BSE SENSEX
31,646
S&P CNX
9,884
Larsen & Toubro
CMP: INR1,144
TP: INR1,340(+17%)
Deep dive into subsidiary annual reports
Investments into subsidiaries/JVs curtailed
31 August 2017
Update
| Sector:
Capital Goods
Buy
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
LT IN
1,399.4
1223 / 864
0/6/4
1,600.9
25.0
2655
100.0
Financials Snapshot (INR b)
Y/E Mar
2017 2018E 2019E
Sales
1,100 1,213 1,341
EBITDA
110.7 129.2 154.0
Adj PAT *
59.2
65.5
74.5
EPS (INR)*
42.3
46.8
53.2
EPS Gr. (%)
43.0
10.7
13.7
BV/Sh (INR)
358.8 322.9 358.5
RoE (%)
12.5
13.7
15.6
RoCE (%)
8.0
8.9
10.6
P/E (x)*
27.0
24.4
21.5
P/BV (x)
3.6
3.2
3.5
*Consolidated
Shareholding pattern (%)
As On
Jun-17 Mar-17 Jun-16
Promoter
0.0
0.0
0.0
DII
39.0
38.8
38.7
FII
19.3
19.2
18.7
Others
41.8
42.1
42.6
FII Includes depository receipts
Stock Performance (1-year)
Larsen & Toubro
Sensex - Rebased
1,250
1,150
1,050
950
850
We pored over ~4,600 pages of Larsen & Toubro’s (LT) subsidiary annual reports.
Key highlights of our analysis:
Investments in subsidiaries/JVs were contained at INR197b (+3% YoY, 35% of
capital employed).
This is in line with LT’s strategy to limit further investments
in subsidiaries/JVs and make them self-funding. Some major changes were
seen at the subsidiary level in FY17 – i) Hyderabad Metro was taken over by LT
from IDPL for a consideration of INR21b. ii) LT took INR9.5b write-down in its
investment in IDPL, iii) Hydrocarbon had INR2.6b of preference shares being
issued by the parent during the year (see exhibits 15 and 16 for details).
Kattupalli Port demerged from L&T Shipbuilding in FY17.
According to the
company, the sale of the port to Adani Ports should be complete by 2QFY18 –
an advance of INR14.3b was already received in 3QFY17. Ex-ports, the
shipbuilding business reported a loss of INR5.9b – the yard is targeting a few
large naval orders, which are expected to be finalized in FY18, and
subsequently, improve profitability FY19 onward.
Performance of Heavy Steel & Forgings and MHPS TG JV was below par.
FY17
was another weak year for the Heavy Steel and Forgings segment, with
EBITDA/PAT loss of INR254m/INR2.5b, primarily due to low capacity utilization.
Within the MHPS partnership, the boiler JV recorded PAT of INR2.2b, driven by
a 46% rise in sales, but the TG JV reported a loss of INR60m at the PAT level
(despite EBITDA coming in at INR1.95b, with a 22% margin, PBT positive). The
boiler JV received an order for the 1.98GW NLC Ghatampur project, but no
domestic orders were bagged by the TG JV. Export orders worth USD200m
were won by the power JVs in FY17.
Losses at Infrastructure Development (P) narrowed, helped by
termination/restructuring of three road projects.
Two road projects – PNG
Tollway and Chennai TADA Tollway – have given a notice of termination to the
NHAI, while Halol Shamlaji Tollway has seen a strategic debt restructuring.
Lower losses from these projects, coupled with lower interest costs during the
year, helped restrict losses at IDPL to INR2.7b in FY17 v/s INR7.3b in FY16.
Hyderabad Metro is likely to commission two stretches in FY18.
Capex
incurred till date stands at INR125b, of which LT’s equity contribution is
INR21b, debt is INR87b and VGF is INR9.6b. The 72km metro line has been
divided into six stages, of which two – the Miyapur to SR Nagar (12km) and
Nagote to Mattuguda (8km) – are likely to be commissioned in FY18 with
expected ridership of 1.2m/day.
Nabha Power reported a loss in FY17 led by ECL provision.
From
INR2.5b/INR2b in FY16, Nabha Power’s EBITDA/PAT fell to INR80m/-INR261m,
primarily due to ECL provision of INR1.4b for the delay in receipt of receivables.
The company has disputed the non-allowance of coal washing and transport
charges from Punjab State Electricity Board; the matter is currently sub-judice.
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.
Ankur Sharma – Research Analyst
(Ankur.VSharma@MotilalOswal.com); +91 22 6129 1556
Amit Shah – Research Analyst
(Amit.Shah@MotilalOswal.com); +91 22 6129 1543

