Gujarat State Petronet
Estimate changes
TP change
Rating change
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8 June 2020
4QFY20 Results Update | Sector: Oil & Gas
CMP: INR221
TP: INR300 (+36% )
LNG terminal capacity to underpin volume growth
Buy
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
GUJS IN
564
124.9 / 1.6
263 / 146
6/16/33
130
Financials & Valuations (INR b)
Y/E March
2020 2021E 2022E
Sales
19.4 20.6 22.9
EBITDA
15.7 16.7 18.4
PAT
11.1 10.2 11.2
EPS (INR)
19.7 18.0 19.9
EPS Gr. (%)
39.5 -8.3 10.4
BV/Sh.(INR)
119.2 134.8 152.3
Ratios
Net D:E
-0.6 -0.7 -0.7
RoE (%)
17.8 14.2 13.9
RoCE (%)
17.5 14.8 14.4
Payout (%)
12.2 13.3 12.1
Valuations
P/E (x)
11.4 12.4 11.3
P/BV (x)
1.9
1.7
1.5
EV/EBITDA (x)
8.3
7.3
6.0
Div. Yield (%)
0.9
0.9
0.9
FCF Yield (%)
11.5
8.6 10.6
Lower-than-expected volumes and implied tariff led to an EBITDA miss, while
lower tax rate helped GSPL’s PAT (in-line) during 4QFY20. The QoQ volume decline
was primarily led by lower gas offtake from various fertilizer and refining/petchem
units due to the nationwide COVID-19 led lockdowns.
Despite the COVID-19 impact, FY20 transmission volumes were up 9% YoY to
37.8mmscmd with implied tariff at INR1,379/scm (v/s INR1,455/scm in FY19).
The company is a direct beneficiary of the (a) upcoming LNG terminals in Gujarat
(the state tops India’s gas energy mix at 25%), and (b) renewed focus on reducing
industrial pollution by the NGT (Gujarat has five geographical areas (GAs)
identified as severely/critically polluted – like Morbi).
There are concerns over tariff reduction for the company, in line with the revised
new tax rate and over-utilization of the pipeline. However, the increase in capex
(due to capacity expansion) should ensure lesser impact on its tariff. We maintain
Buy
on the stock.
Transmission volume for the quarter stood at 36.8mmscmd (-6% est., +14% YoY),
with Implied tariff at INR1,284/scm (-8% est., -12% YoY).
Thus, net sales came in at INR4.4b (+1% YoY) and EBITDA at INR3.6b (+8% YoY),
both lower than est. by 8% for the quarter.
Lower interest rate led to PBT of INR2.8b. Tax rate for the quarter was lower at
19.3%, clocking in-line PAT at INR2.3b (+47% YoY).
For FY20, EBITDA was up 2% YoY at INR15.8b with PBT at INR12.8b (+6% YoY). Tax
rate for the year stood at 13.3%, resulting in PAT of INR11.1b (+40% YoY).
The company had written back tax in the previous quarter as it moved to the new
lower tax regime.
Growth in volumes were led by CGD growing +36% YoY to 11mmscmd (+3% QoQ)
and Power growing +89% YoY to 5.5mmscmd (-7% QoQ).
Refinery/Petchem volumes declined 11% YoY to 10.7mmscmd (-10% QoQ), along
with fertilizer volumes at -13% YoY to 3.7mmscmd (-9% QoQ).
Others stood at 5.5mmscmd (+14% YoY, +36% QoQ).
The company is envisaging enhancement of its capacity in lieu of the upcoming
LNG terminals in Gujarat.
Apart from the recently commissioned Mundra LNG terminal (which is currently
running at 3.5mmtpa out of 5mmmtpa), Swan Energy (Jafrabad-FSRU) and HPCL-
Shapoorji (Charra LNG terminal) are expected to come up with 5mmtpa capacity
each over the next 2-3 years.
Apart from this, Petronet LNG is also expanding its Dahej LNG terminal by
2mmmtpa to 19.5mmtpa, which should be completed in another two years.
EBITDA miss led by lower volumes and tariff
Key operational highlights – Strong volume growth in CGD continues
Shareholding pattern (%)
As On
Mar-20 Dec-19 Mar-19
Promoter 37.6
37.6
37.6
DII
33.9
33.9
32.0
FII
15.8
15.9
16.5
Others
12.7
12.6
13.9
FII Includes depository receipts
Valuation and view
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 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.
3 September 2019
1
 Motilal Oswal Financial Services
Gujarat State Petronet
The company has already received approvals from PNGRB for developing
connectivity for an upcoming RLNG terminal at Chhara.
All these factors provide GSPL with huge potential to carry additional
13.5mmtpa of gas on its grid (i.e. ~49mmscmd v/s current yearly volumes of
~38mmscmd).
