TABLE OF CONTENTS - MarketResearch8. Macro Analysis of Seed Industry 8.1. Indian Hybrid Seed Industry Overview and Size, FY’2008 FY’2012-8.1.1 Indian Hybrid Seed Industry Segmentation,

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ADVANTA INDIA LIMITED

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TABLE OF CONTENTS

1. Executive Summary: Advanta India Limited

2. Advanta India Limited Business Overview

Introduction

Expertise

Product

2.1 Corporate Timeline

2.2 Major Investments in the Company Evolution

2.3 Ownership Structure

2.4 Advanta India Limited Organisational Structure

3. Advanta India Limited Products Portfolio

3.1 Oil Seeds

3.2 Field Crops

3.3 Vegetable Crops

4. Advanta India Limited Financial and Operational Performance

4.1 Valuation Analysis and Financial Summary

4.2 Advanta India Limited Geographical Revenue Segmentation, FY’2011 and FY’2012

4.3 DCF (Discounted Cash Flow) Valuationa and Upside Potential

5. Advanta India Limited Annotated Stock Chart and Analyst Recommendations

5.1. Advanta India Limited Annotated Stock Price Performance

5.2. Analyst Recommendations

Expected Bullish Stock Performance

Buy Recommendation in Long term

Expectation of Earning Growth

6. SWOT Analysis

Strengths

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Weaknesses

Opportunities

Threats

7. Advanta India Limited Key Professionals

7.1. Board of Directors Profile

7.2. Management Profile

8. Macro Analysis of Seed Industry

8.1. Indian Hybrid Seed Industry Overview and Size, FY’2008- FY’2012

8.1.1 Indian Hybrid Seed Industry Segmentation, FY’2012

8.1.2 Market Share of Major Players in the Indian Hybrid Seed Market, FY’2012

8.2 Australian Seed Industry Market Size, FY’2008-FY’2012

8.3 Argentina Seed Industry Market Size, FY’2008-FY’-2012

9 Competitive Analysis

9.1 By Products Offered/Revenue/Business Strategy

9.2 By Financial Performance (Topline/ Enterprise Value/ Multiples)

9.3 A Relative Valuation Analysis of Indian Seed Industry

10. Advanta India Limied Management Outlook and Future Projection

10.1. Advanta India Limited Future Projections

10.2. Advanta India Limited Company Financials Future Projections

10.3. Advanta India Limited Ratio Analysis

11. Appendix

11.1. Market Definitions

11.2. Abbreviations

11.3. Research Methodology

Data Collection Methods

Approach

Non-linear Factor Based Regression Model

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11.4. Disclaimer

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LIST OF FIGURES

Figure 1: Advanta India Limited Corporate Timeline 1994-2012

Figure 2: Advanta India Limited Ownership Structure in Percentage as on 31st December 2012

Figure 3: Advanta India Limited Organizational Structure

Figure 4: Advanta India Limited Product Portfolio

Figure 5: Advanta India Limited Annotated Stock Price Performance on the Basis of Volume Traded and Stock Prices in Thousand Shares and INR per Share, 29th February 2012-1st March 2013

Figure 6: India Hybrid Seed Industry Market Size and Contribution in the Overall Indian Seed Market on the Basis of Revenue in INR Crore and Percentage, FY’2008-FY’2012

Figure 7: India Hybrid Seed Industry Segmentation on the Basis of Contribution in the Overall Hybrid Seed Industry in Percentage, FY’2012

Figure 8: Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY’2012

Figure 9: Australia Seed Industry Market Size on the Basis of the Revenue in INR crore, FY’2008-FY’2012

Figure 10: Argentina Seed Industry Market Size on the Basis of Revenue in INR Crore, FY’2008-FY’2012

Figure 11: Advanta India Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2013-2017

Figure 12: Non-linear Regression Analysis and Scatter Chart Based upon Indian Hybrid Seed Industry Market size, FY’2008-FY’2012

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LIST OF TABLE

Table 1: Advanta India Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, 2008-2012

Table 2: Advanta India Limited Major Investments in Company Evaluation on the Basis Deal Stake, Deal Value and Implied Enterprise Value

Table 3: Advanta India Limited Ownership Structure on the Basis of Shares Held as on 31st December 2012

Table 4: Advanta India Limited Promoters Stake on the Basis of Number of Shares Held and the Percentage of Shares Held in Shares Outstanding, as on 31st December 2012

Table 5: Advanta India Limited Revenue Segmentation on the Basis of Contribution by Products in the Overall Revenue, in FY’2011-FY’2012

Table 6: Advanta India Limited Recent Developments in Oil Seeds

Table 7: Advanta India Limited Recent Developments in Field Crops

Table 8: Advanta India Limited Recent Developments in Vegetable Crops

Table 9: Advanta India Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2008-2012

