DCB Bank (DCB)

CMP: | 182 Target: | 220 (21%) Target Period: 12 months BUY

January 27, 2020 Mixed performance; cautious on moderating growth Credit growth came in at a 30-quarter low to 11.1% YoY at | 25438 crore. This is largely attributable to de-growth within corporate & flat growth in

SME book. However, excluding corporate book advances, growth was 14% YoY with healthy performances in mortgage & retail banking. Deposit Particulars accretion has also been slower at 8% YoY to | 29735 crore though retail

Particular Amount deposit grew faster at 20% YoY, partly aided by acquisition of deposits from Market Capitalisation | 5594 crore ADCB Bank. Sequentially, CASA ratio was stable at 23.34%, up 10bps QoQ. GNPA (Q3FY20) | 552 crore NNPA (Q3FY20) | 261 crore Operating profit was at ~| 190 crore, up 9% YoY, on the back of controlled NIM (Q3FY20) 3.70% Update Result expenses that also led to improvement in CI ratio to 54.4, down 90 bps QoQ. 52 week H/L 245/165 NII growth was at 10% YoY to | 323 crore, largely in line with our estimates Networth | 3352 Crore due to improvement in margins of 4 bps QoQ. The management sees Face value | 10 margin improvement of 4 bps to 3.75 by Q4FY20. Provision surged 47% YoY DII Holding (%) 32.8 to | 59 crore on back of higher slippages of | 203 crore. DCB with transition FII Holding (%) 24.6

to lower tax regime recognised lower tax outgo of | 34 crore vs. run rate of | 40 crore plus. Accordingly, PAT was at ~| 97 crore, up 12% YoY. Key Highlights Slippages for the quarter surged 80% YoY to | 203 crore led by stress across  Continuous deceleration in advances portfolio though largely through one account from corporate of | 41 crore. growth with continued de-growth in Further, sale to ARC also led to higher recoveries. GNPA ratio inched up 6 corporate book bps QoQ to 2.15% while NNPA ratio was up 7 bps to 1.03% due to 100 bps

Further, during the quarter, the bank reduction in PCR ratio.  acquired deposits & advances worth Improvement in CI ratio to enhance return ratios | 638 crore & | 320 crore, respectively, from ADCB Bank Earlier, the bank had doubled its branch count to 334, which had led to a The bank has acquired deposit worth surge in CI ratio. DCB’s stance on branch expansion policy has returned to  normalcy with the bank carefully opening branches, going ahead. We expect | 216 crore from Abu Dhabi Bank cost-to-income ratio to moderate to 52.5% by FY22E. This reduction in pace during January of opex is seen leading to an improvement in RoA to 1.3% by FY22E.  Maintain BUY rating with unchanged target price of | 220

Retail Equity Research Equity Retail

FY20E to remain moderate; revival seen from FY21E onwards

– On the back of slower credit offtake in the economy, the bank’s FY20E is expected to remain moderate. However, the management is confident and has reiterated guidance of doubling the bank’s balance sheet in three to four years with focus on low capital consuming and secured loans. We estimate the loan book will grow at ~16% CAGR in FY19-22E to | 37207 crore. Research Analyst Kajal Gandhi [email protected] Valuation & Outlook Securities ICICI

Despite a surge in slippages, slower credit offtake, we believe DCB will see Vishal Narnolia [email protected] a pick-up in its growth trajectory & superior asset quality. Further, with focus on low risk weighted secured loans, retail deposits & improvement in CI Harsh Shah ratio, we estimate earnings growth at 26% CAGR in FY19-22E. Hence, return [email protected]

ratios are seen at ~1.3% & RoE to ~16% by FY22E. Rolling over to FY22E, we maintain BUY with target price at | 220, valuing it at ~1.7x FY22E ABV.

