KNR Constructions Ltd

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CRISIL IER Independent Equity Research

Enhancing investment decisions

Q3FY16 Results Update

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CRISIL IER Independent Equity Research

Explanation of CRISIL Fundamental and Valuation (CFV) matrix

The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process – Analysis of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned o n a five- point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).

CRISIL

Fundamental Grade Assessment

CRISIL

Valuation Grade Assessment

5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP)

4/5 Superior fundamentals 4/5 Upside (10-25% from CMP)

3/5 Good fundamentals 3/5 Align (+-10% from CMP)

2/5 Moderate fundamentals 2/5 Downside (negative 10-25% from CMP)

1/5 Poor fundamentals 1/5 Strong downside (<-25% from CMP)

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Last updated: August, 2014

Analyst Disclosure

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Revenue

Growth prospects intact

Fundamental Grade 3/5 (Good fundamentals) Valuation Grade 5/5 (CMP has strong upside) Industry Construction & Engineering

March 07, 2016

Fair Value ₹656

CMP ₹504

For detailed initiating coverage report please visit: www.crisil.com

CRISIL Independent Equity Research reports are also available on Bloomberg (CRI <go>) and Thomson Reuters.

KNR Constructions Ltd’s (KNR’s) standalone Q3FY16 earnings were above our estimates.

Revenue adjusted for other operating income declined 4.6% y-o-y (6% q-o-q) to ₹2.04 bn, owing to slow execution in Tamil Nadu and Kerala - states hit by monsoons. Even so, the EBITDA margin expanded 153 bps y-o-y (down 245 bps q-o-q) to 15.6%, aided by a fall in raw material cost. Adjusted PAT declined 25% q-o-q (up 12% y-o-y) to ₹180 mn. The company reported one-time other operating income of ₹148 mn (booked due to an arbitration in favour of KNR and its JV partner). The order book remains strong at ₹35 bn, as of Q3FY16 (~4.0x FY15 revenue) lending revenue visibility for more than three years. Based on our analysis, while execution risk is low, it remains a key monitorable. We retain the fundamental grade of 3/5.

Revenue growth to pick up from FY17

Revenue growth was adversely affected by both, delays in securing clearances for newly- bagged projects and heavy rains and consequent flooding in Tamil Nadu. With ~75% of the 9MFY16 new order intake (₹26 bn) yet to hit revenue recognition, growth in FY16 revenue is likely to be in single digits. We expect a sharp uptick from FY17, with key road EPC projects gathering momentum as follows- ₹9.4 bn Madurai-Ramanathapuram in Tamil Nadu, ₹6.7bn Thiruvananthapuram Bypass in Kerala and ₹2.6bn Chittagong City Outer Ring Road, Bangladesh. We estimate standalone revenue CAGR of ~30% over FY16-18.

Order book remains healthy; revenue visibility of ~4 years

While there was no order intake, KNR had a strong order book of ₹35 bn as of Q3FY16, reflecting a robust book-to-bill ratio of 4.0x (~4.0x FY15 revenue); the order book comprises road projects worth ₹34 bn and irrigation projects worth ₹585 mn. In February 2016, the company bagged an order worth ~₹3 bn, further boosting its order book. The company expects bidding opportunities to remain aplenty and is targeting new orders worth ₹10 bn, over the next 6-9 months. KNR’s financial strength and execution capabilities position it well to bag new orders. With a healthy order book, execution ramp-up is the key to revenue growth.

EBITDA margin expected to moderate

EBITDA margin rose 153 bps y-o-y to 15.6%, mainly because raw material cost fell 190 bps y-o-y. We believe the new orders bagged in 9MFY16 will start contributing to revenue from FY17. However, the margin is expected to moderate, owing to the high competitive intensity witnessed in recent bidding.

Earnings estimates and fair value revised

We have revised our revenue estimates for FY16-17 downwards to factor in lower-than- expected traction in execution, owing to heavy monsoons in southern India and delays in clearances for newly bagged projects. However, we revise our earnings estimates for FY16 upwards to factor in higher-than-expected margin over 9MFY16. Based on the sum-of-the- parts (SoTP) method, we revise our fair value to ₹656 per share on account of roll forward of estimates. At the current market price, the valuation grade is 5/5.

