Motilal Oswal Financial Services

4 March 2020

Company Update | Sector: Retail

V-MART

BSE SENSEX

38,409

S&P CNX

11,251

CMP: INR2,150

TP: INR2,700 (+26%)

Upgrade to Buy

Value retailer with a well-run business

Long runway for growth



Stock Info

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

VMART IN

39 / 0.5

2867 / 1604

12/6/-22



48.0

Financials Snapshot (INR b)

FY20E FY21E FY22E



Y/E March

Sales

17.2 21.6 26.5

EBITDA

1.5

1.9

2.3

Adj. PAT

0.9

1.1

1.4

EBITDA Margin (%)

8.6

8.8

8.9



Adj. EPS (INR)

50.7 62.4 76.7

EPS Gr. (%)

28.5 23.0 22.9

BV/Sh. (INR)

276.9 339.3 416.1



Ratios

Net D:E

-0.2 -0.2 -0.3

RoE (%)

20.2 20.3 20.3

RoCE (%)

20.8 20.8 20.7

Payout (%)

0.0

Valuations

P/E (x)

42.4 34.4 28.0

The V-Mart edge – limited threat from national/regional players

EV/EBITDA (x)

25.9 20.0 16.0

Our channel checks across three cities in UP, Bihar and West Bengal indicated

EV/Sales (x)

2.2

1.8

1.4

V-Mart commands a strong competitive position in the value retail industry.

Div. Yield (%)

0.0

Our recent channel checks and meetings with regional value retailers

corroborated the advantage V-Mart enjoys over national and regional players.

Focus on lower-tier locations with early mover advantage, better product profile

at attractive price points and operational efficiencies appear to be working in the

company’s favor even as consumer spending remains weak.

The company has built a strong brand recall, a wide product assortment and

efficient cost/WC position. This has translated into better footfall/throughput

and lower cost/employee churn versus peers operating at same locations.

V-Mart’s EBITDA has grown only modestly and margin has contracted by 230bp

over FY18-20 due to a sharp fall in same-store sales growth (SSSG). However, we

note that this is more of an industry phenomenon and V-Mart will be quick to

capture opportunities once the operating environment recovers.

The company’s disciplined store expansion over the last five years based solely

on internal accruals has ensured a well-capitalized net cash balance sheet.

We upgrade V-Mart to Buy as it stands to benefit from (a) its strong cost

leadership at a time when regional players are facing pressure, (b) tailwinds from

better monsoon and agricultural output and (c) low SSSG/margin base. Also, the

~32% correction in the stock price from its peak in Aug’18 provides an attractive

entry point, in our view.

The company has a highly efficient cost structure and working capital position

Shareholding pattern (%)

compared to regional players, as reflected in its higher sales throughput,

As On

Dec-19 Sep-19 Dec-18

EBITDA margin profile and cash conversion ratio. Also, the threat from large

Promoter

52.0

54.0

national players is limited in that they cater to a different segment with a

DII

10.3

8.1

4.7

FII

26.1

28.3

30.0

different customer profile, product variety and price range. Average selling

Others

11.7

11.6

11.4

price (ASP) and bill size at large national players is almost double, which limits

FII Includes depository receipts

the risk of customer uptrading, particularly as V-Mart operates in lower-tier

Stock Performance (1-year)

cities where customers prefer brands that offer value products at a low price.

V-Mart Retail

3,500

3,000

2,500

2,000

1,500

Sensex - Rebased

Competition benign in a weak environment

V-Mart has been delivering modest SSSG in recent times. However, according to

our channel checks, this is more of an industry phenomenon than company

specific issue, as evident from the performances of almost all regional and

national players. Most stores we visited were delivering flat-to-declining SSSG

and running 10-15% below targets with stretching working capital. Several

regional players are closing down stores as their aggressive debt-funded

expansion and high working capital led to huge write-down, making such stores

unviable. That said, consolidation of about 200 regional stores in the

northern/eastern belts and a subdued base (with weak SSSG for the second

straight year) point toward return of market stability in FY21.

Research Analyst: Aliasgar Shakir(Aliasgar.Shakir@motilaloswal.com);

+91 22 6129 1565

Suhel Shaikh

(Suhel.Ahmad@MotilalOswal.com); +91 22 5036 2611 /

Anshul Aggarwal

(Anshul.Aggarwal@motilaloswal.com); +91 22 5036 2511

Investors are advised to refer through important disclosures made at the last page of the Research Report.

MotilalOswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

V-MART

Potential revival in FY21 could drive healthy margin upside

V-Mart’s EBITDA increased modestly to INR1.5b over FY18-20, with the margin down

230bp due to moderation in SSSG from 9% in FY18 to 3-4% in FY19/20. However,

good monsoon and healthy agricultural output (its largest customer source), along

with expectations of increased government spending on rural, will likely act as

catalyst for growth in FY21. We are factoring in 6% SSSG in FY21/22 and 65/70

annual store additions by V-Mart to arrive at revenue/PAT CAGR estimate of

24%/21% over FY20-22.

Cost and WC efficient, internally funded capex

V-Mart has maintained tight working capital and a well-capitalized balance sheet.

Over the last five years, it has funded store expansion through its internal accruals

and thus remained well capitalized in a bad market. This has allowed the company

to gain market share and further negotiate payments with its landlords/other

vendors to contain costs. It plans to continue its pace of stores addition at 20%

annually, again funded via its internal accruals.

Valuation: Upgrade to Buy

After languishing for the last 12 months due to weak earnings, the stock has

bounced back recently on the back of healthy earnings growth in 3QFY20. We have

turned positive on the stock on account of three factors (i) moderating competition

given ongoing consolidation in the regional market, which offers potential for

market share gains, (ii) low SSSG and margin base for the last five quarters (except

3QFY20), coupled with tailwinds from better monsoon and agricultural output and

(iii) huge runway for growth in the regional market. The stock has corrected by ~32%

from its peak in Aug’18 due to deceleration of PAT growth (9% CAGR) over FY18-20.

However, the improving prospects (PAT CAGR of ~23% over FY20-22E) will help

garner better valuation. We assign 20x EV/EBITDA on FY22E EBITDA of INR2.3b to

arrive at a target price of INR2,700 with implied P/E of 28x (closer to its five-year

average, but at a ~30% discount to its three-year average). We upgrade the stock to

Buy.

Exhibit 1: VMART: One-year forward P/E band

P/E (x)

Min (x)

Avg (x)

+1SD

Max (x)

-1SD

Exhibit 2: VMART: One-year forward EV/EBITDA band

EV/EBITDA (x)

Min (x)

Avg (x)

+1SD

Max (x)

-1SD

78.1

48.2

13.7

8.6

31.0

40.4

24.3

15.7

7.1

4.4

43.3

21.4

Source: Bloomberg, MOFSL

4 March 2020

V-MART

Exhibit 3: Retail Industry Valuation Table

Company

ABFRL

DMART

FLFL

FRETAIL

SHOP

SPENCER

TRENT

VMART

RELIANCE RETAIL

Market Cap

(INR b)

193

1430

162

245

CMP

INR

249

2,200

320

305

374

703

2,150

FY18

440

191

-92

300

P/E (x)

FY19

FY20E

171

160

109

-1,096

1,117

188

269

173

FY21E

107

100

FY18

112

132

EV/EBITDA (x)

FY19

FY20E

FY21E

275

116

Source: MOSL, Company

Exhibit 4: Retail Industry return ratio comparison

Company

ABFRL

DMART

FLFL

FRETAIL

SHOP

SPENCER

TRENT

VMART

RELIANCE RETAIL

FY18

-8

RoE (%)

FY19

FY20E

10.1

14.9

18.3

22.0

9.8

6.4

21.1

13.6

7.1

-0.3

0.4

2.6

6.0

7.3

18.9

20.2

30.8

33.0

FY21E

20.0

24.5

7.0

11.8

8.1

4.3

9.7

20.3

30.2

FY18

-4

RoCE (%)

FY19

FY20E

23.8

4.8

17.7

21.1

11.7

8.2

17.7

11.4

7.4

-0.3

1.2

2.9

6.4

8.7

18.1

20.8

23.9

26.6

FY21E

14.4

23.7

8.1

11.0

8.4

4.7

8.6

20.8

25.7

FY18

-11

RoIC (%)

FY19E

FY20E

-3

-1

FY21E

Exhibit 5: Retail Industry revenue/EBITDA growth over FY20-22E

Company

ABFRL

DMART

FLFL

FRETAIL

SHOP

TRENT

VMART

RELIANCE RETAIL

FY20E

12%

24%

11%

30%

20%

35%

Revenue Growth

FY21E

14%

31%

12%

28%

25%

37%

FY22E

14%

22%

12%

27%

23%

33%

FY20E

24%

29%

12%

152%

11%

53%

EBITDA Growth

FY21E

26%

32%

11%

14%

16%

29%

28%

36%

FY22E

20%

15%

29%

23%

20%

4 March 2020

V-MART

The V-Mart edge!

