Sector Update | 23 August 2021

Oil & Gas

Specialty Chemicals
Kindly refer our detailed report Indian Specialty Chemicals to benefit from China+1 strategy
on Specialty Chemicals
 The Indian Specialty Chemicals sector has not benefited from the China+1 strategy,
with none of our coverage companies (DN, NOCIL, VO, GALSURF, NFIL, FINEORG, AACL,
and ATLP) showing any significant rise in exports (as a percentage of revenue) in the
past decade (Exhibit 1).
 On a consolidated basis, while exports from India have risen by ~50% over the past
decade, other countries like Vietnam have shown a significant rise in exports (Exhibit
2). Indian Specialty Companies will stand to benefit only when India takes concrete
steps towards capitalizing this new opportunity.
 The consolidation in Chemical companies still continues in China and is expected to
result in a growing call for alternate suppliers of key chemicals.

China+1: The climax is far away

 Although several initiatives had been taken in China before, the most critical
ones began in CY16, culminating in 80,000 companies being charged with
violation of emission standards in CY17, almost double of that in CY16.
Estimates suggest that almost 40% of China’s total manufacturing capacity was
temporarily shut in CY17, with closures of 2-4 weeks.
 This culminated in the following: a) all toxic MSMEs to relocate to designated
chemical industry parks away from urban areas by CY20-end, b) all larger toxic
plants to relocate by CY25-end, and c) plants must re-engineer to produce non-
toxic products or close permanently if re-engineering/relocation is not possible.
 Several other provinces also have stated goals to close/shift Chemical
companies and industrial parks. It is important to note that it is relatively easy
for larger companies to relocate/re-engineer; cost becomes prohibitive for
MSMEs, which also have restricted availability of capital. A slew of tax measures
have also been levied on various polluting chemicals (Exhibit 3).

India is trying to exploit the opportunity: bright future for Specialty

Chemicals
 As highlighted in our recent sector initiation – Genie is out, India’s exports have
climbed a meager ~50% during the past decade, while a few countries like
Vietnam been able to quadruple their exports in the same period through
aggressive policies.
 Although India started late, under Atmanirbhar Bharat, 13 sectors have been
approved for production linked incentives (PLI) of INR1.97t, which is expected to
result in an incremental USD500b of production over the next five years.
 A slew of petrochemical expansions are also underway by major players like
Indian Oil, Hindustan Petroleum, GAIL, Nayara Energy, Haldia Petrochemicals,
and HMEL, which would drive demand for Chemicals and Specialty Chemicals in
the country.

Swarnendu Bhushan- Research Analyst ([email protected])

Sarfraz Bhimani, CFA ([email protected])
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.
 Oil & Gas

Valuation and recommendations

 Since the past few quarters, the euphoria due to: a) consolidation of polluting
Chemical companies in China, b) COVID-related supply chain disruptions, and c)
supportive margins have led to multiples expanding for the Indian Specialty
Chemical companies. Annexure I suggest that the story of consolidation is not
yet over in China, which may emerge as a strong growth driver for Indian
Specialty Chemical companies.
 Indian companies are progressively increasing the contribution of Specialty
Chemicals in their portfolio. For example, DN is expected to come up with INR7b
of investments in downstream products of phenol. Additionally, Deepak Clean
Tech is expected to be more towards Specialty Chemicals. VO is expected to
commence production of anti-oxidants and downstream of butyl alcohol. The
NOCIL’s management said that some customers are conducting advanced pre-
commercial studies on “certain Specialty Chemicals and high Value Chemicals,”
which may raise the contribution of Specialty Chemicals in their portfolio.
 Companies with higher contribution of Specialty Chemicals in their mix
command higher multiples. We recommend a buy on VO and GALSURF, which
are trading at 42x and 29x FY23 EPS. We value VO and GALSURF at 43x and 33x
Sep’23E EPS and reiterate our Buy rating on the stocks with a TP of INR2,220
and INR3,620, respectively.
 We value DN and NOCIL at 28x and 22x Sep’23E EPS and recommend a Buy with
a TP of INR2,350 and INR340, respectively. DN and NOCIL are currently trading
at 27x and 17x FY23E EPS.

