Company Update | Consumer goods

October 28, 2011

Hitachi Home & Life Solutions

Performance Highlights
Y/E March (` cr)
Net sales EBITDA EBITDA margin (%)

BUY
CMP Target Price `165 `212
12 Months
Angel est.
139 9

2QFY12
128 2 1.6 (7)

2QFY11
131 11 8.7 5

% chg (yoy)
(2.1) (81.9) (705)bp (255.0)

% diff
(8.3) (76.7)

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

6.3 (472)bp 3 (338.9)

Reported PAT
Source: Company, Angel Research

Hitachi Home & Life Science Solutions (HHLS) reported disappointing 2QFY2012 results. The companys revenue declined marginally by 2.1% yoy to `128cr in 2QFY2012. On the profitability front, the company reported a loss of `7cr (includes forex loss of `7.8cr) in 2QFY2012 as compared to a profit of `5cr in 2QFY2011. We maintain our FY2013E earnings estimates at `41cr while EBITDA margins are expected to improve from 7.4% in FY2011 to 7.8% in FY2013E due to better operating leverage. We maintain our Buy recommendation on the stock. Below-expectation performance: Net sales declined by 2.1% yoy to `128cr. EBITDA margin came in at 1.6% in 2QFY2012, down 705bp yoy from 8.7% in 2QFY2011, on the back of higher other expenses and employee expenses. On the bottom-line front, the company reported a loss of `7cr mainly due to forex loss of `7.8cr on ECB. Outlook and valuation: We expect HHLS to post a 15% CAGR growth over FY2011-13E, aided by a 14.7% CAGR volume growth for the same period due to increasing per capita income. Copper prices have seen a decline of ~20% in the past six months, which will lead to increased margins going ahead. PAT is expected to grow at a CAGR of 17.6% over FY2011-13E to `41cr in FY2013E. At `165, HHLS is trading at 9.3x FY2013E earnings and P/B of 1.7x for FY2013E. We maintain our Buy recommendation on the stock with a target price of `212, based on a target PE of 12x for FY2013E.

Consumer goods 387 1.2 327 / 136 38,165 10 16,937 5,092 HITA.NS HTHL IN

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 69.9 11.2 0.6 18.4

Abs.(%) Sensex HHLS

3m

1yr

3yr

(8.5) (14.8) (39.6) (14.9) (46.2) 134.0

Key financials
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x) FY2010 640 36.1 46 113.3 9.1 20.0 8.2 2.6 36.6 25.2 0.6 7.1 FY2011 763 19.3 29 (36.2) 7.4 12.8 12.9 2.2 18.4 16.9 0.6 8.3 FY2012E 851 11.5 11 (62.1) 5.3 4.8 34.0 2.1 6.3 10.1 0.5 10.3 FY2013E 1010 18.7 41 264.6 7.8 17.7 9.3 1.7 20.5 19.8 0.5 5.9

Shareen Batatawala
30940000 ext: 6849 shareen.batatawala@angelbroking.com

Source: Company, Angel Research; Note: Price as on October 20, 2011

Please refer to important disclosures at the end of this report

HHLS | Company Update

Exhibit 1: 2QFY2012 performance

Y/E March (` cr) Net Sales Net raw material (% of Sales) Staff Costs (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM Interest (incl. forex losses) Depreciation Other Income PBT (% of Sales) Tax (% of PBT) Reported PAT PATM Equity capital (cr) EPS (`)
Source: Company, Angel Research

2QFY2012 128 80 62.7 13 9.8 33 25.9 126 2 1.6 8 4 0 (11) (8.3) (3) 31.7 (7) (5.7) 23 (3.2)

2QFY2011 131 81 62.2 10 7.4 28 21.8 119 11 8.7 3 4 1 7 5.2 2 31.2 5 3.6 23 2.0

yoy chg (%) (2.1) (1.3) 29.9 16.4 5.4 (81.9) 189.9 17.7 (94.1) (256.0) (258.2) (255.0)

1QFY2012 328 224 68.4 12 3.6 66 20.1 302 26 7.9 3 5 0 19 5.8 6 30.7 13 4.0 23

qoq chg (%) (61.0) (64.3) 6.1 (49.9) (58.4) (92.1) 224.9 (5.4) (77.8) (156.2) (158.1) (155.4)

