CMP: INR1,209 TP: INR1,400 (+16%) Buy

Transcription

1 BSE SENSEX S&P CNX 35,512 10,895 Bloomberg KMB IN Equity Shares (m) 1,905 M.Cap.(INRb)/(USDb) 2,304 / Week Range (INR) 1218 / 901 1, 6, 12 Rel. Per (%) 9/12/17 Avg Val, INRm Free float (%) 70.0 Financials & Valuations (INR b) Y/E MARCH 2018E 2019E 2020E NII OP Cons. NP NIM (%) Cons. EPS (INR) EPS Gr. (%) Cons. BV. (INR) Cons. RoE (%) RoA (%) Valuations P/E(X) (Cons.) P/BV (X) (Cons.) April QFY18 Results Update Sector: Financials-Banks Kotak Mahindra Bank CMP: INR1,209 TP: INR1,400 (+16%) Buy Operating environment improving; Subs performance remains robust Standalone results: 4QFY18 PAT grew 15% YoY to INR11.24b (4% miss) on higher opex (gratuity provisions) and provisions. Operating profit grew 19% YoY to INR20.2b (in-line), led by 19% YoY NII growth. FY18 PAT, thus, grew 20% YoY to INR40.8b (FY18 consol. PAT up 25.5% YoY to INR62.0b). Margin expanded 15bp QoQ to 4.35% on 41% YoY growth in CASA deposits. SA deposits grew 58% YoY (+12% QoQ). CASA ratio, thus, improved to 50.8% (46.7% in 3QFY18). Asset quality held stable, with NNPL declining by 3.6% QoQ, even as GNPL increased by 3% QoQ. PCR improved by 300bp QoQ to 56.5%, led by significantly higher-than-expected provisioning. GNPL/NNPL ratios, thus, improved 9bp/11bp QoQ to 2.22%/0.98%. SMA-2 advances stood at 4bp of loans at INR720m lowest-ever level since KMB started reporting the same. Loans grew 24.7% YoY (+6.7% QoQ); deposits rose 22.4% YoY (+6.5% QoQ). Share of core deposits (CASA+ TD less than INR50m) was 77% v/s 75% QoQ. Subs performance robust: a) KMPL reported PAT of INR1.6b (+20% YoY), while Kotak Securities reported PAT of INR1.34b (+11% YoY). b) Kotak Mahindra Capital, Life Insurance and Asset Management also reported strong net profit growth, driving consol. net profit to INR17.89b (+27% YoY). c) Asset management business average AUM rose 4% QoQ (+35% YoY). KMB reported embedded value of its life insurance company at INR58.2b, while FY18 new business margin was 29.3% (VNB: INR5.22b). 13-month persistency stands at 85.2% (compares well with other major insurers). Concall highlights: KMB guided for 20%+ loan growth as it continues to see strong momentum across product segments. Bank booked the entire MTM losses in the quarter and did not take any benefit of the forbearance (i.e. spreading the MTM losses or asset quality related) for the quarter. Credit for the full year came in at 56bps. Management guided for lower credit cost going further. Though bank has been growing the unsecured portfolio rapidly; unsecured loans still forms 20% of the total loans on the group level Bank is treading cautiously on the corporate loans in spite of the ample opportunities available Valuation view: Capital light nature of capital market and asset management businesses can provide upside to ROE if there is a strong improvement in business cycle. Green shoots of the same are visible post demon. We expect consolidated ROEs to improve to ~14-15% by FY20e on back strong improvement in banking business. Share of KMB in consol. profit stood at 63% in 4QFY18 (70% in 4QFY17), as growth in subsidiaries remains strong. We expect ~21% earnings CAGR over FY18-20, led by a revival in loan growth and controlled opex. Strong presence across products and healthy capitalization (Tier1 of 17.6%) place the bank in a sweet spot to capitalize on growth opportunities and gain market share. We value KMB at INR1,400 per share, which corresponds to 4.2 Mar-20E ABV for the lending business. Maintain Buy. Research Analyst: Nitin Aggarwal (Nitin.Aggarwal@MotilalOswal.com); Anirvan Sarkar (Anirvan.Sarkar@MotilalOswal.com); Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com); Parth Gutka (Parth.Gutka@motilaloswal.com); Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on Bloomberg, Thomson Reuters, Factset and S&P Capital.

