Hero MotoCorp (HERHON)

ICIC

I S

ecurit

ies –

Retail E

quit

y R

esearch

Result

Update

August 14, 2020

CMP: | 2,800 Target: | 3,235 (16%) Target Period: 12 months

Hero MotoCorp (HERHON)

BUY

Outsized beneficiary of post Covid world…

Hero MotoCorp (HMCL) reported strong Q1FY21 results. Total 2-W sales

volume for the quarter came in at 5.6 lakh units, down 69.4% YoY.

Consequent net sales were at | 2,972 crore, down 63% YoY, tracking

~12.8% sequential rise in blended ASPs to | 52,741/unit. EBITDA in Q1FY21

was at | 108 crore, down 90.7% YoY with corresponding EBITDA margins

at 3.6%. Margin performance was encouraging considering mere 25%

capacity utilisation during the quarter. HMCL said that ex-fixed costs

incurred during lockdown, margins were at 12% levels. Consequent PAT

came in at | 61.3 crore for the quarter.

Healthy demand traction leads to market share gains

HMCL continues to lead the way for the 2-W industry in the post-Covid

months, reflected in substantial market share gains (up 500 bps YoY as of

July). Retail volumes for July were down 28% vs. pre-Covid levels and 29%

YoY against overall industry’s 33% and 38% decline, respectively. We

remain confident that HMCL, the motorcycle segment market leader will be

an outsized beneficiary of its presence on the (1) rural/semi-urban side and

(2) entry level offerings. Demand traction remains strong in rural

geographies courtesy healthy sentiment and cash levels on the back of

normal monsoon progress, remunerative Rabi crop, sharp YoY jump in

Kharif sowing, continued government focus on farm incomes and lesser

incidence of the pandemic. The shift towards personal mobility as a form of

social distancing is also helping (HMCL estimated 10-12% demand

preponing on this count) and would act as a further tailwind. We build flattish

volume CAGR in FY20-22E on a conservative basis.

Strong financials, B/S strength offer additional comfort

The company has over the years exhibited strong financial discipline. With

a debt free B/S and large cash reserves on books (~| 6,500 crore as of FY20,

~11.5% of market cap), it has a track record of healthy dividend payment

(~50% payout ratio over the years, present yield ~3%). Moreover, the

company has also been a consistent cash generator (positive CFO and FCF

in each of the last 10 years; present CFO, FCF yield at ~7%, ~5%

respectively). The company also generated ~ | 1,000 crore cash in Covid-

impacted Q1FY21. Amid focus on cost items, expected improvement in

margin profile is also seen leading to upturn in return ratios in coming years.

Valuation & Outlook

For HMCL we build 8.3% sales CAGR, flattish volume CAGR in FY20-22E.

HMCL’s dominant presence in rural geographies (~50% of sales) and market

leadership in domestic motorcycle segment places in a sweet spot to

capture post Covid consumer trends, in our view. Hence, we upgrade it to

BUY, valuing the company at | 3,235 (20x P/E on FY22E EPS of | 161.8). We

believe market share gains, positive demand outlook and strong financials

merit higher multiples than peers.

K e y F ina ncia ls F Y18 F Y19 F Y20 F Y21E F Y22E C AG R (F Y20-22E)

Net S ales 32,230.5 33,650.5 28,836.1 28,215.0 33,829.9 8.3%

E B ITD A 5,280.2 4,929.8 3,958.0 3,225.1 4,404.1 5.5%

E B ITD A Margins (% ) 16.4 14.6 13.7 11.4 13.0

Net P rofit 3,697.4 3,384.6 3,633.3 2,357.2 3,231.1 -5.7%

Normalised Net P rofit 3,697.4 3,384.6 3,202.6 2,357.2 3,231.1 0.4%

E P S (₹) 185.1 169.5 181.9 118.0 161.8

P /E 15.1 16.5 15.4 23.7 17.3

R oNW (% ) 31.4 26.3 22.7 15.4 19.1

R oC E (% ) 38.1 32.0 21.2 15.3 20.2

Key Financial Summary

Source: ICICI Direct Research, Company

Particulars

P a rticu la r Am oun t

Market C apita liz ation ₹ 55916 C rore

Total D ebt (F Y 20) ₹ 150 C rore

C ash & Inv. (F Y 20) ₹ 6485 C rore

E V (F Y 20) ₹ 49581 C rore

52 week H /L (₹) 3021 / 1475

E quity capita l (₹ crore) 39.9

F ace value ₹ 2

Price chart

02,0004,0006,0008,00010,00012,00014,000

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HMCL (LHS) Nifty (RHS)

Key Highlights

Total 2-W sales volume in Q1FY21

at 5.6 lakh units, down 69.4% YoY.

