3QFY2012 Result Update | Capital Goods

February 7, 2012

BGR Energy Systems

Performance Highlights
(` cr) Revenue EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (yoy) (36.1) (10.8) 463 (37.5) 2QFY12 771.5 110.2 14.3 51.4 % chg (qoq) 4.2 19.2 205.5 6.6

`234 -

3QFY12 803.7 131.3 16.3 54.7

3QFY11 1,257 147.2 11.7 87.6

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

Capital Goods 1,690 1.6 588/173 683,417 10 17,622 5,335 BGRE.BO BGRL@IN

BGR Energys (BGR) results were disappointing for 3QFY2012, as expected. The companys top line for the quarter declined on account of a high base, leading to downbeat earnings growth. Amidst execution concerns, management has guided revenue of ~`3,400cr for FY2012E, which is in a stark contrast to the earlier guidance of `4,800cr and well below our conservative estimates of `4,196cr. Hence, we revise downwards our FY2012E/FY2013E revenue estimates by 20.3%/7.6% and earnings estimates by 18.0%/18.9%. The stock continues to remain range-bound opaque visibility on new orders remains an overhang, thus capping any upside to the stock. We remain Neutral on the stock. Execution decelerates as expected, positive surprise on margins: The companys top line declined by 36.1% yoy to `803.7cr (`1,257cr), which was lower by 10.8% compared to our (below street) expectation of `901.1cr. On the EBITDA front, the companys margin reported a sharp expansion of 463bp yoy to 16.3%, (est. 12%), which can mainly be attributed to higher proportion of revenue from the BoP vertical. Interest cost jumped by 175% yoy/53% qoq to `46.2cr, mainly due to high working capital borrowings. Subdued top-line growth and high interest cost resulted in PAT declining by 37.5% yoy to `54.7cr (`87.6cr). Outlook and valuation: BGR's working capital has seen severe deterioration over the past few quarters (from 74 days in FY2010 to 225 days in 1HFY2012), mainly due to high receivables. Amid issues impairing the power sector, credit availability may harden for SEBs, as banks have already chosen to remain risk-averse. Hence, in our view, tight liquidity is likely to transmit negatively on BGR's books. Along with this, the BTG venture is expected to stretch its balance sheet we expect the leverage to rise from 1.3x in 1HFY2012 to 2.4x in FY2013. At the CMP, the stock is trading at PE multiple of 8.6x FY2013E EPS, which we believe is reasonable amidst structural issues (slowdown of order inflow in the BTG space and high leverage) faced by the company. Hence, we maintain our Neutral view on the stock. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 81.1 4.9 3.7 10.3

Abs. (%) Sensex BGR

3m 0.3

1yr (2.3)

3yr 89.5 62.6

(31.5) (56.8)

FY2010 3,073 59.2 201 74.4 11.2 28.0 8.4 2.4 31.7 22.1 0.5 4.6

FY2011 4,750 54.5 323 60.5 11.3 44.8 5.2 1.8 39.0 24.0 0.4 3.8

FY2012E 3,346 (29.6) 213 (34.0) 14.3 29.6 7.9 1.6 21.0 13.4 1.2 8.5

FY2013E 4,170 24.6 196 (8.1) 11.5 27.2 8.6 1.4 17.3 10.1 1.1 9.6

Shailesh Kanani
+91 22 3935 7800 Ext: 6829 shailesh.kanani@angelbroking.com

Hemang Thaker
+91 22 3935 7800 Ext: 6817 hemang.thaker@angelbroking.com

Please refer to important disclosures at the end of this report

BGR Energy | 3QFY2012 Result Update

Exhibit 1: Quarterly performance (Standalone)

(` cr) Net Sales Other operating income Total income Stock adjustments Raw Material (% of total income) Employee Cost (% of total income) Other Expenses (% of total income) Total Expenditure EBITDA (EBITDA %) Interest Depreciation Other Income PBT (% of total income) Total Tax (% of PBT) PAT (% of total income) EPS (`)
Source: Company, Angel Research

