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AUGUST 2, 2017

Interim Budget
2019-20

1st February 2019

Kotak Securities
Private Client Research
Interim Budget 2019-20 February 2019

Research Team INTERIM BUDGET – 2019-20


kspcg.research@kotak.com
Contact: +91 22 6218 6427
Overall a populist Budget that provides a feel good factor to various section of population
(farmers, middle class & poor) with a slight slippage in the fiscal deficit. The budget
announcements are aimed at luring all sections of the society from an election stand point.

Nearly 0.6% of GDP is being spent on direct transfer to farmers and tax breaks to middle class.
This bodes well for consumption driven stocks and rural centric companies. The thrust on
housing and relief provided to builders is positive for real estate companies. Banks would be a
able to raise savings deposits as the limit for deducting TDS on interest earned has been raised
from Rs.10,000 to Rs.40,000. Higher allocation to defense, railways, housing and urban infra
to benefit companies associated with these projects.

The Gross borrowing program for FY19RE seems manageable but that of FY20BE (Rs.7 trillion)
is slightly higher than what the bond market was expecting. This could put upward pressure
on Bond Yields and in turn impact equity markets.

The Vision for the next Decade has been nicely drafted and presented. It talks about Economy
becoming USD 5 Trillion in the next five years and USD 10 Trillion in the next eight years thereafter.

Key Highlights of the Budget


 Fiscal Deficit below 3.5% for both FY19RE and FY20BE is a welcome move from market
perspective. For both FY19RE & FY20BE the fiscal deficit has been pegged at 3.4%.
 On budget financials, the government has built in 10.2% & 11.5% growth in Nominal GDP
for FY19RE & FY20BE, respectively.
 Gross Tax Revenue growth of 17% in FY19RE looks very healthy and assumptions of 13.5%
growth in FY20BE looks conservative.
 GST collection target for FY19 has been cut by Rs.1 lakh cr and on the Revised Estimate
the government is building in 18.2% growth for FY20.
 The government has increased the disinvestment target to Rs 900 bn for FY20 an increase
of 12.5% YoY over FY19.
 Total Expenditure to grow by 14.7% in FY19RE and 13.3% in FY20BE. The lower expenditure
growth in FY20E is on the back of 14.4% growth in Revenue expenditure and only 6.2%
growth in Capital Expenditure.
 Out of the schemes announced two have a meaningful impact. PM-KISAN scheme is a
response to remove the distress in farm sector. The Mega Pension scheme (Pradhan
Mantri Shram-Yogi Maandhan) is aimed at the 420mn unorganised workers with monthly
income upto Rs.15,000.
 Farmers who take loans under Kisan Credit Card Scheme can get an additional 3% rebate
on timely repayment.
 To give further relief to the farmers the minimum support price (MSP) of all 22 crops has
been fixed at 50% above cost price.
 The limit for deducting TDS on bank/post office interest receipts has been raised from
Rs.10,000 to Rs.40,000. Further, the TDS limit on rent is proposed to be increased from
Rs.180,000 to Rs.240,000.
 The government announced full tax rebate for individuals having annual income up to Rs
5 lakh

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 2
Interim Budget 2019-20 February 2019

Revenue Growth: Direct Taxes to lead growth


This year the Direct Tax & Indirect Tax collection is expected to rise by 19.7% & 14.4%,
respectively as per the revised estimates. For FY20BE the target revenue collection from Direct
& Indirect Taxes is assumed to go up by 15% & 11.8%, respectively. Non tax revenue growth of
11.2% for FY20BE seems conservative on the back of 27% growth estimated in FY19RE.

Within Direct Tax Revenue the higher base of individual tax payers will lead to 22.8% jump in
Income Tax Revenue in FY19RE and 13.3% rise in FY20BE. Corporate Tax Revenue is projected
to rise by 17.5% in FY19RE and 13.3% in FY20BE. In Indirect tax collection GST collection target
for FY19 has been cut by Rs.1 lakh cr. On the Revised Estimate of FY19 the government is
building in 18.2% growth from GST collection in FY20BE. The Divestment target of Rs.900 bn
in FY20BE looks very high considering this year’s achievement till date.

