jm-financial crisil 270612

7/28/2019 Jm-financial Crisil 270612

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MAKINGMARKETS

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Apollo HospitalsEnterprise Ltd

CRISIL IER IndependentEquityResearch

Enhancing investment decisions

Detailed Report

JM Financial Ltd

Q4FY12 Result Update


2/14

CRISIL IERIndependentEquityResearch

Explanation of CRISIL Fundamental and Valuation (CFV) matrix

The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process Analysisof Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a

five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a five-

point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).

CRISIL

Fundamental Grade Assessment

CRISIL

Valuation Grade Assessment

5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP)

4/5 Superior fundamentals 4/5 Upside (10-25% from CMP)

3/5 Good fundamentals 3/5 Align (+-10% from CMP)

2/5 Moderate fundamentals 2/5 Downside (negative 10-25% from CMP)

1/5 Poor fundamentals 1/5 Strong downside (


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JM Financial LtdProfit from sale of investment boosts bottom line

Fundamental Grade 4/5 (Superior fundamentals)

Valuation Grade 5/5 (CMP has strong upside)

Industry Capital markets

1

June 27, 2012

Fair Value Rs 36

CMP Rs 12

For detailed initiating coverage report please visit: www.ier.co.in

CRISIL Independent Equity Research reports are also available on Bloomberg (CRI ) and Thomson Reuters.

J M Financial Ltds Q4FY12 earnings were marginally higher than CRISIL Researchs

expectations boosted by the profit from sale of investments. Though the financial sector is

facing challenging times due to a subdued market environment, we remain positive on the

financial services industry and J M Financials strong positioning in the sector. Hence, we

maintain the fundamental grade of4/5.

Q4FY12 result analysis (consolidated)

Revenues grew 36.5% q-o-q (up 34.9% y-o-y) to Rs 2.6 bn driven by investment banking,

securities funding and profit from sale of investments. Securities and investment banking

business were up 55% q-o-q to Rs 1.2 bn as the company managed to close five deals

(four debt deals and one QIP issue) despite challenging market conditions.

Revenues of the securities funding and fund-based activities grew 18% q-o-q to

Rs 1.2 bn due to increase in yields (average yields at 15%) despite the lending book

declining 6% q-o-q to Rs 20 bn. As the company passed on the higher cost of

borrowings, net interest margins were maintained at ~4%. Segment PBT (after interest)grew 25% q-o-q.

The AMC business, which turned profitable in 3Q, went the negative way this quarter due

to bonus payouts (as retention strategy). Alternative asset management posted a gross

profit of ~Rs 250 mn because of its exit from the special situations fund of Rs 2 bn and

fees earned from private equity (PE) and real estate fund of Rs 13 bn (where promoters

contribution is ~8%). However, segment PBT was Rs 47 mn as it provided Rs 60 mn for

the PE and real estate fund following the triggering of the claw back provisions. The

company also sold current investment of ~Rs 2 bn during the year which stands at

Rs 5 bn as of FY12. Hence, cash levels grew to Rs 13.7 bn in FY12 vs. Rs 10.6 bn in

FY11.

Following revenue growth, EBITDA grew 30% q-o-q to Rs 1.5 bn despite higher

brokerage, commission fees and other costs (as brokerage pass-outs to distributorsincreased due to five IB deals executed during the quarter). Operating and other

expenses grew 83% q-o-q to Rs 431 mn due to legal tax on IT expense and initial

investment in overseas expansion. EBITDA margin fell by 283 bps q-o-q to 56.0%.

Adjusted PAT grew 42% q-o-q (up 45% y-o-y) to Rs 408 mn in line with the growth in

revenues and lower tax rate. The tax rate fell to 27.8% as against 33.4% in Q3FY12. The

company reported EPS of Rs 0.54 vs. Rs 0.38 in Q3FY12.

Valuations: Current market price has strong upside

We continue to value J M Financial based on the sum-of-the-parts method. Our fair value of

Rs 36 per share implies P/E multiple of 17.1x FY13E earnings. At the current market price of

Rs 12, our valuation grade is 5/5.

