sunil hitech

8/13/2019 Sunil Hitech

1/19

A UG UST 17, 2010

Econ om y New s

4 Data released on Monday showed that the wholesale price index-basedinflation rose to 9.97% in July, below 10.55% for June and a Reutersforecast of 10.39% for t he mo nth. Policy rat es had some impact (onsliding inf lat ion) but t here a re also b ase fa ctors, f inance minister Pran abMukh erjee sa id. (ET)

4 The commerce and industry ministry ha s said t hat i t do es not fa vour anyrestrictions on exports of iron ore, arguing that production was highertha n do mestic consumption a nd f ai lure to export t he mineral could leadto environmenta l deg rada tion a nd haza rds in mining a reas. (ET)

Corporate New s4 State Bank of India (SBI), announced sharp increasesby up to 150

basis points in deposit rates, as banks aggressively compete for funds

to mee t burgeo ning credit dema nd. Both SBI and ICICI Bankon Mondayalso said they are raising their prime lending rates by 50 basis points.Banks ha ve been raising b enchma rk lending rat es follow ing a hike inpolicy rat es by Reserve Bank o f India in its la st q ua rterly review. (BS)

4 Vedanta will acquire between 51 per cent and 60 per cent of CairnIndia , w ith up t o 51 per cent coming from Cairn Energy. The price pershare o f Rs 405 include s Rs 50 a share f or a non -compet e clause, th a t is, apledg e from Cairn Energy not to pursue licences in India, Pakista n, Bhuta na nd Sri La nka . This price is a t 32 per cent premium t o Ca irn Ind ia'saverage closing price for the 90 days before the deal. (BL)

4 Public sha reholders of Cairn Indiaw ill lose out on a w ho pping Rs 35.7 bnto the promoters who would be only beneficiary of a non-compete feesto be paid by its suitor, London-listed Vedanta group. As part of the deal,the prom ot ers w ill get no n-compete fees to ta lling a bo ut Rs 6 bn. The

non-promoter sha reholders, w ith the ir over 71 crore shares amount ing t oa 37.64 per cent eq uity, wo uld have g ot Rs 35.7 bn ha d t he no n-competefees also been paid t o t hem. (FE)

4 Lanco Infratech ha s firmed up Rs 24.0 bn investme nt plans for b ecominga 9,300-MW company in the next four years from the current powerge nera tion cap acity of 2,082 MW. We w ould a dd over 7,000 MW ofpow er by 2014, ou r current insta lled capa city is 2,082 MW, Mr J. SureshKumar, Chief Finance Officer, Lanco Infratech. (BL)

4 Tata Motorsg loba l sa les increased b y 36 per cent in July to 90,646 unitson rob ust dema nd f or bo th comme rcial and pa sseng er vehicles. Thecompa ny said its to ta l pa sseng er vehicles sales w ere up by 42 per cent to50,070 units and commercial vehicles sales rose 30 per cent to 40,576units. (BL)

4 Sadbhav Engineering Ltdannounced on Monday that the company hassecured Rs 2.3 bn con tra ct in joint ventu re w ith GKC Projects Ltd ,Hyderabad, from the Road Construction Department of the Governmentof Jharkhan d. (BL)

4 Text ile ma jor Arvind is targeting a Rs 40 bn turnover this financial year,driven by B-to-C (business to customer) retail business in the domesticmarket , a t op execut ive sa id toda y . " With the expor t market w e ha vethe risk of running into forex losses. We give high importance to thedome stic grow th in bot h reta il and b randed seg ment. I t w il l cover the r iskof running exchange r isk as we have the pricing advantage in the retai lmarket, " said Sanjay Lalbha i chairman a nd mana ging director Arvind.(BL)

Equity

% Chg14 A ug 10 1 Day 1 Mth 3 Mths

Indian Indices

SENSEX Index 18,051 (0.6) 0.5 7.2

NIFTY Index 5,418 (0.6) 0.5 7.1

BANKEX Index 12,132 (0.5) 6.5 12.4

BSET Index 5,479 (0.6) 0.4 6.4

BSETCG INDEX 14,557 (0.9) (3.0) 7.1

BSEOIL INDEX 10,061 (0.8) (4.4) 3.8

CNXMca p Index 8,716 0.1 3.8 10.3

BSESMCAP INDEX 9,686 (0.3) 2.6 10.7

World Indices

Dow Jones 10,302 (0.0) 2.0 (3.0)

Na sda q 2,182 0.4 0.1 (7.3)

FTSE 5,276 0.0 2.3 0.3Nikkei 9,197 (0.6) (3.0) (10.8)

Ha ng seng 21,112 0.2 4.0 6.8

Value traded (Rs cr)

14 A ug 10 % Chg - Day

Ca sh BSE 5,239 (8.1)

Ca sh NSE 15,959 (3.8)

Deriva t ives 102,320.8 7.9

Net inflows (Rs cr)13 Aug 10 % Chg MTD YTD

FII 717 59.6 4,028 51,930

Mutua l Fund (10) (93.0) (779) (13,310)

FII open interest (Rs cr)

13 Aug 10 % Chg

FII Index Fut ures 17,775 (0.4)

FII Index Opt io ns 61,548 1.6

FII St o ck Fut ures 36,948 0.7

FII St o ck Opt io ns 1,898 (1.8)

Advances /Declines (BSE)14 Aug 10 A B S Total % total

Adva nces 78 779 190 1,047 40

Declines 126 1085 247 1,458 56

Uncha nged 1 70 11 82 3

Commodity % Chg

14 Au g 10 1 Day 1 Mt h 3 Mt hs

Crude (NYMEX) (US$/BBL) 75 0.2 (0.8) 7.6

Go ld (US$/OZ) 1,225 0.8 2.5 0.0

Silve r (US$/OZ) 18 1.4 3.1 (2.7)

Debt /forex market14 Au g 10 1 Day 1 Mt h 3 Mt hs

10 yr G -Sec yie ld % 7.82 7.82 7.64 7.46

Re/US$ 46.80 46.77 46.77 45.63

Sensex

Source: ET = Economic Times, BS = Business Standard, FE = Financial Express,

BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange

14,000

15,100

16,200

17,300

18,400

Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10


2/19

Kotak Securities - Private Client Research Plea se see t he d iscla imer o n t he la st pa ge Fo r Priva te Circula tio n 2

M O RNING INSIGHT A ugust 17, 2010

SHREECEMENTS

PRICE: RS.1809 RECOMMENDATION: ACCUMULATETARGETPRICE: RS.2100 FY11E P/CEPS: 5.5X

q Revenues for Q1FY11 registered a growth of 2% YoY, better than our es-timates. This was impacted by flattish dispatches and decline in cementrealizations but boosted by steep increase in power segment revenues.

q Operating margins of the company stood at 30.7% for Q1FY11. Marginshave declined on both yearly and sequential basis due to decline in real-izations and increase in power and fuel expenses.

q Net profits were impacted by higher depreciation charges as well as de-cline in operating margins. Thus due to this, net profits declined by 64%in comparison with Q1FY10.

q We maintain our revenue estimates but reduce our operating margin as-sumptions going forward.

q At current market price of Rs 1809, stock is trading at 5.5x P/CEPS and

4.8x EV/EBITDA for FY11. We value the company based on the average of6x P/CEPS and 5x EV/EBITDA and arrive at a revised price target of Rs 2100(Rs 2315 earlier) on FY11 estimates. Due to significant volume expansionas well as higher power segment revenues going forward, we continueto maintain ACCUMULATE rating on the stock and would advise investorsto use any decline in the price to buy the stock.

