GVK Power Infrastructure GVKPOW ICICI Direct

Document Sample
GVK Power Infrastructure GVKPOW ICICI Direct Powered By Docstoc
					      Event Update
                                                                                                                                                                           September 26, 2012
Rating matrix
Rating                               :       Buy                                         GVK Power & Infrastructure (GVKPOW)
Target                               :       | 18
Target Period                        :       12-15 months                       WHAT’S CHANGED…                                                                                                      | 14
Potential Upside                     :       20%
                                                                                PRICE TARGET....................................................................................................Unchanged
Key Financials                                                                  EPS (FY13E)........................................................................................................Unchanged
 | Crore                  FY11              FY12        FY13E        FY14E      EPS (FY14E)........................................................................................................Unchanged
 Net Sales               1,915           2,491.8       3,398.9      5,199.3
 EBITDA                  514.0             694.1       1,081.6      2,094.0
                                                                                RATING...............................................................................................................Unchanged
 Net Profit
 EPS (|)
                         154.9
                            1.0
                                            61.5
                                             0.4
                                                        (138.1)
                                                          (0.9)
                                                                      129.1
                                                                        0.8
                                                                                Hancock’s regulatory clearance progress…
                                                                                We met GVK Power & Infrastructure’s group company GVK Natural
Valuation summary                                                               Resources Pte Ltd to understand the development made in the Hancock
                            FY11           FY12         FY13E        FY14E      Projects and its way ahead. As per the company, significant progress has
 P/E                        14.7           37.1             -         17.7      been made on the Hancock project approval process. The company is
 Target P/E                 18.0           45.5             -         21.6      well poised to achieve financial closure (FC) for the project in the next five
 EV / EBITDA                14.6           21.3          14.8          7.7      or six months possibly through ECA and begin construction on the
 P/BV                        0.7            0.7            0.7         0.7
                                                                                project from Q2CY13. In terms of funding, the project D/E is expected to
 RoNW                         4.6           1.8           (4.1)        3.7
                                                                                be 75-80% with majority of debt in the form of ECA funding from various
 RoCE                         3.3           2.1            3.0         6.2
                                                                                countries. It is also confident of funding its entire equity requirement
Stock data                                                                      through minority equity dilution to various stakeholders (prospective
                                                                                clients - mine, rail & port, equipment supplier, EPC contractor, rail/port
Market Capitalisation                                         | 2282 crore
                                                                                operator, etc.)
Debt (FY 12)                                                 | 13,884 crore
                                                                                Hancock Projects clearance makes significant progress
Cash (FY12)                                                   | 1,726 crore
                                                                                The regulatory clearance process of Hancock has made a significant
EV                                                           | 14,440 crore
                                                                                breakthrough. It is set for FC over the next six to eight months and would
52 week H/L (|)                                                      20/10      begin construction on the project from Q2CY13. In terms of capex
Equity capital                                                | 157.9 crore     funding of US$10 billion, it is looking to fund the debt (75-80%) in the
Face value                                                                |1    form of ECA (Export Credit Agency) funding from various countries and
                                                                                equity requirement (20-25%) through minority equity dilution to various
DII Holding (%)                                                           4.1
                                                                                stakeholders. In terms of mine project economics, it is looking at
FII Holding (%)                                                          17.1   realisation at US$75/tonne on long term basis while expected cost/tonne
                                                                                is ~US$56 (which the company is looking to bring down to
Price movement                                                                  ~US$50/tonne through cost optimisation).
     6,200                                                           30         Seeks 660% tariff hike from AERA for MIAL
     5,500                                                           25         GVK has sought ~660% tariff hike and introduction of UDF for MIAL on
                                                                                account of an increase in project cost, which stands at | 12,300 crore.
     4,800                                                           20
                                                                                While the quantum of the hike that would be approved is yet to be seen,
     4,100                                                           15         any hike would be a major boost to the funding gap of the project, which
     3,400                                                           10         has seen cost overrun of ~| 2,500 crore.
     2,700                                                           5          Maintain BUY on valuation and near term trigger…
     2,000                                                           0          While the unavailability of gas supply at its power plants as well as
         Oct-11    Jan-12           Apr-12          Jun-12      Sep-12
                                                                                interest burden to fund additional stake in MIAL and BIAL will weigh on
                   Price (R.H.S)              Nifty (L.H.S)
                                                                                the bottomline, the Hancock overhang would subside with regulatory
                                                                                development and FC. Additionally, in our view, the PE deal in the airport
                                                                                and road division holds the key for the performance of the stock price,
Analyst’s name                                                                  going ahead, as this would partially allay investors concerns over funding
 Deepak Purswani, CFA                                                           gap across airport & transportation verticals. Furthermore, tariff revision
 deepak.purswani@icicisecurities.com                                            of MIAL would be the key near term trigger for the stock. We maintain our
 Bhupendra Tiwary                                                               BUY recommendation purely on attractive valuations.
 bhupendra.tiwary@icicisecurities.com                                           Exhibit 1: Financial Performance
                                                                                 (| Crore)                                       FY10             FY11             FY12             FY13E              FY14E
                                                                                 Net Sales                                    1,786.6          1,914.7          2,491.8            3,398.9            5,199.3
                                                                                 EBITDA                                         468.3            514.0            694.1            1,081.6            2,094.0
                                                                                 PAT                                            155.9            154.9             61.5             (138.1)             129.1
                                                                                 EPS (|)                                           1.0             1.0              0.4               (0.9)               0.8
                                                                                Source: Company, ICICIdirect.com Research



