SBI Capital's Research Report on HSIL

7/29/2019 SBI Capital's Research Report on HSIL

1/12

HSIL Ltd. BUY: Rs 123 Target: Rs 171

Retail Research Sanitaryware

Initiating Coverage 22 November 2012

HSIL Ltd is the largest Sanitaryware manufacturing company in India with organized market share of 40 percent;

in addition it is also the second largest manufacturer of container glass with market share of 20 percent.

In addition to above, HSIL also has presence in faucet segment, tiles, kitchen appliances and have acquired faucet

division, of Havells India 'Crabtree' which was rebranded as Benelave in Jan 2011. HSIL has also acquired 100%

stake in PET bottle manufacturer Garden Polymers Pvt. Ltd.' In Aug. 2011 to synergies with its existing container

glass division. The company is on rapid capacity addition mode across all product categories to maintain its

leadership. We initiate coverage on stock with 'BUY' Rating.

Largest Sanitaryware manufacture in India:

HSIL is the largest sanitaryware manufacturer in India with organized

market share of 40 percent. It offers complete range of products for

bathroom. The company has strong brand name Hindware which iswidely recognized and has strong brand recall. The company has

recently unveiled super premium luxury brand QUEO' from its 100%

subsidiary Barwood Products Ltd. in UK, which was acquired in 2010.

These premium products command much higher realization and

growing at 20-25 percent which faster than mid and low end segment

growth of 12-15 percent per annum.

HSIL plans to garner near 25 percent market share in premium

segment over next few years. The company has strong 2000+

distributors and above 15000 retailers to support its market penetration.

The company presently has capacity to produce 3.5 million pieces

p.a. and has further plans to increase its existing capacity to 5 millionpieces over next two years.

Aggressive Capex Plan:

The company has chalked out Rs600 crore capex plan for building

product and container glass divisions, which is expected to be

completed over next two years, HSIL has already spent Rs415 crore

till date and remaining Rs185 crore to be spend over next 2 years

including Rs100 crore for 2.5 million pieces Greenfield faucet project

in Kaharani, Rajasthan.

We expect company to generate ~Rs260 crore additional revenue

under faucet segment at its full capacity. Besides manufacturedsales, HSIL will also generate additional Rs75-100 crore worth of

revenue from outsourcing. The company has also spent Rs300 crore

to add another 475 TPD container glass capacity at Bhongir in

Andhra Pradesh. The new capacity is already operational and we

expect the benefit to reap in coming quarters.

Investment Rationale

Particulars 2011A 2012A 2013E 2014E

PE (x) 10.4 8.7 7.8 6.0

P/BV (x) 1.2 0.8 0.7 0.6

EV/EBITDA (x) 5.5 6.1 4.9 4.0

EV/Sales (x) 1.0 1.0 0.8 0.7Mcap/Sales (x) 0.7 0.6 0.5 0.4

ROE (%) 11.6 11.4 10.0 11.5

ROCE (%) 12.1 9.7 10.9 12.0

STOCK DATA

BSE Code 500187

NSE Code HSIL

Bloomberg Code HIS IN

52 Week High / Low (Rs.) 246 / 104

Face Value (Rs.) 2

Diluted Number of Shares (Crore.) 6.6

Market Cap. (Rs Crore.) 806

Avg. Yearly Volume (NSE) 117391

SHAREHOLDING PATTERN (%)

FINANCIAL RATIOS

RELATIVE TO SENSEX

RETURNS STATISTICS (%)

Particulars Sept. Jun. Mar. Dec.

FY12 FY12 FY11 FY11

Promoters 51.6 51.6 51.6 51.6

FII 20.5 21.6 20.1 22.6

Other Institution 2.7 2.4 2.6 2.3

Public & Others 25.2 24.5 25.7 23.5Total 100.0 100.0 100.0 100.0

1 M 3 M 6 M 12 M

HSIL (4.2) (1.4) (23.2) (27.5)

Sensex (1.3) 4.2 13.1 9.4

Year Sales EBITDA PBT PAT EPS DPS BV

(Cr) (Cr) (Cr) (Cr) (Rs) (Rs) (Rs)

2011A 1,095.5 206.4 118.2 78.2 11.8 2.5 101.7

2012A 1,462.8 249.8 147.9 93.5 14.2 3.0 146.5

2013E 1,739.3 297.4 159.3 103.5 15.7 3.2 165.8

2014E 2,012.5 354.2 209.0 135.8 20.6 3.4 190.4

FINANCIAL SUMMARY (CONSOLIDATED)

