Pidilite Industries (PIDIND)
CMP: | 1859 Target: | 2035 (9%) Target Period: 12 months HOLD
May 14, 2021 Higher input cost weighs on margins…
Pidilite’s Q4FY21 gross margin came in lower by 455 bps YoY (down 400 bps QoQ) led by 30% YoY rise in average cost of vinyl acetate monomer Particulars (VAM). Spot VAM prices have further risen 66% from their Q4FY21 average sse cost. According to the company, VAM prices are expected to peak out from Particular Amount June 2021 onwards. Hence, gross margin pressure may continue in Q1FY22 Market Cap (| Crore) 94,400.0 also. However, to address the inflationary pressure, the company initiated Total Debt (FY21) (| Crore) 213.9 price hikes in May 2021 (took price hike in the range of 4-6%) in its adhesive Cash & Inv (FY21) (| Crore) 451.5 product portfolios. We believe Pidilite is well placed to partially pass on EV (| Crore) 93,986.0
52 week H/L 1928/ 1307 Update Result inflationary pressure and gain market share, especially in the lockdown Equity capital (| Crore) 50.8 scenario of supply disruptions given its strong market positioning. The Face value (|) 1.0
company will be a frontrunner in sales recovery (post ease in lockdown restrictions) given its strong brand, robust balance sheet position and nearly Price Performance unmatchable supply chain network in the industry. Hence, Pidilite’s annual 2500.0 20000.0 EBITDA margin guidance of 22-24% remains intact despite such big disruptions. The company is also looking to expand its product portfolio in 2000.0 15000.0 1500.0 newer category such as wood finishes and construction chemicals (water 10000.0 proofing) segment. We tweak our revenue, earning estimates marginally 1000.0 lower by ~7% and ~3%, respectively, for FY22E. 500.0 5000.0 0.0 0.0 Strong sales growth in Q4 led by C&B segment
Oct-18
Apr-21
Jan-20
Jun-20
Nov-20
Aug-19 Mar-19 Pidilite’s standalone sales increased 40% YoY in Q4 led by the same May-18 quantum of volume growth. Consumer & bazaar segment (80% of sales) Pidilite Nifty 50
revenue growth at 46% YoY was led by 45% of volume growth. The B2B sse
segment (rest 20%) sales also improved 26% YoY with same quantum of volume growth. The sales of newly acquired entity Pidilite Adhesive Pvt Ltd Key risk to our call (markets Araldite) doubled QoQ to ~ | 110 crore, with reported EBITDA Lower than expected growth in the margin of 31%, higher than company level EBITDA margin of 21%. C&B and B2B category, going To continue with capex despite near term headwinds forward. We estimate C&B and B2B
sales CAGR of ~18% and ~23%
Pidilite will continue with | 350 crore capex plans in FY22E despite short respectively Research Equity Retail
term demand headwinds. This is a strategic move to gain market share in – small towns/villages with population less than 50,000. The company has also Sharp fall in VAM and epoxy resin witnessed strong demand traction from alternate trade channels such as e- prices in the near term will result in commerce, modern trade and Pidilite ki Duniya (franchise model for end higher-than-expected EBITDA user connectivity). margin Valuation & Outlook
ICICI Securities Securities ICICI We build in revenue, earning CAGR of 19%, 20%, respectively, for FY20-23E Research Analyst marginally lower than our previous estimates factoring in the impact of lockdown and higher raw material cost. The stock is trading at 71x, 59x its Sanjay Manyal [email protected] FY22E, FY23E earnings, respectively. We believe its strong fundamentals justify its premium valuations. However, the recent price rally captures all Hitesh Taunk near term positives. We downgrade our rating on the stock from BUY to [email protected] HOLD with a revised target price of | 2035/share (earlier | 1920).
