cmp 153 fy19e pe 9 -...
TRANSCRIPT
Kirloskar Brothers Ltd BUY
- 1 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
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Target Price ` 317 CMP ` 153 FY19E PE 9.4X
Index Details Kirloskar Brothers Ltd (KBL) faced a rough patch in 2016. The sharp
sell off in crude oil prices disrupted the business model of its most
profitable operations (SPP Pumps Ltd, UK). Further the prolonged
drought and challenges of working with Indian Government bodies
sharply impacted its domestic operations. For FY16, The company
reported a net loss of Rs 32.2 crore, which came as a wakeup call for
the management. With a view to stem losses and turnaround its
business operations, the company has undertaken a massive
restructuring exercise across all verticals. This in our opinion is a
favourable move and should restore KBL back to profitability. In
addition the Government’s thrust on agriculture and infrastructure
augurs well for growth, and KBL being the largest pump player is
expected to be the biggest beneficiary.
We expect consolidated sales to grow at a CAGR of 6.6% over FY17-
19 from Rs 2,594 cr in FY16 to Rs 3,139 cr by FY19 on the back of
healthy growth in the product business (expected CAGR growth of
8.6% to Rs 2,770 cr by FY19). While EBITDA is expected to grow at a
CAGR of 57.9% from Rs 65.3 cr in FY16 to Rs 257 cr by FY19,
earnings are expected to grow at a faster clip of 263.1% CAGR to Rs
139.7 cr over the same period.
We Initiate coverage on KBL Brothers as a BUY with the price
objective of Rs 317- representing a potential upside of 107% from
the CMP of Rs 153. At the CMP of Rs 153 the stock is trading at
12.7X and 9.0X its estimated earnings for FY18 and FY19. We have
assigned a PE multiple of 18X (average PE multiple of 18X) on FY19
EPS of Rs 17.6 to arrive at the target price
We are optimistic about the company’s prospects given that:
1. The share of the unorganized sector in the pump market has fallen from 60% in FY10 to 44% in FY15. We expect the share to further fall to 35% by FY18. This shift is expected to drive revenue growth for the products business of KBL.
Sensex 28,634
Nifty 8,808
Industry Industrial Machinery
Scrip Details
MktCap (` cr) 1,217.7
BVPS (`) 121.8
O/s Shares (Cr) 7.94
AvVol 76,167
52 Week H/L 219/113
Div Yield (%) 0.3
FVPS (`) 2.0
Shareholding Pattern
Shareholders %
Promoters 65.4
Public 34.6
Total 100.0
KBL vs. Sensex
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KBL Sensex
Key Financials (` in Cr)
Y/E Mar Net
Sales EBITDA PAT
EPS
(`)
EPS
Growth (%)
RONW
(%)
ROCE
(%)
P/E
(x)
EV/EBITDA
(x)
2016 2,594.4 65.3 (33.2) -4.2 -180.9 -3.4 1.4 NA 24.6 2017E 2,756.5 125.4 35.8 4.5 207.6 3.6 6.5 36.6 12.6 2018E 2,914.0 204.0 98.9 12.5 176.7 9.2 12.5 13.2 7.3 2019E 3,139.2 256.9 139.7 17.6 41.2 11.7 16.3 9.4 5.4
- 2 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
2. In the medium term, monsoon 2016 being at par with Long Period
Average (LPA) augurs well for the standard pumps segment. With rainfall projected at 94-104% of the LPA, we expect renewed vigor in enquiries for pumps
3. The Government’s focus on creating 100 smart cities and its
thrust on affordable housing for all (11 crore dwelling units) is a Rs 13.3 lac cr opportunity. KBL being the market leader is expected to be the biggest beneficiary.
4. KBL has undertaken a restructuring exercise across all business verticals -
The company is diversifying its UK operations from predominately Offshore Oil and Gas to downstream and desalination projects which are much more stable and carry a far lower risk. This is expected to drive the order book going forth.
