PNB Housing Finance
Estimate change
TP change
Rating change
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23 July 2020
1QFY21 Results Update | Sector: Financials
CMP: INR210
TP: INR210
Stable quarter; Moratorium rate declining
Neutral
PNBHOUSI reported 1QFY21 PAT of INR2.6b (v/s est. of INR600m). The beat
was driven by stronger PPoP and significantly lower credit cost.
Moratorium rate on the loan book declined to 39% in Phase 2 from 56% in
Phase 1.
AUM remained sequentially stable at INR835b. Given the high
leverage, we expect the company to continue to run down its balance sheet
until it raises fresh equity capital. Maintain Neutral, with TP of INR210.
As disbursements were negligible, AUM remained sequentially unchanged
at INR835b. The company did not sell down any loans in the quarter; hence,
upfront assignment income was nil v/s INR1.2b YoY.
While yield on loans was stable at 10.6%, cost of funds declined 30bp YoY,
leading to a similar improvement in spreads to 2.6%.
Cost of funds is likely
to further decline due to recent MCLR cuts by banks.
The GS3 ratio remained stable QoQ at 2.76%. While the company kept Stage
1 and 2 ECL provisions stable, it increased Stage 3 PCR from 36% to 40%
QoQ.
The share of moratorium granted to retail customers declined from 49% to
29% QoQ, while that for the overall book declined from 56% to 39% QoQ.
Collection efficiency stood at 96–97% during the quarter and was largely
stable each month. This comprises non-moratorium customers only.
Liquidity on the balance sheet stood at INR71b, i.e., 11% of borrowings.
The share of capital market borrowings (NCDs + CPs) declined to 22% from
32%. The company raised INR22.5b from NHB, the share of which now
stands at 10% of total borrowings.
Opex declined ~25% both QoQ and YoY. Management guided to 5–10%
YoY reduction in FY21.
Target INR130b retail lending disbursements in FY21. No fresh corporate
sanctions would be granted in FY21.
For its stressed IPL, the company sold one parcel of land and received
INR250m earnest money. The developer paid an additional INR250m in July
2020. The principal outstanding is now at INR690m from INR1.01b QoQ.
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
PNBHOUSI IN
167
35.4 / 0.5
748 / 146
-15/-53/-71
302
67.4
AUM stable; NIMs improve sequentially
Financials & Valuations (INR b)
Y/E March
2020 2021E
NII
18.1
17.5
PPP
20.6
16.9
PAT
6.5
7.5
EPS (INR)
38.4
44.7
EPS Gr. (%)
-46
16
BV/Sh. (INR)
476
509
Ratios
NIM (%)
2.6
2.6
C/I ratio (%)
21.1
23.4
RoAA (%)
0.8
1.0
RoE (%)
8.3
9.1
Valuations
P/E (x)
5.5
4.7
P/BV (x)
0.4
0.4
Div. Yield (%)
4.3
4.3
Shareholding pattern (%)
As On
Jun-20 Mar-20
Promoter
32.7
32.7
DII
4.9
6.3
FII
21.9
21.8
Others
40.6
39.2
FII Includes depository receipts
Gross Stage 3 stable; Moratorium rate declines
2022E
19.3
19.8
10.2
60.4
35
559
2.8
22.5
1.3
11.3
3.5
0.4
4.3
INR59b liquidity on the balance sheet; Opex declines sharply
Highlights from management commentary
Jun-19
32.7
7.8
21.4
38.1
Valuation and view
Over the past year, the key challenge for the company has been its high
leverage. This has resulted in the running down of the balance sheet. In the
current environment, this makes PNBHOUSI even more vulnerable to asset
quality shocks. While the recent improvement in NIM and reduction in opex is
encouraging, we wait and see the sustainability of the same. Maintain Neutral,
with TP of INR210 (0.4x FY22E BVPS).
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.
