2 June 2020
Update | Sector: Automobile
Mahindra and Mahindra
BSE SENSEX
33,826
S&P CNX
9,979
CMP: INR463
TP: INR576 (+25%)
Buy
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A generational shift underway
Best rural proxy | Valuations at discount to 1SD below 5-yr average P/E
Mahindra & Mahindra’s (MM) senior leadership is in midst of a generational shift, at
a time when all its key businesses are facing cyclical or structural challenges.
While the cycle for tractors should turn positive in the near term and for LCVs too in
the not so distant future, the new CEO would have to address two major issues – (a)
restore its positioning in the fast growing SUV segment, and (b) circumvent the drag
of underperforming subsidiaries in the core/non-core businesses.
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
MM IN
1,209
575 / 7.6
675 / 246
26/4/-14
2288
We believe MM’s valuations reflect the challenges of the Passenger UV business as
well as no major changes on capital allocation policy.
Any positive surprises in the SUV business, positive evolution of the Ford India JV or
correction of capital allocation by the new CEO should act as re-rating triggers.
Financials & Valuations (INR b)
Y/E MARCH
2020 2021E 2022E
Sales
451
416
482
EBITDA
55.4
45.5
61.6
Adj. PAT*
35.1
25.9
37.6
Adj. EPS (INR)
29.5
21.7
31.5
EPS Gr. (%)
-31.5 -26.3
45.1
BV/Sh. (INR)
312
322
342
Ratios
RoE (%)
10.1
6.3
8.8
RoCE (%)
9.5
6.1
8.4
Payout (%)
33
58
40
Valuations
P/E (x)
15.7
21.3
14.7
P/BV (x)
1.5
1.4
1.4
Div. Yield (%)
2.2
2.2
2.2
FCF Yield*
2.7
5.8
6.4
*(incl MVML)
Shareholding pattern (%)
As On
Mar-20 Dec-19 Mar-19
Promoter
18.9
18.9
20.4
DII
26.9
23.2
22.5
FII
41.3
41.4
39.2
Others
12.9
16.6
17.9
FII Includes depository receipts
Stock Performance (1-year)
M&M
Sensex - Rebased
760
Management change – A generational shift underway
After a gap of almost 24 years, MM would see a leadership change with both
Executive Chairman (Mr. Anand Mahindra) and MD & CEO (Dr. Pawan Goenka)
retiring in 2021. Dr. Anish Shah would take over as MD & CEO from 2
nd
Apr’21,
in turn becoming the 5
th
MD of MM over the last 40 years.
Dr. Shah’s priorities seem clearly set out for the next few years, which includes
(a) revisiting capital allocation in subsidiaries (over next 12 months), (b) funding
of other group businesses, and (c) evaluating segregation of auto and FES
business (over next 3-5 years).
We believe there are several low hanging fruits in the form of loss-making
non-core businesses (Aerospace, Global 2Ws, Retail etc.), which could be
divested or closed. The initial signs on capital allocation are positive as is
visible from the MM board’s decision against investing a further USD406m in
Ssangyong in Apr’20; this, despite giving an approval earlier in Feb’20.
MM has one of the highest exposures to rural markets (~65% of volumes),
which are expected to be less impacted by the on-going impact of the COVID-
19 pandemic. According to our estimates, rural markets should contribute
~62% to revenues, 81% to core PAT and ~70% to SOTP in FY22E.
We have slotted MM’s core business into three buckets viz. Tractors, Pick-up
UVs and Passenger UVs. Tractors and Pick-up UVs are on strong footing in
terms of outlook, MM’s competitive positioning as well as industry-level
consolidation. However, MM’s SUVs business is severely challenged and we do
not see any respite for MM in this category in the foreseeable future.
Best rural proxy with 2 of 3 core businesses on strong footing
680
600
520
440
Tractors primed for fastest recovery in Autos |Reforms to potentially drive
next phase of farm mechanization
The Tractor segment is seeing volume recovery since Dec’19, driven by
improvement in farm-level indicators such as output prices, lower input prices,
higher government spends in rural areas and unusually strong water reservoir
Jinesh Gandhi - Research analyst
(Jinesh@MotilalOswal.com); +91 22 6129 1524
Vipul Agrawal - Research analyst
(Vipul.Agrawal@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.
3 September 2019
1
 Motilal Oswal Financial Services
Mahindra and Mahindra
levels. Further, good Rabi crop and expected normal monsoons has further
improved the outlook for farm income.
The supply side getting back in shape post lifting of restrictions (expect
normalized production by Aug’20) also augurs well for the Tractor segment’s
volume recovery from Sep’20.
We do not expect any material change in either the competitive landscape or
MM’s positioning in this highly consolidated industry (top-4 player controlling
over 80% of the market). We estimate Tractor industry volumes to be flat in
FY21E (due to supply-side constraints) and grow 12-14% in FY22E, with MM also
growing in line.
Looking beyond the cyclical downturn, we believe fundamentals of the LCV
segment are strong. Also, LCVs should continue to benefit from the increasing
emergence of the ‘hub and spoke’ model. We estimate the LCV industry to
deliver 8-10% CAGR over the next 5 years.
MM enjoys market share of ~42.5% in the overall LCV segment and ~65% in the
2-3.5 ton LCV segment.
Under BS6, MM’s Pick-up business’ competitive positioning should improve v/s
SCVs/LCVs due to lower price inflation. While near-term volumes would be
impacted due to COVID-19 and BS6 transition, we estimate volume CAGR of
7.5% over FY20-22E.
