research investment idea 06 may 2017 tata...

PCG RESEARCH INVESTMENT IDEA 06 May 2017

Tata Motors

Private Client Group - PCG RESEARCH P a g e | 1

Industry CMP Recommendation Buying Range Target Time Horizon

AUTO Rs. 420 BUY at CMP and add on

Declines Rs. 420-380 Rs. 498 12 Months

Updates Related to BS III Vehicles

HDFC Scrip Code TELLTD

BSE Code 500570

NSE Code TATAMOTORS

Bloomberg TTMT

CMP as on 05 May - 17

420

Equity Capital (Rs Cr) 679

Face Value (Rs) 2

Equity O/S (Cr) 289

Market Cap (Rs cr) 121200

Book Value (Rs) 269

Avg. 52 Week Volumes

8082270

52 Week High 599

52 Week Low 376

Shareholding Pattern (%)

Promoters 34.7

Institutions 56.9

Non Institutions 8.4

PCG Risk Rating* Yellow

* Refer to Rating explanation

Kushal Rughani [email protected]

Company Background

Tata Motors, a Tata Group enterprise is engaged in manufacturing of motor vehicles. The Company is

engaged mainly in the business of automobile products consisting of all types of commercial and passenger

vehicles, including financing of the vehicles sold by the Company. The Company's segments include

automotive operations and all other operations. The Company's automotive segment operations include all

activities relating to the development, design, manufacture, assembly and sale of vehicles, including vehicle

financing, as well as sale of related parts and accessories. In the automotive segment, the Company

manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy

commercial vehicles. Company has its subsidiary Jaguar Land Rover (JLR) through which it sells Jaguar and

Land Rover cars across the world. The Company's all other operations segment mainly includes information

technology (IT) services, and machine tools and factory automation services. The Company operates in

over 160 countries across the world.

Investment Rationale

Tata Motors posted cumulative sales volumes of 5.43 lakhs in FY17

Cumulative sales (including exports) of the company for the fiscal was at 542,561 nos., higher by 6% over

511,705 vehicles, sold last year. Cumulative sales of commercial vehicles in the domestic market for the

fiscal was up by 1% at 385,373 nos. over last year. Passenger vehicles in the domestic market for the fiscal

were at 153,151, a growth of 22% compared to 125,946.

Aims Sales of 2.5 lakhs Passenger Vehicles in domestic market in FY18

Tata Motors has set an aggressive passenger vehicle sales target for 2017-18. The company aims to sell

250,000 units of cars and utility vehicles in the year FY18.

Tata Motors is hoping the domestic operations will be able to swing back to profitability by 2018-19. If the

company is able to meet the targets, the sales would be the highest in four years. The company had sold

3,71,350 passenger vehicle units in 2012-13.

In the year FY17, Tata Motors had sold 1,72,504 units, up 15% from a year ago, against 1,49,420 units a

year ago.

Investment Rationale:

mailto:[email protected]

PCG RESEARCH


Updates Related to BS III Vehicles

Tata Motors, the country’s largest commercial vehicle maker, said today that it has an unsold Bharat Stage

III (BS-3) stock of 15,000 trucks and buses which it intends to export, upgrade to BS-4 and dismantle for

other use.

Around 8,000-8,500 of the BS-3 lot will be exported to Nepal, Sri Lanka and Bangladesh on as-is-where-is-

basis, the shipments of which has already begun. About 90 percent of the remaining 6,500-7,000 will be

upgraded to BS-4, a senior company executive said today.

Of the 15,000 units about 4,000 are medium and heavy duty vehicles and the rest are small commercial

vehicles. Vehicles like Ace and Magic, which are SCVs, will be converted to BS IV.

Conference Call Updates

Management commented that the third quarter had been disappointing with both India business and

Jaguar Land Rover facing headwinds.

India business has gone deep into the red on account of lower M&HCV volumes and higher variable

marketing expenses.

India capex guidance has been increased to Rs 35bn-40bn for FY18/FY19.

Overall, 60% of the capex spend would be towards passenger vehicle segment while the balance

would be towards the commercial vehicle segment.

Free cash has been negative on a consolidated basis on account of weakness in the domestic

business.

Management continues to aspire to increase domestic business margins to higher levels in the coming

years.

Management has indicated that JLR related variable marketing expenses are expected to rise in CY17

vis-à-vis CY16 on account of increasing competitive intensity and moderating demand trends across

major markets like North America and China.

