Gruh Finance Ltd

Stock Data No. of shares Market cap 52 week high/low Avg. daily vol. (6mth) Bloomberg code Reuters code : 17.80 Cr : Rs. 3871 Cr : Rs 250/ Rs 112 : 165,249 shares : GRFH IN : Gruh.BO

218 Target Price: Rs 266 Potential Upside: 22% Absolute Rating: BUY

CMP: Rs

Shareholding (%) Promoters FIIs MFs / UTI Banks / FIs Others : : : : :

Dec 12 Dec-12 59.86 14.34 1.08 0.02 24.7

QoQ chg (0.04) (0.70) (0.62) 0.00 1.36

Relative Performance
30000 20000 10000 0 Jan-12 BSE_SENSEX Jul-12 300 200 100 0 Jan-13 GRUH Finance Ltd

Strong Financials A play on the growing rural housing demand

Financial Summary
Y/E Mar FY11 FY12E FY13E FY14E PAT (Rs. Cr) 91.5 120.3 134.7 164 9 164.9 EPS (Rs.) 5.2 6.8 7.6 93 9.3 Change YoY (%) 32.7 31.5 11.9 22 4 22.4 P/E (x) 22.2 22.8 29.5 24 1 24.1 BV (Rs.) 18.1 21.8 26.7 33 2 33.2 P/BV (x) 6.4 7.1 8.4 68 6.8 Net NPA (%) 0.0 0.0 0.0 00 0.0 Adj BV (Rs.) 18.1 21.8 26.7 33 2 33.2 P/Adj.BV (x) 6.4 7.1 8.4 68 6.8 RoE (%) 31.4 34.2 31.5 31 2 31.2 RoA (%) 3.1 3.2 2.9 28 2.8

Source: Axis Securities, Bloomberg

Source: Company, Axis Securities Ltd.

Pankit Shah
Asst. Vice President
Pankit.shah@enam.com (+91 22 6680 3623)

January 30, 2013

The name of the company has changed to AXIS Securities Limited in the records of Registrar of Companies, Mumbai. Awaiting approval for change of name from Exchanges and SEBI.

1 1

Housing FinanceSecular Growth to Continue

India has low Mortgage Penetration as a % of GDP
120 100 80 60 40 20 0 UK U US SA HongKon ng Taiwa an ea Kore Denmar rk German ny Singapor re Chin na Malaysia Thailan nd India 48 41 39 104 88 81 800 600 32 29 400 20 20 17 9 200 0 1991 1995 2000 2001 2005 2010 2015 2020

Indias rising work force shall lead to more demand for homes
1,000 (mn) (%) 66 64 62 60 58 56

Working pop

Ratio (RHS)

60% of Indias population is below 30 yrs of age and that along with rising middle class -- augurs well for housing finance industry
1,500 1,200 (mn)

Improving affordability
45 36 27 (Rs lacs) (%) 25 20 15 10 5 0 1995 1996 1997 1998 1999 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2011

900 18 600 300 0 1991 1995 2000 0-19 2001 20-45 2005 2010 46-60 2015 61+ 2020 9 0

Property Cost

Annual Income

Affordability (RHS)

Source: Company, ENAM Research, Bloomberg.

