17 March 2017
Economy
Diving into Trending Themes
Only two states implement 7
th
Pay Commission in FY18
FY17 revised deficit, however, much higher than budgeted
Of the 15 major states that have presented their 2017-18 budget by now, only two (Madhya Pradesh and
Rajasthan) have made provisions for the 7
th
Pay Commission (PC) in FY18. Six states have already implemented
the 7
th
PC in 2016-17, while the rest are yet to do so.
Not surprisingly, on an aggregate basis, spending on salary & wages (S&W) is budgeted to grow slower in FY18
(12%) than in FY17 (15%). Furthermore, budgeted spending growth is not very high from average growth over
past three years (9.6%) and much lower than 23%-24% growth during the 5
th
and 6
th
PCs.
Furthermore, we find that the 5
th
and 6
th
PCs boosted physical savings, not consumption. This time, however,
with limited arrears and generally lower increase in salaries, a boost to (physical) savings is doubtful, let alone
consumption.
Finally, since many states have implemented the 7
th
PC in the current year, the fiscal deficit for FY17 as per the
revised estimate (RE) is much higher than the budget estimate (BE). Nevertheless, with only two states making
provisions for the 7
th
PC next year, the FY18 fiscal deficit for the states is likely to be in control.
in which we deep-dive into trending macro-economic
themes. This new product complements our existing
“Ecoscope” product, which is reserved for regular
updates on macro-economics.
“EcoKnowLedge”
is Motilal Oswal’s new product
About a year ago, there was too much excitement about
the Pay Commission awards. Not only was the central
government expected to implement 7
th
Central PC in
2016-17, but also most of the states were likely to follow
suit in the following years. The central government
employs about 5 million people (including defense
forces), while the state governments combined have a
workforce of about 10 million people. PC awards,
therefore, are not only important for the government
employees, but also for the economy due to the
expected consumption pick-up. As expected, the Center
implemented the 7
th
CPC in 2016-17 and the arrears
were disbursed with the
August 2016 salary.
However,
what went almost unnoticed was that several states also
implemented the PC in 2016-17 and revised the salaries
of the state government employees. A look at the 2017-
18 budgets of the 15 major states (accounting for ~65%
of total state budgets) reveals that total S&W spending
of these states grew 15% YoY in FY17 (as per revised
estimate (RE)) and is budgeted to grow 12% YoY in FY18
(as per budget estimate (BE)) versus growth of 9.6% in
the previous three years
(Exhibit 1).
It is also important
to note that this increase is much lower than 22.5%
growth during the 5
th
PC in late 1990s and 24% during
the 6
th
PC. Payout growth in the previous two PCs of the
states was broadly in line with that in the Center’s PC.
Exhibit 1: S&W bill for states* over the past decade
(% YoY)
23
25
S&W spending of states
17
11
12
10
13
9
7
15
12
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
* For 15 major states, accounting for ~65% of total state budgets
Source: State budget documents, Reserve Bank of India (RBI), MoSL
Total S&W spending of 15 states grew
15% YoY in FY17 (as per revised estimate
(RE)) and budgeted to grow 12% YoY in
FY18 (as per budget estimate (BE)) vs a
growth of 10.2% in the previous 3 years
Nikhil Gupta
(Nikhil.Gupta@MotilalOswal.com); +91 22 3982 5405
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.

