growth (%) -9.2% 15.9% 3.5% mahindra forgings limited ... · pdf filemahindra forgings...

September 05, 2013

Mahindra Forgings Limited.

Reassessing Cost & Accessing Globally…

CMP Rs.64.7 Target Rs.82 Initiating Coverage - BUY

SKP Securities Ltd www.skpmoneywise.com of 12

Face Value (Rs) 10Equity Capital (Rs.Mn) 921.73M.Cap (Rs.Mn) 599052-wk High/Low (Rs) 72.45 / 35.50Avg Daily Vol (in Qty) 64833BSE Code MAHFORGNSE Code MAHINDFORGReuters Code MAFR.BO

Bloomberg Code MFOL:IN

Key Share Data

Share Holding Pattern (as on June 30, 2013)

Promoters53%

FII7%

DII7%

Others33%

Source: BSE

Key Financials (Rs. Mn) FY12 FY13 FY14E FY15ENet Sales 24403 22164 25695 26588growth (%) -9.2% 15.9% 3.5%EBITDA 2083 430 1979 2047margin (%) 8.5% 1.9% 7.7% 7.7%PAT 512 -1139 397 538margin (%) 2.1% -5.1% 1.5% 2.0%EPS (Rs) 5.55 -12.36 4.31 5.84BVPS (Rs) 94.56 81.848 86.155 91.99

Key Ratios FY12 FY13 FY14E FY15EP/E (x) 11.64 -5.23 15.01 11.08P/BV (x) 0.68 0.79 0.75 0.70M.Cap/Sales (x) 0.25 0.27 0.23 0.23EV/EBITDA (x) 5.66 28.79 6.31 5.65ROACE (%) 10.0% -7.3% 10.3% 13.0%ROANW (%) 6.2% -14.0% 5.1% 6.6%

ROAA (%) 3.5% -7.8% 2.7% 7.4%

D/E (x) 0.70 0.91 0.86 0.71 Source: Company,SKP Research

Price Performance MFL vs. BSE Small Cap

-40%

-20%

0%

20%

40%MFL BSE Small Cap

Analyst: Mamta Singh

Tel: +91 22 4922 6006; Mob: +91 9833003848

Email: [email protected]

Company Profile Mahindra Forgings Ltd. (MFL) incorporated in 1961 is an integral part of Mahindra Systech, a part of a leading business conglomerate, Mahindra Group. MFL is amongst leading forging company under the leadership of Mr.Hemant Luthra, President – Systech Sector and Mr. K. Ramaswami, Managing Director of MFL. It is engaged into the manufacturing of technologically advanced forged and machined products.

Future outlook Global Alliance leading to efficiency gains: Mahindra Group (M&M) and CIE Automotive (CIE), Spain are entering

into a global alliance which is a multi-structured deal forming a global automotive component supply network.

The company has received a regulatory approval from Competition Commission of India (CCI) for the proceed of Mahindra-CIE deal.

CIE Autometal, Brazil will acquire stake in M&M’s component business i.e. Mahindra Forgings, Mahindra Composites & Mahindra Hinoday. Later Mahindra will consolidate all its component businesses creating “One Systech” and CIE European Forgings (Spain & Lithuania) renaming it as Mahindra CIE Automotive.

M&M will hold 20% stake in the new entity while CIE will hold 51% stake. M&M will receive Rs.6.74bn from sale of stake in its subsidiaries while it will pay Euro96.24mn for a 13.5% stake in CIE.

Systech’s portfolio will provide Mahindra CIE Automotive high capacity for producing automotive forgings, in India, Germany, and England. CIE Automotive’s assets have forging operations in Brazil, Mexico, Lithuania, and Spain.

Diversified & Complementary product portfolio across plants:

MFL has a largest market share for passenger crankshafts in India being the major revenue drivers of Indian operations accounting for approximately 60% of the MFL’s Indian revenue.

Mahindra Forging Europe’s (MFE) German company Schöneweiss, is one of the top four axle beam manufacturers in the world. MFE’s UK operations, Stokes, has expertise in producing ‘flashless’ parts.

