Motilal Oswal Financial Services

31 March 2020

Update | Sector: Exchanges

MCX

BSE SENSEX

29,468

S&P CNX

8,598

CMP: INR 1,131

TP: INR 1,400 (+24%)

Buy

Key beneficiary of global market volatility



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 (%)

MCX IN

57.7 / 0.7

1442 / 762

11/42/64

688

100.0



Financials Snapshot (INR b)

Y/E Mar

2020E 2021E 2022E

Sales

3.8

4.4

5.1

EBIT Margin (%)

39.9 39.1 40.7

PAT

2.4

2.2

2.9

EPS (INR)

46.7 44.0 56.0

EPS Gr. (%)

63 (5.7)

27.1

BV/Sh. (INR)

269

292

320

Ratios

RoE (%)

18.2 15.7 18.3

RoCE (%)

17.6 15.3 17.8

Payout (%)

51.8 68.6 54.0

Valuations

P/E (x)

23.7 25.1 19.8

P/BV (x)

4.1

3.8

3.5

EV/EBITDA (x)

26.3 23.7 18.8

Div Yield (%)

2.2

2.7

Shareholding pattern (%)

As On

Dec-19 Sep-19 Dec-18

Promoter

DII

FII

Others

0.0

35.6

34.1

30.3

0.0

36.9

32.0

31.0

0.0

38.1

31.3

30.7



Total value of contracts traded on MCX increased strongly by ~44% YoY in 4QFY20.

This was significantly ahead of our earlier estimate and largely led by heightened

uncertainty and volatility in the global markets. Gold/silver/crude reported strong

growth of ~120%/133%/60% YoY in traded value.

Against the backdrop of COVID-19 outbreak, trading at MCX was truncated to eight

hours (v/s 14 hours earlier), making it out of sync with the global commodity markets.

This led to a sharp ~80% drop in traded value (v/s monthly average till 25

Mar’20). In

our base case, we expect the restrictions to continue till end-Apr’20, materially

impacting revenue growth/EBITDA margins (0%/16% QoQ contraction) for 1QFY21.

Nevertheless, the medium-term prospects of MCX remain robust. Cues from the GFC

period hint at increased interest in precious metals over a 2-3 year period following

crisis/market volatility. COVID-19-led slowdown in global growth, soft interest rates

and liquidity injections should be the key factors driving interest in gold/silver this

time. Normalization of margin requirements in the crude segment is likely to drive

continued strength in volume growth.

Over FY21-22, we expect strong revenue growth of 14-18% and stable EBITDA margin

of 42-44%, notwithstanding the COVID-19 impact on 1QFY21 operations. We upgrade

our EPS estimate by 5-7% over FY21-22 to factor in the increase in volumes led by

global market volatility. We continue liking the company for its near monopoly in the

commodity exchanges segment in India. Reiterate Buy.

Global market volatility drives sharp increase in activity in Feb/Mar’20

Total value of contracts traded on MCX increased strongly by ~44% YoY in 4QFY20

(data considered only till 30

March 2020). This was significantly ahead of our

earlier estimate and largely led by heightened uncertainty and volatility in the global

markets. Precious metals like gold and silver reported a robust increase of

~120%/133% in total value of contracts traded. Volatility in crude prices led to a

surge in speculation activity translating into ~60% YoY growth in traded value

During the quarter, while growth in traded value of gold and silver was more

pronounced in Feb and March, it was more front ended for crude (toward Jan and

Feb) due to the sharp fall in crude prices. Most of the base metals continued to

show a trend of decline (YoY) due to the compulsory delivery rule, which impacted

the interest levels of speculators and arbitrageurs.

FII Includes depository receipts

Stock Performance (1-year)

Multi Comm. Exc.

Sensex - Rebased

1,600

Expect COVID-19 disruption in the near term

Against the backdrop of the three-week lockdown imposed in the country, trading

at MCX is truncated to 8 hours per trading day (v/s 14 hours earlier) from 30

March to 14

April 2020. This makes the timings of the Indian commodity markets

largely out of sync with those of the global commodity markets/news flows. Our

interactions with commodity market experts suggest this limitation should have a

material negative impact on speculation/investment appetite on MCX.

