19 May 2020
4QFY20 Results Update | Sector: Utilities
Torrent Power
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
TPW IN
481
146 / 1.9
339 / 238
5/31/49
412
CMP: INR304
TP: INR351 (+16%)
Buy
Better performance of distribution drives beat
Distribution biz may see near-term impact on lower volumes; Maintain Buy
Torrent Power’s (TPW) 4QFY20 results highlight the improved performance
of its distribution businesses (franchise and licensed) along with some
benefit of merchant sales. Consol. EBITDA improved 17% YoY to INR8.3b.
TPW’s distribution business may get impacted due to lower volumes owing
to the COVID-19 pandemic. However, a healthy balance sheet should help it
to tide over this wave.
Maintain Buy with TP of INR351/share.
Distribution business performance drives beat
TPW’s 4QFY20 EBITDA rose 17% YoY to INR8.3b (v/s est. INR7.4b) amid
lower T&D losses and some merchant volumes. This was partly offset by the
impact of new CERC norms on Sugen.
The beat to our estimates was largely led by (1) improved performance of
its distribution businesses (both franchise and licensed) amid lower T&D
losses, and (2) some merchant volumes. In addition, the company made a
provision of (1) INR0.5b for possible cancellation of its SECI-V project, and
(2) INR0.5b for bad debts – adj. for which the beat would have been higher.
Profitability for Sugen was impacted by the new CERC regulations, which
has tightened O&M norms and increased sharing on efficiency gains.
PBT (before exceptions) was up 39% YoY to ~INR3.1b (v/s est. INR2.3b).
However, the company took an impairment of INR10b pertaining to its
DGEN mega power project. In addition, INR4.4b of one-offs related to tax
were reported. Adj. for these items, PAT would have come in at INR2.8b
(v/s its reported loss of INR2.7b).
Management commentary highlights
Gross Debt of the company stood at INR89b by end-FY20 (against ~INR97b
during FY19). Further with interest resets, the interest cost for the company
is likely to come down.
Demand from end consumers has witnessed a sharp decline in both DF and
DL areas. Collection efficiencies within DF areas, particularly in Bhiwandi,
has been impacted
SECI has not agreed to an extension for TPW’s SECI-V project. Accordingly,
TPW has taken a provision for the same.
Valuation and view – Strong positioning/healthy balance sheet; Maintain Buy
COVID-19 is likely to impact TPW’s distribution business in the near term.
Accordingly, we have cut EPS for FY21/22E by 7%/4% to account for the
same. However, from a medium-term perspective, TPW’s story remains
intact. Outlook for its gas plants has improved with low LNG prices and the
recent off-take of UnoSugen PPA. Further, continued capitalization within
regulated distribution and debt repayment should also aid earnings. We
maintain our
Buy
rating on the company with
TP of INR351/share.
Financials & Valuations (INR b)
2020 2021E 2022E
Y/E March
Net Sales
136.4 136.8 139.8
EBITDA
35.6
34.9 37.0
PAT
13.5
11.5 14.0
EPS (INR)
28.0
24.0 29.2
Gr. (%)
49.7 -14.4 21.7
BV/Sh (INR)
190.5 207.9 230.6
RoE (%)
14.9
12.0 13.3
RoCE (%)
9.5
9.5 10.3
Payout (%)
41.4
27.1 22.3
Valuations
P/E (x)
10.9
12.7 10.5
P/BV (x)
1.6
1.5
1.3
Div. Yield (%)
3.8
2.1
2.1
FCF Yield (%)
15.7
13.3 17.1
Shareholding pattern (%)
As On
Mar-20 Dec-19
Promoter
53.6
53.6
DII
19.6
19.9
FII
8.8
8.1
Others
18.1
18.4
FII Includes depository receipts
Mar-19
53.6
17.4
7.8
21.2
;
Aniket Mittal – Research Analyst (Aniket.Mittal@MotilalOswal.com); +91 22 6129 1572
13 February 2020
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Torrent Power
Exhibit 1: Quarterly Performance (consolidated) – INR m