MM’s positioning in LCVs to further strengthen under BS6
Competitive intensity in fast-growing SUV segment to stay high, MM
remains vulnerable
While MM is trying to catch up with competition on the products side, we see
limited visibility for MM to make a comeback. Over the next 12-18 months, the
company has several upgrades and new launches lined-up viz. (a) e-KUV100
(1HFY21), (b) new Thar (1HFY21), (c) new XUV500 (4QFY21), (d) new Scorpio
(1QFY22), and (e) e-XUV300 (mid-CY21).
We have not built in benefits of any imminent launches or material benefit on
product development from MM’s recent JV with Ford India. We estimate
passenger UV volumes to decline ~1% CAGR over FY20-23E.
Despite MM’s recent outperformance, valuations are still at substantial discount
to its 5-year average (which captures both pain point of deterioration in UV
market share and subsidiaries’ performance).
Implied Core P/E for MM is ~15.4x/10.6x FY21/22E Core EPS and 1x/1x Core
P/BV, which implies ~25% discount to 1SD below 5-year average P/E and ~30%
discount to 1SD below 5-year average P/B.
We are lowering our EPS for FY21/22E by ~22%/4% to factor in the supply- side
issues for Tractors and weaker volumes for Autos in FY21. We are now building
in volume growth of 0%/12% for Tractors, -20%/22% for LCVs and -17%/10% for
SUVs for FY21/22E.
Our Jun’22E-based SOTP TP is ~INR576/share – an upside of ~25%. At our TP,
implied Core P/E is ~13.6x (v/s 5-year average core P/E of ~15.9x and 10-year
average of ~14.3x). Maintain
Buy.
Valuation and view
2 June 2020
2
 Motilal Oswal Financial Services
Mahindra and Mahindra
Management change – A generational shift underway
Who’s Dr. Anish Shah?
Prior to joining MM, Dr.
Shah was President and
CEO of GE Capital India,
where he played a key role
in many avenues, especially
in the turnaround of the
company’s SBI Card JV. In
his 14-year stint with GE
Capital, Dr. Shah held
leadership positions in the
US and other global
business units. Dr. Shah
holds a PhD in Corporate
Governance from Carnegie
Mellon’s Tepper School of
Business. He also has a
Master’s Degree from
Carnegie Mellon and an
MBA degree from IIM-
Ahmedabad.
After a gap of almost 24 years, MM would see a leadership change with both
Executive Chairman (Mr. Anand Mahindra) and MD and CEO (Dr. Pawan
Goenka) due for retirement in 2021. Dr. Anish Shah would take over as MD and
CEO from 2
nd
Apr’21, in turn becoming the 5
th
MD of MM in the last 40 years.
Dr. Shah joined MM in Aug’14 as President, Group Special Projects; thereafter,
he took over as the company’s Group Strategy Head in Apr’15. In Apr’20, he
was appointed as Deputy MD and Group CFO. This makes Dr. Shah probably
the first ‘quasi-laterally’ hired MD in MM’s history, as his predecessors have
spent multiple decades in the group before taking over as MD.
The timing of this leadership transition could not have been more challenging;
MM is in midst of the perfect storm – highly challenging macros, record-low
market share in SUVs, technological changes/disruptions, deteriorating
performance of non-core subsidiaries (PAT of MM+MVML > Consol. PAT), etc.
Since taking over as Deputy MD and Group CFO, Dr. Shah has clearly set out his
priority for the next few years, which includes (a) revisiting capital allocation in
subsidiaries (over the next 12 months), (b) funding of other group businesses,
and (c) evaluating segregation of auto/FES business (over the next 3-5 years).
We believe there are several low-hanging fruits in the form of loss-making non-
core subsidiaries (Aerospace, Global 2Ws, Retails, etc.) that could be divested
or closed, which would immensely help reduce the drag on consol. profits.
Besides low-hanging fruits in non-core businesses, hard decisions are required
on under-performing and/or loss-making businesses in core areas like
Ssangyong, overseas subsidiaries in Autos and tractors, etc. Also, there is a
need to look at non-core businesses, which are not significant or do not have
the right to win in MM’s area of operations.
The initial signs on capital allocation are positive as is visible from the MM
board’s decision against investing a further USD406m in Ssangyong in Apr’20;
this, despite giving an approval earlier in Feb’20.
th
Exhibit 1: Dr. Anish Shah would take over as MD and CEO from Apr’21 – Dr. Shah is the 5 MD of MM in last 40 years
Source: Company, MOFSL
2 June 2020
3
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 2: Dr. Anish Shah’s (new MD from Apr’21) clear set of priorities
Source: MOFSL
Exhibit 3: On aggregate basis, subsidiaries have been a drag on consol. PAT (INR b) and RoEs (%)
Adj. MM+MVML PAT
Adj. Cons. PAT
8.6
-2.3
-0.9
-1.2
-3.4
Profit contbn from subs
MM+MVML
Consol
-19.3
FY15
FY16
FY17
FY18
FY19
9MFY20
FY15
FY16
FY17
FY18
FY19
9MFY20
Source: Company, MOFSL
Exhibit 4: Classification of all relevant businesses in 5 buckets show scope for rationalization
Core
(profitable)
•Tractors
•Autos
•Pick-ups/LCV
•SUVs
•NBFC
Core
(loss making)
•Tractor exports
•Agri Implements
•Agri
•Auto Exports
•Ssangyong
Adjacencies
•Power back-up
•Used cars
•Auto Engg.
