India Strategy
Gautam Duggad
Gautam.Duggad@motilaloswal.com
Jayant Parasramka
Jayant.Parasramka@motilaloswal.com
The Eagle Eye
June 2020
 Motilal Oswal Financial Services
India Strategy – Sep’20: The Eagle Eye
In our sixth version of the ‘The Eagle Eye’, we have highlighted several key aspects pertaining to markets,
The Mid-cap and Small-cap indices turned briefly positive CY20 YTD and both the Mid-cap and Small-cap
earnings and valuations with deep emphasis on the mid-cap/small-cap space and its recent outperformance.
indices continued outperforming the Nifty in Aug’20 by 5%/8%. Aug’20 recorded highest FII inflows ever
Sep’10.
staples. Companies impacted by Covid i.e. airlines/hotels/retail/multiplexes all posted stellar gains.
Another important feature of August’20 was the relative outperformance of discretionary companies v/s
On the macro front, India’s GDP 1QFY21 declined 24% – the worst amongst peers. Meanwhile, corporate
earnings turned out better than our muted expectations in 1QFY21 and our Nifty EPS estimates saw a
marginal uptick of 2-2.5% for FY21/22.
CHART BOOK | September 2020
2
June 2020
 Motilal Oswal Financial Services
INDIA O/P v/s EM IN AUG’20
1QFY21 EARNINGS SEASON
1QFY21 Earnings for MOFSL universe came in
above expectations
Cost rationalization was a constant theme
across companies
India O/P (v/s EMs in Aug’20) – a laggard YTD
Small-caps – major gainers in Aug’20
Non-institutional participation remains high, cash
volumes higher in Aug’20 (v/s Jul’20)
SMALL-CAP/MID-CAPS OUTPERFORM
The Smallcap 100/Midcap 100 outperformed the
Nifty in Aug’20. The Midcap 100 has now
relatively outperformed the Nifty over the past
12 months
4 small-cap stocks doubled in CY20 while 5 mid-
cap companies gained by more than 50%
EMPLOYMENT
CONTENT
Unemployment rate is down compared to the
highs in Apri-May’20
Naukri JobSpeak Index too indicates some
increase in job posting in Jun-Jul’20
UNLOCK SECTORS LEAD RECOVERY
Consumer discretionary companies
outperformed staples since Unlock 1.0
Retail/Hotels/Multiplex/Airlines gained in Aug’20
MARKETS, DIVERGENCE,
POLARIZATION AND VALUATION
Mid-caps continued to outperform large-caps
FII flows in Aug’20 is the second highest ever
based on performance of the last three months
after Sep’10
CHART BOOK | September 2020
3
June 2020
 Motilal Oswal Financial Services
India outperforms MSCI EM in Aug’20; Remains a laggard YTD
World equity indices (MoM) – in USD (%)
10
7
7
6
5
5
4
3
2
0
-1
-1
-8
World equity indices (CY20 YTD) – in USD (%)
31
8
7
4
3
1
-1
-9
-10
-12
-21
-23
-37
CHART BOOK | September 2020
4
June 2020
 Motilal Oswal Financial Services
Small-caps – Best performer in Aug’20; Defensives lag
Small-cap/mid-caps outperformed the Nifty in Aug’20. Metals and Banks were the biggest gainers during the month while
defensive sectors like Consumer, Technology and Healthcare underperformed.
CY20 YTD, Healthcare and IT continued topping the charts while Financials languished at the bottom.
Sectoral Performance MoM (%)
22
8
12
13
11
10
8
8
3
3
2
0
-1
-1
-1
Sectoral Performance CY20 YTD (%)
38
15
-6
-2
-4
2
-2
-3
-5
-13
-14
-21
-25
-27
-40
CHART BOOK | September 2020
5
June 2020
 Motilal Oswal Financial Services
Nifty-50: Cyclicals make a comeback in Aug’20
29 out of Nifty-50 stocks gained in Aug’20. Zee, Tata Motors and JSW Steel topped the charts at 47%, 37% and 23% MoM.
In CY20 YTD, 15 Nifty stocks have delivered positive returns with Cipla and Dr. Reddy’s gaining 49% and 48%, respectively.
Best and worst Nifty performers (MoM) in Aug’20(%) – Cyclicals outperformed in Aug’20 while Insurance and Telecom lagged
47
37
23
20
15
14
14
13
13
12
3
-3
-3
-4
-4
-4
-5
-6
-7
-7
-8
Best and worst Nifty performers (YoY) in CY20 YTD (%) – Healthcare and IT leading YTD rankings of performers
49
48
39
27
23
23
22
20
14
13
-6
-27
-27
-30
-32
-34
-34
-36
-36
-36
-58
CHART BOOK | September 2020
6
June 2020
 Motilal Oswal Financial Services
As restrictions ease, Covid-impacted stocks rallied in Aug’20
Retail, Hotels, Airlines and Multiplex played catch-up in Aug’20 with 8 out of 17 companies giving more than 20% returns in
Aug’20. However, only 4 out of 17 companies have given positive returns in CY20 .
MoM
36
35
23
22
21
21
20
15
15
21
14
YTD
47
22
12
12
10
9
6
15
2
8
-10
-28
-38
-53
-26
-30
-55
-51
-22
-39
-52
-54
-23
Source: Bloomberg, Based on BSE 500 companies
CHART BOOK | September 2020
7
June 2020
 Motilal Oswal Financial Services
BSE-200: 20 stocks up >20% in Aug’20; 25 stocks up >30% YTD CY20
137 out of BSE-200 constituents gained in Aug’20 with 20 stocks posting >20% gains.