Non performance of the projects business has prompted KBL to limit its exposure to this segment. Instead, it has decided to refocus on its stronghold i.e the products segment. This should restore profitability in the future.
To complete the range of product offerings of Kirloskar Ebara, KBL has acquired Rodelta, whose products are a strategic fit.
KBL has initiated talks with state Government bodies to revive stalled projects. This should clear dead inventories and clean up its balance sheet. It is also looking at alternatives to boost the off-take of its manufactured equipment.
- 3 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Company Background
KBL Brothers Limited (KBL) is a global pump manufacturing company with
expertise in engineering and the manufacture of systems for fluid
management. The company provides complete solutions for large
infrastructure projects in the areas of water supply, power plants, irrigation, oil
& gas and marine & defence.
Entity-wise performance of KBL
Particulars (Rs in crores) Country Stake (%) Sales (Mar 16) PBT (Mar 16) PAT (Mar 16)
PARENT COMPANY
Kirloskar Brothers Ltd India 1,680.0 6.0 12.0
SUBSIDIARY COMPANIES
Kirloskar Brothers International B V Netherland 100 873.0 (16.0) (15.0)
The Kolhapur Steel Ltd. India 96 39.0 (5.0) (5.0)
Kirloskar Corrocoat Pvt Ltd. India 65* 46.0 5.0 3.0
Kirloskar Systech India 100 22.0 7.0 5.0
Karad Projects & Motors Ltd. India 100 263.0 5.0 5.0
JOINT VENTURE COMPANIES
Kirloskar Ebara Pumps India 45# 71.0 (13.0) (12.0)
TOTAL 2,994.0 (10.0) (8.0)
Less: Intra Group Transactions (372.0) (17.0) (17.0)
Goodwill Amortisation (7.0) (7.0)
TOTAL (KBL) 2,622.0 (34.0) (32.0)
Source: KBL, Ventura Research # 45% held by Ebara Corp * 35% held by Corrocoat UK
- 4 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Key Investment Highlights
Indian pumps sector set for robust growth
Estimates on the size of the Indian pump market vary from Rs 8,500-12,000 cr
as not much data is available [as bulk of the market ~44% is unorganized]. In
comparison to the global market, which is pegged to grow at a 6% CAGR to
USD 56 bn in CY 2017 from USD 47 bn in CY 2014, the Indian market is
expected to grow at a robust rate of 10-12% CAGR by FY19.
The Indian pump industry can be classified on the basis of user segments as
shown below.
Agriculture: The demand for pumps from the agri sector was disrupted over
the last couple of years due to severe drought. The demand from this segment
diminishes when rainfall is excessive or exceedingly low, while it thrives best
when rainfall is reasonable. With rainfall projected at 94-104% of the LPA, we
expect renewed vigor in enquiries for pumps. The central allocation of Rs
20,000 cr to irrigation & water conservation will keep demand elevated for
pumps. Further, the GOI is increasingly focusing on off grid solar pumps for
agri use. This is expected to propel demand for the high margin solar pumps.
Sector wise market share of Pumps in India
Agriculture, ̀ 2295, 27%
Building services, `1615,
19%
Waste & Wastewater,
`1445, 17%
Power generation, `1020,
12%
Oil and Gas,
`680, 8%
Metals and Mining, `340,
4%
Others, `1105, 13%
Source: FICCI report, Ventura Research
Highly fragmented
retail market
- 5 - Tuesday, 20th September, 2016
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Modi Govt’s thrust on irrigation & energy efficient pumps to further fuel
demand
The central government has clearly spelt out its aim to increase the irrigation
penetration domestically. In the Union Budget FY16-17, the Government
allocated Rs 5,840 cr to irrigation. Moreover it has laid emphasis on fast
tracking of 89 irrigation projects under the Accelerated Irrigation Benefit
Programme (outlay of ~Rs 17,000 crore in FY17) and a further Rs 86,500
crore has been earmarked to be spent over the next five years. This should
propel demand going ahead for KBL.
