15 July 2020
1QFY21 Results Update | Sector: Technology
Wipro
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: INR225
Dark horse, this time?
Multiple factors in favor
TP: INR257 (+14%)
Neutral
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
WPRO IN
5,693
1286 / 17.2
276 / 160
2/2/-6
1198
Wipro’s ability to control costs and collections justifies the improvement in
EBIT margin/cash conversion, despite the sharp drop in revenue. While full
impact of the COVID-19 pandemic on pricing and Working Capital (WC) cycle
is yet to play out, Wipro’s outlook on managing margin stability (v/s Jun’20)
and healthy cash conversions are impressive.
In the current context, some of the verticals (Health BU) – earlier an
overhang – should recover. Additionally, other factors in favor are playing
out, such as (a) upside of a turnaround under a new CEO/strategy, and (b)
possibility of large capital return.
We upgrade our FY21/FY22E EPS by 6%-12%, largely led by margin surprise.
Before turning constructively positive on the stock, we await a refresh of the
company’s strategy and further evidence related to execution. Maintain
Neutral.
Financials & Valuations (INR b)
Y/E Mar
2020 2021E 2022E
Sales
613
608
644
EBIT Margin (%)
17.1
18.0
18.5
PAT
98
98
106
EPS (INR)
16.6
17.3
18.7
EPS Gr. (%)
8.5
3.8
8.5
BV/Sh. (INR)
97.9 113.8 129.1
Ratios
RoE (%)
17.53
16.1
15.2
RoCE (%)
12.8
11.5
11.2
Payout (%)
7.0
13.6
18.7
Valuations
P/E (x)
13.5
13.0
12.0
P/BV (x)
2.3
2.0
1.7
EV/EBITDA (x)
8.2
7.0
5.8
Div Yield (%)
0.54
0.9
1.3
Revenues in line; Margins – a surprise
Wipro reported revenue (USD)/EBIT/PAT growth of -6%/7%/0.1% YoY.
While revenue decline in Americas was largely in line with overall revenue
decline (4.4% YoY, CC), Europe remained a drag (-7.7% YoY, CC).
While other verticals were reasonably resilient, Communications (~17% YoY,
CC) and BFSI (~7% YoY, CC) witnessed the biggest drop in revenue.
Unlike TCS and Accenture, we do not believe Wipro’s Healthcare vertical
(14% of revenue) has benefited much on account of COVID-19.
EBIT margin of IT services segment was surprising (19%, 300bp higher).
Sequentially, margin expansion was driven by (a) operational efficiencies
and cost control (+100bp), and (b) favorable currency (+100bp). Part of this
was offset by the increase in provision for doubtful debts (-50bp impact).
Sub-contracting rationalization led to ~200bp improvement in net utilization.
FCF generation during the quarter remained healthy (158% of net income).
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Focus on profitable growth; Confident outlook on margins
Mar-20 Dec-19 Mar-19
74.0
74.0
73.9
7.0
7.0
6.5
8.9
8.9
9.4
10.1
10.1
10.3
FII Includes depository receipts
Wipro’s new CEO has indicated that the company’s focus is on profitable
growth.
On YoY basis, order book is looking better. Deal pipeline is also stated to be
healthy. As the company enters 2QFY21, deal activity is expected in
Consumer, Technology and Communications while it remains cautious in
other verticals.
In BFSI, there is good demand around RTB and cost optimization spends.
Thought visibility has improved slightly (v/s Mar’20), management has
refrained from providing guidance.
Near-term focus is on tightly controlling incremental spends. The company
has hinted at maintaining IT services’ margins in a narrow band (v/s Jun’20).
Sudheer Guntupalli – Research analyst
(Sudheer.Guntupalli@MotilalOswal.com)
Research analyst: Mohit Sharma
(Mohit.Sharma@MotilalOswal.com) /
Heenal Gada
(Heenal.Gada@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.
 Motilal Oswal Financial Services
Wipro
Valuation and view – All set for multiple re-rating?
