Jan 25, 2018

BUDGET 2018-19
E X P E C TAT I O N S

Analyst Contact
J K Jain
040 - 3321 6300
jambu@karvy.com

For private circulation only. For important information about Karvy’s rating system and other disclosures
refer to the end of this material. Karvy Stock Broking Research is also available on Bloomberg,
KRVY<GO>, Thomson Publishers & Reuters
Union Budget 2018-19:

Pre-Budget Expectations
India Research - Stock Broking

BUDGET FOR SUPPORTING NASCENT RECOVERY

This budget comes at a time when the economy needs a booster shot to support a nascent
recovery in the economy. The challenge before the Union Finance Minister is to deliver a
budget which will support a recovery while preserving the hard fought fiscal discipline.

Exhibit 1: Quarterly GDP Rate (%) YoY Exhibit 2: Auto & CV Sales Volume Growth (%)
9% 70%

8% 50%
30%
7%
10%
6% -10%
5% -30%
May-13

May-14

May-15

May-16

May-17
Sep-13

Sep-14

Sep-15

Sep-16

Sep-17
Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

4%
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18

Tota Auto Sales (Domestic)

Total CV sales (Domestic)
Source: Bloomberg, Karvy Research Source: OECD (Organization for Economic Co-operation and Development),
Major Five Asia includes China, Japan, India, South Korea and Indonesia,
Karvy Research

As the economy grew at a rate of 6.3% YoY in Q2FY17-18, up from a rate of 5.7% YoY in
Q1FY17-18, we see some green shoots in the economy. The OECD leading indicator for India
has started to move up, indicating better growth ahead. IMF in its latest update forecasts a
growth rate of 7.4% and 7.8% for fiscal year 2018-19 and 2019-20 respectively.
 ECONOMY & STRATEGY

Similarly, certain high frequency data also point to a nascent recovery. Auto sales grew by
15.6% over the last quarter (Oct-Dec 2017) and Commercial Vehicle (CV) sales grew by
33.5%.
Exhibit 3: OECD Leading Indicators
101

100

99

98
Oct-2013

Oct-2014

Oct-2015

Oct-2016

Oct-2017
Jan-2013

Jan-2014

Jan-2015

Jan-2016

Jan-2017
Jul-2013

Jul-2014

Jul-2015

Jul-2016

Jul-2017
Apr-2013

Apr-2014

Apr-2015

Apr-2016

Apr-2017
Major Five Asia India OECD - Total

Source: OECD, Karvy Research

Budget to support growth

Constrained by fiscal targets:
The government had set out a target to achieve a fiscal deficit of 3.2% of GDP. After the launch
of GST, the first few months witnessed robust collections which have declined thereafter. In
July 2017, GST collections were Rs. 940 Bn, for the month of November 2017 GST collections
were Rs. 808 Bn. An additional pressure on the fiscal math is arising on account of rise in crude
prices, as there will be pressure on the government to reduce excise to protect consumers.
Government’s announcement in December 2017 to borrow an additional Rs. 500 Bn led
to fears of a significant fiscal slippage. The additional borrowing has now been lowered to
Rs. 200 Bn. According to the fiscal roadmap, the government aims to achieve a fiscal target of
3.0% of GDP by FY18-19. We believe that the government is committed to fiscal consolidation
and any slippage will be minor.
In order to raise revenues, the government may look at divestment over the coming year. The
government’s effort to privatize Air India could be a major signal of its intent of divestment as
well as a source of revenue. As a note of caution, actual revenues have lagged the target.