Key Financial Summary s | Crore FY18 FY19 FY20E FY21E FY22E CAGR (FY19-22E) NII 995 1149 1271 1460 1777 16% PPP 525 647 738 809 1067 18% PAT 245 325 380 477 652 26% ABV (|) 78 88 97 111 131 P/E 22.8 17.3 14.8 11.8 8.6 P/ABV 2.3 2.1 1.9 1.6 1.4 RoA 0.9 1.0 1.0 1.1 1.3 RoE 11.1 12.2 12.6 13.8 16.2

Source: Company, ICICI Direct Research Result Update | DCB Bank ICICI Direct Research

Exhibit 1: Variance Analysis Q3FY20 Q3FY20E Q3FY19 YoY (%) Q2FY20 QoQ (%) Comments NII 323 328 294 10.0 313 3.1 Improvement in NIM partially offset credit growth NIM (%) 3.7 3.7 3.8 -12 bps 3.7 4 bps Moderation in CoF led to improvement in margins Subdued trading income & slower fee income growth impacted Other Income 93 99 94 -1.5 101 -8.2 other income

Net Total Income 991 1,004 872 13.7 981 1.1 Staff cost 116 117 110 4.8 115 0.8 Other Operating 226 236 214 5.6 230 -1.7 Expenses Cost to Income ratio 0.5 0.6 0.6 -1.6 0.6 -0.5 Contained cost led to improvement in CI ratio of 90 bps PPP 190 191 174 9.3 185 2.9 Provision 59.0 46.2 40.1 47.0 43.3 36.4 Provisions remain elevated led by higher slippages PBT 131 145 134 -2.0 141 -7.3 Tax Outgo 34.2 36.9 47.5 -28.0 49.9 -31.4 PAT 96.7 107.9 86.1 12.3 91.4 5.8 Higher provisions dent earnings

Key Metrics

Slippages increase ~26% QoQ to | 203 crore mainly due to CV and GNPA 552.0 549.4 445.1 24.0 523.2 5.5 mortgage portfolio. This led to 6 bps QoQ increase in GNPA ratio

NNPA ratio increased 7 bps QoQ due to lower PCR of 72% NNPA 260.8 247.4 163.4 59.6 237.9 9.6 compared to 73% in Q2FY20 Total restructured 0.0 35.0 31.0 -100.0 40.0 -100.0 assets Credit growth impacted by de-growth in corporate book & Credit Book 25,438 25,864 22,888 11.1 24,798 2.6 moderation in growth in SME Deposit Book 29,735 30,535 27,509 8.1 29,363 1.3 CASA ratio stable at 23.34%

Source: Company, ICICI Direct Research Exhibit 2: Change in estimates FY20E FY21E FY22E (| Crore) Old New % Change Old New % Change Introduced Net Interest Income 1,334 1,271 -4.7 1,531 1,460 -4.6 1,777 Pre Provision Profit 745.0 737.6 -1.0 871.3 809.3 -7.1 1,066.9 NIM (%) 3.7 3.5 -14 bps 3.7 3.6 -10 bps 3.7 PAT 390.2 380.3 -2.5 516.3 476.8 -7.7 652.5 ABV (|) 97 97 -0.1 112 111 -0.8 131 EPS 12.6 12.3 -2.5 16.7 15.4 -7.7 21.1

Source: Company, ICICI Direct Research

Exhibit 3: Assumption Current Introduced Earlier FY19 FY20E FY21E FY22E FY20E FY21E Credit growth (%) 15.9 11.5 18.0 20.0 14.6 18.0 Deposit Growth (%) 18.4 11.5 15.4 18.5 17.3 18.6 CASA ratio (%) 23.9 23.6 23.9 24.2 24.2 24.6 NIM Calculated (%) 3.7 3.5 3.6 3.7 3.7 3.7 Cost to income ratio (%) 56.6 55.1 56.8 52.5 56.7 55.6 GNPA (| crore) 439 557 609 672 569 641 NNPA (| crore) 154 261 290 327 269 312 Slippage ratio (%) 2.1 2.0 1.5 1.4 2.0 1.6 Credit cost (%) 0.5 0.7 0.5 0.5 0.7 0.5

