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BOSCHLTD NIFTY

One year Price Chart

Readying itself for next leg of growth

Bosch Ltd, promoted by Robert Bosch GmbH, is India’s leading auto

ancillary company. It is a dominant player in the diesel engine segment

with ~70% market share. In FY15, Bosch derived 88% & 12% of its

turnover from auto & non-auto segment respectively.

Investment Rationale

Pricing power to remain intact on the back of leadership position &

technological excellence: Bosch has a dominant ~70% market share in India for

diesel fuel injection products. It is the leading provider of groundbreaking

automotive technologies and services. Being a dominant player in fuel injection

(FI) segment, FI products contribute ~70% to the company’s revenue. Bosch

Group (parent) spends ~10% of its turnover every year on R&D. Further, Bosch

Group provides most of its technologies at a low royalty rate (1.6% of its

turnover) to the Indian arm (Bosch Ltd). Thus, Bosch Ltd, stands to benefit from

the technology leadership profile of its parent as implementation of new and

advanced technologies pick up ground in India. Hence, pricing power would be

maintained given its leadership in technology.

Early implementation of stricter emission norms to drive growth

ahead: In order to tackle air pollution, the government has announced to

upgrade to stricter fuel standards (BS VI) from 2020 (skipping BS V altogether).

BS VI was originally proposed to come in by 2024. Further, BS IV emission norms

would be applicable across India from April 2017. Therefore, Bosch emerges as

one of the main beneficiaries as it is a key supplier for fuel injection system for

vehicles. As per industry estimates, implementation of BS IV on pan-India basis

offers ~Rs 5,000 crores opportunity annually. Hence, we expect FI segment to

grow at a CAGR of 18.3% over FY15-FY18E. The commitment of government to

combat pollution would lead to content increase with common-rail in BS IV

(2017) and selective catalytic reduction (SCR) in BS VI (2020). Moreover, major

competitors such as Delphi and Denso do not have presence in India with SCR, a

key technology for BS VI. Going forward, this would boost realisations for Bosch.

Non-Auto business aids in providing revenue diversification: During

CY11-FY15, the non-auto business grew at a CAGR of 13.3%. While non-auto

business of Bosch Ltd contributes ~12% to the overall revenues, global non-auto

business’ contribution is ~32%. This business has a robust growth potential and

is expected to benefit from the pick up in the economic activity. We expect this

business to grow at a CAGR of 15.2% over FY15-FY18E.

Valuation: Bosch is in a sweet spot given its leadership position, technology

focus and unique positioning in the Indian auto industry. We expect revenue and

PAT to grow at a CAGR of 4.5% and 11.6% over FY15-FY18E. Further, we rate the

stock as ‘BUY’ assigning a forward P/E of 36.5x (given acceleration in growth

trajectory due to advanced emission norms) arriving at a target price of Rs.

22,083 which implies potential upside of ~10% for next 12 months.

Rating BUY CMP (Rs.) 20,082

Target (Rs.) 22,083

Potential Upside (%) 10

Duration Long Term

Face Value (Rs.) 10.0

52 week H/L (Rs.) 26,797/15,736

Adj. all time High (Rs.)

27,990

Decline from 52WH (%)

25.1

Rise from 52WL (%) 27.6

Beta 0.6

Mkt. Cap (Rs.Cr) 63,057

Market Data

Y/E FY15 (15 months)

FY16E FY17E FY18E

Revenue (Rs.Cr)

12,086 10,705 11,720 13,800

Adj. Profit (Rs.Cr)

1,366 1,188 1,505 1,900

EPS (Rs.) 434.9 378.4 479.2 605.0

P/E (x) 58.4 53.1 41.9 33.2

P/BV (x) 10.9 7.6 6.7 5.8

ROE (%) 20.0 15.2 17.0 18.7

Fiscal Year Ended

Apr 4th, 2016

BSE Code: 500530 NSE Code: BOSCHLTD Reuters Code: BOSH.NS Bloomberg Code: BOS:IN

Volume No. I Issue No. 65 Bosch Ltd

For private circulation only

Shareholding Pattern

Dec-15 Sep-15 Chg.