CY20 YTD, 80 out of BSE-200 constituents gave positive returns with 25 stocks returning >30% (12 of 25 stocks are from Pharma).
Big gainers of BSE-200 (MoM, %)*
59
48
47
39
36
36
33
28
25
24
22
22
21
21
21
21
20
19
19 17 17 16 16 16 16 15 15 15 15
14
5
Big gainers of BSE-200 (CY20 YTD, %)*
172
77
68
66
65
65
63
52
50
47
46
46
45
44
44
42
40
37
35 35 34 33 29 28 27 27 27 26 25 22
-3
*List excludes Nifty 50 companies
CHART BOOK | September 2020
8
June 2020
 Motilal Oswal Financial Services
BSE-200: BFSI dominates list of laggards CY20 YTD
31% of BSE-200 companies yielded negative returns in Aug’20.
CY20 YTD, 60% of BSE-200 constituents declined – Financials like BoB, Canara Bank, PNB and Union Bank were the major laggards.
Big laggards of BSE-200 (MoM, %) *
5
-2
-2
-3
-3
-3
-3
-3
-3
-4
-4
-4
-4
-4
-4
-4
-5
-6
-6
-6
-7
-7
-7
-7
-8
-9
-9 -10 -10 -11
-13
Big laggards of BSE-200 (CY20YTD, %)
-3
-26 -26 -27 -27 -29 -29 -30
-31 -31 -31 -31 -33 -34 -34 -35
-37 -38 -39 -39 -40
-40
-40 -42 -43
-43 -45 -46 -51
-52 -53
*List excludes Nifty 50 companies
CHART BOOK | September 2020
9
June 2020
 Motilal Oswal Financial Services
Cash volumes higher in Aug’20; Non-institutional participation stable at ~70%
Aug’20 average daily cash volumes were up 6% MoM and well above CY20 average cash volumes.
Non-institutional participation was slightly lower at 70% of cash volumes (71% in Jul’20) .
750
600
450
300
150
Monthly Avg. Cash Volume (INR b)
Non Institution % to Cash Volume (RHS)
70
78
66
54
42
30
21000
16000
11000
6000
1000
Monthly Avg F&O Volume (INR b)
Cash % to Total Volumes
7.0
5.5
3.4
4.0
2.5
1.0
CHART BOOK | September 2020
10
June 2020
 Motilal Oswal Financial Services
NSE Midcap/Small-cap indices outperform v/s Nifty in Aug’20
The Midcap 100 and Small-cap 100 indices have led the rally since Unlock 1.0 with their outperformance increasing further in
Aug’20.
Consequently, on a rolling return basis, the Nifty Midcap 100 has outperformed the Nifty 50.
Nifty-50
Nifty Midcap 100 (Rebased)
14,000
12,000
10,000
8,000
6,000
Nifty Smallcap 100 (Rebased)
Nifty-50: +50%
Nifty Midcap: +52%
Nifty Smallcap: +66%
12,610
11,551
11,388
7,610
40
20
0
-20
-40
Nifty v/s Nifty Midcap 100 Y/y (Rolling 12M)
CHART BOOK | September 2020
11
June 2020
 Motilal Oswal Financial Services
Nifty back to pre-Covid levels: Who drove and dragged?
In Aug’20, Nifty rallied and came back to its pre-Covid levels. Reliance, Infosys and HUL have contributed the maximum to Nifty
during Mar-Aug’20 while financials like HDFC, HDFC Bank and ICICI Bank dragged the most.
Between Mar-Aug’20, O&G and Technology have seen the highest gain in weights while BFSI has seen a sharp cut of 570bp.
Nifty Mar'20- Aug'20 Points Contribution
138
502
84
70
40
33
-81
-81
-99
-165
-169
Nifty Sectoral Weights (%)
41.7
35.0
17.4
17.0
15.7
13.5
15.3
Mar'20
Aug'20
11.7
10.7
11.2
5.1
5.8
Source: Bloomberg, MOFSL. From 03 Mar’20 to 31 Aug’20
CHART BOOK | September 2020
12
June 2020
 Motilal Oswal Financial Services
Small-cap/Mid-cap outperforms Nifty by 8%/5%
Small-cap continued its upward journey and outperformed the Nifty by 8%.
The Mid-cap 100 has outperformed the Nifty by 5% in Aug’20.
SmallCap rel. to Nifty MoM
20%
10%
0%
-10%
-20%
13%
9%
8%
8%
7%
MidCap rel. to Nifty MoM
7%
5%
0%
-8%
-16%
CHART BOOK | September 2020
13
June 2020
 Motilal Oswal Financial Services
Valuations – Mid-caps at a premium on 12M forward P/E basis
The Nifty Midcap 100 12M forward P/E is at a premium to the Nifty 50 but still lower than the premium seen in Dec’17.
However, Mid-cap index has some loss-making companies. On a P/B basis, the Nifty trades at a premium to the Nifty Midcap 100.
32
26
20
14
8
Nifty 50
Midcap 100
12M fwd PE
3.6
Nifty
3.0
2.3
1.7
1.0
Midcap 100
12M fwd P/B
Source: Bloomberg, Consensus Estimates
CHART BOOK | September 2020
14
June 2020
 Motilal Oswal Financial Services
4 small-cap stocks more than doubled in CY20; 5 mid-caps returned >50%
Pharma and Chemicals continued to outperform in the small-cap space. 4 companies have more than doubled in CY20.
In the mid-cap space, 5 companies have returned more than 50%, again dominated by Pharma sector.
