22 November 2019
Update | Sector: Retail
Trent
Buy
BSE SENSEX
40,359
S&P CNX
11,914
CMP: INR504
TP: INR605 (+20%)
Zudio – Bazooka in the closet!
Encouraging insights from store visit
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
TRENT IN
We visited two Zudio stores – TRENT’s recently started value fashion format – to explore
332
its offerings. Key insights highlighted below:
179.1 / 2.5
We came back enthused with Zudio’s value proposition – it targets the youth with
568 / 313
stylish interiors, good fashionable/fast churning product inventory, sharp pricing and
-7/33/41
high focus on throughputs – which we believe would help in garnering healthy store
79
63.0
revenue and profitability.
Financials Snapshot (INR b)
to retain operations and garner very high ROCE given the latter’s limited investment
Y/E Mar
2019 2020E 2021E
in only inventory, which has nearly 10-12x turns. The franchisee on the other hand
Net Sales
26.3
34.4
44.1
spends on store capex and retains about 12-15% IRR.
EBITDA
2.3
5.5
7.5
PAT
1.0
1.5
2.7
The FOCO model should allow Zudio to accelerate its pace of store addition. Of the
EPS (INR)
2.9
4.6
8.0
targeted 100 store adds in FY20, 60 stores are already in place.
Gr. (%)
11.6
56.9
74.1
While TRENT is richly valued, we believe that Zudio’s high growth and profitability
BV/Sh (INR)
49.5
82.7
90.7
potential can help sustain these valuations. Maintain Buy with TP of INR605/share.
RoE (%)
6.0
6.9
9.2
RoCE (%)
6.4
8.8
8.4
Trendy products with sharp pricing
P/E (x)
149.0 110.2
63.3
The Zudio store and products have a trendy look and feel, offer only casual wear
P/BV (x)
8.8
6.1
5.6
Shareholding pattern (%)
As On
Sep-19 Jun-19 Sep-18
Promoter
37.0
32.6
32.6
DII
15.9
17.1
15.1
FII
21.0
22.1
23.7
Others
26.1
28.1
28.6
FII Includes depository receipts
Stock Performance (1-year)
Trent
570
490
410
330
250
Sensex - Rebased
Zudio’s capex light FOCO (franchisee owned company operated) model allows TRENT
(no formals) and is targeted at young value-seeking consumers. Despite operating
on the outskirts of the city, the store sells a high proportion of stylish western
wear. Yet the pricing is attractive (average price ~INR300-400) with ~65% products
priced below INR499 and no product priced over INR999. While this has been
partly achieved by offering lower cost polyester-blended fabric with cotton/viscose
(clearly below Westside’s product quality), it is by no means sub-standard. The
lower pricing has also been possible due to (a) passing-on of low gross margin
benefits (~30% v/s Westside’s 55%), and (b) no marketing costs (in line with
Westside).
High throughput (revenue/sqft) and quick inventory churn
Given the low gross margins, Zudio’s success lies in its strong turnover –
revenue/sqft of ~12-15k/sqft (v/s industry average of INR8-10k/sqft). This is
derived through a combination of strong footfalls and healthy conversion, which is
~2x v/s other retail outlets in the apparel/value fashion category that we have
visited earlier. Zudio’s high fashion appeal and sharp pricing has led to an
encouraging store operating metrics. Also, the store’s inventory churn is less than
one month (corroborating with the CEO’s remarks in the AGM) with weekly ~15%
product refresh, thus, products are changed every two months.
Aliasgar Shakir – Research Analyst
(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Suhel Shaikh – Research Analyst
(Suhel.Ahmad@MotilalOswal.com); +91 22 5036 2611
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
Trent
Aggressive store adds through franchisee model
Zudio has adopted a unique FOCO model, unlike the conventional COCO/FOFO
model used in the industry. Therefore, a franchisee’s capex is INR15-20m for a store
size of 6k sqft; in turn, a franchisee receives a fixed revenue share, while the
company operates the store and retains the profitability. Typically, franchisees get
~16% revenue share and 12-15% IRR, while the company garners strong ROCE on
merely one-month inventory capital.
Zudio could be a big revenue/EBITDA contributor in 3-5 years
Zudio made its debut just two years ago. Since then, it has expanded to 40
standalone stores with revenue of INR1.5b in FY19. While currently Zudio’s revenue
is insignificant in TRENT’s overall consolidated revenue base of INR26.3b, we expect
it to grow tremendously in the coming years. According to our estimates, Zudio will
see 70/80/100 store adds in FY20/21/22, taking its total store strength to 290 by
FY22. Also, we expect Zudio’s revenue to hit INR14.5b by FY22. Thus, Zudio is
expected to contribute 26% to TRENT’s overall revenue; contribution toward EBITDA
is also expected at similar level. However, our estimates are conservative and still
below management’s target of 100 store adds annually, which would take Zudio’s
total store count to 340 by FY22, ensuring stable 6-7% EBITDA margin. Note that our
estimated average revenue/sqft of ~INR8k is much below the like-to-like
INR14k/sqft indicated in the company’s Annual Report 2019 and even for the two
Zudio stores that we visited.
