2QFY2012 Result Update | Steel

November 4, 2011

Steel Authority of India

Performance Highlights

NEUTRAL
CMP Target Price `109 1QFY12
10,811 1,312 12.1 839

Particulars (` cr) Net sales EBITDA EBITDA margin (%) Adj. PAT

2QFY12
10,837 1,327 12.2 1,003

2QFY11
10,603 1,542 14.5 937

% chg (yoy)
2.2 (13.9) (230)bp 7.0

% chg (qoq)
0.2 1.1 11bp 19.6

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Steel 45,104 1.2 202/98 345408 10 17,482 5,266 SAIL.BO SAIL@IN

Source: Company, Angel Research

For 2QFY2012, SAIL reported net sales of `10,837cr, slightly below our estimate of `11,135cr. However, adjusted PAT at `1,003cr was above our estimate of `836cr. We recommend a Neutral rating on the stock. Lower volumes mute 2QFY2012 net sales growth: During 2QFY2012, net sales grew by 2.2% yoy to `10,837cr (slightly below our estimate of `11,135cr) mainly due to increased realization (up 8.7% yoy to `38,023/tonne), partially offset by lower sales volume (down 5.9% yoy to 2.9mn tonnes). Power, fuel and staff costs dent SAILs EBITDA: Despite 8.7% yoy growth in realization, EBITDA dipped by 13.9% yoy to `1,327cr and EBITDA margin contracted by 230bp yoy to 12.2% mainly due to higher power and fuel (up 28.2% yoy) and staff costs (up 16.5% yoy). EBITDA/tonne stood at `4,657 in 2QFY2012 compared to `5,090 in 2QFY2011. Forex loss hits net profit: SAIL reported an exceptional item related to forex loss of `509cr in 2QFY2012 compared to forex gain of `153cr in 2QFY2011. Hence, net profit decreased by 54.6% yoy to `495cr. However, excluding exceptional items, adjusted net profit grew by 7.0% yoy to `1,003cr in 2QFY2012. Outlook and valuation: SAIL is expected to increase its saleable steel production capacity from 12.5mn tonnes to 23.1mn tonnes by FY2015. Also, we expect SAIL's older loss-making plants to be modernized as part of its modernization program. However, the company has reported delays in its expansion plans. The stock is currently trading at a 9.1x and 6.4x FY2012 and FY2013 EV/EBITDA, respectively. Given the companys modest volume growth in the near term and fair valuations, we have a Neutral view on the stock. Key financials
Y/E March (` cr) Net sales % chg Net profit % chg EPS (`) EBITDA margin (%) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 85.8 7.5 4.0 2.7

Abs. (%) Sensex SAIL

3m

1yr

3yr 69.1 21.1

(2.6) (14.6) (9.7) (43.6)

FY2010 40,551 (7.2) 6,754 9.4 16.4 24.5 6.7 1.3 21.9 19.2 1.0 4.0

FY2011 42,720 5.3 4,881 (27.7) 11.8 17.7 9.2 1.2 13.7 10.7 1.1 6.4

FY2012E 46,170 8.1 3,809 (22.0) 9.2 13.6 11.8 1.1 9.7 7.2 1.2 9.1

FY2013E 54,932 19.0 5,077 33.3 12.3 17.1 8.9 1.0 11.7 9.4 1.1 6.4

Bhavesh Chauhan
Tel: 022- 39357800 Ext: 6821 bhaveshu.chauhan@angelbroking.com

Please refer to important disclosures at the end of this report

SAIL | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance

(` cr) Net sales Raw material % of net sales Consumption of stores & spares % of net sales Power & fuel % of net sales Staff cost % of net sales Other expenditure % of net sales Total expenditure Operating profit Operating margin (%) Other operating income EBITDA EBITDA margin (%) Net Interest income/(exp.) Depreciation Other income Exceptional items Profit before tax % of net sales Current tax % Tax rate Profit after tax Adjusted PAT
Source: Company, Angel Research

2QFY12 10,837 5,156 47.6 652 6.0 1,124 10.4 1,981 18.3 740 6.8 9,652 1,184 10.9 143 1,327 12.2 234 394 57 (509) 715 6.6 220 30.8 495 1,003

2QFY11 10,603 5,167 48.7 608 5.7 877 8.3 1,700 16.0 853 8.0 9,205 1,398 13.2 145 1,542 14.5 223 369 43 153 1,592 15.0 502 31.5 1,090 937

yoy (%) 2.2 (0.2) 7.3 28.2 16.5 (13.3) 4.9 (15.3) (1.1) (13.9) 4.6 6.8 31.8 (55.1) (56.2) (54.6) 7.0

