Mayur Uniquoters Ltd Absolute : LONG Relative : Overweight...

July 4, 2017 Analyst: Depesh Kashyap [email protected](+91-7228934327) of 10

Before reading this report, you must refer to the disclaimer on the last page.

Mayur Uniquoters Ltd Absolute : LONG

Relative : Overweight

2017 Annual Report Analysis Regular Coverage 23% ATR in 12 Months

Structural drivers intact, near term may surprise positively Textile & Textile Pro. Mfg

© 2017 Equirus All rights reserved

Rating Information

Price (Rs) 362

Target Price (Rs) 440

Target Date 30th June'18

Target Set On 5th June'17

Implied yrs of growth (DCF) 15

Fair Value (DCF) 439

Fair Value (DDM) 110

Ind Benchmark SPBSMIP

Model Portfolio Position NA

Stock Information

Market Cap (Rs Mn) 16,565

Free Float (%) 38.81 %

52 Wk H/L (Rs) 465/324

Avg Daily Volume (1yr) 25,551

Avg Daily Value (Rs Mn) 10

Equity Cap (Rs Mn) 229

Face Value (Rs) 5

Bloomberg Code MUNI IN

Ownership Recent 3M 12M

Promoters 61.2 % 0.0 % 0.1 %

DII 6.3 % 0.1 % 0.1 %

FII 8.7 % -0.1 % 0.5 %

Public 23.8 % 0.0 % -0.6 %

Price % 1M 3M 12M

Absolute -0.8 % -6.0 % -14.9 %

Vs Industry -0.5 % -10.0 % -38.7 %

Jasch -1.3 % -18.1 % 59.5 %

Fenoplast -0.3 % 60.5 % 101.9 %

Standalone Quarterly EPS forecast

Rs/Share 1Q 2Q 3Q 4Q

EPS (17A) 5.1 4.3 4.1 4.1

EPS (18E) 5.1 5.0 4.6 4.9

Mayur Uniquoters published its 24th Annual report for FY17 yesterday. The management

remains positive about the long-term story of synthetic leather industry. Rising

disposable income, changing lifestyle and ban on slaughter of animals are some of the

factors working in favour of synthetic leather. Though GST rates have no major impact

on the business, management remains optimistic about the shift to organised players

that may happen with GST implementation. In FY18, management has guided for

revenue growth of 10-15% and is in the process of setting up a new 0.1mn meters per

month PVC line in Mysore to cater to footwear demand in South India. We have not

changed our estimates and maintain our Jun’18 TP of Rs. 440 (TTM multiple of 22x).

We have a Long rating on the stock. Structural drivers for synthetic leather industry remain intact: Global synthetic

leather market was USD 22.1bn in 2015 and is projected to grow at a CAGR of 7.2% to

reach USD 33.5bn by 2021. Ban on slaughtering of animals is leading to decline of

natural leather and working in favor of synthetic leather industry. Government of India

has identified leather as the focus sector as it is among the top 10 foreign exchange

earners of the country and has also identified new markets for exports. Automotive segment continues to remain steady: Global automotive interior leather

market was valued at ~USD 25bn in 2015 and may exceed USD 40bn by 2024 growing at

a CAGR of 5.5%. In FY17, auto OEM exports for Mayur, saw growth of 10-12% led by

increased demand from Ford Motor Company and Fiat Chrysler USA. Company is trying

to increase in market share in USA in the coming years and is also in talks with few

OEM players in Europe. Company is eyeing 10-15% growth in the automotive segment in

FY18.

Footwear segment may have bottomed out: Footwear industry was hit the most due

to demonetisation of currency but the demand has improved since the beginning of

FY18. Various international brands which are using PU leather in footwear are coming

to India, which will lead to increased demand of PU. Company is in the process to

setup a PU leather plant in Gwalior (MP) of capacity 0.7mn linear meters per month.

Company is also setting up a 0.1mn linear metres per month capacity of PVC leather in

Mysore (Karnataka) to cater to the demand from footwear players in South India.

Funding of both these projects will be majorly done from internal accruals. State

governments have already allotted the land and the Company has made initial

payments. Company still seems to be awaiting clearance certificate from the state

pollution control board and expects to start construction of PU plant in second half of

July.

