2 December 2021

ECOSCOPE
The Economy Observer
Government spends only a third of targeted capex in 1HFY22
Aggregate fiscal deficit at 8% of GDP in 1HFY22
 Based on the monthly accounts of 18 states (together accounting for ~87% of all states), the total receipts of all states
surged 21.4% YoY in 2QFY22, leading to growth of 24.8% YoY in 1HFY22. On the contrary, the total spending by states
grew relatively slower by 16.8% YoY last quarter, implying growth of 16.2% YoY in 1HFY22. Consequently, on an
aggregate level, states’ fiscal deficit stood at 40.2% of BE in 1HFY22 – this was lower than 55.6% of BE (44.4% of
provisional estimates) in 1HFY21, but higher than the average of 36.5% of BEs (44% of actuals) in the first halves of FY18
to FY20.
 States’ total taxes grew 22.8% YoY in 2QFY22, supported by a favorable base (down 10.4% YoY in 2QFY21). States’ own
non-tax revenue receipts grew at a strong pace, but ‘grants from the center’ grew slowly by 7.2% YoY in 2QFY22, despite
a highly favorable base (of -22.1% YoY in 1QFY22). Within states’ own taxes, ‘stamp duty and registration charges’ grew
by more than half in 2QFY22, with 3x/2x the collections in Telangana (TS) / Haryana (HR).
 Capital spending by states grew 58.5% YoY in 2QFY22 on a 32% YoY contraction in 2QFY21. Revenue spending by states
grew 12.2% YoY in 2QFY22 v/s growth of 10% YoY in 1QFY22 and decline of 7.6% YoY in 2QFY21.
 A look at individual states suggests Odisha (OD) was the only state to post a fiscal surplus of 27% of FY22BE in 1HFY22,
with Jharkhand (JH) recording a very small deficit. On the other extreme, Kerala (KL) posted a fiscal deficit of 123.1% of
FY22BE in 1HFY22, followed by Andhra Pradesh (AP) / Bihar (BH) at 107.8%/106% of BE. Among the large states –
Karnataka (KA), Maharashtra (MH), and Tamil Nadu (TN) – fiscal deficit stood at just 20–23% of FY22BE in 1HFY22.
 Combining the finances of states for 2QFY22 with those of the central government suggests that the total receipts by the
general government grew 29.4% YoY in 2QFY22 on the back of a 19% YoY contraction in 2QFY21. The combined spending
(adjusted for ‘grants from the center’ to states) grew 20% YoY in 2QFY22, after declining 11% YoY in 2QFY21. While capex
grew 55%/52% YoY in 2Q/1HFY22 on a low base, it was just one-third of FY22BE in 1HFY22.
 Adjusted for the base effect, the total spending by the general government in 1HFY22 came in just 11% YoY higher than
in 1HFY20, implying a CAGR of just 5%. This was despite total receipts having grown at a CAGR of 8% over the
corresponding period. The capex CAGR was better at 8%.
 Due to relatively weaker spending growth, the fiscal deficit of the general government was just 36.8% of 1HFY22 BEs vis-
à-vis an all-time high of 89% in 1HFY21 and an average of 68% in the preceding three years. Assuming 16% YoY growth in
nominal GDP in 2FY22, the fiscal deficit stands at 8% of GDP in 1HFY22, lower than 15% of GDP in 1HFY21 and 8.4% of
GDP in the preceding three years.

On an aggregate level, total
receipts by states grew
21.4% YoY, but spending
grew slowly by 16.8% YoY in
2QFY22
In this note, we analyze the finances of 18 states that have published their fiscal
accounts data up to Sep’21. These include Andhra Pradesh (AP), Bihar (BH),
Chhattisgarh (CT), Gujarat (GJ), Haryana (HR), Himachal Pradesh (HP), Jharkhand
(JH), Karnataka (KA), Kerala (KL), Madhya Pradesh (MP), Maharashtra (MH), Odisha
(OD), Punjab (PB), Rajasthan (RJ), Tamil Nadu (TN), Telangana (TS), Uttar Pradesh
(UP), and Uttarakhand (UK). Together, these 18 states account for 87% of the total
spending by all states cumulatively.
States’ receipts grew strongly in 2QFY22…: On an aggregate basis, the total receipts
of all states grew 21.4% YoY in 2QFY22, following average growth of 17.1% YoY in
1HCY21 and a contraction of 15.1% YoY in 2QFY21 (v/s -15.8% YoY in 1QFY21). This
indicates the favorable base effect is still aiding high growth in the total receipts of
states. (Exhibit 1; please see Exhibit 14 in Appendix 1 at the end of the report for
state-wise details on total receipts.)

