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1 Biocon Limited ACCUMULATE MEDIUM RISK PRICE Rs. 274 TARGET Rs. 325 Pharmaceuticals Biotechnology SHARE HOLDING (%) Promoters 60.9 FII 5.4 FI / MF 10.9 Body Corporates 5.2 Public & Others 17.6 STOCK DATA Reuters Code Bloomberg Code BSE Code NSE Symbol Market Capitalization Shares Outstanding BION.NS BIOS IN BIOCON Rs mn US$ mn 200 mn 52 Weeks (H/L) Rs. 430/240 Avg. Daily Volume (6m) Price Performance (%) 48,335 Shares 1M 3M 6M (16) (19) (25) 200 Days EMA: Rs.314 Part of Classic ANALYST Suneel Rao suneel.rao@sushilfinance.com SALES Devang Shah /62 devang.shah@sushilfinance.com Please refer to important disclosures at the end of the report STRENGTH: Strong biosimilars portfolio, Pfizer partnership for Insulin and Analogues, rich NCE research pipeline WEAKNESS: Launch of Biosimilars in regulated markets long time away. OPPORTUNITIES: Foray into newer markets, new out-licensing deals (IN-105 & T1h). THREAT: Exchange rate volatility, Negative data flows on R&D pipeline. Launch of Human Insulin and Glargine coupled with INSUPen to propel Branded formulations Business Biocon has a focused approach in the diabetology space, be it launch of human insulin and Glargine in India in line with the recent agreement with Pfizer, or the much awaited launch of INSUPen. This segment managed to register strong growth in H1FY12 driven by growth across all therapies backed by new launches. We expect this business to register a CAGR of 28.5% over FY11-13E given its focus on high-growth specialty areas and the expected ramp up in sales of the new products launched. Supply Agreement with Optimer to offer good upside possibility Biocon started supplying Fidaxomicin API to Optimer in June 2011 and is expected to launch the drug in Europe by the end of FY12. Optimer has increased the peak sales forecast for Fidaxomicin to US$2bn, which could lead to supply ramp up for Biocon. The closest competitor for Fidaxomicin is vancomycin - an antibiotic injectable. The market size for Fidaxomicin API is expected to be around $ 350 mn but the margins for Biocon's drug could be bigger because Fidaxomicin is a novel product with its patent expiring in 2027 coupled with a reduction in recurrences of up to 50% when compared with Vancomycin (generic drug) and Biocon being the sole supplier. Deal with Pfizer & Mylan offers good long-term value; without significantly depressing its profitability Biocon has a strong portfolio of products that has enabled it to forge strategic partnerships. It has tied up with Pfizer to commercialize its insulin portfolio & with Mylan for monoclonal antibodies. We could see stronger traction over the next 3 4 years, once these products are launched in other emerging markets as regulated market launch is still some time away. These and many other such partnerships are also a source of development-linked licensing income for the company. We view this as a long-term positive since it allows Biocon to participate in the biogeneric opportunity without significantly depressing its profitability. Syngene & Statins to support growth On the research services front, Syngene s increasing BMS order utilization (now at 80%) and the gradual change to a risk-reward based model will fuel growth. On the statins front, Biocon has tied up with 4 players for the European market and 2 players for the US market for supply of atorvastatin (losing exclusivity in May 2012 in US). It is also entering in a few additional European markets post the patent expiration in Nov OUTLOOK & VALUATION Traction in Biocon s insulin initiative with Pfizer and the domestic formulations business coupled with incremental contribution from Fidaxomicin & atorvastatin and a ramp-up in the contract research business will be key growth drivers going forward. Following the divestment of low margin AxiCorp, we expect Biocon s total sales growth to decelerate; however, we believe the EBITDA margin will improve. We thereby forecast a CAGR of 14% in earnings over FY11-13E and coupled with a healthy balance sheet with low debt levels and strong cash generation, we recommend an ACCUMULATE with a target price of Rs. 325 (18x FY13E EPS). KEY FINANCIALS Initiating Coverage Y/E Mar. Revenue (Rs mn) RPAT (Rs mn) AEPS (Rs) AEPS (% Ch.) P/E (x) ROCE (%) ROE (%) P/BV (x) FY FY FY12E FY13E For private Circulation Only. Sushil Financial Services Private Limited Regd.Office : 12, Homji Street, Fort, Mumbai Member : BSEL, SEBI Regn.No. INB/F NSEIL, SEBI Regn.No.INB/F Phone: Fax: info@sushilfinance.com