1,300

1,000

700

400

Sudheer Guntupalli – Research analyst

(Sudheer.Guntupalli@MotilalOswal.com); +91225036 2749

Research analyst –Mohit Sharma

(Mohit.Sharma@MotilalOswal.com); +91226129 1531 /

Heenal Gada

(Heenal.Gada@MotilalOswal.com); +91225036 2654

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.

MCX

Post this change, a look at the total contract value traded suggests a sharp ~80%

drop (v/s monthly average till 25

March 2020). It was a broad-based decline across

all important asset classes (84%/76%/80% drop in gold/silver/crude). In the base

case, we expect the restrictions on trading hours to extend till the end of Apr’20.

However, as trading returns to the normalized duration of 14 hours/day, we expect

a recovery in volume growth.

Medium-term prospects robust

Recent volatility in global markets further underscores the need for diversification

into alternate assets like gold and silver. Cues from the GFC period hint at an

increased interest in precious metals over a 2-3 year period following the crisis/

market volatility. For instance, gold prices rallied ~170% in the three-year period

(2009-12) subsequent to the GFC. COVID-19 led slowdown in global growth, soft

interest rates across economies and massive liquidity injections by central banks

should be the key factors driving the interest this time.

Over the previous two months, growth in traded value in crude decelerated

(67%/87%/24% in Jan/Feb/Mar YoY). This was largely driven by the sharp decline in

crude prices over this period. This price decline was accompanied by a strong

increase in the margin requirements (~47-48% v/s 8-10% normally), further

impacting volumes. Nevertheless, it is key to note that the traded value in Mar’20

still reported a robust growth of ~24% YoY. Normalization of margin requirements

should drive continued strength in crude volume growth on MCX.

Base metals continue to report declines, largely led by the compulsory delivery rule,

which impacted the interest levels of speculators and arbitrageurs. This was further

complicated by the limitations on delivery capacity and shutdown of Vedanta’s

copper complex which resulted in a shortage of the metal in the domestic market.

Our interactions with the commodity market experts suggest this segment will take

time to recover. Interest from SMEs, increase in delivery capacity for metals and

liquidity concentration measures by the exchange (e.g. through single contract for

each metal) should drive a recovery in this segment over the medium term.

Despite the one-off near-term impact on 1QFY21E (0% YoY revenue growth), we

expect strong ~14%/18% revenue growth over FY21/22, primarily led by precious

metals and crude. Notwithstanding the sharp EBITDA margin contraction expected

in 1QFY21 (33% v/s 49% in 4QFY20E), we expect the EBITDA margins over the next

two years to remain largely stable (in the range of ~42%-44%).

Valuation view: To be key beneficiary of global market volatility

We upgraded our EPS estimate over FY21-22 by 5%-7% to factor in the increase in

volumes led by the global market volatility. We continue liking the company for its

near monopoly in the commodity exchanges segment in India. Over the course of its

listed history, one-year forward P/E multiples averaged ~25x. Our target price

implies 25x FY22E EPS. Reiterate Buy.

31 March 2020

MCX

Story in Charts

Exhibit 1: Strong increase in overall traded value

Overall (YoY)

36%

17%

40%

18%

Exhibit 2: Sharp increase in traded value of gold…

Gold (YoY)

44%

59%

18%

131%

53%

71%

120%

Source: Company, MOFSL. Note: Values updated till 30 March.

Exhibit 3: Strong increase in traded value of crude

Crude Oil (YoY)

78%

88%

52%

32%

60%

Exhibit 4: Sharp increase in traded value of silver

Silver (YoY)

133%

102%

74%

20%

49%

Source: Company, MOFSL. Note: Values updated till 30

March.

Source: Company, MOFSL. Note: Values updated till 30

March.

Exhibit 5: Base metals witnessed continued decline…

Aluminium (YoY)

Exhibit 6: …in traded value

Copper (YoY)

29%

-7%

-19%

-3%

-75%

-71%

-70%

-79%

-18%

-25%

-28%

-38%

Source: Company, MOFSL. Note: Values updated till 30

March.

Source: Company, MOFSL. Note: Values updated till 30

March.

Exhibit 7: Base metals witnessed continued decline in…

Lead (YoY)

-10%

Exhibit 8: …traded value with the exception of Nickel

Nickel (YoY)

117%

68%

-15%

-30%

-52%

-67%

23%

-82%

-18%

-33%

Source: Company, MOFSL. Note: Values updated till 30 March.

