Berger Paints

India Equity Research | Consumers

June 5, 2017
Result Update Emkay
Your success is our success
©

Refer to important disclosures at the end of this report

CMP Target Price

Steady performance amid challenges; Rs 254

as of (6/5/2017)
Rs 245 (▲)
12 months

Retain Hold Rating

HOLD (■)
Upside
(3.5) %

Change in Estimates
 Inline performance - Consolidated revenue at Rs11.1bn, up 8.2% yoy; EBITDA up 3.5%
EPS Chg FY18E/FY19E (%) (0.4)/(1.1)
yoy to Rs 1.6bn; EBITDA margin at 13.8% (-70bps yoy); APAT at Rs1.1bn, +16% yoy
Target Price change (%) 6.5
 Decorative volume growth at ~11%. Have gained marginal market share (0.1-0.2%) in Target Period (Months) 12
FY17. General and Automotive business reported subdued performance while some uptick
Previous Reco HOLD
was seen in Protective coating aided by infra segment
Emkay vs Consensus
 Gross margin at 42.2%, down 180bps yoy, impacted by increase in input cost while EBITDA EPS Estimates
margins decline curtailed to 70bps yoy at 13.8% due to lower A&P spends. Have initiated FY18E FY19E
YTD’17 price increase of 5.5% to offset increasing in input cost Emkay 5.7 7.0
 We have largely kept our earnings unchanged, however we are enthused by healthy volume Consensus 5.3 6.4
performance in decorative segment despite challenging market condition. Berger Paint has Mean Consensus TP (12M) Rs 225
been consistently gaining market share and benefiting from mix improvement. We continue Stock Details
to maintain Hold rating with price target of Rs245/share (35x FY19E) Bloomberg Code BRGR IN
Face Value (Rs) 1
An in-line performance; volume growth at lower double digit Shares outstanding (mn) 971
Berger Paints Q4FY17 results performance of in line with our expectation on revenue as well
52 Week H/L 277 / 174
as profitability front. Key highlights: (1) Revenue at Rs 11.1bn, up 8.2% yoy with deco volume
M Cap (Rs bn/USD bn) 247 / 3.83
growth of ~11% yoy. International business also reported steady revenue growth of 13.8%
yoy (2) EBIDTA at Rs 1.6bn, up 3.5% yoy, Gross margin declined by 180bps yoy to 42.2%, Daily Avg Volume (nos.) 9,98,239
largely a function of higher input cost while EBITDA margin declined was curtailed to 70bps Daily Avg Turnover (US$ mn) 3.7
yoy at 14.5% due to lower other expenditure which grew by mere 1.8% yoy seems to be a
Shareholding Pattern Mar '17
function of lower A&P spends. (3) APAT at Rs1.1bn, grew 16% yoy.
Promoters 75.0%
Domestic decorative volumes grew ~11% led by market share gain FIIs 10.9%
Domestic revenue at Rs10.2bn, up 7.7% yoy, with ~11% volume growth in decorative paints, DIIs 3.2%
driven by new product launches and strong growth in advertised products & construction Public and Others 10.9%
chemicals. Have gained market share by 0.1-0.2% in domestic decorative business. General
Industrial and Automotive business reported subdued performance while Protective business Price Performance
lines saw some uptick especially in infra segment aided by initiatives taken by government. (%) 1M 3M 6M 12M
Tier-3 town had slowed down in Q4FY17 however Tier 1-2 saw healthy pick-up led by pent Absolute (1) 10 13 25
up demand post demonetization. There may be some glitch in demand during GST, however Rel. to Nifty (6) 2 (5) 7
post GST initiatives on distribution expansion and favorable macros should drive volume
uptick, we expect 15%/16% volume growth for FY18/19E.
Relative price chart
Rs % 30
Steady performance amid challenges; Retain Hold 275

We have largely kept our earnings unchanged; however we are enthused by healthy volume 250 22

performance in decorative segment despite challenging market condition. Berger Paint has been 225 14

consistently gaining market share and benefiting from mix improvement. We continue to 200 6

maintain Hold rating on stock with price target of 245/share (35x FY19E).
175 -2

Financial Snapshot (Consolidated) 150 -10

Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17
(Rs mn) FY15 FY16 FY17 FY18E FY19E Berger Paints (LHS) Rel to Nifty (RHS)

