Bank of Baroda
BSE SENSEX
39,816
S&P CNX
11,910
2 July 2019
Update | Sector: Financials
CMP: INR121
TP: INR145 (+20%)
Buy
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Reports merged financials; Balance sheet strengthens but
concerns remain
Bank of Baroda (BoB) has published its balance sheet as at 1 Apr’19, which reflects the
impact of its merger with Vijaya Bank and Dena Bank. Key highlights:
Dena Bank/Vijaya Bank reserves were written down by ~86%/~24% from 3QFY19
levels,
CET-1 ratio of the combined entity has declined to 8.6% as against 10.4% for BoB in
FY19,
Net NPA ratio of the combined entity increased 32bp to ~3.7% from ~3.3% for BoB in
FY19,
Calculated PCR declined 167bp to ~66% for the merged entity while PCR (incl. tech
w/off) stood healthy at ~78%.
st
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
BOB IN
3,846.7
466.2 / 6.8
157 / 91
-9/-9/-5
2559
34.6
Financials Snapshot (INR b)
Y/E March
FY19 FY20E FY21E
NII
186.8 263.3 323.9
OP
134.9 185.6 235.7
NP
4.3
37.4
84.1
NIM (%)
2.6
2.9
2.8
EPS (INR)
1.6
11.6
22.0
EPS Gr. (%)
NM 606.9
90.8
BV/Sh. (INR)
182.9 167.5 188.2
ABV/Sh. (INR)
136.3 118.1 146.0
RoE (%)
0.9
6.4
12.0
RoA (%)
0.1
0.4
0.7
Valuations
P/E(X)
74.1
10.5
5.5
P/BV (X)
0.7
0.7
0.6
P/ABV (X)
0.9
1.0
0.8
Shareholding pattern (%)
As On
Mar-19 Dec-18 Mar-18
Promoter
63.3
63.7
64.0
DII
18.2
18.1
14.0
FII
9.8
9.4
13.9
Others
8.8
8.8
8.0
FII Includes depository receipts
Reserves of Dena Bank/Vijaya Bank marked down by 86%/24%:
In the
opening balance sheet of the merged entity, reserves of Dena Bank/Vijaya
Bank have been marked down by ~86%/~24%, largely due to higher provisions
created on NPLs and harmonization of accounting policies. Further, the CET-
1/Tier-1 ratio of the combined entity stood at 8.6%/9.7%, indicating the need
for a capital raise in the near future. We expect BoB to be one of the key
beneficiaries of any potential capital infusion by the government in PSBs during
FY20E.
Merged entity the third largest bank with advances’ market share at 6.7%:
Post the merger with Vijaya Bank and Dena Bank, BOB has become the third
largest bank in the country in terms of advances. The loan/deposit market
share of the merged entity stands at 6.7%/7.3% v/s 4.8%/5.1% pre-merger.
According to the latest available data, retail/Agri/MSME/wholesale book
constitutes ~24%/13%/13%/47% of the combined loan book (Exhibit 4). Also,
on the liability side, CASA ratio for the merged entity has declined by ~327bp to
37% as against ~40% for BoB in 4QFY19 (Exhibit 5).
Geographical reach to strengthen; employee base increases 51% for merged
BoB:
The combined entity will have branch/employee strength of ~9,
491/84,064, an increase of 71%/51% over FY19 levels. The widespread branch
network will help BoB to strengthen its presence in the western, southern and
north-eastern regions.
NNPA ratio post-merger higher by 32bp; PCR levels fairly healthy due to
conservative provisioning policies:
Post amalgamation, absolute NNPA of the
combined entity increased to ~INR238b v/s ~INR156b for the standalone
entity; NNPA ratio increased 32bp to ~3.7% v/s ~3.3% (standalone). Provision
coverage of the combined entity stood at 66% (v/s 67% standalone), while the
PCR, incl. technical w/off stood at a healthy 78%.