Key Financial Summary
s sf
| Crore FY19 FY20 FY21 FY22E FY23E (CAGR21-23E) Net sales 7078.0 7294.5 7292.7 8992.4 10392.1 19.4 EBITDA 1368.2 1576.0 1680.6 1977.4 2340.7 18.0 EBITDA Margin(%) 19.3 21.6 23.0 22.0 22.5 Net Profit 928.4 1122.1 1126.1 1336.1 1614.9 19.7 EPS (|) 18.3 22.1 22.2 26.3 31.8 P/E(x) 101.7 84.1 83.8 70.7 58.5 Price /book (x) 22.7 21.2 16.9 14.2 14.7 Mcap /sales (x) 13.3 12.9 12.9 10.5 9.1 RoE (%) 22.6 26.1 20.2 20.1 25.2 RoCE (%) 29.5 31.0 23.8 23.9 29.9
Source: Company, ICICI Direct Research Result Update | Pidilite Industries ICICI Direct Research
Exhibit 1: Variance Analysis Q4FY21 Q4FY21E Q4FY20 YoY (%) Q3FY21 QoQ (%) Comments Strong demand from urban regions along with consolidation of Revenue 2235.5 1875.6 1544.7 44.7 2299.0 -2.8 new business help drive revenue growth (excluding PAPL: sales growth was at 38% YoY) Other Income 17.3 16.6 14.0 24.1 20.4 -15.0 Higher raw mateial prices (average consumption cost of VAM Raw Material Exp 1099.6 890.9 689.5 59.5 1040.2 5.7 increased 30% YoY to US$1200/t) led decline in gross margins by ~100 bps YoY Employee Exp 262.7 263.5 213.1 23.3 260.3 0.9 Various cost optimisation measures help in savings in other Admin & Other exp 232.4 252.9 292.5 -20.5 309.0 -24.8 expenditure
Total Expenditure 1774.7 1471.6 1243.8 42.7 1658.2 7.0
EBITDA 460.8 404.0 300.9 53.1 640.8 -28.1 Savings in employee cost and other costs helped drive EBITDA EBITDA Margin (%) 20.6 21.5 19.5 113 bps 27.9 -726 bps margin on a YoY basis Depreciation 57.2 50.6 50.1 14.2 49.5 15.6 Interest 7.4 12.0 9.8 -24.0 12.1 -38.4 Exceptional items 3.6 0.0 33.0 0.0 NM PBT 409.9 357.9 222.0 84.6 599.7 -31.6 Total Tax 103.8 92.4 65.6 58.2 154.8 -33.0 Bottomline is mainly tracking sale growth and EBITDA margin PAT 307.4 266.2 156.5 96.4 446.4 -31.1 expansion Key Metrics On standalone basis, C&B segment volume & mix increased Consumer & Bazaar 1,730.3 1,374.0 1,124.4 53.9 1,848.9 -6.4 ~45.3% YoY on a lower base and strong demand in the urban regions B2B segment also witnessed recovery with volume growth of B2B 535.0 524.0 441.1 21.3 475.1 12.6 25.9% YoY Others 12.2 16.0 15.1 -19.5 12.2 0.0
Source: Company, ICICI Direct Research Exhibit 2: Change in estimates (| crore) FY22E FY23E Comments Old New % Chg Old New % Chg We revise our revenue estimates downward for FY22E by factoring in Revenue 9,147.9 8,992.4 (1.7) 10,404.0 10,392 (0.1) impact of lockdown in Q1FY22 EBITDA 2,090.4 1977.4 (5.4) 2,395.4 2340.7 (2.3) We marginally reduce our EBITDA margin estimate considering steep rise EBITDA Margin (%) 22.9 22.0 -91bps 23.0 22.5 -48bps in raw material prices PAT 1431.3 1336.1 (6.6) 1670.1 1614.9 (3.3) EPS (|) 28.2 26.3 (6.6) 32.9 31.8 (3.3)
Source: Company, ICICI Direct Research Exhibit 3: Assumptions Growth Assumption Earlier Comments FY20 FY21E FY22E FY23E FY22E FY23E We believe while short-term demand would largely be impacted by lockdown, the long term demand outlook for the company's key product portfolio Consumer & Bazaar (%) 2.9 4.2 19.9 15.6 29.3 13.8 (adhesive and construction chemical) remains intact. This, along with consolidation of new business (of PAPL) would help drive sale for the company, going forward Revenue growth would largely be driven by recovery in the manufacturing Business to Business (%) 3.8 -12.3 32.3 14.7 33.2 13.0 sector Others Growth (%) -14.9 -49.6 71.8 29.8 -15.8 27.3
