2QFY2012 Result Update | Infrastructure

October 21, 2011

HCC
Performance Highlights
Y/E March (` cr) Net sales Operating profit Net profit 2QFY12 828.6 93.7 (40.5) 2QFY11 884.6 113.3 12.1 % chg (yoy) (6.3) (17.3) 1QFY12 1,057.9 137.9 2.9 % chg (qoq) (21.7) (32.1) -

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Infrastructure 1,601 1.3 67/26 1,362,726 1 16,786 5,050 HCNS.BO HCC@IN

`26 -

Source: Company, Angel Research

For 2QFY2012, HCCs numbers came in much lower than our and street expectations. As of 2QFY2012, the companys total outstanding order book stands at `16,175cr (excluding L1 orders of `2,077cr), with no order inflow during the quarter. Owing to HCCs poor performance in 2QFY2012 and given the headwinds faced by the infrastructure sector, we are revising our estimates downwards for FY2012 and FY2013. Further, owing to concerns such as uncertainty on Lavasa project, slowdown in order inflow, high debt and stretched working capital, we remain Neutral on the stock. Abysmal performance on all fronts: On the top-line front, HCCs revenue declined by 6.3% yoy to `828.6cr (`884.6cr), against our estimate of `946.5cr, due to slowdown in execution. EBITDAM came in at 11.3% (12.8%), a dip of 150bp yoy and lower than our estimate of 13.2% on account of commodity price pressures and fixed overheads not covered by lower revenue. On the earnings front, HCC reported a loss of `40.5cr vs. profit of `12.1cr in 2QFY2011, against our estimated loss of `7.4cr. Shocking performance on the bottom-line front was due to lower revenues, compression on EBITDA margin front and higher interest cost (`107.4cr, 60.2%/15.2% yoy/qoq jump). Outlook and valuation: On the valuations front, at current levels, the stock trades at 41.0x PE and 1.2x P/BV on FY2013E standalone basis. We have valued HCC on an SOTP basis with a fair value of `44/share by assigning 6x FY2013E earnings (standalone). The companys real estate venture has been valued on NAV basis and its BOT assets have been valued by giving a 30% discount to P/E deal. Our fair value implies an upside of 65.3% from current levels, but we continue to maintain our Neutral recommendation on the stock, owing to concerns mentioned above. Further, in the infrastructure space, we believe there are better bets than HCC such as L&T and Sadbhav.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 39.9 11.5 24.6 24.1

Abs. (%) Sensex HCC

3m

1yr

3yr 57.1 12.4

(9.0) (17.2) (20.7) (58.9)

Key financials (Standalone)

Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA (%) FDEPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010
3,644 10.0 81 7.2 12.2 1.3 19.7 1.1 6.5 8.6 1.1 8.9

FY2011
4,093 12.3 71 (12.8) 13.2 1.2 22.6 1.1 4.7 8.3 1.2 9.0

FY2012E
4,152 1.4 (58) 12.4 (1.0) 1.1 (3.9) 6.2 1.4 11.5

FY2013E
4,633 11.6 39 12.6 0.6 41.0 1.2 2.8 7.0 1.2 9.2

Shailesh Kanani
022-39357800 Ext:6829 shailesh.kanani@angelbroking.com

Nitin Arora
022-39357800 Ext:6842 nitin.arora@angelbroking.com

Please refer to important disclosures at the end of this report

HCC | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance (Standalone)

Y/E March (` cr) Income from operations Total expenditure Operating profit OPM (%) Interest Depreciation Other income Nonrecurring items Profit before tax Tax PAT PAT (%) FDEPS (`)
Source: Company, Angel Research

2QFY12 828.6 734.9 93.7 11.3 107.4 41.4 (3.0) (58.1) (17.6) (40.5) (4.9) (0.7)

2QFY11 884.6 771.3 113.3 12.8 67.1 35.9 6.1 16.5 4.3 12.1 1.4 0.2

% chg(yoy) (6.3) (4.7) (17.3) (150)bp 60.2 15.5 (453.2) (434.0)

1QFY12 1,057.9 920.0 137.9 13.0 93.3 39.2 0.7 6.2 3.3 2.9 0.3 0.0

% chg(qoq) (21.7) (20.1) (32.1) (170)bp 15.2 5.5 (1045.2) (1511.6)

