2 September 2020
1QFY21 Results Update | Sector: Oil & Gas
ONGC
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
ONGC IN
12,833
CMP: INR80
TP: INR105 (+31%)
Buy
Volumes back to normal levels; KG basin production faces delay
n
1009.6 / 13.7
n
150 / 52
-2/-12/-38
1924
n
n
Financials & Valuations (conso) (INR b)
Y/E March
Sales
EBITDA
Adj. PAT
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh.(INR)
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
FCF Yield (%)
6.1
0.5
3.3
6.3
3.7
5.6
0.5
4.1
4.2
1.8
3.8
0.4
3.0
5.8
24.0
n
n
0.5
7.9
6.3
66.9
0.5
8.5
6.5
27.9
0.3
11.8
8.8
25.6
n
2020 2021E 2022E
4,250
612
168
13.1
-51.8
161.3
4,234
494
183
14.2
8.5
171.5
4,552
612
271
21.1
48.3
187.2
n
n
ONGC’s 1QFY21 oil and gas sales were in line with estimates along with net crude
oil price realization, thus resulting in in-line revenues. However, lower other
expenditure led to an EBITDA beat during the quarter.
Offtake of crude oil by refineries from ONGC was not affected. However, there
was a reduction in gas production due to less off-take by some customers, which
has now been restored to normal levels.
Production guidance in FY21 for oil stood at ~22.7mmt and for gas at ~24.9bcm.
OPEC+ managed production cuts well (in line with demand), as various economies
globally came out of the lockdowns. Thus, crude oil prices hovered around
~USD45/bbl over the last two months. Starting Aug’20, OPEC+ also eased
production cuts by 2mnbopd (to 7.7mnbopd).
Global demand is expected to reach ~97% of pre-COVID levels in the next quarter
(Oct-Dec’20). We have built in crude oil price forecast of ~USD45/bbl for 2HFY21
and we expect prices to remain stable around current levels in the medium term.
ONGC has guided that KG basin will see some delay in production as many vendors
have enforced force majeure. Despite domestic gas price ceiling declining, KG
basin’s production would not be impacted.
Despite the delay, ONGC is expected to grow its gas production in FY22E, with
efforts to arrest the decline in oil production from age-old fields (accounting for
60-70% of the total oil production). Maintain Buy.
EBITDA beat on lower other expenditure
n
n
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Jun-20 Mar-20 Jun-19
60.4
60.4
64.3
17.4
17.9
14.4
8.1
7.6
7.9
14.1
14.1
13.5
FII Includes depository receipts
n
Net oil realization stood at USD28.7/bbl (v/s est. USD30.0/bbl and
USD66.3/bbl in 1QFY20). Net sales were in line at INR130b (-51% YoY).
EBITDA stood at INR59b (v/s est. +26%, -61% YoY), on lower other
expenditure. This was primarily due to lower travelling/employee cost,
lower statutory levies and cess, and lower feedstock gas prices at Dahej
petchem plant.
ONGC believes that DD&A may remain at the same levels but other costs
may decline significantly, led by various cost cutting measures.
Tax was higher at 45.1% (v/s est. 33.3%), due to further provisioning of
Service Tax/GST on Royalty as contingent liability. The matter is listed for
hearing in the second week of Sep’20 before the Honorable High Court of
Rajasthan. Thus, PAT stood at INR5b (in-line, -92% YoY).
ONGC had MAT credit of ~INR50b at end-FY20. The company would take a
decision on moving to the new tax regime by Dec’20, after evaluating crude
prices over the next couple of months and its impact on tax.
Crude sales came in at 5.2mmt (in-line, -3% YoY, -5% QoQ), with production
down ~4% YoY to 5.7mmt.
Gas sales stood at 4.2mmt (v/s est. -5%, -15% YoY, -9% QoQ), with
production down ~14% YoY to 5.6bcm.
VAP sales stood at 680tmt (-29% YoY, -21% QoQ).
Operational parameters for 1QFY21
n
n
n
Swarnendu Bhushan- Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com)
Sarfraz Bhimani - Research Analyst
(Sarfraz.Bhimani@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.
 Motilal Oswal Financial Services
ONGC
Capex plans for FY21
n
n
Capex for FY21 stands at ~INR260b (v/s earlier planned capex of INR320b). Rest
of the capex (~INR60b) would flow to the next year as few projects have been
impacted due to COVID-19.
At end-1QFY21, standalone debt stood at INR158b and consol. debt at
INR1,120b. The proposal to raise INR450b is just an aggregation of several older
statutes.
