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Centrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet
Leveraging brand across categories We initiate coverage on IFB Industries which is expected to benefit from market leadership in the front load washing machine segment, domestic manufacturing of top load washing machines from Q3FY15 and uptick in the refrigerator and air conditioner segments from Q4FY15. Fine blanking segment is also expected to grow at steady double digits. Stable Rupee, reducing share of traded imported goods, reduction in imported raw materials and domestic manufacturing of top load washing machines will aid margins along with turnaround in IFB Points. Improving return ratios, debt free status, better working capital cycle and generation of FCF augur well from a long term perspective.
� Maintains leadership in front loading washing machine segment: IFB Industries is expected to maintain its leadership (~47% market share) in the front load washing machine segment due to its strong product offerings and pricing. It plans to start domestic manufacturing of top load washing machines which is 90% of the washing machine market at its Goa facility in Q3FY15 and increase market share in this high volume category. With mere ~35% capacity utilization at the Goa facility for front load washing machines, it is in advanced stages of talks with a Japanese conglomerate for contract manufacturing which will aid margins and act as a natural hedge due to high imports by the company.
� To leverage IFB brand across multiple home appliances: We expect refrigerators and air conditioners to be a strong focus area accounting for 18% of sales in FY17E from 10.3% in FY14. In the India Today MDRA Consumer Survey 2014, IFB Refrigerators were overall ranked first despite its availability only through IFB Points as these products were introduced only in late FY13. Microwave category accounts for 14.5% of sales in FY14 and we expect the share of home appliances (ex-washing machines) to increase from 33% in FY11 to 42% in FY17E. IFB currently has more than 7000 dealers and ~275 IFB Points through which it markets all it products. IFB Points contributed more than 17% to sales in Q1FY15 compared to 9% in FY13.
� Strong Financials: We expect the company to post revenue CAGR of 17.2% over FY14-17E with the home appliances division expected to grow at CAGR of 18% and fine blanking division at 13.3%. Operating margins will expand from a low of 4.4% in FY14 to 9.7% in FY17E on the back of stable Rupee, reducing share of traded imported goods and reduction in imported raw materials. Domestic manufacturing of top load washing machines will aid margins along with turnaround in IFB Points. We expect the return ratio to improve significantly with RoE increasing to 20.7% by FY17E and RoCE to 18.6%. We believe the company will generate significant FCF from FY16E onwards.
� Valuation & Risks: We believe IFB is attractively positioned at 16.1x and 12.4x FY16E and FY17E PE respectively. Between FY10 and FY12 when the financial performance of the company was at its best, the stock was trading at PE valuations of 20x, ~15% discount to Whirlpool but at a premium to Symphony. We believe in the next 2 years the company will replicate its performance which it demonstrated in FY10-12 and hence command significant valuation premium going ahead. On the back of this, we initiate coverage on the stock with a target price of Rs465 (17x FY17E EPS of Rs27.4) giving ~15% discount to its best FY10-12 valuations. Key risks are aggressive pricing by the competition and limited success of new launches.
Target Price Rs465 Key Data
Bloomberg Code IFBI IN
CMP* Rs339 Curr Shares O/S (mn) 40.5
Diluted Shares O/S(mn) 40.5
Upside 37% Mkt Cap (Rsbn/USDmn) 13.7/223
Price Performance (%)* 52 Wk H / L (Rs) 344.4/45.1
1M 6M 1Yr 5 Year H / L (Rs) 344.4/38.4
IFBI IN 24.1 312.2 586.6 Daily Vol. (3M NSE Avg.) 299374
Nifty (1.0) 18.2 37.5
*as on 1 October 2014: Source: Bloomberg, Centrum Research
Shareholding pattern (%)*
Jun-14 Mar-14 Dec-13 Sep-13
Promoter 75.0 75.0 75.0 75.0
FIIs 0.04 0.04 0.04 0.04
DIIs 0.9 0.9 0.8 1.0
Others 24.1 24.1 24.2 24.0
Source: BSE, *as on 1 October 2014
Increasing share of home app (ex-Washing Machine)
Source: Company, Centrum Research
Improving operating margins
Source: Company, Centrum Research
Ankit Kedia, [email protected]; 91 22 4215 9634
Y/E Mar (Rsmn) Rev YoY (%) EBITDA EBITDA (%) Adj PAT YoY (%) EPS (Rs) RoE (%) RoCE (%) P/E (x) EV/EBITDA (x)
FY13 9,159 14.1 502 5.5 315 (1.8) 7.8 11.3 10.5 43.7 25.5
FY14 10,215 11.5 452 4.4 216 (31.3) 5.3 6.6 6.0 63.6 29.1
FY15E 12,171 19.2 868 7.1 584 170.5 14.4 15.9 13.7 23.5 14.9
FY16E 14,264 17.2 1,233 8.6 852 45.9 21.0 19.4 17.1 16.1 10.1
FY17E 16,424 15.1 1,591 9.7 1,110 30.2 27.4 20.7 18.6 12.4 7.3
Source: Company, Centrum Research Estimates
33.135.0
34.4 39.3 41.5 41.7 42.1
30
32
34
36
38
40
42
44
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
11.2
5.9 6.55.1
6.3
8.19.3
12.6
12.0 11.09.9
11.511.8 12.0
0
4
8
12
16
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
Home Appliances Fine Blanking
Consumer BUY
Initiating Coverage 7 October 2014
INDIA
IFB Industries
2 IFB Industries
Table of Contents
Maintains leadership in front load washing machine segment ........................................................ 3
Pricing the product right helps maintain leadership ............................................................................................... 3
Focus on domestic manufacturing of top load segment ....................................................................................... 4
To start contract manufacturing ...................................................................................................................................... 4
Leveraging IFB brand to other home appliances............................................................................... 5
Refrigerators & Air conidtioners to gain prominance .............................................................................................. 5
Focus on value added products like accessories & additives ................................................................................ 6
Expanding distribution network and IFB Points ........................................................................................................ 7
Fine blanking to grow at steady rate .................................................................................................. 8
Focus on 2 &4 wheeler industry ....................................................................................................................................... 8
Financials ............................................................................................................................................. 9
Home Appliances to grow ahead of fine blanking division................................................................................... 9
Margins to expand significantly ....................................................................................................................................... 9
PAT to grow at a CAGR of 97% over FY14-17E .......................................................................................................... 11
Significant improvement in return ratios and FCF generation .......................................................................... 11
Quarterly Financials ............................................................................................................................................................. 13
Valuations .......................................................................................................................................... 14
Key Risks ............................................................................................................................................. 15
Rupee depreciation ............................................................................................................................................................. 15
Aggressive pricing strategy by competition ............................................................................................................. 15
Limited success of new launches ................................................................................................................................... 15
Company Background ....................................................................................................................... 16
Annexure 1- Industry brief ................................................................................................................ 17
Washing Machines ............................................................................................................................................................... 17
Refrigerators ........................................................................................................................................................................... 18
Air conditioners ..................................................................................................................................................................... 19
Annexure 2- Company profile of competitors ................................................................................. 20
Whirlpool of India ................................................................................................................................................................. 20
LG and Samsung ................................................................................................................................................................... 21
Financials - Historical ......................................................................................................................... 22
Financials ........................................................................................................................................... 23
3 IFB Industries
Maintains leadership in front load washing machine segment
IFB Industries is expected to maintain its leadership in the front load washing machine segment with ~47% market share on the back of strong product offerings and attractive pricing, leaving behind global leaders LG and Samsung. We believe the front loading washing machine category contributes ~10-12% to overall washing machine market in the country (refer Annexure 1 for washing machine industry brief), which is very low compared to developed countries. This category contributes about 70% in developed countries like US and Europe and hence as the market expands, we expect IFB to maintain its leadership status. 100% of the front load washing machine is manufactured at the company’s Goa facility. Its other products are imported. We expect the company to post gross revenue CAGR of 13.3% to Rs8243mn over FY14-17E in the front load washing machine segment, ~10% volume growth and marginal price increase every year.
Exhibit 1: Healthy growth in front load washing machines for IFB
Source: Company, Centrum Research Estimates
Pricing the product right helps maintain leadership
IFB has one of the most exhaustive SKUs in the front load washing machine segment across categories. The company refreshes its portfolio every 6-9 months with new features which are the first in the industry and later replicated by the competition. The company recently introduced new features in its 6.5Kg category which received positive response from customers and also plans to introduce a new model in Q3FY15. Along with a strong product profile, the pricing is lower than of the competition which helps the company maintain its leadership position. In most categories product pricing of IFB is better than that of the competition for technologically superior products. IFB is the only company which offers 4-year warranty on all SKUs with availability of spare parts & accessories for 10 years attracting more customers as the competition offers only 2-year warranties.