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2 Result Update | DCB Bank ICICI Direct Research

Story in Charts

Exhibit 4: Loan growth ex-corporate seen improving, going ahead 35000 40 30000 35 25000 30 25 20000 20(%) 15000

15 (| crore) (| 10000 10

5000 5

15680 13337 17685 19289 15818 19289 15818 19155 16266 20567 24007 20337 25032 21243 26169 22069 27509 28789 24044 29363 24798 27685 23281 14436 18840 14584 17395 21296 18595 22888 28435 23568

0 0

FY18 FY19 FY17

Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q2FY19 Q3FY19 Q1FY20 Q3FY20 Q1FY17 Q1FY19 Q2FY20 Deposits Advances Deposits growth YoY (RHS) Advances growth YoY (RHS)

Source: Company, ICICI Direct Research

Exhibit 5: Mortgage segment leads credit growth Current (| crore) FY17 Q1FY18 Q2FY18 Q3FY18 FY18 Q1FY19 Q2FY19 Q3FY19 FY19 Q1FY20 Q2FY20 Q3FY20 Proportion Agriculture 2847 2765 2957 3161 3661 3824 4193 4349 4714 4809 4960 5342 14.9 SME 1898 1789 2087 2231 2440 2549 2648 2747 2828 2885 2976 2798 7.8 Corporate 2531 2440 2957 3161 3457 3611 3310 3433 3064 3126 2976 3053 8.5 Retail banking ex Mortgage 1740 2115 2087 2231 2644 2762 3090 3204 3535 3607 3720 14245 39.7 Mortgage 6802 7157 7306 7810 8135 8497 8828 9155 9427 9618 10167 10430 29.1 Total 15818 16266 17395 18595 20337 21243 22069 22888 23568 24044 24798 35868 100.0

Source: Company, ICICI Direct Research

Exhibit 6: Retail deposit constitutes 80% of deposit FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E Total deposits 10325 12609 14926 19289 24007 28435 31711 36597 43360 Current account 959 1046 1177 1535 1836 1834 2018 2340 2809 Saving deposits 1622 1904 2313 3154 4005 4976 5473 6404 7684 SA ratio 15.7 15.1 15.5 16.4 16.7 17.5 17.3 17.5 17.7 CASA ratio 25.0 23.4 23.4 24.3 24.3 23.9 23.6 23.9 24.2 Term deposits 7744 9659 11436 14600 18167 21625 24220 27853 32867 Retail deposits (RD) 7944 10339 11941 15431 17765 22748 25369 29278 34688 RD proportion 76.9 82.0 80.0 80.0 74.0 80.0 80.0 80.0 80.0

Source: Company, ICICI Direct Research

Exhibit 7: Steady margin seen ahead Exhibit 8: CEB income major contributor to other income

4.3 4.2 4.2 120 4.1 4.2 4.1 4.1 100 4.0 4.0 3.9 4.0 3.9 3.9 80 3.9 3.8 3.8 15.3 9.0 24.9 (%)3.8 3.7 3.7 3.7 3.7 3.71 60 11.2 15.9 3.7 3.1 3.6 crore) (| 40 3.5 59.9 55.9 59.4 64.8 54.6 57.8 62.5 3.4 20 3.3 0

Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20

FY16 FY17 FY18 FY19

Q1FY17 Q2FY17 Q3FY17 Q1FY18 Q2FY18 Q3FY18 Q1FY19 Q2FY19 Q3FY19 Q1FY20 Q2FY20 Q3FY20

NIM CEB Trading income Forex income Recovery Miscellaneous

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 3 Result Update | DCB Bank ICICI Direct Research

Exhibit 9: Cost to Income ratio to improve over FY19-22E Exhibit 10: GNPA to remain below 2% for FY19-21E 600 80 68.6 70 62.9 500 58.8 59.6 59.4 58.2 56.6 55.1 56.8 60 52.5 400 50 300 (%)40

