Market snapshot Today’s top research...

17 April 2020

Investors are advised to refer through important disclosures made at the last page of the Research Report Motilal Oswal research is available on wwwmotilaloswalcomInstitutional-Equities Bloomberg Thomson Reuters Factset and SampP Capital

Research Team (GautamDuggadMotilalOswalcom)

Equities - India Close Chg CYTD

Sensex 30603 07 -258

Nifty-50 8993 08 -261

Nifty-M 100 12760 18 -254

Equities-Global Close Chg CYTD

SampP 500 2800 06 -133

Nasdaq 8532 17 -49

FTSE 100 5628 05 -254

DAX 10302 02 -222

Hang Seng 9673 -05 -134

Nikkei 225 19290 -13 -185

Commodities Close Chg CYTD

Brent (US$Bbl) 23 50 -650

Gold ($OZ) 1718 00 132

Cu (US$MT) 5118 07 -168

Almn (US$MT) 1475 04 -172

Currency Close Chg CYTD

USDINR 768 05 76

USDEUR 11 -06 -33

USDJPY 1079 04 -06

YIELD () Close 1MChg CYTDchg

10 Yrs G-Sec 64 002 -01

10 Yrs AAA Corp 78 025 01

Flows (USD b) 16-Apr MTD CYTD

FIIs -038 -004 -626

DIIs 017 -017 981

Volumes (INRb) 16-Apr MTD CYTD

Cash 522 518 448

FampO 19556 11369 14889

Note Average

Todayrsquos top research idea Market snapshot

Chart of the Day EcoScope (Indiarsquos reported fiscal deficit could top 12 of GDP in FY21)

EcoScope Indiarsquos reported fiscal deficit could top 12 of GDP in FY21

So far India is one among the least compared with the support pledged by

other major economies Our estimates suggest that even if there is no

stimulus package Indiarsquos reported fiscal deficit target would slip by almost

2 of GDP this year to ~56 of GDP due to lower taxes GDP and the

welfare package

However we strongly believe the government could introduce an fiscal

stimulus package to support vulnerable working classes MSMEs and the

worst-affected industries all amounting to ~2 of GDP which would have to

be funded by the RBI

The centrersquos fiscal deficit could therefore stand at ~76 of GDP Moreover

states fiscal deficit could reach up to 44 of GDP from 27 targeted in

FY21

This implies the combined fiscal deficit could be ~12 of GDP (INR25t) in

FY21 highest in at least the past five decades

CosSector Key Highlights

EcoScope Indiarsquos reported fiscal deficit could top 12 of GDP in FY21

TCS Impressive deal wins despite COVID-19 headwinds

Media Lockdown a blessing in disguise

Expert Speak

HEALTHCARE USFDArsquos recent action on product approval site clearance is case-specific

OIL amp GAS Demand destruction gt production cuts

FINANCIALS Impact of lockdown due to COVID-19 on MSME segment

Sensitivity analysis suggests combined fiscal deficit would stand at 11ndash14 of GDP in FY21

INR trillion unless mentioned otherwise

FY19P FY20E FY21E

Old est

FY21F (Nominal GDP growth)

-5 -2 0 2 5

Total receipts 167 177 192 158 162 165 167 171

Gross taxes 208 202 226 184 190 194 198 204

Net taxes 132 140 147 120 124 126 129 133

Government spending 231 263 271 282 282 282 282 282

Centers fiscal deficit 65 86 79 162 159 157 156 153

Centers deficit ( of GDP) 34 43 35 85 81 78 76 73

States fiscal deficit 48 62 61 100 96 94 91 87

States deficit ( of GDP) 25 31 27 52 49 47 44 41

Combined fiscal deficit 112 148 140 262 256 251 247 241

Combined fiscal deficit ( of GDP) 59 74 63 137 130 125 121 114

Nominal GDP 1897 2010 2244 1910 1970 2010 2050 2110

Including new economic stimulus worth ~2 of GDP announced by the center Source RBI MOFSL

Research covered

17 April 2020 2

Liquidity boost Government considers tax refunds to large firms The government is likely to provide income tax and GST refunds to large companies to ensure additional liquidity during the Covid-19 crisis induced lockdown

Rupee falls to all-time low against US dollar inches closer to 77 per USD A broad strength in the US dollar pushed Indian rupee today to record lows against the greenback today After opening at 7674 the rupee fell to a new low of 7687 breaching last weeks low of 7655 per US dollar The rupee also closed near all-time lows at 7686 per US dollar In comparison the rupee had settled at 7644 in the previous sessionhellip

Banks set to seek NPA relaxation guarantees from RBI Staring at a double blow of rising delinquences and falling loan demand banks are all set to request the Reserve Bank of India (RBI) for extraordinary relaxations in accounting of non performing assets (NPAs) and could also ask government gaurantees for loans to small and medium enterprises (SMEs)hellip

TCS not to lay off employees freezes salary hikes Largest Indian software exporter TCS on Thursday said it will not retrench any of its nearly 45 lakh employees but has decided not to give any salary hikes this yearhellip

Mutual funds likely to get Sebi lifeline to tide over liquidity woes The Securities and Exchange Board of India (Sebi) is likely to throw a lifeline to the Rs 25-trillion mutual fund (MF) industry to tide over the current liquidity crisis triggered by inactivity in the bond market and a surge in redemption requestshellip

Steel industry struggles as blast furnaces begin shutting down The steel industry is reeling under the side-effects of an extended national lockdown and a near complete disappearance of demand Blast furnaces and the molten steel they produce - that enduring image of industry - are slowly being shut down across the countryhellip

Govt waives off four months rent for IT units operating out of software tech parks In what will come as a huge relief to IT and ITeS companies operating out of Software Technology Parks of India the government on Thursday has decided to waive off the rent being paid by these units till June -- that is for a period of four monthshellip

Kindly click on textbox for the detailed news link

In the news today

2

5

6 7

4

1

3

17 April 2020 3

16 April 2020

ECOSCOPE The Economy Observer

Indiarsquos reported fiscal deficit could top 12 of GDP in FY21 RBI purchases may amount to 25ndash3 of GDP

