Sector Update | 1 July 2020
Automobiles
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Jun’20 Wholesales: More positives than negatives
Good retails, supply side issues result in extremely low inventory for 2Ws/PVs
Jun’20 wholesales comprised more positives than negatives. While retail demand is recovering
due to preference for personal vehicles over shared mobility, pent up-demand and rural
recovery, OEMs are trying to play catch-up owing to supply-side constraints. Tractors are seeing
growth on strong rural demand while CVs are the hardest hit due to slowing economic
activities. PV volumes declined 48% YoY, 2W (ex-BJAUT) volumes were most resilient with
minimum decline of ~29% YoY and CV volumes (for 1Q) plunged ~89% YoY.
“A major part of the market
demand is emanating from
rural/semi-urban markets,
which has been helped to a
large extent by the various
stimulus packages rolled
out by the government. A
combination of multiple
factors, including the
forecast of normal
monsoons, a bumper Rabi
crop and the upcoming
festive season are expected
to keep the momentum
going over the next few
months.”
Dr. Pawan Munjal,
Chairman and CEO
Hero MotoCorp
2Ws (excl. BJAUT) – Beat with just ~29% YoY decline:
Demand recovery was
largely driven by (a) preference for personal vehicles over public transport, and
(b) high disposable income in rural market due to good harvest. HMCL declined
by ~27%, TVSL declined by 33%, whereas RE declined by 35% YoY. HMCL’s retails
were much higher than wholesales.
PVs decline ~48% YoY:
The segment witnessed recovery on the back of entry-
level vehicles as preference for personal mobility spurred pent-up demand.
However, retails were stronger than wholesales and were impacted by supply
side issues. MSIL’s volumes declined 54% YoY and M&M’s volumes (domestic UV
passenger) dropped ~55% YoY.
CVs decline 89% YoY in 1QFY21:
CVs were the worst hit due to decline in
economic activities and BS4 pre-buying. While M&HCV volumes plummeted 92%
YoY, LCV volumes plunged 87% YoY. AL declined 81% YoY (in Jun’20) and was
below estimates, whereas TTMT’s CV volumes declined (in 1QFY21) 90% YoY and
VECV volumes tanked 70% YoY (above est.).
Positive surprise (Var %)
EIM- RE (+8.7%)
Hero MotoCorp (+12.5%)
M&M (+26.1%)
TVS Motor (+13%)
Escorts (+21%)
EIM-VECV (+19%)
Negative surprise (Var %)
MSIL (-18%)
AL (-20.7%)
Note:
TTMT has stopped
sharing monthly volumes
and now shares only on
quarterly basis. All the
segmental analysis done
here accordingly gets
adjusted with CV level
analysis being only on
quarterly basis.
Valuation and view:
While demand recovery has surprised everyone, sustenance
remains a key monitorable. With multiple moving parts in the form of (a)
normalization of supply side, (b) consumer sentiment, (c) availability of finance, and
(d) impact of BS6 cost inflation, demand normalization is the biggest monitorable.
Valuations are reflecting recovery from 2HFY21, leaving limited margin of safety for
any negative surprises. Hence, we prefer companies with (a) higher visibility in terms
of demand recovery, (b) a strong competitive positioning, (c) margin drivers, and (d)
balance sheet strength. M&M and EIM are our top large-cap picks. Among mid-caps,
we prefer MSS.