Limited threat from both national and regional players

We visited more than 15 stores of regional/national retailers (incl. V-Mart) across

Varanasi, Patna and Kolkata. Below are the key takeaways based on our discussion

with store managers, zonal/regional managers, managements of unlisted regional

players, and franchisees of national players at these locations.

National players targeting different segment

Large national players such as Trent, Reliance Trends, FBB, Pantaloons, Max and

Brand Factory have opened multiple stores in tier 2/3 cities. However, their targeted

segment is different, as evident in their customer profile, store layout (open stores),

variety of products and price range. These players have a bigger average store size

ranging from 15k-30k sq. ft., which is nearly 2-4 times bigger in comparison to

regional players (V-Mart’s average store size is ~8,500 sq. ft.). They mostly target

brand-conscious customers.

National players have much lower footfall/sq. ft. and conversions compared to

regional players. However, their ASP and bill size are nearly double, implying that

they keep prices high to maintain profitability.

In that sense, regional players like V-Mart face limited cannibalization as they have

carved a niche for themselves with their value-centric offerings and low-cost

operating structures – rent, employee and other marketing costs. Thus, trusted

brands like V-Mart will continue to capitalize on opportunities stemming from

unlocked aspirations and unaddressed consumption needs in lower-tier locations.

The advantage over regional players

V-Mart clearly enjoys an edge over regional value retailers in terms of customers,

landlords and employees. It is a relatively well-known brand (has been an early

entrant in most markets) with deep penetration in the northern/eastern belts of

India (more than 2-3 stores in most small cities/towns, unlike fragmented presence

of peers). As a result, it has ~10% higher throughput than its regional peers.

Moreover, the company has contained its rent/sq. ft. at INR367 v/s INR455 for peers

(rent at 4.6% of revenue v/s 5.6% for its peers in FY19). According to our recent

channel checks, landlords usually offer properties to players with stable operations

for a longer tenure even if they are offered slightly lower rents. In fact, the

company’s employee and rental expenses have remained relatively low at ~15% of

its total cost.

This allows V-Mart to offer products at attractive price points, manage its working

capital efficiently, and at the same time maintain healthy margins (8-9%).

4 March 2020

V-MART

Operating at optimum store size

The company operates an average store size of ~8.5k, which, in our view, is an

optimum level as it allows enhancing productivity, keeping costs in check and thus

boosting the EBITDA margin. Further, the company’s large scale of operations and

clustered-based approach facilitate economies of scale – an advantage over peers.

Exhibit 6: V-Mart’s lower store size v/s national players

Avg Store Size (sq. ft.)

28,571

Exhibit 7: Average bill size higher for national players

Avg Bill size (INR)

10,638

13,039

15,261

8364

756

2332

2200

1850

1800

FBB

Pantaloons

Westside

Brand

Factory

V Mart

Westside

Brand

Factory

Pantaloons

FBB

Source: MOFSL, Company

Exhibit 8: V-Mart’s rentals much lower v/s national peers

12%

10%

11%

Exhibit 9: V-Mart’s higher footfall/sq. ft. v/s national players

Store Size

Footfall

V-Mart

Future

Retail

Trent

Future

Lifestyle

Shoppers

Stop

V Mart,

Varanasi

Westside,

Varanasi

Reliance

Trends,

Varanasi

Pantaloons,

Kolkata

Westside,

Kolkata

Source: MOFSL, Company

Exhibit 10: V-Mart’s superior throughput v/s peers

Revenue/sqft

33%

-2%

-37%

-6%

-26%

diff v/s Vmart

Exhibit 11: V-Mart’s lower rental v/s regional players

Rent/sq. ft.

6.3

4.6

5.3

6.1

-15%

367

522

687

401

0.4

384

279

% of revenue

4.9

5.2

-12%

-18%

Source: MOFSL, Company

4 March 2020

V-MART

Exhibit 12: V-Mart’s better inventory/payable days

Inventory days

195

124

100 107

182

169

105

Payable days

191

182

230

165

8364

Exhibit 13: Smaller-store size supports margins

Avg. store size

11766

EBITDA margin (%)

15000

6500

Gross margin (%)

6500

8000

6308

5297

Source: MOFSL, Company

Exhibit 14: National players have higher gross margin and store size

Avg. Store Size

Gross Margin (%)

EBITDA Margin (%)

28571

15261

8364

V Mart

11.2

Westside

7.2

Pantaloons

13039

10638

7.6

FBB

12535

30.5

9.5

Lifestyle

7.2

Brand Factory

Source: Company, MOSL

4 March 2020

V-MART

Look at gain beyond near-term pain!

