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- 1 - Friday, 2nd Sep, 2011

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.

Suzlon Energy Ltd. CMP Rs 37.9 PE 9.5x FY2013E BUY

PRICE TARGET Rs 60/- (18 Months) Index Details Sensex 16,821 Nifty 4,949 BSE 100 8,799

Industry Heavy Elec

Equip

Scrip Details

Mkt Cap (Rs in crore) 6,745 Book Value (Rs) 37.8 Eq Shares O/s (Cr) 177.7 Avg Vol (Lacs) 52.6 52 Week H/L 66/34 Dividend Yield (%) - Face Value (Rs) 2.0 BSE Code 532667 NSE Code SUZLON

Shareholding Pattern (30th June, 2011)

Shareholders % holding Promoters 54.8 Indian Institutions 5.3 FII’s 13.0 Non Promoter Corporate 5.5 Public 21.4 Total 100.0

Suzlon vs. Sensex

Global emphasis on renewable energy As per IEA estimates by 2030, 4500 GW of additional power generation capacity would be set up at a capital outlay of ~ $13 tn. On the basis of commitments made at the Kyoto Protocol, share of renewable energy in total electricity generation is expected to increase to 23% in 2035 (from 18%) with wind and solar energy being the largest contributors. The global cumulative installed capacity for wind energy is expected to grow at a CAGR of 18.4% to 459 GW by 2015 from 197 GW of installations recorded in 2010 (2001-2010 CAGR of 28%). Majority of new wind energy installations are expected to come from China, Europe and India as availability of windy sites and favorable policy support makes them preferred locations. Robust order book and cost competitiveness augur well for the business The cumulative order book of 4739 MW ($6.6 bn) to be executed over the next 15-18 months provides strong medium term revenue visibility. Further optimum utilization of low cost manufacturing base through increased off shoring (post Repower acquisition) and rationalization of operations should lead to improved global competitiveness and profitability. Over the period FY11-13, we expect revenues to grow at a CAGR of 28.7% to Rs 29,980.3 crore with marked improvement in EBIDTA margins to 11.2% in FY13 (+690 bps from FY11) while net margins should turn positive to 2.4% in FY13 from the current (5.8)%. Access to REpower’s cash reserves, free cash flow generation and monetization of non-core assets to improve debt profile While a large portion of the current debt of Rs 12,264 crore has been restructured, there exists considerable nervousness amongst investors on Suzlon’s ability to service the FCCB obligations of Rs 2,577 crore. In our opinion these concerns are over played and we expect significant cash generation from the turnaround in operations. Further cash reserves of REpower (Rs 2000), Hansen stake sale (~ Rs 828 crore) and debtor (Edison for Rs 900 crore) recoveries in FY12 should provide adequate resources for repayment and improve the debt profile. We expect D/E ratio to improve to 1.3 in FY13 (as compared to 1.8 in FY11) post payment of FCCBs.

We initiate coverage on Suzlon Energy Ltd. (Suzlon) as a BUY with a Price Objective of Rs 60 (15x FY13 EPS) over a period of 18 months representing a potential upside of ~58%. At CMP of Rs 37.9, the stock is trading at 11.6x and 9.5x its estimated earnings for FY2012E & FY2013E, respectively. Suzlon along with REpower is the 5

th largest

wind turbine maker with market share of ~9% in the global market. Its strong order book coupled with increased global emphasis on alternate power, rationalization of operations and enhanced off-shoring (post REpower acquisition) should go a long way in improving revenues and overall profitability. We expect revenues to grow at a CAGR of 28.7% to Rs 29,980.3 crore over the forecast period with a turnaround in its profitability during the current year.

