Vivimed Labs Ltd

Vivimed Labs Ltd.

BUY

Target Price ` 468 CMP ` 343 FY14 PE 5.5x

Index Details We initiate coverage on Vivimed Labs Ltd as a BUY with a Price Sensex 18,154 Objective of ` 468 (target 7.5x FY14 EPS). At CMP of ` 343, the stock is Nifty 5,522 trading at 6.0x and 5.5x its estimated earnings for FY13 & FY14 representing a potential upside of ~36% over a period of 24 months. BSE 100 9,568 Vivimed Labs Ltd is a diversified global company with a unique Industry Pharma portfolio of products in the Specialty Chemicals and Pharmaceuticals

categories. Niche product portfolio in specialty chemicals coupled with Scrip Details significant inorganic growth through its recent acquisitions in the Mkt Cap (` cr) 348 pharma space should help the company post an earnings growth of BVPS (`) 194 31.7% CAGR over the period FY11 to FY14.

O/s Shares (Cr) 1.4  Niche product portfolio and expansions to drive future growth AvgVol Lacs) 0.7 52 Week H/L 354/213 The matured Home and Personal care (H&PC) global markets are expected to Div Yield (%) 0.6 grow at CAGR of 3.2% to USD 368 bn by 2015 while in India the H&PC markets are expected to grow at a faster pace of 12.2% to USD 8 bn by 2015. Vivimed FVPS (`) 10.0 being well embedded as a global quality supplier of active ingredient to the H&PC industry is best placed to benefit from this growth. We expect Vivimed’s overall Shareholding Pattern revenues to grow at a CAGR of 39.9% to ` 1139.9 crore over the forecast period of Shareholders % FY11-14 with 50.0% of the revenues coming for the specialty chemicals product portfolio and the balance from the capacity expansions and inorganic growth in the Promoters 43.6 pharmaceutical space. DIIs 1.6 FIIs 18.2  Recent acquisitions to fuel revenue growth

Public 36.6 STOCKPOINTER In a strategic move, to enhance presence across the value chain and hasten entry Total 100 to the regulated markets (which generally has a 36-48 months penetration lead time), Vivimed acquired Uquifa, a 75 year old API and intermediates manufacturing Vivimed vs. Sensex company. Considering Vivimed’s, strong track record of successful acquisitions, we expect the company to effectively leverage these acquisitions and add value. Besides Uquifa, Vivimed has also acquired two small formulation companies Klar Sehen Pvt Ltd & Octtantis Nobel Labs for a consideration of ` 24 crore and ` 5 crore, respectively. These acquisitions would help Vivimed reduce costs by achieving manufacturing synergies and expand sales and profitability by increasing market and client penetration. We expect, Vivimed to earn revenues to the tune of ` 352 crore in FY14 from these acquisitions.

Key Financials (` in Cr) Net EPS Growth RONW ROCE EV/ Y/E Mar EBITDA PAT EPS P/E (X) Revenue (%) (%) (%) EBITDA(X) 2011 416.0 84.1 48.8 48.0 - 24.8 16.4 7.1 11.9 2012E 636.2 126.5 58.9 42.3 -12.0 13.0 14.8 8.1 7.9 2013E 982.1 176.7 91.6 57.1 35.0 16.9 16.6 6.0 5.7 2014E 1139.9 205.5 111.6 62.4 9.3 17.2 17.5 5.5 4.9

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 Significant entry barriers to ensure limited competition leading to sustainability of revenues

In the active ingredients market where product quality has precedence over price, becoming a preferred supplier to global majors is a strenuous and prolonged process. Vivimed with its quality offering has established strong relationships with global majors and over time has embedded itself within these multinationals and now is a supplier across a wide range of products.

 Valuation

At the CMP of ` 343, Vivimed is trading at 6.0x and 5.5x its estimated earnings for FY13 and FY14. We initiate coverage on Vivimed Labs Ltd as a BUY with a Price Objective of ` 468 (7.5x FY14 EPS) over a period of 24 months.

