“Avoid” To CSB Aggressively Priced Nov 21 2019

Salient features of the IPO: • CSB Bank Limited (CSB), incorporated on Nov 20’ 1920, is one of the Recommendation Avoid oldest private sector in India • The bank offering a wide range of products and services to overall Price Band (per share) Rs193-195 customer base of 1.3 million as on Sep 30, 2019, with particular focus on SME, Retail, and NRI customers. Face Value Rs10 • As of H1FY20, business size of the bank stood at Rs268 bn.

Valuation : At the higher price band of Rs195, CSB’s share is valued at Shares for fresh issue 1.2 mn P/ABV multiple of 2.4(x) (to its post issue Sep’19 adjusted BVPS). Shares for OFS 19.8 mn Below are few key observations of the issue: Fresh issue size Rs240 mn • While the operations expanded to 16 states and four union territories, business of the bank is much skewed towards Kerala as Total Issue Size 267 branches out of 412 (~65%) are located in this particular state. Rs4,096.8 mn Thereby CSB, (erstwhile known as the Catholic Syrian Bank Ltd.) is a (on Higher Price Band) South India based regional bank. Bidding Date Nov 22, 2019 - Nov 26, 2019

• New mgmt, which came in 2016, is currently implementing strategic changes in business model to function efficiently. Since then, the MCAP on Higher Price Rs33,823.9 mn bank has been focusing more on gold and SME loans which are high Band yielding and comparatively less risky. High exposure to gold loans and decline in slippage turned bank into the profit in H1FY20.

• Advances book stood at Rs113 bn as of H1FY20, out of which gold (Rs37.8 bn) and SME (Rs33.6 bn) accounted for 63% of book. NIM Book Running Lead Axis Capital Limited, IIFL improved to 2.8% in FY19 and 3.43% in H1FY20 mainly driven by Manager Securities Ltd. expansion in gold loan book having yield of ~12.5%. While the mgmt emphasized more on gold and SME loans and also stated continued focus on these segments, low yielding high risky wholesale advances grew by a CAGR of 52.2% during FY17-19 compared to (-) 0.9% CAGR in SME. Thereby, we expect NIM will be remained checked. Registrar Link Intime India Private Limited

• Avg. ticket size of gold loan is Rs60,000 which attracts the risk weight of 50%. The mgmt strategically choose to focus on gold loans Industry Banking given the capital constraints. After Rs12 bn capital infusion by Fairfax India through FIHM in FY19 & Q2FY20, CAR surged to 22.8% which the mgmt consider enough to sustain growth for the next three years. Allocation detail • Share of CASA stood at 28.2% by H1FY20 in line with the other regional peers. Meanwhile, it would remain difficult for mgmt to Qualified Institutional Investors (QIBs) 75% increase the share to 40% given the larger share of branches to one particular state. C/I ratio stood at 71.5% in H1FY20, while it Non Institutional Investors (NII) 15% remained way higher than industry peers, the mgmt emphasized to reduce it to industry level through reducing employee costs. Retail Individual Investors (RII) 10%

• CSB is the regional bank because 65% of the total branches is located in Kerala state making the business sensitive to a one Pre and post issue shareholding pattern particular state. Regional banks remains unable to derive higher Pre - Issue Post – Issue valuation due to constrained business activity like low CASA ratio, weak margin & fee income growth and higher risk if some Promoter and Promoter 50.1% 49.7% unforeseen events like natural calamities happens to business Group dominant state. Exceptional is driving higher valuation (P/ABV of 3x) which is justified by its strong profitability Non- promoter 49.9% 50.3% trend, higher margin and above 15% of RoE. In case of CSB Bank, it Total 100.0% 100.0% is too early to assume higher valuation (>2P/ABVx) with post issue FY20E RoE of ~6.8%. Retail Application Money at Higher Cut-Off Price per Lot • Improvement in business performance has been mainly driven by gold loans while the SME book witnessed contraction. Though gold loan book grew by a CAGR of 28.3% in FY17-FY19, it is difficult to Number of Shares per Lot 75 sustain such high growth because of high competition in gold financing segment particular in south India where the old age Application Money Rs14,625 players like Muthoot Finance and Manappuram Finance among others are active at their full capacity. GNPA/NNPA reduced from Research Analyst 7.25%/4.12% in FY17 to 2.86%/ 1.96% in H1FY20. Below BBB rated SME book stood at 59% and corporate at 27%, thus raising doubt Satish Kumar Sharma over stability in slippage trend. At the higher price band of 195/sh, the demanded valuation at Rs33,824 mn is valued at P/ABV multiple of 2.4(x) (to its post issue Sep’19 adjusted BVPS of Rs81), factoring Desk Phone - 022 - 6707 9999; Ext: 913 all positive developments. At 2.4x, CSB is valued premium to Karur Vysya Bank (1.0x), (0.5x), (1.4x). e mail: [email protected] Considering the above factors, we assign ‘Avoid’ rating to the issue.

