INDIA

December 2008
Sugar Sector
Good in parts
Tushar Manudhane (TusharManudhane@PLIndia.com) +91-22-6632 2238
Contents
_______________________________________________________________________________
Page No. _______________________________________________________________________
________ Industry Sugar cycle turning positive 4 Supply-demand mismatch to impro
ve margins 5 Alternate crops to sugarcane are more profitable 7 Minimal impact o
n domestic sugar prices 8 Domestic Scenario for Ethanol 10 SAP to impact margins
of UP-based mill owners 11 Upturn and Forward integration – to enhance margins of
mill owners 12 Companies Shree Renuka Sugars Bajaj Hindustan Balrampur Chini Co
mparison on main parameters
14 17 20 22
Annexure Manufacturing Process 24 Value Flow Chart 25 __________________________
_____________________________________________________
(Prices as on December 24, 2008)
2
Industry
3
Sugar cycle turning positive
Factors impacting this cycle
Domestic factors Reduction in cultivation area for sugarcane by 17% in FY09 and
further reduction of 6-8% expected in FY10 / diversion of cultivation area for a
lternate crops. This would result in reduction in incremental supply by 4.2 MT,
where incremental demand is expected to rise by 0.9 MT on an average over the ne
xt couple of years. Natural factors like delay in monsoon and flood in western U
P during this season would impact yield of sugar from sugarcane. International f
actors EU, who was one of the major exporters, is expected to become net importe
r by 2010. Fall in price of crude oil to about US$40-45 per barrel reduces incen
tive to produce more ethanol which further impacts supply demand of sugar at glo
bal scale. As of now, we are in this stage of the cycle
2-3
ye ar s
2-3
ye ars
4
Supply-demand mismatch to improve margins
Demand Drivers
30% of total consumption is used directly by household, while 70% is used indire
ctly. Sugar consumption is expected to grow at the rate of 4-4.5 % because of st
eady growth of population by 1.3-1.4% per annum ƒ
5
Contd...
Supply Constraints
Excess production of sugar in the last couple of years resulted in no significan
t increase in the minimum support price of sugarcane for farmers, as compared to
minimum support price for alternate crops like wheat paddy, etc. This excess su
pply of sugar resulted in a reduction in the margins of mill owners which led to
a delay in payment by mill owners to farmers, further reducing their incentive
to plant sugarcane crop.
Reduction in cultivation area by about 17% during SS 2008-09, would result in re
duction in production of sugarcane to approx 280.5 MT.
Reduction in production of sugarcane may result in reduction of closing stock ov
er next two years
Source: Crisil, PL Research,
Year ending - September
6
Alternate crops to sugarcane are more profitable
Maharashtra (this state contributes 32% of total domestic sugar production):
Either of these four combinations could be used by the farmer Crop Yield (Qtl /
Acre) SP (Rs / Qtl) Total Earnings Cultivation Cost (Rs / Acre) Net Earnings Ear
nings (As % of cost) Wheat 15 1,000 15,000 7,029 7,971 113.4 Jowar 15 700 10,500
5,000 5,500 110.0 Sweetcorn 20 800 16,000 5,000 11,000 220.0 Bajra 12 800 9,600
4,500 5,100 113.3 Moong 3 1,700 5,100 1,500 3,600 240.0 1 Jowar+1 Wheat 30 1,70
0 25,500 12,029 13,471 112.0 1 Jowar+1 Sweetcorn 35 1,500 26,500 10,000 16,500 1
65.0 1 Moong+1 Sweetcorn +1 Bajra 35 3,300 30,700 11,000 19,700 179.1 Sugarcane
330 140 46,200 17,215 28,985 168.4
Source: PL Research
Jowar: Jun-Jul, Wheat: Nov-Apr, Sweetcorn: Nov-Jan, Bajra: Apr-May, Sugarcane: O
ct-Jan (Next year)
Uttar Pradesh
Crop Yield (Qtl / Acre) SP (Rs / Qtl) Total Earnings
(this state contributes 30% of total domestic sugar production):
Wheat 15 1,000 15,000 7,029 7,971 Paddy 20 800 16,000 8,500 7,500 1 Wheat + 1 Pa
ddy 35 1,800 31,000 15,529 15,471 Sugarcane 240 140 33,600 17,215 16,385
Cultivation Cost (Rs / Acre) Net Earnings
Earnings (As % of Cost) Source: PL Research
113.4 Wheat : Nov - Apr, Paddy: July - Sep
88.2
99.6
95.2
7
Minimal impact on domestic sugar prices
The world sugar trade accounts for 35-40% of global sugar production of approx.
