India I Equities Country

Daily

29 July 2022

India Morning Bell Sensex: 56858

All the latest research and data Nifty: 16930

United Spirits - Inflationary pressures darken near-term outlook;

retaining a Hold. Contrary to Street expectations, with only a 4%
CAGR over 4-year in P&A, United Spirits’ Q1 FY23 was underwhelming.
Also, its medium-term volume-growth aspirations of just 3-4% appear India Research Team
conservative given India’s vast market. Its thrust on innovation, +9122 6626 6666
Institutionalresearch@rathi.com
favourable pricing in a few states and non-core popular brand
divestments have been positive. Rising input cost and rich valuations,
however, contain the potential. We reduce our FY23e/FY24e earnings
10%/6% to factor in the margin pressure. We maintain a Hold, with a
Markets 28 Jul 22 1 Day YTD
lower TP of Rs900 (Rs962 earlier), valuing it at 50x FY24e. Ajay Thakur, Sensex 56858 1.87% -2.4%
ajaythakur@rathi.com ► Nifty 16930 1.73% -2.4%
Dow Jones 32530 1.03% -10.5%
United Breweries - Revenue in line but margins drag on S & P 500 4072 1.21% -14.6%
performance; retaining a Hold. United Breweries Q1 FY23 revenues FTSE 7345 -0.04% -0.5%
were broadly in line with Street’s and our estimates, but margins were Nikkei 27900 0.30% -3.1%
Hang Seng 20623 -0.23% -11.9%
lower than estimates on higher input costs. Management attributed
broad-based volume growth to the hot summer, premiumisation and the Volumes ($ m) 28 Jul 22 1 Day Avg '22
favourable policy support by various state governments. While some Cash BSE 421 21.7% 572
signs of softening inflationary pressures in a few commodities are evident, Cash NSE 7,279 31.5% 7,550
the benefit is likely to be seen only in H2. We reduce our gross-margin Derivatives (NSE) 2,875,631 115.0% 1,329,444

estimate to factor in the higher input costs. However, with the positive
Flows ($m)* 28 Jul 22 MTD YTD
price/mix, cost control and operating leverage, we expect mid- to high- FII – Cash
teen FY23 and FY24 EBITDA margins. We like UB’s portfolio strength, Buy 917 16,955 131,901
but await volume outperformance to its peers and a better entry to alter Sell 711 17,912 168,008
our stance. We maintain a Hold rating, with a TP of Rs.1,635 (at 50x Net 206 -957 -36,108
FII - Derivatives
FY24e). Ajay Thakur, ajaythakur@rathi.com ► Buy 235,919 2,296,145 14,992,176
Sell 235,168 2,291,558 14,953,463
TVS Motors - Improving off-take, margin betterment; maintaining Net 751 4,587 38,713
a Buy. For TVS Motors, volume off-take continued to improve DII – Cash
sequentially in Q1 FY22 as it narrowly waded through semi-conductor Buy 872 14,282 127,151
supply constraints. Demand continues to improve for motorcycles and Sell 797 12,957 96,650
Net 75 1,325 30,500
scooters and the company expects 9M FY23 to be significantly better.
Also, during the quarter it launched a new motorcycle, which received a Others 28 Jul 22 1 Day YTD
positive response. With a ramp-up in iQube expected in the near term, Oil Brent ($ / bbl) 108.0 0.8% 44.4%
we expect strong growth. Accordingly, we maintain our Buy rating at a Gold ($ / oz) 1,754.8 -0.1% -4.1%
Steel ($ / MT) 1,531.4 1.4% -3.1%
revised TP of Rs1,030 (25x FY24e). Vijay Sarthy TS, vijaysarthy@rathi.com ► Rs / $ 79.8 0.0% -6.8%
$ / Euro 1.0 0.0% 11.5%
Yen / $ 134.5 -0.2% -14.4%
Call Rate 5.2% 75.bps 195.bps
10-year G-Secs 7.3% -.7bps 87.8bps
EMBI spreads 453.961 -9.8bps 67.9bps
Source: NSE, BSE, Bloomberg *Provisional

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

29 July 2022 India Morning Bell

SKF India - Robust overall performance; products added; upgrading

to a Hold. Driven by its automotive division, demand for SKF India
continued to be robust due to better off-take in the quarter. Industrial
demand, too, was strong. The company plans to add products to its
portfolio for two-wheelers and four-wheelers. The industrials division
continues to grow strong on revival in economic activity, driven by
construction equipment, cement and steel. Besides, the company recently
began supplies for EVs. Hence, we upgrade our rating to a Hold, at a TP
of Rs.4,374 (29x FY24e). Vijay Sarthy TS, vijaysarthy@rathi.com ►
KEI Industries - Better balance sheet, a key positive; retaining a Hold
with a higher TP. Institutional orders, EPC and the rising retail
contribution restricts the earnings cut needed to factor in the slower pace
of channel stocking. We raise our FY23e and FY24e revenue 5% each,
while the EBITDA and net income we reduce by an average of 2% and 1%
respectively. Nirav Vasa, niravvasa@rathi.com ►
Finolex Industries - Disappointing performance, near-term pain to
persist; retaining a Buy. Finolex’s Q1 FY23 revenue grew 23% y/y to
Rs11.9bn. Higher input prices slashed the gross margin 726bps y/y to
32.8%. This and higher other operating expenses further hurt the EBITDA
margin, which contracted 1,112bps y/y to 10.6%. Higher other income and
lower tax restricted the decline in PAT (Rs992m) to 32% y/y (ARe:
revenue/EBITDA margin/ PAT of Rs13.2bn/16.3%/Rs1.6bn). The
performance considerably belied our expectation. Rishab Bothra,
rishabbothra@rathi.com ►

