Pokarna Ltd.

Absolute : LONG
Relative : Overweight
3QFY18 Result: Estimate (), TP (), Rating () Regular Coverage 20% ATR in 17 Months
Earnings to bottom out in FY18 - retain LONG on attractive valuations Building Material
© 2018 Equirus All rights reserved
Pokarna’s (POKR) 3QFY18 consolidated revenue/EBITDA declined 1%/8% yoy to Change in Estimates:
Rating Information Rs 879mn/Rs 299mn, coming in lower than EE due to a change in the quartz product
Rs. Mn FY18E Chg (%) FY19E Chg (%)
Price (Rs) 212 mix, higher input prices in quartz and INR appreciation vs. USD. Granite revenues
Target Price (Rs) 266 improved somewhat though margins came in lower yoy amid continued competitive Sales 3,404 -8% 3,732 -9%
Target Date 30th Jun'19 pressures. We expect (a) continued headwinds for the granite segment over the next
EBITDA 1,075 -5% 1,257 -7%
Target Set On 18th Feb'18 few quarters and (b) capacity constraints for the quartz division till the new facility
Implied yrs of growth (DCF) 15 comes on stream, likely by 1HY20E-end. We cut our FY18/FY19 consolidated sales PAT 500 -10% 583 -14%

Fair Value (DCF) 236

estimates by 8%/9% but believe that earnings would bottom out in FY18 and so
maintain LONG on the stock with a Jun’19 TP of Rs 266 (Mar’19 of Rs 283 earlier) set Consolidated Financials
Fair Value (DDM) 189
at 13x TTM EPS of Rs 20.
Ind Benchmark BSETCD Rs. Mn YE Mar FY17A FY18E FY19E FY20E
Model Portfolio Position NA Quartz capacity nearing full utilization; new quartz plant to come up by 1HFY20- Sales 3,803 3,404 3,732 4,713
end: Quartz revenues declined 16% yoy due to POKR’s focus on lower volume and
EBITDA 1,319 1,075 1,257 1,666
Stock Information higher value-added products, and INR appreciation vs. USD. EBITDA margins improved
Depreciation 202 204 221 271
Market Cap (Rs Mn) 6,584 qoq (42% vs. 34% in 2Q18) but were down yoy (43% in 3Q17). POKR has launched some
new designs which received a good initial response and should fetch 10-15% higher Interest Expense 329 280 301 337
Free Float (%) 43.34 %
realizations vs. existing designs in CC terms. Management expects these products to Other Income 102 50 34 36
52 Wk H/L (Rs) 323.6/171
start contributing meaningfully by 4QFY18. We expect margins to remain slightly under Reported PAT 697 500 583 835
Avg Daily Volume (1yr) 92,489
pressure as resin and other chemical prices are seeing an uptrend. Recurring PAT 697 500 583 835
Avg Daily Value (Rs Mn) 22
Equity Cap (Rs Mn) 62 For the new quartz plant, POKR has finally bought a land parcel and all registrations Total Equity 1,642 1,956 2,315 2,926
are in place. However, we expect the plant to commence operations by 1HFY20-end Gross Debt 2,350 2,766 4,470 5,040
Face Value (Rs) 2
only, as it would take another 15-18 months to install the machinery post land Cash 275 516 599 653
Bloomberg Code POKR IN
acquisition. Revenue ramp-up would take place only once the new capacity comes on Rs Per Share FY17A FY18E FY19E FY20E
12M Recent 3M 3M stream as the current line is already operating at near-optimum utilization levels. We
Earnings 22.5 16.1 18.8 26.9
Promoters 56.7 % 0.0 % 0.0 % expect the company to post quartz revenue/EBITDA CAGR of 7%/8% over FY17-FY20E
and believe that EBITDAM will moderate to 42% in FY20 vs. 45% in FY17 amid stiff Book Value 53 63 75 94
DII 3.2 % -0.1 % 3.1 %
competition and increased input cost pressures. Dividends 3.0 5.0 6.0 6.0
FII 0.5 % 0.0 % -0.2 %
FCFF 34.4 6.0 -36.3 -3.4
Public 39.6 % 0.1 % -2.9 % Granite revenues pick up, but competition remains stiff in international markets:
During 3QFY18, granite revenues grew 23% yoy on the back of improved efficiencies P/E (x) 9.4 13.1 11.3 7.9
Price % 1M 3M 12M in quarry operations after the development phase, and some traction in granite P/B (x) 4.0 3.4 2.8 2.2
Absolute -8.4 % -7.9 % -6.2 % demand in the US market. Management intends to focus on maintaining margins by EV/EBITDA (x) 6.7 8.4 8.4 6.7
Vs Industry -1.6 % -8.5 % -30.5 % ramping up its cut-to-size (customized) business where margins are incrementally ROE (%) 53 % 28 % 27 % 32 %
Vs Aro Granite -16.4 % 1.1 % -10.5 % higher. We expect some margin stability to kick in over the next 2-3 quarters. Core ROIC (%) 23 % 16 % 14 % 15 %
Vs Asian Valuations & view: We believe POKR will be able to take advantage of the rapidly
-12.3 % 7.7 % 90.9 % EBITDA Margin (%) 35 % 32 % 34 % 35 %
Granito
expanding quartz countertop market in the US only after its new capacity gets Net Margin (%) 18 % 15 % 16 % 18 %
Consolidated Quarterly EPS forecast commissioned in 1HFY20, as the existing capacity is already at optimum level. We
Rs/Share 1Q 2Q 3Q 4Q expect POKR to post consolidated sales/EBITDA CAGR of 7%/8% over
EPS (17A) 5.9 6.6 6.0 4.0 FY17-FY20E but believe earnings would bottom out in FY18. Valuations remain cheap
EPS (18E) 1.8 4.2 4.7 5.5 at 7.9x FY20E EPS of Rs 27/share. Retain LONG.

