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Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited
KEY DATA
Rating BUY Sector relative Outperformer Price (INR) 224 12 month price target (INR) 260 Market cap (INR bn/USD bn) 209/2.8 Free float/Foreign ownership (%) 40.9 / 9.7
What’s Changed Target Price
Rating/Risk Rating ⚊
QUICK TAKE
Online powers; ethnic launch on course
ABFRL reported an above estimate recovery (37% of Q1FY20) driven by e-commerce traction in Madura. However, adjusted margins were a miss due to higher marketing spends. Other key highlights: 1) Debt increased due to operating losses and higher inventory. 2) Launch of two ethnic wear brands on course during festive season (October). 3) FY22 target: 400+/60 Lifestyle/Pantaloons stores addition.
Ignoring the cost and debt spike in this covid quarter, factoring the encouraging recovery trends, ABFRL’s industry leading e-commerce traction and the normalizing situation, we raise our target EBITDA to 21x Q3FY23E (18x earlier, in sync with pre-covid average) leading to revised TP of INR260. Maintain ‘BUY’. Slip on debt is the biggest risk.
FINANCIALS (INR mn)
Year to March FY21A FY22E FY23E FY24E
Revenue 51,811 69,151 97,810 1,07,437
EBITDA 4,870 8,298 14,476 16,438
Adjusted profit (8,034) (3,447) 1,906 3,223
Diluted EPS (INR) (8.6) (3.7) 2.0 3.5
EPS growth (%) 215.1 (57.1) nm 69.1
RoAE (%) (43.3) (13.3) 7.2 11.1
P/E (x) nm nm 109.6 64.8
EV/EBITDA (x) 43.4 25.7 14.5 12.6
Dividend yield (%) 0 0 0 0
PRICE PERFORMANCE
E-commerce drives Madura; ethnic launch on schedule
ABFRL reported 37% overall recovery (of Q1FY20). The higher recovery versus
Q1FY21 (up 2.5x) was driven by: a) higher operational days; and
b) e-commerce channel growth. Segment-wise, recovery in Madura was up 1.4x YoY
(recovery of 46% of Q1FY20) driven by traction in e-commerce (up 3x YoY).
Pantaloons’ limited online contribution and higher share of mall-based stores saw it
clock 25% recovery. Innerwear grew 2x YoY and was ahead of pre-covid level. Gross
margin fell versus Q4FY21 due to lower absorption of manufacturing overheads.
Despite the second wave impact, cost control was limited (other expenses fell only
18% QoQ, up 45% YoY) as ABFRL stepped-up e-commerce channel-related marketing
spends. Overall, management expects recovery by festival season and around that
time it is planning to launch two premium ethnic wear brands–one in men’s wear
and another in women’s wear. ABFRL is planning to add 400+ stores in Lifestyle
brands and 60+ in Pantaloons in FY22.
Debt increases due to cash losses and working capital stretch
Debt increased to INR12bn in Q1FY22 (Q4FY21: INR6.4bn) due to operating losses
(~INR3.5bn) and higher net working capital mainly inventory (INR2bn). ABFRL targets
to limit debt to 1-2x net debt: EBITDA (Current:~2x).
Explore:
Outlook and valuations: Online powers through; retain ‘BUY’
Factoring the encouraging recovery trends, ABFRL’s industry leading e-commerce
traction and the normalizing situation, we raise our target EBITDA to 21x Q3FY23E
(18x earlier, in sync with pre-covid average) with a revised TP of INR260 (INR218
earlier). Any slip on debt remains the biggest risk to our recommendation.
