27 July 2019
1QFY20 Results Update | Sector: Automobiles
Maruti Suzuki
BSE SENSEX
36,050
S&P CNX
11,070
CMP: INR5,806
TP: INR6,950(+20%)
Buy
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In-line performance; demand outlook uncertain
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
MSIL IN
302
1753.7 / 25.4
9833 / 5685
-6/-16/-41
6369
43.8
2021E
947.6
126.6
84.9
287.9
26.8
1,711
16.4
22.4
20.2
3.4
Financials & Valuations (INR b)
Y/E MARCH
2019
2020E
Sales
860.2
844.3
EBITDA
108.0
97.0
Adj. PAT
73.6
66.7
Cons. Adj. EPS
(INR)
247.7
227.2
EPS Gr. (%)
-7.1
-8.3
BV/Sh. (INR)
1,527
1,598
RoE (%)
16.3
13.8
RoCE (%)
22.1
18.9
P/E (x)
23.4
25.6
P/BV (x)
3.8
3.6
Estimate change
TP change
Rating change
S/A Quarterly Performance
Y/E March
Volumes ('000 units)
Change (%)
Realn (INR '000/car)
Change (%)
Net op. revenues
Change (%)
RM Cost (% of sales)
Staff Cost (% of sales)
Other Cost (% of sales)
EBITDA
EBITDA Margins (%)
Depreciation
EBIT
EBIT Margins (%)
Non-Operating Income
PBT
Effective Tax Rate (%)
Adjusted PAT
Change (%)
In-line EBIT margin:
Net realization increased 7% YoY (+4.6% QoQ) to
~INR489.8k (our estimate: ~INR475k). Net sales were down ~12% YoY (-8%
QoQ) to ~INR197.2b (our estimate: ~INR191.3b) due to ~18% YoY volume
decline. EBIT margin shrank 5pp YoY (-110bp QoQ) to 5.7% (our estimate:
5.9%) owing to higher depreciation, although the impact of operating
deleverage was offset by lower RM cost and favorable FX. Higher other
income and lower tax restricted the PAT decline to ~27% YoY to ~INR14.4b
(our estimate: ~INR13.8b).
Earnings call highlights:
(a) Retails were down ~17% YoY, with the decline
similar in urban as well as rural. Inventory is over one month at dealer level.
(b) Demand environment is uncertain, making it difficult to provide
guidance. Inquiries have dropped, although efforts are being undertaken to
generate footfalls. (c) Average discounts at ~INR16.9k (v/s ~INR15.1k in
4QFY19/1QFY19). (d) Commodity cost benefit, favorable FX and cost
reduction contributed ~40bp in 1QFY20. (e) MSIL is not completely exiting
diesel – it is evaluating the 1.5ltr diesel engine. The focus is on CNG and
hybrids to offset the impact from diesel.
Valuation and view:
We cut our FY20/21 consol. EPS estimate by ~5% to
factor in our forecast of lower volumes and higher depreciation. Valuations
at 25.6x/20.2x FY20/21E consol. EPS are on downcycle earnings, where EPS
CAGR is estimated at just ~4% over FY17-21. While near-term demand
headwinds persist, MSIL is best placed in the entire OEM space to tackle
them, particularly with regard to BS6 transition due to limited price inflation
in ~80% of its portfolio. MSIL is likely to recover the fastest once current
headwinds recede due to its strong product portfolio, increased localization,
reducing FX exposure and capex-light business. Maintain
Buy.
(INR Million)
FY20
2QE
3Q
424.8 464.7
-12.4
8.4
487,369 489,806
6.3
6.7
207,035 227,588
-6.9
15.7
71.5
70.5
4.1
4.2
13.5
12.8
22,505 28,605
10.9
12.6
9,200 9,400
13,305 19,205
6.4
8.4
8,250 8,000
21,055 26,705
26.0
27.5
15,581 19,361
-25.8
30.0
FY19
1,862.4
4.7
461,867
3.0
860,203
7.8
70.0
3.8
13.6
107,993
12.6
30,189
77,804
9.0
25,610
104,656
28.3
73,573
-6.8
FY20E
1,730.4
-7.1
487,936
5.6
844,323
-1.8
71.0
4.2
13.4
97,040
11.5
36,709
60,330
7.1
32,368
90,698
26.5
66,663
-9.4
FY20E
Var
1QE (%)
402.6
0.0
-17.9
475,078
3.1
3.7
191,264
3.1
-14.8
70.5 100BP
4.3
0BP
15.0 -120BP
19,469
5.2
10.2
20BP
8,160
11,309
-0.2
5.9
8,000
19,099
28.0
13,751
4.4
-30.4
1Q
490.5
24.3
457,907
3.0
224,594
28.0
69.0
3.4
12.6
33,511
14.9
7,198
26,313
11.7
2,718
28,824
31.5
19,753
26.9
FY19
2Q
3Q
484.8
428.6
-1.5
-0.6
458,560 458,850
3.7
2.6
222,332 196,683
2.1
2.0
68.7
71.4
3.6
4.5
13.2
14.3
32,313 19,311
14.5
9.8
7,212
7,677
25,101 11,634
11.3
5.9
5,266
9,173
32,110 20,601
30.2
27.7
21,009 14,893
-15.4
-17.2
4Q
458.5
-0.7
468,057
2.1
214,594
1.4
71.9
3.8
13.8
22,634
10.5
8,102
14,532
6.8
8,677
23,121
22.3
17,956
-12.9
1Q
402.6
-17.9
489,819
7.0
197,198
-12.2
71.5
4.4
13.8
20,478
10.4
9,186
11,292
5.7
8,364
19,109
24.9
14,355
-27.3
4Q
438.4
-4.4
484,775
3.6
212,502
-1.0
70.6
4.0
13.5
25,452
12.0
8,923
16,528
7.8
7,754
23,829
27.1
17,366
-3.3
Jinesh Gandhi
(Jinesh@MotilalOswal.com); +91 22 6129 1524
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
Maruti Suzuki
Realizations dilute impact of volumes
Volumes declined 18% YoY (-12% QoQ) to 402.6k units in 1QFY20.
