ht media

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

(` cr) 1QFY12 1QFY11 % yoy 4QFY11 %qoq

Revenue 494.4 402.8 22.7 467.2 5.8

EBITDA 87.8 78.6 11.8 84.4 4.0

OPM (%) 17.8 19.5 (174) 18.1 (31)

PAT 54.0 40.2 34.4 53.6 0.7

Source: Company, Angel Research

Strong top-line growth led by ad revenue growth yoy: For 1QFY2012, HT Media reported a good performance on the revenue as well as the profitability front. The company’s top line grew by 22.7% yoy to `494cr. Recurring earnings grew by robust 34.4% yoy on account of high other income and a significant decrease in tax rate. Key highlights for the quarter include – 1) overall growth of ~17% yoy in advertising revenue, driven by ~18% yoy growth in English and ~15% yoy growth in Hindi; however, sequentially, advertising revenue growth in English was flat (up by only ~1.5%), while advertising revenue in Hindi grew by ~18% qoq, 2) a ~3.5% yoy/qoq increase in circulation revenue, 3) a ~75% yoy jump and a ~17% qoq decline in radio revenue and 4) 174bp yoy OPM contraction due to 253bp yoy gross margin contraction.

Outlook and valuation: HTML posted impressive ad revenue, on the back of improved ad-revenue yields. We estimate such growth in ad revenue to sustain, with the English publications (HT and Mint) and HMVL posting CAGRs of 11.4% and 17.9% over FY2011–13, respectively. Aggressive cost rationalisation in the radio business (continues to be EBITDA positive and posted EBIT profit of ~`2.6cr), trickle-down effect of higher revenue traction and cooling of newsprint prices from their peak (factoring in a CAGR of ~15% during FY2011–13E) will help HTML post margins of ~18% during FY2012–13. At the CMP of `166, HTML is trading at 17.0x FY2013E consolidated EPS of `9.8. Owing to a significant improvement in the profitability of its growing businesses and incremental revenue traction on the back of improvement in advertising revenue and pricing across all geographies, we maintain our Accumulate rating on the stock with a target price of `177, based on 18x FY2013E earnings.

Key financials (Consolidated) Y/E March (` cr) FY2010 FY2011 FY2012E FY2013E

Net Sales 1,413 1,767 2,010 2,255

% chg 4.9 25.1 13.7 12.1

Net Profit (Adj.) 138.0 180.9 206.1 231.1

% chg 589.8 31.1 14.0 12.1

EBITDA margin (%) 17.7 17.9 18.2 18.3

EPS (`) 5.9 7.7 8.8 9.8

P/E (x) 28.4 21.7 19.0 17.0

P/BV (x) 4.0 3.0 2.6 2.3

RoE (%) 15.2 15.9 14.7 14.4

RoCE (%) 13.5 14.8 15.2 15.5

EV/Sales (x) 3.0 2.3 2.0 1.8

EV/EBITDA (x) 16.9 13.0 10.8 9.6 Source: Company, Angel Research

ACCUMULATE CMP `166 Target Price `177

Investment Period 12 months Stock Info Sector Print Media

Market Cap (` cr) 3,901

Beta 0.5

52 Week High / Low 186/125

Avg. Daily Volume 31,637

Face Value (`) 2.0

BSE Sensex 18,507

Nifty 5,567

Reuters Code HTML.BO

Bloomberg Code HTML@IN

Shareholding Pattern (%) Promoters 68.8

MF / Banks / Indian Fls 17.1

FII / NRIs / OCBs 11.7

Indian Public / Others 2.3

Abs. (%) 3m 1yr 3yr

Sensex (3.1) 3.2 35.7

HTML 7.7 4.4 58.8

Sreekanth P.V.S 022 – 3935 7800 Ext: 6841

[email protected]

HT Media Performance Highlights

1QFY2012 Result Update | Media

July 16, 2011

HT Media | 1QFY2012 Result Update

July 18, 2011 2

Exhibit 1: Quarterly performance (Consolidated) Y/E March (` cr) 1QFY12 1QFY11 % yoy 4QFY11 % qoq FY2011 FY2010 % chg

Net Sales 494.4 402.8 22.7 467.2 5.8 1,764.6 1,412.9 24.9

Consumption of RM 172.4 130.3 32.3 164.9 4.6 624.9 476.0 31.3

(% of Sales) 34.9 32.3 35.3 35.4 33.7 Staff Costs 88.0 74.9 17.5 76.6 14.9 300.9 252.0 19.4

