Motilal Oswal reiterate bullish long term view on United Spirits

1. Gautam Duggad (Gautam.Duggad@MotilalOswal.com); +91 22 3982 5404
Manish Poddar (Manish.Poddar@MotilalOswal.com); +91 22 3027 8029
20 April 2015
Update | Sector: Consumer
United Spirits
CMP: INR3,670 TP: INR4,250 (+16%) Buy
Restaging premium brands; driving cost cutting
Premiumization plus cost management to drive margins
We reiterate our bullish long term view on UNSP. Combination of portfolio
premiumization, investments behind long term brand health and cost cutting
measures should drive margin trajectory upwards, in our view.
§ Premium brands are being restaged after years of under-investment.
§ Recalibration of brand investments in favor of Above the Line spends.
§ Several cost cutting levers available to drive margins.
§ Industry premiumizing with low double digit growth in Prestige segment.
n Revamp of premium brands: Our recent interaction with the management
and our channel checks suggest major revamping of premium brands in the
near term. We note that premium brands were under-invested for the last
few years (under the erstwhile management). Hence, the brands appear
fatigued, in our view. Secondly, UNSP’s key competitor in the premium
space, Pernod Ricard, has outspent UNSP by a wide margin in the
marketplace. Thus, UNSP’s share of voice is <1x versus its share of market,
while for Pernod Ricard, the share of voice is almost ~2x its share of market,
in our view. UNSP is changing the brand architecture -- packaging of
premium brand. It has commenced with Royal Challenge, which has been
rolled out, and will be followed by Signature.
n Recalibration of brand investments on the anvil: We expect UNSP to
enhance brand and ad-spends over the next two years as it revamps the
premium brand portfolio. We believe the recalibration of brand spends is
on the anvil. Essentially, the composition of brand spends will be shifted in
favor of Above the Line (ATL) spends versus earlier Below the Line (BTL)
spends. In our view, it earlier used to spend 70-75% of the ad-spends on
BTL activities. We expect the balance to be restored to 50:50. Our channel
checks suggest it has already begun – discounting being lowered. The
broader objective behind this seems to buttress the brand equity of
premium brands. Typically, BTL activities undertaken by FMCG players are
tactical in nature, while ATL activities aid in brand building and customer
recall, in our view. Given the huge gap in profitability of Prestige versus
Popular segment, we view this as a step in the right direction.
n Several cost cutting levers available to drive margins: Our discussions with
management suggest several levers for cost cutting. We highlight three of
them:
1) Value engineering: Cost of a blend can be reduced by using more grain
and less malt without diluting the consumer experience.
2) Packaging cost management: Light-weighting of bottles can yield
savings in packaging costs. For example, UNSP’s bottles weigh 50-60gm
higher versus Pernod.
BSE Sensex S&P CNX
27,886 8,448
Stock Info
Bloomberg UNSP IN
Equity Shares (m) 145.3
M.Cap. (INR b)/(USD b) 533.3/8.5
52-Week Range (INR) 4,080/2,226
1, 6, 12 Rel. Per (%) 0/48/5
Avg Val(INRm)/Vol‘000 1,763/638
Free float (%) 41.1
Financial Snapshot (INR Billion)
Y/E Mar 2015E 2016E 2017E
Sales 80.7 92.0 106.4
EBITDA 7.9 11.4 14.5
PAT 2.5 6.3 9.1
EPS (INR) 17.3 43.6 62.6
EPS Gr. (%) -293.4 151.7 43.5
BV/Sh.(INR) 226.0 269.6 332.2
RoE (%) 8.0 17.6 20.8
RoCE (%) 12.5 17.1 20.5
Payout (%) 0.0 0.0 0.0
Valuations
P/E (x) 211.8 84.1 58.6
P/BV (x) 16.2 13.6 11.0
EV/EBITDA (x) 65.6 45.0 35.0
Div. Yield (%) 0.0 0.0 0.0
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

2. United Spirits
20 April 2015 2
3) Overhead cost control: Old plants typically have higher overheads –
INR70-80/case. Management believes there is a scope for reduction in
this cost item.
