Date: 4 February, 2019

Equity Research
Pick of the Week – PCG Research

Reliance Industries

Key Highlights

Largest Private Sector Player in Refining & Petrochemicals Continues to gain market share in Telecom Segment, largest player
Phenomenal Subscriber addition in Telecom in terms of wireless internet users
Telecom and Retail Segments continue to post robust growth Estimate 9% revenue and 33% PAT CAGR

INDUSTRY ADD ON DIPS TO

Oil & Gas Rs 1140 - 1247

CMP TARGET
Rs 1247 Rs 1440 Rs 1030

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RECOMMEND TIME HORIZON
ed ed
Buy at CMP and add on declines 4-6 quarters
 Equity Research
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Company profile:

HDFC Scrip Code RELINDEQNR RIL is the largest private player in the refining, petrochemical and E&P sectors in India. The Company’s
refining complex in Jamnagar is the largest in the world and among the most complex. It is also among the
BSE Code 500325
largest integrated petrochemical producers, globally. Over the past 40 years, RIL has periodically transformed
NSE Code RELIANCE its core business through backward integration. First it was Textiles, then Polyester, followed by Chemicals
Bloomberg RIL IN and then Petrochemicals and Refining. In the past few years, a major lateral shift has happened, with the
CMP Feb 01, 2019 Rs 1247 focus on Telecom, Data, Broadband and organised Retail. Apart from Exploration & Production (E&P) in India,
RIL has made significant investments in US shale gas. In terms of revenues, Refining contribution stood at
Equity Capital (Rs bn) 63.39
54%, Petrochemicals at 23%, Retail at 17% and Telecom (RJIO) at 5.7%. In terms of EBIT, Petrochemicals
Face Value (Rs) 10 at 50%, Refining at 32%, Telecom at 13% and Retail at 8% while Oil & Gas segment continue to post EBIT
Eq- Share O/S (mn) 6338.6 losses. RIL is also expanding its presence rapidly in the areas of Consumer Retailing and Telecom. EBIT
Market Cap (Rs bn) 7906.21 contribution from Retail and Telecom is at 21% for 9M FY19 which was at just 2% in FY17.

Book Value (Rs) 497

Avg.52 Wk Volume 10271914 View and valuation:

52 Week High 1329 Digital and Retail segments to spur robust growth momentum
52 Week Low 871
Red flag Price Level 1030 We believe the Company may post 11.2% revenue and 13% PAT CAGR on standalone basis over FY18-21E.
As Consumer and Telecom segment gets bigger, they would post better earnings growth. With ARPU also
PCG Risk Rating * Yellow inching up after FY20, RJIO is expected to post robust growth over the next 2-3 years. Telecom (RJIO) is
expected to see 30% revenue and 49% PAT CAGR over FY19-21E. By end of FY21, RJIO may end up with
Shareholding Pattern % (Dec, 2018) an estimated of 41cr subscribers. Retail Segment has already demonstrated superior performance and we
Promoters 47.2 further expect it to accelerate in the coming years. RIL is the largest retailer in the country having presence
Institutions 39.1 across various segments. We estimate 21% consolidated revenue and 23% PAT CAGR over FY18-21E. Stock
trades at 6.7x FY21 EV/EBITDA. Reliance trades at 12x FY21E earnings on consolidated basis, which is
Non Institutions 13.7 attractive given its strong growth outlook over the next few years. We recommend Buy on Reliance at cmp
Total 100.0 of Rs 1247 and add on dips to Rs 1140 with TP of Rs 1440 over the next 12 months.

