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Pankaj GauravPGDM 12-14
July 6, 2013
Summer Internship Program IMT Hyderabad
Peer Comparison Analysis
Portfolio of companies
Company name Credit Rating IndustryAmara Raja Batteries Limited CRISIL AA / CRISIL A1+ Auto AncillariesAndhra Petrochemicals Ltd ICRA A-/ ICRA A2+ ChemicalsDivi's Laboratories Ltd CARE AA+ /CARE A1+ Pharmaceuticals
Neha International Not rated yetFloriculture& Agri business
Suryalata Spinning Mills Ltd ICRA]BB+/ICRA A4+
Textile & Textile Products
Visaka Industries Limited CARE A+/CARE A1+ Cement product
Ramky InfraCRISIL A- Negative/ CRISIL A2+
Construction & Infrastructure
Anjani Portland Cement CARE BB/CARE A4 Cement
A dossier per company is to be prepared.
Methodology
FIRMShareholding Pattern
Board of Directors/
Management Team
Business Analysis
Capacity Utilisation
Current Order Book
Cost structure
Industry Analysis
Financial Summary
How to analyze a company
• Price/Earnings Ratios• Earnings Expectations• Capacity utilisation• EBITDA margins• EBDITA interest coverage• Net debt/EBITDA
• Analyze financial statement
• Analyze financial metrics• Identify the trends in the
business
• Lines of Business• Business Segments• Major Products / Services• Geographic presence
• Legal Status• Bankers• Management team • Shareholding Pattern
Basic Informatio
nBusiness Overview
Comparative Analysis
Fundamental Analysis
Key Metrics Definitions used for Peer Com.
Market Capitalization: The total market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures..
P/E (TTM) : A valuation ratio of a company's current share price compared to its per-share earnings. The timeframe of the past 12 months used for reporting financial figures.
Calculated as : P/E=(Market Value per Share/ Earnings per Share (EPS)
Enterprise Multiple: A ratio used to determine the value of a company. The enterprise multiple looks at a firm as a potential acquirer would, because it takes debt into account - an item which other multiples like the P/E ratio do not include. Enterprise multiple is calculated as:Enterprise Multiple= Enterprise value/EBITDA
Key Metrics Definitions(cont.)…
Return On Equity - ROE: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.Calculated as : ROE = Net Income/ Shareholder's Equity
Debt/Equity Ratio: A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.Calculated as : D/E ratio = Total Liabilities/ Shareholder’s Equity
Return on Capital Employed (ROCE): A ratio that indicates the efficiency and profitability of a company's capital investments.
Calculated as:
ROCE= (EBIT/Total Asset – Current Liability)
Project Portfolio
Anjani Portland Cement
Manufacture of Cement
Gas based power
generation
Security Printing
Product Segment
Particulars FY09 FY10 FY11 FY12 FY13
Revenue 1520.976
1527.145 2096.67 3386.547 3260.958
Revenue Growth 0.41% 37.29% 61.52% -3.71%
Operating EBITDA 475.976 315.518 452.052 764.765 585.704
Operating EBITDA MARGIN
31.29% 20.66% 21.56% 22.58% 17.96%
Interest cover 5.6 3.81 1.054 1.64 -
Net profit 267.925 215.505 15.411 234.111 428.414
Adjusted Debt/EBITDA
1.256 6.783 5.910 3.726 3.946
Debt/ Net worth 1.002 3.166 3.995 3.486 2.717Microsoft Office Excel Worksheet
Note: All amounts are in Millions
Anjani Cement is a small enterprise with Market cap of 308.9 Millions as compared to its Sagar Cement, Deccan Cements &NCL Industries.
Anjani Portland Cement(cont.)
