Absolute : LONG PVR Ltd Relative : Overweight 2QFY19 Result: Estimate (), TP (), Rating () Regular Coverage 17% ATR in 17 Months SPI Cinemas to accelerate growth trajectory for PVR — maintain LONG Media & Entertainment

© 2018 Equirus All rights reserved PVRL’s 2QFY19 revenues grew ~28% yoy to ~Rs 7.1bn (+4% vs. EE) driven by box-office Change in Estimates Rating Information (+25% yoy), F&B (+37% yoy) and advertising (+18% yoy) revenues. Overall footfalls at Rs. Mn FY19E Chg (%) FY20E Chg (%) Price (Rs) 1,284 21.4mn grew ~25% yoy on a 9% growth in comparable footfalls and addition of 2mn Sales 29,840 2% 36,504 3% Target Price (Rs) 1,594 footfalls from the acquisition of SPI Cinemas (SPI). EBITDA at Rs 1.24bn was up ~35% yoy EBITDA 5,513 4% 6,929 2% Target Date 31st Mar'20 (+8% vs. EE) as EBITDAM expanded by ~100bps mainly due to the consolidation of SPI with 36.9 -1% 49.8 0% Target Set On 25th Oct'18 EPS standalone EBITDAM remaining flattish. PVRL is set to benefit from (a) its unmatched Implied yrs of growth (DCF) 15 presence in tier-1 cities, (b) expansion in the South and (c) an improved content pipeline. Fair Value (DCF) 1,541 Consolidated Financials Fair Value (DDM) NA We expect revenue/EBITDA/PAT CAGR of 21%/28%/38% over FY18-FY21E and broadly Rs. Mn YE Mar FY18A FY19E FY20E FY21E Ind Benchmark NSEMED maintain our FY19/FY20 estimates. Reiterate LONG with a Mar’20 TP of Rs 1,594 set at a Sales 23,341 29,840 36,504 41,433 Model Portfolio Position NA 32x TTM P/E (TP, P/E multiple unchanged). EBITDA 4,018 5,513 6,929 8,412

New screen additions, SPI acquisition to keep up growth momentum: PVRL completed Depreciation 1,537 1,838 2,194 2,476 Stock Information the SPI acquisition in mid-Aug, with 2QFY19 thus reflecting ~1.5 months of the latter’s Interest Expense 837 1,108 1,306 1,226 Market Cap (Rs Mn) 60,015 Other Income 313 187 219 242 Free Float (%) 79.75 % contribution. Given the higher occupancy ratios of SPI and a strong content pipeline Reported PAT 1,247 1,724 2,408 3,268 52 Wk H/L (Rs) 1568.45/1062.8 (Thugs of Hindostan, Fantastic Beasts, 2.0, Simba) for the rest of FY19, we expect Recurring PAT 1,253 1,724 2,408 3,268 Avg Daily Volume (1yr) 3,70,634 acceleration in footfall growth. Along with SPI, PVRL has already added 7 properties and Total Equity 10,754 12,478 17,466 20,735 Avg Daily Value (Rs Mn) 495 34 screens YTD. Management stated it is on track to achieve 99 screen additions for full- Gross Debt 8,305 12,805 13,305 12,505 Equity Cap (Rs Mn) 467 year FY19 (91 screens for base business, 8 for SPI). Face Value (Rs) 10 Cash 339 821 1,395 1,584 F&B revenues solid despite price cuts in some markets: F&B revenues for the base Bloomberg Code PVRL IN Rs Per Share FY18A FY19E FY20E FY21E business increased ~25% yoy despite a ~3% yoy decline in SPH as (a) the conversion ratio Earnings 26.8 36.9 49.8 67.6 Ownership Recent 3M 12M improved and (b) the GST rate on F&B products came down to 5% from 18% earlier. Book Value 230 267 361 429 Promoters 20.3 % 0.0 % 0.0 % Contribution margin for F&B declined to ~73.3% in 2QFY19 vs. 73.9% in 2QFY18 mainly due Dividends 2.0 2.6 3.5 4.7 DII 30.2 % 1.0 % 3.8 % to unavailability of input tax credit and rationalization of F&B pricing. Although FCFF 20.2 -121.8 46.0 62.5 FII 39.5 % -1.5 % -1.9 % advertising revenue growth for the base business slowed down in 1HFY19 (+10% yoy), Public 10.0 % 0.4 % -1.9 % P/E (x) 47.9 34.8 25.8 19.0 management has guided for >15% growth for full-year FY19 as it plans to get the P/B (x) 5.6 4.8 3.6 3.0 Price % 1M 3M 12M maximum out of its strong pipeline in the next two quarters. EV/EBITDA (x) 16.9 13.5 10.6 8.5 Absolute 2.4 % 12.8 % -7.5 % Maintain LONG with a Mar’20 TP of Rs 1,594: Management reassured that SPH would ROE (%) 12 % 15 % 16 % 17 % Vs Industry 8.6 % 29.8 % 15.5 % soon be back on the growth track and has guided for SPH growth of ~5% in 2HFY19. Also, Core ROIC (%) 9 % 10 % 10 % 12 % Inox Leisure -10.7 % -0.3 % -11.3 % EBITDA Margin (%) 17 % 18 % 19 % 20 % Mukta Arts -9.6 % -12.3 % -60.3 % it is confident about adding 22 screens in 3QFY19 and 43 in 4QFY19 to achieve full-year Net Margin (%) 5 % 6 % 7 % 8 % Consolidated Quarterly EPS forecast guidance of 99 screens. We expect revenue/EBITDA/PAT CAGR of 21%/28%/38% over Rs/Share 1Q 2Q 3Q 4Q FY18-FY21E and broadly maintain our FY19/FY20 estimates. Reiterate LONG with a Mar’20 EPS (18A) 9.2 5.3 6.0 5.4 TP of Rs 1,594 set at a 32x TTM P/E (TP, P/E multiple unchanged). Key risk: Prolonged EPS (19E) 10.8 6.8 11.3 6.8 slowdown in mall development across the country.