PCG RESEARCH


JLR sales volumes for Apr 2017

Jaguar Land Rover, the UK's leading manufacturer of premium luxury vehicles reported April sales of 40,385,

down 2.3% yoy. The company sold 219,891 vehicles in the first four months of 2017, up 9.9% compared to

the same period a year ago.

Retail sales for the month of April were up in North America (32.5%), China (10.1%) and Europe (2.7%), but

down in the UK (34.6%) and in other Overseas markets (19.7%) year-on-year.

JLR Numbers

Apr-17 Apr-16 YOY (%) Jan – Apr’17 YOY (%)

JLR 40385 41270 -2 219891 10

Jaguar 12310 7987 54 66279 75

Land Rover 28075 33283 16 153612 -5

Source: Company, HDFC sec Research

Highlights of the third quarter results

Domestic business recovery underway: The management indicated that the new launch of Hexa has received

good response, and has a waiting period of 2 months. The launch pipeline also looks strong with Tata Tigor

and Nexon. Overall growth momentum for tippers and buses is expected to continue in FY18. The

management targets to procure 60% market share (from ~55% currently) over the next 2 years, led by the

launch of the new Signa range of trucks.

JLR business setback: Management guided that the hedging losses of GBP 450mn could continue for the next

few quarters. Overall, the management has maintained its medium-term margin guidance of 14-15%.

However, in the short term, JLR will continue to face headwinds owing to currency hedges. Model mix is likely

to turn favourable as Discovery would be launched in Q4 FY17, thereby improving margins.

Tata Motors’ Q3 FY17 performance was disappointing due to weakness in both JLR as well as domestic

business. JLR’s EBITDA margin stood at 9.3%, down 500bps YoY impacted by an adverse product mix and

higher discounting (Discovery run-out in US). However, if revenue is adjusted to include forex hedging gains,

margins would be ~10.1%. The India business lost ground with an EBITDA margin of 1.5%, driven down by

a weak mix and higher discounts.

The management sounded confident of volume momentum sustaining in JLR/India, in the light of a strong

launch pipeline. However, in the near term, margins are likely to be under pressure. In India, the

management has taken steps to improve profitability and market share in the CV business.

PCG RESEARCH


Recommend BUY with TP of Rs 498

In FY17, Tata Motors has posted 6% volume growth in domestic market led by strong 22% rise from

passenger vehicles volumes while we expect the growth momentum to accelerate and see 11% cagr over

FY17-19E which would in turn drive profitability in the domestic business as well. We estimate 9% revenues

cagr led by healthy business growth from Domestic market and strong growth momentum from JLR sales

over FY16-19E.

JLR has young product portfolios especially in luxury SUV market. We expect recent launches and new

product pipeline from JLR to result in robust sales growth. Post its current capex cycle, we expect operating

leverage to kick-in from FY18. We expect 160bps expansion in operating margin led by operational efficiency

over the same period. We forecast 10% PAT cagr led by strong revenues and operating performance over

FY16-19E.

We recommend BUY on Tata Motors at CMP of Rs 420 and add on dips to Rs 380 with TP of Rs 498. The

stock trades at ~8.7x/~8x FY18E/19E EPS. Our SOTP-based valuation comes to Rs 498 (assigning 3.7x

FY19E EV/EBITDA to consolidated EBITDA; implied ~9.5x FY19E consol EPS). We are fairly confident on

strong domestic business turnaround and change in JLR growth fortune post SUV launches. Key risks to our

assumptions would be a) sharp slowdown in global and Chinese luxury car demand, b) lack of product

acceptability in domestic PV business and c) maintaining cost advantage in CV business post BS VI.

PCG RESEARCH


Quarterly Financials Snapshot (Consolidated)


Margin Analysis (Consolidated)

3QFY17 3QFY16 YoY (bps) 2QFY17 QoQ (bps)

Material Expenses As % Of Net Sales 59.2 60.3 (108) 59.6 (35)

Employee Expenses As % Of Net Sales 10.4 10.3 14 10.3 12

Other Expenses As % Of Net Sales 21.5 15.2 626 19.4 204

EBITDA Margin (%) 8.8 14.2 (532) 10.7 (181)

Net Profit Margin (%) 380.3 15.8 36,454 43.2 33,712

Tax Rate (%) 0.2 4.9 (469) 1.3 (112) Source: Company, HDFC sec Research

Particulars 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)

