Steel margins likely to improve

Transcription

1 India Equity Research May 8, 2018 Sector Update Emkay Your success is our success Refer to important disclosures at the end of this report Steel margins likely to improve Steel margin grew marginally by 2%mom to US$365/tn as fall in coking coal prices (- 9%mom to US$177) was more than offset by 3% mom rise in iron ore price to US$63/tn while Steel (HRC export Sanghai) price remain stable. China HR Sheet rises by 7%mom. Global iron ore miners have decided not to add new capacity considering China is well supplied. Also, BHP has cut its production guidance for iron ore in CY18 by 2%. We believe, excess-supply won t balance out in CY18, hence prices may go down further. In non-ferrous: Aluminium price rises by 14% mom due to USA sanction on Rusal, while Copper remain stable at US$6707/tn. Zinc, Lead, Silver and Gold price falls by 7%mom, 4%mom, 1%mom and 2%mom respectively. Steel prices are likely to remain strong both in domestic as well as in the international markets. Long product prices particularly have seen strength recently and are likely to sustain in the short term. Non- ferrous metals prices are likely to remain volatile. Iron ore prices recovered in last 20 days from US$61/tn to US$65/tn while coking coal prices tapered off to US$180/tn (from US$195/tn at the beginning of the month) during the same time period. Steel prices on the other hand remain firm at US$595/tn. Global iron ore miners have decided to not add new capacity considering the market is currently in over-supply state. Also, BHP has cut down its CY18 iron ore production guidance by 2%. This should help iron ore prices to maintain some strength. China s steel supply is likely to surge in 2HCY18 backed by resumption of production by closed mills, capacity replacement (replacing lost steel production through less polluting EAF) and low domestic demand, thereby creating pressure to offload the excess in export. USA sanction on Rusal lead to rise in Aluminium and Alumina prices. However, the US department of treasury loosened the sanction by extending the deadline of winding-down the contracts from June 5 to Oct 23. Hindalco, Nalco and Vedanta to be prime beneficiary. Zinc prices have moved back to contango from backwardation reflecting relative strength in prices at current levels. Baltic dry index rises by 27%mom, which is primarily due to heavy buying of coking coal by China. We expect domestic steel prices to remain strong in the short- medium term backed by improved demand and stable global prices. Chinese inventory situation will be crucial for global prices. Any resolution wrt Rusal will lead to correction in aluminium and alumina prices. We continue to prefer JSL, JSHL, VED L, Tata Steel and MOIL. Financial Snapshot (Consolidated) (Rs mn) EPS EV/EBITDA P/E FY19E FY20E FY19E FY20E FY19E FY20E Coal India Hindalco Hindustan Zinc Jindal Stainless Jindal Stainless Hisar MOIL JSW Steel SAIL Tata Steel Vedanta Coal India CMP BUY Hindalco CMP BUY Hindustan Zinc CMP HOLD Jindal Stainless CMP BUY Jindal Stainless Hisar CMP BUY MOIL CMP BUY JSW Steel CMP ACCUMULATE SAIL CMP REDUCE Tata Steel CMP BUY This report is solely produced by Emkay Global. The following person(s) are responsible for the production of the recommendation: Goutam Chakraborty goutam.chakraborty@emkayglobal.com Varun Singh varun.singh@emkayglobal.com ED: HEMANT MARADIA SA: DHANANJAY SINHA

2 Exhibit 1: Key Economic Data Particulars Prev. Current Previous Value Current Value India PMI Feb'18 Apr' India WPI Feb'18 Mar'18 2.5% 2.5% India CPI Feb'18 Mar'18 4.4% 4.3% China PMI Mar'18 Apr' China IP Dec'17 Mar'18 6.2% 6.0% China GDP Dec'17 Mar' % 6.80% UK PMI Feb'18 Apr' UK GDP Dec'17 Mar' % 0.10% Euro Zone PMI Mar'18 Apr' US PMI Mar'18 Apr' US IP Feb'18 Mar'18 1.0% 0.5% US GDP Dec'17 Mar' % 2.30% Japan PMI Mar'18 Apr' Japan IP Feb'18 Mar'18 2.0% 1.2% Exhibit 2: Except India, USA and Japan, PMI of all other regions declines India PMI China PMI UK PMI Euro Zone PMI US PMI Japan PMI Previous Value Current Value ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