EBITDA Margin expected to improve due to operating efficiencies: Consolidated EBITDA margin was around 2% in FY13, due to unplanned

increase in the employee cost in the European subsidiaries. MFL is focusing on increasing its operating efficiencies by lowering its

cost. We expect EBITDA margins to increase to 8% in FY15E due to

better operating efficiency.

Outlook & Recommendation: We expect MFL to report moderate revenue and healthy margins on

the back of operating efficiency. The global alliance in the component business will lead a multi-technology company.

On a P/BV basis, MFL is trading between the range of 0.5x & 0.75x in the past two years. At the CMP of Rs.64.7, stock is trading at a P/BV of 0.75 & 0.70 in FY14E and FY15E respectively.

We recommend BUY on the stock with a target of Rs.82 at the P/BV of 0.90x on FY15E book value over the period of 15 months as we expect improved financial visibility will lead to enhanced discounting.


SKP Securities Ltd. www.skpmoneywise.com of 13

The Industry: Overview

The Forging Industry is a key link between critical manufacturing segments - metal suppliers (both

ferrous and nonferrous) and end user industries. The Auto Components segment comprises of products primarily demanded by the Automobile

segment. In terms of production of auto components, engine & engine parts alone account for 31% of the production value of auto components, while engine & engine parts and Transmission & steering parts together account for about 50% of the same.

The forging industry is composed of those plants that; a) make parts to order for customers (referred to as custom forgings); b) make parts for their own company's internal use (referred to as captive forgings); or c) make standard parts for resale (referred to as catalog forgings).

Forging is a cost-effective way to produce net-shape or near-net-shape components. Forged components are commonly found at points of shock and stress such as wheel spindles, kingpins, axle beams and shafts, torsion bars, ball studs, idler arms, pitman arms and steering arms.

Forgings are used in high performance, high strength, and high reliability applications where tension, stress, load, and human safety are critical considerations.

Worldwide Forging Production Per Region (‘Tons) European Forging Production Per Country (‘Tons)

China10.22

41%

Europe5.22

21%

India, 2.30,

9%

Japan, 2.13,

9%

Nafta, 1.81,

7%

Others3.15

13% Germany, 2.49, 48%

Italy, 1.14, 22%

France, 466, 9%

Spain, 285, 5%

UK, 235, 5%

Others, 679, 11%

Source: Euroforge & SKP Research

It is no coincidence that the forging industry is dominant in those regions with a strong automotive industry, namely in China & Europe. German forging industry is the European leader with 48% of total production in European region.

Emerging markets such as Japan, India and Nafta represent a rapidly growing group, with a combined 25% of the total world production.

European Automotive industry is the major end-user, accounting for approximately 70% of forging industry, consuming 71% of closed die forging technology.

Germany is the largest forging producer in Europe accounting for approximately 48% of the total forging production of all Euroforge members in European Union.

Indian automotive industry currently accounts for 60% of the forging industry’s output. The organized sector accounts for approximately 70% of the total forgings production and are suppliers to OEM’s automotive components globally due to their cost effective method.

The Indian Forging Industry is aiming to reduce its dependency on automobile sector to less than 50% in coming few years and shift its focus to non-automotive segment. The industry currently operates around 70% capacity utilization.

In recent years the forging industry globally has undergone significant shrinkage associated with intense global competition, technological changes, and environmental and economic factors.

Taiwan 969 Russia 785 Korea 700 Australia 392 Brazil 435

Poland 300 Cz.Rep 168 Turkey 82 Sweden 75 Solvenia 41 Belgium 13



Trends in Passenger Vehicles & Commercial Vehicles in Europe & India to their Economic Growth:

Source: AECA & SKP Research

Source: AECA & SKP Research

0

2

4

6

8

10

0

200000

400000

600000

800000

1000000PV CV GDP

Qu

arte

r-w

ise

Pro

du

ctio

n o

f

Ve

hic

les

in In

dia

(un

its)

GD

PG

row

th (%

)

Source: Company & SKP Research



According to OICA Report (The International Organisation of Motor Vehicle Manufactures), global vehicle production reached a record 84.1 mn in 2012, up by 5% over the previous year and estimated to further grow by 3% in 2013.

