Sector Update | 1 March 2019
Automobiles
Wholesales in line across segments
Outperformance by HMCL, but a big miss by RE
Wholesales in the month of Feb-19 were in line with our estimates across segments. PV
volumes remained weak but appear to be recovering led by new product launches and low
channel inventory. CV volumes declined 4.9% YoY, as growth in LCVs (+3.3% YoY) was
offset by lower M&HCV volumes (-11.1% YoY). Tractors volume growth slowed down to
3.3% YoY (-7% MoM) owing to a high base and muted farm sentiment in key markets. In
this note, we provide key highlights of the volume trends (including exports) in Feb-19.
“The tractor industry has
remained subdued in
February. However, it is
expected that positive
sentiment associated with
the recently executed direct
beneficiary transfers to
marginal farmers and other
pro-rural initiatives by the
government, will help
create momentum for
tractor sales in the near
term.”
Rajesh Jejurikar, President,
Farm Equipment Sector,
M&M
PVs – new products and low inventory drive volumes:
PV volumes were weak for the
eighth consecutive month in Feb’19, but nevertheless showed signs of a recovery after
being hit by negative sentiment due to higher fuel prices, an increase in
financing/insurance cost, etc. We note that new product launch in UVs helped MM (PV)
wholesales grow 16.6% YoY, while MSIL’s dispatches declined 0.8% YoY.
CVs – drag in volumes led by TTMT:
CVs wholesales were in line, with AL and TTMT’s
volumes trending broadly in line with our estimates. M&HCV volumes declined 11.1%
YoY (-1.6% MoM), while LCV volumes grew 3.3% YoY (+7.2% MoM). However, for YTD
FY19, both the segment grew in the range of 16-21% YoY. TTMT attributed lower sales
primarily to subdued sentiment, high interest rates, the lagged effect of the
implementation of revised axle load norms, slowing industrial output and declining IIP
growth index.
Tractors – ESC continues outperforming MM:
Tractors volume declined 3% YoY (-7%
MoM), led by a high base and muted farm sentiment in key markets. ESC’s volume grew
12.7% YoY (+20.8% MoM), continuing to outperform the MM tractor segment, where
volumes declined 8.1% YoY (-14.6% MoM).
Positive surprise (Var %)
Escorts (+4.2%)
HMCL (+12.6%)
In-line (Var %)
Maruti Suzuki (0.0%)
M&M (+1.1%)
Ashok Leyland (-1.1%)
Tata Motors (-0.6%)
TVSL (+0.6%)
Negative surprise (Var %)
Royal Enfield (-15.1%)
Bajaj Auto (-3.7%)
Valuation and view:
We prefer PVs over CVs/2Ws due to their stronger volume growth and a
stable competitive environment. Our top picks in autos are MSIL and MSS among large caps,
and ENDU and EXID among midcaps.
Exhibit 1: Snapshot of volumes for February-19 (incl Exports)
Company Sales
Feb-19
Feb-18
YoY (%)
chg
Jan-19
MoM (%)
chg
FY19 YTD
FY18 YTD
(%) chg
11.8
3.2
11.5
6.4
29.0
16.0
21.2
18.4
10.0
2W
1,130,381
1,113,483
1.5
1,117,170
1.2
13,334,685
11,926,060
Cars
120,579
127,551
-5.5
123,931
-2.7
1,406,822
1,362,648
Uvs + MPVs
92,971
83,148
11.8
89,402
4.0
936,684
840,352
Total PVs
213,550
210,699
1.4
213,333
0.1
2,343,506
2,203,000
3Ws
84,498
75,238
12.3
76,046
11.1
914,563
708,861
M&HCVs
37,525
42,209
-11.1
38,141
-1.6
392,102
338,110
LCVs
32,784
31,736
3.3
30,576
7.2
348,356
287,372
Total CVs
70,309
73,945
-4.9
68,717
2.3
740,458
625,482
Tractors
26,218
27,120
-3.3
28,203
-7.0
395,255
359,473
*2W: BJAUT,HMCL, TVSL,EIM; PVs: MSIL, MM & TTMT; 3Ws: BJAUT, TVSL & MM; CVs: TTMT, AL, MM, EIM; Tractors: MM, ESC
Jinesh Gandhi - Research analyst
(Jinesh@MotilalOswal.com); +91 22 6129 1524
Research analyst: Deep Shah
(Deep.S@MotilalOswal.com); +91 22 61291533/
Suneeta Kamath
(Suneeta.Kamath@MotilalOswal.com); +91 22 61291534
1 March 2019
Investors are advised to refer through important disclosures made at the last page of the Research Report.
