McLeod Russel (MCLRUS)
Company Update March 26, 2012 Rating matrix
McLeod Russel (MCLRUS)
Rating
:
Buy
Target
:
| 305
Target Period
:
12-15 months
Potential Upside
:
16 %
| 262 WHAT’S CHANGED… PRICE TARGET....................................................................... Changed from | 260 to | 305
Key Financials FY10
FY11
FY12E
FY13
EPS (FY12E)........................................................................................................Unchanged
1,106.2
1,241.2
1,170.3
1,285.1
EBITDA
367.0
343.0
398.6
469.8
EPS (FY13E)......................................................................... Changed from | 28.9 to | 30.3
Net Profit
230.9
226.6
274.0
331.8
21.1
20.7
25.0
30.3
| Crore Net Sales
EPS (|)
200 150
Valuation
FY10
FY11
FY12E
P/E
12.4
12.7
10.5
8.6
Target P/E
14.3
14.6
12.1
10.0
FY13E
EV / EBITDA
8.8
9.2
7.8
6.4
Price to Book Value
2.1
1.9
1.6
1.4
RoNW(%)
16.9
14.9
15.5
16.0
RoCE (%)
19.1
17.0
18.4
19.9
Stock data Debt (FY11)
| 2868 crore | 316 crore
Cash (FY11)
| 31 crore
EV
| 3153 crore
52 week H/L
290 / 166
Equity capital
| 54.7 Crore
Face value
|5
MF Holding (%)
7.7
FII Holding (%)
32.2
Price movement 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Apr-11
Positive outlook for industry to aid realisation… McLeod Russel (MCL), the largest tea producer of India, is expected to record higher earnings (FY13E) on the back of improving tea prices led by increasing demand and shortfall in global tea production. MCL would benefit from a decline in production in Kenya and Sri Lanka that would boost export demand from India, thereby supporting better realisations. Further, the company’s bid for tea gardens in Uganda would aid MCL’s volume sales (increase by ~5.5 mkg) in the coming years. Hence, we are revising our target price, maintaining a BUY rating on the stock. Higher domestic realisations Tea production in India in CY11 stood at 988.3 million kg (mkg) (expected was ~1000 mkg) against 966.4 mkg in CY10, an increase of almost 2.3%. Consumption during the period increased at a higher rate of ~3.5%. Hence, higher demand on the back of dry weather in the North East impacting production, lower carryover stock (exhausted by February, 2012) and higher cumulative deficit in the system (~50 mkg) led tea realisations to be higher by ~60-80/kg (good quality tea) and ~10-15/kg (blended realisation) in CY11. Going ahead, with demand expected to remain robust (domestic and export), tea realisation for CY12 would further increase by ~20-25/kg. Acquisition in Rwanda to boost volumes MCL has bid for two tea gardens in Rwanda that could increase the yield from Rwanda for the company to ~7 mkg (current production is ~2 mkg). With margins from Rwanda gardens being higher at ~50% compared to MCL’s margins at ~28%, we believe the acquisition would contribute notably to MCL’s earnings. Further, with funding for the acquisition to be through internal accruals there would not be any pressure on interest payments, hence protecting the bottomline.
