Sun TV Network14Aug21

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Emkay

India Equity Research | Media & Entertainment

August 16, 2021

Result Update

Sun TV Network Refer to important disclosures at the end of this report

Ad recovery slower than expected

Revenue/EBITDA missed our estimates by 8%/6% due to weak ad and subscription

revenues. Ad revenue was down 35% over Q1FY20 vs. a 22% decline for Zee. The higher

dependence on retail advertisers in the South market led to a greater impact on Sun TV.

Clarity on domestic subscription revenue should emerge after implementation of NTO 2.0.

Sun has changed its amortization policy for film satellite rights from 100% in 1st year to

spreading it over 4 years, resulting in Rs703mn rise in PAT, with no impact on cash flows.

Management stated that it is on track to strengthen its content offerings across markets

and has started with the launch of Master Chef in Tamil in August. It has a strong line-up

of non-fiction shows across the South markets for the coming weeks.

Retail ad revenues were still below pre-Covid levels. We cut FY22-23E EBITDA by 3-5%,

while earnings were compensated by the lower amortization charge. Retain Hold & roll

forward to Sept’23E, with a revised TP of Rs520 (12x Sep’23E EPS) from Rs505 earlier.

Relative price chart

Source: Bloomberg This report is solely produced by Emkay Global. The following person(s) are responsible for the production of the recommendation:

Naval Seth

[email protected]

+91 22 6624 2414

Sonali Shah

[email protected]

+91 22 6624 2482

-20

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Aug-20 Oct-20 Dec-20Feb-21 Apr-21 Jun-21 Aug-21

%Rs

Sun TV Network (LHS) Rel to Nifty (RHS)

Change in depreciation and amortization policy supports bottom-line: Although revenue

rose 34% yoy, it was 8% below our expectations. The revenue miss was on account of

subdued performance by all segments - ad revenue missed by 9%, domestic subscription

revenue by 5% and international subscription revenue by 29%. EBITDA margins contracted

by 762bps yoy, primarily due to IPL-related expenses. Adjusting for it, margins expanded by

197bps yoy. Other income was significantly lower yoy as the base quarter had a one-off MTM

gain and an income tax refund. Beginning from this year, the company has changed its

amortization policy, under which it has reassessed the useful life of film broadcasting rights

and should now amortize it over four years instead of expensing it fully upon the first telecast.

This led to a Rs703mn bump-up in RPAT.

Outlook: Although positive revenue growth is expected ahead with the recovery in ad

revenues, we believe it will be restricted in the near term. The higher dependence on local

advertisers who are refraining from ramping up spends due to the uncertainty around a third

Covid wave could potentially confine Sun’s ad revenues. In addition, the impending

implementation of NTO 2.0 after the SC hearing should also dictate domestic subscription

revenue growth. The company has been emphasizing on content launches, with a healthy

pipeline of shows across markets. The increased focus on the Bangla market with new content

releases should also augur well. That said, the constant delay and ambiguity about the

timelines for investments in Sun NXT are negative as competitors have been aggressively

investing in their own OTT platforms. Key risks: 1) faster market share recovery and ad

growth; 2) better-than-expected subscription growth; 3) minimal impact of OTT on traditional

TV in the medium term; and 4) higher-than-expected spends on the OTT platform.

Please see our sector model portfolio (Emkay Alpha Portfolio): Media & Entertainment (Page 9)

CMP Target Price

Rs 525 Rs 520 (▲) as of (August 13, 2021) 12 months

Rating Upside

HOLD (■) (1.1) %

Change in Estimates

EPS Chg FY22E/FY23E (%) 0.8/-

Target Price change (%) 2.9

Target Period (Months) 12

Previous Reco HOLD

Emkay vs Consensus

EPS Estimates

FY22E FY23E

Emkay 38.4 41.9

Consensus 39.6 42.7

Mean Consensus TP (12M) Rs 584

Stock Details

Bloomberg Code SUNTV IN

Face Value (Rs) 5

Shares outstanding (mn) 394

52 Week H/L 587 / 381

M Cap (Rs bn/USD bn) 207 / 2.79

Daily Avg Volume (nos.) 26,47,202

Daily Avg Turnover (US$ mn) 19.2

Shareholding Pattern Jun '21

Promoters 75.0%

FIIs 7.7%

DIIs 3.6%

Public and Others 13.7%

Price Performance

(%) 1M 3M 6M 12M

Absolute 1 - 3 30

Rel. to Nifty (4) (11) (6) (11)