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 1 of 12 Before reading this report, you must refer to the disclaimer on the last page. PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Quarterly performance, consolidated % Change 2QFY19 2QFY19E 1QFY19 2QFY18 Comments 2QFY19E 1QFY19 2QFY18 Net Sales 7,086 6,788 6,963 5,554 4% 2% 28%

Movie Exhibition Cost 1,650 1,519 1,663 1,335 9% -1% 24% Consumption of Food and Beverages 543 505 508 385 8% 7% 41% Employee Benefits Expense 770 805 742 587 -4% 4% 31% Other Expenses 2,882 2,811 2,678 2,332 3% 8% 24%

Total Operating Expenses 5,845 5,639 5,591 4,638 4% 5% 26%

EBITDA 1,240 1,149 1,372 916 8% -10% 35% Depreciation 448 458 401 357 -2% 12% 25%

EBIT 792 691 971 558 15% -18% 42% Interest 298 241 208 207 24% 43% 44% Other Income 61 43 43 42 41% 43% 47%

PBT 555 493 805 393 13% -31% 41% Tax 212 168 283 140 26% -25% 51%

PAT before MI & Associates 344 325 522 253 6% -34% 36% Minority Interest -12 -10 1 5 21% -1173% -362% Profit from Assoc. -2 0 -2 0 NA -17% NA Recurring PAT 330 316 522 258 5% -37% 28% Extraordinaires 0 0 0 6 NA NA -100% Reported PAT 330 316 522 252 5% -37% 31% EPS (Rs) 6.8 6.5 10.8 5.3 5% -37% 28% Gross Margin 69.0% 70.2% 68.8% 69.0% -115 bps 22 bps 0 bps EBITDA Margin 17.5% 16.9% 19.7% 16.5% 57 bps -220 bps 102 bps EBIT Margin 11.2% 10.2% 13.9% 10.1% 100 bps -276 bps 113 bps PBT Margin 7.8% 7.3% 11.6% 7.1% 57 bps -373 bps 76 bps PAT Margin 4.7% 4.6% 7.5% 4.5% 1 bps -283 bps 13 bps Tax Rate 38.1% 34.0% 35.2% 35.6% 412 bps 296 bps 254 bps Key Operational Metrics Footfalls (mn) 23.4 22.1 22.7 18.7 6% 3% 25% Average Ticket Price (Rs) 206 204 217 204 1% -5% 1%

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 2 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Earnings call takeaways Other highlights

Box-office highlights ▪ PVRL added 3 properties and 13 screens in 2QFY19. YTD, it has added 7 properties and 34 screens (including 1 property and 4 screens for SPI Cinemas). ▪ Top-5 films accounted for ~44% of GBOC for 2QFY19 vs. ~29% for 2QFY18. Sanju, ▪ Management has guided to add a total of 99 screens in FY19 (including 8 screens of Stree, Gold and Mission Impossible: Fallout were the major hits for 2QFY19. SPI Cinemas). The company would add 22 screens in 3QFY19 and 43 in 4QFY19. ▪ Overall footfalls for the quarter grew ~25% yoy to 23.4mn. Growth was mainly led by ▪ Acquisition of SPI Cinemas was completed on 17 Aug’18 (71.7% stake). By FY19-end, ~9% growth in comparable footfalls in the standalone business and addition of ~2mn the company would be able to close the merger process (entire 100% stake). footfalls from SPI Cinemas. ▪ To encourage early booking, PVRL has launched a seat cancellation feature across all ▪ Overall occupancies for 2QFY19 stood at ~34.6%, standalone business occupancy at cinemas in October for customers booking through PVR web/app and BookMyShow. ~33.4% (+380bps yoy) and SPI occupancy at ~54.7% (weaker than FY18 occupancy of Cancellation fees vary from 25-50%, depending on the time of ticket cancellation. 58%). ▪ Bulk of growth in advertising revenues would come in 3Q and 4QFY19. Management ▪ Average Ticket Price (ATP) for the standalone business grew ~3% yoy to Rs 211 has guided for 15-17% growth in advertising revenues for FY19. whereas blended ATP came in at Rs 206 due to SPI Cinema’s lower ATP of Rs 154. ▪ About 20% of advertising revenues are local in nature whereas rest are corporate. ▪ Share of content in 2QFY19: Bollywood 61%, Hollywood 20% and Regional 19%. For Delhi, Mumbai and Bangalore are the most ad-revenue generating markets. 2QFY18, the share of content was as follows: Bollywood 57%, Hollywood 22% and Regional 21%. ▪ Currently, Local Body Tax is applicable in TN only (more specifically in , and another city). Recently, Bhopal and Indore municipal councils have ▪ Footfalls increased only slightly due to issues between an aggregator and a major announced the levy of LBT. The Multiplex Association of India is in constant multiplex player in Sep’18. engagement with the Government of MP and local officials to withdraw LBT. The ▪ Overall online admissions have touched 54.5-55% as of now. GBOC contribution would contribution of MP in PVRL’s overall footfalls is insignificant. be to the tune of 57.5-60%. ▪ Capex for FY19 would be Rs 4.25bn-4.5bn (without SPI). SPI capex would be Rs 200mn-250mn.