1HFY2012 1H20FY11 456 305 66.8 24 5.3 99 21.7 428 28 6.1 11 9 0 18 3.9 2 13.7 15 3.3 23 436 274 62.8 19 4.4 78 17.9 371 65 14.9 11 7 1 47 10.8 6 13.5 41 9.3 23 17.7

% chg 4.5 11.2 25.6 26.8 15.2 (56.9) (2.8) 21.5 (61.5) 12.6 (61.7) (66.8)

(255.0)

5.7

(155.4)

6.6

(66.8)

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

Actual (` cr) Net Sales EBITDA EBIDTA margin Adjusted PAT
Source: Company, Angel Research

Estimate (` cr) 139 9 6.3 3

Variation (%) (8.3) (76.7) (472bp) (338.9)

128 2 1.6 (7)

For 2QFY2012, HHLS reported a 2.1% yoy decline in its revenue to `128cr (8.3% below our estimate of `139cr). The companys EBITDA margin witnessed a dip of 705bp yoy as compared to 2QFY2011 on the back of ~30% yoy increase in employee expenses. Further, the company reported a loss of `7cr in 2QFY2012 as compared to profit of `5cr in 2QFY2011 due to higher forex losses and increased total expenditure.

October 28, 2011

HHLS | Company Update

Investment rationale
Penetration opportunity in the RAC market in India
Penetration levels for the room air conditioner (RAC) market in India is currently at 3%, which is very low compared to other countries such as China, Malaysia, Korea and Taiwan. China has a 20% penetration rate, while penetration in the US stands at 90%. Per capita income in India grew at a CAGR of 15% over FY2006-11 from `27,123 in FY2006 to `54,835 in FY2011. On a conservative basis, we expect per capita income to grow at a CAGR of 13% over FY2011-13E.

Exhibit 3: Per capita income vs. RAC sales volume for HHLS
80 70 60 350 300 250

(` in '000)

50 40 30 20 10 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E AC volume (RHS) Per Capita Income (LHS)

('000 units)

200 150 100 50 0

Source: RBI, Angel Research

Innovation and energy-efficient products to drive growth

Growing concerns about global warming, surging electricity prices and increasing calls to use energy-efficient products by the government have spurred the demand for star-rated appliances in the country. The company launched i-Clean with automatic filter clean technology with high energy efficiency with a five-star rating. The company has been continuously spending on R&D to come up with innovative products.

Entry into tier-II and tier-III cities with low-price split AC Kaze
HHLS, which caters to the premium segment, has entered the low-price home air-conditioner segment with the launch of Kaze, with a two-star and three-star rating to cater to the medium-class mass-segment market. The company has increased its presence from 236 towns in June 2010 to ~300 towns currently and is increasing its dealer and distributer base as well.

October 28, 2011

HHLS | Company Update

Assumptions
Growth in air conditioner offtake is dependent on the per capita income of families in India. Due to the slowdown in the economy, we have assumed a CAGR of 13% for FY2011-13E as compared to 15% over FY2006-11 due to which AC sales volume is expected to grow by 9.7% in FY2012E and 20.1% in FY2013E.

Exhibit 4: Key assumptions

FY2012E Air conditioner volume growth (%) Change in MRP of air conditioners (%) Change in copper price (%) Change in price of CRCA sheets (%)
Source: Angel Research

FY2013E 20.1 1.0 8.0 4

9.7 3.0 (10.0) (7)

Exhibit 5: Change in estimates

Y/E March Net sales (` cr) OPM (%) EPS (`)
Source: Angel Research

Earlier estimates FY2012E 871 6.0 12.0 FY2013E 1040 7.1 17.7

Revised estimates FY2012E 851 5.3 4.8 FY2013E 1010 7.8 17.7

% chg FY2012E (2.3) (71bps (59.6) FY2013E (2.9) )71bps (0.2)

October 28, 2011

HHLS | Company Update

Financial performance
We expect the company to post revenue CAGR of 15% over FY2011-13E, from `763cr in FY2011 to `1,010cr in FY2013E, on the back of volume growth of 14.7% (CAGR) over FY2011-13E for air conditioners. EBITDA margin is expected to improve in FY2013E due to stable raw-material prices to 7.8% of sales in FY2013E from 7.4% of sales in FY2011. The companys earnings are expected to bounce back to `41cr in FY2013E from `29cr and `11cr in FY2011 and FY2012E, respectively.