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 2 Result Update | Pidilite Industries ICICI Direct Research
Conference call highlights Near term demand was hit by second wave of Covid-19 as ~75% of the country is in the midst of a lockdown. Pidilite’s revenue contribution from construction and project (C&P) is at ~25%. In the current lockdown several states have given exemption to construction activities. Hence, demand from this segment less likely to be impacted Spot price of VAM is hovering at US$2000/tonne from average consumption cost of US$1200 in Q4FY21 (vs. US$800 in Q3FY21, US$765 in Q2FY21, US$825 in Q1FY21 and US$925 in Q4FY20) The company has taken price hikes across product portfolios. In the adhesive segment price hike was in the range of 4-6% in May 2021. The company further plans to take price hikes in the coming months Strong growth witnessed across all major categories like adhesive, construction chemicals and DIY segments in Q4FY21 driven by continued demand momentum in both rural and urban geographies The company has 4800+ distributors in India. However, alternate trade channels like e-commerce, modern trade and Pidilite ki Duniya (PKD) have augmented Q4 growth. E-commerce sales recorded 4x growth. Modern trade sales grew 1.3x while PKD sales grew 1.3x during Q4FY21 On the products front, construction chemicals products continued to witness strong demand The company has added ~700 new stockists, 60,000 new outlets and 7000 new villages in FY21 Steep rise in raw material prices and supply chain disruption had a significant hit on unorganised players. This has benefited organised players like Pidilite in terms of market share gains due to its strong supply chain networks
Subsidiary business Overseas subsidiaries revenue increased 29% YoY in Q4FY21. Region wise revenue from Asia, Middle East and America increased by ~23.5%, ~21% and ~46%, respectively, during Q4FY21 Domestic subsidiaries revenue increased 23.5% to | 192 crore in Q4FY21. Pidilite Adhesive Pvt Ltd reported Q4FY21 revenue of | 109.6 crore and 32% of EBITDA margin
Others Despite sporadic lockdowns, the company will continue its capex plans of | 350 crore Pidilite believes raw material prices will peak from June-July 2021. It is aiming at annual EBITDA margin in the range of 22-24% Pidilite will leverage its existing dealer network to promote Araldite and targets a strong revenue from this segment, going forward
ICICI Securities | Retail Research 3 Result Update | Pidilite Industries ICICI Direct Research
Financial story in charts
Exhibit 4: Growth trend in C&B business Exhibit 5: Growth trend in B2B business segment 9,000 3,000.0 8,000 CAGR ~18% CAGR ~ 23% 2,500.0 7,000 CAGR ~6%
6,000 8,051 2,000.0 6,964 6,964
5,000 2,389.9
