Gautam Duggad – Research analyst (Gautam.Duggad@MotilalOswal.com); +91 22 6129 1522 Deven Mistry – Research analyst (Deven@MotilalOswal.com); +91 22 6129 1575

May 2020

October 2018 1 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.

India Strategy BSE Sensex: 30,673 S&P CNX: 9,039

4QFY20 interim earnings review Financials lead broad-based drag; Sharp cut in forward estimates

4QFY20 earnings of 74 MOFSL Universe and 26 Nifty companies that have announcedresults as at 23rd May'20 are below expectations.

Companies that have reported earnings so far comprise (a) 65% of est. PAT for theMOFSL Universe, (b) 64% of est. PAT for the Nifty (c) 50% of India's marketcapitalization, and (d) 69% of Nifty-50 index weight.

Key insights: (a) While both the Nifty/MOSL Universe companies have metsales/EBIDTA expectations, they have missed on the PBT/PAT front, (b) Automobiles,Cement and Utilities have exceeded PAT expectations while BFSI, Consumer, CapitalGoods, Healthcare, Oil and Gas, Telecom and Retail have missed. Technology was inline with expectations, (c) Higher provisions in Banks/NBFCs disproportionatelyimpacted aggregate profitability, (d) FY21 earnings revision is significantly tilted in favorof downgrades, and (e) So far, management commentaries suggest more volatility anddisruption in earnings ahead with several Nifty companies seeing fresh double-digit EPScuts for FY21E. However, most company managements have stressed on the uniqueand unprecedented nature of the crisis, resulting in difficulty in providingguidance/predictions.

Strategy view: 4QFY20 earnings season has brought to the fore the challenging terrainahead with multiple headwinds and moving parts. The adverse economic impact ofCOVID-19 is expected to wipe out FY21E earnings growth. The two months of economiclockdown has taken a toll on corporate balance sheets even as underlying demand hassuffered. While the government has announced various measures, direct fiscal stimulusseems quite limited. The RBI too has undertaken several monetary initiatives apartfrom the two rounds of policy rate cuts. Amidst this gloomy backdrop, gradual openingup of the economy provides a silver lining. Thus, we believe the interplay of health andeconomic crisis would hold the key to markets in the near term. In our model portfolio,we are Overweight on IT, BFSI, Telecom, Pharma and Auto, Neutral on Consumer, andUnderweight on Oil and Gas, Metals and Capital Goods sectors.

Key highlights of 4QFY20 results: For the 26 Nifty companies, sales, EBITDA, PBT and PAT grew 1.9%, 8.6%, -11.9% and -

13.8% YoY, respectively (v/s est. 2.3%, 7.6%, 7.6% and 8.9% YoY, respectively). Of the26 Nifty companies that have declared results, 6 have surpassed, 14 have missed and 6have met our expectations on the PAT front.

For the MOFSL Universe, sales, EBITDA, PBT and PAT grew 1.5%, 9.7%, -10.7% and -12% YoY, respectively (v/s est. 2.3%, 8.3%, 2.9% and 5.3% YoY, respectively).

The earnings upgrade/downgrade ratio for FY21 is significantly skewed in favor ofdowngrades so far, with 47 MOFSL Universe companies witnessing downgrades ofmore than 3% and 10 witnessing upgrades of more than 3%. 29 companies in ourcoverage universe have seen FY21E earnings downgrade of >10%.

Among the Nifty constituents, Bajaj Auto, HCL Tech, IndusInd Bank, JSW Steel, ShreeCement and UltraTech Cement have exceeded our profit estimates, while Axis Bank,ICICI Bank, Reliance Industries, Bajaj Finance, HUL and Cipla missed expectations.

So far, we have cut FY20/FY21E Nifty EPS estimates by 2.7%/2.9% to INR472/INR485from INR485/INR499. We are building in Nifty EPS growth of -2.4%/+2.7% forFY20/FY21E.