Y/E March
Net Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
MI and Associates
Reported PAT
PAT
YoY Change (%)
1Q
35,281
15.3
27,617
7,664
21.7
3,018
2,292
523
2,877
0
2,877
604
21.0
15
2,259
2,259
-17.2
FY19
2Q
3Q
34,445 32,535
18.2
18.1
24,577 25,171
9,869
7,364
28.6
22.6
3,044
3,074
2,247
2,287
441
533
5,019
2,537
0
0
5,019
2,537
884
155
17.6
6.1
13
12
4,122
2,370
4,122
2,370
27.7
15.6
4Q
29,248
4.1
22,150
7,098
24.3
3,130
2,163
399
2,204
0
2,204
1,956
88.7
9
240
240
-89.0
1Q
37,361
5.9
29,025
8,337
22.3
3,206
2,477
545
3,199
0
3,199
433
13.5
13
2,753
2,753
21.9
FY20
2Q
3Q
38,420 30,790
11.5
-5.4
27,870 22,386
10,550
8,404
27.5
27.3
3,219
3,268
2,495
2,349
493
365
5,329
3,152
0
0
5,329
3,152
-2,227 -1,055
-41.8
-33.5
12
12
7,544
4,194
4,742
3,148
15.1
32.8
4Q
29,835
2.0
21,565
8,270
27.7
3,350
2,224
373
3,069
10,000
-6,931
-4,191
60.5
10
-2,749
2,815
1,075.3
FY19
131,510
99,515
31,995
24.3
12,265
8,989
1,896
12,636
0
12,636
3,598
28.5
49
8,989
8,989
-11.6
FY20
136,406
100,846
35,561
13,043
9,546
1,776
14,748
10,000
4,748
-7,040
-148.3
47
11,742
13,458
49.7
FY20 vs Est
4QE
(%)
28,593
4
-2.2
21,229
2
7,364
12
25.8
3,280
2
2,294
-3
466
-20
2,256
36
0
2,256 -407
1,510
66.9
-29
775 -455
775
263
223.6
Source: MOFSL, Company
Operational highlights
UnoSugen’s PLF rose to 68.2% (v/s 0% in the previous year) in 4QFY20 on new
PPA of 278MW capacity being kick-started. DGEN witnessed volumes of 197MU
at 7.7% PLF.
T&D losses improved for DFs in Bhiwandi/Agra during FY20 from 15.13%/14.18%
to 11.93%/12.51%. As for Ahmedabad/Surat distribution, T&D losses stood at
4.98%/3.43% in FY20 (v/s 5.61%/3.43% in FY19).
PLFs for TPW’s wind business improved ~1.45% YoY to 23.62% while solar PLF
declined 0.95% YoY to 19.3% during 4QFY20. For FY20, wind business PLF
declined marginally, which stood at 29.76% and Solar PLF stood at 17.14%.
Reg. E
Equity
INR m
50,897
22,629
7,283
9,330
4,545
7,110
EBITDA
INR m
6,730
7,477
2,096
Equity
Value
INR m
80,646
43,102
13,872
9,330
4,545
9,796
Norm.
Debt
INR m
36,321
18,536
3,439
0
0
14,347
5,581
EV
INR m
122,548
61,638
17,311
9,330
4,545
24,143
5,581
Exhibit 2: SOTP Valuation
FY22 basis
Regulated businesses
Distribution
Ahmedabad
Surat
Regulatory assets
Generation
Sabarmati
Sugen
UnoSugen
Others businesses
RE projects
Bhiwandi and Agra DFs
SMK DF
Sugen PPA efficiency earnings
Others
EV
Less: Net debt
MCap
No. of shares
Value per share
Discounted to FY21- Value per share
RoE
%
Growth
%
Multiple
x
(RoE-g)/(CoE-g)
1.9
1.9
1.0
1.0
1.4
16.0
16.0
6.0
6.0
14.0
15.5
0.0
0.0
8.0
6.5
6.0
53,837
48,602
2,443
12,579
240,008
52,567
187,441
481
390
351
Source: MOFSL, Company
19 May 2020
2
 Motilal Oswal Financial Services
Torrent Power
Highlights from management commentary
Interest Cost:
Gross debt stands at ~INR89b. Due to interest rate resets on its
loans, the company expects its weighted average interest rate to decline to
8.15%.
Capex:
TPW has revised its capex guidance for FY21. For License Distribution
business, the revised capex now stands at ~INR12-12.5b (against previous est.
of INR15b) and is ~INR3.5b for Franchisee Distribution.
Renewable projects:
SECI has not agreed to an extension for TPW’s SECI-V project (115MW).
Accordingly, TPW has taken a provision of INR0.5b for the same.
The company is also not looking at bidding for new renewable projects.
Distribution franchise:
TPW received Shil, Mumbra and Kalwa regions on 1
st
Mar’20. However, with the onset of COVID-19, there was a sharp rise in AT&C
losses at the circle leading to an impact of INR0.2b. TPW has noted that every
1% reduction in T&D at the circle loss leads to a benefit of INR650m.