Consolidated Financials

Rs. Mn YE Mar FY17A FY18E FY19E FY20E

Sales 4,817 5,418 6,068 7,364

EBITDA 1,290 1,417 1,576 1,975

Depreciation 167 172 181 195

Interest Expense 24 7 7 7

Other Income 74 74 88 122

Reported PAT 789 893 1,004 1,289

Recurring PAT 789 893 1,004 1,289

Total Equity 3,849 4,528 5,291 6,270

Gross Debt 362 362 362 362

Cash 1,406 1,341 1,691 2,347

Rs Per Share FY17A FY18E FY19E FY20E

Earnings 17.1 19.5 21.9 28.1

Book Value 83 99 116 137

Dividends 1.0 4.0 4.5 5.8

FCFF 14.1 1.9 11.2 18.7

P/E (x) 21.2 18.6 16.5 12.9

P/B (x) 4.3 3.7 3.1 2.6

EV/EBITDA (x) 12.1 11.0 9.7 7.4

ROE (%) 22 % 21 % 20 % 22 %

Core ROIC (%) 29 % 28 % 26 % 30 %

EBITDA Margin (%) 27 % 26 % 26 % 27 %

Net Margin (%) 16 % 16 % 17 % 17 %

Mayur Uniquoters Ltd. Absolute – LONG Relative – Overweight 23% ATR in 12 Months


Exhibit 1: Segmental revenue breakup (FY17)

Source: Company, Equirus research

Exhibit 2: Share of exports has been increasing, commissioning of PU plant to boost domestic sales in FY20E


Exhibit 3: Volumes declined in FY17 along with utilization levels

Source: Company, Equirus research Exhibit 4: Realizations have also been under pressure due to weak RM prices


21.9%

7.8%

24.8%

37.1%

8.4% Auto OEM exports

General exports

Auto domestic ( OEM + replacement)

Footwear

others

16% 22% 24% 26% 26% 30% 30% 29% 27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E

Exports Domestic

72%

85% 81%

89%

77%

66% 65%

71% 74% 75%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0.5

5.5

10.5

15.5

20.5

25.5

30.5

35.5

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18E

FY19E

FY20E

Sales( linear metres per annum) Capacity utilization (%)(RHS)

173

198 206

213 212 206

200 205

211 219

-5%

0%

5%

10%

15%

20%

25%

30%

100

120

140

160

180

200

220

240

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E

Avg realisation( Rs per linear meter) Realisation growth(%)(RHS)



Exhibit 5: Break-up of key raw materials used in production


Exhibit 6: Company’s balance sheet remains strong

Source: Bloomberg, Equirus research

Exhibit 7: Drop in average realisation has been lesser than fall in RM costs partly due to higher exports and partly due to lower pass through of benefits

Source: Company, Equirus research Exhibit 8: Company continues to generate strong cash flows


5.0%

27.8%

64.6%

2.7%

Release paper

Fabric

Chemicals

Consumable & packing material

0.00x

0.05x

0.10x

0.15x

0.20x

0.25x

0.30x

0.35x

0.40x

0.45x

0.50x

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18e FY'19e FY'20e

Net debt (Rs mn) Gross debt/Equity

-20%

-10%

0%

10%

20%

30%

40%

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Increase in RM costs per mn meter (y-o-y %)

Increase in realisations per mn meter (y-o-y %)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

-200

0

200

400

600

800

1,000

FY'12 FY'13 FY'14 FY'15 FY'16 FY'17e FY'18e FY'19e FY'20e

FCFF(CFO-capex) CFO/Capex (%) (RHS)



Highlights from Chairman’s message:

FY17 has been marked by several economic policy developments, major ones

being, demonetization of currency and constitution amendment to pave the way

for GST implementation.

Demonetization caused some reduction in economic growth in 3QFY17 and

4QFY17 but its impact is behind us now and the growth has already started

upward movement.

GST will create a common Indian market and will improve tax compliance and

boost investment and growth. Mayur Uniquoters being the largest organized

player in the synthetic leather industry will get benefit from GST

implementation.

