Nagarjuna Construction Result Updated

8/3/2019 Nagarjuna Construction Result Updated

1/12

Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 3QFY12 3QFY11 2QFY12 % chg (yoy) % chg (qoq)Net sales 1,264 1,335 1,090 (5.4) 15.9Operating profit 77.7 127.6 103.2 (39.1) (24.7)

Net profit (9.5) 40.5 11.4 - -Source: Company, Angel Research

Nagarjuna Construction Company (NCC) posted a poor set of numbers for

3QFY2012, below our and street expectations. Owing to the companys poor

performance in 3QFY2012, we are revising our estimates downwards for FY2012.

Further, on account of the recent run-up in the stock price, we recommend Neutralon the stock.Decline in revenue, abysmal EBITDAM and interest burden lead to loss: For3QFY2012, NCCs top line declined by 5.4% yoy to `1,264cr, which was

marginally above our expectation of `1,215cr (Consensus: `1,271cr). On the

EBITDAM front, the companys margin stood at shocking 6.1% (10.3%),

registering a dip of 350bp yoy and lower than our estimate of 9.5% due to

one-time provisioning (~`15cr) and cost/time overruns in few projects. Interest

cost came in at `69.4cr, registering a yoy jump of 58.3% but a decline of 2.2% on

a sequential basis. On the bottom-line front, NCC reported loss of `9.5cr in

3QFY2012 vs. profit of `40.5cr in 3QFY2011, against our estimate of `14.0cr

(Consensus: `26.4cr), manly owing to dismal EBITDAM performance.

Outlook and valuation: The current outstanding order book of NCC stands at`21,990cr (4.3x FY2011 revenue), with order inflow of `9,943cr for 9MFY2012,

mainly aided by captive power project (`5,200cr), which is notably pending FC.

Further, management has revised its revenue guidance to `5,100cr-5,200cr (our

earlier revenue estimates) for FY2012 from `5,700cr-5,800cr, which implies a

growth rate of 10.3% yoy for 4QFY2012, which we believe is aggressive. Hence,

we are factoring in lower revenue numbers for FY2012 (`4,946cr). Further,

earnings would continue to reel under pressure due to muted execution pace,

margin under pressure and high interest cost on the back of elevated debt

levels.Hence, we recommend Neutral on the stock with a fair value of `58.Key financials (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012E FY2013ENet sales (incl. op. income) 4,778 5,074 4,946 5,749% chg 15.1 6.2 (2.5) 16.2

Adj. net profit 200 163 35 94% chg 30.2 (18.4) (78.4) 166.8

FDEPS (`) 7.8 6.4 1.4 3.7EBITDA margin (%) 10.1 9.6 8.2 9.4

P/E (x) 7.9 9.6 44.6 16.7

RoAE (%) 10.2 7.1 1.5 3.9

RoACE (%) 12.8 9.7 6.5 8.1P/BV (x) 0.7 0.7 0.7 0.7

EV/Sales (x) 0.6 0.8 0.9 0.9

EV/EBITDA (x) 6.0 8.0 10.5 9.4

Source: Company, Angel Research

NEUTRALCMP `61

Target Price -

Investment Period -

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 19.5

MF / Banks / Indian Fls 21.7

FII / NRIs / OCBs 43.3

Indian Public / Others 15.4

Abs. (%) 3m 1yr 3yr

Sensex 0.8 (1.7) 90.4

NCC 16.4 (41.0) 32.3

Face Value (`)

BSE SensexNifty

Reuters Code

1,577

1.4

118/32

155,520

Infrastructure

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

2

17,7075,362

NGCN.BO

NJCC@IN

Shailesh Kanani022-39357800 Ext: 6829

[email protected]

Nitin Arora022-39357800 Ext: 6842

[email protected]

Nagarjuna ConstructionPerformance Highlights

3QFY2012 Result Update | Infrastructure

February 6, 2012


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NCC | 3QFY2012 Result Update

February 6, 2012 2

Exhibit 1:Quarterly performance (Standalone)

Y/E March (` cr) 3QFY12 3QFY11 2QFY12 % Chg (yoy) % Chg (qoq) 9MFY12 9MFY11 % ChgNet sales 1264 1335 1090 (5.4) 15.9 3496 3623 (3.5)Total expenditure 1186 1208 987 (1.8) 20.2 3198 3267 (2.1)Operating profit 78 128 103 (39.1) (24.7) 297 357 (16.6)OPM (%) 6.1 9.6 10.3 (350)bp (420)bp 8.5 9.8 (130)bp