Larsen & Toubro
L&T Realty sales increased 28% YoY to INR25b, driven by the Seawoods mall
sale and the residential project in Chennai.
The Seawoods retail mall was sold
for INR11b in FY17; however, profitability was muted due to interest de-
capitalization (INR4b) booked relating to the mall sale. FY18 is likely to see
flattish sales in the realty segment as a few large projects (Parel, Powai) await
approvals.
Hydrocarbon segment’s orders and profitability surged in FY17.
Segmental
orders surged 77% YoY to INR185b (primarily on overseas jobs), while margins
jumped to 9.3% (+520bp) on closure of legacy jobs in the Middle East. PAT stood
at INR4.4b v/s INR742m in FY16.
Other key takeaways from LT’s annual report:
Four key thrust areas identified by the company are:
a) Business value
unlocking by divesting non-core businesses, b) improving working capital, c)
digitalization and d) cost and operational efficiencies for profitable growth.
Digitization – a key focus area:
A recurring theme in the annual report has been
LT’s thrust on digitization across business segments. It has been identified as a
strategic initiative, currently being rolled out across the construction business
and thereafter across the company – the aim is to achieve higher efficiencies,
and thus, boost sales/profitability.
NWC contracts leading to strong growth in operating cash in FY17:
Operating
cash flow stood at INR60b in FY17, primarily driven by a reduction in NWC (18%
of sales v/s 21% in FY16). Management’s focus on restricting execution where
payment delays are seen has shown results in the past year.
ECL-related provisioning stood at INR2.2b/15b in standalone/consolidated P/L
in FY17.
As per Ind-AS, an expected credit loss provision has been provided
based on time-weighted realization of debtors. At the consolidated level, ECL
excl. the financing business stood at INR3.4b in FY17.
Reiterate Buy; maintain TP at INR1,340.
We maintain our
Buy
rating with an SOTP-
based price target of INR1, 340/share (E&C business at 25x FY19E EPS). LT remains
our top pick in the sector – we believe it is an attractive play on a recovery in
industrial and infrastructure capex in India. Key risks to our rating: a) unexpected
slowdown in government infrastructure spending and b) a sharp fall in oil prices.
31 August 2017
2

Larsen & Toubro
Exhibit 1: Reconciliation of standalone PAT to consolidated PAT
Description
Standalone PAT
Power (excl. L&T - MHPS subs)
L&T Shipbuilding
L&T Special Steel and Heavy Forgings
Infrastructure subsidiaries
Electrical and Automation
Machinery and Industrial Products
Hydrocarbon
Infotech and Technology Services
Finance subsidiaries
Developmental projects -Nabha Power, Metro
IDPL - Roads and Kudgi Transmission
Property Development
Total of subsidiaries
Share of profit from associates
Total subs + associates
Less Minority interest
Contribution from subsidiaries
Less: Dividend received from subs.
Consolidated PAT
FY14
49,046
310
(3,695)
(3,345)
(1,184)
1,162
1,094
113
6,427
4,961
(2,839)
2,046
5,049
93
5,142
382
5,524
(8,650)
45,680
FY15
46,990
346
(3,649)
(2,798)
(2,139)
822
1,514
(9,393)
10,776
6,165
(1,868)
4,660
2,078
6,514
21
6,535
(1,710)
4,825
(8,507)
44,171
FY16
44,393
599
(7,117)
NA
338
187
1,756
1,030
12,551
7,547
156
NA
3,455
20,502
(9,902)
10,600
(3,118)
7,482
(9,942)
41,387
FY17
45,598
686
(5,875)
NA
3,426
367
1,487
4,201
13,959
10,425
(248)
NA
3,447
31,874
(3,953)
27,921
(4,443)
23,478
(4,055)
59,198
Source: Company, MOSL
Exhibit 2: Reconciliation of standalone debt to consolidated debt
Description
SA debt
Road Projects
Power Development - Nabha Power
Hyderabad Metro
Property Development
Power Equipment JV's
L&T Shipbuilding incl. ports till FY15
L&T Special Steel and Heavy Forgings
Dhamra Port
Hydrocarbons
Sub-total (ex-finance subs)
Finance subs(linked above)
Total debt on the consolidated balance sheet
FY14
114,589
116,990
58,421
25,717
34,128
19,546
33,648
14,741
14,955
12,030
442,995
358,534
801,529
FY15
129,365
131,613
75,152
40,693
24,724
15,791
39,341
17,589
NA
11,636
484,809
420,905
905,714
FY16
139,245
NA
80,620
63,265
23,548
NA
26,138
NA
NA
7,788
365,195
516,160
881,355
FY17
105,806
NA
76,745
87,312
8,128
NA
28,750
NA
NA
5,927
341,653
598,110
939,763
Source: Company, MOSL
31 August 2017
3

Larsen & Toubro
Power BTG subsidiaries
Boiler JV profitable, but TG JV in losses (PBT breakeven in FY17)
FY17 has been a weak year in terms of industry BTG finalization (4.6GW).
Consequently, the LT-MHPS Boiler JV won orders for only one project (NLC
Ghatampur; 1.98GW) during the year. Even worse, the TG JV did not win any
large domestic order in FY17.
USD200m of orders for pressure parts were won by the JVs in the overseas
markets in FY17.
Exhibit 3: L&T – MHPS Turbine P/L
Description
Revenues
YoY Growth (%)
Gross Profit
Margin(%)
Other operating expenditure
% of sales
EBITDA
EBITDA Margins %
Interest
Depreciation
PBT
Tax
PAT
YoY Growth (%)
Margin (%)
FY14a
8,026
-19%
2,485
31%
(1,095)
14%
1,390
17.3%
(1,317)
(792)
(719)
(137)
(855)
-4%
-10.7%
FY15a
6,148
-23%
2,317
38%
(1,045)
17%
1,272
20.7%
(1,258)
(1,174)
(1,161)
(163)
(1,324)
55%
-21.5%
FY16a
7,083
15%
2,598
37%
(1,477)
21%
1,121
15.8%
(1,059)
(1,048)
(984)
3
(981)
-26%
-13.8%
FY17a
8,818
24%
3,383
38%
(1,433)
16%
1,950
22.1%
(1,097)
(772)
195
(254)
(59)
-94%
-0.7%
Source: L&T, MOSL
Exhibit 4: L&T – MHPS Boiler JV P/L
Description
Revenues
YoY Growth(%)
Gross Profit
Margin (%)
Other operating expenditure
% of sales
EBITDA
Margins %
Interest
Depreciation
PBT
Tax
PAT
YoY Growth (%)
Margin(%)
FY14a
12,549
-47%
3,456
28%
(934)
7%
2,521
20.1%
(641)
(330)
1,550
(549)
1,002
-29%
8.0%
FY15a
12,286
-2%
4,599
37%
(1,741)
14%
2,858
23.3%
(608)
(437)
1,814
(591)
1,223
22%
10.0%
FY16a
17,068
39%
5,687
33%
(2,868)
17%
2,819
16.5%
(459)
(532)
2,736
(746)
1,990
63%
11.7%
FY17a
24,838
46%
7,517
30%
(4,108)
17%
3,409
13.7%
(287)
(558)
3,321
(1,109)
2,213
11%
8.9%
Source: L&T, MOSL
The outlook for LT-MHPS JVs remains weak, as we expect annual orders of ~5-
7GW v/s industry capacity of ~18-20GW. This would continue exerting pressure
on pricing, with the industry operating at sub-optimal capacity levels.
31 August 2017
4

