ABG Shipyard (ABGSHI) - ICICI Direct

Result Update
Rating matrix
Rating : Hold
Target : | 349
Target Period : 12 months
Potential Upside : -5%
WHAT’S CHANGED…
February 18, 2013
ABG Shipyard (ABGSHI)
| 369
Key Financials
(| cr) FY12 FY13E FY14E FY15E
Net Sales 2472.5 2251.6 2398.1 2493.1
EBITDA 698.4 634.1 667.5 704.3
Net Profit 185.8 113.2 130.5 135.1
EPS (|) 36.5 22.2 25.6 26.5
Valuation summary
FY12 FY13E FY14E FY15E
PE (x) 10.1 16.6 14.4 13.9
Target PE (x) 9.6 15.7 13.6 13.2
EV to EBITDA (x) 4.1 4.4 4.0 3.6
Price to book (x) 1.2 1.2 1.1 1.1
RoNW (%) 12.7 11.1 11.6 11.1
RoCE (%) 20.9 19.4 20.6 21.8
Stock data
Market Cap. (| cr) 1878
Debt( FY12) (| cr) 3402
Cash (FY12) (| cr) 365
EV (| cr) 4915
52 week H/L (| cr) 463/ 322
Equity capital (| cr) 50.9
Face value (|) 10
DII Holding (%) 2.5
FII Holding (%) 11.5
Price movement
6,500
6,000
5,500
5,000
4,500
4,000
Mar-12
Analyst’s name
May-12
Aug-12
ABG Shipyard (R.H.S)
Bharat Chhoda
bharat.chhoda@icicisecurities.com
Soumojeet Kr Banerjee
soumojeet.banerjee@icicisecurities.com
Nov-12
Nifty (L.H.S)
Feb-13
450
350
250
150
PRICE TARGET…………………………………………….Changed from | 372 to | 349
EPS (FY13E)……………………………………………...Changed from | 29.7 to | 22.2
EPS (FY14E)……………………………………………...Changed from | 34.3 to | 25.6
EPS (FY15E)……………………………………………………….Introduced at | 26.54
RATING…………………………………………………………………….Unchanged
Working capital constraint mars execution…
ABG Shipyard posted another set of disappointing numbers in Q3FY13
with revenues declining 15.4% QoQ and 22.0% YoY. Revenue for the
quarter stood at | 484.6 crore vis-à-vis | 572.5 crore in Q2FY13. EBITDA
also declined 10.8% in Q3FY13 to | 144.8 crore against | 162.4 crore in
Q2FY13. However, the EBITDA margin improved 153 bps to 29.9% on
account of better inventory management and decline in other expenses
component. PAT for Q3FY13 plummeted significantly by 43.2% to | 18.6
crore in contrast to | 32.8 crore in Q2FY13. PAT continued its downward
spiral on account of augmentation of interest cost, which constitutes 73%
of EBITDA in Q3FY13. Going ahead, we expect working capital constraints
to mar execution capability leading to stumpy revenue generation and
pressure on bottomline.
• Interest cost double whammy; improving order book gives respite
The debt/equity r atio is expected to worsen to 2.7x in FY13E from 2.1x in
FY12. Total outstanding long term debt in FY13E is expected in the range
of | 1300-1500 crore whereas short-term debt is expected around | 2800
crore. Working capital management continues to be a concern as there is
a delay in stage payment from customers, leading to further rise in
interest cost. Hence, execution is getting hampered. Interest cost as a
percentage of EBITDA rose to 73% in Q3FY13 from 64% in Q2FY13. On
the order book front, unexecuted order book was at ~| 10000 crore. The
unexecuted order book is ~4.0x FY15E revenues and provides good
revenue visibility for four years. ABG received a repeat order from Indian
Navy to build a cadet training ship in Q3FY13. The order value was | 485
crore taking the gross order book for the defence sector to | 2100 crore.
Over the past year and a half, ABG has been able to secure orders from
elite clients like SCI and Indian Navy has improved the quality of order
book and provided comfort about future revenue visibility.
• Valuation stretched on dwindling revenue, increased interest costs
ABG Shipyard’s working capital constraints together with muted
execution limit the scope to improve multiple. Rolling over the valuation
multiple forward to FY15E, we assign P/BV multiple of 1.0x FY15E and
arrive at a price target of | 349. We maintain our HOLD rating.
Exhibit 1: Financial Performance
(| cr) Q3FY13 Q3FY13E Q3FY12 Q2FY13 YoY Gr. (%) QoQ
Net Sales 484.6 605.6 621.3 572.5 -22.0 -15.4
EBITDA 144.9 167.2 194.5 162.4 -25.5 -10.8
EBITDA Margin (%) 29.9 27.6 31.3 28.4 (142)bps 153 bps
Depreciation 26.9 26.0 25.6 25.4 5.0 6.0
Interest 106.1 100.0 108.0 103.2 -1.8 2.8
Reported PAT 18.6 33.8 46.5 32.8 -59.9 -43.2
EPS (|) 3.7 6.6 9.1 6.4 -59.9 -43.2
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research