KEY FORECAST (STANDALONE)

(₹ mn) FY14 FY15 FY16E FY17E FY18E

Operating income 8,141 8,517 8,706 12,666 15,174

EBITDA 1,303 1,440 1,435 1,961 2,300

Adj net income 609 879 730 1,017 1,255

Adj EPS (₹) 22.2 31.3 26.0 36.2 44.6

EPS growth (%) 37.2 41.0 (17.0) 39.3 23.4

Dividend yield (%) 0.2 0.2 0.2 0.3 0.3

RoCE (%) 13.1 14.4 14.0 17.8 19.1

RoE (%) 13.0 16.3 12.1 14.9 15.8

PE (x) 26.0 18.4 22.2 15.9 12.9

P/BV (x) 3.2 2.9 2.5 2.2 1.9

EV/EBITDA (x) 13.1 11.9 11.3 8.5 7.3

NM: Not meaningful; CMP: Current market price Source: Company, CRISIL Research estimates

CFV MATRIX

KEY STOCK STATISTICS

NIFTY/SENSEX 7485/24646

NSE/BSE ticker KNRCON

Face value (₹ per share) 10

Shares outstanding (mn) 28.1

Market cap (₹ mn)/(US$ mn) 14,188/208 Enterprise value (₹ mn)/(US$ mn) 21,353/313

52-week range (₹)/(H/L) 653/375

Beta 1.3

Free float (%) 39.1%

Avg daily volumes (30-days) 31,783 Avg daily value (30-days) (₹ mn) 15.6 SHAREHOLDING PATTERN

PERFORMANCE VIS-À-VIS MARKET Returns

1-m 3-m 6-m 12-m

KNR 2% -18% -6% 16%

CNX 500 1% -5% -3% -14%

ANALYTICAL CONTACT

Bhaskar Bukrediwala [email protected] Mohit Pandey [email protected] Sayan Das Sharma [email protected] Client servicing desk

+91 22 3342 3561 [email protected]

1 2 3 4 5

Valuation Grade

Fundamental Grade

Poor Fundamentals

Excellent Fundamentals

Strong Downside Strong Upside

65.50% 60.86% 60.75% 60.75%

34.50% 39.14% 39.25% 39.25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-15 Jun-15 Sep-15 Dec-15

Promotor Public

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CRISIL IER Independent Equity Research

Q3FY16 Results Summary (Standalone)

(₹ mn) Q3FY16 Q2FY16 Q3FY15 q-o-q (%) y-o-y (%) 9MFY16 9MFY15 y-o-y (%)

Net sales 2,038 2,169 2,136 -6.1 -4.6 5,919 6,205 -4.6

Material cost 1,410 1,441 1,519 -2.1 -7.1 4,033 4,374 -7.8

Material cost (% of net sales) 69.2% 66.4% 71.1% 278bps -190bps 68.1% 70.5% -235bps

Employees cost 106 115 96 -8.4 9.8 320 271 18.1

Other expenses 204 222 221 -7.9 -7.5 611 646 -5.3

EBITDA 318 391 300 -18.8 5.8 955 914 4.4

EBITDA margin 15.6% 18.0% 14.1% -245bps 153bps 16.1% 14.7% 139bps

Depreciation 108 108 129 0.4 -16.0 322 415 -22.5

EBIT 209 284 171 -26.2 22.2 633 500 26.7

Interest and finance charges 26 34 29 -24.5 -8.9 86 91 -5.3

Operating PBT 183 249 143 -26.4 28.4 547 409 33.8

Other Income 16 21 20 -21.3 -18.8 93 71 31.7

Exceptional inc/(exp) 148 314 - NM NM 462 - NM

PBT 348 584 163 -40.4 113.5 1,102 479 129.8

Tax 19.6 29.9 14.0 NM NM 70 (7) NM

PAT 328 554 149 -40.7 120.4 1,032 486 112.2

Adj PAT 180 240 161 -25.0 12.0 570 498 14.4

Adj PAT margin 8.8% 11.1% 7.5% -222bps 131bps 9.6% 8.0% 160bps

No of equity shares (mn) 28 28 28 - - 28 28 -

Adj EPS (₹) 6.4 8.5 5.7 -25.0 12.0 20.3 17.7 14.4

Source: Company, CRISIL Research

Revenue muted, EBITDA margin expanded y-o-y, owing to

reduction in material cost Adj. PAT up y-o-y but down sequentially

Source: Company, CRISIL Research Source: Company, CRISIL Research

1,578 2,089 2,604 2,365 1,704 2,136 2,557 1,712 2,169 2,038

16% 16%

14%

13%

18%

14% 14%

14%

18%

16%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0 500 1,000 1,500 2,000 2,500 3,000

Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16

(₹ mn)

Revenue EBITDA margin (RHS)

84 135 280 198 139 149 244 150 240 180 5.3%

6.4%

10.8%

8.4% 8.2%

7.0%

9.5% 8.8%

11.1%

8.8%

-2%

0%

2%

4%

6%

8%

10%

12%

0 30 60 90 120 150 180 210 240 270 300

Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16

(₹ mn)

Adj PAT PAT margin (RHS)

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KNR Constructions Ltd

Share price movement Fair value movement since initiation

-Indexed to 100

Source: NSE, CRISIL Research Source: NSE, BSE, CRISIL Research

0 100 200 300 400 500 600

Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 May-13 Sep-13 Jan-14 May-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16

KNR CNX500

0 500 1,000 1,500 2,000 2,500

0 100 200 300 400 500 600 700

Nov-11 Feb-12 Apr-12 Jul-12 Sep-12 Dec-12 Mar-13 May-13 Aug-13 Oct-13 Jan-14 Mar-14 Jun-14 Sep-14 Nov-14 Feb-15 Apr-15 Jul-15 Sep-15 Dec-15 Mar-16

('000)

Thousands

(₹)

Total Traded Quantity (RHS) CRISIL Fair Value KNR

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CRISIL IER Independent Equity Research

Standalone Earnings Estimates Revised

Particulars Unit

FY16E FY17E

Old New % change Old New % change

Revenues (₹ mn) 9,145 8,706 -5% 13,289 12,666 -5%

EBITDA (₹ mn) 1,416 1,435 1% 2,057 1,961 -5%

EBITDA margin % 15.5 16.5 100bps 15.5 15.5 0bps

PAT (₹ mn) 716 730 2% 1,077 1,017 -6%

PAT margin % 7.8 8.4 56bps 8.1 8.0 -7bps

EPS ₹ 25.5 26.0 2% 38.3 36.2 -6%

Source: CRISIL Research

Reasons for changes in estimates

Line item FY16E FY17E

Revenues Revised to factor in the impact of monsoons in southern India

Revised to factor in delays in clearances in some of the newly bagged projects

EBITDA margin Raised to factor in higher-than-expected margin in 9MFY15 No change

PAT Revised in line with change in EBITDA Revised in line with change in EBITDA

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Valuation Grade: 5/5

We retain the P/E multiple of 12x FY17 earnings for the EPC contracting business, factoring in improved revenue visibility as a result of new projects. Two annuity projects - Islam Nagar and AP border - are valued at ₹22 per share and ₹20 per share, respectively, based on the DCF.

We continue to value the Kerala BOT project at a price/book value of 1.2x. We revise our SoTP-based fair value to ₹656 per share on account of roll forward. At the current market price of ₹504, the valuation grade is 5/5.

Project Method Multiple/ cost of equity Value ₹

Contracting business P/E 12x 557

Kerala BOT project P/B 1.2x 58

Islam Nagar BOT project DCF NA 22

AP border BOT project DCF NA 20

Total 656

One-year forward P/E band One-year forward EV/EBITDA band

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

P/E – premium / discount to CNX 500 P/E movement

Source: NSE, CRISIL Research Source: NSE, CRISIL Research

0 100 200 300 400 500 600 700 800 900

May-09 Oct-09 Feb-10 Jun-10 Oct-10 Mar-11 Jul-11 Nov-11 Apr-12 Aug-12 Dec-12 Apr-13 Sep-13 Jan-14 May-14 Sep-14 Feb-15 Jun-15 Oct-15 Mar-16

(₹)

KNR 4x 8x

12x 16x 20x

0 5,000 10,000 15,000 20,000 25,000 30,000

(₹ mn)

EV 3x 6x 9x 12x

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Premium/Discount to Nifty 500 Median premium/discount to Nifty 500

0 5 10 15 20 25

(Times)

1yr Fwd PE (x) Median PE

+1 std dev

-1 std dev

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CRISIL IER Independent Equity Research

