Sagar Cement Ltd

Target: Rs.826 CMP Rs.630 (6.7x FY23 EV/EBITDA) BUY

Index Details Sagar Cement Ltd (SCL) has presence across all key states of Southern
Sensex 46,444 India. It services the incumbent markets through its 3 facilities –
Nifty 13,601 Bayyavaram (Telangana, capacity of 1.5 MTPA), Mattampally (North
Andhra Pradesh, capacity of 3.0 MTPA) and Gudipadu (South Andhra
Pradesh, capacity of 1.25 MTPA). SCL is expanding its footprint in the
Industry Cement
states of Madhya Pradesh and Odisha by setting up manufacturing
facilities in Indore (capacity 1.0 MTPA) and Jajpur (capacity 1.5 MTPA)
Scrip Details respectively.
Mkt Cap (Rs Cr) 1,480
O/S Share (Cr) 2.35 SCL’s existing plants are in proximity to their key markets (range of 300
3 M Avg Vol (000) 15.0 km), raw material sources and ports. And the upcoming expansion in
Jajpur and Indore will provide access to western, central and eastern parts
52 Wk H/L (Rs) 829/236
of India. Jajpur unit will have access to raw materials from Mattampally and
Div Yield (%) 0.38 Bayyavaram plants, while Indore unit has limestone captive mines (expiry
FVPS (Rs) 10.0 in the year 2070).

STOCK POINTER
Shareholding Pattern With the cement prices in southern India having skyrocketed to Rs.350+
%
per bag, SCL managed to arrest revenue decline at 3.2% YoY to Rs.590 cr
Shareholder
despite a double-digit volume decline of 16.7% YoY to 1.3 mn MT in
Promoters 50.16
H1FY21. The strong realization and lower input cost helped improve
Institutional 15.09
profitability. EBITDA grew at 58.5% YoY to Rs.192 (EBITDA per MT Rs.1,504
Public 34.75 in H1FY21, +Rs.713 over H1FY20). Inline with this trend, net profit also grew
Total 100.00 to Rs.86 cr (YoY growth of 150.3% in H1FY21)

SCL vs. Sensex Historically, the cement prices have rarely stayed above Rs.300/bag in the
1,200 50,000
region. Further, the market is well supplied (capacity utilization of 70%) and
1,000
hence any incremental demand can be met without pressurising prices.
40,000
800 Given these dynamics, it is our view that the cement prices should cool off
30,000
600 as the COVID disruptions normalize. In our forecast, we have assumed that
20,000 the cement prices in southern India to degrow at a CAGR of 6.4% to
400

200 10,000 Rs.190/bag by FY23 from the current average price Rs.358/bag.
0 0
Apr-17 Apr-18 Apr-19 Apr-20
Going forward we expect revenues to grow at a CAGR of 23.6% to Rs.2,220
SCL SENSEX
cr aided by the volume CAGR of 23.4% to 5.9 MT by FY23 (contributions
from the new facilities at Indore – FY22 0.1 MT, FY23 0.4 MT and Jajpur –
Key Financials (in ₹ crores) FY22 0.2 MT, FY23 0.9 MT) amidst pressure on realizations.

EBITDA Net Profit EPS BV RoE RoCE P/E P/BV EV/EBITDA

Sales EBITDA Net Profit
(%) (%) ₹ ₹ (%) (%) (x) (x) (x)
FY19 1,218 149 14 12.3 1.1 5.8 359.1 1.6 6.2 108.9 1.8 13.1
FY20 1,175 186 27 15.8 2.3 11.3 434.3 2.6 7.1 55.8 1.5 10.5
FY21E 1,190 322 100 27.1 8.4 42.6 545.1 7.5 10.8 14.8 1.1 6.5
FY22E 1,850 351 96 19.0 5.2 40.9 581.5 6.8 9.7 15.4 1.0 6.7
FY23E- 1 - 2,220 345 92 15.5 4.2 39.3 616.3 6.1 9.3 Wednesday
16.0 1.0
23 6.7
rd Dec, 2020

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
 We expect a record EBITDA and net earnings of Rs.322 cr (73.6% YoY
growth) and Rs.100 cr (277.1% YoY growth) respectively for FY21.
However, the profitability is expected to dip post FY21 given the predicted
pricing pressure and surge in input cost of petcoke and diesel.
Accordingly, we expect EBITDA and net earnings to grow at a CAGR of
3.6% and -3.4% to Rs.346 cr and Rs.93 cr respectively during FY21-23E.
EBITDA/tn is also expected to retract to Rs.587 by FY23.