Niche Presence in Economically Vibrant States of Gujarat and Maharashtra

Housing Price Index Holding on In spite of slowdown
350 300 250 200 150 100 50

Maharashtra and Gujarat Continue to Witness Robust Growth

14% 12% 10% 8% 6% 4%

Jaipur Jaipur

Kolkata Kolkata

A hmedabad Ah hmedabad

Bengaluru B Bengaluru

Chennai Chennai

Mumbai Mumbai

Bhopal Bhopal

Surat Surat

Pune Pune

2% 0% F Y 08 F Y 09 Gujarat F Y 10 Maharashtra F Y 11 All F Y 12

July-Sept 2010 Index Oct-Dec 2011 Index

Oct-Dec 2010 Index Jan-Mar 2012 Index

Jan-Mar 2011 Index Apr-Jun 2012 Index

Apr-Jun 2011 Index Jul-Sep 2012 Index

Jul-Sept 2011 Index

Per-Capita Income in Maharashtra and Gujarat

80000 60000 40000

Governments expenditure on Rural Sector

50000 40000 30000 20000

20000 0 FY07 FY08 Gujarat FY09 Maharashtra FY10 FY11 FY12

10000 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13e

All India

S Special i lP Programmes

R l Employment Rural E l t

Oth Others

Source: Company, ENAM Research, Bloomberg.

Company Background
Founded in 1986 by HDFC and AKFED, Gruh Finance is one of Indias leading housing finance providers focused in the rural and semi-urban sector. It is recognized by NHB as an eligible housing finance company for refinance facility since 1989 and became a subsidiary of HDFC in June 2000. Gruh has 121 retail offices across seven states of India i.e. Gujarat, Maharashtra, Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh and Tamil Nadu with first two forming more than 75% of total loan portfolio. Apart from extending home loans and repair loans under its Suraksha and Sajavat schemes respectively, Gruh Finance offers loans to families for purchase, construction, repair and renovation of non-residential properties like office premises, clinics etc under its Samruddhi scheme. The company has also introduced personal loans under the Sahyog scheme for its existing home loan customers with a view to meet their other financial needs like education, hospitalization, holiday travel and wedding against the mortgage of residential properties. Th The Company C h designed has d i d a new variant i of f home h l loan product d Gruh G h Suvidha S idh to meet the h requirement i of f a flexible fl ibl repayment plan for the self-employed and the skilled workers segment. Under this product, a customer is given an initial monthly installment that can match his present cash flows with an annual step up for each subsequent year over the tenure of the loan depending on likely future cash flow.

Source: Company, Axis Securities.

Promoters - Background
The senior management of the company is fairly experienced and is closely aligned with its parent company. The Board of Directors comprises of nine directors - three of whom are from HDFC. The company is led by Mr. Keki Mistry (Nonexecutive Chairman) and Mr. Sudhin Choksey (Managing Director). Keki Mistry: Chairman

Mr. Mistry is the non-executive Chairman of the company and the Vice-Chairman and CEO of HDFC Ltd. He has been on the board of Gruh since 2000 and is a member of the Audit and Compensation Committees.

Sudhin Choksey: Managing Director

Mr. Choksey has been on the board of Gruh since May 1996. He was made the CEO of the company in 1998 and the Managing Director in 2000. He is a member of the Investors Grievance Committee.

Other Directors

The company has 7 other directors all of which have been associated with the company for a fairly long time. The members on the board include Ms. Renu Karnad (Member of the Compensation Committee). Mr. K.G. Krishnamurthy (Managing Director & CEO of HDFC Property Ventures Ltd (HPVL), Mr. S.M. Palia: (Chairman of the Audit, Compensation and Investors Grievance Committees), Mr. Rohit Mehta (Member of the Audit Committee), Mr. Prafull Anubhai (Member of the Audit and Investors Grievance Committees), Mr. S.G. Mankad and Mr. Kamlesh Shah.

Investment Rationale
Niche presence in the semi-urban and rural areas of Gujarat and Maharashtra

Overall, the company operates 121 retail offices across seven states Gujarat and Maharashtra also accounted for +75% of the disbursements in FY12, with the balance coming from states like Madhya Pradesh, Karnataka, Rajasthan, Tamil Nadu and Chhattisgarh

Riding on strong housing demand, the company provides sustainable growth trajectory

Disbursements have grown at a CAGR of 26% and PAT at 32% over the last 5 years.

