JP Associates, 1Q FY 2014

7/27/2019 JP Associates, 1Q FY 2014

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Please refer to important disclosures at the end of this report 1

Quarterly highlights StandaloneY/E March (` cr) 1QFY14 1QFY13 % chg(yoy) 4QFY13 % chg(qoq)Net sales 3,315 3,008 10.2 3,907 (15.2)Operating profit 785 816 (3.8) 894 (12.2)

Adj. Net profit (61) 138 (144.0) 119 (150.9)Source: Company, Angel Research

For 1QFY2014, Jaiprakash Associates (JAL) posted a mixed set of numbers with

decent performance on the revenue front while adjusted earnings were lower than

our estimate owing to lower-than-expected operating performance and high

interest cost. The decent performance on the revenue front was owing to cement

revenue surprise. However, lower-than-expected performance of the construction

segment and high input cost pressure led to a decline in the blended EBITDAM.

High interest cost dents profitability: On the top-line front, the company reporteda revenue of`3,315cr for 1QFY2014, registering a growth of 10.2% yoy, which is

slightly higher than our estimate. The real estate and construction segments

posted a growth of 175.2% and 2.9% yoy respectively; however, the cement

segments revenue declined by 1.5% yoy. The blended EBITDA margin declined

by 345bp yoy to 23.7% and was below our expectation of 26.2%. This was mainly

due to a subdued performance in the construction segment. The interest cost

stood at`590cr a jump of 26.8%/7.5% on a yoy/qoq basis and was higher than

our estimate of`560cr. On the bottom-line front, the company reported a PAT of

`335cr, a growth of 140.9% yoy, owing to an exceptional gain of ~`395cr which

accrued on account of sale of equity shares. Adjusting to this gain, the company

has reported a loss of `61cr in 1QFY2014 vs a profit of `138cr in 1QFY2013.

This is mainly due to a lower-than-expected operating performance and high

interest cost.

Outlook and valuation: Going forward, we believe deleveraging the balance sheetthrough monetization of land parcel and stake sale in cement business would help

the company in reducing its huge debt, which continues to remain an overhang on

the stock. Hence closure of such a deal would be positive for the company. Werecommend a Buy rating on the stock with a SOTP target price of `53.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENet sales 12,916 13,415 12,946 14,897% chg (1.8) 3.9 -3.5 15.1

Adj. net profit 1,089 548 272 594% chg 52.7 (49.7) -50.3 118.1

FDEPS (`) 4.9 2.5 1.2 2.7EBITDA margin (%) 27.1 25.2 24.7 25.5

P/E (x) 7.8 16.1 32.4 14.9

RoAE (%) 10.0 4.3 2.0 4.3

RoACE (%) 8.7 7.2 6.0 7.1

P/BV (x) 0.7 0.7 0.7 0.6

EV/Sales (x) 2.2 2.4 2.5 2.3

EV/EBITDA (x) 8.2 9.4 10.2 9.1

Source: Company, Angel Research; Note: CMP as of July 29, 2013

BUYCMP `40

Target Price `53

Investment Period 12 Months

Stock Info

Sector

Net Debt (` cr) 23,863

Bloomberg Code

Shareholding Pattern (%)

Promoters 45.1

MF / Banks / Indian Fls 12.0

FII / NRIs / OCBs 24.3

Indian Public / Others 18.6

Abs. (%) 3m 1yr 3yr

Sensex 1.6 16.4 9.7

JAL (47.0) (43.0) (66.3)

Face Value (`)BSE Sensex

Nifty

Reuters Code

8,832

1.6

107/38

2,348,465

Infrastructure

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

219,593

5,832

JAIA.BO

JPA@IN

Viral Shah022-39357800 Ext: 6842

[email protected]

Jaiprakash AssociatesPerformance Highlights

1QFY2014 Result Update | Infrastructure

July 30, 2013


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JP Associates | 1QFY2014 Result Update

