Initiating Coverage | 31 October 2012
Sector: Consumer
Radico Khaitan
In high spirits
Gautam Duggad
(Gautam.Duggad@MotilalOswal.com); +9122 3982 5404
Sreekanth P V S
(Sreekanth.P@MotilalOswal.com); +9122 3029 5120
Investors are advised to refer through disclosures made at the end of the Research Report.

Radico Khaitan
Radico Khaitan: In high spirits
Page No.
Summary
............................................................................................................
3
Premiumization to help expand margins
.....................................................
4-6
Pricing environment turning favorable
.......................................................
7-9
Well positioned to capitalize on rising IMFL consumption
.....................
10-14
Financials: Premiumization led 23% EPS CAGR
........................................
15-18
Radico NV Distilleries JV: Receives Mega project status
................................
19
Valuations attractive, given strong earnings growth ahead................... 20-21
Annexure
....................................................................................................
22-26
Financials and valuation
...........................................................................
27-28
31 October 2012
2

Initiating Coverage |31 October 2012
Sector: Consumer
Radico Khaitan
BSE SENSEX
S&P CNX
18,431
5,598
CMP: INR117
In high spirits
TP: INR152
Buy
Premiumization to help expand margins, pricing environment improving
Bloomberg
RDCK IN
Equity Shares (m)
132.6
52-Week Range (INR)
135/92
1,6,12 Rel. Perf. (%)
0/-16/-10
M.Cap. (INR b)
15.5
M.Cap. (USD b)
0.3
Focus on premiumization to help expand operating margins by 250bp over FY12-15
Incrementally better pricing environment - has received price hikes in several states
in 1HFY13
Supportive valuations, 23% EPS CAGR to drive stock performance - expect 30% upside
Premiumization to help expand margins
We estimate 10.3% volume CAGR over FY12-15, backed by 20% volume growth
in
Magic Moments.
Earlier a mass/economy segment participant, RDCK identified
premiumization as its key strategy post FY06. In the last three years, RDCK has
launched
Morpheus
brandy,
After Dark
whisky and recently
Florence
brandy in
the premium segment. Increased thrust on the brandy segment would improve
positioning in the key South India market and also help arrest the decline in
brandy market share. The success of RDCK's premiumization strategy is reflected
in the improving salience of premium brands in overall volumes. We expect
premium brands to contribute 20% of overall volumes by FY15 against 15% in
FY12 and 8% in FY09, enabling 170bp gross margin expansion over FY12-15. Radico
has recently received a 10% cut in Glass prices which should support near term
margins, we believe.
Financial summary (INR b)
Y/E March
2012 2013E 2014E
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Sales (x)
RoE (%)
RoCE (%)
11.4
1.7
0.8
6.0
10.9
52.4
19.4
2.2
12.6
1.9
11.9
10.0
13.0
2.1
0.9
6.9
14.6
58.3
16.9
2.0
10.6
1.8
12.5
11.0
15.0
2.6
1.2
8.9
29.2
65.7
13.1
1.8
8.8
1.5
14.4
12.6
Pricing environment turning favorable
Our discussions with industry players suggest better pricing environment for
IMFL, especially in South India. The time lag between demand and approval of
price hike has come down. RDCK has received price hikes in Karnataka, Kerala,
Bihar, Madhya Pradesh, Chattisgarh in 1QFY13. Price increase in Andhra Pradesh
is likely to happen in October 2012. Karnataka is expected to grant price hikes in
November 2012. Also, we believe that the focus of the industry leader has
shifted from volumes to realizations and profits, thus improving the pricing
environment for the industry. In our view, this is a key enabler for structural
margin improvement.
Shareholding pattern %
As on
Promoter
Dom. Inst
Foreign
Others
Jun-12 Mar-12 Jun-11
40.4
10.1
26.4
23.1
40.4
10.6
26.2
22.8
40.0
14.7
27.5
17.8
Stock performance (1 year)
Supportive valuations plus margin expansion = potential upside of 30%
RDCK's leverage has improved significantly post FY09. In FY12, it redeemed FCCBs
by refinancing them through low cost (3.5%) 7-year ECBs with a two-year
moratorium. Given the expected margin improvement, sustained double digit
volume growth and 23% EPS CAGR over FY12-15, we believe there is a case for a
re-rating. However, we value RDCK at 17x FY14E P/E, in line with historical
averages. We initiate coverage with a
Buy
rating and a target price of INR152 -
30% upside. A spike in input costs and lower than expected margin expansion
are the key risks to our investment thesis.
31 October 2012
3

Radico Khaitan
Premiumization to help expand margins
Expect operating margins to expand by 250bp over FY12-15
Premium IMFL segment outperforming regular and economy segments
RDCK's new launches in the last three years in the premium to super premium segments
Increasing focus on brandy to augment market share, improve competitive positioning in
South
Salience of premium brands to increase from 15% currently to 20% of volumes by FY15
Premiumization is THE mantra
RDCK has identified premiumization as a key strategy. Favorable demographics, rising
disposable income and changing social attitude towards drinking are the key factors
driving demand for premium liquor. Besides, state governments have consistently
been increasing excise duties on liquor, making it imperative for IMFL companies to
focus on premium brands to drive profitability.
Excise duties as a percentage of gross sales have increased considerably
Source: Company, MOSL
Before 2006, RDCK was a regular/economy segment player, participating in the sub-
INR300/unit pyramid. In 2006, it launched
Magic Moments,
positioned in the premium
segment. This was its first attempt at moving up the value chain. Gross profit/case in
semi-premium brands is 5x the regular brands. Similarly, gross profit/case in the
premium segment is 1.5x the semi-premium segment.
Magic Moments: Volumes up 3.8x since FY06
Radico continues to gain market share in Vodka (%)
Source: Company, MOSL
31 October 2012
4

