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Ambit Capital and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, investors should be aware that Ambit Capital may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the only factor in making their investment decision.

Please refer to the Disclaimers at the end of this Report.

AMBIT INSIGHTS 26 August 2014

DAILY

Top export plays

Stock Rating FY15 P/E (x)

HCL Tech BUY 15.3

Bajaj Auto BUY 17.2

Dr. Reddy's BUY 21.8

AIA Engineering BUY 21.4

Balkrishna Inds. BUY 12.0

TTK Prestige BUY 38.3

Eclerx NR 14.3

Elgi Equipments NR 33.5

Source: Bloomberg, Ambit Capital research

NR = Not Rated

Updates

Economy

Our meetings in Delhi - Unity of command alongside a worrying ‘talent deficit’

Utilities

Supreme Court stays APTEL’s interim order

Metals & Mining

Supreme Court deems all coal block allocations since 1993 as illegal

Results Update

Shree Cement (UNDER REVIEW)

Maintains industry leading volume growth

Analyst Notes: Consumer: Page Industries – TOP BUY in Consumer Discretionary Rakshit Ranjan, CFA, +91 22 3043 3201

Page continued with robust revenue growth momentum in 1QFY15 (24% YoY sales growth). This was despite a high base effect related to one-time-retail incentive for men’s innerwear offered in 1QFY14 (4% reported volume growth), excluding which the segment delivered ~11% YoY volume growth in 1QFY15. Page is likely to outperform its peers over FY14-20 amidst a strong macro demand tailwind for mid-premium innerwear through: (a) backward integrated manufacturing (delivering a high-quality product at affordable prices); (b) aggressive approach towards distribution expansion; and (c) a highly aspirational brand recall for ‘Jockey’. Driven by a well-incentivised and professional management team, we expect the firm to deliver 29.8% EPS CAGR over FY14-20, with an increase in RoCE from 42% to 57% over this period. Factoring in the longevity of its growth momentum, our DCF model generates a TP of Rs9,082 (23% upside), implying an FY16 P/E of 37.3x. We reiterate it as our TOP BUY idea. Source: Ambit Capital research

AMBIT INSIGHTS

Ambit Capital Pvt Ltd 26 August 2014

Economy Our meetings in Delhi - Unity of command alongside a worrying ‘talent deficit’ Our discussions with policy experts suggest that the new Government brings three strengths to the table namely concentration of power, unity of command and reduced corruption. This makes India now akin to a professionally-run corporate body with a powerful and hands-on CEO. However, the country’s middle-management continues to suffer from a talent-deficit as the heads of key economic ministries are neither seasoned politicians nor subject-matter experts.

Furthermore whilst Modi is a great CEO, the PM in a country like India also needs to play the role of a visionary Chairman. The institution that will replace the Planning Commission needs to plug this ‘vision gap’ and the new dispensation needs to quickly recruit talent, for India to sustain its GDP growth upswing beyond FY15.

Concentration of power, unity of command and reduced corruption

Our discussions with policy experts suggest that the new Government (which is set to complete 100 days in office this week) has brought three clear strengths to the table (described below in detail). According to policy experts, these three features of the management structure of the country makes India now akin to a professionally-run corporate body with a powerful and hands-on CEO:

Unity of command: India’s national leadership under the previous Government was largely ineffective since it was characterised by a twin power structure. Whilst authority was entirely vested with the party President Sonia Gandhi, responsibility was vested with the Prime Minister. Contrary to this structure, the core strength of the new dispensation is characterised by a clear pyramid-like hierarchy structure with PM Modi firmly at the apex. Be it decisions regarding the Union Budget, be it decisions regarding the appointment of secretaries to Ministers or be it holiday dates for ministers, the Prime Minister’s Office (PMO) has the last word on all subjects.

Concentration of power: A series of seemingly independent developments point to the centrifugal force being created in favour of the already powerful PMO. The BJP has been resisting the appointment of a leader of opposition (LoP) citing a rule that says that a party must have at least 10% of Lok Sabha seats to be able to stake claim on this role (note that the Congress has only 44 seats in the 543-seat Lok Sabha). The LoP also plays a role in the appointment of critical posts ranging from the Lok Pal (i.e. the Citizen’s Ombudsman) to the Central Vigilance Commissioner (CVC). The absence of an LoP allows the Government of the day considerable discretion in appointing these officials.

It is already well known now that barring Finance Minister, Arun Jaitley (who is believed to have some functional autonomy), the new Government’s Cabinet ministers are, in large part, titular heads.

Similarly, policy experts make the point that the Planning Commission’s dissolution could be followed by its allocative powers (i.e. the Planning Commission’s powers in allocating discretionary funds across Indian States) being handed over to the Ministry of Finance.

Reduced corruption: The incidence of corruption has significantly abated in the new setup mainly because the all-pervasive PMO is known to be aware of the smallest of rents collected by Ministers. Some of India’s most powerful connected companies’ promoters have not even been given an audience with the PM since he took charge and ministers have clear instructions to not show any favouritism. At least for now, the “connected company” model seems well and truly buried.

Quick Insight Analysis Meeting Note News Impact

Analyst

Ritika Mankar Mukherjee, CFA [email protected] Tel: +91 22 3043 3175

AMBIT INSIGHTS


…However the current Government suffers from a ‘talent deficit’ and lacks a ‘vision’

In our note dated July 23, 2014 we made the point that: (a) the PM’s 15th August speech will be worth waiting for since it might provide us greater clarity on the Pm Modi’s vision for the country; (b) a lot of work is taking place behind the scenes in due diligencing the right technocrats for ministerial and advisory roles ahead of a reshuffle three months out; and (c) the PM is deliberately spending most of his first few months in power on India’s two most important Asian geopolitical partners – China and Japan.

Our latest visit to New Delhi made it amply clear that the new dispensation is yet to find a way to decisively plug its gaping talent deficit and lacks a 5-year vision for the country.

NDA-II’s ‘talent deficit’: Whilst the country’s new management is led by a efficiency focussed top management (i.e. the PMO), there is a gaping talent gap at the middle-management level (i.e. the heads of important economic ministries). Most critical economic Ministries are neither headed by seasoned politicians nor advised by subject matter experts. For instance, seasoned bureaucrats privately admit that the new Minister of State in-charge of two critical economic ministries appears to be all at sea as he tries to deal with a mountain of work without any technical assistance from capable subject-matter-experts.