Financial highlight s

(Rs mn) Q1FY11 Q1FY10 YoY (%)

Net Sales 9,446 9,224 2

Expend it ure 6,550 4,974

Inc/Dec in t ra de -299 -9

RM 1,412 723As a % o f net sa les 14.9 7.8

St a f f co st 478 352

As a % o f net sa les 5.1 3.8

Po w er a nd fuel 2,274 1,399


Tra nspo rt a t io n & Ha ndling 1,783 1,842


Other expend it ure 903 667


Opera t ing Pro f it 2,895 4,250 -32

Opera t ing Pro f it Ma rg in 30.7 46.1

Deprecia t io n 1,509 973EBIT 1,387 3,277 -58

Interest 302 152

EBT(exc o ther inco me) 1,085 3,125

Ot her Inco me 168 473

Ext ra o rd ina ry It ems 9 42

EBT 1,245 3,557 -65

Ta x 185 645

Ta x Ra t e (%) 14.9 18.1

PA T 1,060 2,911 -64

Net Prof it 1,060 2,911 -64

NPM (%) 11.2 31.6

Eq uit y Ca pit a l 348.4 348.4

EPS (Rs) 30.4 83.6

Source: Company

Summary table

(Rs m n) FY09 FY10 FY11E

Revenues 27,150 36,321 41,404

% cha ng e YoY 31.4 33.8 14.0

EBITDA 9,508 15,025 12,837

% cha ng e YoY 10.2 58.0 (14.6)

Ot her Inco me 829 758 750Deprecia t io n 2,054 5,704 5,031

EBIT 8,283 10,079 8,556

% cha ng e YoY 81.3 21.7 (15.1)

Net in t ere st 744 766 732

Pre-o pera tive exp 309.3 634

Pro fit be f ore ta x 7,229 8,679 7,824

% cha ng e YoY 96.3 20.1 (9.9)

Ta x 1,449 1,918 1,408

a s % o f PBT 20.0 22.1 18.0

Net inco me 5,780 6,761 6,416

% cha ng e YoY 122.0 17.0 (5.1)

Sh a re s o ut st a nd in g (m ) 3 4. 8 3 4. 8 3 4. 8

EP S (re po rt ed ) (Rs) 1 65 .9 1 94 .1 1 84 .1

P/E(x) 10.9 9.3 9.8

P/CEPS (x) 8.0 5.1 5.5EV/EBITDA(x) 6.4 4.1 4.8

RoE(%) 61.0 43.8 29.6

RoCE(%) 36.4 35.0 24.4

Source: Company, Kotak Securities - Private

Client Research

RESULT UPDATE

Teena Virmani

teena.virmani@ kotak .com

+91 22 6621 6302


3/19


M O RNING INSIG HT A ugust 17, 2010

Revenue grow th led by steep increase in pow er revenues

n Revenues for Q 1FY11 registered a growth of 2% YoY , better than our estimates.

This was impacted by flattish dispatches and decline in cement realizations but

boosted by steep increase in power segment revenues.

n Cement dispatches stood at 2.52M T for Q 1FY11 while cement realizations wit-

nessed a decline of 7% YoY and stood at Rs 3229 per tonne. Realizations have

remained stable on a sequential basis. Company expects cement prices to con-

tinue to remain under pressure due to incremental supplies as well as lower than

expected demand growth.

n Power segment revenues have witnessed a signif icant jump of 258% YoY due to

commissioning of waste heat recovery plant and other 100M W power plant in

Q 4FY10. C ompany sold 142.6 mn units in Q 1FY11. A long with this, company has

also commenced power trading in the current quarter and purchased power for

Rs 473.2 mn in Q 1FY11 to sell it further.

n Company's capex plan for the thermal power plant is one track and fi rst phase

of 150M W of thermal power plant is likely to commission by June, 2011 and

second phase by Aug, 2011. A long with this, 1.5M T clinker and grinding unit is

likely to get operational by Dec, 2010. Thus, post commissioning of cement ca-pacities, total cement capacity of the company would increase to 13.5 M T.

n We thus continue to maintain our estimates for FY11 and expect cement vol-

umes to be 11.2M T and captive power sales of 1bn units. We expect total rev-

enues to be Rs 41.4 bn for FY11.

Operating margins impacted by power trading as well as declinein cement realizations

n O perating margins of the company stood at 30.7% for Q 1FY11. M argins have

declined sequentially due to decline in realizations and increase in power and

fuel expenses.

n M argins have also declined in power division due to low margin power trading

being commenced by the company in Q 1FY11.

n Based on Q 1FY11 performance, we reduce our operating margin assumptions

going forward and now expect margins to be 31% for FY11 as against 36.3%

estimated earlier.

Net profit declined by 64% due to lower operating margins asw ell as higher de pre ciation charges

n Net profits were impacted by higher depreciation charges as well as decline in

operating margins. Thus, due to this, net profits declined by 64% in comparison

with Q 1FY10.

n Depreciation charges have witnessed an increase due to commissioning of new

power plants by end of FY10. We expect depreciation charges to continue toremain high in the current fiscal.

n Post revising our margin estimates downwards, we now expect net profits to be

Rs 6.4bn for FY11.

Valuation and recomm endation

n At current market price of Rs 1809, stock is trading at 5.5x P/CEPS and 4.8x EV/

EBITDA for FY11.

n We value the company based on the average of 6x P/CEPS and 5x EV/EBITDA

and arrive at a revised price target of Rs 2100 (Rs 2315 earlier) on FY11 esti-

mates.

n Due to signif icant volume expansion as well as higher power segment revenues

going forward, we continue to maintain ACCUMULATE rating on the stock and

would advise investors to use any decline in the price to buy the stock.