RAJESH GUPTA -Research Analyst

Regd. Office: SBICAP Securities Limited, 191, Maker Towers 'F', Cuffe Parade, Mumbai 400 005

For a list of our branches refer to our website: www.sbicapsec.com

40

75

110

145

Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12

HSIL Ltd Sensex


2/12

HSIL Ltd. Sanitary ware

2 November 22 2012 SBICAP Securities Limited

Second largest in container glass, with strategic presence

HSIL is the second largest container glass manufacturer in India with

organized market share 20 percent. The company presently has two plants

located at Bhongir and Hyderabad in Andhra Pradesh. The plants are

strategically located in the Andhra Pradesh which is also happen to be the

largest consumer of soft drinks, liquor and beers in India.

Beer and liquor industry account for nearly 58 percent of revenue under

container glass division whereas south Indian market forms nearly 2/3rd of

container glass revenue. HSIL has recently added another furnace of 475

TPD at Bhongir plant in Andhra Pradesh to take its total capacity to 1600

TPD from earlier 1125 TPD. The new plant is already operational since

May 2012 and we expect full benefit to be accrued during FY13.

We expect this division to contribute incremental revenue of ~Rs230-260

crore at its full capacity.

CONTAINER GLASS CAPACITIES

Plants Current Expansion Total

Capacity (tpd) (tpd) Capacity (tpd)

Hyderabad (AP) 650 - 650

Bhongir (AP) 475 475 950

Total 1125 1600

Source: Company

The strategic acquisitions to create overall positive business synergies

The company in the year 2010 acquired the faucet division of Havells India

Crabtree' and which was later on rebranded it as Benelave' in Jan. 2011.

The present capacity of 5 lakh pieces is expected to reach 3 million by

FY14.

The company has acquired PET bottle manufacturer Garden Polymers

Pvt. Ltd.' for Rs87 crore to synergies with its existing container glass

division. PET bottles are increasingly finding applications in water, pharma,

beverages packing etc.

In addition HSIL also acquired UK based Barwood Products Ltd. for

Rs~6.22 crore in June 2010 and recently unveil super premium brand

QUEO' in sanitaryware and faucet divisions. All these acquisitions are

expected to yield positive business synergies for the respective business

verticals.

~ Acquired the faucet division of

Havells India Crabtree' and has

rebranded it as 'Benelave'

~ Acquired PET bottle manufacturer

Garden Polymers Pvt. Ltd.' for Rs~87

~ Acquired UK based Barwood

Products for Rs~6.22 crore and

recently unveil premium brand

QUEO'

~ HSIL is the second largest container

glass manufacturer in India with

organized market share 20 percent.


3/12


SBICAP Securities Limited November 22, 2012 3

Home furnishing business to turnaround by 2015

The company entered the home interior fashion design retail industry

through its 100% subsidiary Hindware Home Retail Pvt. Ltd'.(HHRRL) in

2008. It provides specialty home furnishing products and solutions under

its brand EVOK'. This division has reported a turnover of Rs66 crore along

with EBITDA and Net Loss of Rs10 and 17 crore respectively due to high

fix overheads during FY12.

The company presently operates 18 stores and plans to add another 6

stores during FY13E and further 5 each in FY14E and FY15E. The

company expects home furnishing division to turn around by FY15. HSIL

to spend Rs2-2.5 crore per stores which entails total capex of Rs15-18

crore during FY13E.

In addition to above, HSIL has also entered into tiles business in July

2010. Its focus would be in mid and high segment. The current industry

size is Rs14,000 crore and growing at 10-12 percent due to rapidurbanization especially in tier two and tier three cities

Attractive industrial outlook

India is the second largest sanitaryware market by volume in Asia Pacific

with an estimated market size at Rs2000 crore of which nearly 60% is

organized, where HSIL has 40 percent market share. This industry is

growing at 15-16 percent pa.

In India only 40 percent of households have access to safe sanitation

facilities with 90 percent is fresh demand as compared to developed

economies which accounts for 80 percent as replacement demand.

India's container glass industry is estimated at Rs~4000 crore and growing

at 10-12 percent. The freight cost is critical for container glass and HSIL

is strategically present in Andhra Pradesh which is the largest market for

Beer, Liquor, Soft drinks etc. The per capita consumption of Beer in India

is just 1.5 liters as compared to double digit in most of developing and

developed economies.