Well managed Asset Quality with 100% Loan coverage (Gross NPA of 0 0.52% 52% and Net NPA Nil) Robust NIMs backed by consistent operating performance

NIMs at ~ 5% in the last 2 years are amongst the best in the industry Cost to Income co e Ratio at o at less ess than t a 20% 0 is s lowest o est a among o g its ts peers pee s following o o gb branch a c based bus business ess model ode

Best in class Return Ratios

ROA in excess of 3% ROEs of ~ 30%

Stable Borrowing Mix

Apart from conventional bank borrowings and re-finance facilities from NHB, the company has regularly tapped other financing sources such as NCDs, commercial paper and public deposits. In the last few years, GRUH has reduced its reliance on bank borrowings in favor of facilities from NHB. NHB The change in composition of the borrowing mix will help in drastically bringing down the borrowing cost for the company and hence aid the company in maintaining its robust margins in the years to follow. 6

Source: Company, Axis Securities.

Niche Presence in the Semi-urban and Rural Areas

Customer Profile
Self Employed 20% Employed Govt. Sector 38%

Businessmen 18%

Professionals 2%

Employed Private Sector 22%

Gruh Finance is a small-sized, niche player in the housing finance market providing low ticket housing loans to customers from semiurban and rural areas. Gruh is primarily concentrated in the fast growing states of Gujarat and Maharashtra which account for more than 75% of disbursements. After the success in these 2 states, it has now commenced lending operations in Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh and Tamil Nadu. Overall, the company operates 121 retail offices across seven states. Given its pricing power in predominantly rural and semi-urban markets, Gruh is able to maintain its spread which protects its margins.

Majority of loan book for Housing Finance to Salaried Individuals

120% 100% 80% 60% 40% 20% 0% FY08 Salaried FY09 Self Employed FY10 FY11 FY12 Others - Individuals Developer Loans 61% 4% 33% 4% 37% 3% 39% 3% 39% 4% 36.50%

Primary presence in fast growing states of Maharashtra and Gujarat

Gujarat, 39.67%

Maharashtra, 37.94%

57%

56%

56%

58%

Tamil Nadu 2.28% Chhattisgarh, 1.88%

Karnataka 3.75% Madhya Pradesh 10.79% Rajasthan 3.68% 3 68%

Source: Company, Axis Securities.

Sustainable Growth Trajectory

Healthy Disbursement and Loan Book
8000 6000 4000 2000 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E

Gruh Finance is likely to continue benefiting from rising rural cash flows on back of its expertise in semi-urban and rural areas and proven business model. Over 90% of loan portfolio comprises of individual housing loans with rural loans contributing 43%. Expansion into newer territories coupled with Maharashtra and Gujarats growing economy has helped Gruh Finance to step up its loan book . During FY07-12, the disbursements increased at a CAGR of 26% while loan assets grew at CAGR of 24%.

O/S Loan Book

Disbursements

Considering growth potential in newly entered states and Gruhs building capability, we expect loan book growth of ~26% over FY13-15 with steady NIMs at ~5%.

Well Capitalized Balance Sheet

20 0 20.0 15.0 10.0 18 2 18.2 16.2 16.6 13.3 14.0

Client Relations across most of the districts and Talukas

400 15.0 15.0 300 200 100 224 357 291 215 120 63 66 259 175 89 25 Ch hhattisgarh 22 TN 240

209

5.0 0.0 FY08 FY09 FY10 FY11 CAR

Source: Company, Axis Securities.

0 Ma aharashtra FY12 FY13E FY14E Karnataka Rajasthan Gujarat MP Taluka

Gruh Presence

Well Managed Asset Quality with 100% Loan Coverage

GNPA (%)
Dewan Housing GIC Housing LIC Housing HDFC GRUH Finance 0 0.2 0.4 0.6 0.8 1

Gruhs loan book is characterized by middle-income borrowers, with modest ticket loans and comfortable Loan to Value Ratio. Given its large concentration in Tier II and Tier III city, the average size of loans offered by Gruh is small with more than 70% of the properties financed with loans of less than Rs. 10 lakhs. Over past 5 years, Gruh Finance has maintained Gross NPAs at ~1 along with 100% provisional coverage ratio. Efficient credit approval and recovery mechanisms along with strong cash flows have helped the company to keep Net NPAs at Nil, despite exposure to a risky segment. Most loan approvals passed stringent ratio criteria such as healthy loan-tovalue and installment to income ratios.

