CCL Products (India) Ltd. BUY

Index Details Sensex

22,277

Nifty

6,675

BSE 100

6,696

Industry

Tea & Coffee

Scrip Details Mkt Cap (` cr) BVPS (`)

705.7 24.0

O/s Shares (Cr)

13.2

Av Vol (Lacs)

3.1

52 Week H/L

61/22

Div Yield (%)

0.9

FVPS (`)

2.0

CMP `53.0

FY16 PE 6.3x

The 15,000 tonne capacity greenfield expansion in Vietnam is expected to be the future growth driver for CCL Products (India) Ltd (CCL). This is owing to the fact that the Vietnam plant has started operating at a time when the Indian plant is already operating at an optimum capacity utlisation of 88-90%. We expect an incremental volume growth of ~5,000 tonnes and ~7,000 tonnes in FY15E and FY16E, respectively from the Vietnam plant. In addition to volume growth, this strategy of setting up a plant in Vietnam provides a slew of locational advantages such as savings on freight costs (~$150/tonne), ample and faster access to raw materials leading to lower lead time, potential for further penetration into ASEAN countries, favorable duty structure (Vietnam has a most favored nation status with most countries) and income tax incentives.

Shareholding Pattern Shareholders

%

Promoters

44.5

DIIs

9.7

FIIs

4.4

Public

41.4

Total

100.0 CCL. vs. Sensex

Against this backdrop, we expect CCL’s consolidated revenue to grow at a 14.4% CAGR over FY13-16E to `974.6 crore by FY16E from `650.7 crore in FY13. Moreover, we expect the EBITDA and PAT to grow faster at CAGRs of 15.8% and 32.9%, respectively, over FY13-16E, owing to logistics linked savings and tax exemption in Vietnam. We initiate coverage on CCL Products (India) Ltd (CCL) as a BUY with a Price Objective of `79.5, representing an upside potential of ~49.9% over the next 24 months. At the CMP of `53.0, the stock is trading at 7.9x and 6.3x its FY15E and FY16E earnings, respectively.  Greenfield Operations in Vietnam to spur growth We expect CCL’s consolidated revenue to grow at a 14.4% CAGR over FY13-16E to `974.6 crore by FY16E from `650.7 crore in FY13 on the back of:

Key Financials (` in Cr) Net Y/E Mar EBITDA Revenue 2013 650.7 123.7 2014E 707.8 137.7 2015E 857.3 169.6 2016E 974.6 192.0

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PAT

EPS

47.4 56.8 88.9 111.3

3.6 4.3 6.7 8.4

EPS Growth (%) 30.9 19.7 56.6 25.2

RONW (%) 17.0 16.7 21.1 21.2

ROCE (%) 20.7 21.4 24.4 25.1

P/E (x) 14.9 12.4 7.9 6.3

EV/EBITDA (x) 8.1 7.2 5.9 5.2

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STOCK POINTER

Target Price `79.5

a) Incremental volumes from the new greenfield facility at Vietnam (~5,000 tonnes and ~7,000 tonnes in FY15E and FY16E, respectively) and b) Steady volume contribution (~13,500-14,000 tonnes per annum) from the Indian unit. Moreover, apart from volume growth, the Vietnam plant is also strategically located and has advantages such as a) savings on freight costs (~$150/tonne), b) ample and faster access to raw materials leading to a lower lead time and c) a favorable duty structure. We remain confident of the company meeting our volume targets on the back of strong order book visibility (current orders equivalent to ~40-50% of total production i.e. ~12,000-15,000 tonnes).

 EBITDA & PAT to grow faster than the top-line While the revenues are expected to grow at 14.4% CAGR over FY13-16E, we expect the EBITDA and PAT to grow faster on account of: a) Savings on logistics at the Vietnam plant and b) Tax exemptions in Vietnam (the Vietnam plant is exempt from paying income tax for the first 4 years of operations in Vietnam, followed by 5 years of 50% exemption).