Valuation and view
In our opinion, Westside/Zudio should see higher pace of store addition at 105/250
stores cumulatively over FY19-22E. Also, we expect TRENT’s consolidated
revenue/EBITDA/PAT to register CAGR of 29%/62%/62% on pre-Ind AS 116 over
FY19-22E. With strong contribution from margin-accretive private labels (over 90%)
and faster execution capabilities of new launches, TRENT should witness healthy
growth. While the recent fund raise is expected to have a near-term impact of
equity dilution on earnings growth and RoIC, over a three-year period, the dilution
could drive accelerated growth. Our SOTP-based TP of INR605 values Westside and
Zara at 30x EV/EBITDA and Star at 2x EV/sales on Sep’21E. Due to Zudio being
currently loss-making, it has suppressed Westside’s earnings. But, we expect
valuations to normalize as Zudio turns profitable over the next 3-5 years. Maintain
Buy.
Exhibit 1: Zudio to witness 8x growth in revenues over FY19-
FY22E…
Zudio's total revenues (INR b)
YoY growth (%)
143.3%
92.9%
22.0%
8.3% -1.0% 14.6%
1.0
1.0
1.0
1.2
1.4
41.7%
70
65.2%
33
5.0
9.6
15.8
1
7
6
40
110
190
290
Exhibit 2: …led by strong focus on store additions
Zudio - Standalone
Zudio - Store adds
100
80
2.0
Source: MOFSL, Company
Source: MOFSL, Company
22 November 2019
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Healthy economics - Working on FOCO model, with low
margin, high turns
Capex light model retaining high ROCE
Unique
FOCO (Franchisee
Owned Company Operated)
model allows Zudio to garner up
to
60% RoCE
at store level.
Unlike the conventional COCO/FOFO model operated by retail companies,
TRENT has adopted the FOCO model, where it seeks franchisees to spend on
capex with a potential IRR of 12-15%, but retains control over operations.
The FOCO model requires franchisees to spend ~INR20m toward a Zudio store
and INR50m toward a Westside store.
As the investment from TRENT is merely toward inventory, it is able to generate
very high ROCE. This allows the company to operate on a capex light model as
well as maintain the quality standards in the store.
Further, the rent and electricity payout obligations are with the franchisee.
Therefore, if store productivity suffers, the larger burden is shifted to the
franchisee.
Margin sharing with franchisees
Of the 38% gross margin generated, the franchisee gets 16% margin, while the
franchisor (ZUDIO) retains 22%.
The franchisee bears rent and electricity costs and profits the rest of the margin
i.e. about 4-5%. On the other hand, the franchisor manages the entire
operations, with key expenses like employee, inventory management
(transportation, discount, shrinkage, etc.), housekeeping, security and all day-to-
day expenses.
On net basis, the franchisor retains 5% margin. Since the franchisor’s investment
is merely in the inventory (~INR10m), a 5% margin on healthy annual revenue of
INR120m works out to ~60% store level ROCE.
Exhibit 3: Per store metrics (INR m, unless stated)
Per store Metrics
Size (sq. ft.)
Investment (INR/sq ft.)
Size (in sq. ft. for calculation)
Rent/month/sqft (INR)
Capex (INR m)
Franchisee Fee
Security Deposit (6 month rental)
Stamp Duty and Registration
Consultancy/Brokerage (15 days)
Total Investment (INRm/store)
Westside
Zudio
15k-25k
6k-8k
2300
2000
15000
6000
100
80
34.5
12
1
1
9
2.9
3
2
0.8
0.2
48.3
18.1
Source: MOFSL, Company
Exhibit 4: Margin sharing FOCO Model (as % of MRP)
Product MRP
Total Gross Margin
Franchisee Margin (FOCO)
Franchisor Margin
100%
38%
16%
22%
Source: MOFSL, Company
22 November 2019
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 Motilal Oswal Financial Services
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Exhibit 5: Franchisee income comparison – FOCO v/s FOFO model
Zudio
Revenue
Franchisee Commission
Rent
Electricity
Salary
Others (AMC, License, HK, Security, EDC, Other day to day
Total Expense
Net Franchisee Income
IRR for franchisee (7 years)
FOCO Model
10
1.6 (@ 16%)
1
0.1
NA
0.1
1.2
0.4
12-15%
FOFO Model
10
2.8 (@28%)
1
0.2
0.5
0.5
2.2
0.6
NA
Source: MOFSL, Company
Exhibit 6: Margin sharing in FOCO Model (as % of MRP)
(INR m)
Franchisor Income (Trent) P&L
Stock Inventory
Employment
House Keeping
Security
Advertisement and Promotion
EDC Machine
License and All DTDOA*
Stock (Transport/Shrinkage/Discount
Total Expense
Profit
Net Franchisor Margin
ROCE
*Day to Day operating activity
Monthly Profitability
2.2
10
0.5
0.1
0.1
0.2
0.3
0.2
0.3
1.7
0.5
5%
60%
Source: MOFSL, Company
22 November 2019
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 Motilal Oswal Financial Services
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Financial insights from Zudio store visit
The key strengths of the store are:
Sharp pricing driven by low gross margin of 30% and higher blend of low price poly
viscose v/s cotton.
