Will India have two budgets in 2018?

30 August 2017

Economy

Diving into Trending Themes

Probable change in financial year more a tweak than a reform



A change in financial year from April-March to January-December has been discussed within the government,

and we believe it could happen as soon as next year. If so, India would have two budgets in 2018 – on February

1, 2018 (for truncated FY19; ending December 2018) and another on November 1, 2018 for the full year ending

December 2019.

NITI Aayog study

indicates that an April-March financial year seriously limits the government’s ability to

account for uncertain monsoons. Further, it leads to a suboptimal utilization of the working season. While the

advancement of the Union Budget by a month has already resolved the latter issue, it is argued that

commencing the financial year from January is the best alternative to address the former issue.

A change in financial year has been argued unsuccessfully since the 1870s. Its effectiveness today is debatable,

however, given the reduced importance of the agricultural sector. Moreover, the need for structural reforms in

agriculture, or otherwise, is independent of the financial year. While the government might be convinced of

the merits of changing the financial year, if it happens, we believe it would be more of a tweak than a

structural reform.

Exhibit 1

on the next page presents the timelines

associated with the budget process in consonance with a

budget presentation date of early-February: Budget

estimates are finalized a month before presentation by

late-December or early-January. (The original timeliness

is provided as per end-February Budget presentation by

Ministry of Finance.

However, with presentation

advanced by a month this year, we have also advanced

timeliness of budget-related activities by a month).

Since it is not possible to have reliable estimates of the

ensuing South-West (SW) monsoon by this time, the

government is unable to factor in the coming monsoon

while formulating the budget. Thus, it cannot account for

the impact of good/poor rainfall on receipts or factor in

any additional expenditure owing to drought/flood relief.

Besides, the government’s responsiveness towards poor

rainfall in the recently concluded monsoon is also

affected, because by the time it releases fresh

allocations, the impact of the previous SW monsoon is

well over (6-7 months past).

India’s current financial year (running from April of the

preceding year to March; FY18 starts from April 2017 and

ends in March 2018) was adopted in 1867, so as to align

the Indian financial year with that of the British

government. Since then, there have been questions

surrounding the appropriateness of this practice with

suggestions for change coming in from multiple quarters.

Previous governments chose to maintain status quo on

this issue. However, given this government’s interest in

the

matter,

the economy could see the change

happening next year.

If so, there would be two budgets in 2018 – on February

1, 2018 for the truncated 9-month year ending

December 2018 and on November 1, 2018 for full year

ending December 2019. In this note, we assess the

arguments presented in favor of (a) changing the

financial year, and (b) a January-December financial year.

Monsoons key consideration behind the need to change

financial year

NITI Aayog’s discussion

note

enlists the main

considerations behind the suggestion to change the

financial year. The main reason is that the government is

not able to account for the impact of monsoon rains in

its budget in the April-March year.

The main argument for changing the

financial year is that the government is

not able to account for the impact of

monsoon rains in its budget in the

April-March financial year

Nikhil Gupta – Research Analyst

(Nikhil.Gupta@MotilalOswal.com); +9122 3982 5405

Rahul Agrawal – Research Analyst

(Rahul.Agrawal@motilaloswal.com); +9122 3982 5445

30 August 2017

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.

Exhibit 1: Budget-related key activities and typical timelines (assuming budget presentation as on early-February)

Jul

List of Key Activities

Issue of Budget Circular to all

Min/Dept

Co-ordination with Min/Dept for

receipts budget and scrutiny of

estimates including Pre-Budget

meetings

Communication of ceilings of

expenditure (Plan & Non-Plan

RE and Non-Plan BE)

Closure of estimations of tax

and non-tax revenues

Discussions and closure of all

receipts and expenditure

estimates

Printing of Budget Documents

PM and Cabinet approval

followed by Budget

presentation in Parliament

Laying of Budget documents in

Parliament

Passing of Appropriation (Vote

on Account) Bill by Parliament

Considerations and discussions

on Appropriation (Main) Bill and

Finance Bill - As per Parliament's

Business

President's assent to the

Appropriation Bill and Finance

Bill

Aug Sep

Oct Nov

Dec

January

February

W1 W2 W3

March

April

W stands for week

Source: Budget Manual 2010 – Ministry of Finance, MOSL

Why commencing financial year from January and

not October?

