14 February 2020
3QFY20 Results Update | Sector: Oil & Gas
BPCL
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
BPCL IN
1,967
CMP: INR477
TP: INR522 (+9%)
Neutral
Marginally better than expected refining performance
1033.4 / 14.5
550 / 309
3/25/36
3300
Financials & Valuations (conso) (INR b)
Y/E March
Sales
EBITDA
PAT
EPS (INR)
EPS Gr.%
BV/Sh.INR
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuation
P/E (x)
P/BV (x)
EV/EBITDA (x)
Marginally higher-than-expected refining throughput and refining margin
more than compensated for the marginally weaker implied gross marketing
margin, resulting in a slight beat on EBITDA.
Continued strong marketing margin has been a solace in a weak refining
margin environment.
BPCL has been trading at forward PBV of the true deregulated period of
FY15-18. We do not see much upside despite the expected divestment.
Reiterate
Neutral.
EBITDA of INR27b (-2% QoQ) came in 5% higher than our estimate. Due to
the sharp decline in oil prices in 3QFY19, BPCL had witnessed an inventory
loss of INR33.3b v/s a gain of INR5.4b in 3QFY20 and a loss of INR260m in
2QFY20.
Forex loss was at INR1b in the quarter, as against a gain of INR6.6b in
3QFY19 and a loss of INR3.9b in 2QFY20.
Lower effective tax rate of 28.9% offset lower-than-expected other income,
leading to PAT of INR11.6b (5% beat; -32% QoQ).
For 9MFY20, standalone EBITDA stands at INR76b (-5% YoY), primarily due
to a poorer refining margin. 9MFY20 standalone PAT stands at INR39.5b (-
1.5% YoY).
Refining throughput stood at 8.41mmt v/s 7.5mmt in 3QFY19 and 7.7mmt in
2QFY20. Core GRM of USD2.2/bbl came in better than our estimate of
USD1.4 (v/s USD6 in 3QFY19 and USD3.8 in 2QFY20).
Implied gross marketing margin including inventory gain stood at INR4.8/lit
v/s INR2.9 in 3QFY19 and INR5 in 2QFY20.
Total domestic sales stood at 11.0mmt (+3% YoY, +8% QoQ).
Management guided that sale of stake in NRL and the government’s stake in
BPCL is likely to happen concurrently.
There is no plan to slow down the planned capex in light of the upcoming
divestment.
Refining margins are expected to remain weak for a few more months in
light of poor global demand growth. However, the company maintains
strong gross marketing margins.
In lieu of the poor refining margin environment, we value BPCL at 1.9x FY22E
PBV, at a 10% discount to the average over FY15-18 when there was true
deregulation of auto fuels without pricing intervention from the
government. Reiterate
Neutral
with a target price of INR522.
2019 2020E 2021E 2022E
2,982 2,872 3,016 3,105
158
85
43.4
137
61
30.9
174
91
46.3
49.7
178
95
48.1
3.8
Marginal beat on EBITDA
-12.9 -28.7
197.1 214.8 244.3 274.6
0.9
22.6
11.8
51.3
11.1
2.4
8.6
4.0
0.3
0.9
15.0
8.9
42.6
15.5
2.2
10.2
2.3
-3.0
0.8
20.2
10.6
36.4
10.4
2.0
8.1
3.0
6.2
0.7
18.5
10.0
37.0
10.0
1.7
7.7
3.2
7.0
Key operational highlights
Div yield (%)
FCF yield (%)
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Dec-19 Sep-19 Dec-18
53.0
53.3
53.9
19.3
18.8
16.8
14.1
14.6
14.6
13.6
13.3
14.7
Highlights from management commentary
FII Includes depository receipts
Valuation and view
Swarnendu Bhushan- Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Sarfraz Bhimani - Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com); +91 22 6129 1566
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.