20 January 2020
Research Analyst: Piran Engineer
(Piran.Engineer@MotilalOswal.com) |Alpesh
Mehta
(Alpesh.Mehta@MotilalOswal.com)
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com) |
Divya Maheshwari
(Divya.Maheshwari@motilaloswal.com)
1
 Motilal Oswal Financial Services
PNB Housing Finance
Quarterly performance (INR m)
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Other income
Total Income
YoY Growth (%)
Operating Expenses
YoY Growth (%)
Operating Profits
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
Profit after tax
YoY Growth (%)
Key Operating Parameters (%)
Rep. Yield on loans
Rep. Cost of funds
Spreads
Net Interest Margins
Cost to Income Ratio
Credit Cost
Tax Rate
Balance Sheet Parameters
Loans (INR B)
Change YoY (%)
AUM (INR B)
Change YoY (%)
Borrowings (Ex Assign.) (INR B)
Change YoY (%)
Loans /Borrowings (%)
Off BS loans/AUM (%)
Debt/Equity (x)
Asset Quality Parameters (%)
GS 3 (INR Mn)
Gross Stage 3 (% on loans)
NS 3 (INR Mn)
Net Stage 3 (% on loans)
PCR (%)
1Q
19,794
15,127
4,667
10.1
2,532
7,199
31.2
1,417
9.6
5,782
37.9
1,642
4,140
1,296
2,845
11.2
10.84
8.31
2.53
3.14
19.7
0.88
31.3
759
18.8
883
28.8
722
19.5
105.1
14
9.2
6,454
0.85
5,088
0.67
21.2
FY20
FY21
FY20
FY21 4QFY20 v/s Est.
2Q
3Q
4Q
1Q
2Q
3Q
4Q
20,159 18,904 18,026 18,015 17,835 17,657 17,093 76,882 70,600 17,665
2
15,213 14,610 13,800 13,635 13,499 13,296 12,689 58,750 53,120 13,524
1
4,946 4,293 4,226 4,380 4,336 4,360 4,404 18,133 17,480
4,141
6
29.1
21.3
-9.2
-6.2
-12.3
1.6
4.2
11.5
-3.6
-11.3
2,145 1,844 1,493
708
965 1,315 1,620 8,013 4,608
1,012
-30
7,091 6,138 5,719 5,088 5,301 5,675 6,024 26,146 22,088
5,153
-1
22.4
-8.1
-20.6
-29.3
-25.2
-7.5
5.3
3.9
-15.5
-28.4
1,315 1,347 1,443 1,042 1,249 1,347 1,536 5,522 5,175
1,389
-25
-7.5
-13.9
-12.8
-26.4
-5
0
6.5
-7
-6.3
-2
5,776 4,790 4,276 4,046 4,052 4,328 4,488 20,624 16,913
3,765
7
32.1
-6.4
-23
-30
-29.8
-9.7
5
7.2
-18
-34.9
1,516 1,808 7,548
751 2,000 2,250 2,280 12,514 7,281
3,000
-75
4,260 2,983 -3,272 3,295 2,052 2,078 2,208 8,110 9,632
765
331
592
612
-852
723
451
457
488 1,648 2,119
161
350
3,668 2,370 -2,421 2,572 1,600 1,621 1,720 6,462 7,513
604
326
45
-21.8 -163.7
-9.6
-56.4
-31.6 -171.1
-45.8
16.3
-78.8
10.95
8.34
2.61
3.19
18.5
0.81
13.9
744
11.3
895
21.8
715
12.3
104.1
16.9
8.9
10.74
8.21
2.53
2.98
21.9
1.01
20.5
691
-2.2
863
8.2
706
2
98
19.9
8.5
10.26
8.03
2.23
2.61
25.2
4.42
26
676
-8.7
833
-1.6
682
-5.7
99.1
18.9
8.5
10.32
8.13
2.19
2.66
20.5
0.44
21.9
680
-10.4
835
-5.5
673
-6.8
101.1
18.5
8.4
21.1
1.78
20.3
666
-10.3
833
-1.6
677
-5.7
98.4
20.1
8.5
23.4
1.1
22
657
-1.3
832
-0.1
664
-2
99
21
7.7
26.9 -500 BPS
0.65
35.93
21.5 -97 BPS
736
4.1
904
13.3
707
2.2
104.2
18.5
8.7
-6.12
-4.5
-0.2
6,246 12,099 18,582 18,770
0.84
1.75
2.75
2.76
4,833 9,956 11,825 11,358
0.65
1.44
1.75
1.67
22.6
17.7
36.4
39.5
18,582 18,582
2.75
2.75
11,825 11,825
1.75
1.75
36.4
36.4
E: MOFSL Estimates
23 July 2020
2
 Motilal Oswal Financial Services
PNB Housing Finance
Highlights from management commentary
Business updates
The company received sanction to sell down INR3.5b worth of corporate
accounts to banks.