CRISIL IER reports released on KNR Constructions Ltd

Date Nature of report

Fundamental

grade Fair value

Valuation grade

CMP (on the date of report)

25-Nov-11 Initiating coverage 3/5 ₹157 5/5 ₹94

02-Mar-12 Q3FY12result update 3/5 ₹182 5/5 ₹136

14-Jun-12 Q4FY12 result update 3/5 ₹158 5/5 ₹113

29-Aug-12 Q1FY13 result update 3/5 ₹148 5/5 ₹118

10-Sep-12 Detailed report 3/5 ₹148 5/5 ₹118

23-Nov-12 Q2FY13 result update 3/5 ₹120 4/5 ₹101

06-Mar-13 Q3FY13 result update 3/5 ₹120 5/5 ₹95

24-Dec-13 Detailed report 3/5 ₹120 5/5 ₹78

21-Feb-14 Q3FY14 result update 3/5 ₹120 5/5 ₹84

02-Sep-14 Q1FY15 result update 3/5 ₹220 3/5 ₹243

21-Nov-14 Q2FY15 result update 3/5 ₹317 3/5 ₹302

28-Dec-15 Detailed report 3/5 ₹550 3/5 ₹576

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Annexure: Financials (Standalone)

Income statement Balance Sheet

(₹ mn) FY14 FY15 FY16E FY17E FY18E (₹ mn) FY14 FY15 FY16E FY17E FY18E

Operating incom e 8,141 8,517 8,706 12,666 15,174 Liabilities

EBITDA 1,303 1,440 1,435 1,961 2,300 Equity share capital 281 281 281 281 281

EBITDA m argin 16.0% 16.9% 16.5% 15.5% 15.2% Reserves 4,825 5,393 6,087 7,053 8,293 Depreciation 563 532 460 585 610 Minorities - - - - - EBIT 739 908 974 1,377 1,690 Net w orth 5,106 5,674 6,368 7,335 8,574 Interest 176 131 109 78 78 Convertible debt - - - - - Operating PBT 563 777 865 1,299 1,612 Other debt 908 963 882 882 882

Other income 106 84 96 151 197 Total debt 908 963 882 882 882

Exceptional inc/(exp) (5) (278) - - - Deferred tax liability (net) (118) (239) (239) (239) (239)

PBT 664 583 961 1,449 1,809 Total liabilities 5,896 6,398 7,011 7,977 9,217 Tax provision 46 (18) 231 432 554 Assets Share of profit/(loss) from associates - - - - - Net fixed assets 2,637 2,243 1,782 1,698 1,088 PAT (Reported) 619 602 730 1,017 1,255 Capital WIP 3 33 33 1 1

Less: Exceptionals 10 (277) - - - Total fixed assets 2,640 2,276 1,815 1,699 1,089 Adjusted PAT 609 879 730 1,017 1,255 Investm ents 465 417 417 417 417

Current assets Ratios Inventory 341 359 358 694 831

FY14 FY15 FY16E FY17E FY18E Sundry debtors 1,171 1,765 1,908 2,950 3,534 Grow th Loans and advances 4,737 4,905 4,979 6,528 8,740 Operating income (%) 21.0 4.6 2.2 45.5 19.8 Cash & bank balance 46 53 909 394 242

EBITDA (%) 13.1 10.5 (0.3) 36.7 17.3 Marketable securities 2 2 2 2 2

Adj PAT (%) 37.2 41.0 (17.0) 39.3 23.4 Total current assets 6,296 7,085 8,157 10,568 13,349 Adj EPS (%) 37.2 41.0 (17.0) 39.3 23.4 Total current liabilities 3,505 3,379 3,378 4,706 5,638 Net current assets 2,791 3,705 4,778 5,861 7,711 Profitability Intangibles/Misc. expenditure 0 0 0 0 0

EBITDA margin (%) 16.0 16.9 16.5 15.5 15.2 Total assets 5,896 6,398 7,011 7,977 9,217 Adj PAT Margin (%) 7.7 10.3 8.4 8.0 8.3 RoE (%) 13.0 16.3 12.1 14.9 15.8 Cash flow RoCE (%) 13.1 14.4 14.0 17.8 19.1 (₹ mn) FY14 FY15 FY16E FY17E FY18E RoIC (%) 17.8 18.7 15.5 18.7 18.9 Pre-tax profit 669 861 961 1,449 1,809 Total tax paid (128) (103) (231) (432) (554)

