Ajanta Pharma
BSE SENSEX
39,746
S&P CNX
11,633
27 February 2020
Update
|
Sector: Healthcare
CMP: INR1400
TP: INR1,655(+18%)
Revitalizing growth
US/branded generics to drive earnings delta
Buy
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 (%)
AJP IN
88
122.1 / 1.7
1485 / 840
23/31/30
256
29.5
Financials Snapshot (INR b)
Y/E MARCH
2020E 2021E 2022E
Sales
25.4 28.4 31.7
EBITDA
6.9 7.8 8.8
Adj. PAT
4.6 5.4 6.1
EBIT Margin (%)
23.5 23.9 24.4
Cons. Adj. EPS (INR)
51.5 60.7 69.5
EPS Gr. (%)
15.8 18.1 14.4
BV/Sh. (INR)
296.8 345.7 398.0
Ratios
Net D:E
0.0 -0.1 -0.1
RoE (%)
18.7 18.9 18.7
RoCE (%)
19.0 19.2 18.9
Payout (%)
16.3 19.5 24.7
Valuations
27.2 23.1 20.2
P/E (x)
EV/EBITDA (x)
17.9 15.6 13.6
0.6 0.8 1.2
Div. Yield (%)
FCF Yield (%)
-0.3 1.7 2.5
4.9 4.3 3.8
EV/Sales (x)
Shareholding pattern (%)
As On
Dec-19 Sep-19 Dec-18
Promoter
70.5
70.5
70.5
DII
12.3
12.5
9.6
FII
7.9
7.7
10.1
Others
9.3
9.4
9.8
FII Includes depository receipts
Stock Performance (1-year)
Ajanta Pharma
Sensex - Rebased
1,500
1,200
900
600
We recently met management of Ajanta Pharma (AJP) to understand the growth
prospects in greater detail for its key markets of India, Asia, Africa and the US. Key
takeaways:
Earnings have been under pressure for the past two years (down 16% YoY) on
account of (a) reduced Institutional Anti-malaria business, (b) moderate growth in
Domestic Formulation (DF), (c) inventory rationalization in Africa and (d) increased
operating cost associated with commissioning of new facilities.
With (a) healthy momentum in US sales, (b) renewed focus on delivering results in
the derma portfolio in DF, (c) domestic industry outperformance in cardiology/pain
and (d) favorable macro scenario for branded Africa/Asia segment, we expect 16%
earnings CAGR over FY19-22. Further, we also raise the P/E multiple to 22x (prior:
21x) to factor in superior profitability/return ratios and arrive at a target price of
INR1,655. We reiterate our Buy rating.
Earnings back on track after bottoming out in FY19
After delivering phenomenal earnings CAGR of 44% and RoE of 35-40% over FY12-
17, AJP appeared to lose momentum over FY17-19 with sales remaining flat and
earnings declining from INR5b to INR4b. DF faced pressure from
GST/demonetization/increased share of generic-generic segment and product-
specific issues, while Institutional Anti-malaria business was hurt by reduced
procurement from the global fund. Moreover, a sharp fall in crude oil prices
impacted its branded generics segment of Asia/Africa, while supply side
consolidation and intense competition on the manufacturer side affected growth in
the US market to some extent.
Favorable macro scenario, superior execution to drive earnings
AJP remains confident of growing faster than industry in India. With stability in
industry cash cycle, AJP has enhanced its business scope in the branded markets of
Asia and Africa. For branded generics business (67% of sales), AJP has guided for 9-
11% YoY growth for the next three years. With 7-8 annual ANDA launches and
increased traction in existing products, AJP has guided for 30% CAGR over FY19-22.
Valuation and view
We remain positive on AJP given the improving prospects of a revival in its earnings
growth. Furthermore, capex is nearly complete and benefits are likely to accrue
from end-FY20. We value AJP at 22x 12M forward earnings (superior profitability
and return ratios) and arrive at a price target of INR1,655. Re-iterate
Buy.
Tushar Manudhane – Research analyst
(Tushar.Manudhane@MotilalOswal.com); +91 22 6129 1536
Hitakshi Chandrani – Research analyst
(Hitakshi.chandrani@motilaloswal.com); +91 22 6129 1557
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Ajanta Pharma
Key highlights of the meeting
India – Derma/Cardiology/Pain to drive growth
AJP expects growth in DF sales to be led by Dermatology, Pain and Cardiology.
Covered market growth in Dermatology for the past five years was 16%, while
AJP grew at 8% due to a high base of Melacare range of products and higher
attrition in MRs. Going forward, covered market growth is expected to be 9-
10%. Compared to its subdued growth in the past, AJP expects to do better (11-
12%) as (a) MR team being stabilized for this segment, (b) renewed interest in
Melacare range of products and (c) new launches lined up in this segment.
