avenue supermartsseptember 13, 2019

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Stock_____

TALES

ICIC

I S

ecurit

ies –

Retail E

quit

y R

esearch

Stock T

ale

s

September 13, 2019

CMP: | 1570 Target: | 1450 (-7%) Target Period: 12-14 months

months

Avenue Supermarts (AVESUP)

REDUCE

Resilient business model; new challenges ahead….

Wafer thin margins and intense competition characterise the food & grocery

business (F&G) wherein several players still continue to struggle. Over the

years, D-Mart, through its proven business model, has been able to maintain

consistent profitability and remains an exceptional performer in its peer

group. Given the robust store operating metrics (breakeven in first year of

its operations and industry best revenue/sq ft: | 36000), D-Mart has

progressively enhanced its return ratios despite being capex intensive

(follows ownership model). The company’s core strategy of following

everyday low cost (EDLC)/everyday low price (EDLP) has led D-Mart to offer

higher discounts compared to other retail players despite industry wide

quantum of discounting intensifying in the last 12-18 months. Furthermore,

in a bid to contest the potential threat from e-commerce players, D-Mart

forayed into the e-commerce space mainly through its D-Mart ‘Ready’ pick

up stores. With the organised F&G market still being underpenetrated (mere

~3% market share), there is enough headroom for long term growth, with

the margin profile likely to be range bound with a positive bias.

Cluster based ownership model - key profitable growth catalyst

D-Mart predominantly operates on an ownership model rather than a lease

model (85-90% owned). It has to incur significant capex at the initial stage

(~4-5x that of leased fit outs) as land, building constitute ~85% of gross

block. However, owning stores protects the company from unreasonable

hikes on renewal of lease agreements that could negatively impact

profitability in the long term. Subsequently, cost benefits that accrue by

having a tight leash on fixed expenses are passed on to consumers in terms

of lower price. D-Mart has been conservative on the store addition front

(added ~21 stores each year in FY14-19) since establishing new owned

store takes ~24-30 months. To shore up the retail space, the company has

strengthened its real estate acquisition team and is also looking at long term

lease options (>9 years). In FY19, D-Mart added 21 stores with square feet

addition of ~1.0 million (translating into average store size of ~48,000 sq ft,

higher than the average of 30,000 sq ft). The strategy to open larger store

bodes well since the company would have enhanced shelf space for high

margin products like general merchandise & apparels.

Competition headwinds, high valuation remain concerns…

Despite performance parameters (return on capital employed of 23%, gross

fixed asset turnover ratio of 4.1x) being superior to industry, we believe its

growth aspirations are likely to face challenges in terms of intensified

competition from new entrants with deep pockets and increased

discounting by incumbent e-com players. We build in revenue CAGR of 27%

driven by new store additions and steady SSSG. However, we expect

margins to remain range bound at 8.2-8.4% in FY19-21E. The stock is trading

at rich valuations of 63.9x FY21 EPS and 36.5x FY21E EV/EBITDA. We have

a REDUCE rating with a target price of | 1450 (34.0x FY21E). EV/EBITDA).

Key Financial Summary

| crore FY18 FY19 FY20E FY21E CAGR (FY19-21E)

Net Sales 15,033.2 20,004.5 25,533.9 32,106.7 26.7%

EBITDA 1,352.8 1,633.3 2,119.3 2,697.0 28.5%

PAT 806.3 902.4 1,191.4 1,532.3 30.3%

P/E (x) 121.5 108.6 82.2 63.9

EV/Sales (x) 6.5 4.9 3.9 3.1

EV/EBITDA (x) 72.3 60.3 46.5 36.5

RoCE (%) 24.7 23.4 25.3 26.9

RoE (%) 17.3 16.2 17.6 18.4

Source: ICICI Direct Research, Company

Particulars

Particulars Amount

Market Capitalisation (| crore) 97,980.6

Total Debt (FY19) (| crore) 700.2

Cash (FY19) (| crore) 219.1

EV (| crore) 98,461.6

52 Week H / L 1696 / 1126

Equity Capital (| crore) 624.1

Face Value (|) 10.0

Price Chart

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Key Highlights

Average store addition to accelerate

from 21 stores in FY14-19 to 30 stores

in FY19-21. Total stores expected to

increase from 184 in Q1FY20 to 236 in

FY21

Total space addition of ~2.7 mn sq ft

expected in FY19-21 taking total

space to 8.6 mn sq ft

Research Analyst

Bharat Chhoda

[email protected]