Blended ASPs rose 12.8% QoQ

Margins at 3.6%, with normalised

margins at 12% as per management

HMCL remains in a sweet spot by

being a dominant player on the rural

side while also being a beneficiary

of move towards affordable

personal mobility post Covid.

Strong financial discipline, cash

generation and dividend payment

record are structural positives

Upgrade from HOLD to BUY with

revised target price of | 3,235 i.e.

20x P/E on FY22E EPS

Research Analyst

Shashank Kanodia, CFA

[email protected]

Jaimin Desai

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research

Result Update | Hero MotoCorp

Exhibit 1: Variance Analysis

Q1FY21 Q1FY21E Q1FY20 YoY (%) Q4FY20 QoQ (%) Comments

Total Operating Income 2,972 2,792 8,030 -63.0 6,238 -52.4 Topline came in ahead of estimates tracking beat on the

Raw Material Expenses 2,094 1,939 5,592 -62.6 4,320 -51.5

Employee Expenses 382 419 468 -18.2 435 -12.2Employee expenses were well contained and were down

18% YoY and 12% QoQ to | 382 crore

Other expenses 387 419 813 -52.4 823 -53.0

Operating Profit (EBITDA) 108 15 1,158 -90.7 660 -83.6EBITDA came in ahead of estimates tracking beat on

APS's and better cost control at Hero MotoCorp

EBITDA Margins (%) 3.6 0.5 14.4 -1387 bps 10.6 -1010 bps

Other Income 148 189 219 -32.2 169 -12.4 Other income was a tad lower than our estimates

Interest 6.3 4.6 4.4 43.2 4.1 54.2

Depreciation 170.8 210.1 236.1 -27.7 174.7 -2.3 Depreciation witnessed a marginal sequential decline

PBT after Exceptional Items 79.5 -10.1 1,136.4 -93.0 650.6 -87.8

Total Tax 18.2 -2.5 616.5 -97.1 29.9 -39.2 Tax rate came in marginally lower at 23%

PAT 61.3 -7.6 1,257.3 -95.1 620.7 -90.1

EPS (Adjusted) 3.1 -0.4 39.4 -92.2 31.1 -90.1PAT for the quarter came in ahead of estimates tracking

better than anticipated margin trajectory

Key Metrics

Motorcycle volumes ('000s) 530.0 530.0 1,727.8 -69.3 1,279.6 -58.6

Scooter volumes ('000s) 33.4 33.4 115.2 -71.0 54.9 -39.1 Total volumes for the quarter stood at 5.63 lakh units

Net Blended ASP (|/unit) 52,741 49,551 43,573 21.0 46,747 12.8Blended ASPs increased ~13% QoQ to | 52.7k/unit,

largely due to BS-VI transition

Source: Company, ICICI Direct Research

Exhibit 2: Change in estimates

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

Revenue 27,692 28,215 1.9 32,104 33,830 5.4Marginally revised upward our sales estimates for FY21-22E. We

expect net sales to grow at a CAGR of 8.3% over FY20-22E

EBITDA 2,963 3,225 8.8 4,008 4,404 9.9

EBITDA Margin (%) 10.7 11.4 73 bps 12.5 13.0 52 bpsMarginally revised upward our margin estimates tracking upbeat

management commentary on cost saving initiatives

PAT 2,193 2,357 7.5 2,948 3,231 9.6

EPS (|) 109.8 118.0 7.5 147.6 161.8 9.6Upward revision in sales as well as margin estimates leads to

healthy high single digit increase in PAT estimates going forward

FY21E FY22E


Exhibit 3: Assumptions

Comments

FY19 FY20 FY21E FY22E FY21E FY22E

Motorcycle volumes (lakh

units)

71 60 50 60 51 58

Scooter volumes (lakh units) 7 4 4 5 4 5

Total volumes (lakh units) 78 64 54 64 55 63

Growth (%, YoY) -18% -15% 18%

Gross Blended ASP (|/unit) 43,026 44,988 51,795 52,478 50,253 50,827Revise upward our ASPs estimates for FY21-22E tracking the

beat in Q1FY21 amid successful BS-VI transition

The 2-W sales volume is seen declining 15% YoY in FY21E amid

Covid-19 led disruption with decline lower than competition due

to high rural share of sales and upbeat refreshed product slate.

