 3.7 3.9 3.5
Triveni Engg.
178.3 43,100 46,742 48,696 51,876 5,582 6,789 8,160 2,946 4,376 5,419 12.0 18.1 22.5 5.3 7.4 6.1
Dhampur
Sugar 301.9 20,040 41,566 43,688 44,261 4,554 5,155 5,839 2,292 3,057 3,500 34.5 46.1 52.7 4.8 5.7 5.0
Avadh Sugar
426.45 8,530 26,500 30,224 28,412 2,593 2,881 3,123 776 1,242 1,571 38.8 62.1 78.6 6.9 7.0 6.7
Dwarikesh
Sugar 72.5 13,650 18,388 19,175 19,058 2,067 2,360 2,938 915 1,326 1,594 4.9 7.0 8.5 5.7 8.4 6.7
Source: Bloomberg

20
DISCLOSURES/ APPENDIX
I. ANALYST CERTIFICATION

I, Nilesh Patil, hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of
the subject securities or issuers referred to in this research report, (2) No part of my compensation was, is, or will be directly or indirectly
related to the specific recommendations or views expressed in this research report by Cholamandalam Securities Limited or its
Group/associates companies. (3) Has taken reasonable care to achieve and maintain independence and objectivity in making any
recommendations.

Disclosure of Interest Statement Update

Analyst holding in the stock No
Served as an officer, director or employee No

II. ISSUER SPECIFIC REGULATORY DISCLOSURES, Unless specifically mentioned in Point No. 9 below:

1. The Research Analyst(s), Cholamandalam Securities Limited (CSL), Associate of Analyst or his relative does not have any financial
interest in the company(ies) covered in this report.

2. The Research Analyst, CSL or its associates or relatives of the Research Analyst associates collectively do not hold more than 1% of
the securities of the company (ies) covered in this report as of the end of the month immediately preceding the distribution of the research
report.

3. The Research Analyst, his associate, his relative and CSL do not have any other material conflict of interest at the time of publication
of this research report.

4. The Research Analyst, CSL and its associates have not received compensation for investment banking or merchant banking or
brokerage services or for any other products or services from the company(ies) covered in this report, in the past twelve months.

5. The Research Analyst, CSL or its associates have not managed or co-managed in the previous twelve months, a private or public
offering of securities for the company (ies) covered in this report.

6. CSL or its associates have not received compensation or other benefits from the company (ies) covered in this report or from any third
party, in connection with the research report.

7. The Research Analyst has not served as an Officer, Director or employee of the company (ies) covered in the Research report.

8. The Research Analyst and CSL has not been engaged in market making activity for the company (ies) covered in the Research report.

9. Details CSL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Sr.No. Particulars Yes/

No
Whether compensation has been received from the company(ies) covered in the No
1 Research report in the past 12 months for investment banking transaction by CSL
Whether Research Analyst, CSL or its associates or relatives of the Research Analyst No
associates collectively hold more than 1% of the company(ies) covered in the
2 Research report
Whether compensation has been received by CSL or its associates from the No
3 company(ies) covered in the Research report
CSL or its associates have managed or co-managed in the previous twelve months a No
private or public offering of securities for the company(ies) covered in the Research
4 report
Research Analyst, his associate, CSL or its associates have received compensation No
for investment banking or merchant banking or brokerage services or for any other
products or services from the company(ies) covered in the Research report, in the last
5 twelve month

10. There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities.

21
STOCK RATINGS

BUY: The stock's total return is expected to exceed 15% over the next 12 months.
OUT PERFORMER: The stock's total return is expected to be within 5-15% over the next 12 months.
MARKET PERFORMER: The stock's total return is expected to be between -5% to +5% over the next 12 months.
UNDER PERFORMER: The stock's total return is expected to be between -15% to -5% over the next 12 months.
SELL: The stock's total return is expected to more than -15% over the next 12 months.

22
III. DISCLAIMER

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.

This document is for information purposes only. This report is based on information that we consider reliable, but we do not
represent that it is accurate or complete, and one should exercise due caution while acting on it. Descriptions of any
company or companies or their securities mentioned herein are not 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.

Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may
occur. All opinions, projections and estimates constitute the judgment of the author as on the date of the report and these,
plus any other information contained in the report, are subject to change without notice. Prices and availability of financial
instruments also are subject to change without notice. This report is intended for distribution to institutional investors.

This report is not directed to or intended for display, downloading, printing, reproducing or for distribution to or use by, any
person or entity that 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 to CSL
or its associates 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. Neither this document nor any copy of it may be taken or transmitted into the United State (to U.S.Persons),
Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in Japan
or to any resident thereof.

Any unauthorized use, duplication, redistribution or disclosure of this report including, but not limited to, redistribution by
electronic mail, posting of the report on a website or page, and/or providing to a third party a link, is prohibited by law and
will result in prosecution. The information contained in the Report is intended solely for the recipient and may not be further
distributed by the recipient to any third party.

CSL generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a
financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, CSL generally
prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member
Of any companies that the analysts cover. Our salespeople, traders, and other professionals or associates may provide oral
or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions
expressed herein. Our proprietary trading and investing businesses may make investment decisions that are inconsistent
with the recommendations expressed herein.

The views expressed in this research report reflect the personal views of the analyst(s) about the subject securities or
issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the
specific recommendations and views expressed by research analyst(s) in this report. The compensation of the analyst who
prepared this document is determined exclusively by CSL however, compensation may relate to the revenue of CSL, of
which sales and trading are a part. Research analysts and sales persons of CSL may provide important inputs to its
affiliated company (ies).

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. CSL, 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

CSL and its associates, officers, directors, and employees subject to the information given in the disclosures may: (a) from
time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b)
be engaged in any other transaction involving such securities and earn brokerage or other compensation (financial interest)
or act as a market maker in the financial instruments of the 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

23
related information and opinions. The views expressed are those of the analyst and the Company may or may not
subscribe to the views expressed therein.

CSL, its associates and any third party involved in, or related to, computing or compiling the information hereby expressly
disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect
to any of this information. Without limiting any of the foregoing, in no event shall CSL, any of its associates or any third party
involved in, or related to, computing or compiling the information have any liability for any damages of any kind. The
Company accepts no liability whatsoever for the actions of third parties.

The Report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the Report
refers to website material of the Company, the Company has not reviewed the linked site. Accessing such website or
following such link through the report or the website of the Company shall be at your own risk and the Company shall have
no liability arising out of, or in connection with, any such referenced website

CSL shall not be liable for any delay or any other interruption which may occur in presenting the data due to any technical
glitch to present the data. In no event shall the CSL 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 CSL
through this presentation.

Neither CSL, nor any of its other group companies or associates, shall be responsible for any decisions taken on
the basis of this report. Investors are advised to consult their Investment and Tax consultants before taking any
investment decisions based on this report.

24
 RESEARCH
Kedar S Kadam DGM & Head of Research +91-44 - 4004 7361 kedarsk@chola.murugappa.com
Mugilan K Technical Analyst +91-44 - 4004 7353 mugilank@chola.murugappa.com
Arjun Prasad Pasumarthi Fundamental Analyst +91-44 - 4004 7363 arjunpp@chola.murugappa.com
Nilesh Patil Fundamental Analyst +91-44 - 4004 7266 nileshmp@chola.murugappa.com
Ammar Haider Associate +91-44 - 4004 7360 amarh@chola.murugappa.com

Balaji H Compliance Officer 044-30007226 balajih@chola.murugappa.com

Gayathri Devi Customer service 1800 425 4477 gayathrids@chola.murugappa.com

25