11 August 2020
1QFY21 Results Update | Sector: Utilities
Power Grid
Estimate change
TP change
Rating change
Motilal Oswal values your support in the
Asiamoney Brokers Poll 2020 for India
Research, Sales and Trading team. We
request your ballot.
CMP: INR177
TP: INR221 (+25%)
Buy
Impact of rebate flows through
Valuations do not price any growth benefits; Maintain Buy
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
PWGR IN
5,232
924.9 / 12.4
213 / 130
-3/0/-15
2062
Power Grid (PWGR)’s result highlights the impact of rebate (INR10.75b),
with reported S/A PAT declining 18.5% YoY to INR28.1b. Adjusted for the
same and prior-period revenue, PAT was up 21% YoY.
INR234b worth of awards would be bid out under various schemes, but we
expect some delays. In this context, a declining order book does present the
risk of growth slowdown. However, valuations at 1.3x FY22E P/BV and ~9%
FY22E dividend yield remain attractive for a company with steady RoEs of
~17%.
Maintain Buy,
with DCF-based TP of INR221/sh.
Reported S/A PAT was down 18.5% YoY at INR19.8b on account of an
INR10.75b rebate (our est.: INR 20b, including the rebate impact). Not
accounting for the rebate and prior-period sales, PAT would have been up
21% YoY at ~INR28b, partly aided by other income. Other income was up
49% YoY, aided by higher late payment surcharge (INR2.65b v/s INR0.6b for
the previous year).
We note the impact of rebate was baked in our numbers
v/s reported by PWGR as an exception, which led to the apparent difference
on an adjusted basis.
Profit in the
Telecom
segment declined 6% YoY at ~INR1b, and profitability
for the
Consultancy
segment decreased 61%YoY at INR0.2b. Profit from
TBCB subs was largely flat at INR0.8b.
Capitalization stood at INR11.8b, while capex was at INR19.1b.
PWGR has maintained its FY21 capex and capitalization targets of INR105b
and INR200–250b, respectively. As per the co., it plans to commission
Bipole-I of Raigarh Pugalur in the current quarter.
Receivables increased to INR8.2b in Jun’20 (from INR4.9b in Mar’20).
Conversely, they reduced to INR7.5b in Jul’20. Collection efficiency
increased June onward and came in at >100% for June and July. INR12.4b
has been received under the Atmanirbhar scheme.
Rebate impacts profitability
Financials & Valuations (INR b)
Y/E MARCH
2020 2021E 2022E
Sales
EBITDA
Adj. PAT
EBITDA Margin (%)
Cons. Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
Div. Yield (%)
FCF Yield (%)
8.4
1.4
6.7
5.6
21.6
7.7
1.4
6.1
7.8
29.1
7.3
1.3
5.5
8.8
28.1
2.2
17.9
7.9
54.1
1.9
18.2
8.3
67.6
1.7
18.0
8.8
66.7
394.3 406.3 435.1
346.2 365.3 391.8
110.6 120.9 127.4
87.8
21.1
10.2
89.9
23.1
9.3
90.0
24.4
5.4
123.7 130.9 139.6
Maintains capitalization and capex guidance for FY21
Declining capitalization could impact growth, but valuation remains
attractive
Shareholding pattern (%)
As On
Jun-20 Mar-20
Promoter
51.3
51.3
DII
18.3
16.7
FII
25.3
27.0
Others
5.0
5.0
FII Includes depository receipts
Jun-19
55.4
12.2
28.0
4.5
While the awarding of transmission schemes (~INR250b) under renewable
integration provides a good opportunity for PWGR to win new awards, our
checks have suggested certain challenges could defer their awarding. If new
orders do not come in, a declining order book could impact the pace of
growth in profitability.
However, subsequent lower capex (along with the removal of DDT) also
implies potential for higher dividends (FY22E div. yield of ~9%). Besides, the
longer term picture remains intact as investment in renewable energy and
growth in power demand would necessitate the need for transmission
works. Valuations at 1.3x FY22E P/BV remain attractive for a company with
steady RoEs of ~17% and do not capture any growth potential (EPS FY20–
22E: 7% CAGR). Maintain Buy, with DCF-based TP of INR221/sh.