July 30, 2013 2

Exhibit 1:1QFY2014 performance (Standalone)

Y/E March (` cr) 1QFY14 1QFY13 % chg(yoy) 4QFY13 % chg(qoq) FY2013 FY2012 % chg(yoy)Net sales 3,315 3,008 10.2 3,907 (15.2) 13,358 12,853 3.9Total exp. 2,530 2,192 15.4 3,014 (16.0) 10,033 9,413 6.6Op. profit 785 816 (3.8) 894 (12.2) 3,325 3,440 (3.3)OPM (%) 23.7 27.1 (345)bp 22.9 79bp 24.9 26.8 (179)bp

Int. 590 465 26.8 549 7.5 2,011 1,782 12.9

Dep. 194 176 10.2 191 1.9 726 614 18.2

Non op. inc. 37 29 29.9 25 50.2 154 264 (41.9)

Non recurring 395 1 - 4 - 9 6 -

PBT 433 204 112 183 136.4 751 1,314 (42.9)Tax 98 65 51 60 64.8 249 288 (13.4)

Reported PAT 335 139 140.9 124 170.9 501 1,026 (51.2)PAT (%) 10.1 4.6 (383)bp 3.2 693bp 3.8 8.0 (423)bp

Adj. PAT (61) 138 (144.0) 119 (150.9) 492 1,020 (51.8)Adj.PAT (%) (1.8) 4.6 (381)bp 3.1 (488)bp 3.7 7.9 (376)bp

Adj. EPS (`) (0.3) 0.6 (144.0) 0.5 (150.9) 2.2 4.6 (51.8)Source: Company, Angel Research

Exhibit 2:1QFY2014 Actual vs Estimates

(` cr) Actual Estimates Variation (%)Net Sales 3,315 3,289 0.8

EBITDA 785 862 (9.0)

Interest 590 560 5.4

Tax 98 83 18.3

Adjusted PAT (61) 101 (160.1)

Source: Company, Angel Research


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July 30, 2013 3

Exhibit 3:Segmental performance

Y/E March (` cr) 1QFY14 1QFY13 % Chg FY2013 FY2012 % ChgSegment RevenueCement and Cement Products 1,539 1,563 (1.5) 6,046 5,465 10.6Construction 1,251 1,216 2.9 5,314 5,842 (9.0)

Power 13 10 27.4 38 36 7.4

Hotel/Hospitality and Golf Course 55 49 10.9 231 197 17.7

Real Estate 454 165 175.2 1,686 1,417 19.0

Investment 25 20 21.1 121 201 (40.0)

Others 54 0 - 155 1 -

Unallocated 16 22 (29.4) 60 72 (16.4)

Less: Inter-Segmental Performance 54 10 451.1 140 113 23.5

Total Sales Income 3,352 3,037 10.4 13,512 13,118 3.0Segment ResultsCement & Cement Products 172 227 (24.2) 702 653 7.6

Construction 303 360 (15.8) 1,382 1,605 (13.9)

Power 7 5 55.3 18 16 12.2

Hotel/Hospitality and Golf Course 1 1 3.6 21 4 484.6

Real Estate 153 67 130.4 585 665 (11.9)

Investment 24 20 19.7 120 201 (40.6)

Others (2) (1) 61.4 (4) (5) (19.2)

Excep : Profit on Sale of Shares 395 - - - - -

Total PBIT 1,054 678 55.5 2,824 3,138 (10.0)Less: Interest Expense 590 465 26.8 2,011 1,782 12.9

Less: Exceptional Item - - - - - 0.0

Less: Unallocable Expense 32 9 245.0 62 42 45.8

PBT 433 204 112.4 751 1,314 (42.9)PBIT Margin (%) bp chg. bp chg.Cement & Cement Products 11.2 14.5 (334) 11.6 11.9 (33)

Construction 24.2 29.6 (539) 26.0 27.5 (147)

