28 March 2019
Update
| Sector:
Oil & Gas
ONGC
Buy
BSE SENSEX
38,133
S&P CNX
11,445
CMP: INR160
TP: INR196(+22%)
Takeaways from OPaL’s Dahej Plant Visit
About OPaL
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
ONGC IN
12,833
2016 / 29.3
192 / 128
2/-14/-26
1453
34.4
Financials Snapshot (INR b)
Y/E March
2019E 2020E
Sales
4,603.5 4,983.7
EBITDA
848.9 910.9
Adj. PAT
350.0 377.0
Adj. EPS
27.3
29.4
EPS Gr.
35.1
7.7
BV/Sh.
175.5 193.3
RoE (%)
16.3
15.9
RoCE (%)
11.9
12.7
Payout (%)
39.4
39.5
Valuation
P/E (x)
5.7
5.3
P/BV (x)
0.9
0.8
EV/EBITDA
3.2
2.9
D. Yield (%)
5.9
6.4
2021E
5,094.6
921.3
379.5
29.6
0.7
211.1
14.6
12.1
39.9
5.3
0.7
2.7
6.5
Incorporated in 2006, ONGC Petro additions Limited (OPaL) is a joint venture
(JV) between ONGC (promoter – 49.36%), GAIL (co-promoter – 49.21%) and
GSPC (co-promoter – 1.43%).
The company has set up a 1.9mmtpa (1.1mmtpa ethylene, 0.4mmtpa
propylene and rest is chemicals) petrochemical complex in Dahej, Gujarat.
The complex was commissioned in Mar’17 and built with a total capex of
INR308b (including interest cost of ~INR90b).
The plants are running at ~90% utilization rates in an integrated fashion.
EBITDA margin for the company stands at ~18-20%, with higher domestic
realization.
OPaL expects to achieve EBITDA of ~INR15b in FY19, ~INR25b in FY20 (with full
utilization), and ~INR35b after (a) the completion of the Hazira-Dahej Naphtha
pipeline, (b) the exit from SEZ and (c) the completion of other debottlenecking
by FY21.
OPaL’s kickoff
Shareholding pattern (%)
As On
Dec-18 Sep-18 Dec-17
Promoter
65.6
67.5
67.7
DII
14.8
13.3
13.3
FII
5.9
5.8
5.2
Others
13.7
13.4
13.8
FII Includes depository receipts
Stock Performance (1-year)
ONGC
220
180
140
100
Sensex - Rebased
OPaL was created with an intention of producing value products using ONGC’s
naphtha from Hazira, and ethane, propane and butane from ONGC’s extraction
plant at Dahej.
Dahej complex has a total of eight furnaces, with flexibility of changing
feedstock inputs, base design for 60% naphtha and 40% gases. This gives the
company an advantage of switching between gas and naphtha during periods
of high gas prices (in winter), and vice versa.
Total gas consumption stands at ~5.3mmscmd, with 1.3mmscmd of LNG used
purely for power generation.
Naphtha is majorly sourced from ONGC, while a small amount is also sourced
from BPCL/others. Ethane is majorly sourced from ONGC’s extraction plant, and
a small quantity (less than 10%) from RIL.
The company can boost its utilization up to ~120%, with certain
debottlenecking and process improvement.
OPaL’s positioning
OPaL commands ~13% of the domestic market share, with ~32 domestic
channel partners.
The products are exported to 20+ countries. Around two thirds of exports are
to China with the help of ~13 global partners.
Chemicals form the majority of exports, with py-gas (via Hazira) and benzene
(Pipavav) exports at 100% each and butadiene (Kandla) exports at 60%.
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.
Swarnendu Bhushan – Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Sarfraz Bhimani – Research Analyst
(Sarfraz.Bhimani@motilaloswal.com); +91 22 6129 1566
 Motilal Oswal Financial Services
ONGC
India’s polymer story
Polyolefin demand in India stands at ~13.05mmtpa, which is likely to grow at
~11-12% annually (~1.5x GDP).
India imports around one third (4.2mmtpa) of total demand for polyolefin.
