Paints: Spark Shade-Cardmailers.sparkcapital.in/uploads/Consumer/3QFY15/Shade Card 3QFY15… · involving brand ambassador ‘Shahrukh Khan ... recommendations of the Audit Committee,

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Paints: Spark Shade-Card

Executive Summary

Market data

BSE SENSEX 27,274

Nifty 8,235

Date Jan 09, 2015 Spark Shade-Card: 3QFY15 – ‘Flying colors’ In our endeavor to keep pace with the ever evolving Indian paints sector, we publish our 3QFY15 edition of our quarterly

update on the sector - ‘Spark Shade-Card’. As almost all the key listed participants in the sector maintain utmost secrecy on

the vital business details, we have to rely heavily on our channel checks aka ‘Scuttlebutt notes’ and media inputs to keep

abreast with the key developments in the sector. Hence, we believe that a structured effort like ‘Spark Shade-Card’ could not

only help us paint a coherent picture on the paint industry but also update the investor community on the current trends and

emerging long term themes.

Our Key thoughts on the sector post interaction with Industry participants - (1) Decorative Paints – Driven by improving

consumer confidence and burgeoning repainting demand, volume growth expected to be robust for all paint players. We

believe lower commodity cost has enabled several players to roll out lucrative offers to distributors, we decipher that majority

of promotional activities have been below the line this quarter. We understand that the premiumization trend gained further

momentum across product categories in 3QFY15. Offtakes across Tier 1/2/3 towns witnessed good traction. (2) Industrial

Paints – Though business sentiment has improved, growth in industrial paints seems to be a mixed bag. Passenger car and

white goods volumes are expected to increase in high single digits; however infrastructure activity remains largely subdued.

Pricing power continues to be feeble, better economies of scale to lead margin expansion in medium to long term.

Online is just for ‘marketing’– Though several paint players initiated tie-ups with online commerce participants, we

understand that it was primarily for marketing purposes rather than establishing online as a long term distribution channel

partner. Our interactions with industry participants and understanding on the sector leads us to believe that the distribution

moat of decorative paints cos. would remain untouched by the online retailing wave in the same way as it survived the

modern retail wave India witnessed in the last decade. We however continue to closely monitor trends on this front.

How do we see the current quarter revenue momentum shaping up for the coverage paint companies?

Akzo Nobel India (AKZO): ~8-9% volume growth in the decorative paint segment along with recovery in the industrial paints

to lead to ~12% yoy revenue growth. Operating margins to expand despite higher royalty payment on account of higher gross

margins. PAT to be impacted by other income vagaries. Watch out: Trends in decorative paints, margin expansion initiatives.

Asian Paints (APNT): Decorative segment to report double digit volume growth-~14% growth on the back of improved

revenue momentum and a high base effect. Margins to expand backed by higher gross margin. Watch out: Comments/

guidance on - demand outlook, raw material prices (TiO2 in particular), new acquisitions (home decor) and their performance.

Berger Paints (BRGR): ~14% increase in deco paints volume offtakes coupled with ~4-5% favourable price mix in decorative

paints in addition to robust growth in subsidiaries to lead to good revenue growth. Expanded revenue base to drive margin

expansion. Watch out: Hindupur plant production status, product-mix changes, rural-urban offtakes and raw material scenario.

Kansai Nerolac (KNPL): Driven by improved auto volumes and signs of revival in Industrial cycle, KNPL revenues are

expected to grow at ~21% yoy. We also understand from our channel checks that KNPL has rolled out several initiatives in

the decorative paints segment, which should lead to the company recording robust growth in decorative paints too. Subdued

base quarter performance coupled with lower raw material cost to lead to operating margin expansion. Watch out: Comments/

guidance on demand outlook across business verticals, pricing power in the automotive paints business

Stock Calls: AKZO - Add , APNT – Add , BRGR - Add, KNPL– Buy

Stock Performance (%)