Given that it is not possible to accurately forecast the

monsoon, the

L K Jha Committee

on Change in Financial

Year (1985) had argued that

the later in the financial year

the South-West monsoon comes, the lower would be its

impact on the budgeted estimates for that year.

Accordingly, it had recommended that the financial year

be fixed such that the post-monsoon period in the year

was as short as possible. This would imply that the major

part of the financial year would be subject to the effects

of the monsoon in the preceding year, which would be

known and thus, could be factored into the budget

preparation. Besides, it would also restrict the impact of

the upcoming monsoon to a minimum.

Going by these arguments, the Committee stated that a

financial year commencing on 1

October would be

ideal. However, the current budget calendar requires the

budget to be presented two months in advance

(Exhibit

2 on the next page).

In other words, for all practical

purposes, the budget has to be finalized almost a quarter

before the commencement of the financial year. For a

financial year commencing on 1

October, thus, the

budget would have to be finalized by early July (or late-

June). However, the impact of SW monsoon would not

30 August 2017

be known at this stage, which would defeat the entire

purpose of changing the financial year.

That leaves the alternative of a financial year

commencing on 1

January because a financial year

commencing on 1

July would be not only no

improvement over the current practice but would also

lengthen the post-monsoon period.

Exhibit 2

on the next

page lists out the various options for the financial year

and the associated milestones. With financial year

aligning with calendar year, the budget would need to be

finalized by early October (or late September), by when

the full impact of monsoon and kharif prospects would

be available. Consequently, both the

L K Jha Committee

as well as the

NITI Aayog discussion note

recommend

that the financial year should commence from 1

January.

The Committee stated that a financial year

commencing on 1

October would be ideal…

…

however, the impact of SW monsoon would

not be known at this stage, defeating the

entire purpose of changing financial year

Exhibit 2: Important milestones for Budget preparations under various options

Start date of financial year

Number of months in post-monsoon

period

Likely Budget Presentation Day

Likely date of receipts and expenditure

closure

Likely timelines of pre-budget meetings &

discussions

Likely dates by which SW Monsoon

situation could be credibly known

Option 1

(Recommended)

1st January

Oct 31/1 Nov

By Oct 1st week

July-Sep

Mid Aug –

Sep 1st week

Option 2

(Current)

1st April

Jan 31/1 Feb

By Jan 1st week

Sep – Nov

Mid Aug –

Sep 1st week

Option 3

(Retrograde)

1st July

30 April/1 May

By April 1st week

Dec-Feb

Mid Aug –

Sep 1st week

Option 4

(Ideal)

1st October

30 July/1 Aug

By July 1st week

Mar-May

Mid Aug –

Sep 1st week

Source: NITI Aayog discussion note, MOSL

Concern of sub-optimal utilization of working

season already resolved

Notwithstanding regional variations, the 8-9 month

period between October and May/June is typically

considered as the working season in India, as

construction/ development-related activities slow down

during the SW monsoons (June/July-September). The

general argument against the current financial year is

that it leads to sub-optimal utilization of the working

season. The argument goes as follows:

Allocation for ongoing development works of the

government lapses at year-end on 31

March. With the

budget being presented at end-February, the

Appropriation Bill and Finance Bill are approved by the

President in early May, leading to a delay in the

authorization of fresh sanctions by mid-to-late-May.

Thereafter, the monsoon sets in, interrupting

development work for another 3/4 months. Hence, the

first two quarters of the year (roughly) get affected,

leading to a reduction in the working season from an

ideal 8-9 months to 6-7 months in the financial year.

Nevertheless, the concern – presented in both the L K

Jha Committee report and NITI Aayog note – has already

been resolved by advancing the budget by a month. With

the budget now being presented on 1st February rather

than end-February, fresh sanctions are approved by late-

March or early-April, mitigating the adverse impact on

the utilization of the working season. Not surprisingly,

the central government spending has increased

tremendously in 1QFY18.

