20 June 2013 Update | Sector: Capital Goods

Larsen & Toubro

BSE SENSEX S&P CNX

18,719

5,656

CMP: INR1,396

TP: INR1,721

Buy

What can support FY14 margins? Analyzing possibilities

Circumspect about nature of project wins; medium term margins at risk
Bloomberg LT IN Equity Shares (m) 612.0 M.Cap. (INR b)/(USD b) 854.4/14.3 52-Week Range (INR) 1,720/1,308 1,6,12 Rel. Perf. (%) -6/-9/-7

Financials & Valuation (INR b)

Y/E March 2013 2014E 2015E 689.8 75.0 48.9 79.8 -0.9 527.3 15.0 12.8 28.9 17.5 2.6 12.2 1.4 805.0 83.5 56.7 92.6 16.0 590.2 15.0 12.8 28.9 15.1 2.4 11.4 1.6

Sales 614.7 EBITDA 64.1 Adj PAT* 49.3 EPS (INR)* 80.6 EPS Gr. (%) 3.3 BV/Sh (INR) 476.2 RoE (%) 16.2 RoCE (%) 14.3 Payout (%) 28.0 Valuations P/E (x)* 18.3 P/BV (x) 3.1 EV/EBITDA (x) 14.4 Div Yield (%) 1.3 *Consolidated

In FY13, L&T's E&C EBITDA margin declined 110bp (v/s guidance of +/-50bp) to 12%. The margin contraction, particularly in 4QFY13, led to sharp volatility in stock price, with L&T underperforming the Sensex by 6% over last one month. For FY14, management has guided for stable E&C EBITDA margins. We model E&C EBITDA margin decline of 75bp in each of FY14 and FY15, driven by the increasing competitive intensity, constrained environment and higher share of overseas projects. We crystal gaze the possibilities that can support margins in FY14. Both the factors that impacted margins in FY13 (increased contribution of overseas business and new project start-ups in domestic market not crossing the 25% margin recognition threshold) are likely to turn favorable in FY14. We continue to remain circumspect about the margin profile of overseas orders, given possibilities of poor fixed cost absorption and learning curve associated with new geographies and new segments. Also, large size orders would increase concentration risks. The skeptism is also driven by our own lack of understanding on several of these variables. L&T is exposed to several levers across business/geographic segments and has emerged as the E&C partner of choice in India. This gives it a solid foundation to capitalize on the next leg of the investment cycle. We remain positive on L&T's longer term prospects. Maintain Buy, with an SOTP-based price target of INR1,721.

Twin factors that impacted FY13 margins likely to turn favorable in FY14
Shareholding pattern %
As on Mar-13 Dec-12 Mar-12 Dom. Inst 36.3 36.8 36.6 Foreign 21.0 21.0 19.7 Others 42.7 42.3 43.7

Contribution of overseas business in revenues expected to stabilize at 18.2%

% YoY FY12 FY13 FY14E Order intake (FY13 driven by domestic) Domestic -24.6 27.3 2.0 Overseas 215.1 14.2 33.0

Stock performance (1 year)

Domestic intake growth in FY13 was higher than overseas; unlike FY12 when the difference was stark Revenues (entire increase in FY13 by overseas) Domestic 23.5 4.5 13.0 Healthy intake in FY13 likely to support FY14 Overseas 26.1 118.6 9.0 domestic revenues; while growth in overseas business to normalize Overseas Contribution (%) Order intake 17.9 16.3 21.0 Contribution of overseas business to revenues Revenues 9.9 18.6 18.2 increased sharply in FY13; should stabilize in FY14

Project execution cycle in domestic market supporting margins: Domestic revenue

growth declined sharply from 24% in FY12 to just 4.5% in FY13. New projects that did not cross the 25% margin threshold accounted for a higher share of overall revenue. We believe a large part of these projects should cross the threshold in 2HFY14, leading to margin expansion. However, 1HFY14 margins could still remain constrained.

Satyam Agarwal (AgarwalS@MotilalOswal.com); +91 22 3982 5410 Deepak Narnolia (Deepak.Narnolia@MotilalOswal.com) / Nirav Vasa (Nirav.Vasa@MotilalOswal.com)
Investors are advised to refer through disclosures made at the end of the Research Report.

