Crompton Gr. Con
BSE SENSEX
38,855
S&P CNX
11,464
n
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
CROMPTON IN
627
159.6 / 2.1
301 / 178
-4/-9/6
292
73.8
n
Financials & Valuations (INR b)
Y/E Mar
2020 2021E
Sales
45.1
40.6
EBITDA
6.0
5.6
PAT
4.4
4.2
EBITDA (%)
13.2
13.7
EPS (INR)
7.0
6.7
EPS Gr. (%)
16.9
(3.6)
BV/Sh. (INR)
23.4
27.3
Ratios
Net D/E
(0.2)
(0.3)
RoE (%)
29.8
24.6
RoCE (%)
28.9
23.9
Payout (%)
34.4
42.0
Valuations
P/E (x)
36.4
37.8
P/BV (x)
10.8
9.3
EV/EBITDA (x)
26.3
27.8
Div Yield (%)
0.8
0.9
FCF Yield (%)
2.3
2.5
2022E
51.0
7.1
5.5
14.0
8.8
31.6
32.4
(0.4)
27.3
28.0
42.0
28.7
7.8
21.1
1.2
3.2
n
11 September 2020
Company Update | Sector: Capital Goods
CMP: INR254
TP: INR310 (+22%)
Buy
Catalysts emerging; Valuation comfort immense
Bottoming out of Lighting price erosion to reflect in financials:
Competitive
intensity has bottomed out in the Lighting industry, though not completely
over. This can be gauged by the price hikes over the past six months. The
last round of price cuts occurred in Aug’19 and will form part of the base
Sep’20 onwards. Thus, we expect value growth in the Lighting segment to
follow volume growth while margins should be on an uptrend 2QFY21
onwards (full quarter impact expected to reflect in 3QFY21 only).
Lighting segment to drive incremental profits:
The Lighting segment has
been under stress for the past two years now owing to price erosion at the
industry level. Thus, despite the double-digit volume growth, Lighting
revenues have dropped by 5% CAGR over FY18-20. The impact on
profitability has been even more severe with PBIT margins declining to ~5-
6% from 10-11% earlier. Thus, though the Lighting segment formed 25% of
Crompton’s turnover in FY20, the segmental PBIT contribution was limited
to just 9%. We expect PBIT contribution from the Lighting segment to start
increasing hereon, driving 25% incremental segmental PBIT over FY20-22E.
ECD segment on strong footing:
Crompton’s ECD segment has been
performing well with double-digit growth for eight consecutive quarters
prior to the COVID-19 outbreak in Mar’20. The ECD segment growth was
largely supported by water heaters and air coolers. The margin performance
is commendable and is the best in the industry.
In fact, like-to-like ECD
category margin for Crompton is materially higher than Havells.
The best play in crisis times:
Crompton’s business model is most resilient in
times of a crisis. The company showcased best performance in 1QFY21 with
EBITDA decline of ~49% (v/s decline of ~80% for our aggregate universe).
Since Crompton’s categories have higher replacement demand, we see
higher probability of steady performance in the coming quarters and in
FY22E (v/s negative impact for peers from weak consumer demand).
Opening up of Western India to aid growth:
Crompton’s earnings beat in
1QFY21 was despite one of its largest markets (West India, especially
Maharashtra) being under severe lockdown. Its peers in similar categories
such as Havells, Orient and Polycab have relatively lower exposure to the
state. As Maharashtra has gradually opened up in 2QFY21, Crompton is set
to benefit the most in the coming quarters due to pent-up demand.
Sub-optimal channel inventory to help:
The channel inventory across key
categories of Crompton is sub-optimal/adequate, and hence, there is scope
of channel refilling to play out in case demand surprises on the upside going
into the festive season next month. Moreover, the peak season for water
heaters is around the corner and the category could support ECD growth to
some extent over the next few months. Note that Crompton has been
clocking strong growth over the past few quarters in water heaters and has
been gaining market share as well.
n
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Jun-20 Mar-20 Jun-19
26.2
26.2
34.4
25.7
26.7
21.3
29.9
30.5
28.3
18.2
16.6
16.1
n
FII Includes depository receipts
n
Nilesh Bhaiya – Research Analyst
(Nilesh.Bhaiya@MotilalOswal.com)
Pratik Singh – Research Analyst
(Pratik.Singh@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Crompton Gr. Con
n
n
n
Lean business model with minimum capex:
Crompton has minimal capex
requirements as 50% of its products sold are outsourced. Coupled with strong
operating performance, Crompton has been able to generate healthy free cash
flow (FCF) of ~INR10b over FY17-20 (v/s adj. PAT of INR11.4b over the same
period), indicating FCF/PAT conversion at 0.85x.