Promoters (%) 71.2 71.2 0.0

FII (%) 7.7 8.4 (0.7)

DII (%) 11.5 11.0 0.5

Others (%) 9.6 9.5 0.1

Bosch Ltd: Dominant player in the fuel injection segment

Bosch, promoted by Robert Bosch GmbH (holds 71.18% stake), is India’s leading auto ancillary

company. It is a dominant player in the diesel engine segment with ~70% market share. The

company has a broad-based product portfolio of diesel and gasoline fuel injection systems,

automotive aftermarket products, starter motors & generators, special purpose machines,

packaging machines, electric power tools, security systems etc. The automotive segment

contributes 88% to the overall revenues. The company also has one of the largest distribution

network of spare parts in the country, with aftermarket business accounting for ~20% of

revenues. Its key manufacturing facilities are located at Bengaluru, Nashik, Naganathapura,

Jaipur, Gangaikondan, Goa and Bidadi.

Segment-wise Revenue Mix

Business divisions of Bosch Ltd

Bosch’ Product Portfolio

Source: Company, In-house research

Source: Company, In-house research; *: Assuming shareholders nod for the sale of SG division

Automotives Products, 88%

Non-Auto, 12%

Bosch Ltd is a dominant

player in the diesel engine

segment with ~70% market

share.

For private circulation only

The Board has approved the

sale of its starter motor

&generators (SG) division to a

100% subsidiary of its parent

for Rs 486 crores. SG

constitutes ~10 % of Bosch Ltd

turnover and around 1% of

Bosch Ltd EBIT.

Diesel Systems Gasoline Systems Packaging Technology Power Tools

Automotive Starter Motors * Energy & Building Solns. Security Technology

Aftermarket & Generators & Thermo-technology

Business

Line

Segments

Products

Target Segment

Automotive

Gasoline Direct gasoline injection PV

Gasoline port injection

Diesel Common rail systems CV, PV, Tractors

Electric drives

Actuators All

Pumps & Valves

Electronics Electronic control units All

Mechatronic modules

Non-Automotive

Power tools

Surveying equipment, Range Finders Construction, Wood &

Metal working Impact wrenches, Drill Machines

Industrial equipment

Metal cutting machines

Industrial Assembly equipment

Packaging solutions

Form, fill & seal machines Pharmaceuticals, Food

Flow wrap machines

Security systems IP-based CCTV surveillance & Access Control

Systems

Hotels, Metro Rail,

Stadium

Fire Alarm & Intrusion systems

Cyclical recovery in CVs and PVs to drive strong growth

During FY11-15, automotive volumes (excluding 2Ws) grew at a CAGR of ~2%. Of late, there

has been a visible traction in the CV space (YTD FY16 growth was 9% YoY) aided by growing

demand from the infrastructure sector and the opening up of the mining sector. Going

forward, with meaningful recovery in overall capex cycle, CV segment in India is expected to

grow at a CAGR of ~14-17% over the next two years. With, CVs contributing about 50% to the

company’s revenues, demand recovery in the CV space coupled with BS-IV compliance on

pan-India basis by April 2017 bodes well for the company. Similarly, PV segment is expected to

grow at a CAGR of 11-13% over the next two years on the back of new product launches (PV

contributes nearly 15% to the overall revenues). While pressure on the tractor segment is

likely to continue in the near term, it may improve, going forward. After two consecutive

years of poor monsoon, it is predicted that India will receive normal rainfall this year. Besides,

government has recently taken several initiatives (crop insurance, enhanced allocation for

NREGA in Union Budget) to revive rural growth.

Engine parts constitute ~31%

of the total auto ancillary

demand.

