COMPANY UPDATE 7 AUG 2015

Multi Commodity Exchange

BUY

INDUSTRY EXCHANGES An AGM to remember?

FY16 began with great hopes for Multi Commodity  Low volatility and sluggish volumes: MCX has seen
CMP (as on 7 Aug 2015) Rs 1,118 sluggish volatility in three of its top four traded
Exchange (MCX) as the SEBI-FMC merger was
Target Price Rs 1,530 announced and a new MD & CEO was appointed by commodities (crude oil being the exception). This
the board. Additionally, the company had also manifested in a sharp > 20% QoQ decline in traded
Nifty 8,565 value of Gold and Copper, leading to a 4% QoQ decline
launched a successful new contract (Crude Oil Mini),
Sensex 28,236 in MCX’s total traded value to Rs 13.6 trillion.
which was adding to the company’s average daily
KEY STOCK DATA traded value (ADTV).  MCX’s AGM; several things to look forward to : We
Bloomberg MCX IN
However, several events through the year subdued believe that investors could benefit immensely from
No. of Shares (mn) 51 the company’s growth outlook as (1) the SEBI-FMC is clarity on several strategic issues including (1) return of
MCap (Rs bn) / ($ mn) 57/893 merger is progressing slowly (2) the FMC rejected the surplus cash (2) increased shareholder representation
6m avg traded value (Rs mn) 722 MD & CEO chosen by MCX’s board (3) muted in the board (3) roadmap to mitigate commodity
volatility in key traded commodities on MCX has led market slowdown risk (4) leadership vacuum (5) risk
STOCK PERFORMANCE (%) mitigation and growth strategies : competition and
52 Week high / low Rs 1,290/701
to persistent weakness in ADTV, and, (4) the board
investment needs.
hasn’t yet found adequate shareholder
3M 6M 12M
representation.  Outlook and valuation : In our view, MCX remains a
Absolute (%) 15.2 31.4 34.7
We moderate our earnings estimates by 26%/20% key beneficiary of conducive regulatory changes as well
Relative (%) 9.0 33.1 24.4 as renewed management focus. We value the
for FY16/17 on account of the above. However, we
SHAREHOLDING PATTERN (%) would like to point out that the company’s upcoming company at 30x rolling 12 month forward EPS (a
Promoters - annual general meeting with shareholders can be premium to global listed exchanges) arriving at a target
price of Rs 1,530 (unchanged). Maintain BUY.
FIs & Local MFs 40.87 accompanied by key management insights on
FIIs 15.28 business growth and possibly an increase in FINANCIAL SUMMARY
Public & Others 43.85 shareholder representation in the board, all of which (Rs mn) FY13 FY14 FY15E FY16E FY17E
could provide investors more clarity on business
Source : BSE Net Sales 4,992 3,197 2,036 2,459 4,075
growth. MCX remains in a sweet-spot with a large
EBITDA 3,152 1,457 806 1,116 2,435
under-penetrated market, robust internal
PAT 2,986 1,528 1,251 1,379 2,397
capabilities and regulatory tailwinds. Given the high
EPS (Rs) 58.9 30.2 24.6 27.0 47.0
growth visibility and vast market opportunity, strong
cash flows and near zero capital needs, we value the P/E (x) 19.1 37.2 45.6 41.5 23.9
Vivekanand Subbaraman company at 30x (26x earlier) rolling 12-month P/BV (x) 5.0 5.0 4.8 5.5 5.2
vivekanand.s@hdfcsec.com earnings maintaining our BUY rating and target RoE (%) 27.8 13.3 10.7 12.3 22.5
+91-22-6171-7321 price. Source : Company, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
 MCX : COMPANY UPDATE

Low volatility resulting in sluggish volumes

MCX’s trading value in
Q1FY16 declined 4% QoQ to
Rs 13,579bn. This will result in
a commensurate drop in
trading revenue.
Except for crude oil, MCX’s top-traded commodities
continue to witness low rupee price volatility. We
observe a strong link between the value traded and
volatility.
 Q1FY16 traded value update : Trading in Gold fell
24% QoQ, Copper by 20% QoQ and Silver by 4% QoQ.
On the contrary, trading in Crude Oil improved by 5%
QoQ. Total exchange traded value during Q1FY16
stands at Rs 13,579bn, down 4% QoQ.
 Strong link between volumes and low volatility : The
decline in trading volume is explained by the QoQ
decline in price volatility of for Gold, Silver and
Copper. Crude Oil saw a sharp increase in volatility,
which corroborates with the QoQ increase in trading.

