R REDUCE
(previously HOLD)

Apollo Tyres Ltd

Company Note Auto Parts Aug 16, 2022
InCred Research / Consensus (10.1)
CMP* ₹250
Target Price ₹217
* price as on January 01, 0001
Risk-reward adverse; downgrade to Reduce Financials
India
Consensus ratings*: Buy 22 Hold 4 Sell 5
Previous target: 184
Up/downside: -13.2%
Reuters
Bloomberg: APTY IN
Market cap: US$2,188m
Rs158,871m
Average daily turnover: US$9.6m
Current shares o/s: 635.1m
Free float: 62.7%
*Source: Bloomberg

Key changes in this note

Sales upgrade by 4-5% for FY23F-25F.

FY23F-25F EBITDA upgrade by 2-3%.

FY23F-25F EPS upgrade by 2-4%.

*Source: Bloomberg

Price performance
1M 3M 12M
Absolute (%) 18.5 18.9 10.7
Relative (%) 6.4 7.9 3.2
Major shareholders
% held
Kanwar Family 37.3
Emerald Sage Investment Ltd. 9.9
White Iris Investment Ltd. 8.0
Analyst(s)

Pramod AMTHE

T (91) 22 4161 1541
E pramod.amthe@incredcapital.com

Hitesh THAKURANI

T (91) 22 4161 1554
E hitesh.thakurani@incredcapital.com

Risk-reward adverse; downgrade to Reduce

1QFY23 consolidated EPS rose 68% qoq to Rs3, driven by a 10% EBITDA rise and the rest by lower depreciation and interest expenses.  

Aggressive price hikes lead to our 2-4% EPS upgrade for FY23F-25F.

Stock price spike in last two months has pushed P/BV valuation to above mean level where the risk-reward ratio seems unfavourable. Downgrade to Reduce.

In-line EBITDA performance in 1QFY23

Apollo Tyres’ 1QFY23 consolidated EBITDA rose 10% qoq to Rs6.9bn, in line with our estimate but better than Bloomberg consensus estimate. Indian operations’ performance was impressive with a 28% qoq rise in EBIT. EBIT margin was flat qoq for European operations at 4.9% and rose 66bp qoq to 4.8% for India operations. Lower depreciation, interest cost and taxes led to a 7% beat in EPS (+68% qoq) to Rs3, forming 24% of our FY23F estimate. Net debt rose by 9% qoq to Rs51bn. Capacity utilization stood at 81% for Indian operations and 88% for European operations.

Management conference-call highlights  

Management gave guidance of subdued India sales outlook in coming quarters due to seasonality and steep price hikes taken. Management indicated that only half of 8% cost hike has been passed on to customers and the rest is yet to follow. Capex was limited to Rs1.25bn in 1QFY23 vs. Rs9bn planned for Indian operations in FY23F. Considering that capacity utilization is above 80%, it indicates scope for brownfield expansion in Andhra Pradesh and Hungary.  

Margin pressure to persist; limit FY23F-25F EPS upgrade to 2-4%

Considering the sharp price hikes taken in India and Europe to pass on commodity cost pressure to customers, we raise our sales estimates by 4-5% for FY23F-25F. However, following the sustained EBITDA margin pressure due to high commodity input cost, we cut EBITDA margin estimates by 20-30bp. The margin pressure is more pronounced for India, while Europe will be tested in coming quarters if recession hits its economy. With elevated net debt level (9% qoq), we limit consolidated EPS upgrade to 2-4% for FY23F-25F.  

Downgrade our rating to Reduce as risk-reward ratio is unfavourable

Due to rising competitive intensity in India truck radial tyre business, which is the biggest revenue contributor to industry and for Apollo Tyres, we feel the company may have to prolong capex and compromise on profit margins to sustain its leadership position. This can impact FCF and keep net debt level elevated. Also, the risk of European recession is high, where its capacity utilization has touched 88% currently. The sharp run-up in stock price has pushed forward P/BV valuation to near seven-year mean level, where we feel the risk-reward ratio is unfavourable, leading to downgrading our rating on the stock to Reduce (vs.Hold earlier). We roll forward our P/E-based target price to Rs217 from Rs184 earlier. Upside risks are strong pricing power demonstration and better product mix benefit.   