It increased corporate loan yields by 100–125bp in the quarter.
INR5b per month has been collected in retail lending in the past three months.
INR1.25b corporate collections were made in April. This increased to INR4b in
May and INR5b in June.
The search for a new CEO is happening ‘very fast’.
It would maintain two to three months worth of borrowing repayments of
liquidity on the BS.
Yield: HL – 9.52%, LAP – 10.6%; Corp – 12.5–13%
Asset quality / Moratorium
Around 5k of 40k moratorium customers in the second phase subsequently
withdrew from the moratorium.
Around 90% of Morat 2.0 customers had also
availed Morat 1.0.
IPL – One mortgaged parcel of land was auctioned in the quarter, and the
company received INR250m earnest money. The developer paid an additional
INR250m in July 2020. The principal outstanding is now at INR690m from
INR1.01b in March.
Supertech – The promoter and other parties are interested in resolving the
account. However, this would take some time to reach resolution.
Vipul Ltd. – PNBHOUSI had a court case with the promoter. The court has
allowed PNBHOUSI to auction the property under SARFAESI.
Radius – INR2.5b is outstanding. PNBHOUSI has started legal proceedings. Two
developers are interested.
Ornate – INR1.81b is outstanding. The company has been admitted to NCLT.
IREO – The promoter entirely paid overdues. Hence, the company is now
classified as 0dpd (earlier it was in Stage 2 due to SICR). The builder is
expected to make further payments by 5
th
August.
60% of the construction finance book is under principal moratorium. Still, the
company received INR6b repayments from customers, but this was left in the
escrow account for the developer to use.
INR34.22b of the construction finance book is for projects that are less than
50% constructed. Of this, INR10b is NPL, while the rest is 0dpd.
The increase in moratorium since 5
th
June (prior earnings call) is due to
customers now knowing that it was an opt-in option. Later, when the company
reached out to customers, some of them opted for it.
Collection efficiency in July is 98.1% (this comprises non-moratorium customers
only).
It received INR7b extra EMI repayments from retail customers in June.
Guidance
Target INR130b retail lending disbursements in FY21. No fresh corporate
sanctions would be granted in FY21. AUM growth would remain steady this
fiscal.
Expect share of retail AUM to increase to more than 85% in FY21.
23 July 2020
3
 Motilal Oswal Financial Services
PNB Housing Finance
Expect spreads of 200–210bp in FY21.
Opex is expected to reduce by 5–10% YoY in FY21.
Expect cost of bank borrowings to decline in 2HFY21 due to recent MCLR cuts.
Others
Morat numbers are similar across under-construction and completed projects.
Likewise, they are similar among various ticket size ranges and between Home
Loans and LAP.
ALM in the PPT is on a behavioral basis.