Indian faucet industry is estimated at Rs~4000 crore of which 45 percent

is organized and rest is unorganized. Major players are Jaquar, Parry,

Marc etc. With its rapid capacity expansion, HSIL is targeting to generateRs350-400 crore of revenue under faucet segment in two years from date

of commissioning on of Kaharani faucet plant.

Valuation:

At current price of Rs123, the stock is trading at 7.8x and 6.0x of its FY13E

and FY14E consolidated earnings respectively whereas on P/BV front the

same is available at 0.7x and 0.6x respectively. The recent capacity

expansions across different segments like Container Glass, Faucet and

Sanitaryware to reap the benefits in coming quarter. Apart from that, new

plant at Gujarat is also expected to get gas supply form GSPL which wouldboost EBITDA margin going ahead. We recommend a buy on the stock

with price target of Rs171 valuing 8.3x of its FY14 consolidated

earnings.

~ Home Furnishing provides specialty

home furnishing products and

solutions under its brand 'EVOK'

~ The company presently operates

18 stores and plans to add another 6

stores during FY13E and further 5

each in FY14E and FY15E.

~ The sanitaryware market estimated

at Rs2000 crore growing at 15-16

percent

~ India's container glass industry is

estimated at Rs~4000 crore and

growing at 10-12 percent.

~ Indian faucet industry is estimated

at Rs~4000 crore of which 45 percent

is organized and growing at 15-20percent PA.


4/12



Company Background & Business Model:

HSIL Ltd is over 5 decades old, largest sanitaryware company in India with

organized market share of over 40 percent. The company initially

incorporated as Hindustan Twyfords Ltd in collaboration with Twyfords of

UK and later it was renamed as Hindustan Sanitaryware & Industries Ltd

in 1967 and further it was renamed as HSIL Ltd. in 2009. In addition tosanitaryware, HSIL also entered into container glass business with an

acquisition of Associated Glass Industries Ltd in 1981 and presently it is

the second largest container glass manufacturer in India with market share

of 20 percent and 60 percent in Southern India

In addition to above, HSIL also has presence in faucet segment and has

acquired faucet division of Havells India 'Crabtree' in 2010 which was

rebranded as Benelave in Jan 2011. The company has also entered into

tiles segment in July 2010 and has home furnishing business through its

100% subsidiary Hindware Home Retail Pvt. Ltd' under the brand EVOK.

The company presently operates 18 exclusive retail stores and plans to

add another 6 stores during FY13E and further 5 each in FY14E and

FY15E.

The business of the company is broadly classified in to two parts viz

building product and container glass. It is also into PET bottles and Home

furnishing through its 100% subsidiries viz. Garden Polymers Pvt. Ltd. and

Hindware Home Retail Pvt. Ltd. respectively.

HSIL Ltd.

Building Product Division

Sanitaryware (Capacity 3.5 Mn Pcs. pa.)

Brands

~ Premium- Hindware Italian,Hindware Art

~ Standard- Hindware Art & Hindware

~ Basic - Raasi

~ Super Premium - Queo

Faucet (Capacity 0.5 mn Pcs. pa.)

Brands

~ Premium Benelave

~ Standard Benelave

~ Hindware

~ Queo

Other allied products (Outsourced)

~ Tiles

~ Kitchen Appliances

~ Wellness Products

Container Glass 1600 MT (TPD)

~ Operating with plants in Andhra Pradesh,Sanathnagar and Bhongir

~ Recently added 475 MT capacity at Bhongir

~ Supplies to diversified clients across food &beverages, pharma, Liquor & Beers industries

PET Bottles

~ Acquired Garden polymer for Rs87 crorein FY12

~ Current capacity is 8000 MTPA

~ Garden Polymers Pvt. Ltd. is the 4thlargest PET bottle manufacturers in India

~ The product offering will be extended toPET bottles, caps and closures etc

Hindware Home Retail

Pvt Ltd

~ End to End services in homefurnishing

~ Having 18 stores and plansto add 6 in FY13

~ Mainly sales furniture

~ Currently loss making and

expected to turnaroundin next few years


5/12



Building Material Products:

The Building Product division of HSIL consists of diversified product

portfolio of Sanitaryware, Faucets, Kitchen Appliances, Wellness Products

and Tiles. The company has entered into a strategic alliance with one of

the largest European companies, manufacturing extractor fans under the

brand name, Vent'. HSIL offer 20 designs of consumer fans and 2 designs

of industrial fans

This division contributes nearly 45% to total revenues in FY12. The

company has unveiled luxury brand QUEO' from its wholly owned subsidiary

Barwood Products Ltd which was acquired in June 2010, these premium

products segment growing faster and has better realization.

