Motilal Oswal Financial Services

Sector Update | 2 July 2020

Technology

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Resilience and adaptability – the key themes!

Expect structural increase in technology intensity over long term



TCS Annual Report 19-20



Infosys Annual Report

19-20



Analysis of FY20 Annual/Sustainability Reports of TCS, Infosys and Wipro

reiterates our confidence in their resilience. This is epitomized by their handling

of (1) the logistical nightmare of enabling work from home (WFH) for nearly a

million employees, (2) productivity, (3) governance/security, and (4) client

business continuity.

Our channel checks also corroborate that Indian IT was more resilient compared

to internal IT teams, captives of clients and some global vendors.

The ARs acknowledged dislocation across verticals and slowdown in

discretionary spends in the near term. However, they also hinted at higher

spending on areas like collaboration tools, cyber security, cloud adoption, etc.

In many verticals, digital channels evolved from being secondary, nice-to-have

options to primary channels, and in some instances – the only channels. (a)

Accelerated digital rollouts, and (b) M&A led IT integration spends are

anticipated in the near term.

Further, clients focusing on their own resilience and shift in consumer

preferences should translate into a structural increase in technology intensity

over the long term. Focus should be on initiatives like automation, remote

working and legacy technology optimization.

Infosys’ AR brings out an interesting analogy that enterprises are life-like,

responsive and evolving beings. While the next few months should be difficult,

these companies are confident that the deep relationships with customers,

partners, enviable scale and diversified mix should help them navigate better.

In addition, the steady expansion of the addressable market through the launch

of new services, products and platforms should be of help now.

They also continue to make differentiated investments to strengthen their

offerings in digital, cloud, engineering, cyber security, etc.

TCS, Infosys and Wipro foresee a long lasting impact on their established ways

of work. While Wipro indicated that 100% of the workforce is not expected to

return to office, TCS called out its bold new vision of 25x25, centered on WFH.

TCS has also indicated that there are pockets in which it witnessed improved

velocity, throughput and productivity in WFH. It added further that clients are

discovering that productivity is as good, if not better, in the new way of working.

Immediate emphasis will be on operational cost optimization initiatives.

Companies are looking at levers like automation, pyramid correction, onsite-

offshore mix, sub-contractor and travel costs, deferring wage revisions etc.

Liquidity, cash and WC management are stated to be the other key focus areas.

Talent diversity was one of the key talking points of the ARs/sustainability

reports. Efforts to make the workplace more inclusive for (a) women, and (b)

the LGBTQ community were elaborated upon.

Adapting well to the new normal imposed by COVID-19



Wipro Annual Report

19-20



Sustainable employment practices continued to be a key differentiator



Sudheer Guntupalli – Research analyst

(Sudheer.Guntupalli@MotilalOswal.com); +91 22 5036 2749

Research analyst: Mohit Sharma

(Mohit.Sharma@MotilalOswal.com); +91226129 1531/

Heenal Gada

(Heenal.Gada@MotilalOswal.com); +91225036 2654

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Investors

2 July 2020

are advised to refer through important disclosures made at the last page of the Research Report.

Sector Update | 2 July 2020



Infosys Sustainability

Report



Infosys 20F

During the year, TCS became the first Tata group company to include gender

reassignment surgery under its employee health cover plan and redefined the

word ‘spouse’ to include same sex partners, regardless of marital status.

Women’s participation in the workforce across levels in these companies is

already amongst the highest in the country and is expected to rise further.

Maternity is a key trigger for women dropping out from work. But, it is

impressive that TCS/Infosys managed retention rate of 89-98% (post maternity

leave). TCS foresees women’s participation to rise further with its vision 25x25.

These companies continued to accelerate their localization programs during

FY20, which helped bring down dependence on work visas significantly. E.g.

locals now account for ~69% of Wipro’s US employees (v/s 57% in FY18).

Balance sheets are strong and liquid (Cash – 25-41% of assets/5-30% of m-cap).

Sub-optimal assets like goodwill/intangibles remained low for TCS and Infosys

(2-11% of net-worth) while it was relatively higher for Wipro (23-26%). Given

the COVID-19 situation, impairments cannot be ruled out in Wipro, in our view.

Treasury investments are into low risk instruments and write-offs are unlikely.

Contingent liabilities continued to be low and stable (2-5% of net worth).

RoE of TCS (~38%) and Infosys (~25%) remained among the best across the

industries. While their PAT margins contracted (30-80bp) during FY20, RoE

expansion (150-320bp) was led by healthy capital return.

Working Capital (WC) cycles of these companies were stretched during FY20 (by

4-8 days), impacting pre-tax cash conversion. In the case of Infosys, this was

largely led by consolidation of acquired entities (e.g. HIPUS, Stater).

However, significantly lower cash tax outflows (by ~33-75% YoY) due to

MAT/APA refunds helped cash conversion to an extent.

~100% of the accounts were audited by statutory auditors. In FY20, there were

no material accounting policy changes, barring the Ind-AS adoption and useful

lives of some intangible assets (Infosys and Wipro).