Drop in demand:
TPW has noted a sharp demand decline for its DL and DF
businesses on the back of COVID-19. However, it is hopeful of a recovery in
demand during May-Jul’20.
Valuation and view
COVID-19 is likely to impact TPW’s distribution business in the near term.
However, from a medium-term perspective, TPW’s story remains intact. A
healthy balance sheet along with recent debt repayments would help it to tide
over this wave. Furthermore, low LNG prices and the recent off-take of
UnoSugen PPA have improved the outlook for its gas plants. While the
Unosugen PPA has a ceiling on the cost of supply (INR5.6/kWh), current spot
contract prices provide significant cushion.
Potential non-commissioning of RE projects has led to uncertainties; however,
bank guarantees (in the case of SECI-III) has provided cushion. In turn, strong CF
generation and lower RE capex has led to debt repayment.
While FY21 earnings could be dented due to impact on the DF business and
lower merchant sales, we expect a recovery in FY22E. Continued capitalization
within regulated distribution, reducing T&D losses within distribution franchise
and debt repayment would aid this. Besides, TPW remains well poised to
capitalize on opportunities from the privatization of distribution entities.
Maintain
Buy
with an SOTP-based TP of INR351.
JKM LNG
15
10
5
0
~54% down over the past one year
LNG prices have been on a
downward trend. This
provides significant cushion
with respect to the ceiling
for UnoSugen PPA
Exhibit 3: JKM LNG Futures (USD/mmbtu)
Source: Bloomberg, MOFSL
19 May 2020
3
 Motilal Oswal Financial Services
Torrent Power
We expect Adj. PAT to
decline 14% in FY21 on the
back of lower volumes in
distribution business –
partly offset by full effect of
UnoSugen PPA and
continued capex in the
regulated distribution
business
We build in a 22% increase
in PAT for FY22E on
improved power demand
and continued debt
repayment
Exhibit 4: TPW EBITDA and PAT
EBITDA - INR b
31
21
13
1
4
9
25
4
31
Adj. PAT - INR b
32
36
35
37
9
9
13
12
14
Note: *FY20 PAT has been adjusted for INR8.3b of one-time deferred tax credit and INR10b of provision for DGEN
Source: Company, MOFSL
19 May 2020
4
 Motilal Oswal Financial Services
Torrent Power
Financials and Valuations
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
Income Statement
2015
103,960
19.8
20,799
20.0
7,205
13,594
9,623
3,662
-230
7,404
3,777
51.0
30
3,597
3,367
219.9
2015
4,725
60,832
65,557
93,547
8,579
167,990
186,848
36,065
150,782
2,330
0
43,112
2,597
8,924
23,732
7,860
28,338
28,338
0
14,775
167,987
2016
117,158
12.7
30,616
26.1
9,157
21,459
11,308
2,819
-74
12,896
3,874
30.0
20
9,002
8,928
165.2
2016
4,806
59,898
64,705
85,148
13,061
163,215
160,461
9,166
151,295
2,133
0
42,590
4,202
10,570
12,856
14,962
32,902
32,902
0
9,687
163,215
2017
100,536
-14.2
24,603
24.5
10,059
14,544
10,580
1,909
0
5,873
1,576
26.8
8
4,290
4,290
-52.0
2017
4,806
64,115
68,921
87,681
13,363
170,255
187,266
19,226
168,040
3,321
0
36,625
3,694
9,751
9,336
13,845
37,731
37,731
0
-1,106
170,255
2018
115,121
14.5
31,171
27.1
11,315
19,856
8,482
2,636
0
14,010
4,489
32.0
98
9,423
9,423
119.7
2018
4,806
72,389
77,195
92,981
14,799
185,334
209,170
30,463
178,707
3,925
0
43,258
4,549
11,305
9,982
17,423
40,556
40,556
0
2,702
185,334
2019
131,510
14.2
31,995
24.3
12,265
19,730
8,989
1,896
0
12,636
3,598
28.5
49
8,989
8,989
-4.6
2019
4,806
84,896
89,702
97,152
15,654
202,882
222,767
42,628
180,139
3,593
0
61,809
6,270
12,297
9,549
33,693
42,659
42,659
