CMP 1180.85

Target Price 1189.00

ISIN: INE069A01017

FEBRUARY 14th

2014

ADITYA BIRLA NUVO LTD

Result Update: Q3 FY14

BUYBUYBUYBUY

Index Details

Stock Data

Sector Diversified

BSE Code 500303

Face Value 10.00

52wk. High / Low (Rs.) 1290.10/930.00

Volume (2wk. Avg.) 19000

Market Cap (Rs. in mn.) 140596.97

Annual Estimated Results (A*: Actual / E*: Estimated)

YEARS FY13A FY14E FY15E

Net Sales 254902.00 259157.72 279890.34

EBITDA 41423.20 49769.55 53782.47

Net Profit 10588.90 12474.58 13518.55

EPS 88.09 95.90 103.92

P/E 12.27 11.27 10.40

Shareholding Pattern (%)

1 Year Comparative Graph

ADITYA BIRLA NUVO LTD S&P BSE SENSEX

SYNOPSIS

Aditya Birla Nuvo Ltd. (ABNL), a US$ 4.75 billion diversified conglomerate by revenue size, is a part of Aditya Birla Group, a US$ 42 billion Indian business house.

The company’s net profit jumps to Rs. 3452.70 mn against Rs. 3232.10 mn in Q3 FY13, an increase of 6.83%.

Revenue for the quarter rose by 3.80% to Rs. 65448.00 mn from Rs. 63050.60 mn, when compared with the prior year period.

EBITDA is Rs. 12965.10 mn as against Rs. 10901.10 mn in Q3 FY13.

Aditya Birla Financial Services posted revenue of Rs. 14750.00 mn and earnings before tax of Rs. 1840.00 mn during the quarter.

The lending book of Aditya Birla Finance grew to Rs. 1,01,000 mn, growing YoY by 56% and QoQ by 22%.

Revenue of Fashion & Lifestyle business rose by 12% to Rs. 15632.80 mn and EBITDA by 41% to Rs. 1920 mn.

Idea is consistently outperforming the industry and revenue market share surged from 14.3 per cent to 15.8 per cent.

Revenue from the manufacturing businesses at Rs. 11089.00 mn and EBITDA at Rs. 1180.00 mn.

Standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33 compared to 3.3 and 0.53 respectively in March 2012-13.

Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 13% over 2012 to 2015E respectively.

PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Aditya Birla Nuvo Ltd 1080.85 140596.97 88.09 12.27 1.42 65.00

Balmer Lawrie & Co.Ltd 297.95 8491.80 47.70 6.25 1.37 308.00

Kesoram Industries Ltd 59.80 6564.80 - - 0.66 10.00

Empire Industries Ltd 485.00 2910.00 47.92 10.12 2.91 240.00

Recommendation & Analysis - ‘BUY’

For Q3 FY14, Aditya Birla Nuvo Limited posted the top-line growth of 3.80% to Rs. 65448.00 mn. Aditya Birla

Financial Services (ABFS) is one of the largest players in the non-banking financial services space. With funds

under management of Rs. 11,72,780 mn, ABFS ranks among the top 5 fund managers in India, excluding LIC. It

posted revenue of Rs.14750.00 mn and earnings before tax of Rs.1840.00 mn during the quarter. It is generating

ROACE of 27 per cent per annum. As on 31st December 2013, the lending book of Aditya Birla Finance grew to Rs.

1,01,000 mn, growing y-o-y by 56% and q-o-q by 22%. Revenue of Fashion & Lifestyle business rose by 12% to

Rs. 15632.80 mn and EBITDA by 41% to Rs. 1920 mn. It expanded its retail presence to 1,670 exclusive brand

outlets / stores, spanning nationwide across 4.11 million square feet. It is generating an operating ROACE of 31%

per annum.