3QFY12 802.3 1.4 803.7 0.2 587.4 73.1 48.2 6.0 36.7 4.6 672.4 131.3 16.3 46.2 4.1 81.0 10.1 26.3 32.5 54.7 6.8 7.6

3QFY11 1,251 5.8 1,257 (3.2) 1,013.3 80.4 41.5 3.3 58.1 4.6 1,110 147.2 11.7 16.8 3.4 1.7 128.7 10.2 41.1 32.0 87.6 7.0 12.1

% chg (yoy) (35.9) (36.1) (42.0) (7.3) 16.1 (36.9) (39.4) (10.8) 175.4 20.4 (37.0) (36.1) (37.5)

2QFY12 770.6 0.9 771.5 582.4 75.5 41.8 5.4 37.1 4.8 661.3 110.2 14.3 30.2 4.0 76.1 9.9 24.7 32.5 51.4 6.7 7.1

% chg (qoq) 4.1 4.2 0.9 15.1 (1.1) 1.7 19.2 14.4 52.9 3.0 6.5 6.4 6.6 6.6

9MFY12 2,304 5.3 2,309.4 0.1 1,746 75.6 124.1 5.4 101.9 4.4 1,972 337.6 14.6 94.3 11.9 231.4 10.0 75.1 32.4 156.3 6.8 21.7

9MFY11 3,290 8.9 3,299 (4.9) 2,679 81.2 107.8 3.3 133.7 4.1 2,916 383.3 11.6 42.2 9.8 7 338.2 10.3 112.3 33.2 225.9 6.8 31.3

% chg (yoy) (30.0) (30.0) (34.8) 15.1 (23.8) (32.4) (11.9) 123.6 21.3 (31.6) (33.2) (30.8)

Exhibit 2: Actual vs. estimates

(` cr) Revenue EBITDA Interest Tax PAT
Source: Company, Angel Research

Actual 803.7 131.3 46.2 26.3 54.7

Estimates 901.1 108.1 35.0 22.7 47.2

Var (%) (10.8) 21.4 31.9 15.7 16.0

Revenue growth tapers

During the quarter, the companys top line declined sharply by 36.1% yoy to `803.7cr (`1,257cr). On the segmental front, the downside in revenue came from the construction and EPC side, which declined by 38.8% yoy to `727.1cr (`1,188cr). Payment delays from clients partly restrained the project execution, as cited by management. In contrast, the capital goods segment posted decent 19% yoy growth to `75.2cr (`63.2cr). Amidst execution concerns, management has guided revenue of ~`3,400cr for FY2012E, which is in a stark contrast to the earlier guidance of `4,800cr and well below our conservative estimates of `4,196cr. Hence, we revise downwards our FY2012E/FY2013E revenue estimates by 20.3%/7.6% and earnings estimates by 18.0%/18.9%.
February 7, 2011

BGR Energy | 3QFY2012 Result Update

Exhibit 3: Revenue coming off sharply in recent quarters as expected

1,200 1,000 800 600 400 200 0 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 (4.7) 2.8 10.3 (24.1) (11.9) (19.0) (32.1) (36.1) 34.4 131.1 190.6 142.5 97.9 200.0 160.0 120.0 80.0 40.0 0.0 (40.0)

Sales (` cr, LHS)

Growth (yoy %, RHS)

Source: Company, Angel Research

Exhibit 4: Segment-wise performance (Standalone)

Y/E March (` cr) Revenue Capital goods Const. and EPC contracts Total revenue EBIT (excl. net unallocable inc.) Capital goods Const. and EPC contracts Total EBIT Revenue mix (%) Capital goods Const. and EPC contracts EBIT margin (%) Capital goods Const. and EPC contracts Total
Source: Company, Angel Research

3QFY12 75.2 727.1 802.3 9.2 118.1 127.2 9.4 90.6 12.2 16.2 15.9

3QFY11 63.2 1,188 1,251 5.0 138.8 143.8 5.1 94.9 7.9 11.7 11.5

% chg (yoy) 19.0 (38.8) (35.9) 82.6 (14.9) (11.5)

2QFY12 91.5 679.1 770.6 18.2 88.0 106.2 11.9 88.1 19.9 13.0 13.8

% chg (qoq) (17.8) 7.1 4.1

9MFY12 224.9 2,079 2,304 29.8 296.0 325.7 9.8 90.2 13.2 14.2 14.1

9MFY11 144.7 3,145 3,290 9.3 364.2 373.5 4.4 95.6 6.4 11.6 11.4

% chg (yoy) 55.4 (33.9) (30.0) 220.2 (18.7) (12.8)