Global economies continue to witness either fragile recovery or persistent downturns. During FY12-13, there has been demand contraction largely in CV side of automotive business globally.

According to SIAM data (Society of Indian Automobile Manufacturers'), the automotive sector, which had grown 30% for the past three years, is going through a slowdown, growing between 5-10% in different segments.

India is emerging as one of the key auto components center in Asia and is expected to play a significant role in the global automotive supply chain in the near future.

Indian Forging Industry – SWOT Analysis An analysis of the internal and external environment is an important part of the strategic planning process. SWOT analysis of the Indian automobile sector gives the following points:

Strengths

1) Globally cost competitive.

2) Access to technology.

3) Strict quality Controls.

4) Major auto manufacturing players have setup

facilities in India.

5) Average Income of an Indian is Increasing.

6) Aggressive YOY growth of automobile industry, which

acts as a catalyst to the Forging industry – Large

Domestic Market

7) Strong Engineering Skill for Labor.

Opportunities

1) Serves as sourcing hub for global automotive majors.

2) Significant export opportunities may be realized

through diversification of export basket.

3) Implementation of VAT will help to the cascading

impact of prices.

4) Huge business opportunity in automotive as well as

non-automotive applications in India as well as

international markets.

Weakness

1) Low level of research and development capability.

2) Exposed to critical downturn in the automotive

industry & infrastructure bottlenecks.

3) Most Forging companies are dependent on global

majors for Technologies.

4) Heavy dependence on US and European markets

having its own business cycle and technological

& regulatory requirements.

Threats

1) Presence of a large counterfeit components market

possesses a significant threat.

2) Pressure on prices from Original Equipment

Manufacturing (OEM's ) continues,

3) Imports pose price based competition in the

replacement market,

4) Competition from low cost component manufacturing

countries such as Thailand and China

Source: SKP Research



Company: Snapshot

Mahindra Forgings Ltd. incorporated in 1961 is an integral part of Mahindra Systech, a part of a leading business conglomerate, Mahindra Group.

MFL is amongst leading forging company under the leadership of Mr. Hemant Luthra, President – Systech Sector and Mr. K. Ramaswami, Managing Director of MFL.

It is engaged into the manufacturing of technologically advanced forged and machined products accounting for approximately 45% of Systech’s revenue.

MFL’s manufacturing facilities are located in India, Germany and UK. The company has three fully owned subsidiaries in Germany & UK together known as Mahindra Forgings Europe (MFE). MFE accounts for approximately 80% of the total revenue of MFL.

The Indian operations focus on design development & machining of crankshafts whereas the German operation units are a full range provider of forging parts accounting for more than two third of the company’s revenue.

Corporate Structure

Mahindra Forgings

Locations Asia Europe

India UK Germany Germany

Companies (Subsidiaries)

Mahindra Forgings India

Stokes Forgings

Mahindra Forgings Europe AG

Schoeneweiss & Co. GmbH

Mfg Units 1 Plant 2 Plants 4 Plants 2 Plants

Key Highlights

Leading supplier of crankshafts & stub-

axles for cars/MUVs

Expertise in producing

'flashless' parts

Provides fully machined & partly assembled

components for the chassis of CV

Among leading axel beam

manufacturers globally

% of Revenue FY13

20% 6% 51% 23%


MFL has grown by a combination of organic and inorganic growth designed to achieve scales, technology and customer reach.

The Indian operation has an installed capacity of 90,000 MT located in Chakan near Pune with approximately 75% of the capacity utilization.

The company has a combined European capacity of 185000 MT and more than 37% of the forged parts are finished machined or even supplied as assembled components.

