1 P a g e. Report By: Surbhi Bagaria Page 1

Transcription

1 1 P a g e Report By: Surbhi Bagaria surbhi@dynamiclevels.com Page 1

2 Praj Industries Ltd- Integrating Transformation Praj Industries Ltd 3 Business Lines 4 Subsidiaries 5 Praj Around the world 6 Emerging Business 7 Company Financials 8 Shareholding Pattern 12 Industry Outlook 13 Key Developments 14 Praj Valuation & Investment Rationale 16 Page 2

3 CMP Rs Target: 97 FY16P/E: Praj Industries Ltd. Praj is a global process solutions company driven by innovation and integration capabilities, offers solutions to add significant value to bioethanol facilities, brewery plants, water & wastewater treatment systems, critical process equipment & systems, HiPurity solutions and bio-products. Over the past 3 decades, Praj has focused on environment, energy and agri process led applications. Praj has been a trusted partner for process engineering, plant & critical equipment and systems with over 600 references across five continents. Solutions offered by Praj are backed by its state of the art R&D Centre called Matrix. Dynamic Levels is positive on the prospects on Praj as: The consolidated order backlog as on March 31, 2016 stood at Rs. 960 crore which comprised of 40% international orders. Ethanol blending in India reached 3.2% in the year OMCs have finalized contracts to procure 1.3 bn liter (equivalent to 5%) for the first time since the mandate is in place. Lok Sabha has passed the Industries (Development and Regulation) Amendment Bill, which transfers the control of beverage and industrial alcohol to the states; whereas fuel ethanol will be a central government subject. This is a positive movement for ethanol blending program. Praj commissioned a 200 m 3 /day multi-product plant based on the novel Ecosmart technology in Poland. It is capable of reducing water and steam consumption by upto 40%. Water and waste water treatment group recently commissioned zero liquid discharge ETP for a yarn manufacturing facility of one of the largest textile companies in Central India. Praj Share Price Performance PRAJ EXCHANGE SYMBOL INDUSTRIES Current Price * (Rs.) Face Value (Rs.) 2 52 Week High (Rs.) Week Low (Rs.) Life Time high (Rs.) Life Time low (Rs.) 0.15 ADM 4.39 Average Volume Month Return (%) P/E Ratio (x) Book Value Market Cap (Cr) % of Promoter holding pledged 0 COMPANY PROFILE OF PRAJ Date of Incorporation Date of Listing 08-Nov May-1995 Management Name Designation Pramod Chaudhari Executive Chairman Gajanan Nabar MD & CEO Berjis Desai Non ED Daljit Mirchandani Non ED Sivaramakrishnan S Iyer Non ED Parimal Chaudhari Non ED Kishor Chaukar Non ED Prakash Kulkarni Non ED Rajiv Maliwal Non ED Registered Office Address "Praj Tower", S.No. 274 & 275/2, Bhumkar Chowk-Hinjewadi Road,Hinjewadi,411057,Pune,India Website Page 3

4 Business Lines: What started off as an entrepreneurial venture 3 decades ago is considered to be India s most successful biofuels Company, taking biobased technologies from India to the World. Today, Praj offers innovative solutions for beverage alcohol and bioethanol plant, brewery, water & wastewater treatment plant, critical process equipment and systems and bioproducts. A globally leading Company with presence in more than 60 countries across 5 continents, Praj has acquired an international repute for responsible and reliable solutions. The business verticals of Praj are defined along 5 blocks: Ethanol & Brewery Plants: Praj enjoys an unique position in the world of ethanol technology by virtue of its expertise which cuts across a variety of sugar to starch based feedstocks. Praj provides holistic solutions for various grades of ethanol (beverage, fuel, industrial, pharma and perfumery) and brewery plants encompassing range of technologies and systems for water & wastewater management. Water & Wastewater Treatment Plants: Praj offers integrated water & wastewater treatment systems and has already made a beginning in the industrial sector with a wide range of solutions. This vertical addresses industrial applications for high quality water, complex effluent treatment including recycle, reuse and zero liquid discharge plants. Critical Process Equipment System: This vertical serves a wider sectoral requirement for high end equipment & systems finding application in the oil & gas, petrochemical, fertilizer, chemicals industry. India is emerging as a sourcing hub for engineered products, especially those which have a level of criticality in terms of material of construction, complexity of fabrication and standards & codes to be followed. Praj has demonstrated capabilities wherein it supplies critical process equipment & systems to a number of domestic and global players. Page 4