Peer comparison in our coverage universe

EPS (INR) P/E (x) EV/EBITDA (x) ROE (%)
Company TP (INR) (%) Upside Reco
FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E FY21 FY22E FY23E
Alkyl Amines 3,665 -11 Neutral 57.9 59.0 73.7 70.8 69.5 55.6 49.6 49.8 40.2 44.4 33.5 33.1
Atul 10,000 9 Neutral 218.0 258.8 290.0 41.9 35.3 31.5 29.9 24.6 21.9 18.5 18.4 17.7
Deepak Nitrite 2,350 12 Buy 56.9 69.4 78.2 36.9 30.3 26.9 23.7 20.1 17.8 39.6 34.4 29.6
Fine Organic 3,134 11 Neutral 37.5 50.5 78.3 75.5 56.1 36.1 44.2 34.9 23.5 16.8 19.5 25.8
Galaxy Surfact. 3,620 21 Buy 85.2 91.0 103.9 35.0 32.8 28.7 24.0 21.6 18.6 25.5 22.7 21.9
Navin Fluo. Intl. 4,040 8 Neutral 51.2 57.5 95.8 72.9 64.9 39.0 57.6 50.3 29.2 16.5 16.0 22.6
NOCIL 340 40 Buy 5.2 12.1 14.2 46.5 19.9 17.0 32.2 13.5 11.4 7.1 15.1 16.1
Vinati Organics 2,220 20 Buy 26.2 33.6 44.7 70.8 55.1 41.5 55.6 43.5 32.4 19.1 20.6 22.9
Source: Company, MOFSL

23 August 2021 2
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Exhibit 1: Exports, as a percentage of total revenue, for our coverage remains broadly similar in the past decade
Exports (% of total revenue) FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Alkyl Amines 23 22 22 19 20 22 20 21 19 18
Atul 46 50 48 49 50 53 50 50 48 46
Deepak Nitrite 42 41 39 39 40 39 42 32 28 29
Fine Organics NA NA 59 59 54 62 57 55 55 55
Galaxy Surfactants NA 61 63 61 65 64 64 64 65 65
Navin Fluorine 53 39 28 34 43 44 45 46 45 53
NOCIL 38 36 35 30 25 27 26 30 35 35
Vinati 76 76 67 68 67 69 71 73 74 76
Source: Companies, MOFSL

Exhibit 2: Vietnam exports up 4x over the last decade; now on par with India exports
USD b Vietnam India

337

324
323
323
318
302

296

282
290

276
264

261

244

220
220

215

185
177
162
150
132
115
97
72

2012

till July
2010

2011

2013

2014

2015

2016

2017

2018

2019

2020

2021'
Source: Industry, MOFSL

Exhibit 3: Tax on polluting chemicals in China

Pollution medium Major pollutants Tax range
Air  SO2, NO2, CO, HCl, Cl, F, etc. (a total of 44 items)  CNY1.2-12/pollution eq.
 Suspended substances, mercury, cadmium,
Water  CNY1.4-14/pollution eq.
chromium, arsenic, lead, nickel (a total of 61 items)
 Coal stone, mine tailings, slag, ash, hazardous waste,
Solid waste  CNY5-1,000/mt
liquid waste, etc.
Noise  Over one decibel higher than the standard  CNY350-11,200/month
Source: Beroe, MOFSL

23 August 2021 3
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Annexure 1
Exhibit 4: Annexure 1: a) Heilongjiang province will close 14 chemical plants and relocate another five
Company Name Major Products Action Requested Deadline
Haerbin Changsheng Construction Paint Paint Shut 2018.12
Haerbin Swan Aluminium & Silver Al, silve Shut 2018.12
Chinacoal Heilongjiang Haerbin CoalChemical Methanol, gas Shut 2025.12
Mudanjiang Shunda Chemical Calcium carbide, Silicon Shut 2018.12
Mudanjiang Hongli Chemical Oxalate, formic acid Shut 2018.12
Mudanjiang Aihe Fuli Chemical Methanol, urea Shut 2018.12
Mudanjiang Yifeng City Gas Gas 2018.12
Daging Oilfield Kunlun Coating Coating Relocate 2020.12
Daging Wanshunxing Ethyne Ethyne Shut 2019.12
Zhaoyuan Dafeng Furfural Furfural Shut 2018.12
Jixi Heyang Gas Gas Shut 2018.12
Qitaihe Mining Coal Duojing Ethyne Ethyne Shut 2018.12
Qitaihe Wanchang Coking Coke, coal tar Shut 2019.12
Qitaihe Zhaofa Coking Coke, coal tar Shut 2020.12
Anda Hongda Ethyne Ethyne 2018.12
Huachuan Huifeng Wine Alcohol Relocate 2020.12
Kiamusze Heilang Pesticide Pesticide Relocate 2020.12
Kiamusze Longxin Titanium Titanium Relocate 2020.12
Kiamusze Dingxin Dissolved Ethyne Ethyne Relocate 2020.12
Source: Beroe, MOFSL