(% of Sales) 17.8 18.6 16.4 17.1 17.8 Advertising 33.1 28.5 15.8 38.5 (14.0) 135.3 115.9 16.8

(% of Sales) 6.7 7.1 8.2 7.7 8.2 Other Expenses 113.2 90.5 25.0 102.9 10.0 389.2 319.2 21.9

(% of Sales) 22.9 22.5 22.0 22.1 22.6 Total Expenditure 406.6 324.3 25.4 382.8 6.2 1,450.3 1,163.0 24.7

Operating Profit 87.8 78.6 11.8 84.4 4.0 314.3 249.9 25.8

OPM (%) 17.8 19.5 18.1 17.8 17.7 Interest 5.3 6.4 (17.5) 7.1 (25.6) 23.6 29.5 (20.0)

Depreciation 21.4 19.4 10.0 22.0 (2.7) 84.2 70.7 19.1

Other Income 17.1 7.2 138.5 14.9 14.8 50.6 40.9 23.8

PBT (excl. Ext Items) 78.2 59.9 30.6 70.2 11.4 257.1 190.6 34.9

Ext Income/(Expense) - - - - (2.1) PBT (incl. Ext Items) 78.2 59.9 30.6 70.2 11.4 257.1 188.5 36.4

(% of Sales) 15.8 14.9 15.0 14.6 13.3 Provision for Taxation 24.3 19.8 22.9 16.6 45.9 71.3 53.7 32.9

(% of PBT) 31.0 33.0 23.7 27.7 28.5 Recurring PAT 54.0 40.2 34.4 53.6 0.7 185.8 136.9 35.7

PATM 10.9 10.0 11.5 10.5 9.7 Minority Interest 2.5 (1.2) 0.6 (4.9) 1.1 Reported PAT 51.5 41.4 24.5 52.9 (2.7) 180.9 135.9 33.1

Equity shares (cr) 23.5 23.5 23.5 23.5 23.5 EPS (`) 2.2 1.8 24.5 2.3 (2.7) 7.7 5.8 33.1


Exhibit 2: Revenue highlights (Consolidated)

(` cr) 1QFY12 1QFY11 % yoy 4QFY11 % qoq

Consolidated sales 494.4 402.8 22.7 467.2 5.8

Hindi 149.1 132.8 12.3 130.6 14.2

English 345.3 270.0 27.9 336.6 2.6

Advertising 384.4 328.9 16.9 363.5 5.7

Hindi 110.8 96.3 15.1 93.9 18.0

English 273.6 232.6 17.6 269.6 1.5

Circulation 48.5 46.8 3.6 46.9 3.4

Hindi 33.1 32.3 2.5 30.7 7.8

English 15.4 14.5 6.2 16.2 (4.9)

Radio 21.5 12.3 74.8 25.8 (16.7)

Internet 8.6 6.2 38.7 3.7 132.4

Core revenue 463.0 394.2 17.5 439.9 5.3

Others 31.4 8.6 263.7 54.5 (42.4)



July 18, 2011 3

Strong top-line growth at 22.7% yoy, but modest at 5.8% qoq

HT Media posted strong top-line growth of 22.7% yoy/5.8% qoq to `494cr (`402cr/`467cr), driven by 27.9% yoy growth in the English print and 12.3% yoy growth in the Hindi print segments. On a sequential basis, Hindustan reported strong advertising revenue of `110.8cr (`93.9cr in 4QFY2011), while HT and Mint together reported flattish advertising revenue growth of 1.5% to `273.6cr (`269.6cr in 4QFY2011).

Consolidated circulation revenue recorded flat growth of 3.6% yoy/3.4% qoq to `48.5cr, aided by increased realisations. During the quarter, Hindustan’s circulation revenue increased by 2.5% yoy/7.8% qoq to `33.1cr with circulation of ~21.5lac copies, while HT and Mint reported growth of 6.2% yoy/decline of 4.9% qoq to `15.4cr in circulation revenue. Total circulation for the quarter stood at ~39 lakh copies, of which ~9.5 lakhs were reported in Delhi and ~4.5 lakhs were registered in Mumbai. Exhibit 3: Top-line growth (Consolidated)


Exhibit 4: English/Hindi ad-rev. up yoy but down qoq


Exhibit 5: Circulation rev. growth ftat yoy/qoq at ~3.5%


330 350 359 374 403

431 464 467

494

-

100

200

300

400

500

600

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

(`cr

)

269 282 291 302 329 329 370 364 384

(10)(5)-5 10 15 20 25 30

-

100

200

300

400

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

(%)

(`cr

)

Ad revenue (LHS) yoy growth (RHS)

44

48 48 43 47

42

47 47 49

(20)

(10)

-

10

20

30

40

38

40

42

44

46

48

50

1Q

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10

1Q

11

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3Q

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4Q

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1Q

12

(%)

(`cr

)

Circ. revenue (LHS) yoy growth (RHS)


July 18, 2011 4

Amongst other segments, new businesses registered significant revenue traction. The radio business reported robust top-line growth of 74.8% yoy to `21.5cr (`12.3cr) on account of increased advertising, while the internet business contributed `8.6cr to the overall revenue.