1HFY12 1,886.5 1,654.9 231.6 12.3 200.7 80.6 (2.3) (52.0) (14.3) (37.7) (2.0) (0.6)

1HFY11 1,879.9 1,640.9 239.0 12.7 124.8 70.5 9.2 52.9 12.4 40.5 2.2 0.7

% chg(yoy) 0.4 0.9 (3.1) (40)bp 60.8 14.3 (198.3) (193.1)

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

Actual Revenue (` cr) EBITDA margin (%) PAT (` cr)
Source: Company, Angel Research

Estimates 946.1 13.2 (7.4)

Variation (%) (12.5) (190)bp -

828.6 11.3 (40.5)

Revenues take a plunge

On the top-line front, HCCs revenue declined by 6.3% yoy to `828.6cr (`884.6cr), against our estimate of `946.5cr, due to slowdown in execution. As per management, the decline in revenue was due to delay in approvals by the government for environment clearances, land acquisition problems and overall slowdown in decision making. Further, the infrastructure sector is facing strong headwinds, including slowdown in order activity caused by shortfall in investments in the infrastructure sector, increased commodity prices and a high interest rate scenario. Management believes that FY2012 will be a rough year for HCC, owing to reasons mentioned above. Against this backdrop and due to poor performance in 2QFY2012, we are lowering our FY2012 and FY2013 revenue estimates by 8.2% and 15.5%, respectively.

October 21, 2011

HCC | 2QFY2012 Result Update

Exhibit 3: Decline in revenue due to slowdown on the execution front

1,400 1,200 1,000 800 600 400 200 0 (7.2) 18.3 9.3 0.8 (6.3) 20.4 10.2 10.8 14.1 13.2 11.1 10.8 6.3 25.0 20.0 15.0 10.0 5.0 0.0 (5.0) (10.0)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Sales (` cr, LHS)

Source: Company, Angel Research

Growth (yoy %, RHS)

Projects update
For Dhule-Palasner project, management is confident of achieving completion in 3QFY2012 six months before the scheduled completion date. The three BOT road projects in West Bengal are progressing well and are on schedule to achieve completion during July-August 2013. As per management, HCC Concessions will report revenue of ~`187cr and ~`537cr in FY2013 and FY2014, respectively. On the Kishanganga project, 20-30% completion has been achieved as on 2QFY2012.

Lavasa update
In the latest development on the Lavasa project, the Bombay High Court has directed Government of Maharashtra to take credible action against Lavasa (one of the five pre-conditions set by MoEF) in two weeks. Further, it has directed MOEF to pass a decisive order by November 16, 2011. The court also said that if MoEF fails to pass its final order, it will hear Lavasas petition on merits and pass appropriate orders. Against this background, we believe Lavasa should get clearance for the first phase on November 16, 2011.

Lower EBITDAM, higher interest cost lead to loss

EBITDAM came in at 11.3% (12.8%), a dip of 150bp yoy and lower than our estimate of 13.2% on account of commodity price pressures and fixed overheads not covered by lower revenue. On the earnings front, HCC reported a loss of `40.5cr vs. profit of `12.1cr in 2QFY2011, against our estimate of loss of `7.4cr. Shocking performance on the bottom-line front was due to a decline in revenues, EBITDA margin compression and higher interest cost (`107.4cr, 60.2%/15.2% yoy/qoq jump). Going forward as well, we believe HCC will face pressure on the earnings front due to subdued top-line growth and high interest cost. Hence, we have lowered our earnings estimates to loss of `57.7cr (earlier estimate profit of `29.5cr) for FY2012 and profit of `39.0cr (`73.4cr) for FY2013.

October 21, 2011

2QFY12

HCC | 2QFY2012 Result Update

Exhibit 4: EBITDAM take a hit

180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 12.9 12.9 15.4 14.0 11.3 13.0 11.3 12.6 12.8 12.6 13.8 13.0 11.3 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

Exhibit 5: Poor performance on all fronts led to loss

60.0 40.0 20.0 0.0 3.1 2.8 2.1 0.7 1.6 5.2 4.0 2.8 1.4 1.9 0.8 0.3 2.0 4.0 6.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

(20.0) (40.0) (60.0)

2QFY12
(4.9)

(2.0) (4.0) (6.0)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

EBITDA (`cr, LHS)

EBITDAM (%, RHS)

2QFY12

PAT (` cr, LHS)

PATM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Order book analysis

HCCs order book, as of 2QFY2012, stood at `16,175cr (4.0x FY2011 revenue) excluding L1 orders worth `2,077cr with the company not bagging any orders during the quarter. The companys order book comprises hydro power (40%), water solutions (23%), transportation (21%) and nuclear and special (16%) projects. Owing to poor performance in 1HFY2012 and given the gloomy scenario for order inflow across sectors, we have further lowered our order inflow assumptions to `3,871cr (`4,408cr) and `4,897cr (`5,555cr) for FY2012 and FY2013, respectively.