Financials Year to March Q1FY22 Q1FY21 % Change Q4FY21 % Change
Net Revenue 7,740 3,200 141.9 17,836 (56.6)
EBITDA ( 1,618) ( 3,234) NM 2,570 NM
Adjusted Profit ( 3,352) ( 3,999) NM ( 1,348) NM
Diluted EPS (INR) ( 3.7) ( 5.2) NM ( 1.5) NM
Above In line Below
Profit
Margins
Revenue Growth
Overall
36,000
39,600
43,200
46,800
50,400
54,000
100
130
160
190
220
250
Jul-20 Oct-20 Jan-21 Apr-21
ABFRL IN Equity Sensex
India Equity Research Retail July 30, 2021
ABFRL RESULT UPDATE
Nihal Mahesh Jham Abneesh Roy +91 (22) 6623 3352 +91 (22) 6620 3141 Nihal.Jham@edelweissfin.com Abneesh.Roy@edelweissfin.com
Corporate access
Financial model Podcast
Video
ABFRL
Edelweiss Securities Limited
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Financial Statements
Income Statement (INR mn) Year to March FY21A FY22E FY23E FY24E
Total operating income 51,811 69,151 97,810 1,07,437
Gross profit 26,182 35,267 50,861 55,867
Employee costs 8,654 9,681 11,737 12,355
Other expenses 10,977 11,756 14,672 16,116
EBITDA 4,870 8,298 14,476 16,438
Depreciation 9,628 9,388 9,764 10,140
Less: Interest expense 5,026 3,157 3,071 2,901
Add: Other income 734 800 900 900
Profit before tax (9,050) (3,447) 2,542 4,298
Prov for tax (1,015) 0 635 1,074
Less: Other adj 0 0 0 0
Reported profit (8,034) (3,447) 1,906 3,223
Less: Excp.item (net) 0 0 0 0
Adjusted profit (8,034) (3,447) 1,906 3,223
Diluted shares o/s 933 933 933 933
Adjusted diluted EPS (8.6) (3.7) 2.0 3.5
DPS (INR) 0 0 0 0
Tax rate (%) 11.2 0 25.0 25.0
Important Ratios (%) Year to March FY21A FY22E FY23E FY24E
Pantaloon (39.9) 26.1 49.8 9.2
Madura (37.3) 29.2 35.0 10.0
Pantaloon SSSG (%) (40.0) 20.0 45.0 6.0
EBITDA margin (%) 9.4 12.0 14.8 15.3
Net profit margin (%) (15.5) (5.0) 1.9 3.0
Revenue growth (% YoY) (40.7) 33.5 41.4 9.8
EBITDA growth (% YoY) (58.3) 70.4 74.4 13.6
Adj. profit growth (%) 282.4 (57.1) nm 69.1
Assumptions (%) Year to March FY21A FY22E FY23E FY24E
GDP (YoY %) (6.0) 7.0 6.0 6.0
Repo rate (%) 3.5 3.5 4.0 4.0
USD/INR (average) 75.0 73.0 72.0 72.0
Madura SSSG (%) (35.0) 25.0 20.0 7.0
Pantaloon store 5.0 33.0 33.0 33.0
Madura store 579.0 350.0 400.0 400.0
Pantaloons - COGS (%) 0 0 0 0
Madura - COGS (%) 0 0 0 0
Pantaloons - EBITDA (%) (1.1) (3.9) (8.5) (8.5)
Valuation Metrics Year to March FY21A FY22E FY23E FY24E
Diluted P/E (x) nm nm 109.6 64.8
Price/BV (x) 7.9 8.2 7.6 6.8
EV/EBITDA (x) 43.4 25.7 14.5 12.6
Dividend yield (%) 0 0 0 0
Source: Company and Edelweiss estimates
Balance Sheet (INR mn) Year to March FY21A FY22E FY23E FY24E
Share capital 9,151 9,151 9,151 9,151
Reserves 17,287 16,341 18,247 21,470
Shareholders funds 26,438 25,491 27,397 30,621
Minority interest 0 0 0 0
Borrowings 8,184 8,144 6,144 4,144
Trade payables 23,734 24,683 25,725 28,257
Other liabs & prov 8,041 8,041 8,041 8,041
Total liabilities 73,417 73,379 74,327 78,082
Net block 34,177 34,323 34,670 34,642
Intangible assets 19,973 19,973 19,973 19,973
Capital WIP 376 441 441 441
Total fixed assets 54,526 54,737 55,084 55,056
Non current inv 67 67 67 67
Cash/cash equivalent 6,061 3,973 4,860 5,578
Sundry debtors 7,305 8,016 8,441 9,713
Loans & advances 4,822 5,357 5,357 5,357
