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Research

Ambuja Cement Ltd


Cement | India

3QC15 result review

Market data
Mkt capitalisation
Average daily vol
52-week H/L
Shares O/S
Free float
Promotor holding
Foreign holding
Face value

HOLD
Rs
Rs
%

209
218
4
Unchanged

Rs bn
'000
Rs
mn
mn
%
%
Rs

324.0
4632.1
287 / 196.25
1551.9
771.6
50.3
27.1
2.0

Current price (28 Oct )


Target price
Upside/(downside)
Earning estimate

Price performance (%)


Nifty (abs)
Stock (abs)
Relative to Index

1m
4.8
2.8
(2.0)

3m
(2.0)
(9.3)
(7.3)

Performance
300
(Rs)

6m
(1.4)
(9.5)
(8.1)

(%)

1yr
1.8
(7.2)
(9.0)

20

275

10

250

225

(10)

200
Oct-14

Jan-15

October 29, 2015

ACEM IN; ABUJ.BO

Apr-15

Jul-15

Ambuja Cements (LHS)

Source: Bloomberg, SSLe

Milind Raginwar
+91 22 4227 3362
milind.raginwar@sbicapsec.com
Ashutosh Adsare
+91 22 4227 3496
ashutosh.adsare@sbicapsec.com

(20)
Oct-15

Rel. to Nifty (RHS)

Subdued in-line performance YoY; few positive signs QoQ


Ambuja Cements (ACEM) 3QC15 net sales declined 4.1% YoY to Rs20.95bn, as realizations
fell sharply, while volumes grew marginally (in line with SSLe). Realizations fell ~6% YoY to
Rs4,276/tonne (unadjusted). However, despite the decline in realizations, volumes grew
marginally by just 2% YoY (including clinker sales of 0.08MT) to 4.9MT, indicating weak
demand in key ACEM markets. ACEMs capacity utilization hovered ~69% (marginally higher
than 67.5% in 3QC14). The company continued its cost control efforts as the total cost/tonne
decreased ~4% YoY to Rs3,620/tonne, aided by raw material and logistic costs.
Consequently, EBITDA/tonne reduced to Rs656/tonne (from Rs789/tonne), which was lower
on account of muted realization growth. EBITDAM shrank to 16% (earlier 17.9%).
The EBITDA performance was healthy QoQ, driven by 2% realization growth and flat
cost/tonne. This helped EBITDA/tonne to jump 15% sequentially from Rs570/tonne (adjusted
to MDR provisions) in 2QC15. Adjusting for DMF provisions, however, EBITDA came a tad
lower at Rs3.37bn vs. Rs3.57bn in 2QC15, as volumes fell 18% QoQ. Meanwhile, APAT
declined 24.5% YoY to Rs1.8bn (in line with SSLe) vs. Rs2.39bn in the last-year period due to
lower realizations and rising depreciation and interest costs YoY. APAT declined 9.6% QoQ
due to lower other income in 3QC15. We have maintained our target price at Rs218/share
(earlier Rs208) based on C16-end capacities of 28.7 MT and maintain HOLD rating on the
stock. At our target price, ACEM trades at a P/E of 25.7x and has an EV/EBITDA of 13.8x on
C16e earnings.
Marginal volume growth: ACEMs cement volumes grew marginally by 2% YoY to 4.9MT
(including clinker sales of 0.08MT). However, realizations declined 6.1% YoY to
Rs4,276/tonne, indicating weak demand. West and North (including the Central region) India
and East India contribute to ~82% and ~18% of ACEM sales, respectively. Sequentially,
however, realizations increased 5%/2%/flat in North/West/East India.
Cost control continues: ACEMs cost control measures continued in 3QC15, as the
cost/tonne declined ~4% YoY to Rs3,620/tonne. The decline was aided by raw material and
logistics costs. Power and fuel cost/tonne came at Rs992/tonne vs.Rs1061/tonne YoY due to
higher use of pet-coke 53% (50% in 3QC14) and cheaper imported coal 24% vs. 9% in
3QC14 replacing the domestic coal. Raw material cost/tonne, excluding changes in
inventories, came at Rs367/tonne vs. Rs408/tonne in 3QC14. On the other hand, logistics
costs (including inter-units transfer for clinker) came flat at Rs1130/tonne vs. Rs1141/tonne in
the same-period last year, which was commendable. Meanwhile, EBITDA declined
~14.4%YoY to Rs3.37bn, whereas EBITDAM shrank to 16% YoY (earlier 17.9%) after
adjusting for DMF provisions.
Earnings estimates maintained: We have maintained our full-year estimates for
C15e/C16e/C17e. Meanwhile, key ACEM continued to face weak demand and there was
limited improvement in realizations, as indicated by the 9M performance; however, we expect
steady recovery in demand in North/West and East India, as a consequence of the
governments aggressive spending on infrastructure (particularly roads). This should help
ACEM improve its dispatches in C16e/C17e. Helped with this and a steady-to-marginal
increase in cement realizations and strict cost controls should fillip performance in
C16e/C17e. We have not yet factored in the same; however, we will be watching the cement
dispatches and prices keenly. We will revisit our earnings and take a call on the stock in case
of sustained/fast recovery.
Valuation and recommendation: We continue to value ACEM based on the replacement
cost method, and have a base cost assumption of Rs7.5bn/MT. The stock currently trades at
a premium valuation to the replacement cost based on C16 capacities. We have assigned a
40% premium to the replacement cost. Accordingly, we revised our target price to
Rs218/share based on its C16-end capacities of 28.7MT and our HOLD rating. At our target
price, the stock trades at a P/E of 25.7x and EV/EBITDA of 13.8x C16 earnings estimates.
Financial Summary
Y/E Dec (Rs mn)
Net sales
growth (%)
EBITDA margin (%)
Adjusted net profit
EPS (Rs)
growth (%)
P/E (x)
EV/EBITDA (x)
Dividend yield (%)
RoE (%)
RoCE (%)
Source: Company, SSLe