Valuation summary
Market Capitalisation
RATING...............................................................................................................Unchanged
300 250
100 50 Jul-11 Sep-11 Dec-11 Mar-12 Price (R.H.S) Nifty (L.H.S)
Analyst’s name Sanjay Manyal [email protected] Parineeta Poddar [email protected]
At the CMP, the stock is trading at 10.5x and 8.6x its FY12E and FY13E EPS of | 25.1 and | 30.3, respectively. With realisations set to improve, we expect earnings to perk up. Hence, we have valued the stock at 10x its FY13E EPS, arriving at a target price of | 305, with a BUY rating. Exhibit 1: Financial Performance (| Crore)
FY09
FY10
FY11
FY12E
FY13E
Net Sales
828.9
1106.2
1241.2
1170.3
1285.1
EBITDA margin (%)
25.3
33.2
27.6
34.1
36.6
Depreciation
32.7
32.3
38.2
39.7
53.7
Interest
52.1
29.6
29.1
27.2
19.7
Other Income
26.9
34.9
32.9
34.3
36.0
Reported PAT
85.6
233.7
226.6
274.0
331.8
7.8
21.1
20.7
25.0
30.3
EPS (|)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Exhibit 2: Tea production in India
Exhibit 3: Tea realisation for domestic tea producers
Tea Production (mkg)
Exports (mkg)
Tea Prices (|/kg)
Export Price (|/kg)
2010
2011
2010
2011
Jan
94.8
97.3
140.8
149.5
11.9
Feb
87.0
88.4
142.7
137.8
11.9
Mar
75.4
78.2
129.8
161.0
12.8
11.4
Apr
84.5
96.4
118.0
138.1
11.2
11.3
May
98.6
107.4
115.8
141.3
2010
2011
2010
2011
Jan
27.1
20.9
17.1
15.8
Feb
18.0
16.7
13.4
Mar
49.0
56.7
23.5
Apr
68.2
73.0
May
72.6
76.2
June
104.0
114.7
12.8
12.3
June
102.5
110.2
130.8
144.3
July
123.2
133.3
16.6
15.3
July
104.8
111.1
126.6
146.4
Aug
122.7
127.0
16.8
19.4
Aug
114.7
108.1
134.8
140.2
Sept
108.1
111.1
19.3
21.0
Sept
113.8
110.1
144.1
144.9
Oct
120.7
117.5
19.6
19.7
Oct
112.0
106.0
133.9
151.0
Nov
93.9
90.3
15.4
17.5
Nov
115.1
104.8
140.6
152.7
Source: Tea Board of India, ICICIdirect.com Research
Source: Tea Board of India, ICICIdirect.com Research
Exhibit 4: Global tea production Country
Jan till
2010
2011
India
Dec
966.4
988.3
2.3
723.0
747.5
3.4
-North India -South India
% Change
243.4
240.9
-1.0
In spite of higher tea production in the country, a shortfall in
Bangladesh
Dec
60.0
59.2
-1.5
production across the globe had led prices for the 2012
Kenya
Dec
399.0
377.9
-5.3
season to open almost | 20-25/kg higher. We believe that
Rwanda
Mar
7.1
6.2
-12.7
MCL would largely benefit from these higher prices, being the largest tea producer in the country
Indonesia
Nov
67.0
56.3
-16.0
Malawi
Dec
51.6
47.1
-8.7
Sri Lanka
Dec
331.4
328.3
-0.9
Uganda
Oct
47.2
40.3
-14.7
Tanzania
Nov
29.3
30.0
2.5
Zimbabwe
Sept
10.5
10.3
-2.5
1969.6
1943.8
-1.3
Nove
1273.0
1350.0
6.0
Total China (Green Tea)
Source: India Tea Association, ICICIdirect.com Research
Revising estimates Led by higher realisations expected in FY13E on the back of increasing consumption demand (domestic and global) and a favourable global tea industry scenario, we are revising our FY13 estimates for MCL. Exhibit 5: Revising estimates (| crore) FY12E Revenue
FY13E Previous
Revised
% change
1,170.3
1258.1
1285.1
2.1
398.6
447.6
469.8
5.0
34.1
35.6
36.6
2.7
274.0
316.8
331.8
4.7
25.0
28.9
30.3
4.7
EBITDA EBITDA Margin (%) PAT EPS (|)
Source: Company, ICICIdirect.com Research
Exhibit 6: Valuation metrics Sales
Growth
EPS
Growth
PE
EV/EBITDA
RoNW
(| cr)
(%)
(|)
(%)
(x)
(x)
(%)
(%)
FY11
1241.2
12.2
20.7
-1.9
12.7
9.2
14.9
17.0
FY12E
1170.3
-5.7
25.0
20.9
10.5
7.8
15.5
18.4
FY13E
1285.1
9.8
30.3
21.1
8.6
6.4
16.0
19.9
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 2
RoCE