High turnover, driven by significantly better footfalls and conversion rate v/s other
value fashion stores. This helps in leveraging operating costs better as well as to
garner high inventory turns and better ROCE.
Locations: So far, Zudio is catering to consumers on the outskirts of Tier-1 or Tier-2
cities. Thus, it is present in good catchment locations with low competition and
moderate rentals, which allows it to maintain a lean cost structure and sharp pricing.
Store 1 (6,800 sqft – Opened in Apr’19)
Focus is to drive revenue via
higher conversion of footfalls,
higher units sold per customer
and improved customer service.
Revenue scale:
The store makes ~INR7-8m in monthly revenues and achieved
revenues of ~INR45m in 1HFY20. Management is confident of easily surpassing
FY20 target of INR80m, reaching over INR90m revenue, as the upcoming 2-3
months are seasonally strong on account of the festive season.
Revenue metrics:
Average throughput (revenue/sqft/day) is at INR33, implying
throughput of INR1,000/sqft/month and INR12,000/sqft/year. Monthly footfall
has reduced from 42k in the first month of opening to 29k in the second month,
and is expected to stabilize at around 20k. Store conversion rate stands at ~33%.
Average target conversion stands at 35% for overall Zudio independent stores
and ~20% for stores in malls. Average bill size is INR1,100/customer with 3.2
pieces per store. Store focus is to increase conversion rate and bill size through
higher units sold per customer as well as better inventory management and
improvised customer service.
Revenue trend:
Footfall and sales in Sep-Oct’19 were lower probably due to
online discount sales; however, post the online sale period, higher footfalls are
expected.
Category mix:
Store category mix – women’s wear - 40%, kids wear - 24% and
men’s wear - 36%. The store has the highest kids wear contribution at 24%
across India, else kids wear mix at Zudio store is ~15-20%.
Inventory:
Total store inventory stands at 30k pieces with average selling price
of INR285 and cost price of INR200/piece. 65% of the products are below
INR500 and no product is priced above INR999, thus total store inventory
(below one month) stands at a meager INR6m. There is a minimum 10-15%
store inventory change every week with average churn of 20%, thus ~50% of the
inventory is replenished every month while the entire inventory is replenished
every two months.
Product cost:
Lower product cost at Zudio (compared to Westside) is achieved
through polyester blends with cotton and viscose fabric; which doesn’t result in
low quality fabric (Zudio offers three months’ guarantee on apparels over color
quality and apparel fit).
Operating costs:
Of INR7m monthly revenue and 30-35% gross margin, raw
material expenses would be ~5m, rent is around INR800k, electricity cost is at
INR200k and maintenance cost would be ~INR200k. Therefore, operating profit
would be INR800-1,000k with 11-14% operating margin.
22 November 2019
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Employee cost:
The store has 20 employees (13 floor employees, 2
departmental managers, 1 store manager, 1 security and 2-3 housekeeping
staff). Total employee cost is ~INR400-500k/month.
Aggressive pace of store addition:
Management plans to add Zudio stores
aggressively; target is to reach 150 stores by FY20, 250 stores by FY21 and ~500
stores over the next 3-5 years. Currently, Zudio has 65 stores and many stores
are in the final stages of fit-outs (four stores added in first week of Oct’19).
Exhibit 7: Snapshot of products and interiors of Store 1
Source: MOFSL, Company
Store 2 (6,000 sqft store - Opened in Jan’19)
Savings in marketing and
promotional activities allows
sharp pricing, giving value to
customers.
Revenue scale:
Monthly sales for the store stand at INR9-10m. FY20 revenue
target is INR90m, but the store is expected to touch sales of over INR100-110m
over the same period.
Revenue metrics:
Average throughput stands at ~INR45-47/sqft/day, i.e.
