Sector Update | 18 June 2019
Oil & Gas
Oil & Gas
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Low oil prices, stable INR => further reforms for OMCs
Low oil prices and stable INR are expected to pave the way for the next phase of
reforms for the Oil Marketing Companies (OMCs).
IOCL is trading at 1.2x (~3% discount to FY15-18 PBV of 1.2x), while BPCL/HPCL are
trading at 1.7x/1.3x one-year forward PBV, much below 2.1x/1.6x during FY15-18.
We reiterate Buy on IOCL and BPCL, and stay Neutral on HPCL. IOCL remains our
preferred pick.
Low oil prices could initiate reforms in pricing of LPG/Kerosene
Please refer our earlier reports
Due to the worsening fiscal situation, receivables from the government appears
to have more than doubled YoY in FY19, with IOCL’s receivables rising from
INR90b in FY18-end to INR190b in FY19-end.
With call on OPEC crude being lower than current production and lack of strong
global economic growth, oil prices are likely to range between USD60-70/bbl.
Also, we expect low oil prices and the stable INR to result in the next phase of
reforms for the OMCs — step-wise deregulation in pricing of LPG and Kerosene.
IOCL is our top pick
IOCL
is our top pick among the OMCs with strong tailwinds:
(a) FY20-21 estimated free cash flow generation of INR23.6/share (~15% of the
current market cap),
(b) the polypropylene plant at Paradip is being commissioned,
(c) 5mmtpa Ennore LNG terminal has already been commissioned with
stabilization expected in FY20, and
(d) dividend yield appears attractive at ~5%.
We reiterate Buy on the stock with PBV multiple of 1.4x (15% premium to FY15-
18) and target price of INR200 (earlier: INR198), implying ~27% upside.
BPCL
has tailwinds from:
(a) the stabilization at Kochi refinery, and
(b) possible Final Investment Decision for the prolific offshore Area 1 in
Mozambique.
We raise our target PBV for BPCL from 1.8x to 1.9x, a discount of ~15% to FY15-
18, the discount being for the possible stabilization issues at Kochi. With a target
price of INR479 (earlier: INR452), we reiterate Buy, implying ~24% upside to
current market price.
We raise the PBV for
HPCL
from 1.2x to 1.3x, a discount of ~20% to average
FY15-18 PBV of 1.6x due to:
(a) capex on the Rajasthan refinery and HMEL petrochemical plant that could
result in negative FCFF, and
(b) execution risk with the Vizag expansion.
With a target price of INR338 (earlier: INR309), we maintain
Neutral
on the
stock, implying ~12% upside to the current market price.
Swarnendu Bhushan – Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Sarfraz Bhimani – Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com); +91 22 6129 1566
Investors are advised to refer through important disclosures made at the last page of the Research Report.
6 September 2018
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Oil & Gas
Exhibit 1: Valuation summary of OMCs
CMP
INR
158
386
302
FY21 BV
INR/share
143
252
260
Target
PBV
1.40
1.90
1.30
Target
INR
200
479
338
Upside
%
27%
24%
12%
FY19
1.3
2.0
1.5
PBV (x)
FY20E
1.2
1.7
1.3
ROE (%)
FY21E
FY19
FY20E
FY21E
1.1
15.3
14.3
16.1
1.5
22.6
22.0
23.4
1.2
23.9
24.0
23.0
Source: Bloomberg, Company, MOFSL
IOCL IN
BPCL IN
HPCL IN
Exhibit 2: Attractive dividend yield of OMCs (%)
FY20
5.0
4.8
6.2
Exhibit 3: Cumulative FY20-21 FCFF for OMCs (INR/share)
FY20-21
41.4
FY21 FCFF is
negative
11.5
23.6
IOCL IN
BPCL IN
HPCL IN
Source: MOFSL
IOCL IN
BPCL IN
HPCL IN
Source: MOFSL
A decade full of reforms
Post deregulation of petrol in 2010, various efforts to amend pricing reforms in
the sector took place, followed by deregulation of diesel in 2014.
A similar bigger pricing revolution was aligning daily domestic retail prices with
global benchmark prices on a 15-day moving average.
