KSE Ltd

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CRISIL IER Independent Equity Research

Enhancing investment decisions

KSE Ltd

Q3FY14 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)

About CRISIL Limited

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India’s leading ratings agency.

We are also the foremost provider of high-end research to the world’s largest banks and leading corporations.

About CRISIL Research

CRISIL Research is India's largest independent and integrated research house. We provide insights, opinions, and analysis on the Indian economy, industries, capital markets and companies. We are India's most credible provider of economy and industry research. Our industry research covers 70 sectors and is known for its rich insights and perspectives. Our analysis is supported by inputs from our network of more than 4,500 primary sources, including industry experts, industry associations, and trade channels. We play a key role in India's fixed income markets. We are India's largest provider of valuations of fixed income securities, serving the mutual fund, insurance, and ba nking industries.

We are the sole provider of debt and hybrid indices to India's mutual fund and life insurance industries. We pioneered independent equity research in India, and are today India's largest independent equity research house. Our defining trait is the ability to conv ert information and data into expert judgements and forecasts with complete objectivity. We leverage our deep understanding of the macroeconomy and our extensive sector coverage to provide unique insights on micro-macro and cross-sectoral linkages. We deliver our research through an innovative web-based research platform. Our talent pool comprises economists, sector experts, company analysts, and information management specialists.

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Last updated: May, 2013

Analyst Disclosure

Each member of the team involved in the preparation of the grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company.

Disclaimer:

This Company commissioned CRISIL IER report is based on data publicly available or from sources considered reliable. CRISIL Ltd.

(CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / repor t is subject to

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KSE Ltd

Decline in raw material costs boosted profitability

Fundamental Grade 3/5 (Good fundamentals) Valuation Grade 3/5 (CMP is aligned) Industry Food Products

March 03, 2014

Fair Value ₹227

CMP ₹238

For detailed initiating coverage report please visit: www.ier.co.in

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

KSE Ltd’s Q3FY14 earnings exceeded CRISIL Research’s expectations as raw material costs declined more that what we had anticipated. Overall revenues grew marginally by 2%

q-o-q due to a decline in cattle feed volumes. The decline in volumes is on account of the foot-and-mouth disease which continued to affect the cattle in Kerala. We believe decline in cattle feed volumes is largely temporary and volumes are likely to rebound in FY15. Overall EBITDA margin improved to 5.6% in Q3FY14 compared to 2.1% in Q2FY14 due to reduction in raw material costs. Onset of kharif supply (starting October) had eased input prices. On account of higher EBITDA growth, overall PAT increased to ₹66 mn in Q3FY14 compared to

₹17 mn in Q2FY14. Following higher-than-expected reduction in raw material prices in 9MFY14, we raise our FY14 earnings estimate. We expect EBITDA margin of 3.3% in FY14 compared to 3.1% in 9MFY14. We retain FY15 and FY16 earnings estimates. We maintain the fundamental grade of 3/5.

Decline in cattle feed volumes impacted overall revenue growth

Revenue from the cattle feed business (76% of sales) declined sequentially to ₹1,688 mn as volumes dipped 1.6% q-o-q to 97,649 tonnes. The decline in volumes is attributable to the foot-and-mouth disease which continued to affect the cattle in Kerala. The management has indicated that the prevalence of the disease is slowly subsiding.

EBITDA margin improved due to lower raw material costs

EBITDA margin improved to 5.6% from 2.1% in Q2FY14 following a decline in raw material costs. Raw material costs as a % of sales fell by 339 bps q-o-q to 83.8%; they declined 2% q- o-q to ₹1,700 mn as prices of key raw materials declined. Price of rice bran (46% of raw material costs) declined by 7% q-o-q to ₹13,460/tonne and price of maize (18% of costs) fell by 7% q-o-q to ₹15,000/tonne. Hence, cattle feed realisations decreased 0.4% q-o-q to

₹17,212/tonne. KSE further lowered cattle feed prices by ₹500 per tonne in January 2014.