Revenue 43,221 42,231 45,523 55,781 67,175 Source: Bloomberg

EBITDA 5,221 6,447 7,186 8,936 10,954
This report is solely produced by Emkay Global. The
EBITDA Margin (%) 12.1 15.3 15.8 16.0 16.3 following person(s) are responsible for the
production of the recommendation:
APAT 2,647 3,706 4,294 5,516 6,802
EPS (Rs) 3.8 5.3 4.4 5.7 7.0 Amit Purohit
EPS (% chg) 6.1 40.0 (17.2) 28.5 23.3 amit.purohit@emkayglobal.com
ROE (%) 22.3 26.3 24.8 26.5 29.6 +91 22 66121340
P/E (x) 66.5 47.5 57.4 44.7 36.3 Dhaval Mehta
EV/EBITDA (x) 34.3 27.1 34.1 27.1 22.2 dhaval.mehta@emkayglobal.com
P/BV (x) 14.1 11.3 13.0 10.9 10.5 +91 22 66121284
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.
 Berger Paints (BRGR IN) India Equity Research | Result Update

Exhibit 1: Actual vs Estimates

Estimate Consensus % variation
(Rs mn) Actual Comment
(Emkay) estimate Emkay Consensus
Sales look lower due to IND-AS. Volume growth
Revenues 11129.0 12344.1 11805.0 -9.8% -5.7%
marginally higher than expected
EBITDA 1611.3 1684.1 1665.0 -4.3% -3.2%
EBITDA Margin (%) 14.5% 13.6% 14.1% 84 37 Increase in input costs impacted margins
APAT 1055.3 959.1 973.0 10.0% 8.5%
Source: Company, Emkay Research

Gross margins marred by higher inputs while EBITDA margins decline curtailed
by lower A&P
Gross margins at 41.6%, down 190bps yoy, impacted by firming of input costs. Company has
taken a price hike of ~5.5% YTD’17 to offset increase in inputs. EBITDA margins decline curtailed
to 70bps yoy at 15.5% aided by lower other expenses (grew by mere 1.4% yoy) a function of
lower distribution & marketing spends. International operations’ profitability was steady with
gross margin of 48.7% (+110bps yoy) and EBITDA margin at 4.1% (+10bps yoy). While input
cost is drifting down from Q4FY17 levels, we believe from here on drivers for margin expansion
are volume traction and a better product mix.

Enters into specialty liquid coating segment through acquisition of Saboo

Coatings Pvt. Ltd.
Berger paints acquired Saboo Coatings Pvt. Ltd. (SCPL) at a consideration of Rs 818mn to foray
into specialty liquid coating segment. SCPL is in manufacturing of specialty liquid coating in
segments of agriculture & construction equipment, consumer electronics, automotive, general
industrial, hardware and home furnishing. The total revenue of the company was Rs 894mn in
FY17.

Berger Paints also acquired Saboo Hesse Wood Coatings Pvt. Ltd. (SHWCPL) 51% stake in a
JV with Hesse Shares GmbH of Germany which hold remaining 49%. The company is in wood
coating business and the stake is acquired at a consideration of Rs 15mn.

International subsidiaries clock healthy growth; operating performance also

improves
International subsidiary grew by 13.7% yoy in Q4FY17 led by healthy growth in Nepal, Bolix S.A.
and Becker coatings. Both Nepal and Bolix S.A showed an improvement in performance on both
revenue as well as profitability front. For FY18, the company is optimistic of steady improvement
in International operations and its JV with Nippon should give a fillip to its automotive coating
business.

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.

June 5, 2017 2
 Berger Paints (BRGR IN) India Equity Research | Result Update

Exhibit 2: Revision Of Earnings Estimate

FY18E FY19E
Y/E, Mar (Rs. mn) Earlier Revised % Change Earlier Revised % Change
Revenues 54,020 55,781 3.3 63,732 67,175 5.4
EBITDA 8,978 8,936 -0.5 10,900 10,954 0.5
EBITDA Margin (%) 16.6 16.0 -60 bps 17.1 16.3 -80 bps
APAT 5,535 5,516 -0.3 6,875 6,802 -1.1
EPS 5.7 5.7 -0.4 7.1 7.0 -1.1
Source: Company, Emkay Research

Exhibit 3: Key Growth Assumptions

FY14 FY15 FY16 FY17 FY18E FY19E
Volume Growth 8.1% 9.5% 13.5% 9.4% 14.7% 15.9%
Source: Company, Emkay Research