Robust return ratios:
With strong profitability and an asset-light business
model, return ratios are healthy – RoE/RoCE of 30%/29% in FY20. We expect
return ratios to remain at these levels in the coming days.
Maintain Buy with increased TP of INR310:
The valuation gap between
Crompton and Havells has expanded to ~40% on FY22E basis. While we expect
Havells to command premium valuations due to its robust business footing, we
expect the valuation gap between the two companies to narrow down. This is
due to Crompton’s strong earnings growth trajectory along with superior FCF
generation. In fact, we find no reason for Crompton to trade at a discount to
Orient Electric (not rated and based on consensus estimates). We increase our
TP to INR310 (35x Mar’22E EPS v/s 32x earlier). Maintain
Buy.
Any inorganic
growth opportunity or higher dividend payout/buyback option may re-rate the
stock further, in our view.
11 September 2020
2
 Motilal Oswal Financial Services
Crompton Gr. Con
Key Charts
Exhibit 1: Price erosion may be past, Lighting revenue likely to enter positive growth
trajectory
Crompton lighting rev (YoY)
26% 24% 21%
11%
10%
-4% -2%
Likely positive growth
trajectory in Lighting
segment after 9 quarters
of negative/nil growth
-2%
20%
6%
1%
-11% -11%
-19%
-57%
-13%
Source: Company, MOFSL
Exhibit 2: Lighting margin on verge of bottoming out as competitive intensity is easing and
price hikes have taken place
Lighting PBIT margin (%)
11.7
9.5
8.4
6.1
5.0
8.0
9.0
Source: Company, MOFSL
Exhibit 3: Crompton’s ECD revenue has been on strong footing with double-digit revenue
growth for many quarters prior to COVID-19 impact
24%
11%
7%
10%
Crompton ECD rev (YoY)
15%
16%
10%
16%
11%
11%
-8%
-14%
-44%
Source: Company, MOFSL
11 September 2020
3
 Motilal Oswal Financial Services
Crompton Gr. Con
Exhibit 4: FY20 revenue break-up
Appliances ,
9%
Pumps ,
23%
Lighting,
25%
6%
Exhibit 5: FY20-23E CAGR estimates by category
FY20-23E CAGR
14%
8%
8%
8%
Fans , 44%
Lighting
Fans
Pumps
Appliances
Total
Exhibit 6: Expect Lighting revenue CAGR of 6% over FY20-23E
Lighting revenue (INR b)
21%
25%
YoY
Exhibit 7: Lighting margins expected to scale up
Lighting EBIT (INR b)
11.7%
EBIT margin
9.0%
7%
1%
-11%
12.6
FY18
12.7
FY19
11.2
FY20
-11%
10.0
FY21E
12.5
FY22E
13.4
FY23E
1.5
FY18
8.4%
6.1%
5.0%
8.0%
1.1
FY19
0.7
FY20
0.5
FY21E
1.0
FY22E
1.2
FY23E
Exhibit 8: Expect ECD revenue CAGR of 8.5% over FY20-23E
ECD revenue (INR b)
16%
4%
5%
-10%
27.7
FY18
32.1
FY19
33.9
FY20
30.6
FY21E
38.5
FY22E
43.3
FY23E
YoY
26%
13%
Exhibit 9: ECD margins to remain stable at 20%
ECD EBIT (INR b)
19.9%
19.3%
EBIT margin
20.0%
20.0%
20.0%
19.2%
5.3
FY18
6.2
FY19
6.7
FY20
6.1
FY21E
7.7
FY22E
8.7
FY23E
Exhibit 10: Expect revenue CAGR of 8% over FY20-23E
Total revenue (INR b)
YoY
26%
11%
1%
-10%
40.3
FY18
44.8
FY19
45.1
FY20
40.6
FY21E
51.0
FY22E
56.7
FY23E
Exhibit 11: EBITDA margin to expand to 14.1% by FY23E