Lock-out at Kerala-based Vedagiri unit has been lifted effective December 2013 Effective December 21, 2013, production has been resumed at the Vedagiri unit (which produced ~20% of total cattle feed in FY13); the company had declared a lock-out at the unit on October 24, 2013 due to labour issues. However, despite the lock-out, supply to end- markets remained stable as the company sourced cattle feed from two Kerala-based units - Irinjalakuda (own unit) and Thiruvananthapuram (third party).

Fair value maintained at ₹227 per share

We maintain our discounted cash flow-based fair value of ₹227 per share. This fair value implies P/E multiples of 7.4x FY15E and 6.9x FY16E EPS. At the current market price of

₹238, our valuation grade is 3/5.

KEY FORECAST

(₹ mn) FY12 FY13 FY14E FY15E FY16E

Operating income 5,427 6,978 7,895 8,278 9,051

EBITDA 232 142 257 228 240

Adj net income 104 45 123 98 105

Adj EPS (₹) 32.6 14.2 38.5 30.7 32.8

EPS growth (%) 111.9 (56.5) 171.2 (20.3) 6.9

Dividend yield (%) 4.6 4.2 6.2 5.0 5.3

RoCE (%) 29.9 14.7 29.7 23.6 23.3

RoE (%) 28.6 11.3 28.0 19.6 18.8

PE (x) 7.3 16.8 6.2 7.7 7.3

P/BV (x) 1.9 1.9 1.6 1.4 1.3

EV/EBITDA (x) 4.2 7.2 3.8 4.2 3.8

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

CFV MATRIX

KEY STOCK STATISTICS

NIFTY/SENSEX 6277/21120

NSE/BSE ticker KSE/KSELTD

Face value (₹ per share) 10

Shares outstanding (mn) 3.2

Market cap (₹ mn)/(US$ mn) 762/12 Enterprise value (₹ mn)/(US$ mn) 987/16

52-week range (₹)/(H/L) 238/185

Beta 0.4

Free float (%) 32.7%

Avg daily volumes (30-days) 498

Avg daily value (30-days) (₹ mn) 0.10 SHAREHOLDING PATTERN

PERFORMANCE VIS-À-VIS MARKET Returns

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

KSE 25% 28% 25% 13%

CNX 500 3% 4% 20% 8%

ANALYTICAL CONTACT

Mohit Modi (Director) [email protected] Elizabeth John [email protected] Vishal Rampuria [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

32.5% 32.6% 32.8% 32.7%

67.5% 67.4% 67.3% 67.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-13 Jun-13 Sep-13 Dec-13

Promoter Others

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CRISIL IER Independent Equity Research

Q3FY14 results summary

(₹ mn) Q3FY14 Q2FY14 Q3FY13 q-o-q (%) y-o-y (%) 9MFY14 9MFY13 y-o-y (%)