Impressive EBITDAM, driven by the BoP segment: For 3QFY2012, the companys EBITDAM expanded sharply by 463bp yoy to 16.3%, highest ever in any quarter. Margin expansion was mainly on account of higher contribution of the high-margin BoP and capital goods segments. Revenue mix in terms of EPC/BoP for the quarter stood at 38% for EPC and 62% for BoP. On the EBITDA front, the companys margin reported a sharp expansion of 463bp yoy to 16.3%, (est. 12%), which can be mainly attributed to higher proportion of revenue from the BoP vertical. As per management, BoP orders executed embedded a price variation clause (in contrast with earlier fixed priced orders), which enabled greater leverage on the operating front. However, we are not convinced by the same and the reason for such high margins remains a mystery for us. Interest cost jumped by 175% yoy/53% qoq to `46.2cr, mainly due to high working capital borrowings. Subdued top-line growth and high interest cost resulted in PAT declining by 37.5% yoy to `54.7cr (`87.6cr).

February 7, 2011

BGR Energy | 3QFY2012 Result Update

Exhibit 5: Surprise jump in EBITDAM

200 150 10.5 100 8.0 50 0 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4.0 13.8 11.5 12.7 13.1 14.3 16.3 11.2 10.6 11.4 11.7 11.7 11.5 20.0 16.0 12.0

Exhibit 6: PAT impacted by high interest cost and top-line decline

125 100 5.8 75 50 25 0 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 7.0 6.7 6.8 6.7 6.8 6.5 6.5 6.5 6.6 6.5 6.7 6.8 10.0 8.0 6.0 4.0 2.0 -

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

PAT (` cr, LHS)

PATM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Order book: The company secured one single order worth `1,700cr, thus taking its order book tally to ~`8,200cr, as of 3QFY2012. The order backlog mainly consists of EPC/BoP power projects. Management indicated that NTPC bulk order (four TG sets worth `3,000cr) is likely to get booked in 4QFY2012. Delays in acquiring land for project sites have led to deferral in awarding these orders. In addition, management cited an encouraging order pipeline worth 6,000MW comprising three EPC projects from SEBs. On the long pending RRVUNL order, MoEF has recently issued clearance, suggesting speedy finalization on this order. However, we remain cautious on this order, as further delay in awarding cannot be ruled out, in our view.

Exhibit 7: Order book growth under threat...

12,197 10,215 10,230 10,532 14,000 12,000 10,000 (` cr) 8,000 6,000 4,000 2,000 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 10,881 11,609

9,523

9,397

9,317

8,000

7,500

Source: Company, Angel Research

February 7, 2011

7,270

8,200

BGR Energy | 3QFY2012 Result Update

Outlook and valuation

BGR's working capital has seen severe deterioration in the past few quarters (from 74 days in FY2010 to 225 days in 1HFY2012), mainly due to high receivables. Amid issues impairing the power sector, credit availability may harden for SEBs, as banks have already chosen to remain risk-averse. Hence, in our view, tight liquidity is likely to transmit negatively on BGR's books. Along with this, the BTG venture is expected to stretch its balance sheet we expect the leverage to rise from 1.3x in 1HFY2012 to 2.4x in FY2013. At the CMP, the stock is trading at PE multiple of 8.6x FY2013E EPS, which we believe is reasonable amidst structural issues (slowdown of order inflow in BTG space and high leverage) faced by the company. Hence, we maintain our Neutral view on the stock. Change in estimates: Amidst execution concerns, management has guided revenue of ~`3,400cr for FY2012E, which is in a stark contrast to the earlier guidance of `4,800cr and well below our conservative estimates of `4,196cr. Hence, we revise downwards our FY2012E/FY2013E revenue estimates by 20.3%/7.6% and earnings estimates by 18.0%/18.9%. In addition, we have factored in EBITDAM expansion of 183bp for FY2012E (given the consistent uptick since past three quarter of FY2012E).