HSIL is also involved in export of sanitaryware and bathroom fittings to its

100+ satisfied (B2B) customers across 40 countries like Pacific Island, UK,

Middle East, Africa, New Zealand Australia, Russia and more. The companygenerates nearly 26 percent of revenue from institutional sales whereas

rest is from retail sales. The company has 21 depots, 15000+ retail

networks, 2000+ dealers and 1235 strong institutional clients to support its

business.

Building Product Units Before Expansion Total Capacity

Division Expansion Post Expansion

Sanitary Products

Bahadurgarh (Har) Mn Pieces 1.5 0.3 1.8

Bibinagar (AP) Mn Pieces 1.3 0.7* 2.0

Gujarat (Greenfield) Mn Pieces - 1.2 1.2

Total 2.8 2.2 5.0

Faucet

Bhiwadi- Rajasthan Mn Pieces 0.3 0.2* 0.5

Kaharani- Rajasthan Mn Pieces - 2.5 2.5

(Greenfield)

Total 0.3 2.7 3.0

* A lready completed

~ The company has 21 depots,

15000+ retail networks, 2000+

dealers and 1235 strong institutional

REVENUE CONTRIBUTION (%) IN FY12

Source: SBICAP Securities Research / Company

Sanitaryware

Wash basins

Water Closets

Cisterns

Bidets

Faucets

Tap

Showers

Flush Valves

Manufactured Outsourced

Kitchen App

Microwave Owens

Chimney

Cooktops

Built in Ovens

Wellness

Steam rooms

Bath Tubs

Shower Enclosures

Shower Panels

Tiles

Floor

Wall

Sanitaryware

&

Faucets

5545

Building Product Container Glass


6/12



Container Glass

HSIL is the second largest manufacturer of container glass in India with

organized market share of 20% and 60% in Southern India. The division

caters to pharmaceutical, food, beverage and liquor & beer industry. It

contributes nearly 55% to HSIL's total revenue in FY12. Following the

acquisition of Garden Polymers for Rs87 Cr, its product offerings have

been extended to PET bottles, caps and closures, offering one more

packaging solution besides container glass bottle and shall contribute to

the overall revenues.

The company presently has two plants located at Bhongir and Hyderabad

in Andhra Pradesh. The plant is strategically located in the Andhra

Pradesh which is also happen to be the largest consumer of soft drinks,

liquor and beers in India.

Beer and liquor industry account for nearly 58 percent of revenue undercontainer glass division whereas south Indian market forms nearly 2/3rd of

container glass revenue. HSIL has recently added another furnace of 475

TPD at Bhongir plant in Andhra Pradesh to take its total capacity to 1600

TPD from earlier 1125 TPD. The company has strong 490+ institutional

clients mainly from southern parts and south.

Home Furnishing

It has also forayed into home interiors by floating a 100% subsidiary

company Hindware Home Retail Pvt Ltd which provides end to end

solutions for home interiors through its retail format store under the brand

name EVOK.

Key Clientele


The 3C Company Ansal Group DLF

Emaar MGF Godrej Properties Indiabulls

Jaypee Larsen & Toubro M2K

Mahindra Lifespaces Marriott NBCC

Oberoi Realty Omaxe Parsvnath Developers

Prestige Puravankara Shapoorjee Pallonjee

TATA Projects Unitech TDI Vipul

Container Glass Division

Abbott Healthcare Apex Laboratories Carlsberg India

Dr. Reddy's Lab. Global Green Co. GSK Con. Healthcare

GSK Pharma Hind. Coca-Cola Hindustan Unilever

Jagatjit Industries John Distilleries Nestle India

Pernod Ricard India Pepsico India PfizerRadico Khaitan Reckitt Benckiser SAB Miller India

Tilaknagar Industries United Breweries United Spirits

~ The company has two plants

located in Andhra Pradesh having

combine capacity of 1600 TPD.