Volumes are seen recovering in FY22E, with volume growth

anticipated at 18.3% YoY. On aggregate basis, volumes are seen

growing at 0.3% CAGR over FY20-22E

EarlierCurrent





Conference Call Highlights

Management guidance/outlook and demand

HMCL believes that continuance of positive demand momentum into

July and August points to the recovery being more organic rather than

just comprising of pent up demand. Personal mobility trend is also

aiding demand, with 10-12% purchase preponing happening on account

of this preference. HMCL believes that India continues to be an

underpenetrated market for 2-Ws. Rural and semi urban geographies are

witnessing greater traction than urban markets

HMCL’s market share improved 500 bps YoY during Q1FY21 and was

maintained at that level during July 2020

Rural fundamentals remain robust. The company witnessed V-shaped

recovery in demand in these geographies post lockdown, with pent up

demand having been serviced already. Urban sentiment, on the other

hand, is more subdued, and the company expects it to revive closer to

the festive period

The recovery is being led by Central zone (Rajasthan, Madhya Pradesh,

Uttar Pradesh), Bihar (excluding local lockdown) and the eastern states.

Demand is moderate in the south while Maharashtra and Gujarat are

relative laggards

Scooter volumes are expected to revive in tandem with urban uptick.

Some models, however, are showing promising signs. For instance,

Pleasure reach has expanded on pan-India basis now (14 states forming

75% of volumes now vs. 6 states forming equivalent volumes last year)

while Destni recorded 30% sequential growth in July

Localised lockdowns are impacting production & supply chain

sporadically, however sufficient demand exists. On overall basis,

demand is outpacing supply

In terms of customer profile, the share of first time and additional buyers

has increased at the expense of replacement buyers

The company wants to move to double digit market share in the

premium motorcycle segment

Revenues, costs and margins

Q1FY21 saw spares revenues of | 293 crore and other operating income

of | 67 crore

Fixed costs incurred during lockdown were ~| 250 crore. Excluding

their impact, EBITDA margins for the quarter stood at 12%. The

management believes that margins are sustainable around this mark

ASPs are largely sustainable at present level

HMCL took some price hikes in July on HF Deluxe, some other models

BS-VI costs have been passed on to customers on an absolute basis

HMCL is focusing on all cost line items and on productivity improvement

R&D spends in FY20 amounted to ~| 700 crore, up 35% YoY

Import content forms <10% of material consumption

Others

HMCL said that BS-IV to BS-VI price delta under e-carburettor is the

same as in fuel injection (FI) technology. Additionally, FI is adaptable to

forthcoming OBD-II regulations and is an accepted technology globally.

Moreover, the Indian ecosystem is more geared towards FI as e-

carburettor makes up ~10% of industry

The company generated ~| 1,000 crore cash during the quarter

Most of HMCL’s top 20 markets are rural and semi urban

The company would build up some inventory in August and September

in preparation for the festive period

HMCL’s unregistered BS-IV vehicles were ~25-30,000 units




Financial story in charts

Exhibit 4: Growth in revenues

28

,44

3

28

,47

5

32

,23

0

33

,65

1

28

,83

6

28

,21

5

33

,83

0

12.5

0.1

13.2

4.4

(14.3)

(2.2)

19.9

(20)

(15)

(10)

(5)

-

5

10

15

20

25

25000

26000

27000

28000

29000

30000

31000

32000

33000

34000

35000

FY16 FY17 FY18 FY19 FY20 FY21E FY22E

(%)

(₹ c

rore

)

Net Sales Growth


Exhibit 5: Margins trend

4,4

55

4,6

35

5,2

80

4,9

30

3,9

58

3,2

25

4,4

04

15.7 16.3 16.4

14.6 13.7

11.4

13.0

-

2

4

6

8

10

12

14

16

18

0

1000

2000

3000

4000

5000

6000


(%)

(₹ c

rore

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EBITDA EBITDA Margins (%)


Exhibit 6: Trend in profitability

3,1

60

3,3

77

3,6

97

3,3

85

3,6

33

2,3

57

3,2

31

32.5

6.9 9.5

(8.5)

7.3

(35.1)

37.1

(40)

(30)

(20)

(10)

-

10

20

30

40

50

0

500

1000

1500

2000

2500

3000

3500

4000


(%)

(₹ c

rore

)

PAT Growth


HMCL’s revenues are expected to register CAGR of

8.3 over FY20-22E despite flattish volume CAGR

largely due to increase in ASPs under BS-VI.