Net realizations grew 7% YoY (+4.6% QoQ) to ~INR489.8k (our estimate:
~INR475k).
Discounts increased by ~20bp QoQ (+20bp YoY) to ~INR16,941/unit (v/s
~INR15,100/unit in 1Q/4QFY19).
Net sales declined ~12% YoY (-8% QoQ) to ~INR197.2b (our estimate:
~INR191.3b)
Exhibit 1: MSIL’s segment-wise growth and market share movement
('000 units)
Mini
% of total
MPV+LCVs
% of total
Compact incl Dzire tour
% of total
Mid-size
% of total
UV
% of total
Exports
% of total
Total Sales
Total PV (Incl Exports) MS (%)
Total Dom. Car MS (%)
Total PV MS (%)
1QFY20
57.9
14.4
39.2
9.7
209.7
52.1
8.7
2.2
59.0
14.7
28.1
7.0
402.6
45.6
65.0
52.5
1QFY19
105.0
21.4
49.7
10.1
232.7
47.4
10.7
2.2
65.8
13.4
26.6
5.4
490.5
47.3
60.2
53.5
YoY(%)
-44.9
-21.0
-9.9
-18.8
-10.3
5.5
-17.9
-170bp
480bp
-100bp
4QFY19
75.0
16.4
53.6
11.7
220.7
48.1
9.7
2.1
69.8
15.2
29.6
6.5
458.5
45.5
57.9
50.9
QoQ(%)
-22.8
-26.9
-5.0
-10.2
-15.5
-5.1
-12.2
10bp
720bp
160bp
FY19
379.1
20.7
202.5
11.1
830.0
45.3
46.2
2.5
264
14.4
108.7
5.9
1,830.6
46.1
59.4
52.2
FY18
427.2
24.2
165.2
9.4
748.5
42.5
58.9
3.3
254
14.4
108.7
6.2
1,762.2
46.1
59.4
52.2
YoY(%)
-11.3
22.6
10.9
-21.6
4.1
0.0
3.9
0bp
0bp
0bp
Exhibit 2: Trend in volumes for MSIL
Volumes ('000 units)
Growth (%)
Exhibit 3: Domestic PV market share trend
FY15
FY16
FY17
FY18
FY19 FY20E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 4: Trend in realizations per unit
Realizations (INR '000/car)
Exhibit 5: Trend in average discounts per unit
Avg. discount ('000 INR/car)
Discounts (% of realns)
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q
FY15
FY16
FY17
FY18
FY19 FY20E
Source: Company, MOFSL
Source: Company, MOFSL
27 July 2019
2
 Motilal Oswal Financial Services
Maruti Suzuki
Benefit of discount and pricing diluted by other headwinds
EBITDA margin shrank ~450bp YoY (-10bp QoQ) to 10.4% (our estimate:
~10.2%). On a QoQ basis, margins were stable, as the impact of operating
deleverage was offset by lower RM cost and favourable FX.
EBIT margin at 5.7% (our estimate: 5.9%) shrank 6pp YoY (-110bp QoQ) due to
higher depreciation (most likely due to the Ind-AS 116 impact).
EBIT declined ~57% YoY (-22% QoQ) to ~INR11.3b (our estimate: ~INR11.3b).
Higher other income and lower tax restricted PAT decline to ~27% YoY to
~INR14.4b (our estimate: ~INR13.8b).
EBITDA (INR m)
EBITDA Margins (%)
Exhibit 6: Trend in EBITDA and EBITDA margins
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
FY15
FY16
FY17
FY18
FY19
FY20E
Source: Company, MOFSL
Earnings call highlights
Demand environment:
Uncertainty in the market makes it difficult to provide
guidance. Drop in footfalls and inquiries. Efforts are on to generate footfalls.