Financial Snapshot (Consolidated)

(Rs mn) FY20 FY21 FY22E FY23E FY24E

Revenue 35,199 31,769 37,290 43,038 46,239

EBITDA 22,757 20,715 23,049 26,090 27,704

EBITDA Margin (%) 64.7 65.2 61.8 60.6 59.9

APAT 13,852 15,255 15,143 16,516 17,619

EPS (Rs) 35.2 38.7 38.4 41.9 44.7

EPS (% chg) (3.4) 10.1 (0.7) 9.1 6.7

ROE (%) 24.6 23.9 20.4 20.1 19.3

P/E (x) 14.9 13.6 13.7 12.5 11.8

EV/EBITDA (x) 8.8 9.5 8.4 7.1 6.5

P/BV (x) 3.6 2.9 2.7 2.4 2.2

Source: Company, Emkay Research

http://www.emkayglobal.com/

https://www.asiamoney.com/brokers

Sun TV Network (SUNTV IN) India Equity Research | Result Update


August 16, 2021 | 2

Exhibit 1: Actual vs. Estimates (Q1FY22)

(Rs mn) Actual Estimate % variation

Comment Emkay Consensus Emkay Consensus

Revenue 8,101 8,759 8,176 -8% -1% Driven by weakness in ad and subscription revenues

EBITDA 4,950 5,284 4,909 -6% 1% On lower revenues

EBITDA, margin 61% 60% 60% 78 bps 105 bps

PAT 3,898 3,694 3,806 6% 2% Due to lower change in depreciation and amortization policy

Source: Company, Bloomberg, Emkay Research

Exhibit 2: Summary of quarterly standalone financials

Rs mn Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 YoY (%) QoQ (%)

Net Sales 6,062 7,562 9,723 7,820 8,101 33.6 3.6

Programming Cost 671 1,002 1,224 1,134 1,140 70.0 0.5

as % of sales 11.1 13.3 12.6 14.5 14.1

Employee Expenses 731 724 673 670 681 (6.9) 1.7

as % of sales 12.1 9.6 6.9 8.6 8.4

SG&A and IPL expenses 495 815 1,820 549 1,331 169.0 142.6

as % of sales 8.2 10.8 18.7 7.0 16.4

Total operating expenditure 1,896 2,541 3,717 2,352 3,151 66.2 34.0

EBITDA 4,166 5,020 6,007 5,468 4,950 18.8 (9.5)

Depreciation 1,455 913 687 766 331 (77.3) (56.9)

EBIT 2,711 4,108 5,320 4,702 4,619 70.4 (1.8)

Other Income 1,086 516 621 506 561 (48.4) 10.8

Interest 18 16 15 172 10 (42.9) (94.1)

PBT 3,780 4,607 5,926 5,036 5,170 36.8 2.7

Tax 951 1,148 1,508 537 1,272 33.8 136.9

PAT 2,829 3,459 4,418 4,499 3,898 37.8 (13.4)

Margins (%) (bps) (bps)

EBIDTA 68.7 66.4 61.8 69.9 61.1 (762) (882)

EBIT 44.7 54.3 54.7 60.1 57.0 1,229 (311)

EBT 62.4 60.9 60.9 64.4 63.8 146 (58)

PAT 46.7 45.7 45.4 57.5 48.1 144 (942)

Effective Tax rate 25.2 24.9 25.4 10.7 24.6 (55) 1,394


Exhibit 3: Advertisement and subscription revenue breakdown

Rs mn Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22

Total Ad Revenue 1,262 2,450 3,106 3,190 2,460

YoY growth -66.6% -29.0% -10.2% 8.1% 94.9%

Subscription revenue

Cable TV (analog + Digital) 2,260 1,950 2,000 2,100 2,010

YoY Growth 34.5% 18.9% -2.4% 8.8% -11.1%

DTH 2,160 2,320 2,240 2,180 2,140

YoY Growth -5.3% 10.0% 8.0% 6.2% -0.9%

International 380 370 290 360 250

YoY Growth -7.3% -9.8% -29.3% -12.2% -34.2%

Total subscription revenues 4,800 4,640 4,530 4,640 4,400

YoY growth 9.8% 11.5% -0.1% 5.6% -8.3%





August 16, 2021 | 3

Exhibit 4: Ad revenue growth jumped meaningfully, but was 9% below projections


Exhibit 5: Decline in domestic subscription revenues was higher than our expectations


Exhibit 6: Content spends rose 70% yoy


17%2% 12%

-1% -1% -4%-14%-16%

-67%

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8%

95%

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-50%

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Y22

Rs mn

Advt. Revenue YoY Growth

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Rs mn

Domestic subscription revenue YoY Growth

18%

41%51%

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14% 11%23%

70%

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250450650850

105012501450

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August 16, 2021 | 4

Changes in estimates

We cut our FY22-23 EBITDA estimates by 3-5%. However, earnings are compensated by the

lower amortization charge as we incorporate the revised policy. Our Sept’23E depreciation and

amortization charge stands at Rs661mn, implying a minimal impact on the EPS. Keeping this in

mind, we keep our target multiple unchanged at 12x.