Potential revival in FY21 could drive healthy margin upside

Economic slowdown impacts industry sales

With economic slowdown impacting consumer spending, same-store sales growth

(SSSG) across stores has remained either flat or below internal targets, particularly

over the last six months. Further, the festive season was short-lived and the winter

season was slightly delayed. Some of the large franchisees indicated that the impact

of demonetization has not entirely faded, as the move eliminated cash from the

trading community, which accounts for nearly 70% of total sales.

Also, the recent protests impacted stores in the north-east region, which remained

closed in Assam for 7-10 days and in select cities in UP (such as Aligarh) for 1-2 days.

Footfalls were also impacted during this period.

…

yet V-Mart maintains leadership position

Despite the bleak market conditions, V-Mart has successfully maintained its

leadership position. The company’s revenue/sq. ft. declined by merely 2.2% YoY in

FY19 compared to an average decline of 9.3% (excluding Bazaar Kolkata) for peers.

Furthermore, V-Mart’s competitive edge is reflected in the marginal increase in its

NWC, as against a huge rise for other players which indicated a decline in

throughput.

With market poised for recovery from FY21…

The outlook for 1QFY21 and beyond appears promising with potential support from:



Agriculture economy:

With better monsoon this year and good wheat output,

the agriculture economy is expected to perform better.



Government spending:

Any government initiatives for infrastructure spending

and rural consumption should support growth.



Sector consolidation:

The doubling of stores over the last 3-4 years had created

supply surplus. However, for the last year, the sector has been consolidating

with closure of ~200 stores, which will likely bring in stability in the market. Also,

subdued SSSG for the last two years points toward a favorable base for growth

in FY21.

…V-Mart stands to gain further

Many of V-Mart’s competitors have shut their stores amidst the weak economic

environment. This could present the company with an opportunity to further

expand its market share while keeping its costs in check as new customers can be

served through its existing stores. This could potentially increase V-Mart’s

throughput on the same rent, driving an improvement in its EBITDA margin. The

company’s superior performance is evident in its higher throughput relative to its

competitors. Our workings indicate that volume-driven SSSG of 10% could improve

the company’s EBITDA margin by 60bp with RoCE at 25%. The margin can expand by

120bp if SSSG grows further to 20% with RoCE at 30%

(see exhibit 19).

4 March 2020

V-MART

Exhibit 15: V-Mart – lower decline in throughput v/s peers

15,000

10,000

5,000

-2.2

52.7

2018

2019

Growth (%)

Exhibit 16: V-Mart – NWC increases at lower pace vs. peers

Net WC days (2018)

Net WC days (2019)

-9

62 68

-15.9

-11.1

2.2

-8.5

-19.8

-2.6

8 18

Source: Company, MOFSL

Exhibit 17: Slowdown across industry

SSSG FY19 (%)

SSSG 9MFY20 (%)

Exhibit 18: V-Mart’s sensitivity to SSSG

Revenue

6.5

2.3

EBIT

Break-Even (in Years)

3.7

2.7

3.9

1.4

-2.0

2.0

20%

Source: Company, MOFSL

V Mart

Shoppers Stop

Pantaloons

Bazaar Style

10%

Source: Company, MOFSL

Exhibit 19: SSSG sensitivity analysis

Revenue increased by

Revenue (FY19) (INR m)

Revenue

Gross Profit

Gross Margin %

Fixed Portion

Total

Variable Portion

Total

Total Operating Costs

EBITDA

EBITDA margin (%)

Increase in bps

EBTDA growth

EBIT

Break-even (in years)

RoCE

10%

32%

30%

70%

9.9%

17%

2.3

25%

20%

32%

30%

70%

10.4%

115

35%

2.0

30%

Source: Company, MOFSL

4 March 2020

V-MART

Ensuring consistent and measured growth

Measured store expansion vis-à-vis aggressive approach of peers

V-Mart

has consistently increased its

store

count by ~20% annually and thus

ensured

healthy mix of new stores (~60%

its stores are

new,

i.e.,

less than five

years old). That said it was measured expansion funded by cash generated from its

own operations. It’s prudent approach has also led to low capex/sq. ft. On the other

hand, most peers had expanded their store network aggressively, mainly using

external funds raised either through debt or equity. Moreover, they had to close

some of their stores when market conditions turned hostile.