State-wise development of seventh pay
commission
Exhibit 2
shows the state-wise development on the
implementation of pay revisions. Since the Maharashtra
budget for 2017-18 will be presented on 18 March 2017,
we have provided details of the 15 major states
(excluding Punjab, Uttar Pradesh and Uttarakhand,
which had elections recently and saw a change in the
government). In a nutshell, of the 15 major states (which
account for 65% of total (combined) state budgets), six
have implemented the PC in 2016-17, only two have
announced to implement it in 2017-18 and the rest are
yet to do so. It is not surprisingly then that growth in
Exhibit 2:
State-wise details of Pay Commission awards
States
Commentary
total spending on S&W by the 15 states was only 15% in
FY17 (RE) and is budgeted at ~12% in FY18 (BE), not very
different from 9.6% growth in the previous five years
(FY12-FY16).
of the 15 major states, six have implemented
the PC in 2016-17, only two have announced to
implement it in 2017-18 and the rest are yet to
do so
What do numbers say?#
FY14-FY16
(A)*
FY17RE
FY18BE
States not due to announce pay revisions
Andhra
(AP)
Pradesh
Tenth Pay Commission implemented in 2014-15. Next is due
after five years in 2019
Tenth Pay Commission implemented in 2014-15. Next is due
after five years in 2019
Implemented in 2016-17 with effect from January 2016
Implemented in 2016-17
Implemented in 2016-17 with effect from January 2016
Implemented in 2016-17
Implemented in 2016-17 with effect from January 2016
Follows its own pay revisions time-table. Provisions for 10
th
Pay Commission spread over two years
Pradesh
Higher salaries to be paid in July 2017 with effect from
January 2016
Panel formed last month. Sufficient provisions made in 2017-
18 budget
To be implemented once the Fitment Committee submits its
report (due this month)
Not yet implemented. Set up a Fitment Committee
Follows its own pay revisions time-table. Sixth Pay
Commission Committee to be set up in 2017-18
Committee set up to review recommendations of 7
th
PC.
Likely to be implemented in 2018-19
Follows its own pay revisions time-table. Sixth Pay
Commission yet to be implemented
Pradesh
…~
…~
27.9
(1.4)
11.4
18.6
Telangana (TG)
States which implemented Seventh Pay Commission in 2016-17
Chhattisgarh (CT)
Gujarat (GJ)
Haryana (HR)
Himachal
(HP)
7.9
5.8
9.8
3.8
7.2
10.8
24.9
9.0
22.2
36.7
22.6
16.6
13.0
9.4
17.2
2.6
12.4
16.3
Jharkhand (JH)
Kerala (KL)
States which made provisions for Seventh Pay Commission in 2017-18
Madhya
(MP)
10.7
9.7
13.7
13.5
18.4
39.0
Rajasthan (RJ)
States yet to implement/provide for Seventh Pay Commission
Bihar (BH)
Odisha (OR)
Karnataka (KA)
Tamil Nadu (TN)
West Bengal (WB)
Total (14 states)
Maharashtra@
Unlikely
to be announced in the upcoming budget
(MH)
# Change in ‘salaries & wages’ spending bill for states
~ Since AP was bifurcated in 2014. Data is not comparable
3.4
16.9
9.3
14.5
4.2
9.6
10.3
24.9
10.6
8.8
9.9
14.3
14.9
12.0
1.4
6.9
14.0
1.7
6.9
12.3
…
* Average of the three years up to FY16
@ Maharashtra due to present its 2017-18 budget tomorrow
Source: State budget documents, MoSL
17 March 2017
2

Exhibit 3:
Increase in spending on S&W by few states during different PCs
(%, YoY)
37
26
19
9
20
17
35
36
31
5th PC
6th PC
34
27
28
22
16
25
16
7th PC
46
40
39
Chhattisgarh
Gujarat
Haryana
Jharkhand
Kerala*
Madhya Pradesh
Rajasthan#
* Kerala does not follow central PC
# Implements PC in a single year – FY99, FY11 and FY18
5
th
PC = FY98-FY99, 6
th
PC = FY10-FY11 and 7
th
CPC = FY17-FY18
Source: Various state budget documents, MoSL
Most states keep their purses tight this time…
Unlike the Center, PC awards by the 29 state
governments are generally distributed over 2-3 years.
Nevertheless, it is important to note that growth in S&W
in all states (except Rajasthan) that have implemented
the 7th PC in FY17 or announced to implement it from
FY18 is much lower than that witnessed during the
previous PCs.
Exhibit 3
shows that while average growth
during the 6th PC was around 30%-35%, it has been
subdued at 15%-20% during the 7th PC. Rajasthan is the
only exception where growth is ~40% in FY18BE, similar
to what it was during the previous PCs. On the contrary,
in Gujarat, growth in S&W was only 9% YoY in FY17 (RE)
and FY18 (BE), despite the state implementing 7th PC in
FY17. One of the key reasons for such lower growth is
the absence of huge arrears (associated with 5th and
6th PCs). However, it is also apparent that the states
have kept their purse strings tight this time.
…but many large states are yet to implement PCs
Although several states have revised the pay scales of
their employees, many large states are yet to do so. A
total of nine states (including Punjab (PB), Uttar Pradesh
(UP) and Uttarakhand (UK)) are yet to revise the pay
scales of their employees.
Exhibit 4
shows that
Maharashtra, Uttar Pradesh, Tamil Nadu and West
Bengal are the four largest states in terms of S&W,
accounting for more than 40% of total S&W bill of the
state governments. None of these four states have
announced the implementation of the 7th PC. Therefore,
some revisions would be forthcoming in FY19 and FY20.
Further, some states such as Bihar, Odisha and Karnataka
have set up the committee to make recommendations.
While average growth during the 6th PC
was around 30%-35%, it has been
subdued at 15%-20% during the 7th PC.
Rajasthan is the only exception
Exhibit 4:
Spending on S&W by 17 major states in 2017-18
1,000
800
600
400
200
0
AP
# Data for 2016-17
BH
CT
GJ
HR
HP
JH
KA
KL
MP
MH#
OR
RJ
TN
TG
UP#
WB
(INR b)
Spending on salary & wages
Growth in S&W (RHS)
(% YoY)
50
40
30
20
10
0
Source: Various state budget documents, MoSL
17 March 2017
3