Gold : Traded value & volatility Silver : Traded value & volatility
Traded Value (Indexed) - LHS Volatility - RHS Traded Value (Indexed) - LHS Volatility - RHS
1,000 8.0% 1,000 12.0%
7.0%
800 800 10.0%
6.0%
600 5.0% 8.0%
600
4.0% 6.0%
400 3.0% 400
4.0%
Top-4 traded commodities, 2.0%
200 200
1.0% 2.0%
accounted for 73% of MCX’s
- 0.0% - 0.0%
Q1FY16 trading. Crude Oil,
Jul-07

Aug-09

Jul-12

Aug-14
Oct-08

Oct-13
May-08

Apr-11

May-13
Nov-10
Feb-07

Sep-11
Feb-12
Jan-10

Jan-15
Mar-09

Mar-14
Dec-07

Jun-10

Dec-12

Jun-15

Feb-07

Sep-11
Feb-12
Jan-10

Jan-15
Mar-09

Mar-14
Dec-07

Jun-10

Dec-12

Jun-15
Jul-07

Aug-09

Jul-12

Aug-14
Oct-08

Oct-13
May-08

Apr-11

May-13
Nov-10
which had 31% share of
Q1FY16 trading, was the only
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
top-4 commodity, which saw
Crude Oil : Traded value & volatility Copper : Traded value & volatility
increased volatility and hence
Traded Value (Indexed) - LHS Volatility - RHS Traded Value (Indexed) - LHS Volatility - RHS
increased trading. 1,200 14.0% 500 14.0%
In Q1FY16, bullion trading 1,000 12.0%
400
12.0%
accounted for just 35% of 800
10.0% 10.0%
MCX’s trading. 8.0% 300 8.0%
600
6.0% 6.0%
200
400
4.0% 4.0%
200 2.0% 100
2.0%
- 0.0% - 0.0%
Jul-07