30 crore) (| 200

20 100

157 354 161 369 147 401 154 410 155 445 163 439 154 476 196 523 238 552 261 10 316 0

0

FY13 FY14 FY15 FY16 FY17 FY18 FY19

FY20E FY21E FY22E

Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Cost to income ratio GNPA NNPA

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Exhibit 11: Sectoral break-up of GNPA Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Personal Loan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CV/CE 29.9 31.9 29.4 38.5 48.0 63.5 75.7 100.2 Corporate 84.0 90.2 93.0 77.9 61.9 18.7 18.7 48.1 SME & MSME 30.7 33.9 38.0 40.3 42.5 50.1 74.2 66.2 Mortgages 139.2 148.0 148.6 160.6 162.7 177.9 201.6 181.4 Others 85.2 96.6 101.0 127.8 124.4 166.2 153.0 156.1 Total GNPA 369.0 400.6 410.0 445.1 439.5 476.4 523.2 552.0 Total NNPA 146.7 153.9 155.3 163.4 153.8 195.8 237.9 260.8

Source: Company, ICICI Direct Research

Exhibit 12: CaR comfortable; capital raising seen in 2HFY20E

16

3.71

3.5

3.58

3.55 3.55 12 3.52

(%) 8

4

12.51 12.58 12.02 11.93

13.1 12.3

0

Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q2FY19 Tier-I Tier-II

Source: Company, ICICI Direct Research

Exhibit 13: Valuation (%) FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E Net interest income/ avg. total assets 3.0 3.5 3.5 3.7 3.7 3.5 3.4 3.4 3.6 Non-interest income/ avg. total assets 1.1 1.1 1.3 1.2 1.2 1.1 1.0 1.0 1.0 Net total income/ avg. total assets 4.2 4.6 4.8 4.9 4.8 4.6 4.4 4.4 4.6 Operating expenses/ avg. total assets 2.6 2.7 2.8 2.9 2.9 2.6 2.4 2.5 2.4 Operating profit/ avg. total assets 1.6 1.9 2.0 2.0 2.0 2.0 2.0 1.9 2.2 Provisions/ Avg. total assets 0.3 0.5 0.5 0.5 0.5 0.4 0.5 0.4 0.4 Return on avg. total assets 1.3 1.3 1.1 0.9 0.9 1.0 1.0 1.1 1.3 Leverage -Avg. total assets/ average equity (x) 11.8 11.0 10.8 11.7 12.1 12.2 12.4 12.3 12.3 Return on equity 14.8 14.6 12.0 11.1 11.1 12.2 12.6 13.8 16.2

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 4 Result Update | DCB Bank ICICI Direct Research

Exhibit 14: Recommendation History vs. Consensus 300 80.0 70.0 250 60.0 200 50.0 (|) 150 40.0 (%) 30.0 100 20.0 50 10.0

0 0.0

Jul-17 Jul-18 Jul-19

Oct-17 Oct-18 Oct-19

Apr-17 Apr-18 Apr-19

Feb-17 Feb-18 Feb-19

Jan-17 Jan-18 Jan-19 Jan-20

Jun-17 Jun-18 Jun-19

Sep-17 Sep-18 Sep-19

Dec-17 Dec-18 Dec-19

Nov-17 Nov-17 Nov-18 Nov-19

Aug-17 Aug-18 Aug-19

Mar-17 Mar-18 Mar-19

May-17 May-18 May-19 Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICI Direct Research

Exhibit 15: Top 10 Shareholders Rank NameLatest Filing Date % O/S Position (m) Change (m) 1 AGA KHAN FUND FOR EC 30-06-2019 14.10 43.75M 0 2 HDFC ASSET MANAGEMEN 31-12-2019 4.48 13.91M 0 3 MATTHEWS INTL CAPITA 30-09-2019 4.30 13.34M -0.56M 4 FRANKLIN RESOURCES 30-11-2019 3.92 12.16M +0.23M 5 ADITYA BIRLA SUN LIF 30-11-2019 3.66 11.37M -0.13M 6 DSP BLACKROCK INVEST 31-12-2019 2.91 9.02M 0 7 DIMENSIONAL FUND ADV 30-11-2019 2.89 8.96M -0.01M 8 SUNDARAM ASSET MANAG 30-11-2019 2.45 7.59M -0.08M 9 ICICI PRUDENTIAL ASS 31-12-2019 2.34 7.27M +0.25M 10 PRAZIM TRADING & INV 30-06-2019 2.21 6.85M 0