5 High Purity Systems: Addressing the pharmaceutical, biotech and F & B sector, Praj acquired Neela Systems (now Praj Hipurity Systems), a Company engaged in providing hi purity water and hygienic systems to the pharma industry. Praj plans to extend its footprints in the hygienic engineering and systems business. It has the capability of providing end-to-end solutions for the pharma, biotech, food & beverage sector. This will be an area of special focus where Praj will deploy combined experience of Neela and Praj BioProducts: Praj recently announced its entry into the biotech products business with launch of its livestock feed health & nutrition business. Other than this, Praj is also working with biochemicals and human health & nutrition products which are presently in different stages of development. The backbone of Praj s technology development is Praj Matrix, the Innovation Center. Praj Matrix is working on bioethanol and biochemicals processes. Subsidiaries: Page 5

6 Praj Around the world: Praj has been a trusted partner to customers around the world since the last 3 decades for innovative, sustainable solutions in ethanol, brewery and Water & Wastewater Treatment Systems, process equipment and bio-products like distillery bio-consumables. South America: Colombia: Partners in fuel ethanol program Colombia's fuel ethanol program was launched in 2002 when the government passed a law mandating use of fuel ethanol in gasoline. Praj is very proud to be associated with the fuel ethanol programme of Colombia by way of installing ethanol production plants. These plants serve as a benchmark in the entire South American continent. PRAJ serves as a benchmark in the entire South American continent Europe: Largest Bioethanol plant commissioned in UK Praj has completed a decade in Europe with more than 20 references. Praj has commissioned the 2nd largest bioethanol plant in UK for Vivergo Fuels which has a capacity of 420 million litres per annum. Since 2006, an increasing share of bioethanol is used in gasoline in EU. Praj works with marquee customers within EU. Praj has supplied technology and proprietary equipment to fuel and beverage ethanol plants in UK, Poland, Belgium, Hungary, Germany, Bulgaria, etc South East Asia: Glorious 20 years and many more to come South East Asia has served as a beachhead for Praj in the international market. Praj entered the South east Asian market in 1992 and the 1st plant of 120 Kilo Litres per day was commissioned in 1994 at Lawang, Indonesia. Since then Praj has installed more than 40 plants, holding a market share of more than 60%. Praj has supplied plants in Thailand, Indonesia, Philippines, Australia, Cambodia, Vietnam and Japan. The predominant feedstock for bioethanol in SEA is Cassava, Cane Molasses & Cane juice. Thailand has implemented its biofuels program successfully and phased out premium gasoline with gasohol. Philippines has mandated 10% ethanol blending, while Australia has a 2% mandate for blending. Japan imports ethanol for production of ETBE. Vietnam has also installed facilities for blending. Africa: Africa Is Regarded As One Of The World s Latest In Emerging Economies Praj Has Been a Part Of This Upbeat Economy For More Than a Decade. With its Plants in Ethiopia, Kenya, Tanzania, Nigeria, Zimbabwe, Sierra Leone, Swaziland, Mozambique, Malawi, South Africa, Praj Enjoys a Sizable Share Of The Production Plants In Africa. Praj Takes Great Pride To Be Associated With Clients Like Illovo- The Largest Ethanol Producer In South Africa, Addax, Royal Swaziland Sugar Corporation, Agro Chemical And Food Company, Etc. Page 6

