- Cholamandalam Investment & Finance Company's (CIFC) vehicle finance segment performed strongly in the quarter with rising disbursements, asset under management, and declining non-performing assets. However, the home equity business saw lower net interest margins, rising non-performing loans, and declining return on assets.
- Overall, CIFC saw higher disbursements and asset under management growth but earnings were below estimates due to a sharp drop in net interest margins, especially in the home equity segment. Asset quality improved in the vehicle finance business but deteriorated in home equity.
- Cholamandalam Investment & Finance Company's (CIFC) vehicle finance segment performed strongly in the quarter with rising disbursements, asset under management, and declining non-performing assets. However, the home equity business saw lower net interest margins, rising non-performing loans, and declining return on assets.
- Overall, CIFC saw higher disbursements and asset under management growth but earnings were below estimates due to a sharp drop in net interest margins, especially in the home equity segment. Asset quality improved in the vehicle finance business but deteriorated in home equity.
- Cholamandalam Investment & Finance Company's (CIFC) vehicle finance segment performed strongly in the quarter with rising disbursements, asset under management, and declining non-performing assets. However, the home equity business saw lower net interest margins, rising non-performing loans, and declining return on assets.
- Overall, CIFC saw higher disbursements and asset under management growth but earnings were below estimates due to a sharp drop in net interest margins, especially in the home equity segment. Asset quality improved in the vehicle finance business but deteriorated in home equity.
- Cholamandalam Investment & Finance Company's (CIFC) vehicle finance segment performed strongly in the quarter with rising disbursements, asset under management, and declining non-performing assets. However, the home equity business saw lower net interest margins, rising non-performing loans, and declining return on assets.
- Overall, CIFC saw higher disbursements and asset under management growth but earnings were below estimates due to a sharp drop in net interest margins, especially in the home equity segment. Asset quality improved in the vehicle finance business but deteriorated in home equity.
Momentum building up CIFCs 1Q earnings were a mixed bag. Its Vehicle Finance (VF) segment continues to deliver strong performance across parameters - disbursements (+29%), AUM (+17%), GNPAs (-3% QoQ, despite a seasonally weak quarter) and pre-tax RoA of 3.1% (highest in 12 quarters). However, the Home Equity (HE) business saw stress with drop in NIM (-60bps QoQ), rise in NPL (15% QoQ) and pre-tax RoA of 2.6% (-60bps QoQ, lowest in 20 qtrs) though disbursals (+19%) and book growth (+20%) remained steady. At 4.1xFY18E, CIFC trades at premium valuations vs. peers. However, we continue to remain positive on CIFC given its well-diversified geographic mix, balance between cyclical VF business and steady HE business. The recent rating upgrade, favourable interest rate regime and improving leverage will continue to drive ROAAs to 2.6% by FY19E. Further provisions (avg. 1.02%) assumptions provide upside risk to the RoAA improvement. Maintain BUY with a revised TP of Rs 1,208 (3.5x Mar-19E ABV of Rs 345).
Highlights of the quarter
Strong disbursals (+30% YoY) were led by 29% rise
in VF segment and ~19% in the HE business. With
sequentially lower repayments, AUM grew ~18% YoY (eight quarter high). With strong presence across geographies, segments and a widespread network, we expect AUM CAGR of 22%.
Calc. NIMs (7.3%) were sequentially impacted due
to income reversals (Rs 300mn on the securitised book) and lower recoveries. The recent rating upgrade, higher proportion of bank borrowings and ~67% AUM at fixed rate augurs well for NIM.
GNPAs (Rs 11bn, 3.6%) grew a mere 5.4% led by
~15% jump in HE business (3.8% vs. 3.5% QoQ and
2.3% YoY). However, GNPAs in VF declined to 3.5% (vs. 3.7/3.8% QoQ/YoY). With improving earnings profile, gradual macro improvement, we expect asset quality to remain stable. However shift to 90DPD will optically elevate NPAs.