Interest 69 44 71 58.3 (2.2) 204 111 84.7

Depreciation 21 17 20 22.2 5.961 50 22.7

Non operating income 1 2 2 (40.7) (39.1) 6 9 (36.9)

Nonrecurring items 0 0 0 0 0 0 0 -Profit before tax (12) 69 14 - - 37 205 (81.8)Tax (2.2) 28.2 2.9 - - 12.2 77.3 (84.2)Reported net profit (9) 41 11 - - 25 128 (80.3)PAT (%) (0.8) 3.0 1.0 - - 0.7 3.5 (280)bpFDEPS (`) (0.4) 1.6 0.4 - - 1.0 5.0 (80.3)


Exhibit 2:3QFY2012 Actual vs. Estimates

( ` cr) Estimates Actual Variation (%)Net Sales 1,215 1,264 4.0

EBITDA 115 78 (32.7)

Interest 76 69 (8.6)

Tax 7 (2) -

PAT 14 (9) -Source: Company, Angel Research

Decline in revenue due to muted execution pace, asexpected

For 3QFY2012, the companys top line declined by 5.4% yoy to `1,264cr, which

was marginally above our expectation of `1,215cr (Consensus: `1,271cr).

Revenue for the quarter was ~13% lower than the companys internal target of

`1,460cr for 3QFY2012.As per management, muted revenue performance was

on account of 1) slowdown/stoppage in the execution of few under-construction

projects due to delay in payments; 2) non-handing of land by the government for

projects; 3) labor shortage and wage hike; and 4) overall slowdown in the

economy and gloomy macro environment.

Management has revised its revenue guidance to `5,100cr-5,200cr (our earlier

revenue estimates) for FY2012 from `5,700cr-5,800cr, which implies a growth

rate of 10.3% yoy for 4QFY2012, which we believe is aggressive. Hence, we are

factoring in lower revenue numbers for FY2012 (`4,946cr).


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February 6, 2012 3

Exhibit 3:Execution pace takes a hit on expected lines


Exhibit 4:Captive order boosts the order inflow


Projects updatePondicherry Tindivanam: NCC has started collecting toll on this project.Currently, toll collection is `5 lakhs/day, much lower than the breakeven level of

`8lakhs/day. However, the company believes that toll revenue will pick up

going ahead.

Nelcast Power Project (1,320MW): On the FC front, NCC has tied up debt of`5,300cr and is hopeful of declaring FC soon with 13% rate of interest. The debt

has been tied up from three lenders (REC `1,800cr; PFC `1,565cr; and

ICICI `1,935cr) with disbursement received from PFC and REC; and NCC is

currently waiting for disbursement from ICICI Bank.On the fuel supply front, for

70% of coal requirement, the company has tied up with Coal India and for the

balance 30% it has identified coal mines in Indonesia (30mn tonnes) with its share

at 50% (15mn tonnes). Total investment in the mine for NCC would be at around

`50cr, out of which `8cr-10cr has already been invested.

NCC has been shortlisted for signing power purchase agreement (PPA) of 500MW

with Government of Andhra Pradesh for `3.7 per unit. Further, the company is

hopeful of tying up with Government of Karnataka and Tamil Nadu for more PPAs

to ensure that it ties up 900-950MW of power through PPAs.

Himachal Sorang: NCC is now looking to achieve completion of this project inJune 2012 from its earlier guidance of March 2012.

Decline in revenue, abysmal EBITDAM and interest burden lead to loss

On the EBITDAM front, the companys margin stood at shocking 6.1% (10.3%),

registering a dip of 350bp yoy and lower than our estimate of 9.5% due to

one-time provisions (~`15cr), time and cost overruns in few projects, high inflation

and lower absorption of fixed over overheads because of lower revenue. However,

the positive surprise came on the interest cost front, which stood at `69.4cr,

registering a yoy jump of 58.3% but a decline of 2.2% on a sequential basis and

lower than our estimate of `75.9cr. This was on account of reduction in debt by

`120cr by the company during the quarter. On the bottom-line front, NCC

reported loss of `9.5cr in 3QFY2012 vs. profit of `40.5cr in 3QFY2011, against

our estimate of PAT of `14.0cr (Consensus: `26.4cr), mainly owing to dismal

EBITDAM performance.