Kushal Rughani
kushal.rughani@hdfcsec.com

FUNDAMENTAL ANALYST
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YE March (Rs bn) FY21E

Key Highlights FY18 FY19E FY20E
(Standalone)
Net Sales 2900.4 3931.5 3963.7 3993.1
EBITDA 517.4 588.6 690 709
RIL is the largest private player in the refining, APAT 336.1 372.9 448.3 471.5
petrochemical and E&P sectors in India. While 74.4
Diluted EPS (Rs) 53.1 59 70.8
RIL’s refining complex in Jamnagar is the largest
in the world and among the most complex, it is P/E (x) 23.2 20.9 17.5 16.8
also among the largest integrated petrochemical EV / EBITDA (x) 16.8 15.4 12.9 12.3
producers, globally. RoE (%) 11.1 11.3 12.3 11.7
(Source: Company, HDFC sec)
Refining revenues contribution at 54%,
Petrochem at 23%, JIO at 6% and Retail at 16.5%.
In terms of EBIT, Refining contributes 32% and Business Segments:
Petrochemicals at 50% and Jio at 13%. RIL
continues to expand its presence in the areas of RIL’s strength lies in its ability to build businesses of global scale and execute complex, time critical, and
consumer retailing and telecom. capital-intensive projects. This gives them an edge as it embarks on large investments in all core segments.
RIL has incurred large part of capex in all the segments and will continue to invest in Retail and Telecom
For 9M FY19, JIO posted operating revenues of Rs as the Company pursues to grow big in these segments. RIL has invested in world-scale projects like
27700cr with EBITDA margin of 38.8%. PAT stood petcoke gasification, off-gas crackers and telecoms, which are expected to drive future growth. Retail
at Rs 2100cr. Total subscriber base stood at 28cr.
Segment has already demonstrated superior performance and we expect it to accelerate further in the
We expect company to close with 30.5cr
coming years. The Company is the largest retailer in the country, having presence across various segments.
subscribers for FY19 and 38 cr for FY20 which
means they will almost double over FY18-20. Jio RIL has 9907 stores across India and has added 2300 stores in the nine months of FY19. Retail revenues
contributed to 7.2% of PAT for 9M FY19, which almost tripled from Q1 FY18 (Rs 11500 cr) to Q3 FY19 (Rs 35577 cr). Reliance Digital is the largest retailer
we believe would reach to 11% in FY21. of consumer electronics in the country. Reliance Trends continues to be the largest fashion retailer in India.

RIL may come out with the IPO or announce
demerger of Rel JIO and Rel Retail in the next two
years which would add incremental value for
shareholders.
We estimate 21% consolidated revenue and 23%
PAT CAGR over FY18-21E. Stock trades at 6.7x
FY21 EV/EBITDA and 12x FY21E EPS.
In Q3 FY19, RJIO clocked EBITDA margin of 39%, almost flat QoQ. Subscribers grew robust 11% QoQ to
280mn. In the first nine months, Jio added 94mn subscribers. ARPU for Q3 FY19 was at Rs 130, which is
the highest among telecom players, currently. Capex during the 9M FY19 in the telecom segment was at
Rs 470bn. Petchem, Jio and Retail businesses have done well in 9M FY19. Jio’s parent RIL has announced
acquisition of leading MSOs Hathway (51%) and Den Networks (66%) primarily through fresh issuance of
shares for Rs 53bn. It also plans to make an open offer to these companies. Jio has a robust product
proposition for home security and solution.

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 Reliance Jio’s (RJio) 3QFY19 operating performance continued to be strong. Subs/Revenue/EBITDA/APAT grew 11/12.4/13.3/22%
QoQ. Interest and depreciation witnessed rise of 10/9.5% QoQ
 Wireless momentum healthy: Jio reported healthy 28mn sub additions in 3Q (vs. 37mn in 2Q, 133mn in trailing 12m) to 280.1mn
(+11% QoQ). 2Q net additions included Government projects in MP/Rajasthan. 3Q also had an impact of discontinuation of eKYC
norms. ARPU declined by 1.3% QoQ to Rs 130
 Asset monetisation key to de-leverage: Jio is looking to monetise tower and fiber assets. Monetisation is likely through InvIT route
where it can discount future cash flows. Currently, it would be predominantly Jio’s payout. Jio is open to share towers and fiber
with peers at market price