We continue to maintainACCUMULATE on Shree Cements

with a price target of Rs.2100


4/19



SUNILHITECHENGINEERSLTD(SHEL)

PRICE: RS.183 RECOMMENDATION: BUYTARGETPRICE: RS.240 CONS. FY11E P/E: 5.9X

q Sunil Hi-tech reported disappointing set of Q1FY11 results on the back of

a longer time taken for site mobilization and engineering drawings

q However we expect sequential growth in revenues going forward on the

back of execution of BOP job

q 66% YoY jump in order book to Rs.19.0 bn

q We remain positive on the medium to long term growth prospects of

SHEL

q Revise FY11E EPS to Rs.31.0 (Rs.36.0 earlier)

q Due to 31% upside potential and attractive valuations we continue to

recommend BUY on SHEL with revised price target of Rs.240 (Rs.270 ear-

lier)

Standalone performance - Sunil Hitech

(Rs mn) Q1FY11 Q1FY10 YoY% Q4FY10 QoQ (%)

Net Sales 1,347 1,945 (30.8) 1,726 (22.0)

Ra w ma teria ls 451 938 (51.9) 707 (36.2)

St a f f co st 91 60 52.2 103 (11.7)

Sit e & o epra t ing 573 691 (17.0) 673 (14.7)

Ad min 48 36 36.2 72 (32.8)

To t a l exp. 1,164 1,724 (32.5) 1,554 (25.1)

EBIDTA 183 222 (17.5) 172 6.4

Ot her inco me 20 9 139.5 84 (75.7)

Deprecia t io n 60 48 24.8 61 (2.5)

EBIT 144 182 (21.2) 195 (26.3)

Interest 62 54 14.9 63 (1.2)

PBT 82 128 (36.4) 132 (38.2)

Ext ra o rd ina ry g a in /(lo ss) - - - (136) -

Ta x & deferred t a x 25 44 (41.7) 36 (29.4)

Reported PAT 56 85 (33.7) (40.1) (240.1)

Adjusted PAT 56 85 (33.7) 96 (41.5)

Eq uit y sha res o /s (mn) 12.3 12.3 12.3

Ratios

Operting profit margin (%) 13.6 11.4 +220 bps 10.0 +360 bps

Ra w Ma teria ls /Sa les (%) 33.5 48.2 40.9St a f f co st /Sa les (%) 6.8 3.1 6.0

Site & Opera t ing /sa les(%) 42.6 35.5 39.0

Ad min Exp. /Sa les (%) 3.6 1.8 4.2

Ta x /PBT (%) 31.1 34.0 27.2

PAT (%) 4.2 4.4 5.6

Adj. EPS (Rs) 4.6 6.9 7.8

Ad j. CEPS (Rs) 9.4 10.8 12.8

Source: Company, Kotak Securities - Private Client Research

n For Q 1FY11 the company reported revenues of Rs.1.3 bn, down 30.8% YoY and

down 22.0% on Q oQ basis. This was primarily due to time taken for site mobili-

zation and engineering drawing. This is the typical nature of any BO P job where

it takes between four to six months for getting the project drawings and resource

mobilization.

Cons. Summary table

(Rs m n) FY09 FY10 FY11E

Sa les 5,982 7,227 9,167

Gro w th (%) 95.3 20.8 26.8

EBITDA 687 802 1,002

EBITDA ma rg in (%) 11. 5 11.1 10. 9

Net pro f it 243 314 380

Net debt 1,565 2,095 2,641

EPS (Rs) 19.8 25.5 31.0

Gro w th (%) 15.6 29.1 21.2

DPS (Rs) 1.2 1.5 2.5

ROE (%) 13.9 15.7 17.6

ROCE (%) 15.3 15.6 17.4EV/Sa le s (x) 0.6 0.6 0.5

EV/EBITDA (x) 5.5 5.4 4.9

P/E (x) 9.2 7.2 5.9

P/CEPS (x) 5.5 4.2 3.6

P/BV (x) 1.3 1.1 1.0


Client Research

RESULT UPDATE

Apurva Doshi

doshi.apurva@ kotak .com

+91 22 6621 6308


5/19



n The management has confirmed that the drawings for the project have been

received in the month of June and the project is currently being executed. G oing

forward we would also see the incremental revenues due to commencement of

the supply component for the BO P job. Thus the revenues are expected to in-

crease going forward on a sequential basis.

n EBIDTA margin during Q1FY11 was up by 220 bps on YoY and up 360 bps on

Q oQ basis to 13.6% primarily due to reduction in supply of material which led to

higher services which typically enjoy higher operating margins. However going

forward as the supply commences for the BO P job the operating margins are

expected to stabilize around 11% .

n EBIDTA for Q1FY11 was at Rs.183 mn down 17.5% YoY and up 6.4% on QoQ

basis.

n The staff cost has shot up by 52.2% on Y oY basis to Rs.91 mn as the number of

employees have increased by 31% on Y oY basis to 2340 employees and also

there was 20% increase in salary and other benefits to the employees.

n The interest cost has gone up by 14.9% on Y oY basis to Rs.62 mn as any BO P

order would constitute supply portion which needs to be tied up. The advance

payment for such suppliers ensures timely delivery and rate benefits. This led to

increasing bank borrowing and subsequent increase in the interest cost.n PBT for Q 1FY11 was down 36.4% YoY and down 38.2% on QoQ basis to Rs.82

mn.

n Adjusted PAT for the Q1FY11 stood at Rs.56 mn, down 33.7% YoY and down

41.5% on sequential basis thereby translating into quarterly Adj. EPS of Rs.4.6

and CEPS of Rs.9.4.

60% YoY jump in order book to Rs.19.0 bn

n During FY10, SHEL won several major orders and with this the order book of the

company has gone up by 60% YoY to Rs.19.0 bn.

n The major order is of BO P (Balance of Plant) contract for 250 M W Parli TPS

project unit No.8 which is owned by M AHA G ENCO with order value of Rs.4.9

bn. The other major order is from L& T worth Rs.1.9 bn for the structural, fabrica-tion and architecture work of 1000 M W Koradi Thermal Power Station owned by

M AHAGENCO .

n The BO P order is very positive for SHEL as with this order it is eligible to bid for

larger BOP contracts and has moved up the value chain from being a contractor

to a large BO P player. With its strong execution track record it is likely to win

several large orders and this would lead to significant increase in revenues and

profitability for SHEL going forward.

n With this BO P job SHEL has joined the list of BOP players like TATA , BGR, Indure,

Punj Lloyd and L& T.

n SHEL has also forayed into fast growing airport infrastructure space. It has won

the job of construction of pre engineered building and allied works for warehous-

ing in M IHA N area through M aharashtra A irport Development Corporation(M ADC). This is the pilot job secured by SHEL and marks its entry into fast grow-

ing airport infrastructure space.