54.5

31.1

(11.1)

4.6 2.0

16.1

39.0

8.612.612.6

(4.7)

5.1

(9.2)(5.4)

(20.0)

(10.0)

-

10.0

20.0

30.0

40.0

50.0

60.0

0

200

400

600

800

1,000

1,200

1,400

1,600

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

Sales (` cr, LHS) Growth (yoy %, RHS)

(21.3)(32.7)(28.8)

59.525.2

102.1

0.9

(29.5)(16.1)

31.5

(72.1)

(33.3)

15.6

152.6

(100.0)

(50.0)

0.0

50.0

100.0

150.0

200.0

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

Order Boo king (` cr, LHS) Growth (yoy %, RHS)


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February 6, 2012 4

Exhibit 5:Dismal performance at EBITDAM level


Exhibit 6:Earnings in red


Order book analysis

NCC had a strong order inflow of ~`6,893cr during the quarter, registering yoy

growth of 152.6%, taking the total order inflow for 9MFY2012 to `9,943cr. This

was mainly on the back of `5,200cr captive power project booked by the company

during the quarter. Order book as of 9MFY2012 stands at `21,990cr (4.3x

FY2011 revenue), which is spread across nine verticals and the major contributors

include the power, building, irrigation and water segments.

Going ahead, management expects the road, building, water and electrical

segments to gather momentum and add significantly to the order book as well.

NCC is confident of bagging atleast one road order by this fiscal end and hasgiven a guidance of `14,000cr of order inflow for FY2012. However, we believe

this is aggressive given its performance so far in FY2012 and, hence, we have

factored order inflow of `11,691cr for FY2012 and `12,820cr for FY2013.

Exhibit 7:Order backlog of`21,990cr (as of 3QFY2012, `cr)


10.4

8.8

7.6

10.4 10.29.9 10.0 9.7

10.3

9.69.0

10.2

9.5

6.1

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

0.0

20.0

40.0

60.0

80.0

100.0120.0

140.0

160.0

180.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

EBITDA (` cr, LHS) EBITDAM (%, RHS)

4.0 3.5 3.5 3.8 4.1 4.0

6.7

3.8 3.83.0

2.52.0

1.0

(0.8)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

(20.0)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

PAT (` cr, LHS) PATM (%, RHS)


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February 6, 2012 5

Change in estimates

Owing to the companys poor performance in 3QFY2012 and given the macro

challenges faced by the company, we are revising our estimates downwards for

FY2012.We have factored in revenue of `4,946cr (earlier `5,095cr) for FY2012,

as we believe NCC will continue to face sluggishness in execution as no respite is

expected from the several headwinds faced by the sector.We have revised our

EBITDAM estimate downwards to 8.2% for FY2012, owing to the dismal

performance during 3QFY2012. On the earnings front, we are estimating `35cr

(earlier `91cr) for FY2012.

Exhibit 8:Change in estimates to factor in lower top-line growth and higher interest cost

(` cr) FY2012E FY2013EEarlier Estimates Revised Estimates Variation (%) Earlier Estimates Revised Estimates Variation (%)

Revenue 5,095 4,946 (2.9) 5,749 5,749 -

EBITDA 486 404 (16.7) 542 542 -

EBITDAM (%) 9.5 8.2 (14.2) 9.4 9.4 -

Interest 361 360 (0) 424 424 -

APAT 91 35(61) 94 94 -

EPS 3.6 1.4 (61.3) 3.7 3.7 -


Outlook and valuation

The current outstanding order book of NCC stands at `21,990cr (4.3x FY2011

revenue), with order inflow of `9,943cr for 9MFY2012, mainly aided by captive

power project (`5,200cr), which is notably pending FC. Further, management has

revised its revenue guidance to `5,100cr-5,200cr (our earlier revenue estimates)

for FY2012 from `5,700cr-5,800cr, which implies a growth rate of 10.3% yoy

basis for 4QFY2012, which we believe is aggressive. Hence, we are factoring in

lower revenue numbers for FY2012 (`4,946cr). Further, earnings would continue

to reel under pressure due to muted execution pace, margin under pressure and

high interest cost on the back of elevated debt levels.Hence, we recommendNeutral on the stock with a fair value of `58.