Financial Summary (Rs mn) Net Interest Income PPOP PAT EPS (Rs) ROAE (%) ROAA (%) Adj. BVPS (Rs) P/ABV (x) P/E (x)
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
CIFC: RESULTS REVIEW 1QFY17
Disbursements (Rs 45.6bn) grew 30% (-8% QoQ)
led by 29% growth in the VF segment (Rs 33bn).
The strong growth was driven across segments. On sequential basis, HCV dipped 27%, used CV fell 14% and tractors & cars/3W disbursals declined ~12% each. HE disbursements were steady with ~19% YoY (flat QoQ) growth. On small base other segments (HL, MSME and Agri) grew ~2.7x YoY and 30% QoQ. We have factored in disbursements CAGR of 21% over FY16-18E given improving macros and better collection trends we expect VF disbursements to sustain and HE to improve gradually.
Higher overall repayment trends (~12% of the
opening AUM), especially in the HE business
(8.4% of opening book vs. 5.4% QoQ and 5.9% YoY), led to AUM growth of ~18% YoY to Rs 308bn. HE AUM grew ~20% to Rs 92.5bn (302% of AUM); VF AUM ~17% to Rs 208bn (67.5% of AUM). With strong presence across geographies, segments and a widespread network, we expect AUM CAGR of 22% over FY16-19E.
Calc. yields at 14.5% declined 72/113bps
YoY/QoQ led by 80/60bps YoY/QoQ decline in
the HE business and 30/70bps decline in the VF segment. The decline in both segments was led by lower recoveries and higher reversals due to interest reversals (Rs 300mn). However,
47/10bps decline in CoF provided some cushion.
With 67% AUM at fixed rate, bank borrowings at 47%, rise in relatively lower cost CPs and the recent rating upgrade will be NIM accretive in the near term. Despite the favourable interest rate scenario, we expect calc. NIM to remain stable at ~5.9% over FY17-18E.
Operating expenses were controlled with a 6.5%
YoY growth (+8.5% QoQ), led by ~12% YoY decline in other opex. In 1QFY16, CIFC provided Rs 210mn as VAT towards reposed vehicles. However, Staff cost jumped +26% YoY and depreciation (towards Tablets) increased 42% YoY. On sequential basis the other opex jumped ~26%. With improving business traction, better collections we expected opex growth to remain under control. We expect C-AA to decline ~40bps over FY16-19E to 2.9%.
Aggregate provision of Rs 804mn (1.06% ann. vs.
1.36% QoQ and 1.66% YoY) was 25/19% lower
YoY/QoQ. The cushion was largely led by VF provisions (down 90/30bps YoY/QoQ) even as the HE provisions were higher at 80bps (40/10bps YoY/QoQ). In 4Q, CIFC has made additional provision of Rs 540mn towards the shift to 90DPD, thus providing cushion in coming quarters. Despite this, we factor in LLP of an average 1.02% over FY16-19E, while considering PCR improvement.
