BPL - Credit Risk Analysis_24032011

8/2/2019 BPL - Credit Risk Analysis_24032011

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BPL Ltd

Customer Credit Analysis


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Credit Risk Analysis

1. Executive Summary2. Company Overview

3. Financial Performance

4. Debt & Financing Overview

5. Performance Benchmarking

Appendix I: Profit & Loss statement

Appendix II: Balance sheet

Construction & Contracting-

Civil/Emerging Market/Asia/India


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Company Overview

Company

Group

Shareholdingpattern

Promoters

Financialssummary

Expansionplans

Market

presence

- A household name in India with a diversified product range of Consumer Productsand leading manufacturer of Professional Products with an annual turnover of 1,118

mn INR as on 31st March 2010.

-Incorporated in 1963 as British Physical Laboratories India Private Limited by TPGNambiar. It has grown from a hermetically sealed manufacturer to a strong brand in

Consumer Durable market.

- The company has plans to put the HMS Division on a fast track, thus entering into

agreements with a number of global technologies. It also has plans to expand its

operations to SAARC country areas and avail Export incentives.

-BPL has its footprint across the country through a distribution network comprising of

over 7000 channel partners. Manned by customer friendly and informed sales persons.

-

-BPL is an integrated group with cross shareholdings and shareholders. The current

market capitalization is approximately Rs. 107 Crores of which about 66 % equity stake

is held by its promoters


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Financial Performance

Financial Highlights

Source: www.moneycontrol.com

EBITDA Margin (%) -25.2 -39.9 -8.0

EBIT Margin (%) -33.6 -54.1 -20.4

Net Profit Margin (%) -39.1 -17.5 0.4

Current Ratio 1.2 1.2 1.3

Debt Equity Ratio 5.7 7.0 6.5

Debt/ EBITDA Ratio -10.3 -9.9 -41.9

Debt Coverage Ratios

Interest Coverage -2.8 -3.4 -1.0

Debt Service Coverage Ratio -1.8 -2.5 -0.2

Composite Ratios

Asset Turn Ratio 0.4 0.3 0.3Return on Capital Employed (%) -6.2 -7.6 -2.7

Return on Net Worth (%) -57.0 -19.9 0.5

Earnings Per Share (diluted) -9.5 -2.8 0.1

Composite Ratios

CFO - Div / Debt (%) -1.0 1.2 -8.1

FCF / Debt (%) -1.3 0.6 8.6

Divident payout t o cash profit (%) -- -- --

815.4

761.6

1,118.91,122.21,260.8

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

Mar '06 Mar '07 Mar '08 Mar '09 Mar'10

Operating Performance 2008 2009 2010

Liquidity And Solvency 2008 2009 2010

Financial Strength 2008 2009 2010

Return on Investment 2008 2009 2010

Cash Flow Indicator 2008 2009 2010-965.5

-71.8

-281.9 -304.0

-65.6

-1,200.0

-1,000.0

-800.0

-600.0

-400.0

-200.0

-

Mar '06 Mar '07 Mar '08 Mar '09 Mar'10

-10.3%

ROS

CAGR

-48.9%

- -6.4% - - -8.0%

CAGR

-10.3%

INR mn

INR mn

Net Revenue

Operating Profit
http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.moneycontrol.com/


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Performance Benchmarking

-4thnd largest market cap of INR14868 INR Cr.

- P/E multiple at 43.37 close to themarket avg. of 48.15

- ROE at 15.76% being one of the

best in the industry

- Lancos stock has outperformed theSensex over past 12 monthsstock gained 17.39% compared tomarket index gain of 15.06%

Peer Group Comparison

Stock Market Performance

Source: Peer Group Comparison as on 30.04.2010.