Table 10: Advanta India Limited Valuation Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value in INR Crore and Units as on 1st March 2013

Table 11: Advanta India Limited Valuation Multiples on the Basis of Revenue, EBITDA and Net Profit Multiples, 2008-2012

Table 12: Advanta India Limited Revenue Segmentation on the Basis of Geographical Contribution in Overall Revenue in Percentage, FY’2011-FY’2012

Table 13: Advanta India Limited Discounted Cash Flow Valuation on the Basis of Weighted Average Cost to Capital, Present Value of Company Valuation and Target Share Price

Table 14: Advanta India Limited Sensitivity Analysis of Discounted Cash Flow Analysis, Perpetuity Growth Rate and Weighted Average Cost of Capital on the Basis of Perpetuity Growth Rate Method in INR Crore and in Percentage

Table 15: Advanta India Limited Board of Directors

Table 16: Advanta India Limited Management Profile

Table 17: Company Comparables on the basis of Products Offered, Revenue and Business Strategies

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Table 18: Company Comparable Analysis on the Basis of Financial Performance in INR Crore and Valuation Multiples as on LTM 31st December 2012

Table 19: Company Comparables on the Basis of Revenue in INR Crore, FY’2008-LTM year ending 31st December 2012

Table 20: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake, Implied Enterprise Value and Multiples in INR Crore, Percentage and Multiples

Table 21: Advanta India Limited Company Balance Sheet, 2011-2015

Table 22: Advanta India Limited Company Income Statement, 2011-2015

Table 23: Advanta India Limited Company Cash Flow Statement, 2011-2015

Table 24: Advanta India Limited Ratio Analysis on the Basis of Liquidity, Asset Management, Profitability and Leverage Ratios in Multiple and Percentage, 2008-2015

Table 25: Regression Coefficients of the Advanta India Limited

Table 26: Regression Intercepts of the Advanta India Limited

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EXECUTIVE SUMMARY: ADVANTA INDIA LIMITED

Recommendation: ~ Target Price: INR ~ Date: 1st March 2013

Advanta India Limited is an agronomic seed company with major operations in India, Australia, Thailand, the US and Argentina. The company is involved in production of hybrid seeds of field crop and vegetable seeds. The company specializes in the production of hybrid sunflower seeds by technical plant breeding and application of bio-technological methods. The company was listed on the Bombay Stock Exchange the National Stock Exchange of India in 2007 and having its registered office in Hyderabad.

Key Differentiators

Advanta is dominant player in the Thailand corn market Dominates the international sorghum market The company has 16 subsidiaries all over the world representing its

global presence First Indian multinational seed company

Competition and Positioning

Advanta dominates the sunflower seed market in Argentina with ~% market share as of 31st December 2011

Key Developments

In 2011 the company established a new research and breeding station in Toulouse, France so as to cater the growing demand of the European markets

Financial Summary

Advanta India Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, 2008-2012

Particulars 2008 2009 2010 2011 2012

Revenue

Growth%

Net Profit%

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CORPORATE TIMELINE

Advanta was established in 1994 as a joint venture between ITC Limited and Zeneca Limited. On 24th January 1994 the company started its production of hybrid seeds from its registered office at Hyderabad. The joint venture was named as ITC Zeneca Limited with the objective of production of hybrid seeds in the Indian seed market. In 1994, the company acquired seed business of Hysun India Limited…

In 2007, Advanta India Limited came with an IPO of INR ~ crore. The IPO was of ~ equity shares at a price of INR ~ per equity share…

Advanta India Limited Corporate Timeline 1994-2012

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ADVANTA INDIA LIMITED ORGANISATIONAL STRUCTURE

The company currently has ~ plants in India, out of which ~ plants are located in Andhra Pradesh and ~ plant in Haryana. Out of 16 subsidiaries across the world Advanta Netherland Holdings BV was the highest profit making subsidiary of Advanta, generating a net profit of INR ~ crore during 2011 and Advanta Holdings BV was the highest loss making subsidiary of INR ~ crore in 2011…

Advanta India Limited holds ~ shares that is 100.0% of Advanta Semillas SAIC and ~ shares of Pacific Seeds Pty. Limited implying 100.0% stake in the subsidiary…

Advanta India Limited Organizational Structure

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ADVANTA INDIA LIMITED PRODUCTS PORTFOLIO

The company engages in ~ types of hybrid seed products in India and across the globe such as sorghum, corn, cotton, sunflower, mustard, canola and others and for vegetable such as tomato, cauliflower, sweet corn, hot pepper, okra and others. Business cycle of the company is to research and develop, produce and distribute the seeds to farmers through its distributors…

Advanta India Limited Product Portfolio

OIL SEEDS

Oil seeds are produced as a source of the production for different types of oil. The oil seed portfolio of the company consists of the three hybrid seeds namely sunflower, canola and Indian mustard. These three products contribute the largest proportion of the company’s revenue...