161m tonnes. While Brazil’s influence in global trade is expected to increase, EU
is expected to become a marginal player by 2010. This scenario is expected to im
prove the prices of sugar at global level. Another factor that would drive sugar
prices at global level is alternate use of cane for ethanol production. Fuel et
hanol substitutes gasoline and hence substitutes crude oil. This linkage is prim
arily driven by Brazil’s policy of dynamic management of its share of ethanol and
sugar production. Major exporters
27% 2% 2% 2% 3% 2% 7% 21% 34% Brazil EU Australia India Thailand Guatemela Colum
bia S. Africa Others
Source: Company Data, PL Research
Going ahead - weak relation between global and domestic sugar prices
500 450 400 ($/tonne) 350 300 250 200 150 100 Aug-04 Apr-06 Jun-05 Jan-05 Nov-05
Mar-04 Feb-07 Sep-06 Jul-07 Dec-07 May-08 Oct-03 Oct-08
White Sugar Domestic price (RHS)
2,200 2,000 (Rs/Quintal) 1,800 1,600 1,400 1,200 1,000
Source: Bloomberg
8
Contd...
Brazil
MY2004-05 Sugarcane Production (m tonne) Supply of sucrose (m tonne) Sucrose for
Ethanol production (m tonne) Sugarcane converted to alcohol (%) 386 55 28 49.9
MY2005-06 387 55 28 51.5 MY2006-07 428 62 32 50.5 MY2007-08 491 71 38 54.5
Source: Brazil Biofuels Ethanol Annual Report 2008, MY- Marketing Year- May-Apri
l
Proportion of sugarcane for Ethanol in Brazil has been increasing YoY and is exp
ected to increase to 58% in MY200809, as ethanol blending is a cost effective pr
ocess as compared to supplying non-blended petrol for transportation. Global fac
tors affects India in a small way because very high import duty on sugar (about
60%). exports are regulated by government by controlling export subsidy on sugar
.
9
Domestic Scenario for Ethanol
Probable alcohol demand over the next couple of years
Blended Petrol Demand (m tonnes) 2007-08 2008-09E 2009-10E Source: Crisil 10 11
12 Blended petrol Demand in (m litres) 14,322 15,734 17,288 Demand for Ethanol (
m litres) 5% Blending 10% Blending Alcohol demand (Other than Ethanol) 1,835 1,9
17 1,998
716 787 864
1,432 1,573 1,729
Demand more than supply, indicating firming-up prices of Ethanol in the future t
o meet demand for blending program. Probable alcohol production over the next co
uple of years
Total alcohol demand 5% blending 2007-08 2008-09E 2009-10E Source: Crisil 2,551
2,704 2,862 10% Blending 3,267 3,490 3,727 Potential Alcohol production 2,765 2,
084 1,995 Deficit 5% Blending 214 (620) (867) 10% Blending (502) (1,406) (1,732)
10
SAP to impact margins of UP-based mill owners
Sensitivity of SAP on total cost of producing sugar
In UP, where yield of sugar from sugarcane is about 9.5-10%
Cost of sugarcane (Rs / Kg of sugar) Total cost of producing sugar to mill owner
s ( Rs / Kg of sugar) Source: PL Research 11.0 15.65 12.5 17.15 13.5 18.15 Situa
tion expected in 2008-09 and 2009-10 14.5 19.15 15.0 19.65 15.5 20.15 16.0 20.65
In Karnataka, where yield of sugar from sugarcane is about 11 -11.5%
Cost of sugarcane (Rs / Kg of sugar) Total cost of producing sugar to mill owner
s ( Rs / Kg of sugar) Source: PL Research 11.0 14.61 12.5 15.96 13.5 16.86
Situation expected in 2008-09 and 2009-10 14.5 17.76 15.0 18.21 15.5 18.66 16.0
19.11
We expect the cost of producing sugar in UP to be more than its selling price, t
hus contributing negatively for the business. In Karnataka, due to higher yield,
we expect cost of producing sugar to be less than its selling price, thus contr
ibuting positively for the business.