KEY FORECAST

(Rs mn) FY09 FY10 FY11 FY12# FY13EOperating income 4,644 5,751 8,478 8,642 9,676

EBITDA 1,446 2,098 4,472 4,785 5,080

Adj Net income 501 1,107 1,847 1,212 1,576

Adj EPS-Rs -1.4 2.0 2.3 1.6 2.1

EPS growth (%) NM NM 15.1 -30.6 30.1

Dividend Yield (%) 1.0 1.3 5.0 5.0 5.6

RoCE (%) 5.3 6.8 9.4 8.7 9.1

RoE (%) -5.5 7.9 8.5 5.8 7.2

PE (x) NM 18.7 5.2 7.4 5.7

P/BV (x) 0.8 1.4 0.4 0.4 0.4

EV/EBITDA (x) 7.5 18.2 7.1 5.9 5.6

NM: Not meaningful; CMP: Current market price #abridged financials

Source: Company, CRISIL Research estimates

CFV MATRIX

KEY STOCK STATISTICSNIFTY/SENSEX 5121/16907

NSE ticker J MFINANCIL/J MFINAN

Face Value (Rs per share) 1

Shares outstanding (mn) 750

Market cap (Rs mn)/(US$ mn) 8,996/161

Enterprise value (Rs mn)/ (US$ mn) 30,880/552

52-week range (Rs) (H/L) 26/12

Beta 1.52

Free float (%) 32.8%

Avg daily volumes (30-days) 123,613

Avg daily value (30-days) (Rs mn) 16.7

SHAREHOLDING PATTERN

PERFORMANCE VIS--VIS MARKET

Returns

1-m 3-m 6-m 12-m

J M Financial -1% -16% -21% -47%

NIFTY 4% 8% 8% -7%

ANALYTICAL CONTACTMohit Modi (Director) [email protected]

Elizabeth J ohn [email protected]

Vishal Rampuria [email protected]

Client servicing desk

+91 22 3342 3561 [email protected]

1 2 3 4 5

1

2

3

4

5

Valuation Grade

FundamentalGrade

PoorFundamentals

ExcellentFundamentals

Stron

g

Downs

ide

Stron

g

Upsid

e

66.9% 67.0% 67.1% 67.2%

7.3% 7.4% 7.3% 7.1%

25.8% 25.6% 25.6% 25.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

J un-11 Sep-11 Dec-11 Mar-12

Promoter FII Others


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2

Q4FY12 Result Summary (Consolidated)

(Rs mn) Q4FY12 Q3FY12 Q4FY11 q-o-q (%) y-o-y (%) FY12# FY11 y-o-y (%)

Income from operations 2,602 1,907 1,929 36.5 34.9 8,642 8,478 1.9

Employee Cost 466 433 305 7.5 52.8 1,767 2,049 (13.8)

Sub-brokerage, fees and commission 249 117 140 113.2 77.2 917 830 10.5

Operating and other expenses 431 236 329 82.9 30.8 1,173 1,127 4.1

EBITDA 1,456 1,121 1,155 29.9 26.1 4,784 4,472 7.0

EBITDA margin 56.0% 58.8% 59.8% (283) bps (387) bps 55.4% 52.7% 261 bps

Depreciation 27 28 31 (4.8) (13.7) 115 124 (7.8)

EBIT 1,429 1,093 1,123 30.8 27.2 4,670 4,348 7.4

Interest and finance charges 846 648 778 30.6 8.8 2,942 2,437 20.7

Other income N.A N.A N.A - - 100 473 (78.9)

Operating PBT 583 445 345 31.1 68.7 1,827 2,384 (23.3)

PBT 583 445 345 31.1 68.7 1,827 2,384 (23.3)

Tax 162 149 69 9.2 136.2 596 532 11.9

PAT 421 296 277 42.0 52.0 1,232 1,852 (33.5)

Minority Interest 22 33 27 (32.9) (18.5) 95 73 29.9Profit of Associates 10 24 31 (59.6) (69.1) 75 69 9.4

Adj Consolidated PAT 408 287 281 42.2 45.3 1,212 1,847 (34.4)

Adj PAT margin 15.7% 15.0% 14.6% 63 bps 112 bps 14.0% 21.8% (776) bps

No of equity shares (mn) 749.9 749.9 749.7 - 0.0 749.9 749.7 0.0

Adj EPS (Rs) 0.54 0.38 0.4 42.2 45.2 1.6 2.3 (34.4)

Source: Company, CRISIL Research

Segment revenue

Rs mn Q4FY12 Q3FY12 Q4FY11 q-o-q (%) y-o-y (%)