There were no critical opinions, qualified remarks, etc. in the audit reports.

Audit fees are stable and in line with prevailing market remunerations.

Related party transactions entered into by these companies were at an arm’s

length, in the course of normal business and not significant. Most of these

transactions are with controlled subsidiaries, which should not be a concern.

Of the board seats, 56-67% are represented by independent directors (v/s

statutory requirement of 50%). In key committees such as Audit, 83-100% of the

representation is for independent directors (v/s statutory requirement of 67%).

Despite near-term uncertainties due to COVID-19 and the US Presidential

elections, we continue to like Infosys/TCS/HCLT among Tier I.

This is attributable to their robust business models, high return ratios, strong

management teams and reasonable valuations.

These companies have the legacy of overcoming multiple business challenges

and technology change cycles in the past.

Accordingly, we believe they will be able to adapt and overcome any transient

challenges posed by the COVID-19 crisis.

Robust balance sheets; Stretched working capital cycles



Wipro 20F



Continued adherence to high standards of accounting and governance



Valuation and view – Prefer Infosys/TCS/HCLT across Tier I



2 July 2020

Sector Update | 2 July 2020

Expect structural increase in technology intensity over

the long term

Analysis of FY20 Annual/Sustainability Reports of TCS, Infosys and Wipro reiterates

our confidence in their resilience. This is epitomized by their handling of (1) the

logistical nightmare of enabling work from home (WFH) for nearly a million

employees, (2) productivity, (3) governance/security, and (4) client business

continuity. Our channel checks also corroborate that Indian IT was more resilient

compared to internal IT teams, captives of clients and some global vendors.

The Annual Reports (ARs) acknowledged dislocation across verticals and slowdown

in discretionary spends in the near term. However, they also hinted at higher

spending on areas like collaboration tools, cyber security, cloud adoption, etc. In

many verticals, digital channels evolved from being secondary, nice-to-have options

to primary channels, and in some instances – the only channels. (a) Accelerated

digital rollouts, and (b) M&A led IT integration spends are anticipated.

Clients focusing on their own resilience and shift in consumer preferences should

translate into a structural increase in technology intensity over the long term. Focus

will be on initiatives like automation, remote working and legacy optimization.

2 July 2020

Sector Update | 2 July 2020

Adapting well to the ‘New Normal’ imposed by COVID-19

Infosys’ AR brings out an interesting analogy that enterprises are life-like, responsive

and evolving beings. While the next few months are acknowledged to be difficult,

these companies are confident that the deep relationships with customers,

partners, enviable scale and diversified business mix should help them navigate

through the crisis better.

In addition, the steady expansion of the addressable market through the launch of

new services, products and platforms should be of help now. They continue to make

differentiated investments to strengthen their offerings in digital, cloud,

engineering, cyber security, etc.

TCS, Infosys and Wipro foresee a long lasting impact on their established ways of

work. While Wipro has indicated that 100% of its workforce is not expected to

return to office, TCS has called out its bold new vision of 25x25, which is centered on

WFH. TCS also indicated that there are pockets in which the company witnessed

improved velocity, throughput and productivity in WFH. It further added that clients

are discovering that productivity is as good, if not better, in the new way of working.

Immediate emphasis will be on operational cost optimization initiatives. Companies

are looking at levers such as automation, pyramid correction, onsite-offshore mix,

sub-contractor and travel costs, deferring compensation revisions and promotions,

etc. Liquidity, cash and WC management are stated to be other key focus areas.

2 July 2020

Sector Update | 2 July 2020

Talent diversity is a key focus area

Talent diversity remained one of the key talking points of this year’s Annual Reports.

During the year, TCS became the first Tata Group company to include gender re-

assignment surgery under its employee health cover and redefine the word ‘spouse’

to include same sex partners, regardless of marital status. Annual/Sustainability

Reports of Infosys and Wipro also highlighted measures to make the work place

inclusive for members of the LGBTQ community.

Currently, 35-37% employees of these companies are women. Share of women in

the workforce across levels has risen steadily for TCS and Infosys over the last three

years, while it remained stable in Wipro’s case. TCS’ AR elaborated multiple

initiatives for helping women employees realize their potential while striking a good

work-life balance. In addition, it also reiterated the company’s practice of ensuring

compensation equality across genders.

Exhibit 1:

Share of women in workforce across levels has risen steadily over FY15-20

TCS - Women in workforce (%)

Junior

Middle

Senior

38%

21%

12%

43%

24%

12%

FY2015

FY2020

Source: Company, MOFSL

Exhibit 2:

Share of women in workforce has risen steadily over last 3 years

Infosys - Women in workforce

38%

37%

36%

FY2018

FY2019

FY2020

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

Exhibit 3:

Share of women in workforce remained stable over last 3 years

Wipro - Women in workforce

35%

FY2018

FY2019

FY2020

Source: Company, MOFSL

Based on NASSCOM’s research (link), we understand that maternity leave is a stage

when a significant number of women from the IT workforce drop out. Accordingly,

women participation in senior management roles in the industry is significantly

lower than in junior levels. Nevertheless, both TCS and Infosys reported impressive

retention rates post maternity leave (TCS - 98% and Infosys - 89%).