2 COMPANY OVERVIEW Biocon is an integrated biopharmaceutical company with a business model encompassing manufacturing of API s and formulations, contract research (Syngene and Clinigene), as well as innovative drug discovery. Over the years, Biocon has systematically leveraged its technology platforms from enzymes to small molecules to recombinant proteins and antibodies. Within biopharmaceuticals, the Company manufactures APIs like Statins and Immunosuppressants that are sold in the developed markets of the United States and Europe. It also manufactures biosimilar Insulins, which are sold in India as branded formulations and in both bulk and formulation forms. In research services, Syngene International Limited (Syngene) is engaged in the business of custom research in drug discovery while the other fully owned subsidiary Clinigene International Limited (Clinigene) is in the clinical development space. Its focus areas are diabetology, oncotherapeutics, nephrology, cardiology and immuno-dermatology. Biocon mainly has 5 product verticals: Branded Formulations Small Molecules Insulin Research Services Biologics Diabetology Nephrology Statins Insulin Syngene MAbs Oncotherpeutics Comprehensive care Fidaxomicin IN-105 Itolizumab Cardiology Immunotherapy Immunosuppre ssants Analogs Clinigene Other Novel Biologics Branded Formulations: Marketed primarily in India, parts of Asia, Latin America, Middle East and Africa, Biocon offers products to healthcare providers, including physicians, clinics, hospitals and pharmacies. Its flagship brands: Diabetology (2004) Insugen (Human Insulin) Basalog (Insulin glargine) Oncotherapeutics (2006) Nephrology Cardiology (2008) Comprehensive Care (2010) Immunotherapy (2010) BIOMAb EGFR (Nimotuzumab) Abraxane (Paclitaxel) Tacrograf (Tacrolimus) Renodapt (Mycophenolate mofetil) Statin (Atorvastatin) Myokinase (Recom Streptokinase) Biopiper TZ (Piperacillin & Tazobactam) Celrim/ Celrim TZ (Cefepime & Tazobactam) Picon (Pimecrolimus) Tbis (Tacrolimus) 2

3 Research Services: Biocon provides customized drug discovery and development services to pharmaceutical and biotechnology companies through Syngene and Clinigene, its wholly-owned subsidiaries. It has a strong R&D pipeline, with lead molecules oral insulin (IN 105) and oncology (T1h) undergoing phase III & II clinical studies respectively. In the areas of custom and clinical research services, collaborative partnerships with complementary biotechnology and pharmaceutical companies are yielding rich results. Drug IN-105 ItolizuMAb Anti-EGFR Therapeutic Area Diabetes Oncology/ Inflammation/ Auto Immune Oncology Current Status Pre-Clinical Phase I Phase II Phase III Market Anti-CD 20 Oncology Peptide Hybrid Targeted Immunoconjugates Diabetes Oncology Strategic Alliances: The Company has a strong portfolio of products that has enabled it to forge strategic partnerships. Biocon has tied up with Pfizer to commercialize its insulin portfolio. It has partnered with Mylan for monoclonal antibodies. These and many other such partnerships are also a source of development-linked licensing income for the company. Particulars Partner Therapy Drug Discovery Amylin Diabetes Novel Peptide CIMAb Immunology BIOMAb EGFR, ItolizuMAb ITARICa Oncology Immunoconjugated MAbs Vaccinex Oncology Bio Better MAbs Commercialization Optimer First in class Anti-Infective Novel APIs Mylan Oncology, Auto Immune Biosimilars Pfizer Diabetes Biosimilars Research Services BMS Discovery to Commercialization Integrated DD services Biocon recently divested its 78% stake in the German subsidiary, Axicorp. The company was plagued by the rebates demanded by the government and was struggling to generate healthy margins. This disinvestment is expected to improve Biocon s margins as the German business was a drag on its margins. 3