Building Services: Increasing urbanization has led the horizontal expansion
of India's cities, putting stress on their infrastructure. However with
urbanization expected to only accelerate, vertical growth is the only option.
This should foster the growth of Building services. Further the Govt is focused
on creating 100 smart cities and affordable housing for all (expected to lead to
the construction of 11 crore dwelling units) by 2022. This massive
infrastructure push would need investments to the tune of Rs 13.3 lac crore.
With pumps being an integral part of building services, the demand is only
expected to be strong. And KBL, by virtue of being the largest player, is
expected to be the biggest beneficiary.
Water & Wastewater: The ambitious Smart Cities project, Swacch Bharat
Mission and the emphasis on better sanitation, safe disposal of waste/sewage,
clean water for all is expected to propel the demand for pumps.
Power Generation: The installed capacity for power is projected to grow to
463.54 GW by 2022 from the current 275 GW. Increased usage of washed
coal and expansion of nuclear power should boost the demand for pumps.
KBL’s market share dominance in the pump sector to continue
KBL, by virtue of its century old experience in pumps, commands the highest
market share of 12%. Considering the fact that ~44% of the pump market is
unorganized, KBL has a 21.5% market share within the organized sector. We
expect KBL to retain its market leadership position in the domestic pump
business due to its wide product range and superior distribution network.
- 6 - Tuesday, 20th September, 2016
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Best placed to take advantage of the shift in the pump business
from the unorganized to organized sector
The unorganized sector is mainly dominated by assemblers, cheap imports or
SME players who do not have much expertise in manufacturing cost efficient
pumps. The unorganized sector has dominated purely on the basis of cheap
pricing. Our channel checks suggest that the unorganized sector pumps are
~30-40% cheaper than pumps offered by the organized sector. However this
cheap pricing is purely optical. The maintenance cost & power consumption
costs (~85-90% of the cost over the life of the pump) of these inefficient
pumps far outweigh the cost of procurement. Increased awareness has led to
a gradual shift away from the unorganized sector towards organized players.
As a result the share of the unorganized sector has tumbled from 60% in 2010
to 45% in 2014 and is expected to further fall to 35% in FY18
KBL has the highest market share in the pump industry in India
Unorganised, 44%
Kirloskar Bros, 12%
CRI, 11%
KSB Pumps, 8%
Crompton Greaves, 7%
Texmo, 6%
Grundfos, 4%
WPIL, 3%V Guard, 2% Others, 3%
Source: KBL, Ventura Research
- 7 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Restructuring across territories after a rough FY16
KBL ran into a rough patch during FY16 on the back of slow order off take
and orders put on hold in its contracting business, which accounted for ~25%
of its consolidated business.
UK subsidiary- highest profit maker turning red
Historically the debt free UK business was the highest profit generating entity
of KBL and alone contributed Rs ~55 cr of the consolidated PBIT of the
company. However the UK operations of KBL took an ugly turn in FY16 and
posted a net loss of Rs 8 cr.
What went wrong?
About 40% of the UK’s order book comes from the offshore Oil and Gas sector
to which KBL was one of the three suppliers. However as the crude oil
collapsed to below $50 per barrel, the operations of all the North Sea offshore
industries were rendered unviable (Break-even of $65). This has severely
affected order flows and no revival is anticipated given the bleak outlook for oil
prices. Restructuring measures undertaken
On the back of several restructuring measures, the management expects that
the operations in 2017 would not be a replica of 2016 and the company will
not lose cash. However it will be an uphill task to attain the operational levels
of 2013/2014.
Power cost forms a major portion of pump cost over its life cycle
Maintenance Cost, 15%
Power Cost, 70%
Initial Cost, 15%
Source: KBL , Ventura Research
Steady fall in contribution of unorganized sector expected to continue
40%
56%65%
60%
44%35%
FY10 FY15 FY18
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Organised Unorganised
Source: KBL, Ventura Research
- 8 - Tuesday, 20th September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
In order to revive the UK operations the management has pivoted from the
offshore Oil and Gas industry to the downstream Oil and Gas segment and
desalination projects. These businesses are much more stable and carry far
lower risk. KBL has been receiving favourable enquiries from players in the
downstream and desalination industry. These could convert into sales
considering the rich expertise of KBL in complex pumps, which require a lot of
commissioning support.