FY09 FY10 FY11 FY12 FY130
1
2
3
4
5
6
7
8
Interest cover
Adjusted Debt/EBITDA
Net adjusted debt/EBITDA
Debt/ Net worth
Return on cap employed (EBIT/cap employed)
FY09 FY10 FY11 FY11 FY11 FY12 FY130
500
1000
1500
2000
2500
3000
570.354999999998671.085661.136
807.112850.437999999998
571.950999999998
2125.05
2641.2462814.149
2311.428
Total net worthTotal DEBT
Peer Comparison: Cement Manufacturing
Company Market CapP/E (TTM)EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)Madras Cement 5,069.40 12.89 8.21 18.3 14.6 1.22Chettinad Cement 2,710.48 19.7 4.68 18.7 17 0.99India Cements 1,724.82 9.77 6.66 8.2 10.5 0.72K C P 358.99 10.35 4.76 18.1 17.3 0.99Sagar Cements 327.71 37.32 3.92 18.4 20.5 0.93Andhra Cements 184.04 0 17.01 5 6.5 1.61Deccan Cements 133.77 18.3 2.74 24.3 19.2 1.45NCL Inds. 89.1 0 3.07 25.5 21.4 1.6Anjani Portland 29.42 9.52 4.26 22.3 20.31 3.38Raasi Cement 22.29 0 0 0 0 0Bheema Cements 19.94 0 23.87 0 0 1.17
Peer Comparison : Cement Manufacturing(cont.)
(x) (x) (%) (%)P/E (TTM) EV/EBIDTA ROE ROCE
0
5
10
15
20
25
30
35
40
Madras CementChettinad CementIndia CementsK C PSagar CementsAndhra CementsDeccan CementsNCL Inds.Anjani PortlandRaasi CementBheema Cements
D/E1.
220.
720.
931.
453.
381.
170
0.5
1
1.5
2
2.5
3
3.5
4
Madras Cement
Chettinad Cement
India Cements
K C P
Sagar Cements
Andhra Cements
Deccan Cements
NCL Inds.
Anjani Portland
Raasi Cement
Bheema Cements
Key Business Risks & Issues
Deterioration in financial performance
Stretched liquidity position
Weak capital
structure
High exposure to group
companies
NEHA INTERNATIONAL LTD.
Cut Flowers
Machinery
Trading Sales
Product Segment
Particulars FY10 FY11 FY12
Revenue 559.725 881.795 784.610
Revenue Growth 57.54% -11.02
Operating EBITDA 169.936 234.974 115.696
Operating EBITDA MARGIN
30.36% 26.65% 14.75%
Interest cover 4.89 7.5 2.88
Net profit 122.96 178.125 63.36
Adjusted Debt/EBITDA
1.01 0.898 2.507
Debt/ Net worth 0.298 0.125 0.129
Microsoft Office Excel Worksheet
Note: All amounts are in Millions
A premium grower of cut roses, NEHA brings in 19 years of rich experience in the field of floriculture.
Peer Comparison: Floriculture& Agri business
CompanyMarket Cap P/E (TTM)
EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)JVL Agro Indus 168.57 2.79 0.74 20.1 20.7 0.6Genera Agri 68.40 6.39 0 42 39.3 0.07Neha Intl. 20.23 23 31.32 0.5 4.21 0.07Pion. Agro Extr. 7.53 0 5.6 9.8 13.5 1.53Elegant Floricul 8.56 142.67 34.26 0.1 0.3 0.03Gemini Agritech 4.87 0 51.5 0 0 1.56Naisargik Agri 3.97 325 0 0.4 0.5 0German Gardens
3.77 6.65 0 12.6 7.7 2.24
Peer Comparison : Floriculture& Agri business(cont.)
(x) (x) (%)P/E (TTM) EV/
EBIDTAROE
0
50
100
150
200
250
300
350
JVL Agro IndusGenera AgriNeha Intl.Pion. Agro Extr.Elegant FloriculGemini AgritechNaisargik AgriGerman Gardens
ROCE(%
)20
.739
.34.