Change in earning estimates - FY11E

(Rs mn) Old Revised Grow th (%)

Net sa les 10,587 9,167 (13.4)

EBIDTA (%) 10.6 10.9 3.1

PAT 441 380 (13.9)

EPS (Rs.) 36.0 31.0 (13.9)

CEPS (Rs.) 56.9 51.3 (9.8)

WACC (%) 13.1 13.1 -

Termina l g ro w t h (%) 4.0 4.0 -

Price Ta rg et (Rs./sha re) 270 240 (11.1)

Source: Kotak Securities - Private Client Research

Order book as on (Rs. bn)

5

10

15

20

25

Dec_

07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Source: Company


6/19



Revise FY11 earning estimates and price target

n We have revised our FY11 earning estimates to account for lower then expected

revenues and profit. Basically we have accounted for delay of three months due

time taken by the company for resource mobilization at the site and engineering

drawings for the 250 M W BO P job at Parli in M aharashtra.

n We now expect SHEL to report revenues of Rs.9.1 bn (down 13.4% ), operating

margin of 10.9% (up 30 bps) and PAT of Rs.380 mn (down 13.9% ) in FY11E.

n Accordingly we expect SHEL to report lower EPS of Rs.31.0 and CEPS of Rs.51.3

in FY11E as against our earlier estimate of Rs.36.0 and Rs.56.9 respectively.

n We have valued SHEL on DC F method of valuation with 13.1% WA CC and

4.0% terminal growth rate (no change) based on FY11 earning estimates. Due

to downward revision in earning estimates the price target is also revised down-

wards from Rs.270 to Rs.240.

Price performance comparison

Source: Bloomberg

Valuation & Recommendation

n O ver last four months the stock of SHEL has already corrected by ~ 21% while

the SENSEX was up 2% during the same period. Thus the stock has

underperformed the markets for last four months.

n At the current market price of Rs.183, the stock trades at attractive valuations of

1.0x book value, 5.9x earnings and 3.6x cash earnings based on FY11E.

n We believe that the current valuation is attractive considering the clear growth

prospects of the company, going forward. This is due to strong order book of

Rs.19.0 bn which is 2.6x FY10 revenues and superior execution capabilities.

n We remain positive on the medium to long term growth prospects of SHEL due

to continued growth prospects for the power sector in India primarily due to~ 16% peak power deficit.

n Due to 31% upside potential from the current levels we continue to recommend

BUYon SHEL with revised price target of Rs.240.

70

80

90

100

110

120

1-Apr

15-Apr

29-Apr

13-May

27-May

10-Jun

24-Jun

8-Jul

22-Jul

5-Aug

SHEL SENSEX

Revenues (Rs bn)


Client Research

Adj. EPS (Rs)


Client Research

-

3.0

6.0

9.0

12.0

FY05

FY06

FY07

FY08

FY09

FY10

FY11E

0

10

20

30

40

FY05

FY06

FY07

FY08

FY09

FY10

FY11E

We recommend BUY on Sunil Hi

Tech Engineers with a revised

price target of Rs.240


7/19



ALLCARGOGLOBALLOGISTICSLTD(A LLCARGO)

PRICE: RS.171 RECOMMENDATION: BUYTARGETPRICE: RS.210 CONS. CY10E P/E: 14.1X

q ALLCARGO reported good set of Q2CY10 results which are above our es-

timates both on the revenues and on the profitability front

q ECULINE volumes up 26% YoY, Indian MMTO volumes up 8% YoY and

CFS volumes up 37% YoY on the back of pick up in global trade

q Sharp revival in ECULINE profitability - sustainable in our view

q Looking to acquire NVOCC company in China

q To invest Rs.2.5 bn over next 18 months to augment capacities

q Revise CY10 earning estimates with EPS of Rs.12.1 (Rs.11.9 earlier)

q Due to good long term potential, attractive valuation and 22% upside

potential we upgrade ALLCARGO to BUY with increased price target of

Rs.210 (Rs.196 earlier)

RESULT UPDATE

Apurva Doshi

doshi.apurva@ kotak.com

+91 22 6621 6308

ALLCARGO Q2CY10 Results - Standalone

(Rs mn) Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%) H1CY10 H1CY09 YoY (%)

Net Sales 1,622 1,164 39.3 1,640 (1.1) 3,262 2444 33.4

Opera t ing exp. 1,011 649 55.8 1,017 (0.5) 2,028 1395 45.3

St a f f co st 121 73 66.2 104 16.2 224 158 41.7

Ot her exp. 100 68 47.9 102 (1.9) 202 159 26.8To ta l exp. 1,232 789 56.0 1,223 0.8 2,454 1,713 43.3

EBIDTA 390 375 4.0 418 (6.7) 807 731 10.4

Ot her inco me 77 39 99.7 51 51.9 128 79 62.1

Deprecia t io n 147 90 64.1 120 22.5 268 174 54.1

EBIT 319 323 (1.3) 348 (8.2) 667 636 4.9

Interest 30 42 (29.0) 23 28.0 53 85 (37.6)

PBT 289 281 2.9 325 (10.8) 614 551 11.5

Ta x & deferred t a x 30 56 (46.8) 40 (25.0) 70 109 (36.0)

PA T 260 225 15.2 285 (8.9) 544 442 23.1

Ratios

Operting profit margin (%) 24.0 32.2 -8.2 25.5 -1.5 24.8 29.9 -5.1

Opea t ing exp /Sa les (%) 62.4 55.8 62.0 62.2 57.1

St a f f co st /Sa les (%) 7.4 6.2 6.3 6.9 6.5

Ot her Exp. /Sa les (%) 6.2 5.8 6.2 6.2 6.5

Ta x /PBT (%) 10.3 19.9 12.2 11.3 19.7

TEU`s ha nd led 54,718 40,032 36.7 55,287 (1.0) 110,005 78,243 40.6

Avg . rea lisa t ions Rs /TEU 8,344 8,642 (3.5) 8,081 3.3 8,212 8,885 (7.6)

MTO ha nd led 6,302 5,865 7.5 6,978 (9.7) 13,280 11,726 13.3

Avg . rea lisa t ions Rs /MTO 141,576 107,808 31.3 133,484 6.1 137,324 117,757 16.6

Source: Company

Cons. Summary table

(Rs mn) CY08 CY09 CY10E

Sa les 23,141 20,609 26,013

Grow t h (%) 43.4 (10.9) 26.2

EBITDA 2,198 2,185.1 2 ,892.8

EBITDA ma rg in (%) 9.5 10.6 11.1

Net pro f it 1,077 1,299 1,586

Net debt 2,428 1,128 694

EPS (Rs) 9.6 10.4 12.1

Grow t h (%) 40.7 20.7 22.0

DPS (Rs) 1.0 1.2 1.5

ROE (%) 17.6 13.2 14.4

ROCE (%) 19.1 16.0 18.1

EV/Sa le s (x) 1.1 1.1 0.9

EV/EBITDA (x) 11.3 10.7 8.0

P/E (x) 17.8 16.4 14.1P/CEPS (x) 12.6 11.6 9.9

P/BV (x) 3.7 2.3 1.8


Client Research


8/19



Segmental Results

Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%) H1CY10 H1CY09 YoY (%)

