1 June 2020
4QFY20 Results Update | Sector: Capital Goods
Voltas
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
VOLT IN
331
178.6 / 2.1
741 / 428
8/-5/9
957
CMP: INR540
TP: INR600 (+11%)
Long-term story intact despite COVID-19 led jolt
Season is lost, not the franchise value
Buy
Financials & Valuations (INR b)
Y/E Mar
2020 2021E
Sales
76.6
66.5
EBITDA
6.9
4.6
PAT
5.5
3.5
EBITDA (%)
9.0
6.9
EPS (INR)
16.7
10.7
EPS Gr. (%)
6.5 (36.3)
BV/Sh. (INR)
129.4 136.8
Ratios
Net D/E
(0.0)
0.0
RoE (%)
12.9
7.8
RoCE (%)
14.1
9.7
Payout (%)
31.5
30.0
Valuations
P/E (x)
32.3
50.7
P/BV (x)
4.2
3.9
EV/EBITDA (x)
25.9
39.2
Div Yield (%)
0.8
0.5
FCF Yield (%)
2.3
0.2
2022E
88.0
8.0
6.6
9.1
19.9
86.5
150.8
(0.1)
13.2
14.6
30.0
27.2
3.6
21.9
0.9
4.2
Voltas’ (VOLT) 4QFY20 earnings were 37% ahead of expectation led by the
UCP segment’s outperformance. VOLT has further cemented its leadership
position with its market share improving 50bp to 24.2% YTD. It also achieved
the No. 1 position in Inverter ACs for the Jan-Feb’20 period.
The AC industry is perhaps one of the worst hit due to the COVID-19 led
lockdowns, especially owing to the shutdowns coinciding with the peak
summer season. This is likely to result in higher inventory for the entire
supply chain across dealers, brands (incl. in-transit goods) and
manufacturers. As the lockdown eases, we are witnessing pent-up demand.
We expect system-level inventory to normalize by Nov-Dec’20, and hence,
FY22E should turn out to be a normal year.
We cut our FY21/FY22E earnings by 28%/6% as FY21 is likely to be a washout
year. We have also built in lower revenue and profitability for the EMP
business given the weak macro environment for the Projects’ business.
However, the cut in our TP is limited as the EMP business commands lower
valuation multiple. Maintain
Buy
with revised TP of INR600 (earlier: INR620).
4QFY20:
Revenue was flat YoY at INR20.9b, (in line with est). EBITDA grew
33% to INR1.9b (+10% ahead of est.). A favorable sales mix has led to strong
growth. EBITDA margin was up 220bp YoY to 9.2% (v/s est. 8.4%). Adj. PAT
grew 15% to INR1.6b and
was 37% ahead of est.
FY20:
Revenue grew 7.5% to INR76.6b. EBITDA grew 12.3% to INR6.9b.
EBITDA margin expanded 40bp to 9%. Adj. PAT grew 7% to INR5.5b.
Segment highlights: (a)
EMP
:
Revenue was down 18% to INR8b and was 7%
below our expectation. PBIT margins stood at just 1.4% as the company
made provisions. Order book stood at INR78b (+57% YoY).
(b) UCP:
Despite
the COVID-19 crisis, revenue was up 20% to INR12b and was 9% ahead of
our expectation.
This suggests strong channel refilling in the Mar’20
quarter.
PBIT margin came in at 14.6%, aided by operating leverage.
Inventory position:
Due to lockdowns, secondary sales could not materialize
and as such, dealer level inventory stood as high as 60 days at end-Mar’20.
As primary sales were also impacted, company level inventory stood at 90
days at end-Mar’20.
Key highlights of UCP segment:
Inverter ACs now form 64% of the total Split
AC business and 50% of the overall Room AC business. In Air coolers, the
company grew 60% YoY. It is now the No.2 player with market share of 10%.