Exhibit 1:
Snapshot of volumes for Jun’20 (incl. Exports) *
Company Sales
Jun-20
Jun-19 YoY (%) chg May-20 MoM (%) chg FY21 YTD FY20 YTD (%) chg
FY21E
Gr (%)
2W (ex-BJAUT)
679,885 958,326
-29.1 188,013
261.6
876,123 2,910,179
-69.9 11,952,610 -15.5
Cars
42,835
95,629
-55.2
13,123
304.9
66,888
322,296
-79.2
1,088,455 -13.6
Uvs + MPVs
32,827
63,827
-48.6
14,725
152.0
52,558
225,345
-76.7
676,874 -17.1
Total PVs
75,662 159,456
-52.5
27,848
224.0
119,446
547,641
-78.2
1,765,328 -15.0
3Ws
30,358
71,225
-57.4
17,057
78.0
54,790
217,208
-74.8
745,746 -15.9
M&HCVs
6,563
79,105
-91.7
190,085 -24.5
LCVs
11,179
84,815
-86.8
253,122 -14.5
Total CVs
17,742
163,920
-89.2
443,208 -19.1
Tractors
47,395
42,054
12.7
30,935
53.2
83,807
107,401
-22.0
392,664
1.2
*
2W:
HMCL, TVSL,EIM;
PVs:
MSIL, MM & TTMT;
3Ws:
BJAUT, TVSL & MM;
CVs:
TTMT, AL, MM, EIM;
Tractors:
MM, ESC;
Source: MOSL
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com); +91 22 6129 1524
Vipul Agrawal – Research Analyst
(Vipul.Agrawal@MotilalOswal.com) +91 22 7193 4322
1 July 2020
are advised to refer through important disclosures made
Investors
1
at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Automobiles
MARUTI SUZUKI: Wholesales below est. at 57.4k units (v/s est. ~70.1k units), a decline of ~54% YoY
MSIL’s wholesales plunged ~54% YoY to 57.4k units (v/s est. 70k units).
Domestic volumes plunged ~53.7% YoY to 53.1k units (v/s est. 63.2k units). Domestic retail volumes were
substantially higher than wholesales, with bookings even better than retails.
Export volumes declined 56.4% YoY to 4.3k units.
We are estimating FY21E volumes to decline ~14.8% YoY, implying residual growth of 8.1%. If retail
momentum remains intact, we believe production can play catch-up with demand.
Snapshot of volumes for Jun-20
YoY
Company Sales
Maruti Suzuki
LCVs
Vans
Mini Segment
Compact (incl Dzire
Tour)
Mid Size - CIAZ
UVs
Total Domestic
Export
Jun-20 Jun-19
57,428
1,026
3,803
10,458
27,535
553
9,764
53,139
4,289
124,708
2,017
9,265
18,733
64,727
2,322
17,797
114,861
9,847
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-54.0
-49.1
-59.0
-44.2
-57.5
-76.2
-45.1
-53.7
-56.4
18,539
163
1,617
1,995
6,285
192
3,636
13,888
4,651
209.8
529.4
135.2
424.2
338.1
188.0
168.5
282.6
-7.8
FY21
FY20 YTD (%) chg FY21E
YTD
76,599 402,594 -81.0 1,331,091
1,189
6,568 -81.9 16,116
5,420 32,659 -83.4 98,283
12,453 57,893 -78.5 226,786
33,820 209,674 -83.9 685,326
745
8,703 -91.4 20,206
13,400 58,984 -77.3 200,125
67,027 374,481 -82.1 1,246,841
9,572 28,113 -66.0 84,250
Residual Residual FY21 YTD
Growth Monthly Monthly
Gr. (%)
(%) Run rate Run rate
-14.8
-26.0
-17.0
-8.5
-15.6
-20.0
-14.9
-14.6
-17.5
8.1
-1.9
-36.4
-33.3
-0.1
-48.1
-9.0
5.1
21.3
139,388 25,533
1,659
396
10,318 1,807
23,815 4,151
72,390 11,273
2,162
248
20,747 4,467
131,090 22,342
8,298
3,191
M&M: Wholesales above est. at 55.9k units (v/s est. ~44.3k units), a decline of ~26% YoY
M&M’s tractor volumes grew ~10.4% YoY to ~36.5k units (v/s est. 28.1k units). We have factored in flat tractor
volumes for FY21E, implying ~9.6% residual growth.
