6 November 2020
2QFY21 Results Update | Sector: Consumer
Emami
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
HMN IN
454
164.8 / 2.2
407 / 141
0/73/10
218
CMP: INR371
TP: INR440 (+19% )
Buy
Strong results; near-term outlook improving significantly
Emami (HMN) posted a beat on all fronts in its 2QFY21 results.
Importantly, (a) strengthening rural growth (50% of HMN’s sales), (b)
extremely strong health and hygiene sales, (c) initial good winter demand,
and (d) the low winter season sales base of last year augur well for sales
and earnings growth over the next few quarters.
We remain bullish on the stock, despite two primary concerns. (a) The likely
delay in pledge reduction to zero (earlier targeted by Mar’21; currently at
~40% levels) is disappointing. (b) There is no evidence of a structural
turnaround yet. (Just to put this in perspective, 2QFY21 was the first
quarter of double-digit sales growth in 17 quarters. This was barring
1QFY19, which saw healthy growth, driven by the soft base of 1QFY18 –
which declined due to the GST implementation.) Nevertheless, the earnings
momentum driven by the above factors implies that despite the recent
rally, the stock remains inexpensive at 26.1x FY22 EPS. Maintain
Buy.
Financials & Valuations (INR b)
Y/E March
2020 2021E 2022E
Sales
26.5 28.5 31.1
Sales Gr. (%)
-1.5
7.4
9.0
EBITDA
6.9
8.6
8.4
EBIT Margin (%)
26.0 30.1 27.0
Adj. PAT
5.6
6.6
6.3
Adj. EPS (INR)
12.4 14.9 14.2
EPS Gr. (%)
2.0 20.3 -4.5
BV/Sh.(INR)
40.2 49.8 50.3
Ratios
RoE (%)
28.8 32.8 28.4
RoCE (%)
28.8 34.1 30.4
Payout (%)
64.6 50.3 63.2
Valuation
P/E (x)
29.9 24.9 26.1
P/BV (x)
9.2
7.4
7.4
EV/EBITDA (x)
24.3 18.5 18.9
Div. Yield (%)
2.2
2.0
2.4
Shareholding pattern (%)
As On
Sep-20 Jun-20
Promoter
53.9
53.4
DII
28.6
31.4
FII
9.0
5.7
Others
8.6
9.6
FII Includes depository receipts
Robust performance on all fronts
Sep-19
52.7
25.5
11.7
10.1
Consolidated net sales grew 11.3% YoY to INR7.3b
(est. INR6.8b). EBITDA
increased 33.2% YoY to INR2.6b (est. INR2b); PBT was up 32.2% YoY to
INR2.4b (est. INR1.8b); and adj. PAT before amortization grew 31.6% YoY to
INR2.1b (est. INR1.5b).
Gross margins were up 60bp YoY
to 70.3% in 2QFY21. The EBITDA margin
expanded 570bp YoY to 35% (est. 29.2%) on account of lower employee
costs as a percentage of sales (-70bp YoY), lower ad spends (-120bp YoY),
and lower other expenses (-330bp YoY).
Absolute ad spends grew 3% YoY to INR1.1b.
1HFY21 revenue declined 7.1% YoY, whereas EBITDA / adj. PAT before
amortization grew +16.2%/+16.8% YoY.
Domestic revenues (incl. CSD) grew 13% YoY, and the international business
grew 11% YoY in 2QFY21. Domestic volumes grew 10% YoY in 2QFY21.
Within domestic,
HMN reported sales growth in most of its categories in
2QFY21: Healthcare (+53% YoY), Kesh King (+45% YoY), Pain Management
(+31% YoY), Navratna (+14% YoY), and 7 Oils-in-One (+9% YoY). The only
categories that registered a decline were Male Grooming (-24% YoY) and
BoroPlus (-25% YoY).
Highlights from management commentary
Urban sales grew 8% and rural sales increased 20% for the quarter;
management expects rural momentum to continue.
Demand for winter products has picked up in the last few days with the
onset of winter in North India. HMN had a weak base of winter sales in
3QFY20.
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com)
Research analyst: Dhairya Dhruv
(Dhairya.Dhruv@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.
6 November 2020
1
 Motilal Oswal Financial Services
Emami
The company has launched 20 new products (40 SKUs), largely in the Health and
Hygiene space, which is aiding sales (4% of sales in 2QFY21).
Better-than-expected results have led to a 21.5%/8.3% upgrade in our
FY21E/FY22 EPS forecasts, respectively.