n Industry is premiumizing; double digit growth in Prestige segment:
Prestige segment in IMFL is growing in low double digit volumes, as per
industry channel checks. This segment is characterized by the duopoly of
UNSP and Pernod Ricard. Thus, the combined focus of both players in
driving premiumization augurs well for industry margins, in our view. For
example, the lower end of Prestige segment earns 3x of EBITDA of Popular
segment (and 7x for high end Prestige segment). We expect EBITDA margin
of UNSP to expand 360bp over FY15-17E to 12.7%. Our margin assumption
is lower versus the street due to our expectation of a gradual change in
UNSP’s portfolio mix.
n Franchising and non-core asset sale programme to lighten the balance
sheet: UNSP is in the process of franchising its operations in Kerala (similar
to Tamil Nadu) and Andhra Pradesh (franchise of popular brands) to drive
savings in working capital investments in these key states. Secondly, it
intends to free INR20-25b over the next two to three years through
divestment of non-core assets such as a) holding in UBL (INR9.4b), b) sale of
remaining treasury share (currently in litigation) and c) divestment of
properties.
n Valuation and view: Though early, we expect several signs to emerge from
the measures being undertaken to restage the long term business mix of
UNSP. Young and aspirational demographics, with rising incomes and
changing lifestyle provide UNSP a very attractive IMFL opportunity to
capitalize on, in our view. Reiterate our positive stance; we believe UNSP is
a multi-year consumer story backed by superior management and
dominant market share. Maintain Buy with a DCF-based target price of
INR4,250. Adverse taxation policies of states constitute the key risk.
Exhibit 1: DCF derived target price of INR4,250
INR m 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
EBITDA 7,890 11,385 14,471 19,068 24,031 32,064 42,211 54,329 68,473
Other income 2,750 3,025 3,328 3,660 4,026 4,429 4,872 5,359 5,895
Tax -2,762 -1,240 -3,122 -4,481 -6,171 -8,155 -11,166 -14,855 -19,176
WC change 14,591 1,527 -1,649 -2,670 -3,868 -5,091 -4,957 -8,512 -6,618
Capex -6,000 -4,000 -4,000 -4,000 -4,000 -4,000 -4,000 -4,000 -4,000
FCF 16,469 10,697 9,028 11,578 14,018 19,248 26,960 32,321 44,574
PV of each FCF 16,469 9499 7290 8,501 9,359 11,686 14,884 16,226 20348
Sum of PV of FCF 114,236
Terminal value 1,189,682
PV of terminal value 543,085
EV 657,321
Net debt 40,063
Equity value 617,258
No of shares 145
Per share value (INR) 4,247
Source: Company, MOSL

3. United Spirits
20 April 2015 3
Key charts
Exhibit 2: Premium portfolio contribution up 200bp YoY
Mn cases 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15
Prestige & above 6.87 7.4 7.92 7.44 8.21 7.76 8.9 8.13 8.4 9.2 9.4
Regular & below 24.4 21.1 24.66 23.93 23.13 20.34 22.5 21.63 18.7 20.5 21.5
Total 31.3 28.5 32.6 31.8 31.4 28.1 31.4 29.76 27.1 29.7 30.9
Salience (%)
Prestige & above 22.0% 26.0% 24.3% 23.7% 26.2% 27.6% 28.3% 27.3% 31.0% 31.0% 30.4%
Regular & below 78.0% 74.0% 75.7% 76.3% 73.8% 72.4% 71.7% 72.7% 69.0% 69.0% 69.6%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Source: Company, MOSL
Exhibit 3: Material cost/case grew 26% YoY
Source: MOSL, Company
Exhibit 4: UNSP pays highest packaging cost (INR/case) in the
industry
Source: MOSL, Company
Exhibit 5: Key operating metrics
1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15
Volume Growth % 1.9 -1.0 7.1 4.0 0.2 -1.1 -3.7 4.0 -13.0 5.8 -1.8