Key Financials (Rs in Cr)

Y/E Mar (Rs Crore)

Net Revenue

EBITDA

PAT

EPS

EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/ EBITDA(X)

2010 20779.7 901.6 -1032.4 -5.8 - -15.7 4.9 - 17.6

2011E 18090.0 785.0 -1046.0 -5.9 - -15.6 4.6 - 20.2

2012E 24493.2 2237.0 579.0 3.3 - 7.9 12.1 11.6 7.1

2013E 29980.3 3350.0 708.2 4.0 22.3 8.8 18.2 9.5 4.7

Stock Pointer



Company Background Established in 1995, Suzlon is a vertically integrated company engaged in the development, manufacturing, installation and maintenance of wind turbine generators (WTG) and related components. Suzlon’s emphasis on higher efficiency products, low cost manufacturing, strong execution capabilities and diversified footprint has helped the company to emerge as a preferred supplier of WTG globally. The company along with its subsidiaries is the 5

th largest wind turbine maker with market share of ~9%

in the global wind power market.

Suzlon Business model

End to End Solutions

Wind Resource mapping

Land and Site

Identification

Supply of WTG &

Accessories

Site Infrastructure Development

Installation & Commissioni

ng

Power Evacuation

Lifetime O&M

Support to customers

for ancillary activities

Source: Suzlon, Ventura

As of March 2011, the Suzlon group has a total installed capacity of 7,400 MW. Out of the total installed capacity, Suzlon on a standalone basis, accounts for 5700 MW while REpower capacity stands at 1,700 MW. The company has a diversified product range which ranges from 600 KW to 6.15 MW.

Suzlon diversified portfolio


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Key Investment highlights Global emphasis on renewable energy

By 2030, as per IEA estimates, 4500 GW of additional power generation capacity would be set up at a capital outlay of ~ $13 tn. Although fossil fuels will remain the major source (~75%) of energy generation, depleting reserves, increased cost of extraction and mounting environmental concerns (especially after Fukushima incident) have led many to reduce their carbon footprint by increasing the contribution from clean & renewable energy sources. According to IEA the share of renewable energy in total generation mix is expected to climb to 23% in 2035 from 18% in 2007 with wind and solar energy being the largest contributors.

Global energy generation by fuel mix

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Liquids Nuclear Renewables Natural gas Coal

(trillion kwh)

Source: International Energy Outlook 2010 Wind power to become preferred source of clean energy Aided by government support and policy initiatives wind energy has emerged as one of the leading sources of green energy. The global cumulative installed capacity for wind energy which stood at 197 GW in 2010 (2001-2010 CAGR of 28%) is expected to grow at a CAGR of 18.4% to 459 GW by 2015 and its share in the total global electricity generation is estimated to climb to 9% in 2020 (from 2% share recorded in 2010).

Global Wind energy installed capacity in GW

Source: GWEC

Stock Pointer



Emerging markets to lead wind energy growth ahead of the developed world China has championed the growth of wind energy in emerging markets and has ramped up its wind power portfolio (44.7 GW) at an enviable pace to outgrow USA (40.2 GW) in terms of installed capacity. The Indian market (though slow in comparison to China) is also not far behind at 13.1 GW of installed capacity, is the 5

th largest globally. Brazil, Chile and Mexico are

other markets which are showing encouraging trends and large scale developments for offshore wind installations will account for bulk of the new capacity addition in Europe. However, the US wind energy market is expected to remain subdued in the near term, due to uncertainty over policy support and cheap natural gas prices. China wind energy generation to grow exponentially According to National Wind Energy Resources, China’s total exploitable capacity for both land-based and offshore wind energy is around 2,580 GW. With the Chinese government setting an ambitious target of establishing 150 GW of wind power capacity by 2020, we expect robust demand for WTG from the Chinese market. The Chinese wind energy generation market is mainly controlled by government owned companies which account for 80% of market share. Dominance of established players, stringent policy norms (70% of RM procurement locally, withdrawn only in 2010) and intense price competition has made survival of MNC players difficult in the Chinese wind power market.

India market – encouraging policy initiatives provide fillip to the sector As per the World Institute for Sustainable Energy (WISE), Indian wind energy potential is estimated at 100 GW and with the present installed capacity at 13 GW, there exists significant room for growth. Policy support from government, preferential feed in tariffs, possibilty to claim 80%

Projected Annual installations by region Projected Global wind power capacity by region

Source: GWEC Source: GWEC

Wind power capacity by country

Source: GWEC

Stock Pointer



accelerated depereciation (AD) and 10 year tax holiday are some of the key factors which have made wind energy a lucrative investment opportunity. At present 13 State Electricity Regulatory Commissions (SERC) have declared preferential feed–in tariffs for purchase of electricity generated from wind power projects established in respective states. Introduction of REC trading mechanism which enables renewable energy deficit states to fullfill their renewable energy obligation (2-10% of total energy requirement) by purchasing REC certificates is another factor which will help sustain growth over the coming years. Due to higher wind capacity factors and attractive feed-in tariffs Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka and Gujarat are emerging as prefered destinations for wind power installations.