After Japan declared an economic stimulus package worth ~20 of its GDP to combat the impact of the COVID-19 crisis

the US Federal Reserve announced last week that it would pump an additional US$23t to support its economy With

every such piece of news pressure on the Indian government to jump on the wagon increases sharply Thus far the

Reserve Bank of India (RBI) has done the heavy lifting but the fiscal support extended has amounted to just ~09 of

GDP among the least compared with the support pledged by the worldrsquos other major economies

Our estimates suggest that even if the government does not announce any additional stimulus package Indiarsquos

reported fiscal deficit target would slip by almost 2 percentage points of GDP this year (to ~56 of GDP from the target

of 35) on account of lower taxes lower denominator (GDP) and the welfare package partly offset by windfall gains

from lower crude oil prices (and an expected hike in excise duty)

However as discussed in an earlier report we strongly believe the government could introduce an economic fiscal

stimulus package to support vulnerable working classes MSMEs and the worst-affected industries We estimate a

package amounting to ~2 of GDP which would have to be funded by the RBI by subscribing to one-off non-renewable

COVID-19 support bonds

The centerrsquos fiscal deficit could therefore stand at ~76 of GDP the widest since liberalization Moreover while states

have budgeted for a fiscal deficit of 27 for FY21 the figure is likely to be ~44 of GDP This implies the combined

fiscal deficit could be ~12 of GDP (INR25t) in FY21 the highest in at least the past five decades since the time that this

data has been available and higher than the previous peak of 96 of GDP in FY02 A sensitivity analysis of fiscal

receipts vis-agrave-vis GDP growth confirms a combined fiscal deficit of 11ndash14 of GDP in FY21

This suggests that if the authorities wish to keep bond yields under check the RBIrsquos purchase of government securities

would have to be much higher Considering that foreign capital inflows remain weak in our view the RBI may

eventually resort to buying gilts worth INR5ndash6t (or 25ndash3 of GDP) this year

Indiarsquos fiscal support package too small against packages of several global nations

In light of the disruption caused by the COVID-19 lockdown many of the worldrsquos

major economies have announced large fiscal support for their countries Early this

week Japan announced a fiscal stimulus package worth ~20 of its GDP (refer to

Exhibit 1 on the following page and Appendix I at the end of the report) With every

such piece of news pressure on the Indian government to jump on the wagon

increases sharply Thus far India has declared a welfare package and announced

compliance-related relaxations for businesses worth INR185t (or 09 of GDP)

among the least compared with the support pledged by the worldrsquos other major

economies

Monetary easing in line with that of global counterparts Nevertheless the RBIrsquos

measures to support borrowers and lenders during this difficult phase have been in

line with those of its global counterparts (refer to Appendix II for details on the

monetary easing announced by select nations) The RBI has provided a three-month

moratorium to all borrowers effectively cut policy rates by 115 bps (reverse repo

rate has been reduced to 4 from 515) extended the marginal standing facility

and reduced the cash reserve ratio among many other measures The only major

difference vis-agrave-vis the most active central banks is the absence of outright purchase

of government securities or non-gilt papers

India has declared a welfare package and

announced compliance-related relaxations for

businesses worth INR185t

17 April 2020 4

Estimate change TP change Rating change

Bloomberg TCS IN

Equity Shares (m) 3941

MCap(INRb)(USDb) 64376 848

52-Week Range (INR) 2286 1504

1 6 12 Rel Per () 453

12M Avg Val (INR M) 6961

Free float () 280

Financials amp Valuations (INR b)

YE Mar 2020 2021E 2022E

Sales 1569 1559 1716

EBIT Margin () 246 234 255

PAT 323 309 367

EPS (INR) 862 823 978

EPS Gr () 37 (45) 188

BVSh (INR) 230 267 315

Ratios

RoE () 364 331 336

RoCE () 310 272 283

Payout () 991 547 514

Valuations

PE (x) 199 208 175

PBV (x) 75 64 55

EVEBITDA (x) 145 148 121

Div Yield () 43 22 25

Shareholding pattern ()

As On Dec-19 Sep-19 Dec-18

Promoter 721 721 721

DII 81 83 77

FII 159 155 158

Others 40 42 44

FII Includes depository receipts

CMP INR1716 TP INR1900 (+11) Neutral

Impressive deal wins despite COVID-19 headwinds But near-term could be challenging TCSrsquo deal win TCV of USD89b (+44 YoY ex-Phoenix deal) despite the

COVID-19 shock during 4QFY20 was impressive In addition no slippages on

SLAstimelines in fixed price projects bears testimony to its adaptability and

superior delivery capabilities The pandemic is expected to pose continued

near-term challenges on demand supply pricing and working capital fronts

Nevertheless we expect TCS to be relatively better positioned (vs the

sector) to navigate these challenges given its unparalleled execution abilities

and strong client relationships

We downgrade our EPS estimates by ~5 for FY21FY22E as we relook our

growth estimates and rebase our currency assumptions While we continue

to be positive on the company we remain Neutral given the current volatile

environment weak outlook and rich multiples (~21x FY21E EPS)

Revenue miss Margins largely in line In 4QFY20 revenue (USD) EBIT (INR)PAT increased 15-1 YoY (vs

our estimates of 34-2 YoY) For FY20 revenue (USD) EBIT (INR)

PAT grew by 532 YoY respectively

Barring Europe other geographies reported sequential revenue decline (CC)

BFSI saw sharp revenue decline (~48 QoQ USD) we understand this is

due to difficulty in securing approvals for work from home (WFM)

Life Sciences and Healthcare (+33 QoQ USD) Technology and Services

(+09 QoQ USD) and Communications (+02 QoQ USD) remained outliers

to the broader trend of revenue decline

Revenue decline and utilization drop were the key margin headwinds

Despite an expected stretch on working capital cycle the company

increased its pay-out ratio to ~116 of FY20 earnings (vs 87 in FY19)

Expect near-term challenges on multiple fronts The company has indicated that supply-side issues amounted to roughly

two-thirds of the COVID-19 impact during 4QFY20 However management

expects these issues to be largely resolved in the first 15-20 days of Junrsquo20

