Motilal Oswal Financial Services

31 July 2019

Q1FY20 Results Update | Sector: Agri

UPL

BSE SENSEX

37,481

S&P CNX

11,118

CMP: INR596

TP: INR630 (+6%)

Neutral

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LATAM continues driving overall growth

Big miss; leverage remains a concern



Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

UPLL IN

765

454.9 / 6.6



709 / 388

0/12/39

1996

72.1

2021E

380.4



89.9

34.6

45.2

13.4

246.5

19.6



11.6

13.2

2.4

Financials & Valuations (INR b)

Y/E Mar

2019 2020E

Net Sales

218.4

347.8

EBITDA

41.1

77.9

PAT

22.0

30.5

EPS (INR)

28.8

39.8

Gr. (%)

-1.3

38.4

BV/Sh (INR)

191.4

214.0

RoE (%)

18.5

19.7

RoCE (%)

10.3

10.2

P/E (x)

20.7

15.0

P/BV (x)

3.1

2.8

Estimate change

TP change

Rating change

Y/E March

Net Sales

YoY Change (%)

Total Expenditure

EBITDA

Margins (%)

Depreciation

Interest

Other Income

Exch. difference on trade rec./payable

PBT before EO expense

Extra-Ord expense

PBT

Tax

Rate (%)

MI & P/L of Asso. Cos.

Reported PAT

Adj PAT

YoY Change (%)

Margins (%)

41,340

32,870

8,470

20.5

1,750

1,230

500

5,700

5,660

520

9.2

5,100

5,590

11.6

13.5

Op. performance below expectations:

Revenue (including Arysta) rose 91%

YoY to INR79.1b (our estimate: INR81.9b) in 1QFY20. However, on a like-to-

like basis (i.e., including Arysta in 1QFY19), revenue was up 7% YoY (volume

growth: 5%, price growth: 1% and exchange gain: 1%). Reported EBITDA was

up 47% YoY to INR12.5b (our estimate: INR18b; +11% YoY on a like-to-like

basis). Adj. PAT declined 13% YoY to INR4.9b (our estimate: INR8.1b).

LATAM continues leading growth; India/Europe drag:

LATAM revenue grew

25% YoY – the fourth straight quarter of 25%+ YoY growth. However,

India/Europe revenue declined by 8%/3% YoY owing to delayed/weak

weather conditions. Consol. gross margin was hurt by lower revenue

contribution from the relatively higher-margin European business. Synergy

benefit was USD20m on revenue front and USD18.6m on cost front.

Key concall takeaways:

(i) Maintained guidance of 8-10% revenue growth

and 16-20% EBITDA growth for FY20. (ii) Debt increased by INR7.95b QoQ

due to USD90m payout on account of increased working capital in Arysta

and USD13-14m payout for Biopen, an acquisition in Costa Rica.

Valuation view:

We cut our earnings estimate by 2%/9% for FY20/21 to

factor in higher depreciation and interest cost. High debt remains a key

concern owing to the Arysta acquisition (significant rise in net D/E from 0.4x

in FY18 to 1.8x in FY19). We value the stock at 14x FY21E EPS (~10% discount

to its five-year average trading multiple, mainly due to its highly leveraged

balance sheet). Our TP of INR630 implies a 6% upside. Maintain

Neutral.

(INR Million)

FY20E Var

1QE %

81,945 -4

98.2

63,962

17,984 -31

21.9

5,500

3,000

1,169

10,652 -71

2,100

8,552 -73

1,283

1,249

6,021 -70

8,121 -40

45.3

9.9

Cons.: Quarterly Earning Model (Incl-Arysta)