Net sales 2,029 1,990 1,916 2.0 5.9 5,999 5,122 17.1

Raw material cost 1,700 1,735 1,684 -2.0 0.9 5,173 4,513 14.6

as % of net sales 83.8% 87.2% 87.9% -339bps -410bps 86.2% 88.1% -189bps

Employee cost 74 71 63 4.6 17.5 214 182 17.9

Administration and other expenses 141 144 142 -1.7 -0.9 424 414 2.4

EBITDA 114 41 27 176.1 319.2 188 13 NM

EBITDA margin 5.6% 2.1% 1.4% 356bps 421bps 3.1% 0.3% 288bps

Depreciation 10 9 11 1.5 -11.4 28 31 -9.4

EBIT 105 32 17 227.3 NM 160 (18) NM

Interest and finance charges# 5 9 9 -49.9 -47.7 20 28 -28.0

Operating PBT 100 23 8 NM NM 140 (46) NM

Other income 1 1 1 11.7 75.7 2 3 -25.4

PBT 101 24 8 NM NM 142 (43) NM

Tax* 35 7 3 NM NM 47 (15) NM

PAT 66 17 6 NM NM 95 (29) NM

PAT margin 3.3% 0.8% 0.3% 243bps 298bps 1.6% -0.6% 213bps

No of equity shares (mn) 3.2 3.2 3.2 0.0 0.0 3.2 3.2 0.0

EPS (₹) 20.7 5.2 3.2 NM NM 29.6 (8.9) NM

*Q3FY14 tax rate was 34%, higher than 30% in Q2FY14. This was because (i) the company paid 10% surcharge in Q3FY14 as its profit crossed ₹100 mn and (ii) reversal of ₹0.9 mn being excess provision for income tax of previous year.

# Interest and finance charges reduced q-o-q on account of debt repayment.

Source: Company, CRISIL Research

Segment-wise revenue

₹ mn Q3FY14 Q2FY14 Q3FY13 q-o-q (%) y-o-y (%)

Animal feed 1,688 1,721 1,646 -1.9 2.5

Oil cake processing division 464 413 377 12.5 23.0

Dairy division 55 50 53 11.3 5.0

Total 2,207 2,183 2,076 1.1 6.3

Intersegment 179 194 161 -7.6 11.2

Income from operations 2,028 1,989 1,915 2.0 5.9

Other operating income 1.1 1.3 1.3 -19.8 -14.7

Net Sales 2,029 1,990 1,916 2.0 5.9

Segment-wise PBIT*

₹ mn Q3FY14 Q2FY14 Q3FY13 q-o-q (%) y-o-y (%)

Animal feed 69.3 -0.9 4.7 NM NM

Oil cake processing division 33.0 37.3 8.0 -11.4 312.7

Dairy division 3.0 1.9 4.4 60.5 -32.4

Total 105.3 38.3 17.1 175.2 515.8

*Before unallocable expenses Source: Company

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KSE Ltd

Following lower raw material costs, EBITDA margin up... ... and so also PAT margin q-o-q

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

Foot-and-mouth disease impacted cattle feed sales volume Cattle feed realisations declined 0.4% q-o-q

Rice bran and... ... maize prices declined 7% each q-o-q

1,378 1,469 1,497 1,708 1,916 1,856 1,980 1,990 2,029

3.7% 4.0%

2.4%

-3.1%

1.4%

6.8%

1.6% 2.1%

5.6%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

- 500 1,000 1,500 2,000 2,500

Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14

(₹ mn)

Net Sales EBITDA margins (RHS)

23 23 13

-47 6

75 11 17 66 1.6% 1.6%

0.9%

-2.8%

0.3%

4.0%

0.6%0.8%

3.3%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

-60 -40 -20 0 20 40 60 80 100

(₹ mn)

PAT PAT margins (RHS)

94,435 98,422 99615 101,746 99,796 98,090 104,048 99,251 97,649

6.6%

4.2%

1.2%

2.1%

-1.9% -1.7%

6.1%

-4.6%

-1.6%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

88,000 90,000 92,000 94,000 96,000 98,000 100,000 102,000 104,000 106,000

(tonnes)

Cattle feed sales volume Growth q-o-q (RHS)

12,184 12,201 12,370 13,944 16,430 16,360 16,509 17,275 17,212

0.8% 0.1% 1.4%

12.7%

17.8%

-0.4% 0.9%

4.6%

-0.4%

-10%

-5%

0%

5%

10%

15%

20%

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

(₹/tonne)

Cattle feed sales realisation Growth q-o-q (RHS)

8,100 7,000 8,500 13,000 13,880 12,300 13,740 14,500 13,460

-4%

-14%

21%

53%

7%

-11%

12% 6%

-7%

-50%

-30%

-10%

10%

30%

50%

70%

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

(₹/tonne)

Rice bran cost Growth q-o-q (RHS)

