2.862 1.417
Sector : Glass Long Term Investment Call Piramal Glass Ltd. 3.012 CMP : 92 Rating : Buy Target : 143 6.862 26-Dec-11 Company Report Piramal Glass Ltd (PGL) has a multi product industrial profile and is a global leader in delivering world-class packaging solutions. It is a manufacturer of glass containers for the Cosmetics & Perfumery (C&P), Pharmaceutical and Specialty Food & Beverages (SF&B) industries. PGL has its manufacturing facilities in India, US and Sri Lanka with 11 furnaces having a total installed capacity of 1145 TPD (tonnes per day).
Key Data Investment Rationale: Year End Mar Focus on high-margin C&P business to drive revenues: PGL believes the Face Value (INR) 10 market share in the C&P premium segment can grow to 7-8% over the next two BSE Code PIRAMGLAS years from current levels of ~3%. PGLcurrently has a global leadership position Reuters Code PRML.BO in the colour cosmetic (Nail polish bottles) segment with a 50% market share. We believe that as the contribution of the C&P segment to the revenue increases Bloomberg Code PIRA IN and with the share of the premium segment within the C&P segment also Shares Outstanding (Mn) 804.4 increasing rapidly,will drive growth and improve margins going forward. Market Cap (INR Mn) 7,465 52 Week High/Low 156/79 Significant cost advantages Labour Arbitrage: In countries like US, which BSE Sensex / CNX Nifty 15970 / 4779 accounts for 37% of the global C&P premium segment, 80% of the C&P 1-Year Average Volume ('000) 78 requirement is imported. The total cost of production in India, where (INR mn) manpower is among the cheapest in the world is ~60% of the global costs and is Key Financials FY10 FY11 FY12E FY13E less than half of that in France and almost half of that in the US. This gives PGL Revenue 11,039 12,185 13,080 15,383 to have a significant cost advantage over its global peers. Operating Profit 1,822 2,851 2,995 3,769 Operating Profit (%) 16.5 23.4 22.9 24.5 Capacity expansion to meet the future demand: For FY12 and FY13, the Net Profit 32 1,033 1,038 1,543 company has a planned capex of INR 2600 mn, with INR 1000 mn assigned to a Net Profit (%) 0.3 8.5 7.9 10.0 Greenfield expansion of 160 TPD for the C&P segment to the at Jambusar. This Book Value 30 38 49 67 project is scheduled to be operational by March 2012. The remaining INR 1600 mn will be spent on realignment of 4 existing furnaces which will increase the Key Ratio FY10 FY11 FY12E FY13E capacity by ~50-60 TPD and will increase the total capacity by ~210 TPD. P/E (x) 168.0 8.0 8.0 5.2 P/BV (x) 3.1 2.5 1.9 1.4 Stronger balance sheet to support growth: PGL had a debt of INR 9200 mn (as RONW (%) 1.3 34.2 26.3 28.7 per FY11 Consol. balance sheet) and debt/equity of 3:1. In H1FY12 the ROCE (%) 8.8 16.3 15.6 20.1 debt/equity ratio was reduced to 2.5:1 from 3.4:1 in H1FY11. The debt service cover improved to 3.2 in H1FY12 as compared to 3.4 in H1FY12. PGL has been Share Holding Pattern able to restructure its debt by going into to relatively lower interest rate of 7.5% Promoters 72.3 foreign currency loan from peak rate of 13% to strength its cash flow. PGL FII 0.6 follows an active hedging policy to its naked exposure which is currently to the FI/MF/Other Institutes 3.4 tune of USD 12-14 mn. Others 23.7 Valuation: Relative Price Performance At the CMP of ~INR 92, the stock trades at ~8.0x and 5.2x of its FY12E and FY13E
160 Piramal Glass Nifty earning respectively. The company has been steadily shifting its product mix
140 from low margin commodity business to high yield specialized business of C&P. We expect the C&P contribution to company's revenue to increase from 120 49% in FY11 to 56% in FY13E which is expected to boost EBITDA margins from 100 23% in FY11 to 25% in FY13E. We have valued the company at ~8x of it FY13E 80 earnings which is at premium compared to other domestic peers, due to PGL's 60 better margins profile and return ratios. We maintain our BUY rating on the 40 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov stock with a target price of INR143. Source: Bloomberg, Unicon Research Unicon Research www.unicon.in Ashish Tiwari |[email protected] Rohan Shetty | [email protected] Piramal Glass Ltd.
