13 August 2020
1QFY21 Results Update | Sector: Metals
Hindalco
Buy
Estimate change
TP change
Rating change
CMP: INR176
TP: INR233 (+33%)
Outlook for Novelis positive
Demand and margin improving to pre-COVID levels
Hindalco’s (HNDL) subsidiary Novelis’ 1QFY21 operating results were weak
(in-line). EBITDA was down 40% YoY to USD219m on like-to-like basis
(excluding Aleris) due to the impact of COVID-19.
However, business performance improved substantially with both volumes
and margin now inching back to pre-COVID levels. We have raised our
FY21/FY22E EBITDA estimates by 4%/6% and reiterate
Buy.
Note that
HNDL IN
valuation at 5.3x FY22E EV/EBITDA (~20% discount to 10-year average) does
2,229
not factor in the expected ~9% CAGR in EBITDA over FY20-22E.
394.8 / 5.4
221 / 85
Novelis’ 1QFY21 EBITDA declines on lower volumes and adverse mix
3/-2/-2
th
1943
1QFY21 results include Aleris’ acquisition from 15 Apr’20. Thus, it is strictly
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Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financial Snapshot (INR b)
Y/E MARCH
Sales
EBITDA
Adj. PAT
EBITDA Margin (%)
Cons. Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA(x)
Div. Yield (%)
FCF Yield (%)
2020 2021E 2022E
1,181 1,308 1,447
142.1 142.3 167.7
38.9
34.2 48.6
12.0
10.9 11.6
17.5
15.4 21.8
-29.2 -12.1
42.0
172
174
193
1.0
10.1
8.5
8.0
10.1
1.0
5.5
0.7
15.0
1.4
8.9
6.7
12.9
11.4
1.0
6.6
1.0
15.6
1.2
11.9
8.1
14.5
8.1
0.9
5.3
1.5
23.8
not comparable to previous quarters.
Reported Adj. EBITDA at USD253m was down 31% YoY (v/s est. USD264m
incl. Aleris). However, it was down 40% YoY to USD219m (excl. Aleris) with
EBITDA of USD34m (included in 1QFY21 results).
Volumes declined 6% YoY to 781kt (v/s est. 755kt) on a reported basis and
by ~15% YoY to 706kt on a like-to-like basis (excluding 75kt sales in the
quarter from Aleris). Volumes were largely impacted by ~50% YoY decline in
automotive shipments.
Adj. EBITDA/t was down 27% YoY to USD324/t (v/s est. USD351/t). On ex-
Aleris basis, it was down 30% YoY to USD310m, due to weak volume mix
(lower auto business) and negative operating leverage.
FCF post capex was negative at USD146m (v/s negative USD94m in 1QFY20).
Capex in 1QFY21 stood at USD106m (v/s USD162m last year).
Net debt increased by USD3.0b QoQ to USD6.2b by end-Jun’20 due to
acquisition of Aleris for USD2.8b as well as increase in working capital. Net
debt/EBITDA increased to 3.8x (v/s 2.1x at end-FY20).
Liquidity profile remained strong at USD2.1b at end-Jun’20.
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Jun-20 Mar-20 Jun-19
34.7
34.7
34.7
27.3
26.7
24.4
18.8
18.9
22.4
19.3
19.7
18.6
FII Includes depository receipts
Key Highlights: Volumes back to pre-COVID levels
Beverage can demand remained strong. Automotive volumes recovered
gradually and are back to pre-COVID levels. The company has achieved
record-high automotive volumes in China during 1QFY21.
Among the newly acquired portfolio from Aleris, performance of Aerospace
is likely to remain muted whereas Building & Construction is likely to
improve with recovery in the economy. Specialty continues to do well, led by
strong demand from electronics and EVs.
EBITDA is guided to improve in the ensuing quarters. Management expects
sustainable EBITDA/t of USD450-475.
Interest cost is expected at USD260-270m for the full year (v/s USD240m in
FY20), which is lower than expected due to the lower prevailing interest
rates.