Even considering the more imminent incremental volumes (PLNG’s utilization
track record along with strong JV affiliations and ramp-up at Mundra to full
capacity), additional volumes of ~3.5mmtpa (i.e. ~12.6mmscmd – ~33% growth
on current volumes), are likely in the near term.
The company currently has pipeline capacity of ~42mmscmd and considering
the above volumes, capex is inevitable.
In FY20, GSPL’s debt reduced by INR7.4b. The company generated ~10% FCF
yield, which is likely to continue in FY21/FY22E as well. The company plans on
using the excess cash flow for capacity expansion, and thus, would try and keep
implied tariffs at the same level (as IRR is based on gross block).
According to our interaction with the company, the volumes that dipped to
~27mmscmd in Apr’20 are up ~37mmscmd currently, and further jump to ~40-
42mmscmd is expected once GUJGA’s volumes stabilize.
We model in volume of 37.75mmscmd for FY21 (flat YoY) and 42mmscmd for
FY22E, with implied tariff of INR1,470/scm (v/s INR1,410/scm for 9MFY20).
However, we highlight that for a 10% change in implied tariff, EBITDA and EPS
changes by 12% and 15% for FY21/22E respectively.
The stock trades at 12.4x FY21 EPS of INR18 and 7.3x FY21 EV/EBITDA, ~38%
discount to its last 5-year averages. We value the stock at 8x FY22E EPS of
INR19.9 and add investments to arrive at a TP of INR300.
GSPL’s investment in GUJGA and Sabarmati Gas constitutes ~63% of its CMP,
implying 4x FY22E P/E for the standalone.
(INR Million)
FY20 Var. vs
4QE
est.
4,782
-8%
10.2
3,883
-8%
17.9
81.2
526
-8%
436
-21%
71
-6%
2,992
-7%
754
-28%
25.2
2,238
1%
46.0
46.8
-6%
-8%
Standalone - Quarterly Earning Model
Y/E March
Net Sales
YoY Change (%)
EBITDA
YoY Change (%)
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
YoY Change (%)
Margins (%)
Key Operating Parameters
Transmission Volume (mmscmd)
Implied Tariff (INR/mscm)
E: MOFSL Estimates
1Q
3,912
32.0
3,438
24.6
87.9
448
579
54
2,466
1,021
41.4
1,444
-5.3
36.9
FY19
2Q
3Q
5,983 4,538
78.7
29.6
5,163 3,532
80.8
18.9
86.3
77.8
436
440
557
551
384
76
4,553 2,618
1,319
882
29.0
33.7
3,233 1,736
82.7
-4.4
54.0
38.2
4Q
4,339
23.8
3,293
13.9
75.9
475
505
79
2,392
859
35.9
1,533
-2.6
35.3
1Q
5,126
31.0
4,020
16.9
78.4
489
479
77
3,129
1,068
34.1
2,061
42.7
40.2
FY20
2Q
3Q
5,411 4,524
-9.6
-0.3
4,371 3,800
-15.3
7.6
80.8 84.0
498
497
438
383
454
52
3,890 2,972
-659
751
-16.9 25.3
4,549 2,221
40.7 28.0
84.1 49.1
FY19
4Q
4,388
1.1
3,557
8.0
81.1
483
346
67
2,795
539
19.3
2,256
47.1
51.4
18,773
41.0
15,426
34.4
82.2
1,800
2,192
594
12,028
4,081
33.9
7,947
18.9
42.3
34.6
1,455
FY20
19,449
3.6
15,749
2.1
81.0
1,966
1,645
649
12,786
1,699
13.3
11,087
39.5
57.0
36.5 35.0
34.5 32.4 38.2 39.2 36.9 36.8
1,141 1,810 1,420 1,460 1,434 1,461 1,331 1,284
37.8 39.3
1,379 1,389
8 June 2020
2
 Motilal Oswal Financial Services
Gujarat State Petronet
The company is a key beneficiary of the National Green Tribunal’s (NGT) focus
on reducing industrial pollution. Gujarat has five GAs, which are classified as
severely/critically polluted by the NGT. Any directive by the NGT could see a
sudden jump in gas volume offtake for GUJGA (like we encountered at Morbi).
The GAs are Rajkot, Ankleshwar, Bhavnagar, Vapi and Tarapur (only one outside
Gujarat). For GUJGA, we model in volume growth of 10% CAGR for FY22E over
FY20. (link
to our report)
The shift to gas economies for various units in India is constrained by the lack of
gas availability and infrastructure for the same. However, with increased
government impetus on revival of stranded power plants, rising CGD spread or
building of cross-country pipeline, the advantage of customers shifting to gas
would be more.