During 1QFY2012, Burda JV contributed `24.5cr as against ~`2.4cr in 1QFY2011. We expect the Burda JV to contribute ~`80cr and ~`90cr to FY2012 and FY2013 top line, respectively.

Recurring earnings growth robust at 34.4% yoy despite gross margin pressure

In terms of earnings, HT Media posted 1) robust growth of 34.4% yoy to `54cr (`40.2cr) on a recurring basis and 24.5% yoy growth to `51.5cr (`41.4cr) on a reported basis, despite gross margin pressures; 2) 10% yoy increase in depreciation to `21.4cr (`19.4cr), aided by high other income (up 138.5% yoy) to `17.2cr; and 3) ~200bp yoy decline in tax rate. The company’s radio business reported profit of `2.6cr. The internet business of the company, however, continued to report loss of `12cr (loss of `10.8cr in 4QFY2011).

Exhibit 6: Recurring PAT reports strong growth...


Exhibit 7: ...despite under-pressure OPM and GM


OPM under pressure yoy on high start-up costs and newsprint prices

At the operating level, HT Media posted a 174bp yoy contraction in operating margins despite a decrease in staff cost (down 80bp yoy) and advertising expenses (down 40bp yoy). High newsprint cost and cost of goods from Burda JV (recorded newsprint cost of `16cr this quarter) resulted in a decline in gross margins (contracted by significant 253bp yoy/expanded marginally by 42bp qoq), resulting in operating margin contraction of 174bp yoy. Newsprint cost for the quarter stood at ~`32,200/tonne.

In terms of segments, HTML recorded EBIT margin contraction of 78bp yoy to 16.1% (16.9%), on account of a decline in EBIT margin of the company’s print business (recorded EBIT of `89.4cr and EBIT margin contraction of 141bp yoy to 19.2%) and higher loss in the internet business. The radio business of the company reported profit of `2.6cr and EBIT margin of 12% yoy.

28 28 37

49 40 42

50 54 54

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2

4

6

8

10

12

14

-5

10 15 20 25 30 35 40 45 50

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

(%)

(`cr

)

Recurring PAT (LHS) NPM (RHS)

15.4 15.5 18.8 21.5 19.5 15.0

18.7 18.1 17.8

62.5 64.7 68.4 69.1 67.7

61.7 64.4 64.7 65.1

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

(%)

OPM Gross margins


July 18, 2011 5

Exhibit 8: Segmental performance (Consolidated) Y/E March (` cr) 1QFY12 1QFY11 % chg FY2011 FY2010 % chg

Revenue Printing 467.0 387.4 20.5 1,677.5 1,391.5 20.6

Radio 21.5 12.3 74.6 70.4 43.1 63.5

Internet 8.6 6.2 39.0 31.6 5.6 463.1

Unallocated 0.7 1.2 (43.8) 15.6 6.5 139.6

Total revenue 497.7 407.1 22.3 1,795.1 1,446.6 24.1

Less: Inter segment 0.8 2.0 9.1 7.5 Less: Other Op Inc 2.5 2.2 21.5 26.2 Total net sales 494.4 402.8 22.7 1,764.6 1,412.9 24.9

EBIT Printing 89.4 79.7 12.3 287.0 263.4 9.0

Radio 2.6 (1.2) (309.0) 7.6 (5.9) -

Internet (12.0) (9.8) 21.8 (39.7) (37.8) 5.0

Total EBIT 80.0 68.6 16.6 255.0 219.8 16.0

EBIT margin (%) 16.1 16.9 (78) 14.2 15.2 (99)

Source: Company, Angel research

Investment Rationale

Healthy ad revenue growth, Burda JV to scale up top line: HTML recorded

impressive ad revenue during the quarter, with yoy growth of 17.6% in English

print and 15.1% yoy/18% qoq in Hindi print, despite tough macroeconomic

conditions. We estimate this growth in ad revenue to prolong with the English

(HT and Mint) and Hindi print businesses (HMVL) posting CAGRs of 12% and

18% over FY2011–13, respectively. Hindustan’s ad revenue will grow maximum

in UP (we peg a CAGR of ~20% over FY2011–13), while HT Mumbai will be the

maximum growth driver for the English print’s ad revenue (we peg a CAGR of

~13% over FY2011–13). Burda, which has recently achieved EBITDA breakeven,

is likely to contribute ~`80cr in FY2012 and ~`90cr in FY2013 to the top line.