Commentary on the Auto segment :

o Indian Auto industry accounts for 45% of India’s manufacturing GDP and

employs 19mn people directly and indirectly.

o Government’s Automotive Mission Plan (AMP) 2016-26 envisions the

industry to grow around 4 times by FY26. From its current output of Rs.

4.64tn, the industry is expected to grow 3.5-4 times in value to Rs.

16.16-18.85tn by 2026.

o The growth of automotive sector will lead to huge potential for auto

component sector as well. The Auto component sector shall see double

digit growth over the next decade owing to demand from domestic and

exports markets.

o Auto OEM exports : In FY17, auto OEM exports for Mayur, saw growth

of 10-12% led by increased demand from Ford Motor Company and Fiat

Chrysler USA.

o Auto OEM domestic: Mayur continues to support high end segments of

all major players viz. Maruti, Mahindra, TATA, ISUZU, Honda, LML

Vespa, Suzuki, Sonalika Tractor, General Motos, Lear, Ts Tech Sun,

Krishna Maruti, Bharat seat, S.I. interpact group, Sharda Motor, Swaraj

Auto, Polar Auto, Toyota, Renault, Volkswagon, Hero, Bajaj, Piaggio

etc.

o Auto replacement segment: The segment is expected to grow 12-15%

in FY18

Commentary on the footwear segment:

o Demonetization hit the footwear industry the most. All the synthetic

leather companies organized and unorganized were affected.

o There has been some shift from unorganized to organized sector due to

demonetization which was advantageous for Mayur.

o Various international brands which are using PU leather in

garments/footwear, ladies purses & bags are coming to India and they

will lead the demand of PU leather in India.

o Company is in process to setup a PU leather plant at Gwalior (MP) of

capacity 0.7mn linear meters per month (Previously company had

guided 0.6mn linear meters per month).

o As major demand for Footwear segment comes from South India,

Company is in process to setup a PVC leather plant of capacity 0.1mn

meters per month at Mysore (Karnataka). Previously, Company had

guided for moving its existing line from Jaipur to Mysore but now

Company is talking about setting up a new line which may suggest

improved demand scenario.

o Company will fund both of these projects from internal accruals and

partially from banks. The state governments of both these states have

allotted land and the Company has made initial payments for this.

Cost control: Company is focusing on reducing the cost and improving the

efficiency and is in the process of appointing a consultancy firm for the same.

Key takeaways from Management’s Discussion & Analysis:

Global industry structure:

Global synthetic leather market was USD 22.13bn in 2015 and is projected to

grow at a CAGR of 7.2% and reach USD 33.54bn by 2021.

Main demand drivers for synthetic leather are :

o Increasing population and rising disposable income of consumers is

likely to boost the demand for synthetic leather

o Changes in lifestyle are paving the way for a greater uptake of apparels

and footwear.

o Ban on slaughtering of animals is leading to decline of natural leather

industry and working in favor of synthetic leather industry

The Asia-Pacific region is projected to be the largest and fastest growing

synthetic leather market due to the growing footwear and automotive industry

in the region. The South American synthetic leather market is also expected to

grow at a high rate due to growing automotive, footwear and furnishing

industries.

North America remains a significant market for synthetic leather.

According to market forecasts and trends, PolyUrethane (PU) synthetic leather

will see the highest growth in next 10 years.



Advantage of PU based leather:

o PU based synthetic leather uses less plasticizer and polymer that is

inherently softer than other synthetic leathers, giving it a greater

market appeal.

o PU based products are less likely to fade and crack when exposed to

sun light and colder atmospheric conditions.

o PU leather has higher strength and quality as compared to other leather

products due to which its demand is increasing despite the higher price

tag.

Indian industry structure:

India is 2nd largest producer of footwear after China with annual production of

more than 700mn per annum. India’s exports of leather footwear have been

growing at the annual rate of 3.5%.

Government of India has identified leather as the focus sector as it is among the

top 10 foreign exchange earners of the country.

Make in India is a major national programme designed to facilitate investment,

foster innovation, enhance skill development and build best-in class

manufacturing infrastructure in India.