~ The company has 1235+

institutional clients in building product

division and 490+ institutional clients

in container glass division


7/12



Industrial Opportunity:


Overall sanitaryware industry divided into 60 percent organized and rest unorganized, HSIL has 40 percent market

share within organized market. Indian sanitaryware Industry is pegged at Rs2000 crore growing at 15-20 percent

within which premium segment growing faster at 20-25 percent per annum due to rapid urbanization, improving

living standard and rising awareness.

According to census data, only 47 percent of Indian household have proper sanitation facilities and around 69%

of rural and 19 percent of urban household still do not enjoys basic sanitation facilities.

Government of India increasing expenditure sanitation every year and as per the planning commission report

estimated Rs~44000 crore will be spend during 12th plan.

The demand for sanitaryware basically comes from two segments viz new demand and replacement demand with

bulk (~90 percent) forms new and rest account for replacement demand. Unlike in India, the US sanitarywaredemand is driven by replacement (~80 percent) and rest from new demand.

% OF POPULATION DOES NOT HAVE BASIC SANITATION

Source: WHO, Unicef, 2012

SANITATION LEVELS IN VARIOUS COUNTRIES

Source Crisil

Demand drivers

The correlation between sanitaryware and housing

demand is as high as 93 percent. The present urban

population account for nearly 29 percent which is

expected to reach 37 percent by 2025. With such rapidurbanization, the urban housing demand is expected to

increase ~3 percent CAGR from 74 mn units to 85 mn

units between 2011 and 2016

In addition to above, the middle class population is also

expected to touch 585 million by 2025 The consumer

is moving up from mid segment to premium segment

sanitaryware due to changing life style and rising

disposable income.

URBAN HOUSING DEMAND (MN UNITS)

Source Crisil

4050

63 66

9095

0

30

60

90

120

India China Korea Indonesia S.Lanka Thailand

3

34

4 419

3132

India

China

Nigeria

Indonesia

Pakistan

Bangladesh

Euthopia

Rest of the world


8/12



Container Glass

World packaging industry pegged at $500 billion and India occupies 11th position. Glass packaging accounts for

nearly 12 percent of overall packaging space.

The current estimated size of glass industry is Rs~4000 crore which is growing at 10-12 percent PA. The per capita

consumption of glass is 1.5 kg as compared to 89 kg in South Korea, 10.2 kg in Japan and 5.2 kg in China.

The key drivers like Liquor and Beer industry which is the largest consumer of container glass is expected to grow

at 14-15 percent. The per capita beer consumption in India is just 1.5 liters as compared to China and Brazil at

34 and 64 liters respectively.

In Addition to above, the other key driving industries like Pharmaceuticals, Foods & Beverages are also expected

to grow in double digit over next few years.

RISING MIDDLE CLASS POPULATION

Source: Santo Investment Bank Research

RATE OF URBANIZATION (%)

Source: United Nations State of the World population, 2011

INDIAS PACKAGING INDUSTRY (%)

Source: Crisil

PER CAPITA GLASS CONSUMPTION (KGS)

Source: Crisil

9380

5436

22

618

41

43

36

1 2 419

32

0 1 2 90

0%

18%

36%

54%

72%

90%

108%

1985 1995 2005 2015 2025

Lower Lower Middle Middle Upper Middle Upper

29 27

4048

65 66 69

81

0.0

25.0

50.0

75.0

100.0

India

Vietnam

China

Indonesia

Malasiya

Japan

USA

Korea

89

64

50

28 2820

10 6 5 2 1

-

20

40

60

80

100

South

Kor

ea

Fran

ce

SpainUK

USA

Mex

ico

Jap

an

China

Bra

zil

India

Indonesia

8

146 3 12

18

2217

Glass Rigid Plastics Flexible Packaging

Printed Cartoon Metal Cans Others

Caps & Closure Labels


9/12



Financials & Valuations:

We expect HSIL's consolidated net sales and profit to

grow at 17 and 21 percent CAGR to Rs2013 and Rs136

crore respectively between 2012A and 2014E, within

total sales, building product division to grow at 21

percent CAGR and container glass segment to grow at15 percent CAGR to Rs911 and Rs950 crore respectively.

We expect EBITDA margin to improve between 50-100

bps owing to new faucet plant which will boost the

share of manufactured faucet products.

The consolidated operating profit is expected to grow at

19 percent CAGR between 2012A and 2014E to Rs354

crore whereas the margin is expected to stabilize at 17-

18 percent level.

