9 December 2016
Update
| Sector:
Consumer
Marico
BSE SENSEX
26,747
S&P CNX
8,262
CMP: INR254
TP: INR314(+24%)
Upgrade to Buy
Price correction offers attractive entry point
High-quality franchise, reasonable valuations
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
MRCO IN
1290.2
307 / 208
0/0/13
329.1
4.8
408
40.3
Marico offers an attractive investment opportunity, given its high-quality
business and strong growth prospects with access to 4.6m outlets in
urban/rural areas.
With its strong brands, the company has consistently grown its earnings at an
outstanding pace despite considerable input cost volatility.
The company is a pioneer in innovation and use of technology in distribution
– a key competitive advantage.
Marico follows best-in-class disclosure and corporate governance standards,
providing comfort to investors.
We believe long-term investors can consider gaining exposure to the stock
after price correction of 17% over past four months. Subsequently, the stock
trades at 29x December 2018E EPS.
Key strengths:
Marico is one of India’s most admired companies in the
consumer mid-cap space. It has evolved up the value chain from a
commoditized business to a branded play with a diversified portfolio. Apt
positioning of its products and investments behind its brands mean that 95% of
Marico’s portfolio consists of brands that are either no.1 or 2 in their
respective segment. Focus on employee empowerment and innovation is also
noteworthy.
Consistency in growth:
Earnings growth over past 10 years has been
consistently high, despite significant volatility in commodity costs, due to its
diversified branded portfolio. Over the last 3/5/10 years, EBITDA CAGR has
been impressive at 19%-22% and PAT CAGR at 23%-26%. Operating cash flow
CAGR too has been consistently above 18% over the last 3/5/10 years. Besides
this, RoCEs have historically remained at healthy levels. We note that growth
has been superior to its domestic and MNC FMCG peers.
Technology:
Marico has been one the pioneers in the use of technology in
distribution and sales. Distributor-level inventory is managed via just-in-time
approach in most urban centers, and technology usage is spreading fast in rural
areas too. This enables the company to not only expand its footprint rapidly,
but also limit working capital increase despite significant expansion in the
business.
Rural growth:
Marico reaches 4.6m outlets across the country, which is among
the highest for mid-cap consumer companies. Of the 643,000 villages in India,
Marico has close to 100% reach in nearly all 100,000 villages with population of
over 5,000. Its direct reach is close to 850,000 outlets, a large part of which is
rural. According to management, Marico’s rural reach is among the best in
south/west India and extremely good in the east. Around 32-33% of Marico’s
sales come from rural areas, which could increase further once rural recovery
sets in. Marico’s technology investments over past many years should create
huge efficiencies in its rural distribution model (like in urban areas). Auto order
management right up to the lowest level and personal digital assistants (PDAs)
Financials Snapshot (INR b)
Y/E March
2016 2017E 2018E
Sales
60.1
60.1
71.8
EBITDA
10.4
11.2
13.7
Adj. PAT
7.2
7.9
9.8
Adj. EPS (INR)
5.6
6.1
7.6
EPS Gr. (%)
26.1
9.0
24.3
BV/Sh.(INR)
16.3
20.3
24.0
RoE (%)
36.9
33.5
34.3
RoCE (%)
31.4
29.3
30.3
P/E (x)
45.2
41.5
33.4
P/BV (x)
15.6
12.5
10.6
Shareholding pattern (%)
As On
Sep-16 Jun-16 Sep-15
Promoter
59.7
59.7
59.7
DII
3.4
3.3
9.3
FII
29.3
29.3
23.7
Others
7.6
7.7
7.4
FII Includes depository receipts
Stock Performance (1-year)
Marico
Sensex - Rebased
315
270
225
180
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.
Krishnan Sambamoorthy
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Vishal Punmiya
(Vishal.Punmiya@MotilalOswal.com); +91 22 6129 1547

Marico
have been immensely helping the company’s sales/distribution personnel in
ensuring leaner inventory, better demand forecasting and identifying trends.
Quality of disclosure and governance:
Marico’s quality of investor disclosure
and corporate governance is impressive. It has in fact been rated as among the
best not just in FMCG but also across sectors in leading surveys like
Asia Money.
