Motilal Oswal Financial Services

24 March 2021

Update | Sector: Healthcare

Divi’s Lab

BSE SENSEX

49,180

S&P CNX

14,549

CMP: INR3,483

TP: INR4,530 (+30%)

WIP in niche areas for sustained growth momentum



Buy

Stock Info

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)



DIVI IN

265

924.7 / 12.7

3913 / 1823

3/-19/-3

3578



Financials Snapshot (INR b)

Y/E MARCH

2021E 2022E 2023E

70.5 88.0 110.7

Sales

29.6 37.7 48.0

EBITDA

20.3 26.4 34.3

Adj. PAT

EBIT Margin (%)

38.2 39.0 40.1

Cons. Adj. EPS (INR) 76.4 99.5 129.3

Iohexol – niche opportunity in Contrast Media space

56.2 30.2 29.9



Contrast media agents have a market size of ~USD5b and are growing at a CAGR

EPS Gr. (%)

335.4 414.5 517.3

BV/Sh. (INR)

of 5–6%. Lower genericization and limited competition, coupled with DIVI’s

Ratios

specialized chemistry capabilities, provide a reasonable business opportunity.

Net D:E

0.0

0.0 -0.1

25.0 26.5 27.7



With estimated final product sales of USD500m for Iohexol (g-Omnipaque), we

RoE (%)

25.0 26.5 27.7

RoCE (%)

expect the Iohexal API US market size to be USD100–120m. The genericization

Payout (%)

20.5 20.5 20.5

of Omnipaque may provide a potential upside of USD40–50m for DIVI – post the

Valuations

successful validation and subsequent approval for its formulator customer. This

45.6 35.0 26.9

P/E (x)

is given the limited competition and DIVI’s considerable experience in this space.

31.1 24.4 19.0

EV/EBITDA (x)

Div. Yield (%)

0.4

0.3

0.4

Carotenoids – another limited-competition prospect for DIVI

FCF Yield (%)

0.6

1.0

1.4



DIVI has fully integrated the Nutraceutical facility (Unit II) for the API / finished

EV/Sales (x)

13.1 10.4

8.3

Shareholding pattern (%)

As On

Dec-20 Sep-20 Dec-19

Promoter

62.8

DII

7.8

8.9

9.0

FII

12.8

11.5

12.1

Others

16.7

16.8

16.2

FII Includes depository receipts

Stock Performance (1-year)

Divi's Lab.

Sensex - Rebased

4,000

3,200

2,400

1,600



Divi’s Labs (DIVI), in addition to having a robust base business, is enhancing its

product offerings in the generic API space – at least sixteen molecules are under

various phases of development and in the subsequent DMF filing stage.

Particularly, we find DIVI’s work interesting in the Contrast Media segment. While

there is complexity associated with Iodine-based products, DIVI’s strong chemistry

skill set and experience in the Contrast Media space have enabled it to bring the

Iohexol API to the validation phase.

We believe DIVI is well-placed to capitalize on the carotenoid opportunity, with a

21% sales CAGR to INR8b expected over FY20–23. This would be driven by healthy

demand, product offerings, integrated manufacturing, and the doubling of capacity.

We continue to value DIVI at 36x 12M forward earnings to arrive at TP of INR4,530.

We reiterate Buy, encouraged by promising demand prospects and multiple growth

levers – a) new product additions, b) a strong chemistry skill set, c) efficient

manufacturing capabilities, d) scale-led advantage in legacy molecules, e) minimal

financial leverage, and f) sufficient cash available for new projects.



form of carotenoids. In fact, it has doubled its capacity over the past year and

is well-positioned to benefit from the growing demand for carotenoids.

Various factors augur well for our expectation of a 21% sales CAGR to INR8b

over FY20–23: a) the global market size for carotenoid products is USD1.5b

and would increase at a CAGR of 4% over CY19–26; b) DIVI has an exhaustive

list of product offerings; c) the company has a presence across the

manufacturing value chain; and d) capacity enhancement is seen in this space.