Over the past few years, Wipro has underperformed Tier-I companies on
growth, partly due to higher exposure to verticals facing challenges (e.g.
Healthcare and ENU). Additionally, changes at the company level (e.g.
restructuring in India/the Middle East, etc.) have further constrained growth.
However, we expect scope of recovery in some verticals (e.g. Health BU).
Despite the COVID-19 impact, margin resilience/cash generation was impressive
this quarter. Management’s outlook of maintaining margins within a narrow
band (v/s Jun’20) should result in strong EPS consensus upgrade.
We believe Wipro is a good re-rating candidate due to the (a) upside of a
turnaround under the new CEO, (b) possibility of an impending buy back, and (c)
relatively attractive valuations (v/s TCS and Infosys, 13x 1-year forward P/E).
Before turning constructively positive on the stock, we await a refresh of the
company’s strategy and further evidence related to execution. Maintain
Neutral.
FY21E
2QE
3QE
1,922
1,950
0.0
1.5
151
153
0.5
1.0
-0.5
-1.9
30.9
31.1
12.3
12.9
34
33
22.3
21.9
19.0
18.5
18.3
17.8
4
4
22.1
22.1
25
24
2.5
-1.7
-3.5
-1.4
4.4
4.3
FY20
4QE
1,970
1.0
154
1.2
-2.4
31.0
12.9
34
22.2
18.5
18.1
4
22.1
25
2.6
6.3
4.4
8,256
1.7
613
4.1
28.9
11.9
126
20.5
18.0
17.1
18
20.2
97
5.3
16.6
FY21E
7,764
-6.0
608
-0.8
31.0
13.0
134
22.1
18.7
18.0
16
22.1
97
0.0
17.3
Est.
1QFY21
1,926
-7.1
151
-4.5
2.0
27.7
12.1
29
19.0
16.0
15.3
4
20.9
22
-7.7
-9.9
3.8
FY20
3.9
28.9
17.1
15.8
1,82,886
14.7
80.9
4
8.1
7.6
-1.3
31.0
18.0
16.0
(INR b)
Var.
(%/bp)
-0.2
-21bp
-0.4
-41bp
-44bp
328bp
105bp
15.0
295bp
300bp
253bp
-2.7
117bp
11.4
1054bp
1029bp
9.5
FY21
Quarterly Perf. (IFRS)
Y/E March
IT Services Rev. (USD m)
QoQ (%)
Overall Revenue (INR b)
QoQ (%)
YoY (%)
GPM (%)
SGA (%)
EBITDA
EBITDA Margin (%)
IT Serv. EBIT (%)
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Y/E March
1Q
2,039
-1.8
148
-1.6
5.3
29.6
12.9
30
20.0
18.0
16.7
6
21.8
24
-9.4
14.4
4.0
FY20
2Q
3Q
2,049
2,095
0.5
2.2
152
155
2.6
2.4
3.6
2.6
28.9
29.4
11.3
11.9
31
33
20.7
20.9
18.1
18.4
17.6
17.5
5
4
18.3
20.0
26
25
6.6
-3.8
36.0
-3.2
4.3
4.3
FY20
2Q
1.1
28.9
17.6
16.8
4Q
2,074
-1.0
158
1.7
5.1
27.8
11.4
32
20.4
17.6
16.7
3
20.9
23
-4.8
-6.0
4.1
1Q
1,922
-7.3
150
-4.9
1.6
31.0
13.2
33
21.9
19.0
17.9
4
22.1
24
2.8
0.4
4.2
Key Performance Indicators
Revenue (QoQ CC %)
Margins
Gross Margin
EBIT Margin
Net Margin
Operating metrics
Headcount
Attrition (%)
Utilization
Key Verticals (YoY CC %)
BFSI
Retail
Key Geographies (YoY CC%)
North America
Europe
1Q
-0.7
29.6
16.7
16.1
3Q
1.8
29.4
17.5
15.8
4Q
0.4
27.8
16.7
14.7
1Q
-7.5
31.0
17.9
15.9
FY21
2Q
3Q
4Q
30.9
18.3
16.5
31.1
17.8
16.1
31.0
18.1
16.3
1,74,850 1,81,453 1,87,318 1,82,886 1,81,804
17.6
17.0
15.7
14.7
13.0
82.8
79.9
78.5
82.4
84.5
11.2
7.7
11.2
0.0
5.9
6.1
9.4
-2.7
1
12.1
7.2
-4.3
-1.3
6.4
3.1
1.9
-6.9
-2.5
-4.4
-7.7
15 July 2020
2
 Motilal Oswal Financial Services
Wipro
Management commentary highlights
Wipro’s new CEO has indicated that the company’s focus is on profitable
growth.