Jamna Auto Industries - Improving M&HCV off-take, margin

pressures; maintaining a Sell. Consistent growth in M&HCV industry
volumes led to Jamna Auto’s strong top-line performance. We expect the
M&HCV off-take to continue to improve m/m. However, as valuations are
expensive on the steep run-up in the stock price, we maintain a Sell at a
revised TP of Rs122 (20x FY24e). Vijay Sarthy TS, vijaysarthy@rathi.com ►
Aarti Drugs - Subdued Q1; price hikes to help offset high costs;
maintaining a Hold. As API price hikes led to lower stocks (sales fell 16%
q/q) with customers, Aarti Drugs’ Q1 revenues fell 10% q/q to Rs6.2bn.
High input costs, notional forex loss on imports and elevated power & coal
costs (Rs105m) trimmed its operating performance. The lower revenue
base and steady absolute expenses squeezed EBITDA margins 160bps q/q
to 10.8%. PAT fell 37% q/q to Rs348m. Rising volumes, launches
(gliptins/derma in API, oncology formulations), scaling up new sites and
softening raw material prices would boost sales/PAT 16%/23% over
FY22-24. At the CMP, the stock trades at 15x/12x FY23e/FY24e EPS. We
retain our Hold rating, with a price target of Rs469 (14x FY24e earnings).
Aarti Rao, aartirao@rathi.com ►

Anand Rathi Research India Equities

29 July 2022 India Morning Bell

Market Data

Large Caps Mid Caps Small Caps

(>US$1bn) (US$250m-1bn) (US$100m-250m)

Price Performance Price Performance Price Performance

Top-5 gainers Top-5 gainers Top-5 gainers
Company CMP (Rs) 1 wk (%) 1 Mth (%) Company CMP (Rs) 1 wk (%) 1 Mth (%) Company CMP (Rs) 1 wk (%) 1 Mth (%)
BAJAJ FINSERV LTD 14642 15.1 28.8 ELECON ENGINEERING CO LTD 362 15.5 34.8 IMAGICAAWORLD ENTERTAINMENT 23 24.0 28.1
STAR HEALTH & ALLIED INSURAN 758 13.4 48.1 USHA MARTIN LTD 147 14.7 20.6 GALACTICO CORPORATE SERVICES 85 23.9 118.3
BAJAJ FINANCE LTD 7077 12.9 26.9 INDIABULLS HOUSING FINANCE L 115 13.2 12.2 SREE RAYALASEEMA HI-STRENGTH 570 20.6 31.1
HINDUSTAN AERONAUTICS LTD 2025 9.6 12.5 KARUR VYSYA BANK LTD 58 12.0 27.2 LLOYDS STEELS INDUSTRIES LTD 15 16.5 47.8
ADANI POWER LTD 322 9.5 19.1 GUJARAT STATE FERT & CHEMICA 158 11.0 12.1 ADITYA VISION LTD 895 14.8 15.8

Top-5 losers Top-5 losers Top-5 losers

Company CMP (Rs) 1 wk (%) 1 Mth (%) Company CMP (Rs) 1 wk (%) 1 Mth (%) Company CMP (Rs) 1 wk (%) 1 Mth (%)

ZOMATO LTD 46 (14.6) (24.2) SHARDA CROPCHEM LTD 521 (24.9) (15.5) STEEL EXCHANGE INDIA LTD 18 (20.3) 22.3
DELHIVERY LTD 628 (10.3) 25.0 HINDUSTAN FOODS LTD 420 (15.4) 21.2 SHANKAR LAL RAMPAL DYE-CHEM 128 (19.7) (18.3)
INDRAPRASTHA GAS LTD 346 (7.9) (6.0) GREENPANEL INDUSTRIES LTD 442 (12.3) 3.8 GE POWER INDIA LTD 128 (14.6) (4.6)
UNITED SPIRITS LTD 781 (7.4) 1.1 LAXMI ORGANIC INDUSTRIES LTD 292 (11.2) (0.1) SHANTI EDUCATIONAL INITIATIV 95 (14.4) 59.0
BIOCON LTD 307 (7.4) (2.9) ORIENT ELECTRIC LTD 261 (10.9) (1.9) BAJAJ HINDUSTHAN SUGAR LTD 11 (12.7) (20.2)

Volume Volume Volume

Volume spurts Volume spurts Volume spurts
Company CMP (Rs) 1 wk avg 1/4 wk (%) Company CMP (Rs) 1 wk avg 1/4 wk (%) Company CMP (Rs) 1 wk avg 1/4 wk (%)

UTI NIFTY 50 ETF 1,793 12,863 184.9 PARADEEP PHOSPHATES LTD 52 21,587,864 220.3 FOSECO INDIA LTD 1,836 33,575 236.0
ZOMATO LTD 46 290,834,208 162.7 TATA INVESTMENT CORP LTD 1,474 150,237 212.8 SREE RAYALASEEMA HI-STRENGTH 570 247,111 194.4
ATUL LTD 8,705 126,979 157.5 SHOPPERS STOP LTD 586 1,695,030 194.1 HUHTAMAKI INDIA LTD 195 453,277 174.8
RELAXO FOOTWEARS LTD 981 262,163 93.4 GUJARAT STATE FERT & CHEMICA 158 11,942,691 191.9 D.B. CORP LTD 87 447,460 174.7
LAURUS LABS LTD 525 3,533,376 91.2 INDIA INFRASTRUCTURE TRUST 96 80,000 166.7 AGI GREENPAC LTD 256 550,383 174.5

Technicals Technicals Technicals

Above 200 DMA Above 200 DMA Above 200 DMA
Company CMP (Rs) 200D Avg (%) Company CMP (Rs) 200D Avg (%) Company CMP (Rs) 200D Avg (%)
ADANI POWER LTD 322 182 78.1 ELECON ENGINEERING CO LTD 362 199 82.6 GALACTICO CORPORATE SERVICES 85 14 542
ADANI TOTAL GAS LTD 3,006 2,046 47.1 BLS INTERNATIONAL LTD 238 143 66.7 GENSOL ENGINEERING LTD 899 287 216
ADANI TRANSMISSION LTD 3,013 2,183 37.6 CHENNAI PETROLEUM CORP LTD 282 183 55.7 GLOBE INTERNATIONAL CARRIERS 81 41 147
SCHAEFFLER INDIA LTD 2,584 1,928 34.3 MEGHMANI FINECHEM LTD 1,532 1,028 49.7 MADHYA BHARAT AGRO PRODUCTS 751 378 100
HINDUSTAN AERONAUTICS LTD 2,025 1,510 34.1 APAR INDUSTRIES LTD 1071.3 738.4 45.7 CRESSANDA SOLUTIONS LTD 35 18 96

