2QFY2013 Result Update | Auto Ancillary

November 5, 2012

CEAT
Performance Highlights
Quarterly highlights (Standalone)
Y/E March (` cr) Net Sales EBITDA EBITDA margin (%) Adj. PAT
Source: Company, Angel Research

BUY
CMP Target Price
Investment Period
2QFY12 1,107 62 5.6 6 % chg (yoy) 6.0 26.3 107bp 199 1QFY13 1,187 105 8.8 26 % chg (qoq) (1.2) (25.5) (218)bp (35)

`110 `163
12 Months

2QFY13 1,173 78 6.7 17

Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Tyre 376 951 0.7 125/66 82,540 10 18,763 5,704 CEAT.BO CEAT@IN

Ceat posted sluggish results for 2QFY2013 primarily due to contraction in operating margins on a sequential basis led by increase in employee (wage hikes and bonus payouts) and other expenditure (higher advertising spends). During the quarter, Ceat registered an exceptional expense of `14cr to account for the change in policy of recognizing provision for warranty from actual claim basis to expected cost basis. Further, the company also announced a VRS scheme for the employees at the Bhandup plant and expects to incur a charge of `15cr related to it in 3QFY2013. We retain our positive view on Ceat and believe that the company will continue to report a strong performance led by gradual ramp-up at the Halol plant and stable raw-material prices. However a slowdown in demand remains a concern as the replacement demand has not picked up as anticipated. We maintain our Buy rating on the stock. Margins contract on a sequential basis: For 2QFY2013, Ceat reported a modest growth of 6% yoy (down 1.2% qoq) in net sales to `1,173cr primarily due to flat growth in volumes at 51,000MT. The volume performance was impacted on account of a slowdown in replacement as well as export markets, which account for ~80% of revenues. The net average realization, however, improved 4.8% yoy (flat qoq) due to superior product-mix. On a sequential basis, the EBITDA margin declined by 210bp to 6.7% mainly due to 110bp qoq increase in other expenditure (led by higher ad spends and higher power costs) and 80bp increase in employee expenses (wage hikes and bonus for full year). On a yoy basis, margins improved by only 107bp as benefits of lower raw-material cost (down 380bp as a percentage of sales) were negated by a 220bp increase in other expenses as a percentage of sales. The adjusted net profit for the quarter stood at `17cr as against `26cr in 1QFY2013. Outlook and valuation: At `110, the stock is trading at an attractive valuation of 2.7x FY2014E earnings. We retain our Buy rating on the stock with a target price of `163, valuing the stock at 4x FY2014E earnings.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 52.9 19.0 1.6 26.5

Abs. (%) Sensex CEAT

3m 9.1 10.1

1yr 6.8 48.3

3yr 16.8 (27.9)

Key financials (Standalone)

Y/E March (` cr)
Net Sales % chg Net Profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2011
3,499 24.6 28 (83.3) 4.0 8.0 16.9 0.6 4.3 7.3 0.3 8.2

FY2012
4,472 27.8 10 (64.8) 5.6 2.8 49.9 0.6 1.5 10.9 0.3 5.3

FY2013E
4,989 11.6 93 856.6 8.2 27.1 4.1 0.5 13.2 17.4 0.3 3.4

FY2014E
5,634 12.9 140 50.5 8.5 40.8 2.7 0.4 17.2 19.1 0.2 2.8

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

CEAT | 2QFY2013 Result Update

Exhibit 1: Financial performance (Standalone)

Y/E March (` cr) Volume (MT) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of traded goods (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT Adjusted PAT Adj. PATM Equity capital (cr) Reported EPS (`) Adjusted EPS (`)
Source: Company, Angel Research

2QFY13 51,000 1,173 816 69.6 70 6.0 15 1.3 194 16.5 1,095 78 6.7 50 20 9 18 (14) 4 0.3 1 32.8 3 17 0.2 34.2 0.8 4.9

2QFY12 50,600 1,107 814 73.5 59 5.4 13 1.2 159 14.3 1,045 62 5.6 48 17 12 8 8 0.7 3 32.4 6 6 0.5 34.2 1.6 1.6

% chg (yoy) 0.8 6.0 0.2 17.6 20.0 22.0 4.8 26.3 3.1 13.1 (23.0) 118.4 (50.7) (50.2) (51.0) 199.3