Exhibit 6: Order booking and order book trend

19,500 14,500 9,500 4,500 (500) 12.2 34.5 42.4 32.1 26.3 13.0 16.7 29.2 30.8 20.4 20.0 (4.0) (2.3) (9.1) 0.0 (20.0) 60.0 40.0

Exhibit 7: Segmental order book break-up (%)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Order Book (` cr, LHS) L1 Status (` cr, LHS)

Order Inflow (` cr, LHS) Order Book growth (%, RHS)

2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

HCC Concessions stake dilution A positive development

During the quarter, HCC Concessions has successfully diluted 14.5% stake to Xander Group for `240cr, which values it at ~`1,650cr. It has a current portfolio of `5,500cr, comprising six BOT projects. Further, the company has plans of increasing the portfolio to `15,000cr in the next three years. Total equity requirement for the current portfolio is `1,047cr, of which HCC has already invested `748cr. Thus, we believe this is a positive development for HCC as it will reduce its burden to fund the road BOT projects.

October 21, 2011

HCC | 2QFY2012 Result Update

Outlook and valuation

Owing to HCCs poor performance in 2QFY2012 and given the headwinds faced by the infrastructure sector, we are revising our estimates downwards for FY2012 and FY2013. On the top-line front, we have lowered our estimates by 8.2% and 15.5% for FY2012 and FY2013, respectively, owing to slowdown in execution. Further, with high debt levels of HCC along with a high interest rate scenario, we have factored loss of `57.7cr (earlier estimate profit of `29.5cr) for FY2012 and profit of `39.0cr (`73.4cr) for FY2013.

Exhibit 8: Change in estimates

FY2012E Earlier estimates Revenue (` cr) EBITDA margin (%) PAT (` cr)
Source: Company, Angel Research

FY2013E Variation (%) (8.2) (20)bp Earlier estimates 5,486 12.6 73.4 Revised estimates 4,633 12.6 39.0 Variation (%) (15.5) (46.8) 4,152 12.4 (57.7)

Revised estimates

4,521 12.6 29.5

On the valuations front, at current levels, the stock trades at 41.0x PE and 1.2x P/BV on FY2013E standalone basis. We have valued HCC on an SOTP basis with a fair value of `44/share by assigning 6x FY2013E earnings (standalone). The companys real estate venture has been valued on NAV basis and its BOT assets have been valued by giving a 30% discount to P/E deal. Our fair value implies an upside of 65.3% from current levels, but we continue to maintain our Neutral recommendation on the stock, owing to concerns aforesaid. Further, in the infrastructure space, we believe there are better bets than HCC such as L&T and Sadbhav.

Exhibit 9: SOTP valuation summary

Business Segment Construction Value of real estate HCC Concessions Total
Source: Company, Angel Research

Methodology P/E NAV Basis

Remarks 6.0x FY2013E earnings NAV Basis 30% Discount to PE deal, valuing it at `1,650cr

`/share 3.9 23.4 16.3 43.6

Exhibit 10: Key assumptions Order inflow assumptions lowered

` cr Order inflow Revenue Order backlog (Y/E) Order book-to-sales ratio (x)
Source: Company, Angel Research

FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 3,929 3,083 10,158 3.3 7,616 3,314 14,460 4.4 6,054 3,644 16,870 4.6 3,410 4,093 16,187 4.0 3,871 4,152 15,906 3.8 4,897 4,633 16,169 3.5

