Sector Update | 4 June
Metals
2019
Metals
Motilal Oswal values your support in
the Asiamoney Brokers Poll 2019 for
India Research, Sales and Trading
team. We
request your ballot.
Metal Trends: Higher RM impacting spreads of steel companies
Indian steel mills are however better placed
Higher iron ore prices impacting steel spreads
Iron ore (China CFR, 62% Fe) prices have shot up in the last few months to
~USD100/t (up ~40% since the beginning of the year, Exhibit 1), which has started
impacting product spreads of steel companies (Exhibit 7). Vale’s tailing dam breach
incident has impacted ~50-60mtpa of sea-borne iron ore supply (Exhibit 2). Chinese
crude production growth, at the same time, continues at a healthy pace of ~10%
(Exhibit 3). While, Chinese local iron ore output has not been able to catch up with
the disruption in the sea-borne market; output grew by just ~1% in Apr’19 (Exhibit
4). As a result, Chinese iron ore stock at ports declined ~16% from its recent peak
and is currently ~15% lower than same time last year (Exhibit 5).
While the outlook for Chinese steel demand growth remains tepid (WSA forecast is
~1% growth in 2019), the readings for the first four months of the year from China is
showing healthy demand growth of ~10% (Exhibit 6). Escalation of the US-China
trade dispute is a worrying trend, but reports suggest that the Chinese government
will support the economy by increasing infrastructure spending and other policy
initiatives. Higher iron ore prices should provide a floor to steel prices, while steady
demand growth and improving visibility can drive product spreads higher.
Ultimately it is the
marginal cost of
production and pull
between demand-supply
that influences
commodities. In shaping
these factors there is often
an interesting inter-play
between the various
variables in the value-
chain. At times, however,
some of the trends are not
conclusive enough to
justify a change in
fundamental view on a
stock. Nevertheless, they
do influence a stock’s near-
to-medium term outlook
and performance. Our
‘Metals Trend’ notes will
highlight on such trend
that are influencing the
sector.
US cutting tariff on Turkish steel could support scrap prices
As global iron ore prices have increased, the spread between steel scrap and iron
ore has narrowed (Exhibit 11). This is favorable for demand of scrap-based steel
making. Also, the recent cut in tariff (from 50% to 25%) on Turkish steel products by
the US, we believe, is positive for prices of steel scrap. Turkey is the largest importer
of steel scrap globally. Scrap (and sponge iron, a substitute for scrap) represents
~30% of India’s crude steel production. Higher scrap (and thus sponge iron) prices
would increase cost of production for such local mills. Majority of the scrap and
sponge iron based steel producers in India produce long steel products.
Domestic iron ore prices immune to global price moves
India local iron ore prices, on the other hand, have increased only marginally since
the beginning of the year (factoring the ~INR400-600/t increase a week ago). Iron
ore export (for >58% Fe) attracts an export duty of 30% in India, thereby limiting
demand. The alternative is to process iron ore into pellet where the duty is ~5%. But
as Chinese steel spreads have corrected over the past few months (Exhibit 7),
preference of Chinese mills for higher-grade ore (and pellet) is waning. Instead of
productivity and efficiency, the focus of Chinese mills has shifted to maintaining
margins. This is visible in the narrowing discount for lower-grade iron ore (Exhibit 8)
and the pellet spread over iron ore prices (Exhibit 9), both at multi-year lows. The
opportunity to export iron ore from India is limited; and with the likelihood of
increasing supply ahead of lease expiry in Mar’20, we believe, local iron ore prices
could remain range-bound (Exhibit 10).
Dhruv Muchhal – Research Analyst
(Dhruv.Muchhal@MotilalOswal.com); +91 22 6129 1549
Aniket Mittal
– Research Analyst
(Aniket.Mittal@MotilalOswal.com); +91 22 6129 1572
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors
4 June 2019
are
advised to refer through important disclosures made at the last page of the Research Report.
1