Larsen & Toubro
Kattupalli port demerged from L&T Shipbuilding
Naval orders targeted to be won in FY18 by the Kattupalli yard
Effective March 2017, the Kattupalli port has been demerged from L&T
Shipbuilding, which will be eventually sold to Adani Ports (sale expected to
conclude by 2QFY18 – advance of INR14.3b is already received in 3QFY17).
Assets and liabilities of the port operations have been demerged, with a
consideration of INR19.6b to be paid to L&T Shipbuilding. INR986m has been
booked for the period April-November 2016 as port operator fees from Adani
Ports. Debt on the books has been repaid from the advance received from Adani
Ports, which has led to a sharp fall in interest costs in FY17.
Ex-ports, the shipbuilding business reported a loss of INR5.9b, primarily because
of severe under-utilization of the yard due to the lack of defense/naval orders –
the yard is targeting a few large naval orders, which are expected to be finalized
in FY18, and thus, improve profitability FY19 onward.
Exhibit 5: L&T Shipbuilding P/L (INR m)
Description
Revenues
RM & Manufacturing costs (incl. MCO)
Gross Profit
Gross margin (%)
Staff costs
SG&A Expenses
EBITDA
Margins (%)
Other income
Interest expense
Depreciation
PBT
Tax expense
Recurring PAT
Exceptional/Discontinued items
Reported PAT
FY14a
5,326
(6,135)
(809)
-15%
(651)
(458)
(1,918)
-36%
129
-2,774
-1,791
(6,484)
(9)
(6,475)
(6,475)
FY15a
5,928
(6,135)
(207)
-3%
(695)
(1,298)
(2,201)
-37%
34
-3,020
-1,514
(6,735)
0
(6,735)
(6,735)
FY16a
4,595
(5,505)
(910)
-20%
(706)
(868)
(2,483)
-54%
17
-1,887
-924
(5,278)
0
(5,278)
(1,839)
(7,117)
FY17a
6,210
(7,688)
(1,478)
-24%
(688)
(380)
(2,546)
-41%
37
-2,429
-952
(5,889)
13.4
(5,875)
2,392
(3,484)
Source: Company, MOSL
Exhibit 6: Katupalli port P/L
Description
Revenues
YoY growth (%)
Employee costs
SG&A Costs
EBITDA
Margins (%)
Other income
Depreciation
EBIT
Interest expense
PBT
Tax expense
PAT
FY16
885
(106)
(266)
512
58%
0.2
(608)
(96)
(1,744)
(1,839)
0
(1,839)
FY17
986
11%
(24)
(31)
931
94%
0
(594)
337
(696)
(359)
386
27
Source: Company, MOSL
31 August 2017
5

Larsen & Toubro
IDPL continues to incur losses, albeit at a lower level
Loss reduction post termination of concession and takeover under SDR
LT has an operational portfolio of 15 road assets, while two assets are under
construction. Of the 15 operational assets, PNG Tollway and Chennai Tada
Tollway have been given a termination notice by IDPL, while the third asset –
Halol Shamlaji – has undergone strategic debt restructuring.
In the aftermath of demonetization last year, toll collections were suspended
from 8 November to 2 December (24 days) to minimize difficulties caused by
shortage of currency notes. The NHAI has agreed to compensate the loss of
interest and O&M expenses for the said period to the concessionaire. Also, the
24 days of revenue loss would mean an increase in the concession period by a
similar number of days.
Toll collection in a few projects continues to remain weak, partly due to
demonetization and also the decision of the Gujarat government to exempt
small vehicles and GSRTC buses from toll.
The following three road assets have been terminated/restructured, leading to a
substantial reduction in losses in FY17. These are:
PNG Tollway:
Toll collection started from October 2012, but there were
protests to exempt vehicles registered in Nashik and Malegaon from the
toll, leading to violence at the collection points. This led to a significant loss
in toll revenues. Despite the High Court directing the state government to
ensure security at the toll plazas, violations continued and there was no
assurance from the government to resolve the issue. Consequently, the
concessionaire terminated the concession in February 2016 and asked the
NHAI to take over. The tolling operations were handed back to the NHAI on
April 2016. A payment of INR4.2b was made by the NHAI, which has been
disputed and the same is under arbitration. There has been a substantial
reduction in loss to INR114m in FY17 from INR1.43b in FY16, primarily due
to the fall in interest costs, as INR1.3b was charged to the NHAI in FY17 post
termination in March 2016. An amount of INR2.3b has been written-off on
the toll collection rights post the termination of the concession in FY17.
L&T Chennai Tada Tollway:
Termination notice was given to the NHAI, as
even after seven years of the appointed date, only 70% of the land was
handed over to the concessionaire, which led to significant cost escalations.
The NHAI agreed to take over the projects in May 2016, and a new agent
will be appointed for toll collection.
Halol Shamlaji Tollway:
With the development of a competing road
resulting in lower collections, the company issued a termination notice to
GSRDC in April 2016. The Joint Lenders forum decided to implement the
strategic debt restructuring scheme to resolve the financial/operating
stress, and accordingly, 405.8m shares were issued to the bank consortium
while mezzanine debt (INR1,305m) and optionally convertible preference
shares (INR1,295m) from L&T IDPL also converted into equity. Post
conversion, the lender had a 51% stake, while promoter holding fell to 49%.
Our analysis of the potential dilution (as estimate by the company) on
conversion of the preference shares issued to Canadian Pension Plan
31 August 2017
6