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 1 of 14
Before reading this report, you must refer to the disclaimer on the last page.
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Company Snapshot Key Triggers: Pickup in the quartz business, revival in granite volumes and margin
expansion due to improved utilization in the quartz business and backward integration in
How we differ from Consensus the granite business.
- Equirus Consensus % Diff Comment
FY18E 16.1 - - There is not much active coverage on Sensitivity to Key Variables % Change % Impact on EPS
EPS the stock
FY19E 18.8 - - EBITDAM -1 % -5 %
FY18E 3,404 - - - - -
Sales
FY19E 3,732 - -
- - -
FY18E 500 - -
PAT
FY19E 583 - - DCF Valuations & Assumptions
Our Key Investment arguments: Rf Beta Ke Term. Growth Debt/IC in Term. Yr
6.8 % 1.0 12.8 % 2.5 % 66.1 %
Well-positioned to capture fast-growing quartz demand in the US but only post new
capacity commissioning by end of 1H20: We expect POKR to clock a 15% quartz revenue - FY18E FY19E FY20-22E FY23-27E FY28-32E
CAGR over FY17-FY21E led by (a) its status as an exclusive licensee of patented Breton Sales Growth -10 % 10 % 18 % 12 % 4%
Stone technology to manufacture high-grade export quality quartz, (b) distribution in NOPAT Margin 20 % 21 % 20 % 18 % 18 %
more than 20 countries, (c) increasing presence in higher-value quartz, and (d) higher IC Turnover 0.76 0.58 0.62 0.62 0.62
quartz sale under own brand, ‘Quantra’. RoIC 16.2 % 14.5 % 13.4 % 12.0 % 11.4 %

Tie-up with IKEA, incremental capex to boost quartz revenues from FY21E: We expect Years of strong growth 1 2 5 10 15
POKR to be a big beneficiary of IKEA’s entry into the Indian countertop market over the
Valuation as on date (Rs) 141 158 155 195 200
next 3-4 years. Capacity expansion by 130% in FY20E would remove capacity constraints
Valuation as of Jun'19 166 186 182 230 236
in the quartz division.
Based on DCF, assuming 15 years of 4% CAGR growth and 11% average ROIC, we derive
Valuations remain cheap at 7.9x FY20E EPS of Rs 27/share. our current fair value of Rs 200 and a Jun’19 fair value of Rs 236.

Key Estimates: Company Description: POKR, promoted by Mr. Gautam Chand Jain, is one of India’s
(Rs. Mn) FY17 FY18E FY19E FY20E leading granite exporters. It is the only granite company in India to be fully integrated
Granite Revenues 1,552 1,464 1,646 1,908 from quarries to marketing. It exports granite to over 49 countries around the world. The
Quartz Revenues 2,188 1,903 2,078 2,798
company, through its wholly-owned subsidiary M/s Pokarna Engineered Stone Ltd.,
manufactures ‘Natural Quartz Surfaces’ also known as ‘Engineered Stone’ or ‘Compound
Stone’. It is the only licensee of Breton Stone Technology in India for Quartz surfaces. It
Risk to Our View: Prolonged slowdown in the US housing market.
exports quartz surfaces to more than 20 countries across the globe.

Comparable valuation EPS P/E BPS P/B RoE Div Yield

Mkt Cap Price Target
Company Reco. CMP Rs. Mn. Target Date FY17A FY18E FY19E FY17A FY18E FY19E FY17A FY18E FY17A FY18E FY19E FY17A FY18E
Pokarna LONG 212 6,584 266 30th Jun'19 22.5 16.1 18.8 9.4 13.1 11.3 53.0 3.4 53 % 28 % 27 % 1.4 % 2.4 %
Aro Granite NR 68 1,039 NR NR 8.3 - - 8.2 - - 73.5 - 8% - - 1.0 % -
Asian Granito NR 517 15,543 NR NR 13.0 17.7 24.2 39.7 29.2 21.4 133.3 3.9 10 % 10 % 5% 0.1 % 0.3 %

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 2 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Consolidated Quarterly Performance

3QFY18 3QFY18E 2QFY18 3QFY17 % Change
Particulars Comments
3QFY18E 2QFY18 3QFY17
Net Sales 879 945 851 890 -7% 3% -1%

Raw Materials 186 233 197 175 -20% -6% 6%

Employee Cost 87 83 87 76 5% 1% 15%
Other Expenses 306 330 292 314 -7% 5% -2%

Total Expenditures 579 646 576 565 -10% 1% 3%

EBITDA 299 299 275 325 0% 9% -8%

Depreciation 51 52 50 44 -1% 3% 17%

EBIT 248 247 226 282 1% 10% -12%

Interest 77 70 72 82 10% 7% -6%
Other Income 14 13 15 32 11% -3% -55%

PBT 186 190 169 232 -2% 10% -20%

Tax 41 41 39 45 1% 7% -9%

PAT before MI & Associates 145 149 130 187 -3% 11% -22%
Minority Interest 0 0 0 0
Profit from Assoc. 0 0 0 0
Recurring PAT 145 149 130 187 -3% 11% -22%
Extraordinaries 0 0 0 0
Reported PAT 145 149 130 187 -3% 11% -22%
EPS (Rs) 4.7 4.8 4.2 6.0 -3% 11% -22%