Post the pricing reforms, OMCs saw a rise of ~50-90% in PBV during FY15-18;
valuations were subdued next year (FY19), led by higher oil prices and INR
depreciation.
With low crude price outlook and stable INR, we expect gradual de-regulation of
LPG and Kerosene prices.
Implied FY20 PBV multiples to current prices imply ~3% discount to FY15-18
average PBV for IOCL and ~17-19% discount for BPCL and HPCL.
Exhibit 4: PBV valuations are attractive
IOCL
BPCL
HPCL
Post-reform,
prior to sharp
rise in oil prices
Pre-reform
2.1
1.1
0.4
FY00-02
1.5
0.8
0.6
FY03-04
1.4
0.8
1.6
1.1
0.9
1.2
1.2
1.7
1.3
1.3
Rise in oil prices,
rupee depr, govt
intervention,
elections
1.8
1.4
FY05-14
FY15-18
FY19
CMP Implied FY20
Source: Bloomberg, MOFSL
18 June 2019
2

Oil & Gas
Exhibit 5: Pricing reforms in the past
UPA-led petroleum
pricing reforms
•2010 - deregulation of Petrol
•Pilot of DBTL and subsequent rollout to 78 more districts, starting mid-
2013
•Introduced limit of nine on access to subsidized LPG cylinders, raised it to
12 in early-2014 in the wake of elections
•DBT mulled for kerosene
NDA-led petroleum
pricing reforms
•2014 - deregulation of Diesel
•2014 - further implementation of DBTL pan-India
•Pilot on DBT for Kerosene
•Periodic increase in prices of subsidized LPG & Kerosene; LPG was
withdrawn after few months
•Daily price revision and differential pricing allowed for auto fuels
Source: MOFSL
Subsidies germane deregulation
Promotion of cleaner and brighter rural lighting through solar grids or rural
electrification program has reduced the need for subsidy on Kerosene.
Initiatives on limiting subsidized LPG cylinder, DBTL and periodic price increases
(later withdrawn) has supported the government’s aim of cleaner LPG fuel
usage.
Subsidy on LPG has declined by ~26% from FY14 due to implementation of DBTL.
Development of CGD infrastructure may further allow increasing of income
threshold for LPG subsidy, capping subsidy amount per year per household or
reducing subsidy per LPG cylinder.
Delayed payment from the government in FY18 resulted in INR170b of
receivables. Due to worsening fiscal situation, receivables from the government
appear to have more than doubled in FY19.
If LPG/Kerosene prices are de-regulated, even gradually, it would decrease the
receivables from the government.
18 June 2019
3

Oil & Gas
Exhibit 6: Gross under-recoveries (INR b) have declined ~70% during FY14-19
Petrol
Diesel
LPG
Kero
Total
1,385
1,033
771
400
144
102
FY06
494
179
107
FY07
191
155
282
176
782
461
174
143
FY09
FY10
195
218
274
300
1,610
294
396
1,437
306
503
763
248
406
FY12
FY13
FY14
FY15
276
115
161
FY16
197
76
121
FY17
282
48
235
FY18
432
60
372
FY19
Decrease in oil prices aided by
deregulation of petrol & diesel and
DBT for LPG reduces under-recoveries
drastically
FY08
FY11
Source: PPAC, MOFSL
Exhibit 7: Receivable from government saw sharp decline post FY14
IOCL
BPCL
HPCL
Total
452
386
85
202
105
21
21
63
FY09
140
30
29
81
FY10
45
47
110
FY11
92
127
87
396
85
106
195
36
59
100
FY12
FY13
FY14
FY15
Receivable saw sharp
decline post FY14, owing to
reforms and low crude
prices
174
37
35
103
FY16
170
37
39
94
FY18
342
75
78
190
FY19E
125
24
24
77
FY17
209
238
205
Source: Company data, MOFSL
18 June 2019
4

Oil & Gas
Valuation snapshot
Exhibit 8: OMCs valuation snapshot - Bloomberg cons. est. v/s MOFSL PT implied
Price Target implied
valuation for the company
implies ~12-27% upside to
current market prices, with
FY19-21 EPS CAGR of ~8%
for IOCL, while ~13% for
BPCL/HPCL, respectively.
