30 July 2019
1QFY20 Results Update | Sector: Cement
Prism Johnson
Buy
BSE SENSEX
37,397
S&P CNX
11,085
CMP: INR93
TP: INR110 (+19%)
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Healthy margins in cement; TBK and RMC suffer
Healthy realizations drive cement profitability:
1QFY20 revenue inched up
1% YoY (-10% QoQ) to INR15.1b (in line with our est.). Cement volumes grew
a modest 2%YoY. However, combined cement & clinker volume declined ~7%
YoY, which can be attributed to a sharp fall in clinker volumes. Cement
Division’s EBITDA/t improved to INR1,111 as against INR1,009 in 1QFY19,
mainly due to higher realizations offsetting the overall increase in costs.
TBK reports EBIT loss; RMC EBIT impacted by high cement prices:
TBK’s
revenue increased 6% YoY to INR4.2b. Segment volumes increased 3% YoY.
TBK reported EBIT loss of INR73m in 1QFY20 v/s EBIT loss of INR92m in
1QFY19. RMC sales stood at INR3.7b (-1% YoY). RMC reported EBIT of INR9m
in 1QFY20 v/s EBIT of INR106m in 1QFY19; the decline was mainly due to the
steep increase in cement prices. EBITDA for PRSMJ increased 2%YoY (flat
QoQ) to INR 1.85b (v/s our est. INR1.73b), with margins at 12.3% (+0.2pp
YoY; +1.3pp QoQ). PAT at INR656m (-7%YoY) was in line with our estimate.
Key highlights from management presentation:
(1) Out of the 15MW solar
power planned capacity, 6MW was commissioned during the quarter.
Balance capacity and additional 10MW solar capacity will be commissioned
during the year. (2) In the case of 22.5MW WHRS, work in progress is on
schedule and commissioning is expected by Jun’20.
Valuation and view:
We reduce our PAT estimate for FY20 by 5% to build in
higher depreciation impact from the current quarter. Our estimate for FY21
remains largely unchanged. Our SOTP value for PRSMJ is INR110/share. We
value the cement business at 6.5x Jun’21 EV/EBITDA; RMC at 6x Jun’21
EV/EBITDA and the TBK business at 1x EV/Sales. Maintain
Buy.
FY19
2Q
3Q
1.35
1.50
20.0
9.6
4,355
4,391
10.6
5.1
-0.6
0.8
13,353 14,398
14.6
10.3
12,550 13,308
803
1,090
6.0
7.6
385
400
436
437
121
24
103
277
0
0
103
277
33
87
31.9
31.4
70
190
70
190
0.5
1.3
FY20
2QE
3QE
1.27
1.50
-6.0
0.0
4,569
4,649
4.9
5.9
-2.1
1.8
13,557 15,258
1.5
6.0
12,322 13,766
1,235
1,492
9.1
9.8
460
460
467
470
30
35
338
597
0
0
338
597
118
209
35.0
35.0
220
388
220
388
1.6
2.5
(INR Million)
FY19
FY20E
4QE
1.76
0.4
4,739
4.3
1.9
18,080
7.4
16,254
1,826
10.1
460
470
41
937
0
937
319
34.1
617
617
3.4
6.27
11.2
4,423
1.7
59,556
10.5
54,008
5,547
9.3
1,601
1,741
207
2,413
113
2,301
841
36.5
1,460
1,573
2.6
6.08
-3.0
4,663
5.4
61,971
4.1
55,568
6,404
10.3
1,839
1,874
202
2,893
0
2,893
1,013
35.0
1,881
1,881
3.0
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
PRSMJ IN
503
46.6 / 0.7
119 / 62
7/26/-19
51
25.1
Financials & Valuations (INR b)
2019 2020E 2021E
Y/E Mar
Net Sales
59.6
62.0
66.4
EBITDA
5.5
6.4
6.8
PAT
1.6
1.9
2.0
EPS (INR)
3.1
3.7
4.0
Gr. (%)
123.4
19.6
8.0
BV/Sh (INR)
22.7
25.8
29.3
RoE (%)
14.5
15.4
14.6
RoCE (%)
11.6
13.0
12.8
P/E (x)
29.6
24.8
22.9
P/BV (x)
4.1
3.6
3.2
Estimate change
TP change
Rating change
Quarterly Performance (Standalone)
Y/E March
Sales Dispatches (m ton)
YoY Change (%)
Realization (INR/ton)
YoY Change (%)
QoQ Change (%)
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT after EO Expense
Tax
Rate (%)
Reported PAT
Adj PAT
Margins (%)
E: MOFSL Estimates
1Q
1.67
13.0
4,380
-5.2
-3.2
14,977
13.1
13,168
1,809
12.1
376
448
32
1,017
0
1,017
315
31.0
702
702
4.7
4Q
1.75
4.8
4,545
0.5
3.5
16,828
4.3
14,983
1,845
11.0
440
421
31
1,016
113
903
406
44.9
497
610
3.6
1Q
1.56
-6.8
4,669
6.6
2.7
15,077
0.7
13,226
1,851
12.3
459
467
97
1,022
0
1,022
366
35.8
656
656
4.3
Pradnya Ganar – Research analyst
(Pradnya.Ganar@motilaloswal.com); +91 22 61291537
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.