Exhibit 4: Quarterly Summary - Consolidated

QoQ YTD YTD
Y/E, Mar (Rs. m) Q4FY16 Q3FY17 Q4FY17 YoY (%) Gr (%)
(%) 'FY17 'FY16
Revenue 10,285 11,746 11,129 8.2 -5.2 45,523 42,231 7.8
Expenditure 8,728 9,910 9,518 9.1 -4.0 38,337 35,784 7.1
Consumption of RM 5,759 6,838 6,435 11.7 -5.9 25,923 24,702 4.9
as % of sales 56.0 58.2 57.8 56.9 58.5
Employee Cost 689 798 763 10.8 -4.3 3,067 2,735 12.1
as % of sales 6.7 6.8 6.9 6.7 6.5
Other expenditure 2,280 2,274 2,320 1.8 2.0 9,347 8,347 12.0
as % of sales 22.2 19.4 20.8 20.5 19.8
EBITDA 1,557 1,836 1,611 3.5 -12.2 7,186 6,447 11.5
Depreciation 254 272 275 8.3 1.3 1,081 997 8.4
EBIT 1,303 1,564 1,336 2.6 -14.6 6,105 5,450 12.0
Other Income 109 81 180 65.1 121.1 545 347 57.3
Interest 46 44 40 -14.3 -10.0 162 273 -40.5
PBT 1,366 1,601 1,476 8.1 -7.8 6,488 5,524 17.5
Total Tax 474 524 446 -5.8 -14.8 2,144 1,886 13.7
Adjusted PAT 892 1,078 1,030 15.5 -4.4 4,344 3,638 19.4
(Profit)/loss from
-18 -14 -25 - - -101 -57 -
JV's/Ass/MI
APAT after MI 910 1,091 1,055 16.0 -3.3 4,445 3,695 20.3
Extra ordinary items 0 0 0 - - 292 0 -
Reported PAT 910 1,091 1,055 16.0 -3.3 4,153 3,695 12.4
Adjusted EPS 0.9 1.1 1.1 -17.2 -3.3 4.6 3.8 20.3

YTD YTD
Margins (%) Q4FY16 Q3FY17 Q4FY17 (bps) (bps) (bps)
'FY17 'FY16
EBIDTA 15.1 15.6 14.5 -70 -110 15.8 15.3 50
EBIT 12.7 13.3 12.0 -70 -130 13.4 12.9 50
EBT 13.3 13.6 13.3 0 -40 14.3 13.1 120
PAT 8.8 9.3 9.5 60 20 9.8 8.7 100
Effective Tax rate 34.7 32.7 30.2 -450 -250 33.1 34.1 -110
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.

June 5, 2017 3
 Berger Paints (BRGR IN) India Equity Research | Result Update

Key Financials (Consolidated)

Income Statement
Y/E Mar (Rs mn) FY15 FY16 FY17 FY18E FY19E
Revenue 43,221 42,231 45,523 55,781 67,175
Expenditure 38,000 35,784 38,337 46,845 56,221
EBITDA 5,221 6,447 7,186 8,936 10,954
Depreciation 925 987 1,081 1,227 1,353
EBIT 4,296 5,461 6,105 7,709 9,601
Other Income 246 347 545 627 553
Interest expenses 501 273 162 166 166
PBT 4,041 5,535 6,487 8,169 9,987
Tax 1,394 1,886 2,294 2,726 3,269
Extraordinary Items 0 0 442 0 0
Minority Int./Income from Assoc. 0 0 0 0 0
Reported Net Income 2,647 3,706 4,736 5,516 6,802
Adjusted PAT 2,647 3,706 4,294 5,516 6,802

Balance Sheet
Y/E Mar (Rs mn) FY15 FY16 FY17 FY18E FY19E
Equity share capital 694 694 971 971 971
Reserves & surplus 11,913 14,927 18,045 21,683 22,420
Net worth 12,606 15,621 19,016 22,654 23,391
Minority Interest 0 0 0 0 0
Loan Funds 6,088 3,095 4,062 4,062 3,322
Net deferred tax liability 579 625 707 707 687
Total Liabilities 19,273 19,342 23,784 27,423 27,400
Net block 9,307 9,629 11,359 12,463 10,015
Investment 1,345 3,475 4,721 4,721 2,992
Current Assets 15,433 15,074 17,545 21,457 25,233
Cash & bank balance 1,698 1,053 1,025 3,566 3,931
Other Current Assets 118 1,032 1,134 1,134 2
Current liabilities & Provision 7,886 9,348 10,464 11,839 11,845
Net current assets 7,547 5,726 7,082 9,618 13,388
Misc. exp 70 0 0 0 0
Total Assets 19,273 19,342 23,784 27,424 27,400