Exhibit 2: Attractive price points helps in maintaining leadership
(Rs/unit) 5.5Kg 6Kg 6.5Kg 7Kg 8Kg
IFB 23,260 24,690 29,130 30,540 36,650
Siemens 29,940 30,500 NA 41,000 51,500
Bosch 28,499 33,490 35.490 37,990 50,990
LG 24,490 26,990 36,590 36,990 43,490
Samsung 21,500 24,240 27,990 35,900 47,500
Source: Industry, Centrum Research
In the recent India Today Group – MDRA consumer survey, IFB washing machines were ranked on top across all categories in terms of quality, value for money, durability, serviceability, confidence, user friendliness etc. We believe these attributes lead to higher brand recall and help maintain dominance in the front load washing machine category. The company has a strong 55 member R&D team with members from Italy and South Korea helping product development.
3,413 4,203 5,181 5,664 6,480 7,342 8,243
23.2 23.3
9.3
14.413.3
12.3
0
5
10
15
20
25
30
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
(Rs mn)
Front load gross sales % growth
100% of the front load washing machine is manufactured in-house
4 years warranty along with attractive pricing help in maintaining leadership
4 IFB Industries
Exhibit 3: Superior quality & value for money make IFB washing machine market leaders
Co Name Overall Rating
Quality Value for Money
Need fulfillment
Durability Pride User-Friendly Serviceability Confidence
IFB 8.12 8.16 7.96 8.19 8.05 8.02 8.14 8.28 8.26
Whirlpool 7.94 8.03 7.86 7.91 7.88 7.85 7.90 7.87 8.03
Sharp 7.94 8.03 7.77 7.77 7.84 8.00 7.71 8.10 8.10
Videocon 7.92 8.08 7.83 7.81 7.8 7.82 7.88 7.74 7.92
Panasonic 7.89 8.00 7.68 8.00 7.95 7.68 8.09 7.86 7.82
LG 7.82 7.92 7.77 7.73 7.67 7.77 7.83 7.76 7.88
Onida 7.8 7.86 7.73 7.79 7.76 7.65 7.74 7.89 7.91
Samsung 7.76 7.84 7.67 7.69 7.64 7.62 7.75 7.74 7.97
Godrej 7.73 7.75 7.71 7.81 7.72 7.66 7.73 7.71 7.77
Haier 7.66 7.92 7.27 7.46 7.65 7.69 7.69 7.50 7.54
Source:India Today Group – MDRA Consumer Survey May 2014
Focus on domestic manufacturing of top load segment
Following the success of front load washing machines, the company plans to start domestic manufacturing of top load washing machines which is ~90% of the washing machine market (Refer Annexure 1). The company will be present only in the automatic category which has 40% of the volume market. Till now the company was importing top load washing machines, but from end Q3FY15 it will manufacture it at the Goa facility. Currently, the company has minuscule market share in the top load washing machine category but plans to introduce more SKUs, new products and features to focus on the higher volume category. Hence, we expect the company to post 3x revenue jump in the top load washing machine segment over FY14-17E to Rs1800mn translating into 2-3% overall market share in a category where the company is a leader in the front load machines. However we also believe this category would be highly competitive given the large number of domestic and international players along with being a price sensitive category.
Exhibit 4: Focus now on topload washing machine
Source: Company, Centrum Research Estimates
To start contract manufacturing
Currently, the company has ~35% capacity utilization at the Goa facility for front load washing machines. To increase utilization the company is at an advanced stage of talks with a Japanese conglomerate for contract manufacturing which it expects to start in FY15. We believe it will benefit from higher utilization rate deriving healthy operating leverage leading to margin expansion and also acting as a natural hedge given the high imports of the company. We have not incorporated this in our estimates though it would be an earnings upside.
Currently exports account for less than 1% of sales of the home appliances division and IFB is trying to increase its presence in other continents. The company has deployed sales representatives in South Africa and Nigeria. It has certification for environment, energy, wash quality and other safety related issues.
781 865 891 654 886 1,380 1,800
10.8
3.0
(26.6)
35.5
55.7
30.4
(40)
(30)
(20)
(10)
0
10
20
30
40
50
60
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
(Rs mn)
Top load gross sales % growth
Expect the company to garner 2-3% market share over next 3 years from top lad segment
Contract manufacturing to offer operating leverage and act as natural hedge against imports
5 IFB Industries
Leveraging IFB brand to other home appliances
While the brand IFB is synonymous with front load washing machines, the company is using this brand for other home appliances as well. We expect the share of other home appliances to increase from 33% in FY11 to 42% in FY17E. Apart from washing machines, the company has a strong presence in the microwave category which accounts for 14.5% of sales in FY14. Sale of dishwashers has been flat for three years at ~Rs420mn. This was below expectations of the management. However, it is optimistic of boosting sales given its strong product quality, difficulty in finding house helps, growth of nuclear families and superior hygiene needs.
Exhibit 5: Revenue mix across home appliance categories
FY11 FY14 FY17E
Source: Company, Centrum Research
Exhibit 6: Increasing share of home appliances – ex washing machine
Source: Company, Centrum Research Estimates
Refrigerators & Air conidtioners to gain prominance
We expect refrigerators and air conditioners to be the strong focus area for the company going ahead and expect sales of 18% in FY17E from 10.3% in FY14. The company introduced these products in late FY13 in the domestic market through IFB Points only. ACs launched earlier did not meet quality specifications and consumer expectations and hence they were launched again in Q1FY15 and have shown strong demand which resulted in more than Rs500mn gross revenues in Q1FY15. The AC is priced at a premium to Voltas and Blue Star and is present across categories 1 Ton, 1.5 Ton and 2 Ton. Energy rating plays a crucial role in selling ACs and most of the SKUs are 2/3 Star for IFB (Recently there was a change in the energy rating system). We expect the AC sales to grow at a CAGR of 27% over FY14-17E to R1916mn (Refer Annexure 1 for industry brief on ACs).
In the refrigerator category, the company has a presence in the high capacity and premium segment. Plans to introduce new products by end of Q3FY15 in the low capacity categories will boost sales
54.5%
12.5%
18.2%
0.0%
6.7%
5.2% 0.0%1.4% 1.5%
54.5%
6.3%
14.5%
1.3%
6.5%
4.0%
9.1%1.9% 1.9%
47.5%
10.4%
10.8%
7.2%
6.4%
3.0%
11.0%1.9% 1.7%
Washing Machine - Front Load Washing Machine - Top Load Microwave ovens Refrigerator Accessories and additives
Dishwashers Air conditioners Others Spares
33.1 35.0 34.4 39.3 41.5 41.7 42.1
31.4
16.9
28.2 27.8
19.3
17.3
10
15
20
25
30
35
30
32
34
36
38
40
42
44
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
(%)
Gross HA Sales ex- Washing machine % growth (RHS)
New products expected to be launched from Q3FY15 end
6 IFB Industries
going forward. The management gained confidence from the India Today MDRA Consumer Survey 2014 where IFB Refrigerators were overall ranked first despite having a presence only at IFB Points and limited sales. Though this could be a one off survey, we believe directionally the company is taking the right path in getting the products quality right. Hence, the company is expected to up its ante in the category which we expect will boost sales to Rs1241mn by FY17E. While these categories are not high margin, we believe they complete a bouquet of products for the company to be offered to customers and help in building brand from a long term perspective.
Exhibit 7: Growth in refrigerator sales Exhibit 8: Growth in air conditioner sales
Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates
Exhibit 9: User friendly IFB refrigerators are most popular among consumers
Co Name Overall Rating
Quality Value for Money
Need fulfillment
Durability Pride User-Friendly Serviceability Confidence
IFB 8.14 8.21 8.32 8.07 7.96 8.11 8.25 7.79 8.00
Panasonic 8.06 8.15 7.94 7.97 8.15 7.88 7.94 7.94 8.21
Samsung 7.99 8.08 7.95 7.96 7.90 7.87 7.95 7.85 8.07
Whirlpool 7.91 8.04 7.83 7.87 7.77 7.73 7.86 7.83 7.95
Videocon 7.89 7.99 7.79 7.87 7.83 7.86 7.8 7.85 7.88
Sharp 7.88 7.88 7.8 7.8 8.08 8.04 8.00 7.68 7.76
Toshiba 7.88 7.96 7.79 7.83 7.83 7.54 7.67 8.00 8.17
LG 7.82 7.94 7.77 7.72 7.70 7.73 7.79 7.74 7.85
Electrolux 7.75 7.98 7.76 7.61 7.72 7.48 7.41 7.72 7.54
Godrej 7.75 7.88 7.74 7.67 7.64 7.62 7.67 7.57 7.75
Source: India Today Group – MDRA Consumer Survey May 2014
Focus on value added products like accessories & additives
Sales of additives and accessories (for running and maintenance of products) have become a focus area for the company which is expected to contribute well both to topline and profitability. Additives and accessories for washing machines, dishwashers and microwaves account for the bulk of sales. We expect this to grow at a CAGR of 18% over FY14-17E against 17% in FY11-17E and contribute 6-7% to sales.
