RESULT

IRB Infrastructure (IRB) BUY

Capital Goods
CMP(₹): 29 Fair Value(₹): 36 Sector View: Attractive NIFTY-50: 18,203 May 21, 2023

Sustaining growth momentum Company data and valuation summary

IRB ended the year on a strong note, with 41% yoy growth in full-year PAT Stock data
(before share of profit from subsidiaries), despite a 10% yoy growth in full-
CMP(Rs)/FV(Rs)/Rating 29/36/BUY
year revenues, driven by improved toll collection, margin improvement and
52-week range (Rs) (high-low) 35-18
interest cost-saving. Order inflow was weak during FY2023, but was
Mcap (bn) (Rs/US$) 174/2
supported by a large-sized ToT project win during 1QFY24. We incorporate
ADTV-3M (mn) (Rs/US$) 530/6
the ToT/BoT project win in our estimates and revise the Fair Value to Rs36
(from Rs33). Retain BUY. Shareholding pattern (%)

4QFY23: Results for quarter were in line at EBITDA level

IRB’s revenues at Rs16.2 bn were 3% lower than our estimates. Both EPC and
34.2
toll revenues grew 13% yoy on execution ramp-up across projects and 44.7

improvement in traffic volumes across key projects. Toll revenues for the
Mumbai-Pune (MIPL) and Ahmedabad-Vadodara projects were up 8%/19% yoy 6.7
3.7
7.4 3.3
for the quarter. Toll rates have been revised upward for MIPL by 18%, w.e.f. April
Promoters FPIs MFs BFIs Retail Others
2023. EBITDA margin was at 46.8% on 23.6% margin for EPC and 92.3% margin
for the BOT segment. Interest expense was down yoy, as the consolidated net Price performance (%) 1M 3M 12M
debt had declined to Rs143 bn for FY2023. Higher losses at SPVs on

Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities A ct of 1933
Absolute 8 0) 35
commencement of revenue share from two road projects led to a 21% yoy Rel. to Nifty 5 (2) 20
decline in reported PAT. Cash flow from operations to improve from next year,
as receivables from SPVs decline. The order book adjusted for GST remains Forecasts/Valuations 2023 2024E 2025E
strong for FY2023 at Rs205 bn, excluding the recent ToT award, which would EPS (Rs) 1.2 1.6 2.1
add Rs4.5 bn on EPC and Rs145 bn on O&M order book. EPS growth (%) 99.2 34.4 32.2
P/E (X) 24.3 18.1 13.7
Recent large-sized ToT project win is positive P/B (X) 1.3 1.5 1.7
IRB was awarded the Hyderabad ring road project based on a ToT model, with EV/EBITDA (X) 9.8 8.3 7.5
an upfront payment of Rs73.8 bn to the Hyderabad Metropolitan Development RoE (%) 5.6 7.7 11.6
Authority (HMDA). The company would undertake this project in private InVIT Div. yield (%) 9.1 13.9 17.9
with a 51% share in the project. The project would have a concession period of Sales (Rs bn) 64 75 82
30 years and would have an O&M order book of Rs145 bn over the concession EBITDA (Rs bn) 32 37 41
period. Toll collection from this project had been increasing at a CAGR of 15% Net profits (Rs bn) 7 10 13
from FY2019-2023 and nearly 60% of the toll collection on the project stretch is
Source: Bloomberg, Company data, Kotak Institutional Equities estimates
from cars and LCVs. We expect a starting toll collection of Rs6.4 bn and EBITDA
of Rs5.4 bn in FY2024. We incorporate this project in our estimates and expect Prices in this report are based on the market close of
May 19, 2023
equity funding of Rs15 bn to be supported by IRB’s growth capital.

Capability to take future order inflows

IRB has equity requirement of Rs24 bn for FY2024 for the existing project
portfolio and recent ToT project. The company had a consolidated cash balance
of Rs24 bn in FY2023; incrementally, it plans to utilize cash profits of MIPL,
Hyderabad ORR and other road assets to fund future projects. Hence, it would
continue to target such opportunities in the coming years.

