31 October 2017
2QFY18 Results Update | Sector: Healthcare
Strides Shasun
Buy
BSE SENSEX
33,213
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
10,335
STR IN
89.5
73.9 / 1.2
1259 / 803
-13/-31/-40
423
68.9
CMP: INR827
TP: INR1,201(+45%)
Gradual sequential improvement in operating performance
Strides Shasun’s (STR) 2QFY18 sales of INR10b were better than our estimate of
INR8.9b. EBITDA margin of 13.2% missed our estimate of 14.5%. Adjusted PAT of
INR253m too was lower than our estimate of INR439m.
Regulated market and branded generics drive sales growth:
Sales grew 4.4%
YoY (+18.2% QoQ) to INR10b for the quarter. With a trough formed in 1QFY18,
there has been increased business from the regulated market, and also from
branded generics in the emerging market. Weak institutional business in the
emerging market affected overall growth for the quarter.
Sequential improvement in financial performance:
Gross margin improved
120bp QoQ to 51.4% due to a superior product mix. In addition, higher
operating leverage led to a sequential 280bp improvement in EBITDA margin.
Accordingly, adjusted PAT improved from INR69m in 1QFY18 to INR253m in
2QFY18. EBITDA margin remained lower on a YoY basis. Lower other income
and a higher tax rate led to a further YoY fall in PAT for 2QFY18.
Valuation view:
For FY18/19/20, we reduce sales estimates by 5.6%/4.7%/4.1%
and PAT estimate by 12%/8.7%/8.9% to factor in a delay in key ANDA approvals,
postponement of institutional anti-malaria tender business, and increased cost
associated with marketing spend in the consumer healthcare segment. Accordingly,
we revise our SOTP-based TP to INR1,201. We continue to like STR due to its
differentiated product pipeline for the US, consistent compliance track record, and
better-than-industry growth in the Australia business and also the branded
generics business in the emerging market. Maintain
Buy.
Financials & Valuations (INR b)
Y/E Mar
2017 2018E 2019E
Net Sales
34.8
41.5
51.9
EBITDA
6.4
7.8
10.3
PAT
2.9
3.7
6.1
EPS (INR)
32.3
41.7
68.3
Gr. (%)
77.6
29.2
63.7
BV/Sh (INR)
303.1 344.5 412.8
RoE (%)
10.8
12.9
18.0
RoCE (%)
8.3
9.1
11.5
P/E (x)
25.6
19.8
12.1
P/BV (x)
2.7
2.4
2.0
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.
Tushar Manudhane – Research Analyst
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Rajat Srivastava – Research Analyst
(Rajat.Srivastava@motilaloswal.com); +91 22 3010 2511

Strides Shasun
North America, Australia and branded generics lead growth for the quarter
On high base of past year, sales grew at 4% YoY, to INR8.4b for the quarter. The YoY
growth was led by strong growth in regulated market, comprising US, Australia and
some European market and rebounce in branded generic business in emerging
market. Weak institutional business adversely affected YoY growth for the quarter.
Exhibit 1: High base affects yoy growth for the quarter
Total Sales (INR b)
149.2
172.1 175.3
8.9
7.6
9.3
-3.9
8.4
6.6
10.0
4.4
Emerging
Market
32%
Regulated
Market
50%
YoY Growth (%)
API
18%
28.8
7.2
8.7
9.2
7.9
33.3
9.5
Exhibit 2: Sales breakdown (2QFY18)
Source: MOSL, Company
Source: MOSL, Company
North America picks up pace
Regulated market sales at INR5b were up 15% YoY for the quarter. Within regulated
market, STR’s revenue in North America market was led by organic growth in US
portfolio. STR, now has considerable market share in products like Ranitidine (27%),
Dutasteride (34%), Ergocalciferol (44%), Lamivudine Zidovudine (19%) and
Methoxsalen (34%). STR performed well in Australia market with low double digit
growth in value and volume terms, where industry growth is at 4-5%.
We expect increased business in North America from niche product approvals in
recent past. Management has guided for exit run-rate in North America to be
USD45-50m in Q4FY18.