© CHOICE INSTITUTIONAL RESEARCH1

About the issue:

• CSB is coming up with an initial public offering (IPO) with 1.2 mn shares as a fresh issue and 19.8 mn shares as offer • for sale (OFS). FIH Mauritius Investments Ltd, is the single largest shareholder in the bank. Post IPO, promoter holding will dip marginally to 49.7% from 50.1%. Promoter, Prem Watsa owned FIHM, is not selling stake in firm and marginal dilution in stake due to new equity raise.

• The issue will open on 22th Nov 2019 and close on 26th Nov 2019. Post allotment, shares will be listed on BSE and NSE.

• Not less than 75% of the issue will be allocated to qualified institutional buyers (QIB). Further, not more than 15% of the issue will be available for non-institutional bidders (NII) and not more than 10% for retail investors.

• Total issue size is Rs4,096.8 mn on higher price band out of which ~94% is OFS.

• Average cost of share acquisition of promoter is Rs140 per share.

• The company will receive Rs240 mn as a fresh issue . The company proposes to utilize the net proceeds from the fresh issue to augment bank’s Tier-I capital base to meet bank’s future capital requirements which are expected to arise out of growth to ensure compliance with Basel III and other RBI guidelines.

Pre and post issue shareholding pattern Pre - Issue Post - Issue Promoter and Promoter Group 50.1% 49.7% Public* 49.9% 50.3% Total 100.0% 100.0% * - Public includes employee trusts Source: Choice Broking Research, Company data, RHP

Offer Closes on Unblocking of Listing on Stock 26-Nov-2019 ASBA Account Exchanges 3-Dec-2019 4-Dec-2019 Offer Opens on Finalization of 22-Nov-2019 Basis of Credit to Demat Allotment Accounts 2-Dec-2019 3-Dec-2019

Source: Choice Broking Research, Company data, RHP

2 Company Introduction:

CSB Bank Limited (CSB), incorporated on Nov 20’ 1920, is one of the oldest private sector banks in India offering a wide range of products and services to overall customer base of 1.3 million (mn) as on Sep 30, 2019, with particular focus on SME, Retail, and NRI customers. While the business activities expanded to 16 states and four union territories, business is much skewed towards Kerala as 267 branches out of 412 (~65%) of bank located in this particular state. Thereby CSB, (erstwhile known as The Catholic Syrian Bank Ltd.) is a south based regional bank. Larger share of the remained branches includes Maharashtra, and Karnataka. Our of 412 branches, 267 branches located in semi-urban and rural region.

Business Overview:

As of H1FY20, business size of the bank stood at Rs268 bn. Advances book of the bank stood at Rs113 bn and deposits at Rs155 bn with credit-to-deposits (C/D) ratio at 72.8%. Advances book grew at a CAGR of 15.2% during FY17-FY19 as compared to 0.7% CAGR in deposits.

CSB has four principal business areas namely (a) SME banking, (b) , (c) wholesale banking, and (d) treasury operations.

Source: Choice Broking Research, Company data, RHP Under SME banking business, the bank caters to financial institutions, agriculture and allied businesses, and vendors and dealers of corporates through offer a wide range of products including term loans, working capital loans, invoice/bill discounting, letters of credit and bank guarantees. SME lending enables it to diversify credit risk due to relatively smaller individual exposures. On the other hand, SME business compared to other businesses offers higher yields, cross-selling, and associated business opportunities. Before extending SME loans, the bank conduct assessment of borrowers’ business, cash-flows, repayment capacity and security mainly tangible security. As on Sep 30, 2019, the SME loan book of CSB was Rs33.6 bn which accounts for around 29.5% of the advances book spreading across 7,534 accounts, implying an average ticket size of approximately Rs4.5 mn, respectively. Compared to SME book of Rs35.4 bn, the growth has contracted in subsequent years due to cautious lending approach in difficult macro environment post demonetization and GST implementation and focus on low risk weighted products due to capital constraint and improving quality of SME exposures by lending to SMEs with higher credit rating.