Similar talent deficiencies in most critical ministries is likely to mean that technicality-intensive reforms such as creating a unified Goods and Services Tax and PSU bank recapitalisation are unlikely to be implemented any time soon. India’s top fiscal expert told us that the earliest GST can be implemented is by April 1, 2016.

All of that being said, it should be noted that post-15th August the first phone calls have started being made by the PMO to India’s top subject-matter-experts.

The absence of a ‘vision’: Whilst the PMO appears to be determined to make the Government machinery more efficient, the PM seems to lack a coherent vision for the country. For instance, even the Union Budget for FY15 appeared to like a million discrete small initiatives stitched together with no apparent over-arching theme. As a policy veteran put it, “Modi is the best CEO that India could have had but the PM in a country like India needs play the role of a visionary Chairman rather than a short term profitability-focussed CEO.”

The absence of a vision is evident in the series of paradoxes that the new Government seems unable to resolve. For instance, the new Government is keen on generating employment but is averse to amending the draconian Industrial Disputes Act since it fears upsetting trade unions. Similarly whilst the Government is keen in spurring infrastructure creation, they appear averse to providing a sustainable solution to India’s PSU banks’ recapitalisation problem.

The institution that replaces the Planning Commission needs to plug the vision gap

Whilst policy veterans laud the PM’s scrapping of the Planning Commission (Plan Com), an institution whose utility had been diminishing fast, the fact that there is zero visibility on the shape of the institution that will replace this body is a source of concern. Our discussions with the policy high priests in Delhi suggest that the new institutional setup needs to fulfil the following requirements to be an improvement over the days of the Plan Com:

Despite all its flaws and follies, the Plan Com was the only central institution whose mandate was to think beyond one financial year and provide the Central Government with a longer term vision through the 5 year plans. The new body too must be given the freedom and means to look beyond the next 12-months.

AMBIT INSIGHTS


The Plan Com acted as a third-party that played a role in allocating: (1) funds to the plan and non-plan categories, (2) planned expenditure between the States and the Centre, and (3) Central plan expenditure across Ministries and schemes.

If a body like the Ministry of Finance (MoF) is granted the Plan Com’s allocative function, then there is a risk of plan expenditure being curtailed given that in non-election years the MoF is known to be excessively focused on cutting plan spends. Furthermore, the MoF is likely to be biased in favour of the Centre as against the States in terms of dividing the plan expenditure. Thus there is a need to hand-over the Plan Com’s allocative functions to an unbiased third party which does not have the conflicts of interests that the MoF has.

Historically, multiple arms of the Government were involved in economic thinking with the Plan Com and the Prime Minister’s Economic Advisory Council being the two most prominent of these bodies. The new institution that replaces the Plan Com must emerge as the apex economic advisory body to the Central Government to kill the duplication of talent and effort on economic thinking.

AMBIT INSIGHTS


Utilities Supreme Court stays APTEL’s interim order Yesterday, the Supreme Court (SC) stayed the interim order of the APTEL which had granted compensatory tariff to Tata and Adani Power from April 2013 onwards. Further, the SC directed APTEL to pass the final order expeditiously. The stay order is negative for both companies, as it implies a further delay in receipt of tariff hike. However, if APTEL’s final order disallows a tariff hike then our FY14-17 EPS estimate is likely to be cut by 24-48% for Tata Power and 30-63% for Adani Power. Consequently, Tata Power’s and Adani Power’s valuation is likely to be cut by ~Rs4 (4% of our SOTP) and Rs13/share respectively. However, we continue to assume that both companies will receive the tariff hikes and hence we keep our EPS unchanged. At CMP, Tata Power is trading at 1.4x FY16 P/B, a justified 29% premium to its peers. We prefer Tata Power amongst power-generating utilities, as it is best placed on our competitive matrix which maps the IPPs across fuel and offtake. We have NO stance on Adani Power.

The event: Yesterday, the Supreme Court (SC) stayed the interim order of the Appellate Tribunal for Electricity (APTEL), which had allowed Tata Power and Adani Power to start receiving a compensatory tariff hike from the discoms for the period commencing from April 2013. The SC also directed APTEL to pass the final order expeditiously. This implies that Tata Power and Adani Power will not be able to receive the compensatory tariff hike until APTEL passes the final order.

Background: Earlier in February 2014, the CERC had allowed a compensatory tariff hike to Adani Power and Tata Power for the fuel cost escalation from a change in Indonesian law. At that time, the cost of coal had increased multifold, which led to the PPA becoming unviable. Thus, the CERC had allowed a compensatory tariff of Rs3.3bn to Tata Power for FY13 and Rs8.3bn to Adani Power for FY12 and FY13. For FY14, the compensatory tariff allowed to Tata Power was 52paise/unit for Mundra (4GW) and to Adani was 55paise/unit for Mundra III (~1GW) and 9paise/unit for Mundra IV.

APTEL passed an interim order on 21 July 2014 which allowed Tata Power and Adani Power to recover the compensatory tariff from the period commencing from April 2013. However, the Haryana SEB recently appealed to the SC for a stay on APTEL’s interim order.

Where do we go from here? The compensatory tariff hike order has been contested for the past one year and the SC’s decision to stay the APTEL’s interim order clearly indicates that the issue will take more time to be resolved. Whilst the SC has directed APTEL to dispose of the issue expeditiously, we believe the aggrieved parties would certainly approach the higher court to appeal against APTEL’s final order.

Whilst we remain positive on APTEL issuing the final order in favour of Tata Power and Adani Power, note that Adani Power may have to reverse the compensatory tariff of Rs18.4bn which it accrued in 4QFY14 (Rs8.3bn for FY12 and FY13 and Rs10.1bn for FY14). Tata Power, however, did not accrue any compensatory tariff in its P&L statement.

Scenario analysis

If APTEL’s final order does not allow any compensatory tariff hike (as provided in the CERC’s order) then the negative impact on Tata Power’s and Adani Power‘s valuation would be Rs4/share (4% from our SOTP valuation of Rs111/share) and Rs13/share (we do not have any stance and valuation on Adani Power). However, if the compensatory tariff hike is allowed prospectively then the impact would be 50paise/share for Tata Power and Rs2/share for Adani Power.

