28 February 2020
Update | Sector: Consumer
Emami
Buy
BSE SENSEX
38,297
S&P CNX
11,202
CMP: INR256
TP: INR310(+21%)
Near-term recovery unlikely, cheap valuations offer comfort
We recently met Emami’s (HMN) management to get an update on its overall
business. Key takeaways:
Demand is yet to pick up after weakening in the December quarter for both
the company and the sector.
Terms of trade to distributors have worsened with credit to general trade
now at 10-12 days. This can be attributed to delayed summer offtake (due
to extended winter) and trade liquidity concerns.
However, we find comfort in favorable material costs, demand prospects
from Rabi harvest, and strong product pipeline ready for launch when
sentiment improves.
Valuations and view:
After coming in at an admirable ~20%/ 34%/35% in
the first five years of the decade, sales/EBITDA/PAT CAGR has slowed down
significantly to ~5%/ 7%/3% for the five years ending FY20. Sales growth in
many of HMN’s key categories has been impacted in recent years due to
rural slowdown (52% rural dependency), liquidity crunch (~40% wholesale
contribution) and category growth issue (majorly problem-solving portfolio
and not everyday use products with the former getting affected more in a
weak demand situation). However, none of these are structural issues and
thus HMN will be a key beneficiary when the tide turns. Valuations of 20x
trailing EPS and 16.4x FY22 EPS (~20x after taking into account
amortization) also offer some comfort. Moreover, valuations are at ~60%
discount to peer average and ~50%/40% discount to its own 5/10-year
average.
Maintain Buy
with a
TP of INR310 (targeting 20x FY22E adj. EPS).
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 (%)
HMN IN
959
116.4 / 1.6
416 / 246
-13/-16/-41
276
47.3
Financials Snapshot (INR b)
Y/E March
2019 2020E 2021E 2022E
Sales
26.9 27.8 30.9 34.8
Sales Gr. (%)
6.4
3.2 11.2 12.7
EBITDA
7.3
7.5 8.3 9.3
EBIT Margin (%) 26.9 27.1 26.8 26.8
Adj. PAT
5.5
5.7 6.2 7.1
Adj. EPS (INR)
12.2 12.5 13.7 15.7
EPS Gr. (%)
0.2
3.1 9.6 14.2
BV/Sh.(INR)
45.7 51.0 51.7 53.7
Ratios
RoE (%)
27.0 25.9 26.7 29.8
RoCE (%)
28.4 28.2 28.4 31.6
Payout (%)
32.9 43.9 54.6 57.4
Valuation
P/E (x)
21.1 20.5 18.7 16.4
P/BV (x)
5.6
5.0 5.0 4.8
EV/EBITDA (x)
15.7 14.5 13.1 11.5
Div. Yield (%)
1.6
2.1 2.9 3.5
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Dec-19
52.7
28.7
10.4
8.2
Sep-19
52.7
25.5
11.7
10.1
Dec-18
72.7
7.7
10.8
8.8
Detailed takeaways
FII Includes depository receipts
Stock Performance (1-year)
Emami
520
440
360
280
200
Sensex - Rebased
Weak demand persists:
Demand environment remains bleak, similar to the
December quarter when things had worsened sequentially and YoY for both
the company and the sector.
Summer season offtake delayed:
Management appeared hopeful in the
third-quarter post results call that up-stocking will happen in products like
Navratna oil ahead of the summer season (usually begins in mid- Feb).
However, even toward end-February, sales have not picked up owing to
extended winter in several parts of the country.
Lack of daily use portfolio – a drawback:
The problem solving nature of
HMN’s products – and not everyday use – has also affected offtake in a
weak demand environment.
High wholesale and rural sales make task difficult:
HMN’s highest
exposure to wholesale (~40%) among peers and among the highest rural
proportion in total sales have kept the sales trajectory weak.
No green shoots in any geography:
There is no geography where the sales
outlook is better than the others.
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Research analyst: Dhairya Dhruv
(Dhairya.Dhruv@motilaloswal.com); +91 22 6129 1547 |
Pooja Doshi
(Pooja.Doshi@MotilalOswal.com); +91 22 5036 2689
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
Emami
Rabi crop cash flows to help tackle slowdown
Rabi crop benefits:
Cash flows from the Rabi crop will be in the hands of the
farmers after harvest in March. This will lead to a relatively improved outlook.
Plugging gaps:
HMN did not have a sales head for the past year, an issue that
has now been addressed with a new recruit likely to join in March.
Pace of new launches to pick up on recovery:
HMN will likely launch a host of
new products across categories once demand and trade liquidity improve.