Investment banking and securities business 1,187 763 1,003 55 18

Securities funding and fund based activities 1,202 1,022 869 18 38

Alternative asset management 251 41 -26 507 -1057

Asset management 75 82 77 -8 -2

Others 67 61 159 10 -58

Total segment revenues 2,782 1,970 2,081 41 34

Intersegment revenues 180 64 152 183 19

Total revenues 2,602 1,907 1,929 36 35

Segment profit before tax

Rs mn Q4FY12 Q3FY12 Q4FY11 q-o-q (%) y-o-y (%)

Investment banking and securities business 124 84 241 49 -48

Securities funding and fund based activities 419 336 242 25 73

Alternative asset management 47 -8 -139 NM NM

Asset management -20 15 9 NM NMOthers 13 19 -8 -29 NM

Total segment revenues 583 445 345 31 69

Source: Company

Consolidated financials Actual vis--vis estimates

Rs mn FY12E FY12A* Variance

Operating Income 8,450 8,642 2%

EBITDA 4,180 4,785 14%

Profit after tax 1,139 1,212 6%

*adjusted for miscellaneous income

Source: Company, CRISIL Research


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3

Revenue growth driven by profit on sale of investments... ... led to PAT growth

Source: Company, CRISIL Research Source: Company, CRISIL Research

Equity market volumes grew 6% q-o-q in Q4FY12 Options trading dominated market volumes

Source: Industry, Bloomberg League Tables Source: Industry, Bloomberg League Tables

FII net flows dried up Segment-wise revenue mix

Source: Industry, Bloomberg League Tables Source: Company

1,7

15

1,9

30

2,3

28

2,7

64

1,9

29

2,0

81

2,1

52

1,9

07

2,6

02

28%

42%

54%

62% 60%55% 54%

59%56%

0%

10%

20%

30%

40%

50%

60%

70%

-

500

1,000

1,500

2,000

2,500

3,000

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(Rs mn)

Revenues EBITDA margins (RHS)

212 294 575 595 281 244 273 287 408

12%

15%

25%

22%

15%

12% 13%15% 16%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

700

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(Rs mn)

PAT PAT margin (RHS)

726612

950

1,331 1,3331,465 1,418 1,504

-

200

400

600

800

1,000

1,200

1,400

1,600

FY08

FY09

FY10

FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(Rs bn)

31%

25%

25%

23%

28%

26%

24%

20%

16%

16%

14%

11%

10%

10%

8%

11%

53%

48%

45%

43% 4

4%

39%

39%

36%

33%

31%

29%

24%

23%

21%

21%

22%

16%

27%

30%

34%

29%

35%

37%

44%

51%

53%

57%

65%

67%

69%

71%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1FY09

Q2FY09

Q3FY09

Q4FY09

Q1FY10

Q2FY10

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

Cash Futures Options

-479

1,102 1,101

52

-30 -24

440

-600

-400

-200

0

200

400

600

800

1,000

1,200

FY09 FY10 FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12

(Rs bn)

52% 56% 50% 48% 45% 42% 39% 43%

31% 30% 41% 42% 46%

35%52% 43%

8% 7% 4%4%

3%

2% 9%4% 3% 3% 4%

3%

3%

4% 3%4%4% 3% 8% 3%

17%

3% 2%

0%

20%

40%

60%

80%

100%

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

Investment banking Securities funding

Alternative asset management Asset management

Others


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4

JM Financials securities lending book declined 6%

q-o-q due to challenging times

MF AUM declined 15% q-o-q as debt AUM (90% of AUM)

was down 16% and equity AUM down 9% q-o-q

Source: Company Source: Company

Share price movement Fair value movement since initiation

-indexed to 100

Source: NSE, CRISIL Research Source: BSE, NSE, CRISIL Research

19

20

21

20

21

20

16

18

20

22

Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12

(Rs bn)

58,8

80

52,0

10

65,2

50

62,0

89

60,8

36

53,0

10

62,9

60

69,1

50

58,8

51

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Q2FY12

Q3FY12

Q4FY12

(Rs mn)

0

50

100

150

200

250

300

350

Feb-0

9

May-0

9

Aug-0

9

Dec-0

9

Mar-10

Jul-10

Oct-10

Jan-1

1

May-1

1

Aug-1

1

Nov-1

1

Mar-12

Jun-1

2

J M Financial NIFTY

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

10

20

30

40

50

60

Dec-0

9

Feb-1

0

Apr-10

May-1

0

Jun-1

0

Aug-1

0

Sep-1

0

Nov-1

0

Dec-1

0

Feb-1

1

Mar-11

May-1

1

Jun-1

1

Aug-1

1

Sep-1

1

Nov-1

1

Dec-1

1

Feb-1

2

Mar-12

May-1

2

Jun-1

2

('000)(Rs)