F&B updates ▪ Post GST, the company has not reported any subsidy; FY19 subsidy should be ▪ Standalone SPH for 2QFY19 declined to ~Rs 88 (-3% yoy). However, the company was Rs 100mn-120mn but the company has not been accounting any of this. able to grow F&B revenues by ~25% yoy mainly due to a higher conversion ratio. Net ▪ As of now, the total no of premium screens stands at 62. revenue looks higher due to a downward revision in GST rates to 5% from 18% earlier.

▪ Standalone contribution margin for F&B declined to ~73.3% in 2QFY19 vs. ~73.9% in

2QFY18 and 75.1% in 1QFY19 mainly due to unavailability of input tax credit in the new regime (effective Nov’17) and rationalization of F&B pricing.

▪ Prices were severely (30-40%) cut only in MH, while several F&B promotions were introduced. However, this strategy did not work in non-peak hours. Water has been subsidized across screens.

▪ SPH for SPI Cinemas is also in the range of PVRL’s standalone business.

▪ SPH would grow by ~5% in 2HFY19.

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 3 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Exhibit 1:Proportion of F&B and advertising has been increasing in the revenue mix Exhibit 3: Comparable footfalls grew at a healthy 9% during 2QFY19

Net Box Office Food & Beverages Advertising/Sponsorship 20% Overall Footfalls Growth (%) Comparable Footfalls Growth (%) Convenience Income Other Operating Income 14% 100% 15% 90% 10% 11% 12% 15% 11% 11% 13% 16% 13% 12% 9% 80% 10% 8% 70% 27% 27% 27% 27% 27% 28% 30% 26% 26% 27% 4% 60% 5% 50% 1% 1% 2% 40% 0% 30% 57% 55% 53% 55% 56% 56% 53% 55% 56% 54% 20% -5% -3% -3% 10% -5% -6% 0% -7% 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 -10% 2018 2018 2018 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2

Source: Company, Equirus Securities; for Standalone business Source: Company, Equirus Securities; for Standalone business

Exhibit 2:Occupancy for 2QFY19 expanded by ~380bps yoy Exhibit 4:On an average, ATP growth has been in line with inflation

Footfalls (mn) Occupancy (%)(RHS) ATP (Rs) Growth (Yoy%)(RHS) 25 40% 230 12% 36.2% 35.9% 10% 35.1% 210 10% 10% 20 31.5% 33.4% 35% 190 8% 31.9% 32.0% 31.6% 7% 7% 8% 29.6% 29.1% 170 15 30% 150 4% 6% 3% 130 4% 10 25% 110 1% -1% 1% 2% 5 20% 90 70 0% 20.7 18.5 17.9 18.2 21.0 18.7 17.4 19.0 22.7 21.4 195 202 199 190 214 204 212 209 217 211 0 15% 50 -2% 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Source: Company, Equirus Securities; for Standalone business Source: Company, Equirus Securities; for Standalone business

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 4 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Exhibit 5: SPH as a percentage of ATP came down to ~42% in 2QFY19 Exhibit 7: Distributor share would be in the range of 44-45% going ahead

F&B SPH (Rs) % of ATP (RHS) Distributor Share on NBOC (%) 100 50% 48% 44.6% 46.2% 43.4% 43.3% 45.8% 46% 45.0% 45.0% 44.7% 41.6% 41.2% 41.1% 40.7% 41.6% 41.7% 45% 44.4% 90 40.5% 43.5% 43.3% 42.8% 40% 44% 80 42% 41.1% 35% 40% 70 30% 38% 25% 60 36% 20% 34% 50 15% 32% 79 84 82 78 87 91 92 87 94 88 40 10% 30% 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Source: Company, Equirus Securities; for Standalone business Source: Company, Equirus Securities; for Standalone business

Exhibit 6: F&B contribution margin contracted by ~60bps in 2QFY19 Exhibit 8: Trend in advertising and other operating revenues/screen

F&B Contrubution Margin Other Operating Revenue per Screen (Rs. mn) Advertising Revenue per Screen (Rs. mn) 79% 2.0 76.8% 1.8 76.1% 76.1% 77% 75.8% 0.4 75.2% 75.1% 1.6 0.3 0.6 74.2% 75% 73.9% 73.8% 1.4 0.4 0.5 73.3% 0.4 0.4 0.4 73% 1.2 0.4 0.4 1.0 71% 0.8 1.4 1.5 69% 0.6 1.1 1.2 1.2 1.2 1.1 1.2 1.0 0.4 0.9 67% 0.2 65% 0.0 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Source: Company, Equirus Securities; for Standalone business Source: Company, Equirus Securities; for Standalone business