Even in Australia, STR launched seven new products, expanded distribution
footprints by 50 stores and had healthy momentum in consumer healthcare
‘Chemist Own’ brand.
In addition, the acquisition of Amneal Australia business is expected to add to the
Australia revenue of STR. STR has guided for incremental annual revenue of
AUD25m from this acquisition. In addition, STR is expected to have synergy benefit
as there are about 100 molecules being common with Arrow portfolio.
Exhibit 3: Increased market share in existing products led yoy growth for the quarter
Regulated Markets Sales (INR B)
129.8
114.3
27.0
2.2
3.2
3.9
3.7
4.4
107.7
94.5
42.1
4.5
36.6
5.3
4.1
11.9
YoY Growth (%)
5.0
15.1
Source: MOSL, Company
31 October 2017
2

Strides Shasun
Growth in branded generics offset by weak institutional business in
emerging market
Emerging market sales, comprising India and Africa branded generics and
Institutional sales, remained flat to INR3.2b, for the quarter. There has been growth
in branded generics business in India as well as Africa. The YoY growth in Africa was
led by better sales force effectiveness, with expansion to East Africa using UCL
platform. Channel restocking, post implementation of GST and increase in sales
productivity led increased business in India branded generics. However, the overall
growth in emerging market business was flat due to weak Institutional business. This
is mainly on account of low procurement from global agencies. We expect
institutional business to pick-up as procurement picks up and anti-malaria tender
from global fund is awarded.
During the quarter, STR invested about INR161m in marketing and media spend to
build consumer healthcare franchise in US and India.
Exhibit 4: Emerging markets was flat for the quarter
Emerging Markets Sales (INR b)
23.9
35.7
38.5
12.8
2.4
-21.4
6.8
0.0
3.2
YoY Growth (%)
16.6
16.5
2.3
2.9
3.1
2.5
3.2
3.3
2.7
Source: MOSL, Company
With successful completion of WHO regulatory inspection at Kenya facility (UCL),
STR remains in good stead of procuring business with regulatory approved local
manufacturing facility. STR continues to expand product portfolio in ARV as well as
anti-malaria and transfer existing institutional business to UCL. The supplies from
UCL are expected to commence from 2HFY18.
STR maintains guidance of filing 15-20 ANDAs in FY18
STR spent INR380m towards product development during the quarter. STR
maintained its momentum of filing ANDAs with 6 filings in YTD. It maintained its
guidance of filing 15-20 ANDAs in FY18. STR has about 68 cumulative ANDA filings till
date. It received 8 new products (2 in 2QFY18), taking ANDAs pending for approval
to 28. All approvals in the pipeline are under the time bound GDUFA regime.
31 October 2017
3

Strides Shasun
Exhibit 5: Quarterly R&D spend to remain stable
R&D Spend (INR m)
463
348
238
216
172
228
322
373
380
Source: MOSL, Company
Other key highlights
STR’s flagship manufacturing facility at Bangalore which was inspected in May
2017 has now received Establishment Inspection Report (EIR), closing form 483
with 3 procedural observations issued earlier.
Universal Corp, Kenya a subsidiary of STR has received the GMP status for its
Kenyan Facility from WHO. The company has initiated site transfer for its ARV
portfolio to this facility and will participate in global donor funding & local
government programs.
Valuation and view
We reduce our sales estimates for FY18/19/20 by 5.6%/4.7%/4.1% and PAT estimate
by 12%/8.7%/8.9% to factor delay in key ANDA approvals, postponement of
institutional anti-malaria tender business and increased cost associated with
marketing spend in consumer healthcare segment.
Accordingly, we revise our price target to INR1,201 (SOTP basis). We value STR on
sum-of-the-parts (SOTP), valuing the pharma business at 18x FY19E earnings
(industry average P/E multiple for midcap pharma) and Solara at an EV of 13x FY19E
EBITDA to arrive at a price target of INR1,201.
We continue to like STR on differentiated product pipeline for US market, consistent
compliance track record, better than industry growth in Australia business and
branded generics business in emerging market. Maintain Buy on the stock.
.
