nrb bearings (nrbbea) | 119content.icicidirect.com/mailimages/idirect_nrbbearings_q1fy18.pdf · nrb...

August 17, 2017

ICICI Securities Ltd | Retail Equity Research

Result Update

Weak performance, maintain HOLD…

NRB Bearings reported weak Q1FY18 numbers. The company

reported topline, EBITDA and PAT, which were below our estimates

Revenues came in at | 179.2 crore, up 2.6%YoY. We estimate

revenues of | 196.1 crore for the quarter

EBITDA declined 6.5% YoY to | 27.4 crore. The company reported

subdued EBITDA on account of a sharp increase in other expenses.

Other expenses increased to | 41.4 crore in Q1FY18 vs. | 28.9 crore

in Q1FY17, up 43.1% YoY. Accordingly, EBITDA margins came in at

15.3% vs. 16.8% in Q1FY17. We estimate margins of 16.5% for the

quarter. Employee expenses remained flat YoY at | 28.9 crore

PAT declined 10%YoY to | 12.7 crore. We estimate PAT of | 15.8

crore for the quarter

Leading bearings manufacturer with focus on cylindrical & needle bearing

NRB is the leader in the needle bearing segment in India with ~70%

market share. Needle roller bearings comprised ~55% of NRB’s topline in

FY14. A needle roller bearing, as a customised product, requires NRB to

work with OEMs from the conceptualisation stage. This enables it to build

sticky clientele relationships with almost all major OEM players. Apart

from needle bearings, cylindrical bearings are the other key product with

needle and cylindrical bearings together forming ~68% of the topline.

Performance from export business to drive growth over FY17-19E

To expand its geographical footprints and foray into newer platforms,

NRB has forayed into exports wherein it caters to global players such as

Daimler, Renault, Volvo and Getrag. NRB’s exports, which grew at 11%

CAGR in FY13-17, have also provided a natural hedge for its import of raw

materials. Exports, which formed 22% of the topline in FY12, constituted

~18% of revenues in FY17. We expect export revenues to grow at 9%

CAGR in FY17-19E to | 157.9 crore.

Topline growth likely to accelerate on recovery in auto, after-markets

While FY17 witnessed a slight recovery in auto volumes, we believe the

same will gain traction in FY17-19E. We estimate the auto industry will

grow at 6-8% CAGR in FY17-19E. Accordingly, we expect bearings

demand from OEM segment to grow at 8% CAGR in FY17-19E. Similarly,

we expect business from after-market segment to grow at a CAGR of 7%

over FY17-19E. Thus, we expect the OEM and after-market segments to

clock revenues of | 562.5 crore and | 107.1 crore, respectively.

Maintain HOLD recommendation

We marginally revise our earnings estimate upwards to account for better

growth of FY18 and FY19. Thus, we now estimate topline and bottomline

growth of 8.6% and 10.6% CAGR, respectively, in FY17-19E. With

moderate capex of ~| 50 crore in FY18E-19E, we believe NRB is well

placed to capitalise on the next phase of growth. We continue to value

the company at 19x FY19E EPS of | 6.8 to arrive at a target price of | 130.

We continue to have a HOLD recommendation on the company.

NRB Bearings (NRBBEA) | 119 Rating matrix

Rating : Hold

Target : | 130

Target Period : 12 months

Potential Upside : 9%

What’s changed?

Target Changed from | 123 to | 130

EPS FY18E Changed from | 5.9 to | 6.1

EPS FY19E Changed from | 6.5 to | 6.8

Rating Unchanged

Quarterly performance

Q1FY18 Q1FY17 YoY (%) Q4FY17 QoQ (%)

Revenue 179.2 174.6 2.6 188.7 (5.1)

EBITDA 27.4 29.3 (6.5) 27.0 1.7

EBITDA (%) 15.3 16.8 -149 bps 14.3 102 bps

PAT 12.7 14.1 (10.0) 13.0 (2.0)

Key financials (Consolidated)

| Crore FY16 FY17 FY18E FY19E

Revenue 674.9 727.6 795.2 858.3

EBITDA 112.6 119.4 130.4 141.0

Net Profit 42.0 54.0 59.1 66.2

EPS (|) 4.3 5.6 6.1 6.8

Valuation summary (Consolidated)