11,700 12,800 12,800 14,000 15,320 15,200 15,220 16,100 15,000

-11%

9%

0%

9% 9%

-1% 0%

6%

-7%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

(₹/kg)

Maize cost Growth q-o-q (RHS)

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CRISIL IER Independent Equity Research

Share price movement Fair value movement since initiation

-Indexed to 100

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

Earnings Estimates Revised Upwards

Following lower-than-expected reduction in raw material prices in 9MFY14, we raise our FY14 PAT estimate by 38%. Price of rice bran decreased by 7% q-o-q to ₹13,460/tonne and price of maize declined by 7% q-o-q to ₹15,000/tonne. Onset of the kharif supply (starting October) eased input prices. We expect EBITDA margin of 3.3% in FY14 compared to 3.1% in 9MFY14.

FY14E FY15E FY16E

Unit Old New % change Old New % change Old New % change

Operating income (₹ mn) 7,762 7,895 1.7 8,278 8,278 0.0 9,051 9,051 0.0

EBITDA (₹ mn) 212 257 21.6 228 228 0.0 240 240 0.0

EBITDA margin % 2.7% 3.3% 53bps 2.8% 2.8% 0bps 2.6% 2.6% 0bps

PAT (₹ mn) 90 123 37.8 98 98 0.0 105 105 0.0

PAT margin % 1.2% 1.6% 41bps 1.2% 1.2% 0bps 1.2% 1.2% 0bps

EPS ₹ 28.0 38.5 37.8 30.7 30.7 0.0 32.8 32.8 0.0

Source: CRISIL Research estimates 0

20 40 60 80 100 120 140 160 180 200

Jan-08 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jun-13 Oct-13 Feb-14

KSE CNX 500

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

0 50 100 150 200 250 300

Sep-12 Oct-12 Nov-12 Jan-13 Feb-13 Mar-13 Apr-13 Jun-13 Aug-13 Oct-13 Nov-13 Dec-13 Feb-14

('000) (₹)

Total Traded Quantity (RHS) CRISIL Fair Value KSE

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KSE Ltd

Valuation Grade: 3/5

We maintain our DCF-based fair value of ₹227 per share. This fair value implies P/E multiples of 7.4x FY15E and 6.9x FY16E EPS. At the current market price of ₹238, our valuation grade is 3/5.

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

Apr-07 Aug-07 Dec-07 May-08 Sep-08 Jan-09 Jun-09 Oct-09 Feb-10 Jul-10 Nov-10 Mar-11 Aug-11 Dec-11 Apr-12 Sep-12 Jan-13 May-13 Oct-13 Feb-14

(₹)

KSE 2x 6x

10x 14x 18x

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

Apr-07 Aug-07 Dec-07 May-08 Sep-08 Jan-09 Jun-09 Oct-09 Feb-10 Jul-10 Nov-10 Mar-11 Aug-11 Dec-11 Apr-12 Sep-12 Jan-13 May-13 Oct-13 Feb-14

(₹ mn)

EV 4x 8x 12x 16x

-80%

-60%

-40%

-20%

0%

20%

40%

Apr-07 Aug-07 Jan-08 May-08 Oct-08 Feb-09 Jul-09 Dec-09 Apr-10 Sep-10 Jan-11 Jun-11 Oct-11 Mar-12 Jul-12 Dec-12 May-13 Sep-13 Feb-14

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

0 2 4 6 8 10 12 14 16 18

Apr-07 Aug-07 Jan-08 May-08 Oct-08 Feb-09 Jul-09 Nov-09 Apr-10 Sep-10 Jan-11 Jun-11 Oct-11 Mar-12 Jul-12 Dec-12 May-13 Sep-13 Feb-14

(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 KSE Ltd

Date Nature of report

Fundamental

grade Fair value

Valuation grade

CMP (on the date of report)