Amit Murarka - Research analyst
(Amit.Murarka@motilaloswal.com)
Basant Joshi - Research analyst
(Basant.Joshi@motilaloswal.com)
28 July 2020
1
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
Hindalco
Capex (incl. Aleris) for FY21 has been guided in the range of USD450-500m,
including sustenance capex of USD250m for Novelis and Aleris.
Novelis’ capacity (post Aleris acquisition) stands at 4.0mtpa (implying Aleris
capacity of 0.6mtpa, which excludes divestment of Duffel and Louis Port). It
would increase to 4.2mtpa post completion of 200kt expansion in China.
Valuation and view
Outlook for Novelis is positive due to by resilience in the beverage can business
and global recovery in auto demand (a high margin business).
Profitability in its primary aluminum business in India is also improving, led by
lower costs and rebound in LME aluminum prices (now nearly flat YoY).
With ~75% EBITDA contribution from the non-LME business (Novelis + Aleris),
we also see relatively higher stability in HNDL’s earnings.
The stock trades at an attractive valuation of 5.3x EV/EBITDA and 8.1x P/E on
FY22E. We value it at INR233/share (earlier INR198) based on SOTP. Re-iterate
Buy.
Quarterly Performance (Novelis) – USD m
Y/E March
Sales (000 tons)
Change (YoY %)
Net Sales
Change (YoY %)
EBITDA (adjusted)
Change (YoY %)
EBITDA per ton (USD)
Interest
Depreciation
PBT (before EO item)
Extra-ordinary Income
PBT (after EO item)
Total Tax
Reported PAT
Change (YoY %)
Adjusted PAT
1Q
830
4.1
2,925
-5.6
368
10.2
443
62
88
218
(28)
190
63
127
-7
155
FY20
2Q
3Q
835
797
3.5
-0.4
2,851
2,715
-9.1
-9.8
378
343
6.5
6.5
453
430
58
57
88
91
232
195
(60)
(39)
172
156
49
49
123
107
6
37
183
146
4Q
811
-6.8
2,726
-11.6
354
-0.8
436
63
94
197
(113)
84
21
63
-39
176
1Q
781
-5.9
2,426
-17.1
253
-31.3
324
67
118
68
(176)
-108
-29
-79
-162
97
FY21E
2QE
3QE
904
908
8.2
13.9
3,131
3,235
9.8
19.2
362
381
-4.3
11.2
400
420
69
69
120
120
173
192
(30)
(30)
143
162
43
49
100
114
-19
6
130
144
4QE
943
16.3
3,399
24.7
406
14.8
431
65
122
220
(24)
196
59
137
117
161
FY20
3,273
0.0
11,217
-9.0
1,443
5.5
441
240
361
842
(240)
602
182
420
-3
660
FY21E
3,536
8.0
12,155
8.4
1,402
-2.8
397
270
480
653
(260)
393
121
271
-35
531
vs Est
1QE*
(%)
673
16
-19.0
1,981
22
-32.3
237
7
-35.7
352
-8
75
-11
88
34
73
-7
(30)
43
13
30
-76
60
*estimate based on ex-Aleris basis, hence, not comparable
Management call highlights
Beverage can market
Beverage can volumes declined to low single-digit during the quarter as
weakness in South America and Asia can volumes was offset by strong demand
in North America.
Demand remains resilient in North America and Europe due to strong in-house
consumption trend. Beverage cans in South America is also improving.
Auto market
Automotive volumes declined ~50% YoY due to customer shutdowns in Apr’20.
The company achieved record shipments in automotive in China during the
quarter.
However, volumes recovered gradually during the quarter led by restocking
demand from customers and are back to pre-COVID levels.
13 August 2020
2
 Motilal Oswal Financial Services
Hindalco
Management is cautiously optimistic about demand with limited medium-term
visibility.
Aerospace market
Demand has been impacted significantly due to lower consumer travel trends.
Management expects demand to remain muted from the segment during FY21.
Specialties and other segment
Specialties segment witnessed double-digit growth during the quarter due to
integration of the Aleris business.
Among the newly acquired portfolio from Aleris, Building and Construction is
likely to improve with recovery in the economy.
Demand is also gradually improving on MoM basis, led by strong demand from
electronics and EVs.
