3QFY2012 Result Update | Infrastructure

January 20, 2012

HCC
Performance Highlights
Y/E March (` cr) Net sales Operating profit Net profit 3QFY12 946.0 110.5 (130.4) 3QFY11 1,008.6 132.0 7.9 % chg (yoy) (6.2) (16.3) 2QFY12 828.6 93.7 (40.5) % chg (qoq) 14.2 17.9 -

NEUTRAL
CMP Target Price
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 Infrastructure 1,280 1.5 43/16 987,462 1 16,739 5,049 HCNS.BO HCC@IN

`21 -

Source: Company, Angel Research

For 3QFY2012, HCCs reported poor set of results with, revenue and EBITDAM coming in line with our and street estimates, however earnings plunged on account of provisions (expected future losses and cost revisions) to the tune of `166cr. We believe these provisions are not exceptional in nature, as classified by the company and pertain to normal course of business. As of 3QFY2012, the total outstanding order book stands at `16,240cr (excluding L1 orders of `1,574cr) with order inflow of ~`840cr in the quarter. Owing to concerns such as slowdown in order inflow, high debt and stretched working capital, we remain Neutral on the stock. Provisions lead to huge loss: On the top-line front, HCCs revenues declined by 6.2% yoy to `946.0cr (`1,009cr) against our estimate of `982.0cr due to slowdown in order inflow and execution bottlenecks. EBITDAM came in at 11.7% (12.6%), a dip of 90bp yoy and marginally lower than our estimate of 11.9%. On the earnings front, HCC reported a loss of `130.4cr vs. profit of `7.9cr in 3QFY11, against our estimate of loss of `25.5cr owing to decline in revenue, EBITDA margin and provisioning of `166cr. Interest cost came at `104.3cr, a decline of 39.4%/2.9% on yoy/qoq basis. Outlook and valuation: On the valuations front, at current levels, the stock trades at 32.8x PE and 1.0x P/BV on FY2013E on standalone basis. We have valued HCC on an SOTP basis with a fair value of `32/share by assigning 6x FY2013E earnings (standalone). The companys real estate venture has been valued on NAV basis and its BOT assets have been valued on FCFE basis. Our fair value implies an upside of 51.2% from current levels, but we continue to maintain our Neutral recommendation on the stock, owing to concerns mentioned above. Further, in the infrastructure space, we believe there are better bets than HCC such as L&T, Sadbhav and IVRCL.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 39.9 11.5 24.6 24.1

Abs. (%) Sensex HCC

3m

1yr

3yr 83.9 (6.2)

(1.2) (12.1) (22.6) (48.3)

Key financials (Standalone)

Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA (%) FDEPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010 3,644 10.0 81 7.2 12.2 1.3 15.7 0.8 6.5 8.6 1.0 8.1

FY2011 4,093 12.3 71 (12.8) 13.2 1.2 18.0 0.8 4.7 8.3 1.1 8.4

FY2012E 3,915 (4.3) (187) 12.0 (3.1) 1.0 5.4 1.4 11.9

FY2013E 4,633 18.3 39 12.6 0.6 32.8 1.0 3.1 7.1 1.1 8.6

Shailesh Kanani
022-39357800 Ext: 6829 shailesh.kanani@angelbroking.com

Nitin Arora
022-39357800 Ext: 6842 nitin.arora@angelbroking.com

Please refer to important disclosures at the end of this report

HCC | 3QFY2012 Result Update

Exhibit 1: 3QFY2012 performance (Standalone)

Y/E March (` cr) Income from operations Total expenditure Operating profit OPM (%) Interest Depreciation Other income Nonrecurring items Profit before tax Tax PAT PAT (%) FDEPS (`)
Source: Company, Angel Research

3QFY12 946.0 835.6 110.5 11.7 104.3 41.2 10.2 (166.3) (191.3) (60.9) (130.4) (13.8) (2.1)

3QFY11 1,009 876.6 132.0 13.1 74.8 38.2 (5.6) 13.4 5.5 7.9 0.8 0.1

% chg(yoy) (6.2) (4.7) (16.3) (140)bp 39.4 8.0 (280.2) -

2QFY12 828.6 734.9 93.7 11.3 107.4 41.4 (3.0) (58.1) (17.6) (40.5) (4.9) (0.7)

% chg(qoq) 14.2 13.7 17.9 40bp (2.9) (0.4) (437.9) -

9MFY12 2,833 2,490 342.1 12.1 305.0 121.9 7.9 (166.3) (243.3) (75.2) (168.1) (5.9) (2.8)