The first double-digit sales growth in 17 quarters (apart from 1QFY19, which was
aided by sales decline in 1QFY18 due to the GST implementation) and a good
outlook for the next few quarters means that it is too early to call out structural
recovery given the several years of underperformance. Nevertheless, we
maintain
Buy,
encouraged by various factors. (a) Valuations are inexpensive at
26.1x FY22E EPS. (b) The sale of the cement business has led to a reduction in
the pledge. (c) Just like other peers with higher rural salience, HMN too has
tailwinds in FY21 – as prospects in rural appear brighter than in urban (50% of
HMN’s domestic sales come from rural).
We arrive at TP of INR440 (valuing the company at 28x FY20 EPS – 40% discount
to peers).
FY20
FY21
4Q
-20.0
5,327
-16.8
3,471
65.2
985
18.5
-36.6
219
24
145
887
-74
-8.3
980
-20.0
1Q
-28.0
4,813
-25.8
3,200
66.5
1,230
25.5
-8.3
194
47
67
1,056
95
9.0
973
-6.4
2Q
10.0
7,348
11.3
5,163
70.3
2,571
35.0
33.2
216
25
79
2,409
284
11.8
2,133
31.6
3QE
14.0
9,345
15.0
6,451
69.0
3,036
32.5
15.0
225
39
101
2,873
575
20.0
2,299
7.1
4QE
30.0
7,002
31.4
4,622
66.0
1,751
25.0
77.7
285
51
135
1,550
309
19.9
1,222
24.7
FY20
-5.3
26,549
-1.5
17,788
67.0
6,906
26.0
-5.0
774
210
571
6,492
713
11.0
5,833
5.7
FY21E
6.5
28,508
7.4
19,436
68.2
8,588
30.1
24.4
919
162
382
7,889
1,262
16.0
6,627
13.6
(INR m)
FY21 Var.
2QE (%)
5.5
6,799 8.1%
3.0
4,672 10.5%
68.7
1,988 29.3%
29.2
3.0
196
65
74
1,800 33.8%
315
17.5
1,485 43.6%
-8.4
Valuation and view
Consol. Quarterly performance
Y/E MARCH
Domestic volume growth (%)
Net Sales
YoY change (%)
Gross Profit
Gross margin (%)
EBITDA
Margins (%)
YoY change
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
PAT before Amortization
YoY change (%)
E: MOFSL Estimates
1Q
0.0
6,486
5.6
4,162
64.2
1,341
20.7
11.4
204
44
115
1,209
177
14.6
1,039
18.1
2Q
1.0
6,601
5.1
4,602
69.7
1,930
29.2
3.0
178
93
164
1,822
211
11.6
1,621
12.6
3Q
-2.0
8,126
0.2
5,545
68.2
2,640
32.5
0.2
214
49
156
2,533
403
15.9
2,146
2.8
Key Performance Indicators
Y/E March
2Y average growth %
Volumes
Sales
EBITDA
PAT
% sales
COGS
Other expenditure
Depreciation
YoY change %
COGS
Other expenditure
Other income
EBIT
1Q
9.0
10.9
30.8
31.7
35.8
43.5
3.1
12.1
-1.6
128.0
16.7
FY20
2Q
-1.5
2.6
-2.0
1.9
30.3
40.5
2.7
1.4
9.7
217.4
4.8
3Q
0.8
3.7
-0.1
1.0
31.8
35.7
2.6
-3.6
3.7
78.3
-1.2
4Q
-10.0
-6.5
-23.4
-9.3
34.8
46.7
4.1
-26.0
6.1
-12.4
-45.1
FY21
1Q
-14.0
-10.1
1.5
5.9
33.5
40.9
4.0
-30.6
-30.2
-41.7
-8.9
2Q
5.5
8.2
18.1
22.1
29.7
35.3
2.9
9.3
-3.0
-51.8
34.4
6 November 2020
2
 Motilal Oswal Financial Services
Emami
Highlights from management commentary
Macro and trends
Overall demand trends are improving, particularly in rural.
Primary sales were in-line with secondary sales for 2QFY21 and 1HFY21
secondary sales were higher than primary sales.
Urban sales grew 8% and rural sales 20% for 2QFY21. Rural contributes to half of
HMN’s sales. Management expects HMN’s rural growth to continue at this pace
in the near term.
Good sales continued in Healthcare (Balms, Hygiene Products, and
Chyawanprash) in Oct’20 and over the first five days of Nov’20. This segment
grew 53%/40% in 2QFY21/1HFY21. The products contributed to around 50% of
sales for 2QFY21.
New launches boosting sales
It launched 20 new products (40 SKUs), mainly in the Health and Hygiene space,
which is aiding sales.