215
199
155
113
94
83
78
Perf. (%) CY 20
75
67
61
60
60
50
50
45
73
66
66
66
52
48
46
Perf. (%) CY 20
44
44
43
40
37
35
35
33
Source: Bloomberg, MOFSL. Based on Nifty Midcap 100 and Small cap 100
CHART BOOK | September 2020
15
June 2020
 Motilal Oswal Financial Services
From Staples O/P in lockdown to Discretionary O/P in Unlock
Prior to Unlock 1.0, Consumer Staples outperformed with investors looking for safety in uncertain environment.
As restrictions were eased and gradual normalcy restored, Discretionary started outperforming staples.
Cons Disc ex Autos
115
Autos and Ancillaries
Cons Staples
Pre- Lockdown
Lockdown
Unlock 1.0
100
85
70
55
40
Source: Bloomberg, BSE 200 companies. Companies in Cons Disc ex Autos United Breweries, Titan , Rajesh Exports, Voltas, Whirlpool, Crompton Gr. Con, Jubilant
Food., Asian Paints, Berger Paints, Kansai Nerolac, Page Industries, Varun Beverages. Auto and Auto Ancillaries- Exide.,Amara Raja Batt.,Motherson Sumi, Bosch,
Endurance Tech., Ashok Leyland, Tata Motors, Tata Motors-DVR, Eicher Motors, Hero Motocorp, TVS Motor, M & M, Maruti Suzuki, Bajaj Auto. Staples - ITC,
Britannia, Nestle India, Dabur, Emami, Marico, Godrej Consumer, Colgate-Palmoliv, Unilever, Gillette India, P & G Hygiene, Tata Consumer,
CHART BOOK | September 2020
16
June 2020
 Motilal Oswal Financial Services
Economy: 1QFY21 GDP drops 23.9%; FX reserves at record high
1QFY21 GDP contracted by 23.9% YoY. Agriculture was the sole exception with +ve contribution.
Significant FII buying and inflows from recent corporate deals elevated the FX reserves further and it stood at an all-time high of
USD537b.
11.0
1.0
-9.0
-19.0
-29.0
9.7
Real GDP growth % YoY
Agriculture
Industry
Services
GVA (% YoY)
3.1
10.0
0.0
(10.0)
0.4
(11.7)
(11.6)
-23.9
(20.0)
(30.0)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
550
500
450
400
350
FX Reseves (USD b)
4 period mov. Avg. of weekly change in FX reserves (USD b)
6.0
3.0
0.0
-3.0
-6.0
Source: Bloomberg, MOFSL, Foreign exchange reserves as on 21 Aug 2020
CHART BOOK | September 2020
17
June 2020
 Motilal Oswal Financial Services
Bond yields rise 30bp since MPC meeting; FII Aug inflow highest since Sep’10
Post the Monetary Policy meeting in Aug’20, bond yields have risen by 30 bps. Inflation print had risen and RBI had kept rates
unchanged.
FII inflows meanwhile at USD6.1b is the highest since Sep’10.
8.0
7.4
6.7
6.1
5.4
India 10 Year Bond Yield (bps)
6.1
5.8
6.4
6.1
5.6
5.1
FII Flow (USD b)
5.1
4.8
4.7
4.6
4.4
4.4
Sep'10
Aug 20
Oct 10
Feb 12
Mar 17
Mar 19
Sep 07
Jul 07
Dec 12
Oct 07
Source: Bloomberg, MOFSL
CHART BOOK | September 2020
18
June 2020
 Motilal Oswal Financial Services
Unemployment Rate: Now back at pre-COVID levels
As restrictions eased further, internals pertaining to jobs improved. Naukri Jobspeak index showed a rebound in Jun-Jul’20.
CMIE Unemployment rate at pre-COVID levels for both rural and urban, which indicates increase in economic activity.
2,600
2,100
1,600
1,100
600
Naukri Jobspeak Index *
* Total no. of new jobs posted in Jul'08 scaled to 1,000 & indexed
Rural
40.0
30.9
-49%
-42%
-47% -44%
Industry-wise Job Posting YoY
-38%
-38%
30.0
20.0
10.0
0.0
Urban
Total
-58%
-51%
-51%
-50%
9.9
Source: Naukri Jobspeak, CMIE.
