Nsdl Quarterlystatement 01-01-2012 to 31-03-2012
Transcript of Nsdl Quarterlystatement 01-01-2012 to 31-03-2012
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7/27/2019 Nsdl Quarterlystatement 01-01-2012 to 31-03-2012
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June 3, 2013
ICICI Securities Ltd|Retail Equity Research
Result Update
WHATS CHANGEDPRICE TARGET................................ .................................... ....... Changed from | 45 to | 28
EPS (FY14E)........................................................................................................Unchanged
EPS (FY15E)..........................................................................................Introduced at | 11.5
RATING...............................................................................................................Unchanged
When interest burden outweighs allJyoti Structures (JSL) put up an improved business performancescorecard in Q4FY13, buoyed by superior execution and well maintainedmargins, leading to operational profit of | 99.1 crore and EBITDA marginsof 10.6%. However, of this | 99.1 crore, only 22.4% were converted toPAT, as the heavy burden of finance cost ate away 61.7%. The debt hasmounted from | 613 crore at FY12 to | 954 crore at FY13 end. For thequarter, the topline grew a stellar 27% to | 935 crore yet the PAT came inat | 22.7 crore, primarily pulled down by high interest burden.Order backlog, execution and bidding pipeline remain healthyThe order backlog stood at | 4800 crore, with order inflows touching| 1100 crore for the quarter and | 3246 crore for the full year. Of the totalorder book, 27% comes from PGCIL orders, 48% by SEB orders while thebalance came from international orders. For FY14E, the managementexpects the topline to grow 10-15%, with EBITDA margins in and around10%, given rising share of international orders. Over the next twoquarters, the company has a bidding pipeline of | 6,000-7000 crore, with
half the opportunity rising in the domestic market (primarily from SEBsfrom Andhra Pradesh, Maharashtra, PGCIL) and the rest coming frominternational geographies like Ghana, Ethiopia, Nepal and Tanzania.
but working capital issues overshadows all othersJSL continues to face working capital issue, with the huge interest burdensuppressing profitability. On the subsidiary performance front, Gulf Jyotihad a topline of 287 million dirham and a bottomline of 12 million dirham.Jyoti Africa was able to break even, at a topline of 170 million ZAR.However, Jyoti America posted a loss of $8 million, on revenues of $14million, being the companys first year of operation. The managementbelieves this loss will be in line with expectation and FY14E will be thebreak even year.
Deteriorating balance sheet quality to be key concernWe believe despite a healthy order backlog, reasonable margin profileand robust execution, unrelenting high levels of working capital debtwould mar profit. Though valuations at these levels look inexpensive, a rerating would only be due on significant improvement of the workingcapital cycle. We value the stock at 3.5x FY15E EV/EBITDA at | 28/share.
Exhibit 1:Financial Performance(| Crore) Q4FY13 Q4FY13E Q4FY12 Q3FY13 QoQ (Chg %) YoY (Chg %)
Total Operating Income 938.5 807.2 735.9 619.7 51.4 27.5
EBITDA 99.1 83.1 82.5 62.6 58.3 20.0
EBITDA Margin (%) 10.6 10.3 11.2 10.1 46 bps -66 bps
Interest 61.4 40.7 40.5 38.3 60.4 51.7
Reported PAT 22.2 25.9 31.7 13.4 65.6 -29.8 Source: Company, ICICIdirect.com Research
Jyoti Structures (JYOSTR)
| 27
ting matrix
ing : Hold
get : | 28
get Period : 12 months
ential Upside : 3%
y Financials
Crore FY12 FY13E FY14E FY15E
et Sales 2,592 2,805.9 3,121.3 3,539.9
BITDA 280.0 282.9 313.7 335.4
et Profit 85.5 65.7 80.9 94.9
PS (|) 10.4 8.0 9.8 11.5
luation summary
FY12 FY13E FY14E FY15E
/E 2.6 3.4 2.7 2.3
arget P/E 4.7 6.2 5.0 4.3
V / EBITDA 2.8 3.4 3.3 3.5
/BV 0.3 0.3 0.3 0.3
oNW 12.8 9.1 10.2 10.8
oCE 20.1 16.8 17.3 16.6
ock data
arket Capitalization | 222 Crore
tal Debt (FY13E) | 814.4 Crore
sh and Investments (FY13E) | 79.5 Crore
| 956.8 Crore
week H/L 51 / 27
uity capital | 16.4 Crore
ce value | 2
Holding (%) 20.7
Holding (%) 8.6
ce movement
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alysts name
hirag J Shah
onabh Bubna
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Exhibit 2:Assumption(in %) FY12 FY13E FY14E FY15E
Order Inflow Growth -9.6 31.7 13.4 5.4
Order Book Growth -2.6 10.1 12.1 6.7
Revenue Growth 8.9 8.2 11.2 13.4
EBITDA Margin 10.8 10.1 10.0 9.5
PAT Growth -20.0 -23.2 23.2 17.3 Source: Company, ICICIdirect.com Research
Exhibit 3: Trend of order backlog for standalone business
3869 40304150 4106 4250 4100
4478 4461 4375 4299 43604636
48454605
4800
0
1000
2000
3000
4000
5000
6000
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
(|c
rore)
.