Under retail banking business, the bank offers a wide range of loan and deposit products to retail and NRI customers. Retail lending products include gold loans, vehicle loans including two wheeler loans, loans against properties, personal loans, housing loans, agricultural loans, and education loans. Retail loans accounts for around 46.2% of the book by H1FY20 mainly driven by the gold loans. Gold loans advances grew at a CAGR of 28.3% over FY17-FY19 and by H1FY20, it stood at 33.2% (Rs37.8 mn) of the advances book and thus remain a mainstay product for the bank on the retail advances side. Avg. ticket size of gold loan is Rs60,000.

3 Business Overview:

On deposits front, CASA stood at 28.2% of total deposits by H1FY20. As of Mar’31 2019, CASA constituted 27.8% and retail deposits constituted 93.7% of total term deposits, and these deposits have consistently exhibited renewal patterns of above 90%. NRI deposits constituted 24.6% of total deposits as on Sep 30, 2019 (H1FY20).

Under wholesale banking business, the bank caters to large and mid-size corporates and other business entities (with credit requirement of Rs 250 million and above). Wholesale banking advances accounted for 24.3% as on Sep 30, 2019.

Treasury operations primarily consist of statutory reserves management, asset liability management, liquidity management, investment and trading of securities, and money market and foreign exchange activities. The profits generated from the sale of investments (net) were Rs80.1 mn and Rs129.6 mn as on March 31, 2019, and Sep 30, 2019, respectively.

In order to generate strong fee income, the bank distributes life insurance products of Edelweiss Tokio Life Insurance Company Limited, HDFC Life Insurance Company, and ICICI Prudential Life Insurance Company Limited, and general insurance products of ICICI Lombard General Insurance Company Limited and Reliance General Insurance Company Limited.

Source: Choice Broking Research, Company data, RHP

3 Financial Performance

In recent years, growth was constrained by low capital adequacy and higher operating costs, which adversely impacted our financial performance. However, in last three Fiscals from FY17 to FY19, the bank has improved its growth by focusing on better yield loan products with low risk and therefore, the surplus funds parked in investments were re-deployed to advances with particular focus on gold loans and corporate advances to entities with high credit ratings which have low risk weights to minimize capital consumption. The revamped operating strategy resulted in revival of growth with gradual improvement in profitability despite low capital adequacy and lead to turnaround in core operating profit (profit before provisioning and tax, excluding profit on sale of investments) from Rs -441.9 mn in FY17 to Rs53.5 mn in FY19. CSB turned into profit reporting PAT at Rs442.7 mn in H1FY20. C/D ratio increased from 53.6% in FY17 to 72.8% in H1FY20. Furthermore, effective risk weight of standard advances decreased from 52.6% as on FY17 to 40% as on H1FY20.

GNPA/NNPA reduced from 7.25%/4.12% in FY17 to 2.86%/ 1.96% in H1FY20 with the coverage ratio of 31.5% (excluding tech. write-off). Credit cost reduced from 1.57% in FY17 to 0.38% (annualized) in H1FY20. Capital adequacy ratio (CAR) rose from 10.9% in FY17 to 16.7% in FY19 and to 22.8% in H1FY20. Significant improvement in CAR was due to Rs12 bn investment by promoter FIH Mauritius Investments Ltd. The bank has received Rs7,207.5 mn in FY19 and the balance amount of Rs4,869.3 mn in Q2FY20 through preferential allotment of equity shares and warrants to FIHM. CSB’s CET 1 stood at 22.1% by H1FY20.

Particulars FY17 FY18 FY19 H1FY20 Net Interest Income 3,136.0 3,848.1 4,399.5 2,795.2 Net interest margin (NIM) (cal.) 2.1% 2.7% 2.8% 3.4% Other Income 2,812.0 1,254.2 1,359.2 844.2 Pre-Prov. Operating Profit 1,517.1 743.3 133.6 1,035.8 (PPOP) Adjusted PAT -579.9 -1,270.9 -656.9 442.7 RoA -0.7% -0.8% -0.4% 0.5% RoE -21.2% -28.2% -9.9% 6.8% Cost-to-income (C/I) 74.5% 85.4% 97.7% 71.5% Credit to Deposit (C/D) 53.7% 62.5% 70.2% 72.8% CASA (share) 24.8% 27.0% 27.8% 28.2% Equity / Assets 3.5% 2.3% 5.9% 8.9% GNPA 7.3% 7.9% 4.9% 2.9% NNPA 4.1% 2.9% 2.3% 2.0% Adjusted BVPS -3.1 -23.7 25.6 81.1