We have valued the stock at 36% premium to its historical average valuation of 5.5x considering the robust product portfolio and the recent acquisitions. Vivimed’s earnings are expected to grow at a 31.7% CAGR over the forecast period FY11-14 which is far ahead of the sector’s growth. Post the integration of the acquisitions, we expect Vivimed to be re-rated considering its enhanced global presence and broadened product portfolio. Though, mounting debt remains an overhang on the stock.

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 Company background

Vivimed was established in 1989 as a single product (VIV-20) and single location company. Since then the company has grown by leaps and bounds to emerge as a preferred supplier of several key ingredients to MNCs in the specialty chemicals & pharmaceutical segments.

In the specialty chemical division, Vivimed is engaged in the manufacturing and marketing of active ingredients within the Home & Personal Care products, and Industrial care products. While, in the pharmaceutical division, the company provides contract manufacturing services as well as undertakes manufacturing and marketing of branded formulations. In addition, Vivimed through timely acquisitions of James Robinson, Harmet International as well as the recent acquisition of Uquifa, has maintained its growth trajectory as well as further enhanced its presence in the global markets.

Vivimed Labs- Business Organization

VIVIMED LABS

Specialty Pharmaceuticals Chemicals

CRAMs Formulations APIs Active Industrial Ingredients Care

Uquifa Vivimed Labs India Prod.,Sales and (Prod, Dist & R&D) Marketing Klar Sehen Prod & Marketing Vivimed Labs (Marketing &Distribution)

Creative Healthcare Octtantis Nobel Vivimed Labs UK (Prod & Dist) Distribution (Sales, Marketing and R&D)

Vivimed Labs USA (Production, Sales and R&D)

Source: Vivimed, Ventura Research

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Headquartered in Hyderabad, Vivimed operates out of 9 manufacturing facilities (6 domestic and 3 overseas), 3 R&D facilities (1 domestic and 2 overseas). It has a customer base spread across 50 countries with SBUs based in America (Vivimed Labs USA Inc) and Europe (Vivimed Labs Europe) along with a marketing office in China.

Manufacturing Plants of Vivimed Labs

Plant Location Manufacturing Details Bidar Northern Karnataka Specialty Chemicals Sunscreens, Anti Microbial and Preservatives Bonthapally Hyderabad Specialty Chemicals Home & Personal Care actives Jeedimetla Hyderabad Formulation and R&D Dosage formulations Haridwar Uttarakhand Formulations Sterile products - Small Volume Parentals Kashipur Uttarakhand Formulations Non-Sterile Syrups, tablets, Capulses and dry powders.

Cuernavaca Mexico APIs Acquired through Uquifa Acquisition

Sant Celoni Spain APIs Acquired through Uquifa Acquisition Llica de Vall Spain APIs Acquired through Uquifa Acquisition Chouttuppal* Hyderabad Formulations Tablets & Capsules Srikakulam** AP SEZ Synthetic organic chemicals Source: Vivimed, Ventura Research

 Niche product portfolio and expansions to drive future growth

The matured Home and Personal Care (H&PC) global markets are expected to grow to USD 368 bn by 2015 while the Indian H&PC markets are expected to grow at a faster pace of 12.2% to USD 8 bn by 2015. Vivimed being well embedded as a global quality supplier of the active ingredient to the H&PC industry is best placed to benefit from this growth. We expect Vivimed’s overall revenues to grow at a CAGR of 39.9% to ` 1139.9 crore over the forecast period of FY11-14 with 50.0% of the revenues coming for the specialty chemicals product portfolio and the balance from the capacity expansions and inorganic growth in the pharmaceutical space.

