22 April 2020
Update
| Sector: Utilities
NTPC
BSE SENSEX
31,380
S&P CNX
9,187
CMP: INR98
TP: INR148 (+52%)
Buy
Regulatory structure provides demand insulation
FY20 commercialization at all-time high; sets tone for FY21 earnings
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Financials Snapshot (INR b)
NTPC IN
9,895
965.7 / 12.6
146 / 74
15/0/-9
1696
45.9
Amid a nationwide lockdown, India’s power demand has declined 20–25% YoY. However,
regulated utility companies such as NTPC remain well-insulated from these external
conditions. NTPC’s profitability is largely dependent on the ability to operate and declare
availability for its plants. The direct impact of lower power demand / plant utilization is
seen largely in the form of lower PLF incentives (1–2% of earnings).
Given the essential nature of power generation, operations continue at NTPC’s plants.
Coal stocks at power plants have also increased amid a ramp-up in Coal India’s
production and lower power demand, thus reducing risks related to fuel availability.
Moreover, NTPC has commercialized 5.3GW of plants in FY20, the highest ever in a single
fiscal year. While an extended country-wide lockdown could impact upcoming
commercialization plans (FY21 guidance: ~5GW), we note: even if we assume no
incremental commercialization, NTPC should register 6–7% earnings growth in FY21 as
the full benefit of recent additions flows through.
We build in some delays on execution and expect commercialization of 3.6GW in FY21.
The current stock price implies 0.8x FY21 P/BV, which is at a ~40% discount to its long-
term averages. Reiterate our Buy rating on the stock, with TP of INR148/sh.
Y/E Mar
Net Sales
EBITDA
PAT
EPS (INR)
Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
2020E 2021E 2022E
972.5 1,051.4 1,212.6
303.6
130.3
13.2
13.7
119.0
11.4
6.8
7.4
0.8
341.2
143.6
14.5
10.3
128.0
11.8
7.2
6.7
0.8
387.2
160.0
16.2
11.4
137.2
12.2
7.8
6.0
0.7
5.3GW of capacities commercialized in FY20
NTPC has met its target of 5.3GW of commercialization for FY20, marking the
highest ever commercialization for the company in a single year (Exhibit 1). The
back-ended nature of commercialization (1.7GW over Feb–Mar ’20) also means the
full benefit of these additions would be realized in FY21. We note the recovery of
RoE / fixed charges for these plants depends on NTPC’s ability to operate and
declare availability. Thus, the company is insulated from power demand conditions
(which, given the current scenario, could lead to lower offtake from these plants).
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Dec-19 Sep-19 Dec-18
54.1
30.6
12.8
2.5
54.5
30.8
12.1
2.6
58.9
26.1
11.7
3.3
FII Includes depository receipts
Fixed-charge recoveries expected as coal stocks improve
Stock Performance (1-year)
NTPC
Sensex - Rebased
160
120
80
40
Muted power demand, coupled with production ramp-up at Coal India’s mines, has
resulted in an increase in coal stocks at power plants. This bodes well for NTPC and
reduces fixed-charge under-recoveries (FC u/r). In 1H, availability at NTPC’s plants
was impacted by production issues at Coal India’s mines (Talcher and Korba
coalfields). However, production at these mines has improved, leading to recovery
in coal stocks at these plants (Exhibit 2). For FY20, we expect FC u/r of ~INR2.3b
(v/s INR8b in FY19) (Exhibit 3). As per our interaction with NTPC, given the essential
nature of the power generation business, the movement of coal through rail or
road has not been a challenge. In fact, the current low-demand scenario has
presented the company with the opportunity to cushion itself from any coal-
related supply shocks in the near future.
Aniket Mittal
(aniket.mittal@motilaloswal.com); 912271985585
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
NTPC
Possible implications: Commercialization, working capital, and PLF
incentives
Upcoming commercialization:
A country-wide lockdown could impact upcoming
commercialization plans (~5GW target in FY21). However, most of these plants are
in the advanced stages of works and should not see much delay once the lockdown
is lifted. Upcoming capacities are incremental units of plants commercialized in
FY19/FY20, and most resources have been mobilized, as per the company. We build
in commercialization of 3.6GW in FY21. In the worst-case scenario of no incremental
commercialization occurring in FY21 (note that 660MW is already commercialized),
our FY21 EPS est. would be impacted by ~3%.