Page | 2
CIFC: RESULTS REVIEW 1QFY17
Five Quarters At A Glance
(Rs mn) Net Interest Income Non-interest Income Total Income Operating expenses Pre Provision Profits Provisions PBT TAX PAT Other details Disbursements (Rs bn) VF HE AUM (Rs bn) VF HE On Books Off Books Borrowings (Rs bn) Bank Borrowings CRAR (%) Tier I (%) Profitability Yield On Advances (%) (calc.) Cost Of Funds (%) (calc.) Spreads NIM (calc.) (%) Cost-Income Ratio (%) Tax rate (%) Asset Quality Gross NPA (Rs mn) Net NPA (Rs mn) Gross NPAs (%) Net NPAs (%) Coverage Ratio (%) Gross NPAs VF (%) Gross NPAs HE (%) Source: HDFC sec Inst Research
especially in HE segment Driven by other opex (+26% QoQ) and Staff cost was higher 25% YoY
Led by sharp drop in HCV (27%), Used
CV (14%) and ~12% each in tractors & cars; Only LCV reported growth (1%) With higher repayments (~12%), especially in HE segment, AUM growth was restricted at 18%; HE forms ~30% of AUM Break up : Bank - 47%, NCDs 27%, CPs ~10% Lower recoveries, higher reversals led to sharp drop, especially in HE segment HE segment NIM at 4.5% down 60bps QoQ and VF NIM at 8.1% down 40bps Led by HE segment (+15% QoQ); VF declined ~2.3% QoQ
Page | 3
CIFC: RESULTS REVIEW 1QFY17
73%
1QFY17
22%
20% 76%
4QFY16
21% 76%
3QFY16
21% 76%
2QFY16
24% 74%
1QFY16
24% 73%
4QFY15
74%
3QFY15
24%
24% 72%
2QFY15
73%
1QFY15
22%
21% 76%
4QFY14
21% 78%
3QFY14
23
26
24
24
23
23
22
23
23
23
10
11
13
14
16
16
17
14
27
35
35
34
31
34
34
34
31
32
32
32
31
29
27
25
24
23
22
21
21
24
22
21
21
24
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
24% 76%
2QFY14
20% 80%
21
-20
HE Disbursements: 19% YoY Growth
AUM: Led By HE (+20% YoY) and VF (+4% QoQ)
Growth YoY (%) - RHS
AUM (Rs bn)
Growth (YoY %) RHS
12.5
40.0
400
50
10.0
30.0
300
40
20.0
200
10.0
100
10
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
20
4QFY14
5.0
30
3QFY14
7.5 2.5
With improving disbursements
trends, we have factored in AUM growth of 22% CAGR over FY16-19E
20
4QFY15
25
3QFY15
10.0
Car & 3 wheelers
2QFY15
20
Tractors
1QFY15
20.0
HCV
4QFY14
40
Used CV
3QFY14
30.0
LCV
2QFY14
60
Home Equity Disbursement (Rs bn)
Others
1QFY14
Growth (YoY %)
40.0
1QFY14
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
Vehicle Finance Disbursement Rs bn (LHS)
Home Equity
Segment-wise VF Disbursements
2QFY14
HE AUM grew ~20/3%
YoY/QoQ and CF AUM grew ~17/4% YoY/QoQ
VF Disbursements: Growth Across Segments
1QFY14
With higher repayment trend
AUM growth was restricted at 18/3% YoY/QoQ
Vehicle Finance 50.0 40.0 30.0 20.0 10.0 -10.0
3QFY14
With improving macros and
collection trends, we expect VF disbursements to sustain and HE to improve gradually
Disbursements Business-wise
YoY Growth (%)
60.0 50.0 40.0 30.0 20.0 10.0 0.0
2QFY14
Sequential de-growth in the
VF segment was due to HCV (27%), used CV (-14%) and ~12% decline each in tractors and cars/3W; only LCV disbursals were flat QoQ
Disbursements Rs bn - RHS
1QFY14
Other segments (HL, MSME
and Agri) disbursals grew 2.7x YoY and 30% QoQ
Disbursements: +30% YoY And Down 7.7% QoQ
1QFY14
Disbursements up 30% YoY led
by ~29% YoY growth in the VF segment and 19% YoY in HE disbursements
Source : Company, HDFC sec Inst Research
Page | 4
CIFC: RESULTS REVIEW 1QFY17
Vehicle finance
Vehicle AUM Rs bn
250
23 24 25 25 26 27 28 29 29 30 30 30 30
LCV
Used CV
1QFY17
4QFY16
3QFY16
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
Segment-wise VF AUM
2QFY16
1QFY16
4QFY15
0%
3QFY15
10.0
2QFY15
50
1QFY15
20%
4QFY14
20.0
76 75 74 73 72 71 70 69 68 68 67 67 68
3QFY14
100
State-wise VF AUM HCV
Tractors
Haryana Other 3% states 8%
Car & 3W
100%
TN 8% AP (incl. Telangana) 8%
