Castrol India (CASIND) | 414 Target : | 460 Target Period : 12-18 Months Potential Upside : 11% Strong Volumes Surprise

Result Update May 6, 2016

Rating matrix Rating : Buy Castrol India (CASIND) | 414 Target : | 460 Target Period : 12-18 months Potential Upside : 11% Strong volumes surprise...

provided further push to the profitability. The reported EBITDA Quarterly performance margin was at 29.8%, up 596 bps YoY Q1CY16 Q1CY15 YoY (%) Q4CY15 QoQ (%) • Other income declined YoY from | 43.5 crore to | 18.7 crore, as the Revenue 855.7 799.2 7.1 790.9 8.2 previous year other income contained a onetime write-back of EBITDA 255.2 190.7 33.8 212.0 20.4 provisions, which were no longer required. Subsequently, PAT EBITDA (%) 29.8 23.9 596 bps 26.8 302 bps during the quarter increased 17.5% YoY to | 172.4 crore PAT 172.4 146.7 17.5 140.8 22.4 Sharp decline in crude oil prices plays out in boosting margins

Key financials Majority of Castrol’s raw material costs like base oil and additives are | Crore CY14 CY15 CY16E CY17E crude oil derivatives. With the sharp decline in crude oil prices over the Revenues 3,392.3 3,298.0 3,467.4 3,683.7 past few months, raw materials costs (base oil prices) have come down, EBITDA 716.7 894.8 1,015.9 1,092.3 leading to an improvement in margins. The impact of lower base oil Net Profit 474.5 615.2 685.3 737.0 prices continues to reflect in raw material costs in the current quarter. Net EPS (|) 9.6 12.4 13.9 14.9 realisation is expected to increase marginally from | 171.9/litre in CY15 to

| 172.6/litre in CY17E while the raw material cost is expected to decline Valuation summary from | 83.8/litre in CY15 to | 79.7/litre in CY17E. Hence, we expect CY14 CY15 CY16E CY17E EBITDA to increase from | 46.8/litre in CY15 to | 51.4/litre in CY17E. P/E 43.2 33.3 29.9 27.8 However, sharp volatility in crude oil prices along with forex volatility Target P/E 47.9 37.0 33.2 30.9 (~50% of raw materials are imported) are key risks to our call. EV / EBITDA 28.0 22.1 19.5 18.0 P/BV 41.2 35.6 32.8 30.7 Revival in Indian economy to fuel growth RoNW (%) 95.5 106.9 109.8 110.5 Castrol’s volumes had remained subdued over the past few years due to RoCE (%) 137.0 148.7 157.0 158.1 the slowdown in the Indian economy. Passenger vehicles, two wheelers

and four wheelers, which contribute majority of Castrol’s sales volume, Stock data are expected to witness a recovery on account of improved economic Particular Amount sentiments. Hence, Castrol’s volumes are expected to increase from 191.1 Market Capitalization (| Crore) 20,474.8 million litre in CY15 to 212.6 million litre in CY17E, due to strong focus on Total Debt (FY14E) (| Crore) - the personal mobility segment, which is expected to increase contribution Cash and Investments (FY14E) (| Crore) 431.5 to the overall Castrol portfolio from the current ~40% to ~50% of the EV (| Crore) 20,043.3 portfolio, despite the increasing competitive intensity in the segment. 52 week H/L 360/513 Equity capital (| Crore) 247.3 Bet on largest private player with strong pricing power Face value (|) 5.0 Castrol’s strong brand positioning and superior distribution network allows it to command higher pricing power and premium for its products Price performance over its competitors in spite of decline in base oil prices. We believe Return %1M3M6M12MCastrol, which is the price maker in the Indian automotive lubricant Castrol India 2.9 (5.3) (14.5) (14.5) market, will maintain stable realisations, going forward. With respect to Tide Water Oil (10.0) 0.8 3.2 65.5 the industrial lubricant market, we expect Castrol to pass on some of the Gulf Oil Lube. (2.1) 3.2 5.4 16.0 benefits of the lower base oil prices to consumers. Going forward, we expect the continued good performance from Castrol on account of a

subdued crude oil prices and rising lubricant demand. The company’s Research Analyst focus on the personal mobility segment will remain the key driver for the Mayur Matani automotive lubricant business and create value for shareholders. We [email protected] value Castrol India at 32x average CY16E & CY17E EPS of | 14.4 to arrive Harshal Mehta at a target price of | 460 with a BUY recommendation. [email protected]