2113
.5 0.3 0
0.5
7.7
0
5
10
15
20
25
30
35
40
45
JVL Agro IndusGenera AgriNeha Intl.Pion. Agro Extr.Elegant FloriculGemini AgritechNaisargik AgriGerman Gardens
D/E 0.60.0
70.0
3 00
0.5
1
1.5
2
2.5
JVL Agro IndusGenera AgriNeha Intl.Pion. Agro Extr.Elegant FloriculGemini AgritechNaisargik AgriGerman Gardens
Key Business Risks & Issues
High import tariff vis-a-vis
African countries
Low availability of dedicated perishable
carriers
Inadequate cold chain
management
Availability of basic inputs, including quality seeds and planting materials
Divis Lab
Generic API’s
Intermediates
Peptide Building Blocks
Product Segment
Microsoft Office Excel Worksheet
Particulars FY09 FY10 FY11 FY12
Revenue 12024.76 9759.46 13436.634 19200.806
Revenue Growth -18.84% 37.68% 42.90%
Operating EBITDA 5033.225 4395.916 5244.089 7493.317
Operating EBITDA MARGIN
41.86% 45.04% 39.03% 39.03%
Interest cover 62.884 139.669 310.591 183.599
Net profit 4166.418 3403.365 4292.694 5332.641
Net Adjusted Debt/EBITDA
3.235 4.440 1.124 1.052
Debt/ Net worth 1.140 1.145 0.318 0.362
Note: All amounts are in Millions
Divis Laboratories focused on developing new processes for the production of Active Pharma Ingredients (APIs) & Intermediates
Divis Lab (cont.)
FY09 FY10 FY11 FY12
interest cover
62.8843849233741
139.636900050371
310.591889218594
183.599620645437
Net ad-justed debt/EBITDA
3.23586010957188
4.44045928084159
1.12481519669098
1.05200086957485
debt/ net worth
1.14038772865457
1.45960137116124
0.318694891498453
0.362246794230377
25
75
125
175
225
275
325
FY09 FY10 FY11 FY12
14143.55113184.445
17961.725
21311.965
16129.132
19244.034
5724.317720.191
Total net worth Total DEBT
Peer Comparison: Pharmaceutical industry
Company Market Cap P/E (TTM)EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)Lupin 38,090.09 30.22 21.23 23.4 22.7 0.3Divi's Lab. 12,796.44 20.93 13.41 27.3 34.1 0.02Jubilant Life 1,970.54 25.04 21.18 3.1 6.4 1.43Hikal 695.99 27.28 5.65 22.4 18.2 1.53Elder Pharma 690.45 7.5 6.59 12.9 13 1.25Shilpa Medicare 631.98 13.73 9.34 16.3 18 0.19Vinati Organics 491.53 7.16 5.63 33.2 31.3 0.75Dishman Pharma. 443.04 7.01 5.44 6.8 10.2 0.8Shasun Pharma. 352.05 14.43 7.48 14 8.9 1.05Orchid Chemicals 343.8 0 7.67 9.7 8.3 1.75Marksans Pharma 333.28 8.4 0 0 0 0Nectar Lifesci. 320.75 3.74 6.25 9.7 11.2 1.22Suven Life Scie. 277.98 9.02 10.21 11.3 9.1 0.64Sequent Scien. 273.82 0 7.62 -3.9 5.9 1.58Granules India 262.25 8.69 4.12 11.7 15.2 0.57
Peer Comparison: Pharmaceutical Industry(cont.)
(x) (x) (%) (%)P/E (TTM) EV/EBIDTA ROE ROCE
-10
-5
0
5
10
15
20
25
30
35
40
LupinDivi's Lab.Jubilant LifeHikalElder PharmaShilpa MedicareVinati OrganicsDishman Pharma.Shasun Pharma.Orchid ChemicalsMarksans PharmaNectar Lifesci.Suven Life Scie.Sequent Scien.Granules India
D/E 0.31.4
31.2
50.7
51.0
5 00.6
40.5
7
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
LupinDivi's Lab.Jubilant LifeHikalElder PharmaShilpa MedicareVinati OrganicsDishman Pharma.Shasun Pharma.Orchid ChemicalsMarksans PharmaNectar Lifesci.Suven Life Scie.Sequent Scien.Granules India
Key Business Risks & Issues
Product concentrat
ion risk
Moderate customer
concentration
Forex risk related to
the exports
Long working
capital cycle
Ramky Infrastructure Limited
Construction business
Developer business
Others
Product Segment
Particulars FY10 FY11 FY12 FY13
Revenue 21102 32344.6 39708.7 37735.532
Revenue Growth 53.28% 22.77% --4.97%
Operating EBITDA 3110.79 -2493.99 -4169.372 5534.385
Operating EBITDA MARGIN
14.74% -7.71% -10.5% 14.67%
Interest cover 2.760 -1.945 -1.929 1.6777
Net profit 1273.6 2061.3 2440.7 1512.51
Adjusted Debt/EBITDA
6.2744 -10.239 -8.85 7.515
Debt/ Net worth 1.82 1.221 1.697 1.671
Note: All amounts are in Millions
Microsoft Office Excel Worksheet
Ramky Infra principally operates in two business segments: construction (carried out by Ramky Infra itself) and developer business (implemented through SPVs).
