IPO Update

IPO UPDATE

Risky investment

Salient features of the IPO:

• GreenSignal Bio Pharma Ltd. (GSBPL) is one of the two Indian pharmaceutical companies engaged in the development, manufacture and sale of the BCG vaccine.

• The company is also one of the four companies worldwide who have been WHO-prequalified to supply the BCG vaccine to UNICEF.

• The issue is an offer for sale. GSBPL will not receive any proceeds from the IPO.

Key competitive strengths:

• Niche product profile

• Lower costs in manufacturing and research & development

• Lower costs of clinical trials

• Growing and ageing population

Risk and concerns:

• Poor business outlook post the expiry of the contract

• Narrow product profile

• Discontinuation of sales contract for Urovac

Valuation & recommendation:

There is no listed peer in the domestic market. At the higher price band of Rs. 80, GSBPL’s share is valued at a P/E multiple of 57.8x. Moreover, on P/BVPS and EV/EBITDA front, it is available at 5.4x and 35.5x.

Below are few key observations of the issue:

• GSBPL is one of the two Indian pharmaceutical companies engaged in the development, manufacture and sale of the BCG vaccine and immunotherapy drug Urovac. The company is also one of the four companies worldwide who have been WHO-prequalified to supply the BCG vaccine to UNICEF.

• GSBPL has a narrow product offering and is highly dependent on just two clients i.e. Health Ministry, Government of India and UNICEF.

• Currently, it has an order book to supply 2.5mn vials of BCG vaccine to the Indian government in FY17 and FY18. Moreover, it has secured a long term arrangement with UNICEF to supply the BCG vaccine to UNICEF. It will supply 2.8mn vials of the BCG vaccine over 2016-2018.

• GSBPL financial performance is contingent on securing orders and thus has an inconsistent operating history. Of the last five years over FY12-16, the company has posted profit in only FY16, which was mainly due to receipt of UNICEF order. Its future business performance post 2018 is not predictable, hence a risky investment.

• Being an OFS with 14.6mn shares in offering, promoter group is selling 12.2mn shares, while an Avon Cycles (a major public shareholder) is selling 2.4mn shares. Avon Cycle stake will reduce to its stake from 16.3% to 10.1% post IPO. Promoter group stake will come down from 83.6% to 51.8% post IPO.

Thus, considering the above observations, we recommend a “AVOID” rating for the public issue.

1

Recommendation AVOID

Price Band (Rs.) Rs. 76 - Rs. 80

Face Value (Rs.) Rs. 10

Shares for Fresh Issue (mn)

Shares for OFS (mn) 14.6mn

Fresh Issue Size (Rs. mn)

OFS Issue Size (Rs. mn) Rs. 1,108 – 1,166.4mn

Total Issue Size (Rs. mn) Rs. 1,108 – 1,166.4mn

Bidding Date 09th Nov. – 11th Nov. 2016

Book Running Lead Manager Indian Overseas Bank

Registrar Bigshare Services Pvt. Ltd.

Sector/Industry Pharmaceuticals

Promoters Mr. P. Sundaraparipooranan, Dr. P. Murali

Pre - Issue Shareholding Pattern

Promoters and Promoter Group 83.6%

Public 16.4%

Total 100%

Retail Application Money at Higher Cut-Off Price per Lot

Number of Shares per Lot 175

Application Money Rs. 14,000

Analyst

Rajnath Yadav

Research Analyst (022 - 6707 9999; Ext: 912)

Email: rajnath.yadav@choiceindia.com

Nov. 08, 2016

GreenSignal Bio Pharma Ltd.