Power 57.9 47.5 1,042 45.9 43.9 199

Hotel/Hospitality and Golf Course 1.1 1.1 (8) 9.0 1.8 722

Real Estate 33.8 40.4 (658) 34.7 46.9 (1,219)

Investment 98.8 100.0 (117) 99.0 100.0 (104)

Others (3.0) (280.6) - (2.4) (351.9) -Unallocated 2,493.9 - - - - -

Capital Employed in SegmentCement & Cement Products 13,770 12,085 13.9 13,770 12,085 13.9

Construction 5,163 4,239 21.8 5,163 4,239 21.8

Power 2,546 2,164 17.7 2,546 2,164 17.7

Hotel/Hospitality and Golf Course 618 624 (0.9) 618 624 (0.9)

Real Estate 3,604 3,504 2.8 3,604 3,504 2.8

Investment 9,056 7,774 16.5 9,056 7,774 16.5

Others 376 181 107.3 376 181 107.3

Unallocated 5,095 4,640 9.8 5,095 4,640 9.8

Total 40,228 35,211 14.2 40,228 35,211 14.2Source: Company, Angel Research


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July 30, 2013 4

Segment-wise performance

Cement division

JALs cement division reported a 1.5% yoy decline in revenue to `1,539cr in1QFY2014. The segments revenue is however higher than our estimate of

`1,463cr, primarily due to a 14.4% qoq growth in cement realisation to

`4,160/ton. Cement volumes came in at 4.5mn tonne (excluding Gujarat [4.8

mtpa] and Andhra Pradesh [5 mtpa] plants) in 1QFY2014, indicating a growth of

2.8%. Going forward, we expect demand growth to pick up in 2HFY2014 on the

back of good monsoon.

Construction division

The construction division continued its poor performance on the revenue front. The

company reported a construction revenue of`1,251cr in 1QFY2014 (against our

estimate of`1,326.7cr), indicating a mere growth of 2.9%. The segments revenueperformance was sluggish owing to slowdown in new order inflows and

completion of key construction projects (Yamuna Expressway, Zirakpur-Parwanoo

highway and Karcham Wangtoo project) during FY2013. The divisional EBIT

margin witnessed a decline of 539bp yoy and came in at 24.2%. Since the past

few quarters, there has been huge volatility in the construction segment in terms of

revenue and EBIT margins.

Real estate division

The real estate division continued its good show on the revenue front. It reported

an increase in revenue of 175.2% yoy to`454cr, which is in-line with our estimate

of `450cr. As per the Management, the real estate segment saw an increase in

revenues owing to revenue booking in projects where threshold level has been

achieved. The EBIT margin of the segment witnessed a dip of 658bp yoy and came

in at 33.8% in 1QFY2014.

Exhibit 4:Decent top-line performance


Exhibit 5:EBITDAM continues to disappoint


2,

969

4,

062

3,

008

3,

005

3,

431

3,

907

3,

315

0.7

2.9 3.1 3.5

15.5

(3.8)

10.2

(5.0)

-

5.0

10.0

15.0

20.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Sales (` cr, LHS) Growth (yoy %, RHS)

867

1,

019

816

814

795

894

785

29.2

25.1

27.1 27.1

23.222.9 23.7

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0

200

400

600

800

1,000

1,200


EBITDA (` cr, LHS) EBITDAM (%, RHS)


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July 30, 2013 5

Operating performance disappoints

The blended EBITDA margin came in at 23.7% for 1QFY2014, declining by 345bp

yoy, and was below our estimate of 26.2%. This was mainly due to subdued

performance in the construction segment. Interest cost stood at `590cr a jump of

26.8%/7.5% on yoy/qoq basis and was higher than our estimate by 5.4%. The

depreciation cost came in at`194cr in 1QFY2014, a jump of 10.2%/1.9% on a

yoy/qoq basis. On the bottom-line front, the company reported a PAT of`335cr, a

growth of 140.9% yoy, owing to an exceptional gain of ~`395cr (through sale of

equity shares). Adjusting to this gain, the company has reported a loss of`61cr in

1QFY2014 vs a profit of`138cr in 1QFY2013. This is mainly due to a lower-than-

expected operating performance and high interest cost.