Financial Summary
Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
Revenue (Rsm) 172,006 209,475 249,742 284,345 318,961
Operating EBITDA (Rsm) 26,011 25,740 30,064 34,825 39,437
Net Profit (Rsm) 3,502 6,384 8,644 11,501 14,272
Core EPS (Rs) 11.5 10.1 13.6 18.1 22.5
Core EPS Growth 159.1% (12.2%) 34.2% 33.1% 24.1%
FD Core P/E (x) 45.36 24.88 18.38 13.81 11.13
DPS (Rs) 3.5 5.0 6.0 7.0 7.0
Dividend Yield 1.40% 2.00% 2.40% 2.80% 2.80%
EV/EBITDA (x) 7.72 7.95 6.91 5.88 5.25
P/FCFE (x) 9.33 (41.05) 175.35 21.46 78.59
Net Gearing 36.7% 39.0% 39.9% 35.4% 34.6%
P/BV (x) 1.39 1.35 1.30 1.23 1.14
ROE 6.9% 5.6% 7.2% 9.1% 10.6%
% Change In Core EPS Estimates 4.21% 3.76% 2.03%
InCred Research/Consensus EPS (x)
INCRED RESEARCH, COMPANY REPORTS, PRICED AS AT January 01, 0001

Risk-reward adverse; downgrade to Reduce

1QFY23 earnings-call highlights

Outlook: Management mentioned that it is cautiously optimistic on near-term outlook of the business. In India, it expects demand to remain sluggish in the near term, which would also be due to seasonality. It expects a qoq decline in the revenue of India business in 2QFY23F. In Europe, it expects demand to remain strong. Management indicated that margins would remain under pressure in the near term. It expects a 3% qoq increase in raw material cost in 2QFY23F, after which it expects cost to flatten and then decrease. It expects to counter the margin pressure by continuing to take well-timed price hikes and control cost and capex.

Cost inflation and price hike: Raw material cost went up 7-8% on a qoq basis. The company took a price hike of 8% in the truck bus radial (TBR) segment and 3% across other categories in India, and a price hike of 9% in the passenger car segment in Europe. It expects to take further price hikes in 2QFY23F and has already taken one in Jul 2022, which amounted to ~3% across categories. The company has hedged 80% of its power requirement cost in FY23F.

India business: Management commented that demand was impacted by inflation and steep price hikes. However, volume still grew 21% yoy, with a 13% yoy growth in the replacement segment. The price hikes, along with cost control measures, helped largely offset raw material cost inflation. It is witnessing some degree of slowdown in the commercial vehicle (CV) sector, especially in the OEM segment. However, management was quick to add that going forward it expects the CV cycle to pick up soon on the back of the government’s infrastructure initiatives. Management indicated that CV OEM orders for Sep/Oct 2022F were shaping up well. Exports did well and was the leader in volume growth. Capacity utilization was ~81%.

Europe business: The price hike in Europe in 1QFY23, coupled with the control over cost, helped largely negate raw material cost and energy cost inflation. Management commented that the passenger car tyre industry in Europe grew 5% yoy in 1QFY23. It expects strong demand to continue in Europe. It will continue to make inroads into the markets and grow. It indicated market share gains across segments with a focus on mix improvement. It mentioned that the premium segment continues to do well. The revenue in 1QFY23 stood at €151m (+32% yoy) and EBITDA was €22m with a margin of 14.4% (vs, a margin of 16.3% yoy). Capacity utilization was ~88%.

Capex: Management indicated that it would continue to be judicious on capex and instead focus on profitability and free cash flow. The capex incurred in 1QFY23 was Rs1.25bn and it expects FY23F capex for Indian operations to be Rs9bn and €40m for European operations. The company has the option of going for brownfield expansions in both Andhra Pradesh and Hungary when the need arises. For now, it will focus on debottlenecking through machine learning and artificial intelligence to attain 10-15% more capacity over time.

Other key data: Reifencom revenue was at €48m, with EBITDA margin at 5%. Consolidated net debt/EBITDA stood at 1.9 and management indicated that it expects to maintain it below 2.0. Net debt has gone up due to higher working capital requirement as inventory in the India business was higher due to demand fluctuation, and in Europe it had to prepare the inventory of winter tyres for the season that lasts from Aug to Nov.