3 Trend: Ferrous Metals In the month of April 18, we could see iron ore prices recover in last 20 days from US$61/tn to US$65/tn while coking coal prices tapered off to US$180/tn (from US$195/tn at the beginning of the month) during the same time period. Steel prices on the other hand remain firm at US$595/tn. Consequently, steel margin rises marginally by US$9/tn to US$365/tn (+2%mom). No new capacity addition in iron ore since China is well supplied BHP cuts iron ore production guidance for CY18 citing rail car problem Rio to exit coking coal business.q1cy18 production down 53%qoq but maintained CY18 guidance as achievable Better margins lured closed mills to resume production Difficulty in strict policy implementation on capacity swap rule, production resumption; may lead to over-production of steel in China More EAFs on the way in China to replace polluting BF and IF steel China s GDP growth slowing down tighter credit policy is likely weaken growth in real estate and infrastructure sectors During the month of April 18; Iron Ore Giant (Fortescue Metals CEO) says China market is very well supplied consequently global iron ore miners have turned off the tap on adding new production capacity to feed China s steel mills. No new capacity is positive however, given the market is already well supplied, iron ore prices should correct more even from these levels. BHP cuts 2018 iron ore forecast, cites rail car upload problems. The miner cut projections for fiscal 2018 iron ore production by 2 percent to between million tonnes of iron ore from million tonnes due to car dumper reliability issues. On coking coal: last month we updated that Rio Tinto will completely exit the Coking Coal business with the sale of its last Coking Coal assets on the cards. The global mining major is in the advanced stages of selling its Kestrel coal mine in Queensland, Australia to a consortium formed by EMR Capital and PT Adaro Energy TBK. The deal is said to be finalized at US$2.25 billon. During current month: Q1CY18 numbers of Rio has been discouraging with coking coal output down 30%yoy (-53%qoq) to 1.1mt. The fall in production was due to a longwall changeover and maintenance works at its Kestrel mine in the Australian state of Queensland, as well as a lower yield at its Hail Creek mine in Queensland impacted by coal scheduling. However, Rio maintained its full year guidance to 7.5mt-8.5mt. We believe, broadly coking coal prices should remain stable at current level with downward pressure on prices given infrastructural issues have now been sorted at Australian ports. Will China s steel supply surge in 2H2018?? Resumption of production and facilities replacement by Chinese steel firms highly possible risk: China s capacity cut quick recap: steel capacity were cut by c. 115mt in 2016, 115mt in 2017 and closed 150 mt of Induction furnaces that use scrap metal to make steel. Production cut continued till Mar 18 leading to significant increase in Chinese steel prices (Export price rises by 15%yoy in Q1CY18). Hike in steel prices lead to better profit margins which in turn lured some steel mills to resume production. In Feb 18, China issued stricter rules for building new steel production capacity to replace obsolete facilities and this move underscored China s determination to curb growth in its massive steel sector. However, with resumption of production by few mills and China s orders to replace and not shut down obsolete facilities, we believe it is very difficult to prevent closed mills from resuming productions and there is very high chance of tough capacity swap rules not being implemented strictly. China is encouraging companies to build more EAFs to replace polluting BFs and IFs. China is expected to build 16mt of EAF capacity this year with majority of them coming up in 2HCY18. Therefore, EAF capacity addition coupled with production resumption and capacity replacements have increased the probability of surplus steel supply in the latter half of CY18. Slow economic growth and tepid domestic demand may force China s steelmakers to export more: China s economic growth is expected to slow down to 6.5% in 2018 against 6.9% in previous year as the Chinese government ramps up efforts to cut risk in the financial system and close down polluting inefficient factories. Tighter credit is likely to curb real estate investment and infrastructure spending in the second half of 2018 and the government s spending on shantytown redevelopment projects has also fallen from last year resulting which country s domestic demand may plunge in the latter half of However, in medium term we believe, steel prices will sustain and margins will improve on the back of decline in raw material cost pressures and controlled inventory positions. ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