Nikhil Gupta – Research analyst (Nikhil.Gupta@MotilalOswal.com)

Yaswi Agrawal – Research analyst (Yaswi.Agrawal@MotilalOswal.com)
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.
 …but total spending grew relatively slower last quarter: Total expenditure grew
16.8% YoY in 2QFY22 on a contraction of 10.7% YoY in 2QFY21. Relatively, spending
grew slowly vis-à-vis average growth of 19.5% YoY in 1HCY21. (Exhibit 1; please see
exhibit 17 in Appendix 1 at the end of the report for state-wise details on total
spending.)

The aggregate fiscal deficit
of all states stood lower at
40.2% of FY22BE in 2QFY22
States’ aggregate fiscal deficit stood at 40% of BE in 2QFY22: As a result of still
higher growth in receipts vis-à-vis total spending, the aggregate fiscal deficit of all
states stood at 40.2% of FY22BE, far lower than 55.6% of BE (44.4% of provisional
estimates) in 1HFY21. However, it came in higher than the average of 36.5% of BEs
(44% of actuals) in the three years before COVID-19 (Exhibit 2).

Exhibit 1: States’ receipts grew slower, but spending grew Exhibit 2: The aggregate fiscal deficit was lower at 40.2% of
faster in 2QFY22 BE in 1HFY22 v/s 1HFY21, but higher v/s pre-COVID years
Total receipts Total spending Fiscal deficit of all states (% of BEs)
40
(% YoY)
55.6
21.4
25 42.9
37.9 37.4 39.1 40.2
16.8 33.2 33.1
10 30.2
19.8
16.0
-5

-20
Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 1HFY12 1HFY14 1HFY16 1HFY18 1HFY20 1HFY22

Aggregate data for all states based on monthly data of 18 states Source: Comptroller and Auditor General (CAG), CEIC, MOFSL

While states’ own receipts
grew slowly by 30% YoY,
transfers from the center
grew just 10.4% YoY in
2QFY22
As the base effect wanes, tax collection grows slowly in 2QFY22: While tax
collections by states surged 22.8% YoY in 2QFY22, this was far lower than the
growth of 43.1% YoY seen in 1QFY22. This indicates the waning of the favorable
base effect (tax collections declined 10.4% YoY in 2QFY21 v/s a 30.7% contraction in
1QFY21). However, states’ own non-tax receipts grew faster by >50% in 2QFY22,
against 40.4% YoY in 1QFY22. Excluding states’ own receipts, transfers by the central
government (devolution to states + grants-in-aid) grew 10.4% YoY in 2QFY22, once
again supported by a 22.3% fall in 2QFY21 (Exhibits 3, 4).

Exhibit 3: Tax collections by states grew at a much slower Exhibit 4: …leading to slower overall growth in states’ own
pace in 2QFY22 v/s 1QFY22… tax receipts during the quarter
Tax Non-tax Grants-in-aid States' own receipts Transfer from center
130 135
(% YoY)
(% YoY)
90
80
53.1
45
30 22.8 29.8
7.2 0
10.4
-20
-45

-70 -90
Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21

Aggregate data for all states based on monthly data of 18 states Source: CEIC, CAG, State Budget Documents, MOFSL

2 December 2021 2
 Within states’ own taxes, ‘stamp duty and registration charges’ grew by more than half
last quarter, with all states showing growth (except OD, which saw massive decline in
2QFY22). TS and HR were the flagbearers of this sharp growth. Overall growth in ‘stamp
duty and registration charges’ was higher than total 18 states’ growth in eight states –
TS, HR, MH, CT, KL, KA, UK, and BH. (Exhibit 5; please see Exhibit 15-16 in Appendix 1 at
the end of the report for state-wise details on receipt components.)

Exhibit 5: State collections of ‘stamp duty & registration charges’ grew by more than 50%
in 2QFY22, with TS and HR leading the pack
Stamp duty & registration charges 18 states
250
(% YoY)
180

110

40

(30)

(100)
TS HR MH CT KL KA UK BH JH TN GJ AP MP UP HP RJ PB OD
Source: MGNREGA, MOFSL

Capex for all states
continued to grow strongly
by 58.5% YoY in 2QFY22 on
the back of a 31.6% YoY
contraction in 2QFY21
The total spending by states grew 16.8% YoY in 2QFY22: Contrary to the total
receipts, states’ total spending grew relatively slower (vis-à-vis receipts) at 16.8%
YoY in 2QFY22. Within the total spend, capex for all states continued to grow
strongly by 58.5% YoY in 2QFY22 (albeit lower than in 1QFY22) on the back of a
31.6% YoY contraction in 2QFY21. Revenue spending also grew 12.2% YoY in
2QFY22, against growth of just 10% YoY in 1QFY22, on account of 7.6% YoY decline
in 2QFY21. (Exhibit 6; please see Exhibit 18-19 in Appendix 1 for state-wise details
on revenue and capital spending.)

