27July 2019
1QFY20 Results Update | Sector: Metals
JSW Steel
Buy
BSE SENSEX
37,883
S&P CNX
11,284
CMP: INR250
TP: INR298 (+19%)
Motilal Oswal values your support in
the Asiamoney Brokers Poll 2019 for
India Research, Sales and Trading
team. We
request your ballot.
Export orders, long-term contracts protect margins
Strong project pipeline to drive growth; Maintain Buy
JSW Steel’s (JSTL) consol. EBITDA was down 16% QoQ to INR37.2b (our est.
INR35.7b) on lower volumes, while consol. PAT was down 33% QoQ to INR10.3b
(est. INR9b).
Standalone (S/A) volumes declined 2% YoY (-13% QoQ) to 3.75mt due to
weak demand. But, crude steel production rose 3% YoY (2% QoQ) to 4.2mt.
Realization surprised positively, increasing ~INR741/t QoQ to INR46,664/t
(v/s expectation of decline), as it benefited from carry-forward of higher
priced export orders from 4QFY19 and favorable hedges.
EBITDA/t declined INR183/t QoQ to INR9,936/t, impacted by negative
operating leverage as volumes were lower QoQ.
EBITDA of subsidiaries was down from ~INR1b in 4QFY19 to a loss of
~INR100m on higher losses in overseas subsidiaries.
Strong project pipeline to drive growth; Maintain Buy
JSTL was able to partially offset the impact of a weak domestic steel market
due to some favorably priced contracts. However, margins are likely to be
under pressure in the near-term due to (a) domestic steel prices correcting
by ~INR2-3,000/t from 1Q average, and (b) weak near-term demand
outlook.
While the near-term outlook is weak, we continue to like JSTL given its
strong pipeline of projects and cost reduction initiatives. Also, its recently
acquired overseas operations are expected to turnaround soon. On the
domestic front, (a) improving product mix, and (2) higher captive iron ore
production should put a check on costs/aid margins. Besides, JSTL’s ongoing
5mtpa Dolvi expansion remains on track and provides growth visibility. We
value JSTL at 7x FY20E EV/EBITDA at INR298/share. Maintain
Buy.
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
JSTL IN
2,417
603.5 / 8.8
427 / 247
-6/-14/-22
2093
57.7
Financials & Valuations (INR b)
Y/E Mar
2019 2020E
Net Sales
847.6
818.5
EBITDA
189.5
151.3
PAT
76.4
44.1
EPS (INR)
31.8
18.4
Gr. (%)
32.4
-42.3
BV/Sh (INR)
145.0
159.2
RoE (%)
24.4
12.1
RoCE (%)
11.3
7.3
P/E (x)
7.9
13.6
P/BV (x)
1.7
1.6
2021E
965.6
199.2
72.8
30.4
65.3
184.8
17.6
9.2
8.2
1.4
Estimate change
TP change
Rating change
Y/E March
Net Sales
Change (YoY %)
EBITDA
Change (YoY %)
EBITDA (INR per ton)
EBITDA (USD per ton)
Interest
Depreciation
Other Income
PBT (after EO Item)
Total Tax
% Tax
Reported PAT
MI (Profit)/Loss
Share of P/(L) of Ass.
Adjusted PAT
Change (YoY %)
1Q
205,190
38.4
51,050
85.9
13,329
199
8,870
9,050
580
33,710
10,530
31.2
23,180
270
210
23,660
229.4
Quarterly Performance (Consolidated) – INR m
FY19
FY20
FY19
FY20E
vs Est
2Q
3Q
4Q
1QE
2QE
3QE
4QE
1QE
(%)
215,520 203,180 223,680 198,120 203,579 193,759 223,050 847,570 818,508 190,618
4
27.2
13.8
9.4
-3.4
-5.5
-4.6
-0.3
20.9
-3.4
-7.1
49,060 45,010 44,400 37,160 33,473 36,489 44,148 189,520 151,271 35,758
4
55.0
16.9
-9.8
-27.2
-31.8
-18.9
-0.6
29.0
-20.2
-30.0
12,389 12,231 10,350
9,909
8,287
9,721 10,089 12,025
9,503
9,431
5
177
170
147
142
119
140
145
172
137
136
5
9,630 10,210 10,460 10,420 10,385 10,403 10,394 39,170 41,601 10,465
0
9,740 10,780 10,840 10,260 10,555 10,408 10,481 40,410 41,704 10,790
-5
560
370
530
1,410
795
956
801
2,040
3,962
397 256
30,250 24,390 23,630 17,890 13,328 16,635 24,074 111,980 71,927 14,900
20
9,360
8,200
8,350
7,620
5,630
6,331
8,441 36,440 28,022
6,096
30.9
33.6
35.3
42.6
42.2
38.1
35.1
32.5
39.0
40.9
20,890 16,190 15,280 10,270
7,698 10,304 15,633 75,540 43,905
8,804
17
390
210
280
200
270
240
248
1,150
958
288
-20
-160
-330
-190
-175
-214
-227
-300
-806
-75
21,260 16,240 15,230 10,280
7,793 10,330 15,653 76,390 44,057
9,016
14
127.8
-16.5
-30.7
-56.6
-63.3
-36.4
2.8
31.8
-42.3
-61.9
Dhruv Muchhal - Research Analyst
(Dhruv.Muchhal@MotilalOswal.com); +91 22 6129 1549
Aniket Mittal
- Research Analyst
(Aniket.Mittal@MotilalOswal.com); +91 22 7198 5585
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
JSW Steel
Standalone: Favorable export orders and hedges protect margins
Steel production increased 2% QoQ / 3% YoY to 4.24mt.