Consolidated Financial Snapshot (Rs. mn) FY12 FY13 FY14 FY15 FY16 Q1 FY17 Revenue from Operations (Net) 112.7 116.8 35.1 65.6 203.9 101.5

EBITDA 31.8 25.1 12.1 18.1 86.9 40.9

Reported PAT (4.8) (5.0) (13.0) (2.1) 53.1 29.3

EBIDTA Margin (%) 28.2% 21.5% 34.5% 27.6% 42.6% 40.4%

Reported PAT Margin (%) -4.3% -4.3% -37.0% -3.3% 26.0% 28.9%

RoE (%) -1.1% -1.1% -3.6% -0.6% 9.4% 4.9%

RoCE (%) 3.7% 2.6% 0.2% 1.5% 11.5% 5.7%

IPO Update

IPO UPDATE 2

About the issue: • GSBPL is coming up with an initial public offering (IPO) with 14.6mn shares (fresh issue: Nil; OFS shares: 14.6mn) in

offering. Total IPO size is estimated at around Rs. 1,108 - 1,166.4mn.

• The issue will open on 9th Nov. 2016 and close on 11th Nov. 2016.

• Not more than 75% of the issue will be allocated to qualified institutional buyers. Further, at most 15% of the issue will be available for non-institutional bidders and the remaining 10% for retail investors.

• The issue is an offer for sale. GSBPL will not receive any proceeds from the IPO.

• Pre-issue promoter group stake in GSBPL stands at 83.6%. Post IPO, promoter group stake will decline to 51.8%.

Source: Company RHP

Pre and Post Issue Shareholding Pattern (%)

Pre Issue Post Issue

Promoter & Promoter Group (%) 83.6% 51.8%

Public 16.4% 48.2%

IPO Update

IPO UPDATE 3

Vaccination Industry Overview: Vaccination is one of the most cost-effective public health tools to prevent infectious diseases. The last decade saw significant advances in developing, introducing and expanding the reach of vaccines globally. During the 20th century, the average human life span has increased by approximately 30 years, a significant portion of which has been attributed directly to vaccination. More people than ever before were vaccinated, resulting in significant achievements, including the near eradication of polio and significant reductions in deaths caused by vaccine-preventable diseases (diphtheria, measles, neonatal tetanus, pertussis). Around 2mn deaths among children less than five years of age are prevented annually despite an increase in birth cohorts every year. The Indian vaccine industry was pioneered by state-owned manufacturers, supplying basic infant vaccines to the national immunization program. In recent decades, the number of privately owned firms active in this sector has grown rapidly. Their success in bringing low cost vaccine solutions to public vaccine markets is an important driver behind the emergence of the sector. The industry is now able to produce new and more complex vaccines, which are aided by attractive investment environment, governmental support, international partnerships and the growing technical work force. The vaccine industry has also been supplying a large share of basic vaccines to a number of developing countries, and is now exporting more advanced vaccines as well. From public health perspective, vaccination industry has made a significant contribution by bringing down prices and keeping them low. Although price will continue to play an important role, the industry is now in a translational phase, moving from a “price- driven” to an “innovation-driven” model. India has a long history of vaccine manufacture, dating to the early 19th century. Of several institutes established in the pre-independence era, only Haffkine Institute in Mumbai remains on the list of manufacturers that produce WHO prequalified vaccines. Of the major publically funded establishments, the BCG Vaccine Laboratory, HLL Life Care Ltd. and Indian Immunologicals Ltd. still manufacture vaccines for human use. The entry of private enterprise into vaccine manufacturing started with Biological E Ltd. of Hyderabad in 1953, followed by the Serum Institute of India Pvt. Ltd. in 1966. Panacea Biotech emerged during the critical need for filling and packaging of imported bulk oral polio vaccines in quick response to a national need. The last two decades have witnessed the entry of scientist and engineer entrepreneurs into the vaccine industry, with the establishment of biotechnology companies. Shantha Biotech, Bharat Biotech International Limited, are examples of this change. In addition, several Indian pharmaceutical companies with established business in biopharmaceuticals, such as Zydus Cadila, Cadila Pharmaceuticals Ltd., Pfizer India, Wockhardt, are now finding it attractive to expand into the vaccine business. Details of the vaccine manufacturers in India are provided in the table below:

Source: Company RHP

Vaccine Manufacturers in India Sr. No. Institute / Company Vaccines Produced / Marketed (Product Portfolio)

1 Bharat Biotech R-HB Typhoid, Anti-rabies 2 Bharat Serums and Vaccines DPT, Typhoid 3 Biological Evans DTP, TT, R-HB 4 Biovaccines TT 5 Cadila Laboratories Typhoid 6 Childcare Biotech Triple Antigen 7 Chowgule & Co. Triple Antigen 8 GreenSignal Bio Pharma BCG 9 GSK India Varicella, DTP-HB, Hb, Hib, DPT, Hepatitis A, TT

10 Ishita India Polio, DTP, DTAP, Measles, MMR, Hepatitis A, Hepatitis B, BCG, Chicken Pox, Anti-rabies 11 LG Life Science India R-HB 12 Panacea Biotech OPV, R-HB, DTP-HB, DTP-Hib, DTP-HB, Hib 13 Pfizer India R-HB 14 Sanofi Pasteur India Typhoid, Hib, Anti-rabies, Varicella, OPV, Pneumococcal HB, Hepatitis A, Meningococcal

15 Serum Institute of India TT, DTP, Tetanus, Measles, Rubella, MR & MMR, DTP, R-HB, BCG, HDC Rabies, DTP-HB, Hib

16 Shantha Biotech R-HB, DTP-HB, JE 17 Solvay Pharma India Influenz 18 UniChem Laboratories R-HB 19 VHB Life Sciences R-HB, Typhoid, Anti-rabies, Varicella 20 Wyeth India Hib, DTP 21 Zydus Cadila R-HB, Typhoid, Anti-rabies, Chicken Pox 22 Zydus Cadila Healthcare Varicella, Typhoid

IPO Update

IPO UPDATE 4

Vaccination Industry Overview (Contd…): The global vaccine market is largely divided between numerous Indian manufacturers and global pharmaceutical companies headquartered in the West, such as GSK, Sanofi Pasteur, Novartis, Merck and Pfizer. Vaccines from Indian manufacturers are generally substantially cheaper than those sold by the global companies. Until the creation of the Global Alliance for Vaccines and Immunization (GAVI), which is an alliance of public and private sector organizations, in the year 2000, vaccines developed by global pharmaceutical firms were generally distributed in high-income countries only. Older vaccines, such as those for measles and polio, were bought for less than a dollar per child, primarily from Indian manufacturers. BCG Vaccination: BCG vaccine is given for protection against tuberculosis, especially severe forms of childhood tuberculosis. 24mn children below one year age were administered BCG vaccine during 2015. The achievement in 2015 was 87% as against 91% in 2014. Apart from tuberculosis, BCG is also the main intravesical immunotherapy for treating early-stage bladder cancer. Intravesical therapy for bladder cancer requires putting liquid drugs directly into the bladder through a tube called a catheter. The aim of this treatment is to treat the cancer and stop it from coming back or spreading into the deeper layers of the bladder. BCG was the first FDA approved immunotherapy and helps reduce the risk of bladder cancer recurrence by stimulating an immune response that targets the bacteria as well as any bladder cancer cells. People who have a moderate risk of the cancer recurrence usually have further treatment with chemotherapy into the bladder (intravesical chemotherapy), while people who have a high risk of the cancer recurrence or spreading into the deeper layers of the bladder usually have treatment with BCG into the bladder. Immunotherapy with BCG has reduced the risk of bladder cancer recurrence and increased the percentage of patients who experience a complete response after surgery. Approximately 70% of bladder cancer patients go into remission after BCG therapy. The annual demand for BCG for intravesical immunotherapy is estimated at 0.3mn doses in India and 1mn doses globally, as per GreenSignal Bio Pharma Ltd.’s (GSBPL) estimates. The demand for BCG vaccination via the universal immunization program was historically catered to the public (BCG Vaccine Laboratory in Guindy, Chennai) and private sector (Serum Institute of India) combined. However, a 2008 shutdown of the government owned vaccine manufacturing facility due to poor manufacturing establishment has led to complete reliance on two private sector companies – Serum Institute of India and GSBPL, which started manufacturing vaccine in January 2009. The price of BCG vaccination has more than doubled since FY07, increasing from Rs. 13 per vial in FY07 to Rs. 30 in FY13, as indicated in the chart below.