SBICAP Research on Bloomberg SBICAP <GO>, www.securities.com

C13
90,938
(6.1)
18.2
10,290
6.7
(34.7)
31.3
17.0
1.5
11.3
15.9

C14
99,187
9.1
19.4
12,449
8.1
21.0
25.9
14.4
2.1
12.7
17.0

C15e
99,680
0.5
16.2
9,134
5.9
(26.6)
35.4
17.5
1.7
8.9
12.0

C16e
111,156
11.5
19.2
13,147
8.5
43.9
24.6
13.1
1.7
12.3
16.1

C17e
124,993
12.4
20.5
16,120
10.4
22.6
20.1
11.3
1.7
14.0
18.3

Please refer to our disclaimer given at the last page.

Ambuja Cement Ltd

SBICAP Securities Ltd

Quarterly Financials
Y/E Dec (Rs mn)

3QC15

3QC14 YoY (%)

2QC15 QoQ (%)

Net sales

25,105

21,109

22,021

Cost of goods

1,090

1,487

1,782

1,595

Employee benefits exp.

1,515

1,424

1,501

1,520

Power & fuel costs

(15.9)

21,609

4,862

5,098

5,843

4,745

10,273

10,077

12,408

10,518

3,369

3,934

16.0

17.9

14.2

15.0

Depreciation and amort.