Company 1m 3m 12m

Asian Paints 2.1% 27.1% 64.9%

Berger

Paints 13.8% 17.6% 109.1%

Akzo Nobel

India 3.4% 14.4% 65.2%

Kansai

Nerolac 4.6% 8.8% 79.5%

Sensex -4.1% 1.8% 34.9%

TEJASH SHAH [email protected] +91 22 4228 8155

GNANASUNDARAM S [email protected] +91 44 4344 0062

MADHAV PVR [email protected] +91 44 4344 0061

Find Spark Research on Bloomberg (SPAK <go>),

Thomson First Call, Reuters Knowledge and Factset

Tejash Shah

[email protected]

+91 22 4228 8155

Gnanasundaram S

[email protected]

+91 44 4344 0062

Madhav PVR

[email protected]

+91 44 4344 0061

mailto:[email protected]



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All numbers in Rs. mn except per share data

Quarter Change

Dec-14E Sep-14 Dec-13 YoY QoQ

Akzo Nobel India (Standalone)

Net sales 7,345 6,067 6,563 12% 21%

EBITDA 684 531 419 63% 29%

EBITDA Margin 9% 9% 6% 294bps 57bps

PAT 438 358 270 62% 22%

EPS 9.4 7.7 5.8 62% 22%

Asian Paints (Consolidated)

Net sales 41,267 36,330 34,519 20% 14%

EBITDA 7,039 5,362 5,373 31% 31%


PAT 4,564 3,473 3,294 39% 31%

EPS 4.8 3.6 3.4 39% 31%

Berger Paints India (Consolidated)

Net sales 12,454 11,042 10,298 21% 13%

EBITDA 1,681 1,259 1,315 28% 33%

EBITDA Margin 13.5% 11.4% 12.8% 73bps 209bps

PAT 1,012 670 823 23% 51%

EPS 2.9 1.9 2.4 23% 51%

Kansai Nerolac (Standalone)

Net sales 9,936 9,232 8,241 21% 8%

EBITDA 1,353 1,204 872 55% 12%


PAT 797 727 491 62% 10%

EPS 14.8 13.5 9.1 62% 10%

Spark Quarterly Estimates

Source: Company and Spark Capital estimates

Page 3


AKZO leveraging its celebrity Farhan Akthar, attempted to connect to

consumers using #1tensecstory campaign…

Source: Company, Youtube, Spark Capital

Exterior Ad’s emerged during fag end of the quarter, while promotions

as ‘Wallfie’ and ‘Har Ghar Kuch Kehta Hai’ were prominent


Berger easy clean grabbed good eye balls in the festive season,

while silk Ad’s were visible across several campaign mediums


…while Kansai Nerolac promoted its Interior Impressions HD paints

involving brand ambassador ‘Shahrukh Khan’


Interior offerings and digital promotions were prominent this quarter

Exterior Ultima Protek Royale Play ‘Wallfie’ campaign Easy Clean Interior Emulsion …while ‘Silk’ ad’s continued in select channels

Economy Super Clean Emulsion Dulux #tensecstory campaign Season greetings from SRK Interior HD technology explained

https://www.youtube.com/watch?v=_aPJGln6tFA

https://www.youtube.com/watch?v=MqGf_jxGuPo

https://www.youtube.com/watch?v=xuRJkqk94P4

https://www.youtube.com/watch?v=k5mDARGHUQ0

https://www.youtube.com/watch?v=ycc52U9ZxPw

https://www.youtube.com/watch?v=kiPw3PPy8vM&index=3&list=PLE6SpDzDWtQbwhn6TagQlvvQ75t7mnGnv