7 Emerging Business: Critical Process Equipment: Critical process Equipment and Systems (CPES) business leverages Praj's Process Engineering and Manufacturing Capabilities. Since then, Praj has committed dedicated resources in terms of engineering and manufacturing facilities at 3 locations for fabrication of high thick materials like carbon steel other higher alloys along with stainless steel & cladded equipment. All the facilities are ISO 9001: 2008, ASME- U/ U2 and CE Marking certified. Facilities also have IBR, CCOE, NB, ISO and OHSAS certifications. Praj provides critical process equipment & systems to various sectors like chemical, oil & gas, petrochemical, fertilizer, pharma & biotech, food & beverage etc to clients globally. Praj follows international design codes like ASME Section VIII Div 1 & Div 2, PED, TEMA, BS 5500, API 650 and AD-Merkblatter. It also supplies in accordance with country specific requirements like IBR, DOSH, GOST (TR), MOM, UkrSEPRO, AS etc. Praj has served clients in India, Singapore, Malaysia, Germany, Russia, Ukraine, Fiji, Oman, Saudi Arabia and Italy. Praj has successfully worked with various esteemed EPC partners like LINDE, Uhde, Saipem, Toyo Engineering, SNC Lavalin, Aker Solutions, Jacobs, Fluor, Lurgi etc. Some of its valued customers globally are GE Oil & Gas, Bayer, Lanxess, BASF, DOW, SRF, Lupin, Biocon(Malaysia), Cargill etc. Praj has served clients in India, Singapore, Malaysia, Germany, Russia, Ukraine, Fiji, Oman, Saudi Arabia, and Italy. Some of its valued customers globally are GE Oil & Gas, Bayer, Lanxess, BASF, DOW, SRF, Lupin, Biocon (Malaysia), Cargill etc. Water and Wastewater Treatment Solutions Water and waste water treatment business has its origin in Praj's understanding of challenging distillery effluent. This business line rests on the three pillars of - Quality of water Complexity of Effluent Reduce, Recycle, Reuse and ZLD CETP at Thirupur textile belt is a noteworthy example. The industries Praj serves are - textiles, pharmaceuticals, food and beverages, power. Some of our valued customers are Lucky Spinning (Thailand), Torrent Pharma and many more. Page 7

8 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Company Financials: Income Statement (in Cr) FY 2015 FY 2016 % Growth Net Sales/Income from 1, , % operations Other Operating Income Total Income From Operations 1, , % Increase/Decrease in Stocks Consumption of Raw Materials % Employees Cost % Depreciation Other Expenses Total Expenditure % Operating Profit % Other Income % P/L Before Int., Excpt. Items & Tax Interest % P/L Before Exceptional Items & Tax P/L Before Tax Tax P/L After Tax from Ordinary Activities PAT 78.23* % Minority Interest Net Profit/(Loss) For the Period % Prior Year Adjustments Equity Share Capital Reserves % EPS (Rs.) % Income Statement Analysis: 1. In FY 16 the Praj maintained its topline at par compared to last year but reduced the expenditure by 1.84% inspite of increase in Employee cost 2. Other Income increased by 40% 3. FY15 PAT includes Rs 11.9 crore (pre-tax) capital gain on sale of office building at Bavdhan, Pune and write back of Rs crore towards excess provision for tax 4. Reserves of the company have gone up by 6.62%. 5. PAT down by 11.2% Note all figures on consolidated basis, i.e. Praj Industries India, its local execution companies and subsidiaries. WACC FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Equity Cost of Equity 11.5% 10.7% 11.6% 10.6% 11.8% Weight of 98.5% 97.9% 97.8% 98.5% 99.0% Equity Debt Cost of Debt 6.6% 8.3% 8.6% 9.8% 7.5% Weight of 1.5% 2.1% 2.2% 1.5% 1.0% Debt WACC 11.4% 10.7% 11.5% 10.6% 11.7% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% -- Cost of Equity Weight of Equity Cost of Debt Weight of Debt Page 8

