2
4 August 2017
1QFY18 Results Update | Sector: Automobiles
CEAT Ltd
Buy
BSE SENSEX
32,325
S&P CNX
10,066
CMP: INR1,734
TP: INR2,029 (+17%)
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High-cost inventory, destocking impact perf; Pressure likely to ease
Revenue in line; significant miss on EBITDA and PAT:
CEAT reported overall
revenue of INR16,286m (est. of INR15,474m) in 1QFY18, as against
INR16,462m in 1QFY17, marking a decline of 1.1%. EBITDA stood at INR547m
(est. of INR1,486m) v/s INR1,854m in 1QFY17, with the margin at 3.4% (est.
9.6%) v/s 11.3% in 1QFY17 on account of a significant rise in raw material cost
(up to 59% of net sales v/s est. of 51.5% and 50.8% in 1QFY17). Consequently,
adj. PAT for 1QFY18 stood at INR11m (est. of INR679m) v/s INR1,039m in
1QFY17, marking a decline of 99%.
RM basket to soften in 2QFY18:
1QFY18 witnessed a sharp rise in raw material
cost (+820bp YoY and 260bp QoQ). Price of natural rubber increased 30% YoY,
while that of synthetic rubber rose 50% YoY. This, along with realization
disappointment due to competitive pressure, exerted immense burden on
margin. However, average raw material prices have already come down by
~10% in 2QFY18 and should soften further, bringing margins back on track.
Continued focus on passenger segment:
While commercial segment volumes
declined ~5%, passenger segment witnessed growth of less than 5% in
volumes. However, we expect passenger volumes to grow further on account
of continued initiatives and platform roll-outs (viz., launch of puncture-less
tires and Innova range to provide best mileage).
Valuation and view:
We expect recovery going forward on account of better
volume growth, softening of raw material prices and a recovery in market post
the GST transitional phase. We expect revenue/PAT CAGR of 8%/17% over
FY17-19E. We value the company at a P/E of 16x FY19E EPS, and maintain
Buy
with a target price of INR2,029 (17% upside).
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, (INR m)
Free float (%)
CEAT IN
40.5
76.9/ 1.2
1948 / 836
-10/31/86
1467
49.2
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
Sales
64.4
69.9
75.3
EBITDA
6.6
7.3
9.0
NP
3.8
3.8
5.1
EPS (INR)
93.3
94.2 126.8
EPS Gr. (%)
-16.9
1.0
34.5
BV/Sh. (INR)
597.0 678.8 788.8
RoE (%)
16.9
14.8
17.3
RoCE (%)
13.5
12.2
14.7
P/E (x)
18.6
18.4
13.7
P/BV (x)
2.9
2.6
2.2
Estimate change
TP change
Rating change
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Niket Shah – Research Analyst
(Niket.Shah@MotilalOswal.com); +91 22 3982 5426
Aksh Vashishth – Research Analyst
(Aksh.Vashishth@MotilalOswal.com); +91 22 6129 1553

CEAT Ltd
Revenue in-line; significant miss on EBITDA and PAT
CEAT reported overall revenue of INR16,286m (est. INR15,474m) in 1QFY18 as
compared to INR16,462m in 1QFY17, marking a YoY de-growth of 1.1%.
EBITDA stood at INR547m (est. INR1,486m) in 1QFY18 as against INR1,854m in
1QFY17.
EBITDA margins stood at 3.4% (est. 9.6%) in 1QFY18 as compared to 11.3% in
1QFY17 on account of significant rise in raw material cost which increased to
59% of net sales (est. 51.5%) in 1QFY18 as compared to 50.8% in 1QFY17.
Consequently, Adj. PAT for 1QFY18 stood at INR11m (est. INR679m) as
compared to INR1,039m in 1QFY17, a decline of 99% YoY.
The replacement market witnessed volume decline because of destocking by
channel partners, exports declined because of import barriers in Indonesia and
commercial segment took a hit on account of shift from BSIII to BSIV norms.
Exhibit 2: Gross margin trend
Growth YoY %
4% 5%
5%
1%
-1%
41%
Gross Profit (INR b)
Gross Margin %
50% 51% 50% 49% 49% 47%
46% 47% 48%
44%
44%
Exhibit 1: Revenue trend
11%
Revenue (INR b)
8%
2%
-1%
-2%
-4%
-1%
-4%
41%
16.1 15.8 15.5 16.3 15.8 15.2 15.4 15.6 16.5 16.0 15.6 16.4 16.3
6.6 7.0 7.1 7.7 7.6 7.6 7.9 7.8 8.1 7.8 7.4 7.2 6.7
Source: MOSL, Company
Source: MOSL, Company
Exhibit 3: EBITDA trend
EBITDA (INR b)
Margin %
13.6%
13.1%
11.9%
11.8%
11.6%
12.1%
11.0%
11.1%
11.3%
9.9%
8.4%
8.1%
3.4%
1.4 1.8 1.8 1.8 2.2 1.8 2.0 1.9 1.9 1.9 1.5 1.3 0.5
Exhibit 4: PAT trend
PAT (INR m)
Growth %
Source: MOSL, Company
Source: MOSL, Company
Conference call takeaways:
The quarter witnessed volume impact on account of destocking and margin
impact because of a significant rise in raw material prices.
The company expects recovery going forward on account of better volume
growth, restocking post GST and raw material prices softening.
The company mitigated the impact of higher raw material prices by cutting
down of discretionary other expenses by 2.6% YoY.
The dealers destocked by ~50-60%; however, there was no significant impact
observed on retail end or direct consumer end.
2
4 August 2017