https://www.youtube.com/watch?v=Gj3SiF38mMg

https://www.youtube.com/watch?v=Z3-QtqplOPs

Page 4


Though far-away from historical peaks, GDP certainly on uptrend…

Source: GOI, Spark Capital

…real estate activities though fairly subdued

Source: FICCI real estate sentiment research, Spark Capital

0

50

100

150

200

250

300

Mar-

09

Jun-0

9

Sep-0

9

Dec-0

9

Mar-

10

Jun-1

0

Sep-1

0

Dec-1

0

Mar-

11

Jun-1

1

Sep-1

1

Dec-1

1

Mar-

12

Jun-1

2

Sep-1

2

Dec-1

2

Mar-

13

Jun-1

3

Sep-1

3

Dec-1

3

Mar-

14

Jun-1

4

Sep-1

4

Dec-1

4

New Launches Absorption Rate

9.5 8.7

9.2 9.9

7.5 6.5

6 5.1 5.4 5.2

4.7 4.8 4.4 4.8 4.7 4.7 5.7 5.3 5.2

0

2

4

6

8

10

12

YoY GDP growth Quarterly

…while decorative paints continue to enjoy unabated pricing power.

Source: Bloomberg, Company, Spark Capital

Pent Up demand to drive passenger car offtakes…

Source: SIAM, Company, Spark Capital

Macro Indicators

GDP on the recovery path, expected to grow

~5.3% in 3QFY15

Real Estate activity especially in the

residential sector stuttering as demand

continues to be elusive

90

100

110

120

130

140

150

Sep-0

8

Dec-0

8

Mar-

09

Jun-0

9

Sep-0

9

Dec-0

9

Mar-

10

Jun-1

0

Sep-1

0

Dec-1

0

Mar-

11

Jun-1

1

Sep-1

1

Dec-1

1

Mar-

12

Jun-1

2

Sep-1

2

Dec-1

2

Mar-

13

Jun-1

3

Sep-1

3

Dec-1

3

Mar-

14

Jun-1

4

Sep-1

4

Dec-1

4 0

50,000

1,00,000

1,50,000

2,00,000

2,50,000

3,00,000

3,50,000

Nov-1

2

Dec-1

2

Jan-1

3

Fe

b-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug

-13

Sep

-13

Oct-

13

Nov-1

3

Dec-1

3

Jan-1

4

Fe

b-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug

-14

Sep

-14

Oct-

14

Nov-1

4

Passenger car production

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…coupled with stable currency expected to offer cushion to margins

Source: Bloomberg, Spark Capital

…crude oil prices also show a similar trend


TIO2 prices on a downtrend…….


Sequentially lower domestic diesel prices…


Raw Material Basket Painting a Pleasant Picture

150

170

190

210

230

250

270

290

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

TiO2 (INR/Kg)

TIO2 prices lower by ~14% yoy and

~3% qoq basis on account of lower

crude prices and subdued demand

35

40

45

50

55

60

65

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

Diesel (INR/Lit)

Domestic diesel prices are

sequentially lower by ~7% 45

50

55

60

65

Jan-1

1

Mar-

11

May-1

1

Jul-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

INR/USD

Rupee Vs USD – Flat on a YOY basis.

0

1000

2000

3000

4000

5000

6000

7000

8000

0

20

40

60

80

100

120

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

INR

/Barr

el

US

D/B

arr

el

USD/Barrel INR/Barrel

Crude prices down ~23% on a $

and INR terms led by excess

supply in the global markets

Page 6


Major filings by the paint companies on the exchanges

Date Category Announcement

Asian Paints

22 Dec 2014 Update on Statutory

Auditor

Asian Paints Ltd has informed BSE that the Board of Directors of the Company, at its meeting held on December 20, 2014, on the

recommendations of the Audit Committee, have decided that M/s. B S R & Co., LLP, Chartered Accountants, remaining Statutory Auditor of the

Company shall continue to act as a sole Statutory Auditor till the conclusion of the next Annual General Meeting.

22 Oct 2014 Acquisition completion

Signed a Share Purchase Agreement and other definitive agreements and documents to acquire 51% stake in Kadisco (the “Acquisition"). The

Acquisition is subject to approval of the regulatory authorities in Ethiopia. The consideration for the Acquisition will be disclosed on closing and

completion of the Acquisition. This Acquisition will enable the Company to expand its international footprint.