EBITDA Margin 34% 32% 32% 37% 243 bps 171 bps -247 bps
EBIT Margin 28% 26% 27% 32% 211 bps 173 bps -339 bps
PBT Margin 21% 20% 20% 26% 104 bps 134 bps -489 bps
PAT Margin 17% 16% 15% 21% 69 bps 119 bps -450 bps
Tax Rate 22% 21% 23% 19% 60 bps -74 bps 262 bps

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 3 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Earnings call takeaways  POKR plans to switch its entire dollar-denominated loan and has already received
confirmations from two of its consortium banks, while the third one will sanction the
Segment performance overview new terms soon. Also, of the Rs 1.17bn loan, the company would be repaying
Consolidated (Rs mn) 9M18 9M17 %Growth Rs 350mn in the next 12 months.

Revenue 2,395 2,707 -12%  Competition from Brazil in the granite space remains stiff but granite consumption
itself is seeing some revival. The US market is fairly good and construction activity is
EBITDA 736 1,015 -28%
buoyant; while the market has migrated to quartz, some customers continue to
PAT 330 574 -42% prefer granite.
Granite (Rs mn)  In the US, the quartz market is seeing double-digit growth while other natural stone
Revenue 1,094 1,095 0% segments (marble, granite) are witnessing low, single-digit growth.

EBITDA 298 282 5%  Chinese products generally compromise on quality, which helps them sell at lower
ASPs. POKR is making efforts to educate Indian consumers on the quality aspect,
Capital Employed 1,060 980 8%
thereby justifying its premium pricing.
Quartz (Rs mn)
 POKR is maintaining an asset turnover ratio between 1x-1.25x. The quantum of
Revenue 1,313 1,636 -20% increment in this ratio cannot be ascertained at this juncture as it hinges on how the
EBITDA 479 753 -36% company brings in new products from the facility.
Capital Employed 2,310 2,220 4%  POKR is looking for expansion into new geographies such as India, Europe, and
Australia, which would get equal focus along with the US.

Quartz business – Capacity expansion

 Shutdown of the quartz facility for upgrades and modification during 1QFY18 coupled
with tough macro conditions (higher input prices, adverse currency movement) led to
revenue contraction in 9MFY18.  POKR has finally bought land in AP for its new engineering facility, and has
completed all registration procedures.
 The quartz facility operated at full capacity for a large part of the quarter and is
now fully operational.  It would take around 18 months to install the machinery and commission the plant.

 The granite business delivered strong revenues yoy due to an improvement in
efficiencies at quarries and overall traction in the US markets. Competitive intensity
continues and POKR expects the environment to improve gradually.
 Going forward, management intends to increase contribution from lower volume and
higher value-added products which would lead to better realizations. The company
has already launched newer product designs in the market and expects the
contribution from them to pick up from 4QFY18.
 The GST council has announced a tax rate cut on granite from 28% to 18%.
 POKR has a positive view on the business and is optimistic about new brand visibility;
a widening presence would reflect in the company’s quartz performance over the
medium term.
 It will take a couple of years for the entire Rs 2.5bn additional debt to come on the
balance sheet.
 The monitoring period in new capex debt would be 2+1 years, including construction,
once it is commenced.
Tie up with IKEA
 POKR has done a mock-up in Hyderabad for IKEA, as it wanted to display upcoming
shops.
 Volumes in the domestic market would be known only after IKEA gets launched.
 POKR is the exclusive vendor for IKEA.
 POKR is working on full capacity, and improving efficiency can give good returns.

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 4 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

New product launches Exhibit 2:Quartz revenue & EBITM trend

 POKR has launched new products in 3QFY18 and will continue to do so in 4QFY18 as
well; revenue generation would take another 3-6 months. Quartz revenue (Rs mn) Quartz EBITM (%)
700 60%
 With the market moving to natural-looking products, the company is focusing on
600 50%
improving the aesthetic value of products. If the currency is constant, value
migration for the new product will be 10-15%. 500
40%
 Generally it is difficult to increase product prices. Hence, the company goes for new 400
30%
product launches, which leads to better realizations in view of RM price increases. 300
20%
Exhibit 1:Granite revenue & EBITM trend 200