Exhibit 7: Profit & loss statement (Year-end March) Total operating Income Growth (%) Raw Material Expenses Employee Expenses Marketing Expenses Administrative Expenses Other expenses Total Operating Expenditure EBITDA Growth (%) Depreciation Interest Other Income PBT Others Total Tax PAT Growth (%) EPS (|)
Exhibit 8: Cash flow statement FY10 1,106.2 33.5 91.3 365.8 9.9 70.7 236.3 774.1 367.0 264.0 32.3 29.6 0.0 305.1 0.0 71.4 233.7 172.9 21.1
FY11 1,241.2 12.2 103.7 425.3 58.9 0.0 343.3 931.1 343.0 -6.5 38.2 29.1 14.5 290.2 0.0 63.6 226.6 -3.0 20.7
FY12E 1,170.3 -5.7 7.7 459.7 30.4 15.1 293.0 805.9 398.6 16.2 39.7 27.2 8.7 340.4 0.0 66.4 274.0 20.9 25.0
(| Crore) FY13E 1,285.1 9.8 108.0 512.0 51.4 0.0 179.9 851.3 469.8 17.8 53.7 19.7 23.6 420.0 0.0 88.2 331.8 21.1 30.3
(Year-end March) Profit after Tax Add: Depreciation (Inc)/dec in Current Assets Inc/(dec) in CL and Provisions Others CF from operating activities (Inc)/dec in Investments (Inc)/dec in Fixed Assets Others CF from investing activities Issue/(Buy back) of Equity Inc/(dec) in loan funds Dividend paid & dividend tax Inc/(dec) in Sec. premium Others CF from financing activities Net Cash flow Opening Cash Closing Cash
FY11 290.2 38.2 -83.9 -13.4 -62.9 168.1 0.0 -23.6 0.0 -23.6 0.0 -85.8 -54.7 0.0 -9.3 -149.8 -5.3 52.6 31.2
FY12E 340.4 39.7 -81.9 -83.1 -66.4 148.7 0.0 -68.5 0.0 -68.5 0.0 -60.2 -21.9 0.0 -3.7 -85.8 -5.7 31.2 25.5
(| Crore) FY13E 420.0 53.7 -203.6 -5.0 -88.2 176.9 0.0 -50.0 0.0 -50.0 0.0 -80.0 -21.9 0.0 -3.7 -105.6 21.3 25.5 46.8
FY10
FY11
FY12E
FY13E
21.1 24.0 125.2 4.7 1.0
20.7 24.2 138.5 5.8 0.6
25.0 28.7 161.2 2.3 0.5
30.3 35.2 189.2 2.3 0.9
33.2 27.6 21.1 26.0 8.9 46.7
27.6 23.4 18.3 28.1 6.5 42.5
34.1 29.1 23.4 35.0 11.0 40.0
36.6 32.0 25.8 45.0 25.0 25.0
16.9 19.1 12.4
14.9 17.0 11.0
15.5 18.4 13.8
16.0 19.9 14.7
12.4 8.8 2.9 2.6 2.1
12.7 9.2 2.5 2.3 1.9
10.5 7.8 2.6 2.5 1.6
8.6 6.4 2.3 2.2 1.4
0.3 1.1 1.1 0.9
0.2 0.9 1.3 1.2
0.1 0.6 2.1 2.0
0.1 0.4 3.1 2.9
FY10 305.1 32.3 -26.1 -2.4 -19.2 289.7 -142.3 -51.9 -23.3 -242.0 0.0 23.9 -16.2 -42.1 -1.5 -35.9 8.9 38.8 52.6
Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research
Exhibit 9: Balance sheet
Exhibit 10: Ratio analysis
(Year-end March) Liabilities Equity Capital Reserve and Surplus Total Shareholders funds Total Debt Deferred Tax Liability Minority Interest / Others Total Liabilities
FY10
FY11
FY12E
(| Crore) FY13E
54.7 1,315.4 1,370.1 402.1 71.6 0.0 1,843.8
54.7 1,461.8 1,516.5 316.3 72.3 0.0 1,905.0
54.7 1,710.2 1,764.9 256.0 72.3 0.0 2,093.2
54.7 2,016.4 2,071.1 176.0 72.3 0.0 2,319.4
Assets Gross Block Less: Acc Depreciation Net Block Capital WIP Total Fixed Assets Investments Inventory Debtors Loans and Advances Other Current Assets Cash Total Current Assets Creditors Provisions Total Current Liabilities Net Current Assets Others Assets Application of Funds
2,271.0 507.5 1,763.5 16.6 1,780.0 35.0 80.0 27.3 137.0 64.5 52.6 361.4 143.4 189.2 332.7 28.7 0.0 1,843.8
2,291.0 545.7 1,745.3 21.5 1,766.8 33.6 96.8 22.4 215.7 57.8 31.2 423.9 146.4 172.8 319.3 104.6 0.0 1,905.0
2,361.0 585.4 1,775.6 20.0 1,795.6 33.6 113.8 35.8 227.6 97.5 25.5 500.1 130.0 106.1 236.1 264.0 0.0 2,093.2
2,411.0 639.1 1,771.9 20.0 1,791.9 33.6 160.6 89.2 303.4 124.9 46.8 725.0 89.2 141.9 231.1 493.9 0.0 2,319.4
(Year-end March) Per share data (|) EPS Cash EPS BV DPS Cash Per Share Operating Ratios (%) EBITDA Margin PBT / Total Operating income PAT Margin Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE RoIC Valuation Ratios (x) P/E EV / EBITDA EV / Net Sales Market Cap / Sales Price to Book Value Solvency Ratios Debt/EBITDA Debt / Equity Current Ratio Quick Ratio
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 3