11
Upturn and Forward integration – to enhance margins of mill owners
Mill owners would be benefited in terms of improvement in margins due to: Lower
sugar production which would continue for 1-2 years, thus firming the prices of
sugar. We expect average sugar price at Rs1900 per quintal in 2009 and Rs2000 pe
r quintal in 2010. Forward integration across the value chain would further enha
nce the profitability of mill owners, as we also expect ethanol price to firm-up
. However, higher cane price would reduce margins to some extent. Due to low yie
ld of sugar in UP as against higher yield in Karnataka, we expect mills based in
Karnataka to be benefited more than those in UP. BUY Shree Renuka Sugars, REDUC
E Bajaj Hindustan and Balrampur Chini.
Domestic Sugar prices
2,200 2,000 1,800 (Rs / quintal) 1,600 1,400 1,200 1,000 Apr-00 Oct-00 Apr-01 Oc
t-01 Apr-02 Apr-03 Oct-03 Apr-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Apr-08 Oct-0
8 Apr-09 Oct-09 Apr-10 Oct-99 Oct-02 Oct-04 Oct-07 Oct-10
Source: Bloomberg, PL research
Key Financials
Y/e Sept\ FY08 Sales (Rs m) EBIDTA Margin (%) FDEPS (Rs.) PE (x) Debit / Equity
(x) RoE (%) RoCE (%) P/BV (x) Mkt Cap/ Sales (x) M/Cap (Rs m) 21,143 11.9 5.0 12
.5 1.2 9.3 10.8 2.2 0.8 19,216 SRSL FY09E 23,661 18.9 8.5 7.4 0.6 22.6 14.9 1.4
0.8 19,216 FY10E 34,764 17.6 12.4 5.0 0.4 24.4 17.7 1.1 0.5 19,216 FY08E 21,117
15.9 -3.2 2.7 -3.2 1.3 0.7 0.4 9,036 BJH FY09E 25,540 20.0 3.1 20.8 2.4 3.2 5.5
0.7 0.4 9,036 FY10E 28,913 21.6 12.9 4.9 1.7 12.4 8.4 0.5 0.3 9,036 FY08 14,909
21.1 3.2 14.8 1.5 8.6 6.5 1.3 0.8 11,628 BCL FY09E 15,389 17.6 2.0 22.9 1.4 5.4
5.2 1.3 0.8 11,628 FY10E 18,316 18.3 3.9 11.8 1.2 9.8 7.0 1.2 0.6 11,628
Source: PL Research
Year ending - September
12
Companies
13
Shree Renuka Sugars
Consistent Performance: Shree Renuka Sugars (SRSL) has shown CAGR of 50% in reve
nues and 125% in net profit over 2001-2007. It has been comparatively more benef
icial as compared to its peers due to higher recovery of sugar and ability to ex
port. JV with HPCL for Ethanol: As first of its kind of collaboration, SRSL has
joined hands with Hindustan Petroleum Corp (HPCL) to set up an ethanol plant in
Maharashtra. Under the terms of agreement, HPCL would buy all the Ethanol from t
he JV company. Increasing diversification: SRSL has been trying to diversify its
business to reduce the impact of cyclicality of sugar by increasing business of
distillery and power. Contribution of distillery and power are expected to incr
ease from 7.3% and 5.1% in FY08 to 17.4% and 6.6%, respectively by FY10. RoE lik
ely to remain stable: RoCE is expected to improve from 12.2% in FY08 to 17.7% in
FY10 due to improvement in EBIT margin as well as asset turnover. So RoE is als
o likely to improve to 24.4% in FY10, but would be affected due to lower leverag
e impact. Valuation: We expect 11.9% growth in topline in FY200809 and 46.9% in
FY2009-10. We also expect bottom-line to grow by 86.9% and 47.4% in FY2008-09 an
d FY2009-10, respectively, giving an EPS of Rs8.5 and Rs12.4 in FY2008-09 and FY
2009-10, respectively.
