Motilal Oswal Financial Services

Motherson Sumi

BSE SENSEX

35,844

S&P CNX

10,522

3 July 2020

Update | Sector: Automobiles

CMP: INR104

TP: INR122 (+18%)

Buy

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To merge holdco, including other unlisted businesses

Implied valuations for holdco (ex MSS & SMRPBV) – ~INR60b for FY19

PAT of ~INR1.8b

In the follow-up to its Jan’20 proposal to demerge the Domestic Wiring Harness

business and acquire 49% stake in SMRPBV, the board today approved the merger of

SAMIL (holdco) with its unlisted businesses. At the proposed share-swap and

benchmark valuation, the implied value of the other businesses of SAMIL is ~INR60b

for FY19/FY20 derived PAT of the core business at ~INR1.8b/INR0.9b. This solution

simplifies the structure well and aligns the interest of all the stakeholders. However,

considering the limited understanding (as details are limited) of the core businesses of

SAMIL, implied valuations seem to fully capture the medium-term growth potential of

its key businesses. We believe this would drive a better value discovery of the Non-

India Wiring Harness business, also giving the minority shareholder the option to

invest in either or both of the businesses.

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 (%)

MSS IN

3,158

327.3 / 4.1

151 / 49

-4/-17/-8

1507

38.3

Financials & Valuations (INR b)

FY20 FY21E FY22E

Y/E March

Specifics of group’s business reorganization proposal

Sales

635.4 587.1 687.4



The Board of Directors of MSS granted in-principle approval for the re-

EBITDA

52.0

45.8 70.9

organization of business with the group:

Adj. PAT

11.7

6.9 17.4

EPS (INR)

3.7

2.2

5.5



The demerger of the Domestic Wiring Harness (DWH) business of MSS into a

EPS Gr. (%)

-27.5 -41.0 152.7

new company that shall have mirror shareholding as MSS and shall be listed.

BV/Sh. (INR)

35.7

37.2 40.9



The Board of Directors today approved the merger of SAMIL into MSS.

Ratios

SAMIL is the promoter-owned entity owning 49% stake in SMRPBV and

Net D:E

0.5

0.2

other auto component & allied businesses. In the original proposal, it was

RoE (%)

10.5

6.0 14.1

proposed to merge just 49% stake of SMRPBV into MSS.

RoCE (%)

6.4

4.9 11.1

Payout (%)

31.5

31.5 31.5



Post the demerger of the DWH business, SAMIL would be merged into

Valuations

MSS. The share-swap ratio is proposed at 51 share issues of MSS (of INR1

P/E (x)

28.0

47.4 18.8

face value) for every 10 shares of SAMIL (of INR10 face value). This merged

P/BV (x)

2.9

2.8

2.5

entity would be renamed Samvardhana Motherson International Ltd

Div. Yield (%)

1.0

0.6

1.4

(SMIL).

FCF Yield (%)

9.7

1.5 10.3



The demerger of the India Wiring Harness business would not include the

Mr Laksh Vaaman Sehgal, Director,

MSS stated,

“This Transaction

provides MSSL shareholders with



the opportunity to participate in

100% value of SMRP BV and also

brings all auto-related businesses

under listed entities, which aligns



interest of all stakeholders.”



50% JV with Kyungshin Industrial Motherson, which manufactures wiring

harnesses for Hyundai India.

Effectively, the current listed entity (MSS) would be left with the global

businesses (100% of SMRPBV and PKC) and remaining India business,

including the JVs. The India Wiring Harness (DWH) business would be

focused on the India business, as desired by Sumitomo.

This entire restructuring is expected to be completed by 2QFY22, effective

from 1

Apr’21. This restructuring would require majority approval of the

minority shareholders.

The merger is expected to be EPS-accretive in FY22 itself.

Post the merger of SAMIL, the shareholding of the promoters would

increase to 68.15% from 61.73% currently, with the Sehgal family

controlling 50.4% and Sumitomo Wiring System owning 17.7%.

Jinesh Gandhi – Research Analyst

(Jinesh@MotilalOswal.com); +91 22 6129 1524

Vipul Agrawal – Research Analyst

(Vipul.Agrawal@MotilalOswal.com) +91 22 7193 4322

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

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

Motherson Sumi

Analysis of the deal



What are the key businesses of SAMIL?