Exhibit 4: Disinvestment
Year Target (Rs. Bn) Actual (Rs. Bn) Variation (%)
2010-11   400 221 (44.6%)
2011-12   400 139 (65.3%)
2012-13   300 240 (20.1%)
2013-14   400 158 (60.5%)
2014-15   434 243 (43.9%)
2015-16   695 240 (65.5%)
2016-17   565 462 (18.1%)
2017-18   725 556 Till 22-01-2018
Source: Govt. of India, Karvy Research

4
 ECONOMY & STRATEGY

Budget to support growth:

Elections are due in eight states, of which four are in the second half of the year. This creates
an incentive for the government to increase expenditure. In our view there are three areas to
watch out for:

Infrastructure:
The government last year allocated a record Rs. 3.96 Tn for infrastructure with Rs. 2.41 Tn
earmarked for the transport sector, which included an allocation of Rs. 1.3 Tn for Railways.
The recently announced Bharatmala (http://pibphoto.nic.in/documents/rlink/2017/oct/
p2017102504.pdf) has an estimated expenditure of Rs. 5.35 Tn in phase-1 until FY21-22.
We expect that there will be significant increase in allocation to road projects. Road projects
over the next year are likely to focus more on rural connectivity in order to support the rural
economy.
Over the past years, spending has lagged actual due to various reasons like delay in land
acquisition, environmental clearance, etc.

Rural Sector:
We believe that structural reforms are needed in the agricultural sector, much of which are
outside the purview of the budget, and many lie in the jurisdiction of state governments.
The latest monsoon season was 5.2% below the long term average, which is considered to
be within normal limits. CMIE estimates that growth in agriculture is likely to be 2.1% in the
current fiscal year.
However, the government will certainly take steps to alleviate rural stress. We expect the
following:
yyImplementation of the Direct Benefit Transfer scheme on fertilizer subsidies will ease
burden on farmers where the government bears ~Rs. 70,000 Cr annually to provide
cheaper nutrients for crops.
yyAllocation of farm credit may be higher than that of the previous budget FY17-18 of
Rs. 10 Lakh Crore based on past patterns.
yyTo reduce farm distress, there may be higher allocation for crop insurance and interest
subvention for farm loans.
yyMore importantly, increase in allocation to rural road development scheme known as
Pradhan Mantri Gram Sadak Yojana (PMGSY); Rs. 270 bn was allocated to the scheme in
FY17-18.

Banking Recapitalisation:
Though outside the purview of the budget, progress will have a significant impact, It had
announced a two year Rs. 2.11 Tn recapitalisation plan in October 2017. Of the total sum,

5
 ECONOMY & STRATEGY

Rs. 1.35 Tn is planned to be raised through recapitalisation bonds, the rest from budgetary
support of Rs. 180 Bn and fund-raising of Rs. 580 Bn from the markets by the banks.
On January 24, the government announced more details. The plan entails a total government
infusion of Rs. 881 Bn, of which Rs. 800 Bn will be finance via recapitalisation bonds and
Rs. 81 Bn via government budgetary support. The government will thus need to plan for a
budgetary support of Rs. 100 Bn in FY18-19.
The move to strengthen banks is a key step in the efforts to kick-start growth; higher growth in
the economy will be helpful towards the fiscal arithmetic in the coming years.

Direct Taxes:
The government formed a committee in November
2017 to suggest a comprehensive overhaul of the
direct tax code. It is expected to submit its report
within six months. It is difficult to say whether the
enabling legislation will be tabled before parliament
before the next general elections. Because of this,
no major changes should be expected in direct
taxes in the current budget.
However, we do not rule out minor changes to taxes in the budget. Possible changes could be:
yyIn February 2015, the Finance Minister had proposed a reduction in corporate tax rate from
30% to 25% over a period of four years, along with a roll back of exemptions.
yySince then, Income tax rate for smaller companies whose annual turnover does not exceed
Rs. 50 Cr has been reduced to 25%. However, there has been no reduction for large
companies. The Finance Minister may make a marginal cut for larger firms.
yyThe issue of reinstatement of long term capital gains tax rate for equity markets has been
discussed by the press. The alternative discussed is changing the holding period definition
of long term from the current one year to either two or three years.
yyAs such this move is discounted, though short term volatility is likely, we believe that the
Finance Minister would wait for the recommendations of the committee before making
such a major move.
yyThere may be a few minor changes to personal income tax rates though.

yyThe personal income tax exemption limit may be raised from the current Rs. 2.5 lakh to
Rs. 3.0 lakh.
yyIncrease in the Maximum Threshold of Deduction under section 80C.

yyItis expected that DDT rate will be reduced to 10.0% from the current effective rate of
~20.0%.
yyIncentives for families to obtain medical insurance by changes in section 80D.