DIVI has reported ~INR25b capex since FY18. This has been toward capacity

additions as well as to increase backward integration.

DIVI has also put up an additional investment of INR4b to fast-track the

building of capacity in the CS segment.

Considering enhanced product offerings and increased asset utilization, we

expect a 27% sales CAGR over FY20–23. This, coupled with better operating

leverage, would drive a 38% earnings CAGR over FY20–23E.

We continue to value DIVI at 36x 12M forward earnings and arrive at TP of

INR4,530. Maintain Buy.

Reiterate BUY

Tushar Manudhane - Research Analyst

(Tushar.Manudhane@MotilalOswal.com)

Bharat Hegde, CFA

(Bharat.Hegde@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.

Divi’s Lab

Iohexol – good opportunity in Contrast Media space



DIVI is in the process of developing 16 new APIs to lead the next phase of growth.

Particularly, Iohexol, which is under validation, is an interesting product. Given that it

finds application in the Contrast Media space and has only three DMF filers to date, it

offers reasonable business opportunity for DIVI. However, this is subject to a) the

completion of the validation, b) the DMF filing, and c) the subsequent ANDA approval

for the formulator to use the API provided by DIVI.

With estimated final product sales of USD500m for Iohexol (g-Omnipaque), we expect

the Iohexal API US market size to be USD100–120m. The genericization of Omnipaque

may provide a potential upside of USD40–50m for DIVI given the limited competition

and DIVI’s considerable experience in this space.

DIVI is in the process of enhancing its generic API offerings:



DIVI is in the process of developing 16 new APIs to lead the next phase of

growth. Currently, it has around 30 products in its Generic API portfolio. It is

among the Top 2 producers in 18 of the 30 APIs in its generic API offerings.

Exhibit 1: 16 Generic API products under various stages of development

Product

Therapeutic category

Development stage

Ranolazine

Anti-Anginal

Validations completed and planning to file DMF

Ticagrelor

Anti-Coagulant

Validations completed and planning to file DMF

Lacosamide

Anti-Convulsant/Anti-Epileptic

Validations completed and planning to file DMF

Iohexol

Contrast Medium

Under Validation

Hydroxychloroquine

Anti-Malarial

Under Validation

Favipiravir

Anti-Viral

Under Validation

Mirabegron

Anticholinergic

Sample Available

Nicotine

Smoking Cessation Aid

Sample Available

Dolutegravir

Anti-HIV

Sample Available

Ibudilast

Anti-Inflammatory

Sample Available

Rivaroxaban

Anti-Coagulant

Sample Available

Tenofovir Alafenamide

Anti-HIV

Sample Available

Vildagliptin

Anti-Diabetic

Sample Available

Brivaracetam

Anti-Convulsant

Early-stage development

Dabigatran

Anti-Coagulant

Early-stage development

Benserazide

Anti-Parkinson

Early-stage development

Source: MOFSL, Company



Validations have been completed on three APIs and the company is preparing

for the DMF filings. Three are under validation, seven have samples available,

and three are in the early stage of development.

DIVI – well-placed to benefit from Iohexol



Omnipaque (Iohexol), Isovue (Iopamidol), and Visipaque (Iodixanol) are the

major products in the Iodine-based Imaging Agents category. Despite these

being old products, there are no generics for these products in the US.

Particularly, GE Healthcare’s Omnipaque is the biggest product in the Contrast

Media Agents category, with an estimated USD500m in annual sales in the US.

24 March 2021

Divi’s Lab

Impurities – a major hurdle in scaling up Iodine-based products such as

Iohexol



Iodine-based drug substances are difficult to manufacture due to impurities that

get introduced during the large-scale manufacturing process. In particular, o-

alkylated derivatives are difficult impurities that get introduced during the

Iohexol manufacturing process.

Continuous purification is required at each step to avoid impurities.

Intermediates in the manufacturing process have the tendency to absorb

moisture from the atmosphere.