Total Traded Quantity (RHS) CR ISIL Fair Value J M Financia


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Key Developments

J M Financial has amalgamated its subsidiaries - J M Financial Institutional Securities Pvt

Ltd, J M Financial Securities Pvt Ltd and JM Financial Ventures Ltd - with its wholly

owned subsidiary JM Financial Consultants Pvt Ltd with effect from March 31, 2012.

Hence, the broking business arm under J M Financial Institutional Securities Pvt Ltd and

J M Financial Securities Pvt Ltd as well as the special situations fund business arm under

J M Financial Ventures Ltd has been merged with the investment banking business.

J M Financial plans to enter international markets for broking and investment banking

business. In that context, it has recently registered for a licence in Singapore.

Earnings Estimates Largely Maintained

FY13E

Particulars Unit Old New % change

Revenues (Rs mn) 9,476 9,676 2%

EBITDA (Rs mn) 4,548 5,080 12%

EBITDA margin % 48.0% 52.5% 450bps

PAT (Rs mn) 1,568 1,576 1%

PAT margin % 17% 16% -25bps

EPS Rs 2.1 2.1 0%

Source: CRISIL Research

Reasons for changes in estimates

Following the higher-than-expected revenue growth in FY12, we have raised our FY13

revenue estimate by 2% to Rs 9.7 bn. Given that the fortunes of the broking business are

linked to the markets, a weak market environment, incessant pressure on broking yields and

intense competition weigh heavily on J M Financials revenues in the broking business. We

expect the markets to remain subdued in the first half of FY13 but see some marginal

improvement in the second half of FY13. Hence, we expect the equity markets to deliver

single-digit returns this fiscal; however, we do not expect buoyancy (for instance - IPO deals)

in the markets to revive this fiscal. Hence, though JM Financial has a healthy investment

banking deal pipeline, deal execution has been a challenge. The market volumes will remain

impacted given the lack of clarity on GAAR, although it has been deferred. Further, the

competition is intensifying in the broking segment it is the survival of the fittest. Overall, we

maintain our PAT estimates for FY13.


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6

Valuation

We continue to value J M Financial based on the sum-of-the-parts method. Our fair value of Rs

36 per share value implies P/E multiples of 17.1x FY13E earnings. The valuation grade is 5/5.

One-year forward P/E band One-year forward P/B band

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

P/E premium / discount to NIFTY P/E movement

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

0

10

20

30

40

50

60

Sep-0

9

Nov-0

9

Jan-1

0

Apr-10

Jun-1

0

Sep-1

0

Nov-1

0

Jan-1

1

Apr-11

Jun-1

1

Sep-1

1

Nov-1

1

Jan-1

2

Apr-12

Jun-1

2

(Rs)

J M 8x 10x 12x 15x 19x

0

20

40

60

80

100

120

140

160

Apr-07

Jul-07

Nov-0

7

Feb-0

8

May-0

8

Sep-0

8

Dec-0

8

Apr-09

Jul-09

Nov-0

9

Feb-1

0

Jun-1

0

Sep-1

0

Jan-1

1

Apr-11

Aug-1

1

Nov-1

1

Mar-12

Jun-1

2

(Rs)

J M 0.5x 1.1x 1.5x 1.5x

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Sep-0

9

Nov-0

9

Jan-1

0

Apr-10

Jun-1

0

Sep-1

0

Nov-1

0

Jan-1

1

Apr-11

Jun-1

1

Sep-1

1

Nov-1

1

Jan-1

2

Apr-12

Jun-1

2

Premium/Discount to NIFTY Median premium/discount to NIFTY

0

5

10

15

20

25

Sep-0

9

Nov-0

9

Jan-1

0

Apr-10

Jun-1

0

Sep-1

0

Nov-1

0

Jan-1

1

Apr-11

Jun-1

1

Sep-1

1

Nov-1

1

Jan-1

2

Apr-12

Jun-1

2

(Times)

1yr Fwd PE (x) Median PE

+1 std dev

-1 std dev


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CRISIL IER reports released on JM Financial Ltd

Date Nature of report

Fundamental

grade Fair value

Valuation

grade

CMP

(on the date of report)