23 August 2021 4
 Oil & Gas

Exhibit 5: Annexure 1: b) Sichuan province to close nine chemical plants and relocate 37 plants
Company Name Major Products Action Requested Deadline
Chengdu Kaiyi Paint Paint Relocating 2018.12
Chengu Xinju Chemical Ethyne Relocating 2019.12
Sichuan Huachuan Industries Firecrackers Relocating 2019.12
Chengdu Jinhuayan Gas Liquefied petroleum gas Relocating 2019.12
Sichuan Guoguang Agrochemical Pesticides Relocating 2018.12
Sehuan Fine Chemical Research & Design Surfactant, n- ethylmorpholine,ethephon, cyanuric
Relocating 2020.12
Institute acid
Zigong Dacheng Chemical Manufacture Barium chloride, barium hydroxide Relocating 2020.12
Zigong Tianyi Chemical Paint Relocating 2020.12
Ammonia, caustic soda, PCE, calcium
Haohua Honghe Chemical Relocating 2025.12
hydrophosphate
Panzhihua Rongxin Paint Paint Relocating 2020.12
Luzhou Fubang Chemical Hexanediol, hexaarenes acetylenic diols Relocating 2020.12
Naxi Tianyi Fine Chemicals Methylsuccinyl alcohal Relocating 2020.12
Luzhou Ruixin Bio-engineering Ganglioside Relocating 2020.12
Luzhou Dazhou Chemical Adamantane and derivatives Relocating 2020.12
Sichuan Jinlu Resin Caustic soda, PVC Relocating 2025.12
Shifang Zhenjiang Chemical Caustic potash Relocating 2020.12
Shifang Changfeng Chemical Fertilizer Relocating 2020.12
Shifang Postassium Nitrate Factory Potassium nitrate, ammonium chloride Relocating 2020.12
Sichuan Guangyu Chemical Soda ash, ammonia, ammonium Chloride Relocating 2025.12
Sichuan Yungong Chemical Sulfoxide chloride, OB Relocating 2020.12
Dayin Petrochemical Chemicals Relocating 2020.12
Sichuan Xingmao Petrochemical Chemicals Relocating 2020.12
Mabian Jianengjia Phosphorus Chemical Yellow phosphorus Relocating 2023.12
Mbian Wugiong Mining Yellow phosphorus Relocating 2023.12
Sichuan Yibin Weili Chemical Detonator Relocating 2020.12
Yibin Goldworld Chemical co2 Relocating 2020.03
Yibin Hengde Chemical Ethyne Relocating 2018.01
Sichuan Xianyida Agrochemical Pesticides Relocating 2020.02
Dazhou Xinglong Chemical Fertilizer Relocating 2020.12
Sichuan Kexin Chemical Factory Pesticides Relocating 2020.12
Sichuan Chuandong Pesticide Chemical Pesticides Relocating 2020.12
Dazhu Shili Gas 02, argon, CO2, nitrogen, ethyne Relocating 2019.12
Dazhou Zili Gas Compressed gas Relocating 2020.06
Sichuan Zanyu Technology Dodecylbenzenesulfonic acid Relocating 2020.01
Xichang Huiyuan Gas Ethyne, O2, CO2 Relocating 2018.02
Sichuan Xinshengyuan Chemical Caustic soda Relocating 2018.02
Zigong Jinxin Chemical Industries Barium chloride, barium hydroxide Close 2020.12
Zigong Nanfeng Chemical Manufacturing Barium chloride, calcium chloride Close 2020.12
Zigong Kexin Chemical Aids Paint Close
Sichuan Minjiang Chemical Synthetic ammonia Close 2018.12
Sichuan Feilong Chemical Synthetic ammonia, CO2 Close 2018.07
Sichuan Hongtai Bio-chemical Urea, Fertilizer Close 2018.07
Sichuan Chuanlong Chemical synthetic ammonia, ammonium bicarbonate Close 2020.12
Yan'an Yongsheng Ethyne Ethyne Close 2019.12
Mianyang Sanjiang Chemical Formaldehyde Close 2020.12
Shuangliu Jiujiang Naili Resin Shoe material Reengineering 2019.12
Sodium chloride, sodium bicarbonate, potassium
Zigong Honghe Pharmacy Reengineering 2018.12
iodate
Source: Beroe, MOFSL