Need to align with international practices

It is also argued that most governments across the world

use the calendar year (January-December) as their

financial year. These include most of the European

countries (except the UK), Asian countries (except Japan,

Thailand, India, Pakistan), and South American countries.

Besides, the tax year coincides with the calendar year in

almost all countries – even where the financial year is

different from the tax year (US, Singapore). Therefore,

moving from April-March to January-December would

also align India with international practices.

Implications on presentation of national accounts

Detailed discussions with the Central Statistical Office

(CSO) were also undertaken by both committees to

understand the implications of a change in financial year

on the presentation of national accounts. As per the NITI

Aayog discussion note,

“…the CSO does not think that this

particular issue poses any serious limitations to the

quality/efficacy of the data for the purposes of statistical

reporting in the national accounts…”.

The L K Jha

Committee provided a detailed list of frequency-wise 35

important basic statistical series published by the CSO.

Notably, 11 series are already complied on calendar year

basis, and only 10 on financial year basis. Another 11

series are available on monthly/quarterly basis, which

could be conveniently converted into financial/calendar

year

(please see

Appendix

at the end of the report). It was

mentioned in the Jha Committee report,

“…Of the 22

series on financial year basis, conversion from financial

year to calendar year will not pose any problem in respect

of 11 series for which data are available either monthly or

With the budget now being presented

on 1st February rather than end-

February, fresh sanctions are approved

by late-March or early-April, mitigating

the adverse impact on the utilization of

the working season

30 August 2017

quarterly. But, for the remaining 11 series, the statistical

returns currently being used for collection of requisite data

will have to be slightly amended for effecting the change

over from financial year to calendar year…”.

Accordingly, the NITI Aayog note concludes that

“…it is

clearly possible for the CSO to align the existing statistical

period with that of the existing UN reporting standards –

which being the calendar year and that it seems

preferable as well…”.

Change in financial year, if done, would be more of

a tweak than a reform

We believe changing the financial year from April-March

to January-December is unlikely to yield significant

benefits and do not see this move as a reform measure

(in line with the arguments presented by the

government to maintain status quo).

The government has already subverted the argument for

changing the financial year owing to sub-optimal

utilization of the working period by advancing the Union

Budget by a month (from 28

February to 1

February).

This has resulted in early disbursement of funds to the

ministries and is reflected in the change in spending

pattern; the center has spent 30.3% of BE during April-

June 2017 (1QFY18) against an average of 23.4% in the

last five years and a previous high of 26.4% in 1QFY08.

We believe that the demand to align India’s financial

year with most other countries also does not necessitate

a change, as a “global standard” financial year does not

exist. Countries such as the US and the UK have non-

calendar financial years.

This leaves the primary argument that the present

financial year does not allow the government to factor in

the impact of monsoons in its budget. This argument is

also a weak one such that:

The relative importance of agriculture in the Indian

economy has lessened over the years. The share of

agriculture & allied sectors in GDP has declined from

over 50% in the early 1950s to ~15% in FY17

(Exhibit

3).

The share of agriculture in total employment has

also been declining over the years;

Exhibit 4

shows

that the share of rural population employed in

primary activities (mainly agriculture & allied

activities) has declined over the years.

Why was the recommendation disregarded earlier?

Recommendations for changing the financial year had

begun as early as 1870s, when the current practice

began. It is then interesting to note what stopped

various governments from accepting these

recommendations. Three key arguments

presented

for

maintaining the status quo:

1. The advantages arising out of the change would only

be marginal in view of the innumerable

considerations in the formulation of budget policies;

Change in the financial year would upset the

collection of data and it might take a long time to

return to normalcy in this regard;

and

3. The change would create a large number of

problems, as extensive amendments to tax laws and

systems, financial procedures relating to expenditure

authorization and other matters would become

necessary, and in that process, the administrative

machinery would get diverted to problems of

transition instead of concentrating on improving tax

collection.

