India Strategy – Eyeing markets
through key charts
Gautam Duggad
+91 22 6129 1522
Gautam.Duggad@motilaloswal.com
1
1
March 2020
 Motilal Oswal Financial Services
India Strategy – Eyeing markets through key charts
v
Indian equity markets have corrected significantly over the last one month (Nifty down ~26% from its 52-week high
of 12,362 to the lows of 16th Mar’20) in tandem with global equity markets due to headwinds from the Covid-19
outbreak across multiple countries.
v
However, we note that such significant corrections have opened up equally significant investment opportunities in
the past
v
In this report, we look at several important investment parameters across cycles in the last two decades (Market
movements, Absolute market-cap behavior, Past corrections, Polarization, Multiple Valuation metrics) and highlight
our preferred investment bets in different buckets.
v
While our bottom-up earnings forecast and compilation will be released in Apr’20 with 4QFY20 Strategy Preview, we
are assuming a 10% cut in Nifty earnings estimates for FY21 for valuation analysis in this report. This is to factor in
both global and local headwinds and disruptions owing to the outbreak of Covid-19.
v
Global Cyclicals will see significant earnings downgrade given the sharp fall in commodity prices and expected
moderation in global economic growth. Domestic economy facing sectors will also see downward revision in the
earnings forecast due to restricted movements to prevent the outbreak of coronavirus.
2
March 2020
 Motilal Oswal Financial Services
Market cap-to-GDP ratio corrects sharply, at its lowest since FY10
v
Market cap-to-GDP ratio has fallen swiftly from 79% as on FY19 to 58% (FY20E GDP) – much below long-term average of 75% and
closer to levels last seen during FY09.
v
The ratio has been quite stable over FY15-19 in the 70-80% band.
v
The lowest we saw in the last two decades is 42% in FY04. However, the number of listed and traded companies then were much
lower than today. The ratio hit a peak of 149% in Dec’07 during the 2003-08 bull run.
Market cap- to GDP ratio (%)
No. of traded
companies was
just 2,640 in
2004 v/s 3,861
in Mar’20
82
GFC: Peak of 149% in Dec’07
103
95
83
88
Average of 75% for the period
81
71
64
52
42
55
66
79
69
83
79
Lowest
since
the GFC
58
3
March 2020
 Motilal Oswal Financial Services
Nifty: Returns in different phases in the two decades
v
The last two decades saw several phases and cycles in the Nifty where valuations have mean reverted even as earnings drove
long-term markets returns.
v
Post the recent fall, the Nifty returns CAGR since Mar’13 stands at 7%, almost mirroring the earnings CAGR.
Nifty vs. Nifty P/E over the past two decades
Nifty
Nifty CAGR: -3%
12,000
21.0
9,000
Average: 15.7x
15.1
15.0
Nifty CAGR: 37%
23.7
Nifty P/E (x)
Nifty CAGR: 4%
Nifty CAGR: 7%
25.0
20.0
6,000
3,000
10.0
0
5.0
4
March 2020
 Motilal Oswal Financial Services
Nifty and Nifty-Midcap absolute M-cap: Last six years’ progression reflects weak earnings cycle
v
Nifty-50 market cap has corrected 23% from Dec’19 levels and has now slipped below the Dec’17 mark. The muted 4% CAGR
since Dec’14 is symptomatic of the tepid corporate earnings cycle.
v
Nifty Midcap-100 market cap is down 41% from peak and 23% below Dec’14 levels.
Nifty 50 M-cap (INR t) – Below Dec’17 levels but still up ~24% v/s Dec’14
Nifty-50 (INR t)
Nifty’s m-cap almost halved during
GFC and then recouped in a year
55.5
13.7
20.3
28.8
14.7
27.6
38.4
31.3
38.7
42.7
54.5
57.1
23% correction
from peak
76.0
78.9
90.0
68.7
Nifty Midcap 10 M-Cap (INR t) - At five-year low; down 41% from peak
Nifty Midcap-100 (INR t)
41% correction
from peak – M-cap now well below Dec’14 levels
21.9
16.7
9.0
11.0
17.0
16.7
15.9
16.1
12.9
2.8
3.6
6.5
2.8
6.7
8.2
6.9
5
March 2020
 Motilal Oswal Financial Services
Polarization: Sharp Divide - Nifty-35 at 6,749 levels, 45% U-PF v/s Nifty-15 since Dec’17!
v
Market polarization has continued with Nifty top 15 gaining 10% and the other 35 Nifty constituents (Nifty-35) down 36% since
Dec’17. YTD, Nifty top 15 are down 24%, while the other 35 stocks have declined by 27%.
v
The divide is starker in mid-caps. Since Dec’17, Nifty Midcap-100 has corrected 35%, with the top 15 stocks delivering 29% gains
but the remaining 85 stocks declining by 40%. YTD, the top 15 stocks are down 8%, while the other 85 stocks are down by 26%.