Material cost/case 387 499 396 341 401 434 358 381 416 441 452
Sales Volume (m Cases) 31.3 28.4 32.7 31.4 31.3 28.1 31.5 29.4 27.1 29.7 30.9
EBIDTA/Case (INR) 107 89 75 67 89 73 65 31 48 71 67
Realization/case (INR) 658 782 665 595 685 726 710 652 704 726 740
Realization growth % 4 25 4 -3 4 -7 7 10 3 0 4
Ad spend (% sales) 8.3 7.7 10.2 10.3 9.4 10.4 11.5 10.3 11.5 9.2 10.0
Source: Company, MOSL
401
434
358
381
416
441 452
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
Material cost/case (INR)
101
127
142
155 159
81
92
103
94
121123
77
92
137
129
FY10 FY11 FY12 FY13 FY14
United Spirits Radico Khaitan Tilaknagar

4. United Spirits
20 April 2015 4
Story in charts
Exhibit 6: Whisky forms bulk of the IMFL market…
Source: Company, Industry MOSL
Exhibit 7: …With nearly 2/3rd value contribution
Source: Company, Industry, MOSL
Exhibit 8: UNSP enjoys 41% volume market share in IMFL
Source: Company, Industry, MOSL
Exhibit 9: IMFL industry expected to post healthy double digit value CAGR
INR m 2013 2014 2015E 2016E 2017E CAGR %
Spirits 994.7 1,110.3 1,227.2 1,345.8 1,463.7 12.5
Brandy and Cognac 164.2 185.8 207.8 229.7 250.5 13.7
Rum 115.1 125.0 134.6 144.4 154.8 9.7
Whiskies 666.9 745.1 824.2 904.6 984.7 13.3
Gin 6.9 6.8 6.7 6.7 6.6 3.3
Vodka 41.5 47.5 53.8 60.4 67.1 25.0
Source: Industry Sources, Company, MOSL
Exhibit 10: Per capita consumption remains low
Source: Company, MOSL
Exhibit 11: Urban markets constitute 2/3
rd
of IMFL industry
Note: Consumption in mn liters Source: Company, MOSL
Whisky
59%
Brandy
22%
Rum
15%
White
Spirits
4%
IMFL Market (in volume terms)
Whisky
66%
Brandy
16%
Rum
15%
White
Spirits
3%
IMFL Market (in value terms)
41.6 42.1 42.3 42.6 41.6 41.0
6.4 6.9 7.5 8.4 9.0 9.7
38.6 37.1 35.9 32.4 33.1 32.4
2007 2008 2009 2010 2011 2012
UNSP Pernod Ricard ABD Jagajit Radico Others
9.5
8.5
5 4.7 4.5 4.6
0.9
Russia Brazil Thailand USA UK World India
Per Capita consumption (litres per annum)
68 68 68 66 65
32 32 32 34 35
2009 2010 2011 2012 2013
Urban (%) Rural (%)
1,444 1,618 1,798 1,920 1,990

5. United Spirits
20 April 2015 5
Exhibit 12: EBITDA margin (S/L) has deteriorated sharply
Source: Company, MOSL
Exhibit 13: Consolidated working capital expanded
significantly
Source: Company, MOSL
Exhibit 14: UNSP EBITDA per case (INR terms) lower than smaller domestic peers
Source: Company, MOSL
Exhibit 15: UNSP versus Diageo India – product pricing comparison
Source: Company, MOSL
5.2 5.6 5.5
10.2
15.7
18.8
15.3 15.7 15.1
12.6 12.5
9.1
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
EBIDTA Margin (%)
49.9
47.3
54.4
51.6
41.1
35.4
43.8
FY08 FY09 FY10 FY11 FY12 FY13 FY14
NWC/Sales (%)
81.0
71.5
77.2
85.8
79.0
84.3
63.4
76.2
84.5
100.0
101.0
106.6
112.8
94.6
70.1
70.4
93.4
92.8
97.0
101.0
104.4
FY08 FY09 FY10 FY11 FY12 FY13 FY14
United Spirits Tilaknagar Industries Radico Khaitan
280 280
720 725 920 1,300 1,400 1,700
4,100
4,950
6,050
Bagpiper Director's
Special
Signature Royal
Challenge
Antiquity
Blue
VAT 69 Black&
White
Johnnie
WalkerRed
Label
Johnnie
WalkerBlack
Label
Talisker Johnnie
WalkerGold
Label
Price for 750ml (INR)
United Spirits
Diageo

6. United Spirits
20 April 2015 6
Financials and valuations
Income Statement (INR Million)
Y/E March 2010 2011 2012 2013 2014 2015E 2016E 2017E
Net Sales 58,530 68,586 86,372 98,524 99,116 80,674 91,980 106,437
Other Operating Inc 5,093 5,175 5,493 5,591 5,894 5,961 6,841 7,542
Total Revenue 63,623 73,762 91,865 104,115 105,009 86,635 98,820 113,979