For private circulation only

For private circulation only

Bosch caters to ~40% of Indian auto ancillary industry Bosch’s revenue growth is in sync with auto industry volumes

Source: ACMA, In-house research

Engine Parts, 31%

Drive Transmission

& Steering Parts, 19%

Body & Chassis,

12%

Suspension & Braking Parts,

12%

Equipments, 10%

Electrical Parts, 9%

Others, 7%

28.2

9.1-1.0 -5.8

5.0

39.613.9

6.0 1.010.0

-50.0

0.0

50.0

FY11 FY12 FY13 FY14 FY15

(%)

Automotive Industry Volume Growth (%)

Bosch Net Sales Growth (%)

Early implementation of stricter emission norms to drive growth ahead

In order to tackle air pollution, the government has announced to upgrade to stricter fuel

standards (BS VI). India will be the first country worldwide to skip one level of emission

legislation (BS V). Implementation of the BS V standard was earlier scheduled for 2019. BS VI,

originally proposed to come in by 2024 has been now advanced to 2020, instead. Further, BS

IV emission norms would be applicable across India from April 2017. Already, BS-IV is

applicable in almost all major cities including Delhi-NCR, Mumbai, Chennai, Kolkata and

Hyderabad.

Bosch emerges as one of the main beneficiaries as it is a key supplier for fuel injection system

for vehicles. Thus, implying incremental revenue opportunity for Bosch Ltd & we expect FI

segment to grow at a CAGR of 18.3% over FY15-FY18E. While almost all PVs sold in India are

already BS IV compliant, majority of the CVs are still running on BS III standard. Hence, the

incremental changes required in CV segment would give an impetus to company’s powertrain

business. As per industry estimates, implementation of BS IV on pan-India basis offers ~Rs

5,000 crores opportunity annually.

Nationwide rollout of BS Emission Norms in India: Timeline

Emission Norm Deadline

Bharat Stage I 2000

Bharat Stage II 2005

Bharat Stage III 2010

Bharat Stage IV 2017

Bharat Stage V Skipped

Bharat Stage VI 2020

Source: Ministry of Road Transport and Highways

The government has decided

to implement stricter emission

norms of Bharat Stage (BS) VI

from April 1, 2020, by skipping

BS V altogether.

Source: Company, In-house research

BS IV

Implementation BS III

Implementation

BS II

Implementation

Historically, it has been seen that whenever advanced emission norms are implemented

nation-wide, revenues rose sharply in that particular year. Generally, with each change in the

stage of an emission norm, there is an increase in content, leading to Bosch outperforming

the industry growth. In CY10, when BS III standard was implemented, Bosch’s revenues grew

~40% aided by a sharp recovery post the global financial crisis. Similarly, revenues grew ~25%

in CY05 when BS III standard was implemented.

Going forward, the government is planning to skip BS V standard by migrating directly to BS

VI from BS IV. This move would lead to content increase with common-rail in BS IV (2017)

and selective catalytic reduction (SCR) in BS VI (2020). The major competitors such as Delphi

and Denso do not have presence in India with SCR, a key technology for BS VI. Further, Bosch

sees opportunities in the Indian two-wheeler market as this segment is expected to be

covered under BS VI norms. Currently 2Ws in India are carburetor based & they too will be

required to shift to fuel injection systems.

Implementation of advanced emission norms augur well for Bosch’s sales growth

Source: Company, In-house research

Pricing power to remain intact on the back of leadership position & technological

excellence

Bosch has a dominant ~70% market share in India for diesel fuel injection products. It has

been the leading provider of groundbreaking automotive technologies and services for over

nine decades in India. Being a dominant player in fuel injection (FI) segment, FI products

contribute ~70% to the company’s revenue.

Bosch Ltd enjoys the benefits of its global parent’s strong technology dominance and,

thereby, has a higher new product acceptance rate among OEMs. Over years, Bosch Ltd has

imported newer technologies in the wake of emission changes, which have helped it to cater

to the Indian market. Bosch Ltd has generally followed the policy of importing the technology

and then gradually localising it as its acceptance increases in the market.

