Sector Update |
Update | Financials
Sector
25 October 2017
Financials - Banks
Technology
Particulars
Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of
Maharashtra
Canara Bank
Central Bank Of
India
Corporation
Bank
Dena Bank
IDBI Bank Ltd.
Indian Bank
Indian
Overseas Bank
Oriental Bank
Of Commerce
Punjab & Sind
Bank
Punjab
National Bank
State Bank Of
India
Syndicate Bank
UCO Bank
Union Bank Of
India
United Bank of
India
Vijaya Bank
Total
O/s
PCR
(%)
39
43
58
52
38
35
45
32
40
41
46
43
39
33
40
43
40
52
44
40
30
43
Revised
PCR (%)
57
61
76
71
56
54
63
50
58
60
64
62
58
51
59
61
58
71
63
59
48
62
Government announces big bang capital infusion plan for PSBs
Too big to fail!
In an unexpected development (more because of the quantum) the government has
announced a PSU Bank recapitalization plan amounting to INR2.1t (48% of PSU
banks’ current market cap). This will comprise - (i) front-ended capital infusion of
INR1.35t to be funded via recapitalization bonds and (ii) INR760b of capital infusion
from budgetary support and proposed capital raisings by the PSU banks, of which
INR180b will be infused this year as part of the ‘Indradhanush’ plan.
The government will allocate funds to the banks after analyzing their performance,
size and capital requirements. While the details on the recapitalization bonds are yet
to be announced, we believe that this move will help address the perennial capital
constraints facing the PSU banks and also enable these banks to make the required
provisions, thereby expediting the NPL resolution process.
Of the total allocation of INR2.1t, we believe that INR750-800b will go toward
meeting the Basel III capital requirements and supporting business growth, while the
remaining ~INR1.3t can be utilized to make higher provisions. The government intent
to clean up the banks and kick-start the lending process appears very strong, and
thus, we believe that the recapitalization/clean-up initiative would remain a
recurring theme over the next few quarters. Against this backdrop, we turn
constructive on PSU banks, and will soon review our estimates/target prices.
We believe that the banks that are short on capital and have higher quantum of bad
loans stand to benefit more. We reiterate our Buy rating on PNB, SBIN and BOB.
Balance sheet clean-up to account for higher share of infusion at ~60%
We have assessed the individual bank's capital requirement in order to comply
with Basel-III regulations as we believe this is going to be foremost important. We
have then attempted to model the remaining capital allocation to respective banks
taking into account their outstanding bad loans. We believe that the requirement
towards Basel-III compliance will be relatively lower while balance sheet clean-up
will consume ~60% of proposed allocation.
Provisioning coverage to improve ~1900bp to 62%
On the basis of our modelled capital allocation (described above) we estimate that
provisioning coverage ratio of the banks will improve sharply as they begin
cleansing their bad loans. We thus estimate coverage ratio for PSU banks to
improve to an average level of 62% vs 43% currently. This will have a positive
impact on ABVs and we estimate FY18E/19E ABVs to improve by 13%/10%
respectively on completion of this exercise.
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 3982 5540 |
Anirvan Sarkar
(Anirvan.Sarkar@MotilalOswal.com); +91 22 3982 5505
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415
| Piran Engineer
(Piran.Engineer@MotilalOswal.com); +91 22 3980 4393
25 October 2017
are advised to refer through important disclosures made at the last page of the Research Report.
1
Investors
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Sector Update | Financials
Government shareholding in PSU banks will increase between 6% to 29%
The capital infusion in PSU banks both by way of recapitalization bonds and direct
equity infusion will go on to further increase government stake in PSU banks. Our
analysis indicates that government ownership will increase by 6% to 29% across
PSU banks with increase being the maximum for Oriental Bank of Commerce taking
its government ownership to 87%. Government has suggested that banks also
need to raise equity capital on their own either by issuing new shares or by
divesting from non-core assets. Towards this the government has already signed
the MoU with 11 PSBs (mainly weak/asset rich PSBs) allowing them to divest their
non-core assets
Loan growth to recover in medium term; Bond-yields may edge higher
PSU bank's current loan growth has been ranging between -22% to 10% (details
inside) and we expect it to revive over medium term as preoccupation with asset
quality takes a back seat while stronger capital levels allows them to pursue
growth opportunities. The government intends to give a strong push to
MSMEs/SMEs in order to boost job creation and we expect PSU banks to start
focusing on this segment. Alongside we expect bond-yields to also edge higher as
excess liquidity in the banking system gets deployed into these recapitalization
bonds. We thus expect funding cost for wholesale funding entities to increase
slightly while higher competition as PSU banks makes a comeback may further
impact business growth/profitability.