Cheragh Sidhwa

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research

Stock Tales | Avenue Supermarts

Organised players in F&G retail to garner higher market share

Food and grocery (F&G) constitutes a majority of the retail market,

constituting 67% of share of the retail market. The Indian market is still

dominated by kirana stores and unorganised trade as modern trade

currently constitutes mere 3% of the F&G retail market. With rising income

levels and growing aspirations, the organised F&G market is expected to

grow 2.5x in the next four years, translating into CAGR of 27% in FY17-21.

Share of organised retail is expected double to 6% in FY21.

Exhibit 1: Overall retail sector expected to reach US$1 trillion by FY21

474

728

0

200

400

600

800

1000

1200

FY17 FY21

US

$ b

illion

Food & grocery Apparel Jewellery & watches

Consumer Electronics Home & living others

US$ 710 billion

US$ 1 trillion

Source: Industry, ICICI Direct Research

Exhibit 2: Organised F&G segment to outpace unorganised segment, with share

growing 2x to 6% by FY21E

458

685

16

41

0

100

200

300

400

500

600

700

800

FY17 FY21

US

D B

n

Organised Unorganised

CAGR: 27%

Source: Industry, ICICI Direct Research




Right pricing for value conscious market - ASL’s mantra for

success

Avenue Supermart (ASL) is one of the leading supermarket chains, with a

core focus on value retailing. D-Mart primarily stocks products that form part

of basic spending rather than discretionary spending. The products

specifically cater to the demands of the lower-middle, middle and aspiring

upper-middle income groups (<| 50,000/month salary). On the store

location front, ASL has a strategy of opening stores in suburban areas of

major cities with stores being located closer to residential areas rather than

in shopping malls. It takes the cluster approach, targeting densely-populated

neighbourhoods and residential areas. The products sold are broadly

classified into three categories: food, FMCG and general merchandise &

apparel.

Exhibit 3: ASL revenue breakup - Food category leads pack

Source: Company, ICICI Direct Research

The food category has been the major revenue contributor for D-Mart over

the years with revenue contribution of over 50%+. Despite the category

yielding wafer thin gross margins in the retail industry, the company has

been able to offer highest discounts compared to its peers. The low prices

of the products are a function of stringent cost procurement policy.

D-Mart has successfully established the model by using its everyday low

cost (EDLC)/everyday low price (EDLP) strategy. The strategy involves

offering low prices to consumers on a daily basis as opposed to offering

discounts only on special events or occasion, which is carried on by other

retail players. This is a major catalyst that drives customer loyalty.

Exhibit 4: Number of bills issued grows at astounding 27%

CAGR…


Exhibit 5: …with average bill size improving over the years


53.0 53.0 53.3 52.8 53.1 53.0 52.0 51.0

21.0 21.2 21.5 21.2 20.6 20.0 20.0 21.0

26.0 25.8 25.2 25.9 26.4 27.0 28.0 28.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

%

Food FMCG GM & Apparel

31.80

43.1

53.4

67.2

84.7

109.0

134.0

172.0

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00


in m

illion

695

775

878

9581013

10921122

1163

0

200

400

600

800

1000

1200

1400


|




Sharp product assortment aids superior working capital

management

In a bid to increase its inventory turns, the company focuses on stocking

only limited stock keeping units (SKUs) and popular brands, based on local

preferences. In turn, this translates into enhanced throughput and minimises

the carrying cost of inventory. Bulk buying of specific products results in

economies of scale leading to better price negations from the primary

vendors/manufacturers.

With various retailers focusing on increasing the share of private label

brands, D-Mart has been conservative in launching its own brands in the

FMCG category (D-Mart does not consider self-branded staples or other

home products like utensils as private label brands since it does not do much

value addition). The management believes that building a successful

ecosystem of private label brands requires long term effort (10-20 years) and

committed investment support for nurturing their growth. Also, ASL

believes that brands of major leading FMCG players have a strong brand

recall and stocking products of popular national brands attracts higher

customer footfalls.