 Motilal Oswal Financial Services
Prism Johnson
Exhibit 1:
Volumes decreased 7% YoY while realizations were up 3% QoQ
Realizations (INR/ton)
Volumes (mt)
1.3
1.2
1.4
1.5
1.2
1.2
1.6
1.5
1.1
1.7
1.4
1.7
1.3
1.5
1.8
1.6
Source: MOFSL, Company
Exhibit 2: RMC revenues decreased 1% YoY in 1QFY20
RMC Revenues (INR m)
PBIT Margin (%)
Exhibit 3: TBK revenues increased 6% YoY in 1QFY20
TBK Revenues (INR m)
PBIT Margin (%)
2.0
3.6
0.8
1.8
3.2
2.7
1.4
-0.1
-1.1
-1.1
-2.0
2.9 2.8
0.5 0.1
1.1
0.2
-2.7
-1.3 -1.6
-4.1 -4.0
-6.7
-4.7 -5.2
-1.2 -1.1
-2.3 -1.5 -2.0
-1.4 -1.7
Source: Company, MOFSL
Source: Company, MOFSL
EBITDA (INR m)
EBITDA Margins (%)
Exhibit 4: EBITDA trend
10.5
6.3
7.6
2.8
2.7
8.5
5.9
3.5
7.0
12.1
11.0
6.0
7.6
12.3
2.6
4.5
Source: Company, MOFSL
Key highlights from management presentation
Cement volumes grew by a modest ~2% on yoy basis. However combined
cement & clinker volume declined by ~7% as compared to quarter ended June
2018. The decline is attributed to sharp fall in clinker volumes. Premium
products volumes continue to improve and were at ~19 % of overall cement
volumes
During the quarter the Division has commissioned 6MW of solar power out of
the 15MW planned capacity. Balance capacity and additional 10MW solar
capacity would be commissioned during the year
Work in progress in case of 22.5MW WHRS is on schedule and commissioning is
expected by June 2020
2
30 July 2019
 Motilal Oswal Financial Services
Prism Johnson
During the quarter tiles volume grew by 3% on yoy basis. Net working capital
management continues to remain under control. Division continues to invest in
marketing and distribution activities. During the quarter, Division opened two
Display Centres at Varanasi and Thiruvananthapuram, totalling to 13 Display
Centres in operations
Valuation and views
We reduce our PAT estimate for FY20 by 5% to build in higher depreciation
impact from the current quarter. Our estimate for FY21 remains largely
unchanged. Our SOTP value for PRSMJ is INR110/share. We value the cement
business at 6.5x June’21 EV/EBITDA; RMC at 6x June’21 EV/EBITDA and TBK
business at 1x EV/Sales. Maintain
Buy.
Exhibit 5: Revision in estimates
(INR b)
Net Sales
EBITDA
Net Profit
EPS (INR)
Rev
62.0
6.4
1.9
3.7
FY20E
Old
63.6
6.3
2.0
4.0
Chg (%)
-2.5
2.1
-5.4
-5.4
Rev
66.4
6.8
2.0
4.0
FY21E
Old
67.8
6.6
2.1
4.1
Chg (%)
-2.1
3.1
-2.5
-2.5
Source: MOFSL, Company
Exhibit 6: One forward P/E band
100.0
80.0
60.0
40.0
20.0
0.0
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 7: One forward P/B band
7.5
5.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Negative Earnings
56.4
37.4
18.3
10.8
79.1
3.4
6.2
4.9
23.0
2.5
0.0
1.9
1.2
3.4
Source: Company, MOFSL
Source: Company, MOFSL
30 July 2019
3
 Motilal Oswal Financial Services
Prism Johnson
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT bef. EO Exp.