FY19

FY20

FY19 FY20E

2QE

3QE

4QE

42,570 49,210 85,250 79,060 73,540 91,968 103,206 218,370 347,774

12.9

17.3

49.8

91.2

72.8

86.9

21.1

25.7

59.3

34,180 39,050 71,150 66,600 56,049 69,034 78,201 177,250 269,884

8,390 10,160 14,100 12,460 17,490 22,935 25,004 41,120 77,889

19.7

20.6

16.5

15.8

23.8

24.9

24.2

18.8

22.4

1,810 1,820 4,310 5,770 5,800 6,200

6,840

9,690 24,610

1,810 2,020 4,050 3,980 4,000 4,000

4,000

9,630 15,980

320

370

480

390

304

352

480

2,400

1,526

520

780 1,190

2,990

4,570 5,910 5,030 3,040 7,994 13,086 14,644 21,210 38,765

570

910 2,990

720 1,160 1,160

1,160

4,510

4,200

4,000 5,000 2,040 2,320 6,834 11,926 13,484 16,700 34,565

1,160

280

-310

120 1,237 2,161

2,703

1,650

6,222

5.6 -15.2

5.2

18.1

9.9

140

110

290

420 1,195 1,809

1,021

580

4,445

2,700 4,610 2,060 1,780 4,402 7,956

9,760 14,470 23,898

3,580 6,340 6,510 4,880 5,562 9,116 10,920 22,020 30,478

7.8

0.3 -14.9 -12.7

55.4

43.8

67.7

-1.3

38.4

8.4

12.9

7.6

6.2

7.6

9.9

10.6

10.1

8.8

Adjusted PAT = Reported PAT + forex adjustment + exceptional item

Sumant Kumar – Research Analyst

(Sumant.Kumar@MotilalOswal.com); +91 22 6129 1569

Darshit Shah – Research Analyst

(Darshit.Shah@motilaloswal.com); +9122 6129 1546

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.

UPL

Operating performance below expectations



Revenue (including Arysta) rose 91% YoY to INR79.1b (our estimate: INR81.9b)

in 1QFY20. However, on a like-to-like basis (i.e., including Arysta in 1QFY19),

revenue was up 7% YoY (volume growth: 5%, price growth: 1% and exchange

gain: 1%).

Reported EBITDA was up 47% YoY to INR12.5b (our estimate: INR18b; +11% YoY

on a like-to-like basis).

Adj. PAT declined 13% YoY to INR4.9b (our estimate: INR8.1b) owing to higher

depreciation (up 3.3x YoY to INR5,770m), interest cost (up 2.3x YoY to

INR3,980m) and a decrease in other income (down 68% YoY to INR390m), partly

offset by a lower tax rate (5.2% in 1QFY20 v/s 9.2% in 1QFY19).

Exhibit 2: Quarterly EBITDA trend

Growth %

91.2%

49.8%

EBITDA (INRm)

Margin %

16.5% 15.8%

20.1% 19.1% 19.8% 21.4% 20.5% 19.7% 20.6%

Exhibit 1: Quarterly revenue trend

Revenue (INRm)

12.9% 17.3%

6.1% 6.5% 7.0% 6.5% 11.0%

Source: Company, MOFSL

Exhibit 3: Quarterly adj. PAT trend

Adj. PAT (INRm)

28.6%

11.6%

-7.4%

-9.5%

7.8%

Growth %

Exhibit 4: Quarterly growth break-up

Volume Growth (%)

Price Growth (%)

Exchange Growth (%)

19.9%

0.3%

-14.9% -12.7%

10% 11% 12% 8% 10% 8%

-1% -2% -2% -1% -1%

-2%

-3% -3% -3%

Source: Company, MOFSL

1QFY20 and 4QFY19 includes Arysta numbers

Source: Company, MOFSL

De-growth in India as sowing delayed



UPLL (including Arysta) reported revenue of INR11.8b in India (15% revenue

contribution in 1QFY20), down 8% YoY.

Growth was hampered by a shortfall of rains in Jun’19, delaying the season and

consequently product placement.

Further, lower prices of other NSH molecules resulted in a shortfall of non-

selective herbicide sales.

Increase in prices of key products in the herbicide and insecticide category was

well accepted.

31 July 2019

UPL

Exhibit 5: Quarterly revenue trend - India

Quarterly Revenue Trend - India

13.2%

8.7% 7.5%

-5.9% -6.4%

-20.8%

11,940 9,090 5,600 4,340 11,180 9,970 6,140 4,600 12,890 10,770 4,860 4,910 11,859

Revenue (INRm)

9.7% 9.6%

6.0%

11.6%

Growth (%)

8.0%

6.7%

-8.0%

*Including Arysta

Source: Company, MOFSL

Brazil – strong performance across row crops led to 25% revenue growth in

LATAM



UPLL reported strong revenue growth of 25% YoY to INR23.7b in LATAM (30%

revenue contribution in 1QFY20).

