Budget FY2016

Research

Budget FY2016
Strong positives over the medium term

Price Performance
28 Feb15
Nifty

1M 3M 1Y
(%) (%) (%)

8,902 -0.1

3.7 41.8

Sensex

29,362 -0.7

2.3 39.0

BSE Midcap

10,811

5.3 66.3

0.0

Indices Performance
28
Feb15

+ /1M

+ /YTD

(%)

(%)

Bank Nifty

19,691

-3.9

5.1

CNX Auto

8,935

-1.2

7.9

CNX Energy

8,696

-1.8

0.6

CNX Pharma

11,799

1.9

7.8

CNX Finance

8,033

-2.9

7.6

CNX FMCG

21,102

0.4

4.9

CNX IT

12,660

7.2

12.9

CNX Media

2,231

-6.8

-6.5

CNX PSU Bank

3,858

-12.7

-9.6

239

6.3

17.9

3,307

0.8

8.8

CNX Realty
CNX Infra

The contraction in the Fiscal Deficit to 4.1% of GDP and, the likely further
decline to 3% in three years can be a strong enabler of positive changes e.g.
holding inflation down over the medium term. A few other proposals too have
potentially strong medium term positive effects. The plug-and-play model
could catalyse projects in power and other infrastructure sectors. The move
towards lower and simpler tax regulations, coupled with the above, could add to
Indias attraction as a destination for manufacturing FDI. These positives are
likely to prevail over the negative effects of proposals that raise the effective tax
rate in the near term and of expectations unmet.
Tax revenue grew at half the 20% budgeted pace: All segments of tax
revenue are seen to grow below budget in FY2015, particularly Service tax and
Excise. The exception is Income tax that grew by 15% y-o-y.
And yet, the deficit target was reached: The Fiscal Deficit for FY2015 is
now estimated at INR5.1 trillion. This would be 2% higher than that for FY2014
but, 3% lower than the budgeted amount of INR5.3 trillion. Total Expenditure
for FY2015 was restricted to 6% below budget. Plan Expenditure cut by 20%,
Non-Plan Capital Expenditure by 13% and Interest Expenditure by 4%.
Deficit compression is likely to be sustained: The elasticity in several items
of expenditure is likely to persist. The budget for FY2016 projects a further fall
in Plan Expenditure and 9% y-o-y fall in Subsidies. After budgeting for 25%
growth in Excise and Service tax and only 10% growth in Corporation Tax the
Fiscal Deficit for FY2016 is projected to rise 8% y-o-y, well below the projected
growth in nominal GDP.
Several medium-term positives outweigh a few near-term negatives:
FY2016 corporate earnings would be impacted by the rise in surcharge on taxes.
The uptick in Service tax and Excise duty too could dampen sentiment on
equities. These negatives forces are likely to be offset by the positive effect of
the anticipated acceleration in economic activity in FY2016. Other proposals in
this budget, such as the decline in the fiscal deficit ratio, the move towards a
lower and simpler tax regime and the stimulus to infrastructure that would be
provided by plug-and-play projects could create conditions that extend the
high-growth phase beyond FY2016. The combination of USD2trillion economy
growing at c8%, with improving public finances, falling inflation and simpler tax
rules can draw in larger FDI into manufacturing.

Anand Shanbhag
Email: anand.shanbhag@tatacapital.com
Tel: +91 22 6606 9402

March
2015
02 02
March
2015

Risk factors: Conditions that may follow the planned withdrawal of stimulus in
the advanced economies may impact global interest rates and capital flows. A
significant rise in global energy prices may have a large impact on the
expenditure projected in the budget.