Revenue and Profitability trend

Rs. Crore (%) 1200 25%

Triclosan Triclosan CaGp 1000 20% Triclosan CaGp Avobenzone 800 CaGp Avobenzone Climbazole Ben 4 Triclosan Avobenzone Climbazole 15% TCC Triclosan CaGp Ben 4 Starcat Triclossan 600 Climbazole CaGp Avobenzone TCC ZnPTO CaGP Ben 4 10% Avobenzone Climbazole TCC Starcat SAP* 400 ZnPTO 200 5%

0 0% FY10 FY11 FY12E FY13E FY14E

Revenue EBIDTA Margin(%) PAT Margin(%)

Source: Vivimed, Ventura Research Avis

Ben-4 Avis Dantuff-z Avis Avis Ben-4 Ben 4 Ben 4 Dantuff-z Etone Etone Co-Guars Vivinol - 4 of 16 - Thursday 16th Feb, 2012

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Presence in North- East, Bihar & AP 150 MRs Strong Distribution Reach

KSPL

Octtantis 50 Trade Nobel Labs

 Specialty chemical business - a major contributor to growth

Led by ` 25 crore worth of expansions at its existing two specialty chemical plants, we expect the specialty chemical division to grow at a three year CAGR of 21.7% to ` 570.3 crore by FY14. Vivimeds portfolio of active ingredients caters to nearly 75% of the global H&PC market (USD 268 bn, 3.2% CAGR) and with these enhanced capacities the company is expected to benefit immensely.

Specialty Chemicals-Revenue and EBITDA Margin

Rs. Crore (%) 600 25

500 20 400 15 300 10 200

100 5

0 - FY11 FY12E FY13E FY14E

Revenue EBIDTA Margin RHS (%)

Source: Vivimed, Ventura Research

H&PC Products dominates the specialty segments business

1% 2% 1%

Hair Care 6% Pharmace Antimicrobles 6% 26% uticals Sun Care 22% Intermediaries 9% Oral Care Photohromics 13% Other Chemicals Specialty 18% Imaging Chemicals 78% Skin Care 18% Preservatives

Source: Vivimed, Ventura Research

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Robust Industry growth to support revenue growth Global Personal Care Market Domestic Personal Care Ingredient Market

USD mn USD bn 900 400 368 800 341 354 350 315 328 800 291 303 300 280 700 250 600

200 500

150 400 350

100 300

200 50 100 0 2008 2009 2010 2011 2012 2013 2014 2015 0 2009 2015

Source:Vivimed,Ventura Research Source:Vivimed,Ventura Research

Global Personal Care Ingredient Market Global Personal Care Ingredient Market Breakup

USD bn Oral Others 20 Care 6% 9% 15 15

10 10 Skin care Hair 50% 5 Care 35%

0 2009 2015

Source:Vivimed,Ventura Research Source:Vivimed,Ventura Research

James Robinson acquisition - complete portfolio offering in the Hair care segment.

Vivimed’s product portfolio is dominated by the products in the Sun Care, Hair Care and Anti microbial segments. Post the acquisition of James Robinson’s, Vivimed has a complete portfolio of Hair Care products catering to each sub segment of Shampoos, Conditioners, and Hair Dyes. Vivimed also has a tie up with International Specialty Products (ISP) for the joint marketing of various sunscreen products thus expanding its base in Sun Care segment.

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Product portfolio in Home & Personal Care

Divisions Products Description & End Uses Key Clients

VIV-20 Antibacterial For Toothpastes & Mouthwash Unilever, VIVCAL-G Nutraceutical, Dental enamel protection Oral Care P&G, Dabur, VIVHEX Antibacterial for Mouthwash BDF VIVHEX-G Antibacterial for Mouthwash AVIS Broad Spectrum UV-A Filter CINNAMON UV- B Category 1 Filter Unilever, BEN-3 Oil Soluble UV-A & UV -B Filter Sun Care P&G, L'Oreal,

Ben-4 Water Soluble UV-A & UV -B Filter BDF OCTYNE-B Oil Soluble UV- B Filter ETONE UA-A & UV- B Filter VINTOX Anti-Oxidant & Anti-aging Molecule VIVINOL Skin Lightening agent BASF, Skin Care TRU ALOE Skin Moisturizer Sederma C-VITE Anti Wrinkle DANTUFF-Z Broad Spectrum Anti Dandruff agent DANTUFF-C Anti-Fungal agent in transparent Shampoos DANTUFF-K Anti dandruff & Anti-Fungal agent Hair Care Unilever, ITC, VIPIROX Anti dandruff agent Dabur VIVIDINE Hair growth agent CO-GUAR Emollients & Conditioners COSVAT Anti-Fungal & Anti bacterial Preservatives VIVILIDE Wide Spectrum bacteriostatic Unilever, VIVMAX Antimicrobial & Germicidal Antimicrobials BASF, J&J VIV-20 Antibacterial For Cosmetic & Toiletries