Annual/Sustainability Reports of these companies further detail the measures being

taken to improve women participation and retention across the pyramid. TCS

expects its bold new vision of 25x25 to be a game changer as it allows women to

pursue fulfilling IT careers while simultaneously managing familial responsibilities.

These companies continued to accelerate localization programs during FY20

bringing down the dependence on work visas to a fraction of what it used to be 5

years ago. For instance, locals currently account for ~69% of US workforce for Wipro

v/s (57% a couple of years back).

Exhibit 4:

Localization trend showed a consistent increase across the Top-3 IT companies

Wipro - Localization of employees in US

57%

64%

69%

FY18

FY19

FY20

Source: Company, MOFSL

We believe talent diversity is a critical aspect of the sustainability and success of a

knowledge-based and human-resource intensive business like IT services.

Accordingly, companies adopting such sustainable employment practices should

create better shareholder value over the long term.

2 July 2020

Sector Update | 2 July 2020

Robust balance sheets; Material impairments unlikely

Balance sheets of the Top-3 IT companies remain strong and liquid. Even as these

companies stepped up capital return (dividend + buy back) to shareholders over the

previous 3 years, cash and short-term investments still amount to an impressive 25-

41% of total assets and 5-30% of the market capitalizations.

Accordingly, even as the global economy faces a liquidity risk, we believe IT

companies are very well positioned. Such balance sheet/liquidity strength should

help these companies (a) consolidate the wallet share of weaker players, and (b)

pursue attractive M&A opportunities during the current COVID crisis.

On cash and short-term investments, TCS, Infosys and Wipro generate a healthy and

range-bound return of 6-9%.

Exhibit 5:

Balance sheets of Top-3 IT companies are…

Cash & STI as % of total assets

41%

Exhibit 6:

…robust and liquid

Cash & STI as % of market cap

30%

29%

25%

TCS

Infosys

Wipro

Source: Company, MOFSL

TCS

Infosys

Wipro

Source: Company, MOFSL

Exhibit 7:

Cash yield of TCS and …

TCS - Cash yield

12%

Exhibit 8:

…Infosys remained stable…

Infosys - Cash yield

Exhibit 9:

…while that of Wipro dropped

Wipro - Cash yield

11%

10%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL

Sub-optimal assets (e.g. goodwill and intangibles) remained low as share of net

worth (2-11%) for TCS and Infosys. Over the years, while these metrics remained

stable for TCS (~2%), they have slightly increased for Infosys (5-7% in FY19 to 8-11%

in FY20) due to the acquisitions consolidated over the last two years (e.g. HIPUS,

Stater and Simplus).

2 July 2020

Sector Update | 2 July 2020

Exhibit 10:

Goodwill/intangible assets are relatively low…

TCS - Goodwill (% of Net Worth)

Exhibit 11:

…as the company has not been acquisitive

TCS - Intangible assets (% of Net Worth)

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL

Exhibit 12:

Share of goodwill/intangible assets increased…

Infosys - Goodwill (% of Net Worth)

Exhibit 13:

…over the last couple of years due to acquisitions

Infosys - Intangible assets (% of Net Worth)

11%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL

Relatively, share of goodwill/intangible assets on the balance sheet is higher in

Wipro’s case (23-26% of net worth), which further increased during FY20. This rise

was led by the consolidation of (a) Vara Infotech, (b) Techne Group Inc., and (c)

Rational Interaction. Of the total purchase price of ~INR10.4b for these three

entities, the company apportioned ~93% toward goodwill and intangibles.

The intangibles related to Vara Infotech will be amortized over 6.5-9.5 years, in line

with the duration of the USD300m customer contract with ICICI Bank. Given the

relatively higher share of goodwill/intangibles and the COVID-19 situation,

possibility of impairment in the near term cannot be ruled out, in our view.

Exhibit 14:

Goodwill and intangibles in Wipro amount to…

Wipro - Goodwill (% of Net Worth)

24%

Exhibit 15:

…relatively higher share of the balance sheet

Wipro - Intangible assets (% of Net Worth)

27%

22%

23%

25%

27%

26%

21%

20%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

We note that treasury investments of these companies are largely into low risk

instruments like tax-free bonds (e.g. NHAI, REC, PFC, NTPC etc.), government bonds,

liquid mutual funds, Certificates of Deposit and Commercial Paper (e.g. LIC Housing

Finance, HDFC). We do not see risk of any material impairment in treasury

investments of these companies over the near term.

Contingent liabilities remained stable (4-5% of net worth) for TCS and Infosys while

Wipro showed marginal improvement (from 3% to 2% of net worth).