Aug-09

Jul-12

Aug-14
Oct-08

Oct-13
May-08

Apr-11

May-13
Nov-10
Feb-07

Sep-11
Feb-12
Jan-10

Jan-15
Mar-09

Mar-14
Dec-07

Jun-10

Dec-12

Jun-15

Feb-07

Sep-11
Feb-12
Jan-10

Jan-15
Mar-09

Mar-14
Dec-07

Jun-10

Dec-12

Jun-15
Jul-07

Aug-09

Jul-12

Aug-14
Oct-08

Oct-13
May-08

Apr-11

May-13
Nov-10
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Page | 2

We believe that investors will
greatly benefit by probing
MCX’s board of directors on
the following matters (1)
return of surplus cash (2)
increased shareholder
representation in the board
(3) roadmap to mitigate
commodity slowdown risks
(4) appointment of MD & CEO
(5) preparedness to capitalize
on regulatory changes (6)
strategy to mitigate
competitive risks, and, (7)
investment strategy : IT and
delivery capabilities.
MCX’s AGM : A lot to look forward to
Notwithstanding the sluggishness in trading value, we
believe that there is a lot to look forward to in MCX,
particularly as the company’s board interacts with
shareholders in the annual general meeting (AGM).
Below are some discussion points for the AGM :
 Return of surplus cash : Excluding member margins
and SGF related funds, MCX has Rs 10bn of net cash.
This depresses the company’s ROCE, which is to 7%,
while core ROCE is 22%. While we appreciate the
company’s FY15 dividend payout of 40%, we believe
that shareholders are would also benefit from a
roadmap of return of surplus cash. Further, in order
to attract investors who seek steady cash returns
will also benefit from a declared dividend policy.
 Increased shareholder representation in the board :
as per media reports, the Forward Markets
Commission (FMC) has asked MCX to increase
shareholder representation. The board currently
comprises ten members, including six independent
directors. Among shareholders with >1% stake in the
company, only NABARD, which owns 3% in the
company is represented. KMB, which is the
company’s largest shareholder isn’t yet represented
on the board. We believe that the there could be
board appointments by shareholders in the AGM to
correct this anomalous situation.
 Roadmap to mitigate commodity slowdown risks :
The slowing down of the Chinese economy has
caused severe price corrections in several
commodities. India being an importer in most of
MCX’s top traded commodities is in a sweet spot, as
prices are correcting. As opposed to price volatility, a
unidirectional down move of key commodity prices
implies that there is lesser need for importers to
MCX : COMPANY UPDATE
hedge prices on an exchange. This is a key risk, along
with stagnant/sluggish commodity prices on account
of the Chinese slowdown. We believe that
shareholders would benefit from understanding
management strategy to mitigate the above risk.
 Appointment of MD & CEO : MCX’s MD & CEO
position has been vacant since May 2014. MCX’s
board has been looking to fill this vacancy, but has
faced roadblocks as the FMC stalled the appointment
of the board’s choice, Mr. V Bala. We believe that the
appointment of an MD & CEO is vital to ensure
accountability and a more coherent and aggressive
approach towards business growth.
 Preparedness to capitalize on regulatory changes :
The SEBI-FMC merger is on track and is likely to result
in substantial business tailwinds for MCX. We believe
that shareholders would benefit from strategic
insights on the company’s action plan to capitalize on
the regulatory moves.
 Strategy to mitigate competitive threats : The SEBI-
FMC merger will permit stock exchanges to setup
commodity exchange operations with BSE already
announcing plans to setup a commex of its own.
Further, NSE, which owns 15% stake in NCDEX is also
aggressively launching new non-agri contracts. MCX’s
board needs to outline a strategy to mitigate the
imminent competitive business threats it faces.
 Investment strategy (IT & delivery capabilities) :
MCX continues to rely on FTIL’s software. Global
exchanges have maintained their franchise by making
periodic investments in IT as well as delivery
capabilities (warehousing). Clarity in this regard
would be a significant investment risk mitigation.
Page | 3
 MCX : COMPANY UPDATE

Regulatory matters : steady progress

SEBI announced that it will
absorb the FMC by Sep-15
and then rollout commodity
regulations.
The SEBI-FMC merger
presents an opportunity for
MCX to rollout new products
and broaden investor profile.
 On the regulatory front, there has been steady
progress as SEBI is sticking to a September 2015
deadline of absorbing the FMC. The regulator is
working on the following issues (1) broker-regulations
(2) market surveillance and investigation (3) broker
registration (expected completion by August-end).
 Once the SEBI-FMC merger is completed, SEBI would
focus on evolving a clear regulatory roadmap for
commodity exchanges allowing them to (1) launch
new products : this could happen as early as March
2016. MCX would be able to launch options, weather
derivatives and other intangibles, indices, ETFs etc.
Unlike global markets where options represent just
~5% of total trading, India is likely to be an exception
as the commodity transaction tax (CTT) will be levied
on the option premium, while the same is levied on
contract exposures for futures. Thus, for similar
exposures, options would entail much lower CTT
payout than futures, making it much more viable for
market participants to trade options than futures (2)
broaden investor profile as financial institutions and
foreign investors are eventually permitted to trade.

Cut estimates; but remain constructive

In wake of the persistently sluggish volatility and delayed regulatory triggers, we temper our traded value expectations
for MCX.
MCX – CHANGE IN ESTIMATES
We cut our FY16/17 average Earlier New Increase (decrease) %
Amounts in Rs mn, unless otherwise mentioned
daily traded value estimates FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E
for MCX in keeping with the ADTV (Rs mn) 322 503 - 250 428 553 (22) (15) -
sluggish volume trends Transaction charges (Rs/mn) 18.7 18.7 - 17.7 17.7 17.7 (5) (5) -
observed so far (in FY16).This Revenue 3,476 5,248 - 2,703 4,373 5,588 (22) (17) -
has resulted in a cut in our EBITDA 1,761 3,251 - 1,116 2,435 3,382 (37) (25) -
revenue/EBITDA and earnings PAT 1,863 3,001 - 1,379 2,397 3,216 (26) (20) -
estimates. EPS (Rs) 36.5 58.8 - 27.0 47.0 63.1 (26) (20) -
Source: Company, HDFC sec Inst Research