Exhibit 1: Status of stressed accounts
Company
IREO Pvt. Ltd
Supertech
Ornate
Radius
Vipul Ltd
Current Outstanding
(INR b)
Current Status
Auctioned one of the two land parcels; received INR250m earnest
0.69
money; in addition, promoter paid additional INR250m in July
1.81
Admitted to NCLT
2.50
Started legal proceedings
Initiated SARFAESI
Location
Gurgaon
Gurgaon
Mumbai
Mumbai
Gurgaon
Source: MOFSL, Company
Key exhibits
Exhibit 2: AUM sequentially stable
47
43
AUM (INR b)
38
36
29
YoY Growth (%)
Exhibit 3: Loan book down 10% YoY
45
Loans (INR b)
37
28
30
19
11
-2
-9
-10
YoY Growth (%)
22
8
-2
-5
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 4: Loan mix stable QoQ (%)
Home loan
8
6
16
13
56
8
5
16
12
58
8
5
16
13
57
CF
8
4
17
13
58
LAP
8
3
18
13
59
8
3
18
12
59
LRD
8
2
19
12
59
Others
8
2
20
12
58
8
2
20
13
58
Exhibit 5: Share of salaried customers unchanged (%)
Salaried
22.6
36.8
40.7
21
36
22
35
Self Employed
21
35
20
36
19
36
Corporates
18
37
18
37
18
38
43
43
44
44
45
45
45
44
Source: MOFSL, Company
Source: MOFSL, Company, Corporates include LRD, CF, Corp. TL
23 July 2020
4
 Motilal Oswal Financial Services
PNB Housing Finance
Exhibit 6: Share of capital market borrowings down (%)
NCD
5
20
2
18
12
33
CP
12
7
17
6
17
11
30
Deposits
8
18
6
17
10
28
15
8
21
6
18
8
25
ECB
17
8
22
6
20
5
22
TL
NHB
20
7
23
6
19
3
22
Assignment
19
7
24
7
20
1
23
19
10
23
7
20
1
20
54
45
Exhibit 7: Disbursements muted
Disbursement (INR b)
110
45
25
14
1
-2
Growth (%)
-22 -41
-66 -67
-91
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 8: Spreads improve ~40bp YoY
10.1
Yield on loans (%)
10.3 10.5 10.6
8.5
8.4
Cost of funds (%)
10.7 10.5 10.5 10.6
8.5
Exhibit 9: Expense ratio improves
0.8
0.8
C/I Ratio (%)
0.8
0.8
0.7
Opex/Avg AUM (%)
0.6
0.6
0.7
0.5
9.9
7.9
7.7
8.1
8.2
8.0
8.1
Source: MOFSL, Company, Calculated
Source: MOFSL, Company, Calculated
Exhibit 10: No loans sold down during quarter
Assignment Income (INR m)
Exhibit 11: Credit cost trend
Credit Cost (%)
3.6
0.4
0.6
0.3
0.4
0.4
0.8
0.0
0.8 0.7
0.4
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 12: Increased Stage 3 provisions
ECL Prov S1&2 (%)
ECL Prov S 3 (%)
36.2
24.5
22.0
22.7
20.9
23.2
22.3
28.4
39.7
Exhibit 13: Total ECL provisioning modestly increases
Total ECL Prov (%)
2.6
1.3
2.7
0.5
0.4
0.5
0.5
0.5
0.6
0.8
0.8
1.7
1.7
0.5
0.6
0.6
0.6
0.8
1.0
Source: MOFSL, Company
Source: MOFSL, Company
23 July 2020
5
 Motilal Oswal Financial Services
PNB Housing Finance
Exhibit 14: Asset quality stable
GS3 (INR b)
GS3 (%)
2.7
1.8
2.8
0.4
3.0
0.4
3.4
0.5
3.5
0.5
0.8
6.5
0.8
6.2
12.1
18.6
18.8
2.1
0.3
2.3
0.4
2.6
0.4
2.8
Exhibit 15: Net Stage 3 at 1.7% of loans
NS3 (INR b)
NS3 (%)
1.8
1.4
2.8
0.4
5.0
0.7
0.7
4.9
8.7
11.8
11.3
1.7
Source: MOFSL, Company
Source: MOFSL, Company
Valuation and view
The company is currently dealing with external and internal challenges. Tight
liquidity in the capital markets, coupled with a stressed Real Estate market in
certain geographies, has impacted most HFCs.
However, PNBHOUSI also has to deal with its high leverage. In this backdrop, it
would not be able to grow its loan assets until it raises adequate equity capital.
We estimate flat AUM in FY21, with a pickup in AUM growth to 5% in FY22.
While the moratorium number has improved over the past quarter, it remains
higher than that of some large banks and HFCs. As a result, we believe asset
quality is going to be a challenge in FY21.
