Madhucon Projects

8/6/2019 Madhucon Projects

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

Y/E March (` cr) 1QFY12 1QFY11 4QFY11 % chg (yoy) % chg (qoq)Net sales 329.2 407.4 593.4 (19.2) (44.5)Operating profit 46.3 43.5 62.6 6.5 (26.0)

Net profit 8.0 13.5 19.3 (40.8) (58.7)Source: Company, Angel Research

For 1QFY2012, Madhucon Projects (MPL) reported a disappointing performance

mainly on account of lower revenue booking on the road segment. MPLs order

book at 3.5x FY2011 revenue provides good revenue visibility. However, we are

revising our numbers for FY2012 and FY2013 to factor in the lower top-line

growth and higher interest outgo. Nevertheless, given the sharp price decline,we upgrade the stock to Buy from Accumulate.Revenue disappoints, likely to miss the revised revenue guidance: MPL reportedbelow-expectation top-line of `329.2cr, down 19.2% yoy, against our

expectations of `481cr. This was mainly on account of lower revenue booking of

`120cr150cr in its captive BOT projects. Further, management has guided for

revenue of `2,000cr for the year (our earlier revenue estimates) from its earlier

guidance of `2,250cr; however, we believe that would require a lot of catching

up, given early monsoons and a bleak order inflow scenario. Hence, we are

factoring in lower numbers. OPM for the quarter stood at 14.1% (10.7%), posting

a whopping jump of 340bp yoy against our flat expectations. Management has

guided for normalised OPM of 1112% for the year as a whole. On the earnings

front, the company posted a 40.8% yoy decline to `7.9cr against our expectation

of a 12.7% decline.

Outlook and valuation Raising of capital is the key catalyst: We believe keytriggers to watch out for MPL should be pick-up in execution in the development

business and raising money. However, these plans would fructify somewhere in

2HFY2012 only and will be based on the market conditions prevailing then.

Hence, we believe until then the stock would be a sector performer and real value

would be created only on unlocking at the subsidiary level. We have valued MPL

on an SOTP basis to arrive at a target price of `106/share and recommend Buy,

with a 22.7% potential upside from current levels.

Key financials (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012E FY2013ENet sales (incl op. income) 1,388 1,705 1,898 2,434% chg 35.4 22.8 11.4 28.2

Adj. net profit 45.8 51.0 49.9 61.9% chg (2.4) 11.5 (2.2) 24.1

FDEPS (`) 6.2 6.9 6.7 8.4EBITDA margin (%) 9.8 10.9 10.7 10.4

P/E (x) 14.1 12.6 12.9 10.4

RoAE (%) 8.2 8.5 7.7 8.9

RoACE (%) 9.0 10.6 9.0 9.1P/BV (x) 1.1 1.0 1.0 0.9

EV/Sales (x) 0.8 0.9 0.8 0.8

EV/EBITDA (x) 8.1 8.0 7.6 7.7

Source: Company, Angel Research

BUYCMP `87

Target Price `106

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 57.7

MF / Banks / Indian Fls 21.6

FII / NRIs / OCBs 11.2

Indian Public / Others 9.6

Abs. (%) 3m 1yr 3yr

Sensex (4.9) 1.1 31.9

MPL (19.4) (43.7) (59.3)

1

18,1975,482

MAPR.BO

MDHPJ@IN

642

0.57

169.0/77.5

18,795

Infrastructure

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

Face Value (`)

BSE SensexNifty

Reuters Code

Shailesh Kanani022-39357800 Ext: 6829

[email protected]

Nitin Arora022-39357800 Ext: 6842

[email protected]

Madhucon ProjectsPerformance Highlights

1QFY2012 Result Update | Infrastructure

July 29, 2011


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Madhucon Projects |1QFY2012 Result Update

July 29, 2011 2

Exhibit 1:Quarterly performance (Standalone)

