16 March 2020
Company Update | Sector: Consumer
Marico
BSE SENSEX
37,577
S&P CNX
10,989
CMP: INR261
TP: INR315 (+21% )
Upgrade to Buy
Sharp correction offers buying opportunity
Upgrade Marico to ‘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 (%)
MRCO IN
1,290
336.7 / 4.5
404 / 235
4/-23/-14
756
40.4
Financials & Valuations (INR b)
Y/E March
2019 2020E 2021E 2022E
Sales
73.3 74.1 80.3 91.4
Sales Gr. (%)
16.0 1.1 8.3 13.9
EBITDA
12.8 14.7 14.2 16.2
EBITDA Margin (%)
17.5 19.9 17.7 17.7
Adj. PAT
9.3 10.5 10.1 11.5
Adj. EPS (INR)
7.2 8.1 7.8 8.9
EPS Gr. (%)
14.3 12.5 -3.7 14.6
BV/Sh.(INR)
23.2 28.8 32.5 35.0
Ratios
RoE (%)
33.6 31.2 25.5 26.5
RoCE (%)
31.0 29.3 24.2 25.1
Payout (%)
76.0 79.4 82.4 72.0
Valuations
P/E (x)
36.2 32.2 33.4 29.2
P/BV (x)
11.2 9.1 8.0 7.5
EV/EBITDA (x)
25.8 21.9 22.6 19.7
Div. Yield (%)
2.5 2.5 2.5 2.5
Shareholding pattern (%)
As On
Dec-19 Sep-19
Promoter
59.6
59.6
DII
9.7
8.8
FII
23.9
25.0
Others
6.8
6.6
FII Includes depository receipts
Stock Performance (1-year)
Marico
Sensex - Rebased
430
370
310
250
After the requisite (albeit admittedly delayed) price action in its largest brand,
Parachute (~30% of sales), Marico’s (MRCO) overall volume growth outlook
appears relatively better than peers, barring HUVR and Nestle.
Further, demand for brands like Parachute, Saffola, VAHO and youth products are
unlikely to be significantly affected by the Coronavirus.
While raw material costs are not declining as they were 6 months ago, near-term
YoY outlook is highly attractive for all its key raw materials, (Copra, LLP, HDPE and
Safflower) due to benign costs. MRCO will also be an incremental beneficiary of
lower packaging costs owing to the ongoing crude cost decline.
The stock has corrected ~35% since we downgraded MRCO to Neutral at the end
of 2QFY20 results due to the company reporting a sharp deceleration in volume
growth, a trend that has well continued in 3QFY20 results as well.
Trailing FY20 valuations of 32.2x FY20E EPS and FY21/FY22 valuations of
33.4x/27.5x FY22E respectively (much lower than 3-year/5-year/10-year average
of 44.8x/42.7x/ 35.2x) offer potential for an upside. CMP of INR261 is at a four
year low. We upgrade the stock to ‘Buy’ with TP of INR315. Given the uncertain
environment, we have attributed a target multiple of 35x, close to its 10-year
average; yet, we have obtained 21% upside on the stock. If we value the company
on its 5-year average, the upside could be ~47%.
Dec-18
59.7
6.0
26.5
7.8
Price reduction in Parachute could provide solace on overall volume
growth:
Despite the sharp reduction in Copra costs in 1HFY20, Marico’s
management did not pass on the benefits during this period,
underestimating the extent of the consumption slowdown. The company
also did not take a sharp price decrease in Parachute as it wanted to utilize
the product’s sharp gross margin gains to funnel ad-spends, which in turn
would boost overall sales and help in scaling up new products. While the
organized segment’s market share in coconut oil was at an all-time high of
61% at end-3QFY20; the delay in price reduction led to Marico losing
market share to the unorganized segment during the few months ending
Dec’19, reversing the trend of gains in recent years. However, the sharp
price reduction (~13% in the 100ml pack and ~5% in the 250ml pack) taken
in Dec’19 brought Parachute’s price close to that of the unorganized
segment, potentially leading to a gradual revival in its volumes from
1QFY21.
Material cost trend remains benign:
While the sharp material cost decline
in Copra prices witnessed in 1HFY20 is over, 3QFY20 still witnessed modest
low single-digit YoY/QoQ increase in costs. In 3QFY20, LLP costs witnessed
16% YoY decline and were flattish QoQ. HDPE costs on the other hand
witnessed 29%/7.2% YoY/QoQ decline. Data in recent months does not
show any reversal of this trend. In fact, with the ongoing sharp reduction in
crude costs, MRCO could gain more on the gross margin front in the coming
months.