Previous governments were of the view

that the advantages arising out of the

change would only be marginal in view

of the innumerable considerations in

the formulation of budget policies

We believe that the demand to align

India’s financial year with most other

countries also does not necessitate a

change, as a “global standard”

financial year does not exist. Countries

such as the US and the UK have non-

calendar financial years

30 August 2017

Exhibit 3: Share of agriculture in GDP has declined over the

years

Share of agriculture and allied activities in GDP (%)

Exhibit 4: Share of agriculture in employment has also

declined continuously

NSS Survey period

January-December 1983

January-December 1992

%age employed in the primary

sector in rural areas

Male

77.5

75.7

75.8

70.8

66.5

59.4

Female

87.5

86.2

88.5

85.2

83.5

74.9

January-December 1997

January-December 2003

July 2007-June 2008

July 2011-June 2012

Source: State budget documents, MOSL

2. Government receipts are a function of multiple

factors such as the performance of various economic

activities, efficiency of tax collections, inflation,

changes in taxation rates and duties, etc.

It is not

possible to establish the impact of monsoons on the

government’s receipts in isolation – NITI Aayog

acknowledges this in the discussion paper on

changing the financial year.

Hence, the argument

that poor monsoons impact government revenues

(and thus the need to change the financial year to

account for the monsoon in the budget) rests on

weak grounds.

3. Likewise, the argument that uncertain monsoons

may lead to unexpected expenditure (on droughts or

floods) is also not very convincing. The government

has multiple avenues to address such issues in the

form of contingency fund, disaster relief funds, Prime

Minister’s relief funds, etc.

The NITI Aayog

discussion note counter-argues that such measures

are reactionary when contrasted with the quality of

planning that ministries could potentially do if they

have information about monsoons.

However, this problem would not be resolved even

with a change in financial year. The real problem

here is the inability to forecast the upcoming

monsoon while preparing the budget. As mentioned

earlier, a switch to the January-December year

would imply that three months would be left in the

post monsoon period (Exhibit 2). Any meaningful

fiscal response to the monsoon in the form of

flood/drought relief would have to be delivered

immediately towards the end of the monsoon

(September) or in the ensuing period (October-

December). Given that the monsoon cannot be

forecasted 8-9 months in advance, this fiscal

response would continue to be reactionary despite a

change in the financial year.

Given that the monsoon cannot be

forecasted 8-9 months in advance, the

fiscal response would continue to be

reactionary despite a change in the

financial year

Finally,

the structural reforms needed to delink the

agricultural sector from fiscal support are

independent of the financial year.

It is ironic that

even after 70 years of independence, only about half

of the area under total food-grains is irrigated. We

believe that the government must continue to focus

on making agriculture less dependent on rainfall by

making sufficient capital investments in irrigation,

water and soil conservation. Besides, diversification

of agriculture away from crops towards allied

activities would increase the resilience to monsoon

variations.

Overall,

we believe that even if the government

changes the financial year to January-December, it

would be more of a tweak than a structural reform.

30 August 2017

Appendix

Exhibit 5: List of Basic Statistical Series

Series on Calendar Year Basis

Climate

Mining

Civil Aviation

Tourism

Trade Union

Crime Statistics

Accident Statistics

Newspapers and periodicals

Labour

Forests

Sericulture

Irrigation

National Product

Income Tax

Local Bodies

Five Year Plans

Insurance

Roads

Series on Financial Year Basis

10. Prices

11. Public Health Statistics

Series on Agriculture Year Basis

Crop Statistics

Cooperative Statistics

10. Education

11. Housing

Series on Monthly/Quarterly basis

Joint Stock Companies

Trade

Balance of Payments

Railways

Posts and Telegraphs

Exchange, Coinage & Currency

Industry

Electricity

Motor Vehicles

10. Shipping

11. Banks

Source: L.K. Jha Committee on Change in Financial Year, MOSL

30 August 2017

NOTES

30 August 2017

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.

MOSL 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 MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

Research Analyst may have

served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in the past 12 months.

In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:

managed or co-managed public offering of securities from subject company of this research report,

received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,

received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.

Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.

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 of

Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL 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 MOSL 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.

Terms & Conditions:

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.

Disclosure of Interest Statement



Analyst ownership of the stock

Companies where there is interest

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

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 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

30 August 2017