Sales declined 13% QoQ / 2% YoY to 3.75mt due to weak demand. According to
the management domestic steel demand was impacted by weaker activity level
driven by lower public investment (on account of elections), payment delays on
government contracts and a general lack of credit availability.
Realization increased INR741/t QoQ to INR46,664/t against an expectation of
decline QoQ. Realization was supported by higher price export orders carried-
forward from previous quarter. Also, prices on certain auto and white consumer
goods supply contract were unchanged as they are due to change in October.
EBITDA per ton was down ~INR183 QoQ to INR9,936 (est. 9,069). While
realization was higher, the negative operating leverage on lower sales volumes
impacted margins. Raw material cost also increased QoQ likely due to increase
in iron ore cost.
Cost of production was supported during the quarter by (a) captive iron ore of
~0.8mt. Four of the six captive mines are now in operations. The remaining two
mines are expected to start in FY20. The six mines can production ~4-5mtpa. It
has also won three mines in recently concluded iron ore auctions in Karnataka
(for the mines expiring in March 2020). These mines are expected to start
producing in FY20 and have a capacity of ~2.5-4mtpa. And (b) start of the pipe
conveyor belt resulting in a saving of ~INR155/t of iron ore transported. The
pipe conveyor is currently operating at a run-rate of ~5mtpa which would soon
increase to ~10mtpa once the captive mines start producing.
PAT was down 18% QoQ to INR14.2b.
Conference call takeaways for standalone business:
Coke production is now completely captive. This will drive cost savings v/s
imported coke.
There was no supply of APM gas during the quarter. It had to depend on LNG
imports, which drove an increase in power and fuel costs.
Coking coal price averaged ~USD197/t CFR in 1Q. It is expected to decline by
~USD2-5/t in 2Q.
Organic capex plans are at the fag-end of their completion. Dolvi’s 5mtpa
expansion is scheduled for commissioning by end-FY20. Capex momentum is not
expected to see a slowdown due to the current weakness in the steel market.
Management does not expect further fall in domestic steel prices. The Indian
steel industry continues to lobby the government for appropriate protection
against imports. The government is examining the case.
Domestic demand outlook for the near-term remains weak. However, the
government and the RBI are expected to take measures to improve the liquidity
situation in the country, which should drive improvement in demand from 2H
onwards.