Key highlights of EMP segment:
International business now forms 40% of
the order book. Management flagged concerns on execution and working
capital, given the deteriorating macro environment. Next few quarters may
see some provisions as well. However, VOLT is looking to focus on cash flow
rather than just top line growth in the EMP segment.
Volt-bek JV:
Market share in Frost-free refrigerators and Washing machines
stood at ~2% each
UCP delivers handsomely, EMP hit by provisions
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-20
30.3
40.0
9.9
19.8
Dec-19
30.3
38.6
10.9
20.2
Mar-19
30.3
35.1
13.7
20.9
FII Includes depository receipts
Key takeaways from management commentary
Nilesh Bhaiya – Research Analyst
(Nilesh.Bhaiya@MotilalOswal.com); +91 22 6129 1556
Pratik Singh – Research Analyst
(Pratik.Singh@MotilalOswal.com); +91 22 6129 1543
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Voltas
Valuation and view
We expect the system level inventory to normalize by Nov-Dec’20, and hence, FY22E
should turn out to be a normal year. We cut our FY21/FY22E earnings by 28%/6% as
FY21 is likely to be a washout year. We have built in lower revenue and profitability
for the EMP business given the weak macro environment for the Projects’ business.
However, the cut in our TP is limited as EMP business commands lower valuation
multiple. Our FY20-22E revenue/EBITDA/adj. PAT CAGR stands at 7%/8%/8%. The
stock has corrected 27% from its peak levels due to higher system level inventory.
However, this is an industry level issue and on a relative basis, we expect VOLT to
continue outperforming peers in the RAC segment. VOLT remains the best play on
the under-penetrated AC market in India. Maintain
Buy
with revised TP of INR600
(earlier: INR620).
Quarterly Performance
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
Extra-ordinary Items
PBT
Tax
Effective Tax Rate (%)
Share of profit of associates/JV's
Reported PAT
Change (%)
Adj PAT
Change (%)
1Q
21,481
10.5
2,432
16.7
11.3
59
27
282
0
2,627
762
29.0
(26)
1,839
-0.9
1,839
0.2
FY19
FY20
FY19
FY20
2Q
3Q
4Q
1Q
2Q
3Q
4Q
14,214 14,918 20,628 26,540 14,219 14,925 20,896 71,241 76,581
37.1
8.5
0.7
23.6
0.0
0.0
1.3
11.2
7.5
1,085 1,157 1,443 2,912 1,059
976 1,920 6,117 6,867
26.7
-2.5
-43.0
19.7
-2.5
-15.7
33.1
-7.7
12.3
7.6
7.8
7.0
11.0
7.4
6.5
9.2
8.6
9.0
60
62
59
77
80
80
82
240
320
64
132
106
44
49
57
61
330
211
461
548
572
433
726
543
605 1,863 2,306
0
-118
0
-301
-43
0
-20
-118
-364
1,423 1,393 1,849 2,923 1,612 1,381 2,362 7,292 8,278
331
304
239 1,046
448
314
572 1,635 2,380
23.2
20.1
12.9
32.4
27.1
22.7
24.0
22.1
27.5
(58)
(279)
(215)
(225)
(100)
(198)
(203)
(578)
(726)
1,035
809 1,396 1,652 1,064
869 1,587 5,079 5,172
8.5
-19.4
-27.5
-10.2
2.9
7.4
13.6
-11.3
1.8
1,035
927 1,396 1,953 1,107
869 1,607 5,197 5,536
8.5
-7.7
-28.1
6.2
7.0
-6.2
15.1
-9.1
6.5
(INR M)
FY20
Var.