1,500.0
5,809 5,809 2,084.5 2,084.5
4,000 5,574
5,419 5,419
5,274 5,274
| in crore |
5,132 5,132
| in crores in |
1,796.8 1,796.8 4,805 4,805
3,000 1,000.0 1,730.2 1,575.4 1,575.4 2,000 4,023
3,513 3,513 500.0
994.8 994.8
963.4 963.4 946.0 946.0
1,000 869.2 713.2 713.2
- -
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY14 FY15 FY16 FY17 FY18 FY19
FY22E FY23E FY20E FY21E FY22E FY23E FY21E Source: Company, ICICI Direct Research, FY13-FY18 figures are not as per new Source: Company, ICICI Direct Research * FY13-FY18 figures are not as per new classification classification
Exhibit 6: Consolidated sales growth trend Exhibit 7: EBITDA margin trend 12,000.0 2,500.0 25.0 CAGR ~19% 10,000.0 2,000.0 20.0
8,000.0 CAGR 7% 1,500.0 2,340.7 15.0
%
1,977.4 1,977.4
10,392.1 10,392.1 | crore |
8,992.4 8,992.4 1,000.0 10.0
6,000.0 1,680.6
1,576.0 1,576.0
1,368.2 1,368.2
1,341.2 1,341.2
| in crores in |
7,294.5 7,294.5 7,292.7 1,259.8 1,259.8 7,078.0 7,078.0 500.0 5.0
4,000.0 1,173.5
671.5 671.5 776.6
6,078.4 6,078.4 5,701.6 5,701.6 5,616.8 5,616.8 - -
2,000.0 4,820.4
4,260.6 4,260.6
FY15 FY16 FY17 FY18 FY19 FY20 FY21
- FY14
FY22E FY23E
EBIDTA EBIDTA Margin %
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
FY22E FY23E
Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research
Exhibit 8: PAT growth trend Exhibit 9: Return ratios trend 1,800.0 45.0 1,600.0 CAGR ~20% 40.0 1,400.0 35.0 CAGR ~17% 30.0
1,200.0 1,614.9 1,000.0 25.0
800.0 1,336.1 20.0
| in crore | 1,128.8 1,128.8
1,122.1 1,122.1 15.0 966.1 966.1
600.0 928.4 863.2 863.2
807.2 807.2 10.0 400.0
5.0 512.6 512.6 200.0 454.6 -
- FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
FY15 FY16 FY17 FY18 FY19 FY20 FY21
FY14 RoCE RoE
FY22E FY23E
es Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 4 Result Update | Pidilite Industries ICICI Direct Research
Financial summary
Exhibit 10: Profit and loss statement | crore Exhibit 11: Cash flow statement | crore (Year-end March) FY20 FY21 FY22E FY23E (Year-end March) FY20 FY21 FY22E FY23E Total Operating Income 7294.5 7292.7 8992.4 10392.1 Profit after Tax 1122.1 1126.1 1336.1 1614.9 Growth (%) 0.0 23.3 15.6 Depreciation 169.9 200.7 242.8 280.6 CF bef working cap chan 1326 1364 1611 1915 Raw Material Expenses 3402.5 3376.7 4340.2 4904.4 Net Inc in Current Assets -98.8 -550.2 -479.8 16.1 Employee Expenses 927.2 980.9 987.1 1105.4 Net Inc in Current Liab. 280.6 768.5 -9.7 355.1 Other Expenses 1388.7 928.6 1380.5 1669.6 Net CF from Op activities 1507.3 1582.3 1121.5 2286.3 Total Operating Expenditure 5718.5 5612.1 7014.9 8051.4 EBITDA 1,576.0 1,680.6 1,977.4 2,340.7 Growth (%) 6.6 17.7 18.4 (Purchase)/Sale of FA -547.2 -1746.5 -200.0 -250.0 Increase/decrease in other investment -70.2 127.0 -50.0 0.0 Other Income 149.4 79.4 77.9 112.0 Others 412.9 -233.3 -308.0 -108.0 Interest 33.6 37.2 32.1 19.7 Net CF from Inv Activities -204.4 -1852.8 -558.0 -358.0 PBDT 1691.9 1722.8 2023.2 2433.0 Inc / (Dec) in Equity Capital 0.0 0.0 0.0 0.0 Depreciation 169.9 200.7 242.8 280.6 Inc / (Dec) in Loan Funds 58.1 44.8 0.0 -100.0 Total Tax 347.7 396.4 448.7 542.4 Total Outflow of dividend -427.8 -431.6 -611.2 -1833.5 Profit from Associates 3.0 4.0 4.4 4.8 Others -428 406 285 -20 PAT 1,122.1 1,126.1 1,336.1 1614.9 Net CF from Fin. Activities -797.4 18.7 -325.8 -1953.2 Source: Company, ICICI Direct Research