Working capital:
Lower power demand would impact the cash positions of
distribution companies (DISCOMs) in the near term. DISCOMs’ overdues to NTPC are
high (Exhibit 4), and the current situation limits DISCOMs’ ability to repay these
overdues. This could impact NTPC’s working capital. From a P&L perspective,
however, these existing overdues would have a positive impact on earnings. NTPC is
entitled to a late payment surcharge (LPS) of 18% on these overdues v/s borrowing
cost of 7.5%. This implies a 10–11% positive impact on net interest income. While
CERC has reduced the LPS rate to 12% p.a. for over dues over 24th Mar–30th June
2020, this would still imply a net 4–5% benefit. Our FY21E build in late payment
surcharge income of INR18b. Another aspect to consider is higher coal availability;
while it positively reduces fuel supply concerns, it could increase inventory if
demand remains muted.
PLF incentives:
NTPC earns incentives (INR0.5/kWh) for plant utilization >85%.
Lower demand and subsequent lower plant utilization could impact this incentive.
We build in ~INR1.5b worth of PLF-related incentives for FY21 (1–2% of earnings).
The unanticipated: Media articles suggest cut in RoE / fixed charges
Recent media articles indicate there are talks of a possible cut in RoE / fixed costs for
generation companies given the liquidity issues at DISCOMs. The latter have asked
the current situation to be categorized as force majeure. Our discussion with NTPC
suggests that: (1) power purchase agreements (PPAs) do not have a force majeure
clause in place on which fixed-charge payments can be waived and (2) no official
order has been issued from the CERC (regulator) in this regard. Furthermore, the
implementation of such an RoE / fixed-charge cut in a uniform and fair manner
across generators appears difficult as cuts for non-regulated entities may
necessitate a look into individual PPAs. Accordingly, we do not currently anticipate
or build for a cut in RoE / FC for NTPC.
However, we note a 400bps cut in RoE (implying RoE broadly equivalent to norm WC
interest) for a period of three months (in line with the duration of the deduction in
LPS) would impact our FY21 est. by 5%. The broader impact on the stock could be
higher if such a move is implemented as it may put a question mark over the relative
insulation provided by CERC’s regulatory business model.
22 April 2020
2
 Motilal Oswal Financial Services
NTPC
Current regulatory structure largely insulated from external demand
Given the regulated structure of the business and cost recoveries linked to plant
availability, the impact on NTPC’s existing earnings base is negligible. Lower plant
utilization could impact PLF incentives, but this forms 1–2% of our FY21 earnings
estimate. Lower PLF could also impact operating parameters such as auxiliary
consumption and station heat rate (SHR); however, current regulations provide
compensations for the same. With the recent decline in stock price, NTPC now
trades at FY21 0.8x P/BV, which is at a ~40% discount to its long-term averages.
Reiterate our Buy rating on the stock, with a TP of INR148/sh.
NTPC has commercialized
5.3GW of capacities in FY20,
its highest ever in a single
fiscal year.
Exhibit 1: NTPC – Capacity commercialization
Unit
Meja (JV)
Gadarwara U-1
New Nabinagar U1 (JV)
Lara U-1
Tanda-II U-1
Khargone U1
Barauni
Darlipalli U-1
Total Commercialized
Type
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Coal
Capacity (MW)
660
800
660
800
660
660
250
800
5,290
Commercialized Date
Apr-19
Jun-19
Sep-19
Oct-19
Nov-19
Feb-20
Mar-20
Mar-20
Source: NTPC, MOFSL
Exhibit 2: NTPC – Coal stocks at critical plants
Coal inventory at month end ('000 tonnes)
1,000
Coal stocks at NTPC’s power
plants have improved post
the monsoons, led by a
ramp-up in coal production
and muted power demand.
800
600
400
200
0
Korba
Talcher
Sipat
Source: CEA, MOFSL
With improvement in
availability, we expect FC
u/r to reduce to ~INR2.3b
for FY20.
