7 February 2022
3QFY22 Results Update | Sector: Chemicals
Clean Science
Estimate changes
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)
CLEAN IN
106
245 / 3.3
2698 / 1423
-/-/-
1261
CMP: INR2,306
TP: INR2,175 (-6% )
Neutral
Robust demand outlook; continue to venture into new products
Financials & Valuations (INR bn)
Y/E March
FY22E FY23E FY24E
Sales
6.5
9.2 12.1
EBITDA
2.9
4.5
6.0
PAT
2.2
3.4
4.6
EPS (INR)
20.5 32.2 43.5
EPS Gr. (%)
9.8 57.0 35.1
BV/Sh.(INR)
68.2 95.6 132.6
Ratios
Net D:E
(0.1) (0.3) (0.4)
RoE (%)
34.5 39.3 38.1
RoCE (%)
33.5 38.5 37.6
Payout (%)
15.0 15.0 15.0
Valuations
P/E (x)
113.0 71.9 53.3
P/BV (x)
34.0 24.2 17.5
EV/EBITDA (x)
85.8 54.2 39.8
Div. Yield (%)
0.1
0.2
0.3
FCF Yield (%)
0.4
1.0
1.5
Shareholding pattern (%)
As On
Dec-21
78.5
4.3
5.1
12.2
Promoter
DII
FII
Others
Sep-21
78.5
4.7
3.9
12.9
FII Includes depository receipts
Clean Science (CLEAN) reported a beat on our revenue, however sharp rise in
raw materials resulted in gross margin collapsing to 65% vs. our expectation
of 70%. Despite higher absolute gross margin, higher operating expenditure
led to in-line EBITDA (margin at 42.1% v/s 49.8% in 3QFY21 and 44.9% in
2QFY22). The Pharma and FMCG Chemicals segment performed better while
the Performance Chemicals segment saw weak performance in the quarter.
The company has suggested that new contracts for 4QFY22 may result in
better margins in the quarter.
It commenced production of two new products- PBQ (Para benzoquinone)
and TBHQ during 3QFY22. The management expects to generate revenue of
more than INR1b from PBQ and TBHQ going forward. PBQ is an import
substitute, with CLEAN being the only company in India to manufacture it.
BHA capacity has been raised by 50%, with an additional line of MEHQ and
Guaiacol. An additional 50% capacity increase is expected by the middle of
Mar’22. BHA also saw a volume growth of 50% YoY in 3QFY22. Production of
HALS 701 and 770 should start by Sep’22.
Considering the robust demand outlook for CLEAN and its plans to capture a
higher market share for its products, we build in a revenue/EBITDA/EPS CAGR
of ~33% each over FY21-24E.
We revise our FY23E/FY24E revenue and EPS
estimates by 13%/21% each due to the increase in revenue growth from
HALS and other product launches from FY23 onwards.
We leave unchanged
our EBITDAM estimate for FY23E/FY24E at 49%/50% v/s an EBITDAM of
42%/44% in 3Q/FY22E.
Given its market domination and ability to sustain high margins in the
industry,
we value CLEAN at 50x FY24E EPS
(it commands a ROIC of ~77% in
FY21) to arrive at our TP of INR2, 175/share. Despite building in aggressive
numbers, we don’t see any upside in the stock and maintain our Neutral
rating.
CLEAN reported a revenue of INR1.8b (12% beat, up 44% YoY and 18% QoQ).
Gross margin stood at 65% (down 360bp QoQ, v/s 76% in 3QFY21).
EBITDA margin shrank to 42.1% (v/s 49.8% in 3QFY21 and 44.9% in 2QFY22),
with EBITDA at INR761m (in line, up 22% YoY and 11% QoQ).
PAT stood at INR580m (3% lower than our estimate, up 18% YoY and 8%
QoQ).
In 9MFY21,
revenue rose 27% YoY to INR4.8b (driven by 86% growth in Pharma
and FMCG Chemicals segments), with EBITDA up 14% at INR2.2b (margin
contracted to 45% v/s 50% in 9MFY21). PAT grew 14% YoY to INR1.7b.