Divestment of non-core assets to gain momentum over FY18/19E
We note that collectively the PSBs divested assets worth ~Rs60bn over past one
year. We expect significant pick-up in divestment of non-core assets over
FY18/FY19 (for details please see inside). Our analysis indicates that if the banks
are to completely divest from all their non-core activities they would be able to
raise INR1.06t while in case of a partial divestment we estimate banks to raise
Rs506bn. Here in we note that SBIN, IDBI, PNB, CBK, OBC, and ANDB are having
higher quantum of non-core assets and can thus benefit significantly from this
disinvestment initiative.
Expect positive impact on private banks too
We believe that cohesive balance sheet clean up by PSU banks will help address
issues that the banking system as a whole faces while resolving any large
consortium account. Such a massive system wide clean-up will thus enable banks
to arrive at a consensus and thus expedite the resolution process. We thus believe
that private corporate banks like ICICIBC and AXSB will also stand to benefit from
this development, where former in particular has higher quantum of concentrated
exposure.
Strong capitalization plan - Too big to fail!
We are positively surprised with the announcement and more so with the
quantum of capital infusion that government has announced. Taking note of the
outstanding GNPLs of PSU banks at Rs7.3tn (exhibit 4) we believe that the
proposed capital allocation over FY18/19E (largely front ended) will take care of
25 October 2017
2

Sector Update | Financials
both the capital requirements and help restore asset quality of PSU banks (~62%
projected coverage ratio vs 43% currently). In medium term, we believe that as
financial performance of PSU bank improves and investor interest revives
(significantly lower on FII/institutional ownership) these banks will be able to raise
capital directly from the market and will thus pre-empt further dilution in book
value, at least to some extent.
We turn constructive on PSU banks and will soon review our estimates/PT. We
believe that banks which are short on capital and having higher quantum of bad
loans will stand to benefit more. We reiterate our BUY rating on PNB, SBIN &
BOB.
Exhibit 1:
Estimate of growth capital vs clean-up capital
Particulars (INR b)
Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of Maharashtra
Canara Bank
Central Bank Of India
Corporation Bank
Dena Bank
IDBI Bank Ltd.
Indian Bank
Indian Overseas Bank
Oriental Bank Of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank Of India
Syndicate Bank
UCO Bank
Union Bank Of India
United Bank of India
Vijaya Bank
Tier-I
RWA
Tier-I
Tier-I
projected projected projected (%) required (%)
139
154
449
325
79
355
130
144
66
186
188
99
150
54
442
2371
171
76
276
68
106
1,791
1,933
4,762
3,939
1,145
3,974
2,031
1,780
829
2,838
1,739
1,823
2,107
605
6,039
23,461
1,932
1,176
3,775
849
1,147
Capital
shortfall
31
30
3
49
30
22
63
25
12
84
0
74
50
3
132
0
12
36
83
13
3
Current
Tier-I (%)
Capital for
Capital
Total
business allocation Capital to
growth for clean up be infused
31
30
3
49
30
22
63
25
12
84
0
74
50
3
132
0
12
36
83
13
3
39
36
85
94
33
70
58
40
24
93
18
65
45
12
107
347
37
46
69
22
13
70
66
88
143
63
92
121
65
36
176
18
140
95
16
238
347
50
82
151
35
16
7.7%
8.0%
9.4%
8.3%
6.9%
8.9%
6.4%
8.1%
8.0%
6.6%
10.8%
5.4%
7.1%
9.0%
7.3%
10.1%
8.9%
6.4%
7.3%
8.0%
9.2%
8.7%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
10.1%
9.5%
9.5%
9.5%
9.5%
9.5%
8.5%
9.2%
9.9%
8.9%
9.0%
9.8%
8.6%
8.9%
9.1%
7.8%
12.2%
8.2%
8.9%
9.1%
8.9%
10.4%
9.3%
8.3%
9.0%
8.9%
10.0%
Total
6,028
69,674
756
756
1,354
2,110
Source: Company, MOSL
25 October 2017
3

Sector Update | Financials
Exhibit 2:
Estimate of increase in government share-holding post capital infusion
Particulars
CMP
(INR)
69
59
143
140
25
317
79
39
28
54
270
22
119
46
150
255
72
30
131
18
61
O/s
shares
(m)
744
681
2,304
1,055
1,168
597
1,902
1,147
787
2,071
480
2,455
346
400
2,128
8,632
905
1,560
687
1,394
999
New shares Current
to be issued govt.