Idea is consistently outperforming the industry. Its revenue market share surged from 14.3 per cent to 15.8 per

cent. It posted a strong growth in earnings and ROACE led by robust voice and data usage, improved voice

realization, scale benefit and cost efficiency. Its revenue soared by 19% to Rs. 16697.60 mn. Idea is generating

healthy cash profits and is strengthening its balance sheet quarter after quarter. The revenue of Aditya Birla

Minacs increased by 19% to Rs. 7419.30 mn and EBITDA grew by 5% to Rs. 730.00 mn. Revenue from the

manufacturing businesses at Rs. 11089.00 mn and EBITDA at Rs. 1180.00 mn are lower by 19% mainly on

account of discontinuance of trading in imported P&K fertilizers. Rayon business recorded its highest ever

quarterly earnings. The new superfine yarn unit currently operates at full, will help in enhancing the product

quality and range.

Standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33 compared

to 3.3 and 0.53 respectively in March 2012-13. In November 2013, the promoters infused Rs. 6710 mn on

conversion of remaining warrants. The strengthening of the company's balance sheet will support its growth

plans, going forward. Over FY2012-15E, we expect the company to post a CAGR of 9% and 13% in its top-line

and bottom-line respectively. We recommend ‘BUY’ for ‘Aditya Birla Nuvo Limited’ on the stock with a

price target of Rs. 1189.00.

QUARTERLY HIGHLIGHTS (CONSOLIDATED)

Results updates- Q3 FY14,

Aditya Birla Nuvo Limited, together with its

subsidiaries, engages in the financial services,

telecom, fashion and lifestyle, IT-ITeS, and

manufacturing businesses in India and worldwide,

reported its financial results for the quarter ended

31st Dec, 2013.

Months Dec-13 Dec-12 % Change

Net Sales 65448.00 63050.60 3.80

PAT 3452.70 3232.10 6.83

EPS 26.54 28.47 (6.77)

EBITDA 12965.10 10901.10 18.93

The company’s net profit jumps to Rs. 3452.70 million against Rs. 3232.10 million in the corresponding quarter

ending of previous year, an increase of 6.83%. Revenue for the quarter rose by 3.80% to Rs. 65448.00 million

from Rs. 63050.60 million, when compared with the prior year period. Reported earnings per share of the

company stood at Rs. 26.54 a share during the quarter, registering 6.77% decrease over previous year period.

Profit before interest, depreciation and tax is Rs. 12965.10 million as against Rs. 10901.10 million in the

corresponding period of the previous year.

Break up of Expenditure

Break up of Expenditure

Rs. Millions

Q3 FY14 Q3 FY13

Cost of Material Consumed 8186.40 10493.20

Purchase of Stock-In-Trade 6005.30 5686.00

Employee Benefit Expenses 9906.20 8790.40

Depreciation & Amortization Expense

4071.30 3341.80

Other Expenses 23292.90 21171.30

Benefits paid - Life Insurance Business

9121.10 10398.10

Segment Revenue

Quarterly Business-wise performance

• Aditya Birla Financial Services

Aditya Birla Financial Services (ABFS) is one of the largest players in the non-banking financial services

space. With funds under management of Rs.11,72,780 million, ABFS ranks among the top 5 fund managers in

India, excluding LIC. It posted revenue of Rs.14778.10 million and earnings before tax of Rs.1840.00 million

during the quarter. It is generating ROACE of 27 per cent per annum.

� Birla Sun Life Asset Management is the 4th largest asset management company in India, with a market

share of 9.7%. Its average AUM is up by 12 per cent to Rs. 9,26,110 million.

� The lending book of Aditya Birla Finance expanded by 56% to Rs. 1,01,000 million as on 31st December

2013. To support its growth, a share capital of Rs.2500 million was infused, taking its net worth to

Rs.14,480 million.

• Fashion & Lifestyle

Revenue of Fashion & Lifestyle business rose by 12 per cent to Rs. 15632.80 million and EBITDA by 41% to

Rs. 1920 million. It expanded its retail presence to 1,670 exclusive brand outlets / stores, spanning

nationwide across 4.11 million square feet. It is generating an operating ROACE of 31% per annum.

� Madura posted all round growth in top-line, margins and free cash flows. During the quarter, its revenue

grew by 23% to Rs. 8550 million and EBITDA doubled to Rs. 1160 million, led by growth in wholesale

channel, retail stores expansion and 4% like-to-like retail stores sales growth. Madura added 276 stores

and generated free cash flows of about Rs. 2500 million during nine months.