Compounds used in contrast media products are aqueous in nature and difficult

to crystallize.

Exhibit 2: API supply snapshot for Iodine-based products

Drug Name

Visipaque

Ultravist

Isovue

Active

Ingredient

Iodixanol

Iopromide

Iopamidol

Application

CT Scan, X Ray

CT scan,

angiography

CT Scan, X Ray

Manufacturers

GE Healthcare

Bayer, Berlex

#Global API

suppliers

US DMFs

filed

Divi's Status

Approved DMF

in US, Europe,

Korea and China

Under validation

Source: MOFSL, Industry



Omnipaque

Optiray

Oxilan

Iohexol

Ioversol

Ioxilan

CT Scan

CT scan,

angiography

CECT Scan

Hospira, Squibb Diagnostics, 20

Bracco, BIPSO, General

Injectables & Vaccines

GE Healthcare, Sanofi

Tyco Healthcare, Mallinckrodt, 5

Liebel Flarsheim,

Guerbet

Considering Iohexol (g-Omnipaque) is a limited-competition product, with

formulation sales estimated at USD500m, we expect the API US market size to

be USD100–120m. Accordingly, we expect DIVI’s API sales to be USD40–50m

from this opportunity, post approval for its formulation customer.

Enhanced diagnosis favors higher use of contrast media agents



Contrast media agents are used in imaging tests such as CT scans, MRI scans,

and x-rays. They are administered predominantly either orally or through

injection.

Contrast agents are used in diagnosing cardiac, respiratory, gastrointestinal, and

nephrological disorders. They are also used in diagnosing cancers.

The market for contrast media agents is categorized by use in a) agents used in

x-rays (and CT scans) and b) those used in MRI scans. Iodine-based products

dominate the X-ray Imaging market, while the MRI market is dominated by

Gadolinium-based agents.

Contrast media agents have a USD5–6b market size and are growing at 3–4%

annually. Contrast agents used in x-rays form 80% of the total Contrast Media

market, while MRI agents form the remaining 20%. The US is estimated to be

the biggest market for contrast media agents, followed by Japan and Europe.

24 March 2021

Divi’s Lab

Exhibit 3: 3–4% CAGR expected over 2019–29 for Contrast Media industry

X-Ray

MRI

~USD7-8b

~USD4-5b

~20%

~80%

~25%

~75%

2019

2029

Source: MOFSL, Industry



Advancement in diagnostic procedures using imaging and rising instances of

cancer and cardiac diseases are the key factors driving these products. As

advancement in imaging technique demands more complex imaging technique,

MRI-based procedures are also increasing at a faster rate than x-ray / CT scan

based procedures. Based on this, and a lower base, Gadolinium-based imaging

agents are growing at a faster rate of 5–6% per year. X-ray / CT scan based

imaging agents are more mature and growing at a rate of 2–3% per year.

Iodine-based imaging agents are used in more than 60% of the total 30m

imaging procedures conducted in the US per year – with a market size of

USD1.5b in the US.

There are no generic products in the US for these products. However, generics

have a presence in other geographies. For example, Nitigraf, a generic Iohexol, is

approved in Europe.

Assuming blended API cost of 10–20%, the Iodine-based Contrast Media API

market size is estimated to be USD800m–USD1b.

24 March 2021

Divi’s Lab

Carotenoids – another niche opportunity for DIVI



DIVI has doubled its capacity and is geared up to benefit from the growing demand for

carotenoids.

The global Carotenoid market is estimated to be ~USD1.5b and post a CAGR of ~4%

over CY19–26.

DIVI’s portfolio of carotenoids (comprising Beta Carotene, Astaxanthin, Lycopene,

Canthaxahnthin, and Lutein) and complete integration of manufacturing bode well for

market share gains in this limited-competition opportunity.

DIVI’s added capacity to improve sales momentum in Carotenoids segment



DIVI doubled its revenue to INR4.4b (8% of sales) in the Carotenoids business

over FY18–20 and delivered 22% YoY growth in 9MFY21.