Y/E March (` cr) 1QFY12 1QFY11 4QFY11 % Chg (yoy) % Chg (qoq) FY2011 FY2010 % ChgNet sales 329.2 407.4 593.4 (19.2) (44.5) 1704.6 1388.3 22.8Total expenditure 282.9 363.9 530.8 (22.3) (46.7) 1519.6 1252.9 21.3Operating profit 46.3 43.5 62.6 6.5 (26.0) 185.0 135.4 36.6OPM (%) 14.1 10.7 10.6 340bp 350bp 10.9 9.8 110bp

Interest 20.7 10.3 24.5 101.4 (15.7) 61.8 25.1 145.9

Depreciation 12.3 11.9 11.8 2.6 3.7 47.5 46.4 2.2

Non operating income 0.6 0.3 3.4 112.8 (83.4) 5.3 5.6 (4.9)

Nonrecurring items 0.0 0.0 0.0 - - 0.0 0.0 -

Profit before tax 13.9 21.5 29.7 (35.3) (53.0) 81.1 69.4 16.7Tax 6.0 8.1 10.4 (26.2) (42.4) 30.0 23.7 26.9

Reported net profit 8.0 13.5 19.3 (40.8) (58.7) 51.0 45.8 11.4PAT (%) 2.4 3.3 3.3 (90)bp (90)bp 3.0 3.3 (30)bp

Reported EPS (`) 1.1 1.8 2.6 (40.8) (58.7) 6.9 6.2 11.4Source: Company, Angel Research

Revenue disappoints, likely to miss the revised revenue guidance: MPL reportedbelow-expectation top line of `329.2cr, down 19.2% yoy, against our expectation

of `481cr. This was mainly on account of lower revenue booking of `120cr150cr

in its captive BOT projects. Further, management has guided for revenue of

`2,000cr for the year (our earlier revenue estimates) from the earlier guidance of

`2,250cr but we believe that would require a lot of catching up given the early

monsoons and a bleak order inflow scenario. Hence, we are factoring in lower

numbers.

On the BOT front, four operational projects witnessed a toll collection of

`50lakh/day, which is broadly in-line with our estimates. Management has

indicated that there are chances of improvement in two collections post monsoons.

Exhibit 2:First blip in many quarters on the top line


Exhibit 3:1QFY2012 revenue break-up (` cr)


53.1

13.0

38.8

18.8

4.9

23.3

49.243.0

38.0

25.622.0

(19.2)

(30.0)

(20.0)

(10.0)

-10.0

20.0

30.0

40.0

50.0

60.0

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

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

110

189

6 220 2

Roads Power Irrigation Real Estate M ining Others


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July 29, 2011 3

Earnings under pressure: OPM stood at 14.1% (10.7%), posting a whopping jumpof 340bp yoy against our flat expectations. Management has guided for

normalised EBITDAM of 1112% for the year as a whole. On the earnings front,

the company posted a 40.8% yoy decline to`

7.9cr against our expectation of a12.7% decline.

Exhibit 4:Stable EBITDAM expected going ahead


Exhibit 5:PATM under pressure


Soaring debt levels Increase in interest cost A major concern: MPL hasinvested heavily in its asset-owning business for the last few years, resulting in

increased debt levels. Higher debt levels and interest rates have led to a 5.9% qoq

hike in interest cost, which we believe is a major concern for the stock. Further,

given the companys expansion plans, there seems to be no respite on the debtfront as per our calculations. The only saviour could be access to capital markets,

which is under the initial stages of planning, via IPO/stake sale etc. We have

highlighted before as well in our notes that increasing debt levels and the resulting

increase in interest outlay are eating away profits from the standalone business.

Therefore, we believe early raising of funds is the key to the stocks performance

going ahead.

Exhibit 6:Rising interest cost a cause of concern


Exhibit 7:Rising debt levels with no respite in sight


16.6

10.3

7.4

12.511.2

12.4

6.4

10.79.7

12.7

10.6

14.1

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

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

5.3

6.1

2.4

4.6 4.7

3.9

1.4

3.3

1.9

3.3 3.3

2.4

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

-

5.0

10.0

15.0

20.0

25.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

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

24.9

(56.9)

22.4

108.0

(33.0)

51.9

15.131.0

13.3

31.9 27.2

5.9

(80.0)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.080.0

100.0

120.0

0.0

5.0

10.0

15.0

20.0

25.0

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Interst cost (` cr) qoq growth