 Valuation We initiate coverage on CCL Products (India) Ltd (CCL) as a BUY with a Price Objective of `79.5, representing an upside potential of ~49.9% over the next 24 months. At the CMP of `53.0, the stock is trading at 7.9x and 6.3x its FY15E and FY16E earnings, respectively. Historically, the company has traded at an average P/E of 12x its one year forward earnings. We have assigned a target multiple of 9.5x (~21% discount to the average P/E) to its FY16E earnings. With capex in place, CCL’s Vietnam plant is expected to positively contribute to the consolidated revenues of the company going forward. Moreover, robust demand for instant coffee coupled with better scope for penetration in the global markets and the company’s expertise in this segment makes a strong case for investment in the company. Moreover, the company has a consistent dividend paying track record which again makes a strong case for investment for the medium-to-long term.

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 Company Background CCL Products (India) Ltd (CCL) is India’s largest private label instant coffee company supplying to premium brands in ~80 countries. CCL is not only India’s largest coffee processor, it has one of the world’s largest single location plants and is amongst the top 3 private label global instant coffee manufacturers. CCL Products' state-of-the-art Soluble Instant Coffee Manufacturing Plant (Export Oriented Unit) is located at Duggirala Mandal, Guntur District, Andhra Pradesh, India. Through its subsidiaries, the company has also set up an agglomeration plant in Switzerland (to penetrate Europe) and a spray dried and concentrated liquid coffee plant in Vietnam. The Vietnam facility is expected to be the growth driver for the next couple of years. CCL’s Company Profile

Source: CCL, Ventura Research

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 Key Investment Highlights  Greenfield Operations in Vietnam to spur growth While the plant in India is expected to contribute steadily to CCL’s top-line (owing to peak capacity utilisation), output from the Vietnam plant is expected to spur incremental growth over FY13-FY16E. We expect CCL’s consolidated revenue to grow at a 14.4% CAGR over FY13-16E to `974.6 crore by FY16E from `650.7 crore in FY13 on the back of: a) Incremental volumes from new greenfield facility at Vietnam (~5,000 tonnes and ~7,000 tonnes in FY15E and FY16E, respectively) and b) Steady volume contribution (~13,500-14,000 tonnes per annum) from the Indian unit. We remain confident of the company meeting our volume targets on the back of strong order book visibility (current orders equivalent to ~40-50% of total production i.e. ~12,000-15,000 tonnes). Total Revenue to grow at 14.4% CAGR 1200

Total capacity utilisation to improve 35000

Rs.Crore

In tonnes

83%

30000

1000

25000

800

100% 87%

90%

77% 70%

80% 70%

61%

63%

20000

60%

48%

50%

600 400

15000

40%

10000

30% 20%

200

5000

0

0

FY10

FY11

FY12

FY13

Source: CCL, Ventura Research

FY14E

FY15E

FY16E

10% 0%

FY10 FY11 Total Capacity

FY12 FY13 FY14E FY15E FY16E Total Production % Utilisation (RHS)

Source: CCL, Ventura Research

Newly commissioned Vietnam unit to fuel growth over the next couple of years CCL recently commissioned (in Apr 2013) its greenfield project of 10,000 MT for manufacturing instant coffee in Vietnam at a total investment of $50 mn. In addition, it also shifted its 5,000 MT liquid coffee plant from India to Vietnam at the total cost of ~$10 mn. We believe that the company is in the final stages of its capex cycle. With this plant going on stream, we believe that the company is best placed to cater to the global and domestic instant coffee demand from its clients and further - 4 of 16 -

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penetrate ASEAN countries. The strategic location of its Vietnam facility will lead to the following advantages:

a) Logistical advantage Owing to the plant location in coffee producing zone (Vietnam), the unit is likely to save ~$150/tonne on the logistics front. As a result, we expect the company to save ~`10.6 crore and `14.8 crore in FY15E and FY16E, respectively on freight costs alone. Saving p.a. from Vietnam Unit

Capacity Utilisation (%) 33.3% 46.7% 80% FY15E FY16E 150 150 150 5,000 7,000 12,000 2.39 2.39 2.39 1.8 2.5 4.3 59.0 59.0 59.0 10.6 14.8 25.4