 Motilal Oswal Financial Services
BPCL
Standalone - Quarterly earnings model
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Rate (%)
Adj PAT
YoY Change (%)
Key Assumptions
Refining throughput (mmt)
Core GRM (USD/bbl)
Marketing sales volume excld exports (mmt)
Marketing GM incld inv (INR/litre)
E: MOFSL Estimates
1Q
717.0
25.5
45.8
6.4
7.4
3.0
5.5
33.8
32.2
22.9
208.0
7.7
4.2
11.0
4.9
FY19
FY20
FY19 FY20E
2Q
3Q
4Q
1Q
2Q
3Q
4Q
722.9 791.7 739.9 763.2 643.4 747.3 724.8 2,971.5 2,878.7
35.6 30.6 13.4
6.4 -11.0 -5.6 -2.0
25.7
-3.1
33.5
0.8 45.3 21.5 27.6 27.0 27.5
125.4
103.6
4.6
0.1
6.1
2.8
4.3
3.6
3.8
4.2
3.6
7.6
7.8
9.1
9.1
9.5
9.7 10.7
31.9
39.0
3.3
3.4
3.5
4.5
6.4
5.1
5.4
13.2
21.5
5.4
9.7 10.6
5.4
8.7
5.1 11.0
31.1
30.2
18.7
5.9 46.0 13.5 16.6 16.4 22.3
104.4
68.8
34.9 16.0 32.0 20.5 -3.2 28.9 28.9
31.7
19.5
12.2
5.0 31.2 10.8 17.1 11.6 15.9
71.3
55.4
-48.3 -76.9 16.9 -53.1 40.2 135.2 -49.1
-9.9
-22.4
7.6
3.3
10.1
4.9
7.5
6.0
10.7
2.9
8.2
2.6
11.4
6.5
7.5
3.7
11.1
4.4
7.7
3.8
10.3
5.0
8.4
2.2
11.0
4.8
7.5
4.2
11.8
4.1
31.1
4.0
43.1
4.8
31.0
3.5
44.2
4.6
(INR Billion)
FY20 Var. vs
3QE
Est.
640.3
17%
-19.1
25.7
5%
4.0
10.2
-5%
5.4
-5%
7.3
-29%
16.7
-2%
33.3
11.1
5%
124.4
7.5
1.4
10.8
5.0
12%
57%
2%
-3%
Key highlights from management commentary
9MFY20 capex at INR63b; guidance of INR80b for FY20 and INR120b for FY21.
Ongoing capex would not be slowed down in anticipation of the upcoming
divestment.
Assam government has the first Right of Refusal for stake sale in Numaligarh
Refinery (NRL); sale in NRL and BPCL likely to happen concurrently.
The company has decided not to compete on margins in order to attract auto
fuel volumes.
EPC has been awarded in the Mozambique project.
DWT expected to happen in another 5-6 months in Brazil for the assessment of
potential reserves.
NRL GRM USD10.9/bbl without excise benefit, and USD34/bbl with excise
benefit; PAT of INR6.5b in 3QFY20.
Bina refinery GRM of USD7.9/bbl; PAT of INR960m in 3QFY20.
Valuation and view
In the current benign crude price environment (our estimate of USD65/bbl for
FY20/FY21), we expect to see structural changes in the pricing of LPG and
kerosene, which may bid farewell to all under-recoveries in the petroleum
sector.
During Jul'19-Jan'20, the OMCs appear to have increased the price of subsidized
LPG by INR63/cylinder. At the rate of INR10/cyl/month, it would hardly take 15
months for the subsidy to become nil. In FY19, OMCs incurred gross under-
recoveries of INR433b, of which LPG accounted for INR315b (~73%).
Deregulating LPG would boost the working capital of the OMCs. At end-FY19,
the OMCs had total government receivables of INR349b on account of
compensation for LPG/kerosene under-recoveries.
Raising prices of subsidized LPG cylinder augurs well for the OMCs, especially
keeping in mind the intended privatization of BPCL. However, the resolve of the
government would be tested if oil prices spike.
13 January 2020
2
 Motilal Oswal Financial Services
BPCL
BPCL has outperformed nifty by ~25% (in last six months) owing to plans of its
privatization plans.
BPCL is trading at par with its average since FY15. In our view, stabilization of
the Kochi refinery would support its GRMs. Also, deregulation of LPG would aid
privatization, although there are other bottlenecks that need to be cleared
before privatization.
Challenges remain on BPCL’s divestment to a private party, namely
a) guarantee of non-interference in pricing of auto fuels even if oil surges,
b) complexities involved in dealing with subsidiaries and JVs,
c) high employee cost.
Thus, we maintain neutral on the stock and value it at 1.9x (10% discount to
FY15-18) FY22 PBV to arrive at a target price of INR522.