Provisional Coverage (%)

Well managed asset Quality (100% PCR and NIL Net NPAs)
100 100 100 100 100 100 100 100 100.0 1.4 1.1 0.9 1.1 0.8 1.0 1.0 1.0 90.0 80.0 70.0 60.0 0.0 FY07 120 0.0 FY08 0.0 FY09 0.0 FY10 0.0 FY11 0.0 FY12 0.0 FY13E 0.0 FY14E 50.0 2.0 1.6 1.2

Dewan Housing GIC Housing LIC Housing HDFC GRUH Finance 0 20 40 60 80

81 83.5 100 100 100 100

0.8 0.4 0.0

Net NPAs (%)

Gross NPAs (%)

PCR (%)

Source: Company, Axis Securities.

Robust NIMs Backed by Consistent Operating Performance

Gruh Finance enjoys pricing power in rural and semi-urban market due to low competition and low interest rate sensitivity. The company has been able to pass on increased cost of funds to borrowers and maintain its NIMs at ~5% during past 2 years. We expect the trend to continue going forward . Moreover the company faces limited competition risk in the markets in which it is already operational as the lower to middle housing finance segment entails high cost of operation. Operations in rural and semi-urban areas entail significant cost in terms of client assessment and customer acquisition due to small ticket loans and servicing of customers at rural locations. Besides, cost of collection is higher as repayment through outstation cheques delay actual realization of funds. Due to such entry barriers, Gruh Finance faces limited competition from small number of PSU banks and local money lenders. On demand side, interest rate sensitivity is lower for middle to low income group since effective interest rates are lesser due to tax benefits of upto 2.5 lacs per annum. Besides, more than 98% of its loan book comprises of floating rate loans. Consequently, Gruh Finance has been able to pass on increased cost of funds to borrowers and maintain its NIMs at ~5% during last 2 years.

Source: Company, Axis Securities.

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Robust NIMs Backed by Consistent Operating Performance

Robust NIMs
16 12 8 4 0 FY08 FY09 FY10 FY11 FY12 FY13E FY14E 6 5 4 3 2 1 0 20 11.3 10 0 FY08 FY09 FY10 FY11 FY12 FY13E FY14E 18.5 13.4 12.6 14.7 12.8 13.7

Strong Business per Employee

40 30 20 4 20.4 15.5 33.1 23.6 17.6 24.8 22.4

Avg yield on adv

Avg Cost of Loan Funds

NIM (Calculated)

Business/Employee (Rs Cr)

Profit/Employee (Rs. Lakh)

Lowest Operating Cost in the industry

25 20 15 10 23 2 23.2 22.0 22.1 19.7 19.5 19.5 19.1 18.4

Strong Business per Branch

100 80 82 60 40 60.9 68.8 89 115 95 87.5 43.3 20 FY08 48.7 50.3 53.4 145 130 145 160 120 80 40 0 FY09 FY10 FY11 FY12 FY13E FY14E

5 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E Operating Cost as % of Net Income
Source: Company, Axis Securities.