Jaiprakash Asso 110 23306 5979 897 26409

GMR Infra 47 18158 169 13 8415

Unitech 62 15623 1852 740 13052

Lanco Infratech 62 14868 5937 486 5894

Jaypee Infra 68 9389 - - 7714

IRB Infra 229 7611 0 56 2024

ILandFS Trans 292 5672 - - 3101

Particulars Last Price Net Profit Total AssetsSalesMarket Cap.
http://www.moneycontrol.com/http://www.moneycontrol.com/


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Source of Information

Source of information:

Financials tables used in slide # 7 & # 8 and Appendix I & II:

Stock code: LITL

Find below links to additional sources of information used in the presentation:

Lanco Infratech: http://www.lancogroup.com/

Lanco Infratech Annual Report: http://www.lancogroup.com/investor/financials.html

http://www.moneycontrol.com/india/stockpricequote/constructioncontractingcivil/lancoinfratech/LI10
http://www.lancogroup.com/http://www.lancogroup.com/investor/financials.htmlhttp://www.moneycontrol.com/india/stockpricequote/constructioncontractingcivil/lancoinfratech/LI10http://www.moneycontrol.com/india/stockpricequote/constructioncontractingcivil/lancoinfratech/LI10http://www.lancogroup.com/investor/financials.htmlhttp://www.lancogroup.com/


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Appendix


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Appendix I : P/L account & Cashflow statement


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Appendix II : Balance Sheet


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Reference Material

Financial Indicators for

Customer Credit Analysis


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Financial Ratio

Standard defini tion & value range - Moody'sVery

satisfactorySatisfactory

Not

satisfactory

Not

Acceptable

< 0%Cash flow from operat ion - Capex

Net DebtFCF / Debt = > 20% 8% - 20% 0% - 8%

< 1.0

CFO-Div / Debt = > 45% 25% - 45% 10% - 25% < 10%

EBIT

Net interest

Cash f low from operat ion - Dividend

Net Debt

Interest coverage = > 10.0 4.0 - 10.0 1.0 - 4.0

> 2.0

Debt/ EBITDA = < 1.25 1.25 - 3.0 3.0 - 5.5 > 5.5

Gross debt - cash & cash equivalent

Equit y capital + Reserves & surplus

Gross debt - cash & cash equivalent

EBITDA

Debt/ Equity = < 0.4 0.4 - 1.0 1.0 - 2.0

2%-8% < 2%

Return on Capital Employed = > 15% 5%-15% 1%-5% < 1%

Profit before Interest and tax

Net sales

Profit before interest and tax

EBIT Margin = > 20% 8%-20%

Avg Capital Employed


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Financial Ratiocont.

Current asset

Current liabil it ies

Dividned

PAT + Depreciation

Profit after tax

Net sales

Return on net worth =

Earning per share =

Divident payout ratio (cash) =

Interest + Installment

Net sales

Total operation asset

Profit aft er tax

Euqity + Reserves & surplus

Profit after tax

No of shares (issued)

Net profit margin =

Current ratio =

Debt service coverage ratio =PAT + Interest + Depreciat ion

Asset turn =


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Z- score (Higher is better)[Listed Manufacturer Model]

Ratios Weights/Coefficients(A) EBIT/TA X 3.3

(B) Net Sales/TA X 0.999

(C) Market Value of Equity/TL X 0.6

(D) Retained Earnings/TA X 1.4

(E) WC/TA X 1.2

Z- score = 3.3A + 0.999B + 0.6C + 1.4D + 1.2E

Interpretation:

Z > 3 Company is safe based on the financial figures only

2.7 < Z < 2.99 On alert; exercise caution

1.8 < Z < 2.7 Good chances of the company going bankrupt within two years of operation from the

date of financial figures given

Z < 1.8 In distress; Probability of financial embarrassment is really high


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Z- scorecont.[Private Firm Model]

Ratios Weights/Coefficients(A) EBIT/TA X 3.107

(B) Net Sales/TA X 0.998

(C) Book Value of Equity/TL X 0.420

(D) Retained Earnings/TA X 0.847

(E) WC/TA X 0.717

Z- score = 3.107A + 0.998B + 0.420C + 0.847D + 0.717E

Interpretation:

Z > 2.9 Company is safe based on the financial figures only1.23 < Z < 2.90 On alert; exercise caution; Good chances of the company going bankrupt

within two years of operation from the date of financial figures given

Z < 1.23 In distress; Probability of financial embarrassment is really high


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Thank you for your attention

BPL - Credit Risk Analysis_24032011

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