ICICI Securities Ltd | Retail Equity Research

Variance analysis Q1CY16 Q1CY16E Q1CY15 YoY (%) Q4CY15 QoQ (%) Comments

Total Revenues 855.7 796.6 799.2 7.1 790.9 8.2 Higher than estimated revenues due to 9% YoY growth in total volumes

Lower than estimated raw material costs due to YoY fall in base oil prices Raw materials costs 391.9 368.7 402.2 -2.6 372.6 5.2 Employees Cost 44.1 46.4 42.2 4.5 43.2 2.1 Other Expenses 164.5 149.0 164.1 0.2 163.1 0.9 Total Expenditure 600.5 564.1 608.5 -1.3 578.9 3.7 EBITDA 255.2 232.5 190.7 33.8 212.0 20.4 EBITDA margins higher than estimates on account of higher-than-expected EBITDA margins (%) 29.8 29.2 23.9 596 bps 26.8 302 bps gross margins Depreciation 8.6 9.9 11.1 -22.5 9.1 -5.5 EBIT 246.6 222.6 179.6 37.3 202.9 21.5 Interest 0.4 0.5 0.3 33.3 0.2 100.0 Other Income 18.7 15.0 43.5 -57.0 22.3 -16.1 Extra Ordinary Item 0.0 0.0 0.0 NA 0.0 NA PBT 264.9 237.1 222.8 18.9 225.0 17.7 Total Tax 92.5 80.6 76.1 21.6 84.2 9.9 PAT 172.4 156.5 146.7 17.5 140.8 22.4

Key Metrics Exchange rate (|/$) 67.7 67.7 62.0 9.1 60.8 11.3 Volume increase due to higher-than-expected growth across personal Volumes (mn litre) 50.1 46.8 46.0 9.0 46.1 8.8 mobility, commercial vehicle and industrial segments

Net realisation experienced a marginal decline due to the higher competetive Net Realisation (|/litre) 169.9 169.4 173.0 -1.8 171.0 -0.6 intensity in automotive as well as industrial lubricant business Gross Margins (|/litre) 92.5 91.4 86.3 7.2 90.8 1.9 EBITDA (|/litre) 50.9 49.7 41.5 22.8 46.0 10.7 Higher than estimates due to higher gross margins per litre

Source: Company, ICICIdirect.com Research

Change in estimates CY16E CY17E (| Crore) Old New % Change Old New % Change Comments Revenue NA 3,467.4 NA NA 3,683.7 NA EBITDA NA 1,015.9 NA NA 1,092.3 NA EBITDA Margin (%) NA 29.3 NA NA 29.7 NA PAT NA 685.3 NA NA 737.0 NA EPS (|) NA 13.9 NA NA 14.9 NA

Source: Company, ICICIdirect.com Research

Assumptions Current Earlier CY14 CY15 CY16E CY17E CY16E CY17E Comments Exchange rate (|/$) 61.0 64.2 67.2 67.0 NA NA Volumes (mn litre) 195.9 191.1 202.5 212.6 NA NA Net Realisation (|/litre) 172.6 171.9 170.4 172.6 NA NA Gross Margins (|/litre) 74.3 88.8 91.8 93.5 NA NA EBITDA (|/litre) 36.6 46.8 50.1 51.4 NA NA Source: Company, ICICIdirect.com Research,

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Company Analysis Revival in Indian economy to fuel growth Castrol’s volume had remained subdued over the past few years due to the slowdown in the Indian economy. Passenger vehicles, two-wheelers and four-wheelers, which contribute majority of Castrol’s sales volume, are expected to witness a recovery on account of improved economic sentiments. Hence, Castrol’s volumes are expected to increase from 191.1 million litre in CY15 to 212.6 million litre in CY17E, due to strong focus on the personal mobility segment, which is expected to increase contribution to the overall Castrol’s portfolio from the current ~40% to ~50% of the portfolio, despite the increasing competitive intensity in the segment.