Exhibit 6: D-Mart has one of the best inventory turnovers in the industry


On the working capital front, ASL focuses on accelerated inventory

churning, resulting in a better cash conversion cycle. Unlike its peers, the

company focuses on controlled working capital cycle through inventory

turns and not through higher creditor days. D-Mart has displayed a

consistent track record of paying its suppliers and vendors in the shortest

span of time compared to the industry. Subsequently, higher cash discounts

are provided by vendors, which is passed on to consumers by offering

higher discounts to customers.

Exhibit 7: Sustained track record of low payable days

1110

10

7

88

8

8

0

2

4

6

8

10

12


Num

ber o

f d

ays


11

12

12

12

13

13

13

12

10

11

11

12

12

13

13

14


(x)




Cluster based store expansion to sustain

Over the years, ASL has expanded its footprint using a cluster-based

approach mainly covering Maharashtra, Gujarat, Telangana and Andhra

Pradesh. Out of total 176 stores, 60% are located only in two states,

Maharashtra (70 stores) and Gujarat (34 stores), followed by Andhra Pradesh

and Telangana (32 stores).

The company strengthens its existing presence in certain regions by

opening new stores within a radius of a few kilometres of its existing stores

and distribution centres. This has ensured the creation of a cluster of stores

within a region resulting in a better understanding of local needs and

preferences. Higher cost efficiency due to economies of scale are achieved

in the supply chain, inventory management and concentrated brand visibility

due to focused implementation of marketing and advertising initiatives.

Going forward, the management will continue to add 70-80% of new stores

in existing clusters.

The management highlighted that whenever a new store is opened in an

existing locality (3-6 km radius), the rate of acceleration of revenues is

significantly higher than that of an existing store, which was opened five to

10 years back (superior RoIC translates into accelerated payback period).

The company’s store opening has been lower than targeted owing to

regulatory and other headwinds faced by it. ASL follows the ownership

model for its stores. Opening new owned stores (rather than leasing it)

involves several complexities that take ~24-30 months to establish. The

process includes, a) title acquisition (takes two to three months), b) ~12

months for regulatory permissions and licenses and c) nine to 12 months for

constructing the store. Hence, it poses a challenge to shore up the pace of

store additions, especially in new territories.

In a bid to accelerate the store addition pace the company is now also

seeking to avail the option of long term lease (>9 years). The company has

also reinforced its real estate team to shore up the store addition pace.

Exhibit 8: Cluster based approach





Exhibit 9: On average ASL added ~21 stores/year in FY16-19…we expect store

addition pace to pick up and model 30 stores each year in FY20, FY21E

5562

75

89

110

131

155

176

206

236

0

50

100

150

200

250

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21


In FY19, D-Mart added 21 stores with addition of ~1.0 million square feet

(translating into average store size of ~48,000 sq ft, higher than the average

of 30,000 sq ft). The company is now planning to add much larger stores

with sizes ranging from 45000 to 50000 sq ft as D-Mart believes there is

visibility and sizeable opportunity for future growth. The strategy to open

larger stores bodes well for it since the company would have enhanced shelf

space for high margin products such as general merchandise and apparels.

While D-Mart indicated that the store addition pace was unsatisfactory in

FY19 (partly due to a delay in licenses & regulatory permission), the pace

would be much better in FY20-21E (the company added eight stores in

Q1FY20 vs. two stores in Q1FY19). We model 30 stores each year with

addition of ~2.7 million square feet in FY20-21E.

Exhibit 10: Total carpet area has grown at much faster clip…

1.6 1.82.1

2.7

3.3

4.1

4.9

5.9

7.3

8.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


Mn. s

q. ft.