Peer Comparison: Infrastructure & Construction & Real Estate
Company Market CapP/E (TTM) EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)DLF 31,796.13 63.35 16.41 6 8.2 1.3JP Associates 11,627.82 23.19 9.94 9.6 9.4 2Unitech 5,507.31 29.65 14.93 3.1 4.8 0.43Prestige Estates 5,456.50 19.76 14.86 6.2 7.9 0.52Godrej Propert. 4,107.79 33.49 31.59 5.9 7.2 0.88Phoenix Mills 3,566.93 26.65 17.89 6.5 8.5 0.1Jaypee Infratec. 3,513.99 5.06 8.15 24.5 13.8 1.28Mahindra Life. 1,722.41 17.67 13.02 8.4 9.8 0.25H D I L 1,608.96 2.83 7.08 3.9 7.2 0.4Punj Lloyd 1,074.34 54.83 7.28 1.6 8.4 1.06IVRCL Assets 735.98 0 50.79 -2 1.3 0.27IL&FS Engg. 285.98 0 10.1 -28.1 2.3 2.22Ramky Infra 274.27 4.58 5.86 15.5 18.2 0.88Gammon India 264.13 0 5 4.5 11.6 1.25
Peer Comparison: Infrastructure & Construction & Real State(cont.)
(x) (x) (%) (%)P/E (TTM) EV/EBIDTA ROE ROCE
-40
-20
0
20
40
60
80
DLFJP AssociatesUnitechPrestige EstatesGodrej Propert.Phoenix MillsJaypee Infratec.Mahindra Life.H D I LPunj LloydIVRCL AssetsIL&FS Engg.Ramky InfraGammon India
D/E 1.3
0.43
0.88
1.28 0.
40.
270.
880
0.5
1
1.5
2
2.5
DLFJP AssociatesUnitechPrestige EstatesGodrej Propert.Phoenix MillsJaypee Infratec.Mahindra Life.H D I LPunj LloydIVRCL AssetsIL&FS Engg.Ramky InfraGammon India
Key Business Risks & Issues
Deterioration in the Ramky Infra group’s
financial risk profile, particularly
its liquidity
Higher reliance on short-term
debt
Stretch in working
capital cycle
Cost overrun in execution of
its BOT projects
Amara Raja Batteries Limited
VRLA batteries
Four-wheeler batteries:
Two-wheeler batteries
Product Segment
Microsoft Office Excel Worksheet
Particulars FY09 FY10 FY11 FY12 FY13
Revenue 13212.35246 14814.99016 17688.29 23809.298 29810.775
Revenue growth 12.13% 19.39% 34.60% 25.20%
Operating EBITDA 1927.831427 2699.51243 2651.52 3560.489 4711.956
Operating EBITDA MARGIN 0.145911293 0.182214932 0.149902563 0.1495419560.15806217
7
Interest cover 8.676343026 33.52347354 73.06736429 76.26900714
Net profit 804.786707 1670.333868 1480.96 2150.626 2867.047
Adjusted Debt 3749.279934 1933.51446 2076.48 1341.65 1359.513
Net worth 4055.864344 5436.42719 6459.27 8234.69 10598.134
Adjusted Debt/EBITDA 1.944817312 0.716245807 0.783128168 0.3768162180.28852412
9
Net adjusted debt/EBITDA 1.580235743 0.484843862 0.612969165 -0.266887498-
0.58327837
Debt/ Net worth 0.704833715 0.167737823 0.154748137 0.1038727630.08239403
3
Return on cap employed (EBIT/cap employed) 0.222 0.345 0.299 0.329 0.339
Note: All amounts are in Millions
Amara Raja Batteries Limited (ARBL), the largest manufacturer of Standby Valve Regulated Lead Acid (VRLA) batteries in India
Peer Comparison: Auto Ancillaries Industry
CompanyMarket Cap P/E (TTM) EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)
Bosch 27,192.56 30.83 16.58 18.6 23.9 0.05
Motherson Sumi 12,304.75 26.2 13.29 27.8 24.4 0.76
Exide Inds. 10,336.00 19.77 12.66 16.3 23.1 0
Amara Raja Batt. 4,708.96 16.08 6.38 29.3 32.9 0.13
WABCO India 3,109.53 23.78 12.28 33.5 45.9 0
Amtek India 1,874.85 13.99 9.28 8 9.5 1.22
Amtek Auto 1,506.15 5.62 7.47 6.7 7.6 0.84
Bosch Chassis 1,238.98 45.81 0 7.2 9.8 0.09
Federal-Mogul Go 1,129.29 0 17.24 -2.3 3.9 0.43
Wheels India 829.77 26.03 5.47 15 21.1 1.57
Peer Comparison: Auto Ancillaries Industry(cont.)