CONTENTS
Particulars Page
Company Background ...... 3
Milestones ...... 4
Industry Overview ...... 5
Business Overview ...... 8
Investment Rationale ...... 10
Concerns ...... 13
Peer Comparison ...... 13
Valuation & Outlook ...... 13
Financial Statements ...... 14
Unicon Research 2 www.unicon.in Piramal Glass Ltd.
COMPANY BACKGROUND
Piramal Glass Ltd (PGL) has a multi product industrial profile and is a global leader in delivering world-class packaging solutions. It is a manufacturer of glass containers for the Cosmetics & Perfumery (C&P), Pharmaceutical and Specialty Food & Beverages (SF&B) industries. PGL has its manufacturing facilities in India, US and Sri Lanka with 11 furnaces having a total installed capacity of 1145 TPD. International operations contributed to 74% of FY11 revenues. PGL commands ~3-4% market share in world premium C&P segment and ~50% market share in colour cosmetics C&P segment. It controls ~35% market share in domestic pharmaceutical segment and ~91% market share in SF&B segment in Sri Lanka. The Company has offices in 10 countries and a distribution network in 44 countries. PGL is also the largest producer of nail-polish bottles globally.
Segment wise breakup Segment Contribution & Growth
Pharma SF&B C&P 1218 1200 Segment-wise CAGR SF&B 1104 (From FY 05 to FY 11 1008 annualized) 23% 1000 49% 35% 44% 800 Sales CAGR : 24% 779 36% C&P 701 600 45% 49% 493 43% 24% 26% 23% 30% 400 336 39% Pharma 18% 18% 30% 18% 17% 28% 200 39% 28% 39% 37% 31% 11% 54% 44% 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Source: Company, Unicon Research Source: Company, Unicon Research
Market Overview End Bottle Price Market Market Size Product ROCE 1000 Pcs Segment Total market : US $ 2.3 bn Price
25 - 30 % > Select >> $ 60 $ 1016 (44%) > $ 330 - $ 1000 + Perfumes
$ 160 - $ 330 > Mass Perfumes >> > 20 - 25 % $ 15 $ 616 (27%) Premium Segment& Skin Care Premium Segment
$ 85 - $ 160 > Low Mass Perfumes >> $ 8 $ 500 (22%) > 15 - 20 %
$ 155 Mass Segment Color Cosmetics >> (7%) > 15 - 20 % $ 1.5 $ 20 - $ 40 > Mass Segment
Source: Company, Unicon Research Unicon Research 3 www.unicon.in Piramal Glass Ltd.
MILESTONES
2010
PGL turnaournds after three years of consecutive 2008 losses
Kojan merges into Gujarat Glass Ltd., which 2005 gets relisted as PGL Acquires a part of The Glass Group (erstwhile Wheaton 2003 Glass) and marks entry into NPIL demerges premium C&P its 54% holding market to Kojam Finvest 1999 which gets listed
Acquires Ceylon Glass Company Ltd., Sri Lanka, 1998 And marks entry into SF&B Demerges as segment subsidiary, PE investors buy 1990 45% in the demerged entity Merges with group company Nicolas Piramal 1984 India Ltd. (NPIL) and Gujarat Glass becomes its acquired by division Piramal Group
Source: Company, Unicon Research
Unicon Research 4 www.unicon.in Piramal Glass Ltd.
INDUSTRY OVERVIEW Indian Glass Packaging
The Indian Packaging Industry is a USD 14 bn industry and has been growing at ~15% over the last few years. The industry is expected to accelerate further due to increasing urbanization, growing middle class and expansion in modern retail. The Indian glass container market stood at ~ USD 1 bn in FY10 and grew by ~12% YoY. The industry has significant entry barriers due to the capital intensive nature of the business. The industry has strong economic drivers for end-user segments (liquor and beer, pharmaceuticals, food, cosmetics, etc.)
The liquor and beer industries are the main users of container glass with ~70% contribution, followed by pharmaceuticals ~10%, food products ~10%, beverages ~6% and cosmetics ~4%.
• The Indian Made Foreign Liquor (IMFL) segment has been registering a strong 12% CAGR over the past four years. The alcohol consumption has increased in the recent past due to growing inclination towards social drinking and higher disposable income. This in turn is expected to drive container glass demand.