Considering covered market growth expectation at 7-8%, AJP intends to do
better than industry at 10-11% in Cardiology.
On a low base, new launches and better traction in existing products, AJP is
confident to grow at 15-18% compared to covered market growth of 12-13% in
Pain segment.
With a market share of 10% in Ophthalmology and a market size of INR25b (as
per AIOCD), there is limited scope to grow in this category. AJP intends to grow
in line with industry at 7-8%.
AJP would be maintaining its MR strength at ~3,000.
The company also mentioned about a considerable increase in fees associated
with approval for product from DCGI (Drug Controller General of India). Further,
the scrutiny level has also increased, resulting in longer time for product
approval.
That said, AJP intends to launch 15-20 products with 7-8 being first to market.
The company also is making inroads in the generic-generic segment. This
segment partly led to 57% YoY growth in institutional sales to INR410m for FY19.
AJP had sales of INR470m from generic-generic segment in 9MFY20. EBITDA
margin remained the same as that of the branded formulation segment as there
is no MR-led cost for driving this business.
Channel holdings days were stable at 28-30.
With increased capacity utilization at Dahej and Guwahati (which are primary
for the India market), operating leverage would drive a further improvement in
profitability of the DF segment.
Exhibit 1: Expect India business CAGR of 13.7% over FY19-22
Domestic Formulation Sales (INR b)
24.7
16.5
9.8
6.3
6.1
FY17
2.4
FY18
9.5
12.1
Growth YoY (%)
14.4
14.8
4.8
FY15
5.3
FY16
6.9
FY19
7.7
FY20E
8.8
FY21E
10.1
FY22E
Source: MOFSL, Company
27 February 2020
2
 Motilal Oswal Financial Services
Ajanta Pharma
US – healthy product pipeline to support strong growth over 1-2 years
AJP guided for 30% CAGR in the US business over the next 2-3 years on the back
of new launches and increased market share in existing products.
With its own front-end in place, strong focus on product quality and consistency
in supply has given good recognition among major distributors in the US.
FY19 sales of USD40m from commercialization of 25 products imply average per
product revenue to the tune of USD1.5m. Further, the three approved ANDAs
are yet to be commercialized.
AJP has 7-8 ANDA launches over the next 12 months.
The company has majority of base business from Paithan and considerable
number of pending approvals from Dahej.
Till date, it has successful compliance track record at both the facilities. Paithan
was last inspected in July’19 and Dahej in Jun’19. EIR (establishment inspection
report) were received for both the facilities in Aug’19. Post that, there has been
approval from both the facilities, implying minimal regulatory risk over the
medium term.
Exhibit 2: Expect US business revenue CAGR of 29.3% over FY19-22
US Sales (INR m)
5,202
5,678
6,123
2,830
1,850
40
FY15
140
FY16
FY17
FY18
FY19
FY20E
FY21E
FY22E
1,930
Source: MOFSL, Company
27 February 2020
3
 Motilal Oswal Financial Services
Ajanta Pharma
Branded generics (Asia & Africa) – hurdles now behind; readying for growth
Africa branded generics segment was impacted by rationalization of pipeline as
crude debacle had led to squeezing of payment by customers in that region. As a
result, AJP has lowered its exposure to this region. This was the major cause of
decreased business in west/east Africa, which forms about 75%/25% of Africa
branded generic segment.
Similarly, AJP had reduced its business in east, west and central Asia, which
formed ~42/45/13% of Asia sales. With an improvement in market dynamics,
AJP has started focusing on south-east Asia, followed by west Asia. Central Asia
remains low focus area due to ongoing currency headwinds.
Thus, with a favorable business scenario re-emerging in those markets, AJP
intends to get aggressive in these markets.
Covered market growth in Africa and Asia is expected to be 4-5% and 7-8%,
respectively, over next one year.
AJP intends to launch about 25-30 products with 40-45% to be first to market
over the next one year. Further increased traction in existing products would
facilitate better-than-industry growth for AJP in these markets.
The company would maintain its field force strength in both Asia/Africa branded
generics market.
Exhibit 3: Expect Africa business revenue CAGR of 9.4% over FY19-22
53.4
22.6
2.9
3.8
5.0
-31.9
FY19
10.0
8.1
10.0
Africa (INR b)
Growth YoY (%)
4.5
FY15
6.9
FY16
7.1
FY17
7.4
FY18
5.5
FY20E
6.0
FY21E
6.6
FY22E
Source: MOFSL, Company
Exhibit 4: Expect Asia business revenue CAGR of 14.8% over FY19-22
Asia (INR b)
6.3
3.8
4.6
4.2
4.9
5.3
7.1
8.0
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
FY22E
Source: MOFSL, Company
27 February 2020
4
 Motilal Oswal Financial Services
Ajanta Pharma
Other highlights
AJP would be incurring capex of INR1.5-2b in FY21, which would be largely
toward Guwahati (INR250-350m) and maintenance capex of INR1-1.25b. Capex
thereafter (INR1b for FY22) would be mainly incurred toward maintenance.