New businesses continue to grow, expect OPM of ~18% over FY2011–13: In

terms of operating performance, HTML continued to grow in its new businesses

during the quarter (radio and internet gained traction). The radio business

continued to be EBITDA positive and posted EBIT profit of ~`2.6cr. Going

forward, we believe continuous improvement in ad yields will help HTML post

margins of ~18% during FY2012–13. Newsprint cost for the quarter stood at

~`32,200/tonne (which is in-line with our estimates); hence, we are not

changing our estimates for newsprint prices. We have factored a ~15% CAGR

in newsprint cost over FY2011–13E. The company has recently entered into

the education segment through a JV with Mahesh Tutorials under the brand

name Studymate. Management has earmarked capex of ~`80cr for this

business for FY2012.


July 18, 2011 6

Outlook and valuation

We have marginally tweaked our estimates post the results. At the CMP of `166, HTML is trading at 17.0x FY2013E consolidated EPS of `9.8. We expect ad revenue growth momentum to continue at the current healthy pace and do not see any negative surprise on the margin front. We maintain our Accumulate view on the stock with a target price of `177, based on 18x FY2013E earnings.

Downside risks to our estimates include – 1) sharp rise in newsprint prices, 2) increased competition and 3) higher-than-expected losses or re-investment in growing businesses (radio, Mint and internet).

Exhibit 9: Change in estimates Old Estimate New Estimate % chg

(` cr) FY2012E FY2013E FY2012E FY2013E FY2012E FY2013E

Revenue 2,000 2,241 2,010 2,255 0.5 0.6

OPM (%) 18.1 18.2 18.2 18.3 10 14

EPS 8.8 9.7 8.8 9.8 (0.3) 1.4



July 18, 2011 7

Exhibit 10: Key assumptions (` cr) FY2009 FY2010 FY2011 FY2012E FY2013E CAGR (%)

Advt. revenue 1,133 1,141 1,392 1,592 1,787 16.1

HT / Mint 890 844 1,015 1,137 1,264 11.6

Hindustan 244 297 376 455 523 17.9

Circ. revenue 154 183 179 204 228 13.0

HT / Mint 49 63 56 57 58 1.4

Hindustan 105 121 122 147 170 17.9

Radio revenue 29 41 63 75 84 15.5

Burda JV - 5 62 80 90 20.5

Others 30 42 69 59 65 (2.9)

Total revenue 1,347 1,413 1,765 2,010 2,255 13.0

yoy growth (%) Advt. revenue 11.9 0.7 22.0 14.4 12.3 HT / Mint 5.0 (5.1) 20.2 12.0 11.1 Hindustan 47.7 21.5 27.0 20.8 15.0 Circ. revenue 2.5 19.0 (2.4) 14.0 12.0 HT / Mint (7.5) 27.6 (9.6) 0.3 2.6 Hindustan 8.0 15.0 1.3 20.4 15.6 Radio revenue 54.3 42.1 52.9 19.0 12.0 Burda JV 1,052.4 29.0 12.5 Others 39.4 39.8 64.1 (14.1) 9.7

% of total Advt. revenue 84.2 80.8 78.9 79.2 79.3 Circ. revenue 11.4 13.0 10.1 10.1 10.1 Radio revenue 2.2 2.9 3.6 3.7 3.7 Burda JV - 0.4 3.5 4.0 4.0 Others 2.2 3.0 3.9 3.0 2.9

Source: Company, Angel Research; Note: CAGR is for FY2011–13E


July 18, 2011 8

Exhibit 11: Peer Valuation

Company Reco Mcap CMP TP Upside P/E (x) EV/Sales (x) ROE(%) CAGR #

(` cr) (`) (`) (%) FY12E FY13E FY12E FY13E FY12E FY13E Sales PAT

HT Media Accumulate 3,920 167 177 6.1 19.0 17.0 2.0 1.8 14.7 14.4 12.9 13.0

Jagran Buy 3,536 112 161 44.0 15.4 13.9 2.8 2.5 33.2 34.4 9.1 10.1

DB Corp Buy 4,199 229 335 46.2 16.5 13.9 3.0 2.5 27.9 27.3 8.3 5.9

Source: Company, Angel Research, Note:^ denotes consensus data, #denotes CAGR for FY2010-13E