Over the past year, DIVI has enhanced its capacity by 100% on successful

qualification from its customers.

Exhibit 4: We expect carotenoid sales CAGR of 21% for DIVI over FY20–23

Carotenoids/Neutraceuticals (INRm)

2,390

FY17

2,690

FY18

4,000

FY19

4,430

FY20

5,981

FY21E

6,698

FY22E

7,837

FY23E

Source: MOFSL, Company

Favorable demand drivers, limited competition provide better prospects for

carotenoid manufacturers



The global Carotenoid market size is ~USD1.5b and would post a 4.2% CAGR

over the next 7 years to reach USD2b in CY26. Synthetic carotenoids form ~70%

of the global Carotenoid market.

Exhibit 6: Europe – biggest market for carotenoids

Exhibit 5: Carotenoid market to reach USD2b in 2026

Global Carotenoid market size (USDb)

Carotenoid estimate sales split (2019)

Others

10%

Asia

24%

26%

1.5

2019

2.0

2026

Source: MOFSL, Industry

Europe

40%

Source: MOFSL, Industry

24 March 2021

Divi’s Lab



Carotenoids are mainly used as food coloring in the Food and Beverage segment

and dietary supplements in human and animal foods. Animals cannot produce

carotenoids and hence these are added to their feed to provide immunity from

diseases. They also provide color to food derived from animals, such as

poultry/eggs, fish, and shrimp. The Animal Feed industry accounts for ~40% of

all carotenoid sales, the Food and Beverage industry accounts for 20%, and

Dietary Supplements accounts for ~5% of all sales.

The use of carotenoids in human dietary supplements is one of the main drivers

of increased uptake. Developed countries, especially the US, are focusing on

preventive healthcare owing to their high cost and faster growth of healthcare

spending.

Astaxanthin

is an antioxidant and can help in preventing aging and

diseases such as Alzheimer's, eye diseases, etc.

Lutein

is also sometimes

referred to as an ‘eye vitamin’ owing to its use in preventing eye diseases,

especially in seniors.

Canthaxanthin

is known to be used by people with a

genetic disease called erythropoietic protoporphyria (EPP) to reduce sensitivity

to the eyes.

Beta carotene

is converted by the body into Vitamin A, which is

needed for healthy skin, immune system, and good vision. Beta carotene is also

used to prevent certain cancers, heart diseases, and cataract, among others.

Lycopene

has been linked to improved health, including better heart health,

protection from sunburn, and prevention of certain cancers.

Astaxanthin is currently the biggest carotenoid in terms of sales by value, with

USD600m+ estimated in 2019 sales globally. Lutein is the fastest growing

carotenoid – it posted a ~6.5% CAGR on a base of ~USD300m (2019).

Exhibit 7: Astaxanthin the biggest product category, while Lutein the fastest growing

Est. Market Size in

Carotenoid

Est. Gr rate (%) Trends

2019 (USD m)

Astaxanthin

620

3.5



High-value product used in Food and Feed industries



Increasing use in dietary supplement, especially for elderly

Canthaxanthinn

2.2

population

Lutein

290

6.4



Rising demand as health supplement and natural colorant in F&B

Lycopene

120

5.0



More uses v/s traditional end-use markets



Better demand in end-use industries and customer’s preference

Beta Carotene

480

4.0

towards natural products

Source: MOFSL, Industry

Advantage for DIVI



BASF, DSM, and DIVI are some of the biggest players in the global Carotenoid

market. DIVI is backward integrated for the production of API and finished forms

of carotenoid, with a full-fledged R&D, application testing, and support facility

under one roof at the Unit II facility. Its competitors produce APIs and finished

forms at different locations; hence, they have a higher cost profile.

Expect 21% sales CAGR for DIVI in Carotenoids business over FY20–23



DIVI has garnered INR5.2b over the past 12M in this segment, with 95% coming

from the US and Europe.

