Motilal Oswal Financial Services

Thematic | April 2020

Strategy

Refer our earlier reports

on Ind-AS

Accounting impact of COVID-19 situation

Effect widespread across sectors

◼

The COVID-19 situation has significantly impacted economies and their financial

markets globally. As Indian companies approach the financial year end, it is important

to evaluate the impact of this situation on

companies’

financial reporting.

Our discussions with various accounting experts indicate the level of impact will

depend on the industry under which the company operates as well as company-

specific exposure to financial instruments/transactions.

On the accounting front, this would not only impact key financial statements (income

statement and balance sheet) but could also raise questions on the going-concern

assumptions of some entities.

The outbreak, followed by lockdown, would not only have an immediate impact due

to reduced activity levels but also potentially change various accounting estimates

(leading to an increase in write-offs, expected credit loss/provisioning, the fair

valuation assessment of various assets and liabilities, and revenue recognition, among

others).

Furthermore, this could result in various contracts

–

such as those pertaining to lease

accounting, revenue recognition, and onerous provisioning

–

being changed (in some

cases due to the invocation of force majeure clauses). Some sectors may even witness

a plunge in the selling price of certain goods or their obsolescence leading to inventory

loss.

We believe that some companies may, however, consider these situations to be

transitory and choose not to make any significant changes in their long-term

estimates. Nevertheless, the companies will be required to make more robust

disclosures on estimates/judgments used in preparing the financial statements.

This is likely to have a significant impact on financials, automobile, retail,

commodities, hotels, media, aviation, capital goods and infrastructure sector, among

others.

Automobile, hotels, retail, commodities may witness asset impairment

Companies in significantly impacted sectors such as automobiles, hotels, retail,

metals, and oil & gas (upstream companies) may see disruptions due to lower

demand and realizations. These factors may act as indicators that could trigger the

impairment test for their non-current assets; on the other hand, goodwill and

intangible assets with infinite life (as required by Ind-AS) would continue to have

their annual impairment check, albeit with more stringent parameters.

ECL provisioning could impact financials, capital goods, automobile, IT

Financial instruments (covered under Ind-AS 109) such as loans, trade and other

receivables, investments in debt instruments, financial guarantees, and loan

commitments are subject to impairment loss, measured as per expected credit loss

approach in the income statement. Sectors such as financials (NBFC), capital goods,

autos (for their captive financing book), and IT are exposed (primarily in

loans/receivables) to sectors/companies that may be affected by the COVID-19

situation. Banks (yet to migrate to Ind-AS) are likely to witness an increase in NPA

provisioning as per the

RBI’s prudential guidelines.

Sandeep Ashok Gupta

–

Research Analyst

(S.Gupta@MotilalOswal.com); +91 22 6129 1551

Umesh Jain

–

Research Analyst

(Umesh.Jain@MotilalOswal.com); +91 22 7193 4221

April 2019

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.

Thematic | Strategy

Commodity, retail may witness inventory loss

The COVID-19 situation has resulted in the reduced movement of inventory,

obsolescence, and reduction in the value of selling price. Ind-AS requires inventory

to be valued at lower of cost or net realizable values. This may result in a write-

down in inventory valuations, primarily in the commodity and retail sectors.

Lease changes may impact aviation, retail, media, hotels

Due to COVID-19, changes may be observed in the terms of lease arrangements, or

lessors may give some concessions to lessees in lease payments or in the form of

rent holidays. Such revised terms or concessions shall be considered when

accounting for leases, which may lead to the application of accounting pertaining to

lease modification. Lessees may also need to evaluate the impairment in right to use

of asset. This is likely to have an impact on the aviation, retail, media and hotels

sectors.

Hedges in IT, auto, capital goods, FMCG, telecom, oil & gas may turn

ineffective

Companies following hedge accounting may need to reassess the effectiveness of

cash flow hedges (availed to hedge probable transactions). If these hedge

transactions are no longer effective, companies will be required to recognise MTM

gains/losses (including those accumulated in reserves) to the income statement.

This may primarily impact companies in the IT, automobile, capital goods, FMCG,

and telecom sectors.

Capital goods and IT revenue/provisioning may be impacted

Companies in the capital goods and IT sectors, which recognize revenues on the

basis of long-term contracts, may need to assess the enforceability of existing or

new contracts (including renegotiations/modifications). Furthermore, they may

need to evaluate provisioning, if any, required for onerous contracts.