Exhibit 7: Changes in estimates

Particulars (Rs mn)

FY22E FY23E FY24E

Old Revised % Change Old Revised % Change Old Revised % Change

Revenue 38,107 37,290 -2.1 43,545 43,038 -1.2 45,980 46,239 0.6

EBITDA 24,163 23,049 -4.6 26,843 26,090 -2.8 27,446 27,704 0.9

EBITDA Margin % 63.4 61.8 -160 bps 61.6 60.6 -102 bps 59.7 59.9 22 bps

PAT 15,018 15,143 0.8 16,589 16,516 -0.4 17,695 17,619 -0.4

EPS 38.1 38.4 0.8 42.1 41.9 -0.4 44.9 44.7 -0.4

Source: Emkay Research

Exhibit 8: Key revenue assumptions

Rs mn FY20 FY21 FY22E FY23E FY24E

Total ad revenues 13,640 10,008 12,470 13,957 15,206

YoY growth -9% -27% 25% 12% 9%

Subscription

Domestic 15,817 17,210 17,804 19,839 21,332

YoY growth 20% 9% 3% 11% 8%

International 1,640 1,400 1,200 1,200 1,200

YoY growth -8% -15% -14% 0% 0%

IPL 2,234 2,545 3,000 3,500 3,850

Radio 1,156 604 785 902 1,011

Others 713 2 2,032 3,640 3,640

Total 35,199 31,769 37,290 43,038 46,239

YoY growth -7% -10% 17% 15% 7%





August 16, 2021 | 5

Earnings call highlights

Change in amortization policy: The company has re-assessed the useful life of film

satellite rights and will now amortize it over 4 years (30% each in the first 2 years and the

balance spread over the remaining 2 years).

Ad revenues: Retail advertisers have still not come back and spends are lower than pre-

Covid levels. It would take time for retail ads to come back as there is uncertainty around a

potential third Covid wave.

The content launch trajectory remains intact. Sun launched Master Chef in Tamil on 7th

August. The company is launching KBC in Telugu, Master Chef in Telugu and an

international format show in Malayalam. The company will also launch 4-5 new shows

in Telugu.

Now the focus will also be on the Bangla market as fiction content has been tracking well

there.

Subscription revenue: NTO 2.0 implementation is not expected to lead to revenue loss.

According to management, the extent of growth in FY22 will depend on the implementation

of NTO 2.0.

Movie production: Five movies are under production and one ‘Rajnikant’ movie is lined

up for November 2021. All five movies will be fully produced between September and

October.

The Rs12bn guidance given in the last quarter for movie production was for 15 months,

while these five movies will require Rs6bn investment.

Sun NXT: The total subscriber base of Sun NXT stands at 23.5mn as of now. A large part

of these subscribers have come from telco tie-ups. According to Sun, it will start significant

investments in fresh content once it achieves a meaningful number of direct subscribers.

Other income: The one-time effect of Rs350mn on interest dues in Q1FY21 and an income

tax refund had inflated other income in the base quarter. Lower yields are also hurting other

income currently.

Exhibit 9: 1-year forward P/E valuation band


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August 16, 2021 | 6

Key Financials (Consolidated)

Income Statement

Y/E Mar (Rs mn) FY20 FY21 FY22E FY23E FY24E

Revenue 35,199 31,769 37,290 43,038 46,239

Expenditure 12,441 11,054 14,241 16,948 18,534

EBITDA 22,757 20,715 23,049 26,090 27,704

Depreciation 7,002 4,038 5,126 6,982 7,823

EBIT 15,755 16,677 17,923 19,108 19,881

Other Income 2,609 3,069 2,551 3,151 3,851

Interest expenses 127 269 91 80 80

PBT 18,237 19,477 20,383 22,179 23,652

Tax 4,340 4,158 5,178 5,582 5,953

Extraordinary Items 0 0 0 0 0

Minority Int./Income from Assoc. (38) (64) 62 80 80

Reported Net Income 13,852 15,255 15,143 16,516 17,619

Adjusted PAT 13,852 15,255 15,143 16,516 17,619

Balance Sheet


Equity share capital 1,970 1,970 1,970 1,970 1,970

Reserves & surplus 55,276 68,567 75,822 84,457 94,194

Net worth 57,247 70,537 77,793 86,427 96,164

Minority Interest 48 50 50 50 50

Loan Funds 1,000 0 0 0 0

Net deferred tax liability 842 (3,388) (3,388) (3,388) (3,388)