Revise EBITDA estimates by 2-4% for FY2024-25 and Fair Value to Rs36
We revise EBITDA estimates by 2-4% for FY2024-25 and incorporate recent
project wins and revise Fair Value to Rs36 net of roll-forward based on SoTP
valuing the core construction business at 7.5X EV/EBITDA on June 2025
estimates.
Full sector coverage on KINSITE

Teena Virmani Aditya Mongia Sai Siddhardha

[email protected] [email protected] [email protected]
+91-22-4336-0883 +91-22-4336-0884
 2

Results were in line with our estimates on EBITDA; strong EPC order book and improved traffic volumes drove 13% yoy growth in EPC
and toll revenues
Exhibit 1: IRB (consolidated)—4QFY23—key numbers, March fiscal year-ends (Rs mn)
%change
4QFY23 4QFY23E 4QFY22 3QFY23 vs est. yoy qoq FY2023 FY2022 % change FY2024E FY2023 % change
Net Sales 16,200 16,717 14,336 15,142 (3) 13 7 64,016 58,037 10 74,581 64,016 17
Construction 10,725 12,194 9,476 9,605 (12) 13 12 42,786 40,162 7 48,026 42,786 12
BOT 5,475 3,503 4,861 5,537 56 13 (1) 21,230 17,875 19 26,555 21,230 25
Total Expenses (8,612) - (7,920) (7,696) 12 (31,726) (30,061) - (31,726)
Direct expenses (7,075) - (6,298) (5,974) 18 (24,955) (23,784) - (24,955)
Employees cost (815) - (751) (979) (17) (3,461) (2,873) - (3,461)
Other expenditure (722) - (871) (743) (3) (3,310) (3,404) - (3,310)
EBITDA 7,587 7,565 6,417 7,446 0 18 2 32,291 27,976 15 37,246 32,291 15
Other income 789 535 2,491 561 41 3,017 5,517 (45) 3,434 3,017 14
PBDIT 8,377 8,099 8,908 8,007 5 35,307 33,493 5 40,680 35,307 15
Depreciation (2,221) (2,200) (1,889) (2,150) 3 (8,321) (6,828) 22 (10,168) (8,321) 22
EBIT 6,156 5,900 7,019 5,856 4 (12) 5 26,986 26,665 1 30,512 26,986 13
Interest (3,733) (3,311) (3,990) (3,671) 2 (15,146) (18,906) (20) (15,214) (15,146) 0
PBT 2,423 2,589 3,029 2,185 (6) (20) 11 11,840 7,759 53 15,299 11,840 29
Tax Expense (753) (784) (679) (646) 17 (3,569) (1,882) 90 (4,011) (3,569) 12
Recurring PAT 1,669 1,805 2,350 1,538 (8) (29) 9 8,271 5,877 41 11,288 8,271 36
Minority interest - -
Share of profit or loss from SPV (368) (161) (604) (125) 195 (1,070) (2,262) (1,609) (1,070)
Reported PAT 1,302 1,644 1,746 1,414 (21) (25) (8) 7,201 3,615 99 9,679 7,201 34

Key ratios (%)

Direct expenses/sales 43.7 43.9 39.5 39.0 41.0 - 39.0
Employees cost/sales 5.0 5.2 6.5 5.4 5.0 - 5.4
Other expenditure/sales 4.5 6.1 4.9 5.2 5.9 - 5.2
EBITDA margin 46.8 45.3 44.8 49.2 50.4 48.2 49.9 50.4
PBDIT margin 51.7 48.4 62.1 52.9 55.2 57.7 54.5 55.2
PBT margin 15.0 15.5 21.1 14.4 18.5 13.4 20.5 18.5
PAT margin 10.3 10.8 16.4 10.2 12.9 10.1 15.1 12.9
Effective tax rate 31.1 30.3 22.4 29.6 30.1 24.3 26.2 30.1
Recurring EPS (Rs) 0.3 0.3 0.4 0.3 1.4 1.0 1.9 1.4