Radico Khaitan
After 40% CAGR in volumes since FY07, and having experienced the benefits of its
premiumization strategy, RDCK launched three more brands in the premium to super-
premium segments in the last three years. It launched
Morpheus
brandy in the super-
premium segment in 2009 and
After Dark
whisky in the premium segment in June
2010. Buoyed by the success of
Morpheus
brandy (volumes up 4.5x since FY10), in
1QFY13, RDCK launched Florence brandy in the super-premium segment in Tamil Nadu.
Florence
is at a higher price point than
Morpheus
premium brandy and further augments
RDCK's premium portfolio. Going forward, RDCK intends to roll out a premium version
of
Magic Moments
vodka.
Morpheus
After Dark
Florence
Morphues Verve -latest launch
RDCK sold 0.36m cases of
Morpheus
brandy in FY12 and we model 35% CAGR over
FY12-15. We expect premium brands to account for ~20% of volumes by FY15, up from
15% in FY12.
Salience of premium brands increasing
Source: Company, MOSL
Focusing on brandy segment to augment market share
RDCK's recent thrust in the brandy segment is dictated by the need to improve its
market positioning in South India, a key brandy market, in our view. It acquired Yezdi
Group's
Royal Lancer
and
Elkays
whisky brands in FY12 and also took on lease their
entire bottling capacity. Both these brands are selling over 0.5m cases per annum,
primarily in Karnataka and Andhra Pradesh. We believe these brands would be further
strengthened in RDCK's distribution fold. This is a strategic acquisition and should
reinforce RDCK's presence in Karnataka, Andhra Pradesh and other South Indian states.
31 October 2012
5

Radico Khaitan
Brandy market share has been declining
(%)
South India accounts for 90% of brandy
consumption
Geography-wise revenue distribution
Regionwise IMFL split of Radico
To leverage its strong pan India distribution network, RDCK is tying up with global
players to market their premium and super-premium products in India. It has a tie-up
with Earnest & Julio Gallo of California, one of the largest wineries in the world, to
distribute its wines in India. It has also tied up with Suntory (Japanese major with
annual revenue of USD20b) to market
Yamazaki
single malt and
Hibiki
blended whiskies
in India.
31 October 2012
6

Radico Khaitan
Pricing environment turning favorable
Augurs well for sector-wide gross margins
70% of the industry is government controlled, and hence, pricing is government
determined
The pricing regime is incrementally turning favorable for the industry - the quantum and
frequency of price increases has improved
Also, sector leader has shifted focus from volumes to profits
IMFL pricing environment turning favorable at the margin
Our discussions with industry players suggest improvement in the pricing environment
for the IMFL industry. There has been modest increase in the quantum of price hikes
received by the industry, especially from South Indian states. Secondly, the time lag
between demand and approval of price hike has come down. RDCK has received price
hikes from (1) Kerala in 1QFY13, (2) Madhya Pradesh, Jharkhand, Bihar, Orissa, and
CSD in 1HFY13. Andhra Pradesh price hike is likely to happen in October 2012, which is
the single largest contributor for RDCK (16%). Karnataka is expected to grant price
hikes in November 2012.
Has received price hikes in several states in 1HFY13
SL. State
No. Name
1
Karnataka
Brand-Name
8PM-Whisky
Old-Admiral Brandy
Crown Whisky
Radico-Gold-Whisky
Royal-Lancer-Whisky
After-Dark-Whisky
Magic-Moments-Vodka
Magic-Moments-Flavours-Vodka
Morpheus-Xo-Brandy
8PM-Whisky
Magic-Moments-Vodka
8PM-Whisky
Magic-Moments-Vodka
8PM-Whisky
Magic-Moments-Vodka
Magic-Moments-Flavours-Vodka
8PM-Whisky
Magic-Moments-Vodka
Magic-Moments-Flavours-Vodka
8PM-Whisky
Magic-Moments-Vodka
Black Cat Rum
8PM-Whisky
Contessa-Rum
8 Bermuda rum
m2
OAB
MXO
EXCELLENCY
CWR
BGB
%
Increase
6.0
6.0
7.0
6.0
6.0
11.0
33.0
19.0
19.0
18.0
20.0
13.0
13.0
12.0
9.0
12.0
10.0
19.0
14.0
9.0
16.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
Effetive
Date
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-April,2012-Onwards
1st-September,2012-Onwards
1st-September,2012-Onwards
1st-September,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
1st-August,2012-Onwards
Source: Company, MOSL
7
2
3
4
Bihar
Jharkhand
Madhya
Pradesh
Chattisgarh
5
6
Orissa
8
Kerala
31 October 2012

Radico Khaitan
Top 6 states contribute 50% of Radico's IMFL revenues
Source: Company, MOSL
Our discussions with industry sources also indicate that the focus of industry leader,
United Spirits (UNSP) has shifted from volumes to profitability post the change in
management. Rising state-level excise duties, volatility in raw material prices and
challenging leverage position (net debt of INR80b) could be some of the reasons for
the change in strategy. This augurs well for RDCK as well as other players as far as
pricing and realizations are concerned. In the last two years, Pernod Ricard, the second
largest player in IMFL, has driven the premiumization theme to the hilt. Its operating
profits have doubled during the said period.
Pernod Ricard has outperformed the industry led by superior performance in premium segments
Source: Penod Ricard,MOSL
31 October 2012
8