4 May-17 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Exhibit 3: Monthly price movement US$/tonne (US$) as on 1-Apr-18 1-May-18 Change (%) Iron Ore 62% Iron Ore 58% Hard Coking coal (Fob East Coast) (9.1) Steel HRC Export Sanghai (FOB) China HR Sheet Source: Emkay Research, Bloomberg Exhibit 4: Iron Ore 62% price (US$/tn) recovered in last 20 days Exhibit 5: While coking coal prices (US$/tn) rationalized during same period Apr 3-Apr 5-Apr 7-Apr 9-Apr 11-Apr 13-Apr 15-Apr 17-Apr 19-Apr 21-Apr 23-Apr 25-Apr 27-Apr 29-Apr 1-May 3-May 5-May 7-May 1-Apr 3-Apr 5-Apr 7-Apr 9-Apr 11-Apr 13-Apr 15-Apr 17-Apr 19-Apr 21-Apr 23-Apr 25-Apr 27-Apr 29-Apr 1-May 3-May 5-May 7-May Apr May Apr May Exhibit 6: Consequently steel margin remained flat at c. 2% in April 18 19% 3% 3% 35% 19% 8% 6% 14% 6% -5% -9% -2% 5% 12% 2% 2% Exhibit 7: Given steel prices declined by 3% on an average in April 18 0% 0% 4% 11% 12% 7% 2% 0% 2% 3% 1% -39% -2% -4% -2% -2% -3% % Exhibit 8: Steel (CIS Export) price stays firm at US$595/tn Exhibit 9: China HRC rises by 7%mom Source: Emkay Research, Bloomberg Steel CIS Export (US$/tonne) Source: Emkay Research, Bloomberg China HR Sheet (US$/tonne) ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

5 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 Exhibit 10: China s steel exports to India remain flat at 154kt tonnes 420, , , , , , ,000 70,000 20,000 Exhibit 11: Asean steel import prices remain firm at US$ China Exports of Steel To India - Quantity (Metric Tonne) Asean Import HRC (SAE grade) (US$/short ton) Exhibit 12: Iron ore 62% & 58% rises by 3% and 5% mom respectively Exhibit 13: Premium Hard Coking Coal falls by 9% mom Source: Emkay Research, Bloomberg 62% 58% Premium Hard Coking Coal Export (FOB East Coast) (USD/mt) Source: Emkay Research, Bloomberg Exhibit 14: China s iron ore inventory at ports declines by 1%mom Mn Tonnes Exhibit 15: Baltic Dry Index rises by 26%mom China Weekly Iron Ore Inventory Baltic Dry Index ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