       ICICI Securities Ltd | Retail Equity Research
                                                                     Deal details
                                                                              GVK Power & Infrastructure (10% stake with option to increase to
                                                                              49%) in JV with GVK Natural Resources Pte Ltd (a GVK group
                                                                              company) had entered into an agreement to acquire major coal
                                                                              resource (Alpha Coal Project & Alpha West Coal Project – 79% stake
                                                                              and Kevin’s Corner Coal Project – 100% stake) and infrastructure
                                                                              development project [Abbot Point port with capacity of 60 million
                                                                              tonnes (MT) and 495 km rail line] from the Hancock Group
                                                                              Together, these mines have coal resource of 7.9 billion tonnes
                                                                              (JORC compliant resource) and 3.3 billion tonnes reserves
  The cost of acquisition is ~US$1.26 billion, payable in a
                                                                              (proportionate reserves 2.88 billion tonnes) in measured & indicated
  phased manner.
                                                                              categories. At full production, these coal mines are expected to
                                                                              provide supply of 84 MTPA. Production is expected to start in 2016.
                                                                              Additionally, letters of intent for ~43 MTPA have already been
                                                                              signed with major utility companies in China, Japan, Korea, Taiwan
                                                                              and Vietnam
                                                                              The cost of acquisition is ~US$1.26 billion, payable in a phased
                                                                              manner. The transaction involved payment of US$500 million
                                                                              initially to Hancock, US$200 million after a year and the remainder
                                                                              on financial close of the project, which is expected to be 2012
                                                                              Additionally, the first phase of development of the project will
                                                                              require capex of ~US$10 billion. This would involve the
                                                                              development of Alpha & Alpha West Coal mine (~US$4.5-5 billion),
                                                                              development of port & rail line (US$2.7-3 billion and US$1.8-2.2
                                                                              billion, respectively). On the capex front, the management is looking
                                                                              to reduce cost by ~30% through cost optimisation and outsourcing
  The deal gives GVK an option to enter into long term coal
  purchase contracts up to 20 MTPA (to supply ~7,500                          The deal gives GVK an option to enter into long term coal purchase
  MW of power generating capacity) for securing long term                     contracts up to 20 MTPA (to supply ~7,500 MW of power
  fuel supplies for its subsidiary GVK Energy Ltd                             generating capacity) for securing long term fuel supplies for its
                                                                              subsidiary GVK Energy Ltd, which would be provided at an agreed
                                                                              discount from benchmark prices
Exhibit 2: Coal mine description
Alpha Coal                                                          Kevin's Corner                                        Alpha West
Up to 32 MTPA export grade thermal coal                             Up to 30 MTPA export grade thermal coal               16-24 MTPA export grade thermal coal
1.82 Bt resource                                                    4.3 Bt resource                                       1.8 Bt resource
Open cut mining, 30 years mine life                                 Open cut & underground mining, 30 years mine life     Underground mining
First coal by Q1 2016                                               Will be behind Alpha by 6-9 months
Ramp up from 2016 to 2019                                           Ramp up from 2016 to 2019                             Mining targeted for 2016
High grade thermal coal for export markets, mainly suitable for
premium North Asian utility market                                  High grade thermal coal for export markets            High grade thermal coal for export markets
Definitive feasibility study (DFS) and bankable feasibility study
(BFS) completed                                                     Bankable feasibility study (BFS) has commenced        Concept study completed
Mining lease to be issued by Q4 2012                                Mining lease expected to be issued by Q1 2013         BFS expected by 2014
Native title negotiated                                             Native title negotiated                               Leverage Alpha related studies and approvals
ECI contractors short listed
LOIs for 43 MTPA received