Radico Khaitan
Transformational deal involving industry leader could provide window of
opportunity to Radico
UNSP and Diageo have announced recently that they are in dialogue with respect to
possible transactions for Diageo plc to acquire an interest in United Spirits Limited.
However there is no certainty that these discussions will lead to a transaction.
Various media reports have been speculating about the potential deal. We try to
assess the impact of possible transaction from sector's viewpoint.
As discussed in the previous sections, IMFL market is seeing stronger growth in the
premium segments led by favorable demographic factors like rising disposable
incomes and aspiration levels of consumers. Consequently, the focus of most of
the IMFL participants in India has shifted towards driving Premiumisation as a
strategy in the medium to long term. Pernod Ricard has been clearly at the forefront
of this trend having doubled its sales and operating profits in two years. Despite
being 1/6th in market share compared to industry leader UNSP, it has achieved
similar levels of profit before taxes, thus underscoring the inherent benefits of
Premiumisation strategy.
If Diageo acquires strategic stake in UNSP we expect a further shift in focus of
industry players towards premium IMFL segments. Diageo's India portfolio is geared
to capitalize on the unfolding premium IMFL consumption story in India. Post the
acquisition, it will be able to drive its premium-super premium brands through a
wider distribution footprint. Given the lackluster growth in mature markets and its
underperformance vs. Pernod in India, we expect disproportionate focus from
Diageo to enhance its market footprint in India.
Combination of improving pricing environment as indeed the shift in the focus of
industry leader towards realizations/profitability could help drive the sector
profitability and margins in our view. This, in turn, can act as a potential re-rating
trigger for Radico, we believe.
From Radico's viewpoint, the UNSP-Diageo deal could give RDCK a window of
opportunity to explore market share improvement in the regular/semi-premium/
premium segments. If Diageo gets management control, there would be a transition
period (at least two quarters in our view), which RDCK could exploit to its advantage.
Such transition usually consumes significant management bandwidth and diverts
the top management's focus disproportionately towards deal completion,
integration of operations, financial deal closing, employee integration, etc.
Availability of stock in trade suffers, giving competitors a small window of
opportunity to enhance their trade presence.
31 October 2012
9

Radico Khaitan
Well positioned to capitalize on rising IMFL consumption
Contribution of IMFL increasing; volumes to grow in double digits
Third largest IMFL player, with strong CSD positioning
Contribution of branded IMFL to revenues increasing; top-4 brands constitute 70% of
volumes
8PM and Magic Moments - crucial volume drivers
Expect 10.3% volume CAGR over FY12-15
Play on the attractive IMFL opportunity in India
Radico Khaitan (RDCK) is a play on the growth opportunity in the Indian made foreign
liquor (IMFL) space, which is expected to witness 10% volume CAGR over FY12-15,
aided by a confluence of favorable demographics and rising disposable income. It has
a presence across segments and a distribution network of more than 486 wholesalers
and 36,000 retailers. RDCK has integrated operations, with 150m liters of distillation
capacity (including JV, Radico NV Distilleries), five owned bottling units and 28 contract
bottling units. It has a strong presence in CSD (Canteen Stores Department), with 18
registered brands. Hitherto a regular segment player, RDCK has shifted its focus to
premiumization and has launched four new brands in the premium to super-premium
segments in the last three years.
Third largest player in volume terms
In terms of cases sold, RDCK is the third largest player in the IMFL space, with sales of
17.7m cases in FY12.Having entered the branded IMFL space in the late-90s, it has
created four new millionaire brands (8PM,
Magic Moments, Old Admiral
and
Contessa)
across product segments like whisky, vodka, brandy and rum. RDCK was earlier focused
on the value for money segment, with price points of less than INR300/750ml. It has
four pillar brands and a host of mid-size and regional brands. It entered the semi-
premium segment with the launch of
Magic Moments
vodka in 2006, followed by
Morpheus
brandy in 2009,
After Dark
whisky in 2010 and
Florence
brandy, recently.
Radico's IMFL market share has stabilized at 8%
Industry market share (FY11)
Source: Company, MOSL
31 October 2012
10

Radico Khaitan
Market share of industry leader in various IMFL segments
Category
BII Scotch
Premium Scotch
Regular Scotch
Whiskey
Premium
Prestige
Regular
Vodka
Prestige
Regular
Regular Rum
Regular Brandy
Regular Gin
UNSP Market Share (%)
44
6
60
61
55
7
83
56
67
79
Source: Company, MOSL
Radico Khaitan: Brand architecture
Price Range/
750ml
Whisky
Economy
<INR150
Big Hit, Windies,
Radico Choice,
Gold Supereme,
Special
Appointment
Big Hit, Windies,
Black Cat, Rampur
No1, Tropicana
White
Regular
INR150-200
8PM,
Old
Admiral
Deluxe
INR201-300
Whytehall
Semi Prem
INR301-450
Premium
INR451-550
After Dark
Super Prem
>INR550
Rum
Brandy
Vodka
Whitefield, Big
Hit
Gin
Contessa,
Bermuda, Load
Nelson, Old
Admiral
Brihans Grape,
Whitefield
Special
Appointment,
Red Russian
Contessa, Blue
Bird, Goa Dry
Gin
Bermuda White,
Contessa White
Old Admiral,
8PM
Brihan's Gold,
Napolean
Magic Moments
Morpheus
8PM and Magic Moments crucial volume drivers
8PM
whisky is RDCK's first success in the branded IMFL space. However, it
underperformed in FY07-09, with 23% volume decline. This was due to change in
formulation and spike in input cost. Subsequently, RDCK reverted to grain-based
formulation and re-launched
8PM
with new packaging, supported by heavy
investments. Since its re-launch,
8PM
has registered 10.3% volume CAGR over FY09-
12. We build in 10% volume CAGR for FY12-15.
31 October 2012
11