•Steel Processing
•Defence
Non-Core
(Self sustaining)
•IT
•Hospitality
•Real Estate
•Logistics
•Clean Power
Non-Core
(Loss making)
•2W - Jawa
(India)
•2W - Peugeot
(Global)
•Aerospace
•Retail
•AMC
•Boats
Source: MOFSL
2 June 2020
4
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 5: Analysis of key subsidiaries suggests several low-hanging fruits to reduce losses
INR Mn
Name of Subsidiary/JV/Associate
Aerospace
Retail
Clean Power
2Ws - Overseas
2Ws - Domestic
Defence
Hospitality
Logistics
Real Estate
Steel Processing
Agri
BFSI
MMFSL
Mahindra Rural Housing Finance Limited
Mahindra Insurance Brokers Limited
Mahindra Asset Management Company
Mahindra–BT Investment Company
(Mauritius)
Key to Color Coding
FY19
Gross Sales
1,641
29,001
333
3,382
22,389
39,132
14,400
19,985
11,422
PAT
-227
729
-181
169
773
812
1,518
909
-944
1,357 -3,880
FY18
Gross Sales
1,365
0
9
0
0
0
0
0
4,387
234
0
0
0
234
0
PAT
-395
0
-12
0
0
0
0
0
-633
-381
0
0
0
-381
0
1,060 -3,700
10,888 -6,250
1,284 -3,071
105,481 18,415
88,098 15,571
13,840
3,234
281
28
2,505
715
-395
20
Core or Supplement to core
Non-Core but self sustaining
Non-Core & value destructive currently
Source: Company, MOFSL
2 June 2020
5
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 6: Core Auto and FES business subsidiaries (excl. MVML) also have several hot spots that need addressing
INR Mn
Name of Subsidiary/JV/Associate
A] Autos Subsidiaries (Ex MVML)
Mahindra Heavy Engines Limited
Mahindra Trucks and Buses Limited
Mahindra North American Technical Center
Mahindra Electric Mobility Limited
Mahindra First Choice Wheels Ltd
Mahindra First Choice Services Limited
Ssangyong Motor Company
M&M South Africa (Proprietary)
Mahindra Vehicle Sales and Service Inc.
Zoomcar Inc
Mahindra Automotive North America Inc.
Automobili Pininfarina GmbH
Total Autos
B] Farm Equipment Subsidiaries
Swaraj Engines
Gromax Agri Equipment Limited
Erkunt Sanayi A.S.
Erkunt Traktor Sanayii A.S. #
Hisarlar Makina Sanayi ve Ticaret Anonim
Mitsubishi Mahindra Agricultural Machinery
Sampo Rosenlew Oy
Trringo.com Limited
Mahindra USA Inc.
Mahindra do Brasil Industrial Ltda
Mahindra Mexico S. de. R. L
Total FES
Key to Colour Codes
Core business
FY19
Gross Sales
10,792
2,003
3,494
2,513
2,280
1,136
226,000
6,236
3,370
NA
838
0
258,663
NA
1,477
5,787
3,434
2,517
NA
NA
19
23,181
532
342
37,289
PAT
526
26
-80
-530
-146
-355
-3,797
-218
-1,269
-263
-302
-1,009
-7,416
275
11
485
-468
-782
-363
-574
-77
-5,493
-259
-219
-7,463
FY18
Gross Sales
0
0
454
1,294
1,426
926
213,202
6,364
73
0
0
223,738
0
0
0
6,459
1,483
PAT
0
0
-907
-1,290
Business
Autos
Autos
Autos - Engineering
Autos (EV)
-319 Autos - Used car dealers
-404 Autos - Used car dealers
-5,484
-17
-258
0
0
-8,678
0
0
0
-732
-1,616
FES - Tractors
FES - Tractors
FES - Implements
FES - Implements
FES - Implements
FES - Implements
FES - Implements
Autos - Overseas
Autos - Overseas
Autos - Overseas
Autos - Car rentals
Autos - Overseas
Autos - Overseas
0
37,376
474
288
46,079
0
224
-128
-41
-2,294
FES - Others
FES - Tractors USA
FES - Tractors
FES - Tractors
Strategic but loss making
Adjacent but loss making
Source: Company, MOFSL
Best proxy on rural – 2 of 3 core businesses on strong footing
In the Indian auto sector, MM has one of the highest exposures to rural
markets (~65% of volumes), which are expected to be less impacted by the on-
going impact of the COVID-19 pandemic. Also, MM is relatively better
positioned for faster recovery in rural markets due to (a) limited impact on
Tractor demand, and (b) its passenger UVs (Bolero, Scorpio, etc.) being highly
popular in rural areas.
According to our estimates, rural markets should contribute ~62% to revenues,
81% to core PAT and ~70% to SOTP in FY22E.
While MM’s strength in the Tractor business is highly appreciated by investors,
concerns around its Auto business (due to weakening position in SUVs) exist.
MM’s SUV segment challenges are garnering disproportionate mindshare of
investors, despite it contributing <30% to the top line and <10% to core PAT.
2 June 2020
6
 Motilal Oswal Financial Services
Mahindra and Mahindra
We have slotted MM’s core business into three buckets viz. Tractors, Pick-up
UVs and Passenger UVs. Tractors and Pick-up UVs are on strong footing in
terms of outlook, MM’s competitive positioning as well as industry-level
consolidation. However, MM is severely challenged in the SUV segment and
we do not see any respite for MM in this category in the foreseeable future.
Exhibit 8: …with over 80% of core PAT attributable to rural
markets
Rural contribution (%, FY22E)
90
80
62
81
Exhibit 7: MM – one of the best rural proxies in large caps
(% of volumes)…
MSIL
HMCL
MM
ESC
55
39
65
MSIL
HMCL
MM
ESC
Revenue
PBIT
Core PAT
Source: Company, MOFSL
Source: Industry, MOFSL
Exhibit 9: Of the 3 core businesses, Tractors and LCVs (<3.5 tons) are on firm footing and contribute ~84% to core PAT
Dom. Mkt Sh (%)
41
46
Tractors
15
LCVs (<3.5T)
7
11
18
64
34
Revenue
Contribution (%)
PBIT Contribution PAT Contribution (%)
(%)
Source: Company, MOFSL
SUVs
Others
7
8
18
28
19
23
66
Tractors
LCVs (<3.5T)
SUVs
Tractors primed for fastest recovery in Autos |Reforms to
potentially drive next phase of farm mechanization
The Tractor segment is seeing volume recovery since Dec’19, driven by
improvement in farm-level indicators such as output prices, lower input prices,
higher government spends in rural areas and unusually strong water reservoir
levels. However, the COVID-19 related lockdown has put brakes on the
recovery due to supply-side disruption.
