Motilal Oswal Financial Services

8 November 2020

2QFY21 Results Update | Sector: Cement

India Cements

Neutral

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)

CMP: INR122

TP: INR120 (-2%)

Beneficiary of South production discipline

Market share loss the key concern

ICEM IN



308

37.7 / 0.5

140 / 69

-2/-10/40



359

Financial Snapshot (INR b)

Y/E MARCH

Sales

EBITDA

Adj. PAT

EBITDA Margin (%)

Adj. EPS (INR)

EPS Gr. (%)

BV/Sh. (INR)

Ratios

Net D:E

RoE (%)

RoCE (%)

Payout (%)

Valuations

P/E (x)

P/BV (x)

EV/EBITDA(x)

EV/ton (USD)

Div. Yield (%)

2020

50.6

5.9

0.2

11.6

0.7

-69.5

174.7

0.7

0.4

2.2

-52.4

177.4

0.7

12.5

0.5

2021E

43.2

7.7

1.7

17.8

5.5

703.0

179.5

0.6

3.1

4.5

13.2

22.1

0.7

9.2

0.5

2022E

50.3

7.4

1.5

14.7

5.0

-9.3

183.5

0.6

2.7

4.2

20.1

24.4

0.7

9.4

0.8

India Cements (ICEM)’s 2QFY21 results highlight the benefit of high

cement prices in South India, which led to the highest EBITDA/t since

FY14 – at INR1,114/t (+102% YoY). Volumes, however, declined 21% YoY

due to weak cement demand in South India and market share loss.

We raise our FY21/FY22E EPS by 28%/2%, factoring in a strong realization

outlook on the back of a strong production discipline in South. However,

we retain our

Neutral

rating on expected market share loss and a

valuation of 9.4x FY22E EV/EBITDA, pricing in strong margins.

Strong pricing drives 59% YoY EBITDA growth



Revenue/EBITDA/PAT at INR10.7b/INR2.3b/INR0.7b was -14%/+59%/14x

YoY – 3%/11%/33% above our estimate.

Volumes declined 21% YoY to 2.11mt (est. 2.0mt) as demand in South

was impacted by heavy monsoons, prolonged lockdowns, and higher

price.

Realization was up 9% YoY to INR5,077/t (our est. INR5,206/t). This led to

a 102% YoY increase in EBITDA/t to INR1,114/t – the highest since FY14.

Per ton cost fell 4% YoY to INR3,963/t (-6% QoQ), weighed by 12% YoY

decline in power and fuel cost and 14% YoY drop in other expenses due

to lower fixed costs (such as maintenance, ad spends, and travel).

OCF was at INR3.1b in 1HFY21 (v/s INR1.6b in 1HFY20).

1HFY21 rev/EBITDA/PAT stood at INR18.3b/INR3.9b/INR0.9b, with YoY

change of -33%/0%/+16%. Volumes were down 38% YoY.

Shareholding pattern (%)

As On

Promoter

DII

FII

Others

Sep-20

28.4

9.7

12.0

49.9

Jun-20

28.3

8.9

12.3

50.5

Sep-19

28.2

20.7

15.4

35.7

Highlights from management commentary



FII Includes depository receipts



Sales volumes were at 2.11mt (v/s 2.67mt in 2QFY20). Capacity

utilization was up to 53% in 2QFY21 from 35% in 1QFY21. The trade sales

mix was at 54% and is expected to go up to 58% in 3QFY21. The PPC mix

stood at 63%.

The company aims to sell higher volumes in markets situated closer to its

plants, thereby reducing freight cost.

In 1HFY21, industry in South declined 29% YoY in volumes on account of

prolonged lockdown and heavy monsoons. On the other hand, prices

have been strong, and the company expects sustained pricing discipline

in 2HFY21.

It repaid debt of INR1.18b in 1HFY21 and would repay INR3.0b in

2HFY21.

It is focused on improving capacity utilization, while continuing to

monitoring the demand-supply situation in Central India. It would

accordingly take a call on the planned Damoh expansion.

Amit Murarka - Research analyst

(Amit.Murarka@motilaloswal.com)

Basant Joshi - Research analyst

(Basant.Joshi@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

3 September 2019

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

India Cements

Valuation and view



Led by high cement prices in South, we expect ICEM’s net debt to decline to

INR31b in FY22 (from INR35b in FY20), implying net debt/EBITDA of 4.3x (v/s

6.0x in FY20).