Page | 4
 MCX : COMPANY UPDATE

Valuation
 We expect MCX to show a robust 36% FY15-18 also has 5% stake in MCX-SX (MCX Stock Exchange;
Premium valuation to earnings CAGR driven by a similar revenue growth. the status of MCX’s warrants in MCX-SX is sub-
MCX currently trades at 42x FY16 and 24x FY17 EPS. judice), ~3% stake in Dubai Gold and Commodities
sustain
We believe that MCX can command premium Exchange (DGCX), 51% stake in SME Exchange of
 MCX will continue to trade India Limited and 100% stake MCXCCL(Multi
multiples as operating performance is boosted by
at premium valuations regulatory tailwinds. Thus we assign a target Commodity Exchange Clearing Corporation Limited).
(42x FY16E EPS – a multiple of 30x rolling 12-month forward earnings Owing to business continuity challenges, we aren’t
significant premium to arriving at a target price of Rs 1,530. The company attributing any value to these investments.
global peers), on account
of the company’s robust VALUATION : GLOBAL EXCHANGES
growth trajectory. M-Cap
Forward P/E (x) EPS Forward P/B (x) EV/EBITDA (x) ROE (%)
 We expect MCX’s EPS to growth
Country (US$ 1-yr 2-yr PEG (x) 1-yr 2-yr 2-yr 1-yr 2-yr
(2-yr 1-yr fwd
grow at 38% CAGR from mn) fwd fwd
CAGR)
fwd fwd fwd fwd fwd
FY15-17, versus 11%, Emerging markets
which is the average EPS MCX (HDFC Sec estimates) India 893 41.5 23.9 38.1 0.63 5.5 5.2 39.4 17.9 12.3 22.5
growth of global peers Bloomberg Consensus estimates
BM&FBovespa SA Brazil 5,227 10.3 9.5 8.9 1.06 0.9 0.9 10.4 9.6 7.7 8.2
Bursa Malaysia Bhd Malaysia 1,111 20.2 18.6 8.6 2.17 5.6 5.7 12.7 11.7 27.5 28.8
Bolsa Mexicana Mexico 1,047 18.6 17.0 11.4 1.50 3.3 3.0 11.3 10.3 16.7 18.0
Multi Commodity Exchange India 893 34.8 25.6 33.1 0.77 4.7 3.9 20.6 15.5 12.2 15.9
EM average 18.7 16.4 15.0 1.35 3.6 3.4 12.5 10.3 17.0 17.9
Developed markets
CME Group USA 32,793 22.5 20.9 11.6 1.80 1.5 1.5 13.5 12.5 6.5 6.4
Hong Kong Exchanges Hong Kong 32,779 24.6 21.7 14.0 1.56 10.8 10.2 2.3 2.1 44.5 47.6
Intercontinental Exchange USA 26,186 17.6 16.1 9.7 1.66 2.1 1.9 11.8 10.7 10.9 11.4
Deutsche Boerse Germany 17,671 18.7 16.8 11.9 1.41 4.4 3.7 12.4 11.4 21.6 21.5
Nasdaq OMX USA 8,916 14.8 13.5 8.5 1.59 1.6 1.5 9.6 9.0 9.8 11.1
Japan Exchange Group Japan 9,437 27.9 26.5 4.1 6.39 5.0 4.3 16.4 16.1 15.6 15.0
Singapore Exchange Singapore 5,971 20.1 16.9 13.9 1.22 8.5 7.4 13.7 12.1 38.4 40.6
ASX Australia 6,159 19.9 18.8 5.0 3.72 2.2 2.2 13.0 12.3 11.0 11.5
CBOE Holdings USA 5,207 25.7 23.5 10.0 2.35 23.0 20.0 13.4 12.3 76.8 75.1
Hellenic Exchanges Greece 321 12.8 12.2 12.6 0.97 1.7 1.5 4.7 4.3 11.7 13.6
NZX Ltd New Zealand 179 18.2 15.5 10.1 1.54 5.1 6.2 9.5 8.4 27.5 31.6
Developed markets
20.2 18.4 10.1 2.20 6.0 5.5 10.9 10.1 24.9 25.9
average
Global average 19.8 17.9 11.4 1.97 5.4 4.9 11.3 10.2 22.8 23.8
Source: Bloomberg, HDFC sec Inst Research Note: 1-yr refers to FY16/CY15 & 2-yr FY17/CY16