Overall response of the combined UPL product portfolio for several crops

resulted in good placements.

Growth was driven by Argentina and South Cone.

Exhibit 6: Quarterly revenue trend – LATAM

Quarterly Revenue Trend - LATAM

36.7%

34.4%

Revenue (INRm)

Growth (%)

25.8% 26.5% 25.9% 25.0%

12.8%

17.2%

7,370

13,850

18,060 17,650

17.2%

5.7% 5.2% 4.0% 7.2%

18,974 17,420 22,840 22,230 23,718

6,970 13,170 17,360 16,460

* Including Arysta

Source: Company, MOFSL

Europe faces headwinds due to drought



Revenue declined 3% YoY to INR16.6b in Europe (21% revenue contribution in

1QFY20).

Delayed and weak season in eastern and western Europe due to drought and

heat was partially mitigated with double-digit growth in the Mediterranean

region.

Severe heat wave across Europe led to uncertainty, and thus, a reduction in

herbicide and fungicide sales.

De-growth was driven by a 10% reduction in sugar-beet plantation.

31 July 2019

UPL

Exhibit 7: Quarterly revenue trend - Europe

Quarterly Revenue Trend - Europe

20.7%

11.5%

-4.7%

8.6%

4.3% 6.5%

Revenue (INRm)

13.3%

Growth (%)

36.6%

17.9%

1.1%

-3.0%

7.3%

10.8%

5,610 3,410 3,300 9,160 5,850 3,630 3,740 9,830 17,116 3,670 5,110 11,590 16,603

* Including Arysta

Source: Company, MOFSL

Africa drives growth for RoW business



The company delivered growth of 7% in RoW (19% contribution in 1QFY20) to

INR15b.

South East Asia saw weaker demand due to delayed rains, coupled with supply

chain delays from China in cosmetics and pharma in Japan.

This was offset by strong growth in south and west Africa.

Exhibit 8: Quarterly revenue trend - RoW

Quarterly Revenue Trend - ROW

27.8%

Revenue (INRm)

14,039

Growth (%)

15,021

7.0%

2.1%

12.6%

5,530

5,990 6,330

1.9% 1.6%

6,690

12.7%

8.9%

6,320

8.5%

5.5%

5.3% 5.5% 5.9%

11,270 6,020

7,740

6,870 11,870

12,120

* Including Arysta

Source: Company, MOFSL

Strong performance amidst weak market



UPLL reported revenue growth of 6% in North America to INR11.9b (15%

contribution in 1QFY20).

Due to floods in the Midwest, c.10m acres of sowing of row crops, especially

corn and soybean, was impacted, resulting in a c.10% overall decline in market.

Despite this, UPLL saw a rising market share from key customers, which was

contributed by uncertainty due to US-China trade war and a positive post-

integration momentum.

31 July 2019

UPL

Exhibit 9: Quarterly revenue trend – North America

Quarterly Revenue Trend - North America

25.0%

Revenue (INRm)

Growth (%)

21.5%

3,930

13.5%

6,390

6,600

8.0% 6.7% 8.5%

4,020

6.0%

6.6% 4.8%

3,750

5.1%

2.3%

0.5% 0.2%

12,150 6,810

7,130 12,960 11,188

8,660 14,710 11,859

* Including Arysta

Source: Company, MOFSL

Concall takeaways



The company has maintained its guidance for 8-10% revenue growth and 16-

20% EBITDA growth in FY20 on a base of INR325b revenue and INR69b EBITDA.

Synergy benefit was USD20m on revenue front and USD18.6m on cost front,

giving it a run-rate of USD143m (target - USD120m), keeping it on track to

achieve the yearly target of USD100m on the revenue front and USD80m on the

cost front.

Working capital cycle improved marginally by 2 days YoY to 115 days in 1QFY20,

mainly led by a reduction in receivable days. This, however, was offset by an

increase in inventory days (inventory days: 107 days in 1QFY20 v/s 98 days in

1QFY19, receivable days: 122 v/s 136, payable days: 113 v/s 117).

Debt increased by INR8b QoQ due to USD90m payout on account of increased

working capital in Arysta and USD13-14m payout for Biopen, an acquisition in

Costa Rica.