CHART BOOK | September 2020
19
June 2020
 Motilal Oswal Financial Services
1QFY21 Earnings: Beats the muted expectations
Sector
(no of companies)
Automobiles (17)
Capital Goods (11)
Cement (10)
Consumer (15)
Financials (26)
Banks-Private (11)
Banks-PSU (2)
Life Insurance (2)
NBFC (11)
Healthcare (18)
Infrastructure (2)
Media (2)
Metals (5)
Oil & Gas (12)
Ex OMCs (9)
Retail (6)
Technology (13)
Telecom (4)
Utilities (5)
Others (21)
MOFSL Universe
(167)
Nifty (47)
Sensex (29)
Jun-20
668
310
225
422
1,034
443
335
113
144
458
11
19
751
2,515
1,126
64
1,167
425
446
263
8,776
6,585
4,220
Sales
Chg. %
YoY
-56.9
-36
-35.5
-15.4
10.6
18.3
13.7
-11
2.9
6.6
-21.6
-38.3
-25.8
-47.5
-43.7
-57.5
4.7
6.6
-5.8
-30.3
-30.4
-29.4
-20.5
Var. over
Exp. (%)
14.7
-0.5
-1.1
7
5.1
3.7
7.8
6.7
2.1
1
33.9
14.5
5.9
-1.3
-22.9
-5.9
-0.3
1.4
-5.3
-9.2
1.4
1
-5.4
Jun-20
2
21
52
95
740
390
224
9
117
112
2
6
83
325
187
-7
275
173
200
26
2,104
1,773
1,518
EBIDTA
Chg. %
YoY
-98.5
-61.3
-35.4
-26.3
21.2
23.2
27.7
10.6
5.7
22.9
-11.7
-52.6
-52
-13.2
-27.1
PL
11.2
18.2
7.1
-66.9
-10.4
-5.6
0
Var. over
Exp. (%)
LP
2.4
18.7
6.4
5.2
2.1
7.1
73.3
9.2
24.7
110.1
501.5
-2.7
-7.2
-22.8
Loss
4.9
6.4
17.4
-24.2
7.3
6.4
2.2
Jun-20
-79
11
31
92
290
177
43
8
63
88
1
4
-17
183
90
-12
254
-39
69
-9
868
775
699
PBT
Chg. %
YoY
PL
-76.6
-40.3
-26.2
-14.8
-12.6
-15.9
5.3
-21.5
29.2
-4
-67
PL
-28.7
-49
PL
2.7
Loss
-12.8
PL
-36.4
-29.6
-22.8
Var. over
Exp. (%)
Loss
12.2
85.4
9.2
0
-4.8
2
30.3
11.6
38.1
17,240
1,877.20
Loss
-13.3
-42.6
Loss
2.4
Loss
30.4
PL
16.4
15
0.8
Jun-20
-95
4
22
68
227
136
33
7
51
66
1
4
-30
158
90
-9
190
-50
67
-14
609
549
529
PAT
Chg. %
YoY
PL
-85.8
-37.9
-19.5
-0.3
1.5
10
4.1
-10.5
26.6
-3.1
-49.6
PL
-11.1
-26.8
PL
1.2
Loss
15.8
PL
-34.5
-25.5
-14.1
Var. over
Exp. (%)
Loss
4.6
89.2
13.1
2.1
-2.9
6.7
33.1
10.5
32.7
16,900
2,748.60
Loss
-1.4
-25.6
Loss
1.2
Loss
46.9
Loss
14.9
13.7
3.5
Source: MOFSL, Companies
CHART BOOK | September 2020
20
June 2020
 Motilal Oswal Financial Services
1QFY21 Earnings: EBITDA/PAT above expectations
1QFY21 corporate earnings for MOFSL Universe were above expectations.
EBITDA margins (Ex- Financials ) expanded by 270bp YoY to 17.6% YoY as companies implemented cost rationalization measures.
Sales declined 30% YoY, in-line
14
15 15
11 11
23 25 22
12
7
-2 -1 -4
EBITDA declined10.4 % YoY (v/s est. 16.5% YoY decline)
27
20
7
19
16 15 18
18
13
4
13 15
16
11
2
8
5
3
5
-4 -5 -4
-1
4
8
-30
-8
-4
-10
PAT declined 35% YoY v/s est. -43% YoY)
15
6
0
6
16 16
22
10
1
-7
-3
-4
-21
2
2
15
EBITDA margin (ex-Financials) expanded 270bp YoY to 17.6%
13
8 11 10
-35
Source: MOFSL, Companies
CHART BOOK | September 2020
21
June 2020
 Motilal Oswal Financial Services
1QFY21 Earnings: Highlighting top mid-cap earnings in MOFSL Universe
We have highlighted 15 Mid-cap companies from MOSL Universe below, which have reported strong earnings beat.
Sales (INR M)
Company
Laurus Labs
JSPL
Ipca Labs.
Tata Comm
Essel Propack
Alembic Pharma
Strides Pharma
Granules India
Jyothy Labs
Chola. Inv & Fin.
IIFL Wealth Mgt
Dalmia Bharat
MCX
SRF
Ashoka Buildcon
Equitas Holdings
EBITDA (INR M)
PBT (INR M)
PAT (INR M)
Upgrades/Down
grades (%)
FY22e
96
45
15
34
13
20
14
6
2
23
1
110
1
6
4
3
June-20 est actual Var. over June-20
actual
est YoY
(actual) YoY YoY Exp. (%) (actual)
YoY
9,743
15,344
44,029
7,415
7,818
7,356
4,287
9,830
1990
730
5,724
4,040
32
9
8
5
-5
14
-25
2
-3
-20
-45
16
77
-8
42
6
18
41
14
24
4
4
-6
-22
-8
-12
-35
20
34
7
31
-3
12
18
20
9
39
2
-3
2
15
-3
18
3
2783
22638
5863
10418
1466
4074
1510
1987
782
6372
690
6140
265
3723
819
1460
73
-13
26
10
15
28
-10
20
-25
-4
-23
-40
-31
-16
-65
29
247
4
195
26
35
81
22
68
19
8
-18
-8
-4
8
-25
19
Var.
Var.
Var.
June-20
actual
June-20
actual
over
est YoY
over
est YoY
over FY21e
(actual)
YoY
(actual)
YoY
Exp. (%)
Exp. (%)
Exp. (%)
101
20
135
15
18
41
36
40
59
12
6
52
39
28
111
-8
2215
2809
5446
3503
776
3595
773
1643
587
5810
1090
2950
714
2353
913
777
356
PL
32
27
36
26
-21
18
-38
-54
-28
PL
-27
-31
-88
-52
1264
2386
242
110
74
91
39
93
28
20
21
17
30
9
-5
-15
199
LP
160
66
28
52
75
64
107
164
68
LP
78
57
670
75
1718
1029
4437
2683
605
3015
560
1228
504
4310
819
1900
563
1860
691
600
433
PL
44
78
34
27
-15
-9
-37
-48
-18
PL
-23
-29
-86
-44
1338
988
263
237
114
100
64
47
40
37
33
29
29
16
7
2
170
LP
152
89
59
57
92
61
122
162
63
LP
67
63
679
81
123
60
36
53
21
20
18
12
16
16
1
339
10
15
18
8
91,585 -14
13,413 19
19,740 -24
15,452 -10
Source: MOFSL, Companies
CHART BOOK | September 2020
22
June 2020
 Motilal Oswal Financial Services
Key Mid-cap/Small-cap earnings upgrades in MOFSL Universe post 1QFY21 results
Company Name
Ipca Labs.