6 1-Apr 3-Apr 5-Apr 7-Apr 9-Apr 11-Apr 13-Apr 15-Apr 17-Apr 19-Apr 21-Apr 23-Apr 25-Apr 27-Apr 29-Apr 1-May 3-May 5-May 7-May 2-Apr 4-Apr 6-Apr 8-Apr 10-Apr 12-Apr 14-Apr 16-Apr 18-Apr 20-Apr 22-Apr 24-Apr 26-Apr 28-Apr 30-Apr 2-May 4-May 6-May 8-May Trend: Non-ferrous metals In the Non-ferrous space, Aluminium price rises by 14% mom while Copper remain stable at US$6707/tn. Zinc, Lead, Silver and Gold price falls by 7%mom, 4%mom, 1%mom and 2%mom respectively. USA sanction on Rusal lead to rise in Aluminium and Alumina prices.hindalco, Nalco and Vedanta stand out to be main beneficiary The month of April 18 started with the news of USA s sanction on Rusal (which produces 7% of the world's aluminium). In this regard we note that; this was the fall out of political actions by the US on Russian companies and officials. UC Rusal is one of the largest aluminium and alumina producers. In 2017, the company contributed 7% each to world's aluminium and alumina production. So, if Rusal collapses then not only aluminium, but alumina prices will also rally. Therefore, in Indian s context we highlighted that beneficiary should be Hindalco, Nalco as they both have own alumina. In case of Vedanta, higher aluminium prices will be positive but simultaneous rise in alumina prices will offset that benefit mostly. Then subsequently on April 12th: Glencore, the largest buyer of aluminium from Rusal, declared force majeure over 50,000 tonnes of Russian metal destined for customers, exempting it from fulfilling its contracts. Rusal produced 3.7m tonnes of aluminium in CY17, around 7 per cent of global production. Around 800,000 tonnes of the metal goes to US or US-related customers, according to a person familiar with the company. On 25 th April, sanction panic in the aluminium market has calmed following the US Department of the Treasury s Office of Foreign Assets and Control s (OFAC) slight loosening of sanctions involving Rusal material. The OFAC said that companies now have until October 23, instead of June 5, to wind-down contracts with Rusal. The London Metal Exchange has followed the same guidelines, including the updated stance on cashflow payable to Rusal, permitting the closure of sanction-affected contracts through omnibus accounts as opposed to ring-fenced accounts. Exhibit 16: Aluminium price on daily basis since 1 st April ,000 2,500 2,000 1,500 1, Exhibit 17: Aluminium price rises by 28% during April 18 on USA sanction concerns (1 April price indexed to 100) Apr May Apr May Source: Emkay Research We expect aluminium capacity growth in China to slow down significantly in the coming years. We expect additional capacity of 3.3mtpa in 2018m, 1.3mtpa in 2019 and less than 1mtpa in Zinc has moved back to contango reflecting relative strength in zinc prices at current levels. ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

7 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 Exhibit 18: Fortnightly price movement (US$/tn) Commodity (US$) Average 1-Apr-18 1-May-18 (%) FY18 FY19 (as on date) Copper 6,679 6, ,450 6,825 Aluminium 1,987 2, ,044 2,238 Zinc 3,284 3,043 (7.3) 3,048 3,186 Lead 2,395 2,294 (4.2) 2,373 2,353 Silver (moz) (1.2) Gold (moz) 1,325 1,304 (1.6) Exhibit 19: Zinc LME and inventory US$ 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 '000 tn Exhibit 20: Lead LME and inventory US$ 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 '000 tn Zinc-LME Inventory (R.H.S) Zinc-LME (L.H.S) Lead-LME Inventory (R.H.S) Lead-LME (L.H.S) Exhibit 21: Copper LME and inventory Exhibit 22: Aluminium LME and inventory US$ 8,000 7,000 6,000 5,000 4,000 '000 tn US$ 8,000 7,000 6,000 5,000 4,000 '000 tn Copper-LME Inventory (R.H.S) Copper LME (L.H.S) Copper-LME Inventory (R.H.S) Copper LME (L.H.S) Exhibit 23: Cu LME 3M continues in Contango (US$/tn) Exhibit 24: Al LME 3M Spread moves back to backwardation (US$/tn) Copper LME 3M Spread Aluminium LME 3M Spread ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

8 May-17 Jun-17 Aug-17 Sep-17 Nov-17 Jan-18 Feb-18 Apr-18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 Exhibit 25: Zn LME 3M enters contango signaling price strength (US$/tn) Exhibit 26: Pb LME 3M Spread looms around backwardation (US$/tn) Zinc LME 3M Spread Lead LME 3M Spread Exhibit 27: Gold and Silver Exhibit 28: USD Index Gold Spot (US$/oz) Silver Spot (US$/oz) ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