EO Expense/(Income)
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Reported PAT
PAT Adj for EO items
Change (%)
Margin (%)
2014
49,443
4.3
48,244
97.6
1,199
2.4
1,766
-567
2,415
359
-2,623
-1,341
-1,283
-462
0
36.0
-821
-2,162
253.6
-4
2015
55,718
12.7
53,098
95.3
2,621
4.7
1,368
1,252
2,536
556
-729
-621
-108
-255
0
236.7
147
-474
-78.1
-1
2016
52,775
-5.3
50,341
95.4
2,434
4.6
1,560
874
2,400
1,343
-183
36
-219
4
-304
137.1
81
117
-124.7
0
2017
49,999
-5.3
47,385
94.8
2,614
5.2
1,602
1,012
1,834
1,103
281
0
281
120
-13
37.8
175
175
49.3
0
2018
53,889
7.8
50,292
93.3
3,596
6.7
1,531
2,066
1,873
858
1,051
0
1,051
270
77
33.0
704
704
302.1
1
2019
59,556
10.5
54,008
90.7
5,547
9.3
1,601
3,947
1,741
207
2,413
113
2,301
532
309
36.5
1,460
1,573
123.4
3
2020E
61,971
4.1
55,568
89.7
6,404
10.3
1,839
4,565
1,874
202
2,893
0
2,893
1,013
0
35.0
1,881
1,881
19.6
3
(INR m)
2021E
66,371
7.1
59,600
89.8
6,771
10.2
2,072
4,700
1,798
222
3,124
0
3,124
1,093
0
35.0
2,030
2,030
8.0
3
Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
2014
5,034
5,047
10,081
452
18,333
28,866
34,553
13,607
20,946
626
5,746
14,083
4,622
5,258
525
3,679
12,535
12,130
405
1,548
28,866
2015
5,034
4,658
9,691
136
18,828
28,655
35,418
14,935
20,483
688
5,569
16,028
5,500
5,574
1,081
3,873
14,113
13,648
465
1,915
28,655
2016
5,034
4,371
9,405
-363
18,524
27,566
22,526
2,092
20,433
683
5,698
15,752
4,717
6,087
1,152
3,797
15,000
14,285
715
752
27,566
2017
5,034
4,523
9,557
-639
16,308
25,225
23,585
3,693
19,892
945
6,730
12,698
3,997
6,055
667
1,979
15,039
14,518
521
-2,342
25,225
2018
5,034
5,225
10,258
-564
12,426
22,121
25,353
5,224
20,129
925
6,877
13,534
4,315
6,621
587
2,011
19,345
18,733
612
-5,811
22,120
2019
5,034
6,388
11,421
-250
11,532
22,703
27,170
6,825
20,345
1,202
7,772
14,804
5,012
7,046
555
2,192
21,419
20,863
557
-6,615
22,703
2020E
5,034
7,974
13,007
-250
11,532
24,289
30,272
8,663
21,608
1,400
7,772
15,229
5,215
7,332
402
2,281
21,719
21,709
11
-6,490
24,289
(INR m)
2021E
5,034
9,710
14,743
-250
10,532
25,025
34,672
10,735
23,937
300
7,772
16,279
5,585
7,274
977
2,443
23,261
23,250
11
-6,983
25,025
30 July 2019
4
 Motilal Oswal Financial Services
Prism Johnson
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
EV/Ton (US$)
Dividend Yield (%)
Return Ratios (%)
RoIC
RoE
RoCE
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Leverage Ratio (x)
Current Ratio
Debt/Equity
2014
-4.3
-0.8
20.0
0.0
0.0
2015
-0.9
1.8
19.3
0.0
0.0
2016
0.2
3.3
18.7
0.0
0.0
2017
0.3
3.5
19.0
0.0
0.0
2018
1.4
4.4
20.4
0.5
41.8
2019
3.1
6.3
22.7
0.5
20.2
29.6
14.7
4.1
0.9
10.2
68.3
0.5
-1.6
-20.6
-0.5
1.7
34.8
36.6
1.1
1.8
-7.9
-4.8
-8.7
1.9
38.2
35.8
1.1
1.9
-1.6
1.2
-2.9
1.9
31.7
38.0
1.1
2.0
3.4
1.8
4.9
1.9
28.4
39.7
0.8
1.7
9.0
7.1
8.1
2.3
30.3
44.2
0.7
1.2
18.6
14.5
11.6
2.7
32.3
44.9
0.7
1.0
2020E
3.7
7.4
25.8
0.5
15.7
24.8
12.5
3.6
0.9
8.8
66
0.5
21.3
15.4
13.0
2.6
31.3
44.0
0.7
0.9
2021E
4.0
8.1
29.3
0.5
14.5
22.9
11.4
3.2
0.8
8.2
65
0.5
19.9
14.6
12.8
2.7
31.8
85.7
0.7
0.7
Cash Flow Statement
Y/E March
Oper. P/L before Tax
Interest/Dividends Recd.