Source: Company, “paul-mulder-presentation-at-amcham-lunch-14-09-12” retrieved from http://hancockcoal.com.au , ICICIdirect.com Research




  ICICI Securities Ltd | Retail Equity Research                                                                                                                   Page 2
                                                                  Exhibit 3: Rail and Port details
                                                                  Railway                                                 Port
                                                                  The first privately owned standard gauge, heavy haul    Dedicated terminal at Abbot Point, Queensland‟s most
                                                                  railway in Queensland                                   northern coal port
                                                                  495 km, standard gauge, stand alone rail link from
                                                                  Galilee Basin to Abbot Point with 25,000t haul per      Ability for up to 60 MTPA subject to more efficient use of
                                                                  train                                                   stockpile area and berth configuration
                                                                  60 MTPA capacity                                        Awarded preferred developer for T3

                                                                  EIS approved by State and Federal governments           2 x 30 MTPA stockpile capacity
                                                                  Rail corridor selected by State Government
                                                                  (north/south)                                           2 x dedicated ship berths
                                                                  Third Party and ACCC consultation under way             Port approval by Q4 2012
                                                                  Native title negotiated
                                                                  Land acquisition starting
                                                                  Source: Company, “paul-mulder-presentation-at-amcham-lunch-14-09-12” retrieved from http://hancockcoal.com.au
                                                                  ,ICICIdirect.com Research

                                                                  Exhibit 4: Capex* details
                                                                                                                                                                         US$ bn
                                                                  Mine Development - Alpha                                                                                       5
                                                                  Port                                                                                                          3
                                                                  Rail                                                                                                          2
                                                                                                                                                                                10
                                                                  Source: Company, ICICIdirect.com Research
                                                                  *Additional capex of ~US$ 4 billion is also required for development of Kevin’s Corner Mine


                                                                  Project Status
                                                                  Coal
                                                                          Successful Test Pit - 125k ROM mined
                                                                          Coal burning tests undertaken in Korean and Chinese coal fired
                                                                          power stations (Q4 2011)
                                                                          Excellent burn results and coal quality parameters as good or better
                                                                          than projected in the BFS
Exhibit 5: Project Timeline
                                            2009              2010                              2011                         2012
                                      Q3      Q4     Q1      Q2      Q3      Q4      Q1         Q2     Q3    Q4     Q1      Q2      Q3      Q4    2013     2014   2015   2016
Order of Magnitude

Pre-Feasibility Studies

Bankable Feasibility Studies
ECI/FEED

Finance

Enviro/govt approvals tier I

Enviro/govt approvals tier 2
Financial close
Construction

Marketing                                                                                     LOI                                          Offtake Contract
First Coal
Project first shipment


Source: Company, “paul-mulder-presentation-at-amcham-lunch-14-09-12” retrieved from http://hancockcoal.com.au ,ICICIdirect.com Research




  ICICI Securities Ltd | Retail Equity Research                                                                                                                       Page 3
Exhibit 6: Project De-risking
z




Source: Company, “paul-mulder-presentation-at-amcham-lunch-14-09-12” retrieved from http://hancockcoal.com.au ,ICICIdirect.com Research



                                                                 Railway
                                                                         Technical Design – completed a 60 MTPA from both construction
                                                                         and operation perspective. Focus is on earthworks and geotechnical
                                                                         (completed by June 2012), which will be undertaken in the early
                                                                         contractor involvement phase (which precedes the final EPC bid in
                                                                         February 2013) and FC
                                                                         Advanced Approvals – The Coordinator General’s Report was
                                                                         issued on May 29, 2012, which was subsequently ratified by the
                                                                         Federal Government. This is a major approval milestone for the rail.
                                                                         The GVK rail corridor was approved by the Queensland State
                                                                         Government on June 6, 2012. The Mine & Rail were also granted
                                                                         approval under the EPBC Act by the Federal Government on August
                                                                         23, 2012
                                                                         Rail Corridor Land – Total ~75% of the rail corridor (by chainage)
                                                                         has commercial arrangements/agreements in place. Any property
                                                                         not ultimately acquired via voluntary negotiations is subject to the
                                                                         compulsory acquisition provisions provided by the Queensland
                                                                         Government
                                                                         Construction - EPC/ECI process has been undertaken with two
                                                                         contractors short-listed
                                                                         Infrastructure Operators Short-listed –established a short list for rail
                                                                         operators