NEGATIVE Quick Insight Analysis Meeting Note News Impact

Tata Power BUY Bloomberg Code: TPWR IN

CMP (Rs): 93

TP (Rs): 111

Mcap (Rs bn/US$ bn): 252/4.1

3M ADV (Rs mn/US$ mn): 850/14.0

Adani Power NO STANCE Bloomberg Code: ADANI IN

CMP (Rs): 55

TP (Rs): NA


3M ADV (Rs mn/US$ mn): 667/11.0

Analysts

Bhargav Buddhadev [email protected] Tel: +91 22 3043 3252

Deepesh Agarwal [email protected] Tel: +91 22 3043 3275

AMBIT INSIGHTS


Case1: Assuming compensatory tariff is allowed prospectively, the negative impact on Tata and Adani Power’s valuation is 50paise and Rs2/share.

In case Tata Power and Adani Power receive the compensatory tariff hike prospectively i.e. from FY14 onwards (the date of application for the compensatory tariff), we would likely downgrade our EPS estimates for Tata Power by 3% for FY15, FY16 and FY17 and for Adani Power by 14% for FY15, 14% for FY16 and 11% for FY16. Consequently, there would be an adverse impact of 50paise/share on our TP for Tata Power (Rs111/share) and Rs2/share for Adani Power. However, we have NO STANCE on Adani Power, as we do not have visibility on the underlying drivers of Adani Power’s competitive advantages.

Case2: Assuming the compensatory tariff is disallowed, the negative impact on Tata and Adani Power’s valuation is Rs4 and Rs13/share.

In case Tata Power and Adani Power do not get any compensatory tariff, we are likely to downgrade our EPS estimates for Tata Power by 48% for FY15, 24% for FY16 and 25% for FY17 and for Adani Power by 63% for FY15, 38% for FY16 and 30% for FY17. The adverse impact of this on Tata Power’s valuation would be Rs4/share vs Rs13/share on Adani Power’s valuation. Consequently, our TP for Tata Power would reduce to Rs107/share; we reiterate that we do not have a stance on Adani Power.

Sensitivity analysis of compensatory tariff to Tata Power and Adani Power’s estimates

Tata Power Adani Power

Base case Case1 Case2 Base case Case1 Case2

Compensatory tariff allowed

retrospectively (as provided in the

CERC order)

Compensatory tariff allowed prospectively

(i.e. from April 2013)

No compensatory tariff allowed


retrospectively (as provided in the

CERC order)


prospectively (i.e. from April 2013)

No compensatory tariff allowed

TP (Rs/share) 111.0 110.5 107.0 NO STANCE

Revenue (Rs mn) FY15 401,116 400,016 383,200 227,494 224,729 213,281

FY16 426,971 425,871 417,463 223,506 220,740 215,016

FY17 431,519 430,419 422,011 225,259 222,493 216,769

PAT (Rs mn) FY15 23,820 23,116 12,354 18,019 15,806 6,648

FY16 27,538 26,808 21,022 18,057 15,792 11,147

FY17 30,089 29,248 22,600 23,251 20,931 16,250

EPS (Rs) FY15 8.8 8.5 4.6 6.3 5.5 2.3

FY16 10.2 9.9 7.8 6.3 5.5 3.9

FY17 11.1 10.8 8.4 8.1 7.3 5.7

Book Value (Rs) FY15 57.1 56.9 52.9 29.1 28.3 25.1

FY16 67.3 66.8 60.7 35.3 33.8 29.0

FY17 78.4 77.6 69.0 43.4 41.1 34.6

Source: Ambit Capital research

Valuation: Tata Power is attractively valued

Tata Power: Tata Power is trading at 1.4x FY16 P/B, a 29% premium to its peers. We believe the premium valuation for Tata Power is justified, given its higher FY16 RoE of 16% (vs 8% for its peers). We retain our SOTP-based TP of Rs111/share (implying FY16 P/B of 1.6x). We prefer Tata Power in the Utilities sector, as it is best placed on our competitive matrix which maps the operational and upcoming projects for IPPs across fuel and offtake. Further, the company has announced that it will sell its stake in the Arutmin mine for US$0.5bn, which will provide enough ammunition to fund the next leg of growth; the company will bid for UMPPs provided there is more clarity on the proposed regulatory changes for the power sector.

AMBIT INSIGHTS


However, if the compensatory tariff hike is not awarded then Tata Power’s balance sheet will be severely impacted, with average net debt:equity deteriorating to 1.9x in FY15 and 1.4x in FY16 (vs 1.7x in FY15 and 1.1x FY16 if it is awarded the compensatory tariff hike). Consequently, Tata Power will have to expedite selling its stake in KPC and Arutmin (which would likely raise US$250mn and US$500mn respectively).

We believe that the Tata Power’s Mundra project will get the tariff hike. This project was envisaged to be operated on imported coal for which the company also purchased a 30% stake in an Indonesian mining company. However, subsequently, owing to a change in the Indonesian law, the increase in the cost of coal was greater than anticipated and the PPA at the agreed tariffs became unviable. Consequently, the company filed a tariff increase petition before the CERC.

Adani Power: Adani Power is trading at 1.4x FY16 P/B, a 48% premium to its peers . We have NO STANCE on the stock, as we do not have visibility on the underlying drivers of Adani Power’s competitive advantages.

For Adani Power also we believe that the two projects should get the compensatory tariff hike. Adani Power had entered into two power purchase agreements (PPAs) with the Gujarat (1,000MW) and Haryana (1,424MW) state electricity boards (SEBs) for a period of 25 years at a levelised tariff of Rs2.35/kWh and Rs2.94/kWh respectively. However, owing to a change in Indonesian law, the cost of coal increased multifold, which led to the PPA becoming unviable. Consequently, the CERC admitted Adani Power’s tariff increase petition in October 2012.