CEAT Ltd
Anti-dumping duty on Chinese truck radial tires to have 9-15% impact on prices,
which would put pressure on Chinese imports, allowing domestic players to
expand their market share.
The company witnessed growth of 70-80% in the new range of TBR launched in
September 2016, and expects further room of 10-15% growth at current
capacity.
Exhibit 6: New OEM entries
Exhibit 5: New products launched
Source: MOSL, Company
Source: MOSL, Company
Valuation and view
We expect recovery going forward on account of better volume growth, raw
material prices softening and recovery in market post GST transitional phase.
Additionally, the anti-dumping duty on Chinese truck radial tires is expected to allow
domestic players to expand their market share. We therefore expect revenue/PAT
CAGR of 8%/17% over FY17-19E. We value the company at a P/E of 16x FY19E EPS,
and maintain Buy rating with Target Price of INR2,029 (17% upside).
Exhibit 7: Price to earnings (one year forward)
Exhibit 8: Price to book (one year forward)
Source: MOSL, Company
Source: MOSL, Company
4 August 2017
3

CEAT Ltd
Story in charts
Exhibit 9: Revenues to post 8% CAGR over FY17-19
Revenue(INR m)
10.4
4.1
0.5
Growth(%)
8.6
1.0
7.7
8.4
Exhibit 10: With increasing 2W and 4W contribution (%
share)
T&B
9
17
14
14
46
10
22
13
13
42
Speciality/Farm
11
27
13
11
38
12
30
13
10
35
LCV
13
33
13
10
31
2W/3W
14
35
12
10
29
PCR
14
37
12
10
26
60,960
63,436
63,765
64,413
69,946
75,341
81,686
Source: MOSL, Company
Source: MOSL, Company
Exhibit 11: EBITDA to post 17% CAGR over FY17-19
EBITDA(INR m)
12.9
10.8
10.7
10.2
Margin(%)
10.4
12.0
12.7
Exhibit 12: PAT to post 17% CAGR over FY17-19
98.3
PAT(INR m)
41.4
15.6
(16.9)
1.0
Growth(%)
34.5
14.7
6,579
6,804
8,223
6,567
7,253
9,041
10,374
2,780
3,213
4,544
3,775
3,812
5,129
5,883
Source: MOSL, Company
Source: MOSL, Company
Exhibit 13: Continues to reduce debt
Net Debt(INR m)
1.0
Net Debt/Equity(x)
Exhibit 14: Return ratios to remain healthy
30.6
19.5
RoE(%)
19.9
13.5
23.7
24.3
16.9
17.3
17.1
RoCE(%)
14.7
16.1
17.4
0.2
0.3
0.3
12.2
0.2
0.1
2,870
0.0
560
10,059
3,390
5,228
6,429
4,194
14.8
Source: MOSL, Company
Source: MOSL, Company
4 August 2017
4