Below 200 DMA Below 200 DMA Below 200 DMA

Company CMP (Rs) 200D Avg (%) Company CMP (Rs) 200D Avg (%) Company CMP (Rs) 200D Avg (%)
ZOMATO LTD 46 94 (51.7) HLE GLASCOAT LTD 3,069 5,115 (40.3) SOLARA ACTIVE PHARMA SCIENCE 366 759 (52.0)
GLAND PHARMA LTD 2,279 3,241 (29.7) INDIABULLS REAL ESTATE LTD 73 118 (38.1) INDOSTAR CAPITAL FINANCE LTD 120 213 (44.2)
VEDANTA LTD 246 333 (26.6) METROPOLIS HEALTHCARE LTD 1,511 2,326 (35.3) NAHAR SPINNING MILLS LTD 313 482 (35.7)
WIPRO LTD 416 558 (25.7) STERLITE TECHNOLOGIES LTD 140 214 (34.6) SUBEX LTD 26 40 (34.8)
TECH MAHINDRA LTD 1,038 1,381 (25.1) ZENSAR TECHNOLOGIES LTD 246 373 (34.2) GE POWER INDIA LTD 128 196 (34.7)

Source: Bloomberg

Anand Rathi Research India Equities

 Alcoholic Beverages
India I Equities
Company Update
Change in Estimates Target Reco 

28 July 2022

United Spirits Rating: Hold

Target Price: Rs.900
Inflationary pressures darken near-term outlook; retaining a Hold Share Price: Rs.793
Contrary to Street expectations, with only a 4% CAGR over 4-year in
P&A, United Spirits’ Q1 FY23 was underwhelming. Also, its medium- Key data UNSP IN / UNSP.BO
term volume-growth aspirations of just 3-4% appear conservative given 52-week high / low Rs.1020 / 629
Sensex / Nifty 55816 / 16642
India’s vast market. Its thrust on innovation, favourable pricing in a few
3-m average volume $12.9m
states and non-core popular brand divestments have been positive. Market cap Rs.576bn / $7210.9m
Rising input cost and rich valuations, however, contain the potential. We Shares outstanding 727m
reduce our FY23e/FY24e earnings 10%/6% to factor in the margin
pressure. We maintain a Hold, with a lower TP of Rs900 (Rs962 earlier),
Shareholding pattern (%) Jun'22 Mar'22 Dec'21
valuing it at 50x FY24e. Promoters 56.7 56.7 56.7
Prestige-&-Above - of which, Pledged 1.2 1.2 1.2
Leading player in sales val stay strong. On 17% y/y volume growth, adj. sales Free Float 43.4 43.2 43.2
rose 34% y/y, driven by better realisations per case (on a better product mix).
- Foreign Institutions 16.8 17.7 17.9
Sales of the Prestige-and-Above category rose 44% y/y (14% y/y by volume).
- Domestic Institutions 10.9 10.4 10.4
The growth had been curbed by higher input costs and supply constraints in - Public 15.7 15.1 14.9
Scotch whisky (trimming P&A growth 6%). On a four-year CAGR, United
Spirits’ sales in this category rose 4% (a muted 1.6% volume CAGR).
Estimates revision (%) FY23e FY24e
Operating leverage boosts EBITDA. The consolidated gross margin slid Sales 0 1
130bps y/y, squeezed by higher input costs. Ad-spends were up 80bps y/y (as EBITDA -6 -5
percent of sales). However, lower staff costs (down 10% y/y) and lower growth PAT -10 -6
in other expenses (up 23% y/y) on account of operating leverage and cost
efficiencies resulted in a 440bp y/y EBITDA margin expansion to 15.4%. Relative price performance
1,050
Concall highlights. a) Adjusted for the Andhra business, the three-year 1,000
revenue CAGR had been 7-7.5%. b) Deal with Inbrew to close by Sep. After 950
900
the deal, 85% of the company’s portfolio would be in the P&A category. c) The 850
`
double-digit rise in prices of glass and extra-neutral alcohol (65% of inputs) 800
750
would weigh on margins in the next two quarters. d) Supply constraints and 700
650
high prices of Scotch compressed revenues (6% of P&A growth) and margins 600
(70bps in Q1). e) Looking at double-digit revenue growth in the medium term,
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22

Jul-22
Feb-22
Mar-22
Mar-22
Apr-22
May-22
Jun-22

powered by 7-8% pricing growth & sales mix and 3-4% volume growth. UNSP Sensex
Key risk: Keener competition and adverse regulations in states Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 89,092 77,922 92,763 106,739 118,294
Net profit (Rs m) 6,589 3,836 8,286 10,257 13,188
EPS (Rs) 9.1 5.3 11.4 14.1 18.2
P/E (x) 87.4 150.2 69.5 56.2 43.7
EV / EBITDA (x) 39.5 55.5 36.1 34.6 28.6
P/BV (x) 15.5 14.0 11.6 9.6 7.9 Ajay Thakur
RoE (%) 17.7 9.3 16.7 17.0 18.0 Research Analyst
+9122 6626 6728
RoCE (%) 11.5 10.5 21.1 19.6 20.4
ajaythakur@rathi.com
Dividend yield (%) - - - - -
Net debt / equity (x) 0.6 0.2 0.1 -0.0 -0.1
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Alcoholic Beverages
India I Equities
Company Update
Change in Estimates Target Reco 