We expect ICEM’s market share loss in South to continue as key competitor

Ramco’s new capacities get commissioned within the next six months.

ICEM trades at 9.4x FY22E EV/EBITDA and USD58/t of EV/capacity. We value the

stock at 9x Mar’22 EV/EBITDA to arrive at Target Price of INR120. Maintain

Neutral.

(INR m)

FY21

Var.

2QE

(%)

2.00

-25.0

5,206

-2

11.5

-1.8

10,414

-16.4

2,113

20.3

615

800

(12)

738

199

27.0

539

976.5

5.2

Quarterly Perf. (Standalone)

Y/E March

Sales Dispatches (m ton)

YoY Change (%)

Realization (INR/ton)

YoY Change (%)

QoQ Change (%)

Net Sales

YoY Change (%)

EBITDA

Margins (%)

Depreciation

Interest

Other Income

PBT before EO expense

Extra-Ord expense

PBT

Tax

Rate (%)

Reported PAT

Adj PAT

YoY Change (%)

Margins (%)

E: MOFSL Estimates

Per ton analysis

3.04

-1.1

4,828

9.1

851

324

1,240

1,058

559

4,033

795

3.04

-1

4,828

9.1

2.8

14,688

7.9

2,420

16.5

599

799

1,054

331

31.5

722

706

235.8

4.8

FY20

2.67

2.66

2.65

-13

-10

-21

4,671 4,478 4,352

3.6

0.6

-7.3

-3.3

-4.1

-2.8

12,457 11,911 11,519

-10.2

-9.5

-26.3

1,472 1,287

675

11.8

10.8

5.9

613

615

642

816

806

924

180

-101

-711

0 1,000

-101 -1,711

-48

-600

44.8

46.9

35.1

-54 -1,111

-68

-476

250.0 -316.6 -208.6

0.4

-0.6

-4.1

1.43

-53

5,301

9.8

21.8

7,570

-48.5

1,557

20.6

600

730

261

34.9

170

-76.0

2.2

FY21

FY20

3QE

4QE

2.11

2.39

2.89 11.02

-21

-10

9 -11.4

5,077 4,798 4,666 4,589

8.7

7.1

7.2

1.4

-4.2

-5.5

-2.7

10,697 11,485 13,471 50,575

-14.1

-3.6

16.9 -10.1

2,347 2,067 1,729 5,852

21.9

18.0

12.8

11.6

601

615

633 2,469

705

830

871 3,345

107

277

1,098

672

333

316

0 1,000

1,098

672

333

-684

384

168

(329)

34.9

25.0

5.7

48.1

714

504

314

-355

714

504

314

212

1,327.2 -843.5 -165.9 -69.5

6.7

4.4

2.3

0.4

FY21E

8.82

-20.0

4,903

6.8

43,224

-14.5

7,700

17.8

2,449

3,135

247

2,364

662

28.0

1,702

703.0

3.9

Sales Dispatches (m ton)

YoY Change (%)

Net Realizations

YoY (%)

RM Cost

Employee Expenses

Power, Oil & Fuel

Freight cost

Other Expenses

Total Exp

EBITDA

FY20

2.67

2.66

-13.3

-10

4,671 4,478

3.6

866

870

327

326

1,251 1,153

1,021 1,041

655

604

4,119 3,994

552

484

2.65

-21

4,352

-7

681

292

1,275

1,090

758

4,097

255

1.43

-53.1

5,301

9.8

1,097

525

1,079

954

556

4,211

1,090

FY21

3QE

2.11

2.39

-21.0

-10

5,077 4,798

8.7

924

830

350

322

1,102 1,182

1,023 1,040

564

560

3,963 3,934

1,114

863

FY20

4QE

2.89

4,666

843

273

1,211

1,052

688

4,067

599

11.02

-11.4

4,589

1.4

818

318

1,230

1,052

641

4,058

531

FY21E

8.82

-20.0

4,903

6.8

900

345

1,156

1,026

602

4,029

873

FY21

2QE

2.00

-25.0

5,206

11.5

880

410

1,200

1,030

630

4,150

1,056

(INR/t)

Var.

(%)

-2

-24

-15

-8

-1

-10

-4

8 November 2020

India Cements

Conference call highlights

Operational highlights



Sales volumes were at 2.11mt (v/s 2.67mt in 2QFY20).