Valuations Depreciation 563 532 460 585 610

Price-earnings (x) 26.0 18.4 22.2 15.9 12.9 Working capital changes (1,068) (907) (217) (1,599) (2,002) Price-book (x) 3.2 2.9 2.5 2.2 1.9 Net cash from operations 37 383 974 3 (136)

EV/EBITDA (x) 13.1 11.9 11.3 8.5 7.3 Cash from investm ents EV/Sales (x) 2.1 2.0 1.9 1.3 1.1 Capital expenditure (240) (167) 0 (468) 0

Dividend payout ratio (%) 4.5 4.7 4.3 4.3 4.1 Investments and others 52 47 - - -

Dividend yield (%) 0.2 0.2 0.2 0.3 0.3 Net cash from investm ents (187) (120) 0 (468) 0

Cash from financing B/S ratios Equity raised/(repaid) - - - - - Inventory days 15 15 15 20 20 Debt raised/(repaid) 197 56 (81) - -

Creditors days 138 132 129 122 122 Dividend (incl. tax) (33) (34) (68) (94) (112)

Debtor days 53 76 80 85 85 Others (incl extraordinaries) (5) (278) 31 43 96

Working capital days 123 157 163 154 176 Net cash from financing 159 (256) (118) (51) (16)

Gross asset turnover (x) 1.6 1.6 1.6 2.2 2.5 Change in cash position 9 7 856 (515) (152)

Net asset turnover (x) 2.9 3.5 4.3 7.3 10.9 Closing cash 46 53 909 394 242

Sales/operating assets (x) 2.9 3.5 4.3 7.2 10.9 Current ratio (x) 1.8 2.1 2.4 2.2 2.4 Debt-equity (x) 0.2 0.2 0.1 0.1 0.1 Net debt/equity (x) 0.2 0.2 (0.0) 0.1 0.1 (₹ mn) Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Interest coverage (EBITDA/interest) 7.4 11.0 13.1 25.2 29.5 Net Sales 2,136 2,557 1,712 2,169 2,038 Interest coverage (EBIT/interest) 4.2 7.0 8.9 17.7 21.7 Change (q-o-q) 25% 20% -33% 27% -6% EBITDA 300 347 246 391 318

Per share Change (q-o-q) -1% 16% -29% 59% -19% FY14 FY15 FY16E FY17E FY18E EBITDA m argin 14.1% 13.6% 14.4% 18.0% 15.6% Adj EPS (₹) 22.2 31.3 26.0 36.2 44.6 PAT 149 244 150 554 328

CEPS 42.2 50.2 42.3 57.0 66.3 Adj PAT 149 244 150 240 180

Book value 181.6 201.8 226.4 260.8 304.9 Change (q-o-q) 7% 64% -38% 60% -25%

Dividend (₹) 1.0 1.0 1.1 1.5 1.8 Adj PAT m argin 7.0% 9.5% 8.8% 11.1% 8.8%

Actual o/s shares (mn) 28.1 28.1 28.1 28.1 28.1 Adj EPS (₹) 5.3 8.7 5.3 8.5 6.4 Quarterly financials (Standalone)

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CRISIL IER Independent Equity Research

Annexure: Financials (Consolidated)

Income statement Balance Sheet

(₹ mn) FY14 FY15 FY16E FY17E FY18E (₹ mn) FY14 FY15 FY16E FY17E FY18E

Operating income 8,700 9,054 9,006 13,466 15,941 Liabilities

EBITDA 1,317 1,436 1,593 2,509 3,067 Equity share capital 281 281 281 281 281

EBITDA margin 15.1% 15.9% 17.7% 18.6% 19.2% Reserves 6,350 7,585 8,212 9,069 10,220

Depreciation 577 542 520 790 835 Minorities 11 11 11 11 11 EBIT 740 894 1,073 1,719 2,232 Net worth 6,642 7,877 8,504 9,362 10,512 Interest 184 138 372 636 634 Convertible debt - - - - - Operating PBT 556 756 701 1,084 1,599 Other debt 4,260 8,232 8,548 8,428 8,428 Other income 142 139 101 87 54 Total debt 4,260 8,232 8,548 8,428 8,428 Exceptional inc/(exp) 10 (277) - - - Deferred tax liability (net) (126) (247) (247) (247) (247) PBT 707 617 803 1,171 1,652 Total liabilities 10,776 15,862 16,805 17,543 18,694 Tax provision 52 (14) 201 350 470 Assets