2 Quarterly Performance (INR Million) Y/E March FY17 FY18E FY17 FY18 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Kotak Bank (standalone) Net Interest Income 19,191 19,954 20,503 21,614 22,456 23,126 23,937 25,798 81,261 95,317 % Change (Y-o-Y) Operating Profit 13,150 14,401 15,277 17,021 15,954 17,248 18,201 20,180 59,848 71,582 % Change (Y-o-Y) Net Profit 7,419 8,133 8,798 9,765 9,128 9,943 10,532 11,241 34,115 40,843 % Change (Y-o-Y) Other Businesses Kotak Prime 1,200 1,300 1,330 1,330 1,320 1,500 1,480 1,600 5,150 5,900 Kotak Mah. Investments ,960 2,450 Kotak Mah. Capital Co Kotak Securities ,210 1,250 1,180 1,540 1,340 3,610 5,310 International subs ,150 Kotak Mah. AMC & TrusteeCo ,150 Kotak Investment Advisors Kotak OM Life Insurance ,010 1,030 1, ,140 3,030 4,140 Conso. PAT 10,669 12,023 12,668 14,045 13,467 14,413 16,240 17,890 49,405 62,010 % Change (Y-o-Y) E: MOSL Estimates Exhibit 1: Quarterly performance v/s our estimates and reasons for deviations (INRm) Kotak Bank (standalone) 4QFY18A 4QFY18E v/s Est. Comments Net Interest Income 25,798 24,821 4 Higher than expected loan growth and expansion in % Change (Y-o-Y) margins Operating Profit 20,180 19,946 1 % Change (Y-o-Y) In line Net Profit 11,241 11,696-4 % Change (Y-o-Y) Higher than expected provision Consol. PAT 17,890 18,202-2 % Change (Y-o-Y) Avg. SA balances for the quarter grew 58% YoY, whereas avg. CA balances for the quarter grew 25% YoY Loan growth accelerated further, led by CV and personal loans; improving asset quality and CASA franchise Loans grew 24.7% YoY and 6.7% QoQ, led by 40.4% YoY/14.7% QoQ growth in CV loans, while small business and personal banking grew 44.5% YoY and 9.7% QoQ, respectively. Home loan and LAP grew 24.1% YoY and 4.8% QoQ. Kotak Mahindra Prime s PAT grew 20.3% YoY, while customer assets grew 11.5% YoY. SA deposits grew 57.9% YoY/12.1% QoQ. SA deposits as a proportion of overall deposits stood at 34% (26.4% a year ago). Overall CASA ratio improved 410bp QoQ to 50.8%. CASA and TDs (below INR 50m) constitute 77% of the total deposits. Weighted average SA rate for the quarter was 5.61%. 30 April

3 Bank s digital initiatives showing result in the form of controlled opex. Employee expenses grew 12.6% YoY (led by one time gratuity payment of INR819.2m) Net stress loans including SMA2 accounts at 1.02% of the total advances Proportion of equity AUM increased to 39.6% of overall AUM v/s 26.8% in 4QFY17 Healthy revenue growth and controlled opex drives core performance NII growth of 19.4% YoY was driven by 15bp QoQ expansion in margins and 24.7% YoY loan growth Core fee income grew 33.4% YoY (vs 14.3% YoY in 3QFY18). Opex cost came in at 17.2% YoY. Bank recognized the entire impact of INR819.2m in the quarter due to an amendment in the gratuity act, leading to operating profit growth of 10.9% QoQ. Net stress loans remain one of the lowest in the system While the challenges continue in the economy, KMB reported strong asset quality performance, with a decline in GNPL ratio by 9bp on a QoQ basis. The bank has negligible total net stress on the book. NNPA (0.98% of advances) and SMA2 accounts (INR720m, 4bp of advances) together form 1.02% of advances. Healthy performance in non-lending business Profitability in securities business improved to INR1.34b, 10.7% YoY growth. K-Sec market share stood at 1.9% (stable QoQ). Asset management business reported growth of 2.6% QoQ in PAT at INR390m while average AUM increased 4.1% QoQ (+35.1% YoY), led by strong inflows in equity AUM (+100% YoY). Life insurance profit increased 12.9% YoY to INR1.14b. Exhibit 2: Auto loans grew 11% YoY Exhibit 3: Domestic AUM increased 33% YoY (-1.9% QoQ) Auto Loans (INR b) Other Loans (INR b) Debt Equity PMS Offshore Funds Alternate assets Insurance QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY1 7 2QFY1 7 3QFY1 7 4QFY1 7 1QFY1 8 2QFY1 8 3QFY1 8 4QFY1 8 Exhibit 4: K-Sec: PAT grew 10.7% YoY to 1.34b Exhibit 5: K-Sec market share declined marginally Tot. Inc. PAT PATM (%) QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY April