Exhibit 10: Focus on accessories & additives
Source: Company, Centrum Research Estimates
132662
993 1,2410
200
400
600
800
1,000
1,200
1,400
FY14 FY15E FY16E FY17E
(Rs mn)
123 943 1,226 1,533 1,9160
400
800
1,200
1,600
2,000
FY13 FY14 FY15E FY16E FY17E(Rs mn)
422 501 575 675 797 940 1,109
6.7
6.4
6.2
6.5
6.36.3
6.4
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
0
200
400
600
800
1,000
1,200
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
(Rs mn)
Accessories & Additives Gross sales % of Home Appliances Sales
7 IFB Industries
Expanding distribution network and IFB Points
IFB currently has more than 7000 dealers across India against 30K+ for Samsung & LG. The company plans to add ~175 dealers every quarter and focus more on North and West regions which are lagging behind South India. New 183 dealers added in Q1FY15 accounted for Rs165mn of sales in Q1FY15 itself. The company also currently has 550 service franchises and plans to increase this to 575 by the year end due to its pan India presence. Historically, the pain point of the company was stagnant distribution reach and service network which it improved in the last 2/3 years. This is expected to show results in coming years. The company also has 23 service training centers and plans to add 4 more by FY15. It also has its own call center in Goa operational since Nov 2012 and outsourced call centers in Munnar and Hyderabad. The service center in Goa focuses on outbound calls to gauge customer satisfaction and reduce customer issues through data analytics.
Exhibit 11: Increase in dealer addition / service franchisee Exhibit 12: Distribution of dealers/IFB Points
Source: Company, Centrum Research Source: Company, Centrum Research
IFB Points are exclusive franchise-run retail stores and company owned outlets which the company has started to ramp up in the last couple of years. Through these points company markets all its products and caters to demand in Tier-I, II and III cities. Some of these products are exclusively marketed through IFB Points. The addition of high potential categories such as refrigerators and air conditioners makes IFB Points highly viable for franchise. IFB Points contributed more than 17% to sales in Q1FY15 compared to 9% in FY13. The company reimburses franchise for the initial operating cost such as rentals etc and charges the same to P&L account. We believe this cost is more than offset by entry into other new product categories. Currently it has ~275 IFB Points of which ~30% are profitable. It has also closed 58 IFB Points till Q1FY15 owning to bad selection of locations and profitability issues.
The company is also focussing on sales through its own website which has more than 1.6lac visitors/month. Sale from this channel was Rs89mn in FY14 and Rs39mn in Q1FY15.
Exhibit 13: Increasing contribution from IFB Points Exhibit 14: Home appliances sales across geographies
Source: Company, Centrum Research Source: Company, Centrum Research
450
306
389
240
183
431461 481
535 550
0
100
200
300
400
500
600
Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15
(Nos)
Dealer Addition Service Franchaisee
0%
10%
20%
30%
40%
50%
South North West East
Dealers IFB Points
9.0% 15.0% 17.0%5%
7%
9%
11%
13%
15%
17%
19%
FY13 FY14 Q1FY15
(%)
23%
53%
6%
18%
North South East West
IFB Points account for 17% of sales in FY14 against 9% in FY13
8 IFB Industries
Fine blanking to grow at steady rate
Focus on 2 &4 wheeler industry
The fine blanking division caters to the 2W & 4W industry with more than 85% of the revenues coming from these. It manufactures components such as cushion plates for seat recliners, K12 tongue for seat belt assembly, door latches, gate assembly for gear transmission, gear shift selectors, interlocks and transmission, rotor segments for aircrafts, plate valves for compressors and face comp drives, gears, cam plate assemblies, and sprockets for two wheelers. Clients for its engineering products include Maruti Suzuki, Ford India, Fiat India, Toyota Kirloskar Motors, Lucas TVS, Brakes India, Rane TRW, Bosch Chasis, TVS Motor, Yamaha Motorcycles, Honda Motorcycles & Scooters India, Royal Enfield, Hero, L&T, SKF, etc. Growth of this segment has always been higher than that of the industry or in-line. Hence going forward we believe revenues will grow at a CAGR of 13.3% over FY14-17E in-line with the industry. Margins in this segment will be around 11-12% on the back of small operating leverage with topline growth. The company has also invested in automation and is focused on improving internal efficiencies to increase profitability.
In November 2013 the company entered the after-market business of 2 wheeler motorcycle chains and sprocket kits under the brand name Ultramiles. Being a customer facing business and in brand building phase, this business posted marginal operating loss of Rs3mn in Q1FY15.
Exhibit 15: Fine Blanking to grow in-line with industry Exhibit 16: Margins to improve
Source: SIAM, Company, Centrum Research Estimates Source: Company, Centrum Research Estimates
Exhibit 17: Sales mix – FY13 Exhibit 18: Sales mix – FY14
Source: Company, Centrum Research
(10)
(5)
0
5
10
15
20
25
30
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
2W Industry 4W Industry IFB - Fine Blanking Division
819
814
1,030
1,280
1,466
1,560
1,775
2,021
2,283
2,579
18.3
13.0
17.1
12.612.0
11.09.9
11.5 11.8 12.0
5
7
9
11
13
15
17
19
0
500
1,000
1,500
2,000
2,500
3,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14FY15EFY16EFY17E
(%)
(Rs mn)
Revenue Operating Margins
52%
32%
6%
4%
6%
40%
49%
3%3%
5%
4 Wheeler 2 Wheeler Others Heavy Vehicle Electrical
9 IFB Industries
Financials
Home Appliances to grow ahead of fine blanking division
We expect the company to post revenue CAGR of 17.2% over FY14-17E to Rs16424mn with home appliances division expected to grow at CAGR of 18% and fine blanking division at 13.3%. We believe recovery in consumer demand, focus on new categories such as refrigerators and air conditioners and in house manufacturing of top load washing machines will help the home appliances division grow faster. Fine blanking division will grow on the back of increasing volumes in 2 and 4-wheeler segments. Hence we believe the share of home appliances division will increase to 84% in FY17E against 81% in FY11.
Exhibit 19: Healthy sales growth expected Exhibit 20: Home app to grow ahead of fine blanking
Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates
Margins to expand significantly
We expect margins of the company to expand from a low of 4.4% in FY14 to 9.7% in FY17E on the back of significant margin improvement in the home appliances division. We have modeled margin expansion at 9.3% from 5.1% for the home appliances division while the fine blanking division’s margins will expand on the back of strong operating leverage, focus on automation and internal efficiencies.
Gross margins for the company were impacted significantly from FY11 onwards as the rupee and gross margins fell from highs of 48.5% in FY10 to 41.7% in FY14. Going forward we expect gross margins to improve marginally to 42.1% on the back of stable Rupee, smaller share of traded imported goods and reduction in imported raw materials.
Operating margins of the company was further impacted on the back of forex losses due to high proportion of imports. Adjusting for forex loss margins would have been 5.8% in FY14. Hence the company has now started to do 100% currency hedging which will reduce losses.
Domestic manufacturing of top load washing machines will aid margins. Turnaround of IFB Points will also reduce costs and higher sales from these outlets will increase margins as the company earns better margins from IFB Points.
Exhibit 21: Margins to expand significantly Exhibit 22: Home appliances to show margin expansion
Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates
2,886
3,826
4,509
5,434
6,784
8,030
9,159
10,215
12,171
14,264
16,424
0.0
32.6
17.820.5
24.9
18.4
14.111.5
19.217.2
15.1
0
5
10
15
20
25
30
35
0
4,000
8,000
12,000
16,000
20,000
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16E
FY17E
(%)
(Rs mn)
Net Sales Growth (RHS)3,543
3,736
4,472
5,517
6,563
7,600
8,440
10,150
11,981
13,845819
814 1,030
1,280
1,466
1,560
1,775 2,021 2,283 2,579
35
2035
4035
6035
8035
10035
12035
14035
16035
18035
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(Rs mn)
-29
161
398
530
604
412
502
452
868
1,233
1,591
4.2
8.89.8
8.9
5.1 5.5
4.4
7.1
8.6
9.7
0
2
4
6
8
10
12
(400)
0
400
800
1,200
1,600
2,000
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
(Rs mn)
Operating profit Operating Margins (RHS)
4.1
10.5 10.7 11.2
5.9 6.55.1
6.38.1
9.3
18.3
13.0
17.1
12.6 12.011.0
9.911.5 11.8 12.0
0
4
8
12
16
20
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
Home Appliances Fine Blanking
10 IFB Industries
Exhibit 23: Gross margins to expand marginally
Source: Company, Centrum Research Estimates
Exhibit 24: Share of traded goods to reduce Exhibit 25: Imported RM component to reduce further…
Source: Company, Centrum Research Estimates Source: Company, Centrum Research
Exhibit 26: ..reducing forex losses seen over years Exhibit 27: Adj. Operating margins for forex losses
Source: Company, Centrum Research Source: Company, Centrum Research
A&P spends of the company is the highest among listed peers at ~5.5% of sales. It still refrains itself from expensive advertisement as it is not in a position to compete with global competitors. We believe with strong topline growth, A&P expenditure will not grow in the same proportion aiding margin expansion which is the case for other listed peers.