IOCL is trading at 8.7x
consol. FY20E EPS of
INR18.2 and 1.2x FY20E
PBV, ~3% discount to FY15-
18 average PBV multiple.
BPCL is trading at 8.4x
consol. FY20E EPS of
INR46.1 and 1.7x FY20E
PBV, ~17% discount to
FY15-18 average PBV
multiple.
HPCL is trading at 5.9x
consol. FY20E EPS of
INR51.4 and 1.3x FY20E
PBV, ~19% discount to
FY15-18 average PBV
multiple.
Source: Bloomberg, MOFSL
Exhibit 9: IOCL – 1-year Forward PBV
2.0
1.5
1.0
0.5
Jun-09
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
1.8
1.3
1.1
0.8
Sep-10
Dec-11
Mar-13
Jun-14
Sep-15
Dec-16
1.2
0.6
Mar-18
Jun-19
Exhibit 10: BPCL — 1-year Forward PBV
3.7
2.9
2.1
1.3
0.5
Jun-09
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.8
2.1
1.6
1.2
0.9
Sep-10
Dec-11
Mar-13
Jun-14
Sep-15
Dec-16
Mar-18
Jun-19
1.7
Exhibit 11: HPCL — 1-year Forward PBV
3.2
2.2
1.2
0.2
Jun-09
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.7
1.7
1.2
0.7
0.4
Sep-10
Dec-11
Mar-13
Jun-14
Sep-15
Dec-16
Mar-18
Jun-19
1.3
Source: Bloomberg, MOFSL
18 June 2019
5

Oil & Gas
Indian Oil Corp. Ltd: Buy – INR200 (27% Upside)
Exhibit 12: Key assumptions
Y End: March 31
Exchange Rate (INR/USD)
Brent Crude (USD/bbl)
Domestic direct sales refined pdts (MMT)
YoY (%)
Reported GRM (USD/bbl)
Singapore GRM (USD/bbl)
Prem/(disc) (USD/bbl)
Refining capacity (mmt)
Refining capacity utilization (%)
Total Refinery throughput (MMT)
YoY (%)
Pipeline throughput (mmt)
YoY (%)
Marketing Margin (INR/ltr)
Blended gross marketing margin incld inventory
Blended gross marketing margin excld inventory
Cons EPS
2013
54.4
110
69
1%
2.3
7.9
(6)
54
101%
54.7
-2%
75.7
3%
4.0
3.9
4.8
2014
60.6
108
68
-1%
4.2
5.6
(1)
54
98%
53.1
-3%
73.3
-3%
4.4
4.3
6.4
2015
61.4
86
68
1%
0.3
6.4
(6)
54
99%
53.6
1%
75.7
3%
4.6
4.9
4.1
2016
65.5
48
73
6%
5.1
7.5
(2)
58
98%
56.7
6%
79.8
5%
3.7
4.0
12.1
2017
67.1
49
74
2%
7.8
5.8
2
69
94%
65.2
15%
82.5
3%
4.2
3.8
22.2
2018
64.5
58
77
4%
8.5
7.3
1
69
100%
69.0
6%
85.7
4%
4.4
4.3
24.6
2019
70.0
70
80
4%
5.4
4.9
1
69
104%
71.8
4%
88.6
3%
5.3
5.2
18.8
2020E
71.8
70
83
4%
5.2
6.0
(1)
69
104%
72.0
0%
88.9
0%
3.9
3.9
18.2
2021E
73.6
70
86
4%
6.2
6.1
0
69
104%
72.0
0%
92.9
4%
3.9
3.9
22.1
Source: Bloomberg, Company, MOFSL
Exhibit 13: Financial Summary
Consolidated - Income Statement
Y/E March
Total Income from Operations
EBITDA
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Margin (%)
(INR Million)
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
46,07,497 48,72,595 44,83,152 34,60,447 35,53,101 42,14,918 52,81,489 65,45,215 72,28,366
1,27,377 1,59,711
93,424 2,34,429 3,40,132 4,16,318 3,52,236 3,48,326 3,95,444
45,042
99,778
70,143 1,78,263 2,73,157 3,35,391 2,45,425 2,49,584 3,01,457
8,770
30,113
21,426
56,584
75,704 1,18,239
86,531
83,255 1,00,545
19.5
30.2
30.5
31.7
27.7
35.3
35.3
33.4
33.4
44,490
70,856
49,120 1,20,225 2,03,854 2,26,264 1,72,739 1,67,206 2,02,488
1.0
1.2
0.8
3.2
5.7
5.4
3.3
2.6
2.8
Source: Bloomberg, MOFSL
Exhibit 14: Refining throughput of IOCL
Refinery throughput (mmt)
55.6 54.7 53.1 53.6 56.7
71.8 72.0 72.0
65.2 69.0
Exhibit 15: GRM trend of IOCL
IOCL GRM (USD/bbl)
8.3
7.9
5.6
6.4
7.5
5.1
5.8
3.6
2.3
4.2
0.3
Reuters Singapore GRM (USD/bbl)
7.8
8.5
5.4
4.9
6.0
5.2
6.2
6.1
7.3
Source: MOFSL