TCS also expressed confidence in its ability to virtualize end-to-end

processes (like onboarding etc) to facilitate ramp-up of new deal wins

On a sequential basis management expects revenue to plunge in Junrsquo20

similar to the peak impact felt during GFC We build in 6 QoQ (CC) decline

for the quarter (1QFY21)

Subsequently management expects a pick-up in revenue to reach Decrsquo19rsquos

run-rate by Decrsquo20 We believe that this expectation is ambitious and may

be susceptible to the risk of downgrades subsequently

Company has called out the trend of requests for price discounts in the near

term However it sees several margin levers besides INR depreciation

16 April 2020

4QFY20 Results Update | Sector Technology

TCS

17 April 2020 5

While the long-term aspirational EBIT margin remains at 26-28 the company

foresees challenges in the near term

Exit EBIT margin rate of 25 is anticipated by Marrsquo21

Current capital return policy (80-100 of FCF) is reiterated

As of now TCS does not foresee any major threat to the eventual collection of

receivables However in the near term the company expects some customers

to request extension of payment terms

The company has re-iterated its focus on people value chain and indicated that

it has no plans of employee lay-offs in order to cut costs

It has also indicated that all offers made to lateralsfresh graduates so far will be

honored However further hiring activity will be frozen until the time the

COVID-19 uncertainty is behind

Valuation and view ndash Multiples lofty given the current environment

TCS has a historical track record of adapting to multiple business challenges and

technology change cycles

In addition it has consistently maintained its market leadership best-in-class

operational metrics and high return ratios

The COVID-19 pandemic is expected to pose continued near-term challenges on

demand supply pricing and working capital fronts

Nevertheless we expect the company to be relatively better positioned (vs the

sector) to navigate these challenges

The stock is currently trading at 21x FY21E EPS on our revised estimates

While we continue to be positive on the company we remain Neutral given the

current volatile environment weak outlook and rich multiples

Quarterly Performance (IFRS)

(INR B)

YE March FY19 FY20 FY19 FY20 Est Var

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QFY20 ( bp)

IT Services Revenue (USD m) 5051 5215 5250 5397 5485 5517 5586 5444 20913 22032 5566 -22

QoQ () 16 32 07 28 16 06 13 -25 96 54 -04 -218bp

Overall Revenue (INR b) 343 369 373 380 382 390 399 399 1465 1569 401 -03

QoQ () 68 76 13 18 04 21 23 02 06 -32bp

YoY () 158 207 208 185 114 58 67 51 190 72 54 -34bp

GPM () 414 425 418 418 405 408 414 420 419 412 406 143bp

SGA () 163 160 162 167 163 168 163 169 163 166 159 100bp

EBITDA 91 103 101 101 100 102 109 110 395 421 107 27

EBITDA Margin () 265 279 270 265 263 262 273 275 270 268 267 81bp

EBIT Margin () 250 265 256 251 242 240 250 251 256 246 247 43bp

Other income 12 6 11 12 14 12 6 5 43 37 6 -133

ETR () 248 235 242 238 234 235 230 230 240 232 235 -49bp

PAT 73 79 81 82 81 80 81 80 317 323 80 08

QoQ () 63 76 26 06 -03 -11 09 -08 -16 76bp

YoY () 235 226 241 181 108 18 02 -13 226 22 -20 76bp

EPS (INR) 192 206 216 217 217 214 216 215 831 862 213 08

E MOFSL Estimates

17 April 2020 6

Lockdown a blessing in disguise Newsmovies see disproportionate gains

The COVID-19 outbreak has led to a nation-wide lockdown and hampered economic

growth however the broadcasting industry has been witnessing a huge uptick in TV

viewership In this report we discuss viewership growth of broadcasters and factors

driving it FCT trend smartphone usage benefit to news channels and OTT and impact on

our coverage universe

The lockdown has positively impacted TV viewership in week-13 (starting 28th Marrsquo20)

According to a Broadcast Audience Research Council (BARC) report viewership is up a

significant 43 since the pre COVID-19 period

News sports and movie genres have seen majority increase in viewership while GEC

given the lack of new content have seen limited gains

Amongst advertisers spends are not broad-based Only specific categories like the

government FMCG companies and Ecommerce players are spending on

advertisements

The time spent on smartphones has also increased with proportionate increase for

video streaming platform (VOD) original content and movies have seen

disproportionate gains

Listed players like Zee TV which are focused on GEC have seen limited gains while

Sun TV has seen improvement in market share

Viewership grows across segments

Due to the nation-wide lockdown TV viewership in India has increased by 43 (vs

the pre COVID-19 period) owing to a higher number of channels and rise in average

daily time spent watching (up 27) This is seen across regions (HindiSouth

markets) and across age groups (especially children and middle-aged consumers)

Viewership is no more restricted to prime time as non-prime time slots too have

clocked 81 growth In week-13 across languages viewership growth of

newsmoviessports channels have spurted 2517735 while for GEC it was a

limited 9

FCT growth primarily in news and sports channels During such economic uncertainty when nation-wide activities have halted free

commercial time (FCT) has recorded overall growth of 9 in week-13 mainly led by

newssports channel GEC has seen limited growth of a mere 2 which is in line

with viewership trends This growth has been led by increase in social ads by the

governmentNGOs to promote COVID-19 awareness and certain FMCG categories

that come under essentials (note that ads for toiletries have grown a massive 190x)

Sector Update | 16 April 2020

Media

Non-prime time clocks higher consumption growth ()

All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6

Ramayanrsquos viewership reached 546m in Week-13

Movies and news clocking growth in Week-13 over pre COVID-19 period

17 April 2020 7

Increase in smartphone usage drives VOD Smartphone usage has increased in mid-teens with VOD seeing corresponding

benefits Increased OTT consumption toward lsquoOriginalrsquo series and movies has seen

disproportionate growth while lsquoNon-Originalrsquo series and sports have seen a decline

(due to no new live events) Smartphones have also seen increased use of news

apps in line with TV viewership

Limited benefit to Zee TV Sun TV sees market share gains GEC witnessed a mere 2 increase in ad volumes Zee TVrsquos viewership in Hindi GEC

along with its market share has declined highlighting DD Nationalrsquos gain with the

return of lsquoOld Classicsrsquo However this trend could change post-lockdown Sun TV has

also been able to grow its market share with the return of lsquoOld Classicsrsquo its Tamil

region has garnered ~50 market share in week-13

17 April 2020 8

16 April 2020 Healthcare

Expert Speak

USFDArsquos recent action on product approval site clearance is case-specific Logistics at ports a key hurdle for raw material suppliers