Wind potential at different location India Source: www.mapsofindia.com

Stock Pointer



Although Current GBI scheme provides lower IRR than that under the AD, IPP investors to spearhead the domestic wind power installations Currently under generation based Incentive (GBI), an incentive of Rs. 0.50 per kWh (over and above the tariff approved by SERC) on generation from wind power projects for 10 years (post commissiong of operations) is being offered. In its present form, the GBI scheme is not attractive enough to pull developers away from AD policy as IRR for GBI projects at the prevailing tariffs (including incentive Rs 0.50/kwh) works out to be 1.2-1.5% lower as compared to AD projects.

Preferential Feed in tariffs for different states

States Tariff rates per kWh Annual tariff escalation % Renewable Portfolio Standard for wind energy

Andhra Pradesh

Rs. 3.50 Constant for 10 years for the PPAs to be signed during 01-05-09 to 31-03-2014

5% for all RE (2011/12)

Gujarat Rs. 3.56 No escalation for 25 years of project life

5% (2011/12) 5.5% (2012/13)

Haryana Rs. 4.08 With 1.5% per year till 5th year 10% (2010/11) for all RE

Karnataka Rs. 3.70 No escalation for 10 years 7-10% (2010/11) for all RE

Kerala Rs. 3.64 No escalation for 20 years of project life

3% (2011/12 & 2012/13) for all RE

Madhya Pradesh

Rs. 4.35 No escalation for 25 years of project life

6% (2011/12)

Maharashtra

Wind Zone I – Rs. 5.07

No escalation for 13 years 7% (2011/12) 8% (2012/13) for all RE

Wind Zone II – Rs. 4.41

Wind Zone III – Rs. 3.75

Wind Zone IV – Rs. 3.38

Orissa Rs. 5.31 No escalation for 13 years 5% for all RE (2011/12)

Punjab Rs. 3.49 With base year 2006/07 & with 5 annual escalations @5% up to 2011/12

4% for all RE (2011/12)

Rajasthan Rs. 3.87 & Rs. 4.08

No escalation for 25 years of project life Rs. 3.87/kWh for Jaisalmer, Jodhpur & Barmer districts while Rs. 4.08/kWh for other districts

7.5% (2011/12)

Tamil Nadu Rs. 3.39 No escalation for 20 years of project life

14% for all RE (2010/11)

Uttarakhand

Wind Zone I–Rs. 5.15* Rs. 5.65 for 1st 10 year & Rs. 3.45 for 11th year onward

4.5% for all RE (2011/12) Wind Zone II–Rs. 4.35

Rs. 4.75 for 1st 10 year & Rs. 3.00 for 11th year onward

Wind Zone II–Rs. 3.65* Rs. 3.95 for 1st 10 year & Rs. 2.55 for 11th year onward

Wind Zone IV–Rs. 3.20* Rs. 3.45 for 1st 10 year & Rs.2.30 for 11th year onward

West Bengal Rs. 4.87 No escalation for 10 years 3% for all RE (2011/12)

Stock Pointer



In case AD policy is discontinued, we may see a slight slump in wind energy installations in near term. However it will not have a material impact on wind power projects in longer run as evinced by the recent surge in orders placed by IPP investors. Assurance of cheaper source of power along with tax benefits makes wind power an attractive investment. Additional impetus to wind power sector is expected to come from Renewable Power obligations of states and establishment of REC, a platform for trading renewable energy certificates. All these factors should help sustain the long term growth story of the Indian wind energy market.