9MFY11 2,882 2,517 364.9 12.7 199.6 108.7 3.6 60.2 17.9 42.3 1.5 0.7

% chg(yoy) (1.7) (1.1) (6.3) (60)bp 52.8 12.1 121.2 -

Exhibit 2: 3QFY2012 Actual vs. Angel estimates

(` cr) Revenues EBITDA Interest Tax PAT
Source: Company, Angel Research

Actual 946 110.5 104.3 (60.9) (130.4)

Estimates 982 116.9 112.8 (12.2) (25.5)

Variation (%) (3.7) (5.5) (7.5) 396.8 411.3

Muted performance on revenue front, as expected

On the top-line front, HCCs revenues declined by 6.2% yoy to `946.0cr (`1,009cr) against our estimate of `982.0cr. As per management, revenue has declined due to slow order inflow in last few quarters, execution bottlenecks, rising interest cost and payment delays by clients. Further, the infrastructure sector is facing strong headwinds which include slowdown in order activity caused by shortfall in investments in infrastructure sector and a high interest rate scenario which will keep revenue growth under check for next few quarters. Against this backdrop and due to poor performance in 3QFY2012 we are lowering our FY2012 revenue estimate by 5.7% to `3,915cr from `4,152cr.

January 20, 2012

HCC | 3QFY2012 Result Update

Exhibit 3: Decline in revenues due to slowdown on execution front

1,400 1,200 1,000 800 600 400 200 0 (7.2) 18.3 9.3 0.8 (6.3) (5.6) 20.4 10.2 10.8 14.1 13.2 11.1 10.8 6.3 25.0 20.0 15.0 10.0 5.0 0.0 (5.0) (10.0)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Sales (` cr, LHS)

Growth (yoy %, RHS)

Source: Company, Angel Research

Projects update
For Dhule-Palasner project, HCC has received clearance for commissioning of Dhule-Palasner project from NHAI. The company expects to achieve commercial operational date (COD) by February 2012 which is four months ahead of scheduled COD - June 2012.

Lavasa Update
In latest development on the Lavasa project, the Ministry of Environment and Forest (MOEF), through its order dated 9th November, 2011 accorded environment clearance to the 1st phase of Lavasa. Construction has resumed at the project site and the company is in the process of getting the project site fully mobilised. As per the management, mobilisation should be completed by June 2012. However, the complete project still remains under the cloud of uncertainty as the MOEF clearance received is for Phase 1 only, along with with uncertainty on fund raising owing to unfavorable market conditions and high debt in books of Lavasa.

Lower EBITDA, high interest cost and provisioning leads to loss

EBITDAM came in at 11.7% (12.6%), a dip of 90bp yoy and marginally lower than our estimate of 11.9%. On the earnings front, HCC reported a loss of `130.4cr vs profit of `7.9cr in 3QFY11, against our estimate of loss of `25.5cr owing to decline in revenue, EBITDA margin and provisioning of `166cr. Interest cost came at `104.3cr, a decline of 39.4%/2.9% on yoy/qoq basis. Provisioning of `166cr includes: 1) `64.9cr additional cost on account of substantial delays in approval of claims, increase in estimated costs and delays in execution; 2) `52cr provision made for expected future losses in respect of two new projects; 3) `16cr provision arising from revision of cost to completion for expected future loss on sale of asset and the impact of adverse exchange rates of an overseas project; 4) `27cr provision made against performance bank guarantee wrongfully encashed by a client in earlier year and is currently under dispute. As the arbitration is not expected to settle soon, company has made provision for the same; 5) `6.7cr provision made against dues from a subcontractor.

January 20, 2012

3QFY12

HCC | 3QFY2012 Result Update

Although HCC has classified the provisions of `166cr as exceptional items, we believe these pertain to normal course of business.