Berger Paints

31 Dec 2014 Fixes Record Date for

Stock Split

Berger Paints India Ltd has informed BSE that the Company has fixed January 09, 2015 as the Record Date for the purpose of sub-division of Equity

Shares of face value of Rs. 2/- into Equity Shares of face value of Re 1/- fully paid up.

04 Nov 2014 Change in Directorate

Berger Paints has informed that the Board of Directors have appointed Mrs. Rishma Kaur and Mr. Kanwardip Singh Dhingra as Directors in

wholetime employment with effect from December 01, 2014 as a part of succession plans. Mrs. Rishma Kaur would be designated as National

Business Development Director - Retail and her appointment would fulfill the requirement to have at least one Lady Director on the Board. Mr.

Kanwardip Singh Dhingra would be designated as National Business Development Director - Industrial.

04 Nov 2014 Stock Split

Berger Paints India Ltd have finalised and approved the sub-division of the Company’s Equity Shares of nominal value of Rs. 2 each into Equity

Shares of nominal value of Re. 1/- each, fully paid up and consequently, alter the Memorandum and Articles of Association of the Company and for

that purpose, take steps to obtain approval of the shareholders by means of Postal Ballot / E- Voting.

Akzo Nobel India

08 Oct 2014 Resignation Akzo Nobel India Limited has informed the Exchange that Mr Robert Molenaar, Non-Executive Director, has resigned from the Board of the

Company, w.e.f. September 09, 2014.

Kansai Nerolac

14 Oct 2014 Reply to clarification

sought by the exchange

Kansai Nerolac Paints Ltd. (KNP) is associated with Flipkart in an endeavor to engage the consumer with its range of products online. We have also

offered a discount for the festive season on booking the painting service. Given the sensorial nature of the category, which is predominantly Do It For

Me, KNP does not envisage this move as material change in the company's nature of business. Association with Flipcart is mere marketing

association to promote our brand.

12 Oct 2014 Clarification sought from

Kansai Nerolac Paints Ltd

The Exchange has sought clarification from Kansai Nerolac Paints Ltd with respect to news article appearing in Business Standard & ZEE News on

October 13, 2014 titled "Kansai Nerolac ties up with Flipkart for festive season."

Key Filings this Quarter

Source: Exchange filings, Company, Spark Capital

Page 7


Key Developments

Asian Paints – Connecting with the ‘consumers’

Source: Company, Spark Capital

Berger Paints – Swachh Bharat campaign & Painter workshops


Akzo Nobel India – Staying relevant to changing consumer needs


Kansai Nerolac – Resorted to going ‘GREEN’ and ‘ONLINE’ to fuel growth


‘Ezy Color’ initiative attempting

to enforce people to walk into

retail outlet

Partnered with Google and

promoted its wallpaper offerings

at GOSF- 2014.

Inspired by the Swach bharat

Abhiyan, Berger launched the "Easy

Clean India Campaign" in Kolkata

Academy to be opened in Vijaywada

to assist painters adapting to

‘Express Painting’ techniques

Dulux Visualizer’ which allows to

virtually decorate room with colour

of choice using augmented reality.

Akzo Nobel declares ‘Copper Orange’ to be

the colour of FY2015. Hues and patterns

based on this colour to follow

Earth Matters convention series was

launched by Kansai Nerolac, inspiring

think-tank on green endeavours.

Kansai Nerolac initiated a tie-up with

Online giant ‘FlipKart’ as a partner in

their ‘Big billion Dollar’ sales.

Page 8


Stock performance (%) – Whole of Paints portfolio significantly outperforms the

market

Company 1 month 3 months 6 months 12 months

Asian Paints 2.1% 27.1% 37.0% 64.9%

Berger Paints 13.8% 17.6% 54.2% 109.1%

Akzo Nobel India 3.4% 14.4% 31.7% 65.2%

Kansai Nerolac 4.6% 8.8% 30.6% 79.5%

Sensex -4.1% 1.8% 6.9% 34.9%

Nifty -2.5% 4.9% 7.9% 33.2%

Valuations

Indian paint companies trading at higher PE despite average returns…


…potential of EPS growth though justifies their premium valuation



Quarterly revenue and PAT growth trends

3QFY15E (YoY) 2QFY15 (YoY) 1QFY15 (YoY)