Capacity utilization improved to 53% in 2QFY21 from 35% in 1QFY21.



Share of trade sales in the volume mix stood at 54% and would go up to 58% in

3QFY21. The PPC mix stood at 63%.



Revenue for shipping/windmill/RMC was at INR63m/INR65m/INR220m, and

EBITDA was at INR29m/INR60m/INR56m.



NPR fell to INR3,905/t in 2QFY21 from INR4,200/t in 1QFY21.

Cost insights



Fixed cost stood at INR1.4b due to various cost optimization measures, while

employee cost is guided to stabilize at INR750m per quarter.



The company’s focus on increasing the trade sales mix would improve the

blending ratio and reduce cost.



Power and fuel cost was lower on account of low-cost fuel inventory.



The company aims to sell higher volumes in markets situated closer to its plants,

thereby reducing freight cost.

Demand and pricing outlook



In 1HFY21, industry in South saw 29% YoY decline in volumes on account of

prolonged lockdowns and heavy monsoons. On the other hand, prices have

been strong, and the company expects sustained pricing discipline in 2HFY21.



In 2QFY21, Central, North, and East India reported YoY growth in volumes, while

West India continued to suffer from COVID restrictions and labor issues. South

India also saw a supply overhang.



Govt. projects have started picking up in Andhra Pradesh (AP), led by the

Polavarm irrigation project, PWD works, school renovations, and low-cost

housing projects. AP government demand for cement currently stands at

~200kt/month v/s pre-COVID levels of 800kt/month.



Demand in Tamil Nadu would be impacted by the Northeast monsoons in

November, but would improve from December on account of government

spending on infra projects.



Government projects in Telangana, including Phase 2 of the Kaleshwaram

project, have started picking up post the monsoons.



Central government road projects are expected to drive demand in Maharashtra

and Karnataka in 2HFY21.

Debt and capex



The company repaid debt of INR1.18b in 1HFY21 and would repay INR3.0b in

2HFY21.



Maintenance capex is guided to be INR1.0b in FY21. The company is also

upgrading its cement mill at Sankar Nagar and setting up WHRS at Chilamkur.



Chilamkur WHRS may be delayed if cashflow fails to support capex in FY21.

Other highlights



The company would continue with cash-based sales and has been focusing on

improving collection efficiency.

8 November 2020

India Cements



It has a higher trade sales mix in Tamil Nadu and Kerala. It is also trying to

improve its trade sales mix in Karnataka and focusing on reducing the

trade/non-trade price differential.

The company is focused on improving capacity utilization. Meanwhile, it

continues to monitor the demand-supply situation in Central India and would

accordingly take a call on the planned Damoh expansion.

Key exhibits

Exhibit 1: Volumes and realizations down 21% YoY and 4% QoQ, respectively

Realizations (INR/ton)

2.7

2.9

2.7

3.1

3.0

3.3

Volume (m ton)

3.0

2.7

2.6

2.1

1.4

Exhibit 2: Margins improve 10.13pp YoY

EBITDA (INR m)

EBITDA (%)

21.9

20.6

Exhibit 3: EBITDA/t (INR) highest since FY14

EBITDA (INR/Ton)

16.5

14.914.114.414.3

13.8

12.3

11.810.8

11.311.511.2

10.2

5.9

Source: Company, MOFSL

Exhibit 4: Key operating indicators (incl. other businesses)

INR/Ton

Net realization

Expenditure

RM Cost

Staff Cost

Energy Cost

Selling Exp.

Other Exp.

Total Exp.

EBITDA

2QFY21

5,077

924

350

1,102

1,023

564

3,963

1,114

2QFY20

4,671

866

327

1,251

1,021

655

4,119

552

YoY (%)

8.7%

6.8%

7.0%

-11.9%

0.2%

-13.8%

-3.8%

101.9%

1QFY21

5,301

1,097

525

1,079

954

556

4,211

1,090

QoQ (%)

-4.2%

-15.8%

-33.4%

2.2%

7.2%

1.5%

-5.9%

2.1%

8 November 2020

India Cements

Valuation and view



With ~80% of its capacity in South India, ICEM has good brand recall in the

region. Also, it is one of the most leveraged plays on price recovery in South. We

note that for every INR10/t price hike, EPS increases by ~5% for ICEM.

Led by high cement prices in South, we expect ICEM’s net debt to decline to

INR31b in FY22 (from INR35b in FY20), implying net debt/EBITDA of 4.3x (v/s

6.0x in FY20).