Fuel mix:
Petrol 66% for industry. For MSIL, it is 78% in 1QFY20 v/s 72% in
1QFY19.
BS6:
Alto, Baleno, Wagon-R, Swift and Dzire are BS6 compliant. Majority of the
model will be compliant by end-CY19.
Retails down by 17% YoY (in line with wholesale),
with the decline similar in
urban as well as rural. Inventory is marginally over one month at dealer level. 4-
5 days inventory with company.
Discounts: INR16,941/unit (+40bp QoQ).
Commodity cost benefit, favorable FX and cost reduction contributed ~40bp
YoY.
Also, cost increase due to BS6 & safety features were fully passed on,
which had mathematical impact on margin by 50bp.
Some more benefit on commodity and FX in 2QFY20.
Cost-reduction initiatives would continue to contribute in 2Q.
Diesel: Evaluating 1.5ltr diesel and not completely exiting diesel.
Fleet segment: CNG is doing well for MSIL. Also, petrol hybrid model will find
acceptance in fleet segment.
CNG contributes over 6% of total volumes. In market where CNG is available,
the actual share is much higher at 22%.
Rural:
39% of volumes in FY19. 17% decline in 1QFY20.
CAFE regulations require fuel efficiency improvement and simultaneous
reduction in CO2. It does not see a material cost increase in petrol due to CAFE
norms, although there will be a need for alternative fuels.
27 July 2019
3
 Motilal Oswal Financial Services
Maruti Suzuki
Exhibit 7: PV segment volume snapshot
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20
Domestic
Alto
Growth (%)
% of total
Swift
Growth (%)
% of total
Wagon-R
Growth (%)
% of total
Dzire
Growth (%)
% of total
Celerio
Growth (%)
% of total
Baleno
Growth (%)
% of total
Ciaz
Growth (%)
% of total
Ertiga
Growth (%)
% of total
Brezza
Growth (%)
% of total
Others
Growth (%)
% of total
Key Models
Growth (%)
% of total
52,207
-20.0
15.0
37,049
-30.0
10.6
40,516
2.4
11.6
45,784
-23.5
13.1
21,724
8.4
6.2
26,533
7.6
13,690
2.4
3.9
12,343
-17.7
3.5
21,698
6.2
50,796
28.0
14.6
68,513
4.0
16.6
43,707
-19.0
10.6
46,423
2.9
11.2
53,956
-12.2
13.0
21,307
-13.4
5.2
28,414
6.9
17,920
69.9
4.3
18,087
64.0
4.4
29,161
7.0
55,459
9.5
13.4
59,525
-11.7
15.4
43,743
-0.8
11.3
44,817
3.3
11.6
49,543
-17.6
12.8
26,313
21.6
6.8
31,297
31.1
8.1
15,504
8.9
4.0
16,457
-5.7
4.3
28,746
7.4
40,347
-20.6
10.4
61,390
-5.3
14.8
42,386
-3.8
10.2
40,590
-2.3
9.8
50,595
-4.2
12.2
28,017
32.5
6.8
34,560
66.0
8.4
17,334
7.8
4.2
16,640
-1.9
4.0
29,035
421.9
7.0
61,515
24.0
14.9
61,023
16.9
15.5
50,236
35.6
12.8
42,487
4.9
10.8
30,259
-33.9
7.7
20,942
-3.6
5.3
41,216
55.3
10.5
15,698
14.7
4.0
18,758
52.0
4.8
31,321
44.3
8.0
55,446
9.2
14.1
71,360
4.2
14.6
39,562
-9.5
8.1
44,857
-3.4
9.2
79,942
48.2
16.3
25,094
17.8
5.1
52,581
85.1
10.7
18,437
2.9
3.8
19,217
6.2
3.9
42,907
47.1
8.8
61,132
10.2
12.5
63,959
7.4
14.9
35,187
-19.6
8.2
38,881
-13.2
9.1
64,247
29.7
15.0
26,807
1.9
6.3
46,852
49.7
10.9
10,498
-32.3
2.4
13,739
-16.5
3.2
37,682
31.1
8.8
60,133
49.0
14.0
62,197
1.3
13.6
50,943
20.2
11.1
42,419
4.5
9.3
65,676
29.8
14.3
21,878
-21.9
4.8
49,831
44.2
10.9
14,280
-17.6
3.1
14,427
-13.3
3.2
36,552
25.9
8.0
64,804
5.3
14.2
61,193
0.3
12.6
60,155
19.7
12.4
43,846
3.2
9.0
74,765
147.1
15.4
26,361
25.9
5.4
57,660
39.9
11.9
10,719
-31.7
2.2
14,872
-20.7
3.1
37,160
18.6
7.7
72,236
30.3
14.9
67,327
-5.7
14.0
61,336
55.0
12.8
41,249
-8.0
8.6
68,933
-13.8
14.4
26,087
4.0
5.4
54,304
3.3
11.3
13,296
-27.9
2.8
12,205
-36.5
2.5
41,877
-2.4
8.7
63,220
3.4
13.2
65,944
3.1
15.6
51,196
45.5
12.1
24,506
-37.0
5.8
55,238
-14.0
13.1
26,631
-0.7
6.3
48,441
3.4
11.5
12,464
18.7
2.9
14,904
8.5
3.5
39,877
5.8
9.4
60,441
0.5
14.3
64,937
4.4
14.4
51,237
0.6
11.4
41,861
-1.3
9.3
54,923
-16.4
12.2
24,655
12.7
5.5
51,925
4.2
11.5
9,690
-32.1
2.1
23,282
61.4
5.2
38,966
6.6
8.6
59,907
-7.6
13.3
57,893
-5.4
12.1
49,145
-18.3
10.3
25,867
-41.0
5.4
64,476
-13.8
13.5
16,816
-36.2
3.5
46,220
-19.8
9.7
8,703
-18.8