Exhibit 3: NTPC – Fixed cost under-recoveries
PAF
Plant
1HFY20
Rihand-II
Farakka-III
Talcher Stage 1, 1GW
Talcher Stage 2, 2GW
Simhadri STPS Stage 1
Vindhyanchal-II
Korba-Stg III
Sipat-I
Others
Total
FY20
Expected FC u/r (INR m)
1HFY20
FY20
74.6
55.9
70.8
71.1
76.3
75.2
75.4
78.1
88.5
75.5
74.1
81.2
89.4
84.8
87.4
87.9
374
948
596
836
344
287
303
773
4,461
0
618
915
457
0
11
0
0
300
2,300
Source: Regional Power Committees, MOFSL
22 April 2020
3
 Motilal Oswal Financial Services
NTPC
Exhibit 4: NTPC – DISCOMs’ overdues
DISCOMs’ overdues to NTPC
have risen during the year.
We build in a decrease at
the end of FY20, given bill
discounting (as done in
recent years), but expect a
subsequent sharp rise in the
next few months.
Discom overdues to NTPC
125
100
75
50
25
0
39
25
20
74
107
Note: Data from Feb’18–May ’19 indicates dues >60 days; Jun ’19–Jan’20 indicates dues >45 days
Source: CEA, MOFSL
We build in 3.6GW of
commercialization for FY21
v/s the company’s guidance
of ~5GW.
Exhibit 5: NTPC – Commercial capacity additions
NTPC Standalone
Regulated
Northern Region
Unchahar- VI
Tanda II
Barauni
Western Region
Mouda II
Lara (Chhattisgarh)
Solapur
Khargone
Gadarwara
Eastern Region
Barh I
North Karanpura
Bongaigaon, Assam
Darlipalli
Southern Region
Kudgi
Telangana
Solar
NTPC JV
Meja Urja Nigam
BRBCL
New Nabinagar
Kanti, Muzzafarpur
NTPC Group (incl. retirements)
FY18
3,970
1,820
500
500
FY19
1,225
660
FY20
3,970
3,970
910
660
250
2,260
800
660
660
660
800
800
660
800
2,120
660
660
800
800
800
300
120
250
195
4,090
250
250
660
1,475
5,290
660
3,580
1,320
660
1,320
660
910
250
660
4,740
FY21E
2,260
2,260
FY22E
3,830
3,830
910
660
250
2,260
800
1,320
660
660
250
250
800
1,600
800
Source: NTPC, MOFSL
22 April 2020
4
 Motilal Oswal Financial Services
NTPC
Exhibit 6: NTPC – Sensitivity table
FY20E
Scenario:
Commercialization (GW)
NTPC Consol. PAT (INR b)
% impact
Scenario:
Lower RoE
NTPC Consol. PAT (INR b)
% impact
5.3
130.3
Current est.
FY21E
3.6
143.6
Scenario
FY21E
0.6
139.3
-3.0%
400bps cut for 3 months
136.8
-4.8%
Source: MOFSL
130.3
143.6
Exhibit 7: DCF valuation
Case 1
Rf. Nominal risk-free rate
B. Beta
Km. Equity Risk premium
Cost of equity (Rf+Km x B)
DCFE
A. FY21-24
RoE
(%)
14.00
12.00
Re-Invst
(%)
30
25
Growth
(%)
4.2
3.0
(%)
(%)
(%)
INR m
246,796
6.50
0.85
5.00
10.75
INR/sh.
25
(%)
(%)
(%)
INR m
243,838
Base
7.00
0.85
5.00
11.25
INR/sh.
25
(%)
(%)
(%)
INR m
240,935
Case 2
7.50
0.85
5.00
11.75
INR/sh.