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps / midcaps, respectively, with high conviction; Buy: > 10%/ 15% for large caps / midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more; Pankaj Pandey Head – Research [email protected] ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No. 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected] ANALYST CERTIFICATION We /I, Sanjay Manyal M.B.A. (FINANCE) Parineeta Poddar M.B.A. (FINANCE) research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
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ICICI Securities Ltd | Retail Equity Research
Page 4
McLeod Russel (MCLRUS)
Rating
:
Buy
Target
:
| 305
Target Period
:
12-15 months
Potential Upside
:
16 %
| 262 WHAT’S CHANGED… PRICE TARGET....................................................................... Changed from | 260 to | 305
Key Financials FY10
FY11
FY12E
FY13
EPS (FY12E)........................................................................................................Unchanged
1,106.2
1,241.2
1,170.3
1,285.1
EBITDA
367.0
343.0
398.6
469.8
EPS (FY13E)......................................................................... Changed from | 28.9 to | 30.3
Net Profit
230.9
226.6
274.0
331.8
21.1
20.7
25.0
30.3
| Crore Net Sales
EPS (|)
200 150
Valuation
FY10
FY11
FY12E
P/E
12.4
12.7
10.5
8.6
Target P/E
14.3
14.6
12.1
10.0
FY13E
EV / EBITDA
8.8
9.2
7.8
6.4
Price to Book Value
2.1
1.9
1.6
1.4
RoNW(%)
16.9
14.9
15.5
16.0
RoCE (%)
19.1
17.0
18.4
19.9
Stock data Debt (FY11)
| 2868 crore | 316 crore
Cash (FY11)
| 31 crore
EV
| 3153 crore
52 week H/L
290 / 166
Equity capital
| 54.7 Crore
Face value
|5
MF Holding (%)
7.7
FII Holding (%)
32.2
Price movement 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Apr-11
Positive outlook for industry to aid realisation… McLeod Russel (MCL), the largest tea producer of India, is expected to record higher earnings (FY13E) on the back of improving tea prices led by increasing demand and shortfall in global tea production. MCL would benefit from a decline in production in Kenya and Sri Lanka that would boost export demand from India, thereby supporting better realisations. Further, the company’s bid for tea gardens in Uganda would aid MCL’s volume sales (increase by ~5.5 mkg) in the coming years. Hence, we are revising our target price, maintaining a BUY rating on the stock. Higher domestic realisations Tea production in India in CY11 stood at 988.3 million kg (mkg) (expected was ~1000 mkg) against 966.4 mkg in CY10, an increase of almost 2.3%. Consumption during the period increased at a higher rate of ~3.5%. Hence, higher demand on the back of dry weather in the North East impacting production, lower carryover stock (exhausted by February, 2012) and higher cumulative deficit in the system (~50 mkg) led tea realisations to be higher by ~60-80/kg (good quality tea) and ~10-15/kg (blended realisation) in CY11. Going ahead, with demand expected to remain robust (domestic and export), tea realisation for CY12 would further increase by ~20-25/kg. Acquisition in Rwanda to boost volumes MCL has bid for two tea gardens in Rwanda that could increase the yield from Rwanda for the company to ~7 mkg (current production is ~2 mkg). With margins from Rwanda gardens being higher at ~50% compared to MCL’s margins at ~28%, we believe the acquisition would contribute notably to MCL’s earnings. Further, with funding for the acquisition to be through internal accruals there would not be any pressure on interest payments, hence protecting the bottomline.