MFL supplies almost 65 different types of forged crankshafts and steering knuckles as per customer specific requirements. The company is capable of producing most of the forging components in a car or a truck and also holds several patents.

MFL intends to leverage and strengthen these core capabilities further to increase its businesses in these products.

Products Portfolio




Investment Rationale:

Global Alliance leading to efficiency gains:

Mahindra Group (M&M), India and CIE Automotive (CIE), Spain are entering into a global alliance

which is a multi-structured deal forming a global automotive component supply network.

Initially the company requires regulatory approvals from the Competition Commission of India and

Bundeskartelamt, Germany (Anti-Trust Authority). Further the company will apply for SEBI

Clearance intended for the Letter of Offer (Open Offer), High Court approval & Shareholders’

approval for the merger. The deal is expected to be complete in 12-15 months after getting

regulatory approvals in India and other countries.

Competition Commission of India (CCI) has given its approval to Mahindra-CIE deal monitoring that

the merger will not have an adverse effect in the Indian auto-component manufacturing business.

CCI has also examined that CIE Group has no presence in the auto-component business in India and

that the technologies currently being used by the Mahindra Systech firms would continue to be

utilized after deal comes into effect.

Step by Step proposed business transaction:

CIE’s Brazilian listed company Autometal will acquire control in M&M’s component business i.e.

Mahindra Forgings, Mahindra Composites & Mahindra Hinoday by holding stake in these firms for a

total consideration of Rs.6.74bn. These companies will come under Autometal’s Participaciones

Internacionales Autometal 2 (PIA2).

Mahindra will consolidate all its component businesses creating “One Systech” which will be

operated under one roof. Mahindra Forgings will carry out merger with Mahindra Composites,

Mahindra Ugine Steel, Mahindra Hinoday, Mahindra Investments (India) Mahindra Gears

International and CIE European Forgings (Spain & Lithuania) renaming as Mahindra CIE Automotive.

CIE Automotive will invest $116mn taking a majority stake of 51% in Mahindra CIE a single listed

entity in India which will continue to operate the current Systech automotive component

businesses globally. M&M continues to be a strategic investor and will have a 20% stake in

Mahindra CIE Automotive. The rest will be held by institutional and public shareholders.

Simultaneously, the Mahindra Group will invest Euro94.24mn for a 13.5% stake in CIE Automotive,

listed on the Madrid Stock Exchange making it the second largest shareholder in CIE. M&M will

nominate 2 Directors to the CIE Board.

For Mahindra’s 13.5% stake, CIE will sell 9.44% of its shares (currently treasury stocks) at Euro 6.0/share. Also M&M Group will subscribe for 4.6% (fully diluted basis) of equity share capital of CIE at Euro 6.0/share.

Mahindra CIE Automotive: Final Corporate Structure




Synergies Mahindra CIE Automotive:

“One Systech” will prove integration capacity, improvement in the margins of the integrated

companies and create value for shareholders. Mahindra has grown from being a big player to

become one of the top 25 auto components companies in the world through several strategic

acquisitions.

Mahindra’s auto component business (Mahindra Systech) has operations spread in India, UK, Italy

and Germany together posting a turnover of Rs.40bn in FY13. CIE’s European Forging business with

operations in Spain & Lithuania posted a turnover of Euro150 mn.

The merger of Mahindra and CIE are both complementary in nature to each other, one is on the

product and the other is geography. This enhances Mahindra’s positioning in product and

geographic diversification. The new company results in a major forging group with a global

footprint by integrating Mahindra Forgings and also CIE Forging assets.

Mahindra CIE Automotive’s operational performance expected to improve with synergy;

particularly in Europe as both the companyies have significant presence in Europe. Forgings in

Europe is largely complementary as CIE serves car markets while Systech serves CV market. Systech

manufactures gears while CIE machines other components.

The alliance results in a variety of products and technology portfolio including metal castings,

plastic parts, stampings, gears and other precision machined parts, composite parts, painted

elements, and roof systems, etc. and continuously upgrading operational requirements.