Exhibit 8: Actual vs. Estimates

FY2012E (` cr) Revenue EBITDA EBITDA (%) PAT EPS (`) Order inflows Order backlog
Source: Company, Angel Research

FY2013E Var. (%) (20.3) (8.6) 183bp (18.0) (17.9) (9.3) 2.7 Earlier estimates 4,513 520 11.5 242 33.6 6,350 11,383 Revised estimates 4,170 481 11.5 196 27.2 5,760 11,398 Var. (%) (7.6) (7.4) (18.9) (19.1) (9.3) 0.1 3,346 480 14.3 213 29.6 5,237 9,807

Earlier estimates 4,196 525 12.5 260 36.0 5,773 9,546

Revised estimates

Exhibit 9: Angel EPS forecast vs. consensus

Y/E March FY2012E FY2013E
Source: Company, Angel Research

Angel forecast 29.6 27.2

Bloomberg consensus 29.9 32.0

Var. (%) (1.1) (15.1)

February 7, 2011

BGR Energy | 3QFY2012 Result Update

Exhibit 10: One-year forward P/E band

1,300 1,040 780 520 260 0 Mar-09 May-09 Mar-10 May-10 Mar-11 May-11 Jan-09 Jan-10 Jan-11 Sep-09 Sep-10 Nov-09 Nov-10 Sep-11 Nov-11 Jan-12
13.9 21.1 17.3 17.3 12.7 27.6 20.5

Jul-09

Jul-10

Share Price (`)

5x

10x

15x

Jul-11

20x

Source: Company, Angel Research

Exhibit 11: Peer comparison

Company ABB* BHEL BGR Energy Crompton Greaves Jyoti Structures KEC International Thermax Reco. Sell Neutral Neutral Accum. Neutral Neutral Reduce CMP Tgt. price (`) 865 260 234 143 53 63 487 427 152 456 Upside/ (50.6) 6.4 (6.4) P/BV(x) 7.2 2.5 1.6 2.6 0.7 1.5 3.5 6.3 2.2 1.4 2.3 0.6 1.3 3.0 P/E(x) 97.4 9.1 7.9 21.6 4.4 9.5 13.8 48.6 11.0 8.6 13.2 4.8 6.5 16.0 FY2011-13E 144.2 (2.4) (22.1) (13.3) (5.3) 10.4 (2.6) RoCE (%) 11.4 39.5 13.4 13.7 21.7 17.0 33.3 20.2 26.5 10.1 19.5 18.2 19.0 24.3 RoE (%) 7.6 30.6 21.0 12.5 15.8 23.9 28.5 (`) (Downside) (%) FY12E FY13E FY12E FY13E EPS CAGR FY12E FY13E FY12E FY13E

Source: Company, Angel Research; Note:*December year ending

February 7, 2011

BGR Energy | 3QFY2012 Result Update

Profit & loss account (Consolidated)

Y/E March (` cr) Operating income % chg Total Expenditure Raw Materials Mfg costs Personnel Costs Other Costs EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings 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 FY2009 FY2010 FY2011 FY2012E FY2013E 1,521 93.3 1,365 1,108 142 45 70 155 75.7 10.2 6 150 88.3 9.9 27 7 5.1 130 109.4 130 41 31.7 88 1 87 87 110.8 5.7 12.1 12.1 (68.4) 1,930 27.0 1,721 1,352 172 74 123 209 34.5 10.8 8 201 34.4 10.4 58 32 18.1 175 35.2 175 60 34.0 116 115 115 32.2 6.0 16.0 16.0 32.2 3,073 59.2 2,729 2,187 236 126 180 344 64.8 11.2 10 334 65.8 10.9 54 25 8.2 305 74.2 305 104 34.0 201 201 201 74.4 6.6 28.0 28.0 74.4 4,750 54.5 4,214 3,446 406 145 217 536 55.8 11.3 17 519 55.4 10.9 60 22 4.6 481 57.6 481 158 32.8 323 323 323 60.5 6.8 44.8 44.8 60.1 3,346 (29.6) 2,866 2,347 288 100 130 480 (10.5) 14.3 16 463 (10.7) 13.9 150 10 3.1 323 (32.8) 323 110 32.5 213 213 213 (34.0) 6.4 29.6 29.6 (34.0) 4,170 24.6 3,689 3,042 342 125 179 481 0.3 11.5 22 459 (0.9) 11.0 173 11 3.7 297 (8.1) 297 101 32.5 196 196 196 (8.1) 4.7 27.2 27.2 (8.1)