Continuing its R&D pursuit, it forayed into the Hindered Amine Light
Stabilizers (HALS) series (estimated global market size of USD1b), with CLEAN
being the first company to develop the HALS series in India.
EBITDA in line; margin shrinks for the third consecutive quarter
Valuation and view
Swarnendu Bhushan – Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com)
Sarfraz Bhimani, CFA – Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com)
7 February
1
Motilal Oswal
2022
research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Clean Science
Unit III will be the company’s first production line dedicated to the HALS series
(expected to be commercialized by Sep’22),
while additional production lines
would be installed in Unit IV. CLEAN has acquired land for Unit IV, which will
focus on stabilizers and other downstream intermediates that find use in
Pharma and Agro industries.
CLEAN is likely to generate an FCF of INR6.9b over FY22-24E, with a capex of
INR3.5b planned over this period. It is funding this capex via internal accruals
and will remain net cash going forward as well.
We value the company at 50x FY24E EPS to arrive at our TP of INR2, 175/share.
Despite building in aggressive numbers, we don’t see any upside in the stock
and maintain our Neutral rating.
The key risks to our recommendations are: a) continued product/technological
innovation, which have helped CLEAN differentiate it from others, b) a sharp fall
in the prices of key raw materials such as Phenol, which could expand its margin.
FY21
2Q
3Q
1,402 1,254
NA
NA
75%
76%
702
625
50.1
49.8
40
47
0
1
76
71
738
648
738
648
195
158
26.4
24.3
543
491
543
491
38.7
39.1
FY22
2Q
3Q
1,532 1,808
9.2
44.2
69%
65%
687
761
44.9
42.1
61
60
0
0
86
75
712
776
712
776
177
196
24.9
25.3
535
580
535
580
34.9
32.1
FY21
5,124
76%
2,590
50.5
172
1
256
2,673
2,673
689
25.8
1,984
1,984
38.7
FY22E
6,465
26.2
68%
2,861
44.3
250
1
291
2,901
2,901
722
24.9
2,179
2,179
33.7
(INR m)
FY22E
Var.
3QE
1,608
12%
28.2
70%
769
-1%
47.8
63
-5%
0
91 -18%
796
-3%
796
-3%
200
-2%
25.2
596
-3%
596
-3%
37.1
Consolidated quarterly snapshot
Y/E March
Gross Sales
YoY Change (%)
Gross Margin (%)
EBITDA
Margin (%)
Depreciation
Interest
Other Income
PBT before EO expense
PBT
Tax
Rate (%)
Reported PAT
Adj. PAT
Margin (%)
1Q
1,129
NA
73%
561
49.7
42
0
53
572
572
153
26.8
419
419
37.1
4Q
1,339
NA
79%
701
52.4
43
0
57
715
715
184
25.7
531
531
39.7
1Q
1,463
29.6
71%
713
48.8
58
0
65
721
721
175
24.2
546
546
37.3
4QE
1,662
24.2
66%
699
42.0
71
1
65
692
692
175
25.2
517
517
31.1
Highlights from the management interaction
Current business environment and 3QFY22 highlights
Raw material, freight, and fuel and power cost resulted in cost pressures.
Further price improvements are likely in 4QFY22 as calendar year contracts are
renewed.
PBQ: CLEAN is the only company to begin manufacturing in India via an
innovative route.
The management sees good demand for PBQ in India. The product is currently
being imported from China and there too only two companies manufacture it.
PBQ finds application in the Agro industry as well, apart from stabilizers.
It has an annual revenue potential of INR1b.
TBHQ: All customers who buy BHA require this product.
It has a huge export potential and adds to its current product offerings of BHA
and AP.
Capex guidance
Capex pegged at INR1.5b in FY22, of which INR1.1b has been spent till date.
It had a cash balance of INR2.8b at the end of 3QFY22.