Impact of states’ PC on household behavior
It implies that, unlike the previous two PC episodes,
when the pay revisions for most states were distributed
over 2-3 years (FY98-FY00 for 5
th
PC, and FY09-FY11 for
6
th
PC), the pay revisions could be distributed over 3-4
years this time. Further, given the fact that several states
have already implemented PCs, the amount of arrears
will be limited this time. Finally, growth in S&W appears
subdued this time, which is also in line with lower
increase implemented by the central government.
Considering all these factors, it is fair to assume that the
economic impact of the pay revisions will be milder than
what it was during the previous PCs. In order to gauge
the impact of the states’ PCs on household consumption,
savings and investments, we analyze the impact of the
5
th
and 6
th
PCs on these parameters.
Exhibit 7
on the next page makes it even clearer. While
consumption growth decelerated from 16% in pre-5
th
PC
years to 12% in the post-5
th
PC period, savings growth
jumped from 14% to 25%. Similarly, during the 6
th
PC,
consumption growth was almost unchanged at 14%-15%,
while savings growth edged up from 14% to 17%. Within
savings, in both the periods, while growth in net financial
savings decelerated, physical savings increased
significantly.
Exhibit 5: Impact of 5th and 6th PCs on household
consumption & savings
30
25
20
15
10
5
0
(% YoY)
FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13
Source: RBI, CEIC, MoSL
Consumption
Savings
Pay Commissions boosted household savings, not
consumption
Exhibit 5
looks at the trend of total private consumption
expenditure (PCE) and households’ total savings during
the past two decades to gauge the impact of PCs on
these parameters. It is obvious that higher income will
either lead to higher consumption or higher
savings/investments or both. However, historical data
suggest that PCs generally lead to much higher growth in
savings than consumption.
Exhibit 6:
Within household savings, physical savings more
impacted than financial savings
80
60
40
20
0
(20)
(40)
(% YoY)
FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13
Source: RBI, CEIC, MoSL
Net financial savings
Physical savings
Historical data suggest that PCs
generally lead to much higher growth
in savings than consumption
It is apparent that household savings saw a sudden surge
during the years of implementation of PCs. Consumption
growth, on the other hand, either decelerated (late
1990s) or remained stable (during FY09-FY10). In other
words, household savings, not consumption, witnessed a
surge during the 5
th
and 6
th
PCs.
Within household savings, it is important to note that
physical savings – which are primarily in real estate – saw
a sharp sudden surge during PCs
(Exhibit 6).
Net financial
savings, however, grew modestly.
Within savings, in both the periods,
while growth in net financial savings
decelerated, physical savings
witnessed a huge spurt
17 March 2017
4