Business/Branch (Rs. Cr)

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Best in Class Return Ratios

Return ratios to remain healthy
40.0 30.0 20.0 10.0 FY08 FY09 FY10 ROE (%) FY11 FY12 FY13E FY14E 28.4 23.9 24.5 2.7 2.3 3.1 3.2 3.0 3.2 3.0 2.0 1.0 31.4 34.2 33.2 35.1 5.0 4.0

We expect Gruh Finance to report strong earnings over the next 3 years aided by solid loan book growth, stable NIMs and lower operating expenses. Consistent improvement in profit metrics is a reflection of strong traction in margins and tight control by the management over operating and credit costs. ROE has improved from 24% in FY07 to 34% in FY12 while ROA has expanded from 2.2% to 3.1% during this period. These best-in-class financial metrics reflect management quality and HDFCs philosophy, which is centered on achieving healthy metrics without taking undue risks and compromising on balance sheet quality. Gruh Finance has always been gradual in expanding its branch network We expect the company to add 15 branches and 60 network. employees every year.

2.5

ROA (%) [RHS]

RoA (%)
Dewan Housing GIC Housing LIC Housing HDFC GRUH Finance 0 05 0.5 1 15 1.5 2 25 2.5 3 1.6 2.9 3.2 35 3.5 1.6 3.25

The company is likely to witness steady improvement in operational efficiency over FY12-14. Productivity ratios such as business per branch, branch business per employee and profit per employee too would continue its steady growth path demonstrated over last 5 years. Consequently, return ratios would remain attractive.

Source: Company, Axis Securities.

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Stable Borrowing Mix

Borrowing Profile - Tenure
Short Term 6.07%

GRUH Finance enjoys a stable and diversified funding profile, which is well supported by its parentage. Apart from conventional bank borrowings and re-finance facilities from NHB, the company has regularly tapped other financing sources such as NCDs, NCDs commercial paper and public deposits. deposits In the last few years, GRUH has reduced its reliance on bank borrowings in favor of facilities from NHB. The proportion of bank borrowings in total funding mix declined from 52.5% in FY07 to 34% in FY12. Moreover, the share of loans from NHB has increased from 17.4% to 49.0% during this period.

Long Term 93.93%

Source of Borrowing
Public Deposits 11.88% Subordinated Debt 1.04% NCD 3.70% National Housing Bank 49.40%

The change in composition of the borrowing mix will help in drastically g g down the borrowing g cost for the NBFC and hence aid the bringing company in maintaining its robust margins in the years to follow. Promoter backing ensures that GRUH is comfortably placed in terms of its financing requirements from both commercial banks and market instruments. Re-financing facilities from NHB provide further comfort. GRUHs strong credit ratings (AA+ - ICRA; AA+ - CRISIL), along with demonstrated support from the parent HDFC Ltd., enables it to raise funds at competitive rates. GRUH predominantly lends on floating rates (~99% of loan book is on floating basis), basis) which provides a significant leeway in passing on interest rate hikes to customers and hence, mitigates interest rate risks.

Banks 33.98%

Source: Company, Axis Securities.

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Valuation and Risk Factors

Gruh Finance- P/BV band
400 14x 300 200 100 2x 0 11x 8x 5x

Valuation
The stock trades at premium valuation of 8x FY13E and 6.3x FY14E P/ABV. Due to consistent growth prospects, stable performance, healthy margins and well managed asset quality, we believe that the stock would continue to trade at a premium multiplier. Gruh Finances operating performance in last 2 years has been quite remarkable delivering the best return ratios in the industry. The company has outperformed its parent company HDFC on parameters like return ratios and loan growth. We have valued the stock at 8x FY14E P/ABV which gives us the price target of Rs. 266 reflecting an upside of 22% to CMP. We expect the companys loan book to witness healthy CAGR of 24% during FY12-14 with steady NIMs at ~5%. We initiate coverage with a BUY rating on the stock.

20 00704

20 00804

20 00904

20 01004

20 01104

M onthly Price

Gruh Finance-12mth fwd P/B (x)

8 6 4 2 0

20 01204

20 01301

Risk Factors
Any unfavorable change in policies such as cost of refinancing by NHB would adversely affect rural demand leading to rise in NPAs. y trades at p premium valuation on account of best in The stock currently class NIMs. Any increase in funding costs may adversely impact NIMs and hence reduce the target multiple.
Jan-13
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12

Sharp deterioration in asset quality Sharp slowdown in loan growth Regulatory developments which may enhance the competitive pressure in the housing finance market

Gruh F inance
Source: Company, Axis Securities.