28 July 2022

United Breweries Rating: Hold

Target Price: Rs.1,635
Revenue in line but margins drag on performance; retaining a Hold Share Price: Rs.1,620
United Breweries Q1 FY23 revenues were broadly in line with Street’s and
our estimates, but margins were lower than estimates on higher input Key data UBBL IN / UBBW.BO
costs. Management attributed broad-based volume growth to the hot 52-week high / low Rs.1794 / 1275
Sensex / Nifty 55816 / 16642
summer, premiumisation and the favourable policy support by various
3-m average volume $5.8m
state governments. While some signs of softening inflationary pressures in
Market cap Rs.428bn / $5355.6m
a few commodities are evident, the benefit is likely to be seen only in H2. Shares outstanding 264m
We reduce our gross-margin estimate to factor in the higher input costs.
However, with the positive price/mix, cost control and operating leverage,
Shareholding pattern (%) Jun'22 Mar'22 Dec'21
we expect mid- to high-teen FY23 and FY24 EBITDA margins. We like Promoters 72.7 72.7 72.7
UB’s portfolio strength, but await volume outperformance to its peers and - of which, Pledged 14.5 14.5 14.5
aLeading player
better entry in valour stance. We maintain a Hold rating, with a TP of
to alter Free Float 27.3 27.3 27.3
Rs.1,635 (at 50x FY24e). - Foreign Institutions 7.7 8.7 9.6
- Domestic Institutions 14.2 13.1 12.1
Sales sizzle on the hot summer. Sales rose 118% y/y on a lower base. Pricing - Public 5.4 5.5 5.6
growth was 9% in Q1, the rest coming from volumes (four-year volume/value
2%/7% CAGRs). Volume growth was robust across regions: South (up 160%
Estimates revision (%) FY22e FY23e
y/y on a low base), East (up 88% y/y) and West (up 67% y/y). The company
Sales -5 -4
talked of 3-6% price hikes in several states (contributing two-thirds of its EBITDA -17 -11
volumes) in Q1, which aided realisation growth, along with faster growth in the PAT -15 -8
premium category.
Gross margin contracts, but EBITDA margin expands. The gross margin Relative price performance
declined 410bps y/y due to higher input costs (barley, packaging materials). The 1,900
1,800
reported EBITDA margin, however, expanded 240bps y/y to 10.9% on 1,700
account of operating leverage and cost efficiency. We are factoring in ~100bp 1,600
contraction
` in the FY23 gross margin, but the EBITDA margin is likely to 1,500
expand ~200bps as operating leverage continues to play out. 1,400
1,300
Valuations. The stock now quotes at 67x/50x FY23e/FY24e EPS. Key 1,200
Jul-21
Aug-21
Sep-21

Jan-22

Mar-22
Oct-21
Nov-21
Dec-21

Feb-22

Mar-22
Apr-22
May-22
Jun-22
Risks: Keener competition, adverse state regulations and sustained high input Jul-22
costs. UBBL Sensex

Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22e FY23e FY24e

Sales (Rs m) 62,472 40,427 55,743 74,498 83,868
Net profit (Rs m) 4,283 1,211 3,661 6,360 8,644
EPS (Rs) 16.2 4.6 13.8 24.1 32.7
PE (x) 100.0 353.8 117.0 67.3 49.6
EV / EBITDA (x) 49.1 111.8 60.2 39.5 30.8
P / BV (x) 12.2 12.0 10.9 10.3 9.5
RoE (%) 12.2 3.4 9.3 15.2 19.2 Ajay Thakur
Research Analyst
RoCE (%) 12.6 3.6 9.8 15.9 20.3
+9122 6626 6728
Dividend yield (%) 0.2 0.0 0.6 0.9 1.2 ajaythakur@rathi.com
Net debt / equity (x) 0.0 -0.1 -0.2 -0.2 -0.1
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Auto
India I Equities Company Update

Change in Estimates Target Reco 

28 July 2022

TVS Motors Rating: Buy

Target Price: Rs.1030
Improving off-take, margin betterment; maintaining a Buy Share Price: Rs.871

For TVS Motors, volume off-take continued to improve sequentially in Key data TVSL IN / TVSM.BO
Q1 FY22 as it narrowly waded through semi-conductor supply 52-week high / low Rs.899 / 495
constraints. Demand continues to improve for motorcycles and Sensex / Nifty 55816 / 16642
scooters and the company expects 9M FY23 to be significantly better. 3-m average volume $17.6m
Market cap Rs.414bn / $5176.6m
Also, during the quarter it launched a new motorcycle, which received
Shares outstanding 475m
a positive response. With a ramp-up in iQube expected in the near
term, we expect strong growth. Accordingly, we maintain our Buy
Shareholding pattern (%) Jun'22 Mar'22 Dec'21
rating at a revised TP of Rs1,030 (25x FY24e)
Promoters 50.8 50.8 52.26
- of which, Pledged 0 0 -
Improving demand sentiment for two-wheelers. Q1 FY23 volumes grew Free float 49.2 49.2 47.7
6% q/q to 906,791 units, while revenues grew 9% q/q, 53% y/y, to Rs60.1bn. - Foreign institutions 9.9 12.0 12.86
Semi-conductor shortages prevailed; however TVS added a vendor and - Domestic institutions 30.7 28.5 25.46
production improved from Jun’22. The company launched TVS Ronin - Public 8.6 8.7 9.42
10/12%to the premium lifestyle segment, and refreshed Ntorq and Radeon
catering
with new features. In EVs, iQube volumes were ~9,000 for the quarter (4,500
Estimates revision (%) FY23 FY24
in Jun’22 and 2,500 in Mar’22) and is now in 83 cities (33 the previous
Sales 27.6 15.6
quarter). A ramp-up is expected to 25,000 units a month by Dec’22. It EBITDA 40.6 27.2
continues to receive excellent feedback from customers and the company PAT 57.9 36.2
now has an order book of ~20,000 units (12,000 last quarter). Accordingly,
we expect strong revenue growth of 28% in FY23 and 16% in FY24.
Relative price performance
1,000
Margin improvement in FY23 and FY24. Despite raw material prices further
900
inching up in Q1 FY23, the 10% healthy margin was maintained. Prices were
800
raised 1.5% during the quarter, though 0.5% under-recovery persists. As supply
700
constraints
` have started to ease, we expect volumes to pick up in subsequent
600
quarters, driven by better off-take of premium two-wheelers. Accordingly, we
500
expect margins of 10.4% in FY23 and 11% in FY24.
400
Jul-21
Aug-21
Sep-21