Source: Company RHP

BCG Price Trend

13

30

0

5

10

15

20

25

30

35

FY07 FY13BCG Price per Vial (Rs.)

IPO Update

IPO UPDATE 5

Vaccination Industry Overview (Contd…): India‘s BCG procurement, vaccination and achievement during the last 5 years is indicated in the chart below:

Source: Company RHP

UNICEF Vaccine Procurement

Government of India’s BCG Procurement (mn doses) BCG Vaccination Achievement in Last Five Years

Source: Company RHP Source: Company RHP

78.6 76.0 76.0

47.4

25.0 25.0

0

10

20

30

40

50

60

70

80

90

FY16 FY17 FY18Total Requirement vis Tender (mn dose)GSBPL's Contribution (mn dose)

25.5

25.3 25.4

25.6

25.9

26.3 95.7%

93.3%

93.4% 93.8%

92.7%

91.6%

90%

93%

96%

25.0

25.5

26.0

26.5

FY11 FY12 FY13 FY14 FY15 FY16

Need Assessed (mn infant) Vaccination Achievement (%)

Vaccination efforts global are catered to by the concerted efforts of the United Nations Children's Fund (UNICEF), the World Health Organization (WHO), respective governments, non-governmental organizations as well as various global and regional immunization initiatives. The total vaccine demand can be estimated to be the summation of the vaccination requirements of the UNICEF (~54%) and the requirement of individual countries (46%). GAVI is an international coalition of partners and includes national governments, international organizations such as the UNICEF, WHO, World Bank, various philanthropic institutions, the private sector and research & public health institutions.

140

130

130

16 20 20 11.4%

15.4%

15.4%

10%

12%

14%

16%

0

25

50

75

100

125

150

FY09 FY10 FY11

Total UNICEF Procurement (mn vials)

GSBPL's Contribution (mn vials)

IPO Update

IPO UPDATE 6

Vaccination Industry Overview (Contd…): BCG vaccine demand through UNICEF over the past decade has been relatively stable at approximately 120mn doses per year. BCG vaccine demand through UNICEF increased from 123mn doses in 2014 to reach 152.2mn doses in 2015 on account of increased country requirements including from some large middle-income countries that typically self-procure, and country buffer stock replenishments. However, requirement of only 135.7mn doses was met, resulting in a shortfall of 16.5mn doses.

Source: Company RHP

UNICEF’s Projected Vaccine Demand Supply

UNICEF has concluded its 2016-2018 BCG vaccine tender in Sept. 2015 and awarded four manufacturers three-year long-term arrangements to supply 400mn doses. The increase in total 2016 supply availability from existing manufacturers, together with supply from a new WHO prequalified vaccine (GSBPL), indicates total supply would be sufficient to meet both suppressed 2015 demand carried over to 2016, as well as total forecast demand through 2016-2018. To smoothen demand, country buffer stocks depleted over the past three years will be replenished over a two to three year period subject to supply availability. Global Vaccine Market Outlook: Vaccine market, which was once considered as a commodity market, is now among the fastest developing markets for the global pharma industry. The global vaccine industry has witnessed impressive growth in recent times and has surpassed many of the traditional businesses in the global pharmaceutical market. It has now captured almost 3% of the overall global pharmaceutical industry. The growth in the global vaccine industry is fuelled by continuous product innovation, increased awareness, availability of financial support and positive response from diverse demographics. In addition, increasing investments by government and non-government organizations to enhance vaccine research and supply worldwide is expected to further fuel the growth in the vaccine industry. The global vaccines market is expected to reach USD 57bn by 2019 from USD 33bn in 2014, growing at a CAGR of 11.8% from 2014 to 2019. Among various end users, the pediatrics segment is expected to account for the largest share of the market with highest CAGR growth during the same period. Growth in this segment can be attributed to the rising prevalence of diseases and the increasing number of initiatives taken by government organizations for vaccination programs. Thus on the back of strong focus of the government on increasing the immunization activities across the country, increasing awareness, availability of affordable vaccines, the Indian vaccine industry is expected to continue to grow a t a CAGR of 12-15% over the next five years.