Exhibit 6:High interest cost dents PAT growth

Source: Company, Angel Research;

310

284

139

128

111

119

(61)

10.4

7.0

4.6 4.3

3.2 3.1

(1.8)

(4.0)

(2.0)

-

2.0

4.0

6.0

8.0

10.0

12.0

(100)

(50)

0

50

100

150

200

250

300

350


PAT (` cr, LHS) PATM (%, RHS)


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July 30, 2013 6

Outlook and valuation

To capture high interest cost from rising debt levels and poor operational

performance of 1QFY2014, we have revised our FY2014 and FY2015 EPS

downward to `1.2 (from an earlier `2.5) and `2.7 (from an earlier `2.9)

respectively. The Management has guided to reduce its consolidated debt by

`6,000cr in FY2014 through monetization of land parcel in JIL and stake sale in its

cement business. Going forward, we believe deleveraging the balance sheet

through monetization of assets would help reduce the huge debt which continues

to remain an overhang on the stock. Hence closure of such a deal would be

positive for the company.

We have valued JALs cement business (standalone), JCCL and construction

business at 7.5x EV/EBITDA, US$130/ton and 5x EV/EBITDA, ie `55.6/share,

`34.7/share and`21.3/share, respectively. We have valued the companys power

and real estate businesses on a market cap basis (giving 20% holding company

discount), which contributes `49.6/share to our target price. The hotel segment

contributes `1.2/share. Treasury shares (`3.5/share) have been valued at the

current market price, whereas net debt is accounted for on a per-share basis in our

valuation at`89.4. We recommend a Buy rating on the stock with a SOTP targetprice of `53.

Exhibit 7:SOTP valuation

Business Segment Methodology ` cr `/share % to Target PriceCement EV/EBIDTA (x) 8x EV/EBITDA 11,816 55.6 105.2Cement EV/ton (x) 130 US$/ton 7,389 34.7 65.8Construction EV/EBIDTA (x) 5x EV/EBITDA 4,524 21.3 40.3Power Mcap of JPVL (@ 20% holding company discount) 1,939 9.1 17.3Real Estate NAV/Mcap Jayppe InfraTech + Jaypee Greens 3,560 16.8 31.7Hotels 8x FY2015E Net Profit 260 1.2 2.3Treasury Stock At CMP 753 3.5 6.7Net Debt Net Debt for Cement, Construction and Real Estate Business (19,000) (89.4) (169.3)Total 11,241 53 100.0


Exhibit 8:Angel EPS forecast vs consensus

Angel Forecast Bloomberg Consensus Variation (%)FY2014E 1.2 2.8 (56.1)

FY2015E 2.7 3.5 (23.5)



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July 30, 2013 7

Exhibit 9:Recommendation summary

Company CMP TP Rating Top-line (` cr) EPS (`) P/E OB/FY13E FY14E FY15E CAGR (%) FY13E FY14E FY15E CAGR (%) FY13E FY14E FY15E Sales(x)

ABL 53 84 Buy 1,853 1,928 2,234 9.8 53.3 59.9 73.9 17.7 1.0 0.9 0.7 2.3CCCL 8 - Neutral 1,931 2,281 2,492 13.6 (3.3) 0.7 2.0 - (2.4) 11.8 4.0 2.2