Besides, per capita consumption of polymers in India stands at just ~10kg v/s
global average of ~32kg.
Despite the huge domestic production gap, only HMEL’s (HPCL-Mittal Energy
Ltd) Bhatinda Petrochemical Project is expected to come online by 2022-23.
OPaL’s opportunities
OPaL is in advanced talks for a strategic sale by converting its compulsory
convertible debentures (CCDs), post which ONGC’s stake in the company would
be in the range of 35-50% – it would still remain as the largest shareholder.
The company has already applied to the Indian government to move it out of
SEZ, which will help it save ~8.25% of custom duty on domestic sale of polymer
products.
OPaL plans to spend INR1,300m toward the C4 hydrogenation unit and
~INR2,000-3,000m toward the Toluene separation plant.
Projects like MMA/PBR/SBR could come up in future, as > 50% of the current 5
sq.km. petrochemical complex at Dahej could be used for expansion.
Pipeline to carry naphtha from Hazira to OPaL Dahej is expected to be
completed by 1QFY20, adding ~INR3b to EBIDTA.
The company is in process of converting its INR loans to USD, as it can provide a
natural hedge against its exports (international receivables), resulting in saving
of ~INR2b.
Exhibit 1: India’s polyolefin per capita consumption much lower than global peers
Polyolefin per capita consumption (kgs.)
Global Avg. (kgs.)
32
108
USA
45
Europe
32
Brazil
10
India
Source: MOFSL, Company
28 March 2019
2
 Motilal Oswal Financial Services
ONGC
Exhibit 2: India’s polymer imports at around one third of total demand
India Polymers Demand: 13.05 mmtpa
Production: 8.84 mmtpa
Imports: 4.21
mmtpa
RIL: 40%
OPaL: 13%
HPL: 10%
GAIL:
8%
Source: Company, MOFSL
Exhibit 3: OPaL’s process schematic and details
Source: Company, MOFSL
28 March 2019
3
 Motilal Oswal Financial Services
ONGC
OPaL: Story in charts
Exhibit 4: HDPE and LLDPE constitute ~43% of product mix
due to OPaL’s PE swing unit
Product Slate (2,494 KTPA)
Exhibit 5: OPaL exports around two thirds of its polymers to
China
Polymers Exports (FY19YTD)
HDPE
18%
3%
3%
5%
6%
8%
14%
12%
31%
PP
LLDPE
Py. Gas
Benzene
Butadiene
Propylene
CBFS
Others
Source: Company, MOFSL
3%
4%
6%
10%
9%
China
Vietnam
Nepal
Bangladesh
68%
Indonesia
Others
Source: Company, MOFSL
Exhibit 6: OPaL enjoys strong sales in western and northern
India due to its strategic positioning in Dahej
OPaL Domestic Sales
North:
25%
South:
14%
East:
5%
West:
37%
Exhibit 7: OPaL’s polymer sales expected to be ~INR100b in
FY19
INR m
Chemicals
356
267
266
197
241
307
Polymers
317
Total OPaL Sales
385
25%
Delhi
14%
Chennai
5%
Kolkata
6%
Ahmedabad
31%
Mumbai
70
1QFY19
90
2QFY19
76
3QFY19
78
4QFY19E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 8: OPaL’s capacity utilization across units (till Jan’19)
FY19 Capacity Utilization
97%
86%
69%
56%
74%
76%
71%
75%
62%
63%
63%
80%
67%
DFCU
HDPE
PP
PE Swing
103%
86%
49%
1QFY19
2QFY19
3QFY19
4QFY19td
Source: Company, MOFSL
28 March 2019
4
 Motilal Oswal Financial Services
ONGC
OPaL: Polymers Value Chain
Exhibit 9: OPaL: HDPE Application Envelope
Source: Company, MOFSL
Exhibit 10: OPaL: LLDPE Application Envelope
Source: Company, MOFSL
28 March 2019
5
 Motilal Oswal Financial Services
ONGC
Exhibit 11: OPaL: PP Application Envelope
Source: Company, MOFSL
28 March 2019
6
 Motilal Oswal Financial Services
ONGC
ONGC: Valuation and View
We estimate crude oil production at 24mmt for FY20/21, factoring in the
expected delays in project execution. Gas production is estimated to grow by
~5-6% in FY20/21. Our assumptions are conservative compared to the
company’s guidance.