EBITDA margins expected to remain under pressure

amid limited operating leverage benefits in FY21E.

We factor in recovery towards 13% levels by FY22E

on the back of cost actions and volume support

We expect HMCL to clock flattish CAGR in

normalised PAT over FY20-22E -21E to | 3,231 crore




Exhibit 7: Dividend payout trend

60

72

85

95

87

90

60

80

50.2

45.5

50.3

51.3 51.3

49.5

50.8

49.4

42

43

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45

46

47

48

49

50

51

52

30

50

70

90

110

FY14 FY16 FY17 FY18 FY19 FY20 FY21E FY22E

%(₹)

DPS Dividend Payout

`


Exhibit 8: Cash as percentage of total assets

3,6

00

.5

5,1

50

.9

6,6

45

.6

4,5

33

.4

6,4

85

.5

7,2

44

.5

8,2

87

.4

39.5

48.6

53.6

33.6

43.8 45.4

47.1

20

25

30

35

40

45

50

55

60

0

1000

2000

3000

4000

5000

6000

7000

8000

9000


(%)

(₹ c

rore

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Cash & Cash Equivalents As % of total assets


Exhibit 9: Return ratios trend

35.8 33.4

31.4

26.3

22.7

15.4

19.1

44.0

39.1 38.1

32.0

21.2

15.3

20.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0


(%)

RoE RoCE


HMCL has consistently paid out ~50% of post tax

earnings as dividend

Cash and equivalents formed ~44% of total assets

in FY20

Return ratios have come off their highs in recent

years. However, they are expected to return to

~20% levels in FY22E




Exhibit 10: Valuation

S a les G rowth EP S G rowth P E EV /EBITDA RoNW RoC E

(₹ cr) (%) (₹ cr) (%) (x ) (x ) (%) (%)

F Y 18 32,230.5 13.2 185.1 9.5 15.1 9.3 31.4 38.1

F Y 19 33,650.5 4.4 169.5 -8.5 16.5 10.4 26.3 32.0

F Y 20 28,836.1 (14.3) 181.9 7.3 15.4 12.5 22.7 21.2

F Y 21E 28,215.0 -2.2 118.0 -35.1 23.7 15.1 15.4 15.3

F Y 22E 33,829.9 19.9 161.8 37.1 17.3 10.8 19.1 20.2


Exhibit 11: HMCL currently trading at 17.3x FY22E EPS of ~| 161.8/share

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(₹)