� Pantaloons is in the investment phase and are strengthening its retail presence, brand positioning and

merchandise to enhance sell through. It has launched 9 new Pantaloons stores and 1 factory outlet during

nine months.

� To strengthen its market leadership, Jaya Shree has expanded linen yarn capacity from 2,300 to 3,400

tonnes per annum and Linen fabric capacity expansion from 7.3 to 10.1 million meters per annum.

• Telecom

� Idea is consistently outperforming the industry. Its revenue market share surged from 14.3 per cent to

15.8 per cent.

� It posted a strong growth in earnings and ROACE led by robust voice and data usage, improved voice

realization, scale benefit and cost efficiency.

� Its revenue soared by 19% to Rs. 16697.60 million. Idea is generating healthy cash profits and is

strengthening its balance sheet quarter after quarter.

• IT-ITeS

� The revenue of Aditya Birla Minacs increased by 19% to Rs. 7419.30 million and EBITDA grew by 5% to

Rs. 730.00 million.

� The business is posting steady cash profit.

• Manufacturing

� Revenue from the manufacturing businesses at Rs. 11089.00 million and EBITDA at Rs. 1180.00 million

are lower by 19% mainly on account of discontinuance of trading in imported P&K fertilizers, which has

also led to rationalization of capital employed through reduction in the outstanding subsidy and

receivables.

� The Rayon business recorded its highest ever quarterly earnings. The new superfine yarn unit, currently

operating at full, will help in enhancing the product quality and range.

• Balance sheet

� The standalone net debt to annualized EBITDA improved to 2.1 and net debt to equity improved to 0.33

compared to 3.3 and 0.53 respectively in March 2012-13. In November 2013, the promoters infused

Rs.671 crore on conversion of remaining warrants.

� The strengthening of the company's balance sheet will support its growth plans, going forward.

Latest Updates

• During the quarter, the Company has approved Grant of 104,272 Employee Stock Options and 101,731

Restricted Stock Units to the eligible Employees of the Company under "Aditya Birla Nuvo Limited Employee

Stock Option Scheme 2013".

• The Company has approved allotment of 98.20 Lakhs Equity Shares of Rs. 10 each at a premium of Rs. 900.86

each on 8th November 2013 against warrant allotted on a preferential basis to the promoter and promoter

group Company.

• ABNL IT & ITeS Limited, a wholly owned subsidiary of the Company has approved the divestment of shares

held by it in its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide Limited, and has executed a Share

Purchase Agreement with a group of investors led by Capital Square Partners and CX Partners at an

Enterprise Value of USD 260 Million.

COMPANY PROFILE

Aditya Birla Nuvo Ltd. (ABNL) is a US$ 4.75 billion conglomerate by revenue size. It is part of Aditya Birla Group,

a US$ 42 billion Indian multinational operating in 36 countries in six continents. Having a market cap of ~US$ 2.5

billion as on 23 July 2013, ABNL is present across Financial Services, Telecom, Fashion & Lifestyle, IT-ITeS and

Manufacturing businesses. Anchored by over 136,000 employees belonging to 42 nationalities and derives more

than 50 per cent of its revenue from its overseas operations.

It is a leading player in most segments, including viscose filament yarn, carbon black, branded garments, agri-

business, textiles and insulators. Over the past few years, Aditya Birla Nuvo, through its subsidiaries and joint

ventures, has made successful forays into life insurance, telecom, business process outsourcing (BPO), IT

services, asset management and financial services.

Aditya Birla Financial Services ranks among the top 5 fund managers in India (excl. LIC), managing AUM of ~USD

20 billion and having an annual revenue size of over USD 1.2 billion (2012-13).

Madura Fashion & Lifestyle is the largest premium branded apparel player in India selling one branded apparel

every second. With the acquisition of Pantaloons, its annual revenue has reached USD 1 billion. Madura sells

leader brands viz., Louis Philippe, Van Heusen, Allen Solly and Peter England through 1587 exclusive brand

outlets spanning across 3.9 million square feet area besides more than 4750 departmental stores and multi

brand outlets.