Exhibit 1: BPCL – 1yr fwd PBV
P/B (x)
3.7
2.9
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.8
2.2
2.0
1.2
2.1
1.3
0.5
1.7
0.9
Source: Company, MOSFL
14 February 2020
3
 Motilal Oswal Financial Services
BPCL
Key charts from the quarter
Exhibit 2: Product sales (mmt)
Product Sales (mmt)
Source: Company, MOSFL
Exhibit 3: Reported GRM (USD/bbl)
BPCL GRM
8.0
8.6
6.3
7.7
6.3
3.9
5.0
3.1
7.8 7.8
6.1
5.1
5.9
6.0
4.9
8.3
6.7 6.4 6.4
Singapore GRM
7.3 7.0
6.5
7.5
6.3
3.2 3.5
3.4
3.2
8.0 7.9
6.0
6.1
4.3
5.6
2.8 2.7 2.8
1.7
Source: Company, MOSFL
Exhibit 4: Refining throughput (mmt)
Refinery thr'put (mmt)
Mumbai
6.8
6.4
6.1 6.0 5.9 6.2 6.2 6.4
6.0
3.0
3.3
2.7 2.7 2.5 2.7 2.7 2.8
3.3
8.4
7.9 7.7 7.6 7.5 8.2
7.7
7.5
7.0 7.3
4.3
4.0 4.0 4.3 3.7 4.4
3.8
3.4 3.6
4.4
3.4 3.2 3.4 3.5 3.5 3.6 3.8 2.7 3.1 3.7 3.7 3.9 3.8 3.4 3.8 3.8 3.1 3.9 4.1
Source: Company, MOSFL
14 February 2020
4
 Motilal Oswal Financial Services
BPCL
Story in charts
Exhibit 5: Throughput of BPCL (mmt)
Refinery Throughput (mmt)
Exhibit 6: GRM trend of BPCL
BPCL GRM (USD/bbl)
7.9
5.6
5.0
2.3
6.4
7.5
6.6
5.2
4.3
3.6
5.8
6.9
5.3
4.9
3.4
3.9
Reuters Singapore GRM (US$/bbl)
7.3
7.5
6.1
6.1
6.2
6.2
2012 2013 2014 2015 2016 2017 2018 2019 2020E2021E2022E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: Marketing volume
Marketing sales volume (mmt) - LHS
5.3
4.8
4.0 3.8 3.8
1.5
36.7
34.6
36.5 37.0
38.4
(1.0)
40.0
43.1
YoY (%) - RHS
48.2
46.4
3.8
44.7
3.8
3.8
Exhibit 8: Standalone return ratios (%)
RoE
22.5
16.8
9.1
9.9 10.9
19.7
13.2 13.9
17.1
14.8
24.3
28.3 28.2
ROCE
25.0
20.1
14.5
12.9
17.0 16.4
41.5
10.6 11.0 10.7
Source: Company, MOSL
Source: Company, MOSL
Exhibit 9: Debt/interest
Net debt (INRb)
227
156
14
104
63
6
2016
8
5
2017
2018
2019
2020E
2021E
2022E
13
21
21
Interest (INRb)
271
277
271
262
21
18
203
18
212
198
6
2012
2013
2014
2015
Source: Company, MOSL
14 February 2020
5
 Motilal Oswal Financial Services
BPCL
Financials and Valuations (conso)
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
RM & Other Expenses
Finished Gds Purchase
Other Oper. Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Net forex loss
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest/Share of JVs/associates
Reported PAT
Change (%)
Margin (%)
FY14
2,644
9.2
1,321
1,071
152
2,544
96.2
100
3.8
26
74
7
20
14
62
62
21
34.3
-1
39
107.9
1.5
FY15
2,426
-8.2
1,228
939
155
2,321
95.7
105
4.3
30
74
4
12
19
77
77
26
33.9
-3
48
22.9
2.0
FY16
1,878
-22.6
688
902
158
1,749
93.1
129
6.9
21
109
0
7
16
118
118
40
34.3
4
81
68.3
4.3
FY17
2,013
7.2
693
1,021
161
1,875
93.2
138
6.8
21
116
0
7
18
128
128
42
32.9
9
95
17.5
4.7
FY18
2,358
17.2
903
1,118
185
2,206
93.6
152
6.4
29
123
0
12
18
129
129
44
34.0
13
98
3.0
4.2
FY19
2,982
26.5
1,291
1,321
213
2,824
94.7
158
5.3
34
124
7
18
20
120
120
44
36.6
9
85
-12.9
2.9
FY20E
2,872
-3.7
1,213
1,316
207
2,735
95.2
137
4.8
41
95
5
25
19
85
85
28
33.3
4
61
-28.7
2.1
(INR billion)
FY21E
3,016
5.0
1,104
1,540
197
2,842
94.2
174
5.8
45
129
0
25
19
124
124
41
33.3
9
91
49.7
3.0
FY22E
3,105
3.0
1,119
1,605
204
2,927
94.3
178
5.7
48
130
0
24
22
128
128
43
33.3
9
95
3.8
3.0
