8 August 2021
1QFY22 Results Update | Sector: Metals
Nalco
Estimate change
TP change
Rating change
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CMP: INR93
TP: INR107 (+15%)
Higher costs lead to EBITDA miss
Strong aluminum prices to support earnings
Buy
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
NACL IN
1,837
172 / 2.3
97 / 29
14/80/126
1753
48.7
NALCO’s 1QFY22 result was below our expectations due to higher than
expected costs and miss on volumes/realization. EBITDA/adjusted PAT
declined by 38%/45% QoQ to INR8.9b/INR3.5b and missed our estimate by
34%/38%.
We lower our FY22E EBITDA estimate by 10% to factor in higher costs.
However, we raise our FY23E EBITDA estimate by 15% as we revise
upwards our FY23E LME aluminum assumption by 7% to USD2,300/t. We
maintain our
Buy
rating.
Revenue/EBITDA/adjusted PAT fell 12%/38%/45% QoQ to
INR24.7b/INR5.8b/INR3.5b and was 15%/34%/38% below our estimate.
Sequentially, the decline was led by lower volumes and higher costs (on a
lower base due to one-offs), partly offset by higher LME prices.
The miss on EBITDA was led by lower than expected aluminum volumes
(91kt, 9% lower than our estimate), lower than expected realizations, and
higher than expected costs. Employee cost stood at INR5.8b v/s INR4.3b in
4QFY21 (INR5.2b in 1QFY21).
Derived aluminum realization came in at USD2,589/t and was 4% lower
than our estimate of USD2,691/t. Alumina NSR came in lower at USD274/t
and was 10% below our estimate.
Aluminum:
It reported an EBIT of INR4b (-32% QoQ). Revenue declined by
11% QoQ to INR17.4b, despite higher LME (USD2,393/t; +14% QoQ), due to
lower volumes (91kt). Aluminum production was flat QoQ at 112kt.
Alumina:
Revenue (excluding inter-segment) stood at INR6.4b (-27% QoQ).
EBIT came in at INR1.2b (-60% QoQ). Alumina external sales declined by
16% QoQ to 316kt.
With spot LME aluminum hovering over USD2,550/t (up ~15% in FY22 YTD),
the near term profitability outlook is strong. Alumina prices have not yet
reacted to the strength in aluminum and could surprise positively in 2HFY22.
We expect higher aluminum prices to absorb the cost shock and lead to
improved margin in subsequent quarters. With integrated mining operations,
NALCO is the best play on higher LME prices.
Given the tight demand-supply scenario, we expect aluminum prices to
remain strong. We factor in LME prices of USD2,375/USD2,300 per tonne
for FY22E/FY23E.
The management has announced a 1mtpa alumina refinery expansion at a
capex of ~INR64b, and expects to complete the project in FY23. Given its
slow execution, we expect commissioning by FY24E.
We value the stock on a SoTP basis at 5x FY23E EV/EBITDA and at 0.75x
book value for growth CWIP to arrive at our TP of INR107. At the CMP, it
provides an attractive dividend yield of ~5%. We maintain our Buy rating.