Valuation summary
Market Capitalisation
RATING...............................................................................................................Unchanged
300 250
100 50 Jul-11 Sep-11 Dec-11 Mar-12 Price (R.H.S) Nifty (L.H.S)
Analyst’s name Sanjay Manyal [email protected] Parineeta Poddar [email protected]
At the CMP, the stock is trading at 10.5x and 8.6x its FY12E and FY13E EPS of | 25.1 and | 30.3, respectively. With realisations set to improve, we expect earnings to perk up. Hence, we have valued the stock at 10x its FY13E EPS, arriving at a target price of | 305, with a BUY rating. Exhibit 1: Financial Performance (| Crore)
FY09
FY10
FY11
FY12E
FY13E
Net Sales
828.9
1106.2
1241.2
1170.3
1285.1
EBITDA margin (%)
25.3
33.2
27.6
34.1
36.6
Depreciation
32.7
32.3
38.2
39.7
53.7
Interest
52.1
29.6
29.1
27.2
19.7
Other Income
26.9
34.9
32.9
34.3
36.0
Reported PAT
85.6
233.7
226.6
274.0
331.8
7.8
21.1
20.7
25.0
30.3
EPS (|)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Exhibit 2: Tea production in India
Exhibit 3: Tea realisation for domestic tea producers
Tea Production (mkg)
Exports (mkg)
Tea Prices (|/kg)
Export Price (|/kg)
2010
2011
2010
2011
Jan
94.8
97.3
140.8
149.5
11.9
Feb
87.0
88.4
142.7
137.8
11.9
Mar
75.4
78.2
129.8
161.0
12.8
11.4
Apr
84.5
96.4
118.0
138.1
11.2
11.3
May
98.6
107.4
115.8
141.3
2010
2011
2010
2011
Jan
27.1
20.9
17.1
15.8
Feb
18.0
16.7
13.4
Mar
49.0
56.7
23.5
Apr
68.2
73.0
May
72.6
76.2
June
104.0
114.7
12.8
12.3
June
102.5
110.2
130.8
144.3
July
123.2
133.3
16.6
15.3
July
104.8
111.1
126.6
146.4
Aug
122.7
127.0
16.8
19.4
Aug
114.7
108.1
134.8
140.2
Sept
108.1
111.1
19.3
21.0
Sept
113.8
110.1
144.1
144.9
Oct
120.7
117.5
19.6
19.7
Oct
112.0
106.0
133.9
151.0
Nov
93.9
90.3
15.4
17.5
Nov
115.1
104.8
140.6
152.7
Source: Tea Board of India, ICICIdirect.com Research
Source: Tea Board of India, ICICIdirect.com Research
Exhibit 4: Global tea production Country
Jan till
2010
2011
India
Dec
966.4
988.3
2.3
723.0
747.5
3.4
-North India -South India
% Change
243.4
240.9
-1.0
In spite of higher tea production in the country, a shortfall in
Bangladesh
Dec
60.0
59.2
-1.5
production across the globe had led prices for the 2012
Kenya
Dec
399.0
377.9
-5.3
season to open almost | 20-25/kg higher. We believe that
Rwanda
Mar
7.1
6.2
-12.7
MCL would largely benefit from these higher prices, being the largest tea producer in the country
Indonesia
Nov
67.0
56.3
-16.0
Malawi
Dec
51.6
47.1
-8.7
Sri Lanka
Dec
331.4
328.3
-0.9
Uganda
Oct
47.2
40.3
-14.7
Tanzania
Nov
29.3
30.0
2.5
Zimbabwe
Sept
10.5
10.3
-2.5
1969.6
1943.8
-1.3
Nove
1273.0
1350.0
6.0
Total China (Green Tea)