4QFY20

Refer our Mar-20 Quarter Preview

India Strategy | Review 4QFY20

May 2020 2

Within the MOFSL universe, at sectoral level, Capital Goods, Retail, NBFCs, Cement,Life Insurance, Telecom and Automobiles have seen over 10% earnings cut.

Key sectoral trends from 4QFY20 earnings BFSI: Performance of our BFSI universe was operationally in line even as COVID-

19 provisions dragged PBT and PAT, resulting in 32% PAT miss. With concerns on loan growth and asset quality persisting, managements have refrained from providing guidance. Due to economic activity still being in a nascent stage of recovery, managements expect subdued trends in business growth along with pick-up in lending activity from 2HFY21E. HDFCB/IIB expects GNPA impact of ~50bp/80bp due to COVID-19 while IIB/RBK expects credit cost at ~120bp/350bp. As at 30th Apr’20, many large banks have indicated that the proportion of customers availing the moratorium has been in the range of 25-35% (in value terms) while for small and mid-sized banks, the moratorium has been much higher. For instance, moratorium for Equitas/ Ujjivan stood at 93%/90% and for BANDHAN at ~70-75% of total portfolio. Although incidence of the moratorium is expected to increase due to the recent extension by the RBI, the trend in collection efficiency as the economy starts to recovery would be an important metric to assess the health of the banking system in the near term.

NBFCs: While only a few NBFCs have reported results so far, we see a trend of PAT miss due to higher-than-expected provisions. Also, companies under our coverage have taken 30-90bp additional contingency provisions for COVID-19. The moratorium granted by NBFCs to its customers ranges from 30-35% in case of diversified NBFCs to 70%+ in the case of vehicle financiers. With the lockdown being gradually lifted in several districts across the country, 60-80% of NBFC branches are now operational; however, the focus remains on collections rather than disbursements. Moreover, managements have refrained from providing guidance on growth or credit costs for FY21E.

Technology: As usual, our Tech universe companies have met expectations on EBITDA/PBT/PAT front. Moreover, the recent commentary on Indian IT and even client enterprises offer some comfort on the new business wins, ramp-ups, supply-side aspects, cost optimization and margin management capabilities of these companies.

Healthcare: The financial performance of pharma sector companies (on aggregate basis) that have declared results has been below expectations led by large-caps like CIPLA/DRRD/BIOS. Mid-caps like AJP/ALPM/GLXO/LAURUS have delivered better-than-estimated earnings. Pre-buying of medicines due to the COVID-19 crisis led to increased business for companies having exposure to chronic therapies in the US/domestic formulations market. However, this was offset to some extent due to lesser off-take of acute medicines owing to restricted hospital access and lesser willingness of patients to reach out to doctors. Company specific factors like billing pattern (50%+ billing in second half of Mar’20) for Cipla, inventory write-offs in case of DRRD and delayed shipment in case of BIOS also impacted performance at aggregate level for 4QFY20. However, the COVID-19 led 15-20 days supply-side disruption had limited impacted on the business due to available inventory in the system.

Consumer: The sudden announcement of lockdown and the earlier one-day ‘Janta Curfew’ resulted in domestic volumes declining in high-single-digit/ early-double-digit for most companies that have declared results so far. This was on account of unexpected impact on the supply chain and manufacturing. Nestle

India Strategy | Review 4QFY20

May 2020 3

was the sole company with positive surprise on sales growth while Tata Consumer reported better-than-expected EBITDA performance in the Mar’20 quarter. Due to the unplanned impact on sales, margins were also affected as companies had already incurred a large part of discretionary costs like ad spends for most part of the quarter. Earnings cuts for FY21E are, however, restricted to single-digits as discretionary companies are yet to report results and demand for staples’ companies is expected to hold up well beyond Apr-May’20.

Automobiles: The sector’s performance was influenced by the lockdowns and FX (positive for BJAUT and negative for MSIL). Also, other income has been higher due to MTM gains, driving in line PAT. OEMs expect 1HFY21 to be a washout but are hopeful of recovery in 2HFY21E. BOS has guided for very bleak outlook with 15-47% decline in industry production for FY21E. We have cut our FY21E EPS by 4-21% to reflect the evolving demand environment.