9 Exhibit 29: Valuation table for Emkay universe Company M. Cap CMP (Rs) P/E (x) P/B (x) EV/EBITDA (x) (Rs bn) Chg (%) YoY Chg (%) FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E Coal India 1, Hindalco HZL 1, JSW Steel MOIL NALCO NMDC SAIL Vedanta 1, Tata Steel Jindal Stainless Jindal Stainless Hisar Stock Recommendations From our coverage universe, we prefer Jindal Stainless Hisar (BUY, Rs353), Jindal Stainless (BUY, Rs151) and Vedanta (BUY, Rs396). In ferrous space, we prefer Tata Steel (BUY, Rs809) and MOIL (BUY, Rs278). ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

10 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Coal India Rating Analyst m Buy Goutam Chakraborty 12-Feb m Buy Goutam Chakraborty 11-Jan m Buy Goutam Chakraborty 13-Nov m Accumulate Goutam Chakraborty 2-Nov m Accumulate Goutam Chakraborty 1-Nov m Accumulate Goutam Chakraborty m Accumulate Goutam Chakraborty 11-Sep m Accumulate Goutam Chakraborty 5-Sep m Accumulate Goutam Chakraborty 16-Aug m Accumulate Goutam Chakraborty 30-Jun m Hold Goutam Chakraborty 29-May m Hold Goutam Chakraborty 2-May m Hold Goutam Chakraborty 5-Apr m Hold Goutam Chakraborty 13-Feb m Hold Goutam Chakraborty 3-Feb m Hold Goutam Chakraborty 2-Jan m Hold Goutam Chakraborty 27-Dec m Hold Goutam Chakraborty 13-Dec m Hold Goutam Chakraborty 3-Oct m Accumulate Goutam Chakraborty 15-Sep m Accumulate Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 4-Jul m Buy Goutam Chakraborty 2-Jun m Buy Goutam Chakraborty 2-May m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 12-Feb m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 5-Jan m Buy Goutam Chakraborty 1-Jan m Buy Goutam Chakraborty 2-Dec m Buy Goutam Chakraborty 17-Nov m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 5-Oct m Buy Goutam Chakraborty 2-Sep m Buy Goutam Chakraborty 6-Aug m Buy Goutam Chakraborty 6-Aug m Accumulate Amit Golchha 3-Aug m UR Amit Golchha 29-May m Hold Amit Golchha Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

11 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Hindalco Rating Analyst m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 1-Nov m Buy Goutam Chakraborty 11-Sep m Buy Goutam Chakraborty 5-Sep m Buy Goutam Chakraborty 11-Aug m Buy Goutam Chakraborty 23-Jun m Buy Goutam Chakraborty 30-May m Buy Goutam Chakraborty 5-Apr m Buy Goutam Chakraborty 13-Feb m Buy Goutam Chakraborty 2-Jan m Buy Goutam Chakraborty 27-Dec m Buy Goutam Chakraborty 12-Nov m Buy Goutam Chakraborty 16-Aug m Buy Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 4-Jul m Buy Goutam Chakraborty 27-Jun m Buy Goutam Chakraborty 30-May m Buy Goutam Chakraborty 2-May m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 12-Feb m Buy Goutam Chakraborty 2-Feb m Accumulate Goutam Chakraborty 5-Jan m Accumulate Goutam Chakraborty 2-Dec m Accumulate Goutam Chakraborty 16-Nov m Accumulate Goutam Chakraborty 3-Nov m Hold Goutam Chakraborty 5-Oct m Hold Goutam Chakraborty 2-Sep m Hold Goutam Chakraborty 18-Aug m Hold Goutam Chakraborty 3-Aug m Hold Goutam Chakraborty 1-Jul m Hold Goutam Chakraborty 1-Jun m Hold Goutam Chakraborty 28-May m Hold Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