7 February 2022
2
 Motilal Oswal Financial Services
Clean Science
Capex is pegged at INR2b each in FY23 and FY24.
It expects an asset turnover of 2.8-3x over the next three-to-four years.
Expansion plans and outlook
BHA capacity has been raised by 50%. It is adding an additional line of MEHQ
and Guaiacol, which will boost capacity by 50% by the middle of Mar’22.
BHA volumes grew 50% YoY in 3QFY22.
Product launches will aid diversification from current products, while the focus
on improving yields will help offset higher input costs.
It plans a quick ramp up to 60% in the first year of commissioning for all its
existing products.
DCC is the most underutilized product at this stage (at 35%), other products are
operating at 65-70% utilization levels.
The management said it will add new customers as fresh products are added.
Products under R&D: Phenothiazine is an antioxidant, but the technology is not
yet being developed by the company.
It could manufacture Dimethyl amine, based on Aniline, in the near future.
The management expects to start production of HALS 701 and 770 by Sep’22.
HALS 770: There is huge demand, with all master batches in India sold out.
The annual demand in India stands at 3-4ktpa. Phase I capacity would be 2ktpa
for CLEAN.
HALS 701: It is used for water treatment in the Monomer (80%) and
Agrochemical (10-15%) industry.
New R&D facility at unit III was commissioned last month. Another one would
be added with the commissioning of unit IV.
The company has an R&D team of 60 people, with six to seven PHD scientists.
3QFY22 in charts
Exhibit 1: Revenue grew 18% QoQ and 44% YoY…
Gross Sales (INR b)
Growth YoY (%)
73
50
Exhibit 2:
…with margin normalizing in yet another quarter
Gross Margin (%)
75
50
76
50
79
52
EBITDA margin (%)
71
49
69
45
65
42
7 February 2022
3
 Motilal Oswal Financial Services
Clean Science
Exhibit 3: EBITDA grew 11% QoQ and 22% YoY
EBITDA (INR b)
Growth YoY (%)
Exhibit 4:
…with PAT growth at 8% QoQ and 18% YoY
PAT (INR b)
Growth YoY (%)
Exhibit 5: Pharma and FMCG Chemicals clocks good revenue
growth in 3QFY22
Others
FMCG Chemicals
Pharma Chemicals
Performance Chemicals
1.8
Segment-wise Revenue (INR b)
1.5
1.5
1.4
1.3
0.2
1.3
1.1
0.2
0.2
0.4
0.2
0.1
0.2
0.1
0.2
0.2
0.1
0.3
0.2
0.2
1.2
1.1
1.1
1.0
0.9
0.9
0.8
Exhibit 6: …with the share of Performance Chemicals in the
overall mix declining to 64% from 74% in 2QFY22
Revenue
Mix (%)
1
13
16
70
Performance Chemicals
FMCG Chemicals
2
13
16
69
2
10
16
72
2
11
19
68
Pharma Chemicals
Others
2
11
15
72
2
11
13
74
3
13
20
64
Exhibit 7: Domestic/RoW sales grew 41%/11% QoQ
India (INR b)
1.4
0.9
0.5
RoW (INR b)
1.3
0.8
0.5
1.3
1.0
0.3
Total Sales (INR b)
1.5
1.1
0.4
1.5
1.2
0.4
1.8
Exhibit 8: Contribution from domestic sales improves
significantly to 29% in 3Q from 24% in 2QFY22
Geographical mix (%)
69
66
61
India
75
74
RoW
76
71
1.1
0.8
0.3
1.3
0.5
31
34
39
25
26
24
29
7 February 2022
4
 Motilal Oswal Financial Services
Clean Science
Financial story in charts
Exhibit 9: Expect 33% revenue CAGR over FY21-24E...