Nifty-50
Top-15 Stock (Re-based)
Next-35 Stock (Re-based)
Top 15 stocks delivered return of 10%
16,500
Gap between Top-15 and Next-35 is widening
14,000
11,500
9,000
10,531
6,500
11,625
Index declined by 13%
Index of Next 35 stocks declined 36%
9,197
6,749
37,000
32,000
27,000
22,000
17,000
12,000
Nifty Midcap-100
Top-15 Stock (Re-based)
Next-85 Stock (Re-based)
Within Nifty – Midcap 100, the difference is even higher
Top 15 stocks delivered return of 29%
27,311
21,134
Index declined -35% since Dec’17
Next 85 stocks declined 40%
13,695
12,598
6
March 2020
 Motilal Oswal Financial Services
Buying into the mayhem made sense in the past
v
If history is to go by, markets usually rebound the most in 3-6 months post sharp corrections. Except one instance during the Tech
meltdown of 2000, markets have delivered positive returns in the subsequent 12-month period.
v
On an average, it takes about 156 days between peak to trough - the lowest has been 35 days in 2006 and the highest 410 days in
Nov’10-Dec’11.
Performance (%)
Date (MM-YY)
Jun 96 -Dec 96
Aug97-Jan 98
Apr98-Nov 98
Feb 00-May 2000
Feb 01-Sep 01
Jan04-May 04
May06-June 06
Jan 08-Oct 08
Nov 10-Dec 11
May- Aug 2013
Mar 15 to Feb 16
Aug 18 to Oct 18
Jan 20 to Mar 20
Peak
13-06-1996
05-08-1997
02-04-1998
11-02-2000
15-02-2001
14-01-2004
10-05-2006
08-01-2008
05-11-2010
17-05-2013
03-03-2015
28-08-2018
14-01-2020
Trough
04-12-1996
29-01-1998
28-11-1998
23-05-2000
21-09-2001
17-05-2004
14-06-2006
27-10-2008
20-12-2011
28-08-2013
25-02-2016
26-10-2018
16-03-2020
Peak to Trough
-33%
-26%
-30%
-30%
-40%
-30%
-30%
-60%
-28%
-15%
-23%
-15%
-26%
+1M
18%
13%
9%
22%
14%
8%
19%
9%
10%
10%
11%
5%
?
+3M
42%
22%
16%
12%
24%
15%
29%
6%
16%
15%
14%
8%
?
+6M
35%
-3%
35%
1%
35%
35%
46%
38%
13%
17%
24%
17%
?
+12M
28%
3%
73%
-4%
14%
43%
58%
92%
30%
51%
28%
15%
?
7
March 2020
 Motilal Oswal Financial Services
Big FII outflow in short period often accompanies market correction
v
Sharp bout of FII outflow has often acted as a catalyst for significant market correction in a short period of time in the past.
v
In the current episode, FIIs have offloaded USD6.2b in less than a month with underlying market correction of 20%+.
FII Outflows (USD b)
-1.8
Nifty Performance (%) (rhs)
-2.2
-9%
-6%
-5%
-6.2
-6.7
-6%
-14%
-13%
-3.7
-4.1
-4.6
-18%
-22%
-7.8
-12.5
-55%
* From 24 Feb 20 to 16 Mar 2020
8
March 2020
 Motilal Oswal Financial Services
Peak to peak performance across cycles: each cycle brings leadership change in sectors
Cyclicals dominated returns between 2006-08…
Performance (May 06 - Jan 08)
163%
143%
133% 130%
124%
BFSI and Defensives outperformed over 2008-15… Consumption and BFSI drove returns over 2015-20...
Performance(Jan 08- Mar 15)
265% 253%
181%
155% 149%
Performance(Mar 15-Jan 20)
144%
68%
67%
43%
37%
49%
47%
35%
….while Defensives lagged
Performance (May 06 - Jan 08)
38%
..while Global Cyclicals, Telecom and Utilities
lagged
Performance(Jan 08- Mar 15)
....whereas Healthcare, PSUs, & Infrastructure u/p
Performance(Mar 15 - Jan 20)
-6%
5%
-3%
8%
8%
-52%
-50%
-49%
-46%
-17%
-87%
-16%
-14%
-14%
9
March 2020
 Motilal Oswal Financial Services
Nifty: More than 2/5th of Nifty constituents are >40% down from two-year highs
v
More than two fifths of the Nifty constituents are >40% down from their respective two-year highs, while 12% of
companies are about <20% down from two-year highs.
v
Companies closest to their two-year highs: APNT (12%), Nestle (15%), HUL (16%), Dr. Reddy (16%) and Bharti (18%).