IRB Infra 80 157 Buy 3,687 3,997 4,312 8.1 16.7 15.7 16.6 (0.3) 4.8 5.1 4.8 2.4

ITNL 131 230 Buy 6,645 7,444 8,041 10.0 26.8 29.8 32.1 9.4 4.9 4.4 4.1 2.2

IVRCL 12 29 Buy 3,759 5,673 5,892 8.4 (3.3) 1.4 1.8 - - 8.6 6.8 4.8

JP Assoc. 40 53 Buy 13,415 12,946 14,897 5.4 2.5 1.2 2.7 4.1 16.1 32.4 14.9 -L&T 841 1,128 Buy 60,873 68,946 78,040 13.2 44.8 49.0 55.2 11.1 18.8 17.2 15.2 2.5

NCC 23 42 Buy 5,725 6,167 6,945 10.1 2.4 2.7 3.6 22.0 9.3 8.5 6.3 3.2

Punj Lloyd 27 - Neutral 11,717 12,954 14,740 12.2 (0.2) 0.5 0.9 - - 53.4 29.1 1.9

Sadbhav 78 139 Buy 1,811 2,462 2,731 22.8 0.9 5.9 6.7 177.2 89.5 13.2 11.6 5.6

Simplex In. 67 131 Buy 5,897 6,308 7,033 9.2 10.8 11.9 18.7 31.9 6.2 5.6 3.6 2.7

Unity Infra 22 41 Buy 2,040 2,146 2,339 7.1 12.5 11.0 11.5 (4.0) 1.7 2.0 1.9 1.6


Exhibit 10:SOTP break up

Company Core Const. Real Estate Road BOT Invst. In Subsidiaries Others Total` % to TP ` % to TP ` % to TP ` % to TP ` % to TP `

ABL 29 35 - - 55 65 - - - - 84

CCCL 16 100 - - - - - - - - 16

IRB Infra 45 29 - - 112 71 - - - - 157

ITNL 80 35 - - 120 52 - - 30 13 230IVRCL 9 31 - - - - 20 69 - - 29

JP Assoc. 21 40 17 32 - - - - 15 28 53L&T 828 73 - - - - 300 27 - - 1,128

NCC 23 55 - - 7 17 - - 12 29 42

Punj Lloyd 64 100 - - - - - - - - 64

Sadbhav 47 33 - - 93 67 - - - - 139

Simplex In. 131 100 - - - - - - - - 131

Unity Infra 35 85 - - 6 15 - - - - 41



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July 30, 2013 8

Company background

JAL, the flagship company of Jaypee Group, was set up in 1958 by Jai Prakash

Gaur, who started as a small-time construction contractor in Kota, Rajasthan. Over

the years, JAL has transformed itself into a large infrastructure conglomerate in

India. The company is present across the following sectors: 1) cement (the third

largest group, ~33mt capacity in FY2012); 2) power (the largest private sector

hydro-electric power utility, ~1,700MW operational capacity); 3) real estate (one

of the largest land banks in NCR, with over 695mn sq ft area; 4) engineering and

construction (E&C; the largest company in the hydro-electric power sector);

5) expressways/highways (Yamuna Expressway is one of the biggest toll projects);

and 6) hospitality.


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July 30, 2013 9

Profit & Loss Statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ENet Sales 10,355 13,151 12,916 13,415 12,946 14,897Other operating incomeTotal operating income 10,355 13,151 12,916 13,415 12,946 14,897% chg 68.4 27.0 (1.8) 3.9 (3.5) 15.1

Total Expenditure 7,465 10,011 9,413 10,033 9,744 11,091Net Raw Materials 4,290 6,330 5,906 5,842 5,635 6,543