Source: India Tea Association, ICICIdirect.com Research
Revising estimates Led by higher realisations expected in FY13E on the back of increasing consumption demand (domestic and global) and a favourable global tea industry scenario, we are revising our FY13 estimates for MCL. Exhibit 5: Revising estimates (| crore) FY12E Revenue
FY13E Previous
Revised
% change
1,170.3
1258.1
1285.1
2.1
398.6
447.6
469.8
5.0
34.1
35.6
36.6
2.7
274.0
316.8
331.8
4.7
25.0
28.9
30.3
4.7
EBITDA EBITDA Margin (%) PAT EPS (|)
Source: Company, ICICIdirect.com Research
Exhibit 6: Valuation metrics Sales
Growth
EPS
Growth
PE
EV/EBITDA
RoNW
(| cr)
(%)
(|)
(%)
(x)
(x)
(%)
(%)
FY11
1241.2
12.2
20.7
-1.9
12.7
9.2
14.9
17.0
FY12E
1170.3
-5.7
25.0
20.9
10.5
7.8
15.5
18.4
FY13E
1285.1
9.8
30.3
21.1
8.6
6.4
16.0
19.9
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
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RoCE
Exhibit 7: Profit & loss statement (Year-end March) Total operating Income Growth (%) Raw Material Expenses Employee Expenses Marketing Expenses Administrative Expenses Other expenses Total Operating Expenditure EBITDA Growth (%) Depreciation Interest Other Income PBT Others Total Tax PAT Growth (%) EPS (|)
Exhibit 8: Cash flow statement FY10 1,106.2 33.5 91.3 365.8 9.9 70.7 236.3 774.1 367.0 264.0 32.3 29.6 0.0 305.1 0.0 71.4 233.7 172.9 21.1
FY11 1,241.2 12.2 103.7 425.3 58.9 0.0 343.3 931.1 343.0 -6.5 38.2 29.1 14.5 290.2 0.0 63.6 226.6 -3.0 20.7
FY12E 1,170.3 -5.7 7.7 459.7 30.4 15.1 293.0 805.9 398.6 16.2 39.7 27.2 8.7 340.4 0.0 66.4 274.0 20.9 25.0
(| Crore) FY13E 1,285.1 9.8 108.0 512.0 51.4 0.0 179.9 851.3 469.8 17.8 53.7 19.7 23.6 420.0 0.0 88.2 331.8 21.1 30.3
(Year-end March) Profit after Tax Add: Depreciation (Inc)/dec in Current Assets Inc/(dec) in CL and Provisions Others CF from operating activities (Inc)/dec in Investments (Inc)/dec in Fixed Assets Others CF from investing activities Issue/(Buy back) of Equity Inc/(dec) in loan funds Dividend paid & dividend tax Inc/(dec) in Sec. premium Others CF from financing activities Net Cash flow Opening Cash Closing Cash
FY11 290.2 38.2 -83.9 -13.4 -62.9 168.1 0.0 -23.6 0.0 -23.6 0.0 -85.8 -54.7 0.0 -9.3 -149.8 -5.3 52.6 31.2
FY12E 340.4 39.7 -81.9 -83.1 -66.4 148.7 0.0 -68.5 0.0 -68.5 0.0 -60.2 -21.9 0.0 -3.7 -85.8 -5.7 31.2 25.5
(| Crore) FY13E 420.0 53.7 -203.6 -5.0 -88.2 176.9 0.0 -50.0 0.0 -50.0 0.0 -80.0 -21.9 0.0 -3.7 -105.6 21.3 25.5 46.8
FY10
FY11
FY12E
FY13E
21.1 24.0 125.2 4.7 1.0
20.7 24.2 138.5 5.8 0.6
25.0 28.7 161.2 2.3 0.5
30.3 35.2 189.2 2.3 0.9
33.2 27.6 21.1 26.0 8.9 46.7
27.6 23.4 18.3 28.1 6.5 42.5