Source: Company, Kotak Institutional Equities estimates

Margins remained strong for BOT segment, but declined qoq for EPC segment
Exhibit 2: IRB—key segmental numbers—4QFY23, March fiscal year-ends (Rs mn)
%change
4QFY23 4QFY23E 4QFY22 3QFY23 vs est. yoy qoq FY2023 FY2022 % change FY2024E FY2023 % change
Revenues 16,200 15,697 14,337 15,142 3 13 7 64,016 58,037 10.3 74,581 64,016 16.5
Construction 10,725 12,194 9,476 9,605 (12) 13 12 42,786 40,162 6.5 48,026 42,786 12.2
BOT 5,475 3,503 4,861 5,537 56 13 (1) 21,230 17,875 18.8 26,555 21,230 25.1
EBITDA 7,588 6,052 6,415 7,447 25 18 2 32,292 27,975 15.4 37,246 32,292 15.3
Construction 2,536 3,109 2,017 2,350 (18) 26 8 12,801 11,793 8.5 12,967 12,801 1.3
BOT 5,052 2,943 4,398 5,097 72 15 (1) 19,491 16,182 20.5 24,279 19,491 24.6
Margins (%) 46.8 38.6 44.7 49.2 50.4 48.2 49.9 50.4
Construction 23.6 25.5 21.3 24.5 29.9 29.4 27.0 29.9
BOT 92.3 84.0 90.5 92.1 91.8 90.5 91.4 91.8

PBT 2,423 - 3,028 2,184 (20.0) 10.9 11,839 7,758 52.6

Construction 2,023 - 2,650 1,599 (23.7) 26.5 10,218 7,335 39.3
BOT 400 - 378 585 NA NA 1,621 423 282.9

PAT 1,669 1,614 2,349 1,539 (29.0) 8.4 6,654 4,218 57.8
Construction 1,357 - 1,979 1,035 (31.4) 31.1 5,283 5,499 (3.9)
BOT 312 - 371 504 NA NA 1,372 (1,281) (207.1)

Source: Company, Kotak Institutional Equities estimates

IRB Infrastructure
Capital Goods India Research
 3

Order backlog to improve further on including recent Hyderabad outer ring road project
Exhibit 3: Breakup of the order backlog of IRB at end-4QFY23, March fiscal year-ends (Rs bn)

Order backlog: Rs205 bn

Ongoing BOT/HAM
projects
43%

O&M of InVIT
projects
57%

Source: Company, Kotak Institutional Equities

Toll collection for projects in private InVIT have also improved yoy
Exhibit 4: Overall daily toll collection trend of private InVIT projects, March fiscal year-ends (Rs mn)

Daily toll collection (FY2022) Daily toll collection (FY2023)

70 63 65
62 61 62
55 57 57
60 54 53 53 52
50 44 45
40 40
40 35 35
32 32
30
27 28
30
20
20

10

0
October

January
June
April

September
August
May

March
February
July

November

December

Source: Company, Kotak Institutional Equities

Hyderabad outer ring road project

Hyderabad outer ring road project is a ~158 km, 8-lane ring road encircling Hyderabad. The project was
developed with the objective of decongesting internal roads, providing quick access to important nodes
in the city and connecting various urban nodes outside the city. The project stretch connects the urban
nodes of Hyderabad, viz., Hi-Tech City, Nanakramunda Financial District, Rajiv Gandhi International
Airport, IKP Knowledge Park, Hardware Park and Telangana State Police Academy. It is also part of the
N-S corridor and hence, drives significant commercial traffic as well.

The design speed and capacity of the ORR is 120 kmph and 2,50,000 PCUs, respectively. Current traffic
on the stretch is 30,000 PCUs, so there is enough scope for improvement in traffic from current levels.