INR1500/sqft/month and INR18,000/year. Average bill size for the store stands
at INR1,500/customer with an average 3.8 pieces per customer.
Franchisee store:
The store runs on franchisee model wherein the franchisee
incurs capex of INR15-20m and earns revenue share (utilized toward payment of
rent, electricity and maintenance costs, while the rest is retained as franchisee’s
profit).
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22 November 2019
 Motilal Oswal Financial Services
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Inventory:
Total store inventory volume stands at 30,000 units with average
selling price below INR400. Thus, store inventory stands at ~INR12m (on selling
price) and ~INR8-9m on cost per month. On an average, ~15-20% of inventory is
churned every week and over 50% of the inventory is churned monthly (thus,
the store has fresh inventory every two months).
Employee costs:
The store has a total of 20 employees, with average salary of
INR20k/month, taking the total employee cost to INR400k/month.
Zudio doesn’t engage is marketing and promotional activities, as it believes in
passing on the cost benefits through sharp pricing, which drives higher footfalls
and word-of-mouth publicity.
Exhibit 8: Snapshot of products and interiors of Store 2
Source: MOFSL, Company
22 November 2019
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 Motilal Oswal Financial Services
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Exhibit 9: Comparative Return Analysis Under All Formats (FY19)
Revenue
EBITDA
EBITDA margin
Dep
EBIT
EBIT Margin
PAT
PAT margin
Capital Employed
Share Capital
Invested Capital
ROCE
ROE
ROIC (post tax)
Standalone
25,317
2,366
9.3%
465
1,902
8%
1,276
5%
20,838
16,968
10,140
9%
8%
13%
Westside
23,407
2,516
10.7%
372
2,144
9%
NA
NA
18,754
NA
8,615
11%
NA
17%
Zudio
3,309
(150)
-9.7%
93
(243)
-7%
NA
NA
1,084
16,968
1,084
NA
NA
-22%
Star
10,825
(812)
-7.5%
331
(1,143)
-11%
(880)
-8%
5,472
5,472
4,856
-21%
-16%
-24%
Zara Investments Consolidated
14,762
363
26,302
2,416
363
2,277
16.4%
NA
8.7%
398
NA
517
2,018
363
1,761
14%
NA
7%
1,402
363
970
10%
NA
4%
5,459
NA
20,632
5,459
5,000
16,465
5,140
5,000
11,262
37%
NA
9%
26%
7%
6%
27%
5%
11%
Source: MOFSL, Company
Exhibit 10: Valuation based on SOTP
Particulars
Standalone
Star
Zara
Total Enterprise Value
Net Debt
Equity Value
Shares (m)
Target Price (INR)
CMP (INR)
Upside (%)
Financial metric
Sept FY21 EBITDA
Sept FY21 Sales
Sept FY21 EBITDA
Multiple (x) EBITDA/Sales (INR b)
30
4.7
1.5
6.8
30
1.6
Value (INR b)
141
10
48
199
-16
215
355
605
504
20%
Source: MOFSL, Company
Exhibit 11: TRENT – 1-year forward P/E band
P/E (x)
Min (x)
140
115
90
65
40
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 12: TRENT – 1-year forward EV/EBITDA band
9.0
7.0
5.0
3.0
1.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
121.4
102.7
88.9
75.1
60.3
7.0
5.0
3.8
2.5
2.3
98.9
6.3
Source: Bloomberg, MOFSL
Source: Bloomberg, MOFSL
22 November 2019
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 Motilal Oswal Financial Services
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Exhibit 13: Westside to see healthy revenue growth…
Westside EBITDA (INR b)
7.3%
Westside EBITDA margin (%)
10.7% 11.2% 11.2% 11.3% 11.4%
2.5%
4.4%
6.4%
Exhibit 14: ….alongside Zara’s improved margins