4 Exhibit 6: Investment banking earnings trend (INRm) Tot Inc. PAT QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 Exhibit 7: Kotak AMC: Equity AUMs trending higher (INRb) Eq. AUM PMS AUM Offshore AUM QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 4QFY18 Conference call highlights Overview Management reiterated for better micro and tougher macro. Formalization of savings in the economy is driving the core business as well as the performance of the subsidiaries. 1/3rd of the profits for the group is contributed by the non- banking subsidiaries. Management expects LGD in excess of 60% for the IBC-related cases. Balance sheet and P&L related Bank booked the entire MTM losses in the quarter and did not take any benefit of the forbearance (i.e. spreading the MTM losses or asset quality related) for the quarter. Credit for the full year came in at 56bps. Management guided for lower credit cost going further. CASA ratio declared by the bank does not include the sweep deposits. As of Mar 18, the sweep deposits form 6.6% of total deposits. On the deposit side: 88% of the incremental recurring deposit; 69% of the incremental FD; and 33% of the incremental retail loans were sourced through 811. Bank introduced on the tap home loans for the salaried class during the quarter. Bank is treading cautiously on the corporate loans in spite of the ample opportunities available. Bank s business banking division consists of SME loans over INR100m. Bank has been very cautious in this segment as businesses are still adjusting to GST. Though bank has been growing the unsecured portfolio rapidly, unsecured loans still form 20% of the total loans on the group level. 811 account: The PHYGITIAL way Other operating expenses include INR1580m spent on 811 for the quarter. Management reiterated that the incremental cost for 811 would be very low going forward. Bank touched the customer base of 13m as of Mar April

5 Cost of acquisition through digital means is 80% lower than the physical means; account balances are lower than normal as the customer profile is completely different. Updates on Life insurance business Group business forms 40% of the total premium. Products offered are credit protect, employer employee group term and individual term. Employer employee group term is a low margins product. Protection side forms 22% of the total business. On APE basis protection forms 7% of the total business. Exhibit 8: One year forward P/E P/E (x) Avg (x) Max (x) 45.0 Min (x) +1SD -1SD Apr-08 Jul-09 Oct-10 Jan-12 Apr-13 Jul-14 Oct-15 Jan-17 Apr-18 Source: Company, MOSL Exhibit 9: One year forward P/B P/B (x) Avg (x) Max (x) 5.9 Min (x) +1SD -1SD Apr-08 Jul-09 Oct-10 Jan-12 Apr Jul Oct Jan Apr-18 Source: Company, MOSL Maintain Buy with a TP of INR1,400 (4.2x Mar-20E ABV) Valuation and view The share of bank in consolidated profits now stands at ~63% (65% in 3QFY18) and we expect this to increase further as synergy benefits show up fully. Strong presence across products and healthy capitalization (Tier1 of ~17.6%), places the bank in a sweet spot to capitalize on growth opportunities and gain market share. Emerging opportunities for mid-size private banks post demon coupled with healthy capitalization leaves KMB in a strong position to capitalize. To leverage on its geographical expansion, the management is focusing on product penetration with higher emphasis on agriculture (will help in priority sector loans), small business loans (untapped opportunity; creating niche for itself) and mortgage loan. Operating leverage is expected to kick in the expanded underutilized capacity. Higher refinancing opportunities, increased product offering on the combined network, customer acquisition through 811, cross sell to existing customers and product penetration to IVBL customers, will keep loan growth healthy. We expect PPoP CAGR of ~20% over FY18-20E, largely driven by stable/marginally decline in margins and operating leverage. Comfort on asset quality remains high with no SDR/5:25 and negligible SMA2 (4bp). Capital light nature of capital market and asset management businesses can provide upside to ROE if there is a strong improvement in business cycle. Green shoots of the same are visible post demon. We expect consolidated ROEs to improve to ~14-15% by FY20e on back strong improvement in banking business. 30 April