On YoY basis, order book is looking better. Deal pipeline is also stated to be
healthy. As the company enters 2QFY21, deal activity is expected in Consumer,
Technology and Communications while it remains cautious in other verticals.
In BFSI, there is good demand around RTB and cost optimization spends.
Thought visibility has improved slightly (v/s Mar’20), management has refrained
from providing guidance.
Near-term focus is on tightly controlling incremental spends. The company has
hinted at maintaining IT services’ margins in a narrow band (v/s Jun’20).
Revenues in line; Margins – a surprise
Wipro reported revenue (USD)/EBIT/PAT growth of -6%/7%/0.1% YoY.
While revenue decline in Americas was largely in line with overall revenue
decline (4.4% YoY, CC), Europe remained a drag (-7.7% YoY, CC).
While other verticals were reasonably resilient, Communications (~17% YoY, CC)
and BFSI (~7% YoY, CC) witnessed the biggest drop in revenue.
Unlike TCS and Accenture, we do not believe Wipro’s Healthcare vertical (14% of
revenue) has benefited much on account of COVID-19.
EBIT margin of IT services segment was surprising (19%, 300bp higher).
Sequentially, margin expansion was driven by (a) operational efficiencies and
cost control (+100bp), and (b) favorable currency (+100bp). Part of this was
offset by the increase in provision for doubtful debts (-50bp impact).
Sub-contracting rationalization led to ~200bp improvement in net utilization.
FCF generation during the quarter remained healthy (158% of net income).
Exhibit 1: Communication/CBU vertical plunged while others showed reasonable resilience
Verticals
BFSI
Communications
Consumer Business Unit
Energy, Natural Resources & Utilities
Health Business Unit
Manufacturing
Technology
Contri. To Rev. (%)
30.7
5.1
15.9
13.2
13.5
8.1
13.5
CC Growth (QoQ %)
-6.4
-16.2
-12.4
-5.4
-7.2
-8.1
-2.1
Source: Company, MOFSL
Exhibit 2: While America was largely in line with overall decline, Europe lagged
Geographies
Americas
Europe
ROW
Contri. To Rev. (%)
59
23.7
17.3
CC Growth (QoQ %)
-7.0
-9.7
-6.1
Source: Company, MOFSL
15 July 2020
3
 Motilal Oswal Financial Services
Wipro
Exhibit 3: All practices reported sequential declines
Practices
BPO/ Digital operations
IMS
Wipro Analytics
Application Services
Product Eng. And Mobility
Contri. To Rev. (%)
14.8
25.9
7.2
44.4
7.7
CC Growth (QoQ %)
-5.9
-6.9
-7.8
-8.3
-7.6
Source: Company, MOFSL
Exhibit 4: Attrition rates witnessed decline in 1QFY21
Attrition Quarterly Annualized
17.8
18.5
17.5
16.6
17.9
16.0
12.5
12.6
10.7
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
Source: Company, MOFSL
Exhibit 5: Utilizations increased due to reduction in headcount
Utilization (exc. trainees)
85.2
85.5
83.2
85.4
85.0
82.1
79.6
82.6
84.5
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
Source: Company, MOFSL
Valuation and view – All set for multiple re-rating?
Over the past few years, Wipro has underperformed Tier-I companies on
growth, partly due to higher exposure to verticals facing challenges (e.g.