CEAT Ltd
Financials and Valuations
Consolidated - Income Statement
Y/E Mar (INR m)
Total Income from Operations
Change (%)
Raw Materials
Employees Cost
Power & Fuel
Freight & Delivery Charges
Advertisement Expenses
Excise Duty
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest/Share of (profit) from JV
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
2014
60,960
10.4
35,657
3,109
1,808
1,994
754
5,420
5,639
54,381
89.2
6,579
10.8
865
5,713
1,720
140
4,133
-100
4,032
1,324
32.8
-4
2,712
2,780
98.3
4.6
FY14
360
0
0
9,927
10,286
363
11,738
1,148
23,535
23,041
7,617
15,424
227
823
0
18,927
7,536
7,545
1,679
2,167
11,865
6,888
3,949
1,028
7,061
23,535
2015
63,436
4.1
35,333
3,789
1,734
2,385
1,042
5,915
6,435
56,632
89.3
6,804
10.7
934
5,870
1,319
226
4,777
-61
4,716
1,576
33.4
-33
3,172
3,213
15.6
5.1
FY15
405
0
0
16,418
16,823
327
7,750
1,250
26,149
24,183
8,590
15,593
215
2,290
3,124
17,002
6,801
7,050
1,236
1,914
12,075
6,583
4,059
1,434
4,927
26,149
2016
63,765
0.5
31,689
4,088
1,643
2,609
1,185
6,624
7,704
55,542
87.1
8,223
12.9
1,075
7,148
907
299
6,539
-114
6,425
1,978
30.8
-18
4,465
4,544
41.4
7.1
FY16
405
0
0
20,241
20,645
322
6,704
1,567
29,239
30,395
9,412
20,984
205
3,043
403
16,747
6,621
6,188
1,073
2,866
12,143
6,435
4,511
1,197
4,604
29,239
2017
64,413
1.0
33,998
4,063
1,610
2,577
1,224
6,748
7,626
57,845
89.8
6,567
10.2
1,431
5,137
817
186
4,506
133
4,639
1,064
22.9
-303
3,878
3,775
-16.9
5.9
FY17E
405
0
0
23,745
24,150
292
9,104
2,134
35,679
35,438
10,843
24,595
0
3,193
2,316
19,749
9,435
6,138
359
3,818
14,175
7,737
5,537
902
5,574
35,678
2018E
69,946
8.6
36,673
4,407
1,749
2,798
1,399
7,274
8,394
62,693
89.6
7,253
10.4
1,498
5,756
973
219
5,003
0
5,003
1,540
30.8
-350
3,812
3,812
1.0
5.5
FY18E
405
0
0
27,052
27,456
292
7,104
2,134
36,986
39,438
12,340
27,098
0
3,193
2,316
19,618
8,245
7,282
594
3,497
15,239
8,245
5,596
1,399
4,379
36,985
FY19E
75,341
7.7
38,575
4,746
1,959
3,014
1,507
7,835
8,664
66,300
88.0
9,041
12.0
1,668
7,373
739
241
6,876
0
6,876
2,117
30.8
-370
5,129
5,129
34.5
6.8
FY19E
405
0
0
31,501
31,905
292
5,204
2,134
39,534
43,938
14,008
29,930
0
3,193
2,316
20,348
8,719
7,844
18
3,767
16,253
8,719
6,027
1,507
4,095
39,534
(INR Million)
FY20E
81,686
8.4
41,660
5,065
2,124
3,267
1,634
8,332
9,231
71,312
87.3
10,374
12.7
1,764
8,610
493
383
8,500
0
8,500
2,617
30.8
0
5,883
5,883
14.7
7.2
(INR Million)
FY20E
405
0
0
36,604
37,008
292
3,004
2,134
42,438
48,892
15,771
33,121
0
3,039
2,316
21,509
8,792
8,504
128
4,084
17,547
9,378
6,535
1,634
3,962
42,437
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Eq. Share Warrants & App. Money
Preference Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
4 August 2017
5