Budget FY2016

Summary of the budget

Year ending

Mar11

Mar12

Mar13

Mar14

Mar15

Mar16

INRbn

Actual

Actual

Actual

Actual

RE

BE

Receipt

8,237

7,884

9,202

10,566

11,685

12,218

5,699

6,298

7,419

8,159

9,085

9,198

Corporation Tax

2,987

3,228

3,563

3,947

4,261

4,706

Taxes on Income

1,466

1,703

2,015

2,429

2,786

3,274

10

10

Customs

1,358

1,493

1,653

1,721

1,887

2,083

Union Excise Duties

1,383

1,456

1,765

1,702

1,855

2,298

710

975

1,326

1,548

1,681

2,098

20

28

31

31

34

36

Tax revenue

Wealth Tax

Service Tax
Others
Less - NCCD transfer
Less - State's share

Non-tax revenue
Expenditure

Non-Plan Revenue
Defence Services

-39

-40

-44

-47

-51

-57

-2,193

-2,554

-2,915

-3,182

-3,378

-5,240

2,186

1,217

1,374

1,989

2,178

2,217

11,973

13,044

14,104

15,594

16,812

17,775

4,925

5,389

6,011

6,448

7,105

7,499

921

1,030

1,113

1,244

1,404

1,521

1,734

2,179

2,571

2,546

2,667

2,438

Grants to State and U.T. Gov.

498

515

480

606

803

1,086

Pensions

574

612

695

749

817

885

Police
Other General Services (Organs of State, tax collection, external affairs
etc.)
Social Services (Education, Health, Broadcasting)

273

331

373

421

481

518

169

192

218

238

258

309

350

194

212

256

256

291

Economic Services (Agriculture,Industry, Power, Science & Tech.)

281

218

222

250

271

290

Other

125

117

129

139

149

160

2,340

2,732

3,132

3,743

4,114

4,561

Subsidies

Non-Plan Interest
Non-Plan Capital

918

799

824

871

913

1,062

Defence Services

621

679

705

791

820

946

Others

298

120

119

80

94

116

3,142

3,337

3,292

3,527

3,669

3,300

648

786

844

1,006

1,011

1,353

Revenue Deficit

2,523

3,943

3,643

3,570

3,625

3,945

Fiscal Deficit

3,736

5,160

4,902

5,029

5,126

5,556

Plan Revenue
Plan Capital

02 March 2015

Budget FY2016

Deficit compression likely to be sustained

Fiscal deficit for the year ending March 2015 is now estimated at INR5.1 trillion, 3% below budget
and only 2% growth over FY2014. Tax revenue for FY2015 is now estimated to grow 10% y-o-y,
half the budgeted growth. The deficit was held in check by severe cuts in the Plan Expenditure
and in Non-Plan Capital Expenditure. Interest expenditure too grew less than budget. Non-Plan
Revenue expenditure grew more than the budgeted amount due to Defence and Subsidies. The
budget for FY2016 projects 25% growth in Excise and Service tax and only 10% growth in
Corporation Tax. It projects a further fall in Plan Expenditure and 9% y-o-y fall in Subsidies. The
Fiscal deficit for FY2016 is projected to rise 8% y-o-y. This would be well below the growth in
nominal GDP.
Tax revenue growth in FY2015 was half the budgeted 20%
Six segments of tax that provide revenue to the Central Government, viz.
Corporation Tax, Income Tax, Wealth Tax, Customs, Excise and Service Tax are
now estimated to have grown 10% y-o-y to contribute an aggregate INR12.5
trillion for the year ending March 2015. The budgeted revenue was INR13.6
trillion, representing a targeted growth of 20% y-o-y.
Service tax and Excise have
grown far slower than
budgeted. Corporation tax
and Customs too grow
slower than budgeted.

The largest variance from the budgeted revenue was in Service Tax, that is now
estimated at INR1,681bn (+9% y-o-y) compared with the budget of INR2,160bn
(+40% y-o-y). Excise is now estimated at INR1,855bn (+9% y-o-y) compared
with the budget of INR2,071bn (+22% y-o-y). Revenue from Corporation Tax
and from Customs is estimated to grow 8% and 10% y-o-y; about 6% lower
than budgeted growth. Income Tax is estimated to grow 15% y-o-y for FY2015,
only 2% lower than budgeted growth.