Indian leather industry has been set a target of achieving turnover of USD 27bn

by 2020 from the present turnover of USD 12.6bn.

Council for Leather Exports (CLE) has identified African countries, Russia, Korea,

and East Europe as major potential markets for Indian leather industry.

Automotive segment outlook:

The deregulation of FDI in Automotive sector has helped foreign companies to

make larger investments in India allowing 100% FDI through automotive route.

Global automotive interior leather market was valued at ~USD 25bn in 2015 and

may exceed USD 40bn by 2024 growing at a CAGR of 5.5%.

Rise in automotive production for both domestic and public transport along with

increasing consumer spending shall have a positive influence on synthetic

leather market size.

Footwear industry outlook:

Footwear industry accounts for major chunk of synthetic leather industry market

size.

Global footwear market may surpass USD 375bn in business by 2024 growing at

CAGR of 5%.

Rise in demand for stylish, better fit and comfortable shoes should drive

synthetic leather demand.

Furnishing segment outlook:

Company is in process to setup distribution chain in India.

Company has opened first store in Delhi and intends to open in Surat and

Mumbai too.

Mayur Uniquoters has diversified clientele base which results in higher export

sales.

Exhibit 9: Standalone P&L: Revenues have been under pressure for last 2

years

Rs. Mn FY11 FY12 FY13 FY14 FY15 FY16 FY17

Net Sales 2,486 3,175 3,805 4,696 5,063 5,110 4,848

y/y

27.7% 19.9% 23.4% 7.8% 0.9% -5.1%

Cost Items

Raw Material Consumed 1,829 2,342 2,749 3,165 3,260 2,917 2,714

as a % of sales 73.6% 73.8% 72.2% 67.4% 64.4% 57.1% 56.0%

Employee Cost 75 105 123 184 247 284 266

as a % of sales 3.0% 3.3% 3.2% 3.9% 4.9% 5.6% 5.5%

Other Expenses 194 194 243 415 537 555 566

as a % of sales 7.8% 6.1% 6.4% 8.8% 10.6% 10.9% 11.7%

Power & Fuel Charges

168 160

as a % of sales

3.3% 3.3%

Job Labor Charges

96 90

as a % of sales

1.9% 1.9%

Repair & Maintenance

32 19

as a % of sales

0.6% 0.4%

Legal and Professional Expenses

9 20

as a % of sales

0.2% 0.4%

Office Maintenance Expenses

12 12

as a % of sales

0.2% 0.2%

Travelling and Conveyance

25 26

as a % of sales

0.5% 0.5%

Selling Expenses

168 181



as a % of sales

3.3% 3.7%

EBITDA 387 533 690 932 1,019 1,354 1,302

EBITDA Margin (%) 15.6% 16.8% 18.1% 19.9% 20.1% 26.5% 26.9%

Depreciation 27 39 52 70 118 161 167

EBIT 361 494 639 862 900 1,193 1,135

EBIT Margin (%) 14.5% 15.6% 16.8% 18.4% 17.8% 23.3% 23.4%

Source: Company, Equirus Research

Exhibit 10: (Standalone) Balance Sheet remains strong


Equity Capital 54 54 108 108 217 231 229

Reserves and Surplus 556 805 1,076 1,503 2,610 3,190 3,708

Networth 610 859 1,185 1,611 2,827 3,421 3,936

Long Term and Short Term Debt 52 29 210 359 373 202 67

Other Long Term Liabilities 21 31 36 61 50 53 45

Minority Interest 0 0 0 0 0 0 0

Account Payables 283 467 474 631 519 375 460

Other Current Liabilities 123 198 230 342 342 356 272

Total Liabilities & Equity 1,089 1,585 2,135 3,004 4,111 4,408 4,780

Net Fixed Assets 313 451 547 977 1,390 1,346 1,283

Capital WIP 34 40 189 266 36 79 39

Others 15 17 48 20 15 14 72