6
 ECONOMY & STRATEGY

Indirect taxes: Exhibit 5: GST Collections

With implementation of GST, the scope of the Union Month GST collections (Rs. Bn)
Jul-17 941
Budget has reduced, since decisions are now made
Aug-17 907
in the GST council, where states have a significant Sep-17 922
voice. However, the Finance Minister will lay out his Oct-17 833
Nov-17 808
expectations for GST collections over the year and
Source: Press Release, Karvy Research

assumptions behind them.

There has been a dip in GST collections, and we should watch out for comments from the
finance minister regarding his strategy to enhance collections.

Since the government is keen to bring retail fuel (Petroleum, Diesel) under GST, no major
changes should be expected. There may be changes in custom duties, covered in detail
under sector pages.

7
 ECONOMY & STRATEGY

Expectations
 Policies to promote Electric Vehicles (EV) may include reducing GST rates for Hybrid and
Electric Vehicles coupled with budget allocation towards infrastructure development to
facilitate battery charging.
Impact
Auto and Auto Ancillary

 Reduction in the GST rate for EVs (12%) and Hybrid Vehicles (43%) will drive consumer
acceptance towards EV technology. Improving battery charging facilities may provide the
necessary impetus to promote electric vehicle sales which leaves a substantial scope for
investment in setting-up charging stations in cities and national highways.
Key Beneficiaries
 Mahindra & Mahindra (MM IN): Their growing presence in the EV segment (e2o plus,
eVerito) will help capture the market share faster especially in the PV segment.
 Ashok Leyland (AL IN) & JBM Auto (JBMA IN): For manufacturing electric commercial
vehicles.
 TATA Motors (TTMT IN): TATA Motor’s recent electric vehicle orders from the government
to be an added advantage.

Expectation
 We expect higher allocations towards the recapitalization of public sector banks to
strengthen the balance sheets, interest subvention on agriculture loans to boost the
rural economy and Pradhan Mantri Awas Yojana to support affordable housing. Also, we
further expect higher allocation towards MUDRA scheme - interest subvention for MSMEs
to further aid small and medium entrepreneurs and boost the rural economy. Given the
pressure on banks’ deposit growth, the budget could hold some tax incentives on banks
Banking

deposits.
Impact
 Strengthening bank balance sheets which are reeling under the NPA pressures for ages
will enable them to kick start their growth. Focus on improving the rural economy, MSME
sector and affordable housing would increase the credit offtake from the current levels.
Key Beneficiaries
 In view of the improving credit offtake, banks like ICICI Bank (ICICIBC IN), IndusInd
(IIB IN), Axis (AXSB IN) and Yes Bank (YES IN) may react positively.

8
 ECONOMY & STRATEGY

Expectations
 Inverted duty structure should be corrected to provide level playing field to domestic
industry. For instance, import duty on boilers is 1.56% and boilers parts, machine tools,
pressure vessels are subject to zero custom duty whereas large number of components
and steel plates required for manufacturing boilers, machine tools and vessels are subject
to basic customs duty of 7.5% to 12.5%.
Impact
 Domestic BTG players to benefit from imposition of higher customs duty on fully built
Capital Goods

imports as anomalies created due to inverted duty structure stands eliminated.

Key Beneficiaries
 BHEL (BHEL IN), Thermax (TMX IN) and Triveni Turbine (TRIV IN) - could benefit from the
correction of inverted duty structure as these companies import various components in
making various boilers and turbines like specialised steel plates, alloys, pressure vessels
etc which attract anywhere between 7.5%-12.5% customs duty. However, fully built
imported units attract zero customs duty.
 ABB India (ABB IN) could be negatively impacted in case 7.5% customs duty levied on
electrical transformers, static converters and inductors, having a power handling capacity
not exceeding 650 KVA is reduced.
 KSB Pumps (KSB IN) could be negatively impacted in case 7.5% customs duty levied on
industrial valves and various pressure valves is reduced.