Page | 5
 MCX : COMPANY UPDATE

MCX – Sensitivity of target price to ADTV assumptions

FY17e PE (x)
Target price (Rs)
24.0 28.0 30.0 32.0 35.0
302 966 1,127 1,208 1,288 1,409
352 1,069 1,248 1,337 1,426 1,560
FY17e ADTV (Rs bn) 428 1,224 1,428 1,530 1,632 1,785
503 1,379 1,609 1,724 1,839 2,011
604 1,585 1,850 1,982 2,114 2,312

Page | 6
 MCX : COMPANY UPDATE

INCOME STATEMENT (Standalone) BALANCE SHEET (Standalone)

(Rs mn) FY13 FY14 FY15E FY16E FY17E (Rs mn) FY13 FY14 FY15E FY16E FY17E
Net Sales 4,992 3,197 2,036 2,459 4,075 SOURCES OF FUNDS
Growth (%) (5.1) (35.9) (36.2) 20.5 65.7 Share Capital - Equity 510 510 510 510 510
Software support charges 782 622 384 384 546 Reserves 11,036 10,931 11,512 9,802 10,519
Employee Expenses 289 313 349 417 501 Total shareholders’ Funds 11,546 11,441 12,022 10,312 11,029
SG&A Expenses 206 200 200 219 237 Settlement guarantee fund 21 1,720 1,871 2,751 2,889
Other Operating Expenses 810 814 485 566 653 Total Debt - - - - -
Operating Profits 2,904 1,248 617 872 2,137 Deferred Taxes 196 152 152 152 152
Operating Profit Margin (%) 58.2 39.0 30.3 35.5 52.4 Long Term Provisions & Others 373 298 191 298 298
Other Operating Income 248 209 189 244 298 TOTAL SOURCES OF FUNDS 12,136 13,610 14,236 13,512 14,367
EBITDA 3,152 1,457 806 1,116 2,435 APPLICATION OF FUNDS
EBITDA (%) 60.2 42.8 36.2 41.3 55.7 Net Block 2,044 1,735 1,451 1,424 1,442
EBITDA Growth (%) (10.3) (53.8) (45.2) 39.7 118.3 Long-term investments 1,481 132 132 132 132
Other Income 1,207 993 1,133 1,000 1,085 Other long-term assets 531 1,564 1,696 281 281
Depreciation 307 343 259 277 282 Cash & Equivalents 12,677 12,900 14,136 15,189 16,860
EBIT 4,052 2,107 1,680 1,838 3,239 ST Loans & Advances, Others 1,125 1,084 828 814 1,318
Interest 0 11 14 - - Total Current Assets 13,802 13,984 14,964 16,004 18,178
PBT 4,051 2,096 1,666 1,838 3,239 Trading margin from members 4,324 2,585 1,562 1,884 3,221
Tax 1,065 569 415 460 842 Other Current Liabilities & Provns 1,398 1,221 2,445 2,445 2,445
PAT 2,986 1,528 1,251 1,379 2,397 Total Current Liabilities 5,721 3,805 4,007 4,328 5,666
APAT 58.9 30.2 24.6 27.0 47.0 Net Current Assets 8,080 10,179 10,957 11,676 12,512
APAT Growth (%) (0.6) (48.8) (18.1) 10.3 73.8 TOTAL APPLICATION OF FUNDS 12,136 13,610 14,236 13,512 14,367
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Page | 7
 MCX : COMPANY UPDATE

CASH FLOW (Standalone) KEY RATIOS (Standalone)