Inventory 146 307 442 638 561 504 583

Account Receivables 316 406 565 671 907 1,238 1,304

Other Current Assets 38 52 102 201 178 115 111

Cash and Cash Equivalents 228 313 242 232 1,023 1,111 1,389

Total Assets 1,089 1,585 2,135 3,004 4,111 4,408 4,780

Non-cash Working Capital 94 99 404 536 785 1,126 1,266

WC Turnover

32.8 15.1 10.0 7.7 5.3 4.1

FA Turnover

7.6 6.2 4.7 3.8 3.6 3.5

Net D/E -0.3 -0.3 0.0 0.1 -0.2 -0.3 -0.3


Exhibit 11: (Standalone) Cash flow generation has been solid


Operating profit before WC changes 402 525 679 910 1,013 1,344 1,311

Change in WC -202 -91 -213 -172 -230 -363 -83

Tax Paid 141 142 194 249 251 328 453

Operating Cash flow 59 292 272 489 533 653 775

Capex -153 -185 -328 -549 -297 -181 -106

Others 0 0 0 0 0 -154 -159

Investing Cash Flow -153 -185 -328 -549 -297 -335 -265

Financing Cash Flow -37 -119 73 -15 585 -438 -447

Net Change in Cash and Cash Equivalents -131 -12 17 -76 821 -119 63


Exhibit 12: Cash conversion cycle has been increasing due to rising share of

exports


Accounts Receivable 316 406 565 671 907 1,238 1,304

Days of Sales 46 41 47 48 57 77 96

Inventory 146 307 442 638 561 504 583

Days of RM 29 35 50 62 67 67 73

Loans and Advances 33 34 68 125 86 55 54

Days of Sales 5 4 5 8 8 5 4

Other Current Assets 5 18 34 75 92 60 58

Trade Payables 283 467 474 631 519 375 460

Days of RM 57 59 62 64 64 56 56

Other Current Liabilities 123 198 230 342 342 356 272

Working Capital Cycle (days) 19 22 50 53 70 105 115

Non-cash Working Capital 94 99 404 536 785 1,126 1,266

Days of Sales

11 24 37 48 68 90




Standalone Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q17A 2Q17A 3Q17A 4Q17A 1Q18E 2Q18E 3Q18E 4Q18E 1Q19E 2Q19E 3Q19E 4Q19E FY17A FY18E FY19E FY20E

Revenue ( net of excise duty) 1,304 1,214 1,125 1,205 1,406 1,376 1,269 1,367 1,574 1,540 1,420 1,533 4,848 5,418 6,068 7,364

Raw Materials 708 707 609 691 807 790 729 782 919 899 829 897 2,714 3,107 3,545 4,321

Employee Cost 74 68 63 60 73 72 66 76 79 77 71 77 266 287 309 368

Other Expenditure 134 120 143 169 157 154 142 153 165 162 149 161 566 607 637 700

EBITDA 387 320 310 285 368 361 333 355 411 402 371 399 1,302 1,417 1,576 1,975

Depreciation 42 42 42 41 43 43 43 43 45 45 45 45 167 172 181 195

EBIT 345 278 268 244 325 318 290 313 366 357 325 354 1,135 1,245 1,395 1,779

Interest 6 4 8 6 2 2 2 2 2 2 2 2 24 7 7 7

Other Income 12 15 17 30 19 19 19 19 22 22 22 22 74 74 88 122

PBT 351 289 277 268 342 335 306 329 386 377 346 374 1,185 1,313 1,476 1,895

Tax 116 91 91 81 110 107 98 105 124 121 111 120 378 420 472 606

Recurring PAT 235 198 186 187 233 227 208 224 262 256 235 254 807 893 1,004 1,289

Extraordinary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Reported PAT 235 198 186 187 233 227 208 224 262 256 235 254 807 893 1,004 1,289

EPS (Rs) 5.09 4.29 4.07 4.08 5.08 4.97 4.55 4.89 5.73 5.60 5.14 5.55 17.51 19.50 21.93 28.15

Key Drivers

Sales Volume (mn linear metre) - - - - - - - - - - - - 23.9 25.9 28.1 32.9

Domestic Volume (mn linear metre) - - - - - - - - - - - - 19.9 21.5 23.4 27.8

Export Volume (mn linear metre) - - - - - - - - - - - - 4.0 4.3 4.7 5.1

Domestic Realisation (Rs./ln metre) - - - - - - - - - - - - 167.5 172.5 178.8 188.6