Aniket Mittal – Research Analyst
(Aniket.Mittal@MotilalOswal.com)
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.
13 February 2020
1
 Motilal Oswal Financial Services
Power Grid
Quarterly performance (standalone) – INR m
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extraordinary Inc / (Exp)
PBT
Tax
Effective Tax Rate (%)
Reported PAT
Change (%)
Adjusted PAT
Change (%)
1Q
87,978
5.5
78,901
10.6
89.7
26,591
23,591
4,243
0
32,962
8,684
26.3
24,279
8.4
23,106
2.7
FY20
2Q
3Q
4Q
90,369 93,541 106,802
4.0
12.5
9.8
79,088 82,383 90,479
7.2
11.2
9.0
87.5
88.1
84.7
27,482 28,024 28,636
23,761 24,740 26,044
4,982 5,049
7,051
0
0
0
32,827 34,668 42,850
7,555 7,933 11,024
23.0
22.9
25.7
25,271 26,735 31,827
9.4
14.7
4.2
25,097 26,537 29,749
7.0
12.5
11.3
1Q
93,828
6.6
82,712
4.8
88.2
27,970
22,786
6,314
-10,750
27,520
7,731
28.1
19,789
-18.5
28,059
21.4
FY21
FY20 FY21E
FY21 Vs Est
2QE
3QE
4QE
1QE
(%)
94,764 98,329 102,143 378,689 389,064
83,584
12
4.9
5.1
-4.4
8.0
2.7
-5.0
85,186 88,857 91,694 330,851 348,450
75,878
9
7.7
7.9
1.3
9.5
5.3
-3.8
89.9
90.4
89.8
87.4
89.6
90.8
29,728 30,315 31,770 110,732 119,784
28,764
-3
23,288 24,248 25,860 98,136 96,182
23,121
-1
2,758 2,758
1,960 21,324 13,791
1,958 222
0
0
0
0 -10,750
0
34,928 37,052 36,024 143,308 135,524
25,951
6
8,033 8,522
4,174 35,196 28,460
5,969
23.0
23.0
11.6
24.6
21.0
23.0
26,895 28,530 31,850 108,112 107,064
19,982
-1
6.4
6.7
0.1
8.8
-1.0
-17.7
26,895 28,530 32,395 104,489 115,879
19,982
40
7.2
7.5
8.9
8.6
10.9
-13.5
Source: MOFSL, Company
Exhibit 1: Standalone: Capitalization and capex – INR m
130
100
67 68
56 53 53
25
66
35
25
Capitalized
Capex
88
67 60
79
52
40 37
71
69 65
60
22
41
24 24 27
14
52
46
31 35
19
12
Source: MOSL, Company
Exhibit 2: DCF valuation
Case 1
Rf. Nominal risk-free rate
B. Beta
Km. Equity Risk premium
Cost of equity (Rf+Km x B)
DCFE
A. FY22-24
RoE
(%)
14.00
12.00
Re-Invst
(%)
15
10
Growth
(%)
2.1
1.2
(%)
(%)
(%)
INR m
242,066
6.50
0.75
5.00
10.25
INR/sh.
46
(%)
(%)
(%)
INR m
239,871
Base
7.00
0.75
5.00
10.75
INR/sh.
46
(%)
(%)
(%)
INR m
235,578
Case 2
8.00
0.75
5.00
11.75
INR/sh.
45
B. FY25-32
C. Terminal Value
Target price (A+B+C)
517,885
487,774
99
93
238
498,351
435,830
95
83
224
461,887
351,009
88
67
200
Source: Company, MOFSL
11 August 2020
2
 Motilal Oswal Financial Services
Power Grid
Conference call takeaways
Works in hand
PWGR currently has INR510b worth of works in hand. This consists of ongoing
works worth INR330b, new projects worth INR60b, and TBCB projects worth
INR120b.
Receivables for PWGR increased to INR8.2b in Jun’20 (from INR4.9b in Mar’20).
Conversely, they reduced to INR7.5b in Jul’20. Collection efficiency increased
June onward and came in at >100% for June and July.