Exhibit 11: …with gradual increase in average store size

28909

28387

28533

29888

30273

30992

31613

33523

35194

36441

0

5000

10000

15000

20000

25000

30000

35000

40000


Sq. ft


D-Mart predominately operated on an ownership

model (85-90% of stores) instead of taking the lease

route. The management believes the leased store

model may generate robust RoI in initial years but

unreasonable hikes on renewal of lease agreements

could negatively impact profitability. Hence, the

company is looking to enter into long term lease




D-Mart Ready….construed as vehicle to compete with e-tailers

To counter the threat of online groceries and capture growth from

customers who prefer the convenience of buying from their home rather

than visiting the stores, Avenue Supermart has launched the ‘D-Mart Ready’

concept. D-Mart Ready is based on the concept of providing the

convenience of pick-up to the customer from a delivery point close to their

home or get paid home delivery without having to wait in long queues at D-

Mart offline stores. Also, D-Mart Ready enables the company to serve

customers in areas where real estate costs are high.

D-Mart Ready currently operates its business in select areas of Mumbai. It

allows customers to order a broad range of grocery and household products

through its mobile app and through the website ‘www.D-Mart.in’.

Customers can either self-pick up their online orders from any designated

D-Mart Ready pick-up points or get them delivered at their doorstep for a

specified delivery charge.

The key aspect is that D-Mart Ready does not provide free delivery to

customers. It charges | 49 or 3% of order value (minimum order value

| 1000), whichever is higher. Also, the distribution cost through the D-Mart

Ready model is lower compared to online retailers due to D-Mart Ready

stores being in close proximity to the main D-Mart stores.

The management believes that technology is the key enabler for success of

the D-Mart Ready model as the engagement with the customer usually runs

on technology. The focus is to get the technology right and gradually expand

in one city. The company does not intend to scale up to a very large number

of cities and is still focusing only on Mumbai.

Over the last year, the company has scaled up the presence of D-Mart Ready

stores from 50 to 196 with an average size of around 200-300 square feet.

On the financial performance front, D-Mart Ready clocked revenues of | 144

crore and a net loss of | 51 crore for FY19. The company is looking at D-

Mart Ready as an option to serve the pin codes where opening D-Mart stores

is not feasible. However, ASL does not expect D-Mart Ready to become a

substantial revenue contributor in the short-term and expects results to

come in over the next five to seven years. The management remains

committed to the concept from a long term perspective.




Financial story in charts….

Exhibit 12: D-Mart has reported staggering CAGR of 34% in FY14-19. We model in

revenue CAGR of 27% in FY19-21E

4686.56439.4

8583.8

11897.7

15033.2

20004.5

25533.9

32106.7

0.0

5000.0

10000.0

15000.0

20000.0

25000.0

30000.0

35000.0

FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E

| crore


Exhibit 13: Expect SSSG to moderate in FY19-21E

26.1

22.421.5 21.2

14.2

17.8

16.215.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0


%


Exhibit 14: Revenue per sq ft trend

0

5000

10000

15000

20000

25000

30000

35000

40000

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E

|/sq. ft.


We expect healthy revenue trajectory to sustain

driven by steady SSSG and pick-up in space addition

pace in FY19-21. While food is expected to dominate

the share of revenue, enhanced average store size

will enable it to stock higher margin general

merchandise and apparel products

We anticipate SSSG will moderate owing to; a)

increase in number of matured stores, b) opening of

new stores near an existing store and c) high base

impact




Exhibit 15: Given intensified competition, there is limited

scope for gross margin expansion….