IRB Infrastructure
Capital Goods India Research
 4

Future growth drivers for traffic would include:

 Emergence of Hyderabad as an IT hub. The state government decided to develop another IT Hub on
the northern side of Hyderabad, which is to be located within ~1.5 km distance from the ORR.
Furthermore, the HMDA intends to develop logistic parks around the ORR.

 Telangana mobility valley cluster and life sciences hub. The state government announced the setting
up of India’s first mobility focused cluster, which aims to attract investments of Rs500 bn. The cluster
also aims at strengthening the electric two-wheeler, three-wheeler and charging equipment
manufacturing ecosystem in Telangana. The ORR stretch would also benefit from the state
government’s ambition to double the pharma and life sciences ecosystem to USD100 bn by 2030, with
several majors announcing plans to set up facilities in Hyderabad.

 Yadadri Temple. The Hyderabad ORR stretch is also the best route to reach the famous Yadadri
Temple as compared with the congested city roads.

We have factored in a traffic increase at a CAGR of 3.5% over the concession period of the project.

Structure of Hyderabad ring road project

Exhibit 5: Connectivity points of Hyderabad ORR

Source: Company, Kotak Institutional Equities

IRB Infrastructure
Capital Goods India Research
 5

Toll collection for Hyderabad ORR has increased at CAGR of 15% in FY2019-23
Exhibit 6: Toll revenues of Hyderabad ORR project, March fiscal year-ends, FY2019-23 (Rs bn)

6.0
5.4

5.0
4.2
4.0
3.5
3.1 3.1
3.0

2.0

1.0

0.0
FY2019 FY2020 FY2021 FY2022 FY2023

Source: Company, Kotak Institutional Equities

IRB share in the project is 51% and will contribute nearly Rs15 bn to equity requirements
Exhibit 7: Funding structure of the project (Rs bn)
Particulars Amount (Rs bn)
Concession fee to HMDA 73.8
Initial capex (inc GST) 5.4
Preoperative costs and DSRA 4.8
Project cost 84.0

Sponsor's contribution 29.4

IRB's share at 51% 15.0
Term loans from banks 54.6
Total 84.0

Source: Company, Kotak Institutional Equities

IRB Infrastructure
Capital Goods India Research
 6

We revise EBITDA estimates by 2-4% and increase interest expense for FY2024-25E
Exhibit 8: Change in estimates for IRB (consolidated), March fiscal year-ends (Rs mn)
New estimates Old estimates % revision
2020 2021 2022 2023 2024E 2025E 2024E 2025E 2024E 2025E
Income statement
Total operating income 68,522 52,987 58,037 64,016 74,581 81,587 73,481 77,806 1 5
Construction 50,156 36,334 40,162 42,786 48,026 52,697 46,926 48,916 2 8
Toll collection BOT 18,366 16,652 17,875 21,230 26,555 28,890 26,555 28,890 — —
Total operating costs (38,808) (27,859) (30,061) (31,724) (37,335) (40,948) (37,001) (38,677) 1 6
Construction expenses (36,529) (26,282) (28,368) (29,985) (35,059) (38,469) (34,725) (36,198) 1 6
BOT expenses (2,279) (1,577) (1,694) (1,739) (2,276) (2,479) (2,276) (2,479)
EBITDA 29,714 25,127 27,976 32,292 37,246 40,639 36,480 39,129 2 4
Other income 1,949 1,889 5,517 3,017 3,434 4,043 3,416 3,971
PBDIT 31,664 27,016 33,494 35,309 40,680 44,682 39,896 43,100 2 4
Financial charges (15,643) (16,924) (18,906) (15,146) (15,214) (15,662) (15,034) (15,062) 1 4
Depreciation (4,683) (5,817) (6,828) (8,321) (10,168) (11,901) (10,168) (11,901) — —
Pre-tax profit 11,338 4,275 7,760 11,841 15,299 17,119 14,694 16,137 4 6
Taxation (4,543) (1,445) (1,882) (3,569) (4,011) (4,657) (3,810) (4,252)
PAT 6,794 2,830 5,877 8,272 11,288 12,462 10,884 11,885 4 5
Share of profit/loss from SPVs 415 (1,658) (2,262) (1,070) (1,609) 338 (821) 855
Adjusted PAT 7,210 1,172 3,616 7,202 9,679 12,800 10,063 12,740
EPS (Rs) 20.5 3.3 6.0 1.2 1.6 2.1 1.7 2.1
Key ratios (%)
EBITDA margin 43.4 47.4 48.2 50.4 49.9 49.8 49.6 50.3
PAT margin 10.5 2.2 6.2 11.3 13.0 15.7 13.7 16.4
RoE 11.1 1.7 3.7 5.6 7.7 11.6 9.6 15.2
Yoy growth (%)
Revenues 3.7 (22.7) 9.5 10.3 16.5 9.4 15.2 5.9
EBITDA 1.2 (15.4) 11.3 15.4 15.3 9.1 13.8 7.3
PAT (15.2) (83.7) 208.4 99.2 34.4 32.2 26.4 26.6