However, in the quarter, the company has done a good job of improving spreads
and curtailing opex. The opex reduction, if sustainable, would be the key driver
for RoA improvement in the near-to-medium term.
While FY21 will be a muted year in terms of profitability, we expect RoE to inch
back up to 11% in FY22E. Note that we have not factored any capital raise in our
estimates. Maintain Neutral, with TP of INR210 (0.4x FY22 BVPS).
Exhibit 16: Valuation matrix
HFCs
LICHF
PNBHOUSI
Vehicle fin.
SHTF
MMFS
CIFC
Diversified
BAF
SCUF
LTFH
MUTH
MAS
66
Rating
FY22E
CMP
(INR)
274
210
703
149
222
3,298
699
62
1,306
675
Mcap
(USDb)
1.8
0.4
2.1
1.3
2.4
26.1
0.6
1.7
7.1
0.5
P/E (x)
FY21E
FY22E
6.4
11.4
10.4
20.1
17.9
44.6
6.4
12.5
14.6
21.9
5.7
4.4
6.1
16.6
13.8
27.3
6.1
6.5
12.8
18.3
P/BV (x)
FY21E
FY22E
0.7
0.4
0.8
1.2
2.1
5.4
0.6
0.8
3.6
3.3
0.6
0.4
0.8
1.1
1.8
4.6
0.5
0.7
3.0
2.9
RoA (%)
FY21E
FY22E
1.0
0.4
1.5
1.2
1.6
2.5
2.3
0.9
6.7
3.7
1.1
1.1
2.6
1.5
1.9
3.6
2.3
1.7
6.7
4.0
RoE (%)
FY21E
FY22E
11.5
3.8
8.7
6.8
12.1
12.9
9.6
6.7
27.7
16.0
11.8
9.4
13.0
7.0
13.9
18.3
9.2
12.0
25.6
16.9
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
*Adjusted for investments in subsidiaries
23 July 2020
6
 Motilal Oswal Financial Services
PNB Housing Finance
Financials and valuations
Income statement
Y/E March
Interest Income
Interest Expended
Net Interest Income
Change (%)
Other Operating Income
Net Income
Change (%)
Operating Expenses
Operating Income
Change (%)
Provisions/write offs
Reported PBT
Tax
Tax Rate (%)
Reported PAT
Change (%)
Proposed Dividend
2016
25,461
18,603
6,858
68.9
1,534
8,393
62.8
2,521
5,872
76.6
832
5,040
1,766
35.0
3,273
68.7
486
2017
36,401
26,437
9,964
45.3
2,678
12,642
50.6
3,573
9,069
54.5
1,029
8,040
2,803
34.9
5,237
60.0
1,196
2018
50,467
35,366
15,101
51.6
4,426
19,528
54.5
4,416
15,112
66.6
2,766
12,346
3,934
31.9
8,412
60.6
1,799
2019
67,929
51,664
16,265
7.7
8,904
25,169
28.9
5,935
19,234
27.3
1,890
17,344
5,429
31.3
11,915
41.7
1,809
2020
76,882
58,750
18,133
11.5
8,013
26,146
3.9
5,522
20,624
7.2
12,514
8,110
1,648
20.3
6,462
-45.8
1,816
2021E
70,600
53,120
17,480
-3.6
4,608
22,088
-15.5
5,175
16,913
-18.0
7,281
9,632
2,119
22.0
7,513
16.3
1,803
2022E
72,086
52,780
19,306
10.4
6,274
25,579
15.8
5,748
19,832
17.3
6,804
13,028
2,866
22.0
10,161
35.2
1,829
(INR M)
2023E
78,378
56,776
21,602
11.9
7,462
29,063
13.6
6,387
22,677
14.3
4,481
18,196
4,003
22
14,193
39.7
2,555
(INR M)
2023E
1,682
1,03,976
1,05,658
7,66,519
11.2
42,550
9,14,727
7,90,226
12.4
28,884
15.0
1,567
94,051
9,14,727
Balance sheet
Y/E March
Capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Other liabilities
Total Liabilities
Loans
Change (%)
Investments
Change (%)
Net Fixed Assets