Share of profit/(loss) from associates (51) (51) 58 81 106 Net fixed assets 2,722 2,349 1,872 1,794 1,192 PAT (Reported) 605 580 660 903 1,288 Capital WIP 24 211 0 0 0 Less: Exceptionals 10 (277) - - - Total fixed assets 2,746 2,560 1,872 1,795 1,192 Adjusted PAT 595 858 660 903 1,288 Investments 321 307 365 446 552

Current assets

Ratios Inventory 530 557 617 1,107 1,310

FY14 FY15 FY16E FY17E FY18E Sundry debtors 1,559 1,921 1,707 2,738 3,241

Growth Loans and advances 2,891 3,096 3,081 4,334 5,130

Operating income (%) 16.5 4.1 (0.5) 49.5 18.4 Cash & bank balance 507 363 735 153 1,250 EBITDA (%) 13.3 9.1 10.9 57.5 22.2 Marketable securities 2 2 2 2 2 Adj PAT (%) 43.4 44.2 (23.1) 12.2 45.3 Total current assets 5,488 5,939 6,141 8,333 10,933 Adj EPS (%) 43.4 44.2 (23.1) 12.2 45.3 Total current liabilities 3,615 3,989 3,638 5,095 6,048 Net current assets 1,872 1,950 2,503 3,238 4,884

Profitability Intangibles/Misc. expenditure 5,837 11,045 12,065 12,065 12,065

EBITDA margin (%) 15.1 15.9 17.7 18.6 19.2 Total assets 10,776 15,862 16,805 17,543 18,694 Adj PAT Margin (%) 6.8 9.5 7.3 5.5 6.7

RoE (%) 10.1 11.8 8.1 8.3 10.8 Cash flow

RoCE (%) 8.4 6.6 6.5 9.9 12.2 (₹ mn) FY14 FY15 FY16E FY17E FY18E

RoIC (%) 12.2 9.3 6.8 9.3 10.9 Pre-tax profit 698 894 803 1,171 1,652 Total tax paid (142) (107) (201) (350) (470)

Valuations Depreciation 577 542 520 790 835

Price-earnings (x) 23.8 16.5 21.5 19.1 13.2 Working capital changes 404 (222) (181) (1,316) (550) Price-book (x) 2.1 1.8 1.7 1.5 1.3 Net cash from operations 1,537 1,108 941 295 1,467 EV/EBITDA (x) 13.6 15.4 13.8 9.0 7.0 Cash from investments

EV/Sales (x) 2.1 2.4 2.5 1.8 1.4 Capital expenditure (5,074) (5,564) (853) (713) (233) Dividend payout ratio (%) 4.7 4.8 4.3 5.2 4.8 Investments and others 253 64 (115) (162) (212) Dividend yield (%) 0.2 0.2 0.2 0.3 0.4 Net cash from investments (4,821) (5,500) (968) (875) (445)

Cash from financing

B/S ratios Equity raised/(repaid) - - - - -

Inventory days 22 22 26 32 32 Debt raised/(repaid) 2,782 3,972 316 (119) - Creditors days 127 141 119 112 112 Dividend (incl. tax) (33) (34) (61) (84) (112) Debtor days 65 78 72 79 78 Others (incl extraordinaries) 945 412 28 201 187 Working capital days 57 64 74 87 85 Net cash from financing 3,694 4,350 283 (2) 75 Gross asset turnover (x) 1.7 1.7 1.6 2.3 2.6 Change in cash position 410 (42) 257 (582) 1,097 Net asset turnover (x) 3.1 3.6 4.3 7.3 10.7 Closing cash 507 363 735 153 1,250 Sales/operating assets (x) 3.0 3.4 4.1 7.3 10.7

Current ratio (x) 1.5 1.5 1.7 1.6 1.8 Debt-equity (x) 0.6 1.0 1.0 0.9 0.8

Net debt/equity (x) 0.6 1.0 0.9 0.9 0.7 (₹ mn) Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16