1,553

1,302

1,485

1,479

EBIT

1,817

2,633

8.6

12.0

8.3

8.1

Other Expenses

EBITDAM slipped mainly due to the lower


realizations, though volumes increased
marginally and cost control measures
continued

(4.1)

3QC15e Var (%)

EBITDA
EBITDAM (%)

EBITM (%)

(14.4)

3,570

(31.0)

(5.6)

2,085

(2.3)

3,232

(12.9)

4.3

1,753

3.7

Other income

473

885

1,057

850

Interest expenses

207

179

316

333

2,082

3,339

547

949

831

545

26

28

29

24

1,536

2,391

(35.8)

1,995

(23.0)

1,725

(11.0)

1,536

2,391

(35.8)

1,995

(23.0)

1,725

(11.0)

Extraordinary/Exceptional
Profit before tax
Tax expense
Effective tax rate (%)
PAT

(37.6)

2,826

(26.3)

2,270

(8.3)

Minority Interest
Reported net profit
Non-recurring items

(268)

Adj. net profit

1,804

2,391

NPM (%)

8.5

10.9

EPS (Rs)

1.2

1.6

(24.5)

1,995

(9.6)

1,725

7.9
(24.5)

4.6

8.0

1.3

(9.6)

1.1

4.6

Source: Company, SSLe


Revenues inculde other operating income

20.7

(%)

16.0

15.3

17.9

14.9

22.2

21.6

13.9

22.0

13.3

19.5
21.7

29.3

28.6

26.4

16

656

615

868

611

789

982

953

546

523

915

794

908

EBITDA/t (LHS)

3QC15

2QC15

1QC15

4QC14

3QC14

2QC14

1QC14

4QC13

3QC13

2QC13

1QC13

1QC12

0
4QC12

1,181

3.0

24

3QC12

350
1,205

4.0

Volume (RHS)

32

700

1,283

(Rs/t)

(MT)

6.0

1,050

3QC15

2QC15

1QC15

4QC14

3QC14

2QC14

1QC14

4QC13

3QC13

2QC13

1QC13

4QC12

3QC12

6.0

4,276

4,187

4,465

4,376

4,554

4,631

4,356

4,142

4,103

4,360

4,270

4,292

4,534

4,261

4,557
2QC12

3,600
1QC12

1,400

5.0

3,900

Realization/t (LHS)

Margins recovery delayed due to lower realizations


7.0

4.9

5.4

5.4

4.8

4,200

5.3

5.4
4.9

4.8

5.4
6.0

5.6

4,500
(Rs/t)

6.1
5.8

6.2

4,800

2QC12

Realizations continue to be weak YoY; but improve QoQ

Margin (RHS)

Source: Bloomberg, SSLe

milind.raginwar@sbicapsec.com I ashutosh.adsare@sbicapsec.com

October 29, 2015 | 2

Ambuja Cement Ltd

SBICAP Securities Ltd


Valuations
C15e

C16e

C17e

1,880

1,880

1,880

10

10

10

187.95

187.95

187.95

1,380

1,380

1,380

M-cap (Rs mn)

259,371

259,371

259,371

Net Debt

(13,494)

(8,947)

(13,812)

EV

245,877

250,424

245,559

30.239

32.689

32.689

Equity Share Capital (Rs mn)


FV (Rs)
No of equtiy shares (mn)
The stock currently trades at a fair valuation
hence we maintain our HOLD rating

CMP (Rs)

Total Capacity
EV/tonne (US $)

135.5

127.7

125.2

EV/tonne (Rs)
Source: SSLe

8,131

7,661

7,512

1-year forward EV/tonne


400

(Rs)

300

200

Jan-06
Apr-06
Jul-06
Oct-06
Feb-07
May-07
Aug-07
Nov-07
Mar-08
Jun-08
Sep-08
Dec-08
Apr-09
Jul-09
Oct-09
Jan-10
May-10
Aug-10
Nov-10
Feb-11
Jun-11
Sep-11
Dec-11
Mar-12
Jul-12
Oct-12
Jan-13
Apr-13
Aug-13
Nov-13
Feb-14
May-14
Sep-14
Dec-14
Mar-15
Jun-15
Oct-15

100

Price

$100

$140

$180

$220

$260

Source: Bloomberg, SSLe

milind.raginwar@sbicapsec.com I ashutosh.adsare@sbicapsec.com

October 29, 2015 | 3

Ambuja Cement Ltd

SBICAP Securities Ltd

Financials
Income Statement

Balance Sheet

Y/E Dec (Rsmn)