Other assets
Total Assets
E: MOFSL Estimates
2016
1,269
20,190
21,459
2,60,137
57.8
14,809
2,96,405
2,71,813
61.8
16,223
2.3
622
7,747
2,96,405
2017
1,656
56,340
57,996
3,53,207
35.8
14,974
4,26,177
3,87,347
42.5
33,236
104.9
604
4,990
4,26,177
2018
1,666
64,008
65,673
5,37,767
52.3
26,704
6,30,145
5,71,648
47.6
24,130
-27.4
858
33,509
6,30,145
2019
1,675
73,764
75,439
7,18,589
33.6
44,662
8,38,690
7,42,879
30.0
45,607
89.0
1,083
49,122
8,38,690
2020
1,682
78,296
79,978
6,77,351
-5.7
31,969
7,89,297
6,66,280
-10.3
20,757
-54.5
1,353
1,00,906
7,89,297
2021E
1,682
84,006
85,688
6,64,058
-2.0
35,165
7,84,911
6,57,483
-1.3
22,833
10.0
1,421
1,03,174
7,84,911
2022E
1,682
92,338
94,020
6,89,283
3.8
38,682
8,21,985
7,03,350
7.0
25,116
10.0
1,492
92,027
8,21,985
23 July 2020
7
 Motilal Oswal Financial Services
PNB Housing Finance
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg yield on loans
Avg. cost of funds
Interest Spread
NIM on loans
Profitability Ratios (%)
RoE
RoA
Int. Expended/Int.Earned
Other Inc./Net Income
Efficiency Ratios (%)
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset Quality (INR m)
Gross NPA
GNPA ratio
Net NPA
NNPA ratio
VALUATION
Book Value (INR)
BVPS Growth YoY
Price-BV (x)
EPS (INR)
EPS Growth YoY
Price-Earnings (x)
Dividend per share (INR)
Dividend yield (%)
E: MOFSL Estimates
2016
11.2
8.8
2.4
3.1
17.6
1.3
73.1
18.3
30.0
29.9
598
0.2
381
0.1
2016
169.1
11.2
25.8
38.0
3.4
2017
10.6
8.6
2.0
3.0
13.2
1.4
72.6
21.2
28.3
28.3
858
0.2
590
0.2
2017
350.1
107.1
31.6
22.6
6.0
2018
10.2
7.9
2.3
3.1
13.6
1.6
70.1
22.7
22.6
32.6
1,861
0.3
1,438
0.3
2018
394.2
12.6
50.5
59.7
9.0
2019
10.1
8.2
1.9
2.5
16.9
1.6
76.1
35.4
23.6
51.2
3,549
0.5
2,784
0.4
2019
450.5
14.3
71.1
40.9
9.0
2020
10.6
8.4
2.1
2.6
8.3
0.8
76.4
30.6
21.1
42.2
18,562
2.8
11,838
1.8
2020
475.5
5.6
0.4
38.4
-46.0
5.5
9.0
4.3
2021E
10.3
7.9
2.4
2.6
9.1
1.0
75.2
20.9
23.4
45.0
38,551
5.7
25,058
3.8
2021E
509.5
7.1
0.4
44.7
16.3
4.7
8.9
4.3
2022E
10.2
7.8
2.4
2.8
11.3
1.3
73.2
24.5
22.5
45.4
45,126
6.3
29,332
4.2
2022E
559.0
9.7
0.4
60.4
35.2
3.5
9.1
4.3
(%)
2023E
10.1
7.8
2.3
2.9
14.2
1.6
72.4
25.7
22.0
45.8
48,642
6.0
31,617
4.0
2023E
628.2
12.4
0.3
84.4
39.7
2.5
12.7
6.0
23 July 2020
8
 Motilal Oswal Financial Services
PNB Housing Finance
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 - MOFSL) 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
********************************************************************************************************************************
23 July 2020
9
 Motilal Oswal Financial Services
PNB Housing Finance
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.
* MOFSL 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.
23 July 2020
10