Price 24x 22x 20x 19x 17x 16x 14x

Source: Bloomberg, ICICI Direct Research

Exhibit 12: Shareholding pattern

(in %) Jun -19 S ep -19 Dec-19 Mar-20 Jun-20

P romoter 34.6 34.6 34.6 34.6 34.8

F II 35.2 36.5 35.3 34.3 32.7

D II 20.0 19.2 19.6 19.9 21.7

O thers 10.2 9.7 10.5 11.2 10.8





Financial Summary

Exhibit 13: Profit and loss statement | crore

(Ye a r-e nd Ma rch ) F Y19 F Y20 F Y21E F Y22E

Tota l op e ra ting Incom e 33,650.5 28,836.1 28,215.0 33,829.9

G rowth (% ) 4.4 -14.3 -2.2 19.9

R aw Materia l E xpenses 23,317.7 19,697.4 20,063.5 24,022.3

E mployee E xpenses 1,730.2 1,841.7 1,725.9 1,839.6

O ther expenses 3,672.5 3,339.0 3,200.5 3,563.9

Total O perating E xpenditure 28,720.5 24,878.1 24,989.9 29,425.7

EBITDA 4930.1 3958.0 3225.1 4404.1

G rowth (% ) -6.0 -19.7 -18.5 36.6

D epreciation 602.0 818.0 775.9 845.7

Interes t 8.6 22.0 24.8 26.0

O ther Income 691.3 778.3 724.4 787.3

P BT 5010.4 3896.3 3148.8 4319.7

Total Tax 1,625.9 940.4 791.7 1,088.6

P AT 3384.6 3633.3 2357.2 3231.1

G rowth (% ) -8.5 7.3 -35.1 37.1

Normalised P AT (₹) 3,384.6 3,202.6 2,357.2 3,231.1

EP S (₹) 169.5 181.9 118.0 161.8

Normalised E P S (₹) 169.5 160.4 118.0 161.8


Exhibit 14: Cash flow statement | crore


P ro fit a fte r Ta x 3,384.6 3,633.3 2,357.2 3,231.1

Add: D epreciation 602.0 818.0 775.9 845.7

(Inc)/dec in C urrent Assets -1,696.4 1,459.9 81.4 -650.9

Inc/(dec) in C L and P rovis ions -213.0 -182.6 -357.2 714.5

C F from op e ra ting a ctivitie s 2077.2 5728.5 2857.2 4140.5

(Inc)/dec in Inves tments 2,107.5 -1,846.7 -700.0 -990.0

(Inc)/dec in F ixed Assets -789.5 -2,115.9 -600.0 -1,200.0

O thers -1,103.7 543.5 -300.0 -300.0

C F from inve sting a ctivitie s 214.3 -3419.2 -1600.0 -2490.0

Inc/(dec) in loan funds 0.0 150.0 0.0 0.0

D ividend paid & dividend tax -2,084.9 -2,156.8 -1,198.2 -1,597.6

Inc/(dec) in S ec. premium & O thers -8.6 -22.0 -24.8 -26.0

C F from fina ncing a ctivitie s -2304.9 -2226.0 -1223.0 -1623.6

Net C ash flow -4.8 105.3 59.0 52.9

O pening C ash 141.3 136.5 241.9 300.9

C losing C a sh 136.5 241.9 300.9 353.8


Exhibit 15: Balance Sheet | crore


L ia b ilitie s

E quity C apita l 39.9 39.9 39.9 39.9

R eserve and S urplus 12,817.2 14,096.5 15,255.5 16,889.0

Tota l S ha re ho ld e rs fund s 12857.1 14136.4 15295.4 16928.9

Total D ebt 0.0 150.0 150.0 150.0

D eferred Tax L iability 536.5 392.8 392.8 392.8

O thers 117.2 122.4 122.4 122.4

Tota l L ia b ilitie s 13510.8 14801.6 15960.6 17594.1

Asse ts

G ross B lock 7,998.8 10,316.2 10,896.2 11,946.2

Less : Acc D epreciation 3,521.3 4,339.2 5,115.1 5,960.9

Ne t Block 4477.5 5977.0 5781.0 5985.3

C apita l WIP 360.7 160.3 180.3 330.3

Total F ixed Assets 4,838.2 6,137.2 5,961.3 6,315.5

Inves tments 5,968.6 8,222.7 9,222.7 10,512.7

Inventory 1,072.4 1,092.0 927.6 1,112.2

D ebtors 2,821.6 1,603.1 1,700.6 2,039.1

Loans and Advances 25.0 22.4 21.5 25.8

C a sh 136.5 241.9 300.9 353.8

Total C urrent Assets 4,948.6 3,594.1 3,571.7 4,275.5

C reditors 3,355.3 3,030.5 2,705.5 3,244.0

P rovis ions 59.0 146.6 130.8 156.9

Total C urrent L iabilities 4,130.4 3,947.7 3,590.5 4,305.0

Ne t C urre n t Asse ts 818.3 -353.7 -18.8 -29.5

Ap p lica tion o f F und s 13510.8 14801.6 15960.6 17594.1


Exhibit 16: Key ratios


P e r sha re d a ta (₹)

E P S 169.5 181.9 118.0 161.8

C ash E P S 199.6 222.9 156.9 204.1

B V 643.8 707.9 765.9 847.7

D P S 87.0 90.0 60.0 80.0

C ash P er S hare 227.0 324.8 362.8 415.0

O p e ra ting R a tios (%)