Net Sales 675,313 722,564 (6.5) 659,004 2.5

Material Expenses 400,123 435,890 (8.2) 392,758 1.9

Employee Expenses 70,446 74,380 (5.3) 67,939 3.7

Other Operating Expenses 144,991 109,930 31.9 128,062 13.2

EBITDA 59,753 102,365 (41.6) 70,245 (14.9)

Depreciation 42,300 43,391 (2.5) 44,540 (5.0)

EBIT 17,454 58,974 (70.4) 25,705 (32.1)

Other Income 1,674 1,806 (7.3) 1,794 (6.7)

Interest Cost 8,707 10,915 (20.2) 10,249 (15.0)

Product Development Cost 8,141 8,565 (5.0) 7,420 9.7

PBT 2,280 41,300 (94.5) 9,831 (76.8)

Tax 8,670 6,513 33.1 4,246 104.2

RPAT (6,390) 34,787 (118.4) 5,585 (214.4)

Share of profits in associates/JVs 3,799 36 10,602.3 2,735 38.9

EO Items (Adj For Tax) (3,706) (457) 711.0 (162) 2,192.1

APAT 1,116 35,075 (96.8) 8,482 (86.8)

Adj EPS 0.3 10.3 (96.8) 2.5 (86.8)

PCG RESEARCH


Quarterly Financials Snapshot (Standalone)

(Rs mn) 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)

CV (Domestic, in units) 74,808 78,294 (4.5) 73,857 1.3

PV (Domestic, in units) 40,771 31,384 29.9 43,359 (6.0)

Exports (in units) 17,078 12,699 34.5 17,653 (3.3)

Total volumes (in units) 132,657 122,377 8.4 134,869 (1.6)

Net Sales 102,199 100,006 2.2 103,225 (1.0)

Material Expenses 74,791 71,596 4.5 74,225 0.8

Employee Expenses 8,454 7,811 8.2 8,817 (4.1)


EBITDA 1,534 5,686 (73.0) 3,761 (59.2)

Depreciation 7,290 6,054 20.4 7,186 1.4

EBIT (5,756) (368) 1,464.4 (3,425) 68.0

Other Income 940 4,733 (80.1) 1,460 (35.7)

Interest Cost 4,137 3,456 19.7 3,728 11.0

Product Development Cost 770 1,073 (28.3) 699 10.1

PBT (9,723) (164) 5,817.7 (6,391) 52.1

Tax 143 (24) (704.6) 218 (34.4)

RPAT (9,866) (141) 6,917.1 (6,610) 49.3

EO Items (Adj For Tax) 593 1,868 (68.3) (302) (296.3)

APAT (9,866) (141) 6,917.1 (6,610) 49.3

Adj EPS (3.1) (0.0) 6,917.1 (2.1) 49.3 Source: Company, HDFC sec Research

PCG RESEARCH


Quarterly Financials Snapshot (JLR - IFRS)

In GBP mn 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)

Retail Volumes (‘000 units) 901.4 137.7 554.9 142.5 532.8

Wholesale Volumes –Ex-CJLR (‘000 units) 129.8 137.6 (5.7) 124.2 4.5

Revenue 6,537 5,781 13.1 5,953 9.8

Material Expenses 3,869 3,496 10.7 3,527 9.7

Employee Expenses 648 582 11.3 585 10.8


Product Development Expense (379) (323) 17.3 (371) 2.2

EBITDA 611 834 (26.7) 615 (0.7)

Interest Cost 5 10 (50.0) 7 (28.6)

Depreciation 409 357 14.6 410 (0.2)

Debt/Unrealised MTM Loss/(Gain) (62) 20 (410.0) (50) 24.0

Share Of Profit/(Loss) From JV 35 22 59.1 33 6.1

PBT 294 469 (37.3) 281 4.6

Exceptional Item 85 30 183.3 (1) -

Tax 88 59 49.2 36 144.4

RPAT 206 410 (49.8) 245 (15.9)

APAT 291 440 (33.9) 244 19.3 Source: Company, HDFC sec Research

PCG RESEARCH


JLR: Key Financial Highlights / Model Assumptions in £Mn FY15 FY16 FY17E FY18E FY19E

Revenue 21,866 22,208 24,134 27,750 36,158 % YoY 12.8 1.6 8.7 15.0 30.3

Wholesales Volumes Incl CJLR (in '000) 471 544 532 586 655 % growth 9.5 15.6 (2.2) 10.2 11.6