Other key takeaways

Refining

 Gasoline cracks impacted globally, and particularly in China where exports increased amid weak car sales. US exports were also
higher due to lean season. Gasoline affected naphtha besides better propane economics for crackers
 Domestic retail and bulk sales volumes continued to grow
 Expect strict compliance of IMO shipping norms except for a few coastal routes. Shift likely from H2CY19. China has been quite
sincere and US domestic port emission norms are stricter than IMO. VGO may be diverted for blending if LSFO premiums are high,
which can reduce FCCU gasoline output, raising gasoline cracks though forecast is weak.
 Refineries are having shutdowns for IMO upgrades which can support near-term GRMs. RIL’s ongoing shutdown is also for IMO
upgrade. Larger vessels will go for scrubbers but not entirely. Against 12,000-15,000 vessels, 2,500-3,000 may go for it. Getting
compliant bunker fuel is challenging
 Diesel-FO forward spreads are volatile and over the place, though some moderation would be there
 Four DTA petcoke gasifiers are being stabilized, while six SEZ ones are under implementation, which is expected to be over by the
end of March 2019. Expect operationalization after that period. Currently, project earnings are reverse capitalised

Petrochem

 American and Chinese crackers to come online in CY19. Trade war resolution can, however, improve demand
 Polyester margins impacted by the slowdown in China and India. PTA margins were impacted by lower prices. PX, however, was
strong with supply tightness and robust Chinese demand. Fiber intermediary production was raised by 4% QoQ, while polyester
dropped due to plant maintenance
 New Chinese PX capacities will start by Q4CY19 and will take 3-4 months to stabilize. PX margins are likely to be flat or better.
Similar trend could be seen in PE and PP as well. MEG is likely to be weak. China will be a major factor, but in the near term factors
such as the Lunar New Year should support
 RIL sells 80-85% volumes in the Indian market; hence, demand-wise China is not a significant factor

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 Do not expect spike in US ethane prices as availability is there. Have flexibility to stop ethane sourcing if economics turn unfavorable.
Ethane imports are in line at a 1.5-1.6mmtpa run-rate Current ROGC volume rate is 184 tons/hour versus 168 capacity. PE, MEG
output is 1.2 and 1.3x capacity. SIBUR JV plant is close to commissioning
 In US shale, gas realizations improved but liquids were down. Drilled five wells in Chevron JV, which would come by mid-CY19 and
production should rise

Retail

 Core Retail EBITDA margin of 7.2% on gross revenue and 8.5% on net. 98% national coverage taluka wise. Same-store sales
growth stood at 20%+
 Reliance Retail app is under testing and will take 3-4 months trial on omni-channels to be completed. Additional details are awaited.
 New ECOM policy should give some advantages to Indian retailers, as according to regulations foreign e-retailers cannot do B2C,
which they are now doing through Indian JVs. 40% of overall grocery is cash and carry.
 Gross sales breakup is 17/31/8/34/10% on grocery/electronics/fashion & life/ connectivity/petro.

Digital Segment

 Subscriber addition during the quarter was impacted by changes in e-KYC norms and it saw disruption for 15-20 days. However,
management stated that subscriber additions are now even higher than Aadhar-based activation. Further, the positive impact of
MNP has also accelerated in favor of JIO.

 The company has been maintaining its share with 70% of Smart Phone industry additions on the JIO network.

 Incremental net adds mix — between JIO Phone and Smart Phones — has largely remained the same over the last 5-6 months.

 ARPU was impacted by increased offtake of the Monsoon Hungama Plan, which is priced at Rs 99/month. The starting plan of Rs
49 for JIO Phone is no more a popular plan as most subscribers now recharge for Rs 99. There is no reason to tweak tariffs as
revenue growth continues remain robust with incremental subscriber additions.