Exhibit 2: Topline performance trend
Decline in revenue continued for Q3FY13 on account of poor
execution due to working capital constraints. Further, we
expect revenue growth to remain depressed in the range of
3-6% in FY14E and FY15E
3000
2500
2000
2251.6
2398.1
2493.1
| cr
1500
1000
500
0
621.3 572.5 484.6
Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E
Revenue
Source: Company, ICICIdirect.com Research
Exhibit 3: EBITDA performance trend
EBITDA margin for Q3FY13 stood at 29.9% taking the nine
month average margin to 28.1%. EBITDA margin is
expected to stabilise at 28% in FY14E as well as FY15E
| cr
880
800
720
640
560
480
400
320
240
160
80
0
31.3
28.4
704.3
29.9 28.2 667.5 27.8
634.1
28.3
194.5
162.4 144.9
Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E
35
30
25
20
15
10
5
0
%
EBITDA
OPM
Source: Company, ICICIdirect.com Research
Exhibit 4: PAT performance trend
PAT for Q3FY13 declined massively by 43.2% to
18.6 crore. We expect PAT to remain under
pressure due to continuous bloating of interest
cost. NPM is expected to stabilise in the range of
5-5.5% in FY14E & FY15E as interest cost
hangover remains unabated
| cr
160
140
120
100
80
60
40
20
0
130.5 135.1
113.2
46.5
7.5 32.8
5.4
5.7
5.0
18.6 3.8
5.4
Q3FY12 Q2FY13 Q3FY13 FY13E FY14E FY15E
25.0
20.0
15.0
10.0
5.0
0.0
%
PAT
NPM
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 2

Exhibit 5: Interest cost as percentage of EBITDA
Interest cost continues to haunt ABG with interest as a
percentage of EBITDA forming 73% in Q3FY13. We
expect the trend to continue as working capital
management remains a challenging task
250.0
200.0
150.0
100.0
50.0
0.0
73%
194.5
169.68 64%
166.26 162.36
55%
52%
144.85
108.0
43%
103.2
106.1
86.3
73.5
Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13
80%
70%
60%
50%
40%
30%
20%
10%
0%
EBITDA Interest Interest as a % of EBITDA
Source: Company, ICICIdirect.com Research
Exhibit 6: Revenue expected to improve in FY14E & FY15E
Order book visibility over four years provides cushion to
revenue. Though execution of the order book is losing
steam amid strained cash flow conditions, we expect
revenue to show modest growth of 3-6% in FY14E-15E
| cr
2600
2500
2400
2300
2200
2100
2000
1900
2472.5
2493.1
2398.1
2251.6
2136.9
FY11 FY12 FY13E FY14E FY15E
Revenue
Source: Company, ICICIdirect.com Research
Exhibit 7: Operating margin to stabilise, going ahead
The EBITDA margin further improved 153 bps in Q3FY13
to 29.9% on account of inventory management and
lower other expenses. We expect the EBITDA margin to
stabilise around 28% in FY14E-15E
| cr
800
700
600
500
400
300
200
100
0
698.4
704.3
634.1
667.5
28.2
27.8
28.3
518.1
28.2
24.2
FY11 FY12 FY13E FY14E FY15E
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
%
EBITDA EBITDA %
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 3

Exhibit 8: PAT margin expected to decline in FY13E & consolidate at same level in FY14E-15E
250
21.0
| cr
200
150
100
194.0
9.1
185.8
113.2
130.5 135.1
18.0
15.0
12.0
9.0
%
50
7.5
5.0
5.4
5.4
6.0
3.0
0
FY11 FY12 FY13E FY14E FY15E
PAT PAT %
0.0
Source: Company, ICICIdirect.com Research
Exhibit 9: Debt equity ratio expected to remain stretched
| cr
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
4450.8 4739.8
2.6
4188.5
2.7
2.7
3154.5
2.1
1.8
2268.6
FY11 FY12E FY13E FY14E FY15E
Debt Debt-Equity
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: Company, ICICIdirect.com Research
Exhibit 10: Subsidy trend
50.0
40.0
30.0
20.0
10.0
0.0
46.0
40.1
5.2
3.6
29.9
3.3
2.0 19.0
15.8
1.6
1.7
1.4
0.3
10.0
0.0
8.9
2.2
0.3
FY12 FY13E Q1FY12 Q2FY12 Q3FY12 Q4 FY12 Q1FY13 Q2FY13 Q3FY13
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
Subsidy
subsidy as % of revenues
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 4