13-Sep-12 Initiating coverage 3/5 ₹227 3/5 ₹220

07-Nov-12 Q2FY13 result update 3/5 ₹220 3/5 ₹227

06-Mar-13 Q3FY13 result update 3/5 ₹220 3/5 ₹211

11-June-13 Q4FY13 result update 3/5 ₹220 3/5 ₹219

26-Aug-13 Q1FY14 result update 3/5 ₹220 3/5 ₹200

27-Nov-13 Q2FY14 result update 3/5 ₹208 3/5 ₹186

24-Jan-14 Detailed Report 3/5 ₹227 4/5 ₹195

03-Mar-14 Q3FY14 result update 3/5 ₹227 3/5 ₹238

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KSE Ltd

Annexure: Financials

Source: Company, CRISIL Research

Income statement Balance Sheet

(₹ mn) FY10 FY11 FY12 FY13 FY14E FY15E FY16E (₹ mn) FY12 FY13 FY14E FY15E FY16E

Operating incom e 3,713 4,541 5,427 6,978 7,895 8,278 9,051 Liabilities

EBITDA 189 148 232 142 257 228 240 Equity share capital 32 32 32 32 32

EBITDA m argin 5.1% 3.2% 4.3% 2.0% 3.3% 2.8% 2.6% Reserves 365 375 443 497 555

Depreciation 38 46 46 42 42 47 50 Minorities - - - - - EBIT 150 102 186 100 215 182 189 Net w orth 397 407 475 529 587

Interest 27 32 30 37 33 33 31 Convertible debt - - - - Operating PBT 123 70 156 63 182 149 158 Other debt 262 299 267 269 240

Other income 3 1 3 3 3 3 3 Total debt 262 299 267 269 240

Exceptional inc/(exp) 0 (4) 0 1 - - - Deferred tax liability (net) 18 17 17 17 17

PBT 127 67 159 67 185 152 162 Total liabilities 678 723 759 815 844

Tax provision 44 22 54 21 62 54 57 Assets Minority interest - - - - - - - Net fixed assets 346 387 377 365 345

PAT (Reported) 83 45 104 47 123 98 105 Capital WIP 9 4 2 0 0

Less: Exceptionals 0 (4) 0 1 - - - Total fixed assets 355 391 379 365 345

Adjusted PAT 82 49 104 45 123 98 105 Investm ents 5 6 6 6 6

Current assets Ratios ^Inventory ⁴¹⁵ ⁴⁷⁴ ⁵⁸⁴ ⁶³⁵ ⁶⁹⁴

FY10 FY11 FY12 FY13 FY14E FY15E FY16E Sundry debtors 2 3 3 3 4

Grow th Loans and advances 27 42 56 67 73

Operating income (%) 6.0 22.3 19.5 28.6 13.2 4.9 9.3 Cash & bank balance 54 33 49 74 89

EBITDA (%) 61.6 (21.8) 57.3 (38.6) 80.7 (11.2) 4.9 Marketable securities - - - - - Adj PAT (%) 172.5 (40.2) 111.9 (56.5) 171.2 (20.3) 6.9 Total current assets 498 552 692 779 860

Adj EPS (%) 172.5 (40.2) 111.9 (56.5) 171.2 (20.3) 6.9 Total current liabilities 186 230 322 339 371

Net current assets 312 322 370 440 489

Profitability Intangibles/Misc. expenditure 5 4 4 4 4

EBITDA margin (%) 5.1 3.2 4.3 2.0 3.3 2.8 2.6 Total assets 678 723 759 815 844

Adj PAT Margin (%) 2.2 1.1 1.9 0.7 1.6 1.2 1.2 RoE (%) 27.2 15.0 28.6 11.3 28.0 19.6 18.8 Cash flow RoCE (%) 25.1 16.9 29.9 14.7 29.7 23.6 23.3 (₹ mn) FY12 FY13 FY14E FY15E FY16E RoIC (%) 21.2 15.3 23.9 13.4 23.4 19.1 19.2 Pre-tax profit 159 66 185 152 162

Total tax paid (57) (22) (62) (54) (57)