Exposure to stressed groups:
ILFS:
Exposure of Dena Bank and Vijaya Bank stands at INR12.2b while
exposure of BoB stands at INR45b. Thus, total exposure of the merged
entity to IL&FS is INR57.9b; of this, INR22b is classified as NPA (25%
provisions held on the same).
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542 |
Parth Gutka
(Parth.Gutka@motilaloswal.com); +91 22 6129 1567
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com) |
Himanshu Taluja
(Himanshu.Taluja@motilaloswal.com) |
Yash Agarwal
(Yash.Agarwal@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
Bank of Baroda
Exposure to
Reliance Commercial and Home Finance
is INR20b.
DHFL:
BoB/Dena Bank have exposure amounting to INR30b/INR10b towards
DHFL. The entire exposure is secured in nature.
Jet Airways:
Exposure is nil.
Bank has made additional provisions on the following categories:
i) Provision at 20% on the
Secured Sub-standard Advances
as against the
regulatory requirement of 15%,
ii) Bank has made 100% provision
(a)
in respect of
existing NPA accounts that
are more than six months old, such as
tractors loans/tiller/power tillers,
collateral free loans, auto loans, education loans and personal loans,
(b)
with
respect to
loan against mortgage of properties
that are secured (collateral)
and are NPAs for more than 2 years,
iii) Provision is made on
Non-fund-based facilities of NPA
borrowers by
applying 50% credit conversion factor (CCF).
Other details – (a)
Shareholding of the amalgamated entity has exceeded the
cap of 10% in five companies and four venture capital funds, and the bank is
awaiting RBI’s response on the same. Hence, no impact has been considered in
opening the financial statements,
(b)
Bank has transferred an amount of
INR34.1b to the amalgamation reserve as the difference between net-assets of
the amalgamating bank and the amount of shares issued,
(c)
The revised
shareholding of the government in the combined entity stands at 65.4% after
excluding the share application money pending allotment of INR50.4b (69.2%
including the same).
Valuation and view
The disappointment on the opening balance sheet of the combined entity led by
significant erosion to the net worth of Dena Bank and Vijaya Bank has resulted
in lower net worth for the merged entity. This has resulted in a decline in Tier-1
ratio at 9.7% (v/s 11.5% for BoB on standalone basis), suggesting the need for
capital to maintain traction in domestic loan growth.
However, on the asset quality front, the net NPLs of the merged entity as at 1
st
Apr’19 were better than earlier estimates. Also, the provision coverage ratio is
comfortable at ~66% which addresses the key overhang for the stock.
We expect fresh slippages to be slightly elevated in FY20 (2.7%) driven by the
merged entity’s exposure to various stressed groups and uncertain macros,
before moderating during FY21. Credit cost is expected to remain elevated and
we are building in credit cost of 2.0%/1.4% in FY20/21.
Also, the merged entity will take some time to address the operational and IT
related issues, both at the corporate and at the branch level. Thus, we expect
the merged entity to deliver 0.7%/12.0% ROA/ROE for FY21. We revise our
target price to INR145 (1.0x FY21E ABV) and maintain our BUY rating on the
stock.