 JIO now offers exclusive original content, which is partly produced in-house and the focus continues to strengthen original content
library.

 Depreciation: as depreciation is expensed based on capacity utilization, management stated that the rate of depreciation change
will happen in FY20, while it did not quantify the increase.

 Network capacity creation continues to remain higher than utilization levels.

 The financial details and quantum of debt that will be transferred to both the entities will be disclosed after the demerger is
completed.

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FTTH and Enterprise

 The Company is now reaching close to commercial launch timelines, while it did not state the exact timeline for the launch
 Home broadband offering will come along IoT solutions where the target is to offer value-added services unlike plain vanilla
broadband services offered by the competitors
 In the case of Enterprise, the company will soon be doing a commercial launch
 Jio Phone users are active and in line with smartphones. They are upgrading to higher plans
 Expenses are still growing. Other expenses in Q3 had forex gains on liabilities
 Will go aggressive on FTTH
 Awaiting approvals for Den and Hathway acquisition. Currently on trial runs but achieving readiness to go commercial
 Once 99% targeted coverage is hit, mobility capex would peak out and after that only capacity capex would be there. Network is
ready for 5G or future Gs
 70% of new smartphone sales were on Jio, indicating smartphone versus JioPhone breakup on subs addition. MOU profile of JioPhone
similar to smartphone.

View & Valuation

We believe the Company may post 11.2% revenue and 13% PAT CAGR on standalone basis over FY18-21E. As Consumer and Telecom
segment gets bigger, they would post better earnings growth. Telecom (RJIO) is expected to see 30% revenue and 49% PAT CAGR over
FY19-21E. By end of FY21, RJIO may end up with around 41cr subscribers. Reliance trades at 12x FY21E earnings on consolidated basis,
which is attractive, given their strong growth outlook over the next few years. We recommend Buy on Reliance at cmp of Rs 1247 and add
on dips to Rs 1140 with TP of Rs 1440 over the next 12 months

Risks

 Slowdown in global demand or larger than expected capacity additions could impact RIL’s refining and chemical margins

 Delay in the commissioning of key upcoming core projects: petcoke gasification and off-gas cracker, could significantly impact
earnings

 Delays in government approvals for India E&P or weak domestic gas prices could hamper progress in upstream

 Weak US natural gas prices could lower the profitability of shale gas assets, though it could be offset by the liquids-rich acreages
which are currently highly profitable

 Rupee appreciation may impact negatively as RIL is positively leveraged to the depreciating currency

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Results Analysis (Standalone)

(Rs bn) 3QFY19 3QFY18 YoY(%) 2QFY19 QoQ (%) 9MFY19 9MFY18 YoY %
Revenues 1,000.96 732.56 36.6 961.67 4.1 2,874.22 2,060.05 39.5
Material Expenses 747.93 497.17 50.4 707.98 5.6 2,114.85 1,413.93 49.6
Employee Expenses 14.56 11.42 27.5 14.93 (2.5) 44.29 34.94 26.8
Other Operating Expenses 93.40 86.53 7.9 89.84 4.0 269.55 228.02 18.2
EBIDTA 145.07 137.44 5.6 148.92 (2.6) 445.53 383.16 16.3
Depreciation 25.86 24.75 4.5 27.45 (5.8) 80.93 69.01 17.3
EBIT 119.21 112.69 5.8 121.47 (1.9) 364.60 314.15 16.1
Other Income 24.56 16.24 51.2 20.12 22.1 65.36 55.99 16.7
Interest Cost 24.05 10.94 119.8 24.17 (0.5) 69.60 31.96 117.8
PBT 119.72 117.99 1.5 117.42 2.0 360.36 338.18 6.6
Tax 30.44 33.45 (9.0) 28.83 5.6 94.29 89.03 5.9
RPAT 89.28 84.54 5.6 88.59 0.8 266.07 249.15 6.8
APAT 89.28 84.54 5.6 88.59 0.8 266.07 249.15 6.8
EPS 13.7 13.3 3.1 13.6 0.8 40.9 38.9 5.1
Source: Company, HDFC Sec Research