In-line operating performance; Autos, Cement, Metals, Utilities surprise Aggregate performance of MOFSL Universe: Sales, EBITDA, PBT and PAT grew

1.5%, 9.7%, -10.7% and -12% YoY, respectively (v/s est. 2.3%, 8.3%, 2.9% and5.3% YoY).

Top companies that beat estimates: IndusInd Bank (411% beat), JSW Steel(53%), Bajaj Auto (22%) and Shree Cement (20%).

Top companies that missed estimates: Axis Bank (loss of INR13.9b v/s est. profitof INR14b), ICICI Bank (54% miss), Reliance Industries (46% miss), Bajaj Finance(28% miss) and Cipla (24% miss).

Top FY21E upgrades: IndusInd Bank (9.7%), Dr Reddy’s Labs (2.1%) and HCLTech (0.7%).

Top FY21E downgrades: JSW Steel (27.1%), Tech Mahindra (27%), UltraTechCement (20.9%), Bharti Airtel (20.6%) and Maruti Suzuki (17.5%).

Exhibit 1: Sector-wise 4QFY20 performance of MOFSL Universe companies (INR b) Sector Sales EBITDA PBT PAT

(no of companies) Mar 2020

Chg. % YoY

Var. over Exp. (%)

Mar 2020

Chg. % YoY

Var. over Exp. (%)

Mar 2020

Chg. % YoY

Var. over Exp. (%)

Mar 2020

Chg. % YoY

Var. over Exp. (%)

Automobiles (4) 286 -13.9 -0.3 33 -20.5 -0.5 38 -16.0 8.3 30 -10.2 12.6Capital Goods (5) 89 -19.0 -9.7 8 -34.4 -20.1 7 -38.3 -24.0 6 -29.0 -23.1Cement (5) 220 -9.8 -3.2 51 7.7 -5.6 33 8.4 -8.3 28 23.9 10.5 Consumer (7) 201 -2.5 -6.2 43 -5.5 -9.0 40 -7.4 -8.6 30 -0.3 -8.1Financials (15) 693 14.5 4.0 411 21.6 7.5 145 -29.5 -34.6 112 -21.1 -32.0 Banks - Private (10) 417 20.3 5.4 348 21.3 5.8 120 -27.2 -35.8 92 -18.6 -33.3 Life Insurance (2) 209 3.1 3.0 10 3.5 363.6 5 -26.8 -28.0 5 -21.5 -12.4 NBFC (3) 67 20.4 -1.8 53 28.6 2.9 20 -41.4 -28.2 16 -32.9 -28.5Healthcare (8) 145 9.8 -1.0 28 5.7 -10.1 19 -5.4 -18.9 16 6.8 -11.6Metals (2) 223 -20.0 -0.1 49 -31.7 -1.7 28 -44.5 -2.6 24 -32.8 10.0Oil & Gas (1) 1,362 -1.7 -3.9 218 4.6 -0.5 135 -2.0 -12.9 65 -37.2 -45.5Retail (3) 80 20.8 3.8 6 17.0 -18.5 4 -12.3 -21.9 3 21.6 -16.2Technology (13) 1,201 8.1 0.5 281 9.7 1.3 259 0.0 0.4 202 0.7 2.4 Telecom (2) 273 12.7 1.5 115 41.6 -0.8 8 LP -36.4 1 LP -61.1Utilities (3) 114 -5.2 0.4 30 19.6 16.9 6 54.1 90.9 6 127.2 90.2 Others (6) 168 14.4 4.8 29 4.9 -9.2 15 -10.5 -18.8 9 -35.2 -29.6MOFSL Universe (74) 5,056 1.5 -0.8 1,303 9.7 1.3 738 -10.7 -13.2 532 -12.0 -16.4MOFSL Univ Ex Corp Banks (72) 4,898 1.0 -1.1 1,171 8.9 0.6 742 -6.7 -6.6 534 -7.9 -10.4Nifty (26) 4,174 1.9 -0.3 1,241 8.6 0.9 626 -11.9 -18.1 444 -13.8 -20.9Sensex (17) 3,408 2.6 -1.4 978 14.2 1.0 542 -6.7 -15.1 377 -11.4 -20.8Note: LP: Loss to Profit; PL: Profit to Loss Source: Company, MOFSL