And yet, the Fiscal Deficit target was reached

The Fiscal Deficit for FY2015 is now estimated at INR5.1 trillion. This would be
2% higher than that for FY2014 but, 3% lower than the budgeted amount of
INR5.3 trillion.
Plan Expenditure cut by
20%,
Non-Plan
Capital
Expenditure
by
13%.
Interest Expenditure 4%
below budget.

The success in reaching the targeted deficit was the result of restricting Plan
Expenditure (c30% of total expenditure) to 20% below budget and Non-Plan
Capital Expenditure (c6% of total) to 13% below budget. Non-Plan Interest
Expenditure (c24% of total) is reported to be 4% below budget.
Non-Plan Revenue Expenditure is the largest segment comprising over 40% of
total expenditure of the Central Government. It is now estimated to have grown
10% y-o-y for FY2015, higher than the budgeted 7% growth. Subsidies, the
largest item accounting for more than a third of the Non-Plan Revenue
Expenditure grew 5% y-o-y, compared with budgeted growth of 2% y-o-y.

FY2016 revenue to be led by a recovery in GDP growth

Gross tax revenue from the six segments is budgeted to grow 16% y-o-y over
FY2015. This is not a particularly aggressive growth compared with the 10% y-o-

02 March 2015

Budget FY2016

y growth for FY2015 and is modest compared with the 20% growth that had
been budgeted for FY2015.
FY2016 growth in Service
tax and Excise could
accelerate as the GDP
recovers. Lower target for
Corporation
Tax
may
reflect slower rise in
profitability.

The budgeted growth in Excise (24% y-o-y) and in Service Tax (25% y-o-y)
could be realized if the real growth of Indias GDP does recover to c8%, as
projected by a few global institutions and by credit rating agencies. Revenue
from Corporation Tax (10% y-o-y) and from Customs (10% y-o-y) is modest and
virtually unchanged from the actual growth for FY2015. The targeted growth in
Corporation Tax may also suggest that corporate profitability is not expected to
materially improve in FY2016. Income Tax (on individuals and non-corporates) is
budgeted to grow 18% y-o-y, a small rise from the 15% growth for FY2015.
Net tax revenue is projected to grow by only 1% y-o-y for FY2016 because the
budgeted transfer to States would grow 55% y-o-y. The States share of gross
tax revenue is projected to rise to 36% in FY2016 from an average of 28% in the
preceding five years.
The budget projects c5% y-o-y fall in Plan Expenditure for FY2016. Non-Plan
Capital Expenditure is budgeted to grow 16% y-o-y while Plan Interest
Expenditure is projected to grow 11% y-o-y. Non-Plan Revenue Expenditure is
budgeted to grow 6% y-o-y despite a 9% fall in Subsidies. Grants to States and
Union Territories are budgeted to grow 35% y-o-y.
The budgeted Fiscal Deficit for FY2016 would rise by 8% y-o-y to INR5.6 trillion.
However, the budget projects only a 2% rise y-o-y in market borrowings for
funding the deficit.

02 March 2015

Budget FY2016

Significant medium-term positives outweigh a few near-term negatives

Earnings of the corporate sector would be impacted by the rise in surcharge on taxes. The uptick
in Service tax and Excise duty too could dampen sentiment on equities. These negative forces are
likely to be offset by the positive effect of the anticipated acceleration in economic activity in
FY2016. Other proposals in this budget, such as the decline in the fiscal deficit ratio, the move
towards a lower and simpler tax regime and the stimulus to infrastructure that would be provided
by plug-and-play projects could create conditions that extend the high-growth phase beyond
FY2016. The combination of USD2trillion economy growing at c8%, with improving public
finances, falling inflation and simpler tax rules can draw in larger FDI into manufacturing.
Calibrated fall in deficit likely to encourage growth
Steady decline in the deficit
ratio would support the
recovery in GDP growth
during FY2016.

The ability to meet the deficit target despite low growth in tax revenues suggests
that the government is regaining control over expenses. So, it could have
targeted an even lower growth in Fiscal Deficit for FY2016 i.e. the deficit could
possibly be pushed below 3.9% of GDP and the milestone of 3% be realized
quicker. However, a rapid compression of the deficit could create an obstacle to
the recovery of economic growth. So, the gradual decrease in the deficit is likely
to be a supporting factor for a quicker return to the high growth path.