1.8
24,518
64.9
5.1
29,437
-20.8
6.2
44,982
-37.7
9.4
3,22,340 3,82,947 3,56,292 3,82,062 3,67,386 4,55,089 3,97,985 4,23,007 4,58,967 4,49,834 3,99,642 4,21,383 3,68,057
5.4
18.5
3.9
14.6
14.0
18.8
11.7
10.7
24.9
-1.2
0.4
-0.4
-19.8
92.5
92.6
92.1
92.3
93.4
92.9
92.9
92.4
94.5
93.9
94.5
93.4
77.2
Source: SIAM, MOFSL
Valuation and view
A foreword on long-term view on PV industry:
Indian passenger vehicle industry
growth has undershot expectations over the past five years (FY13-18 – ~4% CAGR in
volumes) due to several factors, including weaker economic growth, poor monsoon
in FY15/16 and regulatory impact. We expect industry volumes to recover, driven by
high aspirations, improving affordability and low penetration (<30 cars per 1,000
population). We believe the PV industry would reach an inflection point at
USD3,000-4,000 PCI, driving strong sustainable demand for passenger vehicles.
Hence, we estimate PV industry volume CAGR of 8% over FY19-22 (on a low base of
~3% CAGR over FY17-19).
Multi-year favorable product lifecycle for MSIL:
We believe MSIL could emerge
as the biggest beneficiary as and when demand recovers, considering its
favorable product lifecycle and less dependence on diesel. The company’s new
launches targeted toward filling gaps in its portfolio are likely to improve its
27 July 2019
4
 Motilal Oswal Financial Services
Maruti Suzuki
overall product mix. Near-term demand outlook is weak, resulting in just ~3%
volume CAGR over FY19-21. This, coupled with an improvement in mix and a
reduction in discounts, would drive revenue CAGR of ~5% over FY19-21.
Operating performance to recover gradually:
While demand improvement will
take another 1-2 quarters, the operating performance should continue to
improve on a QoQ basis, with margins stabilizing around 12-13% levels by FY21.
This would be led by (a) normalization of product lifecycle (after no launches in
large part of CY18), (b) lower discounts led by higher share of new products, (c)
higher localization at Gujarat plant by 2HFY20, (d) reducing JPY exposure and (e)
operating leverage.
Strong margins, asset-light model to result in strong FCF generation and RoE
improvement:
The Gujarat plant arrangement with its parent Suzuki will make
MSIL’s business asset-light, allowing management to focus more on marketing.
We expect strong cumulative FCF generation of INR128b over FY19-21, after
budgeting for cumulative annual capex of ~INR130b. RoE is estimated to
improve gradually from 16.4% by FY21.
Structural improvement in business to support valuations:
All business
parameters such as industry consolidation, market share improvement, reduced
JPY exposure and improving share of premium products have improved MSIL’s
positioning considerably. We see headroom for further improvement in
dividend payout. Consequently, we expect financial parameters to exhibit
improvements over the next five years. In summary, the moat for MSIL is
expected to strengthen further, which should support premium over long-
period average valuations of 10-year average of ~21x (five-year average of
~25x).
Buy with TP of ~INR6,950:
We cut our FY20/21 consol. EPS estimate by ~5% to
factor in our forecast of lower volumes and higher depreciation. Valuations at
25.6x/20.2x FY20/21E consol. EPS are on downcycle earnings, where EPS CAGR
is estimated at just ~4% over FY17-21. While near-term demand headwinds
persist, MSIL is best placed in the entire OEM space to tackle them, particularly
with regard to BS6 transition due to limited price inflation in ~80% of its
portfolio. MSIL is likely to recover the fastest once current headwinds recede
due to its strong product portfolio, increased localization, reducing FX exposure
and capex-light business. Maintain
Buy
with a TP of ~INR6,950 (~23x Jun’21
consol. EPS, which is at ~15% premium to 10-year average P/E).