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The company operates in the Australian canola seed market through its 100.0% owned subsidiary namely, Pacific Seeds Pty Limited. Pacific Seeds is involved in the production of ~ types of hybrid canola seed variety such as HYOLA@404RR, HYOLA@474CL, HYOLA@971CL, HYOLA@555TT and others. The company has achieved ~ % growth in its global canola business in 2011 y-o-y. The company has a pan India presence in the Indian hybrid mustard market. UPL group in collaboration with state government of Gujarat has entered into a project for the production of coral-432 with the average selling price of seeds INR 22.5 and average selling price of oil INR 56.0 under normal conditions.

Advanta India Limited Recent Developments in Oil Seeds

Countries Recent Developments in Product Portfolio

India

Mexico

ADVANTA INDIA LIMITED FINANCIAL AND OPERATIONAL PERFORMANCE

VALUATION ANALYSIS AND FINANCIAL SUMMARY

The company’s revenue has showcased a CAGR growth of 16.4% from 2008 to 2012. Increase in revenue was due to the expansion of company’s operations in various countries in the last five years by mergers and acquisitions of different companies. Additionally, over the years the company has been spending considerable amount on research and development. These research and development expenditure has produced new and improved products for the company such as PAC 801, PAC 807 and others in hybrid rice seed which had enhanced the company’s revenues. The revenue for 2012 was INR 1073.0 crore showcasing a growth of 17.7% by y-o-y…

Net profit of the company has increased at a CAGR of ~% from 2008 to 2012…

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The company has been valued at INR ~ crore as on 1st March 2013. The revenue multiple of the company has shown a declining trend. Revenue multiple represents the amount that has to be paid by the investor for purchasing the company’s sales. The revenue multiple has declined at a CAGR of ~% from 2008-2012 showcasing a decline in the value of the company against the company’s sales as the amount of sales has been increasing over the years which implies that the company is now more cheaper to purchase as compare to what it was in 2008…

Advanta India Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2008-2012

Particulars (in INR Crore and Percentage) 2008 2009 2010 2011 2012

Revenue

y-o-y Growth%

EBITDA%

Net Profit%

Advanta India Limited Valuation Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value in INR Crore and Units as on 1st March 2013

Particulars (in INR Crore and Units)

Share Price*

Share Outstanding (in Units)

Market Capitalization

Net Debt

Associates/ Minority Interest

Enterprise Value

Advanta India Limited Valuation Multiples on the Basis of Revenue, EBITDA and Net Profit Multiples, 2008-2012

Particulars 2008 2009 2010 2011 2012

EV/Revenue

EV/ EBITDA

EV/Net Profit

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DCF (DISCOUNTED CASH FLOW) VALUATIONA AND UPSIDE POTENTIAL

Advanta India Limited Discounted Cash Flow Valuation on the Basis of Weighted Average Cost to Capital, Present Value of Company Valuation and Target Share Price

Particulars Value (in INR Crore, Percentage and Units)

WACC

Revenue CAGR over 2013-17E

Present Value of Cash Flow till 2017E

Terminal Growth

Present Value (PV) of terminal cash flow

PV of firm

Less: Current Debt

Total present value of the Equity

Number of Equity Shares Outstanding (in Units)

DCF - Target price (INR)

Advanta India Limited Sensitivity Analysis of Discounted Cash Flow Analysis, Perpetuity Growth Rate and Weighted Average Cost of Capital on the Basis of Perpetuity Growth Rate Method in INR Crore and in Percentage

Particulars (in INR Crore and Percentage) Weighted Average Cost of Capital

Perpetuity Growth Rate

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MACRO ANALYSIS OF SEED INDUSTRY

MARKET SHARE OF MAJOR PLAYERS IN THE INDIAN HYBRID SEED MARKET, FY’2012

The Indian hybrid seed industry is dominated by Nuziveedu Seeds Private Limited. The company has a market share of ~% in the overall Indian hybrid seed industry, followed by Maharashtra Hybrid Corporation (Mahyco) and Vibha Agrotech Limited which have a share of ~% and ~% respectively. As per the historical trend, the revenue of the seed companies has been inclining…

For Monsanto India, corn hybrid was the single biggest focus in seed business. Through its Project Golden Rays project the company has signed a public-private partnership with Rajasthan state government for increasing the maize hybrid yields by two folds. The project involves 7.8 lakh tribal farmers. The company has a share of 4.4% in the overall hybrid seed market…

Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY’2012

Nuziveedu Seeds Private limited

Maharashtra Hybrid Corporation (Mahyco)Monsanto India Limited (MIL)

Rasi Seeds Private Limited

Bayer CropScience Ltd. - India

Du Pont Pioneer

Syngenta India Ltd.