Cash Flow
Y/E Mar (Rs mn) FY15 FY16 FY17 FY18E FY19E
PBT (Ex-Other income) (NI+Dep) 3,794 5,188 5,943 7,542 9,434
Other Non-Cash items (90) (23) 82 0 0
Chg in working cap (1,512) 1,223 (1,302) 6 (3,426)
Operating Cashflow 3,454 5,999 3,993 6,685 5,283
Capital expenditure (1,265) (815) (2,922) (2,330) 712
Free Cash Flow 2,189 5,183 1,071 4,355 5,995
Investments (438) (2,131) (1,246) 0 1,730
Other Investing Cash Flow (372) (360) (545) (627) (5,221)
Investing Cashflow (1,829) (2,960) (4,169) (2,330) (2,227)
Equity Capital Raised 23 (31) 278 0 0
Loans Taken / (Repaid) 806 (2,993) 967 0 (741)
Dividend paid (incl tax) (1,169) (1,327) (1,466) (1,877) (3,253)
Other Financing Cash Flow (927) 63 141 157 824
Financing Cashflow (1,768) (4,561) (243) (1,886) (3,335)
Net chg in cash (143) (1,522) (419) 2,469 (279)
Opening cash position 1,841 1,698 1,053 1,025 3,566
Closing cash position 1,697 176 634 3,493 3,287
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.

June 5, 2017 4
 Berger Paints (BRGR IN) India Equity Research | Result Update

Key Ratios
Profitability (%) FY15 FY16 FY17 FY18E FY19E
EBITDA Margin 12.1 15.3 15.8 16.0 16.3
EBIT Margin 9.9 12.9 13.4 13.8 14.3
Effective Tax Rate 34.5 34.1 35.4 33.4 32.7
Net Margin 6.1 8.6 9.2 9.8 10.0
ROCE 25.1 30.1 30.9 32.6 37.1
ROE 22.3 26.3 24.8 26.5 29.6
RoIC 30.6 37.1 38.5 42.9 50.6

Per Share Data (Rs) FY15 FY16 FY17 FY18E FY19E

EPS 3.8 5.3 4.4 5.7 7.0
CEPS 5.1 6.8 5.5 6.9 8.4
BVPS 18.1 22.5 19.6 23.3 24.1
DPS 1.5 1.9 1.5 1.9 3.4

Valuations (x) FY15 FY16 FY17 FY18E FY19E

PER 66.5 47.5 57.4 44.7 36.3
P/CEPS 49.3 37.5 45.9 36.6 30.2
P/BV 14.1 11.3 13.0 10.9 10.5
EV / Sales 4.1 4.1 5.4 4.3 3.6
EV / EBITDA 34.3 27.1 34.1 27.1 22.2
Dividend Yield (%) 0.6 0.8 0.6 0.8 1.3

Gearing Ratio (x) FY15 FY16 FY17 FY18E FY19E

Net Debt/ Equity 0.2 (0.1) (0.1) (0.2) (0.2)
Net Debt/EBIDTA 0.6 (0.2) (0.2) (0.5) (0.3)
Working Cap Cycle (days) 49.4 40.4 48.6 39.6 51.4

Growth (%) FY15 FY16 FY17 FY18E FY19E

Revenue 11.7 (2.3) 7.8 22.5 20.4
EBITDA 19.3 23.5 11.4 24.4 22.6
EBIT 17.0 27.1 11.8 26.3 24.5
PAT 6.1 40.0 27.8 16.5 23.3

Quarterly (Rs mn) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

Revenue 11,297 11,182 11,466 11,746 11,129
EBITDA 1,594 1,951 1,788 1,836 1,611
EBITDA Margin (%) 14.1 17.4 15.6 15.6 14.5
PAT 928 1,202 1,096 1,091 1,055
EPS (Rs) 1.0 1.2 1.1 1.1 1.1
Source: Company, Emkay Research

Shareholding Pattern (%) Jun-16 Aug-16 Sep-16 Dec-16 Mar-17

Promoters 75.0 75.0 75.0 75.0 75.0
FIIs 12.2 12.3 12.2 6.6 10.9
DIIs 2.3 2.3 2.3 7.7 3.2
Public and Others 10.5 10.5 10.5 10.8 10.9
Source: Capitaline

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.