High-quality and extensive investor disclosure helps investors to make informed
decisions.
Valuation and view:
While we have always appreciated the company’s growth
prospects in rural/urban areas, barriers to entry, pioneering use of technology,
benefits of wide distribution reach and best-in-class corporate
governance/disclosure standards, we have balked at having Buy rating for some
time due to its expensive valuations. Although the impact of demonetization is
unclear for next 2-3 quarters (VAHO and youth portfolio likely to be more
affected), we believe there will be no significant impact on longer-term
earnings. In fact, once rural sector growth recovers, the benefits of Marico’s
investments in distribution, products and technology to boost rural growth
should materialize, in our view. The ~17% stock price correction from peak
levels now enables us to turn more constructive on the stock. While there is lack
of clarity on the timing of rural recovery and valuation of 29x December 2018E
EPS is not very cheap, the quality of the business franchise leads us to upgrade
our rating to
Buy.
We had cut FY17E/FY18E EPS by 3% earlier this week to factor
in the demonetization impact. We value the company at 36x FY18E EPS (10%
premium to three-year average multiple), resulting in a target price of INR314,
implying 24% upside.
9 December 2016
2

Marico
Story in Charts
Exhibit 1: Marico’s volume growth barring 2QFY17 has been consistently healthy in its three main categories
Quarter Ending
Asian Paints
Britannia (Biscuits)
Colgate (Toothpaste)
Dabur
Emami
Godrej Consumer
Soaps
GSK Consumer
Hindustan Unilever
ITC (cigarette)
Marico
Parachute
Hair Oil
Saffola
Pidilite
Radico Khaitan
2Q14
12.0
1.0
9.0
10.7
6.0
4.0
10.0
5.0
-4.0
1.0
15.0
7.0
15.0
7.2
3Q14
7.0
3.0
11.0
9.0
1.5
6.0
11.0
4.0
-2.0
2.0
8.0
9.0
11.0
7.6
4Q14
12.0
3.0
7.0
9.2
-10.0
-4.0
8.0
3.0
-3.0
10.0
5.0
11.0
12.0
3.5
1Q15
11.0
10.0
5.0
8.3
12.5
0.0
3.0
5.0
-2.5
6.0
11.0
10.0
13.0
-3.5
2Q15
10.0
6.0
7.0
8.7
11.5
2.0
2.0
5.0
-4.0
7.0
13.0
9.0
10.0
-3.9
3Q15
3.0
8.0
5.0
7.4
11.0
3.0
5.0
3.0
-13.0
8.0
10.0
3.0
7.0
2.0
4Q15
4.0
8.0
5.0
8.1
12.0
5.0
2.0
6.0
-12.0
5.0
5.0
-1.0
5.5
-4.2
1Q16
12.0
10.0
2.0
8.1
15.0
DD
2.0
6.0
-17.0
8.0
14.0
4.0
5.0
-10.3
2Q16
7.0
12.0
3.0
5.5
13.5
MSD
0.0
7.0
-14.0
11.0
8.0
4.0
3.0
-7.2
3Q16
15.0
11.0
1.0
-2.5
9.3
MSD
0.0
6.0
-5.0
4.0
21.0
17.0
6.0
-3.8
4Q16
13.0
10.0
3.0
7.0
18.0
MSD
0.0
4.0
0.0
7.0
15.0
10.0
6.0
2.0
1Q17
11.0
8.0
5.0
4.1
18.0
LDD
-6.0
4.0
3.0
7.0
9.0
11.0
9.0
3.6
2Q17
12.0
10.0
4.0
4.5
11.0
-MSD
-3.0
-1.0
4.0
-6.0
11.0
8.0
7.8
4.5
Source: Company, MOSL
Exhibit 2: While there has been some slowdown of late, we believe rural recovery will