US market – cheap natural gas prices & uncertainties over continuation of PTC stunts growth The US market which is the 2

nd largest market in terms of wind energy

generation has slackened in installations (5.1 GW) in 2010 due to cheap natural gas pricing and uncetainity over continuance of the Production Tax Credit (PTC) policy (extended till Mar 2012) which was one of the prime factors driving the wind sector growth. Under the PTC policy, the government provides tax credit of $ 2.1/MW for the first 10 years on power sourced from renewable energy. Outlook for the wind sector remains bleak at least in the near term unless the government comes out with predictable policies for development of wind energy. EU market – offshore installations the way forward During 2010, 9,918 MW of wind power capacity was installed across Europe, with the EU accounting for 9,295 MW of the total installations. Of the 9,295 MW installed in the EU, 8,412 MW were onshore installations (-13% YoY) while the remaining 883 MW came from offshore installations (+51% YoY). Germany (27.2GW) continues to lead Europe in terms of total installed capacity followed by Spain (20.7 GW) and Italy (5.8MW). Large scale developments for offshore wind installations are expected to account for bulk of the new capacity additions coming up in the European region. By 2015, 3.1 GW (about 21%) of the annual market is expected to come from offshore installations. Other Emerging markets catch the wind energy bug Apart from the aforementioned geographies, Brazil, Chile, Argentina, Australia, South Africa are the countries which are making efforts to tap wind power. Key factors for development of wind energy in these locations will be the government support and incentive schemes along with the adequate grid infrastructure and availability of easy financing options.

Robust order book and cost competitiveness augur well for the business

The cumulative order book of 4739 MW ($6.6 bn) which is to be executed over the next 15-18 months provides strong revenue visibility in the near term. Besides this, rationalization of operations, optimum utilization of low cost manufacturing base through increased offshoring (post REpower acquisition) and sharing of infrastructure with REpower should help improve competitiveness in global markets besides improving overall

Stock Pointer



profitability. Augmented by higher order execution, revenues are expected to grow at a CAGR of 28.7% to Rs 29,980.3 crore over the period FY11-13. We expect the EBIDTA margins to improve to 11.2% in FY13 (+690 bps from FY11) while net margins should turn positive to 2.4% in FY13 from the current -5.8%.

Indian market to be a key contributor to the topline Access to large sites, strong execution capability, and cost competitiveness has assisted Suzlon to maintain its leadership position in the domestic markets for the past 12 years. With installations on more than 50 project sites across 8 states, the company has surpassed 6.2 GW (13.1 GW India capacity) of total installed capacity. Suzlon with its vast experience and advanced technology is well placed to cater to the needs of the fast growing domestic market. As of Q1FY12, the total order book for Indian market stands at 1255 MW (~ 26.4% of total order backlog). China is big potential market Currently Chinese operations are conducted through a wholly owned subsidiary which has 600 MW of installed capacity. Procurement of RM from local markets and lower cost of operations helps Suzlon to compete with both local and MNC manufacturers in this price sensitive market. As of May 2011, the China order book stood at 304 MW. The company is looking to form partnerships with Chinese utilities to explore the opportunities in offshore markets of Europe and America. We expect the order book to grow at rate of 10-15% over the next few years. Development of 2.25 MW WTG at no extra cost could provide competency for Chinese market Leveraging its existing manufacturing platform of 2.1 MW WTG, the company has developed a 2.25 MW WTG without any cost escalation. Given the fact that in the Chinese market cost per MW is the key criteria, Suzlon through this 2.25 MW WTG hopes to generate orders from government backed entities. However, due to lower realizations and

Suzlon order book trend Suzlon revenue and profitability

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Suzlon Wind India Suzlon Wind Intl

RE Power Order Intake (RHS)

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SE Forge EBITDA Margin Net Margin

Source: Suzlon, Ventura Source: Suzlon, Ventura

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presence of highly competitive environment we don't foresee a significant upside for Suzlon from the Chinese market in near term. REpower – a strategic fit for developed markets

Impressive product portfolio (wide range of wind turbines 2 MW – 6 MW) and strong presence in Europe and North American markets makes RE Power a strategic fit. The REpower acquisition not only provides Suzlon with an enhanced product range, but would help in optimum utilization of its low cost manufacturing base to supply products to the developed markets at competitive prices and improve overall profitability. Aided by sourcing of component at economical prices from Asian facilities and sharing of infrastructure to avoid duplication of fixed cost, we foresee a significant improvement in operating margins of RE Power in years to come.