Apart from owning 33.43% stake in MSS

and 49% stake in SMRPBV, it has a presence in areas such as Auto Lighting,

Metal Products, Shock Absorbers, Air Conditioning Systems, IT, etc. Over 80% of

SAMIL’s business (ex SMRPBV) is derived from the Indian market.

How do SAMIL’s financials look?

For the core business, revenue and EBITDA are

at ~INR28b and INR3.6b, respectively (not on a pro-rata basis). SAMIL has net

debt of ~INR11.1b.

What is the valuation for acquiring SAMIL?

The benchmark valuation of SAMIL

works out to ~INR244b. Adjusted for its 33.43% stake in the listed entity

(~INR129b at our fair value) and 49% stake in SMRPBV (~INR55b at 15x Jun’22

EPS), the implied core business valuation works out to ~INR60b. Core business

implied PAT for FY19/FY20 was ~INR1.8b/INR0.9b.

What does the merged entity SMIL have to offer?

The merger of SAMIL into

MSSL would create a strong listed entity with: a) a diversified product portfolio

that would enhance the 3CX10 strategy and reinforce MSSL’s position as a

leading, globally diversified, preferred component supplier, b) a platform for

future growth – through both the organic and inorganic routes, c) a powertrain

neutral portfolio, favorably positioned for megatrends, d) significant

technological capabilities in partnership with industry leaders, and e)

participation in the 100% future growth of SMRPBV for the minority investors.

This arrangement provides exposure to new business segments and aligns the

pursuits of inorganic growth opportunities.

Valuation and view



We believe this reorganization would lead to better value discovery of the Non-

India Wiring Harness business. However, MSS-2 would increasingly be

benchmarked to its global peers in the automotive supply chain.

Also, this organization would give the minority shareholder the option of

investing in either or both of the businesses. This needs to be seen in the

context of increasing exposure to the global automotive cycle in the current

structure, which may not fit the mandate of many investors (with focus on India

plays).

Our fundamental view on MSS remains intact: the stabilization of SMP’s

greenfield plant is critical in driving earnings recovery for MSS, which we

estimate would reflect in FY21. This, coupled with the execution of a strong

order book and limited capex at SMPBV as well as the India business benefitting

from the content increase in BS6, augurs well for MSS.

Implied valuations for SAMIL’s core business appear to fully capture medium-

term potential. However, this arrangement does align the interest of the

minority with that of the promoters and creates a platform for the next leg of

growth for the group. We maintain

Buy

with TP of ~INR122.

3 July 2020

Motherson Sumi

Exhibit 1: SAMIL – Deriving implied value of core business

SAMIL O/S Shares (m)

SAMIL valuation used (INR/Sh)

SAMIL Valn (INR m)

Less: Value of SAMIL's 33.43% stake in MSS

listed

Less: Value of SAMIL's 49% stake in SMRPBV

Implied value of SAMIL's core business

Million

473.6

516.04

244,397

129,247

54,999

60,150

INR m

PAT (Concern Share)

Valuation Less: Share of Profit in S/A

basis

Less: Share of Profit in SMRPBV

for the co.

Core PAT

@30x FY23

@ 15x Jun-

22 PE

Remark

Exhibit 2: SAMIL – Deriving implied PAT of core business

FY19

7,594

2,720

3,107

1,767

FY20

2,808

3,005

-1,055

858

Exhibit 3: SAMIL – Business profile

Exhibit 4: MSS – Current structuring of the businesses

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Exhibit 5: First step – Vertical demerger of Domestic Wiring Harness business into separate company

Source: Company, MOFSL

Exhibit 6: Second step – Merger of SAMIL into MSS

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Exhibit 7: Resultant holding structure and business segments

Source: Company, MOFSL

Exhibit 8: Benefits of proposed structure

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Exhibit 9: Diversified portfolio of merged entity

Source: Company, MOFSL

Exhibit 10: Diversified portfolio of group

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Exhibit 11: SMIL to be the platform for future growth

Source: Company, MOFSL

Exhibit 12: SMIL’s proforma financials

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Exhibit 13: DWH financials

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Stories in chart

Exhibit 1: SMRPBV order book trend (EUR b)

Orderbook

17.2

12.9

6.8

3.4

0.4

FY17

FY18

FY19

FY20

3.4

2.4

349

FY15

372

FY16

424

FY17

563

FY18

635

FY19

635

FY20

587

687

Start of Prodn

18.2

Book to bill (x)