Expectations
 We expect custom duty on ethanol, methanol and acetic acid to be reduced to possibly
zero from the range of 2.5%- 7.5%.
 We expect hike in basic customs duty on import of caustic soda and soda ash from 7.5%
to 10.0%.
Impact
 Reduction or total abolition of duty will create consumption demand of downstream
chemical industry products and boost the export of such product which will result in
increased forex earning for the country.
 Currently, domestic Alkyl industry is protected by anti-dumping duty (ADD) which is valid
Chemical

till July 2018. To protect Alkyl industry, any hike in basic custom duty on import of caustic
soda & soda ash will help ameliorate suffering of soda ash industry to the greater extent.
This move will lead to higher domestic production, which will reduce dependency on
imports and strengthen the domestic players.
Key Beneficiaries
 Reduction of custom duty to zero level will prove to be a growth catalyst for the companies
given as under:
 Pidilite Industries Ltd (PIDI IN),
 India Glycols Ltd (IGLY IN),
 Navin Fluorine International Ltd (NFIL IN).
 Any hike in basic custom duty will be detrimental to the companies dealing in soda ash
and caustic soda products and will prove to be a growth catalyst for companies like GHCL
Ltd (GHCL IN).

9
 ECONOMY & STRATEGY

Expectations
 Higher budgetary allocation to capital acquisitions, particularly higher share for new
acquisition programs.
 Wt. Avg. R&D deduction should be brought back to 200%.
 Special additional investment allowance for exclusive defence manufacturing and/or
assembly facilities towards manufacturing of tanks, armoured fighting vehicles, defence
aircrafts, spacecraft, warships, arms and ammunition of all kind and all other parts &
accessories of use thereof.
Defence

Impact
 Book-to-Bill ratio could improve for the sector as a whole as system level players issue
order to sub-system suppliers creating multiplier effect. This apart, effective tax rate for
defence companies could reduce anywhere between 50-100bps by reinstating 200% wt
avg R&D expenses. Special investment allowance for exclusive defence manufacturing
units could shorten payback period in capital intensive industry.
Key Beneficiaries
 BEL (BHE IN), Astra Microwave Products (ASTM IN) and Premier Explosives (PRE IN) –
could be the key beneficiary for these initiatives.

Expectations
 For FMCG and other consumer sectors, a lift of consumer sentiment is a much needed
aspect especially with regards to rural demand. FMCG sector is under immense pressure
and marked by low volume growth in the past couple of years. The whole demand scenario
is to be revived after the adverse affect due to the demonetisation and GST impact.
 We can expect a significant boost in budgetary allocation for rural development projects
and other employment schemes. Further, initiatives from the government to improve
disposable incomes, per capita consumption and also incentive schemes are expected
for setting up warehousing and cold chain storage facilities.
FMCG

Impact
 Allocations for rural development programs will help in reviving the sluggish demand
scenario. Incentives for warehousing and cold chain storage facilities will reduce the input
maintenance cost and transportation cost for most of the FMCG companies. Constant
increase in the taxes on cigarettes over several years has shown its impact by way of
substantial fall in the volume of the duty paid cigarettes. So the rationalization will help the
industry to boost volumes.
Key Beneficiaries
 Britannia (BRIT IN), Gillette India (GILL IN), Jyothy Laboratories (JYL IN), Bajaj Corp
(BJCOR IN). 

10
 ECONOMY & STRATEGY

Expectation
 Government may increase public spending on healthcare from 1.15% to 2.5% of
GDP: Public-sector investment on healthcare accounts for less than 1.5% of GDP, which is
one of the lowest globally. Meanwhile the outlay on the healthcare increased by a healthy
~16% YoY in the budget for the FY17-18 and the allocation is likely to see similar increase
in the forthcoming budget as well.
 Raise the tax deductible amount allowed under section 80D: The limit of deduction
towards payment of health insurance premium should be increased to Rs. 50,000 per
annum from the current limit of Rs.25,000 incentivizing families to seek adequate cover for
Healthcare

entire family members.