48.0 48.1
45.9
48.5
44.7
40.840.1
41.7 41.9 42.0 42.1
35
37
39
41
43
45
47
49
51
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
61.2
66.7
58.1
57.1
58.8
56.3
54.4
55.5
56.1
38.8
33.3
41.9
42.9
41.2
43.7
45.6
44.5
43.9
0%
20%
40%
60%
80%
100%
FY09 FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
Manufactured Traded
31.7
32.5
34.4
22.4
28.8
27.6
22.3
68.3
67.5
65.6
77.6
71.2
72.4
77.7
0%
20%
40%
60%
80%
100%
FY08 FY09 FY10 FY11 FY12 FY13 FY14Imported Domestic
100 0
66.9
2.9
143.9
0
20
40
60
80
100
120
140
160
FY09 FY10 FY11 FY12 FY13 FY14
(Rs mn)
8.89.8
8.9
5.1 5.54.4
9.1 9.8 8.9 6.0 5.5 5.80.0
2.0
4.0
6.0
8.0
10.0
12.0
FY09 FY10 FY11 FY12 FY13 FY14
(%)
Operating Margin Operating Margin - ex Fx Loss
11 IFB Industries
Exhibit 28: A&P spends highest among listed peers Exhibit 29: A&P Spends to remain ~5% of sales
Source: Companies, Centrum Research Source: Company, Centrum Research Estimates
PAT to grow at a CAGR of 97% over FY14-17E
We expect profitability to grow at a CAGR of 71% over FY14-17E to Rs1110mn on the back of healthy operating performance. Change in depreciation policy from Q1FY15 to straight line method against written down value method along with re-assessing the useful life of the asset will decrease the depreciation of the company from R226mn in FY14 to Rs137mn further aiding profitability growth.
Exhibit 30: PAT to grow at A CAGR of 72% over FY14-17E
Source: Company, Centrum Research Estimates
Significant improvement in return ratios and FCF generation
We expect the return ratio to improve significantly with RoE to 20.7% by FY17E and RoCE to 18.6% by FY17E. Fine blanking business will need continuous capex and hence we expect the RoCE of this division to improve marginally to 14.2% by FY17E while the home appliances’ RoCE will improve to historic levels of 52% by FY17E.
We expect the capex of the company to be Rs500mn in FY15E for a new manufacturing facility in Goa for top load washing machine along with small investments in the fine blanking business. In FY16E and FY17E we have modelled Rs350mn capex each year for the fine blanking business and maintenance capex in the home appliance business. Given this backdrop, we believe the company will generate significant FCF from FY16E onwards.
Debtor days on a blended basis are ~25 days, with home appliance debtor days in single digits. The company does not offer credit facility and hence is not present in modern retail outlets for all products. Hence net working capital for the company is 23 days as it maintains around 2 months of inventory for raw material and finished goods.
4.8
4.6 4.7 4.9
5.5
3.4
2.6
2.0
1.8
1.7
3.2
3.9
3.8 4.1
4.9
4.4
3.6
5.3
4.4 4.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
FY10 FY11 FY12 FY13 FY14
(xxx)
IFB Whirlpool Symphony Hitachi
172 245 200 261 315 378 444 566 634 745 860
6.0
6.4
4.44.8 4.6 4.7 4.9
5.55.2 5.2 5.2
3
4
5
6
7
0
200
400
600
800
1,000
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(%)
(Rs mn)
A&P Spends % of sales
140 370 538 503 320 315 216 584 852 1,110
(231.7)
164.9
45.3
(6.4)(36.3)
(1.8)(31.3)
170.5
45.9 30.2
(300)
(250)
(200)
(150)
(100)
(50)
0
50
100
150
200
0
200
400
600
800
1,000
1,200
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
(Rs mn)
Adj Net Profit % Growth
Debtor days in home appliances division is in single digits
12 IFB Industries
Exhibit 31: Improvement in return ratios Exhibit 32: Home appliances RoCE to improve significantly
Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates
Exhibit 33: DuPont Analysis
FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
PAT/Sales (x) 0.10 0.07 0.04 0.03 0.02 0.05 0.06 0.07
Sales/Assets (x) 4.03 3.58 3.35 3.04 2.71 2.78 2.80 2.70
Assets/Equity (x) 1.08 1.04 1.06 1.08 1.15 1.19 1.16 1.13
RoE (%) 43.0 27.6 13.5 11.3 6.6 15.9 19.4 20.7
Source: Company, Centrum Research Estimates
Exhibit 34: Expected to generate FCF Exhibit 35: Working capital under check
Source: Company, Centrum Research Estimates Source: Company, Centrum Research
40.0
26.7
13.410.5
6.0
13.717.1 18.6
43.0
27.6
14.111.3
6.6
15.919.4 20.7
0
8
16
24
32
40
48
FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
RoCE RoE
54.8
48.9
50.9
20.0 24.8
17.7
28.1
41.2 52.2
25.1
36.8
27.6
21.8
12.6
8.6
13.3
13.6
14.2
0
10
20
30
40
50
60
FY09 FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
(%)
Home Appliances Fine Blanking
221 269 229 177
237
(134)(196)
(375)
163
414
675
(600)
(400)
(200)
0
200
400
600
800
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
(Rs mn)
5060
5157
48 50 53 56
21 23 16 19 21 21 1926
107 108
75 74 7769
6572
0
20
40
60
80
100
120
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
(Days)
Inventory Days Debtor Days Creditors Days
13 IFB Industries
Quarterly Financials
Exhibit 36: Quarterly Financials
Y/E Mar (Rs mn) Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15
Total Income 2,333 2,681 2,154 2,307 2,363 2,781 2,764 2,906
COGS 1,400 1,706 1,278 1,321 1,343 1,656 1,638 1,695
Staff cost 208 205 244 239 257 249 235 285
Admin & other expenses 582 587 575 682 706 709 729 711
Total Expenditure 2,191 2,498 2,097 2,242 2,305 2,614 2,602 2,690
EBITDA 142 183 57 65 58 167 163 216
Depreciation 43 48 51 51 54 60 61 5
EBIT 99 136 6 14 4 107 102 211
Interest 1 1 0 1 4 5 5 5
Other Income 30 29 44 18 21 13 31 12
Exceptional Item 0 0 0 0 0 0 0 0
PBT 129 164 49 30 21 115 128 218
Total tax 38 44 8 8 5 26 37 44
Reported PAT 91 120 41 21 15 88 91 174
Adj PAT 91 120 41 21 15 88 91 174
Growth %
Revenue 15.2 14.4 3.5 15.8 1.3 3.7 28.4 26.0
EBIDTA 20.1 51.6 40.6 (46.1) (59.5) (8.9) 186.1 233.4
Adj PAT 16.1 11.4 (5.5) (66.2) (83.1) (26.3) 122.5 714.6
Margins %
Gross Margin 40.0 36.4 40.7 42.7 43.2 40.5 40.7 41.7
EBIDTA 6.1 6.8 2.6 2.8 2.4 6.0 5.9 7.4
EBIT 4.2 5.1 0.3 0.6 0.2 3.8 3.7 7.3
Adj PAT 3.9 4.5 1.9 0.9 0.6 3.2 3.3 6.0
Segmental Breakup
Home Appliances - Sales 1,971 2,299 1,746 1,953 1,840 2,310 2,237 2,391
YoY Growth (%) 17.0 15.4 5.7 23.3 (6.6) 0.5 28.1 22.4
Engineering - Sales 362 382 408 354 423 471 528 515
YoY Growth (%) 6.5 8.5 (5.1) (13.2) 16.8 23.2 29.4 45.7
Home Appliances - EBIT 122 158 28 41 23 114 118 190
EBIT Margin (%) 6.2 6.9 1.6 2.1 1.2 4.9 5.3 7.9
Engineering - EBIT 19.3 26.2 23.6 9.3 24.5 29.7 33.7 56.5
EBIT Margin (%) 5.3 6.9 5.8 2.6 5.8 6.3 6.4 11.0
Source: Company, Centrum Research
14 IFB Industries
Valuations
IFB Industries is expected to benefit from market leadership in the front load washing machine segment, domestic manufacturing of the top load washing machine from Q3FY15 and expected uptick in refrigerators and air conditioners from Q4FY15. This will not only aid revenue growth but expand margins of the company coupled with steady growth in the fine blanking segment. Improving return ratios, virtually debt free status, improving working capital cycle coupled with generation of FCF augur well from a long a term perspective. Hence we have modelled 17.2% revenue and 72% PAT CAGR over FY14-17E on the back of steady margin expansion with RoE improving to 20.7% in FY17E.
We believe the stock is attractively positioned against peers and is currently trading at 16.1x and 12.4x FY16E and FY17E respectively.