SCL has MAT credit balance of Rs.47 cr, which cannot be used to set off
future tax payments if the company opt for the new tax regime. Therefore,
the effective tax rate would continue at 35% in the coming years.

Despite our conservative outlook on revenue and profitability, we believe

that the stock is grossly undervalued. In addition, geographic
diversification in high growth states of Madhya Pradesh and Odisha are
expected to provide new growth opportunities and improve cash flows in
the coming years. This in our opinion is valuation positive.

We initiate coverage on SCL with a BUY for a price target of Rs.826 (8.0X
EV/EBITDA FY23) representing a potential appreciation of 31% over the
next 24 months from the CMP of Rs.630.

-2- Wednesday 23rd Dec, 2020

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 EV/EBITDA 1 year forward band chart

3,050

2,550

2,050

1,550

1,050

550

50
Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20
Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Oct-15
Jan-16

Oct-16
Jan-17

Oct-17
Jan-18

Oct-18
Jan-19

Oct-19
Jan-20

Oct-20
EV per sh 4.44x 9.04x 13.64x 18.24x 22.84x
Source: BSE & Ventura Research

Sustained double digit RoIC in growth phase

Source: Bloomberg & Ventura Research

-3- Wednesday 23rd Dec, 2020

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 FY22 EV per tonne of selected industry players

300
266
USD per Tonne
250 231
209
200

144
150 131
123
Replacement Cost 111 111
100
70 74
54
50 32

0
Deccan Orient JK Lakshmi Sagar Heidelberg Sanghi Prism Star Dalmia Ambuja JK Cement Ramco
Cements Cement Cements cement Industries Johnson Cement Bharat Cements Cements

Source: Bloomberg & Ventura Research

Sagar Cement - FY23 EBITDA per tonne vs Sales Volume sensitivity analysis
FY23 EBITDA per MT (Rs)
PAT >> 92 500 550 600 650 700 750 800 850 900 950 1,000 1,050 1,100 1,150 1,200
5.0 30.6 46.9 63.1 79.4 95.6 111.9 128.1 144.4 160.6 176.9 193.1 209.4 225.6 241.9 258.1
5.5 46.9 64.8 82.6 100.5 118.4 136.3 154.1 172.0 189.9 207.8 225.6 243.5 261.4 279.3 297.1
6.0 63.1 82.6 102.1 121.6 141.1 160.6 180.1 199.6 219.1 238.6 258.1 277.6 297.1 316.6 336.1
FY23 6.5 79.4 100.5 121.6 142.8 163.9 185.0 206.1 227.3 248.4 269.5 290.6 311.8 332.9 354.0 375.1
Sales 7.0 95.6 118.4 141.1 163.9 186.6 209.4 232.1 254.9 277.6 300.4 323.1 345.9 368.6 391.4 414.1
Volume 7.5 111.9 136.3 160.6 185.0 209.4 233.8 258.1 282.5 306.9 331.3 355.6 380.0 404.4 428.8 453.1
(Mn MT) 8.0 128.1 154.1 180.1 206.1 232.1 258.1 284.1 310.1 336.1 362.1 388.1 414.1 440.1 466.1 492.1
8.5 144.4 172.0 199.6 227.3 254.9 282.5 310.1 337.8 365.4 393.0 420.6 448.3 475.9 503.5 531.1
9.0 160.6 189.9 219.1 248.4 277.6 306.9 336.1 365.4 394.6 423.9 453.1 482.4 511.6 540.9 570.1
9.5 176.9 207.8 238.6 269.5 300.4 331.3 362.1 393.0 423.9 454.8 485.6 516.5 547.4 578.3 609.1

Our base case net profit range in Rs Crore

Source: Bloomberg & Ventura Research

-4- Wednesday 23rd Dec, 2020

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 Sagar Cement story in charts

6,000 Rs Mn Tonnes 10
8
4,000
6
4
2,000
2
0 0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Realization/tonne (Rs), LHS Sales Volume (Mn Tonnes), RHS Capacity (Mn Tonnes), RHS

3,000
Rs Cr %age 90

60
2,000
30
1,000
0

0 -30
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Revenue (Rs Cr), LHS Price Growth (%), RHS Sales Volume Growth (%), RHS