boost volumes
Parachute
24.3
16.5
15.8
10.5
FY10
14.6
23.9
24.8
14.5
9.8
5.3
6.5
FY15
8.8
7.5
FY16
10.0
9.5
0.5
1HFY17
Hair Oil
Saffola
11.1
11.0
FY12
9.5
6.8
FY13
11.0
9.3
4.3
FY14
8.5
FY11
Source: Company, MOSL
Exhibit 3: In 95% of its portfolio, Marico’s brands are No.1 or No2
Indicative Market Share
(%) #
Parachute/Nihar
Coconut Oil (India)
~ 58%
Parachute
Coconut Oil (Bangladesh)
~ 82%
Saffola
Super Premium Refined Edible Oils
~ 63%
(India)
Saffola
Oats (India)
~ 27%*
Parachute Advansed, Nihar Naturals, Hair Hair Oils (India)
~ 32%
& Care
X-Men
Male Shampoo (Vietnam)
~ 38%*
Fiancée / Hair Code
Hair Styling (Egypt)
~ 56%*
Set Wet / Parachute Advansed
Hair Gels & Creams (India)
~ 61%*
Livon / Silk & Shine
Post Wash Hair Serum (India)
~78%
X-Men Men’s Roll-On Deodorants
Roll-On Deodorants (Vietnam)
~31%
# Jun’16 rolling 12-mth vol. market share data; *Value mkt share Source: AC Nielsen, Company, MOSL
Brand
Category
9 December 2016
3

Marico
Exhibit 4:
Marico is able to report strong earnings
Exhibit 5:
….as well as LLP and HDPE costs in past 10
growth despite volatility in Copra costs…
Copra Calicut INR/100Kg
12,000
9,000
6,240
6,000
3,000
years
Liquid Paraffin (INR/Lt)
85
70
55
40
25
HDPE (INR/Kg)
150
130
105
110
90
34
70
50
Source: Company, MOSL
Source: Company, MOSL
Exhibit 6: Net working capital days have been in check despite strong pace of earnings
Cash conversion cycle (Days) FY06 FY07 FY08 FY09 FY10 FY11 FY12
Inventory days
40
41
46
46
54
61
61
Debtor days
16
14
14
15
18
20
18
Creditor days
37
43
43
35
38
36
31
Cash conversion cycle
20
12
17
25
34
45
48
FY13 FY14 FY15 FY16
63
65
57
58
16
16
13
13
33
38
34
37
46
43
36
34
Source: Company, MOSL
Exhibit 7: Marico’s EBITDA and PAT growth has been healthy as well as consistently high
Companies
Marico
Dabur
Emami
GCPL
EBITDA CAGR (%)
3 years
5 years
10 years
19.3
20.5
21.9
15.8
14.2
17.8
26.1
20.9
29.1
18.2
20.2
27.7
3 years
25.9
17.7
22.0
18.3
PAT CAGR (%)
5 years
10 years
24.9
23.6
17.1
18.4
20.1
27.8
19.7
25.8
Source: Company, MOSL
Exhibit 8:
Marico consumer P/E premium v/s Sensex
53.0
45.0
37.0
29.0
21.0
13.0
5.0
26.1
25.8
10.6
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
43.3
35.5
Exhibit 9:
Marico consumer P/E premium v/s Sensex
150
120
90
60
30
0
-30
-60
Marico PE Relative to Sensex PE (%)
LPA (%)
113.5
53.1
Source: Company, MOSL
Source: Company, MOSL
9 December 2016
4

Marico
Exhibit 10: Valuation matrix of coverage universe
Reco
Price
Mkt Cap
EPS Growth YoY (%)
Company
(INR)
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej
GSK
HUL
ITC
Jyothy Labs
Marico
Nestle
Page
Parag Milk
Pidilite Inds.
P&G Hygiene
Radico
United Brew.