EBITDA declines by 38% QoQ on higher costs
Financials & Valuations (INR b)
Y/E MARCH
2021 2022E 2023E
Sales
89.6 111.8 117.2
EBITDA
17.8 27.9 32.8
Adj. PAT
9.9 17.3 20.4
EBITDA Margin (%)
19.9 24.9 28.0
Cons. Adj. EPS (INR)
5.4
9.4 11.1
EPS Gr. (%)
629.4 74.4 17.7
BV/Sh. (INR)
58.2 62.9 68.5
Ratios
Net D:E
-0.2
-0.2
-0.1
RoE (%)
9.7 15.6 16.9
RoCE (%)
11.7 19.3 20.0
Payout (%)
35.3 49.9 49.6
Valuations
P/E (x)
14.8
8.5
7.2
P/BV (x)
1.4
1.3
1.2
EV/EBITDA(x)
7.0
4.6
4.2
Div. Yield (%)
3.1
5.9
6.9
Shareholding pattern (%)
As On
Jun-21 Mar-21
Promoter
51.3
51.3
DII
11.5
9.6
FII
8.6
8.4
Others
28.6
30.7
FII Includes depository receipts
Valuation and view
Jun-20
51.5
13.8
9.0
25.6
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.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Nalco
Quarterly performance
Y/E March
Net Sales
Change (YoY %)
EBITDA
Alumina-EBITDA (USD/t)
Aluminum - EBITDA (USD/t)
As a percentage of net sales
Interest
Depreciation
Other Income
PBT (before EO Item)
Extra-ordinary Income
PBT (after EO Item)
Total Tax
Tax (%)
Reported PAT
Adjusted PAT
1Q
13,806
-33.8
1,291
38
120
9.3
18
1,359
333
247
0
247
80
32.6
166
166
FY21
FY22
2Q
3Q
4Q
1Q
2QE
3QE
4QE
23,749 23,788 28,215 24,746 28,628 28,724 29,732
0.5
13.9
45.7
79.2
20.5
20.8
5.4
2,759 4,339 9,440 5,808 7,655 7,113 7,297
69
85
120
63
65
83
82
141
287
744
646
766
600
561
11.6
18.2
33.5
23.5
26.7
24.8
24.5
18
17
17
18
17
18
17
1,432 1,697
1,571
1,491 1,484
1,477
1,469
242
362
530
317
217
325
477
1,550 2,986 8,382 4,616 6,371 5,945 6,288
0
0
0
0
0
0
0
1,550 2,986 8,382 4,616 6,371 5,945 6,288
476
588
-974 1,139 1,633
1,523
1,611
30.7
19.7
-11.6
24.7
25.6
25.6
25.6
1,075 2,398 9,356 3,477 4,739 4,421 4,676
1,075 2,398 6,287 3,477 4,739 4,421 4,676
FY21
FY22
89,558 1,11,830
5.7
24.9
17,828 27,874
83
74
336
640
19.9
24.9
71
70
6,058
5,921
1,466
1,337
13,165 23,220
13,165
170
1.3
12,995
9,926
23,220
5,906
25.4
17,314
17,314
FY22E
1QE
29,283
112.1
8,847
120
838
30.2
17
1,563
300
7,567
0
7,567
1,939
25.6
5,628
5,628
(INR m)
Var.
(%)
-15
-34
-5
6
-39
-39
-41
-38
-38
(INR m)
FY22E
46,156
82,767
6,015
18,298
13
22
Segmental quarterly performance – Financials
1Q
7,685
9,306
415
470
5
5
FY21
2Q
3Q
9,767
9,875
17,527 16,364
1,185
1,799
732
1,582
12
18
4
10
4Q
12,177
19,438
2,959
5,892
24
30
1Q
10,680
17,379
1,198
3,999
11
23
FY22E
2QE
3QE
10,497 11,706
22,646 21,673
1,225
1,612
5,509
4,536
12
14
24
21
FY21
4QE
13,271
21,069
1,981
4,255
15
20
39,505
62,635
6,358
8,677
16
14
Alumina revenue
Aluminum revenue
Alumina EBIT
Aluminum EBIT
Alumina EBIT margin (%)
Aluminum EBIT margin (%)
Segmental quarterly performance
Y/E March
Alumina production (kt)
CoP (USD/t)
Aluminum production (kt)
CoP (USD/t)
Aluminum Sales (kt)
Alumina Sales (kt)
Avg. LME Aluminum (USD/t)
NSR premiums (USD/t)
Alumina NSR (USD/t)
1Q
466
224
98
1,611
73
220
1,493
207
262
FY21
2Q
3Q
487
555
217
203
106
102
1,791 1,879
123
103
285
344
1,703 1,925
212
228
286
289
4Q
577
195
112
1,626
113
378
2,093
267
315
1Q
583
210
112
2,091
91
316
2,393
196
274
FY22
2QE
3QE
477
516
182
223
108
108
2,086 1,903
107
117
326
311
2,450 2,350
275
265
297
307
FY21
4QE
585
225
107
1,810
120
382
2,300
265
307
2,085
207
418
1,734
412
1,227
1,804
228
288
FY22E
2,161
211
435
1,962
435
1,335
2,373
250
296
(INR m)
FY22E
1QE
583
261
108
1,987
100
300
2,393
298
302
Var.
(%)
0
4
-9
5
0
-34
-10
Valuation and view
With spot LME aluminum hovering over USD2,550/t (up ~15% in FY22 YTD), the
near term profitability outlook is strong. Alumina prices have not yet reacted to
the strength in aluminum and could surprise positively in 2HFY22.