• The Indian pharmaceuticals industry is expected to grow to ~USD 37 bn by 2013 from the levels of USD 17 bn in 2008. Glass bottles and molded vials represent a significant share of packaging medium for cough syrups, tonics, pediatric suspensions, dry powder and liquid injectibles. Moreover, tubular vials and ampoules are finding an extensive acceptance by pharmaceutical companies for their product packaging.
• In India, currently 10-12% of all food and beverages are packed in container glasses, vis-à-vis 40-50% in developed economies. India’s retail food sector is expected to grow to ~USD 150 bn by 2025 (from the levels of USD 70 bn in 2008). The fruit-drinks category is growing at 25% annually, one of the fastest in the beverages market. Even sports and energy drinks, with low penetration in India, are expected to grow in the coming years. Attractive packaging besides innovative advertising and celebrity endorsements has gained importance in products marketing.We believe this growth will drive the demand for processed food packaging, especially container glass as it is considered non reactive and food-grade.
We believe growth in India’s retail food sector will drive the demand for processed food packaging, especially container glass as it is considered non reactive and food- grade.
Unicon Research 5 www.unicon.in Piramal Glass Ltd.
India’s per capita consumption of container glass, at 1.4 per kg, is far lower than the global average, indicating an immense growth potential.
World Glass Container per capita consumption (kg)
South korea 89.0 France 63.9 Italy 52.5 Germany 50.5 Spain 50.3 Ireland 38.8 Czech Republic 36.5 Austria 35.6 Poland 30.3 UK 27.5 USA 27.5 Hungary 22.5 Mexico 19.5 Argentina 18.8 Chile 14.4 Phillippines 10.6 Belgium 10.5 Japan 10.2 Greece 9.5 China 5.9 Turkey 5.5 Brazil 4.8 India 1.4 Indonesia 1.2 Source: Company, Unicon Research
Unicon Research 6 www.unicon.in Piramal Glass Ltd.
Global Glass Packaging
The World Packaging Organization estimates the global packaging industry to have revenues of USD 425 bn, with a ten year historical CAGR growth of ~3.1% and is expected to grow to USD 597 bn by 2014. The industry is projected to grow at ~3.5% CAGR in the next five years mainly driven by growth in emerging markets.
Geography End User
5% 13% Europe Liquor 34% 27% 9% Asia, Oceana, Africa & ME Beer
52% Food North America 11% Pharma Others South & Central America 15% 34%
Source: Owens-Illinois, Inc. - Investor Presentation, March 2010
The global glass packaging market size is estimated to be at USD 30 bn. With C&P segment having a size of USD 2.3 bn, Pharmaceuticals having a market size of USD 2 bn and SF&B having a size of USD 1.3 bn.
Global Glass Packaging Market Size
Glass Packaging $ 30 bn
Moulded Glass Tubular Glass Packaging Packaging $ 28 bn $ 2 bn
Food & Beverages $ 24.1 bn
Cosmetics & Specialty Food Pharmaceuticals Addressable niche “high value glass” market Perfumery & Beverages $ 2.0 bn Market size ~ 20% of overall market $ 2.3 bn $ 1.3 bn
Addressable niche global markets
Sources: Industry reports, Market size in FY 08-09/ CY-08
Unicon Research 7 www.unicon.in Piramal Glass Ltd.
BUSINESS OVERVIEW
PGL currently commands 5.8% market share in the ~ USD 2.3 bn Cosmetic & Perfumery (C&P) segment which has significant entry barriers like high quality and skill requirements. PGL is the latest global entrant into this segment and has grown by CAGR of 19% over the last 3 years. PGL also holds the distinction of being the only major player in this segment from Asia and hence has a significant cost advantage over its peers in the segment due to the comparatively low cost of manufacturing glass in India compared to other developed markets.
C&P market share Others Gerresheimer 13% 8% Vitro Piramal Glass 8% 6%
Bormiolli Rocco Zignago Brosse 6% 11%
Pochet 10% Bormiolli Luigi 6%
SGD Heinz 16% 16% Source: Company, Unicon Research
The C&P segment constitutes the mass segment and the premium segment. These segments are further divided as follows:
Mass Segment
• Colour Cosmetics: - This segment constitutes of nail polish bottles whose price ranges from USD 20-40 per 1000 bottles. The growth in the segment is driven by the emerging economies particularly China and Brazil. This market is very fragmented and regionalized and requires new designs, particularly in the mass market.