C13
Net sales
90,938
growth (%)
(6.1)
Operating expenses
(75,165)
16,670
EBITDA
growth (%)
(33.2)
Depreciation &amortisation
(4,901)
EBIT
15,544
Other income
3,775
Interest paid
(651)
Extraordinary/Exceptional items
PBT
17,549
Tax
(4,603)
Effective tax rate (%)
(26.2)
Net profit
12,946
Minority interest
0
Reported Net profit
12,946
Non-recurring items
2,656
Adjusted Net profit
10,290
growth (%)
(34.7)

C14
99,187
9.1
(80,525)
19,337
16.0
(5,095)
17,721
3,479
(645)

C15e
99,680
0.5
(84,270)
16,322
(15.6)
(6,041)
13,059
2,778
(988)

C16e
C17e
111,156 124,993
11.5
12.4
(90,542) (100,176)
21,580
25,846
32.2
19.8
(6,139)
(6,352)
18,247
22,259
2,806
2,765
(1,010)
(1,135)

19,591
(4,627)
(23.6)
14,964
0
14,964
2,515
12,449
21.0

12,071
(2,937)
(24.3)
9,134
0
9,134
0
9,134
(26.6)

17,237
(4,091)
(23.7)
13,147
0
13,147
0
13,147
43.9

21,124
(5,004)
(23.7)
16,120
0
16,120
0
16,120
22.6

C14

C15e

C16e

C17e

19.4
17.7
12.6
12.7
17.0
22.5

16.2
13.0
9.2
8.9
12.0
14.9

19.2
16.3
11.8
12.3
16.1
18.7

20.5
17.7
12.9
14.0
18.3
19.9

Key Financials ratios

C13
23,411
37,616
1,045

C14
24,581
44,197
1,057

Net fixed assets


Goodwill & intangible assets
Other non-current assets
Total assets

66,902
673
0
129,647

68,501
673
0
139,009

Current liabilities
Borrowings
Other non-current liabilities
Total liabilities

28,699
448
5,643
34,791

31,802
283
5,890
37,975

3,092
91,765
94,857
0
129,647

3,100
97,935
101,035
0
139,010

Y/E Dec (Rsmn)


Pre-tax profit
Depreciation
Chg in working capital
Total tax paid
Other operating activities
Operating CF

C13
17,549
4,424
2,487
(7,952)
0
16,508

C14
19,591
4,383
-584
(5,417)
0
17,974

Capital expenditure
Chg in investments
Other investing activities
Investing CF
FCF

(8,174)
(1,326)
0
(9,500)
7,008

(5,982)
(3,843)
0
(9,825)
8,149

Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Other financing activities
Financing CF

185
(29)
(6,473)
184
(6,134)

515
(165)
(7,239)
(90)
(6,979)

675
(76)
(8,262)
0
(7,663)

675
75
(7,019)
0
(6,269)

675
75
(7,017)
0
(6,267)

Net chg in cash & bank bal.


Closing cash & bank bal

874
23,411

1,170
24,581

(101)
24,481

(460)
24,021

(771)
23,250

Share capital
Reserves & surplus
Shareholders' funds
Minority interest
Total equity & liabilities

C15e
24,481
35,881
443

C16e
24,021
41,639
443

C17e
23,250
38,968
443

77,659
81,040
96,099
748
823
898
0
0
0
139,210 147,966 159,656
29,301
207
5,930
35,439

31,191
282
5,970
37,444

33,044
357
6,010
39,411

3,100
3,100
3,100
100,672 107,422 117,146
103,772 110,522 120,245
0
0
0
139,210 147,966 159,656

Cash Flow Statement

Y/E Dec (Rsmn)


C13
Profitability and return ratios (%)
EBITDAM
18.2
EBITM
16.9
NPM
11.3
RoE
11.3
RoCE
15.9
RoIC
20.0
Per share data (Rs)
O/s shares
EPS
FDEPS
CEPS
BV
DPS

