BSE SENSEX S&P CNX 19,964 6,039 Stock Info Bloomberg BDE IN Equity Shares (m) 23.8 M.Cap. (INR b)/(usd b) 48/0.9 52-Wk Range (INR) 2,205/1,531 1,6,12 Rel. Perf. (%) -6/-11/-2 Valuation summary (INR b) Y/E Dec 2009 2010 2011 Sales 9.8 11.5 14.9 EBITDA 1.3 1.5 1.8 NP 0.8 0.9 1.2 EPS (INR) 32.7 39.9 51.7 EPS Gr (%) 8.5 55.3 29.6 BV/Sh (INR) 166.1 229.4 279.3 Payout (%) 4.5 2.9 4.5 RoE (%) 21.8 19.0 20.6 RoCE (%) 33.6 28.2 29.8 Valuation P/E (x) 63.9 52.4 40.5 P/BV (x) 12.6 9.1 7.5 EV/EBITDA (x) 37.8 30.8 27.0 Div Yiled (%) 0.0 0.0 0.1 Prices as on 17 January 2013 Shareholding pattern (%) As on Sep-12 Jun-12 Sep-11 Promoter 81.0 81.0 81.0 Dom.Inst 6.9 6.9 7.0 Foreign 1.5 1.4 1.6 Others 10.6 10.7 10.4 Stock performance (1 year) Investors are advised to refer through disclosures made at the end of the Research Report. CMP: INR2,022 18 January 2013 Visit Note Sector: Logistics Blue Dart Express At pole position Unique play in logistic sector, strong parental support from DHL Not Rated We met Blue Dart Express' management and following are the key takeaways: The domestic express package industry is one of the fastest-growing segments within the logistics industry and expected to post a CAGR of ~17% over FY12-15. Blue Dart Express (BDE) is a 75% subsidiary of the global logistics leader DHL and present across both the air and ground express package verticals. While BDE is an undisputed market leader in the air express segment with a dominant market share of ~45%, it is fast emerging as a key player in the ground express cargo segment also, with a market share of ~12% currently. Company's fleet ownership, high service standards and extensive pan India infrastructure advantage have been its key differentiating strength and enables to stave off competition from both local and MNC competitors. We believe BDE, by virtue of its first-mover advantage and infrastructure advantages, enjoys a head start of 3-4 years against its current and potential competitors. BDE trades at P/E of 36.1x CY12 earnings and EV of 22.8x CY12 EBITDA Bloomberg consensus estimates. Not Rated. Express package is one of the fastest-growing logistics vertical The domestic express package industry is valued at ~INR100b, of which the organized segment is only ~50%. The organized express package market can be sub-divided into 1) air express (~INR23b) and 2) ground express (~INR28b). It is one of the fastest-growing segments within the logistics industry and expected to post a CAGR of ~17% over FY12-15. Implementation of GST is likely to be a key positive for BDE and accelerate the shift in market share from unorganized to organized players. Given company's favorable positioning within the industry, we expect it to grow at above industry growth rates and continue to incrementally gain market share. Industry is evolving into a differentiated oligopoly market, with top four players enjoying ~75% market share. BDE is the undisputed market leader Company is a 75% subsidiary of the global logistics leader DHL and present across both air and ground express package distribution vertical. While BDE is an undisputed market leader in the air express segment, with a dominant market share of ~45%, it is fast emerging as a key player in the ground express cargo segment too with a market share of ~12% currently. BDE is also fast emerging as a key player in the e-com segment, which is clocking a CAGR of 30-40%, with a market share of 30-35% and revenues of ~INR1b (~8% of its overall revenues). Enjoys significant infrastructure advantages BDE has an unmatched infrastructure advantage compared to its competitors. It has an in-house extensive fleet of three Boeing 737 and four Boeing 757 freighters offering a revenue payload of over 370ton/night, a flotilla of over 6,272 vehicles, Siddharth Bothra (Siddharth.Bothra@MotilalOswal.com); +91 22 3029 5127