IPO Update

IPO UPDATE 7

Company introduction: GreenSignal Bio Pharma Ltd. (GSBPL) is one of the two Indian pharmaceutical companies engaged in the development, manufacture and sale of the BCG vaccines. Its products include one vaccine, namely the BCG vaccine as well as the BCG ONCO - Urovac, an immunotherapy drug which is not a vaccine but it is used in the treatment of urinary bladder cancer. The company is also one of the four companies worldwide who have been WHO-prequalified to supply the BCG vaccine to UNICEF. On Nov. 2015, it has secured a long term arrangement with UNICEF to supply the BCG vaccine to UNICEF. Additionally, GSBPL also supplies the BCG vaccine to the Ministry of Health, India, pursuant to the tendering process. The company was successful in obtaining bids over FY10-13 and FY16. It also supplies the BCG vaccine to Indonesia, and Nepal which are countries outside the UNICEF ambit. Its BCG-ONCO drug is distributed throughout India vide commercial arrangements with Cadila Healthcare Ltd. in India. Under this arrangement, GSBPL manufacturers the BCG ONCO drug under the brand name “Oncovac”. GSBPL’s business is organized into domestic (i.e. Indian) and international operations. In FY16, domestic and international operations accounted for 53.8% and 46.2%, respectively, of its net revenues from operations.

Product-wise Revenue Distribution in FY16 Geographical Revenue Distribution in FY16

Source: Company RHP Source: Company RHP

54%

46%

Domestic Revenue Overseas Revenue

90.7%

9.3%

Product BCG Vaccine Product BCG ONCO

The company has a manufacturing facility located at Pappankuppam Village, Gummidipoondi, Tiruvallur District, Tamil Nadu equipped with advanced equipment dedicated for the manufacturing of live attenuated BCG Vaccine and the BCG-ONCO for immunotherapy. UNICEF Order: There are a limited number of manufacturers supplying BCG Vaccines, who are WHO pre-qualified, even though the demand from UNICEF has been constant over the past decade. Over the past three years there has been an insufficient supply and a deficit of approximately 15mn doses each year. UNICEF has concluded its 2016-2018 BCG vaccine tender in Sept. 2015 and awarded four manufacturers three-year long-term arrangements to supply 400mn doses. The increase in total 2016 supply availability from existing manufacturers, together with supply from a new WHO prequalified vaccine is likely to meet both suppressed 2015 demand carried over to 2016, as well as total forecast demand through 2016-2018. To smoothen demand, country buffer stocks depleted over the past three years will be replenished over a two to three year period subject to supply availability.

IPO Update

IPO UPDATE 8

Company introduction (Contd…): Present Order Book: As of 13th Oct. 2016, its order book for BCG vaccine is given below

Source: Company RHP

Competitive Strengths: • Niche product profile: Immunotherapy market is a niche market and GSBPL is one of the few players active in this

segment. Its product UROVAC is one among the brands available in this segment globally.

• As cure for other diseases: Recent research has suggested that BCG can be used for treatment of diabetes.

• Lower costs in manufacturing and research & development: Indian vaccine manufacturers are developing vaccines on par with global standards at costs lower than the existing international costs.