The net margin is expected to improve by 100-200 bps

due to lower interest on debt as majority of its debts are

in the form of ECB loans which are at LIBOR+250-300

bps making the effective cost of debt at 9.2 percent on

fully hedge basis.

At current price of Rs123, the stock is trading at 7.8x

and 6.0x of its FY13E and FY14E consolidated earnings

respectively whereas on P/BV front the same is availableat 0.7x and 0.6x respectively. The recent capacity

expansions across different segments like Container

Glass, Faucet and Sanitaryware to reap the benefits in

coming quarter. Apart from that, new plant at Gujarat is

also expected to get gas supply form GAIL which would

boost EBITDA margin going ahead. We recommend a

buy on the stock with price target of Rs171 valuing

8.3x of its FY14 consolidated earnings.

NET SALES (Rs. Cr.) & NET SALES GROWTH (%)

Source: SBICAP Securities Research

EBITDA (Rs. Cr.) & EBITDA MARGIN (%)


-

75.0

150.0

225.0

300.0

375.0

FY11A FY12A FY13E FY14E

-

5.0

10.0

15.0

20.0

EBITDA (Rs Cr) EBITDA Margin (%)

INDIAS PACKAGING INDUSTRY (%)

Source: Crisil

PER CAPITA GLASS CONSUMPTION (KGS)

Source: Crisil

Net Sales (Rs Cr)

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0


-

45.0

90.0

135.0

180.0


5.5

6.0

6.5

7.0

7.5

Adjusted Net Profit (Rs Cr) Net Profit Margin (%)

0

5

10

15

20


Div. Yield (%) Earning Yield (%)


10/12



1 YEAR ROLLING FORWARD PE


AVERAGE PE MULTIPLE


1 YEAR ROLLING FORWARD P/BV


AVERAGE P/BV MULTIPLE


0

4

8

12

16


ROE (%) ROCE (%)

-

75.0

150.0

225.0

300.0

375.0

Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Mar-12 Oct-12

Close Price 5.0x 7.5x 10.0x 12.5x

-

4.0

8.0

12.0

16.0


Daily PE Average PE 1+SD

1+2SD 1-SD 1-2SD

-

70.0

140.0

210.0

280.0


Close Price 0.5x 0.8x 1.0x 1.3x

-

0.4

0.8

1.2

1.6

2.0


Daily P/BVPS Avg.P/BV 1+SD

1+2SD 1-SD 1-2SD

ADJUSTED NET PROFIT (Rs. Cr.) & NET PROFIT MARGIN (%)


DIV. YIELD (%) & EARNING YIELD (%)


0

10

20

30

40


EPS (Rs.) Cash EPS (Rs.)


11/12



Financial Statements (Consolidated):

Income Statement Figures in Cr.


