Motilal Oswal Financial Services

Sector Update | 21 September 2020

Oil & Gas

IGL: Looking for the right tilt

between risk and rewards

CGDs to record 10% volumes CAGR over next decade

Key business perspectives from Annual Reports of IGL IN, MAHGL IN, and GUJGA IN



The government intends to increase the share of natural gas in India’s primary energy

mix to 15% by 2030 from 6% currently.

To promote a clean-fuel economy, the government has adopted a systematic

approach to focus on all aspects – upstream, midstream, and downstream, including

CGD network development.

We look at the Annual Reports of all the listed CGDs to understand the key takeaways.

Customer additions across segments for all companies



GUJGA: Gas and LPG prices on

a see-saw; Margins to remain

stable

IGL added 270k new residential consumers, a strong 22% addition, taking the

total number of consumers to 1.4m. In comparison, MAHGL added 100k

consumers, taking the total to 1.26m households. GUJGA also added 93k

households, taking the total number to 1.4m.

GUJGA added

52 net new

CNG stations, near IGL’s number of 55, while MAHGL

added just 20 CNG stations. With this, IGL took its total count to 555, GUJGA to

396, and MAHGL to 256.

GUJGA services >3,700 industrial consumers and 12,600 commercial customers.

IGL services >5,500 industrial and commercial consumers. MAHGL services 3,949

commercial and 72 industrial consumers.

In terms of pipeline infrastructure, GUJGA remains ahead of the other two with

a total network of 24,300km (MDPE/steel), while IGL has a total network of

14,605km and MAHGL of 5,630km.

IGL’s gross margin expanded to INR11.9/scm in FY20 from INR11/scm in FY19.

MAHGL also raised its gross margin to INR14.8/scm in FY20 from INR12.9/scm in

FY19. Both companies managed to achieve this despite being predominantly

CNG players on account of declining domestic gas prices. GUJGA, a

predominantly industrial play, maintained its gross margins at INR7/scm, almost

flat YoY.

Largely flat opex resulted in IGL expanding its EBITDA/scm to INR6.4/scm in FY20

from 5.8/scm in FY19 and MAHGL expanding its EBITDA/scm to INR9.8/scm in

FY20 from INR8.2/scm in FY19.

With much higher volumes in FY20, GUJGA was

instead able to cut its opex/scm by ~20% YoY in FY20, with EBITDA/scm

expanding to INR4.7 in FY20 from INR4.1 in FY19.

In FY20, the companies adopted the new lower tax rate and recorded DTL

benefits (MAHGL: INR0.6b, IGL: 11.4b, GUJGA: INR3b), leading to a jump in full-

year PAT (by 45% YoY, 44% YoY, ~2x YoY, respectively).

With the 10

round of CGD bidding, 70% of the country’s population and 50%

of the total area have been covered. With the completion of these projects,

CGDs’ sales volumes are expected to grow at a CAGR of 10% through 2020–30.

GUJGA was awarded six geographical areas (GAs) in the 10

round. Additionally,

the company is looking forward to the 11

round of CGD bidding, which may

include GAs contiguous to its operating areas.

EBITDA margin expansion across the board



Opportunities galore – prefer GUJGA



Swarnendu Bhushan- Research Analyst

(Swarnendu.Bhushan@MotilalOswal.com)

Sarfraz Bhimani

2020

21 September

- 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.

Oil & Gas



IGL sees a growing CNG ecosystem with auto manufacturers such as Maruti,

Bajaj, Mahindra, Ford, and Hyundai launching more company-fitted CNG

variants. Post the Delhi Pollution Control Board’s decision to ban fuel oil and

petcoke in NCR, the company has been able to convert 90% of its industrial

customers to PNG. It expects the price differential of CNG v/s liquid fuel to

continue driving the conversion of petrol vehicles to CNG. It further seeks to

expand operations through M&As at other CGDs.

MAHGL intends to add 1.1m households and take its coverage to 400 CNG

outlets.

Our preference stays with GUJGA as we believe the focus on industrial pollution

would aid volume growth for the company, while CNG largely presents a

relatively less-exploited segment. Valuing it at 22x FY22 EPS of INR16.4, we

reiterate GUJGA as one of our top buys, with target price of INR360.

Exhibit 1: Peer comparison – valuation snapshot

Company

(%)

(INR) Upside

EPS (INR)

P/E (x)

P/BV (x)

EV/EBITDA (x)

ROE (%)

Div.