Other assets 25,596 28,944 30,314 33,995
Total assets 73,417 73,379 74,327 78,082
Free Cash Flow (INR mn) Year to March FY21A FY22E FY23E FY24E
Reported profit (8,372) (3,447) 2,542 4,298
Add: Depreciation 9,628 9,388 9,764 10,140
Interest (net of tax) 4,292 2,357 2,171 2,001
Others 0 0 0 0
Less: Changes in WC 5,947 (3,646) (753) (2,421)
Operating cash flow 12,510 4,652 13,088 12,942
Less: Capex (1,300) (2,100) (3,100) (3,100)
Free cash flow 11,210 2,552 9,988 9,842
Key Ratios Year to March FY21A FY22E FY23E FY24E
RoE (%) (43.3) (13.3) 7.2 11.1
RoCE (%) (11.7) (0.8) 16.7 21.1
Inventory days 300 217 174 173
Receivable days 55 40 31 31
Payable days 332 261 196 191
Working cap (% sales) 5.0 9.0 7.2 8.8
Gross debt/equity (x) 0.3 0.3 0.2 0.1
Net debt/equity (x) 0.1 0.2 0 0
Interest coverage (x) (0.9) (0.3) 1.5 2.2
Valuation Drivers Year to March FY21A FY22E FY23E FY24E
EPS growth (%) 215.1 (57.1) nm 69.1
RoE (%) (43.3) (13.3) 7.2 11.1
EBITDA growth (%) (58.3) 70.4 74.4 13.6
Payout ratio (%) nm nm 0 0
Edelweiss Securities Limited
ABFRL
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Q1FY22 Concall highlights
Industry Trends:
There is a large growth in western wear at the bottom end of the market. In
case of ethnic wear, the market is shifting to the higher end of the market.
Q1FY22:
Increase in other expenses due to one-time ECL of INR120mn and higher
advertising expenses
This quarter doesn’t have too much mark down. Lower absorption of
manufacturing costs saw lower QoQ gross margins
Discounting is much lower across businesses
Madura/Lifestyle
Casual wear portfolio has grown to 59%
More than 85% of the network is open and revenue trajectory at 85% of pre
covid.
Losses in Q1FY22: Lifestyle brands run a large manufacturing base. There was a
one time impact of 40-45 days of under absorption of factory overheads. Also,
there is higher advertising ~INR200mn, majority of which is attributed to
Madura.
Of the 400 stores addition planned in Lifestyle brands, 150 will be PE Red and
50 of the new Allen Solly format
Lag between wholesale and retail recovery is around one month
Pantaloons:
Pantaloons clocked a lower recovery given the higher share of mall based stores
As per ABFRL, this is a landmark year for Pantaloons as it is embarking on a new
journey.
20 stores are ready to launched in the next 30 days.
Company is launching own app and website
Pantaloons business is at 70% recovery currently
Pantaloons business has a good ROCE so franchising does not make sense
ABFRL is replacing lower throughput, lower profitability external brands to
make space for the new collections it is launching
Innerwear/Other segments:
ABFRL is looking to double the store count
Trade outlets in innerwear: There is no reduction in the innerwear reach.
Company has rounded up common touch points due to which the store count
has fallen from 28,000 to 23,000. Of the 23,000, women’s innerwear reaches
5,000 outlets.
ABFRL
Edelweiss Securities Limited
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If things were normal company would have touched INR5bn in revenues.
Targeting INR10bn in revenues in the next two years.