Source: Choice Broking Research, Company data, RHP

3

Source: Choice Broking Research, Company data, RHP Competitive Strengths:

• Strong channel network and trusted brand in South India • Strong capital base for growth • Well established SME business • Retail offering driven by strong gold loan portfolio • Stable and granular deposit base • Professional and experienced management with strong and independent board. • Streamlined risk management controls, policies and procedures

Business Strategy:

• Re-align organizational set-up for efficiently driving operations and business strategy • Rebranding with new name to address region and community related perceptional issues. • Business approach considering latest developments in banking sector • Focus on enhancing customer experience • Expand products suite, services, and customer interface as a full service bank • Grow asset business with focus on SME, agricultural and retail customers by leveraging capital position. • Continue to leverage strong deposits franchise.

Risk and Concerns:

• Prevailing economic slowdown impacting business prospective of banking industries. • Increasing competition for deposits accumulation, retail lending and credit to better rated corporates. • Weak historical track record of business performance. • Business skewed towards southern region.

6 Peer Comparison and Valuation:

CMP 12M M Cap P/ABV NIM GNPA Business PAT NNPA CAR RoA CASA Companies 6M R% RoE (%) C/I (%) C/D (%) (Rs/s) R% (Rs mn) (x) (%) (%) (Rs bn) TTM (%) (%) (%) (%) CSB Bank 195 - - 33,823.9 2.4 2.8% 2.9% 268 442.7 2.0% 22.8% 6.8% 0.5% 71.5% 72.8% 28.2% Karur Vysya Bank Ltd. 57 -28.1% -30.0% 45,560.1 1.0 3.5% 8.9% 1,093.1 2,174.7 4.5% 16.0% 3.3% 0.3% 49.0% 75.7% 30.0% RBL Bank Ltd. 333 -49.4% -40.0% 143,278.8 2.1 4.4% 2.6% 1,213.1 7,937.3 1.6% 11.9% 10.2% 0.9% 51.7% 93.1% 26.5% The Federal Bank Ltd. 83 -14.5% 4.5% 164,018.3 1.4 3.0% 3.1% 2,554.4 15,160. 1.6% 14.0% 11.0% 0.9% 50.8% 83.0% 31.6% The Jammu & Kashmir 31 -39.4% -23.8% 17,294.9 0.5 3.9% 8.5% 1,569.1 4,341.7 4.4% 11.8% 6.5% 0.4% 59.3% 76.4% 50.2% Bank Ltd. The Karnataka Bank 76 -35.7% -28.6% 21,465.0 0.5 2.8% 4.8% 1,236.6 4,834.7 3.5% 12.6% 8.1% 0.6% 52.1% 76.2% 27.4% Ltd. The South Indian 11 -21.9% -28.8% 19,508.6 0.6 2.7% 4.9% 1,459.4 3,121.0 3.5% 12.1% 5.6% 0.3% 53.6% 75.9% 24.9% Bank Ltd. City Union Bank Ltd. 207 5.2% 25.2% 152,203.0 3.3 4.0% 3.4% 732.1 7,323.9 1.9% 15.5% 14.1% 1.5% 41.4% 81.0% 24.7% DCB Bank Ltd. 183 -14.8% 16.2% 56,603.3 1.9 3.7% 2.1% 541.6 3,549.0 1.0% 16.2% 10.9% 1.0% 55.5% 84.5% 23.0%

CSB’s NIM was for FY19 and annualized ROE for FY20, while other items were H1FY20 Source: Choice Broking Research, Company data, RHP Below are few key observations of the issue:

• While the operations expanded to 16 states and four union territories, business is much skewed towards Kerala as 267 branches out of 412 (~65%) of bank are located in this particular state. Thereby CSB, (erstwhile known as the Catholic Syrian Bank Ltd.) is a south based regional bank.

• New mgmt, which came in 2016, is currently implementing strategic changes in business model to function efficiently. Since then, the bank has been focused more on gold and SME loan which are higher yielding and less risky. Increasing exposure to high yield loans and decline in slippage turned bank into the profit in H1FY20.

• Total advances book stood at Rs113 bn as of H1FY20, out of which gold (Rs37.8 bn) and SME (Rs33.6 bn) accounted for 63% of book. NIM improved to 2.8% in FY19 and 3.43% in H1FY20 mainly driven by expansion in gold loan book having yield of ~12.5%. While the mgmt emphasized more on gold and SME loans and also stated continued focus on these segment, low yielding high risky wholesale advances grew by a CAGR of 52.2% during FY17-19 compared to (-) 0.9% CAGR in SME. Thereby, we expect NIM to remain contained.