Exhibit 6: Revenue and Revenue growth

1200 1000 30 800 40

(%)

(` cr)

600 400

20

10 200 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E Revenue growth (RHS) Revenue (LHS)
Source: Company, Angel Research

Exhibit 7: EBITDA and EBITDA margin

90 80 70 60 50 40 30 20 10 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E EBITDA (LHS) EBITDA margin (RHS) 12 10 8

Exhibit 8: PAT and PAT growth

50 40 30 20 10 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E PAT (LHS) PAT growth (RHS) 300 250 200 150 100 50 0 -50 -100

(` cr)

(` cr)

(%)

(%)

6 4 2 0

Source: Company, Angel Research

Source: Company, Angel Research

October 28, 2011

HHLS | Company Update

Outlook and valuation

We have revised our revenue estimates downwards; however, we maintain our earnings estimates, considering easing raw-material prices (i.e., copper and CRCA sheets). We expect revenue to post a CAGR of 15% over FY2011-13E and EBITDA margin to increase by 43bp over FY2011-13E from 7.4% in FY2011 to 7.8% in FY2013E. Profit is expected to bounce back in FY2013E to `41cr from `29cr in FY2011. At current levels, the stock is trading at PE of 9.3x FY2013E and P/B of 1.7x for FY2013E. We maintain our Buy recommendation on the stock with a target price of `212, based on a target PE of 12x for FY2013E.

Exhibit 9: One-year forward PE

400 350 300 250 200 150 100 50 0

(`)

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Apr-11

Price
Source: Company, Angel Research

4x

8x

12x

16x

Channel check
We interacted with 5-6 dealers of HHLS. The channel check revealed that the air conditioner sales volume has been flat to slightly positive compared to last year. There has been a slight increase in prices of Hitachi Air Conditioners by 2-3% in the past month. HHLS caters mainly to the premium segment, wherein Diakin is the companys main competitor with the highest sales volume. Other players in the premium segment are Mitsubishi and OGeneral. The companys mass premium brand Kaze is doing well in the market.

October 28, 2011

Oct-11

HHLS | Company Update

Risks
Unstable raw-material prices
Steel and copper are the major raw materials used to manufacture air conditioners. Copper prices declined by ~20% from April 2011 to September 2011. However, CRCA prices witnessed an uptrend from July 2011 to September 2011. Such instability in raw-material prices will affect the companys profitability in the long run.

Exhibit 10: Copper price trend

500 450 400 350

(` per kg)

300 250 200 150 100 50 0 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11

Source: Bloomberg

Foreign exchange risk

The company has ECBs of JPY930mn from Japan due to which the interest rate was very low at 2.3% for FY2011. Depreciation in the currency has led to forex losses of `9.4cr for 1HFY2012. Any further depreciation would lead to dented profits going ahead.

October 28, 2011

HHLS | Company Update

Competition
HHLS has a market share of 7% in terms of sales volume and 9% in value terms, while LG is the market leader with a 29% market share in the air conditioner segment. Other players in the same segment are Blue Star, Voltas and Samsung. HHLS is trading at a PE of 34.0x and 9.3x its FY2012E and FY2013E earnings, which is attractive for an MNC.

Exhibit 11: Relative valuation

Company FY2012E HHLS Blue Star Voltas FY2013E HHLS Blue Star Voltas 1010 3972 5954 7.8 7.4 8.3 41 199 364 17.7 22.1 12.0 20.5 31.5 19.7 9.3 9.8 8.8 1.7 2.8 1.7 0.5 0.6 0.5 5.9 6.6 5.6 851 3406 5405 5.3 5.9 8.0 11 130 349 4.8 14.5 10.5 6.3 24.2 20.6 34.0 14.9 9.2 2.1 3.4 1.9 0.5 0.7 0.5 10.3 9.6 6.4 Sales (` cr) OPM (%) PAT (` cr) EPS (`) ROE (%) P/E (x) P/BV (x) EV/ EV/ EBITDA Sales (x) (x)

Source: Angel Research, Bloomberg

October 28, 2011

HHLS | Company Update

Industry outlook
As per industry data, the Indian consumer durable industry stands at `35,000cr, as of March 2011. The consumer durable industry can be classified into consumer electronics and consumer appliances. Consumer appliances are further divided into brown goods and white goods. The Consumer Electronics and Appliance Manufacturers Association (CEAMA) has put its growth estimates for the home appliances industry at 20% for FY2012.