12 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Hindustan Zinc Rating Analyst 2-May m Hold Goutam Chakraborty m Hold Goutam Chakraborty 1-Nov m Hold Goutam Chakraborty m Hold Goutam Chakraborty 11-Sep m Hold Goutam Chakraborty 5-Sep m Hold Goutam Chakraborty m Hold Goutam Chakraborty 20-Apr m Hold Goutam Chakraborty 5-Apr m Hold Goutam Chakraborty 10-Feb m Hold Goutam Chakraborty 2-Jan m Buy Goutam Chakraborty 27-Dec m Buy Goutam Chakraborty 21-Oct m Buy Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 22-Jul m Buy Goutam Chakraborty 4-Jul m Buy Goutam Chakraborty 2-May m Buy Goutam Chakraborty 22-Apr m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 22-Jan m Buy Goutam Chakraborty 5-Jan m Buy Goutam Chakraborty 2-Dec m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 20-Oct m Buy Goutam Chakraborty 5-Oct m Buy Goutam Chakraborty 2-Sep m Buy Goutam Chakraborty 3-Aug m Buy Goutam Chakraborty 21-Jul m Buy Goutam Chakraborty 1-Jul m Buy Goutam Chakraborty 1-Jun m Buy Goutam Chakraborty Accumulate Reduce Jindal Stainless Rating Analyst 26-Apr m Buy Goutam Chakraborty m Buy Goutam Chakraborty 15-Feb m Buy Goutam Chakraborty 14-Nov m Buy Goutam Chakraborty 1-Nov m Buy Goutam Chakraborty m Buy Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

13 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Jan Jun Oct Mar Jindal Stainless Hisar Rating Analyst 26-Apr m Buy Goutam Chakraborty m Buy Goutam Chakraborty 15-Feb m Buy Goutam Chakraborty 9-Nov m Buy Goutam Chakraborty 1-Nov m Buy Goutam Chakraborty m Buy Goutam Chakraborty Accumulate Reduce MOIL Rating Analyst 16-Feb m Buy Goutam Chakraborty 15-Nov m Buy Goutam Chakraborty 1-Nov m Buy Goutam Chakraborty 11-Sep m Buy Goutam Chakraborty 5-Sep m Buy Goutam Chakraborty 14-Aug m Buy Goutam Chakraborty 2-Jun m Buy Goutam Chakraborty 5-Apr m Buy Goutam Chakraborty 16-Feb m Buy Goutam Chakraborty 24-Jan m Buy Goutam Chakraborty 2-Jan m Buy Goutam Chakraborty 27-Dec m Buy Goutam Chakraborty 16-Nov m Buy Goutam Chakraborty 26-Oct m Buy Goutam Chakraborty 1-Sep m Buy Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 4-Jul m Buy Goutam Chakraborty 25-May m Buy Goutam Chakraborty 2-May m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 12-Feb m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 2-Dec m Buy Goutam Chakraborty 10-Nov m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 5-Oct m Buy Goutam Chakraborty 18-Sep m Buy Goutam Chakraborty 2-Sep m Buy Goutam Chakraborty 18-Aug m Buy Goutam Chakraborty 3-Aug m Buy Goutam Chakraborty 1-Jul m Buy Goutam Chakraborty 1-Jun m Buy Goutam Chakraborty 1-Jun m Buy Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

14 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May JSW Steel Rating Analyst m Accumulate Goutam Chakraborty 31-Jan m Accumulate Goutam Chakraborty 1-Nov m Accumulate Goutam Chakraborty m Accumulate Goutam Chakraborty 11-Sep m Hold Goutam Chakraborty 5-Sep m Hold Goutam Chakraborty 1-Aug m Hold Goutam Chakraborty 18-May m Hold Goutam Chakraborty 5-Apr m Hold Goutam Chakraborty 31-Jan m Hold Goutam Chakraborty 2-Jan m Accumulate Goutam Chakraborty 27-Dec m Accumulate Goutam Chakraborty 27-Oct m Accumulate Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 28-Jul m Buy Goutam Chakraborty 4-Jun m Buy Goutam Chakraborty 19-May m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 17-Feb m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 29-Jan m Buy Goutam Chakraborty 5-Jan m Buy Goutam Chakraborty 2-Dec m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 23-Oct m Buy Goutam Chakraborty 5-Oct m Buy Goutam Chakraborty 2-Sep m Buy Goutam Chakraborty 3-Aug m Buy Goutam Chakraborty 29-Jul m Buy Goutam Chakraborty 1-Jul m Buy Goutam Chakraborty 1-Jun m Buy Goutam Chakraborty 15-May m Buy Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