Radico Khaitan
8PM to continue growing at ~10% CAGR - Whisky
M cases
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13E
FY14E
FY15E
Sales
5.7
6.1
5.5
4.6
5.1
5.6
6.3
6.9
7.6
8.3
Gr. %
7.0
-9.8
-16.4
10.9
10.6
11.9
9.6
9.5
9.5
8PM
4.2
4.4
3.5
3.4
3.6
4.0
4.6
5.0
5.5
6.1
Gr. %
Key Brand Sh.
%
73.7
73.7
4.8
72.1
-20.5
63.6
-2.9
73.9
5.9
70.6
11.9
71.4
13.4
72.4
10.0
72.6
10.0
73.0
10.0
73.4
Source: Company, MOSL
Magic Moments
vodka has achieved strong market positioning, with volume CAGR of
40% over FY07-12. Affordable price point (INR350-400/750ml), attractive packaging
and launch of various flavors and variants have enabled the brand to maintain strong
momentum. It has cornered ~30% share in the vodka market and 90% share in the
semi-premium segment. We expect vodka as a category to continue gaining share
and maintain 20% volume CAGR on account of the following reasons:
Increasingly, the youth is preferring white spirits to brown spirits, which are
conceived as drinks for the older generation.
India's current demographic profile suggests that 50% of the population is below
25 years and 65% is in the 25-35 year age group. The drink favored by the youth
population (with rising purchasing power) will grow at a faster pace than the
market.
Vodka can be mixed with water, juice, soda and cold drinks, which increases the
taste options for the drinker.
Vodka gives smoother taste, less 'kick' and no bad breath.
Heavy investments in the category through celebrity endorsements.
Magic Moments to continue growing at ~20% CAGR - Vodka
M cases
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13E
FY14E
FY15E
Sales
0.1
0.5
0.8
1.1
1.5
2.0
2.4
2.8
3.3
4.0
Gr. %
400
60
37.5
36.4
34.2
17.4
16.9
19.6
21.5
Magic Moments
0.1
0.4
0.7
1.0
1.4
1.89
2.2
2.6
3.1
3.8
Gr. %
Key Brand Sh.
%
100.0
300
80.0
75
87.5
42.9
90.9
40.0
93.3
35.0
93.9
17.6
94.0
17.0
94.1
20.0
94.4
22.0
94.8
Source: Company, MOSL
We expect consolidated volume CAGR of 10.3% over FY12-15, aided by double-digit
volume growth in
Magic Moments, 8PM
and
Old Admiral.
31 October 2012
12

Radico Khaitan
Radico's volumes to grow at 10.3% CAGR over FY12-15…
…driven by the vodka, whisky and brandy segments (% growth)
Source: Company, MOSL
Branded IMFL ~74% of sales; contribution of country liquor, bulk spirits
declining
Branded IMFL contributes ~70% of RDCK's revenue, with country liquor (5%), bulk
spirits (16%, molasses and grain based) and others (9%) accounting for the rest. The
contribution of IMFL to overall revenue has increased by 500bp since FY09. We expect
it to move up further by 300bp over the next three years owing to lower growth in
country liquor and bulk spirits. RDCK's strategy of driving premium IMFL brands should
also augment overall salience of IMFL, in our view.
The sale of country liquor is restricted to the state where the distillery is situated and
as such this segment is growing at a CAGR of just 5%. Also, country liquor sales are
strongly correlated with the election cycle in India. Country liquor sales were up 9%
in FY10, when the general elections were held. Spirit sales are a function of surplus
production over in-house requirements. As the branded IMFL and country liquor sales
increase, the availability of spirits for bulk sale declines.
Expect IMFL contribution to rise further
Segment-wise sales growth trends (%)
Source: Company, MOSL
31 October 2012
13

Radico Khaitan
Top four brands account for ~70% of volumes
Source: Company, MOSL
Share of Magic Moments to increase; top four brands to account for 71% of sales by FY15
Source: Company, MOSL
31 October 2012
14

Radico Khaitan
Financials: Premiumization led 23% EPS CAGR
Expect 10.3% volume CAGR, 250bp margin expansion over FY12-15
Volumes to post 10.3% CAGR, driven by 20% CAGR in premium brands
Operating margins to expand 250bp over FY12-15, leading to EPS CAGR of 23%
Leverage has improved significantly since FY09; material change unlikely
Expect sales CAGR of 14.5% over FY12-15
We expect RDCK's sales to grow at a CAGR of 14.5% over FY12-15, driven by:
Robust 22% volume CAGR in premium brands. We expect the premium segment
to grow ahead of the market, as consumers trade up, driven by favorable
macroeconomic factors.
16% sales CAGR in IMFL, 8% CAGR in country liquor and 13% CAGR in bulk spirits.
Sales and EBITDA growth trends
Source: Company, MOSL
Gross margin to expand by 170bp, EBITDA margin by 250bp over FY12-15
RDCK reported gross margin of 49.8% and EBITDA margin of 15.1% for FY12, a decline
of 260bp and 70bp, respectively. We believe there is significant scope of margin
expansion in the coming years, led by improving pricing environment in the IMFL
industry, better product mix (led by 22% volume CAGR in premium brands) and benign
input costs. We expect gross margin to expand 170bp over FY12-15. EBITDA margin
should expand 140bp in FY13 followed by 60bp expansion in FY14. Upside risks to our
margin estimates include higher than expected price increases (we build in annual
price increase of 5-6% on weighted average basis for the next two years). Downside
risks include higher than expected increase in input costs (we build in 8% increase
over FY12-15).
31 October 2012
15