2 July 2019
2
 Motilal Oswal Financial Services
Bank of Baroda
Exhibit 1:
Key data points for the merged entity
INR m
Net worth
Net advances
Deposits
Total assets
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (%)
PCR (incl TWO)
CET-1
Tier-1
Total CRAR
Dena
(3QFY19)
78,777
588,780
1,012,472
1,144,286
129,985
61,425
19.8%
10.4%
53%
66.6
7.6%
7.6%
10.2%
Vijaya
(3QFY19)
110,365
1,297,900
1,746,150
1,953,102
81,400
52,960
5.9%
3.8%
35%
NA
10.0%
11.3%
13.4%
Bank of
Baroda
(4QFY19)
509,831
4,688,187
6,386,897
7,809,874
482,328
156,095
9.6%
3.3%
68%
78.7%
10.4%
11.6%
13.4%
Merged Entity –
st
as on 1 April, 2019
627,734
6,513,840
9,151,591
10,819,094
699,240
237,948
10.0%
3.7%
66%
77.7%
8.6%
9.7%
11.8%
Source: Company, MOFSL
Exhibit 2:
Merged entity has loan market share of 6.7% on
system loans
Loans (INRb)
System mkt sh (%)
Exhibit 3:
Merged entity has deposit market share of 7.3%
on system loans
Deposits (INRb)
System mkt sh (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 4:
Loan composition of the merged entity – retail
forms 24% of the overall loan book
Retail
8%
36%
17%
20%
19%
Dena
(3QFY19)
Agri
0%
52%
8%
7%
33%
Vijaya
(3QFY19)
MSME
Corporate
3%
47%
14%
14%
22%
BoB
(4QFY19)
Others
3%
47%
13%
13%
24%
Merged
entity
Exhibit 5:
Deposit mix of the merged entity
TD
36%
5%
58%
78%
18%
4%
CA
SA
34%
7%
60%
31%
6%
63%
Dena
(3QFY19)
Vijaya
(3QFY19)
BoB
(4QFY19)
Merged
entity
Source: Company, MOFSL
Source: Company, MOFSL
2 July 2019
3
 Motilal Oswal Financial Services
Bank of Baroda
Exhibit 6:
Branches/Employees rose 71%/51% over FY19
levels for the merged entity
Branches
Employees
55,754
Employees
12,355
Employees
15,955
PCR: 35%
Employees
84,064
Exhibit 7:
GNPA/NNPA of the merged entity will stand at
10%/3.7% with PCR at 66%
PCR: 53%
GNPA (%)
NNPA (%)
PCR: 68%
PCR : 66%
1,819
Dena
(3QFY19)
2,119
Vijaya
(3QFY19)
5,553
BoB
(4QFY19)
9,491
Merged
entity
Dena
(3QFY19)
Vijaya
(3QFY19)
BoB
(4QFY19)
Merged
entity
Source: Company, MOFSL
Source: Company, MOFSL
FY18
6.17
3.98
2.19
0.68
0.27
0.94
3.14
1.44
0.65
0.79
1.70
2.09
2.03
-0.39
-0.34
18.0
-6.2
FY19
6.66
4.17
2.49
0.68
0.13
0.81
3.30
1.50
0.67
0.83
1.80
1.70
1.64
0.09
0.06
15.9
0.9
FY20E
7.73
5.02
2.71
0.91
0.09
1.00
3.71
1.80
0.8
1.02
1.91
1.33
1.22
0.57
0.38
16.6
6.4
FY21E
6.89
4.23
2.65
0.86
0.06
0.92
3.57
1.64
0.7
0.96
1.93
0.90
0.87
1.03
0.69
17.4
12.0
Exhibit 8:
Expect ROA/ROE to improve to 0.7%/12.0% by FY21E
Y/E MARCH
Interest Income
Interest Expense
Net Interest Income
Fee income
Trading and others
Other income
Total Income
Operating Expenses
Employee cost
Others
Operating Profits
Provisions
NPA
PBT
RoA (%)
Leverage (x)
RoE (%)
FY16
6.36
4.52
1.84
0.55
0.17
0.72
2.56
1.29
0.72
0.57
1.27
2.24
2.02
-0.97
-0.78
19.6
-15.3
FY17
6.18
4.20
1.98
0.61
0.38
0.99
2.97
1.36
0.68
0.68
1.61
1.24
1.17
0.36
0.20
19.8
4.0
Source: Company, MOFSL
Exhibit 9:
Change in earnings estimates
INR B
Net Interest Income
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
Loans
Deposits
Margins (%)
Credit Cost (%)
RoA (%)
RoE (%)
BV
ABV
EPS
Old Est
FY20
FY21
295.6
361.5
91.4
105.1
386.9
466.6
184.3
210.2
202.6
256.4
147.0
133.0
55.6
123.4
18.4
40.7
37.3
82.7
7,185
8,047
9,922
11,113
3.2
3.1
2.3
1.7
0.4
0.7
6.0
10.7
188.0
208.3
141
166
12
22
Revised Est
FY20
FY21
263.3
323.9