A few targeted programs can help to revive projects

Faster implementation of
projects possible if wellknown hurdles are cleared
in advance.

The plug-and-play model for Ultra Mega Power Projects could be capable of
rapidly reviving investment demand in a critical segment of the economy. The
intentions behind the plug-and-play projects are to resolve the well known
obstacles to such projects at the inception stage itself and could enable rapid
progress and commissioning of these projects.

Lower, simpler tax rules can enhance image to investors

A 25% tax on corporate earnings would be a highly visible change from the
current 30% base rate. While the removal of tax exemptions and shelters could
mean that the effective tax rate may change little, it does point a simpler tax
regime. Even if the implementation of this change would wait for four years, it
sends a strong signal to global investors that India is becoming more businessfriendly.
This message is likely to be reinforced by the decision to defer the
implementation of GAAR by two years.

Rise in tax surcharge may impact near-term sentiment

Effective tax rate would
creep up in FY2016 for
corporates and high-income
individuals.

02 March 2015

Earnings of corporates and of non-corporates with taxable income exceeding

INR10mn would be subject to a higher marginal tax during FY2016. This would
tend to erode the net profits of the corporate sector and would thus be
marginally negative for sentiment on equities. The rise in the rates of Service tax
and Excise duty too tend to act against the sentiment on equities.

Budget FY2016

Annexure
Direct Taxes
1
2
3
4

6
7
8

Surcharge proposed to be levied on individuals, HUFs,bAOPs, BOIs, artificial juridical persons, firms,
cooperative societies and local authorities having income > Rs. 1 cr = 12%
Surcharge proposed to be levied in the case of domestic companies
a) Having income > Rs.1 cr and upto Rs.10 cr = 7%
b) having income > Rs.10 cr = 12%
Surcharge proposed to be levied in the case of foreign companies
a) Having income > Rs.1 cr and upto Rs.10 cr = 2%
b) Having income > Rs.10 cr = 5%
Proposed to levy a surcharge @12% as against current rate of 10% on additional income-tax payable by
companies on distribution of dividends and buyback of shares, or by mutual funds and securitisation
trusts on distribution of income.
Education cess on income-tax @ 2% for fulfilment of the commitment of the Government to provide quality
based education and
1% of additional surcharge called Secondary and Higher Education Cess on tax and surcharge is proposed to
be continued for the FY16 for all taxpayers.
Proposed to amend the provisions of section 269SS and 269T of the Income-tax Act so as to prohibit
acceptance or re-payment of advance in cash of Rs. 20,000 or more for any transaction in immovable
property. It is also proposed to provide a penalty of an equal amount in case of contravention of such
provisions.
Reduce rate of Corporate Tax over next 4 years from 30% to 25% along with rationalisation and removal of
various kinds of tax exemptions and incentives for corporate taxpayers
It is proposed to defer applicability of General Anti Avoidance Rule (GAAR) by 2 years. It is proposed to be
applicable for income of the FY 2017-18 (A.Y. 2018-19) and subsequent years. It is also proposed that the
investments made upto 31.03.2017 shall not be subjected to GAAR.

Proposed to provide pass through status to all the subcategories of category-I and also to category-II
Alternative Investment Funds (AIFs) governed by the regulations of SEBI.

10

To facilitate technology inflow to small business at low cost, Income tax rate on royalty and fees for technical
service proposed to be reduced from 25% to 10%.