We expect ICEM’s market share loss in South to continue as key competitor

Ramco’s new capacities get commissioned within the next six months.

ICEM trades at 9.4x FY22E EV/EBITDA and USD58/t of EV/capacity. We value the

stock at 9x Mar’22 EV/EBITDA to arrive at Target Price of INR120. Maintain

Neutral.

8 November 2020

India Cements

Story in charts

Exhibit 5: Capacity utilization to improve in FY22

Capacity (mt)

8,780 6,648 7,754 8,610 6,928 6,379 5,852 7,700 7,393

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E

Source: Company, MOFSL

FY14

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E

Despatch (mt)

Utilization (%)

19.8

15.0

16.1

17.0

13.4

Exhibit 6: EBITDA and margin trend

EBITDA (INR/ton)

Margin (%)

17.8

11.3

11.6

14.7

Source: Company, MOFSL

Exhibit 7: Net debt profile

Net debt (INR b)

Net Debt/EBITDA

Exhibit 8: RoE/RoIC profile

8.2

RoE (%)

5.7

RoIC (%)

5.4

4.1

2.2 2.6

4.1

3.4

4.5

5.3

6.0

4.2 4.3

7.2

4.8

4.7

4.4

3.2

1.9

2.0

0.4

1.3

FY19

4.1

3.8

FY14

0.3

FY15

3.1

3.4

3.1

2.7

FY16

FY17

FY18

FY20 FY21E FY22E

Source: Company, MOFSL

Exhibit 9: ICEM’s EV/EBITDA trend

EV/EBITDA(x)

Avg(x)

Peak(x)

Min(x)

Exhibit 10: ICEM EV/ton trend

EV/ton (US$)

Avg

100

Max

Min

Source: MOFSL, Company

8 November 2020

India Cements

Financials and valuations

Standalone Income Statement

Y/E March

Net Sales

Change (%)

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income - Rec.

PBT bef. EO Exp.

EO Expense/(Income)

PBT after EO Exp.

Current Tax

Deferred Tax

Tax Rate (%)

Reported PAT

PAT Adj for EO items

Change (%)

Margin (%)

2015

44,236

-0.4

6,648

15.0

2,579

4,069

4,260

308

117

0.0

117

-95.9

0.3

2016

48,114

8.8

7,754

16.1

2,195

5,560

3,825

221

1,956

1,924

625

32.5

1,299

1,321

1,024.8

2.7

2017

50,795

5.6

8,610

17.0

2,571

6,040

3,605

165

2,600

867

33.3

1,734

31.3

3.4

2018

51,692

1.8

6,928

13.4

2,559

4,369

3,402

194

1,161

179

-24

13.3

1,006

-42.0

1.9

2019

56,280

8.9

6,379

11.3

2,513

3,866

3,242

310

934

325

-85

25.7

694

-31.0

1.2

2020

50,575

-10.1

5,852

11.6

2,469

3,384

3,345

277

316

1,000

-684

-398

48.1

-355

212

-69.5

0.4

2021E

43,224

-14.5

7,700

17.8

2,449

5,252

3,135

247

2,364

662

28.0

1,702

703.0

3.9

(INR m)

2022E

50,348

16.5

7,393

14.7

2,489

4,904

3,020

260

2,143

600

28.0

1,543

-9.3

3.1

Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Deferred Liabilities

Secured Loan

Unsecured Loan

Total Loans

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Total Investments

Curr. Assets, Loans&Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Real Estate Projects WIP