Net Cash flow 505.5 -251.8 237.8 -24.9 Cash and Cash Equi beg. 197.7 703.2 451.5 689.2 Cash 703.2 451.5 689.2 664.3
Source: Company, ICICI Direct Research
Exhibit 12: Balance sheet | crore Exhibit 13: Key ratios | crore (Year-end March) FY20 FY21 FY22E FY23E (Year-end March) FY20 FY21 FY22E FY23E Equity Capital 50.8 50.8 50.8 50.8 Per Share Data Reserve and Surplus 4404.8 5542.1 6584.6 6365.9 EPS 22.1 22.2 26.3 31.8 Total Shareholders funds 4455.6 5592.9 6635.4 6416.7 Cash EPS 25.4 26.1 31.1 37.3 Total Debt 169.1 213.9 213.9 113.9 BV 87.7 110.1 130.7 126.4 Deferred Tax Liability 82.3 398.0 398.0 398.0 DPS 8.4 8.5 12.0 36.1 Minority Interest 215.7 240.0 242.0 244.0 Operating Ratios EBITDA Margin 21.6 23.0 22.0 22.5 Total Liabilities 5013.0 6539.2 7583.6 7267.0 PAT Margin 16.0 15.5 14.9 15.5 Return Ratios Assets RoE 26.1 20.2 20.1 25.2 Total Gross Block 3093.6 4805.5 5151.7 5401.7 RoCE 31.0 23.8 23.9 29.9 Less acc depreciation 1470.9 1671.6 1914.4 2195.0 RoIC 37.6 28.1 28.0 34.2 Net Block 1622.7 3133.9 3237.3 3206.7 Valuation Ratios Total Fixed Assets 1882.0 3427.8 3385.0 3354.4 EV / EBITDA 59.1 55.9 47.3 39.9 Other Investments 466.5 339.5 389.5 389.5 P/E 84.1 83.8 70.7 58.5 Goodwill on consolidation 184.0 1283.95 1283.95 1283.95 EV / Net Sales 12.8 12.9 10.4 9.0 Market Cap / Sales 12.9 12.9 10.5 9.1 Inventory 929.5 1234.2 1478.2 1309.7 Price to Book Value 21.2 16.9 14.2 14.7 Debtors 1088.5 1321.0 1478.2 1565.9 Turnover Ratios Loans and Advances 21.5 21.7 26.8 31.0 Asset turnover 1.5 1.1 1.2 1.4 Other Current Assets 302.6 315.4 388.9 449.4 Debtor Days 54.5 66.1 60.0 55.0 Cash 703.2 451.5 689.2 664.3 Creditor Days 31.1 50.4 30.0 30.0 Total Current Assets 3045.3 3343.7 4061.3 4020.3 Inventory Days 46.5 61.8 60.0 46.0 Solvency Ratios Total Current Liabilities 1522.7 2291.2 2281.5 2636.6 Debt / Equity 0.0 0.0 0.0 0.0 Net Current Assets 1522.6 1052.6 1779.8 1383.7 Current Ratio 3.4 2.7 4.2 3.6 Total Assets 5013.0 6539.3 7583.6 7267.0 Quick Ratio 2.0 1.5 2.4 2.2
Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 5 Result Update | Pidilite Industries ICICI Direct Research
Exhibit 14: ICICI Direct Coverage Universe (Consumer Discretionary) CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company (|) TP(|) Rating (| Cr) FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E Asian Paints (ASIPAI) 2,556 2,970 Buy 2,45,120 33.4 36.7 45.4 76.4 69.6 56.3 49.6 45.4 36.8 25.0 26.2 28.0 29.6 30.8 33.5 Astral Polytecnik (ASTPOL) 1,564 1,670 Hold 23,564 22.2 30.4 37.1 70.4 51.4 42.2 54.8 42.8 35.7 23.9 28.1 29.3 18.3 21.8 22.5 Amber Enterprises (AMBEN)3,010 3,015 Buy 9,465 29.8 68.2 97.6 100.9 44.1 30.9 35.9 18.7 14.0 8.4 15.3 18.7 6.5 13.0 15.8 Bajaj Electricals (BAJELE) 1,132 1,075 Buy 12,870 18.9 25.4 35.2 NM 36.3 26.1 31.0 25.0 18.2 17.6 21.4 24.8 