Larsen & Toubro

Factors that impacted FY13 margins to support FY14 margins

FY13 E&C margins were impacted by (1) increase in share of overseas business from 10% of revenue in FY12 to 19%, and (2) new project start-ups in the domestic segment not crossing the 25% margin recognition threshold. In FY13, domestic revenue grew just 4.5%, while overseas revenue grew 119%. This is largely a reflection of the order intake trend in FY12 - overseas intake was up 215% while domestic intake declined 25%. In FY14, we expect domestic revenue to grow 13% and overseas revenue to grow 9%, again a reflection of the 27% increase in domestic intake in FY13 v/s 14% increase in overseas intake. We expect overseas contribution to remain at 18-19% in FY14, similar to FY13 levels. Domestic revenue growth declined sharply from 24% in FY12 to just 4.5% in FY13. New projects that did not cross the 25% margin threshold accounted for a higher share of overall revenue. We believe a large part of these projects should cross the threshold in 2HFY14, leading to margin expansion. However 1HFY14 margins could still remain constrained.

Constrained ordering in FY12 impacted domestic revenue in FY13; expect overseas contribution to stabilize
In FY13, domestic revenue grew just 4.5%, while overseas revenue grew 119%. This is largely a reflection of the order intake trend in FY12 - overseas intake was up 215% while domestic intake declined 25%. In FY14, we expect domestic revenue to grow 13% and overseas revenue to grow 9%, again a reflection of the 27% increase in domestic intake in FY13 v/s 14% increase in overseas intake. We expect overseas contribution to remain at 18-19%, similar to FY13 levels. Domestic E&C segment (INR b) Overseas E&C segment (INR b)

Domestic order intake healthy in FY13, but several projects did not cross margin recognition threshold
Domestic revenue growth declined sharply from 24% in FY12 to just 4.5% in FY13. New projects that did not cross the 25% margin threshold accounted for a higher share of overall revenue. We believe a large part of these projects should cross the threshold in 2HFY14, leading to margin expansion.

Source: Company, MOSL 20 June 2013 2

Larsen & Toubro

E&C margins in FY13 were impacted by the twin factors

E&C EBITDA margin has corrected 220bp from peak levels of 14.2% in mid-FY11 to 12% in FY13. We expect a further 150bp margin contraction by FY15.

We model E&C EBITDA margins to decline 75bps each in FY14 and FY15. However, there exist possibilities that near term margin will be supported by twin factors which impacted margins in FY13
Source: Company, MOSL

Remain circumspect about risk profile of overseas projects

Some fruition of L&T's intent to increase its presence in overseas markets is evident, with the company achieving pre-qualifications (PQs) in bidding for several large projects: Urban Transport: PQs (part of consortium) for two metro rail projects (Doha and Riyadh Metro Rail; USD7b-8b each), freight corridor for Etihad Rail (USD11b), etc. Hydrocarbons: L&T has witnessed initial success, with orders of USD500m600m each from Saudi Arabia, Abu Dhabi and Oman in the last 18-24 months.

While the EBITDA margins in overseas business is meaningfully lower at 8%, we understand NPM is possibly not compromised given lower tax rates and better NWC cycle

Also, it received two orders of USD100m each from Thailand/Myanmar in 1QFY12/ 3QFY13 - an important geography addition. While the expected intake from the overseas market in FY13 was INR200b, the actual award was INR130b. Possible order intake of INR250b in FY14 (according to the management) from the overseas markets will entail a share of 1.5-2% in Middle East ordering, based on recent aggregate ordering trends (refer to our update, Overseas Juggernaut, May 2013). For L&T, a key structural trend is increasing contribution from the overseas business (expected to contribute ~45% of FY14 consolidated EPS), led by E&C and also IT/IES businesses. For the overseas E&C business, we remain skeptical on margins and risk profile. Competitive intensity remains high and the management has stated that overseas orders would yield significantly lower margins (~8%) than domestic orders (~12%). Given the initial learning curve in segments like metro rail, railways, etc, and new geographies, initial margins could remain volatile. Also, large size orders would increase concentration risks. This structural trend makes us more circumspect on the possible risk profile, also driven by our own lack of understanding on several of these variables.