 

Figure 1: Consolidated financial performance
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 

Figure 2: India business performance
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 

Figure 3: Standalone EBITDA margin performance
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 


 

Figure 4: Consolidated EBITDA margin performance
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 

Figure 5: Apollo Tyres’ regional EBIT margin trend
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 

Figure 6: Natural rubber prices corrected recently
SOURCE: BLOOMBERG, INCRED RESEARCH  

 

Figure 7: Demand trend for European replacement consumer tyres
NOTE: CONSUMER TYRES CONSIST OF PASSENGER CAR, SUV AND LCV TYRES
SOURCE: EUROPEAN TYRE & RUBBER MANUFACTURERS ASSOCIATION (ETRMA), INCRED RESEARCH  

 

Figure 8: Apollo Tyres’ consolidated mix by channel
SOURCE: INCRED RESEARCH, COMPANY REPORTS  
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 

Figure 9: Consolidated net debt (Rs m)
SOURCE: INCRED RESEARCH, COMPANY REPORTS  

 


 

Figure 10: Revision in our earnings estimates for the consolidated entity
SOURCE: INCRED RESEARCH ESTIMATES, COMPANY REPORTS  

 

Figure 11: Key drivers
SOURCE: INCRED RESEARCH ESTIMATES, COMPANY REPORTS  

 

Figure 12: Target price methodology
SOURCE: INCRED RESEARCH ESTIMATES, COMPANY REPORTS  

 

Figure 13: Forward P/BV valuation at mean level
SOURCE: BLOOMBERG, INCRED RESEARCH ESTIMATES, COMPANY REPORTS  
SOURCE: BLOOMBERG, INCRED RESEARCH ESTIMATES, COMPANY REPORTS  

 


 

BY THE NUMBERS

Profit & Loss
(Rs mn) Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
Total Net Revenue 172,006 209,475 249,742 284,345 318,961
Gross Profit 78,061 85,620 104,891 122,268 139,705
Operating EBITDA 26,011 25,740 30,064 34,825 39,437
Depreciation And Amortisation (13,150) (13,997) (15,315) (16,241) (17,517)
Operating EBIT 12,861 11,744 14,749 18,584 21,921
Financial Income/(Expense) (2,522) (3,209) (3,224) (3,250) (2,891)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI) 10,339 8,534 11,525 15,334 19,029
Exceptional Items
Pre-tax Profit 10,339 8,534 11,525 15,334 19,029
Taxation (3,005) (2,091) (2,881) (3,834) (4,757)
Exceptional Income - post-tax (3,833) (59)
Profit After Tax 3,502 6,384 8,644 11,501 14,272
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit 3,502 6,384 8,644 11,501 14,272
Recurring Net Profit 7,335 6,443 8,644 11,501 14,272
Fully Diluted Recurring Net Profit 7,335 6,443 8,644 11,501 14,272
Cash Flow
(Rs mn) Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
EBITDA 26,011 25,740 30,064 34,825 39,437
Cash Flow from Invt. & Assoc.
Change In Working Capital (549) (2,663) (11,937) (4,645) (7,269)
(Incr)/Decr in Total Provisions 12,117 374 1,460 1,550 1,350
Other Non-Cash (Income)/Expense
Other Operating Cashflow 1,908 1,235 1,272 1,335 1,429
Net Interest (Paid)/Received (4,430) (4,444) (4,496) (4,585) (4,320)
Tax Paid (2,068) (948) (2,305) (3,067) (3,806)
Cashflow From Operations 32,989 19,294 14,058 25,414 26,822
Capex (17,437) (20,877) (11,500) (16,500) (23,000)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow 4,773 872 (1,652) (1,510) (1,800)
Cash Flow From Investing (12,664) (20,005) (13,152) (18,010) (24,800)
Debt Raised/(repaid) (3,302) (3,160)
Proceeds From Issue Of Shares 63
Shares Repurchased
Dividends Paid (2,223) (3,176) (3,811) (4,446) (4,446)
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing (5,462) (6,335) (3,811) (4,446) (4,446)
Total Cash Generated 14,863 (7,046) (2,905) 2,958 (2,424)
Free Cashflow To Equity 17,022 (3,870) 906 7,404 2,022
Free Cashflow To Firm 24,754 3,733 5,402 11,989 6,342