Acquisition of Rodelta temporarily dented bottomline for FY16
KBL acquired Rodelta in July 2015, when it was in receivership mode
(equivalent of a BIFR case in India).The Acqusition of Rodelta is strategically
very important as it is an almost exact fit to the missing products in KBL
Ebara’s (Indian Subsidiary of KBL) portfolio. Further Rodelta also holds
approvals from Statoil and Shell and this was something KBL Ebara was
seeking since long. The acquisition is strategic not only from the customer
access perspective but from the angle of completion of KBL Ebara's portfolio
as well.
Rodelta’s order book was zero on the date of acquisition as the company had
gone into receivership seven months prior to it. The company had
accumulated losses of ~ Rs 7.5 cr for 2015 which were absorbed by KBL in its
consolidated numbers.
Shifting focus from the less certain project business to the steady
products segment
KBL which historically was only into the products business, forayed into the
project business sighting the high margins. The lack of execution experience
and inability to deal with the vagaries of Govt methods of working and
changing policies took its toll on the profitability of KBL. Slower economic
growth, unavailability of land, unviable projects initiated by contractees and
customers’ inability to take delivery due to the liquidity crunch further
hampered the projects business.
Restructuring of business operation to stem losses from the project
business
KBL has consciously chosen to avoid projects which entail considerable
amount of civil works. Further as a policy it has chosen to focus strictly on its
skills set and supply systems to existing EPC players. These contracts are
entered only if they fall in the framework of their terms and conditions.
- 9 - Tuesday, 20th September, 2016
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This new change in policy has resulted in the projects business imploding from
a high of 57% of total revenues to 25% in FY16. The gains associated with
this strategic shift were not visible as the company wrote off Rs 146.5 crore of
painful receivables over FY2011-16 along with aggressive provisioning for
doubtful receivable of Rs 55 crore over the same period.
With no further write-offs expected the full benefit of this transition
should start reflecting gainfully over the forecasted period.
Talks with state governments to clear long held projects
KBL has contracted for many state Government- sponsored projects for which
the equipment has already been manufactured by KBL. But off-take is,
however still pending due to various reasons (change in design, actual site
dimension different for which equipment was made etc). This has
unnecessarily ballooned the inventory of KBL.
In order to provide traction to clearance of this inventory, KBL is in talks with
concerned authorities to find the best possible mutually beneficial solution.
The efforts have shown some positive traction and infact some of its stuck up
projects are showing signs of revival (one such project is the Sripada Sagar
project of South India). KBL is also persuading state governments to see if
these manufactured systems could be used elsewhere for other projects.
KBL has refocused energies on the products business to drive
revenue growth
While KBL is not completely shunning its projects business, the company
would be choosy and only pursue business which involves a working advance
of 10% and is backed by the additional comfort of a letter of credit. Post this
Declining share of project segment in total standalone revenues
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Project revenues Product revenues
Source: KBL , Ventura Research
- 10 - Tuesday, 20th
September, 2016
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revamp products’ revenue share, which stood at 51% in FY12, has since
improved to 75% in FY16. We expect the share of the product business to
jump to 90% by FY19 on the back of:
Rising penetration of solar energy which could boost demand for solar pumps
Government projects like smart cities, affordable housing, etc, will create
demand across a different product range for KBL (building pumps, municipal
pump etc)
Revival in the construction industry especially long stuck redevelopment
projects
Above normal monsoon to lift demand from the agricultural sector
Change in customer preference from assembled and cheap pumps to high
quality pumps
Overall sales to grow at a CAGR of 6.6%
On the back of the above we expect sales to grow at a CAGR of 6.6% from Rs
2,594 cr in FY16 to 3,139 cr in FY19. Though the topline growth is marginal, it
is still encouraging given that KBL has consciously chosen to de-grow the
projects business and shift its focus to the products segment. Sales from the
project business is expected to fall from Rs ~434 cr in FY16 to Rs 369 cr by
FY19. Revenues from the product business are expected to grow at a CAGR
of 8.6% over FY16-19.