Advanta India Limited

Others

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AUSTRALIAN SEED INDUSTRY MARKET SIZE, FY’2008-FY’2012

Australia is the second largest exporter of canola in the world. Australian seed market has declined at CAGR of ~% from USD ~ million to USD ~ million from FY’2008 to FY’2012. Decline in the Australian seed industry was mainly due to natural disaster in the country which effected the production of seeds.

During the early FY’2000, the seeds industry of Australia was at its peak. The seed sales grew by ~% to USD ~ million in FY’2007 from USD ~ million in FY’2005 due to pleasant weather conditions in the country, higher commodity prices and positive market sentiments…

Australian government policies had also played a major role in the performance of the seed industry of the country. Australian government has strict regulations which have restricted the entry of major players in the country. These strict regulations of the government restricted the growth of the industry and debarred the nation from adoption of hybrid seeds which actually have the potential to increase the agricultural productivity with the limited use of resources.

Australia Seed Industry Market Size on the Basis of the Revenue in INR crore, FY’2008-FY’2012

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

FY'2008 FY'2009 FY'2010 FY'2011 FY'2012

INR

Cro

re

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COMPETITIVE ANALYSIS

BY FINANCIAL PERFORMANCE (TOPLINE/ ENTERPRISE VALUE/ MULTIPLES)

Table: Company Comparable Analysis on the Basis of Financial Performance in INR Crore and Valuation Multiples as on LTM 31st December 2012

(INR Crore, unless Stated) Last Twelve Months (LTM) Year Ending December 2012

Company Market Cap

Net Debt

Enterprise Value (EV)

EV/Revenue EV/EBITDA P/E

JK Agri Genetics Limited

Advanta India Limited

Monsanto India Limited

Nath Seeds India Limited

Kaveri Seeds Company Limited

Mean

Median

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Table: Company Comparables on the Basis of Revenue in INR Crore, FY’2008-LTM year ending 31st December 2012

Revenue (in INR Crore) FY’2008 FY’2009 FY’2010 FY’2011 FY’2012 LTM

JK Agri Genetics Limited*

Advanta India Limited**

Monsanto India Limited

Kaveri Seeds Company Limited

Nath Seeds India Limited

ADVANTA INDIA LIMITED FUTURE PROJECTION

Advanta India Limited has been focusing the European hybrid seed market. After doing research for over 4 years, the company is planning its first hybrid sunflower seed sale in Romania, Ukraine, Romania and France. Advanta will launce ~ hybrids sunflower seeds products to farmers of these countries under ALTA brand. The ~ hybrids sunflower seeds will generator their brand name in future and expected to capture sizable market share in the European seed market. This will lead to an increase in profits of the company in future.

The company has recently entered into a genetically modified (GM) corn agreement with Monsanto for two countries namely, Brazil and Philippines. GM corn is developed by adding animal’s DNA into seeds DNA and thus amplifies the utility of the seeds…

…The company is expected to showcase a revenue growth of CAGR ~% from 2012 to 2017. Additionally, the company is spending substantial amount on research and development of products and these new products will generate positive cash flow in future and will increase the revenue of the company. All these factors will lead to an increase in company’s revenue from INR 1,073.0 crore in 2012 to ~ crore in 2017.

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Advanta India Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2013-2017

ADVANTA INDIA LIMITED COMPANY FINANCIALS FUTURE PROJECTIONS

Over the years Advanta India Limited has been showing a constant growth in its shareholders’ funds as the company has been constantly generating after tax net profit expect in 2010. Net worth of the company has increased at a CAGR of ~% from 2009-2012, representing increase in profitability margin of the company. The company is expected to follow the same trend in future and anticipated to increase its net worth at CAGR of ~% from 2012-2015. As of now the contribution of outsider’s funds in the total assets of the business is greater than shareholders’ equity but with the increase in profitability the company is expected to reverse this scenario and debt to equity ratio will decrease in future...

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

FY'2013 FY'2014 FY'2015 FY'2016 FY'2017

in P

erce

ntag

e

INR

Cro

re

Revenue EBITDA Margin Net Profit Margin

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The company’s cash flow from operation has showcased a positive growth trend in 2011 and 2012. It is anticipated that the cash flow from operation of the company will increase at a CAGR of ~% from 2011-2015 largely due to increase in after tax net profit of the company. In 2015 it is expected that the company will increase its revenue from operations by ~% y-o-y. An average annual growth of ~% is expected in the company’s capital expenditure from 2011-2015 due to commercialization and expansion of business.

Overall cash and cash equivalent balance of the company is expected to increase at a CAGR of ~% from 2011-2015…

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TABLE OF CONTENTS - MarketResearch8. Macro Analysis of Seed Industry 8.1. Indian Hybrid Seed Industry Overview and Size, FY’2008 FY’2012-8.1.1 Indian Hybrid Seed Industry Segmentation,