United Spirits
Retail
Jubilant
Shopper's
Titan
Neutral
Buy
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Neutral
Neutral
Neutral
935
3,037
923
280
1,034
1,477
5,001
842
233
372
257
6,319
13,820
267
645
6,777
120
856
1,953
869
295
326
(USD M)
13,324
5,409
3,727
7,318
3,485
7,468
3,123
27,055
41,766
1,000
4,915
9,048
2,289
333
4,907
3,267
236
3,360
4,215
849
360
4,296
FY16
26.3
46.3
8.7
17.2
17.7
24.4
20.4
12.9
-3.5
-41.6
26.1
-7.3
18.7
-66.7
47.3
22.0
3.9
12.8
LP
-11.7
19.3
-13.4
FY17E FY18E
16.0
-1.8
-0.4
6.6
3.8
10.8
-5.6
6.9
16.5
102.3
9.1
-8.4
18.6
17.1
12.6
6.6
-23.5
11.2
105.7
-1.4
29.4
5.1
18.8
29.3
31.3
18.5
26.8
31.1
13.4
12.7
16.9
16.2
24.1
25.6
31.5
34.8
16.9
22.0
33.8
32.6
50.8
67.3
22.5
15.5
FY16
50.0
43.3
41.3
39.3
41.0
44.5
29.9
44.2
30.2
90.7
45.8
52.7
66.3
39.7
43.7
52.2
17.4
77.2
116.8
58.1
50.6
40.6
P/E (x)
FY17E FY18E
43.0
44.1
41.5
36.9
39.6
40.2
31.7
41.4
25.9
44.9
41.9
57.6
55.9
33.9
38.8
48.9
22.7
69.4
56.8
58.9
39.1
38.6
36.2
34.1
31.6
31.1
31.2
30.6
28.0
36.7
22.2
38.6
33.8
45.8
42.5
25.1
33.2
40.1
17.0
52.3
37.6
35.2
31.9
33.4
EV/EBITDA (x)
FY16 FY17E FY18E
31.6
30.9
26.2
31.5
35.1
33.1
19.4
30.8
19.1
32.3
31.4
37.1
41.0
15.2
26.6
34.6
11.6
34.0
36.9
21.2
12.2
33.5
27.3
31.8
24.8
29.6
29.5
30.7
21.7
28.9
17.2
25.8
29.2
34.1
36.5
15.0
25.4
31.7
12.7
33.1
29.6
19.7
12.5
28.6
23.2
23.8
19.2
24.8
24.4
24.3
18.9
25.7
14.5
22.2
23.6
26.9
27.1
12.1
21.5
25.3
11.5
26.5
22.4
13.8
10.4
24.6
RoE (%)
FY16
34.7
55.9
67.9
33.3
43.4
23.4
30.8
82.4
29.3
9.1
36.9
40.9
46.0
19.5
29.9
30.8
10.3
14.8
19.8
13.4
6.3
21.3
Div.
FY16
1.0
0.7
1.2
0.7
0.8
0.7
1.1
1.9
2.9
1.1
1.3
0.8
0.6
0.0
0.7
0.5
0.6
0.1
0.0
0.3
0.0
0.7
Note: For Nestle FY16 means CY15
Source: Company, MOSL
9 December 2016
5

Marico
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
COGS
Gross Profit
Margin (%)
Operating Expenses
EBITDA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Other Income – Recurring
Profit before Taxes
Change (%)
Margin (%)
Current Tax (excl MAT Ent)
Tax Rate (%)
Minority Interest
Profit after Taxes
Change (%)
Margin (%)
Reported PAT
2011
31,283
17.6
16,671
14612
46.7
10,515
4,098
9.2
13.1
708
393
279
3,275
6.5
10.5
534
25.9
-50
2,375
-0.3
7.6
2,864
2012
39,682
26.8
21,787
17895
45.1
13,166
4,729
15.4
11.9
725
424
440
4,021
22.8
10.1
709
19.5
-50
3,189
33.5
8.0
3,171
2013
45,843
15.5
22,414
23429
51.1
17,290
6,140
29.8
13.4
866
580
494
5,187
29.0
11.3
1,186
28.2
-98
3,627
15.0
7.9
3,959
2014
46,762
2.0
24,088
22674
48.5
15,301
7,374
20.1
15.8
769
345
685
6,946
33.9
14.9
1,793
27.4
-187
4,854
35.3
10.4
4,854
2015
57,203
22.3
31,356
25847
45.2
17,274
8,574
16.3
15.0
843
230
716
8,217
18.3
14.4
2,383
28.8
-114
5,735
16.0
10.0
5,735
2016
60,148
7.0
30,777
29371
48.8
18,954
10,417
22.8
17.3
949
206
1,030
10,292
25.8
17.1
3,054
29.7
-5
7,233
25.9
12.0
7,233
2017E
60,099
-0.1
28,212
31887
53.1
20,691
11,196
7.5
18.6
1,058
107
1,085
11,116
8.0
18.5
3,224
29.0
-8
7,884
9.0
13.1
7,884
2018E
71,822
19.5
34,652
37169
51.8
23,450
13,720
22.5
19.1
1,157
101
1,353
13,815
24.3
19.2
4,006
29.0
-8
9,800
24.3
13.6
9,800
(INR Million)
2019E
82,192
14.4
38,990
43202
52.6
26,953
16,249
18.4
19.8
1,256
112
1,692
16,573
20.0
20.2
4,806
29.0
-8
11,759
20.0
14.3
11,759
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Capital Employed
Gross Fixed Assets
Intangibles
Less: Accum. Depn.