22%
Zara Revenues (INR b)
18% 19%
13%
9%
14%
11%
13% 13% 13%
EBITDA Margin (%)
0.3
0.5
0.9
1.2
2.1
2.6
3.2
3.9
4.6
2.0
2.8
3.4
8.4
10.1 12.2 14.3 18.3 22.2 26.7
Exhibit 15: Star to see losses subsiding
Star Revenues (INR b)
13%
5%
0%
-5%
7.9
7.5
7.8
8.3
9.4
10.0
11.3
12.8
14.4
6%
6%
YoY growth (%)
13% 13% 13%
Exhibit 16: Zara to add stores at a modest rate
5
1
Zara
4
3
2
2
Zara store adds
2
2
24
2
26
2
28
-
20
8
9
13
16
18
20
22
Exhibit 17: See strong 105 Westside store adds in FY20/FY21
Westside
Westside stores added
35
35
25
18
35
Exhibit 18: Expect healthy 9% SSSG for Westside over FY19-
21
11%
9%
7%
8%
Westside SSSG (%)
9%
9%
9%
11%
9%
9%
3
70
10
5
8
14
80
85
93
107
125
150
185
220
255
Exhibit 19: Consolidated revenue to grow at healthy 29%
CAGR over FY19-22E
Consol. revenues (INR b)
16%
22%
15% 18%
-2%
-30%
21.3 23.3 22.8 15.9 18.3 21.6 26.3 34.4 44.1 56.2
YoY Growth (%)
31% 28% 27%
Exhibit 20: Conso. EBITDA margin post Ind As 116 effect
Consol. revenues (INR b)
EBITDA Margin (%)
16.1% 16.9% 17.2%
9%
-0.6% 0.4%
3.2%
5.8% 6.9%
9.3% 8.7%
21.3 23.3 22.8 15.9 18.3 21.6 26.3 34.4 44.1 56.2
Source: MOFSL, Company
Source: MOFSL, Company
22 November 2019
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 Motilal Oswal Financial Services
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Exhibit 21: Consolidated PAT to witness 61% CAGR over FY19-21
Consol. PAT (INR b)
6%
-1%
-1%
1.3
-0.4
-0.3
-0.2
0.6
0.8
0.9
1.0
1.5
2.7
3%
5%
PAT Margin (%)
4%
4%
4%
6%
-2%
Source: MOFSL, Company
Exhibit 22: Return ratios set to grow (%)
RoE (%)
11.4
7.5
4.1
3.6
3.5
4.5
5.2
5.5
6.0
6.6
RoCE (%)
10.5
6.4
8.8
6.9
8.4
9.3
RoIC (%)
9.4
13.2
12.8
10.5
9.2
Source: MOFSL, Company
22 November 2019
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 Motilal Oswal Financial Services
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Financials and valuations - standalone
Standalone - Income Statement
Y/E March
Total Income from Operations
Change (%)
Raw Materials
Employees Cost
Rent and lease expenses
Advertising & Sales Promotion
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
13,580
9.4
6,810
1,240
1,067
404
3,510
13,031
96.0
549
4.0
398
151
70
745
825
564
1,389
389
28.0
0
1,000
594
26.9
4.4
FY16
14,919
9.9
7,213
1,323
1,874
424
3,158
13,992
93.8
927
6.2
345
582
376
888
1,094
-1
1,093
227
20.8
0
866
866
45.8
5.8
FY17
17,381
16.5
8,275
1,661
2,278
461
3,479
16,154
92.9
1,226
7.1
376
850
337
590
1,103
247
1,350
282
20.9
0
1,069
873
0.8
5.0
FY18
20,663
18.9
9,587
2,026
2,668
398
3,970
18,649
90.3
2,014
9.7
417
1,596
306
426
1,716
0
1,716
549
32.0
0
1,167
1,167
33.7
5.6
FY19
25,317
22.5
12,324
2,524
3,179
0
4,924
22,951
90.7
2,366
9.3
465
1,902
368
363
1,897
-5
1,892
617
32.6
0
1,276
1,254
7.5
5.0
FY20E
33,286
31.5
16,909
3,445
2,263
0
5,059
27,677
83.2
5,609
16.9
2,427
3,182
2,424
1,597
2,355
0
2,355
710
30.1
0
1,645
1,645
31.1
4.9
FY21E
42,909
28.9
21,884
4,377
2,789
0
6,308
35,357
82.4
7,552
17.6
3,007
4,545
2,424
1,597
3,718
0
3,718
936
25.2
0
2,782
2,782
69.2
6.5
(INR m)
FY22E
54,930
28.0
28,289
5,493
3,570
0
7,800
45,153
82.2
9,778
17.8
3,278
6,499
2,424
1,597
5,672
0
5,672
1,428
25.2
0
4,245
4,245
52.5
7.7
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans & Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY15
332
13,899
14,232
2,414
-184