1280.2

1816.7

2397.6

3003.7

3830.1 4816.0

14.2

14.4

14.6

14.8

15.0

15.2

15.4

15.6

15.8

16.0

16.2

0.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

FY16 FY17 FY18 FY19 FY20E FY21E

%

| crore

Gross profit Gross margins


Exhibit 16: …while positive operating leverage would

improve EBITDA margin to certain extent

663.6

981.3

1352.8

1633.3

2119.3

2697.0

7.7

8.2

9.08.2

8.3

8.4

7

7

7

8

8

8

8

8

9

9

9

9

0

500

1000

1500

2000

2500

3000

FY16 FY17 FY18 FY19 FY20E FY21E

%

| crore

EBITDA EBITDA Margin


Exhibit 17: PAT expected to grow at 30% CAGR in FY19-21E

161.4212.4

320.3

478.8

806.2902.4

1191.4

1532.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

1800.0


Net profit PAT margin


Exhibit 18: Stringent working capital policy. One of the lowest payable days

24.3

20.721.7 21.4 22.1 22.4 23.0

30.6

28.6 29.128.2

29.4 29.4 30.0

6.78.3 8.0 7.7 8.5 8.0 8.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

FY15 FY16 FY17 FY18 FY19 FY20E FY21E

Inventory days Debtor days Payble days Cash Cycle


Rapid inventory turnover (one of the best in the

industry) results in faster payments to its vendor and

suppliers. Hence, unlike peers the company controls

its cash conversion cycle through faster churning of

inventory rather than extending payment terms with

suppliers




Exhibit 19: Despite being capital intensive, D-Mart generates

healthy asset turnover

3.43.5

3.9

4.34.1 4.1 4.1

4.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0


(x)


Exhibit 20: Return ratio to continue uptrend

16.9 17.7

21.1

12.5

17.3 16.2

17.6 18.4

18.8 18.8

21.5

16.5

24.7 23.4

25.3 26.9

-

5.0

10.0

15.0

20.0

25.0

30.0


%

RoE RoCE


Valuations

Despite performance parameters (return on capital employed of 24%, gross

fixed asset turnover ratio of 4.1x) being superior to industry, we believe

ASL’s growth aspirations are likely to face challenges in terms of intensified

competition from new entrants with deep pockets and increased

discounting by incumbent e-com players. We build in revenue CAGR of 27%

driven by new store additions and steady SSSG. However, we expect

margins to remain range bound at 8.2-8.4% in FY19-21E. The stock is trading

at rich valuations of 63.9x FY21 EPS and 36.5x FY21E EV/EBITDA. We

ascribe a REDUCE rating to ASL with a target price of | 1450 (34.0x FY21E

EV/EBITDA).

Exhibit 21: Valuation

Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE

(| cr) (%) (|) (%) (x) (x) (%) (%)