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February 6, 2012 6

Exhibit 9:Derivation of SOTP-based target price for NCC (FY2013E)

Business Segment Methodology Remarks ` cr `/share % to TPCore Construction - Parent P/E 8x FY2013E Earnings 755.0 29.4 50.6NCC International (Construction) P/E 5x FY2013E Earnings 195.0 7.6 13.1Real Estate P/BV 0.5 of equity invested; NCC's share 80.0% 48.0 1.9 3.2Road BOT Projects 215.1 8.4 14.4Brindavan Infra NPV CoE -14%, NCC's share 33.3% 12.4 0.5 0.8

Bangalore Elevated Tollway NPV CoE -14%, NCC's share 35.4% 55.3 2.2 3.7

Western UP Tollway NPV CoE -14%, NCC's share 30.0% 28.3 1.1 1.9

OB Infra NPV CoE -14%, NCC's share 64.0% 47.1 1.8 3.2

Pondicherry Tindivanam NPV CoE -14%, NCC's share 49.0% 72.0 2.8 4.8

Power venture 278.2 10.8 18.7Himachal Sorang P/BV 1.0x FY11E equity invested; NCC's share 67.0% 103.2 4.0 6.9

NCC Power P/BV 0.5x FY11E equity invested; NCC's share 55.0% 125.0 4.9 8.4

Himalaya Green P/BV 1.0x FY11E equity invested; NCC's share 54.0% 50.0 1.9 3.4

Total 1,491 58 100CMP (`) 61Upside/ (Downside) (%) (5)


Exhibit 10:Key assumptions

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013EOrder inflow 4,745 7,571 4,951 7,948 6,800 11,691 12,820Revenue 2,871 3,473 4,151 4,778 5,074 4,946 5,749Order backlog (Y/E) 7,302 11,400 12,200 15,370 16,180 24,549 30,220OB-to-sales ratio (x) 2.5 3.3 2.9 3.2 3.2 5.0 5.3


Exhibit 11:Angel EPS forecast vs. consensus

Angel forecast Bloomberg consensus Variation (%)FY2012E 1.4 3.9 (64.7)

FY2013E 3.7 4.8 (23.4)



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February 6, 2012 7

Exhibit 12:Recommendation summary

Company CMP TP Rating Top line (` cr) EPS (`) Adj. P/E OB/FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E Sales(x)

ABL 202 245 Buy 1,302 1,648 1,853 19.3 19.2 21.7 25.4 15.2 10.6 9.3 8.0 4.2CCCL 18 - Neutral 2,199 2,350 2,451 5.6 2.5 (1.1) 1.6 (20.5) 6.9 - 10.9 2.7

HCC 25 - Neutral 4,093 3,915 4,633 6.4 1.2 (3.1) 0.6 (25.8) 21.0 - 38.2 4.0

IRB Infra 178 - Neutral 2,438 3,176 3,781 24.5 13.6 14.2 13.1 (2.0) 13.1 12.6 13.7 -

ITNL 215 227 Accu. 4,049 5,169 6,609 27.8 22.3 24.4 25.7 7.4 9.6 8.8 8.4 5.2

IVRCL 57 - Neutral 5,651 5,598 6,458 6.9 5.9 3.8 4.6 (11.5) 9.6 15.1 12.3 4.5

JP Assoc. 78 88 Accu. 13,832 13,763 16,017 7.6 5.5 2.7 4.2 (12.6) 14.1 28.4 18.5 -

L&T 1,383 1,608 Buy 43,905 53,779 60,258 17.2 54.3 63.7 70.9 14.2 25.5 21.7 19.5 3.3

Madhucon 61 77 Buy 1,816 1,952 2,503 17.4 5.6 4.4 4.7 (8.1) 11.0 13.8 13.0 3.8

NCC 61 - Neutral 5,074 4,946 5,749 6.4 6.4 1.4 3.7 (24.0) 9.6 44.6 16.7 4.3Patel Engg 111 - Neutral 3,476 3,271 3,586 1.6 17.6 14.0 14.5 (9.2) 6.3 7.9 7.7 2.7

Punj Lloyd 57 - Neutral 7,850 9,585 10,592 16.2 (5.4) 1.9 2.9 - - 29.8 19.5 3.3

Sadbhav 141 157 Accu. 2,209 2,602 2,585 8.2 8.0 9.3 9.2 7.3 17.7 15.2 15.4 2.7

Simplex In. 199 233 Buy 4,889 5,562 6,485 15.2 21.5 18.9 25.9 9.8 9.3 10.5 7.7 3.1


Exhibit 13:SOTP break-up

Company Core Const. Real Estate Road BOT Invst. In Subsidiaries Others Total` % to TP ` % to TP ` % to TP ` % to TP ` % to TP `