Exhibit 15: Shipbuilding Index
1000
800
Index
600
400
Globally, the shipbuilding industry is reeling under a dwindling order
book and cancellation of prevailing orders. Further, the industry is under
significant liquidity crunch as major financial institutions reduce their
exposure to the sector. ABG Shipyard with its unexecuted order book of
~| 10000 crore provides revenue visibility for four years. Also ABG
bagged a repeat order to building cadet training ship from Indian Navy in
Q3FY13 reinforcing its ability and patronage from elite clients like Navy
and SCI. These factors provide comfort to the company in terms of
sustainability of future revenue.
200
0
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Source: Company, ICICIdirect.com Research
Jul-12
Jan-13
Global shipbuilding industry woes continue, with waning
order book and drying up of financing options. The index
remained flattish in Q3FY13
ABG Shipyard’s concern pertaining to working capital management
remains unabated coupled with a slowdown in execution due to strained
cash flow. We have rolled over to FY15E valuation and valued the stock at
1.0x FY15E P/BV to arrive at a target price of | 349. We maintain our
HOLD rating on the stock.
Exhibit 11: Valuation parameter
Valuation based Global average Target multiple Target price (|)
Price to book v 1.68 1.0 349
Target price (|) 349
Current market price (|) 369
Upside (%) (5)
Source: ICICIdirect.com Research
Exhibit 12: Valuation
Sales Sales EPS EPS PE EV/EBITDA RoNW RoCE
(| cr) Growth (%) (|) Growth (%) (x) (x) (%) (%)
FY13E 2251.6 -8.9 22.2 -39.1 16.6 4.4 11.1 19.4
FY14E 2398.1 6.5 25.6 15.2 14.4 4.0 11.6 20.6
FY15E 2493.1 4.0 26.5 3.6 13.9 3.6 11.1 21.8
Source: Company, ICICIdirect.com Research
Exhibit 13: Revised estimates
Old
New
(| cr) FY14E FY15E FY14E FY15E
Sales 2854.3 0.0 2398.1 2493.1
EBITDA 835.9 0.0 667.5 704.3
Net Profit 174.8 0.0 130.5 135.1
EPS 34.3 0.0 25.6 26.5
Source: Company, ICICIdirect.com Research
Exhibit 14: Assumptions
FY14E
FY15E
Order book execution rate % 21.50 23.50
Susidy accounted 2.67% 2.68%
Dollar Rupee Exchange rate 54 54
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 5