October 21, 2011

HCC | 2QFY2012 Result Update

Exhibit 11: Angel EPS forecast vs. consensus

Angel Forecast FY2012E FY2013E
Source: Company, Angel Research

Bloomberg Consensus 0.6 1.1

Variation (%) 71.8

(1.0) 0.6

Exhibit 12: Recommendation summary

Company CCCL HCC IRB Infra IVRCL JP Assoc. Punj Lloyd NCC Sadbhav Simplex In. Patel Engg Madhucon L&T ITNL CMP 19 26 160 35 70 54 54 127 205 96 70 1,336 203 TP Rating FY11 - Neutral - Neutral 193 60 85 82 167 299 106 1,714 259 Buy Buy 2,199 4,093 2,438 5,651 7,850 5,074 2,209 4,889 3,499 1,816 4,049 Top line (` cr) FY12E 2,362 4,152 3,024 5,798 2,646 4,633 3,980 6,994 9.7 6.4 27.8 11.2 13.1 18.3 14.8 13.9 12.4 1.2 17.6 19.4 26.5 2.5 1.2 13.6 5.9 5.5 (5.4) 6.4 8.0 21.5 18.4 5.6 54.3 22.3 EPS (`) FY11 7.4 5.0 3.0 12.7 4.0 6.4 9.5 0.8 4.2 17.6 1.5 1.5 (1.0) 12.5 4.2 3.7 2.5 5.5 8.7 20.4 17.1 5.8 64.2 23.9 3.6 0.6 14.0 6.1 5.3 4.0 6.7 10.0 29.9 16.7 6.8 74.0 25.3 18.4 (25.8) 1.5 1.6 (1.8) 2.4 12.2 18.1 (4.7) 10.7 16.7 6.4 Adj. P/E FY12E 12.5 5.4 4.2 18.7 21.7 4.6 5.8 10.0 0.8 4.0 14.8 1.4 5.3 4.8 2.9 13.1 13.4 3.8 5.0 6.8 0.8 3.4 12.9 1.4 OB/ FY13E Sales(x) 2.8 4.0 4.2 3.0 3.2 3.2 2.9 2.7 3.5 3.2 5.5 FY13E CAGR (%) FY11 FY12E FY13E CAGR (%)

Buy 13,832 15,092 17,683 9,585 10,992 5,755 2,602 5,286 3,272 1,959 4,910 6,689 2,865 6,178 3,587 2,512 6,484 Buy Buy Buy Buy Buy

- Neutral

- Neutral

Buy 43,905 53,503 62,568

Source: Company, Angel Research

Exhibit 13: SOTP break up

Company ` CCCL HCC IRB Infra IVRCL JP Assoc. Punj Lloyd NCC Sadbhav Simplex In. Patel Engg Madhucon L&T ITNL 21 4 101 43 31 72 53 90 299 40 59 1,332 90 Core Const. % to TP 100 9 52 71 37 100 65 54 100 33 55 78 35 ` 23 30 2 47 2 Real Estate % to TP 54 35 2 38 2 ` 16 70 8 76 16 33 143 55 37 36 10 46 13 31 382 Road BOT % to TP 4 17 22 ` 2 29 Invst. In Subsidiaries % to TP 18 24 18 19 12 25 10 ` 9 29 22 16 12 Others % to TP Total ` 21 44 193 60 85 72 82 167 299 122 106 1,714 259

Source: Company, Angel Research

October 21, 2011

HCC | 2QFY2012 Result Update

Profit & loss statement (Standalone)

Y/E March (` cr) Net sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of asso. Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg
FY2008 3,083 3,083 30.8 2,716 971 1,448 297 367 70.3 11.9 96 270 99.5 8.8 152 2 1.9 (0) 120 28.8 36 157 47 30.1 110 110 73 33.3 2.4 2.9 1.2 33.3 FY2009 3,314 3,314 7.5 2,882 1,236 1,271 375 431 17.7 13.0 115 316 16.9 9.5 211 9 8.2 (0) 115 (4.3) 49 165 39 23.8 125 125 76 3.9 2.3 3.0 1.3 3.9 FY2010 3,644 3,644 10.0 3,201 1,060 1,747 394 443 2.6 12.2 114 329 4.0 9.0 205 13 10.7 (15) 122 5.8 122 40 33.2 81 81 81 7.2 2.2 2.7 1.3 7.2 FY2011 4,093 4,093 12.3 3,553 1,222 1,864 468 540 21.9 13.2 153 387 17.7 9.5 290 17 15.2 (3) 112 (8.4) 112 41 36.4 71 71 71 (12.8) 1.7 1.2 1.2 (12.8) FY2012E 4,152 4,152 1.4 3,635 1,270 1,891 474 517 (4.3) 12.4 170 347 (10.4) 8.4 424 3 (4.6) (74) (165.9) (74) (16) 21.6 (58) (58) (58) (181.3) (1.4) (1.0) (1.0) (181.3) FY2013E 4,633 4,633 11.6 4,050 1,411 2,110 529 583 12.9 12.6 186 397 14.5 8.6 355 17 28.9 59 (179.9) 59 20 33.6 39 39 39 (167.7) 0.8 0.6 0.6 (167.7)