Consistent growth led by healthy SSSG and new stores

V-Mart’s revenue increased at a CAGR (FY15-20) of ~20% to INR14.3b, and we

expect the growth rate to continue over FY20-22. Growth was led by healthy SSSG

and measured store expansion (driving sales from new stores). We note that price

competitiveness has pulled down its value SSSG during some periods, although the

company has done relatively well on volume SSSG.

V-Mart’s SSSG slowed down in FY16 due to subdued monsoon, the government’s

efforts to plug subsidy leakages, aggressive competition (looking to liquidate

inventory to maintain cash flows) and weak winter (affected winter-wear sales). The

company’s value SSSG also slowed down (3-4%) over FY19/20, while its volume SSSG

was better (7-8%) due to inventory liquidation driven by intensifying competition

amidst weak market conditions. V-Mart’s higher volume SSSG was reflected in its

improving transaction size, which came on the back of growing footfalls/conversions

and an increase in the number of pieces per customer.

Healthy throughput – a competitive edge

In terms of productivity, V-Mart has maintained healthy sales throughput, i.e.

revenue/sq. ft. of ~INR8-9k – a trend that we expect to continue. This provides it

with a competitive edge and also improves its margin profile.

Huge room for growth

Our channel checks and discussions with industry experts indicate that typically in a

tier 3-4 market with a population base of 20k and assuming annual spending of

INR2k on apparels, the market size works out to be ~INR4b. Assuming 4-5 players in

each market with ~10k sq. ft. store size and annual revenue of INR100m for each

store, we estimate total organized industry revenue of merely INR500m. Thus even

with 4-5 players in a tier 3 market does not crowd the market, indicating the huge

untapped potential. The increasing share of organized retailers in these markets will

lead the next leg of growth. We believe that V-Mart is well positioned to gain from

this shift. With its presence in the north and eastern regions, especially in UP, Bihar

and Jharkhand, V-Mart is set to gain from the favorable demographic profile.

4 March 2020

V-MART

Exhibit 20: Expect revenue CAGR of 23% over FY19-22

Revenue (INR b)

YoY growth (%)

Exhibit 21: Value SSSG declines in FY19/20

-1

Value SSSG (%)

5.7

7.2

8.1

17.2

10.0

12.2

14.3

21.6

26.5

Source: MOFSL, Company

Exhibit 22: Volume SSSG also declines in FY19

Volume SSSG (%)

Exhibit 23: Productivity to remain healthy at ~INR8.5k

Productivity (INR k)

Source: MOFSL, Company

Exhibit 24: Value SSSG quarterly trend

34.0

23.1

17.0

8.0

-4.0

8.0 10.0 7.0

1.2 0.0

11.0

3.5 5.2

1.0 2.0

SSSG (%)

Exhibit 25: Volume SSSG quarterly trend

36.0

27.4

13.0

4.0

-5.0

13.015.011.0

3.5

12.014.0

Volume SSSG (%)

8.0

4.0 6.0

-3.0

Source: MOFSL, Company

4 March 2020

V-MART

Exhibit 26: EBITDA expected to stabilize from FY20

EBITDA (INR b)

10.0 10.2

9.1

8.8

7.7

8.5

EBITDA margin (%)

10.9

9.3

8.6

8.8

8.9

4.3

4.6

Exhibit 27: Rental cost maintained at ~5% of revenue

Rent/sq ft

4.9

4.5

4.3

% of revenue

4.6

0.3

0.4

0.5

0.6

0.8

1.3

1.5

1.9

2.3

341

372

394

378

365

367

Source: MOFSL, Company

Exhibit 28: Number of stores growing consistently at ~20%

Old stores

29.0

21.3

13.9

108

14.6

123

141

171

21.3

25.1

New stores

Stores growth (%)

Exhibit 29: ~60% stores less than five years old

42%

34%

Less than 2 years old

3-5 years old

More than 5 years old

24%

Source: MOFSL, Company

Exhibit 30: Rent/employee cost at ~15% of total cost

Raw Materials

Employees Cost

7% 5%

Rent expenses

10%

Other Expenses

10%

79%

80%

78%

77%

76%

77%

2014

2015

2016

2017

2018

2019

Source: Company, MOSL

4 March 2020

V-MART

Exhibit 31: ~75% of stores in Tier 2/3 cities

14%

16%

Tier 1

Tier 2

23%

46%

Tier 3

Tier 4

80%

Exhibit 32: Apparel constitutes 80% of overall revenue

14%

Apparel

Non-Apparel

Kirana

Source: MOFSL, Company

Exhibit 33: Continuous uptrend in average bill price

Transaction Size (INR)

625

663

713

750

756

Exhibit 34: Average selling price improves historically

Total avg selling price

Apparel avg selling price

328

192

202

119

236

157

261

191

195

208

207

203

334

323

320

462

489

576

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Source: MOFSL, Company

4 March 2020

V-MART

Efficient working capital with low gearing and capex

Working capital efficiency supports cash conversion

V-Mart’s forte in analytics, demand forecasting tools and supply chain management

allows it to manage inventory in a better way. Its lower turnaround time from

design to store facilitates timely ordering and warehouse inventory reduction.