The company had taken a loan of USD3b for Arysta acquisition at the rate of

LIBOR+160bp. The company swapped USD1.1b loan into Euros, shaving off 1.5%

points in interest cost. UPPL has also swapped USD400m of loan into Yen which

saved 75bp in interest cost.

Tax rate has been guided at 18-20% for the combined entity.

Capex of INR4b was incurred during the quarter.

The company targets to reduce debt by USD500m by the end of the year.

Net debt as of 30

Jun’19 stood at INR271b, and gross debt at INR292b.

Ind-AS 116 impact: EBITDA improvement by INR400m and PAT decline by

INR70m.

Slight contraction in gross margin was on account of the changing product mix,

as contribution from Europe (which has higher margins) declined.

Valuation and view

We cut our earnings estimate by 2%/9% for FY20/21 to factor in higher depreciation

and interest cost. High debt remains a key concern owing to the Arysta acquisition

(significant rise in net D/E from 0.4x in FY18 to 1.8x in FY19). We value the stock at

14x FY21E EPS (~10% discount to its five-year average trading multiple, mainly due

to its highly leveraged balance sheet). Our TP of INR630 implies a 6% upside.

Maintain

Neutral.

31 July 2019

UPL

Story in charts

Exhibit 10: Expect revenue CAGR of 32% over FY19-21

Revenue (INRb)

Growth (%)

59.3

140.5

16.2

163.1

16.1

6.5

FY16

FY17

FY18

218.4

FY19

347.8

FY20E

FY21E

380.4

173.8

25.7

9.4

23.6

FY15

26.2

FY16

32.2

FY17

35.2

FY18

41.1

FY19

77.9

FY20E

89.9

FY21E

19.5

18.6

Exhibit 11: Margin to expand 480bp over FY19-21

EBITDA (INRb)

19.8

20.2

Margin (%)

22.4

18.8

23.6

120.9

12.3

FY15

Source: Company, MOFSL

Exhibit 12: Expect adj. PAT CAGR of 25% over FY19-21

Adj. PAT (INRb)

50.4

55.5

38.4

13.6

(7.5)

14.7

FY15

FY16

21.1

FY17

FY18

22.3

5.9

(1.3)

22.0

FY19

30.5

FY20E

34.6

FY21E

13.4

Growth (%)

Exhibit 13: Return ratios trend

RoE (%)

22.4

19.8

31.7

26.4

26.9

23.1

10.3

18.5

FY15

FY16

FY17

FY18

FY19

10.2

19.7

FY20E

RoCE (%)

20.1

20.2

11.6

19.6

FY21E

Source: Company, MOFSL

Exhibit 14: Net D/E to rise (x)

Net D/E

1.8

1.6

1.3

0.6

0.3

Exhibit 15: Geographical mix of revenue (UPLL ex-Arysta)

India

19%

15%

17%

28%

22%

Latin America

18%

13%

30%

21%

FY16

18%

13%

33%

18%

FY17

Europe

18%

13%

33%

18%

FY18

ROW

18%

17%

14%

36%

17%

FY19

North America

17%

16%

13%

38%

16%

FY20E

16%

13%

39%

16%

FY21E

0.4

FY15

FY16

FY17

FY18

FY19

FY20E

FY21E

FY15

Source: Company, MOFSL

31 July 2019

UPL

Financials and Valuations

Consolidated - Income Statement

Y/E March

Total Income from Operations

Change (%)

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

Exchange difference on trade rec. & payables

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Prior Period Items - Income / (Expenses) - Net