1542.2
6.7
6.7
9.9
61.5
3.6

1545.9
8.1
8.1
11.4
65.4
5.0

1549.8
5.9
5.9
9.8
67.0
3.9

1549.8
8.5
8.5
12.4
71.3
3.9

1549.8
10.4
10.4
14.5
77.6
3.9

Valuation ratios (x)


PE
P/BV
EV/EBITDA
EV/Sales

31.3
3.4
17.0
3.1

25.9
3.2
14.4
2.8

35.4
3.1
17.5
2.9

24.6
2.9
13.1
2.5

20.1
2.7
11.3
2.3

Other key ratios


D/E (x)
DSO (days)

(0.4)
9

(0.4)
8

(0.4)
9

(0.4)
10

(0.3)
10

11.3
0.7
1.4
11.3

12.6
0.7
1.4
12.7

9.2
0.7
1.4
8.9

11.8
0.8
1.3
12.3

12.9
0.8
1.3
14.0

Du Pont Analysis - RoE


NPM (%)
Asset turnover (x)
Equity Multiplier (x)
RoE (%)
Source: Company, SSLe

Y/E Dec (Rsmn)


Cash & Bank balances
Other Current assets
Investments

milind.raginwar@sbicapsec.com I ashutosh.adsare@sbicapsec.com

C15e
12,071
6,041
1,346
(4,736)
0
14,720

C16e
17,237
6,139
(2,690)
(2,782)
0
17,905

C17e
21,124
6,352
(3,536)
(3,959)
0
19,980

(15,273) (9,595) (21,485)


8,115 (2,500)
7,000
0
0
0
(7,159) (12,095) (14,485)
7,562
5,810
5,495

October 29, 2015 | 4

Ambuja Cement Ltd

SBICAP Securities Ltd

Recommendation History
BUY

(Rs)

300

HOLD

Date

SELL

Stock Price

TP

Rec.

174

179

HOLD

2-Apr-13

280

3-May-13

189

172

HOLD

260

25-Jul-13

171

171

HOLD

240

28-Oct-13

190

166

SELL

220

10-Feb-14

162

162

HOLD

22-Apr-14

215

181

SELL

25-Apr-14

209

181

SELL

25-Jul-14

218

208

HOLD

31-Oct-14

228

201

HOLD

19-Feb-15

265

218

SELL

200
180

Source: Bloomberg, SSLe

Oct-15

Aug-15

Jun-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

140

Feb-13

160

29-Apr-15

238

221

HOLD

27-Jul-15

234

218

HOLD

29-Sep-15

203

208

HOLD

28-Oct-15

205

218

HOLD

SBICAP Securities Limited


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SEBIRegistrationNo.:NSECapitalMarket:INB231052938|NSEDerivatives:INF231052938|BSECapitalMarket:INB011053031
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CorporateOffice:
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Tel.:912242273300/01|Fax:912242273335|Email:sbicapresearch@sbicapsec.com|www.sbismart.com

KEY TO INVESTMENT RATINGS (w.e.f. February 2013)


Guide to the expected return over the next 12 months. 1=BUY (expected to give absolute returns of 15 or more percentage points); 2=HOLD (expected to
give absolute returns between -10 to 15 percentage points); 3=SELL (expected to give absolute returns less then -10 percentage points)

DISCLOSURES & DISCLAIMERS


Analyst Certification
The views expressed in this research report (Report) accurately reflect the personal views of the research analysts (Analysts) employed by SBICAP
Securities Limited (SSL) about any and all of the subject issuer(s) or company(ies) or securities. This report has been prepared based upon information
available to the public and sources, believed to be reliable. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly
related to the specific recommendation(s) or view(s) in this report.
The Analysts engaged in preparation of this Report or his/her relative:(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of the equity securities of the subject
company mentioned in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of
interest at the time of publication of the Report.
The Analysts engaged in preparation of this Report:(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of
securities for the subject company in the past twelve months; (c) have not received any compensation for investment banking or merchant banking or
brokerage services from the subject company in the past twelve months; (d) have not received any compensation for products orservices other than
investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) have not received any
compensation or other benefits from the subjectcompany or third party in connection with the Report; (f) has not served as an officer, director or employee
of the subject company; and (g) are not engaged in market making activity for the subject company.
Name