Source: Company, ICICIdirect.com Research
Exhibit 4: Order inflows: oscillating between good and poor performance
322
570
848
407
681 665
534
688
418
1100
621550
510
797
930
801
433
1100
0
200
400
600
800
1000
1200
Q3
FY09
Q4
FY09
Q1
FY10
Q2
FY10
Q3
FY10
Q4
FY10
Q1
FY11
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
Q2
FY13
Q3
FY13
Q4
FY13
(|crore
)
.
Source: Company, ICICIdirect.com Research
The order book is at | 4800 crore, implying 10.0% YoY
growth, tall enough to provide for revenue visibility for 1.7
years (on a TTM basis)
JSL secured orders worth | 1100 crore in Q4FY13,
implying an order replacement ratio of 1.2x. Most new
orders came in from international markets, with a poor run
at the most lucrative customer, PGCIL
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Exhibit 5: Break-up of order backlog in terms of business vertical
3230
3280
3090
2766
2625
2665
2616
2550
2907
2627
3120
595
205
848
963
817
872
834
1211
645
576
425
615
49
3
848
788
817
872
1252
727
1337 11
04
896
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
(|crore)
.
Transmission Substation Rural Electrification
Source: Company, ICICIdirect.com Research
Exhibit 6: Break-up of order backlog in terms of client exposure
27
48
25
PGCIL SEB's Others
Source: Company, ICICIdirect.com Research
Exhibit 7: Book to bill ratio provides high cushion to revenue visibility
2.1 2.12.2
2.1 2.1 2.12.0 2.0
1.9 1.9 1.81.7
1.7 1.71.8
1.91.8
1.7
1.0
1.3
1.6
1.9
2.2
2.5
Q3FY09
Q4FY09
Q1FY10
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
(x)
.
Source: Company, ICICIdirect.com Research
Key conference call highlights: The management has highlighted bidding opportunities to the
tune of ~| 6,000-7000 crore. Half the opportunities arise fromSEBs from Maharashtra, West Bengal and PGCIL among otherswhile the remaining arises from international geographies, likeGhana, Nepal and Tanzania among others
Total debt as of FY13 stood at | 954 crore, up from | 783 crore atH1FY13 end with the cost of debt remaining at ~12%
Debtor days stood at 230 days, same as in the last quarter The management expects to keep double digit margins for FY14E The management is focusing on cutting down the working capital
debt significantly in the current fiscal (FY14E)
We have built in topline growth of 11.2% for FY14E and 13.4% forFY15E, with operating margins in the range of 10% for FY14E and9.5% for FY15E. With the increasing tilt of the order book towardsthe international side, we believe a margin contract, going ahead,will be on the cards
The transmission order backlog comprises 65% of the overall
order backlog followed by the substation and rural
electrification segments at 12% and 23%, respectively. The
share of PGCILs order has fallen sequentially from 36% in
Q1FY13 to 29% in Q2FY13 and 27% in Q4FY13. Share of
SEBs in the backlog stands at half of the total pie
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Exhibit 8: Trend in revenue growth
200
300
400
500
600
700
800
900
1000
Q3FY09
Q4FY09
Q1FY10
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
(|crore)
.
-10
-5
0
5
10
1520
25
30
35
(%)
.
Revenue Growth (%)
Source: Company, ICICIdirect.com Research
Exhibit 9: EBITDA margins trend
11.3
10.4
11.011.2 11.0
12.8
11.311.6
11.411.6
11.010.8
10.1
11.2
9.8 9.710.1
8
9
10
11
12
13
14
Q3FY09
Q4FY09
Q1FY10
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
(%)
.
