HDFC Bank Performance in Line; Outlook Brightens

HDFC Bank Performance In line; Outlook brightens

3R MATRIX + = - Summary We retain our Buy rating on the stock with a revised price target (PT) of Rs. 1,500. Right Sector (RS) ü HDFC Bank’s Q2FY2021 results were strong with operational performance in line with expectations, and asset quality improved on a q-o-q basis, results indicated a Right Quality (RQ) ü revert to normalcy. Management commentary was positive and indicated a bright long-term outlook. Right Valuation (RV) ü Collection trends were encouraging, with demand resolutions (collections efficiency) at ~95% in September 2020 and 97% in October 2020. + Positive = Neutral - Negative HDFC Bank currently trades at 2.9x/2.5x its FY2022E/FY2023E book value per share (BVPS). We have introduced FY2023E estimates in this note. We expect HDFC Bank’s business quality and franchise strength will help it tide over near-term challenges. Reco/View Change Reco: Buy  HDFC Bank’s Q2FY2021 results were strong with operational performance in line with expectations. Asset quality improved on a q-o-q basis. Result performance indicated CMP: Rs. 1,199 a revert to normalcy. Management commentary was positive and reassuring and indicated a bright long-term outlook. For Q1FY2021, net interest income (NII) was at Rs. Price Target: Rs. 1,500 á 15,776 crore, up 16.7% y-o-y (in line with expectations), while PAT stood at Rs. 7,513 crore, up 18.4% y-o-y (in line). Net interest margin (NIMs) came at 4.1% (down sequentially á Upgrade  Maintain â Downgrade but within the guidance range) due to excess balance sheet liquidity and lower loan yields. Collection trends were encouraging, with demand resolutions (collections efficiency) at ~95% in September 2020 and 97% in October 2020, reflective of HDFC Bank’s superior customer profile and robust collection mechanisms, which indicate a Company details positive revert to normalcy for the bank. Management commentary was encouraging, and the bank expects delinquency rates to not exceed the last peak of ~2%, and sees Market cap: Rs. 659,894 cr low quantum of restructuring. However, asset quality and profitability performance for subsidiaries were sub-par, reflecting weakness in the NBFC space. The bank indicates 52-week high/low: Rs. 1,304 / 739 a strong deal pipeline in the corporate segment and expects robust retail credit pickup, led by healthy disbursement trends. With management transition behind it, and going NSE volume: 160.4 lakh forward, the bank is looking to leverage technology/reach to gain market share across (No of shares) business lines, buoyed by better efficiencies and, thereby, deliver superior RoAs. We expect HDFC Bank’s business quality and franchise strength will help it tide over near- BSE code: 500180 term challenges. We have introduced FY2023E estimates in this note. We retain our Buy rating on the stock with a revised price target (PT) of Rs. 1,500. NSE code: HDFCBANK Key positives Free float: 433.9 cr (No of shares) The GNPA ratio declined by 28 bps q-o-q to 1.08% (mainly due to the Supreme Court’s stay on NPA classification) but, notably, even without the order, asset quality would have been stable on a sequential basis. CASA deposits improved to 41.6% for Q2FY2021 from 40.1% of total deposits in Shareholding (%) Q1FY2021. Promoters 21.1 Key negatives Net interest margin (NIM) declined sequentially, but was within the guidance range at FII 49.1 4.1%, helped by lower cost of funds and growth. DII 18.4 Our Call Valuation: HDFC Bank currently trades at 2.9x/2.5x its FY2022E/FY2023E book value per Others 11.3 share (BVPS), which we find is reasonable. We believe the bank’s consistency is buoyed by its robust underwriting capability and risk measurement standards, which provide support for valuations. We find management’s indication for healthy NIMs, and a structurally Price chart improving cost-income ratio encouraging, while the high provisioning buffer should provide support to asset quality and profitability. We have introduced FY2023E estimates with this 1500 note. We retain our Buy rating on the stock with a revised PT of Rs. 1,500. 1300 Key Risks 1100 An elongated phase of uncertainty due to intermittent lockdowns may impact growth, and rise in NPAs in unsecured and other retail segments can pose risks to profitability. 900 Valuations Rs cr