Particulars Per tonne saving ($) Tonnes sold p.a. Conversion factor Savings ($ mn) Rxchange Rate (Rs/$) Savings p.a. (Rs cr) Source: CCL, Ventura Research

b) Strategic Location The plant is located in Vietnam’s Dak Lak Province, which is the highest green coffee producing area in Vietnam. As a result, the plant will have easy access to raw materials, thereby reducing the lead time to a great extent (1-1.5 months). Moreover, the presence in Vietnam will help the company to cater to the coffee needs of nearby ASEAN countries. Robusta production on the move in Vietnam 70,000 '000 60 bags

50% 43%

60,000 42%

35%

50,000

Province wise (in Vietnam) Green coffee Production

40%

40%

35%

45%

DONG NAI 2%

GIA LAI 13%

35% 30%

40,000

25%

30,000

20%

20,000

15%

DAK LAK 41%

DAKNON G 15%

10%

10,000

5%

0

0%

FY10

FY11

FY12

Robusta Production

FY13

FY14E

LAM DONG 29%

Vietnam as a % of Total

*2011-12 crop season

Source: CCL, Ventura Research

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Source: CCL, Ventura Research

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c) Beneficial Duty Structure Most of CCL’s export markets have granted Vietnam most favoured nation status with reduced or nil duty structures. For example, instant coffee exports to Japan from Brazil and India attract effective duties of ~15% and ~6% while it is only ~1% (effective from 1st April, 2014) in the case of Vietnam. This, in our opinion, will ensure that the company’s products are competitive in the export market. Also, this price advantage should help the company to tap new markets (ASEAN countries) in the long term. This coupled with increasing global coffee consumption, should help the company spur volumes at its Vietnam plant. Summing up, we expect this plant to comfortably clock ~5,000 tonnes and ~7,000 tonnes for FY15E and FY16E, respectively. Assuming firm Robusta prices, we expect the Vietnamese unit to contribute ~`239 crore and ~`339 crore to the company’s top-line in FY15E and FY16E, respectively. Forecasted Revenues & OPM (%) from Vietnam 350

Rs.Crore

300

21.7%

Capacity, Production and Utilization (%) 16000 In tonnes

50%

47%

14000

21.6%

21.6%

45% 40%

12000

35%

33%

250

21.6%

200

21.5%

8000

25%

21.5%

6000

20%

21.4%

4000

150

21.4%

100 50

21.4%

0

21.3%

FY15E Revenue

FY16E EBITDA % (RHS)

Source: CCL, Ventura Research

10000

30%

15%

10%

2000

5%

0

0%

FY15E Total Capacity

FY16E Total Production

% Utilisation (RHS)

Source: CCL, Ventura Research

Indian operations to operate at an optimum capacity utilisation With 15,000 tonnes p.a. installed capacity (87% capacity utilisation in FY13) at its Guntur plant in Andhra Pradesh, CCL is expected to operate at an optimum capacity utilisation of 88-90% over FY14-16E. In our opinion, the company will be able to maintain the volumes over the forecasted period owing to: a) increasing global consumption of coffee (1.2% CAGR FY10-13), b) shift in consumer preference to instant coffee in the EMs (growing faster than the developed world) and c) long standing relationships with marquee clients across the globe.

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Production & Capacity utilisation (India) 16000 In tonnes

90%

87%

92%

94% 100% 90%

77%

14000

80%

83%

70%

12000

60% 10000

61%

50% 40%

8000

30%

20%

6000

10% 4000

0%

FY10

FY11

Total Capacity

FY12

FY13

FY14E FY15E FY16E

Total Production

% Utilisation (RHS)

Source: CCL, Ventura Research



Product Mix of India operations to gradually shift in favor of speciality products

With the commercial operations of the Vietnam facility now on stream, the company has crafted a strategy to shift bulk orders to the Vietnam facility, allowing it to focus on speciality products at its Indian unit. 

Foray into retailing of instant coffee to be beneficial in the long term

CCL has forayed into retailing of coffee under its own brands (Spéciale, Premium and Supreme) and has test marketed its products in Andhra Pradesh. We believe that the company is best placed to benefit from this foray in the long term as its competitors (Nestle and HUL) do not have manufacturing capacities (for freeze dried instant coffee). This translates into higher costs owing to very high import duty. For e.g. while Nestle’s pure coffee (freeze dried) is priced at `250/jar, CCL’s brand is priced at a relatively lower price of `110/jar. We expect the company to expand its reach in other states as well over the forecasted period. Against this back drop, we expect instant coffee volumes to grow at ~2.7% CAGR to ~14,100 mt per annum over FY14-16E. On the realisations front, the foray into the retailing sector is expected to improve realizations. However, we have cautiously not factored in the improvements as it is at a very nascent stage. We expect Robusta prices to be relatively stable owing to its rising demand. Accordingly, we expect revenues from the Indian unit to grow at 3.7% CAGR from `584.8 crore in FY13 to `651.4 crore by FY16E.