February 7, 2011

BGR Energy | 3QFY2012 Result Update

Balance sheet (Consolidated)

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 Deferred Tax Asset Current Assets Cash Loans & Advances Inventories Debtors Others Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 73 21 53 1 1 151 1,333 307 266 15 736 9 484 809 1,015 125 27 98 5 1 1 2,569 615 643 14 1,279 18 1,233 1,246 1,350 182 37 145 10 1 1 3,644 902 727 16 1,980 18 1,896 1,515 1,672 251 53 198 86 1 1 5,115 1,045 840 41 3,158 32 2,397 2,364 2,649 776 69 706 86 1 101 5,589 516 1,010 71 3,951 40 1,887 3,384 4,278 2,613 92 2,522 85 1 351 4,547 380 908 78 3,142 40 2,396 1,832 4,790 72 402 474 3 503 36 1,015 72 492 564 3 709 75 1,350 72 634 706 3 807 155 1,672 72 880 952 52 1,337 308 2,649 72 1,009 1,081 52 2,837 308 4,278 72 1,120 1,193 52 3,237 308 4,790 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

February 7, 2011

BGR Energy | 3QFY2012 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation (Inc)/Dec in WC Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec.in Fixed Assets (Inc.)/Dec. in Investments 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 130 6 (213) (7) (41) (126) (36) (151) 7 (180) 61 256 17 219 301 214 93 307 175 8 (129) (32) (60) (38) (62) 151 32 121 206 25 44 181 308 307 615 305 10 18 (25) (104) 205 (65) 25 (40) 98 59 83 39 287 615 902 FY2011 FY2012E FY2013E 481 17 (706) (22) (158) (388) (147) 22 (125) 0.2 530 84 210 446 143 902 1,045 323 16 (1,549) (10) (110) (1,329) (525) (100) 10 (615) 1,500 84 1,416 (529) 1045 516 297 22 1,416 (11) (101) 1,623 (1,837) (250) 11 (2,076) 400 84 316 (137) 516 380

February 7, 2011

BGR Energy | 3QFY2012 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 OB/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 (Pre-tax) 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) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to Equity Net debt to EBITDA Interest Coverage 0.4 1.3 5.6 0.2 0.4 3.5 (0.1) (0.3) 6.2 0.3 0.5 8.6 2.1 4.8 3.1 2.4 5.9 2.7 22.4 5 133 100 95 19.6 3 190 182 107 20.1 2 194 209 74 22.0 2 197 186 74 6.5 6 388 273 228 2.5 7 310 212 189 22.3 38.0 31.4 17.0 31.4 22.3 22.1 44.9 31.7 24.0 45.6 39.0 13.4 18.2 21.0 10.1 12.2 17.3 9.9 68.3 3.8 37.8 25.8 4.9 0.6 38.9 10.4 66.0 3.0 31.2 20.6 6.3 0.3 24.6 10.9 66.0 4.1 44.4 29.3 4.7 0.0 29.3 10.9 67.2 4.0 43.8 29.4 3.8 0.1 32.5 13.9 67.5 1.3 17.6 11.9 4.9 1.3 20.9 11.0 67.5 1.1 11.9 8.0 3.8 2.3 17.6 12.1 12.1 12.9 2.0 65.8 16.0 16.0 17.1 3.0 78.3 28.0 28.0 29.4 7.0 98.1 44.8 44.8 47.2 10.0 131.9 29.6 29.6 31.8 10.0 149.8 27.2 27.2 30.2 10.0 165.3 19.3 18.2 3.6 0.9 1.1 11.2 1.7 2.1 14.6 13.7 3.0 1.3 0.9 8.5 1.3 4.9 8.4 8.0 2.4 3.0 0.5 4.6 1.0 3.3 5.2 5.0 1.8 4.3 0.4 3.8 0.8 1.7 7.9 7.4 1.6 4.3 1.2 8.5 0.9 2.9 8.6 7.7 1.4 4.3 1.1 9.6 1.0 2.7 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

February 7, 2011

10

BGR Energy | 3QFY2012 Result Update

Research Team Tel: 022 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.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

BGR Energy Systems 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%)

February 7, 2011

11