Tata Power and Adani Power are trading at a 29% and 48% premium to their peers on FY16 P/B

Companies CMP Mcap 6m ADV P/B (x) EV/EBITDA (x) P/E (x) CAGR (%) (FY14-16) RoE (%)

INR US$ mn US$ mn FY15 FY16 FY15 FY16 FY15 FY16 Revenue EPS FY14 FY15 FY16

NTPC 142 19,280 5.3 1.3 1.2 8.8 8.2 11.8 11.4 1% -3% 13% 11% 11%

Reliance Power 84 3,914 14.6 1.2 1.1 16.0 9.9 22.4 17.4 40% 17% 5% 5% 6%

JSW Energy 78 2,106 3.5 1.5 1.3 5.9 5.7 10.2 8.9 0% 12% 17% 16% 15%

CESC 746 1,540 5.3 1.5 1.4 9.1 6.8 16.1 10.9 18% 26% 10% 9% 13%

JP Power Ventures 16 780 5.5 0.7 0.6 9.6 6.6 11.8 7.2 61% 81% 3% 7% 10%

KSK Energy 98 666 0.4 1.1 1.0 15.6 6.3 N.A. 19.5 68% N.A. -6% -5% 6%

NHPC 22 3,999 4.6 0.8 0.8 8.2 8.0 10.4 9.4 10% 9% 7% 8% 8%

SJVN 13 339 2.3 0.8 0.8 16.8 9.7 N.A. N.A. 35% N.A. -4% -18% -16%

Adani Power 55 2,601 10.8 1.9 1.6 6.5 6.8 8.8 8.7 19% 121% 7% 24% 20%

Tata Power 93 4,142 14.6 1.6 1.4 4.6 4.5 10.6 9.1 9% NA -2% 18% 16%

Sector Average 1.2 1.1 10.1 7.3 12.7 11.4 26% 37% 5% 7% 9%

Source: Bloomberg, Ambit Capital research; Note: Valuation as on 25 August 2014

AMBIT INSIGHTS


Tata Power’s financials Balance sheet

Year to March (Rs mn) FY13 FY14E FY15E FY16E FY17E

Networth 113,427 110,827 154,568 182,106 212,194

Loans 366,465 400,784 390,791 381,394 365,247

Other liabilities 79,495 96,896 77,782 66,481 43,111

Sources of funds 559,387 608,507 623,141 629,981 620,552

Net block (incl. CWIP) 437,109 416,272 401,161 384,508 367,488

Net current assets 11,334 54,299 103,158 137,952 168,914

Investments 110,945 137,935 118,822 107,521 84,151

Application of funds 559,387 608,507 623,141 629,981 620,552

Source: Company, Ambit Capital research

Income statement

Year to March (Rs mn) FY13 FY14 FY15E FY16E FY17E

Revenue 330,254 356,487 401,116 426,971 431,519

EBITDA 66,323 77,065 101,728 103,048 97,020

Depreciation 20,517 27,296 26,829 27,222 27,589

Interest expense 26,355 34,399 35,239 32,608 28,729

Other income 1,816 (5,619) 3,925 6,576 8,450

PBT 21,267 9,751 43,585 49,794 49,152

Provision for taxation 11,780 10,084 15,691 17,926 14,440

Consolidated adj PAT 7,646 (2,600) 23,820 27,538 30,089

EPS diluted (Rs) 3.2 (1.1) 8.8 10.2 11.1


Cash flow statement

Year to March (Rs mn) FY13 FY14E FY15E FY16E FY17E

PBT 21,267 9,751 43,585 49,794 49,152

WC changes (23,511) 1,332 13,172 7,733 1,360

CFO 32,796 16,439 63,821 62,492 59,038

Net capex (42,702) (6,460) (11,718) (10,568) (10,568)

Net Investments (161) - - - -

CFI (42,863) (6,460) (11,718) (10,568) (10,568)

Proceeds from borrowings (5,867) 37,039 (5,586) (5,067) (11,523)

Issue of equity - - 19,764 - -

CFF (5,867) 37,039 14,178 (5,067) (11,523)

FCF (10,067) 9,979 52,103 51,924 48,469


Ratio analysis / Valuation parameters

Year to March FY13 FY14E FY15E FY16E FY17E

Revenue growth (%) 27.0 7.9 12.5 6.4 1.1

EBITDA margin (%) 20.1 21.6 25.4 24.1 22.5

Net margin (%) 2.3 (0.7) 5.9 6.4 7.0

RoCE (%) 9.8 10.0 14.2 13.7 12.2

RoE (%) 6.6 (2.3) 18.0 16.4 15.3

Net debt / Equity (x) 3.1 3.0 1.7 1.1 0.7

P/E (x) 28.9 (84.9) 10.6 9.1 8.4

P/B(x) 1.9 2.0 1.6 1.4 1.2

EV/EBITDA(x) 7.0 6.0 4.6 4.5 4.8


AMBIT INSIGHTS


Adani Power’s financials Balance sheet


Networth 42,934 65,434 83,452 101,509 124,760

Loans 376,027 397,688 421,974 369,068 316,165

Other Liabilities 10,790 - - - -

Sources of funds 429,751 463,122 505,427 470,577 440,925

Net block (incl. CWIP) 480,651 500,244 423,869 401,854 379,866

Net current assets (68,304) (46,582) 45,339 42,900 40,464

Cash 17,181 8,306 35,065 24,669 19,442

Investments 224 1,153 1,153 1,153 1,153

Application of funds 429,752 463,122 505,427 470,577 440,925


Income statement


Revenue 67,794 157,681 227,494 223,506 225,259

EBITDA 10,680 49,774 83,734 80,147 82,636

Depreciation 12,897 22,185 26,722 26,722 26,722

Interest expense 17,029 36,555 35,726 31,652 28,326

Other income 1,907 1,863 1,366 911 1,549

PBT (17,339) (7,103) 22,653 22,684 29,137

Provision for taxation 4,768 (10,790) 4,634 4,627 5,886

Extraordinaries 844 Consolidated adj PAT (22,951) 3,687 18,019 18,057 23,251

EPS diluted (Rs) (9.2) 1.3 6.3 6.3 8.1


Cash flow statement


PBT (18,183) (13,695) 22,653 22,684 29,137

WC changes 42,529 (21,722) (91,921) 2,439 2,436

CFO 32,475 (2,443) (47,181) 47,218 52,409

Net capex (68,291) (41,777) 49,653 (4,707) (4,733)

Net Investments 34 930 - - -

CFI (68,257) (40,848) 49,653 (4,707) (4,733)

Proceeds from borrowings 20,741 10,871 24,287 (52,907) (52,903)

Issue of equity 2,132 25,405 - - -

CFF 22,873 36,276 24,287 (52,907) (52,903)