1QFY12 10,811 4,949 45.8 618 5.7 1,017 9.4 2,251 20.8 779 7.2 9,614 1,197 11.1 115 1,312 12.1 279 374 13 1,230 11.4 391 31.8 839 839

qoq (%) 0.2 4.2 5.6 10.5 (12.0) (4.9) 0.4 (1.1) 24.2 1.1 (16.2) 5.2 324.9 (41.9) (43.7) (41.0) 19.6

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

(` cr) Net sales EBITDA EBITDA margin (%) Adjusted PAT
Source: Company, Angel Research

Actual
10,837 1,327 12.2 1,003

Estimates
11,135 1,290 11.6 836

Variation (%)
(2.7) 2.9 66bp 20.0

November 4, 2011

SAIL | 2QFY2012 Result Update

Result highlights
Lower sales volume mute 2QFY2012 sales growth
During 2QFY202, net sales grew by 2.2% yoy to `10,837cr (slightly below our estimates of `11,135cr) mainly due to higher realization (up 8.7% yoy to `38,023/tonne), partially offset by lower sales volumes (down 5.9% yoy to 2.9mn tonnes).

Exhibit 3: Sales volume stood at 2.9mn tonnes

4.0 3.5 3.0 3.4 3.0 2.4 40,000 3.3 3.1 2.8 2.9 38,000

Exhibit 4: Top line grew by 2.2% yoy

14,000 12,000 10,000 14.9 19.7 25 20 15

(mn tonnes)

(`/tonne)

2.5 2.0 1.5 1.0 0.5 0.0

(` cr)

36,000 34,000 32,000 30,000 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Sales volume (LHS) Average realisation (RHS)

6,000 4,000 2,000 0 1.8 0.9

6.6 (0.1) 0.0

5 0 (5)

4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Net revenue (LHS) yoy chg (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Power, fuel and staff costs dent SAILs EBITDA

Despite higher realization, SAILs EBITDA dipped by 13.9% yoy to `1,327cr and EBITDA margin contracted by 230bp yoy to 12.2% (higher than our estimate of 11.6%). The decline in EBITDA was mainly due to higher power and fuel and staff costs. Power and fuel cost grew by 28.2% yoy to `1,124cr (up 36.3% yoy to `3,943/tonne) and staff cost grew by 16.5% yoy to `1,981cr (up 23.8% yoy to `6,950/tonne). EBITDA/tonne stood at `4,657 in 2QFY2012 compared to `5,090 in 2QFY2011.

Exhibit 5: Quarterly performance

(`/tonne of saleable steel) Revenue Cost Raw-material cost Consumption of stores Power and fuel Staff cost Other expenditure EBITDA EBITDA (US$/tonne)
Source: Company, Angel Research

2QFY12 38,023 33,868 17,326 2,288 3,943 6,950 3,361 4,657 100

2QFY11 34,993 30,380 16,542 2,005 2,893 5,612 3,328 5,090 110

yoy (%) 8.7 11.5 4.7 14.1 36.3 23.8 1.0 (8.5) (8.8)

1QFY12 39,313 34,959 17,038 2,246 3,698 8,186 3,790 4,772 106

qoq (%) (3.3) (3.1) 1.7 1.9 6.6 (15.1) (11.3) (2.4) (5.8)

November 4, 2011

(%)

8,000

10

SAIL | 2QFY2012 Result Update

Forex loss hits net profit

The company reported an exceptional item related to forex loss of `509cr in 2QFY2012 compared to forex gain of `153cr in 2QFY2011. Hence, net profit decreased by 54.6% yoy to `495cr. However, excluding exceptional items, adjusted net profit grew by 7.0% yoy to `1,003cr (above our estimate of `836cr) in 2QFY2012.

Exhibit 6: EBITDA margin stood at 12.2%

3,500 3,000 2,500 2,211 1,843 1,542 1,796 1,312 1,327 3,097 30.0 25.0 20.0

Exhibit 7: Adj. PAT stood at `1,003cr

2,500 2,000 1,507 1,500 1,000 500 0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Adj. PAT (LHS) Adj. PAT margin (RHS) 1,177 937 2,085 50 40 30 20 10 0 (10) (20) (30) (40) (50)

(` cr)

(%)

1,500 1,000 500 0

839

1,003

10.0 5.0 0.0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 EBITDA (LHS) EBITDA margin (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

November 4, 2011

(%)

15.0

(` cr)

2,000

1,107

SAIL | 2QFY2012 Result Update

Investment rationale
Volume growth to double, albeit in 23 years
SAIL is expected to increase its saleable steel production capacity from 12.5mn tonnes to 23.1mn tonnes by FY2015 at a capex of `70,000cr. We expect strong profitability from these plants, with captive iron ore backing the upcoming steel expansion. Also, we expect SAIL's older loss-making plants to be modernized as part of its modernization program. However, we do not rule out delays and cost over-runs in its expansion plans.