16,461
3,375
462
10,484
5,171
2,504
22
273
2,372
3,030
1,426
1,474
130
2,140
16,461
FY16
332
14,000
14,332
3,958
-86
18,205
4,160
537
10,857
5,190
2,701
20
252
2,217
2,538
1,492
916
131
2,651
18,205
FY17
332
15,076
15,408
3,917
-101
19,225
4,899
55
11,127
5,644
2,983
31
316
2,314
2,500
1,328
1,002
169
3,144
19,225
FY18
332
15,839
16,171
3,914
-28
20,057
5,779
96
10,519
6,721
3,391
131
303
2,896
3,057
1,946
929
182
3,664
20,057
FY19
332
16,636
16,968
3,942
-72
20,838
6,271
850
9,410
9,001
4,894
141
509
3,457
4,696
2,289
2,221
186
4,306
20,838
FY20E
355
27,757
28,113
24,238
-72
52,279
29,328
850
9,410
18,717
6,343
182
8,209
3,982
6,027
2,918
2,923
186
12,690
52,279
FY21E
355
30,540
30,895
24,238
-72
55,061
29,377
850
9,410
22,902
8,060
235
9,952
4,655
7,479
3,527
3,766
186
15,423
55,061
(INR m)
FY22E
355
34,784
35,140
24,238
-72
59,306
29,435
850
9,410
29,131
10,167
301
13,053
5,610
9,521
4,515
4,820
186
19,610
59,306
22 November 2019
11
 Motilal Oswal Financial Services
Trent
Financials and valuations - standalone
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
1.8
3.0
42.8
10.0
332.2
FY16
2.6
3.6
43.1
9.0
345.6
FY17
2.6
3.8
46.4
1.0
31.1
FY18
3.5
4.8
48.7
1.1
32.7
FY19
3.8
5.2
51.1
1.3
40.8
133.8
97.6
9.9
6.8
72.4
0.3
-4.7
4.3
4.0
1.9
2.8
0.8
67
1
38
1.7
2.1
-0.6
6.1
6.7
7.8
2.6
0.8
66
0
37
2.0
1.5
-0.5
5.9
6.1
9.4
2.7
0.9
63
1
28
2.3
2.5
-0.5
7.4
7.0
12.9
3.0
1.0
60
2
34
2.2
5.2
-0.4
7.6
7.4
13.3
3.4
1.2
71
2
33
1.9
5.2
-0.4
FY20E
4.9
12.3
84.6
0.0
0.0
102.0
41.2
6.0
5.5
32.8
0.0
-64.0
7.3
9.1
10.1
1.0
0.6
70
2
32
3.1
1.3
0.2
FY21E
8.4
17.4
93.0
0.0
0.0
60.3
29.0
5.4
4.2
24.1
0.0
7.7
9.4
8.6
9.9
1.2
0.8
69
2
30
3.1
1.9
0.2
FY22E
12.8
22.6
105.7
0.0
0.0
39.5
22.3
4.8
3.3
18.3
0.0
11.8
12.9
10.6
13.7
1.4
0.9
68
2
30
3.1
2.7
0.1
Standalone - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
825
398
-156
48
-185
930
-671
259
-1,117
-858
-399
1,557
41
0
0
-70
-272
-13
-355
-55
329
273
FY16
1,094
345
160
-189
280
1,690
-609
1,081
-1,342
-261
-67
517
-892
745
0
-204
-752
0
-211
-22
274
252
FY17
1,103
376
128
-313
-336
958
-317
642
-675
-33
176
394
-105
-2,000
1,864
-330
-6
0
-472
64
252
316
FY18
1,716
417
87
-491
-668
1,061
-32
1,029
-1,296
-267
881
113
-302
-1,024
1,000
-317
-399
0
-740
-12
316
303
FY19
1,896
465
180
-781
-1,356
404
-122
282
-1,859
-1,577
2,234
-833
-457
0
1,061
-220
-459
0
382
206
303
509
FY20E
2,355
2,427
2,424
-710
-684
5,811
-1,597
4,215
-25,484
-21,269
0
1,597
-23,887
9,500
20,296
-2,424
0
0
27,372
7,700
509
8,209
FY21E
3,718
3,007
2,424
-936
-990
7,223
-1,597
5,626
-3,056
2,570
0
1,597
-1,459
0
0
-2,424
0
0
-2,424
1,743
8,209
9,952
(INR m)
FY22E
5,672
3,278
2,424
-1,428
-1,086
8,860
-1,597
7,263
-3,336
3,927
0
1,597
-1,739
0
0
-2,424
0
0
-2,424
3,101
9,952
13,053
22 November 2019
12
 Motilal Oswal Financial Services
Trent
Standalone Financials – (Pre Ind-As 116 Basis)
(INR Millions)
Total Revenue from operations
YoY growth
Cost of Goods Sold/ Consumed
Employee expenses
Rent and lease expenses
Advertising & Sales Promotion
SG&A and other costs
Total Operating Costs
EBITDA
EBITDA margin
D&A expense
EBIT
EBIT Margin %
Add: Other income
Less: Interest expense
Add: Exceptional items
PBT
Less: Provision for Tax
Tax Rate (%)
PAT
% of sales
YoY (%)
Key Parameters
Operating CF
Total CAPEX
FCF (Free Cash Flow)
ROCE
RoE
FY15