Exhibit 12: Angel v/s Consensus estimates Top-line (` cr) FY2012E FY2013E EPS (`) FY2012E FY2012E

Angel estimates 1,984 2,252 Angel estimates 8.2 9.8

Consensus 2,001 2,296 Consensus 9.2 11.1 Diff (%) (0.8) (1.9) Diff (%) (10.7) (11.8)


Exhibit 13: Return of HT Media v/s Sensex


Exhibit 14: One –year forward P/E band


80%85%90%95%

100%105%110%115%120%

Jul-1

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Jul-1

1

Sensex HT Media

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7

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8

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Shar

e Pr

ice

(`)

10x 20x 30x 40x


July 18, 2011 9

Profit & Loss Statement (Consolidated) Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

Gross sales 1,203 1,347 1,413 1,767 2,010 2,255

Less: Excise duty - - - - - -

Net Sales 1,203 1,347 1,413 1,767 2,010 2,255

Total operating income 1,203 1,347 1,413 1,767 2,010 2,255

% chg 15.7 11.9 4.9 25.1 13.7 12.1

Total Expenditure 1,033 1,259 1,163 1,450 1,644 1,841

Cost of Materials 497 595 515 671 771 881

SG&A 289 354 318 390 440 480

Personnel 198 242 252 301 334 372

Others 49 68 78 89 101 108

EBITDA 170 88 250 317 366 414

% chg 0.7 (48.3) 184.4 26.9 15.4 13.0

(% of Net Sales) 14.1 6.5 17.7 17.9 18.2 18.3

Depreciation& Amortisation 57 69 71 84 90 107

EBIT 113 19 179 233 276 307

% chg (9.7) (83.1) 839.6 30.0 18.4 11.1

(% of Net Sales) 9.4 1.4 12.7 13.2 13.7 13.6

Interest & other Charges 18 32 30 24 19 15

Other Income 44 33 41 48 56 59

(% of PBT) 31.6 166.6 21.5 18.6 17.9 16.8

Share in profit of Associates - - - - - -

Recurring PBT 139 20 191 257 313 350

% chg (5.3) (85.7) 860.7 34.9 21.8 11.8

Extraordinary Expense/(Inc.) - 19 2 - - -

PBT (reported) 139 1 188 257 313 350

Tax 38 12 54 71 88 98

(% of PBT) 27.1 62.9 28.2 27.7 28.0 28.0

PAT (reported) 101 (12) 135 186 225 252

Add: Share of associates - - - - - -

Less: Minority interest (MI) 0 (13) (1) 5 19 21

PAT after MI (reported) 101 1 136 181 206 231

ADJ. PAT 101 20 138 181 206 231

% chg 4.6 (80.3) 589.8 31.1 14.0 12.1

(% of Net Sales) 8.4 1.5 9.8 10.2 10.3 10.3

Basic EPS (`) 4.3 0.9 5.9 7.7 8.8 9.8

Fully Diluted EPS (`) 4.3 0.9 5.9 7.7 8.8 9.8

% chg 4.6 (80.3) 589.8 31.1 14.0 12.1


July 18, 2011 10

Balance Sheet (Consolidated) Y/E March (` cr) FY2008 FY2009 FY2010E FY2011 FY2012E FY2013E

SOURCES OF FUNDS

Equity Share Capital 47 47 47 47 47 47

Preference Capital - - 0 0 - -

Reserves& Surplus 806 802 924 1,255 1,449 1,667

Shareholders’ Funds 853 849 971 1,302 1,496 1,714

Minority Interest 0 (7) 22 130 149 170

Total Loans 223 371 402 312 247 202

Deferred Tax Liability 12 21 18 (9) (9) (9)

Total Liabilities 1,088 1,233 1,413 1,736 1,884 2,077

APPLICATION OF FUNDS

Gross Block 701 823 1,033 1,213 1,363 1,646

Less: Acc. Depreciation 177 247 322 408 498 605

Net Block 524 576 712 805 865 1,041

Capital Work-in-Progress 59 196 129 19 164 197

Goodwill - - - - - -

Investments 266 304 475 760 685 685

Current Assets 520 698 671 756 1,006 1,075

Cash 77 71 109 115 200 173

Loans & Advances 129 232 200 242 292 327

Other 314 396 362 398 514 575

Current liabilities 280 540 576 604 835 920

Net Current Assets 240 158 95 152 171 154

Misc Exp 0 - 2 - - -

Total Assets 1,088 1,233 1,413 1,736 1,884 2,077

Cash Flow Statement (Consolidated) Y/E March (` cr) FY2008 FY2009 FY2010E FY2011 FY2012E FY2013E