Count of Nifty companies away from their respective two-year highs (%)
13
9
8
7
6
7
10-20%
20-30%
30-40%
40-50%
50-60%
<60%
10
March 2020
 Motilal Oswal Financial Services
No. of companies above USD1b market-cap shrunk by 1/4th
v
The recent fall in markets has shrunken the number of companies with market cap above USD1b by 1/4
th
. The number stands at
253, not too far away from the number in 2007. The currency depreciation over the years also played a role.
v
Number of companies with m-cap above USD25b has also not changed materially over the years.
Number of companies above USD1b
Number of billion dollar companies peaked in 2007
>1 USDb
240
180
94
129
102
212
150
214
164
224
228
After hitting a peak of 329 in CY17, number of billion-
dollar companies has come down sharply
329
282
187
276
253
CY05
CY06
CY07
CY08
CY09
CY10
CY11
CY12
CY13
CY14
CY15
CY16
CY17
CY18
CY19
Mar-20
Number of companies above USD25 b
No. of companies above USD25b market-cap also peaked in 2017 at 16, same as 2007
16
14
10
6
4
2
CY05
CY06
CY07
CY08
CY09
CY10
CY11
CY12
CY13
CY14
CY15
CY16
CY17
CY18
CY19
Mar-20
6
7
7
>25 USDb
12
11
10
16
13
15
13
11
March 2020
 Motilal Oswal Financial Services
Nifty-50 Composition: Telecom big gainer; Auto, Metals big loser
v
Auto weight is at its lowest in a decade at 5.3%. Metals weight in Nifty has halved since Dec’17 to less than 2% now, while O&G
has lost 160bp since Dec’19. BFSI (Public, Private and NBFCs) dominates Nifty with 41.4% weightage.
since Dec’12 despite severe U/PF by ITC in last six years. Tech has gained ~100bp since Dec’19.
Weight in Nifty-50 (%)
v
Telecom has emerged as the biggest gainer and doubled its weight to 3% since the bottom in Dec’18. Consumer weight is highest
Sector
Automobiles
Banks - Private
Banks - Public
NBFC
Capital Goods
Cement
Consumer
Healthcare
Metals
Oil & Gas
Telecom
Technology
Utilities
Miscellaneous
Nifty-50
Dec-04
6.7
4.7
5.8
2.1
4.0
2.8
7.8
6.3
8.2
27.1
6.3
14.5
1.9
2.0
100
Dec-06
6.4
5.7
4.4
2.1
8.6
3.3
6.2
3.9
5.0
21.1
12.0
19.4
1.1
0.9
100
Dec-08
2.5
5.0
5.4
2.3
7.7
1.7
6.5
2.6
4.8
24.5
11.6
9.0
13.3
3.3
100
Dec-10
7.5
14.5
4.9
6.6
8.7
1.9
6.8
3.7
8.4
14.7
2.9
14.3
4.5
0.6
100
Dec-12
8.8
16.9
4.7
7.9
5.9
4.2
12.3
5.0
3.8
12.3
2.0
11.4
4.5
0.5
100
Dec-14
9.3
19.9
4.8
7.1
5.2
2.8
10.5
6.1
3.1
9.3
1.7
15.7
3.6
1.0
100
Dec-16
11.8
21.5
3.1
6.6
4.0
3.0
10.1
6.3
1.5
9.4
2.3
14.4
4.4
1.6
100
Dec-18
7.3
24.9
2.6
10.5
4.1
1.7
10.0
2.4
3.2
12.5
1.5
13.5
3.1
2.8
100
Mar-20
5.3
27.4
2.1
11.7
3.2
1.6
11.5
2.3
1.9
10.8
3.1
13.6
2.8
2.7
100
Auto weight at its
lowest in a decade at
5.3%.
Oil & Gas captures
the value attributable
to Jio in RIL
Consumer weight in
Nifty is stable
despite severe U/PF
by ITC in last six
years due to
inclusion of more
Consumer
companies in Nifty
12
March 2020
 Motilal Oswal Financial Services
Valuations: Key Observations
13
March 2020
 Motilal Oswal Financial Services
Earnings yield converges with Bond yields; EY/BY highest in a decade!
v
Relative attractiveness of equities v/s bonds is increasing. EY/BY ratio is comfortably above its10-year average. We have assumed a
cut of 10% on our FY21 earnings estimates given the global and local headwinds from Covid-19 disruptions.