Exhibit 7:
Impact of 5th and 6th PC on household consumption & savings (% YoY)
Consumption
Savings
42
25
16
14
16
15
12
14
14
14
25
15
8
17
11
Net financial savings
Physical savings
21
FY95-97
Fifth (5th PC)
Data on 2004-05 base
FY98-00
FY06-08
Sixth (6th PC)
FY09-11
Source: CEIC, MoSL
Within consumption, the impact is not uniform
Although consumption did not grow faster after the
implementation of the 5
th
and 6
th
PCs, we thought it
would be useful to look at the various components of
consumption. This is because while total consumption
growth did not pick up, it is possible that some
components did grow faster but were offset by slower
growth in the other components.
Exhibit 8
shows the
broad categories of PCE – durable goods (including semi-
durables), non-durable goods and services.
During the 5
th
PC, although consumption of goods grew
at a slower pace, services consumption picked up faster.
During the 6
th
PC, consumption of all broad categories
picked up. It is important to note that the impact of the
6
th
PC could be distorted by the fact that an equally big
agricultural farm loan waiver and numerous tax cuts
were also announced at the same time. It is thus not
surprising that non-durable goods witnessed growth of
15% post the 6
th
PC, as against 10.5% during the pre-6
th
PC period.
Thus, the impact of PCs on the broad categories of
consumption is not uniform. What could be, however,
concluded is that consumption of services does get a
boost, which is not surprising, considering that higher
salaries to government employees would be used for
better lifestyle – from goods to services.
Further analysis of few key items of households’ durable
goods and services consumption is depicted in
Exhibit 9-
10
on the next page. Within durable goods, while
consumption of transport equipment went up, electronic
goods also saw some pick-up. However, other household
equipment (such as furniture and fittings) were almost
unchanged
(Exhibit 10).
On the other hand, households’ spending on gross rent
has gone up during the last two PCs, implying that
government employees may prefer to move to high-rent
homes. Further, during the 6
th
PC, spending on
‘recreation & culture’ also grew faster, while that on
education continued to grow at the same pace
(Exhibit
11).
Services
13.3
10.5
14.3
15.0
16.5
Exhibit 8:
Impact of 5th and 6th PC on broad categories of household consumption (% YoY)
17.2
Durable goods*
16.0
14.8
16.5
13.0
9.2
13.3
Non-durable goods
FY95-97
Fifth (5th) PC
* Includes semi-durable goods also
FY98-00
FY05-08
Sixth (6th) PC
Data on 2004-05 base
FY09-11
Source: CEIC, MoSL
17 March 2017
5

Exhibit 9:
Impact of 6th PCs on some durable items of
households consumption
Electronic goods*
Transport equipments
Other household equipment
40
20
0
(20)
(% YoY)
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
Exhibit 10:
Impact of 5th and 6th PCs on some services items
of households consumption
30
25
20
15
10
5
0
(5)
(% YoY)
Education
Recreation etc
Rent
Source: RBI, CSO, Various national sources, CEIC, MoSL
Overall, since PC awards impact the government
employees, higher income leads to increased spending
on services and to some extent on durable goods.
Demand for non-durable goods (primarily food,
beverages, tobacco products, clothing & footwear) does
not see any spurt. Nevertheless, PCs boost savings much
more than total consumption. Since the 5
th
and 6
th
PCs
had a huge chunk of arrears associated with them,
households chose to invest in real estate, pushing
physical savings higher, rather than increasing financial
savings.
Since the 5th and 6th PCs had a huge
chunk of arrears associated with
them, households chose to invest in
real estate, pushing physical savings
higher, rather than increasing
financial savings
17 March 2017
6

Impact on fiscal deficit and market borrowings
As shown above, with households receiving a permanent
increase in their salaries, their resources will increase,
which may lead to some rise in spending and savings (or
investments also) at the same time. Nevertheless, it may
not necessarily have an equivalent positive economic
impact if the states keep their fiscal deficit unchanged.
This is because unchanged deficit implies a shift in state
government spending, rather than an increase in total
spending. Even if the states decide to expand their fiscal
deficit, it may not necessarily be equivalent to economic
stimulus unless accompanied by expansion in the
monetary base or higher current account deficit (CAD). In
other words, unless new borrowings are financed by the
Reserve Bank of India (RBI) or foreigners, higher deficit
by the states
would not have any stimulatory impact.
Exhibit 11
below shows that the states’ fiscal deficit
widened during the previous two PCs. With the
implementation of the 5
th
PC, the states’ (combined)
deficit widened from 2.8% of GSDP in FY98 to 4.5% in
FY00, and it almost doubled from 1.5% of GSDP in FY08
to 2.9% in FY10 due to the 6
th
PC. It is important to note
here that since the 6
th
PC coincided with the global
financial crisis of 2008-09, the increase in the fiscal
deficit could not be entirely attributed to the PC.
However, the increase in late 1990s does confirm that
PCs do widen the states’ fiscal deficit.
Exhibit 11:
States’ fiscal deficit widened during previous two
PCs
5
4
3
2
1
0
FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13
Source: Various state budgets, MoSL
Exhibit 12:
States’ dependence on market borrowings has
increased tremendously
120
100
80
60
40
20
0
FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13
Source: RBI, MoSL
(% of FD)
Further, the states have increasingly relied on market
borrowings to finance their fiscal deficit.
Exhibit 12
shows that net market borrowings have increased from
around low-20% of the fiscal deficit in late 1990s to
above 85% in recent years. Thus, there is a high
probability that the wider deficit due to the PC awards
could lead to higher borrowings.
With the implementation of the 5th
PC, the states’ (combined) deficit
widened from 2.8% of GSDP in FY98 to
4.5% in FY00, and it almost doubled
from 1.5% of GSDP in FY08 to 2.9% in
FY10 due to the 6th PC
(% of GDP)
17 March 2017
7