6 Backed by higher capitalization, diversified business loan book, strong under writing practices and presence across financial services KMB historically traded at a premium multiples to peers despite relatively lower ROE. We are positive on the business with the expected operating leverage from IVBL. We expect KMB to deliver ~21% earnings CAGR over FY18-20E led by revival in loan growth and controlled opex. At our SOTP of INR1,400 KMB will trade at 4.2x FY20E ABV for the lending business. Maintain Buy. Exhibit 10: Kotak Mahindra Bank (FY20-based) Value (INR B) Value (USD B) INR per share % To Total Rationale Lending Business 2, , Kotak Mahindra Bank 1, x FY20E Net Worth Kotak Prime (Car and other loans) x FY20E Net Worth Kotak Investment Company (LAS) x FY20E Net Worth Asset Management Business % of AUMs Capital Markets related Business Kotak Securities x FY20E Earnings Kotak Investment Banking (KMCC) x FY20E Free Networth Kotak Life Insurance NBM of 28% Subs 20% discount Target Value (Post 20% holding discount) 2, , Current market price 1,209 Upside (%) 16 Summary Core Banking 1, Subsidiaries Total 2, , Source: MOSL Exhibit 11: KMB Group: Earnings Estimates (INR m) Business FY14 FY15 FY16 FY17 FY18 FY19E Kotak Mahindra Bank (Standalone) Banking Business 15,025 18,660 20,898 34,115 40,843 48,938 Kotak Mahindra Prime Auto loans, debt capital markets 4,907 5,077 5,025 5,150 5,900 7,972 Kotak Mahindra Investments Primarily LAS 420 1,060 1,540 1,960 2,450 3,846 Lending Business 20,352 24,797 27,463 41,225 49,193 60,756 International subsidiaries Asset management and inv. banking , ,150 1,342 Kotak Mahindra AMC & Trustee Co Mutual funds management ,150 1,796 Kotak Investment Advisors Alternate asset management Asset Management Business ,820 1,545 2,300 3,138 Kotak Securities Broking and distribution 1,600 2,900 2,510 3,610 5,310 7,381 Kotak Mahindra Capital Company Investment banking Capital Market Business 1,740 3,030 2,830 4,070 5,960 8,036 Consol. PAT excluding Kotak Life 22,752 28,307 32,113 46,840 57,453 71,930 YoY Growth (%) Kotak OM Life Insurance Life insurance 2,390 2,290 2,510 3,030 4,140 4,704 Consolidation Adjust. 6,086 5, Consol. PAT Including Kotak Life 31,228 36,571 34,589 49,404 62,011 77,213 YoY Growth (%) Source: Company, MOSL 30 April

7 Exhibit 12: Valuation Matrix Mkt. Rating Cap CMP TP Upside ABV (INR) RoA (%) RoE (%) P/E (x) P/BV (x) P/ABV (x) FY20E (INRb) (INR) (INR) (%) FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E Private Banks ICICIBC* Buy 1, HDFCB Buy 4,990 1,945 2, AXSB Buy 1, KMB* Buy 2,264 1,210 1, YES Buy IIB Buy 1,132 1,898 2, IDFCB Neutral FB Buy DCBB Neutral JKBK Buy SIB Buy EQUITAS Buy RBK Buy PSU Banks SBIN* Buy 2, PNB Buy NA BOI Neutral BOB Buy CBK Neutral UNBK Neutral INBK Buy (UR)=Under Review, (*) Multiples adj. for value of key ventures/investments; For ICICIBC, SBIN and KMB ABV is adjusted for investment in subsidiaries Source: Company, MOSL 30 April