Exhibit 4: EBITDAM take a hit

180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 12.912.9 15.4 14.0 11.3 13.0 11.3 12.6 12.8 12.6 13.8 13.0 11.3 11.7 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

Exhibit 5: Poor performance on all fronts led to loss

80.0 60.0 40.0 20.0 0.0 3.1 2.8 5.2 2.1 0.7 1.6 4.0 2.8 10.0

1.4 0.8 1.9 0.3

5.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

(20.0) (40.0) (60.0) (80.0) (100.0) (120.0) (140.0)

(4.9)

3QFY12

(5.0)

(10.0) (13.8) (15.0) PAT (` cr, LHS) PATM (%, RHS)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

EBITDA (`cr, LHS)

EBITDAM (%, RHS)

Source: Company, Angel Research

3QFY12

Source: Company, Angel Research

Order book analysis

HCCs order book, as of 3QFY2012, stood at `16,240cr (4.0x FY2011 revenue) excluding L1 orders worth `1,574cr, with the company bagging orders worth ~`840cr during the quarter. The companys order book comprises hydro power (39%), water solutions (23%), transportation (24%) and nuclear and special (14%) projects. The company is L1 for contracts worth `1,574cr.

Exhibit 6: Order booking and order book trend

19,500 42.4 14,500 9,500 4,500 (500) 12.2 34.5 32.1 26.3 13.0 16.7 29.2 30.8 20.4 20.0 (4.0) (2.3) (2.0) (9.1) 0.0 (20.0) 40.0 60.0

Exhibit 7: Segmental order book break-up (%)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Order Book (` cr, LHS) L1 Status (` cr, LHS)

Order Inflow (` cr, LHS) Order Book growth (%, RHS)

Source: Company, Angel Research

2QFY12

3QFY12

Source: Company, Angel Research

January 20, 2012

HCC | 3QFY2012 Result Update

Outlook and valuation

Owing to HCCs poor performance in 3QFY2012 and given headwinds faced by infrastructure sector we are revising our estimates downwards for FY2012. On the top line front, we have lowered our estimates by 5.7% for FY2012 to `3,915cr from `4,152cr. On the EBITDAM front, we have lowered our estimates by 40bp to 12.0% from 12.4%. We expect HCC to post loss of `187.4cr for FY2012 at earnings level owing to the provisions of `166cr in 3QFY12.

Exhibit 8: Change in estimates

FY2012E Earlier estimates Revenue (` cr) EBITDA margin (%) PAT (` cr)
Source: Company, Angel Research

FY2013E Variation (%) (5.7) (40)bp 224.7 Earlier estimates 4,633 12.6 39.0 Revised estimates 4,633 12.6 39.0 Variation (%) 3,915 12.0

Revised estimates

4,152 12.4 (57.7)

(187.4)

On the valuations front, at current levels, the stock trades at 32.8x PE and 1.0x P/BV on FY2013E on standalone basis. We have valued HCC on an SOTP basis with a fair value of `32/share by assigning 6x FY2013E earnings (standalone). The companys real estate venture has been valued on NAV basis and its BOT assets have been valued on DCF basis. Our fair value implies an upside of 51.2% from current levels, but we continue to maintain our Neutral recommendation on the stock, owing to structural concerns faced by the company. Further, in the infrastructure space, we believe there are better bets than HCC such as L&T, Sadbhav and IVRCL.

Exhibit 9: SOTP valuation summary

Business Segment Construction Value of Real Estate HCC Concessions Total
Source: Company, Angel Research

Methodology P/E NAV Basis

Remarks 6.0x FY2013E earnings NAV Basis 30% Discount to PE deal, valuing it at `1,650cr

`/share 3.9 11.7 16.3 31.9

Exhibit 10: Key assumptions

` cr Order inflow Revenue Order backlog (Y/E) Order book-to-Sales ratio (x)
Source: Company, Angel Research

FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 3,929 3,083 10,158 3.3 7,616 3,314 14,460 4.4 6,054 3,644 16,870 4.6 3,410 4,093 16,187 4.0 3,871 3,915 16,143 4.1 4,897 4,633 16,406 3.5

January 20, 2012

HCC | 3QFY2012 Result Update

Recommendation rationale
Huge investments and elongated working capital = Balance sheet stretched: HCCs balance sheet is loaded with debt (~`4,300cr as of 3QFY2012; net D/E = 2.7 standalone level) because of its BOT/real estate investments and funding of its working capital requirements (~328 days as on 9MFY2012). Going ahead as well, owing to its commitments, we believe HCC will not get any respite on these fronts. Deteriorating business environment: Slowdown on the execution front, along with macro headwinds faced by the sector, has resulted in eroding the companys profitability. Further, the fact that there are no signs of reversal in sight paints a bleak outlook for the company in the medium term. Uncertainty on the Lavasa project: Lavasa received clearance for the construction and development for Phase 1 in November 2011, post one year of legal battle with MOEF, which resulted in huge losses to HCC. However, the project still remains under the cloud of uncertainty and continues to be an overhang on the stock.