Further, good Rabi crop and expected normal monsoons has further improved
the outlook for farm income. Also, factors that impacted demand last year viz.
low/no subsidy for tractors in certain states and weakness in infra (10-15% of
tractor usage), are also showing initial signs of normalization. Thus, supply side
getting back in shape post lifting of restrictions (expect normalized production
by Aug’20) also augurs well for the Tractor segment’s volume recovery from
Sep’20.
2 June 2020
7
 Motilal Oswal Financial Services
Mahindra and Mahindra
“Amendments to
the Essential Commodities
Act and reforms in
agricultural marketing and
risk mitigation through
predictable prices would
empower farmers,
strengthen agri-food
processing linkages, and
enable demand-driven
value-added agriculture.
The reforms would
encourage investment in
food processing, and
together with infrastructure
outlays, would contribute in
shaping a competitive agri-
value chain, reduce
wastage, and raise farmer
incomes,” said Mr.
Sanjiv
Puri, Chairman, ITC.
We do not expect any material change in either the competitive landscape or
MM’s positioning in this highly consolidated industry (top-4 player controlling
over 80% of the market). We estimate Tractor industry volumes to remain flat
in FY21E (due to supply-side constraints) and grow 12-14% in FY22E, with MM
also growing in line.
The recent next-round of reforms for the agricultural segment viz. (a)
deregulation of agri-commodities from the Essential Commodities Act, (b) ‘One
Nation, One Market’, and (c) allowing private participation, have the potential to
transform the Indian agriculture landscape.
While it’s too early to judge these initiatives, if implemented in the right spirit, it
could significantly incentivize farmers to invest in farms. Not only does it augur
well for reducing volatility in tractor volumes, but also it is a catalyst to drive
higher penetration of implements in India.
Globally, the implement business is estimated at ~66% of the overall farm
equipment industry, whereas in India it is ~15% of the farm equipment industry.
As non-tractor farm machinery usage evolves in India – from basic implements
to more advanced ones – we believe that MM would be its biggest beneficiary
due to (a) several global alliances in this segment, and (b) MM’s stronghold over
the Indian agriculture ecosystem. Over the next 3-5 years, the agri-implement
segment has scope to support growth of MM’s FES business.
Exhibit 10: Tractors volumes – outlook improving, but near-term to be impacted by
lockdown
MM Tractor Volumes ('000 units)
22.3
10.2
-4.9
-12.6 -8.7
23.1
21.5
12.0
3.4
-8.6
0.0
Gr (%)
19.5
214
FY11
235
FY12
224
FY13
268
FY14
234
FY15
214
FY16
263
FY17
320
FY18
330
FY19
302
FY20
302
338
FY21E FY22E
Source: Company, MOFSL
Exhibit 11: MM’s market share stable at 40-42% over a
decade…
MM's Dom. Mkt Sh (%)
41.4 42.0 41.4 40.2 40.6 40.0 41.3 41.7 42.1 40.2 41.2
Exhibit 12: …in a highly consolidated market with top-4
players controlling over 80% share
Others
CNH
5.2
JD
3.8
9.6
Escorts
11.6
Sonalika
11.7
M&M
41.2
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Source: Industry, MOFSL
TAFE
16.9
Source: Industry, MOFSL
2 June 2020
8
 Motilal Oswal Financial Services
Mahindra and Mahindra
The Farm Machinery (ex-tractors) segment is at a nascent stage in India considering the
fragmented farms and affordability issue. However, if the recently announced farm
reforms of ‘One Nation, One Market’ are executed in the right spirit, it has the potential to
unlock farm prosperity, and in turn, provide incentives to farmers to invest in their farms.
This should augur well for modernization of the non-tractor farm mechanization space,
thus, opening up huge opportunity for players like MM. Due to several global tie-ups in the
Farm Machinery space as well as robust presence in farm ecosystem, we believe that MM
should be a big beneficiary.
Exhibit 13: Indian farms are tractorized but not mechanized
so far…
Tractor
Farm Machinery
Tractors
33
Harvesting
20
Planting &
Fertilizer
8
Exhibit 14: …globally, implements play a big part in farm
mechanization
15
67
85
2
98
33
Global
India
M&M India
Source: Industry, MOFSL
Haying
7
Others Parts& Tillage
10 Attachment 6
s
17
Source: Industry, MOFSL
Exhibit 15: MM’s India farm machinery revenues have seen
strong growth on low base…
Farm Machinery (INR m)
3980
2790
2190
Exhibit 16: …considering low share of MM in farm
machinery segment
M&M Mkt Sh (%)
41.2
4.0
FY17
FY18
FY19
Source: Company, MOFSL
Tractor
Farm Machinery
Source: Company, MOFSL
2 June 2020
9
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 17: MM has one of the strongest presence across farm value chains in India
Source: Company, MOFSL
MM’s positioning in LCVs to further strengthen under BS6
The LCV industry saw the first year of downcycle in FY20, after delivering ~19%
CAGR over FY16-19. The downcycle was led by weak macros, impact of
liquidity and increasing risk averseness of financiers and transition to BS6. This
situation would further worsen due to the impact of Coronavirus.
Looking beyond the cyclical downturn, we believe fundamentals of the LCV
segment are strong. Also, LCVs should continue benefiting from increasing
emergence of the ‘hub and spoke’ model. We estimate the LCV industry to
deliver 8-10% CAGR over the next 5 years.
