Piramal Enterprises
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
PIEL IN
615
309 / 4.3
2001 / 608
-8/-6/-22
2752
31 July 2020
1QFY21 Results Update | Sector: Financials
CMP: INR1,369
TP: INR1,600 (+17%)
Lending business stable; Pharma recovering
Buy
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Financials & Valuations (INR b)
Y/E March
2020 2021E
Revenues
130.7 129.1
EBITDA
17.9
21.6
PAT
-5.5
16.9
EPS (INR)
-24.5
74.8
EPS Gr. (%)
BV/Sh. (INR)
1,274 1,322
Payout (%)
-53
35
Valuations
P/E (x)
18.3
P/BV (x)
1.1
1.0
Div. Yield (%)
0.9
1.9
Shareholding pattern (%)
As On
Jun-20 Mar-20
Promoter
46.1
46.1
DII
9.9
9.7
FII
30.3
30.2
Others
13.8
14.1
FII Includes depository receipts
2022E
141.3
27.5
22.1
93.4
25
1,392
35
14.7
1.0
2.4
Piramal Enterprises (PIEL) reported 11% YoY growth in PAT to INR5.0b. The
lending book was stable, while margins improved sharply QoQ (on a lower
base of 4Q +230bp) to 6.5%. Asset quality was stable, with GNPA% at 2.5%
and ECL provisions remaining high at 5.9% (5.8%) of loans.
Pharma business sales were at nearly 90% of 1QFY20 levels, although
EBITDA margins were a challenge. The company continues to carry
unallocated networth of INR30b+ for any inorganic opportunities.
We expect FY21 to be a challenging year for the Financial Services business.
We forecast the loan book to be stable in FY21 and grow modestly in FY22.
The company has a provision buffer of ~6% of loans and conservatively, we
build in additional credit cost of 2.5% each year in FY21/FY22. The recent
Pharma stake sale to Carlyle is a step in the right direction. Maintain Buy,
with TP of INR1,600 (SOTP-based).
FS – Balance sheet stable; Margins improve
Jun-19
46.1
9.1
29.3
15.6
The loan book was largely stable at INR513b, with a steady share of retail
and wholesale loans. The company increased lending rates by ~100bp,
while cost of funds declined 40bp sequentially.
As a result, NIM was the
highest in the past five quarters at 6.5%.
In 1QFY21, the company raised INR96b in long-term borrowings. The
share of bank borrowings was up 300bp QoQ to 68%. CPs were down to
just INR9b.
The GNPL ratio / Total provisions marginally increased by 10bp QoQ to
2.5%/5.9%. The top 10 exposures remained largely stable QoQ at INR142b.
Sales declined 10% YoY to INR10.4b for 1QFY21, weighed by COVID-19-led
disruption across CDMO (-5% YoY), Complex Hospital Generics (-22% YoY),
and India Consumer Healthcare (-4% YoY).
The EBITDA margin contracted considerably to 11% in the quarter (from
21% in FY20) due to lower revenue from Complex Hospital Generics and
reduced operating leverage.
The deferment of surgeries in the Hospital segment impacted overall
performance in PIEL’s Pharma segment. However, the phase-wise easing of
the lockdown is improving the outlook across the CDMO and Complex
Hospital Generics segments.
The company will roll out retail lending products such as LAP and small
business loans around the Diwali festival in 15–20 towns.
Housing sales in Apr/May/June were 10%/22%/40% of pre-COVID-19 levels.
INR34b of the INR37b Pharma stake sale would go to the parent.
67%/25% of wholesale/retail AUM is under moratorium.
Pharma – Margins under pressure
Highlights from management commentary
14
Oswal
2020
1
Motilal
January
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.
Research Analyst: Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com) |
Piran Engineer
(Piran.Engineer@MotilalOswal.com)
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com) |
Divya Maheshwari
(Divya.Maheshwari@motilaloswal.com)
 Motilal Oswal Financial Services
Piramal Enterprises
Valuation and view
Over the past year, PIEL has curtailed disbursements in wholesale lending and
reduced exposure to its top 10 clients. In our view, FY21 would remain a year of
caution for the FS business, with the company continuing its focus on strengthening
the balance sheet. With lumpy exposures and a tough environment, we forecast
2.5% credit cost for each of the next two years. The Pharma business is witnessing
increased traction, and the recent stake sale has set a benchmark for its valuation.
Using SOTP, we arrive at TP of
INR1,600
(FY22E-based). Maintain
Buy.