Jan-22

Mar-22
Oct-21
Nov-21
Dec-21

Jul-22
Feb-22

Mar-22
Apr-22
May-22
Jun-22
Valuation. We expect a 21% revenue CAGR over FY22-24, and 45% earnings
growth, leading to an EPS of Rs39.6. We maintain our Buy rating with a higher TP TVSL Sensex

of Rs1,030 (25x FY24e), incl. Rs41 a share for TVS Credit Services. Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 164,233 167,505 207,905 265,285 306,759
Net profit (Rs m) 5,922 -10,376 8,936 14,585 18,792
EPS (Rs) 13.1 -21.8 19.4 30.7 39.6
PE (x) 66.2 -39.9 44.8 28.4 22.0
EV / EBITDA (x) 31.9 -187.5 21.7 15.3 12.3
Vijay Sarthy TS
PBV (x) 11.4 9.9 8.6 7.0 5.6
Research Analyst
RoE (%) 17.0 -26.6 19.9 27.1 28.3 +9122 6626 6569
RoCE (%) 13.5 -15.9 17.3 22.6 24.4 vijaysarthy@rathi.com
Dividend yield (%) 0.5 0.2 0.5 0.8 1.1 AkshayKarwa
Net debt / equity (x) -0.5 -0.6 -0.4 -0.5 -0.6 Research Associate
Source: Company, Anand Rathi Research
akshaykarwa@rathi.com

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Auto
India I Equities Company Update

Change in Estimates Target Reco 

28 July 2022

SKF India Rating: Hold

Target Price: Rs.4,374
Robust overall performance; products added; upgrading to a Hold Share Price: Rs.4,114

Driven by its automotive division, demand for SKF India continued to be Key data SKF IN / SKFB.BO
robust due to better off-take in the quarter. Industrial demand, too, was 52-week high / low Rs4245 / 2715
strong. The company plans to add products to its portfolio for two-wheelers Sensex / Nifty 55816 / 16642
and four-wheelers. The industrials division continues to grow strong on 3-m average volume $2.2m
revival in economic activity, driven by construction equipment, cement Market cap Rs202bn / $2533.5m
Shares outstanding 49m
and steel. Besides, the company recently began supplies for EVs. Hence,
we upgrade our rating to a Hold, at a TP of Rs.4,374 (29x FY24e).
Shareholding pattern (%) Jun'22 Mar'22 Dec'21
Consistent profit growth. Q1 FY23 revenue grew 2% q/q, 52% y/y, to Promoters 52.6 52.6 52.6
- of which, Pledged 0.0 0.0 0.0
Rs10.5bn, as automobile and industrial demand was strong. The proportion of
Free float 47.4 47.4 47.4
traded goods went up to 34.5% (from 33.6% the previous quarter). Management - Foreign institutions 6.5 6.3 6.4
indicated it is working on improving localisation (now ~95% in auto, ~40% in - Domestic institutions 28.6 28.3 28.5
industrials). It has developed products for the aftermarket segment such as 1) - Public 12.4 12.8 12.5
chains and sprockets, 2) timing belts for PVs, 3) CVT belts for scooters and poly
V belts for PVs. In railways, it now has approvals for Class E and K bearings.
Estimates revision (%) FY23 FY24
Demand is expected to be strong as the Indian Railways has floated tenders to Sales 4.2 7.7
manufacture 90,000 LHB coaches. This augurs well for its overall growth. EBITDA 14.3 15.9
Accordingly, we expect 25% growth in FY23, and 22% in FY24. PAT 15.4 16.8

Margin expansion in the next two years. The Q1 FY23 EBITDA margin
expanded 207bps sequentially to 17.4% despite high raw material prices, Relative price performance
4,300
primarily due to the better product mix. Also, the company’s focus on increasing 4,100
3,900
localization content for high-margin industrial bearings would further boost 3,700
margins in years to come, in our view. Accordingly, we expect margins of 18% 3,500
` FY23, and 18.3% in FY24.
in 3,300
3,100
2,900
2,700
Valuation. We expect a 23% revenue CAGR over FY22-24, and 37% earnings 2,500
growth, leading to an EPS of Rs.150.8. We upgrade our rating to a Hold, at a
Jul-21
Aug-21
Sep-21

Jan-22

Mar-22
Oct-21
Nov-21
Dec-21

Feb-22

Mar-22
Apr-22
May-22
Jun-22
Jul-22
target price of Rs.4,374 (29x FY24e). Risks: Faster-than-estimated recovery in SKF Sensex
its automotive and industrials businesses. Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 28,416 26,707 36,659 45,824 55,905
Net profit (Rs m) 2,890 2,978 3,971 5,946 7,457
EPS (Rs) 58.5 60.2 80.3 120.3 150.8
P/E (x) 70.4 68.3 51.2 34.2 27.3
EV / EBITDA (x) 58.1 49.1 37.2 24.6 19.6 Vijay Sarthy TS
P/BV (x) 11.1 13.5 11.2 9.3 7.7 Research Analyst
RoE (%) 16.0 17.2 23.0 28.6 29.8 +9122 6626 6569
vijaysarthy@rathi.com
RoCE (%) 16.2 17.3 23.1 28.6 29.8
Dividend yield (%) 0.4 0.4 0.4 0.4 1.1 AkshayKarwa
Net debt / equity (x) -0.3 -0.3 -0.2 -0.3 -0.3 Research Associate
akshaykarwa@rathi.com
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Consumer Durables
India I Equities
Company Update
Change in Estimates Target Reco 