Radico Khaitan
Gross and EBIDTA margin
Source: Company, MOSL
Expect input costs to increase 6-8%
Molasses:
Molasses prices increased 19% in FY12 after correcting by 32% in FY11 due
to bumper sugarcane output. Sugar production for sugar year 2012 (SY12; year ended
September 2012) is estimated at 26m tons. The industry expects molasses prices to
remain stable in FY13. Announcement of higher ethanol prices (INR27.5/liter) by the
government would prevent significant softening in prices of molasses. We expect
molasses prices to be INR417/quintal in FY13 and INR450/quintal in FY14.
Grain/ENA:
Grain prices should gradually increase in line with the increase in support
prices by the government. ENA prices are currently ruling at INR33-34/liter.
Packaging/Glass:
The cost of RDCK's packing material/case is directly correlated with
glass prices, which are in turn directly correlated with crude prices. Glass bottle prices
were increased 8% in February 2012 to pass on input cost inflation but HNG has cut
Glass prices by 10% recently w.e.f 15th September. We are building in a modest 5%
increase in packaging cost per case over FY12-15.
Molasses and grain price trends
Trend in packaging cost/case (INR)
Source: Company, MOSL
31 October 2012
16

Radico Khaitan
Molasses and grain price trends
Source: Company, MOSL
New launches, premiumization focus will keep ad spends high (% of sales)
Source: Company, MOSL
Adjusted PAT to grow at a CAGR of 23% over FY12-15
RDCK has posted sales CAGR of 16.2% and adjusted PAT CAGR of 19.6% over FY07-12.
Over FY12-15, we expect the company to post sales CAGR of 14% and EBITDA CAGR of
22%, led by 200bp margin expansion. In FY13, we expect interest cost to increase 50%
owing to higher working capital debt. Given the working capital intensive nature of
the IMFL industry, we do not expect material change in RDCK's working capital position
in the medium term. Assuming effective tax rate of 27% for the next three years, we
estimate 23% CAGR in adjusted PAT over FY12-15.
Adjusted PAT growth and interest as a percentage of sales
Source: Company, MOSL
31 October 2012
17

Radico Khaitan
Significant decline in leverage unlikely
RDCK raised INR3.42b through QIP in March 2010, which was utilized to retire debt. It
redeemed FCCBs in July 2011 by refinancing the entire USD44m through low cost
(3.5%) 7-year ECBs with a two-year moratorium. Repayments will begin in FY14.
Consequently, leverage declined from 3x in FY09 to 0.9x in FY12. Given the nature of
the industry, we do not expect significant decline in leverage hereon.
Higher debtor days from government controlled markets drive high working capital
intentisy for the sector. IMFL players are required to pay duties upfront at the time of
sale while they receive payments after three-four months in case of government
controlled states. Controlling debtors and advances is critical to long term cash flows
and return ratios.
Leverage has come down significantly after FY09 (x)
Net working capital high as government controls 70% of the
market (Nos' of days)
Source: Company, MOSL
Capital return ratios to improve by 300-400bp over the next three years
RDCK's RoCE and RoE are in low double digits. Increase in EBITDA margin in FY13 and
lower interest burden post FY14 should help improve capital ratios by 300-400bp over
the next three years. However, the ratios are unlikely to show material improvement,
given controlled pricing and high proportion of sales to auction contractors and
government-controlled wholesale agencies.
Expect modest improvement in capital ratios led by operating margin expansion
Source: Company, MOSL
31 October 2012
18

Radico Khaitan
Radico NV Distilleries JV: Receives Mega project status
Provides strategic option value to Radico
Radico Khaitan owns 36% in a Joint Venture with NV Distilleries, Radico NV Distilleries.
The distillery is located in the Aurangabad district of Maharashtra for the manufacture
of rectified spirit, ENA, IMFL and related products.
Recently, Government of Maharashtra has conferred the status of "Mega Project" to
the new manufacturing facilities of Radico NV Distilleries.
This project is entitled to receive certain subsidies and duty exemptions for a period
of seven years from the date of commencement of commercial production.
The benefits include:
Subsidy to the extent of 100% of eligible investment with a period of seven year
by way of set off /credit for Tax liability under Maharashtra Value Added Tax Act
2002 and Central Sales Tax Act 1956;
Electricity duty exemption for the period of seven years; and
100% exemption from payment of stamp duty.
The subsidy benefits should start accruing in FY13e. This JV, we believe, offer an
option value for Radico Khaitan in future, which it may monetise.
As per the FY12 balance sheet, Radico has invested INR 480m in the JV; INR 280m
through equity route and balance through preference shares (10% Cumulative non-
convertible preference shares).
It has also given a guarantee of INR 564m for loans taken by Radico NV Distilleries.
Radico NV Distilleries Maharashtra Ltd.
INR Million
% Ownership Interest (%)
Assets
Liabilities
Income
Expenses
Contingent Liabilities
Capital Commitments
FY12
36
1,023
721
715
677
56
0.1
FY11
36
936
713
622
628
8.8
8.8
31 October 2012
19

Radico Khaitan
Valuations attractive, given strong earnings growth ahead
Expect 30% upside; Buy
Valuations are supportive, given the expected 23% earnings CAGR over the next three
years
We value RDCK at P/E of 17x FY14 EPS and arrive at a target price of INR152.
Valuation multiples are in line with historical averages.
Supportive valuations plus 23% earnings CAGR = 30% upside
RDCK is an attractive play on the growing IMFL opportunity, underpinned by favorable
demographic factors like rising disposable income, growing youth population, and
changing social attitudes towards drinking. It has 33 bottling units spread across India,
through which it covers 90% of the retail outlets. Its premiumization strategy is working
and we expect the contribution of premium brands to increase from 15% of total
volumes to 20% by FY15. This would be the key driver for a robust 22% and 23% CAGR
in EBITDA and PAT over FY12-15,respectively, in our view.
The stock has traded at an average EV/EBITDA of 12.8x and P/E of 20.7x since FY10. We
believe there is a case for re-rating on account of:
RDCK's decisive focus on premiumization.
Improved pricing environment in the IMFL industry, boosting operating margins.
Any potential deal involving sector leader can have a positive rub-off effect on
peer valuations, including RDCK's, in our view.
We value RDCK at a P/E of 17x FY14 EPS and initiate coverage with a
Buy
rating and a 12
month forward target price of INR152 - 30% upside. At our target price, RDCK will
trade at 10.6x FY14E EV/EBITDA, modest discount to recent averages.Global liquor
companies trade at average 12-13x EV/EBITDA. Given the superior long-term growth
prospects of Indian liquor companies, we believe Indian players should trade at a
premium to their global counterparts. Any valuation re-rating owing to potential
UNSP-Diageo deal will provide upside to our target price.
Risks to our investment thesis
Lower than expected price hikes will restrict margin expansion. Regulated pricing
for two-third of industry sales is a structural hangover on capital efficiency ratios.
Higher than expected input costs will restrict margin expansion.
Frequent changes in distribution increase debtor days.
Steady increase in excise duties by states adds to working capital cycle.
31 October 2012
20