(x) (x) (%) (%)P/E (TTM) EV/EBIDTA ROE ROCE
-10
0
10
20
30
40
50
BoschMotherson SumiExide Inds.Amara Raja Batt.WABCO IndiaAmtek IndiaAmtek AutoBosch ChassisFederal-Mogul GoWheels India
D/E0.
05 0 00.
840.
430
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
BoschMotherson SumiExide Inds.Amara Raja Batt.WABCO IndiaAmtek IndiaAmtek AutoBosch ChassisFederal-Mogul GoWheels India
Key Business Risks & Issues
Multi-tiered and highly fragmented
domestic auto supplier segment
Long working
capital cycle
Capex requirement
for innovations in technology
Andhra Petrochemicals Ltd
Particulars FY10 FY11 FY12 FY13
Revenue 1437.587 4594.894 6056.059 5627.6
Revenue growth % 219.6% 31.8% 7.07%
Operating EBITDA 165.381 515.6907 245.7531 1034.648
Operating EBITDA MARGIN 0.11504069 0.112231251 0.040579707 0.183852442
Interest cover 3.342473875 1.698188264 0.160681727 10.4339309
Net profit -53.805 356.352 300.147 31.187
Adjusted Debt 1567.291 1492.295 778.698 633.828
Net worth 1618.725 1876.321 2127.09 2158.277
Adjusted Debt/EBITDA 9.476850424 2.893779159 3.168619236 0.612602547
Net adjusted debt/EBITDA 8.872349303 1.785110726 3.048087695 0.484546435
Debt/ Net worth 0.886641647 0.777770968 0.29947581 0.293673148
Manufacture of Oxo-
Alcohols
Product Segment
Microsoft Office Excel Worksheet
Note: All amounts are in Millions
APL was established with a capacity to produce 30,000 MTPA of Oxo Alcohols at Visakhapatnam, Andhra Pradesh, India.
Peer Comparison: Chemical Industry
Company Market CapP/E (TTM)
EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)Castrol India 16,169.64 36.05 20.39 71.4 104.3 0Pidilite Inds. 13,783.81 30.21 19.58 29.7 36.6 0.1Godrej Inds. 10,592.32 277.19 28.98 10 10.5 0.46Guj Fluorochem 3,074.45 7.72 7.96 32.8 38.4 0.37BASF India 2,367.75 19.65 11.06 10 12.9 0.16Linde India 2,251.39 104.35 15.35 4.1 4 0.75Gulf Oil Corpn. 784.77 15.74 7.7 10.5 9.1 0.57Balaji Amines 108.54 3.49 3.71 27.5 24.3 1.33Oriental Carbon 106.14 3.88 3.6 23 23.7 0.63Sah Petroleum 104.28 0 3.75 0.2 23.3 0Panama Petrochem 102.36 8.62 0.37 16.9 24.8 0.05Andhra Petrochem 97.29 15.68 3.24 15 18.7 0.52
Peer Comparison: Chemical Industry (cont. )
(x) (%) (%)EV/EBIDTA ROE ROCE
0
20
40
60
80
100
120 Castrol India
Pidilite Inds.
Godrej Inds.