FY20E
Old
1,762
1,653
108
844
103
12.2
70.5
240.0
351.5
0.66
FY21E
Old
1,887
1,780
107
946
130
13.7
89.6
303.6
423.8
0.66
Exhibit 8: Revised forecast
(INR B)
Total Volumes ('000)
Domestic
Exports
Net Sales
EBITDA
EBITDA Margin (%)
PAT
Consol. EPS (INR)
Cash EPS (INR)
JPY/INR
Rev
1,730
1,622
108
844
97
11.5
66.7
227.2
348.7
0.66
Chg (%)
-1.8
-1.9
0.0
0.1
-5.5
-70bp
-5.5
-5.4
-0.8
0.0
Rev
1,857
1,750
107
948
127
13.4
84.9
287.9
425.9
0.66
Chg (%)
-1.6
-1.7
0.0
0.2
-2.4
-40bp
-5.3
-5.2
0.5
0.0
Source: Company, MOFSL
27 July 2019
5
 Motilal Oswal Financial Services
Maruti Suzuki
Exhibit 9: We arrive at target P/E of 23x based on two-stage dividend discount model
Payout ratio
Cost of Equity (k)
Growth (g)
No. of years (n)
Numerator
Denominator
Equation (Num/Den)
Derived PE (x)
High Growth stage
(Stage 1 - 10 yrs)
40.0%
12.8%
15.0%
10.0
-0.098
-0.022
4.5
22.7
Low Growth Stage
(Stage 2)
60.0%
12.3%
8.0%
2.622
0.142
18.3
Source: MOFSL
Exhibit 10: MSIL 1-year forward P/E (x) band
45.0
35.0
25.0
15.0
5.0
14.0
20.7
11.6
P/E (x)
Min (x)
Avg (x)
+1SD
38.8
27.4
22.1
Max (x)
-1SD
Exhibit 11: MSIL 1-year forward P/B (x) band
7.0
5.5
4.0
2.5
1.0
P/B (x)
Min (x)
Avg (x)
+1SD
6.5
4.6
3.4
2.1
1.6
3.5
Max (x)
-1SD
Source: MOFSL
Source: MOFSL
Exhibit 12: Comparative valuation
Auto OEM's
Bajaj Auto
Hero MotoCorp
TVS Motor
M&M
Maruti Suzuki
Tata Motors
Ashok Leyland
Eicher Motors
Escorts
Auto Ancillaries
Bharat Forge
Exide Industries
Amara Raja Batteries
BOSCH
Endurance Tech
Motherson Sumi
CEAT
CMP
(INR)
2,619
2,468
376
565
5,806
147
74
17,186
473
434
184
650
15,021
918
113
187
Rating
Neutral
Neutral
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
TP
(INR)
2,900
2,636
425
773
6,950
146
106
22,724
626
P/E (x)
FY19E FY20E
15.9
14.5
15.6
13.8
22.8
18.6
13.9
13.2
25.6
20.2
14.6
9.6
12.4
13.9
21.7
18.2
9.0
8.8
17.9
17.7
21.2
28.7
23.0
20.5
12.3
16.3
15.9
18.8
24.1
19.3
15.5
10.6
EV/EBITDA (x)
FY19E FY20E
10.7
9.0
8.9
7.6
11.2
9.3
10.2
9.9
14.3
10.9
3.7
3.2
5.9
6.7
17.3
14.6
-0.7
-0.8
10.2
9.6
10.4
19.4
9.7
7.2
7.6
9.5
8.7
9.2
15.6
8.3
5.1
6.0
RoE (%)
FY19E FY20E
20.9
20.7
23.7
24.6
21.6
22.4
12.0
11.3
13.8
16.4
5.6
7.9
20.4
17.3
22.4
22.7
16.2
14.4
19.6
13.5
14.9
18.2
20.3
15.2
12.6
18.8
13.7
15.1
21.8
21.0
18.7
12.8
Div Yield (%) EPS CAGR (%)
FY19E FY20E
FY18-20E
2.5
2.7
4.5
3.6
3.8
2.6
1.0
1.1
19.6
1.8
1.8
0.0
2.2
2.4
7.8
0.2
0.2
LTP
4.6
4.6
-12.2
0.7
0.7
7.6
0.6
0.7
0.4
1.4
1.7
1.2
1.2
1.1
1.3
0.0
1.4
1.7
1.3
1.4
1.3
1.7
0.0
9.6
13.3
10.4
7.4
14.6
19.6
10.0
Source: MOFSL
Buy
556
Buy
269
Buy
715
Neutral 17,214
Buy
1,329
Buy
150
Buy
262
27 July 2019
6
 Motilal Oswal Financial Services
Maruti Suzuki
Story in charts: Expect 7% EPS CAGR over FY19-21
Exhibit 13: Market share gains continues in most segments
FY14
Mini
Compact
Mid-Size
UV1
Dom. PV
76.7
37.6
2.2
21.1
42.1
FY15
81.4
43.1
53.7
15.4
21.4
45.0
FY16
79.8
42.0
58.1
25.2
25.6
46.8
FY17
67.8
46.2
54.8
32.8
38.2
47.4
FY18
71.3
52.2
61.8
30.0
38.8
50.0
FY19
72.3
56.4
57.9
25.8
38.2
51.2
3.3
(1.4)
(7.1)
Exhibit 14: Trend in volumes and growth over FY19-21
Total volumes ('000 units)
11.9
10.6
9.8
13.4
4.7
7.3
Growth (%)
Compact-Sedan 63.8
Source: Company, MOFSL
FY13
FY14
FY15
FY16
FY17
FY18
FY19 FY20E FY21E
Source: Company, MOFSL
Exhibit 15: MSIL to operate at peak utilization
Capacity ('000 units)
95
104
84
109
102
90 93
86
Cap. Util (%) - RHS
95 98 94 95