• Avg. ticket size of gold loan is Rs60,000 which attracts the risk weight of 50%. The mgmt strategically choose to focus on gold loans given the capital constraints. After Rs12 bn capital infusion by Fairfax India through FIHM, CAR surged to 22.8% which the mgmt consider enough to sustain growth for the next three years.

• Share of CASA stood at 28.2% by H1FY20 in line with the other regional peers. Meanwhile, it would remain difficult for mgmt to increase the share to 40% given the larger share of branches to one particular state. C/I ratio stood at 71.5% in H1FY20, while it remained way higher than industry peers, the mgmt emphasized to reduce it to industry level through reducing employee costs.

• CSB is the regional bank because 65% of the total branches is located in Kerala state making the business sensitive to a particular state Kerala. Regional banks remains unable to derive higher valuation due to constrained business activity like low CASA ratio, weak margin & fee income growth and higher risk if some unforeseen events like natural calamities happens to business dominant state. Exceptional is City Union Bank driving higher valuation (P/ABV of 3x) which is justified by its strong profitability trend, higher margin and above 15% of RoE. In case of CSB Bank, it is too early to assume higher valuation (>2P/ABVx) with post issue FY20E RoE of ~6.8%. • Improvement in business performance has been mainly driven by gold loans while the SME book witnessed contraction. While, gold loan book grew by a CAGR of 28.3% in FY17-FY19, it is difficult to sustain such high growth because of high competition in gold financing segment particular in south India where the old age players like Muthoot Finance and Manappuram Finance among others are active at their full capacity. GNPA/NNPA reduced from 7.25%/4.12% in FY17 to 2.86%/ 1.96% in H1FY20. Below BBB rated SME book stood at 59% and corporate at 27%, thus raising doubt over stability in slippage trend. At the higher price band of 195/sh, the demanded valuation at Rs33,824 mn is valued at P/ABV multiple of 2.4(x) (to its post issue Sep’19 adjusted BVPS of Rs81), factoring all positive developments over coming fiscals. At 2.4x, CSB is valued premium to Karur Vysya Bank (1.0x), Karnataka Bank (0.5x), Federal bank (1.4x).

Considering the above factors, we assign ‘Avoid’ rating to the issue. 7 Financial Statements (Rs mn)