Ecommerce:
ABFRL is planning to launch a multi brand app by Q4FY22
There is a lot of data gathered. The company expects to start making use of this
in the next6-12 months.
Ethnic:
ABFRL is planning two new launches: a) a premium men’s ethnic wear brand
targeted at occasions b) a premium women’s ethnic brand targeted at regular
wear.
Premium men’s ethnic wear
o This brand will be in partnership with Tarun Tahiliani and will be launched
in October.
o ABFRL is planning to launch 6 to 10 stores this year.
o 150 stores over next 3-4 years (affordable premium)
o ABFRL is targeting double digit margin in 3 years from now. This business is
less susceptible to fashion and obsolesce is lower
Premium women’s ethnic wear line.
o It will start in Pantaloons (40-50 stores) and will test out 10-15 stores
independent.
o This is more daily wear and will be priced in the mid premium to premium
(INR1500-3000).
o For this brand, ABFRL will initially target to build the brand inside
pantaloons which will drive GM for Pantaloons. As it goes out, retail
expansion will be managed based on the profitability of the brand.
Total capital committed in ethnic wear is INR0.7bn
Both these formats are very franchisable
Jaypore continues to do well online. Will open 10 stores during the year.
Japore and the men’s wear brand will take a year to break-even.
Outlook:
Net debt increased to INR12bn due to losses in Q1 and rise in working capital
requirement.
NWC was up by INR2bn
Net Debt: EBITDA target range will be 1-2x
Real boost to demand will happen during the festive period (closer to October
than December). If there is no 3rd wave Q2 will have a reasonable recovery.
Effective interest on actual debt is 7.75%
Edelweiss Securities Limited
ABFRL
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Others:
Rental is INR11bn in rent per annum. Majority of it is fixed.
Key trends
Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
Madura
Revenues (INRmn) 14,630 15,320 12,290 2,370 7,060 12,460 12,170 5,550
- Lifestyle brands 12,540 12,950 10,720 1,900 5,310 10,260 10,030 4,350
- Fast Fashion - - 410 NA NA NA NA NA
- Other businesses 2,090 2,370 1,160 470 1,750 2,200 2,140 1,200
Revenues growth (%) 15.8 13.9 (6.8) (80.4) (51.7) (18.7) (1.0) 134.2
- Lifestyle brands 15.0 13.9 (5.3) (81.1) (57.7) (20.8) (6.4) 128.9
- Other businesses 148.8 123.6 8.4 (62.4) (16.3) (7.2) 84.5 155.3
EBITDA (INR mn) 2,410 2,230 - (1,040) 650 2,170 1,880 (790)
- Lifestyle brands 2,180 2,240 660 (670) 390 1,920 1,760 (570)
- Other businesses 230 (10) (320) (370) 260 250 120 (220)
EBITDA growth (%)
- Lifestyle brands 55.7 69.7 (60.9) (171.3) (82.1) (14.3) 166.7 (14.9)
EBITDA margin (%) 16.5 14.6 - (43.9) 9.2 17.4 15.4 (14.2)
- Lifestyle brands 17.4 17.3 6.2 (35.3) 7.3 18.7 17.5 (13.1)
- Fast Fashion NA NA (82.9) NA NA NA NA NA
- Other businesses 11.0 (0.4) (27.6) (78.7) 14.9 11.4 5.6 (18.3)
EBIT (INRmn) 1,044 947 (227) (2,473) (706) 832 205 (2,197)
EBIT growth (%) 24.9 41.9 NM NM NM (12.2) (190.3) (11.1)
Innerwear(%) 67.0 NA NA NA NA NA NA NA
Innerwear distr 18,000 20,000 20,000 NA NA NA NA NA
Key metrics
EBO's (Nos.) 2,096 2,187 2,253 2,222 2,247 2,341 2,253 2,380
SSG (%) 7.0 15.0 NA NA NA (17.0) 1.7 187.0