28-Dec-09 Initiating coverage 4/5 Rs 57 5/5 Rs 41

02-Feb-10 Q3FY10 result update 4/5 Rs 57 5/5 Rs 41

01-Jun-10 Q4FY10 result update 4/5 Rs 50 5/5 Rs 38

19-Aug-10 Q1FY11 result update 4/5 Rs 45 5/5 Rs 34

03-Nov-10 Q2FY11 result update 4/5 Rs 45 4/5 Rs 40

27-Jan-11 Detailed Report 4/5 Rs 45 5/5 Rs 22


14-Jun-11 Q4FY11 result update 4/5 Rs 42 5/5 Rs 24

04-Aug-11 Q1FY12 result update 4/5 Rs 42 5/5 Rs 22

08-Nov-11 Q2FY12 result update 4/5 Rs 33 5/5 Rs 19

24-Nov-11 Detailed Report 4/5 Rs 36 5/5 Rs 15


27-June-12 Q4FY12 result update 4/5 Rs 36 5/5 Rs 12


10/14


8

Annexure: Consolidated Financials

#abridged financials

Note: FY12 financials are not strictly comparable with that of the previous years due to the

new format of disclosure under Schedule VI of the Companies Act

Source: CRISIL Research

Income statement Balance Sheet

(Rs mn) FY09 FY10 FY11 FY12# FY13E (Rs mn) FY09 FY10 FY11 FY12# FY13E

Operating income 4,644 5,751 8,478 8,642 9,676 Liabilities

EBITDA 1,446 2,098 4,472 4,785 5,080 Equity share capital 750 750 750 750 750EBITDA margin 31.1% 36.5% 52.7% 55.4% 52.5% Reserves 16,725 17,819 19,173 18,794 20,850

Depreciation 121 120 124 115 159 Minorities 1,244 1,271 1,272 1,403 1,403

EBIT 1,325 1,978 4,348 4,670 4,921 Net worth 18,719 19,840 21,194 20,947 23,002

Interest 604 606 2,437 2,942 2,807 Convertible debt - - - -

Operating PBT 721 1,372 1,911 1,728 2,114 Other debt 1,339 18,420 32,635 32,016 32,716

Other income 34 237 473 100 225 Total debt 1,339 18,420 32,635 32,016 32,716

Exceptional inc/(exp) (1,553) 409 (102) - - Deferred tax liability (net) 1,009 988 939 971 971

PBT (799) 2,019 2,283 1,828 2,339 Total liabilities 21,067 39,247 54,769 53,934 56,689

Tax provision 281 478 532 596 763 Assets

Minority interest (28) 24 5 20 - Net fixed assets 386 333 289 300 303

PAT (Reported) (1,052) 1,517 1,746 1,212 1,576 Capital WIP 24 12 10 - -

Less: Exceptionals (1,553) 409 (102) - - Total fixed assets 410 344 299 300 303

Adjusted PAT 501 1,107 1,847 1,212 1,576 Investments 4,107 4,944 8,554 5,198 5,198

Current assets

Ratios Inventory 789 7,462 12,536 7,596 8,788

FY09 FY10 FY11 FY12# FY13E Sundry debtors 428 1,143 1,115 1,579 1,990

Growth Loans and advances 8,891 17,654 24,233 27,585 29,917

Operating income (%) (44.2) 23.8 47.4 1.9 12.0 Cash & bank balance 5,246 4,854 10,751 13,700 14,006

EBITDA (%) (64.5) 45.1 113.2 7.0 6.2 Marketable securities 1,919 5,015 283 501 501

Adj PAT (%) NM NM 15.1 (30.6) 30.1 Total current assets 17,274 36,128 48,918 50,961 55,201

Adj EPS (%) NM NM 15.1 (30.6) 30.1 Total current liabilities 2,320 3,777 4,710 3,270 4,757

Net current assets 14,954 32,351 44,208 47,691 50,443

Profitability Intangibles/Misc. expenditure 1,597 1,608 1,708 745 745

EBITDA margin (%) 31.1 36.5 52.7 55.4 52.5 Total assets 21,067 39,247 54,769 53,934 56,689