Given that customer validation is in place, capacity enhancements are already

done, and it has a presence across the manufacturing value chain, we expect

DIVI to deliver a 21% sales CAGR in this segment over FY20–23.

24 March 2021

Divi’s Lab

Valuation and view

New offering and market share gains to drive API segment



DIVI is well-positioned to add new products and scale up existing products. It is

making significant investments not only in terms of capex but also in chemistry-

led process improvements. These technology-driven improvements enable DIVI

to lower costs in existing products to achieve better margins and lower waste.

As DIVI is a large-volume player, process improvements are driving substantial

margin expansion.

Its next leg of growth is expected to come from the 16 new molecules it is

currently working on and market share gains from already commercialized APIs.

Strong chemistry skill sets, trust among innovators to drive CS business



DIVI has built its CRAMS business based on its long-standing relationships with

big pharma companies. It has a long-standing relationship with 6 of the top 10

pharma innovators.

The global Contract Research and Manufacturing Services (CRAMS) business is

expected to grow at a CAGR of 9% over 2019–23 on new investments in R&D (as

patent drugs lose their exclusivity) and increased demand for prescription drugs.

Global spending on medicine reached USD1.3t in CY19 and is expected to post a

4–5% CAGR to USD1.5t over CY19–23E. With its low cost, strong chemistry skill

sets, continuous process improvement, and compliance record, DIVI expects to

maintain a strong position in the CRAMS segment.

Big pharma companies have reduced their own API manufacturing and are

increasingly looking to outsource their requirements for APIs. DIVI’s strong

technical capabilities, large team of 350 R&D scientists, scale of commercial

manufacturing, and level of regulatory compliance bode well for business

growth. Its ability to manufacture products ranging from a few kilograms to

thousands of tons makes it a preferred partner for all types of global pharma

companies.

Capex benefits kicking in; to see meaningful benefit over medium term



DIVI has posted ~INR25b capex since FY18. The increase in sales seen currently

has been driven by increased volumes from these facilities. The recently

commercialized DC-SEZ and DCV-SEZ units have started contributing to

revenues. It has also included backward integration projects, which would aid

margin expansion. It has INR5b in CWIP currently and would complete this capex

phase by FY21.

DIVI has also made an additional investment of INR4b to fast-track the building

of capacity in the CS segment. Meaningful commercial benefit from the same is

expected from FY22.

Well-positioned to deliver strong earnings CAGR over next two years



We expect a 38% earnings CAGR over FY20–23E, led by increased business

prospects from CS and Generics, new product additions over the near term, and

~930bp margin expansion on better operating leverage.

24 March 2021

Divi’s Lab



We continue to value DIVI at 36x 12M forward earnings to arrive at TP of

INR4,530. We reiterate BUY, supported by promising demand prospects and

multiple growth levers – new product additions, strong chemistry skill sets,

efficient manufacturing capabilities, scale-led advantage in legacy molecules,

minimal financial leverage, and sufficient cash available for new projects.

Exhibit 9: P/B chart

Exhibit 8: P/E chart

50.0

40.0

30.0

20.0

10.0

30.2

24.1

18.0

15.5

P/E (x)

Min (x)

Avg (x)

+1SD

Max (x)

-1SD

41.0

P/B (x)

11.0

8.0

Avg (x)

Max (x)

9.7

6.5

8.6

35.8

5.0

2.0

5.2

3.9

2.5

Source: MOFSL, Company, Bloomberg

24 March 2021

Divi’s Lab

Financials and valuations

Income Statement

Y/E March

Net Sales

Change (%)

EBITDA

Growth (%)

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income - Rec.