100 10%
Granite revenue (Rs mn) Granite EBITDAM (%)
600 35% 0 0%

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18
500 30%

25% Source: Company, Equirus Securities

400
20%
300
15%
200
10%
100 5%

0 0%
3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

Source: Company, Equirus Securities

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 5 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Industry update
 Global demand for countertops is projected to rise 2.3% annually through 2021, to
nearly 500mn square meters, according to the study Global Countertops by Material,
Market and Type, by The Freedonia Group. Strong advances in developing markets
such as China, India, and Brazil will account for majority of the demand, primarily
driven by kitchen market demand. Solid surface continues to be a global favorite,
with engineered stone fast tracking upward due to its style and durability.
 Kitchens remain the largest market for countertops. A separate Freedonia study
forecasts that U.S. countertop demand would reach US$ 29.3bn in 2019, with
engineered stone and natural stone accounting for majority of sales.
 Quartz is the most popular kitchen countertop material and trending up, while
granite, the second most popular countertop material, is trending down.
 In the US, quartz imports overtook granite imports during 3QCY17, with quartz
surfaces imports reaching US$ 270.2mn and granite imports US$ 262mn.
 Quartz imports continue to grow at 30%+ yoy. Additionally, the import data does not
reflect quartz surfaces being produced in the US by Cambria, Caesarstone and LG
Hausys America (under the Viatera® brand).
 For 1HCY17, in Worked Granite (cut, one side polished as determined by the USITC’s
2016 Harmonized Tariff Schedule), Brazil remains the market leader (both volume
and value wise), while China and India were at second and third places respectively.
As can be observed from tables below, realizations continue to see a downtrend due
to excessive competition from Brazilian players who are dumping their products in
the US markets.
 Caesarstone Ltd. highlighted the following in its 4QCY17 concall:

 Kitchen remodeling is among the most popular renovation projects in the US. On (1) There is stiff competition at the lower end of the quartz market from Chinese
average, homeowners spent US$ 19,100 on their kitchen renovation, according to a manufacturers. Customers are expecting a quick response from manufacturers
2017 Houzz & Home survey. and are not willing to wait out for products as was the case earlier, due to
availability from a lot of players,
Exhibit 3:Kitchen remodeling costs (2) With low-cost competition, a completely new market is emerging, which did not
exist before. People at the lower end of the housing market, who could not
Faucets &
Plumbing, 4% afford quartz earlier, have now started consuming quartz,
Design Fees, 4% Others, 1%
(3) Bigger manufacturers in the US, who till now used to focus only on premium
Doors & Windows, class of customers, are also thinking of establishing a presence at middle and
4% Cabinetry & lower levels via outsourcing in order to get better volumes and newer
Hardware, 29%
Walls & Ceilings, customers.
5%

Lighting, 5%

Installation, 17%
Flooring, 7%

Countertops, 10%
Appliances &
Ventilation, 14%

Source: Company, Equirus Securities

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 6 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Exhibit 4: Granite Import data for US market  For 9MCY17, China exported 41.8mn sq.ft of quartz to USA, posting a 57% increase
yoy, while Spain exported 14.2mn sq.ft, an increase of 29% yoy. Value-wise, China
Volumes (MT) 9MCY16 % 9MCY17 % Oct’17 % Nov’17 % exported US$ 330mn worth of quartz (+71% yoy) in 9MCY17 while Spain US$ 140mn
Brazil 588,958 48% 526,748 46% 61,899 49% 48,927 42% (+42% yoy). India exported 3.5mn sq.ft of quartz surfaces, up 3% yoy, while value-
China 314,509 26% 293,402 25% 31,809 25% 33,017 28% wise quartz exports stood at US$ 28mn, up 10% yoy.
India 177,890 15% 188,239 16% 18,145 14% 20,285 17%
Spain 46,899 4% 58,382 5% 6,434 5% 4,999 4% Exhibit 5: Data for 9MFY17 quartz imports shows strong volume/realization growth
Italy 40,168 3% 26,015 2% 3,408 3% 4,307 4% for China and Spain
Canada 29,865 2% 37,585 3% 3,382 3% 4,958 4%
ROW 20,314 2% 22,635 2% 1,681 1% 1,061 1% Volumes
9MCY16 % 9MCY17 % Oct’17 % Nov’17 %
Total 1,218,602 100% 1,153,007 100% 126,758 100% 117,554 100% ('000 Sq. ft.)
China 26,624 43% 41,853 52% 6,337 60% 6,005 58%
Spain 10,956 18% 14,176 17% 1,734 16% 1,312 13%
Granite Imports (USD Mn) 1HCY16 % 1HCY17 % yoy growth (%)
Israel 6,582 11% 6,683 8% 594 6% 1,170 11%
Brazil 266 47% 238 46% -10% Vietnam 4,105 7% 4,230 5% - - - -
China 135 24% 123 24% -9% Canada 4,368 7% 4,681 6% 581 5% 542 5%
India 3,450 6% 3,544 4% 649 6% 602 6%
India 82 15% 85 16% 3%
Turkey 1,442 2% 1,485 2% - - 178 2%
Spain 16 3% 17 3% 9% ROW 3,989 6% 4,551 6% 731 7% 510 5%
Italy 47 8% 41 8% -15% Total 61,516 100% 81,203 100% 10,628 100% 10,320 100%

Canada 11 2% 11 2% 0%
Quartz Imports (USD Mn) 9MCY16 9MCY17 yoy growth (%)
ROW 8 1% 6 1% -21%
China 193 330 71%
Total 565 100% 521 100% -8%
Spain 99 140 42%

Realizations ($/MT) 1HCY16 1HCY17 yoy growth (%) Israel 75 74 -1%

Brazil 686 671 -2% Vietnam 44 49 12%

China 629 643 2% Canada 50 46 -8%

India 724 716 -1% India 26 28 10%

Spain 546 481 -12% Turkey 12 15 20%

Italy 1,717 1,557 -9% ROW 56 50 -11%

Canada 569 463 -19% Total 554 730 32%

ROW 1,260 857 -32%

Total 708 687 -3%

Source: US International Trade Commission, Equirus Securities

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 7 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Realizations ($/sq.ft.) 9MCY16 9MCY17 yoy growth (%)