365 facilities including 56 domestic warehouses and 12 express hubs and over 7,792 employees. BDE's own fleet ownership, high service standards and extensive pan India infrastructure advantage have been its key differentiating strengths and enabled it to stave off competition from both local and MNC competitors. We believe the company by virtue of its first-mover advantage and infrastructure advantages enjoys a head start of 3-4 years against its current and potential competitors. Valuations and view BDE is likely to post revenue and net profit CAGR of ~18% and ~22% respectively over CY12-15. As express package industry has a very high fixed cost of 75-80%, operating leverage is very high. Going forward, we believe a combination of factors such as increasing share of value-added business and operating leverage are likely to expand BDE's EBITDA margins from ~12% in FY12 to 13.4% by FY15. By virtue of its first-mover advantage and deep understanding of the domestic market, company has successfully created a pole position within the industry. BDE trades at P/E of 36.1x CY12 earnings and EV of 22.8x CY12 EBITDA Bloomberg consensus estimates. Not Rated. Value chain of express industry Source: Crisil Comparative valuations: Indian Companies Year CMP MCap EPS Gr. (%) P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%) End (INR) (INR b) FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 Blue Dart Dec 2,022 47.6 55.3 29.6 12.1 52.4 40.5 36.1 9.1 7.5 6.2 30.8 27.0 22.8 19.0 20.6 19.0 28.2 29.8 28.1 GATI Jun 36 3.2 48.6 195.5-41.4 23.2 7.9 13.4 1.2 0.8 1.1 9.4 4.1-4.8-4.3-10.0 5.4 - TCI Mar 75 5.5 31.6 8.5 14.9 10.2 9.4 8.2 1.8 1.5 1.3 6.9 4.6-17.1 17.4 30.9 17.8 18.1 - Comparative valuations: Global Companies Year CMP MCap EPS Gr. (%) P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) End (USD) (USDb) CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 Fedex May 99 31.0 - -2.2 22.6 15.2 15.5 12.7 1.8 1.9 1.7 5.7 5.4 4.5 12.3 11.9 14.1 UPS Dec 79 76.0-11.6 12.4 17.3 15.5 13.8 9.8 8.4 6.9 9.3 8.4 7.5 55.3 62.5 66.4 Source: Bloomberg 18 January 2013 2
Market leader in a industry with high entry barriers Expect company to post above industry growth rate; significant e-commerce play Blue Dart Express (BDE) is a 75% subsidiary of the global logistics leader DHL and present across both the air and ground express package distribution vertical. As part of the DHL Group, BDE accesses the largest and most comprehensive express and logistics network worldwide, covering over 220 countries and territories and offers an entire spectrum of distribution services, including air express, freight forwarding, supply chain solutions and customs clearance. BDE is fast emerging as a key player in the ground express cargo segment, with a market share of ~12% currently; it is an undisputed market leader in the air express segment and has a dominant market share of ~45%. BDE has a 49% associate company Blue Dart Aviation Ltd (BDA), which is the only domestic scheduled cargo airline in India. It operates on an exclusive basis for providing air express cargo services to BDE through its network of night operations to support customer demand. Currently, BDA is not consolidated with BDE. Going forward, management has indicated a possibility of BDE increasing its stake in BDA to make it a fully-owned subsidiary. Please refer to the exhibits on page 7 and page 8 for the business model and reach. BDE: Undisputed market leader in air cargo Company is an undisputed market leader in the air express segment, with a dominant market share of ~45%. It is fast emerging as a key player in the ground express cargo segment too with a market share of ~12% currently. BDE is also fast emerging as a key player in the e-com segment, which is clocking a CAGR of 30-40%, with a market share of 30-35% and revenues of ~INR1b (~8% of its overall revenues). Improvement in road infrastructure, setting up of logistic parks, and implementation of GST is expected to cut down transit times, reduce in-transit inventory, increase other efficiencies, and thus encourage demand for Road Express, which coupled with continuing shift from unorganized to organized players, bodes very positively for BDE. Market share across key verticals: Emerging as a key player in ground cargo also (%) Air Cargo: Undisputed leader Ground Cargo: Fast gaining market share Source: Industry, MOSL 18 January 2013 3