PBT

Current Tax

Tax Rate (%)

Reported PAT

Adj. PAT

Change (%)

Margin (%)

FY15

31,032

22.9

11,535

14.5

37.2

1,360

10,175

564

10,721

2,206

20.6

8,515

10.1

27.4

FY16

37,975

22.4

14,100

22.2

37.1

1,182

12,918

1,048

13,928

2,842

19.2

11,258

32.2

29.6

FY17

40,952

7.8

14,350

1.8

35.0

1,233

13,117

859

13,953

2,852

24.0

10,604

-5.8

25.9

FY18

39,128

-4.5

12,617

-12.1

32.2

1,425

11,192

855

12,313

2,898

28.8

8,770

8,571

-19.2

21.9

FY19

49,463

26.4

18,718

48.4

37.8

1,689

17,029

1,248

18,551

4,755

27.1

13,527

13,292

55.1

26.9

FY20

53,944

9.1

18,422

-1.6

34.1

1,862

16,559

1,075

18,195

3,928

24.3

13,765

12,990

-2.3

24.1

FY21E

70,545

30.8

29,629

60.8

42.0

2,688

26,941

590

27,090

6,773

26.0

20,047

20,291

56.2

28.8

FY22E

88,035

24.8

37,679

27.2

42.8

3,380

34,299

624

34,894

7,677

24.3

26,414

30.2

30.0

(INR m)

FY23E

110,687

25.7

48,038

27.5

43.4

3,643

44,395

664

45,030

9,456

23.8

34,313

29.9

31.0

Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Deferred liabilities

Total Loans

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Investments

Curr. Assets

Inventory

Account Receivables

Cash and Bank Balance

Loans & Advances

Curr. Liability & Prov.

Account Payables

Provisions

Net Current Assets

Appl. of Funds

FY15

531

34,423

34,954

1262

261

36,477

19,634

6,545

13,089

2,182

7,330

21,451

11,626

7,416

652

1,756

7,575

4,303

3,271

13,876

36,477

FY16

531

42,402

42,933

731

419

44,083

21,938

7,551

14,388

2,639

8,025

23,924

12,078

8,809

734

2,303

4,896

4,759

137

19,028

44,083

FY17

531

53,043

53,574

1228

357

55,160

24,339

8,747

15,592

4,436

16,307

25,215

13,199

8,984

787

2,244

6,390

6,224

166

18,825

55,160

FY18

531

58,717

59,248

1917

631

61,796

30,134

10,172

19,962

1,198

18,894

27,769

13,507

10,144

1,125

2,994

6,026

5,867

159

21,743

61,796

FY19

531

69,041

69,572

2188

1,056

72,816

32,739

11,861

20,878

4,919

19,456

35,106

17,723

11,634

1,153

4,597

7,543

7,400

143

27,563

72,816

FY20

531

72,568

73,099

2696

336

76,131

41,542

13,723

27,819

9,197

9,714

38,584

18,639

14,134

1,226

4,586

9,182

8,952

230

29,402

76,131

FY21E

531

88,505

89,036

2967

336

92,339

57,934

16,411

41,523

2,000

9,714

49,209

26,102

17,636

1,943

3,527

10,106

9,876

230

39,103

92,339

FY22E

531

109,503

110,034

3769

336

114,139

65,934

19,791

46,143

2,000

9,714

67,077

33,453

22,889

5,452

5,282

10,794

10,564

230

56,283

114,139

(INR m)

FY23E

531

136,779

137,310

5030

336

142,677

75,934

23,434

52,500

2,000

9,714

90,869

44,275

28,779

11,174

6,641

12,405

12,176

230

78,464

142,677

24 March 2021

Divi’s Lab

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Accumulated Dep/Gross Block (x)

Fixed Asset Turnover (x)

Debtor (Days)

Inventory (Days)

Working Capital Turnover (Days)

Leverage Ratio (x)