Further, lower payables provide it bargaining power with vendors and thus ensure

fresh inventory and lower prices for its products. Also, prudent store additions help

in restricting dead inventory and liquidity crunch. This is reflected in V-Mart’s cash

conversion (CFO/EBITDA), which has consistently remained at above 50% since FY15

(except in FY18 when it was at 48%). In FY19, V-Mart’s cash conversion stood at 57%

compared to 44% for its closest peer One India Family Mart.

Low gearing and capex support healthy FCF and return profile

Over the last five years, when regional players were aggressively adding stores, V-

Mart was gradual in store addition (20% annually) using internal accruals. As a

result, the company’s balance sheet has remained well capitalized with a net cash

position since FY16. This allowed it to tackle pressures well amidst the tough last

two years when smaller players faced store closures and liquidity crunch. V-Mart’s

efficient working capital and high asset turnover have allowed it to consistently

deliver a superior RoCE even amidst a weak earnings environment.

Exhibit 35: Cash conversion remains healthy

Cash Conversion

74%

81%

48%

21%

2014

2015

2016

2017

2018

2019

Source: MOFSL, Company

57%

Exhibit 36: Higher cash conversion v/s regional peers

Cash Conversion

57%

-103%

44%

-1%

16%

-70%

63%

Source: MOFSL, Company

Exhibit 37: V-Mart remains net cash positive since FY16

0.8

363

Net Debt (INR b)

0.7

-210

392

-0.1

-391

-530

Net Debt/Equity (x)

-772

Exhibit 38: Return ratios remain healthy

RoE (%)

RoCE (%)

RoIC (%)

-97

0.0 0.0 0.0

-1,131

-2,130

-1,508

-0.1 -0.2 -0.2 -0.2

-0.2 -0.3

Source: MOFSL, Company

4 March 2020

V-MART

Exhibit 39: Improvement trend in V-Mart’s NWC

Net WC days

Inventory days

Payable days

151

130

2014

2015

131

140

2017

135

124

2019

2016

2018

Source: MOSL, Company

Exhibit 40: V-Mart’s measured store expansion

V Mart

V2 Retail

Baazar Kolkata

Citylife

1India Family Mart

Vishal Megamart

Citykart

V-Baazar

Baazar Style

2014

2015

2016

(3)

2017

2018

2019

147

108

171

189

104

186

Source: Company, MOFSL

Exhibit 41: V-Mart funding capex through internal sources for last five years

(Amount in INR m)

OCF

Capex

FCF

FY14

110

-332

-222

FY15

399

-335

FY16

461

-260

201

FY17

687

-145

542

FY18

643

-478

166

FY19

763

-407

357

FY20E

913

-587

326

FY21E

1,023

-699

324

FY22E

1,315

-746

569

Source: Company, MOFSL

4 March 2020

V-MART

Valuation and view

Strong competitive positioning, upgrading to Buy

V-Mart appears well placed to compete with regional/national players with its

strategic business model and stands to benefit significantly once the market revives.

We assign 20x EV/EBITDA on FY22E EBITDA of INR2.3b and upgrade the stock to Buy

with a target price of INR2,700. We have factored in 23% PAT CAGR over FY20-22

with an implied P/E of 28x, which is closer to its five-year average but at a ~30%

discount to its three-year average despite the much higher growth expectation.

Valuation buffer v/s historical multiple and industry average

V-Mart trades at 16x EV/EBITDA multiple and on 28x P/E FY22E, building in

EBITDA/PAT CAGR of 26%/23% over FY20-22. Over the last two years (FY18-20), its

EBITDA/PAT CAGR has been at modest at 6%/9%. However, with expectation of an

improving PAT CAGR, the stock is likely to garner better valuation. On a P/E basis,

the stock trades at 28x, closer to its five-year average but at ~30% discount to

industry average of 40x.