4 INVESTMENT ARGUMENTS Biopharmaceuticals business showing impressive growth Biocon s biopharmaceuticals business has grown at a CAGR of 27.3% over FY09-11 on the back of strong growth witnessed across all segments including Statins, Immunosuppressants and Branded formulations. A detailed break up of the company s FY11 Bio Pharma sales (accounting for ~82% of total sales excluding AxiCorp) is depicted below: BioPharma Sales Breakup - FY11 21% Statins 38% Insulins & Immunosuppressants 6% 13% Branded Formulations Licensing Income Other Bio Pharma 23% During FY11, the Biopharma segment delivered a decent 26% growth in revenues to Rs mn led overall growth in various businesses like Statins (23%), insulins & immunosupressants (11%), Branded formulations (23%), other Biopharma (40%) etc. We believe this business will continue to report strong numbers going forward largely led by strong growth across Statins, Immunosuppressants and Insulins portfolio and better offtake in Fidaxomicin API to Optimer. We have factored in a CAGR of 13.6% over FY11-13E for the company s biopharmaceuticals business % Expected CAGR % (FY11-13E) 28.5% 12.0% 6.4% 17.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% FY11 FY12E FY13E CAGR % (11-13E) 4

5 Launch of Human Insulin and Glargine coupled with INSUPen to propel Branded formulations Business Biocon s domestic formulation business currently consists of six divisions; focused largely on diabetology, Oncotherapeutics, Cardiology, Nephrology, Immunotherapy & comprehensive care etc with a field force of ~1,100 people. Since its inception in 2004, Biocon s domestic formulations has come leaps and bounds to register Rs mn revenues in FY11. For H1FY12, it has recorded revenues to the tune of Rs mn. Biocon has recently launched a reusable insulin delivery device INSUPen in the domestic market. INSUPen is a differentiated device based on proprietary German technology designed for efficiency, accuracy and safety. INSUPen is a device, which can deliver both Basalog and Insugen, thus maximizing patient convenience. The company has recruited 125 diabetic care advisors to support the users. Moreover, Biocon s pricing strategy is competitive Increasing Branded Formulations Contribution to Sales (average price of 100% 90% 19% 18% 18% 18% Rs. 675/pen 80% against Rs % 1,300 price 60% range available 50% in the market) 71% 72% 70% 70% 40% which could 30% expand 20% acceptance for 10% 10% 10% 12% 13% Biocon s pens. 0% FY10 FY11 FY12E FY13E During Q2FY12, Pfizer also Branded Formulations Other BioPharma Research Services launched Human Insulin and Glargine under the brand names Univia and Glavia in India. We believe Biocon has a focused approach in the diabetology space, be it launch of human insulin and Glargine by Pfizer in India in line with the recent agreement, or the much awaited launch of INSUPen. Biocon expects this business to contribute Rs mn to revenue in the next three years, and constitute 25% of total revenue by FY16 (currently contributing 10% of consolidated revenues). We expect this business to register a CAGR of 28.5% over FY11-13E given its focus on high-growth specialty areas and with the ramp up in sales of the new products launched. Supply Agreement with Optimer to offer good upside possibility: In June 2010, Biocon and Optimer entered into a long-term manufacturing and supply agreement for commercial manufacturing of the API, Fidaxomicin. Fidaxomicin is used to treat patients with Clostridium Difficile Infection (CDI). CDI is caused by the presence of a bacterium that causes severe diarrhea. The key reasons for Biocon being chosen as a supplier are: Biocon was historically involved in the development and scale-up of the API. The product requires fermentation technology, in which Biocon is a domain expert. Biocon started supplying Fidaxomicin API to Optimer in June 2011 and is expected to launch the drug in Europe by the end of FY12. Optimer has increased the peak sales forecast for Fidaxomicin to US$2bn, which could lead to supply ramp up for Biocon. The closest competitor for Fidaxomicin is vancomycin - an antibiotic injectable manufactured and supplied by Strides Acrolab. The market size is expected to be around $350 million but the margins for Biocon's drug could be bigger because Fidaxomicin is a novel product with 5