MM enjoys market share of ~42.5% in the overall LCV segment and ~65% in the
2-3.5 ton LCV segment. Pick-up trucks offer versatility for the owner/operator as
it can operate with ease in varying conditions (hilly terrain, higher payload, etc.).
Under BS6, MM’s Pick-up business’ competitive positioning should improve v/s
SCVs/LCVs due to lower price inflation. Price increase in Pick-up Trucks would be
~10% whereas in SCVs (<2 tons and contributing 40% to LCV industry) it is
expected at 15-20%. While near-term volumes would be impacted due to
COVID-19 and BS6 transition, we estimate volume CAGR of 7.5% over FY20-22E.
2 June 2020
10
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 18: LCV segment is witnessing cyclical slowdown; should recover in FY22E
Total LCVs (Goods, '000 units)
29.5
20.8
7.9
-0.9
-13.3
-20.7
334
FY16
361
FY17
467
FY18
564
FY19
448
FY20
-20.0
358
FY21E
430
FY22E
20.0
Change (%)
337
FY15
Source: SIAM, MOFSL
Exhibit 19: 2-3.5 ton LCV segment has been gaining share, except for last 2 years of
downcycle, due to their versatility
<2 tons
3
5
50
3
6
53
4
7
55
2-3.5 tons
3
7
58
3.5-6 tons
3
7
55
6-7.5 tons
3
6
50
3
5
52
43
39
FY15
35
FY16
32
FY17
35
FY18
42
40
FY14
FY19
FY20
Source: SIAM, MOFSL
Exhibit 20: MM is market leader in LCVs (goods), particularly in 2-3.5 ton segment…
2-3.5 tons
73.3
63.9
39.7
43.6
69.1
47.0
65.8
47.0
Total LCVs (Goods)
61.9
43.5
62.9
41.4
65.3
42.6
FY14
FY15
FY16
FY17
FY18
FY19
FY20
Source: SIAM, MOFSL
2 June 2020
11
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 21: …LCV segment is highly consolidated with top-3
players enjoying 90% share
MSIL
4.9 Others
3.5
AL
9.8
MM
42.6
Exhibit 22: MM’s competitive positioning to further improve
in BS6
On-Road Price
(INR '000)
Tata Ace Gold
Tata Intra V10
AL Dost+
M&M Bolero
Maxi 1.2T
M&M Bolero
Pick up 1.7T
Payload
(Kgs)
750
1,000
1,475
1,200
1700
Diesel
BS4
495
600
680
675
800
BS6
570
670
770
743
880
Diff (%)
15
12
13
10
10
TTMT
39.3
Source: Industry, MOFSL
Source: SIAM, MOFSL
Competitive intensity in fast-growing SUV segment to stay high,
MM remains vulnerable
Over the last 5-7 years, MM has been playing catch-up in the fast growing SUV
segment, as the market has shifted from MM’s area of strength (large SUVs) to
the new segment of compact SUVs. More importantly, none of its launches in
the new segment have met with big success.
Hence, the passenger UV business of MM has seen continuous dilution in
market share (~19% market share of domestic UVs in FY20 v/s ~43% 5 years
back) due to substantial increase in competition as well as it lagging
competition in its product pipeline.
While MM is trying to catch up with competition on the products side, we see
limited visibility for MM to make a comeback. Over the next 12-18 months, the
company has several upgrades and new launches lined-up viz. (a) e-KUV100
(1HFY21), (b) new Thar (1HFY21), (c) new XUV500 (4QFY21), (d) new Scorpio
(1QFY22), and (e) e-XUV300 (mid-CY21).
We have not built in benefits of any imminent launches or any material benefit
on product development from MM’s recent JV with Ford India. We estimate
passenger UV volumes to decline ~1% CAGR over FY20-23E.
Exhibit 24: …however, MM’s UV volumes impacted by
increasing competitive intensity…
UV - M&M
7.5
20.0
0.1
MMs UVs ('000 units)
5.1
Growth (%)
10.0
0.6
Exhibit 23: UV segment volumes for industry in structural
uptrend…
UV - Industry
29.9
Dom. UVs ('000 units)
Growth (%)
21.0
5.0
6.3
2.1
-5.7
0.5
-10.0
-23.8
1,022
207
FY15
222
FY16
223
FY17
234
FY18
235
FY19
179
144
158
-20.0
552
FY15
587
FY16
762
FY17
922
FY18
941
FY19
946
851
FY20 FY21E FY22E
Source: Industry, MOFSL
FY20 FY21E FY22E
Source: Industry, MOFSL
2 June 2020
12
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 25: None of MM’s UV launches in last 5 years met with big success…
Product
TUV300
KUV100
Thar *
TUV300 Plus
Marazzo
XUV300
Month & Year of
launch
Sep-15
Jan-16
Jan-16
Jun-18
Aug-18
Jan-19
Segment
Compact SUV
Mini SUV
Compact SUV
Mid-size SUV
Mid-size MPV
Compact SUV
Avg. Monthly
Segment
Vols in FY20
Mkt Sh (%)
873
2.7
150
NA
300 (1HFY20)
NA
90
NA
1,058
9.9
3,131
9.9
Source: Company, MOFSL
Exhibit 26: …resulting in sharp decline in UV market share to ~16% by 2HFY20
MM UV Mkt Sh (%)
1
1
1
1
2
41.7
37.5
37.9
29.2
25.4
25.0
22.2
3
16.1
FY14
FY15
FY16
FY17
FY18
FY19
1HFY20
2HFY20
2
2
MM's Rank in Uvs (#)
Source: Company, MOFSL
Exhibit 27: Upcoming launches in SUVs – unrelenting competitive intensity
OEM
Skoda
Nissan
Toyota
Tata Motors
M&M
M&M
Kia
VW
MG
M&M
VW
VW
M&M
Skoda
M&M
Model
Karoq Style
Magnite
Urban Curiser
Gravitas
e-KUV100
New Thar
Sonet
T-Roc
Hector Plus
New XUV500
I.D. Crozz
Taigun
e-XUV300
Vision IN
New Scorpio
Timeline
1HFY21
1HFY21
1HFY21
1HFY21
1HFY21
1HFY21
2HCY20
2HCY20
2HCY20
4QFY21
CY21
CY21
CY21
CY21
1QFY22
Segment
Mid-size SUV
Compact SUV
Compact SUV
Mid-size SUV
e-SUV Compact
NA
Compact SUV
Compact SUV
Mid-size SUV
Mid-size SUV
e-SUV
Compact SUV
e-SUV Compact
Compact SUV
Mid-size SUV
Source: Company, MOFSL
2 June 2020
13
 Motilal Oswal Financial Services
Mahindra and Mahindra
Valuations: Risks adequately priced in; Change in approach to
capital allocation to be big re-rating catalyst
MM’s senior management is in midst of a generational shift, at a time when all
its key businesses are facing cyclical or structural challenges. While the cycle for
tractors should turn positive in the near term and for LCVs too in the not so
distant future, the new CEO would have to address two major issues – (a) arrest
and restore MM’s positioning in the fast growing SUV segment, and (b)
circumvent the drag of underperforming subsidiaries in the core/non-core
businesses.