Export Realisation (Rs./ln metre) - - - - - - - - - - - - 360.1 367.3 374.7 382.2

- - - - - - - - - - - - - - - - -

Sequential Growth (%)

Revenue 2 % -7 % -7 % 7 % 17 % -2 % -8 % 8 % 15 % -2 % -8 % 8 % - - - -

Raw Materials 3 % 0 % -14 % 14 % 17 % -2 % -8 % 7 % 18 % -2 % -8 % 8 % - - - -

EBITDA 1 % -17 % -3 % -8 % 29 % -2 % -8 % 7 % 16 % -2 % -8 % 8 % - - - -

EBIT 2 % -19 % -4 % -9 % 34 % -2 % -9 % 8 % 17 % -2 % -9 % 9 % - - - -

Recurring PAT 0 % -16 % -6 % 0 % 25 % -2 % -8 % 7 % 17 % -2 % -8 % 8 % - - - -

EPS 0 % -16 % -5 % 0 % 25 % -2 % -8 % 7 % 17 % -2 % -8 % 8 % - - - -

Yearly Growth (%)

Revenue 1 % -11 % -6 % -6 % 8 % 13 % 13 % 13 % 12 % 12 % 12 % 12 % -5 % 12 % 12 % 21 %

EBITDA 22 % -2 % -6 % -25 % -5 % 13 % 7 % 25 % 12 % 11 % 11 % 12 % -4 % 9 % 11 % 25 %

EBIT 24 % -3 % -7 % -28 % -6 % 14 % 8 % 28 % 12 % 12 % 12 % 13 % -5 % 10 % 12 % 28 %

Recurring PAT 21 % 0 % -6 % -20 % -1 % 15 % 12 % 20 % 13 % 13 % 13 % 13 % -2 % 11 % 12 % 28 %

EPS 21 % 0 % -5 % -19 % 0 % 16 % 12 % 20 % 13 % 13 % 13 % 13 % -2 % 11 % 12 % 28 %

Margin (%)

EBITDA 30 % 26 % 28 % 24 % 26 % 26 % 26 % 26 % 26 % 26 % 26 % 26 % 27 % 26 % 26 % 27 %

EBIT 27 % 23 % 24 % 20 % 23 % 23 % 23 % 23 % 23 % 23 % 23 % 23 % 23 % 23 % 23 % 24 %

PBT 27 % 24 % 25 % 22 % 24 % 24 % 24 % 24 % 25 % 24 % 24 % 24 % 24 % 24 % 24 % 26 %

PAT 18 % 16 % 17 % 16 % 17 % 17 % 16 % 16 % 17 % 17 % 17 % 17 % 17 % 16 % 17 % 17 %



Consolidated Financials

P&L (Rs Mn) FY17A FY18E FY19E FY20E

Balance Sheet (Rs Mn) FY17A FY18E FY19E FY20E

Cash Flow (Rs Mn) FY17A FY18E FY19E FY20E

Revenue 4,817 5,418 6,068 7,364 Equity Capital 229 229 229 229 PBT 1,173 1,313 1,476 1,895

Op. Expenditure 3,527 4,001 4,491 5,389 Reserve 3,620 4,299 5,062 6,041 Depreciation 167 172 181 195

EBITDA 1,290 1,417 1,576 1,975 Networth 3,849 4,528 5,291 6,270 Others -45 -67 -81 -116

Depreciation 167 172 181 195 Long Term Debt 67 67 67 67 Taxes Paid 461 420 472 606

EBIT 1,123 1,245 1,395 1,779 Def Tax Liability 45 45 45 45 Change in WC -92 -110 -133 -321

Interest Expense 24 7 7 7 Minority Interest 0 0 0 0 Operating C/F 743 887 971 1,048

Other Income 74 74 88 122 Account Payables 460 511 534 592 Capex -108 -805 -461 -198

PBT 1,173 1,313 1,476 1,895 Other Curr Liabi 295 295 295 295 Change in Invest -202 0 0 0