13,580
9.4%
6,810
1,240
1,067
404
3,510
13,031
549
4.0%
398
151
1.1%
745
70
564
1,389
389
28.0%
1,000
7%
84.4%
FY15
930
290
41
4.0%
4.3%
FY16
14,919
9.9%
7,213
1,323
1,874
424
3,158
13,992
927
6.2%
345
582
3.9%
888
376
(1)
1,093
227
20.8%
866
6%
-13.5%
FY16
1690
892
-892
6.7%
6.1%
FY17
17,381
16.5%
8,275
1,661
2,278
461
3,479
16,154
1,226
7.1%
376
850
4.9%
590
337
247
1,350
282
20.9%
1,069
6%
23.5%
FY17
958
624
-105
6.1%
5.9%
FY18
20,663
18.9%
9,587
2,026
2,668
398
3,970
18,649
2,014
9.7%
417
1,596
7.7%
426
306
-
1,716
549
32.0%
1,167
6%
9.2%
FY18
1061
1095
-302
7.0%
7.4%
FY19
25,317
22.5%
12,324
2,524
3,179
0
4,924
22,951
2,366
9.3%
465
1,902
7.5%
363
368
(5)
1,892
617
32.6%
1,276
5%
9.3%
FY19
404
1289
-457
7.4%
7.6%
FY20E
33,286
31.5%
16,909
3,445
5,147
0
5,059
30,561
2,725
8.2%
687
2,037
6.1%
1,597
1,115
-
2,520
760
30.1%
1,760
5%
37.9%
FY20E
1,281
-7,652
8,933
5.7%
6.3%
FY21E
42,909
28.9%
21,884
4,377
6,336
0
6,308
38,905
4,005
9.3%
867
3,138
7.3%
1,597
1,115
-
3,620
911
25.2%
2,709
6%
53.9%
FY21E
2,103
3,056
-953
5.7%
8.8%
FY22E
54,930
28.0%
28,289
5,493
7,934
0
7,800
49,516
5,414
9.9%
1,138
4,276
7.8%
1,597
1,115
-
4,758
1,198
25.2%
3,560
6%
31.4%
FY22E
4,217
3,336
881
7.2%
10.1%
22 November 2019
13
 Motilal Oswal Financial Services
Trent
Financials and valuations - consolidated
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Raw Materials
Employees Cost
Rent and lease expenses
Advertising & Sales Promotion
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
22,843
-2.1
13,290
2,079
1,156
475
5,122
22,121
96.8
722
3.2
743
-21
107
972
843
1,152
1,995
701
35.1
1
1,293
546
-206.9
2.4
FY16
15,893
-30.4
7,956
1,638
1,924
440
3,007
14,966
94.2
928
5.8
386
542
376
573
739
79
818
347
42.4
-79
550
505
-7.5
3.2
FY17
18,339
15.4
9,028
1,925
2,317
481
3,331
17,082
93.1
1,257
6.9
413
844
338
605
1,112
258
1,370
431
31.4
91
849
672
33.0
3.7
FY18
21,575
17.6
10,315
2,305
2,725
418
3,800
19,563
90.7
2,012
9.3
455
1,557
306
442
1,693
0
1,693
596
35.2
227
870
870
29.5
4.0
FY19
26,302
21.9
13,114
2,868
3,165
0
4,878
24,025
91.3
2,277
8.7
517
1,761
368
408
1,801
0
1,802
736
40.9
95
970
970
11.6
3.7
FY20E
34,352
30.6
17,762
3,807
2,248
0
5,010
28,827
83.9
5,525
16.1
2,479
3,046
2,424
1,610
2,232
0
2,232
710
31.8
0
1,522
1,522
56.9
4.4
FY21E
44,062
28.3
22,806
4,769
2,772
0
6,254
36,600
83.1
7,461
16.9
3,059
4,403
2,424
1,608
3,587
0
3,587
936
26.1
0
2,651
2,651
74.1
6.0
(INR m)
FY22E
56,176
27.5
29,286
5,917
3,552
0
7,742
46,496
82.8
9,679
17.2
3,330
6,349
2,424
1,608
5,534
0
5,534
1,428
25.8
0
4,106
4,106
54.9
7.3
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY15
332
13,887
14,220
26
2,669
-21
16,893
9,506
2,822
6,685
0
921
7,397
7,042
3,299
177
555
3,011
5,151
2,213
1,181
1,758
1,890
16,893
FY16
332
14,312
14,644
103
3,998
-26
18,719
6,535
2,024
4,511
261
537
10,670
5,554
2,792
130
269
2,363
2,821
1,662
997
162
2,733
18,719
FY17
332
15,145
15,477
8
3,917
90
19,491
7,492
2,266
5,226
262
55
10,800
5,823
3,054
59
343
2,367
2,673
1,422
1,056
195
3,150
19,491
FY18
332
15,621
15,954
8
3,914
193
20,068
8,341
2,478
5,864
261
96
10,229
6,904
3,448
151
328
2,977
3,286
2,084
997
205
3,618
20,068
FY19
332
16,133
16,465
-29
3,942
255
20,632
9,354
2,994
6,360
261
872
8,828
9,265
4,970
165
542
3,587
4,955
2,450
2,293
212
4,311
20,632
FY20E
355
27,132
27,487