Net Fixed Assets
Capital WIP
Goodwill
Investments
Current
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Current Liabilities
Provisions
Net Current Assets
Deferred Tax Liability
Application of Funds
E: MOSL Estimates
2011
1,229
7,926
9,155
7,718
17,092
6,177
1,438
-3,366
4,250
648
3,976
890
890
12,203
6,011
1,880
2,131
2,181
5,175
4,098
1,077
7,028
301
17,092
2012
1,230
10,200
11,430
7,848
19,527
7,058
1,589
-4,031
4,617
402
3,955
2,957
2,957
14,017
7,202
2,083
1,321
3,411
6,643
5,446
1,197
7,374
223
19,527
2013
1,290
18,526
19,815
8,719
28,885
8,091
8,918
-4,261
12,748
1,477
3,955
1,516
1,515
17,377
8,627
1,966
2,668
4,117
8,129
6,919
1,210
9,247
-58
28,885
2014
1,290
12,317
13,606
6,798
20,762
8,614
1,020
-3,301
6,333
44
2,543
3,105
3,105
17,624
7,962
2,232
4,064
3,366
8,791
7,934
857
8,833
-96
20,762
2015
1,290
16,958
18,248
4,279
22,664
8,807
1,034
-3,973
5,868
30
4,892
2,838
2,838
17,625
9,947
1,768
2,049
3,861
8,511
7,471
1,040
9,115
-79
22,664
2016
1,290
19,678
20,968
3,317
24,428
9,267
1,060
-4,868
5,458
367
4,980
4,164
4,164
19,261
9,258
2,524
3,097
4,382
9,804
8,642
1,162
9,458
1
24,428
2017E
1,290
24,853
26,143
3,817
29,960
10,707
1,020
-5,926
5,801
130
5,024
5,829
5,829
22,936
9,482
2,753
5,669
5,032
9,694
8,289
1,405
13,242
-67
29,960
2018E
1,290
29,685
30,975
4,267
35,242
11,707
1,020
-7,083
5,644
130
5,024
6,995
6,995
28,957
11,331
3,290
8,536
5,800
11,345
9,725
1,621
17,612
-163
35,242
(INR Million)
2019E
1,290
32,977
34,267
4,717
38,984
12,707
1,020
-8,340
5,388
130
5,024
8,394
8,394
33,076
12,968
3,765
9,634
6,710
12,742
10,894
1,848
20,334
-286
38,984
9 December 2016
6

Marico
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)
2011
1.9
2.9
7.5
0.3
17.1
131.2
87.2
10.1
77.2
34.0
0.1
30.3
19.3
23.4
22
1.8
0.8
2012
2.6
3.2
9.3
0.3
13.5
97.8
80.0
7.9
66.7
27.3
0.1
31.0
19.6
22.8
19
2.0
0.7
2013
2.8
3.7
15.4
0.3
8.9
90.2
67.8
7.2
54.0
16.5
0.1
23.2
17.1
19.9
16
1.6
0.4
2014
3.8
4.4
10.5
2.0
53.1
67.4
58.2
7.0
44.3
24.0
0.8
29.0
21.3
26.1
17
2.3
0.5
2015
4.4
5.1
14.1
1.2
28.1
57.0
49.7
5.7
38.1
17.9
0.5
36.0
27.7
35.2
11
2.5
0.2
2016
5.6
6.4
16.3
3.4
60.2
45.2
39.6
5.4
31.0
15.6
1.3
36.9
31.4
38.6
15
2.5
0.2
2017E
6.1
6.8
20.3
3.0
49.1
41.5
37.0
5.3
28.5
12.5
1.2
33.5
29.3
41.0
17
2.0
0.1
2018E
7.6
8.4
24.0
3.2
42.1
33.4
30.2
4.4
23.0
10.6
1.3
34.3
30.3
47.1
17
2.0
0.1
2019E
9.1
10.0
26.6
5.5
60.3
27.8
25.5
3.8
19.3
9.5
2.2
36.0
31.9
52.7
17
2.1
0.1
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Int./Div. Received
Depreciation
Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Invest.