Radico Khaitan
Radico P/E band chart
P/B band chart
Global Alocholic Beverage Cos
EPS Growth (%)
FY13E
FY14E
32.1
11.8
20.9
18.8
0.3
12.7
18.2
28.7
27.0
36.8
12.1
15.0
48.8
18.0
5.8
11.3
19.8
14.9
P/E (x)
FY13E
FY14E
17.2
15.4
26.0
21.9
16.3
14.5
13.5
10.5
18.8
13.8
20.6
17.9
24.2
20.5
24.9
22.4
16.9
14.7
P/B (x)
FY13E
FY14E
6.3
5.2
1.3
1.2
3.8
3.3
5.7
4.2
7.2
5.1
2.5
2.3
3.9
3.5
6.0
5.2
2.1
2.0
EV/EBITDA (x)
FY13E
FY14E
13.5
12.2
-
-
12.2
11.0
9.0
6.5
12.4
8.8
12.7
11.1
16.6
13.8
15.2
13.8
12.6
11.2
Source: Company, MOSL
Diageo PLC
Heineken NV
Carlsberg A/S
Anheuser-Busch InBev NV
SABMiller PLC
Takara Holdings Inc
Thai Beverage PCL
Luzhou Laojiao Co Ltd
Pernod-Ricard SA
Valuation comparison to FMCG - table
Annual Performance
CMP
Asian Paints
3,884
Britannia
484
Colgate
1,285
Dabur
125
Godrej Consumer 726
GSK Consumer
2,997
Hind. Unilever
550
ITC
284
Marico
205
Nestle
4,673
Pidilite Inds.
193
United Spirits
1,144
Radico Khaitan
117
Reco
FY12
Neutral 103.1
Sell
15.6
Neutral 32.8
Neutral
3.7
Neutral 16.3
Neutral 84.5
Neutral 11.9
Buy
7.9
Buy
5.2
Neutral 105.7
Buy
7.0
Neutral 19.5
Buy
6.0
EPS (INR)
FY13E FY14E
121.5
142.9
18.4
23.7
40.0
46.5
4.4
5.5
21.6
26.3
101.7
113.5
15.5
18.0
9.5
11.3
6.8
8.5
117.1
138.5
8.4
10.1
19.3
35.1
6.9
8.9
FY12
37.7
31.0
39.1
33.4
44.6
35.5
46.2
36.0
39.5
44.2
27.6
58.6
19.4
PE (x)
FY13E
32.0
26.3
32.1
28.7
33.5
29.5
35.5
30.0
30.3
39.9
22.9
59.3
16.9
FY14E
27.2
20.4
27.6
22.8
27.6
26.4
30.5
25.1
24.3
33.8
19.1
32.6
13.1
EV/EBIDTA (x)
RoE (%)
FY12 FY13E FY14E FY12 FY13E FY14E
24.1
20.2
16.6 36.0
34.7
33.8
22.3
17.1
12.3 34.9
35.1
37.9
29.4
23.6
19.9 109.4 114.7 108.7
26.0
21.2
17.1 37.9
34.7
35.8
31.3
23.6
19.3 25.2
23.1
24.3
22.2
19.1
16.7 31.0
31.4
29.8
35.0
27.5
23.6 74.6
72.1
63.4
23.8
19.5
16.0 32.8
33.2
33.4
28.5
21.1
16.8 28.0
21.6
21.8
29.4
24.2
20.0 95.7
73.6
63.5
19.1
14.4
11.6 26.3
24.6
24.8
17.8
15.8
14.2
4.9
4.7
7.9
12.6
10.6
8.8 11.9
12.5
14.4
31 October 2012
21

Radico Khaitan
Annexure
Indian IMFL Industry
520m cases Spirits market
is growing at 8-9% CAGR.
IMFL is growing at 10-11%
CAGR and Country Liquor
is growing at 5-6% CAGR.
Share of IMFL in spirits
has increased from 38%
to 44% in past six years
Source: Company, MOSL
Spirit market CY2005 (%)
Spirits market CY2011 (%)
Source: Company, MOSL
Spirit Market (Value) CY2011
Whisky is the single largest segment and accounts for 69%
of IMFL value sales. Vodka and Gin account for just 5% of
IMFL sales. Vodka is growing at 25% CAGR while Gin is
growing at low single digits.
South and west India accounts for 65% of IMFL sales
South and west India accounts for 65% of IMFL sales;
North India accounts for 25% while East India accounts
for only 10%
Source: Company, MOSL
31 October 2012
22