Quarterly Performance
Y/E March
1Q
FY19
2Q
3Q
4Q
1Q
FY20
2Q
3Q
4Q
INR m
FY21
1Q
Financial Services Business
Revenues (INR m)
15,586
17,316
18,405
19,328
20,144
19,540
19,626
17,184 18,995
Change QoQ (%)
11.7
11.1
6.3
5.0
4.2
-3.0
0.4
-12.4 10.5
Change YoY (%)
43.8
46.0
39.9
38.5
29.2
12.8
6.6
-11.1
-5.7
PBT (INR Mn)
6,138
6,460
6,626
5,284
7,344
7,355
5,904 -17,049 6,261
Change QoQ (%)
16.1
5.2
2.6
-20.3
39.0
0.1
-19.7
-388.8 -136.7
Change YoY (%)
37.7
36.6
21.3
-0.1
19.6
13.9
-10.9
-422.7 -14.7
AUM
470
528
553
566
566
531
514
510
513
Change QoQ (%)
11.4
12.3
4.7
2.5
0.0
-6.3
-3.1
-0.9
0.6
Change YoY (%)
64.0
58.7
45.3
34.3
20.4
0.5
-6.9
-10.0
-9.4
ROAs (Cal %)
5.5
5.2
4.9
3.8
5.2
5.4
4.5
-13.3
4.9
Reported Leverage (D/E x)
3.9
4.4
4.6
3.9
3.8
2.8
2.5
2.3
2.2
ROEs (Cal %)
14.6
15.0
14.9
11.4
15.7
15.7
12.3
-35.1 12.6
NIMs (% Cum Rep)
7.1
6.9
6.6
6.4
5.7
5.4
5.5
5.2
6.5
Yield on loans (% Cum Rep)
13.9
13.7
13.7
13.7
14.0
14.0
14.3
14.3 15.2
Cost of funds (% Cum Rep)
8.5
8.6
8.7
9.0
10.3
11.0
11.1
11.2 10.8
GNPA %
0.3
0.5
0.5
0.9
0.9
0.9
1.8
2.4
2.5
ECL %
1.8
1.7
1.8
1.9
1.9
1.8
1.8
5.8
5.9
AUM Mix (%)
Residential Real Estate
39.0
39.0
38.0
41.0
42.3
48.0
47.0
47.0
0.0
Commercial Real Estate
7.0
5.0
4.0
4.0
0.0
22.0
23.0
23.0
0.0
Housing Loans
3.0
4.0
7.0
9.0
11.0
12.0
12.0
11.0
0.0
Corporate and Others
51.0
52.0
51.0
46.0
46.7
18.0
18.0
19.0 100.0
Borrowing Mix (%)
Term Loans
51.0
47.0
56.0
63.0
63.0
67.0
65.0
65.0 62.0
NCDs
20.0
17.0
17.0
19.0
19.0
18.0
18.0
19.0 19.0
Securitization
0.0
0.0
0.0
0.0
0.0
6.0
8.0
7.0
6.0
Others
29.0
36.0
27.0
18.0
18.0
9.0
9.0
9.0 13.0
Pharma Business
Revenues (INR Mn)
10,658
11,204
11,571
14,765
11,726
13,164
13,073
16,226 10,379
Change QoQ (%)
-21.7
5.1
3.3
27.6
-20.6
12.3
-0.7
24.1 -36.0
Change YoY (%)
16.1
2.4
7.7
8.4
10.0
17.5
13.0
9.9 -11.5
EBITDA (INR Mn)
1,578
2,190
2,529
3,512
2,442
3,060
4,085
4,749 1,093
Change QoQ (%)
-27.2
38.8
15.5
38.9
-30.5
25.3
33.5
16.2 -77.0
Change YoY (%)
14.3
-15.6
36.2
62.0
54.7
39.7
61.5
35.2 -55.2
Revenue Mix
Global
91.9
91.8
91.3
94.1
90.7
91.5
91.3
95.3 90.4
Domestic
8.1
8.2
8.7
5.9
9.3
8.5
8.7
4.7
9.6
Global EBITDA Margins
20.0
20.0
21.0
23.0
22.0
24.0
23.0
26.0 11.0
Only 1QFY21, 4QFY20 and 1QFY20 numbers are comparable as other quarters are yet to be restated for the sale of the IT business.
31 July 2020
2
 Motilal Oswal Financial Services
Piramal Enterprises
Highlights from management commentary
Business updates
The focus is on making the book more granular. It is not chasing growth in FY21.
In retail home loans, PIEL would move from affluent housing finance to mass
housing and affordable housing finance.