Pantaloons
Revenues (INRmn) 9,150 10,830 6,260 820 3,690 8,110 5,970 2,200
Revenues growth (%) 16.3 12.7 (1.1) (90.8) (59.7) (25.1) (4.6) 168.3
EBITDA (INR mn) 1,450 1,090 (380) (720) 710 1,900 860 (550)
EBITDA growth (%) 178.8 23.9 (392.3) (182.8) (51.0) 74.3 (326.3) (23.6)
EBIT (INRmn) 500 998 (394) (1,730) (380) 891 (226) (1,584)
EBITDA margin (%) 15.8 10.1 (6.1) (87.8) 19.2 23.4 14.4 (25.0)
EBIT margin (%) 5.5 9.2 (6.3) (210.9) (10.3) 11.0 (3.8) (72.0)
SSG (%) 10.4 4.9 (11.7) NM NM (27.0) (10.6) 156.0
Store count (Nos.) 331 343 342 342 339 344 346 342
Source: Company, Edelweiss Research
ABFRL
Edelweiss Securities Limited
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One year forward EV/EBITDA
Source: Edelweiss Research, Bloomberg
12.0
15.0
18.0
21.0
24.0
27.0
Mar
-16
Jun
-16
Sep
-16
Dec
-16
Mar
-17
Jun
-17
Sep
-17
Dec
-17
Mar
-18
Jun
-18
Sep
-18
Dec
-18
Mar
-19
Jun
-19
Sep
-19
Dec
-19
Mar
-20
Jun
-20
Sep
-20
Dec
-20
Mar
-21
Jun
-21
(x)
Edelweiss Securities Limited
ABFRL
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 7
Quarterly summary
Year to March Q1FY22 Q1FY21 % YoY Q4FY21 % QoQ FY21 FY22E FY23E
Total income 7,740 3,200 141.9 17,836 (56.6) 52,489 69,151 97,810
Cost of goods sold 3,903 1,874 108.3 8,326 (53.1) 25,630 33,884 46,949
Employee cost 2,287 2,381 (4.0) 2,204 3.8 8,654 9,681 11,737
Rent - - 869 (100.0) 107 3,458 5,282
Other Expenditure 3,168 2,178 45.5 3,867 (18.1) 12,552 13,830 19,366
Total expenditure 9,358 6,433 45.5 15,266 (38.7) 46,942 60,853 83,334
EBITDA (1,618) (3,234) (50.0) 2,570 NM 5,548 8,298 14,476
Depreciation 2,275 2,334 (2.5) 2,470 (7.9) 9,628 9,388 9,764
EBIT (3,893) (5,568) (30.1) 100 NM (4,080) (1,089) 4,712
Interest Expense 838 1,253 (33.1) 1,196 (29.9) 5,026 3,157 3,071
Other income 242 1,486 (83.7) 202 19.5 734 800 900
Profit Before Tax (4,489) (5,335) (15.8) (893) NM (8,372) (3,447) 2,542
Prior period items - - NM - NM - - -
Provision for Tax (1,137) (1,336) NM 455 NM (1,015) - 635
Reported Profit (3,352) (3,999) NM (1,348) NM (7,357) (3,447) 1,906
Adjusted Profit (3,352) (3,999) NM (1,348) NM (7,357) (3,447) 1,906
No. of Shares outstanding (mn) 915 769 915 933 933 933
Adjusted Diluted EPS (3.7) (4.4) NM (1.5) NM (7.9) (3.7) 2.0
as % of net revenues
COGS 50.4 58.6 (814.3) 46.7 374.4 48.8 49.0 48.0
Staff expenses 30 74 NM 12 1,719.0 16.5 14.0 12.0
Rent - - - 4.9 (487.1) 0.2 5.0 5.4
Other Expenditure 41 68 NM 22 1,924.9 23.9 20.0 19.8
EBITDA (20.9) (101.1) NM 14.4 NM 10.6 12.0 14.8
EBIT (50) (174) NM 1 NM (7.8) (1.6) 4.8
PBT (58.0) (166.7) NM (5.0) NM (15.9) (5.0) 2.6
Adjusted Profit (43) (125) NM (8) NM (14.0) (5.0) 1.9
Source: Company, Edelweiss Research
ABFRL
Edelweiss Securities Limited
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Company Description
In May 2015, ABFRL came into being following consolidation of ABNL's branded
apparel business of Madura and Pantaloons. Post consolidation, Pantaloons was
renamed Aditya Birla Fashion and Retail (ABFRL). ABFRL brings with it learnings and
businesses of 2 renowned Indian fashion icons/brands, Madura and Pantaloons. This
amalgamation has helped ABFRL emerge as India’s No. 1 fashion lifestyle entity.