-29
24,238
255
51,951
34,838
5,473
29,365
261
872
8,828
18,923
6,419
206
8,185
4,112
6,299
3,092
2,995
212
12,624
51,951
FY21E
355
29,783
30,139
-29
24,238
255
54,602
37,894
8,532
29,362
261
872
8,828
23,043
8,136
259
9,863
4,786
7,765
3,715
3,838
212
15,278
54,602
(INR m)
FY22E
355
33,889
34,244
-29
24,238
255
58,708
41,230
11,862
29,368
261
872
8,828
29,201
10,243
325
12,892
5,741
9,822
4,718
4,892
212
19,378
58,708
22 November 2019
14
 Motilal Oswal Financial Services
Trent
Financials and valuations - consolidated
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
1.6
3.9
42.8
10.0
257.0
FY16
1.5
2.7
44.1
9.0
543.6
FY17
2.0
3.3
46.6
1.0
39.2
FY18
2.6
4.0
48.0
1.1
43.9
FY19
2.9
4.5
49.5
1.3
53.7
173.0
112.9
10.2
6.5
75.2
0.3
-5.2
4.5
4.1
-0.2
2.4
1.4
53
3
35
1.4
-0.2
-0.4
3.5
3.6
4.1
2.4
0.8
64
3
38
2.0
1.4
-0.5
4.5
5.2
7.5
2.4
0.9
61
1
28
2.2
2.5
-0.5
5.5
6.6
11.4
2.6
1.1
58
3
35
2.1
5.1
-0.4
6.0
6.4
10.5
2.8
1.3
69
2
34
1.9
4.8
-0.3
FY20E
4.6
12.0
82.7
0.0
0.0
110.2
41.9
6.1
5.4
33.3
0.0
-64.2
6.9
8.8
9.3
1.0
0.7
68
2
33
3.0
1.3
0.3
FY21E
8.0
17.2
90.7
0.0
0.0
63.3
29.4
5.6
4.1
24.4
0.0
7.5
9.2
8.4
9.4
1.2
0.8
67
2
31
3.0
1.8
0.2
FY22E
12.4
22.4
103.0
0.0
0.0
40.9
22.6
4.9
3.2
18.5
0.0
11.6
12.8
10.5
13.2
1.4
1.0
67
2
31
3.0
2.6
0.1
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
843
743
-100
-134
-613
740
-841
-101
-1,555
-1,656
-2,177
671
-3,062
3,500
-9
-110
-272
-11
3,099
-64
619
555
FY16
785
387
174
-199
313
1,460
-366
1,094
-1,307
-213
-60
383
-984
840
-4
-213
-756
0
-133
-23
292
269
FY17
1,354
413
128
-384
-244
1,268
-244
1,024
-686
339
146
103
-437
-2,002
1,864
-365
-11
0
-514
74
269
343
FY18
1,467
455
88
-501
-643
866
-98
769
-1,068
-300
928
100
-40
-1,024
1,000
-317
-403
0
-743
-15
343
328
FY19
1,685
517
165
-791
-1,352
223
-14
210
-1,953
-1,743
2,253
-670
-370
0
1,061
-227
-459
0
375
214
328
542
FY20E
2,232
2,479
2,424
-710
-671
5,754
-1,610
4,144
-25,484
-21,340
0
1,610
-23,873
9,500
20,296
-2,424
0
0
27,372
7,643
542
8,185
FY21E
3,587
3,059
2,424
-936
-976
7,158
-1,608
5,549
-3,056
2,493
0
1,608
-1,448
0
0
-2,424
0
0
-2,424
1,678
8,185
9,863
(INR m)
FY22E
5,534
3,330
2,424
-1,428
-1,071
8,789
-1,608
7,181
-3,336
3,845
0
1,608
-1,728
0
0
-2,424
0
0
-2,424
3,029
9,863
12,892
22 November 2019
15
 Motilal Oswal Financial Services
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NOTES
22 November 2019
16
 Motilal Oswal Financial Services
Trent
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
-
-
-
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details of associate entities of Motilal Oswal Financial Services Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First
Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising
from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
"accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be
such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOSL, 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 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, 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 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
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
22 November 2019
17
 Motilal Oswal Financial Services
Trent
-
-
-
-
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.
22 November 2019
18