Change (%) 16.4 15.9 24.5 13.3 0.9 -17.5 14.1 15.3
EBITDA 11,123 10,653 10,603 10,037 8,711 7,890 11,385 14,471
Margin (%) 17.5 14.4 11.5 9.6 8.3 9.1 11.5 12.7
Depreciation -950 -1,023 -1,474 -1,784 -2,026 -1,472 -1,642 -1,809
Int. and Fin. Charges -6,069 -4,985 -7,773 -8,861 -12,771 -5,410 -3,306 -2,413
Other Income - Recurring 849 904 2,106 1,446 7,550 2,750 3,025 3,328
Profit before Taxes 4,952 5,549 3,461 838 1,463 3,759 9,461 13,577
Tax 1,932 2,098 1,481 1,781 2,762 1,240 3,122 4,481
Tax Rate (%) 39.0 37.8 42.8 212.4 188.8 33.0 33.0 33.0
Minority Interest -4.9 -11.9 -7.2 -38.3 3.1 0 0 0
Adjusted PAT 3,026 3,463 1,988 -904 -1,302 2,518 6,339 9,097
Change (%) 61.4 14.5 -42.6 -145.5 44.1 -293.4 151.7 43.5
Margin (%) 4.8 4.7 2.2 -0.9 -1.2 2.9 6.4 8.0
Non-rec. (Exp)/Income -3,253 2,238 -108 -108 -43,589 0 0 0
Reported PAT -227 5,701 1,880 -1,012 -44,891 2,518 6,339 9,097
Balance Sheet (INR Million)
Y/E March 2010 2011 2012 2013 2014 2015E 2016E 2017E
Share Capital 1,207 1,259 1,259 1,259 1,453 1,453 1,453 1,453
Reserves 36,529 40,527 45,359 46,614 28,869 31,385 37,721 46,815
Minority Interest 85 175 146 111 7 7 7 7
Net Worth 37,820 41,961 46,764 47,984 30,330 32,845 39,181 48,275
Loans 58,504 67,107 75,231 72,517 81,563 41,563 36,063 30,063
Deffered Tax Liabilities -715 -325 -592 -589 -967 -905 -749 -525
Capital Employed 95,610 108,743 121,403 119,911 110,927 73,504 74,496 77,814
Gross Block 23,745 26,972 29,620 31,026 35,317 31,317 35,317 39,317
Less: Accum. Depn. -6,493 -7,573 -9,432 -10,721 -13,413 -14,884 -16,527 -18,335
Net Fixed Assets 17,251 19,399 20,188 20,305 21,905 16,433 18,791 20,982
Capital WIP 943 1,291 1,080 1,312 1,097 1,097 1,097 1,097
Goodwill 42,444 44,320 58,618 58,386 35,099 20,099 20,099 20,099
Investments 1,265 1,544 2,358 2,179 2,380 2,380 2,380 2,380
Foregin Monetary term 1,413 - - - - - - -
Curr. Assets, L&A 49,490 61,842 75,729 82,059 87,129 68,535 72,263 78,932
Inventory 17,462 21,168 27,548 25,112 29,351 22,549 23,013 28,104
Account Receivables 13,401 14,825 17,737 24,170 22,652 18,751 21,389 23,420
Cash and Bank 3,189 4,944 2,690 1,115 1,063 1,500 1,500 1,500
Bank Deposit 4,497 1,426 942 1,701 5,984 3,187 3,348 2,487
Others 10,940 19,479 26,812 29,960 28,078 22,549 23,013 23,420
Curr. Liab. and Prov. 17,644 20,102 36,570 44,330 36,683 35,040 40,133 45,676
Account Payables 10,280 13,304 16,792 15,653 14,267 13,055 16,244 18,736
Other Liabilities 4,516 5,026 17,328 24,864 16,275 15,428 17,598 20,298
Provisions 2,848 1,771 2,451 3,812 6,141 6,557 6,291 6,642
Net Current Assets 31,846 41,741 39,159 37,729 50,447 33,495 32,130 33,256
Msc Expenses 448 448 - - (1)
Application of Funds 95,610 108,742 121,403 119,911 110,927 73,504 74,496 77,814
E: MOSL Estimates

7. United Spirits
20 April 2015 7
Financials and valuations
Ratios
Y/E March 2010 2011 2012 2013 2014 2015E 2016E 2017E
Basic (INR)
EPS 25.8 28.3 16.2 -7.4 -9.0 17.3 43.6 62.6
Cash EPS 32.9 36.7 28.3 7.2 5.0 27.5 54.9 75.0
BV/Share 313.4 342.8 382.0 392.0 208.7 226.0 269.6 332.2
DPS 2.5 2.5 2.5 2.5 2.5 0.0 0.0 0.0
Payout % 9.7 8.8 15.4 -33.9 -27.9 0.0 0.0 0.0
Valuation (x)
Market Price 3,670 3,670 3,670 3,670 3,670 3,670 3,670 3,670
P/E 142.2 129.7 226.0 -497.1 -409.7 211.8 84.1 58.6
Cash P/E 111.4 100.1 129.8 510.4 736.6 133.7 66.8 48.9
EV/Sales 6.8 7.3 6.0 5.3 5.3 6.0 5.2 4.4
EV/EBITDA 44.7 50.8 51.9 54.7 64.1 65.6 45.0 35.0
P/BV 11.7 10.7 9.6 9.4 17.6 16.2 13.6 11.0