INR12.4b has been received under the Atmanirbhar scheme.
The current order pipeline stands at INR234b (INR160b for inter-state and
INR74b for intra-state).
Ordering has been delayed given the postponement of tender timelines and
shift in bid opening dates for RE transmission works. The co. expects a pickup in
ordering activity going forward.
Capitalization stood at INR11.8b, while capex was at INR19.1b for the quarter.
FY21 guidance of capex and capitalization was maintained at INR105b and
INR200–250b, respectively.
The co. expects Bipole-I of Raigarh Pugalur to get commissioned this quarter.
A pickup has been witnessed in RE-related projects in Rajasthan; Pugalur–
Thrissur is also progressing well. However, overall execution pickup is uneven.
On the supply side, manufacturers are facing difficulties in restoring production.
Given the restrictions on imports, the company expects a change in equipment
requirements / procurement for upcoming TBCB projects. However, this would
not impact existing projects.
The company noted the process for InvIT is still under deliberation, but is
expected to be completed this year.
Receivables
Order pipeline
Capex and capitalization
Execution
InvIT
Valuation and view
Steady business model:
The continuation of the tariff structure and regulated RoE
by CERC (power regulator) for FY20–24 lends visibility to PWGR’s business model.
With INR510b worth of works in hand, growth in regulated equity should continue
for the next two to three years – albeit the rate of annual capitalization may be
lower than seen in recent years. Overall, we expect continued capitalization to drive
a 7% CAGR in earnings over FY20–22E. Earnings in FY21, though, would be impacted
given the INR10.75b rebate. However, this is a one-time event and attributable to
the disruption caused by COVID-19.
Long-term growth – Investment in renewables; higher power demand:
From a
longer term perspective, investment in renewable energy and growth in power
demand would continue to drive the need for transmission works. INR480b worth of
project awards have been envisaged for renewable integration and are currently
being bid out. Moreover, the recent project award win (50% win rate) highlights
PWGR’s competitive positioning to win such projects as they come. As per PWGR,
the co. believes India’s vision to reach 450GW of RE capacity by 2030 (est.: 175GW
11 August 2020
3
 Motilal Oswal Financial Services
Power Grid
in 2022) would necessitate incremental investments of INR2.8t within Transmission.
Overall, the Transmission sector is likely to grow at a pace of 8–9% over the next 10
years, providing the basis for long-term growth for the sector, as per PWGR.
Order book slowing in near term, dividend to rise:
With the lack of large new
orders flowing in, PWGR’s order book declined to INR520b at the end of FY20 from
INR1,300b in FY17. A declining order book and capitalization schedule do present
the risk of growth slowdown. However, subsequently lower capital expenditure
(along with the removal of DDT) further implies potential for higher dividends. We
expect DPS to rise from INR10/sh in FY20 to INR15.7/sh in FY22, implying FY22
dividend yield of ~9%.
Valuations attractive:
Given an underpenetrated market and strong competitive
positioning, PWGR is well-positioned to capitalize on upcoming
opportunities/awarding. Valuations at 1.3x FY22E P/BV and ~9% dividend yield are
attractive for a company with steady RoEs of ~17%.
Maintain Buy,
with DCF-based
TP of INR221/sh.
Story in charts
Exhibit 3: Regulations lend visibility to RoEs
Normative RoEs
Exhibit 4: Continued capitalization would drive S/A PAT
Reg. Equity and Adj.