Current Ratio

Debt/Equity

FY15

32.1

37.2

131.7

11.7

36.5

FY16

42.4

46.9

161.7

24.1

56.8

FY17

39.9

44.6

201.8

0.0

FY18

32.3

37.7

223.2

12.0

36.4

FY19

50.1

56.4

262.0

12.1

23.7

FY20

48.9

56.0

275.4

38.6

74.4

FY21E

76.4

86.6

335.4

13.2

20.5

FY22E

99.5

112.2

414.5

9.4

20.5

FY23E

129.3

143.0

517.3

12.2

20.5

108.6

93.6

26.4

29.8

80.1

0.3

82.1

74.3

21.5

24.3

65.5

0.7

87.2

78.1

17.3

22.6

64.4

0.0

107.8

92.5

15.6

23.6

73.2

0.3

69.6

61.7

13.3

18.7

49.4

0.3

71.2

62.2

12.6

17.1

50.1

0.5

45.6

40.2

10.4

13.1

31.1

0.4

35.0

31.0

8.4

10.4

24.4

0.3

26.9

24.4

6.7

8.3

19.0

0.4

26.3

26.1

32.1

0.33

1.7

137

156

28.9

28.7

35.4

0.34

1.8

116

176

22.0

21.8

30.1

0.36

1.8

118

161

15.2

15.1

21.5

0.34

1.4

126

192

20.6

20.4

28.3

0.36

1.6

131

195

18.2

18.5

24.3

0.33

1.5

126

191

25.0

29.6

0.28

1.4

135

192

26.5

29.6

0.30

1.4

139

211

27.7

31.2

0.31

1.6

146

222

2.8

-0.01

4.9

-0.01

3.9

-0.01

4.6

-0.01

4.7

0.00

4.2

-0.01

4.9

0.0

6.2

0.0

7.3

-0.1

Cash Flow Statement

Y/E March

Op.Profit/(Loss) bef. Tax

Interest/Dividends Recd.

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

EO Expense / (Income)

CF from Operations incl EO Expense

(inc)/dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Change in networth

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

CF from Fin. Activity

Inc/Dec of Cash

Add: Beginning Balance

Closing Balance

Bank balance/overdraft

Total Cash and Cash Eq

FY15

11,535

564

-2,206

-1,349

8,545

-282

8,263

-2,967

5,578

-2,199

-41

-5,208

-19

-3,106

-3,029

-203

-177

829

652

FY16

14,100

1,048

-2,842

-5,070

7,236

3,143

10,379

-2,762

4,474

-695

-607

-4,064

158

-38

-6,390

-6,311

-177

-174

908

734

FY17

14,350

859

-2,852

256

12,613

-1,109

11,504

-4,197

8,416

-8,282

1,083

-11,396

-61

-23

131

-174

-43

830

787

FY18

12,617

855

-2,898

-2,581

7,993

-513

-280

7,759

-2,557

5,436

-2,586

360

-4,783

274

-13

-3,192

-3,142

-166

-43

-209

1,334

1,125

FY19

18,718

1,248

-4,755

-5,792

9,419

-185

-309

9,543

-6,326

3,093

-562

-6,854

425

-35

-3,200

-2,460

231

-209

1,132

1,153

FY20

18,422

1,075

-3,928

-1,766

13,804

-2,266

-621

12,159

-13,081

722

9,742

2,504

-834

-720

-61

-10,241

-10,914

411

432

794

1,226

FY21E

29,629

590

-6,773

-8,983

14,464

423

14,040

-9,195

5,268

-9,195

-18

-4,110

-4,128

717

432

1,149

794

1,943

FY22E

37,679

624

-7,677

-13,671

16,955

-8,000

8,955

-8,000

-29

-5,417

-5,446

3,509

1,149

4,658

794

5,452

(INR Million)

FY23E

48,038

664

-9,456

-16,459

22,787

-10,000

12,787

-10,000

-29

-7,036

-7,065

5,722

4,658

10,380

794

11,174

24 March 2021

Divi’s Lab

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

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specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report

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Research Analyst views on Subject Company may vary based on Fundamental

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located in Hong Kong & are not conducting Research Analysis in Hong Kong.

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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

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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.

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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

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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

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

24 March 2021

Divi’s Lab

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

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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

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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

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* 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.

24 March 2021