13.5 17.3 19.9 Berger Paints (BERPAI) 723 810 Hold 70,218 7.6 9.7 12.4 95.1 74.4 58.5 63.9 52.3 42.5 26.1 30.0 35.1 23.4 26.0 29.0 Crompton Greaves(CROGR) 377 480 Buy 23,638 7.9 9.5 12.0 47.4 39.6 31.3 37.6 31.9 25.8 31.1 34.8 41.1 27.4 28.4 32.1 Dixon Technologies (DIXTEC)3,866 4,270 Buy 21,200 29.6 62.8 93.9 122.4 57.7 38.6 95.1 70.2 38.1 26.3 40.1 43.9 25.4 37.6 38.6 EPL (ESSPRO) 238 250 Hold 7,509 7.8 8.9 10.8 30.4 26.7 22.1 11.6 10.8 9.2 18.3 19.0 21.3 15.6 15.6 17.0 Havells India (HAVIND) 1,005 1,255 Hold 62,702 16.1 17.8 22.9 62.5 56.5 43.8 45.8 41.2 32.5 23.7 25.5 30.8 20.6 21.2 25.7 Kansai Nerolac (KANNER) 566 655 Buy 30,503 9.9 12.1 14.4 57.4 46.7 39.3 36.6 31.1 26.2 17.2 20.3 21.5 13.2 15.7 16.6 Moldtek Packaging (MOLPLA)474 600 Buy 1,314 16.5 20.8 28.0 28.8 22.8 16.9 15.4 12.6 9.8 20.7 23.6 27.8 19.9 20.9 23.1 Pidilite Industries (PIDIND) 1,859 2,035 Hold 94,400 22.2 26.3 31.8 83.8 70.7 58.5 55.9 47.3 39.9 23.8 23.9 29.9 20.2 20.1 25.2 Polycab India (POLI) 1,492 1,385 Buy 22,213 57.9 67.2 79.7 25.8 22.2 18.7 15.3 11.9 9.8 21.2 24.4 26.2 18.1 19.0 20.1 Supreme Indus (SUPIND) 2,149 2,390 Hold 27,298 77.0 64.9 72.4 27.9 33.1 29.7 20.5 22.2 19.6 32.7 26.2 25.2 30.9 23.6 22.6 Symphony (SYMLIM) 1,105 1,345 Hold 7,730 15.3 28.5 39.5 72.2 38.8 27.9 60.0 33.1 23.8 15.2 28.2 34.9 14.9 26.8 32.5 Time Techno (TIMTEC) 84 75 Buy 1,900 4.4 9.6 - 19.1 8.7 ### 5.7 3.8 8.4 13.7 5.5 11.2 V-Guard Ind (VGUARD) 225 265 Buy 9,636 4.2 6.1 7.1 53.2 37.0 31.8 34.8 26.2 22.4 23.6 27.9 29.0 16.8 21.1 21.9 Voltas Ltd (VOLTAS) 968 1,260 Buy 32,015 15.7 25.8 32.1 61.5 37.5 30.2 58.5 35.6 28.4 16.3 22.6 24.2 11.4 16.8 17.9
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 6 Result Update | Pidilite Industries ICICI Direct Research
RATING RATIONALE ICICI Direct endeavours 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 7 Result Update | Pidilite Industries ICICI Direct Research
ANALYST CERTIFICATION
I/We, Sanjay Manyal, MBA (Finance) and Hitesh Taunk, MBA (Finance) 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.
Terms & conditions and other disclosures:
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
ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as such, may not match with the recommendation in fundamental reports. Investors may visit icicidirect.com to view the Fundamental and Technical Research Reports.
Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.
ICICI Securities Limited has two independent equity research groups: Institutional Research and Retail Research. This report has been prepared by the Retail Research. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating, and target price of the Institutional Research.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.
ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.
ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.
ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.
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 ICICI Securities 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
ICICI Securities | Retail Research 8