PAT to grow at cagr
of ~7-8% over
FY20-22E
456
388
305
253
Reg. Equity
522
580
PAT
626
688
729
15.5%
14.0%
15.5%
15.5%
FY05-09
FY10-14
FY15-19
FY20-24
Source: MOSL, Company
Source: MOSL, Company
Exhibit 5: Order book has declined…
Order book (INR b)
1,440
Exhibit 6: …pace of S/A capitalization & capex could reduce
Capex
274
Capitalization
208
170
137
1,300
940
610
520
205
FY16
FY17
FY18
FY19
FY20
FY18
FY19
FY20
FY21E
FY22E
Source: MOSL, Company
Source: MOSL, Company
11 August 2020
4
 Motilal Oswal Financial Services
Power Grid
Exhibit 7: Free cash flow at group level to be strong…
Free Cash flow post interest (INR b)
109
62
32
15
40
114
Exhibit 8: …leading to potential for higher dividends
Dividend Per Share
Dividend Payout (%)
67.6
54.5
44.2
21.0
2.5
5.8
8.6
10.0
13.8
15.7
54.1
66.7
Source: MOSL, Company
Source: MOSL, Company
Exhibit 9: Stock trades well below its historical averages
P/B (x)
2.5
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.3
2.0
1.9
1.7
1.5
1.5
1.3
1.2
1.0
Source: MOSL, Bloomberg
11 August 2020
5
 Motilal Oswal Financial Services
Power Grid
Financials and valuations
Income statement
Y/E March
Net Sales
Change (%)
Expenditure
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT before EO
EO income (expense)
PBT after EO
Tax
Rate (%)
Reported PAT
Share of JVs and asso.
Adjusted PAT
Change (%)
2015
176,585
12.7
25,323
151,262
85.7
51,733
40,812
5,745
64,462
-421
64,041
13,579
21.2
50,463
50,883
10.9
2015
52,316
332,071
384,387
962,434
73,030
1,419,852
1,204,801
292,891
911,911
404,760
2,196
288,776
139,241
22,070
29,886
51,864
45,717
187,791
100,985
1,419,852
2016
206,521
17.0
23,940
182,581
88.4
61,818
50,862
4,663
74,563
0
74,563
16,129
21.6
58,434
58,434
14.8
2016
52,316
387,383
439,699
1,085,449
82,169
1,607,318
1,214,908
63,965
1,150,942
354,021
9,185
278,769
109,163
27,395
22,434
82,260
37,518
185,600
93,170
1,607,318
2017
257,039
24.5
30,467
226,572
88.1
77,223
62,036
5,838
93,153
0
93,153
20,063
21.5
73,090
1,418
74,507
27.5
2017
52,316
446,339
498,655
1,189,879
74,184
1,762,718
1,519,616
142,837
1,376,779
296,750
11,650
271,272
94,963
31,319
33,536
71,952
39,501
193,732
77,539
1,762,718
2018
299,415
16.5
36,296
263,119
87.9
92,310
73,241
4,891
102,459
0
102,459
21,955
21.4
80,504
1,479
86,513
16.1
2018
52,316
491,944
544,260
1,315,030
74,509
1,933,798
1,798,900
236,914
1,561,986
289,496
12,240
279,548
97,683
36,400
21,890
85,246
38,329
209,468
70,080
1,933,801
2019
325,323
8.7
48,386
276,937
85.1
105,410
87,366
6,022
90,184
0
90,184
-8,864
-9.8
99,047
1,288
100,335
16.0
2019
52,316
538,568
590,884
1,463,764
194,755
2,249,403
2,072,146
344,750
1,727,396
262,311
12,964
470,904
126,472
47,281
43,367
154,238
99,547
224,173
246,731
2,249,402
2020
394,269
21.2
48,033
346,236
87.8
116,070
95,090
9,274
144,350
0
144,350
35,308
24.5
109,043
1,551
110,594
10.2
2020
52,316
594,638
646,954
1,452,700
221,448
2,321,102
2,266,556
455,435
1,811,121
259,557
14,311
481,543
106,552
50,407
54,390
140,179
130,016
245,431
236,113
2,321,102
2021E
406,268
3.0
41,014
365,254
89.9
125,728
93,299
1,976
148,203
-10,750
137,453
28,750
20.9
108,703
1,420
120,873
9.3
2021E
52,316
632,375
684,691
1,389,040
221,448
2,295,179
2,502,615
581,163
1,921,452
107,959
14,311
492,834
74,604
62,941
83,614
142,776
128,899
241,377
251,457
2,295,179
(INR m)
2022E
435,132
7.1
43,358
391,774
90.0
134,718
95,837
-2,002
159,216
0
159,216
33,279
20.9
125,936
1,486
127,422
5.4
Balance sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Deferred Rev. & tax
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Other Assets