Exhibit 12: Consumer durable industry classification

Consumer Durable
Consumer Appliance Br own goods K itchen appliances like microwave ove ns, mixers, e tc. White goods Air conditioner Re frigerator Washing machine Othe rs
Source: Industry

Consumer Electronics Mobile Phones T e levision MP 3 Othe rs

Air conditioning industry

The air conditioning industry in India is estimated at `13,100cr, as of March 2011, of which `7,000cr is contributed by room air conditioners (RAC) and the remaining `6,000cr by ductable/central air conditioning systems (CAS).

Exhibit 13: Total air conditioner market in India

12 10

` cr ('000)

8 6 4 2 0 2005 2006 2007 2008 2009 2010 2011

Ductable/ Central AC system (CAS)

Source: Industry

Room Air Conditioner

October 28, 2011

HHLS | Company Update

The RAC market experienced ~31% growth in FY2011 in comparison to ~25% growth in FY2010. The RAC market grew at a CAGR of 20%, while the ductable/CAS market grew at a CAGR of 17% over FY2006-11.

Exhibit 14: Trend in RAC industry

7 6 5 40 35 30 25

` cr ('000)

4 3 2 1 0 2006 2007 2008 2009 2010 YoY growth 2011 Room Air Conditioner

(%)

20 15 10 5 0

Source: Industry

However, penetration of room air conditioners in India is still low at ~3% only and is expected to grow to 5% by FY2015E. Air conditioners are now affordable both in terms of initial investment and running cost and are now treated as a necessity rather than a luxury item. This promises a strong market for the air conditioner business.

Exhibit 15: Market share in Air conditioner Industry (India)

Panasonic 6% Whirlpool 4% LG 29% Voltas 19% Others 12% Bluestar 4% Hitachi 7%

Samsung 19%
Source: Industry

October 28, 2011

10

HHLS | Company Update

The company
HHLS is a subsidiary of Japan's Hitachi Appliances, which holds a 68% stake in the company. HHLS manufactures and sells air conditioners and is engaged in the trading of refrigerators, washing machines and chillers. The companys air conditioners segment includes home AC, commercial or ductable AC and telecom AC categories. The company operates in the mass premium segment. HHLS currently holds a 7% market share in the RAC segment and is No. 1 in the premium segment. In ductable commercial air-conditioner, HHLS has a 17% market share. In the telecom tower air-conditioners category, HHLS is a leader with a 42% market share. The company recently introduced i-clean to cater to the mass premium category with a self-cleaning technology. The company also launched Kaze in the low-price product range.

Exhibit 16: Price comparison of split AC

i-TEC Split AC MRP Atom Square Split AC Star Split AC* i-Clean Split AC ACE Follow Me Split AC ACE Cutout Split AC Kaze Split AC 0 5 10 15 20 25 30 35 40 45 50 55

` (in '000) for 1.5 tonne

Source: Company

The company has air conditioner manufacturing facilities in Kadi (north Gujarat) and Jammu with a total capacity of 2,30,000 units per annum. The company re-entered the washing machine segment in FY2011 with higher price range products.