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Research analyst: Dhairya Dhruv
(Dhairya.Dhruv@motilaloswal.com); +91 22 6129 1547 |
Pooja Doshi
(Pooja.Doshi@MotilalOswal.com); +91 22 5036 2689
Investors are advised to refer through important disclosures made at the last page of the Research Report.
3 September 2019
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
1
 Motilal Oswal Financial Services
Marico
Other segments admittedly remain work in progress:
While Parachute (~30% of
total sales) is likely to report gradual recovery in volume growth after the price
reductions, recovery in Saffola (13%) witnessed in 3QFY20 is at an early stage
and cannot yet be termed a turnaround. Similarly, category growth slowdown
could continue to impact sales growth prospects in VAHO (20%) for the next
couple of quarters. MRCO’s international business outlook appears stable,
especially in its largest component, Bangladesh (10%). However, the
Coronavirus led impact in Vietnam (6%) is projected to lead ~100bp impact to
the country’s GDP growth. Youth portfolio business growth in India is
discretionary and could take more time to recover compared to the other
segments. MRCO’s brand franchise in this category (its smallest) is also possibly
the weakest.
Compared to other companies of its size, performance over the last 5 years,
while slower than earlier part of the decade, has been much better than peers
that have reported single-digit or declining PAT growth. Nevertheless, over the
past 10 years, the company has delivered healthy CAGR of ~11% in top line, 15%
in EBITDA and 16% in PAT. However, over the past 5 years, growth while healthy
has tapered off with the company’s sales at ~5%, EBITDA at 11% and PAT at
~13%.
Valuation and view:
The stock has corrected nearly 35% since we downgraded
MRCO to Neutral at end-2QFY20 results due to the company reporting a sharp
deceleration in volume growth, a trend that has well continued in 3QFY20
results as well.
Trailing FY20 valuations of 32.2x FY20E EPS and FY21/FY22 valuations of
33.4x/27.5x FY22E respectively (much lower than 3-year/5-year/10-year
average of 44.8x/ 42.7x/35.2x) offers potential for an upside. We upgrade
the stock to
‘Buy’
with TP of INR315. Given the uncertain environment, we
are attributing a target multiple of 35x, close to its 10-year average and yet
we obtain 21% upside on the stock. If we value the company on its 5-year
average, the upside could be ~47%.
Our forecasts are conservative as they assume Copra price inflation in
2HFY21E, and thus, EBITDA margins are expected to reduce by 220bp in
FY21E, leading to a small decline in our EPS forecast. If copra inflation does
not come through, upsides risks to our forecasts are significant.
16 March 2020
2
 Motilal Oswal Financial Services
Marico
Exhibit 1: MRCO reported sharp deceleration in volume growth, a trend that continued in 3QFY20 as well
Volume growth (%)
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
GSK Consumer
Hindustan Unilever
ITC
Jubilant FoodWorks
Marico
Domestic
Parachute
VAHO
Saffola
Pidilite
4Q16
13.0
10.0
3.0
7.0
18.0
MSD
0.0
4.0
0.0
2.9
8.4
7.0
15.0
10.0
6.0