Exhibit 16: Trend in product mix
Upto 400k
Price 600-800k
2
11
22
65
1
23
23
52
0
24
24
52
3
23
26
47
6
26
23
44
6
34
20
40
Price 400-600k
Price 800k and above
6
40
17
36
5
41
20
35
4
40
19
36
7
36
18
40
76
78 77
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 17: INR-based royalty to reduce gradually
Royalty in JPY(% of sales)
Royalty in INR(% of sales)
0.5
0.8
2.2
Exhibit 18: Discounts to increase momentarily in FY19
Discounts (INR/Car)
4.0
3.3
3.8
4.5
3.2
5.0
as a % of Realizations
4.7
3.9
3.5
3.9
3.3 3.3
3.4
5.1
5.6
5.7
5.3
5.6
5.2
4.5
3.3
2.2
Source: Company, MOFSL
Source: Company, MOFSL
27 July 2019
7
 Motilal Oswal Financial Services
Maruti Suzuki
Exhibit 19: Fixed cost as % of sales
Fixed Cost as % Sales
Exhibit 20: EBITDA margins and EBITDA per car
EBITDA (INR '000/car)
13.4
EBITDA Margins (%)
12.6 11.5 13.4
15.4 15.2 15.4
7.1
22
9.7
11.8
36
45
52
62
66
69
58
56
68
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 21: EPS (INR) and growth in EPS
EPS
Growth (%) - RHS
Exhibit 22: Dividend payout (%) and cash balance (INR b)
Cash (INR b)
Dividend Payout (%) 68.1
37.1 37.6 38.7
15.4 11.7 15.2
24.5 23.7
59.9
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 23: FCF to remain strong (INR b)
FCF conversion (FCF as % of PAT)
8.3
8.7
8.0
6.3
Capex (% of sales)
Exhibit 24: RoE v/s RoIC (%)
ROE
ROIC
60
84
65
47
73
4.6
109
5.0
94
4.5
104
5.3
4.7
4.7
14
70
11
18
13
19
13
27
40
24
-25
51
85
74
26
15
18
20
18
16
14
16
Source: Company, MOFSL
Source: Company, MOFSL
27 July 2019
8
 Motilal Oswal Financial Services
Maruti Suzuki
Exhibit 25: Snapshot of revenue model
000 units
A1/LCVs
Growth (%)
% of Dom vols
MPV (Vans)
Growth (%)
% of Dom vols
A2 (other hatchbacks)
Growth (%)
% of Dom vols
A3 (Dzire, Ciaz)
Growth (%)
% of Dom vols
Uvs (Ertiga, Compact SUV)
Growth (%)
% of Dom vols
Total Domestic
Growth (%)
% of Total vols
Exports
Growth (%)
% of Total vols
Total Volumes
Growth (%)
ASP (INR 000/unit)
Growth (%)
Net Sales (INR b)
1.6
102
-7.6
9.7
672
0.7
63.8
202
14.4
19.1
61
-22.8
5.8
1,054
0.2
91.2
101
-16
9
1,155
-1.4
379
1.9
438
0.0
129
26.3
11.0
730
8.6
62.3
244
20.9
20.8
68
11.6
5.8
1,171
11.1
90.6
122
20
9
1,292
11.9
387
2.0
500
0.0
143
11.2
11.0
779
6.8
59.7
288
18.3
22.1
94
38.4
7.2
1,305
11.5
91.3
124
2
9
1,429
10.6
403
4.1
575
0.1
152
6.0
10.5
832
6.7
57.6
264
-8.4
18.3
196
107.3
13.6
1,445
10.7
92.1
124
0
8
1,569
9.8
434
7.7
680
0.6
155
2.1
9.4
936
12.5
56.6
299
13.1
18.1
254
29.6
15.3
1,654
14.5
92.9
126
2
7
1,780
13.4
448
3.3
798
FY14
17
FY15
0
FY16
0
FY17
1
FY18
10
FY19
24
138.0
1.4
179
15.1
10.2
987
5.5
56.3
300
0.3
17.1
264
4.1
15.1
1,754
6.1
94.2
109
-14
6
1,862
4.7
462
3.0
860
FY20E
23
-2.5
1.4
139
-22.1
8.6
948
-4.0
58.4
269
-10.5
16.6
243
-7.9
15.0
1,622
-7.5
93.7
108
0
6
1,730
-7.1
488
5.6
844
FY21E
16
-30.0
0.9
151
8.9
8.7
1,026
8.3
58.6
260
-3.3
14.8
297
21.9
16.9
1,750
7.9
94.2
107
-1
6
1,857
7.3
510
4.6
948
Source: MOFSL, Company
27 July 2019
9
 Motilal Oswal Financial Services
Maruti Suzuki
Financials and valuations
Income Statement
Y/E March
Net Op Income
EBITDA
EBITDA Margins (%)
Depreciation
EBIT
EBIT Margins (%)
Interest
Other Income
EO Expense
PBT
Tax
Effective tax Rate (%)
PAT
Change (%)
% of Net Sales
Adj. PAT
Change (%)
2015
499,706
67,129
13.4
24,703
42,426
8.5
2,060
8,316
0
48,682
11,570
23.8
37,112
33.4
7.6
37,112
33.4
2016
575,381
88,844
15.4
28,202
60,642
10.5
815