6 a reduction in recurrences of up to 50% when compared with Vancomycin which is a generic drug. Insulin & Immunosuppressants to offer stable growth Immunosuppressant s segment has grown by approximately 11% during FY11 majorly due to the supply of API for Tacrolimus to generic players. Biocon should continue with steady growth in this segment as the generic companies are slowly gaining market share and some of its partners are also expected to launch the drug in FY12. We factor in a CAGR of 12% from the Insulin & Immunosuppressants segment over FY11-13E. Contract research: Improving growth traction, profitability Syngene, the contract research segment of the company stands out to be largest in India with a portfolio that spans the entire drug discovery and development continuum. This segment s business revenue and profitability are showing signs of improvement in H1FY12 led by the company gradually shifting from a fee based model to an integrated R&D and partnered co development model on a risk sharing basis. We believe that the gradual restructuring being done in Syngene will pay rich dividends going forward. BMS, which contributes ~30% to Syngene s revenue, has a 7-year contract for advancing BMS s work in discovery and early drug development for which a dedicated facility for BMS was built in Recently, Syngene has also partnered with Endo Pharmaceuticals of US on two new discovery programs to strengthen their ongoing alliance in cancer research. Clinigene is focusing more on pre-clinical studies and Phase I studies. We believe that Clinigene s growth will be subdued but Syngene should drive sales growth for the CRO business. We expect 13.5% revenue CAGR over FY11-13E. BMS order utilization increase which is currently at 80% will also help in increasing the growth rate for Syngene. Statins business offers decent scope with Atorvastatin losing exclusitivity Biocon is one amongst the largest producers of Statins in the world with global market shares of about 30%. Biocon s Statins segment will show major growth in FY13 as Atorvastatin goes off patent in major markets in Europe in FY12 and 6 months exclusivity ends in May 2012 in US. But we expect the Atorvastatin to be very much competitive as it is manufactured through chemical synthesis process and is much easy to manufacture in comparison to Simvastatin. For Atorvastatin there are a large number of integrated players which makes the scenario for Biocon very competitive. Biocon has tied up with four players for the European market and with two players for the US market for supply of atorvastation. It is entering in a few additional European markets post the patent expiration in November With this we expect the statins business to register a CAGR of 13% over FY11-13E. Divestment of AxiCorp to be a long term positive The Indian biotechnology firm Biocon has divested its German unit AxiCorp for $ 58.2 mn in April The divestment decision was in line with its focus on global alliances that would include Germany and does not require a separate unit for the region, especially after the Biocon and Pfizer deal. As the unit was under pressure from German government to offer rebate for some low margin drugs, the unit was recording very low margins (~5-6% EBIDTA margins). Thus the exit strategy is expected to fuel growth in long term and also improve margins. Deal with Pfizer & Mylan offers good long-term value; without significantly depressing its profitability In October 2010, Biocon entered into a strategic agreement with Pfizer for global commercialization of Biocon s biosimilar versions of insulin and insulin analog products, Recombinant Human Insulin, Glargine, Aspart and Lispro. As part of the deal, Pfizer made an upfront payment of $ 100 mn (Escrow Account) to Biocon with additional development, regulatory and launch milestone payment of up to $ 150 mn spread over the next few 6