1Q17
11.0
8.0
5.0
4.1
18.0
LDD
(6.0)
4.0
3.0
(3.2)
8.0
7.0
9.0
11.0
9.0
2Q17
12.0
10.0
4.0
4.5
11.0
(MSD)
(3.0)
(1.0)
4.0
4.2
3Q17
2.0
2.0
(12.0)
(5.0)
0.2
(8.0)
(17.0)
(4.0)
(1.0)
(3.3)
4Q17
10.0
2.0
(3.0)
2.4
(1.5)
5.0
(1.0)
4.0
0.0
(7.5)
1Q18
4.0
2.0
(5.0)
(4.4)
(18.0)
(9.0)
0.0
0.0
1.0
6.5
(9.0)
(9.0)
(8.0)
(9.0)
0.0
2Q18
9.0
5.0
(0.9)
7.2
10.0
15.0
2.5
4.0
(6.0)
5.5
8.0
12.0
3.0
12.0
15.0
3Q18
6.0
11.0
12.0
13.0
6.0
15.0
15.0
11.0
(3.0)
17.8
9.4
15.0
8.0
0.0
23.0
4Q18
10.0
11.0
4.0
7.7
8.0
15.0
8.0
11.0
(2.0)
26.5
1.0
(5.0)
11.0
(1.0)
13.0
1Q19
10.0
11.0
4.0
21.0
18.0
10.0
12.8
12.0
1.0
25.9
12.4
9.0
15.0
10.0
20.2
2Q19
11.0
11.0
7.0
8.1
(4.0)
10.0
10.8
10.0
6.0
20.5
6.0
8.0
5.0
5.0
11.0
3Q19 4Q19 1Q20 2Q20 3Q20
21.0 10.0 16.0 14.0 11.0
7.0
7.0
3.0
3.0
3.0
7.0
5.0
4.0
4.0
2.3
12.4 4.3
9.6
4.8
5.6
3.5
0.0
0.0
1.0 (2.0)
0.0
NA
NA
NA
NA
8.0
6.5
5.4
3.6
3.0
10.0 7.0
5.0
5.0
5.0
7.0
8.0
3.0
2.5
2.5
14.6 6.0
4.1
4.9
5.9
5.0
9.0
7.0
2.0
13.0
8.0
6.0
1.0 (1.0)
6.0
9.0 (1.0) (2.0)
1.0
7.0
0.0 (7.0)
18.0 3.0
1.0 11.0
4.0
6.0 (1.0) 2.0
Source: Company, MOFSL
3.0 (4.0) 10.0
(6.0) (1.0) 15.0
11.0 (12.0) 10.0
8.0
6.0
6.0
7.8 (1.5) 7.0
Exhibit 2: Price reduction in Parachute could provide solace on overall volume growth
Movements in MRP in SKUs
PCNO (100ml)
PCNO (250ml)
QoQ & YoY change (%)
PCNO (100ml)
PCNO (250ml)
Dec'18
39
105
Nov'19
39
105
Dec'19
34
100
-12.8
-4.8
Source: Company, MOFSL
Exhibit 3: Material cost outlook remains benign
RM change
YoY %
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
QoQ %
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
Cochin/
Copra Calicut/
Safflower Oil
Kochi Coconut Oil
Kozhikode
Nominal Bombay
40.1
11.0
-18.3
-15.0
-23.6
-12.1
3.2
-3.4
-9.3
-12.4
10.7
-13.1
4.3
2.8
42.0
6.1
-23.0
-18.7
-25.3
-10.0
4.7
-5.6
-12.5
-12.1
11.9
-13.2
5.4
2.2
20.4
22.0
13.3
7.0
2.2
4.7
8.4
4.3
6.0
-2.3
-0.9
-0.5
8.6
1.2
Kardi Oil
Jalna
26.0
-0.7
5.6
11.1
19.8
23.2
40.9
-7.6
-2.7
10.2
12.1
-0.4
0.0
26.1
Rice Bran oil
18.0
14.2
9.7
-0.1
-11.7
-12.3
1.0
9.8
5.7
-8.0
-6.3
-3.0
4.9
5.9
Liquid Paraffin
12.3
26.6
17.8
-3.2
-0.5
-9.2
-16.6
HDPE
22.2
29.3
21.5
-9.2
-21.3
-27.6
-29.4
-1.6
9.4
3.3
2.7
9.3
-4.8
-12.9
-15.2
1.2
-5.2
-5.7
-5.4
0.4
-7.2
Source: Company, MOFSL
16 March 2020
3
 Motilal Oswal Financial Services
Marico
Exhibit 4: Compared to other companies of its size, performance over the last 5 years while slower …
Y/E March
Net Sales
Change (%)
EBITDA
Change (%)
Margin (%)
Profit before Taxes
Change (%)
Margin (%)
Profit after Taxes
Change (%)
Margin (%)
2015
57,330
22.3
8,701
16.4
15.2
8,217
18.2
14.3
5,735
18.1
10.0
2016
60,173
5.0
10,514
20.8
17.5
10,292
27.2
17.1
7,233
26.1
12.0
2017
59,178
-1.7
11,593
10.3
19.6
11,497
11.7
19.4
8,110
12.1
13.7
2018
63,220
6.8
11,370
-1.9
18.0
11,170
-2.8
17.7
8,140
0.4
12.9
2019
73,340
16.0
12,810
12.7
17.5
12,640
13.2
17.2
9,300
14.3
12.7
2020E
5Y CAGR (%)
74,126
5.3
1.1
14,749
11.1
15.1
19.9
470bp
14,219
11.6
12.5
19.2
490bp
10,460
12.8
12.5
14.1
410bp
Source: Company, MOFSL
Exhibit 5: …than earlier part of the decade, has been much better than peers
Y/E March
Net Sales
Change (%)
EBITDA
Change (%)
Margin (%)
Profit before Taxes