Metals
Captive steel producers best placed; convertors also comfortable
With elections in India now behind, domestic activity is expected to pick up.
Billet/sponge iron prices have already seen initial signs of an increase in expectation
of improving trade. Higher cost of production for scrap/sponge iron based steel
producers is positive for integrated steel producers, particularly when India is
heading into a seasonally weak monsoon period. We believe Indian steel mills are
better placed versus global peers amid expectations of demand recovery and stable
local iron ore prices.
SAIL
is in good space as it has full integration in iron ore. It also has a relatively
higher mix of long steel products.
Tata Steel’s
India operations are well positioned
(though recent addition Bhushan and Usha Martin are only partially integrated with
captive iron ore). However, its European operations are expected to suffer from
lowering spreads as iron ore prices increase. The convertors
JSW Steel (Buy)
and
JSP
(Buy)
are at some dis-advantage, but that too should not be significant as we expect
domestic iron ore prices to be range-bound.
While the near-term outlook is relatively favorable for SAIL and Tata Steel, we
believe the valuations are already building this in. At CMP, the implied EBITDA per
ton for SAIL is ~20-30% higher than its 4Q run-rate. While for Tata Steel, the implied
EBITDA per ton for India is just ~2-10% discount to the 4Q run-rate. For JSW Steel,
the implied EBITDA per ton is ~20-30% discount to the 4Q run-rate. We have a Buy
rating on JSW Steel and Jindal Steel and Power. We have a Neutral rating on SAIL
and Tata Steel.
Prices have increased by
~40% since the beginning of
the year.
Exhibit 1: Iron ore (China CFR, 62% Fe) – USD/t
105
85
65
45
25
CIF
FOB
Source: Bloomberg
Vale’s is expecting lower
output in 2019, while other
major producers do not
expect any increase.
Exhibit 2: Iron ore sea-borne trade
Vale
Rio Tinto
BHP-Billiton
FMG
India
South Africa
Others
Seaborne trade
2014
332
295
255
153
7
65
331
1,438
2015
335
318
276
167
5
64
279
1,444
2016
342
328
265
171
22
67
350
1,545
2017
360
330
268
170
29
65
332
1,554
2018
360
338
274
170
18
65
322
1,547
2019
300
338
268
170
14
65
376
1,530
Source: Company Data
4 June 2019
2

Metals
Chinese crude steel
production growth remains
healthy at ~10%.
Exhibit 3: China crude steel production and growth YoY
production - mt
growth yoy - %
Source: NBS, Bloomberg
Chinese iron ore production
growth remains tepid at
~1% in Apr’19.
Exhibit 4: China iron ore production YoY - %
China iron ore production growth yoy - %
Source: NBS, Bloomberg
China iron ore port
inventory is down ~16%
from recent peaks and
lower by ~15% over the
same period last year.
Exhibit 5: China iron ore port inventory - mt
150
140
130
120
110
100
Source: NBS, Bloomberg
Chinese steel demand
growth remains strong at
~10%.
Exhibit 6: China implied steel consumption (mt) and growth
Real Cons.
14
12
10
5
5
12
YoY (%)
15
9
1
7
10
13
9
12
16
18
14 14
2
12 11
Source: NBS, Bloomberg
4 June 2019
3

Metals
Chinese steel product
spreads have declined.
Exhibit 7: Chinese steel product spreads (price – 1.6*iron ore – 0.55*coke) – USD/t
490
410
330
250
170
90
HRC
Rebar
Source: NBS, Bloomberg
Discounts for low-grade
iron ore have narrowed.
Exhibit 8: Discount for low-grade iron ore - %
Dis. for 58% Fe - % (rhs)
115
95
75
55
35
Iron ore 58% Fe - USD/t
IODEX - USD/t
50
40
30
20
10
0
Source: Bloomberg
Pellet spreads over iron ore
prices have also narrowed.
Exhibit 9: Pellet spreads (prices – iron ore) – USD/t
Premium over IODEX - USD/t
110
90
70
50
30
72.4
38.5
Source: Bloomberg
Iron ore prices in India are
immune to movement in
global iron ore prices.
Exhibit 10: Iron ore prices in India – INR/t
Rungta Fines 63% (Odisha, incl. royalty)
3,800
3,300
2,800
2,300
1,800
1,300
NMDC Fines, ex-royalty
Source: Bloomberg
4 June 2019
4

Metals
As iron ore prices have
increased, economics of
scrap-based steel making
route has improved.
Exhibit 11: Scrap prices - BOF RM basket (iron ore*1.6 + coking coal*0.7)
Scrap prices - BOF RM basket (USD/t)
135
95
55
15
-25
Source: Bloomberg
Exhibit 12: India long steel product prices – INR/t
44,500
41,500
38,500
35,500
32,500
29,500
Spot
Quaterly average
Avg. is down INR1041 QoQ
Source: SteelMint
Exhibit 13: India flat steel product prices – INR/t
Spot
50,500
46,000
41,500
37,000
32,500
Quaterly average
Avg. is up INR5 QoQ
Source: SteelMint
Exhibit 14: Iron ore integration
SAIL
Steel production - mt
Iron ore requirement @1.6x - mt
Captive iron ore - mt
% captive
16.0
25.6
25.6
100.0
TATA
27.0
43.2
20.6
47.8
JSP
6.2
9.9
3.0
30.2
JSTL
16.0
25.6
4.0
15.6
Source: MOFSL, Company
4 June 2019
5

