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Presented by;

Aditya Rastogi 09EMP1-01Anurag Bhola 09EMP1-08

Puneet Bhasin 09EMP1-40

Sandeep Das 09EMP1-51

Shivanand Gupta 09EMP1-541

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The Organisation

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Company Overview

Market leader in automotive halogen bulbs in India with over 50% market share in

passenger vehicles and over 80% in motor cycles

Globally competitive and the largest manufacturing facility in India with over 20

years of manufacturing excellence and institutionalized product and process

knowledge

The manufacturing facilities are approved by both domestic and internationalOEMs such as Maruti, Tata Motors, Hyundai, Hero Honda, Bajaj Auto & TVS

Motors.

Manufacturing facilities in both domestic tariff area and special economic zone

meeting diverse customer requirements

Existing capacity of over 60mn units p.a. in auto halogen bulbs, to be increased by

~25mn unit s over next 3 years Strong International presence with exports to more than 75 countries. Overseas

operations in Europe with over 15% market share in the after market

Sustainable competitive advantage - superior process engineering, quality

products, skilled man power and lead time in terms of approval for the products

by the OEMs

Comprehensive product portfolio of halogen bulbs for the automotive industry 3

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.. contd

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PEER COMPARISION

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Peer Companies Price(Rs) EPS(Rs.) P/E 1Year Return(%)

Lumax Industries 286.75 11.16 25.7 51.64

Bosch 6389.05 256.87 24.87 38.85

Federal-Mogul Goetze 181.7 5.65 32.19 34.49

Jagan Lamps 8.56 0.52 16.33 130.11

LumAutSys 41.7 -5.17 0 1.71

GS Auto Intl. 29.1 4.87 5.98 0.69

Hella India 140.5 -2.89 0 17.72

Shivam Autotech 130.9 14.99 8.73 40.53

Omax Autos 52.3 6.48 8.07 -6.52

Halonix 115.7 -7.14 0 24.88

LumAutTec 184.9 9.03 20.49 141.86

India Nipon Electric 273.15 28.55 9.57 45.6

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Exports

The manufacturing facilities are approved by International OEMs

The Company has presence in Europe through offices and warehouses which helps

in meeting customers requirement on short notices

Over 20% of Exports are under own brands and balance being sold under Private

labeling

Key products being exported - H4, H7, H8 and H9 The Company exports to 75 countries globally

European markets constitute significant share of the total export revenues for the

Company

Major automotive aftermarket players in Europe are the customers of the

Company

Products of the Company enjoy over 15% share of European after market segment

Germany, France and Luxembourg are the key markets for the Company

Ramping up its export capacity to cater to large demand of its products in the

international markets

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Domestic automotive lighting

market outlook Estimated volume CAGR growth of OEM market for passenger vehicle s ~12% and Motorcycles segment ~13% in India over the next three years (Source: Enam research)

Demand for HS1 is expected to move in line with ~ 1 mn pieces per month by end of FY11

due to expected sales of two wheeler crossing ~10 mn p.a. by FY11 (Source: SIAM)

Increased demand for combination lamps H1 and H7 (replacement fo r H4) and H3 (fog

lamp), which were earlier used mainly in premier cars, now being adopted by most of the car

models

The after market in passenger vehicles is expected to be dominated by high wattage bulbs

namely H4 -100/90 watts in both 12 and 24 voltages

Currently, the HS1 after market is ~1.0 mn pieces per annum and is likely to double in the

next year. After market demand for HS1 likely to pick up as life of the lamps introduced in

Indian markets 6 years ago is expected to end soon

H7 is a lamp with a short life of 2 -3 years. As H7 was introduced recently after market

demand is expected to emerge after two years 14

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The Analysis

Particulars 31-Mar-2010 31-Mar-2009 31-Mar-2008 31-Mar-2007 31-Mar-2006

Debt Coverage Ratio 2.03 2.21 2.48 3.56 2.40

INR - Crores

Cash flow from Operations 28.34 28.72 (8.27) 20.04 19.77

Interest Paid 18.49 16.59 7.15 7.23 6.88

Interest Coverage Ratio 1.53 1.73 (1.16) 2.77 2.87

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INR Crores 31-Mar-2010 31-Mar-2009 31-Mar-2008 31-Mar-2007 31-Mar-2006

Profit 28.55 36.06 67.22 46.19 43.84

Sales 442.44 384.12 356.65 277.83 232.72

Assets 271.96 287.42 265.19 186.99 167.64

Net Worth 139.53 159.35 160.31 136.02 111.86

MarginNet profit/Sales 6% 9% 19% 17% 19% very low margins

Turn overSales/Assets 1.63 1.34 1.34 1.49 1.39very low asset

turnover

LeverageAssets/Equity 1.95 1.80 1.65 1.37 1.50

ROENet Profit/Equity 20% 23% 42% 34% 39%

Dupont Analysis

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INR-Crores

Operating Assets 11,805.23

Working Capital 15,390.83

27,196.06

less: Debt 13,243.49

Owners Equity 13,952.57

Outstandingshares

equity shares of Rs.10/- each 28,019,300

preference shares of Rs.100/- each 1,316,000

Book Value per share 33.80

Book Value Calculation

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Average cash flow from operations 17.72figures in INR crores

Interest @ 10%

Debt Capacity 59

Owners equity 135.89

Debt 132.43

Debt Equity ratio 0.97

Debt Capacity

Debt capacity 59

Value of firm based on Graham's 103.25

Value per share 37

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Area ofConcern

High cost ofCFL, LED & Chinese imitations;

12-14 players in the organized Indian market

Overcapacities have resulted in price wars and profitability has

eroded Frequent changes in government regulations especially BIS

norms

Excessive volatility in the Company's key raw materials can

have severe impact on its profitability As the Company derives a portion of its revenues from exports

and pays for purchases with foreign exchange, excessive

volatility in currency rates can significantly impact profitability

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The operating results of the Company have been sharply lower on account of

Warranty Returns

Losses on account of Rupee depreciation and high commodity prices

during the year.

Higher expenditure on Fixed Costs, coming from the development of a

retail marketing network and Brand launch expenses, including

advertising.

The major reason that held back growth in last quarter of FY10 was

capacity constraint. This critical issue has been addressed with the

planned addition of two H4 lines in the 2nd Quarter of 2010-2011.

high warranty returns in this segment which have eroded the profitability

of the company.

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News

Philips leads race to buy Halonix stake from Actis 29 NOV, 2010

Actis owns 66% of Halonix and if the sale goes through, Philips will have to

make an open offer to buy 20% additional shares from other shareholders.

The value of the company is being pegged at `400-450 crore, which is

more than its present market capitalisation of only Rs 313 crore. T The person involved in the transaction said Actis was demanding an

aggressive valuation as the buyer was getting the profitable auto lighting

business without the loss-making general lighting division.

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Thanks!!

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