Central Government Finances (Summary)


(Rs bn) FY17 FY18 FY19 FY20 % chg % chg
Actual Actual RE BE FY19 FY20
Gross Tax Revenue 17,158 19,190 22,482 25,521 17.2% 13.5%
Direct taxes 8,539 10,074 12,053 13,859 19.7% 15.0%
Indirect taxes 8,620 9,117 10,428 11,662 14.4% 11.8%
(Transfers to states, Uts) -6,145 -6,765 -7,638 -8,471 12.9% 10.9%
Tax Revenue (Net to Centre) 11,014 12,425 14,844 17,050 19.5% 14.9%
Non-Tax Revenue 2,728 1,927 2,453 2,726 27.3% 11.2%
Recoveries of Loans 176 156 132 125 -15.9% -4.9%
Other Receipts (Incl. Divestments) 477 1,000 800 900 -20.0% 12.5%
Total Receipts 14,396 15,509 18,228 20,802 17.5% 14.1%
Total Expenditure 19,752 21,420 24,572 27,842 14.7% 13.3%
Fiscal Deficit 5,356 5,911 6,344 7,040 7.3% 11.0%
as % of GDP -3.5% -3.5% -3.4% -3.4%
Nominal GDP 153,624 170,950 188,407 210,074 10.2% 11.5%
GDP Growth Rate 11.3% 10.2% 11.5%
Source: Annual Budget 2019-20

Break-up of Revenues
(Rs bn) FY17 FY18 FY19 FY20 % chg % chg
Actual Actual RE BE FY19 FY20
Direct taxes 8,539 10,074 12,053 13,859 19.7% 15.0%
Corporation tax 4,849 5,712 6,710 7,600 17.5% 13.3%
Income tax 3,646 4,308 5,290 6,200 22.8% 17.2%
Other taxes 43 54 53 59 -0.8% 11.3%
Indirect taxes 8,620 9,117 10,428 11,662 14.4% 11.8%
Central GST 4,426 6,439 7,612 45.5% 18.2%
Customs duty 2,254 1,290 1,300 1,454 0.8% 11.8%
Excise duty 3,821 2,588 2,596 2,596 0.3% 0.0%
Service tax 2,545 812 93
Source: Annual Budget 2019-20

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 3
Interim Budget 2019-20 February 2019

Direct Taxes (Rs bn) Direct Taxes Breakup (Rs bn)


Direct Tax (Rs bn - LHS) Growth (% - RHS) 14,000 Personal Income tax

16000 24% Corporation tax


12,000
22% Others

7,600
20% 10,000

13859
12000 18%

6,710
18%

12053
8,000

5,712
14% 15%
10074

4,849
8000 12% 6,000

4,532
8539

4,289
3,947
7458

9%
6989

4,000
6418

6,200
7%

5,290
4000 6%

4,308
3,646
2,000

2,876
2,657
2,429
0 0% -
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY14 FY15 FY16 FY17 FY18 FY19 FY20
RE BE RE BE

Source: Annual Budget 2019-20 Source: Annual Budget 2019-20

Indirect Taxes (Rs bn) Indirect tax breakup (Rs bn)


Indirect Tax (Rs bn - LHS) Growth (% - RHS)
12,000 Customs Excise Service tax GST
14000 70%
10,000
12000 60%
58%
8,000
11662

10000 50%
10428

8000 40% 6,000


9117
8620

6000 30% 30%


7098

4,000
5459

4000 20%
4971

14% 2,000
2000 10% 12%10%
5% 6%
-
0 0%
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
FY14 FY15 FY16 FY17 FY18 FY19 FY20
RE BE
RE BE

Source: Annual Budget 2019-20 Source: Annual Budget 2019-20

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 4
Interim Budget 2019-20 February 2019

Expenditure Growth: Revenue expenditure to be higher


In the interim budget, the finance minister has budgeted 13.3% rise in expenditure for FY20BE
over FY19RE. This is driven by 14.4% rise in revenue expenditure while capital expenditure is
estimated to grow by only 6.2% in FY20BE. The growth estimates for capital expenditure is
much lower than FY19RE of 20.3% due to lower capex growth estimates in roads and highways
for FY20BE. Capital expenditure towards Roads and highways for FY20BE is estimated at 5%
on a higher base of FY19RE when it is estimated to grow at 35.1%. On the other hand, capital
expenditure towards sectors like Defence, Housing and Urban Infra are estimated to grow at
higher rate of 9.9% and 14.9% over FY19RE of 3.2% and 10.8%, respectively. Railways
continued to draw government’s attention with 22% growth in capital expenditure, similar rate
in FY19BE.