23 August 2021 5
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Exhibit 6: Annexure 1: c) Hubei to relocate/reengineer 144 chemical plants before 2025 and shut 11 plants
Company Name Major Products Location Action Requested
Wuhan Renhe Coating Coating Wuhan Relocate
Wuhan Xintai Ethyne Gas Ethyne Wuhan Shut/Relocate
Wuhan Steel Beihu Chemical Benzene, solvents, naphthalene Wuhan Change Product
Wuhan Yichang Chemical Coating Coating Wuhan Shut/Relocate
Wuhan Yixing Chemical Painting, Coating Wuhan Shut/Relocate
Wuhan Shiquanxing Decoration Coating Coating Wuhan Shut/Relocate
Wuhan Haiyun Chemical Coating, alkyd/ acrylic resin Wuhan Shut/Relocate
Wuhan Guoqi Dongxihu Branch Painting Wuhan Shut/Relocate
Wuhan Sanke Anticorrossion Technology Painting Wuhan Shut/Relocate
Wuhan Xingguangcai Coating Coating Wuhan Shut/Relocate
Wuhan Caibao Surface New Material Bonderite, antirust agent Wuhan Shut/Relocate
Wuhan Haidetianwn New Material Coating Wuhan Shut/Relocate
Wuhan Feiluhaosheng Coating Coating Wuhan Shut/Relocate
Wuhan Hegui Coating Coating Wuhan Shut/Relocate
Wuhan Shanhu Coating Coating Wuhan Shut/Relocate
Wuhan Jaingxia Paint Painting Wuhan Shut/Relocate
Wuhan Wuchang Electric Chemical Ethyne
Ethyne Wuhan Shut/Relocate
Factory
Wuhan Gelin Coating Coating Wuhan Shut/Relocate
Wuhan Rongda Chemical Coating, Plastic/ rubber products Wuhan Shut/Relocate
Wuhan Huangbei Yousheng Gas Production Oxygen, Co2, Ethyne Wuhan Relocate
Wuhan Tiantai Chemical Stannous/lead/copper/indium/fluoborate Wuhan Relocate
Wuhan Wenjing Electric New Material Insulator Wuhan Relocate
Wuhan wulong Pesticide Pesticide Wuhan Relocate
Wuhan Jiaji Coating Chemical Coating Wuhan Change Product
Wuhan Jiamei Paint Painting Wuhan Change Product
Wuhan Hannan Tongxin Chemical Chloral, guanidine hydrochloride/phosphate,carbonet Wuhan Shut
Yangtze Optical Fibre and cable joint stock
Datasheet Wuhan Change Product
limited
Wuhan Lanjiang Gas Ethyne Wuhan Shut
Ruiyuan Gas Oxygen, nitrogen, argon, ammonia, CO2 Huangshi Relocate
Huangshi Xintai Alkali Sodium sulfide Huangshi Relocate
Yangxin Xingfa Industry Gas Ethyne, oxygen, argon, propane,nitrogen Huangshi Relocate
YangxinChengguang Chemical P2S5 Huangshi Relocate
Yangxing Zhongzhen Chemical P2S5 Huangshi Relocate
Jifeng Industry Gas Ethyne Huangshi Relocate
Yangxin Ruixin Chemical NH,4HCOs, ammonia, methanol Huangshi Change product
Huangshi Taihua Industry Technology
Benzene, toluene, xylene Huangshi Change product
Development
Hubei Danjiangkou Hengkang Oxygen Oxygen, nitrogen Shiyan Relocate
Hubei Dongsheng Danjiang Chemical NH4HCO3, ammonia, methanol, urea Shiyan Shut
Danjiangkou Shenlong Chemical Feo, AICI, yellow phosphorus Shiyan Shut
Shiyan Jinke Chemical Battery acid Shiyan Change product
Hubei Huitian New Material Adhesive Xiangyang Relocate
Xiangyang Xinfu Coating Chemical Coating Xiangyang Relocate
Xiangyang Dongda Chemical Painting Xiangyang Relocate
Hongtai Chemical Ethyne Xiangyang Relocate
Yicheng Xinjian Industry Ethyne, oxygen Xiangyang Relocate
23 August 2021 6
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Company Name Major Products Location Action Requested