• Low Mass Perfumes: - This segment constitutes of perfume bottles with an end prices in the range of USD 8 and are primarily sold in emerging economies. The price range in the segment is USD 85-160 per 1000 bottles. The market is fragmented and characterised by frequent new product launches and short production runs. Customers in this segment prefer integrated packaging (Caps, Cartons etc.). Low mass perfumes are the easiest to produce in terms of quality and have higher manufacturing efficiencies. Competition in this space is driven by regional players in China and Poland.
Unicon Research 8 www.unicon.in Piramal Glass Ltd.
Premium Segment
• MNC Mass Segment: - Perfumes and Skincare products with an end price in the range of USD 15 and produced primarily for developed economies. The price range in the segment is USD 160-330 per 1000 bottles. This market is characterised by higher quality products with stringent plant audits before business development. This segment has a product development cycle of around 6-8 months and long production runs. Customers are mainly from developed economies in West Europe and North America.
• Perfumes Select Segment: - This segment comprises of high end perfumes with an end price greater than USD 60 produced mainly in France and USA. The price range of the segment is USD 330-1000+ per 1000 bottles. The segment has an extremely high entry barrier due to the specific skill required. A concentrated customer base of 20 customers constitutes around 80% of the market. The suppliers in this segment are mainly based in the EU and USA. The segment has a product development cycle of 12-18 months and customers conduct extensive periodic audits of the manufacturing plants. Bottle decoration accounts for ~40% of bottle cost due high labour intensity in decoration and quality sorting.
Market Overview End Bottle Price Market Market Size Product Market 1000 Pcs Segment Total market : US $ 2.3 bn Price
France > Select >> $ 60 $ 1016 (44%) > $ 330 - $ 1000 + Perfumes & USA
$ 160 - $ 330 > Mass Perfumes >> > West Europe, $ 15 $ 616 (27%) North America Premium Segment& Skin Care Premium Segment & Latin America
$ 85 - $ 160 > Low Mass Perfumes >> $ 8 $ 500 (22%) > Middle East, CIS Turkey, SE Asia, India. $ 155 Mass Segment >> $ 1.5 > Color Cosmetics (7%) > $ 20 - $ 40 Mass Segment Across Globe
Premium constitutes about 71% of overall C&P market
Source: Company, Unicon Research
Unicon Research 9 www.unicon.in Piramal Glass Ltd.
INVESTMENT RATIONALE
Focus on high-margin C&P business to drive revenues
C&P is a high value business commanding PGL has 5.8% market share in USD 2.3 bn global C&P segment. The company has better realization & higher operating margin attained a global leadership position in the colour cosmetics and low mass perfumes segments with 50% and 10% market share respectively. The company has adopted a long term strategy which focuses on increasing the market share in the high margin premium segment which has a better ROCE as compared to the mass segment. The company has shown a steady increase in revenue contribution of premium segment to the total C&P revenue over the last few years. PGL currently has a market share of 3- 4% in the premium segment; the management believes that the company is well positioned to grow its market share to 7-8% over the next two years, which in-turn would contribute to revenue and margin growth. We believe that the contribution of the C&P segment to the total revenue will increase to ~ 53% and 56% in FY12E and FY13E respectively. With the change in the product mix in the C&P segment and its growing contribution to the overall business will drive margins and revenue going forward.
Premium C&P Growth Trajectory Premium Mass 8000
7000 CAGR : 26% 6000 Premium CAGR of 28-30% 46% 5000 CAGR : 26% 45% 4000 43% 3000 38% 32% 28% 2000 54% 25% 57% 55% 1000 72% 62% 68% 75% 0 FY06 FY07 FY08 FY09 FY10 FY11 FY13E Source: Company, Unicon Research
Unicon Research 10 www.unicon.in Piramal Glass Ltd.
Significant cost advantages - Labour Arbitrage
Flacconage is a labour and skill intensive industry. Though the manufacturing of glass itself is highly automated, critical functions such as quality control need large teams of skilled professionals. In countries like US, which accounts for 37% of the global C&P premium segment, 80% of the C&P requirement is imported thus giving significant advantage to companies having manufacturing facilities in countries which have lower labour costs. The total cost of production in India, where manpower is among the cheapest in the world, is less than half of that in France and almost half of that in the US. The project costs in India amount to ~60% of the global costs. PGL is able to produce glass at significantly lower costs than its competitors in other parts of the world giving the company a significant advantage over its peers. For FY11, global sales accounted for 74% of the total sales. We believe that the global sales will increase further over the next two years and contribute ~75% of the total sales.