Exhibit 8: Capacity to double by FY201314

30

(mn tonne)

20

11.7

11.1

10.5

10 14.5 0 Hot Metal Existing Crude steel Expansion Saleable Steel 13.5 12.6

Source: Company, Angel Research

Product mix to improve

Post the expansion and modernization of the steel plants, SAIL will benefit from the improvement in its product mix. Management plans to reduce sale of semis to nil post the expansion of its steel capacity. Semis constituted 19.7% of the companys product mix in FY2010 (11.0% of the product mix in FY2011). Contribution from high-margin structural steel is also expected to improve.

Exhibit 9: Product mix (%, FY2010)

2.9 4.5 8.5 24.1 0.6 HRC sheets CRC sheets Plates Semis Rounds/Bars 8.7 19.7 20.5 Railway material Structurals Coated products Pipes

Exhibit 10: Product mix post expansion (%)

0.6 4.8 15.0 22.1 HRC sheets CRC sheets Plates Semis 7.4 10.4 Rounds/Bars Railway material Structurals 23.3 16.4 Coated products Pipes

10.2

Source: Company, Angel Research

Source: Company, Angel Research

November 4, 2011

SAIL | 2QFY2012 Result Update

Cost pressures to persist

SAILs 2QFY2012 profitability was hit on account of higher power, fuel and staff costs. Going forward, we expect these cost pressures to result in margin contraction. Further, we do not expect meaningful rise in steel prices in the near term. Nevertheless, declining coking coal prices (partially offset by INR depreciation against the USD) should benefit its margins slightly.

Outlook and valuation

SAIL is expected to increase its saleable steel production capacity from 12.5mn tonnes to 23.1mn tonnes by FY2015. With captive iron ore backing the upcoming steel expansion, we expect robust profitability from these plants. Also, we expect SAIL's older loss-making plants to be modernized as part of its modernization program. However, the company has reported delays in its expansion plans. The stock is currently trading at a 9.1x and 6.4x FY2012 and FY2013 EV/EBITDA. Given the companys modest volume growth in the near term and fair valuations, we have a Neutral view on the stock. We have lowered our sales volumes estimates for FY2012 as we expect steel demand to remain subdued in 2HFY2012. Further, considering slower progress in SAILs expansion plans, we have lowered our FY2013 sales volumes estimates. Hence, our profitability estimates stand reduced.

Exhibit 11: Key assumptions

FY2012E Saleable steel volume (mn tonnes) Average realisation (`/tonne)
Source: Angel Research

FY2013E
14.2 38,739

12.0 38,356

Exhibit 12: Change in estimates

(` cr) Net sales EBITDA EBITDA margin (%) PBT Net income Net margin (%)
Source: Company, Angel Research

Earlier estimates FY12

47,903 7,524 15.7 6,518 4,367 9.1

Revised estimates FY12

46,170 6,261 13.6 5,686 3,809 8.3

Upgrade/(Downgrade) (%) FY12

(3.6) (16.8) (215)bp (12.8) (12.8) (87)bp

FY13
56,016 10,418 18.6 8,823 5,912 10.6

FY13
54,932 9,414 17.1 7,577 5,077 9.2

FY13
(1.9) (9.6) (146)bp (8.3) (8.3) (64)bp

Exhibit 13: EPS Angel forecast vs. consensus

Year (%) FY2012E FY2013E
Source: Bloomberg, Angel Research

Angel forecast
9.2 12.3

Bloomberg consensus
11.5 13.1

Variation (%)
(19.8) (6.2)

November 4, 2011

SAIL | 2QFY2012 Result Update

Exhibit 14: EV/EBITDA

180,000 160,000 140,000 120,000 100,000
(`cr)

80,000 60,000 40,000 20,000 0

Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11
Jan-11

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

2x

5x

8x

11x

14x

Source: Bloomberg, Angel Research

Exhibit 15: P/E band

400 350 300 250
(`)