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

2015

3,072

32,859

35,931

3,297

21,968

10,039

32,007

71,235

67,600

31,852

35,749

1,000

15,852

30,513

6,069

4,661

19,540

204

11,879

8,253

3,038

588

18,634

71,235

2016

3,082

46,728

49,809

5,719

21,331

10,218

31,549

87,077

74,536

2,712

71,824

926

5,507

25,364

5,994

5,359

13,945

16,544

10,367

4,569

1,609

8,820

87,077

2017

3,082

48,018

51,099

6,556

23,797

5,416

29,213

86,868

75,015

5,286

69,729

1,278

6,190

29,256

7,450

5,089

16,649

19,584

13,180

4,796

1,608

9,671

86,868

2018

3,082

48,922

52,003

6,532

28,180

3,049

31,229

89,764

75,794

7,831

67,963

1,712

5,884

31,700

6,723

6,295

18,599

17,495

11,759

4,307

1,428

14,205

89,764

2019

3,099

49,298

52,397

6,308

26,433

7,237

33,670

92,375

77,438

10,308

67,130

1,770

6,946

35,203

8,232

7,290

19,614

18,675

13,163

4,106

1,405

16,528

92,375

2020

3,099

51,050

54,149

5,910

23,750

11,581

35,331

95,391

81,024

12,766

68,258

1,958

7,369

36,939

8,263

7,163

21,447

19,134

13,342

4,566

1,225

17,805

95,391

2021E

3,099

52,528

55,627

5,910

23,750

9,081

32,831

94,368

82,224

15,215

67,009

1,958

7,369

35,244

7,105

6,513

178

21,447

17,212

12,434

3,553

1,225

18,032

94,368

(INR m)

2022E

3,099

53,760

56,860

5,910

23,750

9,081

32,831

95,601

83,724

17,704

66,020

1,958

7,369

38,307

7,587

6,897

1,376

22,447

18,054

13,104

3,724

1,225

20,253

95,601

8 November 2020

India Cements

Financials and valuations

Ratios

Y/E March

Basic (INR)

Standalone EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

EV/Ton (US$)

Dividend Yield (%)

Return Ratios (%)

RoIC

RoE

RoCE

Working Capital Ratios

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Leverage Ratio (x)

Current Ratio

Debt/Equity

2015

0.4

8.8

117.0

0.0

2016

4.3

11.4

161.6

0.0

2017

5.6

14.0

165.8

1.0

21.4

2018

3.3

11.6

168.8

0.8

29.5

37.4

10.5

0.7

1.3

9.9

57.72

0.7

5.7

0.3

6.3

0.6

50.1

2.6

0.9

4.8

3.1

5.2

0.6

45.5

1.5

0.6

4.7

3.4

5.1

0.6

53.5

1.5

0.6

4.4

2.0

4.8

0.6

47.5

1.8

0.6

2019

2.3

10.4

169.1

0.8

43.0

54.1

11.8

0.7

1.3

11.2

59.96

0.7

3.2

1.3

3.7

0.6

53.4

1.9

0.6

2020

0.7

8.6

174.7

0.6

-52.4

177.4

14.1

0.7

1.4

12.5

61.36

0.5

1.9

0.4

2.2

0.5

59.6

1.9

0.7

2021E

5.5

13.4

179.5

0.6

13.2

22.1

9.1

0.7

1.6

9.2

59.16

0.5

4.1

3.1

4.5

0.5

60.0

2.0

0.6

2022E

5.0

13.0

183.5

1.0

20.1

24.4

9.4

0.7

1.4

9.4

58.16

0.8

3.8

2.7

4.2

0.5

55.0

2.1

0.6

Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

2015

295

2,579

3,947

-383

-817

5,621

173

5,794

-1,324

4,470

-6,397

6,722

-999

-17

-4,781

-4,787

2016

1,910

2,693

3,652

-55

767

8,966

204

9,169

-1,598

7,571

430

-1,162

3,463

-5,042

-2

-6,398

-7,979

2017

2,517

2,571

3,528

-637

112

8,090

8,121

-788

7,332

-683

-405

-1,876

16,880

-3,537

-370

-19,217

-6,243

2018

1,257

2,559

3,220

-384

-2,072

4,580

105

4,685

-1,902

2,783

344

-1,385

-2,942

9,583

-3,411

-371

-7,528

-1,727

2019

853

2,513

3,074

-88

-3,069

3,283

-119

3,164

-1,712

1,452

-923

231

-2,404

5,424

-3,136

-336

-2,746

-776

-16

2020

282

2,469

3,050

-312

-1,269

4,220

-81

4,139

-1,365

2,774

-278

-1,759

-3,403

2,562

-3,000

-300

-738

-1

2021E

2,364

2,449

3,135

-662

-115

7,171

-1,200

5,971

-1,200

-2,500

-3,135

-224

-5,860

112

178

(INR m)

2022E

2,143

2,489

3,020

-600

-1,023

6,029

-1,500

4,529

-1,500

-3,020

-311

-3,331

1,198

178

1,376

8 November 2020

India Cements

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

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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

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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”,

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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

8 November 2020

India Cements

********************************************************************************************************************************

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

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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.

8 November 2020