Sustainable Cost Advantage 120 Cost India France Freight 6 1 100 Raw material Overheads 10 12 Packing material 80 Depreciation 7 12 Energy
Mold cost 1 4 60 Labour Cost Labour 4 53 Mold cost Energy 8 8 40 Depreciation Packing material 4 4 20 Overheads Raw material 6 6 Freight Total 46 100 0 India France Source: Company, Unicon Research
Capacity expansion to meet the future demand
Between FY12-FY13, the company has a planned capex of INR 2600 mn, with INR 1000 mn assigned to a Greenfield expansion of 160 TPD for the C&P segment to the at Jambusar. This project is scheduled to be operational by March 2012. The remaining INR 1600 mn will be spent on realignment of 4 existing furnaces which will increase the capacity by ~50-60 TPD and will increase the total capacity by ~210 TPD. PGL has strategically focussed on expanding its C&P furnace capacities as it has higher margins. We believe that with the further capacity expansion will enable the company to capture higher market share in the C&P segment.
Unicon Research 11 www.unicon.in Piramal Glass Ltd.
Strong client base
PGL derives 74% of its revenues from global sales. PGL's acquisition of Glass Group, USA gave it access to 37 % of the global C&P premium segment. Today, PGL has expanded its customer base to 17 of top 20 top customers which constitute ~80% of premium market. These being premium brands have quite stringent eligibility criteria for its vendors which include environmental norms, design norms, design history, etc. The company has reputed brands like Coty, Elizabeth Arden, Estee Lauder, L'Oreal, Revlon, Unilever, etc as its customers which enable PGL to maintain regular order flows due to the nature of the business where clients do not regularly change their vendors. Moreover, such reputed clients, help to form a quality client portfolio.
Stronger balance sheet to support growth
PGL had a debt of INR 9200 mn (as per FY11 Consol. balance sheet) and debt/equity of 3:1. In H1FY12 the debt/equity ratio was further reduced to 2.5:1 from 3.4:1 in H1FY11. The debt service cover improved to 3.2 in H1FY12 as compared to 3.4 in H1FY12. PGL has been able to restructure its debt by going into to relatively lower interest rate of 7.5% foreign currency loan from peak rate of 13% to strength its cash flow. The Indian operations have foreign debt of USD 40 mn in form of PCFC and will have a minimal impact on the P&L due to the receivables (Exports to the range of 60% of standalone sales). Other foreign currency loan are in their respective currency (USA - USD 60mn & Sri Lanka -USD 40 mn) which is only for the translation and has a natural hedge because of the distribution of their foreign currency denominated assets and liabilities. PGL follows an active hedging policy to its naked exposure which is currently to the tune of USD 12-14 mn. Moreover, the company is also planning one time sale of 21 acres of land in Sri Lanka in FY12 with an estimated value of ~ INR 300-400 mn will go towards debt servicing. Given the strong cash flows from operations, we believe that the debt equity ratio will improve to 1.6 in FY13E.
Unicon Research 12 www.unicon.in Piramal Glass Ltd.
CONCERNS Revenue concentration from few clients
80% of C&P revenues are generated from the top 20% C&P clients. Any order execution delays or failure on the part of PGL to retain such clients can dent revenues of the company.
Currency Risk
PGL is subject to risks from fluctuations in the currency as exports contribute substantially to its revenues.
PEER COMPARISON
Domestic Peers Price Market Cap EPS P/E P/B EV / EBITDA Company (INR) (mn) FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 HSIL Ltd 125.0 8,250.0 17.0 22.8 7.3 5.4 1.0 0.9 5.3 4.0 HNG 144.9 12,655.4 19.1 28.5 7.6 5.1 0.9 0.8 4.5 2.9 Piramal Glass 92.0 7,464.5 11.5 17.8 8.0 5.2 1.9 1.4 5.8 5.7
International Peers Price Market Cap EPS P/E P/B EV / EBITDA Company (EUR) (mn) CY11 CY12 CY11 CY12 CY11 CY12 CY11 CY12 Zignago Vetro SpA 4.5 360.0 0.4 0.5 10.3 9.7 4.5 2.8 5.6 5.3 Gerresheimer AG 32.1 1,007.5 2.3 2.6 13.9 12.5 1.9 1.7 6.5 6.0 SGD 28.9 15,480.4 3.3 3.5 8.7 8.2 0.8 0.8 5.0 4.9
VALUATION & OUTLOOK
At the CMP of ~INR 92, the stock trades at ~8.0x and 5.2x of its FY12E and FY13E earning respectively. The company has been steadily shifting its product mix from low margin commodity business to high yield specialized business of C&P. We expect the C&P contribution to company's revenue to increase from 49% in FY11 to 56% in FY13E which is expected to boost EBITDA margins from 23% in FY11 to 25% in FY13E. The company's increasing focus on C&P business, significant cost advantage over its com- petitors in other parts of the world would able PGL to increase its market share in C&P specially premium segment.