We expect higher aluminum prices to absorb the cost shock and lead to
improved margin in subsequent quarters. With integrated mining operations,
NALCO is the best play on higher LME prices.
Given the tight demand-supply scenario, we expect aluminum prices to remain
strong. We factor in LME prices of USD2,375/USD2,300 per tonne for
FY22E/FY23E.
8 August 2021
2
 Motilal Oswal Financial Services
Nalco
The management has announced a 1mtpa alumina refinery expansion at a capex
of ~INR64b, and expects to complete the project in FY23. Given its slow
execution, we expect commissioning by FY24E.
We value the stock on a SoTP basis at 5x FY23E EV/EBITDA and at 0.75x book
value for growth CWIP to arrive at our TP of INR107. At the CMP, it provides an
attractive dividend yield of ~5%. We maintain our Buy rating.
Exhibit 1: Target price calculation
(INR million)
EBITDA
EV-to-EBITDA (x)
Target EV
Add: Growth CWIP at 75%
Add: Cash surplus
Equity value
Target price (INR)
Key assumption
USD:INR rate
LME (USD/t)
FY19
29,561
FY20
4,892
FY21
17,828
FY22E
27,874
FY23E
32,833
5.0
1,64,163
25,866
6,761
1,96,789
107
75.0
2,300
35,772
20,355
19,982
16,146
69.9
2,033
70.9
1,750
74.0
1,804
74.0
2,373
Source: MOFSL, Company
8 August 2021
3
 Motilal Oswal Financial Services
Nalco
Financials and valuations
Income Statement
Y/E March
Net Sales
Change (%)
Total Expenses
EBITDA
% of Net Sales
Depn. and Amortization
EBIT
Net Interest
Other income
PBT before EO
EO income
PBT after EO
Tax
Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventories
Account Receivables
Cash and Bank Balance
Others
Curr. Liability and Prov.
Account Payables
Provisions and Others
Net Curr. Assets
Appl. of Funds
FY17
75,430
10.7
64,634
10,797
14.3
4,804
5,993
27
4,075
10,041
402
10,442
2,962
28.4
7,480
7,193
0.8
FY18
95,094
26.1
78,311
16,783
17.6
4,804
11,979
20
3,008
14,968
5,421
20,388
6,964
34.2
13,424
9,855
37.0
FY19
1,14,993
20.9
85,432
29,561
25.7
4,761
24,800
24
3,259
28,035
-636
27,399
10,075
36.8
17,324
17,726
79.9
FY20
84,718
-26.3
79,826
4,892
5.8
5,298
-406
57
2,726
2,262
0
2,262
880
38.9
1,382
1,382
-92.2
FY21
89,558
5.7
71,730
17,828
19.9
6,058
11,770
71
1,466
13,165
0
13,165
170
1.3
12,995
9,926
618.0
FY22E
1,11,830
24.9
83,956
27,874
24.9
5,921
21,953
70
1,337
23,220
0
23,220
5,906
25.4
17,314
17,314
74.4
(INR m)
FY23E
1,17,194
4.8
84,362
32,833
28.0
6,039
26,793
70
669
27,392
0
27,392
7,019
25.6
20,372
20,372
17.7
(INR m)
FY23E
9,183
1,16,576
1,25,759
15,461
8,937
1,50,157
1,18,258
41,614
76,644
48,755
3,133
55,598
16,054
1,926
22,222
15,396
33,971
12,843
21,128
21,627
1,50,158
FY17
9,665
92,387
1,02,052
511
12,456
1,15,018
80,489
9,044
71,444
5,660
389
67,517
11,559
1,843
35,084
19,031
29,992
8,641
21,351
37,525
1,15,018
FY18
9,665
95,384
1,05,048
450
11,515
1,17,013
85,022
13,627
71,395
9,152
1,176
64,415
11,941
2,581
33,619
16,274
29,126
9,774
19,352
35,290
1,17,013
FY19
9,328
95,517
1,04,845
668
11,307
1,16,820
91,155
18,297
72,858
8,827
1,758
68,027
12,100
2,405
35,772
17,750
34,650
13,069
21,581
33,377
1,16,820
FY20
9,328
90,553
99,881
123
10,606
1,10,610
98,443
23,595
74,848
14,267
2,773
53,609
16,969
1,401
20,355
14,884
34,886
7,956
26,930
18,723
1,10,610
FY21
9,183
97,624
1,06,807
461
8,937
1,16,205
1,06,258
29,654
76,605
15,755
3,133
51,614
14,763
1,474
19,982
15,396
30,900
9,772
21,128
20,714
1,16,206
FY22E
9,183
1,06,305
1,15,488
461
8,937
1,24,887
1,12,258
35,575
76,684
29,755
3,133
48,699
15,319
1,838
16,146
15,396
33,383
12,255
21,128
15,316
1,24,887
8 August 2021
4
 Motilal Oswal Financial Services
Nalco
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 (%)
EBITDA Margin (%)
Net Profit Margin (%)
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Inventory (Days)
Payable (Days)
Leverage Ratio (x)
Current Ratio
Cash Flow Statement
Y/E March
Pre-tax profit
Depreciation
(Inc.)/Dec. in Working Cap.