Depreciation
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
EO expense
CF from Operating incl EO
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
2014
-1,278
1,766
2,216
-35
-1,697
972
-1,119
-147
-1,684
-1,831
390
1,455
162
0
0
-2,330
0
2,465
135
149
375
524
2015
-108
1,368
2,273
26
-1,540
2,020
287
2,307
-1,548
759
681
511
-356
0
0
-2,087
0
693
-1,394
557
525
1,082
2016
-219
1,560
2,281
-17
451
4,057
-341
3,716
-1,869
1,848
745
-35
-1,158
0
0
-2,251
0
-237
-2,488
70
1,081
1,151
2017
281
1,602
1,768
-50
1,661
5,262
169
5,431
-1,253
4,178
-510
-187
-1,951
0
0
-1,759
0
-2,206
-3,965
-484
1,152
667
2018
1,051
1,531
1,810
-296
408
4,504
86
4,590
-1,732
2,857
-281
-16
-2,029
0
-5,508
-1,692
0
4,559
-2,641
-80
667
587
2019
2,301
1,601
1,681
-430
-446
4,706
273
4,979
-2,300
2,680
-234
66
-2,468
0
-7,065
-1,501
-303
6,326
-2,544
-33
587
554
2020E
2,893
1,839
1,874
-1,013
-278
5,315
0
5,315
-3,300
2,015
0
0
-3,300
0
0
-1,874
-294
0
-2,168
-153
555
402
(INR m)
2021E
3,124
2,072
1,798
-1,093
1,068
6,968
0
6,968
-3,300
3,668
0
0
-3,300
0
-1,000
-1,798
-294
0
-3,093
575
402
977
Others
CF from investments
Issue of Shares
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOFSL Estimates
30 July 2019
5
 Motilal Oswal Financial Services
Prism Johnson
Corporate profile
Company description
Prism Johnson is one of India’s leading integrated
Building Materials Company, with a wide range of
products from cement, ready-mixed concrete, tiles,
bath products to kitchens. The company has three
Divisions, viz. Prism Cement, H & R Johnson (India),
and RMC Readymix (India). Cement business has a
capacity of 7mt.
Exhibit 1: Sensex rebased
Source: MOFSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Jun-19
Promoter
DII
FII
Others
74.9
4.9
6.6
13.6
Mar-19
74.9
4.5
6.8
13.9
Jun-18
74.9
5.5
6.5
13.2
Source: Capitaline
Exhibit 3: Top holders
Holder Name
NATIONAL WESTMINSTER BANK PLC AS
TRUSTEE OF THE JUPITER INDIA FUND
L&T MUTUAL FUND TRUSTEE LIMITED-L&T
EMERGING BUSINESSES FUND
AKASH BHANSHALI
HDFC TRUSTEE CO LTD A/C HDFC HOUSING
OPPORTUNITIES FUND-1140D NOVEMBER
2017 (1)
IDFC STERLING VALUE FUND
% Holding
2.4
1.5
1.5
1.2
1.0
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Shobhan M Thakore
Vijay Aggarwal
Atul R Desai
Joydeep Mukherjee
Sarat Kumar Chandak
Vivek Krishan Agnihotri
Aneeta S Kulkarni
Designation
Chairman & Independent
Directo
Managing Director
Executive Director & CEO
Executive Director & CEO
Executive Director & CEO
Executive Director & CEO
Company Secretary
Exhibit 5: Directors
Name
Rajan Raheja
Raveendra Chittoor
Name
Ameeta A Parpia
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
D C Dave & Co
G M Kapadia & Co
Savita Jyoti Associates
Type
Cost Auditor
Statutory
Secretarial Audit
Exhibit 7: MOFSL forecast v/s consensus
EPS
(INR)
FY20
FY21
MOFSL
forecast
3.7
4.0
Consensus
forecast
5.0
6.1
Variation (%)
-26.0
-34.4
Source: Bloomberg
Source: Capitaline
30 July 2019
6
 Motilal Oswal Financial Services
Prism Johnson
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
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 Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, 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. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - 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), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL 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 MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL 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 MOFSL 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. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
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 MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL 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 MOFSL & 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 Financial Services Limited (MOFSL) 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 MOFSL 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 MOFSL , 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., MOFSL 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
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
30 July 2019
7
 Motilal Oswal Financial Services
Prism Johnson
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- 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 MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- 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)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
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.
Terms & Conditions:
This report has been prepared by MOFSL 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 MOFSL. 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. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
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. MOFSL, 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 MOFSL. 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 MOFSL 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 MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL 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 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
30 July 2019
8