Strong upside from three-year perspective

Over the last five years, V-Mart has added stores at a rate of ~20% annually, which

have been funded by its internal accruals. Given its mid-to-high single-digit SSSG, the

company could deliver 20%+ revenue growth consistently. This could drive 25-30%

PAT CAGR consistently for the foreseeable future. At 25% growth assumption until

FY24, it reaches EPS of ~INR120. At a 30x P/E, this could garner TP of ~IN3,600 (67%

upside).

Long runway of growth

V-Mart has demonstrated consistent growth trajectory in the past, and we believe

that its growth momentum will continue due to the under-penetration of value

retailers in India’s hinterland and the company’s stronger competitive positioning.

Further, even amidst a weak market, V-Mart has exhibited strong cost control and

earnings growth in the recent quarter. Moreover, the consolidation in the industry

could sharpen its competitive edge. We believe that India’s economic revival could

fuel V-Mart’s growth and help it come back on its earlier growth path. Hence, we

believe that the stock deserves premium valuations.

Exhibit 42: Valuation based on FY22E EBITDA

EBITDA

Less Net debt

Total Value

Shares o/s (m)

CMP (INR)

Upside (%)

Methodology

FY22 EV/EBITDA

Driver (INR m)

2,342

Multiple

Fair Value (INRm)

47,345

-1,508

48,853

18.1

Value/sh (INR)

2,616

-83

2,700

2,150

Source: MOFSL, Company

4 March 2020

V-MART

Exhibit 43: V-Mart’s PEG at a comfortable 1.4x

8.3

5.5

2.8

0.0

-2.8

V-Mart Retail PEG Ratio

120.0

80.0

40.0

0.0

-40.0

Exhibit 44: V-Mart’s P/E converging with EPS growth

Expected EPS Growth (1 year, %)

V-Mart PE (x)

Source: MOSL, Company

Exhibit 45: V-Mart’s P/E lower than industry average

MOSL NAME

Retail

Aditya Birla Fashion

Avenue Supermarts

Future Lifestyle

Future Retail

Jubilant

Shoppers Stop

Titan

Trent

V-Mart Retail

Current

P/E (x)

40.2

42.7

63.5

29.5

18.2

36.9

41.4

42.6

59.4

Average PE (x)

38.2

76.7

56.4

35.8

27.0

55.2

378.4

33.8

65.0

24.7

10 YR PE (x)

+1SD PE (x)

52.2

122.1

63.7

51.4

36.5

86.4

1,291.0

44.3

77.3

37.8

-1SD PE (x)

24.2

31.3

49.1

20.3

17.6

24.0

-534.2

23.3

52.6

11.5

5 year Average

Average (x)

35.9

76.7

56.4

34.7

27.0

46.6

221.0

39.1

63.6

28.0

Source: MOSL, Company

4 March 2020

V-MART

Financials and valuations - standalone

Standalone - Income Statement

Y/E March

Total Income from Operations

Change (%)

Raw Materials

Employees Cost

Rent and lease expenses

Advertising & Sales Promotion

Other Expenses

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

FY14

5,750

49.9

4,041

383

249

136

418

5,227

90.9

522

9.1

109

414

378

127

33.5

252

43.2

4.4

FY15

7,202

25.3

5,143

489

328

148

457

6,566

91.2

636

8.8

590

571

-17

553

180

32.5

374

385

53.2

5.4

FY16

8,093

12.4

5,712

623

400

191

547

7,472

92.3

620

7.7

190

430

411

423

147

34.7

276

268

-30.4

3.3

FY17

10,017

23.8

7,028

783

452

908

9,170

91.5

848

8.5

186

662

668

229

34.3

439

63.7

4.4

FY18

12,224

22.0

8,303

984

526

1,083

10,896

89.1

1,328

10.9

229

1,099

1,125

348

30.9

777

76.9

6.4

FY19

14,337

17.3

9,703

1,257

658

394

996

13,008

90.7

1,329

9.3

276

1,053

1,096

-98

998

382

38.3

616

715

-8.0

5.0

FY20E

17,223

20.1

11,643

1,576

949

474

1,102

15,743

91.4

1,480

8.6

330

1,149

1,182

264

22.3

918

28.5

5.3

FY21E

21,582

25.3

14,589

1,986

1,219

593

1,295

19,683

91.2

1,899

8.8

404

1,495

1,548

418

27.0

1,130

23.0

5.2

(INR m)