14,610
0
74,437
20,794
27.9
53,643
44.5
9.5
53,643
44.5
2017
680,348
103,517
15.2
26,021
77,496
11.4
894
23,001
0
99,603
26,101
26.2
73,502
37.0
11.0
73,502
37.0
2018
797,627
123,122
15.4
27,579
95,543
12.0
3,457
20,455
2,507
110,034
32,816
29.8
77,218
5.1
9.9
78,977
7.4
2019
860,203
107,993
12.6
30,189
77,804
9.0
758
25,610
-2,000
104,656
29,650
28.3
75,006
-2.9
9.0
73,573
-6.8
2020E
844,323
97,040
11.5
36,709
60,330
7.1
2,000
32,368
0
90,698
24,035
26.5
66,663
-11.1
8.3
66,663
-9.4
(INR Million)
2021E
947,559
126,555
13.4
41,677
84,878
9.0
2,000
32,594
0
115,472
30,600
26.5
84,872
27.3
9.4
84,872
27.3
Balance Sheet
Y/E March
Sources of Funds
Share Capital
Reserves
Net Worth
Loans
Deferred Tax Liability
Capital Employed
Application of Funds
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr.Assets, Loans
Inventory
Sundry Debtors
Cash & Bank Balances
Loans & Advances
Others
Current Liab. & Prov.
Sundry Creditors
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
2015
1,510
252,709
254,219
1,802
884
256,905
2016
1,510
297,332
298,842
774
1,943
301,559
2017
1,510
362,801
364,311
4,836
4,662
373,809
2018
1,510
416,063
417,573
1,108
5,589
424,270
2019
1,510
459,905
461,415
1,496
5,640
468,551
2020E
1,510
481,180
482,691
1,496
5,640
489,827
(INR Million)
2021E
1,510
515,218
516,729
1,496
5,640
523,865
147,111
26,989
120,122
18,169
139,514
74,809
26,859
11,157
183
2,639
33,971
95,709
84,106
11,603
-20,900
256,905
153,218
28,118
125,100
10,069
199,322
84,909
31,321
13,222
391
1,744
38,231
117,841
105,748
12,093
-32,932
301,559
186,595
53,668
132,927
12,523
284,810
77,392
32,622
11,992
138
978
31,662
133,843
126,001
7,842
-56,451
373,809
214,239
80,649
133,590
21,259
352,902
81,841
31,608
14,618
711
2,878
32,026
165,322
155,025
10,297
-83,481
424,270
264,916
110,838
154,078
16,001
365,150
89,815
33,257
23,104
1,789
5,126
26,539
156,493
147,399
9,094
-66,678
468,551
310,917
147,547
163,370
10,000
365,150
121,035
37,011
16,192
36,166
5,126
26,539
169,728
159,790
9,938
-48,693
489,827
355,917
189,224
166,693
10,000
365,150
166,802
41,537
18,172
75,428
5,126
26,539
184,780
173,083
11,697
-17,978
523,865
27 July 2019
10
 Motilal Oswal Financial Services
Maruti Suzuki
Financials and valuations
Ratios
Y/E March
Basic (INR)
Adjusted EPS
Consol EPS
Cash EPS
Book Value per Share
DPS
Div. payout (%)
Valuation (x)
Consol. P/E
Cash P/E
EV/EBITDA
EV/Sales
P/BV
Dividend Yield (%)
FCF Yield (%)
Profitability Ratios (%)
RoIC
RoE
RoCE
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Work. Cap. (Days)
Asset Turnover (x)
2015
122.9
126.0
207.8
842
25.0
24.5
46.1
27.9
24.1
3.3
6.9
0.4
1.8
26.7
14.6
19.8
8
23
88
-57
1.9
2016
177.6
182.0
275.3
989
35.0
23.7
31.9
21.1
17.5
2.8
5.9
0.6
3.3
39.9
18.0
25.0
8
23
100
-69
1.9
2017
243.3
248.6
334.8
1,206
75.0
37.1
23.3
17.3
14.2
2.2
4.8
1.3
3.9
60.0
20.2
26.9
6
21
98
-72
1.8
2018
261.4
266.7
358.0
1,382
80.0
37.6
21.8
16.2
11.4
1.8
4.2
1.4
4.7
84.1
18.5
27.3
7
17
103
-79
1.9
2019
243.6
247.7
347.6
1,527
80.0
38.7
23.4
16.7
12.9
1.7
3.8
1.4
1.1
64.7
16.3
22.1
10
16
89
-63
1.8
2020E
220.7
227.2
348.7
1,598
125.0
68.1
25.6
16.7
14.0
1.7
3.6
2.2
2.8
46.6
13.8
18.9
7
18
97
-72
1.7
2021E
281.0
287.9
425.9
1,711
140.0
59.9
20.2
13.6
10.4
1.5
3.4
2.4
3.4
72.6
16.4
22.4
7
18
95
-69
1.8
Cash Flow Statement
Y/E March
Profit before Tax
Interest
Depreciation
Direct Taxes Paid
(Inc)/Dec in WC