Other Mfg costs 1,497 1,500 1,139 1,421 1,551 1,668

Personnel 453 596 661 808 842 968

Other 1,225 1,585 1,707 1,962 1,916 2,111

EBITDA 2,891 3,141 3,502 3,381 3,202 3,806% chg 40.1 8.6 11.5 (3.5) (5.3) 18.8

(% of Net Sales) 27.9 23.9 27.1 25.2 24.7 25.5

Depreciation & Amortisation 456 609 614 726 802 890

EBIT 2,435 2,531 2,888 2,655 2,400 2,915% chg 38.7 4.0 14.1 (8.1) (9.6) 21.5

(% of Net Sales) 23.5 19.2 22.4 19.8 18.5 19.6

Interest & other Charges 1,056 1,458 1,782 2,011 2,173 2,201

Other Income - 225.9 264 154 169 186

(% of PBT) - - - - - -

Share in profit of Associates - - - - - -

Recurring PBT 1,379 1,299 1,371 798 396 900% chg 10.2 (5.8) 5.5 (41.8) (50.3) 127.1

Extraordinary Expense/(Inc.) 719.5 514.0 6.1 9.3 - -

PBT (reported) 2,098 1,814 1,377 807 396 900Tax 390 587 288 249 124 306

(% of PBT) 18.6 32.3 20.9 30.9 31.3 34.0

PAT (reported) 1,708 1,227 1,089 557 272 594Add: Share of earnings of asso. - - - - - -

Less: Minority interest (MI) - - - - - -

Prior period items - - - - - -

PAT after MI (reported) 1,708 1,227 1,089 557 272 594ADJ. PAT 989 713 1,089 548 272 594% chg 10.2 (27.9) 52.7 (49.7) (50.3) 118.1(% of Net Sales) 9.5 5.4 8.4 4.1 2.1 4.0

Basic EPS (` ) 4.7 3.4 5.1 2.5 1.2 2.7Fully Diluted EPS ( ) 4.5 3.2 4.9 2.5 1.2 2.7% chg 10.2 (27.9) 52.7 (49.7) (50.3) 118.1


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July 30, 2013 10

Balance Sheet (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 425 425 425 444 444 444Preference Capital - - - - - -

Reserves& Surplus 8,076 8,972 11,879 12,889 13,018 13,462

Shareholders Funds 8,501 9,397 12,304 13,332 13,462 13,906Minority Interest - - - - - -Total Loans 17,909 21,505 21,039 24,343 25,560 26,838

Deferred Tax Liability 956 1,194 1,244 1,373 1,373 1,373

Total Liabilities 27,366 32,097 34,587 39,048 40,395 42,117APPLICATION OF FUNDSGross Block 12,847 14,796 15,360 17,191 19,570 21,719

Less: Acc. Depreciation 2,228 2,840 3,331 4,034 4,836 5,726

Net Block 10,619 11,957 12,029 13,158 14,734 15,992Capital Work-in-Progress 3,892 5,593 4,702 5,801 5,221 4,699

Deferred Tax Asset 32.8 - - - - -

Investments 5,576 6,484 6,693 8,891 9,091 9,291Current Assets

Cash 3,879 2,463 1,022 1,303 1,284 1,187

Loans & Advances 3,995 4,938 9,341 9,576 9,645 10,651

Other 5,225 6,120 6,956 7,265 7,531 8,142

Current liabilities 5,853 5,458 6,158 6,945 7,111 7,845

Net Current Assets 7,246 8,063 11,162 11,199 11,349 12,135Mis. Exp. not written off - - - - - -

Total Assets 27,366 32,097 34,587 39,048 40,395 42,117


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July 30, 2013 11

Cash Flow Statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EPBT(excl extra ordinary item) 1,065 1,814 1,377 807 396 900

Depreciation 456 611 491 703 802 890Change in Working Capital 2,725 (2,234) (4,539) 244 (169) (883)

Less: Other income - (226) (264) (154) (169) (186)

Direct taxes paid 271 (587) (288) (249) (124) (306)

Cash Flow from Operations (1,474) (622) (3,223) 1,350 736 416(Inc.)/ Dec. in Fixed Assets 3,077 (3,650) 326 (2,929) (1,799) (1,627)

(Inc.)/ Dec. in Investments (214) (908) (209) (2,198) (200) (200)