KTK 5%
80%
Orissa 4%
60%
Mah 12%
UP 6%
40%
Delhi 3% WB 5% MP 6% Kerala 4% Punjab 5%
1QFY17
20.0
10.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
CC/WCDL
50%
0%
1QFY17
20.0
Sub debt
4QFY16
40.0
CPs
3QFY16
30.0
2QFY14
Raj 11%
2QFY16
60.0
Debentures
1QFY16
40.0
Bank loans 100%
4QFY15
80.0
1QFY14
Guj 5%
3QFY15
50.0
2QFY15
100.0
Chattisgarh 7%
Borrowings : Bank Borrowings Form 47%
YoY % (RHS)
1QFY15
Home Equity AUM (Rs bn)
1QFY14
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
Home Equity AUM: Steady Growth Continues
4QFY14
40%
2QFY14
30.0
1QFY14
150
60%
0%
As ~47% of its total
borrowings are from bank, CIFC will benefit from the decline in rates
50.0 40.0
20%
With higher repayments
(8.4% of opening AUM) vs. 5.4% QoQ and 5.9% YoY, HE AUM growth was restricted at 20/3% YoY/QoQ
YoY (%, RHS)
200
80%
3QFY14
The vehicle finance portfolio
remains well diversified across geographies
VF AUM: Jumps 4% QoQ and 17% YoY
Others
2QFY14
In the VF segment, HCV (16%)
share jumped 200bps QoQ
Home equity
100%
1QFY14
Repayment rates moderated
in VF segment to ~13% (of opening AUM) vs. 13.5% QoQ and 13.6% YoY
AUM Break-up: HE Proportion Stable QoQ
2QFY14
HE AUM proportion remains
stable QoQ at ~30%
Source : Company, HDFC sec Inst Research
Page | 5
CIFC: RESULTS REVIEW 1QFY17
Yields And NIM Decline In The Both Business
Efficiency Ratio: Scope For Improvement
C-I
C-AA - RHS
3.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
Vehicle Finance (% RHS)
Home Equity Finance (% LHS)
4.0
2.0 1.5
3.5
1.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2.0 -
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
4.0 5.0
2QFY15
1.0
6.0
1QFY15
2.0
Home Equity (LHS)
Home Equity (%)
Rs bn
4QFY14
3.0
10.0
3QFY14
90.0 80.0 70.0 60.0 50.0 40.0 30.0
4.0
2QFY15
Vehicle Finance (LHS)
Vehicle Finance (%)
PCR (%. RHS)
2QFY14
NNPA %
1QFY15
Segmental Asset Quality
5.0
4QFY14
3.0
1QFY14
Asset Quality Stable QoQ
GNPA %
0.5
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
2.0
1QFY14
32.0
3QFY14
PCR jumped +115bps QoQ to
41.7%
3.0
2.5
2QFY14
With improving growth
trends and controlled opex, we expect C-AA to decline to 2.9% by FY19E from 3.3% in FY16
10.0
4.0 3.5
42.0
1QFY14
Expense ratio in HE and VF
remains steady QoQ
5.0
12.0
Segmental Expenses Ratio
37.0
Sequentially lower NIM and
~9% growth in opex led to deterioration in efficiency ratio (C-AA jumped 10bps QoQ)
7.0
14.0
2QFY14
47.0
16.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
14.0
HE Yields - RHS HE NIMs % 9.0
2QFY15
14.5
1QFY15
15.0
18.0
4QFY14
15.5
VH Yields - RHS VH NIMs
3QFY14
11.0 10.0 9.0 8.0 7.0 6.0 5.0
2QFY14
NIMs %
1QFY14
16.0
Cost
1QFY14
While decline in CoF and fixed
rate VF book provide comfort on margins, we have factored in stable NIM over next two years
Yields - LHS
2QFY14
HE NIM dipped 60bps QoQ to
4.5%, while VF NIM fell to ~8.1%, down 40bps
NIM: Decline Led By Higher Reversals
1QFY14
NIM fell ~100bps QoQ to
7.3% led by a sharp lower recoveries and higher interest reversals, though marginal decline in CoF provided cushion
Source : Company, HDFC sec Inst Research
Page | 6
CIFC: RESULTS REVIEW 1QFY17
Provisions Declined QoQ
1.0
1.5 1.0 0.5
4QFY16
1QFY17
4QFY16
1QFY17
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
1QFY14
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
VF: GNPA And Pre-tax RoAA
HE: GNPA And Pre-tax RoAA
Pre-tax RoAA %
6.0 5.0 4.0 3.0 2.0 1.0 -
Home Equity
2.0
Pre-tax RoAA %
GNPA (%)
GNPA (%)
4.0 3.0 2.0 1.0
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
RoAA Improvement Driven By Better Margins
NII Provisions
Other income Tax