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 5 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Company Snapshot Key Downside Risks How we differ from Consensus a) Prolonged slowdown in mall development across the country can hamper expansion plans - Equirus Consensus % Diff Comment b) Any regulations on ticket/F&B pricing can have adverse effect on revenues FY19E 36.9 37.9 -3 % Consensus numbers may not be updated EPS after 2QFY19 results c) Rise of OTT platforms could narrow the theatrical release window in the long FY20E 49.8 48.7 2 % term FY19E 29,840 27,859 7 % Sales DCF Valuations & Assumptions FY20E 36,504 32,655 12 % Rf Beta Ke Term. Growth Debt/IC in Term. Yr FY19E 1,724 1,781 -3 % PAT 8.0 % 1.0 13.8 % 4.0 % 35.0 % FY20E 2,408 2,308 4 %

Key Estimates: - FY19E FY20E FY21-23E FY24-28E FY29-33E

Revenue (Rs mn) FY17 FY18 FY19E FY20E FY21E Sales Growth 28 % 22 % 14 % 13 % 11 % Box Office 11,249 12,471 15,716 19,288 21,832 NOPAT Margin 8 % 9 % 10 % 10 % 11 % Food & Beverages 5,781 6,243 8,598 10,591 12,231 IC Turnover 0.99 1.15 1.40 1.86 2.52 Advertising 2,518 2,969 3,581 4,368 4,992 RoIC 9.7 % 10.1 % 14.1 % 19.8 % 28.1 % Other Operating Revenue 1,647 1,658 2,017 2,258 2,378 Years of strong growth 1 2 5 10 15 Operational Metrics FY17 FY18 FY19E FY20E FY21E Valuation as on date (Rs) -22 132 490 923 1,281 Footfalls (mn) 75.2 76.1 97.1 116.9 128.0 Valuation as of Mar'20 -27 159 590 1,110 1,541 Occupancy Rate (%) 33% 31% 34% 36% 36% Based on DCF, we derive a fair value of Rs 1,281 as on today and Rs 1,541 as on 31 Average Ticket Price (Rs) 196 210 208 211 218 Mar’20. F&B Spend Per Head (Rs) 81 89 91 94 99 Company Description: Ad Revenue/Screen (Rs. mn) (SA) 4.5 5.0 5.2 5.6 6.0 PVR Ltd (PVRL), started in 1997, is India’s largest multiplex cinema chain. PVR has

introduced various movie screening formats across the country to cater to all kinds of Key Triggers customers. PVR currently has 154 theatres and 715 screens spread across 60 Indian cities. a) Improvement in quality of content to result into higher comparable footfalls To enhance presence in the underpenetrated South Indian market, it recently acquired b) Favorable judgement on the F&B issue by the Supreme Court of India SPI Cinemas with an existing circuit of 76 screens in 10 cities. Other complementary c) Higher share of in-cinema advertising in the overall advertising pie businesses of the company include movie distribution (PVR Pictures), Gourmet Popcorn Manufacturing (Zea Maize) and movie-on-demand (Vkaao).

Comparable valuation EPS P/E BPS P/B RoE Div Yield Mkt Cap Price Company Reco. CMP Rs. Mn. Target Target Date FY18A FY19E FY20E FY18A FY19E FY20E FY18A FY19E FY18A FY19E FY20E FY18A FY19E PVR Cinemas LONG 1,284 60,015 1,594 31st Mar'20 26.8 36.9 49.8 47.9 34.8 25.8 230.1 4.8 12 % 15 % 16 % 0.2 % 0.2 % Inox Leisure LONG 202 19,449 275 31st Mar'20 7.2 9.6 11.4 28.0 21.0 17.7 69.6 2.6 11 % 13 % 13 % 0.0 % 0.0 % Mukta Arts NA 38 865 NA NA -2.1 - - -18.0 - - 15.0 - -14 % - - 0.0 % -