9 Balance Sheet (In Mn) FY 2014 FY 2015 FY 2016 ASSETS Cash And Equivalents Short Term Investments 1, , ,159.5 Total Cash & ST Investments 1, , ,978.0 Accounts & Notes Receivable 3, , ,671.0 Total Receivables 3, , ,671.0 Inventories 1, ,822.0 Prepaid Exp , Restricted Cash Other Current Assets 2, , Total Current Assets 9, , ,165.1 Net Property, Plant & Equipment 2, , ,231.8 Long-term Investments Deferred Charges, LT Other Long-Term Assets Total Assets 12, , ,616.1 LIABILITIES Short-term Borrowings Accounts Payable 1, , ,071.5 Curr. Income Taxes Payable 1, Other Current Liabilities 2, , ,640.3 Total Current Liabilities 6, , ,870.9 Long-Term Debt Other Non-Current Liabilities Total Liabilities 6, , ,002.3 Minority Interest Additional Paid In Capital Comprehensive Inc. and Other 4, , ,255.1 Total Common Equity 6, , ,613.8 Total Equity 6, , ,613.8 Total Liabilities And Equity 12, , ,616.1 Book Value/Share Balance Sheet Analysis Company s long term investment has increased from 100 Mn to 293 Mn in 2 years. Praj has reduced its short term borrowings Praj has reduced its long term debt by 430% from 2 to 1.2 Mn Book value has increased from by 10% from 35.1 to 37.2 per share Total liabilities is decreasing YoY from 6718 in FY14 to 5002 in FY16 Page 9

10 Cash Flow ( In Mn) FY 2013 FY 2014 FY 2015 Net Profit/Loss Before Extraordinary Items And Tax Net CashFlow From Operating Activities Net Cash Used In Investing Activities Net Cash Used From Financing Activities Foreign Exchange Gains / Losses Net Inc/Dec In Cash And Cash Equivalents Cash And Cash Equivalents Begin of Year Cash And Cash Equivalents End Of Year Capital Structure FY 2014 FY 2015 FY 2016 Millions % of Total Millions % of Millions % of Total Total Market Cap 9, % 11, % 15, % ST Borrowings % % % LT Borrowings % % % Pref Equity % % % Total Capital 9, % 11, % 16, % Key Financials FY 2014 FY 2015 FY 2016 Total Revenue 9, , ,141.3 Growth Over Prior Year 7.3% 2.6% 0.2% EBITDA ,098.6 Margin % 8.7% 8.3% 10.8% EBIT Margin % 6.3% 4.6% 7.4% Net Income Margin % 5.5% 7.5% 6.8% Diluted EPS Excl. Extra Items Growth Over Prior Year (19.6%) 39.3% (9.6%) Page 10

11 Profitability Ratios FY 2014 FY 2015 FY 2016 Return on Assets 4.3% 6.1% 5.8% Return on Capital 9.3% 12.6% 10.6% Return on Equity 9.5% 12.7% 10.8% Margin Analysis EBITDA Margin 8.7% 8.3% 10.8% EBIT Margin 6.3% 4.6% 7.4% Earnings from Cont. Ops 6.3% 4.6% 7.4% Margin Net Income Margin 5.5% 7.5% 6.8% Normalized Net Income 5.5% 7.5% 6.8% Margin Free Cash Flow Margin -4.7% 13.9% -- Asset Turnover Total Asset Turnover 0.8x 0.8x 0.9x Fixed Asset Turnover 3.8x 4.0x 4.4x Accounts Receivable Turnover Short Term Liquidity 3.1x 3.4x 3.1x Current Ratio 1.4x 1.6x 1.7x Quick Ratio 0.7x 0.9x 1.2x Cash from Ops. To Curr 0.2x 0.4x 0.4x Liab Avg. Days Sales Out x 108.4x 116.9x Long Term Solvency Total Debt/Equity 3.5% 2.7% 2.4% Total Debt/Capital 3.4% 2.6% 2.4% LT Debt/Equity 0.0% 0.0% 0.0% LT Debt/Capital 0.0% 0.0% 0.0% Total Liabilities/Total 1.5% 1.1% 1.1% Assets EBIT / Interest Exp x 18.88x 57.56x EBITDA / Interest Exp x 34.21x 83.86x Total Debt/EBITDA 0.25x 0.20x 0.15x Net Debt/EBITDA -1.41x -2.72x -1.65x Ratio Analysis: Profitability ratios indicate that Praj Returns have improved YoY, indicating that the management is efficiently using its assets to generate earnings and Praj is able to generate good return with the money shareholders have invested EBITDA margins have improved which is an indication the revenue that is left with the Company after it has deducted all the expenses has increased YoY. Asset Turnover ratio indicates that Co is efficiently deploying its assets to generate the revenue. Co s Short term liquidity has improved but it is not able to meet the industry standards of minimum 2, which signifies that the Company might have liquidity problems in paying its short term debt on time. Praj has high Debt which has decreased YoY, it is a positive sign as it is reducing its debt Page 11