PIEL would also roll out LAP and small business lending in the retail financing
segment in FY21. The company is currently working on credit policies,
processes, and technology for the same. It plans to roll them out around
Diwali in 15–20 towns. It would not compete in large, overcrowded markets.
It plans to get wholesale loans (real estate and renewables) refinanced by other
entities during the course of the year.
Housing sales in Apr/May/June were 10%/22%/40% of pre-COVID-19 levels.
90% of PIEL’s portfolio is in the affordable and mid-market segments.
Construction has already commenced for 74% of projects.
INR34b of the INR37b Pharma stake sale to Carlyle would go back to PIEL.
Commercial Real Estate accounts for 8% of loans (INR37b), of which LAP/LRD is
INR13b (65% LTV). The rest is toward under-construction projects. There could
be a six-month delay in construction. There is no exposure to malls.
Hospitality has an INR20b loan book. Do not expect recovery in the next 12–18
months. Exposure is to operating assets with marquee brands such as Taj,
Hyatt, and Marriott.
Increased pricing on loans has been witnessed over the past year.
67%/25% of wholesale/retail AUM is under moratorium.
The company resolved an Emerging Corp Lending NPL, a solar project of IL&FS,
during the quarter. The project was taken over by Embassy Park. It was a
consortium loan. It would forego INR70–80m interest.
Collection efficiency for Apr/May/Jun was 10%/20%/40%+.
While PIEL’s Pharma business was impacted by COVID-19, management
indicated U-shaped recovery over the next two to three quarters.
Particularly, the pace of surgeries has rebounded with the easing of the
lockdown; thus, performance is expected to normalize over the near-to-medium
term in the Complex Hospital Generics segment.
Management indicated peak asset turnover of USD35–40m over three to four
years from the solid oral dosage drug product facility recently acquired.
The oral dosage facility is primarily for CDMO activities.
Pharma sales on a constant currency basis were down 16% YoY.
Certain Complex Hospital Generics products are being used in the COVID-19
treatment. Also, it is witnessing demand for sanitizers and other related
products.
PIEL has witnessed incremental business opportunities related to COVID-19 in
the CDMO segment.
There are better prospects in the Consumer Healthcare categories, such as
hygiene or preventive healthcare products.
Asset quality / Moratorium
Pharma
31 July 2020
3
 Motilal Oswal Financial Services
Piramal Enterprises
Others
It acquired last-mile funding from various AIFs (SBI and so forth) for some stuck
projects.
It would be able to comply with the RBI’s draft guideline on the eligibility of HFC
licenses as and when they come.
The ALM table in PPT factors the moratorium availed by its borrowers.
Unallocated networth – Shriram, Cash, DTA, tax receivables, investments in
funds, etc.
The Lodha exposure was flat QoQ at INR30b.
The AUM increase is due to interest capitalization.
The share of construction finance is largely stable QoQ.
Valuation and view
Over the past year, PIEL deleveraged its balance sheet through: a) infusing
INR54b equity via preferential and rights issue, b) the sale of DRG for USD900m,
and c) a 20% stake sale in the Pharma segment to Carlyle for EV of USD2.8b.
As
a result, net debt to equity for the consolidated entity stands at just 1.2x.
In the Real Estate segment, the company seeks to sell-down loans, a prudent
decision in this environment. In our view, FY21 would be a year of flat AUM, and
growth would pick up only in FY22.
The total provision buffer of INR30b on the balance sheet is comforting.
However, we do acknowledge that there could be incremental provisioning over
the next few quarters. We keep credit costs elevated over the next two years
(3% per year).
The Pharma business is witnessing increased traction. The recent stake sale to
Carlyle has set the benchmark for its valuation.
We arrive at TP of
INR1,600
using SOTP (FY22-based).
Buy.
Exhibit 1: SOTP (FY22E-based)
Value
(INR B)
184
124
38
34
379
325
16.9
Value
(USD B)
2.5
1.6
0.5
0.4
5.1
4.3
16.9
INR per
share
778
522
159
142
1,600
1,369
16.9
Source: MOFSL, Company
% To
Total
49
33
10
9
100
Rationale
1.0x PBV
Pharma EV/EBITDA 12x; EV of INR205b; 80% Stake; 20% Holdco
dis
Based on our TP for SHTF and SCUF
1x PBV (Net of DTA, OCI and Shriram Group allocated NW)
Implied 1.2x Consolidated BV
Lending Business
Pharma Business
Shriram Group
Unallocated NW
Total Value
Current market cap.