(Incr)/Decr in Debt
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2011
3,275
-279
708
393
-534
-1,178
2,386
-1,842
544
-63
-1,905
3,260
-472
-2,252
536
1,017
1,115
2,131
2012
4,021
-440
725
424
-709
-1,156
2,864
-787
2,077
-2,067
-2,853
130
-500
-450
-821
-810
2,131
1,321
2013
5,187
-494
866
580
-1,186
-527
4,427
-9,436
-5,009
1,440
-7,996
871
-385
4,429
4,915
1,346
1,321
2,667
2014
6,946
-685
769
345
-1,793
1,811
7,391
8,807
16,199
-1,589
7,218
-1,921
-2,673
-8,619
-13,213
1,397
2,668
4,064
2015
8,217
-716
843
230
-2,383
-2,296
3,895
-193
3,702
267
74
-2,519
-1,745
-1,720
-5,984
-2,015
4,064
2,049
2016
10,292
-1,030
949
206
-3,054
705
8,068
-822
7,246
-1,326
-2,148
-963
-5,025
1,115
-4,872
1,048
2,049
3,097
2017E
11,116
-1,085
1,058
107
-3,224
-1,212
6,760
-1,164
5,596
-1,666
-2,830
500
-4,528
2,670
-1,358
2,572
3,097
5,670
2018E
13,815
-1,353
1,157
101
-4,006
-1,503
8,210
-1,000
7,210
-1,166
-2,166
450
-4,830
1,202
-3,178
2,867
5,669
8,536
(INR Million)
2019E
16,573
-1,692
1,256
112
-4,806
-1,624
9,819
-1,000
8,819
-1,399
-2,399
450
-8,301
1,529
-6,322
1,098
8,536
9,633
9 December 2016
7

This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company (ies) and/sector(s), if any, covered in the report and may be distributed by it and/or
Marico
its affiliated company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or
inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to
you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment
objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek
professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide
for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a some
companies covered by our Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are
seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may educate
investors on investments in such business . The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering,
applying and interpreting information. Our research professionals are paid on twin parameters of performance & profitability of MOSt.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally,
MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or
affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make
investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing among other things, may give rise to real or potential
conflicts of interest. MOSt and its affiliated company(ies), their directors and employees 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 affiliates of MOSt even though
there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not
match with a report on a company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set of customers having various
objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from,
any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt 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. The information contained herein is based on publicly available data or other
sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a
subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the
document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons
that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in
the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation
the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or
for any necessary explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any compensation
for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this
report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
Pending Regulatory inspections against Motilal Oswal Securities Limited:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold inquiry and
adjudge violation of SEBI Regulations; MOSL replied to the Show Cause Notice whereby SEBI granted us an opportunity of Inspection of Documents. Since all the documents requested by us were not covered we have requested
to SEBI vide our letter dated June 23, 2015 to provide pending list of documents for inspection.
List of associate companies of Motilal Oswal Securities Limited -
Click here to access detailed report
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. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research
receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
Analyst ownership of the stock
Served as an officer, director or employee -
MARICO
No
No
Disclosures
A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes
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 MOSt & 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 Kong 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 Securities Limited (MOSL) 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 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
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the
Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
Motilal Oswal Securities Ltd
9 December 2016
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
8