FY16 FY17 FY18E FY19E

P/E (x) 27.5 21.3 19.5 17.4

Target P/E 30.0 23.3 21.3 19.0

EV/EBITDA 12.1 11.7 10.5 9.5

P/BV 4.1 3.6 3.3 2.9

RoE (%) 15.0 17.0 16.8 16.7

RoCE (%) 16.0 16.1 17.8 18.1

Stock data

Particular Amount

Market Capitalization 1,153

Total Debt (FY17) 265

Cash and Investments (FY17) 23

EV (FY17) 1,359

52 week H/L (|) 157 / 103

Equity capital 19.4

Face value (|) 2.0

Price performance

1M 3M 6M 12M

NRB Bearings (16.3) (5.4) (1.9) (2.7)

Schaeffler India (7.2) (7.1) 3.5 8.0

SKF India (4.6) (4.7) 7.1 8.6

Timken India (9.9) (4.5) 7.5 24.3

Research Analyst

Chirag J Shah

[email protected]

Sagar Gandhi

[email protected]


Variance analysis

Year Q1FY18 Q1FY18E Q1FY17 YoY (%) Q4FY17 QoQ(%) Comments

Income from Operation 179.2 196.1 174.6 2.6 188.7 (5.1) Muted topline growth due to GST impact in the after-market

segment of the business

Other Income 1.6 1.6 1.4 17.8 1.3 19.5

Total Income 180.7 197.7 176.0 2.7 190.0 -4.9

Cost of materials consumed 74.5 78.5 70.9 5.1 73.5 1.4

Change in inventories 6.9 4.9 4.5 53.9 6.9 0.7

Employee cost 28.9 32.2 28.9 0.1 28.3 2.3

Other expenses 41.4 32.2 28.9 43.1 53.1 (22.0)

EBITDA 27.4 32.4 29.3 (6.5) 27.0 1.7

EBITDA Margin (%) 15.3 16.5 16.8 -149 bps 14.3 102 bps Subdued margins on account of sharp increase in other expenses

Depreciation 7.2 7.4 7.4 (3.1) 7.4 (2.2)

Interest 3.4 3.3 3.2 6.2 3.6

PBT 18.4 23.3 20.0 (8.2) 17.3 6.3

Taxes 5.7 6.9 5.9 (4.0) 4.3 31.1

PAT 12.7 16.3 14.1 (10.0) 13.0 (2.0) Consequently, PAT declined 10% YoY

Source: Company, ICICIdirect.com Research

Change in estimates

FY17 FY18E FY19E

(| Crore) Old New % Change Old New % Change

Revenue 727.6 796.1 795.2 (0.1) 844.3 858.3 1.7

EBITDA 119.4 131.2 130.4 (0.6) 139.5 141.0 1.1

EBITDA Margin (%) 16.4 16.5 16.4 -10 bps 16.5 16.4 -7 bps

PAT 54.0 57.3 59.1 3.2 62.8 66.2 5.4

EPS (|) 5.6 5.9 6.1 3.4 6.5 6.8 5.0


Assumptions

| crore FY17 FY18E FY19E FY18E FY19E

Domestic OEMs 482.2 520.8 562.5 443.0 469.5

After market sales 93.5 100.1 107.1 120.1 126.1

Exports 132.9 144.9 157.9 202.6 216.8

Current Earlier



Company Analysis

Strong client relations to drive growth

Presence across major OEM players, new segments to open up

opportunities

NRB is present across the auto OEM space through its exposure to the

two-wheelers, four-wheelers, commercial vehicles (CV), passenger

vehicles (PV) and off-highway segments. With a proven track record over

50 years, it is a preferred supplier to leading domestic OEMs such as Hero

MotoCorp, Bajaj Auto, Maruti Suzuki, Tata Motors, Ashok Leyland, etc.

which is clearly depicted in the staggering 70% market share commanded

by the company in the needle roller bearings space. A needle roller

bearing is a customised product. Hence, the company works with OEMs

from the conceptualisation stage to provide anti-friction solutions. This

enables NRB to build a sticky clientele relationship with major OEM

players.