FY22E

26,458

22.6

17,885

2,434

1,508

728

1,561

24,116

91.2

2,342

8.9

492

1,850

1,902

514

27.0

1,388

22.9

5.2

Standalone - Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Total Loans

Deferred Tax Liabilities

Capital Employed

Net Fixed Assets

Capital WIP

Total Investments

Curr. Assets, Loans & Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

FY14

180

1,522

1,702

438

-22

2,117

700

342

1,862

1,677

162

797

647

1,065

2,117

FY15

180

1,869

2,049

306

-6

2,349

981

218

2,077

1,832

212

935

752

115

1,143

2,349

FY16

181

2,127

2,307

270

-42

2,535

1,103

324

2,340

2,044

253

1,255

956

217

1,085

2,535

FY17

181

2,520

2,700

357

-79

2,979

1,173

718

2,925

2,692

204

1,850

1,599

220

1,075

2,979

FY18

181

3,293

3,474

-92

3,388

1,447

340

3,584

3,071

196

317

2,019

1,668

309

1,565

3,388

FY19

181

3,911

4,093

-118

3,975

1,655

607

3,898

3,290

166

443

2,225

1,483

645

1,673

3,975

FY20E

181

4,830

5,011

-118

4,893

1,911

607

5,020

3,964

525

532

2,685

1,793

775

117

2,335

4,893

FY21E

181

5,960

6,141

-118

6,023

2,206

607

6,534

4,967

902

666

3,365

2,247

971

146

3,170

6,023

(INR m)

FY22E

181

7,348

7,530

-118

7,412

2,460

607

8,429

6,089

1,524

817

4,125

2,754

1,191

179

4,305

7,412

4 March 2020

V-MART

Financials and valuations - standalone

Ratios

Y/E March

Basic (INR)

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

FY14

13.9

19.9

94.0

1.3

10.6

FY15

21.3

23.8

113.2

1.5

8.7

107.4

96.0

20.2

5.8

65.5

0.1

3.5

20.6

18.4

20.8

7.3

3.1

2.2

14.2

0.0

FY16

14.8

25.3

127.5

1.3

9.9

154.3

90.3

17.9

5.1

67.1

0.1

11.1

12.3

11.7

13.3

7.3

3.2

1.9

13.8

0.0

FY17

24.3

34.5

149.2

0.0

94.3

66.3

15.3

4.2

49.2

0.0

30.0

17.5

16.4

19.9

8.5

3.4

1.6

18.8

-0.1

FY18

42.9

55.6

192.0

0.0

53.3

41.1

11.9

3.4

31.0

0.0

9.2

25.2

24.1

30.1

8.4

3.6

1.8

71.9

-0.2

FY19

39.5

54.8

226.1

1.7

6.0

57.9

41.8

10.1

2.9

31.0

0.1

19.7

18.9

18.1

21.8

8.7

3.6

1.8

65.3

-0.2

FY20E

50.7

69.0

276.9

0.0

45.1

33.1

8.3

2.4

27.6

0.0

18.0

20.2

20.8

25.9

9.0

3.5

1.9

30.8

-0.2

FY21E

62.4

84.7

339.3

0.0

36.6

27.0

6.7

1.9

21.3

0.0

17.9

20.3

20.8

26.6

9.8

3.6

1.9

40.0

-0.2

FY22E

76.7

103.9

416.1

0.0

29.8

22.0

5.5

1.5

17.0

0.0

31.5

20.3

20.7

27.8

10.8

3.6

2.0

49.5

-0.3

0.1

-12.2

15.8

14.1

18.4

8.2

2.7

106

2.3

9.7

0.0

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

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY14

378

109

-120

-389

-21

132

110

-332

-222

-264

-42

-18

-130

153

FY15

553

-167

-227

205

195

399

-335

145

-183

-150

-40

-18

-199

FY16

423

190

-149

-207

257

204

461

-260

201

-101

-349

-20

-35

-48

-96

FY17

668

179

-243

709

-22

687

-145

542

-337

-245

-727

-37

-2

FY18

1,125

222

-381

-346

635

643

-478

166

395

-10

-92

-351

-15

-27

-384

167

196

FY19

993

268

-332

-270

674

763

-407

357

-339

-691

-3

-16

-44

137

166

FY20E

1,182

330

-264

-303

983

-70

913

-587

326

113

-474

-37

402

123

525

FY21E

1,548

404

-418

-458

1,113

-90

1,023

-699

324

133

-566

-37

419

482

902

(INR m)

FY22E

1,902

492

-514

-513

1,405

-90

1,315

-746

569

133

-613

-37

665

859

1,524

4 March 2020

V-MART

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

4 March 2020

V-MART

********************************************************************************************************************************

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.

4 March 2020