FY17 11,897.7 38.6 7.7 49.5 204.7 99.5 12.5 16.5

FY18 15,033.2 26.4 12.9 68.4 121.5 72.3 17.3 24.7

FY19 20,004.5 33.1 14.5 11.9 108.6 60.3 16.2 23.4

FY20E 25,533.9 27.6 19.1 32.0 82.2 46.5 17.6 25.3

FY21E 32,106.7 25.7 24.6 28.6 63.9 36.5 18.4 26.9





Financial Summary

Exhibit 22: Profit & loss statement

(Year-end March) FY18 FY19 FY20E FY21E

Net Sales 15,033.2 20,004.5 25,533.9 32,106.7

Growth (%) 26.4 33.1 27.6 25.7

Total Raw Material Cost 12,635.6 17,000.8 21,703.8 27,290.7

Gross Margins (%) 15.9 15.0 15.0 15.0

Employee Expenses 282.6 355.4 434.1 529.8

Other Expenses 762.2 1,015.0 1,276.7 1,589.3

Total Operating Expenditure 13,680.4 18,371.3 23,414.6 29,409.7

EBITDA 1,352.8 1,633.3 2,119.3 2,697.0

EBITDA Margin 9.0 8.2 8.3 8.4

Interest 59.5 47.2 56.0 52.0

Depreciation 159.0 212.5 275.3 332.5

Other Income 69.3 48.4 45.0 45.0

Exceptional Expense (18.5) - - -

PBT 1,222.1 1,421.9 1,833.0 2,357.4

Total Tax 415.8 519.5 641.5 825.1

Profit After Tax 806.3 902.4 1,191.4 1,532.3


Exhibit 23: Cash flow statement


Profit/(Loss) after taxation 806.3 902.4 1,191.4 1,532.3

Add: Depreciation 159.0 212.5 275.3 332.5

Net Increase in Current Assets -291.1 -520.0 -479.7 -630.2

Net Increase in Current Liabilities 62.1 160.0 96.7 144.3

CF from operating activities 736.3 755.0 1,083.7 1,379.0

(Inc)/dec in Investments -31.5 49.9 0.0 0.0

(Inc)/dec in Fixed Assets -986.4 -1,440.9 -1,123.2 -1,300.0

Others 0.0 0.0 0.0 0.0

CF from investing activities -1,017.9 -1,391.0 -1,123.2 -1,300.0

Inc / (Dec) in Equity Capital 0.0 0.0 0.0 0.0

Inc / (Dec) in Loan -1,058.1 260.9 -0.1 -50.0

Others 15.6 34.0 0.0 0.0

CF from financing activities -1,042.4 294.9 -0.1 -50.0

Net Cash flow -1,324.1 -341.1 -39.6 29.0

Opening Cash 1,884.3 560.2 219.1 179.5

Closing Cash 560.2 219.1 179.5 208.5


Exhibit 24: Balance Sheet


Equity Capital 624.1 624.1 624.1 624.1

Reserve and Surplus 4,045.0 4,963.4 6,154.8 7,687.1

Total Shareholders funds 4,669.1 5,587.5 6,778.9 8,311.2

Total Debt 439.3 700.2 700.0 650.0

Non Current Liabilties 46.6 64.6 64.6 64.6

Source of Funds 5,154.9 6,352.2 7,543.5 9,025.8

Gross block 3,661.1 4,857.6 6,257.6 7,557.6

Less: Accum depreciation 385.1 583.5 858.9 1,191.4

Net Fixed Assets 3,276.0 4,274.0 5,398.7 6,366.2

Capital WIP 147.1 376.8 100.0 100.0

Intangible assets 107.6 108.2 108.2 108.2

Investments 84.5 34.6 34.6 34.6

Inventory 1,163.5 1,608.7 2,056.7 2,638.9

Cash 560.2 219.1 179.5 208.5

Debtors 33.5 64.4 70.0 88.0

Loans & Advances & Other CA 146.9 174.0 200.0 229.9

Total Current Assets 1,904.0 2,066.1 2,506.2 3,165.3

Creditors 317.3 463.3 559.6 703.7

Provisions & Other CL 176.2 190.2 190.5 190.8

Total Current Liabilities 493.5 653.5 750.1 894.5

Net Current Assets 1,410.6 1,412.6 1,756.0 2,270.8

LT L& A, Other Assets 129.1 145.9 145.9 145.9

Other Assets 0.0 0.0 0.0 0.0

Application of Funds 5,154.9 6,352.2 7,543.5 9,025.8


Exhibit 25: Key ratios


Per share data (|)

EPS 12.9 14.5 19.1 24.6

Cash EPS 15.5 17.9 23.5 29.9

BV 74.8 89.5 108.6 133.2

Cash Per Share 9.0 3.5 2.9 3.3

Operating Ratios (%)

EBITDA margins 9.0 8.2 8.3 8.4

PBT margins 8.1 7.1 7.2 7.3

Net Profit margins 5.4 4.5 4.7 4.8

Inventory days 28.2 29.4 29.4 30.0

Debtor days 0.8 1.2 1.0 1.0

Creditor days 7.7 8.5 8.0 8.0

Return Ratios (%)

RoE 17.3 16.2 17.6 18.4

RoCE 24.7 23.4 25.3 26.9

Valuation Ratios (x)

P/E 121.5 108.6 82.2 63.9

EV / EBITDA 72.3 60.3 46.5 36.5

EV / Sales 6.5 4.9 3.9 3.1

Market Cap / Revenues 6.5 4.9 3.8 3.1

Price to Book Value 21.0 17.5 14.5 11.8

Solvency Ratios

Debt / Equity 0.1 0.1 0.1 0.1

Debt/EBITDA 0.3 0.4 0.3 0.2

Current Ratio 2.7 2.8 3.1 3.3

Quick Ratio 0.4 0.4 0.4 0.4





RATING RATIONALE

ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its

stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,

Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as

the analysts' valuation for a stock

Buy: >15%

Hold: -5% to 15%;

Reduce: -15% to -5%;

Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]




ANALYST CERTIFICATION

I/We, Bharat Chhoda, MBA; Cheragh Sidhwa MBA , Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the

subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned

Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report

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with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the

securities or derivatives of any companies that the analysts cover.

Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as

such, may not match with the recommendation in fundamental reports. Investors may visit icicidirect.com to view the Fundamental and Technical Research Reports.

Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

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Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in

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