Exhibit 37: Comparative Valuations – Home appliance division
Company Mkt Cap (Rs mn)
CAGR FY14-FY16E (%) EBITDA Margin (%) PE (x) EV/EBITDA (x) RoE (%) Div Yield (%)
Rev. EBITDA PAT FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E
IFB Industries* 13,744 18.2 65.2 98.6 4.4 7.1 8.6 63.6 23.5 16.1 29.1 14.9 10.1 6.6 15.9 19.4 0.0 0.0 0.0
Whirlpool of India 55,050 18.0 31.2 42.2 8.0 9.1 9.9 44.8 29.3 22.2 11.7 17.1 13.4 18.1 21.7 23.1 0.0 0.1 0.1
Hitachi Home 17,656 21.3 50.5 199.3 5.6 8.0 8.5 218.6 33.0 24.5 9.8 17.4 13.7 3.4 20.4 22.6 0.9 0.3 0.4
Symphony 47,552 25.2 21.6 25.4 26.3 24.1 24.8 45.0 36.4 28.5 24.4 29.3 22.7 42.5 41.5 42.8 0.2 1.2 1.3
Global peers USD mn
Toshiba Corp 19,410 2.7 15.0 89.5 7.3 8.3 9.2 42.0 15.0 11.7 7.4 6.8 5.8 4.5 10.7 13.1 1.8 1.7 1.9
Panasonic Corp 28,950 1.2 4.5 31.3 8.2 8.4 8.8 24.9 18.5 14.6 4.4 4.8 4.2 8.6 9.8 11.5 1.1 1.2 1.4
Sony Corp 19,451 0.7 31.5 NA 5.2 5.0 8.9 (15.7) (14.1) 16.4 5.2 6.4 3.3 (5.8) (6.8) 5.7 1.3 0.7 1.1
Sharp Corp/Japan 4,783 (0.4) (2.7) 88.2 7.9 7.3 7.6 38.2 18.7 13.8 5.5 5.8 5.2 7.2 15.3 19.0 0.0 0.2 0.3
Whirlpool Corp 11,360 7.6 15.3 19.5 9.5 10.3 10.9 14.0 12.5 10.5 7.4 6.7 5.6 18.0 18.3 19.4 1.5 2.0 2.2
LG Electronics Inc 9,649 4.6 13.6 165.6 5.5 6.4 6.5 64.3 11.1 8.5 5.8 4.4 4.0 1.4 7.9 9.3 0.3 0.3 0.3
Electrolux AB 8,039 4.8 15.6 148.2 6.8 6.8 8.3 79.9 17.9 13.3 7.6 8.8 7.1 4.5 16.8 24.6 3.9 3.4 3.6
Samsung Elect. 159,872 (3.7) (6.5) (13.4) 23.3 21.7 21.9 5.8 7.9 8.2 2.7 2.7 2.3 19.8 14.9 12.7 1.0 1.4 1.6
Canon Inc 43,332 1.0 3.2 6.9 16.4 17.0 17.1 17.8 16.1 15.1 5.1 6.3 6.0 8.4 8.4 8.7 3.9 3.7 3.7
Source: Bloomberg consensus, Companies; *Centrum Research Estimates
Exhibit 38: Rolling forward EV/EBITDA chart Exhibit 39: Rolling forward P/E chart
Source: Bloomberg, Company, Centrum Research Estimates Source: Bloomberg, Company, Centrum Research Estimates
Valuation Method 1
Stock has historically traded at ~30% discount to Whirlpool and marginal premium to Symphony which has turned to discount in the past two years. Between FY10 and FY12 when the financial performance of the company was at its best, the stock was trading at PE valuations of 20x, ~15% discount to Whirlpool but at a premium to Symphony. We believe in the next 2 years the company will replicate its performance which it demonstrated in FY10-12 and hence command significant valuation premium going ahead.
On the back of this, we initiate coverage on the stock with a target price of Rs465 (17x FY17E EPS of Rs27.4) giving ~15% discount to its best FY10-12 valuations.
0
2
4
6
8
10
12
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
EV/EBITDA Mean
Mean + Std Dev Mean - Std Dev
0
5
10
15
20
25
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
P/E Mean
Mean + Std Dev Mean - Std Dev
15 IFB Industries
Exhibit 40: IFB premium /(discount) to Whirlpool Exhibit 41: IFB premium /(discount) to Symphony
Source: Bloomberg, Company, Centrum Research Estimates Source: Bloomberg, Company, Centrum Research Estimates
Valuation method 2: SoTP Valuation
Company has two varied business lines, an engineering division and home appliance division. Hence we consider SoTP valuation methodology valuing both the divisions separately. In this method, we arrive at a valuation of Rs457/share assigning 18x multiple to the home appliance division and 10x multiple to the engineering division. For the calculation of EPS of individual businesses, we have taken our EBIT estimates and according to the share of revenues, divided the other income to both the businesses. Tax rate has been taken similar for both divisions in arriving at the individual profitability. We have also undertaken this exercise to ascribe value to individual businesses in case the company plans to demerge one of the businesses later.
Exhibit 42: SoTP valuations
FY17E EPS (Rs) PE (x) Value/Share (Rs)
Home Appliances 22.8 18 411
Engineering 4.6 10 46
Total 27.4
457
Source: Centrum Research Estimates
Exhibit 43: Peer Valuations – Engineering division
Company Mkt Cap (Rs mn)
CAGR FY14-FY16E (%) EBITDA Margin (%) PE (x) EV/EBITDA (x) RoE (%) Div Yield (%)
Rev. EBITDA PAT FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E
MM Forgings 5,570 20.2 26.4 40.1 19.7 22.1 21.8 19.0 12.0 9.7 3.5 NA NA 15.9 20.1 20.5 3.4 0.6 0.6
Ramkrishna Forg. 6,428 52.3 74.9 135.5 13.2 15.4 17.4 70.1 54.4 14.6 13.1 12.4 6.3 2.9 3.6 12.1 0.9 0.4 0.4
LG Balakrishnan 10,837 13.8 17.3 21.0 11.6 11.9 12.3 17.5 14.6 11.9 3.5 8.2 6.9 21.8 21.6 22.2 NA 1.1 1.4
Source: Bloomberg consensus
We are using valuation method 1 for our final target price while valuation method 2 is used only to reconfirm valuation thesis.
Key Risks
Rupee depreciation
As seen in FY12/FY13, depreciation of Rupee can significantly impact gross margins of the company and profitability given that ~22% of raw materials and more than 40% of the goods sold are imported.
Aggressive pricing strategy by competition
IFB operates in highly competitive categories with competition not only from domestic players but also from global players with deep pockets. It will be difficult for the company to increase pricing in new categories including refrigerators and air conditioners due to its small market share.
Limited success of new launches
Company has entered new categories such as refrigerators and air conditioners. It will need to constantly innovate and regularly update its product offerings to meet customer expectations. Limited success in new categories could impact margins.
-80%
-60%
-40%
-20%
0%
20%
Sep-06
Mar-0
7
Sep-07
Mar-0
8
Sep-08
Mar-0
9
Sep-09
Mar-1
0
Sep-10
Mar-1
1
Sep-11
Mar-1
2
Sep-12
Mar-1
3
Sep-13
Mar-1
4
Sep-14
-90.0%
-50.0%
-10.0%
30.0%
70.0%
110.0%
150.0%
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
16 IFB Industries
Exhibit 44: Shareholding pattern (%)
Q1FY15 Q4FY14 Q3FY14 Q2FY14
Promoter 75.0 75.0 75.0 75.0
FIIs 0.04 0.04 0.04 0.04
DIIs 0.9 0.9 0.8 1.0
Others 24.1 24.1 24.2 24.0
Source: BSE
Company Background
IFB Industries Limited originally known as Indian Fine Blanks Limited started its operations in India during 1974 in collaboration with Hienrich Schmid AG of Switzerland. The product range includes Fine Blanked components, tools and related machine tools like Straighteners, Decoilers, Strip loaders and others. The Engineering divisions are located at Kolkata & Bangalore. The Bangalore unit, apart from Fine Blanked components, manufactures motors for White goods as well as Automotive applications.
In 1991 company started manufacturing and marketing of consumer durables (~84% of revenues). It is a market leader in front load washing machines and has a manufacturing facility in Goa. Other products, microwave ovens, refrigerators, air conditioners etc are imported.
Exhibit 45: Board of Directors
Designation Name Profile
Executive Chairman Mr. Bijon Nag
Mr. Bijon Nag is the Promoter and Executive Chairman of the Company. Mr. Nag is a mechanical engineer and a prominent industrialist having more than three decades of vast experience in machine tool and engineering industries. Mr. Bijon Nag is also Chairman of IFB Agro Industries Ltd and director of IFB Automotive Pvt. Ltd., and Maruti Insurance Broking Pvt Ltd.
Joint Executive Chairman & Managing Director
Mr. Bikram Nag
Mr. Bikram Nag is a BBA from Richmond College, U.K. He has more than seventeen years of experience in the field of business management. Mr. Nag is also Joint Executive Chairman of IFB Agro Industries Ltd and director of IFB Automotive Pvt. Ltd., Travel Systems Ltd. and Thai Automotive & Appliances Ltd.
Director & Chief Financial Officer
Mr. Prabir Chatterjee
Mr. Prabir Chatterjee is a bachelor of science from Ramakrishna Mission, Calcutta University and a Cost Accountant from ICWAI. He started his career in Dunlop India Limited and later joined IFB Industries Limited in 2000 as GM-Finance and worked in different capacities and was elevated to the post of CFO in 2011.