Exhibit 2: Revenues and growth trend

Revenues (INR b)

32.8

13.6

10.1

13.6

13.9

12.8

0.0

-7.6

17.1

Growth (%)

6.8

2.8

4.6

FY21E FY22E

Source: Company, MOFSL

Exhibit 3: Consol EBITDA and margin trend

EBITDA (INR b)

EBITDA Margin (%)

Exhibit 4: Consolidated PAT growth trend

PAT (INR b)

7.8

45.8

70.9

FY15

FY16

FY17

FY18

Growth (%)

153

9.0

9.6

9.8

10.3

9.1

8.4

8.2

-6

-27

FY20

-41

30.2

FY15

35.5

FY16

41.7

FY17

51.2

FY18

53.5

FY19

52.0

FY20

FY19

FY21E FY22E

Source: Company, MOFSL

Exhibit 5: FCF generation to improve

CFO

-18

-19

-28

Capex

-1

-30

-27

-22

-19

FCF

Exhibit 6: Trend in return profile

31.8

25.9

17.0

18.4

25.3

19.4

14.7

12.2

15.9

9.8

10.5

6.4

4.9 6.0

14.1

11.1

RoCE (%)

ROE (%)

Source: Company, MOFSL

3 July 2020

Motherson Sumi

Financials and Valuations

Consolidated - Income Statement

Y/E March

Total Income from Operations

Change (%)

Raw Materials

Employees Cost

Other Expenses

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Interest Charges

Other Income

PBT after EO Exp.

Total Tax

Tax Rate (%)

Minority Interest

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

FY16

372,163

6.8

223,737

71,573

41,372

336,682

90.5

35,481

9.5

10,872

24,609

3,450

393

21,552

5,192

24.1

3,437

12,923

49.2

3.5

FY17

423,755

13.9

257,507

80,909

43,671

382,087

90.2

41,668

9.8

10,590

31,078

3,749

2,642

28,997

9,103

31.4

4,350

15,543

16,058

24.3

3.8

FY18

562,933

32.8

343,121

110,678

57,908

511,707

90.9

51,226

9.1

15,752

35,474

4,108

1,701

31,290

10,072

32.2

5,249

15,970

17,024

6.0

3.0

FY19

635,229

12.8

367,383

141,694

72,668

581,745

91.6

53,484

8.4

20,582

32,902

4,232

2,202

30,872

11,022

35.7

3,719

16,132

-5.2

2.5

FY20

635,369

0.0

362,715

150,769

69,872

583,355

91.8

52,014

8.2

27,780

24,234

5,986

2,307

20,554

8,184

39.8

669

11,700

-27.5

1.8

FY21E

587,101

-7.6

281,353

173,384

86,605

541,342

92.2

45,759

7.8

30,203

15,555

6,958

2,450

11,047

3,425

31.0

724

6,899

-41.0

1.2

(INR M)

FY22E

687,442

17.1

315,147

199,392

102,017

616,556

89.7

70,886

10.3

31,407

39,479

6,952

2,550

35,077

10,874

31.0

6,770

17,433

152.7

2.5

Consolidated - Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Minority Interest

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Goodwill

Capital WIP

Total Investments

Curr. Assets, Loans&Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Misc Expenditure

Appl. of Funds

FY16

1,323

39,786

43,971

15,123

57,415

-3,604

112,905

80,462

11,924

68,538

2,931

13,970

591

97,766

22,850

46,537

17,717

10,662

82,531

51,627

29,478

1,426

15,235

11,640

112,905

FY17

1,404

53,265

82,727

22,322

101,418

-5,024

201,443

135,237

33,590

101,647

19,379

19,348

684

137,061

30,716

46,552

48,866

10,927

117,230

73,003

42,600

1,628

19,831

40,554

201,443

FY18

2,105

63,015

93,178

29,600

94,770

-6,266

211,282

174,332

51,138

123,194

22,646

25,849

2,467

133,905

40,132

56,236

27,816

9,722

157,430

90,640

65,168

1,622

-23,525

60,652

211,282

FY19

3,158

78,412

109,627

34,797

109,428

-6,123

247,730

191,445

71,720

119,725

22,118

10,463

2,389

157,377

46,635

61,663

35,469

13,610

179,449

106,613

70,371

2,465

-22,072

115,107

247,730

FY20

3,158

81,394

112,609

35,650

106,428

-5,030

249,659

239,371

99,500

139,870

24,060

8,154

1,614

163,943

51,566

51,784

48,789

11,804

200,270

103,091

94,374

2,805

-36,326

112,287

249,659

FY21E

3,158

86,122

117,338

37,674

103,428

-5,030

253,411

257,912

129,704

128,209

24,060

8,154

1,614

147,367

36,995

53,080

45,549

11,742

168,279

115,462

50,382

2,435

-20,912

112,287

253,411

(INR M)