October 21, 2011

HCC | 2QFY2012 Result Update

Balance sheet (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Misc. Exp. not written off Total Assets
1,410 457 953 68 296 2,710 264 295 2,150 1,064 1,646 2,962 1,683 555 1,128 46 366 3,467 154 528 2,785 1,568 1,900 3,440 1,814 664 1,150 35 409 4,624 188 863 3,573 2,043 2,581 4,174 1,987 803 1,184 26 531 6,096 194 1,395 4,508 2,677 3,419 5,160 2,161 973 1,189 62 627 7,112 105 1,812 5,195 2,986 4,126 6,003 2,370 1,159 1,211 63 740 7,387 136 2,074 5,177 3,980 3,407 5,420 25.6 978 1,004 1,845 113 2,962 25.6 979 1,005 2,322 113 3,440 30.3 1,502 1,517 2,515 143 4,174 60.7 1,462 1,522 3,471 166 5,160 60.7 1,355 1,401 4,436 166 6,003 60.7 1,330 1,376 3,878 166 5,420 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 21, 2011

HCC | 2QFY2012 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments (Inc.)/ Dec. in loans and advances Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances
FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 157 96 175 2 47 28 (225) (67) 2 (289) 294 (24) 48 317 56 208 264 165 115 364 9 39 (133) (252) (70) 9 (313) (71) 477 (24) (47) 335 (111) 264 154 122 114 647 13 40 (465) (120) (43) 13 (150) 459 193 (28) 25 649 34 154 188 112 153 832 17 41 (625) (164) (123) 17 (270) (38) 957 (28) 10 901 5 188 194 (74) 170 796 3 (16) (687) (210) (96) 3 (302) 965 (64) 901 (89) 194 105 59 186 (750) 17 20 958 (210) (113) 17 (306) (558) (64) (622) 30 105 135

October 21, 2011

HCC | 2QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Order book to sales Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) Work. cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage
1.6 4.3 1.8 2.2 5.0 1.5 1.5 5.3 1.6 2.2 6.1 1.3 3.1 8.4 0.8 2.7 6.4 1.1 2.5 230 125 153 2.1 271 1 153 172 2.1 318 1 186 207 2.2 360 229 250 2.0 426 277 318 2.0 408 307 287 9.8 10.8 7.7 9.9 10.6 7.6 8.6 9.0 6.5 8.3 8.6 4.7 6.2 6.4 (3.9) 7.0 7.1 2.8 8.8 0.7 1.2 7.5 6.3 1.5 9.4 9.5 0.8 1.1 8.1 7.7 1.9 8.7 9.0 0.7 1.0 6.0 5.7 1.8 6.7 9.5 0.6 0.9 5.5 6.2 1.8 4.3 8.4 0.8 0.8 5.0 8.4 2.6 (3.9) 8.6 0.7 0.8 4.7 5.7 2.9 1.9 2.9 1.2 2.8 0.8 16.6 3.0 1.3 3.2 0.8 16.6 2.7 1.3 3.2 0.8 25.0 1.2 1.2 3.7 0.9 25.1 (1.0) (1.0) 1.8 0.9 23.1 0.6 0.6 3.7 0.9 22.7 21.9 9.5 1.6 3.0 1.0 8.7 1.1 2.7 21.1 8.4 1.6 3.0 1.1 8.7 1.1 4.4 19.7 8.2 1.1 3.0 1.1 8.9 0.9 4.6 22.6 7.2 1.1 3.4 1.2 9.0 0.9 4.0 14.3 1.1 3.4 1.4 11.5 1.0 3.8 41.0 7.1 1.2 3.4 1.2 9.2 1.0 3.5 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 21, 2011

10

HCC | 2QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angeltrade.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

HCC No No No No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 21, 2011

11