CEAT Ltd
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Net Debt/Equity
2014
68.7
90.1
254.3
9.1
15.8
2015
79.4
102.5
415.9
10.0
14.3
21.8
16.9
4.2
1.2
11.3
0.6
23.7
17.4
19.3
2.4
39
41
38
0.2
2016
112.3
138.9
510.4
11.5
12.0
15.4
12.5
3.4
1.2
9.2
0.7
24.3
19.9
22.4
2.2
38
35
37
0.3
2017
93.3
128.7
597.0
9.8
12.3
18.6
13.5
2.9
1.2
12.0
0.6
16.9
13.5
14.5
1.8
53
35
44
0.3
2018E
94.2
131.3
678.8
10.4
13.3
18.4
13.2
2.6
1.1
10.6
0.6
14.8
12.2
13.1
1.9
43
38
43
0.2
FY19E
126.8
168.0
788.8
13.9
13.3
13.7
10.3
2.2
1.0
8.3
0.8
17.3
14.7
15.7
1.9
42
38
42
0.1
FY20E
145.4
189.0
914.9
16.0
13.3
11.9
9.2
1.9
0.9
7.0
0.9
17.1
16.1
16.8
1.9
39
38
42
0.0
(INR Million)
FY20E
8,500
1,764
110
-2,617
243
7,999
0
7,999
-4,800
3,199
0
383
-4,417
0
-2,200
-493
-780
0
-3,472
110
18
128
0.5
30.6
19.5
19.9
2.6
45
45
41
1.0
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY14
4,032
865
1,720
-891
-3,736
1,991
-23
1,968
-1,446
523
370
57
-1,018
109
1,387
-1,723
-167
2
-392
558
1,121
1,679
FY15
4,716
934
1,319
-1,123
1,714
7,560
-73
7,487
-2,999
4,488
0
-2,990
-5,989
3,934
-3,994
-1,476
-404
0
-1,940
-442
1,679
1,237
FY16
6,425
1,075
907
-1,822
332
6,918
-56
6,862
-7,054
-192
-1
2,929
-4,127
0
-927
-979
-994
0
-2,899
-164
1,237
1,072
FY17E
4,506
1,431
631
-1,064
-1,684
3,819
774
4,593
-4,988
-394
-1,913
186
-6,714
0
2,400
-817
-479
303
1,407
-713
1,072
359
FY18E
5,003
1,498
753
-1,540
1,431
7,144
0
7,144
-4,000
3,144
0
219
-3,781
0
-2,000
-973
-505
350
-3,128
235
359
594
FY19E
6,876
1,668
497
-2,117
-292
6,632
0
6,632
-4,500
2,132
0
241
-4,259
0
-1,900
-739
-680
370
-2,948
-576
594
18
4 August 2017
6

CEAT Ltd
Corporate profile
Company description
Exhibit 1: Sensex rebased
CEAT, a flagship company of the RPG Group, is the
fourth largest tyre manufacturer in India in terms of
revenue (~12% market share). With manufacturing
facilities at Bhandup (bias tyres), Nashik (bias and
radial), Halol (radial) and Nagpur (2W/3Ws), the
company’s capacity stands at >900MT/day (95,000
tyres/day). It operates in India via a robust distribution
network of 4,500+ dealers, 33 regional offices, 400+
franchisees, 6 manufacturing facilities and 250+
distributors.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Jun-17
Promoter
DII
FII
Others
50.8
8.2
25.3
15.7
Mar-17
50.8
7.5
23.9
17.8
Jun-16
50.8
5.2
26.1
17.9
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Jwalamukhi Investments Holdings
Amansa Holdings Private Limited
Westbridge Crossover Fund, LLC
Mirae Assets Emerging Bluechip fund ( )
% Holding
8.0
3.6
3.5
3.0
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
H V Goenka
Anant Vardhan Goenka
Hari L Mundra
Shruti Joshi
Designation
Chairman
Managing Director
Director
Company Secretary
Exhibit 5: Directors
Name
H V Goenka
Anant Vardhan Goenka
Hari L Mundra
Arnab M Banerjee
Atul C Choksey *
H Khaitan *
Source: Capitaline
Name
Mahesh S Gupta *
Paras K Chowdhary *
Punita Lal *
Ranjit V Pandit *
S Doreswamy *
Vinay Bansal *
*Independent
Exhibit 6: Auditors
Name
D C Dave & Co
KPMG
Parikh & Associates
S R B C & Co LLP
Internal
Secretarial Audit
Statutory
Source: Capitaline
Type
Cost Auditor
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
FY20
MOSL
forecast
94.2
126.8
145.4
Consensus
forecast
107.4
139.2
135.3
Variation (%)
-12.3
-8.9
7.5
Source: Bloomberg
4 August 2017
7

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities
in the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities
and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other
potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned
in the research report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject
company in the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a
Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment
banking with companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report.
Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted
to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are
considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such
information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to
change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for
the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly
or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
CEAT Ltd
Disclosure of Interest Statement
Analyst ownership of the stock
CEAT
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement
with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to
SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting
Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL
is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning
agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is
a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined
in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the
following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other
person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or
solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy
is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their
own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make
such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its
own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options,
another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy,
completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be
treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may
be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent
in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this
report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed
therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any
purpose. This report is not directed 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, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be
eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its
directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with
the use of the information.
The person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to
hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be
suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers
wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
4 August 2017
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