Total Liabilities 59,136 67,199 74,455 83,089 92,827

Net block 11,416 9,306 9,917 10,785 11,663

Investment 26,900 35,040 35,040 35,040 35,040

Current Assets 26,092 30,267 36,525 44,997 54,466

Cash & bank balance 7,054 10,868 14,273 21,435 28,334

Other Current Assets 1,871 2,527 2,966 3,423 3,677

Current liabilities & Provision 5,936 8,878 8,490 9,196 9,806

Net current assets 20,156 21,390 28,034 35,801 44,660

Misc. exp 0 0 0 0 0

Total Assets 59,136 67,199 74,455 83,089 92,827

Cash Flow


PBT (Ex-Other income) (NI+Dep) 15,628 16,408 17,832 19,028 19,801

Other Non-Cash items 0 0 0 0 0

Chg in working cap (2,094) (1,649) (3,239) (605) (1,960)

Operating Cashflow 16,669 15,998 13,791 22,288 21,521

Capital expenditure (7,868) (2,728) (5,737) (7,850) (8,701)

Free Cash Flow 8,800 13,270 8,054 14,439 12,820

Investments 1,085 (8,140) 0 0 0

Other Investing Cash Flow 0 0 0 0 0

Investing Cashflow (4,175) (7,799) (3,186) (4,699) (4,850)

Equity Capital Raised 0 0 0 0 0

Loans Taken / (Repaid) 1,000 (1,000) 0 0 0

Dividend paid (incl tax) (11,877) (1,970) (7,882) (7,882) (7,882)

Other Financing Cash Flow 5,565 5,908 11,642 11,808 19,625

Financing Cashflow (5,440) 2,669 3,669 3,846 11,664

Net chg in cash 7,054 10,868 14,273 21,435 28,334

Opening cash position 5,952 7,054 10,868 14,273 21,435

Closing cash position 7,054 10,868 14,273 21,435 28,334





August 16, 2021 | 7

Key Ratios

Profitability (%) FY20 FY21 FY22E FY23E FY24E

EBITDA Margin 64.7 65.2 61.8 60.6 59.9

EBIT Margin 44.8 52.5 48.1 44.4 43.0

Effective Tax Rate 23.8 21.3 25.4 25.2 25.2

Net Margin 39.5 48.2 40.8 38.6 38.3

ROCE 31.8 31.3 28.9 28.3 27.0

ROE 24.6 23.9 20.4 20.1 19.3

RoIC 67.3 75.2 82.4 78.3 74.8

Per Share Data (Rs) FY20 FY21 FY22E FY23E FY24E

EPS 35.2 38.7 38.4 41.9 44.7

CEPS 52.9 49.0 51.4 59.6 64.6

BVPS 145.3 179.0 197.4 219.3 244.0

DPS 25.0 5.0 20.0 20.0 20.0

Valuations (x) FY20 FY21 FY22E FY23E FY24E

PER 14.9 13.6 13.7 12.5 11.8

P/CEPS 9.9 10.7 10.2 8.8 8.1

P/BV 3.6 2.9 2.7 2.4 2.2

EV / Sales 5.7 6.2 5.2 4.3 3.9

EV / EBITDA 8.8 9.5 8.4 7.1 6.5

Dividend Yield (%) 4.8 1.0 3.8 3.8 3.8

Gearing Ratio (x) FY20 FY21 FY22E FY23E FY24E

Net Debt/ Equity (0.1) (0.2) (0.2) (0.2) (0.3)

Net Debt/EBIDTA (0.3) (0.5) (0.6) (0.8) (1.0)