Qualification

Designation

Milind Raginwar

MBA (Finance) , LLB

Analyst

Ashutosh Adsare

B.Com, MMS (Finance)

Associate

milind.raginwar@sbicapsec.com I ashutosh.adsare@sbicapsec.com

October 29, 2015 | 5

Ambuja Cement Ltd

SBICAP Securities Ltd

Other Disclosures
SBICAP Securities Limited (SSL), a full service Stock Broking company, is engaged in diversified financial services business, including equity broking, DP services, distribution
of Mutual Fund, insurance products and other financial products.SSL is a member of National Stock Exchange of India Limited and BSE Limited. SSL is also a Depository
Participant registered with NSDL & CDSL. SSL is a large broking house catering toretail, HNI and institutional clients. It operates through its branches and authorized persons
spread across the country and the clients are provided online trading through internet and offline trading through branches and call & trade facility. SSL is a wholly owned
subsidiary of SBI Capital Markets Limited (SBICAP), which is engaged into investment banking, project advisory and financial services activities and is registered with the
Securities and Exchange Board of India as a Category I Merchant Banker. SBICAP is a wholly owned subsidiary of State Bank of India. Hence, State Bank of India and all its
subsidiaries, including SBICAP and banking subsidiaries are treated and referred to as Associates of SSL.
We hereby declare that our activities were neither suspended nor we have materially defaulted with any stock exchange authority with whom we are registered in last five years.
However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advice letters or levied minor penalty for certain
procedural lapses. We have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities; nor has our certificate of registration been cancelled by
SEBI at any point of time.
SSL or its Associates may: (a) from time to time, have long or short position in, and buy or sell the securities of the company mentioned in the Report or (b) be engaged in any
other in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company discussed
herein or act as an advisor or lender/borrower to such company or may have any other potential conflict of interests with respect to any recommendation and other related
information and opinions.
SSL does not have actual/beneficial ownership of one per cent or more securities of the subject company at the end of the month immediately preceding the date of publication of
the Report. However, since Associates of SSL are engaged in the financial services business, they might have in their normal course of business financial interests or actual /
beneficial ownership of one per cent or more in various companies including the subject company mentioned herein this Report.
SSL or its Associates might have managed or co-managed public offering of securities for the subject company in the past twelve months and might have received 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 services in a merger or specific transaction.
Compensation paid to Analysts of SSL is not based on any specific merchant banking, investment banking or brokerage service transaction.
SSL or its Associate did not receive any compensation or any benefit from the subject company or third party in connection with preparation of this Report.
This Report is for the personal information of the authorized recipient(s) and is not for public distribution and should not be reproduced, transmitted or redistributed to any other
person or in any form without SSLs prior permission. The information provided in the Report is from publicly available data, which we believe, are reliable. While reasonable
endeavors have been made to present reliable data in the Report so far as it relates to current and historical information, but SSL does not guarantee the accuracy or
completeness of the data in the Report. Accordingly, SSL or any of its Associates including directors and employees thereof shall not be in any way responsible or liable for any
loss or damage that may arise to any person from any inadvertent error in the information contained, views and opinions expressed in this Report or in connection with the use of
this Report.
Please ensure that you have read Risk Disclosure Document for Capital Market and Derivatives Segments as prescribed by Securities and Exchange Board of India before
investing in Indian securities market.
The projections and forecasts described in this Report should be carefully evaluated as these :
1.
2.
3.
4.