China 7 8 9%

Spain 9 10 9%

Israel 11 11 -3%

Vietnam 11 12 9%

Canada 11 10 -14%

India 7 8 7%

Turkey 8 10 16%

ROW 14 11 -22%

Total 9.0 9.0 0%

Source: US International Trade Commission, Equirus Securities

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 8 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Consolidated Quarterly Earnings Forecast and Key Drivers

Rs in Mn 1Q17A 2Q17A 3Q17A 4Q17A 1Q18A 2Q18A 3Q18A 4Q18E 1Q19E 2Q19E 3Q19E 4Q19E FY17A FY18E FY19E FY20E
Revenue 880 938 890 1,000 665 851 879 1,009 821 842 991 1,078 3,708 3,404 3,732 4,713
Raw Materials 195 182 175 218 132 197 186 219 178 182 212 227 771 735 799 995
Employee Cost 82 82 76 97 88 87 87 93 78 82 96 106 337 355 362 454
Other Expenses 282 304 314 356 284 292 306 357 289 294 347 384 1,255 1,239 1,314 1,597
EBITDA 321 369 325 329 161 275 299 339 275 284 336 361 1,344 1,075 1,257 1,666
Depreciation 44 43 44 51 49 50 51 54 54 54 56 56 182 204 221 271
EBIT 276 326 282 278 112 226 248 285 221 229 280 305 1,162 871 1,036 1,395
Interest 72 86 82 82 55 72 77 76 75 75 75 76 322 280 301 337
Other Income 20 21 32 38 12 15 14 8 8 8 8 9 111 50 34 36
PBT 224 261 232 235 69 169 186 217 154 162 213 238 952 640 768 1,094
Tax 41 57 45 56 14 39 41 47 37 39 51 58 192 140 185 259
PAT bef. MI & Assoc. 184 204 187 179 55 130 145 170 117 124 162 180 759 500 583 835
Minority Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Profit from Assoc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Recurring PAT 184 204 187 179 55 130 145 170 117 124 162 180 759 500 583 835
Extraordinaries 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Reported PAT 184 204 187 179 55 130 145 170 117 124 162 180 759 500 583 835
EPS (Rs) 5.92 6.57 6.03 5.78 1.77 4.20 4.68 5.49 3.77 3.99 5.23 5.80 24.29 16.14 18.80 26.94
Key Drivers
Granite revenue (Rs mn) - - - - - - - - - - - - 1,552 1,464 1,646 1,908
Quartz revenue (Rs mn) - - - - - - - - - - - - 2,188 1,903 2,078 2,798
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
Sequential Growth (%)
Revenue -14 % 7% -5 % 12 % -34 % 28 % 3% 15 % -19 % 3% 18 % 9% - - - -
Raw Materials -16 % -7 % -4 % 25 % -40 % 49 % -6 % 18 % -19 % 2% 16 % 7% - - - -
EBITDA -9 % 15 % -12 % 1% -51 % 71 % 9% 13 % -19 % 3% 18 % 8% - - - -
EBIT -9 % 18 % -14 % -1 % -60 % 102 % 10 % 15 % -22 % 4% 22 % 9% - - - -
Recurring PAT -20 % 11 % -8 % -4 % -69 % 137 % 11 % 17 % -31 % 6% 31 % 11 % - - - -
EPS -20 % 11 % -8 % -4 % -69 % 137 % 11 % 17 % -31 % 6% 31 % 11 % - - - -
Yearly Growth (%)
Revenue -9 % -5 % -8 % -3 % -24 % -9 % -1 % 1% 23 % -1 % 13 % 7% -7 % -8 % 10 % 26 %
EBITDA 11 % 17 % -14 % -6 % -50 % -25 % -8 % 3% 71 % 3% 12 % 7% 1% -20 % 17 % 33 %
EBIT 13 % 21 % -15 % -9 % -60 % -31 % -12 % 2% 98 % 2% 13 % 7% 1% -25 % 19 % 35 %
Recurring PAT 56 % 56 % -10 % -22 % -70 % -36 % -22 % -5 % 113 % -5 % 12 % 6% 20 % -34 % 16 % 43 %
EPS 56 % 56 % -10 % -22 % -70 % -36 % -22 % -5 % 113 % -5 % 12 % 6% 9% -34 % 16 % 43 %
Margin (%)
EBITDA 36 % 39 % 37 % 33 % 24 % 32 % 34 % 34 % 34 % 34 % 34 % 34 % 36 % 32 % 34 % 35 %
EBIT 31 % 35 % 32 % 28 % 17 % 27 % 28 % 28 % 27 % 27 % 28 % 28 % 31 % 26 % 28 % 30 %
PBT 25 % 28 % 26 % 23 % 10 % 20 % 21 % 21 % 19 % 19 % 22 % 22 % 26 % 19 % 21 % 23 %
PAT 21 % 22 % 21 % 18 % 8% 15 % 17 % 17 % 14 % 15 % 16 % 17 % 20 % 15 % 16 % 18 %