12 Shareholding Pattern Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15 Mar-15 Promoter and Promoter Group (%) Indian Foreign NIL NIL NIL NIL NIL Institutions (%) FII DII NonInstitutions (%) Bodies Corporate NIL NIL Others Custodians NIL NIL NIL NIL NIL Total no. of shares (cr.) FII s have increased their stake in FY16 from 0.72 to 6.21 but DII has decreased from to Persons holding securities more than 1% of Category Mar-16 Dec-15 Sep-15 Jun-15 Mar-15 total number of shares under category Public Shareholding. Parimal Chaudhari Promoters Pramod Chaudhari Promoters Bodies Corporate NonPromoters NIL NIL NIL Canara Robeco Mutual Fund A/c Canara NonPromoters NIL NIL NIL Robeco Emerging Equities Foreign Individuals or NRI NonPromoters 2.75 NIL NIL NIL NIL Government Pension Fund Global NonPromoters NIL NIL Hdfc Trustee Company Limited-Hdfc Equity NonPromoters Fund IDFC Infrastructure Fund NonPromoters NIL NIL 1.01 NIL NIL Lic Of India Market Plus 1 Growth Fund NonPromoters Sundaram Mutual Fund A/C Sundaram NonPromoters NIL Smile Fund Tata Capital Financial Services Ltd NonPromoters NIL Vinod Khosla NonPromoters Promoters of PRAJ have kept their investment constant throughout the year Page 12

13 Industry outlook: Inflow of foreign investments Cumulative FDI inflows increased to US$ 26.3 billion in FY16* from US$ 8.9 billion in FY10. The government s increasing focus on attracting foreign investors in manufacturing and infrastructure is likely to boost FDI in the sector. FDI inflows includes Automobile industry, Electrical equipment, Miscellaneous mechanical and engineering industry, Industrial machinery, Machine tools, Agriculture machinery, Earth-moving machinery and Industrial instrument Key categories of exports Government Initiative The Indian engineering sector is of strategic importance to the economy owing to its intense integration with other industry segments. The sector has been de-licensed and enjoys 100 per cent FDI. With the aim to boost the manufacturing sector, the government has relaxed the excise duties on factory gate tax, capital goods, consumer durables and vehicles. It has also reduced the basic customs duty from 10 per cent to 5 per cent on forged steel rings. Transport equipment (which includes Auto & auto component including Aircraft and ship boats) is the leading contributor to engineering exports accountingfor 34.5 per cent of the total engineering exports in FY 15. Iron & Steel and products made of Iron & Steel have accounted around 22.9 per cent market share while industrial machinery including electrical machinery accounted 21.9 per cent of the total engineering exports in FY15. Others commodities includes Medical and Scientific instruments, Hand tools & Cutting tools, Bicycle parts, Office equipments, Prime Mica & Mica Products etc. accounted 8.7 per cent of the total engineering exports in FY15. Market size The capital goods & engineering turnover in India is expected to reach US$ billion by FY17. Engineering exports from India in FY stood at US$ 70.7 billion registering a growth of 14.6 per cent over the previous fiscal, as demand in key markets such as the US and the UAE is on the rise. Apart from these traditional markets, markets in Eastern and Central European countries such as Poland also hold huge promise. India exports its engineering goods mostly to the US and Europe, which accounts for over 60 per cent of the total exports. Recently, India's engineering exports to Japan and South Korea have also increased with shipments to these two countries rising by 16 and 60 per cent respectively. Page 13