As a leading player, Aditya Birla Nuvo ranks as:

• Aditya Birla Financial Services ranks among the top 5 fund managers in India (excl. LIC), with AUM (assets

under management) of ~USD 20 billion and having an annual revenue size of over USD 1.2 billion (2012-13).

• Birla Sun Life Insurance (BSLI) is a 74:26 joint venture between ABNL and Sun Life Financial, Canada. BSLI

improved its ranking to 5th among private players with an enhanced market share of 8 per cent in FY13. It

reported Embedded Value of Rs.4,015 crore as on 31st March 2012 and VNB margin at 22.8 per cent.

• ABNL holds 25.27 per cent in Idea Cellular, a ~USD 8.5 billion company by market cap as on 23 July 2013. It

posted revenue of ~USD 4 billion in FY12. Idea is the 3rd largest cellular operator in India with revenue

market share at 15.7 per cent (Q4FY13) and it has been the highest gainer of revenue market share since past

four years.

• Aditya Birla Minacs is the 6th largest Indian BPO company with revenue size of over USD 450 million in FY13.

• Manufacturing businesses (Agri, Rayon and Insulators) posted combined revenue of USD 770 million

(Rs.4155 crore) in FY13.

Business Area and its Brands

• Garments — Madura Fashion & Lifestyle

a) Louis Philippe

b) Van Heusen

c) Allen Solly

d) Peter England

e) Espirit

f) People

g) The Collective- Retailing International Brand

• Viscose Filament Yarn — Indian Rayon

• Garments — Madura Fashion & Lifestyle

• Carbon Black — Hi-Tech Carbon

• Agri solutions — Indo Gulf Fertilisers, Birla Shaktimaan

• Textiles — Jaya Shree Textiles

• Insulators — Aditya Birla Insulators

Joint Ventures and Subsidiaries

• Life Insurance — Birla Sun Life Insurance Company Limited (A 74:26 joint venture between ABNL and

Sun Life Financial, Canada)

• Asset Management — Birla Sun Life Asset Management Company Limited (A 50:50 joint venture

between ABNL and Sun Life Financial, Canada)

• NBFC - Aditya Birla Finance Limited (100 per cent subsidiary of ABNL)

• Other Financial services —Aditya Birla Capital Advisors Private Limited (Private Equity), Aditya Birla

Money Limited (Broking), Aditya Birla Money Mart Limited (Wealth Management), Aditya Birla

Insurance Brokers Limited (General Insurance Advisory)

• Telecom — Idea Cellular Limited (A joint venture, ABNL owns 25.27 per cent)

• IT-ITeS — Aditya Birla Minacs Worldwide Limited (~100 per cent subsidiary of ABNL)

Global Exposure

Over 50 per cent of the Aditya Birla Group’s revenues flow from its overseas operations.

The Group operates in 36 countries

Australia, Austria, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy,

Ivory Coast, Japan, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Poland, Russia, Singapore, South

Africa, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Turkey, UAE, UK, USA, and Vietnam.

FINANCIAL HIGHLIGHT (CONSOLIDATED) (A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as at March31, 2012 -2015E