4QE Vs Est
20,657
1%
0.1
1,738
10%
20.4
8.4
79
50
399
2,008
499
24.8
(337)
1,172
-16.1
1,172
-16.1
18%
35%
37%
10 February 2020
2
 Motilal Oswal Financial Services
Voltas
Exhibit 1: Operating matrix
INR M
Order Book
YoY
Order Inflows
Segmental Revenues
Electro mechanical projects
Engineering Products
Unitary Cooling products
Others
Total Revenues
EMP, % YoY
Engg Products, % YoY
UCP, % YoY
Segmental PBIT
Electro mechanical projects
Engineering Products
Unitary Cooling products
Total PBIT
Segmental PBIT, %
Electro mechanical projects
Engineering Products
Unitary Cooling products
Total PBIT
EPS (INR/sh)
NWC (Days)
EPS Composition (INR/sh)
Electro mechanical projects
Engineering Products
Unitary Cooling products
Voltas Beko JV
FY15
38,930
7.8%
22,380
22,085
3,601
25,105
1,040
51,831
-18.0%
-19.7%
22.3%
231
1,081
3,491
4,874
1.0
30.0
13.9
9.4
10.2
40.7
10.2
-0.1
2.4
7.9
FY16
39,140
0.5%
22,500
28,288
3,706
25,209
-6
57,198
28.1%
2.9%
0.4%
550
1,127
3,381
5,058
1.9
30.4
13.4
8.8
10.8
40.8
10.8
0.8
2.4
7.7
FY17
43,210
10.4%
27,850
26,550
3,318
30,469
-9
60,328
-6.1%
-10.5%
20.9%
849
956
4,403
6,208
3.2
28.8
14.5
10.3
15.6
35.5
15.6
3.6
2.0
10.0
FY18
50,620
17.1%
34,440
28,450
3,099
32,260
235
64,044
7.2%
-6.6%
5.9%
1,854
992
4,749
7,595
6.5
32.0
14.7
11.9
17.3
42.0
17.3
4.3
2.1
10.8
0.1
FY19
49,760
-1.7%
35,129
36,191
3,117
31,555
378
71,241
27.2%
0.6%
-2.2%
2,773
1,051
3,254
7,077
7.7
33.7
10.3
9.9
15.7
66.3
15.7
7.7
2.2
7.4
-1.6
FY20
77,880
56.5%
61,270
32,461
3,317
40,737
66
76,581
-10.3%
6.4%
29.1%
1,704
993
5,121
7,817
5.2
29.9
12.6
10.2
16.7
67.0
16.7
5.0
2.2
11.6
-2.1
FY21E
77,880
0.0%
30,000
30,000
3,000
33,500
0
66,500
-7.6%
-9.5%
-17.8%
900
900
3,350
5,150
3.0
30.0
10.0
7.7
10.7
97.7
10.7
3.5
2.0
7.6
-2.4
FY22E
72,880
-6.4%
35,000
40,000
3,000
45,000
0
88,000
33.3%
0.0%
34.3%
2,000
900
5,400
8,300
5.0
30.0
12.0
9.4
19.9
71.1
19.9
7.6
2.0
12.2
-1.9
Source: MOFSL, Company
Exhibit 2: We value VOLT at INR600/share
Name of segment
Unitary Cooling Products
Engineered Products Services
Electro Mechanical Products(incl. non allocable)
BEKO JV
Total
Mar'22 EPS
(INR)
12.2
2.0
7.6
(1.9)
19.9
Multiple
(x)
35.0
15.0
12.0
DCF
Value/sh
(INR)
428
31
91
50
600
Source: MOFSL, Company
1 June 2020
3
 Motilal Oswal Financial Services
Voltas
Exhibit 3: UCP sales expected at 5.1% CAGR over FY20-22E
UCP revenue (INR b)
Growth
29.1
34.3
Exhibit 4: Margins to normalize in FY22E as operating
leverage kicks in
UCP EBIT (INR b)
13.9
13.4
14.5
14.7
12.6
10.3
10.0
12.0
EBIT margin
22.3
11.8
0.4
20.9
5.9
(2.2)
(17.8)
12.3
20.5
25.1
25.2
30.5
32.3
31.6
40.7
33.5
45.0
2.5
3.5
3.4
4.4
4.7
3.3
5.1
3.4
5.4
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 5: EMP sales expected at 11% CAGR over FY20-22E
on a low base
EMP revenue (INR b)
28.1
7.2
(6.1)
27.2
(10.3) (7.6)
Exhibit 6: Margins to stabilize in FY22E post normalization of
construction activities
EMP EBIT (INR b)
EBIT margin
7.7
5.2
3.2
1.9
(0.4)
0.2
1.0
(1.5)
0.8
1.9
2.8
1.7
3.0
0.9
2.0
5.0
Growth
33.3
6.5
0.6
(15.8)
(18.0)
26.9
22.1
28.3
26.6
28.5
36.2
32.5
30.0
40.0
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 7:
Order inflows to moderate to ~INR30-35b in
FY21/FY22E
Order inflow (INR b)
Growth
74.4
23.7
2.0
30.0
(51.0)
22.4
22.5
27.9
34.4
35.1
61.3
35.0
Exhibit 8: Order book expected to remain flat over FY20-22E
as the company focusses on execution