FCF (35,816) (44,220) 2,472 42,511 47,676



Year to March FY13 FY14 FY15E FY16E FY17E

Revenue growth (%) 65.8 132.6 44.3 (1.8) 0.8

EBITDA margin (%) 15.8% 31.6% 36.8% 35.9% 36.7%

Net margin (%) -33.9% 2.3% 7.9% 8.1% 10.3%

RoCE (%) (0.4) 1.3 9.4 8.7 9.8

RoE (%) (42.8) 6.8 24.2 19.5 20.6

Net debt / Equity (x) 8.4 6.0 4.6 3.4 2.4

P/E (x) NA 42.8 8.8 8.7 6.8

P/B(x) 3.1 2.4 1.9 1.6 1.3

EV/EBITDA(x) 51.2 11.0 6.5 6.8 6.6


AMBIT INSIGHTS


Metals & Mining Supreme Court deems all coal block allocations since 1993 as illegal The Supreme Court has declared all coal blocks allocated from July 1993 to November 2011 as illegal. However, the consequence of this is yet to be determined and the hearings are likely to begin from September 1, 2014. Amongst the prominent Metals companies, Hindalco and JSPL have made large investments in projects whose viability is contingent upon the availability of captive coal. Hence, in the event of any de-allocation of coal blocks, Hindalco and JSPL would be the most impacted. We reiterate our SELL stance on Hindalco, as the stock price currently factors in the full benefits of captive coal for the upcoming capacities, which in our view is optimistic given uncertainties surrounding availability of captive coal. Although coal blocks have also been allocated to Tata Steel, SAIL, JSW Steel and Nalco (over FY94-FY12), they are non-producing, no material investments have been made on the back of these coal blocks and there was limited visibility on timelines for commissioning of these blocks.

Event: Yesterday, the Supreme Court held that all coal block allocations from July 1993 to November 2011 suffered from arbitrariness and legal flaws, and hence, all such allocations are illegal. However, the Supreme Court mentioned that the consequence of this is yet to be determined and requires further hearing. News reports highlight that Supreme Court is likely to hear the matter from September 1, 2014, in order to decide the consequence of these coal block allocations.

Significant impact on Hindalco and JSPL in the Metals sector: Amongst the prominent metal companies, Hindalco and JSPL have made large investments in projects whose viability is contingent upon the availability of captive coal. Hence, in the event of any de-allocation of coal blocks, Hindalco and JSPL would be the most impacted.

Hindalco: Since 1994, Hindalco has been allotted three coal blocks – Talabira I, Talabira II and Mahan coal block. Talabira I was allotted in 1994 and it has been producing ~1.5mtpa of coal, which is used for production of captive power for Hindalco’s existing Hirakud smelter. Further, Hindalco has invested ~Rs200bn on its new smelters, Mahan and Aditya, the viability of which is contingent upon availability of coal from the Mahan and Talabira II coal blocks.

We highlight that in the absence of captive coal for the new facilities, the cost/tonne of production (excluding interest and depreciation) would be ~US$1,800/tonne of aluminium vs ~US$1,500/tonne in the presence of captive coal, vs current LME price + premium (of ~US$2,400/t). Hindalco’s CMP factors in a high EBITDA of ~US$975/tonne from the enhanced domestic aluminium capacity (vs ~US$500/t in FY13 from the existing domestic capacity). We believe this is optimistic, as it factors in the full benefits of captive coal for the upcoming capacities. At CMP, the stock is trading at an FY15 EV/EBITDA of 8.1x vs the historical average of 6.5x.

JSPL (Steel business): For the steel business, JSPL has been allotted four coal blocks - Gare-Palma-IV/1, Utkal B 1, Gare Palma IV/6 and Urtan North. Amongst these, Gare-Palma-IV/1 is a producing coal block (~6mt) whereas Utkal B1 is critical for the newly commissioned Angul project. RoCEs from JSPL’s ~Rs180bn investment in a 2.5mt steel plant and 810MW captive power plant at Angul, Odisha, are likely to be in low single digits in the absence of captive coal from Utkal B1 coal block.

Minimal impact on other prominent metal companies: Though coal blocks have also been allocated to Tata Steel, SAIL, JSW Steel and Nalco (over FY94-FY12), no material investments have been made on the back of these coal blocks. Hence, commercialisation of allotted blocks would only have further improved the return ratios for these companies but is not central to the viability of their projects and the benefits of these blocks are not factored into our/consensus estimates.

NEGATIVE Quick Insight Analysis Meeting Note News Impact

Hindalco SELL Bloomberg Code: HNDL IN

CMP (`): 165

Target Price (`): 99

Mcap (` bn/US$ mn): 340/5,629

3M ADV (` mn/US$ mn): 2,131/35.2

JSPL NOT RATED Bloomberg Code: JSP IN

CMP (`): 253

Mcap (` bn/US$ mn): 232/3,835

3M ADV (` mn/US$ mn): 1,279/21.1

Nalco SELL Bloomberg Code: NACL IN

CMP (`): 54


Mcap (` bn/US$ mn): 139/2,299

3M ADV (` mn/US$ mn): 325/5.4

Tata Steel BUY Bloomberg Code: TATA IN

CMP (`): 512


Mcap (` bn/US$ mn): 497/8,223

3M ADV (` mn/US$ mn): 3,292/54.4

SAIL SELL Bloomberg Code: SAIL IN

CMP (`): 81


Mcap (` bn/US$ mn): 336/5,549

3M ADV (` mn/US$ mn): 887/14.7

Analysts

Parita Ashar [email protected] Tel: +91 22 3043 3223

Bhargav Buddhadev [email protected] Tel: +91 22 3043 3252

AMBIT INSIGHTS


Significant impact on JSPL in the Power sector: Amongst the power companies, JSPL and CESC have made large investments in projects whose viability is contingent upon the availability of captive coal. However, in the event of any de-allocation of coal blocks, only JSPL’s profitability for Tanmar I project would get impacted. We don’t think profitability for CESC’s operational projects which source 50% of coal from the Sarshatali captive coal block allocated in 1994 could get impacted as the PPA signed is based on CERC’s regulated tariff formula.

JSPL (Power business): For the power business, the impact will be on the profitability of the Tanmar I power plant (which is JSPL’s only profitable power plant) which was selling 100% power on merchant basis using coal from the Gare-Palma- IV/2&3 captive coal block allocated to JSPL in 1998. If this coal block is cancelled then the fuel cost could increase by Re1 per unit to Rs1.5 per unit for Tanmar I power plant and consequently the PAT for the Tanmar I plant could get eroded by ~54% (assuming tax rate of 33%). In FY14 Tanmar I had reported a PAT of Rs11bn.