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Steady volumes expected for Indian unit 16000 In tonnes

Revenues and realisations from Indian unit 35.0%

Rs.Crore 700

14000

500 450 400 350 300 250 200 150 100 50 0

30.0%

600

12000

25.0%

500

10000

20.0%

400

8000

15.0%

6000

300 10.0%

4000

200

2000

5.0%

0

0.0%

FY09 FY10 FY11 FY12 FY13 FY14E FY15E FY16E Sales Volume

100 0

FY10

FY11

% Growth (RHS)

FY12

Sales

Source: CCL, Ventura Research

FY13

FY14E

FY15E

FY16E

Realisation (Rs/kg) RHS

Source: CCL, Ventura Research

 EBITDA & PAT to grow faster than the top-line While the revenues are expected to grow at 14.4% CAGR over FY13-16E, we expect EBITDA and PAT to grow faster on account of: c) Savings on the logistics front from the Vietnam plant (as discussed earlier) and d) Tax exemptions in Vietnam (the Vietnam plant is exempt from paying income tax for the first 4 years of operations in Vietnam followed by 5 years of 50% exemption). Savings owing to logistical advantage 16.0

Rs.Crore

Tax & Effective tax (%) 1.6%

35

14.0

1.4%

30

12.0

1.2%

25

10.0

1.0%

20

8.0

0.8%

15

6.0

0.6%

4.0

0.4%

2.0

0.2%

-

0.0% FY15E Savings p.a. (Rs cr)

Source: CCL, Ventura Research

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FY16E % of total sales (RHS)

40%

Rs.Crore

35% 30%

25% 20% 15%

10

10%

5

5%

0

0%

FY11

FY12 Tax

FY13

FY14E

FY15E

FY16E

Effective tax % (RHS)

Source: CCL, Ventura Research

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EBITDA growth over FY13-16E

PAT growth over FY13-16E

250 Rs.Crore

50%

45% 200

40% 35%

150

120

60%

Rs.Crore

50%

100

40% 80

30%

30%

25% 100

60

20%

20% 15%

50

10%

10%

40

0% 20

-10%

5% 0

0%

FY11

FY12

FY13

EBITDA

FY14E

FY15E

0

FY16E

-20% FY11

FY12

FY13

PAT

Growth % (RHS)

Source: CCL, Ventura Research

FY14E

FY15E

FY16E

Growth % (RHS)

Source: CCL, Ventura Research

Sourcing discipline ensures stable margins Moreover, as far as margins are concerned, the company remains unaffected by fluctuations in the green coffee beans prices or the coffee prices as it places orders for green coffee only on receiving the order for instant coffee and makes back-toback arrangements for green beans. In other words, CCL operates on fixed margins, without carrying the risk of coffee price volatility. In India, CCL buys green coffee beans by importing these (~75%) from Global markets (Vietnam, Indonesia, Africa countries) as well as the domestic market (~25%), primarily from Chikmagalur, Karnataka. Operating Profitability & Margins (%) 250

Rs.Crore

200

150 100

50 0

FY11

FY12

FY13

EBITDA

FY14E

FY16E

20%

400

20%

350

19%

300

19%

250

18%

200

18%

150

17%

100

17%

50

16%

0

43%

Rs.Crore

42% 41% 40% 39% 38% 37%

FY11

FY12 FY13 Gross Profit

FY14E FY15E FY16E Gross Margin % (RHS)

Margin % (RHS)

Source: CCL, Ventura Research

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FY15E

Gross Profit & Margins (%)

Source: CCL, Ventura Research

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Healthy Spreads over the period re-enforces our assumption of stable spread $ Per Kg