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 6 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Consolidated Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q18A 2Q18A 3Q18A 4Q18A 1Q19A 2Q19A 3Q19E 4Q19E 1Q20E 2Q20E 3Q20E 4Q20E FY18A FY19E FY20E FY21E Revenue 6,366 5,554 5,573 5,849 6,963 7,086 8,044 7,747 9,378 8,939 9,346 8,841 23,341 29,840 36,504 41,433 Movie Exhibition Cost 1,449 1,335 1,323 1,271 1,663 1,650 1,783 1,671 2,179 2,065 2,089 1,935 5,377 6,767 8,268 9,376 Consumption of Food and Beverages 413 385 379 414 508 543 604 591 722 677 690 665 1,591 2,246 2,754 3,160 Employee Benefits Expense 679 587 622 653 742 770 854 886 989 934 980 1,006 2,541 3,252 3,908 4,395 Other Expenses 2,682 2,332 2,234 2,567 2,678 2,882 3,189 3,312 3,681 3,696 3,591 3,676 9,815 12,061 14,644 16,089 ------EBITDA 1,144 916 1,015 944 1,372 1,240 1,614 1,287 1,808 1,566 1,995 1,559 4,018 5,513 6,929 8,412 Depreciation 399 357 386 394 401 448 494 494 549 549 549 549 1,537 1,838 2,194 2,476 EBIT 744 558 629 550 971 792 1,120 793 1,260 1,018 1,446 1,011 2,482 3,675 4,735 5,936 Interest 208 207 212 210 208 298 301 301 326 326 326 326 837 1,108 1,306 1,226 Other Income 164 42 32 75 43 61 42 42 55 55 55 55 313 187 219 242 PBT 700 393 449 415 805 555 860 534 988 746 1,175 739 1,958 2,754 3,648 4,952 Tax 258 140 154 153 283 212 293 181 336 254 399 251 704 969 1,240 1,684 PAT bef. MI & Assoc. 443 253 296 262 522 344 568 352 652 492 775 488 1,253 1,786 2,408 3,268 Minority Interest -2 -5 3 -3 -1 12 24 24 0 0 0 0 -7 58 0 0 Profit from Assoc. 0 0 -4 -3 -2 -2 0 0 0 0 0 0 -7 -3 0 0 Recurring PAT 445 258 289 262 522 330 544 328 652 492 775 488 1,253 1,724 2,408 3,268 Extraordinaries 0 6 0 0 0 0 0 0 0 0 0 0 6 0 0 0 Reported PAT 445 252 289 262 522 330 544 328 652 492 775 488 1,247 1,724 2,408 3,268 EPS (Rs) 9.20 5.33 5.97 5.42 10.79 6.83 11.25 6.80 13.49 10.18 16.04 10.09 26.81 36.89 49.81 67.62 Key Drivers Footfalls (mn) ------76.1 97.1 116.9 128.0 Occupancy (%) ------31 % 34 % 36 % 36 % Average Ticket Price (Rs) ------210 208 211 218 F&B Spend Per Head (Rs) ------89 91 94 99 Ad Revenue/Screen (Rs. mn) ------5.0 5.2 5.6 6.0 ------Sequential Growth (%) Revenue 32 % -13 % 0 % 5 % 19 % 2 % 14 % -4 % 21 % -5 % 5 % -5 % - - - - Movie Exhibition Cost 30 % -8 % -1 % -4 % 31 % -1 % 8 % -6 % 30 % -5 % 1 % -7 % - - - - EBITDA 145 % -20 % 11 % -7 % 45 % -10 % 30 % -20 % 40 % -13 % 27 % -22 % - - - - EBIT 612 % -25 % 13 % -13 % 77 % -18 % 41 % -29 % 59 % -19 % 42 % -30 % - - - - Recurring PAT 2,966 % -42 % 12 % -9 % 99 % -37 % 65 % -40 % 99 % -25 % 57 % -37 % - - - - EPS 2,966 % -42 % 12 % -9 % 99 % -37 % 65 % -40 % 99 % -25 % 57 % -37 % - - - - Yearly Growth (%) Revenue 13 % 2 % 5 % 21 % 9 % 28 % 44 % 32 % 35 % 26 % 16 % 14 % 10 % 28 % 22 % 14 % EBITDA 7 % 14 % 27 % 102 % 20 % 35 % 59 % 36 % 32 % 26 % 24 % 21 % 28 % 37 % 26 % 21 % EBIT 1 % 22 % 38 % 426 % 30 % 42 % 78 % 44 % 30 % 28 % 29 % 28 % 42 % 48 % 29 % 25 % Recurring PAT -2 % -12 % 21 % 1,707 % 17 % 28 % 88 % 25 % 25 % 49 % 43 % 49 % 25 % 38 % 40 % 36 % EPS -2 % -12 % 21 % 1,707 % 17 % 28 % 88 % 25 % 25 % 49 % 43 % 49 % 25 % 38 % 35 % 36 % Margin (%) EBITDA 18 % 16 % 18 % 16 % 20 % 18 % 20 % 17 % 19 % 18 % 21 % 18 % 17 % 18 % 19 % 20 % EBIT 12 % 10 % 11 % 9 % 14 % 11 % 14 % 10 % 13 % 11 % 15 % 11 % 11 % 12 % 13 % 14 % PBT 11 % 7 % 8 % 7 % 12 % 8 % 11 % 7 % 11 % 8 % 13 % 8 % 8 % 9 % 10 % 12 % PAT 7 % 5 % 5 % 4 % 7 % 5 % 7 % 4 % 7 % 6 % 8 % 6 % 5 % 6 % 7 % 8 % * Ad revenue/screen pertains to standalone screens (ex-SPI Cinemas)