The Bosch Group enjoys a strong technological leadership in fuel injection systems and is a

trusted ancillary partner for most global auto manufactures. This is on account of the huge

R&D spend that is carried out by Bosch Global. In 2014, the Bosch Group spent ~5 billion

euros (around 10% of sales revenue) and filed 4,593 patents worldwide. Interestingly, Bosch

Group (parent) offers most of its technologies at a low royalty rate (~1.6% of its turnover) to

Bosch Ltd.

The major competitors of Bosch Global are Delphi & Denso Corp. Both these competitors

supply products in segments ranging from fuel injection systems to exhaust systems.

However, Bosch Global remains the leader in the space. More importantly, in India, both the

competitors have limited penetration.

EBITDA margins have remained steady above 15% for all years (except CY13) in the last 5

years. Given its leadership in technology, it is expected that pricing power would be

maintained going forward.

22% 23%28% 27%

13% 6% 5%

40%

20%6% 1% 10% 11% 9%

18%

CY0

3

CY0

4

CY0

5

CY0

6

CY0

7

CY0

8

CY0

9

CY1

0

CY1

1

CY1

2

CY1

3

FY1

5 (

Ad

j)

FY1

6E

FY1

7E

FY1

8E

For private circulation only

Bosch Group offers most of its

technologies at a low royalty

rate (~1.6% of its turnover) to

the Indian arm.

Bosch derives about 20% of

revenues from the automotive

aftermarket division

While non-auto business of

Bosch Ltd contributes ~12% to

the overall revenues, global non-

auto business’ contribution is

~32%.

Non-Auto business aids in providing revenue diversification

The revenue contribution of non-auto business to Bosch’s topline has risen from 10% in

CY11 to 12% in FY15. The non-auto business comprises of three verticals: Industrial

Technology, Consumer Goods (Power Tools & Household appliances) and Energy & Building

Technology. While non-auto business of Bosch Ltd contributes ~12% to the overall revenues,

global non-auto business’ contribution is ~32%. This business has a strong growth potential

and is expected to benefit from the pick up in the economic activity. We expect this business

to grow at a CAGR of 15.2% over FY15-FY18E.

Structure of Bosch’s non-auto business

Non-Auto’s contribution to the total revenues on the rise

Source: Company, In-house research; Note: FY15 is a 15 month period due to change in accounting year

Traction in Automotive aftermarket business augurs well

Bosch derives about 20% of revenues from the automotive aftermarket division. This

division is responsible for the supply, sales & distribution of all Bosch-branded automotive

parts in India and the SAARC region. The product range offered is the largest under one

brand in India and finds extensive application in 2Ws, 3Ws, cars, MUVs, LCVs, HCVs, buses,

tractors etc. The Bosch automotive aftermarket distribution network is the largest in India,

with over 1,000 authorized distributors, over 3,000 authorized workshops and direct

distribution reach beyond 60,000 semi-wholesale and retail points with presence in all the

key markets.

The products marketed by this division include diesel and gasoline fuel injection system &

components, alternators, starter motors, spark plugs, automotive filters, automotive

batteries, automotive belts, automotive software,2& 3 wheeler clutch plates etc.

Besides, it is responsible for Bosch service workshop concepts for vehicle service and

maintenance. It manages the largest independent service network in India with over 3,000

workshops/ service network comprising over 500 Bosch Car Service, 1,000 Bosch Diesel

Service Centers, 600 Electric Modules, 250 Express Car Service and 150 Express Bike Service

in India, covering ~1,200 cities. Hence, we expect this division to grow at a CAGR of 18% over

FY15-FY18E led by new products introduction, increased use of electronics coupled with

increased preference for authorised services.

11%12% 12% 12%

13% 13%

5%

8%

11%

14%

CY12 CY13 FY15 FY16E FY17E FY18E

For private circulation only

Non-Auto

Consumer

Goods

(Power Tools

Industrial

Technology

Energy &

Building

Technology

Industrial

Equipment

Packaging

Technology Security

Technology

Bosch

Energy &

Building

Solutions

Thermotech

nology

We expect top-line of the company to grow at a CAGR of 4.5% over FY15-FY18E.