Revenue growth trajectory to improve going forth
2,100.0
2,200.0
2,300.0
2,400.0
2,500.0
2,600.0
2,700.0
2,800.0
2,900.0
3,000.0
3,100.0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Rs in crore
Net Sales
Source: KBL , Ventura Research
- 11 - Tuesday, 20th
September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Revamp in the projects business to drive potential margin boost
Consolidated EBITDA margins of the company fell to an all time low of 2.5% in
FY16 mainly driven by
Cost overruns, receivable write off’s and high provisioning in the project
business
Cyclical headwinds in the UK operation
Acquisition of Rodelta
Denial of an extension of license for steam turbines, which was a highly
profitable business
In order to improve profitability, the management has taken several corrective
measures which in our opinion should be meaningfully accretive.
We expect a steady revival in the fortunes of KBL going forth as EBITDA
margins are expected to rise from the current 2.5% to 8.2% by FY19.
Consolidated PAT margins are expected to revive post FY16 from -1.3% to
4.4% by FY19.
Substantial margin improvement going forth
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
EBITDA Margin PAT margin
Source: KBL, Ventura Research
- 12 - Tuesday, 20th
September, 2016
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Capacity redundancy to lead to debt reduction
Across all its manufacturing capacities, the average utilization for FY16 has
been ~50-55%. The redundancy in the system should be comfortable to cater
to the projected demand growth over the next two-three years.
Barring the maintenance capex of Rs 25-30 crores, not much further
investments in assets are foreseen and we believe that the priority use of cash
would be to pare down debt from the existing level of Rs 300 crore to Rs 150-
180 crore by FY19.
This is expected to improve the profitability materially.
Comfortable debt position going ahead
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
-
0.1
0.2
0.3
0.4
0.5
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Debt to Equity Interest Coverage
no of times no of times
Source: KBL, Ventura Research
Stable Debt/ EBITDA going forth
-
1.0
2.0
3.0
4.0
5.0
6.0
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Debt / EBITDA
no of times
Source: KBL, Ventura Research
- 13 - Tuesday, 20th
September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Financial Performance
On a standalone basis for Q1 FY17, KBL reported a flattish trend in revenues
at Rs 357 cr (-1.5% YoY). Despite sluggish sales we are pretty upbeat as this
demonstrates agility on the part of the management to execute its strategic
shift (towards products) without degrowing the revenues. In line with its other
focus to clean up its balance sheet, KBL wrote of high receivables and cost
over runs incurred in the project business. As a result margins took a hit of 50
bps YoY to 3.3%. The bottomline slumped to report a loss of Rs 3.2 cr (in
comparison to a profit of Rs 7.7 cr posted in Q1 FY16) on the back of a steep
decline in non operating income to 2.2 cr (11.5 cr in Q1 FY16).
In FY16, KBL’s consolidated net sales stood at Rs 2,721 crore registering a
degrowth of 4.4% YoY. EBITDA slumped 65.7% YoY to Rs 65.3 cr in FY16
against Rs 190.4 cr in FY15 on the back of huge losses in the domestic
project business and a debacle of the UK operations. EBITDA margins fell to a
life time low of 2.5% as compared to 7.0% YoY. This led to a net loss of Rs
32.2 cr in FY16 as compared to a profit of Rs 45.3 cr in FY15.