Madura has a vast retail network comprising exclusive outlets, premium multi-brand
and department stores – total presence of >2,250 stores. Four of its brands are
among India's top fashion names, with MRP sales in excess of INR10bn each.
Pantaloons brand is now present in 78 plus Indian cities/towns through >340 stores.
Forever21 is a fashion retailer of women’s, men’s and kids clothing and accessories
and is known for offering the hottest, most current fashion trends at great value to
consumers. The innerwear and athleisure business continues to perform
exceedingly well.
Investment Theme
Aditya Birla Fashion and Retail (ABFRL) is one of the largest branded clothing players
with 5 brands clocking >INR10bn sales each. ABFRL has ventured into fast fashion
via Forever 21 and innerwear under the Van Heusen brand thereby now housing full
bouquet of segments in the apparel category.
Key Risks
Slow GDP revival leading to lower traction in discretionary spending
While foreign brands such as Zara, Tommy Hilfiger, etc., have already established
themselves, other brands such as H&M, GAP, among others, are venturing inthe
Indian market thereby heightening competition.
Edelweiss Securities Limited
ABFRL
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Additional Data Management
CEO - Madura Vishak Kumar
CFO Jagdish Bajaj
MD Ashish Dikshit
CEO - Pantaloons Sangeeta Pendurkar
Auditor M/s. S R B C & CO LLP
Holdings – Top 10* % Holding % Holding
Nippon AMC 6.14 Sundaram AMC 1.53
UTI AMC 3.28 ICICI Pru Life 1.32
Franklin Resour 2.51 India Opportuni 1.13
Invesco AMC 1.76 Canara Robeco 1.02
Mirae AMC 1.56 Vanguard 0.83
*Latest public data
Recent Company Research Date Title Price Reco
28-May-21 Bumps ahead but on right path; Result Update
192 Buy
01-Mar-21 Clear target to the vision; Company Update
165 Buy
08-Feb-21 Margins, debt: Great going; Result Update
165 Buy
Recent Sector Research Date Name of Co./Sector Title
30-Jul-21 Shoppers Stop Stable performance; recovery promising; Result Update
24-Jul-21 V-Mart Retail Marching down south; Company Update
22-Jul-21 Avenue Supermarts Measured approach; Company Update
Rating Interpretation
Source: Bloomberg, Edelweiss research
Daily Volume
Source: Bloomberg
Rating Distribution: Edelweiss Research Coverage
Buy Hold Reduce Total
Rating Distribution* 172 54 19 246
>50bn >10bn and <50bn <10bn Total
Market Cap (INR) 215 39 5 259
*1 stocks under review
Rating Rationale
Rating Expected absolute returns over 12 months
Buy: >15%
Hold: >15% and <-5%
Reduce: <-5%
TP231
TP260
TP214
75
115
155
195
235
275
Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
(IN
R)
ABFRL IN Equity Buy Hold Reduce0
14
28
42
56
70
Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
(Mn
)
ABFRL
Edelweiss Securities Limited
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Securities, mentioned herein or (b) be engaged in any other transaction involving such Securities and earn brokerage or other compensation or act as a market maker in the financial
instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conf lict of interest with
respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance. ESL may have proprietary long/short
position in the above mentioned scrip(s) and therefore should be considered as interested. The views provided herein are general in nature and do not consider risk appetite or investment
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ESL or its associates may have received compensation from the subject company in the past 12 months. ESL or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. ESL or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Research analyst or his/her relative or ESL’s associates may have financial interest in the subject company. ESL and/or its Group Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise in the Securities/Currencies and other investment products mentioned in this report. ESL, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance.
Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i) exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by numerous market factors, including world and national economic, political and regulatory events, events in equity and debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.
Research analyst has served as an officer, director or employee of subject Company: No
ESL has financial interest in the subject companies: No
ESL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.
Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
ESL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
Subject company may have been client during twelve months preceding the date of distribution of the research report.
There were no instances of non-compliance by ESL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years except that ESL had submitted an offer of settlement with Securities and Exchange commission, USA (SEC) and the same has been accepted by SEC without admitting or denying the findings in relation to their charges of non registration as a broker dealer.
A graph of daily closing prices of the securities is also available at www.nseindia.com
Analyst Certification:
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
Edelweiss Securities Limited
ABFRL
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Additional Disclaimers
Disclaimer for U.S. Persons
This research report is a product of Edelweiss Securities Limited, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account.
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In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Edelweiss Securities Limited has entered into an agreement with a U.S. registered broker-dealer, Edelweiss Financial Services Inc. ("EFSI"). Transactions in securities discussed in this research report should be effected through Edelweiss Financial Services Inc.
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This research report is a product of Edelweiss Securities Limited ("ESL"), which is the employer of the research analysts who have prepared the research report. The research analysts preparing the research report are resident outside the Canada and are not associated persons of any Canadian registered adviser and/or dealer and, therefore, the analysts are not subject to supervision by a Canadian registered adviser and/or dealer, and are not required to satisfy the regulatory licensing requirements of the Ontario Securities Commission, other Canadian provincial securities regulators, the Investment Industry Regulatory Organization of Canada and are not required to otherwise comply with Canadian rules or regulations regarding, among other things, the research analysts' business or relationship with a subject company or trading of securities by a research analyst.
This report is intended for distribution by ESL only to "Permitted Clients" (as defined in National Instrument 31-103 ("NI 31-103")) who are resident in the Province of Ontario, Canada (an "Ontario Permitted Client"). If the recipient of this report is not an Ontario Permitted Client, as specified above, then the recipient should not act upon this report and should return the report to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any Canadian person.
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Disclaimer for Singapore Persons
In Singapore, this report is being distributed by Edelweiss Investment Advisors Private Limited ("EIAPL") (Co. Reg. No. 201016306H) which is a holder of a capital markets services license and an exempt financial adviser in Singapore and (ii) solely to persons who qualify as "institutional investors" or "accredited investors" as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore ("the SFA"). Pursuant to regulations 33, 34, 35 and 36 of the Financial Advisers Regulations ("FAR"), sections 25, 27 and 36 of the Financial Advisers Act, Chapter 110 of Singapore shall not apply to EIAPL when providing any financial advisory services to an accredited investor (as defined in regulation 36 of the FAR. Persons in Singapore should contact EIAPL in respect of any matter arising from, or in connection with this publication/communication. This report is not suitable for private investors.
Disclaimer for Hong Kong persons
This report is distributed in Hong Kong by Edelweiss Securities (Hong Kong) Private Limited (ESHK), a licensed corporation (BOM -874) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to Section 116(1) of the Securities and Futures Ordinance “SFO”. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The report also does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of any individual recipients. The Indian Analyst(s) who compile this report is/are not located in Hong Kong and is/are not licensed to carry on regulated activities in Hong Kong and does not / do not hold themselves out as being able to do so. Copyright 2009 Edelweiss Research (Edelweiss Securities Ltd). All rights reserved.
Aditya Narain
Head of Research
Aditya.narain@edelweissfin.com
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