Automotive Aftermarket revenues to grow at a CAGR of 18% during FY15-FY18E

Source: Company, In-house research; Note: FY15 is a 15 month period due to change in accounting year

Overall EBITDA margins to expand significantly, going forward

Engine parts are impacted the most by emission norm changes. We believe there is significant

scope of margin expansion in the coming years led by the implementation of advanced

emission norms (BS IV in 2017 & BS VI in 2020) across the country. The stricter norms would

lead to content increase with common-rail in BS IV (2017) and SCR in BS VI (2020). Given

limited competition in this space, we expect realisations to increase for Bosch. Further, the

sale of starter motor & generator division would provide fillip to the overall margins (this

division constitutes ~10% of Bosch Ltd turnover and merely 1% of Bosch Ltd EBIT). Thus, we

believe Bosch’s EBITDA margin to grow to 19.5% in FY18E from 16.4% in FY15.

Revenue and PAT to grow at a CAGR of 4.5% and 11.6% respectively over FY15-18E

During FY15-FY18E, we expect the top-line of the company to grow at a CAGR of 4.5% on the

back of regulation requirements (BS IV in 2017 & BS VI in 2020) which will lead to greater-

than-normal content increase. Further, we estimate 11.6% CAGR in Adjusted PAT over FY15-

18E mainly on account of EBITDA margin expansion. Moreover, we believe that the company

would report improvement in its ROE and ROCE on the back of healthy profitability coupled

with strong revenue growth. While ROE is likely to improve from 15.2% in FY16E to 18.7% in

FY18E, ROCE is projected to increase from 22.6% in FY16E to 27.1% in FY18E.

Revenue to grow at a CAGR of 4.5% over FY15-FY18E Return Ratios expected to improve

Source: Company, In-house research; *: FY15 is a 15 month period due to change in accounting year

16.4% 16.5%18.5% 19.5%

11.3% 11.1%12.8% 13.8%

0%

5%

10%

15%

20%

25%

- 2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000

FY15* FY16E FY17E FY18E

Rs.

Cro

res

Revenue EBITDA Margin (%) Adj. PAT Margin (%)

20.0%

15.2%17.0%

18.7%

28.9%

22.6%24.6%

27.1%

0%

5%

10%

15%

20%

25%

30%

35%

FY15* FY16E FY17E FY18E

ROE (%) ROCE (%)

For private circulation only

Key Risks:

1 Slowdown in CV space may affect the revenue growth.

2 Any delay in implementation of advanced emission norms.

3 Upward revision in royalty rates may impact margins.

1,917 1,965 2,024 2,327 2,746 3,323

500

1,500

2,500

3,500

CY12 CY13 FY15 FY16E FY17E FY18E

(Rs.

Cro

res)

Balance Sheet

Profit & Loss Account (Consolidated)

Y/E (Rs.Cr) FY15* FY16E FY17E FY18E

Total operating

Income 12,086 10,705 11,720 13,800

Raw Material cost 6,457 5,654 6,179 7,169

Employee Cost 1,663 1,375 1,505 1,772

Other operating

expenses 1,984 1,906 1,870 2,175

EBITDA 1,981 1,770 2,166 2,685

Depreciation 548 399 448 493

EBIT 1,433 1,372 1,719 2,192

Interest cost 14 5 2 2

Other income 565 399 464 563

Profit before tax 1,984 1,765 2,181 2,753

Tax 618 577 676 854

Profit after tax 1,366 1,188 1,505 1,900

Minority Interests - - - -

P/L from Associates - - - -

Adjusted PAT 1,366 1,188 1,505 1,900

E/oincome/ (Expense) (28) - - -

Reported Profit 1,338 1,188 1,505 1,900

Y/E (Rs.Cr) FY15* FY16 FY17E FY18E

Paid up capital 31 31 31 31

Reserves and

Surplus 7,316 8,224 9,390 10,883

Net worth 7,347 8,256 9,421 10,915

Minority Interest - - - -

Total Debt 56 35 15 15

Other non-current

liabilities 479 526 579 637

Total Liabilities 7,881 8,817 10,015 11,567

Total fixed assets

(inc CWIP) 1,244 1,345 1,497 1,605

Goodwill - - - -

Investments 2,890 2,890 2,890 2,890

Net Current

assets 3,112 3,925 4,946 6,364

Other non-current

assets 636 658 682 709

Total Assets 7,881 8,817 10,015 11,567

Cash Flow Statement

Profit & Loss Account

Profit & Loss Account (Consolidated)