1QFY13 51,500 1,187 824 69.4 62 5.2 14 1.2 182 15.4 1,082 105 8.8 53 19 5 38 38 3.2 12 32.4 26 26 2.2 34.2

% chg (qoq) (1.0) (1.2) (0.9) 12.6 10.8 6.2 1.2 (25.5) (6.6) 1.6 67.5 (52.4) (89.3) (89.2) (89.3) (34.8)

1HFY13 102,500 2,360 1,640 69.5 132 5.6 29 1.2 376 15.9 2,177 183 7.8 103 39 14 56 (14) 42 1.8 14 32.5 29 43 1.2 34.2

1HFY12 102,100 2,184 1,666 76.3 116 5.3 26 1.2 319 14.6 2,126 57 2.6 90 33 15 (51) (3) (54) (2.5) (17) 32.4 (36) (33) (1.7) 34.2 (10.6) (9.7)

% chg (yoy) 0.4 8.1 (1.6) 13.7 13.5 17.9 2.4 220.0 14.6 17.5 (2.5) -

(51.0) 199.3

7.5 7.5

(89.3) (34.8)

8.3 12.4

Modest top-line growth of 6% yoy due to flat volumes: For 2QFY2013, standalone net sales registered a modest growth of 6% yoy (down 1.2% qoq) to `1,173cr driven largely by increase in net average realization (up 4.8% yoy). The growth in the net average realization was led by a superior product-mix with higher share of radial tyres in total volumes. The total volumes in tonnage terms though posted a flat growth at 51,000MT led by weak demand in the replacement segment. Export revenue too registered a decline of 3.7% yoy to `260cr due to weakness in Latin America and European markets. While replacement sales accounted for 54% (61% in 1QFY2013) of total volumes during the quarter; OEM and exports accounted for 24% (19% in 1QFY2013) and 22% (20% in 1QYFY2013) respectively. During 2QFY2013, the capacity at the Halol plant remained at 1QFY2013 levels of 90TPD as the company is skeptical about increasing the supply amidst a slowdown in demand. However, Ceat plans to ramp-up the capacity to 150TPD at Halol by the end of 4QFY2013. The Halol plant contributed 15% of total volumes during the quarter (flat qoq).

November 5, 2012

CEAT | 2QFY2013 Result Update

Exhibit 2: Net sales driven by increase in net average realization

(` cr) 1,400 1,200 1,000 800 600 400 200
25.2 22.1 18.8 10.3 6.0

Net sales (LHS)

Net sales growth (RHS)

(%) 1,173 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0

843

895

998

1,077
38.5

1,107

1,222 1,064

1,187

31.4 27.8 22.5

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

Source: Company, Angel Research

Operating margins decline sequentially to 6.7%: On the operating front, the EBITDA margin declined 210bp sequentially to 6.7% mainly due to 110bp qoq increase in other expenditure (led by higher ad spends and higher power coss) and 80bp increase in employee expenses (wage hikes and bonus for full year). Hence the operating profit declined 25.5% qoq to `78cr. On a yoy basis though, margins improved by only 107bp as benefits of lower raw-material cost (down 380bp as a percentage fo sales) were negated by a 220bp increase in other expenses as a percentage of sales.

Exhibit 3: Average natural rubber price trend

(`/kg) 250 200 150 100 50 0
136 78 98 102 72 142 119 165 177 195 225 229 211 203 191 193

Exhibit 4: EBITDA margin contracts sequentially

(%) 90.0 80.0
180

72.7

74.0

EBITDA margin 80.6 78.9

Raw material cost/sales 75.0 74.3 71.2 71.0 71.4

70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 5.2 3.8 1.9 (0.4) 5.6 6.4 10.6 8.8 6.7

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

2QFY09

4QFY09

2QFY10

4QFY10

2QFY11

4QFY11

2QFY12

4QFY12

2QFY13

(10.0)

Source: Company, Angel Research

Source: Company, Angel Research

Adjusted net profit at `17cr: During the quarter, Ceat recorded an exceptional expense of `14cr due to change in policy of recognizing provision for warranty from actual claim basis to expected cost based on past trends. Adjusted for the same, net profit witnessed a decline of 34.8% qoq to `17cr mainly due to margin contraction at the operating level. On a yoy basis though, net profit surged (to `17cr as against `6cr in 2QFY2012).