January 20, 2012

HCC | 3QFY2012 Result Update

Exhibit 11: Recommendation summary

Company ABL CCCL HCC IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Patel Engg Punj Lloyd Sadbhav Simplex In. CMP 205 17 21 162 187 44 67 1,274 52 49 96 49 118 201 TP Rating FY11 245 Buy 1,302 2,199 4,093 2,438 4,049 5,651 - Neutral - Neutral 182 227 47 88 1,460 77 52 Accu. Buy Accu. Buy Buy Buy Accu. Top line (` cr) FY12E 1,627 2,350 3,915 3,037 5,169 5,598 1,831 2,451 4,633 3,781 6,609 6,458 18.6 5.6 6.4 24.5 27.8 6.9 7.6 17.0 17.4 6.4 1.6 16.2 8.2 15.2 19.2 2.5 1.2 13.6 22.3 5.9 5.5 54.3 5.6 6.4 17.6 (5.4) 8.0 21.5 EPS (`) FY11 10.7 6.6 18.0 11.9 8.4 7.4 12.2 23.5 9.3 7.6 5.5 14.7 9.3 21.0 (1.1) (3.1) 11.9 24.4 3.8 2.7 64.2 4.4 3.6 14.0 1.9 9.1 18.9 24.7 1.6 0.6 13.1 25.7 4.6 4.2 71.0 4.7 3.8 14.5 2.9 9.0 25.9 13.6 (20.5) (25.8) (2.1) 7.4 (11.5) (12.6) 14.3 (8.1) (22.4) (9.2) 6.0 9.8 Adj. P/E FY12E 9.7 13.6 7.6 11.6 24.5 19.8 11.8 13.7 6.9 25.8 12.9 10.6 8.3 10.5 32.8 12.4 7.2 9.5 16.0 17.9 11.1 12.7 6.7 16.8 13.1 7.8 OB/ FY13E Sales (x) 5.0 2.7 4.0 5.2 4.5 3.2 3.8 3.4 2.7 3.3 2.8 3.1 FY13E CAGR (%) FY11 FY12E FY13E CAGR (%)

13,832 13,763 16,017 43,905 53,503 60,090 1,816 5,074 3,476 7,850 2,209 4,889 1,952 5,095 3,271 2,602 5,562 2,503 5,749 3,586 2,585 6,485

- Neutral - Neutral 150 233 Buy Buy

9,585 10,592

Source: Company, Angel Research

Exhibit 12: SOTP break up

Company ` ABL CCCL HCC IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Patel Engg Punj Lloyd Sadbhav Simplex In. 104 17 4 116 59 32 31 1,136 23 23 42 47 81 233 Core Const. % to TP 42 100 12 64 26 67 35 78 30 45 45 100 54 100 ` 12 24 2 2 17 Real Estate % to TP 37 27 3 4 18 ` 141 16 61 143 52 8 16 70 Road BOT % to TP 58 51 34 63 67 16 17 46 Invst. In Subsidiaries ` 4 15 324 % to TP 2 33 22 18 19 25 33 ` Others % to TP 11 37 36 21 Total ` 245 17 32 182 227 47 88 1,460 78 52 94 47 150 233

Source: Company, Angel Research

January 20, 2012

HCC | 3QFY2012 Result Update

Profit & loss statement (Standalone)

Y/E March (` cr) Net sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of asso. Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 3,083 3,083 30.8 2,716 971 1,448 297 367 70.3 11.9 96 270 99.5 8.8 152 2 1.9 120 28.8 36 157 47 30.1 110 110 73 33.3 2.4 2.9 1.2 33.3 3,314 3,314 7.5 2,882 1,236 1,271 375 431 17.7 13.0 115 316 16.9 9.5 211 9 8.2 115 (4.3) 49 165 39 23.8 125 125 76 3.9 2.3 3.0 1.3 3.9 3,644 3,644 10.0 3,201 1,060 1,747 394 443 2.6 12.2 114 329 4.0 9.0 205 13 10.7 (15) 122 5.8 122 40 33.2 81 81 81 7.2 2.2 2.7 1.3 7.2 4,093 4,093 12.3 3,553 1,222 1,864 468 540 21.9 13.2 153 387 17.7 9.5 290 17 15.2 (3) 112 (8.4) 112 41 36.4 71 71 71 (12.8) 1.7 1.2 1.2 (12.8) 3,915 3,915 (4.3) 3,446 1,215 1,783 447 470 (13.0) 12.0 170 300 (22.5) 7.7 411 12 (12.0) (99) (188.8) (166) (266) (78) 29.4 (187) (187) (187) (4.8) (3.1) (3.1) 4,633 4,633 18.3 4,050 1,411 2,110 529 583 24.2 12.6 186 397 32.4 8.6 355 17 28.9 59 (159.3) 59 20 33.6 39 39 39 0.8 0.6 0.6 -