ADITYA BIRLA NUVO LTD. FY12A FY13A FY14E FY15E

SOURCES OF FUNDS

Shareholder's Funds

Share Capital 1136.20 1203.10 1300.80 1300.80

Reserves and Surplus 74029.80 90398.70 103932.25 118361.52

Money Received against Share Warrants 0.00 2236.20 2236.20 0.00

1. Sub Total - Net worth 75166.00 93838.00 107469.25 119662.32

2. Preference Share issued by Subsidiary and Joint Venture

Companies 4.90 4.90 0.30 0.32

3. Minority Interest 3009.30 9404.30 7711.53 8097.10

Non Current Liabilities

long term borrowing 52835.40 88957.10 96073.67 102318.46

Deferred Tax Liabilities 3325.40 4495.40 5124.76 5739.73

Other Long term liabilities 3580.30 5114.70 5626.17 6076.26

Long term Provisions 757.70 1300.90 2029.40 2394.70

Policyholders' Fund 192302.80 210747.30 225499.61 237676.59

Fund for Future Appropriations 1775.90 667.70 460.80 483.84

4. Sub Total - Non Current liabilities 254577.50 311283.10 334814.41 354689.57

Current Liabilities

Short term borrowings 56848.80 71939.20 50357.44 42300.25

Trade payables 23513.80 31729.30 34902.23 37694.41

Other Current liabilities 30521.30 45757.70 43012.24 46023.09

Short term Provisions 2366.80 2761.40 2347.19 2581.91

Policyholders' Fund 3378.60 2920.10 3328.91 3595.23

Fund for Future Appropriations 2183.00 1428.00 683.80 724.83

5. Sub Total - Current liabilities 118812.30 156535.70 134631.81 132919.72

Total Liabilities (1+2+3+4+5) 451570.00 571066.00 584627.30 615369.03

APPLICATION OF FUNDS

Non-Current Assets

Fixed Assets 93651.60 118394.20 125108.04 130362.58

Goodwill on consolidation 31254.70 36046.70 39507.18 41877.61

Non-current investments 26143.10 33382.10 37387.95 40378.99

Assets Held to Cover Linked Liabilities of Life Insurance

Business 151585.80 162157.10 163778.67 166235.35

Deferred Tax Assets (Net) 159.50 212.50 315.50 372.29

Long-term Loans and Advances 15513.30 46511.80 52093.22 56260.67

Other non-current assets 82.40 45.70 74.50 78.23

1. Sub Total - Non Current Assets 318390.40 396750.10 418265.06 435565.72

Current Assets

Current Investment 11561.80 28696.40 18962.48 22208.43

Assets Held to Cover Linked Liabilities of Life Insurance

Business 29778.40 31213.60 30901.46 31550.39

Inventories 13649 18150.30 15972.26 16770.88

Trade receivables 22206.80 33645.80 26580.18 28068.67

Cash and Bank Balances 14159.10 8243.90 12365.85 14468.04

Short-terms loans & advances 35291.10 47464.00 53159.68 57306.14

Other current assets 6533.40 6901.90 8420.32 9430.76

2. Sub Total - Current Assets 133179.60 174315.90 166362.24 179803.31

Total Assets (1+2) 451570.00 571066.00 584627.30 615369.03

Annual Profit & Loss Statement for the period of 2012 to 2015E

Value(Rs.in.mn) FY12A FY13A FY14E FY15E

Description 12m 12m 12m 12m

Net Sales 218402.90 254902.00 259157.72 279890.34

Other Income 3087.40 3606.20 3240.20 3402.20

Total Income 221490.30 258508.20 262397.92 283292.54

Expenditure -188899.30 -217085.00 -212628.37 -229510.08

Operating Profit 32591.00 41423.20 49769.55 53782.47

Interest -8367.30 -13211.60 -15092.68 -16601.95

Gross profit 24223.70 28211.60 34676.87 37180.52

Depreciation -10923.30 -12954.90 -16145.49 -18728.77

Exceptional Items -1038.80 0.00 240.60 0.00

Profit Before Tax 12261.60 15256.70 18771.98 18451.75

Tax -2160.10 -3417.80 -5238.43 -4022.48

Profit After Tax 10101.50 11838.90 13533.55 14429.27

Minority Interest -1200.20 -1250.00 -1058.97 -910.71

Net Profit 8901.30 10588.90 12474.58 13518.55

Equity capital 1135.20 1202.10 1300.80 1300.80

Reserves 74029.80 90398.70 103932.25 118361.52

Face value 10.00 10.00 10.00 10.00

EPS 78.41 88.09 95.90 103.92

Quarterly Profit & Loss Statement for the period of 30th June, 2013 to 31st March, 2014E