Exhibit 16:

Contingent liabilities of TCS…

Exhibit 17:

…Infosys remained stable…

TCS - Contingent Liabilities (% of

Net Worth)

10%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Infosys - Contingent Liabilities (%

of Net Worth)

10%

Exhibit 18:

…While it fell for Wipro

Wipro - Contingent Liabilities (% of

Net Worth)

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

Decent expansion in return ratios

The top-3 companies witnessed RoE expansion of 150-320bp during FY20. RoEs of

TCS (~38%) and Infosys (~25%) remain among the best across the industry. Barring

Wipro, PAT margins of the other two companies contracted (30-80bp).

Nevertheless, RoE expansion was largely driven by the reduction in equity base due

to healthy capital return. Pay-outs of all three companies remained high (111-145%

of FCF) and showed an improvement over FY19.

Exhibit 19:

Return ratio expansion in TCS and Infosys…

TCS - ROE

38%

34%

30%

35%

22%

21%

Exhibit 20:

…was largely driven by reduction in equity base

Infosys - ROE

25%

24%

25%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL

Exhibit 21:

RoE of Wipro expanded 200bp to 18%

Wipro - ROE

19%

16%

17%

18%

16%

Exhibit 22:

Capital return of TCS showed an increase in FY20

TCS - Payout as % of FCF

115%

126%

104%

55%

47%

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

Source: Company, MOFSL

Exhibit 23:

Payout of Infosys remained more or less stable

Infosys - Payout as % of FCF

163%

Exhibit 24:

Some of the payout related to FY19 spilled over

Wipro - Payout as % of FCF

186%

145%

108%

72%

111%

55%

47%

61%

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY16

FY19

FY20

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

Stretched WC cycle; Lower cash tax outflow helps

During FY20, pre-tax cash conversion of TCS deteriorated led by stretch in the WC

cycle (53 to 57 days). In turn, WC cycle was impacted both on receivables (81 to 84

days, billed + unbilled) and payables front (28 to 27 days). However, MAT refund led

lower cash tax outflow (-41% YoY) aided in generating better post-tax cash.

Exhibit 25:

Working capital stretch…

TCS - Pre-tax CFO/EBITDA

103%

100%

98%

91%

62%

Exhibit 26:

…Ind-AS impact and lower..

TCS - CFO / EBITDA

78%

77%

72%

77%

Exhibit 27:

…tax are the moving parts

TCS - FCF / PAT

88%

70%

90%

84%

92%

87%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – This ratio

should be read in conjunction with IND-AS

116 adoption which led to a boost to EBITDA

Source: Company, MOFSL. Note – This ratio

should be read in conjunction with IND-AS

116 adoption which led to a boost to EBITDA

Source: Company, MOFSL

Exhibit 28:

Both billed and unbilled receivable days…

TCS - Receivable Days

Exhibit 29:

…reported slight increase during the year

TCS - Unbilled Revenue Days

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – Receivable days in INR terms

Source: Company, MOFSL. Note – Unbilled revenue days in INR

terms

Exhibit 30:

Increase in DSO, decline in…

TCS - DSO

Exhibit 31:

…payable days led to the…

TCS - Creditor Days

Exhibit 32:

…working capital stretch

TCS - Working Capital Days

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – DSO in

INR terms

Source: Company, MOFSL. Note – Creditor

days in INR terms

Source: Company, MOFSL. Note – Working

Capital days in INR terms

2 July 2020

Sector Update | 2 July 2020

During FY20, pre-tax cash conversion of Infosys deteriorated led by a stretch in

the WC cycle (78 to 86 days). This was in turn led by sharp increase in

receivables (65 to 74 days) and unbilled revenue days (24 to 29 days), which was

attributed to (a) Stater/HIPUS, and (b) large deal ramp-ups.

Payables on the balance sheet reported substantial increase (from INR17b in

FY19 to INR29b in FY20, 6 days increase as days of sales), largely led by

consolidation of HIPUS. However, this increase has not translated into better

cash generation at the consolidated level. Trade payables account in the cash

flow statement reported an outflow of ~INR4b (v/s ~INR9b inflow in FY19).

Cash tax outflow reported significant decline (~33% YoY) led by tax refunds

related to Advance Pricing Agreement (APA). Accordingly, while the pre-tax cash

generation was weaker (v/s FY19), post-tax cash generation was healthier.

Exhibit 33:

Stretch in WC cycle, lower...

Infosys - Pre-tax CFO/EBITDA

105%

104%

97%

93%

92%

59%

62%

Exhibit 34:

…cash tax outflow were…

Infosys - CFO / EBITDA

76%

70%

71%

Exhibit 35:

…the moving parts

Infosys - FCF / PAT

92%

87%

79%

71%

78%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – This ratio

should be read in conjunction with IND-

AS116 adoption that led to boost to EBITDA

Source: Company, MOFSL. Note – This ratio

should be read in conjunction with IND-

AS116 adoption that led to boost to EBITDA

Source: Company, MOFSL

Exhibit 36:

Increase in DSO was attributed to acquisitions…

Infosys - Receivable Days

Exhibit 37:

…like Stater/HIPUS and large deal ramp-ups

Infosys - Unbilled Revenue Days

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – Receivable days in INR terms

Source: Company, MOFSL. Note – Unbilled revenue days in INR

terms

2 July 2020

Sector Update | 2 July 2020

Exhibit 38:

Acquisitions like HIPUS &..