14
BUY
Key Financials (Rs m)
Y/e September Revenue (Rs m) Growth (%) EBIDTA (Rs m) PAT (Rs m) EPS (Rs) Growth
(%) Net DPS (Rs) FY07 9,506 1,320 830 26.7 FY08 21,143 122.4 2,526 1,332 4.6 (8
2.9) 0.2
CMP: Rs65 Target Price: Rs89 Shares O/s.: 297m
FY09E 23,661 11.9 4,479 2,489 8.5 85.3 0.4
FY10E 34,764 46.9 6,121 3,668 12.4 46.9 0.6
Source: Company Data, PL Research
Profitability & Valuation
Y/e September EBIDTA Margin (%) RoE (%) RoCE(%) EV/ Sales (x) EV / EBIDTA (x) PE
R (x) P / BV (x) Net Dividend yield (%) FY07 13.9 22.3 10.3 0.8 6.1 1.9 0.4 FY08
11.9 20.4 12.2 1.3 11.0 14.2 2.2 0.2 FY09E 18.9 22.6 14.9 1.1 6.0 7.6 1.4 0.3 F
Y10E 17.6 24.4 17.7 0.7 4.1 5.2 1.1 0.5
Source: Company Data, PL Research
SRSL’s growth plan
Particulars Crushing Capacity (TCD) Refining Capacity (TPD) FY2008 27,750 2000-
Haldia, 2000-Plants Sugar production capacity (m tonnes) Ethanol production KLPD
Ethanol production capacity (m litres) Power Capacity Source: PL Research 1.4 4
50-Integrated, 100 – Secondary 140 103.5 MW, 55 MW Surplus Year ending - September
FY2009P 35,000 2000- Haldia, 2000-Plants 1.6 900-Integrated, 300-Secondary 330
129 MW, 70 MW Surplus FY2010P 35,000 2000- Haldia, 2000-Plants, 2000 Mundra 2.3
900-Integrated, 300-Secondary 330 164 MW , 90 MW Surplus
Capex Plan till FY10
Ethanol o Expansion - 450 KLPD – Rs1500m o Secondary Distillery – Rs150m KBK Chem – Rs
400m Cogen Havalgah – Rs900m Athani refinery – Rs350m Overseas Invest. – 1500m Brownfi
eld expansion – Rs1500m o Athani (2000TCD) o Havalga (4000TCD) 15MW power plant o
Havalga – Rs600m 2000 TPD refinery o Mundra - Rs3500m
Funds raised for capex
Debt (ECB)- Rs2400m Equity - Rs1640m SDF Loan - Rs135m Preferential issue – Rs625m
20.04 Mn warrants to the promoter @ Rs 114.36 / warrant – Rs2291m Internal accrua
ls and Borrowing – Rs3309m
• • • • •
• •
TOTAL – Rs5600m
TOTAL – Rs5600m
15
Financials
Income Statement (Rs m)
Y/e September Net Revenues Expenditure Raw Materials % of Net Revenues Personnel
% of Net Revenues Mfg. & Other Expenses % of Net Revenues EBIDTA Net Interest D
ep & Amortization EBIT EBIT margin (%) PBT Total Tax Effective Tax rate (%) PAT
6,749 71.0 239 2.5 1,067 11.2 1,320 134 249 1,070 13.9 1,066 236 14.0 830 15,767
74.6 419 2.0 2,431 11.5 2,526 701 193 2,333 11.9 1,784 427 23.9 1,332 15,987 67
.6 592 2.5 2,604 11.0 4,479 600 603 3,876 18.9 3,326 812 24.4 2,489 24,487 70.4
973 2.8 3,183 9.2 6,121 480 810 5,311 17.6 4,881 1,188 24.3 3,668 FY07 9,506 FY0
8 21,143 FY09E 23,661 FY10E 34,764
Balance Sheet (Rs m)
Y/e September Sources of Fund Share Capital Resrves and Surplus Total Shareholde
r s fund Total Loan Fund Total Application of Fund Assets Gross Block Less: Dep
& Amortization Net Block CWIP Total Current Assets Total Current Liab. & Prov Ne
t Current Assets Total 6,314 691 5,623 2,087 4,436 1,218 3,218 11,111 8,401 884
7,517 5,212 7,663 2,789 4,874 17,929 12,051 1,486 10,565 2,500 9,957 1,800 8,157
21,531 15,651 2,296 13,355 400 13,089 3,200 9,889 23,954 311 4,128 4,439 6,470
11,111 297 8,039 8,867 8,595 17,929 297 12,523 13,351 7,500 21,531 297 16,147 16
,975 6,000 23,954 FY07 FY08 FY09E FY10E