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 9 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Consolidated Financials
P&L (Rs Mn) FY17A FY18E FY19E FY20E Balance Sheet (Rs Mn) FY17A FY18E FY19E FY20E Cash Flow (Rs Mn) FY17A FY18E FY19E FY20E
Revenue 3,803 3,404 3,732 4,713 Equity Capital 62 62 62 62 PBT 890 640 768 1,094
Op. Expenditure 2,484 2,329 2,476 3,047 Reserve 1,580 1,894 2,253 2,864 Depreciation 202 204 221 271
EBITDA 1,319 1,075 1,257 1,666 Networth 1,642 1,956 2,315 2,926 Others 317 0 0 0
Depreciation 202 204 221 271 Long Term Debt 2,350 2,766 4,470 5,040 Taxes Paid 238 140 185 259
EBIT 1,117 871 1,036 1,395 Def Tax Liability 124 167 123 193 Change in WC -61 -39 -77 -249
Interest Expense 329 280 301 337 Minority Interest 0 0 0 0 Operating C/F 1,110 665 727 858
Other Income 102 50 34 36 Account Payables 279 256 274 335 Capex -311 -697 -2,080 -1,220
PBT 890 640 768 1,094 Other Curr Liabi 751 681 746 943 Change in Invest 0 0 0 0
Tax 192 140 185 259 Total Liabilities & Equity 5,146 5,825 7,928 9,437 Others 9 0 0 0
PAT bef. MI & Assoc. 697 500 583 835 Net Fixed Assets 2,670 2,610 2,469 5,921 Investing C/F -302 -697 -2,080 -1,220
Minority Interest 0 0 0 0 Capital WIP 28 503 2,000 0 Change in Debt -262 416 1,703 570
Profit from Assoc. 0 0 0 0 Others 439 517 1,020 517 Change in Equity 0 0 0 0
Recurring PAT 697 500 583 835 Inventory 976 877 951 1,201 Others -404 -143 -267 -154
Extraordinaires 0 0 0 0 Account Receivables 665 606 665 839 Financing C/F -666 273 1,436 416
Reported PAT 697 500 583 835 Other Current Assets 93 197 224 306 Net change in cash 142 241 83 54
FDEPS (Rs) 22.5 16.1 18.8 26.9 Cash 275 516 599 653 RoE (%) 53 % 28 % 27 % 32 %
DPS (Rs) 3.0 5.0 6.0 6.0 Total Assets 5,146 5,825 7,928 9,437 RoIC (%) 25 % 16 % 14 % 14 %
CEPS (Rs) 29.0 22.7 25.9 35.7 Non-cash Working Capital 704 743 820 1,068 Core RoIC (%) 23 % 16 % 14 % 15 %
FCFPS (Rs) 34.4 6.0 -36.3 -3.4 Cash Conv Cycle 67.6 79.7 80.2 82.7 Div Payout (%) 2% 37 % 38 % 27 %
BVPS (Rs) 53.0 63.1 74.7 94.4 WC Turnover 5.4 4.6 4.6 4.4 P/E 9.4 13.1 11.3 7.9
EBITDAM (%) 35 % 32 % 34 % 35 % FA Turnover 1.4 1.3 1.5 0.8 P/B 4.0 3.4 2.8 2.2
PATM (%) 18 % 15 % 16 % 18 % Net D/E 1.3 1.2 1.7 1.5 P/FCFF 6.2 35.1 -5.8 -62.5
Tax Rate (%) 22 % 22 % 24 % 24 % Revenue/Capital Employed 1.0 0.8 0.6 0.6 EV/EBITDA 6.7 8.4 8.4 6.7
Sales Growth (%) -5 % -10 % 10 % 26 % Capital Employed/Equity 3.0 2.5 2.8 2.9 EV/Sales 2.3 2.6 2.8 2.4
FDEPS Growth (%) 1% -28 % 16 % 43 % Dividend Yield (%) 1.4 % 2.4 % 2.8 % 2.8 %
TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE
600 100%
500
16x
15000 80% 8x 550 90%
450 EPS Growth 320% EBITDA Growth 7x
500 RoE 80%
400 280% 14x 12000 60% 7x 450
350 240% 400 70% 6x
9000 40% 6x
300 10x 350 60%
200% 5x
250 5x 300 50%
160% 6000 20% 250
200 8x 40% 4x
120% 3x 200 30%
150 3000 0% 150
80% 2x
100 6x 100 20%
50 40% 0 -20% 50 10%
- 0%
Mar/16
Jun/14

Mar/15
Jun/15

Jun/16

Mar/17
Jun/17

Mar/18
Jun/18

Mar/19
Jun/19
Sep/14

Sep/15

Sep/16

Sep/17

Sep/18
Dec/14

Dec/15

Dec/16

Dec/17

Dec/18

- 0%
Sep/14

Sep/15

Sep/16

Mar/18

Sep/18
Jun/14

Mar/15
Jun/15

Mar/16
Jun/16

Mar/17
Jun/17
Sep/17

Jun/18

Mar/19
Jun/19
Dec/14

Dec/15

Dec/16

Dec/17

Dec/18

Jun/14

Mar/15
Jun/15

Mar/16
Jun/16

Mar/17
Jun/17

Mar/18
Jun/18

Mar/19
Jun/19
Sep/14

Sep/15

Sep/16

Sep/17

Sep/18
Dec/14

Dec/15

Dec/16

Dec/17

Dec/18
February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 10 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Historical Consolidated Financials

