2 August 2017
1QFY18 Results Update | Sector: Capital Goods
Solar Industries
Neutral
BSE SENSEX
32,477
S&P CNX
10,082
CMP: INR896
TP: INR900(1%)
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In-line operational performance led by overseas business
Operational performance in line with estimates:
Consol. revenue increased
16% YoY to INR4.6b (est. of INR4.8b) in 1QFY18. EBIDTA grew 15% YoY to
INR1.0b (est. of INR980m), with margin stable YoY at 22.1%, supported by
strong growth in the overseas business. Adj. net profit rose 16% YoY to
INR548m (est. of INR545m).
Revenue aided by strong growth in overseas segment:
Consol. revenue was
driven by strong growth in the overseas segment (+48% YoY). On the domestic
front, institutional sales grew 13% YoY. However, the quarter saw declining
demand from CIL (sales down 18%), which faced realization pressure and lower
production. Realization was down in Bulk (-3% YoY) and Cartridge (-4% YoY)
segments, as the decline in raw material cost (ammonium nitrate) was passed
on to consumers.
Operating margin stable YoY at 22.1%:
Operating margin stood stable at 22.1%
driven by better overseas performance. Operating margin in the overseas
segment stood at 25.4% whereas Standalone operating margin also improved
190bp YoY to 20.4%.
Overseas & exports business growth led by currency stabilization:
Revenue
from the overseas & exports business grew 67% YoY, as the currency in the key
markets of Nigeria and Turkey stabilized and also as the new facility at South
Africa started contributing to revenue from 1QFY18.
Maintain Neutral:
We raise estimates for FY18/19 by 7/6% to factor in
improved overseas performance. Maintain
Neutral
with TP of INR900, valuing
SOIL at 30x FY19E EPS (earnings CAGR of 20% over FY17-19E). Stock trades at
premium valuations, given SOIL’s presence in Defense, which offers huge
business opportunity due to government focus, and strong growth in the core
business segment of explosives led by pick-up in mining activity.
FY17
2Q
3Q
3,283 4,331
-1.0 12.6
656
799
-5.6
4.4
20.0 18.4
98
95
73
68
40
16
0
0
525
653
133
157
25.4 24.1
391
495
-5.2 12.1
391
495
6.1 20.3
4Q
1Q
4,377 4,691
6.5 15.5
875 1,035
1.8 15.0
20.0 22.1
101
125
63
50
44
0
0
0
755
860
240
261
31.7 30.4
515
599
12.9 19.5
515
548
18.9 16.3
FY18
2QE
3QE
3,926 4,708
19.6
8.7
645
842
-1.5
5.4
16.4
17.9
111
111
70
70
20
20
0
0
485
681
145
204
30.0
30.0
339
477
-13.3
-3.7
339
477
-13.3
-3.7
FY17
4QE
6,893
57.5
1,558
78.2
22.6
96
83
40
0
1,419
394
27.8
1,025
98.9
1,025
98.9
15,800
9.1
3,239
6.5
20.5
387
269
132
0
2,715
767
28.3
1,947
3.6
1,947
FY18
20,116
27.3
3,978
22.8
19.8
443
272
80
0
3,343
1,005
30.1
2,338
4.5
2,389
FY18
1QE
4,761
12.0
980
13.3
20.6
111
68
20
0
822
246
30.0
575
14.8
545
15.7
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
SOIL IN
90.5
81.1 / 1.1
921 / 590
4/11/23
26
26.9
Financials & Valuations (INR b)
2017 2018E 2019E
Y/E Mar
Net Sales
15.8
20.1
24.2
EBITDA
3.2
4.0
4.8
PAT
1.3
1.8
2.2
EPS (INR)
20.6
24.2
30.0
Gr. (%)
14.0
17.5
23.8
BV/Sh (INR)
112.3 131.7 778.6
RoE (%)
19.8
19.8
20.9
RoCE (%)
15.2
22.4
24.6
P/E (x)
43.5
37.0
29.9
P/BV (x)
8.0
6.8
1.2
Estimate change
TP change
Rating change
Quarterly Performance (Consolidated)
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary Items
PBT
Tax
Effective Tax Rate (%)
Reported PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
1Q
4,062
5.6
900
25.2
22.1
94
68
0
0
738
237
32.1
501
9.6
471
13.9
(INR Million)
Var.
Vs Est
(1.5)
5.5
4.7
4.1
0.5
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.
Ankur Sharma – Research Analyst
(Ankur.VSharma@MotilalOswal.com); +91 22 6129 1556
Amit Shah – Research Analyst
(Amit.Shah@MotilalOswal.com); +91 22 6129 1543