Other income - 226 264 154 169 186

Cash Flow from Investing 2,863 (4,332) 382 (4,974) (1,830) (1,641)Issue of Equity 87 0 - 19 - -

Inc./(Dec.) in loans 4,803 3,596 (466) 3,305 1,217 1,278

Dividend Paid (Incl. Tax) 176 (166) (124) (129) (135) (142)

Others (594) 106 1,991 710 (8) (8)

Cash Flow from Financing 5,307 3,537 1,401 3,904 1,074 1,128Inc./(Dec.) in Cash 971 (1,417) (1,440) 280 (19) (97)

Opening Cash balances 2,909 3,879 2,463 1,022 1,303 1,284Closing Cash balances 3,879 2,463 1,022 1,303 1,284 1,187


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July 30, 2013 12

Key Ratios

Y/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2014EValuation Ratio (x)P/E (on FDEPS) 8.6 11.9 7.8 16.1 32.4 14.9P/CEPS 3.9 4.6 5.0 6.9 8.2 5.9

P/BV 1.0 0.9 0.7 0.7 0.7 0.6

Dividend yield (%) 2.7 2.0 1.5 1.5 1.5 1.6

EV/Sales 2.2 2.1 2.2 2.4 2.6 2.3

EV/EBITDA 7.9 8.9 8.2 9.4 10.3 9.1

EV / Total Assets 0.8 0.9 0.8 0.8 0.8 0.8

Per Share Data (`)EPS (Basic) 4.7 3.4 5.1 2.5 1.2 2.7

EPS (fully diluted) 4.7 3.4 5.1 2.6 1.3 2.8

Cash EPS 10.2 8.6 8.0 5.8 4.8 6.7

DPS 1.1 0.8 0.6 0.6 0.6 0.6

Book Value 40.0 44.2 57.9 60.1 60.7 62.7

Dupont AnalysisEBIT margin 23.5 19.2 22.4 19.8 18.5 19.6

Tax retention ratio 81.4 67.7 79.1 69.1 68.7 66.0

Asset turnover (x) 0.5 0.5 0.4 0.4 0.3 0.4

ROIC (Post-tax) 9.6 6.4 7.2 5.1 4.3 4.8

Cost of Debt (Post Tax) 5.5 5.0 6.6 6.1 6.0 5.5

Leverage (x) 1.6 1.8 1.8 1.7 1.8 1.8

Operating ROE 16.2 9.1 8.3 3.5 1.3 3.5

Returns (%)ROCE (Pre-tax) 10.2 8.5 8.7 7.2 6.0 7.1

Angel ROIC (Pre-tax) 15.2 11.6 10.9 8.7 7.3 8.3

ROE 13.0 8.0 10.0 4.3 2.0 4.3

Turnover ratios (x)Asset Turnover (Gross Block) 1.0 1.0 0.9 0.8 0.7 0.7

Inventory / Sales (days) 49 45 47 50 57 53

Receivables (days) 58 71 97 113 122 111

Payables (days) 239 191 217 227 249 233

W.cap cycle (ex-cash) (days) 81 124 222 273 281 257

Solvency ratios (x)Net debt to equity 1.7 2.0 1.6 1.7 1.8 1.8

Net debt to EBITDA 4.9 6.1 5.7 6.8 7.6 6.7

Interest Coverage 2.3 1.7 1.6 1.3 1.1 1.3


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J l 30 2013 13

Disclosure of Interest Statement JP Associates

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Pvt. Ltd., its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Pvt. Ltd. or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Pvt. Ltd. has not independently verified all the information contained within this document. Accordingly, we cannottestify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.While Angel Broking Pvt. Ltd. endeavours to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Pvt. Ltd. and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or

other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or inthe past.

Neither Angel Broking Pvt. Ltd., nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in

connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Ltd. and its affiliates may haveinvestment positions in the stocks recommended in this report.

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JP Associates, 1Q FY 2014

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