Exhibit 10: PAT build-up for Q4FY13 (as percentage of net sales)
71.5
6.9
9.0
2.4
10.6
100.0
1.20.76.50.3
2.0
0
20
40
60
80
100
TotalOperating
Income
Raw
Material
Expenses
Sub
Contracting
Charges
Other
Operating
Expenses
Employee
Expenses
Operating
Profit(EBITDA)
OtherIncome
Interest
Depreciation
TotalTax
PAT
(%)
Source: Company, ICICIdirect.com Research
Net sales at | 935.5 crore, up 27.7% YoY, were above our
expectations. For FY13 overall sales, | 2805.9 crore or78% came from the domestic segment while exports
made up 22%. Transmission revenues made up 79%,
substation 10% while rural electrification made up 11% of
the total revenues, respectively
EBITDA margins at 10.6% were above our estimates of
10.3%. Going ahead, we expect JSL to report margins in
the range of 9.5-10.0% over FY14E-15E
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Valuations & Outlook
We believe despite a healthy order backlog, reasonable margin profileand robust execution, unrelenting high levels of working capital debtwould mar profit. Though valuations at these levels look inexpensive, a rerating would only be due on significant restructuring of the workingcapital cycle. We have valued the stock at 3.5 FY14E EV/EBITDA tocapture the balance sheet risk and arrive at a fair value of | 28/share.
Exhibit 11: Key problem area for JSL as interest cost eating heavily into EBITDA:
Interest/EBITDA matrix
50.4
59.655.8
51.8
10
20
30
40
50
60
70
FY12 FY13E FY14E FY15E
(%
)
Source: Company, ICICIdirect.com Research
Exhibit 12: Twelve month forward P/E
0
2
4
6
8
10
12
14
16
18
20
22
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
(X)
12 Month Forward P/E
Source: Company, ICICIdirect.com Research
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Exhibit 13: Relative performance of JSL vis--vis broader markets and peers, normalised to 100
0
20
40
60
80
100
120
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
JYS IN Peer Index SENSEX
Source: Company, ICICIdirect.com Research
The Peer index is an equal weighted index of stock
performance of Kalpataru Power and KEC International,
normalised to 100
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Financial summary
Profit and loss statement(| Crore)
(Year-end March) FY12 FY13E FY14E FY15ETotal operating Income 2,592.4 2,805.9 3,121.3 3,539.9
Growth (%) 8.9 8.2 11.2 13.4
Raw Material Expenses 1,367.1 1,730.4 1,697.0 1,944.0
Employee Expenses 79.5 79.5 84.9 129.1
Sub Contracting Charges 592.3 446.0 646.8 732.7
Other Operating Expenses 273.6 261.6 351.0 398.7
Other expenses 0.0 0.0 0.0 0.0
Total Operating Expenditure 2,321.4 2,525.7 2,790.9 3,217.9
EBITDA 280.0 282.9 313.7 335.4
Growth (%) -0.4 1.1 10.9 6.9
Depreciation 21.4 24.4 27.3 29.6
Interest 141.0 168.7 175.0 173.6
Other Income 10.9 8.9 9.5 9.5
PBT 128.5 98.7 120.8 141.7
Others 0.0 0.0 0.0 0.0
Total Tax 43.0 33.0 39.9 46.8
PAT 85.5 65.7 80.9 94.9
Growth (%) -20.0 -23.2 23.2 17.3
EPS (|) 10.4 8.0 9.8 11.5 Source: Company, ICICIdirect.com Research
Cash flow statement(| Crore)
(Year-end March) FY12 FY13E FY14E FY15EProfit after Tax 85.5 65.7 80.9 94.9
Add: Depreciation 21.4 24.4 27.3 29.6
(Inc)/dec in Current Assets -577.6 -299.7 -242.3 -420.6
Inc/(dec) in CL and Provisions 390.3 85.2 110.2 195.7
Others 3.3 3.0 5.0 5.0
CF from operating activities -80.4 -124.4 -23.8 -100.4
(Inc)/dec in Investments -16.5 -5.0 0.0 0.0