EBITDA (INR b)
EBITDA margin
14.0%
13.7%
13.2%
13.1%
5.9
FY19
13.2%
14.1%
9%
11%
5.3
FY18
6.0
FY20
5.6
FY21E
7.1
FY22E
8.0
FY23E
Source: MOFSL, Company
Source: MOFSL, Company
11 September 2020
4
 Motilal Oswal Financial Services
Crompton Gr. Con
Exhibit 12: Expect FCF generation to remain robust
FCF (INR b)
3.7
3.0
2.9
3.9
5.2
5.1
41.0
34.1
29.8
28.9
24.6
23.9
27.3
28.0
26.8
26.8
Exhibit 13: Return ratios to remain healthy
RoE (%)
RoCE (%)
3.3
25.5
25.3
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY18
FY19
FY20
FY21E
FY22E
FY23E
Source: MOFSL, Company
Source: MOFSL, Company
Valuation and view
Maintain Buy with increased TP of INR310:
The valuation gap between Crompton
and Havells has expanded to ~40% on FY22E basis. While we expect Havells to
command premium valuations due to its robust business footing, we expect the
valuation gap between the two companies to narrow down. This is due to
Crompton’s strong earnings growth trajectory along with superior FCF generation. In
fact, we find no reason for Crompton to trade at a discount to Orient Electric (not
rated and based on consensus estimates). We increase our TP to INR310 (35x
Mar’22E EPS v/s 32x earlier). Maintain
Buy.
Any inorganic growth opportunity or
higher dividend payout/buyback option may re-rate the stock further, in our view.
Exhibit 14: Crompton is trading at a discount to its long-term average (v/s peers trading at
a premium to long-term average)
P/E (x)
55
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
47.8
45
40.6
36.2
31.8
28.6
35
34.3
25
Source: MOFSL, Company
11 September 2020
5
 Motilal Oswal Financial Services
Crompton Gr. Con
Exhibit 15: Crompton is trading at favorable valuations and is one of the best placed
considering FY20-22E EPS CAGR
50
40
30
20
Polycab
10
-10.0
-5.0
FY22 P/E (x)
Havells
Blue Star
Voltas
V-Guard
Crompton
Orient
Whirlpool
0.0
5.0
10.0
15.0
20.0
25.0
30.0
EPS CAGR (FY20-22E) (%)
Source: MOFSL, Company
Exhibit 16: Valuation summary
CMP (INR)
Mcap (INR b)
Rating
FY20
P/E (x)
FY21E
FY22E
EV/EBITDA (x)
FY20
FY21E
FY22E
Blue Star
Crompton
Havells
Voltas
Orient
Polycab
V-Guard
Whirlpool
604
254
654
657
194
847
168
2,141
58
159
409
217
41
126
72
272
Neutral
Buy
Neutral
Buy
Not Rated
Not Rated
Not Rated
Not Rated
39.6
36.4
55.8
39.2
52.5
16.6
39.1
57.0
225.8
37.8
74.4
55.4
79.4
26.9
51.2
75.1
36.8
28.7
49.1
35.5
33.8
19.2
36.6
46.1
21.2
26.3
38.8
31.5
23.9
11.0
28.2
38.4
39.7
27.8
43.0
47.5
30.8
15.5
34.9
49.1
18.5
21.1
30.6
28.3
18.4
11.8
24.7
30.6
Source: MOFSL, Company
11 September 2020
6
 Motilal Oswal Financial Services
Crompton Gr. Con
Financials and valuations
Income Statement
Y/E March
Total Revenues
Change (%)
EBITDA
% of Total Revenues
Depreciation
Other Income
Interest
PBT
Tax
Rate (%)
Adjusted PAT
Extra-ordinary Income
Reported PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Other Assets
Current Liab. & Prov.