Share of (profit)/loss of ass. & JV

Minority Interest

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

FY14

107,709

17.3

87,526

81.3

20,183

18.7

4,069

16,113

4,853

1,239

-75

12,574

853

11,721

2,217

18.9

156

-221

9,498

9,754

20.0

9.1

FY15

120,905

12.3

97,279

80.5

23,626

19.5

4,245

19,381

5,170

911

939

14,182

14,153

2,440

17.2

-209

433

11,440

14,667

50.4

12.1

FY16

140,480

16.2

114,300

81.4

26,180

18.6

6,760

19,420

7,040

3,160

2,230

13,310

1,290

12,020

1,650

13.7

850

120

9,400

13,560

-7.5

9.7

FY17

163,120

16.1

130,890

80.2

32,230

19.8

6,720

25,510

7,350

4,440

2,380

20,220

810

19,410

1,890

9.7

190

17,270

21,080

55.5

12.9

FY18

173,780

6.5

138,620

79.8

35,160

20.2

6,750

28,410

7,830

4,140

110

24,610

630

23,980

2,750

11.5

930

20,220

22,320

5.9

12.8

FY19

218,370

25.7

177,250

81.2

41,120

18.8

9,690

31,430

9,630

2,400

2,990

21,210

4,510

16,700

1,650

9.9

-140

720

14,470

22,020

-1.3

10.1

(INR Million)

FY20E

347,774

59.3

269,884

77.6

77,889

22.4

24,610

53,279

15,980

1,526

38,765

4,200

34,565

6,222

18.0

-130

4,575

23,898

30,478

38.4

8.8

FY21E

380,391

9.4

290,461

76.4

89,930

23.6

26,221

63,709

15,049

1,522

50,182

10,036

20.0

-134

5,719

34,561

13.4

9.1

Consolidated - Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Minority Interest

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Goodwill on Consolidation

Capital WIP

Total Investments

Curr. Assets, Loans&Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

FY14

857

51,617

52,474

1,721

28,610

813

83,617

64,646

38,560

26,086

12,124

2,278

7,373

79,731

24,801

32,085

10,228

12,618

43,973

26,919

13,373

3,681

35,757

83,617

FY15

857

57,746

58,603

444

27,815

446

87,307

65,352

39,537

25,815

14,493

5,831

7,636

89,064

29,376

37,930

10,098

11,659

55,532

32,177

19,207

4,148

33,532

87,307

FY16

860

20,060

58,890

440

47,710

-3,900

103,140

93,150

58,700

34,450

4,170

4,840

3,350

117,980

37,870

51,000

11,890

17,220

61,650

39,620

20,990

1,040

56,330

103,140

FY17

1,010

72,140

73,970

330

60,580

-5,010

129,870

96,060

59,540

36,520

4,190

7,920

3,780

144,700

41,560

56,560

28,950

17,630

67,240

48,850

17,300

1,090

77,460

129,870

FY18

1,020

90,670

91,690

190

65,070

-4,410

152,540

106,340

66,290

40,050

4,320

13,190

10,340

157,240

45,380

60,570

28,940

22,350

72,600

56,750

14,740

1,110

84,640

152,540

FY19

1,020

145,430

146,450

33,580

288,610

22,110

490,750

244,490

75,980

168,510

150,500

17,830

7,080

279,250

92,700

118,160

28,510

39,880

132,420

94,230

29,550

8,640

146,830

490,750

(INR Million)

FY20E

1,530

162,146

163,676

38,155

278,610

22,110

502,551

268,754

100,590

168,164

150,500

13,566

7,080

393,757

143,379

193,419

22,181

34,777

230,516

143,572

62,599

24,344

163,241

502,551

FY21E

1,530

187,057

188,587

43,874

268,610

22,110

523,181

289,607

126,811

162,796

150,500

12,713

7,080

426,688

151,268

213,644

23,736

38,039

236,595

149,105

64,667

22,823

190,092

523,181

31 July 2019

UPL

Financials and Valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Fixed Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Net Debt/Equity