Solar Industries
Operational performance in line with estimates; overseas performance
improves led by currency stabilization
Operational performance in line with estimates:
Consol. revenue increased
10% YoY to INR4.6b (est. of INR4.8b) in 1QFY18. EBIDTA grew 15% YoY to
INR1.0b (est. of INR980m), with margin stable YoY at 22.1%, supported by
strong growth in the overseas business. Adj. net profit rose 16% YoY to INR548m
(est. of INR545m).
Revenue aided by strong growth in overseas segment: :
Consol. revenue was
driven by strong growth in the overseas segment (+48% YoY). On the domestic
front, institutional sales grew 13% YoY. However, the quarter saw declining
demand from CIL (sales down 18%), which faced realization pressure and lower
production. Realization was down in Bulk (-3% YoY) and Cartridge (-4% YoY)
segments, as the decline in raw material cost (ammonium nitrate) was passed
on to consumers.
Exhibit 2: Revenue contribution dominated by Export and
overseas segment (%)
Defence, 0
Coal, 17
Exhibit 1: Revenue growth driven by growth in overseas
revenue
Revenue (INR M)
Growth YoY
Export and
overseas,
36
Institutional
, 19
Trade, 29
Source: MOSL, Company
Source: MOSL, Company
Overseas and exports business registers as currency stabilizes
Revenue from
the overseas & exports business grew 67% YoY, as the currency in the key
markets of Nigeria and Turkey stabilized and also as the new facility at South
Africa started contributing to revenue from 1QFY18.
Exhibit 4: Revenue mix in favor of bulk (%)
Initiating
Systems,
13.7
Exhibit 3: Margin stable YoY
EBITDA (%)
22
21 20 21 20 20
20
19 20 19 19
19
18
18 19
17
EBITDA (INR M)
16
Bulk, 47.5
Cartridge,
38.8
Source: MOSL, Company
Source: MOSL, Company
2 August 2017
2

Solar Industries
Other key highlights of 1QFY18 results
Solar has commissioned its South African facility with capex of USD11m, and it
expects contribution of INR750m in FY18.
Defense revenue for FY17 stood at INR110m, and management has provided
guidance for revenue of INR1b for FY18 and INR2b for FY19.
Solar plans to incur capex of ~INR2b for FY18 as well as FY19, of which INR750m
will be spent on domestic facility, INR500m on overseas and INR750m on
defense.
SOIL has order backlog in defense segment of INR1.4b, of which it expects to
execute orders worth INR1b in FY18.
Valuation and view
and maintain our
Neutral
rating with a TP of INR900, valuing SOIL at 30x FY19E EPS
(earnings CAGR of 15% over FY17-19E). The stock trades at premium valuations,
given the company’s presence in Defense, which offers huge business opportunity
due to the government’s focus, and also strong growth in the core business segment
of explosives led by pick-up in mining activity.
Exhibit 5: Change in Estimates
Old Estimates
FY18
FY19
19,170
23,052
3,765
4,536
2,048
2,548
22.6
28.2
FY13
3,941
75,356
52,298
3,832
114,326
33,518
1,490
141
11
287
47
6
0
118
599
1,864
12,131
10,446
25.3%
16.3%
11.2%
35.9%
13.7
-2,405
25.4%
17.0%
FY14
3,970
68,776
57,725
3,703
106,988
34,613
1,554
130
12
361
52
7
0
161
87
2,329
12,166
10,788
3.3%
17.9%
13.6%
35.1%
14.0
-3,359
20.5%
13.7%
FY15
4,686
84,898
55,192
4,976
136,716
36,399
1,269
126
10
229
47
5
0
55
0
3,353
14,568
11,767
9.1%
18.8%
15.5%
28.6%
17.2
-2,796
21.6%
14.7%
New Estiamtes
FY18
FY19
20,116
24,187
3,978
4,782
2,192
2,714
24.2
30.0
FY16
4,925
87,759
56,121
6,243
183,412
34,039
1,431
146
10
457
71
6
77
95
0
3,654
16,882
14,236
21.0%
21.0%
18.1%
30.4%
18.1
-2,792
19.9%
15.1%
FY17E
5,351
108,620
49,264
6,424
196,636
32,670
1,710
156
11
595
103
6
110
104
0
3,471
17,765
14,190
-0.3%
20.5%
19.1%
24.1%
20.6
-3,022
19.8%
15.2%
% Change
FY18
4.9
5.7
7.0
7.0
FY18E
6,215
124,913
49,757
7,137
216,300
32,997
1,915
172
11
698
119
6
810
115
0
4,750
21,640
16,775
18.2%
0.0%
0.0%
0.0%
24.2
-2,813
19.8%
22.4%
We raise our estimates for FY18/19 by 7/6% to
factor in improved overseas performance
Sales
EBIDTA
PAT
EPS
FY19
4.9
5.4
6.5
6.5
FY19E
Exhibit 6: Operating Matrix
Cartridge
Revenues (INR M)
Volume (tons)
Rln per MT
Bulk
Revenues (INR M)
Volume (tons)
Rln per MT
Detonators
Revenues (INR M)
Volume (m pieces)
Rln per piece
Detonating Fuse
Revenues (INR M)
Volume (m mtrs)
Rln per Mtrs
Defense
Other operating income
Trading activity
Overseas revenues
Consolidated Revenues
Domestic Revenues (Excl Trading / Def, Incl Exports)
% YoY
EBIDTA Margins
Standalone
Subsidiaries
EPS (INR/sh)
Net Cash / (Debt)
ROE (%)
RoCE (%)
2 August 2017
7,434
143,650
51,747
8,454
248,745
33,987
2,182
189
12
819
136
6
1,400
126
0
5,700
26,114
20,288
20.9%
0.0%
0.0%
0.0%
30.0
-2,005
20.9%
24.6%
3