(m)
holding
1,025
66%
1,120
61%
618
59%
1,024
74%
2,498
82%
290
66%
1,530
81%
1,661
71%
1,294
3,248
66
6,229
803
337
1,590
1,365
686
2,724
1,153
1,984
259
69%
74%
82%
80%
58%
80%
65%
58%
73%
77%
63%
85%
70%
Current
Revised
Revised
Revised Increase in
shares held shares held total o/s govt. stake govt. stake
by govt by govt (m) shares
490
1,516
1,769
86%
20%
417
1,537
1,801
85%
24%
1,365
1,983
2,922
68%
9%
778
1,802
2,079
87%
13%
953
3,451
3,666
94%
13%
396
686
887
77%
11%
1,546
3,076
3,432
90%
8%
812
2,472
2,808
88%
17%
540
1,532
394
1,953
202
319
1,383
5,004
660
1,196
436
1,188
702
1,834
4,779
460
8,182
1,005
656
2,973
6,369
1,345
3,920
1,589
3,173
961
2,081
5,318
546
8,684
1,150
737
3,718
9,997
1,590
4,284
1,840
3,379
1,257
88%
90%
84%
94%
87%
89%
80%
64%
85%
92%
86%
94%
76%
20%
16%
2%
15%
29%
9%
15%
6%
12%
15%
23%
9%
6%
Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of Maharashtra
Canara Bank
Central Bank Of India
Corporation Bank
Dena Bank
IDBI Bank Ltd.
Indian Bank
Indian Overseas Bank
Oriental Bank Of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank Of India
Syndicate Bank
UCO Bank
Union Bank Of India
United Bank of India
Vijaya Bank
Source: Company, MOSL
Exhibit 3:
Estimated increase in PCR from capital infusion
Particulars
Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of Maharashtra
Canara Bank
Central Bank Of India
Corporation Bank
Dena Bank
IDBI Bank Ltd.
Indian Bank
Indian Overseas Bank
Oriental Bank Of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank Of India
Syndicate Bank
UCO Bank
Union Bank Of India
United Bank of India
Vijaya Bank
GNPL
(INRb)
210
194
462
510
180
377
314
217
130
502
97
355
244
67
577
1,881
202
251
373
122
68
NNPL
(INRb)
129
111
195
244
113
243
174
149
78
296
52
202
148
45
346
1,078
122
120
208
73
48
O/s
PCR
39%
43%
58%
52%
38%
35%
45%
32%
40%
41%
46%
43%
39%
33%
40%
43%
40%
52%
44%
40%
30%
Share in PSU
Capital allocation Revised PCR
Banks’ GNPL (%) for clean-up (INRb)
(%)
3%
39
57%
3%
36
61%
6%
85
76%
7%
94
71%
2%
33
56%
5%
70
54%
4%
58
63%
3%
40
50%
2%
24
58%
7%
93
60%
1%
18
64%
5%
65
62%
3%
45
58%
1%
12
51%
8%
107
59%
26%
347
61%
3%
37
58%
3%
46
71%
5%
69
63%
2%
22
59%
1%
13
48%
Total
7,331
4,172
43%
100%
1,354
62%
Source: Company, MOSL
25 October 2017
4

Sector Update | Financials
Exhibit 4:
FY18E ABV increases by 6% - 31% post completion of capital infusion exercise
Bank
Bank Of Baroda
Bank Of India
Canara Bank
Punjab National Bank
State Bank Of India
Union Bank Of India
BV
FY18E
168
243
477
185
233
312
FY19E
183
245
522
202
245
336
113
110
251
87
160
116
ABV
FY18E
FY19E
143
148
309
124
182
155
Revised ABV
FY18E
119
125
273
114
173
126
FY19E
150
164
332
153
196
165
% chg. in ABV
FY18E
6%
14%
9%
31%
8%
8%
FY19E
5%
11%
7%
23%
8%
6%
Exhibit 5:
YoY loan growth across PSU banks has been very subdued
Bank
State Bank of India
Punjab National Bank
Bank of Baroda
Oriental Bank of Commerce
Allahabad Bank
IDBI
Central Bank of India
Corporation Bank
Indian Overseas Bank
Bank of India
Union Bank of India
Andhra Bank
Indian Bank
Punjab & Sind Bank
United Bank of India
UCO Bank
Bank of Maharashtra
Syndicate Bank
Dena Bank
Canara Bank
Vijaya Bank
1QFY18 YoY
growth (%)
0.3
2.1
4.1
9.5
-2.5
-13.9
-7.3
0.0
-0.1
0.0
8.4
6.9
4.2
2.9
0.0
-4.1
-5.9
-3.0
-22.0
8.4
3.5
Exhibit 6:
RBI has invoked PCA on 7 banks
Particulars
Asset quality
ratio (%) as on FY17
GNPL
IDBI Bank
UCO Bank
Dena Bank
Central Bank of India
Bank Of Maharashtra
Indian Overseas Bank
Oriental Bank of Commerce
21.3%
17.1%
16.3%
17.8%
13.8%
22.4%
13.7%
NNPL
13.2%
8.9%
10.7%
10.2%
9.0%
14.0%
9.0%
FY15
0.3%
0.5%
0.2%
0.2%
0.3%
-0.2%
0.2%
ROA
FY16
-1.0%
-1.1%
-1.0%
-0.5%
0.1%
-1.1%
0.1%
FY17
-1.4%
-0.8%
-0.7%
-0.8%
-0.9%
-1.2%
-0.5%
Source: Company, MOSL
25 October 2017
5

Sector Update | Financials
Exhibit 7:
Snapshot of non-core assets held by major PSU banks and their current capital position
Total
As of FY17 (%)
Mkt Cap
Non-Core Inv.