11

12
13
14
15
16

It is proposed to amend the provisions of section 194LD of the I-T Act so as to extend the period of
applicability of reduced rate of tax at 5% in respect of income of foreign investors (FIIs and QFIs) from
corporate bonds and government securities, from 31.5.2015 to 30.06.2017.
It is proposed to abolish the levy of Wealth-tax with effect from 2016-17(AY).
The revenue loss on account of such abolition is proposed to be compensated by increase in the existing
surcharge by 2% in case of domestic companies and all non corporate taxpayers ( for income > Rs.1 cr)
Increase the deduction unit u/s 80 D for health insurance premium from Rs.15000 to Rs.20000 for individuals
and from Rs.20000 to Rs.30000 for senior citizens
Increase the deduction limit u/s 80CCD for contribution to National Pension Scheme from Rs.1 lakh to
Rs.1.5 lakh.
Increase the deduction limit u/s 80CCC for contribution to pension fund of LIC or IRDA approved insurer
from Rs.1 lakh to Rs.1.5 lakh.
Transport allowance exemption increased from Rs.800 to Rs.1600 per month.

02 March 2015

Budget FY2016

Indirect Taxes
A)
1
2
3
4
5
6
7
B)

Excise Duty
Central Excise Duty increased from 12.36% to 12.5% to subsume education cess.
Hike in excise duty on cigarettes to 25% for length upto 65mm and 15% for other cigarette lengths.
Reduction in excise duty on leather footwear with retail price> Rs.1000 from 12% to 6%
Clean Energy Cess increased from Rs.100 to Rs.200 per metric tonne of coal
Inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from
12% to 6%.
Excise duty on chassis for ambulances is being reduced from 24% to 12.5%
Excise duty on sacks and bags of polymers of ethylene other than for industrial use is being increased from
12% to 15%.
Service Tax

Increase in service tax rate plus education cess from 12.36% to 14%

Service tax exemption to be provided on Varishta Bima Yojana for Senior Citizen

Service provided by a Common Effluent Treatment Plant operator for treatment of effluent is being exempted
from service tax.
Service tax to be levied on the service provided by way of access to amusement facility such as rides,
bowling alleys, amusement arcades, water parks, theme parks, etc.
Service tax exemption extended for pre cold storage services to incentivize value addition in fruits and
vegetables sector.
A uniform abatement is being prescribed for transport by rail, road and vessel to bring parity in these
sectors. Service Tax shall be payable on 30% of the value of such service subject to a uniform condition of
non-availment of Cenvat Credit on inputs, capital goods and input services. Presently, tax is payable on 30%
of the value in case of rail transport, 25% in case of road transport and 40% in case of transport
by vessels.
Customs Duty
Proposal to reduce the rates of basic customs duty on certain inputs, raw materials, intermediates and
components (in all 22 items) so as to minimise the impact of duty inversion and reduce the manufacturing
cost in several sectors.
Basic customs duty on sulphuric acid for the manufacture of fertilizers is being reduced from 7.5% to5%.

The tariff rate of basic customs duty on bituminous coal is being reduced from 55% to 10%.

Increase in basic customs duty on Metallurgical Coke from 2.5% to 5%.

Increase in effective rate on Commercial Vehicles from 10% to 20%. Customs duty on commercial vehicles in
Completely Knocked Down (CKD) kits and electrically operated vehicles including those in CKD
condition will continue to be at 10%.
Tariff rate on iron & steel and articles of iron or steel, falling under Chapters 72 and 73 of the Customs Tariff,
from 10% to 15%. However, there is no change in the existing effective rates of basic customs duty on these
goods.

3
4
5

C)
1

5
6
7

The effective rates of Additional Duty of Customs levied on imported Petrol and High Speed Diesel Oil
(commonly known as road cess) are being increased from Rs.2/litre to Rs.6/litre only.

02 March 2015

Budget FY2016

02 March 2015

Budget FY2016

Market Outlook:

02 March 2015

In line with our expectations, Nifty has moved sideways

for almost 15 days within in the tight band of
8913-8669 levels. Despite showing sharp weakness
during the last week, Nifty made a smart recovery but
was not able to move above the resistance of around
8913 levels. The bullish sequence of higher tops and
bottoms is still intact in Nifty as per longer timeframe.

If Nifty manages to close above 8997 levels by this

week, then that is going to be an upside breakout of the
consolidation and we may see potential upside till
9073/9250 levels. Trend reversal is seen below 8650
levels. So, we suggest exercising caution below 8650
levels on Nifty.