Apart from the automotive segment, the company also enjoys a presence

in the race boats segment wherein Ingersoll Rand is one of the key

customers. Furthermore, NRB has also outlined growth opportunities in

other mobility segments such as defence in the form of gun carriers,

marine, Railways and MRTS wherein rising investment could open up

avenues for bearings demands.

NRB, whose domestic automotive segment, forms ~62% of the topline,

caters to almost all segment viz. two-wheelers (33% of revenues), CV

(19% of revenues), PV (20% of revenues) and farm/off highway (forming

10% of revenues). Domestic automotive OEM revenues of NRB have

grown at 7.2% CAGR during FY10-16 to | 383 crore.

Exhibit 1: Key customers of NRB

Category Key customers

Two-wheeler OEMs Hero MotoCorp, HMSI, Bajaj Auto, TVS Motor

PV Maruti Suzuki, Tata Motors

CV/Utility vehicle Mahindra & Mahindra, Ashok Leyland


Diversified client base helps diversify risk

NRB’s client portfolio is well diversified with the average share of the top

customer over FY09-16 at ~10% of revenues.

The contribution of NRB’s top 10 clients is at ~54% of the topline. The

company also indicated that the constituents of the top 10 keep on

changing based on the individual segmental growth.

Automotive segment recovery to boost demand…

NRB OEM segment moves in tandem with industry sales volumes…

Revenue growth of NRB’s auto segment has mimicked overall auto sales

volumes. It is noteworthy, for the year, auto volumes jumped sharply.

NRB had shown a similar sharp uptick. For example, in FY10 and FY11,

when overall auto volumes grew ~25% and 26% YoY, NRB’s auto

segment grew ~34% and ~38% YoY, respectively. Similarly, during the

challenging times for the automotive segment (muted 2% and 4% YoY

growth in FY13 and FY14, respectively), NRB’s auto segment declined at

4.3% and 1.2% YoY in FY13 and FY14, respectively, exhibiting a strong

correlation. With the auto industry again showing signs of traction in

FY17, we believe the recovery will now be visible from FY18E-19E.

Accordingly, we now expect total revenues to grow at 8.6% CAGR in

FY17-19E to | 858 crore.

A needle roller bearing is a customised product. Hence, the

company works with OEMs from the conceptualisation

stage to provide anti-friction solutions


NRB’s domestic OEMs set to grow at ~8% CAGR over FY17-19E

We expect net revenues from the OEM segment to grow at a moderate

8% CAGR during FY17-19E to | 562.5 crore, factoring recovery in the auto

space over FY18E & FY19E.

We highlight that our revenue assumption for NRB’s domestic OEM

segment is largely based on the overall domestic auto growth

assumptions of 6-8% CAGR during FY17-19E. Furthermore, we also

derive comfort from the huge launch pipeline in four-wheelers (over 20

launches/refreshes in the next two years) and two-wheelers space (over

35 launches/refreshes in the next two years).

Exhibit 3: NRB OEM segment revenues trend

442

482

521

562

8.08.0

3.53.5

0

100

200

300

400

500

600


| c

rore

-5

-3

-1

1

3

5

7

9

(%

)

Domestic OEMs YoY (%)


De-risked geographical presence through exports…

To expand its footprint and foray into newer platforms, NRB has focused

on exports wherein it caters to global players such as Daimler Trucks,

Renault, Volvo and Getrag. With a focus on exports, the company has

demonstrated a strong exports performance. Its export revenues have

grown at 31.5% CAGR over FY09-16. The company’s export, which

formed ~15% of topline in FY09, constituted ~25% of revenues in FY17,

thus enabling NRB to combat the domestic slowdown.

According to the company, its focus on exports by the way of working

from the conceptualisation stage given its customised product offerings

has enabled it to strengthen its foothold in the export market. Given the

fact that NRB is one of the few global players (INA, Koyo and NSK)

Exhibit 2: Auto sales growth, NRB auto OEM segment revenue growth trend

11.6

-4.3

-1.2 2.9 3.5

3.5

8.08.0

14.2

1.94.0

8.4

2.8

7.0

2.5

3.0

-25

-15

-5

5

15

25

35

45

FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E

(%

)Auto OEM Segment (YoY) Auto Volumes (YoY)

Source: Company, Bloomberg, ICICIdirect.com Research


producing needle roller bearings coupled with the technology at par with

MNCs, export earnings are expected to remain robust.