31 March 2020

MCX

Exhibit 9: Decline in base metals continued

Zinc (YoY)

10%

12%

Exhibit 10: Growth in traded value moderated in March

Overall (YoY)

45%

38%

21%

25%

50%

42%

39%

-50%

-61%

-79%

10%

Source: Company, MOFSL. Note: Values updated till 30 March.

Exhibit 11: Strong increase led by market volatility

Gold (YoY)

193% 200%

151%

100%

61%

63%

54%

97% 105%

Exhibit 12: Sharp fall in prices impacted growth in Mar-20

Crude Oil (YoY)

103%

71%

91%

87%

70%

45%

44%

24%

67%

Source: Company, MOFSL. Note: Values updated till 30

March.

Source: Company, MOFSL. Note: Values updated till 30

March.

Exhibit 13: Strong increase led by market volatility

SIlver (YoY)

139%

114%

73%

86%

146%

Exhibit 14: Base metals remained in decline mode

Aluminium (YoY)

125%

97%

84%

-60%

-76% -76% -74%

-60%

-70%

-78%

-72%

65%

-85%

Source: Company, MOFSL. Note: Values updated till 30

March.

Source: Company, MOFSL. Note: Values updated till 30

March.

Exhibit 15: Base metals remained in decline mode

Copper (YoY)

-11%

-23%

-40%

-38%

-43%

-25%

-22%

Exhibit 16: Base metals remained in decline mode

Lead (YoY)

-42%

-52%

-61% -64%

-67%

-71%

-85%

-81% -80%

-34%

-35%

Source: Company, MOFSL. Note: Values updated till 30 March.

31 March 2020

MCX

Exhibit 17: Except Nickel, base metals largely remained…

Nickel (YoY)

224% 231%

Exhibit 18: …in a decline mode

Zinc (YoY)

-46%

-48%

77%

27%

34%

-1%

33%

71%

-55%

-63%

-59%

-62%

-78%

-75%

-82%

Source: Company, MOFSL. Note: Values updated till 30

March.

Source: Company, MOFSL. Note: Values updated till 30

March.

Exhibit 19: Over the course of its listed history, one year forward P/E multiple of MCX averaged to ~25x

P/E

Source: Bloomberg, MOFSL

31 March 2020

MCX

Financials and valuations

Income statement

Y/E March

Sales

Change (%)

Cost of Services

SG&A Expenses

Provisions

EBITDA

% of Net Sales

Depreciation

Interest

Other Income

EO Item (net)

PBT

Tax

Rate (%)

PAT

Extraordinary

Net Income

Change (%)

FY14

3,407

(34)

935

1,014

1,457

343

993

2,097

569

1,528

(52)

FY15

2,225

(35)

733

616

876

259

1,098

1,701

450

1,251

(18)

FY16

2,349

779

804

766

246

977

667

831

413

418

(67)

FY17

2,641

1,071

726

844

186

1,164

1,821

512

1,309

213

FY18

2,580

(2)

1,174

691

715

167

917

1,465

383

1,081

(17)

FY19

3,000

1,338

723

940

154

986

238

1,533

1,458

FY20E

3,829

1,464

670

1,695

168

1,283

2,808

426

2,382

FY21E

4,352

1,556

958

1,837

162

999

2,674

428

2,246

(6)

(INR m)

FY22E

5,142

1,532

1,356

2,253

183

1,328

3,398

544

2,854

Balance Sheet

Y/E March

Share Capital

Reserves

Net Worth

SGF

Loan & other long term liab.

Capital Employed

Net Block

CWIP

Other LT Assets

Investments

Curr. Assets

Current Investments

Debtors

Cash & Bank Balance

Loans & Advances

Other Current Assets

Current Liab. & Prov

Net Current Assets

Application of Funds

(INR m)