With capex largely done, the aim would be to improve asset utilization and thus
operating leverage.
Opex associated with third/fourth phase of Guwahati and Pithampur would kick
in from FY21. Accordingly, overall opex would rise by INR300-400m annually.
Exhibit 5: Capex to come down going forward
Capex (INRb)
4.0
3.0
3.0
2.4
1.0
3.0
2.2
1.5
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
FY22E
Source: MOFSL, Company
27 February 2020
5
 Motilal Oswal Financial Services
Ajanta Pharma
Story in charts
Exhibit 6: Expect revenue CAGR of 15.5% over FY19-22
Revenue (INR b)
29.8
22.1
17.8
14.4
20.0
21.3
6.5
20.6
25.4
YoY Gr. (%)
23.5
11.9
28.4
11.5
31.7
34.0
33.6
Exhibit 7: EBITDA margin on gradual recovery
EBITDA margin (%)
34.4
30.3
30.9
27.9
27.2
27.6
27.9
12.2
14.9
17.5
(3.5)
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 8: Expect earnings CAGR of 16% over FY19-22
EPS (INRm)
57.3
47.0
26.4
35.7
53.0
51.5
60.7
69.5
Exhibit 9: RoEs to stabilize in the range of 18.5-19%
ROE…
47.4
44.0
40.9
44.4
36.7
26.0
18.3
18.7
18.9
18.7
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: Inspection at major sites in past one year
Company
Ajanta Pharma
Site
Dahej
Paithan
Inspection timeline
Jun-19
Jun-19
Type
Formulation
API & Formulation
Remarks
VAI issued
VAI issued; Has received
ANDA approval post
inspection
Base business largely
from Aurangabad. New
filings from Bharuch
Source: MOFSL, Company
Business commentary
27 February 2020
6
 Motilal Oswal Financial Services
Ajanta Pharma
Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY14
12,160
29.8
3,688
30.3
439
3,249
87
137
3,299
0
3,299
960
29.1
2,339
2,339
108.6
19.2
FY14
177
5,756
5,933
1,305
230
7,468
4,903
2,109
2,794
936
635
5,130
1,554
2,022
604
949
2,026
1,245
325
455
3,104
7,468
FY15
14,852
22.1
5,052
34.0
516
4,536
59
168
4,645
-85
4,560
1,462
32.0
3,099
3,156
34.9
21.3
FY15
177
8,234
8,411
724
152
9,286
5,499
2,618
2,881
1,702
595
6,286
1,590
2,588
1,368
740
2,177
1,298
188
691
4,108
9,286
FY16
17,494
17.8
5,871
33.6
444
5,426
49
212
5,589
0
5,589
1,433
25.6
4,156
4,156
31.7
23.8
FY16
177
11,732
11,909
814
107
12,829
7,157
2,650
4,507
2,398
860
7,028
2,046
3,724
434
825
1,965
1,650
176
139
5,063
12,829
FY17
20,016
14.4
6,890
34.4
612
6,278
35
239
6,482
0
6,482
1,413
21.8
5,068
5,068
21.9
25.3
FY17
177
15,500
15,677
10
29
15,716
8,949
3,058
5,892
3,393
1,909
7,039
2,110
3,232
713
985
2,516
1,781
562
173
4,524
15,716
FY18
21,309
6.5
6,584
30.9
596
5,988
4
242
6,226
0
6,226
1,539
24.7
4,686
4,686
-7.5
22.0
FY18
175
20,237
20,412
11
244
20,667
14,172
3,646
10,527
613
2,044
11,077
3,506
4,920
932
1,719
3,592
2,852
321
419
7,485
20,667
FY19
20,554
-3.5
5,744
27.9
721
5,024
12
211
5,223
-80
5,143
1,273
24.8
3,870
3,930
-16.1
19.1
FY19
175
22,277
22,452
7
271
22,730
16,152
4,366
11,786
2,613
888
11,357
4,357
4,595
1,005
1,400
3,913
2,251
1,278
384
7,444
22,730
FY20E
25,387
23.5
6,905
27.2
942
5,963
99
457
6,321
-14
6,307
1,766
28.0
4,541
4,551
15.8
17.9
FY20E
175
26,077
26,253