Healthcare and ENU). Additionally, changes at the company level (e.g.
restructuring in India/the Middle East, etc.) have further constrained growth.
However, we expect scope of recovery in some verticals (e.g. Health BU).
Despite the COVID-19 impact, margin resilience/cash generation was impressive
this quarter. Management’s outlook of maintaining margins within a narrow
band (v/s Jun’20) should result in strong EPS consensus upgrade.
We believe Wipro is a good re-rating candidate due to the (a) upside of a
turnaround under the new CEO, (b) possibility of an impending buy back, and (c)
relatively attractive valuations (v/s TCS and Infosys, 13x 1-year forward P/E).
15 July 2020
4
 Motilal Oswal Financial Services
Wipro
Before turning constructively positive on the stock, we await a refresh of the
company’s strategy and further evidence related to execution. Maintain
Neutral.
Exhibit 6: Over the long term, P/E multiples averaged to ~14x
18
15
12
9
6
Wipro 1yr Forward P/E
Source: Company, MOFSL
Exhibit 7: Revisions to our estimates
Revised
FY21E
76.0
7,764
(6.0)
18.0
18.7
97.2
17.3
FY22E
77.0
8,151
5.0
18.5
18.9
105.2
18.7
Earlier
FY21E
76.0
7,560
(8.4)
15.7
16.3
86.4
15.4
FY22E
77.0
7,964
5.3
16.9
17.7
99.5
17.7
Change
FY21E
0.0%
2.7%
250bps
230bps
240bps
12.5%
12.0%
FY22E
0.0%
2.3%
-40bps
160bps
120bps
5.7%
5.8%
INR/USD
IT Services USD Revenue - m
Overall Growth (%)
EBIT margin - Overall (%)
EBIT margin - IT Services (%)
PAT (INR B)
EPS
Source: Company, MOFSL
15 July 2020
5
 Motilal Oswal Financial Services
Wipro
Operating Metrics
Exhibit 8: Operating metrics
Services Composition (%)
IMS
BPO
Product Engg and Mobility
Wipro Analytics
Application Services
Total
Verticals (%)
Finance Solutions
Manufacturing
Healthcare Lifescience
Energy, Natural Resources & Utilities
Communications
Consumer
Technology
Geography (%)
Americas
Europe
ROW
Customer size distribution (TTM)
> $100M
> $75M
> $50M
> $20M
> $10M
> $5M
> $3M
> $1M
Customer metrics
Revenue from Existing customers %
Number of new customers
Total Number of active customers
EMPLOYEE METRICS
Closing Headcount - IT Services
Sales & Support staff - IT Services
Utilization
Gross Utilization (%)
Net Utilization (excl support) (%)
Net Utilization (excl trainees) (%)
Attrition
Voluntary TTM
Voluntary Quarterly Annualized
BPO - Quarterly
BPO - Post training
Customer Concentration (%)
Top customer
Top 5
Top 10
1QFY19
26.3
12.4
7.4
7.2
46.7
100.0
29.8
8.4
13.6
12.7
5.7
15.3
14.5
56.0
26.1
17.9
8
19
40
91
171
268
359
595
99.5
75
1184
2QFY19
25.6
12.9
7.4
7.8
46.3
100.0
30.5
13.1
13.0
12.8
5.8
15.7
8.1
56.1
25.7
18.2
9
19
39
92
177
265
348
584
98.6
76