27 July 2019
2
 Motilal Oswal Financial Services
JSW Steel
Exhibit 1: Quarterly Performance (Standalone)
Y/E March
(Standalone)
Sales ('000 tons)
Change (YoY %)
Realization (INR/T)
Change (QoQ, INR)
Net Sales
EBITDA
Margin (%)
Spreads
Conv. cost
EBITDA (INR/T)
EBITDA (USD/T)
Interest
Depreciation
Other Income
PBT (after EO Item)
Total Tax
% Tax
Reported PAT
1Q
3,830
9.1
49,514
3,704
189,640
48,220
25.4
24,029
11,439
12,590
188
8,660
8,190
1,670
33,040
9,660
29.2
23,380
INR million
FY19
FY20
vs Est
2Q
3Q
4Q
1QE
2QE
3QE
4QE
FY19
FY20E
1QE (%)
3,960
3,680
4,290
3,750
4,039
3,754
4,376 15,760 15,919
3,792
-1
1.0
-7.3
1.7
-2.1
2.0
2.0
2.0
0.9
1.0
-1.0
49,669 49,981 45,923 46,664 44,500 45,000 45,000 48,685 45,265 45,000
4
155
312 -4,058
741 -2,164
500
7,176 -3,420
-923
196,690 183,930 197,010 174,990 179,744 168,912 196,911 767,270 720,557 170,627
3
48,020 44,380 43,410 37,260 32,868 34,872 41,240 184,030 146,241 34,386
8
24.4
24.1
22.0
21.3
18.3
20.6
20.9
24.0
20.3
20.2
23,753 24,715 20,872 22,069 19,615 20,863 20,863 23,260 20,830 20,301
9
11,626 12,655 10,753 12,133 11,477 11,573 11,439 11,583 11,644 11,232
8
12,126 12,060 10,119
9,936
8,137
9,290
9,425 11,677
9,187
9,069
10
173
167
144
143
117
134
136
167
132
130
10
9,290
9,570
9,560
9,630
9,595
9,613
9,604 37,080 38,441
9,565
1
8,580
8,550
8,650
8,060
8,355
8,208
8,281 33,970 32,904
8,600
-6
2,020
670
830
1,620
1,362
1,300
1,156 5,190
5,439
1,184
37
32,170 26,930 26,030 21,190 16,280 18,353 24,511 118,170 80,334 17,405
22
9,330
8,010
8,580
6,960
5,535
6,240
8,334 35,580 27,069
5,918
18
29.0
29.7
33.0
32.8
34.0
34.0
34.0
30.1
33.7
34.0
22,840 18,920 17,450 14,230 10,745 12,113 16,177 82,590 53,265 11,487
24
Source: Company, MOFSL
Exhibit 2: JSW Steel EBITDA and Spreads
EBITDA (INR/t)
25,000
20,000
15,000
10,000
5,000
0
Spreads (INR/t)
Source: MOFSL, Company
Subsidiaries: Acero’s losses increase
EBITDA of subsidiaries turned from a profit of INR990m in 4QFY19 to loss of
INR100m in 1QFY20.
EBITDA of coated business increased from INR860m to INR1,720m QoQ.
But EBITDA loss in US’s Acero increased from INR1.9b to INR2.5b QoQ on
continuing inventory write-down and lower steel prices. Loss in Italy’s Aferpi
also increased from INR238m to INR326m QoQ. Management expected both the
businesses to turn profitable from 4Q onwards.
27 July 2019
3
 Motilal Oswal Financial Services
JSW Steel
Exhibit 3: Quarterly Performance (Subsidiaries)
Y/E March
Net Sales
EBITDA
JSW coated
US Mills
Acero
Aferpi
others
PAT
1Q
15,550
2,830
1,220
715
FY19
2Q
3Q
18,830 19,250
1,040
630
880
970
385
293
-760
-600
-225
727
-1,580 -2,680
4Q
26,670
990
860
411
-1,959
-238
1,916
-2,220
1QE
23,130
-100
1,720
139
-2,512
-326
879
-3,950
FY20
2QE
3QE
23,835 24,847
605
1,617
1,125
1,125
338
324
-1,489
-869
-193
-50
824
1,087
-2,952 -1,783
FY19
4QE
26,139 80,300
2,909
5,490
1,125 3,930
333 1,804
174 -2,719
100
-837
1,176 3,313
-524
-6,200
FY20E
97,950
5,030
1,804
1QE
19,992
1,372
1,225
496
-1,050
-127
828
-2,471
INR million
vs Est
(%)
16
-107
40
895
280
3,226
-8,459
60
Source: MOFSL
Other conference call highlights
Monnet Ispat:
Pellet and DRI operations are profitable. But TMT operations are
loss making due to sharp fall in steel prices. The blast furnace operations are
under planned shutdown. It is expected to restart in October, when demand is
expected to improve.
Auction of Iron ore mines:
JSTL expects the process of auctioning of merchant
iron ore mines in Odisha to start in August.
Exhibit 4: Target price calculations - INR m
Y/E March
A. S/A volumes
B. EBITDA per ton
C. S/A EBITDA (AxB)
D. Sub. EBITDA
E. Cons. EBITDA (C+D)
F. Target EV/EBITDA (x)
G. Target EV (FxG)
less: Net Debt (INR m)
add: CWIP
Equity value
No. of shares
Equity value /sh.