24
B. FY25-32
C. Terminal Value
Target price (A+B+C)
600,646
727,219
61
73
159
577,808
644,290
58
65
148
56
58
138
Source: MOFSL, Company
556,010
573,073
22 April 2020
5
 Motilal Oswal Financial Services
NTPC
Story in Charts
Exhibit 8: New regulations lend visibility to earnings
Normative RoEs
15.5%
14.0%
1.9
1.5
15.5%
15.5%
Exhibit 9: Pace of commercialization is picking up
NTPC - Net Commercial adds (GW)
5.3
4.1
3.6
4.7
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: Fixed-cost under-recoveries declining
14.3
NTPC - FC u/r (INR b)
Exhibit 11: Overall, S/A earnings to witness 11% CAGR
11% CAGR
5
10
6
143
8.0
3.0
104
2.3
2.0
2.0
30
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 12: Capitalization would outpace capex…
INR b
Capex
314
194
95
189
83
192
232
243
188
198
208
191
155
182
218
Capitalization
358
210
459
Exhibit 13: …leading to RoE improvement
RoE (%)
10.9
11.3
10.0
10.6
8.7
10.7
11.4
11.8
12.2
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 14: Dividend yield remains attractive
DPS
5.5
3.9
3.7
Div. Yield (%)
5.7
4.6
7.2
Exhibit 15: Stock trades at lower end of historical val.
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
3.0
2.5
1.8
2.0
1.4
1.0
1.0
0.7
0.0
3.8
3.6
5.4
4.5
5.5
7.0
0.7
Source: MOFSL, Company
Source: MOFSL, Bloomberg
22 April 2020
6
 Motilal Oswal Financial Services
NTPC
Financials and Valuations
Income statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2015
806,220
2.1
171,941
21.3
55,646
116,295
35,704
20,789
3,182
104,562
4,638
4.4
0
99,924
87,596
-4.3
2016
727,055
-9.8
179,569
24.7
52,240
127,329
33,137
10,576
0
104,768
-1,628
-1.6
-204
108,012
96,957
10.7
2017
817,171
12.4
218,300
26.7
60,099
158,201
36,511
9,668
0
131,358
30,467
23.2
-57
107,196
98,717
1.8
2018
877,622
7.4
229,808
26.2
74,599
155,209
44,346
15,583
0
126,446
25,881
20.5
-425
105,440
87,992
-10.9
2019
906,369
3.3
199,086
22.0
76,881
122,205
52,609
17,953
0
87,550
-32,064
-36.6
-66
126,400
114,614
30.3
2020E
972,539
7.3
303,610
31.2
89,027
214,582
69,877
20,146
0
164,852
40,514
5,864
-57
130,259
130,259
13.7
2021E
1,051,429
8.1
710,213
341,216
32.5
241,332
78,542
19,492
0
182,282
45,198
24.8
-57
143,621
143,621
10.3
(INRm)
2022E
1,212,612
15.3
825,461
387,152
31.9
274,054
88,026
14,746
0
200,774
48,043
23.9
-57
159,975
159,975
11.4
Balance sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2015
82,455
738,485
820,940
1,022,520
12,656
1,864,995
1,443,608
525,077
918,530
675,547
141
601,543
79,725
92,499
161,390
267,929
330,766
330,766
0
270,777
1,864,995
2016
82,455
809,511
891,965
1,120,194
14,094
2,035,181
1,632,140
587,180
1,044,959
815,497
148
543,886
79,592
101,740
57,370
305,185
369,310
369,310
0
174,577
2,035,181
2017
82,455
895,926
978,380
1,137,551
14,849
2,138,812
1,170,879
125,562
1,045,317
868,957
78,023
492,677
65,861
89,995
33,015
303,806
346,162
346,162
0
146,515
2,138,812
2018
82,455
953,180
1,035,635
1,300,143
24,081
2,369,337
1,501,531
206,147
1,295,385
820,931
92,515
534,851
61,403
88,122
43,876
341,450
374,344
374,344
0
160,507
2,369,337
2019
98,946
1,001,424
1,100,370
1,616,818
41,997
2,765,833
1,665,811
287,597
1,378,214
1,067,775
81,000
646,976
81,194
101,477
27,823
436,482
408,131
408,131
0
238,845
2,765,833
2020E
98,946
1,078,253
1,177,198