These products’ contribution to sales in 2QFY21 was healthy at around 4% of
sales.
While sanitizer sales have fallen significantly in recent months, other hygiene
products continue to do well.
Good initial winter season response
Demand for winter products has picked up in the last few days with the onset of
winter in North India. HMN had a weak base of winter sales in 3QFY20.
Chyawanprash constitutes less than 2% of sales as the company is a distant
second largest player to Dabur.
Update on underperforming brands
Fair and Handsome is on a sequential recovery trend, but still down YoY.
Male Grooming remains weak.
Kesh King has posted some recovery in recent months to earlier high levels as it
regains market share from Kesh Kanti of Patanjali and, in some markets, from
Indulekha of HUVR as well. While demand continued to be good in Oct’20 as
well, management believes it is still premature to call out growth numbers.
Some recovery has also been seen in Pancharistha in recent months.
Capex and amortization
Capacity utilization is currently around 70%, and sales have just started
improving from 2QFY21. Management does not see the need for major capex
for the next two years.
Amortization of INR550m for Kesh King would be taken from 3QFY21 until
Jun’22.
Other points
EBITDA margins are likely to be around 30% going forward.
Share of Modern Trade to the total is 8–9%.
The pledge stands at 40% currently. They were earlier guiding for near-zero by
March 2021, but this seems unlikely as asset sales are taking longer.
6 November 2020
3
 Motilal Oswal Financial Services
Emami
Key exhibits
Exhibit 1: Domestic volume growth is estimated at 10% YoY in 2QFY21
Domestic volume growth (%)
Source: Company, MOFSL
Exhibit 2: Consol. net sales grew 11.3% to INR7.3b
Sales (INR b)
20
8
(2) (4)
(18)
10 6
7
16
0
7
Sales growth (%)
4
6
5
11
(17)
(26)
Exhibit 3: Gross margin expanded 60bp YoY to 70.3%
Gross margins (%)
0
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 4: EBITDA margin expanded 570bp YoY to 35%
EBITDA margin (%)
Exhibit 5: EBITDA was up 33.2% YoY to INR2.6b in 2QFY21
EBITDA (INR b)
50
15
4
(5)
(46)
15
2
(3)
EBITDA growth (%)
11 3
33
0
(37)
(8)
(7) (0) (10)
Source: Company, MOFSL
Source: Company, MOFSL
6 November 2020
4
 Motilal Oswal Financial Services
Emami
Domestic business (80% of sales in 2QFY21) grew 13% YoY in the quarter
Domestic segmental performance stood as follows:
Exhibit 6: Healthcare, Pain Management, and Kesh King saw strong growth in the quarter,
while BoroPlus and Male Grooming declined
2QFY21
1HFY21
Healthcare
53%
40%
Pain Management
31%
25%
Navratna
14%
-25%
Kesh King
45%
2%
BoroPlus
-25%
-16%
Male Grooming
-24%
-51%
7-Oils-in-One
9%
-16%
Source: Company, MOFSL
International sales (17% of total sales in 2QFY21) grew 11% YoY during the
quarter;
however, sales declined 4% in 1HFY21. SAARC grew by 22% YoY, and
MENAP grew by 12% YoY in the quarter.
The Institutional business contributed 3% to sales in 2QFY21.
Exhibit 7: Most of the categories grew in 2QFY21, led by Healthcare (+53%) and Kesh King (+45%)
2QFY20 & 2QFY21 category performance
2%
13%
39%
4%
-25%
31%
-3%
14%
-32%
-24%
-11%
45%
0%
53%
20%
11%
Source: Company, MOFSL
Exhibit 8: On a 3Y basis, Kesh King and Healthcare are showing strong performance, while the rest are lagging behind
3yr average revenue growth
5%
2%
9%
5%
-15%
12%
18%
12%
Source: Company, MOFSL
6 November 2020
5
 Motilal Oswal Financial Services
Emami
Valuation and view
What has happened in the last 10 years?
The company delivered an admirable CAGR of ~17% in both sales and EBITDA
and ~22% CAGR in PAT in the first five years of the decade. However, in the past
five years ending FY20, it has reported massive slowdown in key financial
metrics (CAGR of ~4% in sales, ~5% in EBITDA, and 3% in PAT). This is
attributable to the absence of sales growth in many of its key categories.
Key challenges
The lack of significant traction in products launched in recent years and failed
acquisitions, such as ‘She’, have contributed to weak sales growth in recent
years. Kesh King’s scale-up so far has certainly not lived up to expectations. The
overseas business has also underperformed.