Guidance
Management expects aluminum-scrap spreads to remain strong in North
America, thereby, supporting margins.
EBITDA is guided to improve in the ensuing quarters. Management expects
sustainable EBITDA/t of USD450-475.
Interest cost should stand at USD260-270m for the full year (v/s USD240m in
FY20), which is lower than expected due to lower prevailing interest rates.
Capex (incl. Aleris) or FY21 has been guided in the range of USD450-500m. This
includes sustenance capex of USD200m for Novelis and USD50m for Aleris.
Novelis’ capacity (post Aleris acquisition) stands at 4.0mtpa (implying Aleris’
capacity of 0.6mtpa excl. divestment of Duffel and Louis Port). It would increase
to 4.2mtpa post completion of 200kt expansion in China.
Management expects synergy from the Aleris’ acquisition to be far higher than
the guided amount of USD150m. Of this, USD85m is traditional synergy, which it
has started to realize. However, USD65m would come post commissioning of its
200ktpa capacity in China.
Update on Duffel and Lewis Port
Duffel plant sale is pending approval from Chinese Authorities.
The company expects to sell the Lewis Port asset over the next 12 months.
The company reported net loss of USD18m from Lewis Port and Duffel Plant
operations (disclosed under discontinued operations).
Duffel and Lewis Port had net assets of USD1.1b as disclosed in the Balance
Sheet.
Others
Management is looking to refinance bridge financing loan of USD1.1b with
unsecured debt.
Gross debt stood at USD7.9b at end-Jun’20, while net-debt stood at USD6.2b.
Management would look to reduce gross debt once uncertainty related to
COVID-19 subsides.
Commissioning of Zhanghou is likely to be done in 3QFY21, while Kentucky in
the US will be done in the beginning of CY21.
13 August 2020
3
 Motilal Oswal Financial Services
Hindalco
Exhibit 1: Novelis’ adjusted EBITDA (USD m)
Exhibit 2: Novelis’ EBITDA/t and shipments
EBITDA/ton (USD)
Shipments (ktpa)
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 3: Novelis’ FRP shipments (kt)
320
260
200
140
80
North America
Europe
Asia
South America
Exhibit 4: Novelis’ regional EBITDA/t trends
1,000
800
600
400
200
0
North America
Europe
Asia
South America
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 5: Novelis’ capex (USD m)
Source: MOFSL, Company
13 August 2020
4
 Motilal Oswal Financial Services
Hindalco
Valuation and view
Outlook for Novelis is positive, led by resilience in the beverage can business
and global recovery in auto demand, which is a high margin business.
Profitability in its primary aluminum business in India is also improving, led by
lower costs and rebound in LME aluminum prices (now nearly flat YoY).
With ~75% EBITDA contribution from the non-LME business (Novelis + Aleris),
we also see relatively higher stability in HNDL’s earnings.
The stock trades at an attractive valuation of 5.3x EV/EBITDA and 8.1x P/E on
FY22E. We value it at INR233/share (earlier INR198) based on SOTP. Re-iterate
Buy.
Exhibit 6: Target price derivation
INR m
India operations
Novelis
Enterprise Value
Net-Debt
Equity Value (a)
Investment in Listed securities @10% discount (b)
Target Price INR/sh. (a+b)
Multiple
5.5
6.0
FY22E
EBITDA
39,473
1,28,236
EV
2,17,101
7,69,418
9,86,519
5,01,827
4,84,692
34,300
INR Per
share
98
346
444
226
218
15
233
Source: MOSL
13 August 2020
5
 Motilal Oswal Financial Services
Hindalco
Financials and Valuations
Consolidated Income Statement
Y/E March
Net sales
Change (%)
Total Expenses
EBITDA
% of Net Sales
Depn. & Amortization
EBIT
Net Interest
Other income
PBT before EO
EO income (exp)
PBT after EO
Tax
Rate (%)
Reported PAT
Minority interests
Share of asso.