Unique positioning in the logistic sector BDE has an unmatched infrastructure advantage compared to its competitors. It has an in-house extensive fleet of three Boeing 737 and four Boeing 757 freighters offering a revenue payload of over 370 ton/night, a flotilla of over 6,272 vehicles, 365 facilities including 56 domestic warehouses and 12 express hubs and over 7,792 employees. All aircraft cargo operations are conducted by BDE's 49% subsidiary BDA, which is currently not consolidated with BDE. BDE's aircraft fleet ownership, high service standards and extensive pan India infrastructure advantage have been its key differentiating strengths and enabled it to stave off competition from both local and MNC competitors. We believe BDE by virtue of its established infrastructure advantages enjoys a head start of 2-4 years against competitors. Inimitable infrastructure advantage Source: Company, MOSL The cargo handled at 6 metro airports for the year 2010-11 stood at 2.1mmt. This was 89% of the total cargo handled at all the airports in India taken together. BDE, due to its access to scarce resources in these key markets, has a significant advantage over competitors. 18 January 2013 4
Economics of express package industry Industry participants need to maintain a network for collection, transportation and distribution of parcels. Cost structure of the industry is largely fixed in nature as significant investment is required for developing a pan India network. Express delivery industry's operations are labor intensive and thus involve high manpower costs. Hence, operating leverage in the industry is very high. Though entry barriers in the industry is low for small players, who can keep the level of investment low by outsourcing and limiting their geographical operations, scaling up operations is a challenge and necessitates high infrastructure investments and access to scarce infrastructure resources. Key costs for the industry are freight handling, terminal charges and staff costs, which account for 80-85% of total operating costs. Typically, pricing is done in volumetric weight basis and varies on factors such as distance and time. Regular customers who offer volumes enjoy more attractive rates compared to individual rates. Given the industry structure, competition is mostly price-based for smaller and medium sized firms. Larger players with distinct scale, infrastructure and reach-advantage are able to offer more reliable, integrated and strategic services to key clients. This allows them to charge a premium and enjoy reasonable pricing power. Key cost items Capital costs Fixed operating costs Variable operating costs Transport infrastructure Manpower costs Commission cost IT systems Hub operations costs Cargo charges Furniture and fixings Infrastructure lease cost Labor charges Buildings Local transport cost Source: MOSL BDE's cost structure (CY11) Source: Company, MOSL 18 January 2013 5
Top six metro airports account for ~89% of traffic BDE has witnessed strong growth Tonnage growth has increased at 22% CAGR, over CY08-11 Shipment growth has increased at 8% CAGR, over CY08-11 Area has increased at 18% CAGR, over CY08-11 Retail Stores (Nos) Skilled employee base is BDE key strength Vehicles has gone up 1.2x Source: ASSOCHAM, Company, MOSL 18 January 2013 6