28 July 2022

KEI Industries Rating: Hold

Target Price: Rs.1,328
Better balance sheet, a key positive; retaining a Hold with a higher TP
Share Price: Rs.1,243
Institutional orders, EPC and the rising retail contribution restricts the
earnings cut needed to factor in the slower pace of channel stocking. We Key data KEII IN / KEIN.BO
raise our FY23e and FY24e revenue 5% each, while the EBITDA and net 52-week high / low Rs.1377 / 690
income we reduce by an average of 2% and 1% respectively. Sensex / Nifty 55816 / 16642
3-m average volume $4m
Tepid start to FY23. KEI’s Q1 FY23 revenue rose 54% y/y on a lower base; Market cap Rs.112bn / $1406.4m
q/q though, it slid 13%. The EBITDA margin expanded 60bps q/q, chiefly Shares outstanding 90m
because of the 70bp gross-margin improvement. Staff costs rose 12% q/q;
other expenses were 18% lower q/q. With the 26% tax rate, net income fell Shareholding pattern (%) Jun’22 Mar’22 Dec’21
10% q/q. Gross debt at end-Q1 FY23 was Rs1.01bn (Rs3.3bn the quarter Promoters 38.0 38.0 39.2
prior), while the outstanding cash balance was Rs1.7bn (Rs3.6bn). Acceptances - of which, Pledged - - -
at end-Q1 FY23 were Rs1.03bn (Rs3bn). Free float 61.9 61.9 60.8
- Foreign institutions 26.5 25.2 21.8
Guides to 17-18% revenue growth in FY23. KEI aims to grow its revenue - Domestic institutions 19.5 21.6 24.0
- Public 16.0 15.2 16.2
17-18% in FY23 despite the near-term tepid demand. Most of its peers have
sizable retail operations and are expecting a dull Q2 FY22 as the pace of
stocking by channel partners is slower amid falling commodity prices. Estimates revision (%) FY23e FY24e
Revenue 5 5
Pending EPC order book of Rs27.4bn. At end-Q1 FY23, the pending order EBITDA (2) (1)
book was Rs27.4bn, and the company is the lowest bidder in a Rs2.3bn order EPS (1) (1)
to supply extra-high-voltage cables.
Rs8bn capex planned for the next 3-4 years. KEI’s annual maintenance Relative price performance
1,400
capex is ~Rs200m-250m. Besides, it will expand capacity at its low-tension- 1,300
cable Silvassa plant. As its plants are operating at high capacity, it plans to set 1,200
up a plant in Baroda. This would require Rs8bn capex over the next 3-4 years. 1,100
1,000
900
Valuation. We expand PE assigned to the stock from 19x to 21x (+1 SD being 800
16x) and maintain a Hold rating with a TP of Rs1,328 (21x FY24e EPS of 700
600
Rs63.3), the earlier TP being Rs1,210, at 19x FY24e EPS of Rs63.7. At the
Jul-21
Aug-21
Sep-21

Jan-22

Mar-22
Oct-21
Nov-21
Dec-21

Feb-22

Mar-22
Apr-22
May-22
Jun-22
CMP, the stock trades at 24x and 20x the FY23e and FY24e EPS of Rs51.4 and Jul-22

Rs63.3 respectively. Risk: The slow pace of dealer addition can restrict revenue KEII Sensex

from retailers, which KEI intends to expand. Source: Bloomberg

Key financials (YE: Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 48,878 41,815 57,266 66,759 77,669
Net profit (Rs m) 2,563 2,695 3,760 4,654 5,723
EPS (Rs) 31.2 29.8 41.6 51.4 63.3
PE (x) 15.3 36.6 29.9 24.2 19.7
EV / EBITDA (x) 8.2 21.8 19.1 15.7 12.5
PBV (x) 2.6 5.6 5.3 4.3 3.5
RoE (%) 17.0 15.2 17.6 17.9 18.0
RoCE (%) 18.1 14.1 15.8 17.2 17.4
Nirav Vasa
Research Analyst
Dividend yield (%) 0.1 0.2 0.2 0.2 0.3 +91 22 6626 6807
Net debt / equity (x) 0.2 0.2 0.2 0.0 0.0 niravvasa@rathi.com
Source: Company

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Plastic Products
India I Equities Company Update

Change in Estimates Target Reco 

28 July 2022

Finolex Industries Rating: Buy

Target Price: Rs.173
Disappointing performance, near-term pain to persist; retaining a Buy Share Price: Rs.132