Through the Systech’s portfolio, Mahindra CIE will have a high capacity for producing automotive

forgings, in India, Germany, and England. Through the CIE Automotive assets, it will have forging

operations in Brazil, Mexico, Lithuania, and Spain.

Mahindra CIE Automotive: Post merger scenario (Rs.cr)

Company Segments Swap Ratio Revenue

Mahindra Forgings Forgings - 2216

Mahindra Composites Composites 0.90 50

Mahindra Ugine Stampings 2.84 766

Mahindra Hinoday Castings & Magnets 1.10 490

Mahindra Gears International Gears 0.20 278

Mahindra Investments India Pvt. Ltd. Gears 0.17 220

CIE European Forgings Forgings 1.05 1050

Mahindra - CIE Automotive Multi Technology - ~5070


Note: Mahindra Ugine’s revenue figure has been considered excluding its Steel business. FY13 Revenue (Sales) has been taken in Rupee value. Conversion of EUR1 = Rs.70



Diversified & Complementary product portfolio across plants:

The product portfolios of MFL’s Indian and European operations are complementary in nature

across geographies.

MFL’s Indian operation focuses on machining of crankshafts and streeing knuckles for cars and

multi- utility vehicles. MFL has a largest market share for passenger crankshafts in India. Sale of

crankshafts is the major revenue drivers of Indian operations accounting for approximately 60% of

the Indian revenue. The company also has a well balanced portfolio of non- automotive segment

which accounts for significant portion of the revenues.

MFE’s German company Schöneweiss, is one of the top four axle beam manufacturers in the world.

Its UK operations, Stokes, has expertise in producing ‘flashless’ parts. Falkenroth Umformtechnik

GmbH’s, German subsidiary’s area of expertise is the serial production of stub axles by use of a

special production technology.

European operations have established leadership position in forged components for commercial

vehicles and accounts for more than half of the revenue. The machine shop set up supports

customer specific requirements. More than 37% of the forged parts are finished machined or even

supplied as assembled components.

The German economy has performed better than the other European economies in 2012, the

growth rate reduced to 0.9% but expected to improve by 1.5% in 2014 as per IMF forecast.

Mandatory compliance with Euro 6 emission norms from CY2014 is expected to boost the

commercial vehicle industry.

Trends in Registration of Trucks in Germany

16355 1521712650 13734

1797420448 21529 21527

23323 2291721471 20460

2222419965

1805116560

0

5000

10000

15000

20000

25000

Quarter-wise Registration of Trucks (>6T) in Germany (units)


Strong Clientele Base:

MFL’s is constantly striving for innovation and excellence which reflects in the client portfolio

including Volvo, Daimler, MAN, Scania, Eicher, Suzuki, Fiat, Mahindra, TATA etc. MFL’s the top 5

customers account for approximately 50% of the business. Daimler and MAN are top customers.

MFL also enjoys strategic relationship with all major European Truck OEM manufacturers by having

early engagement in product development accounting for 60% of the total sales of Europe.

Also Daimler, Volvo and Renault are coming up with new trucks in the market, therefore new

orders may flow in for MFL. MFL supplies to Daimler in Germany as well as some parts in India.

Falkenroth Umformtechnik GmbH’s, MFL’s German subsidiary is a supplier to Deutsche Bahn

(German Railway) and hold the railway authorities license.



Financial to improve in coming years:

Top line to remain constant over a period of time:

MFL derives 82% of the revenue from its foreign subsidiaries (MFE), while domestic market

contributes 18%.

The company has registered negative growth of 9% to Rs.22164.01mn in FY13 y-o-y basis, due to

bad economic conditions in Europe.

Further, the order book of MFL is going to remain flat for FY14E and FY15E. However the rupee

depreciation effect can be seen in the financial of MFL.

We expect the company to report net sales of Rs. 25694.88 mn in FY14E and Rs. 26587.94 mn in

FY15E.

EBITDA Margin expected to improve due to operating efficiencies:

Consolidated EBITDA margin was around 2% in FY13, due to unplanned increase in the employee

cost in the European subsidiaries.