Source: Company, Kotak Institutional Equities estimates

We revise our SOTP-based Fair Value to Rs36 on incorporating recent projects and roll forward
Exhibit 9: SOTP analysis of IRB, March fiscal year-ends (Rs/share)
Value Stake Value of IRB's stake Per share
(Rs mn) (%) (Rs mn) (Rs) Comment
BOT FCFE
Ahmedabad Vadodara (4,386) 100 (4,386) (1) Two-year forward FCFE
Mumbai-Pune 26,327 100 26,327 4 Two-year forward FCFE
InVIT
Equity value 114,126 51 58,204 Valuation of 9 projects
Project will generate nearly Rs10 bn PBT from EPC of Rs60 bn and will take care of
Ganga Expressway 31,485 51 16,057
remaining equity requirements
Palsit Dankuni 11,173 51 5,698 Two-year forward FCFE
Hyderabad ring road 48,073 51 24,517 Two-year forward FCFE
Samkhayali Santalpur BOT 4,020 51 2,050 1.2X book value
Discounting is due to a) holding in the form of InVITs units having lower liquidity b)
Holding discount (25%) 26,632 comparable with listed InVIT c) pending receivables of Rs32 bn from the InVIT for
IRB d) in line with holding company discount taken for other companies
Net value of IRB's stake 77,845 13
Other investment in Sindhudurg, InVIT, real estate 12,529 100 12,529 2 1X book value
7.5X two-year forward EV/EBITDA bakes in recovery in order inflows from FY2024, 8%
Construction 99,200 100 99,200 16
revenue CAGR over next 3 years along with debt reduction
Growth capital from deal proceeds 1,328 2,656 — 2X book value