Yield

FY20

0.4

0.7

3.8

Gujarat Gas

360

Indraprastha Gas

470

Mahanagar Gas 1,200

FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E

13 17.3 11.4 16.4 18.4 28.0 19.5 6.7 5.6 4.6 13.5 14.7 10.7 43.6 21.7 25.9

12 16.2

8.9 17.2 25.8 47.1 24.4 5.8 5.3 4.5 17.8 28.3 15.0 28.3 11.8 20.1

30 80.3 50.5 75.0 11.5 18.2 12.3 3.1 2.8 2.6 7.3 10.5 6.9 29.7 16.3 22.0

Source: MOFSL

Exhibit 2: CNG stations of CGDs

GUJGA

IGL

421

326

233

180

340

233

188

252

MAHGL

500

344

291

555

396

Exhibit 3: CNG stations of CGDs – net additions

GUJGA

IGL

53 54

223

236

256

52 55

MAHGL

446

203

FY15

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Companies, MOFSL

Exhibit 4: HDPE + steel pipeline (kms)

GUJGA

IGL

19,974

15,000

9,647

17,120

10,151

10,718

11,674

13,029

14,605

MAHGL

21,640

23,200

24,300

Exhibit 5: HDPE + steel pipeline (kms) – net additions

GUJGA

IGL

MAHGL

4,426

FY15

4,647

FY16

4,838

FY17

5,042

FY18

5,310

FY19

5,630

FY20

FY16

FY17

FY18

FY19

FY20

Source: Companies, MOFSL

21 September 2020

Oil & Gas

Exhibit 6: Coverage of population of India and the area

Source: Company, MOFSL

Key highlights from GUJGA’s Annual Report



GUJGA was awarded six areas in the 10

CGD round:



The Sirsa, Fatehabad, and Mansa (Punjab) districts in the states of Haryana

and Punjab.



The Ujjain, Dewas, and Indore districts (except the respective areas already

authorized) in Madhya Pradesh.



The Jhabua, Banswara, Ratlam, and Dungarpur districts in Rajasthan and

Madhya Pradesh.



The Ferozepur, Faridkot, and Sri Muktsar Sahib districts in Punjab.



The Hoshiarpur and Gurdaspur districts in Punjab



The Jalore and Sirohi districts in Rajasthan.

In FY21, the Petroleum and Natural Gas Regulatory Board (PNGRB) is likely to

announce the 11

CGD bidding round, wherein it is likely that many new GAs,

contiguous to GUJGA’s existing CGD operations, shall also be included. This

would give the company another opportunity to expand its footprint.

GUJGA has witnessed steep volume growth of ~63% YoY in industrial customers.

This was primarily on account of the ban on the usage of coal gasifiers at the

Morbi industrial cluster (deemed the ‘ceramic hub’ of India), resulting in the

switchover to natural gas. GUJGA laid a 6-inch steel pipeline of 5km in a record

28 days.

GUJGA added more than 93k residential customers and commissioned 62 new

CNG stations during the year.

GUJGA has been able to sustain volumes with

growth of around 6% in the Residential sector and around 10% in the CNG

sector. Moreover, it plans to aggressively penetrate in the PNG (domestic and

commercial) and CNG sectors, which are comparatively less volatile.

21 September 2020

Oil & Gas

Key highlights from IGL’s Annual Report



IGL caters to more than 1.1m CNG vehicles, 1.4m domestic PNG customers, and

over 5,500 commercial and industrial customers.

It added 55 new CNG stations and around 1,600km of pipeline network. During

the year, the company provided more than 272k new PNG domestic

connections. This is the highest number of connections in a single financial year

in the history of the company as well as any other CGD company in the country.

The company has recently started sales in new areas of Kanpur and Kaithal.

It has undertaken various new initiatives for future growth. In association with

the Indian Oil Corporation, it is setting up an H-CNG station as a pilot project –

the first of its kind in India.

It achieved growth of 8.4% in the CNG business and other milestones by

setting up the 550th CNG station in FY20.

It introduced prepaid cards for its CNG customers to promote digital payments.

More than 90,000 cards are under circulation to date, which cater to 110,000

vehicles. The company has undertaken more initiatives in digital payments at

CNG stations for the benefit of its customers, wherein UPI payment was

introduced at CNG stations through the wallet payment mode.

More than 272k new connections were provided – the highest number of

connections in a single financial year in the history of the company.

It increased its steel pipeline network to 1150km in FY20 from 1006km in FY19,

and its MDPE network to 13,455km in FY20 from 12,022km in FY19.

The company had a total of 13.74 Lakh domestic connections in Delhi and other

geographical areas as of 31

March’20.