Most of the domestic peers are trading at a one year forward multiple of 3.6x-5.6x but are not exactly comparable given the difference in product mix and target markets. Globally glass companies which have similar product mix are commanding an aver- age P/E multiple of 10.1x. We have valued the company at ~8x of it FY13E earnings which is at premium compared to other domestic peers, due to PGL's better margins profile and return ratios. We maintain our BUY rating on the stock with a target price of INR 143.
Unicon Research 13 www.unicon.in Piramal Glass Ltd.
FINANCIAL STATEMENTS
Profit & Loss FY09 FY10 FY11E FY12E FY13E Balance Sheet FY09 FY10 FY11E FY12E FY13E Total Revenue 10,088 11,039 12,185 13,080 15,383 SOURCES OF FUNDS growth % 29.6 9.4 10.4 7.3 17.6 Share Capital 180 804 804 804 804 Total operating expenditure 9,348 9,218 9,333 10,085 11,614 Reserves & Surplus 254 1,595 2,216 3,143 4,577 EBITDA 740 1,822 2,851 2,995 3,769 Shareholder's Funds 434 2,399 3,020 3,948 5,381 EBITDA Margin % 7.3 16.5 23.4 22.9 24.5 Total Loans 13,571 9,824 9,200 9,600 8,541 Other Income 209 221 215 226 237 Deferred Tax Liab./ (Asset) 93 113 143 143 143 Depreciation & Amortisation 892 907 1,069 1,107 1,205 Total Liabilities 14,544 12,713 12,862 14,300 14,784 Interest 1,314 1,049 720 818 744 APPLICATION OF FUNDS PBT -1,258 87 1,277 1,297 2,058 Gross Block 14,05213,67315,17416,44117,974 PBT Margin % -12.5 0.8 10.5 9.9 13.4 Less: Accu. Depreciation 4,489 5,252 6,580 7,686 8,891 Total Tax -186 54 244 259 514 Net Block 9,562 8,421 8,595 8,755 9,084 % of PBT 14.8 62.6 19.1 20.0 25.0 Capital Work-in-Progress 148 141 402 1,277 352 Reported PAT -1,072 32 1,033 1,038 1,543 Investments 1 1 1 1 1 growth % -572.7 N.A. 3095.7 0.4 48.7 Current Assets 6,429 5,873 6,349 6,822 8,183 PAT Margin % -10.6 0.3 8.5 7.9 10.0 Current Liabilities 1,033 1,070 1,326 1,397 1,677 Adjusted PAT -1,118 44 930 928 1,433 Net Current Assets 4,834 4,150 3,865 4,267 5,348 Adjusted PAT Margin % -11.1 0.4 7.6 7.1 9.3 Total Assets 14,54412,71312,86214,30014,784
Cash Flow FY09 FY10 FY11E FY12E FY13E Ratios FY09 FY10 FY11E FY12E FY13E PBT -1,258 87 1,277 1,297 2,058 Per Share Data (INR) Depreciation 892 907 1,069 1,107 1,205 Adj. EPS -62.2 0.6 11.6 11.5 17.8 Interest 1314 1049 720 818 744 Adj. Cash EPS -10.0 11.7 26.1 26.7 34.2 Change in Working Capital -465 260 228 0 0 BookValue 24.1 29.8 37.5 49.1 66.9 Other Exp/(Inc) Cash Flow from Operations -253 2,580 3,195 2,285 2,192 Operating Ratios Purchase of Fixed Assets/WIP -1,645 -244 -1,508 -2,142 -608 Inventory (days) 103.3 84.1 75.0 78.0 82.8 Sale of Fixed Assets 97 36 5 - -Debtors (days) 97.3 87.1 83.3 84.0 86.8 Other Exp/(Inc) - - - 226 237 Creditors (days) 27.1 29.6 30.8 30.7 32.7 Cash Flow from Investments -1,547 -208 -1,502 -1,916 -371 Debt / Equity (x) 31.3 4.1 3.0 2.4 1.6 (Repayment)/ Proceeds From Borrowings 3,158 -3,150 -624 400 -1,059 Proceeds from Right Issue - 625 - - - Returns (%) Share Premium Received - 1,232 - - - RONW -247.2 1.3 34.2 26.3 28.7 Interest Paid -1,322 -1,059 -703 -818 -744 ROCE 0.5 8.8 16.3 15.6 20.1 Cash Flow from Financing 1,832 -2,352 -1,420 -418 -1,803 Inc./(Dec.) in Cash 32 21 272 -49 19 Valuation Ratios (x) Opening Cash balances 86 118 71 133 84 P/E (x) -1.5 168.0 8.0 8.0 5.2 Closing Cash balance 118 71 133 84 102 P/CashEPS (x) -9.2 7.9 3.5 3.5 2.7 Source: Company, Unicon Research P/BV (x) 3.8 3.1 2.5 1.9 1.4 EV/Total Sales (x) 1.5 1.5 1.6 1.4 1.3 EV/EBITDA (x) 11.8 20.4 9.4 5.8 5.7
Unicon Research 14 www.unicon.in Piramal Glass Ltd.