1,693,723
41,997
2,910,606
2,023,594
376,624
1,646,969
918,467
85,030
662,829
100,281
124,495
41,571
436,482
388,059
388,059
0
247,113
2,910,606
2021E
98,946
1,167,453
1,266,399
1,722,846
41,997
3,037,890
2,233,342
476,509
1,756,833
900,158
90,887
686,836
104,528
132,457
53,369
436,482
393,033
393,033
0
264,194
3,031,010
(INRm)
2022E
98,946
1,258,166
1,357,112
1,697,981
41,997
3,103,738
2,692,465
589,607
2,102,858
595,653
92,643
715,831
113,021
130,010
76,319
436,482
403,246
403,246
0
312,584
3,103,738
22 April 2020
7
 Motilal Oswal Financial Services
NTPC
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Debtors (No. of Days)
Inventory (No. of Days)
2015
8.9
15.7
83.0
4.6
53.9
11.1
7.1
1.4
2.4
12.4
4.1
10.0
7.3
11.2
42
46
32
1.0
2016
9.8
16.2
90.1
2.7
27.3
10.3
6.9
1.2
3.0
12.9
2.4
11.3
7.2
11.8
51
53
34
1.2
2017
10.0
16.9
98.9
3.8
38.3
10.4
6.6
1.1
2.7
10.6
3.4
10.6
6.0
10.5
40
40
25
1.1
2018
8.9
18.2
104.7
3.6
40.5
10.5
6.2
1.1
2.7
11.1
3.2
8.7
5.8
9.6
37
35
28
1.2
2019
11.6
20.5
111.2
3.6
46.3
8.8
5.5
1.0
3.0
14.4
3.2
10.7
7.8
11.1
41
42
34
1.4
2020E
13.2
22.2
119.0
4.5
34.2
7.4
4.4
0.8
2.8
9.1
4.3
11.4
6.2
9.4
36
40
27
1.4
2021E
14.5
24.6
128.0
5.5
37.9
6.7
3.9
0.8
2.5
7.7
5.7
11.8
7.2
9.4
46
36
26
1.3
2022E
16.2
27.6
137.2
7.0
43.3
6.0
3.5
0.7
2.1
6.7
7.2
12.2
7.8
9.6
39
34
24
1.2
Payable (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
Cash Flow Statement
Y/E Mar
Profit/(Loss) before Tax
Interest
Depreciation
(Inc)/Dec in WC
Tax paid
others
CF from Operations
Capex
(Pur)/sale of Invest.
Acquisition in subs.
Int. & Div. Income
Others
CF from Investments
Inc/(Dec) in Debt
finance cost
Dividend (incl. tax)
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2015
104,562
35,286
55,646
-11,694
-20,100
-16,242
147,459
-191,772
16,391
0
17,037
145
-158,200
205,811
-72,371
(INRm)
2016
101,035
41,090
61,534
-36,422
-14,584
1,452
154,106
-232,470
16,536
0
9,528
-16,514
-222,920
80,528
-83,473
2017
137,606
35,691
60,099
-2,073
-26,263
-3,395
201,666
-243,451
3,436
-12,002
2,707
-8,262
-257,573
150,466
-75,645
2018
132,417
44,160
74,599
-58,298
19,257
-15,508
196,627
-187,559
0
-11,531
3,033
-42
-196,099
145,059
-86,058
2019
83,719
52,431
76,881
-72,868
-30,390
53,898
163,671
-197,548
0
-40,574
1,079
343
-236,700
224,698
-107,672
2020E
170,773
69,877
89,027
-16,508
-40,514
-20,146
252,509
-208,475
-4,030
20,146
-192,359
76,905
-69,877
-53,431
-46,402
13,748
27,823
41,571
2021E
188,819
78,542
99,885
-9,114
-45,198
-19,492
293,442
-191,440
-5,857
19,492
-177,805
29,123
-78,542
-54,420
-103,839
11,798
41,571
53,369
2022E
208,018
88,026
113,098
377
-48,043
-14,746
346,731
-154,617
-1,756
14,746
-141,627
-24,865
-88,026
-69,262
-182,154
22,949
53,369
76,319
-148,385
-14,745
-25,486
186,876
161,390
-33,513
-35,206
-104,021
161,390
57,369
-43,269
31,552
-24,355
57,369
33,015
-48,669
10,333
10,861
33,015
43,876
-59,272
56,976
-16,053
43,876
27,823
22 April 2020
8
 Motilal Oswal Financial Services
NTPC
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
22 April 2020
9
 Motilal Oswal Financial Services
NTPC
********************************************************************************************************************************
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.
22 April 2020
10