Source: Vivimed, Ventura Research

 Industrial segment to complement growth in H&PC

In addition to Home & Personal Care segment, Vivimed caters to the Industrial Segment with products in photo chromatic dyes and imaging chemicals. In the photo chromatic segment, Vivimed is a world leader in the development of innovative photo chromic dyes manufactured and marketed under the name of Reversacol.

Product Portfolio in Industrial Care

Category Key Products Description End Uses Key Clients Photochromic Lenses, toys, films, Clothes, Keystone, Corning, Reversacol Patented high Performance dyes Dyes Cosmetics like nail Varnish Mildex Optical

Phenidone Black and White development agent Imaging Dimezone Black and white developing agent Anti- X-rays, Photography Kodak, Fuji, LG Chemicals Nitroindazole fogging agent Source: Vivimed, Ventura Research

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 SEZ facility on the cards Vivimed is also establishing a SEZ in Andhra Pradesh at a cost of ` 120 crore to cater to the growing export demand of synthetic organic chemicals in the H&PC segment. In addition, the company is expanding its product base by foraying into new segments with the development of a Skin lightening ingredient and chemicals for Printed Electronics. Since the SEZ is expected to commission post FY14, we have not factored these in our revenues.

 Product portfolio and expansions in Pharma to further enhance value

Vivimed has a wide range of formulation products across therapeutic segments with significant presence in CRAMs.This segment is poised for major growth fuelled by capacity expansions and acquisitions. Vivimed is setting up a green field plant in Hyderabad, at an investment of ` 40 crore and is undertaking some de-bottlenecking exercises at its existing Jeedimetla plant. Further the company has acquired Uquifa, Klar Sehen and Octtantis Nobel in the API and branded formulations space. Aided by these expansions and recent acquisitions, we expect the revenues to receive a major boost and grow at a CAGR of 78.8% to ` 569.6 crore over the forecast period (2011- 14).

Pharma - Revenue and EBIDTA Margin

Rs. Crore (%) 600 25

500 20 400 15 300 10 200

100 5

0 - FY11 FY12E FY13E FY14E

Revenue EBIDTA Margin RHS (%)

Source: Vivimed, Ventura Research

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Vivimed Pharmaceutical Product Portfolio

SYRUPS & LIQUIDS SMALL VOLUME CAPSULES/TABLETS

PARENTALS

FLEXASUR CODAREX OTRIVIN

SPASMOCIP PLUS INALGEL NASIVION MOIST

CODARIN VISCODYNE NASIVION

BUTAPROXIVON BROZEDEX CANDBIOTIC EAR

VALENZIA TABLETS CELADRIN DROP ARACHITOL TABLET MITS CODEINE OTRIVIN NASAL SPRAY C PINK TABLET LINCTUS CANDID LOTION TOBROP CANDID MOUTH PAINT

MERCK CRAMS NOVARTIS RANBAXY GLENMARK CIPLA LUPIN

Source: Vivimed, Ventura Research

 Recent acquisitions to fuel revenue growth

In a strategic move, to enhance presence across the value chain and hasten entry to the regulated markets (which generally has a 36-48 months penetration time), Vivimed acquired Uquifa, a 75 year old API and intermediates manufacturing company. Considering Vivimed’s, strong track record of successful acquisitions, we expect the company to effectively leverage the acquisition and add value. Besides Uquifa, Vivimed has also acquired two small formulation companies Klar Sehen Pvt Ltd & Octtantis Nobel Labs for a consideration of ` 24 crore and ` 5 crore respectively. These acquisitions would help Vivimed reduce costs by achieving manufacturing synergies and expand sales and profitability by increasing market and client penetration. We estimate Vivimed to earn revenues to the tune of ` 352 crore in FY14 from these acquisitions.