Net ASP 46,875 43,602 46,057 46,805 55,240 % YoY 3.9 (7.0) 5.6 1.6 18.0 Expenditure

Material Cost 13,185 13,146 15,011 17,067 22,563 % Of Sales 60.3 59.2 62.2 61.5 62.4 Employee Cost 1,977 2,321 2,655 2,969 3,254 % Of Sales 9.0 10.5 11.0 10.7 9.0 Other Expenses 3,730 4,670 5,068 5,550 6,147 % Of Sales 17.1 21.0 21.0 20.0 17.0 Add back R&D Cost (1,411) (1,560) (1,750) (1,820) (1,500) % Of Sales (6.5) (7.0) (7.3) (6.6) (4.1) R&D Cost Expensed 253 318 350 364 270 Total 17,734 18,895 21,334 24,130 30,734 % Of Sales 81.1 85.1 88.4 87.0 85.0

EBITDA 4,132.0 3,313.0 2,799.8 3,620.5 5,424.3 EBITDA margin % 18.9 14.9 11.6 13.0 15.0

Other Income - - - - - Depreciation And Amortisation 1,051 1,403 1,655 1,834 2,153 Interest Expense 87 54 45 45 19 Forex gain/(loss) (373) (27) - - - Share Of Profit/(Loss) From Joint Venture (7) 66 111 170 - % Of Sales (0.0) 0.3 0.5 0.6 - PBT 2,614 1,895 1,211 1,911 3,253 % Of Sales 12.0 8.5 5.0 6.9 9.0 Tax 576 247 267 422 862

Tax rate % 22.0 13.0 22.0 22.1 26.5

APAT 2,038 1,649 944 1,489 2,391 % Of Sales 9.3 7.4 3.9 5.4 6.6 RPAT 2,038 1,326 944 1,489 2,391 % Of Sales 9.3 6.0 3.9 5.4 6.6 Source: Company, HDFC sec Research

PCG RESEARCH


Standalone: Key Financial Highlights/ Model Assumptions

Rs in Mn FY15 FY16 FY17E FY18E FY19E

Vehicle Sales (in units)

CV (Domestic) 329,943 327,730 330,211 360,783 408,961

PV (Domestic) 133,304 125,945 148,151 171,206 191,942

Exports 49,917 57,991 64,199 69,601 76,207

Total 513,164 511,666 542,561 601,590 677,111

% YoY (9.4) (0.3) 5.8 11.3 12.6

Net Sales 358,905 419,480 442,323 494,706 583,108

% YoY 5.8 16.9 5.4 11.8 17.9

Other Operating Income 4,042 4,218 4,640 5,104 5,614

Total Income From Operations 362,948 423,698 446,963 499,810 588,723

Expenditure

RM Cost 270,417 295,953 313,768 339,371 406,219

% Of Sales 75.3 70.6 70.9 68.6 69.7

Employee Cost 30,915 30,267 34,564 38,200 41,136

% Of Sales 8.6 7.2 7.8 7.7 7.1

Other 66,518 70,076 78,654 85,775 92,384

% Of Sales 18.5 16.7 17.8 17.3 15.8

Total Expenses 367,849 396,296 426,985 463,346 539,739

% Of Sales 94.0 85.7 87.5 84.9 83.8

EBITDA (4,901) 27,402 19,977 36,464 48,984

EBITDA Margin % (1.4) 6.5 4.5 7.4 8.4

Other Income 18,815 14,765 17,188 17,645 17,877

Product Development Expenses 4,375 4,246 4,500 5,000 5,600

Depreciation 26,032 24,538 27,492 29,960 29,920

Interest 16,117 14,811 13,196 12,889 9,966

PBT (Pre-exceptional Items) (32,610) (1,427) (8,023) 6,260 21,376

PBT (Pre-exceptional And JLR Dividend) (47,460) (15,745) (22,423) (8,140) 21,376 Source: Company, HDFC sec Research

PCG RESEARCH


SOTP Valuation

Valuation methodology Multiple Per share

Standalone EV / EBIDTA on Dec 18E 7.5 101

JLR EV / EBIDTA on Dec 18E 3.8 368

China JV EV / EBIDTA on Dec 18E 4.0 43

Other Subsidiaries P/E, P/BV on Dec 18E

28

Less: Net Automotive Debt

(42)