Tata Comm
Bharat Forge
JSPL
Dalmia Bharat
Laurus Labs
Essel Propack
Persistent Systems
PNB Housing
Cyient
India Cements
BSE
Source: MOFSL, Companies
Sector
Healthcare
Telecom
Automobiles
Metals
Cement
Healthcare
Others
Technology
NBFC
Technology
Cement
Others
MCap
(USD b)
3.5
3.4
3.2
3.0
1.9
1.7
1.3
1.1
0.7
0.6
0.5
0.3
EPS PREVIEW (INR)
FY21E
65.6
24.8
2.9
4.8
6.8
29.3
7.7
44.4
18.5
24.2
1.4
16.0
FY22E
76.9
38.3
15.1
10.3
15.2
36.1
10.2
59.5
48.1
27.9
4.2
23.9
EPS REVIEW (INR)
FY21E
89.0
38.1
4.6
7.7
30.0
65.4
9.3
53.7
44.7
30.3
4.5
24.7
FY22E
88.7
51.2
15.1
14.9
31.9
70.9
11.5
69.3
60.4
34.9
4.5
28.7
% Upgrade / Downgrade
FY21E
35.7
53.5
61.1
59.6
338.8
122.9
20.6
21.0
141.9
24.9
216.1
54.6
FY22E
15.4
33.6
0.5
44.7
110.2
96.5
12.5
16.5
25.7
24.9
5.7
20.1
CHART BOOK | September 2020
23
June 2020
 Motilal Oswal Financial Services
Nifty 500 Ownership: FII holding at 5-year low
FII holdings in the Nifty-500 remained near 5-year lows in 1QFY21.
DII holdings in the Nifty-500 was also marginally up to 14.7%.
Nifty 500: FII holding down unchanged QoQ in Jun’20
Value USDB
1,411
14.6
11.3
23.6
50.5
1,369
15.9
12.4
22.3
49.4
Jun-16
Promoter
1,743
16.0
12.7
22.2
49.1
Jun-17
FIIs
1,966
15.2
13.3
21.4
50.0
Jun-18
DIIs
Public
2,038
14.9
13.8
22.1
49.2
Jun-19
1,494
13.9
14.6
20.8
50.7
1,739
13.9
14.7
20.8
50.6
Jun-15
Mar-20
Jun-20
Nifty 50: FII holding up 33bp QoQ in Jun’20
Value USDB
903
14.4
12.0
27.7
45.9
Jun-15
853
16.3
13.1
26.6
44.0
Jun-16
Promoter
1,033
16.1
13.9
27.2
42.7
Jun-17
FIIs
1,170
15.1
14.6
26.7
43.6
Jun-18
DIIs
Public
1,266
15.0
15.2
27.1
42.8
Jun-19
924
14.0
16.2
25.5
44.3
Mar-20
1,059
13.9
16.6
25.8
43.8
Jun-20
CHART BOOK | September 2020
24
June 2020
 Motilal Oswal Financial Services
Nifty 500: Divergent sequential trends between FII and DII purchases
FIIs increased weights in Oil and Gas (O&G), Capital Goods and Retail while DII trimmed their holdings QoQ.
DII increased holdings in Telecom/Technology sector while FII reduced their holdings.
Nifty 500: FII holding down unchanged QoQ in Jun’20
FII QoQ chg (bp)
DII QoQ chg (bp)
Nifty 500: Trend in FII and DII holdings for Nifty-500 (%)
FII Holding (%) - LHS
24.5
23.5
22.5
21.5
20.5
11.3
23.6
12.4
22.3
12.7
22.2
21.4
22.1
DII Holding (%) - RHS
14.7 15.0
13.8 14.6
13.3
13.8
12.5
11.3
20.8 20.8
10.0
Nifty 500: Share of FIIs and DII see marginal increase QoQ
FII proportion of free float (%) - LHS
DII proportion of free float (%) - RHS
49.0 47.7
47.0
45.0
43.0
41.0
22.9
24.5
44.0
27.2
43.5
29.7
42.1
42.2
29.7
30.0
27.5
25.0
22.5
20.0
CHART BOOK | September 2020
25
June 2020
 Motilal Oswal Financial Services
Rural INDIA on an up-move: PM Kisan disbursement up 13% YoY; Monsoon above LPA;
Kharif sowing highest in past 6 years
20
10
0
(10)
(20)
(30)
2006
2008
2010
2012
2014
2016
2018
2020
9
-5
(% deviation from normal)
August
SWM
(% deviation from normal)
2020
2019
21
12
20
6
2
-19
North West
Central
South
East & North East
Kharif sowing, % of normal sowing
101.5
PM Kisan Disbursement (INR b)
175
166
148
182
95.1
95.7
95.8
96.7
94.9
90
Dec'18-
Mar'19
Apr'19-Jul'19
Aug'19-
Nov'19
Dec'19-
Mar'20
Apr'20-Jul'20
CHART BOOK | September 2020
26
June 2020
 Motilal Oswal Financial Services
Auto monthly sales: Aug’20 sales showed a pick up
Wholesale data for Aug’20 improved for most major OEMs. Sales data showed overall improvement for OEMs in August
Wholesale sales (Units)
Company
Maruti
M&M
Hero
TVS
Escorts
Ashok Leyland
Eicher- RE
Bajaj Auto
Apr-20
632
5505
0
9640
613
0
91
37878
May-20
18539
33901
112682
58906
6454
1420
19113
127128
Jun-20
57428
55902
450744
198387
10623
2394
38065
278097
Jul-20
108064
51080
514509
252744
4953
4775
40334
255832
Aug-20
124624
54884
584456
287398
7268
6325
50144
356199
24
6
Aug Wholesale (% above/below estimates)
4
2
0
-0
-1
-2
Wholesale Sales (%, YoY)
17
-1
-54
-86
-100
-92
-52
-26 -15
-87
8
-3
21
10
80
8
-27
-83
-100
-4
Apr-20
May-20
Jun-20
Jul-20
Aug-20
-81
-100-89
-56
-31
-33
-97
-81
-10 -1
-69
-100
-35 -26
-5
-70
-31 -33
-91
-9
CHART BOOK | September 2020
27
June 2020
 Motilal Oswal Financial Services
COVID-19 cases continue to surge
CHART BOOK | September 2020
28
June 2020
 Motilal Oswal Financial Services
COVID-19: Confirmed cases up 118% in Aug’20; Fatality rate down to 1.8%
Total confirmed cases of COVID-19 were up 118% in Aug’20 (MoM), while active cases were up 39%. Recovery rate has increased
to 77%.