Larsen & Toubro
Investment Board reveals potential dilution of ~48% in L&T’s stake on
conversion into equity shares.
Exhibit 7: IDPL road portfolio
Major SPVs
Roads and Bridges:
L&T Panipat Elevated Corridor Limited
L&T Krishnagiri Thopur Toll Road Limited
L&T Western Andhra Tollway
L&T Transportation Infrastructure
L&T Interstate Road Corridor
L&T Vadodara Bharuch Tollway Limited
L&T Rajkot Vadinar Tollway Limited
PNG Tollway Limited(MH)
L&T Ahmedabad-Maliya Tollway Limited
L&T Halol - Shamlaji Tollway Limited
L&T Devihalli Hassan Tollway Limited
L&T Chennai Tada Tollway
Krishnagiri Walajahpet Tollway Limited
L&T Samakhiali Gandhidham Tollway
L&T BPP (Beawar-Pindwarara) Tollway
L&T Deccan Tollway (Sangareddy)
L&T Sambalpur – Rourkela
Total
YoY Growth(%)
Net toll collections
FY15 FY16 FY17
580
1,291
561
248
864
2,775
858
786
1,193
688
298
569
697
89
0
0
0
23%
591
1,282
633
258
478
2,821
918
938
1,847
748
377
1,243
1,107
2,424
0
7.6
37%
585
1,329
667
251
480
2,659
935
0
1,770
740
481
1,335
1,102
3,075
0
0
-3%
EBITDA
FY15 FY16
437
772
324
150
547
2,352
517
505
797
304
133
0
444
77
0
0
0
451
1,052
476
149
430
2,418
637
598
1,152
446
238
0
926
909
2,029
0
-3.7
FY17
427
1,056
496
122
417
2,348
599
(23)
1,085
370
292
(2)
950
878
2,566
0
0
EBITDA margins (%)
FY15 FY16 FY17
75%
60%
58%
60%
63%
85%
60%
64%
67%
44%
45%
67%
64%
87%
0%
-
-
64%
76%
82%
75%
58%
90%
86%
69%
64%
62%
60%
63%
75%
82%
84%
-
-49%
76%
73%
79%
74%
49%
87%
88%
PAT
FY15 FY16
(231)
(106)
(124)
112
(43)
1
(291)
(23)
7
188
97
173
FY17
(378)
204
98
271
87
177
64%
1 (586) (580)
0% (1,541) (1,426) (115)
61% (949) (561) (515)
50% (1,157) (985) (1,895)
61% (148) (115)
(35)
(629)
0
(49)
71% (441)
6 (253)
80%
(37) (1,012) (1,070)
83%
1 (2,230) (2,911)
-
(0)
-
0
0%
-
(11)
(7)
76% (4,890) (6,399) (5,975)
121%
31%
-7%
Source: L&T, MOSL
11,293 15,419 15,030
7,229 11,753 11,396
Lower losses from the terminated/restructured road projects, coupled with
lower interest costs during the year, helped restrict losses at IDPL to INR2.7b in
FY17 v/s INR7.3b in FY16.
Exhibit 8: IDPL P/L (Consolidated)
Description
Sales
YoY (%)
EBITDA
Margin (%)
PAT
FY15a
30,880
18,369
59%
5,076
FY16a
24,565
-20%
11,154
45%
(7,323)
FY17
21,656
-12%
12,231
56%
(2,590)
Source: L&T, MOSL
31 August 2017
7

Larsen & Toubro
Hyderabad Metro – INR125b of capex incurred
Approvals received for two stretches – full commissioning by Nov. 2018
L&T IDPL transferred its stake in the Hyderabad Metro to LT in FY17 at cost for a
consideration of INR21b. With this transfer, L&T Metro will no longer be part of
IDPL, and will be a 100% subsidiary of LT.
Hyderabad Metro is likely to commission two segments in FY18. Capex incurred
till date amounts to INR125b, of which LT’s equity contribution stands at
INR21b, debt at INR87b and VGF at INR9.6b. The 72km metro line has been
divided into six stages, of which two – Miyapur to SR Nagar (12kms) and Nagote
to Mattuguda (8kms) – are likely to be commissioned in FY18 with expected
ridership of 1.2m/day.
Nabha Power – loss in FY17
ECL provisioning of INR1.4b hurt profitability
From INR2.5b/INR2b in FY16, Nabha Power’s EBITDA/PAT fell to INR80m/-
INR261m in FY17, primarily on the back of ECL provision of INR1.4b for the delay
in receipt of receivables. The company has disputed the non-allowance of coal
washing and transport charges; the matter is currently subjudice. Total disputed
receivables stood at INR11b as of March 2017.
Exhibit 9: Nabha Power P/L
Description
Sales
EBITDA
Margin (%)
PAT
FY14
28,338
100
0.4%
(230)
FY15
25,401
2,411
9.5%
1,217
FY16
32,983
2,506
7.6%
1,995
FY17
35,176
80
0.2%
(261)
Source: L&T, MOSL
According to media reports, the company is looking to sell Nabha Power. The
sale is likely to happen only in FY19 once the pending disputes with Punjab State
Power Corporation Limited are resolved.
31 August 2017
8