MM’s stock has underperformed the NSE Auto Index over the last one year by
~9.6% due to (a) deteriorating market share in UVs, (b) weak outlook for
tractors, and (c) deteriorating performance of subsidiaries.
However, its recent outperformance to the NSE Auto Index (+5.6% in CY20
YTD) is partly led by improving outlook for tractors (in absolute and relative
basis to other Auto segments) and partly in the hope of a relook at its capital
allocation strategy.
However, despite the recent outperformance, MM’s valuations are still at
substantial discount to 5-year average (which captures both pain point of
deterioration in UV market share and subsidiaries performance). On Core P/E
basis (adjusting for value in subs post holding company discount), implied P/E
for MM is ~15.4x/10.6x FY21/22E Core EPS and 1x/1x Core P/BV. This
compares with 5-year average Core P/E of ~15.9x and Core P/B of ~1.9x, and
implies ~25% discount to 1SD below 5-year average P/E and ~30% discount to
1SD below 5-year average PB.
We believe that these valuations reflect the challenges in the Passenger UV
business as well as no major changes in capital allocation policy. Any positive
surprises in the Pick-up UV business, positive evolution of Ford India JV or
correction of capital allocation by the new CEO would act as re-rating triggers.
We are lowering our EPS for FY21/FY22E by ~22%/4% to factor in the supply-
side issues for Tractors and weaker volumes for Autos in FY21. We are now
building in volume growth of 0%/15% for tractors, -20%/22% for LCVs and -
17%/10% for SUVs for FY21/FY22E.
We value MM on SOTP basis valuing Tractors at ~15x Mar’22E EPS (at ~25%
premium to target multiple for ESC), Auto business at ~12.5x EPS (at ~50%
discount to target multiple for MSIL) and other businesses at ~10x EPS. Also,
we value listed subsidiaries at 40% HoldCo discount at CMP. Our Jun’22E based
SOTP TP is ~INR576/share – an upside of ~25%. At our TP, implied core P/E is
~13.6x (v/s 5-year average Core P/E of ~15.9x and 10-year average of ~14.3x).
Maintain
Buy.
2 June 2020
14
 Motilal Oswal Financial Services
Mahindra and Mahindra
Exhibit 28: Revised estimates
INR b
Volumes ('000 units)
Net Sales
EBITDA (%, incl MVML)
Net Profit
EPS (INR)
EPS (INR, incl MVML)
Rev
683
416
12.4
24
20
21.7
FY21E
Old
745
454
13.5
31
26
27.8
Chg (%)
-8.4
-8.4
-110bp
-22.0
-22.0
-21.8
Rev
776
482
14.3
35
29
31.5
FY22E
Old
817
502
14.6
36
31
32.8
Chg (%)
-5.0
-4.1
-30bp
-3.9
-3.9
-3.9
Source: MOFSL
Exhibit 29: MM: Sum-of-the-parts (INR/share)
INR/sh
Tractors
Autos
Others
Value of Core Business
Value of subs post hold-co
- Tech Mahindra
- MMFSL
- Mah. Lifespaces
- Mah. Holidays
- SYMC
- Mah. Logistics
- Others
Fair Value (INR/sh)
Target P/E (x)
15
12
10
40
FY20E
271
109
50
430
127
70
24
3
8
5
9
9
557
FY21E
265
-8
47
304
127
70
24
3
8
5
9
9
432
FY22E
313
60
56
430
127
70
24
3
8
5
9
9
557
Source: MOFSL
Exhibit 30: MM’s Tractor business contributes ~56% to the SOTP value
Mkt value of subs
23%
Others
10%
Autos
11%
Tractors
56%
Source: MOFSL
Exhibit 31: M&M: Core P/E trend
Core P/E (x)
+1SD
Average
-1SD
Exhibit 32: M&M: Core P/B trend
Core P/B (x)
3.0
2.4
1.8
+1SD
Average
-1SD
22
17
12
7
1.2
0.6
Source: Bloomberg, MOFSL
2 June 2020
15
 Motilal Oswal Financial Services
Mahindra and Mahindra
Operating metrics
Exhibit 33: Snapshot of Revenue model
000 units
Tractors
Growth (%)
% of total volumes
Autos
Pick-up/LCVs (<3.5t)
Growth (%)
SUVs
Growth (%)
3-Ws
Growth (%)
LCVs (>3.5t)
Growth (%)
M&HCVs (MTBL)
Growth (%)
Others & Exports
Growth (%)
Total Autos
Growth (%)
% of total volumes
Total volumes ('000 units)
Growth (%)
ASP (INR '000/Unit)
Growth (%)
Net Sales (INR b)
Growth (%)
FY16
214
-8.7
30.3
156
6.7
233
-41.4
55
-3.2
6
20.6
6
63.1
36
0.1
492
6.1
69.7
705
1.3
571
5.2
404
6.6
FY17
263
23.1
34.3
168
7.7
223
-4.4
52
-4.9
8
18.7
7
17.7
47
0.0
504
2.5
65.7
767
8.8
572
0.3
441
9.1
FY18
320
21.5
36.8
200
19.1
235
5.7
55
4.4
8
1.6
9
41.2
42
0.0
549
8.9
63.2
869
12.9
560
-2.1
487
10.5
FY19
330
3.4
35.2
229
14.9
237
0.9
67
22.1
8
8.6
11
14.3
56
0.0
609
10.8
64.8
939
8.1
571
1.9
536
10.1
FY20
302
-8.6
38.8
188
-18.1
179
-24.4
62
-6.8
6
-26.5
5
-53.0
35
0.0
476