Case fatality rate for India has dropped to 1.8% in Aug’20 from 2.2% in Jul’20.
Total Confirmed Cases
3,691,166
Total Active Cases
785,996
1,695,988
585,492
1,239
Jun'20
Jul'20
Aug'20
Mar'20
565,103
220,114
1,397
Mar'20
35,365
Apr'20
190,535
May'20
25,148
Apr'20
93,322
May'20
Jun'20
Jul'20
Aug'20
Recovery rate
65%
77%
3.3%
2.5%
Death Rate
2.8%
3.0%
2.2%
1.8%
48%
26%
9%
Mar'20
Apr'20
May'20
59%
Jun'20
Jul'20
Aug'20
Mar'20
Apr'20
May'20
Jun'20
Jul'20
Aug'20
Source: Ministry of Health and Family Welfare, MOFSL
CHART BOOK | September 2020
29
June 2020
 Motilal Oswal Financial Services
COVID-19: 62% of total active cases from 5 states
The COVID-19 virus seems to be getting more widespread – Maharashtra, Andhra Pradesh, Karnataka ,Tamil Nadu and Uttar
Pradesh account for 62% of the total active COVID-19 cases in India as at 31
st
Aug’20.
Gujarat and Maharashtra have the highest fatality rate at 3% each, while the average for India stands at 1.8%.
25
13
Total Active cases
25
11
7
7
4
3
2
2
2
3
3
3
2
2
Fatality Rate
2
2
1
1
1
1
Source: Ministry of Health and Family Welfare, MOFSL
CHART BOOK | September 2020
30
June 2020
 Motilal Oswal Financial Services
FII inflows at USD6.1b in Aug’20; 2
nd
highest monthly inflow ever
FII inflows in Aug’20 stood at USD6.1b – the second highest inflow ever in a month after Sep’10.
DIIs were net sellers in Aug’20 and outflows stood at USD1.5b.
8
4
0
-4
-8
-12
FII inflows in June highest since Nov’19
FII (USDb)
6.1
-8.4
9
6
3
0
-3
-6
Net DII (USDb)
7.5
-1.5
*As on 31 Aug’20
CHART BOOK | September 2020
31
June 2020
 Motilal Oswal Financial Services
Nifty Market cap nearing peak levels; Nifty Mid-cap market cap above Dec’19 levels
The Nifty-50’s market cap is now only 1% away from Dec’19 levels. The muted 8.7% CAGR since Dec’14 is symptomatic of the
tepid corporate earnings cycle.
However, the Nifty Mid-cap-100’s market cap is down 24% from its peak, although it is above Dec’19 level.
Nifty-50 M-cap (INR t) – Near Dec’19 levels
Nifty-50 (INR t)
Nifty’s m-cap almost halved during
GFC and then recouped in a year
42.7
55.5
54.5
57.1
1% correction
from peak
76.0
38.4
38.7
78.9
90.0
89.2
13.7
20.3
28.8
14.7
27.6
31.3
Nifty Midcap 100 M-Cap (INR t) – Above Dec’19 levels; down 24% from peak
Nifty Midcap-100 (INR t)
24% correction
from peak – M-cap now
21.9
16.7
8.2
6.9
9.0
11.0
17.0
16.7
15.9
16.1
16.7
2.8
3.6
6.5
2.8
6.7
CHART BOOK | September 2020
32
June 2020
 Motilal Oswal Financial Services
Nifty-50 composition: Technology big gainer; BFSI big laggards
Nifty weightages – Weight of Technology increased by 250bp to 15.3% from 12.8% in Dec’19. Metals weight has halved since
Dec’17 to 1.8% now. BFSI’s (Public, Private , NBFCs and Insurance) weightage is down 700bp from end-Dec’19 and now stands at
35%.
Healthcare sector has gained – from 2.1% to 3.0% currently – but, is still down from 7.3% seen in Dec’15.