November 5, 2012

2QFY13

CEAT | 2QFY2013 Result Update

Exhibit 5: Adjusted net profit at `17cr

(` cr) 50 40 30 20 10 0 (10) (20) (30) (40) (50)
Net profit (LHS) Net profit margin (RHS)

(%) 4.0 3.0 17 1.4 2.0 1.0 0.0 (1.0) (2.0) (3.0) (4.0) (5.0)

3.4 1.8 15 1.2 11 0.5 6 0.2 2 41 26 2.2

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

(1.2)

(12)

(3.9) (42)

Source: Company, Angel Research

Conference call Key highlights

Ceat plans to incur a capital expenditure (capex) of `250cr in setting up a new 65TPD cross-ply facility in Bangladesh which is expected to commence production from 1QFY2015. Around `40-`50cr of the planned capex towards the new plant will be incurred in FY2013E and the remaining will be incurred in FY2014E. The company is currently in the due diligence process of finalizing the land. The company intends to incur maintenance capex of `50cr in FY2013E. The management is targeting to increase its presence in the higher margin two-wheeler tyres where there is less competition. The company has managed to increase its market share in the two-wheeler tyre segment to ~18% from ~14% in 1QFY2013. Around 30% of the raw-material requirement of the company is currently imported. The company reported a 14% yoy growth (14% qoq) to `106cr in its Sri Lanka operations with EBITDA margins at 17.5%. The net profit surged 95% yoy (66% qoq) to `12cr. The total volumes sold during the quarter stood at ~4,250MT. Ceat enjoys ~50% market share in the replacement segment in Sri Lanka. The current capacity stands at 60TPD and is operating at 100% utilization levels. The company has announced a VRS scheme for employees at the Bhandup plant. The management believes that out of the 1,800 employees at the plant, around 180-200 are likely to opt for VRS. The impact of the same could be around `15cr which would be reflected in 3QFY2013 results. The management stated that the consolidated debt has been reduced by `60cr to `1,350cr due to working capital efficiency which has resulted in flat interest expense during the quarter.

November 5, 2012

2QFY13

CEAT | 2QFY2013 Result Update

Investment arguments
Tyre industry Set for a structural shift: Currently, manufacturing radial tyres is far more capital intensive than cross-plys. The investment per tpd for radial tyres is 3.2x of cross-ply at `6.1cr/tpd. On the other hand, the selling price of radial tyres is around 20% higher than cross-ply tyres. Taking into account the difference in capital requirements and the consequent impact on asset turnover, interest cost and depreciation to generate a similar RoCE and RoE, tyre companies would need to earn EBITDA margins of around 21% compared to around 9% being earned on cross-ply tyres. Thus, higher capital requirements will help protect margins from upward-bound input costs, as the business model evolves bearing in mind the final RoE rather than margins. With the sector set for a structural shift and apparent pricing flexibility, it will result in an improvement in RoCE and RoE of tyre manufacturers going forward. Volume growth to benefit from capacity expansion: Ceat is ramping up its radial capacity at the Halol plant to 150TPD, which is likely to be fully operational by 4QFY2013. With the completion of the proposed expansion, the product mix of truck: non-truck is likely to improve to 55:45 resulting in a better product mix, thereby fetching better margins. Increasing focus on exports: Ceat has been increasingly focusing on exports, especially the high-margin specialty tyres, in a bid to offset volatility in its domestic tyre business in the long run.