REpower improving profitability


REpower complements Suzlon

Market coverage Suzlon strength REpower strength Group Positioning

Customer & Geographic

Strong customer approach

Asia, US,

ANZ, Brazil,

Developing markets

Europe, US, Canada

Developed markets,

Offshore markets

Global Player

Flexible business model,

Strong customer focus

Product footprint Onshore <2.5MW Onshore 2MW+

Offshore up to 6.15MW

Comprehensive product coverage

Product competitiveness

Cost competitive

Strong service focus

High energy yield

Reliability

Reliability

Competitive price

Strong service

Supply chain Global, low cost

Vertical integration

Focus on vendor quality management

Global Cost leadership

European product reliability at Asian price


Stock Pointer

- 10 - Friday, 2nd Sep, 2011


Access to REpower’s cash reserves, free cash flow generation and monetization of non-core assets to improve debt profile

While a large portion of the current debt of Rs 12,264 crore has been restructured, there exists considerable nervousness amongst investors on Suzlon’s ability to service the FCCB obligations of Rs 2,577 crore. In our opinion these concerns are over played and we expect significant cash generation from the turnaround in operations.

Further free cash reserves of Repower (~Rs 2000), Hansen stake sale (~ Rs 828 crore) and debtor (Edison for Rs 900 crore) recoveries in FY12 should provide adequate resources for repayment and improve the debt profile. We expect D/E ratio to improve to 1.3 in FY13 (as compared to 1.8 in FY11) post payment of FCCBs.

Balance sheet quality set to improve Although Suzlon had significantly leveraged its balance sheet in the past, it is now taking additional steps to resolve issues further and lower gearing. In Q1FY11 the company has renegotiated the terms and conversion price of FCCBs maturing in FY13. Recently, Suzlon has raised a sum of $175 mn (~Rs 800 crore) to fulfill the funding requirement of REpower’s minority

Particulars FY12 FY13 FY14

Cash Flow from operations 2056.0 3247.8 3971.8

EBIT 1569.0 2664.5 3398.8

Depreciation 668.0 685.5 698.0

Tax -181.0 -102.2 -125.0

Capex -350.0 -250.0 -250.0

Working Cap Requirement -809.5 -678.6 -671.5

Free Cash Flows 896.5 2319.2 3050.3

Debt Repayment 1100.3 4355.2 2276.3

Principal - 3277.6 1302.3

Interest 1100.3 1077.6 974.0

Surplus / (Deficit) -203.8 -2036.0 774.0

Additional Resources Rs. (Cr)

Suzlon Cash as of Mar 2011 1023

REpower Cash as of Mar 2011 2000

Hansen Stake 828

Receivables (Edison) 900

REpower stake buyout reqd -100

FCCB issue 800

Stake buyout cost 900

Total 4623


Stock Pointer

- 11 - Friday, 2nd Sep, 2011


stake buyout. The company has also refinanced Rs 10,694 crore of loans with 2 year repayment and covenant holiday ending in FY13. Besides this, the company has successfully completed a rights issue of Rs 1,188 crore during FY11. Out of total loan book of Rs 12,264 crore, Term & Acquisition loans amounts to 49.8% and are repayable over a period of 4-5 years. At present Working capital loans stands at ~ Rs 3000 crore and constitutes 24.5% of loan book. Balance is debt raised on books of subsidiaries which has repayment cycle of 5-6 years. Following the repayment of major portion of FCCB in FY13, we expect D/E ratio to improve to 1.3 in FY13 as compared to 1.8 in FY11. Augmented by strong operational performance Debt / EBITDA is all set to improve to 3.1 in FY13 as against 15.6 in FY11. We also expect Interest Coverage ratio to improve to 3.1x in FY13 from 0.8x recorded in FY11.

Key Concerns Currency fluctuation risks Significant portion of revenues comes from the overseas operations. Any adverse movement in the movement of currency can severely impact profitability of the company Highly working capital intensive business As the gestation period of most of the projects is more than one year the company require large amount of working capital to run the business smoothly. Any delay in funding of working capital needs can have dampening effect on the business of the company.