Mean

+ 1 STDDEV

-1 STDDEV

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Company Financials
Profit & Loss
Y/E March Interest Earned (A) Interest Expended Net Interest Income Non-Interest Income (B) - Sale of Investments - Other income Net Total Income Total Income (A+B) Operating Expenses - Staff Costs Operating Profit Profit including extraordinary income Provisions Profit after Provisions Tax PAT FY11 346 201 145 15 1 14 159 360 31 16 127 128 3 126 34 92 FY12 491 309 182 23 6 17 205 514 40 20 159 165 2 163 42 120 FY13E 647 434 213 27 6 21 240 674 47 25 187 193 6 187 52 135

(Rs cr)
FY14E 812 548 264 32 6 27 296 844 59 31 232 238 9 229 64 165

Key Ratios
Y/E March
Valuations EPS (Rs.) ROA ROE BV (Rs.) j BV ( (Rs.) ) Adj. 5 3.1 31.4 18 18 7 3.2 34.2 22 22 8 2.9 31.5 27 27

(%)
FY11 FY12 FY13E FY14E

9 2.8 31.2 33 33

Yields & Margins Average Yield on Advances Average Cost of Borrowing NIM 11.9 7.6 5.1 13.1 9.1 5.0 13.5 8.5 4.6 13.7 9.0 4.6

Asset Quality Net NPAs (Rs. Cr) Net NPAs (%) Provisioning Coverage (%) Capital Others Operating Cost as % of Net Income 20 20 20 20 0.0 0.0 100 0.0 0.0 100 0.0 0.0 100 0.0 0.0 100

Source: Company, Axis Capital

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Company Financials
Balance Shet
Y/E March Capital Reserves and Surplus Networth Borrowings Total Liabilities A t Assets Cash with RBI and Call Money Investments Advances Fixed Assets Other Assets Total Assets 51 35 3,177 12 9 3,284 97 24 4,077 12 12 4,222 70 31 5,064 13 12 5,190 70 38 6,350 15 12 6,485 FY11 35 283 318 2,966 3,284 FY12 35 350 386 3,837 4,222 FY13E 35 435 471 4,719 5,190

(Rs cr)
FY14E 35 551 586 5,899 6,485

Growth (%) Growth in NII Growth in Net profit Growth in borrowings Growth in advances Growth in investment Source: Company, Axis Capital 25 33 28 29 6 26 32 29 28 -30 17 12 23 27 25 24 22 25 27 25

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Axis Securities Limited *

Regd Office: Axis House, C2, Wadia International Centre, P.B Marg, Worli, Mumbai 400 025, India. Corporate Office: 201-A Laxmi Towers, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051  (+91-22) 6680 3600

Mumbai
201-A Laxmi Towers, , Bandra-Kurla Complex, p , Bandra (E), Mumbai - 400 051  (+91-22) 6680 3600

Axis Securities Limited Branch Details Bangalore

Unit No.10/3, / , Ground Floor, , Empire p Infantry, y, 29 Infantry Road, Bangalore 560 001  (+91-80) 4033 3200 - 212

Baroda
GF 9 Silverline, Sayajiganj, 390 005  (+91-265) 302 6945

Chennai
11 Vijay Delux Apts., 7/4 First CIT Colony, Mylapore, Chennai 600 004  (+91-44) 3918 4228 / 3989 3626

Delhi
Unit No. 815 81 & 816 816, Ambadeep Building, Kasturba Gandhi Marg, New Delhi - 110001  (+91-11) 9818263885

Hyderabad
21 B Maheshwari Chambers 217 C Somajiguda, 500 082  (+91-40) 3065 8501

Indore
320 City Centre, 570, M.G. Road, Indore (M.P.) - 452 001  (+91-0731) 3916601