Revenues (Rs.mn)

MMTO 892 632 41.1 931 (4.2) 1,824 1,381 32.1

CFS 457 346 32.0 447 2.2 903 695 29.9

Eq uipment Hiring 325 222 46.5 309 5.0 634 455 39.4PBIT (Rs. mn)

MMTO 86 110 (21.5) 108 (19.7) 194 204 (4.7)

CFS 202 180 12.3 214 (5.5) 416 360 15.6

Eq uipment Hiring 52 44 17.6 63 (18.0) 115 110 4.9

PBIT (%)

MMTO 9.7 17.4 (44.4) 11.6 (16.1) 10.6 14.8 (27.9)

CFS 44.3 52.0 (14.9) 47.8 (7.5) 46.0 51.7 (11.0)

Eq uipment Hiring 16.0 19.9 (19.7) 20.4 (21.9) 18.1 24.1 (24.7)

Source: Company

n Net Sales for Q 2CY 10 was at Rs.1.6 bn, up 39.3% on Y oY basis. This is primarily

due to 41.1% YoY growth in the M M TO business, 32.0% YoY growth in the CFS

business and 46.5% YoY growth in the equipment hiring business of the com-

pany.

n CFS volumes are up 36.7% YoY and down 1.0% on sequential basis to 54718

TEUs in Q2CY10 thereby indicating strong pickup in the EXIM volumes on the

back of global recovery.

n The average realizations per TEU have gone down by 3.5% on Y oY basis to

Rs.8344 per TEU. This is due to increased contribution from C hennai and M undra

CFS which typically enjoy lower average realization then those at JNPT.

CFS TEUs


JNPT 32188 23571 36.6 34710 (7.3) 66898 70561 (5.2)

Chenna i 17615 12973 35.8 15449 14.0 33064 21059 57.0

Mundra 4915 3488 40.9 5119 (4.0) 10034 7682 30.6

To ta l 54718 40032 36.7 55278 (1.0) 109996 99302 10.8

Source: Company

MTO volumes


Ind ia 6302 5865 7.5 6978 (9.7) 13280 11,726 13.3

Eculine 54000 42684 26.5 51265 5.3 105265 85,171 23.6

To ta l 60302 48549 (19.5) 58243 3.5 118545 96897 (18.3)

Source: Company


9/19



CFS TEU handled and Average Realizations

Source: Company

n M TO volumes have grown by 7.5% on YoY basis to 6302 TEU`s in Q 2CY 10. This

is primarily due to pick up in both LCL and FCL M TO volumes.

nEBIDTA margin during Q 2CY10 was down sharply by 820 bps on YoY basis to24.0% . This was due to price increases taken by the company for its M M TO

business to pass the freight hik es. Basically the EBIDTA per TEU remains the

same while the prices have gone up thereby impacting operating profit as a per-

centage of revenues.

n The PBIT margin of M M TO business has gone down from 17.4% in Q2CY 09 to

9.7% in Q 2CY10 due to sharp increase in deprecation of the equipment hiring

division. The company has added 30 cranes at a capex of Rs.1.1 bn and has 84

cranes as of June 2010. A lso it provides aggressive depreciation in 6 years as

against its economic life of 15 years.

n EBIDTA for Q2CY 10 was at Rs.390 mn up 4.0% on YoY basis.

n Depreciation expense of the company increased significantly to Rs.147 mn dueto purchase of cranes and other handling equipments. However interest cost was

down 29.0% YoY to Rs.30 mn as it has repaid high cost debt.

n PBT for the Q 2CY 10 was at Rs.289 mn up 2.9% on YoY basis.

n PAT for the Q2C Y10 was at Rs.260 mn up 15.2% on YoY basis.

ECULINE revenues (Rs mn)

Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%)

Revenues 4,532 3920 15.6 4,064 11.5

EBIDTA 243 210 15.7 146 66.1

NPAT 101 61 65.6 56 79.8

Source: Company

Eculine Financials (mn Euro)

Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%)

Revenues 77.0 58.0 32.8 63.7 20.9

EBIDTA 4.1 3.0 36.7 2.3 78.3

NPAT 1.7 0.9 88.9 0.9 93.2

EBIDTA (%) 5.3 5.2 3.6

PAT (%) 2.2 1.6 1.4

Source: Company

35000

40000

45000

50000

55000

60000

Q1CY08

Q2CY08

Q3CY08

Q4CY08

Q1CY09

Q2CY09

Q3CY09

Q4CY09

Q1CY10

Q2CY10

4000

6000

8000

10000

12000CFS TEU handled Average Realisations (Rs./ TEU)


10/19



Eculine Financials

M TO volumes of ECU LINE are up sharply 26.5% on YoY basis to 54000 TEUs. The

revenues of Eculine are up 15.6% YoY , EBIDTA is up 15.7% Y oY and NPA T is up

65.6% on YoY basis. The sharp improvement is on account of pick up in the global

economy. The management is seeing increased pick in certain parts of the world

economy like Asia, G ermany and France. T he revenues would have been even

higher however it to take 7.6% impact of Indian Rupee appreciation against Euro.

ALLCARGO Q2CY10 Results - Consolidated

(Rs mn) Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%) H1CY10 H1CY09 YoY (%)

Net Sales 6,395 5,232 22.2 5,858 9.2 12,253 10,039 22.1

Opera t ing exp. 4,375 3,365 30.0 3,892 12.4 8,267 6,347 30.2

St a f f cost 899 859 4.7 908 (0.9) 1,807 1,703 6.1

Other exp. 454 384 18.1 486 (6.7) 940 807 16.4

To ta l exp. 5,728 4,608 24.3 5,286 8.4 11,014 8,858 24.3

EBIDTA 667 624 6.8 572 16.6 1,238 1,181 4.9

Other inco me 77 67 15.8 42 82.5 119 107 11.8

Deprecia t io n 180 140 28.5 150 19.7 330 257 28.5

EBIT 564 551 2.4 464 21.6 1,027 1,031 (0.3)

Interest 73 89 (18.5) 35 105.6 108 142 (23.8)

PBT 491 461 6.4 428 14.6 919 889 3.4

Ext ra o rdina ry g a in /(lo ss) (5) 144 - - - (5) 144 -

Ta x & deferred ta x 86 125 (30.8) 75 15.8 161 237 (32.1)

PAT 400 480 (16.8) 354 13.0 753 796 (5.3)

Less Mino rit y Int . 21 14 47.3 13 55.4 34 53 (35.9)

NPA T 379 466 (18.7) 340 11.3 719 742 (3.1)