Larsen & Toubro
Hydrocarbons witnesses’ strong margins recovery
Legacy jobs in Middle East closed out; strong orders in FY17 (+77% YoY)
Hydrocarbons segment witnessed a strong recovery in orders, execution and
margins in FY18. Close out of legacy jobs in the Middle East, alongside the
increased focus on profitable growth, contributed to a strong revival in margins.
Exhibit 10: L&T Hydrocarbon Engineering Limited P/L
Description
Order book
Orders
YoY Growth (%)
Net Revenues
YoY Growth (%)
EBITDA
Margin (%)
Depreciation
EBIT
Interest expense
PBT
Tax
Tax rate (%)
PAT
Margin (%)
FY14
90,435
85,432
50.9%
87,159
-9%
3,050
3.5%
(1,001)
2,049
(420)
1,638
(581)
35.5%
1,057
1.2%
FY15
136,840
107,160
25.4%
57,234
-34%
(7,793)
-13.6%
(1,054)
(8,848)
(441)
(10,024)
(3,482)
-34.7%
(6,541)
-11.4%
FY16
156,220
104,470
-15.0%
71,112
24%
2,881
4.1%
(1,014)
1,867
(780)
1,087
(345)
31.7%
742
1.0%
FY17
261,341
185,250
77.3%
88,412
24%
8,256
9.3%
(943)
7,313
(280)
7,033
(2,670)
38.0%
4,363
4.9%
Source: L&T, Company
Orders at INR185b (+77% YoY) were primarily driven by overseas jobs. Large
overseas orders include a) Saudi Aramco (INR65b) and b) petrochemical plant in
the Middle East (INR40b).
Sales increased 24% YoY to INR88.4b in FY17, but more importantly, EBITDA
margin expanded 520bp YoY to 9.3%. Execution has remained on track, despite
the fall in oil prices and a resultant deferral of execution seen across the Middle
East. We note that, in FY15, this segment recorded an EBITDA loss of INR7.8b
due to cost overruns and write-downs related to Middle-East jobs – with legacy
jobs getting over, the segmental margins have reversed back to normalized
levels. PAT increased to INR4.4b in FY17 from INR742m in the previous year.
31 August 2017
9

Larsen & Toubro
L&T Realty – sale of Seawoods mall drives growth
Approvals waited for next leg of project launches
LT’s realty segment recorded sales of INR25b (+28% YoY) in FY17, primarily
driven by the sale of the Seawoods retail mall for INR11b. However, profitability
was muted due to interest de-capitalization (INR4b) booked relating to the mall
sales.
FY16
28,400
19,320
41,120
8,360
97,200
FY17
40,440
24,720
36,440
7,020
108,620
Source:
Exhibit 11: Others segment breakdown of sales (INRm)
Description
MMH
Realty
MIP (including valves)
Shipbuilding
Total
FY18 is likely to see flattish sales in the realty segment, as most projects (Parel,
Powai, and Chennai) await approvals, while the Bangalore project is progressing
well.
Infrastructure subs in M. East witness mixed trends
Low oil prices dampen order inflows in FY17; T&D segment strong
LT’s key subsidiaries in the infrastructure segment are L&T Oman and L&T Saudi
Arabia. While L&T Oman has presence across the infrastructure segment
(transport infrastructure, water, urban infrastructure and T&D), L&T Saudi
Arabia is primarily focused on the T&D market in Saudi Arabia.
The steep fall in oil prices over the past two years had a severe impact on orders
for L&T Oman (-88% YoY), as governments across the Middle East cut down on
spending. However, sales grew 15% YoY to INR35.2b and EBITDA rose to
INR387m (1.1% margins).
FY13
FY14
FY15
FY16
41,586
85,608
30,572
61%
147
0.5%
0
-110
271
223
FY17
4,648
55,064
35,192
15%
387
1.1%
0
-246
145
145
Exhibit 12: L&T Oman P/L (65% stake by L&T)
Description
Orders
Order book
Revenues
YoY Growth (%)
EBITDA
Margin (%)
Depreciation
Int
PBT
PAT
19,952
-3%
555
3%
319
-72
172
148
22,575
13%
-283
-1%
425
-104
-591
(794)
18,985
-16%
-1513
-8%
446
-104
-1574
(1,574)
Source: L&T, MOSL
While there have been cuts in the Saudi Arabia budget spending post the fall in
oil prices, spending on social infrastructure continues to increase. Sales for L&T
Saudi Arabia LLC grew by a robust 48% YoY to INR25b, while margins jumped to
15%. PAT increased to INR3.2b from INR94m in FY16.
10
31 August 2017