700 Particulars FY19 FY20 FY21E FY22E FY23E 20 19 20 20 - - - - Net interest income 48,243 56,186 69,271 79,025 88,953 Jun Oct Oct Feb (Rs. cr) Net profit (Rs. cr) 21,070 26,257 30,955 39,163 43,485 Price performance EPS (Rs.) 38.7 47.9 56.2 71.2 79.0 (%) 1m 3m 6m 12m PE (x) 31.0 25.0 21.3 16.9 15.2 Book value (Rs/share) 272.3 310.2 362.7 416.0 475.2 Absolute 10.7 9.2 31.8 10.1 P/BV (x) 4.4 3.9 3.3 2.9 2.5 Relative to 8.1 1.2 5.2 1.1 RoE (%) 16.5 16.4 16.7 18.2 17.7 Sensex RoA (%) 1.8 1.9 1.9 2.0 1.8 Sharekhan Research, Bloomberg Source: Company; Sharekhan estimates

October 16, 2020 2 Powered by the Sharekhan

3R Research Philosophy Update Stock

Asset-quality performance supported by conservative buffers: Management indicated that for the bank, collection efficiency is normalising at a fast pace. For the quarter, GNPA ratio declined by 28 bps q-o-q to 1.08% mainly due to the Supreme Court’s stay on NPA classification. However, if the bank had classified borrower accounts as NPA after August 31, 2020, and adopted an early recognition of NPA using its analytical models (proforma approach), proforma gross NPA would have been 1.37% (flat on a sequential basis) and proforma NNPA would have been 0.35%. Pending disposal of the matter, the bank has made contingent provision in respect of these accounts. Hence, the bank provided Rs. 2,300 crore on-unrecognised NPAs, including Rs. 1,170 crore additional contingent provisions to shore up COVID-19- related provisioning buffer. The bank now carries cumulative provisions of 0.7% of loans (floating provision of Rs. 1,451 crore and contingent provisions of Rs. 6,304 crore). The bank’s strong collection mechanism and superior customer profile has helped in seeing a faster revert to normalising of business indicated in resolution rates of 95% in September 2020 and 97% in October 2020 as compared to pre-COVID levels. However, overall asset quality trend in its NBFC subsidiary, HDB Fin Services, remains sub-par, with GNPA ratio rising to 4.5% (versus 3.4% in Q2FY2020). Conference Call Highlights Fee Income: Fee income was impacted by Rs. 700 crore mainly due to lower loan originations, lower disbursements, and lower sales due to the pandemic. FX income was higher sequentially due to pick up in activities. Recoveries were impacted by Rs. 100 crore. Network: The bank added 176 branches during the quarter. Management plans 100 more to be opened in the next quarter, while another 100 to be added by the end of FY2021E. Staff costs increased slightly, however attrition during the quarter was low. Other business update: Strong sequential CASA traction and CD ratio stood at 84% for the quarter. High levels of LCR maintained. Around 22bps/56bps of net capital was generated during Q2FY2021/ H1FY2021, respectively. Internal capital generation is sufficient to manage capital requirements. The bank had managed to mobilise 1.8 million new liability relationships acquired in Q2 by leveraging digitisation efforts versus 1.2 million in Q1FY2021. Business Outlook: Q2 was better than Q1, and the bank saw lot of microlevel indicators and other macro level data such as vehicle sales improving, which also depict a buoyant economy. Despite reported job losses, the bank sees it mostly concentrated in certain stressed sectors, maintains that the large corporates to which HDFC Bank has exposure to, have not reported job losses. Asset quality and provisions: Due to Supreme Court’s order, accounts were not classified as NPA during the quarter. However, the bank has prepared proforma basis NPAs. Inclusive of potential slippages, GNPA ratio would have stood at 1.37% versus 1.36 % in the last quarter. Agri GNPAs were at 1.2% on a proforma basis and the bank has made contingent provisions of Rs. 1,100 crore on the same. Specific Provisions: Specific provisions would have been higher by Rs. 1,130 crore on a proforma basis. Contingent provisions of Rs. 2,300 crore include incremental specific provisions as above and Rs. 1,170 crore to strengthen the balance sheet. Reported specific credit costs stood at 47 bps, while on a proforma basis credit cost stood at 91 bps. There were no tech w/offs in the quarter. Recoveries stood at 26bps, or 70bps, on a proforma basis. Wholesale Business: Wholesale business is performing better than last quarter. Management remains optimistic about a-cyclical recovery. The government’s push will help discretionary spending. Wholesale collections were higher by 14% y-o-y in September, 41% q-o-q and flat y-o-y. Seeing good OD utilisation for inventory build-up etc. ahead of the festive season. The bank added ~1,550 new customers (is ~3x of Q1) during Q2FY2021. Disbursements were 6.5x of Q1 volumes (> Rs. 50 billion). Corporate Banking: Corporate banking saw strong growth, and growth came largely from the top half of the 10-point internal rating system of the bank. Around ~75% of the incremental growth in disbursements and rollovers were of less than one-year tenor/maturity.

