14 December 2020
Company Update | Sector: Oil & Gas
GAIL
Buy
BSE SENSEX
46,253
S&P CNX
13,558
CMP: INR126
TP: INR155 (+24%)
Improving macros to drive earnings/rerating
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
GAIL IN
4,510
566 / 7.7
133 / 66
28/-7/-8
1654
48.2
Financials Snapshot (INR b)
Y/E March
FY21E FY22E FY23E
Sales
576.4 712.8 741.6
EBITDA
54.6
97.4 102.0
Adj. PAT
37.6
69.1
72.9
Adj. EPS (INR)
8.3
15.3
16.2
EPS Gr. (%)
-49.3
83.8
5.5
BV/Sh.(INR)
111.3 121.2 131.8
Ratios
Net D:E
0.1
0.1
0.1
RoE (%)
8.3
14.2
13.7
RoCE (%)
7.0
11.7
11.5
Payout (%)
35.0
35.0
35.0
Valuations
P/E (x)
15.1
8.2
7.8
P/BV (x)
1.1
1.0
1.0
EV/EBITDA (x)
8.6
5.4
5.0
Div. Yield (%)
1.9
3.5
3.7
FCF Yield (%)
-2.7
6.9
6.1
Shareholding pattern (%)
As On
Sep-20 Jun-20
Promoter
37.6
37.6
DII
30.9
33.6
FII
15.6
15.5
Others
15.9
13.2
FII Includes depository receipts
Stock Performance (1-year)
Owing to the huge demand supply mismatch across the globe on the path of
normalization in the post COVID world, spot LNG prices and petchem margins are
trending at multi-year highs. GAIL has reported concerns in its Gas trading and
Petchem segment in 1HFY21, which are now likely to see some gains.
GAIL has outperformed the Nifty by ~30% (rallying ~36%) over the last one-month
and since its 2QFY21 result. Despite the recent rally, GAIL is trading at 5.4x FY22E
EV/EBITDA and 8.2x FY22E P/E.
Changing macros, if sustained, could result in an earnings/target price upgrade.
The company also has strong tailwinds such as (a) boost in transmission volumes
from increased domestic gas production, (b) upcoming LNG terminals, and (c) the
NGT’s increasing impetus on curbing air pollution
We reiterate GAIL as one of our top large-cap picks in the sector.
Spurt in spot LNG prices
GAIL sells ~10mmscmd of LNG outside India. Although it tries to cover its
high-cost US HH contracts via various swap/time/destination swap/hedging
contracts, an adverse situation of low oil prices combined with low spot LNG
prices results in poor profitability. The company reportedly witnessed a loss
in its marketing segment in 1HFY21.
From the lows of USD2.2/mmBtu in May’20, spot LNG prices recovered due
to shutdowns in liquefaction plants and recovery in demand to
USD8/mmBtu for Feb’21 delivery (link).
Combined with this, restart of the Kochi-Mangalore pipeline and pre-
commissioning of Gorakhpur, Sindri and Barauni fertilizer plants along the
Jagdishpur-Haldia pipeline would eliminate all concerns on US HH contracts
by mid-2021.
Delayed normalization in demand for refined petroleum products,
disruptions in few large petchem plants, and revival in demand has resulted
in short-term relief on petchem margins. PE-naphtha/PP-naphtha margin is
up 75%/107% YoY and 19%/47% QoQ in 3QFY21 till date.
Many Chinese and Middle East petchem expansions are still underway,
which may bring down margins going forward.
Due to difficulty in placing high-cost US HH contracts, it is understood that
GAIL had to use some part of the high cost gas as feedstock in its petchem
plant. With the waning of concerns on these contracts, profitability of the
petchem segment would also be boosted.
Conservatively, we forecast a transmission volume of 104/120/125mmscmd
in FY21E/FY22E/FY23E v/s 108mmscmd in FY20. We also highlight that gas
availability in India is expected to witness a sharp jump going forward.