450 %age 90
Rs Cr
300 60

150 30

0 0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
-150 -30
EBITDA (Rs Cr), LHS Net Profit (Rs Cr), LHS RoE (%), RHS RoCE (%), RHS RoIC (%), RHS
600 60
Rs Cr No of days
400
45
200
0 30
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
-200
15
-400
-600 CFO (Rs Cr), LHS FCFF (Rs Cr), LHS Net Working Capital Days (nos), RHS 0

5
4
3
2
1
0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Net Debt to Equity (X) Net Debt to EBITDA (X) Debt Service Coverage Ratio
Source: Company Reports & Ventura Research

-5- Wednesday 23rd Dec, 2020

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 Cement demand in Southern India

90 350
Mn Tonnes Kilogram
80
300
70
250
60
50 200

40 150
30
100
20
50
10
0 0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 (till
Nov)

Cement Demand in Southern India (Mn Tonnes) Per Capita Cement Consumption (Kg)

Source: Company Reports & Ventura Research

Cement prices per bag

450
Rs per bag
400

350

300

250

200

150
Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20
Apr-16
Apr-11

Apr-12

Jan-13
Apr-13

Apr-14

Apr-15

Apr-17

Apr-18

Jan-19
Apr-19

Apr-20
Jan-12

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-20
Oct-11

Oct-12

Oct-13

Oct-14

Oct-15

Oct-16

Oct-17

Oct-18

Oct-19

Oct-20

Hyderabad Bengaluru Chennai Mumbai

Source: Company Reports & Ventura Research

-6- Wednesday 23rd Dec, 2020

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 Cement unit locations in South India

SCL’s existing plants and upcoming units in Madhya Pradesh and Odisha

Source: Company Reports & Ventura Research

-7- Wednesday 23rd Dec, 2020

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 Economic recovery portends rebound in energy prices

South African coal price (USD/metric tonne)

140
120
100
80
60
40
Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-20

Domestic Diesel Price (Rs/Ltr)

90

70

50

30
Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-20

Petcoke Price (USD/metric tonne)

190

140

90

40
Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19 Nov-20

Source: Bloomberg & Indexmundi

Key risk and concern areas

• While we have assumed an extremely conservative pricing environment,

any deterioration in demand growth can have a negative impact on our
valuations.
• In the case of runaway inflation, cost pressure can significantly impact
profitability
• Slower than expected utilization of new plants at Madhya Pradesh and
Orissa would impact asset sweating which could further reduce the
profitability

-8- Wednesday 23rd Dec, 2020

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 Quarterly Financial Performance
Figures in Rs Cr FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21E FY22E FY23E
Capacity (Mn Tonnes) 5.2 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 5.8 7.0 8.3
Sales Volume (Mn Tonnes) 3.3 0.8 0.7 0.8 0.8 3.1 0.6 0.7 0.8 0.8 2.8 4.6 5.9
-Volume from existing plants 3.3 0.8 0.7 0.8 0.8 3.1 0.6 0.7 0.8 0.8 2.8 4.3 4.6
-Volume from MP plant 0.1 0.4
-Volume from Orissa plant 0.2 0.9
Capacity Utilization (%) 64.5 57.0 49.4 53.1 58.4 54.5 38.6 50.1 52.2 52.2 48.3 66.2 71.4
Net Sales 1,212.2 343.9 264.9 262.1 302.7 1,173.6 264.1 325.1 300.0 300.0 1,189.2 1,849.5 2,220.2
YoY Growth (%) 17.4 25.5 3.7 -17.3 -17.2 -3.2 -23.2 22.7 14.5 -0.9 1.3 55.5 20.0
Average Sales per MT (Rs) 3,651.2 4,193.7 3,731.4 3,430.6 3,603.9 3,744.9 4,758.9 4,515.4 4,000.0 4,000.0 4,285.5 3,990.3 3,769.4
Other Operating Revenue 5.3 0.3 0.3 0.0 0.8 1.5 0.0 0.8 0.0 0.0 0.8 0.0 0.0
Total Revenue 1,217.6 344.2 265.3 262.1 303.6 1,175.2 264.1 325.9 300.0 300.0 1,190.0 1,849.5 2,220.2
YoY Growth (%) 17.3 25.2 2.9 -17.9 -17.0 -3.5 -23.3 22.8 14.5 -1.2 1.3 55.4 20.0