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Automobiles
MARUTI SUZUKI: In-line at 148.7k units; domestic sales grew 0.9% YoY, exports declined 19.6% YoY
MSIL’s volumes declined 0.8% YoY to 148.7k (in-line), as domestic volume growth (+0.9% YoY to 139.1k units v/s
our estimate of 140.9k units) was offset by lower exports (-19.6% YoY to 9.6k units v/s our estimate of 7.8k units).
UV volumes grew 7.4% YoY to 21.8k units (in-line).
Dispatches of Ciaz declined 37% YoY to 3.1k units (our estimate: 4k units).
Sales of new WagonR are reported under the compact segment, while those of old WagonR are reported under
the mini segment. Hence, sales in both the segments are not comparable YoY.
Snapshot of volumes for February-19
YoY
Company Sales
Maruti Suzuki
LCVs
Vans
Mini Segment
Compact
Mid Size - CIAZ
UVs
Total Domestic
Export
Feb-19
148,682
2,188
14,565
24,751
72,678
3,084
21,834
139,100
9,582
Feb-18
149,824
1,252
12,425
33,789
65,213
4,897
20,324
137,900
11,924
MoM
YoY (%)
MoM
Jan-19
chg
(%) chg
-0.8 151,721 -2.0
74.8
2,710
-19.3
17.2
15,145
-3.8
-26.7 33,408 -25.9
11.4
65,523 10.9
-37.0
2,934
5.1
7.4
22,430
-2.7
0.9
142,150 -2.1
-19.6
9,571
0.1
Residual
Monthly
FY19
Gr. (%)
Run rate
estimate
1,868,099 5.0
163,726
21,772
117.0
480
180,704
16.5
18,536
408,803
-4.3
46,579
851,433
13.8
72,161
45,952
-22.0
3,455
258,802
2.0
20,168
1,767,466 6.9
161,379
100,633 -20.2
2,347
FY19 YTD
Monthly
Run rate
154,943
1,936
14,743
32,929
70,843
3,863
21,694
146,008
8,935
FY19 YTD FY18 YTD (%) chg
1,704,373
21,292
162,168
362,224
779,272
42,497
238,634
1,606,087
98,286
1,618,976 5.3
8,621
147.0
141,448 14.6
389,672
-7.0
679,590 14.7
54,592
-22.2
230,995
3.3
1,504,918 6.7
114,058 -13.8
M&M: Dispatches in line at ~75k units; Auto sales up 9.5% YoY, Tractor sales down 8.1% YoY
M&M’s automotive segment volumes grew 9.5% YoY to 56k units (our estimate: 53.8k units).
UV volumes increased 10.3% YoY (+8.8% MoM) to 48.8k (our estimate: 46.1k). Passenger UV sales grew 16.6%
YoY, while pick-ups/SCVs grew 2.2% YoY. 3W volumes increased 10% YoY to 5.6k (-5.8% MoM).
Tractor volumes declined 8.1% YoY (-14.6% MoM) to 18.9k units (our estimate: 20.4k units).
Snapshot of volumes for February-19
YoY
Company Sales
Mahindra & Mahindra
UV (incl. pick-ups)
LCV & M&HCV
Three-Wheelers
Tractors
Feb-19
74,983
48,846
1,507
5,652
18,978
Feb-18
71,785
44,268
1,721
5,138
20,658
MoM
YoY (%)
MoM
Jan-19
chg
(%) chg
4.5
74,712
0.4
10.3
44,907
8.8
-12.4
1,590
-5.2
10.0
6,003
-5.8
-8.1
22,212 -14.6
Residual FY19 YTD
Monthly Monthly
FY19
(%) chg
Gr. (%)
Run rate Run rate
estimate
9.9
944,967
9.1
91,796
77,561
10.0
517,871
8.5
52,501
42,306
17.0
19,813
15.0
2,516
1,572
24.4
66,096
21.0
6,340
5,432
6.8
341,187
7.5
30,439
28,250
FY19 YTD FY18 YTD
853,171 776,564
465,370 422,909
17,297 14,786
59,756 48,023
310,748 290,846
ESCORTS: Volumes up 12% YoY to ~7.2k units (in-line)
Escorts’ volumes grew 12% YoY (+20.8% MoM), driven by domestic sales growth of 9.9% to 6.9k units.
Export volumes increased 92.8% YoY to 322 units.