Source: MOFSL
18 June 2019
6

Oil & Gas
Bharat Petroleum Corp. Ltd : Buy – INR479 (24% Upside)
Exhibit 16: Key assumptions
Y End: March 31
Exchange Rate (INR/USD)
Crude cost (USD/bbl)
Domestic Market Sales (MMT)
YoY (%)
Reported GRM (USD/bbl)
Singapore GRM (USD/bbl)
Prem/(disc) (USD/bbl)
Refining capacity (mmt)
YoY (%)
Refining capacity utilization (%)
Refinery throughput (MMT)
YoY (%)
Pipeline throughput (mmt)
Marketing Margin (INR/ltr)
Blended gross marketing margin incld inventory
Blended gross marketing margin excld inventory
Cons EPS
2014
61
108
34
2%
4.3
5.6
(1)
21.5
0%
109%
23.4
1%
11.6
4.3
3.9
19.9
2015
61
86
34
1%
3.6
6.4
(3)
21.5
0%
109%
23.4
0%
11.6
4.4
5.2
24.4
2016
65
48
37
6%
6.6
7.5
(1)
21.5
0%
112%
24.1
3%
11.6
4.0
4.6
41.1
2017
67
49
38
3%
5.3
5.8
(1)
24.5
14%
104%
25.4
5%
11.6
4.2
3.7
48.3
2018
64
57
41
9%
6.9
7.3
(0)
27.5
12%
104%
28.5
12%
11.6
4.0
3.9
49.8
2019
70
70
43
5%
7.5
4.9
3
27.5
0%
113%
31.1
9%
11.6
4.8
4.8
43.4
2020E
72
70
45
4%
5.2
6.0
(1)
27.5
0%
105%
28.9
-7%
11.6
3.8
3.8
46.1
2021E
72
70
47
4%
6.2
6.0
0
27.5
0%
105%
28.9
0%
11.6
3.8
3.8
55.5
Source: Bloomberg, Company, MOFSL
Exhibit 17: Financial Summary
Consolidated - Income Statement
Y/E March
Total Income from Operations
EBITDA
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Margin (%)
FY14
26,44,066
1,00,370
61,657
21,127
34.3
39,107
1.5
FY15
24,25,985
1,04,503
76,905
26,085
33.9
48,066
2.0
FY16
18,78,146
1,29,371
1,17,806
40,427
34.3
80,889
4.3
FY17
20,12,507
1,37,510
1,27,562
41,926
32.9
95,070
4.7
FY18
23,57,698
1,51,814
1,28,846
43,816
34.0
97,919
4.2
FY19
29,82,256
1,58,126
1,19,681
43,775
36.6
85,279
2.9
(INR Million)
FY20E
31,78,310
1,57,777
1,24,356
41,037
33.0
90,734
2.9
FY21E
33,48,403
1,77,849
1,43,830
47,464
33.0
1,09,196
3.3
Source: Bloomberg, MOFSL
Exhibit 18: Refining throughput of BPCL
Refinery Throughput (mmt)
Exhibit 19: GRM trend of BPCL
BPCL GRM (USD/bbl)
7.9
5.6
5.0
2.3
6.4
7.5
6.6
5.2
4.3
3.6
5.8
6.9
5.3
4.9
5.2
Reuters Singapore GRM (US$/bbl)
7.3
7.5
6.0
6.0
6.2
Source: MOFSL
Source: MOFSL
18 June 2019
7

Oil & Gas
Hindustan Petroleum Corp. Ltd: Buy – INR338 (12% Upside)
Exhibit 20: Key assumptions
Y End: March 31
Exchange Rate (INR/USD)
Brent Crude (USD/bbl)
Market Sales (MMT)
YoY (%)
GRM (USD/bbl)
Singapore GRM (USD/bbl)
Prem/(disc) (USD/bbl)
Total Refinery throughput (MMT)
YoY (%)
Refining capacity utilization (%)
Blended marketing margin excld inventory (INR/lit)
Blended marketing margin incld inventory (INR/lit)
Cons EPS
2014
60.6
107.6
31
2
3.4
5.6
(2)
15.5
-2%
105%
3.6
3.8
7.4
2015
61.4
85.5
32
3
2.8
6.4
(4)
16.2
4%
109%
4.4
3.9
9.7
2016
65.5
47.3
34
7
6.7
7.5
(1)
17.2
6%
116%
3.8
3.4
30.7
2017
67.1
48.6
35
3
6.2
5.8
0
17.8
3%
120%
3.5
4.0
54.0
2018
64.5
57.6
37
6
7.4
7.3
0
18.3
3%
124%
3.5
3.6
47.4
2019
70.0
70.1
39
5
5.0
4.9
0
18.4
1%
125%
4.3
4.4
43.9
2020E
71.8
68.9
40
4
5.2
6.0
(0.8)
17.5
-5%
118%
4.2
4.2
51.4
2021E
73.6
67.7
42
4
6.2
6.1
0.1
17.5
0%
118%
4.1
4.1
56.2
Source: Bloomberg, Company, MOFSL
Exhibit 21: Financial Summary
Consolidated - Income Statement
Y/E March
Total Income from Operations
EBITDA
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Margin (%)
FY14
24,58,712
53,142
13,243
2,454
18.5