Raw Material Cost 238.8 60.7 36.8 70.3 59.5 227.3 49.6 47.2 52.5 56.3 205.5 359.2 456.5
RM Cost per MT (Rs) 719.3 740.4 518.0 919.6 708.7 725.2 893.0 655.7 700.0 750.0 740.6 775.0 775.0
Power & Fuel Cost 362.8 87.0 83.2 62.7 76.3 309.2 44.6 61.0 68.9 69.6 244.0 441.2 562.7
Power Cost per MT (Rs) 1,092.7 1,060.5 1,172.0 821.1 908.1 986.5 802.7 846.7 918.3 927.9 879.2 952.0 955.3
Freight & Forwarding Cost 252.5 60.1 49.5 54.5 59.7 223.8 39.1 55.5 56.8 57.4 208.8 375.7 501.3
Freight Cost per MT (Rs) 760.4 732.4 696.8 713.7 710.6 713.9 704.9 771.4 757.2 764.7 752.4 810.6 851.1
Employee Cost 58.8 14.7 15.2 16.0 18.9 64.9 14.5 20.9 16.3 16.3 68.1 76.7 83.9
Other Expenses 155.4 43.1 38.2 38.7 44.5 164.6 29.3 36.5 38.3 37.5 141.6 245.7 270.9

EBITDA 149.4 78.6 42.4 19.9 44.7 185.5 87.0 104.8 67.3 63.0 322.0 351.0 344.9
EBITDA per MT (Rs) 450.0 958.8 596.8 259.9 531.5 591.9 1,567.7 1,455.1 896.9 839.7 1,160.4 757.3 585.6
EBITDA Margin (%) 12.3 22.8 16.0 7.6 14.7 15.8 32.9 32.1 22.4 21.0 27.1 19.0 15.5

Net Profit 13.6 29.5 4.9 -9.1 1.2 26.5 36.0 50.2 8.3 5.5 100.0 96.2 92.3
Net Margin (%) 1.1 8.6 1.9 -3.5 0.4 2.3 13.6 15.4 2.8 1.8 8.4 5.2 4.2
Adjusted EPS (Rs) 5.8 12.6 2.1 -3.9 0.5 11.3 15.3 21.3 3.5 2.4 42.6 40.9 39.3

Net Debt Equity (X) 0.6 0.5 0.5 0.4 0.5 0.6 0.6
Net Debt EBITDA (X) 3.2 2.2 2.6 1.7 1.9 2.5 2.4
RoE (%) 1.6 5.2 2.7 7.0 7.8 7.0 6.4
RoCE (%) 6.2 9.7 7.3 10.6 11.1 9.9 9.5
RoIC (%) 6.3 9.8 7.4 11.2 11.4 10.0 9.6

Enterprise Value (EV) 1,813.5 1,822.1 1,156.2 1,657.6 2,092.2 2,355.8 2,297.5
EV per Metric Tonne (Rs) 5,462.3 5,375.0 3,689.3 5,757.5 7,539.4 5,082.6 3,900.6
EV per Metric Tonne (USD) 78.2 76.4 51.9 77.9 101.1 67.8 52.0
EV/EBITDA (X) 12.1 8.6 6.2 6.5 6.5 6.7 6.7
Source: Company Reports & Ventura Research