Fair valuation assessment / Deferred tax impact to be seen across sectors

Ind-AS requires financial assets/liabilities to be fair valued at each reporting period

and corresponding gains/losses to be provided through the income statement/OCI,

as per their classification. Also, DTA/DTL recognised by companies may be impacted

due to a change in the estimates of future profit/impairment of assets. These

changes are likely to impact companies across sectors.

April 2020

Thematic | Strategy

SECTORIAL HEAT MAP

–

ACCOUNTING IMPACT ON SECTORS DUE TO COVID-19 SITUATION

Sector

NBFC

Oil & Gas

Aviation

Hotels

FMCG

Automobiles

Infrastructure / Capital Goods

Telecom

Retail

Media

Pharmaceuticals

Cement

Metals & Mining

✓

✓#

✓

✓*

✓

Revenue

recognition

Impairment of

goodwill and

non-current

assets

Onerous

contract

provisioning

Inventory

valuation

ECL

✓

Fair value

assessment

✓

Lease

accounting

Hedge

accounting

DTA/DTL

✓

Note: 1. *Oil & gas upstream business could be impacted due to COVID-19

2. # Credit loss expected in captive finance business of auto companies

3. Banks would continue to follow RBI/I-GAAP guidelines and are expected to report higher NPA provisioning on loans and advances, fair value assessment of investment books, and

DTA/DTL.

Source: MOFSL

April 2020

Thematic | Strategy

COVID-19 to materially impact financial statements

Going-concern assumptions need to be revaluated for some entities

Financial statements are normally prepared on the assumption that an entity is

a going concern and would continue to operate in the foreseeable future. In

assessing whether the going-concern assumption is appropriate, management

considers all available information regarding the future, which is at least, but

not limited to, twelve months from the end of the reporting period.



A company needs to assess the impact of COVID-19 and the measures

undertaken on its ability to continue as a going concern. The impact of COVID-

19 after the reporting date should also be considered, and if, after the reporting

date, management either intends to liquidate the entity or cease trading, or has

no realistic alternative but to do so, financial statements should not be prepared

on a going-concern basis.



Necessary disclosures as per Ind-AS 1 shall also be made, such as material

uncertainties that might cast significant doubt upon an entity's ability to

continue as a going concern.



Lockdown could trigger impairment of goodwill and non-current assets

Ind-AS 36 requires all companies to assess for impairment of the carrying value

of non-current assets (except goodwill and intangibles with an indefinite life)

whenever there is a potential indication due to external or internal criteria. On

the other hand, goodwill and intangible assets with infinite life are subject to

annual impairment tests.



The COVID-19 situation may result in temporary shutdown in operations or an

immediate drop in demand or prices, resulting in decline in revenues and

profitability as well as economic activity. These are factors companies may

consider as indicators that impairment testing is required.



Depending on specific facts and circumstances, companies would need to

consider providing detailed disclosures on the assumptions and sensitivities

considered related to the effects of COVID-19.



Rising ECL provisioning on exposure to materially impacted sectors

Financial instruments within the scope of Ind-AS 109, such as loans, trade

receivables, other receivables, and investments in debt instruments are not

measured at fair value through profit or loss and are subject to impairment loss

recognition and measurement based on an approach called Expected Credit Loss

(ECL).



Widespread contraction in economic activity across the globe due to the rapid

spread of COVID-19 is likely to impact the quantification of ECL and classification

of financial assets into three buckets for the recognition and measurement of

impairment loss. Recognition of 12-month ECL v/s Lifetime ECL is based on the

segregation of credit exposure into three buckets: a) Stage 1 comprises those

with no significant increase in credit risk, b) Stage 2 includes those with

significant increase in credit risk, and c) Stage 3 consists of the credit impaired.

In the case of certain financial assets, such as trade receivables, where the



April 2020

Thematic | Strategy

simplified approach is applicable, this segregation of credit exposures into three

buckets is not required.



Measurement of ECL: Adverse impact on the business of borrowers or debtors

may affect the following credit risk parameters:

➢

Risk of default (probability of default), i.e., the likelihood of default by the

borrower may have increased significantly due to reduced economic

activity.

➢

Another parameter is the estimated amount of loss itself in the event of a

default (loss-given default). Contraction in economic activity and its impact

on consumers may have affected the value of collaterals and business cash

flows, thus adversely affecting the expected amount of loss.