Infosys - DSO

103

Exhibit 39:

…Stater led to stretch…

Infosys - Creditor Days

Exhibit 40:

…In the WC cycle

Infosys - Working Capital Days

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – DSO in

INR terms

Source: Company, MOFSL. Note – Creditor

days in INR terms

Source: Company, MOFSL. Note – Working

Capital days in INR terms

During FY20, pre-tax cash generation of Wipro witnessed significant

deterioration due to stretched WC cycle. This was in turn led by sharp reduction

in creditor days (55 to 49 days), contract liabilities and marginal increase in

receivables (billed + unbilled). Like in the case of TCS and Infosys, cash tax

outflow during the year was significantly lower (v/s FY19). This aided in

relatively better post-tax cash conversion, albeit it was weaker than in FY19.

Exhibit 41:

Stretch in WC cycle, lower...

Wipro - Pre-tax CFO/EBITDA

122%

104% 108%

98%

87%

Exhibit 42:

...cash tax outflow were…

Wipro - CFO / EBITDA

100%

73%

82%

81%

82%

Exhibit 43:

…the moving parts

Wipro - FCF / PAT

104%

72%

84%

78%

79%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. This ratio should

be read in conjunction with IND-AS 116

adoption which led to a boost to EBITDA

Source: Company, MOFSL. This ratio should

be read in conjunction with IND-AS116

adoption which led to boost to EBITDA

Source: Company, MOFSL

Exhibit 44:

Receivable days (billed + unbilled) reported…

Wipro - Receivable Days

Exhibit 45:

…a slight increase impacting cash conversion

Wipro - Unbilled Revenue Days

FY16

FY17

FY18

FY19

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – Receivable days in INR terms

Source: Company, MOFSL. Note – Unbilled revenue days in INR terms

2 July 2020

Sector Update | 2 July 2020

Exhibit 46:

Sharp fall in payables…

Wipro - DSO

105

Exhibit 47:

…and contract liabilities…

Wipro - Creditor Days

Exhibit 48:

…led to stretched WC cycle

Wipro - Working Capital Days

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: Company, MOFSL. Note – DSO in INR

terms

Source: Company, MOFSL. Note – Creditor

days in INR terms

Source: Company, MOFSL. Note – Working

Capital days in INR terms

2 July 2020

Sector Update | 2 July 2020

High accounting and governance standards continue

Accounts of these companies are audited by the Big-4 auditors like Deloitte and BSR.

Almost 100% of the business is audited by the statutory auditor in each case. During

FY20, there were no material changes in accounting policies barring Ind-AS 116

adoption and changes in the useful lives of some intangible assets (Infosys and

Wipro). There were no critical opinions, qualified remarks, etc. in the audit reports.

Audit fees are stable and in line with prevailing market remunerations.

Related party transactions entered into by these companies during the year are at

an arm’s length in the course of normal business and not significant. Most of these

transactions are with controlled subsidiaries, which should not be a concern.

Of the board seats of these companies, 56-67% is represented by independent

directors (v/s statutory requirement of 50%). In key committees such as audit

committee, 83-100% of the representation is for independent directors (v/s

statutory requirement of 67%). 50-100% of the representation in NRC is with the

independent directors (v/s statutory requirement of 50%).

Exhibit 49:

% of independent directors on the board > statutory requirement of 50%

% of independent directors on the board

67%

56%

TCS

Infosys

Wipro

Source: Company, MOFSL

Exhibit 50:

% of independent directors on audit committee > statutory requirement of 67%

% of independent directors on the audit committee

100%

83%

TCS

Infosys

Wipro

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

Exhibit 51:

% of independent directors on NRC = > statutory requirement of 50%

% of independent directors on the nominations & remunerations committee

100%

50%

TCS

Infosys

Wipro

Source: Company, MOFSL

Management remuneration (CEO+COO+CFO, as % of PAT) witnessed slight

reduction in case of TCS and Wipro, while it increased for Infosys.