Source: Reuters, ICICI Direct Research

Exhibit 16: Shareholding Pattern (in %) Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Promoter 14.9 14.9 14.9 14.9 14.9 FII 23.6 26.0 24.5 24.1 24.6 DII 25.4 24.2 27.4 30.0 32.8 Others 36.1 34.9 33.2 31.0 27.7

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 5 Result Update | DCB Bank ICICI Direct Research

Financial summary

Exhibit 17: Profit and loss statement | crore Exhibit 18: Key Ratios (Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19 FY20E FY21E FY22E Interest Earned 3,041 3,478 3,957 4,672 Valuation Interest Expended 1,892 2,206 2,497 2,895 No. of Equity Shares 31.0 31.0 31.0 31.0 Net Interest Income 1,149 1,271 1,460 1,777 EPS (|) 10.5 12.3 15.4 21.1 growth (%) 15.5 10.6 14.8 21.7 BV (|) 92.7 105.0 120.4 141.5 Non Interest Income 350 381 423 480 ABV (|) 87.8 96.6 111.0 130.9 Net Income 1,499 1,653 1,883 2,257 P/E (x) 17.3 14.8 11.8 8.6 Staff cost 434 467 524 588 P/BV (x) 2.0 1.7 1.5 1.3 Other Operating expense 419 448 550 603 P/ABV (x) 2.1 1.9 1.6 1.4 Operating profit 647 738 809 1,067 Yields & Margins (%) Provisions 140 194 169 191 Net Interest Margins 3.7 3.5 3.6 3.7 Taxes 181 163 163 223 Yield on assets 9.7 9.7 9.7 9.8 Net Profit 325 380 477 652 Avg. cost on funds 6.6 6.7 6.7 6.6 growth (%) 32.6 16.9 25.4 36.8 Yield on average advances 11.2 11.1 11.1 11.2 EPS (|) 10.5 12.3 15.4 21.1 Avg. Cost of Deposits 6.7 6.7 6.7 6.6

Source: Company, ICICI Direct Research Quality and Efficiency (%) Credit/Deposit ratio 82.9 82.9 84.7 85.8

GNPA 1.9 2.1 2.0 1.8 NNPA 0.7 1.0 0.9 0.9 Cost to income ratio 56.6 55.1 56.8 52.5 RoE 12.2 12.6 13.8 16.2 ROA 1.0 1.0 1.1 1.3

Source: Company, ICICI Direct Research

Exhibit 19: Balance sheet | crore Exhibit 20: Key ratios (%) (Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19 FY20E FY21E FY22E Sources of Funds Total assets 18.4 11.5 14.7 17.4 Capital 310 310 310 310 Advances 15.9 11.5 18.0 20.0 Reserves and Surplus 2,805 3,185 3,662 4,314 Deposit 18.4 11.5 15.4 18.5 Networth 3,114 3,495 3,971 4,624 Total Income 24.5 13.7 13.5 17.6 Deposits 28,435 31,711 36,597 43,360 Net interest income 15.5 10.6 14.8 21.7 Borrowings 2,723 3,097 3,523 4,010 Operating expenses 9.2 7.3 17.4 10.8 Other Liabilities & Provisions 1,518 1,594 1,673 1,757 Operating profit 23.2 14.1 9.7 31.8 Total 35,792 39,898 45,767 53,752 Net profit 32.6 16.9 25.4 36.8 Net worth 12.3 13.2 14.7 17.5 Applications of Funds EPS 32.0 16.9 25.4 36.8