200 150 100 50 0

Apr-07 Oct-05 Oct-08 Apr-10 Jul-06 Jul-09 Oct-11 Jan-05 Jan-08

5x

10x

15x

20x

Source: Bloomberg, Angel Research

Exhibit 16: P/BV band

450 400 350 300 250 200 150 100 50 0

(`)

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

1x

2x

3x

4x

Source: Bloomberg, Angel Research

November 4, 2011

Oct-11

Oct-11

SAIL | 2QFY2012 Result Update

Exhibit 17: Recommendation summary

Company SAIL Tata Steel JSW Steel CMP (`) Target Price (`) Reco. Mcap (` cr) Upside (%) P/E (x) FY12E FY13E P/BV (x) FY12E FY13E EV/EBITDA (x) FY12E FY13E RoE (%) FY12E FY13E RoCE (%) FY12E FY13E

109 462 668

614 -

Neutral Buy Neutral

45,104 44,316 14,901

33 -

11.8 6.6 9.8

8.9 5.9 5.7

1.1 1.0 0.9

1.0 0.8 0.8

9.1 5.3 4.9

6.4 4.4 3.6

9.7 26.1 10.0

11.7 15.4 15.3

7.2 11.4 10.1

9.4 11.5 14.6

Source: Company, Angel Research

November 4, 2011

SAIL | 2QFY2012 Result Update

Profit & loss statement

Y/E March (` cr) Gross sales Less: Excise duty Net sales Other operating income Total operating income % chg Total expenditure Net raw materials Other mfg costs Personnel Other EBITDA % chg (% of net sales) Depreciation EBIT % chg (% of net sales) Interest charges Other income (% of PBT) Share in profit of asso. Recurring PBT % chg Extra. Inc/(Expense) PBT (reported) Tax (% of PBT) PAT (reported) Add: Earnings of asso. Less: Minority interest Extra. Expense/(Inc.) Net income (reported) Adj. net income % chg (% of net sales) Basic EPS (`) Fully diluted EPS (`) % chg 39,999 16.5 28,875 13,624 6,119 7,919 1,212 11,124 17.9 27.8 1,235 9,889 20.3 24.7 251 1,831 16.0 11,469 21.7 11,469 3,932 34.3 7,537 7,537 7,537 21.5 18.8 18.2 18.2 21.5 43,719 9.3 35,185 18,149 6,656 8,402 1,978 8,534 (23.3) 19.5 1,285 7,249 (26.7) 16.6 253 2,408 25.6 9,403 (18.0) 9,403 3,229 34.3 6,175 6,175 6,175 (18.1) 14.1 14.9 14.9 (18.1) FY2008 46,046 6,047 39,999 FY2009 49,250 5,531 43,719 FY2010 43,935 3,383 40,551 756 41,307 (5.5) 31,362 17,198 5,938 5,417 2,809 9,945 16.5 24.5 1,337 8,608 18.8 21.2 402 1,926 19.0 10,132 7.7 10,132 3,378 33.3 6,754 6,754 6,754 9.4 16.7 16.4 16.4 9.4 FY2011 47,042 4,321 42,720 663 43,383 5.0 35,839 18,909 5,983 7,627 3,319 7,544 (24.1) 17.7 1,484 6,060 (29.6) 14.2 472 1,440 20.5 7,027 (30.6) 130 7,157 2,276 31.8 4,881 4,881 4,881 (27.7) 11.4 11.8 11.8 (27.7) FY2012E 51,300 5,130 46,170 535 46,705 7.7 40,445 21,558 6,787 8,314 3,786 6,261 (17.0) 13.6 1,616 4,645 (23.4) 10.1 508 1,549 27.2 5,686 (19.1) 5,686 1,876 33.0 3,809 3,809 3,809 (22.0) 8.3 9.2 9.2 (22.0) FY2013E 61,035 6,104 54,932 550 55,482 18.8 46,068 24,122 8,075 9,311 4,559 9,414 50.4 17.1 2,472 6,942 49.5 12.6 1,099 1,734 22.9 7,577 33.3 7,577 2,500 33.0 5,077 5,077 5,077 33.3 9.2 12.3 12.3 33.3

November 4, 2011

SAIL | 2QFY2012 Result Update

Balance sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders funds Share application money Share warrants Minority interest Total loans Deferred tax liability Total liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Goodwill Investments Current assets Cash Loans & advances Other Current liabilities Net current assets Mis. exp. not w/off Total assets 30,923 32,729 35,396 19,351 20,460 21,781 11,571 12,269 13,615 2,390 538 6,544 15,026 653 669 4,130 4,130 4,130 FY2008 FY2009 FY2010 FY2011 FY2012E 4,130 36,801 40,931 FY2013E 4,130 41,394 45,525