January 20, 2012

HCC | 3QFY2012 Result Update

Balance sheet (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest 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 Other Current liabilities Net Current Assets Misc. Exp. not written off Total Assets 1,410 457 953 68 296 2,710 264 295 2,150 1,064 1,646 2,962 1,683 555 1,128 46 366 3,467 154 528 2,785 1,568 1,900 3,440 1,814 664 1,150 35 409 4,624 188 863 3,573 2,043 2,581 4,174 1,987 803 1,184 26 531 6,096 194 1,395 4,508 2,677 3,419 5,160 2,161 973 1,189 62 627 6,817 105 1,812 4,899 2,820 3,996 5,873 2,370 1,159 1,211 63 740 7,257 141 2,074 5,042 3,980 3,277 5,290 25.6 978 1,004 1,845 113 2,962 25.6 979 1,005 2,322 113 3,440 30.3 1,502 1,517 2,515 143 4,174 60.7 1,462 1,522 3,471 166 5,160 60.7 1,225 1,271 4,436 166 5,873 60.7 1,201 1,246 3,878 166 5,290 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

January 20, 2012

HCC | 3QFY2012 Result Update

Cash flow statement (Standalone)

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 (Inc.)/ Dec. in loans and adv. Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 157 96 175 2 47 28 (225) (67) 2 (289) 294 (24) 48 317 56 208 264 165 115 364 9 39 (133) (252) (70) 9 (313) (71) 477 (24) (47) 335 (111) 264 154 122 114 647 13 40 (465) (120) (43) 13 (150) 459 193 (28) 25 649 34 154 188 112 153 832 17 41 (625) (164) (123) 17 (270) (38) 957 (28) 10 901 5 188 194 (266) 170 666 12 (78) (695) (210) (96) 12 (294) 965 (64) 901 (88) 194 105 59 186 (755) 17 20 963 (210) (113) 17 (306) (558) (64) (622) 35 105 141

January 20, 2012

10

HCC | 3QFY2012 Result 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 Order book to sales 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 (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) Work. cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 1.6 4.3 1.8 2.2 5.0 1.5 1.5 5.3 1.6 2.2 6.1 1.3 3.4 9.2 0.7 3.0 6.4 1.1 2.5 230 0 125 153 2.1 271 1 153 172 2.1 318 1 186 207 2.2 360 0.4 229 250 1.9 438 0 283 332 2.0 391 0 299 277 9.8 10.8 7.7 9.9 10.6 7.6 8.6 9.0 6.5 8.3 8.6 4.7 5.4 5.6 7.1 7.3 3.1 8.8 0.7 1.2 7.5 6.3 1.5 9.4 9.5 0.8 1.1 8.1 7.7 1.9 8.7 9.0 0.7 1.0 6.0 5.7 1.8 6.7 9.5 0.6 0.9 5.5 6.2 1.8 4.3 7.7 0.7 0.7 3.9 7.3 2.8 8.6 0.7 0.8 4.8 5.7 3.2 2.1 2.9 1.2 2.8 0.8 16.6 3.0 1.3 3.2 0.8 16.6 2.7 1.3 3.2 0.8 25.0 1.2 1.2 3.7 0.9 25.1 (3.1) (3.1) (0.3) 0.9 21.0 0.6 0.6 3.7 0.9 20.5 17.5 7.6 1.3 3.8 0.9 7.8 1.0 2.7 16.9 6.7 1.3 3.8 1.0 8.0 1.0 4.4 15.7 6.6 0.8 3.8 1.0 8.1 0.9 4.6 18.0 5.7 0.8 4.3 1.1 8.4 0.9 4.0 1.0 4.3 1.4 11.9 1.0 4.1 32.8 5.7 1.0 4.3 1.1 8.6 0.9 3.5 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

January 20, 2012

11

HCC | 3QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

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

HCC No No No No

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%)

January 20, 2012

12