Company Revenue

Growth

PAT

Growth

Revenue

Growth

PAT

Growth

Revenue

Growth

PAT

Growth

Asian Paints 20% 39% 17% 6% 18% 30%

Berger Paints 21% 23% 14% 7% 17% 17%

Akzo Nobel

India 12% 62% 5% 6% 12% 59%

Kansai Nerolac 21% 62% 17% 41% 17% 20%


PPG industries

Akzo Nobel

Nippon Paints

Kansai Paints

Asian Paints

Berger Paints

Akzo Nobel India

Kansai Nerolac

0%

5%

10%

15%

20%

25%

30%

35%

40%

5 10 15 20 25 30 35 40 45

RO

E -

1 Y

R F

WD

1 YR FWD PE

Nippon Paints

Sherwin Williams

Akzo Nobel

PPG industries

Kansai Paints

Asian Paints

Berger Paints Akzo Nobel

India

Kansai Nerolac

0%

5%

10%

15%

20%

25%

30%

35%

10 15 20 25 30 35 40 45

FY

14-1

6 -

EP

S C

AG

R (

%)

1 YR FWD PE

Page 9


Company Parent

Country

Markt Cap

(USD Mn)

EV

(USD

Mn)

PE PB EV/EBITDA ROE (%) OCF

Yield

Dividend

Yield

CY14E CY15E CY16E CY14E CY15E CY16E CY14E CY15E CY16E CY14E CY15E CY16E 2015 2015

Ppg Industries Inc US 30,594 30,988 24.2 23.2 19.5 5.0 5.1 5.0 11.7 12.9 11.2 40.1 24.6 27.1 5.9% 0.3%

Sherwin-Williams

Co/The US 25,043 26,462 30.3 29.6 23.9 18.5 21.2 14.9 15.4 17.4 14.9 53.4 55.0 80.4 4.3% 0.2%

Akzo Nobel NE 10,404 12,083 24.7 18.6 15.6 2.6 2.5 2.4 8.8 9.5 8.4 10.4 13.3 14.8 5.4% 0.6%

Koninklijke Dsm Nv US 11,631 8,033 27.4 17.2 14.7 1.4 1.4 1.3 9.9 9.3 8.5 2.7 7.4 8.6 5.6% 1.2%

Clariant Ag-Reg US 4,868 7,739 28.3 14.7 12.0 2.1 1.9 1.7 8.9 8.4 7.4 5.7 10.7 14.0 3.6% 2.2%

Valspar Corp JN 6,904 8,332 19.3 18.5 16.2 6.9 6.8 6.4 12.1 11.4 10.6 32.4 38.2 40.1 5.0% 0.4%

Rpm International Inc JN 6,551 8,002 23.0 20.4 17.6 4.6 3.8 3.4 13.5 12.5 11.1 21.3 20.8 22.1 4.2% 0.5%

Nippon Paint Co Ltd SZ 10,412 10,175 26.9 5.4 34.2 4.3 1.9 1.9 16.6 25.4 11.8 16.9 60.1 5.1 2.5% 0.3%

Kansai Paint Co Ltd Japan 4,630 4,523 25.0 23.6 19.9 2.0 1.9 1.8 10.5 11.0 9.8 8.4 8.6 9.4 5.3% 0.4%

Global Paint Companies Valuation Summary


Page 10


Sales (Rs. mn) EBITDA (Rs. mn) PAT (Rs. mn) EPS (Rs.)