From the KG-basin itself, over the next 2-3 years, both RIL and ONGC are
expected to produce an incremental 43mmscmd of gas, most of which
would flow through GAIL’s network.
Spurt in short-term petchem margin to aid profitability
Sep-19
37.6
33.9
15.5
12.9
Expect large spurt in transmission volumes
Swarnendu Bhushan- Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com)
Sarfraz Bhimani - Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
GAIL
In the next 2-3 years, 18mmtpa of incremental LNG regas facility (~76% of FY20
imports of ~23.6mmt) would be available (Dabhol: 2mmtpa, Mundra:
2.5mmtpa, Kochi: 1.5mmtpa, Dahej: 2mmtpa, Swan: 5mmtpa, and Chhara:
5mmtpa). Although all would not be utilized immediately post availability, it
would ultimately aid GAIL’s transmission volumes.
We highlight that an increase of 10mmscmd in transmission volume would
result in ~6/7% rise in FY22E EBITDA/PAT.
The main concern of investors over GAIL was its US HH contracts. But
commissioning of three fertilizer plants on the Jagdishpur-Haldia pipeline by
mid-2021 would mitigate these concerns.
In the meantime, spurt in spot LNG prices as well as petchem margins would
help the stock in the short-term.
GAIL is trading at 5.4x FY22E EV/EBITDA and 8.2x FY22E P/E. We forecast a
modest INR973/1,022/mscm of marketing margin on LNG in FY22E/FY23E v/s
1,327/973/mscm in FY19/FY20. As per our estimate sensitivity, a 10% rise in
implied trading margin would result in ~2% rise in FY22E EBITDA/EPS.
Despite the 30% outperformance in the last month, the stock trades at a 35%
and 38% discount to its one-year forward long-term P/E and P/B average,
respectively.
We reiterate GAIL as one of our top large-picks with a target price
of INR155 (valuing at 8x Dec’22E adjusted EPS).
As various aforementioned factors come into play, the stock would see a re-
rating, thus implying huge potential upside (please refer Exhibit 4 for various
valuation snapshots).
Platts LNG JKM (US$/mmBtu)
Slope (% of Brent)
Valuation and recommendation
Exhibit 1:
Spot LNG prices at two-year high, slope climbs to ~16%
Source: METI, MOFSL
Exhibit 2:
PE and PP up 6-8% v/s its long-term average in
3QFY21 till date…
USD/MT
1000
800
600
400
200
0
626
PE cracks
Average
666
Exhibit 3:
…as product prices are up, while Naphtha prices
are down
USD/MT
1000
800
600
400
200
0
600
PP cracks
Average
648
Source: Bloomberg, MOFSL
Source: Bloomberg, MOFSL
14 December 2020
2
 Motilal Oswal Financial Services
GAIL
Valuations and key assumptions
Exhibit 4:
Valuation summary
Business
Core business
Listed investments
Unlisted investments
Target price
Base case
INR/share
8.0
121
28
6
155
Long-term average
INR/share
INR/share
Remarks
10.0
13.0
151
196
Dec'22E adjusted EPS
28
28
20% discount to CMP/target price
6
6
20% discount to book value