Target Price 498

Source: HDFC sec Research

Financial Summary

In Rs bn New

FY17E FY18E FY19E

JLR Volume(Units) 532,254 586,413 654,566

Standalone Volume(Units) 540,462 601,590 677,111

Net Sales 2,728 3,137 3,545

EBITDA 347 469 540

Adj PAT 117 168 184

Adj EPS 34.5 49.3 54.2

Source: HDFC sec Research

PCG RESEARCH


JLR Model Mix Weak Again JLR: China Mix Fell Sharply QoQ

Source: Company, HDFC sec Research Source: Company, HDFC sec Research

TTMT’s MHCV Market Share Declined

TTMT’s PV Market Share Improved Sequentially

Source: SIAM, HDFC sec Research Source: SIAM, HDFC sec Research

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

3Q

FY1

5

4Q

FY1

5

1Q

FY1

6

2Q

FY1

6

3Q

FY1

6

4QFY

16

1Q

FY1

7

2Q

FY1

7

3Q

FY1

7

Jaguar Land Rover Share of RR+RRS % - RHS

14 25 19 25 19 24 19 23 26

17

20 20

23 22

21 25 25 21

28 15

14 13

11 11 11

12 3

21 21 29 18 27

27 29 30

30

20 19 17 21 21 16 17 17

23

-

20

40

60

80

100

3Q

FY1

5

4Q

FY1

5

1Q

FY1

6

2Q

FY1

6

3Q

FY1

6

4Q

FY1

6

1Q

FY1

7

2Q

FY1

7

3Q

FY1

7

UK NA China Europe ROW

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

0

10

20

30

40

50

60

3QFY

15

4QFY

15

1QFY

16

2QFY

16

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

Volumes (in '000) M/S - RHS

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

0

5

10

15

20

25

30

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40

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50

3QFY

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4QFY

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1QFY

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2QFY

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3QFY

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4QFY

16

1QFY

17

2QFY

17

3QFY

17

Volumes (in '000) M/S - RHS

PCG RESEARCH


Income Statement (Consolidated) (Rs bn) FY15 FY16 FY17E FY18E FY19E

Net Revenues 2,628 2,756 2,728 3,137 3,545

Growth (%) 12.9 4.9 (1.0) 15.0 13.0

Material Expenses 1,599 1,624 1,618 1,829 2,081

Employee Expenses 255 292 295 329 362

Product Development Expenses

29 35 37 39 31

Other Operating Expenses 349 431 431 471 532

EBITDA 395 374 347 469 540

EBITDA Margin (%) 15.0 13.6 12.7 15.0 15.2

EBITDA Growth (%) 13.5 (5.4) (7.1) 35.1 15.1

Depreciation 134 170 182 204 241

EBIT 262 204 165 265 299

Other Income (Including EO Items)

9 10 9 10 11

Interest 49 46 39 41 43

PBT 222 167 136 234 267

Tax (Incl Deferred) 76 29 28 82 101

RPAT 146 140 98 137 147

EO (Loss) / Profit (Net Of Tax)

(5) (28) - - -

APAT 145 138 117 168 184

APAT Growth (%) (3.3) (4.8) (15.1) 43.1 10.0

Adjusted EPS (Rs) 45.0 40.6 34.5 49.3 54.2

EPS Growth (%) (3.3) (9.8) (15.1) 43.1 10.0


Balance Sheet (Consolidated) (Rs bn) FY15 FY16 FY17E FY18E FY19E

SOURCES OF FUNDS

Share Capital – Equity 6 7 7 7 7

Reserves 556 801 908 1,064 1,236

Total Shareholders’ Funds 563 808 915 1,071 1,243

Minority Interest 4 9 10 10 12

Long-term Debt 736 705 735 752 722

Short-term Debt - - - - -

Total Debt 736 705 735 752 722

Net Deferred Taxes (14) 4 7 12 20

Long-term Provisions & Others 212 205 219 229 245

TOTAL SOURCES OF FUNDS 1,501 1,731 1,886 2,074 2,242

APPLICATION OF FUNDS

Net Block 838 1,003 1,193 1,358 1,455

CWIP 289 285 284 288 292

Goodwill 47 48 48 48 48

Investments 12 13 13 13 13

LT Loans & Advances 293 331 365 395 458

Total Non-current Assets 1,479 1,681 1,902 2,103 2,266

Inventories 293 334 379 424 496

Debtors 126 130 149 166 235

Cash & Equivalents 462 521 413 399 385

Total Current Assets 881 985 942 989 1,115

Creditors 858 935 958 1,018 1,140

Other Current Liabilities & Provns

Total Current Liabilities 858 935 958 1,018 1,140

Net Current Assets 22 50 (16) (29) (25)