Order backlog (INR b)
Growth
56.5
23.8
(14.7)
(0.1)
0.5
16.7
7.8
(2.9)
36.1
38.9
10.4
0.5
39.1
43.2
17.1
(1.7)
50.6
49.8
77.9
-
77.9
(6.4)
72.9
22.4
Source: MOFSL, Company
Source: MOFSL, Company
1 June 2020
4
 Motilal Oswal Financial Services
Voltas
Management commentary highlights
Unitary Cooling Products
UCP segment grew 50% in the first 11 months of FY20, well ahead of industry
benchmarks. Mar’20 witnessed loss of sales due to the lockdown.
Inverters now account for 50% of the AC business.
Air coolers:
The Company witnessed 60% growth in air coolers. The brand is
No.2 with market share of 10%.
Inventory:
Dealers have 60 days of inventory currently. Strong sales have
happened in the North/East and some parts of the South post the lockdown.
Apr’20 was a complete washout. VOLT has started doing some sales in May’20.
The company had 90 days of inventory at end-Mar’20.
Sourcing:
VOLT has adequate inventory at the company level.
Secondary sales during Apr’19 to Feb’20 stood 30% higher YoY and for FY20, it
stood at 24-25% YoY.
Secondary sales have begun in the North on account of the heat wave.
Electro-Mechanical Projects and Services
This segment saw delays in execution and payments from customers.
VOLT has followed a conservative time-based provision.
Total order book stood strong at INR78b (+57% YoY). International order book
was at ~INR30b. Domestic order book stood at INR48b, with orders across key
segments like water, metro, airport, solar and electrification.
International order execution has not suffered as a few domestic order
executions, as most construction activities in the Middle East were classified as
essential services. However, there was some slowdown in execution.
Domestic projects – Some amount of delay in timeline and collection of
receivables seem inevitable. However, raw material prices have come off.
Private investments are still subdued. Fiscal constraints are expected to put
pressure on government infrastructure spending.
Manufacturing of direct refrigerator has started from Sanand factory.
The Sanand facility has an annual capacity of 1m units, which can be scaled up
to 2.5m units.
Clients are holding cash, and hence, there is some delay in receivables. VOLT is
looking to focus on cash flows and risk mitigation. The company does not intend
using own cash to complete projects if cash payments do not come.
Government orders could see delay in payments.
Discounting:
Many brands are looking to give large discounts to liquidate
inventory while VOLT is not looking at giving large discounts. If there is
substantial competition in any particular market impacting VOLT, then the
company would act on it. But, it is
not looking at cutting prices across the
board.
E-commerce:
RAC as a product has not been successful on the online platform,
even globally, as there is an element of installation. If the E-commerce company
offers installation then warranties do not hold. Thus, this is also a determinant
for online sales.
Volt-Bek
Other takeaways
1 June 2020
5
 Motilal Oswal Financial Services
Voltas
Working capital cycle is higher for the EMP segment. For UCP, it would be hardly
23-25 days of receivables.
Import v/s domestic sourcing:
Over the longer term, the company needs to
lower dependency and become self-reliant. Also, VOLT is looking at alternate
sourcing partners domestically.
