Motilal Oswal Financial Services

Sector

Sector Update | Financials

Update | 6 August 2020

Financials

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RBI announces key relief measures

Significantly cushions systemic asset quality; medium-term overhang may remain



Resolution Framework for

COVID-19 related stress



The Reserve Bank of India (RBI) has announced a resolution framework for accounts

adversely impacted by the COVID-19 outbreak. However, it has prudently allowed

only those accounts that were standard, but not in default for more than 30 days as of

Mar’20, to be eligible for this.

The RBI also constituted an expert committee led by Mr Kamath to suggest a list of

financial parameters to be factored in the assumptions of the resolution plan and

validate the resolution plan for all accounts above INR15b.

Furthermore, the RBI has extended the existing restructuring scheme for stressed

MSMEs up to Mar’21. The scheme would be applicable for all accounts that were

standard as of 1

Mar’20. We believe this would provide major relief for banks/NBFCs,

given the higher moratorium availed in the MSME segment.

The RBI has also announced other measures. (i) It increased the LTV cap for gold loan

disbursements to 90% from 75%. This would be applicable to banks only and allowed

up to 31

March 2021. (ii) An additional special liquidity facility of INR50b each would

be provided to NHB and NABARD at the policy rate.

The resolution mechanism would offer massive relief to banks, which would have

otherwise faced elevated slippages in 2HFY21. However, this would have its own

shortcomings as it delays the stress recognition in the system and would make it

difficult to assess the health of the Banking franchise.

Resolution framework announced with high entry barriers



The RBI has ensured the resolution framework for COVID-19-related stress is

applicable only to borrowers facing stress due to the COVID-19 outbreak. Thus,

it includes borrowers that are standard, but not in default for more than 30 days

(as of 1

Mar’20). The resolution plan should be invoked by 31

Dec’20 and

implemented within 90 days from the invocation date for personal loans, and

180 days for other exposures. Furthermore, all borrowers should continue to

remain standard until the invocation of the resolution plan. Under the

resolution plan, the residual tenor of a loan may be extended by a maximum of

2 years.



Corporate loan involves multiple lenders:

The resolution plan involves the

signing of an Inter-Creditor Agreement (ICA) by lenders, representing 75% by

value and 60% by number. If the ICA is not signed, the resolution process cannot

be invoked again.



An expert committee

headed by Mr K V Kamath would make recommendations

on the required financial parameters and sector-specific ranges, and would also

validate the resolution plan for accounts above INR15b.



Furthermore, resolutions in accounts greater than INR1b would require an

Independent Credit Evaluation (ICE) by a credit rating agency.

Existing restructuring scheme for MSME extended to Mar’21

The existing restructuring scheme for stressed MSMEs (which are overdue but

standard as of 1

Jan’20) has also been extended to all MSMEs that were standard

Research Analyst: Nitin Aggarwal

(Nitin.Aggarwal@MotilalOswal.com) |

Himanshu Taluja

(Himanshu.Taluja@motilaloswal.com)

Alpesh Mehta

(Alpesh.Mehta@MotilalOswal.com); |

Yash Agarwal

(Yash.Agarwal@motilaloswal.com)

Investors

6 August 2020

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.

Sector Update | Financials

as of 1

March, but severely impacted due to the COVID-19 outbreak. This

restructuring scheme shall need to be implemented by Mar’21. We believe this

measure would be a big relief for MSMEs. It would give breathing room to

companies facing cash flow strain to revive and reorganize their businesses.

Furthermore, it comes as a massive relief for banks, which would have otherwise

witnessed elevated slippages given the higher incidence of moratorium availed in

this segment.

Prudent provisioning at 10% where resolution plan implemented; 20% for lenders

not signing ICA



The RBI has further announced prudential provisioning norms where the

resolution plan is implemented @10% (20% for lenders that do not sign the

ICA).



Furthermore, 50% of provisions could be reversed if the borrower pays at least

20% of the outstanding debt without slipping into NPA post the implementation

of the plan. The rest of the provisions could be reversed upon payment of

additional 10% of residual debt by the borrower.