9.0

43%

8.0

42%

7.0

41%

6.0 5.0

40%

4.0

39%

3.0

38%

2.0

37%

1.0 0.0

36% FY11

FY12

FY13

FY14E

RM Cost of producing 1kg FG ($)

FY15E

FY16E

Margin ($)

Margin (%)

Source: CCL, Ventura Research

Coffee Industry In the world of coffee, there are two main contenders - Arabica & Robusta varieties of coffee. Robusta coffee is known for its earthy and strong flavors, while Arabica generally exhibits a sweeter profile, with fruity and zesty flavours as well as a strong 'Coffee' aroma. On the pricing front, Robusta tends to be a cheaper coffee for the end consumer to purchase due to the higher yields and the fact that it is more disease resistant. Over the years, the prices have dropped largely owing to the ample supply.

Arabica coffee price trend

Source: CCL, Ventura Research

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Mar-14

Dec-13

Jun-13

Sep-13

Mar-13

Dec-12

Jun-12

Sep-12

Mar-12

Dec-11

Jun-11

Mar-14

Dec-13

Jun-13

Sep-13

Mar-13

Dec-12

Jun-12

Sep-12

Mar-12

Jun-11

Dec-11

Colombian mild (New York)

Other mild (New York)

Sep-11

Brazilian naturals (New York)

Sep-11

Mar-11

Dec-10

Jun-10

Sep-10

Mar-10

Dec-09

Jun-09

Sep-09

Mar-09

0.0

Mar-11

1.0

Dec-10

2.0

Jun-10

3.0

Sep-10

4.0

Mar-10

5.0

Dec-09

6.0

Jun-09

7.0

$ Per Kg

Sep-09

3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0

$ per Kg

Mar-09

8.0

Robusta coffee price trend

Robusta (New York)

Source: CCL, Ventura Research

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Being the second most highly traded commodity in the world, Coffee is cultivated across 80 nations spanning Central and South America, Africa, and Asia. Brazil is the world’s largest producer of coffee (primarily growing Arabica) followed by Vietnam (primarily growing Robusta). The top five coffee producing nations account for ~83% of production, while India accounts for 3-4% of the world production. Global coffee production 155,000

Production share (%) 10%

'000 60 bags

9% 150,000

8% 7%

145,000

6% 5%

140,000

4% 3%

135,000

2%

1% 130,000

Others 17% Ethiopia 5% Colombia 8%

Indonesia 7% Vietnam 22%

0% FY11

FY12

FY13

Coffee Production

Brazil 41%

FY14E

Growth (RHS)

Source: CCL, Ventura Research

Source: CCL, Ventura Research

The fastest growth in coffee consumption is expected to be from the emerging Asian consumers, thereby taking overall consumption growth estimates to ~2% to 144,423 thousand 60 kg bags (2013-14E). According to Tata Coffee’s AR, the current global instant coffee market is ~707 mn kg and is forecasted to reach up to 814 million kg by the year 2017. Thus, the overall soluble coffee consumption is forecasted to grow at a CAGR of 2.7% till 2017, within which spray dried and agglomerated coffee is expected to grow at 2.2% and Freeze dried coffee at 4.5%, respectively. Global coffee consumption 146,000

Consumption share (%) 7%

'000 60 bags

144,000

6%

142,000

5% 4%

140,000

3%

138,000

2%

136,000

1%

134,000

0%

132,000

-1%

130,000

-2%

128,000

-3%

FY11

FY12

Coffee Consumption

Source: CCL, Ventura Research

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Others Russia 6% 4% Japan 7%

FY13

FY14E

Brazil 20%

European Union 41%

United States 22%

Growth (RHS)

Source: CCL, Ventura Research

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Entry barriers creates a shield against new-comers and fierce competition Intensively tough business as it requires and demands brand image, goodwill, quality, consistency in flavor and taste to remain competitive in the business. Highly capital intensive in nature. A lion’s share of coffe consumers are in western countries and as a result, customers tend to be very particular about their requirements of coffee with regards to taste and quality as well as brand.

Key Concerns Even though there are enough entry barriers to the coffee business, there still remains a threat from increasing competition from existing or new players. Any slowdown in the demand for coffee consumption globally could impact its sales and profitability.