In the near term, the power sector is expected to raise its consumption taking
advantage of lower LNG prices. According to a recent
news article,
in the current
low spot price environment, the Central Electricity Authority (CEA) indicates that
gas-based unit generation in Apr’20 was up ~20% (v/s in Mar’20).
Only Gujarat has ~30% of the 22,000MW installed capacity for gas power plants
in the country.
Lower spot prices would keep challenging the advantages and economies of
petcoke in the near future; however, even if the volume goes away, power and
industrial customers are expected to offset the decline.
Exhibit 1:
GSPL’s volume to stay strong – only network to connect all 5 LNG terminals in the state
Source: Company, MOFSL
Exhibit 2:
Transmission volume declines marginally
Volume (mmscmd)
Tariff (INR/mscm)
22 21 20 21 22 24 23 23 24 24 25 24 25 25 26 23 27 32 34 34 36 35 35 32 38 39 37 37
Source: MOFSL, Company
8 June 2020
3
 Motilal Oswal Financial Services
Gujarat State Petronet
Exhibit 3:
GSPL’s volume to stay strong
Volume (mmscmd)
Tariff (INR/mscm)
Exhibit 4:
With strong EBITDA margin
EBITDA Margin (%)
88
86
87
86
86
82
81
81
80
FY14
FY15
FY16
FY17
FY18
FY19
FY20 FY21E FY22E
FY14
FY15
FY16
FY17
FY18
FY19
FY20 FY21E FY22E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 5:
Return ratios to stay strong
RoE %
RoCE %
Exhibit 6:
Net debt to decline
18
18
14
15
14
14
0.10
0.02
-0.05
-0.21
-0.55 -0.55
-0.62 -0.66
-0.71
FY20 FY21E FY22E
Net Debt / Equity (x)
13
12
10
12
10
12
10
14
15
14
11
12
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E
Source: Company, MOFSL
FY14
FY15
FY16
FY17
FY18
FY19
Source: Company, MOFSL
Exhibit 7:
GSPL 1-year forward P/E trades at par with its LT
average of 11.8x…
P/E (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
16.7
18.0
14.4
13.0
8.0
3.0
6.8
11.8
9.1
Exhibit 8:
…while 1-year forward P/B trades at a discount of
~10% to LT average of 1.7x
P/B (x)
Avg (x)
Max (x)
4.1
Min (x)
+1SD
-1SD
2.9
1.7
0.5
1.7
1.2
2.1
0.8
3.0
12.0
1.5
Source: Company, MOFSL
Source: Company, MOFSL
8 June 2020
4
 Motilal Oswal Financial Services
Gujarat State Petronet
Financials and Valuations
Standalone - 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 after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Change (%)
Margin (%)
FY15
10,646
1.3
1,492
14.0
9,154
86.0
1,892
7,262
1,178
520
6,603
2,500
37.9
4,104
-2.1
38.5
FY16
9,919
-6.8
1,259
12.7
8,660
87.3
1,829
6,831
799
656
6,688
2,235
33.4
4,454
8.5
44.9
FY17
10,276
3.6
1,393
13.6
8,883
86.4
1,791
7,092
596
882
7,378
2,412
32.7
4,966
11.5
48.3
FY18
13,318
29.6
1,839
13.8
11,478
86.2
1,750
9,728
354
735
10,108
3,424
33.9
6,685
34.6
50.2
FY19
18,773
41.0
3,347
17.8
15,426
82.2
1,800
13,626
2,192
594
12,028
4,081
33.9
7,947
18.9
42.3
FY20
19,449
3.6
3,700
19.0
15,749
81.0
1,966
13,783
1,645
649
12,786
1,699
13.3
11,087
39.5
57.0
(INR Million)
FY21E
20,628
6.1
3,885
18.8
16,743
81.2
2,195
14,549
1,632
668
13,584
3,419
25.2
10,165
-8.3
49.3
FY22E
22,911
11.1
4,474
19.5
18,437
80.5
2,488
15,949
1,632
688
15,005
3,781
25.2
11,224
10.4
49.0
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY15
5,630
30,601
36,230
11,575
4,504
52,309
48,193
17,539
30,654
7,765
6,487
10,498
1,504
4,352
3,540
3,094
405
1,776
913
7,404
52,309
FY16
5,633
35,058
40,692
10,670
4,724
56,085
33,059
1,829
31,230
7,679
7,311
12,243
1,518
5,529
4,019
2,378