Outlook - domestic express package industry valued at ~INR100b Industry to grow at CAGR of ~17% over CY12-15E The demand for air cargo transportation has increased significantly over the past few years as product lifecycles have shortened and demand for rapid delivery has increased. Changing business models such as just-in-time manufacturing and global outsourcing have contributed to the rapid growth of air cargo logistics business. Key success drivers for an express service provider are 1) size and scale of operations, 2) pan India coverage, 3) dedicated air and ground infrastructure and 4) a loyal base of customers. The domestic express package industry is valued at ~INR100b, of which the organized segment is only ~50%. The organized express package market can be further sub-divided into 1) air express (~INR23b) and 2) ground express (~INR28b). Unorganized segment still account for 55% of the market Ground Cargo to be the key growth driver Source: MOSL Air express industry - a fastest-growing segment It is one of the fastest-growing segments within the logistics industry and expected to post a CAGR of ~17% over FY12-15. Given BDE's favorable positioning within the industry, we expect it to grow at above industry rates and continue to incrementally gain market share. Industry is evolving into a differentiated oligopoly market, with top four players enjoying ~75% market share. Air cargo industry has three primary types of carriers: combination carriers (passenger airlines that use a portion of their "belly-hold" capacity to carry cargo and may also operate separate air cargo fleets), conventional all-cargo carriers operating both scheduled and charter services, and integrated (express) carriers operating their own fleet of aircraft and delivery vehicles providing overnight, door-to-door service. Air express industry is expected to grow to INR33.6b by CY15 18 January 2013 7
Total cargo handled at Indian airports has grown ~3.5x in the last 15 years from 0.68mmt in FY96 to ~2.39mmt in FY11, a CAGR of 8.7%. Domestic cargo handled has grown ~4x from 0.22mmt in FY96 to 0.89mmt in FY11, a CAGR of 9.7%. Similarly, international cargo handled at Indian airports has grown 3.2x in the same period from 0.46mmt to 1.5mmt, at a CAGR of 8.2%. However, in the last 3 years, domestic cargo throughput is the fastest-growing segment, a CAGR of 13.6%, compared to international cargo throughput at a CAGR of 9.2%. Forecast of Air Freight traffic throughput at Indian Airports Source: MoCA, MOSL Ground express industry - BDE creating a niche presence BDE has been a relatively new entrant in the ground express cargo industry and has successfully created a niche for itself even in this segment, with a market share of ~12%. BDE's market share before refortification of Dart Surfaceline was ~5.9% in 2006. Growth in the ground express vertical is likely to be driven by industries such as motor vehicles, electrical appliances and health services. Management expects outsourcing by large organized retail players to be a key opportunity. The ground vertical is likely to be a key beneficiary from implementation of GST, which not only is likely to boost outsourcing to 3PL players but also accelerate shift in market share from unorganized to organized players. Ground express industry to grow to INR48.3b by FY15 Source: Company, MOSL E-commerce emerging fast as a large opportunity India is among the fastest-growing online market and registered a 41% growth in FY12. Internet usage has reached ~10% penetration in India. With this trend, E-commerce has shown an exciting growth trend among travel and retail sites. Retail 18 January 2013 8