1131
3QFY19
25.0
14.7
7.1
7.6
45.6
100.0
31.4
8.1
13.1
13.0
5.8
15.6
13.0
57.1
25.5
17.4
10
19
41
99
171
269
339
578
97.9
57
1132
4QFY19
25.2
14.9
7.2
7.6
45.1
100.0
31.5
8.0
13.2
12.8
5.7
16.2
12.6
58.2
24.6
17.2
10
22
41
96
172
262
339
571
97.6
63
1115
1QFY20
25.7
14.7
7.6
7.4
44.6
100.0
31.6
7.9
13.2
12.8
5.9
15.6
13.0
58.7
24.6
16.7
13
23
41
92
166
259
340
564
99.4
41
1060
1,74,850
14,116
73.9
82.8
85.0
17.6
17.9
11.2
10.0
3.7
13.8
20.7
2QFY20
25.7
14.7
7.5
7.3
44.8
100.0
31.3
8.1
13.0
12.9
5.7
16.0
13.0
59.6
23.5
16.9
13
23
41
92
15
261
341
569
98.4
57
1027
1,81,453
14,990
71.4
79.9
82.1
17.0
16.0
11.0
9.9
3.2
12.8
19.8
3QFY20
25.8
15.3
7.5
7.2
44.2
100.0
30.9
8.2
13.1
12.9
5.7
16.9
12.3
59.2
23.7
17.1
14
22
41
96
169
260
344
572
97.6
77
1070
1,87,318
15,232
70.2
78.5
79.6
15.7
12.5
11.0
9.6
3.0
12.3
19.2
4QFY20
25.8
14.6
7.7
7.2
44.7
100.0
30.4
8.2
13.5
12.8
5.5
16.8
12.8
59.1
24.1
16.8
15
22
40
96
166
260
341
574
97.0
65
1074
1,82,886
14,908
73.4
82.4
82.6
14.7
12.6
11.8
10.8
3.0
12.2
19.3
1QFY21
25.9
14.8
7.7
7.2
44.4
100.0
30.7
8.1
13.5
13.2
5.1
15.9
13.5
59.0
23.7
17.3
13
22
39
97
163
258
348
577
99.7
42
1004
1,81,804
14,567
75.0
84.5
84.5
13.0
10.7
4.5
4.4
3.2
12.3
20.3
1,60,846 1,71,451 1,72,379 1,71,425
15,076
14,862
14,575
14,360
74.5
83.9
85.2
17.1
17.8
10.8
9.5
3.7
11.9
18.7
74.4
83.2
85.5
17.5
18.5
12.3
11.2
3.7
12.2
19.1
73.4
81.9
83.2
17.9
17.5
10.5
9.4
3.7
13.0
19.7
75.4
84.1
85.4
17.6
16.6
11.8
10.8
3.7
13.7
20.4
Source: MOFSL, Company
15 July 2020
6
 Motilal Oswal Financial Services
Wipro
Financials and valuations
Income Statement
Y/E March
Profit & Loss
Sales
Change (%)
Operating Costs
SG&A
EBITDA
% of Net Sales
Depreciation & Amort.
EBIT
Margins
Other Income
PBT
Tax
Rate (%)
PAT
Minority Interest
Adjusted PAT
Extraordinary items
Reported PAT
Change (%)
2014
438
-99.9
296
53
100
23.0
11
89
20.4
12
101
23
22.4
78
0
78
0
78
-99.9
2015
473
8.1
322
56
108
22.9
13
95
20.2
16
112
25
22.0
87
1
87
0
87
11.0
2016
516
9.1
357
63
112
21.7
15
97
18.8
18
115
25
22.0
90
0
89
0
89
3.0
2017
554
7.3
392
73
115
20.8
23
92
16.6
16
109
25
23.2
83
0
83
0
83
-6.6
2018
546
-1.4
386
76
105
19.3
21
84
15.4
18
102
22
21.9
80
0
80
0
80
-3.8
2019
589
7.8
413
80
117
19.8
19
97
16.5
20
117
25
21.6
92
-1
92
0
92
15.3
2020
613
4.1
436
73
126
20.5
21
105
17.1
18
123
25
20.2
98
0
97
0
97
5.3
2021E
608
-0.8
420
79
134
22.1
25
109
18.0
16
126
28
22.1
98
-1
99
0
99
1.7
(INR b)
2022E
644
5.9
442
82
146
22.6
26
119
18.5
17
136
30
22.1
106
-1
107
0
107
8.1
Balance Sheet
Y/E March
Net Worth
Minority Interest & others
Loans
Capital Employed
Net Block
Intangible Assets
Other non current assets
Curr. Assets