7 years. Biocon has begun work on the Malaysian plant that will serve its deal with Pfizer. Investment of $ 161 mn is lined-up for Phase I construction. However, this facility is not completely dedicated to meet Pfizer supply requirements. Its first phase will commence in 2014E. Pfizer Deal ($ 350 mn) Upfront Payment (Escrow Account) New Manufacturing Facility Setup in Malaysia Development, regulatory & launch milestone payment Payments Linked to supplies and sales $ 100 mn $ 100 mn $ 150 mn Under this agreement, Biocon will remain responsible for the clinical development, manufacture and supply of these biosimilar insulin products, and for regulatory activities to secure approval for them in various geographies. The alliance is targeting the $ 14 bn insulin opportunity. Although licensing fees, by nature, are volatile and hard to predict, Biocon has already received $ 100mn; it would receive another $ 250 mn as an upfront fee and milestone payments that would be recognised as revenue over the next 4-5 years. The money it receives will be used to develop and register the products in various markets and expand existing manufacturing facilities. Biocon will receive income linked to Pfizer's sales of these products across global markets. By 2015, several insulin analogues are expected to lose patent, thereby offering a large opportunity for biosimilar products. After patent expiry, the market size is likely to shrink due to the entry of generics. Brand Biosimilar Name Innovator Brand Sales US $ Est. US Launch Humulin Recombinant human insulin Eli Lilly $ 2 bn 2015 Lantus Insulin Glargine Sanofi-Aventis $ 3.8 bn 2015 Novolog Insulin Aspart Novo-Nordisk $ 1 bn 2017 Humalog Insulin Lispro Eli Lilly $ 1.3 bn 2017 The aggregate cost of development for all four products (Rh insulin, Glargine, Aspart and Lispro) is expected to be approx. $ 200 mn ($40-$50 mn/product) which shall be met by upfront licensing income and other timely milestone payments. Biocon expects revenue from emerging markets under this agreement to start in FY12 with it having approval for Recombinant Human Insulin in 27 countries. Pfizer recently launched insulin and Glargine in India under this arrangement. However, we would see stronger traction over the next 3 4 years, once these products are launched in other emerging markets. Regulated market launches will provide further upsides in the long term. However, the entry in Europe and the US is a few years away as the products will be launched after patent expiry in these markets. Deal with Mylan: Biocon has signed a deal with Mylan for emerging markets, US & Europe for supplying bio-similars (monoclonal antibodies). The total addressable market opportunity is pegged at $ 30 bn for which a basket of products expiring between

8 are being developed. Both the companies will share development and capital costs. Mylan will have exclusive commercial rights in the regulated markets and co-exclusive rights in other markets These tie-ups ensure that the development and clinical trial costs get shared with the partner. The partners also contribute to the capex required for these opportunities. We view this as a long-term positive since it allows Biocon to participate in the biogeneric opportunity without significantly depressing its profitability. Robust R&D pipeline capable of positive surprises Biocon has a strong portfolio of products that has enabled it to forge strategic partnerships. Biocon has tied up with Pfizer to commercialize its insulin portfolio. It has partnered with Mylan for monoclonal antibodies. These and many other such partnerships are also a source of development-linked licensing income for the company. The licensing income has been quite volatile in the recent quarters as it is linked to development and regulatory timelines. The company, having initiated several partnership discussions (most important one is the oral Insulin IN-105), expects this income to ramp up in the coming quarters. The oral insulin program is currently in Phase 3 clinical trials for Type 2 diabetics in India and its primary data proved the efficacy and safety of the product, though certain primary endpoints were not met. The abstract of the study has already been submitted. The Phase 1 study in Type 1 diabetics under the US IND is underway and its data is likely in H2FY12. Biocon is currently looking to out license oral insulin & Itolizumab (Anti CD6 MAb) to a global partner who would share the entire R&D cost for the global market. Any news flow in that direction will act as a near term trigger to the stock price. We have factored in licensing income of ~Rs mn/year over FY11-13E. Healthy balance sheet and self sufficient funds for future CAPEX Biocon has reached a stage at which it