October 16, 2020 3 Powered by the Sharekhan

3R Research Philosophy Update Stock

Business Banking: The business banking segment saw high single-digit sequential growth, while the healthcare business (infra, equipment, etc.) also had high single-digit sequential growth. CASA growth for these businesses was strong as well. Growth: Growth is a result of shift in market share and the bank has performed better due to a highly institutionalised sales process and focus on credit quality. Yields: Due to improved yield management and decline in cost of funds, the bank has managed its margins and NIMs within its guidance range. The bank is seeing higher instances of prepayments by the well-placed corporate clients. New initiatives: HDFC Bank is working on building a digital healthcare network with Apollo hospital group – ~1.21 lakh customers have signed up in the last nine days. Retail Business: The retail business is seeing step up in card biz – both on merchant and customer side at 97% of last year levels. The bank launched festive streak 2.0 – a 45-day long sales season. Offerings this time around are far higher than last year. Retail assets got hit during Q1, but recent trends show signs of recovery, currently at 82%-85% of levels of previous year. On an overall basis, the bank is seeing double- digit m-o-m growth since July. The bank is seeing five trends driving the economy and business at the ground level in infrastructure, rural and semi urban digital transformation, supply chain and healthcare segments. Post COVID, bank cautious on micro loans: There is a clear distinction between entrepreneurs who have been able to stay ahead of the curve by taking advantage of digital channels and provide value-added services for their customers. Using this insight to enter the micro segment – while the bank has been cautious of micro loans but expect full recovery in the next few months. For the unsecured PL segment, the bank is looking to highly digitize open market acquisitions. Auto and Home Loans: Auto and home loan inquiries are seeing higher volumes. Double-digit growth in government business and in rural and semi urban secured as well unsecured business. The bank is also witnessing a surge in gold loans, LAP, retail working capital loans are already at pre COVID levels. The 2W business is also seeing recovery based on strong rural demand. Rural tractor sales have been at a high due to good monsoons and water storage levels. Moreover, Kharif crop planting at a high as well – will give a boost to the sector. The bank is stepping up its digital offering in auto loans called ‘Auto First’ for 2W and 4W loan, which will be available to all customers (New as well as existing). HDFC Bank is looking to transform automotive financing journey in India in the next five years. Wholesale risks: Most of the growth has been from existing customers, with no dilution of credit standards. The internal rating scale has been averaging 4.4 points for the last quarter – which corresponds to an AA rating. There has been a marginal decline from the past few quarters, however this is an extremely safe average customer profile. ~75% of externally rated exposures are AAA/AA, and ~93% is rated A and above. Unsecured Lending: Unsecured exposures are being kept at a steady average of 3.5 versus secured portfolio’s rating of 3.0 – however, at present, the bank expects there is a ~50% lower probability of default between the two ratings and, thus, the unsecured portfolio remains at a higher rating than the overall portfolio as well as the overall secured portfolio. SME portfolio: Earlier, the bank had declared ~9% of loans as high stress in Q4FY2020 as per its stress tests. This has turned out to be a conservative number and has not turned into NPA. As of October, under the 30DPD counter, the bank identified relationships that could be in stress, based on which the percentage is now down to ~3% levels. These accounts have been looked at individually and there are good prospects of recoveries. Promoter savings have also been observed to go up. ECLGS Scheme: FITL that has been provided will probably be availed and ECLGS scheme has also been a breather for the SME segment. For the portion of the portfolio, which will not fall under the restructuring scheme, the bank will be willing to offer some restructuring plan to these customers outside the scheme. Retail portfolio: The bank is seeing a mean reversion to asset quality post the moratorium, indicating a healthy recovery in activities. In the retail portfolio now that moratorium, is over – in the last two months,