Revised deficit higher in FY17, but under control in
FY18
Whether the 7
th
PC can lead to a wider deficit and thus
higher market borrowings in FY18 is a key monitorable.
Exhibit 13
shows the budgeted fiscal deficit for the eight
states that have implemented the 7
th
PC in either 2016-
17 or 2017-18. Notably, the fiscal deficit of all four large
states – Gujarat, Kerala, Madhya Pradesh and Rajasthan
– is expected to narrow in FY18. Among the other states
that have implemented the 7
th
PC, only Chhattisgarh has
budgeted a higher deficit for FY18 compared to FY17.
Overall, six states have implemented the 7
th
PC in 2016-
17, due to which the fiscal deficit in FY17 (RE) is much
higher than FY17 (BE). However, with only two states
making provisions for the 7
th
PC in 2017-18, the states’
finances are unlikely to be hurt much.
Exhibit 13:
Fiscal deficit targets for FY18 lower than FY17RE
(% of
3.5
3.0 2.9
2.3 2.3
1.8
2.8
2.6
1.9
4.3
FY16
FY17RE
4.2
3.5
2.6 2.5
The fiscal deficit of all four large states
– Gujarat, Kerala, Madhya Pradesh
and Rajasthan – is expected to narrow
in FY18. Among the other states that
have implemented the 7th PC, only
Chhattisgarh has budgeted a higher
deficit for FY18 compared to FY17
FY18BE
3.5 3.4
2.5
4.6
3.5
3.4 3.4
3.0
2.3
3.0
Chattisgargh
Gujarat
Haryana
HP
Jharkhand
Kerala
MP
Rajasthan
Source: CEIC, MoSL
* Includes semi-durable goods also
Data on 2004-05 base
17 March 2017
8

REPORT GALLERY

Disclosures
This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company (ies) and/sector(s), if any, covered in the report and may be distributed by it and/or its
affiliated company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or
inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you
solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives,
financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional
advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future
performance, future returns are not guaranteed and a loss of original capital may occur.
NOTES
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a some companies
covered by our Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek
investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may educate investors on investments in such
business . The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our
research professionals are paid on twin parameters of performance & profitability of MOSt.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt
generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates
may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment
decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoingamong other things, may give rise to real or potential conflicts of interest.
MOSt and its affiliated company(ies), their directors and employees 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 affiliates of MOSt even though there might exist an inherent conflict of interest
in some of the stocks mentioned in the research report Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a
company's fundamentals and, as such, may not match with a report on a company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering
to different set of customers having various objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any
and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt 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. The information contained herein is based on publicly available data or other sources
believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service,
and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would
endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its
affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness
for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any
necessary explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any compensation for
products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most 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.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this report.
To enhance transparency, MOSt 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.
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
Pending Regulatory inspections against Motilal Oswal Securities Limited:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold inquiry and
adjudge violation of SEBI Regulations; MOSL replied to the Show Cause Notice whereby SEBI granted us an opportunity of Inspection of Documents. Since all the documents requested by us were not covered we have requested to
SEBI vide our letter dated June 23, 2015 to provide pending list of documents for inspection.
List of associate companies of Motilal Oswal Securities Limited -Click
here to access detailed 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. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation
based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
Analyst ownership of the stock
Served as an officer, director or employee
Companies where there is interest
No
No
A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes
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 MOSt& 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 Kong 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.
Motilal Oswal Securities Limited (MOSL) 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 MOSL 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 MOSL, 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., MOSL 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
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary
of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers
Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 CollyerQuay,Singapore 04931
For U.S
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
Motilal Oswal Securities Ltd
17 March 2017
10