14 Key Development Stable performance in the midst of volatile macro-economic external environment and sombre international markets a result of transformation efforts Key imperative lies in leveraging established core businesses across geographies and scaling up emerging businesses Rigor in operational excellence reflected in operating profit. Ethanol business Positive ecosystem in creation in India Ethanol blending reaches 3.2% in India in the year OMCs have finalized contracts for 1.3 bn liter ethanol for the coming year (equivalent to 5% blending) - first time since the mandate is in place Lok Sabha passes the Industries (Development and Regulation) Amendment Bill - fuel ethanol becomes a central government subject, facilitates inter-state transport of fuel ethanol Prohibition of beverage alcohol in Bihar OMCs asked to maximize fuel ethanol procurement from Bihar, will compensate for reduction in ethanol production from drought affected states Global ethanol markets developments Argentina increases blending mandate from 10 to 12%, plans to go for 20% by 2019 and eventually to 26%, will need 1.75 bn liter additional capacity Queensland, Australia passes bill for 3% blending Thailand exploring cassava feedstock to combat drought situation, with 20% blending, ethanol requirement will increase from the current 3.5 mn daily Mexico working on blending program Brewery business Consolidation among global brewers, structural changes in the market place, more brown-field capacity build-outs Division of Andhra Pradesh and Telangana creates opportunities for green-field capacities in Andhra due to separate tax and excise regime of the two states Internationalization program being pursued in select geographies Page 14

15 Praj HiPurity Systems Government set to propel pharma industry to the next level of innovation positive for Praj Hipurity Indian pharma industry gearing up for biosimilars Internationalization of PHS on track Critical process equipment & systems India set to move to Bharat VI, Indian refineries to invest of Rs 40,000 crore Petrobras order continues to be dormant, update after a quarter (Q2 FY 17) Commissioning of ethanol plant based on Ecosmart technology in Europe 200 m3/day ethanol plant in Poland Upto 40% energy and water reduction Water and waste water treatment team commissions multiple effect evaporation and ATFD based zero liquid discharge ETP for yarn manufacturing facility of one of the largest textile companies in India Page 15

16 Praj Valuations & Investment Rationale An improving trend visible over the last few years due to Internationalization of Brewery and Emerging Businesses, particularly HiPurity Systems and Environment Business of Water & Wastewater Treatment Systems; Harnessing the existing base of Ethanol/Alcohol Plants through modernization and retrofit solutions; Enhancing the wallet share of HiPurity Systems business and adding value added services across businesses for recurring revenue. Effort is on-going to maximize value through intake of better quality orders; following more stringent commercial and financial discipline; incorporate excellence in all aspects of project/services delivery to enhance customer value. Recently, Praj acquired 20% stake for INR350mn in Praj HiPurity Systems and made it a wholly owned subsidiary. Praj has diversified its revenue base over the past four five years and entered new zones like critical process. equipment, waste water, Neela. Led by global references and ethanol blending mandates in key export regions like US, Brazil, Columbia, Peru, Thailand, Malaysia etc, Praj has strong presence in the global ethanol market. Its brewery business recently bagged 2 large projects overseas. It has been able to reduce project cost YoY Praj has been catering to needs of industries like textile and tannery that have been served notices to pursue technology intensive, value accretive business. The company is eyeing tie ups with EPC projects for industrial waste water orders. Management expects strong traction in ethanol equipment ordering from Argentina, Columbia, Peru, etc., led by higher mandates in respective countries. Around 15% of global ethanol market globally is non fuel based which is prime market for PRAJ. Management expects investments in gas and downstream processing to continue inspite of oil sector facing challenges in terms of low crude prices. We initiate coverage on Praj Industries Ltd as a with a target of Rs 97 representing a potential upside of 20% from the buy price Praj is trading at a PE of 27. We are positive on the company prospects as Praj expects to improve its order book and improve its EBITDA margins in the years to come. It also expects Internationalization of Brewery and Emerging Businesses, significant growth in MPS (model process business) in pharmaceutical and biotech and this is on the back of biosimilars. Also exports of Praj HiPurity business which is again focused on pharmaceuticals and biotech, is seeing growth potential. So, there are couple of businesses in which Praj expects growth in future. Page 16