150
2,088
140
9,865
56,085
FY17
5,636
39,324
44,960
6,305
4,719
55,984
35,277
3,620
31,657
6,864
7,655
12,158
1,216
8,026
1,792
2,350
138
2,088
124
9,808
55,983
FY18
5,638
45,012
50,650
17,595
4,984
73,229
36,512
5,371
31,142
8,959
41,814
7,571
1,235
3,645
1,456
16,256
185
15,932
138
-8,685
73,229
FY19
5,640
51,800
57,440
12,856
5,226
75,522
43,245
7,170
36,075
4,194
42,772
6,459
2,081
1,583
1,516
13,978
238
13,523
216
-7,518
75,522
FY20
5,641
61,584
67,226
5,441
4,081
76,748
44,994
9,137
35,857
2,372
46,111
5,764
1,637
957
1,908
13,356
410
12,670
276
-7,592
76,748
FY21E
5,641
70,394
76,035
5,441
4,081
85,557
48,392
11,331
37,060
1,974
46,111
14,629
1,736
9,544
2,024
14,218
431
13,494
293
411
85,557
FY22E
5,641
80,261
85,902
5,441
4,081
95,425
51,117
13,819
37,298
1,541
46,111
26,385
1,928
20,683
2,248
15,911
496
15,090
325
10,474
95,425
8 June 2020
5
 Motilal Oswal Financial Services
Gujarat State Petronet
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
RoIC
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
FY15
7.3
10.6
64.2
1.2
19.9
30.8
21.1
3.5
12.6
14.6
0.5
7.3
11.9
10.2
13.3
0.2
0.2
38
52
14
3.4
6.2
0.0
FY16
7.9
11.1
72.2
1.5
22.8
28.4
20.1
3.1
13.3
15.2
0.7
7.6
11.6
10.1
13.1
0.3
0.2
43
56
6
5.1
8.5
-0.1
FY17
8.8
12.0
79.7
1.5
20.5
25.5
18.7
2.8
12.1
14.0
0.7
14.9
11.6
10.5
13.8
0.3
0.2
40
43
5
5.2
11.9
-0.2
FY18
11.9
15.0
89.8
1.8
16.9
18.9
15.0
2.5
10.5
12.2
0.8
33.4
14.0
11.6
24.6
0.4
0.2
34
34
5
0.5
27.5
-0.6
FY19
14.1
17.3
101.8
2.0
16.1
15.9
13.0
2.2
7.3
8.9
0.9
10.9
14.7
13.6
39.3
0.4
0.2
25
40
5
0.5
6.2
-0.5
FY20
19.7
23.1
119.2
2.0
12.2
11.4
9.7
1.9
6.7
8.3
0.9
25.7
17.8
17.5
44.0
0.4
0.3
24
31
8
0.4
8.4
-0.6
FY21E
18.0
21.9
134.8
2.0
13.3
12.4
10.2
1.7
5.9
7.3
0.9
19.4
14.2
14.8
39.4
0.4
0.2
23
31
8
1.0
8.9
-0.7
FY22E
19.9
24.3
152.3
2.0
12.1
11.3
9.2
1.5
4.9
6.0
0.9
23.8
13.9
14.4
43.4
0.4
0.2
24
31
8
1.7
9.8
-0.7
Standalone - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY15
6,603
1,892
720
-2,195
-871
6,149
6,268
-2,151
4,117
-386
372
-2,166
-2,713
-1,389
-658
-4,743
-641
4,992
4,352
FY16
6,688
1,829
402
-2,062
-650
6,208
6,027
-1,767
4,259
-824
714
-1,877
-978
-1,208
-813
-2,972
1,178
4,352
5,529
FY17
7,378
1,791
50
-2,228
2,534
9,526
9,436
-1,052
8,384
-346
826
-573
-4,329
-1,039
-1,017
-6,366
2,497
5,529
8,026
FY18
10,108
1,750
-381
-3,424
14,112
22,166
22,166
-3,331
18,835
-34,159
1,133
-36,357
11,290
-354
-1,128
9,810
-4,381
8,026
3,645
FY19
12,028
1,800
1,598
-4,081
-3,229
8,116
8,116
-1,967
6,148
-958
961
-1,965
-4,739
-2,192
-1,283
-8,213
-2,062
3,645
1,583
FY20
12,786
1,966
997
-1,699
373
14,423
14,423
73
14,496
-3,339
-1,368
-4,635
-7,414
-1,645
-1,357
-10,415
-627
1,583
957
(INR Million)
FY21E
13,584
2,195
964
-3,419
584
13,908
13,908
-3,000
10,908
0
668
-2,332
0
-1,632
-1,356
-2,988
8,587
957
9,544
FY22E
15,005
2,488
944
-3,781
1,077
15,732
15,732
-2,292
13,440
0
688
-1,604
0
-1,632
-1,356
-2,988
11,140
9,544
20,683
8 June 2020
6
 Motilal Oswal Financial Services
Gujarat State Petronet
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
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
********************************************************************************************************************************
8 June 2020
7
 Motilal Oswal Financial Services
Gujarat State Petronet
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.
8 June 2020
8