In light of the current COVID-19 crisis we hosted a discussion with Dr Amit Rajan Director

Celogen Lifesciences and Technologies to better understand the current supply situation at

Indian pharma companies and the regulatory process affecting them especially the USFDA

APIRaw material supply from China has resumed in India However congestion at ports

due to the lockdown is making supply inaccessible in the near term

The recent clearance was expected from a compliance perspective but this does not

imply that Indian pharma companies have blanket clearance for the same Abbreviated

new drug application (ANDA) approvals are being given at a faster pace specifically for

products recommended for treating the symptoms of COVID-19 such as

hydroxychloroquine (HCQS) andor for respiratory diseases morbidity conditions

Indian companies would have to enhance efforts to improve compliance specifically in

setting up sterile injectables plants to receive faster ANDA approvals and subsequently

have a better business outlook

Comment on API supply from China Supply from China is not a cause for concern as we were receiving supply from Wuhan

even at the peak of the outbreak as its manufacturers had inventory We have some

pending orders for intermediates and antibiotics such as azithromycin that we are yet

to receive supply for The major concern is the congestion at the ports In some cases a

considerable amount of raw material is lying at the ports and is yet to be transported to

the respective plants

Outlook on forthcoming inspection and ANDA approvals

All USFDA travel to developing countries and facilities inspections including those in India have been pushed to 1Q

of next year US facilities can still be inspected as total lockdown has not been implemented Inspections at sterile

injectables plants are likely to be deferred as these are not the current priority for the US Approvals for some of

the products for respiratory diseases morbidity conditions are already being expedited

Comment on regulatory issues other than data integrity

Apart from data integrity the USFDA continues to adopt a stringent approach to regulatory issues related to sterile

injectables Most of the oral solids products do not face manufacturing issues or pose harm to US citizens at large

However compliance requirements would pertain more to conducting a root cause analysis of deviations if any It

would be prudent for companies to maintain compliance for existing products as well as the USFDA may choose to

inspect the plant at any time once the situation normalizes and recalling the products then would prove very

costly

Status on API prices over near-to-medium term

Specialty product APIs can sustain high prices for an extended time Price contracts are generally in place and there

is limited scope for API price hikes in this category The preference is to build long-term relations rather than

exploiting the short-term situation of higher prices

Repercussions of ranitidine being pulled out of US market

The bigger concern currently is that the USFDA could file a litigation against some companies that hid the NDMA

contamination issue from the administration There are two main concerns a) the presence of more than the

permissible level of NDMA in ranitidine and 2) the NDMA content even if permissible at the time of manufacturing

of ranitidine increasing with time in the finished product However the USFDArsquos actions are not likely to affect the

Dr Amit Rajan Director Celogen Lifesciences and

Technologies

Dr Rajan has 19 yearsrsquo experience in the

Pharmaceutical industry primarily in the

Regulatory Affairs amp Quality Assurance domain He has

worked with various Indian and multinational

companies and headed the Corporate Regulatory and RampD

departments He is the founder of Celogen

Lifesciences amp Technologies with a focus on product

development and dossiers for the regulated markets

17 April 2020 9

off-take of ranitidine in the Indian market Most of the doctors who have stopped prescribing ranitidine in India are

newer doctors who have returned from other countries

Advantage to India by allowing export of HCQS to US

It is relevant to note that the USFDA has not cleared Ipcarsquos plant but merely allowed the export of HCQS to the US

This would help considerably in building relations at the national level One of the benefits of allowing the export of

HCQS to the US could be the out-licensing opportunity from Gilead Sciences if its drug remdesivir gets the USFDArsquos

approval as a cure for COVID-19

Regulatory compliance levels at Indian injectables plants

There are three types of injectables a) antibiotics b) injectables with low intervention such as powders and 3)

injectables with high intervention such as vials Indian companies do not face any difficulties in getting antibiotic

injectables approved as they pose minimal danger to patients and the process itself ensures contaminants do not

get into the product There are concerns with approving injectables that require higher human intervention such

as dry powders and vials as the safety requirements are more stringent than those for oral solids Hygiene

practices particularly with contract employees remain a major challenge for Indian companies It is not possible to

train contract employees about hygiene practices for injectables in a short time This is also reflected in the fact

that most biologics are injectables and Indian companies find it difficult to get even a pre-approval inspection for

biologics units For instance Samsungrsquos biopharma plant in South Korea is run by AmericansEuropeans with better

hygiene practices

Indian companies could stick to producing injectable antibiotics but the pipeline for these is also dry without much

research going into developing new products thus limiting the addressable market

Impact of disruptions on ancillary plants and contract manufacturing activities

Earlier Chinese companies held a considerable share in the contract manufacturing business despite the belief

that Indian pharma companies were technologically more advanced Post the COVID-19 crisis Indian companies

with USFDA approval for their facilities could get contract development and manufacturing organization (CDMO)

opportunities

Benefit in having USFDA approval for siteproduct

104 countries allow drug imports from facilities approved by the USFDA The administration does not typically run

frequent post-approval inspections if exports from the plant in consideration to the US are not material enough A

prudent strategy for smaller companies could be to get the USFDArsquos approval for the site and then export to these

104 countries that allow imports based on the USFDA approval status without actually exporting to the US The

decision to export to the US could be risky as the USFDA would likely inspect the facility once exports from the site

to the US become sizeable Any adverse action by the country would not only hamper sales from the US but also

the other 104 countries

Implication of VAI classification by USFDA

The Voluntary Action Indicated (VAI) status for plants poses a higher risk than the Official Action Indicated (OAI)

status as the USFDA could do a re-inspection without prior intimation If a plant receives the OAI status during the

re-inspection it turns out expensive for companies to recall their products from the market To avoid this

companies typically stop supplying to the US once they receive the VAI status from the USFDA

17 April 2020 10

Potential threat if any from plantscompanies in countries such as Bangladesh and some eastern European countries