Outlook and valuation

We retain our positive view on Ceat and believe that the company will continue to report a strong performance led by gradual ramp-up at the Halol plant and stable raw-material prices. However a slowdown in demand remains a concern as the replacement demand has not picked up as anticipated. Consequently, we estimate Ceat to post an EPS of `40.8 in FY2014E. At `110, the stock is trading at an attractive valuation of 2.7x FY2014E earnings. We retain our Buy rating on the stock with a price target of `163, valuing the stock at 4x FY2014E earnings. Key downside risks to our call: Any rise in input costs, increasing competitive intensity with major players diversifying globally and lower-than-anticipated growth in replacement tyre demand pose downside risks to our estimates.

November 5, 2012

CEAT | 2QFY2013 Result Update

Exhibit 6: One-year forward P/BV band

(`) 300 250 200 150 100 50 0 Share Price (`) 0.2x 0.5x 0.8x 1.1x

Exhibit 7: One-year forward EV/EBITDA band

(` cr) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 EV (` cr) 2.0x 4.0x 6.0x 8.0x

Jun-06

Jan-04

Jan-08

Jun-10

Aug-05

Mar-07

Aug-09

Nov-04

Nov-08

Mar-11

Apr-03

Jan-12

Nov-12

Jun-06

Jan-04

Jan-08

Jun-10

Aug-05

Mar-07

Aug-09

Nov-04

Nov-08

Mar-11

Apr-03

Jan-12

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 8: Auto Ancillary Recommendation summary

Company Apollo Tyres* CEAT JK Tyre* Reco. Buy Buy Buy CMP (`) 85 110 117 Tgt. price (`) 103 163 165 Upside (%) 21.6 48.4 41.1 P/E (x) FY13E 6.6 4.1 3.1 FY14E 5.6 2.7 2.8 EV/EBITDA (x) FY13E 4.2 3.4 5.2 FY14E 3.6 2.8 4.3 RoE (%) FY13E 20.6 13.2 18.8 FY14E 20.3 17.2 17.8 FY11-14E EPS CAGR (%) 36.3 279.5 -

Source: Company, Angel Research; Note: *Consolidated

Company background
Ceat, a part of the RPG Group, is amongst the leading tyre manufacturers in the country with an overall market share of ~12%. The companys manufacturing facilities are located in Bhandup, Nashik and Halol. The company has an overall production capacity of 615TPD (including outsourced). The company exports to countries across Asia, Africa, Europe and America. Exports constitute ~20% of Ceat's total volumes. The company has recently acquired the global rights of the Ceat brand from Italian tyre maker Pirelli - this will enable the company to expand its global presence. Ceat also operates in Sri Lanka through a JV and has a ~50% share in Sri Lanka's tyre market.

November 5, 2012

Nov-12

CEAT | 2QFY2013 Result Update

Profit and loss statement (Standalone)

Y/E March (` cr) Total operating income % chg Total expenditure Net raw material costs Other mfg costs Employee expenses Other EBITDA % chg (% of total op. income) Depreciation & amortization EBIT % chg (% of total op. income) Interest and other charges Other income Recurring PBT % chg Extraordinary items PBT (reported) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of total op. income) Basic EPS (`) Adj. EPS (`) % chg FY2009 FY2010 FY2011 FY2012 2,366 1.7 2,343 1,799 211 159 175 23 1.0 26 (2) (0.1) 84 49 (37) (37) (21) 57.1 (16) (16) (0.7) (4.7) (4.6) 2,807 18.6 2,511 1,869 253 190 200 296 10.5 27 269 9.6 72 42 239 239 74 31.0 165 165 5.9 48.2 48.3 3,499 24.6 3,359 2,594 306 212 248 139 (52.9) 4.0 34 105 (60.9) 3.0 100 28 33 (86.1) (5) 39 11 28.5 22 28 (83.3) 0.8 6.5 8.0 (83.3) 4,472 27.8 4,220 3,336 372 236 275 252 81.2 5.6 70 182 73.0 4.1 192 20 10 (70.5) (2) 12 2 18.8 8 10 (64.8) 0.2 2.2 2.8 (64.8) FY2013E FY2014E 4,989 11.6 4,581 3,578 419 269 314 408 61.7 8.2 81 327 79.8 6.6 214 25 138 1,314.7 138 46 33.0 93 93 856.6 1.9 27.1 27.1 856.6 5,634 12.9 5,156 4,029 470 304 352 479 17.3 8.5 85 394 20.5 7.0 214 28 209 50.5 209 69 33.0 140 140 50.5 2.5 40.8 40.8 50.5