FY22E

3,158

98,071

129,287

45,944

100,428

-5,030

270,631

277,285

161,111

116,174

24,060

8,154

1,614

194,905

43,318

62,152

75,686

13,749

186,564

129,317

54,395

2,851

8,342

112,287

270,631

3 July 2020

Motherson Sumi

Financials and Valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

FCF per share

Return Ratios (%)

RoE

RoCE (post-tax)

RoIC

Working Capital Ratios

Fixed Asset Turnover (x)

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Current Ratio

Interest Cover Ratio

Net Debt/Equity

FY16

4.3

6.5

14.8

1.0

29.2

23.5

6.9

0.7

6.2

1.0

3.8

31.8

18.4

25.6

4.6

3.3

1.2

7.1

0.9

FY17

5.1

7.1

26.2

0.9

23.6

20.0

3.9

0.7

6.2

0.9

5.5

25.3

14.7

20.0

3.1

2.1

1.2

8.3

0.6

FY18

5.4

9.1

29.5

1.5

34.6

18.9

3.5

0.7

6.9

1.5

2.8

19.4

12.2

16.7

3.2

2.7

0.9

8.6

0.7

FY19

5.1

9.7

34.7

1.5

34.2

19.9

2.9

0.9

9.3

1.5

4.8

15.9

9.8

11.9

3.3

2.6

0.9

7.8

0.7

FY20

3.7

9.6

35.7

1.0

31.5

28.0

2.9

0.9

9.1

1.0

10.1

10.5

6.4

7.5

2.7

2.5

0.8

4.0

0.5

FY21E

2.2

8.7

37.2

0.6

31.5

47.4

2.8

0.9

10.9

0.6

1.6

6.0

4.9

5.5

2.3

0.9

2.2

0.5

FY22E

5.5

12.3

40.9

1.5

31.5

18.8

2.5

0.7

6.8

1.4

10.7

14.1

11.1

14.2

2.5

1.0

5.7

0.2

Consolidated - Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY16

22,929

10,872

3,211

-6,899

-10,278

19,835

2,049

21,884

-19,306

2,578

-151

396

-19,061

7,150

-3,227

-6,675

120

-2,632

191

17,467

17,658

FY17

31,801

10,591

3,324

-8,433

4,813

42,096

-4,099

37,997

-27,789

10,208

-39,675

203

-67,261

25,277

34,092

-3,471

-826

104

55,176

25,912

17,717

43,629

FY18

34,448

15,752

3,777

-10,048

-14,820

29,109

3,531

32,640

-30,308

2,332

-2,876

1,243

-31,941

-9,471

-3,944

-6,332

-2,467

-22,214

-21,515

48,866

27,351

FY19

32,003

20,582

3,878

-10,498

-958

45,007

-1,883

43,124

-26,853

16,271

-7,230

978

-33,105

8,147

-4,159

-6,395

-2,326

7,693

27,816

35,509

FY20

21,129

27,780

5,626

-10,776

16,202

59,959

3,561

63,521

-21,943

41,578

-1,210

753

-22,399

-6,214

-5,667

-12,794

-3,157

-27,832

13,290

35,469

48,758

FY21E

11,047

30,203

6,958

-3,425

-18,654

26,130

1,300

27,430

-18,542

8,888

-18,542

-3,000

-6,958

-2,170

-12,128

-3,240

48,789

45,549

(INR M)

FY22E

35,077

31,407

6,952

-10,874

884

63,445

1,500

64,945

-19,373

45,573

-19,373

-3,000

-6,952

-5,483

-15,435

30,137

45,549

75,686

3 July 2020

Motherson Sumi

NOTES

3 July 2020

Motherson Sumi

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

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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

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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

3 July 2020

Motherson Sumi

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

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

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.

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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

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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.

3 July 2020