BY THE NUMBERS…cont’d

Balance Sheet
(Rs mn) Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
Total Cash And Equivalents 22,359 15,313 12,408 15,366 12,942
Total Debtors 13,808 16,104 20,527 23,371 26,216
Inventories 33,185 41,554 50,633 56,090 62,918
Total Other Current Assets 13,637 10,539 12,500 14,200 16,200
Total Current Assets 82,989 83,510 96,067 109,027 118,276
Fixed Assets 173,057 179,938 176,123 176,382 181,865
Total Investments 195 399 439 483 531
Intangible Assets 2,204 2,158 2,158 2,158 2,158
Total Other Non-Current Assets
Total Non-current Assets 175,456 182,495 178,720 179,023 184,554
Short-term Debt 3,033 17,093 17,093 17,093 17,093
Current Portion of Long-Term Debt
Total Creditors 28,067 36,069 37,632 41,288 43,693
Other Current Liabilities 40,150 38,610 40,410 42,210 44,010
Total Current Liabilities 71,250 91,772 95,135 100,591 104,796
Total Long-term Debt 61,304 44,085 44,085 44,085 44,085
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities 61,304 44,085 44,085 44,085 44,085
Total Provisions 11,460 12,627 13,213 13,964 14,713
Total Liabilities 144,014 148,483 152,433 158,640 163,594
Shareholders’ Equity 114,431 117,521 122,355 129,410 139,236
Minority Interests
Total Equity 114,431 117,521 122,355 129,410 139,236
Key Ratios
(Rs mn) Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
Revenue Growth 6.6% 21.8% 19.2% 13.9% 12.2%
Operating EBITDA Growth 51.0% (1.0%) 16.8% 15.8% 13.2%
Operating EBITDA Margin 15.1% 12.3% 12.0% 12.2% 12.4%
Net Cash Per Share (Rs) (66.10) (72.22) (76.79) (72.13) (75.95)
BVPS (Rs) 180.18 185.04 192.65 203.76 219.23
Gross Interest Cover 2.90 2.64 3.28 4.05 5.07
Effective Tax Rate 29.1% 24.5% 25.0% 25.0% 25.0%
Net Dividend Payout Ratio 30.3% 49.3% 44.1% 38.7% 31.1%
Accounts Receivables Days 24.62 26.06 26.77 28.17 28.37
Inventory Days 126.76 110.13 116.15 120.17 121.16
Accounts Payables Days 99.38 94.50 92.86 88.87 86.52
ROIC (%) 5.0% 4.6% 5.6% 6.7% 7.7%
ROCE (%) 7.1% 6.3% 7.8% 9.5% 10.8%
Return On Average Assets 3.7% 3.3% 4.0% 4.8% 5.5%
Key Drivers
(Rs mn) Mar-21A Mar-22A Mar-23F Mar-24F Mar-25F
ASP (% chg, main prod./serv.) (0.2%) 9.9% 9.9% 3.7% 3.7%
Unit sales grth (%, main prod./serv.) 5.0% 15.0% 11.0% 9.0% 8.0%
SOURCES: INCRED RESEARCH, COMPANY REPORTS

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This report (including the views and opinions expressed therein, and the information comprised therein) has been prepared by Incred Research Services Private Ltd.(formerly known as Earnest Innovation Partners Private Limited) (hereinafter referred to as “IRSPL”). IRSPL is registered with SEBI as a Research Analyst vide Registration No. INH000007793. Pursuant to a trademark agreement, IRSPL has adopted “Incred Equities” as its trademark for use in this report.

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The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

IRSPL may have issued other reports (based on technical analysis, event specific, short term views etc.) that are inconsistent with and reach different conclusion from the information presented in this report.