Radico Khaitan
IMFL Market Share
United Spirits acquired
Herbertsons, Triumph
dist, Carew and Shaw
Wallace increasing its
market share to 54%
Source: Company, MOSL
India has favorable economic and demographic conditions for the growth of IMFL industry
Source: Company, MOSL
Per capita consumption (ltrs)
Indian market offers
huge growth potential
due to young population,
rising income levels and
affordability, greater
social acceptability and
low per capita
consumption. Expect
IMFL volumes to grow at
11-12% CAGR in the
medium term
Source: Company, MOSL
31 October 2012
23

Radico Khaitan
Distribution system
Wholesaler
Government controlled
State through its entity
Auction Market
State auctions
distribution rights to
private parties for
selected areas and time
Private vendors
Free Market
Manufacturers sell
to wholesalers/
retailers
Private parties
obtain license for
nominal fee
8-10%
High
Private wholesalers
directly procure from
manufacturers
Goa, Maharashtra,
Assam
Delhi, West Bengal,
Tripura, Pondicherry
Chandigarh,
Jharkhand
Multiple distribution
systems across states
make India a tough
market to operate. Govt
controlled system
provides low pricing
flexibility while free
market works best for
the industry. Monopoly
distributor and auction
markets impact industry
profitability
Retailers
State operated or
private
Retailer Margin
12-15%
Sellers bargaining Low to average
power
Methodology
Annual tender from
manufacturers
Key States
Karnataka, Kerala,
Uttaranchal
Tamilnadu,
Andhra Pradesh
Orissa, Bihar,
Rajasthan
Uttaranchal
20%+
Very low
Private parties negotiate
with liquor companies
Punjab, Haryana,
Chandigarh
Uttar Pradesh,
Madhya Pradesh
Himachal Pradesh
Liquor industry reforms
have suffered a setback
as north India has moved
back to auction system;
Bihar, Rajasthan,
Jharkhand and
Puducherry have seen
improvements
Key markets with changes in distribution/pricing system
State
Puduchery
Jharkhand
Bihar
Rajasthan
UP
Punjab
Haryana
Madhya Pradesh
Market in 2007
Govt. controlled
Auction
Auction
Auction
Free Market
Free Market
Free Market
Free Market
Market in 2010
Free Market
Free Market
Govt Controlled
Govt Controlled
Auction
Auction
Auction
Auction
Industry Pricing Power
Significantly Improved
Significantly Improved
Improved
Improved
Deteriorated
Deteriorated
Deteriorated
Deteriorated
Source: Company, MOSL
Advertising for liquor is not allowed in India, industry is forced to undertake
surrogate advertising; ban on advertising is a key entry barrier
Liquor industry falls in the state subject by the GOI. Consequently it is subjected to
very strict distribution controls by the state governments. Currently three types of
distribution systems are prevalent in India i.e. Government controlled, Auction market
and free market. Each distribution system has its own characteristics, some of which
have been impeding the growth of the liquor industry in India.
Government Controlled;
Under the Government controlled system, state government
either own its own or through an agency purchases liquor from various entities through
negotiated prices and sells at certain markup to the consumer through its own shops.
This system currently exists in southern India. It indirectly imposes limits on the
availability of the product.
31 October 2012
24

Radico Khaitan
Auction Market;
Under the auction market state government auctions the right to sell
liquor to various parties by auction of a certain fixed fee annually. The winners of
these contracts then negotiate prices with the liquor companies and sell to the
consumers through their own distribution network. This creates distribution
monopolies in small regions, which results in high consumer prices and fat margins
for the retailers.
Free Market;
Open market system is most favorable to the trade and industry. It
improves the availability of the products and ensures fairness to both the consumer
and retailer. Under this system interested parties can open the liquor shops by taking
licenses from the state for a certain fee. Manufacturers sell the liquor directly to the
retailers at negotiated prices. This ensures fair play for the manufacturer as no one
retailer can force it to reduce the prices.
High entry barriers to work in favor of existing players
Strong entry barriers characterize liquor industry. These have resulted in very few
new players having successfully entered and established new brands in the market.
The industry is dominated by few players like United Spirits, Pernod Ricard, Radico
Khaitan, Jagatjit, Mohan Maekin and Seagram.
Media advertising of liquor is banned in India. Manufacturers undertake surrogate
advertising and sponsorships of various sports events to create brand awareness.
Surrogate advertising is generally done for Soda, bottled water and sports
equipment. This makes it difficult for any player to launch a new brand and make
it a success. This has thwarted the attempts of many global majors to make a
strong foot hold in the Indian liquor industry.
Taxes and duties constitute nearly 40-45% of the final consumer price. In addition
to excise taxes, there are high taxes on interstate movement of liquor. There are
more than 100 different types of taxes on liquor in India, which raises the entry
barriers for any new player.
Liquor is subject to 100% import duty and 150% countervailing duty, which raises
the prices of imported liquor to very high levels. This results in very high prices
for imported liquor, thus limiting their consumer reach.
High taxes on interstate movement of liquor results in manufacturers having small
bottling units in various states, thus creating inefficiencies in manufacturing. Thus
operating in India is akin to operating in 30 countries.
Reforms in liquor industry have received a setback
Liquor industry reforms have received a setback in the past few years. This is on
account of 1) steady increase in excise duty by various states 2) shift from free market
to auction system of distribution in entire north India. Although we note that some of
the states have moved from auction system and Govt controlled one, broad pace of
reforms have been back and forth. Switchover to auction system is a big negative in
North India as it entails higher credit period to wholesale trade. Higher credit period
coupled with increase in excise results in increase in credit period and working capital
requirements. Debtor's days for Radico have increased from 23 to 41 in past five
years; consequently net working capital has increased from 63 days of sales to 92 days
of sales. Steady increase in working capital is a drag as it impacts the cash flows.
31 October 2012
25