The higher growth in revenue expenditure in FY20BE is due to 91.2% increase in Agriculture
and farmers’ welfare. The key reason for higher agri outlay is due to proposal of Rs.750 bn for
PM-KISAN scheme for small and marginal farmers in the interim budget. Further, interest
payments is also estimated to grow at higher pace of 13.2% in FY20BE on increased
borrowings. The Finance Minister estimated 11.7% growth in subsidy in FY20BE with oil
subsidy estimated to grow by 51% yoy due to rollover of FY19 subsidy burden when
government cut the petrol and diesel prices in October 2018. The food subsidy is estimated to
increase by 7.5% in FY20BE mainly due to rise in minimum support price for wheat and rice.

Break-up of Expenses
(Rs bn) FY17 FY18 FY19 FY20 % chg % chg
Actual Actual RE BE FY19 FY20

Total Expenditure 19,752 21,420 24,572 27,842 14.7% 13.3%


Revenue Expenditure 16,906 18,788 21,406 24,479 13.9% 14.4%
Interest Payments 4,807 5,290 5,876 6,651 11.1% 13.2%
Subsidies 2,348 2,244 2,992 3,342 33.3% 11.7%
Food Subsidy 1,102 1,003 1,713 1,842 70.8% 7.5%
Fertilizers Subsidy 663 664 701 750 5.5% 7.0%
Petroleum Subsidy 275 245 248 375 1.5% 50.9%
Other Subsidy 308 332 330 376 -0.7% 13.8%
Pay, allowances & Pensions 3,996 4,464 4,936 5,239 10.6% 6.1%
Agriculture & farmers welfare 369 374 678 1,296 81.3% 91.2%
Education 720 800 809 917 1.1% 13.4%
Health & Family Welfare 364 483 518 596 7.3% 15.1%
Rural development 951 1,086 1,124 1,175 3.5% 4.6%
Others 3,350 4,048 4,473 5,262 10.5% 17.6%
Capital Expenditure 2,846 2,631 3,166 3,363 20.3% 6.2%
Defence 915 954 985 1,082 3.2% 9.9%
Railways 452 434 531 646 22.2% 21.7%
Roads and Highways 412 508 686 720 35.1% 5.0%
Housing and urban affairs 165 153 170 195 10.8% 14.9%
Others 902 582 795 719 36.6% -9.6%
Source: Annual Budget 2019-20

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 5
Interim Budget 2019-20 February 2019

Fiscal Deficit target increased from 3.2% to 3.4% for FY19


In FY19RE the government’s revenue growth of 17.2% is far higher than the total expenditure
of 14.7%. The Fiscal Deficit for FY19BE is going up from the budgeted 3.3% to 3.4% after
accounting for the Rs.200 bn allocated for PM-KISAN scheme. In FY20BE the Fiscal Deficit will
remain elevated at 3.4% due to the Rs.750 bn expenditure going towards the PM-KISAN
scheme. As per Finance Minister’s speech the Fiscal Deficit would have been 3.1% in FY20BE
if the PM-KISAN scheme is excluded.

Fiscal Deficit (Rs bn)

8000 Gross Fiscal Deficit (GFD) (LHS) GFD/GDP (%) (RHS) 5.0

4.5 7040 4.5


6000 6344
4.1 3.9 5911 4.0

5107 3.5 3.5 3.4


4000 3.4 3.5
5328
5029 5356
3.0
2000
2.5

0 2.0
FY14 FY15 FY16 FY17 FY18 FY19RE FY20BE

Source: Annual Budget 2019-20

Government schemes
Pradhan Kisaan Samman Nidhi: Farmers to receive Rs.6,000 annually (three equal
instalments) directly into their bank accounts. Around 120 mn small and marginal farmers
owning up to two hectares of land will be eligible for this scheme. This program will be funded
by the Central Government. The program would be made effective from 1st December 2018
and the first instalment for the period up to 31st March 2019 would be paid in this quarter. This
program will entail an annual expenditure of Rs.200 bn in FY19 and Rs.750 bn in FY20.