We marginally revise our estimates to take into account (a) change in the
exchange rate assumptions and (b) change in production assumptions. The stock
is trading at 5.3x FY21E consolidated EPS of INR29.6. We move our valuation
from Dec’20 to FY21. Valuing the company at 8x standalone EPS (excluding
other income) and adding the value of investments, we reiterate our
Buy
rating
with a target price of INR196 (earlier: INR182).
Exhibit 12: SOTP for ONGC
Valuation of ONGC
FY21 Standalone adj. EPS(INR)
PE (x)
Valuation of ONGC stand (INR/share)
Listed investments
Total valuation
Valuation of Mozambique
Recoverable reserves (tcf)
Valuation of block (USD b)
ONGC's stake (%)
Discount rate (%)
Valuation for ONGC (USD b)
Value paid (USD b)
Valuation for ONGC (INR/share)
Valuation of ONGC (INR/share)
20.8
8.0
166
34
200
75
31
16
50
3
3
(4)
196
Source: Company, MOFSL
Exhibit 13: ONGC: 1 Year forward P/E (x)
27.0
21.0
15.0
9.0
3.0
P/E (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
20.7
13.6
10.2
6.8
4.8
5.2
Source: Company, MOFSL
28 March 2019
7
 Motilal Oswal Financial Services
ONGC
ONGC: Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Share of associates/JVs/Minority int
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY14
17,44,771
7.4
11,54,500
66.2
5,90,270
33.8
2,50,690
3,39,580
6,243
68,937
4,02,274
2,423
4,04,697
1,27,604
31.5
1,465
2,75,628
2,62,235
8.3
15.0
FY15
16,08,897
-7.8
10,62,360
66.0
5,46,538
34.0
2,89,844
2,56,694
28,624
59,644
2,87,715
-14,011
2,73,704
96,974
35.4
-6,606
1,83,335
1,83,638
-30.0
11.4
FY16
13,56,642
-15.7
9,04,510
66.7
4,52,132
33.3
2,24,626
2,27,506
37,656
81,448
2,71,298
-79,433
1,91,865
69,507
36.2
-8,657
1,31,016
1,74,478
-5.0
12.9
FY17
32,56,662
140.1
26,76,430
82.2
5,80,232
17.8
2,54,388
3,25,845
35,911
93,232
3,83,165
5,910
3,89,075
1,25,484
32.3
-28,100
2,91,691
2,87,687
64.9
8.8
FY18
36,22,462
11.2
29,79,185
82.2
6,43,277
17.8
3,05,506
3,37,771
49,990
74,682
3,62,462
2,481
3,64,944
1,31,395
36.0
-27,131
2,60,680
2,59,092
-9.9
7.2
FY19E
46,03,489
27.1
37,54,546
81.6
8,48,943
18.4
3,02,896
5,46,047
57,280
7,600
4,96,367
0
4,96,367
1,73,728
35.0
-27,355
3,49,993
3,49,993
35.1
7.6
(INR Million)
FY20E
49,83,674
8.3
40,72,737
81.7
9,10,937
18.3
3,20,230
5,90,708
57,375
3,945
5,37,277
0
5,37,277
1,88,047
35.0
-27,790
3,77,020
3,77,020
7.7
7.6
FY21E
50,94,586
2.2
41,73,245
81.9
9,21,341
18.1
3,35,365
5,85,976
48,875
3,036
5,40,137
0
5,40,137
1,89,048
35.0
-28,392
3,79,481
3,79,481
0.7
7.4
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Others
Capital Employed
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Pre & Producing Properties
Exploratory wells under progress
Total Investments
Curr. Assets, Loans&Adv.