Adj PAT Margin (%) (22.7) 26.4 20.6 14.0 16.3

RoE (%) (5.5) 7.9 8.5 5.8 7.2 Cash flow

RoCE (%) 5.3 6.8 9.4 8.7 9.1 (Rs mn) FY09 FY10 FY11 FY12# FY13E

RoIC (%) 8.6 10.1 15.1 12.5 13.1 Pre-tax profit 754 1,609 2,384 1,828 2,339

Total tax paid (409) (499) (580) (564) (763)

Valuations Depreciation 121 120 124 115 159

Price-earnings (x) NM 18.7 5.2 7.4 5.7 Working capital changes 3,905 (14,695) (10,691) (317) (2,447)Price-book (x) 0.8 1.4 0.4 0.4 0.4 Net cash from operations 4,372 (13,465) (8,762) 1,062 (711)

EV/EBITDA (x) 7.5 18.2 7.1 5.9 5.6 Cash from investm ents

EV/Sales (x) 2.4 7.0 4.1 3.3 3.2 Capital expenditure (661) (65) (179) 847 (162)

Dividend payout ratio (%) 29.9 33.8 24.4 37.1 31.7 Investments and others 2,871 (3,932) 1,122 3,138 -

Dividend yield (%) 1.0 1.3 5.0 5.0 5.6 Ne t cas h fr om inve stm ents 2,210 (3,998) 943 3,985 (162)

Cash from financing

B/S ratios Equity raised/(repaid) (1) - - 0 (0)

Inventory days NM NM NM NM NM Debt raised/(repaid) (8,895) 17,080 14,215 (619) 700

Creditors days NM NM NM NM NM Dividend (incl. tax) (176) (439) (525) (527) (585)

Debtor days NM NM NM NM NM Others (incl extraordinaries) (2,841) 838 (75) (953) 1,064

Working capital days NM NM NM NM NM Net cash from financing (11,913) 17,479 13,615 (2,098) 1,179

Gross asset turnover (x) 5.9 6.6 9.6 8.8 8.5 Change in cash position (3,778) (392) 5,898 2,949 306

Net asset turnover (x) 13.4 16.0 27.3 29.3 32.1 Closing cash 5,246 4,854 10,751 13,700 14,006

Sales/operating assets (x)

Current ratio (x) 7.4 9.6 10.4 15.6 11.6 Quarterly financials

Debt-equity (x) 0.1 0.9 1.5 1.5 1.4 (Rs mn) Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12

Net debt/equity (x) (0.3) 0.4 1.0 0.9 0.8 Net Sales 1,929 2,081 2,152 1,907 2,602

Interest coverage 2.2 3.3 1.8 1.6 1.8 Change (q-o-q) -30.2% 7.9% 3.4% -11.4% 36.5%

EBITDA 1,155 1,149 1,158 1,121 1,456

Per share Change (q-o-q) -32% -1% 1% -3% 30%

FY09 FY10 FY11 FY12# FY13E EBITDA margin 59.8% 55.2% 53.8% 58.8% 56.0%

Adj EPS (Rs) (1.4) 2.0 2.3 1.6 2.1 PAT 277 241 274 296 421

CEPS (1.2) 2.2 2.5 1.8 2.3 Adj PAT 281 244 273 287 408

Book value 25.0 26.5 28.3 27.9 30.7 Change (q-o-q) -53% -13% 12% 5% 42%

Dividend (Rs) 0.2 0.5 0.6 0.6 0.7 Adj PAT margin 14.6% 11.7% 12.7% 15.0% 15.7%

Actual o/s shares (mn) 750 750 750 750 750 Adj EPS 0.40 0.33 0.36 0.38 0.54


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CRISIL Research Team

President

Mukesh Agarwal CRISIL Research +91 22 3342 3035 [email protected]

Analytical Contacts

Tarun Bhatia Senior Director, Capital Markets +91 22 3342 3226 [email protected]

Prasad Koparkar Senior Director, Industry & Customised Research +91 22 3342 3137 [email protected]

Binaifer J ehani Director, Customised Research +91 22 3342 4091 [email protected]

Manoj Mohta Director, Customised Research +91 22 3342 3554 [email protected]

Sudhir Nair Director, Customised Research +91 22 3342 3526 [email protected]

Mohit Modi Director, Equity Research +91 22 4254 2860 [email protected]

J iju Vidyadharan Director, Funds & Fixed Income Research +91 22 3342 8091 [email protected]

Ajay D'Souza Director, Industry Research +91 22 3342 3567 [email protected]

Ajay Srinivasan Director, Industry Research +91 22 3342 3530 [email protected]