Budget FY2016

SKS MICROFINANCE

SKS MICROFINANCE

BUY
Market Price
Buy Range
Targets
Stoploss
Holding Period

:
:
:
:
:

INR 437 (28th Feb 2015)

INR 437-425
INR 525-540
INR 395
up to 2 months

Investment Rationale: SKS Microfinance is moving

in rising channel indicating strength in the stock.
Relative Strength Index is improving from oversold
zone indicating bulls are taking control. In advancing
trend, each up move extends to new price highs while
the sell offs in between do not decline as far as the
price levels seen on previous sell offs. SKS will
continue to move in this channel until either trend line
is broken. Based on the chart pattern we have set
price target of 525-540 for short term.

Source: Bloomberg

BIOCON

BUY
Market Price
Buy Range
Target
Stoploss
Holding Period

:
:
:
:
:

INR 427 (28th Feb 2015)

INR 427-420
INR 470/482
INR 402
up to 1 month

Investment Rationale: Biocon has given breakout

from down sloping trend line along with volumes.
Positive divergence is observed on MACD momentum
indicator signifying advancing trend for short term.
Based on Fibonacci price extension we have set price
target of 470/482, which is 100% & 123.6% of the
total move i.e. from 402-454, which is added to recent
swing low of 418.

Source: Bloomberg

02 March 2015

10

Budget FY2016

SINTEX INDUSTRIES

BUY
Market Price
Buy Range
Target
Stoploss
Holding Period

:
:
:
:
:

INR 114 (28th Feb 2015)

INR 114-110
INR 144
INR 102
up to 2 months

Investment Rationale: Positive trend is observed on

Sintex Industries daily charts. The stock is making
higher highs and higher lows indicating advancing
trend. Moreover, positive DMI is greater than negative
DMI suggesting bulls have the edge. Based on
Fibonacci price extension we have set price target of
144, which is 178.6% of the total move i.e. from 71105, which is added to recent swing low of 84 for
arriving the estimated target.

Source: Bloomberg

EROS INTERNATIONAL MEDIA

BUY
Market Price
Buy Range
Target
Stoploss
Holding Period

:
:
:
:
:

INR 394 (28th Feb 2015)

INR 394-385
INR 460
INR 359
up to 3 months

Investment Rationale: Eros International Media is

looking bullish on daily charts. The stock is comfortably
trading well above its 50 & 100 day moving indicating
strength in the stock. Based on Fibonacci price
extension we have set price target of 460, which is
123.6% of the total move i.e. from 319-400, which is
added to recent swing low of 359.

Source: Bloomberg

02 March 2015

11

Budget FY2016

YES BANK

BUY
Market Price
Buy Range
Target
Stoploss
Holding Period

:
:
:
:
:

INR 862 (28th Feb 2015)

INR 862-845
INR 1005
INR 780
up to 2 months

Investment Rationale: Yes Bank has reversed its

recent weakness and entered into a new short term
uptrend. The rise in the last two sessions was
accompanied with above average volumes, which
augurs well for the uptrend to continue. We have set
price target of 1005 based on Fibonacci price
extension. Based on Fibonacci price extension we have
set price target of 1005, which is 100% of the total
move i.e. from 670-895, which is added to recent
swing low of 780.

Source: Bloomberg

HINDUSTAN UNILEVER

BUY
Market Price
Buy Range
Targets
Stoploss
Holding Period

Source: Bloomberg

:
:
:
:
:

INR 910 (28th Feb 2015)

INR 910-880
INR 1057
INR 829
up to 3 months

Investment Rationale: Hindustan Unilever is

consolidating in tight range of 880-920 levels for
almost 1 month. The stock is moving in strong
uptrend. We can see the stock is making higher highs
and higher lows. Based on Fibonacci price extension
we have set price target of 1057, which is 78.6% of
the total move i.e. from 744-969, which is added to
recent swing low of 880.