ABL 10442 - - 141 58 - - - - 245

CCCL 17 100 - - - - - - - - 17

HCC 4 12 12 37 16 51 - - - - 32

IRB Infra 116 64 - - 61 34 4 2 - 182

ITNL 59 26 - - 143 63 - - 25 11 227

IVRCL 37 66 - - - - 19 34 - - 56

JP Assoc. 31 35 24 27 - - - - 33 37 88

L&T 1,276 79 - - - - 332 21 - - 1,608

Madhucon 23 30 2 3 52 68 - - - 77

NCC 29 51 2 3 8 14 - - 18 31 58Patel Engg 55 51 17 16 16 15 - - 19 18 106

Punj Lloyd 47 100 - - - - - - - - 47

Sadbhav 83 53 - - 75 47 - - - - 157

Simplex In. 233 100 - - - - - - - - 233



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February 6, 2012 8

Profit & loss statement (Standalone)

Y/E March ( ` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013ENet Sales 3,473 4,151 4,778 5,074 4,946 5,749Other operating income - - - - - -Total operating income 3,473 4,151 4,778 5,074 4,946 5,749% chg 21.0 19.5 15.1 6.2 (2.5) 16.2

Total Expenditure 3,113 3,778 4,294 4,586 4,542 5,208

Net Raw Materials 1,096 1,304 1,807 1,756 1,594 1,801

Other Mfg costs 1,704 2,084 2,066 2,335 2,495 2,885

Personnel 140 189 184 244 205 233

Other 173 201 237 251 248 288

EBITDA 360 374 483 488 404 542% chg 33.4 3.9 29.4 0.9 (17.1) 33.9

(% of Net Sales) 10.4 9.0 10.1 9.6 8.2 9.4

Depreciation& Amortisation 48 53 53 69 78 92

EBIT 312 320 431 419 326 450% chg 29.9 2.8 34.5 (2.7) (22.2) 38.0

(% of Net Sales) 9.0 7.7 9.0 8.3 6.6 7.8

Interest & other Charges 112 162 196 257 360 423

Other Inc. (incl pft from Ass/JV) 45 70 69 103 86 113

(% of PBT) 18.4 30.7 22.6 38.9 164.3 80.7

Recurring PBT 245 228 303 266 52 140% chg 12.1 (6.9) 33.0 (12.5) (80.3) 166.8

Extraordinary Expense/(Inc.) - - (34) - - -

PBT (reported) 245 228 337 266 52 140Tax 81 74 116 97 17 45

(% of PBT) 33.1 32.6 34.5 36.7 32.4 32.4

PAT (reported) 164 154 221 168 35 94 Add: Share of earnings of asso. - - - - - -

Less: Minority interest (MI) - - - - - -

Prior period items 2 - 4 5 - -

PAT after MI (reported) 162 154 217 163 35 94ADJ. PAT 162 154 200 163 35 94% chg 40.0 (5.0) 30.2 (18.4) (78.4) 166.8

(% of Net Sales) 4.7 3.7 4.2 3.2 0.7 1.6Basic EPS (`) (Reported) 6.9 6.5 8.4 6.4 1.4 3.7Fully Diluted EPS ( ) (Diluted) 6.3 6.0 7.8 6.4 1.4 3.7% chg 40.0 (5.0) 30.2 (18.4) (78.4) 166.8


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February 6, 2012 9

Balance sheet (Standalone)Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013ESOURCES OF FUNDSEquity Share Capital 46 46 51 51 51 51Preference Capital - - - - - -

Reserves& Surplus 1,526 1,640 2,178 2,327 2,321 2,373

Shareholders Funds 1,572 1,686 2,230 2,379 2,372 2,424Minority Interest - - - - - -Total Loans 894 1,244 1,530 2,484 2,734 3,559

Deferred Tax Liability 17 19 25 31 31 31

Total Liabilities 2,483 2,948 3,785 4,894 5,136 6,014APPLICATION OF FUNDSGross Block 662 623 756 923 1,053 1,233

Less: Acc. Depreciation 142 164 202 249 327 418

Net Block 520 459 554 675 726 815Capital Work-in-Progress 14 28 43 47 51 57

Investments 565 740 941 1,201 1,501 1,849Current Assets 3,029 3,361 4,092 4,946 4,852 5,695Inventories 549 750 754 896 874 1,011

Sundry Debtors 868 1,026 1,299 1,454 1,214 1,411

Cash 233 135 184 140 77 44

Loans & Advances 1,372 1,448 1,852 2,447 2,676 3,216

Other 6 3 3 9 11 13

Current liabilities 1,644 1,641 1,845 1,974 1,993 2,401Creditors/Adv/Other Liabilities 1,073 1,088 1,270 1,356 1,348 1,615