Debtors
Inventories
Cash & Bank Balance
Adv., Other Current Assets
Current Liab. & Prov
Net Current Assets
Application of Funds
2014
343
11
52
407
51
65
28
357
125
2
177
53
96
262
407
2015
408
15
79
502
54
76
29
440
134
5
217
85
98
343
502
2016
466
23
125
614
65
118
37
506
151
5
232
118
111
395
614
2017
520
24
142
687
70
118
67
539
140
4
345
50
107
432
687
2018
483
19
138
640
64
118
72
506
143
3
294
65
121
386
640
2019
568
22
99
690
71
118
73
572
123
4
379
65
143
429
690
2020
557
38
78
674
98
118
82
520
130
2
334
54
143
377
674
2021E
648
37
74
759
93
118
78
593
112
7
422
52
122
470
759
(INR b)
2022E
735
36
74
845
86
118
78
692
117
7
513
54
128
563
845
15 July 2020
7
 Motilal Oswal Financial Services
Wipro
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity Ratio(x)
2014
12.1
13.8
53.2
8.0
77.7
2015
13.4
15.4
63.2
12.0
105.0
2016
13.8
16.1
72.1
6.0
50.9
2017
12.9
16.5
80.5
2.0
18.2
2018
12.6
15.7
74.8
0.0
0.0
2019
15.3
17.3
87.9
0.0
0.0
2020
16.6
20.7
97.9
1.0
7.0
2021E
17.3
21.7
113.8
2.0
13.6
2022E
18.7
23.4
129.1
3.0
18.7
18.7
16.3
13.2
3.0
4.2
3.6
16.8
14.7
12.2
2.8
3.6
5.3
16.3
14.0
12.0
2.6
3.1
2.7
17.5
13.7
10.9
2.3
2.8
0.9
17.9
14.4
12.3
2.4
3.0
0.0
14.7
13.0
10.1
2.0
2.6
0.0
13.5
10.9
8.2
1.7
2.3
0.4
13.0
10.4
7.0
1.5
2.0
0.9
12.0
9.6
5.8
1.3
1.7
1.3
24.9
17.4
23.0
15.2
20.4
12.7
16.9
10.5
16.0
10.6
17.6
11.4
17.3
12.8
16.1
11.5
15.2
11.2
104
0.0
103
0.9
107
0.8
92
0.7
96
0.7
76
0.7
77
0.7
67
0.7
66
0.7
0.2
0.2
0.3
0.3
0.3
0.2
0.1
0.1
0.1
Cash Flow Statement
Y/E March
CF from Operations
Cash for Wkg. Capital
Net Operating CF
2014
100
-32
68
-8
5
-3
-11
-23
-35
60
30
154
30
184
2015
111
-32
78
-11
-15
-26
21
-29
-9
67
44
177
44
221
2016
112
-33
79
-13
-104
-138
35
-35
-2
66
-61
217
-61
156
2017
114
-21
93
-15
-84
-116
13
9
-5
77
-29
232
-29
203
2018
83
-4
79
-16
0
-3
-9
0
-127
63
-51
345
-51
294
2019
91
42
134
-26
0
-6
-36
0
-42
108
85
294
85
379
2020
100
7
107
-48
0
-39
-5
-7
-113
59
-45
379
-45
334
2021E
105
-6
99
-20
0
0
-4
-13
-11
79
88
334
88
422
(INR b)
2022E
114
-2
112
-19
0
-3
0
-20
-18
93
91
422
91
513
Net Purchase of FA
Net Pur. of Investments
Dividend from Subsidiary
Net Cash from Invest.
Proceeds from LTB/STB
Dividend Payments
Net CF from Finan.
Free Cash Flow
Net Cash Flow
Opening Cash Bal.
Add: Net Cash
Closing Cash Bal.
15 July 2020
8
 Motilal Oswal Financial Services
Wipro
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
15 July 2020
9
 Motilal Oswal Financial Services
Wipro
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL
even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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.
15 July 2020
10