Companies in Bangladesh do not have the capabilities to get products approved in the US Eastern European

countries are mostly involved in the CDMO side of the business Eastern European companies could be bought out

by Indian companies with just one-fourth of the money being spent on upgrading facilities

Any Indian companies that hold promise in the injectables business

Gland Pharma a CDMO company that undertakes contract manufacturing and Piramal Healthcarersquos US facilities

have done well in the injectables space

17 April 2020 11

16 April 2020 Oil amp Gas

Expert Speak

Demand destruction gt production cuts

The collapse in global fuel demand due to the spread of COVID-19 worldwide has led to a plunge in crude oil prices Against this backdrop we hosted a discussion with SampP Global Platts to understand its outlook on these disruptions and their impact Here are the key highlights

Record level of production cuts failhellip OPEC++ (US Canada Brazil China Norway and others) may cut another

~10mnbopd However these are potential involuntary cuts production decline

would largely be due to the closure of fields (already being witnessed in Brazil and

Canada)

While production cuts in the US are against the law it would be impossible for US

producers (with high breakeven of USD48ndash54bbl) to sustain at current oil prices

thus the rig count is decreasing sharply with operators having cut capex by ~30

to USD32b for 2020

Deep contango in oil prices led by demand destruction is driving storage demand

Storage tanks are filling fast and expected to run out of capacity over MayndashJune

India which has just ~40mn bbls of strategic storage capacity is running gt50 full

and thus the country could benefit very little from lower oil prices

Platts estimates Brent prices at USD20bbl in 2QCY20 and ~USD40bbl toward the

end of the year led by some demand revival in the latter part of the year

Shale oil production is expected to fall 600kbopd by the end of CY20 and

16mnbopd by the end of CY21 Nigeria and Iraq have always shown poor

compliance Saudi Arabia would mostly comply while Russia remains a wild card

in the pack

hellipdue to unprecedented demand destruction Despite the recent historic production cut announcement by OPEC+ the global crude oil market is not excited

about the same as demand destruction is higher

Around 187 countries are in lockdown currently and economies have come to a complete halt with various

countries extending the lockdowns

Platts estimates demand destruction of 14mnbopd in 2QCY20 and 45mnbopd in 2020

The International Energy Agency (IEA) on the other hand expects demand destruction to be more severe with

~25mnbopd demand lost in AprilndashMayrsquo20 and ~9mnbopd in 2020

India saw an oil demand contraction of ~18 in March Platts estimates Indiarsquos oil demand to contract ~400kbpd

in 2QCY20 and ~110kbpd for the full-year 2020 Crude runs for Indian refiners are expected to fall 14mnbopd in

2020

Although China has witnessed a boost in refinery rates as it comes out of lockdown with the Aprrsquo20 utilization

rate at ~90 of that of Janrsquo20 Road traffic has also improved ~22 YoY

Suffering in the refining cracks Refining cracks are in the doldrums with Gasoline and ATF suffering the most

According to the Association of Asia Pacific Airlines (AAPA) the number of operational flights has fallen by 93

from normal levels which also abetted the plunge in ATF cracks ~79 since the start of 2020

Petrol cracks have been worsening with the lockdown further weighed by the tightening of imports to Indonesia

(the largest importer of petrol in the region)

Marine fuel which was able to hold strong until now is also showing signs of weakness with inventory storage

currently at ~10mmt for Low Sulphur FO in Singapore

Globally current refining downtime including plannedunplanned shutdowns is expected at ~176mnbopd

weighed by the lack of employee availability and demand

Ms Mriganka Jaipuriyar

(Head of News APAC at SampP Global Platts)

Ms Mriganka Jaipuriyar heads

the APAC news at SampP Global

Platts She is responsible for

directing and overseeing all oil

news content created for the

two regions She has been with

SampP Global Platts for over 16

years She has completed her

MSc Economics and

Postgraduate Diploma in

Economics from the London

School of Economics and

Political Science (LSE)

17 April 2020 12

16 April 2020 Financials

Expert Speak

Impact of lockdown due to COVID-19 on MSME segment MSMEs facing acute businessliquidity risk Adequate handholding must to ensure recovery

We interacted with Mr K E Raghunathan the past National President of All India

Manufacturersrsquo Organization (AIMO) and an MSME owner for the past 35 years to discuss the

impact on the MSME segment arising from the nation-wide lockdown due to the COVID-19

outbreak Key takeaways highlighted below

MSMEs facing grave challenges real test of entrepreneurial spirit

MSMEs have been impacted at several levels due to the COVID-19 pandemic Post

Aprrsquo20 we do not expect much improvement in the business environment as the

lockdown would continue in COVID-19 affected areas Besides availability issues of

migrant workers raw material supply disruption cash flow constraints working

capital interest issues transfer of goods etc are also problems that MSMEs are

facing currently

According to a survey conducted on 6th Aprrsquo20 for MSMEs (includes small and

medium service providers) ~71 of MSMEs have been unable to disburse Marrsquo20

salaries to their employees while 40 of MSMEs have let go 30 of their

workforce

MSMEs in Automotive Textiles Real Estate Construction and Tourism segments

should witness a sharp drop in business activity On the other hand Pharma and

Medical Equipment manufacturers are still operational despite raw material

challenges Further Dairy Fertilizers and Agri Food Products should see less impact

The demand for Auto Ancillaries is also likely to collapse as demand for Autos decline Further Textile business

has also been under pressure due to delay in GST refunds on input tax credit

After the lockdown is lifted ~3-5 weeks would be required to understand the damage and another ~2-3 months

to reorganize the business

We expect consolidation in the sector with mergers and acquisitions Also adopting new ways of doing business

would be the key for survival

While ~60 of Marrsquo20 dues are yet to come in we believe that most MSMEs are not in a position to honor their

payment commitments

As the lockdown in India continues until 3rd Mayrsquo20 then without any government aid ~40-45 MSMEs could

face closure However if the lockdown is extended for 8 weeks then ~60 MSMEs could face closure