Going ahead, we expect NRB’s export revenues to grow at 9% CAGR

over FY17-19E. Consequently, the share of export revenues is expected to

contribute ~19% of revenues in FY19E.

Exhibit 4: NRB export revenue trend

167.1

129.9 132.9

144.9

157.9

20.5

-22.2

2.3

9.09.0

0

20

40

60

80

100

120

140

160

180

FY15 FY16 FY17 FY18E FY19E

| c

rore

-25

-20

-15

-10

-5

0

5

10

15

20

25

(%

)

Exports YoY (RHS)


Exhibit 5: Exports as percentage of topline

19.518.5 18.9 19.1

0

5

10

15

20

25

30

35


(%

)

Exports



Consolidated revenues to grow at 8.6% CAGR during FY17-19E

Exhibit 6: Expect overall consolidated revenue growth of 8.6% CAGR in FY17-19E revenue trend

675

728

858

795

-

160

320

480

640

800

960

FY16 FY17 FY18E FY19E(|

crore)


Exhibit 7: Share of exports to rise with robust export growth

19.5 18.5 18.9 19.1

66.2 67.0 68.0 68.0

13.0 13.0 13.1 12.9

0

10

20

30

40

50

60

70

80

90

100


(%

)

Exports Domestic OEM Aftermarket



EBITDA to grow at 8.7% CAGR in FY17-19E

We expect operating profit to grow at 8.7% CAGR over FY17-19E. We

also expect margins to inch higher over FY17-19E due to higher

contribution from exports. Accordingly, we expect margins to remain

stable at 16.4% in FY19E.

Exhibit 8: EBITDA growth trend

112.6

130.4

141.0

119.4

16.716.4 16.4 16.4

-

20

40

60

80

100

120

140

160


(|

crore)

10

13

16

19

(%

)

EBITDA Margin (RHS)


PAT expected to grow at 10.6% CAGR in FY17-19E

We estimate PAT of | 66.2 crore for FY19E.

Exhibit 9: Consolidated earnings trend

42.0

54.0

59.1

66.2

6.2

7.4

7.47.7

-

10

20

30

40

50

60

70


(|

crore)

-

3

6

9

12

(%

)

PAT Margin (RHS)



Outlook and valuation

NRB has been a key player in the domestic bearings industry considering

its leadership position in needle roller bearings. Being an automotive

centric supplier with customised product offerings, the company also

enjoys a sticky client relationship like its MNC peers such as SKF, FAG

and Timken and has a presence across all leading OEM players in India.

NRB has consistently demonstrated a handsome financial performance

with revenues and earnings CAGR of 11.2% and 11.6%, respectively, in

FY10-16. Going ahead, with the overall improvement in the economy and

other macro factors such as easing of inflation and lowering of interest

rates, automotive volumes are expected to bounce back. NRB, being an

important player in the automotive bearings space with a leadership

position in needle roller bearings, is expected to be a key beneficiary. We

also expect export revenues to grow at 7% CAGR in FY17-19E as the

company continues to expand its footprint in newer geographies.

While we continue to believe that NRB would be one of the key

beneficiaries of a recovery in automotive sector and given its leadership

position in needle roller bearings space. Accordingly, we estimate topline

and bottomline growth of 8.6% and 10.6% CAGR over FY17-19E. With

moderate capex of ~| 50 crore in FY18E-19E, we believe NRB is well

placed to capitalise on the next phase of growth. We continue to value

the company at 19x FY19E EPS of | 6.8 to arrive at a target price to | 130.

We continue to have a HOLD recommendation on the company.


Recommendation history vs. consensus

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0

20

40

60

80

100

120

140

160

180

Aug-17Jun-17Mar-17Jan-17Oct-16Aug-16May-16Mar-16Jan-16Oct-15Aug-15

(%

)

(|)

Series1 Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research, Initiated coverage on 7th January 2015

Key events

Date Event

FY12 Industrial bearing undertaking demerged and listed as separate company called NRB Industrial Bearings

FY10-13 Export led growth (67.8% CAGR) boosts the topline (18.7% CAGR)

FY14 Muted automotive growth reflected in muted topline (growth of 2.5% YoY)

FY15 Improvement in automotive sales boosts topline growth (~10% YoY) of NRB. Margins also expand led by operating leverage