Inventory
Debtors
Cash & Bank Balance
Other Current Assets
Loans & Advances
Other Liabilities
Net Current Assets
Application of Funds
(INR m)
2022E
52,316
677,918
730,234
1,338,770
221,448
2,290,453
2,651,163
715,881
1,935,282
60,246
14,311
538,610
74,776
60,180
115,626
155,331
132,697
257,996
280,614
2,290,453
11 August 2020
6
 Motilal Oswal Financial Services
Power Grid
Financials and valuations
Ratios
Y/E Mar
EPS
Cash EPS
Book Value
DPS
Div.Payout (incl. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Current Liabilities (Days)
2015
9.73
19.6
73.5
2.0
25.2
14.9
7.4
11.2
2.0
1.4
13.9
6.2
8.4
46
108
145
2016
11.17
23.0
84.0
2.1
0.0
16.0
7.8
10.9
2.1
1.2
14.2
6.5
8.6
48
94
160
2017
14.24
29.0
95.3
2.5
21.0
12.5
6.2
9.2
1.9
1.4
15.9
7.2
8.9
44
70
142
2018
16.54
34.2
104.0
5.8
44.2
10.8
5.2
8.5
1.7
3.2
16.6
7.5
8.9
44
64
136
2019
19.18
39.3
112.9
8.6
54.5
9.3
4.5
8.5
1.6
4.8
17.7
9.3
10.6
53
84
149
2020
21.1
43.3
123.7
10.0
54.1
8.5
4.1
6.7
1.4
5.6
17.9
7.9
8.9
47
77
176
2021E
23.1
47.1
130.9
13.8
67.6
7.7
3.8
6.1
1.4
7.8
18.2
8.3
9.3
57
55
180
2022E
24.4
50.1
139.6
15.7
66.7
7.3
3.5
5.5
1.3
8.8
18.0
8.8
9.7
50
51
176
Cash flow statement
Y/E Mar
PBT before EO Items
Depreciation
Interest
Others
(Inc)/Dec in WC
Direct Taxes Paid
CF from Operations
(Inc)/Dec in FA
(Pur)/Sale of Investments
CF from Investments
Equity raised
Grants etc
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2015
64,041
51,733
40,812
-4,243
61,903
-11,519
202,728
-294,508
7,934
-286,574
0
0
115,070
-37,816
-13,266
63,988
-19,858
49,744
29,886
2016
75,597
61,818
50,862
-4,730
-19,310
-14,156
150,082
-216,795
1,030
-215,765
0
0
117,171
-47,584
-13,379
56,208
-9,475
31,909
22,434
2017
94,369
77,223
62,036
-3,264
4,495
-18,714
216,144
-239,244
495
-238,749
0
0
112,506
-57,000
-15,921
39,586
16,980
16,556
33,536
2018
103,938
92,310
73,241
-3,616
-16,181
-22,591
227,101
-261,799
4,784
-257,015
0
0
119,924
-70,480
-36,598
12,847
-17,067
38,957
21,890
2019
84,531
105,410
87,366
33,927
-54,619
-22,808
233,807
-224,507
36,137
-188,370
0
0
133,169
-102,924
-54,554
-24,308
21,129
22,237
43,367
2020
149,465
116,070
95,090
-28,805
4,271
-25,687
310,405
-113,671
3,249
-110,423
0
0
-17,317
-117,301
-53,440
-188,058
11,924
42,466
54,390
2021E
148,203
125,728
93,299
-1,976
13,880
-28,750
350,384
-84,461
3,396
-81,065
0
0
-63,660
-93,299
-72,385
-229,345
39,974
54,390
94,364
(INR m)
2022E
159,216
134,718
95,837
2,002
2,855
-33,279
361,349
-100,835
-517
-101,352
0
0
-50,269
-95,837
-81,879
-227,986
32,012
94,364
126,376
11 August 2020
7
 Motilal Oswal Financial Services
Power Grid
NOTES
11 August 2020
8
 Motilal Oswal Financial Services
Power Grid
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.
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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
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"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
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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
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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
11 August 2020
9
 Motilal Oswal Financial Services
Power Grid
********************************************************************************************************************************
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
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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.
11 August 2020
10