(88.1) 1,178.1

November 5, 2012

CEAT | 2QFY2013 Result Update

Balance sheet statement (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders Funds Total loans Deferred tax liability Other long term liabilities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Investments Long term loans and advances Other noncurrent assets Current assets Cash Loans & advances Other Current liabilities Net current assets Total Assets 1,234 459 775 20 43 819 202 79 538 507 312 1,150 1,256 487 769 234 59 1,032 140 109 782 790 241 1,303 1,882 520 1,361 107 87 22 1,222 48 126 1,048 1,212 10 1,586 2,112 588 1,524 13 74 8 1,369 33 143 1,192 1,229 139 1,759 2,161 669 1,492 65 84 8 1,682 131 200 1,352 1,333 349 1,998 2,258 753 1,505 68 90 8 1,916 164 225 1,527 1,455 462 2,132 1,150 1,303 34 454 488 645 16 34 594 629 654 20 34 615 649 904 24 1 8 1,586 34 622 656 1,071 22 1 8 1,759 34 711 745 1,221 22 1 8 1,998 34 845 879 1,221 22 1 8 2,132 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

November 5, 2012

CEAT | 2QFY2013 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in working capital Others Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in fixed assets (Inc.)/Dec. in investments Other income Cash Flow from Investing Issue of equity Inc./(Dec.) in loans Dividend paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in cash Opening Cash balances Closing Cash balances FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E (37) 26 47 123 (49) 21 131 (36) (33) 49 (19) 168 0 (119) 48 160 42 202 239 27 (260) 343 (42) (74) 233 (237) (16) 42 (210) 9 0 (93) (84) (61) 202 140 39 34 131 80 (28) (11) 244 (499) (28) 28 (498) 250 16 (104) 162 (92) 140 48 12 70 (144) 156 (20) (2) 72 (136) 12 20 (104) 167 8 (16) 159 (15) 48 33 138 81 (112) (25) (46) 36 (100) (9) 25 (85) 150 4 146 98 33 131 209 85 (79) (28) (69) 117 (100) (6) 28 (78) 0 6 (6) 33 131 164

November 5, 2012

CEAT | 2QFY2013 Result Update

Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.) 0.8 17.3 (0.0) 0.7 1.5 3.7 1.2 5.5 1.0 1.5 3.8 0.9 1.4 2.5 1.5 1.1 2.0 1.8 1.9 43 48 78 22 2.3 41 45 81 14 2.2 51 45 102 3 2.2 47 45 98 3 2.3 52 47 93 12 2.7 52 47 89 17 (0.2) (0.3) (3.2) 21.9 24.4 29.6 7.3 7.2 4.3 10.9 11.0 1.5 17.4 18.3 13.2 19.1 21.0 17.2 (0.1) 0.4 2.5 (0.1) 6.4 0.8 (5.5) 9.6 0.7 2.8 18.5 7.7 0.8 26.8 3.0 0.7 2.7 5.9 9.2 1.0 2.7 4.1 0.8 2.9 9.5 15.8 1.3 1.2 6.6 0.7 2.9 12.8 12.5 1.4 13.1 7.0 0.7 3.1 14.4 11.7 1.2 17.7 (4.7) (4.6) 2.8 0.0 142.6 48.2 48.3 55.0 4.0 183.6 6.5 8.0 18.0 2.0 189.6 2.2 2.8 23.4 1.0 191.7 27.1 27.1 50.8 1.0 217.6 40.8 40.8 65.5 1.5 256.7 39.6 0.8 0.0 0.3 33.6 0.7 2.3 2.0 0.6 3.6 0.3 2.8 0.6 16.9 6.1 0.6 1.8 0.3 8.2 0.7 49.9 4.7 0.6 0.9 0.3 5.3 0.8 4.1 2.2 0.5 0.9 0.3 3.4 0.7 2.7 1.7 0.4 1.4 0.2 2.8 0.6 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

November 5, 2012

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CEAT | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

CEAT No Yes No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 5, 2012

11