Earnings Yield (12 month forward)/G-Sec Yield
EY/BY spiked sharply
during GFC
1.7
1.5
1.3
1.1
0.9
0.7
0.5
Highest since
GFC
It remained below 1x for last six
years, except for a brief period
during demonetisation
1.06
LT Avg: 0.80%
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
Earnings Yield (12 month trailing)/G-Sec Yield
Highest since GFC
10 Year Avg: 0.74%
0.88
14
March 2020
 Motilal Oswal Financial Services
Bonds: Spread v/s US 10Y expands ~90bp in a year; Currency stable, FX reserves at all-time high
v
US 10-year yields have collapsed to all-time low sub-1% and Indian 10-year yields are just a shade above 6%. Central banks across
the globe (US, UK, Australia) have cut rates & pumped in more liquidity to provide stimulus amidst the global pandemic – Covid-19.
v
On the currency front, INR displayed remarkable stability given the underlying all-time high FX reserves.
India 10 Year yield
6.8
16
12
8
4
0
US 10 year yield
GFC
Fed cuts rates to zero post GFC
Fed increasing rates
India fiscal tightening,
Strong eco growth led by global
book., Fed raising rates
Fed easing, US-
Sino trade war,
Covid-19
6.9
6.0
0.6
3.1
3.9
4.4
5.3
80
70
60
50
40
30
USDINR
Pre GFC peak
INR had its best time during the 2003-07 in FX reserves
global bull run when GDP and Corporate
earnings growth was high and twin
deficits– CAD, FD – were amongst the
lowest in two decades.
Forex Reserves (USD b) (rhs)
Eurozone crisis, Taper tantrum, Yuan
devaluation. Taper tantrum episode in
2013 drove INR down sharply from 55 to 68
in just four months. This was a period of
high inflation and INR depreciation.
Low inflation characterized this
period post 2015. Rupee has been
relatively less volatile despite
several global headwinds. FX
reverses surging.
600
450
300
150
0
15
March 2020
 Motilal Oswal Financial Services
Valuations: Nifty forward P/E and P/B at multi-year lows
v
Nifty 12-month forward P/E of 15.1x is at a 12% discount to LT average of 17.2x (Mar’05) and at levels last seen in Feb’14.
v
At 2.0x, the Nifty 12-month forward P/B is also well below the historical average of 2.6x. We have assumed a 10% cut in our FY21
Nifty earnings estimates to account for the disruption due to the global pandemic.
12-month forward Nifty P/E (x)
25
22
19
16
13
10
Lowest since Apr-14
LT Avg: 17.2x
23.3
15.1
12-month forward Nifty P/B (x)
4.4
3.6
2.8
2.0
1.2
LT Avg: 2.6x
2.9
2.0
16
March 2020
 Motilal Oswal Financial Services
Valuations: Nifty trailing P/E at four-year lows
v
Nifty 12-month trailing P/E of 17.5x at a 5% discount to its LT average of 18.5x since Mar’05 and at levels last seen in Apr’14.
v
At 2.2x, the Nifty 12-month trailing P/B is well below the historical average of 3x.
12-month trailing Nifty P/E (x)
25
22
19
16
13
10
LT Avg: 18.5x
24.5
17.5
12-month trailing Nifty P/B (x)
5.3
4.5
3.8
3.0
2.3
1.5
LT Avg: 3x
3.1
2.2
17
March 2020
 Motilal Oswal Financial Services
Valuations: Nifty forward RoEs bottomed out in Mar’18; Trailing still below historical average
v
Forward RoEs have bottomed out since Mar’18 at 13.3%, although they are lower than LT average of 15.8%.
v
Trailing RoEs appear to be bottoming out – at 12.8%, they are much lower than LT average of 16.4%.
12-month forward Nifty RoE
24.5
22.0
19.5
17.0
14.5
12.0
LT Avg: 15.8%
ROEs bottomed out in March-18.