Finolex’s Q1 FY23 revenue grew 23% y/y to Rs11.9bn. Higher input prices
slashed the gross margin 726bps y/y to 32.8%. This and higher other Key data FNXP IN / FINX.BO
52-week high / low Rs268 / 125
operating expenses further hurt the EBITDA margin, which contracted
Sensex / Nifty 55816 / 16642
1,112bps y/y to 10.6%. Higher other income and lower tax restricted the 3-m average volume $0.8m
decline in PAT (Rs992m) to 32% y/y (ARe: revenue/EBITDA margin/ Market cap Rs82bn / $1025.8m
PAT of Rs13.2bn/16.3%/Rs1.6bn). The performance considerably belied Shares outstanding 620m
our expectation.
Shareholding pattern (%) Jun’22 Mar’22 Dec’21
Performance disappoints, pricing plays havoc. High prices at the start of
Promoters 52.5 52.5 52.5
the quarter led to a build-up of high-cost stocks; the fall in prices toward the
- of which, Pledged - - -
quarter’s end led to unsold stocks being marked down. This cut into profits. Free float 47.5 47.5 47.5
- Foreign institutions 5.7 5.8 5.7
More sales volumes (y/y) drove revenue growth. Sales volumes of PVC
- Domestic institutions 9.8 9.5 9.8
resin and PVC pipes & fittings were up 25% and 29% y/y to 62,746 and 71,960
- Public 32.0 32.2 32.0
tonnes respectively (sequentially down 21% and 9%). Realisations in PVC resin
were subdued (Rs125/kg); in PVC pipes & fittings they rose 4% y/y to Rs157
Estimates revision (%) FY23e FY24e
(sequentially down 5% and 3% respectively).
Sales (7.0) (5.6)
Healthy balance sheet. Significant capex at this stage has been ruled out as EBITDA (26.7) (17.1)
capacity utilisation is not yet at an optimum level. The company has surplus PAT (30.1) (20.8)
cash of ~Rs13bn. Inorganic growth opportunities are being explored in case
otherwise shareholders will be rewarded appropriately (timeframe uncertain). Relative price performance
260
240
Valuation. At the CMP, the stock trades at 15.9x/13.4x FY23e/FY24e EPS. 220
It has fallen a steep 46% from its 52-week high (16%/26% in the last 3M/6M). 200
180
Performance would be muted as the near-term pricing situation is challenging 160
(likely to stabilise by end-Q2 FY23). However, we derive comfort from the ` 140
120
encouraging demand outlook (lower PVC resin prices would boost off-take). 100
Also, an early announcement of surplus-cash deployment to reward share-
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Mar-22
Apr-22
May-22
Jun-22
holders or for inorganic opportunities could boost sentiment. Hence we Jul-22
FNXP Sensex
maintain a Buy rating on the stock, cutting our TP to Rs173 (earlier Rs218)
based on 17.5x (unchanged) FY24e earnings. Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 29,845 34,628 46,473 40,662 46,112
Net profit (Rs m) 3,324 7,377 6,889 5,176 6,133
EPS (Rs) 5.4 11.9 11.1 8.3 9.9
P/E (x) 24.7 11.1 11.9 15.9 13.4
EV / EBITDA (x) 18.8 7.9 7.0 9.6 8.0
P/BV (x) 4.1 2.6 2.1 2.0 1.8
RoE (%) 14.6 28.8 19.5 12.8 14.3 Rishab Bothra
RoCE (%) after tax 11.2 22.8 18.2 11.0 12.3 Research Analyst
+9122 66266407
Dividend yield (%) 1.8 3.0 3.8 3.8 3.8
rishabbothra@rathi.com
Net debt / equity (x) 0.1 (0.1) (0.3) (0.3) (0.3)
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

Anand Rathi Research India Equities

 Auto
India I Equities Company Update

Change in Estimates Target Reco 

28 July 2022

Jamna Auto Industries Rating: Sell

Target Price: Rs.122
Improving M&HCV off-take, margin pressures; maintaining a Sell Share Price: Rs.128

Consistent growth in M&HCV industry volumes led to Jamna Auto’s

strong top-line performance. We expect the M&HCV off-take to continue Key data JMNA IN / JMNA.BO

to improve m/m. However, as valuations are expensive on the steep run- 52-week high / low Rs.136 / 78
Sensex / Nifty 55816 / 16642
up in the stock price, we maintain a Sell at a revised TP of Rs122 (20x 3-m average volume $2.7m
FY24e). Market cap Rs.51bn / $640.8m
Shares outstanding 399m
Improving demand for M&HCVs. Q1 revenues grew 85% y/y, but q/q fell
12%, to Rs5.5bn as M&HCV production grew 100% y/y, but declined 4% q/q
to ~95,000 units (~ 99,000 the prior quarter). The company’s new-markets Shareholding pattern (%) Jun'22 Mar'22 Dec'21
division contributed 19% (23% the previous quarter) to revenue, while the Promoters 50.0 50.0 50.0
OEM share of business grew to 81% (vs. 77%). Share of new products grew - of which, Pledged 1.9 1.9 1.4
from 36% the quarter prior to 43% in Q1 FY23. We expect the M&HCV Free float 50.0 50.0 50.0
momentum to improve m/m in the near to medium term. Also, as freight - Foreign institutions 6.6 5.6 6.7
utilisation rises, we expect replacement demand in coming quarters, aiding - Domestic institutions 13.8 13.6 12.9
overall industry growth. In the Aftermarket division, the company added - Public 29.6 30.9 30.4

products such as brake linings, trailer axles, water pumps, clutches, bearings and
jack rods, focusing on increasing content per vehicle, along with a few products Estimates revision (%) FY23 FY24
being developed. On the OEM side, products such as Bogie brackets, NODO Sales 23.7 27.2
brackets, ATS brackets and others are being developed. Hence, we expect EBITDA 23.7 27.2
revenues to grow 25% in FY23 and 17% in FY24. EPS 30.9 33.8

Margin improvement in the next two years. The Q1 gross margin expanded
271bps sequentially to 34.5% as high raw material prices from the previous Relative price performance
140
quarter were passed on. Price pass-through happens with a quarter’s lag and we 130
expect
` margins to stabilise in the following quarters. As M&H CV volumes 120
110
continue to grow, we expect operating-leverage-led margin expansion. 100
Accordingly, we expect margins of 13.7% in FY23 and 14% in FY24. 90
80
70
Valuation. We expect a 21% revenue CAGR over FY22-24, and 31% earnings 60
growth, leading to an EPS of Rs6.1. We believe the stock is fully valued; hence,
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22

we maintain our Sell rating, at a higher target price of Rs122 (20x FY24e). Risk:
JMNA Sensex
More-than-anticipated replacement/OEM growth in FY23 and FY24.
Source: Bloomberg

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 11,290 10,795 17,179 21,476 25,177
Net profit (Rs m) 479 730 1,408 2,024 2,432
EPS (Rs) 1.2 1.8 3.5 5.1 6.1
PE (x) 106.8 70.1 36.3 25.3 21.0
EV / EBITDA (x) 46.0 38.3 23.3 16.8 13.5 Vijay Sarthy TS
PBV (x) 9.9 8.8 7.5 5.8 4.6 Research Analyst
+9122 6626 6569
RoE (%) 9.3 13.3 22.3 25.9 24.5 vijaysarthy@rathi.com
RoCE (%) 10.2 12.5 19.8 23.3 24.5
Dividend yield (%) 0.3 0.5 0.9 1.3 1.6
AkshayKarwa
Research Associate
Net debt / equity (x) 0.3 -0.1 0.2 -0.2 -0.3 akshaykarwa@rathi.com
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm. The views expressed are solely of ARSSBL, not of
the companies covered in this Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst certifications are given in the Appendix.