Exhibit 52:

Management remuneration of TCS reported slight reduction

TCS – Mgmt. remuneration (INR m)

CEO

CFO

COO

Total

Mgmt. remuneration as % of PAT

FY16

257

286

0.1%

FY17

342

449

0.2%

FY18

125

252

0.1%

FY19

FY20

160

134

116

101

318

275

0.1%

Source: Company, MOFSL

Exhibit 53:

Management remuneration of Wipro reported slight reduction (as % of PAT)

Wipro – Mgmt. remuneration (INR m)

CEO

CFO

COO

Total

Mgmt. remuneration as % of PAT

FY16

120

186

0.2%

FY17

136

222

0.3%

FY18

182

285

0.4%

FY19

FY20

273

323

403

419

0.5%

0.4%

Source: Company, MOFSL

Exhibit 54:

Management remuneration of Infosys witnessed an increase

Infosys – Mgmt. remuneration (INR m)

CEO

CFO

COO

Total

Mgmt. remuneration as % of PAT

FY16

484

630

0.5%

FY17

451

118

662

0.5%

FY18

FY19

FY20

169

247

343

106

331

411

503

0.2%

0.3%

Source: Company, MOFSL

2 July 2020

Sector Update | 2 July 2020

Prefer Infosys/TCS/HCLT among Tier I

The Annual/Sustainability Reports of TCS/Infosys/Wipro reinforces our belief in the

adaptability and resilience of the IT services business model. This should further

alleviate the concerns of investors around a material displacement to operations,

business continuity and new deal wins due to the COVID-19 crisis.

Despite near-term uncertainties due to COVID-19 and the US Presidential elections,

we continue to like Infosys/TCS/HCLT among Tier I and LTI/Mindtree among Tier II.

This is attributable to their robust business models, high return ratios, strong

management teams and reasonable valuations.

These companies have the legacy of overcoming multiple business challenges and

technology change cycles in the past. Accordingly, we believe they will be able to

adapt and overcome any transient challenges posed by the COVID-19 crisis.

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - TCS

Income statement

Y/E March

Sales

Change (%)

Cost of Services

SG&A Expenses

EBITDA

% of Net Sales

Depreciation

EBIT

% of Net Sales

Other Income

PBT

Tax

Rate (%)

PAT

Extraordinary gains/loss

Adjusted PAT

Minority Interest

Reported PAT

Change (%)

2015

946

15.7

545

174

247

26.1

228

24.1

259

23.5

199

196

2.8

2016

1,086

14.8

609

190

307

28.2

288

26.5

318

23.6

243

242

23.2

2017

1,180

8.6

669

208

323

27.4

303

25.7

345

23.6

264

263

8.6

2018

1,231

4.4

713

213

325

26.4

305

24.8

341

24.1

259

258

-1.8

2019

1,465

852

239

395

375

25.6

417

100

317

22.6

2020

1,569

7.2

923

260

421

26.8

386

24.6

422

23.2

324

323

2.2

2021E

1,562

-0.5

920

259

417

26.7

383

24.5

418

322

320

-1

(INR B)

2022E

1,740

11.4

1,018

282

478

27.5

440

25.3

479

110

369

367

14.8

Balance Sheet

Y/E March

Net Worth

Minority Interest & Others

Loans

Capital Employed

Net Block

Intangibles

Other LT assets

Curr. Assets

Debtors

Cash & Bank Balance

Other Current Assets

Current Liab. & Prov

Net Current Assets

Application of Funds

2015

575

605

116

515

243

250

144

370

605

2016

732

758

118

669

281

367

154

515

758

2017

883

911

117

817

280

509

143

674

911

2018

872

908

116

845

320

499

176

669

908

2019

916

950

117

938

364

495

221

718

950

2020

862

960

199

910

412

350

149

271

640

960

2021E

1,013

1,112

194

1,067

380

539

148

269

798

1,112

(INR B)

2022E

1,192

101

1,293

188

1,284

413

706

165

300

984

1,293

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - TCS

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

Book Value

DPS

Payout %

Valuation (x)

P/E

Cash P/E

EV/EBITDA

EV/Sales

Price/Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

RoIC

Turnover Ratios

Debtors (Days)

Fixed Asset Turnover (x)

2015

51.3

56.2

150

180

42.1

38.4

32.5

8.5

14.4

3.7

34.8

29.4

49.6

8.2

2016

63.2

68.2

191

111

34.1

31.7

25.8

7.3

11.3

2.8

37.1

32.3

9.2

2017

68.7

73.8

231

23.5

31.4

29.2

6.6

9.4

1.1

32.6

27.8

58.4

2018

67.4

72.7

228

43.4

29.7

23.9

6.3

9.5

1.2

29.4

25.5

57.2

10.6

2019

83.1

88.9

242

24.3

19.5

5.3

8.9

1.5

35.4

30.7

12.6

2020

86.2

95.6

230

99.1

25.1

22.6

18.4

4.9

9.4

3.4

36.4

55.7

7.9

2021E

85.3

94.5

270.1

38.5

52.8

25.3

22.9

18.1

4.8

1.8

34.1

28.5

49.9

8.1

2022E

97.9

108.1

317.7

51.4

22.1

15.5

4.3

6.8

33.3

28.2

58.4

9.3

Cash Flow Statement

Y/E March

CF from Operations

Cash for Working Capital

Net Operating CF

Net Purchase of FA

Free Cash Flow

Net Purchase of Invest.

Net Cash from Invest.

Proc. from equity issues

Proceeds from LTB/STB

Others

Dividend Payments

Cash Flow from Fin.