17 Disclaimer: Research Disclaimer and Disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, Dynamic Equities Pvt. Ltd. is a member of National Stock Exchange of India Ltd. (NSEIL), Bombay Stock Exchange Ltd (BSE), Multi Stock Exchange of India Ltd (MCX- SX) and also a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd.(CDSL). Dynamic is engaged in the business of Stock Broking, Depository Services, Investment Advisory Services and Portfolio Management Services. Dynamic Equities Pvt. Ltd. is holding company of Dynamic Commodities Pvt. Ltd., a member of Multi Commodities Exchange (MCX) & National Commodity & Derivatives Exchange Ltd.(NCDEX). We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on for certain operational deviations. Answers to the Best of the knowledge and belief of Dynamic/ its Associates/ Research Analyst who prepared this report DYANMIC/its Associates/ Research Analyst/ his Relative have any financial interest in the subject company? No DYANMIC/its Associates/ Research Analyst/ his Relative have actual/beneficial ownership of one per cent or more securities of the subject company? No DYANMIC/its Associates/ Research Analyst/ his Relative have any other material conflict of interest at the time of publication of the research report or at the time of public appearance? No DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation from the subject company in the past twelve months? No DYANMIC/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 DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation or other benefits from the Subject Company or third party in connection with the research report? No DYANMIC/its Associates/ Research Analyst/ his Relative have served as an officer, director or employee of the subject company? No DYANMIC/its Associates/ Research Analyst/ his Relative have been engaged in market making activity for the subject company? No General Disclaimer: - This Research Report (hereinafter called Report ) is meant solely for use by the recipient and is not for circulation. This Report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. The recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or construed to be neither advice for the purpose of purchase or sale of any security, derivatives or any other security through Dynamic nor any solicitation or offering of any investment /trading opportunity on behalf of the issuer(s) of the respective security (ies) referred to herein. These information / opinions / views are not meant to serve as a professional investment guide for the readers. No action is solicited based upon the information provided herein. Recipients of this Report should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed trading/investment decision before executing any trades or making any investments. This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by Dynamic to be reliable. Dynamic or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of Dynamic shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including loss profits arising in any way whatsoever from the information / opinions / views contained in this Report. The price and value of the investments referred to in this Report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Dynamic levels do not provide tax advice to its clients, and all investors are strongly advised to consult with their tax advisers regarding taxation aspects of any potential investment. Opinions expressed are our current opinions as of the date appearing on this Research only. We do not undertake to advise you as to any change of our views expressed in this Report. User should keep this risk in mind and not hold dynamic levels, its employees and associates responsible for any losses, damages of any type whatsoever. Dynamic and its associates or employees may; (a) from time to time, have long or short positions in, and buy or sell the investments in/ security of company (ies) mentioned herein and it may not be construed as potential conflict of interest with respect to any recommendation and related information and opinions. Without limiting any of the foregoing, in no event shall Dynamic and its associates or employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind. We and our affiliates/associates, officers, directors, and employees, Research Analyst(including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company/company (ies) discussed herein or act as advisor to such company (ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of Research Report. Dynamic may have proprietary long/short position in the above mentioned scrip(s) and therefore may be considered as interested. The views provided herein are general in nature and does not consider risk appetite or investment objective of particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business with Dynamic. Dynamic Equities Pvt. Ltd. are also engaged in Proprietary Trading apart from Client Business. Page 17