Profit before tax 139 1 188 257 313 350

Depreciation 57 69 71 84 90 107

Change in Working Capital (19) 132 66 (41) 43 (10)

Interest / Dividend (Net) (11) 12 15 (6) (6) (15)

Direct taxes paid 60 20 41 71 88 98

Others 3 6 (6) 51 22 (3)

Cash Flow from Operations 110 199 293 274 375 331

(Inc.)/ Dec. in Fixed Assets (120) (259) (144) (70) (294) (317)

(Inc.)/ Dec. in Investments (62) (82) (133) (284) 75 0

Cash Flow from Investing (182) (341) (277) (354) (219) (317)

Issue of Equity 0 0 (2) 180 0 0

Inc./(Dec.) in loans 57 148 31 (90) (65) (45)

Dividend Paid (Incl. Tax) 8 11 8 10 11 12

Interest / Dividend (Net) 10 2 (1) (6) (6) (15)

Cash Flow from Financing 39 135 22 86 (70) (42)

Inc./(Dec.) in Cash (33) (7) 38 7 85 (28)

Opening Cash balances 110 77 71 109 115 200

Closing Cash balances 77 71 109 115 200 173


July 18, 2011 11

Key Ratios Y/E March FY2008 FY2009 FY2010E FY2011 FY2012E FY2013E

Valuation Ratio (x)

P/E (on FDEPS) 38.6 195.3 28.4 21.7 19.0 17.0

P/CEPS 24.7 44.0 18.8 14.8 13.2 11.6

P/BV 4.6 4.6 4.0 3.0 2.6 2.3

Dividend yield (%) 0.2 0.2 0.2 0.2 0.3 0.3

EV/Sales 3.4 3.1 3.0 2.3 2.0 1.8

EV/EBITDA 23.9 48.0 16.9 13.0 10.8 9.6

EV / Total Assets 3.7 3.4 3.0 2.4 2.1 1.9

Per Share Data (`)

EPS (Basic) 4.3 0.9 5.9 7.7 8.8 9.8

EPS (fully diluted) 4.3 0.9 5.9 7.7 8.8 9.8

Cash EPS 6.8 3.8 8.9 11.3 12.6 14.4

DPS 0.4 0.3 0.4 0.4 0.4 0.5

Book Value 36.4 36.2 41.3 55.4 63.7 72.9

DuPont analysis

EBIT margin 9.4 1.4 12.7 13.2 13.7 13.6

Tax retention ratio 0.7 0.4 0.7 0.7 0.7 0.7

Asset turnover (x) 1.8 1.7 1.7 2.1 2.2 2.0

ROIC (Post-tax) 12.1 0.9 15.3 19.9 21.4 19.9

Cost of Debt (Post-tax) 0.1 0.0 0.1 0.0 0.0 0.0

Leverage (x) (0.2) (0.1) (0.1) (0.3) (0.4) (0.4)

Operating ROE 9.9 0.8 13.8 13.8 12.2 11.9

Returns (%)

RoCE 11.0 1.6 13.5 14.8 15.2 15.5

Angel RoIC (Pre-tax) 11.0 0.8 15.5 19.6 19.9 18.1

RoE 12.5 2.4 15.2 15.9 14.7 14.4

Turnover ratios (x)

Asset Turnover 1.7 1.6 1.4 1.5 1.5 1.4

Inventory / Sales (days) 35 48 31 30 32 32

Receivables (days) 60 60 63 52 61 61

Payables (days) 78 142 142 115 143 141

Net Working capital (days) 49 24 (4) 8 (5) (3)

Solvency ratios (x)

Net Debt to equity (0.1) (0.0) (0.2) (0.4) (0.4) (0.4)

Net Debt to EBITDA (0.7) (0.0) (0.7) (1.8) (1.7) (1.6)

Interest Coverage 6.3 0.6 6.1 9.9 14.7 19.9


July 18, 2011 12

Research Team Tel: 022 - 3935 7800 E-mail: [email protected] Website: www. angelbroking.com

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Disclosure of Interest Statement HTML 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors. Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%)

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