Dividend Yield (%) 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0
Return Ratios (%)
RoE 9.8 8.7 4.5 -1.9 -3.3 8.0 17.6 20.8
RoCE 11.5 9.7 9.3 8.1 12.8 12.5 17.1 20.5
Working Capital Ratios
Debtor (Days) 77 73 70 85 79 79 79 75
Asset Turnover (x) 0.7 0.7 0.8 0.9 0.9 1.2 1.3 1.5
Leverage Ratio
Debt/Equity (x) 1.5 1.6 1.6 1.5 2.7 1.3 0.9 0.6
Cash Flow Statement (INR Million)
Y/E March 2010 2011 2012 2013 2014 2015E 2016E 2017E
OP/(loss) before Tax 4,952 5,549 3,461 838 1,463 3,759 9,461 13,577
Int./Div. Received -849 -904 -2,106 -1,446 -7,550 -2,750 -3,025 -3,328
Interest Paid 6,069 4,985 7,773 8,861 12,771 5,410 3,306 2,413
Direct Taxes Paid -1,932 -2,098 -1,481 -1,781 -2,762 -1,240 -3,122 -4,481
Incr/Decr in WC -4,741 -11,211 -156 614 -8,487 14,591 1,527 -1,988
CF from Operations 3,500 -3,679 7,492 7,086 -4,564 19,769 8,148 6,195
Extraordinary Items -3,253 2,238 -108 -108 -43,589 0 0 0
(Incr)/Decr in FA 815 -5,452 -16,736 -1,406 19,211 19,000 -4,000 -4,000
(Pur)/Sale of Investments 8,236 -279 -814 179 -201 0 0 0
Msc Exp -285 0 -448 0 -1 1 0 0
CF from Invest. 5,513 -3,493 -18,106 -1,335 -24,580 19,001 -4,000 -4,000
Issue of Shares 14,494 -1,179 3,303 2,611 27,278 -3 -3 -3
(Incr)/Decr in Debt -19,532 8,603 8,124 -2,714 9,047 -40,000 -5,500 -6,000
Dividend Paid -366 -381 -379 -379 -41 0 0 0
Others -413 -1,186 -3,172 -6,085 -2,910 -1,127 1,517 2,947
CF from Fin. Activity -5,817 5,856 7,876 -6,568 33,375 -41,130 -3,986 -3,056
Incr/Decr of Cash 3,197 -1,316 -2,738 -816 4,231 -2,361 162 -861
Add: Opening Balance 4,490 7,686 6,370 3,632 2,816 7,047 4,687 4,848
Closing Balance 7,687 6,370 3,632 2,816 7,047 4,687 4,848 3,987
E: MOSL Estimates

8. United Spirits
20 April 2015 8
Financials and valuations
Corporate profile: United Spirits
Exhibit 17: Shareholding pattern (%)
Dec-14 Sep-14 Dec-13
Promoter 58.9 58.9 37.3
DII 4.2 3.9 4.9
FII 24.4 24.2 41.4
Others 12.5 13.1 16.4
Note: FII Includes depository receipts
Exhibit 18: Top holders
Holder Name % Holding
Morgan Stanley Asia (Singapore) PTE 2.6
USL Benefit Trust 2.4
Carmignac Gestion A/C Carmignac Patrimoine 1.5
Clsa (Mauritius) Ltd 1.5
Kotak Mahindra (International) Ltd 1.2
Exhibit 19: Top management
Name Designation
Vijay Mallya Chairman
Anand Kripalu Managing Director & CEO
Exhibit 20: Directors
Name Name
Vijay Mallya Ravi Rajagopal
Anand Kripalu Gilbert Ghostine
G N Bajpai* Nicholas Bodo Blazquez
Sudhakar Rao* P A Murali
D Sivanandhan* Indu Shahoni*
Vikram Singh Mehta* Rajeev Gupta*
Arunkumar Ramanlal Gandhi*
*Independent
Exhibit 21: Auditors
Name Type
BSR & Co LLP Statutory
Exhibit 22: MOSL forecast v/s consensus
EPS
(INR)
MOSL
forecast
Consensus
forecast
Variation
(%)
FY15 17.3 14.3 21.0
FY16 43.6 39.4 10.7
FY17 62.6 62.1 0.8
Company description
UNSP is the leading IMFL player, with 41% market
share by volume and 22 millionaire brands. It
services 64,000 outlets across India and 98% of the
on-and-off-premises network. It has manufacturing
and bottling presence in all states, with 40 owned
plants and 42 contract tie-ups.
Exhibit 16: Sensex rebased

9. United Spirits
20 April 2015 9
N O T E S

10. United Spirits
20 April 2015 10
N O T E S
Disclosures
This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company(ies) and/sector(s), if any, covered in the report and may be
distributed by it and/or its affiliated company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does
not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not
for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal
recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider
whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as
up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a
some companies covered by our Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or
its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this
material may educate investors on investments in such business. The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other
parties for the purpose of gathering, applying and interpreting information. Our research professionals are paid on the profitability of MOSt which may include earnings from investment banking and other business.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders,
and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary
trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing
among other things, may give rise to real or potential conflicts of interest. MOSt and its affiliated company(ies), their directors and employees and their relatives may; (a) from time to time, have a long or short position
in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation
or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with
respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations
made by the analyst(s) are completely independent of the views of the affiliates of MOSt even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as
such, may not match with a report on a company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set
of customers having various objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or
employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of
its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is
based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions
provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or
summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to
update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way
responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time,
any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on
this report or for any necessary explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any
compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities
mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the
report.
Motilal Oswal Securities Limited is under the process of seeking registration under SEBI (Research Analyst) Regulations, 2014.
There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be
directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation
of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement UNITED SPIRITS
§ Analyst ownership of the stock No
§ Served as an officer, director or employee No
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In
addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the
United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or
intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning
agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL,
and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to
accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Anosh Koppikar Kadambari Balachandran
Email : anosh.Koppikar@motilaloswal.com Email : kadambari.balachandran@motilaloswal.com
Contact : (+65)68189232 Contact : (+65) 68189233 / 65249115
Office Address : 21 (Suite 31),16 Collyer Quay,Singapore 04931
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com