 Raise the allocation for addressing the increasing burden of non-communicable
diseases (NCDs): The budget is also likely to raise the allocation for addressing the
increasing burden of non-communicable diseases (NCDs) such as diabetes, cardiovascular
diseases, hypertension etc, through diagnostics and emergency services.
Impact
 To sum up, the upcoming Union Budget is likely to focus on higher spending on healthcare
like previous year by emphasizing on health insurance and quality healthcare for the public.
Key Beneficiaries
 Stock that could be positively impacted is Apollo Hospitals Enterprises Ltd (APHS IN).

Expectation
 We expect that IT & ITES companies engaged in software development will be allowed
to avail weighted deduction u/s 35(2AB) for in-house scientific R&D expenditure. We also
expect that the TDS rate on all software transactions will be reduced from 10.0% to 2.0%.
Impact
 Currently, there is an ambiguity on whether weighted deduction of u/s 35(2AB) is available
for a company engaged in the business of development and sale of software or providing
IT services. We expect that provisions u/s 35(2AB) will be suitably amended to include
Information Technology

R&D expenditure on software development. The amendment is necessary to promote a

robust R&D database in the country and bring it on par with the developed nations. This
will improve the bottom line performance of IT companies as R&D is a crucial expense for
IT companies engaged in software development.
 A higher rate of TDS has been adversely affecting the margins and cash flow of the
companies in IT industry. Last year, TDS rate u/s 194J was reduced from 10.0% to 2.0 %
only for payments made to call centres. IT industry will significantly benefit if TDS rates are
reduced to 2.0% for all software transactions.
Key Beneficiaries
 Allowance of weighted deduction on R&D expenditure will benefit for IT companies like
Infoedge (India) Ltd (INFOE IN) & Zensar Technologies Ltd (ZENT IN).
 Reduction of TDS rate on all software transactions will be beneficial for companies like
Vakrangee Ltd (VKI IN) & Firstsource Solutions Ltd (FSOL IN).

11
 ECONOMY & STRATEGY

Expectations
 Nil Custom Import Duty on Alumina from present level of 5.0%.
 Increasing Export Duty on Bauxite from existing 15.0% to 20.0%.

Impact
 The high import duty on alumina has put domestic aluminum producers at a disadvantageous
position who have to count on imported raw materials, rendering Indian finished goods
costlier and uncompetitive in international markets. Given this backdrop, we expect custom
duty on alumina to be brought down to zero from existing level of 5.0%, ensuring greater
availability of alumina in the country.
Mining & Metals

 Despite India being one of the largest producers of bauxite, alumina refiners find it difficult
to source it domestically as they are exported. If export duty on bauxite is increased
from existing 15.0% to 20.0% then it will be a discouraging move for bauxite exporters.
Domestically, bauxite availability will increase addressing alumina refiner concerns.
Key Beneficiaries
 Gujarat Mineral Development Corporation (GMDC IN) may not get directly impacted by any
change in import duty on alumina as it does not mine the same. However, the company
mines Fluorspar at small scale which is used in alumina industry and hence positive
impact of import duty reduction will be marginally positive for Gujarat Mineral Development
Corporation.
 Gujarat Mineral Development Corporation (GMDC IN) is a minor player in bauxite business.
The current share of GMDC’s total sales of bauxite in Gujarat is about 2.9% and hence there
would be marginal impact on overall business of the company if export duty is increased.

Expectations
 Maintain weighted deduction for R&D expenses at current level of 150%: The
weighted deduction was reduced from 200% to 150% starting April 1, 2017. From
April 1, 2021 onwards the weighted deduction will be restricted to 100%. This reduces the
incentive to invest in R&D and pursue new drugs for complex diseases. Thus, to transform
India from a copy-cat drug maker to an innovator, government should incentivize pharma
firms to invest in R&D by initiatives.
 Provide weighted deduction under Section 35(2AB) for clinical trials, regulatory
drug filings, patent filings and foreign consultancy fees: Currently, the law doesn’t
Pharmaceucitals

permit weighted deduction of clinical trials that are outsourced. But, most R&D facilities
outsource clinical trials as these trials are specialized and expensive. In order to
successfully launch any new drug, the innovator has to get the clinical trial done outside
approved facilities within India & abroad. Therefore, all expenditure related to research i.e.
clinical trials, bioequivalence studies, regulatory and patent approvals should be eligible
for weighted deduction, even if these activities are not conducted in-house.
Impact
 This will have a positive impact on the pharma sector because R&D weighted deduction
would increase margins.
Key Beneficiaries
 Stocks that could be positively impacted are: Biocon (BIOS IN), Natco Pharma
(NTCPH IN), Sun Pharma (SUNP IN), SPARC (Sun Pharma Advanced Research
Company), SPADV IN, Lupin (LPC IN).