Increase gold loan LTV cap to 90% for banks; modest impact for gold NBFCs

To help the borrowers tide over temporary cash flow mismatches arising out of

COVID-19, the RBI has increased the LTV cap on gold loans by banks to 90% from

75%. However, this is applicable only up to 31

March 2021. While this is not

applicable to NBFCs, we do not believe there would be a meaningful impact on them

as: (a) several customers still avail loans at 60–65% LTV despite the threshold of 75%

and (b) banks may be reluctant to lend at 90% LTV given the high risk involved and

the sharp increase in gold prices. That said, there could be a transition of ~5% of

customers from NBFCs to banks.

Providing additional support to refinance agencies

In April 2020, the RBI announced an INR500b liquidity facility, INR250b of which was

for NABARD, INR150b for SIDBI, and INR100b for NHB. To further support these

agencies, the RBI announced an additional liquidity facility of INR50b for NABARD

and INR50b for NHB. We believe smaller HFCs are likely to benefit from this move,

while the impact on other NBFCs is likely to be modest.

Valuation and view

The resolution mechanism would provide massive relief to banks, which would

otherwise have faced elevated slippages in 2HFY21. However, this would have its

own shortcomings as it delays the stress recognition in the system and would make

it difficult to assess the health of the Banking franchise. Overall, we believe large

private banks are already holding COVID-19-related provisions and additional

contingent/floating provisions, while the moratorium book ranges at 10–20%.

Therefore, we do not expect the 10% provisioning norm on resolution accounts to

significantly increase the provisioning requirement. However, mid-cap banks could

see elevated provisions due to this provisioning norm. We maintain our preference

for large banks –

ICICIBC, HDFCB, and SBIN.

6 August 2020

Sector Update | Financials

Exhibit 1:

Guidelines on resolution framework for COVID-19 related stress

For Personal loans

For other exposures

Applicability

(a) All commercial Banks

(b) All India Financial Institutions

(c) All Primary (Urban) Co-operative banks/State Co-operative (c) All Primary (Urban) Co-operative banks/State Co-operative

banks/District Central Co-operative Banks

(d) All NBFCs (including HFCs)

Eligible

(a) For accounts that are standard and not in default for more (a) For accounts that are standard and not in default for more

Borrowers

than 30 days as on 1st March, 2020

(b) For accounts which remains standard till the date of

invocation of resolution under this framework

Timeline for

(a) The resolution shall be invoked before 31st December,

(a) The resolution shall be invoked before 31st December, 2020

Resolution

2020

(b) The resolution shall be implemented within 180 days from

(b) The resolution shall be implemented within 90 days from

the date of invocation

Inter-creditor

Not Applicable

(a) Approval of 75% of lenders by value (fund + non-fund) and

Agreement

60% by number is required

(ICA) norms

(b) ICA shall be signed within 30 days from the date of

invocation

Other

A Resolution is deemed to be implemented only if:

(a) The expert committee shall recommend a list of financial

Features of

(a) all related documents between lending institutions and

parameters which would be required to be factored into the

Resolution

borrowers are completed

assumptions of resolution plan and sector specific

(b) The changes in terms of conditions of the loans gets duly

benchmark

reflected in the books of the lending institutions

(b) Such parameters would be notified within 30 days

vetting the resolution plans where the aggregate exposure

stands at INR15b and above

(d) The resolution plan may include sanctioning of additional

credit facilities

(e) The resolution plan with an exposure of INR1b and above

shall require an independent credit evaluation by any one

credit rating agency authorized by the RBI

Extension

The maximum tenor for which the restructuring could be

Period

allowed stands at two years

Additional

Where the resolution plan is implemented, the lending

Provisions

institutions shall keep provisions which are higher of:

Requirements

(a) Provisions as per IRAC norms, or

(b) 10% of the renegotiated debt exposure (residual debt)