UVs (incl. pick-ups) declined ~48% YoY to 19.2k units (v/s est. 14.7k units). Domestic passenger UVs declined ~55%
YoY while the domestic pick-up segment plunged ~30.5% YoY. We estimate UV volumes to decline ~20% in FY21E,
implying ~1.5% residual growth.
3W volumes increased ~99.7% YoY to 13 units.
Mr. Veejay Ram Nakra, Chief of Sales & Marketing, Automotive Division of M&M Ltd. said,
“
The automotive industry has
started to see recovery both in the passenger and small commercial vehicle segments. This has been led primarily
by rising rural demand and movement of essential goods across the country. Our key brands such as Bolero,
Scorpio and Pick-ups, are all seeing good traction. Managing the supply chain will be our key focus area as we
ramp up production to meet this increased demand.”
Hemant Sikka, President – FES Sector, M&M Ltd. said,
“We have sold 35,844 tractors in the domestic market during
Jun’20, a growth of 12% over last year. This is our second highest June sales ever. The timely arrival of the south
west monsoon, combined benefits of a record Rabi crop, government support for Agri initiatives and very good
progress in the sowing of Kharif crop has led to positive sentiment among farmers. These underlying factors along
with better cash flows in rural markets have helped boost tractor demand during June. It is expected that this
demand will continue to remain buoyant in the coming months.”
Snapshot of volumes for Jun-20
YoY
Company Sales
M&M
UV (incl. pick-ups)
LCV & M&HCV
Three-Wheelers
Tractors
Jun-20 Jun-19
55,902 75,641
19,260 36,765
85 1,531
13 4,251
36,544 33,094
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-26.1
-47.6
-94.4
-99.7
10.4
33,901
9,472
49
39
24,341
64.9
103.3
73.5
-66.7
50.1
FY21
FY20 YTD (%) chg FY21E
YTD
95,308 218,039 -56.3
29,465 114,427 -74.2
134
4,126 -96.8
52 13,136 -99.6
65,657 86,350 -24.0
682,669
322,064
7,075
51,615
301,915
Residual Residual FY21 YTD
Growth Monthly Monthly
Gr. (%)
(%) Run rate Run rate
-17.2
-20.0
-37.3
-17.0
0.0
-3.1 65,262
1.5 32,511
-2.9
771
5.1 5,729
9.6 26,251
31,769
9,822
45
17
21,886
1 July 2020
2
 Motilal Oswal Financial Services
Automobiles
ESCORTS: Wholesales above est. to 10.85k units (v/s est. 8.96k units), up 21% YoY
Tractor dispatches grew ~21% YoY to 10.85k units (v/s est. 8.96k units) in Jun’20.
Domestic sales grew ~23% YoY while exports declined ~27% YoY.
We are estimating ~5.5% growth in volumes for FY21E, implying 11.7% residual growth or monthly run-rate of
~8.1k units.
Management commentary: “We have seen unprecedented demand in this month. The industry is expected to
grow significantly backed by (a) pent-up demand of the lockdown period, (b) better farmer sentiment due to good
monsoon prediction reflected in the better-than-normal Kharif sowing, (c) better rural cash flows owing to record
crop output and crop prices, and (d) reasonably good availability of retail finance. Inventory levels, both with the
company and channel have been the lowest ever. After necessary permissions, we were able to run our factories
in multiple shifts to achieve production at about 90% of the capacity. Supply chain situation, though better than
before, continues to remain volatile.”