Holding of Analysts/Relatives of Analysts, IRSPL and Associates of IRSPL in the covered securities, as on the date of publishing of this report

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analyst/

Analyst/

Relative

Entity/

Entity/

Associates

any financial interests in the company covered in this report (subject company) and nature of such financial interest

NO

NO

actual/beneficial ownership of 1% or more in securities of the subject company at the end of the month immediately preceding the date of publication of the research report

actual/beneficial ownership of 1% or more in securities of the subject company at the end of the month immediately preceding the date of publication of the research report

or date of the public appearance;

NO

NO

any other material conflict of interest at the time of publication of the research report

any other material conflict of interest at the time of publication of the research report

or at the time of public appearance

NO

NO

received any compensation from the subject company in the past twelve months

received any compensation from the subject company in the past twelve months

for investment banking or merchant banking or brokerage services or investment advisory or depository or distribution from the subject company in the last twelve months for products/services other than investment banking or merchant banking or broker- age services or investment advisory or depository or distribution from the subject company in the last twelve months

NO

NO

managed or co-managed public offering of securities for the subject company in the last twelve months

NO

NO

received any compensation or other benefits from the subject company or third party in connection with the research report

NO

NO

served as an officer, director or employee of the subject company

NO

NO

been engaged in market making activity for the subject company

NO

NO

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This report (including the views and opinions expressed therein, and the information comprised therein) has been prepared by Incred Research Services Private Ltd.(formerly known as Earnest Innovation Partners Private Limited) (hereinafter referred to as “IRSPL”). IRSPL is registered with SEBI as a Research Analyst vide Registration No. INH000007793. Pursuant to a trademark agreement, IRSPL has adopted “Incred Equities” as its trademark for use in this report.

The term “IRSPL” shall, unless the context otherwise requires, mean IRSPL and its affiliates, subsidiaries and related companies. This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IRSPL and its affiliates/group companies to registration or licensing requirements within such jurisdictions.

This report is being supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means; or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of IRSPL.

The information contained in this report is prepared from data believed to be correct and reliable at the time of issue of this report.

IRSPL is not required to issue regular reports on the subject matter of this report at any frequency and it may cease to do so or change the periodicity of reports at any time. IRSPL is not under any obligation to update this report in the event of a material change to the information contained in this report. IRSPL has not any and will not accept any, obligation to (i) check or ensure that the contents of this report remain current, reliable or relevant; (ii) ensure that the content of this report constitutes all the information a prospective investor may require; (iii) ensure the adequacy, accuracy, completeness, reliability or fairness of any views, opinions and information, and accordingly, IRSPL and its affiliates/group companies (and their respective directors, associates, connected persons and/or employees) shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.

Unless otherwise specified, this report is based upon reasonable sources. Such sources will, unless otherwise specified, for market data, be market data and prices available from the main stock exchange or market where the relevant security is listed, or, where appropriate, any other market. Information on the accounts and business of company(ies) will generally be based on published statements of the company(ies), information disseminated by regulatory information services, other publicly available information and information resulting from our research. Whilst every effort is made to ensure that statements of facts made in this report are accurate, all estimates, projections, forecasts, expressions of opinion and other subjective judgments contained in this report are based on assumptions considered to be reasonable as of the date of the document in which they are contained and must not be construed as a representation that the matters referred to therein will occur. Past performance is not a reliable indicator of future performance. The value of investments may go down as well as up and those investing may, depending on the investments in question, lose more than the initial investment. No report shall constitute an offer or an invitation by or on behalf of IRSPL and its affiliates/group companies to any person to buy or sell any investments.

The opinions expressed are based on information which are believed to be accurate and complete and obtained through reliable public or other non-confidential sources at the time made. (Information barriers and other arrangements may be established where necessary to prevent conflicts of interests arising. However, the analyst(s) may receive compensation that is based on his/their coverage of company(ies) in the performance of his/their duties or the performance of his/their recommendations. In reviewing this report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the duties of confidentiality, available on request.

The report is not a “prospectus” as defined under Indian Law, including the Companies Act, 2013, and is not, and shall not be, approved by, or filed or registered with, any Indian regulator, including any Registrar of Companies in India, SEBI, any Indian stock exchange, or the Reserve Bank of India. No offer, or invitation to offer, or solicitation of subscription with respect to any such securities listed or proposed to be listed in India is being made, or intended to be made, to the public, or to any member or section of the public in India, through or pursuant to this report.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

IRSPL may have issued other reports (based on technical analysis, event specific, short term views etc.) that are inconsistent with and reach different conclusion from the information presented in this report.