Growth of around 22% was seen in sales volumes in the Industrial segment and

around 8% in the Commercial segment over 2019–20.

In terms of number of customers, the Industrial customer base increased to

2,435 in March’20 from 1,770 in March’19, and the Commercial customer base

rose to 3,143 in March’20 from 2,506 in March’19.

The company has been looking for organic as well as inorganic growth as a

part of its corporate strategy.

The matter of taking over all the CGD activities in Gurugram district from

Haryana City Gas Distribution Pvt. Ltd. is sub-judice in the Supreme Court of

India.

DTC and DIMTS plan to add 1,000 and 400 new CNG buses, respectively, to

their fleet, adding to the company’s CNG sales.

In the coming years, other state pollution control boards, mainly in NCR, are also

expected to mandate the use of PNG by Industrial customers, in line with DPCC’s

directives. This would thus further boost natural gas volumes.

21 September 2020

Oil & Gas

Key highlights from MAHGL’s Annual Report



MAHGL improved PNG coverage by adding 1,05,371 households during the year,

thereby taking the cumulative customer base to more than 1.26m households.

It added 329 industrial and commercial customers to reach over 3,949 small

commercial establishments and 72 industrial establishments.

The company has augmented the capacity of 21 stations to serve an estimated

0.75m vehicles. The current CNG compression capacity was propelled to about

35.10 lakh kg/day, an increase of 2.05 lakh kg/day in terms of capacity.

Also, it expanded the network in Raigad with 14 CNG stations and plans to add

more stations in the coming financial year.

The company has successfully registered 7,290 sq. m. plot at Savroli in the

Raigad district for constructing a City Gate station. This would enable the

company to further extend its pipeline network in the GA-3 area.

It successfully commissioned the main trunk steel pipeline laid from Durgadi

Creek to Bhiwandi Bypass Naka. It is 5,158 meters long and facilitates gas for the

Kongaon area.

The company also successfully commissioned a 12” NB steel pipeline laid across

the Kalamboli railway station, with a total length of over 800 meters. This has

made the looping of both CGS (Mahape and Taloja) in the Navi Mumbai area

and would facilitate uninterrupted gas supply.

It plans to expand the steel pipeline network to around 600km and the PE

pipeline network to over 7,600km.

The CGD market in India is projected to grow at a CAGR of 10% from an

estimated 9,223mmscm in 2020 to 25,570mmscm by 2030.

Exhibit 7: India City Gas Distribution Region Wise – growth projection

Source: Company, MOFSL

21 September 2020

Oil & Gas

Margin and volume snapshot for FY20

Exhibit 8: Gross margin of CGDs (INR/scm)

GUJGA

IGL

MAHGL

14.8

9.4

9.6

5.9

FY15

FY16

10.7

12.2

11.1

6.6

12.9

3.6

11.0

7.0

11.9

3.0

7.0

1.6

FY18

FY19

FY20

FY15

FY16

3.2

3.3

1.9

FY17

3.6

2.0

4.0

2.2

4.3

Exhibit 9: Opex/scm of CGDs (INR/scm)

GUJGA

4.5

IGL

4.4

MAHGL

5.3

5.2

5.5

9.0

9.2

10.4

6.4

1.8

FY20

FY17

FY18

FY19

Source: Companies, MOFSL

Exhibit 10: EBITDA/scm of the CGDs (INR/scm)

GUJGA

IGL

MAHGL

7.9

6.9

5.6

5.8

5.1

6.0

3.8

5.8

3.9

5.8

6.4

4.7

8.2

9.8

Exhibit 11: Segmental volume breakdown (FY20)

CNG

PNG Dom

PNG I/C

18%

15%

12%

78%

74%

16%

73%

4.1

FY15

FY16

FY17

FY18

FY19

FY20

GUJGA

IGL

MAHGL

Source: Companies, MOFSL

Exhibit 12: Total volumes (mmscmd)

GUJGA

IGL

MAHGL

6.2

5.4

5.2

2.7

FY18

5.9

6.4

6.5

9.4

Exhibit 13: Total volume growth (%) YoY

GUJGA

IGL

MAHGL

5.5

3.8

4.0

2.4

FY16

4.6

2.6

FY17

2.4

FY15

2.9

FY19

3.0

FY20

FY15

FY16

FY17

FY18

FY19

FY20

Source: Companies, MOFSL

21 September 2020

Oil & Gas

Valuation and View

Gujarat Gas - our top Buy (at INR360/share, valuing it at 22x FY22E EPS)



In the long term, we believe industrial volumes (further supported by the NGT’s

reforms in India) would be the clear winner for growth. Any directive by the NGT

to ban usage of Fuel Oil could lead to short-term incremental volume boost of 2-

3mmscmd for GUJGA.