Value(Rs.in.mn) 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14E

Description 3m 3m 3m 3m

Net sales 57445.40 64926.00 65448.00 71338.32

Other income 948.80 732.00 725.30 834.10

Total Income 58394.20 65658.00 66173.30 72172.42

Expenditure -46655.50 -53625.20 -53208.20 -59139.47

Operating profit 11738.70 12032.80 12965.10 13032.95

Interest -3772.70 -3565.50 -3557.10 -4197.38

Gross profit 7966.00 8467.30 9408.00 8835.57

Depreciation -3876.80 -3841.10 -4071.30 -4356.29

Exceptional Items 240.60 0.00 0.00 0.00

Profit Before Tax 4329.80 4626.20 5336.70 4479.28

Tax -773.80 -1552.50 -1577.30 -1334.83

Profit After Tax 3556.00 3073.70 3759.40 3144.45

Minority Interest -242.70 -172.20 -306.70 -337.37

Net Profit 3313.30 2901.50 3452.70 2807.08

Equity capital 1202.30 1202.60 1300.80 1300.80

Face value 10.00 10.00 10.00 10.00

EPS 27.56 24.13 26.54 21.58

Ratio Analysis

Particulars FY12A FY13A FY14E FY15E

EPS (Rs.) 78.41 88.09 95.90 103.92

EBITDA Margin (%) 14.92% 16.25% 19.20% 19.22%

PBT Margin (%) 5.61% 5.99% 7.24% 6.59%

PAT Margin (%) 4.63% 4.64% 5.22% 5.16%

P/E Ratio (x) 13.78 12.27 11.27 10.40

ROE (%) 13.44% 12.92% 12.86% 12.06%

ROCE (%) 23.54% 21.54% 26.19% 27.44%

Debt Equity Ratio 1.46 1.76 1.39 1.21

EV/EBITDA (x) 9.01 10.02 7.92 7.28

Book Value (Rs.) 662.13 762.01 808.99 919.91

P/BV 1.63 1.42 1.34 1.17

Charts

OUTLOOK AND CONCLUSION

� At the current market price of Rs.1080.85, the stock P/E ratio is at 11.27 x FY14E and 10.40 x FY15E

respectively.

� Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.95.90 and

Rs.103.92 respectively.

� Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 13% over 2012 to 2015E

respectively.

� On the basis of EV/EBITDA, the stock trades at 7.92 x for FY14E and 7.28 x for FY15E.

� Price to Book Value of the stock is expected to be at 1.34 x and 1.17 x respectively for FY14E and FY15E.

� We recommend ‘BUY’ in this particular scrip with a target price of Rs.1189.00 for Medium to Long term

investment.

INDUSTRY OVERVIEW

Financial Services in India

India’s financial services sector is diversifying and growing at a good rate. The sector is bank dominated with

commercial banks holding over 60 per cent of the total assets, followed by the insurance industry. The sector

comprises commercial banks, insurance firms, cooperatives, non-banking institutions, mutual funds, pension

funds and other financial entities.

Over the last 20 years, the sector has developed a more modern outlook. The government introduced several

reforms to liberalise, regulate and enhance the country's financial services by embracing best international

practices. The results have been encouraging, with India today globally recognised as among the most vibrant

and transparent capital markets regarding market efficiency and transparency.

While challenges still remain for the future, the prospects for India’s financial services are brighter than ever

before.

Insurance Sector

Insurance companies will now have greater freedom to invest in sectors such as IT and pharma. The Insurance

Regulatory and Development Authority (IRDA) has increased the sector specific exposure limit for investments

by insurers to 20 per cent of the total investment, from 15 per cent. Up till now, life and non-life insurers were

allowed to take an exposure in a specific sector – excluding banking, financial services and infrastructure sectors

– to 15 per cent of total investments (which included debt and equity).

Investment corpus in the Indian pension sector is projected to go beyond US$ 1 trillion by 2025 following the

passing of the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013, according to an industry

report.

The insurance sector also has bright times ahead. Life Insurance Council, the industry body of life insurers in

India, has estimated a CAGR of 12–15 per cent over the next five years for the segment. The country’s insurable

population is projected to touch 750 million by 2020.

Retail Industry

Estimated to be worth more than US$ 500 billion, the Indian retail industry is considered as one of the world’s

top five retail markets in terms of economic value. The industry is experiencing exponential growth, with retail

development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities.