RESEARCH RECOMMENDATIONS
Date of Recommended Company Name Report Type Sector Recommendation Target Recommendation Price 24-Sep-11 Development Credit Bank Ltd. Initiating Coverage Banking Buy 46.0 64.0 15-Sep-11 Supreme Infrastructure India Ltd. Investment Idea Constructions Buy 230.0 280.0 30-Aug-11 Persistent Systems Ltd. Initiating Coverage Information Technology Buy 309.0 381.0 2-Aug-11 Tamil Nadu News Print Ltd. Initiating Coverage Paper & Paperboard Buy 117.0 161.0 18-Jul-11 KEC International Ltd. Initiating Coverage Power Transmission Buy 79.0 104.0 12-Jul-11 Visa Steel Ltd. Investment Idea Metal Buy 59.0 75.0 30-Jun-11 Tecpro Systems Ltd. Investment Idea Material Handling Buy 250.0 300.0 16-May-11 Camson Biotechnologies Ltd. Investment Idea Agri Biotech Buy 116.0 156.0 4-May-11 Ganesh Polytex Ltd. Initiating Coverage Waste Recycling Buy 62.0 102.0 28-Apr-11 CESC Ltd. Initiating Coverage Power Buy 311.0 411.0 1-Apr-11 Unity Infraprojects Ltd. Investment Idea Infrastructure Buy 69.0 86.0 31-Mar-11 Rolta India Ltd. Investment Idea IT / ITES Buy 139.0 191.0 29-Mar-11 West Coast Paper Mills Ltd. Investment Idea Paper & Paperboard Buy 77.0 95.0 7-Mar-11 Hindusthan National Glass & Industries Ltd. Initiating Coverage Glass Buy 212.0 351.0 28-Feb-11 Deepak Fertilisers & Petrochemicals Ltd. Initiating Coverage Fertilisers Buy 152.0 202.0 3-Feb-11 Ceat Ltd. Investment Idea Auto Ancillaries Buy 109.0 149.0 31-Jan-11 MIC Electronics Ltd. Initiating Coverage Led Display & Lighting Buy 31.6 51.0 12-Jan-11 Diamond Power & Infrastructure Ltd. Initiating CoveragePower Buy 193.0 257.0 31-Dec-10 Hathway Cable & Datacom Ltd. Initiating CoverageMedia Buy 164.0 227.0 31-Dec-10 Jindal Poly Films Ltd. Investment Idea Packaging Accumulate 525.0 620.0 31-Dec-10 Allahabad Bank Investment Idea Banking Buy 225.0 304.0 22-Dec-10 Sasken Communication Tech. Ltd. Investment Idea IT / ITES Buy 168.0 226.0 30-Nov-10 Banco Product Initiating Coverage Auto Buy 93.0 149.0 30-Nov-10 Allcargo Global Logistics Investment Idea Shipping & Logistics Buy 155.0 233.0 18-Nov-10 Jyoti Structure Investment Idea Power Buy 137.0 171.0 16-Nov-10 Pennar Industries Investment Idea Steel Buy 49.0 63.0 3-Nov-10 HSIL Ltd. Initiating Coverage Building Product Buy 141.0 171.0 27-Oct-10 IDBI Bank Initiating Coverage Banking Buy 171.0 228.0 26-Oct-10 MSP Steel and Power Initiating Coverage Steel Buy 72.0 114.0 29-Sep-10 Nakoda Textiles Investment Idea Textiles Buy 15.0 23.0 16-Sep-10 Kajaria Ceramics Investment Idea Ceramic Tiles Buy 70.0 88.0 15-Sep-10 Gokul Refoils Investment Idea Food Processing Accumulate 97.3 109.0 14-Sep-10 Aqua Logistic Investment Idea Logistic Hold 59.1 60.8 31-Aug-10 Lakshmi Precision Screws Investment Idea Fastner Accumulate 79.8 91.8 27-Aug-10 BGR Energy System Initiating Coverage Power Buy 786.0 1020.0 30-Jul-10 Patel Engineering Initiating Coverage Infrastructure Buy 416.0 480.0 26-Jul-10 KPR Mills Ltd. Investment Idea Textiles Accumulate 156.0 181.0 14-Jul-10 IDBI Bank Investment Idea Banking Accumulate 125.0 142.0 9-Jul-10 Opto Circuit Initiating Coverage Healthcare Buy 243.0 293.0 26-Jun-10 BGR Energy System Ltd. Investment Idea Capital Goods Accumulate 697.0 820.0 23-Jun-10 Biocon Ltd. Investment Idea Pharmaceuticals Buy 321.0 387.0 19-Jun-10 Emmbi Polyarns Investment Idea Packaging Buy 15.6 26.0 18-Jun-10 Indian Bank Investment Idea Banking Buy 221.0 276.0 17-Jun-10 Diamond Power & Infrastructure Ltd. Investment Idea Power Ancillary Accumulate 196.0 226.0 12-Jun-10 Man Industries Investment Idea Steel Pipes Buy 85.0 102.0 5-Jun-10 Usher Agro Investment Idea Food Processing Buy 79.0 110.0 10-May-10 Greaves Cotton Investment Idea Construction Buy 67.0 82.0 30-Apr-10 Indraprastha Gas Ltd. Initiating Coverage Gas Distribution Buy 233.0 290.0