P&L (Rs Mn) FY14A FY15A FY16A FY17A Balance Sheet (Rs Mn) FY14A FY15A FY16A FY17A Cash Flow (Rs Mn) FY14A FY15A FY16A FY17A
Revenue 2,306 3,264 3,986 3,803 Equity Capital 62 62 62 62 PBT -47 354 836 890
Op. Expenditure 1,842 2,428 2,657 2,484 Reserve 196 468 906 1,580 Depreciation 204 231 183 202
EBITDA 464 836 1,329 1,319 Networth 258 530 968 1,642 Others 350 343 388 317
Depreciation 204 231 183 202 Long Term Debt 2,770 2,598 2,446 2,350 Taxes Paid 23 33 122 238
EBIT 260 605 1,146 1,117 Def Tax Liability 179 252 212 124 Change in WC -637 -287 -230 -61
Interest Expense 318 322 368 329 Minority Interest 0 0 0 0 Operating C/F -153 608 1,055 1,110
Other Income 11 72 58 102 Account Payables 285 312 243 279 Capex -52 -157 -314 -311
PBT -47 354 836 890 Other Curr Liabi 773 618 825 751 Change in Invest 0 0 0 0
Tax -89 120 147 192 Total Liabilities & Equity 4,265 4,310 4,692 5,146 Others 6 6 7 9
PAT bef. MI & Assoc. 42 235 688 697 Net Fixed Assets 2,587 2,406 2,388 2,670 Investing C/F -47 -151 -307 -302
Minority Interest 0 0 0 0 Capital WIP 26 56 201 28 Change in Debt 350 -194 -186 -262
Profit from Assoc. 0 0 0 0 Others 184 177 226 439 Change in Equity 0 0 0 0
Recurring PAT 42 235 688 697 Inventory 799 772 886 976 Others -189 -212 -566 -404
Extraordinaires -75 -79 175 0 Account Receivables 533 693 785 665 Financing C/F 160 -406 -752 -666
Reported PAT 117 314 513 697 Other Current Assets 71 86 75 93 Net change in cash -40 51 -3 142
EPS (Rs) 1.4 7.6 22.2 22.5 Cash 65 120 132 275 RoE (%) 20 % 60 % 92 % 53 %
DPS (Rs) 2.0 3.0 3.0 3.0 Total Assets 4,265 4,310 4,692 5,146 RoIC (%) -8 % 14 % 28 % 25 %
CEPS (Rs) 7.9 15.0 28.1 29.0 Non-cash Working Capital 345 621 679 704 Core RoIC (%) -8 % 12 % 27 % 23 %
FCFPS (Rs) -15.6 21.6 33.9 34.4 Cash Conv Cycle 54.6 69.5 62.2 67.6 Div Payout (%) 12 % 7% 3% 2%
BVPS (Rs) 8.3 17.1 31.2 53.0 WC Turnover 6.7 5.3 5.9 5.4 P/E 156.0 28.0 9.6 0.0
EBITDAM (%) 20 % 26 % 33 % 35 % FA Turnover 0.9 1.3 1.5 1.4 P/B 25.5 12.4 6.8 0.0
PATM (%) 2% 7% 17 % 18 % Net D/E 10.5 4.7 2.4 1.3 P/FCFF -13.6 9.8 6.3 6.2
Tax Rate (%) 189 % 34 % 18 % 22 % Revenue/Capital Employed 0.8 1.2 1.3 1.2 EV/EBITDA 20.8 11.4 7.0 0.0
Sales growth (%) 13 % 42 % 22 % -5 % Capital Employed/Equity 7.2 14.8 14.6 8.4 EV/Sales 4.2 2.9 2.3 0.0
FDEPS growth (%) -123 % 457 % 193 % 1% Dividend Yield (%) 0.9 % 1.4 % 1.4 % 1.4 %

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 11 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

Equirus Securities
Research Analysts Sector/Industry Email Equity Sales E-mail
Abhishek Shindadkar IT Services abhishek.shindadkar@equirus.com 91-22-43320643 Vishad Turakhia vishad.turakhia@equirus.com 91-22-43320633
Ashutosh Tiwari Auto, Metals & Mining ashutosh@equirus.com 91-79-61909517 Subham Sinha subham.sinha@equirus.com 91-22-43320631
Depesh Kashyap Mid-Caps depesh.kashyap@equirus.com 91-79-61909528 Sweta Sheth sweta.sheth@equirus.com 91-22-43320634
Devam Modi Power & Infrastructure devam@equirus.com 91-79-61909516 Viral Desai viral.desai@equirus.com 91-22-43320635
Dhaval Dama FMCG, Mid-Caps dhaval.dama@equirus.com 91-79-61909518 Rushabh Shah rushabh.shah@equirus.com 91-22-43320632
Manoj Gori Consumer Durables manoj.gori@equirus.com 91-79-61909523 Dealing Room E-mail
Maulik Patel Oil and Gas maulik@equirus.com 91-79-61909519 Ashish Shah ashishshah@equirus.com 91-22-43320662
Praful Bohra Pharmaceuticals praful.bohra@equirus.com 91-79-61909532 Ilesh Savla ilesh.savla@equirus.com 91-22-43320666
Rohan Mandora Banking & Financial Services rohan.mandora@equirus.com 91-79-61909529 Manoj Kejriwal manoj.kejriwal@equirus.com 91-22-43320663
Associates E-mail Dharmesh Mehta dharmesh.mehta@equirus.com 91-22-43320661
Ankit Choudhary ankit.choudhary@equirus.com 91-79-61909533 Sandip Amrutiya sandipamrutiya@equirus.com 91-22-43320660
Bharat Celly bharat.celly@equirus.com 91-79-61909524 Compliance Officer E-mail
Harshit Patel harshit.patel@equirus.com 91-79-61909522 Jay Soni jay.soni@equirus.com 91-79-61909561
Meet Chande meet.chande@equirus.com 91-79-61909513 Corporate Communications E-mail
Nishant Bagrecha nishant.bagrecha@equirus.com 91-79-61909526 Mahdokht Bharda mahdokht.bharda@equirus.com 91-22-43320647
Parva Soni parva.soni@equirus.com 91-79-61909521
Pranav Mehta pranav.mehta@equirus.com 91-79-61909514
Ronak Soni Ronak.soni@equirus.com 91-79-61909525
Samkit Shah samkit.shah@equirus.com 91-79-61909520
Shreepal Doshi shreepal.doshi@equirus.com 91-79-61909541
Varun Baxi varun.baxi@equirus.com 91-79-61909527
Vikas Jain vikas.jain@equirus.com 91-79-61909531
Rating & Coverage Definitions: Registered Office:
Absolute Rating
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap > Rs 5 billion and ATR >= Equirus Securities Private Limited
20% for rest of the companies Unit No. 1201, 12th Floor, C Wing, Marathon Futurex,
• ADD: ATR >= 5% but less than Ke over investment horizon
• REDUCE: ATR >= negative 10% but <5% over investment horizon N M Joshi Marg, Lower Parel,
• SHORT: ATR < negative 10% over investment horizon Mumbai-400013.
Relative Rating
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• BENCHMARK: likely to perform in line with the benchmark Fax No: +91- (0)22 – 4332 0601
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon
Investment Horizon
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a Corporate Office:
calendar quarter.
Lite vs. Regular Coverage vs. Spot Coverage 3rd floor, House No. 9,
We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
would have access to the company and we would maintain detailed financial model for Regular coverage companies.
We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact S.G. Highway Ahmedabad-380054
the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for Gujarat
one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot
coverage is meant to stimulate discussion rather than provide a research opinion. Tel. No: +91 (0)79 - 6190 9550
Fax No: +91 (0)79 – 6190 9560