Guj Fluorochem
BASF India
Linde India
Gulf Oil Corpn.
Balaji Amines
Oriental Carbon
Sah Petroleums
Panama Petrochem
Andhra PetrochemP/
E (T
TM)
36.0
5
277.
19
19.6
5
15.7
43.
888.
620
50
100
150
200
250
300
Castrol India
Pidilite Inds.
Godrej Inds.
Guj Fluorochem
BASF India
Linde India
Gulf Oil Corpn.
Balaji Amines
Oriental Carbon
Sah Petroleums
Panama Petrochem
Andhra Petrochem
D/E (x) 0 0.1 0.46 0.37 0.16 0.75 0.57 1.33 0.63 0 0.05 0.520
0.2
0.4
0.6
0.8
1
1.2
1.4Castrol India
Pidilite Inds.
Godrej Inds.
Guj Fluorochem
BASF India
Linde India
Gulf Oil Corpn.
Balaji Amines
Oriental Carbon
Sah Petroleums
Panama Petrochem
Andhra Petrochem
Key Business Risks & Issues
Weakening Profit due to intermittent
high feedstock prices and weak global demand
High power costs in the near term on account of lower
availability of power from the grid
Lack of integration
benefits
Import duty differentials and Rupee-US Dollar
parity levels
Visaka Industries Limited
Particulars FY09 FY10 FY11 FY12 FY13
Revenue 5853.8 6125.97 6609.76 7551.65 9181.59
Revenue growth 46.49% 7.89% 14.24% 21.58%
Operating EBITDA 1285.262 394.197 859.214 742.958 1092.218
Operating EBITDA MARGIN 0.219560286 0.06434850 0.12999170 0.09838353 0.118957392
Interest cover 6.574881043 1.92429538 7.11934459 3.99857425 5.972332147
Net profit 359.38 572.11 450.74 343.41 506.878
Balance Sheet Debt (1) 1687.503 1620.349 1888.5 1462.77 2920.194
Adjusted Debt 1696.021 1888.897 2159.571 1733.967 3215.892
Net worth 1877.945 2357.282 2613.512 2864.76 3260.466
Adjusted Debt/EBITDA 1.319591647 4.79175894 2.51342622 2.33386947 2.944368249
Net adjusted debt 1240.431 1280.177 1621.031 1195.167 2880.017
Net adjusted debt/EBITDA 0.965119174 3.24755642 1.88664407 1.60866024 2.636851801
Debt/ Net worth 0.898590214 0.68738021 0.72259090 0.51060821 0.895637004
Building Products
Synthetic Yarn
Product Segment
Microsoft Office Excel Worksheet
Note: All amounts are in Millions
Visaka Industries was established in 1981 to manufacture corrugated cement fiber sheets.
Peer Comparison: Cement Products
CompanyMarket Cap P/E (TTM)
EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)
Ramco Inds. 382.35 7.09 4.63 15.4 14.9 0.59Hil Ltd 263.26 4.34 2.94 19.2 23 0.3Everest Inds. 256.18 4.88 4.02 19.5 20.9 0.47Visaka Inds. 128.47 2.53 3.65 16.6 16.5 0.71Sahyadri Inds. 36.09 1.85 4.05 10.1 13.3 1.64Siporex India 12.18 4.91 0 21.9 18.8 0.95Vardhman Concr. 8.57 0 66.91 0 0 0Sanghvi Asbestos 4.88 80 0 -1.7 3 0.46U.P.Asbestos 3.5 0.93 0 8.7 11.5 1.86Roofit Inds. 2.88 0.31 5.27 33.6 21.4 1.92
Peer Comparison: Cement Product(cont.)
(x) (%) (%)EV/EBIDTA ROE ROCE
-10
0
10
20
30
40
50
60
70
80
Ramco Inds.
Hil Ltd
Everest Inds.
Visaka Inds.
Sahyadri Inds.
Siporex India
Vardhman Concr.
Sanghvi Asbestos
U.P.Asbestos
Roofit Inds.
P/E
(TTM
)(x
)7.
094.
344.
882.
531.
854.
91 0 800.
930.
310
10
20
30
40
50
60
70
80
90
Ramco Inds.
Hil Ltd
Everest Inds.