Exhibit 6: Capital spending continued to grow sharply (due Exhibit 7: …and most of the revenue expenditure also saw
to the base effect) in 2QFY22… higher growth in 2QFY22
Revenue spending Capital spending (% YoY) 2QFY21 2QFY22
150 25.4
(% YoY)
15.4
100
7.4 6.3 7.0
50 58.5

(2.4) (0.3)
0 12.2

(13.1)
-50
Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 Interest Salary & wages* Subsidy* Pension

Aggregate data for all states based on monthly data of 18 states *Data for 16 states, excluding KA and TN
Source: CEIC, CAG, state budget documents, MOFSL

Further details on revenue spending suggest interest payments were the only
component that grew slower in 2QFY22 v/s 2QFY21. Other items such as salaries
and wages, subsidies, and pensions grew at exceptionally higher rates in 2QFY22,
especially after witnessing a contraction in 2QFY21. (Exhibit 7; please refer to Exhibit
20-22 in Appendix 1 at the end of the report for state-wise details.)

2 December 2021 3
 OD was the only state to
post fiscal surplus in
1HFY22, while KL, AP, and
BH have already exceeded
their full-year targets
Exhibit 8: The fiscal deficit of states in 1QFY22 – OD was the only state with surplus in 1HFY22 (% of BE)
(% of BEs)
20 21 21
4 40
(27)
OD JH KA MH UK
Total receipts by the
general government posted
a two-year CAGR of 8.3%,
while the spending CAGR
stood at just 5% in 1HFY22
Despite strong capex
growth in 1HFY22, this was
just one-third of the full-
year target, slower than the
average of 37.4% of BEs
during pre-COVID years
2 December 2021
OD ran a fiscal surplus in 1HFY22; all other states exhibited a deficit, with KL, AP,
and BH already exceeding FY22BEs: The cumulative fiscal deficit of all states stood
at 40.2% of FY22BE. A look at individual states suggests OD was the only state to
post a fiscal surplus of 27% of FY22BE in 1HFY22, led by surplus seen in 1Q/2QFY22.
Furthermore, the fiscal deficit in JH came in at just 4.3% of FY22BE in 1H. On the
other extreme, KL posted a fiscal deficit of 123.1% of FY22BE in 1HFY22 (74.4% of BE
in 1Q and 48.7% of BE in 2QFY22), followed by AP and BH at 107.8%/106% of BE in
1HFY22. Among the other large states – KA, MH, and TN – fiscal deficit in 1HFY22
stood at just 20–23% of FY22BE (Exhibit 8), dragging down the states’ aggregate
fiscal deficit.
Fiscal deficit in 1HFY22 Fiscal Deficit in 2QFY22
123
106 108
56 60
43 43 43
24 29 32
23
TN HP GJ UP PB CT HR MP TS RJ BH AP KL
Source: CEIC, CAG, state budget documents, MOFSL
Key lessons from the combined finances of the center and state governments:
When we combine the finances of the central government for 2QFY22 with those of
the states, we arrive at five key takeaways:
1) While total receipts by the general government (adjusted for ‘grants from the
center’ to states) grew 29.4% YoY in 2QFY22, after contracting 19% YoY in
2QFY21 (Exhibit 9). Adjusted for the base effect, total receipts by the general
government posted a two-year CAGR of 8.3% in 1HFY22 (over 1HFY20).
2) Total spending, on the other hand, grew 20% YoY in 2QFY22, supported by a
contraction of 11% YoY in 2QFY21. While spending by both states and the center
grew faster sequentially, the difference in spending growth was high for the
central government at 21.2% YoY in 2QFY22 (v/s 0.7% YoY in 1QFY22). Adjusted
for the base effect, total spending by the general government in 1HFY22 was
just 11% YoY higher than in 1HFY20, implying a CAGR of just 5% (Exhibit 9).
3) Revenue spending by the government grew just 15.3% YoY in 2QFY22 (following
growth of 6.4% YoY in 2QFY21) and capital spending (including loans and
advances) grew 55.1% YoY in 2QFY22, vis-à-vis marginally lower growth of 48.3%
YoY a quarter ago (Exhibit 10). Adjusted for the base effect, the two-year
revenue / capital spending CAGR stood at 5%/8% in 1HFY22.
4) Furthermore, as a percentage of BEs, despite strong capex growth in 1HFY22, it
was just one-third of the full-year target, slower than the average of 37.4% of
BEs during pre-COVID years (1HFY18–1HFY20).
4
Exhibit 9: While total receipts grew slowly, spending grew Exhibit 10: …and capex growth continued to outpace revex
faster in 2QFY22… in 2QFY22, although both grew faster last quarter
Total receipts Total spending Revenue spending Capital outlay
150 80
(% YoY) (% YoY)