Rashtriya Gokul Mission: The government has provided additional support to Animal
Husbandry and Fisheries sector and has increased the allocation for Rashtriya Gokul Mission
to Rs.7.5 bn in FY19RE.

Kisan Credit Card scheme (KCC) to Animal Husbandry and Fisheries farmers: The interest
subvention benefit has been extended to Animal Husbandry and Fisheries farmers through
Kisan Credit Card scheme (KCC). The government will provide the benefit of 2% interest
subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail
loan through Kisan Credit Card. Further, in case of timely repayment of loan, farmers will also
get an additional 3% interest subvention.

New Pension Scheme: The New Pension Scheme (NPS) has been liberalized. Keeping the
contribution of the employee at 10%, the government has increased its contribution by 4%
making it 14%. Maximum ceiling of the bonus given to the laborers has been increased from
Rs.3,500 pm to Rs.7,000 pm and the maximum ceiling of the pay has been increased from
Rs.10,000 pm to Rs.21,000 pm. The ceiling of payment of gratuity has been enhanced from Rs.
1 mn to Rs. 2 mn.

Pradhan Mantri Shram-Yogi Maandhan: The government proposes to launch a mega pension
yojana namely 'Pradhan Mantri Shram-Yogi Maandhan' for the unorganised sector workers
(420 mn workers in the unorganised sector) with monthly income up to Rs.15,000. This
pension yojana shall provide them an assured monthly pension of Rs.3,000 from the age of 60

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 6
Interim Budget 2019-20 February 2019

years on a monthly contribution of a small affordable amount during their working age. It is
expected that at least 100 mn labourers and workers in the unorganized sector will avail the
benefit of 'Pradhan Mantri Shram-Yogi Maandhan' within next five years making it one of the
largest pension schemes of the world. A sum of Rs.5 bn has been allocated for the Scheme.
Additional funds will be provided as needed. The scheme will be implemented from FY19.

Ayushman Bharat: Earlier, the government launched healthcare programme - Ayushman


Bharat, to provide medical treatment to nearly 500 mn people. Already close to 1 mn patients
have benefited for medical treatment resulting in cost of Rs. 30 bn to government through free
treatment made available under the scheme.

Pradhan Mantri Jan Aushadhi Kendras: Lakhs of poor and middle class people are benefiting
from reduction in the prices of essential medicines, cardiac stents and knee implants and
availability of medicines at affordable prices.

MGNREGA: To provide food grains at affordable prices to the poor and middle classes, about
Rs1.7 trillion were spent in the year FY19. Rs600 bn is being allocated for MGNREGA in
FY20BE. Additional amount would be provided if required.

Pradhan Mantri Gram Sadak Yojana: Under the Pradhan Mantri Gram Sadak Yojana,
construction of rural roads has been tripled. About 1.58 mn habitations out of a total of 1.78
mn habitations have already been connected with pucca roads and work is going on to
complete the rest. Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs190 bn
in FY20BE as against Rs155 bn in FY19RE.

Allocation for the flagship government schemes (Rs bn)


Percent Change
Scheme FY18 FY19BE FY19RE FY20BE 19RE/19BE 20BE/19RE
MGNREGS 552 550 611 600 11.1 (1.8)
National Education Mission 295 326 323 386 (0.9) 19.3
National Health Mission (NHM) 320 306 312 323 1.8 3.4
Pradhan Mantri Gram Sadak Yojna 169 190 155 190 (18.4) 22.6
Pradhan Mantri Awas Yojna (PMAY) 312 275 264 259 (4.0) (2.1)
Green Revolution+White Revolution 126 161 142 148 (11.8) 3.6
National Programme of Mid-day Meals 91 105 99 110 (5.2) 10.6
Pradhan Mantri Krishi Sinchai Yojna 66 94 83 95 (12.5) 15.3
Swachh Bharat Mission (SBM) 194 178 170 128 (4.8) (24.9)
Urban Rejuvenation Mission 95 122 126 139 3.3 10.6
National Livelihood Mission (NLM) 49 61 63 95 3.9 51.3
Pradhan Mantri Swasthya Suraksha Yojana 32 38 38 40 0.0 4.6
Jobs and Skill Development 27 51 68 75 34.7 10.0
National Rural Drinking Water Programme 70 70 55 82 (21.4) 49.1
National Social Assistance Progamme 87 100 89 92 (10.8) 3.4
Total 2,484 2,628 2,598 2,760 (1.1) 6.2
Source: Annual Budget 2019-20