2016
12.1
4,736
57,225
3,505
60,730
7.0
425,109
505,698
69,040
2017
14.8
7,868
116,288
6,310
122,598
2018
15.6
8,728
136,330
10,530
146,860
2019
15.8
11,677
184,030
5,490
189,520
2020E
15.9
9,187
146,241
5,030
151,271
7.0
1,058,895
582,121
238,890
715,664
2,400
298
Source: MOFSL
522,350
43,630
482,720
59,500
2,410
526,870
118,890
2,400
27 July 2019
4
 Motilal Oswal Financial Services
JSW Steel
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2014
512,197
34.0
91,655
17.9
31,826
59,829
30,479
858
-17,128
13,081
9,201
70.3
504
3,232
9,322
-16.0
2014
2,417
209,322
211,739
436,858
21,234
671,502
612,979
142,520
470,459
93,998
5,947
205,995
81,551
22,924
7,310
94,209
104,897
35,400
69,497
101,097
671,502
2015
529,715
3.4
94,023
17.7
34,345
59,678
34,930
1,114
-471
25,391
8,194
32.3
748
16,191
18,006
93.2
2015
2,417
220,479
222,896
496,419
28,894
749,186
701,889
180,126
521,763
82,653
5,990
246,134
110,090
24,998
19,136
91,910
107,353
33,651
73,703
138,781
749,186
2016
418,789
-20.9
60,730
14.5
31,879
28,851
33,027
1,682
-21,254
-23,748
-15,241
64.2
950
-9,599
-84
-100.5
2016
2,417
185,032
187,449
513,038
39,123
739,678
789,575
226,239
563,336
69,040
6,184
207,727
84,034
28,016
7,340
88,337
106,610
37,125
69,485
101,117
739,678
2017
556,046
32.8
122,598
22.0
35,154
87,444
37,681
1,521
0
51,284
16,743
32.6
64
35,670
35,798
-42,485.0
2017
2,400
224,070
226,470
540,200
29,900
794,110
663,830
76,530
587,300
43,630
10,660
238,460
113,950
41,490
17,850
65,170
85,940
38,460
47,480
152,520
794,110
2018
700,870
26.0
146,860
21.0
33,870
112,990
37,010
1,670
5,730
83,380
22,670
27.2
990
60,140
57,948
61.9
2018
2,410
277,570
279,980
496,470
25,560
797,370
688,170
109,690
578,480
59,500
11,570
270,150
125,940
47,040
13,750
83,420
122,330
69,110
53,220
147,820
797,370
2019
847,570
20.9
189,520
22.4
40,410
149,110
39,170
2,040
0
111,980
36,440
32.5
1,150
74,090
76,390
31.8
2019
2,400
345,550
347,950
589,560
37,770
970,780
775,920
149,480
626,440
118,890
18,120
384,520
145,480
71,600
62,690
104,750
177,190
59,310
117,880
207,330
970,780
(INR Million)
2020E
818,508
-3.4
151,271
18.5
41,704
109,567
41,601
3,962
0
71,927
28,022
39.0
958
42,142
44,057
-42.3
2021E
965,611
18.0
199,223
20.6
45,675
153,548
47,575
3,617
0
109,590
36,893
33.7
978
70,891
72,846
65.3
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Million)
2020E
2021E
2,400
2,400
379,678 441,145
382,077 443,544
640,213 690,213
51,407
66,381
1,069,197 1,195,639
805,920 1,005,920
191,184 236,859
614,736 769,061
238,890 198,890
18,120
18,120
373,635 396,231
141,277 164,022
69,517
79,365
58,092
48,094
104,750 104,750
176,185 186,663
58,305
68,783
117,880 117,880
197,451 209,567
1,069,197 1,195,639
27 July 2019
5
 Motilal Oswal Financial Services
JSW Steel
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
EV/ton
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Asset Turnover (x)
Inventory (No. of Days)
Debtors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2014
3.9
14.8
87.6
1.1
64.8
16.9
2.9
2.0
11.3
1,440
0.4
4.7
6.9
8
0.8
58
16
2.0
2014
91,655
-26,487
-35,195
-4,038
0
25,935
-57,629
-31,693
176
-12,146
-69,599
0
60,290
-24,131
-3,155
33,005
-10,659
17,969
7,310
2015
7.4
21.3
92.2
1.1
33.6
11.7
2.7
2.0
11.5
1,471
0.4
8.3
5.7
7
0.7
76
17
2.1
2015
94,023
-5,522
-11,748
-7,728
0
69,025
-67,206
1,819
702
10,996
-55,509
0
27,373
-25,626
-3,437
-1,691
11,826
7,310
19,136
2016
0.0
9.7
77.5
1.1
-7154.9
25.9
3.2
2.7
18.3