Net Cash Flow

Opening Cash Bal.

Add: Net Cash

Closing Cash Bal.

2015

261

194

-29

164

-17

-2

-171

-173

2016

315

-48

191

-20

171

-32

-52

-1

-95

2017

323

-16

225

-40

185

-36

-105

-68

121

367

121

487

2018

325

-5

238

-18

220

-3

-23

-121

-112

-226

-10

509

-10

499

2019

395

-53

242

-21

221

-14

-2

-90

-141

-232

-3

499

-3

496

2020

421

-67

256

-31

225

-4

-123

-19

-320

-279

-146

495

-146

349

2021E

417

352

-29

323

-29

-169

-134

189

350

189

539

(INR Bn)

2022E

478

-20

348

-32

316

-32

-189

-150

167

539

167

706

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - Infosys

Income Statement

Y/E March

Sales

Change (%)

Software Develop. Exp.

SGA expenses

EBITDA

% of Net Sales

Depreciation

Interest

Other Income

PBT

Tax

Rate (%)

Minority Interest

Adjusted PAT

Extraordinary Items

Reported PAT

Change (%)

2015

533

6.4

329

149

27.9

173

28.6

123

11.2

2016

624

17.1

391

171

27.4

187

135

9.4

2017

685

9.7

433

186

27.2

200

144

6.6

2018

705

451

190

203

20.9

161

11.9

2019

827

17.2

539

209

25.3

218

25.9

161

154

-4.3

2020

908

9.8

607

107

223

24.5

220

24.4

166

2021E

921

1.4

617

108

229

24.9

217

26.5

160

-4.1

(INR b)

2022E

1,030

11.9

687

118

263

25.5

248

26.5

183

14.4

Balance Sheet

Y/E March

Share Capital

Reserves

Net Worth

Capital Employed

Gross Block

Less : Depreciation

Net Block

Investments & Other Assets

Curr. Assets

Debtors

Cash & Bank Balance

Loans & Advances

Other Current Assets

Current Liab. & Prov

Net Current Assets

Application of Funds

2015

542

548

550

164

129

472

126

312

114

358

550

2016

606

618

622

175

153

517

144

328

132

385

622

2017

678

690

693

258

161

135

537

160

326

140

397

693

2018

638

649

658

261

115

146

153

500

174

262

141

359

658

2019

628

650

661

311

135

176

143

529

202

262

186

342

661

2020

637

658

719

414

164

251

131

546

256

233

209

337

719

2021E

698

719

780

469

197

271

131

575

224

293

199

377

780

(INR b)

2022E

781

802

863

550

235

315

131

639

251

324

222

417

863

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - Infosys

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

Book Value

DPS

Payout % (excl.div.tax, inc. buyback)

Valuation (x)

P/E

Cash P/E

EV/EBITDA

EV/Sales

Price/Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

Turnover Ratios

Debtors (Days)

Fixed Asset Turnover (x)

2015

53.9

58.6

239.6

22.3

41.2

12.9

11.6

3.2

2.9

24.1

19.2

4.1

2016

29.5

32.7

135.1

24.3

82.2

25.6

23.1

20.2

5.5

5.6

3.2

23.2

19.2

4.1

2017

31.5

35.2

150.9

25.8

81.9

21.5

18.6

3.4

18.5

4.2

2018

35.7

39.3

142

43.5

122

21.2

19.2

18.2

4.9

5.3

5.8

20.1

4.8

2019

37.1

38.1

142.2

21.5

20.4

19.8

16.5

4.2

5.3

2.8

23.7

21.2

4.7

2020

42.9

144.7

17.5

44.8

19.4

17.6

15.4

3.8

5.2

2.3

25.3

20.4

103

3.6

2021E

37.6

45.6

169.5

53.2

20.1

16.6

3.5

4.5

2.6

22.2

18.4

3.4

2022E

51.9

189.2

46.5

17.6

14.6

12.2

3.1

2.6

22.8

19.2

3.3

Cash Flow Statement

Y/E March

CF from Operations

Cash for Working Capital

Net Operating CF

Net Purchase of FA

Free Cash Flow

Net Purchase of Invest.

Net Cash from Invest.

Proceeds from Equity

Others

Dividend Payments

Cash Flow from Fin.

Net Cash Flow

Opening Cash Bal.

Add: Net Cash

Closing Cash Bal.

2015

7,624

1,680

9,237

9,248

786

797

-13

-50

-63

9,971

290

9,971

312

2016

204

-23

122

-27

-31

-17

-70

-86

312

328

2017

217

-19

141

-21

119

-63

-48

-2

-69

-71

328

326

2018

236

-26

168

-3

164

-21

-227

-202

-55

326

-55

262

2019

230

191

-50

141

-40

-41

-112

-153

-3

262

-3

262

2020

252

-24

174

-104

-92

-69

-89

-158

-76

262

-76

233

2021E

250

213

-55

158

-55

-99

233

293

(INR b)

2022E

276

-10

201

-81

120

-81

-99

293

324

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - Wipro

Income Statement

Y/E March

Profit & Loss

Sales

Change (%)

Operating Costs

SG&A

EBITDA

% of Net Sales

Depreciation & Amort.