Change (%)
Margin (%)
Profit after Taxes
Change (%)
Margin (%)
2010
26,608
11.4
3,751
23.4
14.1
3,076
25.7
11.6
2,414
19.4
9.1
2011
31,283
17.6
4,098
9.2
13.1
3,275
6.5
10.5
2,375
-0.3
7.6
2012
39,682
26.8
4,729
15.4
11.9
4,021
22.8
10.1
3,189
33.5
8.0
2013
45,843
15.5
6,140
29.8
13.4
5,187
29.0
11.3
3,627
15.0
7.9
2014
46,865
2.2
7,477
21.8
16.0
6,946
31.9
14.8
4,854
33.8
10.4
2015
57,330
22.3
8,701
16.4
15.2
8,217
18.2
14.3
5,735
18.1
10.0
5Y CAGR (%)
16.6
2016
60,173
5.0
18.3
10,14
20.8
110bp
17.5
21.7
10,292
27.2
270bp
17.1
18.9
7,233
26.1
90bp
12.0
Source: Company, MOFSL
Exhibit 6: Marico P/E (x)
P/E (x)
Min (x)
50.0
40.0
30.0
20.0
10.0
35.2
26.8
22.4
31.7
Avg (x)
+1SD
43.5
Max (x)
-1SD
Exhibit 7: Consumer sector P/E (x)
55.0
47.0
39.0
31.0
23.0
15.0
23.4
39.7
34.2
28.7
34.3
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
45.8
Source: Company, MOFSL
Source: Company, MOFSL
16 March 2020
4
 Motilal Oswal Financial Services
Marico
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
COGS
Gross Profit
Margin (%)
Operating Expenses
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Other Income - Recurring
Profit before Taxes
Change (%)
Margin (%)
Current Tax (excl MAT Ent)
Deferred Tax
Tax Rate (%)
Minority Interest
Profit after Taxes
Change (%)
Margin (%)
Extraordinary items
Reported PAT
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Capital Employed
Gross Fixed Assets
Intangibles
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Goodwill
Investments
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Current Liabilities
Accounts Payable
Provisions
Net Current Assets
Deferred Tax Liability
Application of Funds
E: MOFSL Estimates
2015
57,330
22.3
31,356
25,974
45.3
17,274
8,701
16.4
15.2
843
230
589
8,217
18.2
14.3
2,383
-15
28.8
-114
5,735
18.1
10.0
0
5,735
2015
1,290
16,958
18,248
137
4,279
22,664
8,807
1,034
-3,973
5,868
30
4,892
2,838
17,625
9,947
1,768
2,049
3,861
8,511
7,471
5,643
1,040
9,115
-79
22,664
2016
60,173
5.0
30,887
29,286
48.7
18,773
10,514
20.8
17.5
949
206
933
10,292
27.2
17.1
2,503
551
29.7
-5
7,233
26.1
12.0
-5
7,228
2016
1,290
18,884
20,174
143
3,313
23,630
6,119
328
-917
5,531
367
4,974
5,439
16,852
9,256
2,521
3,171
1,904
9,953
8,395
6,690
1,558
6,899
421
23,630
2017
59,178
-1.7
28,472
30,706
51.9
19,113
11,593
10.3
19.6
903
166
973
11,497
11.7
19.4
2,922
455
29.4
-10
8,110
12.1
13.7
0
8,110
2017
1,291
21,966
23,257
133
2,388
25,778
7,440
361
-1,749
6,053
112
4,795
6,082
19,191
12,534
2,470
2,360
1,828
10,329
9,040
6,966
1,289
8,862
-125
25,778
2018
63,220
6.8
33,720
29,500
46.7
18,130
11,370
-1.9
18.0
890
160
850
11,170
-2.8
17.7
2,840
60
26.0
-130
8,140
0.4
12.9
0
8,140
2018
1,290
24,140
25,430
120
3,090
28,640
8,120
600
-2,480
6,240
270
4,860
5,430
23,920
15,110
3,400
2,010
3,400
11,880
10,560
8,220
1,320
12,040
-200
28,640
2019
73,340
16.0
40,400
32,940
44.9
20,130
12,810
12.7
17.5
960
240
1,030
12,640
13.2
17.2
3,310
-150
25.0
-180
9,300
14.3
12.7
1,880
11,180
2019
1,290
28,700
29,990
110
3,490
33,590
9,140
550
-3,250
6,440
450
5,030
4,500
29,120
14,110
5,170
5,520
4,320
13,710
12,260
9,440
1,450
15,410
1,760
33,590
2020E
74,126
1.1