Source: Bloomberg

02 March 2015

12

Budget FY2016

BAJAJ AUTO

BUY
Market Price
Buy Range
Target
Stoploss
Holding Period

:
:
:
:
:

INR 2153 (28th Feb 2015)

INR 2153-2125
INR 2304
INR 2042
up to 1 month

Investment Rationale: On daily charts, Bajaj Auto is

moving in downward sloping channel. Currently, the
stock is trading near lower end of the trend line. So we
may see quick bounce from lower end of the trend line
and will attempt to test the resistance line (joining the
peaks). The stock will continue to trade in the channel
till it breaks out of the trading zone.

Source: Bloomberg

02 March 2015

13

Tata Securities Limited

Corporate Identity Number U67120MH1994PLC080918
One Forbes, Dr V.B. Gandhi Marg, Fort, Mumbai 400 001
Tel: 91 22 6745 9000 Fax: 91 22 6610 6722
Web: www.tatasecurities.com
SEBI Registration Number BSE INB010664150 INF011207954 NSE INB/F/E231288730 Portfolio Manager
INP000003872
Depository Participant of CDSL: IN-DP-CDSL-450-2008 Depository Participant of NSDL: IN-DP-NSDL-298-2008
Merchant Banker INM 000011302

Compliance Officer: Anoop Goyal : 022 6182 8282,

e-mail id: compliance.securities@tatacapital.com
ABOUT TATA SECURITIES LIMITED
Tata Securities is a wholly owned subsidiary of Tata Capital Limited, which is a subsidiary of Tata Sons Limited. Tata
Securities holds membership on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and is
also Depository Participant of NSDL and CDSL. TSL offers, both institutional and retail clients, quality products and
services like Equity Trading, IPOs and Mutual Funds. Tata Securities also provides corporate advisory for M & A
transactions, equity and debt capital market services to companies and institutions, under its Category I Merchant
Banking License issued by SEBI.
Tata Securities also offers clients to trade on internet through its portal www.tatasecurities.com. Tata Securities is a
national distributor of Mutual Funds and a lead broker for public issues of NCDs, Bonds and IPOs.
The corporate office of Tata Securities is located at Thane and is equipped to handle all corporate functions
including an inbound customer servicing desk. It also houses a full fledged research desk which provides necessary
research supports to clients. We hereby declare that our activities were neither suspended nor we have defaulted
with any stock exchange authority with whom we are registered in last five years. However SEBI, Exchanges and
Depositories have conducted the routine inspection and based on their observations have issued advice letters or
levied minor penalty on TSL for certain operational deviations. We have not been debarred from doing business by
any Stock Exchange / SEBI or any other authorities; nor has our certificate of registration been cancelled by SEBI at
any point of time.

DISCLAIMER
This report is for the personal information of the authorized recipient and does not construe to be any investment,
legal or taxation advice to you. Tata Securities Limited (Tata Securities or TSL) is not soliciting any action based
upon it. Nothing in this research report shall be construed as a solicitation to buy or sell any security or product, or
to engage in or refrain from engaging in any such transaction. It does not constitute a personal recommendation or
take into account the particular investment objectives, financial situations, or needs of the reader.
This research report has been prepared for the general use of the clients of the TSL and must not be copied, either
in whole or in part, or distributed or redistributed to any other person in any form. If you are not the intended
recipient you must not use or disclose the information in this research report in any way. Though disseminated to
all the customers simultaneously, not all customers may receive this report at the same time. TSL will not treat
recipients as customers by virtue of their receiving this report. Neither this document nor any copy of it may be
taken or transmitted into the United States (to US Persons), Canada or Japan or distributed, directly or indirectly, in
the United States or Canada or distributed, or redistributed in Japan to any residents thereof. The distribution of
this document in other jurisdictions may be restricted by the law applicable in the relevant jurisdictions and persons
into whose possession this document comes should inform themselves about, and observe any such restrictions.
We have reviewed the report, and in so far as it includes current or historical information, it is believed to be
reliable though its accuracy or completeness cannot be guaranteed. Neither TSL, nor any person connected with it,
accepts any liability arising from the use of this document. The recipients of this material should rely on their own
investigations and take their own professional advice. Price and value of the investments referred to in this material
may go up or down. Past performance is not a guide for future performance. Certain transactions -including those
involving futures, options and other derivatives as well as non-investment grade securities - involve substantial risk
and are not suitable for all investors. Reports based on technical analysis centers on studying charts of a stock's
price movement 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.
Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor 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. Prospective investors and others are cautioned that any forwardlooking statements are not predictions and may be subject to change without notice. Our proprietary trading and
investment businesses may make investment decisions that are inconsistent with the recommendations expressed
herein.
Further, the report is based upon information obtained from sources believed to be reliable, but TSL does not make
any representation or warranty that it is accurate, complete or up to date and it should not be relied upon as such.
It does not have any obligation to correct or update the information or opinions in it. TSL or any of its affiliates or
employees 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. TSL or any of its affiliates or employees do not provide,
at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including
without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. This information is subject to change without
any prior notice. TSL reserves at its absolute discretion the right to make or refrain from making modifications and
alterations to this statement from time to time. Nevertheless, TSL is committed to providing independent and
transparent recommendations to its clients, and would be happy to provide information in response to specific client
queries.