Upside (%)
31 July 2020
4
 Motilal Oswal Financial Services
Piramal Enterprises
Key exhibits
Exhibit 2: Loan book sequentially stable
64
59
Loan book (INR b)
45
34
Growth (%)
Exhibit 3: NIM improves sequentially (%)
8.0
7.7
NIM %
7.1
6.9
6.6
6.4
5.7
5.4
5.5
5.2
6.5
20
0
-7
514
-10
510
-9
513
470
528
553
566
566
531
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 4: GNPL ratio sequentially stable (%)
2.4
1.8
0.9
0.9
0.9
2.5
Exhibit 5: Return ratios normalize (%)
RoA
17.0
17.0
16.6
16.6
17.0
RoE
14.9
13.6
1.9
3.6
3.4
3.3
3.2
3.5
3.4
3.3
0.5
3.8
12.0
0.3
0.3
0.5
0.5
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 6: Global Pharma revenue down 12% YoY
16
7
Global Pharma (INR b)
14
12
9
17
Growth (%)
13
11
Exhibit 7: Share of Indian Consumer increases sequentially
Global Pharma (%)
8.1
8.2
8.7
5.9
India Consumer & Others (%)
9.3
8.5
8.7
4.7
9.6
91.9
9.8
10.3
10.6
13.9
10.6
12.0
11.9
-12
15.5 9.4
91.8
91.3
94.1
90.7
91.5
91.3
95.3
90.4
Source: MOFSL, Company
Source: MOFSL, Company
31 July 2020
5
 Motilal Oswal Financial Services
Piramal Enterprises
Exhibit 8: Valuation matrix
Rating
66
FY22E
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
CMP
(INR)
1,811
264
210
683
132
214
3,218
662
60
1,301
634
Mcap
(USDb)
43.2
1.8
0.5
2.2
1.1
2.4
26.3
0.6
1.7
7.2
0.5
P/E (x)
FY21E
17.5
6.2
4.7
10.1
17.8
17.2
43.6
6.1
12.2
14.5
20.6
FY22E
13.4
5.5
3.5
6.0
14.7
13.3
26.7
5.7
6.3
12.7
17.2
P/BV (x)
FY21E
1.9
0.7
0.4
0.8
1.1
2.0
5.3
0.6
0.8
3.6
3.1
FY22E
1.4
0.6
0.4
0.7
1.0
1.7
4.5
0.5
0.7
2.9
2.7
RoA (%)
FY21E
1.8
1.0
1.0
1.5
1.2
1.6
2.5
2.3
0.9
6.7
3.7
FY22E
1.7
1.1
1.3
2.6
1.5
1.9
3.6
2.3
1.7
6.7
4.0
RoE (%)
FY21E
12.4
11.5
9.1
8.7
6.8
12.1
12.9
9.6
6.7
27.7
16.0
FY22E
12.1
11.8
11.3
13.0
7.0
13.9
18.3
9.2
12.0
25.6
16.9
HFCs
HDFC*
LICHF
PNBHF
Vehicle fin.
SHTF
MMFS
CIFC
Diversified
BAF
SCUF
LTFH
MUTH
MAS
31 July 2020
6
 Motilal Oswal Financial Services
Piramal Enterprises
Financials and valuations
INCOME STATEMENT
FY16
FY17
FY18
FY19
FY20
63,815
85,468
1,06,394
1,32,153
1,30,683
Revenues
24.6
33.9
24.5
24.2
-1.1
Change (%)
13,726
21,007
29,611
36,582
17,889
EBITDA*
57.8
53.0
41.0
23.5
-51.1
Change (%)
3,266
6,028
8,001
9,809
14,336
HealthCare
8,185
12,837
19,933
24,507
3,553
Financial Services #
2,276
2,143
1,677
2,266
Info Mgmt
11,172
17,190
24,838
31,380
12,686
EBIT*
92.6
53.9
44.5
26.3
-59.6
Change (%)
1,151
3,124
4,244
5,880
9,208
HealthCare
8,159
12,813
19,897
24,431
3,478
Financial Services #
1,862
1,254
697
1,069
Info Mgmt
-4,028
-3,988
-5,200
-6,605
-3,510
Unallocated Inc/(Exp)
7,144
13,202
19,638
24,775
9,176
Core PBT
110.6
84.8
48.7
26.2
-63.0
Change (%)
457
-99
0
-4,656
0
Exceptional Items
7,600
13,103
19,638
20,119
9,176
Reported PBT
495
2,281
6,928
8,611
19,604
Taxes
6.5
17.4
35.3
42.8
213.7
Tax Rate (%)
7,105
10,821
12,710
11,507
-10,429
PAT
-73.6
52.3
17.5
-9.5
-190.6
Change (%)
0
-3
0
0
0
Minority Interest
1,942
1,699
2,801