20 June 2013

Larsen & Toubro

L&T: Gearing up the overseas juggernaut - possible 1.5-2% market share in Middle East v/s 0.25-0.5% in FY13! Expect strong growth in overseas order intake in FY14 Ordering in Middle East remains constrained (TTM)

Source: MEED, Company, MOSL

L&T: Key order wins from Middle East

Period 1QFY12 Details INR M Country PTTEP International Limited - Zawtika Development Project, Phase-1A 7,253 UAE 1QFY12 Construction of PO and LDPE plant for Technimont-Samsung JV 3,250 UAE 1QFY12 PTTEP International Limited - Zawtika Development Project, Phase-1A 5,000 Myanmar 2QFY12 EPC pipeline work for gas project (from Abu Dhabi Gas Industries) 8,390 UAE 2QFY12 EPC project for Field Development project from Abu Dhabi Marine 19,620 UAE 2QFY12 PTTEP Intl, Thailand for Zawtika Development Project, Phase-1A 1,160 UAE 2QFY12 Project order from Petroleum Development Oman LLC 7,000 Oman 2QFY12 EPC job at Lekhwair Gas field Development Project for PDO 7,010 Oman 4QFY12 Procure & Construction of Solution Polyethylene & Speciality Elastomers Package, Sadara Chemical Company Saudi Arabia 2QFY13 EPC of Saih Rawl Depletion Compression Ph 2, Petroleum Development Oman LLC 13,020 Oman 3QFY13 Offshore EPC, installation and commissioning project from Carigali Myanmar Hong Kong) Limited 5,500 Myanmar 1QFY14 Midyan Oil Fields, Saudi Arabia ~USD300m* Saudi Arabia 1QFY14 Batinah Expressway, Oman (Packages 4, 5, 6) ~USD1b# Oman * Press release does not state value of Saudi Aramco Midyan order; amount based on past media articles; # Based on media articles, L&T is L1 in these projects Source: Company, MOSL

20 June 2013

Larsen & Toubro

L&T: Operating Matrix

Order Intake (INR b) Growth (%) Process Oil & Gas Power Infrastructure Others Order Intake (INR b) Domestic Growth (%) Overseas Growth (%) Order Book (INR B) Growth (%) Process Oil & Gas Power Infrastructure Others BTB (x) BTB (x) Ex-Power BTB (x) E&C BTB (x) E&C Ex-Power Gross Revenues (INR b) Growth (%) E&C MIP EBG EBITDA Margin (%) E&C MIP EBG Standalone EPS* Consolidated EPS FY08 420 37 63 105 59 130 63 420 361 44 60 8 527 43 74 121 84 190 58 2.1 2.1 2.7 2.7 252 41 190 23 24 12.9 12.8 18.9 17.0 34.8 39.1 FY09 516 23 80 62 129 201 41 516 450 25 66 11 703 33 112 98 155 288 49 2.1 2.0 2.5 2.4 340 35 280 24 25 13.0 12.9 20.1 13.2 46.0 51.3 21.7 21.8 9.3 FY10 696 35 90 139 230 188 49 696 661 47 35 -47 1,002 43 160 150 301 331 60 2.7 2.3 3.1 2.7 370 9 318 21 27 14.5 13.6 22.1 15.7 51.4 61.6 17.4 22.3 5.5 FY11 798 15 128 56 255 303 56 798 718 9 80 129 1,302 30 208 156 417 469 52 3.0 2.4 3.4 2.8 439 19 377 27 28 14.2 13.6 21.2 16.7 55.8 69.7 16.6 17.3 6.7 FY12 706 -12 78 78 148 339 64 706 579 -19 127 59 1,457 12 219 146 408 627 58 2.7 2.4 3.1 2.7 531 21 465 27 31 13.2 13.1 19.5 12.7 66.4 78.0 17.8 16.0 12.0 FY13 882 25 53 89 264 396 79 880 730 26 150 18 1,536 5 154 123 430 753 77 2.5 2.4 2.8 2.6 633 19 541 22 32 11.9 12.0 16.3 13.6 67.8 80.6 FY14E 946 7 61 134 264 396 91 946 746 2 200 33 1,799 17 153 189 501 855 101 2.6 2.5 3.0 2.8 683 8 606 24 33 12.0 11.3 16.5 14.5 70.5 79.8 FY15E 1,119 18 70 174 330 436 109 1,119 879 18 240 20 2,121 18 162 259 606 958 137 2.7 2.6 3.0 2.9 798 17 708 27 38 11.4 10.5 17.0 14.5 78.4 92.6