FY14

12.8

18.1

68.6

2.2

21.1

FY15

19.2

24.7

76.6

2.8

22.6

31.1

24.1

7.8

3.9

20.0

0.5

19.7

16.9

21.4

1.7

166

109

181

0.4

26.4

20.1

25.2

1.9

178

115

195

0.3

FY16

17.7

26.6

77.0

5.0

40.7

33.6

22.4

7.7

3.5

18.8

0.8

23.1

20.2

22.8

1.5

204

133

213

0.6

FY17

27.6

36.3

96.7

7.0

31.0

21.6

16.4

6.2

3.0

15.1

1.2

31.7

22.4

26.9

1.7

194

127

228

0.4

FY18

29.2

38.0

119.9

5.3

20.0

20.4

15.7

5.0

2.8

14.0

0.9

26.9

19.8

26.7

1.6

204

127

255

0.4

FY19

28.8

41.5

191.4

5.3

27.9

20.7

14.4

3.1

3.3

17.4

0.9

18.5

10.3

10.5

0.9

310

198

315

1.8

FY20E

39.8

72.0

214.0

8.7

27.9

15.0

8.3

2.8

2.0

9.1

1.5

19.7

10.2

9.7

1.3

315

203

315

1.6

FY21E

45.2

79.5

246.5

12.6

27.9

13.2

7.5

2.4

1.8

7.8

2.1

19.6

11.6

10.9

1.3

320

205

315

1.3

Consolidated - Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY14

12,574

4,069

4,323

-1,913

-3,970

15,083

-675

14,408

-5,664

8,744

1,791

1,010

-2,863

-11,444

-4,254

-1,102

-16,800

-5,255

15,482

10,228

FY15

14,182

4,245

4,576

-2,826

-5,529

14,648

-558

14,090

-5,311

8,780

-1,982

2,986

-4,307

-689

-7,395

-1,830

-9,913

-130

10,228

10,098

FY16

13,310

6,760

6,350

-5,030

-7,040

14,350

-390

13,960

-6,930

7,030

800

-10,728

-16,858

12,840

-5,860

-2,290

4,690

1,792

10,098

11,890

FY17

20,220

6,720

5,850

-4,040

-1,210

27,540

-850

26,690

-8,270

18,420

120

-2,040

-10,190

10,790

-7,950

-2,280

560

17,060

11,890

28,950

FY18

24,610

6,750

7,830

-2,750

-7,190

29,250

-630

28,620

-15,680

12,940

-6,560

2,810

-19,430

-810

4,490

-7,830

-4,040

-1,010

-9,200

-10

28,950

28,940

FY19

21,210

9,690

9,630

-1,650

-62,620

-23,740

-4,510

-28,250

-288,970

-317,220

3,260

104,240

-181,470

223,540

-9,630

-4,040

-580

209,290

-430

28,940

28,510

(INR Million)

FY20E

38,765

24,610

15,980

-6,222

-22,740

50,393

-4,200

46,193

-20,000

26,193

-20,000

510

-10,000

-15,980

-6,672

-380

-32,522

-6,329

28,510

22,181

FY21E

50,182

26,221

15,049

-10,036

-25,296

56,119

-20,000

36,119

-20,000

-10,000

-15,049

-9,649

134

-34,564

1,555

22,181

23,736

31 July 2019

UPL

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the

Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products.

MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on

www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading

Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity

& Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository

Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory &

Development Authority of India (IRDA) as Corporate Agent for insurance products.

Details of associate entities of Motilal Oswal Financial Services Limited are available on the

website at

http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and

buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other

compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have

any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

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

MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should

be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant

banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental

research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from

MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or

use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong

Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst

Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of

research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity

to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these

securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not

located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S.

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under

applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act"

and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and

investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for

distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional

investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document

relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule

15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order

to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities

International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.

registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public

appearances and trading securities held by a research analyst account.

For Singapore

In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets

services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and

Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in

respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of

which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the

SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and

inform MOCMSPL.

Specific Disclosures

1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.

2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company

3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months

4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report

5 Research Analyst has not served as director/officer/employee in the subject company

6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months

8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

9 MOSL has not received any compensation or other benefits from third party in connection with the research report

10 MOSL has not engaged in market making activity for the subject company

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

31 July 2019

UPL

The associates of MOFSL may have:

financial interest in the subject company

actual/beneficial ownership of 1% or more securities in the subject company

received compensation/other benefits from the subject company in the past 12 months

other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

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

acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)

discussed herein or act as an advisor or lender/borrower to such company(ies)

received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from

clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the

research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and

may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of

MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.

The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,

representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The

report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as

customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed,

in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose

and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report

constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities

discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,

financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document

should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including

the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be

suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial

risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions

contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as

endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and

alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect

or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment

banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and

independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already

available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the

views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other

person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of

or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject

MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category

of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors,

employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may

arise from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any

and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold

MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,

expenses that may be suffered by the person accessing this information due to any

errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website

www.motilaloswal.com.CIN

no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:

INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company

Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management

Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of

Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a

group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory

services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee

of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj

Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

31 July 2019