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Revenues Split (%) – 9M FY19 EBIT Mix (%)

5.8 0.7 12.3

Refining
16.4 7.7 31.5
Petrochemicals Refining

0.7 Oil & Gas Petrochemicals

53.6
Retail
Retail
22.8
Digital
48.5 Digital
Media

Source: Company, HDFC sec Research

Source: Company, HDFC sec Research

Retail Revenues Split (%) Telecom Subscribers Trend

300 280
# mn
252
17.8 250
Grocery & Others
215
34.0 200 187
Consumer
Electronics 160
150 139
Fashion & Lifestyle 123

30.5 Petro Retail 100

9.7
8.0 Connectivity 50

0
Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19
Source: Company, HDFC sec Research
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Source: Company, HDFC sec Research
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Market Share: Total Subscribers (%) Wireless Internet Users (%)

1.8
9.7 4 2.2
20.4
29.2
Bharti Airtel
Bharti

Vodafone & Idea Vodafone & Idea

22.5

Rel Jio Rel Jio

20.4
53 BSNL
BSNL
Others
Tata Tele
36.6

Source: Company, HDFC sec Research Source: Company, HDFC sec Research

Rel Jio Revenues Trend Rel Jio EBITDA and EBITDA Margin
80000 30000 27788 50

70000 67118 45
25000 41.4
21582
60000 55352 39.0 40
33.4 38.0
20000
35
50000 15108
39808 15000 30
40000
25
10000
30000 6734
20158 20
20000 5000
15
10000 0 10
FY18 FY19E FY20E FY21E
0
FY18 FY19E FY20E FY21E OP OPM

Source: Company, HDFC sec Research

Source: Company, HDFC sec Research

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Rel Jio PAT Trend Subscribers Estimates (mn)

8000 450
405
6777 400 383
7000

6000 350
305
4633 300
5000
250
4000 186
3077 200
3000
150
2000
100
1000 723
50
0 0
FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E

Source: Company, HDFC sec Research Source: Company, HDFC sec Research

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SOTP Valuation (Based upon Dec-20E)

Business EBIDTA (Rs bn) Multiple Value (Rs bn) Value per share Valuation basis
Petrochemicals 333 9.8 3263 545 EV/EBITDA on Dec 20E
Refining 298 7 2145 360 EV/EBITDA on Dec 20E
E&P
PMT 13 6.0 78 13 EV/EBITDA on Dec 20E
KG D6 54 9 NPV
NEC 25 4 NPV
CBM 24 4 NPV
Shale Gas 4.9 1.0 343 58 x Inv as on Mar-18
Investments in Retail 89.9 20.8 1870 320 EV/EBITDA on Dec 20E
Investments in Telecom 3,179 537
Consolidated net Debt (2,549) -410 x as on Dec-20E
Value per share 8432 1,440

Source: Company, HDFC Sec Research, * Valuation is based on 5.92bn shares (net of treasury shares)

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Income Statement (Standalone) Balance Sheet (Standalone)