    ICICI Securities Ltd | Retail Equity Research                                                                                         Page 4
                                                Port
                                                       Technical Design – Ongoing work has been undertaken and ability
                                                       to increase port throughput has been confirmed
                                                       Framework Agreement – This agreement, which sets out the
                                                       relationship governing the arrangements between NQBP (including
                                                       the development and operating leases), has been agreed and
                                                       executed
                                                       Advanced Approvals – Significant work undertaken with regard to
                                                       cumulative impact studies and dredging approvals - likely to achieve
                                                       these approvals in Q4 2012
                                                       Infrastructure Operators short-listed – Established a shortlist for
                                                       port operators
                                                       Port capacity for third party rail customers – A number of the
                                                       potential rail customers are seeking access to port capacity-
                                                       considering it as a part of rail offering to customers




ICICI Securities Ltd | Retail Equity Research                                                                      Page 5
                                                      Valuation
                                                      While the unavailability of gas supply at its power plants as well as
                                                      interest burden to fund additional stake in MIAL and BIAL will weigh on
                                                      the bottomline, the Hancock overhang would subside with regulatory
                                                      development and FC. Additionally, in our view, the PE deal in the airport
                                                      and road division holds the key for the performance of the stock price,
                                                      going ahead, as this would partially allay investors concerns over funding
                                                      gap across airport & transportation verticals. Furthermore, tariff revision
                                                      of MIAL would be the key near term trigger for the stock. We maintain our
                                                      BUY recommendation purely on attractive valuations.

                                                      Exhibit 7: SOTP valuation

                                                                                                         Equity Value                 Stake Value (|
We recommend BUY on the stock with SOTP based price                                 Basis         CoE       (| crore) GVK's stake (%)         crore) Per share (|)
target of | 18
                                                      Power                                                     869                          621.9              4
                                                      GVK Industries                FCFE          13.0            15            75.0           11.2             0
                                                      Gautami                       FCFE          13.0          109             47.8           51.9             0
                                                      Goindwal Sahib                FCFE          14.0          247             75.0         185.2              1
                                                      Alaknanda                     FCFE          14.0          498             75.0         373.6              2


                                                      Transport                                                  -68                          -68.5             0
                                                      JKEL                          FCFE          13.0          710           100.0          710.4              4
                                                      Deoli Kota                    FCFE          14.0           44           100.0            44.5             0
                                                      Shivpuri Dewas                FCFE          14.0          -823          100.0          -823.3            -5


                                                      Airport                                                  8107                         3970.8             25
                                                      MIAL-Airport                  FCFE          14.0         1567             50.5         791.1              5
                                                      MIAL-Real Estate              NAV           15.0         4896             50.5        2472.4             16
                                                      BIAL-Airport                  FCFE          15.0         1645             43.0         707.3              4



                                                      Total                                                    8907                         4524.2             29



                                                      Less: Net Debt                                                                        1730.8             11


                                                      Target                                                                                2793.4             18
                                                      Source: Company, ICICIdirect.com Research