Y/E (Rs.Cr) FY15* FY16E FY17E FY18E

Pretax profit 1,956 1,765 2,181 2,753

Depreciation 548 399 448 493

Chg in Working

Capital 132 (224) (130) (257)

Others (551) (394) (462) (561)

Tax paid (691) (577) (676) (854)

Cash flow from

operating activities 1,394 969 1,360 1,574

Capital expenditure (409) (500) (600) (600)

Chg in investments (446) - - -

Other investing

cashflow (325) 399 464 563

Cash flow from

investing activities (1,180) (101) (136) (37)

Equity

raised/(repaid) - - - -

Debt raised/(repaid) (28) (20) (20) -

Dividend paid (202) (280) (339) (406)

Other financing

activities (9) (5) (2) (2)

Cash flow from

financing activities (238) (305) (361) (409)

Net chg in cash (23) 563 863 1,129

* Change in accounting year, FY15 is a 15 month period

Note: Assuming company to receive shareholders approval for the sale of starter motors

& generators division. But, we haven’t included any Profit/Loss from the sale of this

division. Further, assuming the company to carve out this division by the end of June

2016.

Y/E FY15* FY16E FY7E FY18E

Valuation (x)

P/E 58.4 53.1 41.9 33.2

EV/EBITDA 39.4 34.3 27.6 21.8

EV/Net Sales 6.6 5.8 5.2 4.4

P/B 10.9 7.6 6.7 5.8

Per share data (Rs.)

EPS 434.9 378.4 479.2 605.0

DPS 85.0 74.0 89.7 107.5

BVPS

2,339.8

2,629.1

3,000.4

3,476.0

Growth (%)

Net Sales 37.9 (11.3) 9.5 17.8

EBITDA 53.7 (10.7) 22.4 24.0

Net Profit 54.4 (13.0) 26.6 26.3

Operating Ratios (%)

EBITDA Margin 16.4 16.5 18.5 19.5

EBIT Margin 11.9 12.8 14.7 15.9

PAT Margin 11.3 11.1 12.8 13.8

Return Ratios (%)

RoE 20.0 15.2 17.0 18.7

RoCE 28.9 22.6 24.6 27.1

Turnover Ratios (x)

Net Sales/GFA 2.6 2.1 2.0 2.1

Sales/Total Assets 1.2 1.0 0.9 1.0

Sales/Working Capital 10.0 7.8 7.4 7.6

Liquidity&Solvency Ratios (x)

Current Ratio 2.2 2.6 2.8 3.1

Net Debt/Equity (0.3) (0.3) (0.4) (0.4)

For private circulation only

Key Ratios

Rating Criteria

Large Cap. Return Mid/Small Cap. Return

Buy More than equal to 10% Buy More than equal to 15%

Hold Upside or downside is less than 10% Accumulate* Upside between 10% & 15%

Reduce Less than equal to -10% Hold Between 0% & 10%

Reduce/sell Less than 0%.

* To satisfy regulatory requirements, we attribute ‘Accumulate’ as Buy and ‘Reduce’ as Sell.

Disclaimer:

The SEBI registration number is INH200000394.

The analyst for this report certifies that all the views expressed in this report accurately reflect his / her personal views about the subject

company or companies, and its / their securities. No part of his / her compensation was / is / will be, directly / indirectly related to specific

recommendations or views expressed in this report.

This material is for the personal information of the authorized recipient, and no action is solicited on the basis of this. It is not to be

construed as an offer to sell, or the solicitation of an offer to buy any security, in any jurisdiction, where such an offer or solicitation would

be illegal.