185
230
Source: MOFSL
Exhibit 5:
Key assumptions table
Brent crude (USD/bbl)
Exchange rate (INR/USD)
Natural gas transmission
Total (mmscmd)
Adj. average tariff (INR/mscm)
Trading volume
LPG transmission
Volume ('000 MT)
Average tariff (INR/MT)
Petrochemicals
Sales ('000 MT)
Realization (USD/MT)
LPG and liquid hydrocarbons
Sales ('000 MT)
LPG realization (USD/MT)
EPS (INR/share)
FY16
47.5
65.5
93
1,181
74
2,819
1,724
334
1,420
1,087
468
5.1
FY17
49.0
67.1
100
1,257
81
3,363
1,530
578
1,468
1,095
435
8.5
FY18
55.6
64.6
105
1,295
85
3,721
1,532
673
1,362
1,275
526
10.1
FY19
70.1
69.9
107
1,473
97
3,975
1,570
735
1,313
1,325
549
14.0
FY20
61.2
70.9
108
1,522
96
3,909
1,628
738
1,047
1,266
472
16.5
FY21E
40.4
74.9
104
1,554
88
4,300
1,628
760
961
1,283
404
8.3
FY22E
50.0
75.8
120
1,575
103
4,730
1,628
800
965
1,400
451
15.3
FY23E
50.0
75.8
125
1,579
108
5,203
1,628
800
965
1,498
451
16.2
Source: MOFSL
Exhibit 6:
One-year forward P/E at a 35% discount to its
long-term average of 13.2x
P/E (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
28.0
26.1
20.0
16.8
12.0
4.0
9.7
6.8
13.2
8.7
Exhibit 7:
One-year forward P/B (x) trades at a 38% discount
to its long-term average of 1.6x
P/B (x)
Avg (x)
Max (x)
4.0
Min (x)
+1SD
-1SD
3.1
3.0
2.0
2.0
1.6
1.0
1.1
1.0
0.7
0.0
Source: Company, MOFSL
Source: Company, MOFSL
14 December 2020
3
 Motilal Oswal Financial Services
GAIL
Exhibit 8:
Transmission to remain major contributor
NG transmission %
Petrochemicals %
47
4
5
11
34
FY15
17
7
31
18
12
4
21
NG trading %
LPG (pre-subsidy) %
29
8
4
15
24
8
3
27
38
FY19
50
70
-9
19
2
4
25
LPG transmission %
17
6
4
24
16
6
5
25
93
Exhibit 9:
Gas transmission volumes to grow
Gas trans EBIT (INR b)
93
100
105
107
Gas trans vol. (mmscmd)
120 125
108 104
20
12
7
55
-9
FY16
44
FY17
44
FY18
49
48
13
17
23
29
33
35
35
43
45
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Source: Company, MOFSL
Exhibit 10:
LPG transmission segment EBIT
LPG trans EBIT (INR b)
4.0
3.9
LPG trans vol. (mmt)
5.2
4.7
4.3
Exhibit 11:
Petchem segment EBIT
Petchem EBIT (INR b)
578
441
1.3
334
-8.1
4.5
673
735
Petchem vol. ('000 MT)
800 800
738 760
3.1
2.8
3.4
3.7
2.7
3.8
-2.5
2.8
2.3
2.3
2.4
FY15
2.6
FY16
2.5
FY17
2.7
FY18
3.0
FY19
3.3
3.7
4.1
4.5
FY15
FY16
FY17
FY18
FY19
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
Exhibit 12:
Expect gas trading volume to grow in FY20/FY21
Gas trading EBIT (INR b)
97
Gas trading vol. (mmscmd)
Exhibit 13:
Expect LPG and liquid hydrocarbons EBIT to
improve along with realization in FY20/FY21
LPG & Liq. HC EBIT (INR b)
784
LPG Realization (USD/mmt)
72
6
74
14
81
13
85
96
88
103
108
468
435
526
549
472
404
451
451
13
29
22
(7)
24
27
29
FY15
7
FY16
12
FY17
23
FY18
25
FY19
16
12
17
16
FY15
FY16
FY17
FY18
FY19
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