Exhibit 6: Key changes in estimates
INR mn
EBITDA
EBITDA Margin (%)
PAT
EPS (INR)
TP
Old estimates
FY18E
FY19E
FY20E
43,898
8,341
19.0
4,236
47.4
54,479
11,032
20.3
6,687
74.8
1300
62,414
12,857
20.6
8,225
92.1
New estimates
FY18E
FY19E
FY20E
41,455
7,752
18.7
3,729
41.7
51,927
10,333
19.9
6,103
68.3
1,201
59,855
12,151
20.3
7,490
83.8
Change (%)
FY18E
FY19E
FY20E
(5.6)
(7.1)
(12.0)
(12.0)
(4.7)
(6.3)
(8.7)
(8.7)
(7.6)
(4.1)
(5.5)
(8.9)
(8.9)
Source: MOSL
31 October 2017
4

Strides Shasun
Exhibit 7: Revised SOTP based price target of INR1,201
Particulars
Valuation of Strides Pharma
Strides Pharma PAT (INR m)
PE multiple (x)
Target Mkt Cap (INR m)
Valuation of Solara
API business EBITDA (INR m)
EV/EBITDA multiple
EV of API business
Net Debt of API business (INR m)
Stake of Strides Pharma (%)
Target Mkt Cap (INR m)
Total target Mkt Cap (INR m)
No. of shares
Target Price (INR)
% Upside
FY19E
4,941
18
88,936
2,671
13
34,724
4500
60
18,135
107,071
89.4
1,201
41.3
31 October 2017
5

Strides Shasun
Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Raw Materials
Employees Cost
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
Reported PAT from Continuing Ops.
Adj. PAT from Continuing Ops.
Change (%)
Margin (%)
FY14
13,410
39.4
7,147
1,572
2,457
11,175
83.3
2,235
16.7
565
1,670
1,089
602
1,183
-266
918
409
44.5
6
-2,333
651
182.9
4.9
FY15
11,959
-10.8
5,605
1,721
2,345
9,670
80.9
2,288
19.1
640
1,648
474
386
1,560
-74
1,486
532
35.8
-6
16
1,007
54.7
8.4
FY16
28,622
139.3
15,023
3,577
5,882
24,482
85.5
4,140
14.5
1,313
2,827
1,682
921
2,067
-414
1,653
425
25.7
-88
1,317
1,624
61.3
5.7
FY17
34,834
21.7
15,362
5,881
7,163
28,406
81.5
6,428
18.5
1,872
4,557
2,269
1,686
3,973
-1,006
2,967
470
15.8
458
2,039
2,886
77.6
8.3
FY18E
41,455
19.0
18,199
6,882
8,623
33,703
81.3
7,752
18.7
2,099
5,653
2,113
1,451
4,991
-197
4,794
759
15.8
472
3,563
3,729
29.2
9.0
(INR Million)
FY19E
51,927
25.3
22,640
8,464
10,489
41,594
80.1
10,333
19.9
2,465
7,869
1,586
1,558
7,841
0
7,841
1,242
15.8
496
6,103
6,103
63.7
11.8
FY20E
59,855
15.3
25,977
9,696
12,031
47,704
79.7
12,151
20.3
2,613
9,538
1,517
1,496
9,517
0
9,517
1,507
15.8
521
7,490
7,490
22.7
12.5
Consolidated - Balance Sheet
Y/E March
Equity Share 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
E: MOSL Estimates
FY14
596
9,473
10,068
757
5,466
17
16,308
8,039
3,528
4,511
1,034
995
4,430
9,993
1,760
3,640
2,312
2,281
4,655
2,679
879
1,098
5,338
16,308
FY15
596
10,853
11,449
187
8,917
-54
20,500
9,437
3,792
5,645
1,368
1,712
6,300
9,668
2,077
3,900
1,469
2,223
4,194
2,065
1,268
861
5,474
20,500
FY16
894
25,685
26,579
502
35,418
-502
61,997
18,987
1,468
17,520
9,267
8,149
13,409
25,256
6,131
10,330
3,116
5,679
11,605
7,836
2,943
826
13,652
61,997
FY17
894
26,210
27,104
1,640
36,997
89
65,829
22,233
2,771
19,462
9,670
7,802
15,952
27,582
7,380
9,971
3,295
6,936
14,638
7,521
5,986
1,131
12,944
65,829
FY18E
894
29,912
30,806
1,640
35,872
89
68,406