Company FY13 FY14 FY15E FY16E FY13 FY14 FY15E FY16E FY13 FY14 FY15E FY16E FY13 FY14 FY15E FY16E

Asian Paints 1,09,386 1,27,148 1,50,310 1,79,741 17,320 19,979 24,271 29,561 11,139 12,257 15,261 18,655 11.6 12.8 15.9 19.4

Berger Paints 33,346 38,697 45,432 53,858 3,712 4,314 5,468 6,267 2,184 2,494 3,240 3,741 6.3 7.2 9.4 10.8

Akzo Nobel India 22,320 24,179 26,688 31,250 1,885 1,919 2,717 3,171 2,188 1,502 2,076 2,263 46.9 32.2 44.5 48.5

Kansai Nerolac 28,395 31,361 37,255 45,185 3,361 3,621 4,834 6,133 1,995 2,066 2,906 3,735 37.0 38.3 53.9 69.3

P/E (x) EV/EBITDA (x) EV/Sales (x)

CMP (Rs)

Mkt Cap Rating

Company FY13 FY14 FY15E FY16E FY13 FY14 FY15E FY16E FY13 FY14 FY15E FY16E (Rs. mn) Absolute

Asian Paints 69.8 63.4 50.9 41.7 44.4 38.2 31.3 25.6 7.0 6.0 5.1 4.2 810 7,77,334 Add

Berger Paints 74.2 65.0 50.0 43.3 44.4 38.1 29.9 25.9 4.9 4.2 3.6 3.0 234 1,62,153 Add

Akzo Nobel India 30.3 44.1 31.9 29.3 29.3 30.4 22.3 18.7 2.5 2.4 2.3 1.9 1,420 66,258 Add

Kansai Nerolac 56.6 54.7 38.9 30.2 33.4 31.0 23.1 18.2 4.0 3.6 3.0 2.5 2,096 1,12,958 Buy

Company

Dividend Yield Working Capital Days ROE (%) ROCE (%)

Per Share

FY15E Yield FCF OCF FY13 FY14 FY15E FY16E FY15E FY16E FY15E FY16E

Asian Paints 6.6 0.8% 1.0% 1.7% 46 41 42 42 34.4% 34.8% 30.6% 31.4%

Berger Paints 2.4 1.0% 1.6% 1.8% 71 60 60 60 26.2% 25.3% 19.5% 19.7%

Akzo Nobel India 20.0 1.4% 2.0% 2.4% 14 21 22 22 23.1% 22.8% 21.1% 20.9%

Kansai Nerolac 12.0 0.6% 1.2% 2.5% 29 25 13 14 19.0% 18.8% 17.4% 17.6%

Valuation Summary


Page 11


Recommendation History (1/2)

0

200

400

600

800

1000

1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14

Historical Target

Asian Paints

0

500

1000

1500


Historical Target

Akzo Nobel India

0

50

100

150

200

250


Historical Target

Berger Paints

Report Date CMP (Rs.) TP (Rs.) Recommendation

27/Oct/14 652 708 Add

23/Jul/14 602 690 Buy

19/May/14 531 579 Add

21/Jan/14 476 500 Add

17/Jan/14 494 538 Add

22/Oct/13 505 538 Add

11/Oct/13 466 459 Reduce

30/Jul/13 505 459 Reduce

13/May/13 471 409 Reduce

24/Jan/13 446 439 Reduce

29/Oct/12 393 415 Add

05/Sep/12 367 395 Add


13/Aug/14 1,040 1,112 Add

23/May/14 950 999 Add

06/Feb/14 780 853 Add

17/Jan/14 839 946 Add

23/Oct/13 895 946 Add

11/Oct/13 837 898 Add

16/Aug/13 850 898 Add

27/May/13 1,135 1,212 Add

19/Feb/13 995 1,095 Add

12/Nov/12 920 992 Add

05/Sep/12 862 966 Add


08/Aug/14 154 165 Add

09/Jun/14 128 135 Add

06/Feb/14 104 112 Add

17/Jan/14 106 114 Reduce

06/Nov/13 115 114 Reduce

11/Oct/13 111 107 Reduce

13/Aug/13 104 107 Reduce

06/Jun/13 116 106 Reduce

07/Feb/13 88 98 Add

09/Nov/12 70 76 Add

05/Sep/12 70 76 Add

Page 12


Recommendation History (2/2)