Exhibit 1: Volume trend

250 212.6 202.5 195.9 191.1 200

150

million litres million 100

53.7 46.0 45.3 46.1 50.1 50

0 CY14 Q1CY15 Q2CY15 Q3CY15 Q4CY15 CY15 Q1CY16 CY16E CY17E

Source: Company, ICICIdirect.com Research

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Expect stable realisations to be maintained, going forward We believe Castrol, which is the price maker in the Indian automotive lubricant market, will maintain stable realisations, going forward. Castrol would continue to command pricing premium to other private players in spite of subdued base oil prices. With respect to the industrial lubricant market, we expect Castrol to pass on some of the benefits of the lower base oil prices to consumers.

Exhibit 2: Automotive, non automotive realisations

200

176.8 176.6 176.5 175.3 177.5 180 175.1 175.8 173.8 175.0

160 152.3 154.1 154.1 151.6 152.7 151.3 147.7 146.2 147.4

| per litre | per 140

120

100 CY14 Q1CY15 Q2CY15 Q3CY15 Q4CY15 CY15 Q1CY16 CY16E CY17E

Automotive Realisations Non-Automotive Realisations

Source: Company, ICICIdirect.com Research

Automotive realisation is expected to increase from | 175.8/litre in CY15 to | 177.5/litre in CY17E. Non-automotive realisation is expected to decline from | 152.7/litre in CY15 to | 147.7/litre in CY17E. Hence, on a blended basis, the net realisation is expected to marginally increase from | 171.9/litre in CY15 to | 172.6/litre in CY17E.

ICICI Securities Ltd | Retail Equity Research Page 4

Sharp decline in crude oil prices plays out in boosting margins Majority of Castrol’s raw material costs like base oil and additives are crude oil derivatives. With the sharp decline in crude oil prices over the past months, raw materials costs (base oil prices) have come down, leading to an improvement in margins. The impact of lower base oil prices continues to reflect in the raw material costs in the current quarter.

Exhibit 3: Net realisation, raw material cost and gross margin trends

200

160

120

80 | per litre 93.5 86.3 89.4 88.8 90.8 88.8 92.5 91.8 74.3 40

0 CY14 Q1CY15 Q2CY15 Q3CY15 Q4CY15 CY15 Q1CY16 CY16E CY17E

Net Realisation Raw Material Costs Gross Margins

Source: Company, ICICIdirect.com Research

The net realisation is expected to increase marginally from | 171.9/litre in CY15 to | 172.6/litre in CY17E while the raw material cost is expected to decline from | 83.8/litre in CY15 to | 79.7/litre in CY17E. Hence, we expect EBITDA to increase from | 46.8/litre in CY15 to | 51.4/litre in CY17E. However, sharp volatility in crude oil prices along with forex volatility (~50% of raw materials are imported) are key risks to our call.

Exhibit 4: EBITDA, EBITDA margins trend

1500 35

29.3 29.7 1200 27.1 30

900 25 % 21.6

| crore 21.1 1015.9 1092.3 600 894.8 20 687.6 716.7

300 15 CY13 CY14 CY15 CY16E CY17E

EBITDA EBITDA Margins

Source: Company, ICICIdirect.com Research

The EBITDA is expected to increase from | 894.8 crore in CY15 to | 1092.3 crore in CY17E while the EBITDA margin is expected to increase 252 bps from 27.1% in CY15 to 29.7% in CY17E.

ICICI Securities Ltd | Retail Equity Research Page 5

Outlook & valuation Castrol’s strong brand positioning and superior distribution network allow it to command higher pricing power and premium for its products over its competitors in spite of a decline in base oil prices. We believe Castrol, which is the price maker in the Indian automotive lubricant market, will maintain stable realisations, going forward. With respect to the industrial lubricant market, we expect Castrol to pass on some of the benefits of the lower base oil prices to consumers. Going forward, we expect he continued good performance from Castrol on account of subdued crude oil prices and rising lubricant demand. The company’s focus on the personal mobility segment will remain the key driver for the automotive lubricant business and create value for shareholders. We value Castrol India at 32x average CY16E & CY17E EPS of | 14.4 to arrive at a target price of | 460 with a BUY recommendation.