Director Dr. Rathindra Nath Mitra
Dr. Rathindra Nath Mitra, 67, has completed his B.SC (Hons), M.Sc, Ph.D from IIT, Kharagpur. He worked in several organizations and retired as Chief Manager (Systems) from Hindustan Copper Ltd. He works as consultant for IT (Systems & control) for his clients. Dr. Mitra is specialized in process development and IT Systems. He is a guest lecturer of prestigious educational institutions and take interest in training, publishing papers etc
Director Dr. Tridibesh Mukherjee
Dr. Tridibesh Mukherjee, 71, is a Metallurgical Engineer and has a Ph.D from University of Sheffield, U.K. He was Dy Managing Director (Steel) of Tata Steel Ltd and then after the takeover of Corus, Director (Integration and Technology) of Tata Steel Group. Dr. Mukherjee was chairman of several reputed companies like Tata Metaliks Ltd etc and was also on the Board of many Tata Group companies. He is currently on the Board of reputed public companies like TIL India, Nicco Corporation, Bharat Forge, Rane (Madras), Tata Advanced Materials.
Director Mr. Radharaman Bhattacharya
Mr. Radharaman Bhattacharya, 80, is a senior Chartered Accountant having more than 43 years of rich professional experience. Mr. Bhattacharya is a practicing chartered accountant and is specialized in the field of accountancy and taxation matters.
Director Mr. R. Muralidhar
Mr. R. Muralidhar, 70, is a MBA from IIM (Ahmedabad). Mr. Muralidhar has worked in several reputed companies like Warner Hindustan (Parke Davis), Hindustan Lever, EID Parry, Max India, Bharat Technologies and also in IFB Industries Limited. He specializes in Administration and Management and is actively associated with organizations in the field of education and training.
Director Mr. Sudip Banerjee
Mr. Sudip Banerjee, 54, has diploma in Management from AIMA. He joined Wipro Technologies as Marketing Executive and got elevated to the position of President over years. He worked as CEO at L&T Infotech Limited. He specializes in the field of HR, IT including services. He is a member of advisory Board of Head-Held –High – Foundation and of TAPMI Business School, Jaipur. Mr. Banerjee is an Independent Director in Kesoram Industries.
Source: Company, Centrum Research
In 2001, the company was declared sick due to mounting debt and an inability to repay. Post BIFR and settlement with creditors in 2009, the company became debt free post preferential equity infusion by the promoters. Currently the company is virtually debt fee
17 IFB Industries
Annexure 1- Industry brief
Washing Machines
The washing machine segment was valued at Rs61.7bn in FY14 at 5mn units and grew 8.7% last year. It is expected to grow by ~9-10% in FY15 in volume terms. This category has experienced continued slowdown in the past 3 years due to rising input costs, high inflation and poor consumer sentiment. However, with prices expected to remain stable, demand will pick up in FY15. Changing environmental dynamics, urbanization, and rising income levels are driving growth of this segment. The number of middle-class households is expected to rise to 53.3 million by 2015, and 113.8 million by 2025 presenting a huge potential for washing machines.
Exhibit 46: Washing machine market size Exhibit 47: Market Share across players
Source: ADI Media Research, Centrum Research Source: ADI Media Research, Centrum Research
The semi-automatic segment continues to dominate in volume terms, at 60% but is slowly losing share to fully automatic machines which increased its share from 30% in 2009 to 40% in FY14. LG dominates the segment with a 34.1% market share in volume terms in 2013-14 and is also the leader in both automatic and semi-automatic segments. Videocon, given its low price, has ~27% market share in the semi-automatic segment while IFB has a presence only in the automatic category. Consumers are slowly beginning to prefer high capacity models with 6.5Kg+ washing machines now accounting for more than 65% of volumes.
Exhibit 48: Automatic segment market share Exhibit 49: Semi-Automatic segment market share
Source: ADI Media Research, Centrum Research Source: ADI Media Research, Centrum Research
56.3%
43.7% Fully Automatic
Semi Automatic
2013-14
Market Size 6170 Cr
34.1%
17.8%15.5%
13.1%
9.0%
5.5%
5.0%
LG
Videocon
Whirlpool
Samsung
Godrej
IFB
Others
2013-14
Market Size 5000000 units
32%
25%
12%
12%
6%
5%
9%
LG
Samsung
Whirlpool
IFB
Godrej
Videocon
Others
2013-14
Market Size 2000000 units
36%
27%
18%
11%
5% 3%LG
Videocon
Whirlpool
Godrej
Samsung
Others
2013-14
Market Size 3000000 units
18 IFB Industries
Exhibit 50: Market size (No of units in Million) Exhibit 51: Consumer preference towards high capacity
Source: ADI Media Research, Centrum Research Source: Industry, Centrum Research
Refrigerators
The refrigerator industry was valued at Rs140bn in FY14 (9mn units), and with expected improvement in the economic scenario, demand is likely to pick up at a relatively fast pace of ~11%. Direct cool refrigerators continue to command 75%+ market share in volume terms. The refrigerators segment has high penetration in India accounting for 31% and entry of multinational players has given a new direction with new and innovative products competing with domestic manufacturers. LG continues to dominate the segment with 24.5% market share followed by Samsung at 20.6%. Refrigerators with a capacity range of 142–340 L dominated sales, representing 70%+ of total volume sales. Those with 341–540 L capacities continued to gain momentum accounting for 20% of total refrigerator volume sales. With the new BEE (Bureau of Energy Efficiency) norms, a refrigerator previously rated at 5 stars would now be rated at 3 stars. It will also be 36% more efficient on power consumption than a 3 star refrigerator under the old rating scale.
Exhibit 52: Market Share across players Exhibit 53: Market Size
Source: ADI Media Research, Centrum Research Source: Industry, Centrum Research
Exhibit 54: Direct cool product mix Exhibit 55: Frost Free Product Mix
Source: Industry, Centrum Research Source: Industry, Centrum Research
69.5 66.1 64.6 63.0 68.0 60.0
30.5 33.9 35.4 37.0 32.0 40.0
0
20
40
60
80
100
120
FY09 FY10 FY11 FY12 FY13 FY14
(%)
Semi Automatic (%) Fully Automatic (%)
2.8 3.8 4.7 5.0 4.6 5.0
0%
10%
20%
30%
40%
50%
FY12 FY13 FY14 FY15WM <= 6 6 < WM <= 6.5 6.5 < WM <= 7 7 < WM
24.5%
20.6%
18.5%
17.0%
11.7%
7.7%LG
Samsung
Godrej
Videocon
Whirlpool
Others
2013-14
Rs 140 Bn
5
6
7
8
9
10
FY10 FY11 FY12 FY13
(Mn units)
0%
20%
40%
60%
80%
100%
FY12 FY13 FY14 FY15
184 litres or less 185-225 226 & above
0%
20%
40%
60%
80%
100%
FY12 FY13 FY14 FY15
225 or less 226-270L 271-300L 301-350L 351L & above
19 IFB Industries
Air conditioners
The room air conditioner segment is valued at Rs80bn, with volumes declining for categories on increasing product price. Consumers are shifting to smaller tonnage split units due to increasing prices as well as shrinking room sizes. The share of split unit to window unit sales is expected to be 75%+ over the next 3 years. Brand loyalty is very low in the segment given that no player has more than 20% market share.
Exhibit 56: Market share
Source: Industry, Centrum Research
Exhibit 57: Product mix Exhibit 58: Market volume
Source: Industry, Centrum Research Source: Industry, Centrum Research
LG, 21%
Voltas, 20%
Samsung, 11%Others, 15%
Panasonic, 10%
Daikin, 6%
Hitachi, 6%
Bluestar, 6%
Godrej, 5%
0%
10%
20%
30%
40%
50%
60%
70%
FY12 FY13 FY14 FY15
0.75 Tonnes 1 Tonne 1.5 Tonnes 2 & above
2.0
2.5
3.0
3.5
FY10 FY11 FY12 FY13 FY14 FY15 FY16
Unit m
millions)
20 IFB Industries
Annexure 2- Company profile of competitors
Whirlpool of India
Whirlpool of India is a 75% subsidiary of US-based Whirlpool Corporation. It has a presence in segments like refrigerators, washing machines, air conditioners, microwave ovens and water purifiers. It has three manufacturing facilities at Faridabad, Pondicherry and Ranjangaon, where it produces washing machines and refrigerators, which account for 83% of its revenue. The refrigerator segment (~60%+ revenue) is the major revenue contributor followed by washing machines (~20% revenue).