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 7
Interim Budget 2019-20 February 2019

Tax details
 The tax collections increased significantly from Rs. 6.38 trillion in 2013-14 to almost Rs.12
trillion this year. The number of returns filed have also increased from 37.9 mn to 68.5 mn
showing 80% growth in tax base.
 Individual taxpayers having net taxable income up to Rs.5 lakhs will get full tax rebate and
therefore will not be required to pay any income tax. Also, individuals having higher gross
income and availing deductions on investments in provident funds, specified savings,
insurance etc., interest on home loan up to Rs.2 lakh, interest on education loans, National
Pension Scheme contributions, etc can avail the rebate and may not be required to pay the
tax.
 This will provide tax benefit of Rs.185 bn to an estimated 30 mn middle class taxpayers
 For salaried persons, Standard Deduction is being raised from the current Rs 40,000 to Rs.
50,000
 Currently, income tax on notional rent is payable if one has more than one self-occupied
house. Income tax on notional rent on a second self-occupied house is proposed to be
exempted.
 TDS threshold on interest earned on bank/post office deposits is being raised from Rs
10,000 to Rs 40,000 which will benefit small depositors and nonworking spouses. The TDS
threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs.
2,40,000
 The benefit of rollover of capital gains under section 54 of the Income Tax Act will be
increased from investment in one residential house to two residential houses for a tax
payer having capital gains up to Rs 20 mn. This benefit can be availed once in a life time.
 The period of exemption from levy of tax on notional rent, on unsold inventories, has been
increased from one year to two years, from the end of the year in which the project is
completed.

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Interim Budget 2019-20 February 2019

Vision for the next decade


Poised to become a Five Trillion Dollar Economy in the next five years and aspire to become a
Ten Trillion Dollar Economy in the next 8 years thereafter.

10 important Dimensions of Govt.'s Vision 2030 for India:

 Physical & Social Infra: Building next generation infrastructure in all sectors comprising
roads, railways, seaports, airports and inland waterways.
 Digital India reaching every corner of the country: Digital Infrastructure and digital
economy of 2030. Our youth will lead us in this endeavor by creating innumerable startups
and jobs.
 Clean & Green India: An India that drives electric vehicles, with renewables becoming major
source of energy, bringing down import dependence and increasing energy security for our
people.
 Rural Industrialization: Expanding rural industrialization using modern industrial
technologies, based on the ‘Make In India’ approach, using grassroot MSMEs and startups
across the country.
 Clean Rivers: Safe drinking water to all Indians and efficient use of water in irrigation using
micro-irrigation techniques.
 Oceans & Coastline: Long coastline can be pivotal for the economy, using the strength of
the blue economy and SagarMala.
 Space: India becoming a launchpad of the world and placing an Indian astronaut in space
by 2022.
 Self-sufficiency in Food Production: Improving agricultural productivity with an emphasis
on organic food.
 Health: Healthy India and comprehensive wellness system for all
 Minimum Government Maximum Governance: With proactive, responsible, friendly
bureaucracy & electronic governance.

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RATING SCALE (KOTAK SECURITIES – PRIVATE CLIENT RESEARCH)
Definitions of ratings
BUY – We expect the stock to deliver more than 15% returns over the next 12 months
ADD – We expect the stock to deliver 5% - 15% returns over the next 12 months
REDUCE – We expect the stock to deliver -5% - +5% returns over the next 12 months
SELL – We expect the stock to deliver < -5% returns over the next 12 months
NR – Not Rated. Kotak Securities is not assigning any rating or price target to the stock. The report has been prepared for
information purposes only.
SUBSCRIBE – We advise investor to subscribe to the IPO.
RS – Rating Suspended. Kotak Securities has suspended the investment rating and price target for this stock, either because there
is not a Sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing,
an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock
and should not be relied upon.
NA – Not Available or Not Applicable. The information is not available for display or is not applicable
NM – Not Meaningful. The information is not meaningful and is therefore excluded.
NOTE – Our target prices are with a 12-month perspective. Returns stated in the rating scale are our internal benchmark.