Adjusted PAT
Change (%)
2016
9,87,589
-4.1
9,01,047
86,542
8.8
43,468
43,074
51,338
11,888
3,624
-5,765
-2,141
4,984
-232.8
-7,125
-4,508
1,715
4,863
-82.6
2017
10,01,838
1.4
8,77,479
1,24,359
12.4
44,572
79,786
57,424
11,110
33,472
-76
33,395
14,326
42.9
19,069
-174
-251
19,069
-22.9
2018
11,51,717
15.0
10,13,513
1,38,204
12.0
45,062
93,141
39,107
10,046
64,080
17,742
81,821
20,742
25.4
61,080
-1
-1,251
42,088
120.7
2019
13,05,423
13.3
11,50,317
1,55,105
11.9
47,770
1,07,335
37,780
11,271
80,826
80,826
25,881
32.0
54,945
-7
5
54,957
30.6
2020
11,81,440
-9.5
10,39,380
1,42,060
12.0
50,910
91,150
41,970
11,860
61,040
-1,840
59,200
21,570
36.4
37,630
40
38,884
-29.2
(INR Million)
2021E
13,07,533
10.7
11,65,276
1,42,256
10.9
61,522
80,735
44,366
11,575
47,944
47,944
13,795
28.8
34,149
40
34,189
-12.1
2022E
14,46,547
10.6
12,78,838
1,67,709
11.6
62,765
1,04,944
43,943
12,217
73,218
73,218
24,702
33.7
48,517
40
48,557
42.0
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill
Capital WIP
Investments
Working capital Assets
Inventory
Account Receivables
Cash and Bank Balance
Others (incl. LT)
Working capital liability
Account Payables
Others (incl. LT)
Net Working Capital
Appl. of Funds
2016
2,049
4,04,017
4,06,066
3,813
6,74,754
20,970
11,05,603
10,57,871
3,78,494
6,79,377
1,77,353
42,138
47,488
4,65,104
1,67,873
79,184
1,20,962
97,085
3,05,857
1,50,598
1,55,259
1,59,247
11,05,603
2017
2,227
4,58,361
4,60,588
62
6,37,515
20,168
11,18,333
10,40,510
3,64,991
6,75,518
1,71,350
18,139
62,057
5,29,543
1,82,914
82,748
1,72,129
91,752
3,38,275
1,78,581
1,59,694
1,91,269
11,18,333
2018
2,229
5,46,289
5,48,518
86
5,20,155
31,333
11,00,092
10,82,644
4,10,054
6,72,590
1,78,294
20,629
68,778
5,29,846
2,16,314
99,598
1,19,612
94,322
3,70,046
2,04,392
1,65,655
1,59,800
11,00,092
2019
2,224
5,72,793
5,75,017
95
5,24,150
36,505
11,35,767
11,30,670
4,57,824
6,72,846
1,85,746
40,971
51,567
5,67,157
2,21,938
1,14,598
1,36,419
94,203
3,82,520
2,07,244
1,75,276
1,84,637
11,35,767
2020
2,224
5,80,950
5,83,174
100
6,74,190
37,610
12,95,074
11,99,704
5,08,734
6,90,970
2,00,980
77,210
31,320
6,85,704
2,23,840
93,450
2,78,480
89,934
3,91,110
1,82,820
2,08,290
2,94,594
12,95,074
2021E
2,224
6,11,358
6,13,582
100
7,87,832
40,369
14,41,884
14,51,485
5,70,255
8,81,230
2,26,105
37,473
31,360
6,88,943
2,43,595
1,21,798
2,33,616
89,934
4,23,227
2,14,937
2,08,290
2,65,716
14,41,884
(INR Million)
2022E
2,224
6,53,910
6,56,134
100
7,61,151
45,309
14,62,694
15,14,495
6,33,020
8,81,474
2,26,105
28,184
31,400
7,41,609
2,61,567
1,30,784
2,59,324
89,934
4,46,079
2,37,789
2,08,290
2,95,530
14,62,694
13 August 2020
6
 Motilal Oswal Financial Services
Hindalco
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share (adj.)