0
19,150
202,882
2020
136,406
3.7
35,561
26.1
13,043
22,518
9546
1776
-10,000
4,748
-7,040
-148.3
47
11,789
13,458
50.0
2020
4,806
86,729
91,535
89,000
5,528
186,420
231,364
55,671
175,693
5,676
1,160
53,702
5,982
12,798
8,879
26,044
49,811
49,811
0
3,891
186,420
2021E
136,769
0.3
34,914
25.5
13,558
21,356
8,010
1,821
0
15,167
3,640
24.0
8
11,527
11,519
-14.4
2021E
4,806
95,124
99,930
79,000
5,988
185,283
240,372
69,229
171,142
5,676
1,160
54,980
6,745
13,115
9,077
26,044
47,675
47,675
0
7,305
185,283
(INR Million)
2022E
139,790
2.2
36,917
26.4
13,859
23,058
6,660
1,835
0
18,233
4,376
24.0
8
14,030
14,021
20.2
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Million)
2022E
4,806
106,021
110,827
65,000
6,547
182,748
248,080
83,089
164,991
5,676
1,160
58,781
6,896
13,409
12,433
26,044
47,860
47,860
0
10,921
182,748
19 May 2020
5
 Motilal Oswal Financial Services
Torrent Power
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2015
7.1
22.4
138.8
1.5
21.0
22.9
7.3
1.2
7.1
0.9
6.0
6.9
0.6
31
9
22
1.1
2015
20,799
3,759
-847
-1,197
22,514
-12,575
9,939
1,482
-13
161
-10,945
0
-1,190
-11,694
-321
1,149
-12,055
-486
24,218
23,732
2016
18.6
37.6
134.6
6.0
32.3
12.5
6.2
1.7
6.0
2.6
13.9
9.8
0.7
33
13
23
1.1
2016
30,616
-534
-1,412
-3,167
25,503
-16,349
9,155
1,410
-13
202
-14,750
0
-8,055
-11,818
-3,442
1,686
-21,629
-10,876
23,732
12,856
2017
8.9
29.9
143.4
0.0
0.0
25.8
7.7
1.6
7.7
0.0
6.4
6.6
0.6
35
13
31
1.1
2017
24,603
236
385
-1,056
24,168
-21,745
2,423
732
-16
113
-20,916
0
2,442
-10,334
-62
1,182
-6,771
-3,520
12,856
9,336
2018
19.6
43.1
160.6
2.2
11.2
11.7
5.3
1.4
6.2
1.0
12.9
8.4
0.6
36
14
21
1.1
2018
31,171
-922
586
-3,200
27,635
-23,866
3,769
771
-17
-763
-23,875
0
5,276
-8,285
-1,310
1,205
-3,114
646
9,336
9,982
2019
18.7
44.2
186.6
5.0
26.7
15.4
6.5
1.5
7.1
1.7
10.8
8.5
0.6
34
17
22
1.0
2019
31,995
-4,729
-161
-2,859
24,246
-19,887
4,359
1,896
-19
1,066
-16,944
0
4,175
-9,076
-2,925
1,660
-6,166
1,136
9,982
11,118
2020
28.0
55.1
190.5
11.6
41.4
10.9
5.5
1.6
6.4
3.8
14.9
9.5
0.7
34
16
22
0.9
2020
35,561
1,258
2,512
-2,977
36,354
-13,337
23,017
1,776
0
20
-11,541
0
-8,480
-9,546
-10,798
2,762
-26,062
-1,249
9,549
8,300
2021E
24.0
52.2
207.9
6.5
27.1
12.7
5.8
1.5
6.2
2.1
12.0
9.5
0.7
35
18
22
0.7
2021E
34,914
-3,215
0
-3,180
28,519
-9,008
19,511
1,821
0
0
-7,187
0
-10,000
-8,010
-3,124
0
-21,134
198
8,879
9,077
2022E
29.2
58.0
230.6
6.5
22.3
10.5
5.3
1.3
5.4
2.1
13.3
10.3
0.8
35
18
22
0.5
2022E
36,964
-261
0
-3,871
32,832
-7,708
25,124
1,835
0
0
-5,873
0
-14,000
-6,480
-3,124
0
-23,604
3,356
9,077
12,433
Cash Flow Statement
Y/E Mar
EBITDA
WC
Others
Direct taxes (net)
CF from Op. Activity
Capex
FCFF
Interest income
Investments in subs/assoc.
Others
CF from Inv. Activity
Share capital
Borrowings
Finance cost
Dividend
Others
CF from Fin. Activity
(Inc)/Dec in Cash
Opening balance
Closing balance (as per B/S)
(INR Million)
19 May 2020
6
 Motilal Oswal Financial Services
Torrent Power
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 MOFSL, 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 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, 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 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
19 May 2020
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 Motilal Oswal Financial Services
Torrent Power
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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.
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