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Profile of Major strategic acquisitions

James Robinson Harmet Klar Sehen Pvt Octtantis Nobel Uquifa, Spain & Acquisition Ltd International Ltd Labs Mexico Year of 2008 2009 2011 2011 2011 Acquisition Cost of USD 21 mn USD 3 mn Rs 24 crore Rs 5 crore USD 55 mn Acquisition Stake 100% 100% 100% 60% 100% Photochromic Dyes Active Sales and Pharmaceuticals & and Imaging Ophthalmic Products Pharmaceutical Distribution Nutraceuticals Products Chemicals Products

Complements Strong marketing Direct entry to Foray into booming Rationale of Niche product Vivimed’s portfolio in field force to help the developed generic API Acquisition portfolio . high growth expand distribution markets. segment. ophthalmic segment. reach.

Source: Vivimed, Ventura research

 Uquifa- a unique value proposition

Vivimed has acquired it for a consideration of USD 55 million (` 286 crore) funded through a debt equity mix of 65:35. Vivimed’s equity infusion of USD 20 million is via an SPV (Vivimed Labs Spain S.L), debt financing of USD 25 million has been provided by Exim Bank and balance USD 10 million is by the way of deferred payments. Benefits of Uquifa acquisition

Source: Vivimed, Ventura Research

 Other two acquisitions in branded formulations to enhance presence in domestic biz

In addition to Uquifa, Vivimed in its acquisition spree acquired two formulation companies in India, Klar Sehen Pvt Ltd (KSPL) (100% stake) and Octtantis Nobel

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Labs (50% stake) in 2011 for ` 24 crore and ` 5 crore respectively with presence in manufacturing and marketing of branded formulations.

Benefits KSPL and Octtantis acquisition

Presence in North- 150 MRs East, Bihar & AP Strong Distribution Reach

KSPL

Octtantis Presence in Pharmaceutical Nobel & Nutraceutical 50 Trade Labs Marks cGMP compliant Segment manufacturing facility at Kolkata & Hyderbad

Source: Vivimed, Ventura Research

 Significant entry barriers to ensure limited competition and sustainability of growth

In the active ingediants market where product quality has precedence over price, becoming a preferred supplier to global majors is a strenuous and prolonged process. Vivimed with its quality offering has established strong relationships with global majors and over a time period has embedded itself within these multinationals and now is a supplier across a wide range of products.

Timeline of Product Basket Expansion Unilever

L’oreal P&G

Source: Vivimed, Ventura Research

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Typical time-line to be embedded as a vendor to an MNC is 5-7 years thus raising the competitive bar. Further, the contracts are long term in nature ensuring stable revenues for a longer period of time. Considering these huge entry barriers, and expanding product portfolio of Vivimed, we are very comfortable with regards to revenue visibility.

Activity Timelines

Sample Quantities 3 to 6 months

Small/Trial Batches 6 to 9 months

Stabilization period 15 to 18 months

Commercial Quantities 6 to 9 Months

Source: Vivimed, Ventura Research

Vivimed’s strong skill set for innovations, research based idea-generation right from creation of a molecule to partnering with a manufacturer provides the company with a significant competitive edge.

 KEY CONCERNS

 Mounting debt, a key risk to profitability

Especially in the current high interest environment, Vivimed’s debt by FY14 would be very high at `515 crore (debt equity ratio of 0.8). Since along with debt, significant equity dilution has already been done leaving with very little scope for further expansion of equity. As the cash flows are strong, we forsee no issues with regards to debt serviceability. However, a sharp deterioration of economic environment & rise in interest rates can impact adversely.

Debt to Equity Interest Coverage to Debt/EBIDTA

(Rs.Crore) (%) (%) 1400 1.8 7.0 4.0 1200 1.6 6.0 3.5 1.4 3.0 1000 5.0 1.2 2.5 800 1 4.0

0.8 2.0 600 3.0 0.6 1.5 400 2.0 0.4 1.0 200 0.2 1.0 0.5 0 0 0.0 0.0 FY11 FY12E FY12E FY14E FY11 FY12E FY13E FY14E Debt Debt to Equity Interest Coverage Ratio Debt/EBIDTA (RHS)

Source:Vivimed, Ventura Research Source: Vivimed, Ventura Research

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 Foreign Exchange Risk

Vivimed derives ~ 44% (FY11) of its revenue from the export markets which are set to rise further considering the recent acquisition abroad. Any adverse movement in the USD/INR in the wake of current global economic turmoil might affect company’s revenue and profitability adversely.