13.3
12-month trailing Nifty ROE
27.4
24.4
21.4
18.4
15.4
12.4
RoEs have consistently declined over
the last decade due to prolonged weak
corporate earnings cycle
Lt Avg: 16.4%
12.8
18
March 2020
 Motilal Oswal Financial Services
Sectoral valuations: Private Banks and IT valuations near historical averages
Pvt Banks valuations at three-year lows
P/B (x)
3.5
2.8
2.0
1.3
0.5
3.3
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.8
2.3
1.8
2.3
0.9
Technology trading at 10% discount and 1 STD below average
P/E (x)
28.0
22.0
16.0
10.0
4.0
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
25.3
20.3
17.0
13.8
14.2
7.6
19
March 2020
 Motilal Oswal Financial Services
Sectoral Valuations: Metals and O&G valuations at 15-year lows
Metals: Valuations at 15-year lows; well below book value
6.0
4.5
3.0
1.5
0.0
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
4.4
2.2
1.5
0.8
0.6
0.6
Oil & Gas: Valuations at 15-year low; mirroring book value
3.7
2.9
2.1
1.3
0.5
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
3.1
2.0
1.0
1.6
1.3
1.0
20
March 2020
 Motilal Oswal Financial Services
Sectoral Valuations: Consumer off 30% from peak while Autos halved since peak in Aug-18
Autos valuations have halved since the peak in 2018
P/E (x)
36.0
28.0
20.0
12.0
4.0
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
34.1
23.9
16.9
9.8
6.6
Down 56% since
peak in Aug-18
14.9
Consumer valuations while expensive have corrected 30% from the peak, largely owing to ITC’s sharp fall
P/E (x)
52.0
42.0
32.0
22.0
12.0
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
45.8
37.7
30.3
22.9
16.2
Down 30% since peak
in Aug-18
32.2
21
March 2020
 Motilal Oswal Financial Services
Top Ideas
Company
Mkt Cap
(US$ B)
EPS (INR)
FY20E
FY21E
FY22E
EPS CAGR
FY20-22, %
PE (x)
FY20E
FY21E
PB (x)
FY20E
FY21E
ROE (%)
FY20E
FY21E
Stocks away from (%)
52 Week high 2 Year high
Preferred large cap stocks which we continue to like
Hind. Unilever
HDFC
Infosys
ICICI Bank
Bharti Airtel
59
48
40
39
36
33
51
39
17
1
39
57
43
29
4
45
63
48
36
5
17.4
11.6
11.2
45.6
172.9
59.0
36.1
15.1
24.0
694.4
50.1
32.3
13.6
13.7
119.8
53.2
3.6
4.3
2.3
2.9
52.7
3.4
4.1
2.0
2.8
92
14
27
10
0
106
14
31
16
2
-16
-26
-31
-27
-18
-15
-26
-31
-27
-18
Preferred large cap stocks which have undergone sharp price correction
Reliance Inds.
Axis Bank
NTPC
Eicher Motors
Marico
94
22
13
6
5
78
18
13
745
8
105
43
15
880
8
124
62
17
1125
9
25.9
85.0
14.7
22.9
5.0
13.0
28.1
7.0
22.1
30.9
9.6
11.8
6.1
18.7
32.1
1.4
1.7
0.8
4.3
8.7
1.2
1.5
0.7
3.6
7.7
11
6
11
21
31
14
13
12
21
25
-37
-39
-38
-30
-38
-37
-38
-39
-48
-36
Top midcap stocks which have undergone sharp price correction
ACC
Aditya Birla Fashion
Crompton Gr. Con
LIC Housing Fin.
Indian Hotels
3.0
2.4
2.1
1.9
1.8
72
3
8
52
3
76
4
10
59
4
83
6
12
67
6
7
43
24
13
30
15.7
71.4
29.5
4.9
32.2
15.0
46.5
23.4
4.3
24.7
1.8
10.3
10.0
0.7
2.8
1.7
8.5
8.0
0.6
2.5
12
15
34
15
9
12
20
34
15
11
-36
-29
-24
-56
-34
-36
-27
-21
-56
-32
22
March 2020
 Motilal Oswal Financial Services
NOTES
23
March 2020
 Motilal Oswal Financial Services
Motilal Oswal Securities Limited
MEMBER OF BSE AND NSE
Motilal Oswal Tower, Sayani Road, Prabhadevi, Mumbai 400 025, INDIA
BOARD: +91 22 3982 5500 | WEBSITE:
www.motilaloswal.com
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
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 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 BSE Limited (BSE), Multi Commodity Exchange of India (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) 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
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 actual/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:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
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.
March 2020
 Motilal Oswal Financial Services
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
Companies where there is interest
§
Analyst ownership of the stock
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research.
Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with
regards to subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation
or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission
(SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an
agreement with 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.
March 2020
 Motilal Oswal Financial Services
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.
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: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); 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 Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
*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. The
existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
March 2020