Proportion of sales from launches in the last five years is only 2-3% and is even
lower taking into account launches in the past three years.
Favourable material costs:
The outlook on material costs, particularly mentha,
remains favorable.
Update on brands where BCG and HMN worked together
Kesh King reports improved traction:
Kesh King has started witnessing better
offtake in recent months with high-single-digit growth.
Support from increase in proportion of shampoo sales:
Proportion of
shampoos is now at 25% of Kesh King sales v/s 15% at the time of acquisition,
led by improved formulation, better packaging and lower price.
Fair & Handsome to be relaunched shortly:
HMN is likely to re-launch ‘Fair &
Handsome’ in Mar’20 after working with BCG over the past year in devising a
new strategy for a brand where sales momentum has come off significantly in
recent years. Management did not share any more details on the new strategy
for this brand. We believe part of the strategy will be communicating multi-
benefits nature of the product rather than just the fairness aspect.
Working capital days likely to worsen
General trade credit up sharply:
Terms of trade to distributors have become
worse with credit of 10-12 days (general trade receivable days were zero a year
ago) being provided in view of weak offtake and trade liquidity concerns.
Significant deterioration for past few years:
In addition to weak EPS growth in
recent years, working capital has been worsening significantly in recent years,
including FY19, when Canteen Store sales and international business
contributed to the increase. Outlook on the international business receivables
days is better this year though.
Group debt reduction
Subject to CCI approval, management expects the money from the group
cement business sale to be received in May-Jun’20.
The group has pledged debt of over INR30b, which will come down to ~INR7b
after repayment. The same is expected to happen soon after cash is received.
HMN is also in the process of closing sale of hospitals business and some real
estate properties which will bring down group level debt further by end -FY21.
The promoter family members involved in the cement business would
subsequently have charge of the unlisted group edible oils company.
Current pledge of close to 70% of promoter shareholding is therefore likely to
come down sharply over the next few quarters.
28 February 2020
2
 Motilal Oswal Financial Services
Emami
Key Charts
Exhibit 1: Increase in debtor days is majorly impacting cash conversion cycle in FY20
Cash conversion cycle (INR m)
Inventory
Account Receivables
Account Payables
Days (on average basis)
Inventory days
Debtor days
Creditor days
Cash conversion cycle (Days)
Days (on closing basis)
Inventory days
Debtor days
Creditor days
Cash conversion cycle (Days)
FY12
1,122
1,005
1,071
30
26
25
31
28
25
27
27
FY13
1,140
1,122
1,061
24
23
23
24
24
24
23
26
FY14
1,411
793
1,480
26
19
25
19
28
16
30
15
FY15
1,267
1,027
1,990
22
15
29
8
21
17
33
5
FY16
1,505
1,309
2,487
21
18
35
5
23
20
38
5
FY17
1,792
970
1,847
24
17
32
9
26
14
27
13
FY18
1,940
1,559
2,420
27
18
31
14
28
22
35
16
FY19
2,217
2,164
2,914
28
25
36
17
30
29
39
20
FY20E
2,086
2,589
3,015
28
31
39
21
27
34
40
22
FY21E
2,314
2,710
3,468
26
31
38
19
27
32
41
18
FY22E
2,588
2,863
3,873
26
29
38
16
27
30
41
17
Source: Company, MOFSL
Exhibit 2: Domestic volumes up just 0.3% in 9MFY20