Exhibit 59: Gross revenue mix trend
Source: Company, Centrum Research
Exhibit 60: Market share & position across categories Exhibit 61: Gross margin trend
Source: Industry, Centrum Research Source: Company, Centrum Research
Exhibit 62: Historical financial summary
Y/E Mar (Rs mn) FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Revenue 13,018 15,646 17,192 22,149 27,028 26,579 27,727 28,346
YoY Growth (%) 20.2 9.9 28.8 22.0 (1.7) 4.3 2.2
Operating Profit 473 895 1,408 2,412 2,636 2,231 2,220 2,115
Operating Margin (%) 3.6 5.7 8.2 10.9 9.8 8.4 8.0 7.5
PAT (Adj.) (53) 323 705 1,450 1,660 1,237 1,277 1,229
YoY Growth (%) 0.0 (707.8) 118.2 105.7 14.5 (25.5) 3.2 (3.8)
PAT Margin (%) (0.4) 2.1 4.1 6.5 6.1 4.7 4.6 4.3
RoE (%) (21.2) 14.7 59.8 79.2 57.0 28.8 23.1 18.1
RoCE (%) 15.5 19.3 26.4 45.2 42.6 26.5 22.5 17.7
EPS (Rs) (0.4) 2.5 5.6 11.4 13.1 9.8 10.1 9.7
P/E (x) (1,031.0) 169.6 77.7 37.8 33.0 44.3 42.9 44.6
EV/EBITDA (x) 119.9 63.2 39.2 22.5 20.6 24.2 24.0 24.5
Source: Company, Centrum Research
67.0 65.8 65.5 65.0 59.8 58.6 62.7 62.2
17.4 18.3 18.0 19.720.7 22.5
21.6 21.2
2.4 6.6 6.7 7.3 11.1 10.4 7.5 6.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Refrigerators Washing Machines Air Conditioners Microwave Ovens
Other Products Spares & Accessories Miscellaneous
13%
16%
9%
3%
0%
4%
8%
12%
16%
20%
Fifth Third Fourth Ninth
Refrigerator Washing Machine
Microwave Air Conditioner
31.7
33.8
35.8
38.6
37.236.4
37.436.8
30
32
34
36
38
40
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
(%)
21 IFB Industries
LG and Samsung
Exhibit 63: Market share across categories Exhibit 64: India revenue share as % of global revenues
Source: Industry, Centrum Research Source: Companies, Centrum Research
Exhibit 65: Samsung India financials Exhibit 66: Improving profitability of Samsung HA division
Source: MCA, Centrum Research Source: MCA, Centrum Research
Exhibit 67: Increasing share of mobiles revenues for Samsung India
Source:MCA, Centrum Research
0%
10%
20%
30%
40%
Refrigerator Flat Panel TV
Air Conditioner
Microwave Smart Mobile Phones
Washine Machines
Samsung LG
0%
1%
2%
3%
4%
5%
6%
2010 2013
LG Samsung
2.7%1.8%
4.9%
8.8%
0%
2%
4%
6%
8%
10%
0
50,000
100,000
150,000
200,000
250,000
300,000
2010 2011 2012 2013
(Rs mn)
Revenue EBIT
-5.8%
-3.1%
-0.4%
-1.7%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
30,000
31,000
32,000
33,000
34,000
35,000
36,000
37,000
38,000
2010 2011 2012 2013
(Rs mn)
Revenue EBIT
28.9 23.718.1 13.6
0
20
40
60
80
100
2010 2011 2012 2013
(%)
Household appliance AV IT HHP SDE
22 IFB Industries
Financials - Historical
Exhibit 68: Income Statement
Y/E March (Rs mn) FY08 FY09 FY10 FY11 FY12
Net Sales 3,826 4,509 5,434 6,784 8,030
Growth (%) 33 18 20.5 24.9 18.4
Employee Cost 316 394 507 630 699
%of Sales 8.3 8.7 9.3 9.3 8.7
Material cost 1984 2437 2798 3752 4754
%of Sales 51.9 54.1 51.5 55.3 59.2
Admin & other expenses 1,365 1,279 1,598 1,798 2,165
% of sales 35.7 28.4 29.4 26.5 27.0
EBIDTA 161 398 530 604 412
EBIDTA Margins (%) 4.2 8.8 9.8 8.9 5.1
Depreciation 84 76 87 104 149
Interest expenses - - 3 3 3
PBT for operations 77 323 441 497 260
Other income 74 59 135 191 115
Exceptional item 234 2,781 - - (15)
PBT 385 3,163 575 688 359
Provision for tax 11 12 37 185 54
Effective tax rate (%) 2.9 0.4 6.5 26.9 15.0
Net Profit 373 3,151 538 503 305
Adj Net Profit 140 370 538 503 320
Source: Company, Centrum Research Estimates
Exhibit 69: Key Ratios
Y/E March FY08 FY09 FY10 FY11 FY12
Growth ratios (%)
Revenues 32.6 17.8 20.5 24.9 18.4
EBIDTA (660.5) 147.4 33.1 13.9 (31.8)
Adj Net Profit (231.7) 164.9 45.3 (6.4) (36.3)
Margin ratios (%)
EBIDTA Margins 4.2 8.8 9.8 8.9 5.1
PBIT Margins 2.0 7.2 8.2 7.4 3.3
PBT Margins 10.1 70.1 10.6 10.1 4.5
PAT Margins 3.7 8.2 9.9 7.4 4.0
Return Ratios (%)
ROCE 17.0 39.2 40.0 26.7 13.4
RoNW (4.9) (40.6) 43.0 27.6 14.1
RoIC 13.3 46.4 37.5 24.7 11.5
Turnover Ratios (Days)
Inventory period 59.9 50.6 57.3 48 50
Collection period 22.8 16.3 18.8 21 21
Payment period 107.9 74.6 73.7 77 69
Net Working Capital (14.6) (2.2) 18.8 5 15
Solvency Ratio
Debt-equity (1.3) 0.0 0.0 0.0 0.0
Net Debt-equity (1.1) (0.4) (0.3) (0.3) (0.3)
Current ratio 1.1 1.4 1.5 1.2 1.5
Interest coverage ratio NM NM 172.2 195.9 82.2
Dividend
Dividend (Rs) 0.0 0.0 0.0 0.0 0.0
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0
Dividend Payout (%) 0.0 0.0 0.0 0.0 0.0
Per Share (Rs)
Basic (end pt) EPS - Rep 21.6 109.2 15.5 14.2 8.6
FDEPS (Adjusted) 3.4 9.1 13.3 12.4 7.9
Basic (end pt) EPS - Adj 8.1 12.8 15.5 14.2 1.0
FDEPS (Reported) 9.2 77.8 13.3 12.4 7.5
CEPS 11.3 79.6 15.4 15.0 11.2
Book Value (68.7) 23.7 38.0 52.1 59.8
Valuations (x)
PER 98.4 37.1 25.5 27.3 42.9
P/BV (4.9) 14.3 8.9 6.5 5.7
EV/EBIDTA 105.1 33.4 25.0 21.5 31.8
EV/Sales 4.4 3.0 2.4 1.9 1.6
M-cap/Sales 3.6 3.0 2.5 2.0 1.7
Source: Company, Centrum Research Estimates
Exhibit 70: Balance Sheet
Y/E March (Rs mn) FY08 FY09 FY10 FY11 FY12
Share Capital 180 296 355 362 363
Reserves & Surplus (2,965) 666 1,183 1,750 2,059
Total Shareholders Funds (2,624) 1,122 1,538 2,112 2,422
Loan Funds 3,445 0 0 0 0
Deferred Tax Liabilities 0 0 37 100 154
Total Capital Employed 821 1,122 1,575 2,212 2,576
Fixed Asset
Gross Block 3,790 3,865 3,960 4,323 4,117
Less:- Accumulated Depreciation 3,088 3,163 3,205 3,081 2,556
Net Block 702 702 755 1,243 1,561
Capital WIP 8 18 69 146 45
Total fixed assets 710 721 824 1,388 1,606
Investments 0 0 106 462 100
Inventory 628 625 853 888 1,093
Debtors 239 201 280 391 466
Loans & advances 194 172 475 481 605
Other Current Assets - - - 13 3
Cash & bank balances 261 429 365 269 538
Total current assets 1,322 1,428 1,973 2,041 2,705
Current liabilities and provisions 1,214 1,026 1,329 1,679 1,835
Net current assets 108 401 645 362 870
Total 821 1,122 1,575 2,212 2,576
Source: Company, Centrum Research Estimates
Exhibit 71: Cash Flow
Y/E March (Rs mn) FY08 FY09 FY10 FY11 FY12
CF from operations
Profit before tax 151 382 575 688 359
Depreciation & amortisation 84 76 87 104 149
Others 104 (8) 11 (25) (30)
CF before WC changes 339 450 673 767 478
Working capital changes 6 (140) (148) 99 52
Cash inflow from operations 345 310 525 866 530
Income tax paid (17) 5 (78) (151) (76)
Cash from Operations 328 315 447 715 454
Cash from investing
Capex (59) (86) (269) (475) (588)
Investments 0 0 (104) (347) 388
Others 0 1 0 3 18
Cash from investing (59) (86) (374) (819) (182)
Cash from financing
Borrowings/ repayments (212) (248) 0 0 0
Interest paid 0 0 (3) (3) (3)
Equity/ Share Capital 0 187 (129) 11 1
Dividend & Dividend Tax 0 0 (5) 0 0
Cash from financing (212) (61) (137) 8 (2)
Net change in cash 57 168 (64) (96) 269
Source: Company, Centrum Research Estimates
23 IFB Industries
Financials
Exhibit 72: Income Statement
Y/E March (Rs mn) FY13 FY14 FY15E FY16E FY17E
Net Sales 9,159 10,215 12,171 14,264 16,424
Growth (%) 14.1 11.5 19.2 17.2 15.1
Employee Cost 849 979 1,156 1,329 1,502
%of Sales 9.3 9.6 9.5 9.3 9.1
Material cost 5489 5957 7073 8271 9517
%of Sales 59.9 58.3 58.1 58.0 57.9