Minimal impact on other power companies: Though coal blocks have also been allocated to Tata Power and NTPC (over FY94-12), no material investments have been made on the back of these coal blocks. Whilst in the case of NPTC, the total captive coal consumption was NIL; in FY17 the same is likely to be ~13MT which is ~6% of total 220MT coal consumption. For Tata Power there is no coal consumed from any captive coal block as of now and there is no visibility on the same in the future as well.

Details of coal blocks allocated to key Metal & Power companies since July 1993

Name of the company Date of Allotment Block allocated State Comment

Hindalco Industries

25 February 1994 Talabira-I Orissa Annual production of ~1.5mt. Coal from this block is used to generate captive power for the Hirakud smelter.

10 November 2005 Talabira II Orissa Coal block held in JV with MCL and NLC. Investments of ~Rs100bn have been made in the Aditya smelter, viability of which is contingent on availability of coal from the Talabira II coal block.

12 April 2006 Mahan Madhya Pradesh Coal block held in JV with Essar Power. Investments of ~Rs100bn have been made in the Mahan smelter, the viability of which is contingent on availability of coal from the Mahan coal block.

01 August 2007 Tubed Jharkhand Coal block held in JV with Tata Power. No material investments have been made on the back of this coal block.

JSPL

20 June 1996 Gare-Palma-IV/1 Chhattisgarh Producing coal block (~6mt).

1 July 1998 Gare-Palma- IV/2 & 3 Chhattisgarh Producing coal block. Coal from this block is used at Tamnar to generate power.

29 September 2003 Utkal B 1 Orissa Viability of investments in the Angul Steel plant are contingent upon coal from this block.

13 January 2006 Gare Palma IV/6 Chhattisgarh Non-producing block. Coal block held in JV with Nalwa Sponge Iron.

12 October 2009 Urtan North Madhya Pradesh Non-producing block. Coal block held in JV with Monnet Ispat and Energy.

Tata Steel

11 August 2005 Kotre – Basantpur Jharkhand Tata Steel's upcoming Odisha expansion is not contingent upon these coal blocks and benefits of these blocks are not factored in by consensus estimates. 11 August 2005 Pachmo Jharkhand

28 May 2009 Ganeshpur Jharkhand

SAIL 26 February 1996 Tasra Jharkhand Steel expansions underway anyway assume continuing import dependence.

11 April 2007 Sitanala Jharkhand

Nalco 27 August 2004 Utkal E Orissa There has been limited visibility on timelines for commissioning of the coal block.

JSW Steels Ltd./ Jindal Thermal Power

29 November 2005 Utkal A Orissa Non-producing block. Coal block held in JV with MCL, Jindal Stainless Steel and Shyam DRI. No material progress has been made.

JSW Steel

05 June 2008 Rohne Jharkhand Non-producing block. Coal block held in JV with Bhushan Power and Steel and Jai Balaji Industries. No material progress has been made.

10 July 2009 Gourangdih ABC West Bengal Non-producing block. Coal block held in JV with Himachal EMTA Power. No material progress has been made.

CESC/ICML 10 August 1993 Sarisatolli West Bengal Annual production of ~3.5mt. Coal from this block is used at CESC’s four regulated power plant.

Source: Ministry of Coal, Company, Ambit Capital Research

AMBIT INSIGHTS


Shree Cement Sustains industry-leading volume growth Shree Cement maintained industry leading volume growth (17% YoY vs 5-6% for industry) in 4QFY14. Whilst realisation was in line (up 3% QoQ), unitary costs surprised negatively (4% higher than expected), leading to 14% lower than expected unitary EBITDA of Rs1,070. PBT grew by 2% YoY (despite EBITDA growth of 13% YoY) due to higher depreciation. Our current estimates factor in 20%/10% volume growth in FY15/FY16 and unitary EBITDA CAGR of 15% over FY14-16 (Rs1,084-Rs1,096); We maintain that Shree’s capacity leadership in North India, entry in east India and unmatched focus on cost efficiencies will drive superlative profitability growth as cement demand revives in India; however, post the recent re-rating, the positives are largely priced in the stock price. We put our estimates and stance UNDER REVIEW and expect only volume upgrades to our FY16 estimate of 18.7mn tonnes for recent acquisition but not unitary EBITDA. Shree trades at 9.3x FY16 EBITDA (on our materially higher-than-consensus EBITDA estimates), at a 10% discount to Ambuja (against 30% a few quarters back).

Results overview: Volumes surprise positively but higher-than-expected costs

Shree’s 4QFY14 volumes grew by 17% YoY (vs our estimate of 10% and north India volume growth of 5-6%) on account of market share gains from its recently added capacities (2mn tonne grinding unit commissioned in mid-May). Realisations grew marginally by 3% QoQ, as majority of the price hikes were effective only towards the end of June 2014. Unitary costs surprised negatively, 4% higher than our estimate, on account of: (a) significantly higher raw material costs (35% higher than our estimate due to inventory adjustments), 4% higher power and fuel costs, despite lower pet coke costs, which could be on account of liquidating expensive pet coke inventory, and (c) higher other overheads led by commissioning of new capacities. Unitary freight cost was 7% lower than our estimate, possibly due to lower lead distances. Cement EBITDA/tonne declined by 5% YoY to Rs1,070 (14% lower than our estimate) due to higher costs. The power segment’s sales and EBITDA declined by 46% YoY and 55% YoY, given the power back-down by the Rajasthan state electricity boards and low merchant power rates. Adjusted PBT grew by 2% YoY (despite EBITDA growth of 13%) on account of higher depreciation (up 16% YoY due to depreciation on the recently commissioned plants). Note that PAT is not comparable on a YoY basis, due to tax adjustments.

FY14 balance sheet analysis

Shree generated CFO of Rs13.4bn (100% CFO/EBITDA) and re-invested Rs15.8bn in capacity expansions, implying negative FCF of Rs2.4bn. Hence, its cash dropped to Rs13.2bn as against Rs16bn in end-FY13. It declared dividend of Rs890mn (Rs22/share as against Rs20/share last year), implying 10% dividend payout ratio. The company’s pre-tax RoCE was 16% (vs 28% in FY13) and RoE was 20% in FY14 (vs 31% in FY13).