Compared with peers, HMN has the largest exposure to rural and, even more
crucially, to wholesale trade. While the management has expanded its direct
reach in recent years, wholesale and rural dependence remains high – albeit still
lower than seen in the past.
Our view on the stock
HMN has disappointed over an elongated period. It has reported sales / EBITDA
/ adj. PAT CAGR of only ~4%/~5%/~3% over the past five years despite its
smaller size v/s peers.
However, better-than-expected results have led to a 21.5%/8.3% upgrade in our
FY21E/FY22 EPS forecasts, respectively.
The first double-digit sales growth in 17 quarters (apart from 1QFY19, which was
aided by sales decline in 1QFY18 due to the GST implementation) and a good
outlook for the next few quarters means that it is too early to call out structural
recovery given the several years of underperformance. Nevertheless, we
maintain
Buy,
encouraged by various factors. (a) Valuations are inexpensive at
26.1x FY22E EPS. (b) The sale of the cement business has led to a reduction in
the pledge. (c) Just like other peers with higher rural salience, HMN too has
tailwinds in FY21 – as prospects in rural appear brighter than in urban (50% of
HMN’s domestic sales come from rural).
We arrive at TP of INR440 (valuing the company at 28x FY20 EPS – 40% discount
to peers).
Exhibit 9: We raise our FY21/FY22 EPS estimates by 21.5%/8.3%
(INR m)
Sales
EBITDA
PAT
FY21E
28,508
8,588
6,627
New
FY22E
31,088
8,406
6,329
FY21E
27,125
7,272
5,452
Old
FY22E
29,536
7,840
5,846
Change (%)
FY21E
FY22E
5.1
5.3
18.1
7.2
21.5
8.3
Source: Company, MOFSL
6 November 2020
6
 Motilal Oswal Financial Services
Emami
Exhibit 10:
Emami P/E (x)
P/E (x)
65.0
53.0
41.0
29.0
17.0
5.0
Min (x)
Avg (x)
Max (x)
-1SD
51.0
41.0
+1SD
Exhibit 11:
Consumer sector P/E (x)
P/E (x)
Min (x)
54.0
31.5
47.8
Avg (x)
+1SD
Max (x)
-1SD
41.7
21.3
13.9
42.3
36.5
30.7
25.1
28.2
40.8
31.0
21.0
Source: Company, MOFSL
Source: Company, MOFSL
6 November 2020
7
 Motilal Oswal Financial Services
Emami
Financials and valuations
Income Statement
Y/E March
Net Sales
Change (%)
COGS
Gross Profit
Gross Margin (%)
Operating expenses
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Financial Other Income
Profit before Taxes
Change (%)
Margin (%)
Tax
Deferred Tax
Tax Rate (%)
Adjusted PAT
Change (%)
Margin (%)
Amortization
Reported PAT
2016
23,583
6.4
8,121
15,462
65.6
8,589
6,873
28.3
29.1
423
540
445
6,354
7.3
26.9
597
-125
7.4
5,762
18.7
24.4
2,127
3,635
2017
24,882
5.5
7,910
16,972
68.2
9,380
7,591
10.5
30.5
469
580
311
6,853
7.9
27.5
836
130
14.1
6,021
4.5
24.2
2,617
3,404
2018
25,305
1.7
8,098
17,207
68.0
10,013
7,194
-5.2
28.4
673
343
195
6,374
-7.0
25.2
863
-5
13.5
5,507
-8.5
21.8
2,436
3,071
2019
26,946
6.5
9,230
17,716
65.7
10,444
7,272
1.1
27.0
768
214
349
6,639
4.2
24.6
1,024
37
16.0
5,517
0.2
20.5
2,485
3,032
2020
26,549
-1.5
8,761
17,788
67.0
10,882
6,906
-5.0
26.0
774
210
571
6,492
-2.2
24.5
713
-86
9.7
5,618
1.8
21.2
2,589
3,029
2021E
28,508
7.4
9,072
19,436
68.2
10,848
8,588
24.4
30.1
919
162
382
7,889
21.5
27.7
1,262
0
16.0
6,627
17.9
23.2
1,275
5,352
(INR m)
2022E
31,088
9.0
10,490
20,598
66.3
12,192
8,406
-2.1
27.0
949
190
451
7,718
-2.2
24.8
1,389
0
18.0
6,329
-4.5
20.4
1,275
5,054
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Deferred Liability
Capital Employed
Goodwill on consolidation
Gross Block