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
EBITDA Margins (%)
Net Profit Margins (%)
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Inventory (Days)
Payable (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Debt/Equity
2016
2.4
17.7
111.6
1.0
49.3
74.2
9.9
1.6
0.9
10.6
0.6
8.8
0.5
2.2
4.9
5.0
35.6
0.9
0.9
29.3
62.0
55.7
1.5
0.8
2.4
2017
8.6
28.6
129.9
1.1
15.0
20.6
6.2
1.4
0.9
6.9
0.6
12.4
1.9
7.1
8.2
9.1
31.7
1.0
0.9
30.1
66.6
65.1
1.6
1.4
1.6
2018
18.9
47.6
166.1
1.4
8.7
9.3
3.7
1.1
0.7
5.7
0.8
12.0
3.7
12.8
9.3
10.8
35.3
1.1
1.0
31.6
68.6
64.8
1.4
2.4
1.1
2019
24.7
46.2
175.0
1.2
5.7
7.1
3.8
1.0
0.6
5.0
0.7
11.9
4.2
14.5
10.6
11.9
36.2
1.2
1.1
32.0
62.1
57.9
1.5
2.8
1.0
2020
17.5
39.8
171.8
1.2
8.0
10.1
4.4
1.0
0.7
5.5
0.7
12.0
3.3
10.1
8.5
10.3
41.5
1.0
0.9
28.9
69.2
56.5
1.8
2.2
1.0
2021E
15.4
43.0
174.2
1.7
12.9
11.4
4.1
1.0
0.7
6.6
1.0
10.9
2.6
8.9
6.7
7.9
0.9
0.9
34.0
68.0
60.0
1.6
1.8
1.4
2022E
21.8
50.0
193.4
2.7
14.5
8.1
3.5
0.9
0.6
5.3
1.5
11.6
3.4
11.9
8.1
9.2
1.0
1.0
33.0
66.0
60.0
1.7
2.4
1.2
Cash Flow Statement
Y/E March
EBITDA
XO Exp. (income)
tax paid
Change in WC
CF from Op. Activity
(Inc)/Dec in FA + CWIP
Free Cash Flow to firm
(Pur)/Sale of Inv. & yield
Others & M&A
CF from Inv. Activity
Equity raised/(repaid)
Debt raised/(repaid)
Interest
Dividend (incl. tax)
CF from Fin. Activity
(Inc)/Dec in Cash
Add: Opening Balance
Closing Balance
2016
86,542
1,543
-12,291
41,083
1,16,877
-42,452
74,426
15,859
6
-26,586
1
-36,003
-50,057
-2,558
-88,619
1,673
1,19,289
1,20,962
2017
1,24,359
3,622
-7,797
6,691
1,26,875
-29,376
97,499
5,667
3,524
-20,185
33,141
-25,430
-60,754
-2,479
-55,523
51,167
1,20,962
1,72,129
2018
1,38,204
2,617
-14,081
-17,862
1,08,877
-30,008
78,870
24,685
8,052
2,730
162
-1,22,863
-38,486
-2,938
-1,64,124
-52,517
1,72,129
1,19,612
2019
1,55,105
439
-18,883
-16,865
1,19,795
-60,053
59,742
6,615
5,110
-48,328
-1,176
-14,443
-35,813
-3,229
-54,660
16,807
1,19,612
1,36,419
2020
1,42,060
-2,610
-1,020
-11,780
1,26,650
-67,910
58,740
7,110
10,111
-50,689
1,09,460
-40,160
-3,200
66,100
1,42,061
1,36,419
2,78,480
(INR Million)
2021E
1,42,256
7
-11,036
-15,986
1,15,241
-54,152
61,089
11,575
-1,84,725
-2,27,302
1,15,350
-44,366
-3,781
67,204
-44,857
2,78,480
2,33,623
2022E
1,67,709
7
-19,761
-4,107
1,43,848
-50,402
93,446
12,217
-38,186
-30,000
-43,943
-6,005
-79,947
25,715
2,33,616
2,59,331
13 August 2020
7
 Motilal Oswal Financial Services
Hindalco
NOTES
13 August 2020
8
 Motilal Oswal Financial Services
Hindalco
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
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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
********************************************************************************************************************************
13 August 2020
9
 Motilal Oswal Financial Services
Hindalco
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.
13 August 2020
10