Acquisition of Jaypee’s 1.5mn tonne grinding unit; other expansions

Shree Cement has signed an agreement to acquire Jaypee’s 1.5mn tonne grinding unit in Panipat, Haryana, for Rs3.6bn (implying a valuation of US$40mn/tonne). We believe that the deal would be value-accretive for Shree, due to the better use of its excess clinkerisation capacity (13mn tonnes by FY15-end vs own grinding capacities of 15.5 mn tonnes in North India); further the acquisition cost is in line with Shree’s historical capacity expansion costs. We believe that this acquisition is in line with the company’s strategy of moving closer to the target markets. The plant would improve the company’s presence in the north India market and reduce lead distance in the Punjab and Haryana markets (the management estimates savings of Rs200/tonne on sales from this unit). The company has recently commissioned a 2mn tonne grinding

UNDER REVIEW Result Update Stock Information Bloomberg Code: SRCM IN

CMP (Rs): 7,939

TP (Rs): UR


3M ADV (Rs mn/US$ mn): 151/2.5

Stock Performance (%)

1M 3M 12M YTD

Absolute 11 21 118 82

Rel. to Sensex 10 14 75 57


Ambit Estimates (Rs bn)

FY14 FY15 FY16

Revenues 58.9 76.1 87.4

EBITDA 13.9 22.2 26.3

EPS (Rs) 230.1 395.9 455.8


Analysts

Nitin Bhasin [email protected] Tel: +91 22 3043 3241

Achint Bhagat [email protected] Tel: +91 22 3043 3178

AMBIT INSIGHTS


unit and a 2mn tonne clinker unit in Rajasthan alongside a 2mn tonne grinding unit in Bihar.

Where do we go from here? Likely to maintain industry leading growth

Shree continued to outpace industry growth rate FY14, with 14% volume growth against industry growth of 3-4%. Continued market share gains, alongside re-investment in capacity expansions both in the primary region of North India and new regions like East India, will support superlative volume growth for the next few years. Hence, we build in high volume growth rates of 20%/10% in FY15/FY16. We expect realisation growth of 7% in FY15 and 8% in FY16 and we build in marginal cost increases (1%/4% in FY15/FY16) on account of savings in power and fuel costs, despite higher raw material costs, freight and other overheads. Whilst we see limited scope of an upward revision in unitary EBITDA in FY15 and FY16, we believe our volume estimates will need upward revisions as Shree should grow materially ahead of industry as the demand recovery gains momentum in FY16. Lastly, our realisation assumptions could face upside risks, if pricing discipline strengthens with a recovery in cement demand in India.

We expect EBITDA/tonne of Rs1,084/Rs1,196 in FY15/FY16 (against Rs899 in FY14), implying 35% EBITDA CAGR over FY14-16. Our FY15 and FY16 EBITDA estimates are 20% and 17% higher than consensus estimates. We expect RoCE to improve to 23-24% in FY15-16 (from 18% in FY14) and cumulative CFO/FCF of `40bn/`17bn in FY15-16.

Assumptions for FY15 and FY16

Rs mn unless mentioned

Assumptions Growth

FY14 FY15 FY16 FY15 FY16

Clinker Capacity 12.8 14.3 15.3 11.7% 7.0%

Grinding Capacity 15.5 19.5 21.5 25.8% 10.3%

Volumes 14.2 17.0 18.7 19.8% 9.7%

Utilisation 98.0 97.3 91.1 -0.8% -6.4%

Realisation 4,149 4,439 4,795 7.0% 8.0%

Revenue 58,873 76,113 87,372 29.3% 14.8%

EBITDA 13,899 22,186 26,335 59.6% 18.7%

EBITDA margin 23.6% 29.1% 30.1% 554 99

EBITDA/tonne 899 1,084 1,196 20.7% 10.3%

PAT 7,719 14,270 16,297 84.9% 14.2%


We believe that our volume estimates growth of 10% for FY16 could need upward revision; if we were to upgrade our volume growth estimate to 15%/20%, then our EBITDA and PAT for FY16 will be upgraded by 4%/ 6%. Our revised EBITDA estimates would assuming 15%/20% volume growth would be 22%/27% higher than consensus estimates respectively.

Impact of higher volume assumptions in FY16

Rs mn unless mentioned

Volume growth in FY16 Change

10% 15% 20% FY15 FY16

Revenue 87,372 91,044 94,498 4.2% 3.8%

EBITDA 26,335 27,536 28,665 4.6% 4.1%

PAT 16,297 17,242 18,130 5.8% 5.2%


AMBIT INSIGHTS


Valuations: Superlative growth priced in but expect marginal upgrades

We continue to believe that Shree is the best play on cement demand recovery in India and its EBITDA and profitability growth will likely be much better than most of its peers, as demand and pricing improve in India. Continued low-cost re-investment (72% CFO ploughed back in FY02-14) and efficient cost management will help sustain the premium RoCE/RoE. However, post the recent increase in the share price, Shree is trading at 9.3x FY16 EV/EBITDA (on our materially higher-than-consensus EBITDA estimates). On one-year forward EV/EBITDA, Shree’s discount to Ambuja has narrowed to 10% as against 30% a few quarters back. Shree’s consistently superior earnings growth, higher RoCEs and prudent capital deployment could narrow the discount or expand its multiple only marginally (our implied valuation for Ambuja is 10.0x FY16 EBITDA). Despite building in high double-digit volume growth, improving realisations and stable costs for the next two years and 14% EBITDA CAGR over FY16-25, we find it difficult to justify further upsides on current estimates and hence we put our BUY stance UNDER REVIEW. We will revisit our FY16 and FY17 volume growth estimates primarily for the recent acquisition; we presently build volume growth closer to industry growth unlike its ability to grow materially ahead of industry given the focus on institutional markets and leadership in balanced North Indian region.