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 7 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Consolidated Financials P&L (Rs Mn) FY18A FY19E FY20E FY21E Balance Sheet (Rs Mn) FY18A FY19E FY20E FY21E Cash Flow (Rs Mn) FY18A FY19E FY20E FY21E Revenue 23,341 29,840 36,504 41,433 Equity Capital 467 467 483 483 PBT 1,958 2,754 3,648 4,952 Op. Expenditure 19,323 24,326 29,575 33,020 Reserve 10,286 12,010 16,983 20,251 Depreciation 1,537 1,838 2,194 2,476 EBITDA 4,018 5,513 6,929 8,412 Networth 10,754 12,478 17,466 20,735 Others 802 921 1,087 984 Depreciation 1,537 1,838 2,194 2,476 Gross Debt 8,305 12,805 13,305 12,505 Taxes Paid 417 969 1,240 1,684 EBIT 2,482 3,675 4,735 5,936 Def Tax Liability 106 2,655 1,533 340 Change in WC 582 -542 -864 -997 Interest Expense 837 1,108 1,306 1,226 Minority Interest 8 2,565 0 0 Operating C/F 4,463 4,002 4,825 5,731 Other Income 313 187 219 242 Account Payables 2,511 2,914 3,564 4,053 Capex -3,385 -10,599 -3,679 -3,759 PBT 1,958 2,754 3,648 4,952 Other Curr Liabi 1,805 1,805 1,805 1,805 Change in Invest -278 0 0 0 Tax 704 969 1,240 1,684 Total Liabilities & Equity 23,488 35,221 37,672 39,437 Others -390 187 219 242 PAT bef. MI & Assoc. 1,253 1,786 2,408 3,268 Net Fixed Assets 11,554 17,185 18,670 19,953 Investing C/F -4,054 -10,412 -3,460 -3,517 Minority Interest -7 58 0 0 Capital WIP 1,017 1,017 1,017 1,017 Change in Debt 255 4,500 500 -800 Profit from Assoc. -7 -3 0 0 Others 7,940 13,565 13,565 13,565 Change in Equity 0 145 219 275 Recurring PAT 1,253 1,724 2,408 3,268 Inventory 198 277 340 390 Others -914 2,246 -1,508 -1,501 Extraordinaires 6 0 0 0 Account Receivables 1,556 1,472 1,800 2,043 Financing C/F -660 6,892 -790 -2,026 Reported PAT 1,247 1,724 2,408 3,268 Other Current Assets 885 885 885 885 Net change in cash -251 482 575 188 FDEPS (Rs) 26.8 36.9 49.8 67.6 Cash 339 821 1,395 1,584 RoE (%) 12 % 15 % 16 % 17 % DPS (Rs) 2.0 2.6 3.5 4.7 Total Assets 23,488 35,221 37,672 39,437 RoIC (%) 10 % 10 % 10 % 11 % CEPS (Rs) 59.7 76.2 95.2 118.8 Non-cash Working Capital -1,677 -2,085 -2,343 -2,539 Core RoIC (%) 9 % 10 % 10 % 12 % FCFPS (Rs) 20.2 -121.8 46.0 62.5 Cash Conv Cycle -26.2 -25.5 -23.4 -22.4 Div Payout (%) 9 % 8 % 8 % 8 % BVPS (Rs) 230.1 267.0 361.3 428.9 WC Turnover -13.9 -14.3 -15.6 -16.3 P/E 47.9 34.8 25.8 19.0 EBITDAM (%) 17 % 18 % 19 % 20 % FA Turnover 1.9 1.6 1.9 2.0 P/B 5.6 4.8 3.6 3.0 PATM (%) 5 % 6 % 7 % 8 % Net D/E 0.7 1.0 0.7 0.5 P/FCFF 63.5 -10.5 27.9 20.5 Tax Rate (%) 36 % 35 % 34 % 34 % Revenue/Capital Employed 1.2 1.2 1.1 1.2 EV/EBITDA 16.9 13.5 10.6 8.5 Sales Growth (%) 10 % 28 % 22 % 14 % Capital Employed/Equity 1.8 2.1 2.2 1.9 EV/Sales 2.9 2.5 2.0 1.7 FDEPS Growth (%) 25 % 38 % 35 % 36 % Dividend Yield (%) 0.2 % 0.2 % 0.3 % 0.4 % TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE

4000 EPS Growth 120% 160000 40% EBITDA Growth 21x 3000 RoE 18% 70x 3500 100% 140000 35% 16% 60x 18x 2500 7x 3000 80% 120000 30% 14% 50x 15x 2000 12% 6x 2500 60% 100000 25% 40x 12x 10% 5x 2000 40% 80000 20% 1500 30x 8% 4x 60000 15% 9x 1500 20% 1000 6% 3x 40000 10% 4% 1000 0% 500 20000 5% 2% 500 -20% 0 0% 0 0%

0 -40%

Jun/15 Jun/16 Jun/17 Jun/19 Jun/14 Jun/18

Sep/15 Sep/16 Sep/17 Sep/19 Sep/14 Sep/18

Mar/14 Mar/15 Mar/17 Mar/18 Mar/19 Mar/16 Mar/20

Dec/14 Dec/15 Dec/16 Dec/18 Dec/19 Dec/17

Jun/14 Jun/15 Jun/16 Jun/17 Jun/18 Jun/19

Sep/14 Sep/15 Sep/16 Sep/17 Sep/18 Sep/19

Mar/14 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19 Mar/20

Dec/14 Dec/15 Dec/16 Dec/17 Dec/18 Dec/19

Jun/15 Jun/16 Jun/18 Jun/19 Jun/14 Jun/17

Sep/15 Sep/16 Sep/18 Sep/19 Sep/14 Sep/17

Mar/14 Mar/15 Mar/17 Mar/18 Mar/20 Mar/16 Mar/19

Dec/14 Dec/16 Dec/17 Dec/18 Dec/19 Dec/15

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 8 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Historical Consolidated Financials