Migrant labor will take some time to return to work one cannot be sure if they will join the same place or move

to another enterprise This also remains a key overhang in the near term

Impact of current measures announced for the sector

Currently only four announcements have been made for the MSME segment such as moratorium of loans

working capital enhancements additional funding through market borrowings and payment of EPF by the

government to small businesses having less than 100 employees However most of these announcementsrelief

measures are yet to yield results for the sector

After the Finance Minister relaxed the guidelines ~INR7b has been withdrawn from the EPFO

Banks are not disbursing any new loans due to operational difficulties owing to the lockdown

Enhancing working capital limit requires much documentation like utilization limits certificate of auditors etc

and thus operational difficulties exist

Mr K E Raghunathan (Past president of AIMO)

Mr Raghunathan is the past National President of All India Manufacturersrsquo Organization (AIMO) and a key member of

board of trustees of the EPFO He has been associated with the solar energy space since

1984 and started Solkar Industries Ltd to manufacture

solar energy products Mr Raghunathan was awarded

the lsquoBest small scale Industrialistrsquo in 1995 by the Indian government and has

been awarded lsquoBest Performerrsquo consecutively for

three years in the field of Solar Energy by the Tamil Nadu

government

17 April 2020 13

Other highlights

The biggest learning for an MSME entrepreneur would be to find new ways of doing business adoption of better

technology automation of factories and focusing on ways to capitalize the current situation Many developed

nations are expected to move away from China and thus India can become the new big market for the world

Annual Maintenance Contract (AMC) providers should also face challenges Also significant challenges exist for

the unorganized sector

We do not expect any loan restructuring to happen anytime soon as the damage is still uncertain

GST returns for Aprrsquo20 will be Nil for most MSME players and thus no GST benefit will accrue

17 April 2020 14

MOTHERSON SUMI PLANTS IN CHINA HAVE RESUMED PRODUCTION AND ARE AT PRE-COVID-19 LEVELS Laksh Vaaman Sehgal Vice Chairman Companyrsquos plants have opened up in China They have been in lockdown for a

good two months and now government authorities are allowing them to open

up Have seen that demand has picked up exceptionally well All plants in China

have resumed production and they are already at pre-Covid-19 levels

In fact the entire supply chain has come together to make sure that pent up

demand is being addressed and seeing a lot of good offtake

Even during the lockdown some plants around the world which were supplying

to agricultural manufacturers or trucking were allowed to stay open to supply

because they come under the critical or essential category

Have a consolidated cash position of approximately Rs 47 billion We have

further consolidated lines committed and uncommitted of another Rs 55 billion

with about 450-460 million odd Euros at Samvardhana Motherson Automotive

System Group BV (SMRPBV)

So have adequate headroom in bond documents to utilise these lines and there

is no major maturities of debt in the next 12 months

In conversation

17 April 2020 15

WHAT COULD SEE INDIA THROUGH ITS COVID CRISIS Many commentators including us have argued that supporting the Indian

lockdown response to covid-19 requires a large increase in fiscal stimulus

Central and state governments will need to incur huge expenditures for

providing swift digitally-enabled financial support to the unemployed poor

daily-wage earners migrant labor and non-salaried middle-class workers who

would otherwise be forced to step out of their houses However it is

increasingly clear that while a lockdown and massive fiscal support measures

are emerging as the standard playbook for most countries these options cannot

be identically implemented in India Put starkly there are significant financial

and real constraints on our ability to sustain a prolonged lockdown and to spend

our way out of this crisis On 9 April the government sanctioned ₹15000 crore

towards the lsquoIndia covid-19 Emergency Response and Health System

Preparedness Packagersquo Put in context this single announcement is 05 of the

entire budgetary allocation for 2019-2020 The lockdown is also straining critical

supply chainsmdashfood shortages have already been reported and there are

inevitable disruptions to both rabi harvests and kharif sowing timetables given

the timing of the shock

From the think tank

17 April 2020 16

Explanation of Investment Rating

Investment Rating Expected return (over 12-month)

BUY gt=15

SELL lt - 10

NEUTRAL gt - 10 to 15

UNDER REVIEW Rating may undergo a change

NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation

In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days the Research Analyst shall within following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend

Disclosures The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations) Motilal Oswal Financial Services Ltd (MOFSL) is a SEBI Registered Research Analyst having registration no INH000000412 MOFSL the Research Entity (RE) as defined in the Regulations is engaged in the business of providing Stock broking services Investment Advisory Services Depository participant services amp 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 wwwmotilaloswalcom MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities amp 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 amp Derivatives Exchange Limited (NCDEX) for its stock broking activities amp 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 amp 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 httponlinereportsmotilaloswalcomDormantdocumentsAssociate20Detailspdf

Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at httpsgalaxymotilaloswalcomResearchAnalystPublishViewLitigationaspx MOFSL itrsquos associates Research Analyst or their relative may have any financial interest in the subject company MOFSL andor its associates andor Research Analyst may have actualbeneficial ownership of 1 or more securities in the subject company in the past 12 months 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 lenderborrower 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 Research Analyst may have served as directorofficer etc in the subject company in the past 12 months MOFSL andor its associates may have received any compensation from the subject company in the past 12 months

In the past 12 months MOFSL or any of its associates may have a) managed or co-managed public offering of securities from subject company of this research report b) received compensation for investment banking or merchant banking or brokerage services from subject company of this research report

c) received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report d) Subject Company may have been a client of MOFSL or its associates in the past 12 months MOFSL and itrsquos associates have not received any compensation or other benefits from the subject company or third party in connection with the research report To enhance transparency MOFSL 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 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 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 (ie holding client securities collaterals error trades etc) MOFSL also earns DP income from clients which are not considered in above disclosures 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 (ie holding client securities collaterals error trades etc) MOFSL also earns DP income from clients which are not considered in above disclosures Terms amp 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 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