10,789
0.5
FY15
23,04,792
46,992
22,210
7,418
33.4
14,792
0.6
FY16
17,79,102
82,795
67,351
20,604
30.6
46,747
2.6
FY17
18,74,929
1,08,797
1,11,974
29,616
26.4
82,358
4.4
FY18
21,95,096
1,07,130
1,01,101
28,919
28.6
72,183
3.3
FY19
27,54,734
1,15,671
1,00,392
33,486
33.4
66,906
2.4
FY20E
29,85,876
1,17,241
1,17,554
39,181
33.3
78,373
2.6
(INR Million)
FY21E
31,37,551
1,28,620
1,28,516
42,834
33.3
85,681
2.7
Source: Bloomberg, MOFSL
Exhibit 22: Refining throughput of HPCL
Refinery Throughput (mmt)18.4
18.3
17.8
17.2
16.2
15.8
16.2
15.5
Exhibit 23: GRM trend of HPCL
HPCL GRM (USD/bbl)
17.5
17.5
8.3
7.9
5.6
6.4
7.5
6.2
6.7
2.9
3.4
2.8
5.8
Reuters Singapore GRM (US$/bbl)
7.4
7.3
4.9
5.2
6.2
7.2
6.0
6.1
2.1
Source: MOFSL
Source: MOFSL
18 June 2019
8

Oil & Gas
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 MOSL, 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 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, 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 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
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Oil & Gas
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of
MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.
The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed,
in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose
and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report
constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities
discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,
financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document
should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including
the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be
suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial
risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions
contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as
endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and
alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect
or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment
banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and
independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other
person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of
or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject
MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category
of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors,
employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may
arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any
and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold
MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person accessing this information due to any
errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management
Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of
Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a
group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory
services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee
of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj
Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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