category penetration has increased to ~60% and has grown to ~37.5m visitors (July 2012). Payment models such as cash on delivery (COD) is emerging as a key option, which players like BDE have been able to capitalize by offering value-added differentiated service. Currently, e-commerce accounts for ~8% of BDE's overall revenues and is growing at a CAGR ~30-40%. Company is the market leader in this emerging segment, with a market share of ~35%. Most of the leading online portals continue to rely on external parties like BDE to manage their distribution operations. This is due to their own express package distribution chain being limited to key metros and commercial districts. Some of the key categories within online retail are apparels, consumer goods, retail movies etc which are scalable and are growing at a very fast pace. All these key trends portend positively for a player like BDE. Given the prevalent COD model of payment, BDE's margins in this segment are significantly higher than its core business. Key categories within online retail industry Visitor growth for retail Leading online retail sites 18 January 2013 9
Key plans and strategy Achieve and maintain pole positions across both air and ground verticals BDE's key long term strategy is to achieve and maintain leadership status and pole position in both air and ground express segments. Increase coverage and footprint in tier II and III towns. Enhance and strengthen presence in sectors like e-commerce, pharmaceuticals, auto, consumer, BFSI and IT. Stay ahead of the curve by continuously investing in and adopting next generation technologies. Maintain debt-free status and deliver profitable growth. Valuations and view BDE is an undisputed market leader in the air express segment, with a dominant market share of ~45%. It is fast emerging as a key player in the ground express cargo segment too, with a market share of ~12% currently. By virtue of its first-mover advantage and deep understanding of the domestic market, BDE has successfully created an advantageous positioning for itself within the industry. BDE is likely to post revenue and net profit CAGR of ~18% and ~22% respectively over CY12-15. Express package industry has a very high fixed cost of 75-80%. Hence, operating leverage is very high. Going forward, we believe a combination of factors such as increasing share of value-added business and operating leverage is likely to expand BDE's EBITDA margins from ~12% in FY12 to 13.4% by FY15. BDE trades at P/E of 36.1x CY12 earnings and EV of 22.8x CY12 EBITDA Bloomberg consensus estimates. Not Rated. Historical valuation bands P/E band P/BV band 18 January 2013 10
Historical valuation bands EV/EBITDA band EV/Sales band Comparative valuations: Indian Companies Year CMP MCap EPS Gr. (%) P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%) End (INR) (INR b) FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 FY11 FY12 FY13 Blue Dart Dec 2,022 47.6 55.3 29.6 12.1 52.4 40.5 36.1 9.1 7.5 6.2 30.8 27.0 22.8 19.0 20.6 19.0 28.2 29.8 28.1 GATI Jun 36 3.2 48.6 195.5-41.4 23.2 7.9 13.4 1.2 0.8 1.1 9.4 4.1-4.8-4.3-10.0 5.4 - TCI Mar 75 5.5 31.6 8.5 14.9 10.2 9.4 8.2 1.8 1.5 1.3 6.9 4.6-17.1 17.4 30.9 17.8 18.1 - Comparative valuations: Global Companies Year CMP MCap EPS Gr. (%) P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) End (USD) (USDb) CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 CY12 CY13 CY14 Fedex May 99 31.0 - -2.2 22.6 15.2 15.5 12.7 1.8 1.9 1.7 5.7 5.4 4.5 12.3 11.9 14.1 UPS Dec 79 76.0-11.6 12.4 17.3 15.5 13.8 9.8 8.4 6.9 9.3 8.4 7.5 55.3 62.5 66.4 Source: Bloomberg 18 January 2013 11
Key risks High correlation with GDP growth rate Express cargo package industry has very high correlation with GDP growth rate. Typically, the industry growth rate has been ~1.8-2.2x GDP growth rate. Hence, any moderation in GDP growth rate is likely to lower industry growth rate and negatively impact BDE, given the high operating leverage in the industry. Increasing competition intensity The industry is witnessing an increase in competition intensity from large local and global MNC players. Given the tremendous potential of the industry, many global MNCs have drawn up aggressive expansion plans for India, which is likely to increase the competition intensity for BDE. Nonetheless, given BDE's first-mover advantage and established infrastructure strengths, competitors are likely to find it difficult to gain advantage over it. Volatility in crude oil prices Crude oil price fluctuations are a key risk for BDE given that it accounts for significant portion of its overall cost. Company follows fuel surcharge-based pricing mechanism to counter this key risk. 18 January 2013 12