 Financial performance

Vivimed Ltd has witnessed a steady 59.1% yoy growth in its top line to ` 168.0 crore in Q3FY12 as against ` 105.6 crore in Q3FY11 led by consolidation of the recently acquired pharmaceutical companies. The EBITDA margins stood at healthy 19.8%. While, the PAT margins stood at 9.5%.

We believe that Vivimed would register a strong growth in revenues in quarters to come led by strong product portfolio and recent acquisitions. In our view, the recent acquisitions would help the company maintain margins and foster a strong growth thus adding significant value. Further, the expansions would ensure growth in the current portfolio base ensuring a double benefit with mounting debt being the only concern.

Quarterly Financial Performance

Particulars Q3FY12 Q3FY11 FY11 FY10 Net Sales 168.0 105.6 416.9 343.4 Growth % 59.1 21.4

Total Expenditure 136.4 81.4 331.9 279.1 EBITDA 33.2 24.2 85.0 64.3 EBITDA Margin % 19.8 22.9 20.3 18.7 Depreciation 6.9 1.5 9.1 8.7 EBIT (EX OI) 26.3 22.7 75.9 55.6 Other Income 0.0 0.0 0.01 6.8 EBIT 26.3 22.7 75.9 62.4 Margin % 15.7 21.5 18.2 18.1 Interest 5.9 6.0 20.6 22.8 Exceptional items 0.0 0 0.0 0.0 PBT 20.4 16.7 55.3 39.6 Margin % 12.1 15.8 13.2 11.5 Provision for Tax 4.4 3.4 6.4 8.6 PAT 16.0 13.3 48.8 31.0 PAT Margin (%) 9.5 12.6 11.7 9.0 Source: Vivimed, Ventura Research

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 Financial outlook

Aided by strategic acquisitions and continuous expansions, we expect Vivimed revenues to grow at a CAGR of 39.9 % to ` 1139.9 crore over the forecast period of FY11-14. In addition, we haven’t factored additional revenues coming in from the launch of new products which should also help boost revenues and profitability. We expect Vivimed to maintain ~18% EBITDA margin (excl OI) over the forecasted period amidst volatile raw material prices. Consequently, we expect the PAT to grow at a CAGR of 31.7% to ` 111.6 crore in FY14E as compared to ` 48.8 crore in FY11.

Revenue and profitability trend

Rs. Crore (%) 1200 25%

1000 20% 800 15% 600 10% 400

200 5%

0 0% FY10 FY11 FY12E FY13E FY14E

Revenue EBIDTA Margin(%) PAT Margin(%)

Source: Vivimed, Ventura Research

 Valuation

We have valued the stock at 36%% premium to its historical average valuation of 5.5x considering the robust product portfolio and the recent acquisitions. However, post the integration of the acquisitions, we expect Vivimed to be re-rated considering its enhanced global presence and broadened product portfolio. Vivimed’s earnings are expected to grow at a 31.7% CAGR over the forecast period FY11-14 which is far ahead of the sector’s growth.

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P/E

800 700 600 500 400 300 200 100 0 Apr-07 Apr-09 Apr-11 Apr-13 CMP 3X 4X 5X 6X 7X

P/Adj.BV

800 700 600 500 400 300 200 100 0 Apr-07 Apr-09 Apr-11 Apr-13 CMP 0.8X 1X 1.2X 1.4X 1.6X

EV/EBIDTA

1600 1400 1200 1000 800 600 400 200 0 Apr-07 Apr-09 Apr-11 Apr-13 EV 3.45X 4.45X 5.45X 6.45X 7.45X