02 March 2015

14

Before making an investment decision on the basis of this research, the reader needs to consider, with or without
the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs,
objectives and financial circumstances. There are risks involved in securities trading. The price of securities can and
does fluctuate, and an individual security may even become valueless. International investors are reminded of the
additional risks inherent in international investments, such as currency fluctuations and international stock market
or economic conditions, which may adversely affect the value of the investment. Neither TSL nor the director or the
employee of TSL accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from
any use of this research report and/or further communication in relation to this research report.

Disclosure of Interest Statement in the above report as on 2nd March 2015

1. Name of the analyst
: Anand Shanbhag/Praveen Kumar Dodda
2. Qualifications of the analyst
: MBA/ BE,MBA
3. Research Analyst or his/her relatives has actual/beneficial ownership of 1% or more securities of the subject
company at the end of the month immediately preceding the date of publication of Research Report:
No
4. Tata Securities Limiteds actual/beneficial ownership of 1% or more securities of the subject company at the end
of the month immediately preceding the date of publication of Research Report :
No
5. Broking relationship with company covered
:
No
6. Investment Banking relationship with company covered
:
No
7. Research Analyst has served as an officer, director or employee of Subject Company:
No
8. Research Analyst or his/her relatives financial interest in the subject company :
No
9. Tata Securities Limiteds financial interest in the subject company
:
No
We or our associates may have received compensation from the subject company in the past 12 months. We or our
associates may have managed or co-managed public offering of securities for the subject company in the past 12
months. We or our associates may have received compensation for investment banking or merchant banking or
brokerage services from the subject company 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 in the past 12 months. We or our associates have not received any compensation or
other benefits from the subject company or third party in connection with the research report. Our associates may
have financial interest in the subject company.
Our associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of
the month immediately preceding the date of publication of Research Report.
Investments in securities are subject to market risk; please read the SEBI prescribed Combined Risk Disclosure
Document prior to investing. Derivatives are a sophisticated investment device. The investor is requested to take
into consideration all the risk factors before actually trading in derivative contracts. Our research should not be
considered as an advertisement or advice, professional or otherwise.
No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of
specific recommendations or views in this research. The analyst(s), principally responsible for the preparation of this
research report, receives compensation based on overall revenues of TSL and TSL has taken reasonable care to
achieve and maintain independence and objectivity in making any recommendations.
Neither TSL nor its directors, employees, agents, representatives shall be liable for any damages whether direct or
indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in
connection with the use of the information contained in this report.
We and our affiliates, officers, directors, and employees worldwide may: (a) from time to time, have long or short
positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any
other transaction involving such securities and earn brokerage or other compensation or act as a market maker in
the financial instruments of the company (ies) discussed herein or act as advisor or lender / borrower to such
company (ies) or have other potential 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.

Copyright in this document vests exclusively with Tata Securities Limited.

02 March 2015

15