Are based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies.
Can be expected that some of the estimates on which these were based, will not materialize or will vary significantly from actual results, and such variances may increase
over time.
Are not prepared with a view towards compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an
opinion or any other form of assurance on these.
Should not be regarded, by mere inclusion in this report, as a representation or warranty by or on behalf of SSL the authors of this report, or any other person, that these or
their underlying assumptions will be achieved.

This Report is for information purposes only and SSL or its Associates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Though
disseminated to recipients simultaneously, not all recipients may receive this report at the same time. SSL will not treat recipients as clients by virtue of their receiving this report. It
should not be construed as an offer to sell or solicitation of an offer to buy, purchase or subscribe to any securities this report shall not form the basis of or be relied upon in
connection with any contract or commitment, whatsoever. This report does not solicit any action based on the material contained herein.
It does not constitute a personal recommendation and does not take into account the specific investment objectives, financial situation/circumstances and the particular needs of
any specific person who may receive this document. The securities discussed in this Report may not be suitable for all the investors. SSL does not provide legal, accounting or tax
advice to its clients and you should independently evaluate the suitability of this Report and all investors are strongly advised to seek professional consultation regarding any
potential investment.
Certain transactions, including those involving futures, options, and other derivatives as well as non-investment grade securities, give rise to substantial risk and are not suitable
for all investors. Foreign currency denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived
from the investment.
The price, value and income of the investments referred to in this Report may fluctuate and investors may realize losses on any investments. Past performance is not a guide for
future performance. Actual results may differ materially from those set forth in projections. SSL has reviewed the Report and, the current or historical information included here is
believed to be reliable, the accuracy and completeness of which is not guaranteed. SSL does not have any obligationto update the information discussed in this Report.
The opinions expressed in this report are subject to change without notice and SSL or its Associates have no obligation to tell the clients when opinions or information in this
report change. This Report has not been approved and will not or may not be reviewed or approved by any statutory or regulatory authority in India, United Kingdom or Singapore
or by any Stock Exchange in India, United Kingdom or Singapore. This report may not be all inclusive and may not contain all the information that the recipient may consider
material.
The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this Report are
organized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries. Distributing /taking/sending/dispatching/transmitting this
document in certain foreign jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any
such restrictions. Failure to comply with this restriction may constitute a violation of laws in that jurisdiction.

Legal Entity Disclosure


Singapore: This Report is distributed in Singapore by SBICAP (Singapore) Limited (Registration No. 201026168R), an Associate of SSL incorporated in Singapore. SBICAP
(Singapore) Limited is regulated by the Monetary Authority of Singapore as a holder of a Capital Markets Services License and an Exempt Financial Adviser in Singapore.
SBICAP (Singapore) Limiteds services are available solely to persons who qualify as Institutional Investors or Accredited Investors (other than individuals) as defined in section
4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (the SFA) and this Report is not intended to be distributed directly or indirectly to any other class of persons.
Persons in Singapore should contact SBICAP (Singapore) Limited in respect of any matters arising from, or in connection with this report via email at singapore.sales@sbicap.sg
or by call at +65 6709 8651.
United Kingdom: SBICAP (UK) Limited, a fellow subsidiary of SSL, incorporated in United Kingdom is authorised and regulated by the Financial Conduct Authority. This
marketing communication is being solely issued to and directed at persons (i) fall within one of the categories of Investment Professionals as defined in Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Financial Promotion Order), (ii) fall within any of the categories of persons
described in Article 49 of the Financial Promotion Order (High net worth companies, unincorporated associations etc.) or (iii) any other person to whom it may otherwise lawfully
be made available (together Relevant Persons) by SSL. The materials are exempt from the general restriction on the communication of invitations or inducements to enter into
investment activity on the basis that they are only being made to Relevant Persons and have therefore not been approved by an authorised person as would otherwise be
required by section 21 of the Financial Services and Markets Act 2000 (FSMA).

milind.raginwar@sbicapsec.com I ashutosh.adsare@sbicapsec.com

October 29, 2015 | 6