FY16 Margin improvement due to continuous growth in exports

FY17 NRB mulls foray in defence, aerospace and railways semgent


Top 10 Shareholders Shareholding Pattern

Rank Name Latest Filing Date % O/S Position (m) Change (m)

1 Trilochan S Sahney Trust 25-07-2017 36.41% 35.29M -0.08M

2 Nalanda Capital Pte Ltd 30-06-2017 9.99% 9.68M 0

3 Zaveri (Harshbeena Sahney) 30-06-2017 8.72% 8.45M +0.00M

4 SBI Funds Management Pvt. Ltd. 30-06-2017 6.97% 6.75M 0

5 ICICI Prudential Life Insurance Company Ltd. 30-06-2017 4.61% 4.47M -0.12M

6 Sundaram Asset Management Company Limited 31-05-2017 3.86% 3.74M 0

7 Sahney (Devesh Singh) 30-06-2017 3.75% 3.63M 0

8 Sahney (Hanwantbir Kaur) 30-06-2017 2.96% 2.87M 0

9 Mondrian Investment Partners Ltd. 30-06-2017 2.53% 2.45M +2.45M

10 DSP BlackRock Investment Managers Pvt. Ltd. 30-06-2017 1.73% 1.68M 0

(in %) Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

Promoter 55.0 54.9 54.6 54.6 54.3

FII 19.3 19.3 19.2 19.1 19.3

DII 14.9 14.6 14.8 14.7 15.4

Others 10.9 11.2 11.4 11.6 11.0

Source: Reuters, ICICIdirect.com Research

Recent Activity

Investor name Value Shares Investor name Value Shares

Mondrian Investment Partners Ltd. +4.86M +2.45M ICICI Prudential Life Insurance Company Ltd. -0.25M -0.12M

DHFL Pramerica Asset Managers Private Limited +0.04M +0.02M Trilochan S Sahney Trust -0.16M -0.08M

Zaveri (Harshbeena Sahney) +0.00M +0.00M

Investor name Investor name

Source: Reuters, ICICIdirect.com Research


Financial summary

Profit and loss statement | Crore

(| Crore) FY16 FY17 FY18E FY19E

Net Sales 666.8 719.6 784.2 847.3

Other Operating Income 8.1 8.0 11.0 11.0

Total Operating Income 674.9 727.6 795.2 858.3

% YoY Growth 0.7 7.8 9.3 7.9

Other Income 2.4 7.8 8.4 9.8

Total Revenue 677.3 735.4 803.6 868.1

Cost of materials consumed 251.7 279.7 305.8 330.4

Change in inventories 8.1 (7.8) (8.5) (9.1)

Employee cost 126.3 130.2 142.3 153.6

Other Expenses 176.3 206.0 225.1 242.3

Total expenditure 562.4 608.2 664.8 717.3

EBITDA 112.6 119.4 130.4 141.0

% YoY Growth (8.5) 6.0 9.2 8.1

Interest 17.0 16.9 15.2 15.5

PBDT (24.8) (3.0) 3.3 0.6

Depreciation 32.0 32.3 33.9 35.0

PBT 63.9 78.0 89.7 100.4

Tax 20.7 22.5 29.1 32.5

PAT 42.0 54.0 59.1 66.2

% YoY Growth (21.1) 28.7 9.4 11.9

EPS 4.3 5.6 6.1 6.8


Cash flow statement | Crore


Profit after Tax 42.0 54.0 59.1 66.2

Depreciation 32.0 32.3 33.9 35.0

Interest 17.0 16.9 15.2 15.5

Other income (2.4) (7.8) (8.4) (9.8)

Prov for Taxation 20.7 22.5 29.1 32.5

Change in Working Capital 70.8 (85.7) (19.5) (28.1)

Taxes Paid (21.0) (21.6) (27.8) (32.5)

Cashflow from Operating Activities 159.1 10.7 81.7 78.7

(Purchase)/Sale of Fixed Assets (34.5) (23.8) (21.2) (25.0)

(Purchase)/Sale of Investments - - - -

Other Income 2.4 7.8 8.4 9.8

Cashflow from Investing Activities (32.1) (16.0) (12.8) (15.2)