Unicon Research 15 www.unicon.in Piramal Glass Ltd.
Unicon Investment Ranking Methodology
Rating Buy Accumulate Hold Reduce Sell
Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%
Disclaimer This document has been issued by Unicon Financial Intermediaries Pvt Ltd. (“UNICON”) for the information of its customers only. UNICON is governed by the Securities and Exchange Board of India. This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. The information and opinions contained herein have been compiled or arrived at based upon information obtained in good faith from public sources believed to be reliable. Such information has not been independently verified and no guarantee, representation or warranty, express or implied is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document has been produced independently of any company or companies mentioned herein, and forward looking statements; opinions and expectations contained herein are subject to change without notice. This document is for information purposes only and is provided on an “as is” basis. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as an offer, or solicitation of an offer, to buy or sell or subscribe to any securities or other financial instruments. We are not soliciting any action based on this document. UNICON, its associate and group companies its directors or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this document, including but not restricted to, fluctuation in the prices of the shares and bonds, reduction in the dividend or income, etc. This document is not directed to or intended for display, downloading, printing, reproducing or for distribution to or use by any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or would subject UNICON or its associates or group companies to any registration or licensing requirement within such jurisdiction. If this document is inadvertently sent or has reached any individual in such country, the same may be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published for any purpose without prior written approval of UNICON. This document is for the general information and does not take into account the particular investment objectives, financial situation or needs of any individual customer, and it does not constitute a personalised recommendation of any particular security or investment strategy. Before acting on any advice or recommendation in this document, a customer should consider whether it is suitable given the customer's particular circumstances and, if necessary, seek professional advice. Certain transactions, including those involving futures, options, and high yield securities, give rise to substantial risk and are not suitable for all investors. UNICON, its associates or group companies do not represent or endorse the accuracy or reliability of any of the information or content of the document and reliance upon it is at your own risk.
UNICON, its associates or group companies, expressly disclaims any and all warranties, express or implied, including without limitation warranties of merchantability and fitness for a particular purpose with respect to the document and any information in it. UNICON, its associates or group companies, shall not be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the document. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Unicon Financial Intermediaries Pvt Ltd.
Address: Unicon Financial Intermediaries Pvt. Ltd. 3rd Floor, VILCO Center, Opp Garware House, 8, Subhash Road, Vile Parle (East), Mumbai - 400057. Ph: 022-33901234 Email: [email protected] Visit us at www.unicon.in
Unicon Research 16 www.unicon.in