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
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
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
FY14
7
187
194
11
328
13
546
276
0
94
70
448
232
45
23
148
341
299
42
107
546
FY15
7
218
225
13
210
13
462
291
0
158
77
337
174
29
34
99
401
345
56
-64
462
FY16
7
271
278
17
211
31
537
289
0
175
58
342
146
22
42
131
328
302
26
14
537
FY17
13
295
308
20
315
41
683
486
0
168
64
372
212
48
19
94
408
382
26
-35
683
FY18
20
347
366
19
370
55
810
631
0
99
61
412
225
52
14
121
393
216
178
19
810
FY19
20
368
388
21
429
68
905
674
0
137
68
491
229
69
7
186
464
430
33
27
905
FY20E
20
403
423
56
472
25
975
707
0
162
77
478
213
58
21
186
449
414
35
29
975
(INR billion)
FY21E
20
461
480
16
496
25
1,017
721
0
203
77
482
213
53
30
186
467
430
37
16
1,017
FY22E
20
520
540
16
520
25
1,102
733
0
243
77
530
212
46
86
186
481
443
39
48
1,102
14 February 2020
6
 Motilal Oswal Financial Services
BPCL
Financials and Valuations
Ratios
Y/E March (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY14
19.9
33.2
98.8
6.2
36.8
FY15
24.4
39.8
114.6
8.3
40.0
FY16
41.1
51.7
141.3
11.4
32.5
11.7
9.3
3.4
0.5
7.3
2.4
0.0
32.1
17.7
31.4
3.3
3.5
28
4
59
1.0
16.0
0.4
FY17
48.3
59.1
156.7
21.7
52.4
9.9
8.1
3.1
0.5
6.9
4.5
0.0
32.4
16.2
22.5
2.6
2.9
38
9
69
0.9
16.7
0.8
FY18
49.8
64.5
186.2
21.0
49.4
9.6
7.4
2.6
0.4
6.2
4.4
0.0
29.0
13.7
15.2
2.5
2.9
35
8
33
1.0
10.4
0.8
FY19
43.4
60.7
197.1
19.0
51.3
11.1
7.9
2.4
0.3
6.0
4.0
0.0
22.6
11.8
11.8
2.9
3.3
28
8
53
1.1
7.0
0.9
FY20E
30.9
52.0
214.8
11.3
42.6
15.5
9.2
2.2
0.3
6.9
2.3
0.0
15.0
8.9
9.0
2.6
2.9
27
7
53
1.1
3.8
0.9
FY21E
46.3
69.2
244.3
14.4
36.4
10.4
6.9
2.0
0.3
5.4
3.0
0.0
20.2
10.6
12.1
2.6
3.0
26
6
52
1.0
5.2
0.8
FY22E
48.1
72.5
274.6
15.2
37.0
10.0
6.6
1.7
0.3
5.3
3.2
0.0
18.5
10.0
12.4
2.5
2.8
25
5
52
1.1
5.4
0.7
1.3
0.0
21.6
11.4
13.8
5.3
4.8
32
6
41
1.3
3.7
1.2
1.7
0.1
22.9
12.9
17.8
4.5
5.2
26
4
52
0.8
6.3
0.4
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
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
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOSL Estimates
FY14
62
26
-21
14
81
-5
76
-74
2
5
-69
0
-1
-14
2
-13
-5
28
23
FY15
77
30
-26
182
263
-2
262
-110
152
-7
-117
0
-118
-19
4
-133
11
23
34
FY16
118
21
-40
-71
27
21
48
-36
12
19
-17
0
1
-26
2
-24
8
34
42
FY17
128
21
-42
27
133
19
153
-212
-59
-5
-217
0
104
-50
-12
42
-23
42
19
FY18
129
29
-44
-60
54
28
82
-104
-22
2
-102
0
55
-48
8
15
-5
19
14
FY19
120
34
-44
-15
96
22
118
-115
3
-7
-122
0
59
-44
-18
-3
-7
14
7
FY20E
85
41
-28
12
110
-38
72
-100
-28
-9
-109
0
43
-26
35
52
15
7
21
(INR billion)
FY21E
124
45
-41
22
150
9
159
-100
59
0
-100
0
24
-33
-40
-49
9
21
30
FY22E
128
48
-43
23
157
9
166
-100
66
0
-100
0
25
-35
0
-10
56
30
86
14 February 2020
7
 Motilal Oswal Financial Services
BPCL
NOTES
14 February 2020
8
 Motilal Oswal Financial Services
BPCL
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 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
14 February 2020
9
 Motilal Oswal Financial Services
BPCL
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.
14 February 2020
10