Metals
Exhibit 15: SAIL implied EBITDA per ton at CMP
FY19
a.
b.
c.
d.
di.
dii.
e.
f.
g.
h.
i.
Current market cap.
Net debt
EV
Less: Value of CWIP
Growth CWIP
Discount
EV of operational assets
Target EV/EBITDA
Implied EBITDA
Standalone steel vols.
Implied EBITDA per ton
Last reported EBITDA per ton*
Discount to last rpt. EBITDA
INR m
INR m
INR m
INR m
INR m
%
INR m
x
INR m
INR m
INR
INR
%
448,823
FY20
207,140
446,207
653,346
0
0
0
653,346
6.0
108,891
16.6
6,576
5,236
26
FY21
207,140
413,859
620,999
0
0
0
620,999
6.0
103,500
17.0
6,088
5,236
16
=a + b
=di*(1-dii)
=c-d
=e/f
=h/g
*SAIL’s 4QFY19 numbers are awaited; We are building in INR1,000/t decline QoQ
Source: MOFSL, Company
Exhibit 16: Tata Steel implied EBITDA per ton at CMP
FY19
a.
b.
c.
d.
di.
dii.
e.
Current market cap.
Net debt
EV
Less: Value of CWIP
Growth CWIP
Discount
EV of operational assets
INR m
INR m
INR m
INR m
INR m
%
INR m
971,540
FY20
559,074
999,250
1,558,324
60,000
60,000
0
1,498,324
FY21
559,074
981,799
1,540,873
125,000
125,000
0
1,415,873
=a + b
=di*(1-dii)
=c-d
Europe
f. EBITDA/t
g. USDINR
h. Volumes
i. EBITDA
j. Target EV/EBITDA
k. Implied EV
India (ex-Standalone/Bhushan)
l. EBITDA
m. Target EV/EBITDA
n. Implied EV
India (Standalone and Bhushan)
o. Implied EV
p. Target EV/EBITDA
q. Implied EBITDA
r. Steel volumes
Standalone
Bhushan
s. Implied EBITDA per ton
Last reported EBITDA per ton
Discount to last rpt. EBITDA
USD
mt
INR m
x
INR m
INR m
x
INR m
INR m
x
INR m
mt
mt
mt
INR
INR
%
=f*g*h
=i*j
60
70.0
9.6
40,320
4.0
161,280
18,123
6.0
108,738
1,228,306
6.0
204,718
17.3
13.0
4.3
11,837
12,117
-2
65
70.0
9.6
43,680
4.0
174,720
18,088
6.0
108,528
1,132,625
6.0
188,771
17.6
13.1
4.5
10,711
12,117
-12
=l*m
=e-k-n
=o/p
=q/r
Source: MOSL, Company
4 June 2019
6

Metals
Exhibit 17: JSW Steel implied EBITDA per ton at CMP
FY19
a.
b.
c.
d.
di.
dii.
e.
Current market cap.
Net debt
EV
Less: Value of CWIP
Growth CWIP
Discount
EV of operational assets
INR m
INR m
INR m
INR m
INR m
%
INR m
564,409
FY20
656,753
591,012
1,247,766
238,890
238,890
0
1,008,876
FY21
656,753
667,216
1,323,969
198,890
198,890
0
1,125,079
=a + b
=di*(1-dii)
=c-d
Subsidiaries
f. EBITDA of subs
g. Target EV/EBITDA
h. EV of subs
Standalone
i. Implied EV of standalone
j. Target EV/EBITDA
k. Implied EBITDA
l. Standalone steel vols.
m. Implied EBITDA per ton
Last reported EBITDA per ton
Discount to last rpt. EBITDA
=f*g
=h-e
=i/j
=k/l
INR m
x
INR m
INR m
x
INR m
INR m
INR
INR
%
12,311
7.0
86,174
922,701
7.0
131,814
16.1
8,200
10,119
-19
18,877
7.0
132,139
992,941
7.0
141,849
19.0
7,466
10,119
-26
Source: MOFSL, Company
4 June 2019
7

Metals
NOTES
4 June 2019
8

Metals
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
4 June 2019
9

Metals
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
********************************************************************************************************************************
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.
4 June 2019
10