  ICICI Securities Ltd | Retail Equity Research                                                                                                         Page 6
Financial summary
Profit and loss statement                                                     Cash flow statement
(| Crore)                           FY11        FY12      FY13E      FY14E    (| Crore)                                      FY11       FY12 FY13E        FY14E
Net Sales                        1,914.7     2,491.8     3,398.9    5,199.3   Profit after Tax                              154.9       61.5 -138.1        129.1
Growth (%)                            7.2       30.1        36.4       53.0   Depreciation                                  183.6      248.9    443.3      758.1
Total Operating Expenditure      1,400.7     1,797.8     2,317.3    3,105.2   Cash Flow before WC changes                   338.6      310.4    305.3      887.2
EBITDA                             514.0       694.1     1,081.6    2,094.0   Net Increase in Current Assets               -620.5   -1,313.1 -209.5     -1,981.3
Growth (%)                            9.8       35.0        55.8       93.6   Net Increase in Current Liabilities           194.0    1,175.6 -146.8      1,655.7
Interest                           263.1       467.3       831.1    1,157.4   Net cash flow from op. activities             -88.0      172.9    -51.0      561.5
Depreciation                       183.6       248.9       443.3      758.1    (Purchase)/Sale of Investment               -563.5      369.7      0.0    1,400.0
Other Income                        28.5        88.9        54.6      127.2   (Purchase)/Sale of Fixed Assets              -880.2   -9,159.4 -1,145.8   -2,272.3
PBT                                 95.7        66.7      -138.2      305.7   Net Cash flow from Investing Activities      -813.4   -7,517.0 -1,120.7     -758.8
Total Tax                           21.3        67.8        21.5      109.1   Inc / (Dec) in Equity Capital                   0.0        0.0      0.0        0.0
PAT before MI                       74.4         -1.1     -159.7      196.6   Inc / (Dec) in Secured loan                   902.9    7,745.3    868.5     -421.0
Minority Interest                   30.4        43.9        25.1      113.5   Inc / (Dec) in Unsecured loans                200.0      963.7      0.0        0.0
Profit from Associates             110.9       106.4        46.7       46.0   Net Cash flow from Financing Activities     1,178.8    8,742.2    868.4     -421.0
Less: Prior Period Items              0.0         0.0        0.0        0.0
PAT                                154.9        61.5      -138.1      129.1   Net Cash flow                                277.4 1,398.1 -303.3 -618.3
Growth (%)                           -0.6      -60.3          LP         PL   Opening Cash/Cash Equivalent                  50.8   328.2 1,726.3 1,422.9
EPS                                   1.0         0.4       -0.9        0.8   Closing Cash/ Cash Equivalent                328.2 1,726.3 1,422.9   804.6
Source: Company, ICICIdirect.com Research                                     Source: Company, ICICIdirect.com Research




Balance Sheet                                                                 Key ratios
(| Crore)                          FY11        FY12       FY13E      FY14E                                                  FY11       FY12    FY13E      FY14E
Liabilities                                                                   Per share data (|)
Equity Capital                     157.9       157.9       157.9      157.9   EPS                                            1.0       0.4      (0.9)       0.8
Reserve and Surplus              3,228.9     3,323.4     3,185.3    3,314.4   Cash EPS                                       2.1       2.0       1.9        5.6
Total Debt                       5,548.4    14,257.4    15,125.9   14,704.9   BV                                            21.4      22.0      21.2       22.0
Deferred Tax Liability              57.0       300.8       300.8      300.8   Operating profit per share                     3.3       4.4       6.8       13.3
Minority Interest                1,153.4     3,116.8     3,141.9    3,255.4
Deferred Income                    170.3       164.3       164.3      164.3   Operating Ratios (%)
                                                                              EBITDA Margin                                 26.8      27.9      31.8       40.3
Sources of Funds               10,315.8     21,320.6    22,076.1   21,897.7   PBT / Net Sales                                5.0       2.7      (4.1)       5.9
Assets                                                                        PAT Margin                                     8.1       2.5      (4.1)       2.5
Total Gross Block                3,844.3     6,405.0    14,639.1   17,487.8   Inventory days                                 6.4       7.8       7.8        7.8
Less Accumulated Depreciatio       954.5     1,462.1     1,905.4    2,663.5   Debtor days                                   13.2      66.8      66.8       66.8
Net Block                        2,889.9     4,942.9    12,733.6   14,824.2   Creditor days                                 19.9      62.8      62.8       62.8
Capital WIP                      3,196.2     9,632.3     2,544.1    1,967.7   Return Ratios (%)
Net Intangible Assets              548.9       970.3       970.3      970.3   RoE                                            4.6        1.8     (4.1)       3.7
Goodwill on Consolidation          233.1     1,161.6     1,161.6    1,161.6   RoCE                                           3.3        2.1      3.0        6.2
Investments                      2,501.7     2,132.0     2,132.0      732.0   RoIC                                           4.2        3.3      4.1        8.4
                                                                              Valuation Ratios (x)
Inventory                           31.7        75.4        70.7      152.8   P/E                                           14.7      37.1        -        17.7
Debtors                             69.3       456.2       622.3      951.9   EV / EBITDA                                   14.6      21.3      14.8        7.7
Loans and Advances                 703.0     1,569.3     1,530.1    3,211.0   EV / Net Sales                                 3.9       5.9       4.7        3.1
Other Current Assets               212.1       228.3       315.6      204.4   Market Cap / Sales                             1.2       0.9       0.7        0.4
Cash                               328.2     1,726.3     1,422.9      804.6   Price to Book Value                            0.7       0.7       0.7        0.7
Total Current Assets             1,344.2     4,055.4     3,961.6    5,324.6   Solvency Ratios (x)
Total Current Liabilities          398.3     1,573.8     1,427.0    3,082.7   Debt / EBITDA                                 10.8      20.5      14.0        7.0
Net Current Assets                 946.0     2,481.6     2,534.5    2,241.9   Debt / Equity                                  1.6       4.1       4.5        4.2
                                                                              Current Ratio                                  3.4       2.6       2.8        1.7
Application of funds           10,315.8     21,320.6    22,076.1   21,897.7   Quick Ratio                                    2.6       1.5       1.8        1.5
Source: Company, ICICIdirect.com Research                                     Source: Company, ICICIdirect.com Research