MFL is focusing on increasing its operating efficiencies by lowering its cost, improvement in raw

material utilization to reduce consumption of steel in forgings, therefore, saving in the heating cost.

Improvement in furnace efficiency and optimizing operating parameters.

We expect EBITDA margins to increase to 8% in FY14E due to better operating efficiency.

Improvement in return ratios

MFL’s improvement in operating efficiency will lead to improvement in return ratios in FY14E &

FY15E.

Revenue & Margin Growth (%) Return Ratio (%)

19

17

9

24

40

3

22

16

4

25

69

5

26

58

8

9% 9%

2%

8% 8%

0%

2%

4%

6%

8%

10%

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5000

10000

15000

20000

25000

30000

FY11 FY12 FY13 FY14E FY15E

Net Sales EBITDA EBITDAM (%)

EBITD

A M

arg

ins

(%)

Net

Sa

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(In

Mn

)

-15%

-10%

-5%

0%

5%

10%

15%

FY11 FY12 FY13 FY14E FY15E

ROACE (%) ROAA (%) RONW (%)


Key concerns:

Demand of the auto component segment is primarily linked to the growth of the automobile

segment which seems flat in the current situations. The domestic forging industry is trying to

minimize their dependency on the auto sector by diversifying into non-automotive segments.

The wages of permanent workers in Germany have increased by 11.7% between Jan’09 and

May’12 and are expected to increase further by 3% in this fiscal year.

Germany is moving away from the cheaper nuclear power plants to costlier renewable energy

options which will lead to an increase in the power cost of MFE.

Currency volatility may impact the topline as 82% of MFL’s revenues come from MFE. The

average rupee has depreciated by 13.6% in FY13 vs FY12.



Valuations: We expect MFL to report moderate revenue and healthy margins on the back of operating

efficiency. The global alliance in the component business will lead to a multi- technology

company.

On a P/BV basis, MFL is trading between the range of 0.5x & 0.75x in the past two years.

At the CMP of Rs.64.7, stock is trading at a P/BV of 0.75 & 0.70 in FY14E and FY15E

respectively.

One year forward PB Band

0

50

100

150

200

250

1-Apr-08 1-Apr-09 1-Apr-10 1-Apr-11 1-Apr-12 1-Apr-13

Price 0.5x 0.75x 1.00x 1.25x 1.50x


We recommend BUY on the stock with a target of Rs.82 at the P/BV of 0.90x on FY15E book

value over the period of 15 months as we expect improved financial visibility will lead to

enhanced discounting.



Financial Performance: (consolidated)

Income Statement (March Ending) (Rs.Mn) Balance Sheet (March Ending) (Rs.Mn)

Particulars FY12 FY13 FY14E FY15E Particulars FY12 FY13 FY14E FY15E

Net Sales (Revenue) 24402.51 22164.01 25694.88 26587.94 Equity Capital 921.69 921.73 921.73 921.73

Operating Expenditure 22319.48 21734.40 23716.37 24540.67 Reserves 7793.95 6622.42 7019.44 7557.40

EBITDA 2083.03 429.61 1978.51 2047.27 Networth 8715.64 7544.16 7941.17 8479.14

Dep & Am 1128.95 1103.72 1050.55 958.45 Long term debt 6062.28 6835.64 6835.64 6035.64

EBIT 954.08 (674.10) 927.96 1088.82 Sources of Funds 14777.93 14379.80 14776.81 14514.78

Interest 430.72 493.32 495.58 464.74 Gross Block 28427.01 29051.53 29580.53 30103.35

EBT 523.36 (1167.42) 432.37 624.08 Less: Depreciation 16515.68 17461.97 18512.52 19470.97

Other Income 39.53 38.10 43.68 45.20 Net Fixed Assets 11911.34 11589.56 11068.01 10632.38

PBExp items 562.89 (1129.33) 476.05 669.28 Capital WIP 534.42 513.37 506.42 517.56