Rs bn FY18 FY19E FY20E FY21E Rs bn FY18 FY19E FY20E FY21E
Revenues 2900.4 3931.5 3963.7 3993.1 Share Capital 63.35 63.35 63.35 63.35
Growth (%) 19.8 35.5 0.8 0.7 Reserves And Surplus 3,083.12 3,399.83 3,780.52 4,180.96
Raw Materials 2020.7 2822.8 2755.9 2747.1 Total Equity 3146.5 3463.2 3843.9 4244.3
Employee Expenses 47.4 57.8 70.5 86.1 Long-term Debt 815.96 965.96 865.96 765.96
Other Expenses 315 462.3 447.2 450.9 Short-term Debt 634.89 705.06 650.76 596.55
EBITDA 517.4 588.5 690 709 Total Debt 1450.85 1671.02 1516.72 1362.51
EBITDA (%) 17.8 15 17.4 17.8 Deferred Tax Liability 279.3 284.9 290.5 296.4
Long-term Provision 27.09 27.6 28.2 28.8
Growth (%) 19.6 13.7 17.2 2.8
TOTAL SOURCES OF FUNDS 4903.7 5446.7 5679.3 5931.9
Depreciation 95.8 111.7 116.7 122.4
APPLICATION OF FUNDS
EBIT 421.6 476.8 573.3 586.6
Net Block 2009.6 2011.5 2055.2 2093.2
Other Income 82.2 90.1 98.8 109.4
Capital WIP 994.8 1192.7 1310.7 1428.8
Interest 46.6 72.9 74.5 67.3
LT Loans And Advances 177 193.3 197.2 201.1
PBT 457.3 493.9 597.8 628.7
Total Non-current Investments 1754.7 1874.7 1874.7 1874.7
Tax 121.1 121 149.4 157.2
Inventories 395.7 506.2 510.4 514.2
APAT 336.1 372.9 448.3 471.5 Debtors 104.6 107.7 108.6 109.4
Growth (%) 7 11 20.2 5.2 Cash and Cash Equivalent 560.1 574.6 585.5 606.8
EPS 53.1 58.9 70.8 74.4 Other Current Assets 178.8 236 294 367.3
Growth (%) 7 11 20.2 5.2 Total Current Assets 1239.1 1424.5 1498.7 1597.7
Source: Company, HDFC sec Research
Creditors 886.8 861.7 868.8 875.2
Other Current Liabilities & Provns 384.7 388.3 388.3 388.3
Total Current Liabilities 1271.6 1250 1257 1263.5
Net Current Assets -32.55 174.5 241.6 334.2
TOTAL APPLICATION OF FUNDS 4903.7 5446.7 5679.3 5931.9
Source: Company, HDFC sec Research

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Cash Flow Statement (Standalone) Key Ratios

Rs bn FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E
Reported PBT 457.25 493.96 597.7 628.72 PROFITABILITY %
Non-operating & EO Items -62.92 -90.09 -98.84 -109.34 EBITDA Margin 17.8 15 17.4 17.8
Interest Expenses 10.7 72.93 74.47 67.26 EBIT Margin 14.5 12.1 14.5 14.7
Depreciation 95.8 111.7 116.7 122.4 APAT Margin 11.6 9.5 11.3 11.8
RoE 11.1 11.3 12.3 11.7
Working Capital Change 205.3 -186.3 -49.9 -64.9
Core RoCE 29.5 27.9 29.1 26.8
Tax Paid -86.15 -121.02 -149.42 -157.18
RoCE 8.6 9.2 10 9.8
OPERATING CASH FLOW (a) 620 281.2 490.66 486.94
EFFICIENCY
Capex -247 -311.4 -278.4 -278.5
Tax Rate (%) 26.5 24.5 25 25
Free Cash Flow 373 -30.2 212.3 208.4
Fixed Asset Turnover (x) 0.5 0.6 0.6 0.6
Investments -327.4 -120 - -
Inventory (days) 50 47 47 47
Non-operating Income 82.2 90.1 98.8 109.3
Debtor (days) 13 10 10 10
Others
Other Current Assets (days) 22 22 27 24
INVESTING CASH FLOW ( b ) -492.19 -341.34 -179.56 -169.16
Payables (days) 112 80 80 80
Debt Issuance/(Repaid) 91.4 146.9 -103 -102.9
Net Debt/EBITDA 1.7 1.9 1.3 1.1
Interest Expenses -10.7 -72.93 -74.47 -67.26
Net D/E 0.3 0.3 0.2 0.2
FCFE 453.74 43.8 34.81 38.26
PER SHARE DATA (Rs)
Share Capital Issuance 1.25 - - - EPS 53.1 58.9 70.8 74.4
Dividend -39.2 -56.2 -67.6 -71.1 CEPS 68.2 76.5 89.2 93.8
FINANCING CASH FLOW ( c ) 42.8 17.8 -245 -241.3 Dividend 6.8 7.6 9.1 9.6
NET CASH FLOW (a+b+c) 170.6 -42.3 66.1 76.5 Book Value 497 547 608 670
EO Items, Others -19.3 - - - VALUATION
Source: Company, HDFC sec Research
P/E (x) 23 21.1 17.5 16.5
P/Cash EPS (x) 18 16.1 14 13
P/BV (x) 2.3 2.1 1.9 1.7
EV/EBITDA (x) 16 14.5 12.1 11.5
EV/Revenue (x) 2.8 2.1 2 2
Source: Company, HDFC sec Research