Current Liabilities
Provisions
Net Current Assets
Application of Funds
2018
40,254
8.6
5,310
13.2
126
308
637
4,854
1,617
33.3
3,238
0
3,238
14.3
2018
1,254
6,641
7,895
6,486
14,381
8,849
234
8,616
6
0
15,628
3,032
5,536
5,450
0
1,610
9,869
8,719
1,150
5,759
14,381
2019
44,789
11.3
5,858
13.1
129
483
596
5,616
1,875
33.4
3,741
285
4,025
24.3
2019
1,254
9,731
10,985
6,493
17,477
8,991
359
8,632
10
142
17,915
3,524
5,660
6,724
0
2,007
9,221
7,530
1,691
8,694
17,477
2020
45,120
0.7
5,969
13.2
268
589
407
5,883
1,510
25.7
4,373
574
4,947
22.9
2020
1,255
13,423
14,678
3,497
18,175
9,705
616
9,090
199
142
18,010
4,636
4,587
5,866
0
2,920
9,265
7,426
1,839
8,745
18,175
2021E
40,600
-10.0
5,550
13.7
319
800
400
5,632
1,418
25.2
4,214
0
4,214
-14.8
2021E
1,255
15,868
17,122
1,797
18,919
10,205
934
9,271
199
142
17,644
4,172
4,128
6,718
0
2,628
8,337
6,682
1,655
9,307
18,919
2022E
51,000
25.6
7,149
14.0
335
800
200
7,414
1,866
25.2
5,548
0
5,548
31.6
2022E
1,255
19,086
20,340
0
20,340
10,705
1,269
9,437
199
142
21,035
4,192
5,185
8,358
0
3,301
10,473
8,394
2,078
10,563
20,340
(INR M)
2023E
56,705
11.2
7,989
14.1
351
1,000
0
8,638
2,174
25.2
6,464
0
6,464
16.5
(INR M)
2023E
1,255
22,835
24,089
0
24,089
11,205
1,619
9,586
199
142
25,806
4,661
5,765
11,711
0
3,670
11,644
9,333
2,311
14,162
24,089
11 September 2020
7
 Motilal Oswal Financial Services
Crompton Gr. Con
Financials and valuations
Ratios
Y/E March
Basic (INR)
Adj EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Asset Turnover (x)
Leverage Ratio
Net Debt/Equity (x)
Cash Flow Statement
Y/E March
PBT before EO Items
Depreciation
Interest & other
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
Investment & Others
CF from Investments
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2018
5,423
126
350
-1,812
-933
3,154
-133
3,021
-188
-322
0
-634
-1,129
486
-1,269
1,564
3,886
5,450
2019
5,788
129
293
-1,994
-1,202
3,014
-160
2,855
-1,343
-1,503
0
-587
-1,312
1,624
-237
1,274
5,450
6,724
2020
5,817
268
173
-1,445
-602
4,211
-494
3,717
-18
-512
-3,088
-586
-1,506
572
-4,556
-857
6,724
5,866
2021E
5,632
319
-400
-1,418
288
4,421
-500
3,921
800
300
-1,700
-400
-1,770
0
-3,870
851
5,866
6,718
2022E
7,414
335
-600
-1,866
385
5,668
-500
5,168
800
300
-1,797
-200
-2,330
0
-4,327
1,640
6,718
8,358
2018
5.2
5.4
12.6
1.5
34.9
0.0
0.0
0.2
0.0
0.0
0.6
41.0
25.5
38.7
50
27
69
2.8
0.1
2019
6.0
6.2
17.5
1.7
35.1
42.7
41.2
27.2
3.6
14.5
0.7
34.1
25.3
36.0
46
29
54
2.6
0.0
2020
7.0
7.4
23.4
2.0
34.4
36.7
34.4
26.3
3.5
10.8
0.8
29.8
28.9
34.8
37
38
52
2.5
-0.2
2021E
6.7
7.2
27.3
2.4
42.0
37.8
35.2
27.8
3.8
9.3
0.9
24.6
23.9
32.5
37
38
52
2.1
-0.3
2022E
8.8
9.4
32.4
3.1
42.0
28.7
27.1
21.1
3.0
7.8
1.2
27.3
28.0
43.1
37
30
52
2.5
-0.4
2023E
10.3
10.9
38.4
3.6
42.0
24.7
23.4
18.5
2.6
6.6
1.4
26.8
26.8
46.7
37
30
52
2.4
-0.5
(INR M)
2023E
8,638
351
-1,000
-2,174
-247
5,568
-500
5,068
1,000
500
0
0
-2,715
0
-2,715
3,353
8,358
11,711
11 September 2020
8
 Motilal Oswal Financial Services
Crompton Gr. Con
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
11 September 2020
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 Motilal Oswal Financial Services
Crompton Gr. Con
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The associates of MOFSL may have:
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financial interest in the subject company
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actual/beneficial ownership of 1% or more securities in the subject company
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received compensation/other benefits from the subject company in the past 12 months
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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.
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acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
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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)
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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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