FUNDAMENTAL RESEARCH TEAM (PRIVATE CLIENT RESEARCH)


Rusmik Oza Arun Agarwal Amit Agarwal Nipun Gupta Deval Shah
Head of Research Auto & Auto Ancillary Transportation, Paints, FMCG Information Tech, Midcap Research Associate
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Cap. Goods & Cons. Durables Cap. Goods & Cons. Durables Metals & Mining, Midcap Pharmaceuticals Research Associate
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+91 22 6218 6424 +91 22 6218 6431 +91 22 6218 6440 +91 22 6218 6426 +91 22 6218 7021

Teena Virmani Sumit Pokharna Pankaj Kumar Krishna Nain K. Kathirvelu


Construction, Cement, Buildg Mat Oil and Gas, Information Tech Midcap M&A, Corporate actions Support Executive
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+91 22 6218 6432 +91 22 6218 6438 +91 22 6218 6434 +91 22 6218 7907 +91 22 6218 6427

TECHNICAL RESEARCH TEAM (PRIVATE CLIENT RESEARCH)


Shrikant Chouhan Amol Athawale Faisal Shaikh, CFTe Siddhesh Jain
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+91 22 6218 5408 +91 20 6620 3350 faisalf.shaikh@kotak.com siddhesh.jain@kotak.com
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DERIVATIVES RESEARCH TEAM (PRIVATE CLIENT RESEARCH)


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lender / borrower to such company (ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions
at the time of publication of Research Report or at the time of public appearance. Kotak Securities Limited (KSL) may have proprietary long/short position in the above
mentioned scrip(s) and therefore may be considered as interested. The views provided herein are general in nature and does not consider risk appetite or investment
objective of particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation
to do business with KSL. Kotak Securities Limited is also a Portfolio Manager. Portfolio Management Team (PMS) takes its investment decisions independent of the
PCG research and accordingly PMS may have positions contrary to the PCG research recommendation. Kotak Securities Limited does not provide any promise or
assurance of favourable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors
including their financial condition, suitability to risk return profile and take professional advice before investing.
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies
and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this
report.
No part of this material may be duplicated in any form and/or redistributed without Kotak Securities' prior written consent.
Details of Associates are available on www.kotak.com
1. “Note that the research analysts contributing to the research report may not be registered/qualified as research analysts with FINRA; and
2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions on communications
with a subject company, public appearances and trading securities held by a research analyst account
Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak Mahindra Inc. (Member
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FINRA/SIPC)at 369 Lexington Avenue 28th Floor NY NY 10017 USA (Tel:+1 212-600-8850).
Kotak Securities Limited and its non US affiliates may, to the extent permissible under applicable laws, have acted on or used this research to the extent that it relates
to non US issuers, prior to or immediately following its publication. This material should not be construed as an offer to sell or the solicitation of an offer to buy any
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to purchase or subscribe for any securities or solicitation of any investments or investment services. Accordingly, any brokerage and investment services including the
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Research Analyst has served as an officer, director or employee of subject company(ies): No
We or our associates may have received compensation from the subject company(ies) in the past 12 months.
We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past 12 months: No
We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past
12 months. We or our associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage
services from the subject company(ies) in the past 12 months. We or our associates may have received compensation or other benefits from the subject company(ies)
or third party in connection with the research report. Our associates may have financial interest in the subject company(ies).
Research Analyst or his/her relative's financial interest in the subject company(ies): No
Kotak Securities Limited has financial interest in the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report:
No
Our associates may have actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of
publication of Research Report.
Research Analyst or his/her relatives has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately
preceding the date of publication of Research Report: No.
Kotak Securities Limited has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date
of publication of Research Report: No
Subject company(ies) may have been client during twelve months preceding the date of distribution of the research report.
"A graph of daily closing prices of securities is available at https://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and
http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company from the list on the browser and select the "three years" icon in the price
chart)."
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call on 91- (022) 4285 8301.

Kotak Securities – Private Client Research Please see the Disclosure/Disclaimer on the last page For Private Circulation 12