Domestic volume growth (%)
15.3
11.8
14.0
6.9
0.9
1.5
Exhibit 3: Expect revenue CAGR of ~11.9% over FY20-22
Revenue (INR b)
21.8
16.6 16.9
11.2
12.7
7.2
(0.3)
6.4 5.5
1.7
15
17
18
22
24
25
25
27
6.4
Revenue growth (%)
12.3
4.4
3.2
28
31
35
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 4: Gross margin to expand 60bp over FY20-22
Gross Margin (%)
68.2 68.0
62.6
56.9
57.9
64.8 65.6
66.8
65.7 66.2 66.5
Exhibit 5: Ad spends to increase by 150bp over FY20-22
Advertising and Promotion (INR b)
15.8 16.4 15.2
17.7 18.3 17.8 18.6 17.5 17.3 17.8 18.2
2.3
2.8
2.8
3.9
4.3
4.4
4.7
4.7
4.8
5.5
6.3
Source: Company, MOFSL
Source: Company, MOFSL
28 February 2020
3
 Motilal Oswal Financial Services
Emami
Exhibit 6: EBITDA margin to contract 30bp over FY20-22
EBITDA Margin (%)
29.1 30.5 28.4 26.9 27.1 26.8 26.8
5.1
22.5
Exhibit 7: Expect EBITDA CAGR of 11.3% over FY20-22
EBITDA (INR b)
30.1
28.3
20.5
10.5
-5.2
3
3
4
5
7
8
7
0.8
7
3.7
9.9 12.7
EBITDA growth (%)
19.2 20.1
24.4 24.2
8
8
9
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 8: Expect adj. PAT CAGR of 11.8% over FY20-22
PAT (INR m)
27.9
21.6
20.7 18.7
4.5
-8.5
3
3
4
5
6
6
6
6
6
6
7
PAT Growth (%)
14.2
Exhibit 9: Sharp deterioration in return ratios
47.1
42.4
37.1
35.6
ROCE (%)
44.9
40.5
43.2 44.0
35.8
35.8
29.2
28.4
28.2 28.4
31.1
28.2
27.0 25.9
26.7
29.8
31.6
ROE (%)
13.2
0.2
3.1
9.6
28.6
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 1:
Emami P/E (x)
65.0
53.0
41.0
29.0
17.0
5.0
17.1
P/E (x)
Min (x)
Avg (x)
+1SD
41.6
31.5
21.4
19.2
Max (x)
-1SD
54.0
Exhibit 2:
Consumer sector P/E (x)
53.0
45.0
37.0
29.0
21.0
13.0
P/E (x)
Min (x)
Avg (x)
+1SD
39.8
34.1
28.5
22.3
38.7
Max (x)
-1SD
45.8
Source: Company, MOFSL
Source: Company, MOFSL
28 February 2020
4
 Motilal Oswal Financial Services
Emami
Financials and valuations
Income Statement
Y/E March
Net Sales
Change (%)
COGS
Gross Profit
Gross Margin (%)
Operating expenses
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Financial Other Income
Profit before Taxes
Change (%)
Margin (%)
Tax
Deferred Tax
Tax Rate (%)
Adjusted PAT
Change (%)
Margin (%)
Amortization
Reported PAT
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Deferred Liability
Capital Employed
Goodwill on consolidation
Gross Block
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets, L&A
Inventory
Account Receivables
Cash and cash equivalents
Others
Curr. Liab. and Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOFSL Estimates
2015
22,172
21.8
7,800
14,373
64.8
9,018
5,355
20.5
24.2
343
51
964
5,924
27.1
26.7
994
76
18.1
4,856
20.7
21.9
0.0
4,856
2015
454
11,852
12,306
46
470
120
12,942
41
6,393
1,882
4,511
265
5,013
6,934
1,267
1,027
3,541
1,100
3,821
1,990
468
1,363
3,113
12,942
2016
23,583
6.4
8,121
15,462
65.6
8,589
6,873
28.3
29.1
423
540
445
6,354
7.3
26.9
597
-125
7.4
5,762
18.7
24.4
2,127
3,635
2016
454
15,662
16,116
41
6,838
90
23,086
41
24,162
4,408
19,754
616
474
6,037
1,505
1,309
1,084
2,138
3,836
2,487
660
689
2,200
23,086
2017
24,882
5.5
7,910
16,972
68.2
9,380
7,591
10.5
30.5
469
580
311
6,853
7.9
27.5
836
130
14.1
6,021
4.5
24.2
2,617
3,404
2017
454
17,093
17,547
14
4,846
282
22,689
41
25,600
5,616
19,983
129
1,277
4,602
1,792
970
501
1,340
3,343
1,847
622
873
1,259
22,689
2018
25,305
1.7
8,098
17,207
68.0
10,013
7,194
-5.2
28.4
673
343
195
6,374
-7.0
25.2
863
-5
13.5
5,507
-8.5
21.8
2,436
3,071
2018
454
19,682
20,136
6
3,343
118
23,602
41
26,825
8,767