-9- Wednesday 23rd Dec, 2020

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 Financials & Projections
Figures in Rs Cr FY19 FY20 FY21E FY22E FY23E Figures in Rs Cr FY19 FY20 FY21E FY22E FY23E
Income Statement Per Share Data & Yields
Sales Volume (Mn Tonnes) 3.3 3.1 2.8 4.6 5.9 Adjusted EPS (Rs) 5.8 11.3 42.6 40.9 39.3
Average Sales per MT (Rs) 3,651.2 3,744.9 4,285.5 3,990.3 3,769.4 Adjusted Cash EPS (Rs) 33.7 44.9 88.1 95.2 93.7
Revenue from operations 1,212.2 1,173.6 1,189.2 1,849.5 2,220.2 Adjusted BVPS (Rs) 359.1 434.3 567.9 604.4 639.1
Other Operating Revenue 5.3 1.5 0.8 0.0 0.0 CFO per share (Rs) 51.6 93.9 103.8 119.7 127.5
Total Revenue 1,217.6 1,175.2 1,190.0 1,849.5 2,220.2 CFO Yield (%) 8.2 14.9 16.5 19.0 20.2
YoY Growth (%) 17.3 -3.5 1.3 55.4 20.0 FCF per share (Rs) -35.1 -24.5 -193.3 -88.2 48.9
Raw Material Cost 238.8 227.3 205.5 359.2 456.5 FCF Yield (%) -5.6 -3.9 -30.7 -14.0 7.8
YoY Growth (%) 64.6 -4.8 -9.6 74.8 27.1
Power & Fuel Cost 362.8 309.2 244.0 441.2 562.7 Solvency Ratio (X)
YoY Growth (%) 9.4 -14.8 -21.1 80.9 27.5 Total Debt to Equity 0.6 0.5 0.5 0.6 0.6
Gross Profit 616.0 638.7 740.5 1,049.0 1,201.0 Net Debt to Equity 0.6 0.5 0.5 0.6 0.5
Margin (%) 50.6 54.3 62.2 56.7 54.1 Net Debt to EBITDA 3.2 2.6 1.9 2.5 2.4
Freight Expenses 252.5 223.8 208.8 375.7 501.3 Interest Coverage Ratio 1.3 1.7 3.2 2.8 2.8
YoY Growth (%) 15.8 -11.4 -6.7 79.9 33.4 Debt Service Coverage Ratio 0.3 0.4 0.5 0.4 0.4
Employee Cost 58.8 64.9 68.1 76.7 83.9
YoY Growth (%) 14.5 10.4 5.0 12.6 9.4 Working Capital Ratios
Other Expenses 155.4 164.6 141.6 245.7 270.9 Payable Days 61 69 60 60 60
YoY Growth (%) 10.2 5.9 -14.0 73.5 10.3 Receivable Days 35 43 45 44 43
EBITDA 149.4 185.5 322.0 351.0 344.9 Inventory Days 44 36 40 38 36
EBITDA per Tonne 450.0 591.9 1,160.4 757.3 585.6 Gross Working Capital Days 78 79 85 82 79
Margin (%) 12.3 15.8 27.1 19.0 15.5 Net Working Capital Days 17 9 25 22 19
Depreciation 65.7 78.9 107.1 127.4 127.9
Dep to Gross Block (%) 3.8 4.2 4.4 4.4 4.2 Return Ratios (%)
EBIT 83.7 106.6 214.9 223.6 217.0 Return on Equity 1.6 2.6 7.5 6.8 6.1
Margin (%) 6.9 9.1 18.1 12.1 9.8 Return on Capital Employed 6.2 7.1 10.8 9.7 9.3
Other Income 2.9 4.0 4.1 3.7 2.2 Return on Invested Capital 6.3 7.1 11.0 9.7 9.4
Finance Cost 63.4 61.0 66.5 79.2 77.1
PBT 23.2 49.7 152.5 148.0 142.0 Valuation (X)
Margin (%) 1.9 4.2 12.8 8.0 6.4 P/E 108.9 55.8 14.8 15.4 16.0
Reported Tax 9.6 23.1 52.5 51.8 49.7 P/BV 1.8 1.5 1.1 1.0 1.0
Tax Rate 41.4 46.6 34.4 35.0 35.0 EV/EBITDA 13.1 10.5 6.5 6.7 6.7
PAT 13.6 26.5 100.0 96.2 92.3 EV/Sales 1.6 1.7 1.8 1.3 1.0
Margin (%) 1.1 2.3 8.4 5.2 4.2 EV/Tonne (Rs) 5,902.2 6,238.9 7,539.4 5,082.6 3,900.6