Profit And Loss Statement Financial Ratios Particulars FY17 FY18 FY19 H1FY20 Particulars FY17 FY18 FY19 H1FY20 Interest Earned 13,363.0 12,968.1 13,475.2 7,323.0 Growth (%) 0.0% -3.0% 3.9% -45.7% Return / Profitability Ratios (%) Interest Expended 10,226.9 9,120.0 9,075.6 4,527.8 Net interest margin (NIM) (cal.) 2.1% 2.7% 2.8% 3.4% Growth (%) #DIV/0! -10.8% -0.5% -50.1% Yield on advances 11.0% 10.6% 9.8% 10.3% Net Interest Income 3,136.0 3,848.1 4,399.5 2,795.2 Yield on investments 7.2% 6.9% 8.6% 7.4% Net Interest Margin 2.1% 2.7% 2.8% 3.4% EPS (Diluted) (Rs) -3.3 -7.3 -3.8 5.1 Other Income 2,812.0 1,254.2 1,359.2 844.2 RoA -0.7% -0.8% -0.4% 0.5% % of Interest Income 21.0% 9.7% 10.1% 11.5% RoE -21.2% -28.2% -9.9% 6.8% Total Income 5,948.0 5,102.3 5,758.7 3,639.4 Growth (%) 0.0% -14.2% 12.9% -36.8% Cost of Deposits 6.7% 6.1% 5.8% 5.9% Operating ratios (%) Operating & Other expenses 4,430.9 4,359.0 5,625.1 2,603.6 Credit to Deposit (C/D) 53.7% 62.5% 70.2% 72.8% Pre-Prov. Operating Profit (PPOP) 1,517.1 743.3 133.6 1,035.8 P&C 2,521.6 2,692.2 1,109.7 346.4 Cost-to-income (C/I) 74.5% 85.4% 97.7% 71.5% P&C % of Advances 3.2% 2.9% 1.0% 0.3% CASA (share) 24.8% 27.0% 27.8% 28.2% Operating Profit before Tax -1,004.4 -1,948.9 -976.1 689.3 Investment / Deposit (I/D) 38.4% 27.8% 26.6% 27.8% Growth (%) #DIV/0! 94.0% -49.9% -170.6% Non interest income / Total income47.3% 24.6% 23.6% 23.2% Pre-tax Margin % -16.9% -38.2% -16.9% 18.9% Capitalization Ratios (%) Tax -424.5 -678.1 -319.2 246.6 Total capital adequacy ratio (Basel III)10.9% 8.3% 16.7% 22.8% % of PBT 42.3% 34.8% 32.7% 35.8% Equity / Assets 3.5% 2.3% 5.9% 8.9% Reported PAT -579.9 -1,270.9 -656.9 442.7 Net Profit Margin % -9.7% -24.9% -11.4% 12.2% Loans / Assets 50.7% 59.9% 64.5% 65.2% Extrodinary Income 0 0 0 0 Investments / Assets 36.3% 26.6% 24.5% 24.9% Adjusted PAT -579.9 -1,270.9 -656.9 442.7 Asset Quality ratios (%) Growth (%) 0.0% 119.2% -48.3% -167.4% GNPA 7.3% 7.9% 4.9% 2.9% Balance Sheet NNPA 4.1% 2.9% 2.3% 2.0% Particulars FY17 FY18 FY19 H1FY20 Coverage Ratio 43.2% 84.4% 53.4% 31.5% ASSETS Per Share Data (Rs) Cash with RBI and Banks 0.0 0.0 0.0 0.0 EPS (Diluted) -3.3 -7.3 -3.8 2.6 Investments 57,291.8 40,832.9 40,276.1 43,141.0 DPS 0.0 0.0 0.0 0.0 Advances 80,007.8 91,848.5 106,152.4 112,978.4 BVPS 31.5 20.4 56.2 88.6 Fixed assets 513.0 566.5 599.0 585.1 Other assets 7,776.1 7,947.3 7,770.8 8,366.6 Adjusted BVPS -3.1 -23.7 25.6 81.1 TOTAL ASSETS 157,700.3 153,346.6 164,534.6 173,232.6 Valuation ratios (x) CAPITAL AND LIABILITIES P/E (x) -58.3 -26.6 -51.5 76.4 Capital 810.1 810.1 859.7 1,722.8 P/BV (x) 6.2 9.6 3.5 2.2 Reserves and Surplus 4,651.3 2,726.3 8,880.2 13,637.1 P/ABV (x) -62.7 -8.2 7.6 2.4 Deposits 149,115.6 146,906.5 151,238.7 155,098.2 Growth ratios (%) Annualized Borrowings 418.0 418.0 0.0 0.0 Advances 14.8% 15.6% 18.0% Other liabilities and provisions 2,705.2 2,485.7 3,555.9 2,774.5 Deposits -1.5% 2.9% 12.0% TOTAL CAPITAL AND 157,700.3 153,346.6 164,534.6 173,232.6 LIABILITIES…...…… Net interest income 22.7% 14.3% 27.1% Interest Earned -3.0% 3.9% 8.7% PAT 119.2% -48.3%

Source: Choice Broking Research, Company data, RHP

9 Disclaimer This is solely for information of clients of Choice Broking and does not construe to be an investment advice. It is also not intended as an offer or solicitation for the purchase and sale of any financial instruments. Any action taken by you on the basis of the information contained herein is your responsibility alone and Choice Broking its subsidiaries or its employees or associates will not be liable in any manner for the consequences of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained in this recommendation, but Choice Broking or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this recommendation or any action taken on basis of this information. This report is based on the fundamental analysis with a view to forecast future price. The Research analysts for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Choice Broking has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Choice Broking makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. The opinions contained within the report are based upon publicly available information at the time of publication and are subject to change without notice. The information and any disclosures provided herein are in summary form and have been prepared for informational purposes. The recommendations and suggested price levels are intended purely for stock market investment purposes. The recommendations are valid for the day of the report and will remain valid till the target period. The information and any disclosures provided herein may be considered confidential. Any use, distribution, modification, copying, forwarding or disclosure by any person is strictly prohibited. The information and any disclosures provided herein do not constitute a solicitation or offer to purchase or sell any security or other financial product or instrument. The current performance may be unaudited. Past performance does not guarantee future returns. There can be no assurance that investments will achieve any targeted rates of return, and there is no guarantee against the loss of your entire investment. POTENTIAL CONFLICT OF INTEREST DISCLOSURE (as on date of report) Disclosure of interest statement – • Analyst interest of the stock /Instrument(s): - No. • Firm interest of the stock / Instrument (s): - No.

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