Financial summary
Profit and loss statement
(| Crore)
(Year-end March) FY12 FY13E FY14E FY15E
Total operating Income 2,472.5 2,251.6 2,398.1 2,493.1
Growth (%) 15.7 -8.9 6.5 4.0
Raw Material Expenses 1,264.6 1,097.3 1,171.7 1,212.9
Employee Expenses 99.1 81.1 86.3 87.3
Mfg & Other expenses 432.7 382.8 407.7 423.8
Incr/Decr in WIP -22.4 0.6 0.6 0.5
Other expenses 0.0 0.0 0.0 0.0
Total Operating Expenditure 1,774.1 1,617.5 1,730.6 1,788.8
EBITDA 698.4 634.1 667.5 704.3
Growth (%) 28.2 28.2 27.8 28.3
Depreciation 109.7 101.1 103.7 117.0
Interest 343.1 404.4 414.7 431.9
Other Income 43.7 50.0 50.0 50.0
PBT 289.3 178.5 199.1 205.4
Others -5.0 -3.5 1.2 1.6
Total Tax 98.6 61.8 69.8 71.9
PAT 185.8 113.2 130.5 135.1
Growth (%) -4.2 -39.1 15.2 3.6
EPS (|) 36.5 22.2 25.6 26.5
Source: Company, ICICIdirect.com Research
Cash flow statement
(| Crore)
(Year-end March) FY12 FY13E FY14E FY15E
Profit after Tax 185.8 113.2 113.2 130.5
Add: Depreciation 109.7 101.1 101.1 103.7
(Inc)/dec in Current Ass -1,270.4 -199.3 -199.3 -333.5
Inc/(dec) in CL and Prov 224.0 -139.7 -139.7 281.6
Others 379.4 3.5 3.5 -1.2
CF from operating activi -371.5 -121.1 -121.1 181.2
(Inc)/dec in Investments 1.4 0.0 0.0 0.0
(Inc)/dec in Fixed Asset -556.4 -101.1 -101.1 -103.7
Others 0.0 0.0 0.0 0.0
CF from investing activi -555.0 -101.1 -101.1 -103.7
Issue/(Buy back) of Equ 0.0 0.0 0.0 0.0
Inc/(dec) in loan funds 871.8 169.3 169.3 -122.8
Dividend paid & dividend -23.6 0.0 0.0 23.8
Inc/(dec) in Sec. premiu 0.0 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0
CF from financing activi 848.2 169.3 169.3 -99.0
Net Cash flow -280.1 -53.0 -53.0 -21.5
Opening Cash 644.7 364.8 364.8 374.5
Closing Cash 364.8 374.5 344.5 424.7
Source: Company, ICICIdirect.com Research
Balance sheet
(| Crore)
(Year-end March) FY12 FY13E FY14E FY15E
Liabilities
Equity Capital 50.9 50.9 50.9 50.9
Reserve and Surplus 1,452.7 1,510.3 1,616.9 1,728.2
Total Shareholders funds 1,503.6 1,561.2 1,667.8 1,779.1
Long term Borrowings 1,365.3 1,534.6 1,411.7 1,287.2
Deferred Tax Liability 466.3 466.3 466.3 466.3
Minority Interest 9.3 12.8 11.7 10.0
Total Liabilities 3,350.4 3,574.9 3,557.5 3,542.6
Assets
Gross Block 1,525.3 1,625.3 1,700.3 1,775.3
Less: Acc Depreciation 445.4 546.5 650.3 767.3
Net Block 1,079.9 1,078.8 1,050.0 1,008.0
Capital WIP 1,424.0 1,324.0 1,249.0 1,174.0
Intangible assets 36.0 36.0 36.0 36.0
Total Fixed Assets 2,539.81 2,438.69 2,334.95 2,217.91
Non Current Investments 6.8 6.8 6.8 6.8
Long term loans and advances 725.1 732.3 796.9 864.7
Current Investments 222.1 222.1 222.1 222.1
Inventory 3,357.5 3,547.0 3,679.3 3,790.9
Debtors 72.1 92.5 98.6 102.5
Loans and Advances 1,296.7 1,233.8 1,314.0 1,366.1
Other Current Assets 522.4 574.6 689.5 827.4
Cash 364.8 374.5 344.5 424.7
Total Current Assets 5,835.53 6,044.59 6,348.03 6,733.71
Short term borrowings 2,036.70 2,851.38 3,136.52 3,450.17
Creditors 1,071.7 925.3 919.8 956.3
other curr liab & Provisions 2,678.9 1,870.8 1,872.8 1,874.1
Total Current Liabilities 5,787.22 5,647.52 5,929.17 6,280.56
Net Current Assets 48.31 397.07 418.86 453.14
Others non current assets 30.4 0.0 0.0 0.0
Application of Funds 3,350.4 3,574.9 3,557.5 3,542.6
Key ratios
(Year-end March) FY12 FY13E FY14E FY15E
Per share data (|)
EPS 36.5 22.2 22.2 25.6
Cash EPS 59.0 53.8 53.8 58.4
BV 295.3 306.6 306.6 327.5
DPS 0.0 4.0 4.0 4.0
Cash Per Share 71.6 73.6 73.6 67.7
Operating Ratios (%)
PBT / Total Operating in 11.7 7.9 7.9 8.3
Inventory days 495.7 575.0 575.0 560.0
Debtor days 10.6 15.0 15.0 15.0
Creditor days 158.2 150.0 150.0 140.0
Return Ratios (%)
RoE 12.7 11.1 11.1 11.6
RoCE 20.9 19.4 19.4 20.6
RoIC 7.4 4.2 4.2 4.8
Valuation Ratios (x)
P/E 10.1 16.6 16.6 14.4
EV / EBITDA 4.1 4.4 4.4 4.0
EV / Net Sales 1.2 1.3 1.3 1.2
Market Cap / Sales 0.8 0.8 0.8 0.8
Price to Book Value 1.2 1.2 1.2 1.1
Solvency Ratios
Debt/EBITDA 2.0 2.4 2.4 2.1
Debt / Equity 2.1 2.7 2.7 2.7
Current Ratio 2.0 2.0 2.0 2.0
Quick Ratio 2.3 2.7 2.7 2.9
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 6