Valuations Depreciation 46 42 42 47 50

Price-earnings (x) 9.3 15.6 7.3 16.8 6.2 7.7 7.3 Working capital changes (67) (32) (32) (45) (34)

Price-book (x) 2.4 2.3 1.9 1.9 1.6 1.4 1.3 Net cash from operations 81 55 134 100 121

EV/EBITDA (x) 4.9 6.7 4.2 7.2 3.8 4.2 3.8 Cash from investm ents EV/Sales (x) 0.3 0.2 0.2 0.1 0.1 0.1 0.1 Capital expenditure (25) (77) (30) (33) (30)

Dividend payout ratio (%) 38.7 71.1 33.7 68.8 38.5 38.5 38.5 Investments and others (5) (0) - - -

Dividend yield (%) 4.2 4.2 4.6 4.2 6.2 5.0 5.3 Net cash from investm ents (30) (78) (30) (33) (30)

Cash from financing B/S ratios Equity raised/(repaid) - - - - - Inventory days 22 28 29 26 29 29 29 Debt raised/(repaid) 10 37 (32) 2 (29)

Creditors days 8 9 7 9 9 9 9 Dividend (incl. tax) (41) (37) (55) (44) (47)

Debtor days 0 0 0 0 0 0 0 Others (incl extraordinaries) 0 2 0 0 (0)

Working capital days 11 15 17 15 15 16 16 Net cash from financing (31) 2 (87) (42) (76)

Gross asset turnover (x) 6.0 6.5 7.6 9.2 9.7 9.8 10.3 Change in cash position 20 (21) 16 25 15

Net asset turnover (x) 11.0 12.0 15.2 19.0 20.7 22.3 25.5 Closing cash 54 33 49 74 89

Sales/operating assets (x) 9.5 11.6 14.7 18.7 20.5 22.3 25.5 Current ratio (x) 2.9 2.4 2.7 2.4 2.2 2.3 2.3 Quarterly financials Debt-equity (x) 0.9 0.8 0.7 0.7 0.6 0.5 0.4 (₹ mn) Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Net debt/equity (x) 0.5 0.7 0.5 0.7 0.5 0.4 0.3 Net Sales 1,916 1,856 1,980 1,990 2,029 Interest coverage 5.5 3.2 6.2 2.7 6.6 5.6 6.1 Change (q-o-q) 12% -3% 7% 1% 2% EBITDA 27 127 32 41 114

Per share Change (q-o-q) NM NM -74.5% 28.0% 176.1% FY10 FY11 FY12 FY13 FY14E FY15E FY16E EBITDA m argin 1.4% 6.8% 1.6% 2.1% 5.6% Adj EPS (₹) 25.8 15.4 32.6 14.2 38.5 30.7 32.8 PAT 6 75 11 17 66

CEPS 37.8 29.7 47.0 27.4 51.8 45.3 48.5 Adj PAT 6 75 11 17 66

Book value 101.8 104.2 124.1 127.2 148.4 165.3 183.3 Change (q-o-q) NM NM -84.7% 46.4% NM

Dividend (₹) 10.0 10.0 11.0 10.0 14.8 11.8 12.6 Adj PAT m argin 0.3% 4.0% 0.6% 0.8% 3.3%

Actual o/s shares (mn) 3.2 3.2 3.2 3.2 3.2 3.2 3.2 Adj EPS 1.8 23.5 3.6 5.2 20.7

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CRISIL IER Independent Equity Research

CRISIL Research Team

President

Mukesh Agarwal CRISIL Research +91 22 3342 3035 [email protected]

Analytical Contacts

Sandeep Sabharwal Senior Director, Capital Markets +91 22 4097 8052 [email protected]

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 Mohta Director, Customised Research +91 22 3342 3554 [email protected]

Sudhir Nair Director, Customised Research +91 22 3342 3526 [email protected]

Mohit Modi Director, Equity Research +91 22 4254 2860 [email protected]