Solar Industries
Financial and valuations
Income Statement
Y/E March
Total Revenues
Change (%)
Raw Materials
Staff Cost
Other Expenses
EBITDA
% of Total Revenues
Other Income
Depreciation
Interest
Exceptional Items
PBT
Tax
Rate (%)
Reported PAT
Minority Interest
Adjusted PAT
Change (%)
2013
11,218
15.9
6,501
556
2,329
1,833
16.3
142
170
183
100
1,522
257
16.9
1,344
101
1,163
14.9
2014
11,330
1.0
5,908
673
2,719
2,030
17.9
112
219
179
100
1,644
349
21.2
1,375
111
1,184
1.8
2015
13,519
19
7,687
798
2,494
2,540
18.8
79
315
179
100
2,026
463
23
1,643
89
1,474
24
2016
14,486
7
8,767
876
1,801
3,042
21.0
133
328
204
0
2,642
867
33
1,775
138
1,637
11
2017
15,800
9
9,065
1,043
2,453
3,239
20.5
132
387
269
0
2,715
767
28
1,947
82
1,865
14
2018E
20,116
27
11,475
1,133
3,529
3,978
19.8
80
443
272
0
3,343
1,005
30
2,338
146
2,192
17
(INR Million)
2019E
24,187
20
13,661
1,233
4,511
4,782
19.8
80
485
279
0
4,098
1,230
30
2,714
154
2,714
24
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Deferred Tax Liability
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Goodwill
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Current Liab. & Prov.
Creditors & other current liab.
Net Current Assets
Misc Expenses
Application of Funds
E: MOSL Estimates
2013
181
5,546
5,727
405
3,721
207
10,060
4,408
740
3,668
606
489
57
6,260
1,361
1,559
922
2,417
1,020
1,020
5,240
0
10,060
2014
181
6,435
6,616
381
4,837
270
12,103
5,796
959
4,838
810
252
71
7,554
1,528
1,853
1,330
2,842
1,422
1,422
6,132
0
12,103
2015
181
7,578
7,759
471
3,465
444
12,139
7,122
1,273
5,849
611
374
0
7,059
1,649
1,913
373
3,125
1,753
1,753
5,306
0
12,139
2016
181
8,495
8,676
566
3,466
433
13,141
8,606
1,601
7,005
482
382
0
7,587
1,631
2,659
370
2,927
2,315
2,315
5,273
0
13,141
2017
181
9,985
10,166
647
3,691
433
14,938
9,410
1,989
7,422
581
101
0
9,367
1,701
2,777
669
4,221
2,533
2,533
6,834
0
14,938
2018E
181
11,738
11,919
793
4,218
433
17,364
10,410
2,432
7,979
581
101
0
11,978
2,010
3,293
1,405
5,270
3,275
3,275
8,703
0
17,364
(INR Million)
2019E
181
13,909
14,090
947
2,720
433
18,191
11,410
2,917
8,494
781
101
0
13,103
2,977
3,142
714
6,270
4,288
4,288
8,815
0
18,191
2 August 2017
4