Rahul Prithiani Director, Industry Research +91 22 3342 3574 [email protected]

Business Development

Siddharth Arora Director, Customised Research +91 22 3342 4133 [email protected]

Vinaya Dongre Director, Industry & Customised Research +91 22 3342 8025 [email protected]

Sagar Sawarkar Associate Director, Equity Research +91 22 3342 8012 [email protected]

Deepak Mittal Associate Director, Funds & Fixed Income Research +91 22 3342 8031 [email protected]

Prosenjit Ghosh Associate Director, Industry & Customised Research +91 22 3342 8008 [email protected]

Business Development Equity Research

Ahmedabad / Mumbai

Vishal Shah Regional Manager, Business Development

Email : [email protected] I Phone : 9820598908

Bengaluru / Mumbai / Pune

Vivek Tandon Regional Manager, Business Development


Chennai / Hyderabad

Urmil Shah Regional Manager, Business Development


Delhi

Arjun Gopalkrishnan Regional Manager, Business Development


Kolkata

Priyanka Murarka Regional Manager, Business Development



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MAKINGMARKETS

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Our Capabilities

Making Markets Function Better

Economy and Industry Research

Largest team of economy and industry research analysts in India

Coverage on 70 industries and 139 sub-sectors; provide growth forecasts, profitability analysis, emerging trends,expected investments, industry structure and regulatory frameworks

90 per cent of Indias commercial banks use our industry research for credit decisions

Special coverage on key growth sectors including real estate, infrastructure, logistics, and financial services

Inputs to Indias leading corporates in market sizing, demand forecasting, and project feasibility Published the first India-focused report on Ultra High Net-worth Individuals All opinions and forecasts reviewed by a highly qualified panel with over 200 years of cumulative experience

Funds and Fixed Income Research

Largest and most comprehensive database on Indias debt market, covering more than 14,000 securities

Largest provider of fixed income valuations in India

Value more than Rs.33 trillion (USD 650 billion) of Indian debt securities, comprising 85 per cent of outstandingsecurities

Sole provider of fixed income and hybrid indices to mutual funds and insurance companies; we maintain 12standard indices and over 80 customised indices

Ranking of Indian mutual fund schemes covering 71 per cent of average assets under management and Rs 4.7trillion (USD 94 billion) by value

Retained by Indias Employees Provident Fund Organisation, the worlds largest retirement scheme coveringover 50 million individuals, for selecting fund managers and monitoring their performance

Equity and Company Research

Largest independent equity research house in India, focusing on small and mid-cap companies; coverage

exceeds 100 companies

Released company reports on all 1,401 companies listed and traded on the National Stock Exchange; a globalfirst for any stock exchange

First research house to release exchange-commissioned equity research reports in India Assigned the first IPO grade in India


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Our Office

Ahmedabad

706, Venus Atlantis

Nr. Reliance Petrol Pump

Prahladnagar, Ahmedabad, India

Phone: +91 79 4024 4500

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Kolkata

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57 Chowringhee Road

Kolkata - 700 071, India

Phone: +91 33 2289 1949/50

Fax: +91 33 2283 0597

Bengaluru

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22, Ulsoor Road,

Bengaluru - 560 042, India

Phone:+91 80 2558 0899

+91 80 2559 4802

Fax: +91 80 2559 4801

New Delhi

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1st Floor, Plot No. 1 & 2

Ishwar Nagar, Mathura Road,

New Delhi - 110 065, India

Phone: +91 11 4250 5100

+91 11 2693 0117/121

Fax: +91 11 2684 2212

Chennai

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43/44, Montieth Road, Egmore,

Chennai - 600 008, India

Phone:+91 44 2854 6205/06

+91 44 2854 6093

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Pune

1187/17, Ghole Road,

Shivaji Nagar,

Pune - 411 005, India

Phone: +91 20 2553 9064/67

Fax: +91 20 4018 1930

Hyderabad

3rd Floor, Uma Chambers

Plot No. 9&10, Nagarjuna Hills,

(Near Punjagutta Cross Road)

Hyderabad - 500 482, India

Phone: +91 40 2335 8103/05

Fax: +91 40 2335 7507

CRISIL Ltd is a Standard & Poor's company

CRISIL Limited

CRISIL House, Central Avenue,

Hiranandani Business Park, Powai, Mumbai 400076. India

Phone: +91 22 3342 3000 | Fax: +91 22 3342 8088

www.crisil.com

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