Exceptional item 15.59 11.50 0.00 0.00 Non-Current Investments 22.90 22.08 22.08 22.08

PBT 547.30 (1140.82) 476.05 669.28 Deferref Tax Asstes (Net) 570.23 595.81 595.81 595.81

Tax 35.56 (1.45) 79.04 131.31 Current Asstes 7073.36 6379.17 8549.07 8250.37

PAT 511.74 (1139.37) 397.01 537.97 Cash and Bank Balance 174.54 365.41 257.80 357.50

EPS (Rs.) 5.55 (12.36) 4.31 5.84 Total Current Assets 7247.90 6744.57 8806.87 8607.87

BV (Rs.) 94.56 81.85 86.15 91.99 Total Current Liabilities 5508.86 5085.61 6222.39 5860.93

Uses of Funds 14777.93 14379.80 14776.81 14514.78

Cash Flow Statement (Rs.Mn) Ratio Analysis

Particulars FY12 FY13 FY14E FY15E Particulars FY12 FY13 FY14E FY15E

PBT 547.30 (1140.82) 476.05 669.28 Earning Ratio (%)

Depreciation 1128.95 1103.72 1050.55 958.45 EBITDAM 8.54% 1.94% 7.70% 7.70%

Interest Expense 430.72 493.32 495.58 464.74 NPM 2.10% -5.14% 1.55% 2.02%

Other (Inc)/Dec (39.53) (38.10) (43.68) (45.20) ROACE 10.02% -7.26% 10.32% 13.00%

(Inc)/Dec in WC 577.96 270.94 (1033.13) (62.75) ROANW 6.16% -14.01% 5.13% 6.55%

Taxes Paid (35.56) 1.45 (79.04) (131.31) ROAA 3.51% -7.82% 2.71% 4.00%

Operating Cash Flows 2609.84 690.51 866.34 1853.21 Valuation Ratio (x)

Capital Expenditure (1591.01) (760.90) (522.04) (533.96) P/E 11.64 (5.23) 15.01 11.08

(Inc)/Dec in Investment (0.15) 0.82 0.00 0.00 P/BV 0.68 0.79 0.75 0.70

Other Income 39.53 38.10 43.68 45.20 EV/EBITDA 5.66 28.79 6.31 5.65

Investing Cash Flows (1551.63) (721.99) (478.36) (488.76) EV/Sales 0.48 0.56 0.49 0.44

Inc/(Dec) in Debt (907.51) 773.36 0.00 (800.00) Balance Sheet Ratio

Inc/(Dec) in Capital 441.75 0.04 0.00 0.00 D/E 0.70 0.91 0.86 0.71

Interest Paid (430.72) (493.32) (495.58) (464.74) Current Ratio 1.32 1.33 1.42 1.47

Other Adjustments (170.19) (57.74) (0.00) 0.00 Interest Coverage 2.22 (1.37) 1.87 2.34

Financing Cash Flows (1066.67) 222.35 (495.58) (1264.74) FA Turnover Ratio 2.09 1.89 2.27 2.45

Chg in Cash & Cash Equ. (8.46) 190.87 (107.61) 99.70 Inventory Days 118 124 118 120

Opening Cash Balance 183.00 174.54 365.41 257.80 Debtors Days 46 46 46 46

Closing Cash Balance 174.54 365.41 257.80 357.50 Creditors Days 94 100 95 96

DuPont Analysis

PAT/ PBT 0.94 1.00 0.83 0.80

PBT/ EBIT 0.57 1.69 0.51 0.61

EBIT/ Net Sales 0.04 (0.03) 0.04 0.04

Net Sales/ Total Assets 1.65 1.54 1.74 1.83

Total Assets/ Equity 16.03 15.60 16.03 15.75

ROE (%) 55.52% -123.61% 43.07% 58.36%




The above analysis and data are based on last available prices and not official closing rates. SKP Research is also available on Bloomberg, Thomson

First Call &InvestextMyiris, Moneycontrol, Tickerplant and ISI Securities.

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