P&L (Rs Mn) FY15A FY16A FY17A FY18A Balance Sheet (Rs Mn) FY15A FY16A FY17A FY18A Cash Flow (Rs Mn) FY15A FY16A FY17A FY18A Revenue 14,771 18,496 21,194 23,341 Equity Capital 415 467 467 467 PBT 146 1,569 1,569 1,958 Op. Expenditure 12,763 15,571 18,058 19,323 Reserve 3,677 8,345 9,183 10,286 Depreciation 1,168 1,151 1,384 1,537 EBITDA 2,008 2,924 3,136 4,018 Networth 4,092 8,812 9,650 10,754 Others 924 804 820 802 Depreciation 1,168 1,151 1,384 1,537 Gross Debt 7,470 6,600 8,196 8,305 Taxes Paid 69 202 331 417 EBIT 840 1,773 1,752 2,482 Def Tax Liability 94 67 80 106 Change in WC -617 222 -246 582 Interest Expense 783 840 806 837 Minority Interest 383 401 405 8 Operating C/F 1,553 3,543 3,196 4,463 Other Income 89 635 623 313 Account Payables 1,529 1,716 1,976 2,511 Capex -1,691 -2,343 -6,324 -3,385 PBT 146 1,569 1,569 1,958 Other Curr Liabi 720 1,376 1,950 1,805 Change in Invest -139 -513 499 -278 Tax 8 467 570 704 Total Liabilities & Equity 14,288 18,972 22,257 23,488 Others -224 -136 -496 -390 PAT bef. MI & Assoc. 138 1,102 999 1,253 Net Fixed Assets 7,766 9,139 10,750 11,554 Investing C/F -2,054 -2,992 -6,321 -4,054 Minority Interest -11 5 1 -7 Capital WIP 611 759 1,056 1,017 Change in Debt 1,337 -522 1,439 255 Profit from Assoc. 0 0 0 -7 Others 4,342 4,515 7,647 7,940 Change in Equity 100 3,522 10 0 Recurring PAT 149 1,097 999 1,253 Inventory 126 205 190 198 Others -949 -831 -847 -914 Extraordinaires 22 116 41 6 Account Receivables 767 901 1,021 1,556 Financing C/F 488 2,168 602 -660 Reported PAT 128 981 958 1,247 Other Current Assets 415 775 1,284 885 Net change in cash -14 2,720 -2,523 -251 EPS (Rs) 3.2 23.5 21.4 26.8 Cash 261 2,680 309 339 RoE (%) 4 % 17 % 11 % 12 % DPS (Rs) 1.0 2.0 2.0 2.0 Total Assets 14,288 18,972 22,257 23,488 RoIC (%) 8 % 12 % 9 % 10 % CEPS (Rs) 31.7 48.2 51.0 59.7 Non-cash Working Capital -942 -1,212 -1,431 -1,677 Core RoIC (%) 7 % 10 % 7 % 9 % FCFPS (Rs) 5.7 24.5 -55.9 20.2 Cash Conv Cycle -23.3 -23.9 -24.6 -26.2 Div Payout (%) 39 % 11 % 12 % 9 % BVPS (Rs) 98.5 188.8 206.5 230.1 WC Turnover -15.7 -15.3 -14.8 -13.9 P/E 402.0 54.7 60.1 47.9 EBITDAM (%) 14 % 16 % 15 % 17 % FA Turnover 1.8 1.9 1.8 1.9 P/B 13.0 6.8 6.2 5.6 PATM (%) 1 % 6 % 5 % 5 % Net D/E 1.8 0.4 0.8 0.7 P/FCFF 224.5 52.5 -23.0 63.5 Tax Rate (%) 6 % 30 % 36 % 36 % Revenue/Capital Employed 1.3 1.3 1.2 1.2 EV/EBITDA 33.5 21.9 21.7 16.9 Sales growth (%) 10 % 25 % 15 % 10 % Capital Employed/Equity 2.8 2.2 1.9 1.8 EV/Sales 4.6 3.5 3.2 2.9 FDEPS growth (%) -72 % 635 % -9 % 25 % Dividend Yield (%) 0.1 % 0.2 % 0.2 % 0.2 %

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 9 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

Equirus Securities Research Analysts Sector/Industry Email Equity Sales E-mail

Abhishek Shindadkar IT Services [email protected] 91-22-43320643 Vishad Turakhia [email protected] 91-22-43320633

Ashutosh Tiwari Auto, Metals & Mining [email protected] 91-79-61909517 Subham Sinha [email protected] 91-22-43320631

Bharat Celly Healthcare [email protected] 91-79-61909524 Viral Desai [email protected] 91-22-43320635 Depesh Kashyap Mid-Caps [email protected] 91-22-43320671 Viraj Mehta [email protected] 91-22-43320634 Dhaval Dama FMCG, Mid-Caps [email protected] 91-79-61909518 Ruchi Bhadra [email protected] 91-22-43320601 Manoj Gori Consumer Durables [email protected] 91-79-61909523 Cash Dealing Room E-mail

Maulik Patel Oil and Gas [email protected] 91-79-61909519 Ashish Shah [email protected] 91-22-43320662

Pranav Mehta Building Materials [email protected] 91-79-61909514 IleshSavla [email protected] 91-22-43320666