Mobilisation Advance & Others 483 467 480 547 560 683

Provisions 88 87 96 71 85 103

Net Current Assets 1,384 1,721 2,247 2,971 2,859 3,294Mis. Exp. not written off - - - - - -

Total Assets 2,483 2,948 3,785 4,894 5,136 6,014


10/12


February 6, 2012 10

Cash flow statement (Standalone)Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013EProfit before tax (excl MI) 245 228 337 266 52 140

Depreciation 48 53 53 69 78 92Change in Working Capital 608 435 477 768 (49) 468

Less: Other income 45 70 69 103 86 113

Direct taxes paid 112 132 116 97 17 45

Cash Flow from Operations (472) (355) (272) (635) 77 (395)(Inc.)/ Dec. in Fixed Assets (159) (7) (148) (170) (134) (186)

(Inc.)/ Dec. in Investments (88) (175) (201) (260) (300) (348)

Other income 45 70 69 103 86 113

Cash Flow from Investing (202) (113) (280) (327) (348) (421)Issue of Equity 429 - 361 - - -

Inc./(Dec.) in loans 257 350 286 954 249 826

Dividend Paid (Incl. Tax) 23 35 39 30 42 42

Others (1) 55 (6) (6) - -

Cash Flow from Financing 663 370 602 918 207 784Inc./(Dec.) in Cash (10) (98) 49 (44) (63) (33)

Opening Cash balances 243 233 135 184 140 77Closing Cash balances 233 135 184 140 77 44


11/12


February 6, 2012 11

Key ratios

Y/E March FY2008 FY2009 FY2010 FY2011 FY2012E FY2013EValuation Ratio (x)P/E (on FDEPS) 9.7 10.2 7.9 9.6 44.6 16.7P/CEPS 7.5 7.6 6.2 6.8 13.9 8.5

P/BV 1.0 0.9 0.7 0.7 0.7 0.7

Dividend yield (%) 2.1 1.8 2.1 1.6 2.3 2.3

EV/Sales 0.6 0.6 0.6 0.8 0.9 0.9

EV/EBITDA 6.2 7.2 6.0 8.0 10.5 9.4

EV / Total Assets 0.9 0.9 0.8 0.8 0.8 0.8

Order Book to Sales 3.3 2.9 3.2 3.8 5.0 5.3

Per Share Data (`)EPS (Basic) 6.9 6.5 8.4 6.4 1.4 3.7

EPS (fully diluted) 6.3 6.0 7.8 6.4 1.4 3.7

Cash EPS 8.2 8.1 9.9 9.0 4.4 7.2

DPS 1.3 1.1 1.3 1.0 1.4 1.4

Book Value 61.3 65.7 86.9 92.7 92.4 94.5

DuPont AnalysisEBIT margin 9.0 7.7 9.0 8.3 6.6 7.8

Tax retention ratio 0.7 0.7 0.7 0.6 0.7 0.7

Asset turnover (x) 1.9 1.6 1.5 1.2 1.0 1.0

ROIC (Post-tax) 11.3 8.5 8.8 6.4 4.5 5.5

Cost of Debt (Post Tax) 9.8 10.2 9.3 8.1 9.3 9.1

Leverage (x) 0.4 0.5 0.6 0.8 1.1 1.3

Operating ROE 11.9 7.6 8.5 5.0 (0.6) 0.9

Returns (%)ROACE (Pre-tax) 14.9 11.8 12.8 9.7 6.5 8.1

Angel ROIC (Pre-tax) 16.9 12.7 13.4 10.0 6.6 8.2

ROAE 12.4 9.4 10.2 7.1 1.5 3.9

Turnover ratios (x) Asset Turnover (Gross Block) 6.0 6.5 6.9 6.0 5.0 5.0

Inventory / Sales (days) 50 57 57 59 65 60

Receivables (days) 76 83 89 99 98 83

Payables (days) 144 137 126 131 141 134

WC cyc (ex-cash/mob.adv)(days) 89 120 139 176 207 191Solvency ratios (x)Net debt to equity 0.4 0.7 0.6 1.0 1.1 1.4

Net debt to EBITDA 1.8 3.0 2.8 4.8 6.6 6.5

Interest Coverage 2.8 2.0 2.2 1.6 0.9 1.1


12/12


February 6 2012 12

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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risks of such an investment.

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trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

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Disclosure of Interest Statement NCC

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

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Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)

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