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 12 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

© 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not
be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited

Analyst Certification
I, Pranav Mehta, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also
certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures
Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the
Capital Market (Reg. No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock
Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154) and as Portfolio Manager under SEBI (Portfolio Managers
Regulations, 1993 (Reg. No. INP000005216). There are no disciplinary actions taken by any regulatory authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as
Category I Merchant Banker and provides investment banking services including but not limited to merchant banking services, private equity, mergers &acquisitionsandstructuredfinance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for
investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have
received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their
directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in
their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or
Associates 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 ESPL 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. ESPL has not been engaged in market making activity for the subject company.
The Research Analyst engaged in preparation of this Report:-
(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months;
(c)
has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not 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; (e) has not received any compensation or other benefits from the subject
company or third party in connection with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject
company.
This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ESPL and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein
may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession of this document are required to inform themselves of, and to observe, such applicable
restrictions. Please delete this document if you are not authorized to view the same. By reading this document you represent and warrant that you have full authority and all rights necessary to view and read this
document without subjecting ESPL and affiliates to any registration or licensing requirement within such jurisdiction.
This document has been prepared solely for information purpose and does not constitute a solicitation to any person to buy, sell or subscribe any security. ESPL or its affiliates are not soliciting any action based
on this report. The information and opinions contained herein is from publicly available data or based on information obtained in good faith from sources believed to be reliable but ESPL provides no guarantee as
to its accuracy or completeness. The information contained herein is as on date of this report, and is subject to change or modification and any such changes could impact our interpretation of relevant
information contained herein. While we would endeavour to update the information herein on reasonable basis, ESPL and its affiliates, their directors and employees are under no obligation to update or keep the
information current. Also there may be regulatory, compliance, or other reasons that may prevent ESPL and its group companies from doing so. This document is prepared for assistance only and is not intended
to be and must not alone be taken as the basis for an investment decision. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an
investment in the securities of companies referred to in this document including the merits and risks involved. This document is intended for general circulation and does not take into account the specific
investment objectives, financial situation or particular needs of any particular person. ESPL and its group companies, employees, directors and agents accept no liability, and disclaim all responsibility, for the
consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. ESPL/its affiliates do and seek to do business with
companies covered in its research report. Thus, investors should be aware that the firm may have conflict of interest.

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 13 of 14
 Pokarna Ltd Absolute –LONG Relative – Overweight 20% ATR in 17 Months

A graph of daily closing prices of securities is available at http://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and www.bseindia.com (Choose a company from the list on the browser and select the
“three years” period in the price chart).

Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest
Research Analyst’ or Relatives’ financial interest No
Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No
Research Analyst’ or Relatives’ material conflict of interest No

Disclaimer for U.S. Persons

ESPL/its affiliates are not a registered broker–dealer under the U.S. Securities Exchange Act of 1934, as amended (the“1934 act”) and under applicable state laws in the United States. In addition Equirus is not a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the “Acts”), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by Equirus, including the products and services described herein are not available to or intended
for U.S. persons. The information contained in this Report is not intended for any person who is a resident of the United States of America or a resident of any jurisdiction, the laws of which imposes prohibition
on soliciting the securities business in that jurisdiction without going through the registration requirements and/or prohibit the use of any information contained in this report. This Report and its respective
contents do not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services and/or shall not be considered as an advertisement tool. "U.S.
Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US
Persons" under certain rules.

February 18, 2018 Analyst: Pranav Mehta (+91-7574885494)/Dhaval Dama (+91-8128694102) Page 14 of 14