(Inc)/dec in Fixed Assets -47.9 -39.5 -40.0 -25.0
Others 0.0 0.0 0.0 0.0
CF from investing activities -53.1 -30.3 -54.2 -10.8
Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0
Inc/(dec) in loan funds 164.7 200.0 50.0 100.0
Dividend paid & dividend tax -10.6 -11.5 -11.5 -11.5
Inc/(dec) in Sec. premium 0.0 0.0 0.0 0.0
Others 0.0 7.6 0.0 0.0
CF from financing activities 149.3 188.5 38.5 88.5
Net Cash flow 15.8 33.8 -39.5 -22.7
Opening Cash 29.9 45.7 79.5 40.0
Closing Cash 45.7 79.5 40.0 17.2 Source: Company, ICICIdirect.com Research
Balance sheet(| Crore)
(Year-end March) FY12 FY13E FY14E FY15E
LiabilitiesEquity Capital 16.4 16.4 16.4 16.4
Reserve and Surplus 654.0 708.1 777.5 860.9
Total Shareholders funds 670.4 724.6 794.0 877.4
Total Debt 614.4 814.4 864.4 964.4
Deferred Tax Liability 12.8 12.8 12.8 12.8
Minority Interest / Others 0.0 0.0 0.0 0.0
Total Liabilities 1,404.6 1,658.7 1,778.1 1,961.5
Assets
Gross Block 299.5 338.9 378.9 403.9
Less: Acc Depreciation 101.6 124.3 149.9 177.8
Net Block 197.9 214.7 229.1 226.1
Capital WIP 0.6 0.6 0.6 0.6
Total Fixed Assets 198.5 215.3 229.7 226.8
Investments 86.6 91.6 91.6 91.6
Inventory 265.7 271.6 361.2 414.7
Debtors 1,558.1 1,803.9 2,009.6 2,327.6
Loans and Advances 228.0 276.3 223.1 272.5
Other Current Assets 0.2 -0.2 0.2 -0.2
Cash 45.7 79.5 40.0 17.2
Total Current Assets 2,097.7 2,431.2 2,634.0 3,031.9
Creditors 563.0 606.4 701.2 775.9
Provisions 59.7 66.7 77.1 77.6
Total Current Liabilities 1,053.6 1,138.8 1,249.1 1,444.7
Net Current Assets 1,044.2 1,292.4 1,384.9 1,587.2
Others Assets 0.0 0.0 0.0 0.0
Application of Funds 1,404.6 1,658.8 1,778.2 1,961.6 Source: Company, ICICIdirect.com Research
Key ratios(Year-end March) FY12 FY13E FY14E FY15E
Per share data (|)
EPS 10.4 8.0 9.8 11.5Cash EPS 13.0 11.0 13.2 15.2
BV 81.5 88.1 96.6 106.7
DPS 1.1 1.2 1.2 1.2
Cash Per Share 5.6 9.7 4.9 2.1
Operating Ratios (%)
EBITDA Margin 10.8 10.1 10.0 9.5
PBT / Total Operating income 5.0 3.5 3.9 4.0
PAT Margin 3.3 2.3 2.6 2.7
Inventory days 34.3 35.0 37.0 40.0
Debtor days 219.4 235.0 235.0 240.0
Creditor days 79.3 79.0 82.0 80.0
Return Ratios (%)
RoE 12.8 9.1 10.2 10.8
RoCE 20.1 16.8 17.3 16.6
RoIC 13.3 11.2 11.5 10.8
Valuation Ratios (x)
P/E 2.6 3.4 2.7 2.3
EV / EBITDA 2.8 3.4 3.3 3.5
EV / Net Sales 0.3 0.3 0.3 0.3
Market Cap / Sales 0.1 0.1 0.1 0.1
Price to Book Value 0.3 0.3 0.3 0.3
Solvency Ratios
Debt/EBITDA 2.2 2.9 2.8 2.9
Debt / Equity 0.9 1.1 1.1 1.1
Current Ratio 2.0 2.1 2.1 2.1
Quick Ratio 1.9 2.1 2.1 2.1
Source: Company, ICICIdirect.com Research
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Company Description
Incorporated in 1974, Jyoti Structures (JSL) is an EPC player operating inthe power transmission sector. The company has capabilities toundertake transmission line, substation and distribution projects. Sinceinception, JSL has manufactured over 15,000 circuit km of high voltagetransmission lines and over 550,000 MT of transmission line towers. Ason Q3FY13, the companys order book stood at | 4,600 crore. OutsideIndia, JSL has a subsidiary, Jyoti Structures Africa (Pty) Ltd and a JV, GulfJyoti International LLC, which have been formed to tap power sectoropportunities in Africa and the Gulf region, respectively. The company isheadquartered in Mumbai. JSL is lately facing issues of stretched workingcapital, leading high levels of working capital debt and, consequently,higher interest burden.