15 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May SAIL Rating Analyst m Reduce Goutam Chakraborty 10-Nov m Reduce Goutam Chakraborty 1-Nov m Reduce Goutam Chakraborty 11-Sep m Reduce Goutam Chakraborty 5-Sep m Reduce Goutam Chakraborty 14-Aug m Reduce Goutam Chakraborty 31-May m Sell Goutam Chakraborty 5-Apr m Sell Goutam Chakraborty 10-Feb m Sell Goutam Chakraborty 2-Jan m Sell Goutam Chakraborty 27-Dec m Sell Goutam Chakraborty 9-Dec m Sell Goutam Chakraborty 12-Sep m Sell Goutam Chakraborty 1-Aug m Sell Goutam Chakraborty 4-Jul m Sell Goutam Chakraborty 2-Jun m Sell Goutam Chakraborty 2-May m Sell Goutam Chakraborty 2-Mar m Sell Goutam Chakraborty 17-Feb m Sell Goutam Chakraborty 10-Feb m Sell Goutam Chakraborty 2-Feb m Sell Goutam Chakraborty 5-Jan m Sell Goutam Chakraborty 2-Dec m Sell Goutam Chakraborty 9-Nov m Sell Goutam Chakraborty 3-Nov m Sell Goutam Chakraborty 5-Oct m Sell Goutam Chakraborty 2-Sep m Sell Goutam Chakraborty 18-Aug m Sell Goutam Chakraborty 3-Aug m Reduce Goutam Chakraborty 1-Jul m Reduce Goutam Chakraborty 1-Jun m Reduce Goutam Chakraborty 29-May m Reduce Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

16 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Tata Steel Rating Analyst m Buy Goutam Chakraborty 10-Feb m Buy Goutam Chakraborty 1-Nov m Accumulate Goutam Chakraborty m Accumulate Goutam Chakraborty m Accumulate Goutam Chakraborty 11-Sep m Hold Goutam Chakraborty 5-Sep m Hold Goutam Chakraborty 8-Aug m Hold Goutam Chakraborty 16-May m Hold Goutam Chakraborty 5-Apr m Sell Goutam Chakraborty 7-Feb m Sell Goutam Chakraborty 2-Jan m Sell Goutam Chakraborty 27-Dec m Sell Goutam Chakraborty 11-Nov m Sell Goutam Chakraborty 27-Oct m Sell Goutam Chakraborty 15-Sep m Sell Goutam Chakraborty 1-Aug m Sell Goutam Chakraborty 4-Jul m Sell Goutam Chakraborty 27-May m Sell Goutam Chakraborty 2-May m Sell Goutam Chakraborty 2-Mar m Sell Goutam Chakraborty 17-Feb m Sell Goutam Chakraborty 5-Feb m Sell Goutam Chakraborty 2-Feb m Sell Goutam Chakraborty 5-Jan m Sell Goutam Chakraborty 2-Dec m Sell Goutam Chakraborty 6-Nov m Sell Goutam Chakraborty 3-Nov m Reduce Goutam Chakraborty 5-Oct m Reduce Goutam Chakraborty 2-Sep m Reduce Goutam Chakraborty 12-Aug m Reduce Goutam Chakraborty 3-Aug m Reduce Goutam Chakraborty 1-Jul m Reduce Goutam Chakraborty 1-Jun m Reduce Goutam Chakraborty 21-May m Reduce Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