Other Items
CF from Oper.Activity
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Invest.
CF from Inv. Activity
Change in Networth
Inc/(Dec) in Debt
Interest Paid
Dividends Paid
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Op. Balance
Closing Balance
E: MOSL Estimates
2015
48,682
2,060
24,703
-10,407
7,457
-9,288
63,207
-31,487
31,720
-12,613
-44,100
0
-13,282
-2,098
-4,241
-19,621
-514
697
183
2016
74,437
815
28,202
-19,099
14,631
-14,141
84,845
-26,327
58,518
-45,947
-72,274
0
-2,353
-921
-9,090
-12,364
207
183
390
2017
99,603
894
26,021
-23,214
21,940
-22,451
102,793
-33,723
69,070
-58,056
-91,779
0
2,527
-1,095
-12,725
-11,293
-279
391
112
2018
110,034
3,457
27,579
-30,550
28,058
-20,728
117,850
-35,653
82,197
-47,168
-82,821
0
-3,728
-3,464
-27,268
-34,460
569
138
707
2019
104,656
758
30,189
-29,599
-15,725
-25,610
64,669
-45,419
19,250
13,362
-32,057
-2,116
388
-758
-29,048
-31,534
1,078
711
1,789
2020E
90,698
2,000
36,709
-24,035
16,392
-32,368
89,397
-40,000
49,397
32,368
-7,632
0
0
-2,000
-45,388
-47,388
34,377
1,789
36,166
(INR Million)
2021E
115,472
2,000
41,677
-30,600
8,547
-32,594
104,502
-45,000
59,502
32,594
-12,406
0
0
-2,000
-50,834
-52,834
39,262
36,166
75,428
27 July 2019
11
 Motilal Oswal Financial Services
Maruti Suzuki
Corporate profile
Company description
Maruti Suzuki is the largest passenger vehicle
manufacturer in India. It dominates the domestic
passenger vehicle with ~51% market share and
most of the sub segments of Indian passenger
vehicle industry. Extensive reach and product
portfolio help MSIL outperform industry.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Jun-19
Promoter
DII
FII
Others
56.2
13.5
23.2
7.2
Mar-19
56.2
13.4
22.3
8.1
Jun-18
56.2
12.7
23.7
7.4
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Lic Of India Pension Plus Balanced Fund
Europacific Growth Fund
Government Of Singapore
% Holding
6.8
1.1
1.1
Note: FII Includes depository receipts
Source: Capitaline
Exhibit 4: Top management
Name
R C Bhargava
Kenichi Ayukawa
Sanjeev Grover
Designation
Chairman
Managing Director & CEO
Company Secretary
Exhibit 5: Directors
Name
K Ayabe
Kinji Saito
O Suzuki
Toshiaki Hasuike
Name
Kazunari Yamaguchi
D S Brar
Pallavi Shroff
R P Singh
R S Karnad
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells LLP
R J Goel & Co
RMG & Associates
Type
Statutory
Cost Auditor
Secretarial Audit
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY20
FY21
MOSL
forecast
227.2
287.9
Consensus
forecast
252.2
290.7
Variation (%)
-9.9
-1.0
Source: Bloomberg
Source: Capitaline
27 July 2019
12
 Motilal Oswal Financial Services
Maruti Suzuki
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
-
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details of associate entities of Motilal Oswal Financial Services Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First
Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising
from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
"accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be
such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
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 Motilal Oswal Financial Services
Maruti Suzuki
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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.
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