Disclosure of Interest Statement Companies where there is interest Analyst ownership of the stock No A graph of daily closing prices of securities is available at wwwnseindiacom wwwbseindiacom Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research Proprietary trading desk of MOFSL or its associates maintains armrsquos length distance with Research Team as all the activit ies 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 amp 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) ldquoSFOrdquo As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Financial Services Limited(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 ldquoProfessional Investorsrdquo 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 investorsrdquo 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 isare not located in Hong Kong amp are not conducting Research Analysis in Hong Kong For US Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the US Securities Exchange Act of 1934 as amended (the1934 act) and under applicable state laws in the United States In addition MOFSL is not a registered

investment adviser under the US 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 US 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 US Securities Exchange Act of 1934 as amended (the Exchange Act) and interpretations thereof by the US Securities and Exchange Commission (SEC) in order to conduct business with Institutional Investors based in the US MOFSL has entered into a chaperoning agreement with a US 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 US 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 (ldquoMOCMSPLrdquo) (CoReg 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 reportpublicationcommunication This report is distributed solely to persons who qualify as ldquoInstitutional Investorsrdquo 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 (ldquothe SFArdquo) Accordingly if a Singapore person is not or ceases to be such an institutional investor such Singapore Person must

immediately discontinue any use of this Report and inform MOCMSPL Disclaimer The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way transmitted to copied or distributed in part or in whole to any other person or to the media or reproduced in any form without prior written consent This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments Nothing in this report constitutes investment legal accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances The securities discussed and opinions expressed in this report

may not be suitable for all investors who must make their own investment decisions based on their own investment objectives financial positions and needs of specific recipient This may not be taken in substitution for the exercise of independent judgment by any recipient Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved) and should consult its own advisors to determine the merits and risks of such an investment The investment discussed or views expressed may not be suitable for all investors Certain transactions -including those involving futures options another derivative

products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors No representation or warranty express or implied is made as to the accuracy completeness or fairness of the information and opinions contained in this document The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report This information is subject to change without any prior notice The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval 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 responsibilityliability 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 wwwmotilaloswalcom CIN No L67190MH2005PLC153397Correspondence Office Address Palm Spring Centre 2nd Floor Palm Court Complex New Link Road Malad(West) Mumbai- 400 064 Tel No 022 7188 1000Registration Nos Motilal Oswal Financial Services Limited

(MOFSL) INZ000158836(BSENSEMCXNCDEX) CDSL and NSDL IN-DP-16-2015 Research Analyst INH000000412 AMFI ARN - 146822 Investment Adviser INA000007100 Insurance Corporate Agent CA0579 PMSINP000006712 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 NCDsInsurance Products and IPOsReal 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 amp 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 namotilaloswalcom Contact No022-71881085 MOFSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) wef August 21 2018 pursuant to order dated

July 30 2018 issued by Honble National Company Law Tribunal Mumbai Ben

17 April 2020 2

Liquidity boost Government considers tax refunds to large firms The government is likely to provide income tax and GST refunds to large companies to ensure additional liquidity during the Covid-19 crisis induced lockdown

Rupee falls to all-time low against US dollar inches closer to 77 per USD A broad strength in the US dollar pushed Indian rupee today to record lows against the greenback today After opening at 7674 the rupee fell to a new low of 7687 breaching last weeks low of 7655 per US dollar The rupee also closed near all-time lows at 7686 per US dollar In comparison the rupee had settled at 7644 in the previous sessionhellip

Banks set to seek NPA relaxation guarantees from RBI Staring at a double blow of rising delinquences and falling loan demand banks are all set to request the Reserve Bank of India (RBI) for extraordinary relaxations in accounting of non performing assets (NPAs) and could also ask government gaurantees for loans to small and medium enterprises (SMEs)hellip

TCS not to lay off employees freezes salary hikes Largest Indian software exporter TCS on Thursday said it will not retrench any of its nearly 45 lakh employees but has decided not to give any salary hikes this yearhellip

Mutual funds likely to get Sebi lifeline to tide over liquidity woes The Securities and Exchange Board of India (Sebi) is likely to throw a lifeline to the Rs 25-trillion mutual fund (MF) industry to tide over the current liquidity crisis triggered by inactivity in the bond market and a surge in redemption requestshellip

Steel industry struggles as blast furnaces begin shutting down The steel industry is reeling under the side-effects of an extended national lockdown and a near complete disappearance of demand Blast furnaces and the molten steel they produce - that enduring image of industry - are slowly being shut down across the countryhellip

Govt waives off four months rent for IT units operating out of software tech parks In what will come as a huge relief to IT and ITeS companies operating out of Software Technology Parks of India the government on Thursday has decided to waive off the rent being paid by these units till June -- that is for a period of four monthshellip

Kindly click on textbox for the detailed news link

In the news today

2

5

6 7

4

1

3

17 April 2020 3

16 April 2020

































economies













17 April 2020 4


Bloomberg TCS IN




1 6 12 Rel Per () 453


Free float () 280


YE Mar 2020 2021E 2022E

Sales 1569 1559 1716

EBIT Margin () 246 234 255

PAT 323 309 367

EPS (INR) 862 823 978

EPS Gr () 37 (45) 188

BVSh (INR) 230 267 315

Ratios

RoE () 364 331 336

RoCE () 310 272 283

Payout () 991 547 514

Valuations

PE (x) 199 208 175

PBV (x) 75 64 55

EVEBITDA (x) 145 148 121

Div Yield () 43 22 25




DII 81 83 77

FII 159 155 158

Others 40 42 44








































16 April 2020


TCS

17 April 2020 5


























(INR B)


1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QFY20 ( bp)