Working Cap Cycle (days) 135.9 120.9 134.7 121.8 128.9

Growth (%) FY20 FY21 FY22E FY23E FY24E

Revenue (7.0) (9.7) 17.4 15.4 7.4

EBITDA (12.7) (9.0) 11.3 13.2 6.2

EBIT (19.0) 5.9 7.5 6.6 4.0

PAT (3.4) 10.1 (0.7) 9.1 6.7

Quarterly (Rs mn) Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22

Revenue 6,062 7,560 9,723 7,820 31,165

EBITDA 4,166 5,019 6,010 5,468 20,662

EBITDA Margin (%) 68.7 66.4 61.8 69.9 66.3

PAT 2,829 3,458 4,421 4,499 15,207

EPS (Rs) 7.2 8.8 11.2 11.4 38.6


Shareholding Pattern (%) Jun-20 Sep-20 Dec-20 Mar-21 Jun-21

Promoters 75.0 75.0 75.0 75.0 75.0

FIIs 10.3 10.9 9.4 9.0 7.7

DIIs 5.6 5.2 5.0 4.1 3.6

Public and Others 9.1 8.9 10.5 12.0 13.7

Source: Capitaline




August 16, 2021 | 8

RECOMMENDATION HISTORY TABLE

Date Closing

Price TP

Period (months)

Rating Analyst

13-Jun-21 531 505 12m Hold Naval Seth

08-Feb-21 551 541 12m Hold Naval Seth

13-Nov-20 425 439 12m Hold Naval Seth

17-Aug-20 426 439 12m Hold Naval Seth

28-Jun-20 421 433 12m Hold Naval Seth

21-Apr-20 359 427 12m Hold Naval Seth

15-Feb-20 497 547 12m Hold Naval Seth

01-Jan-20 440 497 12m Hold Naval Seth

12-Nov-19 529 497 12m Hold Naval Seth

23-Sep-19 499 497 12m Hold Naval Seth

09-Aug-19 450 445 12m Sell Naval Seth

23-May-19 548 529 12m Sell Naval Seth

04-Apr-19 627 574 12m Sell Naval Seth

11-Feb-19 574 574 12m Sell Naval Seth

05-Nov-18 618 601 12m Sell Naval Seth

23-Oct-18 632 601 12m Sell Naval Seth


RECOMMENDATION HISTORY CHART

Source: Bloomberg, Company, Emkay Research

260

368

476

584

692

800

16

-Aug

-18

13

-Fe

b-1

9

13

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-19

10

-Fe

b-2

0

09

-Aug

-20

06

-Fe

b-2

1

06

-Aug

-21

BUY Hold SellAccumulate Reduce PriceTarget Price




August 16, 2021 | 9

Emkay Alpha Portfolio – Media & Entertainment

EAP sector portfolio

Company Name BSE200 Weight

EAP Weight

OW/UW (%)

OW/UW (bps)

EAP Weight (Normalised)

Media & Entertainment 0.24 0.23 -4% -1 100.00

Inox Leisure 0.00 0.00 NA 0 0.00

PVR 0.00 0.00 NA 0 0.00

Sun TV Network 0.05 0.04 -21% -1 15.62

Zee Entertainment 0.19 0.19 0% 0 80.18

Cash 0.00 0.01 NA 1 4.19


* Not under coverage: Equal Weight

High Conviction/Strong Over Weight High Conviction/Strong Under Weight

Sector portfolio NAV

Base Latest

1-Apr-19 13-Aug-20 11-Feb-21 12-May-21 13-Jul-21 12-Aug-21

EAP - Media & Entertainment 100.0 45.7 59.5 54.3 59.1 52.4

BSE200 Neutral Weighted Portfolio (ETF) 100.0 41.1 53.7 49.3 53.7 47.7

*Performance measurement base date 1st April 2019


Price Performance (%)

1m 3m 6m 12m

EAP - Media & Entertainment -11.3% -3.5% -11.9% 14.7%

BSE200 Neutral Weighted Portfolio (ETF) -11.2% -3.4% -11.2% 15.9%


NAV chart


Please see our model portfolio (Emkay Alpha Portfolio): Nifty

Please see our model portfolio (Emkay Alpha Portfolio): SMID

“Emkay Alpha Portfolio – SMID and Nifty are a supporting document to the Emkay Alpha

Portfolios Report and is updated on regular intervals”

25

41

57

73

89

105

Apr-19 Jul-19 Nov-19 Feb-20 Jun-20 Sep-20 Jan-21 Apr-21 Aug-21

NAV

EAP - Media & Entertainment BSE200 Neutral Weighted Portfolio (ETF)

Analyst: Naval Seth

Contact Details

[email protected]

+91 22 6624 2414

Sector

Consumer Durables, Media &

Entertainment, SMID and Telecom

Analyst bio

Naval holds an MBA in Finance and has

more than 13 years of experience in

equity research. His team currently

covers 19 stocks spread across three

different sectors.


https://web3.emkayglobal.com/ResearchAccess/Upload/Nifty_Aug21.pdf

https://web3.emkayglobal.com/ResearchAccess/Upload/SMID_Aug21.pdf

https://web3.emkayglobal.com/ResearchAccess/Upload/SMID_Aug21.pdf

mailto:[email protected]



August 16, 2021| 10

Emkay Rating Distribution

Ratings Expected Return within the next 12-18 months.