Quarterly Financial Performance (Rs crores)
Description Q1FY17# Q1FY16# FY16* FY15*
Net Sales 356.8 362.4 2,594.4 2,727.9
Growth (%) (1.5) (4.9)
Total expenditure 345.1 348.6 2,529.1 2,537.4
EBITDA 11.7 13.8 65.3 190.4
Margin (%) 3.3 3.8 2.5 7.0
Depreciation 9.7 10.2 77.1 94.7
EBIT (Ex. OI) 2.0 3.6 (11.8) 95.7
Non-Operating Income 2.2 11.5 30.3 17.2
EBIT 4.2 15.1 18.5 112.9
Margin (%) 1.2 4.2 0.7 4.1
Finance Cost 7.9 8.9 52.3 50.5
Exceptional Items - -
PBT (3.7) 6.2 (33.8) 62.4
Margin (%) (1.0) 1.7 (1.3) 2.3
Provision for Tax (0.5) (1.5) (1.5) 17.1
Profit after Tax (3.2) 7.7 (32.3) 45.3
Margin (%) (0.9) 2.1 (1.2) 1.7
Source: KBL, Ventura Research (# represents standalone, * represents consolidated)
- 14 - Tuesday, 20th
September, 2016
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Financial Outlook
The strategic shift in focus from the painful projects business to the much
more stable products business is expected to bring about a revival in the
fortunes of KBL. We expect consolidated sales to grow at a CAGR of 6.6%
over FY17-19 on the back of a healthy growth in the product business; the
product segment is expected to grow at a CAGR of 8.6% from ~2160 cr in
FY16 to 2,770 cr in FY19.
Inflection point for revenues going forth
-2%
0%
2%
4%
6%
8%
10%
23
24
25
26
27
28
29
30
31
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Net Sales EBITDA Margin PAT margin
Rs (in 000 crore)
Source: KBL , Ventura Research
Improvement in return ratios going ahead
-5
0
5
10
15
20
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
RoCE RoE
%
Source: KBL , Ventura Research
Stable working capital days ahead
20
30
40
50
60
70
80
90
100
110
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Credit Days Inventory Days Debtor Days
no of days
Source: KBL , Ventura Research
- 15 - Tuesday, 20th
September, 2016
This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.
Valuation
We Initiate coverage on KBL as a BUY with a price objective of Rs 317-
representing a potential upside of 107% from the CMP of Rs 153. At the CMP of
Rs 153 the stock is trading at 12.7X and 9.0X its estimated earnings for FY18
and FY19. We have assigned a PE multiple of 18X (average PE multiple of 18X)
on the FY19 EPS of Rs 17.6 to arrive at the target price. We are positive on the
company on account of the following factors:
Pedigree of management which deserves a higher multiple
Despite implosion of the projects business we expect the topline to show
slight growth (CAGR of 6.6%) propelled by the faster augmentation of
the products business
Margin profile to scale back to steady state levels of 7-8% from the
abysmal 2.5% clocked in FY16.
Cleaning up of the balance sheet with aggressive receivables write off
Foray into new segments of downstream Oil and Gas and desalination to
present new opportunities
Closure of decade old projects segment to lead to improved cash flow
and stem losses going forth
1-Yr Fwd P/E Band
0
100
200
300
400
500
Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16
CMP 10X 14X 18X 22X 26X
Source: KBL, Ventura Research
- 16 - Tuesday, 20th
September, 2016