Larsen & Toubro
Exhibit 13: L&T Saudi Arabia LLC
Description
Revenues
YoY Growth (%)
EBITDA
Margin (%)
Depreciation
Int
PBT
PAT
FY13
6,479
215%
(93)
-1%
39
32
-163
-192
FY14
2,289
-65%
(267)
-12%
45
88
(397)
(397)
FY15
4,161
82%
(408)
-10%
45
88
(568)
(568)
FY16
16,951
307%
248
1%
0
156
123
94
FY17
25,103
48%
3,711
15%
0
-104
3,641
3,232
Source: L&T, MOSL
Pace of investment in subs/associates decelerate
Hyderabad Metro to drive incremental funding
LT’s investment in subsidiaries/associates was restricted to INR197b in FY17
(+3% YoY), in line with the company’s plan to make subsidiaries self-funded.
However, it is still at 35% of overall capital employed in the standalone business,
but lower than 38% in FY16.
With incremental investments being restricted and the company focusing on
divestment of non-core assets, we expect this amount to reduce over the next
few years. Incremental investments would be required only for Hyderabad
Metro and to fund losses in L&T Shipbuilding.
Exhibit 14: Investments incl. L&A to subsidiaries from LT standalone balance sheet
Invst in subs
36.9%
35.9%
% of Capital Employed
36.9%
41.8%
35.9%
37.5%
34.7%
28.3%
16.8%
20.0%
30.7%
13
FY07
26
FY08
53
FY09
76
FY10
105
FY11
126
FY12
140
FY13
189
FY14
179
FY15
210
FY16
197
FY17
Source: L&T, MOSL
Key highlights of investments made:
LT took write-down of INR9.5b in FY17 for its investment in IDPL
Sold stake in General Insurance; investment thus has been completely taken
out of the books
Investment in Hyderabad Metro as equity stood at INR21b till March 2017
of the total capex of INR125b with debt of INR87b in the Metro and balance
being VGF funding (INR9.6b)
Investment in Nabha Power of INR31b as of March 2017
Hydrocarbon had INR2.6b of preference shares being issued by the parent
during the year
31 August 2017
11

Larsen & Toubro
Exhibit 15: Investments in subsidiaries
Description
Fully paid equity shares of subs
Fully paid preference shares
Investment in Subsidiaries
Investments in JV’s
Investment in Associates
Other fully paid equity shares
Total Long Term investments
FY07
12,101
425
13,062
279
1,117
212
14,671
FY08
21,545
94
22,378
759
1,078
218
24,432
FY09
28,533
94
29,521
1,278
1,048
1,982
33,829
FY10
51,127
-
51,127
1,088
784
4,403
57,401
FY11
70,893
-
70,893
549
664
1,903
74,008
FY12
FY13
FY14
FY15
FY16
FY17
86,872 105,227 151,684 133,968 150,050 163,810
-
-
-
457
4,420
6,051
86,872 102,212 148,226 134,425 154,470 169,861
1,409
1,826
2,868 37,931 36,722 27,302
664
919
319
301
442
442
1,903
270
271
559
559
560
90,847 105,227 151,684 174,461 191,879 197,768
Source: L&T, Company
Exhibit 16: Subsidiary/associate investments by LT
Description
L&T Valves (Audco)
L&T Hydrocarbon Engineering
L&T Technology
L&T IDPL
L&T International FZE
L&T Finance Holdings
L&T Power Development Ltd/
Nabha Power
L&T Heavy Steel and Forging
L&T General Insurance Company
Ltd
L&T Power
EWAC Alloys
L&T Infotech
L&T MHI Turbine Generators
L&T MHI Boilers
L&T Seawoods
L&T Sapura Shipping
L&T Construction Equipment
(Komatsu)
L&T Realty
L&T Valdel Engg
L&T Finance
L&T Infra Finance
L&T Shipbuilding
L&T Aviation Services
L&T Capital
L&T Howden Private Ltd
L&T Infocity
L&T Kobelco Machinery
FY07
FY08
FY09
FY10
FY11
FY12
FY13
2,015
FY14
2,015
15,000
5,025
26,965
11,474
16,525
27,293
4,193
4,950
-
1,502
1,343
1,941
1,194
15,060
953
843
472
239
-
-
9,087
456
220
150
160
255
FY15
2,015
15,000
10,500
26,965
11,474
15,751
27,293
4,193
6,200
-
1,502
1,343
3,624
1,194
30,355
953
843
472
239
-
-
24,365
456
220
150
160
255
FY16
2,015
17,600
10,500
26,965
-
14,682
31,127
4,193
5,700
-
1,502
1,343
3,624
1,194
31,678
-
843
6,955
-
-
-
23,093
456
1
150
-
255
FY17
2,015
29,300
10,500
17,465
-
4,682
31,127
4,193
-
1
1,502
1,197
3,624
1,194
31,678
-
843
6,955
-
-
-
23,607
456
5
150
-
255
3,834
1,804
-
-
-
3,834
5,168
-
290
-
3,834
10,498
21
860
-
6,284
11,474
16,286
9,200
1,110
290
1,535
-
1,343
-
-
0
1
-
472
239
-
-
13,568
11,474
17,786
13,300
2,220
2,000
1,535
1,502
1,343
1,276
1,123
0
951
-
472
239
-
-
26,965
11,474
17,786
13,620
3,330
3,250
1,535
1,502
1,343
1,276
1,123
0
953
-
472
239
-
-
240
220
150
160
255
26,965
11,474
17,786
17,990
3,996
4,150
-
1,502
1,343
1,737
1,194
953
-
472
239
-
-
8,187
456
220
150
160
255
150
-
-
-
-
-
-
2,410
2,430
150
52
52
-
-
472
252
4,910
5,000
150
256
256
1
-
472
252
4,910
5,000
Source: L&T, Company
31 August 2017
12