18,058
226
3,136
6,517
1,940
1,559
795
2,224
4,376
2,420
1,077
879
2,141
23,602
2019
26,929
6.4
9,230
17,699
65.7
10,444
7,255
0.8
26.9
768
214
366
6,639
4.2
24.7
1,024
37
16.0
5,517
0.2
20.5
2,485
3,032
2019
454
20,307
20,761
-2
1,168
122
22,048
41
28,738
11,967
16,771
352
1,870
9,151
2,217
2,164
2,034
2,737
6,137
2,914
1,808
1,416
3,014
22,048
2020E
27,791
3.2
9,386
18,405
66.2
10,880
7,526
3.7
27.1
766
259
542
7,043
6.1
25.3
1,338
0
19.0
5,690
3.1
20.5
2,400
3,290
2020E
454
22,691
23,145
-2
2,668
122
25,933
41
27,348
12,733
14,615
250
1,870
15,678
2,086
2,589
8,538
2,466
6,521
3,015
2,058
1,448
9,157
25,933
2021E
30,911
11.2
10,363
20,548
66.5
12,275
8,273
9.9
26.8
850
267
541
7,697
9.3
24.9
1,462
0
19.0
6,234
9.6
20.2
1,275
4,959
2021E
454
23,012
23,466
-2
2,668
122
26,254
41
28,348
13,583
14,765
250
1,870
16,695
2,314
2,710
9,203
2,468
7,367
3,468
2,263
1,637
9,328
26,253
(INR M)
2022E
34,829
12.7
11,554
23,276
66.8
13,951
9,324
12.7
26.8
880
213
557
8,788
14.2
25.2
1,670
0
19.0
7,118
14.2
20.4
1,275
5,843
(INR M)
2022E
454
23,930
24,384
-2
2,668
122
27,172
41
29,348
14,464
14,884
250
1,870
18,339
2,588
2,863
10,390
2,498
8,212
3,873
2,489
1,849
10,127
27,172
28 February 2020
5
 Motilal Oswal Financial Services
Emami
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Depreciation
Other non-operating income
Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Invest.
Change in Equity
(Incr)/Decr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOFSL Estimates
2015
10.7
11.5
27.1
3.5
32.7
24.0
22.4
4.9
20.3
9.5
1.4
44.9
44.0
50.9
17
1.9
-0.3
2015
5,924
343
-182
-525
-956
735
5,341
-1,085
4,256
-2,836
1,576
-2,345
0
0
-1,812
-342
-2,154
842
2,700
3,541
317
2016
12.7
13.6
35.5
1.5
11.8
20.2
18.9
5.2
17.7
7.2
0.6
40.5
35.8
39.1
20
1.3
0.3
2016
4,228
2,549
-71
432
-957
-565
5,616
-1,320
4,296
4,290
-16,062
-13,091
0
0
-680
5,698
5,018
-2,457
3,541
1,084
2017
13.3
14.3
38.7
4.4
33.0
19.4
18.0
4.8
15.8
6.6
1.7
35.8
31.1
28.2
14
1.1
0.2
2017
4,236
3,086
-102
558
-707
226
7,296
-2,814
4,482
-763
655
-2,922
0
7,099
-1,985
-10,072
-4,958
-584
1,084
500
2018
12.1
13.6
44.4
3.5
28.8
21.2
18.9
4.6
16.1
5.8
1.4
29.2
28.2
25.3
23
1.1
0.1
2018
3,926
3,109
-51
316
-809
-612
5,878
-1,232
4,646
-1,863
750
-2,346
0
4,847
-1,194
-6,891
-3,237
295
501
795
2019
12.2
13.8
45.7
4.0
32.9
21.1
18.6
4.2
15.7
5.6
1.6
27.0
28.4
25.8
30
1.2
0.0
2019
4,034
3,253
-125
42
-927
-739
5,537
-1,329
4,208
1,178
129
-22
0
803
-1,589
-3,491
-4,277
1,239
795
2,034
2020E
12.5
14.2
51.0
5.5
43.9
20.5
18.1
3.9
14.5
5.0
2.1
25.9
28.2
29.8
34
1.2
-0.3
2020E
4,643
3,166
-542
259
-1,338
361
6,549
1,492
8,041
0
3,508
5,000
0
1,500
-3,010
-3,535
-5,045
6,504
2,034
8,538
2021E
13.7
15.6
51.7
7.5
54.6
18.7
16.5
3.5
13.1
5.0
2.9
26.7
28.4
35.4
32
1.2
-0.3
2021E
6,422
2,125
-541
267
-1,462
495
7,305
-1,000
6,305
0
2,008
1,008
0
0
-4,104
-3,543
-7,648
665
8,538
9,203
2022E
15.7
17.6
53.7
9.0
57.4
16.4
14.6
3.1
11.5
4.8
3.5
29.8
31.6
41.0
30
1.3
-0.3
(INR M)
2022E
7,513
2,155
-557
213
-1,670
388
8,042
-1,000
7,042
0
2,560
1,560
0
0
-4,925
-3,490
-8,415
1,187
9,203
10,390
28 February 2020
6
 Motilal Oswal Financial Services
Emami
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
28 February 2020
7
 Motilal Oswal Financial Services
Emami
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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.
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