With ~400 CNG outlets, GUJGA sells only 1.5mmscmd of CNG v/s 4.5mmscmd

that IGL sells in NCR alone. GUJGA is expected to establish ~100 CNG stations

over the next 2-3 years, increasing its penetration in the CNG segment.



The newly awarded 16-17 cities could see volumes of 2.5–3mmscmd over the

next 4-5 years. The Vasai-Virar region is the next big focus market for GUJGA

after Thane – GUJGA is planning to supply gas through a virtual network there.



We believe that the company should see a major volume boost of ~10% CAGR

over the medium term on the highest volume base amongst peers.

Mahanagar Gas - maintain Buy (at INR1,200/share, valuing it at 16x FY22E EPS)



BEST has inducted ~300 CNG buses to date of its total plan of adding ~500 buses

and expects another ~150 CNG buses to be added by the end of Oct’20. BEST is

also likely to add another 800–1,000 CNG buses over and above the current

ongoing induction of 500 buses.



MAHGL has gas pipeline connectivity in three of the four GAs classified by NGT

under polluted areas (and is prepared to supply gas in the fourth GA via a virtual

pipeline). PNG-commercial (penetration is just ~20% in MAHGL’s GAs) is already

equipped with pipeline infrastructure; only last-mile connectivity is needed.



The company is also looking forward to the 11th CGD round (~44 GAs are up for

offer) and may bid for the same once the round is open for bidding.



MAHGL had earlier guided for volume growth of 6–7% over the near-to-medium

term. We model an in-line volume growth CAGR of ~6% over FY20–22E in light

of developments at Raigad (peak demand of 0.6mmscmd expected in three

years) and a potential boost in CNG volumes from BEST bus additions.

Indraprastha Gas – maintain Neutral (at INR470, valuing it at 24x FY22E EPS)



IGL has ~75% of its volumes coming from CNG. This segment led growth for the

last couple of years, led by the proliferation of CNG stations and higher

conversions. However, opening up of schools and normalization of public

transportation (for CNG) and commercial space like malls/restaurants (for PNG)

may take more time.



Nevertheless, over the short-to-medium term, IGL could increase its sales

volumes from new areas such as Rewari, Karnal, and Muzaffarnagar; Gurugram;

and the newly awarded (3) GAs in the 10th round. IGL might consider inorganic

growth in the coming years. It is also looking at international prospects (such as

Myanmar) and has an MoU with Osaka Gas.



We reiterate our belief in the company’s volume trajectory (in line with

management guidance), led by growth in NCR, intercity travel on CNG, higher

conversions to CNG due to the BS6 implementation, and contributions from

newer GAs. Management remains confident of achieving double-digit growth

from next year. For FY22, we build-in volume growth of 14%, over FY20 levels,

to 7.6mmscmd (v/s 6.4/4.6mmscmd in FY20/FY21).

21 September 2020

Oil & Gas

Our model estimates and valuations

Exhibit 14: GUJGA has the best ROE profile

Exhibit 15: While MAHGL has the highest dividend yield

MAHGL

ROE (%)

GUJGA

IGL

Dividend Yield (%)

MAHGL

GUJGA

IGL

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E

Source: Companies, MOFSL

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E

Source: Companies, MOFSL

Exhibit 16: GUJGA is set to generate FCF of INR21b…

Exhibit 17: With FCF yield of ~15% over FY21–22

FCF (INR bn)

GUJGA

IGL

MAHGL

1413

FCF Yield (%)

3 2

GUJGA

MAHGL

IGL

8 7

3 3 2

FY15

(4)

FY16 FY17

FY18

FY19

(1)

(2)

FY20 FY21E FY22E

Source: Companies, MOFSL

FY15

-3

FY16 FY17

-1 -1

FY18

FY19

FY20

FY21E FY22E

Source: Companies, MOFSL

Exhibit 18: IGL trades at a huge premium to peers…

Exhibit 19: …remains expensive on both EV/EBITDA and PE

IGL

EV/EBITDA (x)

1921

MAHGL

GUJGA

2223

13 1314

P/E (x)

MAHGL

GUJGA

IGL

2526

26 25

17 19

1318

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E

Source: Companies, MOFSL

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E

Source: Companies, MOFSL

21 September 2020

Oil & Gas

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

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

21 September 2020

Oil & Gas

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.

21 September 2020