BUY Over 15%

HOLD Between -5% to 15%

SELL Below -5%

Completed Date: 16 Aug 2021 11:18:42 (SGT) Dissemination Date: 16 Aug 2021 11:19:42 (SGT)

Sources for all charts and tables are Emkay Research unless otherwise specified.

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EGFSL along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail), merchant banking, commodity broking, depository participant, portfolio management, insurance broking and services rendered in connection with distribution of primary market issues and financial products like mutual funds, fixed deposits. Details of associates are available on our website i.e. www.emkayglobal.com EGFSL is registered as Research Analyst with SEBI bearing registration Number INH000000354 as per SEBI (Research Analysts) Regulations, 2014. EGFSL hereby declares that it has not defaulted with any stock exchange nor its activities were suspended by any stock exchange with whom it is registered in last five years, except that NSE had disabled EGFSL from trading on October 05, October 08 and October 09, 2012 for a manifest error resulting into a bonafide erroneous trade on October 05, 2012. However, SEBI and Stock Exchanges have conducted the routine inspection and based on their observations have issued advice letters or levied minor penalty on EGFSL for certain operational deviations in ordinary/routine course of business. EGFSL has not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by SEBI at any point of time. EGFSL offers research services to clients as well as prospects. 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. Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company(s) covered in this report EGFSL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject EGFSL or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be used by private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of EGFSL . All trademarks, service marks and logos used in this report are trademarks or registered trademarks of EGFSL or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.

This publication has not been reviewed or authorized by any regulatory authority. There is no planned schedule or frequency for updating research publication relating to any issuer.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets Disclaimer for U.S. persons only: This research report is a product of Emkay Global Financial Services Limited (Emkay), 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 Financial Institutions Regulatory Authority (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. This report is intended for distribution to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. 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.





August 16, 2021| 11

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL) The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible of the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer, director or employee of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant). The research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. EGFSL has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the EGFSL and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of EGFSL compensation to any specific investment banking function of the EGFSL. 1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interest that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at the arm’s length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):

Disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company(s) covered in this report-: 1. EGFSL, its subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of August 16, 2021 2. EGFSL, and/or Research Analyst does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report Disclosure of previous investment recommendation produced: 3. EGFSL may have published other investment recommendations in respect of the same securities / instruments recommended in this research

report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by EGFSL in the preceding 12 months.

4. EGFSL , its subsidiaries and/or other affiliates and Research Analyst or his/her relative’s does not have any material conflict of interest in the securities recommended in this report as of August 16, 2021.

5. EGFSL, its subsidiaries and/or other affiliates and Research Analyst or his/her relative’s does not have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the August 16, 2021

6. EGFSL, its subsidiaries and/or other affiliates and Research Analyst have not received any compensation in whatever form including compensation for investment banking or merchant banking or brokerage services or for products or services other than investment banking or merchant banking or brokerage services from securities recommended in this report (subject company) in the past 12 months.

7. EGFSL, its subsidiaries and/or other affiliates and/or and Research Analyst have not received any compensation or other benefits from securities recommended in this report (subject company) or third party in connection with the research report.

8. Securities recommended in this report (Subject Company) has not been client of EGFSL, its subsidiaries and/or other affiliates and/or and Research Analyst during twelve months preceding the August 16, 2021




August 16, 2021| 12

RESTRICTIONS ON DISTRIBUTION

General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is not for distribution into Australia.

Hong Kong This report is not for distribution into Hong Kong.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is not for distribution into Malaysia.

Singapore

This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 16800306E) or DBSVS (Company Regn. No. 1860024G) both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an agreement under Regulation 32C of the financial Advisers Regulations. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

United Kingdom

This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai International Financial Centre

This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608-610, 6th Floor, Gate Precinct Building 5, PO Box 506538, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United Arab Emirates

This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States

DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other jurisdictions In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Emkay Global Financial Services Ltd.

CIN - L67120MH1995PLC084899

7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India

Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com


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