Adj. PAT 384 322 19.0 340 12.7 724 599 21.0

Eq uit y (Rs. mn) 261 224 250 261 224

Diluted eq uit y (Rs. mn) 261 261 261 261 261

Ratios

Operting profit margin (%) 10.4 11.9 -150 bps 9.8 +60 bps 10.1 11.8 -170 bps

Opea t ing exp /Sa les (%) 68.4 64.3 66.4 67.5 63.2

St a f f co st /Sa les (%) 14.1 16.4 15.5 14.7 17.0

Other Exp. /Sa les (%) 7.1 7.3 8.3 7.7 8.0

Ta x /PBT (%) 17.6 27.0 17.4 17.5 26.7

Diluted EPS (Rs) 2.9 3.6 2.6 5.5 5.7

Diluted CEPS (Rs) 4.3 4.6 3.8 8.0 7.7

Source: Company

n O n a consolidated basis, the company reported net sales of Rs.6.4 bn, up 22.2%YoY and up 9.2% on sequential basis. This was primarily due to 15.6% YoY

growth in the revenues of Eculine business. The company has passed on the

higher freight rates to its customers thereby reporting higher revenues.

n The operating profit is up 6.8% on YoY basis to Rs.667 mn due to ramp up in

volumes leading efficiency in its global operations.

n Adj. NPAT stood at Rs.384 mn up 19.0% YoY and up 12.7% on sequential basis

thereby translating into quarterly EPS of Rs.2.9 and CEPS of Rs.4.3.


11/19



Hindustan cargo financials

(Rs. mn) Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%)

Revenues 393 270 45.6 296 32.8

EBIDTA 24 14 71.4 5 349.4

PAT 12 7 66.7 1 733.3

EBIDTA (%) 6.1 5.2 1.8PAT (%) 3.1 2.7 0.5

Source: Company

Hindustan cargo Financials

In Q 2CY10 the revenues of Hindustan Cargo are up 45.6% on YoY basis to Rs.393

mn. This was primarily due to pick up in the air freight business on account of recov-

ery in the global economy. It has turned around its operations and reported EBIDTA

of Rs.24 mn up 71.4% YoY and PAT of Rs.12 mn up 66.7% YoY.

Project cargo financials

(Rs mn Q2CY10 Q2CY09 YoY (%) Q1CY10 QoQ (%)Revenues 350 200 75.0 414 (15.5)

EBIDTA 51 49 4.1 77 (33.6)

PBT 48 34 39.7 74 (35.4)

EBIDTA (%) 14.6 24.5 18.6

PBT (%) 13.6 17.0 17.8

Source: Company

Project cargo division

The project cargo division reported revenues of Rs.350 mn in Q 2CY10 up 75.0% on

YoY basis. EBIDTA is up 4.1% YoY and PBT is up 39.7% on YoY basis to Rs.48 mn.

G oing ahead this division has good visibi lity as currently it has order book of Rs.0.8bn to be executed in next 10 to 12 months.

Raised $23.5 mn

ALLCA RG O has successfully completed $23.5 mn Q IP in A pril 2010. It issued 5.66

mn shares @ Rs.184.8 per equity share of face value of Rs.2 each. Thus it raised

Rs.1.0 bn through Q IP. The money would be used to expand the logistics facilities

and some part of the money would also be used to fund the acquisition.

Expansion and acquisition

n ALLCA RG O has incurred capex of Rs.1.3 bn in CY09 and it plans to incur capex

of Rs.2.5 bn in CY10E.

n The company has Rs.2.6 bn cash which would be used for expansion and acqui-

sition in C Y10E. it has already spent Rs.1.1 b in H1CY10.

n O ut of total capex of Rs.2.5 bn in C Y10E, Rs.1.0 bn would be used to acquire

and NVO CC company in C hina, Rs.1.0 bn would be used for buying equipments

like cranes multi axel trailers etc. and balance Rs.500 mn would be used for

building ICD cum warehouses at Dadri, Hyderabad, Nagpur, Bangalore and

Pune.

n A G L is constructing IC D at Dadri, Near Delhi in JV with C O NC O R and this is ex-

pected to be operational by December 2010.

n Then it would develop IC D cum warehouse at Hyderabad and Nagpur in JV with

Hind Terminals which are expected to be operational by M arch 2011.

n AG L owns land at Bangalore and Pune on which it is looking to develop ICD cum

warehouse either on its own or through JV.


12/19



Not provided for IT liability of Rs.650 mn

ALLCA RG O has not provided for the Income Tax liability of Rs.650 mn. Basically the

IT department has disallowed deductions under section 80-IA for infrastructure in

terms of C FS and ICD operations from AY 2005 onwards. The company has filed an

appeal and is confident of winning the same and thus it has continued to provide

M AT. We have not accounted for this in our earning estimates as we await results

of the appeal being made by the company against the IT authorities.

Revision in earning estimates and price target

n We have revised the earning estimates to account for higher then expected vol-

umes in the CFS and M M TO business and increase in freight rates which are suc-

cessfully passed on to its customers.

n Due to faster then expected recovery in the EXIM business we expect C FS busi-

ness of A LLCARG O to handle 2.25 lakh TEU (up 12.5% ) in CY10E. However due

to competition we expect the realizations per TEU to fall by 8.2% to Rs.8012 per

TEU.

n We expect the ECULINE to handle 2.1 lakh TEU (up 5.0% ) due to the fact that

certain pockets of the world primarily Asia, are doing good business and haverecovered faster from the recessionary trend.

n O n a consolidated basis for C Y10E we expect A LLCA RG O to report revenues of

Rs.26.0 (up 12.2% ). O perating margin of 11.1% (down 90 bps) and NPAT of

Rs.1.6 bn (up 2.3% ).

n The operating margin is expected to decline due to hike in freight rates which

are passed on to the customers. The absolute profitability is expected to remain

same while the operating profit as a percentage of revenues is expected to come

down.

n Accordingly we expect A LLCA RG O to report higher EPS of Rs.12.1 and CEPS of

Rs.17.4 in C Y10E as against our earlier estimate of Rs.11.9 and Rs.16.4 respec-

tively.

n We have valued ALLCARG O on DCF method of valuation with 13.1% WA CC

and 4.0% terminal growth rate (no change). Due upward revision in earning

estimates the price target is also revised upwards from Rs.196 to Rs.210 per

share.

Cons. Earning Estimates (CY10E)

(Rs mn) Old Revised % Shift

Revenues 23,176 26,013 12.2

EBIDTA (%) 12.0 11.1 (7.1)

Prof it 1,549 1,586 2.3

Eq uit y 261 261 -EPS (Rs.) 11.9 12.1 2.3

CEPS (Rs.) 16.4 17.4 5.8

CFS (la kh TEU) 2.00 2.25 12.5

Avg Rea li (Rs./CFS TEU) 8,725 8,012 (8.2)

MMTO (TEU) 28,750 28,750 -

ECULINE (La kh TEU) 2.0 2.1 5.0

WACC (%) 13.1 13.1 -

Termina l g ro w th (%) 4.0 4.0 -

Price Ta rg et (Rs./sha re) 196 210 7.2



13/19



Recommendation and Valuation:

n At the current market price of Rs.171, the stock trades at attractive valuation of

1.8x book value, 14.1x earnings and 9.9x cash earnings based on CY10E.

n We continue to remain positive on the medium to long term growth prospects of

ALLCARG O primarily due to focus on high margin integrated logistics services.