Tax 385 420 472 606 Total Liabilities & Equity 4,716 5,445 6,232 7,269 Others 43 74 88 122

PAT bef. MI & Assoc. 789 893 1,004 1,289 Net Fixed Assets 1,284 1,918 2,198 2,201 Investing C/F -267 -731 -373 -76

Minority Interest 0 0 0 0 Capital WIP 39 39 39 39 Change in Debt -134 0 0 0

Profit from Assoc. 0 0 0 0 Others 71 71 71 71 Change in Equity -250 0 0 0

Recurring PAT 789 893 1,004 1,289

Inventory 835 851 874 1,006 Others -63 -221 -248 -316

Extraordinaires 0 0 0 0 Account Receivables 969 1,113 1,247 1,493 Financing C/F -447 -221 -248 -316

Reported PAT 789 893 1,004 1,289 Other Current Assets 112 112 112 112 Net change in cash 29 -65 350 656

FDEPS (Rs) 17.1 19.5 21.9 28.1 Cash 1,406 1,341 1,691 2,347 RoE (%) 22 % 21 % 20 % 22 %

DPS (Rs) 1.0 4.0 4.5 5.8 Total Assets 4,716 5,445 6,232 7,269

RoIC (%) 20 % 20 % 19 % 21 %

CEPS (Rs) 20.7 23.2 25.9 32.4 Non-cash Working Capital 1,161 1,271 1,404 1,724

Core RoIC (%) 29 % 28 % 26 % 30 %

FCFPS (Rs) 14.1 1.9 11.2 18.7 Cash Conv Cycle 88.0 85.6 84.4 85.5 Div Payout (%) 2 % 24 % 24 % 24 %

BVPS (Rs) 83.4 98.9 115.6 137.0 WC Turnover 4.1 4.3 4.3 4.3 P/E 21.2 18.6 16.5 12.9

EBITDAM (%) 27 % 26 % 26 % 27 % FA Turnover 3.6 2.8 2.7 3.3 P/B 4.3 3.7 3.1 2.6

PATM (%) 16 % 16 % 17 % 17 % Net D/E -0.3 -0.3 -0.3 -0.4 P/FCFF 25.7 192.1 32.2 19.4

Tax Rate (%) 33 % 32 % 32 % 32 % Revenue/Capital Employed 1.3 1.3 1.3 1.3 EV/EBITDA 12.1 11.0 9.7 7.4

Sales Growth (%) -3 % 12 % 12 % 21 %

Capital Employed/Equity 1.1 1.1 1.1 1.1

EV/Sales 3.2 2.9 2.5 2.0

FDEPS Growth (%) 2 % 14 % 12 % 28 %

Dividend Yield (%) 0.3 % 1.1 % 1.2 % 1.6 %

TTM P/E vs. 2 yr forward EPS growth TTM EV/EBITDA vs. 2 yr forward EBITDA growth TTM P/B vs. 2 yr forward RoE

10x

15x

23x

30x

35x

0%

10%

20%

30%

40%

0

200

400

600

800

Mar/13

Jun/13

Sep/13

Dec/13

Mar/14

Jun/14

Sep/14

Dec/14

Mar/15

Jun/15

Sep/15

Dec/15

Mar/16

Jun/16

Sep/16

Dec/16

Mar/17

Jun/17

Sep/17

Dec/17

Mar/18

Jun/18

EPS Growth

0%

5%

10%

15%

20%

25%

30%

35%

0

5000

10000

15000

20000

25000

30000

35000

Mar/13

Jun/13

Sep/13

Dec/13

Mar/14

Jun/14

Sep/14

Dec/14

Mar/15

Jun/15

Sep/15

Dec/15

Mar/16

Jun/16

Sep/16

Dec/16

Mar/17

Jun/17

Sep/17

Dec/17

Mar/18

Jun/18

5x

10x

13x

15x

20x

EBITDA Growth

0%5%10%15%20%25%30%35%40%

0100200300400500600700800

Mar/13

Jun/13

Sep/13

Dec/13

Mar/14

Jun/14

Sep/14

Dec/14

Mar/15

Jun/15

Sep/15

Dec/15

Mar/16

Jun/16

Sep/16

Dec/16

Mar/17

Jun/17

Sep/17

Dec/17

Mar/18

Jun/18

RoE

2x

4x

5x

7x

8x



Historical Consolidated Financials P&L (Rs Mn) FY14A FY15A FY16A FY17A

Balance Sheet (Rs Mn) FY14A FY15A FY16A FY17A

Cash Flow (Rs Mn) FY14A FY15A FY16A FY17A

Revenue 4,696 5,063 5,466 5,285 Equity Capital 108 217 231 229 PBT 837 934 1,169 1,173