will have to invest significant resources to develop and commercialize its biogeneric pipeline for its partners (Pfizer and Mylan), which in the interim is likely to increase R&D expenses significantly due to a ramp-up in its biogeneric development and clinical trials for oral insulin NCE. NCE's Insulin Clinical Trials for EU & US Capex for new facility in Malaysia 2 Novel Drugs in Late clinical trials (IN-105 & T1h) More molecules moving from lab to clinical trials Increasing Investments in FY12-14E Maintanence Capex Rs. 1000/1200 mn per year Research Services capacity ramp up in the long term. (for new projects) We believe the company is sufficiently funded for its future capex requirement with most of it to come from partners contribution (Pfizer, Mylan & potential partners for NCE s), we believe the company s D:E ratio is likely to remain at 0.1x levels going forward providing ample investor comfort. Though operating expenses of Biocon is likely to stay elevated in 8

9 Rs. in Mn Biocon Ltd. the next two years due to an increased R&D spend, it is likely to be compensated by steady accrual of licensing income from Pfizer over the next 4-5 years, increasing contribution from the branded formulations business and increasing profitability of research services business. We have factored in EBIDTA margins in 26-27% range for FY12-13E Debt to Equity FY09 FY10 FY11 FY12E FY13E EBIDTA (Rs. In Mn) 28.8% 28.4% 27.2% 21.2% 26.4% 20.1% 19.9% FY07 FY08 FY09 FY10 FY11 FY12E FY13E 35% 30% 25% 20% 15% 10% 5% 0% Debt D:E Ratio EBIDTA (Rs. In Mn) EBIDTA Margin Source: Annual Report, Sushil Finance 9

10 RISK & CONCERNS Lower licensing incomes could have meaningful impact: As per the company, almost $ 200 mn of the $ 350 mn of Pfizer milestones is going to accrue to Biocon but the remaining $ 150 mn is contingent on milestones including regulatory approvals (including EU/US approvals) for insulin, which carry regulatory risk. A lower licensing income either due to delays or non approvals would put some of these estimates at risk, impacting our estimates. Unfavorable currency movements: Biocon derives close to 90% of its total revenues from its export business to countries like US, Europe, and emerging markets etc. Thus any appreciation in the INR against respective currencies will result in the erosion of margins. OUTLOOK & VALUATION Biocon s business has evolved significantly over the years. It is one of the front-runners in biosimilar approvals in the regulated markets. On the branded formulations front, Biocon has a focused approach in the diabetology space, be it launch of human insulin and Glargine by Pfizer in India in line with the recent agreement, or the much awaited launch of INSUPen. Growth momentum in the Research Services business remains strong, with the company increasing its thrust on integrated service offerings and a gradual shift to a risk-reward based model. With Biocon still being the sole supplier to Optimer for Fidaxomicin we expect good traction in its supplies as Optimer has upgraded its sales forecast of Deficid $ 2 bn. The company is also optimistic of finding a partner for Oral Insulin IN-105 by end of March 2012, which would help realize greater licensing income and sharing of R&D expenditure. Last but not the least, with Atorvastatin losing patent protection in Nov 2011 (US exclusivity till May 2012), we believe the scenario for Biocon will be competitive but expect it to record good growth since it has tied up with some partners in EU & US. We thereby forecast a CAGR of 14% in earnings over FY11-13E coupled with a healthy balance sheet with low debt levels & strong cash generation and expected expansion in EBIDTA margins on the back of divestment of AxiCorp, we recommend an ACCUMULATE with a target price of Rs. 325 (18x FY13E EPS). 10