Larsen & Toubro
Maintaining Buy
LT enjoys several levers across business/geographical segments, and thus, has
emerged as the E&C partner of choice in India. This provides it with a robust
foundation to capitalize on the next leg of the investment cycle.
Management’s intent is to improve consolidated RoE to 18% (12% in FY16) by FY21.
Capping investments in concession business/asset monetization are important
components of this strategy.
Manufacturing businesses (like shipyard, power BTG, and forgings) also offer
interesting growth avenues over the longer term. Many of these businesses are
difficult to replicate, bolstering LT’s position as a dominant player.
We maintain our Buy rating with an SOTP-based price target of INR1, 340.
Exhibit 17: SOTP valuation
Description
Construction Business
L&T Standalone
L&T Hydrocarbons
Service Segments
L&T Infotech (84.6% stake)
L&T Technology Services(90% stake)
Finance Services (67% stake)
Sapura Shipping
L&T Realty
Asset Ownership / Project Developer
Infrastructure Development Projects
Power Development Projects
Manufacturing Ventures
Power Equipment
Shipbuilding / Container Port
Special Steel and Heavy Forgings
Less: Holding Company Discount of 20%
Total
Method
FY19E PER (x)
FY19E PER (x)
FY19E PER (x)
FY19E PER (x)
FY19E PBV (x)
FY19E PBV (x)
FY19E PER (x)
FY19E PBV (x)
FY19E PBV (x)
FY19E PER (x)
FY19E PBV (x)
FY19E PBV (x)
Valuation Value
multiple (INR b)
25
25
12
12
2
2
15
1
1
15
1
1
1,337
131
131
86
101
0
42
24
31
51
26
4
Value
Rationale
(INR/sh)
955
93
93
62
72
-
30
17
22
36
19
3
-71
1,340
Source: MOSL
Valued at last ten-year average P/E multiple
At par to mid-tier IT companies; excl. stake sold via OFS
At par to mid-tier IT companies excl. stake sold via OFS
At 0.5x Book Value to capture the macro volatility and
losses
At Book Value, given Case 2 bid
Expect industry project awards to sustain at 5-7GW pa
Increased possibility of Defense (Naval) orders
Possibility of Nuclear project awards to commence in
FY18
31 August 2017
13

Larsen & Toubro
Financials and Valuations
Income Statement
Y/E March
Net Revenues
Growth Rate (%)
Manufacturing Expenses
Staff Cost
S G &A Expenses
EBITDA
Change (%)
Adj EBIDTA
EBITDA Margin (%)
Depreciation
EBIT
Net Interest
Other Income
Profit before Tax
Tax
Effective Tax Rate (%)
Reported Profit
Less:Addl tax on dividend by Subs
Less: Minority Interest
Add: Profits of Associates
EO Adjustments
Adjusted Profit
Growth (%)
Cons. Profit (Reported)
2015
920,046
8.1
672,937
79,222
54,531
113,356
5.4
113,356
12.3
26,225
87,131
28,507
10,072
68,696
22,836
33.2
49,337
0
1,710
21
3,477
44,171
-3.3
47,648
2016
1,019,753
10.8
724,089
133,308
57,728
104,628
-7.7
104,628
10.3
17,867
86,761
16,551
9,044
79,254
24,848
31.4
55,348
0
3,118
-9,902
942
41,387
-6.3
42,329
2017
1,100,110
7.9
780,393
138,531
70,440
110,747
5.8
110,747
10.1
23,699
87,048
13,398
14,010
87,659
20,066
22.9
68,808
0
4,443
-3,953
1,214
59,198
43.0
60,412
2018E
1,213,476
10.3
872,669
146,498
65,068
129,241
16.7
129,241
10.7
19,915
109,326
13,868
14,485
109,943
35,182
32.0
74,761
0
5,722
-3,528
0
65,512
10.7
65,512
2019E
1,341,070
10.5
956,876
161,902
68,322
153,970
19.1
153,970
11.5
22,578
131,392
27,839
15,359
118,912
33,295
28.0
85,617
0
6,113
-4,997
0
74,507
13.7
74,507
(INR Million)
2020E
1,468,815
9.5
1,049,780
177,324
71,738
169,973
10.4
169,973
11.6
22,153
147,820
28,458
19,562
138,925
38,899
28.0
100,026
0
6,678
-2,441
0
90,907
22.0
90,907
Balance Sheet
Y/E March
Equity Capital
Reserves and Surplus
Net Worth
Debt
Deferred Tax Liability
Minority Interest
Capital Employed
Gross Fixed Assets
Less : Depreciation
Add : Capital WIP
Net Fixed Assets
Investments
Inventory
Sundry Debtors
Cash & Bank
Loans & Advances
Other Current Assets
Current Assets
Current Liabilities
Net Current Assets
Capital Deployed
E: MOSL Estimates
2015E
1,859
410,222
412,081
767,297
-3,504
19,706
1,195,580
168,322
6,555
103,416
265,184
113,089
59,812
222,544
44,126
13,491
416,488
1,313,997
496,690
817,307
1,195,579
2016
1,863
439,941
441,804
881,352
-7,364
28,928
1,344,719
167,706
23,518
151,651
295,839
110,791
48,542
260,250
53,899
16,889
481,865
1,527,390
589,299
938,092
1,344,722
2017E
1,866
500,299
502,165
939,761
-11,252
35,636
1,466,310
171,779
38,375
167,374
300,778
197,530
41,397
279,696
55,725
19,547
488,977
1,605,954
637,950
968,004
1,466,312
2018E
1,866
449,968
451,834
1,008,196
-11,252
41,358
1,490,135
181,779
58,290
167,374
290,864
197,530
45,663
308,519
57,511
21,561
539,366
1,705,433
703,691
1,001,742
1,490,136
2019E
1,866
499,820
501,686
1,022,613
-11,252
47,471
1,560,517
191,779
80,868
167,374
278,286
197,530
50,464
340,958
105,796
23,828
596,079
1,862,384
777,682
1,084,702
1,560,518
(INR Million)
2020E
1,866
561,458
563,324
1,037,279
-11,252
54,149
1,643,500
201,779
103,021
167,374
266,132
197,530
55,271
373,437
165,981
26,098
652,859
2,031,599
851,761
1,179,837
1,643,500
31 August 2017
14