October 16, 2020 4 Powered by the Sharekhan

3R Research Philosophy Update Stock

the bank has been focused on demand resolution. While September saw demand resolution of 94%, it was ~97% in October as against pre-COVID level of 99% and the bank expects the gap to be covered in the next few months. Non-morat demand resolution has been ~99%. SMA in retail book is negligible. Asset quality and recovery: Loan resolutions for Auto and 3W have reverted to normal in most areas, except in a few pockets. The bank is well placed on the PL portfolio and continues to see increasing traction. Business loans and CV policies, however, remain tight. Agri portfolio has been doing very well, except for some logistics issues due to local lockdowns. Recoveries are now higher than pre-COVID levels as well and the bank expects good recoveries going forward. Restructuring: Demand for restructuring is still below the internal estimations of the bank. The GECL scheme has been positive for SME loans, however the quantum is very small due to which small customers have not been very forthcoming. Margins Outlook: NIM pressure depends on how the bank deals with ALCO and pricing – usually operate between 4%-4.5% range – and the bank is now at the lower end versus 4.2% range for quite a few quarters. Bounce rates: Cheque bounce rates have been low and receiving better-than-expected response from customers in terms of deposits and collections except in a few pockets across the country. Festival traction: Festive treats have been running for the past two weeks and buoyancy has been good.

Results Rs cr Particulars Q2FY21 Q2FY20 YoY % Q1FY21 QoQ % Interest income 29,977.0 28,166.3 6.4 30,378.0 -1.3 Interest expense 14,200.6 14,651.2 -3.1 14,712.6 -3.5 Net interest income 15,776.4 13,515.0 16.7 15,665.4 0.7 Non-interest income 6,092.5 5,588.7 9.0 4,075.3 49.5 Net total income 21,868.8 19,103.8 14.5 19,740.7 10.8 Operating expenses 8,055.1 7,405.7 8.8 6,911.5 16.5 Pre-provisioning profit 13,813.8 11,698.1 18.1 12,829.3 7.7 Provisions 3,703.5 2,700.7 37.1 3,891.5 -4.8 Profit before tax 10,110.3 8,997.4 12.4 8,937.8 13.1 Tax 2,597.2 2,652.4 -2.1 2,279.0 14.0 Profit after tax 7,513.1 6,345.0 18.4 6,658.8 12.8 Asset Quality Gross NPAs 11,304.6 12,508.2 -9.6 13,773.5 -17.9 -Gross NPA (%) 1.08 1.36 -28 bps 1.36 -28 bps Net NPAs 1,756.1 3,791.0 -53.7 3,280.0 -46.5 -Net NPA (%) 0.17 0.42 -25 bps 0.33 -16 bps Key reported ratios (%) NIM (%) 4.1 4.2 -10 bps 4.3 -20 bps CASA (%) 41.6 39.3 230 bps 40.1 146 bps Source: Company; Sharekhan Research

October 16, 2020 5 Powered by the Sharekhan

3R Research Philosophy Update Stock

Outlook and Valuation n Sector View – Credit growth yet to pick up, private banks placed better Overall, at the system level aggregate Bank’s credit offtake is still tepid, with credit growth of 5.26% in the fortnight ended September 11, indicating a continued scenario of weak credit offtake. However, deposits rose by 11.98% (best since March 31, 2017) to Rs. 142.48 trillion, which indicates healthy deposit growth traction, helped by the accommodative stance of the RBI resulting in surplus liquidity, which provides succour in terms of lower cost of funds for banks and financials. Loan moratorium has duly ended, which is a relief; and going forward, the collection efficiency is likely to be a function of book quality, client profile as well as economic pickup. At present, we believe the banking sector is likely to see increased risk-off behaviour, with tactical market share gains for well-placed players. We believe private banks, with improved capitalisation and strong asset quality (with high coverage, provisions buffers) are structurally better placed to take-off once the situation normalises. n Company Outlook – Improved outlook We believe structural drivers are in place for HDFC Bank, helping it gain market share, aided by operational efficiencies and best-in-class asset quality. The top management succession has been a smooth affair, and now focus shifts back to business fundamentals. Going forward, we see outlook improving on credit cost and growth, even though challenges remain. However, the bank has built strong provision buffer, which work as strong bulwark against probable future risks. Notably, the franchise continues to be one of the best-managed and strongest business models and needs to be seen from a long- term perspective. Overall, the asset-quality picture looks sanguine, with its calibrated growth and strong underwriting and assessment capabilities and healthy digitalisation benefits adding to the moat of its business strength. HDFC Bank’s floating provision cushion of Rs. 1,450 crore and contingent provisions of Rs. 6,304 crore along with comfortable capitalisation levels (Tier-1 ratio at 17.7%) are additional positives. We believe HDFC Bank’s business quality and franchise strength will help it tide over near-term challenges. n Valuation - Maintain Buy with Price target of Rs 1500 HDFC Bank currently trades at 2.9x/2.5x its FY2022E/FY2023E book value per share (BVPS), which we find is reasonable. We believe the bank’s consistency is buoyed by its robust underwriting capability and risk measurement standards, which provide support for valuations. We find management’s indication for healthy NIMs, and a structurally improving cost-income ratio encouraging, while the high provisioning buffer should provide support to asset quality and profitability. We have introduced FY2023E estimates with this note. We retain our Buy rating on the stock with a revised PT of Rs. 1,500. One-year forward P/BV (x) Chart 5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0 15 16 17 18 19 14 20 15 16 17 18 19 20 15 16 17 18 19 20 15 16 17 18 19 20 14 15 15 16 16 17 17 18 18 19 19 20 ------Jun - Jun - Jun - Jun - Jun - Jun - Oct Oct Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Apr Feb Feb Feb Feb Feb Feb Dec Dec Dec Dec Dec Dec Aug Aug Aug Aug Aug Aug Std Dev 3-yr Avg +1 sd -1 sd Source: Sharekhan Research