Snapshot of volumes for February-19
YoY
Company Sales
Escorts
MoM
Residual FY19 YTD
Monthly Monthly
YoY (%)
MoM
FY19
Feb-19 Feb-18
FY19 YTD FY18 YTD (%) chg
Jan-19
Gr. (%)
Run rate Run rate
chg
(%) chg
estimate
7,240
6,462
12.0
5,991
20.8 84,507 68,627
23.1
96,500
20.0 11,993
7,682
TATA MOTORS: In-line at 60.2k units, CV vols down 8.6% YoY to 41.9k units, PV vols up 2% YoY to 18.2k units
CV volumes declined 8.6% YoY (+8.2% MoM), led by a decline in M&HCV (-17.5% to 17.8k units v/s our estimate
of 18.9k) and LCV (-0.7% to 24.1k v/s our estimate of 22.5k) volumes.
UV volumes grew 26% YoY to 7.7k, driven by continued momentum in Nexon and the launch of Harrier. Car
volumes declined 10.6% YoY (-16.1% MoM) to 10.5k units (our estimate: 11.9k units).
1 March 2019
2
 Motilal Oswal Financial Services
Automobiles
TTMT’s exports declined 39% YoY to 2.9k units due to congestion at the Bangladesh border, new regulations and
political uncertainty in Sri Lanka, and a slump in the Middle East automotive market.
MoM
YoY (%)
MoM
Jan-19
chg
(%) chg
-5.7
58,185
3.4
-17.5 17,541
1.5
-0.7
21,229
13.7
-8.6
38,770
8.2
-10.6 12,495 -16.1
26.0
6,920
11.6
Residual FY19 YTD
Monthly Monthly
FY19
(%) chg
Gr. (%)
Run rate Run rate
estimate
16.7
731,580
14.5
74,782
59,709
20.2
222,569
15.9
21,586
18,271
15.4
293,599
14.5
32,839
23,705
17.4
516,169
15.1
54,426
41,977
-0.2
136,562
-0.6
12,019
11,322
56.7
78,850
49.3
8,338
6,410
Snapshot of volumes for February-19
YoY
Company Sales
Tata Motors
HCV's
LCV's
CV's
Cars
UV's
Feb-19
60,151
17,806
24,135
41,941
10,484
7,726
Feb-18
63,761
21,594
24,308
45,902
11,728
6,131
FY19 YTD FY18 YTD
656,798
200,983
260,760
461,743
124,543
70,512
562,906
167,250
225,920
393,170
124,736
45,000
AL: Dispatches in line at 18.2k units (+0.3% YoY); HCV sales down 3.2% YoY to 13.3k (our estimate: 14k)
Wholesales grew 0.3% YoY (-7.6% MoM) to 18.3k units (in line with our estimate of 19k).
HCV dispatches declined 3.2% YoY (-9.5% MoM) to 13.3k units (our estimate: 14k units), while LCV dispatches
grew 11% YoY to 4.9k units (in-line).
Snapshot of volumes for February-19
YoY
Company Sales
Ashok Leyland
CV (ex LCV)
LCV
Feb-19
18,245
13,291
4,954
MoM
Residual FY19 YTD
Monthly Monthly
YoY (%)
MoM
FY19
Feb-18
FY19 YTD FY18 YTD (%) chg
Jan-19
Gr. (%)
Run rate Run rate
chg
(%) chg
estimate
18,181
0.4
19,741
-7.6
175,834 152,383 15.4
198,836
13.7
23,002
15,985
13,726
-3.2
14,694
-9.5
126,827 114,338 10.9
144,154
9.7
17,327
11,530
4,455
11.2
5,047
-1.8
49,007 38,045
29
54,683
25.9
5,676
4,455
EICHER MOTORS: RE wholesales of 62.6k units significantly below estimate of 73.8k units
Royal Enfield volumes declined 14.3% YoY (-13.9% MoM) to 72.7k units (our estimate: 68k).
Dispatches in the domestic market declined 15.8% YoY to 60.1k, while exports grew 48.8% YoY to 2.7k units.
VECV volumes declined 6.7% YoY to 6.4k (in-line), with domestic LMD/HD volumes down 9.3%/15.7% YoY. Buses
volumes grew 12% YoY.