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1-Yr Fwd EV/EBITDA Band
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16
EV 6X 8X 10X 12X 14X
Rs in cr
Source: KBL, Ventura Research
1-Yr Fwd P/B Band
0
50
100
150
200
250
300
350
400
Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16
CMP 0.9X 1.3X 1.7X 2.1X 2.5X
Source: KBL, Ventura Research
- 17 - Tuesday, 20th
September, 2016
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Financials and Projections
Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E Y/E March, Fig in ` Cr FY16 FY17E FY18E FY19E
Profit & Loss Statement Per Share Data (Rs)
Net Sales 2594.4 2756.5 2914.0 3139.2 Adj. EPS -4.2 4.5 12.5 17.6
% Chg. 6.2 5.7 7.7 Cash EPS 5.5 13.9 21.9 27.2
Total Expenditure 2529.1 2631.0 2710.1 2882.2 DPS 0.5 1.0 2.0 2.5
% Chg. 4.0 3.0 6.4 Book Value 121.8 125.4 135.4 150.0
EBDITA 65.3 125.4 204.0 256.9 Capital, Liquidity, Returns Ratio
EBDITA Margin % 2.5 4.6 7.0 8.2 Debt / Equity (x) 0.4 0.3 0.2 0.1
Other Income 30.3 33.1 35.0 37.7 Current Ratio (x) 1.2 1.3 1.4 1.5
PBDIT 95.6 158.5 239.0 294.6 ROE (%) -3.4 3.6 9.2 11.7
Depreciation 77.1 74.5 75.3 76.1 ROCE (%) 1.4 6.5 12.5 16.3
Interest 52.3 44.0 37.0 29.1 Dividend Yield (%) 0.3 0.6 1.2 1.5
Exceptional items 0.0 0.0 0.0 0.0 Valuation Ratio (x)
PBT -33.7 40.0 126.7 189.5 P/E - 36.6 13.2 9.4
Tax Provisions -1.5 4.2 27.8 49.8 P/BV 1.4 1.3 1.2 1.1
Reported PAT -32.2 35.8 98.9 139.7 EV/Sales 0.6 0.5 0.5 0.4
Minority Interest 1.1 0.0 0.0 0.0 EV/EBIDTA 24.6 12.6 7.3 5.4
PAT -33.3 35.8 98.9 139.7 Efficiency Ratio (x)
PAT Margin (%) -1.3 1.3 3.4 4.4 Inventory (days) 52.1 54.8 52.9 54.8
Other opr Exp / Sales (%) 0.0 0.0 0.0 0.0 Debtors (days) 90.8 86.4 79.2 72.0
Tax Rate (%) 4.5 10.6 21.9 26.3 Creditors (days) 85.3 78.6 76.3 70.3
Balance Sheet Cash Flow Statement
Share Capital 15.9 15.9 15.9 15.9 Profit Before Tax -33.7 40.0 126.7 189.5
Reserves & Surplus 953.4 979.7 1059.5 1175.3 Depreciation 77.1 74.5 75.3 76.1
Minority Interest 1.8 1.8 1.8 1.8 Working Capital Changes 7.3 -53.1 -37.1 -56.4
Long Term Borrowings 45.5 37.4 28.7 18.7 Others 47.8 36.8 5.0 -24.0
Deferred Tax Liability -25.3 -28.2 -32.4 -35.7 Operating Cash Flow 98.5 98.2 169.8 185.1
Other Non Current Liabilities 167.1 177.9 187.1 197.3 Capital Expenditure -67.6 -23.0 -30.0 -30.0
Total Liabilities 1158.4 1184.4 1260.5 1373.3 Other Investment Activities 23.0 0.0 0.0 0.0
Gross Block 1098.4 1128.4 1158.4 1188.4 Cash Flow from Investing -44.6 -23.0 -30.0 -30.0
Less: Acc. Depreciation -533.8 -608.3 -683.6 -759.6 Changes in Share Capital 0.0 0.0 0.0 0.0
Net Block 564.7 520.2 474.9 428.8 Changes in Borrowings 17.6 -62.6 -67.4 -77.0
Capital Work in Progress 7.0 0.0 0.0 0.0 Dividend and Interest -72.8 -53.6 -56.0 -52.9
Non Current Investments 0.0 0.0 0.0 0.0 Cash Flow from Financing -55.2 -116.1 -123.4 -129.9
Net Current Assets 290.2 346.0 443.8 577.2 Net Change in Cash -1.2 -40.8 16.4 25.3
Long term Loans & Advances 296.5 318.2 341.8 367.3 Opening Cash Balance 61.4 60.2 19.4 35.8
Total Assets 1158.4 1184.4 1260.5 1373.3 Closing Cash Balance 60.2 19.4 35.8 61.1
- 18 - Tuesday, 20th
September, 2016
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