Company Description
ABG Shipyard Limited is a private sector ship building company with
facilities to build and repair a variety of marine ships. The company
manufactures bulk carriers, deck barges, interceptor boats and offshore
vessels. The company serves commercial and government customers.
Exhibit 15: Recommendation History
500
450
400
350
300
250
200
150
100
50
0
Mar-12
Apr-12
May-12
Jul-12
Aug-12
Oct-12
Nov-12
Jan-13
Feb-13
Price
Target Price
Source: Company, ICICIdirect.com Research
Exhibit 16: Recent Releases
Date Event CMP Target Price Rating
6-Jan-12 Q3FY12 Result preview 392 373 HOLD
21-Feb-12 Q3FY12 Result Update 434 427 HOLD
7-Jun-12 Q4FY12 Result update 377 432 BUY
21-Aug-12 Q1FY13 Result Update 360 375 HOLD
12-Nov-12 Q2FY13 Result Update 393 372 HOLD
8-Jan-13 Q3FY13 Result Preview 410 372
Source: Company, ICICIdirect.com Research
HOLD
ICICI Securities Ltd | Retail Equity Research Page 7

ICICIdirect.com coverage universe (Shipping)
EPS (|) P/E (x) EV/EBITDA (x)
RoCE (%) RoE (%)
CMP (|) TP (|) Rating Mcap (| Cr) FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E FY12E FY13E FY14E
Aban Offshore 316 386 BUY 1,392.0 40.2 60.4 65.5 8.9 5.9 5.4 6.0 5.7 5.3 10.4 10.5 11.0 5.5 8.1 8.5
ABG Shipyard 369 349 HOLD 2,005.5 22.2 25.6 26.5 16.6 14.4 13.9 4.4 4.0 3.6 19.4 20.6 21.8 11.1 11.6 11.1
G.E Shipping 256 280 HOLD 3,739.2 35.1 38.6 44.6 7.1 6.4 5.6 4.8 3.5 2.3 4.6 5.5 5.9 8.0 8.2 8.8
Global Offshore 62 85 BUY 142.8 21.8 19.8 21.1 2.8 3.1 2.9 4.6 5.8 5.6 9.0 8.7 8.3 17.1 13.5 12.6
Mercator Ltd 20 20 HOLD 441.0 0.8 1.9 3.6 23.5 10.1 5.4 5.0 4.3 3.8 3.5 4.7 5.6 0.8 1.9 3.5
Pipavav Defence 85 89 HOLD 5,944.3 0.3 0.6 1.5 260.8 150.3 54.3 19.1 15.8 13.6 8.5 9.0 10.0 1.1 1.8 4.7
SCI 48 48 HOLD 2,496.7 -9.2 -0.6 -6.3 - - - 282.4 26.2 30.2 -4.7 -3.4 -3.5 -6.4 -0.4 -4.5
Source: Company, ICICIdirect.com Research
Global Valuation (Shipping)
P/BV (x) P/E (x) EV/EBITDA (x) ROE (%)
Company
Country CY11 CY12E CY13E CY11 CY12E CY13E CY11 CY12E CY13E CY11 CY12E CY13E
Shipbuilding
Daewoo Shipbuilding* South Korea 1.1 1.1 1.0 14.5 11.8 9.1 11.5 10.6 8.9 8.0 9.3 11.0
Hyundai Heavy Industries* South Korea 0.9 0.8 0.8 9.5 8.3 7.4 8.1 7.3 6.6 9.1 10.0 11.0
Keppel Corp. Ltd* Singapore 2.3 2.1 2.0 10.4 13.0 12.7 10.2 12.2 11.7 23.4 16.8 16.2
Samsung Heavy Industries* South Korea 1.6 1.4 1.2 10.0 9.9 9.0 6.4 6.4 6.0 20.6 16.3 15.5
Sembcorp Marine* Singapore 3.6 3.9 3.5 12.8 16.1 14.1 10.0 11.4 9.6 17.0 14.9 14.4
ABG Shipyard# India 1.2 1.2 1.1 16.6 16.6 14.4 4.4 4.4 4.0 11.1 11.1 11.6
Pipavav Defence & Offshore Engineering Co# India 2.9 2.7 2.5 260.8 150.3 54.3 19.1 15.8 13.6 1.1 1.8 4.7
Pipavav Shipyard# India 3.2 3.1 2.9 - - 41.7 - 80.3 20.6 - - 6.9
# With regards to Indian companies three year data represents FY12, FY13 and FY14 (financial year ending in March)
ICICI Securities Ltd | Retail Equity Research Page 8

RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1 st Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
ANALYST CERTIFICATION
We /I, Bharat Chhoda MBA, Soumojeet Kr Banerjee, MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific
recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading
underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of
companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities
generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts
cover.
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