EBIT

Margins

Other Income

PBT

Tax

Rate (%)

PAT

Minority Interest

Adjusted PAT

Extraordinary items

Reported PAT

Change (%)

2014

438

-99.9

296

100

20.4

101

22.4

-99.9

2015

473

8.1

322

108

22.9

20.2

112

2016

516

9.1

357

112

21.7

18.8

115

2017

554

7.3

392

115

20.8

16.6

109

23.2

-6.6

2018

546

-1.4

386

105

19.3

15.4

102

21.9

-3.8

2019

589

7.8

413

117

19.8

16.5

117

21.6

-1

15.3

2020

613

4.1

436

126

20.5

105

17.1

123

20.2

5.3

2021E

594

-3.1

428

115

19.4

15.7

110

20.9

-1

-9.6

(INR b)

2022E

633

6.6

452

131

20.6

107

16.9

127

20.9

100

-1

101

14.9

Balance Sheet

Y/E March

Net Worth

Minority Interest & others

Loans

Capital Employed

Net Block

Intangible Assets

Other non current assets

Curr. Assets

Debtors

Inventories

Cash & Bank Balance

Adv., Other Current Assets

Current Liab. & Prov

Net Current Assets

Application of Funds

2014

343

407

357

125

177

262

407

2015

408

502

440

134

217

343

502

2016

466

125

614

118

506

151

232

118

111

395

614

2017

520

142

687

118

539

140

345

107

432

687

2018

483

138

640

118

506

143

294

121

386

640

2019

568

690

118

572

123

379

143

429

690

2020

557

674

118

520

130

334

143

377

674

2021E

612

728

118

557

120

381

122

435

728

(INR b)

2022E

673

788

118

629

126

443

129

499

788

2 July 2020

Sector Update | 2 July 2020

Financials and valuations - Wipro

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS*

Book Value

DPS

Payout %

Valuation (x)

P/E

Cash P/E

EV/EBITDA

EV/Sales

Price/Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

Turnover Ratios

Debtors (Days)

Asset Turnover (x)

Leverage Ratio

Debt/Equity Ratio(x)

2015

13.4

15.4

63.2

105

16.7

14.5

12.1

2.8

3.5

5.4

15.2

103

0.9

0.2

2016

13.8

16.1

72.1

50.9

16.2

13.9

11.9

2.6

3.1

2.7

20.4

12.7

107

0.8

0.3

2017

12.9

16.5

80.5

18.2

17.4

13.6

10.8

2.2

2.8

0.9

16.9

10.5

0.7

0.3

2018

12.6

15.7

74.8

17.7

14.3

12.2

2.4

10.6

0.7

0.3

2019

15.3

17.3

87.9

14.6

12.9

2.5

17.6

11.4

0.7

0.2

2020

16.6

20.7

97.9

13.4

10.8

8.1

1.7

2.3

0.4

17.3

12.8

0.7

0.1

2021E

15.4

19.3

107.5

14.5

11.6

8.4

1.6

2.1

2.2

14.8

10.4

0.7

0.1

2022E

17.7

21.8

118.2

39.6

12.6

10.2

1.4

1.9

2.7

15.5

11.1

0.7

0.1

Cash Flow Statement

Y/E March

CF from Operations

Cash for Wkg. Capital

Net Operating CF

Net Purchase of FA

Net Pur. of Investments

Dividend from Subsidiary

Net Cash from Invest.

Proceeds from LTB/STB

Dividend Payments

Net CF from Finan.

Free Cash Flow

Net Cash Flow

Opening Cash Bal.

Add: Net Cash

Closing Cash Bal.

2015

111

-32

-11

-15

-26

-29

-9

177

221

2016

112

-33

-13

-104

-138

-35

-2

-61

217

-61

156

2017

114

-21

-15

-84

-116

-5

-29

232

-29

203

2018

-4

-16

-3

-9

-127

-51

345

-51

294

2019

134

-26

-6

-36

-42

108

294

379

2020

100

107

-48

-39

-5

-7

-113

-45

379

-45

334

2021E

-12

-18

-1

-33

-31

334

381

(INR b)

2022E

102

-2

100

-19

-40

-39

381

443

2 July 2020

Sector Update | 2 July 2020

NOTES

2 July 2020

Sector Update | 2 July 2020

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 becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the

inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.

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

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

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

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

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

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

For U.S.

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

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

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

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

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

document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only

available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the

U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct

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

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

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

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

appearances and trading securities held by a research analyst account.

For Singapore

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

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

2 July 2020

Sector Update | 2 July 2020

The associates of MOSL 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

MOSL 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 MOSL 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 MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL 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 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.

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.:022-38281085.

Registration details: 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.

2 July 2020