34.1 29.1 23.4 35.0 11.0 40.0
36.6 32.0 25.8 45.0 25.0 25.0
16.9 19.1 12.4
14.9 17.0 11.0
15.5 18.4 13.8
16.0 19.9 14.7
12.4 8.8 2.9 2.6 2.1
12.7 9.2 2.5 2.3 1.9
10.5 7.8 2.6 2.5 1.6
8.6 6.4 2.3 2.2 1.4
0.3 1.1 1.1 0.9
0.2 0.9 1.3 1.2
0.1 0.6 2.1 2.0
0.1 0.4 3.1 2.9
FY10 305.1 32.3 -26.1 -2.4 -19.2 289.7 -142.3 -51.9 -23.3 -242.0 0.0 23.9 -16.2 -42.1 -1.5 -35.9 8.9 38.8 52.6
Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research
Exhibit 9: Balance sheet
Exhibit 10: Ratio analysis
(Year-end March) Liabilities Equity Capital Reserve and Surplus Total Shareholders funds Total Debt Deferred Tax Liability Minority Interest / Others Total Liabilities
FY10
FY11
FY12E
(| Crore) FY13E
54.7 1,315.4 1,370.1 402.1 71.6 0.0 1,843.8
54.7 1,461.8 1,516.5 316.3 72.3 0.0 1,905.0
54.7 1,710.2 1,764.9 256.0 72.3 0.0 2,093.2
54.7 2,016.4 2,071.1 176.0 72.3 0.0 2,319.4
Assets Gross Block Less: Acc Depreciation Net Block Capital WIP Total Fixed Assets Investments Inventory Debtors Loans and Advances Other Current Assets Cash Total Current Assets Creditors Provisions Total Current Liabilities Net Current Assets Others Assets Application of Funds
2,271.0 507.5 1,763.5 16.6 1,780.0 35.0 80.0 27.3 137.0 64.5 52.6 361.4 143.4 189.2 332.7 28.7 0.0 1,843.8
2,291.0 545.7 1,745.3 21.5 1,766.8 33.6 96.8 22.4 215.7 57.8 31.2 423.9 146.4 172.8 319.3 104.6 0.0 1,905.0
2,361.0 585.4 1,775.6 20.0 1,795.6 33.6 113.8 35.8 227.6 97.5 25.5 500.1 130.0 106.1 236.1 264.0 0.0 2,093.2
2,411.0 639.1 1,771.9 20.0 1,791.9 33.6 160.6 89.2 303.4 124.9 46.8 725.0 89.2 141.9 231.1 493.9 0.0 2,319.4
(Year-end March) Per share data (|) EPS Cash EPS BV DPS Cash Per Share Operating Ratios (%) EBITDA Margin PBT / Total Operating income PAT Margin Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE RoIC Valuation Ratios (x) P/E EV / EBITDA EV / Net Sales Market Cap / Sales Price to Book Value Solvency Ratios Debt/EBITDA Debt / Equity Current Ratio Quick Ratio
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
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RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps / midcaps, respectively, with high conviction; Buy: > 10%/ 15% for large caps / midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more; Pankaj Pandey Head – Research [email protected] ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No. 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected] ANALYST CERTIFICATION We /I, Sanjay Manyal M.B.A. (FINANCE) Parineeta Poddar M.B.A. (FINANCE) research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
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