Opex RoA (RHS)
10.0
2.9
5.0
2.4
1.9
-5.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
1.4
2QFY15
-10.0
1QFY15
Over FY16-19E, we expect
RoAA to inch up to 2.6% driven by improvement in efficiency, coupled with a stable NIM
4QFY14
Led by lower NIM and rise in
opex, RoAA declined ~50bps QoQ, though cushioned by 30bps decline in provisions
0.5
Vehicle Finance
3QFY14
500
2.5
2QFY14
1,000
3QFY14
HE business pre-tax RoAA
dipped 60bps QoQ to 2.6%
1.5
1QFY14
With decline in NIM and
provisions, VF pre-tax RoAA inched up to 3.1%, +10bps QoQ
2.0
1QFY14
We conservatively factor in LLP of avg. 1.02% over FY1619E, while considering PCR improvement
% of AUM (annu.)
1,500
Decline in provisions is largely
driven by VF segment (1.3% vs. 1.6% QoQ and 2.2% YoY) HE provisions jumped ~40/10bps YoY/QoQ to 80bps
Segmental Provisions: VF Providing Cushion
Provisions Rs mn - RHS
2QFY14
Provisions declined 25/19%
YoY/QoQ to ~1.06% ann. vs. 1.36% QoQ and 1.66% YoY. CIFC made an additional provision of Rs 540mn for the shift to 90DPD in 4Q.
Source : Company, HDFC sec Inst Research
Page | 7
CIFC: RESULTS REVIEW 1QFY17
Change In Estimates Rs mn NII PPOP PAT Adj. BVPS (Rs)
Source: Company, HDFC sec Inst Research; * Adjusted for subsidiary
Page | 8
CIFC: RESULTS REVIEW 1QFY17
Income Statement (Rs mn) Interest Earned Interest Expended Net Interest Income Other Income Total Income Total Operating Exp PPOP Provisions & Contingencies PBT Provision for Tax PAT
Date 7-Oct-15 27-Oct-15 1-Feb-16 8-Apr-16 2-May-16 8-Jul-16 1-Aug-16
TP
1,400 1,200 1,000 800 600
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
400
CMP 641 602 646 740 799 961 1,152
Reco BUY BUY BUY BUY BUY BUY BUY
Target 728 718 758 778 917 973 1,208
Rating Definitions BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
Page | 11
CIFC: RESULTS REVIEW 1QFY17
Disclosure: We, Darpin Shah, MBA, Parul Gulati, MBA & Siji Philip, MBA, 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. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. Any holding in stock No Disclaimer: This report has been prepared by HDFC Securities Ltd and is meant for sole use by the recipient and not for circulation. The information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject HDFC Securities Ltd or its affiliates to any registration or licensing requirement within such jurisdiction. If this report is inadvertently send or has reached any individual in such country, especially, USA, the same may be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published for any purposes without prior written approval of HDFC Securities Ltd . Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. HDFC Securities Ltd may from time to time solicit from, or perform broking, or other services for, any company mentioned in this mail and/or its attachments. HDFC Securities and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the 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 company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. HDFC Securities Ltd, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. HDFC Securities Ltd and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report. HDFC Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. HDFC Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HDFC Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HDFC Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HDFC Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475
HDFC securities Institutional Equities Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013 Board : +91-22-6171 7330 www.hdfcsec.com Page | 12