Snapshot of volumes for Jun-20
YOY
Jun-20
Escorts
Domestic
Exports
10,851
10,623
228
Jun-19
8,960
8,648
312
MoM
YoY (%)
MoM (%)
May-20
chg
chg
21.1
22.8
-26.9
6,594
6,454
140
64.6
64.6
62.9
Residual Residual FY21 YTD
Growth Monthly Monthly
FY21
FY21 YoY (%)
(%) Run rate Run rate
FY20 YTD (%) chg
YTD
estimate chg
18,150
17,690
460
21,051 -13.8
20,122 -12.1
929 -50
90,749
86,102
3,297
5.5
4.7
-12
11.7
10.1
0.0
8,067
7,601
315
6,050
5,897
153
HERO MOTOCORP: Above est. at 450k units (v/s est. ~401k units), a decline of ~27% YoY
HMCL’s volumes declined ~27% YoY to 450.7k units (v/s est. 400.7k units).
Retail sales have been well ahead of wholesales resulting in inventory of < 3 weeks with the dealers.
We estimate volumes to decline ~16.4% in FY21E, implying residual growth of 5%.
Dr. Pawan Munjal, Chairman and CEO of Hero MotoCorp said, “A major part of the market demand is emanating
from the rural and semi-urban markets, which have been helped to a large extent by the various stimulus
packages rolled out by the government. A combination of multiple factors, including the forecast of a normal
monsoon, a bumper Rabi crop and the upcoming festive season are expected to keep the momentum going over
the next few months.”
HMCL commenced dispatches of the
Hero Xtreme 160R.
The
Xtreme 160R
further strengthens Hero MotoCorp’s
presence in the premium motorcycle segment. It is priced at INR99,950/-* (Front Disc with Single Channel ABS)
and at INR1,03,500* (Double Disc with Single Channel ABS) *(prices ex-showroom Delhi).
Snapshot of volumes for Jun-20
YoY
Company Sales
Hero MotoCorp
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-26.9
112,682
300.0
Jun-20
Jun-19
FY21
YTD
Residual Residual FY21 YTD
Growth Monthly Monthly
FY21
FY20 YTD (%) chg
Gr. (%)
(%) Run rate Run rate
estimate
5,360,732 -16.4
5.0 533,034
187,809
450,744 616,526
563,426 1,842,920 -69.4
TVS Motors: Above est. at 198k units (v/s est. ~175k units), a decline of ~33% YoY
TVSL’s wholesales declined 33.2% to 198.4k units (v/s est. 175.5k units).
2W volumes were down ~32.6% to 191k units. While domestic 2W volumes declined ~36% YoY, export volumes
declined ~19% YoY.
3W volumes declined ~46.4% YoY to ~7.3k units (v/s est. 5.5k units).
We estimate volumes to decline ~16.5% in FY21E, implying residual growth of 5%.
1 July 2020
3
 Motilal Oswal Financial Services
Automobiles
TVS resumed its operations in India in a graded manner across its factories in Hosur, Mysuru, and Nalagarh. The
market is opening up gradually post the lockdown and is witnessing positive uptake in both domestic retail as well
as exports. It faced supply chain constraints in Jun’20, however, the company has undertaken various
countermeasures, some of which have started yielding results within the month itself. It is expecting to overcome
more of these issues in Jul’20.
Snapshot of volumes for Jun-20
YoY
Company Sales
TVS Motor
Motorcycles
Scooters
Mopeds
Three-Wheelers
Total Domestic
Total Exports
Jun-20
198,387
84,401
65,666
41,009
7,311
145,264
53,123
Jun-19
297,102
131,331
99,007
53,123
13,641
227,202
69,900
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-33.2
-35.7
-33.7
-22.8
-46.4
-36.1
-24.0
58,906
N/A
N/A
N/A
2,688
34,644
24,262
236.8
N/A
N/A
N/A
172.0
319.3
119.0
Residual Residual FY21 YTD
Growth Monthly Monthly
FY21
FY21
FY20 YTD (%) chg
Gr. (%)
(%) Run rate Run rate
YTD
estimate
266,933
N/A
N/A
N/A
11,505
179,908
87,025
923,195
417,181
294,532
171,957
39,525
714,411
208,784
-71.1 2,724,202 -16.5
-77.8 1,086,875 -20.3
-77.7 905,356 -15.8
-43.5 528,525 -18.8
-70.9 147,228 -5.9
-74.8 2,013,567 -36.1
-58.3 710,635 -6.7
5.0
5.1
7.6
-9.9
16.1
-24.8
12.8
273,030
110,482
93,299
47,922
15,080
203,740
69,290
88,978
30,845
21,889
32,409
3,835
59,969
29,008
EICHER MOTORS: Above est.; RE volumes at ~38k units (v/s est. ~35k units), a decline of 35% YoY
Royal Enfield volumes declined 35% YoY to ~38k units (v/s est. ~35k units).