TOTAL APPLICATION OF FUNDS 1,501 1,731 1,886 2,074 2,242


PCG RESEARCH


Cash Flow Statement (Consolidated) (Rs bn) FY15 FY16 FY17E FY18E FY19E

Reported PBT 222 167 136 234 267

Non-operating & EO items (5) (28) - - -

Interest expenses 49 46 39 41 43

Depreciation 134 170 182 204 241

Working Capital Change 187 (14) (60) (22) (66)

Tax Paid (76) (29) (28) (82) (101)

OPERATING CASH FLOW ( a ) 510 313 268 375 384

Capex (281) (333) (370) (374) (342)

Free Cash Flow (FCF) 230 (20) (102) 1 42

Investments 1 0 - - -

Non-operating Income (7) 22 13 21 28

INVESTING CASH FLOW ( b ) (286) (311) (357) (353) (314)

Debt Issuance/(Repaid) 130 (31) 30 17 (30)

Interest Expenses (49) (46) (39) (41) (43)

FCFE 311 (98) (111) (23) (31)

Share Capital Issuance (233) 136 - - -

Dividend - (1) (10) (12) (12)

FINANCING CASH FLOW ( c ) (152) 57 (19) (36) (85)

NET CASH FLOW (a+b+c) 72 59 (107) (14) (14)

EO Items, Others (3) - - - -

Closing Cash & Equivalents 462 521 413 399 385


Key Ratio (Consolidated) FY15 FY16 FY17E FY18E FY19E

PROFITABILITY (%)

GPM 39.1 41.1 40.7 41.7 41.3 EBITDA Margin 15.0 13.6 12.7 15.0 15.2 APAT Margin 5.5 5.0 4.3 5.3 5.2 RoE 23.8 20.1 13.6 16.9 15.9 RoIC (or Core RoCE) 17.0 14.9 9.5 11.0 10.7 RoCE 13.6 12.4 9.3 11.2 11.2 EFFICIENCY

Tax Rate (%) 34.4 17.2 20.9 35.0 37.9 Fixed Asset Turnover (x) 1.7 1.4 1.2 1.2 1.2 Inventory (days) 40.7 44.2 50.7 49.3 51.1 Debtors (days) 17.5 17.2 20.0 19.3 24.2 Payables (days) 119.2 123.8 128.2 118.4 117.4 Cash Conversion Cycle (days) (61.1) (62.4) (57.5) (49.8) (42.2) Debt/EBITDA (x) 1.9 1.9 2.1 1.6 1.3 Net D/E (x) 0.2 0.0 0.2 0.1 0.1 Interest Coverage (x) 5.4 4.4 4.3 6.5 7.0 PER SHARE DATA (Rs)

EPS 45.0 40.6 34.5 49.3 54.2 CEPS 78.8 75.0 80.0 100.4 114.6 Dividend - 0.2 2.5 3.0 3.0 Book Value 175 238 269 315 366 VALUATION

P/E (x) 9.5 10.7 12.5 8.7 7.9 P/BV (x) 2.5 1.8 1.6 1.4 1.2 EV/EBITDA (x) 4.6 4.9 6.1 4.2 3.1 EV/Revenues (x) 0.6 0.5 0.6 0.5 0.5 Source: Company, HDFC sec Research

PCG RESEARCH


Price Chart

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Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year. Sell: Stock is expected to decline by 10% or more in the next 1 Year.

PCG RESEARCH


Rating Chart

R E T U R N

HIGH

MEDIUM

LOW

LOW MEDIUM HIGH

RISK

Ratings Explanation:

RATING Risk - Return BEAR CASE BASE CASE BULL CASE

BLUE LOW RISK - LOW RETURN STOCKS

IF RISKS MANIFEST PRICE CAN FALL 20% OR MORE

IF RISKS MANIFEST PRICE CAN FALL 15% & IF INVESTMENT RATIONALE FRUCTFIES PRICE CAN RISE BY 15%

IF INVESTMENT RATIONALE FRUCTFIES PRICE CAN RISE BY 20% OR MORE

YELLOW MEDIUM RISK - HIGH RETURN STOCKS




RED HIGH RISK - HIGH RETURN STOCKS




PCG RESEARCH


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