Balance Sheet Cash Flow Statement

Share Capital 20.4 22.3 23.5 23.5 23.5 Profit Before Tax 23.2 49.7 152.5 148.0 142.0
Total Reserves 823.4 998.3 1,311.1 1,396.7 1,478.5 Adjustments 113.7 166.9 195.8 215.1 211.3
Shareholders' Fund 843.8 1,020.6 1,334.6 1,420.2 1,502.0 Change in Working Capital -6.1 27.2 -51.9 -30.0 -4.1
Long Term Borrowings 305.8 289.8 552.9 802.7 652.6 Less: Tax Paid -9.6 -23.1 -52.5 -51.8 -49.7
Other Non Curr Liabilities 56.9 72.5 82.9 77.4 73.5 Cash Flow from Operations 121.3 220.7 243.9 281.3 299.6
Long Term Provisions 7.3 9.7 10.2 11.5 12.5 Net Capital Expenditure -195.1 -227.2 -650.0 -450.0 -150.0
Deferred Tax Liability 41.1 43.9 55.1 55.1 55.1 Change in Investments 25.1 -24.7 121.2 -5.1 -3.6
Total Liabilities 1,255.0 1,436.5 2,035.7 2,366.9 2,295.7 Cash Flow from Investing -170.1 -251.9 -528.8 -455.1 -153.6
Gross Block 1,711.5 1,876.9 2,418.9 2,868.9 3,018.9 Proceeds from Equity 56.6 102.7 225.0 0.0 0.0
Less: Accumulated Dep 423.1 497.5 604.6 732.0 860.0 Change in Borrowings 30.7 -21.0 162.0 240.0 -60.0
Net Block 1,288.4 1,379.4 1,814.3 2,136.9 2,158.9 Less: Finance Cost -63.4 -61.0 -66.5 -79.2 -77.1
Goodwill & Intang Assets 65.8 100.8 99.9 99.9 99.9 Dividends Paid (incl tax) -3.7 -6.2 -10.6 -10.6 -10.6
Other Non Curr Assets 35.3 108.4 123.2 115.3 109.8 Cash Flow from Financing 20.2 14.5 309.9 150.2 -147.7
Deferred Tax Assets 32.8 21.2 15.0 15.0 15.0 Net Cash Flow -28.6 -16.8 25.1 -23.6 -1.7
Net Current Assets -167.4 -173.3 -16.8 -0.2 -87.9 Opening Balance of Cash 58.1 29.5 12.8 37.8 14.2
Total Assets 1,255.0 1,436.5 2,035.7 2,366.9 2,295.7 Closing Balance of Cash 29.5 12.8 37.8 14.2 12.5
Source: Company Reports & Ventura Research

- 10 - Wednesday 23rd Dec, 2020

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Disclosures and Disclaimer

Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member
of BSE, NSE and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in
last five years except administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records.
Ventura Commodities Limited, Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of
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offer to buy, purchase or subscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in
connection with any contract or commitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general
information of the clients / prospective clients of VSL. VSL will not treat recipients as clients by virtue of their receiving this report. It does not constitute a
personal recommendation or take into account the particular investment objectives, financial situations, or needs of clients / prospective clients. Similarly, this
document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who
may receive this document. The securities discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or
strategy will depend on an investor's individual circumstances and objectives. Persons who may receive this document should consider and independently
evaluate whether it is suitable for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. And such person shall be
responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating the merits
and risks involved in the securities forming the subject matter of this document. The projections and forecasts described in this report were based upon a
number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily
speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will
vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared
solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with
published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other form of assurance on
these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by VSL,
its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these
reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including
the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from
them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns
are not guaranteed and a loss of original capital may occur. 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. We do not provide tax advice to our clients, and all investors are strongly advised to consult
regarding any potential investment. VSL, the RA involved in the preparation of this research report and its associates accept no liabilities for any loss or
damage of any kind arising out of the use of this report. This report/document has been prepared by VSL, based upon information available to the public and
sources, believed to be reliable. No representation or warranty, express or implied is made that it is accurate or complete. VSL has reviewed the report and,
in so far as it includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions
expressed in this document/material are subject to change without notice and have no obligation to tell you when opinions or information in this report change.
This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media
and should not be reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may
not be distributed to the public used by the public media without the express written consent of VSL. This report or any portion hereof may not be printed, sold
or distributed without the written consent of VSL. This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities
and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. This document is strictly confidential
and is being furnished to you solely for your information, may not be distributed to the press or other media and may not be reproduced or redistributed to any
other person. The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of VSL and
are given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and
there can be no assurance that future results or events will be consistent with any such opinions, estimate or projection. This document has not been prepared
by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person. Information in
this document must not be relied upon as having been authorized or approved by the company or its directors or any other person. Any opinions and projections
contained herein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever for any loss arising
from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein is not intended for publication or
distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited
unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as
prescribed by Securities and Exchange Board of India before investing in Securities Market.
Ventura Securities Limited - SEBI Registration No.: INH000001634
Corporate Office: I-Think Techno Campus, 8th Floor, ‘B’ Wing, Off Pokhran Road No 2, Eastern Express Highway, Thane (W) – 400608

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This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.