17 10-May-15 7-Nov-15 6-May-16 3-Nov-16 3-May Vedanta Rating Analyst 4-May m Buy Goutam Chakraborty m Buy Goutam Chakraborty 31-Jan m Buy Goutam Chakraborty 2-Nov m Buy Goutam Chakraborty 1-Nov m Buy Goutam Chakraborty 4-Sep m Buy Goutam Chakraborty m Buy Goutam Chakraborty 15-May m Buy Goutam Chakraborty 5-Apr m Buy Goutam Chakraborty 14-Feb m Buy Goutam Chakraborty 2-Jan m Buy Goutam Chakraborty 28-Oct m Buy Goutam Chakraborty 1-Aug m Buy Goutam Chakraborty 4-Jul m Buy Goutam Chakraborty 2-May m Buy Goutam Chakraborty 29-Apr m Buy Goutam Chakraborty 2-Mar m Buy Goutam Chakraborty 2-Feb m Buy Goutam Chakraborty 29-Jan m Buy Goutam Chakraborty 5-Jan m Buy Goutam Chakraborty 2-Dec m Buy Goutam Chakraborty 3-Nov m Buy Goutam Chakraborty 28-Oct m Buy Goutam Chakraborty 5-Oct m Buy Goutam Chakraborty 2-Sep m Buy Goutam Chakraborty 3-Aug m Buy Goutam Chakraborty 30-Jul m Buy Goutam Chakraborty 1-Jul m Buy Goutam Chakraborty 15-Jun m Buy Goutam Chakraborty 1-Jun m Accumulate Goutam Chakraborty Accumulate Reduce ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

18 Emkay Rating Distribution BUY Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next months. ACCUMULATE Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next months. HOLD Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next months. REDUCE Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next months. SELL The stock is believed to underperform the broad market indices or its related universe within the next months. Emkay Global Financial Services Ltd. CIN - L67120MH1995PLC th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai India Tel: Fax: Web: DISCLAIMERS AND DISCLOSURES: Emkay Global Financial Services Limited (CIN-L67120MH1995PLC084899) and its affiliates are a full-service, brokerage, investment banking, investment management and financing group. Emkay Global Financial Services Limited (EGFSL) along with its affiliates are participants in virtually all securities trading markets in India. EGFSL was established in 1995 and is one of India's leading brokerage and distribution house.egfsl is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited(NSE), MCX Stock Exchange Limited (MCX-SX).EGFSL along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail), merchant banking, commodity broking, depository participant, portfolio management, insurance broking and services rendered in connection with distribution of primary market issues and financial products like mutual funds, fixed deposits. 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EGFSL offers research services to clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company(s) covered in this report-: EGFSL or its associates may have financial interest in the subject company. Research Analyst or his/her relative s financial interest in the subject company. (NO) EGFSL or its associates and Research Analyst or his/her relative s does not have any material conflict of interest in the subject company. The research Analyst or research entity (EGFSL) have not been engaged in market making activity for the subject company. EGFSL or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report. Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report: (NO) EGFSL or its associates may have received any compensation including for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or its associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or its associates may have received any compensation or other benefits from the Subject Company or third party in connection with the research report. Subject Company may have been client of EGFSL or its associates during twelve months preceding the date of distribution of the research report and EGFSL may have co-managed public offering of securities for the subject company in the past twelve months. The research Analyst has served as officer, director or employee of the subject company: (NO) The Research Analyst has received any compensation from the subject company in the past twelve months: (NO) The Research Analyst has managed or co managed public offering of securities for the subject company in the past twelve months: (NO) The Research Analyst has received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months: (NO) The Research Analyst has received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months: (NO) The Research Analyst has received any compensation or other benefits from the subject company or third party in connection with the research report: (NO) EGFSL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject EGFSL or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of EGFSL. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of EGFSL or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read Risk Disclosure Document for Capital Market and Derivatives Segments as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,

19 Goutam Chakraborty, MSc (Agri Eco), PGDFM ED: HEMANT MARADIA SA: DHANANJAY SINHA May 8,