(Rs mn) FY13 FY14 FY15E FY16E FY17E FY13 FY14 FY15E FY16E FY17E
Reported PAT 2,986 1,528 1,250 1,379 2,397 PROFITABILITY (%)
Non-operating & EO items (1,114) (779) (1,175) (1,000) (1,085) GPM 85.1 81.8 82.7 85.8 87.5
PAT from Operations 1,872 748 76 378 1,312 EBITDA Margin 60.2 42.8 35.9 41.3 55.7
Interest expenses 0 11 14 - - APAT Margin 57.0 44.8 56.2 51.0 54.8
Depreciation 307 343 234 277 282 RoE 27.8 13.3 10.7 12.3 22.5
Working Capital Change (3,523) (1,465) 458 335 834 RoIC or Core RoCE 31.9 20.8 21.9 30.4 37.5
OPERATING CASH FLOW ( a ) 529 385 782 991 2,427 RoCE 16.7 8.8 6.9 7.7 12.0
Capex (462) (59) (50) (250) (300) EFFICIENCY
Free cash flow (FCF) 68 326 732 741 2,127 Tax Rate (%) 25.2 29.3 26.5 25.0 26.0
Investments 1,333 67 (208) 208 - Asset Turnover (x) 0.3 0.2 0.1 0.2 0.2
INVESTING CASH FLOW ( b ) 872 8 (258) (42) (300) Debtors (days) 78 116 136 110 110
Debt Issuance - - (107) 107 - Payables (days) 284 272 829 763 621
Interest expenses (0) (0) (14) - - Cash Conversion Cycle (days) (205) (156) (693) (653) (511)
FCFE 1,401 393 404 1,055 2,127 Debt/EBITDA (x) (2.7) (7.1) (15.7) (11.9) (5.6)
Share capital Issuance - - (0) - - Net D/E (0.7) (0.9) (1.0) (1.3) (1.2)
Dividend (2,134) (1,133) (597) (895) (1,542) Interest Coverage 13,069 198 NM NM NM
FINANCING CASH FLOW ( c ) (2,134) (1,133) (597) (895) (1,542) PER SHARE DATA
NET CASH FLOW (a+b+c) (733) (740) (72) 53 585 EPS (Rs/sh) 58.9 30.2 24.6 27.0 47.0
Non-operating and EO items 576 519 1,161 1,000 1,085 CEPS (Rs/sh) 64.9 36.9 29.7 32.5 52.5
Closing Cash & Equivalents 12,677 12,900 13,988 15,189 16,860 DPS (Rs/sh) 24.0 10.0 10.0 15.0 25.8
Source: Company, HDFC sec Inst Research BV (Rs/sh) 226.4 224.3 235.7 202.2 216.3
VALUATION
P/E 19.0 37.1 45.5 41.4 23.8
P/BV 4.9 5.0 4.8 5.5 5.2
EV/EBITDA 15.5 32.1 55.8 39.3 17.9
OCF/EV (%) 1.09 0.82 1.76 2.26 5.58
FCF/EV (%) 0.14 0.70 1.64 1.69 4.89
FCFE/mkt cap (%) 0.25 0.07 0.07 0.18 0.37
Dividend Yield (%) 2.14 0.89 0.89 1.34 2.31
Source: Company, HDFC sec Inst Research

Page | 8
 MCX : COMPANY UPDATE

RECOMMENDATION HISTORY

MCX TP
Date CMP Reco Target
1,700 5-Feb-15 859 BUY 1,180
1,500 16-Feb-15 860 BUY 1,180
1,300 27-Feb-15 1,039 BUY 1,180
1,100 2-Mar-15 1,190 BUY 1,530
900 15-May-15 1,053 BUY 1,530
700 7-Aug-15 1,118 BUY 1,530
500
300
Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
Apr-15
Sep-14

Feb-15

Jun-15

Jul-15
Mar-15
Dec-14
Oct-14
Aug-14

Aug-15
Nov-14

Jan-15

May-15
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 9
 MCX : COMPANY UPDATE

Disclosure:
I, Vivekanand Subbaraman, PGDIM, author and the name 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.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its
Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further
Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest.
Any holding in stock –No

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action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the
dividend or income, etc.
HDFC Securities Ltd and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report,
or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report.
HDFC 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.
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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 in the normal course of business.
HDFC Securities 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 HDFC Securities nor Research Analysts 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. HDFC Securities may have issued other reports that are inconsistent with and reach
different conclusion from the information presented in this report.
Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We
have not received any compensation/benefits from the subject company or third party in connection with the Research Report.

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