QoQ () 16 32 07 28 16 06 13 -25 96 54 -04 -218bp


QoQ () 68 76 13 18 04 21 23 02 06 -32bp

YoY () 158 207 208 185 114 58 67 51 190 72 54 -34bp

GPM () 414 425 418 418 405 408 414 420 419 412 406 143bp

SGA () 163 160 162 167 163 168 163 169 163 166 159 100bp

EBITDA 91 103 101 101 100 102 109 110 395 421 107 27

EBITDA Margin () 265 279 270 265 263 262 273 275 270 268 267 81bp

EBIT Margin () 250 265 256 251 242 240 250 251 256 246 247 43bp

Other income 12 6 11 12 14 12 6 5 43 37 6 -133

ETR () 248 235 242 238 234 235 230 230 240 232 235 -49bp

PAT 73 79 81 82 81 80 81 80 317 323 80 08

QoQ () 63 76 26 06 -03 -11 09 -08 -16 76bp

YoY () 235 226 241 181 108 18 02 -13 226 22 -20 76bp

EPS (INR) 192 206 216 217 217 214 216 215 831 862 213 08

E MOFSL Estimates

17 April 2020 6














advertisements














limited 9








Media


All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6



17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 3

16 April 2020

































economies













17 April 2020 4


Bloomberg TCS IN




1 6 12 Rel Per () 453


Free float () 280


YE Mar 2020 2021E 2022E

Sales 1569 1559 1716

EBIT Margin () 246 234 255

PAT 323 309 367

EPS (INR) 862 823 978

EPS Gr () 37 (45) 188

BVSh (INR) 230 267 315

Ratios

RoE () 364 331 336

RoCE () 310 272 283

Payout () 991 547 514

Valuations

PE (x) 199 208 175

PBV (x) 75 64 55

EVEBITDA (x) 145 148 121

Div Yield () 43 22 25




DII 81 83 77

FII 159 155 158

Others 40 42 44








































16 April 2020


TCS

17 April 2020 5


























(INR B)


1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QFY20 ( bp)


QoQ () 16 32 07 28 16 06 13 -25 96 54 -04 -218bp


QoQ () 68 76 13 18 04 21 23 02 06 -32bp

YoY () 158 207 208 185 114 58 67 51 190 72 54 -34bp

GPM () 414 425 418 418 405 408 414 420 419 412 406 143bp

SGA () 163 160 162 167 163 168 163 169 163 166 159 100bp

EBITDA 91 103 101 101 100 102 109 110 395 421 107 27

EBITDA Margin () 265 279 270 265 263 262 273 275 270 268 267 81bp

EBIT Margin () 250 265 256 251 242 240 250 251 256 246 247 43bp

Other income 12 6 11 12 14 12 6 5 43 37 6 -133

ETR () 248 235 242 238 234 235 230 230 240 232 235 -49bp

PAT 73 79 81 82 81 80 81 80 317 323 80 08

QoQ () 63 76 26 06 -03 -11 09 -08 -16 76bp

YoY () 235 226 241 181 108 18 02 -13 226 22 -20 76bp

EPS (INR) 192 206 216 217 217 214 216 215 831 862 213 08

E MOFSL Estimates

17 April 2020 6














advertisements














limited 9








Media


All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6



17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 4


Bloomberg TCS IN




1 6 12 Rel Per () 453


Free float () 280


YE Mar 2020 2021E 2022E

Sales 1569 1559 1716

EBIT Margin () 246 234 255

PAT 323 309 367

EPS (INR) 862 823 978

EPS Gr () 37 (45) 188

BVSh (INR) 230 267 315

Ratios

RoE () 364 331 336

RoCE () 310 272 283

Payout () 991 547 514

Valuations

PE (x) 199 208 175

PBV (x) 75 64 55

EVEBITDA (x) 145 148 121

Div Yield () 43 22 25




DII 81 83 77

FII 159 155 158

Others 40 42 44








































16 April 2020


TCS

17 April 2020 5


























(INR B)


1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QFY20 ( bp)


QoQ () 16 32 07 28 16 06 13 -25 96 54 -04 -218bp


QoQ () 68 76 13 18 04 21 23 02 06 -32bp

YoY () 158 207 208 185 114 58 67 51 190 72 54 -34bp

GPM () 414 425 418 418 405 408 414 420 419 412 406 143bp

SGA () 163 160 162 167 163 168 163 169 163 166 159 100bp

EBITDA 91 103 101 101 100 102 109 110 395 421 107 27

EBITDA Margin () 265 279 270 265 263 262 273 275 270 268 267 81bp

EBIT Margin () 250 265 256 251 242 240 250 251 256 246 247 43bp

Other income 12 6 11 12 14 12 6 5 43 37 6 -133

ETR () 248 235 242 238 234 235 230 230 240 232 235 -49bp

PAT 73 79 81 82 81 80 81 80 317 323 80 08

QoQ () 63 76 26 06 -03 -11 09 -08 -16 76bp

YoY () 235 226 241 181 108 18 02 -13 226 22 -20 76bp

EPS (INR) 192 206 216 217 217 214 216 215 831 862 213 08

E MOFSL Estimates

17 April 2020 6














advertisements














limited 9








Media


All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6



17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 5


























(INR B)


1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4QFY20 ( bp)


QoQ () 16 32 07 28 16 06 13 -25 96 54 -04 -218bp


QoQ () 68 76 13 18 04 21 23 02 06 -32bp

YoY () 158 207 208 185 114 58 67 51 190 72 54 -34bp

GPM () 414 425 418 418 405 408 414 420 419 412 406 143bp

SGA () 163 160 162 167 163 168 163 169 163 166 159 100bp

EBITDA 91 103 101 101 100 102 109 110 395 421 107 27

EBITDA Margin () 265 279 270 265 263 262 273 275 270 268 267 81bp

EBIT Margin () 250 265 256 251 242 240 250 251 256 246 247 43bp

Other income 12 6 11 12 14 12 6 5 43 37 6 -133

ETR () 248 235 242 238 234 235 230 230 240 232 235 -49bp

PAT 73 79 81 82 81 80 81 80 317 323 80 08

QoQ () 63 76 26 06 -03 -11 09 -08 -16 76bp

YoY () 235 226 241 181 108 18 02 -13 226 22 -20 76bp

EPS (INR) 192 206 216 217 217 214 216 215 831 862 213 08

E MOFSL Estimates

17 April 2020 6














advertisements














limited 9








Media


All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6



17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 6














advertisements














limited 9








Media


All day

Non-

Prime

Time

Prime

Time

India 43 81 11

HSM 49 97 13

South 33 60 6



17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 7











17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 8


Expert Speak
































costly











Technologies









17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 9


















hygiene practices







opportunities














17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 10








17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 11


Expert Speak






Canada)




to USD32b for 2020










in the pack










2020






















MSc Economics and





17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 12


Expert Speak












facing currently




workforce












payment commitments






















government

17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 13

Other highlights








17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 14
















In conversation

17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 15


















From the think tank

17 April 2020 16



BUY gt=15

SELL lt - 10

































17 April 2020 16



BUY gt=15

SELL lt - 10

































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