India Strategy | Review 4QFY20

May 2020 4

4QFY20 aggregate performance of MOFSL Universe companies that have declared results so far

Exhibit 2: Sales growth in line with estimate at 1.5% YoY Exhibit 3: PAT decline of 12% YoY (v/s est. +5.3%)

Exhibit 4: EBITDA growth in line at 9.7% YoY

Source: Company, MOFSL

Exhibit 5: EBITDA margin (ex-Financials) expanded 110bp YoY to 20.5% (v/s est. 20.4%)

Source: Company, MOFSL

Sectoral EBITDA margins

Exhibit 6: MOFSL Universe – sector-wise margin performance

Source: Company, MOFSL

16

4

10 11

16

11 1113

16

24 24 25

15 13

5 4 1

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

-19

Sep-

19De

c-19

Mar

-20

12 14

7 2

9 5 4

11

3

9 10 8

15 10

8

15

-12

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

-19

Sep-

19De

c-19

Mar

-20

17

13 11

8 6 5

12 14

18

23

15 15

10 12 11 12 10

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

-19

Sep-

19De

c-19

Mar

-20

22.2

22.0

21.2

20.8

20.4

20.2

21.4

21.4

20.6

20.3

19.6

18.7

19.4

19.4

19.8

19.8

20.5

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

-19

Sep-

19De

c-19

Mar

-20

12.6 10.6

19.2 22.2 20.3

25.9

15.0

23.1

33.6

11.6 8.6

23.0 21.5 19.5 22.2

16.0

23.4

42.2

Auto Cap Goods Cement Consumer Healthcare Metals Oil & Gas Technology Telecom

Mar-19 (Actual) Mar-20 (Actual)

India Strategy | Review 4QFY20

May 2020 5

Nifty 4QFY20 aggregate performance below estimates (26 companies) Sales, EBITDA, PBT and PAT for 26 Nifty companies grew 1.9%, 8.6%, -11.9% and

-13.8% YoY, respectively (v/s est. 2.3%, 7.6%, 7.6% and 8.9% YoY, respectively). Of the 26 Nifty companies that have declared results, 6 have surpassed, 14 have

missed and 6 have met expectations on the PAT front. On the EBITDA front, 7 have surpassed, 9 have missed and 10 have met

expectations.

Exhibit 7: Nifty sales up 1.9% YoY (v/s est. 2.3%) Exhibit 8: Nifty PAT declined 13.8% YoY (v/s est. +8.9%)

Exhibit 9: Nifty EBIDTA grew in line at 8.6% YoY (v/s est. +7.6%)

Source: Company, MOFSL

Exhibit 10: Nifty EBITDA margin (ex-Financials) expanded 80bp YoY to 20.9%

Source: Company, MOFSL

Nifty Universe – aggregate performance of companies that have declared 4QFY20 results

Exhibit 11: 4QFY20 performance of Nifty companies that have declared results so far (INR b); PAT decline of 13.8% YoY Sales EBITDA PBT PAT

Company Sector Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Mar 2020

Chg. %

QoQ

Chg . % YoY

Var. over

Exp. (%)

Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Bajaj Auto Automobiles 68 -10.8 -8.1 4.1 13 -8.4 2.1 11.9 17 3.0 12.2 20.2 13 3.9 22.8 22.4Maruti Suzuki Automobiles 182 -12.1 -15.2 -2.7 15 -26.4 -31.7 -10.6 16 -21.5 -31.9 -1.2 13 -17.5 -28.1 4.1Shree Cement Cement 32 13.0 -2.0 -4.1 11 27.0 27.3 1.0 7 63.7 65.9 3.8 6 89.8 83.3 20.2 Ultratech Cement Cement 107 3.8 -13.1 -2.7 24 15.9 -3.9 -11.3 15 29.2 -4.6 -14.6 13 64.4 24.2 14.1Hind. Unilever Consumer 90 -8.1 -9.4 -11.7 21 -15.5 -11.0 -16.9 21 -11.9 -10.8 -14.1 15 -13.1 -7.6 -18.7Nestle Consumer 33 5.6 10.7 4.3 8 19.0 4.7 2.9 7 16.6 -0.2 0.6 5 13.8 12.3 0.7 Axis Bank Banks - PVT 68 5.5 19.3 7.8 59 1.9 16.7 11.5 -19 PL PL PL -14 PL PL PL HDFC Bank Banks - PVT 152 7.3 16.2 0.8 130 0.1 19.5 -2.8 92 -7.3 2.5 -4.1 69 -6.6 17.7 -3.2ICICI Bank Banks - PVT 89 4.5 17.1 9.6 74 -2.1 18.6 5.8 14 -74.0 81.9 -60.1 12 -70.5 26.0 -54.3IndusInd Bank Banks - PVT 32 5.1 44.7 9.7 29 3.6 38.2 22.4 4 -75.7 -17.9 155.6 3 -75.9 -12.5 411.1Kotak Mah Bank Banks - PVT 36 3.8 16.8 2.4 27 14.1 19.4 7.5 17 -13.7 -20.5 -19.8 13 -20.6 -10.0 -17.4Bajaj Finance NBFC 38 3.9 36.9 1.2 32 7.7 45.5 5.5 13 -41.1 -29.4 -27.8 9 -41.3 -19.4 -27.9

11

4

11 1317

12 12 14

18

26 26 28

17 14

5 5 2

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

-19

Sep-

19De

c-19

Mar

-20

8

18

10 4 6

2 2

11

2 7 8 10

17 12

916

-14M

ar-1

6Ju

ne-1

6Se

p-16

Dec-

16M

ar-1

7Ju

ne-1

7Se

p-17

Dec-

17M

ar-1

8Ju

ne-1

8Se

p-18

Dec-

18M

ar-1

9Ju

ne-1

9Se

p-19

Dec-

19M

ar-2

0

23

18 18

14

4 5

13 15

20 23

15 18

14 14 15 14

9

Mar

-16

June

-16

Sep-

16De

c-16

Mar

-17

June

-17

Sep-

17De

c-17

Mar

-18

June

-18

Sep-

18De

c-18

Mar

-19

June

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Sep-

19De

c-19

Mar

-20

23.5

23.1

22.2

21.5

20.9

20.8

21.9

22.2

21.1

20.7

19.7

19.2

20.1

19.5

20.0

20.4

20.9

Mar

-16

June

-16

Sep-

16

Dec-

16

Mar

-17

June

-17

Sep-

17

Dec-

17

Mar

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June

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Sep-

18

Dec-

18

Mar

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June

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Sep-

19

Dec-

19

Mar

-20

India Strategy | Review 4QFY20

May 2020 6

Sales EBITDA PBT PAT

Company Sector Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Mar 2020

Chg. %

QoQ

Chg . % YoY

Var. over

Exp. (%)

Mar 2020

Chg. %

QoQ

Chg. %

YoY

Var. over Exp. (%)