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 Financial Performance Backed by the increasing demand for Robusta coffee (+4% YoY in 2012-13), CCL’s consolidated revenue witnessed a robust growth of 14% YoY to `53.3 crore as of 9MFY14. Over the same period, its EBITDA margins registered a growth of 120 bps YoY and stood at 20.5% as against 19.3%. Driven by the higher other income (`0.9 crore v/s `0.7 crore), the PAT witnessed a robust growth of 12.8% YoY to `17.2 crore. Quarterly Financial Performance (` in crore) Particulars Net Sales Growth % Total Expenditure EBIDTA EBDITA Margin % Depreciation EBIT (EX OI) Other Income EBIT Margin % Interest Exceptional items PBT Margin % Provision for Tax PAT PAT Margin (%)

Q3FY14 198.3 -4.2 160.3 38 19.2 6.4 31.6 0.9 32.5 16.4 5.2 0.0 27.3 13.8 10.1 17.2 8.7

Q3FY13 206.9 164.2 42.7 20.6 9.5 33.2 0.7 33.9 16.4 8.7 0.0 25.2 12.2 9.9 15.3 7.4

FY13 650.7 29.6 527.1 123.6 19.0 28.6 95.0 1.9 96.9 14.9 23.1 0.0 73.8 11.3 26.4 47.4 7.3

FY12 502.2 415.1 87.1 17.3 20.1 67.0 2.0 69.0 13.7 14.8 0.0 54.2 10.8 17.9 36.3 7.2

Source: CCL, Ventura Research

 Financial Outlook With the 15,000 tonne capacity greenfield project in Vietnam going on stream, we expect incremental growth from Vietnam operations. While the Indian unit is likely to contribute steadily to the company’s top-line, the potential shift in favor of speciality products from bulk (in India) and its recent foray into retailing coffee should auger well for the company in the long term. As a result, we expect CCL’s consolidated revenue to grow at a 14.4% CAGR over FY13-16E to `974.6 crore by FY16E from `650.7 crore in FY13. Moreover, we expect EBITDA and PAT to grow faster at 15.8% and 32.9% CAGR respectively over FY13-16E owing to savings on logistics front from Vietnam plant and tax exemption in Vietnam.

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Revenue & Profitability 1200

Rs.Crore

25%

1000

20%

800

15% 600 10%

400 5%

200 0

0%

FY11

FY12

Revenue

FY13

FY14E

EBITDA (%) RHS

FY15E

FY16E

PAT (%) RHS

Source: CCL, Ventura Research

 Valuation We initiate coverage on CCL Products (India) Ltd (CCL) as a BUY with a Price Objective of `79.5 representing an upside potential of ~49.9% over the next 24 months. At the CMP of `53.0, the stock is trading at 7.9x and 6.3x its FY15E and FY16E earnings, respectively. Historically, the company has traded at an average P/E of 12x its one year forward earnings. We have assigned a target multiple of 9.5x (~21% discount to average P/E) to its FY16E earnings. With capex in place, CCL’s Vietnam plant is expected to positively contribute to the consolidated revenues of the company going forward. Moreover, robust demand for instant coffee coupled with better scope of penetration in the global markets and company’s expertise in this segment makes a strong case for investment in the company. Moreover, the company has consistent dividend paying track record which again makes a strong case for investment for the medium to long-term.

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P/E 140 120 100

80 60

40 20

0 Mar-05

Mar-07

CMP

6X

Mar-09 9X

Mar-11 12X

Mar-13 15X

Mar-15 18X

Source: CCL, Ventura Research P/BV 100 90 80 70 60 50 40 30 20 10 0 Mar-05 CMP

Mar-07

Mar-09

1X

Mar-11

1.5X

2X

Mar-13

2.5X

Mar-15

3X

Source: CCL, Ventura Research EV/EBITDA 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Mar-05 EV

Mar-07

4.5X

Mar-09

6X

Mar-11

7.5X

Mar-13

9X

Mar-15

10.5X

Source: CCL, Ventura Research - 15 of 16 -

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Financials and Projections Y/E March, Fig in Rs. Cr Profit & Loss Statement Net Sales % Chg. Total Expenditure

FY 2013 FY 2014E FY 2015e FY 2016e

Per Share Data (Rs) 857.3

974.6

EPS (adj)