Peer Comparison CMP P/BV(x) P/E(x) RoA (%) RoE (%) Particulars Rs/Share FY21E FY22E FY21E FY22E FY21E FY22E FY21E FY22E HDFC Bank 1,199 3.3 2.9 21.3 16.9 1.9 2.0 16.7 18.2 ICICI Bank 393 2.0 1.8 22.0 15.8 1.0 1.3 9.6 11.9 Axis Bank 471 1.5 1.3 20.1 11.9 0.7 1.1 7.6 11.7 Source: Company, Sharekhan research

October 16, 2020 6 Powered by the Sharekhan

3R Research Philosophy Update Stock

About company HDFC Bank is the largest private sector bank with a pan-India presence. The bank has been designated by the Reserve Bank of India (RBI) as a domestic systemically important bank (D-SIB), underlining its importance in the financial system. HDFC Bank caters to a wide range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side. The bank’s loan book is well balanced between retail and wholesale loans. As a business entity, HDFC Bank continues to deliver steady performance with well-maintained margins and conservative asset-quality performance.

Investment theme HDFC Bank is among the top performing banks in the country having strong presence in the retail segment with strong asset quality and best-in-class margins. Not only the bank, but its strong and marquee parentage enjoy arguably the strongest brand recall in the country, which is at a significant competitive advantage in the Indian banking space. Buoyed by a strong brand appeal, impressive corporate governance, and strong management team (consistency in performance and best-in-class granular clientele) has enabled HDFC bank to be a long-term wealth creator for investors, and the above factors still hold true. The bank continues to report consistent margins and advances growth over the years across various credit/interest rate cycles and has been able to maintain its asset quality too, which is indicative of the strong business franchise strength and leadership qualities. We believe the bank has a strong business model and is relatively well placed to tide over near-term challenges.

Key Risks An elongated phase of uncertainty due to intermittent lockdowns may impact growth; and rise in NPAs in unsecured and other retail segments can pose risks to profitability.

Additional Data

Key management personnel Mr Sashidhar Jagdishan Managing Director/CEO Mr Jimmy Tata Chief Risk Officer Mr Srinivasan Vaidyanathan Group Chief Financial Officer Mr Vinay Razdan Chief Human Resources Officer Mr Ashish Partharsarthy Treasurer Ms Ashima Bhat Head - Finance & Strategy Source: Company Website

Top 10 shareholders Sr. No. Holder Name Holding (%) 1 Capital Group Cos Inc/The 6.0 2 HDFC Investment Ltd. 5.5 3 SBI Funds Management Pvt. Ltd. 3.0 4 LIC 2.8 5 50 SBI ETF 2.7 6 FIL 1.4 7 ICICI PRUDENTIAL Life Insurance Co. Ltd. 1.0 8 Republic of Singapore 1.0 9 ICICI PRUDENTIAL Asset Management Co. Ltd. 1.0 10 Reliance Capital Trustee Co Ltd 0.9 Source: Bloomberg