Bajaj Finserv NBFC 133 -8.7 2.3 22.7 133 -8.7 2.3 22.7 8 -69.9 -62.8 -69.9 2 -82.7 -76.8 -86.8Cipla Healthcare 44 0.1 -0.6 1.6 6 -16.5 -34.1 -17.9 4 -28.9 -49.4 -30.6 3 -21.8 -46.4 -24.1Dr Reddy’ s Labs Healthcare 44 1.1 15.5 -0.8 9 -7.7 47.0 -5.6 5 -3.0 31.8 -28.0 6 -3.9 90.0 -6.1Adani Ports Infra 29 -12.4 -5.2 -11.0 6 -70.1 -68.7 -73.1 3 -85.0 -84.2 -86.4 3 -75.3 -75.1 -65.6JSW Steel Metals 179 0.5 -20.0 0.5 30 35.2 -33.0 -1.9 10 347.4 -59.5 -4.4 10 4321 -32.0 52.8Reliance Inds. Oil & Gas 1,362 -11.1 -1.7 -3.9 218 -3.7 4.6 -0.5 135 -10.4 -2.0 -12.9 65 -44.7 -37.2 -45.5HCL Technologies Technology 186 2.6 16.3 0.5 47 5.7 31.8 4.5 39 3.5 21.6 2.9 32 3.8 23.1 8.2 Infosys Technology 233 0.8 8.0 0.7 57 -2.2 10.2 -0.2 55 -6.0 4.0 -3.3 43 -2.9 6.3 4.0TCS Technology 399 0.2 5.1 -0.3 110 1.0 9.0 1.7 105 -0.5 -2.0 0.4 80 -0.8 -1.3 0.8Tech Mahindra Technology 95 -1.7 6.7 -0.9 13 -13.8 -17.8 -11.5 12 -19.8 -21.6 4.8 8 -29.8 -29.0 -5.6Wipro Technology 157 1.6 4.5 2.2 32 -1.1 -2.2 3.0 30 -3.7 -11.6 0.2 23 -5.3 -11.9 -1.3Bharti Airtel Telecom 237 8.1 15.1 2.0 102 10.1 53.8 1.1 0 Loss Loss PL -5 Loss Loss Loss Bharti Infratel Telecom 36 -1.2 -1.1 -1.6 13 -12.1 -13.0 -13.8 8 -20.9 -21.2 -14.0 6 -20.9 -2.8 -14.4UPL Others 111 25.3 30.7 10.2 22 4.8 17.1 -7.4 11 2.8 10.5 -14.2 8 -1.6 -15.0 -15.9Nifty Universe 4,174 -3.4 1.9 -0.3 1,241 -1.5 8.6 0.9 626 -20.4 -11.9 -18.1 444 -24.7 -13.8 -20.9Nifty Ex Corporate Banks 4,016 -3.7 1.4 -0.7 1,108 -1.7 7.6 0.1 631 -11.1 -7.2 -11.1 445 -16.0 -9.2 -14.4Note: LP: Loss to Profit; PL: Profit to Loss Source: Company, MOFSL

Exhibit 12: Nifty companies’ PAT YoY change (%) – 9 stocks have seen positive change

Source: Company, MOFSL

Exhibit 13: Nifty companies’ PAT – Actual v/s Estimated variance (%)

Source: Company, MOFSL

90 83

26 24 23 23 18 12 6

-1 -3 -8 -10 -12 -12 -14 -15 -19 -28 -29 -32 -37 -46PL Loss

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411 53 22 20 14 8 4 4 1 1

-1 -3 -6 -6 -14 -16 -17 -19 -21 -24 -28 -46 -54PL

Loss

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JSW

Ste

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Baja

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Cipl

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Relia

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Ind

ICIC

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Bhar

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India Strategy | Review 4QFY20

May 2020 7

Exhibit 14: Nifty Universe – 15 downgrades of over 5% v/s 1 upgrade of over 5%

EPS PREVIEW (INR) EPS REVIEW (INR) % Upgrade / Downgrade EPS Growth (%)