However, lenders which do not sign the ICA within 30 days

would be required to keep provisions at 20% of the debt on

their book (carrying debt)

Provisions made above can be reversed if:

Provisions made above can be reversed if

(For ICA signatories):

(a) 50% of the above provisions can be reversed upon the

payment of 20% of the residual debt by the borrower

without slipping into NPA post implementation

(b) Remaining 50% can be reversed upon the payment of

additional 10% of the residual debt by the borrower

additional 10% of the residual debt by the borrower without

without slipping into NPA post implementation

slipping into NPA post implementation

For non ICA signatories:

while half of the provisions can be

reversed upon repayment of 20% of carrying debt, the other

half can be reversed upon repayment of additional 10% of the

carrying debt, subject to the IRAC provisions being maintained

a) If a resolution plan is implemented, the asset classification a) If a resolution plan is implemented, the asset classification

of accounts classified as Standard would be retained as

of accounts classified as Standard would be retained as such

such

b) Where the borrower has slipped into NPA between the

invocation and implementation period, the account would

be upgraded as standard as on the date of implementation

be upgraded as standard as on the date of

c) Additional finance to the borrowers for whom the

implementation

resolution plan has been invoked, may be classified as

c) Additional finance to the borrowers for whom the

Standard asset till the implementation of the plan

resolution plan has been invoked, may be classified as

Standard asset till the implementation of the plan

Source: Company, MOFSL

6 August 2020

Reversal of

the

Provisions

Asset

Classification

Sector Update | Financials

Exhibit 1:

MPC keeps repo rate unchanged at 4%

4.25

3.35 4.00

Exhibit 2:

Banking system liquidity still in ample surplus

MSF

(1)

(3)

(5)

(7)

-4.1

(% of NDTL)

Liquidity deficit

(%)

Repo

Reverse repo

As on 4 Aug’20

Source: RBI, MOFSL

Exhibit 3:

CPI inflation in Jun’20 higher than expected…

4.9

Jun-16

Jun-17

Jun-18

Jun-19

Jun-20

Headline CPI

(% YoY)

6.1

Core CPI*

Exhibit 4:

…and 1QFY21 headline inflation lower marginally

Headline CPI

(% YoY)

Core CPI*

6.5

4.9

* ‘Housing’, ‘Clothing and Footwear’ and ‘ Miscellaneous items’

Source: Central Statistics Office (CSO), MOFSL

Exhibit 5:

Food inflation eased in Jun’20…

Cereals & products

Pulses & products

Sugar & products

Vegetable (0.21)

Other 'food & beverages'

Pan, tobacco & intoxicants

Fuel & light

Housing

Clothing & footwear

Fuel for vehicles

Other 'Miscellaneous' items

(0.08)

(0.02)

(0.08)

0.09

0.08

(0.02)

0.01

0.04

(0.07)

(pp)

Exhibit 6:

…and core inflation remains at elevated levels

Core CPI*

CPI excl Food

(% YoY)

4.9

5.0

Jun-18

Oct-18

Feb-19

Jun-19

Oct-19

Feb-20

Jun-20

* ‘Housing’, ‘Clothing and Footwear’ and ‘ Miscellaneous items’

Source: Central Statistics Office (CSO), MOFSL

PSU banks have already

restructured MSME

accounts as per earlier

relaxations

Exhibit 7:

Detail of MSME accounts restructured by leading PSU banks

INRm

No of MSME Restructured (In 000)

Amount of Restructuring (INRb)

As a % of total loans

As a % of MSME loans

*As on 4QFY20 since results are awaited

BoB*

BOI

CBK

37.1 119.4 149.5

17.3 27.6

44.6

0.3% 0.7% 0.7%

2.0% 4.8% 4.2%

INBK *

54.2

20.7

1.0%

5.6%

PNB* UNBK*

37.4

42.8

17.6

11.2

0.4% 0.4%

2.5% 1.6%

Source: MOFSL, Company

6 August 2020

Sector Update | Financials

Exhibit 8:

O/s loans to MSME stands at INR17.7t as of Jan’20

Very Small

15.9

4.3

7.7

1.3

1.9

0.8

17.0

4.6

8.3

1.4

2.0

0.8

17.2

4.6

8.4

1.4

2.0

0.8

Micro-1

17.5

4.7

8.5

1.4

2.1

0.8

Micro-2

18.3

4.8

8.9

1.5

2.2

0.9

18.8

5.0

9.2

1.6

2.3

0.9

Small

18.5

4.8

9.0

1.5

2.2

0.9

Medium

18.3

4.7

8.9

1.5

2.2

0.9

MSME

17.9

4.7

8.7

1.4

2.2

0.9

17.7

4.5

8.7

1.5

2.2

0.9

Source: MOFSL, Transunion CIBIL

Exhibit 9:

PSUs form ~50% of o/s MSME loans, while private banks form ~38%

12.5%

PSU Banks

49.8%

37.6%

Pvt Banks

NBFCs

Source: MOFSL, Transunion CIBIL

NPA for medium

enterprises has been

witnessing an increasing

trend

Exhibit 10:

NPA trends across different segments; medium enterprises’ NPA stands at

18.7%

Very Small

16.7%

16.0%

17.3%

Micro-1

17.1%

Micro-2

17.0%

16.2%

Small

17.1%

Medium

18.7%

18.1%

11.1%

10.4%

7.9%

10.5%

9.8%

7.7%

11.6%

11.5%

11.7%

10.4%

8.1%

10.7%

9.8%

7.5%

12.0%

10.4%

8.1%

11.9%

11.3%

10.4%

8.1%

10.3%

10.8% 11.1%

8.2%

8.4%

7.9%

Source: MOFSL, Transunion CIBIL

6 August 2020

Sector Update | Financials

NPAs for MSME segment

stand higher for PSU banks,

at ~3x of private banks

Exhibit 11:

NPA for MSME segment stands much higher at 18.7% for PSU banks v/s ~5% for

private banks

PSU Banks

16.6%

7.3%

3.5%

16.8%

17.9%

17.8%

Pvt Banks

18.1%

17.3%

NBFCs

18.2%

18.9%

18.7%

5.2%

3.0%

5.4%

3.6%

5.8%

3.7%

4.9%

3.8%

4.7%

4.0%

5.8%

4.1%

6.6%

4.3%

7.6%

5.0%

Source: MOFSL, Transunion CIBIL

Exhibit 12:

Moratorium and provisioning details across banks

Moratorium availed

INRb

AXSB

BANDHAN

HDFCB

ICICIBC

IIB

KMB

RBK

AUBANK

SBIN*

SBI Cards

% of customers

~11%

1.5Lacs

% of loans

~9.7%

~24%

~9%

~17.5

~16%

~9.65%

~24%

~13.7%

~11%

~9.5%

~7%

COVID-19

Provision

30.0

14.4

15.5

82.8

12.0

12.6

1.9

3.6

2.8

30.0

4.9

Provisions

Contingent/Additional/

Floating Provision

38.9

3.4

54.5

14.0

0.0

Total Provision

68.9

17.8

70.0

96.7

12.0

12.6

1.9

3.6

2.8

30.0

4.9

*For SBIN, moratorium book represents term loans that paid less than two EMIs

Exhibit 13:

Loan mix across banks as of 1QFY21

Loan Mix (%)

Retail

SME

Agri

Corporate

International

AXSB

53.2

10.2

28.8

7.9

HDFCB

41.3

6.0

52.7

ICICIBC

60.0

7.4

25.2

7.5

IIB

52.1

5.5

42.4

KMB

49.4

13.3

37.3

30.7

18.1

11.1

40.1

SBIN

31.4

11.7

8.6

33.9

14.4

Source: MOFSL, Company

6 August 2020

Sector Update | Financials

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 - 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/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

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

6 August 2020

Sector Update | Financials

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.

* 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.

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6 August 2020