➢

In this period of substantial business dislocation, borrowers may tend to

fully utilize undrawn limits and loan commitments, which in turn would

impact another credit risk parameter, i.e., exposure at default.



With regard to banks and insurance entities, preparers need to consider the

impact of COVID-19 on the classification of loans and advances into the

Standard, Substandard, Doubtful, and Loss categories, in addition to the

Prudential Regulatory requirements of the RBI and Insurance Regulatory and

Development Authority of India (IRDAI).

Inventory losses due to obsolescence or lower NRV

In accordance with Ind-AS 2

–

Inventories, it may be necessary for companies to

write down inventories to net realizable value (NRV) due to reduced movement

of inventory, decline in selling prices, or inventory obsolescence on account of

lower-than-expected sales. This, in our view, is likely to have a material impact

on the commodity and retail sectors.



Furthermore, it is unlikely that normal production capacity would be reviewed

for allocating fixed production overheads for FY20 due to the adverse impact on

utilization of production capacity due to the effects of COVID-19 on the overall

economy or segments in which the entity operates. Hence, fixed overheads (due

to capacity underutilization) need to be expensed and not capitalized (to

inventory).



Need to reassess lease accounting due to modification in lease terms

The COVID-19 situation may result in changes being made to lease

arrangements or lessors giving some concession to the lessees in lease

payments or in the form of rent holidays. Such revised terms or concessions

shall be considered when accounting for leases, which may lead to the

application of accounting pertaining to lease modification.



Lessors should evaluate asset value impairment due to decline in demand for

assets and/or steep decline in rentals. Lessees, on the other hand, would need

to evaluate the impairment in right to use of asset.



April 2020

Thematic | Strategy

Hedge accounting

Ind-AS 109 has elaborate requirements on the application of hedge accounting,

an accounting choice for entities. Requirements include the qualifying criteria

for hedge accounting, how to assess the hedge effectiveness, and accounting for

its impact in financial statements.



The standard permits a highly probable forecast transaction to be a qualifying

hedged item. If a company has adopted cashflow hedge accounting for certain

forecast transactions, it should assess whether the transaction still qualifies as a

highly probable forecast transaction considering the business environment.



The company would need to assess any hedge ineffectiveness and record its

impact in profit and loss.



Fair value assessment to change due to changing market conditions

Ind-AS requires certain financial assets/liabilities to be recognized on the basis

of the fair value on the measurement date, with gains/losses on the fair

valuation to be recognized in the income statement / other comprehensive

income (OCI), as per the categorization.



Ind-AS recognizes that there are different methods of determining fair values:

on the basis of their quoted active values (Level 1) or by applying various

valuation techniques (Level 2 and Level 3). The spread of COVID-19 has led to a

significant increase in volatility, decrease in the value of financial instruments,

and decline in volumes or levels of activity. This may require adequate judgment

to determine whether the quoted price is based on transactions in an orderly

market. It may not always be appropriate to conclude that all transactions in

such a market are not orderly.



Also, to determine the value of assets/liabilities using valuation techniques

(Level 2/3), various assumptions, such as discount rates and credit spread /

counter-party credit risk, need to be reassessed considering the impact of

COVID-19.



Revenue recognition assessment based on enforceability of customer

contract

The COVID-19 situation may lead to changes in the pattern of revenue

recognition by companies. Companies recognizing revenues on the basis of long-

term contacts may need to assess the enforceability of existing or new

contracts, including the renegotiations/modifications.



Certain companies may witness an increase in sales return, price discounts, and

decrease in volume discounts, which would need to be provided for.



Provisions and disclosures of onerous contracts

Onerous contracts are those for which unavoidable costs of meeting obligations

under the contract exceed the economic benefits expected to be received under

it.



As a result of the COVID-19 situation, some contracts may become onerous for

reasons such as increase in cost of material/labor. A company should consider

whether any of its contracts have become onerous and provide adequate

disclosure on the judgment and estimates applied in recognizing and measuring

the provisions.



April 2020

Thematic | Strategy

Deferred tax asset and liability need to be reassessed

COVID-19 could affect future profit estimates. Thus, companies with deferred

tax assets should reassess forecast profits and the recoverability of deferred tax

assets in accordance with Ind-AS 12

–

Income Taxes, considering the additional

uncertainty arising from the event.