Exhibit 5: P/E multiple chart 600

500

400 (|) 300

200

100 Jul-15 Jul-14 Jul-13 Jul-12 Jul-11 Jul-10 Oct-15 Oct-14 Oct-13 Oct-12 Oct-11 Oct-10 Apr-16 Apr-15 Apr-14 Apr-13 Apr-12 Apr-11 Apr-10 Jan-16 Jan-15 Jan-14 Jan-13 Jan-12 Jan-11 Jan-10 Price 37x 34x 32x 29x 27x 25x 22x

Source: Reuters, ICICIdirect.com Research

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Company snapshot

700

600

Target Price: 460 500

400

300

200

100

0 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date Event Feb-10 Announces 1:1 bonus Jul-10 Sells certain assets to Hasco Oil Company Jul-12 Announces 1:1 bonus Aug-13 Announces interim dividend of | 3.50/share Jul-14 Q2 net sales rise 6% to | 910.3 crore with net profit dipping 19% to 124.4 crore Jan-15 Crude oil prices fall below $55/bbl Sep-15 Closure of Castrol's Wadala facility

Source: Company, ICICIdirect.com Research

Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) (in %) Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 1 Castrol, Ltd. 31-Mar-16 0.7 350.7 0.0 Promoter 71.0 71.0 71.0 71.0 71.0 2 Life Insurance Corporation of India 31/Mar/16 0.1 25.4 2.6 FII 6.6 5.7 5.4 6.3 5.9 3 Aberdeen Asset Management (Asia) Ltd. 31-Dec-14 0.0 7.0 -7.9 DII 7.4 8.1 8.4 7.6 7.9 4 The Vanguard Group, Inc. 31/Mar/16 0.0 3.4 0.0 Others 15.0 15.2 15.1 15.1 15.2 5 Reliance Capital Asset Management Ltd. 31-Mar-16 0.0 2.4 0.0 6 Matthews International Capital Management, L.L.C. 31/Dec/15 0.0 2.3 0.0 7 ICICI Prudential Asset Management Co. Ltd. 31-Mar-16 0.0 1.9 0.3 8 Nomura Asset Management Co., Ltd. 31/Oct/15 0.0 1.7 0.0 9 Sundaram Asset Management Company Limited 29-Feb-16 0.0 1.7 0.0 10 Jupiter Asset Management Ltd. 31/Dec/15 0.0 1.4 0.0

Source: Reuters, ICICIdirect.com Research

Recent Activity Investor name Investor name Investor name Value (m) Shares (m) Investor name Value (m) Shares (m) Life Insurance Corporation of India 14.54 2.58 Eastspring Investments (Singapore) Limited -1.99 -0.30 ICICI Prudential Asset Management Co. Ltd. 1.73 0.31 Baroda Pioneer Asset Management Company Limited -0.61 -0.11 UTI Asset Management Co. Ltd. 0.79 0.14 India Infoline Asset Management Company Limited -0.32 -0.06 J.P. Morgan Asset Management (Hong Kong) Ltd. 0.62 0.09 Birla Sun Life Asset Management Company Ltd. -0.32 -0.06 Harding Loevner LP 0.50 0.09 Motilal Oswal Asset Management Company Ltd. -0.30 -0.04

Source: Reuters, ICICIdirect.com Research

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Financial summary

Profit and loss statement | Crore Cash flow statement | Crore (Year-end December) CY14 CY15 CY16E CY17E (Year-end December) CY14 CY15 CY16E CY17E Revenue 3392.3 3298.0 3467.4 3683.7 Profit after Tax 474.5 615.2 685.3 737.0 Growth (%) 6.7 -2.8 5.1 6.2 Less: Dividend Paid 439.9 536.4 636.5 694.4 (Inc.)/(Dec.) in stock in trade 16.8 14.8 -7.8 0.0 Add: Depreciation 36.1 39.0 35.7 37.6 Raw material Costs 1760.5 1388.4 1465.6 1553.1 Add: Others 0.0 0.0 0.0 0.0 Purchase of Products 160.2 197.6 148.9 142.1 Cash Profit 61.9 129.7 84.5 80.3 Employee Costs 161.6 176.6 191.9 207.3 Increase/(Decrease) in CL 131.5 91.0 34.1 77.8 Other Expenditure 576.5 625.8 652.9 688.9 (Increase)/Decrease in CA -18.3 80.9 -95.9 -49.1 Op. Expenditure 2,675.6 2,403.2 2,451.5 2,591.4 CF from Operating Activities 175.0 301.5 22.7 108.9 EBITDA 716.7 894.8 1015.9 1092.3 Purchase of Fixed Assets 48.5 36.5 14.6 15.0