8 Financials and valuations Income Statement (INR Million) Y/E March E 2019E 2020E Interest Income 1,29,041 1,39,722 1,55,677 1,63,842 1,76,989 1,97,485 2,42,281 2,87,405 Interest Expense 81,598 84,991 93,876 94,838 95,728 1,02,168 1,33,827 1,58,944 Net Interest Income 47,443 54,731 61,800 69,004 81,261 95,317 1,08,454 1,28,460 Growth (%) Non Interest Income 18,875 22,668 29,119 26,122 34,772 40,522 48,019 57,238 Total Income 66,318 77,399 90,919 95,126 1,16,033 1,35,839 1,56,473 1,85,699 Growth (%) Operating Expenses 34,825 40,353 48,711 54,715 56,185 64,257 72,927 83,057 Pre Provision Profits 31,493 37,046 42,208 40,411 59,848 71,582 83,546 1,02,642 Growth (%) Core Operating Profits 20,020 23,953 26,827 38,279 55,432 67,078 78,952 97,956 Growth (%) Provisions (excl tax) 2,758 4,545 4,723 9,174 8,367 9,400 9,172 11,079 PBT 28,735 32,501 37,486 31,237 51,481 62,182 74,374 91,563 Tax 8,998 10,898 12,710 10,339 17,366 21,339 25,436 31,315 Tax Rate (%) PAT 19,737 21,603 24,776 20,898 34,115 40,843 48,938 60,248 Growth (%) Consolidated PAT (incl VYSB) 28,014 31,228 36,571 34,589 49,404 62,010 77,213 95,472 Growth (%) Balance Sheet (INR Million) Y/E March E 2019E 2020E Share Capital 9,116 9,116 9,116 9,172 9,204 9,528 9,528 9,528 Equity Share Capital 9,116 9,116 9,116 9,172 9,204 9,528 9,528 9,528 Preference Share Capital Reserves & Surplus 1,44,646 1,97,401 2,11,405 2,30,453 2,66,975 3,65,310 3,99,179 4,42,499 Net Worth 1,53,762 2,06,517 2,20,521 2,39,625 2,76,179 3,74,838 4,08,707 4,52,027 Of which Equity Networth 1,53,762 2,06,517 2,20,521 2,39,625 2,76,179 3,74,838 4,08,707 4,52,027 Deposits 9,23,628 10,02,891 12,40,148 13,86,430 15,74,259 19,26,433 23,52,174 28,50,835 Growth (%) of which CASA Dep 2,83,534 3,25,865 4,12,995 5,27,764 6,92,646 9,15,056 11,54,918 14,33,970 Growth (%) Borrowings 2,69,219 2,25,641 2,05,411 2,09,753 2,10,955 2,51,542 3,05,095 3,59,549 Other Liabilities & Prov. 38,693 44,937 67,119 86,790 84,507 96,522 1,15,826 1,38,991 Total Liabilities 13,85,301 14,79,986 17,33,198 19,22,598 21,45,900 26,49,334 31,81,802 38,01,402 Current Assets 65,226 1,18,060 97,457 1,08,797 2,25,720 1,96,201 1,78,037 2,15,096 Investments 4,71,517 4,22,053 5,13,313 5,12,602 4,50,742 6,45,624 7,37,717 8,64,331 Growth (%) Loans 8,02,410 8,88,565 10,69,718 11,86,653 13,60,821 16,97,179 20,94,319 25,44,598 Growth (%) Fixed Assets 9,640 16,315 16,204 15,516 15,376 15,272 16,799 18,479 Other Assets 36,508 34,994 36,507 99,030 93,240 95,059 1,54,931 1,58,899 Total Assets 13,85,301 14,79,986 17,33,198 19,22,598 21,45,900 26,49,334 31,81,802 38,01,402 Asset Quality (%) Y/E MARCH E 2019E 2020E GNPA (INR m) 13,283 17,037 22,884 28,381 35,786 38,254 40,911 43,924 NNPA (INR m) 3,205 6,756 10,722 12,620 17,181 16,651 19,102 19,245 GNPA Ratio NNPA Ratio Slippage Ratio Credit Cost PCR (Excl Tech. write off) April