E B ITD A Margin 14.6 13.7 11.4 13.0

P B T / Net sales 12.9 10.9 8.7 10.5

P AT Margin 10.1 12.6 8.4 9.6

Inventory days 11.6 13.8 12.0 12.0

D ebtor days 30.6 20.3 22.0 22.0

C reditor days 36.4 38.4 35.0 35.0

R e tu rn R a tios (%)

R oE 26.3 22.7 15.4 19.1

R oC E 32.0 21.2 15.3 20.2

R oIC 59.9 39.9 29.7 40.5

V a lua tion R a tios (x )

P /E 16.5 17.5 23.7 17.3

E V / E B ITD A 10.4 12.5 15.1 10.8

Market C ap / S ales 1.7 1.9 2.0 1.7

P rice to B ook V alue 4.3 4.0 3.7 3.3

S o lve ncy R a tios

C urrent R atio 1.3 1.0 1.1 1.1

Q u ick R a tio 1.0 0.7 0.8 0.8





Exhibit 17: ICICI Direct coverage universe (Auto & Auto Ancillary)

S e cto r / C om p a ny C MP TP M C a p

(₹) (₹) R a ting (₹ C r) F Y20 F Y21E F Y22E F Y20 F Y21E F Y22E F Y20 F Y21E F Y22E F Y20 F Y21E F Y22E F Y20 F Y21E F Y22E

Apollo Tyre (AP O TY R ) 130 120 Hold 7,437 8.3 4.9 8.9 15.6 26.5 14.6 7.0 6.1 5.1 4.7 4.7 6.6 4.8 2.5 4.9

Ashok Leyland (AS HLE Y ) 62 65 Hold 18,148 0.8 0.3 2.5 76.0 244.7 25.2 17.2 21.6 11.1 4.4 2.3 9.2 4.7 1.0 9.3

B ajaj Auto (B AAUTO ) 2,985 3,210 Hold 86,377 176.2 136.9 173.5 16.9 21.8 17.2 13.6 16.4 12.0 23.8 23.3 26.6 25.6 17.9 20.2

B harat F orge (B H AF O R ) 495 415 Hold 23,046 7.5 3.5 13.7 66.0 142.0 36.2 23.0 31.2 17.3 5.8 2.2 7.9 7.8 3.0 11.1

E icher Motors (E IC MO T) 20,130 22,570 Hold 54,874 670.4 465.7 712.6 30.0 43.2 28.2 22.2 27.7 18.9 17.2 11.4 15.3 18.3 11.6 15.4

E scorts (E S C O R T) 1,100 1,300 B uy 13,484 39.6 46.1 54.5 27.8 23.9 20.2 18.5 15.6 13.1 18.9 15.0 15.2 14.2 11.2 11.8

E xide Indus tries (E XIIND ) 163 180 B uy 13,855 9.7 6.3 8.9 11.8 18.0 12.9 10.0 12.4 9.6 15.7 10.3 13.5 13.4 8.2 10.7

He ro Moto (HER HO N) 2,800 3,235 Buy 55,916 181.9 118.0 161.8 15.4 23.7 17.3 12.5 15.1 10.8 21.2 15.3 20.2 22.7 15.4 19.1

M&M (MAHMAH) 615 700 B uy 76,457 10.7 27.9 38.2 57.5 22.1 16.1 12.6 13.0 9.8 12.9 10.8 13.8 6.4 9.2 11.6

Maruti S uz uk i (MAR UTI) 6,590 5,300 R educe 1,99,071 187.1 124.9 203.4 35.2 52.7 32.4 22.5 30.8 18.9 7.4 3.5 8.2 11.7 7.4 11.1

Minda Industries (MININD ) 285 320 B uy 7,473 5.9 2.8 9.6 48.2 100.9 29.6 13.4 15.2 10.3 10.6 6.6 12.7 10.3 5.1 13.6

Tata Motors (TATMO T) 125 115 Hold 45,688 -32.8 -24.6 7.4 NM NM 16.8 4.9 5.1 3.4 1.4 1.1 6.8 -18.7 -16.5 4.8

R oE (%)EP S (₹) P /E (x ) EV /EBITDA (x) R oC E (%)

Source: Bloomberg, ICICI Direct Research




RATING RATIONALE

ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its

stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,

Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined

as the analysts' valuation for a stock

Buy: >15%

Hold: -5% to 15%;

Reduce: -15% to -5%;

Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]




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