Visaka Inds.
Sahyadri Inds.
Siporex India
Vardhman Concr.
Sanghvi Asbestos
U.P.Asbestos
Roofit Inds.
D/E (x)0.
59 0.30.
470.
711.
640.
95 00.
461.
861.
920
0.5
1
1.5
2
2.5
Ramco Inds.
Hil Ltd
Everest Inds.
Visaka Inds.
Sahyadri Inds.
Siporex India
Vardhman Concr.
Sanghvi Asbestos
U.P.Asbestos
Roofit Inds.
Key Business Risks & Issues
Assured long-term supply of
raw materials at reasonable prices
Possible impact of any adverse
regulations/restrictions with respect to the
use of asbestos
Suryalata Spinning Mills Ltd
Textiles- spinning
Synthetic/Blended
Product Segment
Particulars FY10 FY11 FY12
Total Income 1731.7 2599.0 2538.8
Net profit 57.2 197.9 42.3
Operating Profit Margin(%)
12.08 16.9 3.64
Return On Capital Employed(%)
13.72 27.66 10.77
Interest Cover 2.94 5.70 1.95
Debt Equity Ratio 5.55 2.83 1.94
Number of Days In Working Capital
47.02 54.58 36.27
Note: All amounts are in Millions
Suryalata Spinning Mills Limited is one of the largest producers of Yarn.
Peer Comparison: Textiles- spinning
CompanyMarket Cap
P/E (TTM)
EV/EBIDTA ROE ROCE D/E
(Rs. in Cr.) (x) (x) (%) (%) (x)
RSWM Ltd 298.52 4.4 9.07 -7.3 4.7 4.07Sangam India 131.27 2.54 5.6 8.9 10.3 2.93Winsome Textile 88.6 4.6 9.95 -9.6 6.1 2.43Banswara Syntex 56.05 4.65 5.72 8.9 11.5 3.74Jindal Cotex Ltd 41.72 9.46 29.78 -5.7 0.7 0.55Deepak Spinners 18.03 1.39 2.94 14.1 15.8 1.1Suryalata Spg. 17.98 1.62 5.34 9.4 10 1.88Samrat Spinners 15 0 0 16.6 12.3 1.37East Ind.Syntex 13.32 0 0 6.1 -14.3 0Rel. Chemotex 11.3 1.79 5.51 7.5 14.3 1.62
Peer Comparison: Textiles- spinning(cont.)
(x) (x) (%) (%) (x)P/E (TTM) EV/EBIDTA ROE ROCE D/E
-20
-10
0
10
20
30
40
RSWM LtdSangam IndiaWinsome TextileBanswara SyntexJindal Cotex LtdDeepak SpinnersSuryalata Spg.Samrat SpinnersEast Ind.SyntexRel. Chemotex
Key Business Risks & Issues
Subdued demand scenario
Timely infusion of additional equity
for the debt funded capex
Rising interest
rates
Operating profitability impacted by
political scenario
Limitations
• Due to
unwillingness to share annual reports by Pvt. Limited companies, company analysis can be made for public listed companies whose annual reports are available on its website.
• No information on
term loan repayment schedule is made available by firms, which makes a bit difficult to understand a firm’s credit profile.
• For doing business
analysis, capacity utilisation information is not available in annual reports/websites, due to which % utilisation and average realisation per unit can’t be determined.
Key Learnings
•Understanding of the credit profile of a company based on its financial performance, cost structure, financial structure and investments made in past 5 years
•Understanding of key credit rating issues form rationale based on past ratings given by other credit rating agencies in India
•Understanding of the nature of industry in Andhra Pradesh and building a perspective on respective industry outlook
•Identification of key risks exist in respective industry based on industry outlook
•Understanding of the fundamentals of credit rating methodology with respect to corporate sector of India
http://www.indiainfoline.com
http://www.moneycontrol.com/
http://indiaratings.co.in/
http://crisil.com/
http://www.icra.in/
http://www.careratings.com/
http://floriculturetoday.in/indian-floriculture-the-way-forward.html
http://www.eximbankindia.com/op/OP%20112%20Floriculture%20%5BFull%20Report%5D.pdf
References
Questions & Discussion