3,194
4,896
Share from Asso. Co
9,047
12,523
15,511
14,701
-5,533
PAT Post MI
-68.3
38.4
23.9
-5.2
-137.6
Change (%)
3,635
4,348
5,415
6,065
3,500
Dividend (Including Tax)
* Ex Exceptional, # Post interest expenses; FY16-18 nos based on IND AS; FY18 Excluding one-off DTA of INR35.6b
BALANCE SHEET
Y/E MARCH
Equity Share Capital
Reserves (Ex OCI)
Networth
OCI
Networth
Change (%)
Borrowings
Change (%)
Other liabilities
Change (%)
Total Liabilities
Loans+Investments
Change (%)
Goodwill
Fixed Assets
Other assets
Change (%)
Total Assets
FY21E
1,29,071
-1.2
21,576
20.6
10,136
11,440
16,198
27.7
4,758
11,440
490
16,688
81.9
0
16,688
4,172
25.0
12,516
-220.0
0
4,363
16,880
-405.1
5,908
(INR m)
FY22E
1,41,274
9.5
27,547
27.7
14,784
12,763
21,919
35.3
9,156
12,763
488
22,407
34.3
0
22,407
5,602
25.0
16,805
34.3
0
5,335
22,140
31.2
7,749
FY16
345
1,21,102
1,21,447
8,037
1,29,484
-3.6
1,62,788
126.5
17,526
26.0
3,09,798
1,98,500
57.9
54,854
23,949
32,495
22.2
3,09,798
FY17
345
1,33,609
1,33,954
14,872
1,48,826
14.9
3,04,510
87.1
29,058
65.8
4,82,394
3,25,163
63.8
54,272
54,251
48,707
49.9
4,82,394
FY18
424
2,43,287
2,43,711
21,977
2,65,688
78.5
4,41,608
45.0
20,708
-28.7
7,28,004
5,14,984
58.4
56,326
57,402
99,293
103.9
7,28,004
FY19E
424
2,53,732
2,54,156
18,430
2,72,586
2.6
5,59,867
26.8
23,808
15.0
8,56,261
6,45,325
25.3
59,395
57,510
94,032
-5.3
8,56,261
FY20E
451
2,86,835
2,87,286
18,430
3,05,716
12.2
4,19,562
-25.1
23,808
0.0
7,49,086
5,48,231
-15.0
11,391
57,935
1,31,529
39.9
7,49,086
FY21E
451
2,97,807
2,98,258
18,430
3,16,688
3.6
4,51,794
7.7
36,549
53.5
8,05,030
5,48,231
0.0
11,391
63,729
1,81,680
38.1
8,05,030
(INR m)
FY22E
474
3,29,675
3,30,149
18,430
3,48,579
10.1
5,00,451
10.8
49,927
36.6
8,98,957
5,99,194
9.3
11,391
70,739
2,17,634
19.8
8,98,957
31 July 2020
7
 Motilal Oswal Financial Services
Piramal Enterprises
Financials and valuations
Profitability Ratios (%)
EBITDA Margin - IT
EBITDA Margin - Pharma
Core ROE
ROE
Valuations
Book Value (INR)
BV Growth (%)
Price-BV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
DPS (INR)
Dividend Yield (%)
E: MOFSL Estimates
FY16
19.7
9.4
5.5
7.5
FY17
17.5
15.5
9.8
9.8
FY18
13.9
18.5
8.2
8.2
FY19
17.0
20.5
5.9
5.9
FY20
26.5
-2.0
-2.0
FY21E
19.0
5.8
5.8
FY22E
23.0
7.0
7.0
704
1.0
52
-68.3
18
776
10.3
73
38.4
21
1,148
47.9
73
0.7
25
1,198
4.3
69
-5.2
28
1,274
6.4
1.1
-25
-135.4
-55.8
13
0.9
1,322
3.8
1.0
75
-405.1
18.3
26
1.9
1,392
5.3
1.0
93
24.8
14.7
33
2.4
31 July 2020
8
 Motilal Oswal Financial Services
Piramal Enterprises
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
31 July 2020
9
 Motilal Oswal Financial Services
Piramal Enterprises
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
********************************************************************************************************************************
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.
31 July 2020
10