Others
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Misc expenditure
Appl. of Funds
E: MOFSL Estimates
FY14
42,778
16,78,732
17,21,510
29,125
4,55,881
1,78,635
0
23,85,152
4,63,007
1,83,545
5,38,270
9,12,682
1,82,067
47,459
9,15,192
1,91,685
1,48,015
1,60,284
2,44,801
1,70,408
8,57,070
5,43,502
3,13,568
58,122
0
23,85,151
FY15
42,778
17,61,767
18,04,544
24,731
5,18,713
1,81,759
0
25,29,748
6,87,881
2,01,399
4,22,115
9,10,049
2,11,967
47,491
8,90,070
2,27,546
1,06,062
1,87,970
1,60,969
2,07,522
8,41,225
4,90,837
3,50,388
48,845
0
25,29,748
FY16
42,778
19,35,359
19,78,136
26,518
4,45,477
2,64,457
2,22,258
29,36,846
15,09,467
1,53,301
2,19,045
0
3,57,640
4,06,669
7,63,161
2,67,452
99,181
95,013
2,76,923
24,593
4,72,436
4,60,127
12,309
2,90,725
0
29,36,846
FY17
64,166
18,79,686
19,43,852
1,32,920
7,43,998
3,52,172
0
31,72,941
19,69,350
1,41,904
2,13,734
0
3,76,692
7,07,458
10,29,380
4,27,862
2,98,817
1,39,101
1,32,126
31,473
12,65,575
9,84,917
2,80,658
-2,36,196
0
31,72,942
FY18
64,166
19,76,023
20,40,189
1,56,060
10,12,461
3,98,070
0
36,06,779
21,18,473
1,42,026
2,13,813
0
4,01,105
6,73,425
10,36,518
4,96,397
3,05,630
1,55,556
50,784
28,151
9,78,580
6,83,139
2,95,441
57,938
0
36,06,779
FY19E
64,166
21,88,279
22,52,445
1,56,060
7,50,000
3,98,070
0
35,56,575
19,97,927
1,42,026
3,59,736
0
5,02,832
6,73,425
12,35,969
5,44,670
4,23,965
1,87,228
50,548
29,559
13,55,339
10,59,898
2,95,441
-1,19,370
0
35,56,575
FY20E
64,166
24,16,520
24,80,686
1,56,060
6,00,000
3,98,070
0
36,34,816
18,55,380
1,42,026
5,01,329
0
6,13,556
6,73,425
12,91,972
5,96,300
4,59,896
2,02,690
2,050
31,036
14,42,872
11,47,431
2,95,441
-1,50,900
0
36,34,816
FY21E
64,166
26,44,731
27,08,897
1,56,060
5,50,000
3,98,070
0
38,13,027
16,93,478
1,42,026
6,26,031
0
7,45,392
6,73,425
14,01,084
6,51,623
4,71,245
2,07,201
38,426
32,588
14,68,408
11,72,967
2,95,441
-67,324
0
38,13,027
28 March 2019
8
 Motilal Oswal Financial Services
ONGC
ONGC: Financials and Valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY14
20.4
40.0
134.1
6.3
34.5
FY15
14.3
36.9
140.6
6.3
53.2
10.9
4.2
1.1
1.5
4.3
4.1
-2.3
10.4
9.1
1.1
0.6
24
43
111
1.1
9.0
0.2
FY16
13.6
31.1
154.1
5.7
66.8
11.5
5.0
1.0
1.6
4.8
3.6
36.5
9.2
8.3
0.5
0.5
27
26
124
1.6
6.0
0.1
FY17
22.4
42.2
151.5
6.9
36.0
7.0
3.7
1.0
0.8
4.5
4.5
13.3
14.7
11.1
1.0
1.0
33
16
110
0.8
9.1
0.3
FY18
20.2
44.0
159.0
6.6
38.0
7.7
3.5
1.0
0.8
4.6
4.2
-17.0
13.0
9.2
1.0
1.0
31
16
69
1.1
6.8
0.5
FY19E
27.3
50.9
175.5
9.2
39.4
5.7
3.1
0.9
0.6
3.2
5.9
31.2
16.3
11.9
1.2
1.3
34
15
84
0.9
9.5
0.3
FY20E
29.4
54.3
193.3
9.9
39.5
5.3
2.9
0.8
0.5
2.9
6.4
19.5
15.9
12.7
1.3
1.4
34
15
84
0.9
10.3
0.2
FY21E
29.6
55.7
211.1
10.1
39.9
5.3
2.8
0.7
0.5
2.7
6.5
18.5
14.6
12.1
1.3
1.3
34
15
84
1.0
12.0
0.2
4.1
-0.5
16.2
14.3
1.2
0.7
31
34
114
1.1
54.4
0.1
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Change in deferred tax
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY14
3,94,134
1,85,888
37,031
-1,27,604
1,30,409
6,19,858
8,194
6,28,052
-6,34,865
-6,813
-26,177
-1,00,937
-7,61,979
0
2,51,373
-95,090
26,255
1,82,538
48,611
1,96,191
2,44,801
FY15
2,73,704
1,80,277
2,092
-96,974
-74,555
2,84,543
2,212
2,86,755
-3,16,264
-29,509
-32
-16,822
-3,33,118
0
62,832
-97,540
-2,761
-37,469
-83,832
2,44,801
1,60,969
FY16
1,91,865
1,63,841
93,415
-69,507
-1,25,927
2,53,688
2,32,702
4,86,390
-17,980
4,68,410
-3,59,178
37,381
-3,39,777
0
-73,237
-87,520
1,30,097
-30,660
1,15,953
1,60,969
2,76,922
FY17
3,89,075
2,02,192
86,602
-1,25,484
3,82,124
9,34,509
-87,757
8,46,752
-6,75,816
1,70,936
-3,00,789
12,510
-9,64,095
0
2,98,521
-1,04,941
-2,21,035
-27,454
-1,44,796
2,76,923
1,32,127
FY18
3,64,944