Op. Expenditure 3,764 4,044 4,160 3,994 Reserve 1,503 2,610 3,125 3,620 Depreciation 70 118 161 167

EBITDA 932 1,019 1,306 1,290 Networth 1,611 2,827 3,356 3,849 Others 3 -39 -45 -45

Depreciation 70 118 161 167 Long Term Debt 359 373 202 67 Taxes Paid 249 251 328 461

EBIT 862 900 1,145 1,123 Def Tax Liability 61 50 53 45 Change in WC -172 -230 -252 -92

Interest Expense 43 26 34 24 Minority Interest 0 0 0 0 Operating C/F 489 533 704 743

Other Income 17 59 58 74 Account Payables 631 519 375 460 Capex -509 -342 -181 -108

PBT 837 934 1,169 1,173 Other Curr Liabi 342 342 367 295 Change in Invest 33 -657 -213 -202

Tax 269 273 397 385 Total Liabilities & Equity 3,004 4,111 4,354 4,716 Others 16 56 60 43

PAT bef. MI & Assoc. 568 660 772 789 Net Fixed Assets 977 1,390 1,346 1,284 Investing C/F -459 -943 -334 -267

Minority Interest 0 0 0 0 Capital WIP 266 36 79 39 Change in Debt 149 14 -169 -134

Profit from Assoc. 0 0 0 0 Others 20 15 14 71 Change in Equity 0 700 0 -250

Recurring PAT 568 660 772 789 Inventory 638 561 649 835 Others -148 -185 -269 -63

Extraordinaires 0 0 0 0 Account Receivables 671 907 987 969 Financing C/F 1 530 -438 -447

Reported PAT 568 660 772 789 Other Current Assets 201 178 117 112 Net change in cash 30 120 -68 29

EPS (Rs) 12.3 14.3 16.7 17.1 Cash 232 1,023 1,162 1,406

RoE (%) 41 % 30 % 25 % 22 %

DPS (Rs) 4.6 3.1 3.5 1.0

Total Assets 3,004 4,111 4,354 4,716

RoIC (%) 30 % 23 % 21 % 20 %

CEPS (Rs) 13.8 16.8 20.2 20.7 Non-cash Working Capital 536 785 1,010 1,161 Core RoIC (%) 37 % 30 % 31 % 29 %

FCFPS (Rs) 0.2 4.5 11.8 14.1 Cash Conv Cycle 41.7 56.6 67.5 80.2 Div Payout (%) 25 % 29 % 34 % 2 %

BVPS (Rs) 34.8 61.1 72.5 83.4 WC Turnover 8.8 6.5 5.4 4.6

P/E 29.5 25.4 21.7 21.2

EBITDAM (%) 20 % 20 % 26 % 27 % FA Turnover 3.8 3.5 3.8 4.0 P/B 10.4 5.9 5.0 4.3

PATM (%) 12 % 13 % 16 % 16 % Net D/E 0.1 -0.2 -0.3 -0.3 P/FCFF 1,817.1 80.1 30.7 25.7

Tax Rate (%) 32 % 29 % 34 % 33 % Revenue/Capital Employed 2.4 1.7 1.5 1.3 EV/EBITDA 18.3 16.0 12.3 12.1

Sales growth (%) 23 % 8 % -2 % -3 %

Capital Employed/Equity 1.4 1.3 1.2 1.1

EV/Sales 3.6 3.2 2.9 2.9

FDEPS growth (%) 30 % 16 % 17 % 2 %

Dividend Yield (%) 1.3 % 0.8 % 1.0 % 0.3 %



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