Growth (%) 4.2 24.9 13.5 7.5 (Inc)/Dec in Investments 0.0 0.0 0.0 0.0 Depreciation 36.1 39.0 35.7 37.6 Others 1.0 2.0 3.0 3.0 EBIT 680.6 855.8 980.3 1054.7 CF from Investing Activities -48.5 -36.5 -14.6 -15.0 Interest 2.4 0.8 1.9 2.0 Inc/(Dec) in Loan Funds 0.0 0.0 0.0 0.0 Other Income 48.1 95.9 63.7 64.0 Inc/(Dec) in Sh. Cap. & Res. -289.3 0.1 -0.1 0.0 PBT 726.3 950.9 1042.1 1116.7 Others 0.0 0.0 0.0 0.0 Growth (%) -4.7 30.9 9.6 7.2 CF from financing activities -289.3 0.1 -0.1 0.0 Tax 251.8 335.7 356.7 379.7 Change in cash Eq. -162.8 265.1 8.1 93.9 Reported PAT 474.5 615.2 685.3 737.0 Op. Cash and cash Eq. 594.2 431.5 696.5 704.6 Growth (%) -6.7 29.7 11.4 7.5 Cl. Cash and cash Eq. 431.5 696.5 704.6 798.5

EPS 9.6 12.4 13.9 14.9 Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

Balance sheet | Crore Key ratios

(Year-end December) CY14 CY15 CY16E CY17E (Year-end December) CY14 CY15 CY16E CY17E Source of Funds Per share data (|) Equity Capital 247.3 247.3 247.3 247.3 Book Value 10.0 11.6 12.6 13.5 Preference capital 0.0 0.0 0.0 0.0 Cash per share 8.7 14.1 14.2 16.1 Reserves & Surplus 249.5 328.3 377.1 419.8 EPS 9.6 12.4 13.9 14.9 Shareholder's Fund 496.8 575.6 624.4 667.0 Cash EPS 10.3 13.2 14.6 15.7 Loan Funds 0.0 0.0 0.0 0.0 DPS 9.0 10.0 11.0 12.0 Deferred Tax Liability -61.8 -49.9 -49.9 -49.9 Profitability & Operating Ratios Minority Interest 0.0 0.0 0.0 0.0 EBITDA Margin (%) 21.1 27.1 29.3 29.7 Source of Funds 435.0 525.7 574.5 617.1 PAT Margin (%) 14.0 18.7 19.8 20.0 Fixed Asset Turnover (x) 18.1 17.8 21.1 26.0

Application of Funds Inventory Turnover (Days) 39.3 33.7 39.0 39.0 Gross Block 376.2 391.5 406.5 421.5 Debtor (Days) 29.2 26.2 27.0 27.0 Less: Acc. Depreciation 204.1 242.7 278.8 316.4 Current Liabilities (Days) 74.1 78.6 74.0 74.0 Net Block 172.1 148.8 127.7 105.1 Return Ratios (%) Capital WIP 15.7 36.4 36.4 36.4 RoE 95.5 106.9 109.8 110.5 Total Fixed Assets 187.7 185.3 164.1 141.6 RoCE 137.0 148.7 157.0 158.1 Investments 0.0 0.0 0.0 0.0 RoIC 1,041.8 NA NA NA Inventories 365.5 304.6 370.5 393.6 Valuation Ratios (x) Debtor 271.5 236.5 256.5 272.5 PE 43.2 33.3 29.9 27.8 Cash 431.5 696.5 704.6 798.5 Price to Book Value 41.2 35.6 32.8 30.7 Loan & Advance, Other CA 173.9 188.9 198.9 208.9 EV/EBITDA 28.0 22.1 19.5 18.0 Total Current assets 1242.3 1426.5 1530.4 1673.5 EV/Sales 5.9 6.0 5.7 5.3