Sum 214,172 36

Source: Company, Kotak Institutional Equities estimates

IRB Infrastructure
Capital Goods India Research
 7

Exhibit 10: Consolidated financials of IRB, March fiscal year-ends, 2013-26E (Rs mn)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 2026E
Income statement
Total operating income 36,872 37,319 38,475 51,279 58,459 56,941 66,070 68,522 52,987 58,037 64,016 74,581 81,587 88,309
Construction 25,988 25,364 20,029 30,049 34,675 38,047 44,142 50,156 36,334 40,162 42,786 48,026 52,697 56,978
Toll collection BOT 10,884 11,955 18,356 21,231 23,784 18,894 21,928 18,366 16,652 17,875 21,230 26,555 28,890 31,332
Total operating costs (20,540) (19,782) (16,358) (24,676) (27,976) (30,147) (36,697) (38,808) (27,859) (30,061) (31,724) (37,335) (40,948) (44,286)
Construction expenses (19,126) (18,189) (13,871) (21,694) (24,540) (27,190) (34,121) (36,529) (26,282) (28,368) (29,985) (35,059) (38,469) (41,594)
BOT expenses (1,414) (1,593) (2,487) (2,983) (3,436) (2,957) (2,576) (2,279) (1,577) (1,694) (1,739) (2,276) (2,479) (2,692)
EBITDA 16,333 17,537 22,117 26,603 30,483 26,794 29,373 29,714 25,127 27,976 32,292 37,246 40,639 44,023
Other income 1,301 1,214 1,130 1,271 1,232 1,687 1,955 1,949 1,889 5,517 3,017 3,434 4,043 4,593
Financial charges (6,153) (7,561) (9,312) (10,639) (13,327) (9,667) (11,200) (15,643) (16,924) (18,906) (15,146) (15,214) (15,662) (15,599)
Depreciation (4,415) (4,770) (7,071) (8,533) (8,548) (5,440) (5,395) (4,683) (5,817) (6,828) (8,321) (10,168) (11,901) (12,329)
Pre-tax profit 7,066 6,419 6,865 8,702 9,840 13,373 14,733 11,338 4,275 7,760 11,841 15,299 17,119 20,688
Taxation (1,530) (1,823) (1,441) (2,306) (2,685) (5,444) (6,233) (4,543) (1,445) (1,882) (3,569) (4,011) (4,657) (5,734)
Net profit 5,536 4,596 5,424 6,396 7,155 7,930 8,500 6,794 2,830 5,877 8,272 11,288 12,462 14,953
Share of profit/(loss) from 9 SPVs or ext income — — — — — — — 415 (1,658) (2,262) (1,070) (1,609) 338 952
Minority interest 31 (5) 6 4 1 — — — — — — — — —
Adjusted PAT 5,567 4,591 5,429 6,400 7,155 7,930 8,500 7,210 1,172 3,616 7,202 9,679 12,800 15,905
EPS (Rs) 16.7 13.8 15.4 18.2 20.4 22.6 24.2 20.5 3.3 6.0 1.2 1.6 2.1 2.6
Balance sheet
Share holder's funds 32,556 35,607 43,609 48,363 52,716 56,925 63,151 66,829 69,008 125,656 133,789 119,200 100,646 81,466
Minority interest 1,092 356 351 355 — — — — — — — — — —
Loan funds 87,761 110,841 125,762 156,261 139,631 138,256 165,931 85,240 180,851 166,853 167,397 136,447 133,837 138,922
Total sources of funds 121,667 146,947 385,391 407,759 449,306 347,787 362,124 290,382 373,946 404,258 408,398 360,242 336,471 318,267
Net block 104,248 130,411 365,991 390,565 310,826 367,115 367,320 280,657 277,673 273,336 264,798 257,857 245,419 232,441
Investments 620 145 88 1,483 2,574 9,533 6,532 41,537 48,078 49,042 51,409 51,409 51,409 51,409
Cash & bank balances 14,710 15,012 15,798 15,008 13,077 12,678 15,603 22,707 23,380 17,438 24,171 2,241 3,271 2,111
Net current assets (ecl. cash) 2,089 1,379 3,515 703 (4,006) (41,539) (27,330) (54,519) 24,815 64,441 68,019 48,735 36,371 32,306
Total application of funds 121,667 146,947 385,391 407,759 449,306 347,787 362,124 290,382 373,947 404,257 408,398 360,242 336,471 318,267
Cash flow
Operating profit before working capital changes 16,104 16,928 21,806 25,568 29,030 23,037 25,095 27,536 23,914 29,349 30,669 35,061 40,363 43,833
Change in working capital / other adjustments 239 710 (2,136) 2,812 4,709 37,533 (14,209) 27,189 (79,334) (39,625) (3,579) 19,285 12,363 4,065
Net cashflow from operating activites 16,343 17,638 19,671 28,380 33,739 60,570 10,885 54,725 (55,420) (10,276) 27,091 54,346 52,726 47,899
Capex (28,668) (30,934) (27,149) (42,493) 23,831 (64,674) (27,018) 86,471 (16,942) (15,080) (5,392) (5,844) (2,070) (3,460)
Free cash flow (12,325) (13,296) (7,478) (14,113) 57,570 (4,105) (16,132) 141,195 (72,362) (25,356) 21,699 48,502 50,656 44,439