0.2

0.4

0.8

1.3 1.3

1.8

-

0.5

1.0

1.5

2.0

-

50.0

100.0

150.0

200.0

250.0

300.0

F Y2008 FY2009 FY2010 F Y2011E FY2012E F Y2013E

Increase in Inv. WC cycle (e x-cash) (days) Net debt to e quity


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July 29, 2011 4

Order book analysis ~50% of the order book is slow

moving/pending financial closure

MPLs order book, as of 1QFY2012, stood at `5,966cr (3.5x FY2011 revenue),

which was dominated by the roads (46.7%) and power (42.2%) segments. The

balance was contributed by the irrigation, real estate and mining segments.

We believe ~50% of MPLs orders are either slow-moving (irrigation projects) or

pending financial closure (Ranchi Jamshedpur and Barsasat Krishnagar projects),

thus they would take time to start contributing to revenue. Also, funding and

overall liquidity will play a big role in MPLs growth, as ~90% of the orders are

in-house orders.

Exhibit 8:Sector-wise order backlog (`cr)


Exhibit 9:Client-wise order backlog (` cr)


Exhibit 10:Change in estimates to factor in lower operating margin and higher interest outgoFY2012E FY2013E

Earlier estimates Revised estimates Variation (%) Earlier estimates Revised estimates Variation (%)Revenue (`cr) 2,068.8 1,898.4 (8.2) 2,631.5 2,433.7 (7.5)

EBITDA margin (%) 10.2 10.7 50bp 10.3 10.4 10bp

PAT (`cr) 59.5 49.9 (16.1) 70.6 61.9 (12.3)


2,786

2,518

202 275 186

Roads

Power

Irrigation

Real Estate

Mining & others

202 186

5,579

Government

Private

Captive


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July 29, 2011 5

Outlook and valuation

Raising of capital The key catalyst

We believe the key triggers to watch out for MPL should be the pick-up in executionin the development business and building of an attractive asset portfolio to raise

money. However, these plans would fructify somewhere in 2HFY2012 only and will

be based on the market conditions prevailing then. Hence, we believe until then

the stock would be a sector performer and real value would be created only on

unlocking at the subsidiary level.

We have valued MPL at 2030% discount to its larger peers, including NCC, IVRCL

and HCC, given its scale of operations, high leverage on the balance sheet,

consistent delays in expansion plans and high dependence on captive orders for its

core construction growth. Based on the SOTP methodology, we have assigned P/E

of 7x on FY2013E earnings (`58.6/share) and valued the BOT projects on NPVbasis (`45.0/share) and other investments in Madhucon Infra and the real estate

venture on BV basis (`12.2/share and `2.0/share, respectively). Thus,our revisedtarget price stands at `106/share (`117/share).

Exhibit 11:Derivation of SOTP-based target price for MPL (FY2013E)

Business segment Methodology Remarks ` cr `/share % to TPMPL- Parent P/E 7x FY2013E Earnings 433.5 58.6 55.5Madhucon Infra. 400.6 45.0 42.6

Agra Jaipur NPV CoE -14%, Traffic and Toll increase 3% and 4% respectively 129.7 17.5 16.6

TN (DK) Exp NPV CoE -14%, Traffic and Toll increase 3% and 4% respectively 35.9 4.9 4.6

Trichy Thanjavur NPV CoE -14%, Traffic and Toll increase 4% and 5% respectively 6.4 0.9 0.8

Madhurai Tuticorin NPV CoE -14%, Traffic and Toll increase 3% and 4% respectively 71.0 9.6 9.1

Simhapuri Energy Investment 0.5x of investments 135.0 9.1 8.6

Coal Venture Investment 0.5x of investments 22.5 3.0 2.9

Real estate 9acres at Kukatpally 0.5x of investments 14.5 2.0 1.9Total 1,249.1 105.5 100.0



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July 29, 2011 6

Exhibit 12:BOT We have been conservative in our estimates, given the assets have not witnessed traffic flow asexpected and are marred by delays, which are impacting the IRRs of the projects