Annexure Integrated business model Full Suite of Integrated Solutions Core Service Offerings Express Services Offerings Express Services Offerings Express Services Offerings Domestic Priority Domestic door-to-door delivery service for documents and small shipments under 32 kgs per piece GOGREEN Carbon Neutral Services Environmentally responsible shipping option to neutralize carbon emissions Airport-to-Airport Air freight service between Ahmedabad, Kolkata, Delhi, Mumbai, Bengaluru, Hyderabad and Chennai Dart Apex Door-to-door day definite delivery solution for commercial shipments Time Definite Delivery (TDD) Services, Guaranteed door-to-door TDD of shipments by specified time with full money back guarantee Interline Services Agreements with major international airlines for interline trans-shipment of cargo Dart Surfaceline Premium ground express service providing door-todoor ground distribution solutions Cash on Delivery (COD) Value of the shipment will be collected from the consignee at the time of delivery Charter Services Charter flights for distribution of large cargo volumes supported by ground-handling facilities Dart Surfaceline Plus Multimodal, door-to-door, distribution for less timesensitive bulk shipments Smart Box Air / Ground Packaging unit sized 10 kgs and 25 kgs Demand Draft on Delivery (DOD) Collection of demand draft from consignee for shipper Freight on Delivery (FOD) Collection of freight charge from consignee. Freight On Value (FOV) Facilitate transit insurance of consignment Co-Load Domestic air network for leading International express operators India Post Support for Express Mail Service (EMS) service of India Post Express Pallet Air/ Ground Packaging unit sized 50 kgs, 75 kgs and 100 kgs Temperature Controlled Logistics Movement in frozen, chilled and ambient conditions for temperature ranging from -20 C, 2-8 C and 15-25 C International Services Door-to-door delivery of international documents and packages. Reach to 220 countries and territories worldwide through DHL Ground Point to Point Ground express solutions wherein entire truck is contracted to a single customer from origin to destination Customized Solutions Customized offerings for students, festivals and Small Medium Enterprises (SMEs) Source: Company, MOSL 18 January 2013 13
Blue Dart: A Benchmark in Express Logistics and Distribution Industry Blue Dart, with many industry-firsts and trend-setting innovations, has evolved as the undisputed market leader Blue Dart is Born First Adopter of Technology (Track and Trace) Introduced Customer Satisfaction Survey (CSS) in India First Domestic Cargo Aviation Infrastructure Introduced 2B737s First to be Certified to ISO 9001 Standards Re-certified to ISO 9001-2000 Standards Sales Alliance with DHL DHL Acquires 81.03% Shareholding Inducted 3rd Boeing 757-200 and Refortified Dart Surfaceline Introduced First Choice Introduced Handheld Devices Introduced Time Definite Delivery (TDD) for Domestic Priority and Apex Superbrand 5th Consecutive Year 1983 1984 1991 1992 1993 1994 1996 2000 2001 2002 2004 2005 2006 2007 2008 2009 First Domestic and International Onboard Couriers Introduced Employee Satisfaction Survey (ESS) in India E-mail Network Started Goes Public with Equity Offer of 2.55mn Shares Website Launched Bonus Issue of Equity Shares in 1:1 Ratio Induction of 3rd B737-200 Induction of 4th and 5th B737-200 Express Freighters First to Induct 2 Boeing 757-200s 25th Year of Blue Dart Inducted 4th B757 First Integrated Blue Dart-DHL facility at Bengaluru International Airport Pilots Smart Truck Launches India s First GOGREEN Carbon Neutral Service 2010 2011 2012 Certified to ISO 9001 2008 Standards Inducted 5th B757 Introduced Net Promoter Score Source: Company, MOSL 18 January 2013 14