Holding of Analysts/Relatives of Analysts, IRSPL and Associates of IRSPL in the covered securities, as on the date of publishing of this report

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analyst/

Relative

Entity/

Associates

any financial interests in the company covered in this report (subject company) and nature of such financial interest

NO

NO

actual/beneficial ownership of 1% or more in securities of the subject company at the end of the month immediately preceding the date of publication of the research report

or date of the public appearance;

NO

NO

any other material conflict of interest at the time of publication of the research report

or at the time of public appearance

NO

NO

received any compensation from the subject company in the past twelve months

for investment banking or merchant banking or brokerage services or investment advisory or depository or distribution from the subject company in the last twelve months for products/services other than investment banking or merchant banking or broker- age services or investment advisory or depository or distribution from the subject company in the last twelve months

NO

NO

managed or co-managed public offering of securities for the subject company in the last twelve months

NO

NO

received any compensation or other benefits from the subject company or third party in connection with the research report

NO

NO

served as an officer, director or employee of the subject company

NO

NO

been engaged in market making activity for the subject company

NO

NO

Analyst declaration

·         The analyst responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and autonomously in an unbiased manner.

·         No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations(s) or view(s) in this report or based any specific investment banking transaction.

·         The analyst(s) has(have) not had any serious disciplinary action taken against him/her(them).

·         The analyst, strategist, or economist does not have any material conflict of interest at the time of publication of this report.

·         The analyst(s) has(have) received compensation based upon various factors, including quality, accuracy and value of research, overall firm performance, client feedback and competitive factors.

 

IRSPL and/or its affiliates and/or its Directors/employees may own or have positions in securities of the company(ies) covered in this report or any securities related thereto and may from time to time add to or dispose of, or may be materially interested in, any such securities.

IRSPL and/or its affiliates and/or its Directors/employees may own or have positions in securities of the company(ies) covered in this report or any securities related thereto and may from time to time add to or dispose of, or may be materially interested in, any such securities.

IRSPL and/or its affiliates and/or its Directors/employees may do and seek to do business with the company(ies) covered in this research report and may from time to time (a) buy/sell the securities covered in this report, from time to time and/or (b) act as market maker or have assumed an underwriting commitment in securities of such company(ies), and/or (c) may sell them to or buy them from customers on a principal basis and/or (d) may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) and/or (e) solicit such investment, advisory or other services from any entity mentioned in thisreport and/or (f) act as a lender/borrower to such company and may earn brokerage or other compensation. However, Analysts are forbidden to acquire, on their own account or hold securities (physical or uncertificated, including derivatives) of companies in respect of which they are compiling and producing financial recommendations or in the result of which they play a key part.

 

 

 

DISCLAIMER

This report (including the views and opinions expressed therein, and the information comprised therein) has been prepared by Incred Research Services Private Ltd.(formerly known as Earnest Innovation Partners Private Limited) (hereinafter referred to as “ IRSPL”). IRSPL is registered with SEBI as a Research Analyst vide Registration No. INH000007793. Pursuant to a trademark agreement, IRSPL has adopted “Incred Equities ” as its trademark for use in this report.

The term “IRSPL” shall, unless the context otherwise requires, mean IRSPL and its affiliates, subsidiaries and related companies. This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IRSPL and its affiliates/group companies to registration or licensing requirements within such jurisdictions.

This report is being supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means; or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of IRSPL.

The information contained in this report is prepared from data believed to be correct and reliable at the time of issue of this report.

IRSPL is not required to issue regular reports on the subject matter of this report at any frequency and it may cease to do so or change the periodicity of reports at any time. IRSPL is not under any obligation to update this report in the event of a material change to the information contained in this report. IRSPL has not any and will not accept any, obligation to (i) check or ensure that the contents of this report remain current, reliable or relevant; (ii) ensure that the content of this report constitutes all the information a prospective investor may require; (iii) ensure the adequacy, accuracy, completeness, reliability or fairness of any views, opinions and information, and accordingly, IRSPL and its affiliates/group companies (and their respective directors, associates, connected persons and/or employees) shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.