Valuation and view
n
n
n
n
n
Although gas production has been delayed, we expect a significant jump over
the next 3-4 years, led by the various projects that ONGC has been working on.
Oil production is expected to remain flat.
Factoring in the delay, we have revised down our gas production estimates for
FY21/FY22E to 24.7bcm/30.2bcm (from earlier 26.7/35.2); our estimates for oil
at 23.6mmt/24mmt remain unchanged.
In FY20, ONGC made total 12 discoveries (7 onshore, 5 offshore); of which, 7 are
prospects (3 onshore, 4 offshore) and 5 are pools (4 onshore, 1 offshore). ONGC
has notified 3 more discoveries (two pools and one prospect) in the last two
months, taking the total discoveries to 6 (4 pools and 2 prospect) in FY21 so far.
According to
recent news,
the government is formulating a structure to give
Indian upstream companies some relief in royalty and cess along with other
reliefs. According to our model calculation, 1% change in cess results in 2%
consol. EPS change for ONGC.
ONGC is trading at 3.0x FY22E EV/EBITDA and 3.8x FY22E P/E. We value the
company at 10x FY22E adj. EPS of INR7.8 and add value of investments to arrive
at a target price of INR105. Reiterate
Buy.
FY20
2Q
244.9
-12.5
132.9
54.3
62.6
6.8
26.9
90.4
0.0
90.4
30.7
62.6
62.6
-24.2
25.6
70.3
60.3
5.4
4.9
850.0
FY21
2Q
180.3
-26.4
78.6
43.6
52.3
6.0
29.9
50.2
0.0
50.2
33.3
33.5
33.5
-46.5
18.6
74.5
40.0
5.2
4.8
858.1
FY20
3Q
200.1
-15.6
93.7
46.8
52.0
6.0
17.2
52.9
0.0
52.9
33.3
35.3
35.3
-16.5
17.6
74.0
45.0
5.2
4.8
858.1
4Q
211.0
-1.6
99.5
47.2
57.0
7.0
17.2
52.7
0.0
52.7
33.3
35.1
35.1
338.1
16.6
962.1
-12.3
492.9
51.2
274.7
28.2
61.6
251.6
49.0
202.6
34.4
133.0
172.0
-35.6
17.9
FY21
721.5
-25.0
330.8
45.9
210.8
23.9
68.7
164.8
0.0
164.8
33.9
108.9
108.9
-36.7
15.1
(INR Billion)
FY21 Var vs
1QE est (%)
134.4
-3%
-49.4
46.8
26%
34.9
41.4
20%
6.0
-18%
8.1
-46%
7.6
18%
0.0
7.6
18%
33.3
5.1
-3%
5.1
-3%
-91.4
3.8
75.9
30.0
5.1
4.5
669.8
0%
-4%
1%
-5%
2%
Standalone - Quarterly Earning Model
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
Key Assumptions (USD/bbl)
Fx rate (INR/USD)
Net Oil Realization
Crude oil sold (mmt)
Gas sold (bcm)
VAP sold (tmt)
E: MOFSL Estimates
1Q
265.5
-2.4
151.1
56.9
61.6
6.5
7.5
90.6
0.0
90.6
34.8
59.0
59.0
-3.9
22.2
69.6
66.3
5.3
5.0
952.0
3Q
237.1
-14.4
123.0
51.9
70.2
6.3
14.0
60.5
0.0
60.5
30.2
42.3
42.3
-48.8
17.8
71.2
59.7
5.2
4.8
890.0
4Q
214.6
-19.8
85.9
40.0
80.4
8.7
13.3
10.1
49.0
-38.9
20.4
-31.0
8.0
-80.2
3.7
72.4
49.0
5.4
4.7
866.0
1Q
130.1
-51.0
59.1
45.4
49.5
4.9
4.4
9.0
0.0
9.0
45.1
5.0
5.0
-91.6
3.8
75.9
28.7
5.2
4.2
680.0
75.0
70.9
74.9
45.0
58.8
39.7
5.2
21.3
20.9
5.6
19.4
19.4
858.1 3,558.0 3,254.3
2 September 2020
2
 Motilal Oswal Financial Services
ONGC
Key charts from the quarter
Exhibit 1: Oil price realization at USD29/bbl (USD/bbl)
Net Realization
Subsidy Burden
Gross Realization
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
FY21
FY16
FY17
FY18
FY19
FY20
Source: Company, MOFSL
Exhibit 2: Oil production (mmt)
JV
ONGC