11 PROFIT & LOSS STATEMENT (Rs.mn) BALANCE SHEET STATEMENT (Rs.mn) Y/E March FY10 FY11 FY12E FY13E Net Sales Total Mat & Mfg Expenses Other Expenses Staff Cost Total Expenditure PBIDT Interest Depreciation Other Income PBT incl OI Tax RPAT Adjustments RPAT after MI As on 31 st March FY10 FY11 FY12E FY13E Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans Total Loan funds Deferred Tax Capital Employed Net Block Cap. WIP Investments Sundry Debtors Cash & Bank Bal Loans & Advances Inventory Curr Liab & Prov Net Current Assets Total Assets FINANCIAL RATIO STATEMENT CASH FLOW STATEMENT (Rs.mn) Y/E March FY10 FY11 FY12E FY13E Growth (%) Net Sales EBITDA Adjusted Net Profit Profitability (%) EBIDTA Margin (%) Net Profit Margin (%) ROCE (%) ROE (%) Per Share Data (Rs.) EPS (Rs.) CEPS (Rs.) BVPS (Rs) Valuation PER (x) PEG (x) P/BV (x) EV/EBITDA (x) EV/Net Sales (x) Turnover Debtor Days Creditor Days Gearing Ratio D/E Source: Company, Sushil Finance Research Estimates Y/E March FY10 FY11 FY12E FY13E Profit before tax & Extraordinary Items Depreciation & Amortization Chg. in Working Capital Cash Flow from Operating (Incr)/ Decr in Gross PP&E (Incr)/Decr In Intangibles (Incr)/Decr In WIP Cash Flow from Investing (Decr)/Incr in Debt (Decr)/Incr in Share Capital Dividend Cash Flow from Financing Cash at the End of the Year

12 Rating Scale This is a guide to the rating system used by our Institutional Research Team. Our rating system comprises of six rating categories, with a corresponding risk rating. Risk Rating Risk Description Low Risk Medium Risk High Risk Predictability of Earnings / Dividends; Price Volatility High predictability / Low volatility Moderate predictability / volatility Low predictability / High volatility Total Expected Return Matrix Please Note Rating Low Risk Medium Risk High Risk Buy Over 15 % Over 20% Over 25% Accumulate 10 % to 15 % 15% to 20% 20% to 25% Hold 0% to 10 % 0% to 15% 0% to 20% Sell Negative Returns Negative Returns Negative Returns Neutral Not Applicable Not Applicable Not Applicable Not Rated Not Applicable Not Applicable Not Applicable Recommendations with Neutral Rating imply reversal of our earlier opinion (i.e. Book Profits / Losses). ** Indicates that the stock is illiquid With a view to combat the higher acquisition cost for illiquid stocks, we have enhanced our return criteria for such stocks by five percentage points. Stock Review Reports: These are Soft coverage s on companies where Management access is difficult or Market capitalization is below Rs mn. Views and recommendation on such companies may not necessarily be based on management meeting but may be based on the publicly available information and/or attending Company AGMs. Hence Stock Reviews may be just one-time coverage s with an occasional Update, wherever possible. Additional information with respect to any securities referred to herein will be available upon request. This report is prepared for the exclusive use of Sushil Group clients only and should not be reproduced, recirculated, published in any media, website or otherwise, in any form or manner, in part or as a whole, without the express consent in writing of Sushil Financial Services Private Limited. Any unauthorized use, disclosure or public dissemination of information contained herein is prohibited. This report is to be used only by the original recipient to whom it is sent. This is for private circulation only and the said document does not constitute an offer to buy or sell any securities mentioned herein. While utmost care has been taken in preparing the above, we claim no responsibility for its accuracy. We shall not be liable for any direct or indirect losses arising from the use thereof and the investors are requested to use the information contained herein at their own risk. This report has been prepared for information purposes only and is not a solicitation, or an offer, to buy or sell any security. It does not purport to be a complete description of the securities, markets or developments referred to in the material. The information, on which the report is based, has been obtained from sources, which we believe to be reliable, but we have not independently verified such information and we do not guarantee that it is accurate or complete. All expressions of opinion are subject to change without notice. Sushil Financial Services Private Limited and its connected companies, and their respective directors, officers and employees (to be collectively known as SFSPL), may, from time to time, have a long or short position in the securities mentioned and may sell or buy such securities. SFSPL may act upon or make use of information contained herein prior to the publication thereof. 12