Improving Debt profile Interest Coverage ratio

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Suzlon Debt profile

Particulars Amt (Rs Cr) Maturity

Acquisition Loan 2074.0 4-5 years

FCCB 2950.0 5-6 years

W C Loan 3000.0 Revolving

Other term Loan 4000.0 4-5 years

Subsidiary Loan 1050.0 5-6 years Source: Suzlon, Ventura

Stock Pointer

- 12 - Friday, 2nd Sep, 2011


Financial Performance Augmented by robust execution in domestic market and strong show by REpower Net Sales for the current quarter grew by 82.1%YoY to Rs 4380.0 crore. Rationalization of other operating expenses and forex gains helped the company post EBITDA margins of 11.2% as compared to -22.7% in Q1FY11. As a result of improved operating performance net profit margins in Q1FY12 improved to 1.6% as compared to -38.4% in Q4FY10.

Net Sales for FY11 declined by 12.9%, to Rs 18,090 crore as compared to Rs 20,780 crore in FY10. This was primarily on account of disinvestment of Hansen Transmission in FY10. EBITDA margin was maintained at 4.5%, while Net margin further declined by 100 bps to -5.8%.

CONSOLIDATED RESULTS Q1FY12

PARTICULARS Q1FY12 Q1FY11 FY11 FY10

Net Sales 4380.0 2405.0 18090.0 20779.7

Growth % 82.1 -12.9 14.9

Expenditure 3890.0 2951.0 17305.0 19878.1

EBITDA 490.0 -546.0 785.0 901.6

Margin % 11.2 -22.7 4.3 4.3

Depreciation 141.0 127.0 657.0 657.0

EBIT (EX OI) 349.0 -673.0 128.0 244.6

Other Income 32.0 24.0 107.0 107.0

EBIT 381.0 -649.0 235.0 351.6

Margin % 1.9 -3.8 1.1 2.0

Interest 298.0 261.0 1137.0 1195.0

Exceptional items 37.0 37.0 37.0

PBT 83.0 -947.0 -865.0 -806.4

Margin % 0.4 -5.5 -3.9 -4.7

Provision for tax 14.0 -24.0 181.0 181.0

PAT 69.0 -923.0 -1046.0 -987.4

Margin % 1.6 -38.4 -5.8 -4.8 Source: Suzlon Financial Outlook On the back of higher order execution we expect revenues to grow at a CAGR of 28.7% to Rs 29,980.3 crore over the forecast period FY11-13. Rationalization of operations should help the company to enhance its EBITDA margin to 11.2% in FY13 (+690 bps from FY11). Aided by improved operational performance we expect the company to post net margin of 2.4% in FY13. (-5.8% in FY11). Subsequently ROE and ROCE are also expected to improve to 8.8% (-15.5% FY11) and 18.2% (4.6%), respectively.

Stock Pointer

- 13 - Friday, 2nd Sep, 2011


Valuation We initiate coverage on Suzlon Energy Ltd. (Suzlon) as a BUY with a Price Objective of Rs 60 (15x FY13 EPS) over a period of 18 months representing a potential upside of ~58%. At CMP of Rs 37.9, the stock is trading at 11.6x and 9.5x its estimated earnings for FY2012E & FY2013E, respectively.

Revenue and profitability trend Improving ROE and ROCE

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- 14 - Friday, 2nd Sep, 2011