Unless otherwise specified, this report is based upon reasonable sources. Such sources will, unless otherwise specified, for market data, be market data and prices available from the main stock exchange or market where the relevant security is listed, or, where appropriate, any other market. Information on the accounts and business of company(ies) will generally be based on published statements of the company(ies), information disseminated by regulatory information services, other publicly available information and information resulting from our research. Whilst every effort is made to ensure that statements of facts made in this report are accurate, all estimates, projections, forecasts, expressions of opinion and other subjective judgments contained in this report are based on assumptions considered to be reasonable as of the date of the document in which they are contained and must not be construed as a representation that the matters referred to therein will occur. Past performance is not a reliable indicator of future performance. The value of investments may go down as well as up and those investing may, depending on the investments in question, lose more than the initial investment. No report shall constitute an offer or an invitation by or on behalf of IRSPL and its affiliates/group companies to any person to buy or sell any investments.

The opinions expressed are based on information which are believed to be accurate and complete and obtained through reliable public or other non-confidential sources at the time made. (Information barriers and other arrangements may be established where necessary to prevent conflicts of interests arising. However, the analyst(s) may receive compensation that is based on his/their coverage of company(ies) in the performance of his/their duties or the performance of his/their recommendations. In reviewing this report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additional information is, subject to the duties of confidentiality, available on request.

The report is not a “prospectus” as defined under Indian Law, including the Companies Act, 2013, and is not, and shall not be, approved by, or filed or registered with, any Indian regulator, including any Registrar of Companies in India, SEBI, any Indian stock exchange, or the Reserve Bank of India. No offer, or invitation to offer, or solicitation of subscription with respect to any such securities listed or proposed to be listed in India is being made, or intended to be made, to the public, or to any member or section of the public in India, through or pursuant to this report.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

The research analysts, strategists or economists principally responsible for the preparation of this research report are segregated from the other activities of IRSPL. Information barriers and other arrangements have been established, as required, to prevent any conflicts of interests.

IRSPL may have issued other reports (based on technical analysis, event specific, short term views etc.) that are inconsistent with and reach different conclusion from the information presented in this report.

Holding of Analysts/Relatives of Analysts, IRSPL and Associates of IRSPL in the covered securities, as on the date of publishing of this report

Analyst/ Relative Entity/ Associates
any financial interests in the company covered in this report (subject company) and nature of such financial interest NO NO
actual/beneficial ownership of 1% or more in securities of the subject company at the end of the month immediately preceding the date of publication of the research report or date of the public appearance; NO NO
any other material conflict of interest at the time of publication of the research report or at the time of public appearance NO NO
received any compensation from the subject company in the past twelve months for investment banking or merchant banking or brokerage services or investment advisory or depository or distribution from the subject company in the last twelve months for products/services other than investment banking or merchant banking or broker- age services or investment advisory or depository or distribution from the subject company in the last twelve months NO NO
managed or co-managed public offering of securities for the subject company in the last twelve months NO NO
received any compensation or other benefits from the subject company or third party in connection with the research report NO NO
served as an officer, director or employee of the subject company NO NO
been engaged in market making activity for the subject company NO NO
Analyst declaration
  • The analyst responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and autonomously in an unbiased manner.
  • No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations(s) or view(s) in this report or based any specific investment banking transaction.
  • The analyst(s) has(have) not had any serious disciplinary action taken against him/her(them). • The analyst, strategist, or economist does not have any material conflict of interest at the time of
  • publication of this report.
  • The analyst(s) has(have) received compensation based upon various factors, including quality, accuracy and value of research, overall firm performance, client feedback and competitive factors.

IRSPL and/or its affiliates and/or its Directors/employees may own or have positions in securities of the company(ies) covered in this report or any securities related thereto and may from time to time add to or dispose of, or may be materially interested in, any such securities.

IRSPL and/or its affiliates and/or its Directors/employees may do and seek to do business with the company(ies) covered in this research report and may from time to time (a) buy/sell the securities covered in this report, from time to time and/or (b) act as market maker or have assumed an underwriting commitment in securities of such company(ies), and/or (c) may sell them to or buy them from customers on a principal basis and/or (d) may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) and/or (e) solicit such investment, advisory or other services from any entity mentioned in thisreport and/or (f) act as a lender/borrower to such company and may earn brokerage or other compensation. However, Analysts are forbidden to acquire, on their own account or hold securities (physical or uncertificated, including derivatives) of companies in respect of which they are compiling and producing financial recommendations or in the result of which they play a key part.