Source: Company Data, PL Research
Major Shareholders
Promoters Foreign Domestic Inst. Public & Others 40.5% 24.0% 10.50% 24.9%
Source: Company Data, PL Research
16
Expansion
R
B
PB/MDF – Another growth driver for BHL
The principal usage of MDF/particle board is in the construction of cupboards, s
hutters and wardrobes, shel.68w(oaxd51nl5 ] [
18
Financials
Income Statement
Y/e September Net Revenues Expenditure Raw Materials % of Net Revenues Personnel
% of Net Revenues Mfg. & Other Expenses % of Net Revenues EBIDTA Net Interest D
ep & Amortization EBIT EBIT margin (%) PBT Total Tax Effective Tax rate (%) PAT
915 1,619 612 3.4 (303) (160) 52.9 (103) 2,071 2,799 644 3.0 (1,427) (980) 68.7
(447) 2,250 2,526 2,734 10.7 484 48 10.0 435 1,793 2,561 3,826 13.2 2,033 203 10
.0 1,830 13,441 75.5 1,423 8.0 2,425 13.6 13,693 64.8 1,483 7.0 2,584 12.2 14,85
5 58.2 2,056 8.1 3,519 13.8 16,518 57.1 2,281 7.9 3,877 13.4 FY07 17,805 FY08 21
,117 FY09E 25,540 FY10E 28,913
Balance Sheet (Rs m)
Y/e September Sources of Fund Share Capital Resrves and Surplus Total Shareholde
r s fund Total Loan Fund Total Application of Fund Assets Gross Block Less: Dep
& Amortization Net Block CWIP Total Current Assets Total Current Liab. & Prov Ne
t Current Assets Total 29,218 4,671 24,547 16,299 20,549 7,143 10,420 51,266 45,
000 7,470 37,530 900 15,678 2,855 11,044 50,474 45,500 9,995 35,505 500 15,490 2
,752 10,959 47,964 46,000 12,556 33,444 200 11,751 2,010 7,961 42,605 141 13,696
14,060 35,934 51,266 141 13,149 13,514 35,934 50,474 141 13,485 13,849 33,288 4
7,964 141 15,215 15,579 26,400 42,605 FY07 FY08 FY09E FY10E
Source: Company Data, PL Research
Major Shareholders
Promoters Foreign Domestic Inst. Public & Others 45.7% 13.9% 13.1% 27.3%
Source: Company Data, PL Research
19
Balrampur Chini
Expansion in place to take advantage of upturn: Balrampur Chini Limited (BCL) ha
s nine mills spread across eastern and central Uttar pradesh with an aggregate s
ugarcane crushing capacity of 73000 TCD and addition of 3000 TCD through Indo Gu
lf Industries (the company has acquired majority stake in this company)It has al
so de-risked its business through diversification into distillery (320 KLPD), po
wer co-generation (181 MW, Saleable – 126 MW) and bio-compost manufacture. No Furt
her Capex in immediate future: No further capex is expected in immediate future
with respect to minimizing effect of cyclicality on business. Higher Cane price
and flood to impact profitability: We expect BCL to maintain the RoCE as well as
RoE over the period from FY2007-08 to 2009-10. RoCE as well as RoE may get lowe
r in the year 2008-09 mainly due to higher cane price of Rs 140 per quintal and
reduction in sugarcane crushing due to flood in western UP. RoCE and RoE are exp
ected to improve in FY2009-10 mainly due to higher sugar price, higher ethanol p
rice. Valuation: We expect 3.2% growth in topline in FY200809 and 17.9% in FY200
9-10. We expect bottomline to degrow by 35.6% in FY2008-09 and grow by 93.7% in
FY2008-09 and FY2009-10 resp. giving an EPS of Rs 2.0 and Rs 3.9 in FY2008-09 an
d FY2009-10 respectively.