97.5
112.1
360.8
435.9
175.2
200.3
185.6
235.7
129.8
110.2
55.8
125.5
18.4
41.4
37.4
84.1
7,165
8,025
9,884
10,773
2.9
2.8
2.0
1.4
0.4
0.7
6.4
12.0
167.5
188.2
118
146
12
22
Change (%)/bps
FY20
-10.9
6.7
-6.8
-4.9
-8.4
-11.7
0.2
0.2
0.2
-0.3
-0.4
(32)
(30)
0
37
-10.9
-16.2
0.2
FY21
-10.4
6.7
-6.6
-4.7
-8.1
-17.2
1.7
1.7
1.7
-0.3
-3.1
(28)
(30)
2
126
-9.7
-12.1
1.7
Source: Company, MOFSL
2 July 2019
4
 Motilal Oswal Financial Services
Bank of Baroda
Financials and Valuations
Income Statement
Y/E March
Interest Income
Interest Expense
Net Interest Income
Growth (%)
Non Interest Income
Total Income
Growth (%)
Operating Expenses
Pre Provision Profits
Growth (%)
Core PPP
Growth (%)
Provisions (excl tax)
PBT
Tax
Tax Rate (%)
PAT
Growth (%)
FY16
440,613
313,214
127,398
-3.4
49,989
177,387
0.8
89,231
88,156
-11.1
76,367
-14.3
155,137
-66,981
-13,025
19.4
-53,955
-258.8
FY17
421,999
286,865
135,134
6.1
67,581
202,715
14.3
92,964
109,751
24.5
83,571
9.4
85,024
24,727
10,896
44.1
13,831
-125.6
FY18
436,485
281,268
155,218
14.9
66,572
221,789
9.4
101,734
120,056
9.4
101,279
21.2
147,963
-27,907
-3,589
12.9
-24,318
-275.8
FY19
499,741
312,903
186,838
20.4
60,910
247,748
11.7
112,880
134,868
12.3
124,974
23.4
127,887
6,982
2,646
37.9
4,335
-117.8
FY20E
751,862
488,538
263,324
40.9
97,456
360,780
45.6
175,206
185,574
37.6
177,164
41.8
129,816
55,758
18,400
33.0
37,358
761.7
(INR Million)
FY21E
840,688
516,817
323,871
23.0
112,074
435,945
20.8
200,289
235,656
27.0
228,507
29.0
110,152
125,504
41,416
33.0
84,088
125.1
Balance Sheet
Y/E March
Equity Share Capital
Reserves & Surplus
Net Worth
Deposits
Growth (%)
of which CASA Dep
Growth (%)
Borrowings
Other Liabilities & Prov.
Total Liabilities
Current Assets
Investments
Growth (%)
Loans
Growth (%)
Fixed Assets
Other Assets
Total Assets
FY16
4,621
397,369
401,990
5,740,379
-7.0
1,513,345
-7.1
334,717
236,679
6,713,765
1,339,003
1,204,505
3.1
3,837,702
-10.3
62,538
270,017
6,713,765
FY17
4,621
398,412
403,033
6,016,752
4.8
1,934,958
27.9
306,114
222,856
6,948,754
1,504,699
1,296,305
7.6
3,832,592
-0.1
57,584
257,574
6,948,754
FY18
5,304
428,644
433,948
5,913,148
-1.7
2,117,786
9.4
625,720
227,182
7,199,998
928,974
1,631,845
25.9
4,274,318
11.5
53,674
311,186
7,199,998
FY19
5,304
504,527
509,831
6,386,897
8.0
2,237,944
5.7
672,013
241,133
7,809,874
892,296
1,822,981
11.7
4,688,187
9.7
69,903
336,507
7,809,874
FY20E
7,627
655,993
663,621
9,883,718
54.7
3,360,464
50.2
777,020
330,516
11,654,875
1,012,770
2,834,284
55.5
7,165,224
52.8
114,915
527,682
11,654,875
FY21E
7,627
734,773
742,400
10,773,253
9.0
3,738,319
11.2
845,824
396,619
12,758,096
1,220,003
3,089,369
9.0
8,025,051
12.0
126,406
297,267
12,758,096
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
Slippage Ratio
Credit Cost
PCR (Excl Tech. write off)
E: MOFSL Estimates
405,210
194,065
10.0
5.1
6.5
3.5
52.1
427,190
180,802
10.5
4.7
3.5
2.1
57.7
564,804
234,824
12.3
5.5
6.0
3.5
58.4
482,328
156,093
9.6
3.3
3.0
2.7
67.6
649,489
237,344
8.6
3.3
2.7
2.0
63.5
574,071
195,187
6.8
2.4
2.0
1.4
66.0
2 July 2019
5
 Motilal Oswal Financial Services
Bank of Baroda
Financials and Valuations
Ratios
Y/E March
Yield and Cost Ratios (%)
Avg. Yield-Earning Assets
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost-Int. Bear. Liab.