Bank
Non-Core
Major holding
(INR b)
As % of MCap
CET 1
Tier 1
Inv.
SBIN
2,197
619
28%
9.8
10.4
SBI Life, SBI General, NSE, IL&FS, UTI MF
IDBI
128
68
53%
5.6
7.8
SIDBI, NSE, NSDL, IDBI Federal
PNB
294
136
46%
7.9
8.9
UTI, PNB Metlife, SIDBI
CBK
189
69
36%
8.9
9.8
Can Fin Homes, Canara HSBC life
BOB
330
41
12%
9.0
9.9
UTI, SIDBI, IndiaFirst Life Insurance
BOI
166
24
14%
7.2
8.9
CIBIL, SIDBI, Star Union Dai-ichi
CBOI
151
16
11%
8.6
8.6
SIDBI, IL&FS
OBC
41
19
46%
7.6
8.9
Canara HSBC OBC Life Insurance, SIDBI
UNBK
95
19
20%
7.7
9.0
SIDBI, CIBIL, Star Union Dai-ichi
ANDB
51
16
31%
7.7
9.2
IndiaFirst Life Insurance, CORDEX
ALBK
55
6
11%
8.2
8.5
Universal Sompo General Insurance, SIDBI
IOB
64
10
16%
7.6
8.2
CORDEX, Universal Sompo General Insurance
CRPBK
45
4
9%
8.0
8.9
National Collateral Mgmt
SNDB
65
4
6%
7.5
9.3
CORDEX
DNBK
32
2
6%
9.1
Agricultural Finance Corp. Ltd.
UCO
56
3
5%
7.6
8.3
PARAS, Agricultural Finance Corp. Ltd.
INBK
130
1
1%
0.4
11.8
STCI, Agricultural Finance Corp. Ltd.
VJBK
69
2
3%
1.5
10.0
CORDEX
Total
1,059
Source: MOSL, RBI
Exhibit 8:
Bank-wise investment distribution in different asset classes
Exchanges
Mutual Funds Insurance Rating Agenices
Stake (%)
BSE
NSE
UTI
Others
ICRA
CARE
State Bank of India
Punjab National Bank
Band of Baroda
Oriental Bank of Commerce
Allahabad Bank
IDBI
Central Bank
Corporation Bank
Indian Overseas Bank
Bank of India
Union Bank of India
Andhra Bank
Indian Bank
Punjab & Sind Bank
United Bank of India
Karur Vysya Bank
South Indian Bank
Federal Bank
Karnataka Bank
UCO Bank
Bank of Maharashtra
Syndicate Bank
Dena Bank
Canara Bank
Vijaya Bank
ARCs
Others
STCI IL&FS
Source: MOSL, Bloomberg, Company
25 October 2017
6

Sector Update | Financials
Exhibit 9:
We have assumed part divestment of non-core assets - our base case
INRb
State Bank of India
Punjab National Bank
Bank of Baroda
Oriental Bank of Commerce
Allahabad Bank
IDBI
Central Bank of India
Corporation Bank
Indian Overseas Bank
Bank of India
Union Bank of India
Andhra Bank
Indian Bank
Punjab & Sind Bank
United Bank of India
Karur Vysya Bank
South Indian Bank
Federal Bank
Karnataka Bank
UCO Bank
Bank of Maharashtra
Syndicate Bank
Dena Bank
Canara Bank
Vijaya Bank
Total
Capital
release
225
58
29
19
3
52
16
4
10
12
18
5
1
1
0
0
0
11
1
3
1
4
2
32
69
506
Mkt
Cap
2,197
294
41
41
55
128
151
45
64
166
95
51
130
19
28
73
58
244
45
56
32
65
32
189
Net-worth
1,883
417
403
141
143
277
175
127
137
331
234
114
172
61
77
50
49
89
51
128
74
142
77
337
Capital release as % of
Estimated
capital
Capital
requirement requirement Mkt Cap Networth
237
191
20
30
110
64
46
69
35
71
31
5
30
6
9
34
28
77
23
79
1,195
95%
30%
95%
9%
47%
25%
9%
14%
34%
25%
15%
22%
0%
4%
6%
8%
5%
5%
8%
40%
42%
Source: MOSL, RBI
10%
20%
70%
46%
5%
40%
11%