Admin & other expenses 2,318 2,826 3,075 3,431 3,814
% of sales 25.3 27.7 25.3 24.1 23.2
EBIDTA 502 452 868 1,233 1,591
EBIDTA Margins (%) 5.5 4.4 7.1 8.6 9.7
Depreciation 183 226 137 150 161
Interest expenses 2 14 20 25 30
PBT for operations 317 212 711 1,058 1,401
Other income 117 82 90 110 120
Exceptional item - - - - -
PBT 434 293 801 1,168 1,521
Provision for tax 120 77 216 315 411
Effective tax rate (%) 27.6 26.4 27.0 27.0 27.0
Net Profit 315 216 584 852 1,110
Adj Net Profit 315 216 584 852 1,110
Source: Company, Centrum Research
Exhibit 73: Key Ratios
Y/E March FY13 FY14 FY15E FY16E FY17E
Growth ratios (%)
Revenues 14.1 11.5 19.2 17.2 15.1
EBIDTA 22.0 (10.1) 92.1 42.1 29.1
Adj Net Profit (1.8) (31.3) 170.5 45.9 30.2
Margin ratios (%)
EBIDTA Margins 5.5 4.4 7.1 8.6 9.7
PBIT Margins 3.5 2.2 6.0 7.6 8.7
PBT Margins 4.7 2.9 6.6 8.2 9.3
PAT Margins 3.4 2.1 4.8 6.0 6.8
Return Ratios (%)
ROCE 10.5 6.0 13.7 17.1 18.6
RoNW 11.3 6.6 15.9 19.4 20.7
RoIC 9.5 5.5 15.8 21.2 25.6
Turnover Ratios (Days)
Inventory period 53 56 56 56 56
Collection period 19 26 25 25 25
Payment period 65 72 70 70 70
Net Working Capital 19 22 23 23 24
Solvency Ratio
Debt-equity 0.0 0.1 0.1 0.1 0.1
Net Debt-equity (0.3) (0.2) (0.2) (0.3) (0.4)
Current ratio 1.5 1.6 1.6 1.7 1.9
Interest coverage ratio 159.6 15.8 36.5 43.3 47.7
Dividend
Dividend (Rs) 0.0 0.0 0.0 0.0 0.0
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0
Dividend Payout (%) 0.0 0.0 0.0 0.0 0.0
Per Share (Rs)
Basic (end pt) EPS - Rep 7.8 5.3 14.4 21.0 27.4
FDEPS (Adjusted) 7.8 5.3 14.4 21.0 27.4
Basic (end pt) EPS - Adj 7.8 5.3 14.4 21.0 27.4
FDEPS (Reported) 7.8 5.3 14.4 21.0 27.4
CEPS 12.3 10.9 17.8 24.7 31.4
Book Value 77.9 83.2 97.7 118.7 146.1
Valuations (x)
PER 43.7 63.6 23.5 16.1 12.4
P/BV 4.4 4.1 3.5 2.9 2.3
EV/EBIDTA 25.5 29.1 14.9 10.1 7.3
EV/Sales 1.4 1.3 1.1 0.9 0.7
M-cap/Sales 1.5 1.3 1.1 1.0 0.8
Source: Company, Centrum Research Estimates
Exhibit 74: Balance Sheet
Y/E March (Rs mn) FY13 FY14 FY15E FY16E FY17E
Share Capital 413 413 413 413 413
Reserves & Surplus 2,744 2,960 3,544 4,396 5,507
Total Shareholders Funds 3,156 3,372 3,957 4,809 5,919
Loan Funds 99 478 478 478 478
Deferred Tax Liabilities 196 233 233 233 233
Total Capital Employed 3,451 4,083 4,668 5,520 6,630
Fixed Asset
Gross Block 3,795 4,328 4,828 5,178 5,528
Less:- Accumulated Depreciation 1,927 2,071 2,208 2,358 2,519
Net Block 1,868 2,258 2,620 2,820 3,010
Capital WIP 83 146 5 5 5
Total fixed assets 1,950 2,404 2,625 2,825 3,015
Investments 568 373 373 373 373
Inventory 1,320 1,555 1,867 2,188 2,520
Debtors 479 723 834 977 1,125
Loans & advances 613 668 730 856 985
Other Current Assets 8 8 8 8 8
Cash & bank balances 446 682 914 1,413 2,178
Total current assets 2,865 3,636 4,354 5,443 6,816
Current liabilities and provisions 1,933 2,329 2,684 3,121 3,574
Net current assets 933 1,307 1,669 2,322 3,243
Total 3,451 4,083 4,668 5,520 6,630
Source: Company, Centrum Research
Exhibit 75: Cash Flow
Y/E March (Rs mn) FY13 FY14 FY15E FY16E FY17E
CF from operations
Profit before tax 434 293 801 1,168 1,521
Depreciation & amortisation 183 226 137 150 161
Others (71) (16) (70) (85) (90)
CF before WC changes 546 504 868 1,233 1,591
Working capital changes (131) (242) (131) (154) (156)
Cash inflow from operations 415 262 738 1,079 1,435
Income tax paid (93) (56) (216) (315) (411)
Cash from Operations 322 206 522 764 1,025
Cash from investing
Capex (505) (578) (359) (350) (350)
Investments (437) 225 0 0 0
Others 11 15 90 110 120
Cash from investing (931) (338) (269) (240) (230)
Cash from financing
Borrowings/ repayments 100 381 0 0 0
Interest paid (2) (14) (20) (25) (30)
Equity/ Share Capital 420 0 0 0 0
Dividend & Dividend Tax 0 0 0 0 0
Cash from financing 518 367 (20) (25) (30)
Net change in cash (92) 235 233 499 765
Source: Company, Centrum Research
24 IFB Industries
Appendix A
Disclaimer
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The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts.
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25 IFB Industries
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Centrum and its affiliates have not managed or co-managed a public offering for the subject company in the preceding twelve months. Centrum and affiliates have not received compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for service in respect of public offerings, corporate finance, debt restructuring, investment banking or other advisory services in a merger/acquisition or some other sort of specific transaction.
As per the declarations given by them, Mr. Ankit Kedia, research analyst and and/or any of his family members do not serve as an officer, director or any way connected to the company/companies mentioned in this report. Further, as declared by him, he has not received any compensation from the above companies in the preceding twelve months. He does not hold any shares by him or through his relatives or in case if holds the shares then will not to do any transactions in the said scrip for 30 days from the date of release such report. Our entire research professionals are our employees and are paid a salary. They do not have any other material conflict of interest of the research analyst or member of which the research analyst knows of has reason to know at the time of publication of the research report or at the time of the public appearance.
While we would endeavour to update the information herein on a reasonable basis, Centrum, its associated companies, their directors and employees are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent Centrum from doing so.
Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or Centrum policies, in circumstances where Centrum is acting in an advisory capacity to this company, or any certain other circumstances.
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Rating Criteria
Rating Market cap < Rs20bn Market cap > Rs20bn but < 100bn Market cap > Rs100bn
Buy Upside > 25% Upside > 20% Upside > 15%
Hold Upside between -25% to +25% Upside between -20% to +20% Upside between -15% to +15%
Sell Downside > 25% Downside > 20% Downside > 15%
Member (NSE, BSE, MCX-SX), Depository Participant (CDSL) and SEBI registered Portfolio Manager
Registration Nos.
CAPITAL MARKET SEBI REGN. NO.: BSE: INB011454239, NSE: INB231454233
DERIVATIVES SEBI REGN. NO.: NSE: INF231454233 (TRADING & SELF CLEARING MEMBER)
CDSL DP ID: 12200. SEBI REGISTRATION NO.: IN-DP-CDSL-661-2012
PMS REGISTRATION NO.: INP000004383
MCX – SX (Currency Derivative segment) REGN. NO.: INE261454230
Website: www.centrum.co.in
Investor Grievance Email ID: [email protected]
Compliance Officer Details:
Tel: (022) 4215 9413; Email ID: [email protected]
Centrum Broking Limited
Registered Office Address
Bombay Mutual Building ,
2nd Floor,
Dr. D. N. Road, Fort, Mumbai - 400 001
Correspondence Address
Centrum House
6th Floor, CST Road, Near Vidya Nagari Marg, Kalina,
Santacruz (E), Mumbai 400 098.
Tel: (022) 4215 9000