Exhibit 14:
Return ratios to improve
RoE (%)
14
13
RoCE (%)
15
8
12
7
FY18
FY19
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
11
14
14
Exhibit 15:
Expect D/E ratio to decline
88
51
0.34
0.20
0.10
0.09
-57
FY15
FY16
FY17
FY18
FY19
25
-2
0.06
-21
0.05
-13
-1
-13
Net Debt (INRb)
Gross D/E Ratio
11
7
8
FY15
6
FY16
10
9
FY17
12
10
13
0.05
0.05
0.04
FY20 FY21E FY22E FY23E
Source: Company, MOFSL
14 December 2020
4
 Motilal Oswal Financial Services
GAIL
Financials and valuations
Income Statement
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
EO Items (net)
PBT
Tax
Rate (%)
Reported PAT
Adjusted PAT
Change (%)
FY16
5,16,143
-9.0
39,684
7.7
13,131
6,400
11,576
31,728
8,739
27.5
22,989
22,989
-24.4
FY17
4,80,743
-6.9
63,152
13.1
13,968
4,794
12,705
-2,987
54,108
19,079
35.3
35,029
38,167
52.4
FY18
5,36,612
11.6
76,339
14.2
14,151
2,751
9,870
277
69,584
23,400
33.6
46,183
45,699
31.8
FY19
7,51,268
40.0
95,287
12.7
15,502
1,385
15,712
-3,263
90,848
30,592
33.7
60,257
63,264
30.5
FY20
7,18,764
-4.3
83,694
11.6
18,360
1,085
14,168
1,016
79,434
13,227
16.7
66,206
74,193
9.9
FY21E
5,76,354
-19.8
54,566
9.5
18,681
1,414
14,877
49,348
11,745
23.8
37,603
37,603
-43.2
FY22E
7,12,779
23.7
97,392
13.7
18,923
1,750
15,621
92,340
23,242
25.2
69,098
69,098
83.8
(INR m)
FY23E
7,41,637
4.0
1,01,973
13.7
19,178
1,750
16,402
97,447
24,527
25.2
72,919
72,919
5.5
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Deferred Tax
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank Balance
Loans/Adv. & Other Assets
Current Liab. & Prov.
Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOFSL estimates
FY16
12,685
3,38,261
3,50,946
68,457
40,714
4,60,116
4,33,777
1,49,107
2,84,670
34,202
85,847
16,094
38,095
17,939
81,127
86,355
11,503
55,397
4,60,116
FY17
16,913
3,64,581
3,81,494
38,186
46,559
4,66,239
4,52,646
1,67,584
2,85,062
38,034
95,096
16,984
38,282
13,419
75,823
81,327
15,133
48,047
4,66,239
FY18
22,551
3,80,731
4,03,281
17,517
46,309
4,67,108
4,69,633
1,81,736
2,87,898
55,140
99,531
19,195
40,515
25,294
99,558
1,45,740
14,283
24,539
4,67,108
FY19
22,551
4,18,379
4,40,929
16,157
59,477
5,16,564
5,08,099
1,97,238
3,10,861
92,025
95,282
23,219
50,743
12,147
59,510
1,12,969
14,253
18,397
5,16,564
FY20
45,101
3,94,610
4,39,711
43,098
44,972
5,27,781
5,48,260
2,15,598
3,32,662
1,05,819
78,772
29,601
55,759
8,039
74,684
1,44,709
12,847
10,527
5,27,781
FY21E
45,101
4,19,069
4,64,171
70,000
44,972
5,79,143
6,08,476
2,34,278
3,74,198
1,05,603
78,772
23,736
44,712
6,323
74,684
1,16,037
12,847
20,570
5,79,143
FY22E
45,101
4,64,015
5,09,116
70,000
44,972
6,24,088
6,68,476
2,53,201
4,15,275
1,05,603
78,772
29,354
55,295
21,457
74,684
1,43,504
12,847
24,439
6,24,088
(INR m)
FY23E
45,101
5,11,447
5,56,548
70,000
44,972
6,71,520
7,28,476
2,72,379
4,56,097