Solar Industries
Financial and valuations
Ratios
Y/E March
Basic (INR)
Adj EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors. (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
2013
12.9
14.7
63.3
2.2
19
14.7
12.8
10.9
1.8
3.0
1.2
25.4
17.0
19.2
51
44
33
1.1
0.5
2014
13.1
15.5
73.1
2.3
19
22.9
19.4
15.1
2.7
4.1
0.8
20.5
13.7
16.1
60
49
46
0.9
0.5
2015
16.3
19.8
85.7
3.4
23
55.0
45.3
33.1
6.2
10.4
0.4
21.6
14.7
16.8
52
45
47
1.1
0.4
2016
18.1
21.7
95.9
4.5
29
49.5
41.3
27.7
5.8
9.3
0.5
19.9
15.1
16.1
67
41
58
1.1
0.4
2017
20.6
24.9
112.3
3.4
20.0
43.5
36.0
26.0
5.3
8.0
0.4
19.8
15.2
16.0
64
39
59
1.1
0.3
2018E
24.2
29.1
131.7
4.0
20.0
37.0
30.8
21.1
4.2
6.8
0.4
19.8
22.4
17.1
60
36
59
1.2
0.2
2019E
30.0
35.4
778.6
5.0
20.0
29.9
25.3
17.4
3.4
1.2
0.6
20.9
24.6
18.9
47
45
65
1.3
0.1
Cash Flow Statement
Y/E March
PBT before EO Items
Add : Depreciation
Interest
Less : Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Invest. in liquid assets
CF from Investments
(Inc)/Dec in Debt
Less : Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates
2013
1,522
170
183
-257
-858
760
-1,112
311
-802
749
-183
-233
333
291
630
922
2014
1,644
219
179
-349
-484
1,209
-1,593
100
-1,494
1,116
-179
-244
694
409
922
1,330
2015
2,026
315
179
-463
-132
1,925
-1,125
153
-972
-1,371
-179
-360
-1,910
-957
1,330
373
2016
2,642
328
204
-867
31
2,339
-1,355
-331
-1,687
26
-204
-476
-655
-3
373
370
2017
2,715
387
269
-767
-1,263
1,341
-904
281
-623
225
-271
-373
-419
299
370
669
2018E
3,343
443
272
-1,005
-1,132
1,920
-1,000
0
-1,000
526
-272
-438
-184
736
669
1,405
(INR Million)
2019E
4,098
485
279
-1,230
-803
2,829
-1,200
0
-1,200
-1,498
-279
-543
-2,320
-691
1,405
714
2 August 2017
5

Solar Industries
Corporate profile
Company description
SOIL is India’s leading explosives manufacturer,
having a licensed capacity of 290k tons of bulk and
cartridge explosives across 20 manufacturing
locations within India. It also has manufacturing
units across Nigeria and Zambia to cater to African
markets. Its Turkey plant caters to growth
opportunities from CIS nations.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Jun-17
Promoter
DII
FII
Others
73.2
20.7
1.4
4.7
Mar-17
73.2
18.3
1.4
7.2
Jun-16
73.0
20.9
2.0
4.1
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Icici Prudential Life Insurance Company Ltd
Hdfc Trustee Company Ltd - A/C Hdfc Mid -
Capopportunities Fund
Hdfc Trustee Company Limited - Hdfc
Prudence Fund
Sbi Emerging Businesses Fund
Sbi Magnum Balanced Fund
% Holding
2.3
2.3
2.1
1.9
1.8
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Satyanarayan Nuwal
Kailashchandra Nuwal
Manish Nuwal
Khushboo Pasari
Designation
Chairman & Exec. Director
Vice Chairman
Managing Director
Company Secretary
Exhibit 5: Directors
Name
Anil Kumar Jain
Ajai Nigam
Anant Sagar Awasthi
Madhu Vij
Name
Roomiee Dara Vakil
Amrendra Verma
Dilip Patel
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Anant B Khamankar
Deepak Khanuja
Ekbote Deshmukh & Co
Gandhi Rathi & Co
Khanuja Patra & Associates
Type
Secretarial Audit
Cost Auditor
Internal
Statutory
Cost Auditor
Source: Capitaline
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
MOSL
forecast
20.6
24.2
Consensus
forecast
28.2
37.0
Variation
(%)
-27.0
-34.6
Source: Bloomberg
2 August 2017
6

Solar Industries
NOTES
2 August 2017
7

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 Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, 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. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
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), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
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 requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
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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
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a)
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MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
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companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
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This report has been prepared by MOSL 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 MOSL. 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. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Solar Industries
Disclosure of Interest Statement
Analyst ownership of the stock
Solar Industries
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL 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 MOSL & 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
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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 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:
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. MOSL, 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 MOSL. 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 MOSL 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 MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL 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.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
2 August 2017
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