9 Financials and valuations Y/E March E 2019E 2020E Yield and Cost Ratios (%) Avg. Yield-Earning Assets Avg. Yield on loans Avg. Yield on Investments Avg. Cost-Int. Bear. Liab Avg. Cost of Deposits Interest Spread Net Interest Margin Capitalisation Ratios (%) CAR Tier I Tier II Asset-Liability Profile (%) Loans/Deposit Ratio CASA Ratio Cost/Assets Cost/Total Income Cost/Core Income Int. Expense/Int.Income Fee Income/Total Income Non Int. Inc./Total Income Empl. Cost/Total Expenses Investment/Deposit Ratio Profitability Ratios and Valuation RoE RoA Consolidated ROE RoRWA Standalone Book Value (INR) Growth (%) Price-BV (x) Consolidated BV (INR) Growth (%) Price-BV (x) Consolidated EPS (INR) Change (%) Price-Earnings (x) April

10 Corporate profile Company description Kotak Mahindra Bank (KMB) is part of the larger Kotak Mahindra Group led by Mr. Uday Kotak, Founder and Managing Director of the Bank. The group has a strong presence across financial services value chain. Notably, KMB is the only bank in India s corporate history to be converted into a bank from a non-banking finance company. The bank has pan-india presence with 1,333 branches and 2,032 ATMs as on March 31, In 2015, KMB merged with EIVBL in an all-stock deal. Exhibit 1: Sensex rebased Source: MOSL/Bloomberg Exhibit 2: Shareholding pattern (%) Mar-18 Dec-17 Mar-17 Promoter DII FII Others Note: FII Includes depository receipts Source: Capitaline Exhibit 3: Top holders Holder Name % Holding CANADA PENSION PLAN INVESTMENT BOARD 6.0 EUROPACIFIC GROWTH FUND 4.9 ING MAURITIUS INVESTMENTS I 3.7 OPPENHEIMER DEVELOPING MARKETS FUND 3.0 SUMITOMO MITSUI BANKING CORPORATION 1.7 Source: Capitaline Exhibit 4: Top management Name Designation Shankar Acharya Dipak Gupta Uday Kotak Bina Chandarana Chairman Joint Managing Director Executive Vice Chairman & MD Company Secretary Exhibit 5: Directors Name Amit Desai Prakash Apte Farida Khambata S Mahendra Dev Name N P Sarda C Jayaram Mark Edwin Newman Uday Chander Khanna Source: Capitaline *Independent Exhibit 6: Auditors Name S R Batliboi & Co LLP Type Statutory Source: Capitaline Exhibit 7: MOSL forecast v/s consensus EPS (INR) MOSL forecast Consensus forecast Variation (%) FY FY FY Source: Bloomberg 30 April

11 N O T E S 30 April

12 Explanation of Investment Rating Investment Rating Expected return (over 12-month) BUY >=15% Kotak Mahindra Bank 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 becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend. Disclosures: The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations). Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. 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Regional Disclosures (outside India) This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions. For Hong Kong: This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) SFO. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH ) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. 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In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement. The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account. For Singapore In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd ( MOCMSPL ) (Co.Reg. NO Z) which is a holder of a capital markets services license and an exempt financial adviser in Singapore, as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as Institutional Investors, of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore ( the SFA ). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL. Disclaimer: The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai ; Tel No.: ; Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai Tel No: Compliance Officer: Neeraj Agarwal, Id: na@motilaloswal.com, Contact No.: Registration details of group entities.: MOSL: SEBI Registration: INZ (BSE/NSE/MCX/NCDEX); CDSL: IN-DP ; NSDL: IN-DP-NSDL ; Research Analyst: INH AMFI: ARN Investment Adviser: INA IRDA Corporate Agent-CA0541. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP ) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP ) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products 30 April