Tax paid
Others
CF from Op. Activity
(Inc.)/Dec. in FA + CWIP
Free Cash Flow to firm
(Pur.)/Sale of Investments
Interest and div.
CF from Inv. Activity
Equity raised/(repaid)
Int. Paid
Debt raised/(repaid)
Dividend (incl. tax)
Other financing activities
CF from Fin. Activity
(Inc.)/Dec. in Cash
Add: opening Balance
Closing Balance
FY17
3.7
6.4
52.8
2.8
110.4
21.5
12.6
1.5
1.6
11.1
3.5
14.3
9.5
7.2
7.9
8.0
0.9
0.7
9
56
42
2.3
FY18
5.1
9.4
54.3
4.7
81.5
15.7
8.5
1.5
1.3
7.2
5.9
17.6
10.4
9.5
12.9
16.3
1.1
0.8
10
46
38
2.2
FY19
9.5
11.8
56.2
4.5
84.9
8.4
6.8
1.4
1.0
3.8
5.6
25.7
15.4
17.2
24.0
34.6
1.3
1.0
8
38
41
2.0
FY20
0.7
3.6
53.5
2.8
441.7
108.0
22.3
1.5
1.5
25.8
3.4
5.8
1.6
1.4
2.0
-0.6
0.9
0.8
6
73
34
1.5
FY21
5.4
10.4
58.2
2.5
35.3
14.8
7.7
1.4
1.4
7.0
3.1
19.9
11.1
9.7
11.7
15.6
0.8
0.8
6
60
40
1.7
FY22E
9.4
12.7
62.9
4.7
49.9
8.5
6.3
1.3
1.1
4.6
5.9
24.9
15.5
15.6
19.3
28.7
1.0
0.9
6
50
40
1.5
FY23E
11.1
14.4
68.5
5.5
49.6
7.2
5.6
1.2
1.2
4.2
6.9
28.0
17.4
16.9
20.0
35.3
1.0
0.8
6
50
40
1.6
(INR m)
FY23E
27,392
6,039
-235
-7,019
70
26,247
-25,000
1,247
0
-25,000
0
-70
15,000
-10,102
4,828
6,075
16,146
22,222
FY17
9,639
4,804
1,217
-2,184
884
14,359
-7,781
6,578
10,178
2,795
5,191
-28,407
-4
511
-8,259
-36,159
-16,608
51,692
35,084
FY18
20,388
4,804
-178
-4,825
-5,524
14,666
-8,374
6,292
1,718
1,522
-5,134
0
-1
-61
-10,934
-10,997
-1,465
35,084
33,619
FY19
27,399
4,761
3,274
-10,209
-447
24,779
-7,680
17,099
1,272
1,089
-5,319
-5,074
0
218
-12,451
-17,308
2,153
33,619
35,772
FY20
2,262
5,298
-9,071
-1,005
-971
-3,486
-8,578
-12,064
2,068
1,353
-5,158
0
-9
-579
-6,185
-6,773
-15,416
35,772
20,355
FY21
12,995
6,058
3,819
-975
93
21,990
-12,188
9,802
-4,835
662
-16,361
-1,701
-33
338
-4,606
-6,002
-374
20,355
19,982
FY22E
23,220
5,921
1,562
-5,906
70
24,867
-20,000
4,867
0
-20,000
0
-70
0
-8,632
-8,702
-3,835
19,982
16,146
8 August 2021
5
 Motilal Oswal Financial Services
Nalco
NOTES
8 August 2021
6
 Motilal Oswal Financial Services
Nalco
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
8 August 2021
7
 Motilal Oswal Financial Services
Nalco
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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.
8 August 2021
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