RoE (%) [Standalone] 22.0 RoE (%) [Consolidated] 22.6 Wkg. Capital(% of sales)# 7.1 # Adj for Subs Adv

16.2 15.0 15.0 16.8 15.5 17.2 19.9 Source: Company, MOSL

20 June 2013

Larsen & Toubro

Financials and Valuation

Income Statement
Y/E March 2010 Total Revenues 373,556 Growth Rate (%) 8.8 Excise Duty 3,208 Net Revenues 370,348 Growth Rate (%) 9.1 Manufacturing Expenses 285,374 Staff Cost 23,791 S G &A Expenses 13,789 EBITDA 47,394 Change (%) 21.6 EBITDA Margin (%) 12.8 Depreciation 3,797 EBIT 43,597 Net Interest 5,053 Other Income 7,422 Non-recurring Other Income 2,280 Add: Trf to Rev. Res. 13 Profit before Tax 48,259 Tax 16,409 Effective Tax Rate (%) 34.0 Reported Profit 43,760 EO Adjustments 11,910 Adjusted Profit 31,850 Cons. Profit (Adj) 37,110 Growth (%) 23.5 2011 442,961 18.6 3,902 439,059 18.6 334,681 28,301 19,778 56,299 18.8 12.8 5,905 50,394 6,193 9,106 2,369 11 55,686 19,436 34.9 39,580 3,329 36,250 42,416 14.3 2012 537,378 21.3 5,673 531,705 21.1 410,202 36,635 22,230 62,639 11.3 12.2 6,817 55,822 6,661 13,078 305 10 62,554 18,538 29.6 44,566 550 44,826 47,730 12.5 2013 614,709 14.4 5,976 608,733 14.5 479,524 44,363 20,775 64,071 2.3 10.5 8,185 55,886 9,824 18,509 0 10 64,581 17,940 27.8 49,116 2,475 47,327 49,327 3.3 2014E 689,812 12.2 7,282 682,530 12.1 531,150 48,800 27,592 74,989 17.0 11.0 9,354 65,635 11,500 13,983 0 10 68,127 19,757 29.0 48,370 0 48,370 48,866 -0.9

(INR Million)
2015E 805,028 16.7 8,498 796,530 16.7 627,124 53,679 32,201 83,525 11.4 10.5 10,089 73,436 11,000 14,849 0 10 77,295 23,188 30.0 54,106 0 54,106 56,691 16.0

Balance Sheet
Y/E March Equity Capital Reserves and Surplus Net Worth Debt Deferred Tax Liability Capital Employed Gross Fixed Assets Less : Depreciation Add : Capital WIP Net Fixed Assets Investments Inventory Sundry Debtors Cash & Bank Loans & Advances Other Current Assets Current Assets Current Liabilities Net Current Assets Capital Deployed E: MOSL Estimates 20 June 2013 2010 1,204 181,912 183,116 68,008 774 251,899 72,901 17,916 8,742 63,727 137,054 14,154 111,584 14,319 60,365 63,532 263,883 212,765 51,118 251,899 2011 1,218 217,245 218,463 71,611 2,635 292,708 89,465 23,025 7,713 74,153 146,848 15,772 124,276 17,296 82,253 110,501 350,099 278,392 71,707 292,708 2012 1,224 251,005 252,229 98,958 1,330 352,517 105,544 29,495 7,587 83,636 158,719 17,766 187,298 17,781 91,280 120,448 434,574 324,411 110,163 352,518 2013 1,224 290,203 291,427 88,342 2,442 382,211 131,212 37,692 4,500 89,020 161,036 20,641 226,130 14,556 91,630 118,730 471,687 339,532 132,155 382,211

(INR Million)
2014E 1,224 321,459 322,683 120,000 1,330 444,013 138,631 47,046 4,500 96,085 157,951 20,476 259,362 36,225 115,518 151,428 583,009 393,032 189,977 444,013 2015E 1,224 359,949 361,173 120,000 1,330 482,503 149,631 57,135 4,500 96,996 187,539 23,896 302,681 1,782 127,000 176,508 631,867 433,899 197,968 482,503