The company is also expanding its operations in areas like cargo consolidation,

warehousing, CFS, ICD, equipment hiring, and project cargo business.

n Due to good long term potential, attractive valuation and 22% upside potential

from the current levels we upgrade ALLCA RG O to BUY with increased price tar-

get of Rs.210.

We upgrade Allcargo to BUY

with an increased price target ofRs.210


14/19



SESAGOA

PRICE: RS.322 RECOMMENDATION: ACCUMULATETARGETPRICE: RS.352 FY11E P/E: 7.2X; EV/EBIDTA: 6.5X

Cairn Strategic Investment - unrelated, unwanted but maynot be that bad

Sesa G oa has announced acquisition of a strategic stake in C airn India Limited

What's the deal?

n Sesa Goa would be acquiring 20% stake in Cairn India for a total consideration

of ~ $3 to 3.5bn, as part of a transaction with Vedanta. Purchase of shares

would happen either through (i) O pen offer for 20% to Cairn India shareholders

or (i i) purchases from Vedanta/Cairn Energy

n O ffer likely to be funded by mix of cash resources and new debt in the ratio of ~

2:1

n Vedanta plc (promoter group of Sesa Goa) to separately acquire 31% - 40% of

Cairn India from Cairn Energy resulting in a total acquisition of between 51% -

60% by Sesa G oa and Vedanta put together and thus getting management con-

trol of Cairn India.

n Deal is expected to close by Q1 2011 subject to necessary shareholder and regu-

latory approvals.

n Deal might not be immediate EPS accretive but it is unlikely to be much EPS

dilutive as well.

n Cairn India has (i ) 2P reserves and 2C resources of 890mm boe and is India's

third largest upstream oil company by reserves and resources (ii) is a low cost

producer with operating expenditure of just ~ $5/bbl and low cost F& D platform

of $5/bbl and (iii) has long life assets with ability to increase production plateau.

It has 11 blocks in total, out of which 3 are producing operated blocks (2 off-

shore and 1 onshore) while 8 are exploration blocks - 5 operated (4 in India, 1 in

Sri Lanka) and 3 non-operated in India

Positives

n Vedanta management has excellent proven track record of inorganic growth for

assets acquired in India. Cairn India's core operations are in Rajasthan nearby to

location of Hind Zinc operations so management understanding of territory would

be of advantage. Vedanta G roup has several times in past successfully multiplied

production volume by capex investment and timely project execution along with

aggressive exploration and resource enhancement. So, if the Vedanta manage-

ment is able to replicate the same for the newly acquired oil & gas assets, inwhich they do not have prior experience, it can create significant value for Sesa

G oa shareholders in coming years.

n Sesa G oa massive cash resources are deployed in Cairn India, an asset which is

(i) reasonably understood by Indian investors (ii) has excellent production growth

profile for near, medium and long term (ii i) has low operating costs of ~ $5/bbl

and likely to generate strong cash flows (iv) the product demand is unquestion-

able for at least a decade or two. So, though big inorganic expansion in iron ore

would be unlikely now, the investment has gone into a reasonably sound asset.

This might be less risky then if any acquisition would have been made in iron ore

wherein prices are near all time highs and demand supply tightness might not be

sustainable.

Conolidated summ ary Table

(Rs m n) FY10 FY11E FY12E

Sa les (Rs. mn ) 58,031 86,577 96,148

Gro w th (%) 17.8 49.2 11.1

EBITDA (Rs. m n) 31, 448 49, 402 53, 855

EBITDA Ma rg ins (%) 53.7 56.6 55.6

Ne t P ro f it (Rs. m n) 2 6, 29 1 3 9, 848 4 5, 32 1

EPS (Rs.) 31.6 44.8 50.9

Gro w th (%) 25 42 14

ROE (%) 33.2 29.3 25.5

ROAE(%) 41.6 37.0 28.9

EV/Sa le s (x) 3.8 3.7 2.9

EV/ EBITDA (x) 6.9 6.5 5.2

P/E (x) 10.2 7.2 6.3P/B (x) 3.4 2.1 1.6

BVPS (x) 95.3 152.9 200.0


Client Research

COMPANY UPDATE

Saurabh Agrawal

agrawal [email protected]

+91 22 6621 6309


15/19



Negatives

n Sesa G oa would be required to buy any shortfall in purchase of 20% stake inCairn India through purchase of shares from Vedanta Resources or Cairn PLC at

a significant 14.3% premium of Rs.50/share. As per our understanding, it is not

Sesa Goa which is getting management control of Cairn India but its promotergroup and to treat both at par might not be apt if high corporate governance

standards are chosen to be maintained. It is to be noted that the premium is

being paid for non competing of Cairn PLC in similar domain in India, Pakistan,Sri Lanka and Bhutan for the duration of just 3 years which might not be reason-

able timeframe to commensurate the non-competing premium consideration

would be varying between Rs. 38.3bn - 48.9bn.

n Sesa G oa would be having just 20% stake in Cairn India, which means contribu-

tion would be coming in form of dividend income and share of profits of associ-

ates (mere line item) in consolidated accounts of the company. Sesa G oa wouldnot be able to benefit from free cash flow generation in Cairn India which it

could have used for either growth expansion or reward to investors in case of

other acquisition. So the strategic investment might be treated similar to holdingcompany investment which might bear a valuation discount of > 20% by inves-

tors.

Risks

n Sesa G oa's shareholders would no longer enjoy a rare advantage of balancesheet strength cushion in an environment wherein sustenance of global eco-

nomic recovery is still not very certain.

n Sesa G oa might have to acquire shares in C airn India through open offer at aprice of Rs.405/share and not at as Rs 355/shares if SEBI decides that significant

non-competing premium being paid to Cairn PLC is unjustified and that it is just

part of valuation of C airn India whose benefit should be enjoyed by all share-holders.

n Sesa G oa valuation would now be correlated with commodity prices of crude oil

in addition to iron ore. This could have been de-risking if the strategic investmentwas done when crude oil traded at closer to its average over last few years. But

the valuation assumptions of $80/bbl might be risky in the present global macrosetup.