Avg. Cost of Deposits
Interest Spread
Net Interest Margin
Capitalization Ratios (%)
CAR
Tier I
Tier II
Business and Efficiency Ratios (%)
Loans/Deposit Ratio
CASA Ratio
Cost/Assets
Cost/Total Income
Cost/Core Income
Int. Expense/Int.Income
Fee Income/Total Income
Non Int. Inc./Total Income
Empl. Cost/Total Expense
Investment/Deposit Ratio
FY16
6.8
7.3
9.0
5.0
4.9
1.9
2.0
FY17
6.7
7.2
8.5
4.6
4.6
2.1
2.2
FY18
6.5
7.2
7.3
4.4
4.4
2.1
2.3
FY19
7.0
7.7
7.5
4.6
4.5
2.4
2.6
FY20E
8.2
8.8
8.5
5.5
5.4
2.7
2.9
FY21E
7.2
7.8
7.3
4.6
4.6
2.6
2.8
13.2
10.8
2.3
12.2
9.9
2.2
12.9
11.3
1.6
14.5
12.7
1.8
10.4
8.7
1.7
9.8
8.2
1.6
66.9
26.4
1.3
50.3
53.9
71.1
21.5
28.2
55.8
21.0
63.7
32.2
1.3
45.9
52.7
68.0
20.4
33.3
49.9
21.5
72.3
35.8
1.4
45.9
50.1
64.4
21.5
30.0
45.3
27.6
73.4
35.0
1.4
45.6
47.5
62.6
20.6
24.6
44.6
28.5
72.5
34.0
1.5
48.6
49.7
65.0
24.7
27.0
43.1
28.7
74.5
34.7
1.6
45.9
46.7
61.5
24.1
25.7
41.5
28.7
Profitability Ratios and Valuation
RoE
RoA
Book Value (INR)
Growth (%)
Price-BV (x)
Adjusted BV (INR)
Price-ABV (x)
EPS (INR)
Price-Earnings (x)
Dividend Per Share (INR)
Dividend Yield (%)
E: MOFSL Estimates
-15.3
-0.8
164.2
-7.3
0.7
98.0
1.2
-23.8
-5.1
0.0
0.0
4.0
0.2
165.9
1.1
0.7
107.2
1.1
6.0
20.2
1.4
1.2
-5.8
-0.3
157.1
-5.3
0.8
90.9
1.3
-9.80
-12.4
0.0
0.0
0.9
0.1
182.9
16.4
0.7
136.3
0.9
1.63
74.1
0.0
0.0
6.4
0.4
167.5
-8.4
0.7
118.1
1.0
11.6
10.5
0.6
0.5
12.0
0.7
188.2
12.3
0.6
146.0
0.8
22.0
5.5
1.4
1.1
2 July 2019
6
 Motilal Oswal Financial Services
Bank of Baroda
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
********************************************************************************************************************************
2 July 2019
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 Motilal Oswal Financial Services
Bank of Baroda
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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