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Ratings Chart

R HIGH
E
T
U MEDIUM
R
N LOW
LOW MEDIUM HIGH
RISK

Ratings Explanation:

RATING Risk - Return BEAR CASE BASE CASE BULL CASE

IF RISKS MANIFEST
IF INVESTMENT
IF RISKS MANIFEST PRICE CAN FALL 15% &
LOW RISK - LOW RATIONALE FRUCTFIES
BLUE PRICE CAN FALL 20% IF INVESTMENT
RETURN STOCKS PRICE CAN RISE BY
OR MORE RATIONALE FRUCTFIES
20% OR MORE
PRICE CAN RISE BY 15%
IF RISKS MANIFEST
IF INVESTMENT
MEDIUM RISK - IF RISKS MANIFEST PRICE CAN FALL 20% &
RATIONALE FRUCTFIES
YELLOW HIGH RETURN PRICE CAN FALL 35% IF INVESTMENT
PRICE CAN RISE BY
STOCKS OR MORE RATIONALE FRUCTFIES
35% OR MORE
PRICE CAN RISE BY 30%
IF RISKS MANIFEST
IF INVESTMENT
IF RISKS MANIFEST PRICE CAN FALL 30% &
HIGH RISK - HIGH RATIONALE FRUCTFIES
RED PRICE CAN FALL 50% IF INVESTMENT
RETURN STOCKS PRICE CAN RISE BY
OR MORE RATIONALE FRUCTFIES
50% OR MORE
PRICE CAN RISE BY 30%

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Price Chart

1400

1200

1000 Reco Target

Reco Date Price Price Target Date
800 21-Oct-16 1064 1225 27-Feb-17
Ujjwal
600
26-Dec-18 1098 2019 -
400

200

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year.

Sell: Stock is expected to decline by 10% or more in the next 1 Year.

# Explanation of Red Flag Price Level: If the stock price sustains below red-flag, the premise of investment needs to be reviewed. Risk-averse investors
should exit the stock and preserve capital. The downside of following the red-flag level is that if the price decline turns out to be temporary and recovers
subsequently, you won’t be able to participate in the gains.

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Research Analyst: Kushal Rughani (kushal.rughani@hdfcsec.com)

HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 3075 3450 Compliance
Officer: Binkle R. Oza Email: complianceofficer@hdfcsec.com Phone: (022) 3045 3600
SEBI Registration No.: INZ000186937 (NSE, BSE, MSEI, MCX) |NSE Trading Member Code: 11094 | BSE Clearing Number: 393 | MSEI Trading Member Code: 30000 | MCX Member Code: 56015 | AMFI Reg No. ARN -13549, PFRDA Reg. No -
POP 04102015, IRDA Corporate Agent Licence No.-HDF2806925/HDF C000222657, Research Analyst Reg. No. INH000002475, CIN-U67120MH2000PLC152193.

Disclosure:
I, (Kushal Rughani, MBA), 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. HSL has no material
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