Gross Sales 1,169.5 1,566.5 1,862.2 2,154.7

Excise Duty 74.0 103.7 122.9 142.2

Net Sales 1,095.5 1,462.8 1,739.3 2,012.5Other Income 3.7 5.1 7.0 8.0

Total Income 1,099.2 1,467.9 1,746.3 2,020.5

Total Expenditure 889.2 1,213.0 1,441.9 1,658.3

Raw Material Consumed 327.8 474.1 554.8 631.9

As % of Sales 29.9% 32.4% 31.9% 31.4%

Other Operating Cost 561.4 738.9 887.0 1,026.4

As % of Sales 51.2% 50.5% 51.0% 51.0%

EBDITA ( Excl OI) 206.4 249.8 297.4 354.2

EBDITA ( Incl. OI) 210.0 254.9 304.4 362.2

Interest 36.4 42.0 69.3 65.8

PBDT 173.6 212.9 235.1 296.5

Depreciation 55.4 65.1 75.8 87.5

PBT 118.2 147.9 159.3 209.0

Tax 39.9 54.1 55.7 73.1

Net Profit 78.3 93.7 103.5 135.8

Extra-ordinary Item (0.2) (0.2) - -

Adjusted PAT 78.2 93.5 103.5 135.8

Equity 13.2 13.2 13.2 13.2

EPS 11.8 14.2 15.7 20.6

Cash EPS 20.2 24.0 27.2 33.8

FV 2.0 2.0 2.0 2.0

BVPS 101.7 146.5 165.8 190.4


Equities & Liabilities

Equities & Liabilities 2011A 2012A 2013E 2014E

Share capital 13.2 13.2 13.2 13.2

Reserves and surplus 658.7 954.2 1,082.2 1,244.1

Total Shareholder's Fund 671.9 967.4 1,095.4 1,257.3

Non-current liabilities

Long-term borrowings 288.2 541.8 494.2 452.9

Other Non-Current Liabilities 87.8 94.7 104.3 110.8

Current liabilities 327.2 674.1 733.8 800.6

Total Liabilities 1,375.1 2,278.0 2,427.7 2,621.6

Assets

Net Fixed Assets 837.8 1,472.2 1,560.4 1,571.9

Goodwill on consolidation 3.5 57.8 57.8 57.8

Non-current investments 10.8 10.8 10.8 10.8

Long-term loans and advances 38.3 62.1 59.1 80.5Other non-current assets 6.0 7.3 8.7 10.1

Current Assets

Inventories 222.3 305.9 316.0 386.2

Trade receivables 163.7 244.0 262.1 330.8

Cash and bank balances 21.9 73.5 90.3 91.4

Other Current Assets 70.8 44.3 62.4 82.1

Total Current Assets 478.7 667.7 730.8 890.5

Total Assets 1,375.1 2,278.0 2,427.7 2,621.6

Balance Sheet Figures in Cr.

Cash Flow Statement Figures in Cr.


PBT 118.2 147.9 159.3 209.0

Depreciation 55.4 65.1 75.8 87.5

Interest (Net) 36.4 42.0 69.3 65.8

Direct Taxes Paid (40.1) (54.1) (55.7) (73.1)

Change in WC (17.5) (29.6) 10.6 (117.5)

CF from operating activities 152.5 171.1 259.2 171.6

(Inc.) / Dec. Capex (106.4) (669.8) (164.0) (99.0)

Free Cash Flow 46.0 (498.7) 95.2 72.6

(Inc.) / Dec. in Investment (24.0) 24.6 0.0 -

CF from in vstg. activities (130.4) (645.2) (164.0) (99 .0)

Issue of Shares 150.0 - - -

Change in Debt (87.0) 445.4 (41.7) (36.8)

Interest Paid (36.4) (42.0) (69.3) (65.8)

Dividend (19.2) (23.0) (24.5) (26.0)

Other Adjustment (Net) (32.2) 145.2 57.1 57.1

CF from financing activites (24.8) 525.6 (78.4) (71.5)

Net Change in cash (2.8) 51.5 16.8 1.1

Opening Balance 24.7 21.9 73.5 90.3

Closing Balance 21.9 73.5 90.3 91.4

Important Ratios:

A Growth (%) 2011A 2012A 2013E 2014E

Net Sales 36.2 33.5 18.9 15.7EBITDA 55.5 21.1 19.1 19.1

PBT 107.8 25.1 7.7 31.2

PAT 63.7 19.7 10.7 31.2

Cash Profit 36.2 18.8 13.1 24.5

(B) Measures of Performance

Operating Profit Margin (%) 18.8 17.1 17.1 17.6

Gross Profit Margin (%) 15.8 14.6 13.5 14.7

Total Tax Rate (%) 33.7 36.6 35.0 35.0

Net Profit Margin (%) 7.1 6.4 6.0 6.7

(C) Measures of Financial Status

Debt / Equity (x) 0.5 0.8 0.7 0.6

Net Debt / Equity (x) 0.4 0.7 0.6 0.5

Debtors Period (days) 54.6 50.9 55.0 60.0Creditors Period (days) 35.2 31.2 35.0 33.0

Inventory Period (days) 91.3 79.5 80.0 85.0

(D) Measures of Investment

EPS (Rs) 11.8 14.2 15.7 20.6

Book Value (Rs) 101.7 146.5 165.8 190.4

Earning Yield 9.6 11.5 12.7 16.7

ROA (%) 5.7 5.1 4.4 5.4

Return on Net Worth (%) 11.6 11.4 10.0 11.5

Return on Cap. Employed (%) 12.1 9.7 10.9 12.0

Iinterest Coverage (x) 4.2 4.5 3.3 4.2

(E) Measures of Valuation

P/E (x) 10.4 8.7 7.8 6.0

M. Cap to Sales (x) 0.7 0.6 0.5 0.4EV/Sales (x) 1.0 1.0 0.8 0.7

EV/EBDITA (x) 5.5 6.1 4.9 4.0



12/12


Name Designation

Alpesh Porwal SVP & Head (Retail)

Rajesh Gupta Research Analyst

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