Snapshot of volumes for February-19
YOY
Eicher Motors
Royal Enfield
VECV
Domestic LMD
Domestic HD
Domestic Buses
VTI
Total Domestic
Exports
Feb-19
62,630
6,428
3,258
1,134
945
160
5,497
931
MoM
YoY (%)
MoM
Feb-18
Jan-19
FY19 YTD
chg
(%) chg
73,076
-14.3 72,701 -13.9 765,267
6,889
-6.7
5,906
8.8
64,292
3,594
-9.3
3,450
-5.6
33,560
1,345
-15.7
925
22.6
11,748
844
12.0
802
17.8
9,095
93
72.0
98
63.3
1,095
5,876
-6.4
5,275
4.2
55,498
1,013
-8.1
631
47.5
8,794
Residual FY19 YTD
FY19
YoY (%) Monthly Monthly
(%) chg
Run rate Run rate
estimate
chg
2.8
850,308
3.6
85,041
69,570
13.7
73,556
11.6
9,264
5,845
17.5
37,962
15.0
4,402
3,051
14.1
13,980
13.0
2,232
1,068
0.6
10,442
-0.5
1,347
827
23.2
1,213
0.0
118
100
13.8
63,597
9.6
8,099
5,045
13.7
9,959
10.6
1,165
799
FY18 YTD
744,405
56,522
28,563
10,293
9,041
889
48,786
7,736
Bajaj Auto: Dispatches up 9.8% YoY (-3.5 MoM) to 393k units (our estimate: 408k units)
2W sales grew 10.2% YoY (-6.4% MoM) to ~328k units (our estimate: 355k units) – domestic 2W sales grew 6.3%
YoY to 186.5k units, while exports increased 15.9% YoY to 141.5k units.
Total 3W sales grew 7.8% YoY (+148% MoM) to 65k units (our estimate: 53k units).
Domestic volumes grew 3.6% YoY (-4.2% MoM) to 221.7k units (our estimate: 237.5k units).
Exports volumes increased 19.1% YoY (-2.5% MoM) to 171.4k units (our estimate: 170.5k units).
1 March 2019
3
 Motilal Oswal Financial Services
Automobiles
Snapshot of volumes for February-19
YoY
Company Sales
Bajaj Auto
Motorcycles
Total Two-Wheelers
Three-Wheelers
Domestic
Exports
Feb-19
393,089
327,985
327,985
65,104
221,706
171,383
Feb-18
357,883
297,514
297,514
60,369
214,023
143,860
MoM
YoY (%)
MoM
Jan-19
chg
(%) chg
9.8
407,150 -3.5
10.2 350,460 -6.4
10.2 350,460 -6.4
7.8
56,690
14.8
3.6
231,461 -4.2
19.1 175,689 -2.5
FY19 YTD FY18 YTD (%) chg
4,626,152
3,913,335
3,913,335
712,817
2,681,588
1,944,564
3,672,443
3,099,395
3,099,395
573,048
2,140,614
1,531,829
26.0
26.3
26.3
24.4
25.3
26.9
FY19
estimate
4,965,898
4,209,206
4,209,206
756,692
2,871,103
2,094,795
Residual
Monthly
Gr. (%)
Run rate
23.9 339,746
24.9 295,871
24.9 295,871
18.7
43,875
22.5 189,515
26.0 150,231
FY19 YTD
Monthly
Run rate
420,559
355,758
355,758
64,802
243,781
176,779
TVS Motors: Dispatches up 3% YoY (+5.9% MoM) at 299.4k units (in-line)
Motorcycle volumes grew 8.2% YoY (+10.2% MoM) to 122.6k units (our estimate: 115k units).
Scooters dispatches declined 7.1% YoY (+1.9% MoM) to 86.9k units (our estimate: 96k units).
Mopeds sales grew 2.8% YoY (+4.7% MoM) to 76.2k units (our estimate: 73.5k units).
3W sales increased 41.2% YoY (+2.9% MoM) to 13.7k units (our estimate: 13.1k units).
Domestic volumes grew 0.3% YoY (+1.2% MoM) to 232.8k units (our estimate: 235.1k units).
Exports volumes grew 13.7% YoY (+26.4% MoM) to 66.6k units (our estimate: 62.5k units).