• Lower costs of clinical trials: There is high potential for contract services by Indian vaccine manufacturers in areas like basic research, molecular cloning and gene expression, development of cell lines for vaccines, fermentation and purification processes, clinical trials and manufacturing.

• Increased support from the government: The Indian government‘s National Immunization Program and implementation of national preventing policies effectively backed by global organizations like the WHO, UNICEF and GAVI and increasing private-public partnerships has provided a major thrust to the vaccine industry.

• Innovations bringing in new possibilities: New uses of vaccines, new routes of administering them, new combinations, new antigens and new therapeutic segments of discovering vaccines at lower costs have all helped fuel greater growth in this space.

• Growing and ageing population: India has the world‘s second largest population which has a strong prevalence of all major adult and pediatric diseases. This, in conjunction with the country‘s increasing per-capita income and growing health consciousness of its populace is providing for a strong domestic market.

IPO Update

IPO UPDATE 9

Financial Performance: GSBPL’s financial performance is volatile on the top-line. Ability to win the tenders is one the key triggers for the top-line growth and profitability. Inability to renew the contract in the past has resulted to a dip in the revenue. This can be illustrated from the top-line growth over FY12-16. Over FY12-13, the company reported a stable top-line, while in FY14 and FY15, it declined drastically, as it was not able to win the Indian government’s health contract. Again in FY16, there was a spike in the top-line as it obtained the tender from the health ministry and order from the UNICEF. Consequently, net revenue from operations increased by 16% CAGR over FY12-16 to Rs. 203.9mn. The growth in the operating expenditure was lower as compared to the top-line growth. Operating expenditure increased by 9.7% CAGR over FY12-16, thereby resulting to a 28.5% CAGR rise in the EBITDA over the same period. EBITDA margin expanded by over 14ppts to 42.6% in FY16. With declining debt level the company reported a 25.1% CAGR fall in the interest expenses. However, with volatility in the top-line, GSBPL reported a net loss over FY12-15. With robust orders in FY16, the company reported a profit of Rs. 53.1mn, with a PAT margin of 26%.

Financial Performance over FY12-16 Operating Performance over FY12-16

Source: Company RHP Source: Company RHP

112.7 116.8

35.1

65.6

203.9

101.5

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0

50

100

150

200

250

FY12 FY13 FY14 FY15 FY16 Q1 FY17

Revenue from Operations EBITDA Margin (%)

-4%

0%

4%

8%

12%

0.05

0.10

0.15

0.20

0.25

FY12 FY13 FY14 FY15 FY16 Q1 FY17

Debt Equity Ratio RoE (%) RoA (%) RoCE (%)

Risk and Concerns: • Poor business outlook post the expiry of the contract with its key clients: GSBPL’s top-line is driven by its ability to

secure the tenders from the health department. In the past, there was a sharp fall in the revenue as it was not able to renew the contract. Currently, it is executing the Indian government’s health department’s contract with limited validity. Also the UNICEF order is for the period 2016-2018. Inability to renew the contract will reflect a poor business outlook for the company.

• Narrow product profile: GSBPL has only two products in the basket. Any impediment in the demand of these products will severely affect the operations of the company.

• Discontinuation of sales contract for Urovac: GSBPL has entered into a sales and distribution contract with Cadila Healthcare Ltd. for its immunotherapy drug Urovac. The contract has expired on June 2016 and till date has not been renewed by the company. If the contract is not renewed, it will be challenging for the GSBPL to market its product.

IPO Update

IPO UPDATE 10

Peer comparison and our recommendation:

There is no listed peer in the domestic market. At the higher price band of Rs. 80, GSBPL’s share is valued at a P/E multiple of 57.8x. Moreover, on P/BVPS and EV/EBITDA front, the company is available at 5.4x and 35.5x. Below are few key observations of the issue: • GSBPL is one of the two Indian pharmaceutical companies engaged in the development, manufacture and sale of the BCG

vaccine and immunotherapy drug Urovac. The company is also one of the four companies worldwide who have been WHO-prequalified to supply the BCG vaccine to UNICEF.