4,130 33,474 37,604 12 1 21,260 1,557 60,434 40,466 23,833 16,633 22,581 61 38,833 17,748 4,904 16,181 17,676 21,159 60,434

18,933 23,854 29,186 23,064 27,984 33,317 3,045 1,569 1,332 1,415

12
-

12
-

1
26,260 1,557

1
31,260 1,557

7,539 16,511

27,677 36,855 51,243

68,761
62,266 25,449 36,817 15,081 61 36,745 14,516 4,904 17,325 19,944 16,802 68,761

78,355
77,766 27,920 49,845 9,581 61 39,638 15,754 4,904 18,980 20,771 18,868 78,355

26,318 34,511 39,081 13,759 18,229 22,439 2,380 2,122 3,343 10,178 14,160 13,299 13,199 17,122 17,149 13,119 17,389 21,933 59 27,677 36,855 51,243

November 4, 2011

10

SAIL | 2QFY2012 Result Update

Cash flow statement

Y/E March (` cr) Profit before tax Depreciation Change in working capital Less: Other income Direct taxes paid Cash flow from operations (Inc.)/ Dec. in fixed assets (Inc.)/ Dec. in investments (Inc.)/ Dec. in loans and adv. Other income Cash flow from investing Issue of equity Inc./(Dec.) in loans Dividend paid Others Cash flow from financing Inc./(Dec.) in cash Opening cash bal. Closing cash bal. FY2008 FY2009 11,469 1,234 201 3,783 8,378 (20) 9,403 1,287 990 3,139 6,124 (105) FY2010 10,132 1,334 1,492 (4,499) 3,659 4,800 (10) (2,114) (8,021) 5 8,887 1,400 96.5 7,395 4,174 18,265 22,439 FY2011 FY2012E FY2013E 7,390 1,607 (3,265) (930) 2,303 2,496 (8) (1,697) 20 3,609 1,400 536 1,693 (4,973) 22,721 17,748 5,686 1,616 1,125 1,876 6,550 5,000 483 4,517 (3,232) 17,748 14,516 7,577 2,472 (827) 2,500 6,721 5,000 483 4,517 1,238 14,516 15,754

(743) (2,418)

(2,199) (5,403) (10,125) (10,851) (14,300) (10,000)

(1,079) (1,101) (1,140) (4,406) 1 (1,112) 1,643 334 (3,089) 4,150 1 4,520 1,496 273 2,751 4,469

(9,162) (14,300) (10,000)

9,610 13,759 13,759 18,229

November 4, 2011

11

SAIL | 2QFY2012 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 (days) Receivables (days) Payables (days) WC cycle (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest coverage
(0.5) (1.0) 39.4 (0.4) (1.3) 28.6 (0.2) (0.5) 21.4 0.1 0.5 12.8 0.3 1.9 9.1 0.3 1.6 6.3 1.3 184 28 80 61 1.4 204 25 84 66 1.2 194 33 132 70 1.1 222 36 118 69 0.9 210 35 118 77 0.8 200 35 118 68 39.1 83.8 37.3 14.0 31.3 18.3 19.2 65.8 21.9 10.7 34.9 13.7 7.2 15.7 9.7 9.4 15.1 11.7 24.7 65.7 2.9 47.8 47.8 16.6 65.7 1.3 13.9 13.9 21.2 66.7 1.7 24.3 24.3 14.2 68.2 1.2 11.6 1.5 0.1 12.5 10.1 67.0 1.0 6.5 1.3 0.3 8.0 12.6 67.0 1.0 8.1 2.4 0.3 10.0 18.2 18.2 21.2 3.7 55.8 14.9 14.9 18.1 67.8 16.4 16.4 19.6 3.3 81.7 11.8 11.8 15.4 2.6 91.0 9.2 9.2 13.1 1.0 99.1 12.3 12.3 18.3 1.0 110.2 6.0 5.1 2.0 3.4 0.9 3.1 1.2 7.3 6.0 1.6 0.8 4.0 0.9 6.7 5.6 1.3 3.0 1.0 4.0 0.8 9.2 7.1 1.2 2.4 1.1 6.4 0.8 11.8 8.3 1.1 0.9 1.2 9.1 0.8 8.9 6.0 1.0 0.9 1.1 6.4 0.8

FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

November 4, 2011

12

SAIL | 2QFY2012 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

SAIL No No 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 4, 2011

13