Praful Bohra Healthcare [email protected] 91-22-43320611 Manoj Kejriwal [email protected] 91-22-43320663

Rohan Mandora Banking & Financial Services [email protected] 91-79-61909529 Dharmesh Mehta [email protected] 91-22-43320661 Associates E-mail Sarit Sanyal [email protected] 91-22-43320666 Ankit Choudhary [email protected] 91-79-61909533 Vikram Patil [email protected] 91-22-43320677 Dhairya Dhruv [email protected] 91-79-61909528 Gaurav Mehta [email protected] 91-22-43320680 Harshit Patel [email protected] 91-79-61909522 Compliance Officer E-mail Meet Chande [email protected] 91-79-61909513 Jay Soni [email protected] 91-79-61909561 Nishant Bagrecha [email protected] 91-79-61909526 Corporate Communications E-mail Prateeksha Malpani [email protected] 91-79-61909532 MahdokhtBharda [email protected] 91-22-43320647 Ronak Soni [email protected] 91-79-61909525 Quant Analyst Rushabh Shah [email protected] 91-79-61909520 Kruti Shah [email protected] 91-22-43320632 Shreepal Doshi [email protected] 91-79-61909541 F&O Dealing Room Varun Baxi [email protected] 91-79-61909527 Kunal Dand [email protected] 91-22-43320678 Vikas Jain [email protected] 91-79-61909531 Dhananjay Tiwari [email protected] 91-22-43320668 Mukesh Jain [email protected] 91-22-43320667 Rating & Coverage Definitions: Registered Office: Absolute Rating • LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion and ATR >= Equirus Securities Private Limited 20% for rest of the companies Unit No. 1201, 12th Floor, C Wing, Marathon Futurex, • ADD: ATR >= 5% but less than Ke over investment horizon N M Joshi Marg, Lower Parel, • REDUCE: ATR >= negative 10% but <5% over investment horizon • SHORT: ATR < negative 10% over investment horizon Mumbai-400013. Relative Rating Tel. No: +91 – (0)22 – 4332 0600 • OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon • BENCHMARK: likely to perform in line with the benchmark Fax No: +91- (0)22 – 4332 0601 • UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon Investment Horizon Corporate Office: Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a 3rd floor, House No. 9, calendar quarter. Lite vs. Regular Coverage vs. Spot Coverage Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge, We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we S.G. Highway Ahmedabad-380054 would have access to the company and we would maintain detailed financial model for Regular coverage companies. Gujarat We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for Tel. No: +91 (0)79 - 6190 9550 one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot Fax No: +91 (0)79 – 6190 9560 coverage is meant to stimulate discussion rather than provide a research opinion.

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 10 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

© 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited

Analyst Certification I, Harshit Patel/Depesh Kashyap, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Disclosures Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the Capital Market (Reg. No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154), as a Portfolio Manager under SEBI (Portfolio Managers Regulations, 1993 (Reg. No.INP000005216) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP-324-2017). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers & acquisitions and structured finance. As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or Associates 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 ESPL 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. ESPL has not been engaged in market making activity for the subject company. The Research Analyst engaged in preparation of this Report:- (a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months; (c) has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not 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; (e) has not received any compensation or other benefits from the subject company or third party in connection with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company. This document 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 ESPL and affiliates 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 a certain category of investors. Persons in whose possession of this document are required to inform themselves of, and to observe, such applicable restrictions. Please delete this document if you are not authorized to view the same. By reading this document you represent and warrant that you have full authority and all rights necessary to view and read this document without subjecting ESPL and affiliates to any registration or licensing requirement within such jurisdiction. This document has been prepared solely for information purpose and does not constitute a solicitation to any person to buy, sell or subscribe any security. ESPL or its affiliates are not soliciting any action based on this report. The information and opinions contained herein is from publicly available data or based on information obtained in good faith from sources believed to be reliable but ESPL provides no guarantee as to its accuracy or completeness. The information contained herein is as on date of this report, and is subject to change or modification and any such changes could impact our interpretation of relevant information contained herein. While we would endeavour to update the information herein on reasonable basis, ESPL and its affiliates, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasons that may prevent ESPL and its group companies from doing so. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. 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. This document is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. ESPL and its group companies, employees, directors and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. ESPL/its affiliates do and seek to do business with companies covered in its research report. Thus, investors should be aware that the firm may have conflict of interest.

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 11 of 12 PVR Ltd Absolute – LONG Relative – Overweight 17% ATR in 17 months

A graph of daily closing prices of securities is available at http://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and www.bseindia.com (Choose a company from the list on the browser and select the “three years” period in the price chart).

Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest Research Analyst’ or Relatives’ financial interest No Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No Research Analyst’ or Relatives’ material conflict of interest No

Disclaimer for U.S. Persons Equirus Securities Private Limited (ESPL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition ESPL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by ESPL, including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., ESPL has entered into a chaperoning agreement with a U.S. registered broker-dealer name called Xtellus Capital Partners, Inc, (''XTELLUS'). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

"U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US Persons" under certain rules.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, XTELLUS, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

October 25, 2018 Analysts: Harshit Patel (+91-9825406497)/Depesh Kashyap, CFA (+91-7228934327) Page 12 of 12