Retails have been better than wholesales; in many markets RE is on the waiting list due to supply side issues.
Our estimates factor in for ~12% decline in volumes for FY21E, implying residual growth of 8.4%.
VECV volumes declined 70% YoY to 1,358 units (v/s est. 1,142 units), with domestic LMD and HD volumes
declining YoY by ~69% and ~79%, respectively. Buses volumes declined 88% YoY. Exports declined just ~17% YoY.
Snapshot of volumes for Jun-20
YOY
Jun-20
Royal Enfield
VECV
Domestic LMD
Domestic HD
Domestic Buses
VTI
Total Domestic
Exports
Jun-19
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-34.8
-70.3
-68.7
-79.1
-87.8
-44.8
-74.9
-16.7
19,113
686
263
94
111
31
499
187
99.2
98.0
177.9
68.1
14.4
19.4
111.0
63.1
Residual Residual FY21 YTD
FY21
FY21 YoY (%) Growth Monthly Monthly
FY20 YTD (%) chg
(%) Run rate Run rate
YTD
estimate chg
57,269 183,589 -68.8
2,129 13,331 -84.0
994
6,911 -85.6
252
2,267 -88.9
238
3,067 -92.2
68
197 -65.5
1,552 12,442 -87.5
577
889 -35.1
612,552
36,955
20,431
5,459
5,889
886
32,665
4,290
-12.0
-24.2
-23.5
-25.0
-35.0
-20.0
-26.2
-6.1
8.4 61,698
-1.6 3,870
-1.8 2,160
3.9
579
-5.7
628
-10.2
91
-2.2
3,457
0.9
413
19,090
710
331
84
79
23
517
192
38,065 58,339
1,358 4,569
731 2,337
158
755
127 1,044
37
67
1,053 4,203
305
366
TATA MOTORS: 1QFY21 wholesales above est. at 25k
units
(v/s est. ~15.6k
units),
a decline of ~52% YoY
Tata Motors’ 1QFY21 volumes declined ~52% YoY to ~25k units (v/s est. 15.6k units).
Total CV volumes declined ~90% YoY to 10.5k units (v/s est. 8.1k units).
M&HCV volumes declined 91% YoY to 3.4k units (v/s est. 2.2k units).
LCV volumes declined 88.5% YoY to 7.1k units (v/s est. 6k units).
For CVs, we see some downside risk to our estimates as implied growth is 8.6% on our FY21 CV volume decline
estimate of ~20%
PV segment sales declined ~61% YoY to 14.6k units (v/s 7.5k units),
Car segment volumes declined ~43% YoY to 10.3k units (v/s est. 4.6k units), benefitted by the launch of
Tata
Altroz,
which added 3k units to wholesales. UV volumes declined by 78% YoY to 4.3k units (v/s est. 2.9k units).
1 July 2020
4
 Motilal Oswal Financial Services
Automobiles
According to Mr. Girish Wagh, President – CV Business, Tata Motors, “Amidst
subdued demand environment,
1QFY21 was marked by successful transition to BS6 across the range of commercial vehicles. Domestic wholesales
for 1QFY21 was 9,274 units, a 90% drop over 1QFY20. As the country moved to the unlock phase, all plants started
operations from end-May and ramped up production gradually as parts’ availability improved. Retails were 67%
behind wholesales due to negligible opening inventory at dealers and muted demand. There are early recovery
signs in a few sectors, and we look forward to a gradual pickup in demand on the back of overall economic
recovery, while we continue to address the challenges of intermittent demand and supply disruptions from COVID-
19.”