BOT project Agra Jaipur TN (DK) Exp Trichy Thanjavur Madhurai TuticorinType Toll Toll Toll Toll

Status Oper. Oper. Oper Oper

KM 57 73 56 126

Issuing Auth. NHAI NHAI NHAI NHAI

State Rajasthan TN Pondicherry & TN TN

Concession (yrs.) 25 20 20 20

CoD May-09 Nov-09 June-11 June-11

TPC (`cr) 326.7 375.5 390.0 920.0

Debt (`cr) 198.5 224.0 260.4 594.4

Equity (`cr) 99.4 74.7 64.7 173.7

Grant (upfront and maintenance) (`

cr) 96.0 86.0 78.4 144.0Expected traffic growth (%) 3.0 3.0 4.0 3.0

Expected toll inc (%) 4.0 4.0 5.0 4.0

Interest rate (%) 10.5 9.8 9.8 9.8

NPV (`cr) 129.7 35.9 6.4 71.0

Implied P/BV FY13E 1.0 0.2 0.1 0.3



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July 29, 2011 7

Investment arguments

Robust order book: As of 1QFY2012, MPL had an order book `5,966cr, spreadacross the power, highway and irrigation segments. In recent times, the companys

order book witnessed traction in the road segment via winning of BOT projects.

Further, with escalating activity at the NHAI level, we expect MPL to further win

projects and add to its already burgeoning order book.

FY2011 was a project-completion year: MPL has invested heavily (nearly 40% ofbalance sheet) over the years in its asset-owning arm, Madhucon Infra, which is all

set to generate returns. Further, the company is expecting completion of its first

power project (300MW) by 2QFY2012 end. However, we have factored in a

six-month delay in the project. On the coal mining front too, the company has

guided that FY2012 would see offtake of nearly 0.5mn tonnes of coal production,

which has also not been factored in by us, given consistent delays in the same.

Value unlocking at the subsidiary level A key to enhance value: We believe MPLhas a decent portfolio of road BOT assets (4 operational + 3 under development),

power projects (300MWx2 under development) and coal mining projects, which

have latent potential. However, we believe faster execution and value unlocking

would enhance value. We expect the company to access the capital markets in

1HCY2012, when it would have reached more milestones and enhanced its asset

visibility. Therefore, in the short to medium term, the stock would continue to be a

sector performer.

Key concerns

Dependability on capital markets for equity: MPL has plans to raise money frommarkets to fund its asset-expansion spree. In case MPL is unsuccessful in doing so,

it may face delays, which will negatively impact the IRRs of the companys projects.Rising commodity prices: MPL has high proportion of captive road BOT projects,which are fixed-price contracts. In such contracts, some price escalations can be

factored in; however, the company may face risk of margin erosion if commodity

prices increase beyond estimates.

Awarding from NHAI: Slowdown in awarding activity by NHAI would hit orderinflow for road-focused players such as MPL.


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July 29, 2011 8

Exhibit 13:Recommendation summary

Company CMP TP Rating Top line (` cr) EPS (`) Adj. P/E OB/FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E Sales

CCCL 28 - Neutral 2,199 2,362 2,646 9.7 2.5 1.5 3.6 18.4 10.9 18.4 7.8 2.8HCC 30 - Neutral 4,093 4,723 5,485 15.8 1.2 0.7 1.2 1.0 0.5 0.8 0.5 4.2

IRB Infra 174 191 Accu. 2,438 2,999 3,995 28.0 13.6 12.7 14.5 3.3 6.8 7.3 6.4 -

IVRCL 62 100 Buy 5,651 6,275 7,494 15.2 5.9 6.2 8.2 17.5 6.0 5.7 4.3 4.2

JP Assoc. 67 108 Buy 13,217 15,860 18,708 19.0 3.1 5.1 6.8 48.8 21.7 13.0 9.8 -

Punj Lloyd 70 - Neutral 8,166 9,585 10,992 16.0 (1.5) 3.7 5.9 - - 19.1 11.9 2.8

NCC 73 109 Buy 5,074 5,856 6,939 16.9 6.4 5.9 7.3 6.9 6.2 6.7 5.5 3.2

Sadbhav 143 161 Accu. 2,209 2,602 2,865 13.9 8.0 8.4 9.7 10.3 8.7 8.2 7.1 3.2

Simplex In. 300 404 Buy 4,896 5,373 6,721 17.2 25.1 24.1 36.7 21.0 12.0 12.5 8.2 3.0