Company Name FY21E FY22E FY21E FY22E FY21E FY22E FY20 FY21E FY22E IndusInd Bank 64.7 87.9 71.0 90.7 9.7 3.2 25.3 3.2 27.8 Dr Reddy’ s Labs 150.7 158.3 153.9 166.6 2.1 5.3 15.4 26.8 8.3 HCL Technologies 40.2 46.9 40.5 48.3 0.7 2.9 11.3 -1.1 19.1 UPL 39.3 40.7 39.1 42.4 -0.3 4.1 17.0 3.8 8.3 HDFC Bank 56.6 67.4 55.2 65.8 -2.4 -2.4 21.2 14.9 19.2 Nestle 226.9 262.2 220.4 260.5 -2.8 -0.7 15.8 6.6 18.2 Bajaj Auto 167.2 183.9 161.1 176.2 -3.6 -4.2 13.3 -14.0 9.4 Infosys 38.4 44.6 36.8 43.1 -4.1 -3.4 5.3 -5.7 17.1 TCS 86.6 102.7 82.3 97.8 -4.9 -4.7 3.7 -4.5 18.8 Wipro 16.3 18.1 15.4 17.6 -5.2 -2.9 8.5 -7.3 13.9 Shree Cement 317.5 540.1 298.7 520.7 -5.9 -3.6 34.3 -31.4 74.3 Axis Bank 27.8 43.1 26.0 41.8 -6.2 -3.0 -66.9 331.5 60.6 Reliance Inds. 71.2 108.8 66.4 98.1 -6.8 -9.8 8.4 -2.5 47.8 Cipla 26.0 29.5 24.1 28.6 -7.5 -3.1 4.8 22.7 18.7 Bharti Infratel 17.0 18.6 15.6 16.8 -8.5 -9.9 25.0 -8.4 7.8 ICICI Bank 20.7 26.2 18.9 25.3 -8.6 -3.5 135.0 53.8 33.8 Hind. Unilever 35.9 41.3 32.7 39.7 -8.8 -4.0 11.1 4.7 21.4 Kotak Mahindra Bank 50.5 59.5 44.7 55.5 -11.5 -6.7 19.0 -0.5 24.2 Bajaj Finance 79.2 116.0 67.0 102.3 -15.4 -11.8 26.7 -23.6 52.7 Maruti Suzuki 166.9 250.6 137.7 233.1 -17.5 -7.0 -25.8 -26.7 69.3 Bharti Airtel 3.7 4.9 3.0 6.4 -20.6 29.6 Loss LP 115.7 Ultratech Cement 117.3 183.1 92.8 158.8 -20.9 -13.3 62.9 -37.0 71.0 Tech Mahindra 47.1 59.8 34.4 45.2 -27.0 -24.4 -5.9 -25.1 31.3 JSW Steel 2.7 27.3 1.9 19.3 -27.1 -29.5 -77.4 -73.1 894.6

Source: Company, MOFSL

Within the MOFSL sectoral coverage, Capital Goods, Retail, NBFCs, Cement, Life Insurance, Telecom and Automobiles have seen over 10% earnings cut.

Exhibit 15: Sector-wise earnings estimates – revision from 4QFY20 preview Estimates at preview Current estimates

EBIDTA (INR b) PAT (INR b) EBIDTA (INR b) PAT (INR b) % Revision FY21E Sector No of Cos. FY21E FY21E FY21E FY21E EBIDTA PAT Automobiles 4 136 114 115 103 -16 -10Banks - Private 10 1,482 714 1,476 682 0 -4Life Insurance 2 26 28 25 24 -1 -13NBFC 3 211 74 200 62 -5 -16Capital Goods 5 37 27 30 21 -19 -22Cement 5 170 70 152 58 -11 -16Consumer 7 210 146 202 139 -4 -5Healthcare 8 145 81 144 79 -1 -2Metals 2 185 64 183 63 -1 -1Oil & Gas 1 922 422 902 421 -2 0 Retail 3 38 20 31 16 -19 -21Technology 13 1,053 783 1,039 748 -1 -5Telecom 2 518 52 511 45 -1 -13Utilities 3 146 29 137 28 -6 -3Others 6 125 49 125 46 0 -6MOFSL Universe 74 5,404 2,673 5,271 2,537 -2 -5

India Strategy | Review 4QFY20

May 2020 8

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 recommendationconsistent with the investment rating legend.

Disclosures: The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products. Details of associate entities of Motilal Oswal Financial Services Limited are available on the website at http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf

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MOFSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. 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 (i.e 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 (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not considered in above disclosures.

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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 www.nseindia.com, www.bseindia.com. Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity and therefore it can have an independent view with regards to subject company for which Research Team have expressed their views.

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Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website www.motilaloswal.com. CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000. Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOFSL 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