100 40

50 0

0 (40)

(50) (80)
2QFY17 2QFY18 2QFY19 2QFY20 2QFY21 2QFY22 2QFY17 2QFY18 2QFY19 2QFY20 2QFY21 2QFY22

(Center + states) adjusted for ‘grants from the center’ to states Source: CEIC, CAG, state budget documents, MOFSL

The fiscal deficit of the
general government
was 8% of GDP in
1HFY22 vis-à-vis 15%
of GDP in 1HFY21
5) Overall, as a result of exceptionally strong growth in receipts in 1HFY22 (58.9%
YoY v/s contraction of 26.2% YoY in 1HFY21), but relatively weaker spending
growth (14.1% YoY in 1HFY22 v/s -2.9% YoY in 1HFY21), the fiscal deficit of the
general government was only 36.8% of BEs in 1HFY22. This was compared with
an all-time high of 89% of BE in 1HFY21, far lower than the average of 68% of BE
in the three years before COVID (FY18–20) (Exhibit 11). Assuming 16% YoY
growth in nominal GDP in 2FY22, the fiscal deficit stands at 8% of GDP in
1HFY22, lower than 15% of GDP in 1HFY21 and 8.4% of GDP in the preceding
three years (Exhibit 12).

Exhibit 11: Combined fiscal deficit was only 37% of BEs… Exhibit 12: …or 8% of GDP* in 1HFY22
(% of BEs) Fiscal deficit of GG (% of GDP) Fiscal deficit of GG

88.7

69.9 69.1 14.7

66.7 65.2 64.9
55.8 52.1 57.3 55.0
8.6 9.2 8.7 8.4 8.7
8.4 8.1 8.0 8.0
36.8 7.4

1HFY12 1HFY14 1HFY16 1HFY18 1HFY20 1HFY22 1HFY12 1HFY14 1HFY16 1HFY18 1HFY20 1HFY22

General government (GG) = Center + states *Assuming 16% YoY nominal GDP growth in 1HFY22
Source: CEIC, CAG, state budget documents, MOFSL

2 December 2021 5
Appendix I
Exhibit 13: Details of fiscal accounts of the center and 18 state governments in 2QFY22 v/s 2QFY21
Fiscal deficit
Total receipts Total spending Capital spending
YoY %, unless specified (% of BE)
2QFY22 2QFY21 2QFY22 2QFY21 2QFY22 2QFY21 2QFY22 2QFY21
Andhra Pradesh (AP) 43.2 (35.4) 5.4 3.2 (38.3) (41.9) 37.9 59.1
Bihar (BH) (16.9) 201.1 (0.6) (16.6) 47.4 (39.7) 29.1 6.7
Chhattisgarh (CT) 27.4 (13.5) 22.1 (10.7) 11.7 48.4 19.1 18.9
Gujarat (GJ) 32.2 (26.9) 11.8 (0.4) 11.9 33.8 20.2 34.2
Haryana (HR) 12.8 (26.5) 45.0 (41.0) (92.1) (129.6) 14.2 (0.8)
Himachal Pradesh (HP) 12.4 (9.4) 9.9 (0.8) 55.3 (47.9) 17.8 18.4
Jharkhand (JH) 5.3 (15.9) 8.4 (15.7) 36.9 (66.5) 24.9 19.2
Karnataka (KA) 34.1 (28.5) 27.1 (14.5) 10.2 17.6 13.0 13.5
Kerala (KL) 26.6 (8.8) 40.1 (6.4) 14.6 32.0 48.7 28.3
Madhya Pradesh (MP) 26.2 (3.1) 24.2 (13.2) 100.4 (29.0) 19.8 16.9
Maharashtra (MH) 38.2 (29.1) 8.4 (7.4) 92.3 (49.9) 18.4 38.7
Odisha (OD) 28.3 (11.8) 13.0 (17.7) 45.8 (29.2) (16.9) 0.2
Punjab (PB) (3.4) 14.7 21.7 2.1 450.6 (3.9) 34.0 13.1
Rajasthan (RJ) 15.8 (11.5) 8.5 0.5 91.1 (15.4) 29.1 31.6
Tamil Nadu (TN) 16.7 (23.0) 12.8 (15.7) 75.3 (35.7) 12.4 12.3
Telangana (TS) 22.5 (8.2) 30.4 (6.3) 45.3 11.3 27.9 18.3
Uttar Pradesh (UP) 25.5 (12.2) 33.5 (17.7) 172.5 (59.5) 18.5 9.8
Uttarakhand (UK) 31.3 (14.0) 9.5 (12.4) 71.5 (27.8) 6.6 22.2
18 states 22.6 (14.5) 18.0 (10.8) 62.1 (32.0) 20.6 20.1
All states 21.4 (15.1) 16.8 (10.7) 58.5 (31.6) 19.7 24.9
Central government 34.0 (24.8) 21.2 (13.5) 51.9 (37.7) 16.8 31.6
General government# 29.4 (19.0) 20.0 (11.0) 55.1 (34.9) 17.8 28.6
#Central government + all state governments