12
 ECONOMY & STRATEGY

Expectations
 Increase in allocation for various schemes towards IPDS, DDUGJY and UDAY schemes.
 Rate of depreciation on renewable energy assets to be reinstated to 80.0%.
 Extension of tax holiday U/s 80-IA to be extended.
Impact
 With the increase in the funds towards power schemes government would be in a position
to complete its dream project “Power for All”. The schemes are meant to be improving the
financials of Discoms directly/indirectly.
Power

 The accelerated depreciation was reduced to 40.0% from April 2017 which if reinstated to
80.0% will make renewable power projects look lucrative and attractive. The government
has a target of 175GW of renewable energy target by 2022.
 The tax holiday U/s 80-IA is set to expire from April 2017 which if extended would help in
keeping up investment in power sector.
Key Beneficiaries
 Increase in funds for power schemes would benefit the whole power sector and majorly
renewable energy sector. Tata Power Ltd (TPWR IN), Adani Power (ADANI IN), Power Grid
(PWGR IN), Ujaas Energy (UJEL IN) and Inox Wind (INXW IN).

Expectation
 In view of the ambitious Bullet train project, announced in partnership with Japan, which
will need at least Rs 1.1 lakh crore of investment during the 2017-22 and Railway Ministry
pegging Rs. 20 lakh crore investment plans for high-speed corridors and modernization,
we expect a significant portion to be allocated to the railways sector towards development
of high speed corridors, modernization of railway stations, quality of trains, bullet trains,
metros and passenger safety. Also the budget is expected to give a huge fillip to the
railways and the massive flow of investment in railway infrastructure and rolling stock will
Railways

bring about major revival of the industry.

Impact
 Higher allocation towards the sector cascades into newer investments focusing on speed,
durability and efficiency and the suppliers eventually have to update the technologies to
cope up with the same.
Key Beneficiaries
 Higher allocation towards railways may aid stocks like Timken India (TMKN IN) & SKF
India (SKF IN), which have exposure towards railways through their high speed bearing
products.

13
 ECONOMY & STRATEGY

Expectations
Lower manufacturing costs for yarn and fabric in other countries have led to increased imports
into India. Additionally, other structural changes such as GST have also impacted domestic
manufacturing. A brief of the same is given below.

 Overcapacity and lower cost of production has led to lower prices for viscose based
yarn imports from Indonesia and China, resulting in increased competition and reduced
realisation for domestic manufacture. Also, post implementation of GST, the total incidence
of protection for linen yarn is 10.3% (Basic customs duty (BCD) of 10% and 3% educational
cess on BCD). Prior to GST, the protection was to the extent of 29.44%, which also included
a countervailing duty (CVD) of 12.5% (on import price + BCD), and an additional excise
duty of 4% (on import price + BCD + CVD + educational cess). This marked difference
Textile

has resulted in Indian products becoming less competitive and has resulted in increased
import of linen yarn. With regard to customs tariff, Chapter 54 and 55 specifies about
customs duty + 10% specific duty depending on the items. However, chapter 60, which
deals specifically with knitted fabric, does not mention about specific duty.
Impact
 An increase in customs duty (to 10% from current 5% for viscous yarn) and bridging the
gap between the prior and post GST rates (of linen yarn) will raise competitiveness of
domestic players. In fabrics, the inclusion of specific duty in chapter 60 will ensure no
misuse of the provisions.
Key Beneficiaries
 KPR Mill Ltd (KPR IN) – Yarn and fabric constitute ~60% of the company’s revenues.
Ambika Cotton Mills Ltd (ACML IN).