Financials and Valuation Income Statement (INR Million) Y/E December CY06 CY07 CY08 CY09 CY10 CY11 Net Sales 6,708 8,115 9,767 9,075 11,499 14,923 Change (%) 61.0 21.0 20.4-7.1 26.7 29.8 Total Expenditure 5,692 6,819 8,509 8,032 9,952 13,155 % of Sales 84.8 84.0 87.1 88.5 86.5 88.2 EBITDA 1,016 1,296 1,258 1,043 1,547 1,767 Margin (%) 15.2 16.0 12.9 11.5 13.5 11.8 Depreciation 222 242 168 179 194 218 EBIT 794 1,054 1,090 864 1,353 1,550 Int. and Finance Charges 18 4 5 6 0 0 Other Income - Rec. 18 35 109 77 54 248 PBT bef. EO Exp. 794 1,085 1,194 936 1,407 1,798 EO Expense/(Income) -12-15 -1 0-4 -2 PBT after EO Exp. 806 1,100 1,195 935 1,411 1,800 Current Tax 286 390 414 318 465 570 Deferred Tax -3-17 2 7-4 1 Tax Rate (%) 35.1 33.9 34.8 34.8 32.6 31.7 Reported PAT 523 727 778 610 950 1,229 PAT Adj for EO items 516 717 778 610 948 1,228 Change (%) 13.9 39.1 8.5-21.6 55.3 29.6 Margin (%) 7.7 8.8 8.0 6.7 8.2 8.2 Less: Mionrity Interest 0 0-1.9-1.6-0.4-14.1 Net Profit 516 717 780 612 948 1,242 Balance Sheet (INR Million) Y/E December CY06 CY07 CY08 CY09 CY10 CY11 Equity Share Capital 238 238 238 238 238 238 Total Reserves 2,274 2,958 3,710 4,294 5,213 6,400 Net Worth 2,512 3,195 3,947 4,531 5,451 6,637 Deferred Liabilities 221 205 217 215 216 219 Total Loans 102 0 0 0 0 0 Capital Employed 2,834 3,401 4,164 4,746 5,667 6,857 Gross Block 2,460 2,590 2,877 3,024 3,275 3,952 Less: Accum. Deprn. 761 977 1,135 1,300 1,438 1,621 Net Fixed Assets 1,699 1,613 1,742 1,725 1,837 2,332 Capital WIP 18 34 89 171 267 67 Total Investments 269 628 711 1,052 969 747 Curr. Assets, Loans&Adv. 1,514 2,029 2,566 2,849 3,892 5,293 Inventory 18 20 22 20 22 26 Account Receivables 888 1,093 1,154 1,259 1,533 1,890 Cash and Bank Balance 133 314 487 260 354 403 Loans and Advances 476 602 902 1,309 1,984 2,975 Curr. Liability & Prov. 695 932 982 1,079 1,334 1,620 Account Payables 611 833 847 979 1,218 1,475 Provisions 84 99 135 100 116 146 Net Current Assets 819 1,097 1,584 1,770 2,559 3,673 Appl. of Funds 2,834 3,401 4,164 4,746 5,667 6,857 18 January 2013 15
Financials and Valuation Ratios Y/E December CY06 CY07 CY08 CY09 CY10 CY11 Basic (INR) * EPS 21.7 30.2 32.7 25.7 39.9 51.7 Cash EPS 31.0 40.4 39.8 33.2 48.1 60.9 BV/Share 105.7 134.5 166.1 190.7 229.4 279.3 DPS 1.0 1.0 1.0 1.0 1.0 2.0 Payout (%) 5.3 3.8 3.6 4.5 2.9 4.5 Valuation (x) * P/E 81.5 52.4 40.5 Cash P/E 63.0 43.5 34.4 P/BV 11.0 9.1 7.5 EV/Sales 5.3 4.1 3.2 EV/EBITDA 45.8 30.8 27.0 Dividend Yield (%) 0.0 0.0 0.1 Return Ratios (%) RoE 22.7 25.1 21.8 14.4 19.0 20.6 RoCE 32.1 37.5 33.6 22.2 28.2 29.8 Working Capital Ratios Asset Turnover (x) 2.4 2.4 2.3 1.9 2.0 2.2 Inventory (Days) 1.0 0.9 0.8 0.8 0.7 0.6 Debtor (Days) 48 49 43 51 49 46 Leverage Ratio (x) Current Ratio 2.2 2.2 2.6 2.6 2.9 3.3 Debt/Equity 0.0 0.0 0.0 0.0 0.0 0.0 * Adjusted for treasury stocks Cash Flow Statement (INR Million) Y/E December CY06 CY07 CY08 CY09 CY10 CY11 Oper. Profit/(Loss) before Tax 794 1,054 1,090 864 1,353 1,550 Interest/Dividends Recd. 18 35 109 77 54 248 Depreciation 222 242 168 179 194 218 Direct Taxes Paid -286-390 -414-318 -465-570 (Inc)/Dec in WC -133-97 -314-413 -695-1,065 CF from Operations 615 844 638 389 441 381 EO expense -75-10 -8-15 -52-34 CF from Operating incl EO 540 835 630 374 389 347 (inc)/dec in FA -37-146 -343-229 -347-477 (Pur)/Sale of Investments -112-359 -83-341 83 221 CF from investments -150-504 -425-570 -264-256 Issue of Shares -12-15 1 2-3 13 (Inc)/Dec in Debt -318-102 0 0 0 0 Interest Paid -18-4 -5-6 0 0 Dividend Paid -28-28 -28-28 -28-55 CF from Fin. Activity -376-149 -32-31 -31-43 Inc/Dec of Cash 15 181 173-227 93 49 Add: Beginning Balance 118 133 314 487 260 354 Closing Balance 133 314 487 260 353 403 18 January 2013 16
N O T E S 18 January 2013 17
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