Valuation and view
Market leadership in the Air conditioner segment:
VOLT has consistently
maintained its market leadership in the Room Air Conditioner (RAC) market
despite rising competitive intensity. In Jan-Feb’20, the company became the
market leader in Inverter ACs too. With strong distribution network coupled
with less reliance on imports, we expect VOLT to continue its leadership position
in the RAC market.
Voltbek offers meaningful increase in addressable market size:
The move to
form JV with the Beko brand to cater to a wider audience in the consumer
durable space (beyond air conditioners) has come at the right time. While
management has high ambitions of gaining 10% market share through Voltbek
and generating INR100b in revenues by FY25, we factor in modest assumptions
and expect FY25E revenues at INR40b (40% of management’s ambitious target)
and ascribe INR50/share of attributable valuation to the stock.
Maintain Buy:
We cut our FY21/FY22E earnings by 28%/6% as FY21 is likely to
be a washout year. We have built in lower revenue and profitability for the EMP
business given the weak macro environment for the Projects’ business.
However, the cut in our TP is limited as the EMP business commands lower
valuation multiple. Our FY20-22E revenue/EBITDA/adj. PAT CAGR stands at
7%/8%/8%. The stock has corrected 27% from its peak levels due to higher
system level inventory. However, this is an industry level issue and on a relative
basis, we expect VOLT to continue outperforming peers in the RAC segment.
VOLT remains the best play on the under-penetrated AC market in India.
Maintain
Buy
with revised TP of INR600 (earlier: INR620).
Risks
Key risks to our Buy rating:
(a) Weak festive season, (b) Higher working capital
in the EMP segment, (c) Second wave of Coronavirus causing disruption in
supply chain and the overall industry, and (d) Inability of Voltbek to make in-
roads in the Indian market.
Exhibit 9: We cut our FY21/FY22E earnings by 28%/6%, as FY21 is likely to be a washout
year for ACs and on weak macro environment for Projects’ business
Earnings Change
INR m
Revenue
EBITDA
EBITDA margin
Adj. PAT
Old
FY21E
73,717
6,260
8.5%
4,910
FY22E
90,061
8,771
9.7%
6,958
FY21E
66,500
4,591
6.9%
3,525
New
FY22E
88,000
7,998
9.1%
6,573
Change
FY21E
FY22E
-10%
-2%
-27%
-9%
-1.6%
-0.7%
-28%
-6%
1 June 2020
6
 Motilal Oswal Financial Services
Voltas
Financials and valuations
Income Statement
Y/E March
Total Revenues
Change (%)
EBITDA
% of Total Revenues
Other income
Depreciation
Interest
Exceptional items
PBT
Tax
Rate (%)
Reported PAT
Change (%)
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority interest
Loans
Deferred Tax Liability
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Goodwill
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Other Assets
Current Liab. & Prov.