FY14

510

10,931

11,441

1,720

449

13,610

1,735

281

132

15,267

10,766

3,417

676

319

3,805

11,462

13,610

FY15

510

11,512

12,022

1,871

343

14,236

1,553

281

132

16,278

12,795

107

2,655

456

265

4,007

12,271

14,236

FY16

510

11,529

12,039

1,879

282

14,201

1,430

281

2,230

14,227

8,511

5,003

268

404

3,967

10,260

14,201

FY17

510

13,078

13,588

1,705

420

15,713

1,633

281

4,404

12,340

7,544

3,890

875

2,945

9,395

15,713

FY18

510

13,253

13,763

1,806

408

15,977

3,624

281

5,316

10,393

8,878

596

854

3,636

6,757

15,977

FY19

510

11,999

12,509

3,298

414

16,221

3,451

281

4,839

12,175

5,824

5,346

943

4,524

7,651

16,221

FY20E

510

13,210

13,720

3,298

414

17,432

3,570

281

4,839

13,803

5,824

125

6,483

1,359

5,060

8,743

17,432

FY21E

510

14,352

14,862

3,298

414

18,575

3,808

281

4,839

14,963

5,824

145

7,406

1,575

5,316

9,647

18,575

FY22E

510

15,804

16,314

3,298

414

20,026

4,025

281

4,839

16,408

5,824

165

8,610

1,794

5,527

10,881

20,026

31 March 2020

MCX

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

Book Value

DPS

Payout %

Valuation (x)

P/E

Cash P/E

EV/EBITDA

EV/Sales

Price/Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

RoIC

Turnover Ratios

Debtors (Days)

Fixed Asset Turnover (x)

FY14

30.0

36.9

225.4

10.2

39.0

36.9

30.0

29.0

12.4

4.9

1.1

13.3

12.8

(145.9)

FY15E

24.6

29.6

235.8

10.2

48.5

45.0

37.4

47.0

18.5

4.7

1.1

10.7

10.4

(50.7)

FY16

23.4

13.0

236.1

47.4

85.0

56.3

18.4

4.7

3.5

8.8

(99.5)

FY17

24.8

29.3

266.4

15.3

70.7

44.6

37.7

53.7

17.2

4.2

1.6

10.2

10.0

19.1

FY18

21.2

24.5

269.9

17.3

97.0

52.2

45.2

66.2

18.3

4.1

1.9

7.9

7.7

7.5

FY19

28.7

31.6

245.3

20.4

84.6

38.6

35.0

48.6

15.2

4.5

2.2

11.1

12.5

12.9

FY20E

46.7

50.0

269.1

20.4

51.8

23.7

22.1

26.3

11.6

4.1

2.2

18.2

17.6

25.4

FY21E

44.0

47.2

291.5

25.5

68.6

25.1

23.4

23.7

10.0

3.8

2.7

15.7

15.3

26.9

FY22E

56.0

59.6

319.9

25.5

54.0

19.8

18.6

18.8

8.2

3.5

2.7

18.3

17.8

31.8

Cash Flow Statement

Y/E March

CF from Operations

Cash for Working Capital

Net Operating CF

Net Purchase of FA

Free Cash Flow

Net Purchase of Invest.

Net Cash from Invest.

Proc. from equity issues

Proceeds from LTB/STB

Dividend Payments

Cash Flow from Fin.

Others

Net Cash Flow

Opening Cash Bal.

Add: Net Cash

Closing Cash Bal.

FY14

1,949

(1,565)

385

(59)

325

586

527

(1,133)

(221)

3,475

(221)

3,255

FY15

849

503

1,352

(1,250)

102

(850)

(2,100)

(748)

3,417

(748)

2,669

FY16

793

815

(1,250)

(435)

2,783

1,533

2,348

2,655

2,348

5,003

FY17

804

(1,251)

(447)

(1,250)

(1,697)

586

(664)

(1,111)

5,003

(1,111)

3,892

FY18

837

767

1,604

(1,250)

354

(3,647)

(4,897)

(3,292)

3,890

(3,292)

597

FY19

1,624

2,300

3,924

(1,250)

2,674

2,075

825

4,750

596

4,750

5,346

FY20E

2,133

2,178

(1,250)

928

1,180

(70)

(925)

1,183

5,346

1,183

6,529

FY21E

2,527

2,546

(1,250)

1,296

964

(286)

(1,104)

1,156

6,483

1,156

7,639

(INR m)

FY22E

3,278

(31)

3,247

(1,250)

1,997

1,240

(10)

(1,403)

1,835

7,406

1,835

9,241

31 March 2020

MCX

NOTES

31 March 2020

MCX

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 rep orts. 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

***************************************************************************************

*****************************************

31 March 2020

MCX

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.

31 March 2020