• GSBPL has a narrow product offering and is highly dependent on just two clients i.e. Health Ministry, Government of India and UNICEF.

• Currently, it has an order book to supply 2.5mn vials of BCG vaccine to the Indian government in FY17 and FY18. Moreover, it has secured a long term arrangement with UNICEF to supply the BCG vaccine to UNICEF. It will supply 2.8mn vials of the BCG vaccine over 2016-2018.

• GSBPL financial performance is contingent on securing orders and thus has an inconsistent operating history. Of the last five years over FY12-16, the company has posted profit in only FY16, which was mainly due to receipt of UNICEF order. Its future business performance post 2018 is not predictable, hence is risky for the investment.

• Being an OFS with 14.6mn shares in offering, promoter group is selling 12.2mn shares, while an Avon Cycles (a major public shareholder) is selling 2.4mn shares. Avon Cycle stake will reduce to its stake from 16.3% to 10.1% post IPO. Promoter group stake will come down from 83.6% to 51.8% post IPO.

Thus, considering the above observations, we recommend a “AVOID” rating for the public issue.

IPO Update

IPO UPDATE 11

Financial Statements:

Source: Company RHP

Source: Company RHP

Profit and Loss Statement

FY12 FY13 FY14 FY15 FY16 Q1 FY17

Revenue from Operations 112.7 116.8 35.1 65.6 203.9 101.5

Cost of Materials Consumed (34.8) (26.6) (7.7) (16.0) (57.4) (13.6)

Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade

(7.8) (13.9) 0.8 (2.5) 16.4 (16.2)

Operations Cost (14.2) (13.1) (5.0) (6.4) (20.1) (7.4)

Employee Benefits Expense (12.8) (21.9) (6.2) (10.6) (17.2) (8.9)

Other Expenses (11.2) (16.2) (4.9) (11.9) (38.7) (14.4)

EBITDA 31.8 25.1 12.1 18.1 86.9 40.9

Depreciation and Amortization Expense (11.2) (11.3) (11.3) (11.5) (11.9) (3.0)

EBIT 20.6 13.9 0.8 6.6 75.0 37.9

Finance Costs (21.1) (15.8) (11.6) (7.1) (6.6) (1.2)

Other Income 0.0 0.2 0.2 0.4 1.1 0.6

EBT (0.5) (1.7) (10.6) (0.1) 69.4 37.3

Tax Expenses (4.3) (3.3) (2.4) (2.0) (16.3) (7.9)

Reported PAT (4.8) (5.0) (13.0) (2.1) 53.1 29.3

Balance Sheet Statement

FY12 FY13 FY14 FY15 FY16 Q1 FY17

Equity Share Capital 135.7 135.7 135.7 135.7 153.5 383.7

Reserve & Surplus 240.1 235.1 222.1 236.6 413.8 212.9

Share Application Money Pending Allotment 69.8 76.2 0.0 0.0 0.0 0.0

Long Term Borrowings 40.0 0.3 0.0 0.0 0.0 0.0

Deferred Tax Liabilities (Net) 21.6 24.9 27.3 29.3 31.4 31.7

Short Term Borrowings 53.8 65.8 39.8 39.2 55.8 38.8

Trade Payables 3.2 0.1 2.6 3.4 8.9 10.7

Other Current Liabilities 7.6 0.6 142.0 142.5 30.0 32.1

Total Liabilities 571.8 538.7 569.5 586.7 693.4 710.0

Tangible Assets 386.8 376.1 364.9 398.0 389.2 387.3

Capital Work in Progress 85.0 100.1 112.4 116.0 114.7 114.7

Inventories 61.8 47.8 49.2 53.0 73.9 69.3

Trade Receivable 27.9 7.6 34.3 7.1 47.2 86.8

Cash & Cash Equivalents 1.2 (0.3) (0.1) 6.5 40.4 28.6

Short Term Loans and Advances 9.2 7.4 8.8 6.2 28.0 23.2

Total Assets 571.8 538.7 569.5 586.7 693.4 710.0

IPO Update

IPO UPDATE 12

Financial Statements (Contd…):