Snapshot of volumes for February-19
YoY
Company Sales
TVS Motor
Motorcycles
Scooters
Mopeds
Three-Wheelers
Total Domestic
Total Exports
Feb-19
Feb-18
MoM
YoY (%)
MoM
Jan-19
chg
(%) chg
3.0
282,630
5.9
8.2
111,253 10.2
-7.1
85,299
1.9
2.8
72,725
4.7
41.2
13,353
2.9
0.3
229,980
1.2
13.7
52,650
26.4
Residual
Monthly
Gr. (%)
Run rate
15.3 408,841
16.1 156,178
21.0 170,238
2.1
69,469
57.0
12,955
12.9 360,747
27.7
48,093
FY19 YTD
Monthly
Run rate
326,220
128,928
109,331
75,053
12,908
263,917
62,303
FY19 YTD FY18 YTD (%) chg
3,588,418
1,418,211
1,202,638
825,579
141,990
2,903,085
685,333
3,139,451
1,221,164
1,033,946
796,551
87,790
2,624,864
514,587
14.3
16.1
16.3
3.6
61.7
10.6
33.2
299,353 290,673
122,551 113,296
86,935 93,573
76,125 74,073
13,742
9,731
232,783 232,109
66,570 58,564
FY19
estimate
3,997,259
1,574,389
1,372,876
895,048
154,945
3,263,832
733,426
Hero MotoCorp: Dispatches of 617.2k significantly above estimate of 548k
HMCL’s Feb-19 wholesales of 617.2k (-2% YoY) came in significantly above our estimate of 548k.
Management expects the demand scenario to improve on account of (a) increased liquidity in the market via
government schemes of direct benefit to farmers and (b) various measures taken by OEMs to boost retail sales.
Snapshot of volumes for February-19
YoY
Company Sales
Hero MotoCorp
MoM
YoY (%)
MoM
FY19
Feb-19 Feb-18
FY19 YTD FY18 YTD (%) chg
Jan-19
Gr. (%)
chg
(%) chg
estimate
617,215 629,597 -2.0 582,756
5.9 7,237,872 6,861,096 5.5 7,885,710 3.9
Residual
Monthly
Run rate
647,838
FY19 YTD
Monthly
Run rate
657,988
1 March 2019
4
 Motilal Oswal Financial Services
Automobiles
Exhibit 2: Comparative valuations
CMP
Auto OEM's
Bajaj Auto
Hero MotoCorp
TVS Motor
M&M
Maruti Suzuki
Tata Motors
Ashok Leyland
Eicher Motors
Escorts
Auto Ancillaries
Bharat Forge
Exide Industries
Amara Raja Batteries
BOSCH
Endurance Tech
Motherson Sumi
CEAT
(INR)*
2,863
2,674
468
649
6,933
180
87
19,938
674
519
219
728
18,749
1,275
161
1,111
Rating
Buy
Neutral
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
TP
(INR)
3,045
2,928
576
840
8,131
166
110
23,960
754
568
280
855
20,147
1,476
170
1,370
P/E (x)
FY19E
18.0
15.6
30.8
15.6
28.3
-41.4
12.3
23.3
12.3
21.9
24.5
25.5
34.5
36.7
30.5
17.2
FY20E
16.2
14.8
21.3
13.7
23.8
10.5
11.8
19.9
11.1
19.0
20.2
20.3
29.7
28.5
21.3
13.5
EV/EBITDA (x)
FY19E
12.9
9.1
15.5
12.0
15.6
4.3
7.9
18.4
9.5
12.7
13.1
12.8
23.5
16.6
10.0
9.1
FY20E
10.8
8.5
11.4
10.0
13.3
3.3
6.1
16.3
8.3
11.0
10.9
10.2
19.9
13.3
7.1
7.8
RoE (%)
FY19E
22.8
28.1
23.1
14.5
16.3
-1.8
26.7
29.5
20.0
21.9
12.7
15.6
15.9
20.7
16.8
9.6
FY20E
22.8
27.7
27.8
14.1
17.4
8.5
24.1
27.7
18.8
21.5
14.1
17.1
17.9
22.8
21.0
11.2
Div Yield (%)
FY19E
2.1
3.9
0.9
1.5
1.4
0.2
2.9
0.6
0.7
1.0
1.2
0.6
1.0
0.5
0.8
0.6
FY20E
2.4
4.3
1.1
1.5
1.8
0.2
3.1
0.6
0.7
1.2
1.5
0.8
1.1
0.9
1.3
0.8
EPS CAGR
(%)
FY18-20E
8.2
-1.1
25.6
7.5
4.6
-13.3
10.9
11.8
23.7
21.8
15.1
14.0
16.0
24.1
18.1
13.6
1 March 2019
5
 Motilal Oswal Financial Services
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
Automobiles
* 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 BSE 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/Associate%20Details.pdf
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have actual/beneficial ownership of 1% or more securities in the subject
company at the end of the month immediately preceding the date of publication of the Research Report.
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.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may
have received any compensation from the subject company in the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure of Interest Statement in
this document. This should, however, not be treated as endorsement of the views expressed in the report. 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.
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.
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.
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.
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.:022-30801085.
Registration details of group entities: 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.
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
No
1 March 2019
6