October 28, 2011

11

HHLS | Company Update

Profit & Loss Statement

Y/E March (` cr) Gross sales Less: Excise duty Net Sales Total operating income % chg Net Raw Materials Other Mfg costs Personnel Other Total Expenditure EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of Net sales) PBT % change Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Adjusted EPS (`) % chg FY2008 FY2009 506 59 447 447 37.4 292 21 20 65 400 46 94.6 10.4 8 39 100.6 10.4 3 10 2.3 47 111.1 5 9.9 42 42 117.5 9.5 18.4 18.4 117.5 519 49 470 470 5.3 303 29 22 72 428 42 (8.7) 9.0 8 34 (11.3) 9.0 2 7 1.5 27 (42.0) 6 20.8 22 22 (49.0) 4.6 9.4 9.4 (49.0) FY2010 686 46 640 640 36.1 413 9 31 126 582 58 37.3 9.1 12 46 35.0 9.1 3 12 1.8 57 108.0 11 19.2 46 46 113.3 7.2 20.0 20.0 113.3 FY2011 FY2012E 829 66 763 763 19.3 497 11 44 151 707 56 (3.0) 7.4 16 40 (12.9) 7.4 2 6 0.7 40 (29.4) 11 26.6 29 29 (36.2) 3.8 12.8 12.8 (36.2) 924 73 851 851 11.5 581 12 49 161 806 45 (20.2) 5.3 17 28 (31.3) 5.3 2 1 0.1 16 (60.2) 5 30.0 11 11 (62.1) 1.3 4.8 4.8 (62.1) FY2013E 1097 87 1010 1010 18.7 661 14 57 199 931 79 75.3 7.8 19 60 116.1 7.8 3 1 0.2 58 264.6 17 30.0 41 41 264.6 4.0 17.7 17.7 264.6

October 28, 2011

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HHLS | Company Update

Balance Sheet
Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Inventory Debtors Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 73 42 31 10 245 6 28 120 90 190 55 97 110 45 65 18 254 23 33 116 82 181 74 157 159 54 105 15 330 28 25 180 96 243 88 210 199 68 131 7 485 2 31 327 125 360 125 266 209 85 124 6 493 14 35 324 121 343 150 283 229 104 125 6 583 12 42 384 145 397 187 320 23 60 83 12 2 97 23 82 105 51 2 157 23 124 147 60 3 210 23 149 172 90 4 266 23 157 180 99 4 283 23 194 217 99 4 320 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 28, 2011

13

HHLS | Company Update

Cash Flow Statement

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments Interest received Others Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Interest paid Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 47 8 (9) (4) (5) 38 (10) 1 (5) (14) 21 (2) (40) (21) 3 4 6 27 8 (2) 3 (6) 30 (37) 2 (13) (47) 29 (14) 17 32 17 6 23 57 12 (8) (12) (11) 37 (49) 2 0 (47) 31 (3) (2) (15) 11 6 23 28 40 16 (64) 9 (11) (9) (40) 2 6 (31) 59 (3) (6) (31) 19 (26) 28 2 16 17 (13) 13 (5) 28 (10) (10) 40 (3) (13) (29) (6) 12 2 14 58 19 (39) 3 (17) 24 (21) (21) 59 (3) (3) (58) (5) (2) 14 12

October 28, 2011

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HHLS | Company Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) WC (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.1 0.1 17.7 0.3 0.7 2.4 0.2 0.5 30.6 0.5 1.6 6.7 0.5 1.9 2.2 0.4 1.1 18.8 6.1 86 61 146 36 4.3 92 67 158 39 4.0 85 51 133 31 3.8 121 53 156 44 4.1 140 52 156 55 4.4 128 52 156 56 44.4 51.5 67.8 27.0 34.7 22.9 25.2 32.7 36.6 16.9 19.0 18.4 10.1 10.6 6.3 19.8 21.2 20.5 8.7 0.9 5.5 43.0 16.7 0.1 44.7 7.3 0.8 4.0 23.2 22.4 0.3 23.5 7.2 0.8 3.8 22.4 2.0 0.2 26.8 5.3 0.7 3.0 11.5 4.9 0.5 14.9 3.3 0.7 3.2 7.4 8.9 0.5 6.7 5.9 0.7 3.3 13.9 2.2 0.4 18.5 18.4 18.4 21.7 0.0 36.3 9.4 9.4 12.9 0.0 45.5 20.0 20.0 25.2 1.5 63.9 12.8 12.8 19.8 1.5 74.9 4.8 4.8 12.4 1.5 78.2 17.7 17.7 26.0 1.5 94.4 9.0 7.6 4.5 0.0 0.9 8.3 4.0 17.6 12.8 3.6 0.0 0.9 9.6 2.6 8.2 6.6 2.6 0.9 0.6 7.1 2.0 12.9 8.3 2.2 0.9 0.6 8.3 1.8 34.0 13.3 2.1 0.3 0.5 10.3 1.6 9.3 6.4 1.7 0.3 0.5 5.9 1.5 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 28, 2011

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HHLS | Company Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock

Hitachi Home & Life Solutions No No No No

3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 28, 2011

16