Source: Company RHP

Source: Company RHP

Cash Flow Statement (Rs. mn)

Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Q1 FY17

Cash Flow from Operating Activities (2.3) 35.4 89.1 38.1 (106.0) (10.7)

Cash Flow from Investing Activities (15.8) (15.7) (12.4) (31.5) (1.9) (1.1)

Cash Flow from Financing Activities 17.7 (21.3) (76.5) 0.0 141.9 0.0

Net Cash Flow (0.4) (1.5) 0.2 6.6 33.9 (11.8) Cash and Cash Equivalent at the Beginning of the Year 1.6 1.2 (0.3) (0.1) 6.5 40.4 Cash and Cash Equivalent at the End of the Year 1.2 (0.3) (0.1) 6.5 40.4 28.6

Financial Ratios

Particulars (Rs. mn) FY12 FY13 FY14 FY15 FY16 Q1 FY17

Revenue Growth 3.7% -69.9% 86.9% 210.7%

EBIDTA Growth -21.0% -51.8% 49.3% 380.5%

EBIDTA Margin 28.2% 21.5% 34.5% 27.6% 42.6% 40.4%

EBIT Growth -32.5% -94.0% 687.2% 1040.5%

EBIT Margin 18.3% 11.9% 2.4% 10.0% 36.8% 37.4%

Reported PAT Growth 3.9% 159.4% -83.6% -2589.2%

Reported PAT Margin -4.3% -4.3% -37.0% -3.3% 26.0% 28.9%

Liquidity Ratios

Current Ratio 1.5 0.9 0.5 0.4 2.0 2.5

Quick Ratio 0.6 0.2 0.2 0.1 1.2 1.7

Debt Equity Ratio 0.2 0.1 0.1 0.1 0.1 0.1

Turnover Ratios

Inventories Turnover Ratio (x) 2.1 0.7 1.3 3.2 1.4

Trade Receivable Turnover Ratio (x) 6.6 1.7 3.2 7.5 1.5

Accounts Payable Turnover Ratio (x) 69.4 26.0 22.1 33.1 10.3

Fixed Asset Turnover Ratio (x) 0.2 0.2 0.1 0.1 0.4 0.2

Total Asset Turnover Ratio (x) 0.2 0.2 0.1 0.1 0.3 0.1

Working Capital Turnover Ratio (x) 7.5 (0.7) (0.6) (23.2) 0.9

Return Ratios

RoE (%) -1.1% -1.1% -3.6% -0.6% 9.4% 4.9%

RoA (%) -0.8% -0.9% -2.3% -0.4% 7.7% 4.1%

RoCE (%) 3.7% 2.6% 0.2% 1.5% 11.5% 5.7%

Per Share Data

Restated BVPS (Rs.) 11.6 11.7 9.3 9.7 14.8 15.5

Restated Diluted EPS (Rs.) (0.1) (0.1) (0.3) (0.1) 1.4 0.8

Restated Cash EPS (Rs.) 0.2 0.2 (0.0) 0.2 1.7 0.8

Restated Operating Cash Flow Per Share (Rs.) (0.1) 0.9 2.3 1.0 (2.8) (0.3)

Restated Free Cash Flow Per Share (Rs.) (4.4) 0.5 2.5 (2.3) (3.2) (0.5)

Trade Payable Days 5.3 14.0 16.5 11.0 35.4

Inventories Days 171.2 504.1 284.1 113.5 257.5

Trade Receivables Days 55.5 217.9 115.1 48.6 241.0

Cash Conversion Cycle (Day) 221.4 708.0 382.7 151.1 463.2