Management may also consider whether the impact of COVID-19 affects its

plans to distribute profits from subsidiaries and whether it needs to reconsider

the recognition of any deferred tax liability in connection with undistributed

profits and any changes arising in deferred tax liabilities due to asset

impairment. Also, deferred tax liability recognized with regard to any asset

impaired needs to be adjusted for.



Management should disclose any significant judgments and estimates made in

assessing the recoverability of deferred tax assets in accordance with Ind-AS 1.



Insurance claims to be recognized based on certainty



Companies that have availed insurance covers to protect against loss of profit

due to disruptions such as COVID-19 can recognize the claims only when there is

a virtual certainty of recoverability (i.e., the claims have been accepted by

insurance companies for payment).

Disclosures to be more robust in annual financial reporting

The annual disclosure requirements of companies are likely to be more robust

due to the COVID-19 situation. They are likely to cover a more detailed

discussion on risk associated with the outbreak/lockdown and the expected

impact (if significant) on the company.



Disclosures would include the identification of key assumptions about the

impact of COVID-19 on material estimates and sources of estimation uncertainty

that could lead to material adjustments in the carrying value of assets/liabilities.



More disclosures are likely on any changes to a

company’s credit, liquidity,

currency, and other price risk as well as its policy and processes to manage this

situation.



April 2020

Thematic | Strategy

Investment Rating

BUY

SELL

NEUTRAL

UNDER REVIEW

NOT RATED

Expected return (over 12-month)

>=15%

< - 10%

> - 10 % to 15%

Rating may undergo a change

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In

case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30 days take appropriate measures to make the recommendation

consistent with the investment rating legend.

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services,

Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of

which are available on

www.motilaloswal.com.

MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd. (NSE)

and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited

(CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as

Corporate Agent for insurance products. Details of associate entities of Motilal Oswal Financial Services Limited are available on the website at

http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf

Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

MOFSL, it’s associates, Research Analyst or their relative may have any financial interest in the

subject company. MOFSL and/or its associates and/or Research Analyst may have actual/beneficial ownership of 1% or more securities in the subject company in

the past 12 months.

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies

mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to

such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the

analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

Research

Analyst may have served as director/officer, etc. in the subject company in the past 12 months. MOFSL and/or its associates may have received any compensation from the subject company in the past 12 months.

In the past 12 months , MOFSL or any of its associates may have:

managed or co-managed public offering of securities from subject company of this research report,

received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,

received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.

Subject Company may have been a client of MOFSL or its associates in the past 12 months.

MOFSL and it’s associates have not received any compensation or other benefits from the subject

company or third party in connection with the research report. To enhance transparency, MOFSL has incorporated a Disclosure of Interest Statement in this

document. This should, however, not be treated as endorsement of the views expressed in the report. MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients

of this report should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service

transactions. Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for

other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures. Above disclosures include beneficial holdings lying in demat account of MOFSL which are

opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income

from clients which are not considered in above disclosures.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to, copied or distributed, in part or in

whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not

recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its

accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for

securities or other financial instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific

recommendations and views expressed by research analyst(s) in this report.

Disclosures:

Disclosure of Interest Statement

Analyst ownership of the stock

Companies where there is interest

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary trading desk of MOFSL or its

associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL

research activity and therefore it can have an independent view with regards to subject company for which Research Team have expressed their

views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL & its

group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to the Securities and

Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal

Financial Services Limited(SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong)

Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which

this document relates is only available

to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these

securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian

Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S:

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOFSL is not a registered

investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the

Acts, any brokerage and investment services provided by MOFSL, including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as defined by

Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment

activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934,

as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S.

registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD

rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

For Singapore:

In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z)

which is a holder of a capital markets services license and an exempt financial adviser in Singapore,

as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in

Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify

as “Institutional Investors”, of which some of whom may consist of

"accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore

(“the SFA”).

Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must

immediately discontinue any use of this Report and inform MOCMSPL.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or

reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report

may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by

any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and

should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative

products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained

in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without

any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect or

have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any

company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that

is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you

solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or

entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or licensing requirement

within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such

restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use

of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees

responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website

www.motilaloswal.com.

CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance

Corporate Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth

Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance

Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group

company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in

securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOFSL 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.

April 2020