Exhibit 14: Total state-wise receipts in 2QFY22 (YoY %)

Total receipts (% YoY) All states
43
38
31 32 34
25 26 27 27 28
23

12 13
5 16 17

(3)
(17)
BH PB JH HP HR RJ TN TS UP MP KL CT OD UK GJ KA MH AP

Exhibit 15: Total tax receipts (including devolution) of states in 2QFY22 (YoY %)
Total taxes (% YoY) All states
41
38 38
28 29 30 30 30
23 25 25
18 20
13
10
7
3

(6)
BH PB JH OD TN RJ UP KL UK KA MP TS HP CT HR GJ MH AP

2 December 2021 6
Exhibit 16: ‘Grants from the center’ to states in 2QFY22 (YoY %)

Grants from the center (% YoY) All states 85

79
53
36 38
23 23 23
1 8

(22) (21) (20) (20)

(32) (30)
(51) (50)

TS HR BH CT JH OD RJ PB HP GJ KL MP MH UK TN AP KA UP

Exhibit 17: Total expenditure by states in 2QFY22 (YoY %)

Total spending (% YoY) All states 45

40
33
30
27
22 22 24

12 13 13
8 8 9 9 10
5

(1)
BH AP MH JH RJ UK HP GJ TN OD PB CT MP KA TS UP KL HR

Exhibit 18: Revenue spending by states in 2QFY22 (YoY %)

Revenue spending (% YoY) All States

43

31 32
27
22 24

12 12
8 9 9
4 5 6 6
1 3

(4)
BH RJ UK MH TN HP JH PB AP OD GJ MP UP CT TS HR KA KL

Exhibit 19: Capital spending by states in 2QFY22 (YoY %)

Capital spending (% YoY) All states 451

172
71 75 91 92 100
37 45 46 47 55
10 12 12 15

(38)
(92)
HR AP KA CT GJ KL JH TS OD BH HP UK TN RJ MH MP UP PB
Source: CEIC, CAG, state budget documents, MOFSL

2 December 2021 7
Exhibit 20: Salaries and wages by states in 2QFY22 (YoY %)
Salary & wages (% YoY) 16 states

76

26
7 12 13
1 2 6 6

(2) (2) (1) (1) (1) (0)

(23)
UK MH BH HP OD MP PB HR GJ RJ AP UP JH CT TS KL
Source: CEIC, CAG, state budget documents, MOFSL

Exhibit 21: Pension payments by states in 2QFY22 (YoY %)

Pension (% YoY) 18 states 555

298

7 12 12 13 17 18 34 35
1 2 3 4

(7) (2) (1) (0)

TN KA BH HR UK GJ CT HP RJ PB UP JH MP OD KL MH AP TS
Source: CEIC, CAG, state budget documents, MOFSL

Exhibit 22: Subsidy payments by states in 2QFY22 (YoY %)

Subsidy (% YoY) 16 states

602 645

73 99 108 115
25 31 37 63 67
16

-45 -31 -6 -3

MH BH UK GJ TS RJ KL HR PB AP UP JH HP MP CT OD
Source: CEIC, CAG, state budget documents, MOFSL

2 December 2021 8
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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 www.nseindia.com, www.bseindia.com. Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to subject company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal 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
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only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction
where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in
Hong Kong.

For U.S:
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
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defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.

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The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.

For Singapore:
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore,
as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110)
provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this
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Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.

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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
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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.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law
Tribunal, Mumbai Bench.

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