Larsen & Toubro
Financials and Valuations
Ratios
Y/E March
Basic (INR)
Standalone EPS Adj
Growth (%)
Consolidated EPS Adj
Growth (%)
Con. EPS (Fully Diluted)
Growth (%)
Cash EPS
Book Value
Dividend Per Share
Div. Payout (Incl. Div Tax ) %
Valuation (x)
P/E (Standalone)
P/E (Consolidated)
P/E (Consolidated) (Fully Diluted)
Price / CEPS
EV/EBITDA
EV/ Sales
Price / Book Value
Dividend Yield
Return Ratio (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Inventory (Days)
Asset Turnover (x)
Leverage Ratio
Current Ratio (x)
D/E (x)
2015
33.6
-4.2
31.6
-3.3
31.6
-3.3
50.3
294.5
8.7
27.5
34.1
36.2
36.2
22.7
20.5
2.8
4.2
0.8
11.2
7.7
88.3
23.7
0.8
2.6
0.8
2016
31.7
-5.5
29.6
-6.3
29.6
-6.3
42.3
315.7
12.5
42.3
36.1
38.7
38.7
27.0
23.2
2.5
3.9
1.1
9.7
7.4
93.2
17.4
0.8
2.6
0.8
2017E
32.6
2.7
42.3
43.0
42.3
43.0
59.2
358.8
14.0
33.2
35.1
27.0
27.0
19.3
22.4
2.4
3.6
1.2
12.5
8.0
92.8
13.7
0.8
2.5
0.7
2018E
39.7
21.7
46.8
10.7
46.8
10.7
61.0
322.9
14.3
30.5
28.8
24.4
24.4
18.7
19.7
2.3
3.2
1.2
13.7
8.9
92.8
13.7
0.8
2.4
0.9
2019E
42.9
8.3
53.2
13.7
53.2
13.7
69.4
358.5
15.5
29.0
28.8
21.5
21.5
16.5
16.4
2.1
3.5
1.4
15.6
10.6
92.8
13.7
0.9
2.4
0.8
2020E
51
18.7
65.0
22.0
65.0
22.0
80.8
402.5
18.3
28.2
26.6
17.6
17.6
14.2
14.5
1.9
3.2
1.6
17.1
11.2
92.8
13.7
0.9
2.4
0.7
Cash Flow Statement
Y/E March
PBT before EO Items
Add : Depreciation
Change in diff tax liability
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Advances to subs
CF from Investments
(Inc)/Dec in Net Worth
(Inc)/Dec in Debt
Change in Minority Interest
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates
2015
47,648
26,225
-6,879
-147,185
-80,191
174,351
94,161
-31,999
142,352
1,419
-34,233
-12,086
-14,103
-59,002
3,160
40,966
44,126
2016
42,329
17,867
-3,860
-111,011
-54,675
-48,523
-103,198
2,298
-46,225
7,731
114,058
9,222
-20,337
110,674
9,774
44,126
53,900
2017E
60,412
23,699
-3,888
-28,086
52,138
-28,638
23,499
-86,740
-115,378
22,768
58,408
6,708
-22,818
65,065
1,825
53,900
55,725
2018E
65,512
19,915
0
-31,952
53,474
-10,000
43,474
0
-10,000
-93,068
68,433
5,722
-22,775
-41,688
1,786
55,725
57,511
2019E
74,507
22,578
0
-34,675
62,410
-10,000
52,410
0
-10,000
0
14,417
6,113
-24,655
-4,125
48,285
57,511
105,796
(INR Million)
2020E
90,907
22,153
0
-34,950
78,110
-10,000
68,110
0
-10,000
0
14,666
6,678
-29,269
-7,925
60,185
105,796
165,981
31 August 2017
15

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 Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, 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. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
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), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL 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 MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the
research report.
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the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
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c)
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d)
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MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
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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 MOSL. The report is based on the facts, figures and information that are considered
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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
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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.
Larsen & Toubro
NOTES
Disclosure of Interest Statement
Analyst ownership of the stock
Larsen & Toubro
No
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
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subject company for which Research Team have expressed their views.
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For Hong Kong:
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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
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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 Securities Limited (MOSL) 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 MOSL 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 MOSL, 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
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interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL 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
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
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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. MOSL, 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 MOSL. 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
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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
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employees responsible for any such misuse and further agrees to hold MOSL 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.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
31 August 2017
16