Yoy growth (%)

Revenues 17.7 1.2 3.1 33.3 14.0 (2.6) 16.0 3.7 (22.7) 9.5 10.3 16.5 9.4 8.2
EBITDA 19.3 7.4 26.1 20.3 14.6 (12.1) 9.6 1.2 (15.4) 11.3 15.4 15.3 9.1 8.3
PAT 11.1 (17.5) 18.2 17.9 11.8 10.8 7.2 (15.2) (83.7) 208.4 99.2 34.4 32.2 24.3
Key ratios (%)
EBITDA margin 44.3 47.0 57.5 51.9 52.1 47.1 44.5 43.4 47.4 48.2 50.4 49.9 49.8 49.9
PAT margin 15.1 12.3 14.1 12.5 12.2 13.9 12.9 10.5 2.2 6.2 11.3 13.0 15.7 18.0
Net debt: Equity (X) 2.2 2.7 2.5 2.9 2.4 2.2 2.4 0.9 2.3 1.2 1.1 1.1 1.3 1.7
RoE 18.2 13.5 13.7 13.9 14.2 14.5 14.2 11.1 1.7 3.7 5.6 7.7 11.6 17.5
RoCE 9.3 7.5 4.8 3.6 3.9 3.4 4.2 5.1 3.7 4.6 4.4 5.4 6.9 8.3

Source: Company, Kotak Institutional Equities estimates

IRB Infrastructure
Capital Goods India Research
 DISCLAIMERS, DISCLOSURES & LEGAL
“Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is
responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies
and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or
views expressed in this report: Teena Virmani, Aditya Bansal and Sai Siddhardha."

Ratings and other definitions/identifiers

Definitions of ratings

BUY. We expect this stock to deliver more than 15% returns over the next 12 months.

ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.

Our Fair Value estimates are also on a 12-month horizon basis.

Our Ratings System does not take into account short-term volatility in stock prices related to movements in the market. Hence, a particular Rating may
not strictly be in accordance with the Rating System at all times.

Distribution of ratings/investment banking relationships

Kotak Institutional Equities Research coverage universe

Percentage of companies covered by Kotak Institutional

70%
Equities, within the specified category.

60%
Percentage of companies within each category for which
Kotak Institutional Equities and or its affiliates has
50%
provided investment banking services within the previous
12 months.
40% * The above categories are defined as follows: Buy = We
33.2% expect this stock to deliver more than 15% returns over
29.7%
30% the next 12 months; Add = We expect this stock to deliver
5-15% returns over the next 12 months; Reduce = We
19.0% 18.1% expect this stock to deliver -5-+5% returns over the next
20% 12 months; Sell = We expect this stock to deliver less than
-5% returns over the next 12 months. Our target prices
10% are also on a 12-month horizon basis. These ratings are
4.7% 4.7%
used illustratively to comply with applicable regulations. As
0.4% 0.4%
of 31/03/2023 Kotak Institutional Equities Investment
0%
Research had investment ratings on 232 equity securities.
BUY ADD REDUCE SELL

Source: Kotak Institutional Equities

As of March 31, 2023

Coverage view
The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following
designations: Attractive, Neutral, Cautious.

Other ratings/identifiers

NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable
regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or
strategic transaction involving this company and in certain other circumstances.

CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.

NC = Not Covered. Kotak Securities does not cover this company.

RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a
sufficient fundamental basis for determining an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in
effect for this stock and should not be relied upon.

NA = Not Available or Not Applicable. The information is not available for display or is not applicable.

NM = Not Meaningful. The information is not meaningful and is therefore excluded.

India Research
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