AMBIT INSIGHTS


Quarterly snapshot (Rs mn unless mentioned)

Quarter ending 4QFY13 3QFY14 4QFY14 YoY (%) QoQ (%) Ambit est Dev (%) Comments

Sales volume-cement including clinker (mn tonnes)

3.2 3.8 3.7 17.3 (3) 3.5 7 Maintains higher than industry volume growth with continuous market share gains

Avg net realisation (Rs/tonne) 3,602 3,876 4,009 11.3 3 3,953 1

Realisation grew by 3% QoQ, marginally higher than expected

Cement Sales 11,407 14,874 14,896 30.6 0 13,786 8

Power sales 3,008 1,726 1,618 (46.2) (6) 1,920 (16) Power sales were lower than expected due to lower purchase from by SEBs in Rajasthan

Net sales 14,414 16,600 16,514 14.6 (1) 15,706 5

Other operating income 76 49 53 (30) 8 25 114 Other operating income was higher-than-expected. This usually comprises of Certified emission reduction sale receipts

Total Income 14,490 16,649 16,567 14 (0) 15,731 5 Raw material (incl stock adj) 1,379 1,076 1,492 8 39 1,037 44

Unitary raw material costs was higher than expected due to decrease in inventory

Employee cost 942 915 1,014 8 11 1,090 (7)

Power and fuel 4,066 3,818 3,842 (6) 1 3,366 14

Unitary power and fuel cost increased by 4% QoQ, although pet coke prices softened during the quarter, possibly due to liquidation of expensive inventory

Freight cost 2,341 3,426 3,177 36 (7) 3,206 (1) Unitary freight cost was 7% lower than expected possibly due to lower lead distances

Other Expenses 1,890 3,103 2,655 40 (14) 2,336 14 Other expense increased materially YoY due to higher fixed expenses post recent capacity additions

Total Expenditure 10,618 12,339 12,179 15 (1) 11,034 10

EBITDA/tonne was lower than expected due to higher raw material and power and fuel costs

EBITDA 3,872 4,311 4,388 13 2 4,697 (7)

Cement EBITDA 2,961 4,181 3,975 34 (5) 4,313 (8)

Power EBITDA 911 130 413 (55) 218 384 8

EBITDA margins (%) 26.7 25.9 26.5 -24 bps 60bps 29.9 -337bps

Depreciation 1,332 1,667 1,538 16 (8) 1,667 (8) YoY increase is due to accelerated depreciation on recently added capacities

EBIT 2,541 2,644 2,850 12 8 3,031 (6)

Other income 841 496 515 (39) 4 496 4 Marginally higher than expected; this includes interest and dividends on liquid cash and investments

Interest expense 378 363 308 (19) (15) 363 (15)

Reported PBT 3,003 2,034 3,037 1 49 3,164 (4)

Exceptional items - (743) (20) NA (97) - NA

Adjusted PBT 3,003 2,777 3,057 2 10 3,164 (3) PBT growth was lower than EBITDA due to higher depreciation

Tax expense 159 (191) 267 68 (240) 633 (58) Tax includes prior period write backs of Rs275mn.

ETR (%) 5% -9% 9% 20% 11bps

Reported PAT 2,844 2,225 2,770 (3) 24 2,532 9

Extra-ordinary item - (743) (20) NA (97) - NA

Adjusted PAT 2,844 2,968 2,790 (2) (6) 2,532 10 PAT is not comparable on a YoY and QoQ basis due to tax adjustments Adj EPS (Rs) 81.6 85.2 80.1 (2) (6) 72.7 10


AMBIT INSIGHTS


Unitary trends – volumes and realisation surprise positively

Quarter ending 4QFY13 3QFY14 4QFY14 YoY (%) QoQ (%) Ambit est Dev (%)

Sales volume (mn tonnes) 3.2 3.8 3.7 17.3 (3.2) 3.5 7

Avg net realisation (Rs) 3,602 3,876 4,009 11.3 3.4 3,953 1

Avg net realisation, ex-freight (Rs) 2,863 2,983 3,154 10.2 5.7 3,034 4

Power sales (mn units) 791 536 498 (37.0) (7.2) 600 (17)

Rate/unit (Rs) 3.9 3.3 3.4 (13.9) 1.4 1,920 (100)

Operating cost (Rs/tonne) 3,353 3,215 3,277 (2.2) 1.9 3,164 4

Operating cost excl freight (Rs) 2,614 2,322 2,422 (7.3) 4.3 2,244 8

Cement operating costs 2,667 2,786 2,939 10.2 5.5 2,606 13

EBITDA (Rs/tonne) 1,223 1,123 1,181 (3.4) 5.1 1,347 (12)

Cement EBITDA/tonne 935 1,089 1,070 14.4 (1.8) 1,237 (14)

Unitary operating cost analysis (Rs) Raw material cost (incl stock adj) 435 280 401 (7.8) 43.1 297 35.0

Employee cost 298 238 273 (8) 14 312 (13)

Power and Fuel cost (total) 1,284 995 1,034 (19) 4 965 7

Freight cost 739 893 855 16 (4) 919 (7)

Other Expenses 597 808 714 20 (12) 670 7


AMBIT INSIGHTS


Balance sheet

Year to March (Rs mn) FY13 FY14 FY15E FY16E

Networth 38,436 45,562 57,751 71,784

Loans 12,882 12,882 11,882 10,882

Sources of funds 50,381 57,507 68,695 81,729

Net block 17,820 18,206 22,825 30,243

Capital work-in-progress 1,333 7,533 9,480 8,544

Investments 22,033 22,033 22,033 22,033

Current Assets 19,862 21,255 28,948 37,504

Current liabilities and provisions 10,666 11,520 14,590 16,595

Net current assets 9,195 9,735 14,358 20,909

Application of funds 50,381 57,508 68,696 81,729


Income statement


Revenue 55,901 58,875 76,115 87,374

Total expenses 40,302 44,974 53,927 61,036

EBITDA 15,599 13,899 22,188 26,337

Net depreciation / amortisation 4,356 4,453 4,559 5,896

EBIT 11,243 9,448 17,629 20,441

PBT 11,195 9,255 17,239 20,358

PAT 10,040 7,719 13,791 15,879

EPS diluted (Rs) 288.2 230.1 395.9 455.8


Cash flow statement


PBT 11,194 9,255 17,239 20,358

Change in working capital (644) 1,376 (1,511) (748)

Direct taxes paid (2,410) (1,238) (3,448) (4,479)

CFO 12,598 15,508 18,437 22,497

Net capex (8,935) (11,040) (11,124) (12,379)

CFI (2,696) (11,040) (11,124) (12,379)

Proceeds from borrowings (8,761) - (1,000) (1,000)

CFF (9,817) (2,554) (4,201) (4,315)

Net increase in cash 84 1,915 3,112 5,804

FCF 3,663 4,469 7,313 10,118



Year to March FY13 FY14 FY15E FY16E

EBITDA margin 27.9 23.6 29.2 30.1

RoCE 25.0 17.5 23.9 22.6

RoE 30.5 19.1 26.7 24.5

P/E (x) 27.8 34.8 20.2 17.6

P/B(x) 7.3 6.1 4.8 3.9

EV/EBITDA(x) 17.0 19.0 11.7 9.6

EV/tonne(Rs) 19,693 17,028 13,324 11,769


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