Larsen & Toubro

Financials and Valuation

Ratios
Y/E March Basic (INR) Adjusted EPS Growth (%) Consolidated EPS Growth (%) Con. EPS (Fully Diluted) Growth (%) Cash Earning per Share Book Value Dividend Per Share Div. Payout (Incl. Div Tax ) % Valuation (x) P/E (Standalone) P/E (Consolidated) Price / CEPS EV/EBITDA EV/ Sales Price / Book Value Dividend Yield Return Ratio (%) RoE RoCE Turnover Ratios Debtors (Days) Inventory (Days) Asset Turnover (x) Leverage Ratio Current Ratio (x) D/E (x) 17.4 14.0 109.0 13.8 1.5 1.2 -0.2 16.6 13.9 102.4 13.0 1.5 1.3 -0.1 17.8 14.1 127.2 12.1 1.5 1.3 0.0 2010 52.9 14.3 61.6 20.1 61.6 20.1 59.8 304.1 12.5 27.6 2011 59.5 12.6 69.7 13.0 69.7 13.0 69.4 358.8 14.5 28.4 2012 73.2 23.0 78.0 11.9 78.0 11.9 84.7 412.1 16.5 25.3 2013 77.3 5.6 80.6 3.3 80.6 3.3 90.7 476.2 18.5 28.0 19.1 18.3 15.4 14.4 1.4 3.1 1.3 16.2 14.3 132.1 10.4 1.6 1.4 0.1 2014E 79.0 2.2 79.8 -0.9 79.8 -0.9 94.3 527.3 19.8 28.9 17.7 17.5 14.8 12.2 1.3 2.6 1.4 15.0 12.8 137.2 10.8 1.6 1.5 0.2 2015E 88.4 11.9 92.6 16.0 92.6 16.0 104.9 590.2 22.1 28.9 15.8 15.1 13.3 11.4 1.2 2.4 1.6 15.0 12.8 137.2 10.8 1.7 1.5 0.3

Cash Flow Statement

Y/E March PBT before EO Items Add : Depreciation Interest Less : Direct Taxes Paid (Inc)/Dec in WC CF from Operations (Inc)/Dec in FA (Pur)/Sale of Investments Investment in subs Advances to subs CF from Investments (Inc)/Dec in Net Worth (Inc)/Dec in Debt Less : Interest Paid Dividend Paid CF from Fin. Activity Inc/Dec of Cash Add: Beginning Balance Closing Balance 20 June 2013 2010 48,259 4,159 5,053 16,409 11,407 52,469 -15,940 -32,811 -21,606 -1,366 -71,722 23,851 2,448 5,053 7,338 13,908 6,566 7,753 14,319 2011 55,686 6,003 6,193 19,436 -9,338 39,107 -16,429 9,972 -19,766 -9,598 -35,822 7,927 3,603 6,193 8,973 -3,636 2,979 14,319 17,298 2012 62,554 7,005 6,661 18,538 -34,431 23,250 -16,487 4,108 -15,979 -4,703 -33,061 -979 27,347 6,661 9,962 9,745 483 17,296 17,779 2013 64,581 8,185 9,824 18,670 -42,560 21,360 -11,920 28,620 -10,253 -1,797 4,650 -1,630 11,820 9,824 9,886 29,900 -3,891 17,781 13,891

(INR Million)
2014E 68,127 9,354 11,500 19,757 -19,343 49,881 -10,000 10,000 -30,110 -2,569 -32,679 0 5,000 11,500 13,071 -19,571 -2,370 38,595 36,225 2015E 77,295 10,089 11,000 23,188 -41,520 33,675 -11,000 0 -29,587 -2,569 -43,157 0 0 11,000 13,961 -24,961 -34,442 36,225 1,782 7

Capital Goods Report Gallery

Larsen & Toubro

N O T E S

20 June 2013

Disclosures
This report is for personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . MOSt 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 report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents. MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Group/Directors ownership of the stock 3. Broking relationship with company covered 4. Investment Banking relationship with company covered Larsen & Toubro No No No No

Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.

For U.K.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to which this document relates is only available to investment professionals and will be engaged in only with such persons.

For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement. The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited: Nihar Oza Kadambari Balachandran Email: niharoza.sg@motilaloswal.com Email : kadambari.balachandran@motilaloswal.com Contact: (+65) 68189232 Contact: (+65) 68189233 / 65249115 Office address: 21 (Suite 31), 16 Collyer Quay, Singapore 049318

Motilal Oswal Securities Ltd

Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025 Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com