1,401
0.4
0.0
2.7
3
0.6
73
24
2.7
2016
60,730
2,172
6,189
-2,055
0
67,035
-51,787
15,249
-1
709
-51,079
0
3,781
-27,997
-3,536
-27,752
-11,796
19,136
7,340
2017
14.9
29.0
94.4
0.8
16.8
8.6
2.6
2.0
9.2
1,132
0.3
17.4
7.9
8
0.7
75
27
2.3
2017
122,598
-2,658
-38,690
-2,370
0
78,880
-44,350
34,530
-2,940
6,020
-41,270
20
10,750
-35,690
-2,180
-27,100
10,510
7,340
17,850
2018
24.0
39.2
116.2
2.3
10.4
6.4
2.2
1.5
7.4
1,078
0.9
22.8
9.6
11
0.9
66
24
1.7
2018
146,860
2,340
-11,010
-14,400
0
123,790
-47,360
76,430
90
1,230
-46,040
-270
-39,920
-35,110
-6,550
-81,850
-4,100
17,850
13,750
2019
31.8
48.3
145.0
3.3
7.9
5.2
1.7
1.3
5.9
1,023
1.3
24.4
11.3
13
0.9
63
31
1.5
2019
189,520
-1,080
-15,810
-26,300
0
146,330
-102,060
44,270
2,510
-15,370
-114,920
-1,530
66,540
-38,150
-9,330
17,530
48,940
13,750
62,690
2020E
18.4
35.7
159.2
4.0
13.6
7.0
1.6
1.4
7.8
1,063
1.6
12.1
7.3
10
0.8
63
31
1.5
2020E
151,271
0
5,281
-14,385
0
142,166
-150,000
-7,834
0
3,962
-146,038
0
50,000
-41,601
-9,125
-726
-4,598
62,690
58,092
2021E
30.4
49.3
184.8
3.2
8.2
5.1
1.4
1.3
6.2
936
1.3
17.6
9.2
12
0.8
62
30
1.4
2021E
199,223
0
-22,115
-21,918
0
155,191
-160,000
-4,809
0
3,617
-156,383
0
50,000
-47,575
-11,231
-8,806
-9,998
58,092
48,094
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
27 July 2019
6
 Motilal Oswal Financial Services
JSW Steel
Corporate profile
Company description
JSW Steel has 18mtpa steel capacity in India and a
small plate and pipe mill the US. It recently acquired
3mt hot strip mill in US and 1.3mt rolling mill in
Italy. JSW Steel is also expanding capacity in India
by 6.7mtpa to 25mtpa by end of FY20. JSW Steel is
most efficient steel producer in India and has strong
project execution skills.
Source: MOFSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Jun-19
Promoter
DII
FII
Others
42.3
3.8
19.6
34.4
Mar-19
42.7
3.4
19.2
34.7
Jun-18
41.8
18.4
20.4
19.5
Source: Capitaline
Exhibit 3: Top holders
Holder Name
JFE STEEL INTERNATIONAL EUROPE B.V.
GAGANDEEP CREDIT CAPITAL PVT LTD
LOTUS GLOBAL INVESTMENTS LTD
APMS INVESTMENT FUND LIMITED
THELEME MASTER FUND LIMITED
% Holding
15.0
2.0
1.6
1.5
1.2
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Sajjan Jindal
Savitri Devi Jindal
Vinod Nowal
Seshagiri Rao
Lancy Varghese
Designation
Chairman & Managing Director
Chairman Emeritus
Deputy Managing Director
Jt. Managing Dir. & Group CFO
Company Secretary
Exhibit 5: Directors
Name
Jayant Acharya
Kannan Vijayaraghavan
Punita Kumar Sinha
Vijay Kelkar
NAVEEN RAJ SINGH
Name
H Khaitan
Malay Mukherjee
Seturaman Mahalingam
Hiromu Oka
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Lodha & Co
Ramanath Iyer & Co
RSMV & Co
Type
Statutory
Cost Auditor
Secretarial Audit
Exhibit 7: MOFSL forecast v/s consensus
EPS
(INR)
FY20
FY21
MOFSL
forecast
18.4
30.4
Consensus
forecast
23.9
28.4
Variation (%)
-23.1
7.1
Source: Bloomberg
Source: Capitaline
27 July 2019
7
 Motilal Oswal Financial Services
JSW Steel
NOTES
27 July 2019
8
 Motilal Oswal Financial Services
JSW Steel
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 - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
27 July 2019
9
 Motilal Oswal Financial Services
JSW Steel
********************************************************************************************************************************
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.
* MOFSL 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.
27 July 2019
10