m-dichlorobenzene, 3,4- dichlorodiphenyl, Phenylene ether
Zaoyang Zhongcheng Chemical Xiangyang Relocate
ketone benzaldehyde
Zaoyang Gold Deer Chemical Hydrocyanic acid Xiangyang Relocate
Xiangyang Mingman Gas Ethyne Xiangyang Relocate
Hubel New Universal Chemical Solvents, surfactant Xiangyang Relocate
Zaoyang Jiaxin Chemical N/A Xiangyang Relocate
Xiangyang Kexin Technology Paint Xiangyang Relocate
Xiangyang Melting Ethyne Ethyne Xiangyang Relocate
Hubei Weidong Holdings Plastics Xiangyang Relocate
Hubei Handan Mechatronics Anti-riot robot, direct current generator Xiangyang Relocate
Yidou Duobang Chemical Pigment Yichang Relocate
Yidou Youyuan Industry Diphenyl ketone, benzoyl chloride,benzoyl chloride Yichang Relocate
Yidou Jinxin Vanadium Ammonium metavanadate Yichang Relocate
Zhijiang Huawei Zncl2 Zinc chloride Yichang Relocate
Hubei Xiangqin Fertilizer Fertilizer Yichang Relocate
Hubei Shanshui Chemical PVC Yichang Relocate
Hubei Kaiyuan Chemical Technology Manganese chloride, manganese dioxide, hydroquinone Yichang Relocate
Yichang Huaqun Technology Hydrochloric acid Yichang Shut
Zhijiang Liyuan Chemical Chloranil Yichang Relocate
Sinopec Hubei Fertilizer Branch Fertilizer Yichang Relocate
Yichang Dexin Gas O2, Nitrogen, ethyne, H2, argon Yichang Relocate
Hubei Dangyang Anchen Sengong
Rosin, turpentine Yichang Change product
Technology
Dangyang Sencheng Forest Chemical Resin, rosin, turpentine Yichang Change product
Hubei Changyang Tianchang Chemical Potassium chlorate/hyper chlorate, sodium perchlorate Yichang Relocate
Hubei Liushugou Chemical Technology Phosphorous acid Yichang Relocate
Hubei Zhongfu Chemical Industry Group Fertilizer Yichang Relocate
Yichang Saide Chemical Coating, paint Yichang Relocate
Yich Fuxin Paint Chemical Paint Yichang Relocate
Yichang Huangshide Adhesive Adhesive Yichang Change product
Nengte Technology Montelukast intermediate methylphenol Jingzhou Change product
Jingzhou Shuangxiong Chemical Technology H202, peracetic acid Jingzhou Change product
Jingzhou Hualong Gas Oxygen, nitrogen Jingzhou Change product
Hubei Tianhenong Biochemical Engineering Pesticide Jingzhou Change product
Jingzhou Longhua Petrochemical Surfactant Jingzhou Change product
Hubei Tianhenong Biochemical Engineering Jingzhou Change product
Honghu Zhiyuan Industry Gas Oxygen, argon, ethyne Jingzhou Change product
Hubei Sanonda (old factory) Pesticide Jingzhou Relocate
Jingzhou Huagian Chemical Oxygen, nitrogen, CO2, argon, propane, ethyne Jingzhou Relocate
Songzi Jinsong Chemical Flame retardant Jingzhou Relocate
Hubei Qixing Chemical HSO, CaP2H4O8 Jingzhou Relocate
Songzi Lisong Forest Chemical Chip Jingzhou Relocate
Hubei Songchun Chemical Coating Jingzhou Relocate
Gong'an Huanxi Chemical Gas CO2, argon, nitrogen, ethyne, H2,oxygen, LPG, Methane Jingzhou Relocate
Hubei Jingtiandi Chemical Technology Coating, paint Jingzhou Relocate
Jingzhou Xinjing Chemical C5H8O2, propylene ether, epoxy resin Jingzhou Relocate
Hubei Shunfeng Biochemical Technology Plasticizer, acetic acid Jingzhou Relocate
Hubei Changrun New Material Technology Coating, paint Jingzhou Relocate
23 August 2021 7
 Oil & Gas