Radico Khaitan
Recent changes in distribution of Alcoholic Beverages
State
Puduchery
Jharkhand
Bihar
Rajasthan
UP
Punjab
Haryana
Madhya Pradesh
Market in 2007
Govt. controlled
Auction
Auction
Auction
Free Market
Free Market
Free Market
Free Market
Market in 2010
Free Market
Free Market
Govt Controlled
Govt Controlled
Auction
Auction
Auction
Auction
Industry Pricing Power
Significantly Improved
Significantly Improved
Improved
Improved
Deteriorated
Deteriorated
Deteriorated
Deteriorated
Source: Company, MOSL
31 October 2012
26

Radico Khaitan
Financials and Valuation
Income Statement
Y/E March
Net Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Financial Other Income
PBT
Change (%)
Margin (%)
Tax
Tax Rate (%)
PAT
Change (%)
Margin (%)
Extraordinary Income
Reported PAT
2011
9,469
12.9
7,975
1,494
9.3
15.8
271
293
47
977
94.7
10.3
257
26.3
720
72.4
7.6
8
728
2012
11,445
20.9
9,714
1,731
15.9
15.1
328
375
1
1,028
5.3
9.0
229
22.3
799
11.0
7.0
-163
637
2013E
12,986
13.5
10,842
2,143
23.8
16.5
376
515
2
1,255
22.0
9.7
339
27.0
916
14.6
7.1
0
916
2014E
14,977
15.3
12,409
2,568
19.8
17.1
423
526
3
1,621
29.2
10.8
438
27.0
1,183
29.2
7.9
0
1,183
(INR Million)
2015E
17,191
14.8
14,162
3,029
17.9
17.6
454
537
3
2,041
25.9
11.9
551
27.0
1,490
25.9
8.7
0
1,490
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Deferred Tax
Capital Employed
Gross Block
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Miscelleneous Exp./Others
Application of Funds
E: MOSL Estimates
2011
265
6,249
6,514
4,935
498
11,947
5,728
1,539
4,189
219
1,207
8,059
1,269
3,191
94
3,506
1,728
840
295
593
6,332
0
11,947
2012
265
6,687
6,953
6,547
563
14,063
6,870
1,847
5,022
48
1,113
10,139
1,774
3,478
218
4,669
2,528
1,187
1,148
193
7,611
268
14,063
2013E
265
7,476
7,742
7,568
689
15,999
7,670
2,223
5,446
300
1,134
11,620
1,920
4,216
283
5,201
2,770
1,212
1,320
238
8,850
268
15,999
2014E
265
8,452
8,717
7,518
851
17,086
8,470
2,647
5,823
200
1,134
12,917
2,218
4,634
282
5,783
3,256
1,443
1,518
295
9,661
268
17,086
(INR Million)
2015E
265
9,680
9,946
7,158
1,055
18,159
9,270
3,101
6,169
200
984
14,312
2,370
5,329
251
6,361
3,774
1,669
1,746
359
10,538
268
18,159
31 October 2012
27

Radico Khaitan
Financials and Valuation
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
2011
5.4
7.5
49.1
1.0
15.0
2012
6.0
8.5
52.4
1.3
15.4
2013E
6.9
9.7
58.3
1.7
17.6
2014E
8.9
12.1
65.7
0.0
17.6
2015E
11.2
14.6
74.9
0.0
17.6
19.4
13.7
1.9
12.6
2.2
1.1
16.9
12.0
1.8
10.6
2.0
1.4
13.1
9.6
1.5
8.8
1.8
0.0
10.4
8.0
1.3
7.4
1.6
0.0
11.6
10.2
11.9
10.0
12.5
11.0
14.4
12.6
16.0
14.2
47
0.8
42
0.8
45
0.8
43
0.9
43
0.9
0.8
0.9
1.0
0.9
0.7
Cash Flow Statement
Y/E March
OP before Tax
Int./Div. Received
Depreciation and Amort.
Interest Paid
Direct Taxes Paid
Incr in WC
CF from Operations
Extraordinary Income
Incr in FA
Other Assets
Pur of Investments
CF from Invest.
Issue of Shares
Interest Paid
Incr in Debt
Dividend Paid
Others Inflows
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2011
930
47
271
293
210
1,256
75
8
-88
13
314
-217
-7
293
474
92
-178
-96
-238
332
94
2012
1,028
1
328
375
163
1,155
413
-163
971
268
-94
-1,040
-70
375
1,612
108
-308
751
124
94
218
2013E
1,253
2
376
515
213
1,174
758
0
1,052
0
20
-1,072
0
515
1,021
123
-4
379
66
218
283
2014E
1,619
3
423
526
276
812
1,483
0
700
0
0
-700
0
526
-50
161
-47
-784
-1
283
282
(INR Million)
2015E
2,038
3
454
537
347
908
1,777
0
800
0
-150
-650
0
537
-360
208
-54
-1,159
-31
282
251
31 October 2012
28

Radico Khaitan
N O T E S
31 October 2012
29

Disclosures
This report is for personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement
to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt
or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.
The information contained herein is based on publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, MOSt and/or its
affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or
employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . MOSt or any of its affiliates
or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness
for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision
based on this report or for any necessary explanation of its contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest
Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement
1. Analyst ownership of the stock
2. Group/Directors ownership of the stock
3. Broking relationship with company covered
4. Investment Banking relationship with company covered
Radico Khaitan
No
No
No
No
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or
will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible
for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For U.K.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to
which this document relates is only available to investment professionals and will be engaged in only with such persons.
For U.S.
MOSt is not a registered broker-dealer in the United States (U.S.) and, therefore, is not subject to U.S. rules. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange
Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S.,
Motilal Oswal has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo"). Any business interaction pursuant to this report will have to be executed
within the provisions of this Chaperoning agreement.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, Marco
Polo and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com