1,05,603
78,772
30,543
57,534
30,449
74,684
1,49,314
12,847
31,049
6,71,520
14 December 2020
5
 Motilal Oswal Financial Services
GAIL
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. dvd. tax)
Valuation (x)
P/E
Adj. P/E (for investments)
Cash P/E
EV / EBITDA
EV / Sales
Price / Book Value
Dividend Yield (%)
Profitability ratios (%)
RoE
RoCE
RoIC
Turnover ratios
Debtors (No. of Days)
Fixed Asset Turnover (x)
Leverage ratio
Net Debt/Equity (x)
FY16
5.1
8.0
77.8
1.5
36.5
24.7
18.1
15.7
4.9
0.5
1.6
1.2
7.2
6.4
7.0
27
1.1
0.14
FY17
8.5
10.9
84.6
3.2
50.1
14.9
10.9
11.6
3.7
0.6
1.5
2.5
9.6
8.7
9.9
29
1.0
0.06
FY18
10.1
13.4
90.2
3.9
45.5
12.4
9.1
9.4
3.9
0.6
1.4
3.1
11.8
10.2
13.6
28
1.1
-0.02
FY19
14.0
16.8
98.9
3.8
34.7
9.0
6.6
7.5
2.6
0.4
1.3
3.0
14.3
12.9
17.5
25
1.5
0.01
FY20
16.5
18.8
105.9
6.4
52.5
7.7
5.6
6.7
6.0
0.8
1.2
5.1
15.0
12.7
16.7
28
1.4
0.08
FY21E
8.3
12.5
111.3
2.4
35.0
15.1
11.0
10.1
8.6
1.0
1.1
1.9
8.3
7.0
7.6
28
1.0
0.1
FY22E
15.3
19.5
121.2
4.4
35.0
8.2
6.0
6.5
5.4
0.9
1.0
3.5
14.2
11.7
14.6
28
1.1
0.1
FY23E
16.2
20.4
131.8
4.7
35.0
7.8
5.7
6.2
5.0
0.8
1.0
3.7
13.7
11.5
14.2
28
1.1
0.1
Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Tax paid
Change in deferred tax liability
(Inc)/Dec in Wkg. Capital
CF from Op. Activity
(Inc)/Dec in FA and CWIP
Free Cash Flow
(Pur)/Sale of Investments
CF from Inv. Activity
Inc /(Dec) in Debt
Dividends Paid
CF from Fin. Activity
Inc /(Dec) in Cash
Add: Opening Balance
Closing Balance
E: MOFSL estimates
FY16
31,728
13,131
-8,739
7,627
-8,531
35,216
-10,805
24,411
-42,624
-53,429
-12,026
-8,399
24,735
6,522
11,416
17,939
FY17
54,108
13,968
-19,079
5,845
2,830
57,672
-18,192
39,480
-9,249
-27,441
-30,270
-17,535
-34,751
-4,520
17,939
13,419
FY18
69,584
14,151
-23,400
-250
35,383
95,468
-34,094
61,375
-4,434
-38,528
-20,669
-21,035
-45,065
11,875
13,419
25,294
FY19
90,848
15,502
-30,592
13,168
-7,004
81,922
-75,350
6,573
4,249
-71,101
-1,360
-20,901
-23,968
-13,147
25,294
12,147
FY20
79,434
18,360
-13,227
-14,505
3,762
73,823
-53,956
19,867
16,510
-37,446
26,940
-34,791
-40,484
-4,108
12,147
8,039
FY21E
49,348
18,681
-11,745
0
-11,759
44,525
-60,000
-15,475
0
-60,000
26,902
-13,144
13,759
-1,716
8,039
6,323
FY22E
92,340
18,923
-23,242
0
11,265
99,286
-60,000
39,286
0
-60,000
0
-24,152
-24,152
15,134
6,323
21,457
(INR m)
FY23E
97,447
19,178
-24,527
0
2,383
94,480
-60,000
34,480
0
-60,000
0
-25,488
-25,488
8,993
21,457
30,449
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6
 Motilal Oswal Financial Services
GAIL
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
14 December 2020
7
 Motilal Oswal Financial Services
GAIL
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The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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