June 5, 2017 5
 Berger Paints (BRGR IN) India Equity Research | Result Update

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

Closing Period
Date TP Rating Analyst BUY Hold Sell
Price (months) Accumulate Reduce Price
Target Price
13-Feb-17 222 230 12m Hold Amit Purohit 400
04-Nov-16 260 240 12m Reduce Amit Purohit
336
08-Aug-16 235 205 12m Reduce Amit Purohit
272
15-Jul-16 222 195 12m Hold Amit Purohit
208
02-Jun-16 203 195 12m Hold Prashant Kutty
09-Feb-16 185 280 12m Accumulate Prashant Kutty 144

24-Dec-15 179 236 12m Accumulate Prashant Kutty 80

05-Dec-14

02-Dec-15

28-Nov-16
31-May-16

28-May-17
07-Jun-14

04-Jun-15
10-Nov-15 157 236 12m Accumulate Prashant Kutty
12-Aug-15 159 245 12m Accumulate Prashant Kutty
02-Jun-15 144 215 12m Accumulate Prashant Kutty Source: Bloomberg, Company, Emkay Research
04-Feb-15 153 230 12m Accumulate Prashant Kutty
10-Nov-14 128 400 12m Accumulate Prashant Kutty
08-Aug-14 108 355 12m Accumulate Pritesh Chheda
06-Jun-14 89 280 12m Accumulate Pritesh Chheda
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.

June 5, 2017 6
 Berger Paints (BRGR IN) India Equity Research | Result Update

Emkay Rating Distribution

BUY Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months.
ACCUMULATE Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months.
HOLD Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months.
REDUCE Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months.
SELL The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.

Emkay Global Financial Services Ltd.

CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com

DISCLAIMERS AND DISCLOSURES: Emkay Global Financial Services Limited (CIN-L67120MH1995PLC084899) and its affiliates are a full-service, brokerage, investment banking, investment
management and financing group. Emkay Global Financial Services Limited (EGFSL) along with its affiliates are participants in virtually all securities trading markets in India. EGFSL was established in 1995
and is one of India's leading brokerage and distribution house.EGFSL is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited(NSE), MCX Stock
Exchange Limited (MCX-SX).EGFSL along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail),
merchant banking, commodity broking, depository participant, portfolio management, insurance broking and services rendered in connection with distribution of primary market issues and financial products
like mutual funds, fixed deposits. Details of associates are available on our website i.e. www.emkayglobal.com

EGFSL is registered as Research Analyst with SEBI bearing registration Number INH000000354 as per SEBI (Research Analysts) Regulations, 2014. EGFSL hereby declares that it has not defaulted with
any stock exchange nor its activities were suspended by any stock exchange with whom it is registered in last five years, except that NSE had disabled EGFSL from trading on October 05, October 08 and
October 09, 2012 for a manifest error resulting into a bonafide erroneous trade on October 05, 2012. However, SEBI and Stock Exchanges have conducted the routine inspection and based on their
observations have issued advice letters or levied minor penalty on EGFSL for certain operational deviations in ordinary/routine course of business. EGFSL has not been debarred from doing business by
any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by SEBI at any point of time.

EGFSL offers research services to clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject
company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.

Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject
company(s) covered in this report-:

EGFSL or its associates may have financial interest in the subject company.

Research Analyst or his/her relative’s financial interest in the subject company. (NO)

EGFSL or its associates and Research Analyst or his/her relative’s does not have any material conflict of interest in the subject company. The research Analyst or research entity (EGFSL) have not been
engaged in market making activity for the subject company.

EGFSL or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report.

Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research
Report: (NO)

EGFSL or its associates may have received any compensation including for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or its
associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or
its associates may have received any compensation or other benefits from the Subject Company or third party in connection with the research report. Subject Company may have been client of EGFSL or
its associates during twelve months preceding the date of distribution of the research report and EGFSL may have co-managed public offering of securities for the subject company in the past twelve months.

The research Analyst has served as officer, director or employee of the subject company: (NO)

The Research Analyst has received any compensation from the subject company in the past twelve months: (NO)

The Research Analyst has managed or co‐managed public offering of securities for the subject company in the past twelve months: (NO)

The Research Analyst has received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months: (NO)

The Research Analyst has received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months:
(NO)

The Research Analyst has received any compensation or other benefits from the subject company or third party in connection with the research report: (NO)

EGFSL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our salespeople, traders, and other professionals may provide
oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make
investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give
rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the
subject of this material is provided herein. This report is not directed to, 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 or regulation or which would subject EGFSL or its group companies to any registration or licensing requirement
within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any
transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by
private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may
be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of EGFSL . All trademarks, service marks and logos used in this report are trademarks
or registered trademarks of EGFSL or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized
reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Pl ease 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. In so far as this report includes current or historic information, it is believed
to be reliable, although its accuracy and completeness cannot be guaranteed.

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. www.emkayglobal.com
June 5, 2017 7