Fixed Assets 526 556 522 483 Source: Company, ICICI Direct Research Investments 7,844 8,629 9,663 10,822

Advances 23,568 26,276 31,006 37,207 Other Assets 1,060 1,333 1,118 1,376 Cash with RBI & call money 2,793 3,103 3,458 3,865 Total 35,792 39,898 45,767 53,752

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 6 Result Update | DCB Bank ICICI Direct Research

Exhibit 21: ICICI Direct coverage universe (Banks) CMP M Cap EPS (|) P/E (x) P/ABV (x) RoA (%) RoE (%) Sector / Company (|) TP(|) Rating (| Bn) FY19FY20E FY21E FY19FY20E FY21E FY19 FY20E FY21E FY19FY20E FY21E FY19FY20E FY21E BoB (BANBAR) 96 110 Buy 442 1.8 2.1 10.3 53.5 46.0 9.3 1.2 1.0 0.9 0.1 0.1 0.4 0.9 1.5 6.5 SBI (STABAN) 324 400 Buy 2892 1.0 18.4 31.1 334.1 18 10.4 2.3 1.8 1.5 0.0 0.5 0.7 0.5 8.5 12.5 Indian Bank (INDIBA) 107 130 Buy 65 6.7 21.7 40.1 16.0 4.9 2.7 0.5 0.5 0.4 0.1 0.3 0.6 1.7 5.3 9.3 Axis Bank (AXIBAN) 737 865 Buy 2079 18.2 18.8 43.7 41 39.1 16.9 3.4 2.7 2.3 0.6 0.6 1.2 0.6 0.6 1.2 City Union (CITUNI) 238 240 Buy 175 9.3 10.4 12.0 25.6 22.9 19.8 4.0 3.5 3.0 1.6 1.6 1.6 15.3 14.8 14.8 DCB Bank (DCB) 182 220 Buy 56 10.5 12.3 15.4 17.3 14.8 11.8 2.1 1.9 1.6 1.0 1.0 1.1 12.2 12.6 13.8 HDFC Bank (HDFBAN) 1,245 1,550 Buy 6816 38.7 49.3 61.9 32.2 25.3 20.1 4.7 4.1 3.5 1.8 2.0 2.1 16.5 16.8 18.3 IndusInd Bank (INDBA) 1,316 1,700 Buy 912 60.9 80.3 107.5 21.6 16.4 12.2 3.2 2.6 2.2 1.6 1.8 2.1 14.5 16.4 18.4 J&K (JAMKAS) 29 48 Hold 16 8.3 9.4 14.5 3.5 3.1 2.0 0.5 0.5 0.4 0.5 0.5 0.6 7.3 7.7 11.0 Kotak Bank (KOTMAH) 1,643 1,700 Hold 3140 25.5 33.0 37.4 64.5 49.8 44.0 7.6 6.8 5.9 1.7 1.9 1.8 12.1 13.8 13.6 Bandhan (BANBAN) 482 650 Buy 776 16.4 21.4 27.1 2.6 2.0 1.6 0.5 0.5 0.4 3.9 4.6 4.1 19.0 26.5 25.9 IDFC First (IDFBAN) 44 54 Buy 211 -3.4 -2.3 1.1 -12.8 -19.1 39.0 1.2 1.3 1.3 -1.1 -0.6 0.3 -9.8 -6.2 3.1

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 7 Result Update | DCB Bank ICICI Direct Research

RATING RATIONALE ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock Buy: >15% Hold: -5% to 15%; Reduce: -15% to -5%; Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

ICICI Securities | Retail Research 8 Result Update | DCB Bank ICICI Direct Research

ANALYST CERTIFICATION

I/We, Kajal Gandhi, CA, Vishal Narnolia, MBA and Harsh Shah, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

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ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a Sebi registered Research Analyst with SEBI Registration Number – INH000000990. ICICI Securities Limited Sebi Registration is INZ000183631 for stock broker. ICICI Securities is a subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com

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ICICI Securities | Retail Research 9