0

500

1000

1500

2000

2500


Historical Target

Kansai Nerolac India Report Date CMP (Rs.) TP (Rs.) Recommendation

10/Dec/14 2,000 2,315 Buy

27/Oct/14 1,937 2,224 Buy

24/Jul/14 1,630 1,730 Add

14/May/14 1,248 1,327 Add

06/Feb/14 1,175 1,124 Reduce

17/Jan/14 1,137 1,088 Reduce

11/Nov/13 1,175 1,088 Reduce

11/Oct/13 1,152 1,044 Reduce

30/Jul/13 1,175 1,044 Reduce

06/Jun/13 1,288 1,049 Sell

24/Jan/13 1,090 896 Sell

31/Oct/12 945 849 Reduce

05/Sep/12 900 820 Reduce

Page 13


Spark Disclaimer

Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities and

infrastructure advisory services. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker.

We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in the last five years. We

have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities, nor has our certificate of registration been cancelled by SEBI at any point of

time.

Spark Capital has a subsidiary Spark Investment Advisors (India) Private Limited which is engaged in the services of providing investment advisory services and is registered

with SEBI as Investment Advisor. Spark Capital has also an associate company Spark Infra Advisors (India) Private Limited which is engaged in providing infrastructure

advisory services.

This document does not constitute or form part of any offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.

This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should

be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of

companies referred to in this document.

Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies

referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. This

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a certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such applicable restrictions. This

material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

Spark Capital makes no representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this

document. Spark Capital , its affiliates, and the employees of Spark Capital and its affiliates may, from time to time, effect or have effected an own account transaction in, or

deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit

investment banking or other business from, any company referred to in this report.

This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through an independent analysis by Spark

Capital. While we would endeavour to update the information herein on a reasonable basis, Spark Capital and its affiliates are under no obligation to update the information.

Also, there may be regulatory, compliance or other reasons that prevent Spark Capital and its affiliates from doing so. Neither Spark Capital nor its affiliates or their respective

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Disclaimer

Page 14


Spark Capital and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency,

Spark Capital has incorporated a disclosure of interest statement in this document. This should however not be treated as endorsement of views expressed in this report:

Disclosure of interest statement APNT AKZO BRGR KNPL

Analyst financial interest in the company No No No No

Group/directors ownership of the subject company covered No No No No

Investment banking relationship with the company covered No No No No

Spark Capital’s ownership/any other financial interest in the company covered No No No No

Associates of Spark Capital’s ownership more than 1% in the company covered No No No No

Any other material conflict of interest at the time of publishing the research report No No No No

Receipt of compensation by Spark Capital or its Associate Companies from the subject company covered for in the last

twelve months:

Managing/co-managing public offering of securities

Investment banking/merchant banking/brokerage services

products or services other than those above

in connection with research report

No No No No

Whether Research Analyst has served as an officer, director or employee of the subject company covered No No No No

Whether the Research Analyst or Research Entity has been engaged in market making activity of the Subject Company; No No No No

Analyst Certification of Independence

The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research

analyst’s compensations was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in the report.

Additional Disclaimer for US Institutional Investors

This research report prepared by Spark Capital Advisors (India) Private Limited is distributed in the United States to US Institutional Investors (as defined in Rule 15a-6 under

the Securities Exchange Act of 1934, as amended) only by Decker and Co, LLC, a broker-dealer registered in the US (registered under Section 15 of Securities Exchange Act

of 1934, as amended). Decker and Co accepts responsibility on the research reports and US Institutional Investors wishing to effect transaction in the securities discussed in

the research material may do so through Decker and Co. All responsibility for the distribution of this report by Decker and Co, LLC in the US shall be borne by Decker and Co,

LLC. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if Spark Capital

Advisors (India) Private Limited or Decker and Co, LLC is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should

satisfy yourself before reading it that Decker and Co, LLC and Spark Capital Advisors (India) Private Limited are permitted to provide research material concerning investment

to you under relevant legislation and regulations;

Cont’d

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