Kolkata
Om Towers, 4th Floor, 401, 32 Chowringhee Road Kolkata 700 071  ( (+91-33) ) 4005 6201

Pune (Shivajinagar)
1248 A , Goodluck Chowk Gymkhana, Shivajinagar, Pune 411 004  (+91-20) 3054 7125

Rajkot
Toral Building, Office no 308, 3rd Floor, Near Galaxy Hotel, 360001  (+91-281) 3200170

Website: www.axissecurities.in Email: directresearch@enam.com

This document has been prepared by AXIS Securities Ltd * Privileged Client Group. Affiliates of AXIS Securities Ltd * focused on Institutional Equities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating and target price of the Affiliates research report. Th views The i expressed d / recommendations d ti made d in i this thi report t are based b d on Technical T h i l Analysis A l i techniques t h i and d could ld be b at t variance i with ith the th companys / groups views i b d on fundamental based f d t l research. h The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgement by any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions including those involving futures, options and other derivatives as well as non investment grade securities involve substantial risk and are not suitable for all investors. AXIS Securities Se u itie Ltd * has ha not ot independently i depe de tly verified e ified all the information i fo atio given i e in i this thi document. do u e t Accordingly, A o di ly no o representation ep e e tatio or o warranty, a a ty express e p e or o implied, i plied is i made ade as a to the accuracy, a u a y completeness o plete e or o fairness fai e of the information i fo atio and a d opinions opi io contained o tai ed in i this thi document. do u e t The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. AXIS Securities Ltd *, its affiliates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of AXIS Securities Ltd *. The views expressed are those of the analyst and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. Neither this document nor any copy of it may be taken or transmitted into the United State (to U.S. U S Persons), Persons) Canada, Canada or Japan or distributed, distributed directly or indirectly, indirectly in the United States or Canada or distributed or redistributed in Japan or to any resident thereof. thereof This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject AXIS Securities Ltd * to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.

CopyrightinthisdocumentvestsexclusivelywithAXISSecuritiesLtd*. * The name of the company has changed to Axis Securities Limited in the records of Registrar of Companies, Mumbai. Awaiting approval for change of name from Exchanges and SEBI.

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Disclaimer of Axis Capital Limited: The document has been prepared by Axis Securities Limited (formerly Enam Securities Direct Private Limited) (the company). Axis Capital Limited (hereinafter referred to as ACL) has been permitted by the company to use the same and circulate it to its clients. This document is not, and should not be construed, as an offer to sell or solicitation to buy any securities in any jurisdiction. This document may not be reproduced, distributed or published, in whole or in part, without prior permission from the Company. ACL does not guarantee that the document is complete or accurate and it should not be relied on as such. Investors should make his/her own research, analysis and investigation as he/she deems fit and reliable to come at an independent evaluation of an investment (including the merits, demerits and risks involved), and should further take opinion of their own consultants, advisors to determine the advantages and risks of investment. ACL, its affiliates, group companies, directors, employees, agents or representatives shall not be held responsible, liable for any kind of consequential damages whether direct, indirect, special or consequential including but not limited to losses, lost revenue, lost profits, notional losses that may arise from or in connection with the use of the information in the document. Registered office address: Axis House, 8th Floor, Wadia International Center, Pandurang Budhkar Marg, Worli, Mumbai 400 025. SEBI Registration no : NSE (CM)INB 231387235, (FO)INF 231387235, (CDS)INE 231387235,BSE(CM)INB 011387330,(FO)INF011387330, ARN No. 51485 Main/Dealing office: Solaris,C Bldg., 6th floor, Opp. L&T Gate No. 6, Saki Vihar Road, Powai, Mumbai400072, Tel No.18001030808, Compliance Officer Details: Name: Anand Shaha, EMail ID: compliance.officer@axisdirect.in,Tel No: 02240754152.

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