38,215
35,911
48.4
21,162
14,749
15.1
19.9
1,332
427
1,229
14,219
12.5
19.2
3,508
71
25.2
-180
10,460
12.5
14.1
0
10,460
2020E
1,290
35,869
37,159
110
3,940
41,209
10,490
605
-4,582
6,513
150
5,130
8,100
35,575
15,567
5,559
9,542
4,906
14,259
12,753
9,738
1,505
21,316
0
41,209
2021E
80,260
8.3
42,863
37,397
46.6
23,227
14,170
-3.9
17.7
1,474
479
1,482
13,699
-3.7
17.1
3,380
68
25.2
-180
10,071
-3.7
12.5
0
10,071
2021E
1,290
40,638
41,928
110
4,390
46,428
11,790
605
-6,056
6,339
150
5,230
10,530
40,300
16,855
6,822
10,945
5,678
16,121
14,640
11,386
1,481
24,179
0
46,428
(INR M)
2022E
91,405
13.9
48,585
42,820
46.8
26,658
16,162
14.1
17.7
1,636
531
1,663
15,659
14.3
17.1
3,863
78
25.2
-180
11,537
14.6
12.6
0
11,537
(INR M)
2022E
1,290
43,874
45,164
110
4,840
50,114
13,090
605
-7,692
6,003
150
5,330
13,689
42,706
18,829
7,312
9,981
6,583
17,762
16,149
12,636
1,613
24,943
0
50,115
16 March 2020
5
 Motilal Oswal Financial Services
Marico
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Int./Div. Received
Depreciation
Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Invest.
Issue of Shares
(Incr)/Decr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOFSL Estimates
2015
4.4
5.0
14.1
1.2
28.1
58.7
52.2
5.9
38.6
18.5
0.5
36.0
27.7
35.7
0.2
2015
8,217
-185
843
39
-2,097
-169
6,648
-581
6,068
410
-2,238
-2,408
6
-437
-3,001
-2,824
-6,255
-2,015
4,064
2,049
2016
5.6
6.3
15.6
3.5
62.4
46.5
41.2
5.5
31.5
16.7
1.3
37.7
31.9
41.5
0.2
2016
10,287
-594
949
206
-2,474
-197
8,176
-864
7,312
-1,180
1,000
-1,044
5
0
-5,023
-992
-6,010
1,122
2,049
3,171
2017
6.3
6.8
18.0
4.3
67.6
41.5
38.1
5.6
28.5
14.5
1.6
37.3
33.3
47.4
0.1
2017
11,487
-43
903
-197
-2,964
-2,698
6,487
-815
5,673
15
-760
-1,560
0
0
-5,088
-652
-5,740
-812
3,171
2,360
2018
6.3
7.0
19.7
4.6
72.4
41.4
37.3
5.3
29.2
13.2
1.7
33.4
30.8
40.7
0.1
2018
11,170
-280
890
-180
-2,950
-3,490
5,160
-1,280
3,880
700
740
160
0
0
-6,360
690
-5,670
-350
2,360
2,010
2019
7.2
9.4
23.2
6.6
76.0
36.2
27.7
4.5
25.8
11.2
2.5
33.6
31.0
40.4
0.1
2019
12,630
-120
960
-300
-3,200
210
10,180
-1,600
8,580
1,030
430
-140
0
0
-6,820
290
-6,530
3,510
2,010
5,520
2020E
8.1
9.1
28.8
6.4
79.4
32.2
28.6
4.4
21.9
9.1
2.5
31.2
29.3
43.1
0.1
2020E
14,219
-1,229
1,332
427
-3,508
-1,884
9,358
-1,105
8,253
-3,600
7,322
2,617
0
450
-8,495
93
-7,952
4,023
5,520
9,543
2021E
7.8
8.9
32.5
6.4
82.4
33.4
29.2
4.0
22.6
8.0
2.5
25.5
24.2
39.4
0.1
2021E
13,699
-1,482
1,474
479
-3,380
-1,460
9,330
-1,300
8,030
-2,430
3,613
-117
0
450
-8,301
41
-7,810
1,403
9,543
10,945
2022E
8.9
10.2
35.0
6.4
72.0
29.2
25.6
3.5
19.7
7.5
2.5
26.5
25.1
42.5
0.1
(INR M)
2022E
15,659
-1,663
1,636
531
-3,863
-1,729
10,571
-1,300
9,271
-3,159
785
-3,674
0
450
-8,301
-11
-7,862
-965
10,945
9,980
16 March 2020
6
 Motilal Oswal Financial Services
Marico
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
16 March 2020
7
 Motilal Oswal Financial Services
Marico
********************************************************************************************************************************
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.
16 March 2020
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