Issue/(Repayment of Debt) (90.1) 27.5 (34.2) 4.0

Changes in Minority Interest 1.2 1.4 1.5 1.7

Changes in Networth (17.0) (16.1) (23.4) (23.4)

Interest (17.0) (16.9) (15.2) (15.5)

Others - - - -

Cashflow from Financing Activities (123.0) (4.1) (71.4) (33.2)

Changes in Cash 4.0 (9.4) (2.5) 30.4

Opening Cash/Cash Equivalent 28.0 32.0 22.6 20.1

Closing Cash/ Cash Equivalent 32.0 22.6 20.1 50.5


Balance sheet | Crore


Share Capital 19.4 19.4 19.4 19.4

Reserves & Surplus 259.8 297.7 333.4 376.2

Total Shareholders fund 279.2 317.1 352.8 395.6

Minority Interest 4.1 5.5 7.0 8.7

Total debt 237.2 264.7 230.5 234.5

Deferred tax liability (net) 11.7 12.7 14.0 14.0

Total Liabilities 532.2 600.0 604.3 652.7

Gross Block 603.5 619.9 639.9 659.9

Acc: Depreciation 344.5 373.4 407.3 442.3

Net Block 259.0 246.5 232.6 217.6

Capital WIP 4.8 8.8 10.0 15.0

Investments 0.1 0.1 0.1 0.1

Inventory 144.7 172.3 180.5 195.0

Sundry debtors 225.9 221.2 249.3 269.4

Cash 32.0 22.6 20.1 50.5

Loans & Advances 64.9 69.8 91.0 98.3

Other current assets 0.1 1.1 1.1 1.1

CL& Prov. 199.8 142.8 180.8 194.6

Net Current Assets 267.8 344.2 361.2 419.6

Total Assets 532.2 600.0 604.3 652.7


Key ratios

(Year-end March) FY16 FY17 FY18E FY19E

Per share data (|)

EPS 4.3 5.6 6.1 6.8

Cash EPS 7.6 8.9 9.6 10.4

BV 28.8 32.7 36.4 40.8

DPS 1.8 1.7 2.4 2.4

Cash Per Share 35.5 38.5 42.0 45.6

Operating Ratios (%)

EBITDA Margin 16.7 16.4 16.4 16.4

PBT / Net Sales 11.9 12.0 12.1 12.4

PAT Margin 6.2 7.4 7.4 7.7

Inventory days 78 86 83 83

Debtor days 122 111 114 115

Creditor days 103 79 79 79

Return Ratios (%)

RoE 15.0 17.0 16.8 16.7

RoCE 16.0 16.1 17.8 18.1

RoIC 16.8 16.0 16.8 18.1

Valuation Ratios (x)

P/E 27.5 21.3 19.5 17.4

EV / EBITDA 12.1 11.7 10.5 9.5

EV / Net Sales 2.0 1.9 1.7 1.6

Market Cap / Sales 1.7 1.6 1.5 1.3

Price to Book Value 4.1 3.6 3.3 2.9

Solvency Ratios

Debt/EBITDA 2.1 2.2 1.8 1.7

Net Debt / Equity 0.7 0.8 0.6 0.5

Current Ratio 2.2 2.8 2.9 2.9

Quick Ratio 1.5 1.8 1.9 1.9



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SKF (SKFIND) 1560 1,800 Buy 9492 46.3 53.0 61.7 33.7 29.4 25.3 20.7 23.1 23.8 13.5 15.1 15.6

Timken India (TATTIM) 706 867 Buy 5895 14.3 15.9 19.3 48.3 43.3 35.8 22.7 24.2 25.5 16.0 15.7 16.6

NRB Bearing (NRBBEA) 119 123 Hold 1192 5.6 6.2 6.8 21.2 19.2 17.3 16.1 17.9 18.1 17.0 16.9 16.7

Grindwell Norton (GRINOR) 392 500 Buy 5536 10.8 12.5 14.4 39.4 34.1 29.6 19.5 21.3 22.4 13.4 14.2 15.0

RoE (%)EPS (|) P/E (x) RoCE (%)



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 [email protected]

ICICIdirect.com Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]


Disclaimer

ANALYST CERTIFICATION

We /I, Chirag Shah PGDBM; Sagar Gandhi 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 views about 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.

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