Valuation

Sesa G oa EPS estimates for FY11E is revised marginally to Rs.44.7 vs. Rs.44.8 earlier

while FY12E EPS estimate is revised upward to Rs.50.9 vs.47.9 earlier. We are now

valuing Sesa Goa on 7x (vs.5x) EV/EBITDA for FY11E. H igher multiple is given tocapture value of strategic investment in C airn India wherein there would be signi fi-

cant earnings generation which would not be captured in Sesa Goa' s EBITD A calcu-

lation. We arrive a target price of Rs.352. We maintain our accumulate rating as webelieve the valuation are reasonable for Sesa Goa @ 6.5x EV/EBITD A and 7.2x P/E

for FY11E whose organic expected growth story remain intact and there is likely up-

side from announced strategic investment in C airn India.

Assumptions - With Key Changes

Old estimates New estim ates

FY10 FY11E FY12E FY10 FY11E FY12E

Sa les Vo lume (mn to nnes) 20.5 23.0 28 20.5 23.0 28

Co ntra ct Prices (US$/t ) 44.6 84.6 67.7 44.6 84.6 67.7

Spo t Prices (US$/t ) 56.0 75.6 69.9 56.0 75.6 69.9

Excha ng e Ra t e (US$/INR) 47.0 45.0 45.0 47.0 45.0 45.0

Rea lisa t io ns in USD/to n 53.7 77.9 69 53.7 77.9 69

Rea lisa t io ns in Rs/to n 2524 3504 3107 2524 3504 3107

EBITDA Ma rg ins (%) 53.7 56.6 55.6 53.7 56.6 55.6

EPS (Rs.) 31.6 44.8 47.9 31.6 44.7 50.9


We maintain ACCUMULATE on

Sesa Goa with a price target of

Rs.352


16/19



Target price based on FY11E consolidated earnings

EBITDA Multiple Valuation Value

(Rs mn) (x) (Rs mn) (Rs/Share)

Enterprise Va lue 49402 7.00 345812 388.7

Add : Net Ca sh (a t end o f FY11E) -32341 -36.4

Ta rg et Ma rket Ca pit a liza t io n 313471 352.3Target Price 352.0


Appendix

Cairn India Core Assets

Source: Sesa Goa PPT

Cairn India Today



17/19



Rajasthan Reserve and Resource Potential


Cairn India Exploration Portfolio outside Rajasthan



18/19



Consolidated financials

Profit and Loss Statement (Rs mn)

(Year-end March) FY10 FY11E FY12E

Net Sales 58,031 86,577 96,148

EBITDA 31,448 49,402 53,855

Ot her Inco me 3,050 3,886 1,147

Deprecia t io n 745 968 1,123

Interest 517 870 3,750

PBT 34,446 51,450 50,129

Ta xes 8,056 12,477 12,658

PA T 26,291 39,848 45,321

Sha res Outst a nd ing mn 831 890 890

EPS (Rs) 31.6 44.8 50.9


Balance sheet (Rs mn)


LIABILITIES

Eq uit y Sha re Ca pit a l 831.0 889.7 889.7

Reserves & Surplus 78,346.1 135,127.9 177,066.3

Net Worth 79,177 136,018 177,956

Sho rt Term Lo a ns 0 0 0

Lo ng Term Lo a n s 19,606 50,000 50,000

Deferred Ta x Lia b ilit ies 750 800 664

Total Liabilities 99,966 186,818 228,620

ASSETS

Gro ss Blo ck 27,510 32,048 37,048

Less Deprecia t io n 5,741 6,709 7,831

Net Blo ck 21,770 25,339 29,216

CWIP 787 1,250 1,250

Invest ments 45,649 140,000 177,451

o f w hich f ina ncia l invest ments 45,649 0 37,451

Tota l Current Asset s 44,160 32,087 33,818

To ta l Current Lia bilit ies 12,400 11,859 13,115

Net Current Assets 31,760 20,229 20,703

Total Assets 99,966 186,818 228,620


Key ratios


EBITDA Ma rg ins (%) 53.7 56.6 55.6

NPM Ma rg ins (%) 45.0 44.7 38.7

ROE o n yr-end eq uit y (%) 33.2 29.3 25.5

ROAE (%) 41.6 37.0 28.9

EPS g ro w th (%) 24.9 41.6 13.7

P/E 10.2 7.2 6.3

EV/sa les 3.8 3.7 2.9

EV/EBITDA 6.9 6.5 5.2

P/B 3.4 2.1 1.6BVPS 95.3 152.9 200.0



19/19


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price of the Insti tutiona l Equities Research Group of Kota k Securit ies Limited.

We and our a ffi l iates, officers, directors, and employees wo rld wide ma y: (a) from time to t ime, have long or short posit ions in, an d buy or sell the securit ies

thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securit ies and earn brokerage or other compensationor act as a market maker in the financial instruments of the company (ies) discussed herein or act as advisor or lender /borrower to such company (ies) orhave other potential confl ict of interest with respect to any recommendation and related information and opinions.

The a nalyst for t his report certi fies that al l of t he view s expressed in th is report a ccurate ly reflect his or her personal views ab out t he subject company o r

companies and i ts or their securit ies, and no part of his or her compensation was, is or wil l be, directly or indirectly related to specific recommendations orviews expressed in t his report .

N t f t hi t i l b d li t d i f d / di t ib t d ith t K t k S iti i i t t t

Ga ine rs & Lo sers Nifty Gainers & LosersPrice (Rs) chg (%) Index points Volume (mn)

Gainers

ITC 158 1.3 3.6 2.9

Hindust a n Unilever 270 1.5 1.5 1.8

PNB 1,171 2.8 1.5 0.4

Losers

ICICI Ba nk 957 (2.0) (7.4) 3.2

L&T 1,790 (1.0) (3.4) 0.8

Ca irn Ind ia 333 (6.4) (3.4) 37.2

Source: Bloomberg

Research TeamDipen ShahIT, Me d [email protected]

+ 91 22 6621 6301Sanjeev ZarbadeCapital Goods, Engineering

[email protected]+ 91 22 6621 6305

Teena VirmaniConstruction, Cement, Mid Cap

[email protected]

+ 91 22 6621 6302

Apurva DoshiLogistics, Textiles, Mid [email protected]

+ 91 22 6621 6308Saurabh AgrawalMetals, Mining

agrawal [email protected]+ 91 22 6621 6309

Saday SinhaBanking, Economy

[email protected]

+ 91 22 6621 6312

Sarika [email protected]

+ 91 22 6621 6301Arun AgarwalAutomobiles

arun.ag arw [email protected]+ 91 22 6621 6143

Ruchir KhareCapital Goods, Engineering

[email protected]

+ 91 22 6621 6448

Jayesh [email protected]

+ 91 22 6652 9172Shrikant ChouhanTechnica l ana lyst

[email protected]+ 91 22 6621 6360

K. KathirveluProduction

[email protected]

+ 91 22 6621 6311

sunil hitech

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