  ICICI Securities Ltd | Retail Equity Research                                                                                                    Page 7
 ICICIdirect.com coverage universe (Infrastructure)
                              CMP                    M Cap           EPS (|)          P/E (x)       EV/EBITDA (x)         P/B (x)          RoE (%)
Sector / Company               (|)    TP(|) Rating    (| Cr)   FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
GMR Infra (GMRINF)               24     23 Hold       9,420     -1.1    0.1  0.7 NA 144.6 27.1 24.2 15.4          8.9 1.0    1.0  1.0 -4.6    0.6  2.9
GVK Power (GVKPOW)               14     18    Buy     2,282      0.4   -0.9  0.8 37.1    NA 17.7 21.3 14.8        7.7 0.7    0.7  0.7  1.8   -4.1  3.7
IRB Infra (IRBINF)              159    141    Buy     5,286    14.9 15.4 15.6 8.3        8.1  7.9 6.8     6.9     6.3 1.4    1.2  1.1 17.3 15.4 13.7
JP Associates (JAIASS)           82     72    Buy    17,426      4.8    3.5  4.8 14.2 19.6 14.4 8.9       9.0     8.1 1.2    1.1  1.0  9.5    5.9  7.5
Sadbhav Engg. (SADENG)          143    148    Buy     2,143      9.4    9.6  9.5 14.3 13.9 14.1 8.3       9.4     7.6 2.6    2.2  1.9 18.3 16.1 13.8

Source: Company, ICICIdirect.com Research


                                                               Exhibit 8: Recommendation History
                                                                 40


                                                                 30


                                                                 20


                                                                 10


                                                                  0
                                                                         Oct-11     Nov-11      Jan-12     Feb-12    Mar-12    May-12    Jun-12        Aug-12   Sep-12

                                                                                                             Price      Target Price

                                                               Source: Reuters, ICICIdirect.com Research



                                                               Exhibit 9: Recent Releases
                                                               Date            Event                                          CMP       Target Price            Rating
                                                               21-Sep-11       Event Update                                    17                 31              Buy
                                                               11-Nov-11       Q2FY12 Result Update                            13                 32              Buy
                                                               15-Feb-12       Q3FY12 Result Update                            19                 28              Buy
                                                               13-Apr-12       Management Meet Update                          17                 28              Buy
                                                               10-May-12       Q4FY12 Result Update                            12                 18              Buy
                                                               9-Aug-12        Q1FY13 Result Update                            13                 18              Buy
                                                               Source: Company, ICICIdirect.com Research




 ICICI Securities Ltd | Retail Equity Research                                                                                                              Page 8
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;




                                  Pankaj Pandey                                          Head – Research                                       pankaj.pandey@icicisecurities.com

                                                                        ICICIdirect.com Research Desk,
                                                                        ICICI Securities Limited,
                                                                        1st Floor, Akruti Trade Centre,
                                                                        Road No. 7, MIDC,
                                                                        Andheri (East)
                                                                        Mumbai – 400 093

                                                                         research@icicidirect.com

ANALYST CERTIFICATION
We /I, Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this
research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to
the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.


Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading
underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of
companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities
generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts
cover.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors and
employees (“ICICI Securities and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities
from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities
policies, in circumstances where ICICI Securities is acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.

ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have received
compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investment
banking or other advisory services in a merger or specific transaction. It is confirmed that Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts and the authors of
this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI
Securities, which include earnings from Investment Banking and other business.

ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the
research report.

It is confirmed that Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE)                    research analysts and the authors of this report or any of their family members does not serve as an
officer, director or advisory board member of the companies mentioned in the report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. ICICI Securities and affiliates may act upon or make use
of information contained in the report prior to the publication thereof.

This report 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 ICICI Securities 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 certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.



    ICICI Securities Ltd | Retail Equity Research                                                                                                                                                    Page 9

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:6
posted:9/28/2012
language:Latin
pages:9