Exhibit 14: Recommendation History
0
10
20
30
40
50
60
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-12
Nov-1
2
Dec-1
2
Jan-1
3
Feb-1
3
Mar-13
Apr-13
May-1
3
Jyoti Structures Target Price
Source: Bloomberg, ICICIdirect.com Research
Exhibit 15: Recent Releases
Date Event CMP Target Price Rating
31-Mar-11 Initiating Coverage 82 89 BUY
8-Apr-11 Q4FY11 Preview 90 89 BUY
31-May-11 Q4FY11 Result Update 86 98 BUY
5-Jul-11 Q1FY12 Preview 85 98 BUY
28-Jul-11 Q1FY12 Result Update 87 98 BUY
5-Oct-11 Q2FY12 Preview 63 98 BUY
28-Oct-11 Q2FY12 Result Update 61 85 BUY
6-Jan-12 Q3FY12 Preview 43 85 BUY
31-Jan-12 Q3FY12 Result Update 46 60 BUY
4-Apr-12 Q4FY12 Preview 43 60 BUY
28-May-12 Q4FY12 Result Update 40 55 BUY
5-Jul-12 Q1FY13 Preview 43 55 BUY
2-Aug-12 Q1FY13 Result Update 38 48 BUY
1-Sep-12 Q2FY13 Result Update 45 48 BUY
8-Jan-13 Q3FY13 Preview 46 48 BUY
4-Feb-13 Q3FY13 Result Update 41 45 Hold Source: Company, ICICIdirect.com Research
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ICICIdirect.com Research coverage universe (Capital Goods)CMP M Cap
(|) TP(|) Rating (| Cr) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Thermax (THERMA) 580 536 Hold 6902.0 29.8 28.6 31.9 19.5 20.3 18.2 3.7 3.3 3.0 23.9 20.9 20.7 19.1 16.3 16.2
BGR Energy (BGRENE) 174 211 Hold 1252.8 21.7 20.4 23.5 8.0 8.5 7.4 1.1 1.1 1.0 11.1 9.9 11.4 12.3 11.1 11.8
Sterlite Technologies (STEOPT) 22 28 Hold 838.5 1.1 1.8 2.0 19.3 12.2 10.5 0.8 0.8 0.8 7.0 7.9 8.3 3.7 5.5 6.1
KEC International (KECIN) 39 48 Hold 971.5 2.6 4.2 6.0 15.0 9.2 6.5 1.0 1.0 0.9 11.2 12.0 13.1 5.6 8.5 11.1
Jyoti Structures (JYOSTR) 27 28 Hold 216.0 8.0 9.8 11.5 3.4 2.7 2.3 0.3 0.3 0.3 16.8 17.3 16.6 9.1 10.2 10.8
Kalpataru Power (KALPOW) 73 94 Buy 2589.7 8.9 10.8 12.3 8.2 6.8 5.9 0.6 0.6 0.6 11.2 11.4 11.8 7.4 8.3 8.8
Larsen & Toubro (LARTOU) 1392 1604 Hold 84772.8 79.5 83.2 92.7 19.6 18.8 16.8 3.3 3.0 2.6 14.9 14.8 15.4 17.0 15.8 15.6
BHEL 200 193 Hold 48839.9 28.8 25.2 21.1 6.9 7.9 9.4 2.1 1.8 1.6 35.7 26.5 20.2 27.7 20.7 15.5
Sector / Company
RoE (%)EPS (|) P/E (x) P/BV (x) RoA (%)
Source: Company, ICICIdirect.com Research
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ICICI S i i L d
CICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
arget price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: > 10%/ 15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head Research [email protected] Research Desk,ICICI Securities Limited,1st Floor, Akruti Trade Centre,Road No. 7, MIDC,Andheri (East)
Mumbai 400 093
We /I, Chirag J Shah PGDBM Sonabh Bubna MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect
ur personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s)
r view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
CICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading
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