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets, L&A
Inventory
Account Receivables
Cash and cash equivalents
Others
Curr. Liab. and Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOFSL Estimates
2016
454
15,662
16,116
41
6,838
90
23,086
41
24,162
4,408
19,754
616
474
6,037
1,505
1,309
1,084
2,138
3,836
2,487
660
689
2,200
23,086
2017
454
17,093
17,547
14
4,846
282
22,689
41
25,600
5,616
19,983
129
1,277
4,602
1,792
970
501
1,340
3,343
1,847
622
873
1,259
22,689
2018
454
19,682
20,136
6
3,343
118
23,602
41
26,825
8,767
18,058
226
3,136
6,517
1,940
1,559
795
2,224
4,376
2,420
1,077
879
2,141
23,602
2019
454
20,307
20,761
-2
1,168
122
22,048
41
28,738
11,967
16,771
352
1,870
9,151
2,217
2,164
2,034
2,737
6,137
2,914
1,808
1,416
3,014
22,048
2020
453
17,784
18,238
-9
2,257
35
20,520
0
29,933
15,329
14,604
69
1,564
10,548
2,446
3,080
1,191
3,831
6,265
3,245
1,222
1,798
4,284
20,520
2021E
445
21,695
22,139
-9
2,257
35
24,422
0
30,633
16,248
14,385
69
1,564
14,844
2,133
2,463
6,304
3,944
6,440
3,065
1,343
2,032
8,404
24,422
(INR m)
2022E
445
21,935
22,380
-9
2,257
35
24,663
0
31,633
17,197
14,436
69
1,564
15,815
2,342
2,521
6,927
4,024
7,221
3,447
1,477
2,296
8,594
24,662
6 November 2020
8
 Motilal Oswal Financial Services
Emami
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
317
2016
12.7
13.6
35.5
1.5
11.8
29.2
27.2
7.4
25.3
10.4
0.4
40.5
35.8
39.1
20
1.3
0.3
2017
13.3
14.3
38.7
4.4
33.0
28.0
25.9
6.9
22.6
9.6
1.2
35.8
31.1
28.2
14
1.1
0.2
2018
12.1
13.6
44.4
3.5
28.8
30.6
27.3
6.6
23.3
8.4
0.9
29.2
28.2
25.3
23
1.1
0.1
2019
12.2
13.8
45.7
4.0
32.9
30.5
26.8
6.1
22.8
8.1
1.1
27.0
28.5
25.9
30
1.2
0.0
2020E
12.4
14.1
40.2
8.0
64.6
29.9
26.3
6.3
24.3
9.2
2.2
28.8
28.8
28.5
34
1.2
0.1
2021E
14.9
17.0
49.8
7.5
50.3
24.9
21.9
5.6
18.5
7.4
2.0
32.8
34.1
34.5
32
1.3
-0.2
2022E
14.2
16.4
50.3
9.0
63.2
26.1
22.7
5.1
18.9
7.4
2.4
28.4
30.4
34.2
30
1.3
-0.2
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Depreciation
Other non-operating income
Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Invest.
Change in Equity
(Incr)/Decr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOFSL Estimates
2016
4,228
2,549
-71
432
-957
-565
5,616
-1,320
4,296
4,290
-16,062
-13,091
0
0
-680
5,698
5,018
-2,457
3,541
1,084
2017
4,236
3,086
-102
558
-707
226
7,296
-2,814
4,482
-763
655
-2,922
0
7,099
-1,985
-10,072
-4,958
-584
1,084
500
2018
3,926
3,109
-51
316
-809
-612
5,878
-1,232
4,646
-1,863
750
-2,346
0
4,847
-1,194
-6,891
-3,237
295
501
795
2019
4,034
3,253
-125
42
-927
-739
5,537
-1,329
4,208
1,178
129
-22
0
803
-1,589
-3,491
-4,277
1,239
795
2,034
2020E
3,736
3,363
-192
-73
-760
-800
5,274
-1,481
3,793
-568
-15
-2,064
-125
1,004
-3,632
-1,301
-4,054
-844
2,034
1,191
2021E
6,614
2,194
-382
162
-1,262
993
8,319
-700
7,619
0
2,778
2,078
-9
0
-4,019
-1,256
-5,284
5,114
1,191
6,304
(INR m)
2022E
6,443
2,224
-451
190
-1,389
433
7,450
-1,000
6,450
0
280
-720
0
0
-4,823
-1,283
-6,106
624
6,304
6,928
6 November 2020
9
 Motilal Oswal Financial Services
Emami
NOTES
6 November 2020
10
 Motilal Oswal Financial Services
Emami
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
********************************************************************************************************************************
6 November 2020
11
 Motilal Oswal Financial Services
Emami
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.
6 November 2020
12