Current Liabilities
Other Liabilities & provisions
Net Current Assets
Application of Funds
2017
60,328
5.5
5,791
9.6
1,998
245
160
11
7,395
2,004
27.1
5,174
36.0
5,163
46.9
2018
64,044
6.2
6,626
10.3
1,741
244
119
6
8,011
2,270
28.3
5,724
10.6
5,718
10.7
2019
71,241
11.2
6,117
8.6
1,863
240
330
-118
7,292
1,635
22.4
5,079
-11.3
5,197
-9.1
2020
76,581
7.5
6,867
9.0
2,306
320
211
-364
8,278
2,380
28.8
5,172
1.8
5,536
6.5
2021E
66,500
-13.2
4,591
6.9
2,000
360
400
0
5,831
1,468
25.2
3,525
-31.8
3,525
-36.3
(INR M)
2022E
88,000
32.3
7,998
9.1
2,300
407
200
0
9,690
2,439
25.2
6,573
86.5
6,573
86.5
(INR M)
2022E
331
49,540
49,870
442
1,179
-715
50,777
8,359
4,045
4,314
263
23,993
723
62,229
16,877
21,699
4,342
24
19,288
40,745
30,137
10,608
21,484
50,777
2017
331
32,735
33,066
285
1,709
-198
34,863
5,165
2,889
2,276
6
22,679
723
38,808
9,070
14,541
3,314
935
10,947
29,628
19,946
9,682
9,180
34,863
2018
331
38,721
39,052
317
1,423
-46
40,746
5,262
3,013
2,248
41
27,536
723
42,370
8,130
15,703
2,837
1,218
14,482
32,172
21,765
10,408
10,198
40,746
2019
331
40,769
41,100
348
3,147
-993
43,601
5,666
2,959
2,707
157
23,859
723
46,715
10,907
18,330
3,211
116
14,151
30,560
23,745
6,815
16,155
43,601
2020
331
42,471
42,802
365
2,179
-715
44,631
6,359
3,278
3,081
263
23,433
723
53,332
14,689
18,336
3,084
23
17,200
36,201
26,889
9,312
17,131
44,631
2021E
331
44,939
45,270
404
3,179
-715
48,137
7,359
3,638
3,721
263
23,633
723
49,747
14,575
18,219
1,997
20
14,936
29,949
21,863
8,086
19,797
48,137
1 June 2020
7
 Motilal Oswal Financial Services
Voltas
Financials and valuations
Ratios
Y/E March
Adj EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Asset Turnover (x)
Leverage Ratio
Net Debt/Equity (x)
Cash Flow Statement
Y/E March
PBT before EO Items
Depreciation
Interest & other
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2017
15.6
16.3
100.0
3.5
25.9
34.6
33.0
30.6
2.9
5.4
0.6
15.6
15.8
51.0
88
55
121
1.7
0.0
2018
17.3
18.0
118.0
4.0
26.8
31.2
30.0
26.8
2.8
4.6
0.7
14.6
14.3
50.0
89
46
124
1.6
0.0
2019
15.7
16.4
124.2
4.0
31.0
34.4
32.8
29.2
2.5
4.3
0.7
12.6
13.8
27.8
94
56
122
1.6
0.0
2020
16.7
17.7
129.4
4.1
31.5
32.3
30.5
25.9
2.3
4.2
0.8
12.9
14.1
25.8
87
70
128
1.7
0.0
2021E
10.7
11.7
136.8
2.7
30.0
50.7
46.0
39.2
2.7
3.9
0.5
7.8
9.7
14.1
100
80
120
1.4
0.0
2022E
19.9
21.1
150.8
5.0
30.0
27.2
25.6
21.9
2.0
3.6
0.9
13.2
14.6
25.3
90
70
125
1.7
-0.1
(INR M)
2022E
9,690
407
200
-2,439
659
8,517
-1,000
7,517
-1,000
-2,000
-2,000
-200
-1,972
-4,172
2,345
1,997
4,342
2017
7,384
245
0
-2,004
533
6,168
-302
5,866
-3,221
-3,523
-998
0
-1,337
-1,217
1,428
1,877
3,309
2018
8,005
268
0
-2,270
-1,495
4,508
-252
4,257
-4,857
-5,109
1,666
0
-1,534
132
-469
3,305
2,837
2019
6,774
240
330
-2,708
-6,456
-1,820
-804
-2,625
3,181
2,377
1,724
-329
-1,577
-183
374
2,837
3,211
2020
7,443
320
211
-2,061
-911
5,002
-832
4,170
-1,402
-2,234
-1,057
-212
-1,627
-2,896
-127
3,211
3,084
2021E
5,831
360
400
-1,468
-3,753
1,370
-1,000
370
-1,000
-2,000
1,000
-400
-1,057
-457
-1,087
3,084
1,997
1 June 2020
8
 Motilal Oswal Financial Services
Voltas
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
1 June 2020
9
 Motilal Oswal Financial Services
Voltas
********************************************************************************************************************************
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.
1 June 2020
10