Interest coverage (EBITDA/interest) 7.2 10.4 4.3 3.9 4.8 Net Sales 1,704 2,136 2,557 1,712 2,169

Interest coverage (EBIT/interest) 4.0 6.5 2.9 2.7 3.5 Change (q-o-q) -28% 25% 20% -33% 27%

EBITDA 304 300 347 246 391

Per share Change (q-o-q) -2% -1% 16% -29% 59%

Quarterly financials (Standalone)

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CRISIL IER Independent Equity Research

CRISIL Research Team

Senior Director

Manish Jaiswal CRISIL Research +91 22 3342 8290 [email protected]

Analytical Contacts

Prasad Koparkar Senior Director, Industry & Customised Research +91 22 3342 3137 [email protected] Binaifer Jehani Director, Customised Research +91 22 3342 4091 [email protected] Manoj Damle Director, Customised Research +91 22 3342 3342 [email protected] Manoj Mohta Director, Customised Research +91 22 3342 3554 [email protected] Jiju Vidyadharan Director, Funds & Fixed Income Research +91 22 3342 8091 [email protected] Ajay Srinivasan Director, Industry Research +91 22 3342 3530 [email protected] Rahul Prithiani Director, Industry Research +91 22 3342 3574 [email protected]

Business Development

Prosenjit Ghosh Director, Industry & Customised Research +91 99206 56299 [email protected]

Megha Agrawal Associate Director +91 98673 90805 [email protected]

Neeta Muliyil Associate Director +91 99201 99973 [email protected]

Dharmendra Sharma Associate Director (North) +91 98189 05544 [email protected]

Ankesh Baghel Regional Manager (West) +91 98191 21510 [email protected]

Sonal Srivastava Regional Manager (West) +91 98204 53187 [email protected]

Sarrthak Sayal Regional Manager (North) +91 95828 06789 [email protected]

Priyanka Murarka Regional Manager (East) +91 99030 60685 [email protected]

Naveena R Regional Manager (Karnataka & Kerala) +91 95383 33088 [email protected]

Sanjay Krishnaa Regional Manager (Tamil Nadu & AP) +91 98848 06606 [email protected]

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Our Capabilities

Making Markets Function Better

Economy and Industry Research

■ Largest team of economy and industry research analysts in India

■ Acknowledged premium, high quality research provider with track record spanning two decades

■ 95% of India’s commercial banking industry by asset base uses our industry research for credit decisions

■ Coverage on 86 industries: We provide analysis and forecast on key industry parameters including demand, supply, prices, investments and profitability, along with insightful opinions on emerging trends and impact of key events

■ Research on sectors and clusters dominated by small and medium enterprises covering analysis of relative attractiveness, growth prospects and financial performance

■ High-end customised research for many leading Indian and global corporates in areas such as market sizing, demand forecasting, project feasibility and entry strategy

Funds and Fixed Income Research

■ Largest and most comprehensive database on India’s debt market, covering more than 18,000 securities

■ Largest provider of fixed income valuations in India

■ Provide valuation for more than ₹81 trillion (US$ 1,275 billion) of Indian debt securities

■ Sole provider of fixed income and hybrid indices to mutual funds and insurance companies; we maintain 37 standard indices and over 100 customised indices

■ Ranking of Indian mutual fund schemes covering 75% of assets under management and ₹9 trillion (US$ 144 billion) by value

■ Business review consultants to The Employees’ Provident Fund Organisation (EPFO) and The National Pension System (NPS) Trust in monitoring performance of their fund managers

Equity and Company Research

■ Assigned the first IPO grade in India; graded more than 100 IPOs till date

■ Due Diligence and Valuation services across sectors; executed close to 100 valuation assignments

■ Due Diligence, IPO Grading and Independent Equity Research for SME companies planning to list or already listed in NSE Emerge platform

■ First research house to release exchange-commissioned equity research reports in India; covered 1,488 firms listed and traded on the National Stock Exchange

Executive Training

■ Conducted 1200+ training programs on a wide spectrum of topics including credit, risk, retail finance, treasury, and corporate advisory; trained more than 24,000 professionals till date

■ Training programs being conducted in India, Sri Lanka and Bangladesh through an extensive network of well-qualified

financial professionals

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Our Office

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Gurgaon Plot No. 46 Sector 44 Opp. PF Office

Gurgaon - 122 003, India

Phone: +91 124 6722 000