Source: Ventura Research

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Financials & Projections

Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e Profit & Loss Statement Per Share Data (Rs) Net Sales 416.0 636.2 982.1 1139.9 EPS 48.0 42.3 57.1 62.4 % Chg. 52.9 54.4 16.1 Cash EPS 53.9 73.5 106.8 127.8 Total Expenditure 331.9 509.7 805.3 934.5 DPS 2.0 2.0 2.0 2.0 % Chg. 53.6 58.0 16.0 Book Value 193.5 326.3 337.8 363.2 EBDITA 84.1 126.5 176.7 205.5 Capital, Liquidity, Returns Ratio EBDITA Margin % 20.2 19.9 18.0 18.0 Debt / Equity (x) 1.6 0.9 0.9 0.8 Other Income 0.9 0.9 1.1 1.2 Current Ratio (x) 4.6 2.6 3.6 3.5 PBDIT 85.0 127.5 177.8 206.7 ROE (%) 24.8 13.0 16.9 17.2 Depreciation 9.1 26.1 27.2 29.0 ROCE (%) 16.4 14.8 16.6 17.5 Interest 20.6 26.8 34.7 36.5 Dividend Yield (%) 0.6 0.6 0.6 0.6 PBT 55.3 74.5 116.0 141.3 Valuation Ratio (x) Tax Provisions 6.4 15.7 24.4 29.7 P/E 7.1 8.1 6.0 5.5 Reported PAT 48.8 58.9 91.6 111.6 P/BV 1.8 1.1 1.0 0.9 PAT Margin (%) 11.7 9.3 9.3 9.8 EV/Sales 2.4 1.6 1.0 0.9 EV/EBIDTA 11.9 7.9 5.7 4.9 Raw Materials / Sales (%) 58.1 59.0 61.0 61.0 Efficiency Ratio (x) Manpower cost / Sales (%) 4.8 5.0 5.0 5.0 Inventory (days) 74.1 75.0 75.0 75.0 Other Exp / Sales (%) 7.4 7.3 7.3 7.3 Debtors (days) 111.9 110.0 110.0 110.0 Tax Rate (%) 11.6 21.0 21.0 21.0 Creditors (days) 41.0 45.0 45.0 45.0

Balance Sheet Cash Flow statement Share Capital 10.2 140.9 76.1 17.9 Profit After Tax 48.8 58.9 91.6 111.6 Reserves & Surplus 186.5 313.7 466.4 632.0 Depreciation 9.1 26.1 27.2 29.0 Minority Interest & Others 0.0 0.0 0.0 0.0 Working Capital Changes -106.2 -25.3 -170.6 -69.0 Total Loans 307.7 391.7 511.8 514.5 Others 0.5 1.2 0.0 0.0 Deferred Tax Liability 14.7 14.7 14.7 14.7 Operating Cash Flow -47.8 60.9 -51.8 71.6 Total Liabilities 519.1 861.0 1069.0 1179.0 Capital Expenditure -28.7 -35.8 -55.2 -84.7 Goodwill 84.6 32.6 32.6 32.6 Change in Investment 9.4 -315.0 0.0 0.0 Gross Block 223.3 791.8 823.0 877.7 Cash Flow from Investing -19.3 -350.8 -55.2 -84.7 Less: Acc. Depreciation 43.5 251.7 278.8 307.8 Proceeds from equity issue 1.9 201.2 0.0 0.0 Net Block 179.7 540.1 544.2 569.9 Inc/ Dec in Debt 72.4 84.0 120.1 2.7 Capital Work in Progress 1.7 18.0 42.0 72.0 Dividend and DDT -1.7 -3.3 -3.8 -4.2 Investments 0.0 0.0 0.0 0.0 Cash Flow from Financing 72.5 281.9 116.3 -1.5 Net Current Assets 246.4 263.6 443.5 497.8 Net Change in Cash 5.5 -8.0 9.2 -14.6 Misc Expenses 6.7 6.7 6.7 6.7 Opening Cash Balance 5.6 11.1 3.1 12.3 Total Assets 519.1 861.0 1069.0 1179.0 Closing Cash Balance 11.1 3.1 12.3 -2.3

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