-21.8
61.2
778
-17.2
580
1.5
451
-15.9
FY21E
302
0.0
44.2
150
-20.0
150
-16.6
52
-17.0
4
-35.0
3
-35.0
22
0.0
381
-20.0
55.8
683
-12.2
608
5.0
416
-7.8
FY22E
338
12.0
43.6
183
22.0
165
10.1
56
8.0
5
20.0
4
20.0
26
0.0
438
15.0
56.4
776
13.7
621
2.0
482
15.9
Source: Company, MOFSL
2 June 2020
16
 Motilal Oswal Financial Services
Mahindra and Mahindra
Story in charts
Exhibit 34: Trend in tractor volumes
Tractor volumes (units)
Growth (%)
Exhibit 35: New product launches to drive UV sales
UVs (incl pick-ups)
6.7
(8.9)
(7.2)
(20.0)
(23.0)
3.1
9.1
Growth (%)
16.0
9.5
FY14
FY15
FY16
FY17
FY18
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
FY14
FY15
FY16
FY17
FY18
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
Exhibit 36: Realization trend
Net realizations (INR/unit)
Exhibit 37: Trend in EBITDA margins
EBITDA (incl. MVML) (%)
14.8
14.2
13.5
12.5
14.3
13.7
13.1
12.4
13.5
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 38: Trend in return profile
RoE (%)
RoIC (%)
Exhibit 39: FCF to improve despite high capex plans (INR b)
CFO
44.2
34.1
(10.1)
54.2
56.5
43.9
34.9
46.0
23.1
26.6
5.0
(20.0)
(20.2) (21.6) (20.7)
(26.7) (30.3)
(35.0)
(35.0)
FY16
FY17
FY18
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
22.8
25.5
72.7
Capex
56.9
40.0
42.8
FCF
60.5
33.9
FY14E FY15
Source: Company, MOFSL
2 June 2020
17
 Motilal Oswal Financial Services
Mahindra and Mahindra
Financials and Valuations
Income Statement
Y/E March
Net Op. Income
Change (%)
Total Expenditure
EBITDA
Margins (%)
Margins (%, incl MVML)
Depreciation
EBIT
Deferred Revenue Exp.
Int. & Finance Charges
Other Income
Non-recurring Income
Profit before Tax
Tax
Eff. Tax Rate (%)
Adj. Profit after Tax
Change (%)
Adj. PAT (incl MVML)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Deferred tax
Loans
Capital Employed
Application of Funds
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr.Assets, L & Adv.
Inventory
Sundry Debtors
Cash & Bank Bal.
Loans & Advances
Others
Current Liab. & Prov.
Sundry Creditors
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOFSL Estimates
2016
4,08,751
6.3
3,62,551
46,199
11.3
13.5
10,681
35,518
0
1,861
8,499
687
42,845
10,799
25.2
31,532
(1.2)
33,394
2017
4,40,535
7.8
3,95,388
45,147
10.2
13.1
15,264
29,883
0
1,596
13,455
5,485
47,226
10,792
22.9
32,203
2.1
35,133
2018
4,86,856
10.5
4,24,615
62,240
12.8
14.8
14,794
47,446
0
1,122
10,364
4,336
61,024
17,464
28.6
40,465
25.7
43,202
2019
5,36,140
10.1
4,69,744
66,396
12.4
14.2
18,604
47,792
0
1,134
16,890
-297
63,250
15,290
24.2
48,186
19.1
51,288
2020
450,837
-15.9
395,472
55,366
12.3
13.7
22,047
33,319
0
1,116
15,733
7,665
55,601
13,900
25.0
35,952
(25.4)
35,138
2021E
415,552
-7.8
370,028
45,524
11.0
12.4
24,904
20,620
0
1,116
12,388
0
31,891
7,973
25.0
23,918
(33.5)
25,900
(INR M)
2022E
481,805
15.9
420,174
61,631
12.8
14.3
27,434
34,197
0
1,071
13,511
0
46,637
11,659
25.0
34,978
46.2
37,590
(INR M)
2022E
5,958
400,983
406,941
6,341
22,803
436,086
322,320
196,689
125,631
15,000
252,321
176,772
34,502
31,680
41,177
9,900
59,513
133,637
79,201
41,236
13,200
43,135
436,086
0
2016
2,963
2,21,269
2,24,232
-54
18,436
2,42,614
1,39,386
63,426
75,960
15,622
1,35,474
1,23,286
26,879
25,116
22,870
17,103
31,317
1,07,728
66,780
30,300
10,648
15,558
2,42,614
2017
2,968
2,64,888
2,67,856
2,548
27,729
2,98,134
1,54,778
77,068
77,710
20,404
1,79,084
1,25,034
27,580
29,388
16,875
5,406
45,784
1,04,098
68,811
21,388
13,899
20,935
2,98,134
0
2018
5,950
2,96,991
3,02,941
2,772
28,644
3,34,357
1,82,295
1,03,700
78,594
31,287
2,05,830
1,58,457
27,017
31,730
28,937
10,182
60,591
1,39,811
86,034
38,485
15,292
18,646
3,34,357
-0
2019
5,958
3,36,135
3,42,093
6,341
24,803
3,73,237
2,23,122
1,22,304
1,00,818
24,198
2,20,160
1,81,795
38,393
39,463
37,317
7,110
59,513
1,53,734
96,782
41,236
15,716
28,061
3,73,237
-0
2020
5,958
365,919
371,877
6,341
24,803
403,022
272,320
144,352
127,968
10,000
230,321
163,295
32,284
33,184
32,335
5,978
59,513
128,562
74,110
41,236
13,216
34,733
403,022
0
2021E
5,958
377,922
383,880
6,341
24,803
415,024
287,320
169,256
118,064
15,000
240,321
162,570
29,757
27,324
37,437
8,539
59,513
120,931
68,310
41,236
11,385
41,639