Performance Chemicals
FMCG Chemicals
INR bn
5.1
0.6
0.8
3.5
FY21
6.5
0.8
1.1
4.4
FY22E
Pharma Intermediates
Total Revenue
12.1
9.2
4.2
0.7
0.6
2.7
FY20
1.0
1.5
1.3
1.8
Exhibit 10:
…due to contribution from BHA, DCC and HALS
Performance Chemicals
FMCG Chemicals
5%
14%
21%
61%
4%
16%
17%
63%
4%
16%
15%
65%
2%
12%
16%
Pharma Intermediates
Others
3%
12%
17%
7%
11%
16%
65%
10%
11%
15%
64%
2.4
0.3
0.5
1.5
FY18
3.9
0.6
0.7
2.5
FY19
69%
69%
6.0
FY23E
7.8
FY24E
FY18
FY19
FY20
FY21
FY22E
FY23E
FY24E
Exhibit 11: EBITDA margin to stay robust as CLEAN continues
to improve yields of its products and processes…
INR b
EBITDA
44
Margin (%)
51
44
49
50
Exhibit 12: …with capacity additions in FY22 (unit III) and a
new products range from unit IV (over the next two years)
INR b
Adjusted PAT
33
39
Margin (%)
34
37
38
34
33
38
30
35
21
19
25
20
25
Exhibit 13: Return profile to moderate due to capacity
additions (at unit III and IV)…
56
26
31
34
38
28
42
29
RoE
40
43
45
RoCE
43
34
45
34
39
39
38
38
Exhibit 14: …and capex of INR3.5b (to be funded via internal
accruals) over FY22-24E
FCF per share
Capex (INR bn)
40
Source: Company, MOFSL
Source: Company, MOFSL
7 February 2022
5
 Motilal Oswal Financial Services
Clean Science
Financials and valuations
Consolidated Financial Snapshot
Y/E March
Total Income from Operations
Change (%)
Gross Margin (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY17
1,905
31.6
64.3
723
37.9
64
659
4
42
697
697
229
32.8
468
468
72.1
24.6
FY18
2,411
26.5
53.0
729
30.3
76
654
1
46
699
699
212
30.4
487
487
3.9
20.2
FY19
3,933
63.1
56.5
1,363
34.7
110
1,253
0
113
1,365
1,365
389
28.5
977
977
100.7
24.8
FY20
4,193
6.6
69.2
1,853
44.2
137
1,716
1
109
1,823
1,823
427
23.4
1,396
1,396
43.0
33.3
FY21
5,124
22.2
75.9
2,590
50.5
172
2,417
1
256
2,673
2,673
689
25.8
1,984
1,984
42.1
38.7
FY22E
6,465
26.2
67.5
2,861
44.3
250
2,611
1
291
2,901
2,901
722
24.9
2,179
2,179
9.8
33.7
FY23E
9,167
41.8
70.0
4,492
49.0
331
4,161
1
413
4,572
4,572
1,151
25.2
3,421
3,421
57.0
37.3
(INR m)
FY24E
12,090
31.9
70.0
6,045
50.0
412
5,633
1
544
6,176
6,176
1,554
25.2
4,621
4,621
35.1
38.2
Consolidated Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans, and Adv.