Reduce
Key Financials (Rs m)
Y/e September Revenue (Rs m) Growth (%) EBIDTA (Rs m) PAT (Rs m) EPS (Rs) Growth
(%) Net DPS (Rs) FY07 13,948 765 (470) (2.5) FY08 14,909
CMP: Rs47 Target Price: Rs28 Shares O/s.: 248m
FY09E 15,389 3.2 2,714 504 2.0 (35.6) 1.0
FY10E 18,136 17.9 3,315 977 3.9 93.7 1.0
6.9 3,141 783 3.2 (223.7) 1.0
Source: Company Data, PL Research
Profitability & Valuation
Y/e September EBIDTA Margin (%) RoE (%) RoCE(%) EV/ Sales (x) EV / EBIDTA (x) PE
R (x) P / BV (x) Net Dividend yield (%) FY07 5.5 (7.4) 0.2 1.8 32.1 (18.4) 1.3 F
Y08 21.1 8.6 6.5 1.7 8.2 14.9 1.3 2.1 FY09E 17.6 5.4 5.2 1.6 8.9 23.1 1.3 2.1 FY
10E 18.3 9.8 7.0 1.3 7.0 11.9 1.2 2.1
Source: Company Data, PL Research
20
Financials
Income Statement
Y/e September Net Revenues Expenditure Raw Materials % of Net Revenues Personnel
% of Net Revenues Mfg. & Other Expenses % of Net Revenues EBIDTA Net Interest D
ep & Amortization EBIT EBIT margin (%) PBT Total Tax Effective Tax rate (%) PAT
10,705 76.7 772 5.5 1,619 11.6 765 600 838 33 0.2 (568) 65 (11.4) (470) 9,062 60
.8 864 5.8 1,842 12.4 3,141 1,000 1,253 2,039 13.7 1,039 256 24.6 783 10,198 66.
3 877 5.7 1,600 10.4 2,714 863 1,285 1,457 9.5 594 90 15.1 504 11,829 65.2 997 5
.5 1,995 11.0 3,315 816 1,300 2,043 11.3 1,227 250 20.4 977 FY07 13,948 FY08 14,
909 FY09E 15,389 FY10E 18,136
Balance Sheet (Rs m)
Y/e September Sources of Fund Share Capital Resrves and Surplus Total Shareholde
r s fund Total Loan Fund Total Application of Fund Assets Gross Block Less: Dep
& Amortization Net Block CWIP Total Current Assets Total Current Liab. & Prov. N
et Current Assets Total 20,820 4,279 16,542 3,337 6,803 4,001 2,802 22,719 23,58
0 5,532 18,048 1,000 8,461 3,000 5,461 24,555 24,300 6,817 17,483 300 8,999 3,55
0 5,449 23,278 24,500 8,117 16,383 200 9,484 3,050 6,434 23,063 248 8,343 8,591
12,896 22,719 248 8,834 9,082 14,040 24,555 248 9,047 9,295 12,500 23,277 248 9,
732 9,980 11,500 23,063 FY07 FY08 FY09E FY10E
Source: Company Data, PL Research
Major Shareholders
Promoters Foreign Domestic Inst. Public & Others 35.7% 20.6% 24.1% 19.6%
Source: Company Data, PL Research
21
Comparison on main parameters
SRSL
Integration & Diversification Earnings Growth & Margins Leverage Location
Crushing Capacity (TCD) Refining Capacity (TPD) Ethanol production (KLPD) Power
Capacity (MW Saleable) Particle Board MDF 37500 2000- Haldia, 2000-Plants 900-In
tegrated, 300-Secondary 70 136000 800 90 50000 m3 pa 160000 m3 pa 76000 320 126
-
BHL
BCL
22
Annexure
23
Manufacturing Process
Weighing and Preparing Cane Cane Milling / Crushing Juice Defecation & clarifica
tion Juice Evaporation Syrup Boiling Centrifuging Factory Raw Sugar
24
To Grid Boilers Turbines Press mud Power To factory
Bio-composting
Fermentation
Alcohol
Main Process Supplementary Process
24
Value Flow Chart
100 Kgs of Sugarcane gives approx. (9-11) Kgs of Sugar, (5-6) Kgs of Molasses, 3
3 Kgs of Bagasse
1 Tonne of Molasses gives approx. 220-250L of Alcohol 1 Quintal of Bagasse can g
enerate approx. 35 units of power
25
Prabhudas Lilladher Pvt. Ltd. 3rd Floor, Sadhana House, 570, P. B. Marg, Worli,
Mumbai 400 018, India. Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209 Rating Dist
ribution of Research Coverage
45% 40% % of Total Coverage 35% 30% 25% 20% 15% 10% 5% 0% Buy Accumulate Reduce
Sell 3.1% 18.8% 42.2% 35.9%
PL’s Recommendation Nomenclature BUY Reduce Trading Buy : Over 15% Outperformance
to Sensex over 12-months Accumulate : Underperformance to Sensex over 12-months
: Over 10% absolute upside in 1-month Sell Trading Sell Under Review (UR) : : :
: Outperformance to Sensex over 12-months Over 15% underperformance to Sensex ov
er 12-months Over 10% absolute decline in 1-month Rating likely to change shortl
y
Not Rated (NR) : No specific call on the stock
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