415,024
0
2 June 2020
18
 Motilal Oswal Financial Services
Mahindra and Mahindra
Financials and Valuations
Ratios
Y/E March
Basic (INR)
Fully diluted EPS
FD EPS (incl MVML)
Cash EPS
Book Value per Share
DPS
Payout (Incl. Div. Tax) %
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price to Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
ROIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Working Capital (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Int./Dividends Received
Depreciation & Amort.
Direct Taxes Paid
(Inc)/Dec in Wkg. Capital
Other Items
CF from Oper.Activity
Extra-ordinary Items
Other Items
CF after EO Items
(Inc)/Dec in FA+CWIP
Free Cash Flow
(Pur)/Sale of Invest.
CF from Inv. Activity
Change in Net Worth
Inc/(Dec) in Debt
Interest Paid
Dividends Paid
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Beginning Balance
Closing Balance
E: MOFSL Estimates
2016
26.6
28.2
35.6
189.2
6.0
26.3
16.4
13.0
5.3
0.6
2.4
1.3
15.1
13.4
37.0
23
24
60
14
1.7
0.1
2017
27.1
29.6
40.0
225.6
6.5
12.3
15.6
11.6
5.5
0.6
2.0
1.4
13.1
12.4
30.7
24
23
57
17
1.5
0.1
2018
34.0
36.3
46.4
254.6
7.5
23.8
12.7
10.0
8.2
1.0
1.8
1.6
14.2
13.0
45.1
24
20
65
14
1.5
0.1
2019
40.4
43.0
56.1
287.1
8.5
24.5
10.7
8.3
7.7
0.9
1.6
1.8
14.9
13.9
45.3
27
26
66
19
1.4
0.1
2020
30.2
29.5
48.7
312.1
10.0
33.2
15.7
9.5
9.4
1.2
1.5
2.2
10.1
9.5
22.5
27
26
60
28
1.1
0.1
2021E
20.1
21.7
41.0
322.2
10.0
57.9
21.3
11.3
11.3
1.2
1.4
2.2
6.3
6.1
12.2
24
26
60
37
1.0
0.1
2022E
29.4
31.5
52.4
341.5
10.0
39.6
14.7
8.8
8.2
1.1
1.4
2.2
8.8
8.4
20.5
24
26
60
33
1.1
0.1
(INR M)
2022E
34,197
13,511
27,434
-11,659
2,244
65,727
0
0
65,727
-35,000
30,727
-12,000
-47,000
1,930
-2,000
-1,071
-12,084
-13,225
5,502
37,437
43,107
2016
41,612
-3,027
11,086
-9,279
14,393
54,785
687
0
55,473
-21,597
33,189
-13,865
-35,461
0
-9,500
-2,110
-8,461
-20,071
-747
20,648
20,069
2017
41,742
-9,800
15,264
-9,929
-508
332
37,100
5,485
0
42,585
-20,743
16,358
-7,076
-27,818
0
-1,742
-1,482
-8,391
-11,615
-2,333
22,870
20,705
2018
56,688
-8,084
14,794
-12,887
17,803
1,957
70,271
0
0
70,271
-26,688
43,583
-24,416
-51,104
0
592
-1,695
-9,230
-10,333
8,834
16,875
25,876
2019
63,547
-13,184
18,604
-14,341
-5,060
-327
49,239
0
0
49,239
-30,316
18,923
4,829
-25,487
0
-3,725
-1,710
-10,117
-15,552
8,199
28,937
37,137
2020
33,319
15,733
22,047
-13,900
-11,653
45,546
7,665
0
53,211
-35,000
10,546
-10,160
-45,160
1,930
0
-1,116
-12,084
-11,270
-10,884
37,317
26,600
2021E
20,620
12,388
24,904
-7,973
-1,804
48,134
0
0
48,134
-20,000
28,134
-10,000
-30,000
1,930
0
-1,116
-12,084
-11,270
6,864
32,335
39,367
2 June 2020
19
 Motilal Oswal Financial Services
Mahindra and Mahindra
NOTES
2 June 2020
20
 Motilal Oswal Financial Services
Mahindra and Mahindra
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
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Research Analyst views on Subject Company may vary based on Fundamental
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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
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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.
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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
2 June 2020
21
 Motilal Oswal Financial Services
Mahindra and Mahindra
********************************************************************************************************************************
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.
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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
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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
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Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
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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
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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
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* 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.
2 June 2020
22