7
271
26,530
19,742
5,309
14,434
2,023
888
14,048
6,177
5,912
230
1,729
4,863
2,810
1,579
474
9,185
26,530
FY21E
28,412
11.9
7,842
27.6
1,043
6,799
99
511
7,212
0
7,212
1,839
25.5
5,373
5,373
18.1
18.9
FY21E
175
30,402
30,578
7
271
30,855
22,810
6,351
16,459
1,855
888
17,078
6,481
7,006
1,656
1,935
5,426
3,128
1,767
531
11,653
30,855
(INR M)
FY22E
31,666
11.5
8,835
27.9
1,109
7,726
99
570
8,197
0
8,197
2,049
25.0
6,148
6,148
14.4
19.4
FY22E
175
35,032
35,207
7
271
35,484
25,394
7,460
17,934
1,471
888
21,223
7,381
7,982
3,704
2,157
6,033
3,472
1,969
592
15,191
35,484
27 February 2020
7
 Motilal Oswal Financial Services
Ajanta Pharma
Financials and Valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Net Debt/Equity
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY14
26.4
31.4
67.1
4.0
17.6
53.0
44.6
20.9
10.2
33.8
0.3
2.8
47.4
38.7
45.9
1.6
47
61
37
0.0
FY14
3,299
439
87
-937
-745
2,142
-18
2,124
-1,878
246
0
97
-1,781
57
-87
-171
0
-201
142
462
604
FY15
35.7
41.5
95.1
6.0
18.9
39.3
33.7
14.7
8.3
24.4
0.4
19.9
44.0
39.0
56.5
1.6
39
64
32
-0.1
FY15
4,560
516
59
-1,461
-817
2,858
-64
2,794
-1,036
1,759
-45
102
-979
-581
-60
-411
0
-1,052
764
604
1,368
FY16
47.0
52.0
134.6
13.9
29.6
29.8
26.9
10.4
7.1
21.2
1.0
3.2
40.9
38.4
54.7
1.4
43
78
34
0.0
FY16
5,589
444
49
-1,615
-1,243
3,224
38
3,262
-2,975
287
-36
-11
-3,022
218
-49
-1,342
0
-1,173
-934
1,368
434
FY17
57.3
64.2
177.2
12.9
22.6
24.4
21.8
7.9
6.2
17.9
0.9
34.8
36.7
35.9
52.1
1.3
38
59
32
-0.2
FY17
6,482
612
35
-1,428
285
5,986
95
6,081
-3,002
3,079
-914
182
-3,734
-746
-35
-1,287
0
-2,068
279
434
713
FY18
53.0
59.7
230.8
0.0
0.0
26.4
23.5
6.1
5.8
18.7
0.0
-1.6
26.0
26.0
33.7
1.0
60
84
49
-0.1
FY18
6,226
596
-238
-1,539
-2,742
2,302
0
2,302
-2,444
-141
-135
241
-2,338
1
-4
b
258
253
218
713
930
FY19
44.4
52.6
253.8
0.0
0.0
31.5
26.6
5.5
6.0
21.4
0.0
6.0
18.3
18.4
21.4
0.9
77
82
40
-0.1
FY19
5,143
721
-199
-1,273
115
4,507
0
4,507
-3,979
528
1,155
211
-2,613
-5
-12
0
-1,804
-1,820
73
931
1,004
FY20E
51.5
62.1
296.8
8.4
16.3
27.2
22.6
4.7
4.9
17.9
0.6
-4.4
18.7
19.0
20.6
1.0
76
85
40
0.0
FY20E
6,307
942
-358
-1,766
-2,518
2,607
0
2,607
-3,000
-393
0
457
-2,543
0
-99
-740
0
-839
-775
1,004
230
FY21E
60.7
72.5
345.7
11.8
19.5
23.1
19.3
4.1
4.3
15.6
0.8
23.3
18.9
19.2
20.3
0.9
83
90
40
-0.1
FY21E
7,212
1,043
-412
-1,839
-1,041
4,962
0
4,962
-2,900
2,062
0
511
-2,389
0
-99
-1,048
0
-1,147
1,426
230
1,656
(INR M)
FY22E
69.5
82.0
398.0
17.2
24.7
20.2
17.1
3.5
3.8
13.6
1.2
35.0
18.7
18.9
20.7
0.9
85
92
40
-0.1
(INR M)
FY22E
8,197
1,109
-471
-2,049
-1,490
5,295
0
5,295
-2,200
3,095
0
570
-1,630
0
-99
-1,519
0
-1,618
2,048
1,656
3,704
27 February 2020
8
 Motilal Oswal Financial Services
Ajanta Pharma
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
27 February 2020
9
 Motilal Oswal Financial Services
Ajanta Pharma
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The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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