28,954
4,870
24,085
9,670
2,040
15,952
34,053
8,756
11,866
5,176
8,255
17,393
8,923
7,124
1,346
16,659
68,406
(INR Million)
FY19E
894
36,015
36,910
1,640
34,597
89
73,234
31,163
7,334
23,828
9,670
984
15,052
45,322
10,806
14,863
9,313
10,340
21,622
11,012
8,924
1,686
23,701
73,234
FY20E
894
43,505
44,399
1,640
32,822
89
78,949
32,558
9,947
22,611
9,670
805
15,052
55,671
12,394
17,132
14,226
11,918
24,859
12,630
10,286
1,943
30,812
78,949
31 October 2017
6

Strides Shasun
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY14
7.3
13.6
112.6
336.5
-1,410.0
FY15
11.3
18.4
128.0
71.9
43,880.3
73.5
44.9
6.5
6.8
35.6
8.7
-17.6
9.4
7.3
10.8
1.3
0.6
63
119
63
2.3
3.5
0.1
FY16
18.2
32.8
297.2
0.8
6.2
45.5
25.2
2.8
3.7
25.7
0.1
-32.7
8.5
6.8
8.7
1.5
0.5
78
132
100
2.2
1.7
0.7
FY17
32.3
53.2
303.1
0.0
0.0
25.6
15.5
2.7
3.1
16.7
0.0
-43.2
10.8
8.3
10.1
1.6
0.5
77
104
79
1.9
2.0
0.7
FY18E
41.7
65.2
344.5
0.0
0.0
19.8
12.7
2.4
2.5
13.5
0.0
46.3
12.9
9.1
11.3
1.4
0.6
77
104
79
2.0
2.7
0.5
FY19E
68.3
95.8
412.8
0.0
0.0
12.1
8.6
2.0
1.9
9.6
0.0
56.3
18.0
11.5
14.2
1.7
0.7
76
104
77
2.1
5.0
0.3
FY20E
83.8
113.0
496.5
0.0
0.0
9.9
7.3
1.7
1.5
7.6
0.0
80.8
18.4
12.5
16.6
1.8
0.8
76
104
77
2.2
6.3
0.1
40.7
-82.3
4.3
4.9
4.4
1.7
0.8
48
99
73
2.1
1.5
-0.1
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
28,899
1,539
1,835
-1,259
-2,607
28,407
-31,124
-2,717
-4,639
-7,356
47,935
-6,739
36,556
259
1,430
-2,192
-32,683
0
-33,185
654
1,657
2,312
FY15
9,920
640
163
-560
-959
9,205
-8,371
834
-2,406
-1,572
4,515
427
2,536
31
3,208
-381
-7,070
0
-4,213
-843
2,312
1,469
FY16
1,464
1,520
998
-770
-3,417
-206
938
732
-3,658
-2,925
286
-25,153
-28,525
12,264
18,789
-1,347
-251
-15
29,439
1,647
1,469
3,116
FY17
4,971
1,987
1,521
-586
-3,413
4,480
-1,599
2,881
-6,746
-3,865
1,269
-607
-6,084
165
5,962
-2,370
-376
0
3,382
179
3,116
3,295
FY18E
4,933
2,099
662
-759
-1,835
5,100
0
5,100
-960
4,140
0
1,451
491
0
-1,125
-2,113
0
-472
-3,710
1,881
3,295
5,176
FY19E
7,841
2,465
28
-1,242
-2,904
6,188
0
6,188
-1,152
5,036
900
1,558
1,306
0
-1,275
-1,586
0
-496
-3,356
4,137
5,176
9,313
(INR Million)
FY20E
9,517
2,613
21
-1,507
-2,198
8,445
0
8,445
-1,216
7,229
0
1,496
280
0
-1,775
-1,517
0
-521
-3,812
4,913
9,313
14,226
31 October 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.
Strides Shasun
Disclosure of Interest Statement
Analyst ownership of the stock
Strides Shasun
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
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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
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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
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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:
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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
31 October 2017
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