Total (incl. JV)
Exhibit 3: Gas production (bcm)
JV
ONGC
Total (incl. JV)
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q
FY16
FY17
FY18
FY19
FY20
FY21
Source: Company, MOFSL
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q
FY16
FY17
FY18
FY19
FY20
FY21
Source: Company, MOFSL
Exhibit 4: Oil sales (mmt)
JV
ONGC
Total (incl. JV)
Exhibit 5: Gas sales (bcm)
JV
ONGC
Total (incl. JV)
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q
FY16
FY17
FY18
FY19
FY20
FY21
Source: Company, MOFSL
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q
FY16
FY17
FY18
FY19
FY20
FY21
Source: Company, MOFSL
2 September 2020
3
 Motilal Oswal Financial Services
ONGC
Story in charts
Exhibit 6: Oil production to remain flat (mmt)
Domestic Gas Prodn (bcm)
Domestic Oil Prodn (mmt)
54.2
49.5 48.5 48.8 51.8 50.0 48.3 48.4
23.5
22.5
23.3
25.6
25.8
24.9
24.7
30.2
Exhibit 7: OVL production to remain stable
Domestic Prodn (mmtoe)
OVL Production (mmtoe)
68.7
66.0 64.9 62.9
62.0
58.3 57.4 61.6
14.5
14.2 14.8 14.7
12.8
13.7
8.9
8.9
51.8
54.2
25.9
FY15
25.9
FY16
25.5
FY17
26.2
FY18
49.5
24.2
FY19
48.5
48.8
50.0
48.3
48.4
23.4
FY20
23.6
24.0
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
FY21E FY22E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 8: JV contribution to shrink
ONGC + OVL (mmtoe)
JVs (mmtoe)
68.7
66.0 64.9 62.9
62.0
59.3 58.3 57.4 61.6
2.6
4.4 4.3 3.9
2.7
4.5
5.3 5.2 4.9
61.6 60.5 59.0 59.3 66.1
54.0 53.2 52.5 57.1
Exhibit 9: Realization of ONGC (USD/bbl)
Net
86
41
50
2
45
47
FY16
Upstream Discount
69
0
69
Gross
49
0
50
FY17
57
0
57
59
0
59
40
0
40
50
0
50
FY14
FY15
FY16
FY17
FY17
FY19 FY20E FY21E FY22E
Source: Company, MOFSL
FY15
FY18
FY19
FY20
FY21E FY22E
Source: Company, MOFSL
Exhibit 10: ONGC – 1-year forward P/E
27.0
21.0
15.0
9.0
3.0
10.1
6.8
5.2
P/E (x)
Min (x)
Avg (x)
+1SD
20.7
13.4
Max (x)
-1SD
Exhibit 11: ONGC – 1-year forward P/B
3.2
2.4
1.6
0.8
0.9
P/B (x)
Min (x)
Avg (x)
+1SD
1.7
0.4
Max (x)
-1SD
2.4
1.3
5.3
0.0
0.5
Source: MOFSL
Source: MOFSL
2 September 2020
4
 Motilal Oswal Financial Services
ONGC
Financials and Valuations (conso)
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Share of associates/JVs/Minority int
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
1,609
-7.8
547
34.0
290
257
29
60
288
-14
274
97
35.4
-7
183
184
-30.0
11.4
FY16
1,357
-15.7
452
33.3
225
228
38
81
271
-79
192
70
36.2
-9
131
174
-5.0
12.9
FY17
3,257
140.1
580
17.8
254
326
36
93
383
6
389
125
32.3
-28
292
288
64.9
8.8
FY18
3,622
11.2
644
17.8
306
338
50
75
362
2
365
131
36.0
-27
261
259
-9.9
7.2
FY19
4,537
25.2
840
18.5
329
511
58
77
530
-16
514
209
40.7
-34
339
349
34.6
7.7
FY20
4,250
-6.3
612
14.4
357
255
70
85
270
-90
180
75
41.7
-11
116
168
-51.8
4.0
(INR billion)
FY21E
4,234
-0.4
494
11.7
294
200
62
118
256
0
256
85
33.3
-12
183
183
8.5
4.3
FY22E
4,552
7.5
612
13.5
283
330
63
121
388
0
388
129
33.3
-12
271
271
48.3
5.9
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Exploratory wells under progress
Total Investments
Curr. Assets, Loans&Adv.