Telecom has emerged as the biggest gainer and has nearly doubled its weight to 2.9% since the bottom in Dec’18. However, the
Weight in Nifty-50 (%)
Sector
Automobiles
Banks - Private
Banks - Public
NBFC+ Insurance
Capital Goods
Cement
Consumer
Healthcare
Metals
Oil & Gas
Telecom
Technology
Utilities
Miscellaneous
Nifty-50
Dec-04
6.7
4.7
5.8
2.1
4.0
2.8
7.8
6.3
8.2
27.1
6.3
14.5
1.9
2.0
100
Dec-08
2.5
5.0
5.4
2.3
7.7
1.7
6.5
2.6
4.8
24.5
11.6
9.0
13.3
3.3
100
Dec-12
8.8
16.9
4.7
7.9
5.9
4.2
12.3
5.0
3.8
12.3
2.0
11.4
4.5
0.5
100
Dec-19
5.7
27.8
2.6
11.6
3.2
1.5
10.2
2.1
2.4
12.5
2.2
12.8
2.8
2.6
100
Aug-20
5.8
23.2
1.7
10.1
2.4
2.0
11.2
3.0
1.8
15.7
2.9
15.3
2.5
2.5
100
Auto’s weight is
above Dec’19 levels
at 5.8%.
Oil and Gas captures
the value attributable
to RJio in RIL.
Consumer’s weight
in the Nifty stable
despite severe
underperformance
by ITC over the last
six years due to
inclusion of more
Consumer
companies in the
Nifty.
CHART BOOK | September 2020
33
June 2020
 Motilal Oswal Financial Services
Valuations: Key Observations
CHART BOOK | September 2020
34
June 2020
 Motilal Oswal Financial Services
Market cap-to-GDP ratio – Marginally above LPA
Market cap-to-GDP ratio has been volatile. It has moved from 79% in FY19 to 56% (FY20 GDP) in Mar’20 to 78% now (FY21E GDP)
– above the long-term average of 73%.
The lowest in the last two decades was 42% in FY04. However, the number of listed and traded companies back then were much
lower vis-à-vis today. The ratio hit a peak of 149% in Dec’07 during the 2003-08 bull run.
Market cap- to- GDP ratio (%)
No. of traded
companies was
just 2,640 in
2004 v/s 3,861
in Mar’20
82
GFC: Peak of 149% in Dec’07
103
95
83
88
71
52
42
55
Average of 73% for the period
81
64
66
69
79
83
79
Lowest
since the
GFC
78
56
CHART BOOK | September 2020
35
June 2020
 Motilal Oswal Financial Services
Yields: Earnings v/s bonds; at LT averages post equities’ rally in Aug’20
EY/BY ratio is near 10-year average both on forward and trailing basis, post the rally of the last three months.
1.8
1.5
1.3
1.0
0.8
0.5
Earnings Yield (12 month forward)/G-Sec Yield
EY/BY spiked sharply
during GFC
It remained below 1x for last six
years, except for a brief period
during demonetisation
0.80
LT Avg: 0.79%
2.0
1.6
1.2
0.8
0.4
Earnings Yield (12 month trailing)/G-Sec Yield
10 Year Avg: 0.74%
0.67
CHART BOOK | September 2020
36
June 2020
 Motilal Oswal Financial Services
Bonds: Spread v/s US 10-year expands; Currency stable, FX reserves at all-time high
The US 10-year yields have risen to 0.7% and Indian 10-year yields are just a shade below 6.1% post the Jacksone Hole conference
and the Monetary Policy Committee meeting.
On the currency front, the INR has displayed remarkable stability given the underlying all-time high forex reserves (USD537b). The
INR has depreciated by ~3% in YTDCY20.
India 10 Year yield
16
12
8
4
0
0.6
3.1
3.9
4.4
5.4
6.8
US 10 year yield
GFC
Fed cuts rates to zero post GFC
Fed increasing rates
Fed easing,
US- Sino trade
war, Covid-19
India fiscal tightening,
Strong eco growth led by global book,
Fed raising rates
6.9
6.0
90
75
60
45
30
USDINR
Pre GFC peak
INR had its best time during the 2003-07 in FX reserves
global bull run when GDP and Corporate
earnings growth was high and twin
deficits– CAD, FD – were amongst the
lowest in two decades.
Forex Reserves (USD b) (rhs)
Eurozone crisis, Taper tantrum, Yuan
devaluation. Taper tantrum episode in
2013 drove INR down sharply from 55 to 68
in just four months. This was a period of
high inflation and INR depreciation.
Low inflation characterized this
period post 2015. Rupee has been
relatively less volatile despite
several global headwinds. FX
reverses surging.
600
450
300
150
0
CHART BOOK | September 2020
37
June 2020
 Motilal Oswal Financial Services
Valuations: Nifty forward P/E at premium while P/B is at LT mean
The Nifty 12-month forward P/E of 20.5x is now at a premium of 16.5% v/s LT average of 17.6x.
At 2.6x, the Nifty’s 12-month forward P/B is at the historical average of 2.6x.
12-month forward Nifty P/E (x)
30
25
20
15
10
12 month forward Nifty P/E (x)
24.7
20.5
LT Avg: 17.6x
12-month forward Nifty P/B (x)
4.4
3.6
2.8
2.0
1.2
2.9
LT Avg: 2.6x
2.6
CHART BOOK | September 2020
38
June 2020
 Motilal Oswal Financial Services
Valuations: Nifty trailing P/E at premium to LT; P/B at a discount
The Nifty 12-month trailing P/E of 24.2x is trading at ~30% premium to its LT average of 18.7x since Mar’05.
At 2.8x, the Nifty 12-month trailing P/B is below the historical average of 3x.