2,30,885
47,430
-1,31,395
-3,75,476
1,36,388
50,272
1,86,659
-4,04,501
-2,17,841
34,033
-1,654
-3,72,121
0
2,68,463
-99,174
-65,169
1,04,120
-81,342
1,32,126
50,784
FY19E
4,96,367
3,02,896
0
-1,73,728
1,77,072
8,02,607
27,355
8,29,961
-4,30,000
3,99,961
0
0
-4,30,000
0
-2,62,461
-1,37,737
0
-4,00,197
-236
50,784
50,548
FY20E
5,37,277
3,20,230
0
-1,88,047
-16,968
6,52,492
27,790
6,80,282
-4,30,000
2,50,282
0
0
-4,30,000
0
-1,50,000
-1,48,779
0
-2,98,779
-48,497
50,548
2,050
(INR Million)
FY21E
5,40,137
3,35,365
0
-1,89,048
-47,199
6,39,254
28,392
6,67,646
-4,30,000
2,37,646
0
0
-4,30,000
0
-50,000
-1,51,270
0
-2,01,270
36,376
2,050
38,426
28 March 2019
9
 Motilal Oswal Financial Services
ONGC
NOTES
28 March 2019
10
 Motilal Oswal Financial Services
ONGC
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 Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, 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. MOSL is a
subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com.
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 (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) for its stock broking activities & is Depository
participant with Central Depository Services Limited (CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for
distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOSL 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 MOSL even though
there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOSL 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 MOSL 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 Securities 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 MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOSL 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 MOSL & 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 Securities Limited (MOSL) 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 MOSL 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 MOSL , 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., MOSL 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
****************************************************************
****************************************************************
28 March 2019
11
 Motilal Oswal Financial Services
ONGC
The associates of MOSL 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 MOSL 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 MOSL 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 MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL 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 MOSL 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
MOSL. 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. MOSL 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. MOSL, 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 MOSL. 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 MOSL
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 MOSL or any of its affiliates or employees from, any and all
responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL 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.: 022-3980 4263; www.motilaloswal.com.
Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer:
Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-38281085.
Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412.
AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual
Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate
products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products.
* 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. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
28 March 2019
12