14
Disclaimer
yy Analyst certification: The following analyst(s), J K Jain, who is (are) primarily responsible for this report and whose name(s) is/
are mentioned there in, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject
security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific
recommendation(s) or views contained in this research report.
yy Disclaimer: Karvy Stock Broking Limited [KSBL] is registered as a research analyst with SEBI (Registration No INH200003265).
KSBL is also a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. The
subsidiaries and group companies including associates of KSBL provide services as Registrars and Share Transfer Agents, Commodity
Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services,
financial consultancy and advisory services, realty services, data management, data analytics, market research, solar power, film
distribution and production, profiling and related services. Therefore associates of KSBL are likely to have business relations with most
of the companies whose securities are traded on the exchange platform. The information and views presented in this report are prepared
by Karvy Stock Broking Limited and are subject to change without any notice. This report is based on information obtained from public
sources , the respective corporate under coverage and sources believed to be reliable, but no independent verification has been made
nor is its accuracy or completeness guaranteed. 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 KSBL. While we would endeavor to update the information
herein on a reasonable basis, KSBL is under no obligation to update or keep the information current. Also, there may be regulatory,
compliance or other reasons that may prevent KSBL from doing so. The value and return on investment may vary because of changes
in interest rates, foreign exchange rates or any other reason. This report and information herein is solely for informational purpose and
shall 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.
KSBL 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.
This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or
recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their
specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon
any information or analysis mentioned in this report, investors may please note that neither KSBL nor any associate companies of KSBL
accepts any liability arising from the use of information and views mentioned in this report. Investors are advised to see Risk Disclosure
Document to understand the risks associated before investing in the securities markets. Past performance is not necessarily a guide to
future performance. Forward-looking statements are not predictions and may be subject to change without notice. Actual results may
differ materially from those set forth in projections.
yy Associates of KSBL might have managed or co-managed public offering of securities for the subject company or might have been
mandated by the subject company for any other assignment in the past twelve months.
yy Associates of KSBL might have received compensation from the subject company mentioned in the report during the period preceding
twelve months from the date of this report for investment banking or merchant banking or brokerage services from the subject company
in the past twelve months or for services rendered as Registrar and Share Transfer Agent, Commodity Broker, Currency and forex
broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, consultancy and advisory
services, realty services, data processing, profiling and related services or in any other capacity.
yy KSBL encourages independence in research report preparation and strives to minimize conflict in preparation of research report.
yy Compensation of KSBL’s Research Analyst(s) is not based on any specific merchant banking, investment banking or brokerage service
transactions.
yy KSBL generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the
securities or derivatives of any companies that the analysts cover.
yy KSBL or its associates collectively or Research Analysts 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.
yy KSBL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in
connection with preparation of the research report and have no financial interest in the subject company mentioned in this report.
yy Accordingly, neither KSBL nor Research Analysts have any material conflict of interest at the time of publication of this report.
yy It is confirmed that KSBL and Research Analysts, primarily responsible for this report and whose name(s) is/ are mentioned therein
of this report have not received any compensation from the subject company mentioned in the report in the preceding twelve months.
yy It is confirmed that J K Jain, Research Analyst did not serve as an officer, director or employee of the companies mentioned in the
report.
yy KSBL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this
report.
yy Neither the Research Analysts nor KSBL have been engaged in market making activity for the companies mentioned in the report.
yy We submit that no material disciplinary action has been taken on KSBL by any Regulatory Authority impacting Equity Research Analyst
activities.
Reg. Office
Karvy Centre, 8-2-609/k Avenue 4,
Street No.1, Banjara Hills,
Hyderabad-500 034.
Tel : +91-40-23312454
Fax : +91-40-23311968
Corporate Office
Karvy Millennium, Plot No.31,
Financial District, Gachibowli,
Hyderabad-500 032.

www.karvyonline.com
1800 419 8283
research@karvy.com f in
You
Tube

Investor Grievance Cell Email: igksblsb@karvy. com,

SEBI Reg. No’s NSE: INB/INF/INE 230770138,
BSE: INB/INF 010770130/010770131,
MSEI: INE 260770138, DP: IN-DP-175-2015,
PMS Regd No. INP000001512