Company Name Major Products Location Action Requested

Jingzhou Gemei Gas Ethyne, oxygen, nitrogen Jingzhou Relocate
Jingzhou Jinbei Chemical Ethyne Jingzhou Relocate
Jingshan Dongxing Gas Ethyne, oxygen Jingzhou Relocate
Hubei Xiangtai Fibrin Hydroxyethyl! cellulose Jingmen Shut
Zhongxiang No 2 Chemical Pesticide Propane bromide Jingmen Relocate
Hubei Zhongxiang Xiangyi Chemical Bleaching powder Jingmen Relocate
Hubei Jiangshan Chemical Phosphate fertilizer, SO2 Jingmen Relocate
Hubei Wuda Organosilicon New Material Co
Water-proofing additive Erzhou Relocate
Gedian Branch
Hubei Haili Environment Protection
Water treatment additives Erzhou Change product
Technology
Hubei Changhai New Energy Technology Isulator Erzhou Change product
Anlu Huaxin Chemical Phosphorus trichlorid,sulfoxide Chloride Xiaogan Change product
Hubei Longma Chemistry Water-proofing additive Xiaogan Change product
Anlu Xinjing Chemical Vinyl ether Xiaogan Change product
Dawu Jinchu Chemical Paint Xiaogan Shut
Stannic methanesulfonate, stannous fluoborate, copper
Xiaochang Jinji Chemical Xiaogan Relocate
fluoborate, lead methanesulfonate
Yingcheng Jinwei Chemical Hydrochloric acid, caustic soda Xiaogan Relocate
Change
Hubei Limeida Silicon Fluoride Technology Ethyne Suizhou
product/relocate
Hubei Henuo Biology Engineering Nicotine sulfate Enshizhou Relocate
Enshi Jiali Gas Ethyne, nitrogen, argon, CO2 Enshizhou Relocate
Hubei Green House Material Technology Peruol, benzyl alcohol, curing agent, benzoate Enshizhou Relocate
Xiantao Xinda Chemical Inhibitor, germicide, flocculant, foamer Enshizhou Relocate
Hubei Xianlong Chemical Dying intermediate Enshizhou Relocate
Xiantao Maoyuan Chemical Silica sol, sodium silicate, water purification agent, fine chemicals Enshizhou Relocate
Xiantao Yongfa Gas Oxygen Enshizhou Relocate
Xiantao Weixun Chemical Fine chemicals Enshizhou Relocate
Xiantao Jintao Chemical Viscose Enshizhou Relocate
Hubei Xianshen Technology Drug intermediates Enshizhou Relocate
Tianmen Sipulin Plant Protection Pesticide Tianmen Relocate
Jianghan Oilfield Weiming Chemical Co Coating, resin Qianjiang Change prodt
Qianjiang Guangxing Gas Ethyne Qianjiang Change prodt
Shenlongjia Wuchan Mine Co Yangri
Phosphate ore Shennongjia Shut
Chemical Plant
Shenlongjia Fengyuan Phosphor Chemical Yellow phosphorus Shennongjia Shut
Source: Beroe, MOFSL

23 August 2021 8
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Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >=15%
SELL < - 10%
NEUTRAL < - 10 % to 15%
UNDER REVIEW Rating may undergo a change
NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
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In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************

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 Oil & Gas

The associates of MOFSL may have:

- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: [email protected], Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.

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