We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable, though its accuracy or

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Recipient shall not further distribute the report to a third party for a commercial consideration as this report is being furnished to the recipient solely for the purpose of information. Dion has taken steps to ensure that facts in this report are based on reliable information but cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this report. It is hereby confirmed that wherever Dion has employed a rating system in this report, the rating system has been clearly defined including the time horizon and benchmarks on which the rating is based. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this report is not, and should not be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. Dion has not taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. This report is not to be relied upon in substitution for the exercise of independent judgment. Opinions or estimates expressed are current opinions as of the original publication date appearing on this report and the information, including the opinions and estimates contained herein, are subject to change without notice. Dion is under no duty to update this report from time to time. Dion or its associates including employees engaged in preparation of this report and its directors do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of securities, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. The investments or services contained or referred to in this report may not be suitable for all equally and it is recommended that an independent investment advisor be consulted. In addition, nothing in this report constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to individual circumstances or otherwise constitutes a personal recommendation of Dion. REGULATORY DISCLOSURES:

Dion is engaged in the business of developing software solutions for the global financial services industry across the entire

transaction lifecycle and inter-alia provides research and information services essential for business intelligence to global companies

and financial institutions. Dion is listed on BSE Limited (BSE) and is also registered under the SEBI (Research Analyst) Regulations,

2014 (SEBI Regulations) as a Research Analyst vide Registration No. INH100002771. Dion’s activities were neither suspended nor has

it defaulted with requirements under the Listing Agreement and / or SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 with the BSE in the last five years. Dion has not been debarred from doing business by BSE / SEBI or any other

authority.

In the context of the SEBI Regulations, we affirm that we are a SEBI registered Research Analyst and in the course of our business,

we issue research reports /research analysis etc that are prepared by our Research Analysts. We also affirm and undertake that no

disciplinary action has been taken against us or our Analysts in connection with our business activities.

In compliance with the above mentioned SEBI Regulations, the following additional disclosures are also provided which may be

considered by the reader before making an investment decision:

For private circulation only

1. Disclosures regarding Ownership

Dion confirms that:

(i) Dion/its associates have no financial interest or any other material conflict in relation to the subject company (ies)

covered herein at the time of publication of this report.

(ii) It/its associates have no actual / beneficial ownership of 1% or more securities of the subject company (ies) covered

herein at the end of the month immediately preceding the date of publication of this report.

Further, the Research Analyst confirms that:

(i) He, his associates and his relatives have no financial interest in the subject company (ies) covered herein, and they

have no other material conflict in the subject company at the time of publication of this report.

(ii) he, his associates and his relatives have no actual/beneficial ownership of 1% or more securities of the subject

company (ies) covered herein at the end of the month immediately preceding the date of publication of this report.

2. Disclosures regarding Compensation:

During the past 12 months, Dion or its Associates:

(a) Have not managed or co-managed public offering of securities for the subject company (b) Have not received any compensation

for investment banking or merchant banking or brokerage services from the subject company (c) Have not received any

compensation for products or services other than investment banking or merchant banking or brokerage services from the subject .

(d) Have not received any compensation or other benefits from the subject company or third party in connection with this report

3. Disclosure regarding the Research Analyst’s connection with the subject company:

It is affirmed that I, Rohit Joshi employed as Research Analyst by Dion and engaged in the preparation of this report have not served

as an officer, director or employee of the subject company

4. Disclosure regarding Market Making activity:

Neither Dion /its Research Analysts have engaged in market making activities for the subject company.

Copyright in this report vests exclusively with Dion. Dion Global Solutions Limited, Registered Office: 54, Janpath, New Delhi – 110001, India. CIN: L74899DL1994PLC058032, Website:

www.dionglobal.com. Scrip code with BSE: 526927. SEBI Registration No. INH100002771. Compliance Officer Details: Ms. Rinki Batra,

Tel.: 91-120-4894813, Fax No. 0120-4894854 or E-mail: rinki.batra@dionglobal.com

For private circulation only