9%
15%
7%
18%
9%
1%
6%
0%
1%
0%
4%
1%
5%
4%
6%
6%
17%
12%
14%
7%
13%
2%
19%
9%
3%
7%
4%
8%
4%
0%
2%
0%
1%
1%
12%
1%
2%
2%
3%
2%
9%
Key assumptions for Case II
(i) Banks with >60% holding in non-core assets would divest their stake to 51%,
(ii) Banks with holding ~50% would divest to 26%, and,
(iii) Banks with holding of ~26% would completely exit non-core investments
Exhibit 10:
Regulatory Capital Requirements
Particulars
1
2
3
4
5
6
7
8
Minimum CET 1 Ratio
Capital Conservation Buffer (Comprised of Common Equity)
Minimum CET 1 Ratio + CCB(1+2)
AT1 Capital
Minimum Tier 1 Capital Ratio (1+4)
Tier 2 Capital
Minimum Total Capital Ratio (5+6)
Minimum Total Capital Ratio + Capital Conservation Buffer (7+2)
As % to RWA's
5.5
2.5
8
1.5
7
2
9
11.5
Source: Company, MOSL
25 October 2017
7

Sector Update | Financials
Exhibit 11:
Transitional Arrangements Schedule Commercial Banks
Minimum Capital Ratios
Minimum CET 1
Capital Conservation Buffer
Minimum CET 1 + CCB
Minimum Tier 1 Capital
Minimum Total Capital
Minimum Total Capital + CCB
Phase in off deduction from CET 1 (in %)
FY13
4.5
0.0
4.5
6.0
9.0
9.0
20
FY14
5.0
0.0
5.0
6.5
9.0
9.0
40
FY15
5.5
0.0
5.5
7.0
9.0
9.0
60
FY16
5.5
0.7
6.1
7.0
9.0
9.6
80
FY17
5.5
1.3
6.8
7.0
9.0
10.3
100
FY18
FY19
5.5
5.5
1.9
2.5
7.4
8
7.0
7.0
9.0
9.0
10.9
11.5
100
100
Source: Company, MOSL
Exhibit 12:
Minimum Capital Conservation
standards for individual Banks
CET 1 Ratio after including
current periods Earnings
5.5% - 6.125%
>6.125% - 6.75%
>6.75% - 7.375%
>7.375% -8.0%
>8.0%
Minimum Capital
Conservation Ratios
expressed as a % of
earnings
100%
80%
60%
40%
0%
Source: Company, MOSL
Exhibit 13:
Individual Bank minimum Capital Conservation ratios
assuming a requirement of 2.5% each of capital Conservation buffer and
CCB
CET 1 Ratio bands
>5.5% - 6.75%
>6.75% - 8.0%
>8.0% - 9.25%
>9.25% -10.50%
>10.50%
Minimum Capital Conservation
Ratios expressed as a % of earnings
100%
80%
60%
40%
0%
Source: Company, MOSL
Exhibit 14:
Individual Bank minimum Capital Conservation standards, when a bank is
subject to a 2.5% CCB and 1% CCB
CET 1 Ratio bands
>5.5% - 6.375% ^
>6.375% - 7.25%
>7.25% - 8.125%
>8.125% -9.00%
>9.00%
^ (6.375= 5.50+0.625+0.250)
Minimum Capital Conservation
Ratios expressed as a % of earnings
100%
80%
60%
40%
0%
Source: Company, MOSL
25 October 2017
8

Sector Update | Financials
NOTES
25 October 2017
9

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
Sector
(MOFSL). MOFSL is a listed
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd.
Update | Financials
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.
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
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
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