P/E bands

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Source: Ace Equity, Ventura

Stock Pointer

- 15 - Friday, 2nd Sep, 2011


Profit & Loss Statement

Key Ratios

Y/E March, Fig in Rs. Cr FY 2010 FY 2011 FY 2012e FY 2013e

Net Sales 20779.7 18090.0 24493.2 29980.3

% Chg. -20.9 -12.9 35.4 22.4

Total Expenditure 19878.1 17305.0 22256.2 26630.3

% Chg. 853.7 -12.9 28.6 19.7

EBDITA 901.6 785.0 2237.0 3350.0

EBDITA Margin % 4.3 4.3 9.1 11.2

Other Income 69.0 107.0 212.4 78.0

PBDIT 970.6 892.0 2449.4 3428.0

Depreciation 663.0 657.0 668.0 685.5

Interest 1195.0 1137.0 1100.3 1077.6

Exceptional items -211.0 37.0 0.0 -831.9

PBT -676.4 -865.0 681.2 833.1

Tax Provisions 356.1 181.0 102.2 125.0

Reported PAT -1032.4 -1046.0 579.0 708.2

PAT Margin (%) -5.0 -5.8 2.4 2.4

Raw Materials / Sales (%) 65.6 68.8 68.0 67.1

Manpower cost / Sales (%) 10.3 9.3 8.4 7.7

Other opr Exp / Sales (%) 19.8 17.6 14.5 13.9

Tax Rate (%) -52.6 -20.9 15.0 15.0


Per Share Data (Rs)

EPS -5.8 -5.9 3.3 4.0

Cash EPS -2.1 -2.2 7.0 7.8

DPS 0.0 0.0 0.0 0.0

Book Value 37.1 37.8 41.0 45.0

Capital, Liquidity, Returns Ratio

Debt / Equity (x) 1.9 1.8 1.7 1.3

Current Ratio (x) 1.8 1.7 1.7 1.5

ROE (%) -15.7 -15.6 7.9 8.8

ROCE (%) 4.9 4.6 12.1 18.2

Dividend Yield (%) 0.0 0.0 0.0 0.0

Valuation Ratio (x)

P/E -6.5 -6.4 11.6 9.5

P/BV 1.0 1.0 0.9 0.8

EV/Sales 0.8 0.9 0.6 0.5

EV/EBIDTA 17.6 20.2 7.1 4.7

Efficiency Ratio (x)

Inventory (days) 104.7 107.8 108.0 108.0

Debtors (days) 55.4 119.1 90.0 86.4

Creditors (days) 146.0 168.9 158.4 156.6

Balance Sheet Cash Flow Statement Y/E March, Fig in Rs. Cr FY 2010 FY 2011 FY 2012e FY 2013e

Share Capital 311.4 355.0 355.0 355.0

Reserves & Surplus 6274.2 6361.0 6940.0 7648.2

Minority Interest 347.2 330.0 73.0 73.0

Total Loans 12667.9 12264.0 12540.5 10494.7

Deferred Tax Liability 182.8 271.0 271.1 271.0

Total Liabilities 19783.5 19581.0 20179.5 18841.9

Gross Block 11538.3 13023.0 13359.0 13709.0

Less: Acc. Depreciation 1377.2 2028.0 2696.0 3381.4

Net Block 10161.1 10995.0 10663.1 10327.6

Capital Work in Progress 413.0 336.0 350.0 250.0

Investments 1092.3 1183.0 500.0 500.0

Net Current Assets 7776.6 6910.0 8509.4 7607.3

Deferred Tax Assets 86.8 157.0 157.0 157.0

Misc Expenses 253.7 0.0 0.0 0.0

Total Assets 19783.5 19581.0 20179.5 18841.9


Profit After Tax -1005.5 -1097.0 579.0 708.2

Depreciation 663.0 657.0 668.0 685.5

Working Capital Changes 2293.4 1083.3 90.5 -678.6

Others -1995.1 1453.6 0.0 831.9

Operating Cash Flow -44.2 2096.9 1337.5 1546.8

Capital Expenditure 5135.1 -1407.7 -350.0 -250.0

Change in Investment -1087.2 -90.7 683.0 0.0

Cash Flow from Investing 4047.9 -1498.4 333.0 -250.0

Proceeds from equity issue 17.5 43.7 0.0 0.0

Inc/(Dec) in Debt -2201.6 -403.9 276.5 -2877.6

Minority Interest -1985.0 -21.5 -257.0 0.0

Cash Flow from Financing -4169.1 -381.8 19.4 -2877.6

Net Change in Cash -165.5 216.7 1689.9 -1580.8

Opening Cash Balance 3069.8 2904.3 3121.0 4810.9

Closing Cash Balance 2904.3 3121.0 4810.9 3230.2

Exhibit 01: Financials and Projections

Ventura Securities Limited Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079 This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation.

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