Current Liabilities 688.2 710.2 703.0 746.8 Leverage & Solvency Ratios Provisions 306.8 375.8 417.2 451.1 Debt to equity (x) 0.0 0.0 0.0 0.0 Total CL and Provisions 995.1 1086.0 1120.1 1197.9 Interest Coverage (x) 283.6 1,069.8 515.9 527.4 Net Working Capital 247.2 340.4 410.3 475.6 Debt to EBITDA (x) 0.0 0.0 0.0 0.0 Miscellaneous expense 0.0 0.0 0.0 0.0 Current Ratio 1.2 1.3 1.4 1.4 Application of Funds 435.0 525.7 574.5 617.1 Quick ratio 0.9 1.0 1.0 1.1

Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

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ICICIdirect.com coverage universe (Oil & Gas)

CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company (|) TP(|) Rating (| Cr) FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E Aban Offshore (ABALLO) 210 145 Sell 1,213 88.7 2.2 26.7 95.1 7.9 6.4 8.1 7.3 6.9 6.0 6.6 6.8 0.3 2.9 3.4 Bharat Petroleum (BHAPET) 952 870 Buy 68,837 70.3 86.6 80.2 17.0 13.5 11.0 10.9 9.7 8.4 14.6 16.2 18.5 20.6 22.3 23.3 Cairn India (CAIIND) 137 140 Hold 25,984 23.9 -50.6 7.8 2.1 5.7 -2.7 1.8 2.9 7.0 19.8 10.1 0.4 21.6 7.6 -19.4 Castrol India (CASIND) 414 460 Buy 22,750 9.6 12.4 13.9 43.2 33.3 29.9 28.0 22.1 19.5 137.0 148.7 157.0 95.5 106.9 109.8 GAIL (India) (GAIL) 364 400 Buy 46,173 34.5 24.0 17.1 10.6 15.2 21.3 8.3 11.6 12.9 15.1 9.6 7.4 16.2 10.4 7.1 Gujarat Gas (GUJGAS) 538 520 Hold 7,407 2.1 32.2 10.8 260.5 16.7 49.7 18.7 9.4 14.2 5.7 16.6 9.7 1.7 22.3 7.2 Gujarat State Petronet (GSPL) 138 152 Buy 7,769 7.9 10.8 10.9 17.5 12.7 12.7 10.0 7.6 7.5 13.9 17.6 16.4 11.2 13.6 12.2 Gulf Oil Lubricants (GULO) 522 575 Buy 2,588 NA 15.6 20.0 NA 33.4 26.2 NA 20.3 16.4 NA 30.9 34.4 NA 41.4 39.8 Hindustan Petroleum (HINPET) 823 820 Buy 27,901 51.1 80.6 94.8 16.1 10.2 8.7 12.6 8.5 6.4 5.8 10.2 12.2 11.5 17.1 17.8 Indian Oil Corporation (INDOIL) 407 425 Buy 98,818 28.9 21.7 47.9 14.1 18.7 8.5 6.3 9.7 4.7 6.3 4.6 12.6 10.6 7.8 15.4 Indraprastha Gas (INDGAS) 567 595 Buy 7,938 25.7 31.3 30.7 22.0 18.1 18.5 10.2 9.9 9.5 27.0 28.7 26.1 20.4 20.9 17.8 Mangalore Refinery (MRPL) 70 72 Buy 12,269 3.4 -9.8 3.3 20.4 -7.2 21.4 10.3 -5.3 14.0 2.0 -17.9 5.3 8.5 -32.3 9.8 Oil India Limited (OILIND) 327 337 Hold 19,657 49.6 41.7 32.5 6.6 7.8 10.1 4.4 5.5 4.9 9.4 9.4 7.5 14.4 11.7 8.8 ONGC (ONGC) 213 200 Hold 183,945 31.0 21.4 12.7 6.9 10.0 16.9 3.3 3.8 5.1 15.2 10.5 7.9 15.5 9.8 6.0 Petronet LNG (PETLNG) 281 275 Buy 21,075 9.5 11.8 12.4 29.6 23.9 22.7 15.4 16.2 14.7 14.5 13.5 14.2 14.3 15.5 14.7 Source: Company, ICICIdirect.com Research

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RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey Head – Research [email protected]

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Disclaimer

ANALYST CERTIFICATION We /I, Mayur Matani, MBA and Harshal Mehta, MTech 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. Terms & conditions and other disclosures:

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It is confirmed that Mayur Matani, MBA and Harshal Mehta, MTech, research analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

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