Jiju Vidyadharan Director, Funds & Fixed Income Research +91 22 3342 8091 [email protected]

Ajay D'Souza Director, Industry Research +91 22 3342 3567 [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

Hani Jalan Director, Capital Markets +91 22 3342 3077 [email protected]

Prosenjit Ghosh Director, Industry & Customised Research +91 22 3342 8008 [email protected]

Business Development – Equity Research

Vishal Shah – Regional Manager Email : [email protected] Phone : +91 9820598908

Shweta Adukia – Regional Manager Email : [email protected] Phone : +91 9987855771

Priyanka Murarka – Regional Manager Email : [email protected] Phone : +91 9903060685

Ankur Nehra – Regional Manager Email : [email protected] Phone : +91 9999575639

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Our Capabilities

Making Markets Function Better

Economy and Industry Research

▪ Largest team of economy and industry research analysts in India

▪ Coverage on 70 industries and 139 sub-sectors; provide growth forecasts, profitability analysis, emerging trends, expected investments, industry structure and regulatory frameworks

▪ 90 per cent of India’s commercial banks use our industry research for credit decisions

▪ Special coverage on key growth sectors including real estate, infrastructure, logistics, and financial services

▪ Inputs to India’s leading corporates in market sizing, demand forecasting, and project feasibility

▪ Published the first India-focused report on Ultra High Net-worth Individuals

▪ All opinions and forecasts reviewed by a highly qualified panel with over 200 years of cumulative experience

Funds and Fixed Income Research

▪ Largest and most comprehensive database on India’s debt market, covering more than 15,000 securities

▪ Largest provider of fixed income valuations in India

▪ Value more than ₹53 trillion (USD 960 billion) of Indian debt securities, comprising outstanding securities

▪ Sole provider of fixed income and hybrid indices to mutual funds and insurance companies; we maintain 12 standard indices and over 100 customised indices

▪ Ranking of Indian mutual fund schemes covering 70 per cent of assets under management and ₹4.7 trillion (USD 85 billion) by value

▪ Retained by India’s Employees’ Provident Fund Organisation, the world’s largest retirement scheme covering over 60 million individuals, for selecting fund managers and monitoring their performance

Equity and Company Research

▪ Largest independent equity research house in India, focusing on small and mid-cap companies; coverage exceeds 125 companies

▪ Released company reports on 1,442 companies listed and traded on the National Stock Exchange; a global first for any stock exchange

▪ First research house to release exchange-commissioned equity research reports in India

▪ Assigned the first IPO grade in India

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Our Office

Ahmedabad 706, Venus Atlantis Nr. Reliance Petrol Pump Prahladnagar, Ahmedabad, India Phone: +91 79 4024 4500 Fax: +91 79 2755 9863

Hyderabad

3rd Floor, Uma Chambers Plot No. 9&10, Nagarjuna Hills, (Near Punjagutta Cross Road) Hyderabad - 500 482, India Phone: +91 40 2335 8103/05 Fax: +91 40 2335 7507 Bengaluru

W-101, Sunrise Chambers, 22, Ulsoor Road,

Bengaluru - 560 042, India Phone: +91 80 2558 0899

+91 80 2559 4802 Fax: +91 80 2559 4801

Kolkata

Horizon, Block 'B', 4th Floor 57 Chowringhee Road Kolkata - 700 071, India Phone: +91 33 2289 1949/50 Fax: +91 33 2283 0597

Chennai Thapar House,

43/44, Montieth Road, Egmore, Chennai - 600 008, India Phone: +91 44 2854 6205/06

+91 44 2854 6093 Fax: +91 44 2854 7531

Pune

1187/17, Ghole Road, Shivaji Nagar, Pune - 411 005, India Phone: +91 20 2553 9064/67 Fax: +91 20 4018 1930

Gurgaon Plot No. 46 Sector 44 Opp. PF Office

Gurgaon - 122 003, India Phone: +91 124 6722 000