12-month trailing Nifty P/E (x)
30
26
22
18
14
10
12 month trailing Nifty P/E (x)
25.0
LT Avg: 18.7x
24.2
12-month trailing Nifty P/B (x)
5.3
4.5
3.8
3.0
2.3
1.5
12 month trailing Nifty P/B (x)
LT Avg: 3x
3.1
2.8
CHART BOOK | September 2020
39
June 2020
 Motilal Oswal Financial Services
Sectoral valuations: Private Banks at LT mean while IT at +1SD
Pvt Banks’ valuations near LT mean
4.3
3.5
2.8
2.0
1.3
0.5
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
3.4
2.8
2.3
1.9
2.4
1.0
Technology trading at +1SD
28.0
22.0
16.0
10.0
4.0
26.4
P/E (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
20.8
17.4
13.9
7.8
20.5
CHART BOOK | September 2020
40
June 2020
 Motilal Oswal Financial Services
Sectoral Valuations: Metals above -1SD; Oil and Gas near LT mean
Metals: Valuations above -1SD; at book value
6.0
4.5
3.0
1.5
0.0
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
4.4
2.2
1.5
0.8
0.6
1.0
Oil & Gas: Valuations above LT mean;
3.7
2.9
2.1
1.3
0.5
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
3.1
2.0
1.7
1.3
1.1
1.8
CHART BOOK | September 2020
41
June 2020
 Motilal Oswal Financial Services
Sectoral Valuations: Consumer off 11% from peak, while Autos near -1SD
Autos valuations at -1SD; down 41% from peak in Dec’17
P/B (x)
5.0
4.0
3.0
2.0
1.0
0.0
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
3.7
3.1
2.5
1.5
4.4
2.6
Down 41% since
peak in Dec-17
Consumer valuations above 1SD; 11% away from peak
P/E (x)
52.0
42.0
32.0
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
47.8
40.1
32.1
24.1
17.4
Down 11% since peak
in Aug-18
42.7
22.0
12.0
CHART BOOK | September 2020
42
June 2020
 Motilal Oswal Financial Services
Top Ideas
Company
MCap
(USD B)
EPS (INR)
FY20
31.2
38.9
-7.5
12.3
16.6
17.1
48.9
14.2
86.7
3.7
95.4
51.4
22.6
16.8
6.0
48.9
EPS CAGR
FY22E
44.2
48.2
5.4
24.3
18.7
22.1
86.3
18.3
113.8
5.6
146.1
88.7
28.9
26.4
7.7
83.8
PE (x)
FY22E
48.5
19.2
102.1
16.1
14.6
50.8
38.6
46.6
21.7
20.6
19.1
23.1
24.4
18.4
25.1
28.2
PB (x)
FY21E
10.2
5.6
4.5
2.0
2.4
14.5
9.5
2.8
6.6
3.2
4.5
5.6
4.3
10.9
12.9
6.0
ROE (%)
FY21E
28.2
25.2
7.7
8.8
16.1
13.5
22.2
15.1
28.1
3.2
23.2
27.3
13.5
58.4
43.7
15.9
FY21E
34.3
41.6
10.2
16.1
17.3
10.3
69.7
16.1
95.2
1.2
131.5
89.0
20.7
24.0
6.1
57.7
FY20-22, % FY21E
18.9
11.3
NM
40.8
6.1
13.7
32.8
13.3
15
23
24
31
13
25
14
31
62.4
22.2
53.9
24.4
15.9
109.0
47.8
52.9
26.0
99.1
21.2
23.1
34.1
20.3
31.5
40.9
FY22E
10.1
4.9
4.3
1.8
2.1
12.7
7.9
2.4
5.5
2.9
3.8
4.7
3.7
9.2
11.2
5.0
FY22E
21.0
25.4
4.3
12.1
15.2
26.6
22.4
16.0
27.7
14.6
21.6
22.1
16.3
54.3
47.9
19.3
Stocks
away from (%)
52 Week 2 Year
high
high
-18
-6
-10
-29
-6
-19
-1
-17
-3
-24
-8
-5
-42
-14
-5
-26
-14
-5
-8
-29
-9
-18
0
-16
-2
-43
-5
-2
-40
-10
-2
-26
PREFERRED LARGE-CAP STOCKS
Hind. Unilever
Infosys
Bharti Airtel
ICICI Bank
Wipro
Titan Company
Divi's Lab.
SBI Life Insurance
L & T Infotech
Motherson Sumi
Alkem Lab
Ipca Labs.
AU Small Finance
ICICI Securities
Indian Energy Exchange
Team Lease Serv.
69
58
41
35
21
14
12
11
5.8
5.0
4.6
3.5
3.0
2.1
0.8
0.6
PREFERRED MID-CAP STOCKS
As on 02 Sep’20
CHART BOOK | September 2020
43
June 2020
 Motilal Oswal Financial Services
NOTES
June 2020
 Motilal Oswal Financial Services
NOTES
June 2020
 Motilal Oswal Financial Services
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
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/Associate%20Details.pdf
Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
MOFSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOFSL and/or its associates and/or Research Analyst may have actual/beneficial ownership of 1% or more
securities in the past 12 months. 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. Research Analyst may have served as director/officer, etc. in the
subject company in the past 12 months. MOFSL and/or its associates may have received any compensation from the subject company in the past 12 months.
In the past 12 months, MOFSL or any of its associates may have:
a) managed or co-managed public offering of securities from subject company of this research report,
b) received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c) received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d) Subject Company may have been a client of MOFSL or its associates in the past 12 months.
MOFSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOFSL has incorporated a
Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the 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. 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.
June 2020
 Motilal Oswal Financial Services
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.
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.
Disclosure of Interest Statement
Companies where there is interest
Analyst ownership of the stock
No
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 Financial Services Limited(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.
June 2020
 Motilal Oswal Financial Services
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.
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.
June 2020