Others
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY15
43
1,762
1,805
25
519
182
2,530
1,411
948
688
201
422
212
47
890
228
106
188
161
208
841
491
350
49
2,530
FY16
43
1,935
1,978
27
445
264
2,937
2,666
1,156
1,509
153
219
358
407
763
267
99
95
277
25
472
460
12
291
2,937
FY17
64
1,880
1,944
133
744
352
3,173
3,328
1,358
1,969
142
214
377
707
1,029
428
299
139
132
31
1,266
985
281
-236
3,173
FY18
64
1,963
2,028
156
993
391
3,568
3,683
1,590
2,093
142
207
401
667
1,048
503
305
156
51
33
990
694
296
58
3,568
FY19
63
2,106
2,169
181
1,015
450
3,815
3,983
1,827
2,156
141
299
392
675
1,252
633
351
175
48
46
1,100
778
322
152
3,815
FY20
63
2,007
2,070
178
1,037
435
3,719
4,382
2,093
2,289
142
459
379
500
1,242
695
331
115
57
44
1,293
920
373
-51
3,719
FY21E
63
2,138
2,201
178
1,192
435
4,006
4,491
2,389
2,102
142
283
747
500
1,449
736
345
144
180
44
1,219
846
373
231
4,006
FY22E
63
2,340
2,403
178
1,073
435
4,089
4,583
2,691
1,892
142
358
900
500
1,578
777
363
155
238
44
1,282
909
373
296
4,089
2 September 2020
5
 Motilal Oswal Financial Services
ONGC
Financials and Valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
14.3
36.9
140.6
6.3
53.2
5.6
2.2
0.6
0.9
2.5
7.9
-2.3
10.4
9.1
NA
1.1
0.6
24
43
111
1.1
9.0
0.2
FY16
13.6
31.1
154.1
5.7
66.8
5.9
2.6
0.5
0.9
2.6
7.1
36.5
9.2
8.3
NA
0.5
0.5
27
26
124
1.6
6.0
0.1
FY17
22.4
42.2
151.5
6.9
36.0
3.6
1.9
0.5
0.5
2.8
8.7
13.3
14.7
11.1
NA
1.0
1.0
33
16
110
0.8
9.1
0.3
FY18
20.2
44.0
158.0
6.6
38.0
4.0
1.8
0.5
0.5
3.1
8.3
-15.0
13.0
9.2
NA
1.0
1.0
31
16
70
1.1
6.8
0.5
FY19
27.2
52.8
169.0
6.9
31.3
2.9
1.5
0.5
0.4
2.4
8.6
14.1
16.6
11.3
NA
1.1
1.2
28
14
63
1.1
8.8
0.4
FY20
13.1
40.9
161.3
5.0
66.9
6.1
2.0
0.5
0.5
3.3
6.3
3.0
7.9
6.3
NA
1.0
1.1
28
10
79
1.0
3.6
0.5
FY21E
14.2
37.2
171.5
3.4
27.9
5.6
2.2
0.5
0.5
4.1
4.2
1.4
8.5
6.5
NA
0.9
1.1
30
12
73
1.2
3.2
0.5
FY22E
21.1
43.1
187.2
4.6
25.6
3.8
1.9
0.4
0.4
3.0
5.8
19.2
11.8
8.8
NA
1.0
1.1
29
12
73
1.2
5.2
0.3
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Change in deferred tax
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Inc/(Dec) in Debt
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY15
274
180
2
-97
-75
285
287
-316
-30
0
-333
63
-98
-37
-84
245
161
FY16
192
164
93
-70
-126
254
486
-18
468
-359
-340
-73
-88
-31
116
161
277
FY17
389
202
87
-125
382
935
847
-676
171
-301
-964
299
-105
-27
-145
277
132
FY18
365
231
41
-131
-376
130
180
-372
-192
40
-334
249
-99
72
-81
132
51
FY19
514
237
59
-209
-97
504
564
-383
181
-8
-390
22
-106
-176
-2
51
48
FY20
180
266
-6
-75
212
577
585
-547
38
175
-383
22
-77
-194
9
48
57
FY21E
256
294
0
-85
-159
306
318
-300
18
0
-300
155
-51
105
123
57
180
(INR billion)
FY22E
388
283
0
-129
-7
534
547
-300
247
0
-300
-119
-69
-188
58
180
238
2 September 2020
6
 Motilal Oswal Financial Services
ONGC
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
********************************************************************************************************************************
14 February 2020
7
 Motilal Oswal Financial Services
ONGC
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.
2 September 2020
8