Mr. Shailesh Chandra, President, Passenger Vehicles Business Unit, Tata Motors Ltd. said,
“The COVID-19
lockdown deeply impacted PV industry sales in 1QFY21. After partial sales recovery in May’20, pent-up demand
supported steeper recovery of retail in Jun’20. Passenger Vehicle Business cumulatively sold 14,571 units in
1QFY21, which was 61% lower than 1QFY20. Retail was stronger than wholesales by 27%, driven by the company’s
focus on retail while ensuring optimum inventory levels in the network.”
Snapshot of volumes for 1QFY21
YoY
Company Sales
Tata Motors
HCV's
LCV's
CV's
Cars
UV's
1QFY21
25,047
3,413
7,063
10,476
10,298
4,273
1QFY20
137,475
39,055
61,232
100,287
17,913
19,275
YoY (%)
chg
-81.8
-91.3
-88.5
-89.6
-42.5
-77.8
FY21 YTD
25,047
3,413
7,063
10,476
10,298
4,273
FY20 YTD
137,475
39,055
61,232
100,287
17,913
19,275
(%) chg
-81.8
-91.3
-88.5
-89.6
-42.5
-77.8
FY21
estimate
399,853
94,273
177,291
271,564
71,886
56,402
Gr. (%)
-15.5
-24.2
-18.0
-20.3
-0.5
-6.7
Residual
Growth (%)
11.6
6.4
9.8
8.6
13.4
26.6
Ashok Leyland: Wholesales below est. at 2.4k
units
(v/s est. ~3k
units),
a decline of ~81% YoY
Wholesale dispatches stood at 2,394 units (v/s est. 3,017 units), down 81.3% YoY.
M&HCV volumes declined ~91% YoY to 755 units (v/s est. ~1,264 units). Implied residual growth is 11.5% for
remaining 9MFY21.
LCV volumes declined 62.6% YoY to 1,639 units (v/s est. 1,753 units). Implied residual growth of ~48% in
remaining 9MFY21 is based on plugging of gaps in the product portfolio with new product launches starting from
2QFY21.
Snapshot of volumes for Jun-20
YoY
Company Sales
Ashok Leyland
CV (ex LCV)
LCV
Jun-20 Jun-19
2,394 12,810
755 8,427
1,639 4,383
MoM
YoY (%)
MoM (%)
May-20
chg
chg
-81.3
-91.0
-62.6
1,420
266
1,154
68.6
183.8
42.0
Residual Residual FY21 YTD
Growth Monthly Monthly
FY21
FY21
FY20 YTD (%) chg
Gr. (%)
(%) Run rate Run rate
YTD
estimate
3,814
1,021
2,793
39,608 -90.4
26,719 -96.2
12,889 -78
111,623 -10.9
58,858 -25.1
52,765 13.1
25.9 11,979
11.5 6,426
48.0 5,552
1,271
340
931
1 July 2020
5
 Motilal Oswal Financial Services
Automobiles
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.
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 - MOSFL) 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/Associate%20Details.pdf
Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
MOFSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOFSL and/or
its associates and/or Research Analyst may have actual/beneficial ownership of 1% or more securities in the subject company in the
past 12 months.
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.
Research
Analyst may have served as director/officer, etc. in the subject company in the past 12 months. MOFSL and/or its associates may have received any compensation from the subject company in the past 12 months.
In the past 12 months , MOFSL 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 MOFSL or its associates in the past 12 months.
MOFSL 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, MOFSL 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. 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. 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. 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.
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.
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.
Disclosures:
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
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 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 Financial Services Limited(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.
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.
* MOSFL 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.
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