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

October 16, 2020 7 Understanding the Sharekhan 3R Matrix Right Sector Positive Strong industry fundamentals (favorable demand-supply scenario, consistent industry growth), increasing investments, higher entry barrier, and favorable government policies Neutral Stagnancy in the industry growth due to macro factors and lower incremental investments by Government/private companies Negative Unable to recover from low in the stable economic environment, adverse government policies affecting the business fundamentals and global challenges (currency headwinds and unfavorable policies implemented by global industrial institutions) and any significant increase in commodity prices affecting profitability. Right Quality Positive Sector leader, Strong management bandwidth, Strong financial track-record, Healthy Balance sheet/cash flows, differentiated product/service portfolio and Good corporate governance. Neutral Macro slowdown affecting near term growth profile, Untoward events such as natural calamities resulting in near term uncertainty, Company specific events such as factory shutdown, lack of positive triggers/events in near term, raw material price movement turning unfavourable Negative Weakening growth trend led by led by external/internal factors, reshuffling of key management personal, questionable corporate governance, high commodity prices/weak realisation environment resulting in margin pressure and detoriating balance sheet Right Valuation Positive Strong earnings growth expectation and improving return ratios but valuations are trading at discount to industry leaders/historical average multiples, Expansion in valuation multiple due to expected outperformance amongst its peers and Industry up-cycle with conducive business environment. Neutral Trading at par to historical valuations and having limited scope of expansion in valuation multiples. Negative Trading at premium valuations but earnings outlook are weak; Emergence of roadblocks such as corporate governance issue, adverse government policies and bleak global macro environment etc warranting for lower than historical valuation multiple. Source: Sharekhan Research Know more about our products and services

For Private Circulation only

Disclaimer: This document has been prepared by Sharekhan Ltd. (SHAREKHAN) and is intended for use only by the person or entity to which it is addressed to. This Document may contain confidential and/or privileged material and is not for any type of circulation and any review, retransmission, or any other use is strictly prohibited. This Document is subject to changes without prior notice. This document does not constitute an offer to sell or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Though disseminated to all customers who are due to receive the same, not all customers may receive this report at the same time. SHAREKHAN will not treat recipients as customers by virtue of their receiving this report. The information contained herein is obtained from publicly available data or other sources believed to be reliable and SHAREKHAN has not independently verified the accuracy and completeness of the said data and hence it should not be relied upon as such. While we would endeavour to update the information herein on reasonable basis, SHAREKHAN, its subsidiaries and associated companies, their directors and employees (“SHAREKHAN and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or other reasons that may prevent SHAREKHAN and affiliates 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. Recipients of this report should also be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The user assumes the entire risk of any use made of this information. 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), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. We do not undertake to advise you as to any change of our views. Affiliates of Sharekhan may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report. This report 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 SHAREKHAN 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 certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. The analyst certifies that the analyst has not dealt or traded directly or indirectly in securities of the company and that all of the views expressed in this document accurately reflect his or her personal views about the subject company or companies and its or their securities and do not necessarily reflect those of SHAREKHAN. The analyst further certifies that neither he or its associates or his relatives has any direct or indirect financial interest nor have actual or beneficial ownership of 1% or more in the securities of the company at the end of the month immediately preceding the date of publication of the research report nor have any material conflict of interest nor has served as officer, director or employee or engaged in market making activity of the company. Further, the analyst has also not been a part of the team which has managed or co-managed the public offerings of the company and no part of the analyst’s compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this document. Sharekhan Limited or its associates or analysts have not received any compensation for investment banking, merchant banking, brokerage services or any compensation or other benefits from the subject company or from third party in the past twelve months in connection with the research report. Either SHAREKHAN or its affiliates or its directors or employees / representatives / clients or their relatives may have position(s), make market, act as principal or engage in transactions of purchase or sell of securities, from time to time or may be materially interested in any of the securities or related securities referred to in this report and they may have used the information set forth herein before publication. SHAREKHAN may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall SHAREKHAN, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind.

Compliance Officer: Mr. Joby John Meledan; Tel: 022-61150000; email id: [email protected]; For any queries or grievances kindly email [email protected] or contact: [email protected]

Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai – 400042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos.: BSE / NSE / MSEI (CASH / F&O / CD) / MCX - Commodity: INZ000171337; DP: NSDL/CDSL-IN-DP-365-2018; PMS: INP000005786; Mutual Fund: ARN 20669; Research Analyst: INH000006183;

Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and the T&C on www.sharekhan.com; Investment in securities market are subject to market risks, read all the related documents carefully before investing.