Anand Rathi Research India Equities

 Healthcare
India I Equities Company Update

Change in Estimates Target Reco 

28 July 2022

Aarti Drugs Rating: Hold

Target Price: Rs.469
Subdued Q1; price hikes to help offset high costs; maintaining a Hold Share Price: Rs.415
As API price hikes led to lower stocks (sales fell 16% q/q) with customers,
Aarti Drugs’ Q1 revenues fell 10% q/q to Rs6.2bn. High input costs, Key data ARTD IN / ADRG.BO
52-week high / low Rs695 / 378
notional forex loss on imports and elevated power & coal costs (Rs105m) Sensex / Nifty 55816 / 16642
trimmed its operating performance. The lower revenue base and steady 3-m average volume $0.4m
absolute expenses squeezed EBITDA margins 160bps q/q to 10.8%. PAT Market cap Rs38bn / $470.2m
fell 37% q/q to Rs348m. Rising volumes, launches (gliptins/derma in API, Shares outstanding 93m
oncology formulations), scaling up new sites and softening raw material
prices would boost sales/PAT 16%/23% over FY22-24. At the CMP, the
stock trades at 15x/12x FY23e/FY24e EPS. We retain our Hold rating, with
a price target of Rs469 (14x FY24e earnings). Shareholding pattern (%) Jun'22 Mar'22 Dec'21
Promoters 60.0 59.8 60.0
Sequentially revenues declined 10%. Price hikes for APIs led to a 10% - of which, Pledged 0.0 0.0 0.0
decline in sales on lower stocks with customers. Formulations picked up 28% Free float 40.0 40.2 40.0
on launches, while sales of specialty chemicals were flat. The lower demand due - Foreign institutions 2.1 2.1 2.0
to API price hikes should eventually reverse. Volumes could increase in Q2 as - Domestic institutions 2.8 2.7 2.3
most domestic customers (~80%) keep stocks for a month of deliveries. - Public 35.2 35.4 35.7
Exporters stock up for three months of deliveries.

Growth to be reflected in H2. API revenue growth should be aided by price

hikes (in Q1), a gradual uptick in volumes (from Q2), good traction in anti-
Relative price performance
diabetes drugs (gliptins) and launches (derma from Tarapur). This would be 900
further boosted by launches of oncology products (formulations) and scaling 800
up of chloro-sulfonation technology (specialty). Management expects the 700
operating performance to improve to 15-16% in 2-3 quarters. It is on track for 600
capex planned of Rs2.5bn-3.5bn in FY23 (Rs350m incurred in Q1). 500
400
Valuation. Easing raw-material prices, increase in volumes and investments in 300
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22

Jul-22
Feb-22
Mar-22
Mar-22
Apr-22
May-22
margin-accretive businesses would boost sales/EBITDA/PAT 16%/23%/23% Jun-22

over FY22-24. At the CMP of Rs415, the stock trades at 16x/12x FY23e/FY24e ARTD Sensex
earnings. Risks: Delay in capacity addition, keener competition in generic APIs Source: Bloomberg
and deterioration in API pricing.

Key financials (YE Mar) FY20 FY21 FY22 FY23e FY24e

Sales (Rs m) 18,061 21,548 24,887 28,701 33,304
Net profit (Rs m) 1,380 2,802 2,050 2,431 3,105
EPS (Rs) 14.8 30.1 22.1 26.3 33.5
P/E (x) 8.2 23.1 19.4 15.8 12.4
EV / EBITDA (x) 5.7 15.7 13.8 11.0 8.5
Aarti Rao
Research Analyst
P/BV (x) 1.7 7.1 3.9 3.2 2.7 +9122 6626 6666
RoE (%) 23.1 35.8 21.0 21.5 23.0 aartirao@rathi.com
RoCE (%) 14.5 23.9 14.4 14.4 16.0 Maulik Varia
Dividend yield (%) 2.1 0.6 1.4 1.4 1.4 Research Associate
Net debt / equity (x) 0.6 0.4 0.5 0.4 0.3 maulikvaria@rathi.com
Source: Company, Anand Rathi Research

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities-research firm and the views expressed therein are solely of
ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst
certifications are present in the Appendix.

AnandRathi Research India Equities

Appendix
Analyst Certification
The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by
stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely
delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report.

Anand Rathi Ratings Definitions

Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (<US$1bn) as described in the Ratings Table
below:
Ratings Guide (12 months)
Buy Hold Sell
Large Caps (>US$1bn) >15% 5-15% <5%
Mid/Small Caps (<US$1bn) >25% 5-25% <5%

Research Disclaimer and Disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014

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ARSSBL/its Associates/ Research Analyst/ his Relative have actual/beneficial ownership of one per cent or more securities of the subject company No
ARSSBL/its Associates/ Research Analyst/ his Relative have any other material conflict of interest at the time of publication of the research report? No
ARSSBL/its Associates/ Research Analyst/ his Relative have received any compensation from the subject company in the past twelve months No
ARSSBL/its Associates/ Research Analyst/ his Relative have managed or co-managed public offering of securities for the subject company in the past twelve months No
ARSSBL/its Associates/ Research Analyst/ his Relative have received any compensation for investment banking or merchant banking or brokerage services from the subject No
company in the past twelve months
ARSSBL/its Associates/ Research Analyst/ his Relative have received any compensation for products or services other than investment banking or merchant banking or No
brokerage services from the subject company in the past twelve months
ARSSBL/its Associates/ Research Analyst/ his Relative have received any compensation or other benefits from the subject company or third party in connection with the No
research report
ARSSBL/its Associates/ Research Analyst/ his Relative have served as an officer, director or employee of the subject company. No
ARSSBL/its Associates/ Research Analyst/ his Relative has been engaged in market making activity for the subject company. No

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