Patel Engg 135 - Neutral 3,499 3,272 3,587 1.2 18.4 15.5 23.0 11.8 2.9 3.5 2.3 2.7

Madhucon 87 106 Buy 1,705 1,898 2,434 19.5 6.9 6.7 8.4 10.2 5.8 5.9 4.8 3.5L&T 1,726 2,030 Buy 44,265 56,137 66,161 22.3 58.2 68.3 82.5 19.0 21.7 18.5 15.3 3.0

ITNL 210 308 Buy 4,049 4,908 6,467 26.4 22.3 25.0 26.1 8.1 1.7 1.5 1.4 5.5


Exhibit 14: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 `

CCCL 28 100 - - - - - - - - 28

HCC 11 26 23 58 6 16 - - - - 40

IRB Infra 110 58 - - 77 40 5 2 - - 191

IVRCL 74 73 - - - - 27 27 - - 100

JP Assoc. 32 30 31 29 - - - - 44 41 108

Punj Lloyd 96 100 - - - - - - - - 96

NCC 76 70 2 2 8 8 - - 23 21 109

Sadbhav 87 54 - - 73 46 - - - - 161

Simplex In. 404 100 - - - - - - - - 404

Patel Engg 61 43 47 33 16 11 - - 19 14 143

Madhucon 59 55 2 2 33 31 - - 12 12 106L&T 1,567 77 - - - - 463 23 - - 2,030

ITNL 136 44 - - 148 48 - - 24 8 308



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July 29, 2011 9

Profit & loss statement (Standalone)

Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013ENet Sales 738 1,025 1,388 1,705 1,898 2,434Other operating income - - - - - -Total operating income 738 1,025 1,388 1,705 1,898 2,434% chg 44.7 38.9 35.4 22.8 11.4 28.2

Total Expenditure 631 901 1,253 1,520 1,696 2,181

Net Raw Materials 504 706 1,022 1,191 1,321 1,704

Other Mfg costs 73 118 135 201 228 295

Personnel 27 46 50 70 82 100

Other 27 31 47 58 64 83

EBITDA 107 124 135 185 203 253% chg 28.4 15.5 9.2 36.6 9.6 24.7

(% of Net Sales) 14.5 12.1 9.8 10.9 10.7 10.4

Depreciation& Amortisation 34 43 46 47 52 65

EBIT 73 81 89 138 151 188% chg 25.9 9.9 10.4 54.6 9.4 24.6

(% of Net Sales) 9.9 7.9 6.4 8.1 7.9 7.7

Interest & other Charges 16 27 25 62 81 100

Other Inc. (incl pft from Ass/JV) 12.6 19.1 5.6 5.3 5.9 6.4

(% of PBT) 18.2 26.1 8.1 6.6 7.7 6.9

Recurring PBT 70 73 69 81 76 94% chg 5.4 5.2 (5.0) 16.7 (6.7) 24.1

Extraordinary Expense/(Inc.) - - - - - -

PBT (reported) 70 73 69 81 76 94Tax 18 26 24 30 26 32

(% of PBT) 25.4 35.6 34.1 37.1 34.0 34.0

PAT (reported) 52 47 46 51 50 62 Add: Share of earnings of asso. - - - - - -

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

Prior period items - - - - - -

PAT after MI (reported) 52 47 46 51 50 62ADJ. PAT 47 47 46 51 50 62% chg 13.7 (0.7) (2.4) 11.5 (2.2) 24.1

(% of Net Sales) 6.4 4.6 3.3 3.0 2.6 2.5Basic EPS (`) (Reported) 7.0 6.4 6.2 6.9 6.7 8.4Fully Diluted EPS ( ) 6.4 6.3 6.2 6.9 6.7 8.4% chg 13.7 (0.7) (2.4) 11.5 (2.2) 24.1


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July 29, 2011 10

Balance sheet (Standalone)

Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013ESOURCES OF FUNDSEquity Share Capital 7 7 7 7 7 7

Preference Capital - - - - - -

Reserves& Surplus 485 529 571 618 663 721

Shareholders Funds 493 536 578 625 671 729Minority Interest - - - - - -Total Loans 196 320 513 855 1,172 1,510

Deferred Tax Liability 12 12 10 10 10 10

Total Liabilities 701 868 1,101 1,491 1,853 2,249APPLICATION OF FUNDSGross Block 379 462 491 508 548 618

Less: Acc. Depreciation 131 173 218 265 317 383Net Block 248 288 273 242 230 235Capital Work-in-Progress - - - - - -

Investments 300 373 639 741 852 1,022Current Assets 709 715 753 1,412 1,881 2,323Inventories 114 52 75 195 217 253

Sundry Debtors 92 88 124 560 655 882

Cash 102 85 55 26 271 195

Loans & Advances 401 491 498 631 738 993

Other - - - - - -

Current liabilities 555 508 563 904 1,110 1,331Net Current Assets 153 207 189 508 771 992Misc. Exp. not written off - - - - - -

Total Assets 701 868 1,101 1,491 1,853 2,249


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July 29, 2011 12

Key RatiosY/E March FY2008 FY2009 FY2010 FY2011 FY2012E FY2013EValuation Ratio (x)P/E (on FDEPS) 13.6 13.7 14.1 12.6 12.9 10.4P/CEPS 7.9 7.1 7.0 6.5 6.3 5.1

P/BV 1.3 1.2 1.1 1.0 1.0 0.9

Dividend yield (%) 0.7 0.9 0.5 0.6 0.6 0.6

EV/Sales 1.0 0.9 0.8 0.9 0.8 0.8

EV/EBITDA 6.9 7.1 8.1 8.0 7.6 7.7

EV / Total Assets 1.1 1.0 1.0 1.0 0.8 0.9

Per Share Data (`)EPS (Basic) 7.0 6.4 6.2 6.9 6.7 8.4

EPS (fully diluted) 6.4 6.3 6.2 6.9 6.7 8.4

Cash EPS 11.0 12.2 12.5 13.3 13.8 17.2

DPS 0.6 0.8 0.4 0.5 0.5 0.5

Book Value 66.5 72.4 78.1 84.4 90.6 98.4

DuPont AnalysisEBIT margin 9.9 7.9 6.4 8.1 7.9 7.7

Tax retention ratio 0.7 0.6 0.7 0.6 0.7 0.7

Asset turnover (x) 1.3 1.5 1.5 1.4 1.2 1.3

ROIC (Post-tax) 9.8 7.5 6.4 6.9 6.5 6.8

Cost of Debt (Post Tax) 6.2 6.6 4.0 5.7 5.3 4.9

Leverage (x) 0.2 0.3 0.6 1.1 1.3 1.6

Operating ROE 10.4 7.8 7.9 8.2 8.2 9.8

Returns (%)ROACE (Pre-tax) 10.8 10.3 9.0 10.6 9.0 9.1

Angel ROIC (Pre-tax) 13.1 11.7 9.7 11.0 9.9 10.3

ROAE 10.0 9.1 8.2 8.5 7.7 8.9

Turnover ratios (x) Asset Turnover (Gross Block) 2.2 2.4 2.9 3.4 3.6 4.2

Inventory / Sales (days) 46 29 17 29 40 35

Receivables (days) 59 32 28 73 117 115

Loans and Advances (days) 154 159 130 121 132 130

Payables (days) 215 180 133 146 177 168

W.cap cycle (ex-cash) (days) 36 31 34 66 94 97Solvency ratios (x)Net debt to equity 0.2 0.4 0.8 1.3 1.3 1.8

Net debt to EBITDA 0.9 1.9 3.4 4.5 4.4 5.2

Interest Coverage 4.5 3.0 3.5 2.2 1.9 1.9


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J l 29 2011 13

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

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Angel Broking Limited, 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 Limited 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 Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,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 Limited 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 Limited, 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, pleaserefer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited andits affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Madhucon Projects

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%)

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Madhucon Projects