Inventory
Account Receivables
Cash and Bank Balance
Cash
Bank Balance
Loans and Advances
Curr. Liability and Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY17
14
1,426
1,440
4
108
1,551
1,057
286
771
23
319
675
307
214
65
0
0
89
238
135
101
2
437
1,551
FY18
14
1,861
1,875
1
100
1,976
1,375
351
1,024
15
181
1,137
290
397
295
0
295
155
380
264
113
3
756
1,976
FY19
14
2,706
2,721
26
139
2,885
1,724
454
1,270
39
752
1,213
370
598
95
94
0
151
390
223
162
4
824
2,885
FY20
13
3,408
3,421
27
102
3,550
2,247
591
1,656
34
1,330
1,279
346
698
93
92
1
142
749
357
387
5
530
3,550
FY21
106
5,290
5,397
3
176
5,576
2,610
752
1,859
550
2,321
1,870
529
742
157
93
63
442
1,023
610
408
5
846
5,576
FY22E
106
7,142
7,249
3
176
7,428
3,635
1,002
2,634
1,025
2,321
2,669
600
1,007
674
610
63
388
1,221
660
556
5
1,448
7,428
FY23E
106
10,050
10,157
3
176
10,336
4,648
1,333
3,315
1,012
2,321
5,416
851
1,427
2,587
2,524
63
550
1,729
936
788
5
3,687
10,336
(INR m)
FY24E
106
13,979
14,085
3
176
14,264
5,654
1,745
3,909
1,006
2,321
9,306
1,123
1,882
5,575
5,512
63
726
2,279
1,234
1,039
5
7,028
14,264
7 February 2022
6
 Motilal Oswal Financial Services
Clean Science
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
EPS Growth (%)
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
Net Debt/Equity ratio
FY17
4.4
72.1
5.0
13.6
0.3
7.3
526
463
171
129
340
0
4
38
34
39
2.7
1.2
59
41
26
2.8
0.0
FY18
4.6
3.9
5.3
17.7
0.2
4.7
506
438
131
102
337
0
1
29
28
35
2.7
1.2
44
60
40
3.0
-0.2
FY19
9.2
100.7
10.2
25.6
0.9
9.5
252
226
90
63
181
0
4
42
40
51
3.4
1.4
34
55
21
3.1
0.0
FY20
13.1
43.0
14.4
32.2
1.0
7.4
176
160
72
59
133
0
10
45
43
64
2.9
1.2
30
61
31
1.7
0.0
FY21
18.7
42.1
20.3
50.8
0.3
1.7
124
114
46
48
95
0
10
45
43
77
2.9
0.9
38
53
43
1.8
0.0
FY22E
20.5
9.8
22.9
68.2
3.1
15.0
113.0
101
34
38
86
0
8
34.5
34
66
2.9
0.9
34
57
37
2.2
-0.1
FY23E
32.2
57.0
35.3
95.6
4.8
15.0
71.9
66
24
27
54
0
23
39.3
39
80
3.1
0.9
34
57
37
3.1
-0.3
FY24E
43.5
35.1
47.4
132.6
6.5
15.0
53.3
49
17
20
40
0
35
38.1
38
86
3.3
0.8
34
57
37
4.1
-0.4
Consolidated Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Others
Direct Taxes Paid
(Inc.)/Dec. in WC
CF from Operations
(Inc.)/Dec. in FA
Free Cash Flow
Change in Investments
CF from Investments
Inc./(Dec.) in Debt
Dividend Paid
CF from Fin. Activity
Inc./Dec. in Cash
Opening Balance
Closing Balance
FY17
697
64
-14
-204
143
690
-222
468
-302
-524
-116
-34
-148
19
46
65
FY18
699
76
-18
-219
-89
449
-320
129
144
-175
1
-51
-44
230
65
294
FY19
1,365
110
-65
-355
-208
848
-388
460
-576
-950
20
-128
-98
-200
295
95
FY20
1,823
137
-67
-424
131
1,601
-503
1,098
-563
-1,063
1
-153
-540
-3
95
92
FY21
2,673
172
-109
-659
-149
1,928
-840
1,088
-1,078
-1,867
-24
-33
-59
1
92
93
FY22E
2,901
250
0
-705
-85
2,362
-1,500
862
0
-1,500
0
-327
-328
535
93
628
FY23E
4,572
331
0
-1,151
-326
3,428
-1,000
2,428
0
-1,000
0
-513
-514
1,914
610
2,524
(INR m)
FY24E
6,176
412
0
-1,554
-352
4,682
-1,000
3,682
0
-1,000
0
-693
-694
2,988
2,524
5,512
7 February 2022
7
 Motilal Oswal Financial Services
Clean Science
NOTES
7 February 2022
8
 Motilal Oswal Financial Services
Clean Science
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
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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
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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
7 February 2022
9
 Motilal Oswal Financial Services
Clean Science
********************************************************************************************************************************
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
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The person accessing this information specifically agrees to exempt MOFSL or any of its
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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.
7 February 2022
10