3.6

4.3

6.7

8.4

29.6

8.8

21.1

13.7

Cash EPS

5.7

6.5

9.0

10.8

570.1

687.8

782.6

27.0

8.2

20.6

13.8

EBDITA

123.7

137.7

169.6

192.0

19.0

19.5

19.8

19.7

1.9

1.8

1.8

1.8

125.6

139.5

171.4

193.8

Depreciation

28.6

29.3

31.0

Interest

23.1

21.8

19.7

PBDIT

Exceptional items

DPS

0.5

0.5

0.5

0.5

20.9

25.6

31.7

39.5

Debt / Equity (x)

1.2

0.9

0.7

0.5

Current Ratio (x)

1.2

1.8

2.2

2.8

ROE (%)

17.0

16.7

21.1

21.2

32.7

ROCE (%)

20.7

21.4

24.4

25.1

17.3

Dividend Yield (%)

0.9

0.9

0.9

0.9

Valuation Ratio (x)

Book Value Capital, Liquidity, Returns Ratio

0.0

0.0

0.0

0.0

PBT

73.8

88.4

120.7

143.8

Tax Provisions

26.4

31.6

31.8

32.5

Minority Interest

0.0

0.0

0.0

0.0

Reported PAT

47.4

56.8

88.9

111.3

PAT Margin (%)

7.3

8.0

10.4

11.4

Efficiency Ratio (x)

60.3

58.6

60.5

61.0

3.3

3.4

3.5

3.6

RM cost / Sales (%) Manpower cost / Sales (%)

Balance Sheet Share Capital

P/E

14.9

12.4

7.9

6.3

P/BV

2.5

2.1

1.7

1.3

EV/Sales

1.5

1.4

1.2

1.0

EV/EBIDTA

8.1

7.2

5.9

5.2

Inventory (days)

28.2

24.5

25.0

25.0

Debtors (days)

25.2

24.1

26.0

26.0

Creditors (days)

46.6

35.9

36.0

36.0

Cash Flow statement Profit After Tax

47.4

56.8

88.9

111.3

13.3

26.6

26.6

26.6

265.1

314.1

395.2

498.8

0.0

0.0

0.0

0.0

329.1

311.7

281.7

246.7

0.0

0.0

0.0

0.0

Total Liabilities

607.5

652.4

703.5

772.0

Capital Expenditure

Gross Block

465.2

505.2

525.2

545.2

Change in Investment

Less: Acc. Depreciation

130.8

160.1

191.1

223.8

Net Block

334.4

345.1

334.1

321.4

Capital Work in Progress

0.0

0.0

0.0

0.0

Investments

1.5

27.3

27.3

27.3

Net Current Assets

294.5

302.8

364.9

Deferred Tax Assets

(22.9)

(22.8)

(22.8)

Reserves & Surplus Minority Interest Total Loans Deferred Tax Liability

Misc Expenses Total Assets

FY 2014E FY 2015e FY 2016e

707.8

527.1

Other Income

FY 2013

650.7

% Chg. EBDITA Margin %

Y/E March, Fig in Rs. Cr

28.6

29.3

31.0

32.7

(61.1)

(29.9)

(30.5)

(24.2)

Others

9.4

21.6

19.5

17.1

Operating Cash Flow

27.5

77.8

108.9

136.8

(37.8)

(40.0)

(20.0)

(20.0)

-25.8

0.0

0.0

0.0

Cash Flow from Investing

-37.5

-65.8

-20.0

-20.0

Interest

-10.5

-21.8

-19.7

-17.3

Increase/(Decrease) in Loans

31.9

27.0

-30.0

-35.0

Dividend and DDT

-7.7

-7.7

-7.7

-7.7

446.1

Cash Flow from Financing

13.7

-2.5

-57.5

-60.0

(22.8)

Net Change in Cash

3.7

9.5

31.4

56.8

Opening Cash Balance

5.6

9.3

18.8

50.2

Closing Cash Balance

9.3

18.8

50.2

107.0

0.0

0.0

0.0

0.0

607.5

652.4

703.5

772.1

Depreciation Working Capital Changes

Ventura Securities Limited Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079 This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation.

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