The Indian retail market is expected to touch US$ 1.3 trillion by 2020 from its existing level of around US$ 500

billion, according to Union Ministry for Food and Consumer Affairs.

The foreign direct investment (FDI) inflows in single-brand retail trading during the period April 2000–

September 2013 stood at US$ 97.29 million, according to Department of Industrial Policy and Promotion (DIPP).

The upcoming years of Indian retail industry are highly favourable for luxury goods. The overall Indian retail

sector is expected to grow 9 per cent during 2012–16, with organised retail growing at 24 per cent or three times

the pace of traditional retail (which is expected to expand at 8 per cent).

Indian Telecom Industry

India is the world’s second-largest telecommunications market. The telecom infrastructure in India is expected to

increase at a compound annual growth rate (CAGR) of 20 per cent during the period 2008–2015 to reach

571,000 towers in 2015.

The telecommunications industry attracted foreign direct investments (FDI) worth US$ 12,889 million in the

period April 2000–September 2013, according to Department of Industrial Policy and Promotion (DIPP).

The country’s GSM operators added 1.66 million rural subscribers in October, taking their overall user base to

274.32 million, according to data released by the Cellular Operators’ Association of India (COAI). The telecom

companies are looking at rural India to add users and revenues.

The Government of India's decision to allow 100 per cent foreign direct investment (FDI) in telecommunication

sector will enable foreign telecommunication companies to buy out their Indian partners. At present, India

permits up to 74 per cent FDI in the sector – 49 per cent through the automatic route and the rest after Foreign

Investment Promotion Board (FIPB) approval.

IT & ITeS Industry in India

The Indian Information Technology (IT) and Information Technology enabled Services (ITeS) sectors go hand-in-

hand in every aspect. The industry has not only transformed India’s image on the global platform, but also fuelled

economic growth by energising higher education sector (especially in engineering and computer science). The

industry has employed almost 10 million Indians and hence, has contributed a lot to social transformation in the

country.

India's IT-business process outsourcing (BPO) industry revenue is expected to cross US$ 225 billion mark by

2020. India is expected to become world's second-largest online community after China with 213 million internet

users by December 2013 and 243 million by June 2014, according to a report by Internet and Mobile Association

of India (IAMAI) and IMRB International. IT spending by the Government of India is projected to reach US$ 6.4

billion in 2013, a growth of 7 per cent year-on-year.

Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale

of any financial instrument or as an official confirmation of any transaction. The information contained herein is

from publicly available data or other sources believed to be reliable but do not represent that it is accurate or

complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall

not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the

information contained in this report. This document is provide for assistance only and is not intended to be and must

not alone be taken as the basis for an investment decision.

Firstcall India Equity Research: Email – info@firstcallindia.com

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Firstcall India also provides

Firstcall India Equity Advisors Pvt.Ltd focuses on, IPO’s, QIP’s, F.P.O’s,Takeover

Offers, Offer for Sale and Buy Back Offerings.

Corporate Finance Offerings include Foreign Currency Loan Syndications,

Placement of Equity / Debt with multilateral organizations, Short Term Funds

Management Debt & Equity, Working Capital Limits, Equity & Debt

Syndications and Structured Deals.

Corporate Advisory Offerings include Mergers & Acquisitions(domestic and

cross-border), divestitures, spin-offs, valuation of business, corporate

restructuring-Capital and Debt, Turnkey Corporate Revival – Planning &

Execution, Project Financing, Venture capital, Private Equity and Financial

Joint Ventures

Firstcall India also provides Financial Advisory services with respect to raising

of capital through FCCBs, GDRs, ADRs and listing of the same on International

Stock Exchanges namely AIMs, Luxembourg, Singapore Stock Exchanges and

other international stock exchanges.

For Further Details Contact:

3rd Floor,Sankalp,The Bureau,Dr.R.C.Marg,Chembur,Mumbai 400 071

Tel. : 022-2527 2510/2527 6077/25276089 Telefax : 022-25276089

E-mail: info@firstcallindiaequity.com

www.firstcallindiaequity.com